UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04801
---------------------------------------------
SunAmerica Equity Funds
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
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: September 30
--------------------------
Date of reporting period: September 30, 2008
-------------------------
Item 1. Reports to Stockholders
[PHOTO]
ANNUAL REPORT 2008
SUNAMERICA
Equity Funds
www.sunamericafunds.com
September 30, 2008 ANNUAL REPORT
SUNAMERICA EQUITY FUNDS
SunAmerica Blue Chip Growth Fund (SVLAX)
SunAmerica Growth Opportunities Fund (SGWAX)
SunAmerica New Century Fund (SEGAX)
SunAmerica Growth and Income Fund (SEIAX)
SunAmerica Balanced Assets Fund (SBAAX)
SunAmerica International Equity Fund (SIEAX)
SunAmerica Value Fund (SSVAX)
SunAmerica Disciplined Growth Fund (TXMAX)
SunAmerica International Small-Cap Fund (SAESX)
Table of Contents
SHAREHOLDER LETTER...................................... 2
EXPENSE EXAMPLE......................................... 3
STATEMENT OF ASSETS AND LIABILITIES..................... 6
STATEMENT OF OPERATIONS................................. 10
STATEMENT OF CHANGES IN NET ASSETS...................... 12
FINANCIAL HIGHLIGHTS.................................... 15
PORTFOLIO OF INVESTMENTS................................ 24
NOTES TO FINANCIAL STATEMENTS........................... 66
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 88
APPROVAL OF ADVISORY AGREEMENTS......................... 89
TRUSTEE AND OFFICER INFORMATION......................... 94
SHAREHOLDER TAX INFORMATION............................. 97
COMPARISONS: FUNDS vs. INDEXES.......................... 99
Shareholder Letter
Dear Shareholder,
Enclosed is the annual report for the SunAmerica Equity Funds for the fiscal
year ended September 30, 2008.
Volatility in the U.S. equity markets was pronounced during the period as the
financial crises deepened. Undoubtedly, the third calendar quarter of 2008 will
long be remembered as one of the most challenging in the annals of financial
history. Government intervention and support for major U.S. financial
institutions, the failure of a top-tier investment bank, and a widespread fear
and panic among investors had gripped the market. The quarter was marked by the
largest single-day point drop in the Dow Jones Industrial Average--a decline of
over 770 points.
On top of this, but still lurking in the background, was an economy that showed
clear signs of deterioration. The recessionary environment in the U.S. began
impacting foreign economies, further exacerbating the impact on exporters. The
U.S. economy continued to struggle under the weight of a protracted decline in
housing prices, a weak labor market, and tighter credit conditions.
In response to these events, the U.S. government took swift action and Congress
approved a $700 billion bailout plan. Moreover, while the Federal Reserve left
interest rates unchanged during the final fiscal quarter, it cut the Federal
Open Market Committee (FOMC) rate a cumulative 2.75% during the annual period
to 2.0%.
Over the 12-month period ended September 30, 2008, seven of the nine
traditional domestic mutual fund categories had declines greater than 20.0%
with only Small-Cap Core (-18.7%) and Small-Cap Value (-16.4%) avoiding this
conventional bear market measure. The plunge in the international market was
even more pronounced, with Lipper's International and Emerging Market fund
categories returning -30.5% and -33.8%, respectively.
The serious challenges confronting both the equity markets and global economies
are evident. We at SunAmerica Asset Management continue to work diligently,
identifying potential opportunities to grow capital while keeping a keen eye on
the many risks that entails. We believe the combination of quantitative tools
and strong fundamental research, diligently applied, can achieve this dual
objective.
Thank you for your investment in SunAmerica Mutual Funds. If you have any
questions regarding our products, please contact your financial adviser or
contact us directly at 800-858-8850 or www.sunamericafunds.com.
Sincerely,
The SunAmerica Equity Funds Investment Professionals
John Massey Allison Larkin Robin Thorn
Steve Neimeth Brendan Voege Chantal Brennan
Paul Ma Ben Barrett
Jay Rushin Mike Beaulieu
Soraya Benitez Andy Sheridan
Sandra Salas Jay Merchant
Sarah Kallok Kara Murphy
Karen Forte
- --------
Past performance is no guarantee of future results.
2
SunAmerica Equity Funds
EXPENSE EXAMPLE -- September 30, 2008 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of a Fund (each, a "Fund" and collectively, the "Funds") in
the SunAmerica Equity Funds (the "Trust"), you may incur two types of costs:
(1) transaction costs, including sales charges (loads) on purchase payments,
contingent deferred sales charges, redemption fees (applicable to Class A of
International Equity Fund and International Small-Cap Fund only) and (2)
ongoing costs, including management fees; distribution and service fees; and
other Fund expenses. The Example set forth below is intended to help you
understand your ongoing costs (in dollars) of investing in the Funds and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at April 1, 2008 and
held until September 30, 2008.
Actual Expenses
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended September 30, 2008" to estimate the expenses you paid on your
account during this period. For shareholder accounts in classes other than
Class I and Class Z, the "Expenses Paid During the Six Months Ended September
30, 2008" column does not include small account fees that may be charged if
your account balance is below $500 ($250 for retirement plan accounts). In
addition, the "Expenses Paid During the Six Months Ended September 30, 2008"
column does not include administrative fees that may apply to qualified
retirement plan accounts. See the Funds' prospectus and/or your retirement plan
documents for full description of these fees. Had these fees been included, the
"Expenses Paid During the Six Months Ended September 30, 2008" column would
have been higher and the "Ending Account Value" would have been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is
not the Fund's actual return. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or expenses you paid
for the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder
reports of other funds. For shareholder accounts in classes other than Class I
and Class Z the "Expenses Paid During the Six Months Ended September 30, 2008"
column does not include small account fees that may be charged if your account
balance is below $500 ($250 for retirement plan accounts). In addition, the
"Expenses Paid During the Six Months Ended September 30, 2008" column does not
include administrative fees that may apply to qualified retirement plan
accounts. See the Funds' prospectus and/or your retirement plan document for
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended September 30, 2008" column would have been
higher and the "Ending Account Value" would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, redemption
fees (applicable to Class A of International Equity Fund and International
Small-Cap Fund only); small account fees and administrative fees, if applicable
to your account. Please refer to the Fund's prospectus and/or qualified
retirement plan document for more information. Therefore, the "Hypothetical"
example is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs and other fees were included, your costs would have
been higher.
3
SunAmerica Equity Funds
EXPENSE EXAMPLE -- September 30, 2008 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------ ------------------------------------------
Ending Account
Ending Account Expense Paid Value using Expense Paid
Value Using During the a Hypothetical During the Expense
Beginning Actual Six Months Beginning 5% Assumed Six Months Ratio
Account Value Return at Ended Account Value Return at Ended as of
at April 1, September 30, September 30, at April 1, September 30, September 30, September 30,
Fund 2008 2008 2008 2008 2008 2008 2008*
- ----------------------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------
Blue Chip Growth Fund@
Class A.................... $1,000.00 $899.82 $ 7.84 $1,000.00 $1,016.75 $ 8.32 1.65%
Class B.................... $1,000.00 $896.91 $11.19 $1,000.00 $1,013.20 $11.88 2.36%
Class C.................... $1,000.00 $896.05 $11.95 $1,000.00 $1,012.40 $12.68 2.52%
Class I#................... $1,000.00 $900.77 $ 6.32 $1,000.00 $1,018.35 $ 6.71 1.33%
Growth Opportunities Fund@
Class A#................... $1,000.00 $860.40 $ 8.93 $1,000.00 $1,015.40 $ 9.67 1.92%
Class B#................... $1,000.00 $856.92 $12.07 $1,000.00 $1,012.00 $13.08 2.60%
Class C#................... $1,000.00 $856.59 $12.67 $1,000.00 $1,011.35 $13.73 2.73%
Class I#................... $1,000.00 $862.98 $ 6.19 $1,000.00 $1,018.35 $ 6.71 1.33%
New Century Fund@
Class A#................... $1,000.00 $714.62 $ 7.07 $1,000.00 $1,016.75 $ 8.32 1.65%
Class B#................... $1,000.00 $711.62 $10.74 $1,000.00 $1,012.45 $12.63 2.51%
Class C#................... $1,000.00 $712.58 $ 9.16 $1,000.00 $1,014.30 $10.78 2.14%
Growth and Income Fund@
Class A.................... $1,000.00 $882.44 $ 7.53 $1,000.00 $1,017.00 $ 8.07 1.60%
Class B.................... $1,000.00 $879.69 $10.71 $1,000.00 $1,013.60 $11.48 2.28%
Class C.................... $1,000.00 $879.60 $10.67 $1,000.00 $1,013.65 $11.43 2.27%
Class I#................... $1,000.00 $883.74 $ 6.22 $1,000.00 $1,018.40 $ 6.66 1.32%
Balanced Assets Fund@
Class A#................... $1,000.00 $919.74 $ 7.63 $1,000.00 $1,017.05 $ 8.02 1.59%
Class B#................... $1,000.00 $916.85 $11.02 $1,000.00 $1,013.50 $11.58 2.30%
Class C#................... $1,000.00 $916.32 $11.02 $1,000.00 $1,013.50 $11.58 2.30%
Class I#................... $1,000.00 $920.76 $ 6.29 $1,000.00 $1,018.45 $ 6.61 1.31%
International Equity Fund@
Class A.................... $1,000.00 $762.72 $ 8.59 $1,000.00 $1,015.25 $ 9.82 1.95%
Class B#................... $1,000.00 $761.14 $11.23 $1,000.00 $1,012.25 $12.83 2.55%
Class C#................... $1,000.00 $760.32 $11.22 $1,000.00 $1,012.25 $12.83 2.55%
Class I#................... $1,000.00 $763.06 $ 7.93 $1,000.00 $1,016.00 $ 9.07 1.80%
Value Fund@
Class A#................... $1,000.00 $905.47 $ 7.76 $1,000.00 $1,016.85 $ 8.22 1.63%
Class B#................... $1,000.00 $902.96 $10.85 $1,000.00 $1,013.60 $11.48 2.28%
Class C#................... $1,000.00 $902.96 $10.85 $1,000.00 $1,013.60 $11.48 2.28%
Class I#................... $1,000.00 $906.05 $ 7.29 $1,000.00 $1,017.35 $ 7.72 1.53%
Class Z#................... $1,000.00 $907.98 $ 5.06 $1,000.00 $1,019.70 $ 5.35 1.06%
Disciplined Growth Fund@
Class A#................... $1,000.00 $761.87 $ 6.39 $1,000.00 $1,017.75 $ 7.31 1.45%
Class B#................... $1,000.00 $759.22 $ 9.24 $1,000.00 $1,014.50 $10.58 2.10%
Class C#................... $1,000.00 $759.39 $ 9.24 $1,000.00 $1,014.50 $10.58 2.10%
International Small-Cap Fund
Class A#................... $1,000.00 $707.98 $ 8.11 $1,000.00 $1,015.50 $ 9.57 1.90%
Class B#................... $1,000.00 $705.33 $10.87 $1,000.00 $1,012.25 $12.83 2.55%
Class C#................... $1,000.00 $705.33 $10.87 $1,000.00 $1,012.25 $12.83 2.55%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183 days divided by 366
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges, redemption fees
(International Equity Fund and International Small-Cap Fund only), small
account fees and administrative fees, if applicable to your account. Please
refer to your Prospectus and/or qualified retirement plan document for more
information.
# During the stated period, the investment advisor either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Funds or
through recoupment provisions, recovered a portion of or all fees and
expenses waived or reimbursed in the previous two fiscal years. As a result,
if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended September 30,
2008" and the "Expense Ratios" would have been higher. If these fees and
expenses had not been recouped, the "Actual/Hypothetical Ending Account
Value" would have been higher and the "Actual/Hypothetical Expenses Paid
During the Six Months Ended September 30, 2008" and "Expense Ratios" would
have been lower.
@ Through expense offset arrangements resulting from broker commission
recapture, a portion of the Fund's expenses have been reduced. Had the
expense reductions been applied, the Expense Example would have been as
follows:
4
SunAmerica Equity Funds
EXPENSE EXAMPLE -- September 30, 2008 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------ ------------------------------------------
Ending Account
Ending Account Expense Paid Value using Expense Paid
Value Using During the a Hypothetical During the Expense
Beginning Actual Six Months Beginning 5% Assumed Six Months Ratio
Account Value Return at Ended Account Value Return at Ended as of
at April 1, September 30, September 30, at April 1, September 30, September 30, September 30,
Fund 2008 2008 2008 2008 2008 2008 2008*
- -------------------------- ------------- -------------- ------------- ------------- -------------- ------------- -------------
Blue Chip Growth Fund
Class A................. $1,000.00 $899.82 $ 7.84 $1,000.00 $1,016.75 $ 8.32 1.65%
Class B................. $1,000.00 $896.91 $11.19 $1,000.00 $1,013.20 $11.88 2.36%
Class C................. $1,000.00 $896.05 $11.95 $1,000.00 $1,012.40 $12.68 2.52%
Class I#................ $1,000.00 $900.77 $ 6.32 $1,000.00 $1,018.35 $ 6.71 1.33%
Growth Opportunities Fund
Class A#................ $1,000.00 $860.40 $ 8.09 $1,000.00 $1,016.30 $ 8.77 1.74%
Class B#................ $1,000.00 $856.92 $11.23 $1,000.00 $1,012.90 $12.18 2.42%
Class C#................ $1,000.00 $856.59 $11.84 $1,000.00 $1,012.25 $12.83 2.55%
Class I#................ $1,000.00 $862.98 $ 5.36 $1,000.00 $1,019.25 $ 5.81 1.15%
New Century Fund
Class A#................ $1,000.00 $714.62 $ 6.17 $1,000.00 $1,017.80 $ 7.26 1.44%
Class B#................ $1,000.00 $711.62 $ 9.80 $1,000.00 $1,013.55 $11.53 2.29%
Class C#................ $1,000.00 $712.58 $ 8.26 $1,000.00 $1,015.35 $ 9.72 1.93%
Growth and Income Fund
Class A................. $1,000.00 $882.44 $ 7.39 $1,000.00 $1,017.15 $ 7.92 1.57%
Class B................. $1,000.00 $879.69 $10.57 $1,000.00 $1,013.75 $11.33 2.25%
Class C................. $1,000.00 $879.60 $10.53 $1,000.00 $1,013.80 $11.28 2.24%
Class I#................ $1,000.00 $883.74 $ 6.08 $1,000.00 $1,018.55 $ 6.51 1.29%
Balanced Assets Fund
Class A#................ $1,000.00 $919.74 $ 7.58 $1,000.00 $1,017.10 $ 7.97 1.58%
Class B#................ $1,000.00 $916.85 $10.97 $1,000.00 $1,013.55 $11.53 2.29%
Class C#................ $1,000.00 $916.32 $10.97 $1,000.00 $1,013.55 $11.53 2.29%
Class I#................ $1,000.00 $920.76 $ 6.24 $1,000.00 $1,018.50 $ 6.56 1.30%
International Equity Fund
Class A................. $1,000.00 $762.72 $ 8.59 $1,000.00 $1,015.25 $ 9.82 1.95%
Class B#................ $1,000.00 $761.14 $11.23 $1,000.00 $1,012.25 $12.83 2.55%
Class C#................ $1,000.00 $760.32 $11.22 $1,000.00 $1,012.25 $12.83 2.55%
Class I#................ $1,000.00 $763.06 $ 7.93 $1,000.00 $1,016.00 $ 9.07 1.80%
Value Fund
Class A#................ $1,000.00 $905.47 $ 7.62 $1,000.00 $1,017.00 $ 8.07 1.60%
Class B#................ $1,000.00 $902.96 $10.70 $1,000.00 $1,013.75 $11.33 2.25%
Class C#................ $1,000.00 $902.96 $10.70 $1,000.00 $1,013.75 $11.33 2.25%
Class I#................ $1,000.00 $906.05 $ 7.15 $1,000.00 $1,017.50 $ 7.57 1.50%
Class Z#................ $1,000.00 $907.98 $ 4.91 $1,000.00 $1,019.85 $ 5.20 1.03%
Disciplined Growth Fund
Class A#................ $1,000.00 $761.87 $ 6.03 $1,000.00 $1,018.15 $ 6.91 1.37%
Class B#................ $1,000.00 $759.22 $ 8.88 $1,000.00 $1,014.90 $10.18 2.02%
Class C#................ $1,000.00 $759.39 $ 8.88 $1,000.00 $1,014.90 $10.18 2.02%
5
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2008
Blue Chip Growth New
Growth Opportunities Century
Fund Fund Fund
------------ ------------- -------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*........... $ 47,535,215 $ 24,421,823 $ 36,051,352
Short-term investment securities, at market value (unaffiliated)*.......... -- -- --
Repurchase agreements (cost approximates market value)..................... 2,332,000 7,923,000 5,662,000
------------ ------------- -------------
Total investments........................................................ 49,867,215 32,344,823 41,713,352
------------ ------------- -------------
Cash....................................................................... 155 138 572
Foreign cash*.............................................................. -- -- --
Receivable for:
Fund shares sold......................................................... 3,247 903 1,160
Dividends and interest................................................... 19,912 375 1,628
Investments sold......................................................... 322,036 1,459,739 13,630,427
Prepaid expenses and other assets.......................................... 3,732 40,330 65,790
Due from investment adviser for expense reimbursements/fee waivers......... 498 3,054 935
------------ ------------- -------------
Total assets............................................................... 50,216,795 33,849,362 55,413,864
------------ ------------- -------------
LIABILITIES:
Payable for:
Fund shares redeemed..................................................... 133,990 35,300 47,739
Investments purchased.................................................... -- 1,489,199 7,340,356
Investment advisory and management fees.................................. 33,002 21,435 33,011
Distribution and service maintenance fees................................ 21,376 15,939 19,238
Transfer agent fees and expenses......................................... 20,979 16,184 25,054
Trustees' fees and expenses.............................................. 27,883 24,411 47,785
Other accrued expenses................................................... 65,413 77,804 85,971
------------ ------------- -------------
Total liabilities.......................................................... 302,643 1,680,272 7,599,154
------------ ------------- -------------
Net Assets................................................................. $ 49,914,152 $ 32,169,090 $ 47,814,710
============ ============= =============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value.............................. $ 34,494 $ 26,275 $ 39,461
Paid-in capital............................................................ 105,580,532 238,106,158 182,181,352
------------ ------------- -------------
105,615,026 238,132,433 182,220,813
Accumulated undistributed net investment income (loss)..................... (27,741) (24,529) (47,437)
Accumulated undistributed net realized gain (loss) on investments, futures
contracts, options contracts, securities sold short, and foreign exchange
transactions.............................................................. (53,435,163) (204,349,969) (132,794,047)
Unrealized appreciation (depreciation) on investments...................... (2,237,970) (1,588,845) (1,564,619)
Unrealized foreign exchange gain (loss) on other assets and liabilities.... -- -- --
Accrued capital gains tax on unrealized appreciation (depreciation)........ -- -- --
------------ ------------- -------------
Net Assets............................................................... $ 49,914,152 $ 32,169,090 $ 47,814,710
============ ============= =============
*Cost
Long-term investment securities (unaffiliated)........................... $ 49,773,185 $ 26,010,668 $ 37,615,971
============ ============= =============
Short-term investment securities (unaffiliated).......................... $ -- $ -- $ --
============ ============= =============
Foreign cash............................................................. $ -- $ -- $ --
============ ============= =============
Growth and Balanced
Income Assets
Fund Fund
------------ ------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*........... $ 69,185,716 $105,922,684
Short-term investment securities, at market value (unaffiliated)*.......... -- --
Repurchase agreements (cost approximates market value)..................... 4,283,000 4,099,000
------------ ------------
Total investments........................................................ 73,468,716 110,021,684
------------ ------------
Cash....................................................................... 75 1,383
Foreign cash*.............................................................. -- --
Receivable for:
Fund shares sold......................................................... 12,629 2,183
Dividends and interest................................................... 150,360 560,823
Investments sold......................................................... 2,356,191 2,576,354
Prepaid expenses and other assets.......................................... 6,506 8,568
Due from investment adviser for expense reimbursements/fee waivers......... 2,936 2,562
------------ ------------
Total assets............................................................... 75,997,413 113,173,557
------------ ------------
LIABILITIES:
Payable for:
Fund shares redeemed..................................................... 151,268 71,276
Investments purchased.................................................... 2,803,169 2,111,528
Investment advisory and management fees.................................. 47,595 71,758
Distribution and service maintenance fees................................ 36,202 44,066
Transfer agent fees and expenses......................................... 27,939 38,321
Trustees' fees and expenses.............................................. 38,145 74,430
Other accrued expenses................................................... 67,053 95,373
------------ ------------
Total liabilities.......................................................... 3,171,371 2,506,752
------------ ------------
Net Assets................................................................. $ 72,826,042 $110,666,805
============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value.............................. $ 60,634 $ 85,329
Paid-in capital............................................................ 120,016,880 191,846,041
------------ ------------
120,077,514 191,931,370
Accumulated undistributed net investment income (loss)..................... 649,285 241,557
Accumulated undistributed net realized gain (loss) on investments, futures
contracts, options contracts, securities sold short, and foreign exchange
transactions.............................................................. (40,487,192) (74,341,894)
Unrealized appreciation (depreciation) on investments...................... (7,413,565) (7,164,228)
Unrealized foreign exchange gain (loss) on other assets and liabilities.... -- --
Accrued capital gains tax on unrealized appreciation (depreciation)........ -- --
------------ ------------
Net Assets............................................................... $ 72,826,042 $110,666,805
============ ============
*Cost
Long-term investment securities (unaffiliated)........................... $ 76,599,281 $113,086,912
============ ============
Short-term investment securities (unaffiliated).......................... $ -- $ --
============ ============
Foreign cash............................................................. $ -- $ --
============ ============
See Notes to Financial Statements
6
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2008 -- (continued)
Blue Chip Growth New Growth and Balanced
Growth Opportunities Century Income Assets
Fund Fund Fund Fund Fund
----------- ------------- ----------- ----------- -----------
Class A (unlimited shares authorized):
Net assets................................................... $38,926,997 $21,704,891 $41,425,343 $48,021,741 $91,315,624
Shares of beneficial interest issued and outstanding......... 2,610,804 1,693,360 3,349,023 3,902,587 7,040,136
Net asset value and redemption price per share............... $ 14.91 $ 12.82 $ 12.37 $ 12.31 $ 12.97
Maximum sales charge (5.75% of offering price)............... 0.91 0.78 0.75 0.75 0.79
----------- ----------- ----------- ----------- -----------
Maximum offering price to public............................. $ 15.82 $ 13.60 $ 13.12 13.06 13.76
=========== =========== =========== =========== ===========
Class B (unlimited shares authorized):
Net assets................................................... $ 7,524,995 $ 6,404,911 $ 3,906,540 $ 9,729,265 $ 9,252,464
Shares of beneficial interest issued and outstanding......... 576,713 571,725 366,392 847,830 714,337
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge). $ 13.05 $ 11.20 $ 10.66 $ 11.48 $ 12.95
=========== =========== =========== =========== ===========
Class C (unlimited shares authorized):
Net assets................................................... $ 2,938,529 $ 3,977,038 $ 2,482,827 $14,815,841 $ 9,552,294
Shares of beneficial interest issued and outstanding......... 227,344 356,118 230,681 1,292,027 736,330
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge). $ 12.93 $ 11.17 $ 10.76 $ 11.47 $ 12.97
=========== =========== =========== =========== ===========
Class I (unlimited shares authorized):
Net assets................................................... $ 523,631 $ 82,250 $ -- $ 259,195 $ 546,423
Shares of beneficial interest issued and outstanding......... 34,535 6,280 -- 20,916 42,089
Net asset value, offering and redemption price per share..... $ 15.16 $ 13.10 $ -- $ 12.39 $ 12.98
=========== =========== =========== =========== ===========
Class Z (unlimited shares authorized):
Net assets................................................... $ -- $ -- $ -- $ -- $ --
Shares of beneficial interest issued and outstanding......... -- -- -- -- --
Net asset value, offering and redemption price per share..... $ -- $ -- $ -- $ -- $ --
=========== =========== =========== =========== ===========
See Notes to Financial Statements
7
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2008 -- (continued)
International
Equity Value
Fund Fund
------------- ------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*.............................. $ 70,810,186 $132,124,677
Short-term investment securities, at market value (unaffiliated)*............................. -- --
Repurchase agreements (cost approximates market value)........................................ 2,809,000 4,305,000
------------ ------------
Total investments........................................................................... 73,619,186 136,429,677
------------ ------------
Cash.......................................................................................... 70,735 528
Foreign cash*................................................................................. 491,463 --
Receivable for:
Fund shares sold............................................................................ 23,445 81,705
Dividends and interest...................................................................... 293,937 291,955
Investments sold............................................................................ 3,205,614 9,247,093
Prepaid expenses and other assets............................................................. 3,975 14,527
Due from investment adviser for expense reimbursements/fee waivers............................ 4,665 4,797
------------ ------------
Total assets.................................................................................. 77,713,020 146,070,282
------------ ------------
LIABILITIES:
Payable for:
Fund shares redeemed........................................................................ 587,862 518,995
Investments purchased....................................................................... 2,027,515 5,967,602
Investment advisory and management fees..................................................... 68,219 121,164
Distribution and service maintenance fees................................................... 37,628 54,540
Transfer agent fees and expenses............................................................ 25,823 43,220
Trustees' fees and expenses................................................................. 20,312 35,528
Other accrued expenses...................................................................... 98,143 76,692
------------ ------------
Total liabilities............................................................................. 2,865,502 6,817,741
------------ ------------
Net Assets.................................................................................... $ 74,847,518 $139,252,541
============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value................................................. $ 61,817 $ 110,200
Paid-in capital............................................................................... 94,328,696 166,102,604
------------ ------------
94,390,513 166,212,804
Accumulated undistributed net investment income (loss)........................................ (31,117) 1,540,237
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options
contracts, securities sold short, and foreign exchange transactions.......................... (5,274,053) (19,345,336)
Unrealized appreciation (depreciation) on investments......................................... (14,234,345) (9,155,164)
Unrealized foreign exchange gain (loss) on other assets and liabilities....................... (3,480) --
Accrued capital gains tax on unrealized appreciation (depreciation)........................... -- --
------------ ------------
Net Assets.................................................................................. $ 74,847,518 $139,252,541
============ ============
*Cost
Long-term investment securities (unaffiliated).............................................. $ 85,044,531 $141,279,841
============ ============
Short-term investment securities (unaffiliated)............................................. $ -- $ --
============ ============
Foreign cash................................................................................ $ 494,050 $ --
============ ============
Disciplined International
Growth Small-Cap
Fund Fund
------------ -------------
ASSETS:
Long-term investment securities, at market value (unaffiliated)*.............................. $ 34,462,587 $18,946,489
Short-term investment securities, at market value (unaffiliated)*............................. -- 340,000
Repurchase agreements (cost approximates market value)........................................ 998,000 --
------------ -----------
Total investments........................................................................... 35,460,587 19,286,489
------------ -----------
Cash.......................................................................................... 1,184,585 534
Foreign cash*................................................................................. 54,121 196,754
Receivable for:
Fund shares sold............................................................................ 41,820 621
Dividends and interest...................................................................... 13,556 62,575
Investments sold............................................................................ 11,969,856 1,006,726
Prepaid expenses and other assets............................................................. 47,581 2,066
Due from investment adviser for expense reimbursements/fee waivers............................ 391 10,733
------------ -----------
Total assets.................................................................................. 48,772,497 20,566,498
------------ -----------
LIABILITIES:
Payable for:
Fund shares redeemed........................................................................ 744,541 29,484
Investments purchased....................................................................... 7,702,739 777,363
Investment advisory and management fees..................................................... 32,127 20,439
Distribution and service maintenance fees................................................... 25,395 7,932
Transfer agent fees and expenses............................................................ 11,563 3,169
Trustees' fees and expenses................................................................. 12,012 836
Other accrued expenses...................................................................... 55,625 65,704
------------ -----------
Total liabilities............................................................................. 8,584,002 904,927
------------ -----------
Net Assets.................................................................................... $ 40,188,495 $19,661,571
============ ===========
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $.01 par value................................................. $ 37,266 $ 23,632
Paid-in capital............................................................................... 75,800,356 29,646,948
------------ -----------
75,837,622 29,670,580
Accumulated undistributed net investment income (loss)........................................ (10,004) (2,969)
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options
contracts, securities sold short, and foreign exchange transactions.......................... (33,813,824) (4,477,441)
Unrealized appreciation (depreciation) on investments......................................... (1,826,215) (5,520,826)
Unrealized foreign exchange gain (loss) on other assets and liabilities....................... 916 (7,806)
Accrued capital gains tax on unrealized appreciation (depreciation)........................... -- 33
------------ -----------
Net Assets.................................................................................. $ 40,188,495 $19,661,571
============ ===========
*Cost
Long-term investment securities (unaffiliated).............................................. $ 36,288,802 $24,467,315
============ ===========
Short-term investment securities (unaffiliated)............................................. $ -- $ 340,000
============ ===========
Foreign cash................................................................................ $ 53,266 $ 200,490
============ ===========
See Notes to Financial Statements
8
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2008 -- (continued)
International Disciplined International
Equity Value Growth Small-Cap
Fund Fund Fund Fund
------------- ----------- ----------- -------------
Class A (unlimited shares authorized):
Net assets................................................... $46,383,992 $77,903,128 $19,949,267 $16,829,600
Shares of beneficial interest issued and outstanding......... 3,729,693 6,113,328 1,801,299 2,018,280
Net asset value and redemption price per share............... $ 12.44 $ 12.74 $ 11.07 $ 8.34
Maximum sales charge (5.75% of offering price)............... 0.76 0.78 0.68 0.51
----------- ----------- ----------- -----------
Maximum offering price to public............................. $ 13.20 $ 13.52 $ 11.75 $ 8.85
=========== =========== =========== ===========
Class B (unlimited shares authorized):
Net assets................................................... $ 9,278,586 $21,303,802 $ 3,820,396 $ 632,890
Shares of beneficial interest issued and outstanding......... 811,393 1,788,484 363,677 77,063
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge). $ 11.44 $ 11.91 $ 10.50 $ 8.21
=========== =========== =========== ===========
Class C (unlimited shares authorized):
Net assets................................................... $14,221,063 $14,194,130 $16,418,832 $ 2,199,081
Shares of beneficial interest issued and outstanding......... 1,245,467 1,192,102 1,561,648 267,811
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge). $ 11.42 $ 11.91 $ 10.51 $ 8.21
=========== =========== =========== ===========
Class I (unlimited shares authorized):
Net assets................................................... $ 4,963,877 $ 24,517 $ -- $ --
Shares of beneficial interest issued and outstanding......... 395,175 1,926 -- --
Net asset value, offering and redemption price per share..... $ 12.56 $ 12.73 $ -- $ --
=========== =========== =========== ===========
Class Z (unlimited shares authorized):
Net assets................................................... $ -- $25,826,964 $ -- $ --
Shares of beneficial interest issued and outstanding......... -- 1,924,180 -- --
Net asset value, offering and redemption price per share..... $ -- $ 13.42 $ -- $ --
=========== =========== =========== ===========
See Notes to Financial Statements
9
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the year ended September 30, 2008
Blue Chip Growth
Growth Opportunities
Fund Fund
------------ -------------
INVESTMENT INCOME:
Dividends (unaffiliated)................................................................... $ 565,499 $ 209,356
Interest (unaffiliated).................................................................... 46,210 193,996
------------ ------------
Total investment income*.................................................................. 611,709 403,352
------------ ------------
EXPENSES:
Investment advisory and management fees.................................................... 471,577 340,144
Distribution and service maintenance fees
Class A................................................................................... 164,668 103,889
Class B................................................................................... 113,225 100,057
Class C................................................................................... 38,847 55,519
Service fees Class I....................................................................... 1,554 281
Transfer agent fees and expenses
Class A................................................................................... 135,076 93,681
Class B................................................................................... 38,550 33,745
Class C................................................................................... 11,864 17,771
Class I................................................................................... 1,741 563
Registration fees
Class A................................................................................... 13,571 12,676
Class B................................................................................... 7,959 9,145
Class C................................................................................... 9,325 10,478
Class I................................................................................... 7,392 9,085
Class Z................................................................................... -- --
Custodian and accounting fees.............................................................. 41,591 69,253
Reports to shareholders.................................................................... 26,497 32,573
Audit and tax fees......................................................................... 37,039 37,052
Legal fees................................................................................. 16,274 12,216
Trustees' fees and expenses................................................................ 5,462 4,316
Interest expense........................................................................... -- --
Other expenses............................................................................. 10,763 7,985
------------ ------------
Total expenses before fee waivers, expense reimbursements, expense recoupments,
custody credits and fees paid indirectly................................................. 1,152,975 950,429
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)......... (8,443) (10,252)
Custody credits earned on cash balances................................................... (28) (546)
Fees paid indirectly (Note 5)............................................................. (5,629) (85,021)
------------ ------------
Net expenses.............................................................................. 1,138,875 854,610
------------ ------------
Net investment income (loss)................................................................. (527,166) (451,258)
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**..................................... 308,634 (16,211,550)
Net realized foreign exchange gain (loss) on other assets and liabilities.................... -- --
Net realized gain (loss) on disposal of investments in violation of investments restrictions
(Note 4).................................................................................... 19 --
------------ ------------
Net realized gain (loss) on investments and foreign currencies............................... 308,653 (16,211,550)
------------ ------------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)............... (13,548,306) (2,017,924)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities............ -- --
Change in unrealized appreciation (depreciation) on securities sold short.................... -- --
Change in accrued capital gains tax on unrealized appreciation (depreciation)................ -- --
------------ ------------
Net unrealized gain (loss) on investments and foreign currencies............................. (13,548,306) (2,017,924)
------------ ------------
Net realized and unrealized gain (loss) on investments and foreign currencies................ (13,239,653) (18,229,474)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.............................. $(13,766,819) $(18,680,732)
============ ============
- --------
* Net of foreign withholding taxes on interest and dividends of.............................. $ 1,227 $ 139
============ ============
** Net of foreign withholding taxes on capital gains of...................................... $ -- $ --
============ ============
New Growth and
Century Income
Fund Fund
------------ ------------
INVESTMENT INCOME:
Dividends (unaffiliated)................................................................... $ 389,549 $ 2,255,216
Interest (unaffiliated).................................................................... 258,371 84,865
------------ ------------
Total investment income*.................................................................. 647,920 2,340,081
------------ ------------
EXPENSES:
Investment advisory and management fees.................................................... 585,692 689,444
Distribution and service maintenance fees
Class A................................................................................... 233,238 202,769
Class B................................................................................... 72,414 144,469
Class C................................................................................... 42,115 192,412
Service fees Class I....................................................................... -- 759
Transfer agent fees and expenses
Class A................................................................................... 188,641 161,799
Class B................................................................................... 24,837 43,457
Class C................................................................................... 15,167 52,878
Class I................................................................................... -- 1,443
Registration fees
Class A................................................................................... 14,275 13,334
Class B................................................................................... 10,165 8,151
Class C................................................................................... 8,751 9,725
Class I................................................................................... -- 9,173
Class Z................................................................................... -- --
Custodian and accounting fees.............................................................. 55,417 47,470
Reports to shareholders.................................................................... 37,234 35,080
Audit and tax fees......................................................................... 38,040 37,960
Legal fees................................................................................. 21,371 21,780
Trustees' fees and expenses................................................................ 8,177 7,924
Interest expense........................................................................... -- 130
Other expenses............................................................................. 16,892 14,893
------------ ------------
Total expenses before fee waivers, expense reimbursements, expense recoupments,
custody credits and fees paid indirectly................................................. 1,372,426 1,695,050
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)......... (17,639) (10,198)
Custody credits earned on cash balances................................................... (4,688) (35)
Fees paid indirectly (Note 5)............................................................. (106,303) (32,244)
------------ ------------
Net expenses.............................................................................. 1,243,796 1,652,573
------------ ------------
Net investment income (loss)................................................................. (595,876) 687,508
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**..................................... (38,250,023) (6,333,715)
Net realized foreign exchange gain (loss) on other assets and liabilities.................... -- --
Net realized gain (loss) on disposal of investments in violation of investments restrictions
(Note 4).................................................................................... -- --
------------ ------------
Net realized gain (loss) on investments and foreign currencies............................... (38,250,023) (6,333,715)
------------ ------------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)............... (2,122,695) (17,055,222)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities............ -- --
Change in unrealized appreciation (depreciation) on securities sold short.................... -- --
Change in accrued capital gains tax on unrealized appreciation (depreciation)................ -- --
------------ ------------
Net unrealized gain (loss) on investments and foreign currencies............................. (2,122,695) (17,055,222)
------------ ------------
Net realized and unrealized gain (loss) on investments and foreign currencies................ (40,372,718) (23,388,937)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.............................. $(40,968,594) $(22,701,429)
============ ============
- --------
* Net of foreign withholding taxes on interest and dividends of.............................. $ 250 $ (4,409)
============ ============
** Net of foreign withholding taxes on capital gains of...................................... $ -- $ --
============ ============
Balanced
Assets
Fund
------------
INVESTMENT INCOME:
Dividends (unaffiliated)................................................................... $ 1,591,549
Interest (unaffiliated).................................................................... 2,818,603
------------
Total investment income*.................................................................. 4,410,152
------------
EXPENSES:
Investment advisory and management fees.................................................... 1,000,910
Distribution and service maintenance fees
Class A................................................................................... 381,835
Class B................................................................................... 119,860
Class C................................................................................... 117,638
Service fees Class I....................................................................... 1,523
Transfer agent fees and expenses
Class A................................................................................... 317,791
Class B................................................................................... 37,144
Class C................................................................................... 31,390
Class I................................................................................... 1,515
Registration fees
Class A................................................................................... 14,960
Class B................................................................................... 7,992
Class C................................................................................... 9,698
Class I................................................................................... 9,190
Class Z................................................................................... --
Custodian and accounting fees.............................................................. 124,559
Reports to shareholders.................................................................... 49,716
Audit and tax fees......................................................................... 41,115
Legal fees................................................................................. 23,933
Trustees' fees and expenses................................................................ 11,677
Interest expense........................................................................... 427
Other expenses............................................................................. 20,500
------------
Total expenses before fee waivers, expense reimbursements, expense recoupments,
custody credits and fees paid indirectly................................................. 2,323,373
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)......... (34,384)
Custody credits earned on cash balances................................................... (758)
Fees paid indirectly (Note 5)............................................................. (16,487)
------------
Net expenses.............................................................................. 2,271,744
------------
Net investment income (loss)................................................................. 2,138,408
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**..................................... (5,243,564)
Net realized foreign exchange gain (loss) on other assets and liabilities.................... --
Net realized gain (loss) on disposal of investments in violation of investments restrictions
(Note 4).................................................................................... 12
------------
Net realized gain (loss) on investments and foreign currencies............................... (5,243,552)
------------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)............... (20,160,308)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities............ --
Change in unrealized appreciation (depreciation) on securities sold short.................... (6,456)
Change in accrued capital gains tax on unrealized appreciation (depreciation)................ --
------------
Net unrealized gain (loss) on investments and foreign currencies............................. (20,166,764)
------------
Net realized and unrealized gain (loss) on investments and foreign currencies................ (25,410,316)
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.............................. $(23,271,908)
============
- --------
* Net of foreign withholding taxes on interest and dividends of.............................. $ (1,190)
============
** Net of foreign withholding taxes on capital gains of...................................... $ --
============
See Notes to Financial Statements
10
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the year ended September 30, 2008 --
(continued)
International
Equity Value
Fund Fund
------------- ------------
INVESTMENT INCOME:
Dividends (unaffiliated)................................................................... $ 3,235,254 $ 4,897,841
Interest (unaffiliated).................................................................... 19,469 204,634
------------ ------------
Total investment income*.................................................................. 3,254,723 5,102,475
------------ ------------
EXPENSES:
Investment advisory and management fees.................................................... 1,137,864 1,782,717
Distribution and service maintenance fees
Class A................................................................................... 233,932 349,432
Class B................................................................................... 164,766 291,895
Class C................................................................................... 234,793 190,593
Service fees Class I....................................................................... 17,485 73
Transfer agent fees and expenses
Class A................................................................................... 176,792 254,349
Class B................................................................................... 46,949 79,830
Class C................................................................................... 61,466 48,564
Class I................................................................................... 15,893 65
Registration fees
Class A................................................................................... 16,879 14,758
Class B................................................................................... 10,730 9,358
Class C................................................................................... 8,633 8,599
Class I................................................................................... 10,507 4,965
Class Z................................................................................... -- 11,011
Custodian and accounting fees.............................................................. 165,974 70,585
Reports to shareholders.................................................................... 31,543 44,530
Audit and tax fees......................................................................... 46,509 37,944
Legal fees................................................................................. 22,375 26,778
Trustees' fees and expenses................................................................ 11,347 17,103
Interest expense........................................................................... 719 --
Other expenses............................................................................. 18,993 16,256
------------ ------------
Total expenses before fee waivers, expense reimbursements, expense recoupments,
custody credits and fees paid indirectly................................................. 2,434,149 3,259,405
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)......... (17,098) (211,663)
Custody credits earned on cash balances................................................... (2,455) (215)
Fees paid indirectly (Note 5)............................................................. (1,910) (57,737)
------------ ------------
Net expenses.............................................................................. 2,412,686 2,989,790
------------ ------------
Net investment income (loss)................................................................. 842,037 2,112,685
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**..................................... (1,483,662) (15,674,539)
Net realized foreign exchange gain (loss) on other assets and liabilities.................... 67,437 --
Net realized gain (loss) on disposal of investments in violation of investments restrictions
(Note 4).................................................................................... -- --
------------ ------------
Net realized gain (loss) on investments and foreign currencies............................... (1,416,225) (15,674,539)
------------ ------------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)............... (37,539,385) (30,590,663)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities............ 1,961 --
Change in unrealized appreciation (depreciation) on securities sold short.................... -- --
Change in accrued capital gains tax on unrealized appreciation (depreciation)................ -- --
------------ ------------
Net unrealized gain (loss) on investments and foreign currencies............................. (37,537,424) (30,590,663)
------------ ------------
Net realized and unrealized gain (loss) on investments and foreign currencies................ (38,953,649) (46,265,202)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.............................. $(38,111,612) $(44,152,517)
============ ============
- --------
* Net of foreign withholding taxes on interest and dividends of.............................. $ 255,655 $ (8,816)
============ ============
** Net of foreign withholding taxes on capital gains of...................................... $ 6 $ --
============ ============
Disciplined International
Growth Small-Cap
Fund Fund
------------ -------------
INVESTMENT INCOME:
Dividends (unaffiliated)................................................................... $ 652,911 $ 550,343
Interest (unaffiliated).................................................................... 72,778 8,783
------------ ------------
Total investment income*.................................................................. 725,689 559,126
------------ ------------
EXPENSES:
Investment advisory and management fees.................................................... 537,828 347,943
Distribution and service maintenance fees
Class A................................................................................... 103,383 88,267
Class B................................................................................... 51,536 10,295
Class C................................................................................... 285,822 40,073
Service fees Class I....................................................................... -- --
Transfer agent fees and expenses
Class A................................................................................... 73,544 57,512
Class B................................................................................... 14,472 3,947
Class C................................................................................... 69,355 10,992
Class I................................................................................... -- --
Registration fees
Class A................................................................................... 11,864 9,955
Class B................................................................................... 7,668 9,021
Class C................................................................................... 9,729 9,318
Class I................................................................................... -- --
Class Z................................................................................... -- --
Custodian and accounting fees.............................................................. 49,231 116,751
Reports to shareholders.................................................................... 994 3,758
Audit and tax fees......................................................................... 37,943 47,378
Legal fees................................................................................. 25,851 12,246
Trustees' fees and expenses................................................................ 6,141 2,643
Interest expense........................................................................... 7,443 1,155
Other expenses............................................................................. 11,771 19,695
------------ ------------
Total expenses before fee waivers, expense reimbursements, expense recoupments,
custody credits and fees paid indirectly................................................. 1,304,575 790,949
Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)......... (162,465) (183,293)
Custody credits earned on cash balances................................................... (5,356) (55)
Fees paid indirectly (Note 5)............................................................. (44,763) --
------------ ------------
Net expenses.............................................................................. 1,091,991 607,601
------------ ------------
Net investment income (loss)................................................................. (366,302) (48,475)
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**..................................... (15,011,532) (4,009,264)
Net realized foreign exchange gain (loss) on other assets and liabilities.................... 26 5,331
Net realized gain (loss) on disposal of investments in violation of investments restrictions
(Note 4).................................................................................... -- --
------------ ------------
Net realized gain (loss) on investments and foreign currencies............................... (15,011,506) (4,003,933)
------------ ------------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)............... (10,519,309) (10,005,040)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities............ (1,765) (15,660)
Change in unrealized appreciation (depreciation) on securities sold short.................... -- --
Change in accrued capital gains tax on unrealized appreciation (depreciation)................ -- 33
------------ ------------
Net unrealized gain (loss) on investments and foreign currencies............................. (10,521,074) (10,020,667)
------------ ------------
Net realized and unrealized gain (loss) on investments and foreign currencies................ (25,532,580) (14,024,600)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.............................. $(25,898,882) $(14,073,075)
============ ============
- --------
* Net of foreign withholding taxes on interest and dividends of.............................. $ 6,982 $ 51,043
============ ============
** Net of foreign withholding taxes on capital gains of...................................... $ -- $ 33
============ ============
See Notes to Financial Statements
11
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS
Blue Chip Growth Fund Growth Opportunities Fund
-------------------------- --------------------------
For the year For the year For the year For the year
ended ended ended ended
September 30, September 30, September 30, September 30,
2008 2007 2008 2007
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........................... $ (527,166) $ (428,681) $ (451,258) $ (729,282)
Net realized gain (loss) on investments and foreign
currencies............................................ 308,653 4,257,622 (16,211,550) 11,409,851
Net unrealized gain (loss) on investments and foreign
currencies............................................ (13,548,306) 8,515,725 (2,017,924) (1,842,299)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (13,766,819) 12,344,666 (18,680,732) 8,838,270
------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income (Class A)........................ -- -- -- --
Net investment income (Class B)........................ -- -- -- --
Net investment income (Class C)........................ -- -- -- --
Net investment income (Class I)........................ -- -- -- --
Net investment income (Class Z)........................ -- -- -- --
Net realized gain on securities (Class A).............. -- -- -- --
Net realized gain on securities (Class B).............. -- -- -- --
Net realized gain on securities (Class C).............. -- -- -- --
Net realized gain on securities (Class I).............. -- -- -- --
Net realized gain on securities (Class Z).............. -- -- -- --
Return of capital (Class A)............................ -- -- -- --
Return of capital (Class B)............................ -- -- -- --
Return of capital (Class C)............................ -- -- -- --
Return of capital (Class I)............................ -- -- -- --
Return of capital (Class Z)............................ -- -- -- --
------------ ------------ ------------ ------------
Total distributions to shareholders...................... -- -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from
capital share transactions (Note 8)..................... (7,226,436) (13,625,270) (12,400,973) (14,171,956)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets.................. (20,993,255) (1,280,604) (31,081,705) (5,333,686)
NET ASSETS:
Beginning of period...................................... 70,907,407 72,188,011 63,250,795 68,584,481
------------ ------------ ------------ ------------
End of period +.......................................... $ 49,914,152 $ 70,907,407 $ 32,169,090 $ 63,250,795
============ ============ ============ ============
- --------
+ Includes accumulated undistributed net investment
income (loss)........................................... $ (27,741) $ (28,338) $ (24,529) $ 24,866
============ ============ ============ ============
New Century Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2008 2007
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........................... $ (595,876) $ (294,293)
Net realized gain (loss) on investments and foreign
currencies............................................ (38,250,023) 18,717,708
Net unrealized gain (loss) on investments and foreign
currencies............................................ (2,122,695) (1,684,002)
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (40,968,594) 16,739,413
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)........................ -- --
Net investment income (Class B)........................ -- --
Net investment income (Class C)........................ -- --
Net investment income (Class I)........................ --
Net investment income (Class Z)........................ -- --
Net realized gain on securities (Class A).............. -- --
Net realized gain on securities (Class B).............. -- --
Net realized gain on securities (Class C).............. -- --
Net realized gain on securities (Class I).............. --
Net realized gain on securities (Class Z).............. -- --
Return of capital (Class A)............................ -- --
Return of capital (Class B)............................ -- --
Return of capital (Class C)............................ -- --
Return of capital (Class I)............................ -- --
Return of capital (Class Z)............................ -- --
------------ ------------
Total distributions to shareholders...................... -- --
------------ ------------
Net increase (decrease) in net assets resulting from
capital share transactions (Note 8)..................... (16,250,879) 3,329,307
------------ ------------
Total increase (decrease) in net assets.................. (57,219,473) 20,068,720
NET ASSETS:
Beginning of period...................................... 105,034,183 84,965,463
------------ ------------
End of period +.......................................... $ 47,814,710 $105,034,183
============ ============
- --------
+ Includes accumulated undistributed net investment
income (loss)........................................... $ (47,437) $ (49,536)
============ ============
See Notes to Financial Statements
12
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Growth and Income Fund Balanced Assets Fund
-------------------------- --------------------------
For the year For the year For the year For the year
ended ended ended ended
September 30, September 30, September 30, September 30,
2008 2007 2008 2007
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........................... $ 687,508 $ 242,350 $ 2,138,408 $ 2,415,467
Net realized gain (loss) on investments and foreign
currencies............................................ (6,333,715) 15,197,922 (5,243,552) 10,008,735
Net unrealized gain (loss) on investments and foreign
currencies............................................ (17,055,222) 3,277,428 (20,166,764) 6,132,057
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (22,701,429) 18,717,700 (23,271,908) 18,556,259
------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income (Class A)........................ (240,971) -- (1,944,922) (1,990,178)
Net investment income (Class B)........................ -- -- (127,852) (133,492)
Net investment income (Class C)........................ -- -- (126,190) (113,780)
Net investment income (Class I)........................ (1,451) -- (12,607) (13,500)
Net investment income (Class Z)........................ -- -- -- --
Net realized gain on securities (Class A).............. -- -- -- --
Net realized gain on securities (Class B).............. -- -- -- --
Net realized gain on securities (Class C).............. -- -- -- --
Net realized gain on securities (Class I).............. -- -- -- --
Net realized gain on securities (Class Z).............. -- -- -- --
Return of capital (Class A)............................ -- -- -- --
Return of capital (Class B)............................ -- -- -- --
Return of capital (Class C)............................ -- -- -- --
Return of capital (Class I)............................ -- -- -- --
Return of capital (Class Z)............................ -- -- -- --
------------ ------------ ------------ ------------
Total distributions to shareholders...................... (242,422) -- (2,211,571) (2,250,950)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from
capital share transactions (Note 8)..................... (14,928,379) (24,101,118) (17,362,771) (26,486,903)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets.................. (37,872,230) (5,383,418) (42,846,250) (10,181,594)
NET ASSETS:
Beginning of period...................................... 110,698,272 116,081,690 153,513,055 163,694,649
------------ ------------ ------------ ------------
End of period +.......................................... $ 72,826,042 $110,698,272 $110,666,805 $153,513,055
============ ============ ============ ============
- --------
+ Includes accumulated undistributed net investment
income (loss)........................................... $ 649,285 $ 204,199 $ 241,557 $ 236,935
============ ============ ============ ============
International Equity Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2008 2007
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........................... $ 842,037 $ (141,323)
Net realized gain (loss) on investments and foreign
currencies............................................ (1,416,225) 13,471,646
Net unrealized gain (loss) on investments and foreign
currencies............................................ (37,537,424) 13,664,189
------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (38,111,612) 26,994,512
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)........................ -- --
Net investment income (Class B)........................ -- --
Net investment income (Class C)........................ -- --
Net investment income (Class I)........................ -- --
Net investment income (Class Z)........................ -- --
Net realized gain on securities (Class A).............. (6,405,167) --
Net realized gain on securities (Class B).............. (1,777,695) --
Net realized gain on securities (Class C).............. (2,438,019) --
Net realized gain on securities (Class I).............. (706,303) --
Net realized gain on securities (Class Z).............. -- --
Return of capital (Class A)............................ -- --
Return of capital (Class B)............................ -- --
Return of capital (Class C)............................ -- --
Return of capital (Class I)............................ -- --
Return of capital (Class Z)............................ -- --
------------ ------------
Total distributions to shareholders...................... (11,327,184) --
------------ ------------
Net increase (decrease) in net assets resulting from
capital share transactions (Note 8)..................... (6,309,775) (10,955,655)
------------ ------------
Total increase (decrease) in net assets.................. (55,748,571) 16,038,857
NET ASSETS:
Beginning of period...................................... 130,596,089 114,557,232
------------ ------------
End of period +.......................................... $ 74,847,518 $130,596,089
============ ============
- --------
+ Includes accumulated undistributed net investment
income (loss)........................................... $ (31,117) $ (125,271)
============ ============
See Notes to Financial Statements
13
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Value Fund Disciplined Growth Fund
-------------------------- --------------------------
For the year For the year For the year For the year
ended ended ended ended
September 30, September 30, September 30, September 30,
2008 2007 2008 2007
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........................... $ 2,112,685 $ 1,902,699 $ (366,302) $ (359,066)
Net realized gain (loss) on investments and foreign
currencies............................................ (15,674,539) 30,254,544 (15,011,506) 10,478,279
Net unrealized gain (loss) on investments and foreign
currencies............................................ (30,590,663) 1,556,544 (10,521,074) 5,722,460
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (44,152,517) 33,713,787 (25,898,882) 15,841,673
------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income (Class A)........................ (1,348,358) (1,037,323) -- --
Net investment income (Class B)........................ (210,886) (138,581) -- --
Net investment income (Class C)........................ (136,301) (102,287) -- --
Net investment income (Class I)........................ (425) (285) -- --
Net investment income (Class Z)........................ (468,654) (294,735) -- --
Net realized gain on securities (Class A).............. (17,163,009) (13,182,325) -- --
Net realized gain on securities (Class B).............. (5,445,543) (5,278,693) -- --
Net realized gain on securities (Class C).............. (3,519,589) (3,896,204) -- --
Net realized gain on securities (Class I).............. (4,981) (3,186) -- --
Net realized gain on securities (Class Z).............. (4,579,895) (2,693,654) -- --
Return of capital (Class A)............................ -- -- -- --
Return of capital (Class B)............................ -- -- -- --
Return of capital (Class C)............................ -- -- -- --
Return of capital (Class I)............................ -- -- -- --
Return of capital (Class Z)............................ -- -- -- --
------------ ------------ ------------ ------------
Total distributions to shareholders...................... (32,877,641) (26,627,273) -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from
capital share transactions (Note 8)..................... (10,609,320) (5,899,264) 5,710,433 (14,243,867)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets.................. (87,639,478) 1,187,250 (20,188,449) 1,597,806
NET ASSETS:
Beginning of period...................................... 226,892,019 225,704,769 60,376,944 58,779,138
------------ ------------ ------------ ------------
End of period +.......................................... $139,252,541 $226,892,019 $ 40,188,495 $ 60,376,944
============ ============ ============ ============
- --------
+ Includes accumulated undistributed net investment
income (loss)........................................... $ 1,540,237 $ 1,613,189 $ (10,004) $ (9,070)
============ ============ ============ ============
International Small-Cap Fund
--------------------------
For the year For the year
ended ended
September 30, September 30,
2008 2007
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........................... $ (48,475) $ (126,780)
Net realized gain (loss) on investments and foreign
currencies............................................ (4,003,933) 1,240,543
Net unrealized gain (loss) on investments and foreign
currencies............................................ (10,020,667) 5,861,549
------------ -----------
Net increase (decrease) in net assets resulting from
operations.............................................. (14,073,075) 6,975,312
------------ -----------
Distributions to shareholders from:
Net investment income (Class A)........................ -- --
Net investment income (Class B)........................ -- --
Net investment income (Class C)........................ -- --
Net investment income (Class I)........................ -- --
Net investment income (Class Z)........................ -- --
Net realized gain on securities (Class A).............. (273,789) --
Net realized gain on securities (Class B).............. (11,114) --
Net realized gain on securities (Class C).............. (49,279) --
Net realized gain on securities (Class I).............. -- --
Net realized gain on securities (Class Z).............. -- --
Return of capital (Class A)............................ (32,125) --
Return of capital (Class B)............................ (1,304) --
Return of capital (Class C)............................ (5,782) --
Return of capital (Class I)............................ -- --
Return of capital (Class Z)............................ -- --
------------ -----------
Total distributions to shareholders...................... (373,393) --
------------ -----------
Net increase (decrease) in net assets resulting from
capital share transactions (Note 8)..................... (3,274,935) 4,903,738
------------ -----------
Total increase (decrease) in net assets.................. (17,721,403) 11,879,050
NET ASSETS:
Beginning of period...................................... 37,382,974 25,503,924
------------ -----------
End of period +.......................................... $ 19,661,571 $37,382,974
============ ===========
- --------
+ Includes accumulated undistributed net investment
income (loss)........................................... $ (2,969) $ (250)
============ ===========
See Notes to Financial Statements
14
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS
BLUE CHIP GROWTH FUND
---------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/04 $13.12 $(0.08) $ 1.05 $ 0.97 $-- $-- $-- $14.09 7.39% $62,316 1.60%
09/30/05 14.09 (0.01) 1.13 1.12 -- -- -- 15.21 7.95 56,755 1.59
09/30/06 15.21 (0.07) 0.55 0.48 -- -- -- 15.69 3.16 49,539 1.55(3)(4)
09/30/07 15.69 (0.07) 3.12 3.05 -- -- -- 18.74 19.44 51,961 1.60(3)(4)
09/30/08 18.74 (0.11) (3.72) (3.83) -- -- -- 14.91 (20.44)(5) 38,927 1.64(4)
Class B
- -
09/30/04 $11.90 $(0.16) $ 0.96 $ 0.80 $-- $-- $-- $12.70 6.72% $27,946 2.26%
09/30/05 12.70 (0.11) 1.02 0.91 -- -- -- 13.61 7.17 22,558 2.32
09/30/06 13.61 (0.17) 0.50 0.33 -- -- -- 13.94 2.42 17,479 2.29(3)(4)
09/30/07 13.94 (0.17) 2.75 2.58 -- -- -- 16.52 18.51 14,314 2.36(3)(4)
09/30/08 16.52 (0.22) (3.25) (3.47) -- -- -- 13.05 (21.00)(5) 7,525 2.38(4)
Class C+
- -
09/30/04 $11.87 $(0.18) $ 0.96 $ 0.78 $-- $-- $-- $12.65 6.57% $ 6,458 2.37%
09/30/05 12.65 (0.13) 1.01 0.88 -- -- -- 13.53 6.96 5,278 2.49
09/30/06 13.53 (0.17) 0.50 0.33 -- -- -- 13.86 2.44 4,528 2.30(3)(4)
09/30/07 13.86 (0.20) 2.73 2.53 -- -- -- 16.39 18.25 3,959 2.55(3)(4)
09/30/08 16.39 (0.23) (3.23) (3.46) -- -- -- 12.93 (21.11)(5) 2,939 2.51(4)
Class I
- -
09/30/04 $13.16 $(0.04) $ 1.05 $ 1.01 $-- $-- $-- $14.17 7.67% $ 2,164 1.33%(3)
09/30/05 14.17 0.03 1.14 1.17 -- -- -- 15.34 8.26 1,454 1.33(3)
09/30/06 15.34 (0.04) 0.57 0.53 -- -- -- 15.87 3.45 642 1.28(3)(4)
09/30/07 15.87 (0.02) 3.16 3.14 -- -- -- 19.01 19.79 673 1.32(3)(4)
09/30/08 19.01 (0.06) (3.79) (3.85) -- -- -- 15.16 (20.25)(5) 524 1.33(3)(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
(0.59)% 145%
(0.09) 120
(0.45)(3)(4) 154
(0.40)(3)(4) 72
(0.66)(4) 49
(1.25)% 145%
(0.80) 120
(1.20)(3)(4) 154
(1.14)(3)(4) 72
(1.41)(4) 49
(1.37)% 145%
(0.98) 120
(1.21)(3)(4) 154
(1.35)(3)(4) 72
(1.54)(4) 49
(0.26)%(3) 145%
0.22(3) 120
(0.22)(3)(4) 154
(0.11)(3)(4) 72
(0.36)(3)(4) 49
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements/fee waivers (based on average
net assets):
09/30/04 09/30/05 09/30/06 09/30/07 09/30/08
-------- -------- -------- -------- --------
Blue Chip Growth Class A................ -- % -- % 0.05% 0.01% -- %
Blue Chip Growth Class B................ -- -- 0.05 0.02 --
Blue Chip Growth Class C+............... -- -- 0.05 0.02 --
Blue Chip Growth Class I................ 0.13 0.49 1.15 1.92 1.36
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07 09/30/08
-------- -------- --------
Blue Chip Growth Class A................ 0.01% 0.01% 0.01%
Blue Chip Growth Class B................ 0.01 0.01 0.01
Blue Chip Growth Class C+............... 0.01 0.01 0.01
Blue Chip Growth Class I................ 0.01 0.01 0.01
(5)The Fund's performance was increased by less than 0.01% from gains on
disposal of investments in violation of investment restrictions. (See Note 4)
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
15
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
GROWTH OPPORTUNITIES FUND
-------------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/04 $13.74 $(0.16) $ 0.07 $(0.09) $-- $-- $-- $13.65 (0.66)%(3) $49,918 1.58%
09/30/05 13.65 (0.17) 2.79 2.62 -- -- -- 16.27 19.19 44,641 1.65
09/30/06 16.27 (0.12) 0.89 0.77 -- -- -- 17.04 4.73 37,382 1.59(4)(5)
09/30/07 17.04 (0.14) 2.41 2.27 -- -- -- 19.31 13.32 39,646 1.62(4)(5)
09/30/08 19.31 (0.12) (6.37) (6.49) -- -- -- 12.82 (33.61) 21,705 1.82(4)(5)
Class B
- -
09/30/04 $12.44 $(0.24) $ 0.07 $(0.17) $-- $-- $-- $12.27 (1.37)%(3) $31,429 2.27%
09/30/05 12.27 (0.25) 2.50 2.25 -- -- -- 14.52 18.34 27,673 2.32
09/30/06 14.52 (0.21) 0.79 0.58 -- -- -- 15.10 3.99 21,500 2.30(4)(5)
09/30/07 15.10 (0.25) 2.15 1.90 -- -- -- 17.00 12.58 15,229 2.31(4)(5)
09/30/08 17.00 (0.21) (5.59) (5.80) -- -- -- 11.20 (34.12) 6,405 2.53(4)(5)
Class C+
- -
09/30/04 $12.43 $(0.24) $ 0.06 $(0.18) $-- $-- $-- $12.25 (1.45)%(3) $14,599 2.29%
09/30/05 12.25 (0.26) 2.51 2.25 -- -- -- 14.50 18.37 12,089 2.39
09/30/06 14.50 (0.21) 0.79 0.58 -- -- -- 15.08 4.00 9,281 2.28(4)(5)
09/30/07 15.08 (0.26) 2.14 1.88 -- -- -- 16.96 12.47 8,230 2.38(4)(5)
09/30/08 16.96 (0.22) (5.57) (5.79) -- -- -- 11.17 (34.14) 3,977 2.62(4)(5)
Class I
- -
09/30/04 $13.80 $(0.13) $ 0.08 $(0.05) $-- $-- $-- $13.75 (0.36)%(3) $ 3,493 1.33%(4)
09/30/05 13.75 (0.13) 2.82 2.69 -- -- -- 16.44 19.56 1,759 1.33(4)
09/30/06 16.44 (0.06) 0.88 0.82 -- -- -- 17.26 4.99 422 1.28(4)(5)
09/30/07 17.26 (0.06) 2.42 2.36 -- -- -- 19.62 13.67 145 1.32(4)(5)
09/30/08 19.62 (0.04) (6.48) (6.52) -- -- -- 13.10 (33.23) 82 1.33(4)(5)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
(1.09)% 170%
(1.15) 86
(0.76)(4)(5) 278
(0.79)(4)(5) 321
(0.93)(4)(5) 510
(1.78)% 170%
(1.82) 86
(1.46)(4)(5) 278
(1.48)(4)(5) 321
(1.64)(4)(5) 510
(1.80)% 170%
(1.89) 86
(1.44)(4)(5) 278
(1.56)(4)(5) 321
(1.73)(4)(5) 510
(0.85)%(4) 170%
(0.85)(4) 86
(0.35)(4)(5) 278
(0.34)(4)(5) 321
(0.44)(4)(5) 510
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)The Fund's total return increased from a gain realized on the disposal of
investments in violation of investment restrictions on Class A 0.07%, Class
B 0.10%, Class C 0.10% and Class I 0.08%.
