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
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Date of fiscal year end: March 31
--------------------------
Date of reporting period: March 31, 2013
-------------------------
Item 1. Reports to Stockholders
ANNUAL REPORT 2013
SUNAMERICA
Income Funds
[PHOTO]
[LOGO]
MARCH 31, 2013 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............................... 65
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..... 84
TRUSTEE AND OFFICER INFORMATION............................. 85
SHAREHOLDER TAX INFORMATION................................. 89
COMPARISONS: PORTFOLIOS VS. INDICES......................... 90
SHAREHOLDER LETTER -- (UNAUDITED)
Dear Shareholders,
We are pleased to present this annual update for the SunAmerica Income Funds
for the 12 months ended March 31, 2013. It was a period wherein fixed income
market performance was generally positive, yet volatile. For the annual period
overall, the Barclays U.S. Aggregate Bond Index/*/, a broad measure of the U.S.
fixed income market, returned 3.77%.
Non-U.S. Treasury sectors began the annual period under pressure, as U.S.
economic data softened in April after a strong start to the year 2012. In
particular, payroll data released in April and May showed a significant slowing
in job gains. U.S. Treasury yields declined, and non-U.S. Treasury sectors
experienced a broad sell-off. As the second quarter of 2012 progressed, the
growing potential for a Greek exit from the euro and contagion in other
peripheral countries exacerbated market fears. Even a pro-bailout party win in
the Greek elections in mid-June failed to prop up markets as borrowing costs in
Spain soared to new highs. In addition, global manufacturing indicators
worsened significantly, with weakness spreading to Germany, Europe's key growth
engine. It was not until the end of June 2012, when significant progress was
made in stabilizing the European crisis, that sentiment began to improve. A
summit meeting of European Union leaders produced unexpectedly market-friendly
initiatives, including allowing bailout funds to recapitalize banks directly
and dropping the senior status of loans by these funds over private
bondholders. The U.S. Federal Reserve (the "Fed") extended through year end
2012 its economic stimulus program Operation Twist, meant to lower long-term
interest rates, and the European Central Bank (the "ECB") expanded its balance
sheet considerably, while the U.K. central bank continued to favor additional
quantitative easing. Even as non-U.S. Treasury sectors, including
higher-yielding corporate and emerging market bonds, gained ground, U.S.
Treasury yields continued to decline as weakness in U.S. and global economic
data weighed on investor sentiment.
Virtually all non-U.S. Treasury sectors outperformed U.S. Treasuries during the
third quarter of 2012, driven in large part by investors searching for yield in
an environment of extremely low interest rates. Market expectations for more
quantitative easing by the Fed increased in August based on the Fed's August
meeting minutes and Fed Chairman Bernanke's comments at the Fed's annual
conference in Jackson Hole, Wyoming. September then proved to be a particularly
eventful month, starting with the ECB's plan, called its Outright Monetary
Transactions ("OMT") program, to buy potentially unlimited amounts of
short-term government bonds in order to reduce borrowing costs in fiscally
challenged countries. The German Constitutional Court's early anticipated
ruling to ratify the European Stability Mechanism with immediate effect further
fanned market enthusiasm. Finally, the Fed announced a third round of
quantitative easing, dubbed QE3, which exceeded most market expectations. The
Fed agreed to purchase additional mortgage-backed securities at a pace of $40
billion per month in an effort to boost economic growth and reduce
unemployment. The announcement marked a meaningful policy shift in that it
focused on growth and employment rather than on inflation. Additionally, the
Fed extended its guidance on near-zero short-term interest rates from mid-2014
to at least mid-2015, stating it expects to maintain a highly accommodative
stance for a considerable period after the economic recovery strengthens. With
the Fed holding short-term interest rates at low levels, demand for higher
yielding sectors was strong.
Market jitters returned, however, by the end of September 2012, as challenges
in Spain, including a lack of clarity over a formal bailout request, quickly
shifted back into focus. Also, discord emerged among European policymakers over
measures to stem the banking and sovereign debt crisis, causing non-U.S.
