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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-CSR
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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
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(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
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, 2009
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Item 1. Reports to Stockholders
[PHOTO]
ANNUAL REPORT 2009
SUNAMERICA
Money Market Funds
[LOGO] SunAmerica
Mutual Funds
December 31, 2009 ANNUAL REPORT
SUNAMERICA MONEY MARKET FUNDS, INC.
SunAmerica Money Market Fund (SMAXX)
SunAmerica Municipal Money Market Fund (NMAXX)
Table of Contents
SHAREHOLDERS' LETTER........................................ 1
EXPENSE EXAMPLE............................................. 5
STATEMENT OF ASSETS AND LIABILITIES......................... 7
STATEMENT OF OPERATIONS..................................... 8
STATEMENT OF CHANGES IN NET ASSETS.......................... 9
FINANCIAL HIGHLIGHTS........................................ 10
PORTFOLIO OF INVESTMENTS.................................... 12
NOTES TO FINANCIAL STATEMENTS............................... 20
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..... 29
APPROVAL OF ADVISORY AGREEMENT.............................. 30
DIRECTORS AND OFFICERS INFORMATION.......................... 35
SHAREHOLDER TAX INFORMATION................................. 38
December 31, 2009 ANNUAL REPORT
Shareholders' Letter -- (unaudited)
Dear Shareholders,
We are pleased to present the annual shareholder report for the SunAmerica
Money Market Fund and the SunAmerica Municipal Money Market Fund. We would also
like to take the opportunity to discuss the market conditions that have shaped
the investment environment over the Funds' annual period, ended December 31,
2009.
Both the financial and economic markets withstood many remarkable twists and
turns during the past twelve months as fears that the Great Recession would
become the second Great Depression dissipated. The annual period began on a
precarious note as both the U.S. and global economic conditions continued to
deteriorate. On the fiscal front, the U.S. government responded by supporting a
variety of programs designed to support financial institutions and restart
consumer credit markets. With short-term interest rates effectively at zero,
the Federal Reserve embarked on a program of buying government bonds to create
new money in the economy.
The second fiscal quarter brought a belief that the economy had bottomed and
was on its way to a sustainable recovery. This renewed economic optimism
increased investors' risk appetite launching a rally in the equity and credit
markets. The Federal Reserve met twice during the three-month period, leaving
rates unchanged and reiterating its commitment to employ all available tools to
promote price stability and economic recovery.
This Fed policy was warranted as conditions worsened over the course of the
summer and the unemployment rate rose to its highest rate in over 25 years,
leading some to fear that a weak labor market would undermine consumer spending
and damage the environment for a strong sustainable economic recovery.
At year-end, a challenging economic landscape confronted both policymakers and
investors. Along with high unemployment, other critical issues included the
uncertain impact of consumer de-leveraging on the economy, a growing federal
budget deficit, and future inflationary threats. While the residential housing
market has begun showing signs of improvement, concerns remain regarding the
stability of the commercial real estate market.
The Fed Funds rate ended the year unchanged, in a range of 0.00%-0.25%. The low
interest rate environment was challenging for yields. In order to preserve
yields, the SunAmerica Money Market Fund added value through active management
of the Fund's duration, specifically by purchasing longer-dated fixed rate
instruments as well as floating rate notes. The SunAmerica Municipal Money
Market Fund maintains a portfolio diversified by sector and region with the
majority of the portfolio being invested in variable rate obligations during
the period.
In September 2008, the U.S. Treasury announced the establishment of a temporary
guarantee program for eligible money market funds. This program was ultimately
extended through September 18, 2009, to support ongoing stability in the
market. The SunAmerica Money Market Fund and the SunAmerica Municipal Money
Market Fund both participated throughout the program's existence.+
Though the fixed income markets have been devoid of yield in 2009, we remain
diligent in the management of your assets and thank you for your continued
investment in the Funds. If you have any questions, or require additional
information on this or other SunAmerica Mutual Funds, I invite you to visit our
website at www.sunamericafunds.com or call our Shareholder Services Department
at 800-858-8850.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
President and CEO
SunAmerica Asset Management Corp.
- --------
Past performance is no guarantee of future results.
An investment in the Funds is not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government agency. Although the Funds
seek to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Funds.
+The Program's guarantee only applied to shareholders of the Funds and the
number of shares owned by those shareholders as of the close of business on
September 19, 2008. Since the program has expired, the guarantee no longer
applies.
1
SunAmerica Money Market Fund
Andrew Doulos, Portfolio Manager
SunAmerica Asset Management Corp.
The SunAmerica Money Market Fund (Class A) returned 0.12% for the 12-month
annual period ended December 31, 2009, as compared with the three-month T-Bill
index, which returned 0.15% for the same period.
Although the economic period for the 2009 year ended on a positive note, the
start of 2009 was the beginning of a period of observing the Federal Reserve's
special liquidity facilities. The Federal Reserve took action in 2008 and 2009
with numerous liquidity facilities to backstop the U.S. financial markets and
to promote economic activity. The success of the programs helped the recovery
in the U.S. stock market and helped keep short-term and long-term interest
rates relatively low. The Federal Open Market Committee (FOMC) maintained a
target range for the federal funds rate at 0.00%-0.25% for 2009. The central
bank continues to anticipate that economic conditions, including low rates of
resource utilization, subdued inflation trends, and stable inflation
expectations, are likely to warrant exceptionally low levels of the federal
funds rate for an extended period. Year end funding pressures were minimal. No
market strains had appeared as a result of the imminent closing, on February 1,
2010, of most of the Federal Reserve's special liquidity facilities.
Fund performance was affected by historically low interest rates that
extended throughout 2009. Yields on money market securities decreased steadily
throughout the period, with one-month CDs yielding approximately 0.19% at year
end, down from roughly 0.55% at the start of the year.
Given the low yield environment that existed throughout the year, we
employed a barbell investment strategy, placing higher weightings on the short
end (one- to seven-day period) and on longer-dated floating rate
securities. This strategy helped add yield to the portfolio versus a laddered
strategy. Performance was enhanced by maximizing higher yields of longer-dated
securities while avoiding the interest rate risk associated with securities on
the longer end of the yield curve. We also sought to mitigate interest rate
risk by holding longer-dated securities with floating rate resets of ninety
days.
- --------
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.
SunAmerica Asset Management Corp., the Fund's investment adviser, voluntarily
waived fees and/or reimbursed expenses during the annual period, including to
avoid a negative yield. Absent such waivers and/or reimbursements, returns
would have been lower.
Securities listed may or may not be a part of current portfolio construction.
2
SunAmerica Municipal Money Market Fund
Peter Stevenson, Portfolio Manager
AIG Asset Management
The SunAmerica Municipal Money Market Fund (Class A) returned 0.02% for the
annual period ended December 31, 2009.
Over the course of the year, the Federal Reserve Open Market Committee
(FOMC) met and left the Federal Funds target rate unchanged at a range of
0.00% - 0.25%, citing risks to growth and commenting that inflation would
remain subdued due to excess capacity containing price pressure. Ripple effects
of the downturn in the housing market continue to resonate through the economy,
manifested through a decline of household wealth, as well as rising
delinquencies and foreclosures that have impacted mortgage-backed security
valuations. The economy recorded a fourth straight quarter of contraction in
the Gross Domestic Product (GDP) before rebounding to a positive 2.2% growth
mark in the third quarter. Unemployment quickly rose above 9.0% by May and
remained at 10.0% for the last three months of the year. The pace of job losses
as measured by the seasonally-adjusted non-farm payrolls economic indicator
slowed over the course of the year and recorded a minor net gain in November
before turning negative again in December. For the year, job losses totaled
approximately 4.1 million and until November there were 22 straight months of
employment declines.
The federal response was dramatic as evidenced by new programs and actions
in addition to those initiated late in 2008. During the first half of the year,
the 19 largest financial companies were subjected to capital adequacy
stress-tests, with 10 of the firms needing more capital totaling approximately
$75 billion. Raising capital to erase individual deficiencies became a
pre-condition for a company to exit the Troubled Asset Relief Program (TARP).
In addition to TARP, other federal programs supported money markets and
other asset classes. The U.S. Treasury's Money Market Funds Guarantee Program
was ultimately extended through September of 2009 and received $1.2 billion in
fees for a guarantee of approximately $3 trillion in assets without a single
claim filed. The Fund participated in the Money Market Funds Guarantee Program
throughout the life of the Program.+ The Federal Reserve instituted programs
that purchased up to $300 billion in Treasuries and over $1 trillion in
mortgage-backed securities and agency paper for the purposes of quantitative
easing and to fill the void in demand for mortgage-backed paper. Finally the
government also provided funding for two of the three largest automobile
manufacturers after bankruptcy proceedings.
The concerted effect of these actions and programs was to provide stability,
confidence and the springboard for positive performance in the capital markets.
The stock market bottomed in March 2009 and then rallied dramatically;
corporate debt spreads tightened; the 10-year U.S. Treasury yield remained well
under 4.00% for the year; financial stocks as a group recovered; and the TED
spread (the difference between the interest rates on interbank loans and
short-term U.S. government debt) finished the year at approximately 20 basis
points. During this time, low yields of money market funds and short-term
savings vehicles provided an impetus for investors to shift further out the
curve, accept lower credit quality or seek an alternate asset class to realize
better returns.
