UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-4708
---------------------------------------------
SunAmerica Income Funds
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management Corp.
Harborside Financial Center,
3200 Plaza 5
Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
-----------------------------
Date of fiscal year end: March 31
--------------------------
Date of reporting period: September 30, 2011
-------------------------
Item 1. Reports to Stockholders
[PHOTO]
SEMI-ANNUAL REPORT 2011
SUNAMERICA
Income Funds
[LOGO]
SEPTEMBER 30, 2011 SEMI-ANNUAL REPORT
SUNAMERICA INCOME FUNDS
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND (SGTAX)
SUNAMERICA GNMA FUND (GNMAX)
SUNAMERICA STRATEGIC BOND FUND (SDIAX)
SUNAMERICA HIGH YIELD BOND FUND (SHNAX)
TABLE OF CONTENTS
SHAREHOLDER LETTER.......................................... 2
EXPENSE EXAMPLE............................................. 4
STATEMENT OF ASSETS AND LIABILITIES......................... 6
STATEMENT OF OPERATIONS..................................... 8
STATEMENT OF CHANGES IN NET ASSETS.......................... 9
FINANCIAL HIGHLIGHTS........................................ 11
PORTFOLIO OF INVESTMENTS.................................... 15
NOTES TO FINANCIAL STATEMENTS............................... 59
APPROVAL OF ADVISORY AGREEMENTS............................. 73
SHAREHOLDER LETTER -- (UNAUDITED)
Dear Shareholders,
We are pleased to present this semi-annual update for the SunAmerica Income
Funds for the six months ended September 30, 2011 - a period wherein concerns
about slowing global economic growth, U.S. fiscal challenges and European
sovereign debt crises led to significant volatility and a flight to quality
within the fixed income market. For the semi-annual period overall, the
Barclays Capital U.S. Aggregate Bond Index*, a broad measure of the U.S. fixed
income market, returned 6.20%.
The U.S. fixed income market performed well during the first months of the
semi-annual period, supported by a softening economic picture and lower
commodity prices. In the aftermath of the Japanese earthquake and tsunami,
supply chain disruptions led to a decline in U.S. and global industrial
production and manufacturing activity. U.S. unemployment data accelerated.
Anxiety regarding European sovereign debt heightened. The yields on U.S.
Treasuries moved lower across the yield curve, or spectrum of maturities.
Remember, there is typically an inverse relationship between yields, or
interest rates, and bond prices. Non-Treasury sectors generated mixed results.
Residential mortgage-backed securities outperformed equivalent-duration U.S.
Treasuries. Emerging market debt also outpaced the U.S. Treasury market during
the second calendar quarter. On the other hand, commercial mortgage-backed
securities and corporate bonds, both investment grade and high yield,
underperformed equivalent-duration U.S. Treasuries.
During the third calendar quarter, risk appetite declined dramatically on a
global basis. Investors fled to U.S. Treasuries as they sought a safe haven
amidst increased concerns about the possibility of a Greek default and the
potential implications for the rest of Europe. Also, U.S. economic data
continued to disappoint, raising questions about the likelihood of another
recession. Surveys of manufacturing activity slowed and the jobs market was
static. Additionally, political gridlock over increasing the U.S. debt ceiling
prompted concerns about the potential for a U.S. default and the possibility of
a downgrade of the U.S.' AAA credit rating. Although U.S. policymakers
eventually reached an agreement to raise the debt ceiling, the budget cuts
agreed to were not enough to prevent Standard & Poor's from downgrading the
U.S. to AA+. The unprecedented downgrade of U.S. sovereign debt kept investors
defensive, and a sell-off in riskier sectors of the financial markets ensued.
In an effort to calm markets, the Federal Reserve Board (the "Fed") announced
in August 2011 that it would maintain short-term interest rates near zero
through at least mid-2013. It was the first time in history that the Fed had
pegged its "exceptionally low" rates to a specific date. In September, the Fed
announced a plan, popularly referred to as "Operation Twist," to purchase
longer-term U.S. Treasury securities and mortgage-backed securities and sell
shorter-term U.S. Treasury securities. Set to begin October 3, the Fed's intent
in taking this unconventional step was to lower long-term interest rates and,
in turn, to provide a catalyst for spending and investment in the U.S. economy.
Internationally, the European Central Bank announced that it would begin buying
Spanish and Italian government bonds.
By the end of the third calendar quarter, the yield on the 10-year U.S.
Treasury had fallen to 1.92%, a decline of more than 150 basis points since the
start of the semi-annual period. (A basis point is 1/100th of a percentage
point.) The major non-Treasury fixed income sectors, including residential and
commercial mortgage-backed securities and investment grade and high yield
corporate bonds, underperformed U.S. Treasuries during the third calendar
quarter. The emerging markets debt sector also lagged U.S. Treasuries in the
third calendar quarter.
Against this backdrop, the SunAmerica Income Funds that focus on U.S.
government securities and U.S. agency mortgage-backed securities-U.S.
Government Securities Fund and GNMA Fund, respectively-generated positive
absolute returns during the semi-annual period. The SunAmerica Income Funds not
focused on U.S. government-related fixed income sectors-High Yield Bond Fund
and Strategic Bond Fund-posted negative absolute returns for the same time
frame. On the following pages, you will find detailed financial statements and
portfolio information for each of the SunAmerica Income Funds.
2
We thank you for being a part of the SunAmerica Income Funds. As we continue to
actively manage 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 regarding your investments, please contact your financial adviser
or get in touch with us directly at 800-858-8850 or www.sunamericafunds.com.
Sincerely,
THE SUNAMERICA INCOME FUNDS INVESTMENT PROFESSIONALS
Michael Cheah Robert Vanden Assem Christopher Jones
--------
Past performance is no guarantee of future results.
* The Barclays Capital U.S. Aggregate Bond Index represents securities that are
SEC-registered, taxable and dollar denominated. The index covers the U.S.
investment-grade fixed-rate bond market, with index components for government
and corporate securities, mortgage pass-through securities and asset-backed
securities. Indices are not managed and an investor cannot invest directly in
an index.
3
SUNAMERICA INCOME FUNDS
EXPENSE EXAMPLE -- SEPTEMBER 30, 2011 -- (UNAUDITED)
DISCLOSURE OF PORTFOLIO EXPENSES IN SHAREHOLDER REPORTS
As a shareholder of a fund (each, a "Fund" and collectively the "Funds") in the
SunAmerica Income Funds (the "Trust"), you may incur two types of costs: (1)
transaction costs, including sales charges (loads) on purchase payments,
contingent deferred sales charges and (2) ongoing costs, including management
fees, distribution and service fees and other Fund expenses. The example set
forth below is intended to help you understand your ongoing costs (in dollars)
of investing in the Funds and to compare these costs with the ongoing costs of
investing in other mutual funds. The Example is based on an investment of
$1,000 invested at April 1, 2011 and held until September 30, 2011.
ACTUAL EXPENSES
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended September 30, 2011" to estimate the expenses you paid on your
account during this period. The "Expenses Paid During the Six Months Ended
September 30, 2011" column does not include small account fees that may be
charged if your account balance is below $500 ($250 for retirement plan
accounts). In addition, the "Expenses Paid During the Six Months Ended
September 30, 2011" column does not include administrative fees that may apply
to qualified retirement plan accounts. See the Trust's prospectus, your
retirement plan document 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 September 30, 2011" 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 these Funds and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds. The "Expenses Paid During the Six Months
Ended September 30, 2011" column does not include small account fees that may
be charged if your account balance is below $500 ($250 for retirement plan
accounts). In addition, the "Expenses Paid During the Six Months Ended
September 30, 2011" column does not include administrative fees that may apply
to qualified retirement plan accounts. See the Fund's prospectus, your
retirement plan document 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 September 30, 2011" column would have been
higher and the "Ending Account Value" would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, small account
fees and administrative fees, if applicable to your account. Please refer to
the Fund's prospectus, your retirement plan document and/or material 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.
4
SUNAMERICA INCOME FUNDS
EXPENSE EXAMPLE -- SEPTEMBER 30, 2011 -- (UNAUDITED) (CONTINUED)
ACTUAL HYPOTHETICAL
------------------------------------------ ------------------------------------------
ENDING ACCOUNT
ENDING ACCOUNT EXPENSES PAID VALUE USING EXPENSES PAID
VALUE USING DURING THE A HYPOTHETICAL DURING THE EXPENSE
BEGINNING ACTUAL SIX MONTHS BEGINNING 5% ASSUMED SIX MONTHS RATIO
ACCOUNT VALUE RETURN AT ENDED ACCOUNT VALUE RETURN AT ENDED AS OF
AT APRIL 1, SEPTEMBER 30, SEPTEMBER 30, AT APRIL 1, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
FUND 2011 2011 2011 2011 2011 2011* 2011
---- ------------- -------------- ------------- ------------- -------------- ------------- -------------
U.S. GOVERNMENT SECURITIES
Class A#................. $1,000.00 $1,085.63 $5.16 $1,000.00 $1,020.05 $ 5.00 0.99%
Class B#................. $1,000.00 $1,083.19 $8.54 $1,000.00 $1,016.80 $ 8.27 1.64%
Class C#................. $1,000.00 $1,083.27 $8.54 $1,000.00 $1,016.80 $ 8.27 1.64%
GNMA
Class A#................. $1,000.00 $1,055.21 $5.09 $1,000.00 $1,020.05 $ 5.00 0.99%
Class B#................. $1,000.00 $1,051.69 $8.41 $1,000.00 $1,016.80 $ 8.27 1.64%
Class C#................. $1,000.00 $1,051.65 $8.41 $1,000.00 $1,016.80 $ 8.27 1.64%
STRATEGIC BOND
Class A.................. $1,000.00 $ 980.74 $6.49 $1,000.00 $1,018.45 $ 6.61 1.31%
Class B.................. $1,000.00 $ 977.42 $9.84 $1,000.00 $1,015.05 $10.02 1.99%
Class C.................. $1,000.00 $ 974.87 $9.73 $1,000.00 $1,015.15 $ 9.92 1.97%
HIGH YIELD BOND
Class A#................. $1,000.00 $ 944.50 $6.61 $1,000.00 $1,018.20 $ 6.86 1.36%
Class B#................. $1,000.00 $ 941.67 $9.76 $1,000.00 $1,014.95 $10.13 2.01%
Class C#................. $1,000.00 $ 939.25 $9.74 $1,000.00 $1,014.95 $10.13 2.01%
--------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183 days divided by 366
days. These ratios do not reflect transaction costs, including sales charges
on purchase payments, contingent deferred sales charges, small account fees
and administrative fees, if applicable to your account. Please refer to your
prospectus, your retirement plan documents and/or materials from your
financial adviser for more information.
# During the stated period, the investment adviser either waived a portion of
or all fees and assumed a portion of or all expenses for the Funds. As a
result, if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended September 30,
2011" and the "Expenses Ratios" would have been higher.
5
SUNAMERICA INCOME FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- SEPTEMBER 30, 2011 -- (UNAUDITED)
STRATEGIC HIGH YIELD
U.S. GOVERNMENT GNMA BOND BOND
SECURITIES FUND FUND FUND FUND
--------------- ------------ ------------ ------------
ASSETS:
Investments at value (unaffiliated)*.... $150,895,655 $322,677,659 $531,638,865 $106,814,291
Repurchase agreements (cost
approximates value).................... 1,060,000 3,276,000 10,213,000 1,295,000
------------ ------------ ------------ ------------
Total investments...................... 151,955,655 325,953,659 541,851,865 108,109,291
------------ ------------ ------------ ------------
Cash.................................... 574 194 84,878 27,447
Foreign cash*........................... -- -- 1,222,465 --
Receivable for:
Shares of beneficial interest sold..... 153,392 9,380,221 1,465,828 128,649
Dividends and interest................. 584,399 1,093,481 8,576,794 2,295,892
Investments sold....................... -- -- 9,070,766 580,903
Prepaid expenses and other assets....... 1,986 1,984 2,255 1,984
Due from investment adviser for expense
reimbursements/fee waivers............. 49,460 40,997 -- 19,661
------------ ------------ ------------ ------------
Total assets............................ 152,745,466 336,470,536 562,274,851 111,163,827
------------ ------------ ------------ ------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed. 51,178 206,111 827,988 404,406
Investments purchased.................. -- -- 5,863,138 589,462
Investment advisory and management fees 80,628 124,812 292,276 69,484
Distribution and service maintenance
fees................................. 53,779 136,932 321,438 58,083
Transfer agent fees and expenses....... 35,955 74,853 113,700 29,342
Trustees' fees and expenses............ 13,495 8,378 8,914 6,059
Other accrued expenses................. 80,873 92,473 176,193 157,580
Dividends payable...................... 22,252 117,593 778,143 208,837
------------ ------------ ------------ ------------
Total liabilities....................... 338,160 761,152 8,381,790 1,523,253
------------ ------------ ------------ ------------
NET ASSETS.............................. $152,407,306 $335,709,384 $553,893,061 $109,640,574
============ ============ ============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01.... $ 149,228 $ 278,889 $ 1,671,495 $ 341,924
Paid-in capital......................... 139,401,085 312,624,626 642,347,288 181,273,656
------------ ------------ ------------ ------------
139,550,313 312,903,515 644,018,783 181,615,580
Accumulated undistributed net
investment income (loss)............... 455,859 (985,986) (189,082) 66,581
Accumulated undistributed net realized
gain (loss) on investments, futures
contracts, options contracts,
securities sold short and foreign
exchange transactions.................. 265,571 12,023,132 (67,609,731) (55,896,109)
Unrealized appreciation (depreciation)
on investments......................... 12,135,563 11,768,723 (22,161,371) (16,145,478)
Unrealized appreciation (depreciation)
on foreign exchange transactions....... -- -- (165,538) --
------------ ------------ ------------ ------------
NET ASSETS.............................. $152,407,306 $335,709,384 $553,893,061 $109,640,574
============ ============ ============ ============
*Cost
Investments (unaffiliated)............. $138,760,092 $310,908,936 $553,800,236 $122,959,769
============ ============ ============ ============
Foreign cash........................... $ -- $ -- $ 1,345,302 $ --
============ ============ ============ ============
See Notes to Financial Statements
6
SUNAMERICA INCOME FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- SEPTEMBER 30, 2011 --
(UNAUDITED) (CONTINUED)
STRATEGIC HIGH YIELD
U.S. GOVERNMENT GNMA BOND BOND
SECURITIES FUND FUND FUND FUND
--------------- ------------ ------------ -----------
CLASS A (UNLIMITED SHARES AUTHORIZED):
Net assets.............................. $132,536,094 $256,645,421 $261,109,230 $62,899,293
Shares of beneficial interest issued
and outstanding........................ 12,976,353 21,339,245 78,930,029 19,655,453
Net asset value and redemption price
per share (excluding any applicable
contingent deferred sales charge)...... $ 10.21 $ 12.03 $ 3.31 $ 3.20
Maximum sales charge (4.75% of offering
price)................................. $ 0.51 $ 0.60 $ 0.17 $ 0.16
------------ ------------ ------------ -----------
Maximum offering price to public........ $ 10.72 $ 12.63 $ 3.48 $ 3.36
============ ============ ============ ===========
CLASS B (UNLIMITED SHARES AUTHORIZED):
Net assets.............................. $ 4,976,538 $ 15,810,249 $ 49,542,899 $12,633,319
Shares of beneficial interest issued
and outstanding........................ 487,073 1,311,022 14,979,583 3,940,881
Net asset value, offering and
redemption price per share (excluding
any applicable contingent deferred
sales charge).......................... $ 10.22 $ 12.06 $ 3.31 $ 3.21
============ ============ ============ ===========
CLASS C (UNLIMITED SHARES AUTHORIZED):
Net assets.............................. $ 14,894,674 $ 63,253,714 $243,240,932 $34,107,962
Shares of beneficial interest issued
and outstanding........................ 1,459,356 5,238,601 73,239,844 10,596,116
Net asset value, offering and
redemption price per share (excluding
any applicable contingent deferred
sales charge).......................... $ 10.21 $ 12.07 $ 3.32 $ 3.22
============ ============ ============ ===========
See Notes to Financial Statements
7
SUNAMERICA INCOME FUNDS
STATEMENT OF OPERATIONS -- FOR THE PERIOD ENDED SEPTEMBER 30, 2011 --
(UNAUDITED)
STRATEGIC HIGH YIELD
U.S. GOVERNMENT GNMA BOND BOND
SECURITIES FUND FUND FUND FUND
--------------- ----------- ------------ ------------
INVESTMENT INCOME:
Dividends (unaffiliated)................ $ -- $ -- $ 229,129 $ 121,751
Interest (unaffiliated)................. 2,191,179 5,269,305 17,974,110 5,994,565
----------- ----------- ------------ ------------
Total investment income*.............. 2,191,179 5,269,305 18,203,239 6,116,316
----------- ----------- ------------ ------------
EXPENSES:
Investment advisory and management fees. 516,154 756,995 1,796,167 478,631
Distribution and service maintenance
fees:
Class A............................... 245,214 437,109 467,197 130,813
Class B............................... 26,109 85,316 258,588 72,273
Class C............................... 67,362 306,348 1,254,343 192,149
Transfer agent fees and expenses:
Class A............................... 167,817 286,712 305,826 90,008
Class B............................... 7,309 21,298 60,531 17,754
Class C............................... 16,454 71,136 283,102 44,776
Registration fees:
Class A............................... 13,337 9,378 12,297 15,856
Class B............................... 6,135 7,532 8,788 7,423
Class C............................... 7,367 10,241 18,565 11,011
Custodian and accounting fees........... 39,335 70,692 133,233 31,249
Reports to shareholders................. 15,781 15,660 54,002 12,142
Audit and tax fees...................... 21,890 21,473 24,746 27,502
Legal fees.............................. 3,278 5,968 11,868 19,036
Directors' fees and expenses............ 8,957 17,596 29,540 7,211
Interest expense........................ -- 1,215 2,269 --
Other expenses.......................... 8,545 11,027 13,920 8,199
----------- ----------- ------------ ------------
Total expenses before fee waivers,
expense reimbursements, expense
recoupments and custody credits...... 1,171,044 2,135,696 4,734,982 1,166,033
Net (fees waived and expenses
reimbursed)/ recouped by investment
advisor (Note 3)..................... (324,141) (256,520) -- (126,219)
Custody credits earned on cash
balances............................. (5) (454) (72) (24)
----------- ----------- ------------ ------------
Net expenses.......................... 846,898 1,878,722 4,734,910 1,039,790
----------- ----------- ------------ ------------
Net investment income (loss)............. 1,344,281 3,390,583 13,468,329 5,076,526
----------- ----------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments
(unaffiliated).......................... 3,046,141 15,958,378 5,095,762 (1,002,229)
Net realized foreign exchange gain
(loss) on other assets and liabilities.. -- -- 808,121 --
Net realized gain (loss) on disposal of
investments in violation of investment
restrictions (Note 3)................... 29,856 -- -- --
----------- ----------- ------------ ------------
Net realized gain (loss) on investments
and foreign currencies.................. 3,075,997 15,958,378 5,903,883 (1,002,229)
----------- ----------- ------------ ------------
Change in unrealized appreciation
(depreciation) on investments
(unaffiliated).......................... 8,663,146 (1,929,544) (32,291,305) (11,076,367)
Change in unrealized foreign exchange
gain (loss) on other assets and
liabilities............................. -- -- (214,195) --
----------- ----------- ------------ ------------
Net unrealized gain (loss) on
investments and foreign currencies...... 8,663,146 (1,929,544) (32,505,500) (11,076,367)
----------- ----------- ------------ ------------
Net realized and unrealized gain (loss)
on investments and foreign currencies... 11,739,143 14,028,834 (26,601,617) (12,078,596)
----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............... $13,083,424 $17,419,417 $(13,133,288) $ (7,002,070)
=========== =========== ============ ============
* Net of foreign withholding taxes on
interest and dividends of............... $ -- $ -- $ 19,874 $ 1,676
=========== =========== ============ ============
See Notes to Financial Statements
8
SUNAMERICA INCOME FUNDS
STATEMENT OF CHANGES IN NET ASSETS
U.S. GOVERNMENT SECURITIES FUND
--------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE YEAR
SEPTEMBER 30, ENDED
2011 MARCH 31,
(UNAUDITED) 2011
------------- ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ 1,344,281 $ 3,099,671
Net realized gain (loss) on investments and foreign currencies......................... 3,075,997 446,807
Net unrealized gain (loss) on investments and foreign currencies....................... 8,663,146 2,243,379
------------ ------------
Net increase (decrease) in net assets resulting from operations.......................... 13,083,424 5,789,857
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (1,572,079) (2,888,602)
Net investment income (Class B)........................................................ (41,753) (85,980)
Net investment income (Class C)........................................................ (106,229) (168,004)
Net realized gain on securities (Class A).............................................. -- (2,608,061)
Net realized gain on securities (Class B).............................................. -- (124,871)
Net realized gain on securities (Class C).............................................. -- (240,562)
------------ ------------
Total distributions to shareholders...................................................... (1,720,061) (6,116,080)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 6). (21,805,895) (19,323,444)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. (10,442,532) (19,649,667)
NET ASSETS:
Beginning of period...................................................................... 162,849,838 182,499,505
------------ ------------
End of period+........................................................................... $152,407,306 $162,849,838
============ ============
--------
+ Includes accumulated undistributed net investment income (loss)........................ $ 455,859 $ 831,639
============ ============
GNMA FUND
--------------------------
FOR THE
SIX MONTHS
ENDED FOR THE YEAR
SEPTEMBER 30, ENDED
2011 MARCH 31,
(UNAUDITED) 2011
------------- ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ 3,390,583 $ 8,880,477
Net realized gain (loss) on investments and foreign currencies......................... 15,958,378 5,684,220
Net unrealized gain (loss) on investments and foreign currencies....................... (1,929,544) 1,843,772
------------ ------------
Net increase (decrease) in net assets resulting from operations.......................... 17,419,417 16,408,469
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (3,468,742) (8,232,111)
Net investment income (Class B)........................................................ (185,365) (618,229)
Net investment income (Class C)........................................................ (651,532) (1,701,181)
Net realized gain on securities (Class A).............................................. -- (7,942,239)
Net realized gain on securities (Class B).............................................. -- (708,768)
Net realized gain on securities (Class C).............................................. -- (2,088,904)
------------ ------------
Total distributions to shareholders...................................................... (4,305,639) (21,291,432)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 6). (1,808,213) (66,140,497)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. 11,305,565 (71,023,460)
NET ASSETS:
Beginning of period...................................................................... 324,403,819 395,427,279
------------ ------------
End of period+........................................................................... $335,709,384 $324,403,819
============ ============
--------
+ Includes accumulated undistributed net investment income (loss)........................ $ (985,986) $ (70,930)
============ ============
See Notes to Financial Statements
9
SUNAMERICA INCOME FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
STRATEGIC BOND FUND HIGH YIELD BOND FUND
-------------------------- --------------------------
FOR THE FOR THE
SIX MONTHS SIX MONTHS
ENDED FOR THE YEAR ENDED FOR THE YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
2011 MARCH 31, 2011 MARCH 31,
(UNAUDITED) 2011 (UNAUDITED) 2011
------------- ------------ ------------- ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........... $ 13,468,329 $ 29,300,334 $ 5,076,526 $ 9,759,703
Net realized gain (loss) on
investments and foreign currencies... 5,903,883 26,385,155 (1,002,229) 5,130,608
Net unrealized gain (loss) on
investments and foreign currencies... (32,505,500) 474,496 (11,076,367) 841,499
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations.............. (13,133,288) 56,159,985 (7,002,070) 15,731,810
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........ (6,628,219) (15,979,693) (2,420,521) (6,153,999)
Net investment income (Class B)........ (1,107,873) (2,838,945) (421,286) (1,260,941)
Net investment income (Class C)........ (5,410,343) (14,059,880) (1,119,381) (3,016,895)
Net realized gain on securities
(Class A)............................ -- -- -- --
Net realized gain on securities
(Class B)............................ -- -- -- --
Net realized gain on securities
(Class C)............................ -- -- -- --
------------ ------------ ------------ ------------
Total distributions to shareholders..... (13,146,435) (32,878,518) (3,961,188) (10,431,835)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS (NOTE 6).................. 22,415,518 (59,848,061) (10,670,900) (16,112,039)
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. (3,864,205) (36,566,594) (21,634,158) (10,812,064)
NET ASSETS:
Beginning of period..................... 557,757,266 594,323,860 131,274,732 142,086,796
------------ ------------ ------------ ------------
End of period+.......................... $553,893,061 $557,757,266 $109,640,574 $131,274,732
============ ============ ============ ============
--------
+ Includes accumulated undistributed
net investment income (loss)........... $ (189,082) $ (510,976) $ 66,581 $ (1,048,757)
============ ============ ============ ============
See Notes to Financial Statements
10
SUNAMERICA INCOME FUNDS
FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT SECURITIES FUND
-------------------------------
NET GAIN
(LOSS) ON
NET INVESTMENTS DISTRIBUTIONS NET NET
ASSET (BOTH DIVIDENDS FROM NET ASSET ASSETS, RATIO OF
VALUE, NET REALIZED TOTAL FROM FROM NET REALIZED TOTAL VALUE, END OF EXPENSES
PERIOD BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD TO AVERAGE
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENTS BUTIONS PERIOD RETURN(2) (000'S) NET ASSETS(3)
--------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
CLASS A
-------
03/31/07 $ 9.16 $0.37 $ 0.10 $ 0.47 $(0.39) $ -- $(0.39) $ 9.24 5.25% $152,239 0.99%
03/31/08 9.24 0.35 0.46 0.81 (0.37) -- (0.37) 9.68 9.03 191,057 0.99
03/31/09 9.68 0.26 0.36 0.62 (0.28) -- (0.28) 10.02 6.52 178,963 0.99
03/31/10 10.02 0.21 (0.28) (0.07) (0.21) (0.19) (0.40) 9.55 (0.75)(4) 159,028 0.99
03/31/11 9.55 0.17 0.13 0.30 (0.18) (0.16) (0.34) 9.51 3.12 143,978 0.99
09/30/11+ 9.51 0.09 0.72 0.81 (0.11) -- (0.11) 10.21 8.56(6) 132,536 0.99(5)
CLASS B
-------
03/31/07 $ 9.16 $0.32 $ 0.09 $ 0.41 $(0.33) $ -- $(0.33) $ 9.24 4.57% $ 14,716 1.64%
03/31/08 9.24 0.30 0.45 0.75 (0.31) -- (0.31) 9.68 8.33 15,354 1.64
03/31/09 9.68 0.20 0.35 0.55 (0.21) -- (0.21) 10.02 5.83 15,803 1.64
03/31/10 10.02 0.16 (0.29) (0.13) (0.14) (0.19) (0.33) 9.56 (1.29)(4) 8,578 1.64
03/31/11 9.56 0.11 0.11 0.22 (0.11) (0.16) (0.27) 9.51 2.35 5,710 1.64
09/30/11+ 9.51 0.06 0.73 0.79 (0.08) -- (0.08) 10.22 8.32(6) 4,977 1.64(5)
CLASS C
-------
03/31/07 $ 9.15 $0.31 $ 0.10 $ 0.41 $(0.33) $ -- $(0.33) $ 9.23 4.57% $ 9,881 1.64%
03/31/08 9.23 0.29 0.46 0.75 (0.31) -- (0.31) 9.67 8.34 16,997 1.64
03/31/09 9.67 0.20 0.35 0.55 (0.21) -- (0.21) 10.01 5.83 20,094 1.64
03/31/10 10.01 0.15 (0.28) (0.13) (0.14) (0.19) (0.33) 9.55 (1.30)(4) 14,894 1.64
03/31/11 9.55 0.11 0.11 0.22 (0.11) (0.16) (0.27) 9.50 2.35 13,161 1.64
09/30/11+ 9.50 0.05 0.74 0.79 (0.08) -- (0.08) 10.21 8.33(6) 14,895 1.64(5)
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS(3) TURNOVER
------------- ---------
4.05% 243%
3.83 343
2.73 84
2.17 472
1.77 254
1.77(5) 95
3.40% 243%
3.20 343
2.08 84
1.59 472
1.10 254
1.13(5) 95
3.40% 243%
3.14 343
2.05 84
1.55 472
1.12 254
1.11(5) 95
--------
+ Unaudited
(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, if applicable (based on average
net assets):
03/31/07 03/31/08 03/31/09 03/31/10 03/31/11 09/30/11(+)(5)
-------- -------- -------- -------- -------- --------------
U.S. Government Securities Fund Class A. 0.38% 0.39% 0.35% 0.38% 0.37% 0.39%
U.S. Government Securities Fund Class B. 0.43 0.48 0.40 0.50 0.53 0.65
U.S. Government Securities Fund Class C. 0.43 0.50 0.40 0.44 0.44 0.49
(4)The Fund's performance figure was increased by less than 0.01% from
reimbursements for losses realized from a violation of an investment
restriction.
(5)Annualized
(6)The Fund's performance figure was increased by less than 0.01% from gains on
the disposal of investments in violation of investment restrictions. (Note 3)
See Notes to Financial Statements
11
SUNAMERICA INCOME FUNDS
FINANCIAL HIGHLIGHTS -- (CONTINUED)
GNMA FUND
---------
NET GAIN
(LOSS) ON
NET INVESTMENTS DISTRIBUTIONS NET NET
ASSET (BOTH DIVIDENDS FROM NET ASSET ASSETS, RATIO OF
VALUE, NET REALIZED TOTAL FROM FROM NET REALIZED TOTAL VALUE, END OF EXPENSES
PERIOD BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD TO AVERAGE
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENTS BUTIONS PERIOD RETURN(2) (000'S) NET ASSETS(3)
--------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
CLASS A
-------
03/31/07 $11.00 $0.46 $0.10 $0.56 $(0.48) $ -- $(0.48) $11.08 5.23% $310,508 0.99%
03/31/08 11.08 0.46 0.48 0.94 (0.49) -- (0.49) 11.53 8.69 330,202 0.99
03/31/09 11.53 0.37 0.41 0.78 (0.42) (0.11) (0.53) 11.78 6.98 346,091 0.99
03/31/10 11.78 0.27 0.14 0.41 (0.29) (0.18) (0.47) 11.72 3.55 290,728 0.99
03/31/11 11.72 0.31 0.24 0.55 (0.36) (0.35) (0.71) 11.56 4.79 243,801 0.99
09/30/11+ 11.56 0.13 0.51 0.64 (0.17) -- (0.17) 12.03 5.52 256,645 0.99(4)
CLASS B
-------
03/31/07 $11.02 $0.39 $0.11 $0.50 $(0.41) $ -- $(0.41) $11.11 4.64% $ 57,224 1.64%
03/31/08 11.11 0.40 0.47 0.87 (0.42) -- (0.42) 11.56 7.98 46,389 1.64
03/31/09 11.56 0.31 0.40 0.71 (0.35) (0.11) (0.46) 11.81 6.28 44,467 1.64
03/31/10 11.81 0.20 0.13 0.33 (0.21) (0.18) (0.39) 11.75 2.88 31,715 1.64
03/31/11 11.75 0.23 0.25 0.48 (0.29) (0.35) (0.64) 11.59 4.11 19,293 1.64
09/30/11+ 11.59 0.10 0.50 0.60 (0.13) -- (0.13) 12.06 5.17 15,810 1.64(4)
CLASS C
-------
03/31/07 $11.04 $0.40 $0.10 $0.50 $(0.41) $ -- $(0.41) $11.13 4.64% $ 30,606 1.64%
03/31/08 11.13 0.39 0.47 0.86 (0.42) -- (0.42) 11.57 7.88 35,599 1.64
03/31/09 11.57 0.28 0.43 0.71 (0.35) (0.11) (0.46) 11.82 6.27 75,943 1.64
03/31/10 11.82 0.19 0.15 0.34 (0.21) (0.18) (0.39) 11.77 2.96 72,985 1.64
03/31/11 11.77 0.23 0.24 0.47 (0.29) (0.35) (0.64) 11.60 4.02 61,310 1.64
09/30/11+ 11.60 0.09 0.51 0.60 (0.13) -- (0.13) 12.07 5.17 63,254 1.64(4)
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS(3) TURNOVER
------------- ---------
4.19% 142%
4.15 354
3.32 73
2.28 104
2.59 148
2.22(4) 41
3.53% 142%
3.52 354
2.67 73
1.63 104
1.89 148
1.61(4) 41
3.53% 142%
3.49 354
2.55 73
1.63 104
1.94 148
1.58(4) 41
--------
+ Unaudited
(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, if applicable (based on average
net assets):
03/31/07 03/31/08 03/31/09 03/31/10 03/31/11 09/30/11+(4)
-------- -------- -------- -------- -------- ------------
GNMA Fund Class A............. 0.15% 0.15% 0.13% 0.15% 0.15% 0.15%
GNMA Fund Class B............. 0.18 0.19 0.15 0.19 0.21 0.25
GNMA Fund Class C............. 0.17 0.22 0.15 0.16 0.17 0.17
(4)Annualized
See Notes to Financial Statements
12
SUNAMERICA INCOME FUNDS
FINANCIAL HIGHLIGHTS -- (CONTINUED)
STRATEGIC BOND FUND
-------------------
NET GAIN
(LOSS) ON
NET INVESTMENTS DISTRIBUTIONS NET NET
ASSET (BOTH DIVIDENDS FROM NET ASSET ASSETS, RATIO OF
VALUE, NET REALIZED TOTAL FROM FROM NET REALIZED TOTAL VALUE, END OF EXPENSE
PERIOD BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD TO AVERAGE
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENTS BUTIONS PERIOD+ RETURN(2) (000'S) NET ASSETS
--------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------- --------- -------- ----------
CLASS A
-------
03/31/07 $3.53 $0.16 $ 0.12 $ 0.28 $(0.18) $-- $(0.18) $3.63 8.07% $453,893 1.31%(3)
03/31/08 3.63 0.19 (0.11) 0.08 (0.21) -- (0.21) 3.50 2.29 483,820 1.28(3)
03/31/09 3.50 0.21 (0.71) (0.50) (0.27) -- (0.27) 2.73 (14.67) 227,601 1.31
03/31/10 2.73 0.19 0.62 0.81 (0.21) -- (0.21) 3.33 30.31 287,960 1.29
03/31/11 3.33 0.19 0.15 0.34 (0.21) -- (0.21) 3.46 10.45 255,546 1.31
09/30/11+ 3.46 0.09 (0.15) (0.06) (0.09) -- (0.09) 3.31 (1.93) 261,109 1.31(5)
CLASS B
-------
03/31/07 $3.53 $0.15 $ 0.10 $ 0.25 $(0.15) $-- $(0.15) $3.63 7.36% $ 55,728 1.99%(3)
03/31/08 3.63 0.16 (0.10) 0.06 (0.19) -- (0.19) 3.50 1.61 52,528 1.96(3)
03/31/09 3.50 0.19 (0.71) (0.52) (0.25) -- (0.25) 2.73 (15.25) 38,281 1.99
03/31/10 2.73 0.17 0.61 0.78 (0.19) -- (0.19) 3.32 29.05 50,125 1.97
03/31/11 3.32 0.16 0.17 0.33 (0.19) -- (0.19) 3.46 10.04 52,171 1.98
09/30/11+ 3.46 0.08 (0.15) (0.07) (0.08) -- (0.08) 3.31 (2.26) 49,543 1.99(5)
CLASS C
-------
03/31/07 $3.54 $0.14 $ 0.12 $ 0.26 $(0.16) $-- $(0.16) $3.64 7.36% $217,755 1.98%(3)
03/31/08 3.64 0.17 (0.11) 0.06 (0.19) -- (0.19) 3.51 1.64 265,904 1.94(3)
03/31/09 3.51 0.19 (0.71) (0.52) (0.25) -- (0.25) 2.74 (15.16) 200,180 1.96
03/31/10 2.74 0.17 0.62 0.79 (0.19) -- (0.19) 3.34 29.39 256,239 1.94
03/31/11 3.34 0.17 0.16 0.33 (0.19) -- (0.19) 3.48 10.04 250,040 1.96
09/30/11+ 3.48 0.08 (0.16) (0.08) (0.08) -- (0.08) 3.32 (2.51) 243,241 1.97(5)
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS TURNOVER
---------- ---------
4.79%(3) 134%(4)
5.30(3) 162(4)
6.54 112
6.13 157
5.50 152
5.08(5) 66
4.12%(3) 134%(4)
4.63(3) 162(4)
6.00 112
5.44 157
4.83 152
4.40(5) 66
4.12%(3) 134%(4)
4.65(3) 162(4)
6.03 112
5.48 157
4.85 152
4.53(5) 66
--------
+ Unaudited
(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)Gross of custody credits of:
03/31/07 03/31/08
-------- --------
Strategic Bond Fund..................... 0.05% 0.02%
(4)Portfolio turnover includes "to be announced" ("TBA") transactions.
