================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM N-CSR
---------
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3807
SunAmerica Money Market Funds, Inc
----------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
---------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
AIG SunAmerica Asset Management Corp.
Harborside Financial Center,
3200 Plaza 5
Jersey City, NJ 07311
-----------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
Date of fiscal year end: December 31
Date of reporting period: December 31, 2008
================================================================================
Item 1. Reports to Stockholders
[PHOTO]
ANNUAL REPORT 2008
SUNAMERICA
Money Market Funds
[LOGO]
December 31, 2008 ANNUAL REPORT
SUNAMERICA MONEY MARKET FUNDS, INC.
SunAmerica Money Market Fund (SMAXX)
SunAmerica Municipal Money Market Fund (NMAXX)
Table of Contents
SHAREHOLDERS' LETTER........................................ 1
FUND REVIEWS................................................ 2
EXPENSE EXAMPLE............................................. 4
STATEMENT OF ASSETS AND LIABILITIES......................... 6
STATEMENT OF OPERATIONS..................................... 7
STATEMENT OF CHANGES IN NET ASSETS.......................... 8
FINANCIAL HIGHLIGHTS........................................ 9
PORTFOLIO OF INVESTMENTS.................................... 11
NOTES TO FINANCIAL STATEMENTS............................... 21
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..... 30
APPROVAL OF ADVISORY AGREEMENTS............................. 31
DIRECTORS AND OFFICERS INFORMATION.......................... 35
SHAREHOLDER TAX INFORMATION................................. 38
December 31, 2008 ANNUAL REPORT
Shareholders' Letter
Dear Shareholder:
We are pleased to present you with the Annual Report for the SunAmerica Money
Market and Municipal Money Market Fund for the annual period ended December 31,
2008.
As you know, 2008 was a rather disappointing year for both the equity and fixed
income markets, bringing painful declines to investors. It was also a
challenging environment for money market funds. Nevertheless, both the
SunAmerica Money Market and Municipal Money Market Fund produced positive
returns for the fiscal year.
In order to stabilize the fixed income markets, the Federal Reserve initiated
several new programs including the Primary Dealer Credit Facility, the
Commercial Paper Funding Facility and the Asset-backed Commercial Paper Money
Market Mutual Fund Liquidity Facility. In September 2008 the U.S. Treasury
announced the establishment of a temporary guarantee program for eligible money
market funds. At year end, the U.S. Treasury announced the extension of this
program until April 30, 2009 to support ongoing stability in the market./1/ The
SunAmerica Money Market Fund and the SunAmerica Municipal Money Market Fund
participated in both programs.
The worries generated by housing and the beginnings of a credit crunch in 2007
developed into full-blown issues during 2008, negatively impacting the economy
and the stock market. Over the course of the year, the Federal Reserve Open
Market Committee lowered the Federal Funds target rate seven times from 4.25%
at the start of the year to a range of 0.00%-0.25% at year-end. Continued
slowing in the housing market and increased levels of foreclosures translated
into price declines in the values of securities backed by mortgages,
specifically subprime loans. The valuation reduction and the resulting
write-downs associated with those securities eroded capital at financial
institutions across the world. Concerns over capital adequacy in the financial
sector spurred a cycle of ratings downgrades, declines in equity prices, and a
flight to quality. Economic indicators evidenced a slowing economy, as the
unemployment rate rose to 7.2% at year-end.
I suggest you read the discussions provided by the portfolio managers of the
SunAmerica Money Market Fund and SunAmerica Municipal Money Market Fund on the
following pages. They provide important information regarding both the
challenges faced and the strategies pursued.
We value the trust you place in us and remain diligent in the management of
your assets. Thank you for your continued investment in our funds.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
President and CEO
AIG SunAmerica Asset Management Corp.
- --------
Past performance is no guarantee of future results.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.
/1/The U.S. Treasury may elect to extend the program beyond April 30, 2009
through the close of business on September 18, 2009.
1
SunAmerica Money Market Fund
Andrew Doulos, Portfolio Manager
AIG SunAmerica Asset Management Corp.
The SunAmerica Money Market Fund (Class A) returned 1.84% for the 12-month
annual period ended December 31, 2008, as compared with the three-month T-Bill
index which returned 1.41% for the same period.
The annual period was a year for the history books. The fiscal year ended
with the economy contracting rapidly, consumer confidence eroding, increasing
joblessness, a threat of deflation, house prices collapsing, and many major
financial institutions being supported by government intervention. The stress
on the financial markets was palpable.
After starting the annual period with a Federal Funds rate of 4.25%, the
Federal Open Market Committee (FOMC) steadily began lowering the rate, first
with a 0.75 basis point reduction at an unscheduled inter-meeting on January
22, followed by six subsequent reductions to finish the year with a target
range of 0.00-0.25%.
In addition to monetary policy, the Federal Reserve also initiated several
new programs to stabilize the fixed income markets including the introduction
of the Primary Dealer Credit Facility and the Commercial Paper Funding Facility
(CPFF) in March, and the Asset-backed Commercial Paper Money Market Mutual Fund
Liquidity Facility (AMLF) in September. In addition, the U.S. Treasury
announced in September 2008 the establishment of a temporary guarantee program
for eligible money market funds. In December, the U.S. Treasury announced the
extension of this program until April 30, 2009 to support ongoing stability in
the market./1/ The SunAmerica Money Market Fund and the SunAmerica Municipal
Money Market Fund participated in both Treasury Department programs.
Yields on money market securities decreased steadily throughout the annual
period with 1-month CDs yielding approximately 0.65% at year-end, down from
roughly 4.60% at the start of the year. While yields declined throughout the
year, it is important to note there was a dramatic spike in yields of
commercial paper and other non-Treasury money market instruments following
Lehman Brothers' September bankruptcy filing as banks lost confidence in
lending to other financial institutions.
During the year, we purchased longer-dated fixed-rate instruments as well as
floating rate notes to enhance the income potential of the Fund. In addition,
we selectively purchased short-dated securities as we discovered relative value
opportunities.
Our focus is on high credit quality and liquidity in this challenging market.
- --------
Past performance is no guarantee of future results.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.
Holdings and weightings are as of December 31, 2008 and are subject to change
after that date. The portfolio is actively managed and its holdings and
composition will differ over time.
/1/ The U.S. Treasury may elect to extend the program beyond April 30, 2009
through the close of business on September 18, 2009.
2
SunAmerica Municipal Money Market Fund
J. Hutchison Bryan, Portfolio Manager
AIG Investments
The SunAmerica Municipal Money Market Fund (Class A) returned 1.53% for the
annual period ended December 31, 2008.
Primarily, the Fund is impacted by the relationship between, and levels of,
shorter-term floating and longer-term fixed-rate money market securities,
depending upon the Fund's weighted average maturity. The weighted average
maturity (WAM) is an average of the portfolio's securities weighted by the
dollar amount that is invested in each maturity; the higher the WAM, the longer
the securities have until maturity. The portfolio WAM ranged from a high of
20.8 days in January to a low of 1.6 days in December during the annual period.
During the first quarter, the Fund held the majority of its assets in
variable-rate demand notes (VRDNs) whose rates reset weekly, with the Fund
being diversified among various sectors and states. In the second quarter, the
WAM of the portfolio declined relative to the end of the prior quarter. Over
the course of the first half of the year, the Fund exited from variable-rate
holdings as monoline bond insurers, specifically FGIC, MBIA, and AMBAC
insurance, suffered repeated downgrades from their initial "AAA" ratings.
In the third and fourth quarters, the Fund benefited from its proportion of
VRDNs relative to fixed-rate notes, as the benchmark yield for variable-rate
obligations -- the SIFMA Municipal Swap Index* -- rose dramatically in
September and reached a record high of 7.96%, remaining elevated until the end
of October. Near the end of the third quarter, money markets were temporarily
roiled when the net asset value of a large taxable money market fund
irreparably "broke the buck," its net asset value falling below $1.00. The
selling caused by redemptions increased the amount of supply, which caused
dealers to remarket securities at higher yields in an attempt to attract buyers
and reduce inventories heading into quarter-end. The yields for the
shorter-term securities exceeded those of the longer-term, fixed-rate money
market securities during that time period and the Fund's mix of variable rate
securities was weighted toward general obligation, housing and transportation
credits.
With the shift to a greater proportion of variable-rate securities, the Fund
did not fully participate in the rally of longer money market maturities when
yields peaked in mid-October and then declined over the rest of the fourth
quarter. Over the final quarter, both fixed and floating tax exempt money
market rates declined in sympathy with movements in short taxable yields as the
Federal Reserve lowered the target Federal Funds rate significantly over the
course of three meetings. As a result, at the end of the quarter the yield
curve for note maturities was nearly flat and yields were below one percent.
The Fund ended the year with a WAM of 4.6 days. Variable rate demand
obligations comprised the bulk of the Fund's investments, with less than 1%
exposure to fixed-rate general obligation or revenue notes. The largest sector
exposures were in the Housing (23%), Transportation (7%) and Healthcare (11%)
sectors with California (16%), New York (10%) and North Carolina (6%)
representing our three largest state exposures.
- --------
Past performance is no guarantee of future results.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.
Holdings and weightings are as of December 31, 2008 and are subject to change
after that date. The portfolio is actively managed and its holdings and
composition will differ over time.
* The Securities Industry and Financial Markets Association (SIFMA) Municipal
Swap Index is a 7-day high-grade market index comprised of tax-exempt
variable-rate demand obligations.
3
SunAmerica Money Market Funds
EXPENSE EXAMPLE --December 31, 2008 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of a Fund in the SunAmerica Money Market Funds, Inc., you may
incur two types of costs: (1) transaction costs, including sales charges on
purchase payments and contingent deferred sales charges and (2) ongoing costs,
including management fees, distribution and service fees, and other Fund
expenses. This Example set forth below is intended to help you understand your
ongoing costs (in dollars) of investing in the Funds and to compare these costs
with the ongoing costs of investing in other mutual funds. The Example is based
on an investment of $1,000 invested at July 1, 2008 and held until December 31,
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 December 31, 2008" to estimate the expenses you paid on your
account during this period. For shareholder accounts in classes other than
Class I, the "Expenses Paid During the Six Months Ended December 31, 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 December 31, 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 a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended December 31, 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 Portfolios and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds. For shareholder accounts in classes other
than Class I, the "Expenses Paid During the Six Months Ended December 31, 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 December 31, 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 a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended December 31, 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, small account
fees and administrative fees, if applicable to your account. Please refer to
the Fund's prospectus and/or qualified retirement plan document for more
information. Therefore, the "Hypothetical" example is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transaction costs and other fees
were included, your costs would have been higher.
4
SunAmerica Money Market Funds
EXPENSE EXAMPLE -- December 31, 2008 -- (unaudited) (continued)
Actual Hypothetical
-------------------------------------------- ------------------------------------------------
Ending Ending Account
Account Value Expenses Paid Value using Expenses Paid Expense
Beginning Using Actual During the Beginning a Hypothetical 5% During the Ratio
Account Value Returns at Six Months Ended Account Value Assumed Return at Six Months Ended as of
at July 1, December 31, December 31, at July 1, December 31, December 31, December 31,
2008 2008 2008* 2008 2008 2008* 2008*
------------- ------------- ---------------- ------------- ----------------- ---------------- ------------
Money Market
Fund
Class A..... $1,000.00 $1,006.94 $4.84 $1,000.00 $1,020.31 $4.88 0.96%
Class B#.... $1,000.00 $1,002.66 $9.16 $1,000.00 $1,015.99 $9.22 1.82%
Class C .... $1,000.00 $1,003.16 $8.61 $1,000.00 $1,016.54 $8.67 1.71%
Class I#.... $1,000.00 $1,007.74 $4.04 $1,000.00 $1,021.11 $4.06 0.80%
Municipal
Money Market
Fund
Class A#.... $1,000.00 $1,007.92 $4.29 $1,000.00 $1,020.86 $4.32 0.85%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 184 days divided by 366
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges, small account fees
and administrative fees, if applicable to your account. Please refer to your
Prospectus and/or your qualified retirement plan document for more
information.
# During the stated period, the investment adviser and distributor either
waived a portion of or all of the fees and assumed a portion of or all
expenses for the Funds. As a result, if these fees and expenses had not been
waived, the "Actual/Hypothetical Ending Account Value" would have been lower
and the "Actual/Hypothetical Expenses Paid During the Six Months Ended
December 31, 2008" and the "Expense Ratios" would have been higher.