The relationship between the levels of shorter-term floating and longer-term
fixed rate money market securities has a major impact on the fund, depending
upon the Fund's weighted average maturity (WAM). The portfolio WAM ranged from
a low of 1.4 days in early February to a high of 17.5 days in May and finished
the fiscal year at approximately 11 days.
In the first quarter of the annual period, the Fund had the majority of its
assets in variable-rate demand notes (VRDNs) whose rates reset weekly. The Fund
was diversified among various sectors and states and had extended marginally
during the quarter, picking up a San Antonio revenue obligation with a maturity
in February of 2010. In the second quarter, the Fund's WAM was extended again,
purchasing another general obligation note with a maturity in March of 2010.
The mix of exposure to sectors shifted slightly versus the first quarter with
housing, healthcare and general obligation credits comprising the top three
sectors.
- --------
+The Program's guarantee only applied to shareholders of the Funds and the
number of shares owned by those shareholders as of the close of business on
September 19, 2008. Since the program has expired, the guarantee no longer
applies.
3
SunAmerica Municipal Money Market Fund
At the close of the third quarter, the Fund's WAM was relatively unchanged
compared to the start of the quarter. The Fund was still heavily invested in
VRDNs with the housing and healthcare sectors still among the top three
exposures, joined by transportation.
Over the course of the year, variable rate yields, as measured by the SIFMA
Municipal Swap Index*, steadily declined, starting at 0.59% and peaking in the
0.63% to 0.67% range between February and April before beginning a slow
movement down to a low of 0.22% in December. Given the proportion of
variable-rate notes in the Fund at the beginning of the year, the Fund missed
out on the performance of longer fixed coupon maturities. Performance began to
improve about halfway through the year as one-year rates began to converge with
variable-rate notes, negating most of the advantage of extending. With yields
well under 1.00% and under 0.50% for a good portion of the year, any seasonal
imbalances (tax season and year-end inventory cleanup at dealers) were somewhat
muted. Additionally, a severe decline in the amount of variable-rate issuance
offset the overall amount of outflows from the municipal money market product.
The Fund ended the year with a weighted average maturity of nearly 11 days.
As of the end of the period, variable-rate demand obligations comprised nearly
92% of the Fund's investments with the balance invested in fixed rate note
obligations, primarily general obligation credits. The largest sector exposures
at year end were housing (23%), general obligation (14%) and transportation
(13%) with Illinois (9%), New York (8%) and California (8%) representing our
three largest state exposures.
- --------
Past performance is no guarantee of future results.
*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. Indices are not managed and an investor
cannot invest directly into an index.
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.
SunAmerica Asset Management Corp., the Fund's investment adviser, voluntarily
waived fees and/or reimbursed expenses during the annual period, including to
avoid a negative yield. Absent such waivers and/or reimbursements, returns
would have been lower.
Securities listed may or may not be a part of current portfolio construction.
4
SunAmerica Money Market Funds, Inc.
EXPENSE EXAMPLE -- December 31, 2009 -- (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 contingent deferred
sales charges, small account fees and administrative fees 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, 2009 and held until December 31,
2009.
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, 2009" 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, 2009"
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, 2009" column does not
include administrative fees that may apply to qualified retirement plan
accounts. See the Funds' prospectus, your retirement plan documents and/or
materials from your financial adviser for a full description of these fees. Had
these fees been included, the "Expenses Paid During the Six Months Ended
December 31, 2009" 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, 2009"
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, 2009" column does not
include administrative fees that may apply to qualified retirement plan
accounts. See the Funds' prospectus, your retirement plan documents and/or
materials from your financial adviser for a full description of these fees. Had
these fees been included, the "Expenses Paid During the Six Months Ended
December 31, 2009" 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
contingent deferred sales charges, small account fees and administrative fees,
if applicable to your account. Please refer to the Fund's prospectus, qualified
retirement plan document and/or materials from your financial adviser 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.
5
SunAmerica Money Market Funds, Inc.
EXPENSE EXAMPLE -- December 31, 2009 -- (unaudited)
Actual Hypothetical
------------------------------------------------------- -------------------------------------------------------
Ending Account
Ending Account Expenses Paid Value Using Expenses Paid
Beginning Value Using During the Beginning a Hypothetical 5% During the
Account Value Actual Returns Six Months Ended Account Value Assumed Return Six Months Ended
Fund at July 1, 2009 at December 31, 2009 December 31, 2009* at July 1, 2009 at December 31, 2009 December 31, 2009*
- ---- --------------- -------------------- ------------------ --------------- -------------------- ------------------
Money Market
Class A#.... $1,000.00 $1,000.05 $2.97 $1,000.00 $1,022.23 $3.01
Class I#.... $1,000.00 $1,000.10 $2.92 $1,000.00 $1,022.28 $2.96
Municipal
Money Market
Class A#.... $1,000.00 $1,000.05 $1.87 $1,000.00 $1,023.34 $1.89
Expense
Ratio as of
Fund December 31, 2009*
- ---- ------------------
Money Market
Class A#.... 0.59%
Class I#.... 0.58%
Municipal
Money Market
Class A#.... 0.37%
- --------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 184 days divided by 365
days. These ratios do not reflect transaction costs, including contingent
deferred sales charges, small account fees and administrative fees, if
applicable to your account. Please refer to your Prospectus, your qualified
retirement plan document and/or materials from your financial adviser 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, 2009" and the "Expense Ratios" would have been higher.
6
SunAmerica Money Market Funds, Inc.
STATEMENT OF ASSETS AND LIABILITIES -- December 31, 2009
Money Market Municipal Money
Fund Market Fund
------------ ---------------
ASSETS:
Short-term investment securities, at value * (unaffiliated)........ $747,789,689 $110,129,900
Repurchase agreements (cost approximates market value)............. 27,892,000 --
------------ ------------
Total Investments................................................ $775,681,689 $110,129,900
------------ ------------
Cash............................................................... 964 317,487
Receivable for:
Fund shares sold................................................. 94,746 --
Dividends and interest........................................... 630,232 212,381
Prepaid expenses and other assets.................................. 9,456 1,844
Due from investment adviser (Note 3)............................... 44,000 --
Due from investment adviser for expense reimbursements/fee waivers. 163,811 17,983
Due from distributor for fee waivers............................... 98,061 14,678
------------ ------------
Total assets..................................................... 776,722,959 110,694,273
------------ ------------
LIABILITIES:
Payable for:
Fund shares redeemed............................................. 538,245 --
Investment advisory and management fees.......................... 325,366 34,248
Distribution and service maintenance fees........................ 98,061 14,680
Transfer agent fees and expenses................................. 181,244 25,906
Directors' fees and expenses..................................... 34,197 8,792
Other accrued expenses........................................... 305,221 77,411
Dividends payable.................................................. 16,006 2,018
------------ ------------
Total liabilities................................................ 1,498,340 163,055
------------ ------------
Net Assets...................................................... $775,224,619 $110,531,218
============ ============
NET ASSETS REPRESENTED BY:
Common stock, $.001 par value (10 billion shares authorized)....... $ 777,446 $ 110,530
Paid-in capital.................................................... 776,573,936 110,429,731
------------ ------------
777,351,382 110,540,261
Accumulated undistributed net investment income (loss)............. 141,661 15,459
Accumulated undistributed realized gain (loss) on investment....... (2,268,424) (24,502)
------------ ------------
Net assets...................................................... $775,224,619 $110,531,218
============ ============
Class A:
Net assets......................................................... $760,576,815 $110,531,218
Shares outstanding................................................. 762,770,271 110,530,456
Net asset value and redemption price per share
(excluding any applicable contingent deferred sales charge)....... $ 1.00 $ 1.00
============ ============
Class I:
Net assets......................................................... $ 14,647,804 $ --
Shares outstanding................................................. 14,676,102 --
Net asset value and redemption price per share..................... $ 1.00 $ --
============ ============
*Amortized cost of short-term investment securities (unaffiliated). $747,789,689 $110,129,900
============ ============
See Notes to Financial Statements
7
SunAmerica Money Market Funds, Inc.
STATEMENT OF OPERATIONS -- For the year ended December 31, 2009
Money Market Municipal Money
Fund Market Fund
------------ ---------------
INVESTMENT INCOME:
Interest (unaffiliated)................................................................ $ 8,615,842 $ 813,083
Dividends (unaffiliated)............................................................... 8,806 78
----------- ----------
Total investment income............................................................. 8,624,648 813,161
----------- ----------
EXPENSES:
Investment advisory and management fees................................................ 4,478,364 522,682
Distribution and service maintenance fees
Class A.............................................................................. 1,331,792 224,007
Class B*............................................................................. 79,579 --
Class C*............................................................................. 143,369 --
Transfer agent fees and expenses
Class A.............................................................................. 2,051,573 335,560
Class B*............................................................................. 25,708 --
Class C*............................................................................. 45,877 --
Class I.............................................................................. 38,025 --
Registration fees
Class A.............................................................................. 48,740 18,609
Class B*............................................................................. 7,478 --
Class C*............................................................................. 2,856 --
Class I.............................................................................. 28,260 --
Custodian and accounting fees.......................................................... 188,715 16,618
Reports to shareholders................................................................ 168,522 17,664
Audit and tax fees..................................................................... 37,681 30,882
Legal fees............................................................................. 171,691 24,976
Directors' fees and expenses........................................................... 103,095 10,208
Other expenses......................................................................... 502,020 53,326
----------- ----------
Total expenses before fee waivers, expense reimbursements and custody credits....... 9,453,345 1,254,532
Fees waived and expenses reimbursed by investment adviser and distributor (Note 3).. (2,098,890) (474,544)
Custody credits earned on cash balances............................................. (39) --
----------- ----------
Net expenses........................................................................ 7,354,416 779,988
----------- ----------
Net investment income (loss)........................................................... 1,270,232 33,173
----------- ----------
Net realized gain (loss) on investments............................................. 357,931 8
Net increase from payment by affiliate (Note 3)..................................... 2,295,500 --
----------- ----------
Net realized gain (loss) on investments................................................ 2,653,431 8
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 3,923,663 $ 33,181
=========== ==========
- --------
* See Note 1
See Notes to Financial Statements
8
SunAmerica Money Market Funds, Inc.
