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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.
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(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
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(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, 2010
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Item 1. Reports to Stockholders
[PHOTO]
ANNUAL REPORT 2010
SUNAMERICA
Money Market Funds
[LOGO]
DECEMBER 31, 2010 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........................... 19
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 27
APPROVAL OF ADVISORY AGREEMENT.......................... 28
DIRECTORS AND OFFICERS INFORMATION...................... 33
SHAREHOLDER TAX INFORMATION............................. 36
DECEMBER 31, 2010 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 for the 12
months ended December 31, 2010 -- a period wherein mixed economic conditions,
Federal Reserve Board ("Fed") policy and government regulation initiatives had
great effect on the money markets. Yields in both the taxable and tax-exempt
money markets remained low throughout the period.
Over the course of the annual period, the Fed met several times and left the
targeted Federal Funds rate unchanged at a range of 0.00% - 0.25%. The Fed
cited risks to economic growth and noted late in the year that the economic
recovery was taking hold but not at a pace yet significant enough to
meaningfully impact the labor market. Weakness in the housing market also
continued to impact household wealth and consumer spending. Monthly house price
index releases showed year-over-year improvement during most of 2010 before
falling again in October and November. Still, the U.S. economy expanded in
2010, with Gross Domestic Product (GDP) recording an average growth rate of
2.67% for the first three quarters of the year and an estimated 2.8% during the
fourth quarter.1 Unemployment declined during the first half of the year, as
the rate fell from 9.9% to 9.5% mid-year before fluctuating within that range
during the second half of the year. The pace of job losses, as measured by the
seasonally-adjusted nonfarm payrolls economic indicator, reversed during the
first half of the year, as five of the first six months showed additions to
payrolls, followed by job losses in the third quarter and net gains in the
fourth quarter. For the year, approximately 1.1 million jobs were created
compared to a loss of over 4 million in 2009.
Yields on U.S. Treasuries rallied lower during the second and third quarters of
the year due primarily to fears surrounding the debt sustainability of European
peripheral nations. These concerns came into sharp focus as the deteriorating
Greek sovereign debt crisis began to undermine confidence in the bonds of other
European Union (EU) countries as well as in the European banks that held
government debt. As the negative headlines intensified, there was extraordinary
intervention in the form of a joint aid package from the EU and the
International Monetary Fund (IMF). Such aid was intended to both stabilize
Greece and restore confidence in debt of the weaker Eurozone members,
preventing a run on the debt of those countries. The signal by the EU that it
would not allow a sovereign debt default was enough to temper the crisis there
temporarily, although concern over the debt of Portugal, Spain and Ireland
persisted, with the latter requiring its own bailout near year end. In
response, the U.S. equity market fell, U.S. Treasury bonds rallied and LIBOR/2/
rates rose from spring into summer before reversing course.
In the U.S., the notable federal intervention into the economy and the
financial markets during the year was a second round of quantitative easing,
dubbed QE2, whereby the Fed initiated a program to purchase up to $600 billion
of long-term U.S. Treasury securities from November 2010 through mid-2011. As
Fed members were consistently focused on inflation, one of the goals of QE2 was
to alleviate the fear of a potential deflationary spiral. Together, discussion
and implementation of the QE2 program, increased confidence in the Eurozone
area due to government intervention there, and an improving U.S. economy
diminished investors appetite for U.S. Treasuries and brought down LIBOR rates
during the last months of the annual period. The U.S. equity market began to
rise in late August after the first mention of QE2, and the rally continued
through year end as investor appetite for risk increased. Additionally, money
market yields remained at relatively low levels, due to the Fed Funds rate
remaining unchanged at 0.00 - 0.25%.
Another major factor that impacted the money markets during the annual period
was the adoption of amendments to Rule 2a-7 under the Investment Company Act of
1940. These amendments, which were adopted by the Securities and Exchange
Commission (SEC), are designed to strengthen the regulatory requirements
governing
1
DECEMBER 31, 2010 ANNUAL REPORT
SHAREHOLDERS' LETTER -- (unaudited) (continued)
money market funds and better protect investors. They are also intended to
increase the resilience of money market funds to economic stresses. In
particular, the Rule 2a-7 amendments include, among other things, provisions
designed to improve credit quality and liquidity, shorten maturity limits and
modify reporting requirements of money market funds.
On the following pages, you will find a brief discussion from the portfolio
managers of the SunAmerica Money Market Fund and SunAmerica Municipal Money
Market Fund regarding the Funds' annual results and highlighting key strategies
pursued. You will also find the financial statements and portfolio information
for each of the Funds for the annual period ended December 31, 2010.
Though the money markets have posed challenges, we remain diligent in the
management of your assets. We value your ongoing confidence in us and look
forward to serving your investment needs in the future. As always, if you have
any questions, or require additional information on these or other SunAmerica
Mutual Funds, you may contact your financial advisor or visit us at
www.sunamericafunds.com.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
President & CEO
SunAmerica Asset Management Corp.
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Past performance is no guarantee of future results.
/1/Source: Bureau of Economic Analysis, February 2011.
/2/LIBOR, or the London interbank offered rates, are floating interest rates
that are widely used as reference rates in bank, corporate and government
lending agreements.
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.
2
SUNAMERICA MONEY MARKET FUND
ANDREW DOULOS, PORTFOLIO MANAGER
SUNAMERICA ASSET MANAGEMENT CORP.
The SunAmerica Money Market Fund (Class A) returned 0.01% for the annual
period ended December 31, 2010, as compared with the three-month T-Bill*, which
returned 0.13% for the same period.
Fund performance was affected most by historically low interest rates that
persisted throughout 2010. Yields on money market securities decreased steadily
throughout the annual period, with one-month certificates of deposit (CDs)
yielding approximately 0.20% at year end, down from roughly 0.28% at the start
of the year.
While money market yields were low throughout the annual period, the Fund's
investment strategy helped it provide current income while meeting its two
primary objectives -- liquidity and capital preservation. We were able to
navigate interest rate risk by adjusting the Fund's weighted average maturity+
as market conditions shifted. We were able to mitigate potential credit risk by
buying high quality, creditworthy names, which helped buoy the Fund's
performance.
More specifically, given the low yield environment that existed throughout
the year, we employed a barbell investment strategy, with greater weightings in
fixed-rate securities at the short-term end of the yield curve and in
longer-dated floating-rate securities. This strategy enabled us to provide a
cushion of liquidity in the near term, i.e. one to seven days, and to garner
the relatively higher yield available from investments with longer-dated
maturities, i.e. more than 30 days. Such a barbell strategy was also employed
during the annual period as the new SEC rule changes for money markets funds
imposed new, enhanced liquidity requirements mandating that money market funds
maintain substantial portions of their portfolios in cash and securities that
can readily be converted into cash.
Throughout the annual period, the Fund maintained a weighted average
maturity below the new 60 day maximum mandated by the SEC. Indeed, the Fund's
weighted average maturity was managed to achieve a range between 40 to 50 days
for most of the annual period. In the last months of the annual period, we did
lengthen the Fund's weighted average maturity by approximately five days by
adding longer maturity yet still highly liquid Treasury bill securities to the
portfolio in an effort to add yield to the Fund while maintaining the quality
of the portfolio as well as in anticipation of seasonally-typical year-end cash
flow turnover. As of December 31, 2010, the Fund's weighted average maturity
stood at approximately 46 days.
Throughout the annual period, the Fund was focused primarily on investments
in government agency securities and U.S. Treasury securities, with lesser
allocations to shorter-term repurchase agreements, commercial paper and
certificates of deposit.
--------
Past performance is no guarantee of future results.
*As measured by the Citigroup 3-Month Treasury Bill Index, an unmanaged index
that tracks short-term U.S. government debt instruments. Indices are not
managed and an investor cannot invest directly into an index.
+Weighted average maturity is the average time it takes for securities in a
portfolio to mature, weighted in proportion to the dollar amount that is
invested in the portfolio. The weighted average maturity of a money market fund
is a measure of its price sensitivity to changes in interest rates.
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.
Securities listed may or may not be a part of current portfolio construction.
3
SUNAMERICA MUNICIPAL MONEY MARKET FUND
PETER STEVENSON, PORTFOLIO MANAGER
AIG ASSET MANAGEMENT
The SunAmerica Municipal Money Market Fund (Class A) returned 0.03% for the
annual period ended December 31, 2010.
During the first quarter of the annual period, the Fund had the majority of
its assets invested in variable rate demand notes (VRDNs), whose rates reset
either daily or weekly. The Fund was diversified among securities in various
sectors issued in various states. The Fund's weighted average maturity*
finished the quarter at approximately eight days, with no extensions made
during the quarter, as our view was that variable rate resets would close any
gap with note rates. During the second quarter, we modestly extended the Fund's
weighted average maturity, purchasing a revenue note with a maturity in August
2010. The Fund's weighted average maturity at the end of the second quarter had
subsequently declined -- modestly -- to approximately seven days. Also in the
second quarter, the mix of exposure to sectors shifted slightly compared to the
prior quarter, with housing, water and sewer revenue, and transportation
credits comprising the top three sectors.