5
SunAmerica Money Market Funds
STATEMENT OF ASSETS AND LIABILITIES -- December 31, 2008
Money Market Municipal Money
Fund Market Fund
-------------- ---------------
ASSETS:
Short-term investment securities, at value* (unaffiliated)......... $ 935,465,202 $185,118,636
Repurchase agreements (cost approximates market value)............. 140,719,000 --
-------------- ------------
Total Investments................................................ $1,076,184,202 $185,118,636
-------------- ------------
Cash............................................................... 1,101 445,681
Receivable for:
Fund shares sold................................................. 508,828 3,181
Sale of investments.............................................. -- 1,980,179
Dividends and interest........................................... 1,244,198 746,339
Prepaid expenses and other assets.................................. 230,561 22,040
Due from investment adviser for expense reimbursements/fee waivers. 25,248 364
Due from distributor for fee waivers............................... 36 --
-------------- ------------
Total assets..................................................... 1,078,194,174 188,316,420
-------------- ------------
LIABILITIES:
Payable for:
Fund shares redeemed............................................. 351,563 100
Investments advisory and management fees......................... 437,940 58,667
Distribution and service maintenance fees........................ 178,404 25,146
Transfer agent fees and expenses................................. 226,537 41,222
Dividends payable.................................................. 31,591 2,001
Directors' fees and expenses....................................... 284,084 27,818
Other accrued expenses............................................. 151,202 78,771
-------------- ------------
Total liabilities............................................... 1,661,321 233,725
-------------- ------------
Net assets...................................................... $1,076,532,853 $188,082,695
============== ============
NET ASSETS REPRESENTED BY:
Common stock, $.001 par value (10 billion shares authorized)....... $ 1,081,409 $ 188,082
Paid-in capital.................................................... 1,080,232,445 187,894,033
-------------- ------------
1,081,313,854 188,082,115
Accumulated undistributed net investment income (loss)............. 140,854 25,090
Accumulated realized gain (loss) on investments.................... (4,921,855) (24,510)
-------------- ------------
Net assets...................................................... $1,076,532,853 $188,082,695
============== ============
Class A:
Net assets......................................................... $ 995,968,489 $188,082,695
Shares outstanding................................................. 1,000,482,993 $188,081,941
Net asset value and redemption price per share
(excluding any applicable contingent deferred sales charge)....... $ 1.00 $ 1.00
============== ============
Class B:
Net assets......................................................... $ 23,058,438 $ --
Shares outstanding................................................. 23,153,926 --
Net asset value and redemption price per share
(excluding any applicable contingent deferred sales charge)....... $ 1.00 $ --
============== ============
Class C:
Net assets......................................................... $ 40,507,634 $ --
Shares outstanding................................................. 40,697,489 --
Net asset value and redemption price per share
(excluding any applicable contingent deferred sales charge)....... $ 1.00 $ --
============== ============
Class I:
Net assets......................................................... $ 16,998,292 $ --
Shares outstanding................................................. 17,074,435 --
Net asset value and redemption price per share..................... $ 1.00 $ --
============== ============
*Amortized cost of short-term investment securities (unaffiliated). $ 935,465,202 $185,118,636
============== ============
See Notes to Financial Statements
6
SunAmerica Money Market Funds
STATEMENT OF OPERATIONS -- For the year ended December 31, 2008
Money Market Municipal Money
Fund Market Fund
------------ ---------------
INVESTMENT INCOME:
Interest (unaffiliated)................................................ $31,926,462 $3,845,879
Dividends (unaffiliated)............................................... -- 1,819
----------- ----------
Total investment income............................................. 31,926,462 3,847,698
----------- ----------
EXPENSES:
Investment advisory and management fees................................ 5,441,135 567,976
Distribution and service maintenance fees
Class A............................................................... 1,595,715 242,079
Class B............................................................... 194,099 1,403
Class C............................................................... 356,824 6,635
Transfer agent fees and expenses
Class A............................................................... 2,404,684 360,343
Class B............................................................... 64,003 2,088
Class C............................................................... 95,446 4,178
Class I............................................................... 38,391 --
Registration fees
Class A............................................................... 20,122 21,491
Class B............................................................... 5,266 6,518
Class C............................................................... 5,663 8,786
Class I............................................................... 34,855 --
Custodian and accounting fees.......................................... 152,491 61,886
Reports to shareholders................................................ 224,336 12,428
Audit and tax fees..................................................... 50,828 50,828
Legal fees............................................................. 146,022 22,299
Directors' fees and expenses........................................... 175,679 32,660
Other expenses......................................................... 204,405 30,328
----------- ----------
Total expenses before fee waivers, expense reimbursements and
custody credits.................................................... 11,209,964 1,431,926
Fees waived and expenses reimbursed by investment adviser and
distributor (Note 3)............................................... (31,464) (20,668)
Custody credits earned on cash balances............................. (3,110) (8,410)
----------- ----------
Net expenses........................................................ 11,175,390 1,402,848
----------- ----------
Net investment income (loss)........................................... 20,751,072 2,444,850
----------- ----------
Net realized gain (loss) on investments................................ (4,918,048) (188)
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........ $15,833,024 $2,444,662
=========== ==========
See Notes to Financial Statements
7
SunAmerica Money Market Funds
STATEMENT OF CHANGES IN NET ASSETS
Money Market Fund Municipal Money Market Fund
------------------------------- -----------------------------
For the year For the year For the year For the year
ended ended ended ended
December 31, December 31, December 31, December 31,
2008 2007 2008 2007
-------------- --------------- ------------ ---------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........... $ 20,751,072 $ 61,349,650 $ 2,444,850 $ 3,087,724
Net realized gain (loss) on investments (4,918,048) 58,407 (188) --
-------------- --------------- ------------ ---------------
Net increase (decrease) in net assets
resulting from operations.............. $ 15,833,024 $ 61,408,057 $ 2,444,662 $ 3,087,724
-------------- --------------- ------------ ---------------
Distributions to shareholders from:
Net investment income (Class A)........ (19,840,997) (59,290,555) (2,440,520) (3,071,615)
Net investment income (Class B)........ (204,882) (700,009) (808) (6,716)
Net investment income (Class C)........ (367,143) (636,557) (3,334) (9,393)
Net investment income (Class I)........ (344,204) (723,986) -- --
-------------- --------------- ------------ ---------------
Total distributions to shareholders..... (20,757,226) (61,351,107) (2,444,662) (3,087,724)
-------------- --------------- ------------ ---------------
Net increase (decrease) in net assets
resulting from capital share
transactions (Note 5).................. (161,246,024) (523,397,627) 33,371,054 52,958,700
-------------- --------------- ------------ ---------------
Total increase (decrease) in net assets. (166,170,226) (523,340,677) 33,371,054 52,958,700
-------------- --------------- ------------ ---------------
NET ASSETS:
Beginning of year....................... 1,242,703,079 1,766,043,756 154,711,641 101,752,941
-------------- --------------- ------------ ---------------
End of year*............................ $1,076,532,853 $ 1,242,703,079 $188,082,695 $ 154,711,641
============== =============== ============ ===============
*Includes accumulated undistributed net
investment income (loss)............... $ 140,854 $ 84,794 $ 25,090 $ 580
============== =============== ============ ===============
See Notes to Financial Statements
8
SunAmerica Money Market Funds
FINANCIAL HIGHLIGHTS
MONEY MARKET FUND
-----------------
Net Net Ratio of net
Asset Dividends Asset Net Assets Ratio of investment
Value Net from net Value end of expenses income to
beginning investment investment end of Total period to average average
Period Ended of period income(1) income period Return(2) (000's) net assets net assets
- ------------ --------- ---------- ---------- ------ --------- ---------- ---------- ------------
Class A
-------
12/31/04 $1.00 $0.01 $(0.01) $1.00 0.50% $1,630,353 0.90% 0.49%
12/31/05 1.00 0.02 (0.02) 1.00 2.38 1,587,641 0.89 2.35
12/31/06 1.00 0.04 (0.04) 1.00 4.22 1,711,783 0.89 4.14
12/31/07 1.00 0.04 (0.04) 1.00 4.32 1,182,789 0.90 4.27
12/31/08 1.00 0.02 (0.02) 1.00 1.84 995,968 0.94 1.86
Class B
-------
12/31/04 $1.00 $0.00 $(0.00) $1.00 0.07% $ 42,437 1.32%(3) 0.06%(3)
12/31/05 1.00 0.02 (0.02) 1.00 1.52 31,738 1.74 1.46
12/31/06 1.00 0.03 (0.03) 1.00 3.32 23,806 1.76 3.26
12/31/07 1.00 0.03 (0.03) 1.00 3.42 18,326 1.77 3.38
12/31/08 1.00 0.01 (0.01) 1.00 0.98 23,058 1.78(3) 0.95(3)
Class C+
-------
12/31/04 $1.00 $0.00 $(0.00) $1.00 0.07% $ 16,985 1.33%(3) 0.06%(3)
12/31/05 1.00 0.02 (0.02) 1.00 1.54 13,497 1.71 1.59
12/31/06 1.00 0.03 (0.03) 1.00 3.33 12,399 1.74 3.31
12/31/07 1.00 0.03 (0.03) 1.00 3.43 23,046 1.76 3.34
12/31/08 1.00 0.01 (0.01) 1.00 1.04 40,508 1.72 0.93
Class I
-------
12/31/04 $1.00 $0.01 $(0.01) $1.00 0.58% $ 11,895 0.80%(3) 0.59%(3)
12/31/05 1.00 0.03 (0.03) 1.00 2.49 13,708 0.80(3) 2.49(3)
12/31/06 1.00 0.04 (0.04) 1.00 4.31 18,057 0.80(3) 4.26(3)
12/31/07 1.00 0.04 (0.04) 1.00 4.43 18,543 0.80(3) 4.32(3)
12/31/08 1.00 0.02 (0.02) 1.00 1.98 16,998 0.80(3) 1.97(3)
- --------
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
(3) Net of the following expense reimbursements/waivers (based on average net
assets):
12/31/04 12/31/05 12/31/06 12/31/07 12/31/08
-------- -------- -------- -------- --------
Class B.. 0.39% -- % -- % -- % 0.00%
Class C+. 0.39 -- -- -- --
Class I.. 0.09 0.05 0.05 0.04 0.18
+ Effective February 23, 2004, Class II shares were redesignated as Class C
shares.
See Notes to Financial Statements
9
SunAmerica Money Market Funds
FINANCIAL HIGHLIGHTS -- (continued)
MUNICIPAL MONEY MARKET FUND
---------------------------
Net Net Net Ratio of net
Asset Dividends Asset Assets Ratio of investment
Value Net from net Value end of expenses income to
beginning investment investment end of Total period to average average
Period Ended of period income(1) income period Return(2) (000's) net assets(3) net assets(3)
- ------------ --------- ---------- ---------- ------ --------- -------- ------------- -------------
Class A
------- - - - - - - - -
12/31/04 $1.00 $0.00 $(0.00) $1.00 0.36% $ 97,374 0.87% 0.35%
12/31/05 1.00 0.02 (0.02) 1.00 1.62 84,817 0.81 1.58
12/31/06 1.00 0.03 (0.03) 1.00 2.69 101,083 0.78 2.68
12/31/07 1.00 0.03 (0.03) 1.00 2.84 153,906 0.83 2.80
12/31/08 1.00 0.02 (0.02) 1.00 1.53 188,083 0.83 1.45
- --------
(1) Calculated based upon average shares outstanding.
(2) Total return is not annualized and does not reflect sales load but does
include expense reimbursements.
(3) Net of the following expense reimbursements/waivers (based on average net
assets):
12/31/04 12/31/05 12/31/06 12/31/07 12/31/08
-------- -------- -------- -------- --------
Class A. 0.00% 0.04% 0.00% 0.01% 0.01%
See Notes to Financial Statements
10
SunAmerica Money Market Fund
PORTFOLIO PROFILE -- December 31, 2008 -- (unaudited)
Industry Allocation*
U.S. Government Agencies.................... 53.2%
Repurchase Agreement........................ 13.1
Money Center Banks.......................... 10.0
Foreign Banks............................... 9.3
Commercial Banks--Canadian.................. 2.5
Super-Regional Banks--U.S................... 2.5
Finance..................................... 2.2
Asset Backed Commercial Paper / Receivables. 2.0
Diversified Financial Services.............. 1.3
Asset Backed / Multi-Asset.................. 1.2
U.S. Government Securities.................. 1.2
Cosmetics-Toiletries........................ 1.2
Treasury / Agency........................... 0.3
Asset Backed Commercial Paper / Finance..... 0.0
-----
100.0%
=====
Weighted average days to maturity........... 70.3
Credit Quality Allocation@#
A-1+........................ 99.7%
D........................... 0.0
Not Rated................... 0.3
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets
@ Source: Standards and Poors
# Calculated as a percentage of total debt issues
11
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2008
Principal Market Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES -- 86.9%
ASSET-BACKED COMMERCIAL PAPER -- 3.3%
Cancara Asset Securitisation LLC
2.40% due 01/08/09*................... $13,400,000 $ 13,393,747
Ranger Funding Co. LLC
1.25% due 02/23/09*................... 8,550,000 8,534,265
1.40% due 01/23/09*.................. 13,300,000 13,288,621
------------
Total Asset-Backed Commercial Paper
(amortized cost $35,216,633)......... 35,216,633
------------
CERTIFICATES OF DEPOSIT -- 24.2%
Bank of America NA
2.25% due 05/11/09.................... 13,200,000 13,200,000
2.73% due 01/20/09................... 13,500,000 13,500,000
Barclays Bank PLC
1.55% due 01/05/09+................... 13,400,000 13,400,000
1.94% due 01/12/09+.................. 5,500,000 5,496,146
1.95% due 03/05/09................... 13,500,000 13,500,000
2.22% due 06/18/09................... 13,400,000 13,400,000
BNP Paribas
2.04% due 03/09/09.................... 13,500,000 13,500,000
Calyon
1.50% due 03/19/09.................... 13,400,000 13,400,000
1.69% due 01/08/09................... 13,500,000 13,500,000
Citibank NA
1.70% due 01/05/09.................... 13,500,000 13,500,000
J.P. Morgan Chase Bank
1.35% due 01/20/09.................... 13,300,000 13,300,000
1.40% due 02/20/09................... 13,300,000 13,300,000
Lloyds Bank PLC
1.90% due 02/17/09.................... 13,300,000 13,298,261
2.05% due 03/02/09................... 13,500,000 13,499,995
Nordea Bank Finland
1.00% due 03/17/09+................... 13,400,000 13,400,278
Royal Bank of Canada
2.71% due 02/09/09+................... 13,500,000 13,490,035
4.61% due 01/16/09+.................. 13,250,000 13,253,919
Royal Bank of Scotland
1.50% due 03/19/09.................... 13,400,000 13,400,000
UBS AG
1.95% due 03/18/09+................... 13,400,000 13,400,000
2.05% due 01/06/09................... 13,400,000 13,400,000
------------
Total Certificates of Deposit
(amortized cost $260,138,634)........ 260,138,634
------------
COMMERCIAL PAPER -- 3.7%
HSBC Bank USA
1.95% due 02/12/09.................... 13,300,000 13,269,742
Proctor & Gamble Co.