STATEMENT OF CHANGES IN NET ASSETS
Money Market Fund
-------------------------------
For the year For the year
ended ended
December 31, December 31,
2009 2008
-------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)............................................................. $ 1,270,232 $ 20,751,072
Net realized gain (loss) on investments.................................................. 2,653,431 (4,918,048)
-------------- ---------------
Net increase (decrease) in net assets resulting from operations........................... $ 3,923,663 $ 15,833,024
-------------- ---------------
Distributions to shareholders from:
Net investment income (Class A).......................................................... (1,229,487) (19,840,997)
Net investment income (Class B)+......................................................... (2,328) (204,882)
Net investment income (Class C)+......................................................... (4,524) (367,143)
Net investment income (Class I).......................................................... (33,086) (344,204)
-------------- ---------------
Total distributions to shareholders....................................................... (1,269,425) (20,757,226)
-------------- ---------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 5).. (303,962,472) (161,246,024)
-------------- ---------------
Total increase (decrease) in net assets................................................... (301,308,234) (166,170,226)
-------------- ---------------
NET ASSETS:
Beginning of period....................................................................... 1,076,532,853 1,242,703,079
-------------- ---------------
End of period*............................................................................ $ 775,224,619 $ 1,076,532,853
============== ===============
*Includes accumulated undistributed net investment income (loss).......................... $ 141,661 $ 140,854
============== ===============
Municipal Money
Market Fund
----------------------------
For the year For the year
ended ended
December 31, December 31,
2009 2008
------------ --------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)............................................................. $ 33,173 $ 2,444,850
Net realized gain (loss) on investments.................................................. 8 (188)
------------ --------------
Net increase (decrease) in net assets resulting from operations........................... $ 33,181 $ 2,444,662
------------ --------------
Distributions to shareholders from:
Net investment income (Class A).......................................................... (33,173) (2,440,520)
Net investment income (Class B)+......................................................... -- (808)
Net investment income (Class C)+......................................................... -- (3,334)
Net investment income (Class I).......................................................... -- --
------------ --------------
Total distributions to shareholders....................................................... (33,173) (2,444,662)
------------ --------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 5).. (77,551,485) 33,371,054
------------ --------------
Total increase (decrease) in net assets................................................... (77,551,477) 33,371,054
------------ --------------
NET ASSETS:
Beginning of period....................................................................... 188,082,695 154,711,641
------------ --------------
End of period*............................................................................ $110,531,218 $ 188,082,695
============ ==============
*Includes accumulated undistributed net investment income (loss).......................... $ 15,459 $ 25,090
============ ==============
- --------
+ See Note 1
See Notes to Financial Statements
9
SunAmerica Money Market Funds, Inc.
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
-------
12/31/05 $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(4) 995,968 0.94 1.86
12/31/09 1.00 0.00 (0.00) 1.00 0.12(5) 760,577 0.78(3) 0.14(3)
Class I
-------
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(4) 16,998 0.80(3) 1.97(3)
12/31/09 1.00 0.00 (0.00) 1.00 0.20(5) 14,648 0.69(3) 0.21(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):
12/31/05 12/31/06 12/31/07 12/31/08 12/31/09
-------- -------- -------- -------- --------
Class A............. -- % -- % -- % -- % 0.21%
Class I............. 0.05 0.05 0.04 0.18 0.34
(4)Total return includes the effect of payments by an affiliate. Without these
payments, the total return would have been 0.82% for Class A shares and
0.96% for Class I shares. (Note 3)
(5) Total return includes the effect of payments by an affiliate. Without these
payments, the total return would have been (0.88)% for Class A shares and
remained unchanged for Class I shares. (Note 3)
See Notes to Financial Statements
10
SunAmerica Money Market Funds, Inc.
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 net assets
- ------------ --------- ---------- ---------- ------ --------- -------- ---------- ------------
Class A
-------
12/31/05 $1.00 $0.02 $(0.02) $1.00 1.62% $ 84,817 0.81%(3) 1.58%(3)
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(3) 2.80(3)
12/31/08 1.00 0.02 (0.02) 1.00 1.53 188,083 0.83(3) 1.45(3)
12/31/09 1.00 0.00 (0.00) 1.00 0.02 110,531 0.52(3) 0.02(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):
12/31/05 12/31/06 12/31/07 12/31/08 12/31/09
-------- -------- -------- -------- --------
Class A............. 0.04% -- % 0.01% 0.01% 0.32%
See Notes to Financial Statements
11
SunAmerica Money Market Fund
PORTFOLIO PROFILE -- December 31, 2009 -- (unaudited)
Industry Allocation*
U.S. Government Agencies.......... 61.8%
Foreign Banks..................... 11.7
Super-Regional Banks-US........... 5.0
Diversified Financial Services.... 4.6
Finance........................... 4.6
Commercial Banks.................. 4.2
Repurchase Agreement.............. 3.6
Commercial Banks-Canadian......... 3.2
Domestic Banks.................... 0.8
Money Center Banks................ 0.6
-----
100.1%
=====
Weighted average days to maturity. 55.3
Credit Quality Allocation@#
A-1......................... 99.8%
Not Rated+.................. 0.2
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets
@ Source: Standards and Poors
# Calculated as a percentage of total debt issues
+ Represents debt issues that have either no rating or is unavailable from the
data source.
12
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2009
Principal Market Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES -- 96.5%
CERTIFICATES OF DEPOSIT -- 11.6%
Barclays Bank PLC
0.63% due 01/06/10+............ $25,750,000 $ 25,750,000
Barclays Bank PLC
0.82% due 01/08/10............. 4,500,000 4,500,507
Calyon
0.39% due 01/04/10+............ 7,000,000 6,999,640
Calyon
0.39% due 03/15/10+............ 2,200,000 2,199,482
Calyon
1.33% due 01/19/10+............ 13,500,000 13,500,259
Deutsche Bank AG
0.65% due 10/05/10............. 12,600,000 12,600,000
Royal Bank of Canada
0.23% due 01/11/10+............ 12,500,000 12,500,000
Royal Bank of Canada
0.29% due 03/22/10+............ 12,000,000 12,000,000
------------
Total Certificates of Deposit
(amortized cost $90,049,888).. 90,049,888
------------
COMMERCIAL PAPER -- 4.9%
Deutsche Bank Financial, LLC
0.02% due 01/04/10............. 25,000,000 24,999,958
State Street Corp.
0.13% due 01/19/10............. 12,600,000 12,599,181
------------
Total Commercial Paper
(amortized cost $37,599,139).. 37,599,139
------------
CORPORATE NOTES -- 0.6%
J.P. Morgan Chase & Co.
FDIC Guar. Notes
0.35% due 02/23/10+
(amortized cost $5,000,000).... 5,000,000 5,000,000
------------
MEDIUM TERM NOTES -- 17.6%
Bank of America Corp.
0.39% due 02/22/10+............ 27,000,000 26,988,095
Bank of America NA
0.87% due 02/12/10+............ 11,500,000 11,523,516
Citigroup Funding, Inc.
1.33% due 02/08/10+............ 35,400,000 35,370,510
Citigroup, Inc.
0.42% due 02/18/10+............ 524,000 522,084
General Electric Capital Corp.
0.28% due 03/12/10+............ 6,030,000 6,030,811
General Electric Capital Corp.
0.31% due 01/04/10+............ 7,000,000 6,999,979
General Electric Capital Corp.
0.35% due 01/20/10............. 5,500,000 5,500,351
General Electric Capital Corp.
0.40% due 03/12/10+............ 6,900,000 6,900,000
General Electric Capital Corp.
FDIC Guar. Notes
0.89% due 03/09/10+............ 10,400,000 10,482,168
Wachovia Bank NA
0.33% due 03/02/10+............ 7,050,000 7,046,129
Wachovia Corp.
0.41% due 03/01/10+............ 12,750,000 12,747,573
Wells Fargo & Co.