(4)Net of the following expense reimbursements/fee waivers (based on average
net assets):
09/30/04 09/30/05 09/30/06 09/30/07 09/30/08
-------- -------- -------- -------- --------
Growth Opportunities Class A............ -- % -- % 0.05% 0.00% 0.00%
Growth Opportunities Class B............ -- -- 0.05 0.01 0.00
Growth Opportunities Class C+........... -- -- 0.05 0.01 0.00
Growth Opportunities Class I............ 0.18 0.49 1.59 5.77 8.62
(5)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07 09/30/08
-------- -------- --------
Growth Opportunities Class A............ 0.04% 0.05% 0.19%
Growth Opportunities Class B............ 0.04 0.05 0.19
Growth Opportunities Class C+........... 0.04 0.05 0.19
Growth Opportunities Class I............ 0.03 0.05 0.19
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
16
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
NEW CENTURY FUND
----------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/04 $13.44 $(0.17) $ 1.50 $ 1.33 $-- $-- $-- $14.77 9.90% $80,872 1.57%
09/30/05 14.77 (0.15) 3.38 3.23 -- -- -- 18.00 21.87 87,314 1.58
09/30/06 18.00 (0.07) 0.67 0.60 -- -- -- 18.60 3.33 75,682 1.55(4)
09/30/07 18.60 (0.04) 3.53 3.49 -- -- -- 22.09 18.76 88,535 1.55(4)
09/30/08 22.09 (0.12) (9.60) (9.72) -- -- -- 12.37 (44.00) 41,425 1.62(3)(4)
Class B
- -
09/30/04 $12.03 $(0.25) $ 1.35 $ 1.10 $-- $-- $-- $13.13 9.14% $11,415 2.29%
09/30/05 13.13 (0.25) 3.00 2.75 -- -- -- 15.88 20.94 10,344 2.32
09/30/06 15.88 (0.19) 0.60 0.41 -- -- -- 16.29 2.58 7,528 2.29(4)
09/30/07 16.29 (0.18) 3.09 2.91 -- -- -- 19.20 17.86 10,701 2.31(4)
09/30/08 19.20 (0.24) (8.30) (8.54) -- -- -- 10.66 (44.48) 3,907 2.45(3)(4)
Class C+
- -
09/30/04 $12.02 $(0.22) $ 1.34 $ 1.12 $-- $-- $-- $13.14 9.32% $ 2,180 2.10%(3)
09/30/05 13.14 (0.22) 3.02 2.80 -- -- -- 15.94 21.31 1,964 2.14(3)
09/30/06 15.94 (0.16) 0.59 0.43 -- -- -- 16.37 2.70 1,756 2.14(3)(4)
09/30/07 16.37 (0.16) 3.11 2.95 -- -- -- 19.32 18.02 5,798 2.14(3)(4)
09/30/08 19.32 (0.19) (8.37) (8.56) -- -- -- 10.76 (44.31) 2,483 2.14(3)(4)(5)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
(1.20)% 110%
(0.89) 80
(0.39)(4) 235
(0.20)(4) 315
(0.80)(3)(4) 659
(1.91)% 110%
(1.64) 80
(1.14)(4) 235
(1.00)(4) 315
(1.61)(3)(4) 659
(1.73)%(3) 110%
(1.45)(3) 80
(0.98)(3)(4) 235
(0.88)(3)(4) 315
(1.31)(3)(4)(5) 659
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements (based on average net assets):
09/30/04 09/30/05 09/30/06 09/30/07 09/30/08
-------- -------- -------- -------- --------
New Century Class A..................... -- % -- % -- % -- % 0.00%
New Century Class B..................... -- -- -- -- 0.00
New Century Class C+.................... 0.48 0.66 0.44 0.35 0.40
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07 09/30/08
-------- -------- --------
New Century Class A..................... 0.01% 0.02% 0.14%
New Century Class B..................... 0.01 0.02 0.14
New Century Class C+.................... 0.01 0.03 0.14
(5)Net of custody credits of 0.01%.
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
17
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
GROWTH AND INCOME FUND
----------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/04 $10.19 $ 0.00 $ 1.19 $ 1.19 $ -- $-- $ -- $11.38 11.68% $69,069 1.50%
09/30/05 11.38 0.10 1.03 1.13 (0.11) -- (0.11) 12.40 9.89 65,666 1.55
09/30/06 12.40 0.04 1.01 1.05 (0.02) -- (0.02) 13.43 8.47 61,872 1.54(3)(4)
09/30/07 13.43 0.07 2.38 2.45 -- -- -- 15.88 18.24 66,963 1.52(3)(4)
09/30/08 15.88 0.14 (3.65) (3.51) (0.06) -- (0.06) 12.31 (22.19) 48,022 1.58(4)
Class B
- -
09/30/04 $ 9.69 $(0.07) $ 1.13 $ 1.06 $ -- $-- $ -- $10.75 10.94% $54,199 2.17%
09/30/05 10.75 0.02 0.97 0.99 -- -- -- 11.74 9.21 41,120 2.20
09/30/06 11.74 (0.05) 0.96 0.91 -- -- -- 12.65 7.75 27,100 2.22(3)(4)
09/30/07 12.65 (0.03) 2.23 2.20 -- -- -- 14.85 17.39 19,562 2.21(3)(4)
09/30/08 14.85 0.04 (3.41) (3.37) -- -- -- 11.48 (22.69) 9,729 2.29(4)
Class C+
- -
09/30/04 $ 9.67 $(0.07) $ 1.13 $ 1.06 $ -- $-- $ -- $10.73 10.96% $43,993 2.14%
09/30/05 10.73 0.02 0.97 0.99 -- -- -- 11.72 9.23 37,448 2.18
09/30/06 11.72 (0.04) 0.95 0.91 -- -- -- 12.63 7.76 26,821 2.19(3)(4)
09/30/07 12.63 (0.02) 2.23 2.21 -- -- -- 14.84 17.50 23,851 2.19(3)(4)
09/30/08 14.84 0.04 (3.41) (3.37) -- -- -- 11.47 (22.71) 14,816 2.25(4)
Class I
- -
09/30/04 $10.21 $ 0.02 $ 1.18 $ 1.20 $ -- $-- $ -- $11.41 11.75% $ 769 1.32%(3)
09/30/05 11.41 0.12 1.04 1.16 (0.14) -- (0.14) 12.43 10.18 758 1.31(3)
09/30/06 12.43 0.07 1.01 1.08 (0.04) -- (0.04) 13.47 8.69 288 1.32(3)(4)
09/30/07 13.47 0.11 2.38 2.49 -- -- -- 15.96 18.49 323 1.31(3)(4)
09/30/08 15.96 0.18 (3.68) (3.50) (0.07) -- (0.07) 12.39 (22.02) 259 1.32(3)(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
0.01% 139%
0.78 79
0.31(3)(4) 152
0.49(3)(4) 164
0.96(4) 251
(0.67)% 139%
0.16 79
(0.39)(3)(4) 152
(0.21)(3)(4) 164
0.26(4) 251
(0.64)% 139%
0.17 79
(0.36)(3)(4) 152
(0.18)(3)(4) 164
0.29(4) 251
0.19%(3) 139%
1.00(3) 79
0.48(3)(4) 152
0.70(3)(4) 164
1.22(3)(4) 251
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements/fee waivers (based on average
net assets):
09/30/04 09/30/05 09/30/06 09/30/07 09/30/08
-------- -------- -------- -------- --------
Growth and Income Class A............... -- % -- % 0.00% 0.01% -- %
Growth and Income Class B............... -- -- 0.00 0.01 --
Growth and Income Class C+.............. -- -- 0.00 0.01 --
Growth and Income Class I............... 0.14 0.96 2.23 3.72 3.36
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07 09/30/08
-------- -------- --------
Growth and Income Class A............... 0.01% 0.02% 0.03%
Growth and Income Class B............... 0.01 0.02 0.04
Growth and Income Class C+.............. 0.01 0.02 0.04
Growth and Income Class I............... 0.01 0.02 0.03
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
18
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
BALANCED ASSETS FUND
--------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- -------- ----------
Class A
- -
09/30/04 $12.45 $0.12 $ 0.78 $ 0.90 $(0.16) $-- $(0.16) $13.19 7.27% $160,269 1.50%
09/30/05 13.19 0.21 0.56 0.77 (0.24) -- (0.24) 13.72 5.84 142,573 1.62
09/30/06 13.72 0.22 0.58 0.80 (0.25) -- (0.25) 14.27 5.90 127,313 1.52(3)(4)
09/30/07 14.27 0.25 1.52 1.77 (0.24) -- (0.24) 15.80 12.50 124,257 1.55(3)(4)
09/30/08 15.80 0.25 (2.82) (2.57) (0.26) -- (0.26) 12.97 (16.37)(5) 91,316 1.59(3)(4)
Class B
- -
09/30/04 $12.41 $0.03 $ 0.77 $ 0.80 $(0.07) $-- $(0.07) $13.14 6.45% $ 38,687 2.18%
09/30/05 13.14 0.13 0.55 0.68 (0.15) -- (0.15) 13.67 5.16 30,002 2.27
09/30/06 13.67 0.13 0.58 0.71 (0.15) -- (0.15) 14.23 5.23 20,464 2.20(3)(4)
09/30/07 14.23 0.14 1.52 1.66 (0.12) -- (0.12) 15.77 11.70 14,714 2.28(3)(4)
09/30/08 15.77 0.15 (2.81) (2.66) (0.16) -- (0.16) 12.95 (16.95)(5) 9,252 2.31(3)(4)
Class C+
- -
09/30/04 $12.42 $0.03 $ 0.78 $ 0.81 $(0.07) $-- $(0.07) $13.16 6.53% $ 22,781 2.18%
09/30/05 13.16 0.13 0.55 0.68 (0.15) -- (0.15) 13.69 5.15 19,298 2.26
09/30/06 13.69 0.13 0.58 0.71 (0.15) -- (0.15) 14.25 5.22 15,164 2.18(3)(4)
09/30/07 14.25 0.15 1.52 1.67 (0.12) -- (0.12) 15.80 11.75 13,891 2.26(3)(4)
09/30/08 15.80 0.15 (2.82) (2.67) (0.16) -- (0.16) 12.97 (16.98)(5) 9,552 2.28(3)(4)
Class I
- -
09/30/04 $12.46 $0.16 $ 0.77 $ 0.93 $(0.18) $-- $(0.18) $13.21 7.44% $ 679 1.29%(3)
09/30/05 13.21 0.25 0.55 0.80 (0.28) -- (0.28) 13.73 6.10 746 1.32(3)
09/30/06 13.73 0.26 0.59 0.85 (0.29) -- (0.29) 14.29 6.24 754 1.28(3)(4)
09/30/07 14.29 0.29 1.53 1.82 (0.29) -- (0.29) 15.82 12.81 652 1.31(3)(4)
09/30/08 15.82 0.29 (2.83) (2.54) (0.30) -- (0.30) 12.98 (16.19)(5) 546 1.31(3)(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
0.89% 182%(6)
1.56 160(6)
1.59(3)(4) 156(6)
1.66(3)(4) 133(6)
1.71(3)(4) 122
0.20% 182%(6)
0.91 160(6)
0.91(3)(4) 156(6)
0.93(3)(4) 133(6)
0.99(3)(4) 122
0.21% 182%(6)
0.92 160(6)
0.93(3)(4) 156(6)
0.95(3)(4) 133(6)
1.02(3)(4) 122
1.10%(3) 182%(6)
1.84(3) 160(6)
1.84(3)(4) 156(6)
1.90(3)(4) 133(6)
1.99(3)(4) 122
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements/fee waivers (based on average
net assets):
09/30/04 09/30/05 09/30/06 09/30/07 09/30/08
-------- -------- -------- -------- --------
Balanced Assets Class A................. -- % -- % 0.05% 0.02% 0.02%
Balanced Assets Class B................. -- -- 0.05 0.02 0.02
Balanced Assets Class C+................ -- -- 0.05 0.02 0.02
Balanced Assets Class I................. 0.24 1.47 1.38 1.71 1.65
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07 09/30/08
-------- -------- --------
Balanced Assets Class A................. 0.00% 0.01% 0.01%
Balanced Assets Class B................. 0.00 0.01 0.01
Balanced Assets Class C+................ 0.00 0.01 0.01
Balanced Assets Class I................. 0.00 0.01 0.01
(5)The Fund's performance was increased by less than 0.01% from gains on the
disposal of investments in violation of investment restrictions. (See Note 4)
(6)Portfolio turnover includes "to be announced" ("TBA") transactions.
Previously, portfolio turnover was calculated prior to including TBA
transactions and was as follows:
09/30/04 09/30/05 09/30/06 09/30/07
-------- -------- -------- --------
181% 160% 154% 123%
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
19
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
INTERNATIONAL EQUITY FUND
-------------------------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ----------
Class A
- -
09/30/04 $ 8.73 $ 0.01 $ 1.46 $ 1.47 $ 0.00 $ -- $ 0.00 $10.20 16.88% $32,221 1.90%(3)
09/30/05 10.20 0.02 2.82 2.84 -- -- -- 13.04 27.84 43,527 1.90(3)
09/30/06 13.04 (0.01) 2.81 2.80 -- -- -- 15.84 21.47 62,190 1.90(3)
09/30/07 15.84 0.02 3.94 3.96 -- -- -- 19.80 25.00 75,408 1.90(3)
09/30/08 19.80 0.17 (5.85) (5.68) -- (1.68) (1.68) 12.44 (31.34) 46,384 1.90(4)
Class B
- -
09/30/04 $ 8.34 $(0.06) $ 1.41 $ 1.35 $ -- $ -- $ -- $ 9.69 16.19% $20,673 2.55%(3)
09/30/05 9.69 (0.06) 2.68 2.62 -- -- -- 12.31 27.04 19,546 2.55(3)
09/30/06 12.31 (0.11) 2.65 2.54 -- -- -- 14.85 20.63 21,240 2.55(3)
09/30/07 14.85 (0.10) 3.69 3.59 -- -- -- 18.44 24.18 20,509 2.55(3)
09/30/08 18.44 0.04 (5.36) (5.32) -- (1.68) (1.68) 11.44 (31.72) 9,279 2.55(3)(4)
Class C+
- -
09/30/04 $ 8.33 $(0.06) $ 1.41 $ 1.35 $ -- $ -- $ -- $ 9.68 16.21% $15,798 2.55%(3)
09/30/05 9.68 (0.06) 2.67 2.61 -- -- -- 12.29 26.96 16,892 2.55(3)
09/30/06 12.29 (0.11) 2.66 2.55 -- -- -- 14.84 20.75 21,646 2.55(3)
09/30/07 14.84 (0.09) 3.67 3.58 -- -- -- 18.42 24.12 26,683 2.55(3)
09/30/08 18.42 0.05 (5.37) (5.32) -- (1.68) (1.68) 11.42 (31.77) 14,221 2.55(3)(4)
Class I
- -
09/30/04 $ 8.77 $(0.04) $ 1.53 $ 1.49 $(0.01) $ -- $(0.01) $10.25 16.96% $ 4,233 1.80%(3)
09/30/05 10.25 0.05 2.82 2.87 -- -- -- 13.12 28.00 7,065 1.80(3)
09/30/06 13.12 0.00 2.84 2.84 -- -- -- 15.96 21.65 9,482 1.80(3)
09/30/07 15.96 0.04 3.96 4.00 -- -- -- 19.96 25.06 7,997 1.80(3)
09/30/08 19.96 0.17 (5.89) (5.72) -- (1.68) (1.68) 12.56 (31.29) 4,964 1.80(3)(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
- ------------- ---------
0.06%(3) 202%
0.17(3) 126
(0.09)(3) 152
0.13(3) 132
0.98(4) 199
(0.62)%(3) 202%
(0.51)(3) 126
(0.80)(3) 152
(0.59)(3) 132
0.25(3)(4) 199
(0.60)%(3) 202%
(0.49)(3) 126
(0.76)(3) 152
(0.52)(3) 132
0.31(3)(4) 199
(0.34)%(3) 202%
0.43(3) 126
(0.01)(3) 152
0.24(3) 132
1.01(3)(4) 199
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Net of the following expense reimbursements (recoupments) (based on average
net assets):
09/30/04 09/30/05 09/30/06 09/30/07 09/30/08
-------- -------- -------- -------- --------
International Equity Class A............ 0.10% 0.09% (0.04)% (0.05)% -- %
International Equity Class B............ 0.11 0.17 0.02 0.04 0.06
International Equity Class C+........... 0.06 0.14 (0.01) (0.00) 0.01
International Equity Class I............ 0.12 0.14 0.00 0.04 0.09
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/08
--------
International Equity Class A....... 0.00%
International Equity Class B....... 0.00
International Equity Class C+...... 0.00
International Equity Class I....... 0.00
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
20
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
VALUE FUND
----------
Net gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets
Value investment realized Total from from net from Total Value end of
beginning income and investment investment capital distri- end of Total period
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
- ------------------- --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- --------
Class A
- -
10/31/03 $14.63 $0.29 $ 2.05 $ 2.34 $(0.18) $(0.46) $(0.64) $16.33 16.59% $ 60,701
11/1/03-09/30/04(6) 16.33 0.32 1.86 2.18 (0.37) (0.45) (0.82) 17.69 13.79 91,769
09/30/05 17.69 0.17 2.22 2.39 (0.29) (1.78) (2.07) 18.01 14.06 130,754
09/30/06 18.01 0.15 1.89 2.04 (0.13) (1.17) (1.30) 18.75 12.02 121,729
09/30/07 18.75 0.18 2.59 2.77 (0.16) (2.04) (2.20) 19.32 15.80 126,788
09/30/08 19.32 0.19 (3.86) (3.67) (0.21) (2.70) (2.91) 12.74 (21.70) 77,903
Class B
- -
10/31/03 $14.06 $0.19 $ 1.98 $ 2.17 $(0.08) $(0.46) $(0.54) $15.69 15.94% $ 83,935
11/1/03-09/30/04(6) 15.69 0.24 1.75 1.99 (0.27) (0.45) (0.72) 16.96 13.09 68,492
09/30/05 16.96 0.07 2.11 2.18 (0.18) (1.78) (1.96) 17.18 13.34 57,704
09/30/06 17.18 0.04 1.80 1.84 (0.03) (1.17) (1.20) 17.82 11.29 47,100
09/30/07 17.82 0.05 2.46 2.51 (0.05) (2.04) (2.09) 18.24 15.07 39,355
09/30/08 18.24 0.09 (3.62) (3.53) (0.10) (2.70) (2.80) 11.91 (22.16) 21,304
Class C+
- -
10/31/03 $14.06 $0.18 $ 1.99 $ 2.17 $(0.08) $(0.46) $(0.54) $15.69 15.94% $ 23,208
11/1/03-09/30/04(6) 15.69 0.22 1.77 1.99 (0.27) (0.45) (0.72) 16.96 13.09 30,985
09/30/05 16.96 0.06 2.12 2.18 (0.18) (1.78) (1.96) 17.18 13.34 41,095
09/30/06 17.18 0.04 1.80 1.84 (0.03) (1.17) (1.20) 17.82 11.30 33,849
09/30/07 17.82 0.06 2.45 2.51 (0.05) (2.04) (2.09) 18.24 15.07 26,071
09/30/08 18.24 0.09 (3.62) (3.53) (0.10) (2.70) (2.80) 11.91 (22.16) 14,194
Class I
- -
10/31/03 $14.63 $0.30 $ 2.05 $ 2.35 $(0.19) $(0.46) $(0.65) $16.33 16.72% $ 6,629
11/1/03-09/30/04(6) 16.33 0.37 1.83 2.20 (0.40) (0.45) (0.85) 17.68 13.91 4,746
09/30/05 17.68 0.20 2.20 2.40 (0.30) (1.78) (2.08) 18.00 14.12 3,106
09/30/06 18.00 0.16 1.91 2.07 (0.15) (1.17) (1.32) 18.75 12.20 174
09/30/07 18.75 0.21 2.57 2.78 (0.18) (2.04) (2.22) 19.31 15.89 34
09/30/08 19.31 0.20 (3.85) (3.65) (0.23) (2.70) (2.93) 12.73 (21.62) 25
Class Z
- -
10/31/03 $14.97 $0.36 $ 2.13 $ 2.49 $(0.25) $(0.46) $(0.71) $16.75 17.36% $ 4,532
11/1/03-09/30/04(6) 16.75 0.41 1.92 2.33 (0.45) (0.45) (0.90) 18.18 14.37 7,370
09/30/05 18.18 0.27 2.30 2.57 (0.39) (1.78) (2.17) 18.58 14.77 17,307
09/30/06 18.58 0.26 1.95 2.21 (0.19) (1.17) (1.36) 19.43 12.64 22,853
09/30/07 19.43 0.29 2.70 2.99 (0.22) (2.04) (2.26) 20.16 16.48 34,644
09/30/08 20.16 0.29 (4.05) (3.76) (0.28) (2.70) (2.98) 13.42 (21.28) 25,827
Ratio
of net
Ratio of investment
expenses income (loss)
to average to average Portfolio
net assets(4) net assets(4) Turnover
- ------------- ------------- ---------
1.78%(5) 1.94%(5) 138%
1.73(3) 2.12(3) 204
1.63 1.00 82
1.63(5) 0.88(5) 140
1.63(5) 0.97(5) 143
1.63(5) 1.23(5) 207
2.41%(5) 1.32%(5) 138%
2.40(3) 1.58(3) 204
2.28 0.38 82
2.28(5) 0.23(5) 140
2.28(5) 0.31(5) 143
2.28(5) 0.58(5) 207
2.43%(5) 1.28%(5) 138%
2.41(3) 1.48(3) 204
2.28 0.36 82
2.28(5) 0.23(5) 140
2.28(5) 0.32(5) 143
2.28(5) 0.58(5) 207
1.68%(5) 2.02%(5) 138%
1.67(3) 2.31(3) 204
1.53 1.11 82
1.53(5) 0.90(5) 140
1.53(5) 1.05(5) 143
1.53(5) 1.33(5) 207
1.21%(5) 2.33%(5) 138%
1.19(3) 2.58(3) 204
1.06 1.54 82
1.06(5) 1.45(5) 140
1.06(5) 1.54(5) 143
1.06(5) 1.81(5) 207
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Annualized
(4)Net of the following expense reimbursements (recoupments) (based on average
net assets):
10/31/03 09/30/04(3) 09/30/05 09/30/06 09/30/07 09/30/08
-------- ----------- -------- -------- -------- --------
Value Class A........................... (0.01)% 0.04% 0.08% 0.08% 0.07% 0.11%
Value Class B........................... (0.01) 0.02 0.14 0.10 0.11 0.14
Value Class C+.......................... 0.02 0.06 0.08 0.08 0.09 0.14
Value Class I........................... -- 0.10 0.25 0.30 21.30 16.95
Value Class Z........................... 1.00 0.16 0.10 0.07 0.07 0.10
(5)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
10/31/03 09/30/06 09/30/07 09/30/08
-------- -------- -------- --------
Value Class A........................... 0.01% 0.01% 0.01% 0.03%
Value Class B........................... 0.01 0.01 0.01 0.03
Value Class C+.......................... 0.01 0.01 0.01 0.03
Value Class I........................... 0.01 0.01 0.01 0.03
Value Class Z........................... 0.00 0.01 0.01 0.03
(6)The Fund changed its fiscal year end from October 31 to September 30.
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
21
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
DISCIPLINED GROWTH FUND
-----------------------
Net Gain
(loss) on
Net investments Distri- Net Net
Asset Net (both Dividends butions Asset Assets
Value investment realized Total from from net from Total Value end of
beginning income and investment investment capital distri- end of Total period
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
- -------------------- --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- -------
Class A
- -
10/31/03 $ 9.00 $ 0.03 $ 1.46 $ 1.49 $ -- $-- $ -- $10.49 16.56% $14,877
11/01/03-09/30/04(3) 10.49 0.03 0.75 0.78 -- -- -- 11.27 7.44 13,562
09/30/05 11.27 0.09 0.53 0.62 (0.06) -- (0.06) 11.83 5.51 11,251
09/30/06 11.83 (0.01) 1.34 1.33 (0.06) -- (0.06) 13.10 11.25 22,554
09/30/07 13.10 (0.04) 4.38 4.34 -- -- -- 17.44 33.13(7) 25,774
09/30/08 17.44 (0.04) (6.33) (6.37) -- -- -- 11.07 (36.53) 19,949
Class B
- -
10/31/03 $ 8.79 $(0.03) $ 1.41 $ 1.38 $ -- $-- $ -- $10.17 15.70% $22,694
11/01/03-09/30/04(3) 10.17 (0.04) 0.73 0.69 -- -- -- 10.86 6.78 19,669
09/30/05 10.86 0.01 0.52 0.53 -- -- -- 11.39 4.88 15,117
09/30/06 11.39 (0.10) 1.29 1.19 0.00 -- 0.00 12.58 10.46 9,299
09/30/07 12.58 (0.13) 4.20 4.07 -- -- -- 16.65 32.35(7) 5,676
09/30/08 16.65 (0.13) (6.02) (6.15) -- -- -- 10.50 (36.94) 3,820
Class C+
- -
10/31/03 $ 8.80 $(0.03) $ 1.42 $ 1.39 $ -- $-- $ -- $10.19 15.80% $23,036
11/01/03-09/30/04(3) 10.19 (0.04) 0.73 0.69 -- -- -- 10.88 6.77 18,295
09/30/05 10.88 0.01 0.51 0.52 -- -- -- 11.40 4.78 13,983
09/30/06 11.40 (0.09) 1.29 1.20 0.00 -- 0.00 12.60 10.54 26,927
09/30/07 12.60 (0.13) 4.19 4.06 -- -- -- 16.66 32.22(7) 28,927
09/30/08 16.66 (0.13) (6.02) (6.15) -- -- -- 10.51 (36.91) 16,419
Ratio
of net
Ratio of investment
expenses income (loss)
to average to average Portfolio
net assets(5) net assets(5) Turnover
- ------------- ------------- ---------
1.45% 0.35% 13%
1.45(4) 0.25(4) 20
1.45 0.74 32
1.45(6) (0.02)(6) 999
1.45(6) (0.13)(6) 446
1.45(6)(8) (0.30)(6)(8) 706
2.10% (0.30)% 13%
2.10(4) (0.40)(4) 20
2.10 0.09 32
2.10(6) (0.77)(6) 999
2.10(6) (0.75)(6) 446
2.10(6)(8) (0.98)(6)(8) 706
2.10% (0.30)% 13%
2.10(4) (0.40)(4) 20
2.10 0.09 32
2.10(6) (0.68)(6) 999
2.10(6) (0.78)(6) 446
2.10(6)(8) (0.95)(6)(8) 706
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)The Fund changed its fiscal year end from October 31 to September 30.
(4)Annualized
(5)Net of the following expense reimbursements (based on average net assets):
10/31/03 09/30/04(4) 09/30/05 09/30/06 09/30/07 09/30/08
-------- ----------- -------- -------- -------- --------
Disciplined Growth Class A.............. 0.26% 0.24% 0.38% 0.31% 0.34% 0.25%
Disciplined Growth Class B.............. 0.23 0.25 0.35 0.37 0.45 0.39
Disciplined Growth Class C+............. 0.23 0.24 0.33 0.30 0.30 0.24
(6)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/06 09/30/07 09/30/08
-------- -------- --------
Disciplined Growth Class A.............. 0.04% 0.11% 0.07%
Disciplined Growth Class B.............. 0.02 0.14 0.07
Disciplined Growth Class C+............. 0.03 0.12 0.07
(7)Total Return for each class was increased by 0.38%, 0.40% and 0.40% for
Class A, Class B and Class C, respectively, from a reimbursement by an
affiliate.
(8)Net of custody credits of 0.01%.
+ Effective February 23, 2004, Class II shares were redesignated to Class C
shares.
See Notes to Financial Statements
22
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
INTERNATIONAL SMALL-CAP FUND
----------------------------
Net gain
(loss) on
Net investments Distri- Net
Asset Net (both Dividends butions Asset
Value investment realized Total from from net from Distributions Total Value
beginning income and investment investment capital from return distri- end of Total
Period Ended of period (loss)(1) unrealized) operations income gains of capital butions period Return(2)
- -------------------- --------- ---------- ----------- ---------- ---------- ------- ------------- ------- ------ ---------
Class A
05/02/06-09/30/06(3) $12.50 $ 0.00 $(1.45) $(1.45) $-- $ -- $ -- $ -- $11.05 (11.60)%
09/30/07 11.05 (0.04) 2.99 2.95 -- -- -- -- 14.00 26.70
09/30/08 14.00 (0.00) (5.52) (5.52) -- (0.13) (0.01) (0.14) 8.34 (39.79)
Class B
05/02/06-09/30/06(3) $12.50 $(0.04) $(1.44) $(1.48) $-- $ -- $ -- $ -- $11.02 (11.84)%
09/30/07 11.02 (0.11) 2.97 2.86 -- -- -- -- 13.88 25.95
09/30/08 13.88 (0.08) (5.45) (5.53) -- (0.13) (0.01) (0.14) 8.21 (40.21)
Class C
05/02/06-09/30/06(3) $12.50 $(0.04) $(1.44) $(1.48) $-- $ -- $ -- $ -- $11.02 (11.84)%
09/30/07 11.02 (0.12) 2.98 2.86 -- -- -- -- 13.88 25.95
09/30/08 13.88 (0.09) (5.44) (5.53) -- (0.13) (0.01) (0.14) 8.21 (40.20)
Ratio
Net of net
Assets Ratio of investment
end of expenses income (loss)
period to average to average Portfolio
(000's) net assets(5) net assets(5) Turnover
- ------- ------------- ------------- ---------
$21,557 1.90%(4) 0.08%(4) 55%
30,845 1.90 (0.30) 70
16,830 1.90 (0.04) 93
$ 583 2.55%(4) (0.93)%(4) 55%
1,181 2.55 (0.89) 70
633 2.55 (0.68) 93
$ 3,363 2.55%(4) (1.07)%(4) 55%
5,357 2.55 (0.94) 70
2,199 2.55 (0.78) 93
- --------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements and expense reductions.
(3)Commencement of operations.
(4)Annualized
(5)Net of the following expense reimbursements (based on average net assets):
09/30/06(4) 09/30/07 09/30/08
----------- -------- --------
International Small-Cap Class A......... 1.27% 0.45% 0.54%
International Small-Cap Class B......... 12.63 2.10 1.53
International Small-Cap Class C......... 2.88 0.77 0.77
See Notes to Financial Statements
23
SunAmerica Blue Chip Growth Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Computers.............................. 6.8%
Medical-Biomedical/Gene................ 6.1
Repurchase Agreement................... 4.7
Beverages-Non-alcoholic................ 4.1
Medical Products....................... 3.7
Diversified Manufacturing Operations... 3.5
Cosmetics & Toiletries................. 3.3
Electronic Components-Semiconductors... 3.3
Applications Software.................. 3.2
Oil-Field Services..................... 2.8
Oil Companies-Exploration & Production. 2.8
Aerospace/Defense...................... 2.8
Networking Products.................... 2.7
Retail-Drug Store...................... 2.7
Web Portals/ISP........................ 2.7
Finance-Investment Banker/Broker....... 2.5
Wireless Equipment..................... 2.4
Agricultural Chemicals................. 2.2
Electric Products-Misc................. 2.0
Retail-Discount........................ 1.9
Instruments-Scientific................. 1.9
Oil Companies-Integrated............... 1.8
Enterprise Software/Service............ 1.7
Medical Instruments.................... 1.7
Medical-Generic Drugs.................. 1.7
Commercial Services-Finance............ 1.3
Electronic Forms....................... 1.3
Oil & Gas Drilling..................... 1.2
Multimedia............................. 1.2
Retail-Office Supplies................. 1.2
Data Processing/Management............. 1.1
Aerospace/Defense-Equipment............ 1.1
Electronic Measurement Instruments..... 1.1
Medical-Drugs.......................... 1.1
Electronics-Military................... 1.0
Banks-Fiduciary........................ 1.0
Medical-HMO............................ 1.0
X-Ray Equipment........................ 1.0
Insurance-Multi-line................... 0.9
Cellular Telecom....................... 0.9
Telecom Equipment-Fiber Optics......... 0.9
Oil Field Machinery & Equipment........ 0.8
Retail-Apparel/Shoe.................... 0.7
Finance-Other Services................. 0.7
Retail-Consumer Electronics............ 0.6
E-Commerce/Services.................... 0.6
Diversified Minerals................... 0.6
Medical-Wholesale Drug Distribution.... 0.6
Investment Management/Advisor Services. 0.5
Metal-Diversified...................... 0.5
Computer Aided Design.................. 0.5
Retail-Regional Department Stores...... 0.5
Internet Infrastructure Software....... 0.5
Coal................................... 0.3
Diagnostic Kits........................ 0.2
----
99.9%
====
- --------
* Calculated as a percentage of net assets
24
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCK -- 95.2%
Aerospace/Defense -- 2.8%
Boeing Co.................................. 6,900 $ 395,715
Lockheed Martin Corp....................... 4,150 455,131
Raytheon Co................................ 10,000 535,100
----------
1,385,946
----------
Aerospace/Defense-Equipment -- 1.1%
United Technologies Corp................... 9,300 558,558
----------
Agricultural Chemicals -- 2.2%
Monsanto Co................................ 11,100 1,098,678
----------
Applications Software -- 3.2%
Microsoft Corp............................. 58,900 1,572,041
----------
Banks-Fiduciary -- 1.0%
The Bank of New York Mellon Corp........... 15,949 519,618
----------
Beverages-Non-alcoholic -- 4.1%
PepsiCo, Inc............................... 28,500 2,031,195
----------
Cellular Telecom -- 0.9%
NII Holdings, Inc.+........................ 12,000 455,040
----------
Coal -- 0.3%
Peabody Energy Corp........................ 3,200 144,000
----------
Commercial Services-Finance -- 1.3%
Visa, Inc., Class A........................ 10,650 653,804
----------
Computer Aided Design -- 0.5%
Autodesk, Inc.+............................ 7,928 265,984
----------
Computers -- 6.8%
Apple, Inc.+............................... 8,950 1,017,257
Hewlett-Packard Co......................... 29,500 1,364,080
International Business Machines Corp....... 5,100 596,496
Research In Motion, Ltd.+.................. 5,850 399,555
----------
3,377,388
----------
Cosmetics & Toiletries -- 3.3%
Procter & Gamble Co........................ 23,500 1,637,715
----------
Data Processing/Management -- 1.1%
Fiserv, Inc.+.............................. 12,000 567,840
----------
Diagnostic Kits -- 0.2%
Inverness Medical Innovations, Inc.+....... 3,468 104,040
----------
Diversified Manufacturing Operations -- 3.5%
Danaher Corp............................... 13,300 923,020
Dover Corp................................. 11,500 466,325
General Electric Co........................ 14,400 367,200
----------
1,756,545
----------
Diversified Minerals -- 0.6%
Cia Vale do Rio Doce ADR................... 14,900 285,335
----------
E-Commerce/Services -- 0.6%
eBay, Inc.+................................ 13,200 295,416
----------
Electric Products-Misc. -- 2.0%
AMETEK, Inc................................ 11,704 477,172
Emerson Electric Co........................ 13,000 530,270
----------
1,007,442
----------
Market
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Electronic Components-Semiconductors -- 3.3%
Broadcom Corp., Class A+..................... 6,300 $ 117,369
Intel Corp................................... 52,404 981,527
MEMC Electronic Materials, Inc.+............. 6,450 182,277
Texas Instruments, Inc....................... 15,900 341,850
----------
1,623,023
----------
Electronic Forms -- 1.3%
Adobe Systems, Inc.+......................... 15,900 627,573
----------
Electronic Measurement Instruments -- 1.1%
Agilent Technologies, Inc.+.................. 18,300 542,778
----------
Electronics-Military -- 1.0%
L-3 Communications Holdings, Inc............. 5,300 521,096
----------
Enterprise Software/Service -- 1.7%
Oracle Corp.+................................ 42,500 863,175
----------
Finance-Investment Banker/Broker -- 2.5%
The Charles Schwab Corp...................... 27,400 712,400
The Goldman Sachs Group, Inc................. 4,300 550,400
----------
1,262,800
----------
Finance-Other Services -- 0.7%
CME Group, Inc............................... 900 334,359
----------
Instruments-Scientific -- 1.9%
Thermo Fisher Scientific, Inc.+.............. 16,800 924,000
----------
Insurance-Multi-line -- 0.9%
Assurant, Inc................................ 8,500 467,500
----------
Internet Infrastructure Software -- 0.5%
Akamai Technologies, Inc.+................... 13,100 228,464
----------
Investment Management/Advisor Services -- 0.5%
Invesco, Ltd................................. 12,800 268,544
----------
Medical Instruments -- 1.7%
Medtronic, Inc............................... 16,900 846,690
----------
Medical Products -- 3.7%
Johnson & Johnson............................ 17,900 1,240,112
Zimmer Holdings, Inc.+....................... 9,050 584,268
----------
1,824,380
----------
Medical-Biomedical/Gene -- 6.1%
Amgen, Inc.+................................. 2,800 165,956
Celgene Corp.+............................... 9,200 582,176
Genentech, Inc.+............................. 7,000 620,760
Genzyme Corp.+............................... 9,700 784,633
Gilead Sciences, Inc.+....................... 19,200 875,136
----------
3,028,661
----------
Medical-Drugs -- 1.1%
Abbott Laboratories.......................... 9,200 529,736
----------
Medical-Generic Drugs -- 1.7%
Barr Pharmaceuticals, Inc.+.................. 6,500 424,450
Mylan, Inc.+................................. 36,000 411,120
----------
835,570
----------
25
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
COMMON STOCK (continued)
Medical-HMO -- 1.0%
UnitedHealth Group, Inc................... 19,600 $ 497,644
----------
Medical-Wholesale Drug Distribution -- 0.6%
Cardinal Health, Inc...................... 5,600 275,968
----------
Metal-Diversified -- 0.5%
Freeport-McMoRan Copper & Gold, Inc....... 4,700 267,195
----------
Multimedia -- 1.2%
News Corp., Class A....................... 21,279 255,135
Time Warner, Inc.......................... 26,500 347,415
----------
602,550
----------
Networking Products -- 2.7%
Cisco Systems, Inc.+...................... 60,700 1,369,392
----------
Oil & Gas Drilling -- 1.2%
Transocean, Inc.+......................... 5,592 614,225
----------
Oil Companies-Exploration & Production -- 2.8%
Apache Corp............................... 2,800 291,984
Devon Energy Corp......................... 2,600 237,120
Ultra Petroleum Corp.+.................... 3,300 182,622
XTO Energy, Inc........................... 14,700 683,844
----------
1,395,570
----------
Oil Companies-Integrated -- 1.8%
Exxon Mobil Corp.......................... 11,400 885,324
----------
Oil Field Machinery & Equipment -- 0.8%
Cameron International Corp.+.............. 5,900 227,386
National-Oilwell Varco, Inc.+............. 3,700 185,851
----------
413,237
----------
Oil-Field Services -- 2.8%
Halliburton Co............................ 9,700 314,183
Schlumberger, Ltd......................... 12,000 937,080
Weatherford International, Ltd.+.......... 6,700 168,438
----------
1,419,701
----------
Retail-Apparel/Shoe -- 0.7%
American Eagle Outfitters, Inc............ 22,300 340,075
----------
Retail-Consumer Electronics -- 0.6%
Best Buy Co., Inc......................... 8,600 322,500
----------
Retail-Discount -- 1.9%
Target Corp............................... 8,300 407,115
Wal-Mart Stores, Inc...................... 9,400 562,966
----------
970,081
----------
Retail-Drug Store -- 2.7%
CVS Caremark Corp......................... 40,602 1,366,663
----------
Retail-Office Supplies -- 1.2%
Staples, Inc.............................. 26,400 594,000
----------
Retail-Regional Department Stores -- 0.5%
Kohl's Corp.+............................. 5,700 262,656
----------
Telecom Equipment-Fiber Optics -- 0.9%
Corning, Inc.............................. 28,600 447,304
----------
Shares/ Market
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------
Web Portals/ISP -- 2.7%
Google, Inc., Class A+.............. 3,350 $ 1,341,742
-----------
Wireless Equipment -- 2.4%
QUALCOMM, Inc....................... 28,150 1,209,606
-----------
X-Ray Equipment -- 1.0%
Hologic, Inc.+...................... 25,600 494,848
-----------
Total Long-Term Investment Securities
(cost $49,773,185)................. 47,535,215
-----------
REPURCHASE AGREEMENT -- 4.7%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $2,332,000).................. $2,332,000 2,332,000
-----------
TOTAL INVESTMENTS --
(cost $52,105,185)(2).............. 99.9% 49,867,215
Other assets less liabilities......... 0.1 46,937
---------- -----------
NET ASSETS -- 100.0% $49,914,152
========== ===========
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreement.