Previously, portfolio turnover was calculated excluding TBA transactions and
was as follows:
2007 2008
---- ----
Strategic Bond Fund. 131% 151%
(5)Annualized
See Notes to Financial Statements
13
SUNAMERICA INCOME FUNDS
FINANCIAL HIGHLIGHTS -- (CONTINUED)
HIGH YIELD BOND FUND
--------------------
NET GAIN
(LOSS) ON
NET INVESTMENTS DISTRIBUTIONS NET
ASSET (BOTH DIVIDENDS FROM NET ASSET NET ASSETS, RATIO OF
VALUE, NET REALIZED TOTAL FROM FROM NET REALIZED TOTAL VALUE, END OF EXPENSE
PERIOD BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD TO AVERAGE
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENT BUTIONS PERIOD RETURN(2) (000'S) NET ASSETS(3)
--------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ----------- -------------
CLASS A
-------
03/31/07 $4.60 $0.30 $ 0.19 $ 0.49 $(0.32) $-- $(0.32) $4.77 11.01% $241,554 1.36%
03/31/08 4.77 0.36 (0.63) (0.27) (0.34) -- (0.34) 4.16 (5.92) 109,219 1.36
03/31/09 4.16 0.38 (1.69) (1.31) (0.33) -- (0.33) 2.52 (32.66) 59,210 1.36
03/31/10 2.52 0.29 0.89 1.18 (0.34) -- (0.34) 3.36 48.44 79,245 1.36
03/31/11 3.36 0.25 0.16 0.41 (0.27) -- (0.27) 3.50 12.76 76,156 1.36
09/30/11+ 3.50 0.14 (0.33) (0.19) (0.11) -- (0.11) 3.20 (5.55) 62,899 1.36(4)
CLASS B
-------
03/31/07 $4.61 $0.27 $ 0.19 $ 0.46 $(0.29) $-- $(0.29) $4.78 10.29% $ 51,479 2.01%
03/31/08 4.78 0.31 (0.60) (0.29) (0.32) -- (0.32) 4.17 (6.50) 34,911 2.01
03/31/09 4.17 0.36 (1.69) (1.33) (0.31) -- (0.31) 2.53 (33.00) 17,018 2.01
03/31/10 2.53 0.27 0.89 1.16 (0.32) -- (0.32) 3.37 47.35 18,186 2.01
03/31/11 3.37 0.23 0.16 0.39 (0.25) -- (0.25) 3.51 12.02 15,818 2.01
09/30/11+ 3.51 0.13 (0.33) (0.20) (0.10) -- (0.10) 3.21 (5.83) 12,633 2.01(4)
CLASS C
-------
03/31/07 $4.63 $0.27 $ 0.19 $ 0.46 $(0.29) $-- $(0.29) $4.80 10.27% $ 86,777 2.01%
03/31/08 4.80 0.31 (0.61) (0.30) (0.32) -- (0.32) 4.18 (6.67) 61,125 2.01
03/31/09 4.18 0.36 (1.69) (1.33) (0.31) -- (0.31) 2.54 (32.90) 33,394 2.01
03/31/10 2.54 0.27 0.89 1.16 (0.32) -- (0.32) 3.38 47.21 44,656 2.01
03/31/11 3.38 0.23 0.17 0.40 (0.25) -- (0.25) 3.53 12.33 39,301 2.01
09/30/11+ 3.53 0.13 (0.34) (0.21) (0.10) -- (0.10) 3.22 (6.07) 34,108 2.01(4)
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS(3) TURNOVER
------------- ---------
6.44% 86%
7.49 72
10.74 77
9.34 110
7.47 48
8.23(4) 16
5.82% 86%
6.80 72
10.18 77
8.77 110
6.84 48
7.57(4) 16
5.80% 86%
6.75 72
10.16 77
8.70 110
6.83 48
7.56(4) 16
--------
+ Unaudited
(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, if applicable (based on average
net assets):
03/31/07 03/31/08 03/31/09 03/31/10 03/31/11 09/30/11+(4)
-------- -------- -------- -------- -------- ------------
High Yield Bond Fund Class A............ 0.09% 0.17% 0.14% 0.18% 0.16% 0.19%
High Yield Bond Fund Class B............ 0.11 0.20 0.16 0.23 0.21 0.25
High Yield Bond Fund Class C............ 0.10 0.18 0.15 0.18 0.16 0.20
(4)Annualized
See Notes to Financial Statements
14
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO PROFILE -- SEPTEMBER 30, 2011 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Government National Mtg. Assoc.. 44.6%
United States Treasury Bonds.... 17.9
U.S. Government Treasury Bills.. 16.4
United States Treasury Notes.... 12.8
Time Deposits................... 6.6
Repurchase Agreements........... 0.7
Federal Farm Credit Bank........ 0.4
Small Business Administration... 0.3
----
99.7%
====
CREDIT QUALITY+#
Government -- Agency. 0.9%
AA................... 99.1
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Standard and Poor's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
15
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 45.3%
FEDERAL FARM CREDIT BANK -- 0.4%
6.30% due 12/03/13.................... $ 500,000 $ 562,616
----------
FEDERAL NATIONAL MTG. ASSOC. -- 0.0%
8.00% due 01/01/23.................... 26,271 29,300
11.00% due 02/01/15................... 18 18
11.50% due 09/01/19................... 1,091 1,146
----------
30,464
----------
GOVERNMENT NATIONAL MTG. ASSOC. -- 44.6%
4.50% due 05/15/18.................... 392,605 423,316
4.50% due 08/15/18.................... 601,728 648,796
4.50% due 09/15/18.................... 1,635,914 1,763,878
4.50% due 10/15/18.................... 1,634,811 1,762,688
4.50% due 09/15/33.................... 1,624,716 1,778,092
4.50% due 02/15/39.................... 15,053 16,412
4.50% due 04/15/39.................... 1,005,497 1,096,334
4.50% due 05/15/39.................... 1,418,763 1,546,934
4.50% due 06/15/39.................... 340,900 371,696
4.50% due 07/15/39.................... 244,297 266,366
4.50% due 09/15/39.................... 955,511 1,041,831
4.50% due 10/15/39.................... 909,219 991,357
4.50% due 12/15/39.................... 2,053,218 2,238,703
4.50% due 01/15/40.................... 1,073,554 1,168,189
4.50% due 02/15/40.................... 1,910,646 2,079,072
4.50% due 03/15/40.................... 1,773,107 1,929,410
4.50% due 04/15/40.................... 980,561 1,067,211
4.50% due 05/15/40.................... 864,242 940,426
4.50% due 06/15/40.................... 1,772,898 1,929,341
4.50% due 07/15/40.................... 998,253 1,086,357
4.50% due 08/15/40.................... 525,099 571,387
4.50% due 09/15/40.................... 35,158 38,257
4.50% due 03/15/41.................... 3,044,195 3,317,186
4.50% due 04/15/41.................... 191,007 208,800
4.50% due 06/15/41.................... 1,462,301 1,593,703
4.50% due 07/15/41.................... 100,296 109,138
4.50% due 08/15/41.................... 1,498,164 1,630,229
5.00% due 04/15/18.................... 1,609,611 1,742,560
5.00% due 04/15/33.................... 21,926 24,219
5.00% due 08/15/33.................... 948,977 1,047,938
5.00% due 09/15/33.................... 444,389 490,654
5.00% due 10/15/33.................... 317,525 350,553
5.00% due 04/15/34.................... 13,899 15,349
5.00% due 11/15/34.................... 97,394 107,551
5.00% due 02/15/35.................... 9,611 10,598
5.00% due 03/15/35.................... 318,648 351,382
5.00% due 04/15/35.................... 29,025 32,007
5.00% due 05/15/35.................... 796,555 878,382
5.00% due 09/15/35.................... 378,637 417,655
5.00% due 10/15/35.................... 71,234 78,552
5.00% due 12/15/35.................... 43,725 48,217
5.00% due 03/15/36.................... 559,937 617,280
5.00% due 05/15/36.................... 634,490 697,884
5.00% due 06/15/36.................... 406,672 447,304
5.00% due 09/15/36.................... 1,003,804 1,106,451
5.00% due 10/15/36.................... 311,251 342,349
5.00% due 11/15/36.................... 23,682 26,048
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
5.00% due 12/15/36....... $ 160,836 $ 176,907
5.00% due 01/15/37....... 1,733,284 1,905,651
5.00% due 02/15/37....... 855,008 941,112
5.00% due 03/15/37....... 632,290 695,168
5.00% due 04/15/37....... 614,108 675,177
5.00% due 08/15/38....... 5,198,436 5,714,582
5.50% due 11/15/32....... 5,204 5,783
5.50% due 03/15/33....... 191,642 212,969
5.50% due 04/15/33....... 298,864 332,122
5.50% due 05/15/33....... 616,001 684,123
5.50% due 06/15/33....... 2,640,715 2,934,579
5.50% due 07/15/33....... 793,434 881,729
5.50% due 10/15/33....... 753,181 836,996
5.50% due 12/15/33....... 151,743 168,629
5.50% due 01/15/34....... 1,783,073 1,980,383
5.50% due 02/15/34....... 1,070,749 1,191,906
6.00% due 01/15/28....... 1,733 1,947
6.00% due 04/15/28....... 577,855 648,104
6.00% due 10/15/28....... 3,205 3,602
6.00% due 04/15/29....... 22,576 25,370
6.00% due 05/15/29....... 47,144 52,978
6.00% due 06/15/29....... 17,731 19,925
6.00% due 04/15/31....... 10,602 11,883
6.00% due 05/15/31....... 22,244 24,931
6.00% due 11/15/31....... 132,575 148,592
6.00% due 12/15/31....... 7,737 8,671
6.00% due 01/15/32....... 73,709 82,614
6.00% due 02/15/32....... 16,783 18,812
6.00% due 03/15/32....... 3,589 4,023
6.00% due 08/15/32....... 151,177 169,441
6.00% due 11/15/32....... 16,107 18,053
6.00% due 12/15/32....... 5,212 5,842
6.00% due 01/15/33....... 12,045 13,501
6.00% due 02/15/33....... 18,965 21,256
6.00% due 03/15/33....... 45,634 51,147
6.00% due 04/15/33....... 182,960 205,065
6.00% due 07/15/33....... 116,912 131,036
6.00% due 08/15/33....... 1,025,315 1,149,187
6.00% due 09/15/33....... 164,117 183,944
6.00% due 10/15/33....... 512,826 574,781
6.00% due 11/15/33....... 58,915 66,032
6.00% due 12/15/33....... 335,226 375,727
6.00% due 02/15/34....... 119,373 133,795
6.00% due 05/15/34....... 8,959 10,035
6.00% due 06/15/34....... 21,723 24,321
6.00% due 07/15/34....... 616,954 692,376
6.00% due 08/15/34....... 75,929 85,047
6.00% due 09/15/34....... 371,044 415,414
6.00% due 10/15/34....... 1,098,319 1,229,637
6.00% due 12/15/34....... 148,231 165,954
6.00% due 06/15/35....... 46,700 52,357
6.00% due 08/15/35....... 68,645 76,895
6.50% due 02/15/29....... 5,289 6,116
6.50% due 05/15/31....... 3,452 3,991
6.50% due 06/15/31....... 25,253 29,202
6.50% due 07/15/31....... 20,527 23,739
16
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
6.50% due 08/15/31................. $ 33,412 $ 38,639
6.50% due 09/15/31................. 100,739 116,498
6.50% due 10/15/31................. 129,341 149,575
6.50% due 11/15/31................. 5,588 6,462
6.50% due 01/15/32................. 8,114 9,383
6.50% due 02/15/32................. 195,724 226,341
7.00% due 07/15/23................. 11,846 13,677
7.00% due 10/15/23................. 24,536 28,329
7.00% due 09/15/25................. 112,625 130,273
7.00% due 03/20/29................. 10,046 11,745
7.00% due 06/20/29................. 1,542 1,797
7.00% due 11/20/30................. 30,122 35,155
7.50% due 04/15/17................. 6,350 7,083
7.50% due 08/15/23................. 74,088 86,110
7.50% due 09/15/23................. 267,852 309,015
9.00% due 12/15/16................. 24,816 27,872
11.00% due 08/20/15................ 41 41
11.00% due 09/20/15................ 140 157
11.50% due 05/20/15................ 749 754
12.50% due 09/15/14................ 2,151 2,169
13.00% due 11/15/14................ 52 53
13.50% due 02/15/13................ 1,795 1,831
15.00% due 02/15/12................ 30 30
15.00% due 06/15/12................ 660 664
15.00% due 09/15/12................ 82 82
-----------
67,954,936
-----------
SMALL BUSINESS ADMINISTRATION -- 0.3%
6.30% due 06/01/18................. 429,653 467,533
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $63,933,648)................. 69,015,549
-----------
U.S. GOVERNMENT TREASURIES -- 30.7%
UNITED STATES TREASURY BONDS -- 17.9%
3.88% due 08/15/40................. 1,000,000 1,188,125
4.25% due 11/15/40................. 12,000,000 15,174,372
4.75% due 02/15/41................. 8,000,000 10,931,248
-----------
27,293,745
-----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
UNITED STATES TREASURY NOTES -- 12.8%
1.25% due 10/31/15.................... $ 2,000,000 $ 2,042,344
1.50% due 07/31/16.................... 16,000,000 16,430,080
3.13% due 05/15/19.................... 1,000,000 1,114,062
------------
19,586,486
------------
TOTAL U.S. GOVERNMENT TREASURIES
(cost $39,826,569).................... 46,880,231
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $103,760,217)................... 115,895,780
------------
SHORT-TERM INVESTMENT SECURITIES -- 23.0%
TIME DEPOSITS -- 6.6%
Euro Time Deposit with State Street
Bank & Trust Co.
0.01 % due 09/01/11................... 10,000,000 10,000,000
------------
U.S. GOVERNMENT TREASURIES -- 16.4%
United States Treasury Bills
0.01% due 10/13/11.................... 25,000,000 24,999,875
------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(cost $34,999,875).................... 34,999,875
------------
REPURCHASE AGREEMENT -- 0.7%
State Street Bank and Trust Co. Joint
Repurchase Agreement(1)
(cost $1,060,000)..................... 1,060,000 1,060,000
------------
TOTAL INVESTMENTS
(cost $139,820,092)(2)................ 99.7% 151,955,655
Other assets less liabilities............ 0.3 451,651
----------- ------------
NET ASSETS 100.0% $152,407,306
=========== ============
--------
(1)See Note 2 for details of Joint Repurchase Agreements.
(2)See Note 5 for cost of investments on a tax basis.
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2011 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
Long-Term Investment Securities:
U.S. Government Agencies:
Federal Farm Credit Bank......... $ -- $ 562,616 $ -- $ 562,616
Federal National Mtg. Assoc...... -- 30,464 -- 30,464
Government National Mtg. Assoc... -- 67,954,936 -- 67,954,936
Small Business Administration.... -- 467,533 467,533
U.S. Government Treasuries........ -- 46,880,231 -- 46,880,231
Short Term Investment Securities:
Time Deposits..................... -- 10,000,000 -- 10,000,000
U.S. Government Treasuries........ -- 24,999,875 -- 24,999,875
Repurchase Agreement................ -- 1,060,000 -- 1,060,000
----------- ------------ ----------- ------------
TOTAL............................... $ -- $151,955,655 $ -- $151,955,655
=========== ============ =========== ============
See Notes to Financial Statements
17
SUNAMERICA GNMA FUND
PORTFOLIO PROFILE -- SEPTEMBER 30, 2011 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Government National Mtg. Assoc.. 82.7%
Time Deposits................... 7.4
U.S. Government Agencies........ 6.0
Repurchase Agreements........... 1.0
----
97.1%
====
CREDIT QUALITY+#
Government -- Agency. 0.2%
AA................... 99.8
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Standard and Poor's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
18
SUNAMERICA GNMA FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 82.7%
GOVERNMENT NATIONAL MTG. ASSOC. -- 82.7%
4.50% due 05/15/18.................... $ 621,205 $ 669,797
4.50% due 08/15/18.................... 303,846 327,613
4.50% due 09/15/18.................... 979,963 1,056,619
4.50% due 10/15/18.................... 1,329,270 1,433,250
4.50% due 08/15/33.................... 85,025 93,051
4.50% due 09/15/33.................... 294,365 322,154
4.50% due 10/15/38.................... 274,523 299,645
4.50% due 12/15/38.................... 318,722 347,814
4.50% due 02/15/39.................... 183,501 200,079
4.50% due 03/15/39.................... 772,725 842,533
4.50% due 04/15/39.................... 251,249 274,055
4.50% due 05/15/39.................... 3,107,556 3,388,292
4.50% due 06/15/39.................... 9,901,433 10,795,925
4.50% due 07/15/39.................... 3,180,134 3,467,425
4.50% due 08/15/39.................... 195,996 213,702
4.50% due 09/15/39.................... 276,991 302,015
4.50% due 10/15/39.................... 155,136 169,151
4.50% due 11/15/39.................... 1,093,570 1,192,362
4.50% due 12/15/39.................... 1,204,727 1,313,561
4.50% due 01/15/40.................... 164,039 178,499
4.50% due 02/15/40.................... 5,184,698 5,641,739
4.50% due 03/15/40.................... 1,721,519 1,873,275
4.50% due 04/15/40.................... 3,349,686 3,645,928
4.50% due 05/15/40.................... 606,812 660,393
4.50% due 06/15/40.................... 1,143,554 1,244,518
4.50% due 07/15/40.................... 861,616 937,570
4.50% due 08/15/40.................... 78,810 85,757
4.50% due 09/15/40.................... 724,699 789,030
4.50% due 10/15/40.................... 71,247 77,617
4.50% due 11/15/40.................... 936,429 1,018,977
4.50% due 01/15/41.................... 953,903 1,037,992
4.50% due 02/15/41.................... 1,480,739 1,611,268
4.50% due 03/15/41.................... 4,770,445 5,199,534
4.50% due 04/15/41.................... 6,308,436 6,864,536
4.50% due 05/15/41.................... 1,821,774 1,982,367
4.50% due 06/15/41.................... 1,270,912 1,383,086
4.50% due 07/15/41.................... 890,416 968,907
4.50% due 08/15/41.................... 462,598 503,377
5.00% due 03/15/18.................... 233,697 252,999
5.00% due 04/15/18.................... 2,472,013 2,676,192
5.00% due 05/15/18.................... 3,989,171 4,318,665
5.00% due 01/15/33.................... 5,458 6,029
5.00% due 05/15/33.................... 6,398 7,075
5.00% due 08/15/33.................... 1,302,584 1,438,836
5.00% due 09/15/33.................... 1,311,055 1,448,855
5.00% due 10/15/33.................... 3,203,024 3,538,063
5.00% due 04/15/34.................... 27,490 30,357
5.00% due 05/15/34.................... 82,803 91,438
5.00% due 11/15/34.................... 333,227 367,978
5.00% due 12/15/34.................... 330,832 365,334
5.00% due 09/15/35.................... 10,169 11,214
5.00% due 10/15/35.................... 66,730 73,585
5.00% due 11/15/35.................... 65,525 72,256
5.00% due 12/15/35.................... 34,295 37,817
5.00% due 02/15/36.................... 90,970 100,216
5.00% due 04/15/36.................... 271,283 298,387
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
5.00% due 06/15/36....... $ 755,321 $ 830,787
5.00% due 07/15/36....... 275,614 303,152
5.00% due 08/15/36....... 11,770 13,004
5.00% due 09/15/36....... 440,072 485,566
5.00% due 10/15/36....... 24,692 27,420
5.00% due 11/15/36....... 152,073 167,267
5.00% due 12/15/36....... 551,335 606,421
5.00% due 01/15/37....... 230,595 253,526
5.00% due 02/15/37....... 558,844 614,419
5.00% due 04/15/37....... 3,424,385 3,766,284
5.00% due 12/15/37....... 11,107 12,212
5.00% due 04/15/38....... 5,501,188 6,047,395
5.00% due 05/15/38....... 3,647,080 4,009,541
5.00% due 06/15/38....... 183,238 201,432
5.00% due 08/15/38....... 423,573 465,629
5.00% due 10/15/38....... 529,089 581,772
5.00% due 01/15/39....... 750,679 825,213
5.00% due 02/15/39....... 1,609,739 1,769,568
5.00% due 03/15/39....... 2,747,057 3,019,809
5.00% due 04/15/39....... 1,540,339 1,693,278
5.00% due 08/15/39....... 1,721,423 1,892,341
5.00% due 09/15/39....... 74,401 81,788
5.00% due 10/15/39....... 6,063,838 6,665,908
5.00% due 11/15/39....... 3,758,064 4,131,198
5.00% due 12/15/39....... 3,257,139 3,588,658
5.00% due 04/15/40....... 3,222,049 3,541,963
5.00% due 05/15/40....... 24,752,187 27,209,802
5.00% due 06/15/40....... 341,285 375,171
5.50% due 06/15/29....... 2,374 2,619
5.50% due 01/15/32....... 23,502 26,117
5.50% due 02/15/33....... 78,210 86,914
5.50% due 03/15/33....... 328,686 365,263
5.50% due 04/15/33....... 924,476 1,027,354
5.50% due 05/15/33....... 1,384,793 1,536,248
5.50% due 06/15/33....... 482,300 535,972
5.50% due 07/15/33....... 3,927 4,364
5.50% due 08/15/33....... 61,406 68,239
5.50% due 10/15/33....... 547,717 608,668
5.50% due 12/15/33....... 261,509 290,611
5.50% due 01/15/34....... 423,299 470,211
5.50% due 02/15/34....... 154,458 171,618
5.50% due 07/15/35....... 260,718 289,161
5.50% due 09/15/35....... 12,286,576 13,626,978
5.50% due 10/15/35....... 693,453 769,105
5.50% due 11/15/35....... 1,023,208 1,134,834
5.50% due 12/15/35....... 5,845,899 6,483,823
5.50% due 02/15/36....... 218,439 242,338
5.50% due 03/15/36....... 1,932,446 2,139,901
5.50% due 05/15/36....... 96,338 106,638
5.50% due 09/15/36....... 246,633 273,000
5.50% due 03/15/37....... 232,040 256,629
5.50% due 04/15/37....... 367,440 407,325
5.50% due 05/15/37....... 85,863 94,962
5.50% due 12/15/37....... 181,392 200,614
5.50% due 01/15/38....... 265,176 293,194
5.50% due 02/15/38....... 204,852 226,496
19
SUNAMERICA GNMA FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
5.50% due 04/15/38................ $ 455,324 $ 503,433
5.50% due 05/15/38................ 1,452,383 1,612,043
5.50% due 06/15/38................ 1,481,517 1,638,061
5.50% due 07/15/38................ 1,704,697 1,885,394
5.50% due 08/15/38................ 1,164,359 1,288,732
5.50% due 10/15/38................ 5,464,759 6,042,254
5.50% due 11/15/38................ 439,758 486,222
5.50% due 12/15/38................ 900,255 995,423
5.50% due 01/15/39................ 7,156,890 7,913,068
5.50% due 02/15/39................ 508,904 562,673
5.50% due 03/15/39................ 318,140 351,754
5.50% due 05/15/39................ 114,370 126,470
5.50% due 08/15/39................ 1,377,443 1,522,980
5.50% due 09/15/39................ 417,876 462,158
5.50% due 10/15/39................ 2,029,464 2,246,098
5.50% due 11/15/39................ 657,692 727,251
5.50% due 12/15/39................ 2,134,828 2,360,388
5.50% due 01/15/40................ 167,378 185,063
5.50% due 03/15/40................ 613,840 678,697
5.50% due 04/15/40................ 312,308 346,008
5.50% due 05/15/40................ 252,373 279,038
5.50% due 06/15/40................ 276,848 306,965
5.50% due 08/15/40................ 8,596,699 9,506,245
5.50% due 09/15/40................ 641,402 709,171
5.50% due 10/15/40................ 1,218,653 1,347,412
5.50% due 11/15/40................ 78,049 86,295
5.50% due 12/15/40................ 680,453 752,348
5.50% due 02/15/41................ 4,725,166 5,225,122
5.50% due 06/15/41................ 325,866 360,296
6.00% due 11/15/23................ 1,650 1,847
6.00% due 01/15/24................ 4,609 5,159
6.00% due 07/15/28................ 1,931 2,170
6.00% due 12/15/28................ 138,279 155,395
6.00% due 01/15/29................ 299,144 336,172
6.00% due 02/15/29................ 280,518 315,241
6.00% due 03/15/29................ 320,171 359,802
6.00% due 04/15/29................ 610,363 685,796
6.00% due 05/15/29................ 32,685 36,730
6.00% due 06/15/29................ 102,425 115,061
6.00% due 07/15/29................ 101,585 114,160
6.00% due 08/15/29................ 7,604 8,546
6.00% due 10/15/29................ 94,432 106,121
6.00% due 04/15/31................ 6,836 7,662
6.00% due 07/15/31................ 13,964 15,652
6.00% due 10/15/31................ 51,697 57,943
6.00% due 11/15/31................ 373,018 418,083
6.00% due 12/15/31................ 167,972 188,265
6.00% due 01/15/32................ 291,085 326,252
6.00% due 02/15/32................ 12,158 13,627
6.00% due 07/15/32................ 44,587 49,974
6.00% due 09/15/32................ 401,101 449,559
6.00% due 10/15/32................ 89,127 99,895
6.00% due 11/15/32................ 809 907
6.00% due 12/15/32................ 28,149 31,549
6.00% due 01/15/33................ 75,081 84,152
6.00% due 02/15/33................ 664,485 744,766
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
6.00% due 03/15/33....... $ 70,109 $ 78,579
6.00% due 04/15/33....... 611,459 685,330
6.00% due 05/15/33....... 488,360 547,361
6.00% due 06/15/33....... 431,016 483,090
6.00% due 08/15/33....... 214,830 240,784
6.00% due 10/15/33....... 28,026 31,411
6.00% due 11/15/33....... 140,993 158,026
6.00% due 12/15/33....... 261,466 293,056
6.00% due 01/15/34....... 253,701 284,067
6.00% due 02/15/34....... 229,301 257,641
6.00% due 03/15/34....... 62,721 70,220
6.00% due 04/15/34....... 165,699 185,509
6.00% due 05/15/34....... 106,632 119,486
6.00% due 06/15/34....... 105,947 119,209
6.00% due 07/15/34....... 318,123 356,946
6.00% due 08/15/34....... 341,962 382,935
6.00% due 09/15/34....... 127,249 142,319
6.00% due 10/15/34....... 302,754 338,952
6.00% due 11/15/34....... 455,012 509,657
6.00% due 12/15/34....... 54,182 60,745
6.00% due 01/15/35....... 50,692 56,748
6.00% due 02/15/35....... 248,081 278,183
6.00% due 04/15/35....... 31,653 35,418
6.00% due 05/15/35....... 6,373 7,181
6.00% due 06/15/35....... 149,985 167,824
6.00% due 11/15/35....... 4,520 5,063
6.00% due 12/15/35....... 126,747 143,533
6.00% due 01/15/36....... 488,734 546,122
6.00% due 02/15/36....... 84,581 94,808
6.00% due 03/15/36....... 264,487 295,678
6.00% due 04/15/36....... 296,468 332,177
6.00% due 05/15/36....... 854,632 957,727
6.00% due 06/15/36....... 337,234 376,817
6.00% due 07/15/36....... 275,260 307,569
6.00% due 08/15/36....... 8,042 8,980
6.00% due 09/15/36....... 60,796 68,139
6.00% due 10/15/36....... 332,892 372,025
6.00% due 11/15/36....... 604,296 675,225
6.00% due 07/15/37....... 708,357 790,837
6.00% due 09/15/37....... 953,057 1,064,030
6.00% due 10/15/37....... 390,929 436,449
6.00% due 11/15/37....... 19,645 21,940
6.00% due 12/15/37....... 20,990 23,434
6.00% due 01/15/38....... 800,359 893,302
6.00% due 02/15/38....... 518,666 578,897
6.00% due 06/15/38....... 32,200 35,939
6.00% due 07/15/38....... 1,370,631 1,529,800
6.00% due 08/15/38....... 886,392 989,325
6.00% due 09/15/38....... 5,828,479 6,505,318
6.00% due 10/15/38....... 883,466 986,060
6.00% due 11/15/38....... 2,530,053 2,823,920
6.00% due 12/15/38....... 1,598,973 1,784,655
6.00% due 01/15/39....... 2,379,723 2,656,070
6.00% due 08/15/39....... 989,277 1,104,167
6.00% due 09/15/39....... 37,732 42,120
6.00% due 10/15/39....... 1,286,468 1,435,861
20
SUNAMERICA GNMA FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
6.00% due 11/15/39................ $951,516 $1,062,160
6.00% due 01/15/40................ 688,590 768,553
6.00% due 02/15/40................ 10,489 11,708
6.00% due 03/15/40................ 507,432 566,358
6.00% due 04/15/40................ 955,090 1,066,000
6.00% due 05/15/40................ 744,544 831,005
6.50% due 03/15/28................ 11,128 12,837
6.50% due 08/15/28................ 17,413 20,137
6.50% due 01/15/29................ 2,143 2,478
6.50% due 02/15/29................ 731 845
6.50% due 03/15/29................ 67,985 78,620
6.50% due 04/15/29................ 759 877
6.50% due 05/15/29................ 5,919 6,832
6.50% due 06/15/29................ 21,221 24,541
6.50% due 07/15/29................ 1,524 1,762
6.50% due 10/15/29................ 2,941 3,401
6.50% due 08/15/31................ 72,117 83,398
6.50% due 09/15/31................ 10,049 11,621
6.50% due 10/15/31................ 129,342 149,575
6.50% due 11/15/31................ 76,808 88,822
6.50% due 12/15/31................ 88,248 102,053
6.50% due 02/15/32................ 145,314 168,046
6.50% due 05/15/32................ 397,922 460,184
6.50% due 06/15/32................ 59,151 68,405
7.00% due 03/15/23................ 13,233 15,279
7.00% due 01/20/24................ 373 429
7.00% due 03/20/24................ 301 346
7.00% due 07/20/25................ 1,122 1,292
7.00% due 09/15/25................ 48,911 56,575
7.00% due 01/20/29................ 21,036 24,513
7.00% due 02/20/29................ 3,514 4,095
7.00% due 06/20/29................ 7,647 8,912
7.00% due 07/20/29................ 27,174 31,666
7.00% due 09/20/29................ 2,617 3,050
7.00% due 10/20/29................ 5,079 5,919
7.00% due 11/20/29................ 1,761 2,052
7.00% due 03/20/30................ 2,889 3,371
7.00% due 06/20/30................ 3,050 3,560
7.00% due 08/20/30................ 6,409 7,479
7.00% due 09/20/30................ 11,255 13,135
7.00% due 10/20/30................ 12,499 14,588
8.00% due 11/15/26................ 54,184 63,954
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
8.00% due 12/15/29......................... $ 7,936 $ 8,372
8.00% due 04/15/30......................... 17,649 20,957
8.00% due 05/15/30......................... 1,275 1,336
8.00% due 08/15/30......................... 26,518 31,401
8.50% due 03/15/17......................... 8,479 8,768
8.50% due 05/15/21......................... 3,697 3,716
8.50% due 12/15/22......................... 23,845 28,201
8.50% due 01/15/23......................... 44,337 52,825
8.50% due 09/15/24......................... 11,725 14,026
9.00% due 07/15/16......................... 14,213 15,963
9.00% due 10/15/16......................... 3,194 3,212
------------
277,521,851
------------
SMALL BUSINESS ADMINISTRATION -- 0.0%
6.30% due 06/01/18......................... 143,218 155,844
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $265,908,972)........................ 277,677,695
------------
SHORT-TERM INVESTMENT SECURITIES -- 13.4%
TIME DEPOSITS -- 7.4%
Euro Time Deposit with State Street Bank &
Trust Co.
0.01% due 10/03/11......................... 25,000,000 25,000,000
------------
U.S. GOVERNMENT AGENCIES -- 6.0%
Federal Home Loan Bank
0.01% due 10/14/11......................... 20,000,000 19,999,964
------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(cost $44,999,964)......................... 44,999,964
------------
REPURCHASE AGREEMENT -- 1.0%
State Street Bank and Trust Co. Joint
Repurchase Agreement(1)
(cost $3,276,000).......................... 3,276,000 3,276,000
------------
TOTAL INVESTMENTS
(cost $314,184,936)(2)..................... 97.1% 325,953,659
Other assets less liabilities................. 2.9 9,755,725
----------- ------------
NET ASSETS 100.0% $335,709,384
=========== ============
--------
(1)See Note 2 for details of Joint Repurchase Agreements.
(2)See Note 5 for cost of investments on a tax basis.