1.20% due 02/19/09*................... 13,300,000 13,278,277
Rabobank Nederland NV
2.12% due 01/05/09.................... 13,500,000 13,500,030
------------
Total Commercial Paper
(amortized cost $40,048,049)......... 40,048,049
------------
CORPORATE NOTES -- 0.0%
Cheyne Finance LLC
5.20% due 01/07/08*(1)(2)(3)(4)(6)(7)
(amortized cost $232,526)............. 8,996,018 232,526
------------
Principal Market Value
Security Description Amount/Shares (Note 2)
------------------------------------------------------------------
MEDIUM TERM NOTES -- 1.0%
General Electric Capital Corp.
4.25% due 01/05/09+
(amortized cost $10,502,310).......... $10,500,000 $ 10,502,310
------------
REGISTERED INVESTMENT COMPANIES -- 0.3%
SSgA U.S. Government Money Market Fund
(amortized cost $3,707,778)........... 3,707,778 3,707,778
------------
U.S. GOVERNMENT AGENCIES -- 53.2%
Agency for International Development
Panama
0.59% due 01/02/09+................... 1,788,352 1,792,222
Federal Home Loan Bank.................
0.01% due 01/05/09................... 11,000,000 10,996,700
0.01% due 01/06/09................... 13,500,000 13,494,937
0.01% due 01/16/09................... 13,500,000 13,484,813
1.18% due 06/01/09................... 13,400,000 13,333,677
1.20% due 04/23/09................... 5,000,000 4,981,333
1.32% due 05/11/09................... 13,400,000 13,336,127
1.45% due 05/01/09................... 13,400,000 13,335,233
1.50% due 07/17/09................... 11,000,000 10,909,708
1.68% due 11/20/09................... 13,400,000 13,198,017
1.70% due 05/18/09................... 13,100,000 13,015,250
1.80% due 05/13/09................... 13,200,000 13,112,880
1.80% due 11/16/09................... 13,300,000 13,087,865
1.98% due 02/27/09+.................. 13,200,000 13,226,617
2.00% due 01/05/09................... 13,500,000 13,497,000
2.03% due 04/23/09................... 13,250,000 13,277,236
2.12% due 03/03/09................... 13,500,000 13,451,505
2.15% due 01/20/09................... 13,500,000 13,484,681
2.20% due 04/01/09................... 11,300,000 11,297,569
2.30% due 01/15/09................... 13,800,000 13,799,337
2.30% due 04/30/09................... 13,500,000 13,397,363
2.40% due 01/09/09................... 13,500,000 13,492,800
2.40% due 01/14/09................... 13,500,000 13,488,300
2.40% due 01/26/09................... 11,000,000 10,981,667
2.51% due 05/07/09................... 13,700,000 13,693,676
2.54% due 02/04/09................... 13,500,000 13,467,615
2.60% due 02/27/09................... 13,500,000 13,444,425
2.65% due 03/16/09................... 13,500,000 13,426,463
2.70% due 02/11/09................... 11,100,000 11,065,868
2.90% due 05/18/09................... 13,500,000 13,351,013
3.00% due 01/07/09................... 13,600,000 13,593,200
3.00% due 04/20/09................... 13,500,000 13,377,375
3.00% due 04/21/09................... 13,500,000 13,376,250
3.00% due 04/22/09................... 13,500,000 13,375,125
3.00% due 04/23/09................... 13,500,000 13,374,000
3.00% due 04/24/09................... 13,500,000 13,372,875
3.00% due 04/29/09................... 13,500,000 13,367,250
3.10% due 04/15/09................... 13,500,000 13,379,100
Federal National Mtg. Assoc............
1.00% due 04/20/09................... 26,600,000 26,519,461
1.05% due 05/01/09................... 13,300,000 13,253,450
1.55% due 09/02/09................... 13,400,000 13,259,226
1.65% due 11/02/09................... 13,400,000 13,212,679
2.18% due 02/12/09+.................. 29,000,000 28,922,742
------------
Total U.S. Government Agencies
(amortized cost $572,304,630)........ 572,304,630
------------
12
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2008 -- (continued)
Principal Market Value
Security Description Amount (Note 2)
---------------------------------------------------------------
U.S. GOVERNMENT TREASURIES -- 1.2%
United States Treasury Notes
1.26% due 07/02/09
(amortized cost $13,314,642)..... $ 13,400,000 $ 13,314,642
--------------
Total Short-Term Investment Securities -- 86.9%
(amortized cost $935,465,202)... 935,465,202
--------------
REPURCHASE AGREEMENT -- 13.1%
UBS Securities, LLC
Joint Repurchase Agreement(5)
(amortized cost $140,719,000).... 140,719,000 140,719,000
--------------
TOTAL INVESTMENTS
(amortized cost $1,076,184,202). 100.0% 1,076,184,202
Other assets less liabilities..... 0.0 348,651
------------ --------------
NET ASSETS........................ 100.0% $1,076,532,853
============ ==============
- --------
* Securities exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be sold in transactions exempt from registration,
normally to qualified institutional buyers. The Fund has no right to demand
registration of these securities. At December 31, 2008, the aggregate value
of these securities was $48,727,436 representing 4.5% of net assets. Unless
otherwise indicated these securities are not considered to be illiquid
+ Variable Rate Security--the rate reflected is as of December 31, 2008,
maturity date reflects next reset date.
(1)Non-income producing security
(2)Security in default
(3)Floating rate security where the rate fluctuates. The rate moves up or down
at each reset date. The rate reflected is as of December 31, 2008.
(4)Illiquid security. At December 31, 2008, the aggregate value of these
securities was $232,526, representing 0.0% of net assets.
(5)See Note 2 for details of Joint Repurchase Agreements.
(6)Security issued by a structured investment vehicle ("SIV"). These SIV's may
be affected by, among other things, changes in: interest rates, the quality
of the underlying assets or the market's assessment thereof, factors
concerning the interest in and structure of the issuer or the originator of
the receivables, or the credit worthiness of the entities that provide any
credit enhancements.
(7)On August 28, 2007, mark to market losses experienced in the investment
portfolio of SIV Portfolio, PLC ("SIV Portfolio") (formerly Cheyne Finance
PLC), the issuer of the underlying notes held by Cheyne Finance LLC, the
issuer of the medium term notes (the "Notes") held by the Portfolio,
triggered the appointment of receivers (Deloitte & Touche LLP)
(collectively, the "Receiver"). On October 17, 2007, the Receiver determined
that SIV Portfolio was about to become unable to pay its debts as they came
due and that an insolvency event had occurred. As a result of this
determination, the Notes became immediately due and payable and are in
default as a result of non payment. These events, which are based on
published reports, materially adversely affected the ability of SIV
Portfolio to make interest and principal payments due on the Notes. On
April 16, 2008, however, the Receiver made a partial payment of principal
and interest due on the Notes. On July 23, 2008, the Receiver concluded the
sale of SIV Portfolio's investment portfolio and a distribution to senior
creditors, including the Fund, was made. Furthermore, an additional
distribution to senior creditors, including the Fund, was made on August 13,
2008. The market value of the Notes, as of December 31, 2008, represents the
Notes' residual value that may be distributed to the Fund.
See Notes to Financial Statements
13
SunAmerica Municipal Money Market Fund
PORTFOLIO PROFILE -- December 31, 2008 -- (unaudited)
State Allocation*
California........................ 15.5%
New York.......................... 9.8
Washington........................ 6.3
North Carolina.................... 6.0
Colorado.......................... 5.5
Illinois.......................... 5.3
South Dakota...................... 4.2
Ohio.............................. 3.9
Georgia........................... 3.8
Pennsylvania...................... 3.6
Kentucky.......................... 3.4
Michigan.......................... 3.2
Marylan........................... 3.1
Utah.............................. 3.0
New Jersey........................ 2.9
North Dakota...................... 2.5
Indiana........................... 2.2
Nevada............................ 2.2
Massachusetts..................... 2.0
Alabama........................... 1.6
Oregon............................ 1.3
Wyoming........................... 1.3
Missouri.......................... 1.2
Texas............................. 1.2
Arizona........................... 1.1
Kansas............................ 0.6
Idaho............................. 0.5
Maine............................. 0.5
Virginia.......................... 0.3
Florida........................... 0.2
New Hampshire..................... 0.2
Wisconsin......................... 0.0
----
98.4%
====
Weighted average days to maturity. 4.6
Credit Quality Allocation @#
A-1.......................... 83.4%
Not Rated+................... 16.6
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets.
@ Source: Standard and Poors
# Calculated as a percentage of total debt issues.
+ Represents debt issues that have either no rating or the rating is
unavailable from the data source.
14
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2008
Market
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES -- 98.4%
Alabama -- 1.6%
Stevenson, Alabama Industrial
Development
(LOC-JP Morgan Chase Bank)
0.95% due 01/07/09+......................... $3,000,000 $3,000,000
----------
Arizona -- 1.1%
Maricopa County, Arizona Industrial
Development Authority
(LOC-Harris Trust & Savings Bank)
1.90% due 01/01/09+......................... 600,000 600,000
Maricopa County, Arizona Industrial
Development Authority Multi
Family Housing
Series A
(LOC-Wells Fargo Bank N.A.)
1.23% due 01/01/09+......................... 1,430,000 1,430,000
----------
2,030,000
----------
California -- 15.5%
Big Bear Lake, California Industrial
Series A
(LOC-KBC Bank NV)
0.76% due 01/07/09+......................... 2,000,000 2,000,000
California Educational Facilities Authority
Series B
0.85% due 01/02/09+......................... 1,000,000 1,000,000
California Housing Finance Agency
Series F
0.70% due 01/07/09+......................... 3,220,000 3,220,000
California Housing Finance Agency
Series A
0.85% due 01/02/09+......................... 180,000 180,000
California Housing Finance Agency
Series B
1.40% due 01/02/09+......................... 2,300,000 2,300,000
California Housing Finance Agency
Series E
1.45% due 01/02/09+......................... 2,100,000 2,100,000
California Housing Finance Agency
Series M
1.45% due 01/02/09+......................... 1,000,000 1,000,000
California Infrastructure & Economic
Development Bank
(LOC-Allied Irish Bank PLC)
0.75% due 01/02/09+......................... 1,620,000 1,620,000
California State Department of Water
Resources Supply
Series B-2
(LOC-BNP Paribas)
0.35% due 01/02/09+......................... 380,000 380,000
California State Department of Water
Resources Supply
Series B-4
1.20% due 01/02/09+......................... 600,000 600,000
Market
Principal Value
Security Description Amount (Note 2)
-----------------------------------------------------------------
California (continued)
California State Department of Water
Resources Supply
Series C-11
(LOC-KBC Bank NV, Bank of Nova
Scotia)
0.75% due 01/02/09+..................... $ 600,000 $ 600,000
California State Department of Water
Resources Supply
Series I-1
(LOC-Allied Irish Bank PLC)
0.75% due 01/02/09+..................... 1,055,000 1,055,000
California State Office of the State
Treasurer
Series B-1
(LOC-Citibank N.A., State Street
B&T Co., National Australia Bank)
0.98% due 01/02/09+..................... 150,000 150,000
Irvine Ranch, California Water District
Series A
(LOC-Landesbank Hessen)
0.85% due 01/02/09+..................... 500,000 500,000
Irvine, California Improvement Bond Act
Series A
(LOC-KBC Bank NV)
0.85% due 01/02/09+..................... 400,000 400,000
Irvine, California Improvement Bond Act
(LOC-KBC Bank NV)
0.85% due 01/02/09+..................... 2,300,000 2,300,000
Metropolitan Water District of
Southern California
Series B-3
0.85% due 01/02/09+..................... 800,000 800,000
Metropolitan Water District of
Southern California
Series C-2
0.85% due 01/02/09+..................... 200,000 200,000
Orange County, California
Improvement Bond
(LOC-KBC Bank NV)
0.75% due 01/02/09+..................... 700,000 700,000
Sacramento County, California
Housing Authority
Series D
(LOC-Citibank NA)
1.09% due 01/01/09+..................... 2,000,000 2,000,000
San Bernardino County, California
Certificates of Participation
(LOC-BNP Paribas)
0.75% due 01/01/09+..................... 1,300,000 1,300,000
Santa Clara Valley, California
Transportation Authority
Series C
0.75% due 01/01/09+..................... 4,000,000 4,000,000
Santa Clara, California Electric
Series A
(LOC-Bank of America N.A.)