(2) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
26
SunAmerica Growth Opportunities Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Repurchase Agreements........................ 24.6%
Commercial Services.......................... 9.5
Commercial Services-Finance.................. 6.4
Data Processing/Management................... 5.0
Food-Meat Products........................... 4.4
Telecommunication Equipment.................. 3.9
X-Ray Equipment.............................. 3.9
Food-Misc.................................... 3.7
Food-Wholesale/Distribution.................. 3.0
Computer Services............................ 2.9
Investment Management/Advisor Services....... 2.4
Medical-Generic Drugs........................ 2.4
Hospital Beds/Equipment...................... 2.3
Electronic Components-Semiconductors......... 2.0
Gas-Distribution............................. 2.0
Retail-Apparel/Shoe.......................... 1.9
Dental Supplies & Equipment.................. 1.7
Veterinary Diagnostics....................... 1.6
Beverages-Wine/Spirits....................... 1.6
Computer Aided Design........................ 1.5
Oil Companies-Exploration & Production....... 1.2
Telecom Services............................. 1.1
Semiconductor Components-Integrated Circuits. 1.1
Private Corrections.......................... 1.1
Medical-Wholesale Drug Distribution.......... 1.0
Poultry...................................... 0.9
Home Decoration Products..................... 0.9
Retail-Discount.............................. 0.9
Medical-Hospitals............................ 0.9
Retail-Petroleum Products.................... 0.8
Casino Services.............................. 0.8
Medical-Outpatient/Home Medical.............. 0.5
Racetracks................................... 0.5
Batteries/Battery Systems.................... 0.5
Enterprise Software/Service.................. 0.5
Applications Software........................ 0.4
Internet Infrastructure Software............. 0.4
Linen Supply & Related Items................. 0.3
-----
100.5%
=====
- --------
* Calculated as a percentage of net assets
27
SunAmerica Growth Opportunities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)
---------------------------------------------------------
COMMON STOCK -- 75.9%
Applications Software -- 0.4%
Check Point Software Technologies+... 6,000 $ 136,440
----------
Batteries/Battery Systems -- 0.5%
Energizer Holdings, Inc.+............ 2,000 161,100
----------
Beverages-Wine/Spirits -- 1.6%
Central European Distribution Corp.+. 11,400 517,674
----------
Casino Services -- 0.8%
International Game Technology........ 4,300 73,874
Scientific Games Corp., Class A+..... 7,300 168,046
----------
241,920
----------
Commercial Services -- 9.5%
Iron Mountain, Inc.+................. 74,647 1,822,133
The Providence Service Corp.+........ 21,177 207,535
Ticketmaster+........................ 96,699 1,037,580
----------
3,067,248
----------
Commercial Services-Finance -- 6.4%
Equifax, Inc......................... 27,700 954,265
Euronet Worldwide, Inc.+............. 66,200 1,107,526
----------
2,061,791
----------
Computer Aided Design -- 1.5%
Aspen Technology, Inc.+.............. 39,300 499,110
----------
Computer Services -- 2.9%
DST Systems, Inc.+................... 16,600 929,434
----------
Data Processing/Management -- 5.0%
Fiserv, Inc.+........................ 33,800 1,599,416
----------
Dental Supplies & Equipment -- 1.7%
Sirona Dental Systems, Inc.+......... 23,900 556,392
----------
Electronic Components-Semiconductors -- 2.0%
Intersil Corp., Class A.............. 8,100 134,298
Macrovision Solutions Corp.+......... 9,921 152,585
Microchip Technology, Inc............ 12,000 353,160
----------
640,043
----------
Enterprise Software/Service -- 0.5%
Lawson Software, Inc.+............... 22,400 156,800
----------
Food-Meat Products -- 4.4%
Hormel Foods Corp.................... 18,300 663,924
Tyson Foods, Inc., Class A........... 62,200 742,668
----------
1,406,592
----------
Food-Misc. -- 3.7%
Smart Balance, Inc.+................. 93,100 610,736
Chiquita Brands International, Inc.+. 37,300 589,713
----------
1,200,449
----------
Food-Wholesale/Distribution -- 3.0%
Fresh Del Monte Produce, Inc.+....... 42,800 950,160
----------
Gas-Distribution -- 2.0%
AGL Resources, Inc................... 20,100 630,738
----------
Home Decoration Products -- 0.9%
Newell Rubbermaid, Inc............... 16,400 283,064
----------
Market
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
Hospital Beds/Equipment -- 2.3%
Kinetic Concepts, Inc.+................... 25,900 $ 740,481
-----------
Internet Infrastructure Software -- 0.4%
Akamai Technologies, Inc.+................ 7,300 127,312
-----------
Investment Management/Advisor Services -- 2.4%
Affiliated Managers Group, Inc.+.......... 4,600 381,110
Invesco, Ltd.............................. 18,600 390,228
-----------
771,338
-----------
Linen Supply & Related Items -- 0.3%
G&K Services, Inc., Class A............... 2,992 98,886
-----------
Medical-Generic Drugs -- 2.4%
Mylan, Inc.+.............................. 66,600 760,572
-----------
Medical-Hospitals -- 0.9%
Community Health Systems, Inc.+........... 9,400 275,514
-----------
Medical-Outpatient/Home Medical -- 0.5%
Air Methods Corp.+........................ 6,200 175,522
-----------
Medical-Wholesale Drug Distribution -- 1.0%
AmerisourceBergen Corp.................... 8,900 335,085
-----------
Oil Companies-Exploration & Production -- 1.2%
Plains Exploration & Production Co.+...... 11,000 386,760
-----------
Poultry -- 0.9%
Sanderson Farms, Inc...................... 7,900 290,246
-----------
Private Corrections -- 1.1%
Corrections Corp. of America+............. 14,300 355,355
-----------
Racetracks -- 0.5%
International Speedway Corp., Class A..... 4,200 163,422
-----------
Retail-Apparel/Shoe -- 1.9%
Abercrombie & Fitch Co., Class A.......... 8,300 327,435
Hanesbrands, Inc.+........................ 13,200 287,100
-----------
614,535
-----------
Retail-Discount -- 0.9%
HSN, Inc.+................................ 25,600 281,856
-----------
Retail-Petroleum Products -- 0.8%
World Fuel Services Corp.................. 10,700 246,421
-----------
Semiconductor Components-Integrated Circuits -- 1.1%
Linear Technology Corp..................... 11,700 358,722
-----------
Telecom Services -- 1.1%
Amdocs, Ltd.+.............................. 13,400 366,892
-----------
Telecommunication Equipment -- 3.9%
Harris Corp................................ 27,300 1,261,260
-----------
Veterinary Diagnostics -- 1.6%
Animal Health International, Inc.+......... 15,489 127,629
VCA Antech, Inc.+.......................... 13,600 400,792
-----------
528,421
-----------
X-Ray Equipment -- 3.9%
Hologic, Inc.+............................. 64,400 1,244,852
-----------
Total Long-Term Investment Securities
(cost $26,010,668)........................ 24,421,823
-----------
28
SunAmerica Growth Opportunities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------
REPURCHASE AGREEMENTS(1) -- 24.6%
State Street Bank & Trust Co.
Joint Repurchase Agreement......... $7,000,000 $ 7,000,000
UBS Securities, LLC
Joint Repurchase Agreement......... 923,000 923,000
-----------
Total Repurchase Agreements
(cost $7,923,000).................. 7,923,000
-----------
TOTAL INVESTMENTS --
(cost $33,933,668)(2).............. 100.5% 32,344,823
Liabilities in excess of other assets. (0.5) (175,733)
---------- -----------
NET ASSETS -- 100.0% $32,169,090
========== ===========
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreements.
(2) See Note 7 for cost of investment on a tax basis.
See Notes to Financial Statements
29
SunAmerica New Century Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Repurchase Agreement....................... 11.8%
Commercial Services-Finance................ 5.5
Building-Residential/Commercial............ 4.6
Finance-Investment Banker/Broker........... 3.9
Distribution/Wholesale..................... 3.8
Footwear & Related Apparel................. 3.3
Food-Misc.................................. 2.9
Banks-Super Regional....................... 2.7
Medical Instruments........................ 2.6
Retail-Apparel/Shoe........................ 2.6
Telecommunication Equipment................ 2.2
Networking Products........................ 2.2
Computers.................................. 2.2
Medical Products........................... 2.1
Commercial Services........................ 2.1
Diversified Operations/Commercial Services. 2.1
Health Care Cost Containment............... 2.1
Oil Companies-Exploration & Production..... 2.1
Data Processing/Management................. 2.0
Investment Management/Advisor Services..... 2.0
Mining..................................... 1.9
Applications Software...................... 1.9
Telecom Services........................... 1.5
Food-Canned................................ 1.3
Appliances................................. 1.3
X-Ray Equipment............................ 1.2
Computers-Periphery Equipment.............. 1.1
Beverages-Non-alcoholic.................... 1.1
Enterprise Software/Service................ 1.1
Retirement/Aged Care....................... 1.1
Computer Aided Design...................... 1.1
Medical-Generic Drugs...................... 1.1
Oil Field Machinery & Equipment............ 1.0
Medical-Drugs.............................. 1.0
Rental Auto/Equipment...................... 1.0
E-Marketing/Info........................... 1.0
Food-Meat Products......................... 0.9
Food-Wholesale/Distribution................ 0.8
Real Estate Operations & Development....... 0.5
Casino Services............................ 0.3
Dental Supplies & Equipment................ 0.2
----
87.2%
====
- --------
* Calculated as a percentage of net assets
30
SunAmerica New Century Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCK -- 75.4%
Appliances -- 1.3%
Whirlpool Corp......................... 8,000 $ 634,320
----------
Applications Software -- 1.9%
Check Point Software Technologies+..... 16,200 368,388
Microsoft Corp......................... 20,800 555,152
----------
923,540
----------
Banks-Super Regional -- 2.7%
Bank of America Corp................... 37,300 1,305,500
----------
Beverages-Non-alcoholic -- 1.1%
Hansen Natural Corp.+.................. 17,600 532,400
----------
Building-Residential/Commercial -- 4.6%
KB Home................................ 26,500 521,520
Ryland Group, Inc...................... 19,500 517,140
Standard-Pacific Corp.................. 233,232 1,145,169
----------
2,183,829
----------
Casino Services -- 0.3%
Scientific Games Corp., Class A+....... 6,900 158,838
----------
Commercial Services -- 2.1%
Iron Mountain, Inc.+................... 40,900 998,369
----------
Commercial Services-Finance -- 5.5%
Euronet Worldwide, Inc.+............... 94,600 1,582,658
Global Payments, Inc................... 11,300 506,918
Heartland Payment Systems, Inc......... 21,900 559,764
----------
2,649,340
----------
Computer Aided Design -- 1.1%
Aspen Technology, Inc.+................ 40,100 509,270
----------
Computers -- 2.2%
Hewlett-Packard Co..................... 22,300 1,031,152
----------
Computers-Periphery Equipment -- 1.1%
Synaptics, Inc......................... 17,650 533,383
----------
Containers-Paper/Plastic -- 0.0%
Temple-Inland, Inc..................... 79 1,205
----------
Data Processing/Management -- 2.0%
Fiserv, Inc.+.......................... 20,100 951,132
----------
Dental Supplies & Equipment -- 0.2%
Sirona Dental Systems, Inc.+........... 2,952 68,722
----------
Distribution/Wholesale -- 3.8%
Beacon Roofing Supply, Inc.+........... 50,100 782,562
Pool Corp.............................. 44,245 1,032,236
----------
1,814,798
----------
Diversified Operations/Commercial Services -- 2.1%
Chemed Corp............................. 24,300 997,758
----------
E-Marketing/Info -- 1.0%
Constant Contact, Inc.+................. 26,966 460,310
----------
Enterprise Software/Service -- 1.1%
Oracle Corp.+........................... 26,000 528,060
----------
Finance-Investment Banker/Broker -- 3.9%
Citigroup, Inc.......................... 45,300 929,103
Investment Technology Group, Inc.+...... 9,700 295,171
Market
Value
Security Description Shares (Note 3)
------------------------------------------------------------------
Finance-Investment Banker/Broker (continued)
JPMorgan Chase & Co.......................... 14,100 $ 658,470
----------
1,882,744
----------
Food-Canned -- 1.3%
Treehouse Foods, Inc.+....................... 21,400 635,580
----------
Food-Meat Products -- 0.9%
Hormel Foods Corp............................ 12,350 448,058
----------
Food-Misc. -- 2.9%
Cal-Maine Foods, Inc......................... 30,207 828,880
Chiquita Brands International, Inc.+......... 35,500 561,255
----------
1,390,135
----------
Food-Wholesale/Distribution -- 0.8%
Fresh Del Monte Produce, Inc.+............... 16,278 361,372
----------
Footwear & Related Apparel -- 3.3%
Iconix Brand Group, Inc.+.................... 121,900 1,594,452
----------
Health Care Cost Containment -- 2.1%
McKesson Corp................................ 18,300 984,723
----------
Investment Management/Advisor Services -- 2.0%
Invesco, Ltd................................. 45,300 950,394
----------
Medical Instruments -- 2.6%
Beckman Coulter, Inc......................... 17,800 1,263,622
----------
Medical Products -- 2.1%
Becton Dickinson & Co........................ 12,700 1,019,302
----------
Medical-Drugs -- 1.0%
AstraZeneca PLC ADR.......................... 10,900 478,292
----------
Medical-Generic Drugs -- 1.1%
Mylan, Inc.+................................. 44,300 505,906
----------
Mining -- 1.9%
Agnico-Eagle Mines, Ltd...................... 16,800 925,176
----------
Networking Products -- 2.2%
Cisco Systems, Inc.+......................... 46,400 1,046,784
----------
Oil Companies-Exploration & Production -- 2.1%
McMoRan Exploration Co.+..................... 41,400 978,696
----------
Oil Field Machinery & Equipment -- 1.0%
FMC Technologies, Inc.+...................... 10,400 484,120
----------
Real Estate Operations & Development -- 0.5%
The St. Joe Co.+............................. 6,000 234,540
----------
Rental Auto/Equipment -- 1.0%
Rent-A-Center, Inc.+......................... 21,300 474,564
----------
Retail-Apparel/Shoe -- 2.6%
Tween Brands, Inc.+.......................... 127,700 1,250,183
----------
Retirement/Aged Care -- 1.1%
Brookdale Senior Living, Inc................. 23,500 516,765
----------
Telecom Services -- 1.5%
Amdocs, Ltd.+................................ 26,300 720,094
----------
Telecommunication Equipment -- 2.2%
Harris Corp.................................. 23,100 1,067,220
----------
31
SunAmerica New Century Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Shares/ Market
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------
COMMON STOCK (continued)
X-Ray Equipment -- 1.2%
Hologic, Inc.+...................... 28,800 $ 556,704
-----------
Total Long-Term Investment Securities
(cost $37,615,971)................. 36,051,352
-----------
REPURCHASE AGREEMENT -- 11.8%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $5,662,000).................. $5,662,000 5,662,000
-----------
TOTAL INVESTMENTS --
(cost $43,277,971)(2).............. 87.2% 41,713,352
Other assets less liabilities......... 12.8 6,101,358
---------- -----------
NET ASSETS -- 100.0% $47,814,710
========== ===========
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchasement Agreement.
(2) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
32
SunAmerica Growth and Income Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Oil Companies-Integrated............... 10.1%
Repurchase Agreement................... 5.9
Medical-Drugs.......................... 5.7
Diversified Manufacturing Operations... 5.5
Banks-Super Regional................... 4.8
Electric-Integrated.................... 4.5
Finance-Investment Banker/Broker....... 4.4
Telephone-Integrated................... 4.0
Multimedia............................. 3.1
Investment Management/Advisor Services. 3.0
Tobacco................................ 2.9
Retail-Apparel/Shoe.................... 2.8
Applications Software.................. 2.2
Electronic Components-Semiconductors... 2.1
Medical Products....................... 2.0
Medical-HMO............................ 1.9
Networking Products.................... 1.8
Cosmetics & Toiletries................. 1.8
Beverages-Non-alcoholic................ 1.7
Aerospace/Defense-Equipment............ 1.6
Paper & Related Products............... 1.6
Health Care Cost Containment........... 1.5
Vitamins & Nutrition Products.......... 1.5
Telecommunication Equipment............ 1.5
Non-Hazardous Waste Disposal........... 1.5
Retail-Drug Store...................... 1.5
Chemicals-Diversified.................. 1.5
Finance-Credit Card.................... 1.5
Food-Misc.............................. 1.4
Aerospace/Defense...................... 1.4
Oil-Field Services..................... 1.4
Retail-Discount........................ 1.3
Electronic Components-Misc............. 1.3
Wireless Equipment..................... 1.2
Enterprise Software/Service............ 1.2
Computers.............................. 1.1
Retail-Restaurants..................... 1.0
Oil Companies-Exploration & Production. 1.0
Metal-Diversified...................... 1.0
Medical Instruments.................... 1.0
Computer Services...................... 0.9
Web Portals/ISP........................ 0.9
Telecom Equipment-Fiber Optics......... 0.9
-----
100.9%
=====
- --------
* Calculated as a percentage of net assets
33
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCK -- 95.0%
Aerospace/Defense -- 1.4%
General Dynamics Corp...................... 13,600 $1,001,232
----------
Aerospace/Defense-Equipment -- 1.6%
United Technologies Corp................... 19,200 1,153,152
----------
Applications Software -- 2.2%
Microsoft Corp............................. 60,300 1,609,407
----------
Banks-Super Regional -- 4.8%
Bank of America Corp....................... 66,100 2,313,500
US Bancorp................................. 32,900 1,185,058
----------
3,498,558
----------
Beverages-Non-alcoholic -- 1.7%
PepsiCo, Inc............................... 17,700 1,261,479
----------
Chemicals-Diversified -- 1.5%
E.I. du Pont de Nemours & Co............... 26,400 1,063,920
----------
Computer Services -- 0.9%
Computer Sciences Corp.+................... 16,600 667,154
----------
Computers -- 1.1%
Hewlett-Packard Co......................... 17,200 795,328
----------
Cosmetics & Toiletries -- 1.8%
Procter & Gamble Co........................ 18,400 1,282,296
----------
Diversified Manufacturing Operations -- 5.5%
General Electric Co........................ 83,500 2,129,250
Honeywell International, Inc............... 22,900 951,495
Textron, Inc............................... 31,400 919,392
----------
4,000,137
----------
Electric-Integrated -- 4.5%
FPL Group, Inc............................. 13,600 684,080
PG&E Corp.................................. 20,100 752,745
Southern Co................................ 25,300 953,557
Xcel Energy, Inc........................... 43,500 869,565
----------
3,259,947
----------
Electronic Components-Misc. -- 1.3%
Tyco Electronics, Ltd...................... 34,700 959,802
----------
Electronic Components-Semiconductors -- 2.1%
Intel Corp................................. 41,000 767,930
MEMC Electronic Materials, Inc.+........... 25,600 723,456
----------
1,491,386
----------
Enterprise Software/Service -- 1.2%
Oracle Corp.+.............................. 41,900 850,989
----------
Finance-Credit Card -- 1.5%
American Express Co........................ 30,000 1,062,900
----------
Finance-Investment Banker/Broker -- 4.4%
Citigroup, Inc............................. 57,500 1,179,325
JPMorgan Chase & Co........................ 43,500 2,031,450
----------
3,210,775
----------
Food-Misc. -- 1.4%
Kraft Foods, Inc., Class A................. 32,000 1,048,000
----------
Market
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Health Care Cost Containment -- 1.5%
McKesson Corp................................ 20,900 $1,124,629
----------
Investment Management/Advisor Services -- 3.0%
Ameriprise Financial, Inc.................... 29,700 1,134,540
Invesco, Ltd................................. 50,300 1,055,294
----------
2,189,834
----------
Medical Instruments -- 1.0%
Medtronic, Inc............................... 14,400 721,440
----------
Medical Products -- 2.0%
Johnson & Johnson............................ 21,100 1,461,808
----------
Medical-Drugs -- 5.7%
Abbott Laboratories.......................... 13,600 783,088
Eli Lilly & Co............................... 15,600 686,868
Merck & Co., Inc............................. 24,400 770,064
Pfizer, Inc.................................. 62,050 1,144,202
Wyeth........................................ 20,600 760,964
----------
4,145,186
----------
Medical-HMO -- 1.9%
Aetna, Inc................................... 20,200 729,422
UnitedHealth Group, Inc...................... 27,100 688,069
----------
1,417,491
----------
Metal-Diversified -- 1.0%
Freeport-McMoRan Copper & Gold, Inc.......... 12,700 721,995
----------
Multimedia -- 3.1%
The Walt Disney Co........................... 34,300 1,052,667
Time Warner, Inc............................. 92,700 1,215,297
----------
2,267,964
----------
Networking Products -- 1.8%
Cisco Systems, Inc.+......................... 57,500 1,297,200
----------
Non-Hazardous Waste Disposal -- 1.5%
Waste Management, Inc........................ 34,900 1,099,001
----------
Oil Companies-Exploration & Production -- 1.0%
XTO Energy, Inc.............................. 16,100 748,972
----------
Oil Companies-Integrated -- 10.1%
Chevron Corp................................. 21,800 1,798,064
ConocoPhillips............................... 24,800 1,816,600
Exxon Mobil Corp............................. 25,000 1,941,500
Marathon Oil Corp............................ 45,800 1,826,046
----------
7,382,210
----------
Oil-Field Services -- 1.4%
Schlumberger, Ltd............................ 12,800 999,552
----------
Paper & Related Products -- 1.6%
International Paper Co....................... 43,100 1,128,358
----------
Retail-Apparel/Shoe -- 2.8%
American Eagle Outfitters, Inc............... 70,300 1,072,075
Limited Brands, Inc.......................... 55,700 964,724
----------
2,036,799
----------
34
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Shares/ Market
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------------
COMMON STOCK (continued)
Retail-Discount -- 1.3%
Target Corp.......................... 19,800 $ 971,190
-----------
Retail-Drug Store -- 1.5%
CVS Caremark Corp.................... 32,600 1,097,316
-----------
Retail-Restaurants -- 1.0%
McDonald's Corp...................... 12,300 758,910
-----------
Telecom Equipment-Fiber Optics -- 0.9%
Corning, Inc......................... 40,300 630,292
-----------
Telecommunication Equipment -- 1.5%
Harris Corp.......................... 24,000 1,108,800
-----------
Telephone-Integrated -- 4.0%
AT&T, Inc............................ 64,000 1,786,880
Verizon Communications, Inc.......... 35,400 1,135,986
-----------
2,922,866
-----------
Tobacco -- 2.9%
Altria Group, Inc.................... 41,500 823,360
Philip Morris International, Inc..... 26,600 1,279,460
-----------
2,102,820
-----------
Vitamins & Nutrition Products -- 1.5%
NBTY, Inc.+.......................... 37,700 1,112,904
-----------
Web Portals/ISP -- 0.9%
Google, Inc., Class A+............... 1,600 640,832
-----------
Wireless Equipment -- 1.2%
QUALCOMM, Inc........................ 20,500 880,885
-----------
Total Long-Term Investment Securities
(cost $76,599,281).................. 69,185,716
-----------
REPURCHASE AGREEMENT -- 5.9%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $4,283,000)................... $4,283,000 4,283,000
-----------
TOTAL INVESTMENTS --
(cost $80,882,281)(2)............... 100.9% 73,468,716
Liabilities in excess of other assets.. (0.9) (642,674)
---------- -----------
NET ASSETS -- 100.0% $72,826,042
========== ===========
- --------
+ Non-income producing security
(1)See Note 3 for details of Joint Repurchase Agreement.
(2)See Note 7 for cost of investments on a tax basis.
See Notes to Financial Statements
35
SunAmerica Balanced Assets Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Federal Home Loan Mtg. Corp............ 7.5%
Oil Companies-Integrated............... 4.4
Federal National Mtg. Assoc............ 4.1
Electric-Integrated.................... 3.8
Finance-Investment Banker/Broker....... 3.8
Repurchase Agreements.................. 3.7
Diversified Financial Services......... 3.7
Banks-Super Regional................... 3.2
Diversified Manufacturing Operations... 3.0
Medical-Drugs.......................... 2.6
United States Treasury Notes........... 2.6
Telephone-Integrated................... 2.4
Oil Companies-Exploration & Production. 2.4
Computers.............................. 2.3
Medical Products....................... 2.1
Medical-Biomedical/Gene................ 2.0
Multimedia............................. 1.8
Cosmetics & Toiletries................. 1.6
Applications Software.................. 1.6
Retail-Drug Store...................... 1.4
Beverages-Non-alcoholic................ 1.4
Aerospace/Defense...................... 1.3
Electronic Components-Semiconductors... 1.2
Special Purpose Entities............... 1.1
Retail-Discount........................ 1.1
Medical-HMO............................ 1.1
Investment Management/Advisor Services. 1.1
Oil-Field Services..................... 1.0
Insurance-Multi-line................... 1.0
Aerospace/Defense-Equipment............ 1.0
Networking Products.................... 0.9
Web Portals/ISP........................ 0.9
Agricultural Chemicals................. 0.9
Wireless Equipment..................... 0.8
Government National Mtg. Assoc......... 0.8
Banks-Commercial....................... 0.7
Electric Products-Misc................. 0.7
Retail-Apparel/Shoe.................... 0.7
Insurance-Property/Casualty............ 0.6
Sovereign.............................. 0.6
Instruments-Scientific................. 0.6
Commercial Services-Finance............ 0.6
Enterprise Software/Service............ 0.6
Medical Instruments.................... 0.6
Medical-Generic Drugs.................. 0.6
Chemicals-Diversified.................. 0.6
Paper & Related Products............... 0.5
Consumer Products-Misc................. 0.5
Non-Hazardous Waste Disposal........... 0.5
Telecommunication Equipment............ 0.5
Cellular Telecom....................... 0.5
Pipelines.............................. 0.5
Agricultural Operations................ 0.5
Banks-Fiduciary........................ 0.4
Finance-Credit Card.................... 0.4
Electronic Measurement Instruments..... 0.4
Electronic Forms....................... 0.4
Metal-Diversified...................... 0.4
Telecom Services....................... 0.4
Oil & Gas Drilling..................... 0.4
Tobacco................................ 0.4
Retail-Office Supplies................. 0.4
Data Processing/Management............ 0.4%
Electronics-Military.................. 0.4
Insurance-Life/Health................. 0.4
United States Treasury Bonds.......... 0.4
X-Ray Equipment....................... 0.3
Transport-Air Freight................. 0.3
Savings & Loans/Thrifts............... 0.3
Oil Field Machinery & Equipment....... 0.3
Telecom Equipment-Fiber Optics........ 0.3
Finance-Other Services................ 0.3
Steel-Producers....................... 0.2
Electric-Generation................... 0.2
Medical-Wholesale Drug Distribution... 0.2
Medical-Hospitals..................... 0.2
Office Automation & Equipment......... 0.2
Retail-Consumer Electronics........... 0.2
Transport-Rail........................ 0.2
E-Commerce/Services................... 0.2
Food-Misc............................. 0.2
Cable TV.............................. 0.2
Diversified Minerals.................. 0.2
Oil Refining & Marketing.............. 0.2
Computer Aided Design................. 0.2
Retail-Regional Department Stores..... 0.2
Banks-Money Center.................... 0.2
Broadcast Services/Program............ 0.2
Internet Infrastructure Software...... 0.2
Real Estate Operations & Development.. 0.1
Insurance-Reinsurance................. 0.1
Real Estate Investment Trusts......... 0.1
Finance-Commercial.................... 0.1
Diversified Operations................ 0.1
Beverages-Wine/Spirits................ 0.1
Containers-Paper/Plastic.............. 0.1
Insurance Brokers..................... 0.1
Casino Hotels......................... 0.1
Chemicals-Specialty................... 0.1
Computer Services..................... 0.1
Coal.................................. 0.1
Metal-Aluminum........................ 0.1
Metal Processors & Fabrication........ 0.1
Airlines.............................. 0.1
Transport-Marine...................... 0.1
Finance-Auto Loans.................... 0.1
Television............................ 0.1
Food-Retail........................... 0.1
Independent Power Producers........... 0.1
Diagnostic Kits....................... 0.1
Brewery............................... 0.1
Transport-Services.................... 0.1
Auto-Cars/Light Trucks................ 0.1
Finance-Mortgage Loan/Banker.......... 0.1
Cruise Lines.......................... 0.1
Water................................. 0.1
Satellite Telecom..................... 0.1
Physicians Practice Management........ 0.1
Auto/Truck Parts & Equipment-Original. 0.1
----
99.4%
====
- --------
* Calculated as a percentage of net assets
36
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)
----------------------------------------------------------
COMMON STOCK -- 60.7%
Aerospace/Defense -- 1.3%
Boeing Co............................. 5,200 $ 298,220
General Dynamics Corp................. 6,200 456,444
Lockheed Martin Corp.................. 3,100 339,977
Raytheon Co........................... 7,400 395,974
----------
1,490,615
----------
Aerospace/Defense-Equipment -- 0.9%
United Technologies Corp.............. 15,900 954,954
----------
Agricultural Chemicals -- 0.7%
Monsanto Co........................... 8,300 821,534
----------
Agricultural Operations -- 0.4%
Archer-Daniels-Midland Co............. 22,800 499,548
----------
Applications Software -- 1.5%
Microsoft Corp........................ 64,478 1,720,918
----------
Banks-Fiduciary -- 0.3%
The Bank of New York Mellon Corp...... 11,847 385,975
----------
Banks-Super Regional -- 2.9%
Bank of America Corp.................. 41,488 1,452,080
US Bancorp............................ 21,700 781,634
Wells Fargo & Co...................... 24,900 934,497
----------
3,168,211
----------
Beverages-Non-alcoholic -- 1.4%
PepsiCo, Inc.......................... 21,300 1,518,051
----------
Cellular Telecom -- 0.3%
NII Holdings, Inc.+................... 8,900 337,488
----------
Chemicals-Diversified -- 0.4%
E.I. du Pont de Nemours & Co.......... 11,700 471,510
----------
Coal -- 0.1%
Peabody Energy Corp................... 2,400 108,000
----------
Commercial Services-Finance -- 0.4%
Visa, Inc., Class A................... 7,950 488,051
----------
Computer Aided Design -- 0.2%
Autodesk, Inc.+....................... 5,844 196,066
----------
Computers -- 2.3%
Apple, Inc.+.......................... 6,600 750,156
Hewlett-Packard Co.................... 22,000 1,017,280
International Business Machines Corp.. 3,800 444,448
Research In Motion, Ltd.+............. 4,300 293,690
----------
2,505,574
----------
Consumer Products-Misc. -- 0.5%
Kimberly-Clark Corp................... 9,100 590,044
----------
Cosmetics & Toiletries -- 1.6%
Procter & Gamble Co................... 25,400 1,770,126
----------
Data Processing/Management -- 0.4%
Fiserv, Inc.+......................... 9,000 425,880
----------
Diagnostic Kits -- 0.1%
Inverness Medical Innovations, Inc.+.. 2,601 78,030
----------
Market
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
Diversified Manufacturing Operations -- 2.8%
Danaher Corp............................... 9,900 $ 687,060
Dover Corp................................. 8,590 348,325
Eaton Corp................................. 6,000 337,080
General Electric Co........................ 51,300 1,308,150
Honeywell International, Inc............... 10,400 432,120
----------
3,112,735
----------
Diversified Minerals -- 0.2%
Cia Vale do Rio Doce ADR................... 11,100 212,565
----------
E-Commerce/Services -- 0.2%
eBay, Inc.+................................ 9,900 221,562
----------
Electric Products-Misc. -- 0.7%
AMETEK, Inc................................ 8,734 356,085
Emerson Electric Co........................ 9,700 395,663
----------
751,748
----------
Electric-Integrated -- 2.0%
FPL Group, Inc............................. 9,700 487,910
PG&E Corp.................................. 13,700 513,065
Southern Co................................ 17,300 652,037
Xcel Energy, Inc........................... 30,100 601,699
----------
2,254,711
----------
Electronic Components-Semiconductors -- 1.1%
Broadcom Corp., Class A+................... 4,700 87,561
Intel Corp................................. 39,100 732,343
MEMC Electronic Materials, Inc.+........... 4,800 135,648
Texas Instruments, Inc..................... 11,900 255,850
----------
1,211,402
----------
Electronic Forms -- 0.4%
Adobe Systems, Inc.+....................... 11,900 469,693
----------
Electronic Measurement Instruments -- 0.4%
Agilent Technologies, Inc.+................ 13,700 406,342
----------
Electronics-Military -- 0.4%
L-3 Communications Holdings, Inc........... 4,000 393,280
----------
Enterprise Software/Service -- 0.6%
Oracle Corp.+.............................. 31,700 643,827
----------
Finance-Credit Card -- 0.4%
American Express Co........................ 12,500 442,875
----------
Finance-Investment Banker/Broker -- 3.2%
Citigroup, Inc............................. 53,988 1,107,294
JPMorgan Chase & Co........................ 31,700 1,480,390
The Charles Schwab Corp.................... 20,400 530,400
The Goldman Sachs Group, Inc............... 3,200 409,600
----------
3,527,684
----------
Finance-Other Services -- 0.2%
CME Group, Inc............................. 675 250,769
----------
Independent Power Producers -- 0.0%
Mirant Corp.+.............................. 186 3,402
----------
Instruments-Scientific -- 0.6%
Thermo Fisher Scientific, Inc.+............ 12,600 693,000
----------
37
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
COMMON STOCK (continued)
Insurance-Multi-line -- 0.8%
Assurant, Inc................................ 6,300 $ 346,500
MetLife, Inc................................. 9,500 532,000
----------
878,500
----------
Insurance-Property/Casualty -- 0.6%
Chubb Corp................................... 11,300 620,370
----------
Internet Infrastructure Software -- 0.1%
Akamai Technologies, Inc.+................... 9,800 170,912
----------
Investment Management/Advisor Services -- 1.0%
Ameriprise Financial, Inc.................... 12,000 458,400
Invesco, Ltd................................. 31,500 660,870
----------
1,119,270
----------
Medical Instruments -- 0.6%
Medtronic, Inc............................... 12,600 631,260
----------
Medical Products -- 2.0%
Johnson & Johnson............................ 25,500 1,766,640
Zimmer Holdings, Inc.+....................... 6,750 435,780
----------
2,202,420
----------
Medical-Biomedical/Gene -- 2.0%
Amgen, Inc.+................................. 2,100 124,467
Celgene Corp.+............................... 6,900 436,632
Genentech, Inc.+............................. 5,200 461,136
Genzyme Corp.+............................... 7,200 582,408
Gilead Sciences, Inc.+....................... 14,400 656,352
----------
2,260,995
----------
Medical-Drugs -- 2.3%
Abbott Laboratories.......................... 13,000 748,540
Eli Lilly & Co............................... 6,800 299,404
Merck & Co., Inc............................. 10,800 340,848
Pfizer, Inc.................................. 41,714 769,206
Wyeth........................................ 9,200 339,848
----------
2,497,846
----------
Medical-Generic Drugs -- 0.6%
Barr Pharmaceuticals, Inc.+.................. 4,800 313,440
Mylan, Inc.+................................. 26,900 307,198
----------
620,638
----------
Medical-HMO -- 0.9%
Aetna, Inc................................... 9,200 332,212
UnitedHealth Group, Inc...................... 27,200 690,608
----------
1,022,820
----------
Medical-Wholesale Drug Distribution -- 0.2%
Cardinal Health, Inc......................... 4,200 206,976
----------
Metal-Diversified -- 0.4%
Freeport-McMoRan Copper & Gold, Inc.......... 8,200 466,170
----------
Multimedia -- 1.4%
News Corp., Class A.......................... 15,914 190,809
The Walt Disney Co........................... 17,400 534,006
Time Warner, Inc............................. 61,700 808,887
----------
1,533,702
----------
Market
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Networking Products -- 0.9%
Cisco Systems, Inc.+......................... 45,300 $1,021,968
----------
Non-Hazardous Waste Disposal -- 0.5%
Waste Management, Inc........................ 16,000 503,840
----------
Oil & Gas Drilling -- 0.4%
Transocean, Inc.+............................ 4,183 459,461
----------
Oil Companies-Exploration & Production -- 2.0%
Apache Corp.................................. 6,150 641,322
Devon Energy Corp............................ 1,950 177,840
Occidental Petroleum Corp.................... 6,500 457,925
Ultra Petroleum Corp.+....................... 2,500 138,350
XTO Energy, Inc.............................. 18,400 855,968
----------
2,271,405
----------
Oil Companies-Integrated -- 4.3%
Chevron Corp................................. 13,328 1,099,293
ConocoPhillips............................... 13,300 974,225
Exxon Mobil Corp............................. 24,500 1,902,670
Marathon Oil Corp............................ 19,400 773,478
----------
4,749,666
----------
Oil Field Machinery & Equipment -- 0.3%
Cameron International Corp.+................. 4,400 169,576
National-Oilwell Varco, Inc.+................ 2,700 135,621
----------
305,197
----------
Oil-Field Services -- 1.0%
Halliburton Co............................... 7,300 236,447
Schlumberger, Ltd............................ 8,900 695,001
Weatherford International, Ltd.+............. 5,000 125,700
----------
1,057,148
----------
Paper & Related Products -- 0.5%
International Paper Co....................... 19,800 518,364
----------
Retail-Apparel/Shoe -- 0.7%
American Eagle Outfitters, Inc............... 48,300 736,575
----------
Retail-Consumer Electronics -- 0.2%
Best Buy Co., Inc............................ 6,400 240,000
----------
Retail-Discount -- 1.1%
Target Corp.................................. 15,500 760,275
Wal-Mart Stores, Inc......................... 7,000 419,230
----------
1,179,505
----------
Retail-Drug Store -- 1.4%
CVS Caremark Corp............................ 45,261 1,523,485
----------
Retail-Office Supplies -- 0.4%
Staples, Inc................................. 19,700 443,250
----------
Retail-Regional Department Stores -- 0.2%
Kohl's Corp.+................................ 4,200 193,536
----------
Telecom Equipment-Fiber Optics -- 0.3%
Corning, Inc................................. 21,400 334,696
----------
Telecommunication Equipment -- 0.5%
Harris Corp.................................. 11,300 522,060
----------
38
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Shares/ Market
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------------------
COMMON STOCK (continued)
Telephone-Integrated -- 1.8%
AT&T, Inc...................................... 42,135 $ 1,176,409
Verizon Communications, Inc.................... 26,100 837,549
-----------
2,013,958
-----------
Tobacco -- 0.4%
Philip Morris International, Inc............... 9,500 456,950
-----------
Web Portals/ISP -- 0.9%
Google, Inc., Class A+......................... 2,500 1,001,300
-----------
Wireless Equipment -- 0.8%
QUALCOMM, Inc.................................. 21,050 904,519
-----------
X-Ray Equipment -- 0.3%
Hologic, Inc.+................................. 19,100 369,203
-----------
Total Common Stock
(cost $70,957,386)............................ 67,164,135
-----------
PREFERRED STOCK -- 0.4%
Banks-Money Center -- 0.1%
Santander Finance Preferred SA 4.00%(1)........ 8,400 67,368
-----------
Banks-Super Regional -- 0.0%
Wachovia Capital Trust IX 6.38%................ 3,100 34,441
-----------
Diversified Financial Services -- 0.2%
General Electric Capital Corp. 8.00%(2)........ 14,000 266,700
-----------
Federal Home Loan Mtg. Corp. -- 0.0%
Federal Home Loan Mtg. Corp. 8.38%(1).......... 1,300 2,119
-----------
Special Purpose Entity -- 0.1%
Structured Repackaged Asset-Backed Trust
Securities 3.00%(1)........................... 9,200 126,868
-----------
Total Preferred Stock
(cost $874,066)............................... 497,496
-----------
ASSET BACKED SECURITIES -- 3.3%
Diversified Financial Services -- 3.3%
Banc of America Commercial Mtg., Inc.
Series 2006-6, Class AM
5.39% due 10/10/45(4)......................... $ 80,000 63,590
Banc of America Funding Corp.
Series 2007-C, Class 5A1
5.39% due 05/20/36(3)(5)...................... 318,146 254,015
Banc of America Funding Corp.
Series 2006-J, Class 2A1
5.89% due 01/20/47(3)(5)...................... 303,878 213,660
Bear Stearns Commercial Mtg. Securities, Inc.
Series 2007-PW15, Class A2
5.21% due 02/11/44(4)......................... 165,000 156,731
Chase Mtg. Finance Corp.
Series 2007-A2, Class 1A1
5.02% due 07/25/37(3)(5)...................... 228,503 208,397
Citigroup Commercial Mtg. Trust
Series 2008-C7, Class AM
6.10% due 12/01/49(3)(4)...................... 12,000 9,535
Commercial Mtg. Asset Trust
Series 1999-C1, Class D
7.35% due 01/17/32(3)(4)...................... 15,000 15,380
Commercial Mtg. Pass Through Certs.
Series 2004-LB2A, Class A3
4.22% due 03/10/39(4)......................... 674,000 652,145
Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------------
Diversified Financial Services (continued)
GE Capital Commercial Mtg. Corp.
Series 2004-C2, Class A4
4.89% due 03/10/40(4)............................ $ 55,000 $ 50,439
GMAC Commercial Mtg. Securities, Inc.
Series 2003-C2, Class A2
5.67% due 05/10/40(3)(4)......................... 3,000 2,859
JP Morgan Chase Commercial Mtg. Securities Corp.
Series 2006-LDP9, Class AM
5.37% due 05/15/47(4)............................ 334,000 263,718
JP Morgan Chase Commercial Mtg. Securities Corp.
Series 2008-C2, Class AM
6.80% due 02/12/51(3)(4)......................... 271,000 221,770
LB Commercial Conduit Mtg. Trust
Series 1998-C1, Class E
7.00% due 02/18/30(4)............................ 14,000 14,163
Ocwen Advance Receivables Backed Notes
Series 2006-1A
5.34% due 11/24/15*(11).......................... 350,000 280,000
Providian Master Note Trust
Series 2006-C1A, Class C1
3.04% due 03/16/15*(1)........................... 550,000 330,000
Swift Master Auto Receivables Trust
Series 2007-2, Class A
3.14% due 10/15/12(1)............................ 439,937 404,603
Wells Fargo Mtg. Backed Securities Trust
Series 2006-AR17, Class A2
5.83% due 10/25/36(1)(5)......................... 369,516 297,734
Wells Fargo Mtg. Backed Securities Trust
Series 2006-AR12, Class 2A1
6.10% due 09/25/36(3)(5)......................... 189,163 157,763
----------
Total Asset Backed Securities
(cost $4,344,112)................................ 3,596,502
----------
CORPORATE BONDS & NOTES -- 12.3%
Aerospace/Defense-Equipment -- 0.1%
United Technologies Corp.
Senior Notes
4.88% due 05/01/15............................... 82,000 80,762
United Technologies Corp.
Notes
6.13% due 07/15/38............................... 36,000 34,782
----------
115,544
----------
Agricultural Chemicals -- 0.1%
Monsanto Co.
Company Guar. Bonds
5.88% due 04/15/38............................... 40,000 36,250
Mosaic Global Holdings, Inc.
Debentures
7.38% due 08/01/18............................... 10,000 9,930
Terra Capital, Inc.
Company Guar. Notes
7.00% due 02/01/17............................... 25,000 23,750
The Mosaic Co.
Senior Notes
7.38% due 12/01/14*.............................. 45,000 46,587
----------
116,517
----------
39
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Airlines -- 0.1%
American Airlines, Inc.
Pass Through Certs.
Series 2001-1, Class A-2
6.82% due 05/23/11......................... $ 70,000 $ 54,600
Northwest Airlines, Inc.
Pass Through Certs.
Series 2002-1, Class G2
6.26% due 11/20/21......................... 41,330 36,474
--------
91,074
--------
Auto-Cars/Light Trucks -- 0.1%
Ford Motor Co.
Debentures
6.38% due 02/01/29......................... 60,000 22,200
General Motors Corp.
Debentures
7.13% due 07/15/13......................... 93,000 42,780
--------
64,980
--------
Auto/Truck Parts & Equipment-Original -- 0.1%
Johnson Controls, Inc.
Senior Notes
5.25% due 01/15/11......................... 52,000 52,598
--------
Banks-Commercial -- 0.5%
CoBank ACB
Senior Sub. Notes
7.88% due 04/16/18*........................ 16,000 15,408
Colonial Bank NA
Sub. Notes
6.38% due 12/01/15......................... 70,000 52,169
Credit Suisse New York
Senior Notes
5.00% due 05/15/13......................... 49,000 45,408
First Maryland Capital II
Company Guar. Notes
3.65% due 02/01/27(1)...................... 196,000 129,116
KeyBank NA
Sub. Notes
5.45% due 03/03/16......................... 54,000 31,332
KeyBank NA
Sub. Notes
7.41% due 10/15/27......................... 16,000 13,163
SouthTrust Bank
Sub. Notes
4.75% due 03/01/13......................... 99,000 73,882
SouthTrust Corp.
Sub. Notes
5.80% due 06/15/14......................... 55,000 33,749
Sovereign Bank
Sub. Notes
8.75% due 05/30/18......................... 52,000 35,544
Union Bank of California NA
Sub. Notes
5.95% due 05/11/16......................... 120,000 108,530
--------
538,301
--------
Banks-Fiduciary -- 0.1%
State Street Capital Trust IV
Company Guar. Notes
3.82% due 06/15/37(1)...................... 80,000 52,767
Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------
Banks-Fiduciary (continued)
The Bank of New York Mellon Corp.
Senior Notes
5.13% due 08/27/13..................... $48,000 $ 45,760
--------
98,527
--------
Banks-Super Regional -- 0.3%
Bank of America Corp.
Senior Notes
4.90% due 05/01/13..................... 54,000 48,851
Bank of America Corp.
Sub. Notes
7.25% due 10/15/25..................... 85,000 70,984
Capital One Financial Corp.
Sub. Notes
6.15% due 09/01/16..................... 65,000 48,781
Huntington Capital Trust I
Company Guar. Bonds
3.50% due 02/01/27(1).................. 60,000 23,667
PNC Preferred Funding Trust I
Senior Notes
6.11% due 03/15/12*(6)................. 45,000 30,973
Wells Fargo & Co.
Senior Notes
4.38% due 01/31/13..................... 26,000 23,900
Wells Fargo & Co.
Senior Notes
5.25% due 10/23/12..................... 89,000 85,427
--------
332,583
--------
Broadcast Services/Program -- 0.0%
Nexstar Broadcasting, Inc.
Senior Sub. Notes
7.00% due 01/15/14..................... 35,000 26,250
--------
Building-Residential/Commercial -- 0.0%
D.R. Horton, Inc.
Company Guar. Notes
5.00% due 01/15/09..................... 41,000 39,975
--------
Cable TV -- 0.2%
CCH I LLC/CCH I Holdings Capital Corp.
Company Guar. Notes
11.00% due 10/01/15.................... 28,000 18,200
CCH II LLC/CCH II Capital Corp.
Company Guar. Notes
10.25% due 09/15/10.................... 64,000 57,600
CCH II LLC/CCH II Capital Corp.
Company Guar. Notes, Series B
10.25% due 09/15/10.................... 11,000 9,845
Comcast Corp.
Company Guar. Notes
5.85% due 11/15/15..................... 87,000 80,153
Comcast Corp.
Notes
6.95% due 08/15/37..................... 34,000 29,001
COX Communications, Inc.
Senior Bonds
6.95% due 06/01/38*.................... 23,000 20,461
--------
215,260
--------
40
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Casino Hotels -- 0.1%
MGM Mirage, Inc.
Senior Notes
5.88% due 02/27/14..................... $ 95,000 $ 68,638
Turning Stone Resort Casino Enterprise
Senior Notes
9.13% due 09/15/14*.................... 45,000 40,950
--------
109,588
--------
Casino Services -- 0.0%
Indianapolis Downs LLC & Capital Corp.
Sec. Notes
11.00% due 11/01/12*................... 30,000 20,400
--------
Cellular Telecom -- 0.1%
Centennial Communications Corp.
Senior Notes
8.54% due 01/01/13(1).................. 50,000 45,500
Nextel Communications, Inc.
Company Guar. Notes
5.95% due 03/15/14..................... 50,000 33,500
--------
79,000
--------
Chemicals-Diversified -- 0.1%
E.I. Du Pont de Nemours & Co.
Senior Notes
4.88% due 04/30/14..................... 38,000 36,721
E.I. Du Pont de Nemours & Co.
Senior Notes
6.00% due 07/15/18..................... 40,000 39,045
ICI Wilmington, Inc.
Company Guar. Notes
5.63% due 12/01/13..................... 69,000 70,276
--------
146,042
--------
Chemicals-Specialty -- 0.1%
Huntsman International LLC
Company Guar. Notes
7.88% due 11/15/14..................... 60,000 51,600
Momentive Performance Materials, Inc.
Senior Sub. Notes
11.50% due 12/01/16.................... 85,000 57,800
--------
109,400
--------
Commercial Services-Finance -- 0.2%
The Western Union Co.
Senior Notes
5.40% due 11/17/11..................... 161,000 162,425
--------
Computer Services -- 0.1%
Compucom Systems, Inc.
Senior Sub. Notes
12.50% due 10/01/15*................... 30,000 27,600
Electronic Data Systems Corp.
Senior Notes
6.00% due 08/01/13..................... 80,000 81,567
--------
109,167
--------
Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------------
Computers -- 0.1%
International Business Machines Corp.
Senior Notes
5.70% due 09/14/17................................. $ 57,000 $ 55,215
--------
Containers-Paper/Plastic -- 0.1%
Jefferson Smurfit Corp.
Company Guar. Notes
8.25% due 10/01/12................................. 30,000 25,050
Smurfit-Stone Container Enterprises, Inc.
Senior Notes
8.00% due 03/15/17................................. 125,000 97,500
--------
122,550
--------
Cosmetics & Toiletries -- 0.0%
Avon Products, Inc.
Senior Notes
5.75% due 03/01/18................................. 19,000 18,097
--------
Direct Marketing -- 0.0%
Affinity Group, Inc.
Senior Sub. Notes
9.00% due 02/15/12................................. 45,000 33,300
--------
Diversified Financial Services -- 0.2%
American Express Travel Related Services Co., Inc.
Senior Notes
5.25% due 11/21/11*................................ 50,000 47,722
General Electric Capital Corp.
Senior Notes
5.65% due 06/09/14................................. 80,000 75,560
General Electric Capital Corp.
Senior Notes
5.88% due 01/14/38................................. 124,000 91,419
--------
214,701
--------
Diversified Manufacturing Operations -- 0.1%
Cooper U.S., Inc.
Senior Notes
5.45% due 04/01/15................................. 41,000 41,435
General Electric Co.
Senior Notes
5.25% due 12/06/17................................. 77,000 67,378
--------
108,813
--------
Diversified Operations -- 0.0%
Capmark Financial Group, Inc.
Company Guar. Notes
5.88% due 05/10/12................................. 31,000 15,453
--------
Electric-Generation -- 0.2%
Bruce Mansfield Unit 1
Pass Through Certs.
6.85% due 06/01/34................................. 110,000 114,417
The AES Corp.
Senior Notes
8.00% due 10/15/17................................. 60,000 54,150
The AES Corp.
Senior Notes
8.88% due 02/15/11................................. 85,000 83,725
--------
252,292
--------
41
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Electric-Integrated -- 1.7%
Baltimore Gas & Electric Co.
Senior Notes
6.13% due 07/01/13................ $ 58,000 $ 57,289
Centerpoint Energy, Inc.
Senior Notes
6.50% due 05/01/18................ 21,000 17,885
Consumers Energy Co.
1st Mtg. Bonds
6.13% due 03/15/19................ 73,000 68,704
Dominion Resources, Inc.
Jr. Sub Notes
6.30% due 09/30/11(6)............. 109,000 95,942
DTE Energy Co.
Senior Notes
6.38% due 04/15/33................ 53,000 44,306
DTE Energy Co.
Senior Notes
7.05% due 06/01/11................ 24,000 24,428
Duke Energy Indiana, Inc.