0.49% due 02/22/10+............ 6,000,000 6,005,734
------------
Total Medium Term Notes
(amortized cost $136,116,950). 136,116,950
------------
Principal Market Value
Security Description Amount (Note 2)
---------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 61.8%
Agency for International Development Panama
0.61% due 01/06/10+........................ $ 1,513,221 $ 1,515,982
Federal Farm Credit Bank
0.23% due 01/27/10+........................ 13,000,000 12,998,659
0.65% due 01/04/10+....................... 13,400,000 13,400,000
2.25% due 07/01/10........................ 280,000 282,137
4.45% due 08/27/10........................ 290,000 296,740
Federal Home Loan Bank
0.01% due 02/19/10......................... 5,000,000 4,999,932
0.18% due 01/11/10+....................... 35,000,000 34,996,178
0.21% due 01/11/10+....................... 26,000,000 26,000,000
0.23% due 01/08/10+....................... 28,000,000 28,001,059
0.35% due 10/13/10........................ 12,650,000 12,650,000
0.50% due 10/19/10........................ 25,500,000 25,496,787
0.55% due 07/15/10........................ 635,000 634,333
0.90% due 04/07/10........................ 12,500,000 12,498,342
1.00% due 02/12/10........................ 28,000,000 27,967,333
1.02% due 02/23/10........................ 5,000,000 4,992,492
1.02% due 02/26/10........................ 14,000,000 13,998,191
1.05% due 02/23/10........................ 13,500,000 13,498,008
1.05% due 03/05/10........................ 13,600,000 13,598,549
Federal Home Loan Mtg. Corp.
0.08% due 03/17/10......................... 12,600,000 12,597,900
0.14% due 02/04/10+....................... 19,000,000 19,000,000
0.14% due 04/27/10........................ 7,700,000 7,696,526
0.18% due 01/11/10+....................... 12,000,000 11,999,891
0.21% due 04/26/10........................ 12,500,000 12,491,615
0.22% due 04/26/10........................ 12,500,000 12,491,215
0.24% due 04/26/10........................ 12,700,000 12,690,263
0.32% due 09/14/10........................ 3,612,000 3,603,781
0.33% due 01/07/10+....................... 13,500,000 13,498,295
Federal National Mtg. Assoc.
0.07% due 02/17/10......................... 12,500,000 12,498,939
0.11% due 03/17/10........................ 13,750,000 13,746,849
0.17% due 01/13/10+....................... 44,500,000 44,499,127
0.22% due 02/12/10+....................... 13,500,000 13,504,042
0.23% due 02/05/10+....................... 13,500,000 13,499,053
0.31% due 01/11/10........................ 12,000,000 11,998,967
0.33% due 02/01/10........................ 13,000,000 12,996,306
4.13% due 05/15/10........................ 680,000 688,865
4.30% due 08/18/10........................ 520,000 531,205
4.38% due 09/13/10........................ 770,000 788,442
7.13% due 06/15/10........................ 367,000 377,709
------------
Total U.S. Government Agencies
(amortized cost $479,023,712)............. 479,023,712
------------
Total Short-Term Investment Securities -- 96.5%
(amortized cost $747,789,689)............. 747,789,689
------------
13
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2009 -- (continued)
Principal Market Value
Security Description Amount (Note 2)
----------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.6%
UBS Securities LLC
Joint Repurchase Agreement(1)
(amortized cost $27,892,000)......... 27,892,000 27,892,000
------------
TOTAL INVESTMENTS --
(amortized cost $775,681,689)(2).... 100.1% 775,681,689
Liabilities in excess of other assets. (0.1) (457,070)
---------- ------------
NET ASSETS............................ 100.0% $775,224,619
========== ============
- --------
+ Variable Rate Security - the rate reflected is as of December 31, 2009,
maturity date reflects next reset date.
(1) See Note 2 for details of Joint Repurchase Agreements.
(2) At December 31, 2009, the cost of securities for federal income tax
purposes was the same for book purposes.
FDIC --Federal Deposit Insurance Corp.
The following is a summary of the inputs used to value the Portfolio's net
assets as of December 31, 2009 (see Note 2):
Level 1--Unadjusted Level 2--Other Level 3--Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
------------------- ----------------- -------------------- ------------
Short-Term Investment Securities:
Certificates of Deposit......... $ -- $ 90,049,888 $ -- $ 90,049,888
Commercial Paper................ -- 37,599,139 -- 37,599,139
Corporate Bonds & Notes......... -- 5,000,000 -- 5,000,000
Medium Term Notes............... -- 136,116,950 -- 136,116,950
U.S. Government Agencies........ -- 479,023,712 -- 479,023,712
Repurchase Agreement.............. -- 27,892,000 -- 27,892,000
---- ------------ ---- ------------
Total............................. $ -- $775,681,689 $ -- $775,681,689
==== ============ ==== ============
See Notes to Financial Statements
14
SunAmerica Municipal Money Market Fund
PORTFOLIO PROFILE -- December 31, 2009 -- (unaudited)
Allocation by States*
Illinois.......................... 8.7%
New York.......................... 7.9
California........................ 7.9
Kentucky.......................... 7.2
Texas............................. 7.1
Colorado.......................... 6.9
Michigan.......................... 5.9
Utah.............................. 5.0
Florida........................... 5.0
Maryland.......................... 4.5
North Dakota...................... 4.0
North Carolina.................... 3.9
District of Columbia.............. 3.2
Washington........................ 2.8
Massachusetts..................... 2.6
New Jersey........................ 2.5
Pennsylvania...................... 2.0
Arizona........................... 1.7
South Dakota...................... 1.5
Missouri.......................... 1.4
Ohio.............................. 1.3
Maine............................. 1.1
Oregon............................ 1.0
Wyoming........................... 1.0
Kansas............................ 1.0
New Mexico........................ 0.9
Idaho............................. 0.8
Connecticut....................... 0.4
Nevada............................ 0.2
Registered Investment Company..... 0.1
Wisconsin......................... 0.1
----
99.6%
====
Weighted average days to maturity. 11.0
Credit Quality Allocation @#
A-1.......................... 70.2%
SP-1......................... 2.3
Not Rated+................... 27.5
-----
100.0%
=====
- --------
* Calculated as a percentage of net assets
@ Source: Standard and Poor's
# Calculated as a percentage of total debt issues
+ Represents debt issues that have either no rating or is unavailable from the
data source.
15
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2009
Principal Market Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES -- 99.6%
Arizona -- 1.7%
Maricopa County, Arizona Industrial
Development Authority
(LOC-Harris Trust & Savings Bank)
0.42% due 01/07/10+...................... $ 460,000 $ 460,000
Maricopa County, Arizona Industrial
Development Authority Multi Family
Housing
Series A
(LOC-Wells Fargo Bank N.A.)
0.42% due 01/07/10+...................... 1,390,000 1,390,000
----------
1,850,000
----------
California -- 7.9%
Big Bear Lake, California Industrial
Series A
(LOC-KBC Bank NV)
0.27% due 01/06/10+...................... 2,000,000 2,000,000
California Housing Finance Agency
Series M
(LOC-Fannie Mae & Freddie Mac)
0.35% due 01/04/10+...................... 700,000 700,000
California Housing Finance Agency
Series M
(LOC-Fannie Mae & Freddie Mac)
0.40% due 01/04/10+...................... 300,000 300,000
California Housing Finance Agency
Series F
(LOC-Fannie Mae & Freddie Mac)
0.77% due 01/06/10+...................... 2,905,000 2,905,000
California Housing Finance Agency Multi
Family Housing
Series C
(LOC-Fannie Mae & Freddie Mac)
0.36% due 01/04/10+...................... 560,000 560,000
California State Department of Water
Resources Supply
Series B-2
(LOC-BNP Paribas)
0.26% due 01/04/10+...................... 380,000 380,000
California State Department of Water
Resources Supply
Series C-11
(LOC-KBC Bank NV & Bank of Nova Scotia)
0.30% due 01/07/10+...................... 600,000 600,000
San Bernardino County, California
Improvement Project
(LOC-BNP Paribas)
0.15% due 01/07/10+...................... 1,300,000 1,300,000
----------
8,745,000
----------
Colorado -- 6.9%
Colorado Housing & Finance Authority
Series I-B2
0.27% due 01/06/10+...................... 1,440,000 1,440,000
Colorado Housing & Finance Authority
Series I-B3
0.27% due 01/06/10+...................... 335,000 335,000
Principal Market Value
Security Description Amount (Note 2)
-------------------------------------------------------------------------
Colorado Springs, Colorado Utilities
Series A
0.20% due 01/07/10+............................ $3,880,000 $3,880,000
Denver, Colorado City & County Certificates of
Participation
Series A-1
0.20% due 01/04/10+............................ 2,000,000 2,000,000
----------
7,655,000
----------
Connecticut -- 0.4%
Connecticut State Housing Finance Authority
Series A-1
0.20% due 01/04/10+............................ 450,000 450,000
----------
District of Columbia -- 3.2%
Metropolitan Washington D.C. Airports
Authority System
Series A-2
0.45% due 01/07/10+............................ 3,500,000 3,500,000
----------
Florida -- 5.0%
Broward County, Florida School Board
0.25% due 01/07/10+............................ 3,240,000 3,240,000
Collier County, Florida Health Facilities
Authority
(LOC-Wachovia Bank N.A.)
0.24% due 01/06/10+............................ 350,000 350,000
Orlando & Orange County, Florida Expressway
Authority
Series B-1
(LOC-Bank of America N.A.)