By the close of the third quarter, the Fund's weighted average maturity had
lengthened to 19 days due primarily to the purchase in August of two note
positions, each maturing in August 2011 -- one issued by the State of Texas and
the other by the State of Michigan Finance Authority. Exposure shifted within
the Fund's top three sectors such that transportation credits accounted for the
largest allocation followed by housing and then water and sewer revenue. At the
end of the fourth quarter, the two note positions purchased in the third
quarter remained the securities with the longest maturities in the Fund's
portfolio. The Fund held more than 30% of its net assets in daily reset VRDNs,
which have a daily put** feature and, therefore, daily liquidity, but that
typically reset at a slightly lower rate than do weekly reset securities.
Variable rate yields, as measured by the SIFMA Municipal Swap Index+, rose
during the first quarter from a low of 0.15% to 0.29% in March before remaining
in a range bound between 0.24% and 0.32% until year end, when a high of 0.34%
was reached. The average for the year was approximately 0.27%. The relationship
between the levels of VRDNs and longer-term fixed rate money market securities
had the greatest impact on the Fund's results during the annual period. The
Fund missed out on the performance of fixed-coupon securities with shorter
maturities early in the year when resets were low relative to fixed rates, but
recovered as variable rates rose in the second quarter and the Fund's weighted
average maturity was extended during the third quarter.
The Fund ended the year with a weighted average maturity of approximately 15
days. As of the end of the annual period, variable-rate demand note obligations
comprised more than 95% of the Fund's investments with the balance invested in
fixed rate note revenue obligations. The largest sector exposures at year end
were transportation (19%), water and sewer revenue (16%) and housing (15%). New
York (10%), Kentucky (10%) and California (9%) represented the Fund's three
largest exposures as measured by state of issuance at the end of December 2010.
--------
Past performance is no guarantee of future results.
*Weighted average maturity is the average time it takes for securities in a
portfolio to mature, weighted in proportion to the dollar amount that is
invested in the portfolio. The weighted average maturity of a money market fund
is a measure of its price sensitivity to changes in interest rates.
**A put is an option that conveys to its holder the right, but not the
obligation, to sell an issue of bonds before maturity by forcing the issuer to
buy at par, or at an amount equivalent to its original issue value.
+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.
Securities listed may or may not be a part of current portfolio construction.
4
SUNAMERICA MONEY MARKET FUNDS, INC.
EXPENSE EXAMPLE -- December 31, 2010
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, 2010 and held until December 31,
2010.
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, 2010" 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, 2010"
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, 2010" 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, 2010" 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, 2010"
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, 2010" 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, 2010" 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, 2010 -- (CONTINUED)
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, 2010 AT DECEMBER 31, 2010 DECEMBER 31, 2010* AT JULY 1, 2010 AT DECEMBER 31, 2010 DECEMBER 31, 2010*
----- --------------- -------------------- ------------------ --------------- -------------------- ------------------
Money Market
Class A..... $1,000.00 $1,000.05 $1.26 $1,000.00 $1,023.95 $1.28
Class I..... $1,000.00 $1,000.05 $1.21 $1,000.00 $1,024.00 $1.22
Municipal
Money Market
Class A..... $1,000.00 $1,000.26 $1.56 $1,000.00 $1,023.64 $1.58
EXPENSE
RATIO AS OF
FUND# DECEMBER 31, 2010*
----- ------------------
Money Market
Class A..... 0.25%
Class I..... 0.24%
Municipal
Money Market
Class A..... 0.31%
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* 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/reimbursed a portion of or all of the fees/expenses and assumed a
portion of or all expenses for the Funds. As a result, if these fees and
expenses had not been waived/reimbursed, the "Actual/Hypothetical Ending
Account Value" would have been lower and the "Actual/Hypothetical Expenses
Paid During the Six Months Ended December 31, 2010" and the "Expense Ratios"
would have been higher.
6
SUNAMERICA MONEY MARKET FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES -- DECEMBER 31, 2010
MONEY MARKET MUNICIPAL MONEY
FUND MARKET FUND
------------ ---------------
ASSETS:
Investments at value* (unaffiliated)............................... $655,604,310 $82,167,830
Repurchase agreements (cost approximates value).................... 79,398,000 --
------------ -----------
Total investments................................................ $735,002,310 $82,167,830
------------ -----------
Cash............................................................... 949 243,913
Receivable for:
Fund shares sold................................................. 189,586 --
Dividends and interest........................................... 163,072 64,742
Prepaid expenses and other assets.................................. 8,422 1,588
Due from investment adviser for expense reimbursements/fee waivers. 356,899 35,890
Due from distributor for fee waivers............................... 88,271 9,910
------------ -----------
Total assets..................................................... 735,809,509 82,523,873
------------ -----------
LIABILITIES:
Payable for:
Fund shares redeemed............................................. 408,161 --
Investment advisory and management fees.......................... 296,144 23,122
Distribution and service maintenance fees........................ 88,272 9,912
Transfer agent fees and expenses................................. 150,648 17,819
Dividends payable................................................ 18,198 2,040
Directors' fees and expenses..................................... 29,901 2,668
Other accrued expenses............................................. 172,113 61,072
------------ -----------
Total liabilities................................................ 1,163,437 116,633
------------ -----------
Net Assets...................................................... $734,646,072 $82,407,240
============ ===========
NET ASSETS REPRESENTED BY:
Common stock, $.001 par value (10 billion shares authorized)....... $ 735,810 $ 82,424
Paid-in capital.................................................... 735,149,628 82,350,957
------------ -----------
735,885,438 82,433,381
Accumulated undistributed net investment income (loss)............. (28,259) (1,648)
Accumulated realized gain (loss) on investments.................... (1,211,107) (24,493)
------------ -----------
Net assets...................................................... $734,646,072 $82,407,240
============ ===========
CLASS A:
Net assets......................................................... $719,671,080 $82,407,240
Shares outstanding................................................. 720,831,566 82,423,576
Net asset value and redemption price per share
(excluding any applicable contingent deferred sales charge)....... $ 1.00 $ 1.00
============ ===========
CLASS I:
Net assets......................................................... $ 14,974,992 $ --
Shares outstanding................................................. 14,978,732 --
Net asset value and redemption price per share..................... $ 1.00 $ --
============ ===========
*Amortized cost of investment securities (unaffiliated)............ $655,604,310 $82,167,830
============ ===========
See Notes to Financial Statements
7
SUNAMERICA MONEY MARKET FUNDS, INC.
STATEMENT OF OPERATIONS -- FOR THE YEAR ENDED DECEMBER 31, 2010
MONEY MARKET MUNICIPAL MONEY
FUND MARKET FUND
------------ ---------------
INVESTMENT INCOME:
Interest (unaffiliated)................................................................ $ 2,212,411 $ 262,351
Dividends (unaffiliated)............................................................... 20 --
----------- ---------
Total investment income............................................................. 2,212,431 262,351
----------- ---------
EXPENSES:
Investment advisory and management fees................................................ 3,618,071 306,617
Distribution and service maintenance fees
Class A.............................................................................. 1,080,790 131,407
Transfer agent fees and expenses
Class A.............................................................................. 1,645,431 194,881
Class I.............................................................................. 40,503 --
Registration fees......................................................................