1st Mtg. Bonds
6.35% due 08/15/38................ 70,000 65,834
Entergy Arkansas Inc
1st Mtg. Bonds
5.40% due 08/01/13................ 51,000 50,093
Entergy Gulf States Louisiana LLC
1st Mtg. Bonds
6.00% due 05/01/18*............... 70,000 64,315
Entergy Louisiana LLC
1st Mtg. Bonds
5.83% due 11/01/10................ 195,000 195,038
Exelon Corp.
Senior Notes
6.75% due 05/01/11................ 52,000 52,391
Florida Power Corp.
1st. Mtg. Bonds
6.40% due 06/15/38................ 31,000 29,355
Mackinaw Power LLC
Sec. Notes
6.30% due 10/31/23*............... 103,873 99,730
Mirant Americas Generation LLC
Senior Notes
8.30% due 05/01/11................ 30,000 28,875
Mirant Mid-Atlantic LLC
Pass Through Certs.
Series B
9.13% due 06/30/17................ 40,254 41,461
Nisource Finance Corp.
Company Guar. Notes
5.25% due 09/15/17................ 43,000 35,594
Oncor Electric Delivery Co.
1st Mtg. Bonds
7.50% due 09/01/38*............... 30,000 30,004
PacifiCorp
1st. Mortgage Bonds
6.35% due 07/15/38................ 74,000 67,592
Pepco Holdings, Inc.
Senior Notes
6.13% due 06/01/17................ 82,000 76,257
Market
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------
Electric-Integrated (continued)
Pepco Holdings, Inc.
Senior Notes
6.45% due 08/15/12.......................... $ 55,000 $ 54,761
PSEG Power LLC
Company Guar. Notes
5.00% due 04/01/14.......................... 67,000 60,760
PSEG Power LLC
Company Guar. Notes
7.75% due 04/15/11.......................... 65,000 67,440
Public Service Co. of Colorado
1st Mtg. Bonds
5.80% due 08/01/18.......................... 30,000 28,964
Puget Sound Energy, Inc.
Senior Notes
5.20% due 10/01/15.......................... 212,000 186,588
Sierra Pacific Power Co.
1st Mtg. Bonds
5.45% due 09/01/13.......................... 60,000 58,175
Sierra Pacific Power Co.
Senior Notes
6.75% due 07/01/37.......................... 90,000 80,640
Southern Energy, Inc.
Notes
7.90% due 07/15/09+(10)(11)(14)............. 150,000 0
Southern Power Co.
Senior Notes
4.88% due 07/15/15.......................... 47,000 42,679
Texas Competitive Electric Holdings Co. LLC
Series A
Senior Notes
10.25% due 11/01/15*........................ 35,000 31,587
Texas Competitive Electric Holdings Co. LLC
Series B
Senior Notes
10.25% due 11/01/15*........................ 25,000 22,563
Union Electric Co.
1st. Mtg. Bonds
6.70% due 02/01/19.......................... 60,000 57,938
----------
1,837,188
----------
Electronic Components-Semiconductors -- 0.1%
National Semiconductor Corp.
Senior Notes
6.60% due 06/15/17.......................... 100,000 93,824
Spansion LLC
Senior Sec. Notes
5.94% due 06/01/13*(1)...................... 60,000 36,000
----------
129,824
----------
Electronic Measurement Instruments -- 0.1%
Agilent Technologies, Inc.
Senior Notes
6.50% due 11/01/17.......................... 77,000 70,195
----------
Electronics-Military -- 0.0%
L-3 Communications Corp.
Company Guar. Notes
6.38% due 10/15/15.......................... 20,000 18,400
----------
42
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Finance-Auto Loans -- 0.1%
GMAC LLC
Senior Notes
6.88% due 09/15/11......................... $120,000 $ 53,543
GMAC LLC
Senior Notes
6.88% due 08/28/12......................... 88,000 34,978
--------
88,521
--------
Finance-Commercial -- 0.1%
Caterpillar Financial Services Corp.
Senior Notes
4.90% due 08/15/13......................... 70,000 66,281
Textron Financial Corp.
Senior Notes
5.40% due 04/28/13......................... 80,000 80,556
--------
146,837
--------
Finance-Credit Card -- 0.0%
MBNA America Bank NA
Senior Notes
7.13% due 11/15/12*........................ 41,000 40,210
--------
Finance-Investment Banker/Broker -- 0.6%
Citigroup, Inc.
Senior Notes
5.00% due 09/15/14......................... 84,000 64,404
Citigroup, Inc.
Senior Notes
5.30% due 10/17/12......................... 42,000 37,389
Citigroup, Inc.
Senior Notes
5.85% due 07/02/13......................... 52,000 45,614
Citigroup, Inc.
Senior Sub. Notes
5.88% due 02/22/33......................... 43,000 28,178
Citigroup, Inc.
Junior Sub. Notes
8.40% due 04/30/18(6)...................... 40,000 27,226
JP Morgan Chase & Co.
Sub. Notes
4.89% due 09/01/10(6)...................... 56,000 55,272
JP Morgan Chase & Co.
Senior Notes
5.38% due 01/15/14......................... 120,000 117,065
JP Morgan Chase & Co.
Senior Notes
6.00% due 01/15/18......................... 50,000 45,594
Lehman Brothers Holdings Capital Trust VII
Company Guar. Notes
5.86% due 05/31/12+(7)(9).................. 27,000 3
Lehman Brothers Holdings, Inc.
Senior Notes
5.50% due 04/04/16+(7)(9).................. 26,000 3,250
Lehman Brothers Holdings, Inc.
Sub. Notes
6.75% due 12/28/17+(7)(9).................. 30,000 37
Lehman Brothers Holdings, Inc.
Sub. Notes
7.50% due 05/11/38+(7)(9).................. 38,000 47
Market
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------------
Finance-Investment Banker/Broker (continued)
Lehman Brothers Holdings, Inc.
Senior Notes
8.80% due 03/01/15+(7)(9)................. $31,000 $ 3,875
Merrill Lynch & Co., Inc.
Sub. Notes
6.22% due 09/15/26........................ 40,000 29,986
Morgan Stanley
Senior Notes
5.45% due 01/09/17........................ 42,000 26,053
Morgan Stanley
Senior Notes
6.00% due 04/28/15........................ 40,000 27,209
Schwab Capital Trust I
Company Guar. Bonds
7.50% due 11/15/17(6)..................... 19,000 15,684
The Bear Stearns Cos., Inc.
Senior Notes
4.50% due 10/28/10........................ 47,000 45,644
The Bear Stearns Cos., Inc.
Senior Notes
5.70% due 11/15/14........................ 55,000 51,419
The Goldman Sachs Group, Inc.
Senior Notes
6.75% due 10/01/37........................ 51,000 34,047
--------
657,996
--------
Finance-Mortgage Loan/Banker -- 0.1%
Countrywide Financial Corp.
Sub. Notes
6.25% due 05/15/16........................ 88,000 62,649
--------
Finance-Other Services -- 0.0%
TIAA Global Markets, Inc.
Notes
5.13% due 10/10/12*....................... 45,000 45,824
--------
Food-Misc. -- 0.2%
Kraft Foods, Inc.
Senior Bonds
5.63% due 11/01/11........................ 40,000 40,149
Kraft Foods, Inc.
Senior Notes
6.50% due 08/11/17........................ 38,000 36,564
Kraft Foods, Inc.
Sub. Notes
6.88% due 01/26/39........................ 68,000 61,937
McCormick & Co., Inc.
Notes
5.25% due 09/01/13........................ 80,000 80,092
--------
218,742
--------
Funeral Services & Related Items -- 0.0%
Service Corp. International
Senior Notes
6.75% due 04/01/16........................ 30,000 25,650
--------
Gambling (Non-Hotel) -- 0.0%
Downstream Development Authority
Senior Notes
12.00% due 10/15/15*...................... 25,000 18,125
--------
43
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Home Furnishings -- 0.0%
Simmons Co.
Company Guar. Notes
7.88% due 01/15/14........................ $ 25,000 $ 18,750
Simmons Co.
Senior Disc. Notes
10.00% due 12/15/14(2).................... 11,000 6,160
--------
24,910
--------
Hotel/Motels -- 0.0%
Starwood Hotels & Resorts Worldwide, Inc.
Senior Notes
6.75% due 05/15/18........................ 35,000 31,290
--------
Independent Power Producers -- 0.1%
NRG Energy, Inc.
Company Guar. Notes
7.38% due 02/01/16........................ 90,000 81,000
--------
Insurance Brokers -- 0.1%
Marsh & McLennan Cos., Inc.
Senior Notes
5.15% due 09/15/10........................ 60,000 58,509
Marsh & McLennan Cos., Inc.
Senior Notes
7.13% due 06/15/09........................ 40,000 40,151
USI Holdings Corp.
Senior Sub. Notes
9.75% due 05/15/15*....................... 25,000 19,000
--------
117,660
--------
Insurance-Life/Health -- 0.4%
Americo Life, Inc.
Notes
7.88% due 05/01/13*....................... 134,000 132,737
Lincoln National Corp.
Senior Notes
5.65% due 08/27/12........................ 58,000 57,021
Monumental Global Funding II
Notes
5.65% due 07/14/11*....................... 66,000 68,288
Pricoa Global Funding I
Notes
5.30% due 09/27/13*....................... 110,000 109,240
Prudential Financial, Inc.
Junior Sub. Bonds
8.88% due 06/15/18(6)..................... 30,000 28,236
--------
395,522
--------
Insurance-Multi-line -- 0.1%
MetLife, Inc.
Senior Notes
6.82% due 08/15/18........................ 61,000 57,718
--------
Insurance-Mutual -- 0.0%
Liberty Mutual Group, Inc.
Company Guar. Notes
10.75% due 06/15/38*(6)................... 45,000 32,400
--------
Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------
Insurance-Property/Casualty -- 0.1%
ACE INA Holdings, Inc.
Company Guar. Notes
5.60% due 05/15/15.......................... $ 64,000 $ 60,560
Chubb Corp.
Senior Notes
6.50% due 05/15/38.......................... 33,000 29,849
W.R. Berkley Corp.
Senior Sub. Notes
6.25% due 02/15/37.......................... 3,000 2,418
--------
92,827
--------
Insurance-Reinsurance -- 0.1%
Berkshire Hathaway Finance Corp.
Company Guar. Notes
5.00% due 08/15/13*......................... 74,000 73,805
PartnerRe Finance A LLC
Company Guar. Notes
6.88% due 06/01/18.......................... 80,000 77,527
--------
151,332
--------
Investment Management/Advisor Services -- 0.0%
Ameriprise Financial, Inc.
Senior Notes
5.35% due 11/15/10.......................... 51,000 50,104
--------
Medical Products -- 0.1%
Johnson & Johnson
Senior Notes
5.85% due 07/15/38.......................... 85,000 82,652
Johnson & Johnson
Notes
5.95% due 08/15/37.......................... 29,000 28,682
LVB Acquisition Holding LLC
Senior Notes
10.38% due 10/15/17......................... 40,000 39,600
--------
150,934
--------
Medical-Drugs -- 0.3%
American Home Products Corp.
Senior Notes
6.95% due 03/15/11.......................... 123,000 129,781
GlaxoSmithKline Capital, Inc.
Company Guar. Notes
6.38% due 05/15/38.......................... 41,000 38,490
Schering-Plough Corp.
Senior Notes
6.55% due 09/15/37.......................... 57,000 52,207
Wyeth
Bonds
5.50% due 02/01/14.......................... 126,000 124,900
--------
345,378
--------
Medical-HMO -- 0.2%
Aetna Inc.
Senior Notes.
6.75% due 12/15/37.......................... 26,000 23,738
Humana, Inc.
Senior Bonds
8.15% due 06/15/38.......................... 35,000 33,097
44
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Medical-HMO (continued)
UnitedHealth Group, Inc.
Senior Notes
5.25% due 03/15/11....................... $ 35,000 $ 34,797
UnitedHealth Group, Inc.
Senior Notes
6.88% due 02/15/38....................... 37,000 32,574
WellPoint, Inc.
Senior Notes
5.00% due 01/15/11....................... 21,000 20,878
WellPoint, Inc.
Senior Notes
5.95% due 12/15/34....................... 35,000 29,124
--------
174,208
--------
Medical-Hospitals -- 0.2%
Community Health Systems, Inc.
Company Guar. Notes
8.88% due 07/15/15....................... 55,000 52,250
HCA, Inc.
Senior Notes
6.25% due 02/15/13....................... 55,000 45,925
HCA, Inc.
Senior Notes
9.13% due 11/15/14....................... 25,000 24,313
HCA, Inc.
Senior Notes
9.25% due 11/15/16....................... 140,000 136,150
--------
258,638
--------
Medical-Wholesale Drug Distribution -- 0.1%
Cardinal Health, Inc.
Senior Notes
5.50% due 06/15/13....................... 56,000 53,581
--------
Metal Processors & Fabrication -- 0.1%
Timken Co.
Notes
5.75% due 02/15/10....................... 96,000 93,654
--------
Metal-Aluminum -- 0.1%
Alcoa, Inc.
Senior Notes
6.00% due 01/15/12....................... 41,000 41,197
Alcoa, Inc.
Senior Notes
6.50% due 06/15/18....................... 65,000 61,507
--------
102,704
--------
Mining -- 0.0%
Noranda Aluminum Acquisition Corp.
Company Guar. Notes
6.83% due 11/15/14(1).................... 25,000 19,000
--------
Multimedia -- 0.4%
COX Enterprises, Inc.
Notes
7.88% due 09/15/10*...................... 205,000 212,705
News America, Inc.
Company Guar. Bonds
7.30% due 04/30/28....................... 80,000 73,828
Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------
Multimedia (continued)
Time Warner Cos., Inc.
Company Guar. Notes
7.25% due 10/15/17.......................... $ 71,000 $ 65,164
Time Warner Entertainment Co. LP
Senior Notes
8.38% due 07/15/33.......................... 99,000 94,115
--------
445,812
--------
Non-Hazardous Waste Disposal -- 0.1%
Waste Management, Inc.
Company Guar. Notes
6.38% due 11/15/12.......................... 56,000 56,085
--------
Office Automation & Equipment -- 0.2%
IKON Office Solutions, Inc.
Senior Notes
7.75% due 09/15/15.......................... 30,000 31,350
Pitney Bowes, Inc.
Senior Notes
5.25% due 01/15/37.......................... 194,000 178,557
Xerox Corp.
Senior Notes
6.35% due 05/15/18.......................... 35,000 31,994
--------
241,901
--------
Oil Companies-Exploration & Production -- 0.3%
Chesapeake Energy Corp.
Company Guar. Notes
7.50% due 09/15/13.......................... 175,000 169,313
Hilcorp Energy I LP
Senior Notes
7.75% due 11/01/15*......................... 50,000 43,000
Sabine Pass LNG LP
Sec. Notes
7.50% due 11/30/16.......................... 75,000 58,500
XTO Energy, Inc.
Senior Notes
6.50% due 12/15/18.......................... 30,000 27,827
--------
298,640
--------
Oil Companies-Integrated -- 0.1%
Hess Corp.
Notes
7.13% due 03/15/33.......................... 35,000 30,721
Hess Corp.
Bonds
7.88% due 10/01/29.......................... 80,000 78,197
--------
108,918
--------
Oil Field Machinery & Equipment -- 0.0%
Cameron International Corp.
Senior Notes
7.00% due 07/15/38.......................... 36,000 30,170
--------
Oil Refining & Marketing -- 0.2%
The Premcor Refining Group, Inc.
Company Guar. Notes
6.75% due 05/01/14.......................... 180,000 182,233
Valero Energy Corp.
Senior Notes
6.63% due 06/15/37.......................... 24,000 20,710
--------
202,943
--------
45
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Oil-Field Services -- 0.1%
Allis-Chalmers Energy, Inc.
Company Guar. Notes
9.00% due 01/15/14....................... $ 15,000 $ 13,500
Halliburton Co.
Senior Notes
6.70% due 09/15/38....................... 70,000 67,377
--------
80,877
--------
Paper & Related Products -- 0.1%
Bowater, Inc.
Senior Notes
6.50% due 06/15/13....................... 75,000 28,875
Georgia-Pacific LLC
Company Guar. Notes
7.00% due 01/15/15*...................... 30,000 27,300
Georgia-Pacific LLC
Company Guar. Notes
7.13% due 01/15/17*...................... 10,000 8,925
--------
65,100
--------
Physicians Practice Management -- 0.1%
US Oncology, Inc.
Senior Sub. Notes
10.75% due 08/15/14...................... 55,000 55,275
--------
Pipelines -- 0.4%
CenterPoint Energy Resources Corp.
Senior Notes
7.75% due 02/15/11....................... 130,000 133,565
Copano Energy LLC
Company Guar. Notes
8.13% due 03/01/16....................... 95,000 86,925
Duke Energy Field Services LLC
Senior Notes
6.88% due 02/01/11....................... 60,000 60,310
Dynegy-Roseton Danskammer
Pass Through Certs.
Series B
7.67% due 11/08/16....................... 45,000 40,837
Panhandle Eastern Pipeline Co.
Senior Notes
6.20% due 11/01/17....................... 56,000 50,496
Williams Cos., Inc.
Senior Notes
7.88% due 09/01/21....................... 90,000 90,000
--------
462,133
--------
Publishing-Periodicals -- 0.0%
Dex Media West LLC/Dex Media Finance Co.
Senior Notes
8.50% due 08/15/10....................... 2,000 1,765
R.H. Donnelley, Inc.
Company Guar. Bonds
11.75% due 05/15/15*..................... 1,000 610
The Reader's Digest Association, Inc.
Company Guar. Notes
9.00% due 02/15/17....................... 25,000 14,313
--------
16,688
--------
Market
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------
Real Estate Investment Trusts -- 0.1%
Health Care Property Investors, Inc.
Senior Notes
5.65% due 12/15/13........................ $100,000 $ 88,049
PPF Funding, Inc.
Bonds
5.35% due 04/15/12*....................... 60,000 59,149
--------
147,198
--------
Recycling -- 0.0%
Aleris International, Inc.
Company Guar. Notes
9.00% due 12/15/14........................ 45,000 27,450
--------
Rental Auto/Equipment -- 0.0%
ERAC USA Finance Co.
Company Guar. Notes
7.00% due 10/15/37*....................... 26,000 18,312
United Rentals North America, Inc.
Senior Sub. Notes
7.75% due 11/15/13........................ 40,000 30,500
--------
48,812
--------
Research & Development -- 0.0%
Alion Science and Technology Corp.
Company Guar. Notes
10.25% due 02/01/15....................... 55,000 34,650
--------
Retail-Discount -- 0.0%
Wal-Mart Stores, Inc.
Senior Notes
6.20% due 04/15/38........................ 41,000 37,400
--------
Retail-Drug Store -- 0.1%
CVS Caremark Corp.
Senior Notes
6.13% due 08/15/16........................ 54,000 52,169
--------
Retail-Restaurants -- 0.0%
NPC International, Inc.
Company Guar. Notes
9.50% due 05/01/14........................ 45,000 36,900
--------
Savings & Loans/Thrifts -- 0.3%
Independence Community Bank Corp.
Sub. Notes
5.26% due 06/20/13(6)..................... 64,000 46,362
Sovereign Bancorp, Inc.
Senior Notes
4.80% due 09/01/10........................ 206,000 162,627
Western Financial Bank
Senior Debentures
9.63% due 05/15/12........................ 150,000 139,851
--------
348,840
--------
Special Purpose Entities -- 0.4%
BAE Systems Holdings, Inc.
Company Guar. Notes
5.20% due 08/15/15*....................... 93,000 86,793
Chukchansi Economic Development Authority
Senior Notes
8.00% due 11/15/13*....................... 45,000 36,000
46
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------------
CORPORATE BONDS & NOTES (continued)
Special Purpose Entities (continued)
Goldman Sachs Capital III
Company Guar. Notes
3.58% due 09/01/12(1)(8)....................... $121,000 $ 42,758
Hawker Beechcraft Acquisition Co. LLC / Hawker
Beechcraft Notes Co.
Company Guar. Notes
8.88% due 04/01/15............................. 5,000 4,525
Hawker Beechcraft Acquisition Co. LLC / Hawker
Beechcraft Notes Co.
Company Guar. Notes
9.75% due 04/01/17............................. 21,000 18,795
Hexion US Finance Corp.
Company Guar. Notes
9.75% due 11/15/14............................. 20,000 15,800
KAR Holdings, Inc.
Company Guar. Notes
6.80% due 05/01/14(1).......................... 25,000 19,625
Norbord Delaware GP I
Company Guar. Notes
6.45% due 02/15/17*............................ 49,000 35,525
Principal Life Global Funding I
Sec. Notes
5.25% due 01/15/13*............................ 100,000 98,031
Snoqualmie Entertainment Authority
Senior Sec. Notes
9.13% due 02/01/15*............................ 45,000 32,513
--------
390,365
--------
Steel-Producers -- 0.2%
International Steel Group, Inc.
Senior Notes
6.50% due 04/15/14............................. 130,000 132,028
Reliance Steel & Aluminum Co.
Company Guar. Notes
6.85% due 11/15/36............................. 60,000 57,199
Ryerson, Inc.
Senior Sec. Notes
10.18% due 11/01/14*(1)........................ 50,000 40,750
United States Steel Corp.
Senior Notes
7.00% due 02/01/18............................. 45,000 40,624
--------
270,601
--------
Telecom Services -- 0.2%
Bellsouth Telecommunications, Inc.
Debentures
7.00% due 12/01/95............................. 174,000 142,483
Fairpoint Communications, Inc.
Senior Notes
13.13% due 04/01/18*........................... 13,000 11,830
Qwest Corp.
Senior Notes
7.50% due 10/01/14............................. 65,000 56,225
--------
210,538
--------
Telephone-Integrated -- 0.4%
AT&T Corp.
Senior Notes
7.30% due 11/15/11............................. 63,000 65,425
Market
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------
Telephone-Integrated (continued)
BellSouth Corp.
Senior Notes
6.00% due 10/15/11................... $200,000 $ 200,400
Cincinnati Bell, Inc.
Company Guar. Notes
7.00% due 02/15/15................... 14,000 11,760
Pacific Bell Telephone Co.
Company Guar. Notes
7.13% due 03/15/26................... 80,000 74,549
Verizon New York, Inc.
Debentures
6.88% due 04/01/12................... 102,000 101,996
-----------
454,130
-----------
Television -- 0.1%
Belo Corp.
Senior Notes
6.75% due 05/30/13................... 60,000 52,709
Paxson Communications Corp.
Senior Sec. Notes
9.04% due 01/15/13*(8)............... 56,385 30,448
Young Broadcasting, Inc.
Company Guar. Notes
10.00% due 03/01/11.................. 25,000 3,625
-----------
86,782
-----------
Transport-Air Freight -- 0.3%
Atlas Air, Inc.
Pass Through Certs.
Series 1991-1, Class B
7.63% due 01/02/15................... 366,911 359,573
-----------
Transport-Rail -- 0.1%
CSX Corp.
Senior Notes
6.25% due 04/01/15................... 40,000 38,106
CSX Corp.
Senior Notes
6.25% due 03/15/18................... 59,000 53,400
-----------
91,506
-----------
Transport-Services -- 0.1%
PHI, Inc.
Company Guar. Notes
7.13% due 04/15/13................... 75,000 66,375
-----------
Travel Services -- 0.0%
Travelport LLC
Company Guar. Notes
7.44% due 09/01/14(1)................ 21,000 16,170
-----------
Total Corporate Bonds & Notes
(cost $15,125,652)................... 13,585,074
-----------
FOREIGN CORPORATE BONDS & NOTES -- 3.2%
Banks-Commercial -- 0.2%
Banco Continental de Panama SA
Notes
6.63% due 12/01/10*.................. 35,000 35,000
Barclays Bank PLC
Sub. Notes
5.93% due 12/15/16*(6)............... 80,000 55,633
47
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (continued)
Banks-Commercial (continued)
Caisse Nationale des Caisses d'Epargne et de
Prevoyance
Notes
4.15% due 12/30/09(1)(8)..................... $109,000 $ 66,490
Credit Agricole SA
Jr. Sub. Notes
6.64% due 05/31/17*(6)....................... 71,000 47,874
HBOS PLC
Sub. Notes
5.92% due 10/01/15*(6)....................... 40,000 23,591
NIB Capital Bank
Bonds
5.82% due 12/11/13*(6)....................... 71,000 37,381
--------
265,969
--------
Banks-Money Center -- 0.1%
Mizuho Financial Group Cayman, Ltd.
Bank Guar. Bonds
8.38% due 04/27/09(8)........................ 145,000 124,448
--------
Beverages-Wine/Spirits -- 0.1%
Diageo Finance BV
Company Guar. Notes
3.88% due 04/01/11........................... 125,000 123,727
--------
Brewery -- 0.1%
FBG Finance, Ltd.
Senior Notes
5.13% due 06/15/15*.......................... 31,000 29,071
SABMiller PLC
Senior Notes
6.50% due 07/15/18*.......................... 41,000 38,839
--------
67,910
--------
Broadcast Services/Program -- 0.1%
Grupo Televisa SA
Senior Notes
6.00% due 05/15/18........................... 27,000 25,482
Grupo Televisa SA
Senior Notes
6.63% due 03/18/25........................... 139,000 122,040
--------
147,522
--------
Cellular Telecom -- 0.1%
America Movil SAB de CV
Company Guar. Bonds
5.63% due 11/15/17........................... 70,000 65,579
Vodafone Airtouch PLC
Senior Notes
7.75% due 02/15/10........................... 35,000 36,074
--------
101,653
--------
Containers-Metal/Glass -- 0.1%
Rexam PLC
Bonds
6.75% due 06/01/13*.......................... 51,000 50,949
--------
Market
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------------
Cruise Lines -- 0.1%
Royal Caribbean Cruises, Ltd.
Senior Notes
7.00% due 06/15/13........................ $ 70,000 $ 60,200
--------
Diversified Manufacturing Operations -- 0.1%
Bombardier, Inc.
Senior Notes
8.00% due 11/15/14*....................... 25,000 24,750
Tyco International Group SA
Company Guar. Notes
6.00% due 11/15/13........................ 120,000 117,587
--------
142,337
--------
Diversified Operations -- 0.1%
Hutchison Whampoa Finance, Ltd.
Company Guar. Notes
7.50% due 08/01/27*....................... 140,000 131,190
--------
Electric-Generation -- 0.0%
Abu Dhabi National Energy Co.
Senior Notes
7.25% due 08/01/18*....................... 11,000 10,710
--------
Electric-Integrated -- 0.1%
Empresa Nacional de Electricidad SA
Bonds
7.33% due 02/01/37........................ 84,000 83,264
TransAlta Corp.
Senior Notes
6.65% due 05/15/18........................ 29,000 27,377
--------
110,641
--------
Electronic Components-Misc. -- 0.0%
NXP BV/NXP Funding LLC
Company Guar. Notes
9.50% due 10/15/15........................ 9,000 4,635
--------
Food-Retail -- 0.1%
Delhaize Group SA
Senior Notes
6.50% due 06/15/17........................ 90,000 85,244
--------
Insurance-Multi-line -- 0.1%
Aegon NV
Sub. Bonds
4.63% due 07/15/14(1)(8).................. 156,000 59,280
XL Capital (Europe) PLC
Company Guar. Notes
6.50% due 01/15/12........................ 32,000 30,729
XL Capital, Ltd.
Senior Notes
5.25% due 09/15/14........................ 56,000 48,438
--------
138,447
--------
Investment Companies -- 0.0%
Xstrata Finance Canada, Ltd.
Company Guar. Notes
6.90% due 11/15/37*....................... 40,000 34,002
--------
48
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (continued)
Medical-Drugs -- 0.1%
Angiotech Pharmaceuticals, Inc.
Company Guar. Notes
6.56% due 12/01/13(1)....................... $ 15,000 $ 10,800
Angiotech Pharmaceuticals, Inc.
Company Guar. Notes
7.75% due 04/01/14.......................... 55,000 32,175
Elan Finance PLC
Company Guar. Bonds
7.75% due 11/15/11.......................... 40,000 36,200
--------
79,175
--------
Multimedia -- 0.0%
Thomson Reuters Corp.
Company Guar. Notes
5.95% due 07/15/13.......................... 40,000 39,953
--------
Oil Companies-Exploration & Production -- 0.0%
OPTI Canada, Inc.
Senior Sec. Notes
7.88% due 12/15/14.......................... 50,000 44,250
--------
Paper & Related Products -- 0.0%
Abitibi-Consolidated, Inc.
Notes
8.55% due 08/01/10.......................... 41,000 15,580
--------
Pipelines -- 0.0%
Enbridge, Inc.
Senior Notes
5.80% due 06/15/14.......................... 40,000 38,049
--------
Printing-Commercial -- 0.0%
Quebecor World Capital Corp.
Senior Notes
8.75% due 03/15/16*+(7)(15)................. 30,000 12,000
--------
Property Trust -- 0.1%
Westfield Capital Corp., Ltd./ WT
Finance Austrailia Property, Ltd.
Company Guar. Notes
4.38% due 11/15/10*......................... 50,000 48,680
--------
Real Estate Operations & Development -- 0.2%
Brascan Corp.
Notes
8.13% due 12/15/08.......................... 157,000 157,724
--------
Satellite Telecom -- 0.1%
Intelsat Subsidiary Holding Co., Ltd.
Senior Notes
8.50% due 01/15/13*......................... 60,000 55,500
--------
Special Purpose Entities -- 0.6%
Aries Vermoegensverwaltungs GmbH
Bonds
9.60% due 10/25/14.......................... 250,000 311,250
Hybrid Capital Funding I LP
Sub. Notes
8.00% due 06/30/11(8)....................... 286,000 171,600
SMFG Preferred Capital, Ltd.
Sub. Bonds
6.08% due 01/25/17*(6)...................... 121,000 86,400
Market
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------
Special Purpose Entities (continued)
SovRisc BV
Notes
4.63% due 10/31/08*................ $133,000 $ 133,326
----------
702,576
----------
Telecom Services -- 0.2%
TELUS Corp.
Notes
8.00% due 06/01/11................. 238,000 252,059
----------
Telecommunication Equipment -- 0.0%
Nortel Networks, Ltd.
Company Guar. Notes
10.75% due 07/15/16*............... 50,000 30,625
----------
Telephone-Integrated -- 0.2%
Telecom Italia Capital SA
Company Guar. Notes
4.95% due 09/30/14................. 60,000 50,596
Telecom Italia Capital SA
Company Guar. Bonds
6.20% due 07/18/11................. 115,000 115,033
----------
165,629
----------
Transport-Marine -- 0.1%
DP World, Ltd.
Bonds
6.85% due 07/02/37*................ 121,000 89,583
----------
Transport-Rail -- 0.1%
Canadian National Railway Co.
Notes
6.38% due 10/15/11................. 130,000 134,394
----------
Water -- 0.1%
Veolia Environnement
Notes
6.75% due 06/01/38................. 60,000 57,407
----------
Total Foreign Corporate Bonds & Notes
(cost $4,125,055).................. 3,522,768
----------
FOREIGN GOVERNMENT AGENCIES -- 0.6%
Sovereign -- 0.6%
Federal Republic of Brazil
Bonds
10.50% due 07/14/14................ 205,000 258,300
Republic of Argentina
Bonds
3.13% due 08/03/12(1).............. 230,000 83,145
Republic of Argentina
Bonds
8.28% due 12/31/33................. 36,346 20,763
Republic of Turkey
Senior Bonds
11.88% due 01/15/30................ 180,000 258,534
Republic of Venezuela
Notes
8.50% due 10/08/14................. 100,000 78,750
----------
Total Foreign Government Agencies
(cost $749,118).................... 699,492
----------
49
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
-----------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 12.3%
Federal Home Loan Mtg. Corp. -- 7.5%
5.00% due 05/01/34................ $748,872 $ 731,115
5.00% due 06/01/34................ 723,003 705,860
5.00% due 07/01/35................ 97,285 94,917
5.00% due 10/01/35................ 498,396 486,266
5.00% due 11/01/35................ 336,211 328,029
5.00% due 11/01/36................ 31,521 30,734
5.50% due 07/01/34................ 465,232 463,712
5.50% due 09/01/37................ 225,000 223,984
5.50% due 01/01/38................ 547,106 544,720
5.50% due October TBA............. 515,000 512,264
5.78% due 10/01/36(1)............. 507,400 518,277
5.78% due 01/01/37(1)............. 212,128 216,280
5.81% due 01/01/37(1)............. 381,793 386,108
6.00% due 12/01/33................ 81,559 82,996
6.00% due 10/01/37................ 331,600 335,994
6.50% due 03/01/36................ 235,393 241,669
6.50% due 05/01/36................ 7,455 7,654
6.50% due 11/01/37................ 134,865 138,440
7.00% due 04/01/32................ 119,632 125,743
REMIC
Series 3026, Class PC
4.50% due 01/15/34................ 620,000 575,296
Series 3102, Class PG
5.00% due 11/15/28................ 304,000 305,789
Series 3317, Class PD
5.00% due 09/15/31................ 390,000 388,007
Series 3116, Class PD
5.00% due 10/15/34................ 615,000 593,430
Series 3349, Class HB
5.50% due 06/15/31................ 232,000 233,952
-----------
8,271,236
-----------
Federal National Mtg. Assoc. -- 4.1%
5.00% due 08/01/18................ 145,254 145,732
5.00% due 07/01/37................ 122,828 119,774
5.50% due 11/01/22................ 254,987 257,286
5.50% due 12/01/33................ 831,896 832,038
5.50% due 02/01/36(1)............. 258,490 262,580
5.50% due 11/01/36................ 253,829 253,357
5.50% due 08/01/38................ 8,668 8,650
6.00% due 12/01/33................ 75,241 76,567
6.00% due 11/01/36................ 541,686 544,054
6.00% due 03/01/38................ 486,684 493,512
6.00% due 07/01/38................ 698,660 708,352
6.50% due 09/01/32................ 233,801 241,575
6.50% due 07/01/36................ 99,683 102,328
6.50% due 10/01/37................ 99,415 102,047
REMIC
Series 2005-12, Class BE
5.00% due 11/25/30................ 385,000 383,328
-----------
4,531,180
-----------
Government National Mtg. Assoc. -- 0.7%
5.50% due 05/15/33................ 428,610 430,235
5.50% due 12/15/33................ 294,753 295,871
7.50% due 01/15/32................ 107,593 115,944
-----------
842,050
-----------
Total U.S. Government Agencies
(cost $13,680,081)................ 13,644,466
-----------
Market
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------------
U.S. GOVERNMENT TREASURIES -- 2.9%
United States Treasury Bonds -- 0.4%
4.38% due 02/15/38........................... $ 94,000 $ 95,197
4.50% due 05/15/38........................... 31,000 32,002
4.75% due 02/15/37........................... 110,000 117,666
5.00% due 05/15/37........................... 132,000 146,840
------------
391,705
------------
United States Treasury Notes -- 2.5%
2.75% due 02/28/13........................... 45,000 44,768
2.88% due 01/31/13........................... 496,000 497,279
3.38% due 07/31/13........................... 102,000 103,857
3.50% due 02/15/18........................... 97,000 95,121
3.63% due 06/15/10........................... 400,000 412,281
3.88% due 05/15/18........................... 31,000 31,203
4.00% due 08/15/18........................... 106,000 107,507
4.25% due 08/15/15........................... 24,000 25,371
4.25% due 11/15/17........................... 450,000 466,383
4.50% due 11/15/15........................... 200,000 213,812
4.50% due 02/15/16........................... 101,000 107,660
4.88% due 06/30/09........................... 700,000 715,804
------------
2,821,046
------------
Total U.S. Government Treasuries
(cost $3,231,442)............................ 3,212,751
------------
Total Long-Term Investment Securities
(cost $113,086,912).......................... 105,922,684
------------
REPURCHASE AGREEMENTS -- 3.7%
Agreement with State Street Bank & Trust
Co., bearing interest at 0.35%, dated
09/30/08, to be repurchased 10/01/08 in
the amount of $369,004 and collateralized
by $380,000 of Federal Home Loan Mtg.
Corp. Notes, bearing interest at 2.98%
due 01/19/10 and having an approximate
value of $379,605........................... 369,000 369,000
State Street Bank & Trust Co.
Joint Repurchase Agreement(12).............. 3,730,000 3,730,000
------------
Total Repurchase Agreements
(cost $4,099,000)............................ 4,099,000
------------
TOTAL INVESTMENTS --
(cost $117,185,912)(13)...................... 99.4% 110,021,684
Other assets less liabilities................... 0.6 645,121
---------- ------------
NET ASSETS -- 100.0% $ 110,666,805
========== ============
- --------
+ Non-income producing security
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At September 30, 2008,
the aggregate value of these securities was $3,400,924 representing 3.1%
of net assets. Unless otherwise indicated these securities are not
considered to be illiquid.
(1) Floating rate security where the rate fluctuates. The rate moves up or
down at each reset date. The rate reflected is as of September 30, 2008.
50
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
(2) "Step-up" security where the rate increases ("steps-up") at a
predetermined rate. Rate shown reflects the increased rate.
(3) Variable Rate Security -- the rate reflected is as of September 30, 2008,
maturity date reflects the stated maturity date.
(4) Commercial Mortgage Backed Security
(5) Collateralized Mortgage Obligation
(6) Variable Rate Security -- the rate reflected is as of September 30, 2008,
maturity date reflects next reset date.
(7) Bond in default
(8) Perpetual maturity -- maturity date reflects the next call date.
(9) Company has filed Chapter 11 bankruptcy protection.
(10) Illiquid security. At September 30, 2008, the aggregate value of these
securities was $0 representing 0.0% of net assets.
(11) Fair valued security; see Note 3
(12) See Note 3 for details on Joint Repurchase Agreement.
(13) See Note 7 for cost of investments on a tax basis.
(14) To the extent permitted by the Statement of Additional information, the
Balanced Assets Fund may invest in restricted securities. The Fund has no
right to demand registration of these securities. The securities are
valued pursuant to Note 3. Restricted securities held by a fund may not be
sold except in exempt transactions or in a public offering registered
under the securities Act of 1933. The risk of investing in such securities
is generally greater than the risk of investing in the securities of
widely held, publicly traded companies. Lack of a secondary market and
resale restrictions may result in the inability of a Fund to sell a
security at a fair price and may substantially delay the sale of the
security. In addition, these securities may exhibit greater price
volatility than securities for which secondary markets exist. As of
September 30, 2008, the Balanced Assets Fund held the following restricted
securities:
Market
Value % of
Acquisition Principal Acquisition Market Per Par Net
Name Date Amount Cost Value Amount Assets
---- ----------- --------- ----------- ------ ------- ------
Southern Energy
7.90% due
7/15/2009...... 01/10/2006 $150,000 $0 $0 $0 0.00%
(15) Company has filed bankruptcy in country of issuance.
ADR --American Depository Receipt
REMIC --Real Estate Mortgage Investment Conduit
TBA --Securities purchased on a forward commitment basis with an approximate
principal amount and no definitive maturity date. The actual principal
and maturity date will be determined upon settlement date.
See Notes to Financial Statements
51
SunAmerica International Equity Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Banks-Commercial..................... 12.6%
Oil Companies-Integrated............. 7.3
Insurance-Multi-line................. 5.0
Food-Misc............................ 4.9
Rubber-Tires......................... 4.2
Cellular Telecom..................... 3.9
Repurchase Agreement................. 3.8
Medical Products..................... 3.5
Chemicals-Diversified................ 3.2
Gas-Distribution..................... 3.0
Index Fund........................... 2.6
Finance-Investment Banker/Broker..... 2.2
Food-Retail.......................... 2.2
Agricultural Chemicals............... 2.1
Chemicals-Specialty.................. 1.9
Medical-Generic Drugs................ 1.8
Oil-Field Services................... 1.6
Auto-Cars/Light Trucks............... 1.6
Non-Ferrous Metals................... 1.5
Diversified Manufacturing Operations. 1.5
Coal................................. 1.4
Cable TV............................. 1.3
Machinery-General Industrial......... 1.3
Computer Services.................... 1.3
Electric Products-Misc............... 1.3
Retail-Jewelry....................... 1.2
Diversified Financial Services....... 1.2
Enterprise Software/Service.......... 1.2
Medical-Biomedical/Gene.............. 1.2
Electronic Components-Misc........... 1.1
Diversified Minerals................. 1.1
Real Estate Operations & Development. 1.1
Medical-Wholesale Drug Distribution.. 1.1
Networking Products.................. 1.1
Computers............................ 1.1
Steel-Producers...................... 1.0
Building-Heavy Construction.......... 0.9
Telecom Services..................... 0.9
Import/Export........................ 0.9
Electric-Integrated.................. 0.8
Engineering/R&D Services............. 0.8
Electronic Components-Semiconductors. 0.7
Medical-Drugs........................ 0.7
Paper & Related Products............. 0.6
Transport-Rail....................... 0.6
Metal-Diversified.................... 0.6
Gas-Transportation................... 0.5
Toys................................. 0.4
Cosmetics & Toiletries............... 0.4
Miscellaneous Manufacturing.......... 0.2
----
98.4%
====
- --------
* Calculated as a percentage of net assets
Country Allocation*
Japan.......... 14.9%
United Kingdom. 14.6
France......... 9.4
Switzerland.... 9.1
United States.. 5.8
Germany........ 5.3
Canada......... 4.7
Brazil......... 4.3
Australia...... 4.1
South Korea.... 3.2
Israel......... 3.2
Italy.......... 3.2
Hong Kong...... 2.3
Taiwan......... 2.2
Spain.......... 2.2
Norway......... 1.9
Greece......... 1.8
Singapore...... 1.2
Russia......... 1.1
Luxembourg..... 1.0
Cayman Islands. 0.7
South Africa... 0.7
China.......... 0.7
Thailand....... 0.6
Bermuda........ 0.2
----
98.4%
====
52
SunAmerica International Equity Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)(1)
-------------------------------------------------------------------
COMMON STOCK -- 90.6%
Australia -- 4.1%
BHP Billiton, Ltd............................ 32,500 $ 835,055
Boart Longyear Group......................... 637,500 581,023
CSL, Ltd..................................... 28,600 861,572
Woolworths, Ltd.............................. 38,280 827,805
----------
3,105,455
----------
Bermuda -- 0.2%
Peace Mark Holdings, Ltd..................... 800,000 154,543
----------
Brazil -- 2.9%
Companhia Brasileira de Distribuicao
Grupo Pao de Acuca ADR...................... 22,500 786,600
Petroleo Brasileiro SA ADR................... 31,300 1,375,635
----------
2,162,235
----------
Canada -- 4.7%
Barrick Gold Corp............................ 30,100 1,102,182
Shaw Communications, Inc., Class B........... 49,200 995,788
Suncor Energy, Inc........................... 33,500 1,385,013
----------
3,482,983
----------
Cayman Islands -- 0.7%
Hengan International Group Co., Ltd.......... 184,000 525,200
----------
China -- 0.7%
China Coal Energy Co......................... 498,200 518,052
----------
France -- 8.8%
Alstom....................................... 13,200 995,411
AXA SA....................................... 23,300 763,842
Compagnie Generale des
Etablissements Michelin, Class B............ 23,390 1,534,603
GDF Suez..................................... 26,412 1,382,023
Total SA..................................... 19,660 1,186,105
Vinci SA..................................... 14,910 704,447
----------
6,566,431
----------
Germany -- 5.3%
Allianz SE................................... 10,750 1,478,475
Bayer AG..................................... 18,990 1,386,135
Siemens AG................................... 11,620 1,090,588
----------
3,955,198
----------
Greece -- 1.8%
Alapis Holding Industrial and Commercial SA+. 382,420 810,728
Piraeus Bank SA.............................. 26,541 557,500
----------
1,368,228
----------
Hong Kong -- 2.3%
China Mobile, Ltd. ADR....................... 17,400 871,392
Hong Kong & China Gas Co., Ltd............... 365,150 832,005
Peregrine Investments Holdings, Ltd.+(2)(3).. 91,000 0
----------
1,703,397
----------
Israel -- 3.2%
Israel Chemicals, Ltd........................ 67,800 1,027,936
Teva Pharmaceutical Industries, Ltd. ADR..... 29,700 1,359,963
----------
2,387,899
----------
Market
Value
Security Description Shares (Note 3)(1)
--------------------------------------------------------------
Italy -- 3.2%
Eni SpA................................. 29,010 $ 765,722
Saipem SpA.............................. 40,410 1,195,561
Snam Rete Gas SpA....................... 66,300 399,098
-----------
2,360,381
-----------
Japan -- 14.9%
Bridgestone Corp........................ 54,100 1,014,551
Central Japan Railway Co................ 50 471,897
Kyushu Electric Power Co., Inc.......... 29,900 625,896
Megachips Corp.......................... 45,800 538,253
Mitsubishi UFJ Financial Group, Inc..... 135,200 1,172,000
Nintendo Co., Ltd....................... 800 333,028
Nippon Paper Group, Inc................. 162 473,022
Nomura Holdings, Inc.................... 52,200 673,670
NTT Data Corp........................... 206 805,819
Pigeon Corp............................. 11,800 329,549
Sojitz Corp............................. 281,700 650,426
Sumitomo Mitsui Financial Group, Inc.... 132 826,963
Sumitomo Realty & Development Co., Ltd.. 24,000 522,515
Terumo Corp............................. 17,800 916,685
Toyota Motor Corp....................... 27,500 1,167,572
Unicharm Petcare Corp................... 21,800 650,818
-----------
11,172,664
-----------
Luxembourg -- 1.0%
ArcelorMittal........................... 15,630 781,801
-----------
Norway -- 1.9%
Telenor ASA............................. 56,716 697,293
Yara International ASA.................. 20,660 725,262
-----------
1,422,555
-----------
Russia -- 1.1%
Uralkali GDR............................ 25,900 813,606
-----------
Singapore -- 1.2%
CapitaLand, Ltd......................... 137,000 298,568
DBS Group Holdings, Ltd................. 47,500 561,594
-----------
860,162
-----------
South Africa -- 0.7%
Exxaro Resources, Ltd................... 47,800 520,136
-----------
South Korea -- 3.2%
Hankook Tire Co., Ltd................... 40,000 564,271
LG Electronics, Inc..................... 10,400 969,179
Shinhan Financial Group Co., Ltd........ 24,400 879,732
-----------
2,413,182
-----------
Spain -- 2.2%
Banco Santander SA...................... 44,110 667,718
Indra Sistemas SA....................... 40,970 976,965
-----------
1,644,683
-----------
Switzerland -- 9.1%
Compagnie Financiere Richemont SA....... 20,430 907,383
Lonza Group AG.......................... 11,520 1,432,723
Nestle SA............................... 69,810 3,019,426
Zurich Financial Services AG............ 5,340 1,480,213
-----------
6,839,745
-----------
53
SunAmerica International Equity Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Value
Security Description Shares (Note 3)(1)
---------------------------------------------------------------
COMMON STOCK (continued)
Taiwan -- 2.2%
Compal Electronics, Inc. GDR............. 255,270 $ 804,100
Hon Hai Precision Industry Co., Ltd. GDR. 124,200 859,464
-----------
1,663,564
-----------
Thailand -- 0.6%
Bangkok Bank PCL......................... 150,300 461,565
-----------
United Kingdom -- 14.6%
Autonomy Corp PLC+....................... 47,617 875,455
BG Group PLC............................. 39,600 717,512
GlaxoSmithKline PLC...................... 23,900 516,345
HSBC Holdings PLC........................ 118,380 1,917,146
ICAP PLC................................. 151,450 978,904
Lloyds TSB Group PLC..................... 303,670 1,263,198
Rio Tinto PLC............................ 7,300 454,212
Royal Bank of Scotland Group PLC......... 295,400 978,523
Smith & Nephew PLC....................... 112,390 1,184,640
Vodafone Group PLC....................... 938,290 2,072,868
-----------
10,958,803
-----------
United States -- 0.0%
SoftBrands, Inc.+........................ 40 38
-----------
Total Common Stock
(cost $81,449,271)...................... 67,842,506
-----------
PREFERRED STOCK -- 1.4%
Brazil -- 1.4%
Banco Bradesco SA
(cost $1,393,886)....................... 64,300 1,045,479
-----------
EXCHANGE-TRADED FUNDS -- 2.6%
France -- 0.6%
streetTRACKS MSCI Europe+................ 3,100 455,000
-----------
United States -- 2.0%
iShares MSCI Canada Index Fund........... 46,700 1,230,078
Vanguard International Equity
Index European ETF...................... 4,443 237,123
-----------
1,467,201
-----------
Total Exchange-Traded Funds
(cost $2,201,374)....................... 1,922,201
-----------
Total Long-Term Investment Securities
(cost $85,044,531)...................... 70,810,186
-----------
Market
Principal Value
Security Description Amount (Note 3)(1)
-------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.8%
Agreement with State Street Bank & Trust Co.,
bearing interest at 0.35%, dated 09/30/08, to
be repurchased 10/01/08 in the amount of
$2,809,027 and collateralized by Federal
Home Loan Mtg. Notes, bearing interest at
2.98% due 01/19/10 and having an
approximate value of $2,867,015
(cost $2,809,000).............................. $2,809,000 $ 2,809,000
-----------
TOTAL INVESTMENTS --
(cost $87,853,531)(4).......................... 98.4% 73,619,186
Other assets less liabilities..................... 1.6 1,228,332
---------- -----------
NET ASSETS -- 100.0% $74,847,518
========== ===========
- --------
+ Non-income producing security
(1) A substantial number of the Fund's holdings were valued using the fair
value procedures at September 30, 2008. At September 30, 2008, the
aggregate value of these securities was $58,602,788 representing 78.3% of
net assets. See Note 3 regarding fair value pricing procedures for foreign
equity securities.
(2) Fair valued security; see Note 3
(3) Illiquid security. At September 30, 2008, the aggregate value of these
securities was $0 representing 0.0% of net assets.
(4) See Note 7 for cost of investment on a tax basis.