Treasury sectors to pare back some of their earlier gains. Adding to market
pressures were growing signs of a global industrial decline, led by Europe and
Asia, and including countries such as Germany and China.
During the fourth quarter of 2012, major central banks maintained their
exceptionally accommodative stance. In the U.S., the Fed announced plans for
additional purchases of U.S. Treasury securities at a pace of $45 billion per
month, further expanding its balance sheet. The Fed also adopted inflation and
unemployment rate thresholds in place of its prior mid-2015 time frame, noting
that it would keep short-term rates unchanged for at least as long as
unemployment remains above 6.5% and inflation projections stay near its 2%
target.
2
All major central banks reiterated their support for easy monetary policy
during the first quarter of 2013. The Fed maintained its bond-buying program,
purchasing $85 billion per month in mortgage-backed securities and U.S.
Treasuries, while keeping policy rates unchanged. Meanwhile, the Bank of
England, the Bank of Japan and the ECB reiterated their commitment to
maintaining accommodative monetary policy as long as needed. In Europe, we
witnessed increasing signs of "austerity fatigue," as evidenced by the rise of
anti-establishment parties in Italy's elections. Similarly, "bailout fatigue"
among creditor nations, such as Germany and the Netherlands, led to a reversal
of the earlier proposal of recapitalizing banks directly through the Eurozone's
rescue funds. Rather, this proposal of bank bailouts by taxpayers was replaced
by a "bail-in" of bank creditors, shareholders and even uninsured depositors in
the case of Cyprus.
In the U.S., economic data released during the first three months of 2013 was
largely upbeat, with further improvement in the labor market and housing
sector. However, European economic activity and domestic demand remained
depressed; its unemployment rate came in at a record high of 11.9%. In China,
economic activity showed some signs of fragility even as the government
continued to implement measures to cool excessive activity in areas like
property and off-balance-sheet funding vehicles. Japan continued to post large
trade deficits and most manufacturing indicators signaled weakness. Conditions
in non-manufacturing sectors, including real estate, were slightly more
optimistic as the government reiterated its commitment to domestic reflation.
For the annual period overall, U.S. Treasuries posted positive returns that
outpaced select fixed income sectors, including mortgage-backed securities and
asset-backed securities. By the end of March 2013, the yield on the 10-year
U.S. Treasury had fallen 36 basis points+ to 1.86%. Most other non-U.S.
Treasury sectors performed better. Emerging market bonds and corporate bonds,
both investment grade and high yield, were the best performing fixed income
sectors for the annual period as a whole. Commercial mortgage-backed securities
also posted strong gains.
On the following pages, you will find detailed financial statements and
portfolio information for each of the SunAmerica Income Funds during the most
recent annual period.
We thank you for being a part of the SunAmerica Income Funds. 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 advisor or get in touch with us directly at
800-858-8850 or www.safunds.com.
Sincerely,
THE SUNAMERICA INCOME FUNDS INVESTMENT PROFESSIONALS
Michael Cheah Robert Vanden Assem Christopher Jones
Anthony King John Yovanovic John Dunlevy
Rajeev Mittal
--------
Past performance is no guarantee of future results.
*The Barclays 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.
+A basis point is 1/100/th/ of a percentage point.
3
SUNAMERICA INCOME FUNDS
EXPENSE EXAMPLE -- MARCH 31, 2013 -- (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 October 1, 2012 and held until March 31, 2013.