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2011 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
Long-Term Investment Securities:
U.S. Government Agencies:
Government National Mtg. Assoc... $ -- $277,521,851 $ -- $277,521,851
Small Business Administration.... -- 155,844 -- 155,844
Short Term Investment Securities:
Time Deposits..................... -- 25,000,000 -- 25,000,000
U.S. Government Agencies.......... -- 19,999,964 -- 19,999,964
Repurchase Agreements............... -- 3,276,000 -- 3,276,000
----------- ------------ ----------- ------------
TOTAL............................... $ -- $325,953,659 $ -- $325,953,659
=========== ============ =========== ============
See Notes to Financial Statements
21
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO PROFILE -- SEPTEMBER 30, 2011 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Foreign Government Agencies............ 15.2%
Federal National Mtg. Assoc............ 8.7
Diversified Financial Services......... 5.2
Federal Home Loan Mtg. Corp............ 4.7
United States Treasury Notes........... 4.0
Oil Companies-Exploration & Production. 3.5
Diversified Banking Institutions....... 2.4
Banks-Commercial....................... 2.1
Time Deposits.......................... 2.0
Repurchase Agreements.................. 1.8
Cable/Satellite TV..................... 1.6
Pipelines.............................. 1.5
Cellular Telecom....................... 1.5
Electric-Integrated.................... 1.3
Telephone-Integrated................... 1.3
Coal................................... 1.3
Banks-Super Regional................... 1.2
Medical-Hospitals...................... 1.1
United States Treasury Bonds........... 1.0
Paper & Related Products............... 0.9
Casino Hotels.......................... 0.9
Rental Auto/Equipment.................. 0.9
Independent Power Producers............ 0.8
Insurance-Multi-line................... 0.8
Electric-Generation.................... 0.8
Real Estate Investment Trusts.......... 0.8
Government National Mtg. Assoc......... 0.8
Steel-Producers........................ 0.7
Auto-Cars/Light Trucks................. 0.7
Oil Companies-Integrated............... 0.7
Diversified Manufacturing Operations... 0.7
Finance-Investment Banker/Broker....... 0.6
Finance-Auto Loans..................... 0.6
Finance-Other Services................. 0.6
Chemicals-Plastics..................... 0.6
Real Estate Operations & Development... 0.6
Telecom Services....................... 0.5
Containers-Paper/Plastic............... 0.5
Medical Products....................... 0.5
Medical-Drugs.......................... 0.5
Airlines............................... 0.4
Building & Construction Products-Misc.. 0.4
Containers-Metal/Glass................. 0.4
Auto/Truck Parts & Equipment-Original.. 0.4
Banks-Special Purpose.................. 0.4
Decision Support Software.............. 0.4
Financial Guarantee Insurance.......... 0.4
Medical Instruments.................... 0.4
Building-Residential/Commercial........ 0.4
Commercial Services.................... 0.4
Oil-Field Services..................... 0.4
Consumer Products-Misc................. 0.4
Therapeutics........................... 0.4
Retail-Drug Store...................... 0.3
Computer Services...................... 0.3
Insurance-Life/Health.................. 0.3
Real Estate Management/Services........ 0.3
Non-Hazardous Waste Disposal........... 0.3
Broadcast Services/Program............. 0.3
Advertising Services................... 0.3
Special Purpose Entities............. 0.3%
Marine Services...................... 0.3
Building Products-Cement............. 0.3
Chemicals-Diversified................ 0.3
Retail-Restaurants................... 0.3
Oil Refining & Marketing............. 0.3
Retail-Toy Stores.................... 0.3
Transport-Services................... 0.3
Medical-Biomedical/Gene.............. 0.3
Music................................ 0.3
Banks-Money Center................... 0.3
Building-Heavy Construction.......... 0.3
Auto-Heavy Duty Trucks............... 0.2
Municipal Bonds...................... 0.2
Consulting Services.................. 0.2
Computers-Memory Devices............. 0.2
Insurance-Mutual..................... 0.2
Satellite Telecom.................... 0.2
Publishing-Newspapers................ 0.2
MRI/Medical Diagnostic Imaging....... 0.2
Firearms & Ammunition................ 0.2
Computer Graphics.................... 0.2
Distribution/Wholesale............... 0.2
Web Hosting/Design................... 0.2
Funeral Services & Related Items..... 0.2
Computers............................ 0.2
Aerospace/Defense.................... 0.2
Food-Canned.......................... 0.2
Semiconductor Equipment.............. 0.2
Capacitors........................... 0.2
Data Processing/Management........... 0.2
Gold Mining.......................... 0.2
Food-Misc............................ 0.2
Food-Retail.......................... 0.2
Sovereign Agency..................... 0.2
Electronic Components-Semiconductors. 0.2
Dialysis Centers..................... 0.2
Advanced Materials................... 0.2
Retail-Discount...................... 0.2
Private Corrections.................. 0.2
Retail-Propane Distribution.......... 0.2
Diversified Operations............... 0.2
Gas-Transportation................... 0.2
Chemicals-Specialty.................. 0.2
Theaters............................. 0.2
Seismic Data Collection.............. 0.2
Transport-Rail....................... 0.2
Cosmetics & Toiletries............... 0.1
Printing-Commercial.................. 0.1
Television........................... 0.1
Home Furnishings..................... 0.1
Casino Services...................... 0.1
Investment Companies................. 0.1
Aerospace/Defense-Equipment.......... 0.1
Regional Authority................... 0.1
Banks-Fiduciary...................... 0.1
Storage/Warehousing.................. 0.1
Import/Export........................ 0.1
Oil & Gas Drilling................... 0.1
Electric-Distribution................ 0.1
22
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO PROFILE -- SEPTEMBER 30, 2011 -- (UNAUDITED) (CONTINUED)
Metal-Aluminum.................. 0.1%
Transport-Marine................ 0.1
Wire & Cable Products........... 0.1
Oil Field Machinery & Equipment. 0.1
Retail-Apparel/Shoe............. 0.1
Gambling (Non-Hotel)............ 0.1
Motion Pictures & Services...... 0.1
Metal-Diversified............... 0.1
Transport-Air Freight........... 0.1
Electronics-Military............ 0.1
Finance-Commercial.............. 0.1
Retail-Consumer Electronics..... 0.1
Telecommunication Equipment..... 0.1
Wireless Equipment.............. 0.1
Office Automation & Equipment... 0.1
Electronic Components-Misc...... 0.1
Advertising Agencies............ 0.1
Banks-Mortgage.................. 0.1
Finance-Leasing Companies....... 0.1
Multimedia...................... 0.1
Diversified Minerals............ 0.1
Medical-HMO..................... 0.1
Metal-Copper.................... 0.1
E-Commerce/Services............. 0.1
Metal-Iron...................... 0.1
Petrochemicals.................. 0.1
Gas-Distribution................ 0.1
----
97.8%
====
--------
*Calculated as a percentage of net assets
CREDIT QUALITY ALLOCATION+#
AAA........ 5.5%
AA......... 22.7
A.......... 5.4
BBB........ 14.6
BB......... 22.1
B.......... 20.9
CCC........ 4.2
CC......... 0.2
C.......... 0.1
Not Rated@. 4.3
------
100.00%
======
--------
*Calculated as a percentage of net assets.
+Source: Standard and Poor's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
COUNTRY ALLOCATION*
United States.......... 73.3%
Canada................. 1.7
Mexico................. 1.6
United Kingdom......... 1.5
Turkey................. 1.4
Philippines............ 1.4
Brazil................. 1.3
Cayman Islands......... 1.2
Indonesia.............. 1.2
Luxembourg............. 1.0
Russia................. 0.9
Switzerland............ 0.8
Norway................. 0.8
Australia.............. 0.7
Ireland................ 0.7
Argentina.............. 0.6
Germany................ 0.6
Venezuela.............. 0.5
Dominican Republic..... 0.5
Netherlands............ 0.5
Peru................... 0.4
Colombia............... 0.4
Japan.................. 0.4
Hungary................ 0.4
Sweden................. 0.4
Austria................ 0.3
Singapore.............. 0.3
Serbia................. 0.3
Croatia................ 0.3
Bermuda................ 0.2
Ukraine................ 0.2
Qatar.................. 0.2
Sri Lanka.............. 0.2
Chile.................. 0.2
Lithuania.............. 0.2
Belarus................ 0.2
Poland................. 0.1
Uruguay................ 0.1
British Virgin Islands. 0.1
France................. 0.1
Ivory Coast............ 0.1
SupraNational.......... 0.1
Kazakhstan............. 0.1
South Korea............ 0.1
El Salvador............ 0.1
Isle of Man............ 0.1
----
97.8%
====
--------
*Calculated as a percentage of net assets
23
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------
ASSET BACKED SECURITIES -- 4.7%
DIVERSIFIED FINANCIAL SERVICES -- 4.7%
Avis Budget Rental Car Funding AESOP LLC
Series 2010-5A, Class A
3.15% due 03/20/16*....................... $ 500,000 $ 515,125
Banc of America Commercial Mtg., Inc.
Series 2006-5, Class AM
5.45% due 09/10/47(1)..................... 500,000 428,005
Banc of America Mtg. Securities, Inc.
Series 2006-2, Class A15
6.00% due 07/25/46(2)..................... 111,931 109,972
Cajun Global LLC
Series 2011-1A, Class A2
6.00% due 02/20/41*....................... 492,045 512,027
Citibank Credit Card Issuance Trust,
Series 2008-A1, Class A1
5.35% due 02/07/20........................ 1,500,000 1,776,999
Citibank Omni Master Trust
Series 2009-A17, Class A17
4.90% due 11/15/18*....................... 1,000,000 1,088,786
Countrywide Asset-Backed Certs. FRS
Series 2004-BC2, Class M2
1.81% due 02/25/34........................ 89,641 77,923
Countrywide Home Loan Mtg. Pass Through
Trust, VRS
Series 2004-22, Class A2
3.03% due 11/25/34(2)..................... 116,345 87,536
Dominos Pizza Master Issuer LLC
Series 2007-1, Class A2
5.26% due 04/25/37*....................... 391,000 394,910
Entergy Arkansas Restoration Funding LLC
Series 2010A, Class A1
2.30% due 08/01/21........................ 241,649 249,120
GE Capital Commercial Mtg. Corp.
Series 2007-C1, Class A4
5.54% due 12/10/49(1)..................... 2,000,000 2,093,264
GS Mtg. Securities Corp. II
Series 2006-GG8, Class AM
5.59% due 11/10/39(1)..................... 1,000,000 905,491
GS Mtg. Securities Trust VRS
Series 2007-GG10, Class A4
5.98% due 08/10/45(1)..................... 2,682,744 2,787,143
GSAA Trust VRS
Series 2006-11, Class 2A2
0.39% due 07/25/36........................ 5,408,775 2,118,125
Harborview Mtg. Loan Trust VRS
Series 2006-14, Class 2A1A
0.38% due 01/25/47(2)..................... 2,224,707 1,159,837
JP Morgan Mtg. Acquisition Corp. VRS
Series 2006-CH2, Class AV3
0.33% due 10/25/36........................ 1,500,000 1,235,584
LB-UBS Commercial Mtg. Trust VRS
Series 2007-C7, Class AM
6.37% due 09/15/45(1)..................... 1,500,000 1,234,111
Merrill Lynch Mtg. Investors, Inc. VRS
Series 2005-A9, Class 3A1
2.79% due 12/25/35(2)..................... 1,019,907 780,554
Merrill Lynch/Countrywide Commercial Mtg.
Trust VRS
Series 2007-8, Class AM
6.17% due 08/12/49(1)..................... 500,000 442,826
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
Morgan Stanley Capital I
Series 2006-IQ12, Class AJ
5.40% due 12/15/43(1)........................ $2,119,600 $ 1,208,172
Morgan Stanley Capital I VRS
Series 2005-IQ10, Class B
5.47% due 09/15/42(1)........................ 200,000 185,691
Morgan Stanley Capital I VRS
Series 2007-T27, Class AJ
5.79% due 06/11/42(1)........................ 2,500,000 2,016,340
Morgan Stanley Capital I VRS
Series 2006-HQ9, Class B
5.83% due 07/05/44(1)........................ 1,000,000 787,875
Morgan Stanley Capital I VRS
Series 2007-IQ15, Class AM
6.08% due 06/11/49(1)........................ 500,000 412,304
Sierra Receivables Funding Co. LLC
Series 2010-3A, Class A
3.51% due 11/20/25*.......................... 120,461 121,926
Sonic Capital LLC
Series 2011-1A, Class A2
5.44% due 05/20/41*.......................... 863,280 878,387
Wachovia Bank Commercial Mtg. Trust VRS
Series 2003-C7, Class J
5.36% due 10/15/35*(1)....................... 2,750,000 1,916,189
Wells Fargo Mtg. Backed Securities Trust FRS
Series 2006-8, Class A2
0.63% due 07/25/36(2)........................ 716,624 696,779
-----------
TOTAL ASSET BACKED SECURITIES
(cost $29,089,953)........................... 26,221,001
-----------
U.S. CORPORATE BONDS & NOTES -- 44.4%
ADVANCED MATERIALS -- 0.2%
Polymer Group, Inc.
Senior Sec. Notes
7.75% due 02/01/19*.......................... 1,000,000 997,500
-----------
ADVERTISING AGENCIES -- 0.1%
Interpublic Group of Cos., Inc.
Senior Notes
6.25% due 11/15/14........................... 341,000 359,755
-----------
ADVERTISING SERVICES -- 0.3%
Checkout Holding Corp.
Senior Notes
zero coupon due 11/15/15*.................... 1,220,000 667,950
Visant Corp.
Company Guar. Notes
10.00% due 10/01/17.......................... 1,200,000 1,110,000
-----------
1,777,950
-----------
AEROSPACE/DEFENSE -- 0.2%
Lockheed Martin Corp.
Senior Notes
3.35% due 09/15/21........................... 400,000 396,050
Lockheed Martin Corp.
Senior Notes
4.25% due 11/15/19........................... 302,000 328,357
Lockheed Martin Corp.
Senior Notes
6.15% due 09/01/36........................... 373,000 451,872
-----------
1,176,279
-----------
24
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
AEROSPACE/DEFENSE-EQUIPMENT -- 0.1%
BE Aerospace, Inc.
Senior Notes
6.88% due 10/01/20......................... $ 650,000 $ 677,625
----------
AIRLINES -- 0.4%
Atlas Air, Inc.
Pass Through Certs.
Series 1991-1, Class A-2
6.88% due 04/02/14......................... 58,582 53,896
Atlas Air, Inc.
Pass Through Certs.
Series 1991-1, Class A-1
7.20% due 01/02/19......................... 1,117,569 1,039,339
Atlas Air, Inc.
Pass Through Certs.
Series 1991-1, Class B
7.63% due 01/02/15......................... 31,316 25,679
Delta Air Lines, Inc.
Senior Sec. Notes
9.50% due 09/15/14*........................ 1,185,000 1,220,550
----------
2,339,464
----------
APPLICATIONS SOFTWARE -- 0.0%
SS&C Technologies, Inc.
Company Guar. Notes
11.75% due 12/01/13........................ 237,000 239,370
----------
AUTO-CARS/LIGHT TRUCKS -- 0.5%
Chrysler Group LLC/CG Co-Issuer, Inc.
Senior Sec. Notes
8.25% due 06/15/21*........................ 2,240,000 1,724,800
Daimler Finance North America LLC FRS
Company Guar. Notes
0.97% due 03/28/14*........................ 626,000 626,063
Daimler Finance North America LLC
Company Guar. Notes
3.88% due 09/15/21*........................ 250,000 243,882
----------
2,594,745
----------
AUTO-HEAVY DUTY TRUCKS -- 0.2%
Navistar International Corp.
Company Guar. Notes
8.25% due 11/01/21......................... 1,390,000 1,426,487
----------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.4%
Cooper-Standard Automotive, Inc.
Company Guar. Notes
8.50% due 05/01/18......................... 1,250,000 1,281,250
Dana Holding Corp.
Senior Notes
6.75% due 02/15/21......................... 1,175,000 1,116,250
----------
2,397,500
----------
AUTO/TRUCK PARTS & EQUIPMENT-REPLACEMENT -- 0.0%
Exide Corp.
Escrow Notes
10.00% due 03/15/25(3)(4)+................. 225,000 0
----------
BANKS-COMMERCIAL -- 0.7%
Associated Banc-Corp.
Senior Notes
5.13% due 03/28/16......................... 784,000 815,795
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------
BANKS-COMMERCIAL (CONTINUED)
Branch Banking & Trust Co. FRS
Sub. Notes
0.60% due 05/23/17..................... $ 280,000 $ 253,580
CIT Group, Inc.
Sec. Notes
7.00% due 05/01/17..................... 2,260,714 2,192,892
KeyBank NA
Sub. Notes
7.41% due 10/15/27..................... 128,000 140,263
Regions Bank
Sub. Notes
7.50% due 05/15/18..................... 224,000 221,480
Zions Bancorp
Senior Notes
7.75% due 09/23/14..................... 416,000 438,556
----------
4,062,566
----------
BANKS-FIDUCIARY -- 0.1%
State Street Capital Trust IV FRS
Ltd. Guar. Notes
1.35% due 06/15/37..................... 919,000 629,692
----------
BANKS-MONEY CENTER -- 0.2%
Comerica Bank
Sub. Notes
5.20% due 08/22/17..................... 253,000 275,979
Dresdner Funding Trust I
Jr. Sub. Bonds
8.15% due 06/30/31*.................... 1,135,000 686,675
----------
962,654
----------
BANKS-SUPER REGIONAL -- 1.0%
BAC Capital Trust XIII FRS
Limited Guar. Notes
0.75% due 03/15/43(5).................. 1,070,000 568,935
Banc One Corp.
Sub. Debentures
8.00% due 04/29/27..................... 135,000 174,483
Bank of America NA
Sub. Notes
5.30% due 03/15/17..................... 436,000 393,777
Capital One Capital VI
Ltd. Guar. Notes
8.88% due 05/15/40..................... 288,000 292,243
Capital One Financial Corp. FRS
Senior Notes
1.40% due 07/15/14..................... 346,000 344,765
Capital One Financial Corp.
Senior Notes
3.15% due 07/15/16..................... 66,000 65,339
Huntington Bancshares, Inc.
Sub. Notes
7.00% due 12/15/20..................... 213,000 241,085
JPMorgan Chase Bank NA
Sub. Notes
5.88% due 06/13/16..................... 213,000 225,259
PNC Financial Services Group, Inc. FRS
Jr. Sub. Notes
6.75% due 02/01/12(5).................. 852,000 809,400
25
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
BANKS-SUPER REGIONAL (CONTINUED)
PNC Preferred Funding Trust II FRS
Jr. Sub. Bonds
6.11% due 12/15/11*(5)...................... $ 427,000 $ 315,980
SunTrust Banks, Inc.
Senior Notes
6.00% due 09/11/17.......................... 205,000 226,482
SunTrust Banks, Inc.
Sub. Notes
6.00% due 02/15/26.......................... 38,000 37,536
Wachovia Capital Trust III FRS
Ltd. Guar. Notes
5.80% due 12/15/11(5)....................... 319,000 261,580
Wachovia Corp. FRS
Senior Notes
0.62% due 06/15/17.......................... 410,000 369,749
Wells Fargo & Co. FRS
Senior Notes
0.45% due 10/28/15.......................... 470,000 441,333
Wells Fargo & Co. FRS
Jr. Sub. Bonds
7.98% due 03/15/18(5)....................... 235,000 242,050
Wells Fargo Bank NA FRS
Sub. Notes
0.50% due 05/16/16.......................... 350,000 310,208
----------
5,320,204
----------
BROADCAST SERVICES/PROGRAM -- 0.3%
Fisher Communications, Inc.
Company Guar. Notes
8.63% due 09/15/14.......................... 629,000 627,427
Nexstar Broadcasting, Inc./Mission
Broadcasting, Inc.
Sec. Notes
8.88% due 04/15/17.......................... 1,250,000 1,234,375
----------
1,861,802
----------
BUILDING & CONSTRUCTION PRODUCTS-MISC. -- 0.2%
Building Materials Corp. of America
Senior Notes
6.75% due 05/01/21*......................... 1,250,000 1,187,500
----------
BUILDING PRODUCTS-CEMENT -- 0.2%
Cemex Finance LLC
Senior Sec. Notes
9.50% due 12/14/16.......................... 1,815,000 1,324,209
----------
BUILDING-HEAVY CONSTRUCTION -- 0.2%
New Enterprise Stone & Lime Co.
Senior Notes
11.00% due 09/01/18*........................ 1,238,000 981,115
----------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.4%
Beazer Homes USA, Inc.
Company Guar. Notes
9.13% due 05/15/19.......................... 800,000 508,000
KB Home
Company Guar. Notes
9.10% due 09/15/17.......................... 850,000 722,500
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------------
BUILDING-RESIDENTIAL/COMMERCIAL (CONTINUED)
Standard Pacific Corp.
Sec. Notes
8.38% due 05/15/18............................... $1,000,000 $ 850,000
----------
2,080,500
----------
CABLE/SATELLITE TV -- 1.6%
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
6.50% due 04/30/21............................... 1,925,000 1,819,125
Comcast Corp.
Company Guar. Notes
5.65% due 06/15/35............................... 249,000 260,660
Comcast Corp.
Company Guar. Notes
5.90% due 03/15/16............................... 1,190,000 1,361,436
COX Communications, Inc.
Senior Notes
5.45% due 12/15/14............................... 374,000 414,117
COX Communications, Inc.
Senior Notes
5.88% due 12/01/16*.............................. 624,000 706,758
CSC Holdings LLC
Senior Notes
7.88% due 02/15/18............................... 1,090,000 1,144,500
DIRECTV Holdings LLC/DIRECTV Financing Co.,
Inc.
Company Guar. Notes
6.38% due 03/01/41............................... 381,000 426,287
Echostar DBS Corp.
Company Guar. Notes
7.75% due 05/31/15............................... 912,000 934,800
Insight Communications Co., Inc.
Senior Notes
9.38% due 07/15/18*.............................. 1,125,000 1,260,000
TCI Communications, Inc.
Senior Notes
7.13% due 02/15/28............................... 250,000 306,326
Time Warner Cable, Inc.
Company Guar. Notes
5.50% due 09/01/41............................... 385,000 380,537
----------
9,014,546
----------
CAPACITORS -- 0.2%
Kemet Corp.
Senior Sec. Notes
10.50% due 05/01/18.............................. 1,075,000 1,128,750
----------
CASINO HOTELS -- 0.9%
CityCenter Holdings LLC/CityCenter Finance Corp.
Sec. Notes
10.75% due 01/15/17*(6).......................... 1,504,206 1,365,067
Downstream Development Authority of the
Quapaw Tribe of Oklahoma
Senior Sec. Notes
10.50% due 07/01/19*............................. 1,610,000 1,517,425
Harrah's Operating Co., Inc.
Senior Sec. Notes
11.25% due 06/01/17.............................. 1,300,000 1,311,375
26
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
CASINO HOTELS (CONTINUED)
MGM Mirage, Inc.
Senior Sec. Notes
11.13% due 11/15/17......................... $ 551,000 $ 604,722
----------
4,798,589
----------
CASINO SERVICES -- 0.1%
Chukchansi Economic Development Authority
Senior Notes
8.00% due 11/15/13*......................... 1,045,000 707,988
----------
CELLULAR TELECOM -- 1.1%
Nextel Communications, Inc.
Company Guar. Notes
7.38% due 08/01/15.......................... 5,200,000 4,927,000
NII Capital Corp.
Company Guar. Notes
7.63% due 04/01/21.......................... 1,475,000 1,463,937
----------
6,390,937
----------
CHEMICALS-DIVERSIFIED -- 0.0%
PPG Industries, Inc.
Senior Notes
1.90% due 01/15/16.......................... 64,000 63,717
PPG Industries, Inc.
Senior Notes
5.50% due 11/15/40.......................... 129,000 147,517
----------
211,234
----------
CHEMICALS-PLASTICS -- 0.3%
Hexion US Finance Corp./Hexion Nova Scotia
Finance ULC
Senior Sec. Notes
8.88% due 02/01/18.......................... 1,904,000 1,570,800
----------
CHEMICALS-SPECIALTY -- 0.2%
Eastman Chemical Co.
Senior Notes
7.25% due 01/15/24.......................... 471,000 580,141
Lubrizol Corp.
Company Guar. Notes
6.50% due 10/01/34.......................... 248,000 328,481
----------
908,622
----------
COAL -- 1.3%
Alpha Natural Resources, Inc.
Company Guar. Notes
6.00% due 06/01/19.......................... 1,525,000 1,425,875
Consol Energy, Inc.
Company Guar. Notes
8.25% due 04/01/20.......................... 625,000 657,812
Foresight Energy LLC/Foresight Energy Corp.
Company Guar. Notes
9.63% due 08/15/17*......................... 1,600,000 1,616,000
James River Escrow, Inc.
Company Guar. Notes
7.88% due 04/01/19*......................... 1,200,000 1,008,000
Patriot Coal Corp.
Company Guar. Notes
8.25% due 04/30/18.......................... 1,469,000 1,307,410
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
COAL (CONTINUED)
SunCoke Energy, Inc.
Company Guar. Notes
7.63% due 08/01/19*........................ $ 980,000 $ 957,950
----------
6,973,047
----------
COMMERCIAL SERVICES -- 0.4%
Ceridian Corp.
Company Guar. Notes
11.25% due 11/15/15........................ 2,465,000 2,033,625
----------
COMPUTER GRAPHICS -- 0.2%
Eagle Parent, Inc.
Senior Notes
8.63% due 05/01/19*........................ 1,360,000 1,230,800
----------
COMPUTER SERVICES -- 0.3%
Affiliated Computer Services, Inc.
Senior Notes
5.20% due 06/01/15......................... 265,000 290,929
Compucom Systems, Inc.
Senior Sub. Notes
12.50% due 10/01/15*....................... 1,188,000 1,193,940
International Business Machines Corp.
Senior Notes
6.22% due 08/01/27......................... 375,000 480,590
----------
1,965,459
----------
COMPUTERS -- 0.2%
Hewlett-Packard Co.
Senior Notes
3.00% due 09/15/16......................... 598,000 602,987
Hewlett-Packard Co.
Senior Notes
6.00% due 09/15/41......................... 552,000 582,211
----------
1,185,198
----------
CONSULTING SERVICES -- 0.2%
FTI Consulting, Inc.
Company Guar. Notes
6.75% due 10/01/20......................... 1,450,000 1,399,250
----------
CONSUMER PRODUCTS-MISC. -- 0.4%
American Achievement Corp.
Sec. Notes
10.88% due 04/15/16*....................... 970,000 737,200
Reynolds Group Issuer, Inc./Reynolds Group
Issuer LLC
Senior Sec. Notes
7.88% due 08/15/19*........................ 1,310,000 1,264,150
----------
2,001,350
----------
CONTAINERS-METAL/GLASS -- 0.4%
Ball Corp.
Company Guar. Notes
7.38% due 09/01/19......................... 200,000 211,000
Crown Americas LLC/Crown Americas Capital
Corp. III
Senior Notes
6.25% due 02/01/21*........................ 950,000 950,000
27
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
CONTAINERS-METAL/GLASS (CONTINUED)
Crown Cork & Seal Co., Inc.
Senior Notes
7.38% due 12/15/26.................... $1,285,000 $1,272,150
----------
2,433,150
----------
CONTAINERS-PAPER/PLASTIC -- 0.5%
Graphic Packaging International, Inc.
Company Guar. Notes
9.50% due 06/15/17.................... 750,000 802,500
Packaging Dynamics Corp.
Senior Sec. Notes
8.75% due 02/01/16*................... 1,475,000 1,445,500
Sealed Air Corp.
Senior Notes
8.13% due 09/15/19*................... 645,000 651,450
----------
2,899,450
----------
COSMETICS & TOILETRIES -- 0.1%
Revlon Consumer Products Corp.
Sec. Notes
9.75% due 11/15/15.................... 800,000 838,000
----------
DATA PROCESSING/MANAGEMENT -- 0.2%
Audatex North America, Inc.
Company Guar. Notes
6.75% due 06/15/18*................... 1,120,000 1,111,600
----------
DECISION SUPPORT SOFTWARE -- 0.4%
PGS Solutions
Company Guar. Notes
9.63% due 02/15/15.................... 2,197,000 2,290,372
----------
DIALYSIS CENTERS -- 0.2%
DaVita, Inc.
Company Guar. Notes
6.63% due 11/01/20.................... 1,050,000 1,008,000
----------
DISTRIBUTION/WHOLESALE -- 0.2%
McJunkin Red Man Corp.
Senior Sec. Notes
9.50% due 12/15/16.................... 1,325,000 1,212,375
----------
DIVERSIFIED BANKING INSTITUTIONS -- 1.6%
BAC Capital Trust XV FRS
Limited Guar. Notes
1.13% due 06/01/56.................... 250,000 133,970
Bank of America Corp. FRS
Senior Notes
1.80% due 07/11/14.................... 408,000 363,135
Bank of America Corp.
Senior Notes
3.75% due 07/12/16.................... 100,000 90,981
Bank of America Corp.
Senior Notes
5.00% due 05/13/21.................... 430,000 383,626
Bank of America Corp.
Sub. Notes
5.42% due 03/15/17.................... 360,000 312,755
Bank of America Corp. FRS
Jr. Sub. Notes
8.13% due 05/15/18(5)................. 1,305,000 1,109,446
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
DIVERSIFIED BANKING INSTITUTIONS (CONTINUED)
Citigroup, Inc.
Sub. Notes
4.88% due 05/07/15........................ $ 356,000 $ 355,718
Citigroup, Inc.
Sub. Notes
5.50% due 02/15/17........................ 810,000 806,306
Citigroup, Inc.
Senior Notes
6.00% due 08/15/17........................ 112,000 118,858
GMAC LLC
Sub. Notes
8.00% due 12/31/18........................ 1,825,000 1,660,750
Goldman Sachs Group, Inc.
Sub. Notes
5.63% due 01/15/17........................ 116,000 112,528
Goldman Sachs Group, Inc.
Senior Notes
5.95% due 01/18/18........................ 221,000 227,527
Goldman Sachs Group, Inc.
Sub. Notes
6.75% due 10/01/37........................ 419,000 383,277
JPMorgan Chase & Co. FRS
Sub. Notes
1.53% due 09/01/15........................ 451,000 438,261
JPMorgan Chase & Co.
Senior Notes
3.45% due 03/01/16........................ 235,000 235,969
JPMorgan Chase & Co.
Sub. Notes
6.13% due 06/27/17........................ 445,000 486,565
JPMorgan Chase & Co. FRS
Jr. Sub Notes
7.90% due 04/29/49(5)..................... 200,000 206,002
JPMorgan Chase Capital XXIII FRS
Limited Guar. Bonds
1.29% due 05/15/77........................ 105,000 70,506
Morgan Stanley
Senior Notes
5.55% due 04/27/17........................ 386,000 371,737
Morgan Stanley
Senior Notes
5.63% due 09/23/19........................ 272,000 255,155
Morgan Stanley
Senior Notes
6.63% due 04/01/18........................ 471,000 467,261
Nationsbank Corp.
Sub. Notes
7.25% due 10/15/25........................ 117,000 112,837
----------
8,703,170
----------
DIVERSIFIED FINANCIAL SERVICES -- 0.5%
General Electric Capital Corp.
Senior Notes
4.38% due 09/16/20........................ 335,000 340,880
General Electric Capital Corp.
Senior Notes
5.88% due 01/14/38........................ 504,000 516,583
28
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
General Electric Capital Corp.
Senior Notes
6.75% due 03/15/32............................. $1,609,000 $1,836,788
----------
2,694,251
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.6%
3M Co.
Senior Notes
1.38% due 09/29/16............................. 715,000 711,133
Exelis, Inc.
Company Guar. Notes
5.55% due 10/01/21*............................ 508,000 516,573
General Electric Co.
Senior Notes
5.25% due 12/06/17............................. 190,000 211,102
Harland Clarke Holdings Corp.
Company Guar. Notes
9.50% due 05/15/15............................. 850,000 629,000
Harsco Corp.
Senior Notes
2.70% due 10/15/15............................. 436,000 443,547
Pentair, Inc.
Company Guar. Notes
5.00% due 05/15/21............................. 265,000 276,747
Textron, Inc.
Senior Notes
4.63% due 09/21/16............................. 448,000 453,477
----------
3,241,579
----------
E-COMMERCE/SERVICES -- 0.1%
Expedia, Inc.
Company Guar. Notes
8.50% due 07/01/16............................. 265,000 290,931
----------
ELECTRIC-DISTRIBUTION -- 0.1%
Oglethorpe Power Corp.
1/st/. Mtg. Notes
5.38% due 11/01/40............................. 530,000 601,028
----------
ELECTRIC-GENERATION -- 0.6%
AES Corp.
Senior Notes
8.00% due 10/15/17............................. 1,595,000 1,602,975
Edison Mission Energy
Senior Notes
7.63% due 05/15/27............................. 1,475,000 811,250
Homer City Funding LLC
Senior Sec. Notes
8.14% due 10/01/19............................. 397,440 333,850
Midwest Generation LLC
Pass Through Certs., Series B
8.56% due 01/02/16............................. 324,813 319,941
Reliant Energy Mid-Atlantic Power Holdings LLC
Pass Through Certs., Series B
9.24% due 07/02/17............................. 421,927 430,366
----------
3,498,382
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------
ELECTRIC-INTEGRATED -- 1.3%
Arizona Public Service Co.
Senior Notes
5.05% due 09/01/41.............. $ 152,000 $ 165,660
Cleco Power LLC
Senior Notes
6.00% due 12/01/40.............. 224,000 265,936
CMS Energy Corp.
Senior Notes
2.75% due 05/15/14.............. 382,000 373,950
CMS Energy Corp.
Senior Notes
6.25% due 02/01/20.............. 1,018,000 1,049,358
Dominion Resources, Inc.
Senior Notes
5.25% due 08/01/33.............. 525,000 595,804
Duquesne Light Holdings, Inc.
Senior Notes
5.90% due 12/01/21*............. 237,000 240,159
Entergy Mississippi, Inc.
1/st/ Mtg. Notes
3.25% due 06/01/16.............. 108,000 111,710
Exelon Corp.
Senior Notes
5.63% due 06/15/35.............. 225,000 234,782
Georgia Power Co.
Senior Notes
3.00% due 04/15/16.............. 180,000 188,567
Great Plains Energy, Inc.
Senior Notes
4.85% due 06/01/21.............. 162,000 170,567
Kansas City Power & Light Co.
Senior Notes
5.30% due 10/01/41.............. 391,000 399,891
Mirant Mid-Atlantic LLC
Pass Through Certs., Series B
9.13% due 06/30/17.............. 463,260 472,526
Oncor Electric Delivery Co. LLC
Senior Sec. Notes
7.00% due 09/01/22.............. 430,000 541,871
Pacific Gas & Electric Co.
Senior Notes
6.05% due 03/01/34.............. 294,000 350,897
PPL Electric Utilities Corp.
1/st/ Mtg. Notes
5.20% due 07/15/41.............. 65,000 76,601
PSEG Power LLC
Company Guar. Notes
4.15% due 09/15/21.............. 356,000 356,629
Puget Energy, Inc.
Senior Sec. Notes
6.00% due 09/01/21.............. 504,000 499,892
SCANA Corp.
Senior Notes
4.75% due 05/15/21.............. 261,000 274,820
Southern Energy, Inc.
Escrow Notes
7.90% due 07/15/09(3)(4)+....... 1,550,000 0
29
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
ELECTRIC-INTEGRATED (CONTINUED)
Texas Competitive Electric Holdings Co. LLC/
TCEH Finance, Inc.
Senior Sec. Notes
11.50% due 10/01/20*........................... $1,270,000 $1,016,000
----------
7,385,620
----------
ELECTRONIC COMPONENTS-MISC. -- 0.1%
Jabil Circuit, Inc.
Senior Notes
5.63% due 12/15/20............................. 370,000 360,750
----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.2%
Freescale Semiconductor, Inc.
Senior Sec. Notes
9.25% due 04/15/18*............................ 725,000 744,938
National Semiconductor Corp.
Senior Notes
6.60% due 06/15/17............................. 262,000 312,564
----------
1,057,502
----------
ELECTRONICS-MILITARY -- 0.1%
L-3 Communications Corp.
Company Guar. Notes
4.75% due 07/15/20............................. 378,000 391,199
----------
FINANCE-AUTO LOANS -- 0.6%
Ford Motor Credit Co. LLC
Senior Notes
5.00% due 05/15/18............................. 641,000 619,152
Ford Motor Credit Co. LLC
Senior Notes
5.88% due 08/02/21............................. 1,723,000 1,713,839
General Motors Financial Co., Inc.
Company Guar. Notes
6.75% due 06/01/18*............................ 1,100,000 1,078,000
----------
3,410,991
----------
FINANCE-COMMERCIAL -- 0.1%
Textron Financial Corp.
Senior Notes
5.40% due 04/28/13............................. 377,000 386,827
----------
FINANCE-CREDIT CARD -- 0.0%
Capital One Capital III Ltd.
Guar. Bonds
7.69% due 08/15/36............................. 132,000 129,030
----------
FINANCE-INVESTMENT BANKER/BROKER -- 0.5%
GFI Group, Inc.
Senior Notes
8.38% due 07/19/18*............................ 351,000 326,430
Jefferies Group, Inc.
Senior Notes
5.13% due 04/13/18............................. 439,000 411,125
Lehman Brothers Holdings Capital Trust VII FRS
Limited Guar. Notes
5.86% due 05/31/12(5)(9)(10)+.................. 222,000 22
Lehman Brothers Holdings, Inc.
Sub. Notes
6.75% due 12/28/17(9)(10)+..................... 280,000 140
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------------
FINANCE-INVESTMENT BANKER/BROKER (CONTINUED)
Lehman Brothers Holdings, Inc.
Sub. Notes
7.50% due 05/11/38(9)(10)+.................... $ 361,000 $ 181
Merrill Lynch & Co., Inc.
Sub. Notes
6.05% due 05/16/16............................ 400,000 359,974
Merrill Lynch & Co., Inc.
Sub. Notes
7.75% due 05/14/38............................ 134,000 124,507
MF Global Holdings, Ltd.
Senior Notes
6.25% due 08/08/16............................ 225,000 214,127
Oppenheimer Holdings, Inc.
Senior Sec. Notes
8.75% due 04/15/18............................ 1,075,000 1,048,125
Scottrade Financial Services, Inc.
Senior Notes
6.13% due 07/11/21*........................... 423,000 440,158
----------
2,924,789
----------
FINANCE-LEASING COMPANIES -- 0.1%
Boeing Capital Corp.
Senior Notes
2.13% due 08/15/16............................ 154,000 155,829
Boeing Capital Corp.
Senior Notes
2.90% due 08/15/18............................ 183,000 189,060
----------
344,889
----------
FINANCE-OTHER SERVICES -- 0.3%
SquareTwo Financial Corp.
Sec. Notes
11.63% due 04/01/17........................... 1,509,000 1,433,550
----------
FINANCIAL GUARANTEE INSURANCE -- 0.4%
Assured Guaranty Municipal Holdings, Inc. FRS
Company Guar. Notes
6.40% due 12/15/66*........................... 3,135,000 2,257,200
----------
FIREARMS & AMMUNITION -- 0.2%
FGI Operating Co, Inc.
Senior Sec. Notes
10.25% due 08/01/15........................... 1,192,000 1,239,680
----------
FOOD-CANNED -- 0.2%
Blue Merger Sub, Inc.
Company Guar. Notes
7.63% due 02/15/19*........................... 1,375,000 1,161,875
----------
FOOD-MISC. -- 0.2%
Kraft Foods, Inc.
Senior Notes
6.50% due 02/09/40............................ 903,000 1,103,844
----------
FOOD-RETAIL -- 0.2%
Ahold Finance USA LLC
Company Guar. Notes
6.88% due 05/01/29............................ 226,000 289,091
Ingles Markets, Inc.