0.85% due 01/02/09+..................... 200,000 200,000
Southern California Public Power
Authority
Series A
0.75% due 01/02/09+..................... 600,000 600,000
-----------
29,205,000
-----------
15
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
Colorado -- 5.5%
Colorado Housing & Finance Authority
Series B2
1.25% due 01/07/09+....................... $1,570,000 $ 1,570,000
Colorado Housing & Finance Authority
Series B3
0.88% due 01/07/09+....................... 1,000,000 1,000,000
Colorado Springs, Colorado
National Strength & Conditioning
Association
(LOC-Wells Fargo Bank N.A.)
1.23% due 01/01/09+....................... 1,235,000 1,235,000
Colorado Springs, Colorado Utilities
Series A
0.95% due 01/01/09+....................... 3,880,000 3,880,000
Colorado Springs, Colorado Utilities
Series B
1.15% due 01/01/09+....................... 2,100,000 2,100,000
Durango, Colorado Community Health &
Human Services
(LOC-Wells Fargo Bank N.A.)
1.23% due 01/01/09+....................... 615,000 615,000
-----------
10,400,000
-----------
Florida -- 0.2%
Collier County, Florida Health Facilities
Authority
(LOC-Wachovia Bank N.A.)
1.35% due 01/07/09+....................... 350,000 350,000
-----------
Georgia -- 3.8%
De Kalb Private Hospital Authority
Series A
(LOC-Suntrust Bank)
0.75% due 01/07/09+....................... 2,200,000 2,200,000
De Kalb Private Hospital Authority
0.85% due 01/07/09+....................... 4,950,000 4,950,000
-----------
7,150,000
-----------
Idaho -- 0.5%
Idaho Health Facilities Authority
2.72% due 01/02/09+....................... 890,000 890,000
-----------
Illinois -- 5.3%
Chicago, Illinois Board of Education
Series C
3.40% due 01/01/09+....................... 200,000 200,000
Chicago, O'Hare International Airport
Class B
(LOC-Societe Generale)
1.10% due 01/07/09........................ 790,000 790,000
Illinois Educational Facilities Authority
(LOC-Harris Trust & Savings Bank)
0.72% due 01/07/09+....................... 2,150,000 2,150,000
Illinois Finance Authority
Series B-5
0.73% due 01/07/09+....................... 2,000,000 2,000,000
Illinois Finance Authority
Series E
1.25% due 01/07/09+....................... 695,000 695,000
Market
Principal Value
Security Description Amount (Note 2)
--------------------------------------------------------------------
Illinois (continued)
Jackson-Union Counties, Illinois Regional
Port District
(LOC-Wachovia Bank N.A.)
2.00% due 01/07/09+......................... $4,050,000 $4,050,000
----------
9,885,000
----------
Indiana -- 2.2%
Indiana State Development Finance Authority
Series A
(LOC-Barclays Bank PLC)
1.20% due 01/07/09+......................... 3,100,000 3,100,000
Noblesville, Indiana Economic
Development
(LOC-Federal Home Loan Bank)
1.45% due 01/01/09+......................... 1,080,000 1,080,000
----------
4,180,000
----------
Kansas -- 0.6%
Kansas State Department of Transportation
Series A-3
1.50% due 01/01/09+......................... 595,000 595,000
Kansas State Department of Transportation
Series A-4
1.50% due 01/01/09+......................... 500,000 500,000
----------
1,095,000
----------
Kentucky -- 3.4%
Breckinridge County, Kentucky Lease
Program
(LOC-U.S. Bank of N.A.)
0.70% due 01/07/09+......................... 1,480,000 1,480,000
Breckinridge County, Kentucky Lease
Program
Series A
(LOC-U.S. Bank of N.A.)
0.70% due 01/07/09+......................... 2,800,000 2,800,000
Kentucky Housing Corporation
Series F
0.90% due 01/07/09+......................... 1,090,000 1,090,000
Kentucky Housing Corporation
Series I
0.90% due 01/07/09+......................... 995,000 995,000
----------
6,365,000
----------
Maine -- 0.5%
Maine State Housing Authority
Series H
1.15% due 01/02/09+......................... 1,000,000 1,000,000
----------
Maryland -- 3.1%
Maryland Health & Higher
Educational Facilities Authority
Series D
(LOC-Bank of America N.A.)
1.15% due 01/01/09+......................... 20,000 20,000
16
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 2)
------------------------------------------------------------------
SHORT-TERM INVESTMENT SECURITIES (continued)
Maryland (continued)
Maryland State Economic
Development Corporation
Series B
(LOC-Bank of America N.A.)
1.10% due 01/02/09+....................... $ 900,000 $ 900,000
Maryland State Health & Higher
Educational Facilities Authority
Series A
(LOC-Wachovia Bank N.A.)
1.90% due 01/01/09+....................... 3,000,000 3,000,000
Washington County, Maryland
Commissioners
(LOC-Wachovia Bank N.A.)
2.01% due 01/01/09+....................... 2,000,000 2,000,000
----------
5,920,000
----------
Massachusetts -- 2.0%
Massachusetts Development Finance
Agency
Series U-6C
(LOC-Allied Irish Bank PLC)
0.70% due 01/02/09+....................... 650,000 650,000
Massachusetts Health & Educational
Facilities Authority
Series U
(LOC-JP Morgan Chase Bank)
0.70% due 01/02/09+....................... 100,000 100,000
Massachusetts State Water Resources
Authority
Series C
0.60% due 01/02/09+....................... 2,935,000 2,935,000
----------
3,685,000
----------
Michigan -- 3.2%
Holt Michigan Public Schools
1.05% due 01/01/09+....................... 3,995,000 3,995,000
Michigan State Hospital Finance Authority
Series B
(LOC-Landesbank Hessen)
0.85% due 01/07/09+....................... 2,065,000 2,065,000
----------
6,060,000
----------
Missouri -- 1.2%
Kansas City Industrial Development
Authority
(LOC-Bank of America N.A.)
0.71% due 01/07/09+....................... 1,550,000 1,550,000
Missouri State Health & Educational
Facilities Authority
Series A
1.30% due 01/02/09+....................... 300,000 300,000
Missouri State Health & Educational
Facilities Authority
Series C
0.90% due 01/02/09+....................... 100,000 100,000
Market
Principal Value
Security Description Amount (Note 2)
--------------------------------------------------------------
Missouri (continued)
Missouri State Health & Educational
Facilities Authority
Series D
0.90% due 01/02/09+................... $ 225,000 $ 225,000
----------
2,175,000
----------
Nevada -- 2.2%
Clark County School District
Series B
1.65% due 01/02/09+................... 120,000 120,000
Clark County, Nevada
Series A
1.00% due 01/07/09+................... 4,000,000 4,000,000
----------
4,120,000
----------
New Hampshire -- 0.2%
New Hampshire Health & Education
Facilities Authority
Series A
0.75% due 01/02/09+................... 400,000 400,000
----------
New Jersey -- 2.9%
New Jersey Economic Development
Authority
Series V-2
(LOC-Dexia Credit Local)
2.50% due 01/07/09+................... 2,000,000 2,000,000
New Jersey State Housing & Mortgage
Finance Agency
Series A
2.25% due 01/01/09+................... 400,000 400,000
New Jersey State Turnpike Authority
Series C-1
3.50% due 01/07/09+................... 3,000,000 3,000,000
----------
5,400,000
----------
New York -- 9.8%
Metropolitan Transportation Authority
Series D-1
4.50% due 01/01/09+................... 2,200,000 2,200,000
Metropolitan Transportation Authority
Series G
(LOC-BNP Paribas)
0.83% due 01/02/09+................... 1,490,000 1,490,000
Metropolitan Transportation Authority
Series G-2
(LOC-BNP Paribas)
1.15% due 01/02/09+................... 350,000 350,000
New York City Municipal Water
Finance Authority & Sewer System
Series BB-1
1.00% due 01/02/09+................... 100,000 100,000
New York City Municipal Water
Finance Authority & Sewer
System
Series B-2
1.05% due 01/02/09+................... 500,000 500,000
17
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
New York (continued)
New York City Municipal Water
Finance Authority & Sewer System
Series C
1.17% due 01/02/09+................ $1,100,000 $1,100,000
New York City Municipal Water
Finance Authority & Sewer System
Series F-1
2.50% due 01/01/09+................ 190,000 190,000
New York City Municipal Water
Finance Authority & Sewer System
Series F-2
0.97% due 01/02/09+................ 105,000 105,000
New York City Office of the City
Comptroller
Series A-5
(LOC-KBC Bank NV)
1.00% due 01/02/09+................ 100,000 100,000
New York City Office of the City
Comptroller
Series A-6
1.15% due 01/02/09+................ 300,000 300,000
New York City Office of the City
Comptroller
Series B-2
(LOC-Morgan Guaranty Trust)
0.83% due 01/02/09+................ 2,900,000 2,900,000
New York City Office of the City
Comptroller
Series B-3
(LOC-JP Morgan Chase Bank)
1.05% due 01/01/09+................ 200,000 200,000
New York City Office of the City
Comptroller
Series J-4
0.95% due 01/02/09+................ 200,000 200,000
New York City Transitional Finance
Authority
Series B
1.05% due 01/02/09+................ 400,000 400,000
New York City Transitional Finance
Authority
Series 2E
2.15% due 01/07/09+................ 300,000 300,000
New York City Transitional Finance
Authority
Series 3C
2.15% due 01/07/09+................ 700,000 700,000
New York City Transitional Finance
Authority
Series 3D
2.15% due 01/07/09+................ 910,000 910,000
New York State Environmental
Facilities Corporation
Series B
(LOC-JP Morgan Chase Bank)
1.45% due 01/01/09+................ 1,300,000 1,300,000
Market
Principal Value
Security Description Amount (Note 2)
----------------------------------------------------------------
New York (continued)
Triborough Bridge & Tunnel
Authority
Series C
(LOC-Bayerische Landesbank)
0.90% due 01/07/09+.................... $5,000,000 $ 5,000,000
Triborough Bridge & Tunnel
Authority
2.00% due 01/07/09+.................... 150,000 150,000
-----------
18,495,000
-----------
North Carolina -- 6.0%
Charlotte, North Carolina Certificates
of Participation
Series F
1.20% due 01/01/09+.................... 2,210,000 2,210,000
Durham County, North Carolina
Industrial Facilities & Pollution
(LOC-Suntrust Bank)
1.08% due 01/01/09+.................... 1,950,000 1,950,000
Durham, North Carolina Public
Improvement
4.35% due 01/01/09+.................... 300,000 300,000
Fayetteville, North Carolina Public
Works Commission
3.60% due 01/07/09+.................... 2,245,000 2,245,000
Mecklenburg County, North Carolina
Certificates of Participation
1.20% due 01/01/09+.................... 1,500,000 1,500,000
North Carolina Medical Care
Commission
Series B
2.00% due 01/01/09+.................... 1,850,000 1,850,000
Wilmington, North Carolina General
Obligation Unlimited
1.38% due 01/07/09+.................... 1,200,000 1,200,000
-----------
11,255,000
-----------
North Dakota -- 2.5%
North Dakota State Housing Finance
Agency
Series A
0.89% due 01/07/09+.................... 3,735,000 3,735,000
North Dakota State Housing Finance
Agency
Series B
0.89% due 01/07/09+.................... 1,000,000 1,000,000
-----------
4,735,000
-----------
Ohio -- 3.9%
Cleveland, Ohio Airport System
Class D
(LOC-West LB AG)
1.50% due 01/07/09+.................... 2,565,000 2,565,000
Cuyahoga County, Ohio Cleveland Clinic
Series B-1
1.05% due 01/02/09+.................... 2,140,000 2,140,000
18
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2008 -- (continued)
Market
Principal Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
Ohio (continued)
Ohio Housing Finance Agency
Series B-1
0.80% due 01/07/09+......................... $1,440,000 $1,440,000
Ohio Housing Finance Agency
Series B
0.88% due 01/07/09+......................... 360,000 360,000
Ohio Housing Finance Agency
(LOC-Federal Home Loan Bank)
1.23% due 01/01/09+......................... 890,000 890,000
----------
7,395,000
----------
Oregon -- 1.3%
Medford, Oregon Hospital Facilities
Authority
(LOC-KBC Bank NV)
1.15% due 01/02/09+......................... 455,000 455,000
Multnomah County, Oregon Hospital
Facilities Authority
(LOC-Allied Irish Bank PLC)
1.20% due 01/02/09+......................... 400,000 400,000
Port of Portland, Oregon Special Obligation
Revenue
(LOC-Bank of America N.A.)
1.74% due 01/02/09+......................... 1,670,000 1,670,000
----------
2,525,000
----------
Pennsylvania -- 3.6%
Delaware Valley, Pennsylvania
Regional Financial Authority
Series A
(LOC-Bayerische Landesbank)
0.85% due 01/07/09+......................... 2,300,000 2,300,000
Delaware Valley, Pennsylvania
Regional Financial Authority
Series B
(LOC-Bayerische Landesbank)
0.85% due 01/07/09+......................... 2,100,000 2,100,000
Pennsylvania State Higher Educational
Facilities Authority
(LOC-Allied Irish Bank PLC)
1.15% due 01/01/09+......................... 1,000,000 1,000,000
Pittsburgh, Pennsylvania Water & Sewer
Authority
Series B-1
2.20% due 01/01/09+......................... 1,300,000 1,300,000
----------
6,700,000
----------
South Dakota -- 4.2%
South Dakota Housing Development
Authority
Series C-1
1.20% due 01/01/09+......................... 1,700,000 1,700,000
South Dakota Housing Development
Authority
Series G
1.00% due 01/07/09+......................... 3,700,000 3,700,000
Market
Principal Value
Security Description Amount (Note 2)
---------------------------------------------------------------
South Dakota (continued)
South Dakota Housing Development
Authority
Series I
0.90% due 01/07/09+.................... $2,475,000 $2,475,000
----------
7,875,000
----------
Texas -- 1.2%
Fort Worth, Texas General Purpose
Series A
4.50% due 03/01/09..................... 520,000 522,339
Lubbock, Texas Health Facilities
Development Corp.