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 March 31, 2013" to estimate the expenses you paid on your account
during this period. The "Expenses Paid During the Six Months Ended March 31,
2013" 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 March 31, 2013" 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 March
31, 2013" 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 March 31, 2013" 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 March
31, 2013" 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 March 31, 2013" 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 -- MARCH 31, 2013 -- (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 OCTOBER 1, MARCH 31, MARCH 31, AT OCTOBER 1, MARCH 31, MARCH 31, MARCH 31,
FUND 2012 2013 2013* 2012 2013 2013* 2013*
---- ------------- -------------- ------------- ------------- -------------- ------------- ---------
U.S. GOVERNMENT SECURITIES
Class A#................. $1,000.00 $ 989.58 $ 4.91 $1,000.00 $1,020.00 $ 4.99 0.99%
Class B#................. $1,000.00 $ 986.41 $ 8.12 $1,000.00 $1,016.75 $ 8.25 1.64%
Class C#................. $1,000.00 $ 986.39 $ 8.12 $1,000.00 $1,016.75 $ 8.25 1.64%
GNMA
Class A#................. $1,000.00 $ 988.78 $ 4.91 $1,000.00 $1,020.00 $ 4.99 0.99%
Class B#................. $1,000.00 $ 985.65 $ 8.12 $1,000.00 $1,016.75 $ 8.25 1.64%
Class C#................. $1,000.00 $ 985.70 $ 8.12 $1,000.00 $1,016.75 $ 8.25 1.64%
STRATEGIC BOND
Class A.................. $1,000.00 $1,023.94 $ 6.56 $1,000.00 $1,018.45 $ 6.54 1.30%
Class B.................. $1,000.00 $1,020.59 $ 9.87 $1,000.00 $1,015.16 $ 9.85 1.96%
Class C.................. $1,000.00 $1,020.65 $ 9.77 $1,000.00 $1,015.26 $ 9.75 1.94%
HIGH YIELD BOND
Class A#................. $1,000.00 $1,054.93 $ 6.97 $1,000.00 $1,018.15 $ 6.84 1.36%
Class B#................. $1,000.00 $1,051.53 $10.28 $1,000.00 $1,014.91 $10.10 2.01%
Class C#................. $1,000.00 $1,051.37 $10.28 $1,000.00 $1,014.91 $10.10 2.01%
--------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 182 days divided by 365
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 advisor for more information.
# During the stated period, the investment advisor either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Funds.
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 March 31,
2013" and the "Expense Ratios" would have been higher.
5
SUNAMERICA INCOME FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- MARCH 31, 2013
U.S. GOVERNMENT
SECURITIES GNMA
FUND FUND
--------------- ------------
ASSETS:
Investments at value (unaffiliated)*.......................................................... $121,260,464 $241,595,953
Repurchase agreements (cost approximates value)............................................... 17,578,000 44,598,000
------------ ------------
Total investments............................................................................. 138,838,464 286,193,953
------------ ------------
Cash.......................................................................................... 471 10,965
Foreign cash*................................................................................. -- --
Receivable for:...............................................................................
Shares of beneficial interest sold.......................................................... 152,924 563,129
Dividends and interest...................................................................... 555,796 634,404
Investments sold............................................................................ -- 20,412,234
Prepaid expenses and other assets............................................................. 455 1,081
Due from investment adviser for expense reimbursements/fee waivers............................ 42,954 42,013
------------ ------------
Total assets.................................................................................. 139,591,064 307,857,779
============ ============
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed...................................................... 584,551 699,682
Investments purchased....................................................................... -- 86,107,479
Investment advisory and management fees..................................................... 75,758 88,989
Distribution and service maintenance fees................................................... 50,350 101,854
Transfer agent fees and expenses............................................................ 33,251 57,557
Trustees' fees and expenses................................................................. 6,844 3,963
Other accrued expenses...................................................................... 86,700 102,664
Dividends payable........................................................................... 19,890 63,322
Unrealized depreciation on forward foreign currency contracts................................. -- --
------------ ------------
Total liabilities............................................................................. 857,344 87,225,510
------------ ------------
Net assets.................................................................................... $138,733,720 $220,632,269
============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01.......................................................... $ 139,945 $ 195,713
Paid-in capital............................................................................... 129,759,781 218,267,411
------------ ------------
129,899,726 218,463,124
Accumulated undistributed net investment income (loss)........................................ 48,069 (447,124)
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options
contracts, securities sold short, and foreign exchange transactions.......................... (181,052) (2,448,546)
Unrealized appreciation (depreciation) on investments......................................... 8,966,977 5,064,815
Unrealized appreciation (depreciation) on foreign exchange transactions....................... -- --
------------ ------------
Net assets.................................................................................... $138,733,720 $220,632,269
============ ============
* Cost........................................................................................