Class A.............................................................................. 25,008 13,576
Class I.............................................................................. 1,640 --
Custodian and accounting fees.......................................................... 119,019 26,915
Reports to shareholders................................................................ 150,923 13,331
Audit and tax fees..................................................................... 38,939 37,338
Legal fees............................................................................. 16,682 10,478
Directors' fees and expenses........................................................... 97,685 6,085
Other expenses......................................................................... 19,574 11,105
----------- ---------
Total expenses before fee waivers, expense reimbursements and custody credits....... 6,854,265 751,733
Fees waived and expenses reimbursed by investment adviser and distributor (Note 3).. (4,715,690) (498,039)
Custody credits earned on cash balances............................................. (241) (105)
----------- ---------
Net expenses........................................................................ 2,138,334 253,589
----------- ---------
Net investment income (loss)........................................................... 74,097 8,762
----------- ---------
Net realized gain (loss) on investments............................................. 7,317 9
Net increase from payment by affiliate (Note 3)..................................... 1,050,000 --
----------- ---------
Net realized gain (loss) on investments................................................ 1,057,317 9
----------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 1,131,414 $ 8,771
=========== =========
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,
2010 2009
------------ --------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ 74,097 $ 1,270,232
Net realized gain (loss) on investments................................................ 1,057,317 2,653,431
------------ --------------
Net increase (decrease) in net assets resulting from operations.......................... $ 1,131,414 $ 3,923,663
------------ --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (72,203) (1,229,487)
Net investment income (Class B)+....................................................... -- (2,328)
Net investment income (Class C)+....................................................... -- (4,524)
Net investment income (Class I)........................................................ (1,684) (33,086)
------------ --------------
Total distributions to shareholders...................................................... (73,887) (1,269,425)
------------ --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 5). (41,636,074) (303,962,472)
------------ --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. (40,578,547) (301,308,234)
------------ --------------
NET ASSETS:
Beginning of period...................................................................... 775,224,619 1,076,532,853
------------ --------------
End of period*........................................................................... $734,646,072 $ 775,224,619
============ ==============
*Includes accumulated undistributed net investment income (loss)......................... $ (28,259) $ 141,661
============ ==============
MUNICIPAL MONEY
MARKET FUND
--------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2010 2009
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ 8,762 $ 33,173
Net realized gain (loss) on investments................................................ 9 8
------------ ------------
Net increase (decrease) in net assets resulting from operations.......................... $ 8,771 $ 33,181
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (25,869) (33,173)
Net investment income (Class B)+....................................................... -- --
Net investment income (Class C)+....................................................... -- --
Net investment income (Class I)........................................................ -- --
------------ ------------
Total distributions to shareholders...................................................... (25,869) (33,173)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 5). (28,106,880) (77,551,485)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. (28,123,978) (77,551,477)
------------ ------------
NET ASSETS:
Beginning of period...................................................................... 110,531,218 188,082,695
------------ ------------
End of period*........................................................................... $ 82,407,240 $110,531,218
============ ============
*Includes accumulated undistributed net investment income (loss)......................... $ (1,648) $ 15,459
============ ============
--------
+ 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
-------
12/31/06 $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)
12/31/10 1.00 0.00 (0.00) 1.00 0.01(6) 719,671 0.29(3) 0.01(3)
CLASS I
-------
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)
12/31/10 1.00 0.00 (0.00) 1.00 0.01(6) 14,975 0.29(3) 0.01(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):
12/31/06 12/31/07 12/31/08 12/31/09 12/31/10
-------- -------- -------- -------- --------
Class A............. -- % -- % -- % 0.21% 0.64%
Class I............. 0.05 0.04 0.18 0.34 0.51
(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.
(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)
(6) The Fund's performance figure was increased by less than 0.01% from the
effect of payments by an affiliate (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
-------
12/31/06 $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)
12/31/10 1.00 0.00 (0.00) 1.00 0.03 82,407 0.29(3) 0.01(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):
12/31/06 12/31/07 12/31/08 12/31/09 12/31/10
-------- -------- -------- -------- --------
Class A............. -- % 0.01% 0.01% 0.32% 0.57%
See Notes to Financial Statements
11
SUNAMERICA MONEY MARKET FUND
PORTFOLIO PROFILE -- DECEMBER 31, 2010 -- (UNAUDITED)
INDUSTRY ALLOCATION*
U.S. Government Agencies.......... 40.4%
Foreign Banks..................... 17.8
Repurchase Agreement.............. 10.8
U.S. Government Treasuries........ 10.0
Money Center Banks................ 5.9
Diversified Financial Services.... 5.8
Commercial Banks-Canadian......... 3.8
Super-Regional Banks-US........... 2.6
Commercial Banks.................. 1.7
Finance........................... 1.2
-----
100.0%
=====
Weighted average days to maturity. 46.0
CREDIT QUALITY ALLOCATION @#
A-1.......................... 99.8%
Not Rated+................... 0.2
-----
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 the rating is
unavailable form the data source.
12
SUNAMERICA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2010
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
SHORT-TERM INVESTMENT SECURITIES -- 89.2%
CERTIFICATES OF DEPOSIT -- 24.2%
Barclays Bank PLC
0.20% due 01/04/11................ $15,050,000 $ 15,050,000
Barclays Bank PLC
0.28% due 02/08/11................ 6,350,000 6,350,000
BNP Paribas
0.26% due 01/18/11................ 13,500,000 13,500,000
Deutsche Bank AG
0.26% due 01/20/11................ 11,900,000 11,900,000
Deutsche Bank AG
0.27% due 02/16/11................ 13,500,000 13,500,000
Nordea Bank Finland PLC
0.25% due 01/06/11................ 12,700,000 12,700,000
Nordea Bank Finland PLC
0.25% due 02/14/11................ 12,740,000 12,740,000
Rabobank Nederland NV FRS
0.26% due 02/09/11................ 12,760,000 12,760,000
Rabobank Nederland NV
0.34% due 03/16/11................ 13,000,000 13,000,266
Royal Bank of Canada FRS
0.26% due 01/21/11................ 2,550,000 2,550,041
Royal Bank of Canada FRS
0.26% due 03/23/11................ 12,300,000 12,300,000
Royal Bank of Canada FRS
0.36% due 09/14/11................ 12,800,000 12,800,000
Svenska Handelsbanken
0.26% due 01/07/11................ 12,700,000 12,700,000
Svenska Handelsbanken
0.27% due 02/22/11................ 13,000,000 13,000,000
UBS AG
0.22% due 01/10/11................ 12,800,000 12,800,000
------------
TOTAL CERTIFICATES OF DEPOSIT
(amortized cost $177,650,307).... 177,650,307
------------
COMMERCIAL PAPER -- 11.1%
Bank of America Corp.
0.25% due 01/05/11................ 7,800,000 7,799,783
Barclays US Funding LLC
0.23% due 01/10/11................ 6,350,000 6,349,635
BNP Paribas Finance, Inc.
0.21% due 01/05/11................ 12,950,000 12,949,698
Citigroup Funding, Inc.
0.26% due 01/18/11................ 12,600,000 12,598,453
Citigroup Funding, Inc.
0.28% due 02/08/11................ 13,500,000 13,496,010
State Street Corp.
0.25% due 03/08/11................ 12,500,000 12,494,271
UBS Finance Delaware LLC
0.17% due 01/05/11................ 16,050,000 16,049,697
------------
TOTAL COMMERCIAL PAPER
(amortized cost $81,737,547)..... 81,737,547
------------
U.S. CORPORATE BONDS & NOTES -- 0.7%
Citibank NA
FDIC Guar. Notes
1.25% due 09/22/11................ 310,000 312,119
JPMorgan Chase & Co. FRS
FDIC Guar. Notes
0.36% due 02/23/11................ 5,000,000 5,000,000
------------
TOTAL U.S. CORPORATE BONDS & NOTES
(amortized cost $5,312,119)...... 5,312,119
------------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
MEDIUM TERM NOTES -- 2.8%
Bank of America NA FRS
0.28% due 02/24/11......................... $11,500,000 $11,500,000
General Electric Capital Corp. FRS
FDIC Guar. Notes
0.38% due 03/11/11......................... 2,550,000 2,550,722
General Electric Capital Corp.
FDIC Guar. Notes
1.63% due 01/07/11......................... 3,900,000 3,900,903
General Electric Capital Corp.
FDIC Guar. Notes
1.80% due 03/11/11......................... 2,450,000 2,457,456
-----------
TOTAL MEDIUM TERM NOTES
(amortized cost $20,409,081).............. 20,409,081
-----------
U.S. GOVERNMENT AGENCIES -- 40.4%
Agency for International Development Panama
FRS
0.68% due 05/15/15......................... 1,238,090 1,239,928
Federal Farm Credit Bank
0.23% due 08/11/11......................... 4,200,000 4,194,043
Federal Home Loan Bank
0.17% due 01/26/11......................... 12,550,000 12,548,519
0.18% due 02/24/11........................ 11,000,000 10,997,030
0.19% due 05/12/11........................ 13,000,000 12,998,980
0.20% due 01/12/11........................ 3,580,000 3,579,781
0.20% due 01/14/11........................ 4,080,000 4,079,705
0.20% due 01/21/11........................ 5,000,000 4,999,444
0.26% due 01/25/11........................ 2,000,000 2,000,074
0.27% due 09/19/11........................ 4,080,000 4,072,013
0.39% due 02/25/11........................ 4,860,000 4,857,104
0.41% due 03/17/11........................ 7,560,000 7,553,542
0.75% due 03/25/11........................ 3,000,000 3,003,798
Federal Home Loan Bank FRS
0.16% due 08/01/11......................... 10,250,000 10,248,092
0.16% due 08/01/11........................ 2,250,000 2,248,742
0.16% due 02/17/12........................ 7,600,000 7,595,555
0.17% due 08/12/11........................ 15,300,000 15,294,334
0.21% due 09/15/11........................ 3,750,000 3,749,164
0.21% due 09/23/11........................ 16,000,000 15,998,850
0.30% due 12/15/11........................ 12,770,000 12,770,000
0.40% due 11/25/11........................ 12,600,000 12,600,000
0.40% due 11/28/11........................ 12,600,000 12,600,000
Federal Home Loan Mtg. Corp.