0.23% due 01/07/10+............................ 1,900,000 1,900,000
----------
5,490,000
----------
Idaho -- 0.8%
Idaho Health Facilities Authority
0.30% due 01/04/10+............................ 865,000 865,000
----------
Illinois -- 8.7%
Chicago, Illinois O'Hare International Airport
Series B
(LOC-Societe Generale)
0.38% due 01/06/10+............................ 730,000 730,000
Chicago, Illinois Sales Tax
0.20% due 01/04/10+............................ 1,055,000 1,055,000
City of Chicago, Illinois
Series B-2
0.20% due 01/04/10+............................ 500,000 500,000
Illinois Educational Facilities Authority
(LOC-Harris Trust & Savings Bank)
0.20% due 01/06/10+............................ 2,150,000 2,150,000
Illinois Finance Authority
Series E
0.23% due 01/06/10+............................ 695,000 695,000
Illinois State General Obligation
5.50% due 04/01/10............................. 500,000 505,430
Jackson-Union Counties, Illinois Regional
Port District
(LOC-Wachovia Bank N.A.)
0.21% due 01/06/10+............................ 4,050,000 4,050,000
----------
9,685,430
----------
16
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2009 -- (continued)
Principal Market Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
Kansas -- 1.0%
Kansas State Department of Transportation
Series A-3
0.18% due 01/07/10+........................... $ 595,000 $ 595,000
Kansas State Department of Transportation
Series A-4
0.18% due 01/07/10+........................... 500,000 500,000
----------
1,095,000
----------
Kentucky -- 7.2%
Breckinridge County, Kentucky Lease
Program
(LOC-U.S. Bank N.A.)
0.21% due 01/06/10+........................... 1,425,000 1,425,000
Breckinridge County, Kentucky Lease
Program
Series A
(LOC-U.S. Bank N.A.)
0.21% due 01/06/10+........................... 2,570,000 2,570,000
Kentucky Housing Corporation
Series F
0.27% due 01/06/10+........................... 1,090,000 1,090,000
Kentucky Housing Corporation
Series I
0.27% due 01/06/10+........................... 995,000 995,000
Trimble County Association of Counties
Leasing Trust Lease Program
Series A
(LOC-U.S. Bank N.A.)
0.20% due 01/04/10+........................... 1,860,000 1,860,000
----------
7,940,000
----------
Maine -- 1.1%
Maine State Housing Authority
Series H
0.23% due 01/04/10+........................... 1,185,000 1,185,000
----------
Maryland -- 4.5%
Maryland Health & Higher Education Facilities
Authority
Series A
(LOC-Wachovia Bank N.A.)
0.17% due 01/07/10+........................... 2,995,000 2,995,000
Maryland Health & Higher Education Facilities
Authority
Series B
0.19% due 01/06/10+........................... 100,000 100,000
Washington County, Maryland
County Commissioners Office
Series E
(LOC-Wachovia Bank N.A.)
0.21% due 01/07/10+........................... 1,900,000 1,900,000
----------
4,995,000
----------
Massachusetts -- 2.6%
Massachusetts State Water Resources
Authority
Series C
0.27% due 01/06/10+........................... 2,935,000 2,935,000
----------
Principal Market Value
Security Description Amount (Note 2)
-----------------------------------------------------------------------
Michigan -- 5.9%
Holt, Michigan Public Schools
(LOC-Landsbank Hessen)
0.17% due 01/07/10+.......................... $3,990,000 $3,990,000
Michigan State General Obligation
Series A
2.00% due 09/30/10........................... 2,500,000 2,527,270
----------
6,517,270
----------
Missouri -- 1.4%
Kansas City Industrial Development Authority
(LOC-Bank of America N.A.)
0.22% due 01/06/10+.......................... 1,550,000 1,550,000
----------
Nevada -- 0.2%
Clark County, Nevada School District
Series A
0.25% due 01/04/10+.......................... 200,000 200,000
----------
New Jersey -- 2.5%
New Jersey Economic Development Authority
Series B
0.20% due 01/04/10+.......................... 100,000 100,000
New Jersey Economic Development Authority
Series R-3
(LOC-Nova Scotia & Lloyds TSB Bank PLC)
0.21% due 01/04/10+.......................... 310,000 310,000
New Jersey Economic Development Authority
Series V-2
(LOC-Dexia Credit Local)
0.35% due 01/06/10+.......................... 2,000,000 2,000,000
New Jersey State Housing & Mortgage
Finance Agency
Series A
0.22% due 01/07/10+.......................... 390,000 390,000
----------
2,800,000
----------
New Mexico -- 0.9%
Santa Fe County, New Mexico Education
Facility
Series A
(LOC-Allied Irish Bank PLC)
0.30% due 01/07/10+.......................... 1,000,000 1,000,000
----------
New York -- 7.9%
City of New York, New York
Series E-5
(LOC-JP Morgan Chase Bank)
0.20% due 01/04/10+.......................... 400,000 400,000
City of New York, New York
Series E-5
(LOC-JP Morgan Chase Bank)
0.24% due 01/04/10+.......................... 500,000 500,000
City of New York, New York
Series H-1
(LOC-Bank of New York)
0.20% due 01/04/10+.......................... 400,000 400,000
City of New York, New York
Series H-1
(LOC-Dexia Credit Local)
0.30% due 01/04/10+.......................... 270,000 270,000
17
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2009 -- (continued)
Principal Market Value
Security Description Amount (Note 2)
SHORT-TERM INVESTMENT SECURITIES (continued)
New York (continued)
City of New York, New York
Series J-3
(LOC-Allied Irish Bank PLC)
0.20% due 01/04/10+.......................... $ 370,000 $ 370,000
New York City Metropolitan
Transportation Authority
Series D-1
0.30% due 01/07/10+.......................... 2,200,000 2,200,000
New York City Metropolitan
Transportation Authority
Series G
(LOC-BNP Paribas)
0.22% due 01/04/10+.......................... 990,000 990,000
New York City Municipal Water Finance
Authority & Sewer System
Series B-2
0.20% due 01/04/10+.......................... 395,000 395,000
New York City Municipal Water Finance
Authority & Sewer System
Series C
0.23% due 01/04/10+.......................... 1,100,000 1,100,000
New York City Municipal Water Finance
Authority & Sewer System
Series F-2
0.23% due 01/04/10+.......................... 105,000 105,000
New York City Transitional Finance Authority
Series 2-E
0.28% due 01/06/10+.......................... 300,000 300,000
New York City Transitional Finance Authority
Series 3-C
0.28% due 01/06/10+.......................... 700,000 700,000
New York City Transitional Finance Authority
Series 3-D
0.28% due 01/06/10+.......................... 910,000 910,000
Triborough Bridge & Tunnel Authority
0.20% due 01/06/10+.......................... 140,000 140,000
----------
8,780,000
----------
North Carolina -- 3.9%
City of Winston-Salem, North Carolina
Series C
0.27% due 01/07/10+.......................... 1,400,000 1,400,000
North Carolina Medical Care Commission
Series B
0.19% due 01/07/10+.......................... 1,850,000 1,850,000
Wilmington, North Carolina General
Obligation
0.24% due 01/06/10+.......................... 1,040,000 1,040,000
----------
4,290,000
----------
North Dakota -- 4.0%
North Dakota State Housing Finance Agency
Series A
0.31% due 01/06/10+.......................... 2,605,000 2,605,000
North Dakota State Housing Finance Agency
Series B
0.31% due 01/06/10+.......................... 1,850,000 1,850,000
----------
4,455,000
----------
Principal Market Value
Security Description Amount (Note 2)
-----------------------------------------------------------------------
Ohio -- 1.3%
Ohio Housing Finance Agency
Series B-1
0.26% due 01/06/10+.......................... $ 565,000 $ 565,000
Ohio Housing Finance Agency Multi Family
Housing
(LOC-Federal Home Loan Bank)
0.29% due 01/07/10+.......................... 890,000 890,000
----------
1,455,000
----------
Oregon -- 1.0%
Medford Hospital Facilities Authority
(LOC-KBC Bank N.V.)
0.23% due 01/04/10+.......................... 555,000 555,000
Multnomah County, Oregon Hospital Facilities
Authority
(LOC-Allied Irish Bank PLC)
0.24% due 01/04/10+.......................... 560,000 560,000
----------
1,115,000
----------
Pennsylvania -- 2.0%
Pennsylvania State Higher Educational
Facilities Authority
Series A-7
(LOC-Allied Irish Bank PLC)
0.34% due 01/07/10+.......................... 900,000 900,000
Pittsburgh, Pennsylvania Water & Sewer
Authority
Series B-1
0.27% due 01/07/10+.......................... 1,300,000 1,300,000
----------
2,200,000
----------
South Dakota -- 1.5%
South Dakota Housing Development Authority
Series C-1
0.32% due 01/07/10+.......................... 1,700,000 1,700,000
----------
Texas -- 7.1%
Corpus Christi, Texas City Hall
3.00% due 03/01/10........................... 3,910,000 3,924,198
Harris County, Texas Health Facilities
Development Authority
Series B
(LOC-JP Morgan Chase Bank)
0.20% due 01/04/10+.......................... 100,000 100,000
Lubbock, Texas Health Facilities Development
Corp.
Series B
(LOC-Wachovia Bank N.A.)