Investments (unaffiliated).................................................................. $112,293,487 $236,531,138
============ ============
Foreign cash................................................................................ $ -- $ --
============ ============
STRATEGIC HIGH YIELD
BOND BOND
FUND FUND
------------ ------------
ASSETS:
Investments at value (unaffiliated)*.......................................................... $657,857,829 $119,530,204
Repurchase agreements (cost approximates value)............................................... 3,387,000 785,000
------------ ------------
Total investments............................................................................. 661,244,829 120,315,204
------------ ------------
Cash.......................................................................................... 150,161 14,291
Foreign cash*................................................................................. 377,217 --
Receivable for:...............................................................................
Shares of beneficial interest sold.......................................................... 2,986,750 678,451
Dividends and interest...................................................................... 9,755,761 2,303,070
Investments sold............................................................................ 22,452,463 463,488
Prepaid expenses and other assets............................................................. 1,862 2,155
Due from investment adviser for expense reimbursements/fee waivers............................ -- 9,538
------------ ------------
Total assets.................................................................................. 696,969,043 123,786,197
============ ============
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed...................................................... 1,444,167 201,954
Investments purchased....................................................................... 29,560,801 1,058,644
Investment advisory and management fees..................................................... 351,373 79,723
Distribution and service maintenance fees................................................... 377,849 63,762
Transfer agent fees and expenses............................................................ 134,728 32,442
Trustees' fees and expenses................................................................. 4,415 3,022
Other accrued expenses...................................................................... 170,194 175,357
Dividends payable........................................................................... 425,420 121,281
Unrealized depreciation on forward foreign currency contracts................................. -- 1,627
------------ ------------
Total liabilities............................................................................. 32,468,947 1,737,812
------------ ------------
Net assets.................................................................................... $664,500,096 $122,048,385
============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01.......................................................... $ 1,845,450 $ 340,653
Paid-in capital............................................................................... 703,889,492 179,448,717
------------ ------------
705,734,942 179,789,370
Accumulated undistributed net investment income (loss)........................................ (1,118,244) 55,507
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options
contracts, securities sold short, and foreign exchange transactions.......................... (52,964,010) (53,323,691)
Unrealized appreciation (depreciation) on investments......................................... 12,877,449 (4,471,167)
Unrealized appreciation (depreciation) on foreign exchange transactions....................... (30,041) (1,634)
------------ ------------
Net assets.................................................................................... $664,500,096 $122,048,385
============ ============
* Cost........................................................................................
Investments (unaffiliated).................................................................. $644,980,380 $124,001,371
============ ============
Foreign cash................................................................................ $ 383,382 $ --
============ ============
6
SUNAMERICA INCOME FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- MARCH 31, 2013 (CONTINUED)
U.S. GOVERNMENT
SECURITIES GNMA
FUND FUND
--------------- ------------
CLASS A (UNLIMITED SHARES AUTHORIZED):
Net assets......................................................................................... $121,806,536 $158,830,331
Shares of beneficial interest issued and outstanding............................................... 12,286,300 14,104,243
Net asset value and redemption price per share (excluding any applicable contingent deferred sales
charge)........................................................................................... $ 9.91 $ 11.26
Maximum sales charge (4.75% of offering price)..................................................... $ 0.49 $ 0.56
------------ ------------
Maximum offering price to public................................................................... $ 10.40 $ 11.82
============ ============