0.16% due 02/24/11......................... 5,000,000 4,998,838
0.17% due 01/10/11........................ 10,590,000 10,589,563
0.17% due 01/24/11........................ 5,000,000 4,999,457
0.18% due 01/07/11........................ 10,000,000 9,999,700
0.19% due 04/01/11........................ 9,500,000 9,495,487
0.19% due 04/18/11........................ 5,300,000 5,297,007
0.20% due 05/24/11........................ 2,750,000 2,747,793
0.20% due 06/21/11........................ 5,300,000 5,294,965
0.20% due 06/22/11........................ 2,750,000 2,747,372
0.22% due 01/11/11........................ 7,070,000 7,069,568
0.24% due 08/03/11........................ 3,580,000 3,574,893
0.25% due 06/01/11........................ 3,650,000 3,646,173
Federal Home Loan Mtg. Corp. FRS
0.15% due 02/01/11......................... 1,000,000 999,960
0.27% due 01/14/11........................ 840,000 840,026
0.34% due 01/28/11........................ 520,000 520,057
0.34% due 04/07/11........................ 13,500,000 13,499,645
13
SUNAMERICA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2010 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
SHORT-TERM INVESTMENT SECURITIES (CONTINUED)
U.S. GOVERNMENT AGENCIES (CONTINUED)
Federal National Mtg. Assoc.
0.18% due 01/12/11............... $ 7,350,000 $ 7,349,596
0.18% due 02/14/11.............. 6,750,000 6,748,515
0.18% due 02/15/11.............. 10,000,000 9,997,750
0.20% due 01/19/11.............. 9,700,000 9,699,030
0.28% due 03/01/11.............. 7,460,000 7,456,577
------------
TOTAL U.S. GOVERNMENT AGENCIES
(amortized cost $296,800,670)... 296,800,670
------------
U.S. GOVERNMENT TREASURIES -- 10.0%
United States Treasury Bills
0.17% due 04/21/11............... 11,160,000 11,154,203
0.19% due 03/10/11.............. 9,800,000 9,796,575
0.19% due 03/17/11.............. 11,500,000 11,495,448
0.20% due 06/30/11.............. 12,950,000 12,937,374
0.20% due 07/28/11.............. 5,500,000 5,493,587
0.21% due 06/02/11.............. 7,500,000 7,493,350
0.23% due 09/22/11.............. 10,350,000 10,332,922
0.24% due 09/22/11.............. 5,000,000 4,991,127
------------
TOTAL U.S. GOVERNMENT TREASURIES
(amortized cost $73,694,586).... 73,694,586
------------
TOTAL SHORT-TERM INVESTMENT SECURITIES -- 89.2%
(amortized cost $655,604,310)... 655,604,310
------------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
REPURCHASE AGREEMENTS(1) -- 10.8%
State Street Bank & Trust Co.,
Joint Repurchase Agreement........... $ 3,087,000 $ 3,087,000
UBS Securities LLC
Joint Repurchase Agreement........... 76,311,000 76,311,000
------------
TOTAL REPURCHASE AGREEMENTS
(amortized cost $79,398,000)........ 79,398,000
------------
TOTAL INVESTMENTS --
(amortized cost $735,002,310)(2).... 100.0% 735,002,310
LIABILITIES IN EXCESS OF OTHER ASSETS. 0.0 (356,238)
----------- ------------
NET ASSETS............................ 100.0% $734,646,072
=========== ============
--------
(1) See Note 2 for details of Joint Repurchase Agreements.
(2) See Note 4 for cost of investments on a tax basis.
FDIC --Federal Deposit Insurance Corp.
FRS --Floating Rate Security
The rates shown on FRS are the current interest rates at December 31, 2010.
The dates shown on debt obligations are the original maturity dates.
The following is a summary of the inputs used to value the Fund's net assets as
of December 31, 2010 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
ASSETS:
Short-Term Investment Securities:
Certificates of Deposit......... $-- $177,650,307 $-- $177,650,307
Commercial Paper................ -- 81,737,547 -- 81,737,547
U.S. Corporate Bonds & Notes.... -- 5,312,119 -- 5,312,119
Medium Term Notes............... -- 20,409,081 -- 20,409,081
U.S. Government Agencies........ -- 296,800,670 -- 296,800,670
U.S. Government Treasuries...... -- 73,694,586 -- 73,694,586
Repurchase Agreement.............. -- 79,398,000 -- 79,398,000
--- ------------ --- ------------
TOTAL............................. $-- $735,002,310 $-- $735,002,310
=== ============ === ============
14
SUNAMERICA MUNICIPAL MONEY MARKET FUND
PORTFOLIO PROFILE -- DECEMBER 31, 2010 -- (UNAUDITED)
ALLOCATION BY STATES*
New York.......................... 10.3%
Kentucky.......................... 10.0
California........................ 9.3
Illinois.......................... 8.2
Massachusetts..................... 7.3
New Jersey........................ 6.8
Michigan.......................... 5.4
Oklahoma.......................... 4.8
Louisiana......................... 4.6
Ohio.............................. 4.6
Texas............................. 4.1
North Carolina.................... 2.7
Alaska............................ 2.4
South Dakota...................... 2.1
Maine............................. 2.1
Colorado.......................... 2.0
Florida........................... 1.9
Virginia.......................... 1.9
Utah.............................. 1.9
Arizona........................... 1.6
Pennsylvania...................... 1.6
Wyoming........................... 1.3
North Dakota...................... 1.2
Iowa.............................. 0.9
Connecticut....................... 0.4
Maryland.......................... 0.1
Registered Investment Company..... 0.1
Wisconsin......................... 0.1
----
99.7%
====
Weighted average days to maturity. 15.2
CREDIT QUALITY ALLOCATION@#
A-1......................... 71.5%
SP-1........................ 4.6
Not Rated+.................. 23.9
-----
100.0%
=====
--------
* Calculated as a percentage of net assets.
@ Source: Standard and Poor's
# Calculated as percentage of total debt issues
+ Represent debt issues that either have no rating, or the rating is
unavailable from the data source.
15
SUNAMERICA MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- December 31, 2010 -- (continued)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
SHORT-TERM INVESTMENT SECURITIES -- 99.7%
ALASKA -- 2.4%
Alaska State International Airports VRDN
Series A
(LOC- State Street Bank and Trust Co.)
0.32% due 10/01/30+.............................. $2,000,000 $2,000,000
----------
ARIZONA -- 1.6%
Maricopa County, Arizona Industrial Development
Authority Multi Family Housing VRDN
Series A
(LOC-Wells Fargo Bank N.A.)
0.50% due 12/01/39+.............................. 1,350,000 1,350,000
----------
CALIFORNIA -- 9.3%
Big Bear Lake, California Industrial VRDN
Series A
(LOC--KBC Bank N.V.)
0.33% due 12/01/28+.............................. 2,000,000 2,000,000
Metropolitan Water District of Southern
California VRDN
Series B-3
(LOC--BNP Paribas)
0.25% due 07/01/35+.............................. 1,900,000 1,900,000
Metropolitan Water District of Southern
California VRDN
Series C-1
(LOC--Lloyds TSB Bank PLC)
0.29% due 07/01/36+.............................. 1,200,000 1,200,000
Sacramento County, California Santa Anna
District Authority VRDN
Series D
(LOC--Bank of America N.A.)
0.28% due 12/01/39+.............................. 2,300,000 2,300,000
San Jose, California Redevelopment Agency VRDN
Series B
(LOC--JP Morgan Chase Bank)
0.37% due 08/01/32+.............................. 250,000 250,000
----------
7,650,000
----------
COLORADO -- 2.0%
Colorado Housing & Finance Authority VRDN
Series I
0.35% due 10/01/35+.............................. 335,000 335,000
Colorado Housing & Finance Authority VRDN
Series I-B2
0.34% due 04/01/38+.............................. 1,305,000 1,305,000
----------
1,640,000
----------
CONNECTICUT -- 0.4%
Connecticut State Housing Finance Authority VRDN
Series A-1
0.28% due 05/15/39+.............................. 350,000 350,000
----------
FLORIDA -- 1.9%
Collier County, Florida Health Facilities
Authority VRDN
(LOC--Wells Fargo N.A.)
0.33% due 12/01/24+.............................. 350,000 350,000
Liberty County, Florida Industrial
Development VRDN
(LOC--Bank of America N.A.)
0.41% due 10/01/28+.............................. 1,250,000 1,250,000
----------
1,600,000
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------------
ILLINOIS -- 8.2%
Chicago, Illinois O'Hare International
Airport VRDN
Series B
(LOC--Societe Generale)
0.38% due 01/01/18+............................... $ 670,000 $ 670,000
Chicago, Illinois Sales Tax VRDN
0.28% due 01/01/34+............................... 1,800,000 1,800,000
Illinois Finance Authority VRDN
Series E
0.41% due 11/15/37+............................... 695,000 695,000
Jackson-Union Counties, Illinois Regional
Port District VRDN
(LOC--Wachovia Bank N.A.)
0.38% due 04/01/24+............................... 3,550,000 3,550,000
----------
6,715,000
----------
IOWA -- 0.9%
Iowa Finance Authority Health Facilities VRDN
Series E
(LOC--Bank of America )
0.36% due 07/01/39+............................... 700,000 700,000
----------
KENTUCKY -- 10.0%
Breckinridge County, Kentucky Lease
Program VRDN
(LOC--U.S. Bank N.A.)