Senior Notes
8.88% due 05/15/17............................ 740,000 775,150
----------
1,064,241
----------
30
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
FUNERAL SERVICES & RELATED ITEMS -- 0.2%
Carriage Services, Inc.
Company Guar. Notes
7.88% due 01/15/15...................... $1,225,000 $1,200,500
----------
GAMBLING (NON-HOTEL) -- 0.1%
Waterford Gaming LLC
Senior Notes
8.63% due 09/15/14*..................... 1,050,774 525,387
----------
GAS-DISTRIBUTION -- 0.1%
Southern Union Co.
Senior Notes
7.60% due 02/01/24...................... 240,000 283,985
----------
GAS-TRANSPORTATION -- 0.2%
Sabine Pass LNG LP
Senior Sec. Notes
7.25% due 11/30/13...................... 950,000 919,125
----------
HOME FURNISHINGS -- 0.1%
Norcraft Cos. LP/Norcraft Finance Corp.
Sec. Notes
10.50% due 12/15/15..................... 808,000 737,300
----------
INDEPENDENT POWER PRODUCERS -- 0.8%
Calpine Corp.
Senior Sec. Notes
7.88% due 07/31/20*..................... 1,280,000 1,235,200
Calpine Corp.
Escrow Notes
8.75% due 07/15/13(3)(4)+............... 4,203,000 0
GenOn Energy, Inc.
Senior Notes
9.50% due 10/15/18...................... 1,450,000 1,363,000
NGC Corp. Capital Trust I
Company Guar. Notes
8.32% due 06/01/27(22)(23).............. 1,090,000 392,400
NRG Energy, Inc.
Company Guar. Notes
7.63% due 01/15/18*..................... 575,000 534,750
NRG Energy, Inc.
Company Guar. Notes
8.25% due 09/01/20...................... 1,175,000 1,110,375
----------
4,635,725
----------
INSURANCE-LIFE/HEALTH -- 0.3%
Jefferson-Pilot Corp.
Senior Notes
4.75% due 01/30/14...................... 227,000 239,200
Nationwide Financial Services, Inc.
Senior Notes
5.90% due 07/01/12...................... 284,000 289,369
Protective Life Corp.
Senior Notes
8.45% due 10/15/39...................... 540,000 623,725
Prudential Financial, Inc.
Senior Notes
4.50% due 11/15/20...................... 370,000 367,581
Prudential Financial, Inc.
Senior Notes
4.75% due 09/17/15...................... 409,000 426,964
----------
1,946,839
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
INSURANCE-MULTI-LINE -- 0.4%
Genworth Financial, Inc.
Senior Notes
7.63% due 09/24/21.......................... $ 216,000 $ 186,154
Hartford Financial Services Group, Inc. FRS
Jr. Sub. Debentures
8.13% due 06/15/68.......................... 2,075,000 1,950,500
----------
2,136,654
----------
INSURANCE-MUTUAL -- 0.2%
Liberty Mutual Group, Inc.
Senior Notes
5.75% due 03/15/14*......................... 195,000 203,149
Liberty Mutual Group, Inc. FRS
Company Guar. Notes
10.75% due 06/15/88*........................ 990,000 1,178,100
----------
1,381,249
----------
INVESTMENT COMPANIES -- 0.1%
Fox Acquisition Sub LLC
Senior Notes
13.38% due 07/15/16*........................ 672,000 705,600
----------
MARINE SERVICES -- 0.3%
Great Lakes Dredge & Dock Corp.
Company Guar. Notes
7.38% due 02/01/19.......................... 1,851,000 1,702,920
----------
MEDICAL INSTRUMENTS -- 0.4%
Accellent, Inc.
Senior Sec. Notes
8.38% due 02/01/17.......................... 1,790,000 1,704,975
Boston Scientific Corp.
Senior Notes
6.00% due 01/15/20.......................... 456,000 511,232
----------
2,216,207
----------
MEDICAL PRODUCTS -- 0.5%
Becton Dickinson and Co.
Senior Notes
7.00% due 08/01/27.......................... 295,000 395,085
Johnson & Johnson
Notes
5.55% due 08/15/17.......................... 405,000 487,163
LVB Acquisition Holding LLC
Company Guar. Notes
10.00% due 10/15/17......................... 998,000 1,027,940
Universal Hospital Services, Inc.
Sec. Notes
8.50% due 06/01/15(6)....................... 775,000 754,657
----------
2,664,845
----------
MEDICAL-BIOMEDICAL/GENE -- 0.3%
Bio-Rad Laboratories, Inc.
Senior Sub. Notes
8.00% due 09/15/16.......................... 1,140,000 1,231,200
Genzyme Corp.
Company Guar. Notes
3.63% due 06/15/15.......................... 240,000 256,667
----------
1,487,867
----------
31
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
MEDICAL-DRUGS -- 0.3%
Endo Pharmaceuticals Holdings, Inc.
Company Guar. Notes
7.00% due 07/15/19*...................... $1,460,000 $1,465,475
----------
MEDICAL-HMO -- 0.1%
Coventry Health Care, Inc.
Senior Notes
5.45% due 06/15/21....................... 286,000 308,814
----------
MEDICAL-HOSPITALS -- 1.1%
Capella Healthcare, Inc.
Company Guar. Notes
9.25% due 07/01/17*...................... 925,000 878,750
HCA, Inc.
Senior Notes
7.50% due 11/15/95....................... 1,975,000 1,481,250
HCA, Inc.
Senior Sec. Notes
8.50% due 04/15/19....................... 1,125,000 1,192,500
IASIS Healthcare LLC/IASIS Capital Corp.
Senior Notes
8.38% due 05/15/19*...................... 800,000 648,000
Select Medical Corp.
Company Guar. Notes
7.63% due 02/01/15....................... 803,000 695,599
Tenet Healthcare Corp.
Senior Sec. Notes
10.00% due 05/01/18...................... 1,118,000 1,210,235
----------
6,106,334
----------
METAL-ALUMINUM -- 0.1%
Alcoa, Inc.
Senior Notes
5.90% due 02/01/27....................... 244,000 241,553
Alcoa, Inc.
Senior Notes
6.15% due 08/15/20....................... 343,000 347,452
----------
589,005
----------
METAL-COPPER -- 0.1%
Freeport-McMoRan Copper & Gold, Inc.
Senior Notes
8.38% due 04/01/17....................... 275,000 294,938
----------
METAL-IRON -- 0.1%
Cliffs Natural Resources, Inc.
Senior Notes
4.80% due 10/01/20....................... 294,000 286,091
----------
MOTION PICTURES & SERVICES -- 0.1%
NAI Entertainment Holdings LLC
Senior Sec. Notes
8.25% due 12/15/17*...................... 500,000 515,000
----------
MRI/MEDICAL DIAGNOSTIC IMAGING -- 0.2%
Radnet Management, Inc.
Company Guar. Notes
10.38% due 04/01/18...................... 1,370,000 1,267,250
----------
MULTIMEDIA -- 0.1%
Haights Cross Operating Co. FRS
Limited Guar. Notes
16.00% due 03/15/14(3)(4)(9)+............ 461,095 57,637
News America, Inc.
Company Guar. Notes
6.20% due 12/15/34....................... 256,000 274,050
----------
331,687
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
MUSIC -- 0.3%
WMG Acquisition Corp.
Senior Sec. Notes
9.50% due 06/15/16.......................... $1,425,000 $1,442,812
----------
NON-FERROUS METALS -- 0.0%
Renco Metals, Inc.
Company Guar. Notes
11.50% due 07/01/03+(3)(4)(8)............... 500,000 0
----------
NON-HAZARDOUS WASTE DISPOSAL -- 0.3%
Casella Waste Systems, Inc.
Senior Sec. Notes
11.00% due 07/15/14......................... 700,000 742,000
Republic Services, Inc.
Company Guar. Notes
3.80% due 05/15/18.......................... 477,000 495,997
Republic Services, Inc.
Company Guar. Notes
5.70% due 05/15/41.......................... 97,000 109,881
Republic Services, Inc.
Company Guar. Notes
6.20% due 03/01/40.......................... 259,000 311,232
Waste Management, Inc.
Company Guar. Notes
2.60% due 09/01/16.......................... 221,000 221,524
----------
1,880,634
----------
OFFICE AUTOMATION & EQUIPMENT -- 0.1%
CDW LLC/CDW
Finance Corp.
Company Guar. Notes
11.00% due 10/12/15......................... 46,000 45,885
Xerox Corp.
Senior Notes
4.50% due 05/15/21.......................... 324,000 324,037
----------
369,922
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 3.2%
Alta Mesa Holdings/Alta Mesa Finance
Services Corp.
Company Guar. Notes
9.63% due 10/15/18.......................... 1,010,000 919,100
Anadarko Petroleum Corp.
Senior Notes
5.95% due 09/15/16.......................... 850,000 929,729
Anadarko Petroleum Corp.
Senior Notes
6.45% due 09/15/36.......................... 299,000 316,279
Bill Barrett Corp.
Company Guar. Notes
7.63% due 10/01/19.......................... 750,000 736,875
Carrizo Oil & Gas, Inc.
Company Guar. Notes
8.63% due 10/15/18.......................... 975,000 955,500
Chaparral Energy, Inc.
Company Guar. Notes
8.25% due 09/01/21.......................... 1,180,000 1,076,750
Chesapeake Energy Corp.
Company Guar. Notes
6.63% due 08/15/20.......................... 1,652,000 1,701,560
Chesapeake Energy Corp.
Company Guar. Notes
6.88% due 08/15/18.......................... 140,000 144,200
32
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
OIL COMPANIES-EXPLORATION & PRODUCTION (CONTINUED)
Denbury Resources, Inc.
Company Guar. Notes
6.38% due 08/15/21............................ $ 516,000 $ 500,520
Encore Acquisition Co.
Company Guar. Notes
9.50% due 05/01/16............................ 720,000 777,600
EV Energy Partners LP/EV Energy Finance Corp.
Company Guar. Notes
8.00% due 04/15/19*........................... 1,310,000 1,264,150
Hilcorp Energy I LP/Hilcorp Finance Co.
Senior Notes
7.63% due 04/15/21*........................... 550,000 552,750
Hilcorp Energy I LP/Hilcorp Finance Co.
Senior Notes
7.75% due 11/01/15*........................... 995,000 1,002,462
Linn Energy LLC/Linn Energy Finance Corp.
Company Guar. Notes
8.63% due 04/15/20............................ 1,500,000 1,545,000
Milagro Oil & Gas
Sec. Notes
10.50% due 05/15/16*.......................... 1,534,000 1,227,200
Noble Energy, Inc.
Senior Notes
6.00% due 03/01/41............................ 357,000 398,602
Pioneer Natural Resources Co.
Senior Notes
7.50% due 01/15/20............................ 540,000 606,132
Plains Exploration & Production Co.
Company Guar. Notes
10.00% due 03/01/16........................... 600,000 651,000
QEP Resources, Inc.
Senior Notes
6.88% due 03/01/21............................ 1,039,000 1,085,755
SandRidge Energy, Inc.
Company Guar. Notes
7.50% due 03/15/21*........................... 645,000 593,400
Union Pacific Resources Group, Inc.
Senior Notes
7.15% due 05/15/28............................ 518,000 584,743
-----------
17,569,307
-----------
OIL COMPANIES-INTEGRATED -- 0.2%
Hess Corp.
Senior Notes
5.60% due 02/15/41............................ 178,000 192,031
Hess Corp.
Senior Notes
7.88% due 10/01/29............................ 757,000 1,018,698
-----------
1,210,729
-----------
OIL FIELD MACHINERY & EQUIPMENT -- 0.1%
Dresser-Rand Group, Inc.
Company Guar. Notes
6.50% due 05/01/21*........................... 590,000 554,600
-----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
OIL REFINING & MARKETING -- 0.3%
Reliance Holdings USA, Inc.
Company Guar. Notes
4.50% due 10/19/20............................. $ 290,000 $ 266,099
Sunoco Logistics Partners Operations LP
Company Guar. Notes
4.65% due 02/15/22............................. 240,000 236,529
Western Refining, Inc.
Senior Sec. Notes
11.25% due 06/15/17*........................... 1,075,000 1,161,000
----------
1,663,628
----------
OIL-FIELD SERVICES -- 0.4%
Exterran Holdings, Inc.
Company Guar. Notes
7.25% due 12/01/18*............................ 745,000 715,200
Helix Energy Solutions Group, Inc.
Company Guar. Notes
9.50% due 01/15/16*............................ 605,000 614,075
Oil States International, Inc.
Company Guar. Notes
6.50% due 06/01/19*............................ 700,000 684,250
----------
2,013,525
----------
PAPER & RELATED PRODUCTS -- 0.6%
Georgia-Pacific LLC
Company Guar. Notes
8.25% due 05/01/16*............................ 612,000 676,468
Longview Fibre Paper & Packaging, Inc.
Senior Sec. Notes
8.00% due 06/01/16*............................ 1,516,000 1,470,520
Westvaco Corp.
Company Guar. Notes
8.20% due 01/15/30............................. 1,173,000 1,329,838
----------
3,476,826
----------
PIPELINES -- 1.5%
Copano Energy LLC/Copano Energy Finance Corp.
Company Guar. Notes
7.13% due 04/01/21............................. 335,000 327,462
Copano Energy LLC/Copano Energy Finance Corp.
Company Guar. Notes
7.75% due 06/01/18............................. 315,000 322,088
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/20............................. 1,225,000 1,258,687
Energy Transfer Partners LP
Senior Notes
6.05% due 06/01/41............................. 734,000 686,156
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
7.88% due 12/15/18*............................ 1,280,000 1,216,000
IFM US Colonial Pipeline 2 LLC
Senior Sec. Notes
6.45% due 05/01/21*............................ 550,000 617,709
Kinder Morgan Energy Partners LP
Senior Notes
6.38% due 03/01/41............................. 89,000 94,475
33
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
PIPELINES (CONTINUED)
Kinder Morgan Finance Co. LLC
Senior Sec. Notes
6.00% due 01/15/18*......................... $ 416,000 $ 410,800
MarkWest Energy Partners LP/MarkWest Energy
Finance Corp.
Company Guar. Notes
6.50% due 08/15/21.......................... 945,000 968,625
MarkWest Energy Partners LP/MarkWest Energy
Finance Corp.
Company Guar. Notes
6.75% due 11/01/20.......................... 390,000 395,850
MarkWest Energy Partners LP/MarkWest Energy
Finance Corp.
Company Guar. Notes
8.75% due 04/15/18.......................... 210,000 223,650
Plains All American Pipeline LP/PAA
Finance Corp.
Company Guar. Notes
6.50% due 05/01/18.......................... 328,000 377,667
Regency Energy Partners LP/Regency Energy
Finance Corp.
Company Guar. Notes
6.88% due 12/01/18.......................... 525,000 540,750
Southern Natural Gas Co./Southern Natural
Issuing Corp.
Senior Notes
4.40% due 06/15/21*......................... 220,000 222,076
Southern Star Central Corp.
Senior Notes
6.75% due 03/01/16.......................... 650,000 643,500
----------
8,305,495
----------
PRINTING-COMMERCIAL -- 0.1%
Valassis Communications, Inc.
Company Guar. Notes
6.63% due 02/01/21.......................... 875,000 818,125
----------
PRIVATE CORRECTIONS -- 0.2%
Geo Group, Inc.
Company Guar. Notes
6.63% due 02/15/21.......................... 1,000,000 960,000
----------
PUBLISHING-NEWSPAPERS -- 0.2%
McClatchy Co.
Senior Sec. Notes
11.50% due 02/15/17......................... 1,520,000 1,318,600
----------
REAL ESTATE INVESTMENT TRUSTS -- 0.8%
BioMed Realty LP
Company Guar. Notes
3.85% due 04/15/16.......................... 281,000 275,414
Brandywine Operating Partnership LP
Company Guar. Notes
4.95% due 04/15/18.......................... 281,000 271,464
Brandywine Operating Partnership LP
Company Guar. Notes
5.70% due 05/01/17.......................... 669,000 677,938
DuPont Fabros Technology LP
Company Guar. Notes
8.50% due 12/15/17.......................... 1,125,000 1,164,375
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
HCP, Inc.
Senior Notes
3.75% due 02/01/16.............................. $ 200,000 $ 197,650
HCP, Inc.
Senior Notes
5.38% due 02/01/21.............................. 213,000 213,711
Kilroy Realty LP
Company Guar. Notes
4.80% due 07/15/18.............................. 180,000 173,643
Sabra Health Care LP/Sabra Capital Corp.
Company Guar. Notes
8.13% due 11/01/18.............................. 1,425,000 1,325,250
----------
4,299,445
----------
REAL ESTATE MANAGEMENT/SERVICES -- 0.3%
Kennedy-Wilson, Inc.
Company Guar. Notes
8.75% due 04/01/19*............................. 2,050,000 1,911,625
----------
REAL ESTATE OPERATIONS & DEVELOPMENT -- 0.3%
First Industrial LP
Senior Notes
5.75% due 01/15/16.............................. 1,535,000 1,504,834
----------
RECYCLING -- 0.0%
Aleris International, Inc.
Escrow Notes
9.00% due 12/15/14(3)(4)(9)(20)+................ 3,285,000 329
----------
RENTAL AUTO/EQUIPMENT -- 0.9%
Avis Budget Car Rental LLC/Avis Budget
Finance, Inc.
Company Guar. Notes
9.63% due 03/15/18.............................. 975,000 965,250
B-Corp Merger Sub, Inc.
Senior Notes
8.25% due 06/01/19*............................. 1,085,000 976,500
Hertz Corp.
Company Guar. Notes
7.50% due 10/15/18.............................. 1,000,000 955,000
RSC Equipment Rental, Inc./RSC Holdings III LLC
Company Guar. Notes
8.25% due 02/01/21.............................. 1,150,000 994,750
United Rentals North America, Inc.
Company Guar. Notes
8.38% due 09/15/20.............................. 950,000 871,625
----------
4,763,125
----------
RETAIL-APPAREL/SHOE -- 0.1%
Limited Brands, Inc.
Company Guar. Notes
6.63% due 04/01/21+............................. 550,000 554,125
----------
RETAIL-DISCOUNT -- 0.2%
Wal-Mart Stores, Inc.
Senior Notes
5.25% due 09/01/35.............................. 253,000 290,321
Wal-Mart Stores, Inc.
Senior Notes
5.63% due 04/15/41.............................. 558,000 687,457
----------
977,778
----------
34
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
RETAIL-DRUG STORE -- 0.3%
CVS Caremark Corp.
Senior Notes
6.25% due 06/01/27.................... $ 328,000 $ 399,463
CVS Pass-Through Trust
Pass Through Certs.
5.77% due 01/31/33*................... 247,148 256,920
Rite Aid Corp.
Senior Sec. Notes
8.00% due 08/15/20.................... 1,275,000 1,329,188
----------
1,985,571
----------
RETAIL-PROPANE DISTRIBUTION -- 0.2%
Inergy LP/Inergy Finance Corp.
Company Guar. Notes
6.88% due 08/01/21.................... 760,000 691,600
Inergy LP/Inergy Finance Corp.
Company Guar. Notes
7.00% due 10/01/18.................... 281,000 264,140
----------
955,740
----------
RETAIL-RESTAURANTS -- 0.3%
Dave & Buster's, Inc.
Company Guar. Notes
11.00% due 06/01/18................... 1,095,000 1,086,787
Landry's Restaurants, Inc.
Sec. Notes
11.63% due 12/01/15................... 575,000 577,875
----------
1,664,662
----------
RETAIL-TOY STORES -- 0.3%
Toys R Us Property Co. II LLC
Senior Sec. Notes
8.50% due 12/01/17.................... 1,625,000 1,584,375
----------
RUBBER/PLASTIC PRODUCTS -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/07+(3)(4)(8)(10)..... 100,000 0
----------
SEISMIC DATA COLLECTION -- 0.2%
Geokinetics Holdings USA, Inc.
Senior Sec. Notes
9.75% due 12/15/14.................... 1,115,000 878,062
----------
SPECIAL PURPOSE ENTITIES -- 0.1%
FUEL Trust
Sec. Notes
3.98% due 06/15/16*................... 377,000 369,136
FUEL Trust
Sec. Notes
4.21% due 04/15/16*................... 288,000 286,929
----------
656,065
----------
STEEL-PRODUCERS -- 0.5%
JMC Steel Group
Senior Notes
8.25% due 03/15/18*................... 975,000 916,500
Ryerson, Inc.
Senior Sec. Notes
12.00% due 11/01/15................... 1,042,000 1,042,000
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------
STEEL-PRODUCERS (CONTINUED)
Steel Dynamics, Inc.
Company Guar. Notes
7.75% due 04/15/16................. $1,035,000 $1,019,475
----------
2,977,975
----------
STORAGE/WAREHOUSING -- 0.1%
Mobile Mini, Inc.
Company Guar. Notes
7.88% due 12/01/20................. 651,000 624,960
----------
TELECOM SERVICES -- 0.4%
BellSouth Telecommunications, Inc.
Senior Notes
6.38% due 06/01/28................. 251,000 285,692
Cincinnati Bell Telephone Co. LLC
Company Guar. Notes
7.18% due 12/15/23................. 50,000 41,500
Cincinnati Bell Telephone Co. LLC
Company Guar. Notes
7.20% due 11/29/23................. 225,000 186,750
Cincinnati Bell Telephone Co. LLC
Company Guar. Notes
7.27% due 12/11/23................. 375,000 311,250
PAETEC Holding Corp.
Senior Sec. Notes
8.88% due 06/30/17................. 1,550,000 1,627,500
----------
2,452,692
----------
TELECOMMUNICATION EQUIPMENT -- 0.1%
Harris Corp.
Notes
4.40% due 12/15/20................. 363,000 386,187
----------
TELEPHONE-INTEGRATED -- 1.0%
AT&T, Inc.
Senior Notes
6.45% due 06/15/34................. 256,000 294,575
BellSouth Corp.
Senior Notes
6.55% due 06/15/34................. 224,000 259,710
Century Telephone Enterprise
Senior Notes
6.88% due 01/15/28................. 245,000 212,132
CenturyLink, Inc.
Senior Notes
6.45% due 06/15/21................. 903,000 836,734
CenturyLink, Inc.
Senior Notes
7.60% due 09/15/39................. 463,000 416,477
Cincinnati Bell, Inc.
Company Guar. Notes
8.25% due 10/15/17................. 423,000 410,310
Cincinnati Bell, Inc.
Company Guar. Notes
8.38% due 10/15/20................. 425,000 395,250
Frontier Communications Corp.
Senior Notes
8.13% due 10/01/18................. 2,300,000 2,254,000
35
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
TELEPHONE-INTEGRATED (CONTINUED)
Verizon Communications, Inc.
Senior Notes
1.95% due 03/28/14.................... $ 480,000 $ 491,287
------------
5,570,475
------------
TELEVISION -- 0.1%
Local TV Finance LLC
Senior Notes
9.25% due 06/15/15*(6)................ 681,081 626,595
------------
THEATERS -- 0.2%
Cinemark USA, Inc.
Company Guar. Notes
7.38% due 06/15/21.................... 945,000 893,025
------------
THERAPEUTICS -- 0.4%
Warner Chilcott Corp.
Company Guar. Notes
7.75% due 09/15/18.................... 2,080,000 1,986,400
------------
TRANSPORT-AIR FREIGHT -- 0.1%
Atlas Air, Inc.
Pass Through Certs.
Series 2000-1, Class B
9.06% due 07/02/17.................... 500,715 460,658
------------
TRANSPORT-RAIL -- 0.1%
Norfolk Southern Corp.
Senior Notes
6.00% due 05/23/11.................... 235,000 278,883
------------
TRANSPORT-SERVICES -- 0.2%
Bristow Group, Inc.
Company Guar. Notes
7.50% due 09/15/17.................... 699,000 719,970
Ryder System, Inc.
Senior Notes
3.15% due 03/02/15.................... 133,000 135,465
Ryder System, Inc.
Senior Notes
3.60% due 03/01/16.................... 137,000 142,968
------------
998,403
------------
WEB HOSTING/DESIGN -- 0.2%
Equinix, Inc.
Senior Notes
8.13% due 03/01/18.................... 1,150,000 1,210,375
------------
WIRE & CABLE PRODUCTS -- 0.1%
Coleman Cable, Inc.
Company Guar. Notes
9.00% due 02/15/18.................... 600,000 585,000
------------
WIRELESS EQUIPMENT -- 0.1%
American Tower Corp.
Senior Notes
4.50% due 01/15/18.................... 360,000 360,407
Motorola, Inc.
Senior Notes
6.63% due 11/15/37.................... 11,445 13,612
------------
374,019
------------
TOTAL U.S. CORPORATE BONDS & NOTES
(cost $260,318,328)................... 245,845,770
------------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES -- 8.8%
AIRLINES -- 0.0%
TAM Capital 3, Inc.
Company Guar. Notes
8.38% due 06/03/21*.................. $ 300,000 $ 276,000
----------
AUTO-CARS/LIGHT TRUCKS -- 0.2%
Jaguar Land Rover PLC
Company Guar. Notes
8.13% due 05/15/21*.................. 1,550,000 1,364,000
----------
BANKS-COMMERCIAL -- 1.2%
Banco ABC Brasil SA
Sub. Notes
7.88% due 04/08/20*.................. 500,000 462,500
Banco Cruzeiro do Sul SA
Sub. Notes
8.88% due 09/22/20*.................. 500,000 414,835
Banco de Galicia y Buenos Aires
Senior Notes
8.75% due 05/04/18*.................. 370,000 340,400
Banco do Brasil SA
Sub. Notes
5.88% due 01/26/22*.................. 440,000 419,100
Barclays Bank PLC
Sub. Notes
6.05% due 12/04/17*.................. 185,000 169,809
Barclays Bank PLC FRS
Jr. Sub. Bonds
5.93% due 12/15/16*(5)............... 396,000 293,040
Barclays Bank PLC FRS
Jr. Sub. Notes
6.86% due 06/15/32*(5)............... 205,000 147,600
Dresdner Bank AG
Sub. Notes
7.25% due 09/15/15................... 319,000 298,302
Finansbank AS
Senior Notes
5.50% due 05/11/16*.................. 425,000 365,500
Groupe BPCE SA FRS
Jr. Sub Notes
2.33% due 12/30/11(5)................ 141,000 59,926
LBG Capital No.1 PLC FRS
Bank Guar. Notes
8.00% due 06/15/20*(5)............... 2,400,000 1,584,000
Nordea Bank AB VRS
Jr. Sub. Bonds
8.38% due 03/25/15(5)................ 184,000 184,920
Rabobank Nederland NV
Company Guar. Notes
2.13% due 10/13/15................... 326,000 325,254
Standard Chartered PLC
Senior Notes
3.20% due 05/12/16*.................. 401,000 391,932
Toronto-Dominion Bank
Senior Notes
2.50% due 07/14/16................... 378,000 387,987
Westpac Banking Corp. FRS
Jr. Sub. Notes
0.65% due 03/30/12(5)................ 1,050,000 609,000
----------
6,454,105
----------
36
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
BANKS-MONEY CENTER -- 0.1%
ABN Amro Bank NV FRS
Senior Notes
2.02% due 01/30/14*....................... $ 105,000 $ 100,036
ABN Amro Bank NV
Senior Notes
3.00% due 01/31/14*....................... 152,000 149,591
Lloyds TSB Bank PLC
Company Guar. Notes
6.50% due 09/14/20*....................... 205,000 174,204
----------
423,831
----------
BANKS-MORTGAGE -- 0.1%
Alfa Bank OJSC Via Alfa Bond Issuance PLC
Senior Sec. Notes
7.88% due 09/25/17*....................... 400,000 356,347
----------
BANKS-SPECIAL PURPOSE -- 0.4%
Export-Import Bank of Korea
Senior Notes
3.75% due 10/20/16........................ 527,000 514,026
Kreditanstalt fuer Wiederaufbau
Government Guar. Notes
3.75% due 09/25/15........................ NOK 10,500,000 1,857,339
----------
2,371,365
----------
BUILDING & CONSTRUCTION PRODUCTS-MISC. -- 0.2%
Corp GEO SAB de CV
Company Guar. Notes
9.25% due 06/30/20*....................... 470,000 418,300
Desarrolladora Homex SAB de CV
Company Guar. Notes
9.50% due 12/11/19*....................... 450,000 414,000
Urbi Desarrollos Urbanos SAB de CV
Company Guar. Notes
9.50% due 01/21/20*....................... 550,000 522,500
----------
1,354,800
----------
BUILDING PRODUCTS-CEMENT -- 0.1%
Rearden G Holdings EINS GmbH
Company Guar. Notes
7.88% due 03/30/20*....................... 380,000 368,600
----------
BUILDING-HEAVY CONSTRUCTION -- 0.1%
Empresas ICA SAB de CV
Company Guar. Notes
8.90% due 02/04/21*....................... 350,000 308,000
----------
CELLULAR TELECOM -- 0.4%
America Movil SAB de CV
Company Guar. Notes
6.13% due 03/30/40........................ 278,000 289,120
Vimpel Communications Via VIP Finance
Ireland, Ltd. OJSC
Sec. Notes
7.75% due 02/02/21*....................... 2,150,000 1,787,080
----------
2,076,200
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
CHEMICALS-DIVERSIFIED -- 0.3%
Fufeng Group, Ltd.
Company Guar. Notes
7.63% due 04/13/16*................... $ 275,000 $ 192,500
OXEA Finance/Cy SCA
Senior Sec. Notes
9.50% due 07/15/17*................... 1,310,000 1,267,425
----------
1,459,925
----------
CHEMICALS-PLASTICS -- 0.3%
Montell Finance Co. BV
Company Guar. Notes
8.10% due 03/15/27*................... 1,325,000 1,444,250
----------
COMPUTERS-MEMORY DEVICES -- 0.2%
Seagate HDD Cayman
Company Guar. Notes
7.75% due 12/15/18*................... 1,425,000 1,396,500
----------
DIVERSIFIED BANKING INSTITUTIONS -- 0.2%
Royal Bank of Scotland Group PLC
Sub. Notes
5.00% due 10/01/14.................... 341,000 317,529
Royal Bank of Scotland Group PLC FRS
Jr. Sub. Notes
7.65% due 09/30/31(5)................. 1,575,000 1,023,750
----------
1,341,279
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.1%
Bombardier, Inc.
Senior Notes
7.50% due 03/15/18*................... 425,000 448,375
----------
DIVERSIFIED MINERALS -- 0.1%
BHP Billiton Finance USA, Ltd.
Company Guar. Notes
6.42% due 03/01/26.................... 263,000 323,103
----------
DIVERSIFIED OPERATIONS -- 0.2%
Metalloinvest Finance, Ltd.
Company Guar. Notes
6.50% due 07/21/16*................... 400,000 340,000
Votorantim Cimentos SA
Company Guar. Notes
7.25% due 04/05/41*................... 625,000 584,375
----------
924,375
----------
ELECTRIC-GENERATION -- 0.2%
AES Andres Dominicana, Ltd./Itabo
Dominicana, Ltd.
Senior Sec. Notes
9.50% due 11/12/20*................... 300,000 297,000
Emgesa SA ESP
Senior Notes
8.75% due 01/25/21*................... COP 1,378,000,000 728,412
----------
1,025,412
----------
FINANCE-OTHER SERVICES -- 0.3%
DTEK Finance BV
Company Guar. Notes
9.50% due 04/28/15.................... 410,000 369,000
37
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
FINANCE-OTHER SERVICES (CONTINUED)
UPCB Finance III, Ltd.
Senior Sec. Notes
6.63% due 07/01/20*.................. $1,425,000 $1,339,500
----------
1,708,500
----------
GOLD MINING -- 0.2%
AngloGold Ashanti Holdings PLC
Company Guar. Notes
5.38% due 04/15/20................... 389,000 381,112
Gold Fields Orogen Holding BVI, Ltd.
Company Guar. Notes
4.88% due 10/07/20*.................. 350,000 322,235
Kinross Gold Corp.
Company Guar. Notes
6.88% due 09/01/41*.................. 381,000 407,595
----------
1,110,942
----------
IMPORT/EXPORT -- 0.1%
Marfrig Overseas, Ltd.
Company Guar. Notes
9.50% due 05/04/20*.................. 480,000 307,200
Minerva Overseas II, Ltd.
Company Guar. Notes
10.88% due 11/15/19.................. 400,000 316,000
----------
623,200
----------
INDEPENDENT POWER PRODUCERS -- 0.0%
AES Drax Energy, Ltd.
Sec. Notes
11.50% due 08/30/10(3)(4)(7)(8)+..... 725,000 0
----------
INSURANCE-MULTI-LINE -- 0.4%
Aegon NV FRS
Jr. Sub. Notes
3.17% due 01/15/12(5)................ 111,000 51,709
Catlin Insurance Co., Ltd. FRS
Jr. Sub. Notes
7.25% due 01/19/12*(5)............... 997,000 857,420
XL Group PLC
Senior Notes
5.25% due 09/15/14................... 488,000 508,105
XL Group PLC
Senior Notes
6.38% due 11/15/24................... 318,000 335,778
XL Group, Ltd.
Company Guar. Notes
5.75% due 10/01/21................... 637,000 635,175
----------
2,388,187
----------
INSURANCE-REINSURANCE -- 0.0%
Validus Holdings, Ltd.
Senior Notes
8.88% due 01/26/40................... 229,000 254,064
----------
MEDICAL-DRUGS -- 0.1%
Hypermarcas SA
Senior Sec. Notes
6.50% due 04/20/21*.................. 310,000 282,100
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
METAL-DIVERSIFIED -- 0.1%
Vedanta Resources PLC
Senior Notes
8.25% due 06/07/21*......................... $425,000 $ 327,250
Vedanta Resources PLC
Senior Notes
8.25% due 06/07/21.......................... 235,000 180,950
----------
508,200
----------
MUNICIPAL BONDS -- 0.1%
City of Kyiv Via Kyiv Finance PLC
Senior Notes
9.38% due 07/11/16*......................... 870,000 836,749
----------
OIL & GAS DRILLING -- 0.1%
Ensco PLC
Senior Notes
4.70% due 03/15/21.......................... 302,000 307,809
Transocean, Inc.
Company Guar. Notes
6.00% due 03/15/18.......................... 280,000 298,140
----------
605,949
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.3%
KazMunayGas National Co.
Senior Notes
6.38% due 04/09/21*......................... 540,000 526,500
MIE Holdings Corp.
Senior Notes
9.75% due 05/12/16.......................... 342,000 263,340
Nexen, Inc.
Bonds
6.40% due 05/15/37.......................... 138,000 140,438
Nexen, Inc.
Senior Notes
7.50% due 07/30/39.......................... 303,000 354,870
QGOG Atlantic/Alaskan Rigs, Ltd.
Senior Sec. Notes
5.25% due 07/30/18*......................... 425,000 382,500
----------
1,667,648
----------
OIL COMPANIES-INTEGRATED -- 0.5%
BP Capital Markets PLC
Company Guar. Notes
3.13% due 10/01/15.......................... 451,000 466,009
BP Capital Markets PLC
Company Guar. Notes
3.88% due 03/10/15.......................... 403,000 427,267
Norsk Hydro A/S
Company Guar. Notes
7.15% due 11/15/25.......................... 290,000 387,461
Petroleos de Venezuela SA
Company Guar. Notes
5.38% due 04/12/27.......................... 350,000 160,125
Petroleos de Venezuela SA
Company Guar. Notes
8.50% due 11/02/17.......................... 950,000 624,625
Petroleos de Venezuela SA
Company Guar. Notes
12.75% due 02/17/22......................... 310,000 226,300
38
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
OIL COMPANIES-INTEGRATED (CONTINUED)
Petroleos Mexicanos
Company Guar. Notes
6.50% due 06/02/41.......................... $ 390,000 $ 403,650
----------
2,695,437
----------
PAPER & RELATED PRODUCTS -- 0.3%
PE Paper Escrow GmbH
Senior Sec. Notes
12.00% due 08/01/14*........................ 475,000 498,750
Sappi Papier Holding GmbH
Senior Sec. Notes
6.63% due 04/15/21*......................... 1,475,000 1,253,750
----------
1,752,500
----------
PETROCHEMICALS -- 0.1%
Braskem Finance, Ltd.