Series B
(LOC-Wachovia Bank N.A.)
1.60% due 01/02/09+.................... 500,000 500,000
Texas State Economic Development
Series A-2
0.88% due 01/07/09+.................... 1,100,000 1,100,000
Texas Water Development Board
1.30% due 01/02/09+.................... 170,000 170,000
----------
2,292,339
----------
Utah -- 3.0%
Utah Housing Corporation Single
Family Mortgage
Series A
1.95% due 01/07/09+.................... 1,700,000 1,700,000
Utah Housing Corporation Single
Family Mortgage
Series E-1
1.10% due 01/07/09+.................... 940,000 940,000
Utah Housing Corporation Single
Family Mortgage
Series F
1.95% due 01/07/09+.................... 3,000,000 3,000,000
----------
5,640,000
----------
Virginia -- 0.3%
Virginia State Public School Authority
Series D
5.00% due 02/01/09..................... 500,000 501,406
----------
Washington -- 6.3%
Port of Seattle, Washington Industrial
Development Corporation
(LOC-Citibank N.A.)
0.89% due 01/07/09+.................... 3,300,000 3,300,000
Seattle, Washington Municipal
Light & Power
Series A
(LOC-JP Morgan Chase Bank)
0.50% due 01/07/09+.................... 400,000 400,000
Snohomish County, Washington
Public Utility District
Series A
4.50% due 01/07/09+.................... 2,000,000 2,000,000
19
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2008 -- (continued)
Market
Principal Value
Security Description Amount/Shares (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
Washington (continued)
Washington State Housing Finance
Commission
(LOC-Bank of America N.A.)
1.09% due 01/02/09+.............. $5,150,000 $ 5,150,000
Washington State Housing Finance
Commission
Series A
(LOC-Wells Fargo Bank N.A.)
1.65% due 01/02/09+.............. 1,025,000 1,025,000
------------
11,875,000
------------
Wisconsin -- 0.0%
Wisconsin Housing & Economic
Development Authority
Series C
0.99% due 01/07/09+.............. 75,000 75,000
------------
Wyoming -- 1.3%
Sweetwater County, Wyoming
Environmental Improvement
(LOC-Barclays Bank PLC)
1.40% due 01/02/09+.............. 1,300,000 1,300,000
Sweetwater County, Wyoming
Pollution Control
Series A
(LOC-Barclays Bank PLC)
0.74% due 01/07/09+.............. 1,100,000 1,100,000
------------
2,400,000
------------
Registered Investment Companies -- 0.0%
SSgA Tax Free Money Market Fund... 44,891 44,891
------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(amortized cost $185,118,636)..... 98.4% 185,118,636
Other assets less liabilities..... 1.6 2,964,059
---------- ------------
NET ASSETS.......................... 100.0% $188,082,695
========== ============
- --------
+ Variable Rate Security - the rate reflected is as of December 31, 2008,
maturity date reflects next reset date.
LOC --Letter of Credit
See Notes to Financial Statements
20
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008
Note 1. Organization
SunAmerica Money Market Funds, Inc. (the "Corporation") is an open-end
diversified management investment company organized as a Maryland
corporation. The Corporation consists of two investment funds (each, a
"Fund" and collectively, the "Funds"). Each Fund is a separate series with a
distinct investment objective. Each Fund is advised by AIG SunAmerica Asset
Management Corp. ("SunAmerica" or "Adviser"), an indirect wholly-owned
subsidiary of American International Group, Inc. ("AIG"). The investment
objective for each of the Funds is as follows:
The SunAmerica Money Market Fund ("Money Market Fund") seeks as high a level
of current income as is consistent with liquidity and stability of capital
through investments primarily in high-quality money market instruments
selected principally on the basis of quality and yield.
The SunAmerica Municipal Money Market Fund ("Municipal Money Market Fund")
seeks as high a level of current income as is consistent with liquidity and
stability of capital and that is exempt from regular federal income taxation
through investments selected primarily in high-quality money market
instruments selected primarily on the basis of quality and yield, and under
normal market conditions, invests at least 80% of its assets, plus any
borrowings for investments purposes, in municipal securities that are exempt
from regular federal income tax.
The Money Market Fund currently offers four classes of shares: Class A,
Class B, Class C and Class I. The Municipal Money Market Fund currently
offers Class A shares. These classes within the Funds are presented in the
Statement of Assets and Liabilities. The cost structure for each class is as
follows:
Class A shares-- Class A shares are available with no front-end sales
charge. A 1.00% contingent deferred sales charge ("CDSC")
is imposed on shares sold within one year of original
purchase and a 0.50% CDSC is imposed on shares sold after
the first year and within the second year after purchase.
Class B shares-- Class B shares are offered at their net asset value per
share, without any front-end sales charge. However, there
is a declining contingent deferred sales charge ("CDSC") on
shares sold within six years of purchase. Class B shares
will convert automatically to Class A shares approximately
eight years after the purchase of such shares and at such
time are no longer subject to a distribution fee.
Class C shares-- Class C shares are offered at their net asset value per
share, without any front-end sales charge. However, there
is a contingent deferred sales charge of 1.00% on shares
sold within 12 months of purchase.
Class I shares-- Class I shares are offered at net asset value per share
without any sales charge, exclusively to certain
institutions.
Effective as of the close of business on September 17, 2008, the Municipal
Money Market Fund closed the Class B and Class C shares of the Fund to new
purchases, including from existing shareholders. In connection with the
closing of Class B and Class C shares of the Municipal Money Market Fund,
any outstanding Class B and Class C shares as of the close of business on
September 17, 2008 were converted to Class A shares of the Municipal Money
Market Fund.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Funds'
registration statement. Class A, Class B, and Class C shares of each Fund
has its own 12b-1 plan.
Indemnifications: Under the Funds' organizational documents, its officers
and directors are indemnified against certain liability arising out of the
performance of their duties to the Funds. In addition, in the normal course
of business the Funds enter into contracts that contain the obligation to
indemnify others. The Funds' maximum exposure under these arrangements is
unknown. Currently, however, the Funds expect the risk of loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from these estimates. The
following is a summary of the significant accounting policies followed by
the Funds in the preparation of its financial statements:
21
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008 -- (continued)
Pursuant to each 12b-1 plan, the Fund pays the Fund's distributor (the
"Distributor") an account maintenance fee with respect to Class A, B & C
shares and pursuant to the 12b-1 plan for the Class B and Class C shares,
the Fund also pays the Distributor a distribution fee with respect to the
Class B and C shares. The Class A shares do not pay a distribution fee.
Security Valuations: Portfolio securities are valued at amortized cost,
which approximates market value. The amortized cost method involves valuing
a security at its cost on the date of purchase and thereafter assuming a
constant amortization/accretion to maturity of any discount or premium. In
accordance with rule 2a-7 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Corporation's Board of Directors ("Board") has
adopted procedures intended to stabilize the Funds' net asset value per
share at $1.00. These procedures include the determination, at such
intervals as the Board deems appropriate and reasonable in light of current
market conditions, of the extent, if any, to which the Funds' market-based
net asset value per share deviates from the Fund's amortized cost per share.
The calculation of such deviation is referred to as "Shadow Pricing". For
purposes of these market-based valuations, securities for which market
quotations are not readily available are fair valued, as determined pursuant
to procedures adopted in good faith by the Board. There is no single
standard for making fair value determinations, which may result in market
prices that vary from those of other funds. In addition, in accordance with
positions taken by the Securities Exchange Commission ("SEC") or its staff,
effective November 3, 2008 through January 12, 2009, for shadow pricing
purposes the Funds valued certain portfolio securities with remaining
maturities of 60 days or less at amortized cost instead of at the
market-based value.
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.
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards No. 157, "Fair Value
Measurements" ("FAS157"). 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. FAS157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007 and interim periods within those
fiscal years. Various inputs are used in determining the value of the
Portfolios' investments. These inputs are summarized in the three broad
levels listed below:
Level 1--Unadjusted quoted prices in active markets for identical securities
Level 2--Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, quoted
prices in inactive markets, etc.)
Level 3--Significant unobservable inputs (including the Funds' own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Funds' net assets
as of December 31, 2008:
Money Market Fund Municipal Money Market Fund
--------------------------- ---------------------------
Other Other
Valuation Investments in Financial Investments in Financial
inputs Securities Instruments* Securities Instruments*
--------- -------------- ------------ -------------- ------------
Level
1--Unadjusted
Quoted
Prices........ $ -- $-- $ -- $--
Level
2--Other
Significant
Observable
Inputs........ 1,076,184,202 -- 185,118,636 --
Level
3--Significant
Unobservable
Inputs........ -- -- -- --
-------------- --- ------------ ---
Total........... $1,076,184,202 $-- $185,118,636 $--
============== === ============ ===
-----
* Other financial instruments are derivative instruments not reflected in
the Portfolio of investments such as future, written option, swap and
forward contracts, which are valued at the unrealized
appreciation/depreciation on the instrument.
22
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008 -- (continued)
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, pursuant to exemptive relief granted by the Securities
and Exchange Commission, 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 such repurchase agreements. The underlying collateral is valued daily on
a mark-to-market basis to ensure that the value, at the time the agreement
is entered into, is equal to at least 102% of the repurchase price,
including accrued interest. In the event of default of the obligation to
repurchase, a Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by
the Fund may be delayed or limited.
At December 31, 2008, the following Funds held an undivided interest in a
joint repurchase agreement with UBS Securities, LLC.
Percentage Principal
Fund Interest Amount
---- ---------- ------------
Money Market Fund............. 70.36% $140,719,000
As of that date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Securities, LLC, dated December 31, 2008, bearing interest at a rate of
0.02% per annum, with a principal amount of $200,000,000, a repurchase price
of $200,000,222, and a maturity date of January 2, 2009. The repurchase
agreement is collateralized by the following:
Interest Maturity Principal Market
Type of Collateral Rate Date Amount Value
------------------ -------- -------- ------------ ------------
U.S. Treasury Inflation Index
Notes....................... 1.88% 07/15/15 $200,000,000 $204,000,018
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded on a trade
date basis. Realized gains and losses on sales of investments are calculated
on the identified cost basis. Interest income, including the accretion of
discount and amortization of premium, is accrued daily; dividend income is
recorded on the ex-dividend date.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses, are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of the dividend-eligible shares, as appropriate) of each class of shares at
the beginning of the day (after adjusting for the current capital shares
activity of the respective class).
Expenses common to all Funds, not directly related to individual Funds, are
allocated among the Funds based upon their relative net asset value or other
appropriate methods. In all respects, expenses are charged to each Fund as
incurred on a specific identification basis. Interest earned on cash
balances held at the custodian are shown as custody credits in the Statement
of Operations.
Dividends from net investment income, if any, are normally declared daily
and paid monthly. Capital gain distributions, if any, are paid annually. The
Funds record dividends and distributions to their shareholders on the ex-
dividend date. The amount of dividends and distributions from net investment
income and net realized capital gains are determined in accordance with
federal income tax regulations, which may differ from U.S. generally
accepted accounting principles. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent these differences
are permanent in nature, such amounts are reclassified within the capital
accounts at fiscal
23
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008 -- (continued)
year end based on their federal tax-basis treatment; temporary differences
do not require reclassification. Net investment income (loss), net realized
gain (loss), and net assets are not affected by these reclassifications.
The Funds intend to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute all of
their taxable income, including any net realized gain on investments, to its
shareholders. Therefore, no federal tax provisions are required. Each Fund
is considered a separate entity for tax purposes. The Fund files U.S.
federal and certain state income tax returns. With few exceptions, the Fund
is no longer subject to U.S. federal and state tax examinations by tax
authorities for tax years ending before 2005.
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.
Note 3. Investment Advisory and Management Agreement, Distribution and Service
Agreement and Other Transactions With Affiliates
The Funds have an Investment Advisory and Management Agreement (the
"Advisory Agreement") with SunAmerica. Under the Advisory Agreement,
SunAmerica provides continuous supervision of the Funds Advisory and
administers its corporate affairs, subject to general review by the Board.
In connection therewith, SunAmerica furnishes the Funds with office
facilities, maintains certain of its books and records, and pays the
salaries and expenses of all personnel, including officers of the Funds who
are employees of SunAmerica and its affiliates.
The Funds pay SunAmerica a monthly investment advisory and management fee
calculated daily at the following annual percentages of each Fund's average
daily net assets:
Management
Assets Fees
---------------------------- ----------
Money Market Fund......... $0 - $600 million 0.50%
next $900 million 0.45%
(greater than) $ 1.5 billion 0.40%
Municipal Money Market
Fund.................... (greater than) $0 0.35%
The Municipal Money Market Fund is subadvised by AIG Global Investment Corp.