0.38% due 12/01/29+............................... 1,080,000 1,080,000
Breckinridge County, Kentucky Lease
Program VRDN
Series A
(LOC--U.S. Bank N.A.)
0.38% due 02/01/31+............................... 1,415,000 1,415,000
Kentucky Housing Corp. VRDN
Series F
0.33% due 07/01/29+............................... 1,090,000 1,090,000
Kentucky Housing Corp. VRDN
Series I
0.35% due 01/01/32+............................... 995,000 995,000
Louisville & Jefferson County Kentucky Visitors &
Convention Commission VRDN
Series B
0.30% due 12/01/22+............................... 3,125,000 3,125,000
Trimble County Assoc. of Counties Leasing Trust
Lease Program VRDN
Series A
(LOC-U.S. Bank N.A.)
0.28% due 12/01/38+............................... 500,000 500,000
----------
8,205,000
----------
LOUISIANA -- 4.6%
East Baton Rouge Parish, Louisiana
Pollution Control VRDN
0.22% due 11/01/19+............................... 1,310,000 1,310,000
East Baton Rouge Parish, Louisana
Pollution Control VRDN
0.23% due 03/01/22+............................... 2,500,000 2,500,000
----------
3,810,000
----------
MAINE -- 2.1%
Maine State Housing Authority Mortgage VRDN
Series B-3
0.35% due 11/15/38+............................... 1,690,000 1,690,000
----------
16
SUNAMERICA MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- December 31, 2010 -- (continued)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
SHORT-TERM INVESTMENT SECURITIES (CONTINUED)
MARYLAND -- 0.1%
Maryland State Health & Higher Education
Facilities VRDN
Series B
0.35% due 12/01/15+...................... $ 100,000 $ 100,000
----------
MASSACHUSETTS -- 7.3%
Massachusetts State VRDN
Series B
0.28% due 12/01/30+...................... 435,000 435,000
Massachusetts State VRDN
Series B
0.34% due 03/01/26+...................... 2,350,000 2,350,000
Massachusetts State Development
Finance Agency VRDN
Series U-A6
(LOC-Bank of America N.A.)
0.30% due 10/01/42+...................... 280,000 280,000
Massachusetts State Water Resources
Authority VRDN
Series C
0.33% due 11/01/26+...................... 2,935,000 2,935,000
----------
6,000,000
----------
MICHIGAN -- 5.4%
Holt, Michigan Public Schools VRDN
0.35% due 05/01/30+...................... 3,220,000 3,220,000
Michigan Finance Authority
Series D-3
(LOC-Scotiabank)
2.00% due 08/22/11....................... 1,250,000 1,262,729
----------
4,482,729
----------
NEW JERSEY -- 6.8%
New Jersey Economic Development
Authority VRDN
Series V-2
(LOC-Dexia Credit Local)
0.39% due 03/01/24+...................... 2,000,000 2,000,000
New Jersey State Housing & Mortgage
Finance Agency VRDN
Series A
0.32% due 05/01/28+...................... 385,000 385,000
New Jersey State Turnpike Authority VRDN
Series D
(LOC-Scotiabank)
0.27% due 01/01/24+...................... 3,250,000 3,250,000
----------
5,635,000
----------
NEW YORK -- 10.3%
City of New York, New York VRDN
Series E-4
(LOC-BNP Paribas)
0.25% due 08/01/21+...................... 100,000 100,000
City of New York, New York VRDN
Series E-5
(LOC-JP Morgan Chase Bank)
0.27% due 08/01/19+...................... 1,050,000 1,050,000
City of New York, New York VRDN
Series H-3
0.31% due 08/01/23+...................... 400,000 400,000
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
NEW YORK (CONTINUED)
Metropolitan Transportation Authority VRDN
Series D-1
0.37% due 11/01/29+.............................. $1,700,000 $1,700,000
New York City Municipal Water
Finance Authority & Sewer System VRDN
Series B-2
0.26% due 06/15/24+.............................. 900,000 900,000
New York City Municipal Water Finance
Authority & Sewer System VRDN
Series B-4
0.29% due 06/15/23+.............................. 1,675,000 1,675,000
New York City Municipal Water Finance
Authority & Sewer System VRDN
Series CC-1
0.27% due 06/15/38+.............................. 700,000 700,000
New York City Transitional Finance
Authority VRDN
Series 2-E
0.43% due 11/01/22+.............................. 285,000 285,000
New York City Transitional Finance
Authority VRDN
Series 3-C
0.43% due 11/01/22+.............................. 660,000 660,000
New York City Transitional Finance
Authority VRDN
Series 3-D
0.43% due 11/01/22+.............................. 855,000 855,000
Triborough Bridge & Tunnel Authority VRDN
Series AB
0.32% due 01/01/19+.............................. 130,000 130,000
----------
8,455,000
----------
NORTH CAROLINA -- 2.7%
City of Winston-Salem, North Carolina VRDN
Series C
0.33% due 08/01/11+.............................. 1,400,000 1,400,000
Wilmington, North Carolina VRDN
0.33% due 06/01/15+.............................. 855,000 855,000
----------
2,255,000
----------
NORTH DAKOTA -- 1.2%
North Dakota State Housing Finance
Agency VRDN
Series B
0.34% due 07/01/34+.............................. 1,000,000 1,000,000
----------
OHIO -- 4.6%
Ohio Housing Finance Agency Multi Family
Housing VRDN
(LOC-Federal Home Loan Bank)
0.34% due 10/01/36+.............................. 890,000 890,000
Ohio State Water Development Authority Pollution
Control Facilities VRDN
Series A
(LOC-Barclays Bank PLC)
0.29% due 05/15/19+.............................. 2,900,000 2,900,000
----------
3,790,000
----------
17
SUNAMERICA MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2010 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
SHORT-TERM INVESTMENT SECURITIES (CONTINUED)
OKLAHOMA -- 4.8%
Oklahoma State Turnpike Authority VRDN
Series B
0.29% due 01/01/28+............................ $3,960,000 $3,960,000
----------
PENNSYLVANIA -- 1.6%
Pittsburgh, Pennsylvania Water & Sewer
Authority VRDN
Series B-1
0.35% due 09/01/33+............................ 1,300,000 1,300,000
----------
SOUTH DAKOTA -- 2.1%
South Dakota Housing Development
Authority VRDN
Series C-1
0.33% due 05/01/32+............................ 1,700,000 1,700,000
----------
TEXAS -- 4.1%
Texas State Economic Development VRDN
Series A-2
0.31% due 12/01/29+............................ 850,000 850,000
Texas State Economic Development
2.00% due 08/31/11............................. 2,500,000 2,527,250
----------
3,377,250
----------
UTAH -- 1.9%
Utah Housing Corp. Single Family Mortgage VRDN
Series A
0.34% due 07/01/36+............................ 1,545,000 1,545,000
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
VIRGINIA -- 1.9%
Peninsula Ports Authority Coal Terminal VRDN
Series C
(LOC-U.S.Bank N.A.)
0.33% due 07/01/16+.......................... $1,600,000 $ 1,600,000
-----------
WISCONSIN -- 0.1%
Wisconsin Housing & Economic
Development Authority VRDN
Series C
0.40% due 03/01/34+.......................... 75,000 75,000
-----------
WYOMING -- 1.3%
Sweetwater County, Wyoming Pollution
Control VRDN
Series A
(LOC-Barclays Bank PLC)
0.28% due 07/01/15+.......................... 1,100,000 1,100,000
-----------
REGISTERED INVESTMENT COMPANY -- 0.1%
SSGA Tax Free Money Market Fund
(amortized cost $82,851)..................... 82,851 82,851
-----------
TOTAL INVESTMENTS --
(amortized cost $82,167,830) (1).............. 99.7% 82,167,830
OTHER ASSETS LESS LIABILITIES................... 0.3 239,410
---------- -----------
NET ASSETS...................................... 100.0% $82,407,240
========== ===========
--------
+ The security's effective maturity date is less than a year.
(1) At December 31, 2010, the cost of securities for federal income tax
purposes was the same for book purposes.
LOC --Letter of Credit
VRDN --Variable Rate Demand Notes
The rates shown on VRDN are the current interest rates at December 31, 2010.
The dates shown on debt obligations are the original maturity dates.
The following is a summary of the inputs used to value the Fund's net assets as
of December 31, 2010 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFCANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- ------------------- -----------
ASSETS:
Short-Term Investment Securities:
California...................... $-- $ 7,650,000 $-- $ 7,650,000
Illinois........................ -- 6,715,000 -- 6,715,000
Kentucky........................ -- 8,205,000 -- 8,205,000
Massachusetts................... -- 6,000,000 -- 6,000,000
Michigan........................ -- 4,482,729 -- 4,482,729
New Jersey...................... -- 5,635,000 -- 5,635,000
New York........................ -- 8,455,000 -- 8,455,000
Other States*................... -- 34,942,250 -- 34,942,250
Registered Investment Companies... -- 82,851 -- 82,851
--- ----------- --- -----------
TOTAL............................. $-- $82,167,830 $-- $82,167,830
=== =========== === ===========
--------
* Sum of all other states each of which individually has an aggregate market
value of less than 5% of net assets. For a detailed presentation of
securities by state, please refer to the Portfolio of Investments.