CLASS B (UNLIMITED SHARES AUTHORIZED):
Net assets......................................................................................... $ 4,700,724 $ 14,331,024
Shares of beneficial interest issued and outstanding............................................... 474,006 1,269,079
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ 9.92 $ 11.29
============ ============
CLASS C (UNLIMITED SHARES AUTHORIZED):
Net assets......................................................................................... $ 12,226,460 $ 47,470,914
Shares of beneficial interest issued and outstanding............................................... 1,234,223 4,197,999
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ 9.91 $ 11.31
============ ============
STRATEGIC HIGH YIELD
BOND BOND
FUND FUND
------------ -----------
CLASS A (UNLIMITED SHARES AUTHORIZED):
Net assets......................................................................................... $336,758,554 $74,175,230
Shares of beneficial interest issued and outstanding............................................... 93,667,336 20,738,812
Net asset value and redemption price per share (excluding any applicable contingent deferred sales
charge)........................................................................................... $ 3.60 $ 3.58
Maximum sales charge (4.75% of offering price)..................................................... $ 0.18 $ 0.18
------------ -----------
Maximum offering price to public................................................................... $ 3.78 $ 3.76
============ ===========
CLASS B (UNLIMITED SHARES AUTHORIZED):
Net assets......................................................................................... $ 56,776,138 $13,955,536
Shares of beneficial interest issued and outstanding............................................... 15,797,080 3,896,915
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ 3.59 $ 3.58
============ ===========
CLASS C (UNLIMITED SHARES AUTHORIZED):
Net assets......................................................................................... $270,965,404 $33,917,619
Shares of beneficial interest issued and outstanding............................................... 75,080,539 9,429,547
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ 3.61 $ 3.60
============ ===========
See Notes to Financial Statements
7
SUNAMERICA INCOME FUNDS
STATEMENT OF OPERATIONS -- FOR THE YEAR ENDED MARCH 31, 2013
U.S. GOVERNMENT
SECURITIES FUND GNMA FUND
--------------- -----------
INVESTMENT INCOME:
Dividends (unaffiliated)...................................................................... $ -- $ --
Interest (unaffiliated)....................................................................... 3,287,204 3,992,678
---------- -----------
Total investment income*..................................................................... 3,287,204 3,992,678
---------- -----------
EXPENSES:
Investment advisory and management fees....................................................... 893,537 1,346,818
Distribution and service maintenance fees:
Class A...................................................................................... 415,126 755,252
Class B...................................................................................... 48,447 151,590
Class C...................................................................................... 140,152 600,142
Transfer agent fees and expenses:
Class A...................................................................................... 280,623 500,063
Class B...................................................................................... 13,490 37,417
Class C...................................................................................... 34,618 139,580
Registration fees:
Class A...................................................................................... 17,234 24,154
Class B...................................................................................... 8,150 9,080
Class C...................................................................................... 8,092 10,670
Custodian and accounting fees................................................................. 71,348 175,146
Reports to shareholders....................................................................... 22,914 47,544
Audit and tax fees............................................................................ 48,940 48,403
Legal fees.................................................................................... 13,854 17,736
Trustees' fees and expenses................................................................... 13,188 30,383
Interest expense.............................................................................. -- 2,342
Other expenses................................................................................ 18,319 21,676
---------- -----------
Total expenses before fee waivers, expense reimbursements, expense recoupments and custody
credits..................................................................................... 2,048,032 3,917,996
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3)............ (564,503) (547,769)
Custody credits earned on cash balances...................................................... (13) (1,099)
---------- -----------