Company Guar. Notes
7.00% due 05/07/20*......................... 280,000 284,200
----------
PIPELINES -- 0.0%
TransCanada Pipelines, Ltd. FRS
Jr. Sub. Notes
6.35% due 05/15/67.......................... 272,000 270,832
----------
REAL ESTATE OPERATIONS & DEVELOPMENT -- 0.3%
China Resources Land, Ltd.
Senior Notes
4.63% due 05/19/16*......................... 425,000 403,243
Country Garden Holdings Co.
Senior Notes
11.13% due 02/23/18*........................ 410,000 311,600
Country Garden Holdings Co.
Company Guar. Notes
11.25% due 04/22/17*........................ 500,000 385,000
Longfor Properties Co., Ltd.
Company Guar. Notes
9.50% due 04/07/16*......................... 450,000 360,000
----------
1,459,843
----------
RETAIL-CONSUMER ELECTRONICS -- 0.1%
Grupo Elektra SA de CV
Company Guar. Notes
7.25% due 08/04/18.......................... 460,000 386,400
----------
SATELLITE TELECOM -- 0.2%
Intelsat Jackson Holdings SA
Company Guar. Notes
7.25% due 04/01/19*......................... 1,475,000 1,368,063
----------
SEMICONDUCTOR EQUIPMENT -- 0.2%
MagnaChip Semiconductor SA/MagnaChip
Semiconductor Finance Co.
Company Guar. Notes
10.50% due 04/15/18......................... 1,100,000 1,160,500
----------
SPECIAL PURPOSE ENTITIES -- 0.1%
Hellas Telecommunications Luxembourg II FRS
Sub. Notes
6.03% due 01/15/15*(7)(9)+.................. 1,330,000 36,575
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------
SPECIAL PURPOSE ENTITIES (CONTINUED)
Marfrig Holding Europe BV
Company Guar. Notes
8.38% due 05/09/18*.................. $ 260,000 $ 163,800
SMFG Preferred Capital, Ltd. FRS Jr.
Sub. Notes
6.08% due 01/25/17*(9)............... 373,000 361,810
----------
562,185
----------
STEEL-PRODUCERS -- 0.2%
China Oriental Group Co., Ltd.
Senior Sec. Notes
8.00% due 08/18/15................... 320,000 249,600
Evraz Group SA
Senior Notes
6.75% due 04/27/18*.................. 400,000 335,754
Severstal JSC via Steel Capital SA
Notes
6.25% due 07/26/16*.................. 415,000 356,722
Severstal OAO Via Steel Capital SA
Notes
6.70% due 10/25/17*.................. 320,000 270,284
----------
1,212,360
----------
SUPRANATIONAL BANKS -- 0.0%
Asian Development Bank
Senior Notes
5.82% due 06/16/28................... 203,000 268,256
----------
TELECOM SERVICES -- 0.1%
Wind Acquisition Finance SA
Senior Sec. Notes
7.25% due 02/15/18*.................. 720,000 614,700
----------
TELEPHONE-INTEGRATED -- 0.3%
Brasil Telecom SA
Senior Notes
9.75% due 09/15/16*.................. BRL 575,000 278,287
British Telecommunications PLC
Senior Notes
9.88% due 12/15/30................... 34,000 49,189
Telecom Italia Capital SA
Company Guar. Notes
5.25% due 10/01/15................... 621,000 592,051
Telecom Italia Capital SA
Company Guar. Notes
7.00% due 06/04/18................... 327,000 327,662
Telefonica Emisones SAU
Company Guar. Notes
6.42% due 06/20/16................... 152,000 155,837
----------
1,403,026
----------
TRANSPORT-MARINE -- 0.1%
CMA CGM SA
Senior Notes
8.50% due 04/15/17*.................. 1,450,000 587,250
----------
TRANSPORT-RAIL -- 0.1%
Canadian Pacific Railway Co.
Senior Notes
6.50% due 05/15/18................... 410,000 486,590
----------
39
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
TRANSPORT-SERVICES -- 0.1%
Inversiones Alsacia SA
Company Guar. Notes
8.00% due 08/18/18*................. $ 640,000 $ 549,911
-----------
TOTAL FOREIGN CORPORATE BONDS & NOTES
(cost $55,577,705).................. 48,764,059
-----------
FOREIGN GOVERNMENT AGENCIES -- 15.5%
REGIONAL AUTHORITY -- 0.1%
Province of British Columbia Canada
Senior Notes
2.85% due 06/15/15.................. 612,000 652,532
-----------
SOVEREIGN -- 15.2%
Commonwealth of Australia
Bonds
4.50% due 10/21/14.................. AUD 1,600,000 1,584,907
Dominican Republic
Bonds
7.50% due 05/06/21.................. 1,350,000 1,316,250
Dominican Republic
Senior Notes
7.50% due 05/06/21*................. 1,441,000 1,404,975
Federal Republic of Brazil
Senior Notes
4.88% due 01/22/21.................. 850,000 908,650
Federal Republic of Brazil
Notes
5.88% due 01/15/19.................. 690,000 791,775
Federal Republic of Brazil
Senior Bonds
7.13% due 01/20/37.................. 430,000 549,325
Federal Republic of Brazil
Notes
8.75% due 02/04/25.................. 1,170,000 1,646,775
Federal Republic of Germany
Bonds
4.25% due 07/04/39.................. EUR 292,000 510,916
Government of Bermuda
Senior Notes
5.60% due 07/20/20*................. 340,000 367,200
Government of Canada
Bonds
4.25% due 06/01/18.................. CAD 2,500,000 2,768,656
Government of Canada
Bonds
5.75% due 06/01/29.................. CAD 2,220,000 3,035,652
Government of Japan
Senior Bonds
2.10% due 03/20/27.................. JPY 163,600,000 2,291,902
Government of Poland
Bonds
5.13% due 04/21/21.................. 770,000 768,075
Government of Switzerland
Bonds
3.00% due 05/12/19.................. CHF 3,490,000 4,488,485
Kingdom of Norway
Bonds
4.25% due 05/19/17.................. NOK 14,970,000 2,855,452
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------
SOVEREIGN (CONTINUED)
Kingdom of Norway
Bonds
5.00% due 05/15/15............. NOK 5,475,000 $1,040,535
Kingdom of Sweden
Bonds
4.50% due 08/12/15............. SEK 12,610,000 2,055,246
New South Wales Treasury Corp.
Government Guar. Bonds
6.00% due 05/01/12............. AUD 1,228,000 1,197,336
Republic of Argentina
Notes
2.50% due 12/31/38(12)......... 1,764,761 595,607
Republic of Argentina
Senior Bonds
7.00% due 10/03/15............. 900,000 756,000
Republic of Argentina
Bonds
7.00% due 04/17/17............. 920,000 736,000
Republic of Argentina
Senior Bonds
8.28% due 12/31/33............. 1,542,532 1,056,635
Republic of Belarus
Bonds
8.75% due 08/03/15............. 530,000 378,950
Republic of Belarus
Senior Notes
8.95% due 01/26/18............. 550,000 386,375
Republic of Chile
Bonds
5.50% due 08/05/20............. CLP 399,000,000 806,523
Republic of Colombia
Bonds
4.38% due 07/12/21............. 480,000 489,600
Republic of Colombia
Senior Bonds
7.38% due 09/18/37............. 470,000 612,880
Republic of Colombia
Senior Bonds
8.13% due 05/21/24............. 360,000 477,360
Republic of Croatia
Notes
6.38% due 03/24/21............. 420,000 383,250
Republic of Croatia
Notes
6.63% due 07/14/20............. 420,000 400,050
Republic of Croatia
Notes
6.75% due 11/05/19............. 400,000 386,800
Republic of El Salvador
Senior Bonds
8.25% due 04/10/32............. 420,000 443,100
Republic of Hungary
Senior Bonds
6.38% due 03/29/21............. 780,000 758,940
Republic of Hungary
Bonds
7.63% due 03/29/41............. 1,522,000 1,483,950
40
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------
FOREIGN GOVERNMENT AGENCIES (CONTINUED)
SOVEREIGN (CONTINUED)
Republic of Indonesia
Senior Notes
4.88% due 05/05/21*......... $ 1,110,000 $1,121,100
Republic of Indonesia
Bonds
4.88% due 05/05/21.......... 840,000 848,400
Republic of Indonesia
Senior Bonds
5.88% due 03/13/20.......... 900,000 972,000
Republic of Indonesia
Bonds
6.63% due 02/17/37.......... 534,000 598,080
Republic of Indonesia
Senior Bonds
6.88% due 01/17/18.......... 880,000 987,800
Republic of Indonesia
Senior Bonds
8.50% due 10/12/35.......... 620,000 837,000
Republic of Indonesia
Senior Notes
11.63% due 03/04/19......... 350,000 497,875
Republic of Ivory Coast
Senior Bonds
2.50% due 12/31/32(9)+...... 1,140,000 570,000
Republic of Lithuania
Notes
6.13% due 03/09/21.......... 390,000 382,200
Republic of Lithuania
Notes
7.38% due 02/11/20.......... 730,000 784,750
Republic of Peru
Senior Bonds
5.63% due 11/18/50.......... 330,000 330,000
Republic of Peru
Senior Bonds
6.55% due 03/14/37.......... 211,000 244,760
Republic of Peru
Senior Bonds
7.35% due 07/21/25.......... 656,000 816,720
Republic of Peru
Senior Bonds
8.75% due 11/21/33.......... 720,000 1,021,320
Republic of Serbia
Senior Notes
7.25% due 09/28/21*......... 1,650,000 1,518,000
Republic of Singapore
Senior Bonds
2.38% due 04/01/17.......... SGD 1,980,000 1,644,911
Republic of Sri Lanka
Senior Notes
6.25% due 10/04/20.......... 810,000 781,650
Republic of Sri Lanka
Bonds
6.25% due 07/27/21*......... 598,000 578,384
Republic of the Philippines
Bonds
4.00% due 01/15/21.......... $ 860,000 851,400
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------
SOVEREIGN (CONTINUED)
Republic of the Philippines
Senior Bonds
6.25% due 01/14/36.......... PHP 37,000,000 $ 801,180
Republic of the Philippines
Senior Bonds
6.38% due 10/23/34.......... 700,000 801,500
Republic of the Philippines
Senior Bonds
6.50% due 01/20/20.......... 1,460,000 1,693,600
Republic of the Philippines
Senior Bonds
7.75% due 01/14/31.......... 330,000 423,638
Republic of the Philippines
Bonds
8.38% due 06/17/19.......... 1,600,000 2,024,000
Republic of the Philippines
Bonds
9.88% due 01/15/19.......... 300,000 402,000
Republic of the Philippines
Senior Bonds
10.63% due 03/16/25......... 265,000 400,150
Republic of Turkey
Bonds
zero coupon due 02/20/13.... TRY 700,000 336,447
Republic of Turkey
Bonds
5.63% due 03/30/21.......... 800,000 815,000
Republic of Turkey
Bonds
6.00% due 01/14/41.......... 420,000 400,050
Republic of Turkey
Notes
6.75% due 04/03/18.......... 1,100,000 1,207,250
Republic of Turkey
Senior Notes
6.88% due 03/17/36.......... 475,000 505,875
Republic of Turkey
Notes
6.88% due 03/17/36.......... 670,000 713,550
Republic of Turkey
Senior Notes
7.00% due 06/05/20.......... 350,000 392,000
Republic of Turkey
Notes
7.25% due 03/15/15.......... 370,000 408,388
Republic of Turkey
Senior Notes
7.38% due 02/05/25.......... 705,000 803,700
Republic of Turkey
Senior Notes
7.50% due 11/07/19.......... 690,000 795,225
Republic of Turkey
Senior Notes
8.00% due 02/14/34.......... 611,000 733,200
Republic of Turkey
Bonds
11.88% due 01/15/30......... 500,000 818,750
41
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------
FOREIGN GOVERNMENT AGENCIES (CONTINUED)
SOVEREIGN (CONTINUED)
Republic of Ukraine
Notes
7.65% due 06/11/13..... $ 800,000 $ 766,000
Republic of Uruguay
Bonds
8.00% due 11/18/22..... 610,000 759,450
Republic of Venezuela
Senior Bonds
8.50% due 10/08/14..... 530,000 466,400
Republic of Venezuela
Bonds
9.00% due 05/07/23..... 550,000 341,000
Republic of Venezuela
Bonds
12.75% due 08/23/22.... 1,140,000 903,450
Russian Federation
Senior Bonds
5.00% due 04/29/20*.... 800,000 786,000
Russian Federation
Senior Bonds
7.50% due 03/31/30(12). 1,166,495 1,310,767
Russian Federation
Bonds
7.85% due 03/10/18*.... RUB 15,000,000 453,459
Russian Federation
Bonds
7.85% due 03/10/18..... RUB 15,000,000 457,351
Russian Federation
Notes
12.75% due 06/24/28.... 1,100,000 1,820,500
State of Qatar
Bonds
5.25% due 01/20/20..... 750,000 825,000
State of Qatar
Bonds
6.55% due 04/09/19..... 460,000 547,400
United Mexican States
Senior Notes
6.05% due 01/11/40..... 400,000 452,000
United Mexican States
Bonds
7.25% due 12/15/16..... MXN 33,510,000 2,613,872
United Mexican States
Senior Notes
7.50% due 04/08/33..... 840,000 1,111,740
United Mexican States
Bonds
8.00% due 12/17/15..... MXN 9,400,000 749,037
United Mexican States
Bonds
8.00% due 06/11/20..... MXN 4,300,000 343,323
-----------
84,302,734
-----------
SOVEREIGN AGENCY -- 0.2%
European Union
Senior Notes
3.25% due 04/04/18..... EUR 190,000 268,161
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
SOVEREIGN AGENCY (CONTINUED)
Financing of Infrastructural Projects State
Enterprise
Govt. Guar. Bonds
7.40% due 04/20/18.......................... $ 930,000 $ 790,500
-----------
1,058,661
-----------
TOTAL FOREIGN GOVERNMENT AGENCIES
(cost $87,022,038).......................... 86,013,927
-----------
U.S. GOVERNMENT AGENCIES -- 14.2%
FEDERAL HOME LOAN MTG. CORP. -- 4.7%
4.50% due 02/01/20.......................... 78,242 83,676
4.50% due 08/01/20.......................... 167,337 178,959
4.50% due 01/01/39.......................... 293,340 311,118
5.00% due 09/01/18.......................... 181,038 195,765
5.00% due 07/01/20.......................... 271,144 293,031
5.00% due 01/01/24.......................... 402,700 432,690
5.00% due 02/01/34.......................... 187,955 202,670
5.00% due 03/01/34.......................... 1,429,828 1,541,325
5.00% due 05/01/34.......................... 156,696 171,045
5.00% due 02/01/35.......................... 256,391 276,384
5.00% due 07/01/35.......................... 401,089 432,115
5.00% due 08/01/35.......................... 450,468 485,314
5.00% due 04/01/36.......................... 242,423 261,175
5.00% due 05/01/36.......................... 142,190 153,123
5.00% due 08/01/36.......................... 200,160 215,549
5.00% due 03/01/39.......................... 1,044,509 1,123,592
5.00% due 08/01/39.......................... 2,843,943 3,058,644
5.00% due 07/01/40.......................... 955,458 1,026,978
5.50% due 05/01/37.......................... 619,747 674,014
5.50% due 06/01/37.......................... 195,781 212,496
5.50% due 09/01/37.......................... 549,066 595,942
5.50% due 10/01/37.......................... 2,086,115 2,264,217
5.50% due 11/01/37.......................... 609,752 671,127
5.50% due 12/01/37.......................... 529,784 575,014
5.50% due 01/01/38.......................... 1,293,789 1,407,077
5.50% due 02/01/38.......................... 381,882 414,485
5.50% due 07/01/38.......................... 323,437 351,051
6.00% due 10/01/37.......................... 569,892 625,937
6.00% due 12/01/37.......................... 1,123,222 1,233,684
6.00% due 10/01/39.......................... 1,591,232 1,744,239
6.50% due 05/01/29.......................... 3,836 4,353
6.50% due 02/01/35.......................... 82,651 92,763
6.50% due 11/01/37.......................... 2,379,106 2,646,359
7.00% due 06/01/29.......................... 7,840 9,040
Federal Home Loan Mtg. Corp. REMIC
Series 3841, Class PA
5.00% due 12/15/40(2)....................... 945,571 1,053,218
Series 41, Class F
10.00% due 05/15/20(2)...................... 6,161 6,785
Series 1103, Class N
11.57% due 06/15/21(2)(11).................. 3,358 747
Federal Home Loan Mtg. Corp. REMIC FRS
Series 3572, Class JS
6.57% due 09/15/39(2)(11)................... 6,495,239 1,155,046
-----------
26,180,747
-----------
42
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
FEDERAL NATIONAL MTG. ASSOC. -- 8.7%
4.00% due 06/01/39................. $ 833,447 $ 880,923
4.00% due 09/01/40................. 1,406,299 1,475,866
4.50% due 06/01/19................. 186,347 199,671
4.50% due 11/01/22................. 349,468 374,401
4.50% due 06/01/23................. 269,253 287,075
4.50% due 10/01/24................. 667,633 710,990
4.50% due 03/01/25................. 830,460 885,428
4.50% due 05/01/25................. 748,013 797,524
4.50% due 07/01/25................. 1,014,003 1,081,121
4.50% due 01/01/39................. 2,396,369 2,547,016
4.50% due 07/01/40................. 1,893,617 2,014,434
4.50% due 08/01/40................. 2,742,831 2,913,543
5.00% due 06/01/19................. 96,800 104,735
5.00% due 01/01/23................. 72,138 77,601
5.00% due 03/01/34................. 139,841 151,091
5.00% due 04/01/35................. 2,722,591 2,941,618
5.00% due 05/01/35................. 77,386 83,552
5.00% due 02/01/37................. 129,257 139,377
5.00% due 04/01/37................. 569,225 613,417
5.00% due 05/01/37................. 183,580 197,831
5.00% due 06/01/37................. 13,187 14,210
5.00% due 07/01/37................. 148,737 160,284
5.00% due 05/01/40................. 334,277 360,177
5.00% due 07/01/40................. 3,613,391 3,893,354
5.00% due 08/01/40................. 1,301,112 1,401,921
5.50% due 11/01/19................. 683,849 744,180
5.50% due 08/01/20................. 157,509 171,208
5.50% due 11/01/22................. 263,744 286,050
5.50% due 08/01/23................. 188,473 204,412
5.50% due 01/01/29................. 2,603 2,853
5.50% due 08/01/34................. 1,811,610 1,979,014
5.50% due 02/01/35................. 237,438 259,230
5.50% due 03/01/35................. 1,370,790 1,497,460
5.50% due 12/01/35................. 330,686 361,037
5.50% due 12/01/36................. 243,298 265,134
5.50% due 04/01/37................. 102,287 111,292
5.50% due 08/01/37................. 4,905,770 5,345,781
5.50% due 03/01/38................. 16,704 18,153
6.00% due 02/01/32................. 68,330 75,894
6.00% due 05/01/34................. 8,980 9,949
6.00% due 10/01/34................. 242,834 269,428
6.00% due 06/01/35................. 65,546 72,350
6.00% due 07/01/37................. 1,895,195 2,083,056
6.00% due 08/01/37................. 99,548 109,416
6.00% due 10/01/37................. 243,367 270,396
6.00% due 11/01/38................. 2,217,827 2,437,669
6.00% due 12/01/38................. 2,978,117 3,271,462
6.00% due 04/01/40................. 854,448 939,878
6.50% due 02/01/35................. 41,354 46,223
6.50% due 10/01/38................. 1,688,157 1,870,953
7.50% due 01/01/30................. 6,517 7,611
7.50% due 09/01/30................. 2,760 3,229
8.00% due 11/01/28................. 11,642 13,570
13.00% due 11/15/15................ 333 374
Federal National Mtg. Assoc. REMIC
Series 2011-38, Class D
4.50% due 05/25/41(2).............. 974,426 1,073,532
PRINCIPAL
AMOUNT/ VALUE
SECURITY DESCRIPTION SHARES** (NOTE 2)
-----------------------------------------------------------------
FEDERAL NATIONAL MTG. ASSOC. (CONTINUED)
Series 1989-2, Class D
8.80% due 01/25/19(2)................... $ 19,263 $ 23,135
Series 1989-17, Class E
10.40% due 04/25/19(2).................. 1,254 1,423
-----------
48,132,512
-----------
GOVERNMENT NATIONAL MTG. ASSOC. -- 0.8%
5.00% due 04/15/40...................... 3,615,100 3,994,374
7.50% due 07/15/27...................... 8,865 10,364
7.50% due 10/15/27...................... 54,848 64,118
-----------
4,068,856
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $74,954,378)...................... 78,382,115
-----------
U.S. GOVERNMENT TREASURIES -- 5.0%
UNITED STATES TREASURY BONDS -- 1.0%
2.13% due 02/15/40 TIPS................. 351,197 445,609
2.13% due 02/15/41 TIPS................. 625,162 798,351
4.38% due 05/15/41...................... 2,833,000 3,659,896
5.25% due 11/15/28...................... 314,000 427,972
-----------
5,331,828
-----------
UNITED STATES TREASURY NOTES -- 4.0%
0.63% due 07/15/14...................... 488,000 490,972
0.75% due 06/15/14...................... 3,547,000 3,581,363
1.00% due 08/31/16...................... 295,000 295,737
1.38% due 02/15/13...................... 450,000 456,979
1.38% due 11/30/15...................... 105,000 107,723
1.50% due 07/31/16...................... 412,000 423,075
1.75% due 05/31/16...................... 1,760,000 1,830,259
2.13% due 05/31/15...................... 82,000 86,529
2.13% due 08/15/21...................... 959,000 975,936
2.38% due 02/28/15...................... 195,000 207,051
2.38% due 05/31/18...................... 2,715,000 2,889,982
2.63% due 11/15/20...................... 144,000 153,990
2.75% due 05/31/17...................... 1,141,000 1,242,888
3.13% due 05/15/21...................... 8,429,000 9,355,516
-----------
22,098,000
-----------
TOTAL U.S. GOVERNMENT TREASURIES
(cost $26,200,228)...................... 27,429,828
-----------
LOANS (17)(18) -- 0.1%
MEDICAL-DRUGS -- 0.1%
Triax Pharmaceuticals LLC
BTL
16.50% due 08/30/11+(3)(4)(8)(13)(16)
(cost $1,654,363)....................... 1,669,715 631,486
-----------
MUNICIPAL BONDS & NOTES -- 0.1%
MUNICIPAL BONDS -- 0.1%
Port Authority of New York & New Jersey
Revenue Bonds
4.93% due 10/01/2051
(cost $554,000)......................... 554,000 569,529
-----------
COMMON STOCK -- 0.1%
BANKS-COMMERCIAL -- 0.1%
Lloyds Banking Group PLC+(21)............ 600,576 318,462
-----------
43
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------------
COMMON STOCK (CONTINUED)
GAMBLING (NON-HOTEL) -- 0.0%
Shreveport Gaming Holdings, Inc.+(3)(4)(13)... 2,441 $ 622
----------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC+(3)(4)(13)(14)...... 128,418 642
----------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.0%
Critical Care Systems International,
Inc.+(3)(4)(13).............................. 4,107 103
----------
TOTAL COMMON STOCK
(cost $445,730).............................. 319,829
----------
PREFERRED STOCK -- 1.1%
BANKS-COMMERCIAL -- 0.1%
CoBank ACB 11.00%*............................ 12,063 628,784
----------
BANKS-SUPER REGIONAL -- 0.2%
US Bancorp FRS 3.50%.......................... 759 516,879
Wachovia Capital Trust IX 6.38%............... 12,800 322,688
----------
839,567
----------
DIVERSIFIED BANKING INSTITUTIONS -- 0.6%
Ally Financial, Inc. 7.00%*................... 2,538 1,699,587
Goldman Sachs Group, Inc. 6.13%............... 48,000 1,190,400
HSBC Holdings PLC 8.00%....................... 9,360 238,025
----------
3,128,012
----------
DIVERSIFIED FINANCIAL SERVICES -- 0.0%
General Electric Capital Corp. 5.50%.......... 8,582 221,416
----------
ELECTRIC-INTEGRATED -- 0.0%
Southern California Edison Co. FRS 5.71%...... 2,250 225,338
----------
FINANCE-INVESTMENT BANKER/BROKER -- 0.1%
JP Morgan Chase Capital XXIX 6.70%............ 19,440 487,166
----------
FINANCE-MORTGAGE LOAN/BANKER -- 0.0%
Freddie Mac VRS+ 8.38%........................ 11,300 22,600
----------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC, Class C+(3)(4)(13). 39,177 196
----------
SPECIAL PURPOSE ENTITY -- 0.1%
Structured Repackaged Asset-Backed Trust
Securities FRS
3.00%........................................ 29,200 540,492
----------
TOTAL PREFERRED STOCK
(cost $6,722,535)............................ 6,093,571
----------
WARRANTS+ -- 0.0%
PUBLISHING-PERIODICALS -- 0.0%
Reader's Digest Assoc., Inc.
Expires 02/19/14 (3)(4)...................... 6,739 0
----------
TELEVISION -- 0.0%
Ion Media Networks, Inc.
Expires 12/18/16
(strike price $687.50)(3)(4)(13)............. 325 40,625
Ion Media Networks, Inc.
Expires 12/18/16
(strike price $500.00)(3)(4)(13)............. 325 73,125
----------
113,750
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
TOTAL WARRANTS
(cost $6,978).............................. $ 113,750
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $542,546,236)........................ 520,384,865
------------
SHORT-TERM INVESTMENT SECURITIES -- 2.0%
TIME DEPOSITS -- 2.0%
Euro Time Deposit with State Street Bank &
Trust Co. 0.01 % due 10/03/11
(cost $11,254,000)......................... $11,254,000 11,254,000
------------
REPURCHASE AGREEMENT -- 1.8%
State Street Bank and Trust Co. Joint
Repurchase Agreement
(cost $10,213,000)(19)..................... 10,213,000 10,213,000
------------
TOTAL INVESTMENTS
(cost $564,013,236) (15)................... 97.8% 541,851,865
Other assets less liabilities................. 2.2 12,041,196
----------- ------------
NET ASSETS 100.0% $553,893,061
=========== ============
--------
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At September 30, 2011,
the aggregate value of these securities was $105,893,250 representing
19.1% of net assets. Unless otherwise indicated these securities are not
considered to be illiquid.
** Denominated in United States Dollars unless otherwise indicated.
+ Non-income producing security
(1) Commercial Mortgage Backed Security
(2) Collateralized Mortgage Obligation
(3) Illiquid security. At September 30, 2011, the aggregate value of these
securities was $1,774,691 representing 0.20% of net assets.
(4) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(5) Perpetual maturity--maturity date reflects the next call date.
(6) Income may be received in cash or additional bonds at the discretion of
the issuer.
(7) Company has filed bankruptcy in the country of issuance.
(8) Security in default of interest and did not pay principal at maturity.
(9) Bond in default
(10) Company has filed for Chapter 7 bankruptcy.
(11) Interest Only
(12) "Step-up" security where the rate increases ("steps-up") at a
predetermined rate. Rate shown reflects the increased rate.
(13) Denotes a restricted security that: (a) cannot be offered for public sale
without first being registered, or being able to take advantage of an
exemption from registration, under the Securities Act of 1933, as amended
(the "1933 Act"); (b) is subject to a contractual restriction on public
sales; or (c) is otherwise subject to a restriction on sales by operation
of applicable law. Restricted securities are valued pursuant to Note
2. Certain restricted securities held by the Fund may not be sold except
in exempt transactions or in a public offering registered under the 1933
Act. The Fund has no right to demand registration of these securities. The
risk of investing in certain restricted securities is greater than the
risk of investing in the securities of widely held, publicly traded
companies. To the extent applicable, lack of a secondary market and resale
restrictions may result in the inability of a Fund to sell a security at a
fair price and may substantially delay the sale of the security. In
44
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
addition, certain restricted securities may exhibit greater price
volatility than securities for which secondary markets exist. As of
September 30, 2011, the SunAmerica Strategic Bond Fund held the following
restricted securities:
PRINCIPAL VALUE % OF
ACQUISITION AMOUNT / ACQUISITION PER NET
NAME DATE SHARES COST VALUE SHARE ASSETS
---- ----------- ---------- ----------- -------- ------- ------
Critical Care
Systems
International,
Inc. Common
Stock........... 7/20/2006 $ 4,107 $ -- $ 103 $ 0.03 0.00%
Ion Media
Networks, Inc.
Expires
12/18/16
(strike price
$687.50)
Warrants........ 3/15/2011 325 -- 40,625 125.00 0.01
Ion Media
Networks, Inc.
Expires
12/18/16
(strike price
$500.00)
Warrants........ 3/15/2011 325 -- 73,125 225.00 0.01
Shreveport
Gaming
Holdings, Inc.
Common
Stock........... 7/29/2005 2,047 47,128
7/21/2005 394 9,051
---------- ----------
2,441 56,179 622 0.25 0.00
Triax
Pharmaceuticals
LLC 16.50%
due 08/30/11
Loan
Agreement....... 8/31/2007 1,500,000 1,478,967
10/31/2007 3,875 3,875
1/10/2008 11,404 11,404
4/4/2008 11,239 11,238
7/3/2008 11,449 11,449
10/9/2008 11,534 11,534
1/6/2009 11,751 11,750
4/7/2009 11,579 11,579
7/1/2009 11,796 11,796
10/7/2009 11,885 11,885
12/22/2010 48,346 48,347
3/17/2011 91 91
3/29/2011 12,611 12,611
6/15/2011 12,155 24,831
---------- ----------
1,669,715 1,661,357 631,486 37.82 0.11
Triax
Pharmaceuticals
LLC Common
Stock........... 8/31/2007 128,418 53,936 642 0.01 0.00
Triax
Pharmaceuticals
LLC Preferred
Stock........... 8/31/2007 39,177 78,353 196 0.01 0.00
-------- ----
$746,799 0.13%
======== ====
(14) Consists of more than one type of securities traded together as a unit.
(15) See Note 5 for cost of investments on a tax basis.
(16) A portion of the interest was paid in additional bonds/loans.
(17) Senior loans in the Fund are generally subject to mandatory and/or
optional prepayment. Because of these mandatory prepayment conditions and
because there may be significant economic incentives for a borrower to
prepay, prepayments may occur. As a result, the actual remaining maturity
may be substantially less than the stated maturities shown.
(18) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior
loans are generally considered to be restrictive in that the Fund is
ordinarily contractually obligated to receive approval from the Agent Bank
and/or borrower prior to the disposition of a senior loan.
(19) See Note 2 for details of Joint Repurchase Agreements.
(20) Security default resolution subsequent to September 30, 2011.
(21) Security was valued using fair value procedures at September 30, 2011. At
September 30, 2011, the value of this security was $318,462 representing
0.1% of net assets. See Note 2 regarding fair value pricing procedures for
foreign equity securities.
(22) Subsequent to September 30, 2011, company filed for bankruptcy.
(23) Bond in default subsequent to September 30, 2011.
FRS --Floating Rate Security
VRS --Variable Rate Security
The rates shown on FRS and VRS are the current rates at September 30, 2011
and unless noted otherwise, the dates shown are the original maturity
dates.
REMIC --Real Estate Mortgage Investment Conduit
TIPS --Treasury Inflation Protected Security
AUD --Australian Dollar
BRL --Brazilian Real
CAD --Canadian Dollar
CHF --Swiss Franc
CLP --Chilean Peso
COP --Columbian Peso
EUR --Euro
GBP --British Pound
JPY --Japanese Yen
MXN --Mexican Peso
NOK --Norwegian Krone
PHP --Philippine Peso
RUB --Russian Ruble
SEK --Swedish Krona
SGD --Singapore Dollar
TRY --New Turkish Lira
USD --U.S. Dollar
45
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2011 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
Long-Term Investment Securities:
Asset Backed Securities......... $ -- $ 26,221,001 $ -- $ 26,221,001
U.S. Corporate Bonds & Notes.... -- 242,985,399 2,860,371 245,845,770
Foreign Corporate Bonds & Notes. -- 48,764,059 0 48,764,059
Foreign Government Agencies..... -- 86,013,927 -- 86,013,927
U.S. Government Agencies........ -- 78,382,115 -- 78,382,115
U.S. Government Treasuries...... -- 27,429,828 -- 27,429,828
Loans........................... -- -- 631,486 631,486
Municipal Bond & Notes.......... -- 569,529 -- 569,529
Common Stock.................... -- 318,462# 1,367 319,829
Preferred Stock................. 6,093,375 -- 196 6,093,571
Warrants........................ -- -- 113,750 113,750
Short Term Investment Securities:
Time Deposit.................... -- 11,254,000 -- 11,254,000
Repurchase Agreement.............. -- 10,213,000 -- 10,213,000
---------- ------------ ---------- ------------
TOTAL............................. $6,093,375 $532,151,320 $3,607,170 $541,851,865
========== ============ ========== ============
--------
# Includes foreign equity securities whose values were adjusted for fair value
pricing procedures for foreign equity securities; therefore these securities
were classified as Level 2 instead of Level 1. The aggregate value of these
securities was $318,462 representing 0.1% of net assets. (See Note 2.)
The following is a reconciliation of Level 3 assets which significant
unobservable inputs were used to determine fair value:
CONVERTIBLE U.S. CORPORATE FOREIGN CORPORATE COMMON PREFERRED
BONDS & NOTES BONDS & NOTES BONDS & NOTES LOANS STOCK STOCK WARRANTS
------------- -------------- ----------------- ----------- --------- --------- --------
Balance as of 3/31/2011.............. $ 359,370 $ 6,550,154 $ 0 $ 709,436 $ 373,969 $196 $100,750
Accrued discounts.................... -- 45,343 -- -- -- -- --
Accrued premiums..................... -- -- -- (130,005) -- -- --
Realized gain........................ -- 195,986 -- -- -- -- --
Realized loss........................ (15,925) (81,061) -- (15,352) (761,451) -- --
Change in unrealized appreciation(1). -- 76,283 -- -- 629,012 -- 30,875
Change in unrealized depreciation(1). (46,445) (533,056) -- (95,787) -- -- (17,875)
Net purchases........................ -- 72,822 -- 1,666,519 -- -- --
Net sales............................ (297,000) (3,466,100) -- (1,503,325) (240,163) -- --
Transfers in of Level 3(2)........... -- -- -- -- -- -- --
Transfers out of Level 3(2).......... -- -- -- -- -- -- --
--------- ----------- --- ----------- --------- ---- --------
Balance as of 09/30/2011............. $ -- $ 2,860,371 $ 0 $ 631,486 $ 1,367 $196 $113,750
========= =========== === =========== ========= ==== ========
--------
(1)The total change in unrealized appreciation (depreciation) included in the
statement of operations attributable to level 3 investments still held at
September 30, 2011 includes:
CONVERTIBLE U.S. CORPORATE FOREIGN CORPORATE COMMON PREFERRED
BONDS & NOTES BONDS & NOTES BONDS & NOTES LOANS STOCK STOCK WARRANTS
------------- -------------- ----------------- -------- ------ --------- --------
$-- $(466,292) $-- $(95,787) $704 $-- $13,000
=== ========= === ======== ==== === =======
--------
(2)The Fund's policy is to recognize transfers in and transfers out as of the
end of the reporting period.