See Notes to Financial Statements
18
SUNAMERICA MONEY MARKET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- December 31, 2010
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
by investing 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
by investing primarily in high-quality money market instruments selected
primarily on the basis of quality and yield, 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.
19
SUNAMERICA MONEY MARKET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2010 -- (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 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
Funds' 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.
Securities for which market quotations are not readily available or if a
development/significant event occurs that may significantly impact the value
of the security, then these securities are valued, as determined pursuant to
procedures adopted in good faith by the Board. There is no single standard
for making fair value determinations, which may result in market prices that
vary from those of other funds.
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 indicies, quoted prices in
inactive markets, adjusted quoted prices in active markets,
adjusted quoted prices on foreign equity securities that
were adjusted in accordance with pricing procedures
approved by the Board, 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, 2010 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 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.
20
SUNAMERICA MONEY MARKET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2010 -- (CONTINUED)
As of December 31, 2010, the following portfolios held an undivided interest
in the joint repurchase agreement with State Street Bank & Trust Co.:
PERCENTAGE PRINCIPAL
FUND OWNERSHIP AMOUNT
---- ---------- ----------
Money Market Fund............. 1.22% $3,087,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
State Street Bank & Trust Co., dated December 31, 2010, bearing interest at
a rate of 0.01% per annum, with a principal amount of $254,037,000, a
repurchase price of $254,037,212, and a maturity date of January 3, 2011.
The repurchase agreement is collateralized by the following:
INTEREST
TYPE OF COLLATERAL RATE MATURITY DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ------------- ---------------- ------------
U.S. Treasury Notes 2.13% 5/31/2015 $254,790,000 $259,121,430
As of December 31, 2010, the following portfolios held an undivided interest
in the joint repurchase agreement with UBS Securities LLC:
PERCENTAGE PRINCIPAL
FUND INTEREST AMOUNT
---- ---------- -----------
Money Market Fund............. 66.36% $76,311,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Securities LLC, dated December 31, 2010, bearing interest at a rate of
0.20% per annum, with a principal amount of $115,000,000, a repurchase price
of $115,001,917, and a maturity date of January 3, 2011. The repurchase
agreement is collateralized by the following:
INTEREST
TYPE OF COLLATERAL RATE MATURITY DATE PRINCIPAL AMOUNT VALUE
------------------ -------- ------------- ---------------- ------------
U.S. Treasury Inflation Index
Notes....................... 2.38% 4/15/2011 $104,966,500 $117,300,064
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 collection 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
21
SUNAMERICA MONEY MARKET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2010 -- (CONTINUED)
accounting principles. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital
accounts at fiscal year end based on their federal tax-basis treatment;
temporary differences do not require reclassification. Net investment income
(loss), net realized gain (loss), and net assets are not affected by these
reclassifications.
Each Fund intends to comply with the requirements of the Internal Revenue
Code 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 2007.
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
FUND ASSETS FEES
---- ----------------------------- ----------
Money Market.................. $0 - $600 million 0.50%
next $900 million 0.45%
(greater than) $ 1.5 billion 0.40%
Municipal Money Market........ (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. For purposes of
the waived fee and/or reimbursed expense calculations, 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
Disinterested Directors.
FUND PERCENTAGE
---- ----------
Money Market Class I.............................. 0.80%
Municipal Money Market Class A.................... 0.95
22
SUNAMERICA MONEY MARKET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2010 -- (CONTINUED)
For the period ended December 31, 2010, pursuant to the contractual expense
limitations in the above table, SunAmerica waived fees and/or reimbursed
expenses as follows:
FUND
----
Money Market Class I........................................ $1,150
Municipal Money Market Class A.............................. --
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.
For the period ended December 31, 2010, SunAmerica voluntarily waived fees
and/or reimbursed expenses as follows:
FUND
----
Money Market Class A........................................ $3,547,672
Money Market Class I........................................ 86,078
Municipal Money Market Class A.............................. 366,632
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 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, 2010, SACS voluntarily waived fees as
follows:
FUND
----
Money Market Class A.............................. $1,080,790
Municipal Money Market Class A.................... 131,407
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, 2010, the
proceeds received from redemptions are as follows:
CONTINGENT DEFERRED SALES CHARGES
---------------------------------
FUND CLASS A
---- ---------------------------------
Money Market....................... $182
Municipal Money Market............. --
23
SUNAMERICA MONEY MARKET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2010 -- (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, 2010, the Funds incurred the following expenses which are
included in the 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
FUND EXPENSES DECEMBER 31, 2010
---- ---------- -----------------
Money Market Class A............... $1,574,975 $129,465
Money Market Class I............... 37,009 2,860
Municipal Money Market Class A..... 192,601 14,534
As of December 31, 2010, 83% 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 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 $1,050,000 and
$2,295,500, for the years ended December 31, 2010 and December 31, 2009,
respectively.
On September 22, 2008, the ultimate parent of SunAmerica, SACS, SAFS and
AMG, entered into a revolving credit facility ("FRBNY Credit Facility") with
the Federal Reserve Bank of New York ("NY Fed"). In connection with the
FRBNY Credit Facility, on March 4, 2009, AIG issued its Series C Perpetual,
Convertible, Participating Preferred Stock (the "Series C Preferred Stock")
to the AIG Credit Facility Trust, a trust established for the sole benefit
of the United States Treasury (the "Trust"). The Series C Preferred Stock
was entitled to approximately 77.8% of the voting power of AIG's outstanding
stock.
On January 14, 2011, AIG completed a series of previously announced
integrated transactions (the "Recapitalization") to recapitalize AIG. In the
Recapitalization, AIG repaid the NY Fed approximately $21 billion in cash,
representing all amounts owing under the FRBNY Credit Facility and the
facility was terminated. Also as part of the Recapitalization, (i) the
Series C Preferred Stock was exchanged for shares of AIG Common Stock, which
was then transferred to the U.S. Department of the Treasury, and the Trust,
which had previously held all shares of the Series C Preferred Stock, was
terminated, and, (ii) AIG's Series E Preferred Shares and Series F Preferred
Shares were exchanged for shares of AIG Common Stock and a new Series G
Preferred Shares (which functions as a $2 billion commitment to provide
funding that AIG will have the discretion and option to use). As a result of
the Recapitalization, the United States Treasury held a majority of
outstanding shares of AIG Common Stock.
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, 2010
-------------------------------------------------------------------
LONG-TERM
GAINS/CAPITAL UNREALIZED LONG-TERM
ORDINARY AND OTHER APPRECIATION ORDINARY CAPITAL
FUND INCOME LOSSES (DEPRECIATION) INCOME GAINS TAX EXEMPT
---- -------- ------------- -------------- -------- --------- ----------
Money Market....................... $ -- $(1,211,006) $ -- $73,887 $ -- $ --
Municipal Money Market............. 186* (24,493) -- -- -- 25,869
-
* Tax Exempt distributable earnings
24
SUNAMERICA MONEY MARKET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2010 -- (CONTINUED)
TAX DISTRIBUTIONS
------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 2009
------------------------------------
LONG-TERM
ORDINARY CAPITAL
FUND INCOME GAINS TAX EXEMPT
---- ---------- --------- ----------
Money Market.................. $1,269,425 $ -- $ --
Municipal Money Market........ -- -- 33,173
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated, as of December 31, 2010,
which are available to offset future capital gains, if any:
FUND CAPITAL LOSS CARRYFORWARD
---- ---------------------------------------------
2012 2013 2014 2015 2016 2017 2018
------ ------- ---- ---- ---------- ---- ----
Money Market.................. $ -- $ -- $ -- $ -- $1,211,006 $ -- $ --
Municipal Money Market........ 8,053 16,252 -- -- 188 -- --
Under the current law, capital losses related to securities and foreign
currency realized after October 31 and prior to the Fund's fiscal year end
may be deferred and treated as arising on the first day of the following
year. For the fiscal year ended December 31, 2010, the Money Market Fund
elected to defer post October capital losses in the amount of $101.