ADR --American Depository Receipt
ETF --Exchange-Traded Fund
GDR --Global Depository Receipt
See Notes to Financial Statements
54
SunAmerica Value Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Oil Companies-Integrated............... 12.3%
Banks-Super Regional................... 9.4
Finance-Investment Banker/Broker....... 7.7
Electric-Integrated.................... 6.9
Medical-Drugs.......................... 6.3
Telephone-Integrated................... 6.0
Diversified Manufacturing Operations... 5.4
Oil Companies-Exploration & Production. 3.7
Multimedia............................. 3.2
Repurchase Agreement................... 3.1
Investment Management/Advisor Services. 2.8
Medical Products....................... 2.6
Medical-HMO............................ 1.9
Insurance-Property/Casualty............ 1.9
Consumer Products-Misc................. 1.8
Cosmetics & Toiletries................. 1.6
Insurance-Multi-line................... 1.6
Applications Software.................. 1.6
Aerospace/Defense-Equipment............ 1.6
Telecommunication Equipment............ 1.5
Paper & Related Products............... 1.5
Agricultural Operations................ 1.5
Retail-Drug Store...................... 1.5
Non-Hazardous Waste Disposal........... 1.5
Retail-Apparel/Shoe.................... 1.5
Chemicals-Diversified.................. 1.4
Retail-Discount........................ 1.4
Tobacco................................ 1.4
Aerospace/Defense...................... 1.3
Finance-Credit Card.................... 1.3
Metal-Diversified...................... 0.8
----
98.0%
====
- --------
* Calculated as a percentage of net assets
55
SunAmerica Value Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)
-------------------------------------------------------------------
COMMON STOCK -- 94.9%
Aerospace/Defense -- 1.3%
General Dynamics Corp........................ 25,300 $ 1,862,586
-----------
Aerospace/Defense-Equipment -- 1.6%
United Technologies Corp..................... 36,700 2,204,202
-----------
Agricultural Operations -- 1.5%
Archer-Daniels-Midland Co.................... 95,700 2,096,787
-----------
Applications Software -- 1.6%
Microsoft Corp............................... 83,600 2,231,284
-----------
Banks-Super Regional -- 9.4%
Bank of America Corp......................... 168,400 5,894,000
US Bancorp................................... 91,000 3,277,820
Wells Fargo & Co............................. 104,100 3,906,873
-----------
13,078,693
-----------
Chemicals-Diversified -- 1.4%
E.I. du Pont de Nemours & Co................. 49,300 1,986,790
-----------
Consumer Products-Misc. -- 1.8%
Kimberly-Clark Corp.......................... 38,200 2,476,888
-----------
Cosmetics & Toiletries -- 1.6%
Procter & Gamble Co.......................... 32,300 2,250,987
-----------
Diversified Manufacturing Operations -- 5.4%
Eaton Corp................................... 24,500 1,376,410
General Electric Co.......................... 168,000 4,284,000
Honeywell International, Inc................. 43,700 1,815,735
-----------
7,476,145
-----------
Electric-Integrated -- 6.9%
FPL Group, Inc............................... 41,500 2,087,450
PG&E Corp.................................... 57,800 2,164,610
Southern Co.................................. 73,700 2,777,753
Xcel Energy, Inc............................. 128,200 2,562,718
-----------
9,592,531
-----------
Finance-Credit Card -- 1.3%
American Express Co.......................... 52,500 1,860,075
-----------
Finance-Investment Banker/Broker -- 7.7%
Citigroup, Inc............................... 217,200 4,454,772
JPMorgan Chase & Co.......................... 133,200 6,220,440
-----------
10,675,212
-----------
Insurance-Multi-line -- 1.6%
MetLife, Inc................................. 40,000 2,240,000
-----------
Insurance-Property/Casualty -- 1.9%
Chubb Corp................................... 48,000 2,635,200
-----------
Investment Management/Advisor Services -- 2.8%
Ameriprise Financial, Inc.................... 50,800 1,940,560
Invesco, Ltd................................. 92,900 1,949,042
-----------
3,889,602
-----------
Medical Products -- 2.6%
Johnson & Johnson............................ 51,400 3,560,992
-----------
Medical-Drugs -- 6.3%
Abbott Laboratories.......................... 25,200 1,451,016
Eli Lilly & Co............................... 28,700 1,263,661
Market
Value
Security Description Shares (Note 3)
--------------------------------------------------------------------
Medical-Drugs (continued)
Merck & Co., Inc............................. 45,100 $ 1,423,356
Pfizer, Inc.................................. 178,100 3,284,164
Wyeth........................................ 38,000 1,403,720
------------
8,825,917
------------
Medical-HMO -- 1.9%
Aetna, Inc................................... 37,800 1,364,958
UnitedHealth Group, Inc...................... 51,600 1,310,124
------------
2,675,082
------------
Metal-Diversified -- 0.8%
Freeport-McMoRan Copper & Gold, Inc.......... 19,800 1,125,630
------------
Multimedia -- 3.2%
The Walt Disney Co........................... 71,400 2,191,266
Time Warner, Inc............................. 175,700 2,303,427
------------
4,494,693
------------
Non-Hazardous Waste Disposal -- 1.5%
Waste Management, Inc........................ 65,600 2,065,744
------------
Oil Companies-Exploration & Production -- 3.7%
Apache Corp.................................. 17,300 1,804,044
Occidental Petroleum Corp.................... 27,200 1,916,240
XTO Energy, Inc.............................. 30,100 1,400,252
------------
5,120,536
------------
Oil Companies-Integrated -- 12.3%
Chevron Corp................................. 55,700 4,594,136
ConocoPhillips............................... 56,300 4,123,975
Exxon Mobil Corp............................. 67,000 5,203,220
Marathon Oil Corp............................ 81,400 3,245,418
------------
17,166,749
------------
Paper & Related Products -- 1.5%
International Paper Co....................... 81,200 2,125,816
------------
Retail-Apparel/Shoe -- 1.5%
American Eagle Outfitters, Inc............... 132,700 2,023,675
------------
Retail-Discount -- 1.4%
Target Corp.................................. 40,100 1,966,905
------------
Retail-Drug Store -- 1.5%
CVS Caremark Corp............................ 61,400 2,066,724
------------
Telecommunication Equipment -- 1.5%
Harris Corp.................................. 46,400 2,143,680
------------
Telephone-Integrated -- 6.0%
AT&T, Inc.................................... 171,050 4,775,716
Verizon Communications, Inc.................. 109,400 3,510,646
------------
8,286,362
------------
Tobacco -- 1.4%
Philip Morris International, Inc............. 39,900 1,919,190
------------
Total Long-Term Investment Securities
(cost $141,279,841)......................... 132,124,677
------------
56
SunAmerica Value Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------
REPURCHASE AGREEMENT -- 3.1%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $4,305,000).............. $4,305,000 $ 4,305,000
------------
TOTAL INVESTMENTS --
(cost $145,584,841)(2)......... 98.0% 136,429,677
Other assets less liabilities..... 2.0 2,822,864
---------- ------------
NET ASSETS -- 100.0% $139,252,541
========== ============
- --------
(1)See Note 3 for details of Joint Repurchase Agreement.
(2)See Note 7 for cost of investments on a tax basis.
See Notes to Financial Statements
57
SunAmerica Disciplined Growth Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Finance-Investment Banker/Broker....... 5.8%
Computers.............................. 5.3
Building-Residential/Commercial........ 3.5
Applications Software.................. 3.4
Footwear & Related Apparel............. 3.4
Retail-Drug Store...................... 3.2
Medical-Biomedical/Gene................ 3.1
Cosmetics & Toiletries................. 3.0
Distribution/Wholesale................. 3.0
Banks-Super Regional................... 2.8
Medical-Generic Drugs.................. 2.6
Medical-Drugs.......................... 2.6
Telecommunication Equipment............ 2.6
Repurchase Agreement................... 2.5
Transport-Rail......................... 2.5
Mining................................. 2.4
Aerospace/Defense...................... 2.3
Networking Products.................... 2.2
Enterprise Software/Service............ 2.2
Medical Products....................... 2.2
Retail-Apparel/Shoe.................... 2.1
Commercial Services.................... 2.1
Health Care Cost Containment........... 2.1
Oil & Gas Drilling..................... 2.0
Oil Companies-Exploration & Production. 2.0
X-Ray Equipment........................ 1.2
Electronics-Military................... 1.2
Food-Misc.............................. 1.2
Commodity Funds........................ 1.1
Computers-Periphery Equipment.......... 1.1
Beverages-Non-alcoholic................ 1.1
Data Processing/Management............. 1.1
Diversified Manufacturing Operations... 1.1
Retail-Building Products............... 1.1
Telephone-Integrated................... 1.1
Commercial Services-Finance............ 1.0
Real Estate Operations & Development... 1.0
Finance-Other Services................. 1.0
Rental Auto/Equipment.................. 1.0
Food-Wholesale/Distribution............ 0.8
Electronic Components-Semiconductors... 0.6
Casino Services........................ 0.3
E-Marketing/Info....................... 0.3
----
88.2%
====
- --------
* Calculated as a percentage of net assets
58
SunAmerica Disciplined Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)
---------------------------------------------
COMMON STOCK -- 84.6%
Aerospace/Defense -- 2.3%
Lockheed Martin Corp....................... 4,100 $ 449,647
Raytheon Co................................ 9,100 486,941
----------
936,588
----------
Applications Software -- 3.4%
Intuit, Inc.+.............................. 28,900 913,529
Microsoft Corp............................. 17,700 472,413
----------
1,385,942
----------
Banks-Super Regional -- 2.8%
Bank of America Corp....................... 31,800 1,113,000
----------
Beverages-Non-alcoholic -- 1.1%
Hansen Natural Corp.+...................... 14,600 441,650
----------
Building-Residential/Commercial -- 3.5%
KB Home.................................... 22,600 444,768
Standard-Pacific Corp.+.................... 199,590 979,987
----------
1,424,755
----------
Casino Services -- 0.3%
Scientific Games Corp., Class A+........... 5,893 135,657
----------
Commercial Services -- 2.1%
Iron Mountain, Inc.+....................... 35,000 854,350
----------
Commercial Services-Finance -- 1.0%
Euronet Worldwide, Inc.+................... 24,700 413,231
----------
Computers -- 5.3%
Apple, Inc.+............................... 3,400 386,444
Hewlett-Packard Co......................... 37,900 1,752,496
----------
2,138,940
----------
Computers-Periphery Equipment -- 1.1%
Synaptics, Inc.+........................... 15,200 459,344
----------
Cosmetics & Toiletries -- 3.0%
Colgate-Palmolive Co....................... 5,400 406,890
Procter & Gamble Co........................ 11,600 808,404
----------
1,215,294
----------
Data Processing/Management -- 1.1%
Fiserv, Inc.+.............................. 9,200 435,344
----------
Distribution/Wholesale -- 3.0%
Beacon Roofing Supply, Inc.+............... 42,800 668,536
Pool Corp.................................. 22,541 525,881
----------
1,194,417
----------
Diversified Manufacturing Operations -- 1.1%
Danaher Corp............................... 6,200 430,280
----------
E-Marketing/Info -- 0.3%
Constant Contact, Inc.+.................... 7,911 135,041
----------
Electronic Components-Semiconductors -- 0.6%
Macrovision Solutions Corp.+............... 16,800 258,384
----------
Electronics-Military -- 1.2%
L-3 Communications Holdings, Inc........... 4,900 481,768
----------
Enterprise Software/Service -- 2.2%
Oracle Corp.+.............................. 43,500 883,485
----------
Market
Value
Security Description Shares (Note 3)
------------------------------------------------------------------
Finance-Investment Banker/Broker -- 5.8%
Citigroup, Inc............................... 57,900 $1,187,529
Investment Technology Group, Inc.+........... 8,300 252,569
JPMorgan Chase & Co.......................... 19,000 887,300
----------
2,327,398
----------
Finance-Other Services -- 1.0%
CME Group, Inc............................... 1,100 408,661
----------
Food-Misc. -- 1.2%
General Mills, Inc........................... 6,800 467,296
----------
Food-Wholesale/Distribution -- 0.8%
Fresh Del Monte Produce, Inc.+............... 13,819 306,782
----------
Footwear & Related Apparel -- 3.4%
Iconix Brand Group, Inc.+.................... 103,800 1,357,704
----------
Health Care Cost Containment -- 2.1%
McKesson Corp................................ 15,700 844,817
----------
Medical Products -- 2.2%
Becton Dickinson & Co........................ 11,000 882,860
----------
Medical-Biomedical/Gene -- 3.1%
Genzyme Corp.+............................... 15,200 1,229,528
----------
Medical-Drugs -- 2.6%
Abbott Laboratories.......................... 8,200 472,156
AstraZeneca PLC ADR.......................... 13,000 570,440
----------
1,042,596
----------
Medical-Generic Drugs -- 2.6%
Mylan, Inc.+................................. 32,800 374,576
Teva Pharmaceutical Industries, Ltd. ADR..... 14,800 677,692
----------
1,052,268
----------
Mining -- 2.4%
Agnico-Eagle Mines, Ltd...................... 7,200 396,504
Goldcorp, Inc................................ 17,700 559,851
----------
956,355
----------
Networking Products -- 2.2%
Cisco Systems, Inc.+......................... 39,600 893,376
----------
Oil & Gas Drilling -- 2.0%
Transocean, Inc.+............................ 7,300 801,832
----------
Oil Companies-Exploration & Production -- 2.0%
Devon Energy Corp............................ 8,600 784,320
----------
Printing-Commercial -- 0.0%
VistaPrint, Ltd.+............................ 98 3,218
----------
Real Estate Operations & Development -- 1.0%
The St. Joe Co.+............................. 10,500 410,445
----------
Rental Auto/Equipment -- 1.0%
Rent-A-Center, Inc.+......................... 18,100 403,268
----------
Retail-Apparel/Shoe -- 2.1%
Tween Brands, Inc.+.......................... 87,900 860,541
----------
Retail-Building Products -- 1.1%
Home Depot, Inc.............................. 16,400 424,596
----------
59
SunAmerica Disciplined Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Shares/ Market
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------
COMMON STOCK (continued)
Retail-Drug Store -- 3.2%
CVS Caremark Corp................... 37,700 $ 1,268,982
-----------
Telecommunication Equipment -- 2.6%
Harris Corp......................... 22,400 1,034,880
-----------
Telephone-Integrated -- 1.1%
AT&T, Inc........................... 15,100 421,592
-----------
Transport-Rail -- 2.5%
Burlington Northern Santa Fe Corp... 5,000 462,150
Union Pacific Corp.................. 7,400 526,584
-----------
988,734
-----------
X-Ray Equipment -- 1.2%
Hologic, Inc.+...................... 25,100 485,183
-----------
Total Common Stock
(cost $35,803,824)................. 33,994,702
-----------
EXCHANGE-TRADED FUNDS -- 1.1%
Commodity Funds -- 1.1%
SPDR Gold Trust+
(cost $484,978).................... 5,500 467,885
-----------
Total Long-Term Investment Securities
(cost $36,288,802)................. 34,462,587
-----------
REPURCHASE AGREEMENT -- 2.5%
State Street Bank & Trust Co.
Joint Repurchase Agreement(1)
(cost $998,000).................... $998,000 998,000
-----------
TOTAL INVESTMENTS --
(cost $37,286,802)(2).............. 88.2% 35,460,587
Other assets less liabilities......... 11.8 4,727,908
-------- -----------
NET ASSETS -- 100.0% $40,188,495
======== ===========
- --------
+ Non-income producing security
(1) See Note 3 for details of Joint Repurchase Agreement.
(2) See Note 7 for cost of investments on a tax basis.
ADR --American Depository Receipt
See Notes to Financial Statements
60
SunAmerica International Small-Cap Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited)
Industry Allocation*
Medical-Drugs.......................... 3.8%
Chemicals-Diversified.................. 3.0
Consulting Services.................... 2.7
Computers-Integrated Systems........... 2.6
Electronic Components-Misc............. 2.5
Building-Maintance & Services.......... 2.4
Electric Products-Misc................. 2.3
Gambling (Non-Hotel)................... 2.0
Machinery-General Industrial........... 1.9
Medical Instruments.................... 1.9
Retail-Misc./Diversified............... 1.8
Cosmetics & Toiletries................. 1.8
Power Converter/Supply Equipment....... 1.8
Transport-Marine....................... 1.8
Shipbuilding........................... 1.8
Food-Misc.............................. 1.7
Time Deposits.......................... 1.7
Machinery-Construction & Mining........ 1.7
Energy-Alternate Sources............... 1.7
Finance-Other Services................. 1.7
Advanced Materials..................... 1.6
Containers-Paper/Plastic............... 1.5
Electronics-Military................... 1.5
Research & Development................. 1.4
Medical-Biomedical/Gene................ 1.4
Retail-Apparel/Shoe.................... 1.4
E-Commerce/Services.................... 1.4
Electronic Components-Semiconductors... 1.4
Security Services...................... 1.3
Electronic Measurement Instruments..... 1.3
Internet Infrastructure Software....... 1.3
Miscellaneous Manufacturing............ 1.3
Appliances............................. 1.2
Retail-Automobile...................... 1.2
Agricultural Operations................ 1.2
Transport-Rail......................... 1.1
Auto/Truck Parts & Equipment-Original.. 1.0
Transport-Services..................... 1.0
Applications Software.................. 1.0
Machinery-Electrical................... 1.0
Medical-Wholesale Drug Distribution.... 1.0
Retail-Bookstores...................... 1.0
Direct Marketing....................... 0.9
Oil-Field Services..................... 0.9
Retail-Petroleum Products.............. 0.9
Commercial Services.................... 0.8
Water.................................. 0.8
Veterinary Products.................... 0.8
Computers-Periphery Equipment.......... 0.8
Enterprise Software/Service............ 0.7
Electronic Connectors.................. 0.7
Industrial Audio & Video Products...... 0.7
Diversified Financial Services......... 0.7
Medical-Hospitals...................... 0.7
Extended Service Contracts............. 0.7
Building-Residential/Commercial........ 0.7
Tools-Hand Held........................ 0.7
Building & Construction-Misc........... 0.7
Oil Companies-Exploration & Production. 0.7
Medical Products....................... 0.7
Instruments-Controls................... 0.6%
Medical Imaging Systems................ 0.6
Finance-Investment Banker/Broker....... 0.6
Chemicals-Specialty.................... 0.6
Building & Construction Products-Misc.. 0.6
Oil Field Machinery & Equipment........ 0.6
Medical Labs & Testing Services........ 0.6
Retail-Regional Department Stores...... 0.5
Retail-Discount........................ 0.5
Coatings/Paint......................... 0.5
Funeral Services & Related Items....... 0.5
Insurance-Reinsurance.................. 0.5
Oil Refining & Marketing............... 0.5
Rubber-Tires........................... 0.5
Auto-Cars/Light Trucks................. 0.4
Footwear & Related Apparel............. 0.4
Communications Software................ 0.4
Steel-Specialty........................ 0.4
Banks-Commercial....................... 0.4
Retail-Restaurants..................... 0.4
Electric-Generation.................... 0.4
Steel Pipe & Tube...................... 0.4
Coal................................... 0.4
Fisheries.............................. 0.3
Motion Pictures & Services............. 0.3
Casino Services........................ 0.3
Building-Heavy Construction............ 0.3
Internet Content-Information/News...... 0.3
Human Resources........................ 0.3
Audio/Video Products................... 0.2
Diversified Manufacturing Operations... 0.2
Aerospace/Defense...................... 0.2
Medical Information Systems............ 0.2
Beverages-Non-alcoholic................ 0.2
Rubber/Plastic Products................ 0.1
Diversified Minerals................... 0.1
Retail-Major Department Stores......... 0.1
----
98.1%
====
- --------
* Calculated as a percentage of net assets
61
SunAmerica International Small-Cap Fund
PORTFOLIO PROFILE -- September 30, 2008 -- (unaudited) (continued)
Country Allocation*
Japan.......... 28.5%
United Kingdom. 26.6
Germany........ 6.3
France......... 5.1
South Korea.... 2.7
Spain.......... 2.6
Sweden......... 2.5
Bermuda........ 2.2
Denmark........ 1.9
Switzerland.... 1.8
Greece......... 1.8
United States.. 1.7
Finland........ 1.6
Norway......... 1.3
Taiwan......... 1.3
China.......... 1.3
Italy.......... 1.1
Cayman Islands. 0.8
Ireland........ 0.8
Malaysia....... 0.8
Netherlands.... 0.8
Indonesia...... 0.7
Belgium........ 0.7
Singapore...... 0.7
Austria........ 0.6
Australia...... 0.5
Hong Kong...... 0.4
New Zealand.... 0.4
Thailand....... 0.4
Philippines.... 0.2
----
98.1%
====
- --------
* Calculated as a percentage of net assets
62
SunAmerica International Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008
Market
Value
Security Description Shares (Note 3)(1)
----------------------------------------------------------------------
COMMON STOCK -- 95.9%
Australia -- 0.5%
Tassal Group, Ltd............................... 36,863 $ 65,397
Western Areas NL+............................... 4,164 25,391
--------
90,788
--------
Austria -- 0.6%
Andritz AG...................................... 2,550 109,578
--------
Belgium -- 0.7%
EVS Broadcast Equipment SA...................... 1,952 139,631
--------
Bermuda -- 2.2%
China Yurun Food Group, Ltd..................... 57,000 73,660
CNPC Hong Kong, Ltd............................. 170,000 72,286
Global Sources, Ltd............................. 6,930 69,785
Huabao International Holdings, Ltd.............. 145,000 111,173
IT, Ltd......................................... 388,000 47,523
Pacific Basin Shipping, Ltd..................... 59,000 49,081
Peace Mark Holdings, Ltd........................ 8,000 1,545
--------
425,053
--------
Cayman Islands -- 0.8%
Anta Sports Products, Ltd....................... 134,000 77,465
Hidili Industry International Development, Ltd.. 145,000 69,522
New World Department Store China, Ltd.+......... 31,000 17,003
--------
163,990
--------
China -- 1.3%
AsiaInfo Holdings, Inc .+....................... 27,600 253,368
--------
Denmark -- 1.9%
Auriga Industries A/S Series B.................. 5,645 142,885
East Asiatic Co., Ltd. A/S...................... 2,063 87,064
Genmab A/S+..................................... 1,204 68,815
NeuroSearch A/S+................................ 1,562 68,776
--------
367,540
--------
Finland -- 1.6%
Nokian Renkaat Oyj.............................. 3,647 88,641
Oriola-KD Oyj Series A.......................... 9,738 27,704
Oriola-KD Oyj Series B.......................... 2,816 7,934
Poyry Oyj....................................... 10,442 201,046
--------
325,325
--------
France -- 5.1%
Faiveley SA..................................... 1,235 73,816
Guerbet SA...................................... 721 122,070
Ingenico SA..................................... 5,997 151,123
Rubis SA........................................ 2,440 172,923
Sechilienne SA.................................. 3,399 194,454
Sperian Protection SA........................... 1,300 132,802
Virbac SA....................................... 1,979 151,911
--------
999,099
--------
Germany -- 5.8%
Bauer AG........................................ 2,170 110,220
ElringKlinger AG................................ 2,347 44,607
Fielmann AG..................................... 5,182 361,947
Rational AG..................................... 853 134,614
Market
Value
Security Description Shares (Note 3)(1)
----------------------------------------------------------
Germany (continued)
SMA Solar Technology AG+............ 1,699 $ 132,900
Vossloh AG.......................... 3,547 365,031
----------
1,149,319
----------
Greece -- 1.8%
Fourlis Holdings SA................. 5,654 108,153
Sarantis SA......................... 21,350 239,191
----------
347,344
----------
Hong Kong -- 0.4%
China Green Holdings, Ltd........... 104,000 83,703
----------
Indonesia -- 0.7%
PT United Tractors Tbk.............. 144,666 144,495
----------
Ireland -- 0.8%
Origin Enterprises PLC+............. 36,270 153,183
----------
Italy -- 1.1%
Ansaldo STS SpA..................... 15,881 225,721
----------
Japan -- 28.5%
Acrodea, Inc.+...................... 26 60,412
Ain Pharmaciez, Inc................. 6,000 108,868
Alpha Systems, Inc.................. 3,700 75,349
Axell Corp.......................... 61 190,120
Benefit One Inc..................... 72 67,783
Chugoku Marine Paints, Ltd.......... 17,000 100,499
CMIC Co., Ltd....................... 110 28,633
Dai-ichi Seiko Co., Ltd............. 3,900 62,009
Daiseki Co., Ltd.................... 3,700 98,459
Dena Co., Ltd....................... 32 128,819
Disco Corp.......................... 3,100 90,713
Don Quijote Co., Ltd................ 5,900 105,722
en-japan, Inc....................... 79 73,983
EPS Co., Ltd........................ 30 95,203
Foster Electric Co., Ltd............ 3,600 44,934
FP Corp............................. 9,500 295,164
Funai Electric Co., Ltd............. 4,300 79,801
Harmonic Drive Systems, Inc......... 28 81,067
Hisamitsu Pharmaceutical Co., Inc... 6,300 273,484
Hitachi Koki Co., Ltd............... 13,200 134,525
Intage, Inc......................... 5,500 81,007
Iriso Electronics Co., Ltd.......... 8,500 83,345
Koito Manufacturing Co., Ltd........ 17,000 158,808
Kokusai Co., Ltd.................... 5,900 45,886
Kura Corp........................... 45 71,802
Mani, Inc........................... 2,300 129,701
Mars Engineering Corporation........ 2,900 62,941
Miraial Co., Ltd.................... 3,500 52,690
Modec, Inc.......................... 5,700 135,628
Moshi Moshi Hotline, Inc............ 7,100 184,782
Nichi-iko Pharmaceutical Co., Ltd... 4,300 104,356
Nishimatsuya Chain Co., Ltd......... 23,900 228,946
Obara Corp.......................... 2,800 24,185
OPTEX Co., Ltd...................... 5,800 53,757
Osaka Securities Exchange Co., Ltd.. 25 70,843
Otsuka Corp......................... 3,600 235,095
63
SunAmerica International Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Market
Value
Security Description Shares (Note 3)(1)
-------------------------------------------------------------
COMMON STOCK (continued)
Japan (continued)
Produce Co., Ltd.+..................... 11 $ 10,040
Proto Corp............................. 2,600 60,840
Roland DG Corp......................... 8,200 150,805
Sintokogio, Ltd........................ 19,300 121,064
Software Service, Inc.................. 4,500 35,688
Sysmex Corp............................ 3,800 168,075
Toho Pharmaceutical Co., Ltd........... 14,100 198,539
Token Corp............................. 4,170 135,289
Union Tool Co.......................... 4,700 110,673
USS Co., Ltd........................... 3,710 238,269
Village Vanguard Co., Ltd.+............ 41 197,968
VSN, Inc............................... 5,000 51,819
Works Applications Co., Ltd............ 167 141,194
Yamaguchi Financial Group, Inc......... 6,000 72,118
----------
5,611,700
----------
Malaysia -- 0.8%
IJM Corp. Bhd+......................... 57,400 78,662
Sarawak Energy Bhd..................... 101,800 70,648
----------
149,310
----------
Netherlands -- 0.8%
Smit Internationale NV................. 1,720 148,553
----------
New Zealand -- 0.4%
Nufarm, Ltd............................ 6,493 78,840
----------
Norway -- 1.3%
Sevan Marine ASA+...................... 26,368 109,318
Songa Offshore ASA+.................... 15,480 146,827
----------
256,145
----------
Philippines -- 0.2%
Pepsi-Cola Products Philippines, Inc.+. 712,000 30,402
----------
Singapore -- 0.7%
Raffles Medical Group, Ltd............. 206,800 137,715
----------
South Korea -- 2.7%
Cheil Industries, Inc.................. 990 43,525
CJ Internet Corp....................... 5,940 63,715
Hyundai DSF Co., Ltd................... 6,970 66,239
Jinsung T.E.C. Co., Ltd................ 5,548 56,658
JVM Co., Ltd........................... 2,683 38,809
Korea Kumho Petrochemical Co., Ltd..... 870 28,982
Korean Reinsurance Co.................. 12,530 98,321
SODIFF Advanced Materials Co., Ltd..... 1,104 75,425
Taeyoung Engineering & Construction.... 13,800 61,898
----------
533,572
----------
Spain -- 2.6%
Prosegur Cia de Seguridad SA........... 7,606 265,403
Tubacex, SA............................ 11,089 70,279
Viscofan SA............................ 11,059 182,218
----------
517,900
----------
Sweden -- 2.5%
Elekta AB, Series B.................... 12,121 207,189
Intrum Justitia AB..................... 23,926 256,686
Market
Value
Security Description Shares (Note 3)(1)
--------------------------------------------------------------------
Sweden (continued)
Saab AB, Series B........................... 2,406 $ 36,990
-----------
500,865
-----------
Switzerland -- 1.8%
Basilea Pharmaceutica AG+................... 1,433 210,638
Bucher Industries AG........................ 255 33,745
Compagne Financiere Tradition............... 961 111,490
-----------
355,873
-----------
Taiwan -- 1.3%
Everlight Electronics Co., Ltd.............. 37,818 78,782
Far Eastern Department Stores, Ltd.......... 63,000 41,819
L&K Engineering Co., Ltd.................... 58,000 54,325
Sanyang Industrial Co., Ltd................. 317,167 80,409
-----------
255,335
-----------
Thailand -- 0.4%
Tata Steel Thailand PCL (Foreign Shares)(2). 1,666,600 72,846
-----------
United Kingdom -- 26.6%
Afren PLC+.................................. 51,441 60,307
Arriva PLC.................................. 10,665 131,647
Aveva Group PLC............................. 5,649 115,629
Chemring Group PLC.......................... 10,403 384,472
Chloride Group PLC.......................... 60,932 212,196
Connaught PLC............................... 49,925 334,224
Croda International PLC..................... 34,301 375,569
Dignity PLC................................. 8,002 100,076
eaga PLC.................................... 57,183 135,848
Go-Ahead Group PLC.......................... 2,399 71,532
Halma PLC................................... 59,622 211,218
Hikma Pharmaceuticals PLC................... 20,775 148,009
Homeserve PLC............................... 5,250 137,337
IG Group Holdings PLC....................... 70,162 399,917
Lamprell PLC................................ 31,447 180,613
Mears Group PLC............................. 27,300 138,187
Micro Focus International PLC............... 29,006 147,213
Northumbrian Water Group PLC................ 29,948 152,723
PayPoint PLC................................ 14,753 139,361
PV Crystalox Solar PLC+..................... 89,370 245,111
PZ Cussons PLC.............................. 38,305 122,496
QinetiQ PLC................................. 76,280 282,053
Rotork PLC.................................. 7,344 122,776
RPS Group PLC............................... 56,603 248,682
Ultra Electronics Holdings PLC.............. 12,510 285,141
VT Group PLC................................ 36,595 344,213
-----------
5,226,550
-----------
Total Common Stock
(cost $24,313,704)......................... 18,853,743
-----------
PREFERRED STOCK -- 0.5%
Germany -- 0.5%
Fuchs Petrolub AG
(cost $153,611)............................ 1,673 92,371
-----------
64
SunAmerica International Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2008 -- (continued)
Shares/ Market
Principal Value
Security Description Amount (Note 3)(1)
-------------------------------------------------------------------
WARRANTS -- 0.0%
Malaysia -- 0.0%
IJM Land Bhd
Expires 09/13/2011+
(cost $0).................................. 5,740 $ 375
-----------
Total Long-Term Investment Securities
(cost $24,467,315)......................... 18,946,489
-----------
SHORT-TERM INVESTMENT SECURITIES -- 1.7%
Time Deposits -- 1.7%
Euro Time Deposit with State Street Bank &
Trust Co.
0.50% due 10/01/08
(cost $340,000)............................ $340,000 340,000
-----------
TOTAL INVESTMENTS --
(cost $24,807,315)(3) 98.1% 19,286,489
Other assets less liabilities................. 1.9 375,082
-------- -----------
NET ASSETS -- 100.0% $19,661,571
======== ===========
- --------
+ Non-income producing security
(1)A substantial number of the Fund's holdings were valued using the fair value
procedures at September 30, 2008. At September 30, 2008, the aggregate value
of these securities was $18,395,387 representing 93.6% of net assets. See
Note 3 regarding fair value pricing procedures for foreign equity securities.
(2)Fair valued security; See Note 2
(3)See Note 7 for cost of investment on a tax basis.
See Notes to Financial Statements
65
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008
Note 1. Organization
SunAmerica Equity Funds is registered under the Investment Company Act of
1940, as amended, (the "1940 Act") as an open-end management investment
company and was organized as a Massachusetts business trust (the "Trust" or
"Equity Funds") on June 16, 1986. It currently consists of nine different
funds (each, a "Fund" and collectively, the "Funds"). Each Fund is a
separate series of the Trust with a distinct objective and/or strategy. Each
Fund is advised and/or managed by AIG SunAmerica Asset Management Corp. (the
"Adviser" or "AIG SunAmerica"), an indirect wholly-owned subsidiary of
American International Group, Inc. ("AIG"). An investor may invest in one or
more of the following Funds: SunAmerica Blue Chip Growth Fund ("Blue Chip
Growth Fund"), SunAmerica Growth Opportunities Fund ("Growth Opportunities
Fund"), SunAmerica New Century Fund ("New Century Fund"), SunAmerica Growth
and Income Fund ("Growth and Income Fund"), SunAmerica Balanced Assets Fund
("Balanced Assets Fund"), SunAmerica International Equity Fund
("International Equity Fund"), SunAmerica Value Fund ("Value Fund"),
SunAmerica Disciplined Growth Fund ("Disciplined Growth Fund") and
SunAmerica International Small-Cap Fund ("International Small-Cap Fund").
The Funds are considered to be separate entities for financial and tax
reporting purposes.
The investment objective and principal investment techniques for each of the
Funds are as follows:
Blue Chip Growth Fund seeks capital appreciation by active trading of equity
securities of Blue Chip companies that demonstrate the potential for capital
appreciation. At least 80% of the Fund's net assets plus any borrowing for
investment purposes will be invested in Blue Chip companies.
Growth Opportunities Fund seeks capital appreciation by active trading of
equity securities that demonstrate the potential for capital appreciation,
issued generally by small-cap companies.
New Century Fund seeks capital appreciation by active trading of equity
securities that demonstrate the potential for capital appreciation, without
regard to market capitalization.
Growth and Income Fund seeks capital appreciation and current income by
active trading of equity securities issued by companies of any size, that
pay dividends, demonstrate the potential for capital appreciation and/or are
believed to be undervalued in the market.
Balanced Assets Fund seeks capital appreciation and conservation of
principal by active trading partly in equity securities that demonstrate the
potential for capital appreciation issued by companies with market
capitalization of over $1.5 billion and partly in investment-grade fixed
income securities.
International Equity Fund seeks capital appreciation by active trading of
equity securities and other securities with equity characteristics of
non-U.S. issuers located in a number of different countries other than the
U.S. and selected without regard to market capitalization. At least 80% of
the Fund's net assets plus, any borrowing for investment purposes, will be
invested in equity securities.
Value Fund seeks long-term growth of capital by active trading of equity
securities selected on the basis of value criteria, issued by companies of
any market capitalization, that offer the potential for long-term growth of
capital.
Disciplined Growth Fund seeks capital appreciation by active trading of
equity securities that demonstrate the potential for capital appreciation,
without regard to market capitalization.
International Small-Cap Fund seeks long-term capital appreciation by active
trading of equity and equity-related securities of non-U.S. small-cap
companies throughout the world, including emerging market countries. Under
normal circumstances, at least 80% of the Fund's net assets, plus any
borrowings for investment purposes, will be invested in such securities.
The Blue Chip Growth Fund, Growth Opportunities Fund, New Century Fund,
Growth and Income Fund, Balanced Assets Fund, Disciplined Growth Fund and
International Small-Cap Fund are organized as "diversified" funds within the
meaning of the 1940 Act. The International Equity Fund and Value Fund are
organized as "non-diversified" funds.
66
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statement of Assets and Liabilities. The cost structure
for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, purchases of Class A shares in amounts
$1,000,000 or more will be purchased at net asset value but will be subject
to a contingent deferred sales charge on redemptions made within two years
of purchase. With respect to Class A shares of the International Equity Fund
and International Small-Cap Fund, a redemption fee of 2% will be assessed on
the proceeds of any redemption of shares that were purchased within ninety
(90) calendar days prior to the date of such redemption. An exchange fee of
2% will be assessed on the amount of any exchange of Class A shares of the
International Equity Fund and International Small-Cap Fund that were
purchased within ninety (90) calendar days prior to the date of such
exchange.
Class B shares are offered without an initial sales charge, although a
declining contingent sales charge may be imposed on redemptions made within
six years of purchase. Class B shares of each Fund convert automatically to
Class A shares approximately eight years after purchase of such Class B
shares and at such time will be subject to the lower distribution fee
applicable to Class A shares.
Class C shares are offered at net asset value per share without an initial
sales charge, although may be subject to a contingent deferred sales charge
on redemptions made within 12 months of purchase. Certain Class C shares of
particular Funds issued in connection with particular reorganizations or
mergers will convert automatically to Class A shares approximately ten years
after purchase and at such time will be subject to the lower distribution
fee applicable to Class A shares.
Class I and Class Z shares are offered at net asset value per share. These
classes are offered exclusively to certain institutions and to participants
in certain employee benefit plans and other programs.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Trust's
registration statement. Class A, Class B and Class C shares each make
distribution and account maintenance fee payments under the distribution
plans pursuant to Rule 12b-1 under the 1940 Act, except that Class B and
Class C shares are subject to higher distribution fee rates. Class I shares
and Class Z shares have not adopted 12b-1 plans and make no payments
thereunder, however, Class I shares pay a service fee to the Funds'
distributor for providing administrative and shareholder services.
Indemnifications: Under the Trust's organizational documents, its officers
and trustees are indemnified against certain liability arising out of the
performance of their duties to the Trust. In addition, in the normal course
of business the Trust enters into contracts that contain the obligation to
indemnify others. The Trust's maximum exposure under these arrangements is
unknown. Currently, however, the Trust expects the risk of loss to be remote.
Note 2. Fund Merger
Pursuant to a plan of reorganization, all the assets and liabilities of
SunAmerica Biotech/Health Fund ("Biotech/Health Fund") were transferred in a
tax-free exchange to the New Century Fund, in exchange for shares of New
Century Fund. The details of the reorganization, which was consummated on
March 19, 2007, are set forth below.
Class A, Class B, and Class C shares of Biotech/Health Fund were exchanged
tax-free for Class A, Class B, and Class C shares of New Century Fund at an
exchange ratio of 2.24 to 1, 2.04 to 1 and 2.05 to 1, respectively.
Net assets and unrealized appreciation (depreciation) as of the merger date
were as follows:
Net assets of the Biotech/Health Fund prior to merger............................................... $ 21,294,588
Net assets of the New Century Fund prior to merger.................................................. $ 88,216,005
------------
Aggregate net assets of the New Century Fund following acquisition.................................. $109,510,593
------------
Shares of the New Century Fund issued in connection with the acquisition of the Biotech/Health Fund. 1,098,850
Unrealized appreciation (depreciation) in the Biotech/Health Fund................................... $ 397,826
67
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Note 3. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates. The
following is a summary of the significant accounting policies followed by
the Trust in the preparation of their financial statements:
Security Valuations: Stocks are generally valued based upon closing sales
prices reported on recognized securities exchanges. Stocks listed on the
NASDAQ are valued using the NASDAQ Official Closing Price ("NOCP").
Generally, the NOCP will be the last sale price unless the reported trade
for the stock is outside the range of the bid/ask price. In such cases, the
NOCP will be normalized to the nearer of the bid or ask price. For listed
securities having no sales reported and for unlisted securities, such
securities will be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, a
portfolio uses the exchange that is the primary market for the security.
However, depending on the foreign market, closing prices may be up to 15
hours old when they are used to price a Fund's shares, and the Fund may
determine that certain closing prices are unreliable. This determination
will be based on review of a number of factors, including developments in
foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign
securities and baskets of foreign securities. If a Fund determines that
closing prices do not reflect the fair value of the securities, the Fund
will adjust the previous closing prices in accordance with pricing
procedures approved by the Board of Trustees (the "Board") to reflect what
it believes to be the fair value of the securities as of the close of
regular trading on the NYSE. The Funds may also fair value securities in
other situations, for example, when a particular foreign market is closed
but a Fund is open. For foreign equity securities, the Funds use an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices.
Non-convertible bonds and debentures, other long-term debt securities, and
short term debt securities with maturities in excess of 60 days, are valued
at bid prices obtained for the day of valuation from a bond pricing service,
when such prices are available. If a vendor quote is unavailable the
securities may be priced at the mean of two independent quotes obtained from
brokers.
Short-term securities with 60 days or less to maturity are amortized to
maturity based on their cost to the Fund if acquired within 60 days of
maturity or, if already held by the Fund on the 60th day, are amortized to
maturity based on the value determined on the 61st day.
Investments in open-end and closed-end registered investment companies that
do not trade on an exchange are valued at the end of day net asset value per
share. Investments in open-end and closed-end registered investment
companies that trade on an exchange are valued at the last sales price or
official closing price as of the close of the customary trading session on
the exchange where the security is principally traded.
Securities for which market quotations are not readily available or if a
development/significant event occurs that may significantly impact the value
of the security, then these securities are valued, as determined pursuant to
procedures adopted in good faith by the Board. There is no single standard
for making fair value determinations, which may result in prices that vary
from those of other funds.
New Accounting Pronouncements: In March 2008, the Financial Accounting
Standards (FASB) issued FASB Statement No. 161, Disclosures about Derivative
Instruments and Hedging Activities. The standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand
their effects on an entity's financial position and financial performance.
It is effective for financial statements issued for fiscal years beginning
after November 15, 2008. Management is currently in the process of
determining the impact of the standard on the Fund's disclosures in the
financial statements.
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
68
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
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 had 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 September 30, 2008, the
management of the Funds does not believe the adoption of FAS 157 will impact
the amounts reported in the financial statements, however, additional
disclosures will be required about the inputs used to develop the
measurements of fair value.
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, pursuant to exemptive relief granted by the Securities
and Exchange Commission ("SEC"), may transfer uninvested cash balances into
a single joint account, the daily aggregate balance of which is invested in
one or more repurchase agreements collateralized by U.S. Treasury or federal
agency obligations. For repurchase agreements and joint repurchase
agreements, the Funds' custodian takes possession of the collateral pledged
for investments in repurchase agreements ("repo" or collectively "repos").
The underlying collateral is valued daily on a mark to market basis to
ensure that the value, at the time the agreement is entered into, is equal
to at least 102% of the repurchase price, including accrued interest. In the
event of default of the obligation to repurchase, a Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. If the seller defaults and the value of the collateral declines
or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited.
As of September 30, 2008, the following Funds held an undivided interest in
a joint repurchase agreement with State Street Bank & Trust Co.:
Percentage Principal
Fund Interest Amount
- ---- ---------- ----------
Blue Chip Growth..... 0.65% $2,332,000
Growth Opportunities. 1.94 7,000,000
New Century.......... 1.57 5,662,000
Growth and Income.... 1.18 4,283,000
Balanced Assets...... 1.03 3,730,000
Value................ 1.19 4,305,000
Disciplined Growth... 0.28 998,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
State Street Bank & Trust Co., dated September 30, 2008, bearing interest at
a rate of 0.05% per annum, with a principal amount of $361,501,000, a
repurchase price of $361,501,502, and a maturity date of October 1, 2008.
The repurchase agreement is collateralized by the following:
Maturity Principal
Type of Collateral Interest Rate Date Amount Market Value
- ------------------ ------------- -------- ------------ ------------
U.S. Treasury Bills. 0.33% 12/04/08 $124,090,000 $124,015,546
U.S. Treasury Bills. 0.25 12/11/08 244,840,000 244,717,580
As of September 30, 2008, the following Fund held an undivided interest in a
joint repurchase agreement with UBS Securities, LLC.:
Percentage Principal
Fund Interest Amount
- ---- ---------- ---------
Growth Opportunities. 0.46% $923,000
69
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Securities, LLC, dated September 30, 2008, bearing interest at a rate of
0.07% per annum, with a principal amount of $200,000,000, a repurchase price
of $200,000,389, and a maturity date of October 1, 2008. The repurchase
agreement is collateralized by the following:
Maturity Principal
Type of Collateral Interest Rate Date Amount Market Value
- ------------------ ------------- -------- ----------- ------------
U.S. Treasury Inflation Index Notes. 3.00% 07/15/12 $62,928,000 $64,187,500
U.S. Treasury Inflation Index Notes. 1.88 07/15/13 59,007,000 60,187,500
U.S. Treasury Inflation Index Notes. 2.00 07/15/14 78,065,000 79,626,343
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded on a trade
date basis. Realized gains and losses on sales of investments are calculated
on the identified cost basis. Interest income is accrued daily except when
collection is not expected. Dividend income is recorded on the ex-dividend
date except for certain dividends from foreign securities, which are
recorded as soon as the Fund is informed after the ex-dividend date. Funds
which earn foreign income and capital gains may be subject to foreign
withholding taxes and capital gains taxes at various rates. Under applicable
foreign law, a withholding of tax may be imposed on interest, dividends, and
capital gains at various rates. For financial statements purposes, the Funds
amortize all premiums and accrete all discounts on fixed income securities.
Net investment income, other than class-specific expenses, and realized and
unrealized gains and losses, are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares of each class
of shares at the beginning of the day (after adjusting for the current
capital shares activity of the respective class).
Expenses common to all Funds, not directly related to individual Funds, are
allocated among the Funds based upon their relative net asset value or other
appropriate methods. In all other respects, expenses are charged to each
Fund as incurred on a specific identification basis. Interest earned on cash
balances held at the custodian are shown as custody credits on the Statement
of Operations.
Dividends from net investment income, if any, are paid annually, except for
the Balanced Assets Fund and Growth and Income Fund, which pay quarterly.
Capital gain distributions, if any, are paid at least annually. The Balanced
Assets Fund and Growth and Income Fund reserve the right to declare and pay
dividends less frequently than disclosed above, provided that net realized
capital gains and net investment income, if any, are paid annually.
The Funds record dividends and distributions to their shareholders on the
ex-dividend date. The amount of dividends and distributions from net
investment income and net realized capital gains are determined and
presented in accordance with federal income tax regulations, which may
differ from U.S. generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts at fiscal year end based on their
federal tax-basis treatment; temporary differences do not require
reclassification. Net investment income (loss), net realized gain (loss) and
net assets are not affected by these reclassifications.
Each Fund intends to comply with the requirements of the Internal Revenue
Code, as amended, applicable to regulated investment companies and
distribute all of its taxable income, including any net realized gain on
investments to its shareholders. Therefore, no federal tax provisions are
required. Each Fund is considered a separate entity for tax purposes. The
Funds file U.S. federal and certain state income tax returns. With few
exceptions, the Funds are no longer subject to U.S. federal and state tax
examination by tax authorities for tax years ending before 2004.
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of
such currencies against U.S. dollars on the date of valuation. The Funds do
not isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the changes in the market prices
of securities held at the end of the period. Similarly, the Funds do not
isolate the effect of changes in foreign exchange rates from the changes in
the market prices of portfolio securities sold
70
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
during the period. Realized foreign exchange gains and losses on other
assets and liabilities and change in unrealized foreign exchange gains and
losses on other assets and liabilities include foreign exchange gains and
losses from currency gains or losses between the trade and settlement dates
of securities transactions, the difference between the amounts of interest,
dividends and foreign withholding taxes recorded on the Funds' books and the
U.S. dollar equivalent amounts actually received or paid and changes in the
unrealized foreign exchange gains and losses relating to other assets and
liabilities arising as a result of changes in the exchange rate.
Forward Foreign Currency Contracts: Certain funds may enter into forward
foreign currency contracts ("forward contracts") to attempt to protect
securities and related receivables and payables against changes in future
foreign exchange rates or to enhance return. A forward contract is an
agreement between two parties to buy or sell currency at a set price on a
future date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked to market daily using the
forward rate and the change in market value is recorded by the Fund as
unrealized gain or loss. On settlement date, the Fund records realized
foreign exchange gains or losses when the contract is closed equal to the
difference between the value of the contract at the time it was opened and
the value at the time it was closed. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the
terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. Forward contracts involve
elements of risk in excess of the amounts reflected in the Statement of
Assets and Liabilities. The Fund bears the risk of an unfavorable change in
the foreign exchange rate underlying the forward contract.
Futures Contracts: A futures contract is an agreement between two parties to
buy and sell a financial instrument at a set price on a future date. Upon
entering into a futures transaction, a Fund will be required to segregate an
initial margin payment of cash or other liquid securities with the Futures
Commission Merchant ("the broker"). The Funds' activities in futures
contracts are used primarily for hedging purposes and from time to time for
income enhancement. Futures contracts are conducted through regulated
exchanges that minimize counter-party credit risks. A Funds' participation
in the futures markets involves certain risks, including imperfect
correlation between movements in the price of futures contracts and
movements in the price of the securities hedged or used for cover. Pursuant
to a contract, the Funds agree to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as "variation margin" and are recorded by the
Funds as unrealized appreciation or depreciation. Futures contracts involve
elements of risk in excess of the amount reflected in the Statement of
Assets and Liabilities. When a contract is closed, the Funds record a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
Options: An option is a contract conveying a right to buy or sell a
financial instrument at a specified price during a stipulated period. The
premium paid by a Fund for the purchase of a call or a put option is
included in the Fund's Statement of Assets and Liabilities as an investment
and subsequently marked to market to reflect the current market value of the
option.
When a Fund writes a call or a put option, an amount equal to the premium
received by the Fund is included in the Fund's Statement of Assets and
Liabilities as a liability and is subsequently marked to market to reflect
the current market value of the option written. If an option which the Fund
has written either expires on its stipulated expiration date, or if the Fund
enters into a closing purchase transaction, the Fund realizes a gain (or
loss if the cost of a closing purchase transaction exceeds the premium
received when the option was written) without regard to any unrealized gain
or loss on the underlying security, and the liability related to such
options is extinguished. If a call option which the Fund has written is
exercised, the Fund realizes a capital gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the
premium originally received. If a put option which the Fund has written is
exercised, the amount of the premium originally received reduces the cost of
the security which the Fund purchased upon exercise of the option.
There were no transactions in call and put options written during the year
ended September 30, 2008.
Mortgage-Backed Dollar Rolls: The Balanced Assets Fund may enter into dollar
rolls using "to be announced" ("TBA") mortgage-backed securities ("TBA
Rolls"). The Fund's policy is to record the components of TBA Rolls as
purchase/sale transactions. Any difference between the purchase and sale
price is recorded as a realized gain or loss on the date the transaction is
entered into. Dollar roll transactions involve the risk that the market
value of the securities held by the Fund may decline below the price of the
securities that the Fund has sold but is obligated to repurchase under the
agreement. In the event that the buyer of securities in a dollar roll
transaction files bankruptcy or becomes insolvent, the Fund's use of the
proceeds from the sale of the securities may be restricted pending a
determination by the other party, or its trustee or receiver, whether to
enforce the Fund's obligation to repurchase the securities. The return
earned by the Fund with the proceeds of the dollar roll transaction may not
exceed transaction costs.
71
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Short Sales: All funds may engage in "short sales against the box". A short
sale is against the box to the extent that the Fund contemporaneously owns,
or has the right to obtain without payment, securities identical to those
sold short. In addition, the Disciplined Growth Fund, Value Fund,
International Equity Fund and International Small-Cap Fund may sell a
security it does not own in anticipation of a decline in the market value of
that security ("short sales"). To complete such a transaction, the Fund must
borrow the security to make delivery to the buyer. The Fund then is
obligated to replace the security borrowed by purchasing it at market price
at the time of replacement. The price at such time may be more or less than
the price at which the security was sold by the Fund. Until the security is
replaced, the Fund is required to pay to the lender any dividends or
interest that accrues during the period of the loan. To borrow the security,
the Fund may be required to pay a premium, which would increase the cost of
the security sold. The proceeds of the short sale will be retained by the
broker, to the extent necessary to meet margin requirements, until the short
position is closed out. Until the Fund replaces a borrowed security, the
Fund will maintain daily a segregated account, containing cash or liquid
securities, at such a level that (i) the amount deposited in the account
plus the amount deposited with the broker as collateral will equal the
current value of the security sold short and (ii) the amount deposited in
the segregated account plus the amount deposited with the broker as
collateral will not be less than the market value of the security at the
time it was sold short. Liabilities for securities sold short are reported
at market value in the financial statements. Such liabilities are subject to
off balance sheet risk to the extent of any future increases in market value
of the securities sold short. The ultimate liability for securities sold
short could exceed the liabilities recorded in the Statement of Assets and
Liabilities. The Fund bears the risk of potential inability of the broker to
meet their obligation to perform.
Note 4. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with AIG SunAmerica. Under the Agreement, AIG
SunAmerica provides continuous supervision of a Fund's portfolio and
administers its corporate affairs, subject to general review by the
Trustees. In connection therewith, AIG SunAmerica furnishes the Funds with
office facilities, maintains certain of the Funds' books and records, and
pays the salaries and expenses of all personnel, including officers of the
Funds who are employees of AIG SunAmerica and its affiliates.
The Funds pay AIG SunAmerica a monthly investment advisory and management
fee calculated daily at the following annual percentages of each Fund's
average daily net assets:
Management
Assets Fees
---------------------------- ----------
Blue Chip Growth Fund........ $0 - $350 million 0.75%
(greater than) $350 million 0.70
(greater than) $700 million 0.65
Growth Opportunities Fund+... $0 - $350 million 0.75
(greater than) $350 million 0.70
(greater than) $700 million 0.65
New Century Fund+............ $0 - $350 million 0.75
(greater than) $350 million 0.70
(greater than) $700 million 0.65
Growth and Income Fund....... $0 - $350 million 0.75
(greater than) $350 million 0.70
(greater than) $700 million 0.65
Balanced Assets Fund*........ $0 - $350 million 0.75
(greater than) $350 million 0.70
(greater than) $700 million 0.65
International Equity Fund.... (greater than) $0 1.00
Value Fund................... $0 - $750 million 1.00
(greater than) $750 million 0.95
(greater than) $1.5 billion 0.90
Disciplined Growth Fund...... (greater than) $0 0.85
International Small-Cap Fund. (greater than) $0 1.15
- --------
* On August 29, 2006, AIG SunAmerica agreed to the continuation of a 0.05%
voluntary waiver of the investment advisory fees for the Balanced Assets
Fund. Effective September 1, 2006, AIG SunAmerica agreed to an additional
0.02% waiver of the investment advisory fee for the Fund. Effective October
1, 2006, AIG SunAmerica agreed to reduce the waiver of the investment
advisory fee for the Fund to 0.02%. Effective August 27, 2008, AIG
SunAmerica removed the 0.02% waiver from the Balanced Assets Fund. For the
year ended September 30, 2008, the amount of investment advisory fees waived
for the Balanced Assets Fund was $24,443. This amount is reflected in the
Statement of Operations.
+ Effective September 1, 2008, AIG SunAmerica agreed to a voluntary waiver of
0.02% of the investment advisory fees for the Growth Opportunities Fund and
the New Century Fund. The voluntary waiver may be terminated at any time at
the option of AIG SunAmerica. For the period ended September 30, 2008, the
amount of investment advisory fees waived were $572 and $880 respectively.
These amounts are reflected in the Statement of Operations.
72
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
For the year ended September 30, 2008, AIG SunAmerica earned fees in the
amounts stated in the Statement of Operations.