("AIGGIC") pursuant to a subadvisory agreement with SunAmerica. AIGGIC is an
indirect wholly-owned subsidiary of AIG and an affiliate of SunAmerica.
AIGGIC receives the following fees from SunAmerica, based upon the Fund's
average daily net assets:
Sub-advisory
Assets Fees
--------------------------- ------------
Municipal Money Market Fund... $0 - $200 million 0.25%
next $300 million 0.20%
(greater than) $500 million 0.15%
SunAmerica has contractually agreed to waive fees and/or reimburse expenses
to the extent necessary to cap the Funds' annual fund operating expenses at
the following percentages of each Fund's average net assets. Annual Fund
operating expenses shall not include extraordinary expenses, as determined
under generally accepted accounting principles or acquired fund fees and
expenses. The contractual expense waivers and fee reimbursements will
continue indefinitely, subject to termination by the Board, including a
majority of the directors that are not deemed to be "interested persons" of
the Funds as defined by Section 2(a)(19) of the Investment Company Act of
1940 (the "1940 Act") ("Independent Directors").
Fund Percentage
---- ----------
Money Market Class I.................................... 0.80%
Municipal Money Market Class A.......................... 0.95
Municipal Money Market Class B.......................... 1.70
Municipal Money Market Class C.......................... 1.70
24
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008 -- (continued)
The Funds may also voluntarily waive fees and/or reimburse expenses. The
voluntary waivers and/or reimbursements may be terminated at any time. The
exact amount of the voluntary waivers and/or reimbursements may change on a
day-to-day basis.
For the year ended December 31, 2008, pursuant to the contractual expense
limitations in the above table, SunAmerica reimbursed expenses as follows:
Fund
----
Money Market Class I.............................. $31,428
Municipal Money Market Class A.................... 1,464
Municipal Money Market Class B.................... 8,131
Municipal Money Market Class C.................... 10,422
The Corporation, 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. The Funds have adopted a
Distribution Plan on behalf of each class of shares (other than Class I
shares) (each a "Plan" and collectively, the "Plans") in accordance with the
provisions of Rule 12b-1 under the 1940 Act, hereinafter referred to as the
"Class A Plan," "Class B Plan," and "Class C Plan." In adopting the Plans,
the Board 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.
Both the Class B Plan and the Class C Plan provide that the Fund shall pay
the Distributor distribution fee at the annual rate of 0.75% of the average
daily net assets of the Fund's Class B and Class C shares, to compensate the
Distributor and certain securities firms for providing sales and promotional
activities for distributing that class of shares. The distribution costs for
which the Distributor may be compensated include distribution fees paid to
broker-dealers that have sold Fund shares, commissions, and other expenses
such as those incurred for sales literature, prospectus printing and
distribution, and compensation to wholesalers. It is possible that in any
given year the amount paid to the Distributor under the Class B and Class C
Plans may exceed the Distributor's distribution costs as described above.
The Class A Plan does not provide for a distribution fee. The Plans also
provide that each class of shares of the Funds, other than Class I, shall
pay the Distributor an account maintenance at the annual rate of up to 0.15%
of the aggregate average daily net assets of such class of shares for
payments to compensate the Distributor and certain securities firms for
account maintenance activities. In this regard, some payments are used to
compensate broker-dealers with account maintenance fees in an amount up to
0.15% per year of the assets maintained in the Funds by their customers.
Accordingly, for the year ended December 31, 2008, SACS received fees (see
Statement of Operations) based upon the aforementioned rates.
For the year ended December 31, 2008, SACS voluntarily waived fees as
follows:
Fund
----
Money Market Class B.............................. $ 36
Municipal Money Market Class B.................... 90
Municipal Money Market Class C.................... 561
SACS receives the proceeds of contingent deferred sales charges paid by
investors in connection with certain redemptions of each Fund's Class A,
Class B and Class C shares. SACS has advised the Funds for the year ended
December 31, 2008, the proceeds received from redemptions are as follows:
Contingent Deferred Sales
Charges
------------------------
Fund Class A Class B Class C
---- ------- -------- -------
Money Market....................... $782 $133,255 $28,124
Municipal Money Market............. -- 4,038 287
- --------
+ Effective November 15, 2008, AIG SunAmerica Capital Services, Inc. changed
its name to SunAmerica Capital Services, Inc.
25
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008 -- (continued)
The Funds have entered into a Service Agreement with AIG SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Adviser. Under the Service
Agreement, SAFS performs certain shareholder account functions by assisting
the Funds' transfer agent in connection with the services that it offers to
the shareholders of the Fund. The Service Agreement, which permits the Funds
to compensate SAFS for services rendered based upon the annual rate of 0.22%
of average daily net assets, is approved annually by the Board. For the year
ended December 31, 2008, the Funds incurred the following expenses which are
included in transfer agent fees and expenses payable line in the Statement
of Asset and Liabilities and in transfer agent fees and expenses in the
Statement of Operations to compensate SAFS pursuant to the terms of the
Service Agreement:
Payable at
December 31,
Fund Expenses 2008
---- ---------- ------------
Money Market Fund Class A.......... $2,340,383 $194,165
Money Market Fund Class B.......... 47,446 6,420
Money Market Fund Class C.......... 87,224 8,209
Money Market Fund Class I.......... 38,391 3,651
Municipal Money Market Fund Class A 355,050 37,177
Municipal Money Market Fund Class B 342 --
Municipal Money Market Fund Class C 1,622 --
As of December 31, 2008, 81% of the Money Market Fund's total outstanding
shares and 17% of the Municipal Money Market Fund's total outstanding shares
were held through Pershing LLC in a brokerage account sweep vehicle for
customers of the broker-dealers within AIG Advisor Group, Inc., an affiliate
of the Adviser.
As result of losses on medium-term notes issued by Cheyne Finance LLC, that
are held by the Money Market Fund, SunAmerica made capital contributions to
the Money Market Fund totaling $3,684,000.
On September 22, 2008, AIG, the ultimate parent of SunAmerica, SACS and
SAFS, 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 4. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily arising from
dividends payable, capital contributions and cumulative pension expenses.
Distributable Earnings Tax Distributions
----------------------------------------- --------------------------------
For the year ended December 31, 2008
--------------------------------------------------------------------------
Long-term Gains/ Unrealized Long-Term
Ordinary Capital and Appreciation Ordinary Capital
Fund Income Other Losses (Depreciation) Income Gains Tax Exempt
- ---- -------- ---------------- -------------- ----------- --------- ----------
Money Market....................... $409,514 $(8,605,552) $3,684,000 $20,757,226 $-- $ --
Municipal Money Market............. 36,540* (24,510) -- -- -- 2,444,662
- --------
* Tax exempt distributable earnings
26
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008 -- (continued)
Tax Distributions
------------------------------------
For the year ended December 31, 2007
------------------------------------
Long-Term
Ordinary Capital
Fund Income Gains Tax Exempt
---- ----------- --------- ----------
Money Market....................... $61,351,107 $-- $ --
Municipal Money Market............. -- -- 3,087,724
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated, as of December 31, 2008,
which are available to offset future capital gains, if any:
Capital Loss Carryforward
-------------------------
Fund 2012 2013 2016
---- ------ ------- ----------
Money Market................................ $ -- $ -- $8,605,552
Municipal Money Market...................... 8,070 16,252 188
Under the current law, capital losses related to securities and foreign
currency realized after October 31 and prior to the Fund's fiscal year end
may be deferred and treated as arising on the first day of the following
year. For fiscal year ended December 31, 2008, the Money Market Fund elected
to defer post October capital losses in the amount of $303.
For the year ended December 31, 2008, the reclassifications arising from
book/tax differences resulted in increases (decreases) that were primarily
due to treatment of distribution reclasses to the components of net assets
as follows:
Accumulated Accumulated
Undistributed Undistributed
Net Investment Net Realized Capital
Fund Income (Loss) Gain (Loss) Paid-In
---- -------------- ------------- -------
Money Market........... $62,214 $(62,214) $--
Municipal Money Market. 24,510 (24,510) --
As of December 31, 2008, the amounts of aggregate unrealized gain (loss) and
the cost of investment securities for federal income tax purposes, including
repurchase agreements, were as follows:
Gross Gross Net Unrealized
Cost of Unrealized Unrealized Appreciation
Fund Investments Appreciation Depreciation (Depreciation)
- ---- -------------- ------------ ------------ --------------
Money Market.................. $1,072,500,202 $3,684,000 $-- $3,684,000
Municipal Money Market........ 185,118,636 -- -- --
27
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008 -- (continued)
Note 5. Capital Share Transactions
Transactions in each class of shares of the Funds, all at $1.00 per share,
for the year ended December 31, 2008 and for the prior year were as follows:
Money Market Fund
-------------------------------------------------------------------------------------------------
Class A Class B Class C
-------------------------------- ----------------------------- --------------------------
For the For the For the For the For the For the
year year year year year year
ended ended ended ended ended ended
December 31, December 31, December 31, December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
------------- --------------- ------------ ------------ ------------ ------------
Shares sold..... $ 739,651,175(1) $ 843,066,044(2) $ 24,467,136 $ 13,577,268 $ 89,457,487 $ 35,861,962
Reinvested
dividends...... 19,606,294 58,499,405 193,858 655,545 328,868 563,246
Shares redeemed. (941,513,403) (1,430,613,813) (19,832,404)(1) (19,714,079)(2) (72,135,074) (25,778,554)
------------- --------------- ------------ ------------ ------------ ------------
Net increase
(decrease)..... $(182,255,934) $ (529,048,364) $ 4,828,590 $ (5,481,266) $ 17,651,281 $ 10,646,654
============= =============== ============ ============ ============ ============
---------------------------
Class I
--------------------------
For the For the
year year
ended ended
December 31, December 31,
2008 2007
------------ ------------
Shares sold..... $ 16,999,656 $ 10,922,170
Reinvested
dividends...... 345,755 723,464
Shares redeemed. (18,815,372) (11,160,285)
------------ ------------
Net increase
(decrease)..... $ (1,469,961) $ 485,349
============ ============
Municipal Money Market Funds
---------------------------------------------------------------------------------------------
Class A Class B Class C
------------------------------- --------------------------- --------------------------
For the For the For the For the For the For the
year year period year period year
ended ended January 1 to ended January 1 to ended
December 31, December 31, September 18, December 31, September 18, December 31,
2008 2007 2008(5) 2007 2008(5) 2007
------------- -------------- ------------- ------------ ------------- ------------
Shares sold..... $ 265,457,527(3) $ 260,584,595(4) $ 69,266 $ 15,146 $ 2,292,505 $ 1,136,716
Reinvested
dividends...... 2,440,082 3,066,154 770 6,688 2,722 8,590
Shares redeemed. (233,720,922) (210,828,100) (258,830)(3) (368,544)(4) (2,912,066) (662,545)
------------- -------------- ---------- ---------- ----------- ------------
Net increase
(decrease)..... $ 34,176,687 $ 52,822,649 $ (188,794) $ (346,710) $ (616,839) $ 482,761
============= ============== ========== ========== =========== ============
- --------
(1)Includes automatic conversion of Class B shares in the amount of $1,872,559
to Class A shares
(2)Includes automatic conversion of Class B shares in the amount of $4,233,353
to Class A shares
(3)Includes automatic conversion of B shares in the amount of $100 to Class A
shares.
(4)Includes automatic conversion of Class B shares in the amount of $69,768 to
Class A shares
(5)See Note 1
Note 6. Directors' Retirement Plan
The Directors of the SunAmerica Money Market Funds, Inc. have adopted the
SunAmerica Disinterested Trustees' and Directors' Retirement Plan (the
"Retirement Plan") effective January 1, 1993, as amended for the Independent
Directors. The Retirement Plan provides generally that an Independent
Director may become a participant ("Participant") in the Retirement Plan if
he or she has at least 10 years of consecutive service as a Disinterested
Director of any of the adopting SunAmerica mutual funds (the "Adopting
Funds") or has attained the age of 60 while a Director and completed five
(5) consecutive years of service as a Director of any Adopting Fund (an
"Eligible Director"). Pursuant to the Retirement Plan, an Eligible Director
may receive benefits upon (i) his or her death or disability while a
Director or (ii) the termination of his or her tenure as a Director, other
than removal for cause from each of the Adopting Funds with respect to which
he or she is an Eligible Director.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Director and Participant, each Eligible Director
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Director of each
Adopting Fund for the calendar year in which such birthday occurs. In
addition, an amount equal to 8.50% of any amounts credited under the
preceding statement during prior years is added to each Eligible Director's
account. The rights of any Participant to benefits under the Retirement Plan
shall be an unsecured claim against the assets of the Adopting Funds. An
Eligible Director may
28
SunAmerica Money Market Funds
NOTES TO FINANCIAL STATEMENTS -- December 31, 2008 -- (continued)
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%.
Effective December 3, 2008, the Retirement Plan was amended to among other
things, (1) freeze the Retirement Plan as to future accruals for active
Participants as of December 31, 2008, (2) prohibit Disinterested Directors
from first becoming participants in the Retirement Plan after December 31,
2008, and (3) permits active Participants to elect to receive a distribution
of their entire Retirement Plan account balance in 2009. The freeze on
future accruals does not apply to Participants that have commenced receiving
benefits under the Retirement Plan on or before December 31, 2008.