See Notes to Financial Statements
46
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO PROFILE -- SEPTEMBER 30, 2011 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Oil Companies-Exploration & Production. 5.2%
Banks-Commercial....................... 4.4
Telephone-Integrated................... 3.8
Diversified Banking Institutions....... 3.7
Cable/Satellite TV..................... 3.5
Finance-Auto Loans..................... 3.1
Medical-Hospitals...................... 3.0
Auto/Truck Parts & Equipment-Original.. 2.9
Paper & Related Products............... 2.9
Pipelines.............................. 2.9
Auto-Cars/Light Trucks................. 2.8
Cellular Telecom....................... 2.6
Casino Services........................ 2.0
Electric-Integrated.................... 2.0
Casino Hotels.......................... 1.8
Independent Power Producers............ 1.7
Coal................................... 1.7
Aerospace/Defense-Equipment............ 1.6
Retail-Regional Department Stores...... 1.6
Containers-Metal/Glass................. 1.6
Finance-Consumer Loans................. 1.5
Diversified Financial Services......... 1.4
Telecom Services....................... 1.4
Computer Services...................... 1.3
Theaters............................... 1.3
Satellite Telecom...................... 1.3
Multimedia............................. 1.3
Electric-Generation.................... 1.2
Transport-Marine....................... 1.2
Repurchase Agreements.................. 1.2
Oil-Field Services..................... 1.1
Machinery-Farming...................... 1.1
Real Estate Investment Trusts.......... 1.0
Banks-Mortgage......................... 0.9
Chemicals-Diversified.................. 0.9
Commercial Services.................... 0.9
Medical-Drugs.......................... 0.9
Computers-Memory Devices............... 0.9
Medical Products....................... 0.9
Medical Information Systems............ 0.8
Insurance-Multi-line................... 0.8
Oil Field Machinery & Equipment........ 0.8
Diversified Minerals................... 0.8
Electronic Components-Semiconductors... 0.8
Office Automation & Equipment.......... 0.7
Shipbuilding........................... 0.7
Retail-Drug Store...................... 0.7
Athletic Equipment..................... 0.7
Retail-Arts & Crafts................... 0.7
Consumer Products-Misc................. 0.6
Diagnostic Kits........................ 0.6
Television............................. 0.6
Diversified Manufacturing Operations... 0.6
Medical Labs & Testing Services........ 0.6
Machinery-General Industrial........... 0.6
Investment Companies................... 0.5
Agricultural Operations................ 0.5
Telecommunication Equipment............ 0.5
Medical-Outpatient/Home Medical........ 0.5
Food-Misc.............................. 0.5
Special Purpose Entities............... 0.5
Advertising Services.................... 0.5%
Food-Meat Products...................... 0.5
Physical Therapy/Rehabilitation Centers. 0.5
Office Supplies & Forms................. 0.5
Commercial Services-Finance............. 0.4
Data Processing/Management.............. 0.4
Pharmacy Services....................... 0.4
Publishing-Books........................ 0.4
Alternative Waste Technology............ 0.3
Funeral Services & Related Items........ 0.3
Web Hosting/Design...................... 0.3
Retail-Propane Distribution............. 0.3
Internet Connectivity Services.......... 0.3
Enterprise Software/Service............. 0.3
Broadcast Services/Program.............. 0.3
Chemicals-Specialty..................... 0.3
Printing-Commercial..................... 0.3
Direct Marketing........................ 0.3
Chemicals-Plastics...................... 0.2
Beverages-Non-alcoholic................. 0.2
Agricultural Chemicals.................. 0.2
E-Commerce/Services..................... 0.2
Motion Pictures & Services.............. 0.2
Publishing-Periodicals.................. 0.1
Medical-Biomedical/Gene................. 0.1
Aerospace/Defense....................... 0.1
Dialysis Centers........................ 0.1
----
98.6%
====
CREDIT QUALITY ALLOCATION+#
BBB........ 3.7%
BB......... 44.7
B.......... 39.1
CCC........ 6.0
Not Rated@. 6.5
------
100.00%
======
--------
*Calculated as a percentage of net assets.
+Source: Standard and Poor's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
47
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 1.7%
CELLULAR TELECOM -- 0.8%
Leap Wireless International, Inc.
Senior Notes
4.50% due 07/15/14.................... $ 938,000 $ 831,303
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.9%
Chesapeake Energy Corp.
Company Guar. Notes
2.50% due 05/15/37.................... 1,070,000 988,412
----------
TOTAL CONVERTIBLE BONDS & NOTES
(cost $1,833,244)..................... 1,819,715
----------
U.S. CORPORATE BONDS & NOTES -- 79.5%
ADVERTISING SERVICES -- 0.5%
Checkout Holding Corp.
Senior Notes
zero coupon due 11/15/15*............. 995,000 544,763
----------
AEROSPACE/DEFENSE -- 0.1%
Esterline Technologies Corp.
Company Guar. Notes
7.00% due 08/01/20.................... 85,000 87,338
----------
AEROSPACE/DEFENSE-EQUIPMENT -- 1.6%
BE Aerospace, Inc.
Senior Notes
6.88% due 10/01/20.................... 705,000 734,963
TransDigm, Inc.
Company Guar. Notes
7.75% due 12/15/18.................... 1,025,000 1,042,937
----------
1,777,900
----------
AGRICULTURAL CHEMICALS -- 0.2%
CF Industries, Inc.
Company Guar. Notes
6.88% due 05/01/18.................... 165,000 184,181
----------
AGRICULTURAL OPERATIONS -- 0.5%
Southern States Cooperative, Inc.
Senior Notes
11.25% due 05/15/15*.................. 555,000 574,425
----------
ALTERNATIVE WASTE TECHNOLOGY -- 0.3%
Darling International, Inc.
Company Guar. Notes
8.50% due 12/15/18.................... 331,000 356,653
----------
ATHLETIC EQUIPMENT -- 0.7%
Easton-Bell Sports, Inc.
Senior Sec. Notes
9.75% due 12/01/16.................... 700,000 731,500
----------
AUTO-CARS/LIGHT TRUCKS -- 2.8%
Chrysler Group LLC/CG Co-Issuer, Inc.
Senior Sec. Notes
8.00% due 06/15/19*................... 635,000 495,300
Ford Motor Co.
Senior Notes
7.45% due 07/16/31.................... 2,300,000 2,596,424
----------
3,091,724
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 2.9%
Affinia Group, Inc.
Company Guar. Notes
9.00% due 11/30/14.................. $ 445,000 $ 429,425
Affinia Group, Inc.
Senior Sec. Notes
10.75% due 08/15/16*................ 657,000 670,140
ArvinMeritor, Inc.
Company Guar. Notes
8.13% due 09/15/15.................. 705,000 623,925
ArvinMeritor, Inc.
Company Guar. Notes
10.63% due 03/15/18................. 515,000 495,687
Tenneco, Inc.
Company Guar. Notes
7.75% due 08/15/18.................. 145,000 145,725
Tenneco, Inc.
Company Guar. Notes
8.13% due 11/15/15.................. 90,000 91,800
TRW Automotive, Inc.
Company Guar. Notes
7.25% due 03/15/17*................. 725,000 761,250
----------
3,217,952
----------
AUTO/TRUCK PARTS & EQUIPMENT-REPLACEMENT -- 0.0%
Exide Corp.
Escrow Notes
10.00% due 03/15/25+(1)(2).......... 1,650,000 0
----------
BANKS-COMMERCIAL -- 3.4%
CIT Group, Inc.
Sec. Notes
6.63% due 04/01/18*................. 35,000 34,825
CIT Group, Inc.
Sec. Notes
7.00% due 05/01/15.................. 918 911
CIT Group, Inc.
Sec. Notes
7.00% due 05/04/15*................. 440,000 436,700
CIT Group, Inc.
Sec. Notes
7.00% due 05/01/16.................. 863 837
CIT Group, Inc.
Sec. Notes
7.00% due 05/02/16*................. 1,129,000 1,095,130
CIT Group, Inc.
Sec. Notes
7.00% due 05/01/17.................. 809 785
CIT Group, Inc.
Sec. Notes
7.00% due 05/02/17*................. 2,188,000 2,122,360
----------
3,691,548
----------
BANKS-MORTGAGE -- 0.9%
Provident Funding Associates LP/PFG
Finance Corp.
Senior Sec. Notes
10.25% due 04/15/17*................ 1,065,000 1,038,375
----------
48
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
BROADCAST SERVICES/PROGRAM -- 0.3%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes,
Series A
9.25% due 12/15/17............................... $ 55,000 $ 55,825
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes,
Series B
9.25% due 12/15/17............................... 230,000 235,175
----------
291,000
----------
CABLE/SATELLITE TV -- 3.5%
CCH II LLC/CCH II Capital Corp.
Company Guar. Notes
13.50% due 11/30/16.............................. 735,867 838,888
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
7.25% due 10/30/17............................... 780,000 780,000
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
7.88% due 04/30/18............................... 560,000 569,800
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
8.13% due 04/30/20............................... 170,000 176,800
DISH DBS Corp.
Company Guar. Notes
6.75% due 06/01/21*.............................. 450,000 429,750
Mediacom LLC / Mediacom Capital Corp.
Senior Notes
9.13% due 08/15/19............................... 1,000,000 995,000
----------
3,790,238
----------
CASINO HOTELS -- 1.8%
CityCenter Holdings LLC/CityCenter Finance Corp.
Senior Sec. Notes
7.63% due 01/15/16*.............................. 180,000 169,200
Harrah's Operating Co., Inc.
Senior Sec. Notes
11.25% due 06/01/17.............................. 910,000 917,962
MGM Mirage, Inc.
Senior Sec. Notes
9.00% due 03/15/20............................... 155,000 161,006
MGM Mirage, Inc.
Senior Sec. Notes
11.13% due 11/15/17.............................. 675,000 740,813
----------
1,988,981
----------
CASINO SERVICES -- 0.5%
Greektown, Inc. LLC
Escrow Notes
10.75% due 12/01/13+(1)(2)....................... 489,000 0
Peninsula Gaming LLC
Sec. Notes
8.38% due 08/15/15............................... 600,000 597,000
----------
597,000
----------
CELLULAR TELECOM -- 1.8%
Cricket Communications, Inc.
Senior Sec. Notes
7.75% due 05/15/16............................... 575,000 577,156
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
CELLULAR TELECOM (CONTINUED)
MetroPCS Wireless, Inc.
Company Guar. Notes
6.63% due 11/15/20......................... $ 645,000 $ 567,600
MetroPCS Wireless, Inc.
Company Guar. Notes
7.88% due 09/01/18......................... 485,000 470,450
Syniverse Holdings, Inc.
Company Guar. Notes
9.13% due 01/15/19......................... 405,000 396,900
----------
2,012,106
----------
CHEMICALS-DIVERSIFIED -- 0.9%
Celanese US Holdings LLC
Company Guar. Notes
6.63% due 10/15/18......................... 395,000 408,331
Momentive Performance Materials, Inc.
Sec. Notes
9.00% due 01/15/21......................... 471,000 322,635
Momentive Performance Materials, Inc.
Company Guar. Notes
12.50% due 06/15/14........................ 297,000 302,940
----------
1,033,906
----------
CHEMICALS-PLASTICS -- 0.2%
Hexion US Finance Corp./Hexion Nova Scotia
Finance ULC
Sec. Notes
9.00% due 11/15/20......................... 355,000 260,038
----------
CHEMICALS-SPECIALTY -- 0.3%
Ferro Corp.
Senior Notes
7.88% due 08/15/18......................... 285,000 285,000
----------
COAL -- 1.7%
Alpha Natural Resources, Inc.
Company Guar. Notes
6.00% due 06/01/19......................... 230,000 215,050
Alpha Natural Resources, Inc.
Company Guar. Notes
6.25% due 06/01/21......................... 155,000 144,538
Arch Coal, Inc.
Company Guar. Notes
7.25% due 10/01/20......................... 225,000 216,000
Peabody Energy Corp.
Company Guar. Notes
6.50% due 09/15/20......................... 1,201,000 1,262,551
----------
1,838,139
----------
COMMERCIAL SERVICES -- 0.6%
ARAMARK Holdings Corp.
Senior Notes
8.63% due 05/01/16*(3)..................... 380,000 374,300
Iron Mountain, Inc.
Company Guar. Notes
7.75% due 10/01/19......................... 280,000 277,900
----------
652,200
----------
49
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
COMMERCIAL SERVICES-FINANCE -- 0.4%
Speedy Cash, Inc.
Senior Sec. Notes
10.75% due 05/15/18*....................... $455,000 $ 458,413
----------
COMPUTER SERVICES -- 1.3%
SunGard Data Systems, Inc.
Company Guar. Notes
7.38% due 11/15/18......................... 556,000 517,080
SunGard Data Systems, Inc.
Company Guar. Notes
7.63% due 11/15/20......................... 275,000 255,750
SunGard Data Systems, Inc.
Company Guar. Notes
10.25% due 08/15/15........................ 80,000 80,800
SunGard Data Systems, Inc.
Company Guar. Notes
10.63% due 05/15/15........................ 550,000 573,375
----------
1,427,005
----------
CONSUMER PRODUCTS-MISC. -- 0.6%
Reynolds Group Issuer, Inc./Reynolds Group
Issuer LLC
Senior Sec. Notes
6.88% due 02/15/21*........................ 335,000 301,500
Reynolds Group Issuer, Inc./Reynolds Group
Issuer LLC
Senior Sec. Notes
7.75% due 10/15/16*........................ 210,000 210,525
Reynolds Group Issuer, Inc./Reynolds Group
Issuer LLC
Senior Sec. Notes
7.88% due 08/15/19*........................ 210,000 202,650
----------
714,675
----------
CONTAINERS-METAL/GLASS -- 1.6%
Ball Corp.
Company Guar. Notes
5.75% due 05/15/21......................... 655,000 636,987
Ball Corp.
Company Guar. Notes
6.63% due 03/15/18......................... 380,000 381,900
Ball Corp.
Company Guar. Notes
7.38% due 09/01/19......................... 145,000 152,975
Crown Americas LLC/Crown Americas Capital
Corp. II
Company Guar. Notes
7.63% due 05/15/17......................... 255,000 269,663
Crown Americas LLC/Crown Americas Capital
Corp. III
Senior Notes
6.25% due 02/01/21*........................ 265,000 265,000
----------
1,706,525
----------
DATA PROCESSING/MANAGEMENT -- 0.4%
First Data Corp.
Sec. Notes
8.25% due 01/15/21*........................ 284,000 224,360
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT (CONTINUED)
First Data Corp.
Sec. Notes
8.75% due 01/15/22*(3)......................... $ 285,000 $ 225,150
----------
449,510
----------
DIAGNOSTIC KITS -- 0.6%
Alere, Inc.
Senior Notes
7.88% due 02/01/16............................. 745,000 704,025
----------
DIALYSIS CENTERS -- 0.1%
Fresenius Medical Care U.S. Finance, Inc.
Company Guar. Notes
6.50% due 09/15/18*............................ 65,000 65,975
----------
DIRECT MARKETING -- 0.3%
Sitel LLC/Sitel Finance Corp.
Senior Notes
11.50% due 04/01/18............................ 350,000 276,500
----------
DIVERSIFIED BANKING INSTITUTIONS -- 2.4%
Ally Financial, Inc.
Company Guar. Notes
8.00% due 03/15/20............................. 630,000 583,141
GMAC LLC
Sub. Notes
8.00% due 12/31/18............................. 1,100,000 1,001,000
NB Capital Trust IV
Limited Guar. Notes
8.25% due 04/15/27............................. 1,100,000 1,020,250
----------
2,604,391
----------
DIVERSIFIED FINANCIAL SERVICES -- 0.6%
Community Choice Financial, Inc.
Senior Sec. Notes
10.75% due 05/01/19*........................... 725,000 703,250
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.2%
Harland Clarke Holdings Corp.
Company Guar. Notes
9.50% due 05/15/15............................. 245,000 181,300
----------
E-COMMERCE/SERVICES -- 0.2%
NetFlix, Inc.
Company Guar. Notes
8.50% due 11/15/17............................. 165,000 178,613
----------
ELECTRIC-GENERATION -- 1.1%
AES Corp.
Senior Notes
8.00% due 10/15/17............................. 805,000 809,025
Reliant Energy Mid-Atlantic Power Holdings LLC
Pass Through Certs., Series B
9.24% due 07/02/17............................. 386,272 393,997
----------
1,203,022
----------
ELECTRIC-INTEGRATED -- 0.7%
Mirant Americas Generation LLC
Senior Notes
8.50% due 10/01/21............................. 315,000 270,900
50
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
ELECTRIC-INTEGRATED (CONTINUED)
Mirant Mid-Atlantic LLC
Pass Through Certs., Series B
9.13% due 06/30/17.......................... $ 289,761 $ 295,557
Southern Energy, Inc.
Escrow Notes
7.90% due 07/15/09+(1)(2)................... 3,525,000 0
Texas Competitive Electric Holdings Co. LLC/
TCEH Finance, Inc.
Senior Sec. Notes
11.50% due 10/01/20*........................ 295,000 236,000
----------
802,457
----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.8%
Freescale Semiconductor, Inc.
Company Guar. Notes
8.88% due 12/15/14.......................... 308,000 312,620
Freescale Semiconductor, Inc.
Senior Sec. Notes
9.25% due 04/15/18*......................... 435,000 446,962
Freescale Semiconductor, Inc.
Company Guar. Notes
10.75% due 08/01/20......................... 111,000 111,000
----------
870,582
----------
ENTERPRISE SOFTWARE/SERVICE -- 0.3%
Mantech International Corp.
Company Guar. Notes
7.25% due 04/15/18.......................... 300,000 297,000
----------
FINANCE-AUTO LOANS -- 3.1%
Credit Acceptance Corp.
Senior Sec. Notes
9.13% due 02/01/17.......................... 685,000 674,725
Ford Motor Credit Co. LLC
Senior Notes
6.63% due 08/15/17.......................... 495,000 515,447
Ford Motor Credit Co. LLC
Senior Notes
8.13% due 01/15/20.......................... 750,000 850,839
Ford Motor Credit Co. LLC
Senior Notes
8.70% due 10/01/14.......................... 1,275,000 1,377,291
----------
3,418,302
----------
FINANCE-CONSUMER LOANS -- 1.5%
SLM Corp.
Senior Notes
6.25% due 01/25/16.......................... 335,000 328,814
SLM Corp.
Senior Notes
8.00% due 03/25/20.......................... 211,000 208,299
SLM Corp.
Senior Notes
8.45% due 06/15/18.......................... 484,000 503,441
TMX Finance LLC/TitleMax Finance Corp.
Senior Sec. Notes
13.25% due 07/15/15......................... 580,000 623,500
----------
1,664,054
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
FOOD-MEAT PRODUCTS -- 0.5%
Smithfield Foods, Inc.
Senior Sec. Notes
10.00% due 07/15/14......................... $ 475,000 $ 539,125
----------
FUNERAL SERVICES & RELATED ITEMS -- 0.3%
Service Corp. International
Senior Notes
7.63% due 10/01/18.......................... 332,000 351,090
----------
INDEPENDENT POWER PRODUCERS -- 1.7%
Calpine Corp.
Senior Sec. Notes
7.50% due 02/15/21*......................... 705,000 673,275
Calpine Corp.
Escrow Notes
8.75% due 07/15/13+(1)(2)................... 3,485,000 0
NRG Energy, Inc.
Company Guar. Notes
7.38% due 01/15/17.......................... 750,000 773,437
RRI Energy, Inc.
Senior Notes
7.88% due 06/15/17.......................... 440,000 404,800
----------
1,851,512
----------
INSURANCE-MULTI-LINE -- 0.8%
Hartford Financial Services Group, Inc. FRS
Jr. Sub. Debentures
8.13% due 06/15/68.......................... 965,000 907,100
----------
MACHINERY-FARMING -- 1.1%
Case New Holland, Inc.
Company Guar. Notes
7.75% due 09/01/13.......................... 925,000 964,312
Case New Holland, Inc.
Senior Notes
7.88% due 12/01/17.......................... 230,000 244,950
----------
1,209,262
----------
MACHINERY-GENERAL INDUSTRIAL -- 0.6%
CPM Holdings, Inc.
Senior Sec. Notes
10.58% due 09/01/14......................... 595,000 630,700
----------
MEDICAL INFORMATION SYSTEMS -- 0.8%
IMS Health, Inc.
Senior Notes
12.50% due 03/01/18*........................ 840,000 924,000
----------
MEDICAL LABS & TESTING SERVICES -- 0.6%
American Renal Holdings Co., Inc.
Senior Sec. Notes
8.38% due 05/15/18.......................... 650,000 653,250
----------
MEDICAL PRODUCTS -- 0.9%
LVB Acquisition Holding LLC
Company Guar. Notes
10.00% due 10/15/17......................... 473,000 487,190
LVB Acquisition Holding LLC
Company Guar. Notes
10.38% due 10/15/17(3)...................... 481,000 493,025
----------
980,215
----------
51
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
MEDICAL-BIOMEDICAL/GENE -- 0.1%
STHI Holding Corp.
Sec. Notes
8.00% due 03/15/18*................... $ 125,000 $ 120,625
----------
MEDICAL-DRUGS -- 0.3%
Valeant Pharmaceuticals International
Company Guar. Notes
6.75% due 08/15/21*................... 425,000 368,156
----------
MEDICAL-HOSPITALS -- 3.0%
Community Health Systems, Inc.
Company Guar. Notes
8.88% due 07/15/15.................... 630,000 618,975
HCA, Inc.
Senior Sec. Notes
6.50% due 02/15/20.................... 390,000 381,225
HCA, Inc.
Senior Sec. Notes
7.88% due 02/15/20.................... 1,030,000 1,066,050
HCA, Inc.
Senior Sec. Notes
8.50% due 04/15/19.................... 550,000 583,000
Tenet Healthcare Corp.
Senior Sec. Notes
9.00% due 05/01/15.................... 595,000 627,725
----------
3,276,975
----------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.5%
Radiation Therapy Services, Inc.
Company Guar. Notes
9.88% due 04/15/17.................... 660,000 562,650
----------
MOTION PICTURES & SERVICES -- 0.2%
NAI Entertainment Holdings LLC
Senior Sec. Notes
8.25% due 12/15/17*................... 170,000 175,100
----------
MULTIMEDIA -- 0.0%
Haights Cross Operating Co. FRS
Limited Guar. Notes
16.00% due 03/15/14+(1)(2)(7)......... 187,319 23,415
----------
NON-FERROUS METALS -- 0.0%
Renco Metals, Inc.
Company Guar. Notes
11.50% due 07/01/03+(1)(2)(5)(6)...... 2,150,000 0
----------
OFFICE AUTOMATION & EQUIPMENT -- 0.7%
CDW LLC/CDW Finance Corp.
Senior Sec. Notes
8.00% due 12/15/18*................... 545,000 539,550
CDW LLC/CDW Finance Corp.
Company Guar. Notes
8.50% due 04/01/19*................... 301,000 264,880
CDW LLC/CDW Finance Corp.
Company Guar. Notes
11.00% due 10/12/15................... 6,000 5,985
CDW LLC/CDW Finance Corp.
Company Guar. Notes
11.50% due 10/12/15(4)................ 6,832 6,815
----------
817,230
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
OFFICE SUPPLIES & FORMS -- 0.5%
ACCO Brands Corp.
Senior Sec. Notes
10.63% due 03/15/15........................ $ 475,000 $ 510,625
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 3.7%
Antero Resources Finance Corp.
Senior Notes
7.25% due 08/01/19*........................ 310,000 294,500
Antero Resources Finance Corp.
Company Guar. Notes
9.38% due 12/01/17......................... 535,000 556,400
Newfield Exploration Co.
Senior Sub. Notes
7.13% due 05/15/18......................... 260,000 269,100
Petroleum Development Corp.
Senior Notes
12.00% due 02/15/18........................ 90,000 96,300
Pioneer Natural Resources Co.
Senior Notes
6.65% due 03/15/17......................... 1,330,000 1,423,752
Range Resources Corp.
Company Guar. Notes
5.75% due 06/01/21......................... 545,000 565,437
Range Resources Corp.
Company Guar. Notes
6.75% due 08/01/20......................... 355,000 378,075
Rosetta Resources, Inc.
Company Guar. Notes
9.50% due 04/15/18......................... 505,000 515,100
----------
4,098,664
----------
OIL FIELD MACHINERY & EQUIPMENT -- 0.4%
Thermon Industries, Inc.
Sec. Notes
9.50% due 05/01/17......................... 427,000 444,080
----------
OIL-FIELD SERVICES -- 1.1%
Aquilex Holdings LLC/Aquilex Finance Corp.
Company Guar. Notes
11.13% due 12/15/16........................ 245,000 107,800
Basic Energy Services, Inc.
Company Guar. Notes
7.75% due 02/15/19*........................ 485,000 460,750
Hornbeck Offshore Services, Inc.
Company Guar. Notes
8.00% due 09/01/17......................... 655,000 651,725
----------
1,220,275
----------
PAPER & RELATED PRODUCTS -- 1.5%
Clearwater Paper Corp.
Company Guar. Notes
7.13% due 11/01/18......................... 160,000 158,800
Georgia-Pacific LLC
Company Guar. Notes
5.40% due 11/01/20*........................ 70,000 71,212
Georgia-Pacific LLC
Company Guar. Notes
7.13% due 01/15/17*........................ 290,000 303,896
52
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
PAPER & RELATED PRODUCTS (CONTINUED)
Georgia-Pacific LLC
Company Guar. Notes
8.25% due 05/01/16*..................... $ 425,000 $ 469,770
Neenah Paper, Inc.
Company Guar. Notes
7.38% due 11/15/14...................... 691,000 677,180
----------
1,680,858
----------
PHARMACY SERVICES -- 0.4%
BioScrip, Inc.
Company Guar. Notes
10.25% due 10/01/15..................... 440,000 440,000
----------
PHYSICAL THERAPY/REHABILITATION CENTERS -- 0.5%
Healthsouth Corp.
Company Guar. Notes
7.25% due 10/01/18...................... 565,000 536,750
----------
PIPELINES -- 2.9%
El Paso Corp.
Senior Notes
6.50% due 09/15/20...................... 545,000 582,004
El Paso Corp.
Senior Notes
6.88% due 06/15/14...................... 700,000 786,029
El Paso Corp.
Senior Notes
7.00% due 06/15/17...................... 505,000 565,684
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/20...................... 681,000 699,727
Kinder Morgan Finance Co. LLC
Senior Sec. Notes
6.00% due 01/15/18*..................... 535,000 528,313
----------
3,161,757
----------
PRINTING-COMMERCIAL -- 0.3%
Cenveo Corp.
Company Guar. Notes
7.88% due 12/01/13...................... 400,000 280,000
----------
PUBLISHING-BOOKS -- 0.4%
TL Acquisitions, Inc.
Company Guar. Notes
10.50% due 01/15/15*.................... 630,000 403,200
----------
PUBLISHING-PERIODICALS -- 0.1%
Nielsen Finance LLC/Nielsen Finance Co.
Company Guar. Notes
11.50% due 05/01/16..................... 114,000 129,390
----------
REAL ESTATE INVESTMENT TRUSTS -- 1.0%
Host Hotels & Resorts, Inc.
Company Guar. Notes
6.00% due 11/01/20...................... 1,080,000 1,050,300
----------
RECYCLING -- 0.0%
Aleris International, Inc.
Escrow Notes
9.00% due 12/15/14+(1)(2)............... 2,145,000 215
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------
RETAIL-ARTS & CRAFTS -- 0.7%
Michaels Stores, Inc.
Company Guar. Notes
7.75% due 11/01/18..................... $ 775,000 $ 724,625
----------
RETAIL-DRUG STORE -- 0.7%
CVS Caremark Corp. FRS
Jr. Sub. Notes
6.30% due 06/01/62..................... 240,000 232,200
Rite Aid Corp.
Senior Sec. Notes
9.75% due 06/12/16..................... 125,000 131,875
Rite Aid Corp.
Sec. Notes
10.25% due 10/15/19.................... 375,000 390,937
----------
755,012
----------
RETAIL-PROPANE DISTRIBUTION -- 0.3%
Ferrellgas LP/Ferrellgas Finance Corp.
Senior Notes
6.50% due 05/01/21..................... 371,000 315,350
----------
RETAIL-REGIONAL DEPARTMENT STORES -- 1.6%
Federated Retail Holdings, Inc.
Company Guar. Notes
5.90% due 12/01/16..................... 1,187,000 1,302,761
Macy's Retail Holdings, Inc.
Company Guar. Notes
6.70% due 09/15/28..................... 72,000 77,311
Macy's Retail Holdings, Inc.
Company Guar. Notes
6.90% due 04/01/29..................... 233,000 261,479
Macy's Retail Holdings, Inc.
Company Guar. Notes
7.00% due 02/15/28..................... 80,000 86,513
----------
1,728,064
----------
RUBBER/PLASTIC PRODUCTS -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/07+(1)(2)(5)(6)....... 550,000 0
----------
SATELLITE TELECOM -- 0.7%
EH Holding Corp.
Senior Sec. Notes
6.50% due 06/15/19*.................... 750,000 721,875
----------
SHIPBUILDING -- 0.7%
Huntington Ingalls Industries, Inc.
Company Guar. Notes
6.88% due 03/15/18*.................... 455,000 423,150
Huntington Ingalls Industries, Inc.
Company Guar. Notes
7.13% due 03/15/21*.................... 361,000 334,827
----------
757,977
----------
SPECIAL PURPOSE ENTITY -- 0.5%
Dolphin Subsidiary II, Inc.
Senior Notes
7.25% due 10/15/21*.................... 540,000 523,800
----------
53
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
TELECOM SERVICES -- 0.8%
GCI, Inc.
Senior Notes
6.75% due 06/01/21....................... $ 280,000 $ 263,900
West Corp.
Company Guar. Notes
7.88% due 01/15/19....................... 675,000 634,500
-----------
898,400
-----------
TELECOMMUNICATION EQUIPMENT -- 0.5%
Sorenson Communications, Inc.
Senior Sec. Notes
10.50% due 02/01/15*..................... 980,000 568,400
-----------
TELEPHONE-INTEGRATED -- 3.8%
Frontier Communications Corp.
Senior Notes
7.13% due 03/15/19....................... 2,115,000 2,014,537
Qwest Communications International, Inc.
Company Guar. Notes
8.00% due 10/01/15....................... 570,000 592,800
Windstream Corp.
Company Guar. Notes
7.75% due 10/15/20....................... 1,330,000 1,296,750
Windstream Corp.
Company Guar. Notes
8.13% due 09/01/18....................... 275,000 277,063
-----------
4,181,150
-----------
TELEVISION -- 0.5%
Sinclair Television Group, Inc.
Sec. Notes
9.25% due 11/01/17*...................... 540,000 567,000
-----------
THEATERS -- 0.6%
AMC Entertainment, Inc.
Company Guar. Notes
8.75% due 06/01/19....................... 425,000 417,563
Regal Entertainment Group
Company Guar. Notes
9.13% due 08/15/18....................... 215,000 212,850
-----------
630,413
-----------
TRANSPORT-MARINE -- 1.2%
ACL I Corp.
Senior Notes
10.63% due 02/15/16*(3).................. 708,106 552,322
Marquette Transportation Co./Marquette
Transportation Finance Corp.
Sec. Notes
10.88% due 01/15/17...................... 785,000 756,544
-----------
1,308,866
-----------
WEB HOSTING/DESIGN -- 0.3%
Equinix, Inc.
Senior Notes
7.00% due 07/15/21....................... 350,000 348,688
-----------
TOTAL U.S. CORPORATE BONDS & NOTES
(cost $90,159,993)....................... 87,146,705
-----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES -- 8.4%
BANKS-COMMERCIAL -- 1.0%
LBG Capital No.1 PLC
Bank Guar. Notes
7.88% due 11/01/20*................. $1,430,000 $1,036,750
----------
COMPUTERS-MEMORY DEVICES -- 0.9%
Seagate HDD Cayman
Company Guar. Notes
6.88% due 05/01/20.................. 685,000 630,200
Seagate Technology HDD Holdings
Company Guar. Notes
6.80% due 10/01/16.................. 360,000 358,200
----------
988,400
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.4%
Bombardier, Inc.
Senior Notes
7.75% due 03/15/20*................. 445,000 473,925
----------
DIVERSIFIED MINERALS -- 0.8%
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
7.00% due 11/01/15*................. 955,000 888,150
----------
ELECTRIC-GENERATION -- 0.1%
Intergen NV
Senior Sec. Notes
9.00% due 06/30/17*................. 125,000 127,188
----------
INDEPENDENT POWER PRODUCERS -- 0.0%
AES Drax Energy, Ltd.
Sec. Notes
11.50% due 08/30/10+(1)(2)(5)(9).... 4,460,000 0
----------
INTERNET CONNECTIVITY SERVICES -- 0.3%
eAccess, Ltd.
Company Guar. Notes
8.25% due 04/01/18*................. 340,000 312,800
----------
INVESTMENT COMPANIES -- 0.5%
Offshore Group Investments, Ltd.
Senior Sec. Notes
11.50% due 08/01/15................. 455,000 468,650
Offshore Group Investments, Ltd.
Senior Sec. Notes
11.50% due 08/01/15*................ 115,000 118,450
----------
587,100
----------
METAL PROCESSORS & FABRICATION -- 0.0%
International Utility Structures
Escrow Notes
10.75% due 02/01/08+(1)(2).......... 2,150,000 0
----------
MULTIMEDIA -- 1.2%
Quebecor Media, Inc.
Senior Notes
7.75% due 03/15/16.................. 1,280,000 1,279,187
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.6%
Harvest Operations Corp.
Company Guar. Notes
6.88% due 10/01/17*................. 640,000 646,400
----------
54
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
OIL FIELD MACHINERY & EQUIPMENT -- 0.4%
Sevan Marine ASA
Sec. Notes
12.00% due 08/10/15*(7)..................... $ 500,000 $ 340,000
Sevan Marine ASA
Senior Notes
15.00% due 07/22/12(2)(17).................. 110,000 107,296
----------
447,296
----------
PAPER & RELATED PRODUCTS -- 1.0%
Cascades, Inc.
Company Guar. Notes
7.88% due 01/15/20.......................... 320,000 300,800
Fibria Overseas Finance, Ltd.
Company Guar. Notes
7.50% due 05/04/20*......................... 802,000 753,880
----------
1,054,680
----------
SATELLITE TELECOM -- 0.6%
Intelsat Jackson Holdings SA
Company Guar. Notes
7.25% due 04/01/19*......................... 660,000 612,150
----------
SPECIAL PURPOSE ENTITY -- 0.0%
Hellas Telecommunications Luxembourg II FRS
Sub. Notes
6.03% due 01/15/15+*(7)(9).................. 1,025,000 28,188
----------
TELECOM SERVICES -- 0.6%
Wind Acquisition Finance SA
Sec. Notes
11.75% due 07/15/17*........................ 810,000 688,500
----------
TOTAL FOREIGN CORPORATE BONDS & NOTES
(cost $15,496,165).......................... 9,170,714
----------
LOANS(10)(11) -- 4.4%
BEVERAGES-NON-ALCOHOLIC -- 0.2%
Le-Natures, Inc.
BTL
9.39% due 03/01/11+(2)(5)(8)................ 1,200,000 186,000
----------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.0%
TOUSA, Inc.
BTL
12.25% due 08/15/13(2)(4)................... 1,651,385 49,542
----------
CASINO SERVICES -- 1.3%
Herbst Gaming, Inc.
BTL
10.00% due 12/31/15(2)...................... 408,310 410,351
Holding Gaming Borrower LP
BTL-B
12.00% due 02/19/13(2)...................... 995,000 1,059,675
----------
1,470,026
----------
COMMERCIAL SERVICES -- 0.3%
Vertrue, Inc.
2/nd/ Lien
9.25% due 08/14/15(2)....................... 1,010,000 353,500
----------
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
ELECTRIC-INTEGRATED -- 1.3%
Texas Competitive Electric Holdings Co. LLC
BTL
4.77% due 10/10/14(2)........................... $1,977,835 $1,403,438
----------
MEDICAL-DRUGS -- 0.6%
Triax Pharmaceuticals LLC
BTL
16.50% due 08/31/11+(1)(2)(5)(12)............... 1,669,715 631,486
----------
THEATERS -- 0.7%
AMC Entertainment Holdings, Inc.
BTL
5.35% due 06/15/12(2)(4)........................ 803,357 789,298
----------
TOTAL LOANS
(cost $9,329,528)............................... 4,883,290
----------
COMMON STOCK -- 1.0%
BUILDING PRODUCTS-DOORS & WINDOWS -- 0.0%
Masonite Worldwide Holdings+(16)................. 692 19,722
----------
CASINO SERVICES -- 0.0%
Capital Gaming International, Inc.+(1)(2)........ 77 0
Greektown, Inc.+(1)(2)........................... 370 0
----------
0
----------
FOOD-MISC. -- 0.5%
Wornick Co.+(1)(2)............................... 7,270 558,191
----------
GAMBLING (NON-HOTEL) -- 0.0%
Shreveport Gaming Holdings, Inc.+(1)(2).......... 14,150 3,608
----------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC+(1)(2)(13)............. 128,418 642
----------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.0%
Critical Care Systems International, Inc.+(1)(2). 69,700 1,742
----------
MULTIMEDIA -- 0.1%
Haights Cross Communication, Inc.+(1)(2)......... 19,388 30,439
----------
PAPER & RELATED PRODUCTS -- 0.4%
Caraustar Industries, Inc.+(1)(2)................ 73 458,567
----------
TOTAL COMMON STOCK
(cost $2,901,693)............................... 1,072,911
----------
MEMBERSHIP INTEREST CERTIFICATES -- 0.2%
CASINO SERVICES -- 0.2%
Herbst Gaming, Inc.+(2)(17)
(cost $232,721)................................. 23,439 266,620
----------
PREFERRED STOCK -- 2.1%
DIVERSIFIED BANKING INSTITUTIONS -- 1.3%
GMAC Capital Trust I FRS
8.13%........................................... 79,000 1,441,750
----------
DIVERSIFIED FINANCIAL SERVICES -- 0.8%
Citigroup Capital XIII FRS
7.88%........................................... 34,000 897,940
----------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC, Class C+(1)(2)........ 39,177 196
----------
TOTAL PREFERRED STOCK
(cost $3,003,060)............................... 2,339,886
----------
55
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------
WARRANTS+ -- 0.1%
BUILDING PRODUCTS-DOORS & WINDOWS -- 0.0%
Masonite Worldwide Holdings
Expires 05/20/14
(strike price $55.31)(2)(16)......... $ 3,355 $ 0
Masonite Worldwide Holdings
Expires 05/20/16
(strike price $55.31)(2)(16)......... 2,517 0
------------
0
------------
PUBLISHING-PERIODICALS -- 0.0%
Reader's Digest Assoc., Inc.