The International Equity Fund and International Small-Cap Fund are
subadvised by AIG Global Investment Corp. ("AIGGIC") pursuant to a
subadvisory agreement with AIG SunAmerica. AIGGIC is an indirect
wholly-owned subsidiary of AIG and an affiliate of AIG SunAmerica. AIGGIC
receives an annual fee of 0.47% of average daily net assets for the
International Equity Fund and 0.60% of average daily net assets for the
International Small-Cap Fund, which is paid by AIG SunAmerica. For the year
ended September 30, 2008, AIGGIC waived 0.05% of the fee paid by AIG
SunAmerica for the International Small-Cap Fund.
AIG SunAmerica has contractually agreed to waive fees or reimburse expenses
to the extent necessary to cap the Funds' annual fund operating expenses at
the following percentages of each Fund's average net assets. Annual Fund
operating expenses shall not include extraordinary expenses, as determined
under generally accepted accounting principals, or acquired fund fees and
expenses. The contractual expense waivers and fee reimbursements will
continue indefinitely subject to termination by the Trustees, including a
majority of the trustees who are not deemed to be "interested persons" of
the Trust, as defined by Section 2(a)(19) of the 1940 Act ("Disinterested
Trustees").
Fund Percentage
- ---- ----------
Blue Chip Growth Class I........ 1.33%
Growth Opportunities Class I.... 1.33
Growth and Income Class I....... 1.32
Balanced Assets Class I......... 1.33
International Equity Class A.... 1.90
International Equity Class B.... 2.55
International Equity Class C.... 2.55
International Equity Class I.... 1.80
Value Class A................... 1.63
Value Class B................... 2.28
Value Class C................... 2.28
Value Class I................... 1.53
Value Class Z................... 1.06
Disciplined Growth Class A...... 1.45
Disciplined Growth Class B...... 2.10
Disciplined Growth Class C...... 2.10
International Small-Cap Class A. 1.90
International Small-Cap Class B. 2.55
International Small-Cap Class C. 2.55
Further, AIG SunAmerica is voluntarily waiving fees and/or reimbursing
expenses, if necessary, so that the total net expense ratio for the
following classes do not exceed the amounts set forth below. The voluntary
fee waivers and/or expense reimbursements may be terminated at any time at
the option of AIG SunAmerica.
Fund Percentage
- ---- ----------
New Century Class C. 2.14%
For the International Equity Fund, Value Fund, Disciplined Growth Fund, and
International Small-Cap Fund, any voluntary or contractual waivers and/or
reimbursements made by AIG SunAmerica are subject to recoupment from the
Funds within the following two years of making such waivers or
reimbursements, provided that the Funds are able to effect such payment to
AIG SunAmerica and remain in compliance with the foregoing expense
limitations.
73
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
For the period ending September 30, 2008, pursuant to the contractual and
voluntary expense limitations in the above tables AIG SunAmerica has waived
or reimbursed expenses as follows:
Blue Chip Growth Class I........ $ 8,443
Growth Opportunities Class I.... 9,680
New Century Fund Class C........ 16,759
Growth & Income Class I......... 10,198
Balanced Assets Class I......... 9,941
International Equity Class A.... --
International Equity Class B.... 10,239
International Equity Class C.... 10,479
International Equity Class I.... 6,383
Value Fund Class A.............. 108,777
Value Fund Class B.............. 42,127
Value Fund Class C.............. 26,424
Value Fund Class I.............. 4,981
Value Fund Class Z.............. 29,354
Disciplined Growth Class A...... 74,410
Disciplined Growth Class B...... 20,188
Disciplined Growth Class C...... 67,867
International Small-Cap Class A. 136,554
International Small-Cap Class B. 15,787
International Small-Cap Class C. 30,952
For the period ended September 30, 2008, the amounts recouped by the Adviser
are as follows:
International Equity Class A. $ --
International Equity Class B. 927
International Equity Class C. 8,671
International Equity Class I. 405
At September 30, 2008, the amount of expenses previously waived and/or
reimbursed by AIG SunAmerica during the prior two years that remain subject
to recoupment are as follows:
Class
Other Specific
Expenses Expenses
Reimbursed Reimbursed
---------- ----------
International Equity Class A......... $ -- $ --
International Equity Class B......... -- 21,411
International Equity Class C......... -- 8,613
International Equity Class I......... -- 10,889
Value Fund Class A................... 104,894 108,178
Value Fund Class B................... 34,275 60,923
Value Fund Class C................... 22,241 37,715
Value Fund Class I................... 43 17,097
Value Fund Class Z................... 27,309 32,411
Disciplined Growth Class A........... 7,930 145,014
Disciplined Growth Class B........... 2,435 54,866
Disciplined Growth Class C........... 9,283 144,480
International Small-Cap Fund Class A. 124,291 134,827
International Small-Cap Fund Class B. 4,052 34,256
International Small-Cap Fund Class C. 17,935 46,362
74
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
The Trust, on behalf of each Fund, has entered into a Distribution Agreement
with SunAmerica Capital Services, Inc. ("SACS" or the "Distributor")+, an
affiliate of the Adviser. Each Fund has adopted a Distribution Plan on
behalf of each class of shares (other than Class I and Class Z shares) (each
a "Plan" and collectively, the "Plans") in accordance with the provisions of
Rule 12b-1 under the 1940 Act, hereinafter referred to as the "Class A
Plan," "Class B Plan" and "Class C Plan." In adopting the Plans, the
Trustees determined that there was a reasonable likelihood that each such
Plan would benefit the Fund and the shareholders of the respective class.
The sales charge and distribution fees of a particular class will not be
used to subsidize the sale of shares of any other class.
Under the Class A Plan, Class B Plan and Class C Plan, the Distributor
receives a distribution fee from a Fund at an annual rate of 0.10%, 0.75%
and 0.75%, respectively, of the average daily net assets of the Fund's Class
A, Class B and Class C shares to compensate the Distributor and certain
securities firms for providing sales and promotional activities for
distributing that class of shares. The distribution costs for which the
Distributor may be compensated include fees paid to broker-dealers that have
sold Fund shares, commissions and other expenses such as those incurred for
sales literature, prospectus printing and distribution and compensation to
wholesalers. It is possible that in any given year the amount paid to the
Distributor under each Class' Plan may exceed the Distributor's distribution
costs as described above. The Plans provide that the Class A, Class B and
Class C shares of each Fund will pay the Distributor an account maintenance
fee up to an annual rate of 0.25% of the aggregate average daily net assets
of such class of shares for payments to compensate the Distributor and
certain securities firms for account maintenance activities. Accordingly,
for the year ended September 30, 2008, SACS received fees (see Statement of
Operations) based upon the aforementioned rates.
In addition, SACS is paid a fee of 0.25% of average daily net assets of
Class I shares in connection with providing administrative and shareholder
services to Class I shareholders. For the year ended September 30, 2008,
SACS earned fees (see Statement of Operations) based upon the aforementioned
rates.
SACS receives sales charges on each Fund's Class A shares, portions of which
are reallocated to affiliated broker-dealers and non-affiliated
broker-dealers. SACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of each
Fund's Class A, Class B and Class C shares. SACS has advised the Funds that
for the year ended September 30, 2008, the proceeds received from sales (and
paid out to affiliated and non-affiliated broker-dealers) and redemptions
are as follows:
Class A Class B Class C
--------------------------------------------- ---------- ----------
Contingent Contingent Contingent
Affiliated Deferred Deferred Deferred
Sales Broker- Non-affiliated Sales Sales Sales
Fund Charges dealers Broker-dealers Charges Charges Charges
- ---- -------- ---------- -------------- ---------- ---------- ----------
Blue Chip Growth........ $ 47,814 $10,881 $ 30,334 $2,644 $12,445 $ 205
Growth Opportunities.... 26,178 13,802 8,324 329 10,553 301
New Century............. 38,548 17,112 14,821 1 10,779 305
Growth and Income....... 55,064 21,212 25,920 402 21,421 276
Balanced Assets......... 130,898 82,973 29,975 113 14,164 262
International Equity.... 104,417 25,015 64,111 1,138 16,512 2,618
Value................... 61,163 25,910 26,723 -- 39,306 1,080
Disciplined Growth...... 152,959 18,042 112,661 79 9,756 5,272
International Small-Cap. 33,011 12,047 15,807 6 2,195 102
The Trust has entered into a Service Agreement with AIG SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Adviser. Under the Service
Agreement, SAFS performs certain shareholder account functions by assisting
the Funds' transfer agent in connection with the services that it offers to
the shareholders of the Funds. Pursuant to the Service Agreement, the Funds
(except for Class Z shares of the Funds) pay a fee to SAFS for services
rendered based upon an annual rate of 0.22% of average daily net assets. No
portion of this fee is paid or reimbursed by the Class Z shares, however,
Class Z shares pay all direct transfer agency fees and out-of-pocket
expenses relating to Class Z shares. For the year ended September 30, 2008,
the Funds incurred the following expenses which are included in transfer
agent fees payable in the Statement of Asset and Liabilities and in transfer
agent fees and expenses in the Statement of Operations to compensate SAFS
pursuant to the terms of the Service Agreement.
- --------
+ Effective November 15, 2008, AIG SunAmerica Capital Services, Inc. changed
its name to SunAmerica Capital Services, Inc.
75
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Expense Payable At September 30, 2008
-------------------------------- -------------------------------
Fund Class A Class B Class C Class I Class A Class B Class C Class I
- ---- -------- ------- ------- ------- ------- ------- ------- -------
Blue Chip Growth........ $103,505 $24,910 $ 8,546 $ 1,368 $ 7,541 $1,473 $ 565 $100
Growth Opportunities.... 65,302 22,013 12,214 247 4,260 1,262 750 16
New Century............. 146,607 15,931 9,265 -- 8,386 792 505 --
Growth and Income....... 127,455 31,783 42,330 668 9,168 1,891 2,852 50
Balanced Assets......... 240,010 26,369 25,880 1,340 17,351 1,775 1,821 103
International Equity.... 147,043 36,246 51,655 15,387 9,238 1,872 2,931 964
Value................... 219,643 64,217 41,930 65 14,860 4,083 2,714 5
Disciplined Growth...... 64,984 11,338 62,881 -- 4,197 773 3,345 --
International Small-Cap. 55,482 2,265 8,816 -- 3,331 125 454 --
At September 30, 2008, AIG SunAmerica, Inc. an affiliated company of the
Adviser, owned 5.1% of the total outstanding shares of New Century, 17.5% of
International Equity, and 23.5% of Value Fund, respectively.
On February 8, 2008, the Blue Chip Growth Fund and Balanced Assets Fund sold
900 shares and 600 shares, respectively of Allergan, Inc. common stock that
the Funds did not own. Both Funds have an investment restriction that
prohibits them from selling securities they do not own ("short selling").
The short positions were closed on February 8, 2008, resulting in a gain of
$19 and $12, respectively, for the Blue Chip Growth Fund and Balanced Assets
Fund.
On September 22, 2008, American International Group, Inc. ("AIG") the
ultimate parent of AIG SunAmerica, SACS, SAFS and AIGGIC, entered into a
revolving credit facility (the "Credit Facility") and a Guarantee and Pledge
Agreement with the Federal Reserve Bank of New York under the terms of which
AIG will issue a new series of perpetual, non-redeemable Convertible
Participating Serial Preferred Stock (the "Preferred Stock") to a trust that
will hold the Preferred Stock for the benefit of the United States Treasury.
On October 3, 2008, AIG announced that it plans to retain its U.S. property
and casualty and foreign general insurance businesses, and to retain a
continuing ownership interest in its foreign life insurance operations, and
that it is exploring divestiture opportunities for its remaining
high-quality businesses and assets.
Note 5. Expense Reductions
Through expense offset arrangements resulting from broker commission
recapture, a portion of the expenses of the Funds set forth below have been
reduced. For the year ended September 30, 2008, the amount of expense
reductions received by each Fund, used to offset the Fund's non-affiliated
expenses were as follows:
Total Expense
Fund Reductions
- ---- -------------
Blue Chip Growth..... $ 5,629
Growth Opportunities. 85,021
New Century.......... 106,303
Growth and Income.... 32,244
Balanced Assets...... 16,487
International Equity. 1,910
Value................ 57,737
Disciplined Growth... 44,763
Note 6. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the year ended September 30, 2008, were as follows:
Blue Chip Growth New Growth and
Growth Opportunities Century Income Balanced
Fund Fund Fund Fund Assets Fund
----------- ------------- ------------ ------------ ------------
Purchases (excluding U.S. government securities)............ $29,841,412 $197,778,161 $455,481,224 $222,514,092 $143,664,054
Sales and maturities (excluding U.S. government securities). 38,384,064 203,330,803 464,636,219 234,098,087 163,471,832
Purchases of U.S. government securities..................... -- -- -- -- 13,613,123
Sales and maturities of U.S. government securities.......... -- -- -- -- 9,807,775
76
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
International Disciplined International
Equity Value Growth Small-Cap
Fund Fund Fund Fund
------------- ------------ ------------ -------------
Purchases (excluding U.S. government securities)............ $221,385,774 $351,849,772 $418,575,506 $27,323,160
Sales and maturities (excluding U.S. government securities). 239,283,972 388,290,339 418,604,891 29,924,614
Purchases of U.S. government securities..................... -- -- -- --
Sales and maturities of U.S. government securities.......... -- -- -- --
Note 7. Federal Income Taxes
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for federal income tax purposes, including short-term securities
and repurchase agreements, were as follows at September 30, 2008:
Blue Chip Growth New Growth and Balanced
Growth Opportunities Century Income Assets
Fund Fund Fund Fund Fund
------------- ------------- ----------- ------------- ------------
Cost (tax basis)........................... $ 52,663,794 $ 35,105,564 $44,689,376 $ 82,484,278 $119,055,616
============ ============ =========== ============ ============
Appreciation............................... 3,917,063 326,897 619,543 1,326,895 4,315,437
Depreciation............................... (6,713,642) (3,087,638) (3,595,567) (10,342,457) (13,349,369)
------------ ------------ ----------- ------------ ------------
Net unrealized appreciation (depreciation). $ (2,796,579) $ (2,760,741) $(2,976,024) $ (9,015,562) $ (9,033,932)
============ ============ =========== ============ ============
International Disciplined International
Equity Value Growth Small-Cap
Fund Fund Fund Fund
------------- ------------- ----------- -------------
Cost (tax basis)........................... $ 88,555,925 $151,386,586 $39,015,734 $ 24,913,583
============ ============ =========== ============
Appreciation............................... 1,933,270 4,660,123 367,315 279,789
Depreciation............................... (16,870,009) (19,617,032) (3,922,462) (5,906,883)
------------ ------------ ----------- ------------
Net unrealized appreciation (depreciation). $(14,936,739) $(14,956,909) $(3,555,147) $ (5,627,094)
============ ============ =========== ============
The following details the tax basis of distributions as well as the
components of distributable earnings. The tax character of distributions
paid may differ from the character of distributions shown on the Statement
of Changes in Net Assets due to short-term capital gains being treated as
ordinary income for tax purposes. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities due to temporary book/tax differences primarily arising from
wash sales, post October losses and derivative transactions.
For the year ended September 30, 2008
---------------------------------------------------------------------------
Distributable Earnings Tax Distributions
---------------------------------------- ---------------------------------
Long-term
Gains/Capital Unrealized Long-Term
Ordinary Loss Appreciation Ordinary Capital Return of
Fund Income Carryover (Depreciation)* Income Gains Capital
- ---- ---------- ------------- --------------- ----------- ----------- ---------
Blue Chip Growth........ $ -- $ (52,435,231) $ (2,796,579) $ -- $ -- $ --
Growth Opportunities.... -- (186,645,011) (2,760,741) -- -- --
New Century............. -- (92,245,942) (2,976,024) -- -- --
Growth and Income....... 687,448 (31,657,902) (9,015,562) 242,422 -- --
Balanced Assets......... 368,475 (66,959,266) (9,033,932) 2,211,571 -- --
International Equity.... -- -- (14,940,219) 1,052,826 10,274,358 --
Value................... 1,575,013 -- (14,956,909) 19,180,606 13,697,035 --
Disciplined Growth...... -- (15,651,807) (3,554,231) -- -- --
International Small-Cap. -- -- (5,634,308) 86,582 247,600 39,211
- --------
* Unrealized appreciation (depreciation) includes amounts for derivatives
and other assets and liabilities denominated in foreign currency
77
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Tax Distributions
For year ended
September 30, 2007
----------------------
Long-Term
Ordinary Capital
Fund Income Gains
- ---- ---------- -----------
Blue Chip Growth........ $ -- $ --
Growth Opportunities.... -- --
New Century............. -- --
Growth and Income....... -- --
Balanced Assets......... 2,250,950 --
International Equity.... -- --
Value................... 9,883,623 16,743,650
Disciplined Growth...... -- --
International Small-Cap. -- --
For the year ended September 30, 2008, the reclassifications arising from
book/tax differences resulted in increases (decreases) that were primarily
due to net investment losses, treatment of foreign currency, tax treatments
of certain debt obligations, and principal paydown adjustments to the
components of net assets as follows:
Accumulated Accumulated
Undistributed Undistributed
Net Investment Net Realized Capital
Fund Income (Loss) Gain (Loss) Paid-in
- ---- -------------- ------------- ------------
Blue Chip Growth........ $ 527,763 $14,353,880 $(14,881,643)
Growth Opportunities.... 451,595 5,291,580 (5,743,175)
New Century............. 597,975 11,356,943 (11,954,918)
Growth and Income....... -- -- --
Balanced Assets......... 77,785 (71,510) (6,275)
International Equity.... (747,883) 13,154,462 (12,406,579)
Value................... (21,013) 21,013 --
Disciplined Growth...... 365,368 (26) (365,342)
International Small-Cap. 45,756 (6,545) (39,211)
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated, as of September 30, 2008,
which are available to offset future capital gains, if any:
Capital Loss Carryforward
--------------------------------------------------------
Fund 2009 2010 2011 2012 2013
- ---- ----------- ------------ ----------- ---------- --------
Blue Chip Growth........ $ -- $ 10,374,287 $42,060,944 $ -- $ --
Growth Opportunities*... 151,316 121,180,893 65,312,802 -- --
New Century*............ 17,583,650 38,311,136 36,351,156 -- --
Growth and Income....... -- -- 25,935,512 5,722,390 --
Balanced Assets......... -- 7,399,151 55,685,563 3,874,552 --
International Equity.... -- -- -- -- --
Value................... -- -- -- -- --
Disciplined Growth...... -- 10,618,952 4,260,050 594,906 177,899
International Small-Cap. -- -- -- -- --
- --------
* The capital loss carryforwards include realized capital losses from the
acquisition of other funds. These losses may be subject to annual limitation
imposed by the Internal Revenue Code. Therefore, it is possible that not all
of these capital losses will be available for use.
78
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
The Funds indicated below utilized capital loss carryforwards, which offset
net taxable gains realized in the year ended September 30, 2008.
Capital Loss Capital Loss
Carryforward Carryforward
Fund Utilized Expired
- ---- ------------ ------------
Blue Chip Growth........ $ 780,142 $14,353,880
Growth Opportunities.... 1,106,447 5,291,580
New Century............. 1,891,228 11,356,943
Growth and Income....... 1,899,895 --
Balanced Assets......... 1,497,461 --
International Equity.... 1,385,288 12,370,431
Value................... -- --
Disciplined Growth...... 2,959,198 --
International Small-Cap. -- --
Under the current law, capital losses related to securities and foreign
currency realized after October 31 and prior to the Fund's fiscal year end
may be deferred as occurring the first day of the following year. For the
fiscal year ended September 30, 2008, the Funds elected to defer capital
losses as follows:
Deferred
Deferred Post-October
Post-October Currency
Fund Capital Loss Loss
- ---- ------------ ------------
Blue Chip Growth........ $ 441,323 $ --
Growth Opportunities.... 16,533,061 --
New Century............. 39,136,700 --
Growth and Income....... 7,227,294 --
Balanced Assets......... 5,557,234 278
International Equity.... 4,571,658 --
Value................... 13,543,593 --
Disciplined Growth...... 16,433,085 --
International Small-Cap. 4,371,173 --
79
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Note 8. Capital Share Transactions
Transactions in capital shares of each class of each fund were as follows:
Blue Chip Growth Fund
--------------------------------------------------------------------------------------------
Class A Class B
--------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
--------------------- ---------------------- --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ----------- -------- ------------ -------- ----------- -------- ------------
Shares sold (1)(2)(3)(4). 289,921 $ 5,070,645 272,319 $ 4,717,820 54,301 $ 830,023 61,910 $ 927,860
Reinvested dividends..... -- -- -- -- -- -- -- --
Shares redeemed (1)(2)... (451,336) (7,730,963) (656,693) (11,104,067) (343,906) (5,217,068) (449,635) (6,803,173)
-------- ----------- -------- ------------ -------- ----------- -------- ------------
Net increase (decrease).. (161,415) $(2,660,318) (384,374) $ (6,386,247) (289,605) $(4,387,045) (387,725) $ (5,875,313)
======== =========== ======== ============ ======== =========== ======== ============
Blue Chip Growth Fund
--------------------------------------------------------------------------------------------
Class C Class I
--------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
--------------------- ---------------------- --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ----------- -------- ------------ -------- ----------- -------- ------------
Shares sold.............. 68,319 $ 1,087,552 18,808 $ 279,270 14,650 $ 270,801 6,566 $ 112,457
Reinvested dividends..... -- -- -- -- -- -- -- --
Shares redeemed (3)(4)... (82,476) (1,252,219) (104,067) (1,557,478) (15,507) (285,207) (11,604) (197,959)
-------- ----------- -------- ------------ -------- ----------- -------- ------------
Net increase (decrease).. (14,157) $ (164,667) (85,259) $ (1,278,208) (857) $ (14,406) (5,038) $ (85,502)
======== =========== ======== ============ ======== =========== ======== ============
Growth Opportunities Fund
- --------------------------------------------------------------------------------------------
Class A Class B
--------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
--------------------- ---------------------- --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ----------- -------- ------------ -------- ----------- -------- ------------
Shares sold (5)(6)(7)(8). 253,312 $ 4,189,533 467,598 $ 9,161,091 39,899 $ 553,585 57,020 $ 971,620
Reinvested dividends..... -- -- -- -- -- -- -- --
Shares redeemed (5)(6)... (613,549) (9,921,188) (607,841) (11,673,643) (364,166) (5,248,108) (584,520) (10,064,774)
-------- ----------- -------- ------------ -------- ----------- -------- ------------
Net increase (decrease).. (360,237) $(5,731,655) (140,243) $ (2,512,552) (324,267) $(4,694,523) (527,500) $ (9,093,154)
======== =========== ======== ============ ======== =========== ======== ============
- --------
(1)For the year ended September 30, 2008, includes automatic conversion of
213,034 shares of Class B shares in the amount of $3,232,933 to 186,968
shares of Class A shares in the amount of $3,232,933.
(2)For the year ended September 30, 2007, includes automatic conversion of
205,245 shares of Class B shares in the amount of $3,153,549 to 181,415
shares of Class A shares in the amount of $3,153,549.
(3)For the year ended September 30, 2008, includes automatic conversion of
5,104 shares of Class C shares in the amount of $78,117 to 4,448 shares of
Class A shares in the amount of $78,117.
(4)For the year ended September 30, 2007, includes automatic conversion of
17,217 shares of Class C shares in the amount of $262,954 to 15,124 shares
of Class A shares in the amount of $262,954.
(5)For the year ended September 30, 2008, includes automatic conversion of
146,917 shares of Class B shares in the amount of $2,166,396 to 128,971
shares of Class A shares in the amount of $2,166,396.
(6)For the year ended September 30, 2007, includes automatic conversion of
277,289 shares of Class B shares in the amount of $4,814,621 to 244,697
shares of Class A shares in the amount of $4,814,621.
(7)For the year ended September 30, 2008, includes automatic conversion of
9,445 shares of Class C shares in the amount of $129,260 to 8,257 shares of
Class A shares in the amount of $129,260.
(8)For the year ended September 30, 2007, includes automatic conversion of
15,202 shares of Class C shares in the amount of $266,305 to 13,404 shares
of Class A shares in the amount of $266,305.
80
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Growth Opportunities Fund
--------------------------------------------------------------------------------------------
Class C Class I
---------------------------------------------- --------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
---------------------- ---------------------- --------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ -------- ------------ -------- ----------- -------- -----------
Shares sold................... 59,452 $ 756,646 73,251 $ 1,243,056 1,876 $ 30,513 900 $ 17,303
Reinvested dividends.......... -- -- -- -- -- -- -- --
Shares redeemed (1)(2)........ (188,701) (2,713,246) (203,387) (3,485,346) (3,002) (48,708) (17,924) (341,263)
-------- ------------ -------- ------------ -------- ----------- -------- -----------
Net increase (decrease)....... (129,249) $ (1,956,600) (130,136) $ (2,242,290) (1,126) $ (18,195) (17,024) $ (323,960)
======== ============ ======== ============ ======== =========== ======== ===========
New Century Fund
--------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------- --------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
---------------------- ---------------------- --------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ -------- ------------ -------- ----------- -------- -----------
Shares sold (3)(4)(5)......... 177,557 $ 3,209,325 349,824 $ 7,584,889 28,304 $ 451,311 41,725 $ 1,374,288
Shares issued in merger +..... -- -- 456,997 9,556,448 -- -- 378,511 6,906,165
Reinvested dividends.......... -- -- -- -- -- -- -- --
Shares redeemed (3)(4)........ (836,501) (15,340,030) (867,696) (20,403,970) (219,367) (3,484,631) (324,871) (6,113,256)
-------- ------------ -------- ------------ -------- ----------- -------- -----------
Net increase (decrease)....... (658,944) $(12,130,705) (60,875) $ (3,262,633) (191,063) $(3,033,320) 95,365 $ 2,167,197
======== ============ ======== ============ ======== =========== ======== ===========
New Century Fund
----------------------------------------------
Class C
----------------------------------------------
For the For the
year ended year ended
September 30, 2008 September 30, 2007
---------------------- ----------------------
Shares Amount Shares Amount
-------- ------------ -------- ------------
Shares sold................... 33,282 $ 569,190 30,355 $ 1,513,139
Shares issued in merger +..... -- -- 263,342 4,832,027
Reinvested dividends.......... -- -- -- --
Shares redeemed (5)........... (102,735) (1,656,044) (100,822) (1,920,423)
-------- ------------ -------- ------------
Net increase (decrease)....... (69,453) $ (1,086,854) 192,875 $ 4,424,743
======== ============ ======== ============
- --------
(1)For the year ended September 30, 2008, includes automatic conversion of
9,445 shares of Class C shares in the amount of $129,260 to 8,257 shares of
Class A shares in the amount of $129,260.
(2)For the year ended September 30, 2007, includes automatic conversion of
15,202 shares of Class C shares in the amount of $266,305 to 13,404 shares
of Class A shares in the amount of $266,305.
(3)For the year ended September 30, 2008, includes automatic conversion of
77,721 shares of Class B shares in the amount of $1,225,115 to 67,258 shares
of Class A shares in the amount of $1,225,115.
(4)For the year ended September 30, 2007, includes automatic conversion of
165,359 shares of Class B shares in the amount of $3,144,259 to 144,044
shares of Class A shares in the amount of $3,144,259.
(5)For the year ended September 30, 2007, includes automatic conversion of 79
shares of Class C shares in the amount of $1,590 to 69 shares of Class A
shares in the amount of $1,590.
+ See Note 2.
81
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Growth and Income Fund
-------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
------------------------ ------------------------ --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Shares sold (1)(2)(3)(4). 630,796 $ 9,133,076 1,024,726 $ 15,049,599 89,678 $ 1,199,212 88,044 $ 1,200,393
Reinvested dividends..... 14,377 220,109 -- -- -- -- -- --
Shares redeemed (1)(2)... (958,387) (13,836,029) (1,415,515) (20,646,675) (558,857) (7,455,853) (913,913) (12,582,078)
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Net increase (decrease).. (313,214) $ (4,482,844) (390,789) $ (5,597,076) (469,179) $(6,256,641) (825,869) $(11,381,685)
========== ============ ========== ============ ======== =========== ======== ============
Growth and Income Fund
-------------------------------------------------------------------------------------------------
Class C Class I
-------------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
------------------------ ------------------------ --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Shares sold.............. 71,480 $ 957,187 69,560 $ 943,742 5,275 $ 76,070 3,981 $ 57,853
Reinvested dividends..... -- -- -- -- 95 1,451 -- --
Shares redeemed (3)(4)... (386,530) (5,155,170) (585,816) (8,047,218) (4,673) (68,432) (5,169) (76,734)
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Net increase (decrease).. (315,050) $ (4,197,983) (516,256) $ (7,103,476) 697 $ 9,089 (1,188) $ (18,881)
========== ============ ========== ============ ======== =========== ======== ============
Balanced Assets Fund
-------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
------------------------ ------------------------ --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Shares sold (5)(6)(7)(8). 492,914 $ 7,199,045 659,237 $ 9,995,580 95,382 $ 1,386,363 82,301 $ 1,239,592
Reinvested dividends..... 128,624 1,834,569 122,714 1,865,233 8,240 117,639 7,877 119,339
Shares redeemed (5)(6)... (1,444,312) (21,111,948) (1,840,180) (27,750,445) (322,360) (4,705,433) (595,400) (8,989,165)
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Net increase (decrease).. (822,774) $(12,078,334) (1,058,229) $(15,889,632) (218,738) $(3,201,431) (505,222) $ (7,630,234)
========== ============ ========== ============ ======== =========== ======== ============
Balanced Assets Fund
-------------------------------------------------------------------------------------------------
Class C Class I
-------------------------------------------------- ---------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
------------------------ ------------------------ --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Shares sold.............. 42,482 $ 629,344 37,806 $ 565,546 1,809 $ 26,801 2,467 $ 37,069
Reinvested dividends..... 7,970 114,014 6,854 104,202 887 12,606 886 13,500
Shares redeemed (7)(8)... (193,356) (2,838,735) (229,341) (3,460,624) (1,818) (27,036) (14,882) (226,730)
---------- ------------ ---------- ------------ -------- ----------- -------- ------------
Net increase (decrease).. (142,904) $ (2,095,377) (184,681) $ (2,790,876) 878 $ 12,371 (11,529) $ (176,161)
========== ============ ========== ============ ======== =========== ======== ============
- --------
(1)For the year ended September 30, 2008, includes automatic conversion of
227,070 shares of Class B shares in the amount of $3,426,719 to 239,301
shares of Class A shares in the amount of $3,426,719.
(2)For the year ended September 30, 2007, includes automatic conversion of
465,198 shares of Class B shares in the amount of $6,461,560 to 436,352
shares of Class A shares in the amount of $6,461,560.
(3)For the year ended September 30, 2008, includes automatic conversion of
79,802 shares of Class C shares in the amount of $1,070,754 to 74,653 shares
of Class A shares in the amount of $1,070,754.
(4)For the year ended September 30, 2007, includes automatic conversion of
102,570 shares of Class C shares in the amount of $1,439,849 to 96,087
shares of Class A shares in the amount of $1,439,849.
(5)For the year ended September 30, 2008, includes automatic conversion of
110,956 shares of Class B shares in the amount of $1,639,736 to 110,614
shares of Class A shares in the amount of $1,639,736.
(6)For the year ended September 30, 2007, includes automatic conversion of
312,489 shares of Class B shares in the amount of $4,744,038 to 311,322
shares of Class A shares in the amount of $4,744,038.
(7)For the year ended September 30, 2008, includes automatic conversion of
6,528 shares of Class C shares in the amount of $94,078 to 6,522 shares of
Class A shares in the amount of $94,078.
(8)For the year ended September 30, 2007, includes automatic conversion of
9,120 shares of Class C shares in the amount of $137,980 to 9,106 shares of
Class A shares in the amount of $137,980.
82
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
International Equity Fund
----------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
------------------------ ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Shares sold (1)(2)(3)(4).. 873,082 $ 15,209,058 1,360,169 $ 24,122,022 180,778 $ 2,906,684 234,766 $ 3,887,709
Reinvested dividends...... 337,952 6,106,795 -- -- 101,318 1,689,981 -- --
Shares redeemed
(1)(2)(5)(6)............. (1,289,845) (21,458,586) (1,476,609) (26,115,354) (582,664) (8,831,689) (552,783) (9,228,788)
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Net increase (decrease)... (78,811) $ (142,733) (116,440) $ (1,993,332) (300,568) $ (4,235,024) (318,017) $ (5,341,079)
========== ============ ========== ============ ======== ============ ========== ============
International Equity Fund
----------------------------------------------------------------------------------------------------
Class C Class I
-------------------------------------------------- ------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
------------------------ ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Shares sold............... 339,109 $ 5,508,728 340,641 $ 5,685,742 115,757 $ 2,027,150 140,027 $ 2,462,907
Reinvested dividends...... 130,196 2,170,365 -- -- 38,744 706,298 -- --
Shares redeemed
(3)(4)(5)(6)............. (672,025) (9,700,348) (351,299) (5,862,416) (159,912) (2,644,211) (333,525) (5,907,477)
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Net increase (decrease)... (202,720) $ (2,021,255) (10,658) $ (176,674) (5,411) $ 89,237 (193,498) $ (3,444,570)
========== ============ ========== ============ ======== ============ ========== ============
Value Fund
----------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- ------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
------------------------ ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Shares sold (7)(8)(9)(10). 647,141 $ 9,924,293 1,330,412 $ 24,650,750 146,756 $ 2,188,231 305,011 $ 5,377,534
Reinvested dividends...... 1,063,818 16,563,642 704,045 12,539,044 351,095 5,133,009 284,619 4,810,045
Shares redeemed (7)(8).... (2,160,593) (32,186,863) (1,963,578) (36,336,366) (866,926) (12,306,794) (1,074,442) (18,893,815)
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Net increase (decrease)... (449,634) $ (5,698,928) 70,879 $ 853,428 (369,075) $ (4,985,554) (484,812) $ (8,706,236)
========== ============ ========== ============ ======== ============ ========== ============
Value Fund
----------------------------------------------------------------------------------------------------
Class C Class I
-------------------------------------------------- ------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
------------------------ ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Shares sold............... 126,100 $ 1,696,181 234,527 $ 4,126,128 86 $ 1,562 654 $ 12,289
Reinvested dividends...... 203,721 2,978,405 198,577 3,355,958 348 5,401 199 3,531
Shares redeemed (9)(10)... (567,231) (8,063,054) (902,862) (15,771,477) (265) (3,842) (8,370) (162,102)
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Net increase (decrease)... (237,410) $ (3,388,468) (469,758) $ (8,289,391) 169 $ 3,121 (7,517) $ (146,282)
========== ============ ========== ============ ======== ============ ========== ============
- --------
(1)For the year ended September 30, 2008, includes automatic conversion of
201,566 shares of Class B shares in the amount of $3,107,494 to 185,992
shares of Class A shares in the amount of $3,107,494.
(2)For the year ended September 30, 2007, includes automatic conversion of
276,480 shares of Class B shares in the amount of $4,654,844 to 258,279
shares of Class A shares in the amount of $4,654,844.
(3)For the year ended September 30, 2008, includes automatic conversion of
16,006 shares of Class C shares in the amount of $250,119 to 14,757 shares
of Class A shares in the amount of $250,119.
(4)For the year ended September 30, 2007, includes automatic conversion of
35,187 shares of Class C shares in the amount of $594,960 to 32,839 shares
of Class A shares in the amount of $594,960.
(5)For the year ended September 30, 2008, net of redemption fees of $10,729,
$2,743, $3,748, and $1,179 for Class A, Class B, Class C and Class I shares,
respectively.
(6)For the year ended September 30, 2007, net of redemption fees of $2,583,
$771, $904, and $320 for Class A, Class B, Class C and Class I shares,
respectively.
(7)For the year ended September 30, 2008, includes automatic conversion of
204,341 shares of Class B shares in the amount of $3,088,508 to 192,052
shares of Class A shares in the amount of $3,088,508.
(8)For the year ended September 30, 2007, includes automatic conversion of
559,465 shares of Class B shares in the amount of $9,849,109 to 529,830
shares of Class A shares in the amount of $9,849,109.
(9)For the year ended September 30, 2008, includes automatic conversion of
5,802 shares of Class C shares in the amount of $80,487 to 5,438 shares of
Class A shares in the amount of $80,487.
(10)For the year ended September 30, 2007, includes automatic conversion of
7,899 shares of Class C shares in the amount of $138,746 to 7,473 shares of
Class A shares in the amount of $138,746.
83
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Value Fund
-----------------------------------------------
Class Z
-----------------------------------------------
For the For the
year ended year ended
September 30, 2008 September 30, 2007
----------------------- ----------------------
Shares Amount Shares Amount
--------- ------------ -------- ------------
Shares sold............. 357,717 $ 5,554,158 509,315 $ 9,851,572
Reinvested dividends.... 309,158 5,048,549 161,535 2,988,389
Shares redeemed......... (461,438) (7,142,198) (128,127) (2,450,744)
--------- ------------ -------- ------------
Net increase (decrease). 205,437 $ 3,460,509 542,723 $ 10,389,217
========= ============ ======== ============
Disciplined Growth Fund
---------------------------------------------------------------------------------------------
Class A Class B
----------------------------------------------- --------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
----------------------- ---------------------- --------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
--------- ------------ -------- ------------ -------- ----------- -------- -----------
Shares sold (1)(2)...... 1,241,974 $ 20,161,048 532,983 $ 7,889,774 124,724 $ 1,851,127 24,300 $ 356,197
Reinvested dividends.... -- -- -- -- -- -- -- --
Shares redeemed (1)(2).. (918,848) (13,537,356) (776,777) (11,139,424) (102,038) (1,489,966) (422,344) (5,886,295)
--------- ------------ -------- ------------ -------- ----------- -------- -----------
Net increase (decrease). 323,126 $ 6,623,692 (243,794) $ (3,249,650) 22,686 $ 361,161 (398,044) $(5,530,098)
========= ============ ======== ============ ======== =========== ======== ===========
Disciplined Growth Fund
-----------------------------------------------
Class C
-----------------------------------------------
For the For the
year ended year ended
September 30, 2008 September 30, 2007
----------------------- ----------------------
Shares Amount Shares Amount
--------- ------------ -------- ------------
Shares sold............. 672,443 $ 10,787,226 158,305 $ 2,312,884
Reinvested dividends.... -- -- -- --
Shares redeemed......... (847,217) (12,061,646) (559,493) (7,777,003)
--------- ------------ -------- ------------
Net increase (decrease). (174,774) $ (1,274,420) (401,188) $ (5,464,119)
========= ============ ======== ============
- --------
(1)For the year ended September 30, 2008, includes automatic conversion of
27,497 shares of Class B shares in the amount of $437,155 to 26,202 shares
of Class A shares in the amount of $437,155.
(2)For the year ended September 30, 2007, includes automatic conversion of
285,157 shares of Class B shares in the amount of $3,980,961 to 273,229
shares of Class A shares in the amount of $3,980,961.
84
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
International Small-Cap Fund
-----------------------------------------------------------------------------------
Class A Class B
------------------------------------------- --------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2008 September 30, 2007 September 30, 2008 September 30, 2007
--------------------- -------------------- ------------------ ------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ----------- ------- ----------- ------- --------- ------- ---------
Shares sold (3)(4)........... 90,461 $ 1,142,820 335,947 $ 4,376,150 26,818 $ 324,786 43,182 $ 571,843
Reinvested dividends......... 21,169 275,413 -- -- 949 12,228 -- --
Shares redeemed (3)(4)(5)(6). (296,407) (3,416,464) (83,528) (1,082,480) (35,785) (405,992) (11,022) (145,437)
-------- ----------- ------- ----------- ------- --------- ------- ---------
Net increase (decrease)...... (184,777) $(1,998,231) 252,419 $ 3,293,670 (8,018) $ (68,978) 32,160 $ 426,406
======== =========== ======= =========== ======= ========= ======= =========
International Small-Cap Fund
-------------------------------------------
Class C
-------------------------------------------
For the For the
year ended year ended
September 30, 2008 September 30, 2007
--------------------- --------------------
Shares Amount Shares Amount
-------- ----------- ------- -----------
Shares sold.................. 50,457 $ 605,472 152,986 $ 2,062,450
Reinvested dividends......... 4,084 52,562 -- --
Shares redeemed (5)(6)....... (172,747) (1,865,760) (72,183) (878,788)
-------- ----------- ------- -----------
Net increase (decrease)...... (118,206) $(1,207,726) 80,803 $ 1,183,662
======== =========== ======= ===========
- --------
(3)For the year ended September 30, 2008, includes automatic conversion of
3,459 shares of Class B shares in the amount of $40,920 to 3,421 shares of
Class A shares in the amount of $40,920.
(4)For the year ended September 30, 2007, includes automatic conversion of
6,170 shares of Class B shares in the amount of $82,165 to 6,131 shares of
Class A shares in the amount of $82,165.
(5)For the year ended September 30, 2008, net of redemption fees of $1,750,
$71, and $290 for Class A, Class B, and Class C shares, respectively.
(6)For the year ended September 30, 2007, net of redemption fees of $1,504,
$47, and $218 for Class A, Class B, and Class C shares, respectively.
85
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
Note 9. Line of Credit
The AIG SunAmerica Family of Mutual Funds has established a $75 million
committed and $50 million uncommitted line of credit with State Street Bank
and Trust Company, the Funds' custodian. Interest is currently payable at
the Federal Funds Rate plus 50 basis points on the committed line and State
Street Bank and Trust Company's discretionary bid rate on the uncommitted
line of credit. There is also a commitment fee of 10 basis points per annum
on the daily unused portion of the committed line of credit which is
included in other expenses on the Statement of Operations. Borrowings under
the line of credit will commence when the respective Fund's cash shortfall
exceeds $100,000. For the year ended September 30, 2008, the following Funds
had borrowings:
Days Interest Average Weighted
Portfolio Outstanding Charges Debt Average
Growth and Income..... 1 $ 130 $1,287,383 3.63%
Balanced Assets....... 6 427 480,844 5.32
International Equity.. 8 719 636,517 4.84
Disciplined Growth.... 62 7,443 1,524,394 2.99
International
Small-Cap............ 31 1,155 393,974 3.68
At September 30, 2008, there were no borrowings outstanding.
Note 10. Interfund Lending Agreement
Pursuant to exemptive relief granted by the SEC, the Funds are permitted to
participate in an interfund lending program among investment companies
advised by AIG SunAmerica or an affiliate. The interfund lending program
allows the participating Funds to borrow money from and loan money to each
other for temporary or emergency purposes. An interfund loan will be made
under this facility only if the participating Funds receive a more favorable
interest rate than would otherwise be available from a typical bank for a
comparable transaction. For the year ended September 30, 2008, none of the
Funds participated in this program.
Note 11. Trustees Retirement Plan
The Trustees of the Trust have adopted the AIG SunAmerica Disinterested
Trustees' and Directors' Retirement Plan (the "Retirement Plan") effective
January 1, 1993, as amended December 9, 2006, for the unaffiliated Trustees.
The Retirement Plan provides generally that an unaffiliated Trustee may
become a participant ("Participant") in the Retirement Plan if he or she has
at least 10 years of consecutive service as a Disinterested Trustee of any
of the adopting AIG SunAmerica mutual funds (the "Adopting Funds") or has
attained the age of 60 while a Trustee and completed five (5) consecutive
years of service as a Trustee of any Adopting Fund (an "Eligible Trustee").
Pursuant to the Retirement Plan, an Eligible Trustee may receive benefits
upon (i) his or her death or disability while a Trustee or (ii) the
termination of his or her tenure as a Trustee, other than removal for cause
from each of the Adopting Funds with respect to which he or she is an
Eligible Trustee.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Trustee and Participant, each Eligible Trustee
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Trustee of each
Adopting Fund for the calendar year in which such birthday occurs. In
addition, an amount equal to 8.50% of any amounts credited under the
preceding statement during prior years is added to each Eligible Trustee's
account. The rights of any Participant to benefits under the Retirement Plan
shall be an unsecured claim against the assets of the Adopting Funds. An
Eligible Trustee may receive any benefits payable under the Retirement Plan,
at his or her election, either in one lump sum or in up to 15 annual
installments. Any undistributed amounts shall continue to accrue interest at
8.50%.
86
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2008 -- (continued)
The following amounts for the Retirement Plan Liabilities are included in
the Trustee fees and expenses payable line on the Statement of Assets and
Liabilities and the amounts for the Retirement Plan Expenses are included in
the Trustees' fees and expenses line on the Statement of Operations.
Retirement Plan Retirement Plan Retirement Plan
Liability Expense Payments
--------------- --------------- ---------------
Fund As of September 30, 2008
- ---- -----------------------------------------------
Blue Chip Growth............... $27,691 $1,458 $2,055
Growth Opportunities........... 23,985 1,188 1,525
New Century.................... 47,350 1,868 3,777
Growth and Income.............. 38,061 2,182 2,172
Balanced Assets................ 74,220 3,098 5,942
International Equity........... 19,762 2,653 1,139
Value.......................... 34,774 4,352 1,838
Disciplined Growth............. 11,685 1,477 543
International Small-Cap Equity. 858 608 --
Note 12. Investment Concentration
Some of the Funds may invest internationally, including in "emerging market"
countries. These securities may be denominated in currencies other than U.S.
dollars. While investing internationally may reduce your risk by increasing
the diversification of your investment, the value of your investment may be
affected by fluctuating currency values, changing local and regional
economic, political and social conditions, and greater market volatility. In
addition, foreign securities may not be as liquid as domestic securities.
These risks are primary risks of the International Equity Fund and
International Small-Cap Fund. At September 30, 2008, the International
Equity Fund had approximately 15% and the International Small-Cap Fund had
approximately 29% and 27% of its net assets invested in equity securities of
companies domiciled in Japan and United Kingdom, respectively.
Note 13. Other Matters
On December 31, 2007 Ernst & Young, LLP ("E&Y") resigned as the independent
registered public accounting firm of the Equity Funds. On March 5, 2008, the
Board of Trustees of the Equity Funds selected PricewaterhouseCoopers, LLP
as the new independent registered public accounting firm for the Equity
Funds.
E&Y's reports on the Equity Fund's financial statements for the two most
recent fiscal years contained no adverse opinion or disclaimer of opinion,
and were not qualified or modified as to uncertainty, audit scope or
accounting principles. During the period E&Y was engaged, there were no
disagreements with E&Y on any matter of accounting principles, financial
statement disclosure or auditing scope or procedures, which disagreements,
if not resolved to the satisfaction of E&Y, would have caused it to make
reference to the subject matter of the disagreements in connection with its
reports on the Equity Fund's financial statements.
87
SunAmerica Equity Funds
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of SunAmerica Equity Funds:
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 each of the nine
funds constituting SunAmerica Equity Funds, (hereafter referred to as the
"Trust") at September 30, 2008, the results of each of their operations, the
changes in each of their net assets and the financial highlights for the year
then ended, 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 September 30, 2008 by correspondence with the custodian and
brokers, provides a reasonable basis for our opinion. The statements of changes
in net assets for each of the funds of the Trust for the year ended
September 30, 2007 and the financial highlights for each of the periods ended
on or before September 30, 2007 were audited by another independent registered
public accounting firm whose report, dated November 21, 2007, expressed an
unqualified opinion on those statements and financial highlights.
PricewaterhouseCoopers LLP
Houston, Texas
November 25, 2008
88
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2008 -- (unaudited)
Approval of the Investment Advisory and Management Agreement and Subadvisory
Agreement
The Board of Trustees (the "Board," the members of which are referred to as
"Trustees") of the Trust, including the Disinterested Trustees of the Trust or
its Funds, AIG SunAmerica or "AIGGIC", approved the continuation of the
Agreement between the Trust, on behalf of the Funds, and AIG SunAmerica for a
one-year period ending August 31, 2009 at an in-person meeting held on August
26-27, 2008. The Trust currently consists of nine separate Funds, including the
Balanced Assets Fund, Blue Chip Growth Fund, Disciplined Growth Fund, Growth
and Income Fund, Growth Opportunities Fund, International Equity Fund,
International Small-Cap Fund, New Century Fund and Value Fund. At this same
meeting, the Board also approved the continuation of the Subadvisory Agreement
between AIG SunAmerica and AIGGIC (the "Subadvisory Agreement") with respect to
the International Equity Fund and the International Small-Cap Fund for a
one-year period ending August 31, 2009.
In accordance with Section 15(c) of the 1940 Act, the Board requested and AIG
SunAmerica and AIGGIC, where applicable, provided materials relating to the
Board's consideration of whether to approve the continuation of the Advisory
Agreement and Subadvisory Agreement. These materials included (a) a summary of
the services provided by AIG SunAmerica and its affiliates to the Funds; (b)
information independently compiled and prepared by Lipper, Inc. ("Lipper") on
Fund fees and expenses, and the investment performance of the Fund as compared
with a peer group of funds; (c) information on the profitability of AIG
SunAmerica, AIGGIC and their affiliates, a discussion of any indirect benefits;
(d) a report on economies of scale; (e) a discussion on general compliance
policies and procedures; (f) a summary of brokerage and soft dollar practices;
(g) a discussion of the key personnel of AIG SunAmerica, AIGGIC and their
affiliates; and (h) an internal comparison of management fees received for
other mutual funds and accounts with similar investment objectives and
strategies for which AIG SunAmerica and AIGGIC serve as adviser or subadviser,
as applicable.
In determining whether to approve the continuation of the Advisory Agreement
and Subadvisory Agreement, the Board, including Disinterested Trustees,
considered the following information:
Nature, Extent and Quality of Services Provided by AIG SunAmerica and AIGGIC.
The Board, including the Disinterested Trustees, considered the nature, quality
and extent of services to be provided by AIG SunAmerica and AIGGIC. The Board
noted that the services include acting as investment manager and adviser to the
Funds, managing the daily business affairs of the Funds, and obtaining and
evaluating economic, statistical and financial information to formulate and
implement investment policies. Additionally, the Board observed that AIG
SunAmerica would provide office space, accounting, legal, and compliance,
clerical and administrative services and has authorized any of its officers and
employees, if elected, to serve as officers or trustees of the Funds without
compensation. Finally, the Board noted that AIG SunAmerica is responsible for
monitoring and reviewing the activities of affiliated and unaffiliated
third-party service providers, including AIGGIC. In addition to the quality of
the advisory services, the Board considered the quality of the administrative
and non-investment advisory services provided to the Funds pursuant to the
Advisory Agreement and noted that such services include (i) preparing
disclosure documents, such as the prospectus, the statement of additional
information and shareholder reports; (ii) assisting with daily accounting and
pricing; (iii) organizing Board meetings and preparing the materials for such
Board meetings; (iv) providing legal and compliance support; and (v) performing
other administrative functions necessary for the operation of the Funds, such
as tax reporting and fulfilling regulatory filing requirements.
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, analysts and other personnel; (ii) AIG SunAmerica exhibited a high
level of diligence and attention to detail in carrying out its advisory and
other 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
89
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2008 -- (unaudited)
(continued)
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 June 30, 2008,
AIG SunAmerica managed, advised an/or administered approximately $49.7 billion
in assets. The Board also considered AIG SunAmerica's code of ethics, and that
it has developed internal procedures, adopted by the Board, for monitoring
compliance with the investment objectives, policies and restrictions of the
Funds as set forth in the Fund's prospectus. Additionally, the Board considered
AIG SunAmerica's compliance and regulatory history.
With respect to the International Equity Fund and the International Small-Cap
Fund, for which AIG SunAmerica has delegated daily investment management
responsibilities to AIGGIC, the Board considered the nature, quality and extent
of subadvisory services provided by AIGGIC. The Board observed that AIGGIC is
responsible for providing investment management services, including investment
research, advice and supervision, and determining which securities will be
purchased or sold by each of the International Equity Fund and International
Small-Cap Fund, subject to the oversight and review of AIG SunAmerica. The
Board reviewed AIGGIC's history, structure, size, visibility and resources,
which are needed to attract and retain highly qualified investment
professionals. The Board reviewed the personnel that are responsible for
providing subadvisory services to the International Equity Fund and
International Small-Cap Fund and concluded, based on their experience with
AIGGIC, that: (i) AIGGIC is able to retain high quality portfolio managers and
other investment personnel; (ii) AIGGIC exhibited a high level of diligence and
attention to detail in carrying out its responsibilities under the Subadvisory
Agreement; and (iii) AIGGIC had been responsive to requests of the Board and of
AIG SunAmerica. The Board considered that AIGGIC has developed internal
policies and procedures for monitoring compliance with the investment
objectives, policies and restrictions of the International Equity Fund and the
International Small-Cap Fund as set forth in the Prospectus. The Board also
considered AIGGIC's code of ethics, compliance and regulatory history. The
Board concluded that the nature and extent of services to be provided by AIGGIC
under the Subadvisory Agreement were reasonable and appropriate in relation to
the subadvisory fees and that the quality of services continues to be high.