The following amounts for the Retirement Plan Liabilities are included in
the Directors' fees and expenses line on the Statement of Assets and
Liabilities and the amounts for the Retirement Plan Expenses are included in
the Director's fees and expenses line on the Statement of Operations.
Retirement Plan Retirement Plan Retirement Plan
Liability Expense Payments
--------------- --------------- ---------------
Fund As of December 31, 2008
---- -----------------------------------------------
Money Market Fund............. $268,660 $26,853 $13,766
Municipal Money Market Fund... 11,450 3,219 317
Note 7. Interfund Lending Agreement
Pursuant to exemptive relief granted by the Commission, the Funds are
permitted to participate in an interfund lending program among investment
companies advised by SunAmerica or an affiliate. The interfund lending
program allows the participating Funds to borrow money from and loan money
to each other for the temporary or emergency purposes. An interfund loan
will be made under this facility only if the participating Funds receive a
more favorable interest rate than would otherwise be available from a
typical bank for a comparable transaction. For the year ended December 31,
2008, none of the Funds participated in the program.
Note 8. Other Matters
On October 6, 2008, the Board of the Funds approved the participation of the
Funds in the U.S. Department of the Treasury's Temporary Guarantee Program
for Money Market Funds (the "Program") through the initial termination date
of the Program which was December 18, 2008. On November 24, 2008 the U.S.
Department of Treasury ("Treasury") announced an extension of the Program
until April 30, 2009, and on December 2, 2008, the Board approved the
continued participation of the Funds in the Program. The Program's guarantee
only applies to shareholders of the Funds as of the close of business on
September 19, 2008. Subject to certain conditions and limitations, the per
share amount held by shareholders of the Funds as of the close of business
on September 19, 2008 are guaranteed against loss in the event the per share
net asset value falls below $0.995 ( a "Guarantee Event") and the Funds
subsequently liquidates. Participation in the Program for the initial term,
required a payment to the Treasury in the amount of 0.010% and 0.015% of the
net asset value of the Municipal Money Market Fund and the Money Market
Fund, respectively, as of the close of business on September 19, 2008.
Continued participation in the Program from December 19, 2008 until April
30, 2009 required an additional payment to the Treasury in the amount of
0.015% and 0.022% of the net asset value of the Municipal Money Market Fund
and the Money Market Fund, respectively, as of the close of business on
September 19, 2008. The cost to participate in the Program was borne by the
Funds, subject to the expense limitations currently in effect for certain
classes of the Funds, and is included in the Other expense line on the
Statement of Operations. The total guaranteed payments that may be made by
the Treasury under the Program, for all money market funds participating in
the Program, is dependent upon the availability of assets in the Treasury's
Exchange Stabilization Fund, which is currently valued at approximately $50
billion. The Secretary of the Treasury may elect to extend the Program
beyond April 30, 2009 through the close of business on September 18, 2009.
If the Program is extended further, the Board will consider whether to
continue to participate in the Program. If a Guarantee Event occurs after
the Program expires, or, if sooner, after the Funds cease to participate in
the Program, neither the Funds nor any shareholder will be entitled to any
payment under the Program. Please refer to the Funds' prospectus for
additional information about the Program.
29
SunAmerica Money Market Funds
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of SunAmerica Money Market Funds,
Inc.:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of SunAmerica Money
Market Fund and SunAmerica Municipal Money Market Fund (constituting SunAmerica
Money Market Funds, Inc., hereafter referred to as the "Funds") at December 31,
2008, the results of each of their operations for the year then ended, the
changes in each of their net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the
period 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 Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of 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 audits, which included
confirmation of securities at December 31, 2008 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Houston, Texas
February 25, 2009
30
SunAmerica Money Market Funds
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2008 -- (unaudited)
Approval of the Investment Advisory and Management Agreement and Subadvisory
Agreement
The Board (the members of which are referred to as "Directors") of the
"Corporation, including the Directors who are not "interested persons," as
defined in Section 2(a)(19) of the 1940 Act, of the Corporation or the Funds,
SunAmerica or AIGGIC (the "Disinterested Directors"), approved the continuation
of the Advisory Agreement for a one-year period ending August 31, 2009 at an
in-person meeting held on August 26-27, 2008. The Corporation currently
consists of two separate Funds, including the Money Market Fund and the
Municipal Money Market Fund. At this same meeting, the Board also approved the
continuation of the Subadvisory Agreement between SunAmerica and AIGGIC (the
"Subadvisory Agreement") with respect to the Municipal Money Market Fund for a
one-year period ending August 31, 2009.
In accordance with Section 15(c) of the 1940 Act, the Board requested and
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 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
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 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 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 Directors,
considered the following information:
Nature, Extent and Quality of Services Provided by SunAmerica and AIGGIC. The
Board, including the Disinterested Directors, considered the nature, quality
and extent of services to be provided by 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 SunAmerica
would provide office space, accounting, legal and compliance, clerical and
administrative services and has authorized any of its officers and employees,
if elected, to serve as officers or Directors of the Funds without
compensation. Finally, the Board noted that 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 SunAmerica, the Board analyzed the
structure and duties of 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 SunAmerica and
concluded, based on their experience and interaction with SunAmerica, that:
(i) SunAmerica is able to retain quality portfolio managers, analysts and other
personnel; (ii) SunAmerica exhibited a high level of diligence and attention to
detail in carrying out its advisory and other responsibilities under the
Advisory Agreement; (iii) SunAmerica had been responsive to requests of the
Board; and (iv) SunAmerica had kept the Board apprised of developments relating
to the Funds and the industry in general. The Board concluded that the nature
and extent of services provided under the Advisory Agreement were reasonable
and appropriate in relation to the management fee and that the quality of
services continues to be high.
31
SunAmerica Money Market Funds
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2008 -- (unaudited)
(continued)
The Board also considered 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
SunAmerica's experience in providing management and investment advisory and
administrative services to advisory clients and noted that as of June 30, 2008,
SunAmerica managed, advised an/or administered approximately $49.7 billion in
assets. The Board also considered 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 SunAmerica's
compliance and regulatory history.
With respect to the Municipal Money Market Fund, for which 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 the Municipal Money
Market Fund, subject to the oversight and review of 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 Municipal Money Market Fund and concluded, based on their
experience with AIGGIC, that: (i) AIGGIC is able to retain high quality
portfolio managers and other investment personnel; (ii) AIGGIC exhibited a high
level of diligence and attention to detail in carrying out its responsibilities
under the Subadvisory Agreement; and (iii) AIGGIC had been responsive to
requests of the Board and of SunAmerica. The Board considered that AIGGIC has
developed internal policies and procedures for monitoring compliance with the
investment objectives, policies and restrictions of the Municipal Money Market
Fund as set forth in the 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 Directors, also
considered the investment performance of SunAmerica with respect to both Funds
and AIGGIC with respect to the Municipal Money Market Fund. In connection with
its review, the Board received and reviewed information regarding the
investment performance of the Funds as compared to each Fund's peer group
("Peer Group") and/or peer universe ("Peer Universe") as 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 SunAmerica that detailed the Funds' performance for the three- and six-month
periods ended June 30, 2008.
Specifically, the Board considered that the Money Market Fund ranked in the
fifth quintile of its Peer Group for the one-, two-, three-, four-, five- and
ten-year periods ended May 31, 2008. The Board then considered that the
Municipal Money Market Fund ranked in the fifth quintile for the one-, two-,
three-, four- and five-year periods ended May 31, 2008 and ranked in the fifth
quintile since the Fund's inceptions. The Board noted that the Funds'
performance does not meet the Board's expectations; however, it recognized that
the default of the Cheyne Finance LLC medium-term notes held by the Money
Market Fund, and events in the credit markets had adversely affected the Money
Market Fund's performance and had caused the Fund to take a more conservative
and defensive approach in selecting its investments that it otherwise might
have taken. The Board noted that it will continue to carefully monitor and
discuss each Fund's performance with SunAmerica.
Consideration of the Management Fees and Subadvisory Fee and the Cost of the
Services and Profits to be Realized by SunAmerica and AIGGIC and their
Affiliates from the Relationship with the Funds. The Board, including the
Disinterested
32
SunAmerica Money Market Funds
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2008 -- (unaudited)
(continued)
Directors, received and reviewed information regarding the fees to be paid by
the Funds to SunAmerica pursuant to the Advisory Agreement and the fees paid by
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 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 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 SunAmerica with respect to Class A, B
and C shares of the Municipal Money Market Fund and Class I shares of the Money
Market Fund. The Board compared each Fund's net expense ratio to those of other
funds within its Peer Group and/or Peer Universe as a guide to help assess the
reasonableness of the management fee for the 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, however, that
the comparative fee information provided by Lipper as a whole was useful in
assessing whether SunAmerica was providing services at a cost that was
competitive with other, similar funds. The Board also considered management
fees received by SunAmerica with respect to other mutual funds and accounts
with similar investment strategies to the Money Market Fund. The Board noted
the management fee paid by the Money Market Fund was reasonable as compared to
the fees SunAmerica was receiving from other mutual funds and accounts for
which it serves as adviser or subadviser. The Board did not consider services
and fees paid under the investment advisory contracts that SunAmerica has with
other registered investment companies or other types of clients with similar
investment strategies to the Municipal Money Market Fund since SunAmerica
informed the Board that there were no such similar funds or accounts to the
Municipal Money Market Fund.
The Board also received and reviewed information regarding the fees paid by
SunAmerica to AIGGIC pursuant to the Subadvisory Agreement. To assist in
analyzing the reasonableness of the subadvisory fee, the Board received a
report independently prepared by Lipper. The report showed comparative fee
information of the Municipal Money Market Fund's Peer Group that the Directors
used as a guide to help assess the reasonableness of the subadvisory fee. The
Directors noted that Peer Group information as a whole was useful in assessing
whether AIGGIC was providing services at a cost that was competitive with other
similar funds. The Directors also considered that the subadvisory fee is paid
by SunAmerica out of its management fee and not by the Municipal; Money Market
Fund, and that subadvisory fees may vary widely within a Peer Group for various
reasons, including market pricing demands, existing relationships, experience
and success, and individual client needs. The Board further considered the
amount of subadvisory fees paid out by 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 Municipal Money Market Fund. The Board noted that
the subadvisory fee paid by SunAmerica to AIGGIC was reasonable as compared to
fees AIGGIC receives for other mutual funds for which it serves as adviser or
subadviser.
The Board also considered SunAmerica's profitability and the benefits
SunAmerica and its affiliates received from its relationship with the Funds.
The Board received and reviewed financial statements relating to SunAmerica's
financial condition and profitability with respect to the services it provided
the Funds and considered how profit margins could affect 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 SunAmerica and its
affiliates that provide services to the Funds on a Fund by Fund basis.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, and considered the profitability of SunAmerica's affiliates under
the Service Agreements, Rule 12b-1 Plans and Distribution Agreement.
Additionally, the Board considered whether 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
SunAmerica and AIGGIC,
33
SunAmerica Money Market Funds
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2008 -- (unaudited)
(continued)
serves as custodian with respect to certain shareholder retirement accounts
that are administered by SunAmerica and receives a fee payable by the
qualifying shareholders. The Board further considered whether there were any
collateral or "fall-out" benefits that SunAmerica and its affiliates may derive
as a result of their relationship with the Funds. The Board noted that
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 Municipal Money Market Fund to date.
The Board concluded that SunAmerica and AIGGIC had the financial resources
necessary to perform their obligations under the Advisory Agreement and
Subadvisory Agreement and to continue to provide the Funds with the high
quality services that they had provided in the past. The Board also concluded
that the management fee and subadvisory fees were reasonable in light of the
factors discussed above.
Economies of Scale. The Board, including the Disinterested Directors,
considered whether the shareholders would benefit from economies of scale and
whether there was potential for future realization of economies with respect to
the Funds. The Board considered that as a result of being part of the
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 SunAmerica as
it adds labor and capital to expand the scale of operations. The Board further
noted that SunAmerica has agreed to contractually cap the total annual
operating expenses of Class I of the Money Market Fund and Classes A, B and C
of the Municipal Money Market Fund, at certain levels. The Board observed that
those expense caps benefited shareholders by keeping total fees down even in
the absence of breakpoints or economies of scale. The Board concluded that the
Funds' management fee structures were reasonable and that it would continue to
review fees in connection with the renewal of the Advisory Agreement, including
whether the implementation of breakpoints would be appropriate in the future
due to an increase in asset size or otherwise.
The Board did not review specific information regarding whether there have been
economies of scale with respect to AIGGIC's management of the Municipal Money
Market Fund because it regards that information as less relevant at the
subadviser level. Rather, the Board considered information regarding economies
of scale in the context of the renewal of the Advisory Agreement.
Other Factors. In consideration of the Advisory Agreement and Subadvisory
Agreement, the Board also received information regarding SunAmerica's and
AIGGIC's brokerage and soft dollar practices. The Board considered that
SunAmerica and AIGGIC are responsible for decisions to buy and sell securities
for the portfolios they manage, selection of broker-dealers and negotiation of
commission rates. The Board also considered the benefits SunAmerica and AIGGIC
derive from their soft dollar arrangements, including arrangement under which
brokers provide brokerage and/or research services to SunAmerica and/or AIGGIC
in return for allocating brokerage; however, they noted that since the Funds
generally do not engage in brokerage transactions, SunAmerica and AIGGIC
typically would not receive soft dollar benefits in return for allocating the
Funds' brokerage transactions. The Board further observed that when making
purchases of new issues with fixed underwriting fees, SunAmerica or AIGGIC may
designate the use of broker dealers who have agreed to provide certain
statistical, research and other information.