0.23% due 01/04/10+.......................... 150,000 150,000
San Antonio, Texas Electric & Gas
Series B
4.00% due 02/01/10........................... 2,000,000 2,005,436
Texas State Economic Development
Series A-2
0.26% due 01/06/10+.......................... 1,100,000 1,100,000
Texas Water Development Board
Series A
0.22% due 01/04/10+.......................... 540,000 540,000
----------
7,819,634
----------
18
SunAmerica Municipal Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 2009 -- (continued)
Principal Market Value
Security Description Amount (Note 2)
-----------------------------------------------------------------
SHORT-TERM INVESTMENT SECURITIES (continued)
Utah -- 5.0%
Utah Housing Corporation Single Family
Mortgage
Series A
0.37% due 01/06/10+.................... $1,675,000 $1,675,000
Utah Housing Corporation Single Family
Mortgage
Series E-1
0.37% due 01/06/10+.................... 935,000 935,000
Utah Housing Corporation Single Family
Mortgage
Series F
0.37% due 01/06/10+.................... 2,900,000 2,900,000
----------
5,510,000
----------
Washington -- 2.8%
Washington State Housing Finance
Commission
(LOC-Bank of America N.A.)
0.32% due 01/04/10+.................... 2,050,000 2,050,000
Washington State Housing Finance
Commission
Series A
(LOC-Wells Fargo Bank N.A.)
0.36% due 01/04/10+.................... 1,025,000 1,025,000
----------
3,075,000
----------
Principal Market Value
Security Description Amount (Note 2)
----------------------------------------------------------------
Wisconsin -- 0.1%
Wisconsin Housing & Economic
Development Authority
Series C
0.34% due 01/06/10+.................. $ 75,000 $ 75,000
------------
Wyoming -- 1.0%
Sweetwater County, Wyoming Pollution
Control
Series A
(LOC-Barclays Bank PLC)
0.20% due 01/06/10+.................. 1,100,000 1,100,000
------------
Registered Investment Company -- 0.1%
SSGA Tax Free Money Market Fund
(amortized cost $97,566)............. 97,566 97,566
------------
Total Short-Term Investment Securities
(amortized cost $110,129,900)......... 110,129,900
------------
TOTAL INVESTMENTS --
(amortized cost $110,129,900)(1)...... 99.6% 110,129,900
Other assets less liabilities........... 0.4 401,318
---------- ------------
NET ASSETS --........................... 100.0% $110,531,218
========== ============
- --------
+ Variable Rate Security - the rate reflected is as of December 31, 2009,
maturity date reflects next reset date.
(1) At December 31, 2009, the cost of securities for federal income tax
purposes was the same for book purposes.
LOC --Letter of Credit
The following is a summary of the inputs used to value the Portfolio's net
assets as of December 31, 2009 (see Note 2):
Level 1--Unadjusted Level 2--Other Level 3--Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
------------------- ----------------- -------------------- ------------
Short-Term Investment Securities:
California...................... $ -- $ 8,745,000 $ -- $ 8,745,000
Colorado........................ -- 7,655,000 -- 7,655,000
Florida......................... -- 5,490,000 -- 5,490,000
Illinois........................ -- 9,685,430 -- 9,685,430
Kentucky........................ -- 7,940,000 -- 7,940,000
Michigan........................ -- 6,517,270 -- 6,517,270
New York........................ -- 8,780,000 -- 8,780,000
Texas........................... -- 7,819,634 -- 7,819,634
Utah............................ -- 5,510,000 -- 5,510,000
Other States+................... -- 41,890,000 -- 41,890,000
Registered Investment Companies. -- 97,566 -- 97,566
---- ------------ ---- ------------
Total............................. $ -- $110,129,900 $ -- $110,129,900
==== ============ ==== ============
- --------
+ Sum of all other States each of which individually has an aggregate market
value of less than 5% of net assets.
See Notes to Financial Statements
19
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009
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 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 investment purposes, in municipal securities that are exempt
from regular federal income tax.
The Money Market Fund currently offers two classes of shares: Class A 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 certain shares sold within one year of
original purchase and a 0.50% CDSC is imposed on certain
shares sold after the first year and within the second year
after purchase, as described in the Funds' Prospectus.
Class I shares-- Class I shares are offered at net asset value per share
without any sales charge, exclusively to certain
institutions.
Effective June 3, 2009, the Money Market Fund no longer accepted orders to
purchase Class B and Class C shares, including from existing shareholders.
Any outstanding Class B and Class C shares of the Money Market Fund as of
the close of business on June 3, 2009 were converted to Class A shares of
the 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 shares of each Fund have their own 12b-1
plan.
Indemnifications: The Corporation's organizational documents provide current
and former officers and directors with a limited indemnification against
liabilities arising out of the performance of their duties to the
Corporation. In addition, pursuant to Indemnification Agreements between the
Corporation and each of the current directors who is not an "interested
person," as defined in Section 2(a)(19) of the Investment Company Act of
1940, as amended (the "1940 Act"), of the Corporation (collectively, the
"Disinterested Directors"), the Corporation provides the Disinterested
Directors with a limited indemnification against liabilities arising out of
the performance of their duties to the Corporation, whether such liabilities
are asserted during or after their service as directors. In addition, in the
normal course of business the Corporation enters into contracts that contain
the obligation to indemnify others. The Corporation's maximum exposure under
these arrangements is unknown. Currently, however, the Corporation expects
the risk of loss to be remote.
- --------
* Effective April 1, 2009, AIG SunAmerica Asset Management Corp. changed its
name to SunAmerica Asset Management Corp.
20
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009 -- (continued)
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates and
those differences could be significant. The following is a summary of the
significant accounting policies followed by the Funds in the preparation of
its financial statements:
Security Valuations: Portfolio securities are valued at amortized cost,
which approximates market value. The amortized cost method involves valuing
a security at its cost on the date of purchase and thereafter assuming a
constant amortization/accretion to maturity of any discount or premium. 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.
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.
The various inputs that may be used to determine the value of the Funds'
investments are summarized into 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, referenced indices, quoted prices in
inactive markets, adjusted quoted prices in active markets,
etc.)
Level 3-- Significant unobservable inputs (includes inputs that
reflect the Funds' own assumptions about the assumptions
market participants would use in pricing the security,
developed based on the best information available under the
circumstances)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The summary of the inputs used to value the Funds' net assets as of
December 31, 2009 are reported on a schedule following the Portfolio of
Investments.
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from 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, plus accrued interest, 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
21
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009 -- (continued)
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 Funds may be delayed or limited.
At December 31, 2009, the following Fund held an undivided interest in a
joint repurchase agreement with UBS Securities, LLC.:
Percentage Principal
Portfolio Interest Amount
--------- ---------- -----------
Money Market Fund................................. 13.95% $27,892,000
As of that date, the repurchase agreement in the joint account and the
collateral therefore were as follows:
UBS Securities, LLC, dated December 31, 2009, bearing interest at a rate of
0.00% per annum, with a principal amount of $200,000,000, a repurchase price
of $200,000,000 and a maturity date of January 4, 2010. The repurchase
agreement is collateralized by the following:
Interest Maturity
Type of Collateral Rate Date Principal Amount Market Value
------------------ -------- -------- ---------------- ------------
U.S. Treasury Inflation Index
Notes....................... 0.88% 03/31/11 $203,237,900 $204,000,042
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 from settlement date,
except when collections is not expected; dividend income is recorded on the
ex-dividend date.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses, are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of the dividend-eligible shares, as appropriate) of each class of shares at
the beginning of the day (after adjusting for the current capital shares
activity of the respective class).
Expenses common to all Funds, not directly related to individual Funds, are
allocated among the Funds based upon their relative net asset value or other
appropriate methods. In all respects, expenses are charged to each Fund as
incurred on a specific identification basis. Interest earned on cash
balances held at the custodian are shown as custody credits in the Statement
of Operations.
Dividends from net investment income, if any, are normally declared daily
and paid monthly. Capital gain distributions, if any, are paid annually. The
Funds record dividends and distributions to their shareholders on the ex-
dividend date. The amount of dividends and distributions from net investment
income and net realized capital gains are determined in accordance with
federal income tax regulations, which may differ from U.S. generally
accepted accounting principles. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent these differences
are permanent in nature, such amounts are reclassified within the capital
accounts at fiscal year end based on their federal tax-basis treatment;
temporary differences do not require reclassification. Net investment income
(loss), net realized gain (loss), and net assets are not affected by these
reclassifications.
The Funds intend to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute all of its
taxable income, including any capital gains, to its shareholders. Therefore,
no federal tax provisions are required. Each Fund is considered a separate
entity for tax purposes. The Funds file U.S. federal and certain state
income tax returns. With few exceptions, the Funds are no longer subject to
U.S. federal and state tax examinations by tax authorities for tax years
ending before 2006.
22
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009 -- (continued)
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 to each Fund's portfolio and
administers the Corporation's 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
Corporation 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 Asset Management
(U.S.), LLC ("AMG") pursuant to a subadvisory agreement with SunAmerica.+
AMG is an indirect wholly-owned subsidiary of AIG and an affiliate of
SunAmerica. AMG 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. This fee waiver and expense reimbursement will continue in effect
indefinitely, unless terminated 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 1940 Act ("Independent Directors").