For the year ended December 31, 2010, the reclassifications arising from
book/tax differences resulted in increases (decreases) that were primarily
due to treatment of distribution reclasses to the components of net assets
as follows:
ACCUMULATED ACCUMULATED
UNDISTRIBUTED UNDISTRIBUTED
NET INVESTMENT NET REALIZED CAPITAL
FUND INCOME (LOSS) GAIN (LOSS) PAID-IN
---- -------------- ------------- --------
Money Market.................. $(170,130) $-- $170,130
Municipal Money Market........ -- -- --
Note 5. Capital Share Transactions
Transactions in each class of shares of the Funds, all at $1.00 per share,
for the year ended December 31, 2010 and for the prior year were as follows:
MONEY MARKET FUND
---------------------------------------------------------------------------------------
CLASS A CLASS B(2) CLASS C(2)
---------------------------- ------------------------- -------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR YEAR YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED JANUARY 1 TO ENDED JANUARY 1 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 3, DECEMBER 31, JUNE 3,
2010 2009 2010 2009 2010 2009
------------- ------------- ------------ ------------ ------------ ------------
Shares sold........... $ 433,199,045 $ 373,006,486(1) $ -- $ 5,107,861 $ -- $ 15,016,720
Shares issued and
redeemed in
conversion(2)........ -- 53,035,799 -- (18,382,384) -- (34,653,415)
Reinvested dividends.. 69,808 1,220,038 -- 2,027 -- 4,274
Shares redeemed....... (475,207,558) (664,975,046) -- (9,881,430)(1) -- (21,065,068)
------------- ------------- ----------- ------------ ----------- ------------
Net increase
(decrease)........... $ (41,938,705) $(237,712,723) $ -- $(23,153,926) $ -- $(40,697,489)
============= ============= =========== ============ =========== ============
MONEY MARKET FUND
--------------------------
CLASS I
--------------------------
FOR THE FOR THE
YEAR YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2010 2009
------------ ------------
Shares sold........... $ 18,197,271 $ 11,621,049
Reinvested dividends.. 1,650 33,086
Shares redeemed....... (17,896,290) (14,052,469)
------------ ------------
Net increase
(decrease)........... $ 302,631 $ (2,398,334)
============ ============
25
SUNAMERICA MONEY MARKET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31, 2010 -- (CONTINUED)
MUNICIPAL MONEY MARKET FUND
----------------------------
CLASS A
----------------------------
FOR THE FOR THE
YEAR YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2010 2009
------------- -------------
Shares sold........... $ 140,417,935 $ 123,834,392
Reinvested dividends.. 25,847 33,134
Shares redeemed....... (168,550,662) (201,419,011)
------------- -------------
Net increase
(decrease)........... $ (28,106,880) $ (77,551,485)
============= =============
--------
(1)Includes automatic conversion of Class B shares in the amount of $1,832,886
to Class A shares.
(2)See Note 1
Note 6. Directors' Retirement Plan
The Directors of the SunAmerica Money Market Funds, Inc. have adopted the
SunAmerica Disinterested Trustees' and Directors' Retirement Plan (the
"Retirement Plan") effective January 1, 1993, as amended for the Independent
Directors. The Retirement Plan provides generally that an Independent
Director may become a participant ("Participant") in the Retirement Plan if
he or she has at least 10 years of consecutive service as a Disinterested
Director of any of the adopting SunAmerica mutual funds (the "Adopting
Funds") or has attained the age of 60 while a Director and completed five
(5) consecutive years of service as a Director of any Adopting Fund (an
"Eligible Director"). Pursuant to the Retirement Plan, an Eligible Director
may receive benefits upon (i) his or her death or disability while a
Director or (ii) the termination of his or her tenure as a Director, other
than removal for cause from each of the Adopting Funds with respect to which
he or she is an Eligible Director.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Director and Participant, each Eligible Director
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Director of each
Adopting Fund for the calendar year in which such birthday occurs. In
addition, an amount equal to 8.50% of any amounts credited under the
preceding 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) permit 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, 2010
---- -----------------------------------------------
Money Market.................. $28,249 $2,817 $7,341
Municipal Money Market........ 1,836 487 300
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 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, 2010,
the Funds did not participate in the program.
26
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, 2010, 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, 2010 by correspondence with the
custodian and brokers, and the application of alternative auditing procedures
where securities purchased had not been received, provide a reasonable basis
for our opinion.
PricewaterhouseCoopers LLP
Houston, Texas
February 25, 2011
27
SUNAMERICA MONEY MARKET FUNDS, INC.
APPROVAL OF ADVISORY AGREEMENT -- DECEMBER 31, 2010 -- (UNAUDITED)
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND SUBADVISORY
AGREEMENT
The Board of Directors (the "Board," the members of which are referred to as
"Directors") of the Corporation, including the Directors who are not
"interested persons," as defined in Section 2(a)(19) of the 1940 Act, of the
Corporation or its separate series (each a "Fund" and collectively, the
"Funds"), SunAmerica or AIG (the "Disinterested Directors"), approved the
continuation of the Advisory Agreement between the Corporation, on behalf of
the Funds, and SunAmerica (the "Advisory Agreement") for a one-year period
ending August 31, 2011 at an in-person meeting held on August 24, 2010 (the
"Meeting"). The Corporation currently consists of two separate Funds, including
the Money Market Fund and Municipal Money Market Fund. At the Meeting, the
Board also approved the continuation of the Subadvisory Agreement between
SunAmerica and AMG (the "Subadvisory Agreement") with respect to the Municipal
Money Market Fund for a one-year period ending August 31, 2011./1/
In accordance with Section 15(c) of the 1940 Act, the Board requested and
SunAmerica and AMG, 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 to the Funds by SunAmerica and its affiliates; (b)
information independently compiled and prepared by Lipper, Inc. ("Lipper") on
fees and expenses of the Funds, and the investment performance of the Fund as
compared with a peer group of funds; (c) information on the profitability of
SunAmerica, and its affiliates, and a discussion relating to indirect benefits;
(d) a report on economies of scale; (e) information on SunAmerica's and AMG's
risk management process; (f) a discussion on general compliance policies and
procedures; (g) a summary of brokerage and soft dollar practices; (h) a
discussion of the key personnel of SunAmerica, and its affiliates, and AMG,
that are involved in the investment management, administration, compliance and
risk management activities with respect to the Funds, as well as current and
projected staffing levels and compensation practices; and (i) an internal
comparison of management fees received for other mutual funds and accounts with
similar investment objectives and strategies for which SunAmerica serves 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 AMG. The
Board, including the Disinterested Directors, considered the nature, quality
and extent of services to be provided by SunAmerica and AMG. 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, bookkeeping, 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 AMG. 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 in
addition to current and projected staffing levels and compensation practices
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
--------
/1/ Effective December 31, 2009, AIG Global Investment Corp. ("AIGGIC"), the
prior subadviser to the Municipal Money Market Fund, designated AMG as its
successor under the Subadvisory Agreement between AIGGIC and SunAmerica
and assigned its rights under the Subadvisory Agreement to AMG.
28
SUNAMERICA MONEY MARKET FUNDS, INC.
APPROVAL OF ADVISORY AGREEMENT -- DECEMBER 31, 2010 -- (UNAUDITED)
(CONTINUED)
carrying out its advisory and other responsibilities under the Advisory
Agreement; (iii) SunAmerica had been responsive to requests of the Board; and
(iv) SunAmerica had kept the Board apprised of developments relating to the
Funds and the industry in general. The Board concluded that the nature and
extent of services provided under the Advisory Agreement were reasonable and
appropriate in relation to the management fee and that the quality of services
continues to be high.
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, 2010,
SunAmerica managed, advised an/or administered approximately $37.5 billion in
assets. The Board also considered SunAmerica's code of ethics and its risk
management process, 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 AMG, the Board
considered the nature, quality and extent of subadvisory services provided by
AMG. The Board observed that AMG 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, subject to the oversight and review of SunAmerica. The Board reviewed
AMG'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 in addition to current and projected
staffing levels and compensation practices and concluded, based on their
experience with AMG, that: (i) AMG is able to retain high quality portfolio
managers and other investment personnel; (ii) AMG exhibited a high level of
diligence and attention to detail in carrying out its responsibilities under
the Subadvisory Agreement; and (iii) AMG had been responsive to requests of the
Board and of SunAmerica. The Board considered that AMG 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 AMG's code of ethics,
compliance and regulatory history and risk management process. The Board noted
that the AMG has not experienced any material regulatory 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 also discussed prior compliance matters
with respect to AIGGIC. The Board concluded that the nature and extent of
services to be provided by AMG 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 and AMG with respect to the
Funds, that they manage. 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 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, 2010. The Board noted that it
was also provided with a supplemental Lipper performance report for the periods
ended June 30, 2010. 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, 2010.
The Board considered that the Money Market Fund ranked in the fifth quintile of
its Peer Group for all periods ended May 31, 2010. The Board then considered
that the Municipal Money Market Fund ranked in the third quintile of its Peer
Group
29
SUNAMERICA MONEY MARKET FUNDS, INC.
APPROVAL OF ADVISORY AGREEMENT -- DECEMBER 31, 2010 -- (UNAUDITED)
(CONTINUED)
for the one-year period ended May 31, 2010, ranked in the fourth quintile for
the two-year period and ranked in the fifth quintile for the three-, four-,
five- and ten-year periods. The Board noted that it was concerned with the
performance of the Funds, although it was acknowledged that money market funds,
in general, have been operating in a difficult and low-yielding market
environment for an extended period of time. 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.