Conclusion. After a full and complete discussion, the Board approved the
Advisory Agreement and the Subadvisory Agreement with respect to the Municipal
Money Market 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 Directors, was satisfied that the terms of the
Advisory Agreement and Subadvisory Agreement were fair and reasonable and in
the best interests of the Funds and the Funds' shareholders. In arriving at a
decision to approve the Advisory Agreement and Subadvisory Agreement, the Board
did not identify any single factor or group of factors as all-important or
controlling, but considered all factors together. The Disinterested Directors
were also assisted by the advice of independent counsel in making this
determination.
34
SunAmerica Money Market Funds, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2008 -- (unaudited)
The following table contains basic information regarding the Directors and
Officers who oversee operations of the Fund and other investment companies
within the Fund complex.
Number of
Term of Funds in
Name, Position(s) Office and Fund Complex
Address and Held With Length of Principal Occupation(s) Overseen by Other Directorships
Date of Birth* the Fund Time Served(4) During Past 5 Years Director(1) Held by Director(2)
- ------------------------ ----------- -------------- ------------------------ ------------ ------------------------
Disinterested Directors
Jeffrey S. Burum Director 2004- Founder and Chairman of 38 None
DOB: February 27, 1963 present 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 Director 2001- Retired. 87 Director, Belo Corp.
DOB: October 6, 1945 present (1992 to present);
Director, Sysco Corp.
(1996 to present);
Director, Luby's Inc.
(1998 to present).
William F. Devin Director 2001- Retired. 88 Director, Boston Options
DOB: December 30, 1938 present Exchange (1985 to
Present).
Samuel M. Eisenstat Chairman 1985- Attorney, sole 48 Director, North European
DOB: March 7, 1940 of the present practitioner. Oil Royalty Trust.
Board
Stephen J. Gutman Director 1984- Vice President, Corcoran 48 None
DOB: May 10, 1943 present Group (Real Estate)
(2003 to present);
President and Member of
Managing Directors, Beau
Brummell -- Soho, LLC
(Licensing of menswear
specialty retailing and
other activities) (June
1988 to present).
William J. Shea Director 2004- Managing Partner, DLB 48 Director, Boston Private
DOB: February 9, 1948 present Capital LLC (Private Financial Holdings
Equity) (2006 to (October 2004 to
present); President and present).
CEO, Conseco, Inc.
(Financial Services)
(2001 to 2004); Chairman
of the Board of
Centennial Technologies,
Inc. (1998 to 2001).
Interested Director
Peter A. Harbeck(3) Director 1994- President, CEO and 96 None
DOB: January 23, 1954 present Director, SunAmerica
(August 1995 to
present); Director, --
SACS (August 1993 to
present); Chairman, AIG
Advisor Group, Inc.
(2004 to present).
35
SunAmerica Money Market Funds, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2008 -- (unaudited)
The following table contains basic information regarding the Directors and
Officers who oversee operations of the Fund and other investment companies
within the Fund complex.
Number of
Term of Funds in
Name, Position(s) Office and Fund Complex
Address and Held With Length of Principal Occupations Overseen by Other Directorships
Date of Birth* the Fund Time Served(4) During Past 5 Years Director(1) Held by Director(2)
- ----------------------- ----------- -------------- ----------------------------- ------------ -------------------
Officers
John T. Genoy President 2007- Chief Financial Officer, N/A N/A
DOB: November 8, 1968 present SunAmerica (2002 to
present); Senior Vice
President, SunAmerica (2003
to present); Chief Operating
Officer, SunAmerica (2006 to
present).
Donna M. Handel Treasurer 2002- Senior Vice President, N/A N/A
DOB: June 25, 1966 present SunAmerica (2004 to
present); Vice President,
SunAmerica (1997 to 2004).
Gregory N. Bressler Secretary 2005- Senior Vice President and N/A N/A
DOB: November 17, 1966 and Chief Present General Counsel,
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- Director, President and CEO, N/A N/A
DOB: April 7, 1966 President Present SACS (2006 to present);
Senior Vice President, SACS
(2002 to 2006);
Timothy Pettee Vice August Chief Investment Officer, N/A N/A
DOB: April 7, 1958 President 2008 to SunAmerica (2005 to
Present present).
Cynthia A. Skrehot Vice 2002- Vice President, SunAmerica N/A N/A
DOB: December 6, 1967 President present (2002 to present); Chief
and Chief Compliance Officer,
Compliance SunAmerica, (2003 to 2006)
Officer
36
SunAmerica Money Market Funds, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2008 -- (unaudited)
(continued)
Number of
Term of Funds in
Name, Position(s) Office and Fund Complex
Address and Held With Length of Principal Occupations Overseen by Other Directorships
Date of Birth* the Fund Time Served(4) During Past 5 Years Director(1) Held by Director(2)
- ----------------------- ----------- -------------- ----------------------------- ------------ -------------------
Gregory R. Kingston Vice 2002- Vice President, SunAmerica N/A N/A
DOB: January 18, 1966 President present (2001 to present)
and
Assistant
Treasurer
Nori L. Gabert Vice 2002- Vice President and Deputy N/A N/A
DOB: August 15, 1953 President present General Counsel,
and SunAmerica (2005 to
Assistant present); Vice President and
Secretary Senior Counsel, SunAmerica,
(2001 to 2005).
Matthew J. Hackethal Anti-Money 2006- Chief Compliance Officer, N/A N/A
DOB: December 31, 1971 Laundering present SunAmerica (2006 to
Compliance present); Vice President,
Officer Credit Suisse Asset
Management (2001 to 2006);
Chief Compliance Officer,
Credit Suisse Alternative
Funds (2005 to 2006); CCO,
Credit Suisse Asset
Management Securities, Inc.
(2004 to 2005)
- --------
* The business address for each Director and Officer is Harborside Financial
Center, 3200 Plaza 5, Jersey City, NJ 07311-4992.
(1) The "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 Funds (2 funds), SunAmerica Equity Funds (9 funds), SunAmerica
Income Funds (5 funds), SunAmerica Focused Series, Inc. (17 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 Series Trust (3 funds), AIG Retirement Company I
(33 portfolios), AIG Retirement Company II (15 funds), Seasons Series Trust
(24 portfolios), AIG Strategic Hedge Fund of Funds (1 fund) and Brazos
Mutual Funds (4 funds).
(2) Directorships of companies required to report to the Commission under the
Securities Exchange Act of 1934 (i.e. "public companies") or other
investment companies registered under the 1940 Act, other than those listed
under the preceding column.
(3) Interested Director, as defined within the Investment Company Act of 1940,
because he or she is an officer and a director of the Adviser and a
director of the principal underwriter of the Fund.
(4) Directors serve until their successors are duly elected and qualified,
subject to the Directors' retirement plan as discussed in Note 6 of the
financial statements. Each officer will hold office for an indefinite term
until the date he or she resigns or retires or until his/her successor is
duly elected and qualifies.
Additional information concerning the Directors is contained in the Statement
of Additional Information and is available without charge by calling (800)
858-8850.
37
SunAmerica Money Market Funds
SHAREHOLDER TAX INFORMATION -- (unaudited)
Certain tax information regarding the SunAmerica Money Market Funds is required
to be provided to shareholders based upon the Fund's income and distributions
for the taxable year ended December 31, 2008. The information necessary to
complete your income tax returns is included with your Form 1099-DIV mailed to
you in January 2009.
During the year ended December 31, 2008, 100% of the distributions paid by the
SunAmerica Municipal Money Market
Fund are exempt from federal income taxes.
38
SunAmerica Money Market Funds
If you would like additional information:
[_] Call FastFacts -- our 24-hour, automated account and fund information
hotline at 800-654-4760.
[_] Visit www.sunamericafunds.com for more up-to-date information.
Thank you for your continued support,
SunAmerica Mutual Funds
39
[LOGO] Sun America
Mutual Funds
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Directors/Trustees VOTING PROXIES ON FUND Securities and Exchange
Jeffrey S. Burum PORTFOLIO SECURITIES Commission, without
Dr. Judith L. Craven A description of the charge, upon request, by
William F. Devin policies and proce-dures call-ing (800) 858-8850
Samuel M. Eisenstat that the Funds use to or on the U.S. Securities
Stephen J. Gutman determine how to vote and Exchange Commission's
Peter A. Harbeck proxies relating to website at
William J. Shea secu-rities held in the http://www.sec.gov.
Funds' portfolios which
Officers is available in the DISCLOSURE OF QUARTERLY
John T. Genoy, President Funds' State-ment of PORTFOLIO HOLDINGS
and Chief Additional Information, The Fund is required to
Executive Officer may be obtained without file its com-plete
Donna M. Handel, charge upon re-quest, by schedule of portfolio
Treasurer calling (800) 858-8850. holdings with the U.S.
James Nichols, Vice This information is also Securities and Exchange
President available from the EDGAR Commission for its first
Timothy Pettee, Vice database on the U.S. and third fiscal quarters
President Secu-rities and Exchange on Form N-Q. The Fund's
Cynthia A. Skrehot, Vice Commission's website at Forms N-Q are available
President and Chief http://www.sec.gov. on the U.S. Securities
Compliance Officer and Exchange Commission's
Gregory N. Bressler, DELIVERY OF SHAREHOLDER website at
Chief Legal Officer DOCUMENTS http://www.sec.gov. You
and Secretary The Funds have adopted a can also review and
Nori L. Gabert, Vice policy that allows them obtain copies of the
President and to send only one copy of Forms N-Q at the U.S.
Assistant Secretary a Fund's prospectus, Securities and Exchange
Kathleen Fuentes, proxy material, annual Commission's Public
Assistant Secretary report and semi-annual Refer-ence Room in
John E. McLean, report (the "shareholder Washington, DC
Assistant Secretary documents") to (information on the
Gregory R. Kingston, shareholders with operation of the Public
Vice President and multiple accounts Reference Room may be
Assistant Treasurer residing at the same ob-tained by calling
Diedre Shepherd, "household." This 1-800-SEC-0330).
Assistant Treasurer practice is called
Matthew J. Hackethal, householding and reduces This report is submitted
Anti-Money Laundering Fund expenses, which solely for the general
Compliance Office benefits you and other information of
shareholders. Unless the shareholders of the Fund.
Investment Adviser Funds receive Distribution of this
AIG SunAmerica Asset instructions to the report to persons other
Management Corp. con-trary, you will only than shareholders of the
Harborside Financial receive one copy of the Fund is authorized only
Center shareholder documents. in connection with a
3200 Plaza 5 The Funds will continue currently effective
Jersey City, NJ to household the prospectus, setting forth
07311-4992 share-holder documents details of the Fund,
indefinitely, until we which must precede or
Distributor are instructed otherwise. accompany this report.
SunAmerica Capital If you do not wish to
Services, Inc. participate in
Harborside Financial householding please
Center contact Shareholder
3200 Plaza 5 Services at (800)
Jersey City, NJ 858-8850 ext. 6010 or
07311-4992 send a written request
with your name, the name
Shareholder Servicing of your fund(s) and your
Agent account member(s) to
AIG SunAmerica Fund SunAmerica Mutual Funds
Services, Inc. c/o BFDS, P.O. Box
Harborside Financial 219186, Kansas City MO,
Center 64121-9186. We will
3200 Plaza 5 resume individual
Jersey City, NJ mailings for your account
07311-4992 within thirty (30) days
of receipt of your
Custodian and Transfer request.
Agent
State Street Bank and PROXY VOTING RECORD ON
Trust Company SUNAMERICA MONEY MARKET
P.O. Box 419572 FUNDS
Kansas City, MO Information regarding how
64141-6572 the Funds voted proxies
relating to securities
held in the Funds during
the most recent
twelve month period ended
June 30 is available,
once filed with the U.S.
40
Distributed by:
SunAmerica Capital Services, Inc.
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
MMANN - 12/08
[LOGO]
Sun America
Mutual Funds
Item 2. Code of Ethics
The SunAmerica Money Market Funds, Inc. (the "registrant") has adopted a
Code of Ethics applicable to its Principal Executive and Principal
Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act of
2002. During the fiscal year 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 Directors has determined that William J. Shea, the
Chairman of the registrant's Audit Committee, qualifies as an audit
committee financial expert, as defined in the instructions to Item 3(a) of
Form N-CSR. Mr. Shea is considered to be "independent" for purposes of
Item 3(a)(2) of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two fiscal
years for professional services rendered by the registrant's principal
accountant were as follows:
2007 2008
------- -------
(a) Audit Fees.......................................... $51,513 $56,066
(b) Audit-Related Fees.................................. $ 0 $ 0
(c) Tax Fees............................................ $20,832 $22,291
(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............................................. $0 $0
(e) (1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant and
all non-audit services provided by the registrant's principal accountant
for the registrant, its investment adviser and any entity controlling,
controlled by, or under common control with the investment adviser
("Adviser 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
$636,356 and $487,836 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 Directors 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 Money Market Funds, Inc.
By: /s/ John T. Genoy
------------------------------
John T. Genoy
President
Date: March 6, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
------------------------------
John T. Genoy
President
Date: March 6, 2009
By: /s/ Donna M. Handel
------------------------------
Donna M. Handel
Treasurer
Date: March 6, 2009