Net expenses................................................................................. 1,483,516 3,369,128
---------- -----------
Net investment income (loss).................................................................... 1,803,688 623,550
---------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated).......................................... 635,015 5,819,811
Net realized foreign exchange gain (loss) on other assets and liabilities....................... -- --
---------- -----------
Net realized gain (loss) on investments and foreign currencies.................................. 635,015 5,819,811
---------- -----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated).................. 127,518 (7,628,267)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities............... -- --
---------- -----------
Net unrealized gain (loss) on investments and foreign currencies................................ 127,518 (7,628,267)
---------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies................... 762,533 (1,808,456)
---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $2,566,221 $(1,184,906)
---------- -----------
* Net of foreign withholding taxes on interest and dividends of................................. $ -- $ --
========== ===========
STRATEGIC HIGH YIELD
BOND FUND BOND FUND
----------- -----------
INVESTMENT INCOME:
Dividends (unaffiliated)...................................................................... $ 141,241 $ 195,274
Interest (unaffiliated)....................................................................... 30,783,105 8,948,648
----------- -----------
Total investment income*..................................................................... 30,924,346 9,143,922
----------- -----------
EXPENSES:
Investment advisory and management fees....................................................... 3,890,736 954,873
Distribution and service maintenance fees:
Class A...................................................................................... 1,056,643 273,664
Class B...................................................................................... 548,986 131,243
Class C...................................................................................... 2,624,929 360,024
Transfer agent fees and expenses:
Class A...................................................................................... 687,199 186,477
Class B...................................................................................... 127,325 31,801
Class C...................................................................................... 590,749 83,615
Registration fees:
Class A...................................................................................... 35,378 13,834
Class B...................................................................................... 12,520 9,647
Class C...................................................................................... 19,851 11,353
Custodian and accounting fees................................................................. 260,112 74,918
Reports to shareholders....................................................................... 83,347 25,877
Audit and tax fees............................................................................ 59,114 62,952
Legal fees.................................................................................... 23,574 10,041
Trustees' fees and expenses................................................................... 58,726 12,356
Interest expense.............................................................................. 213 336
Other expenses................................................................................ 28,248 18,046
----------- -----------
Total expenses before fee waivers, expense reimbursements, expense recoupments and custody
credits..................................................................................... 10,107,650 2,261,057
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3)............ -- (210,169)
Custody credits earned on cash balances...................................................... (251) (57)
----------- -----------
Net expenses................................................................................. 10,107,399 2,050,831
----------- -----------
Net investment income (loss).................................................................... 20,816,947 7,093,091
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated).......................................... 19,690,814 1,615,182
Net realized foreign exchange gain (loss) on other assets and liabilities....................... (165,800) 1,082
----------- -----------
Net realized gain (loss) on investments and foreign currencies.................................. 19,525,014 1,616,264
----------- -----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated).................. 6,599,388 4,750,820
Change in unrealized foreign exchange gain (loss) on other assets and liabilities............... (3,881) (1,634)
----------- -----------
Net unrealized gain (loss) on investments and foreign currencies................................ 6,595,507 4,749,186
----------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies................... 26,120,521 6,365,450
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $46,937,468 $13,458,541
----------- -----------
* Net of foreign withholding taxes on interest and dividends of................................. $ (15,640) $ (4,097)