Investment Performance. The Board, including the Disinterested Trustees, also
considered the investment performance of AIG SunAmerica and AIGGIC with respect
to the Funds. In connection with its review, the Board received and reviewed
information regarding the investment performance of the Funds as compared to
each Fund's peer group ("Peer Group") and/or peer universe ("Peer Universe") as
independently determined by Lipper and to an appropriate index or combination
of indices, including the Funds' benchmarks. The Board was provided with a
description of the methodology used by Lipper to select the funds in the Peer
Groups and Universes. The Board also noted that it regularly reviews the
performance of the Funds throughout the year. The Board noted that, while it
monitors performance of the Funds closely, it generally attaches more
importance to performance over relatively long periods of time, typically three
to five years.
In preparation for the August 26-27, 2008 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 May 31, 2008. The Board noted
that it was also provided with a supplemental Lipper performance report for the
periods ended June 30, 2008. In addition, the Board received a report prepared
by AIG SunAmerica that detailed the Funds' performance for the three- and
six-month periods ended June 30, 2008.
Specifically, the Board considered that the Disciplined Growth Fund ranked in
the first quintile of its Peer Group for the one- and three-year periods ended
May 31, 2008 and ranked in the second quintile for the five-year period. The
Board noted that it was pleased with the Fund's strong performance results for
the periods ended May 31, 2008 as the changes to the Fund's investment
objective, principal investment strategy and principal investment techniques
that were implemented in 2007 continue to be realized. The Board noted,
however, that the Fund's performance during June 2008 declined somewhat. The
Board then considered that the Value Fund ranked in the third quintile of its
Peer Group for the one-, three- and five-year periods ended May 31, 2008. The
Board noted that the Fund outperformed its benchmark index for the three
month-, one-, three-, five and ten-year periods ended June 30, 2008. The Board
also noted that the Fund was the top-ranked Fund in its Peer Group for the
ten-year period ended May 31, 2008.
The Board further considered that the Growth and Income Fund ranked in the
fourth and third quintiles of its Peer Group during the three- and five-year
periods ended May 31, 2008, respectively; however, the Board noted the Fund's
strong short- and long-term
90
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2008 -- (unaudited)
(continued)
performance. The Board noted, however, that the Fund's performance during June
2008 declined somewhat. Specifically, the Board noted that the Fund ranked in
the second and first quintiles for the one- and ten-year periods. The Board
then considered that the Blue Chip Growth Fund ranked in the third quintile of
its Peer Group during the one- and five-year periods ended May 31, 2008 and in
the fourth quintile during the three-year period. The Board noted that the Fund
outperformed its benchmark index for the three month-, one year- and three-year
periods ended June 30, 2008.
The Board considered that the Balanced Assets Fund ranked in the fifth quintile
of its Peer Group during the one-, three-, five- and ten-year periods ended May
31, 2008. The Board noted that the Fund's performance does not meet the Board's
expectations, but that results for the three months ended June 30, 2008 were
encouraging. The Board then considered that the Growth Opportunities Funds
ranked in the fifth quintile of its Peer Group for the one-, three and
five-year periods and ranked in the third quintile for the three-year period
ended May 31, 2008. The Board considered that the New Century Fund ranked in
the fifth quintile of its Peer Group for the one-, three- and five-year periods
ended May 31, 2008. The Board noted that the Balanced Assets, Growth
Opportunities and New Century Fund's performance does not meet the Board's
expectations. AIG SunAmerica noted that it was working with each Fund's
portfolio manager and analysts in an effort to improve performance. The Board
noted that it will continue to carefully monitor and discuss the Funds'
performance with AIG SunAmerica.
The Board then considered the performance of the Funds subadvised by AIGGIC,
the International Equity and International Small-Cap Funds. The Board
considered that the International Equity Fund ranked in the first, second and
first quintiles of its Peer Group for the one-, three- and five-year periods
ended May 31, 2008, respectively. The Board noted that it was pleased with the
Fund's short-term and long-term performance. The Board also noted that the Fund
demonstrated strong results for the three months ended June 30, 2008.
Additionally, the Board considered the performance of the International
Small-Cap Fund, noting that it has only completed two full years ended May 31,
2008. The Board noted that the Fund had a relatively small Peer Group; however,
the Fund ranked in the fourth quintile of its Peer Universe for the one- and
two-year periods ended May 31, 2008.
The Board noted that certain Funds continued to underperform and that the Board
would continue to monitor performance on an ongoing basis in connection with
its general oversight of the Funds and in connection with its consideration of
the Funds' advisory and subadvisory agreements. The Board discussed its
concerns regarding the performance of certain Funds with management of AIG
SunAmerica and noted that the underperformance of the Growth Opportunities Fund
and New Century Fund were of particular concern. In light of these performance
concerns, AIG SunAmerica agreed to a voluntary waiver of its management fee in
the amount of 0.02% of average daily net assets with respect to these two
Funds. The Board noted that the waivers may be discontinued at any time at the
option of AIG SunAmerica although AIG SunAmerica anticipated removing the
voluntary waivers only in the event of improved performance and after
consulting with the Board.
Consideration of the Management Fees and Subadvisory Fees and the Cost of the
Services and Profits to be Realized by AIG SunAmerica and AIGGIC and their
Affiliates from the Relationship with the Funds. The Board, including the
Disinterested Trustees, received and reviewed information regarding the fees to
be paid by the Funds to AIG SunAmerica pursuant to the Advisory Agreement and
the fees paid by AIG SunAmerica to AIGGIC pursuant to the Subadvisory
Agreement. The Board examined this information in order to determine the
reasonableness of the fees in light of the nature and quality of services to be
provided and any potential additional benefits to be received by AIG
SunAmerica, AIGGIC or their affiliates in connection with providing such
services to the Funds.
To assist in analyzing the reasonableness of the management fee for each of the
Funds, the Board received reports independently prepared by Lipper. The reports
showed comparative fee information for each Fund's Peer Group and/or Peer
Universe. In considering the reasonableness of the management fee to be paid by
each Fund to AIG SunAmerica, the Board reviewed a number of expense
comparisons, including: (i) contractual and actual management fees; and (ii)
actual total operating expenses. In considering each Fund's total operating
expenses, the Board analyzed the level of fee waivers and expense
reimbursements and the net expense caps contractually agreed upon by AIG
SunAmerica with respect to each class of the International Equity Fund, Value
Fund, Disciplined Growth Fund and International Small-Cap Fund, as well as the
Class I shares of the Blue Chip Growth Fund, Growth Opportunities Fund, Growth
and Income Fund and Balanced Assets Fund. The Board compared each Fund's net
expense ratio to those of other funds within its Peer Group and/or Peer
Universe as a guide to help assess the reasonableness of the Fund's management
fee for certain Funds. 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,
91
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2008 -- (unaudited)
(continued)
however, that the comparative fee information provided by Lipper as a whole was
useful in assessing whether AIG SunAmerica was providing services at a cost
that was competitive with other, similar funds. The Board also considered
advisory fees received by AIG SunAmerica with respect to other mutual funds and
accounts with similar investment strategies to the Funds. The Board noted the
management fee paid by the Funds were reasonable as compared to the fees AIG
SunAmerica was receiving from other mutual funds and accounts for which it
serves as adviser or subadviser.
The Board also received and reviewed information regarding the fees paid by AIG
SunAmerica to AIGGIC pursuant to the Subadvisory Agreement. To assist in
analyzing the reasonableness of the subadvisory fees, the Board received a
report independently prepared by Lipper. The report showed comparative fee
information of each Fund's Peer Group that the Trustees used as a guide to help
assess the reasonableness of the subadvisory fees. The Trustees noted that Peer
Group information as a whole was useful in assessing whether AIGGIC was
providing services at a cost that was competitive with other similar funds. The
Trustees also considered that the subadvisory fees are paid by AIG SunAmerica
out of its management fee and not by the Funds, and that subadvisory fees may
vary widely within a Peer Group for various reasons, including market pricing
demands, existing relationships, experience and success, and individual client
needs. The Board further considered the amount of subadvisory fees paid out by
AIG SunAmerica and the amount of the management fees which it retained. The
Board also considered advisory fees received by AIGGIC with respect to other
mutual funds and accounts with similar investment strategies to the
International Equity Fund and International Small-Cap Fund. The Board noted
that the subadvisory fees paid by AIG SunAmerica to AIGGIC were reasonable as
compared to fees AIGGIC receives for other mutual funds and accounts for which
it serves as adviser or subadviser.
The Board also considered AIG SunAmerica's profitability and the benefits AIG
SunAmerica and its affiliates received from its relationship with the Funds.
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 on a Fund by Fund basis.
The Board considered the profitability of AIG SunAmerica under the Advisory
Agreement, and considered the profitability of AIG SunAmerica's affiliates
under the Rule 12b-1 Plans, Service Agreements, and Administrative and
Shareholder Agreements. Additionally, the Board considered whether AIG
SunAmerica, AIGGIC and its affiliates received any indirect benefits from the
relationship with the Funds. Specifically, the Board observed that AIG Federal
Savings Bank, an affiliate of AIG SunAmerica and AIGGIC, serves as custodian
with respect to certain shareholder retirement accounts that are administered
by AIG SunAmerica and receives a fee payable by the qualifying shareholders.
The Board further considered whether there were any collateral or "fall-out"
benefits that AIG SunAmerica and its affiliates may derive as a result of their
relationship with the Funds. The Board noted that AIG SunAmerica believes that
any such benefits are de minimis and do not impact the reasonableness of the
management fees.
The Board also reviewed AIGGIC's financial statements and considered whether
AIGGIC had the financial resources necessary to attract and retain high quality
investment management personnel and to continue to provide the high quality of
services that it had provided to the International Equity Fund and
International Small-Cap Fund to date.
The Board concluded that AIG SunAmerica and AIGGIC had the financial resources
necessary to perform their obligations under the Advisory Agreement and
Subadvisory Agreement and to continue to provide the Funds with the high
quality services that they had provided in the past. The Board also concluded
that the management fee and subadvisory fees were reasonable in light of the
factors discussed above.
Economies of Scale. The Board, including the Disinterested Trustees, considered
whether the shareholders would benefit from economies of scale and whether
there was potential for future realization of economies with respect to the
Funds. The Board considered that as a result of being part of the AIG
SunAmerica fund complex, the Funds share common resources and may share certain
expenses, and if the size of the complex increases, each Fund could incur lower
expenses than they otherwise would achieve as stand-alone entities. The Board
also considered the anticipated efficiencies in the processes of AIG SunAmerica
as it adds labor and capital to expand the scale of operations. The Board also
took into account that the Blue Chip Growth Fund, Growth Opportunities Fund,
New Century Fund, Balanced Assets Fund, Growth and Income Fund, and Value Fund
had management fee arrangements that included breakpoints that will adjust the
fee downward as the size of the Fund increases, thereby allowing the
shareholders to
92
SunAmerica Equity Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2008 -- (unaudited)
(continued)
potentially participate in any economies of scale. The Board further noted
that, with the exception of the New Century Fund, AIG SunAmerica has agreed to
contractually cap the total annual operating expenses of one or more classes of
the Funds, at certain levels. The Board observed that those expense caps
benefited shareholders by keeping total fees down even in the absence of
breakpoints or economies of scale. The Board concluded that the Funds'
management fee structure was reasonable and that it would continue to review
fees in connection with the renewal of the Advisory Agreement, including
whether the implementation of additional breakpoints would be appropriate in
the future due to an increase in asset size or otherwise.
The Board did not review specific information regarding whether there have been
economies of scale with respect to AIGGIC's management of the Funds because it
regards that information as less relevant at the subadviser level. Rather, the
Board considered information regarding economies of scale in the context of the
renewal of the Advisory Agreement.
Other Factors. In consideration of the Advisory Agreement and Subadvisory
Agreement, the Board also received information regarding AIG SunAmerica's and
AIGGIC's brokerage and soft dollar practices. The Board considered that AIG
SunAmerica and AIGGIC are responsible for decisions to buy and sell securities
for the portfolios they manage, selection of broker-dealers and negotiation of
commission rates. The Board noted that they receive reports from AIG SunAmerica
and from an independent third party that included information on brokerage
commissions and execution throughout the year and that commissions paid had
generally been reasonable and the quality of brokerage execution had generally
been high. The Board also considered the benefits AIG SunAmerica and AIGGIC
derive from their soft dollar arrangements, including arrangement under which
brokers provide brokerage and/or research services to AIG SunAmerica and/or
AIGGIC in return for allocating brokerage.
Conclusion. After a full and complete discussion, the Board approved the
Advisory Agreement and the Subadvisory Agreement with respect to the
International Equity Fund and International Small-Cap Fund, each for a one-year
period ending August 31, 2009. Based upon their evaluation of all these factors
in their totality, the Board, including the Disinterested Trustees, was
satisfied that the terms of the Advisory Agreement and Subadvisory Agreement
were fair and reasonable and in the best interests of the Funds and the Funds'
shareholders. In arriving at a decision to approve the Advisory Agreement and
Subadvisory Agreement, the Board did not identify any single factor or group of
factors as all-important or controlling, but considered all factors together.
The Disinterested Trustees were also assisted by the advice of independent
counsel in making this determination.
93
SunAmerica Equity Funds
TRUSTEE AND OFFICER INFORMATION -- September 30, 2008 -- (unaudited)
The following table contains basic information regarding the Trustees and
Officers that oversee operations of the Funds and other investment companies
within the Fund complex.
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
- ----------------------- ---------- -------------- ------------------------------ ------------- ------------------------------
Disinterested Trustees
Jeffrey S. Burum Trustee 2004-Present Founder and Chairman of 38 None
DOB: February 27, 1963 National Community
Renaissance (1993 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 Trustee 2001-Present Retired. 87 Director, Belo Corp. (1992 to
DOB: October 6, 1945 present); Director, Sysco
Corp. (1996 to present);
Director, Luby's, Inc. (1998
to present).
William F. Devin Trustee 2001-Present Retired. 88 Director, Boston Options
DOB: December 30, 1938 Exchange (2001-present).
Samuel M. Eisenstat Chairman 1986-Present Attorney, solo practitioner. 48 Director, North European Oil
DOB: March 7, 1940 of the Royal Trust.
Board
Stephen J. Gutman Trustee 1986-Present Senior Associate, Corcoran 48 None
DOB: May 10, 1943 Group (Real Estate) (2003 to
present); President and
Member of Managing
Directors, Beau Brummell
Soho LLC (licensing of
menswear specialty retailing
and other activities)
(1988 to present).
William J. Shea Trustee 2004-Present Managing Partner, DLB 48 Chairman of the Board, Royal
DOB: February 9, 1948 Capital, LLC (Private Equity) and SunAlliance U.S.A., Inc.
(2006 to present) President (2005 to present); Director,
and CEO, Conseco, Inc. Boston Private Financial
(Financial Services) (2001 to Holdings (2004 to present).
2004); Chairman of the Board
of Centennial Technologies,
Inc. (1998 to 2001).
Interested Trustee
Peter A. Harbeck(3) Trustee 1995-Present President, CEO and Director, 98 None
DOB: January 23, 1954 AIG SunAmerica. (1995 to
present); Director,
SunAmerica Capital Services,
Inc. ("SACS") (1993 to
present) President and CEO,
AIG Advisor Group, Inc.
(2004 to present).
94
SunAmerica Equity Funds
TRUSTEE AND OFFICER INFORMATION -- September 30, 2008 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
- ----------------------- ----------- -------------- ------------------------------ ------------- -------------------
Officers
John T. Genoy** President 2007-Present Chief Financial Officer, AIG N/A N/A
DOB: November 8, 1968 SunAmerica (2002 to
present); Senior Vice
President, AIG SunAmerica
(2003 to present); Chief
Operating Officer, AIG
SunAmerica (2006
to present).
Donna M. Handel Treasurer 2002-Present Senior Vice President, AIG N/A N/A
DOB: June 25, 1966 SunAmerica (2004 to
present); Vice President, AIG
SunAmerica (1997 to
December 2004).
Gregory N. Bressler Secretary 2005-Present Senior Vice President and N/A N/A
DOB: November 17, 1966 and Chief General Counsel, AIG
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 LLC (2002 to
2004).
James Nichols Vice 2006-present Director, President and CEO, N/A N/A
DOB: April 7, 1966 President SACS (2006 to present);
Senior Vice President, SACS
(2002 to 2006).
Cynthia A. Skrehot Chief 2005-present Vice President, AIG N/A N/A
DOB: December 6, 1967 Compliance SunAmerica (2002 to
Officer present); Chief Compliance
Officer, AIG SunAmerica
(2003 to 2007).
Nori L. Gabert Vice 2002-present Vice President and Deputy N/A N/A
DOB: August 15, 1953 President General Counsel, AIG
and SunAmerica (2001 to
Assistant present); Vice President and
Secretary Secretary, AIG Retirement
Company I and AIG
Retirement Company II
(2000 to present).
Timothy Pettee Vice 2004-present Chief Investment Officer, N/A N/A
DOB: April 7, 1958 President AIG SunAmerica (2003 to
present).
95
SunAmerica Equity Funds
TRUSTEE AND OFFICER INFORMATION -- September 30, 2008 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
- ---------------------- ----------- -------------- ------------------------------- ------------- -------------------
Gregory R. Kingston Vice 2002-present Vice President, AIG N/A N/A
DOB: January 18, 1966 President SunAmerica (2001 to
and present).
Assistant
Treasurer
Matthew J. Hackethal Anti- 2006-present CCO, AIG SunAmerica (2006 N/A N/A
DOB: December 31, Money to present); Vice President,
1971 Laundering Credit Suisse Asset
Compliance Management (2001 to 2006);
Officer CCO, Credit Suisse Alternative
Funds (2005 to 2006); CCO,
Credit Suisse Asset
Management Securities, Inc.
(2004 to 2005)
- --------
* The business address for each Trustee is the Harborside Financial Center,
3200 Plaza 5, Jersey City, NJ 07311-4992.
** On December 10, 2007, John T. Genoy was elected as President and Chief
Executive Officer of the Fund.
(1) The "Fund Complex" means two or more registered investment companies that
hold themselves out to investors as related companies for purposes of
investment services or have a common investment adviser or an investment
adviser that is an affiliated person of the Adviser. The "Fund Complex"
includes the Trust (9 funds), the SunAmerica Money Market Funds Inc.
(2 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), AIG Retirement Company I
(33 portfolios), AIG Retirement Company II (15 funds), 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 SEC under the
Securities Exchange Act of 1934 (i.e. "public companies") or other
investment companies registered under the 1940 Act.
(3) Interested Trustee, as defined within the 1940 Act, because he is an
officer and a director of the Adviser and a director of the principal
underwriter of the Trust.
(4) Trustees serve until their successors are duly elected and qualified,
subject to the Trustee's Retirement Plan as discussed in Note 11 of the
financial statements. Each officer will hold office for an indefinite term,
until the date he or she resigns or retires or until his/her successor is
duly elected and qualifies.
Additional information concerning the Trustees is contained in the Statement of
Additional Information which is available, without charge, by calling (800)
858-8850.
96
SunAmerica Equity Funds
SHAREHOLDER TAX INFORMATION -- (unaudited)
Certain tax information regarding the SunAmerica Equity Funds is required to
be provided to the shareholders based upon each Fund's income and
distributions for the taxable year ended September 30, 2008. The information
and distributions reported herein may differ from the information and
distributions taxable to the shareholders for the calendar year ending
December 31, 2008. The information necessary to complete your tax returns
will be included with your Form 1099-DIV to be received under separate cover
in January 2009.
During the year ended September 30, 2008, the Portfolios paid the following
long-term capital gains dividends along with the percentage of ordinary
income dividends that qualified for the 70% dividends received deduction for
corporations:
Net Long- Qualifying % for the
Term 70% Dividends
Fund Capital Gains Received Deductions
- ---- ------------- --------------------
Blue Chip Growth Class A........ $ -- -- %
Blue Chip Growth Class B........ -- --
Blue Chip Growth Class C........ -- --
Blue Chip Growth Class I........ -- --
Growth Opportunities Class A.... -- --
Growth Opportunities Class B.... -- --
Growth Opportunities Class C.... -- --
Growth Opportunities Class I.... -- --
New Century Class A............. -- --
New Century Class B............. -- --
New Century Class C............. -- --
Growth and Income Class A....... -- 100.00
Growth and Income Class B....... -- 100.00
Growth and Income Class C....... -- 100.00
Growth and Income Class I....... -- 100.00
Balanced Assets Class A......... -- 70.33
Balanced Assets Class B......... -- 70.33
Balanced Assets Class C......... -- 70.33
Balanced Assets Class I......... -- 70.33
International Equity Class A.... 1.52 --
International Equity Class B.... 1.52 --
International Equity Class C.... 1.52 --
International Equity Class I.... 1.52 --
Value Class A................... 1.21 34.83
Value Class B................... 1.21 34.83
Value Class C................... 1.21 34.83
Value Class I................... 1.21 34.83
Value Class Z................... 1.21 34.83
Disciplined Growth Class A...... -- --
Disciplined Growth Class B...... -- --
Disciplined Growth Class C...... -- --
International Small-Cap Class A. 0.09 --
International Small-Cap Class B. 0.09 --
International Small-Cap Class C. 0.09 --
The International Equity Fund and International Small-Cap Fund intend to
make an election under Internal Revenue Code Section 853 to pass through
foreign taxes paid by the Fund to its shareholders. The total amount of
foreign taxes passed through to the shareholders for the fiscal year ended
September 30, 2008 was $232,207 and $44,125, respectively. The gross foreign
source income for the information reporting is $2,877,885 and $462,968,
respectively
97
SunAmerica Equity Funds
SHAREHOLDER TAX INFORMATION -- (unaudited) (continued)
For the year ended September 30, 2008, certain dividends paid by the
following funds may be subject to a maximum tax rate of 15%, as provided by
the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the
distributions paid during the fiscal year, the following represents the
maximum amount that may be considered qualified dividend income:
Fund Income
---- -----------
Growth and Income. $ 242,422
Balanced Assets... 2,211,571
Value............. 19,180,606
98
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited)
As required by the Securities and Exchange Commission, the following graphs
compare the performance of a $10,000 investment in the SunAmerica Equity Funds'
portfolios to a similar investment in an index. Please note that "inception",
as used herein, reflects the date on which a specific class of shares commenced
operations. It is important to note that the SunAmerica Equity Funds are
professionally managed mutual funds, while the indices are not available for
investment and are unmanaged. The comparison is shown for illustrative purposes
only. The graphs present the performance of the largest class of that
particular Fund. The performance of the other classes will vary based upon the
difference in sales charges and fees assessed to shareholders of that class.
99
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Blue Chip Growth Fund
For the annual period ended September 30, 2008, the SunAmerica Blue Chip Growth
Fund Class A returned -20.44% (before maximum sales charge), outperforming its
Russell 1000 Growth Index* benchmark, which returned -20.88% during the period.
It was a challenging period for the equity markets. Every major equity index
registered double-digit declines during the past 12 months as tighter credit
conditions, slowing consumer spending trends, and deteriorating corporate
profits weighed heavily on investor sentiment. In terms of industry groups,
Consumer Staples (9.45% weight) and Healthcare (14.99% weight) were the
top-performers in the Russell 1000 Growth Index, returning -3.61% and -11.26%,
respectively. Conversely, Telecommunication Services (0.66% weight) and
Financials (6.36% weight) were the principal laggards, returning -32.79% and
- -29.12%, respectively. Information Technology, the index's largest component
(25.57% weight), returned -22.41% during the annual period.
With respect to sector weighting versus the portfolio's benchmark, the
combination of stock selection and a Healthcare overweight enhanced
performance. No exposure to the Utilities sector and security selection in the
Industrials and Materials sectors were also beneficial. Factors that hindered
results included security selection in the Energy, Financials, and Information
Technology groups, and underweight exposure to the Consumer Staples and
Consumer Discretionary sectors.
Top-performing investments for the year included Wal-Mart Stores Inc., Charles
Schwab Corp., Genzyme Corp., Alliance Data Systems Corp., and Barr
Pharmaceuticals Inc. Several technology companies headed the list of portfolio
detractors including Google Inc., Apple Inc., and Cisco Systems Inc. NII
Holdings, a Latin American wireless service provider and UnitedHealth Group
Inc., a healthcare benefit services company, also underperformed.
- --------
Past performance is no guarantee of future results.
* The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. The Russell 1000 Index is a comprehensive large-cap index measuring
the performance of the largest 1,000 U.S. incorporated companies. Indices are
not managed and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
100
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Blue Chip Growth Fund Class A
shares would have increased to $10,381. The same amount invested in securities
mirroring the performance of the S&P 500 Index and the Russell 1000 Growth
Index would be valued at $13,516 and $10,607, respectively.
[CHART]
Blue Chip Growth Russel 1000
Class A/#/ S&P 500 Index Growth Index
--------------- ------------- ------------
9/30/1998 $ 9,423 $10,000.00 $10,000.00
10/31/1998 9,995 10,812.69 10,803.72
11/30/1998 10,653 11,467.76 11,625.50
12/31/1998 11,575 12,128.16 12,673.77
1/31/1999 12,456 12,635.13 13,417.95
2/28/1999 11,940 12,242.68 12,805.01
3/31/1999 12,597 12,732.37 13,479.40
4/30/1999 12,842 13,225.44 13,496.61
5/31/1999 12,380 12,913.58 13,081.70
6/30/1999 13,250 13,629.68 13,998.11
7/31/1999 12,891 13,205.12 13,553.28
8/31/1999 12,962 13,139.34 13,774.63
9/30/1999 12,842 12,779.59 13,485.23
10/31/1999 13,788 13,587.96 14,503.84
11/30/1999 14,625 13,864.70 15,286.26
12/31/1999 16,751 14,680.78 16,876.26
1/31/2000 16,131 13,943.22 16,084.83
2/29/2000 17,162 13,679.27 16,871.23
3/31/2000 17,943 15,017.52 18,078.63
4/30/2000 16,602 14,565.64 17,218.36
5/31/2000 15,613 14,266.75 16,351.47
6/30/2000 16,769 14,618.43 17,590.64
7/31/2000 16,489 14,390.09 16,857.20
8/31/2000 18,419 15,283.86 18,383.65
9/30/2000 17,293 14,477.02 16,644.58
10/31/2000 15,964 14,415.78 15,857.12
11/30/2000 14,081 13,279.24 13,519.65
12/31/2000 14,329 13,344.18 13,091.77
1/31/2001 14,516 13,817.63 13,996.25
2/28/2001 12,887 12,557.74 11,620.12
3/31/2001 11,982 11,762.21 10,355.64
4/30/2001 12,922 12,676.25 11,665.37
5/31/2001 12,887 12,761.18 11,493.56
6/30/2001 12,483 12,450.57 11,227.45
7/31/2001 12,184 12,328.06 10,946.79
8/31/2001 11,286 11,556.32 10,051.72
9/30/2001 9,991 10,623.15 9,048.13
10/31/2001 10,318 10,825.73 9,522.85
11/30/2001 11,383 11,656.17 10,437.67
12/31/2001 11,349 11,758.28 10,418.05
1/31/2002 10,903 11,586.73 10,234.00
2/28/2002 10,541 11,363.34 9,809.29
3/31/2002 10,966 11,790.71 10,148.58
4/30/2002 10,269 11,075.84 9,320.30
5/31/2002 10,026 10,994.21 9,094.81
6/30/2002 9,225 10,210.98 8,253.51
7/31/2002 8,543 9,415.04 7,799.77
8/31/2002 8,515 9,476.89 7,823.07
9/30/2002 7,763 8,446.95 7,011.60
10/31/2002 8,299 9,190.45 7,654.78
11/30/2002 8,717 9,731.40 8,070.56
12/31/2002 8,028 9,159.68 7,513.07
1/31/2003 7,860 8,920.19 7,330.77
2/28/2003 7,826 8,786.15 7,297.12
3/31/2003 7,895 8,871.22 7,432.92
4/30/2003 8,466 9,601.60 7,982.47
5/31/2003 8,849 10,107.00 8,380.94
6/30/2003 8,919 10,236.11 8,496.33
7/31/2003 9,149 10,416.67 8,707.76
8/31/2003 9,350 10,619.42 8,924.32
9/30/2003 9,135 10,506.98 8,828.78
10/31/2003 9,817 11,101.04 9,324.67
11/30/2003 9,866 11,198.60 9,422.29
12/31/2003 10,116 11,785.50 9,748.15
1/31/2004 10,249 12,001.78 9,947.22
2/29/2004 10,325 12,168.55 10,010.42
3/31/2004 10,130 11,984.92 9,824.73
4/30/2004 9,963 11,797.12 9,710.50
5/31/2004 10,081 11,958.98 9,891.51
6/30/2004 10,249 12,191.46 10,015.11
7/31/2004 9,699 11,787.92 9,448.93
8/31/2004 9,636 11,835.55 9,402.27
9/30/2004 9,810 11,963.72 9,491.69
10/31/2004 9,942 12,146.49 9,639.73
11/30/2004 10,263 12,637.80 9,971.31
12/31/2004 10,604 13,067.86 10,362.28
1/31/2005 10,263 12,749.40 10,016.72
2/28/2005 10,304 13,017.64 10,123.32
3/31/2005 10,123 12,787.23 9,938.88
4/30/2005 9,845 12,544.66 9,749.61
5/31/2005 10,332 12,943.45 10,221.32
6/30/2005 10,242 12,962.00 10,183.64
7/31/2005 10,722 13,443.84 10,681.37
8/31/2005 10,569 13,321.09 10,543.79
9/30/2005 10,590 13,428.93 10,592.35
10/31/2005 10,450 13,205.07 10,489.40
11/30/2005 10,882 13,704.48 10,941.96
12/31/2005 10,778 13,709.14 10,907.66
1/31/2006 10,987 14,072.13 11,099.16
2/28/2006 10,882 14,110.20 11,081.52
3/31/2006 11,007 14,285.87 11,245.14
4/30/2006 10,959 14,477.73 11,229.85
5/31/2006 10,597 14,061.05 10,849.21
6/30/2006 10,492 14,080.11 10,806.40
7/31/2006 10,360 14,166.96 10,600.58
8/31/2006 10,659 14,504.04 10,931.31
9/30/2006 10,924 14,877.81 11,231.69
10/31/2006 11,230 15,362.61 11,626.52
11/30/2006 11,370 15,654.75 11,857.24
12/31/2006 11,411 15,874.35 11,897.39
1/31/2007 11,704 16,114.42 12,203.23
2/28/2007 11,453 15,799.24 11,973.85
3/31/2007 11,544 15,975.95 12,038.79
4/30/2007 12,114 16,683.61 12,605.58
5/31/2007 12,539 17,265.78 13,059.06
6/30/2007 12,400 16,978.94 12,864.13
7/31/2007 12,170 16,452.51 12,664.69
8/31/2007 12,400 16,699.13 12,866.50
9/30/2007 13,047 17,323.67 13,405.48
10/31/2007 13,409 17,599.28 13,861.72
11/30/2007 13,061 16,863.46 13,351.10
12/31/2007 12,950 16,746.43 13,302.82
1/31/2008 11,892 15,741.98 12,265.51
2/29/2008 11,613 15,230.52 12,021.90
3/31/2008 11,537 15,164.72 11,948.71
4/30/2008 12,156 15,903.24 12,576.02
5/31/2008 12,497 16,109.19 13,036.97
6/30/2008 11,655 14,751.19 12,098.02
7/31/2008 11,509 14,627.13 11,868.01
8/31/2008 11,683 14,838.64 11,995.80
9/30/2008 10,381 13,516.37 10,606.63
Class A Class B Class C++ Class I
------------------ ------------------ ------------------ ------------------
Blue Average Average Average Average
Chip Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Growth Fund Return Return+ Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -25.00% -20.44% -24.16% -21.00% -21.90% -21.11% -20.25% -20.25%
- ---------------------------------------------------------------------------------------------
5 Year Return 1.38% 13.64% 1.49% 9.66% 1.73% 8.93% 2.87% 15.20%
- ---------------------------------------------------------------------------------------------
10 Year Return 0.37% 10.17% 0.35% 3.55% N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------
Since Inception* 4.68% 110.38% 7.06% 398.07% -2.63% -22.72% -1.05% -6.99%
- ---------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 10/08/93; Class B: 03/13/85; Class C: 02/02/99;
Class I: 11/16/01.
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2008, the SunAmerica Blue Chip
Growth Class A returned -25.00% compared to -20.88% for the Russell 1000 Growth
Index and -21.98% for the S&P 500 Index. (The performance table and graph do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
101
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Growth Opportunities Fund
For the annual period ended September 30, 2008, the SunAmerica Growth
Opportunities Fund Class A returned -33.61% (before maximum sales charge),
underperforming its Russell 2000 Growth Index* benchmark, which returned
- -17.07% during the period.
The market and the economy have been greatly affected by the cascading impact
of falling home prices, the resulting seizure in the credit markets, and
de-leveraging throughout the global financial system. These macro trends had a
volatile impact on the U.S. stock market and markets around the globe. The
sell-off was broad-based, as no industry group or asset category was left
unscathed. Consumer Staples (2.57% weight) was the top-performing group in the
Russell 2000 Growth Index, returning -1.46%, while Telecommunication Services
(1.52% weight) was the worst performing sector, returning -39.82%. Three of the
largest constituents, Industrials (23.19% weight), Healthcare (21.14% weight)
and Information Technology (18.14% weight) returned -16.53%, -9.12%, and
- -29.08%, respectively.
The primary cause of the Fund's underperformance during the annual period was
security selection in the Financials, Industrials, and Healthcare groups. These
losses were offset, however, by security selection in the Consumer Staples and
Telecommunications Services groups. Successful trading within the volatile
Energy sector also assisted performance as did a Consumer Staples overweight
and underweight exposure to the Information Technology group.
The following holdings contributed to performance: Alliance Data Systems Corp.,
Pantry Inc., Scientific Games Corp., Bally Technologies Inc., and Global
Payments Inc. Individual portfolio holdings which detracted from performance
included Pilgrim's Pride Corp., Integrated Device Technology Inc., NutriSystem
Inc., Jackson Hewitt Tax Service Inc., and E*TRADE Financial Corp.
- --------
Past performance is no guarantee of future results.
* The Russell 2000 Growth Index measures the performance of those Russell 2000
companies with higher price-to-book ratios and higher forecasted growth
values. Indices are not managed and an investor cannot invest directly into
an index.
Securities listed may or may not be a part of current Portfolio construction.
102
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Growth Opportunities Fund Class A
shares would have increased to $10,079. The same amount invested in securities
mirroring the performance of the Russell 2000 Growth Index would be valued at
$15,790.
[CHART]
Growth Opportunities Class A/#/ Russell 2000 Growth Index
-------------------------------- --------------------------
9/30/1998 $ 9,425 $10,000
10/31/1998 9,465 10,522
11/30/1998 10,657 11,338
12/31/1998 11,793 12,364
1/31/1999 13,054 12,920
2/28/1999 11,961 11,738
3/31/1999 13,303 12,156
4/30/1999 13,533 13,230
5/31/1999 13,085 13,251
6/30/1999 13,943 13,949
7/31/1999 14,036 13,517
8/31/1999 14,117 13,012
9/30/1999 14,365 13,263
10/31/1999 15,794 13,602
11/30/1999 17,609 15,041
12/31/1999 22,293 17,692
1/31/2000 22,243 17,527
2/29/2000 30,098 21,605
3/31/2000 27,843 19,334
4/30/2000 25,189 17,382
5/31/2000 23,011 15,860
6/30/2000 27,352 17,909
7/31/2000 25,324 16,374
8/31/2000 29,728 18,096
9/30/2000 29,024 17,197
10/31/2000 26,669 15,801
11/30/2000 20,108 12,932
12/31/2000 21,723 13,723
1/31/2001 21,747 14,834
2/28/2001 17,831 12,801
3/31/2001 15,999 11,637
4/30/2001 17,548 13,062
5/31/2001 17,155 13,364
6/30/2001 16,345 13,729
7/31/2001 14,938 12,557
8/31/2001 13,625 11,773
9/30/2001 12,123 9,874
10/31/2001 12,902 10,823
11/30/2001 14,175 11,727
12/31/2001 14,537 12,457
1/31/2002 14,270 12,014
2/28/2002 12,737 11,236
3/31/2002 14,089 12,213
4/30/2002 12,689 11,949
5/31/2002 11,777 11,250
6/30/2002 10,276 10,296
7/31/2002 8,735 8,714
8/31/2002 8,334 8,710
9/30/2002 7,846 8,081
10/31/2002 8,578 8,489
11/30/2002 9,340 9,331
12/31/2002 8,420 8,687
1/31/2003 8,342 8,451
2/28/2003 8,405 8,226
3/31/2003 8,625 8,350
4/30/2003 9,199 9,141
5/31/2003 10,181 10,171
6/30/2003 10,181 10,367
7/31/2003 10,370 11,151
8/31/2003 11,023 11,749
9/30/2003 10,803 11,452
10/31/2003 11,369 12,441
11/30/2003 11,636 12,847
12/31/2003 11,762 12,904
1/31/2004 12,115 13,582
2/29/2004 12,226 13,561
3/31/2004 12,194 13,625
4/30/2004 11,479 12,941
5/31/2004 11,565 13,198
6/30/2004 11,887 13,637
7/31/2004 10,779 12,413
8/31/2004 10,378 12,146
9/30/2004 10,740 12,818
10/31/2004 10,936 13,129
11/30/2004 11,707 14,239
12/31/2004 12,060 14,751
1/31/2005 11,825 14,086
2/28/2005 12,123 14,279
3/31/2005 11,793 13,744
4/30/2005 11,196 12,869
5/31/2005 11,691 13,776
6/30/2005 11,950 14,222
7/31/2005 12,469 15,216
8/31/2005 12,619 15,002
9/30/2005 12,792 15,120
10/31/2005 12,359 14,562
11/30/2005 12,784 15,386
12/31/2005 12,792 15,363
1/31/2006 13,476 16,845
2/28/2006 13,389 16,755
3/31/2006 13,932 17,570
4/30/2006 14,034 17,519
5/31/2006 13,444 16,286
6/30/2006 13,035 16,296
7/31/2006 12,571 15,449
8/31/2006 13,067 15,902
9/30/2006 13,397 16,010
10/31/2006 14,057 17,047
11/30/2006 14,679 17,455
12/31/2006 14,765 17,413
1/31/2007 15,111 17,737
2/28/2007 15,363 17,681
3/31/2007 15,441 17,845
4/30/2007 15,748 18,312
5/31/2007 16,605 19,146
6/30/2007 16,400 19,038
7/31/2007 15,127 18,050
8/31/2007 15,072 18,504
9/30/2007 15,182 19,041
10/31/2007 15,315 19,898
11/30/2007 14,026 18,524
12/31/2007 13,774 18,640
1/31/2008 12,556 16,930
2/29/2008 12,147 16,344
3/31/2008 11,715 16,249
4/30/2008 11,998 17,084
5/31/2008 12,697 18,052
6/30/2008 11,329 16,976
7/31/2008 11,070 17,371
8/31/2008 11,369 17,802
9/30/2008 10,079 15,790
Class A Class B Class C++ Class I
------------------ ------------------ ------------------ ------------------
Growth Average Average Average Average
Opportunities Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -37.43% -33.61% -36.75% -34.12% -34.80% -34.14% -33.23% -33.23%
- ---------------------------------------------------------------------------------------------
5 Year Return -2.54% -6.70% -2.46% -9.89% -2.11% -10.14% -1.04% -5.07%
- ---------------------------------------------------------------------------------------------
10 Year Return 0.08% 6.94% 0.10% 1.02% N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------
Since Inception* 6.29% 298.04% 2.95% 54.72% -3.30% -27.65% -4.59% -27.58%
- ---------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 01/28/87; Class B: 10/04/93; Class C: 02/02/99;
Class I: 11/16/01
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2008, the SunAmerica Growth
Opportunities Class A returned -37.43% compared to -17.07% for the Russell 2000
Growth Index. (The performance table and graph do not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption of
fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
103
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica New Century Fund
For the annual period ended September 30, 2008, the SunAmerica New Century Fund
Class A returned -44.00% (before maximum sales charge), underperforming its
Russell Midcap Growth Index* benchmark, which returned -24.65% during the
period.
All of the major equity indices registered double-digit declines for the annual
period, as tighter credit conditions, slowing consumer spending trends, and
deteriorating corporate profits impaired the domestic economy and weighed
heavily on investor sentiment. In terms of industry groups, no sector was
unscathed during these challenging economic conditions. Although it returned
- -3.34%, Consumer Staples (4.23% weight) was the top-performing group in the
Russell Midcap Growth Index, followed by Healthcare (12.62% weight) and
Financials (7.90% weight) which returned -11.23% and -15.95%, respectively. At
the other end of the spectrum, two of the larger constituents in the Russell
Midcap Growth Index--Information Technology (15.69% weight) and Industrials
(19.51% weight)--returned -33.39% and -28.14%, respectively, during the annual
period.
With respect to sector weighting versus the portfolio's benchmark, the
combination of an underweight exposure to the Consumer Staples and Utility
groups, a Healthcare overweight and stock selection in the Energy sector each
benefited performance. Conversely, factors that hindered results included
security selection in the Financials, Materials and Industrials sectors, as
well as an underweight exposure to the Materials group.
Top-contributing investments for the year included Aspen Technology Inc.,
Temple-Inland Inc., ATP Oil & Gas Corp., Global Payments Inc., and Lifepoint
Hospitals Inc. Portfolio detractors included Cal-Maine Foods Inc.,
Freeport-McMoRan Copper & Gold Inc., NutriSystem Inc., Integrated Device
Technology Inc., and Jackson Hewitt Tax Service Inc.
- --------
Past performance is no guarantee of future results.
* The Russell Midcap Growth Index measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted
growth values. The stocks are also members of the Russell 1000 Growth Index.
Indices are not managed and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
104
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in New Century Fund Class A shares
would have increased to $10,523. The same amount invested in securities
mirroring the performance of the Russell Midcap Growth Index would be valued at
$17,090.
[CHART]
New Century Class A/#/ Russell Midcap Growth Index
---------------------- ---------------------------
9/30/1998 $ 9,423 $10,000
10/31/1998 9,813 10,736
11/30/1998 10,952 11,460
12/31/1998 12,516 12,647
1/31/1999 13,970 13,027
2/28/1999 12,727 12,389
3/31/1999 14,549 13,079
4/30/1999 15,054 13,676
5/31/1999 14,154 13,499
6/30/1999 15,012 14,442
7/31/1999 14,196 13,982
8/31/1999 14,286 13,837
9/30/1999 14,417 13,719
10/31/1999 15,244 14,780
11/30/1999 17,840 16,310
12/31/1999 23,101 19,135
1/31/2000 22,308 19,131
2/29/2000 28,489 23,152
3/31/2000 24,838 23,176
4/30/2000 22,320 20,927
5/31/2000 20,655 19,401
6/30/2000 24,838 21,460
7/31/2000 22,374 20,101
8/31/2000 25,728 23,132
9/30/2000 24,905 22,001
10/31/2000 21,969 20,496
11/30/2000 18,149 16,042
12/31/2000 18,809 16,886
1/31/2001 18,307 17,851
2/28/2001 15,831 14,763
3/31/2001 14,564 12,651
4/30/2001 15,925 14,759
5/31/2001 15,882 14,690
6/30/2001 15,551 14,698
7/31/2001 14,496 13,706
8/31/2001 13,296 12,713
9/30/2001 11,238 10,612
10/31/2001 11,748 11,727
11/30/2001 12,548 12,990
12/31/2001 12,803 13,484
1/31/2002 12,488 13,046
2/28/2002 11,867 12,306
3/31/2002 12,556 13,245
4/30/2002 12,216 12,544
5/31/2002 11,876 12,170
6/30/2002 11,084 10,827
7/31/2002 9,970 9,775
8/31/2002 9,987 9,741
9/30/2002 9,545 8,967
10/31/2002 9,732 9,662
11/30/2002 10,098 10,418
12/31/2002 9,655 9,788
1/31/2003 9,477 9,692
2/28/2003 9,307 9,608
3/31/2003 9,383 9,787
4/30/2003 10,013 10,453
5/31/2003 10,761 11,459
6/30/2003 10,931 11,623
7/31/2003 11,280 12,038
8/31/2003 11,867 12,701
9/30/2003 11,433 12,455
10/31/2003 12,301 13,458
11/30/2003 12,326 13,818
12/31/2003 12,344 13,969
1/31/2004 12,522 14,430
2/29/2004 12,556 14,673
3/31/2004 12,573 14,645
4/30/2004 12,139 14,231
5/31/2004 12,454 14,567
6/30/2004 12,922 14,799
7/31/2004 12,190 13,819
8/31/2004 11,910 13,648
9/30/2004 12,565 14,158
10/31/2004 12,982 14,638
11/30/2004 13,824 15,394
12/31/2004 14,258 16,132
1/31/2005 14,113 15,700
2/28/2005 14,538 16,097
3/31/2005 14,241 15,862
4/30/2005 13,586 15,234
5/31/2005 14,504 16,107
6/30/2005 14,751 16,406
7/31/2005 15,534 17,364
8/31/2005 15,329 17,258
9/30/2005 15,312 17,481
10/31/2005 14,819 16,967
11/30/2005 15,423 17,887
12/31/2005 15,355 18,083
1/31/2006 16,104 19,166
2/28/2006 16,095 18,930
3/31/2006 16,546 19,459
4/30/2006 16,682 19,542
5/31/2006 15,916 18,622
6/30/2006 15,525 18,546
7/31/2006 14,964 17,881
8/31/2006 15,440 18,293
9/30/2006 15,823 18,711
10/31/2006 16,478 19,429
11/30/2006 17,039 20,191
12/31/2006 17,320 20,010
1/31/2007 17,916 20,739
2/28/2007 18,086 20,694
3/31/2007 18,179 20,802
4/30/2007 18,868 21,716
5/31/2007 19,881 22,597
6/30/2007 19,540 22,205
7/31/2007 18,162 21,708
8/31/2007 18,409 21,825
9/30/2007 18,792 22,682
10/31/2007 18,962 23,260
11/30/2007 17,414 22,236
12/31/2007 17,056 22,297
1/31/2008 15,831 20,525
2/29/2008 15,346 20,212
3/31/2008 14,725 19,855
4/30/2008 15,338 21,296
5/31/2008 16,214 22,418
6/30/2008 14,691 20,778
7/31/2008 13,296 19,989
8/31/2008 12,913 20,172
9/30/2008 10,523 17,090
Class A Class B Class C++
------------------ ------------------ ------------------
New Average Average Average
Century Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -47.23% -44.00% -46.70% -44.48% -44.86% -44.31%
- --------------------------------------------------------------------------
5 Year Return -2.80% -7.96% -2.78% -11.39% -2.19% -10.48%
- --------------------------------------------------------------------------
10 Year Return 0.51% 11.68% 0.57% 5.80% 0.51% 5.17%
- --------------------------------------------------------------------------
Since Inception* 6.44% 310.14% 3.17% 59.80% -0.84% -8.63%
- --------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 01/28/87; Class B: 09/24/93; Class C: 02/02/98.
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2008, the SunAmerica New Century
Class A returned -47.23% compared to -24.65% for the Russell Midcap Growth
Index. (The performance table and graph do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
105
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Growth and Income Fund
For the annual period ended September 30, 2008, the SunAmerica Growth and
Income Fund Class A returned -22.19%, (before maximum sales charge),
underperforming its benchmark, the S&P 500 Index*, which returned -21.98%.
Overall, it was a challenging year for U.S. equities, as deteriorating
corporate profits, tighter credit conditions and slowing consumer spending
trends impaired the domestic economy. Losses were widespread, as every S&P 500
sector posted negative returns, most notably the Financials (16.86% weight) and
Telecommunication Services (3.39% weight) groups, which returned -38.53% and
- -33.14%, respectively. Sectors that performed relatively better included the
more defensive Consumer Staples (9.44% weight) and Healthcare (12.12% weight)
groups, which returned -2.99% and -12.16%, respectively.
During the annual period, performance benefited from stock selection in the
Information Technology, Materials and Utilities sectors. A Consumer Staples
overweight also proved beneficial. Alternatively, stock selection in Consumer
Discretionary, Energy, and Industrials companies negatively impacted
performance, as did underweight exposure to the Financials sector.
The Fund focuses its investment selection on larger cap companies that
demonstrate potential for capital appreciation and are believed to be
undervalued by the market. In terms of individual stock holdings,
Anheuser-Busch Cos. Inc., U.S. Bancorp, Genzyme Corp., General Mills Inc., and
JPMorgan Chase & Co. headed the list of top-performing holdings during the
annual period. On the other hand, investments in Fannie Mae, Citigroup Inc.,
Morgan Stanley, General Electric Co., and Global Industries Ltd. hindered
results.
- --------
Past performance is no guarantee of future results.
* The S&P 500 Index is Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices. Indices are not
managed and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
106
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Growth and Income Fund Class A
shares would have increased to $10,726. The same amount invested in securities
mirroring the performance of the S&P 500 Index would be valued at $13,516.
[CHART]
Growth & Income
Class A/#/ S&P 500 Index
--------------- -------------
9/30/1998 $ 9,426 $10,000
10/31/1998 9,985 10,813
11/30/1998 10,582 11,468
12/31/1998 11,464 12,128
1/31/1999 12,164 12,635
2/28/1999 11,723 12,243
3/31/1999 12,324 12,732
4/30/1999 12,583 13,225
5/31/1999 12,134 12,914
6/30/1999 12,895 13,630
7/31/1999 12,613 13,205
8/31/1999 12,507 13,139
9/30/1999 12,354 12,780
10/31/1999 13,168 13,588
11/30/1999 13,709 13,865
12/31/1999 15,281 14,681
1/31/2000 14,729 13,943
2/29/2000 15,265 13,679
3/31/2000 16,140 15,018
4/30/2000 15,005 14,566
5/31/2000 14,287 14,267
6/30/2000 15,194 14,618
7/31/2000 14,934 14,390
8/31/2000 16,645 15,284
9/30/2000 15,769 14,477
10/31/2000 14,863 14,416
11/30/2000 13,238 13,279
12/31/2000 13,621 13,344
1/31/2001 13,699 13,818
2/28/2001 12,427 12,558
3/31/2001 11,602 11,762
4/30/2001 12,444 12,676
5/31/2001 12,384 12,761
6/30/2001 11,877 12,451
7/31/2001 11,619 12,328
8/31/2001 10,760 11,556
9/30/2001 9,548 10,623
10/31/2001 9,694 10,826
11/30/2001 10,614 11,656
12/31/2001 10,682 11,758
1/31/2002 10,175 11,587
2/28/2002 10,021 11,363
3/31/2002 10,467 11,791
4/30/2002 9,943 11,076
5/31/2002 9,823 10,994
6/30/2002 9,144 10,211
7/31/2002 8,371 9,415
8/31/2002 8,491 9,477
9/30/2002 7,623 8,447
10/31/2002 8,130 9,190
11/30/2002 8,534 9,731
12/31/2002 7,958 9,160
1/31/2003 7,700 8,920
2/28/2003 7,623 8,786
3/31/2003 7,666 8,871
4/30/2003 8,164 9,602
5/31/2003 8,517 10,107
6/30/2003 8,568 10,236
7/31/2003 8,766 10,417
8/31/2003 8,921 10,619
9/30/2003 8,757 10,507
10/31/2003 9,367 11,101
11/30/2003 9,453 11,199
12/31/2003 9,763 11,786
1/31/2004 9,857 12,002
2/29/2004 10,003 12,169
3/31/2004 9,823 11,985
4/30/2004 9,625 11,797
5/31/2004 9,685 11,959
6/30/2004 9,840 12,191
7/31/2004 9,608 11,788
8/31/2004 9,617 11,836
9/30/2004 9,780 11,964
10/31/2004 9,960 12,146
11/30/2004 10,364 12,638
12/31/2004 10,726 13,068
1/31/2005 10,519 12,749
2/28/2005 10,717 13,018
3/31/2005 10,553 12,787
4/30/2005 10,346 12,545
5/31/2005 10,631 12,943
6/30/2005 10,562 12,962
7/31/2005 10,803 13,444
8/31/2005 10,717 13,321
9/30/2005 10,748 13,429
10/31/2005 10,540 13,205
11/30/2005 10,843 13,704
12/31/2005 10,799 13,709
1/31/2006 10,972 14,072
2/28/2006 11,076 14,110
3/31/2006 11,181 14,286
4/30/2006 11,398 14,478
5/31/2006 11,120 14,061
6/30/2006 11,085 14,080
7/31/2006 11,146 14,167
8/31/2006 11,389 14,504
9/30/2006 11,658 14,878
10/31/2006 12,031 15,363
11/30/2006 12,196 15,655
12/31/2006 12,387 15,874
1/31/2007 12,570 16,114
2/28/2007 12,257 15,799
3/31/2007 12,396 15,976
4/30/2007 12,969 16,684
5/31/2007 13,420 17,266
6/30/2007 13,264 16,979
7/31/2007 12,986 16,453
8/31/2007 13,359 16,699
9/30/2007 13,794 17,324
10/31/2007 13,828 17,599
11/30/2007 13,281 16,863
12/31/2007 13,175 16,746
1/31/2008 12,565 15,742
2/29/2008 12,129 15,231
3/31/2008 12,155 15,165
4/30/2008 12,574 15,903
5/31/2008 12,844 16,109
6/30/2008 11,711 14,751
7/31/2008 11,589 14,627
8/31/2008 11,816 14,839
9/30/2008 10,726 13,516
Class A Class B Class C++ Class I
------------------ ------------------ ------------------ ------------------
Growth Average Average Average Average
and Income Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -26.67% -22.19% -25.79% -22.69% -23.48% -22.71% -22.02% -22.02%
- ---------------------------------------------------------------------------------------------
5 Year Return 2.92% 22.49% 3.10% 18.47% 3.47% 18.61% 4.34% 23.66%
- ---------------------------------------------------------------------------------------------
10 Year Return 0.70% 13.80% 0.78% 8.04% 0.64% 6.61% N/A N/A
- ---------------------------------------------------------------------------------------------
Since Inception* 6.53% 161.36% 6.62% 149.12% 0.48% 5.19% 0.39% 2.73%
- ---------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 07/01/94; Class B: 07/06/94; Class C: 02/02/98;
Class I: 11/16/01.