Fund Percentage
---- ----------
Money Market Class I.......... 0.80%
Municipal Money Market Class A 0.95
For the period ended December 31, 2009, pursuant to the contractual expense
limitations in the above table, SunAmerica reimbursed expenses as follows:
Fund
----
Money Market Class I.......... $37,932
Municipal Money Market Class A 4,417
SunAmerica may also voluntarily waive fees and/or reimburse expenses,
including to avoid a negative yield on any class of the Funds. The voluntary
waivers and/or reimbursements may be terminated at any time at the option of
SunAmerica. The exact amount of the voluntary waivers and/or reimbursements
may change on a day-to-day basis. There is no guarantee that either Fund
will be able to avoid a negative yield.
- --------
+ Effective December 31, 2009, AIG Global Investment Corp. ("AIGGIC"), the
subadviser to Municipal Money Market Fund and an indirect, wholly-owned
subsidiary of AIG, designated AMG as its successor under the Subadvisory
Agreement between AIGGIC and SunAmerica and assigned its rights under the
Subadvisory Agreement to AMG. Pursuant to this designation, AMG accepted all
of AIGGIC's rights, title and interest in and to the Subadvisory Agreement
and assumed all of AIGGIC's duties, obligations and liabilities under the
Subadvisory Agreement.
23
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009 -- (continued)
For the period ended December 31, 2009, SunAmerica voluntarily waived fees
and/or reimbursed expenses as follows:
Fund
----
Money Market Class A.......... $1,169,739
Money Market Class B*......... 57,473
Money Market Class C*......... 92,932
Money Market Class I.......... 16,040
Municipal Money Market Class A 349,360
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 their Class A shares (each a "Plan" and
collectively, the "Plans") in accordance with the provisions of Rule 12b-1
under the 1940 Act. 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.
The Plans provide that the Class A shares of the Funds shall pay the
Distributor an account maintenance fee 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,
SACS received fees (see Statement of Operations) based upon the
aforementioned rates. In addition, in light of current market conditions,
and in order to avoid a negative yield on Class A shares of the Fund, SACS
has agreed, effective June 3, 2009, to waive up to 0.15% of the fees it
receives under the Plans. This voluntary waiver may be terminated at any
time at the option of the Distributor without notice to shareholders.
For the period ended December 31, 2009, SACS voluntarily waived fees as
follows:
Fund
----
Money Market Class A.......... $724,774
Municipal Money Market Class A 120,767
SACS receives the proceeds of contingent deferred sales charges paid by
investors in connection with certain redemptions of each Fund's Class A
shares. SACS has advised the Funds for the year ended December 31, 2009, the
proceeds received from redemptions are as follows:
Contingent Deferred Sales Charges
-------------------------------
Fund Class A Class B* Class C*
---- --------- ---------- ----------
Money Market.................. $489 $58,656 $6,296
Municipal Money Market........ -- -- --
-----
* See Note 1
24
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009 -- (continued)
The Funds have entered into a Service Agreement with 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, 2009, the Funds incurred the following expenses which are
included in transfer agent fees and expenses payable line in the Statement
of Assets 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
Expenses December 31, 2009
---------- -----------------
Money Market Fund Class A..... $1,953,296 $143,822
Money Market Fund Class B*.... 19,563 --
Money Market Fund Class C*.... 35,254 --
Money Market Fund Class I..... 34,644 2,789
Municipal Money Market Fund
Class A..................... 328,543 21,527
As of December 31, 2009, 81% of the Money Market Fund's total outstanding
shares and 99% 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 a result of losses on medium-term notes issued by Cheyne Finance LLC,
that were previously held by the Money Market Fund, SunAmerica made capital
contributions to the Money Market Fund in the amount of $3,684,000 and
$2,295,500, for the years ended December 31, 2008 and December 31, 2009,
respectively. As of December 31, 2009, $44,000 is due from SunAmerica, which
is included in the Due from investment adviser line in the Statement of
Assets and Liabilities.
On March 4, 2009, AIG, the ultimate parent of SunAmerica, SACS, SAFS and
AMG, issued and sold to the AIG Credit Facility Trust, a trust established
for the sole benefit of the United States Treasury (the "Trust"), 100,000
shares of AIG's Series C Perpetual, Convertible, Participating Preferred
Stock (the "Stock") for an aggregate purchase price of $500,000, with an
understanding that additional and independently sufficient consideration was
also furnished to AIG by the Federal Reserve Bank of New York (the "FRBNY")
in the form of its lending commitment (the "Credit Facility") under the
Credit Agreement, dated as of September 22, 2008, between AIG and the FRBNY.
The Stock has preferential liquidation rights over AIG common stock, and, to
the extent permitted by law, votes with AIG's common stock on all matters
submitted to AIG's shareholders. The Trust has approximately 79.9% of the
aggregate voting power of AIG's common stock and is entitled to
approximately 79.9% of all dividends paid on AIG's common stock, in each
case treating the Stock as if converted. The Stock will remain outstanding
even if the Credit Facility is repaid in full or otherwise terminates.
-----
+ Effective March 17, 2009, AIG SunAmerica Fund Services, Inc. changed its
name to SunAmerica Fund Services, Inc.
* See Note 1
25
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009 -- (continued)
Note 4. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily arising from
dividends payable, capital contributions and cumulative pension expenses.
Distributable Earnings Tax Distributions
-------------------------------------- -------------------------------
For the year ended December 31, 2009
----------------------------------------------------------------------
Long-term
Gains/Capital Unrealized Long-Term
Ordinary and Other Appreciation Ordinary Capital
Fund Income Losses (Depreciation) Income Gains Tax Exempt
- ---- -------- ------------- -------------- ---------- --------- ----------
Money Market........ $174,435 $(2,268,424) $ -- $1,269,425 $ -- $ --
Municipal Money
Market............. 17,108* (24,502) -- -- -- 33,173
Tax Distributions
------------------------------------
For the year ended December 31, 2008
------------------------------------
Long-Term
Ordinary Capital
Fund Income Gains Tax Exempt
- ---- ------------ --------- ----------
Money Market........ $ 20,757,226 $ -- $ --
Municipal Money
Market............. -- -- 2,444,662
-----
* Tax Exempt distributable earnings
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated, as of December 31, 2009,
which are available to offset future capital gains, if any:
Fund Capital Loss Carryforward
---- ----------------------------------------
2012 2013 2014 2015 2016 2017
- ------ ------- ---- ---- ---------- ----
Money Market.................. $ -- $ -- $ -- $ -- $2,268,424 $ --
Municipal Money Market........ 8,062 16,252 -- -- 188 --
The Funds indicated below, utilized capital loss carryforwards, which offset
net taxable gains realized in the year ended December 31, 2009.
Capital Loss
Carryforward
Fund Utilized
---- ------------
Money Market.................. $6,337,128
Municipal Money Market........ 8
For the year ended December 31, 2009, 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
Undistributed
Net Accumulated
Investment Undistributed
Income Net Realized Capital
Fund (Loss) Gain (Loss) Paid-In
---- ------------- ------------- -------
Money Market.................. $ -- $ -- $ --
Municipal Money Market........ (9,631) -- 9,631
26
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009 -- (continued)
Note 5. Capital Share Transactions
Transactions in each class of shares of the Funds, all at $1.00 per share,
for the period ended December 31, 2009 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 period year period year
year ended ended January 1 to ended January 1 to ended
December 31, December 31, June 3, December 31, June 3, December 31,
2009 2008 2009(4) 2008 2009(4) 2008
------------- ------------- ------------ ------------ ------------ ------------
Shares sold........... $ 373,006,486(1) $ 739,651,175(2) $ 5,107,861 $ 24,467,136 $ 15,016,720 $ 89,457,487
Shares issued and
redeemed in
conversion(4)........ 53,035,799 -- (18,382,384) -- (34,653,415) --
Reinvested dividends.. 1,220,038 19,606,294 2,027 193,858 4,274 328,868
Shares redeemed....... (664,975,046) (941,513,403) (9,881,430)(1) (19,832,404)(2) (21,065,068) (72,135,074)
------------- ------------- ------------ ------------ ------------ ------------
Net increase
(decrease)........... $(237,712,723) $(182,255,934) $(23,153,926) $ 4,828,590 $(40,697,489) $ 17,651,281
============= ============= ============ ============ ============ ============
---------------------------
Class I
--------------------------
For the For the
year year
ended ended
December 31, December 31,
2009 2008
------------ ------------
Shares sold........... $ 11,621,049 $ 16,999,656
Shares issued and
redeemed in
conversion(4)........ -- --
Reinvested dividends.. 33,086 345,755
Shares redeemed....... (14,052,469) (18,815,372)
------------ ------------
Net increase
(decrease)........... $ (2,398,334) $ (1,469,961)
============ ============
Municipal Money Market Fund
----------------------------
Class A
----------------------------
For the For the
year year
ended ended
December 31, December 31,
2009 2008
------------- -------------
Shares sold............. $ 123,834,392 $ 265,457,527(3)
Reinvested dividends.... 33,134 2,440,082
Shares redeemed......... (201,419,011) (233,720,922)
------------- -------------
Net increase (decrease). $ (77,551,485) $ 34,176,687
============= =============
- --------
(1)Includes automatic conversion of Class B shares in the amount of $1,832,886
to Class A shares.