Expires 02/19/14(1)(2)............... 3,250 0
------------
TELEVISION -- 0.1%
Ion Media Networks, Inc.
Expires 12/18/16
(strike price $687.50)(1)(2)(17)..... 327 40,875
Ion Media Networks, Inc.
Expires 12/18/16
(strike price $500.00)(1)(2)(17)..... 327 73,575
------------
114,450
------------
TOTAL WARRANTS
(cost $3,365)........................ 114,450
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $122,959,769).................. 106,814,291
------------
REPURCHASE AGREEMENTS -- 1.2%
Bank of America Securities LLC Joint
Repurchase Agreement(14)............. $320,000 $ 320,000
BNP Paribas SA Joint
Repurchase Agreement(14)............. 240,000 240,000
Deutsche Bank AG Joint
Repurchase Agreement(14)............. 220,000 220,000
Royal Bank of Scotland Joint
Repurchase Agreement(14)............. 240,000 240,000
UBS Securities LLC Joint
Repurchase Agreement(14)............. 275,000 275,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $1,295,000).................... 1,295,000
------------
TOTAL INVESTMENTS
(cost $124,254,769)(15).............. 98.6% 108,109,291
Other assets less liabilities........... 1.4 1,531,283
-------- ------------
NET ASSETS 100.0% $109,640,574
======== ============
--------
+ Non-income producing security
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At September 30, 2011,
the aggregate value of these securities was $27,401,285 representing 25.0%
of net assets. Unless otherwise indicated these securities are not
considered to be illiquid.
(1) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(2) Illiquid security. At September 30, 2011, the aggregate value of these
securities was $6,448,671 representing 5.9% of net assets.
(3) Income may be received in cash or additional bonds at the discretion of
the issuer.
(4) PIK ("Payment-in-Kind") security. Bond, loan or preferred stock that pays
interest/dividends in the form of additional bonds, preferred stocks or
loans.
(5) Security is in default and did not pay principal at maturity.
(6) Company has filed for Chapter 7 bankruptcy protection.
(7) Security in default
(8) Company has filed for Chapter 11 bankruptcy protection.
(9) Company has filed for bankruptcy protection in country of issuance.
(10) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major United States banks, or the certificate
of deposit rate. Senior loans are generally considered to be restrictive
in that the Fund is ordinarily contractually obligated to receive approval
from the Agent Bank and/or borrower prior to the disposition of a senior
loan.
(11) Senior loans in the Fund's Portfolio are generally subject to mandatory
and/or optional prepayment. Because of these mandatory prepayment
conditions and because there may be significant economic incentives for a
borrower to prepay, prepayments may occur. As a result, the actual
remaining maturity may be substantially less than the stated maturities
shown.
(12) A portion of the interest is paid in the form of additional bonds/loans.
(13) Consist of more than one class of securities traded together as a unit.
(14) See Note 2 for details of Joint Repurchase Agreements.
(15) See Note 5 for cost of investments on a tax basis.
(16) Fair valued security. Securities are classified as Level 2 based on the
securities valuation inputs; see Note 2.
(17) Denotes a restricted security that: (a) cannot be offered for public sale
without first being registered, or being able to take advantage of an
exemption from registration, under the Securities Act of 1933, as amended
(the "1933 Act"); (b) is subject to a contractual restriction on public
sales; or (c) is otherwise subject to a restriction on sales by operation
of applicable law. Restricted securities are valued pursuant to Note 2.
Certain restricted securities held by the Fund may not be sold except in
exempt transactions or in a public offering registered under the 1933 Act.
The Fund has no right to demand registration of these securities. The risk
of investing in certain restricted securities is greater than the risk of
investing in the securities of widely held, publicly traded companies. To
the extent applicable, lack of a secondary market and resale restrictions
may result in the inability of a Fund to sell a security at a fair price
and may substantially delay the sale of the security. In addition, certain
restricted securities may exhibit greater price volatility
56
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
than securities for which secondary markets exist. As of September 30,
2011, the SunAmerica High Yield Bond Fund held the following restricted
securities:
PRINCIPAL VALUE % OF
ACQUISITION AMOUNT/ ACQUISITION PER NET
NAME DATE SHARES COST VALUE SHARE ASSETS
---- ----------- --------- ----------- -------- ------- ------
Herbst Gaming, Inc.
Membership
Interest
Certificate........ 03/26/2008 23,439 $232,721 $266,620 $ 11.38 0.24%
Ion Media Networks,
Inc. Expires
12/18/16 (strike
price $687.50)
Warrants........... 03/01/2011 327 -- 40,875 125.00 0.04
Ion Media Networks,
Inc. Expires
12/18/16 (strike
price $500.00)
Warrants........... 11/11/2010 327 -- 73,575 225.00 0.07
Sevan Marine ASA
15.00% due
07/22/12 Bond...... 07/19/2011 110,000 107,309 107,296 97.54 0.10
-------- ----
$488,366 0.45%
======== ====
BTL --Bank Term Loan
FRS --Floating Rate Securities
The rates shown on FRS are the current interest rates at September 30, 2011 and
unless noted otherwise, the dates shown are the original maturity dates.
57
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2011 (see Note 2):
LEVEL 1--UNADJUSTED LEVEL 2--OTHER LEVEL 3--SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
------------------- ----------------- -------------------- ------------
Long-Term Investment Securities:
Convertible Bonds & Notes........ $ -- $ 1,819,715 $ -- $ 1,819,715
U.S. Corporate Bonds & Notes..... -- 86,433,521 713,184 87,146,705
Foreign Corporate Bonds & Notes.. -- 9,170,714 0 9,170,714
Loans............................ -- 1,813,789 3,069,501 4,883,290
Common Stock..................... -- 19,722 1,053,189 1,072,911
Membership Interest Certificates. -- 266,620 -- 266,620
Preferred Stock.................. 2,339,690 -- 196 2,339,886
Warrants......................... -- 0 114,450 114,450
Repurchase Agreements.............. -- 1,295,000 -- 1,295,000
---------- ------------ ---------- ------------
TOTAL.............................. $2,339,690 $100,819,081 $4,950,520 $108,109,291
========== ============ ========== ============
The following is a reconciliation of Level 3 assets which significant
unobservable inputs were used to determine fair value:
U.S. CORPORATE FOREIGN CORPORATE COMMON PREFERRED
BONDS & NOTES BONDS & NOTES LOANS STOCK STOCK WARRANTS
-------------- ----------------- ----------- ---------- --------- --------
Balance as of 3/31/2011.............. $ 4,260,968 $ 0 $ 3,861,973 $1,426,624 $196 $101,370
Accrued discounts.................... 24,439 -- 51,695 -- -- --
Accrued premiums..................... (28,553) -- (130,005) -- -- --
Realized gain........................ 8,437 -- 15,546 618,340 -- --
Realized loss........................ (1,630,581) -- -- -- -- --
Change in unrealized appreciation(1). 1,548,072 -- 7,604 119,347 -- 31,065
Change in unrealized depreciation(1). (213,913) -- (1,003,139) (297,643) -- (17,985)
Net purchases........................ 16,333 -- 3,331,346 -- -- --
Net sales............................ (3,272,018) -- (3,065,519) (813,479) -- --
Transfers in of Level 3(2)........... -- -- -- -- -- --
Transfers out of Level 3(2).......... -- -- -- -- -- --
----------- --- ----------- ---------- ---- --------
Balance as of 09/30/2011............. $ 713,184 $ 0 $ 3,069,501 $1,053,189 $196 $114,450
=========== === =========== ========== ==== ========
--------
(1)The total change in unrealized appreciation (depreciation) included in the
statement of operations attributable to level 3 investments still held at
September 30, 2011 includes:
U.S. CORPORATE FOREIGN CORPORATE COMMON PREFERRED
BONDS & NOTES BONDS & NOTES LOANS STOCK STOCK WARRANTS
- -------------- ----------------- --------- ------- --------- --------
$(172,306) $-- $(995,535) $(2,631) $-- $13,080
========= === ========= ======= === =======
--------
(2)The Fund's policy is to recognize transfers in and transfers out as of the
end of the reporting period.
See Notes to Financial Statements
58
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
Note 1. Organization
The SunAmerica Income Funds is an open-end diversified management investment
company organized as a Massachusetts business trust (the "Trust"). It
currently consists of four different series (each, a "Fund" and
collectively, the "Funds"). Each Fund is a separate series of the Trust with
distinct investment objectives and/or strategies. Each Fund is managed by
SunAmerica Asset Management Corp. (the "Adviser" or "SunAmerica"), an
indirect wholly-owned subsidiary of American International Group, Inc.
("AIG"). An investor may invest in one or more of the following Funds:
SunAmerica U.S. Government Securities Fund, SunAmerica GNMA Fund, SunAmerica
Strategic Bond Fund and SunAmerica High Yield Bond Fund. On September 23,
2011, the SunAmerica Tax Exempt Insured Fund of the SunAmerica Income Funds
was liquidated. The Funds are considered to be separate entities for
financial and tax reporting purposes. The investment objectives and
principal investment techniques for each of the Funds are as follows:
U.S. GOVERNMENT SECURITIES FUND seeks high current income consistent with
relative safety of capital by the active trading of U.S. Government
securities, without regard to the maturities of such securities. Under
normal market conditions, at least 80% of the Fund's net assets plus any
borrowing for investment purposes will be invested in such securities.
GNMA FUND seeks current income, with capital appreciation as a secondary
objective, by the active trading of mortgage-backed securities issued or
guaranteed by the Government National Mortgage Association (GNMA) without
regard to the maturities of such securities. Under normal market conditions,
at least 80% of the Fund's net assets plus any borrowing for investment
purposes will be invested in such securities. The Fund may also invest in
other types of U.S. Government securities.
STRATEGIC BOND FUND seeks a high level of total return by the active trading
of a broad range of bonds, including both investment grade and
non-investment grade U.S. and foreign bonds (which may include "junk
bonds"), U.S. Government and agency obligations, and mortgage-backed
securities, without regard to the maturities of such securities. Under
normal market conditions, at least 80% of the Fund's net assets plus any
borrowing for investment purposes will be invested in bonds.
HIGH YIELD BOND FUND seeks a high level of total return by the active
trading of below-investment grade U.S. and foreign junk bonds (rated below
Baa by Moody's or below BBB by S&P) or determined to be of comparable
quality by the investment advisor without regard to the maturities of such
securities. For purposes of this policy, bonds include fixed-income
securities other than short-term commercial paper and preferred stock. Under
normal market conditions, at least 80% of the Fund's net assets plus
borrowing for investment purposes will be invested in such securities.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statement of Assets and Liabilities. The cost structure
for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, purchases of Class A shares in amounts of
$1,000,000 or more will be purchased at net asset value but will be subject
to a contingent deferred sales charge on redemptions made within two years
of purchase.
Class B shares are offered without an initial sales charge, although a
declining contingent deferred sales charge may be imposed on redemptions
made within six years of purchase. Class B shares of each Fund convert
automatically to Class A shares on the first business day of the month
following the eighth anniversary of the issuance of such Class B shares and
at such time will be subject to the lower distribution fee applicable to
Class A shares.
Class C shares are offered at net asset value per share without an initial
sales charge and may be subject to a contingent deferred sales charge on
redemptions made within 12 months of purchase.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions except as may otherwise be provided in the Trust's
registration statement. Class A, Class B and Class C shares each makes
distribution and account maintenance and service fee payments under the
distribution plan pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "1940 Act") except that Class B and Class C shares are
subject to higher distribution fees.
59
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
INDEMNIFICATIONS: The Trust's organizational documents provide current and
former officers and trustees with a limited indemnification against
liabilities arising out of the performance of their duties to the Trust. In
addition, pursuant to Indemnification Agreements between the Trust and each
of the current trustees who is not an "interested person," as defined in
Section 2(a)(19) of the 1940 Act, of the Trust (collectively, the
"Disinterested Trustees"), the Trust provides the Disinterested Trustees
with a limited indemnification against liabilities arising out of the
performance of their duties to the Trust, whether such liabilities are
asserted during or after their service as trustees. In addition, in the
normal course of business the Trust enters into contracts that contain the
obligation to indemnify others. The Trust's maximum exposure under these
arrangements is unknown. Currently, however, the Trust expects the risk of
loss to be remote.
Note 2. 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
their financial statements:
SECURITY VALUATIONS: Stocks are generally valued based upon closing sales
prices reported on recognized securities exchanges for which the securities
are principally traded. Stocks listed on the NASDAQ are valued using the
NASDAQ Official Closing Price ("NOCP"). Generally, the NOCP will be the last
sale price unless the reported trade for the stock is outside the range of
the bid/ask price. In such cases, the NOCP will be normalized to the nearer
of the bid or ask price. For listed securities having no sales reported and
for unlisted securities, such securities will be valued based upon the last
reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the U.S. are
valued at the last sale price on such exchanges on the day of valuation, or
if there is no sale on the day of valuation, at the last-reported bid price.
If a security's price is available from more than one exchange, a Fund uses
the exchange that is the primary market for the security. However, depending
on the foreign market, closing prices may be up to 15 hours old when they
are used to price a Fund's shares, and the Fund may determine that certain
closing prices do not reflect the fair value of the security. This
determination will be based on review of a number of factors, including
developments in foreign markets, the performance of U.S. securities markets,
and the performance of instruments trading in U.S. markets that represent
foreign securities and baskets of foreign securities. If a Fund determines
that closing prices do not reflect the fair value of the securities, the
Fund will adjust the previous closing prices in accordance with pricing
procedures approved by the Board of Trustee's (the "Board") to reflect what
it believes to be the fair value of the securities as of the close of
regular trading on the NYSE. The Funds may also fair value securities in
other situations, for example, when a particular foreign market is closed
but the Funds are open. For foreign equity securities, the Funds use an
outside pricing service to provide it with closing market prices and
information used for adjusting those prices.
Non-convertible bonds and debentures, other long-term debt securities, and
short term debt securities with maturities in excess of 60 days, are valued
at bid prices obtained for the day of valuation from a bond pricing service,
when such prices are available. The pricing services may use valuation
models or matrix pricing which considers information with respect to
comparable bond and note transactions, quotations from bond dealers, or by
reference to other securities that are considered comparable in such
characteristics as rating, interest rate, and maturity date, option adjusted
spreads models, prepayments projections, interest rate spreads, and yield
curves to determine current value. If a vendor quote is unavailable the
securities may be priced at the mean of two independent quotes obtained from
brokers.
Other securities are valued on the basis of last sale or bid price (if a
last sale price is not available) in what is, in the opinion of the Adviser,
the broadest and most representative market, that may be either a securities
exchange or over-the-counter market. Senior secured floating rate loans
("Loans") for which an active secondary market exists to a reliable degree,
will be valued at the mean of the last available bid and ask prices in the
market for such Loans, as provided by a third party pricing service.
Investments in open-end and closed-end registered investment companies that
do not trade on an exchange are valued at the end of day net asset value per
share. Investments in open-end and closed-end registered investment
companies that trade on an exchange are valued at the last sales price or
official closing price as of the close of the customary trading session on
the exchange where the security is principally traded.
60
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
Short-term securities with 60 days or less to maturity are amortized to
maturity based on their cost to a Fund if acquired within 60 days of
maturity or, if already held by the Fund on the 60th day, are amortized to
maturity based on the value determined on the 61st day.
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 fair valued, as determined
pursuant to procedures adopted in good faith by the Board. There is no
single standard for making fair value determinations, which may result in
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 levels listed below:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
referenced indices, quoted prices in inactive markets, adjusted quoted
prices in active markets, 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
September 30, 2011 are reported on a schedule following the Portfolio of
Investments.
FOREIGN CURRENCY TRANSLATION: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars based on the exchange rate of such currencies
against U.S. dollars on the date of valuation.
The Funds do not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at the end of the period. Similarly, the
Funds do not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
year.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities include foreign exchange gains and losses from currency
gains or losses realized between the trade and settlement dates of
securities transactions, the difference between the amounts of interest,
dividends and foreign withholding taxes recorded on the Fund's books and the
U.S. dollar equivalent amounts actually received or paid and changes in the
unrealized foreign exchange gains and losses relating to other assets and
liabilities arising as a result of changes in the exchange rate.
MORTGAGE-BACKED DOLLAR ROLLS: Certain Funds may enter into dollar roll
transactions using "to be announced" ("TBA") mortgage-backed securities
("TBA Rolls"). The Funds' policy is to record the components of TBA Rolls as
purchase/sale transactions. Any difference between the purchase and sale
price is recorded as a realized gain or loss on the date the transaction is
entered into. During the period ended September 30, 2011, the U.S.
Government Securities Fund and the GNMA Fund entered into dollar roll
transactions. Dollar roll transactions involve the risk that the market
value of the securities held by the Fund may decline below the price of the
securities that the Fund has sold but is obligated to repurchase under the
agreement. In the event that the buyer of securities in a dollar roll
transaction files bankruptcy or becomes insolvent, the Fund's use of the
proceeds from the sale of the securities may be restricted pending a
determination by the other party, or its trustee or receiver, whether to
enforce the Fund's obligation to repurchase the securities. The return
earned by the Fund with the proceeds of the dollar roll transaction may not
exceed transaction costs. For the period ended September 30, 2011, the U.S.
Government Securities Fund and the GNMA Fund had realized gains (losses)
from mortgage-backed dollar rolls of $318,516 and $1,419,551, respectively.
61
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
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 ("SEC")
guidance, 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 Fund may be delayed or limited.
As of September 30, 2011, the following Fund held an undivided interest in
the joint repurchase agreement with Bank of America:
PERCENTAGE PRINCIPAL
FUND INTEREST AMOUNT
---- ---------- ---------
High Yield Bond. 0.25% $320,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
Bank of America, dated September 30, 2011, bearing interest at a rate of
0.05% per annum, with a principal amount of $128,805,000, a repurchase price
of $128,805,054, and a maturity date of October 3, 2011. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT VALUE
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 1.25% 10/31/2015 $53,702,000 $55,201,972
U.S. Treasury Notes. 1.50% 6/30/2016 73,991,000 76,447,733
As of September 30, 2011, the following Fund held an undivided interest in
the joint repurchase agreement with BNP Paribas SA:
PERCENTAGE PRINCIPAL
FUND INTEREST AMOUNT
---- ---------- ---------
High Yield Bond. 0.24% $240,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
BNP Paribas SA, dated September 30, 2011, bearing interest at a rate of
0.02% per annum, with a principal amount of $99,720,000, a repurchase price
of $99,720,166, and a maturity date of October 3, 2011. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT VALUE
------------------ -------- --------- ----------- ------------
U.S. Treasury Bonds. 6.25% 5/15/2030 $66,019,500 $102,969,789
As of September 30, 2011, the following Fund held an undivided interest in
the joint repurchase agreement with Deutsche Bank AG:
PERCENTAGE PRINCIPAL
FUND INTEREST AMOUNT
---- ---------- ---------
High Yield Bond. 0.24% $220,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
Deutsche Bank AG, dated September 30, 2011, bearing interest at a rate of
0.02% per annum, with a principal amount of $90,660,000, a repurchase price
of $90,660,151, and a maturity date of October 3, 2011. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT VALUE
------------------ -------- ---------- ----------- ------------
U.S. Treasury Notes. 1.50% 12/31/2013 $89,535,000 $108,407,299
62
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
As of September 30, 2011, the following Fund held an undivided interest in
the joint repurchase agreement with Royal Bank of Scotland:
PERCENTAGE PRINCIPAL
FUND INTEREST AMOUNT
---- ---------- ---------
High Yield Bond. 0.24% $240,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
Royal Bank of Scotland, dated September 30, 2011, bearing interest at a rate
of 0.04% per annum, with a principal amount of $99,720,000, a repurchase
price of $99,720,332, and a maturity date of October 3, 2011. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT VALUE
------------------ -------- --------- ------------ ------------
U.S. Treasury Notes. 2.75% 2/15/2019 $100,000,000 $102,399,814
As of September 30, 2011, the following Funds held an undivided interest in
the joint repurchase agreement with State Street Bank & Trust Co.:
PERCENTAGE PRINCIPAL
FUND OWNERSHIP AMOUNT
---- ---------- -----------
U.S. Government Securities. 0.32% $ 1,060,000
GNMA....................... 1.00 3,276,000
Strategic Bond............. 3.12 10,213,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
State Street Bank & Trust Co., dated September 30, 2011, bearing interest at
a rate of 0.01% per annum, with a principal amount of $327,426,000, a
repurchase price of $327,426,273, and a maturity date of October 3, 2011.
The repurchase agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT VALUE
------------------ -------- ---------- ------------ ------------
U.S. Treasury Notes. 1.25% 10/31/2015 $100,000,000 $102,730,600
U.S. Treasury Notes. 1.88% 9/30/2017 5,500,000 5,706,250
U.S. Treasury Notes. 4.25% 8/15/2014 147,285,000 164,222,775
U.S. Treasury Notes. 4.25% 8/15/2015 53,650,000 61,316,102
As of September 30, 2011, the following Fund held an undivided interest in
the joint repurchase agreement with UBS Securities LLC:
PERCENTAGE PRINCIPAL
FUND INTEREST AMOUNT
---- ---------- ---------
High Yield Bond. 0.24% $275,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Securities LLC, dated September 30, 2011, bearing interest at a rate of
0.01% per annum, with a principal amount of $114,670,000, a repurchase price
of $114,670,096, and a maturity date of October 3, 2011. The repurchase
agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT VALUE
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 1.75% 7/31/2015 $70,000,000 $73,227,277
U.S. Treasury Notes. 2.13% 11/30/2014 41,815,600 44,303,846
SECURITIES TRANSACTIONS, INVESTMENT INCOME, EXPENSES, DIVIDENDS AND
DISTRIBUTIONS TO SHAREHOLDERS: Security transactions are recorded on a trade
date basis. Realized gains and losses on sales of investments are calculated
on the identified cost basis. Interest income is accrued daily from
settlement date except when collection is not expected. Dividend income is
recorded on the
63
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
ex-dividend date except for certain dividends from foreign securities, which
are recorded as soon as the Fund is informed after the ex-dividend date. For
financial statement purposes, the Funds amortize all premiums and accrete
all discounts on fixed income securities. Funds which earn foreign income
and capital gains may be subject to foreign withholding taxes at various
rates. Under applicable foreign law, a withholding tax may be imposed on
interest, dividends, and capital gains at various rates.
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 dividend-eligible shares, as appropriate) of each class of shares at the
beginning of the day (after adjusting for the current capital share activity
of the respective class).
Expenses common to all Funds, not directly related to individual Funds are
allocated among the Funds based on relative net assets or other appropriate
methods. In all other respects, expenses are charged to each Fund as
incurred on a specific identification basis. Interest earned on cash
balances held at the custodian is shown as custody credits on the Statement
of Operations.
Dividends from net investment income are accrued 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 Funds reserve the right to declare and pay dividends less frequently
than disclosed above, provided that the net realized capital gains and net
investment income, if any, are paid at least annually. 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 accounting principles generally accepted
in the United States of America. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent these differences
are permanent in nature, such amounts are reclassified within the capital
accounts at fiscal year end based on their federal tax-basis treatment;
temporary differences do not require reclassification. Net investment
income/loss, net realized gain/loss and net assets are not affected by these
reclassifications.
Each Fund intends to comply with the requirements of the Internal Revenue
Code, as amended, applicable to regulated investment companies and to
distribute all of their net income (taxable and tax exempt) to their
shareholders. Therefore, no federal tax provision is required. Each Fund is
considered a separate entity for tax purposes. Each Fund files U.S. federal
and certain state income tax returns. With few exceptions, each Fund is no
longer subject to U.S. federal and state tax examinations by tax authorities
for tax returns ending before 2007.
Note 3. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with SunAmerica. Under the Agreement, SunAmerica
provides continuous supervision of a Fund's portfolio and administers its
corporate affairs, subject to general review by the Trustees. In connection
therewith, SunAmerica furnishes the Funds with office facilities, maintains
certain of the Funds' books and records, and pays the salaries and expenses
of all personnel, including officers of the Funds, who are employees of
SunAmerica and its affiliates.
The Funds pay SunAmerica a monthly investment advisory and management fee
calculated daily at the following annual percentages of each Fund's average
daily net assets:
MANAGEMENT
ASSETS FEES
---------------------------- ----------
U.S. Government Securities Fund. $0 - $200 million 0.650%
(greater than) $200 million 0.620
(greater than) $400 million 0.550
GNMA Fund....................... $0 - $25 million 0.550
(greater than) $25 million 0.500
(greater than) $50 million 0.450
Strategic Bond Fund............. $0 - $350 million 0.650
(greater than) $350 million 0.600
High Yield Bond Fund............ $0 - $200 million 0.750
(greater than) $200 million 0.720
(greater than) $400 million 0.550
64
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
The Strategic Bond Fund is subadvised by PineBridge Investments, LLC
("PineBridge"). The High Yield Bond Fund is subadvised by Wellington
Management Company, LLP ("Wellington Management"). Under the Subadvisory
Agreements, PineBridge and Wellington Management manage the investment and
reinvestment of the assets of the Strategic Bond Fund, and the High Yield
Bond Fund, respectively.
SunAmerica pays PineBridge and Wellington Management fees out of the
investment advisory fees it receives from the respective Funds. The portion
of the investment advisory fees received by SunAmerica that are paid to
PineBridge and Wellington with respect to the Strategic Bond Fund and High
Yield Bond Fund, respectively, are as follows:
SUBADVISORY
ASSETS FEES
--------------------------- -----------
Strategic Bond Fund.. $0 - $200 million 0.35%
(greater than) $200 million 0.25
(greater than) $500 million 0.20
High Yield Bond Fund. $0 - $150 million 0.40
(greater than) $150 million 0.35
(greater than) $500 million 0.30
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 the
purposes of waived fees 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. The contractual fee waivers and expense reimbursements will
continue indefinitely, subject to termination by the Trustees, including a
majority of the Disinterested Trustees.
FUND PERCENTAGE
---- ----------
U.S. Government Securities Class A. 0.99%
U.S. Government Securities Class B. 1.64
U.S. Government Securities Class C. 1.64
GNMA Fund Class A.................. 0.99
GNMA Fund Class B.................. 1.64
GNMA Fund Class C.................. 1.64
Strategic Bond Class A............. 1.40
Strategic Bond Class B............. 2.05
Strategic Bond Class C............. 2.05
High Yield Bond Class A............ 1.36
High Yield Bond Class B............ 2.01
High Yield Bond Class C............ 2.01
For the U.S. Government Fund and GNMA Fund, any waivers and/or
reimbursements made by SunAmerica are subject to recoupment from the Funds
within the following two years after the occurrence of the waiver and/or
reimbursements, provided that the Funds are able to effect such payment to
SunAmerica and remain in compliance with the foregoing expense limitations.
For the period ended September 30, 2011, pursuant to the contractual expense
limitations in the above tables SunAmerica has waived and/or reimbursed
expenses as follows:
OTHER EXPENSES
FUND REIMBURSED
---- --------------
U.S. Government Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $109,146
65
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
CLASS SPECIFIC
FUND EXPENSES
---- --------------
U.S. Government Securities Class A............................... $177,912
U.S. Government Securities Class B............................... 13,262
U.S. Government Securities Class C............................... 23,821
GNMA Class A..................................................... 181,966
GNMA Class B..................................................... 21,131
GNMA Class C . . . . . . . . . . . . . . ........................ 53,423
High Yield Bond Class A.......................................... 70,323
High Yield Bond Class B.......................................... 18,320
High Yield Bond Class C.......................................... 37,576
At September 30, 2011, expenses previously waived or reimbursed by
SunAmerica that are subject to recoupment are as follows:
OTHER EXPENSES
FUND REIMBURSED
---- --------------
U.S. Government Securities . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . ...................................... $446,024
CLASS SPECIFIC
EXPENSES
FUND REIMBURSED
---- --------------
U.S. Government Securities Class A............................... $771,157
U.S. Government Securities Class B............................... 60,539
U.S. Government Securities Class C............................... 99,145
GNMA Class A..................................................... 855,306
GNMA Class B..................................................... 108,637
GNMA Class C..................................................... 236,180
The Trust, on behalf of each Fund, has entered into a Distribution Agreement
with SunAmerica Capital Services, Inc. ("SACS" or "Distributor"), an
affiliate of the Adviser. Each Fund has adopted a Distribution Plan on
behalf of each Class in accordance with the provisions of Rule 12b-1 under
the 1940 Act (each a "Plan" and collectively the "Plans"), hereinafter
referred to as the "Class A Plan," the "Class B Plan" and the "Class C
Plan." In adopting the Class A Plan, the Class B Plan and the Class C Plan,
the Trustees determined that there was a reasonable likelihood that each
such Plan would benefit the Trust 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 Class A, Class B and Class C Plans, provide that the Trust, on behalf of
the respective classes, shall pay the Distributor a distribution fee at an
annual rate of up to 0.10%, 0.75% and 0.75%, of average daily net assets of
such Fund's Class A, Class B and Class C shares respectively, to compensate
the Distributor and certain securities firms for providing sales and
promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be compensated for include
fees paid to broker-dealers that have sold Fund shares, commissions, and
other expenses such as those incurred for sales literature, prospectus
printing and distribution and compensation to wholesalers. It is possible
that in any given year the amount paid to the Distributor under the Class A
Plan, Class B Plan or Class C Plan may exceed the Distributor's distribution
costs as described above. The Plans also provide that each class of shares
of the Trust will also pay the Distributor an account maintenance fee at the
annual rate of up to 0.25% of the aggregate average daily net assets of such
class of shares to compensate the Distributor and securities firms for
account maintenance activities. Accordingly, for the period ended September
30, 2011, SACS received fees (see the Statement of Operations) based upon
the aforementioned rates.
SACS receives sales charges on each Fund's Class A shares, portions of which
are reallowed to affiliated broker-dealers and non-affiliated
broker-dealers. SACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of Class A,
Class B and Class C shares. SACS has advised the Funds that for the period
ended September 30, 2011, the proceeds received from Class A sales (and paid
out to affiliated and non-affiliated broker-dealers) and Class A, Class B
and Class C redemptions were as follows:
CLASS A CLASS B CLASS C
----------------------------------------------------- -------------- --------------
CONTINGENT CONTINGENT CONTINGENT
SALES AFFILIATED NON-AFFILIATED DEFERRED SALES DEFERRED SALES DEFERRED SALES
FUND CHARGES BROKER-DEALERS BROKER-DEALERS CHARGES CHARGES CHARGES
---- -------- -------------- -------------- -------------- -------------- --------------
U.S. Government Securities. $ 14,108 $ 2,990 $ 8,529 $21,095 $12,091 $ 763
GNMA....................... 95,567 16,978 63,027 5,159 15,937 2,856
Strategic Bond............. 136,460 19,392 94,572 379 40,556 9,629
High Yield Bond............ 35,523 3,733 24,819 181 10,378 3,133
66
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
The Trust has 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 Funds. The Service Agreement permits the Funds to
compensate SAFS for services rendered, based upon an annual rate of 0.22% of
average daily net assets, which is approved annually by the Trustees. For
the period ended September 30, 2011, the Funds incurred the following
expenses which are included 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 SEPTEMBER 30, 2011
---- -------- ------------------
US Government Securities Fund Class A. $153,339 $22,985
US Government Securities Fund Class B. 5,708 879
US Government Securities Fund Class C. 14,802 2,577
GNMA Fund Class A..................... 273,721 44,185
GNMA Fund Class B..................... 18,631 2,772
GNMA Fund Class C..................... 67,202 11,195
Strategic Bond Fund Class A........... 293,115 47,437
Strategic Bond Fund Class B........... 56,875 9,084
Strategic Bond Fund Class C........... 275,866 44,733
High Yield Bond Fund Class A.......... 81,915 11,387
High Yield Bond Fund Class B.......... 15,800 2,251
High Yield Bond Fund Class C.......... 42,186 6,246
At September 30, 2011, the following affiliates owned a percentage of the
outstanding shares of the following funds; Focused Balanced Strategy
Portfolio and Focused Multi-Asset Strategy Portfolio owned 11.1% and 12.8%,
respectively of the SunAmerica U.S. Government Fund; Focused Balanced
Strategy Portfolio and Focused Multi-Asset Strategy Portfolio owned 10.0%
and 7.9%, respectively of the SunAmerica GNMA Fund, and Focused Multi-Asset
Strategy Portfolio owned 6.4% of SunAmerica Strategic Bond Fund.
On August 10 and August 11, 2011 the U.S. Government Securities Fund
purchased $10,000,000 par value and $4,000,000 par value, respectively, of
the foreign security Temasek Financial I, Ltd., 4.50%, due 09/21/2015. The
Fund is prohibited from investing in foreign securities. On August 19, 2011,
the Fund sold its holdings in this foreign security for a gain to the Fund
of $29,856.
On September 22, 2008, AIG, the ultimate parent of SunAmerica, SACS, and
SAFS, 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.
67
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
Note 4. Purchases and Sales of Investment Securities
The aggregate cost of purchases and proceeds from sales and maturities of
long-term investments during the period ended September 30, 2011 were as
follows:
U.S. GOVERNMENT
SECURITIES GNMA STRATEGIC HIGH YIELD
FUND FUND BOND FUND BOND FUND
--------------- ------------ ------------ -----------
Purchases (excluding U.S. government securities). $ 15,699,424 $ -- $314,328,443 $19,939,798
Sales (excluding U.S. government securities)..... 15,729,280 -- 329,074,516 26,321,426
Purchases of U.S. government securities.......... 99,759,527 132,493,117 59,254,936 --
Sales of U.S. government securities.............. 141,247,871 208,672,446 40,434,868 --
Note 5. Federal Income Taxes
The following details the tax basis of 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 wash sales, treatment of defaulted securities, deferred directors
compensation, amortization of premium/discount, post-October losses, and
derivative transactions.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
FOR THE YEAR ENDED MARCH 31, 2011 FOR THE YEAR ENDED MARCH 31, 2011
--------------------------------------- ------------------------------------
LONG-TERM UNREALIZED
ORDINARY GAINS/CAPITAL APPRECIATION ORDINARY LONG-TERM
INCOME LOSS CARRYOVER (DEPRECIATION) INCOME CAPITAL GAINS TAX EXEMPT
- ---------- -------------- -------------- ----------- ------------- ----------
U.S. Government Securities Fund. $ 981,127 $ -- $ 2,900,118 $ 5,676,490 $439,590 $ --
GNMA Fund....................... 528,337 -- 12,908,407 21,291,432 -- --
Strategic Bond Fund............. 2,079,084 (70,758,609) 6,463,319 32,878,518 -- --
High Yield Bond Fund............ 658,410 (52,757,682) (7,567,558) 10,431,835 -- --
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for federal tax purposes, including short-term securities and
repurchase agreements, were as follows:
U.S.