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2008, the SunAmerica Growth and
Income Class A returned -26.67% compared to -21.98% for the S&P 500 Index. (The
performance table and graph do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
107
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Balanced Assets Fund
For the annual period ended September 30, 2008, the SunAmerica Balanced Assets
Fund Class A returned -16.37% (before maximum sales charge). At the end of the
fiscal period, the Fund held 64% of its total portfolio in equities and 36% in
fixed income securities. The Fund's equity benchmark, the S&P 500 Index*,
returned -21.98%, whereas its fixed income benchmark, the Lehman Brothers
Aggregate Bond Index**, returned 3.65% for the same period. A balanced fund is
designed to cushion risk and provide a return somewhere between that of its
fixed income and equity benchmarks.
Overall, it was a challenging year for U.S. equities, as fears of recession,
rising inflationary concerns, weakness in the housing market, chaos in the
credit markets, and declining corporate earnings growth dampened investor
sentiment. The sell-off was widespread, as every S&P 500 sector posted negative
returns, most notably the Financials (16.86% weight) and Telecommunication
Services (3.39% weight) groups, which returned -38.53% and -33.14%,
respectively, during the annual period. Sectors that performed relatively
better included the more defensive Consumer Staples (9.44% weight) and
Healthcare (12.12% weight) groups, which returned -2.99% and -12.16%,
respectively.
The Fund's equity holdings were aided by positive security selection in eight
of the ten S&P 500 group, particularly Healthcare, Financials, and Utilities
companies. Overweight exposure to the Healthcare group also proved beneficial.
On the other hand, stock selection in the Consumer Discretionary and Energy
sectors detracted from relative performance.
U.S. Bancorp, JPMorgan Chase & Co., Anheuser-Busch Cos. Inc., Wells Fargo &
Co., and Wal-Mart Stores Inc. led the list of top equity contributors. The
positions which detracted most significantly from the Fund's performance
included General Electric Co., Fannie Mae, Morgan Stanley, Citigroup Inc., and
Google Inc.
Market conditions had a pronounced impact on the performance of the fixed
income portion of the Fund versus that of its benchmark. A deteriorating credit
environment coupled with a slowing economy created a strong headwind for the
Fund. Liquidity diminished drastically in the second half of the annual period
as providers remained extremely risk averse. New issue activity came to a
standstill as credit market conditions tightened. The Fund's exposure to
securities with credit ratings of BBB and below contributed to underperformance
during the period.
Security selection has always been the primary driver of returns in the Fund.
Each asset class is managed from a bottom-up perspective and emphasizes the
manager's ability to select the best-performing securities available. The
massive de-leveraging that roiled the credit markets over the past year left
few sectors unscathed and highlighted the importance of individual security
selection. The top-performing securities for the year included U.S. Treasury
and mortgage-backed securities issued by Fannie Mae and Freddie Mac. Laggards
included asset-backed securities issued by Countrywide Financial and notes
issued by Washington Mutual and Lehman Brothers.
- --------
Past performance is no guarantee of future results.
* The S&P 500 Index is Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices. Indices are not
managed and an investor cannot invest directly into an index.
** The Lehman Brothers Aggregate Bond Index (Effective November 14, 2008 the
Index is named Barclays Capital Aggregate Bond Index.) represents securities
that are U.S. domestic, taxable and dollar denominated. The index covers
components for government and corporate securities, mortgage pass-through
securities and asset-backed securities. Indices are not managed and an
investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
108
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Balanced Assets Fund Class A
shares would have increased to $10,398. The same amount invested in securities
mirroring the performance of the Lehman Brothers Aggregate Bond Index and the
S&P 500 Index would be valued at $16,592 and $13,516, respectively.
[CHART]
Balanced Assets Lehman Brothers
Class A/#/ Aggregate Bond
Index S&P 500 Index
------------------- --------------- -------------
9/30/1998 $ 9,425 $10,000 $10,000
10/31/1998 9,780 9,947 10,813
11/30/1998 10,272 10,004 11,468
12/31/1998 10,893 10,034 12,128
1/31/1999 11,409 10,105 12,635
2/28/1999 11,018 9,928 12,243
3/31/1999 11,489 9,983 12,732
4/30/1999 11,676 10,015 13,225
5/31/1999 11,290 9,927 12,914
6/30/1999 11,834 9,895 13,630
7/31/1999 11,588 9,853 13,205
8/31/1999 11,617 9,848 13,139
9/30/1999 11,509 9,963 12,780
10/31/1999 12,035 9,999 13,588
11/30/1999 12,292 9,998 13,865
12/31/1999 13,254 9,950 14,681
1/31/2000 12,869 9,918 13,943
2/29/2000 13,147 10,038 13,679
3/31/2000 13,829 10,170 15,018
4/30/2000 13,070 10,141 14,566
5/31/2000 12,615 10,135 14,267
6/30/2000 13,221 10,346 14,618
7/31/2000 13,164 10,440 14,390
8/31/2000 14,102 10,592 15,284
9/30/2000 13,315 10,659 14,477
10/31/2000 12,654 10,729 14,416
11/30/2000 11,746 10,905 13,279
12/31/2000 11,974 11,108 13,344
1/31/2001 12,117 11,289 13,818
2/28/2001 11,254 11,387 12,558
3/31/2001 10,710 11,444 11,762
4/30/2001 11,146 11,396 12,676
5/31/2001 11,118 11,464 12,761
6/30/2001 10,900 11,508 12,451
7/31/2001 10,778 11,766 12,328
8/31/2001 10,240 11,901 11,556
9/30/2001 9,540 12,039 10,623
10/31/2001 9,850 12,291 10,826
11/30/2001 10,347 12,121 11,656
12/31/2001 10,263 12,044 11,758
1/31/2002 10,039 12,141 11,587
2/28/2002 9,894 12,259 11,363
3/31/2002 10,000 12,055 11,791
4/30/2002 9,732 12,289 11,076
5/31/2002 9,608 12,393 10,994
6/30/2002 9,257 12,501 10,211
7/31/2002 8,929 12,651 9,415
8/31/2002 9,031 12,865 9,477
9/30/2002 8,620 13,073 8,447
10/31/2002 8,744 13,014 9,190
11/30/2002 8,927 13,010 9,731
12/31/2002 8,620 13,279 9,160
1/31/2003 8,444 13,290 8,920
2/28/2003 8,437 13,474 8,786
3/31/2003 8,445 13,464 8,871
4/30/2003 8,828 13,575 9,602
5/31/2003 9,107 13,828 10,107
6/30/2003 9,123 13,801 10,236
7/31/2003 9,086 13,337 10,417
8/31/2003 9,204 13,425 10,619
9/30/2003 9,193 13,781 10,507
10/31/2003 9,569 13,652 11,101
11/30/2003 9,613 13,685 11,199
12/31/2003 9,841 13,824 11,786
1/31/2004 9,929 13,935 12,002
2/29/2004 10,040 14,086 12,169
3/31/2004 9,939 14,192 11,985
4/30/2004 9,731 13,822 11,797
5/31/2004 9,761 13,767 11,959
6/30/2004 9,915 13,845 12,191
7/31/2004 9,692 13,982 11,788
8/31/2004 9,744 14,249 11,836
9/30/2004 9,861 14,287 11,964
10/31/2004 9,965 14,407 12,146
11/30/2004 10,152 14,292 12,638
12/31/2004 10,416 14,424 13,068
1/31/2005 10,280 14,514 12,749
2/28/2005 10,363 14,429 13,018
3/31/2005 10,174 14,355 12,787
4/30/2005 10,068 14,549 12,545
5/31/2005 10,264 14,706 12,943
6/30/2005 10,257 14,786 12,962
7/31/2005 10,461 14,652 13,444
8/31/2005 10,431 14,840 13,321
9/30/2005 10,436 14,687 13,429
10/31/2005 10,284 14,571 13,205
11/30/2005 10,528 14,635 13,704
12/31/2005 10,521 14,774 13,709
1/31/2006 10,666 14,775 14,072
2/28/2006 10,682 14,824 14,110
3/31/2006 10,715 14,679 14,286
4/30/2006 10,761 14,652 14,478
5/31/2006 10,561 14,636 14,061
6/30/2006 10,546 14,667 14,080
7/31/2006 10,639 14,866 14,167
8/31/2006 10,847 15,093 14,504
9/30/2006 11,052 15,226 14,878
10/31/2006 11,292 15,327 15,363
11/30/2006 11,432 15,504 15,655
12/31/2006 11,519 15,414 15,874
1/31/2007 11,651 15,408 16,114
2/28/2007 11,534 15,646 15,799
3/31/2007 11,613 15,646 15,976
4/30/2007 11,972 15,731 16,684
5/31/2007 12,230 15,611 17,266
6/30/2007 12,087 15,565 16,979
7/31/2007 11,875 15,695 16,453
8/31/2007 12,048 15,887 16,699
9/30/2007 12,442 16,008 17,324
10/31/2007 12,576 16,152 17,599
11/30/2007 12,245 16,442 16,863
12/31/2007 12,188 16,488 16,746
1/31/2008 11,674 16,765 15,742
2/29/2008 11,413 16,788 15,231
3/31/2008 11,305 16,846 15,165
4/30/2008 11,631 16,811 15,903
5/31/2008 11,774 16,687 16,109
6/30/2008 11,119 16,674 14,751
7/31/2008 11,023 16,660 14,627
8/31/2008 11,191 16,818 14,839
9/30/2008 10,398 16,592 13,516
Class A Class B Class C++ Class I
------------------ ------------------ ------------------ ------------------
Balanced Average Average Average Average
Assets Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -21.16% -16.37% -20.23% -16.95% -17.80% -16.98% -16.19% -16.19%
- ---------------------------------------------------------------------------------------------
5 Year Return 1.29% 13.11% 1.43% 9.36% 1.82% 9.43% 2.76% 14.58%
- ---------------------------------------------------------------------------------------------
10 Year Return 0.39% 10.33% 0.42% 4.27% N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------
Since Inception* 4.41% 102.83% 7.50% 453.45% -1.55% -13.99% 0.38% 2.66%
- ---------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A: 09/24/93; Class B: 01/29/85; Class C: 02/02/99;
Class I: 11/16/01.
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2008, the SunAmerica Balanced
Assets Class A returned -21.16% compared to -21.98% for the S&P 500 Index and
3.65% for the Lehman Bros. Aggregate Bond Index. (Effective November 14, 2008,
the Index is named Barclays Capital Aggregate Bond Index,) (The performance
table and graph do not reflect the deduction of taxes that a shareholder would
pay on fund distributions or the redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
109
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica International Equity Fund
For the annual period ended September 30, 2008, the SunAmerica International
Equity Fund Class A returned -31.34% (before maximum sales charge),
underperforming its MSCI All Country World ex-US Index (Gross)* benchmark,
which returned -29.97% during the period.
Fiscal year 2008 was a roller coaster ride in international equity markets. The
boom in commodity prices and resource-linked equities capitulated to the
subprime credit crisis, which originated in and emanated from the financial
system and housing markets of the United States. Investors that were long
energy and materials-related stocks chalked up robust gains in the first three
quarters (through mid-July) as crude oil hit an historic peak of $147 per
barrel (+58% from 9/28/2007) and other materials, from corn and soybeans to
gold and copper, touched historic levels. Driving this firm price environment
was a widely-shared belief, with ample supporting evidence, of booming secular
growth in emerging markets; most notably, the strong growth of China. The
stocks of the companies that fed China's seemingly endless appetite for
resources did very well indeed. The other side of this resource boom was, of
course, a rising fear of inflation, and the pressure that rising costs put on
consumers and businesses alike. The airline and auto industries have been
particularly hard hit because of their reliance on cheap oil to maintain sales
and/or margins. Meanwhile, the financial sector was experiencing great
difficulties throughout the year as the extent of damage from the subprime
credit fiasco became more and more apparent. Structured credit products, which
had, in effect, overleveraged the global financial system, began to unwind, and
as they unwound, a vicious cycle of distress, panic and failure was unleashed.
The global system of finance and credit froze, leading to a simultaneous
liquidity and solvency crisis as firms and investors came to grips with a lack
of credit to finance operations and diminishing equity. The failures of a
variety of banks and non-bank financial companies such as hedge funds and
insurance companies ensued. This massive de-leveraging has, of course, affected
equity markets profoundly, and has significantly pressured the secular growth
trend in emerging markets as well as the commodity and energy boom. In the end
"the tortoise did indeed overtake the hare" as defensive-oriented sectors such
as Healthcare, Utilities and Consumer Staples, as well as equities with
low-leverage and with quality, predictable earnings profiles, outperformed
everything else on a relative basis.
Our sector selection added to performance throughout the annual period. Our
underweight position in Financials and our overweight in Consumer Staples were
our best performing allocation decisions while our allocations to energy and
industrials were the biggest detractors.
Although country selection did contribute positively to performance, it was a
much smaller percentage of performance contribution. That is a predictable
result given our focus on individual stock selection and regional allocation.
Stock selection was the primary driver of performance. Our selection in
materials was our biggest contributor to performance, while our selection in
energy stocks was the biggest detractor to performance. On an individual
security basis, Mechel Steel Group, Orascom Construction and Bayer were the top
three contributors while Vodafone, Allianz and Hon Hai Precisions were the
biggest individual detractors.
- --------
Past performance is no guarantee of future results.
Investing internationally involves special risks, such as currency
fluctuations, and economic and political instability. Diversification does not
insure against market loss.
* The Morgan Stanley Capital International (MSCI) All Country (AC) World
ex-U.S. Index (Gross) is a free float-adjusted market capitalization-weighted
index designed to measure the equity market performance of 47 global
developed and emerging markets, excluding the U.S. Indices are not managed
and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
110
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in International Equity Fund Class A
shares would have increased to $12,212. The same amount invested in securities
mirroring the performance of the MSCI All Country World ex-U.S. Index (Gross)
would be valued at $19,394.
[CHART]
MSCI All Country World
International Equity ex-U.S. Daily Total
Class A/#/ Return Index (Gross)
-------------------- ----------------------
9/30/1998 $ 9,424 $10,000.00
10/31/1998 10,058 11,047.51
11/30/1998 10,551 11,641.17
12/31/1998 10,882 12,038.64
1/31/1999 10,907 12,015.79
2/28/1999 10,527 11,737.38
3/31/1999 10,799 12,324.30
4/30/1999 11,155 12,944.11
5/31/1999 10,642 12,356.55
6/30/1999 11,122 12,934.92
7/31/1999 11,336 13,231.40
8/31/1999 11,328 13,281.09
9/30/1999 11,328 13,370.06
10/31/1999 11,783 13,856.24
11/30/1999 12,692 14,403.34
12/31/1999 14,534 15,768.66
1/31/2000 13,691 14,900.25
2/29/2000 14,732 15,298.00
3/31/2000 14,518 15,890.06
4/30/2000 13,501 15,010.77
5/31/2000 13,113 14,645.69
6/30/2000 13,650 15,272.33
7/31/2000 13,253 14,662.79
8/31/2000 13,543 14,846.38
9/30/2000 12,601 14,021.95
10/31/2000 11,931 13,567.05
11/30/2000 11,270 12,951.40
12/31/2000 11,620 13,385.94
1/31/2001 11,575 13,586.74
2/28/2001 10,614 12,511.07
3/31/2001 9,680 11,626.72
4/30/2001 10,273 12,417.48
5/31/2001 9,878 12,074.58
6/30/2001 9,500 11,611.48
7/31/2001 9,222 11,353.13
8/31/2001 8,926 11,071.17
9/30/2001 7,839 9,896.64
10/31/2001 7,974 10,173.92
11/30/2001 8,028 10,639.25
12/31/2001 8,145 10,776.31
1/31/2002 7,938 10,314.79
2/28/2002 8,064 10,389.07
3/31/2002 8,396 10,953.43
4/30/2002 8,405 11,024.60
5/31/2002 8,504 11,144.68
6/30/2002 8,180 10,663.46
7/31/2002 7,309 9,624.25
8/31/2002 7,166 9,624.85
9/30/2002 6,286 8,604.90
10/31/2002 6,618 9,066.53
11/30/2002 6,896 9,502.53
12/31/2002 6,672 9,195.54
1/31/2003 6,483 8,872.72
2/28/2003 6,402 8,692.94
3/31/2003 6,277 8,524.32
4/30/2003 6,780 9,345.72
5/31/2003 7,148 9,941.09
6/30/2003 7,327 10,216.25
7/31/2003 7,552 10,488.48
8/31/2003 7,767 10,801.02
9/30/2003 7,839 11,103.44
10/31/2003 8,351 11,823.20
11/30/2003 8,477 12,081.00
12/31/2003 9,153 13,003.34
1/31/2004 9,198 13,212.17
2/29/2004 9,234 13,548.11
3/31/2004 9,333 13,631.47
4/30/2004 9,037 13,207.82
5/31/2004 9,010 13,249.60
6/30/2004 9,234 13,536.79
7/31/2004 8,875 13,142.30
8/31/2004 8,956 13,247.54
9/30/2004 9,162 13,673.47
10/31/2004 9,513 14,149.03
11/30/2004 10,106 15,131.11
12/31/2004 10,582 15,780.79
1/31/2005 10,411 15,509.00
2/28/2005 10,905 16,273.98
3/31/2005 10,591 15,832.53
4/30/2005 10,438 15,442.07
5/31/2005 10,447 15,538.82
6/30/2005 10,591 15,831.28
7/31/2005 10,977 16,415.39
8/31/2005 11,417 16,835.51
9/30/2005 11,714 17,703.92
10/31/2005 11,426 17,059.41
11/30/2005 11,776 17,632.97
12/31/2005 12,666 18,481.35
1/31/2006 13,600 19,769.94
2/28/2006 13,375 19,712.86
3/31/2006 13,833 20,285.43
4/30/2006 14,669 21,331.39
5/31/2006 14,103 20,347.95
6/30/2006 13,896 20,327.66
7/31/2006 13,995 20,535.62
8/31/2006 14,301 21,117.66
9/30/2006 14,238 21,131.37
10/31/2006 14,642 21,991.84
11/30/2006 15,046 22,790.28
12/31/2006 15,441 23,500.52
1/31/2007 15,558 23,588.28
2/28/2007 15,513 23,732.42
3/31/2007 15,909 24,401.09
4/30/2007 16,421 25,532.64
5/31/2007 16,762 26,232.48
6/30/2007 16,977 26,455.90
7/31/2007 16,753 26,380.48
8/31/2007 16,564 25,975.44
9/30/2007 17,786 27,695.56
10/31/2007 18,927 29,241.51
11/30/2007 17,867 27,927.57
12/31/2007 17,768 27,523.89
1/31/2008 15,795 24,860.71
2/29/2008 16,138 25,581.17
3/31/2008 16,011 25,029.55
4/30/2008 17,120 26,569.89
5/31/2008 17,444 27,030.32
6/30/2008 16,158 24,814.78
7/31/2008 15,353 23,927.32
8/31/2008 14,430 22,814.49
9/30/2008 12,212 19,394.49
Class A Class B Class C ++ Class I
------------------ ------------------ ------------------ ------------------
International Average Average Average Average
Equity Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -35.30% -31.34% -34.21% -31.72% -32.39% -31.77% -31.29% -31.29%
- ---------------------------------------------------------------------------------------------
5 Year Return 7.99% 55.78% 8.30% 50.96% 8.57% 50.89% 9.37% 56.51%
- ---------------------------------------------------------------------------------------------
10 Year Return 2.02% 29.58% 2.12% 23.29% 1.72% 18.61% N/A N/A
- ---------------------------------------------------------------------------------------------
Since Inception* 1.11% 20.92% 1.18% 14.95% 0.92% 11.16% 6.19% 51.00%
- ---------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date Class A and Class B: 11/19/96; Class C: 03/06/97; Class I:
11/16/01.
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2008, the SunAmerica International
Equity Class A returned -35.30% compared to -29.97% for the MSCI All Country
World ex U.S. Index (Gross). (The performance table and graph do not reflect
the deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
111
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Value Fund
For the annual period ended September 30, 2008, the SunAmerica Value Fund
Class A returned -21.70%, (before maximum sales charge), outperforming its
benchmark the Russell 1000 Value Index*, which returned -23.56%.
Overall, U.S. equities finished the period on a precarious note due to the
weakening U.S. economy. The combination of tighter credit and slower consumer
spending trends had a negative impact on the outlook for corporate profits. In
terms of industry groups, all ten Russell 1000 Value sectors had negative
returns, the worst of which were Financials (28.37% weight) and Information
Technology (2.93% weight), which returned -37.09% and -36.56%, respectively.
Sectors that did relatively better included the Consumer Staples (8.07% weight)
and Energy (15.78% weight) groups which returned -5.13% and -9.70%,
respectively.
The Fund focuses its investment selection on larger capitalized companies that
demonstrate potential for capital appreciation and are believed to be
undervalued by the marketplace. During the annual period, performance benefited
from stock selection in Financials, Information Technology, and Consumer
Staples sectors. Alternatively, security selection in the Consumer
Discretionary and Energy groups hindered results.
Three financial institutions, U.S. Bancorp, JPMorgan Chase & Co., and Wells
Fargo & Co. were among the top-performing holdings during the annual period.
General Mills Inc. and Anheuser-Busch Cos. Inc., both Consumer Staples
companies, also delivered strong results. Investments in Fannie Mae, Morgan
Stanley, Citigroup Inc., General Electric Co., and AT&T Inc. were a drag on
performance in the period.
- --------
Past performance is no guarantee of future results.
* The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
The Russell 1000 Index is a comprehensive large-cap index measuring the
performance of the largest 1,000 U.S. incorporated companies. Indices are not
managed and an investor cannot invest directly into an index.
Securities listed may or may not be a part of current Portfolio construction.
112
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in Value Fund Class A shares would
have increased to $19,171. The same amount invested in securities mirroring the
performance of the Russell 1000 Value Index would be valued at $17,156.
[CHART]
Russell 1000
Value Class A/#/ Value Index
-------------- -----------
9/30/1998 $ 9,428 $10,000.00
10/31/1998 10,338 10,774.60
11/30/1998 10,759 11,276.58
12/31/1998 11,000 11,660.39
1/31/1999 10,986 11,753.51
2/28/1999 10,731 11,587.68
3/31/1999 11,034 11,827.54
4/30/1999 11,883 12,932.05
5/31/1999 11,897 12,789.93
6/30/1999 12,386 13,161.35
7/31/1999 11,979 12,775.85
8/31/1999 11,607 12,301.83
9/30/1999 11,166 11,871.93
10/31/1999 11,586 12,555.22
11/30/1999 11,676 12,456.95
12/31/1999 11,999 12,517.05
1/31/2000 11,645 12,108.81
2/29/2000 11,385 11,209.22
3/31/2000 12,469 12,576.88
4/30/2000 12,339 12,430.42
5/31/2000 12,469 12,561.45
6/30/2000 12,288 11,987.53
7/31/2000 12,151 12,137.51
8/31/2000 12,997 12,812.94
9/30/2000 12,657 12,930.16
10/31/2000 12,845 13,247.98
11/30/2000 12,397 12,756.09
12/31/2000 13,229 13,395.25
1/31/2001 13,530 13,446.68
2/28/2001 12,961 13,072.80
3/31/2001 12,457 12,610.85
4/30/2001 13,066 13,229.30
5/31/2001 13,408 13,526.54
6/30/2001 13,335 13,226.05
7/31/2001 13,408 13,198.44
8/31/2001 13,107 12,669.70
9/30/2001 12,270 11,778.00
10/31/2001 12,278 11,676.61
11/30/2001 13,058 12,355.46
12/31/2001 13,536 12,646.45
1/31/2002 13,391 12,549.02
2/28/2002 13,519 12,569.16
3/31/2002 13,996 13,163.81
4/30/2002 13,689 12,712.37
5/31/2002 13,825 12,776.10
6/30/2002 13,297 12,042.51
7/31/2002 12,565 10,923.05
8/31/2002 12,676 11,005.54
9/30/2002 11,816 9,781.85
10/31/2002 12,455 10,506.56
11/30/2002 13,025 11,168.43
12/31/2002 12,725 10,683.33
1/31/2003 12,387 10,424.69
2/28/2003 12,102 10,146.78
3/31/2003 12,173 10,163.64
4/30/2003 13,027 11,058.27
5/31/2003 13,818 11,772.09
6/30/2003 13,809 11,919.28
7/31/2003 13,881 12,096.76
8/31/2003 14,147 12,285.26
9/30/2003 14,085 12,165.39
10/31/2003 14,521 12,909.91
11/30/2003 14,725 13,085.04
12/31/2003 15,673 13,891.60
1/31/2004 15,692 14,135.87
2/29/2004 16,009 14,438.83
3/31/2004 15,869 14,312.46
4/30/2004 15,869 13,962.67
5/31/2004 15,860 14,105.06
6/30/2004 16,271 14,438.34
7/31/2004 16,056 14,234.95
8/31/2004 16,224 14,437.39
9/30/2004 16,523 14,661.19
10/31/2004 16,822 14,904.92
11/30/2004 17,560 15,658.48
12/31/2004 18,135 16,182.83
1/31/2005 17,915 15,895.57
2/28/2005 18,365 16,422.38
3/31/2005 18,250 16,197.04
4/30/2005 17,946 15,906.95
5/31/2005 18,271 16,289.87
6/30/2005 18,344 16,468.22
7/31/2005 18,721 16,944.67
8/31/2005 18,637 16,870.98
9/30/2005 18,846 17,107.86
10/31/2005 18,438 16,673.36
11/30/2005 18,982 17,218.58
12/31/2005 18,904 17,324.33
1/31/2006 19,298 17,997.19
2/28/2006 19,456 18,107.03
3/31/2006 19,625 18,352.34
4/30/2006 20,086 18,818.71
5/31/2006 19,636 18,343.34
6/30/2006 19,782 18,460.68
7/31/2006 20,300 18,909.34
8/31/2006 20,582 19,225.84
9/30/2006 21,111 19,609.08
10/31/2006 21,730 20,250.95
11/30/2006 22,023 20,713.25
12/31/2006 22,561 21,178.21
1/31/2007 22,700 21,449.05
2/28/2007 22,207 21,114.66
3/31/2007 22,511 21,441.10
4/30/2007 23,434 22,233.42
5/31/2007 24,307 23,035.36
6/30/2007 23,903 22,497.11
7/31/2007 23,169 21,456.76
8/31/2007 23,725 21,697.19
9/30/2007 24,447 22,442.44
10/31/2007 24,383 22,444.92
11/30/2007 23,257 21,347.95
12/31/2007 23,092 21,141.51
1/31/2008 22,206 20,294.73
2/29/2008 21,199 19,444.42
3/31/2008 21,139 19,298.22
4/30/2008 21,800 20,238.93
5/31/2008 22,056 20,206.80
6/30/2008 19,997 18,272.58
7/31/2008 19,997 18,206.62
8/31/2008 20,478 18,515.91
9/30/2008 19,171 17,155.52
Class A Class B Class C++ Class I Class Z
------------------ ------------------ ------------------ ------------------ ------------------
Average Average Average Average Average
Value Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -26.21% -21.70% -24.77% -22.16% -22.81% -22.16% -21.62% -21.62% -21.28% -21.28%
- ----------------------------------------------------------------------------------------------------------------
5 Year Return 5.10% 36.11% 5.43% 31.86% 5.67% 31.75% 6.45% 36.68% 6.97% 40.04%
- ----------------------------------------------------------------------------------------------------------------
10 Year Return 6.72% 103.35% 6.81% 93.16% 6.66% 90.62% N/A N/A 7.97% 115.28%
- ----------------------------------------------------------------------------------------------------------------
Since Inception* 6.77% 130.77% 6.84% 119.25% 6.04% 97.13% 5.96% 48.82% 5.03% 67.39%
- ----------------------------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A and Class B: 11/19/96; Class C: 03/06/97; Class I:
11/16/01; Class Z: 04/03/98.
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2008, the SunAmerica Value Class A
returned -26.21% compared to -23.56% for the Russell 1000 Value Index. (The
performance table and graph do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
113
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica Disciplined Growth Fund
For the annual period ended September 30, 2008, the SunAmerica Disciplined
Growth Fund Class A returned -36.53% (before maximum sales charge),
underperforming its Russell 3000 Growth Index* benchmark, which returned
- -20.60% during the period. The Fund also underperformed its previous benchmark,
the S&P 500 Index**, which returned -21.98%.
Weakness in the housing market, chaos in the credit markets, fear of recession,
inflationary concerns, a weakening U.S. dollar and declining corporate earnings
growth are but some of the themes that defined the annual period. The sell-off
was broad-based, as all ten Russell 3000 Growth industry groups posted negative
returns. Consumer Staples and Healthcare were the best performing industries
during the annual period, while Utilities and Telecom Services companies were
the most disappointing.
The Fund's equity holdings were aided by an underweight position in the
Utilities sector. On the other hand, stock selection in the Information
Technology, Healthcare, Consumer Discretionary, and Consumer Staples groups, as
well as overweight exposure to the Materials sector were detractors from
relative performance.
Top-performing investments for the year included DryShips Inc., Excel Maritime
Carriers Ltd., Apache Corp., Genco Shipping & Trading Ltd., and General Mills
Inc. The positions which detracted most significantly from the Fund's
performance included Cal-Maine Foods Inc., Google Inc., EMCORE Corp.,
Medivation Inc., and Sangamo BioSciences Inc.
- --------
Past performance is no guarantee of future results.
* The Russell 3000 Growth Index measures the performance of those Russell 3000
Index companies with higher price-to-book ratios and higher forecasted
growth values. Russell 3000 Index consists of the 3,000 largest U.S.
companies based on total market capitalization. Indices are not managed and
an investor cannot invest directly into an index.
** The S&P 500 Index is Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices. Indices are not
managed and an investor cannot invest directly into an index.
The Fund has replaced the benchmark used for the prior fiscal year (the S&P 500
Index) with the Russell 3000 Growth Index, which management believes represents
a better comparison of performance given the Fund's strategy of investing in
growth-oriented companies without regard to market capitalization.
Securities listed may or may not be a part of current Portfolio construction.
114
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Since the Fund's inception on March 1, 1999, $10,000 invested in Disciplined
Growth Fund Class A shares would be valued at $8,438. The same amount invested
in securities mirroring the performance of the Russell 3000 Growth Index and
the S&P 500 Index would be valued at $8,589 and $11,040, respectively.
[CHART]
Disciplined Growth Russell 3000
Class A/#/ Growth Index S&P 500 Index
------------------ --------------- ---------------
3/1/1999 $ 9,427 $10,000.00 10,000.00
3/31/1999 9,842 10,514.64 10,399.98
4/30/1999 10,324 10,591.29 10,802.73
5/31/1999 10,091 10,291.16 10,548.00
6/30/1999 10,581 10,998.44 11,132.92
7/31/1999 10,204 10,649.40 10,786.13
8/31/1999 10,068 10,781.82 10,732.40
9/30/1999 9,759 10,584.65 10,438.55
10/31/1999 10,294 11,347.07 11,098.84
11/30/1999 10,535 11,998.28 11,324.89
12/31/1999 10,950 13,305.18 11,991.47
1/31/2000 10,716 12,717.13 11,389.02
2/29/2000 10,626 13,511.61 11,173.43
3/31/2000 11,561 14,275.76 12,266.52
4/30/2000 10,943 13,541.40 11,897.42
5/31/2000 10,596 12,825.11 11,653.29
6/30/2000 10,837 13,842.60 11,940.54
7/31/2000 10,837 13,223.06 11,754.03
8/31/2000 11,471 14,433.04 12,484.07
9/30/2000 10,965 13,111.16 11,825.04
10/31/2000 10,965 12,459.74 11,775.02
11/30/2000 10,113 10,594.62 10,846.68
12/31/2000 10,128 10,322.62 10,899.72
1/31/2001 10,475 11,044.27 11,286.44
2/28/2001 9,472 9,194.80 10,257.34
3/31/2001 8,824 8,206.21 9,607.54
4/30/2001 9,517 9,241.56 10,354.14
5/31/2001 9,608 9,131.41 10,423.51
6/30/2001 9,382 8,955.37 10,169.81
7/31/2001 9,306 8,693.87 10,069.74
8/31/2001 8,786 7,993.85 9,439.37
9/30/2001 8,183 7,162.90 8,677.14
10/31/2001 8,326 7,558.27 8,842.61
11/30/2001 8,974 8,278.13 9,520.93
12/31/2001 9,035 8,296.72 9,604.33
1/31/2002 8,733 8,140.00 9,464.21
2/28/2002 8,529 7,789.48 9,281.74
3/31/2002 8,876 8,085.71 9,630.82
4/30/2002 8,198 7,459.23 9,046.91
5/31/2002 8,190 7,260.00 8,980.23
6/30/2002 7,609 6,592.38 8,340.48
7/31/2002 7,006 6,185.12 7,690.34
8/31/2002 7,081 6,202.31 7,740.86
9/30/2002 6,282 5,571.05 6,899.59
10/31/2002 6,787 6,067.44 7,506.89
11/30/2002 7,142 6,413.76 7,948.74
12/31/2002 6,742 5,970.77 7,481.76
1/31/2003 6,531 5,824.76 7,286.14
2/28/2003 6,440 5,789.75 7,176.66
3/31/2003 6,478 5,896.23 7,246.14
4/30/2003 7,014 6,339.84 7,842.72
5/31/2003 7,315 6,681.71 8,255.54
6/30/2003 7,376 6,776.11 8,361.00
7/31/2003 7,481 6,968.55 8,508.48
8/31/2003 7,579 7,156.34 8,674.09
9/30/2003 7,489 7,071.96 8,582.25
10/31/2003 7,911 7,484.84 9,067.49
11/30/2003 7,979 7,575.61 9,147.18
12/31/2003 8,416 7,820.09 9,626.56
1/31/2004 8,514 7,998.55 9,803.23
2/29/2004 8,620 8,044.52 9,939.45
3/31/2004 8,499 7,909.54 9,789.46
4/30/2004 8,371 7,793.74 9,636.06
5/31/2004 8,439 7,939.73 9,768.27
6/30/2004 8,590 8,051.35 9,958.16
7/31/2004 8,348 7,574.10 9,628.55
8/31/2004 8,424 7,526.65 9,667.44
9/30/2004 8,499 7,625.29 9,772.14
10/31/2004 8,567 7,749.66 9,921.43
11/30/2004 8,846 8,048.47 10,322.73
12/31/2004 9,112 8,361.75 10,674.02
1/31/2005 8,877 8,074.34 10,413.89
2/28/2005 9,013 8,162.39 10,633.00
3/31/2005 8,854 8,000.16 10,444.80
4/30/2005 8,657 7,817.42 10,246.66
5/31/2005 8,861 8,209.76 10,572.40
6/30/2005 8,824 8,204.21 10,587.55
7/31/2005 9,036 8,620.15 10,981.12
8/31/2005 8,907 8,508.21 10,880.86
9/30/2005 8,968 8,549.87 10,968.94
10/31/2005 8,778 8,446.27 10,786.09
11/30/2005 9,043 8,820.42 11,194.02
12/31/2005 9,260 8,794.04 11,197.83
1/31/2006 10,799 9,008.84 11,494.32
2/28/2006 10,273 8,991.37 11,525.41
3/31/2006 10,662 9,152.23 11,668.91
4/30/2006 11,073 9,138.41 11,825.62
5/31/2006 10,372 8,796.65 11,485.27
6/30/2006 10,342 8,765.59 11,500.84
7/31/2006 9,946 8,573.54 11,571.78
8/31/2006 10,060 8,839.68 11,847.11
9/30/2006 9,976 9,067.22 12,152.41
10/31/2006 10,220 9,408.11 12,548.41
11/30/2006 10,700 9,598.05 12,787.03
12/31/2006 10,722 9,625.85 12,966.40
1/31/2007 10,913 9,867.44 13,162.49
2/28/2007 10,738 9,694.63 12,905.04
3/31/2007 10,898 9,750.24 13,049.39
4/30/2007 11,141 10,192.35 13,627.41
5/31/2007 11,614 10,566.94 14,102.94
6/30/2007 11,614 10,417.37 13,868.65
7/31/2007 11,614 10,223.07 13,438.65
8/31/2007 12,375 10,393.78 13,640.09
9/30/2007 13,274 10,818.04 14,150.22
10/31/2007 14,089 11,196.00 14,375.35
11/30/2007 13,106 10,753.41 13,774.32
12/31/2007 13,159 10,723.03 13,678.72
1/31/2008 11,652 9,874.81 12,858.27
2/29/2008 11,667 9,667.18 12,440.51
3/31/2008 11,065 9,608.49 12,386.76
4/30/2008 11,903 10,112.10 12,990.00
5/31/2008 12,604 10,498.53 13,158.22
6/30/2008 11,652 9,753.15 12,048.98
7/31/2008 10,623 9,598.09 11,947.65
8/31/2008 10,311 9,711.78 12,120.41
9/30/2008 8,438 8,589.15 11,040.36
Class A Class B Class C++
------------------ ------------------ ------------------
Disciplined Average Average Average
Growth Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -40.16% -36.53% -39.46% -36.94% -37.55% -36.91%
- --------------------------------------------------------------------------
5 Year Return 1.20% 12.67% 1.39% 9.15% 1.74% 9.03%
- --------------------------------------------------------------------------
Since Inception* -1.76% -10.49% -1.70% -15.12% -1.78% -15.83%
- --------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A, Class B and Class C: 03/01/99
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
++ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
For the 12 month period ended September 30, 2008, the SunAmerica Disciplined
Growth Fund Class A returned -40.16% compared to -20.60% for the Russell 3000
Growth Index and -21.98% for the S&P 500 Index. (The performance table and
graph do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.)
Performance information that includes a period prior to May 15, 2007 reflects
management of the Fund for such period in accordance with the investment goals
and principal investment strategies and techniques ("policies") of the Fund as
a tax managed fund. Accordingly, any such performance information may not
reflect (or may only partially reflect) the management of the Fund in
accordance with its current investment goals and policies, depending on the
period shown. The Fund has replaced the benchmark used in the Line Graph for
the prior fiscal year (the S&P 500 Index) with the Russell 3000 Growth Index,
which management believes represents a better approximation of performance
given the Fund's current investment goals and policies.
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
115
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
SunAmerica International Small-Cap Fund
For the annual period ended September 30, 2008, the SunAmerica International
Small-Cap Fund Class A returned -39.79% (before maximum sales charge),
underperforming its MSCI EAFE Small Cap Index (Net)* benchmark, which returned
- -35.24% during the period.
The events of the past 12 months have rendered an almost unprecedented shock to
the global financial system whereby the "credit crunch", or withdrawal of
liquidity from the financial system, has resulted in the demise of a number of
counterparties in the financial sector. This phenomenon led many economies into
recession, principally the U.S., United Kingdom, Ireland and Spain, where
buoyant real estate markets produced the most consumer leverage.
Consequently, risk premiums have risen rapidly, eroding valuations in all asset
classes, including equities which have declined in an environment of
constrained liquidity, high volatility, and a worsening economic outlook.
Although smaller companies have fared worse than their large-cap counterparts,
their valuations have become increasingly attractive.
At the end of the annual period, the world was waiting for the U.S. Congress to
pass the Troubled Assets Relief Program (TARP), a $700 billion package designed
to provide liquidity and confidence to the market by removing "toxic" assets
from financial institutions' balance sheets. It is hoped that TARP, combined
with local rescue plans for domestic banks and interest rate cuts, will bring
greater stability to the financial system and improve liquidity conditions for
businesses and households.
With respect to sector weighting versus the benchmark, portfolio performance
benefited from the combination of an overweight in Healthcare, an underweight
in Financials and stock selection in Utilities. Conversely, factors that
hindered results included security selection in the Information Technology,
Industrials and Consumer Discretionary sectors.
The top five individual security contributors to performance were Kakaku.com
Inc. (Japan, Information Technology), Hisamitsu Pharm Co. (Japan, Healthcare),
Chloride Group (Europe, Industrials), ASM Spa (Europe, Utilities) and Asahi
Soft Drinks (Japan, Consumer Staples). The top five security detractors were
Tanfield Group Plc (Europe, Industrials), Hellenic Exchanges S.A. (Europe,
Financials), Cookson Group (Europe, Industrials), Kloeckner & Co. SE (Europe,
Industrials), and KSB AG (Europe, Industrials).
- --------
Past performance is no guarantee of future results.
Investing internationally involves special risks, such as currency
fluctuations, and economic and political instability. Diversification does not
insure against market loss.
* The Morgan Stanley Capital International Europe, Australasia, and the Far
East Index ("MSCI EAFE") Small Cap Index (Net) is comprised of 40% of the
full market capitalization of the eligible small cap universe with each
industry group and each country in the MSCI EAFE Index.
Securities listed may or may not be a part of current Portfolio construction.
116
SunAmerica Equity Funds
COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued)
Since inception, $10,000 invested in International Small-Cap Class A shares
would be valued at $6,357. The same amount invested in securities mirroring the
performance of the MSCI EAFE Small-Cap Index (Net) would be valued at $7,051.
[CHART]
International Small-Cap MSCI EAFE Small-Cap
Class A/#/ Index (Net)
----------------------- ------------------
5/1/2006 $ 9,427 $10,000.00
5/31/2006 8,650 9,308.67
6/30/2006 8,431 9,104.43
7/31/2006 8,213 8,858.49
8/31/2006 8,311 9,106.42
9/30/2006 8,333 9,141.29
10/31/2006 8,673 9,476.29
11/30/2006 8,959 9,883.31
12/31/2006 9,336 10,211.42
1/31/2007 9,578 10,425.07
2/28/2007 9,608 10,599.39
3/31/2007 9,970 10,936.70
4/30/2007 10,294 11,342.32
5/31/2007 10,558 11,424.10
6/30/2007 10,596 11,398.72
7/31/2007 10,603 11,354.40
8/31/2007 10,181 10,768.44
9/30/2007 10,558 10,886.89
10/31/2007 10,988 11,565.22
11/30/2007 10,113 10,733.05
12/31/2007 9,712 10,359.07
1/31/2008 8,675 9,348.05
2/29/2008 8,896 9,744.98
3/31/2008 8,980 9,712.98
4/30/2008 9,163 9,938.55
5/31/2008 9,422 10,105.13
6/30/2008 8,743 9,273.88
7/31/2008 8,195 8,849.97
8/31/2008 7,569 8,510.06
9/30/2008 6,357 7,050.53
Class A Class B Class C
------------------ ------------------ ------------------
International Average Average Average
Small-Cap Annual Cumulative Annual Cumulative Annual Cumulative
Fund Return Return+ Return Return+ Return Return+
- ----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -43.23% -39.79% -42.57% -40.21% -40.80% -40.20%
- --------------------------------------------------------------------------
Since Inception* -17.09% -32.56% -16.64% -33.60% -15.59% -33.60%
- --------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would have been lower.
* Inception date: Class A, Class B and Class C: 05/02/06.
# For the purposes of the graph, it has been assumed that the maximum sales
charge, of 5.75% of offering price, was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
For the 12 month period ended September 30, 2008, the SunAmerica International
Small-Cap Fund Class A returned -43.23% compared to -35.24% for the MSCI EAFE
Small-Cap Index (Net). (The performance table and graph do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.)
- --------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset
values are not guaranteed and shares are not insured by the FDIC, the Federal
Reserve Board or any other agency. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may
be higher or lower than the original cost. Current performance may be higher or
lower than that shown. Performance as of the most recent month end is available
at www.sunamericafunds.com.
117
[LOGO]
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Trustees Shareholder Servicing This report is submitted
Samuel M. Eisenstat Agent solely for the general
Peter A. Harbeck AIG SunAmerica Fund information of
Dr. Judith L. Craven Services, Inc. shareholders of the
William F. Devin Harborside Financial Funds. Distribution of
Stephen J. Gutman Center this report to persons
Jeffrey S. Burum 3200 Plaza 5 other than shareholders
William J. Shea Jersey City, NJ of the Funds is
07311-4992 authorized only in
Officers con-nection with a
John T. Genoy, President Custodian and Transfer currently effective
and Chief Executive Agent pro-spectus, setting
Officer State Street Bank and forth details of the
Donna M. Handel, Trust Company Funds, which must precede
Treasurer P.O. Box 5607 or accom-pany this report.
Timothy P. Pettee, Vice Boston, MA 02110
President DELIVERY OF SHAREHOLDER
James Nichols, Vice VOTING PROXIES ON TRUST DOCUMENTS
President PORTFOLIO SECURITIES The Funds have adopted a
Cynthia A. Skrehot, Vice A description of the policy that allows them
President and Chief policies and procedures to send only one copy of
Compliance Officer that the Trust uses to a Fund's prospectus,
Gregory N. Bressler, determine how to vote proxy material, annual
Chief Legal Officer proxies relating to report and semi-annual
and Secretary securities held in a report (the "shareholder
Gregory R. Kingston, Fund's portfolio which is documents") to
Vice President and available in the Trust's shareholders with
Assistant Treasurer Statement of Additional multiple accounts
Kathleen Fuentes, Information, may be residing at the same
Assistant Secretary obtained without charge "household." This
John E. McLean, upon request, by calling practice is called
Assistant Secretary (800) 858-8850. This householding and reduces
Nori L. Gabert, Vice in-formation is also Fund expenses, which
President and available from the EDGAR benefits you and other
Assistant Secretary database on the U.S. shareholders. Unless the
Matthew Hackethal, Securities and Ex-change Funds receive
Anti-Money Laundering Commission's website at instructions to the
Compliance Officer http://www.sec.gov. con-trary, you will only
John E. Smith Jr., receive one copy of the
Assistant Treasurer PROXY VOTING RECORD ON shareholder documents.
SUNAMERICA EQUITY FUNDS The Funds will continue
Investment Adviser Information regarding how to household the
AIG SunAmerica Asset SunAmerica Equity Funds share-holder documents
Management Corp. voted proxies relating to indefinitely, until we
Harborside Financial securities held in are instructed otherwise.
Center SunAmerica Equity Funds If you do not wish to
3200 Plaza 5 during the most recent participate in
Jersey City, NJ twelve month period ended householding, please
07311-4992 June 30 is available, contact Shareholder
once filed with the U.S. Services at (800)
Distributor Securities and Exchange 858-8850 ext. 6010 or
SunAmerica Capital Commission, without send a written request
Services, Inc. charge, upon request, by with your name, the name
Harborside Financial calling (800) 858-8850 or of your fund(s) and your
Center on the U.S. Securities account number(s) to AIG
3200 Plaza 5 and Exchange Commission's SunAmerica Mutual Funds
Jersey City, NJ website at c/o BFDS, P.O. Box
07311-4992 http://www.sec.gov. 219186, Kansas City MO,
64121-9186. We will
DISCLOSURE OF QUARTERLY resume individual
PORTFOLIO HOLDINGS mailings for your account
The Trust is required to within thirty (30) days
file its complete of receipt of your
schedule of portfolio request.
holdings with the U.S.
Securities and Exchange
Commission for its first
and third fiscal quarters
on Form N-Q. The Trust's
Forms N-Q are available
on the U.S. Securities
and Exchange Commission's
website at
http://www.sec.gov. You
can also review and
obtain copies of the
Forms N-Q at the U.S.
Securities and Exchange
Com-mission's Public
Reference Room in
Wash-ington, DC
(information on the
operation of Public
Reference Room may be
obtained by calling
1-800-SEC-0330).
118
Funds distributed by SunAmerica Capital Services, Inc., an affiliate of
AIG SunAmerica Asset Management Corp.
Investors should carefully consider a Fund's investment objectives, risks,
charges and expenses before investing. The prospectus, containing this and
other important information, can be obtained from your financial adviser, the
SunAmerica Sales Desk at 800-858-8850, ext. 6003, or at
www.sunamericafunds.com. Read the prospectus carefully before investing.
www.sunamericafunds.com
EQANN - 9/08
Item 2. Code of Ethics
The SunAmerica Equity Funds (the "registrant") has adopted a Code of
Ethics applicable to its Principal Executive and Principal Accounting
Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002.
During the fiscal year ended 2008, there were no reportable amendments,
waivers or implicit waivers to a provision of the code of ethics that
applies to the registrant's Principal Executive and Principal
Accounting Officers.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that William J. Shea,
the Chairman of the registrant's Audit Committee, qualifies as an audit
committee financial expert, as defined in the instructions to Item
3(a) of Form N-CSR. Mr. Shea is considered to be "independent" for
purposes of Item 3(a)(2) of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two
fiscal years for professional services rendered by the registrant's
principal accountant were as follows:
2007 2008
(a) Audit Fees ....................$ 234,410 $ 236,700
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 81,000 $ 0
(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:
2007 2008
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 0 $ 0
(d) All Other Fees ................$ 1,927,000 $ 0
On December 31, 2007 Ernst & Young, LLP ("E&Y") resigned as principal
accountant for the SunAmerica Equity Funds. On March 5, 2008, the Board
of Trustees of the SunAmerica Equity Funds selected
PricewaterhouseCoopers, LLP as principal accountant.
In addition, E&Y is performing tax services for the registrant. For the
fiscal year ended 2008, the fees for these tax services were $116,075.
All Other Fees include amounts related to a SAS 70 Report on the
Processing of Transactions by Service Organizations.
(e) (1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser ("Adviser Affiliates") that provides ongoing
services to the registrant, if the engagement by the investment
adviser or Adviser Affiliate relates directly to the operations and
financial reporting of the registrant. The audit committee has not
presently established any pre-approval policies and procedures that
permit the pre-approval of the above services other than by the full
audit committee. Certain de minimis exceptions are allowed for non-
audit services in accordance with Rule 2-01(c)(7)(i)(C) of Regulation
S-X as set forth in the registrant's audit committee charter.
(2) No services included in (b)-(d) above in connection with fees
billed to the registrant or the investment adviser or Adviser
Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of
Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the
preceding fiscal year by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser,
and Adviser Affiliates that provides ongoing services to the registrant
for 2008 and 2007 were $485,370 and $1,927,000, respectively.
(h) Non-audit services rendered to the registrant's investment adviser and
any Adviser Affiliate that provides ongoing services to the registrant
that were not pre-approved pursuant to Paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X were considered by the registrant's audit
committee as to whether they were compatible with maintaining the
principal accountant's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees that were
implemented after the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a-
101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures as defined under Rule 30a-3(c) under
the Investment Company Act of 1940 (17 CFR 270.30a-3(c)). Based on
that evaluation, the registrant's management, including the President
and Treasurer, concluded that the registrant's disclosure controls and
procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Exhibits.
(a) (1) Code of Ethics applicable to its Principal Executive and
Principle Accounting Officers pursuant to Section 406 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.406.
Code of Ethics.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Equity Funds
By: /s/ John T. Genoy
------------------
John T. Genoy
President
Date: December 8, 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: December 8, 2008
By: /s/ Donna M. Handel
-------------------
Donna M. Handel
Treasurer
Date: December 8, 2008