Consideration of the Management Fees and Subadvisory Fee and the Cost of the
Services and Profits to be Realized by SunAmerica and AMG 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 AMG 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, AMG 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 as determined by Lipper, including rankings within each category. 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/or 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 also considered
that the mutual funds identified as similar to the Money Market Fund are sold
only in the variable annuity market and, accordingly, are in an entirely
different Lipper classification, with a peer group consisting of funds
underlying variable insurance products. 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 AMG 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
AMG 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 did not consider services and fees
paid under the investment advisory contracts that AMG has with other registered
investment companies or other types of clients with similar investment
strategies to the Municipal Money Market Fund since AMG informed the Board that
there were no such similar funds or accounts to the Municipal Money Market Fund.
30
SUNAMERICA MONEY MARKET FUNDS, INC.
APPROVAL OF ADVISORY AGREEMENT -- DECEMBER 31, 2010 -- (UNAUDITED)
(CONTINUED)
The Board also considered SunAmerica's profitability and the benefits
SunAmerica and its affiliates received from its relationship with the Funds.
The Board received and reviewed financial statements relating to SunAmerica's
financial condition and profitability with respect to the services it provided
the Funds and considered how profit margins could affect SunAmerica's ability
to attract and retain high quality investment professionals and other key
personnel. The Board was also provided with a profitability analysis that
detailed the revenues earned and the expenses incurred by SunAmerica and its
affiliates that provide services to the Funds on a Fund by Fund basis. In
particular, the Board considered the contractual fee waiver and/or expense
reimbursements agreed to by SunAmerica, the voluntary fee waivers being made by
SunAmerica with respect to the Funds to avoid a negative yield and the
significant capital contributions made by SunAmerica to 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, AMG
and their 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 AMG, 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 AMG and its affiliates, and
considered whether AMG 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 AMG 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 also
took into account that the Money Market Fund had management fee arrangements
that included breakpoints that will adjust the fee downward as the size of the
Fund increases, thereby allowing the shareholders to potentially participate in
any economies of scale. The Board further noted that 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 AMG'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 with respect to the Funds, the Board also received information
regarding SunAmerica's and AMG's brokerage and soft dollar practices. The Board
considered that SunAmerica and AMG are responsible for decisions to buy and
sell securities for the portfolios they
31
SUNAMERICA MONEY MARKET FUNDS, INC.
APPROVAL OF ADVISORY AGREEMENT -- DECEMBER 31, 2010 -- (UNAUDITED)
(CONTINUED)
manage, selection of broker-dealers and negotiation of commission rates. The
Board also considered the benefits SunAmerica and AMG may derive from soft
dollar arrangements, including arrangements under which brokers provide
brokerage and/or research services to SunAmerica and/or AMG in return for
allocating brokerage; however, the Board noted that the securities in which the
Funds invest are traded primarily in the over-the-counter market on a "net"
basis with dealers acting as principal for their own accounts without a stated
commission (although the price of the security usually includes a profit to the
dealer) and, therefore, the Funds generally do not incur brokerage commissions.
Accordingly, the Board observed that SunAmerica and AMG 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 AMG may designate the use of
broker dealers who have agreed to provide certain statistical, research and
other information.
Conclusion. After a full and complete discussion, the Board approved the
Advisory Agreement with respect to the Funds and the Subadvisory Agreement with
respect to the Municipal Money Market Fund, each for a one-year period ending
August 31, 2011. 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.
32
SUNAMERICA MONEY MARKET FUNDS, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2010 -- (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. (real Foundation (1998 to
estate) (2000 to present)
present); Owner and
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 2010).
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 and 39 None
DOB: May 10, 1943 present Associate Broker,
Corcoran Group (Real
Estate) (2003 to
present); Managing
Member, Beau Brummell --
Soho, LLC (Licensing of
menswear specialty
retailing) (1995 to
2009); President, SJG
Marketing, Inc (2009 to
present).
William J. Shea Director 2004- Executive Chairman, 39 Chairman of the Board,
DOB: February 9, 1948 present Lucid, Inc. (medical Royal and SunAlliance
technology and U.S.A., Inc. (2004 to
information) (2007 to 2006); Director, Boston
Present); Managing Private Financial
Director, DLB Capital, Holdings (2004 to
LLC (private equity) present); Chairman,
(2006 to 2007) Demoulas 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, -- SACS (1993
to present); Chairman,
Advisor Group, Inc.
(2004 to present).
33
SUNAMERICA MONEY MARKET FUNDS, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2010 -- (UNAUDITED)
(CONTINUED)
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, SunAmerica
Legal (2005 to present).
Officer
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. Gibbons 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
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, SunAmerica
and (2005 to present).
Assistant
Secretary
Matthew J. Hackethal Anti-Money 2006- Chief Compliance Officer, N/A N/A
DOB: December 31, 1971 Laundering present SunAmerica (2006 to present);
Compliance Vice President, Credit Suisse
Officer Asset Management (2001 to
2006); Chief Compliance
Officer, Credit Suisse
Alternative Funds (2005 to
2006).
--------
* The business address for each Director and Officer is Harborside Financial
Center, 3200 Plaza 5, Jersey City, NJ 07311-4992.
34
SUNAMERICA MONEY MARKET FUNDS, INC.
DIRECTORS AND OFFICERS INFORMATION -- DECEMBER 31, 2010 -- (UNAUDITED)
(CONTINUED)
(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) and Seasons Series Trust (21
portfolios).
(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 in the 1940 Act, 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.
35
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, 2010. The information necessary to complete your income
tax returns is included with your Form 1099-DIV, which will be mailed to you in
early 2011.
During the year ended December 31, 2010, 100% of the distributions paid by the
SunAmerica Municipal Money Market Fund are exempt from federal income taxes.
36
[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. Gibbons Commission's website at Forms N-Q are available
Skrehot, Vice http://www.sec.gov. on the U.S. Securities
President and Chief and Exchange Commission's
Compliance Officer DELIVERY OF SHAREHOLDER website at
Gregory N. Bressler, DOCUMENTS http://www.sec.gov. You
Chief Legal Officer The Funds have adopted a can also review and
and Secretary policy that allows them obtain copies of the
Nori L. Gabert, Vice to send only one copy of Forms N-Q at the U.S.
President and a Fund's prospectus, Securities and Exchange
Assistant Secretary proxy material, annual Commission's Public
Kathleen Fuentes, report and semi-annual Refer-ence Room in
Assistant Secretary report (the "shareholder Washington, DC
John E. McLean, documents") to (information on the
Assistant Secretary shareholders with operation of the Public
Gregory R. Kingston, multiple accounts Reference Room may be
Vice President and residing at the same ob-tained by calling
Assistant Treasurer "household." This 1-800-SEC-0330).
Diedre L. Shepherd, practice is called
Assistant Treasurer householding and reduces This report is submitted
Matthew J. Hackethal, Fund expenses, which solely for the general
Anti-Money Laundering benefits you and other information of
Compliance Officer shareholders. Unless the shareholders of the Fund.
Funds receive Distribution of this
INVESTMENT ADVISER instructions to the report to persons other
SunAmerica Asset con-trary, you will only than shareholders of the
Management Corp. receive one copy of the Fund is authorized only
Harborside Financial shareholder documents. in connection with a
Center The Funds will continue currently effective
3200 Plaza 5 to household the prospectus, setting forth
Jersey City, NJ share-holder documents details of the Fund,
07311-4992 indefinitely, until we which must precede or
are instructed otherwise. accompany this report.
DISTRIBUTOR If you do not wish to
SunAmerica Capital participate in
Services, Inc. householding please
Harborside Financial contact Shareholder
Center Services at (800)
3200 Plaza 5 858-8850 ext. 6010 or
Jersey City, NJ send a written request
07311-4992 with your name, the name
of your fund(s) and your
SHAREHOLDER SERVICING account member(s) to
AGENT SunAmerica Mutual Funds
SunAmerica Fund c/o BFDS, P.O. Box
Services, Inc. 219186, Kansas City MO,
Harborside Financial 64121-9186. We will
Center resume individual
3200 Plaza 5 mailings for your account
Jersey City, NJ within thirty (30) days
07311-4992 of receipt of your
request.
CUSTODIAN AND TRANSFER
AGENT PROXY VOTING RECORD ON
State Street Bank and SUNAMERICA MONEY MARKET
Trust Company FUNDS
P.O. Box 419572 Information regarding how
Kansas City, MO the Funds voted proxies
64141-6572 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.
37
[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 LINK TO "GO PAPERLESS!!"
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.
This fund report must be preceded by or accompanied by a prospectus.
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 - 12/10
[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 2010, 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 Item 3(b) 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:
2009 2010
------- -------
(a) Audit Fees.......................................... $55,527 $55,527
(b) Audit-Related Fees.................................. $ 0 $ 0
(c) Tax Fees............................................ $22,032 $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:
2009 2010
---- ----
(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 2010 and 2009 were
$125,032 and $330,007 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 9, 2011
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 9, 2011
By: /s/ Donna M. Handel
------------------------------
Donna M. Handel
Treasurer
Date: March 9, 2011