GOVERNMENT
SECURITIES GNMA STRATEGIC HIGH YIELD
FUND FUND BOND FUND BOND FUND
------------ ------------ ------------ ------------
Cost.......................................... $140,400,533 $314,951,568 $567,973,382 $126,753,216
============ ============ ============ ============
Appreciation.................................. 12,058,049 11,462,011 12,076,085 4,363,672
Depreciation.................................. (502,927) (459,920) (38,197,602) (23,007,597)
------------ ------------ ------------ ------------
Unrealized appreciation (depreciation) -- net. $ 11,555,122 $ 11,002,091 $(26,121,517) $(18,643,925)
============ ============ ============ ============
As of March 31, 2011, for Federal income tax purposes, the Funds indicated
below have capital loss carryforwards, which expire in the year indicated,
which are available to offset future capital gains, if any:
FUND 2012 2013 2014 2015 2016 2017 2018 2019
---- ------- ------- ------- ------- ---------- ----------- ---------- -------
U.S. Government Securities. $ -- $ -- $ -- $ -- $ -- $ -- -- $ --
GNMA....................... -- -- -- -- -- -- -- --
Strategic Bond............. -- -- -- -- -- 15,633,479 55,125,130 --
High Yield Bond............ -- -- -- -- 4,051,423 9,384,737 39,321,522 --
On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted, which changed various technical rules
governing the tax treatment of regulated investment companies. The changes
are generally effective for taxable years beginning after the date of
enactment. Under the Act, the fund will be permitted to carry forward
capital losses incurred in taxable years beginning after the date of
enactment for an unlimited period. However, any losses incurred during those
future taxable years will be required to be utilized prior to the losses
incurred in pre-enactment taxable years, which carry an expiration date. As
a result of this ordering rule, pre-enactment capital loss carryforwards may
be more likely to expire unused.
68
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
Under the current law, losses realized after October 31 and prior to the
Fund's fiscal year end may be deferred as occurring on the first day of the
following year. For the fiscal year ended March 31, 2011, the Funds elected
to defer losses as follows:
DEFERRED DEFERRED
POST-OCTOBER POST-OCTOBER
FUND CAPITAL LOSS CURRENCY LOSS
---- ------------ -------------
U.S. Government Securities. $2,327,030 $ --
GNMA....................... 3,486,342 --
Strategic Bond............. -- --
High Yield Bond Fund....... -- --
Note 6. Capital Share Transactions
Transactions in capital shares of each class of each series were as follows:
U.S. GOVERNMENT SECURITIES FUND
------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- --------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE
09/30/2011 YEAR ENDED 09/30/2011 YEAR ENDED
(UNAUDITED) MARCH 31, 2011 (UNAUDITED) MARCH 31, 2011
------------------------ ------------------------ --------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ -------- ----------- -------- -----------
Shares sold(1)(2)... 460,763 $ 4,538,038 3,046,784 $ 29,548,060 79,675 $ 782,480 180,013 $ 1,766,350
Reinvested shares... 136,518 1,336,018 497,819 4,807,911 2,912 28,493 14,515 139,900
Shares
redeemed(1)(2)..... (2,767,677) (27,333,387) (5,044,057) (49,165,213) (195,983) (1,916,847) (491,629) (4,766,732)
---------- ------------ ---------- ------------ -------- ----------- -------- -----------
Net increase
(decrease)......... (2,170,396) $(21,459,331) (1,499,454) $(14,809,242) (113,396) $(1,105,874) (297,101) $(2,860,482)
========== ============ ========== ============ ======== =========== ======== ===========
U.S. GOVERNMENT SECURITIES FUND
--------------------------------------------------
CLASS C
--------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
09/30/2011 YEAR ENDED
(UNAUDITED) MARCH 31, 2011
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Shares sold......... 245,960 $ 2,449,648 383,411 $ 3,767,034
Reinvested shares... 7,505 73,471 29,503 283,865
Shares redeemed..... (179,690) (1,763,809) (587,418) (5,704,619)
---------- ------------ ---------- ------------
Net increase
(decrease)......... 73,775 $ 759,310 (174,504) $ (1,653,720)
========== ============ ========== ============
--------
(1)For the six months ended September 30, 2011, includes automatic conversion
of 78,207 shares of Class B shares in the amount of $766,059, to 78,261
shares of Class A shares in the amount of $766,059.
(2)For the year ended March 31, 2011, includes automatic conversion of 193,580
shares of Class B shares in the amount of $1,879,855, to 193,616 shares of
Class A shares in the amount of $1,879,855.
69
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
GNMA FUND
-----------------------------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------------------- -----------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE
09/30/2011 YEAR ENDED 09/30/2011 YEAR ENDED
(UNAUDITED) MARCH 31, 2011 (UNAUDITED) MARCH 31, 2011
------------------------ -------------------------- --------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------- -------- ----------- ---------- ------------
Shares sold(1)(2)... 4,374,428 $ 51,992,010 5,379,295 $ 64,344,170 107,224 $ 1,273,296 263,241 $ 3,143,580
Reinvested shares... 217,406 2,569,721 1,038,883 12,183,827 11,096 131,251 84,817 996,311
Shares
redeemed(1)(2)..... (4,350,191) (51,750,065) (10,123,858) (119,724,529) (472,306) (5,580,069) (1,381,943) (16,447,756)
---------- ------------ ----------- ------------- -------- ----------- ---------- ------------
Net increase
(decrease)......... 241,643 $ 2,811,666 (3,705,680) $ (43,196,532) (353,986) $(4,175,522) (1,033,885) $(12,307,865)
========== ============ =========== ============= ======== =========== ========== ============
GNMA FUND
----------------------------------------------- - - - -
CLASS C
-----------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
09/30/2011 YEAR ENDED
(UNAUDITED) MARCH 31, 2011
--------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- ------------
Sharessold 576,686 $ 6,920,946 1,530,789 $ 18,436,539
Reinvested shares... 34,136 404,667 205,407 2,412,799
Shares redeemed..... (656,858) (7,769,970) (2,654,445) (31,485,438)
-------- ----------- ---------- ------------
Net increase
(decrease)......... (46,036) $ (444,357) (918,249) $(10,636,100)
======== =========== ========== ============
STRATEGIC BOND FUND
--------------------------------------------------------------------------------------------------------
CLASS A CLASS B
----------------------------------------------------- -------------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE
09/30/2011 YEAR ENDED 09/30/2011 YEAR ENDED
(UNAUDITED) MARCH 31, 2011 (UNAUDITED) MARCH 31, 2011
------------------------- -------------------------- ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------- ---------- ----------- ---------- ------------
Shares sold(3)(4)... 15,697,714 $ 54,660,748 22,628,092 $ 77,319,848 1,292,911 $ 4,465,138 2,765,629 $ 9,415,936
Reinvested shares... 1,380,739 4,767,567 3,180,495 10,853,981 168,503 581,723 458,590 1,564,244
Shares
redeemed(3)(4)..... (11,909,243) (41,385,607) (38,630,452) (131,255,393) (1,543,447) (5,350,965) (3,238,059) (11,037,855)
----------- ------------ ----------- ------------- ---------- ----------- ---------- ------------
Net increase
(decrease)......... 5,169,210 $ 18,042,708 (12,821,865) $ (43,081,564) (82,033) $ (304,104) (13,840) $ (57,675)
=========== ============ =========== ============= ========== =========== ========== ============
STRATEGIC BOND FUND
-----------------------------------------------------
CLASS C
-----------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
09/30/2011 YEAR ENDED
(UNAUDITED) MARCH 31, 2011
------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- -------------
Shares sold......... 7,615,033 $ 26,523,237 12,447,478 $ 42,527,651
Reinvested shares... 789,066 2,734,315 2,079,522 7,121,755
Shares redeemed..... (7,051,428) (24,580,638) (19,380,988) (66,358,228)
----------- ------------ ----------- -------------
Net increase
(decrease)......... 1,352,671 $ 4,676,914 (4,853,988) $ (16,708,822)
=========== ============ =========== =============
--------
(1)For the six months ended September 30, 2011, includes automatic conversion
of 295,472 shares of Class B shares in the amount of $3,488,552 to shares
296,320 of Class A shares in the amount of $3,488,552.
(2)For the year ended March 31, 2011, includes automatic conversion of 843,418
shares of Class B shares in the amount of $10,050,720 to shares 845,598 of
Class A shares in the amount of $10,050,720.
(3)For the six months ended September 30, 2011, includes automatic conversion
of 374,664 shares of Class B shares in the amount of $1,295,189 to 374,514
shares of Class A shares in the amount of $1,295,189.
(4)For the year ended March 31, 2011, includes automatic conversion of 999,134
shares of Class B shares in the amount of $3,408,891 to 999,134 shares of
Class A shares in the amount of $3,408,891.
70
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
HIGH YIELD BOND FUND
---------------------------------------------------------------------------------------------------
CLASS A CLASS B
--------------------------------------------------- ----------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE
09/30/2011 YEAR ENDED 09/30/2011 YEAR ENDED
(UNAUDITED) MARCH 31, 2011 (UNAUDITED) MARCH 31, 2011
------------------------ ------------------------- --------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------ -------- ----------- ---------- -----------
Shares sold(1)(2)... 3,587,990 $ 12,509,210 8,240,345 $ 27,927,583 245,355 $ 835,119 644,061 $ 2,176,466
Reinvested shares... 399,709 1,370,173 1,013,613 3,444,144 67,967 233,101 204,366 694,841
Shares
redeemed(1)(2)..... (6,064,132) (20,744,759) (11,093,022) (37,411,064) (878,231) (3,030,934) (1,742,702) (5,929,013)
---------- ------------ ----------- ------------ -------- ----------- ---------- -----------
Net increase
(decrease)......... (2,076,433) $ (6,865,376) (1,839,064) $ (6,039,337) (564,909) $(1,962,714) (894,275) $(3,057,706)
========== ============ =========== ============ ======== =========== ========== ===========
HIGH YIELD BOND FUND
---------------------------------------------------
CLASS C
---------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
09/30/2011 YEAR ENDED
(UNAUDITED) MARCH 31, 2011
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------
Shares sold......... 934,861 $ 3,258,821 2,177,154 $ 7,443,311
Reinvested shares... 168,969 581,503 463,761 1,583,986
Shares redeemed..... (1,655,005) (5,683,134) (4,700,769) (16,042,293)
---------- ------------ ----------- ------------
Net increase
(decrease)......... (551,175) $ (1,842,810) (2,059,854) $ (7,014,996)
========== ============ =========== ============
--------
(1)For the six months ended September 30, 2011, includes automatic conversion
of 322,634 shares of Class B shares in the amount of $1,118,509 to 323,385
shares of Class A shares in the amount of $1,118,509.
(2)For the year ended March 31, 2011, includes automatic conversion of 538,294
shares of Class B shares in the amount of $1,830,519 to 539,503 shares of
Class A shares in the amount of $1,830,519.
Note 7. Lines of Credit
The SunAmerica family of mutual Funds has established $75 million committed
and $50 million uncommitted lines of credit with State Street Bank and Trust
Company, the Funds' custodian. Interest is currently payable at the higher
of the Federal Funds Rate or London Interbank Offered Rate plus 125 basis
points on the committed line and State Street Bank and Trust Company's
discretionary bid rate on the uncommitted line of credit. There is also a
commitment fee of 10.0 basis points per annum on the daily unused portion of
the committed line of credit which is included in the other expenses line on
the Statement of Operations. Prior to September 16, 2011, the commitment fee
was 12.5 basis points per annum on the daily unused portion of the daily
unused portion of the committed line of credit. Borrowings under the line of
credit will commence when the respective Fund's cash shortfall exceeds
$100,000. During the period ending September 30, 2011, the following Funds
had borrowings:
AVERAGE WEIGHTED
DAYS INTEREST DEBT AVERAGE
FUND OUTSTANDING CHARGES UTILIZED INTEREST
---- ----------- -------- ---------- --------
GNMA........... 14 $1,215 $2,221,415 1.41%
Strategic Bond. 15 2,269 3,949,473 1.38
At September 30, 2011, there were no borrowings outstanding.
Note 8. Interfund Lending Agreement
Pursuant to exemptive relief granted by the Securities and Exchange
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 September 30, 2011 none of the Funds participated in this program.
Note 9. Trustees Retirement Plan
The Trustees of the Trust have adopted the SunAmerica Disinterested
Trustees' and Directors' Retirement Plan (the "Retirement Plan") effective
January 1, 1993, as amended, for the unaffiliated Trustees. The Retirement
Plan provides generally that an unaffiliated Trustee may become a
participant ("Participant") in the Retirement Plan if he or she has at least
10 years of consecutive service as a Disinterested Trustee of any of the
adopting SunAmerica mutual funds (the "Adopting Funds") or has
71
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
attained the age of 60 while a Trustee and completed five (5) consecutive
years of service as a Trustee of any Adopting Fund (an "Eligible Trustee").
Pursuant to the Retirement Plan, an Eligible Trustee may receive benefits
upon (i) his or her death or disability while a Trustee or (ii) the
termination of his or her tenure as a Trustee, other than removal for cause
from each of the Adopting Funds with respect to which he or she is an
Eligible Trustee.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Trustee and Participant, each Eligible Trustee
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Trustee of each
Adopting Fund for the calendar year in which such birthday occurs. In
addition, an amount equal to 8.50% of any amounts credited under the
preceding statement during prior years is added to each Eligible Trustee's
account. The rights of any Participant to benefits under the Retirement Plan
shall be an unsecured claim against the assets of the Adopting Funds. An
Eligible Trustee may receive any benefits payable under the Retirement Plan,
at his or her election, either in one lump sum or in up to 15 annual
installments. Any undistributed amounts shall continue to accrue interest at
8.50%.
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 Trustees' fees and expenses payable line on the Statement of Assets and
Liabilities and the amounts for the Retirement Plan Expenses are included in
the Trustees' fees and expenses line on the Statement of Operations.
RETIREMENT PLAN RETIREMENT PLAN RETIREMENT PLAN
LIABILITY EXPENSE PAYMENTS
--------------- --------------- ---------------
FUND AS OF SEPTEMBER 30, 2011
---- -----------------------------------------------
U.S. Government Securities. $12,205 $176 $560
GNMA....................... 6,196 361 218
Strategic Bond............. 6,483 546 187
High Yield Bond............ 5,199 132 225
Note 10. Investment Concentration
The High Yield Bond Fund's investment in high yield securities, whether
rated or unrated, may be considered speculative and subject to greater
market fluctuations and risk of loss of income and principal than
lower-yielding, higher-rated, fixed-income securities. The risk of loss due
to default by the issuer may be significantly greater for the holders of
high yield securities, because such securities are generally unsecured and
are often subordinated to other creditors of the issuer.
The Funds may invest in obligations issued by agencies and instrumentalities
of the U.S. Government that may vary in the level of support they receive
from the government. The government may choose not to provide financial
support to government sponsored agencies or instrumentalities if it is not
legally obligated to do so. In this case, if the issuer defaulted, the Fund
holding securities of such issuer might be able to recover its investment
from the U.S. Government. As a result of the U.S. Government Fund and GNMA
Fund's concentration in such investments, it may be subject to risks
associated with the U.S. Government. For the period ended September 30,
2011, the Funds had 45.3% and 82.7%, respectively, of their total net assets
invested in such securities.
Note 11. Security Transactions with Affiliated Funds or Portfolios
The Portfolios are permitted to transfer securities by purchasing from and
or selling to other affiliated funds under certain conditions approved by
the Board. The affiliated funds involved in such transactions must have a
common investment advisor or investment advisors which are affiliated
persons of each other, common directors, and/or common officers in
compliance with Rule 17a-7 of the 1940 Act. Pursuant to the 1940 Act, such
transaction must be either a purchase or a sale, for no consideration other
than cash payment against prompt delivery of the security at the current
market price. No brokerage commission or fee (except for customary transfer
fees), or other remuneration is paid in connection with such transaction.
For the period ended September 30, 2011, the following portfolios engaged in
security transactions with affiliated Funds:
COST OF PROCEEDS REALIZED
PORTFOLIO PURCHASES FROM SALES GAIN/(LOSS)
--------- ----------- ----------- -----------
U.S. Government Securities Fund. $15,699,424 $15,729,280 $29,856
72
SUNAMERICA INCOME FUNDS
APPROVAL OF ADVISORY AGREEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND SUBADVISORY
AGREEMENTS
The Board of the Trust, including the Disinterested Trustees approved the
continuation of the Investment Advisory and Management Agreement between the
Trust, on behalf of the Fund's, and SunAmerica (the "Advisory Agreement") for a
one-year period ending June 30, 2012 at an in-person meeting held on June 14,
2011 (the "Meeting"). The Trust currently consists of five separate Funds,
including the SunAmerica GNMA Fund ("GNMA Fund"), SunAmerica High Yield Bond
Fund ("High Yield Bond Fund"), SunAmerica Strategic Bond Fund ("Strategic Bond
Fund"), SunAmerica Tax Exempt Insured Fund ("Tax Exempt Insured Fund")* and
SunAmerica U.S. Government Securities Fund ("U.S. Government Securities Fund").
At the Meeting, the Board also approved the continuation of the Subadvisory
Agreements between SunAmerica and AIG Asset Management (U.S.), LLC ("AMG"),
Wellington Management, and PineBridge (each a "Subadviser" and collectively the
"Subadvisers") for a one-year period ending June 30, 2012. The following is a
list of each Fund's respective Subadviser(s) for which the Board approved the
renewal of a Subadvisory Agreement.
FUND SUBADVISER
---- ----------
Strategic Bond Fund PineBridge
High Yield Bond Fund Wellington
Tax Exempt Insured Fund AMG
In accordance with Section 15(c) of the 1940 Act, the Board requested and
SunAmerica and the Subadvisers provided materials relating to the Board's
consideration of whether to approve the continuation of the Advisory Agreement
and Subadvisory Agreements,. These materials included (a) a summary of the
services provided by SunAmerica and its affiliates to the Funds and by the
Subadvisers; (b) information independently compiled and prepared by Lipper,
Inc. ("Lipper") on Fund fees and expenses, and the investment performance of
the Fund as compared with a peer group of funds; (c) information on the
profitability of SunAmerica and its affiliates, and a discussion relating to
indirect benefits; (d) a report on economies of scale; (e) information on
SunAmerica's and the Subadvisers' risk management process; (f) a discussion on
general compliance policies and procedures; (g) a summary of brokerage and soft
dollar practices; (h) information about the key personnel of SunAmerica and its
affiliates, and the Subadvisers, 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 Agreements, the Board, including Disinterested Trustees,
considered the following information:
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY SUNAMERICA AND THE
SUBADVISERS.
The Board, including the Disinterested Trustees, considered the nature, quality
and extent of services to be provided by SunAmerica and the Subadvisers. 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
provides office space, bookkeeping, accounting, legal, and compliance, clerical
and administrative services and has authorized its officers and employees, if
elected, to serve as officers or trustees 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 the Subadvisers. 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.
--------
* Effective September 23, 2011, the Tax Exempt Insured Fund was liquidated.
73
SUNAMERICA INCOME FUNDS
APPROVAL OF ADVISORY AGREEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
In connection with the services provided by SunAmerica, the Board analyzed the
structure and duties of SunAmerica's fund administration, accounting,
operations, 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 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 March 31,
2011, SunAmerica managed, advised and/or administered approximately $45.3
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 Fund's prospectuses.
Additionally, the Board considered SunAmerica's compliance and regulatory
history.
The Board also considered the nature, quality and extent of services to be
provided by each Subadviser. The Board observed that the Subadvisers are
responsible for providing investment management services, including investment
research, advice and supervision, and determining which securities will be
purchased or sold by a Fund, or portion thereof, that each Subadviser manages,
subject to the oversight and review of SunAmerica. The Board reviewed each
Subadviser'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 Funds, in addition to current and projected staffing levels and
compensation practices, and concluded, based on its experience with each
Subadviser, that each Subadviser: (i) is able to retain high quality portfolio
managers and other investment personnel; (ii) exhibited a high level of
diligence and attention to detail in carrying out its responsibilities under
the Subadvisory Agreements; and (iii) had been responsive to requests of the
Board and of SunAmerica. The Board considered that each Subadviser has
developed internal policies and procedures for monitoring compliance with the
investment objectives, policies and restrictions of the Funds as set forth in
the Funds' prospectus. The Board also considered each Subadviser's code of
ethics, compliance and regulatory history and risk management process. The
Board noted that the Subadvisers have not experienced any material regulatory
or compliance problems nor have they been involved in any material litigation
or administrative proceedings that would potentially impact them from
effectively serving as Subadvisers to the Funds. The Board concluded that the
nature and extent of services to be provided by each Subadviser under the
Subadvisory Agreement were reasonable and appropriate in relation to the
subadvisory fees and that the quality of services continues to be high.
INVESTMENT PERFORMANCE
The Board, including the Disinterested Trustees, also considered the investment
performance of SunAmerica and the Subadvisers with respect to the Funds, as
applicable. In connection with its review, the Board received and reviewed
information regarding the investment performance of the Funds as compared to
each Fund's peer group ("Peer Group") and/or peer universe ("Peer Universe") as
independently determined by Lipper and to an appropriate index or combination
of indices, including the Funds' benchmarks. The Board was provided with a
description of the methodology used by Lipper to select the funds in the Peer
Groups and Universes. The Board also noted that it regularly reviews the
performance of the Funds throughout the year. The Board noted that, while it
monitors performance of the Funds closely, it generally attaches more
importance to performance over relatively long periods of time, typically three
to five years.
It was noted that performance information was for the periods ended March 31,
2011. The Board also noted that it regularly reviews the performance of the
Funds throughout the year.
GNMA Fund. The Board considered that the Fund's performance was slightly below
the median of its Peer Group for the one- and three- year periods and slightly
above the median of its Peer Group for the five- year period. The Board also
considered that the
74
SUNAMERICA INCOME FUNDS
APPROVAL OF ADVISORY AGREEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
Fund's performance was slightly below the median of its Peer Universe for the
one- and five- year periods, and below the median of its Peer Universe for the
three- year period. The Board also considered that the Fund underperformed its
Lipper Index the one-, three- and five- year periods. The Board further
considered that the Fund's performance was above the median of its Peer
Group/Peer Universe and the Lipper Index for the ten-year period. The Board
took into account management's discussion of the Fund's performance and
concluded that the Fund's overall performance was satisfactory.
U.S. Government Securities Fund. The Board considered that the Fund's
performance was below the median of its Peer Group/Universe for the one-,
three- and five- year periods. The Board also considered that the Fund
underperformed its Lipper Index the one-, three- and five- year periods. The
Board took into account management's discussion of the Fund's performance,
including its competitive performance over the longer-term and the portfolio
manager's long tenure with the Fund, and concluded that the Fund's performance
is being addressed.
High Yield Bond Fund. The Board considered that the Fund's performance was
below the median of its Peer Group/Universe for the one-, three- and five- year
periods. The Board also considered that the Fund underperformed its Lipper
Index the one-, three- and five- year periods. The Board took into account
management's discussion of the Fund's performance, including the Fund's
improved more recent performance since Wellington was appointed as subadviser
to the Fund in May 2009. The Board concluded that the Fund's performance is
being addressed.
Strategic Bond Fund. The Board considered that the Fund's performance was above
the median of its Peer Group for the one- and five- year periods and below the
median of its Peer Group for the three- year period. The Board also considered
that the Fund's Performance was above the median of its Peer Universe for the
one- year period and below the median of its Peer Universe for the three- and
five- year periods. The Board also considered that the Fund outperformed its
Lipper Index for the one- year period and underperformed its Lipper Index for
the three- and five- year periods. The Board took into account management's
discussion of the Fund's performance, including the Fund's improved more recent
performance. The Board concluded that the Fund's performance was satisfactory.
Tax Exempt Insured Fund. The Board considered that the Fund's performance was
at the median of its Peer Group for the one- year period and below the median
of its Peer Group for the three- and five- year periods. The Board also
considered that the Fund's performance was below the median of its Peer
Universe for the one- year period and above the median of its Peer Universe for
the three- and five- year periods. The Board also considered that the Fund
underperformed its Lipper Index for the one- year period and outperformed its
Lipper Index for the three- and five- year periods. The Board took into account
management's discussion of the Fund's performance, including the limited size
of the Peer Group, and concluded that the Fund's performance was satisfactory.
CONSIDERATION OF THE MANAGEMENT FEES AND SUBADVISORY FEES AND THE COST OF THE
SERVICES AND PROFITS TO BE REALIZED BY SUNAMERICA AND THE SUBADVISERS AND THEIR
AFFILIATES FROM THE RELATIONSHIP WITH THE FUNDS. The Board, including the
Disinterested Trustees, received and reviewed information regarding the fees to
be paid by the Funds to SunAmerica pursuant to the Advisory Agreement and the
fees to be paid by SunAmerica to the Subadvisers pursuant to the Subadvisory
Agreements. 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,
the Subadvisers 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 expense reimbursements and the net
expense caps contractually agreed upon by SunAmerica with respect to each Fund.
The Board also considered the voluntary fee waivers and/or expense
reimbursements agreed to by SunAmerica with respect to the Class C shares of
the Tax Exempt Insured Fund. The Board further considered that, unlike the
funds in the Peer Group and Peer Universe, the fee waivers and/or
reimbursements being made by SunAmerica with respect to the Funds are only
reflected in the total expenses category of the Lipper reports, rather than
also being reflected as specific management fee waivers in the actual
management fees category of the Lipper reports. As a result, the Board took
into account that the actual management fees presented by Lipper for the funds
in the
75
SUNAMERICA INCOME FUNDS
APPROVAL OF ADVISORY AGREEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
Peer Group and Peer Universe may appear lower on a relative basis. The Board
then compared each Fund's net expense ratio (taking into account the
contractual fee caps and waivers) to those of other funds within its Peer Group
and/or Peer Universe as a guide to help assess the reasonableness of the
management fee for the Funds. The Board acknowledged that it was difficult to
make precise comparisons with other funds in the Peer Groups and Peer Universes
since the exact nature of services provided under the various fund agreements
is often not apparent. The Board noted, however, that the comparative fee
information provided by Lipper as a whole was useful in assessing whether
SunAmerica was providing services at a cost that was competitive with other,
similar funds.
The Board also considered the management fees received by SunAmerica with
respect to other mutual funds and accounts with similar investment strategies
to the Funds, to the extent applicable. The Board noted, however, that a mutual
fund identified as similar to the U.S. Government Securities Fund is sold only
in the variable annuity market and, accordingly, is in an entirely different
Lipper classification, with a peer group consisting of funds underlying
variable insurance products. The Board then noted the management fees paid by
the Funds were 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 also received and reviewed information regarding the fees paid by
SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. To assist
in analyzing the reasonableness of the subadvisory fees, the Board received a
report independently prepared by Lipper. The report showed comparative fee
information of each Fund's Peer Group that the Board used as a guide to help
assess the reasonableness of the subadvisory fees. The Board noted that Peer
Group information as a whole was useful in assessing whether the Subadvisers
were providing services at a cost that was competitive with other similar
funds. The Board also considered that the subadvisory fees are paid by
SunAmerica out of its management fee and not by the Funds, and that subadvisory
fees may vary widely within a Peer Group for various reasons, including market
pricing demands, existing relationships, experience and success, and individual
client needs. The Board further considered the amount of subadvisory fees paid
out by SunAmerica and the amount of the management fees which it retained.
The Board also considered fees received by the Subadvisers with respect to
other mutual funds and accounts with similar investment strategies to the Funds
for which they serves as adviser or subadviser, to the extent applicable. The
Board observed that with respect to the Strategic Bond Fund, the similar
accounts identified by PineBridge included retirement accounts managed that may
be subject to state and/or ERISA regulations which could make them more costly
to manage. The Board then noted that the subadvisory fees paid by SunAmerica to
the Subadvisers were reasonable as compared to fees PineBridge receives for
other mutual funds and accounts for which it serves as adviser or subadviser.
GNMA Fund. The Board considered that the Fund's actual management fees were
below the median of its Peer Group and slightly above the median of its Peer
Universe. The Board also considered that the Fund's total expenses were at the
median of its Peer Group and above the median of its Peer Universe. The Board
noted that the Fund's advisory fee contains breakpoints and took into account
management's discussions regarding the Fund's expenses.
U.S. Government Securities Fund. The Board considered that the Fund's actual
management fees were above the median of its Peer Group and Peer Universe. The
Board also considered that the Fund's total expenses were below the median of
its Peer Group and above the median of its Peer Universe. The Board noted that
the Fund's advisory fee contains breakpoints and took into account management's
discussions regarding the Fund's expenses.
High Yield Bond Fund. The Board considered that the Fund's actual management
fees were above the median of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the median of its Peer
Group and Peer Universe. The Board noted that the Fund's advisory fee contains
breakpoints and took into account management's discussions regarding the Fund's
expenses.
Strategic Bond Fund. The Board considered that the Fund's actual management
fees were above the median of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the median of its Peer
Group and Peer Universe. The Board noted that the Fund's advisory fee contains
breakpoints and took into account management's discussions regarding the Fund's
expenses.
76
SUNAMERICA INCOME FUNDS
APPROVAL OF ADVISORY AGREEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
Tax Exempt Insured Fund. The Board considered that the Fund's actual management
fees were below the median of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were at the median of its Peer Group
and slightly above the median of its Peer Universe. The Board noted that the
Fund's advisory fee contains breakpoints and took into account management's
discussions regarding the Fund's expenses.
PROFITABILITY
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 and voluntary fee waivers
and/or expense reimbursements agreed to by SunAmerica.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, and considered the profitability of SunAmerica's affiliate under the
Rule 12b-1 Plans and Service 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 the Subadvisers and their
affiliates and considered whether the Subadvisers had the financial resources
necessary to attract and retain high quality investment management personnel
and to provide a high quality of services.
The Board concluded that SunAmerica and the Subadvisers had the financial
resources necessary to perform their obligations under the Advisory Agreement
and the Subadvisory Agreements, respectively, and to continue to provide the
Funds with the high quality services that they had provided in the past. The
Board also concluded that the management fee and subadvisory fees were
reasonable in light of the factors discussed above.
ECONOMIES OF SCALE
The Board, including the Disinterested Trustees, considered whether the
shareholders would benefit from economies of scale and whether there was
potential for future realization of economies with respect to the Funds. The
Board considered that as a result of being part of the 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 each of the Funds 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, with the exception of the Tax
Exempt Insured Fund, SunAmerica has agreed to contractually cap the total
annual operating expenses of the Funds, at certain levels. The Board also noted
that SunAmerica has contractually agreed to waive a portion of its management
fee with respect to the Tax Exempt Insured Fund. The Board observed that those
expense caps and fee waivers benefited shareholders by keeping total fees down
even in the absence of breakpoints or economies of scale. The Board concluded
that the Funds' management fee structure was reasonable and that it would
continue to review fees in connection with the renewal of the Advisory
Agreement, including whether the implementation of additional breakpoints would
be appropriate in the future due to an increase in asset size or otherwise.
The Board did not review specific information regarding whether there have been
economies of scale with respect to the Subadvisers' management of the Funds
because it regards that information as less relevant at the subadviser level.
Rather, the Board considered information regarding economies of scale in the
context of the renewal of the Advisory Agreement.
77
SUNAMERICA INCOME FUNDS
APPROVAL OF ADVISORY AGREEMENTS -- SEPTEMBER 30, 2011 -- (UNAUDITED)
(CONTINUED)
OTHER FACTORS
In consideration of the Advisory Agreement and Subadvisory Agreements, the
Board also received information regarding SunAmerica's and the Subadvisers'
brokerage and soft dollar practices. The Board considered that SunAmerica and
the Subadvisers are responsible for decisions to buy and sell securities for
the portfolios they manage, selection of broker-dealers and negotiation of
commission rates. The Board also considered the benefits SunAmerica and the
Subadvisers may derive from soft dollar arrangements, including arrangements
under which brokers provide brokerage and/or research services to SunAmerica
and/or the Subadvisers 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 the Subadvisers 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 the Subadvisers may designate the use of
broker-dealers who have agreed to provide certain statistical, research and
other information.
CONCLUSION
After a full and complete discussion, the Board approved the Advisory Agreement
and the Subadvisory Agreements, each for a one-year period ending June 30,
2012. Based upon their evaluation of all these factors in their totality, the
Board, including the Disinterested Trustees, was satisfied that the terms of
the Advisory Agreement and Subadvisory Agreements 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 Agreements the
Board did not identify any single factor or group of factors as all-important
or controlling, but considered all factors together. The Disinterested Trustees
were also assisted by the advice of independent counsel in making this
determination.
78
[LOGO] SunAmerica
Mutual Funds
HARBORSIDE FINANCIAL CENTER
3200 PLAZA 5
JERSEY CITY, NJ 07311-4992
DIRECTORS/TRUSTEES VOTING PROXIES ON TRUST DISCLOSURE OF QUARTERLY
Richard W. Grant PORTFOLIO SECURITIES PORTFOLIO HOLDINGS
Peter A. Harbeck A description of the The Trust is required to
Dr. Judith L. Craven policies and proce-dures file its com-plete
William F. Devin that the Trust uses to schedule of portfolio
Stephen J. Gutman determine how to vote holdings with the U.S.
William J. Shea proxies relating to Securities and Exchange
secu-rities held in a Commission for its first
OFFICERS Fund's portfolio, which and third fiscal quarters
John T. Genoy, President is available in the on Form N-Q. The Trust's
Donna M. Handel, Trust's Statement of Forms N-Q are available
Treasurer Additional Information, on the U.S. Securities
James Nichols, Vice may be ob-tained without and Exchange Commis-sion
President charge upon request, by website at www.sec.gov.
Timothy Pettee, Vice calling (800) 858-8850. You can also review and
President The in-formation is also obtain copies of the
Michael Cheah, Vice available from the EDGAR Forms N-Q at the U.S.
President database on the U.S. Securities and Exchange
Katherine Stoner, Vice Secu-rities and Exchange Commission Public
President and Chief Commission's website at Refer-ence Room in
Compliance Officer http://www.sec.gov. Washington DC
Gregory N. Bressler, (information on the
Chief Legal Officer DELIVERY OF SHAREHOLDER operation of the Public
and Secretary DOCUMENTS Reference Room may be
Nori L. Gabert, Vice The Funds have adopted a ob-tained by calling
President and policy that allows them 1-800-SEC-0330).
Assistant Secretary to send only one copy of
Kathleen Fuentes, a Fund's prospectus, PROXY VOTING RECORD ON
Assistant Secretary proxy material, annual SUNAMERICA INCOME FUNDS
John E. McLean, report and semi-annual Information regarding how
Assistant Secretary report (the "shareholder the Funds voted proxies
Gregory R. Kingston, documents") to relating to securities
Vice President and shareholders with held in the Funds during
Assistant Treasurer multiple accounts the most recent twelve
Christopher A. Okeke, residing at the same month period ended June
Assistant Treasurer "household." This 30 is available, once
Matthew J. Hackethal, practice is called filed with the U.S.
Anti-Money Laundering householding and reduces Securities and Exchange
Compliance Officer Fund expenses, which Commission, without
benefits you and other charge, upon request, by
INVESTMENT ADVISER shareholders. Unless the calling (800) 858-8850 or
SunAmerica Asset Funds receive on the U.S. Securities
Management Corp. instructions to the and Exchange Commission's
Harborside Financial con-trary, you will only website at
Center receive one copy of the http://www.sec.gov.
3200 Plaza 5 shareholder documents.
Jersey City, NJ The Funds will continue This report is submitted
07311-4992 to household the solely for the general
share-holder documents information of
DISTRIBUTOR indefinitely, until we shareholders of the
SunAmerica Capital are instructed otherwise. Funds. Distribution of
Services, Inc. If you do not wish to this report to persons
Harborside Financial participate in other than shareholders
Center householding please of the Funds is
3200 Plaza 5 contact Shareholder authorized only in
Jersey City, NJ Services at (800) con-nection with a
07311-4992 858-8850 ext. 6010 or currently effective
send a written request pro-spectus, setting
SHAREHOLDER SERVICING with your name, the name forth details of the
AGENT of your fund(s) and your Funds, which must precede
SunAmerica Fund account number(s) to or accom-pany this report.
Services, Inc. SunAmerica Mutual Funds
Harborside Financial c/o BFDS, P.O. Box The accompanying report
Center 219186, Kansas City MO, has not been audited by
3200 Plaza 5 64121-9186. We will independent accountants
Jersey City, NJ resume individual and accordingly no
07311-4992 mailings for your account opinion has been
within thirty (30) days expressed thereon.
CUSTODIAN AND TRANSFER of receipt of your
AGENT request.
State Street Bank and
Trust Company
P.O. Box 419572
Kansas City, MO
64141-6572
[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
INSAN - 9/11
[LOGO]
Sun America
Mutual Funds
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees that were
implemented after the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a-
101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures as (defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Exhibits.
(a) (1) Not Applicable.
(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 Income Funds
By: /s/ John T. Genoy
-------------------
John T. Genoy
President
Date: December 8, 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: December 8, 2011
By: /s/ Donna M. Handel
-------------------
Donna M. Handel
Treasurer
Date: December 8, 2011