(2)Includes automatic conversion of Class B shares in the amount of $1,872,559
to Class A shares
(3)Includes automatic conversion of Class B shares in the amount of $100 to
Class A shares.
(4)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.
27
SunAmerica Money Market Funds, Inc.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2009 -- (continued)
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 clause during prior years is added to each Eligible Director's
account. The rights of any Participant to benefits under the Retirement Plan
shall be an unsecured claim against the assets of the Adopting Funds. An
Eligible Director may receive any benefits payable under the Retirement
Plan, at his or her election, either in one lump sum or in up to 15 annual
installments. Any undistributed amounts shall continue to accrue interest at
8.50%.
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, 2009
---- -----------------------------------------------
Money Market Fund............. $32,773 $14,185 $250,072
Municipal Money Market Fund... 1,649 2,679 12,480
Note 7. Interfund Lending
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 period ended December 31,
2009, the Funds did not participate in the program.
Note 8. Subsequent Events
The Funds have performed an evaluation of subsequent events through February
24, 2010, which is the date the financial statements were issued. There were
no subsequent events noted.
28
SunAmerica Money Market Funds, Inc.
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 (the two portfolios
constituting SunAmerica Money Market Funds, Inc., hereafter referred to as the
"Funds") at December 31, 2009, 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, 2009 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
February 24, 2010
Houston, Texas
29
SunAmerica Money Market Funds, Inc.
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2009 -- (unaudited)
Approval of the Investment Advisory and Management Agreement and Subadvisory
Agreement+
The Board 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
its separate series, SunAmerica or AIGGIC (the "Disinterested Directors"),
approved the continuation of the Advisory Agreement between the Corporation, on
behalf of the Funds, and SunAmerica for a one-year period ending August 31,
2010 at an in-person meeting held on August 25, 2009. The Corporation currently
consists of two separate Funds, including the Money Market Fund and 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, 2010.+
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, and 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 its 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
- --------
+ Effective December 31, 2009, AIGGIC designated AMG as its successor under
the Subadvisory Agreement between AIGGIC and SunAmerica and assigned its
rights under the Subadvisory Agreement to AMG.
30
SunAmerica Money Market Funds, Inc.
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2009 -- (unaudited)
and extent of services provided under the Advisory Agreement were reasonable
and appropriate in relation to the management fee and that the quality of
services continues to be high.
The Board also considered 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, 2009,
SunAmerica managed, advised an/or administered approximately $35.3 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 Funds 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 Funds' Prospectus. The Board also considered AIGGIC's
code of ethics, and its compliance and regulatory history. The Board noted that
the AIGGIC has not experienced any material regulatory or compliance problems
nor have they been involved in any material litigation or administrative
proceedings that would potentially impact it from effectively serving as a
subadviser to the Municipal Money Market Fund. 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 Peer
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 25, 2009 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, 2009. The Board noted
that it was also provided with a supplemental Lipper performance report for the
periods ended June 30, 2009. 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, 2009.
Specifically, the Board considered that the Money Market Fund ranked in the
fifth quintile of its Peer Group for all periods ended May 31, 2009. The Board
then considered that the Municipal Money Market Fund ranked in the fourth
quintile for the two-, three-, four- and five-year periods ended May 31, 2009,
ranked in the third quintile for the one-year period and ranked in the fifth
quintile since the Fund's inception. The Board noted that the Funds'
performance does not meet the Board's expectations. The Board noted, however,
that with respect to the Money Market Fund, management had explained that
credit conditions, while improving recently, continue to remain challenging,
resulting in the Money Market Fund taking a more conservative and defensive
approach in selecting its investments, which hampered relative
31
SunAmerica Money Market Funds, Inc.
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2009 -- (unaudited)
performance. The Board also considered the voluntary fee waivers and/or expense
reimbursements being made by SunAmerica with respect to the Funds in order to
avoid a negative yield. 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 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
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 further considered management
fees received by SunAmerica with respect to other mutual funds and accounts
with similar investment strategies to the Money Market Fund, noting in
particular the differences in services that SunAmerica provides as adviser
compared to the services it provides as subadviser. 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
32
SunAmerica Money Market Funds, Inc.
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2009 -- (unaudited)
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. In particular, the Board
considered the significant capital contributions made by SunAmerica to the
Money Market Fund as a result of the losses with respect to Cheyne Finance
medium term notes previously held by the Money Market Fund.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, and considered the profitability of SunAmerica's affiliates under
the Rule 12b-1 Plans, Service Agreement and Administrative and Shareholder
Services Agreements. 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, 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 financial statements from AIGGIC 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 the Class I shares of the Money Market Fund and the
Class A 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.
33
SunAmerica Money Market Funds, Inc.
APPROVAL OF ADVISORY AGREEMENT -- December 31, 2009 -- (unaudited)
Conclusion. After a full and complete discussion, the Board approved the
Advisory Agreement with respect to the Funds, as well as the Subadvisory
Agreement with respect to the Municipal Money Market Fund, each for a one-year
period ending August 31, 2010. 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, 2009 -- (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 29 Director, Diversified
DOB: February 27, 1963 present National Community Pacific Opportunity Fund
Renaissance (1992 to I, LLC (2008 to
present); Founder, Owner present); Director
and Partner of Colonies Vandalia Heritage
Crossroads, Inc. (2000 Foundation (1998 to
to present); Owner and present)
Managing Member of
Diversified Pacific
Development Group, LLC
(1998 to present).
Dr. Judith L. Craven Director 2001- Retired. 78 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. 78 Director, Boston Options
DOB: December 30, 1938 present Exchange (2001 to
present).
Samuel M. Eisenstat Chairman 1985- Attorney, sole 39 Director, North European
DOB: March 7, 1940 of the present practitioner. Oil Royalty Trust (1996
Board to present).
Stephen J. Gutman Director 1984- Vice President, Corcoran 39 None
DOB: May 10, 1943 present Group (Real Estate)
(2003 to present);
President and Member of
Managing Directors, Beau
Brummell -- Soho, LLC
(Licensing of menswear
specialty retailing and
other activities) (1988
to 2006).
William J. Shea Director 2004- Managing Director, DLB 39 Executive Chairman,
DOB: February 9, 1948 present Capital, LLC (Private Lucid, Inc. (2007 to
Equity) (2006-present) Present); Chairman of
President and CEO, the Board, Royal and
Conseco, Inc. (Financial SunAlliance U.S.A., Inc.
Services) (2001 to 2004). (2004 to 2006);
Director, Boston Private
Financial Holdings (2004
to present); Chairman,
Demoullas Supermarkets
(1999 to Present).
Interested Director
Peter A. Harbeck(3) Director 1994- President, CEO and 87 None
DOB: January 23, 1954 present Director, SunAmerica
(1995 to present);
Director, -- SunAmerica
Capital Services, Inc.
(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, 2009 -- (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).
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).
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); Senior Vice
President SunAmerica (2002
to present).
Timothy Pettee Vice August Chief Investment Officer, N/A N/A
DOB: April 7, 1958 President 2008 to SunAmerica (2003 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, (2002 to 2006).
Officer
36
SunAmerica Money Market Funds, Inc.
DIRECTORS AND OFFICERS INFORMATION -- December 31, 2009 -- (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 2005- 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 Associate General Counsel,
SunAmerica (2002 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 (3 funds), SunAmerica
Income Funds (5 funds), SunAmerica Focused Series, Inc. (14 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), SunAmerica Specialty Series (3 funds), VALIC Company
I (33 portfolios), VALIC Company II (15 funds), Seasons Series Trust (24
portfolios) 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, Inc.
SHAREHOLDER TAX INFORMATION -- (unaudited)
Certain tax information regarding the Funds is required to be provided to
shareholders based upon each Fund's income and distributions for the taxable
year ended December 31, 2009. The information necessary to complete your income
tax returns is included with your Form 1099-DIV mailed to you in January 2010.
During the year ended December 31, 2009, 100% of the distributions paid by the
SunAmerica Municipal Money Market Fund are exempt from federal income taxes.
38
[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 Officer benefits you and other information of
shareholders. Unless the shareholders of the Fund.
Investment Adviser Funds receive Distribution of this
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
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.
39
[GRAPHIC]
Go Paperless!!
Did you know that you have the option to
receive your shareholder reports online?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
It's Quick -- Fund documents will be received faster than via traditional mail.
It's Convenient -- Elimination of bulky documents from personal files.
It's Cost Effective -- Reduction of your Fund's printing and mailing costs.
To sign up for electronic delivery, follow
these simple steps:
1
Go to
www.sunamericafunds.com
2
Click on the "Go Paperless" link.
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.sunamericafunds.com at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
For information on receiving this report online, see inside back cover.
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 - 12/09
[LOGO]
AIG
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 ended 2009, 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:
2008 2009
------- -------
(a) Audit Fees.......................................... $56,066 $55,527
(b) Audit-Related Fees.................................. $ 0 $ 0
(c) Tax Fees............................................ $22,291 $22,032
(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:
2008 2009
---- ----
(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 2009 and 2008 were
$330,007 and $636,356 respectively.
(h) Non-audit services rendered to the registrant's investment adviser and any
Adviser Affiliates 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 10, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
------------------------------
John T. Genoy
President
Date: March 10, 2010
By: /s/ Donna M. Handel
------------------------------
Donna M. Handel
Treasurer
Date: March 10, 2010