=========== ===========
See Notes to Financial Statements
8
SUNAMERICA INCOME FUNDS
STATEMENT OF CHANGES IN NET ASSETS
U.S. GOVERNMENT
SECURITIES FUND
--------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, MARCH 31,
2013 2012
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss).......................................................... $ 1,803,688 $ 2,493,983
Net realized gain (loss) on investments and foreign currencies........................ 635,015 4,794,812
Net unrealized gain (loss) on investments and foreign currencies...................... 127,518 5,367,042
------------ ------------
Net increase (decrease) in net assets resulting from operations.......................... 2,566,221 12,655,837
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (2,407,603) (2,871,740)
Net investment income (Class B)........................................................ (66,885) (77,643)
Net investment income (Class C)........................................................ (193,462) (214,636)
Net realized gain on securities (Class A).............................................. (1,485,196) (275,963)
Net realized gain on securities (Class B).............................................. (64,225) (11,071)
Net realized gain on securities (Class C).............................................. (181,121) (33,009)
------------ ------------
Total distributions to shareholders.................................................... (4,398,492) (3,484,062)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 6). 2,700,859 (34,156,481)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. 868,588 (24,984,706)
NET ASSETS:
Beginning of period...................................................................... 137,865,132 162,849,838
------------ ------------
End of period+........................................................................... $138,733,720 $137,865,132
============ ============
--------
+ Includes accumulated undistributed net investment income (loss)........................ $ 48,069 $ 472,266
============ ============
GNMA FUND
---------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, MARCH 31,
2013 2012
------------- ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss).......................................................... $ 623,550 $ 5,421,635
Net realized gain (loss) on investments and foreign currencies........................ 5,819,811 16,510,253
Net unrealized gain (loss) on investments and foreign currencies...................... (7,628,267) (1,005,185)
------------- ------------
Net increase (decrease) in net assets resulting from operations.......................... (1,184,906) 20,926,703
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (5,347,575) (7,212,565)
Net investment income (Class B)........................................................ (279,727) (356,993)
Net investment income (Class C)........................................................ (1,102,427) (1,345,266)
Net realized gain on securities (Class A).............................................. (639,911) (8,344,491)
Net realized gain on securities (Class B).............................................. (46,181) (492,879)
Net realized gain on securities (Class C).............................................. (185,523) (1,924,819)
------------- ------------
Total distributions to shareholders.................................................... (7,601,344) (19,677,013)
------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 6). (108,594,379) 12,359,389
------------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. (117,380,629) 13,609,079
NET ASSETS:
Beginning of period...................................................................... 338,012,898 324,403,819
------------- ------------
End of period+........................................................................... $ 220,632,269 $338,012,898
============= ============
--------
+ Includes accumulated undistributed net investment income (loss)........................ $ (447,124) $ (343,846)
============= ============
See Notes to Financial Statements
9
SUNAMERICA INCOME FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
STRATEGIC BOND FUND
--------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, MARCH 31,
2013 2012
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ 20,816,947 $ 25,175,085
Net realized gain (loss) on investments and foreign currencies......................... 19,525,014 6,258,584
Net unrealized gain (loss) on investments and foreign currencies....................... 6,595,507 (3,926,690)
------------ ------------
Net increase (decrease) in net assets resulting from operations.......................... 46,937,468 27,506,979
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (12,197,323) (14,928,172)
Net investment income (Class B)........................................................ (1,852,378) (2,461,123)
Net investment income (Class C)........................................................ (8,911,106) (11,924,376)
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...................................................... (22,960,807) (29,313,671)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 6). 37,772,753 46,800,108
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. 61,749,414 44,993,416
NET ASSETS:
Beginning of period...................................................................... 602,750,682 557,757,266
------------ ------------
End of period+........................................................................... $664,500,096 $602,750,682
============ ============
--------
+ Includes accumulated undistributed net investment income (loss)........................ $ (1,118,244) $ (2,256,649)
============ ============
HIGH YIELD BOND FUND
--------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, MARCH 31,
2013 2012
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ 7,093,091 $ 8,226,224
Net realized gain (loss) on investments and foreign currencies......................... 1,616,264 1,121,000
Net unrealized gain (loss) on investments and foreign currencies....................... 4,749,186 (4,152,876)
------------ ------------
Net increase (decrease) in net assets resulting from operations.......................... 13,458,541 5,194,348
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (4,437,764) (5,570,893)
Net investment income (Class B)........................................................ (658,906) (883,098)
Net investment income (Class C)........................................................ (1,809,761) (2,451,920)
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...................................................... (6,906,431) (8,905,911)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 6). (14,215,891) 2,148,997
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. (7,663,781) (1,562,566)
NET ASSETS:
Beginning of period...................................................................... 129,712,166 131,274,732
------------ ------------
End of period+........................................................................... $122,048,385 $129,712,166
============ ============
--------
+ Includes accumulated undistributed net investment income (loss)........................ $ 55,507 $ (911,835)
============ ============
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,
VALUE, NET REALIZED TOTAL FROM FROM NET REALIZED TOTAL VALUE, END OF
BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD
PERIOD ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENTS BUTIONS PERIOD RETURN(2) (000'S)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- --------
CLASS A
-------
03/31/09 $ 9.68 $0.26 $ 0.36 $ 0.62 $(0.28) $ -- $(0.28) $10.02 6.52% $178,963
03/31/10 10.02 0.21 (0.28) (0.07) (0.21) (0.19) (0.40) 9.55 (0.75)(4) 159,028
03/31/11 9.55 0.17 0.13 0.30 (0.18) (0.16) (0.34) 9.51 3.12 143,978
03/31/12 9.51 0.17 0.62 0.79 (0.22) (0.02) (0.24) 10.06 8.34(5) 118,434
03/31/13 10.06 0.14 0.05 0.19 (0.21) (0.13) (0.34) 9.91 1.84 121,807
CLASS B
-------
03/31/09 $ 9.68 $0.20 $ 0.35 $ 0.55 $(0.21) $ -- $(0.21) $10.02 5.83% $ 15,803
03/31/10 10.02 0.16 (0.29) (0.13) (0.14) (0.19) (0.33) 9.56 (1.29)(4) 8,578
03/31/11 9.56 0.11 0.11 0.22 (0.11) (0.16) (0.27) 9.51 2.35 5,710
03/31/12 9.51 0.11 0.62 0.73 (0.15) (0.02) (0.17) 10.07 7.74(5) 4,758
03/31/13 10.07 0.08 0.04 0.12 (0.14) (0.13) (0.27) 9.92 1.18 4,701
CLASS C
-------
03/31/09 $ 9.67 $0.20 $ 0.35 $ 0.55 $(0.21) $ -- $(0.21) $10.01 5.83% $ 20,094
03/31/10 10.01 0.15 (0.28) (0.13) (0.14) (0.19) (0.33) 9.55 (1.30)(4) 14,894
03/31/11 9.55 0.11 0.11 0.22 (0.11) (0.16) (0.27) 9.50 2.35 13,161
03/31/12 9.50 0.11 0.61 0.72 (0.15) (0.02) (0.17) 10.05 7.64(5) 14,673
03/31/13 10.05 0.08 0.05 0.13 (0.14) (0.13) (0.27) 9.91 1.28 12,226
RATIO
OF NET
RATIO OF INVESTMENT
EXPENSES INCOME TO
TO AVERAGE AVERAGE PORTFOLIO
NET ASSETS(3) NET ASSETS(3) TURNOVER
------------- ------------- ---------
0.99% 2.73% 84%
0.99 2.17 472
0.99 1.77 254
0.99 1.73 152
0.99 1.40 89
1.64% 2.08% 84%
1.64 1.59 472
1.64 1.10 254
1.64 1.09 152
1.64 0.75 89
1.64% 2.05% 84%
1.64 1.55 472
1.64 1.12 254
1.64 1.08 152
1.64 0.76 89
--------
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/09 03/31/10 03/31/11 03/31/12 03/31/13
-------- -------- -------- -------- --------
U.S. Government Securities Fund Class A. 0.35% 0.38% 0.37% 0.39% 0.40%
U.S. Government Securities Fund Class B. 0.40 0.50 0.53 0.60 0.59
U.S. Government Securities Fund Class C. 0.40 0.44 0.44 0.46 0.45
(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)The Fund's performance figure was increased by less than 0.01% from gains on
the disposal of investments in violation of investment restrictions.
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
BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD TO AVERAGE
PERIOD ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENTS BUTIONS PERIOD RETURN(2) (000'S) NET ASSETS(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
CLASS A
-------
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
03/31/12 11.56 0.21 0.55 0.76 (0.33) (0.37) (0.70) 11.62 6.69 257,413 0.99
03/31/13 11.62 0.04 (0.07) (0.03) (0.29) (0.04) (0.33) 11.26 (0.34) 158,830 0.99
CLASS B
-------
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
03/31/12 11.59 0.14 0.55 0.69 (0.26) (0.37) (0.63) 11.65 5.99 15,595 1.64
03/31/13 11.65 (0.03) (0.08) (0.11) (0.21) (0.04) (0.25) 11.29 (0.97) 14,331 1.64
CLASS C
-------
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
03/31/12 11.60 0.13 0.57 0.70 (0.26) (0.37) (0.63) 11.67 6.07 65,005 1.64
03/31/13 11.67 (0.03) (0.08) (0.11) (0.21) (0.04) (0.25) 11.31 (0.97) 47,471 1.64
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS(3) TURNOVER
------------- ---------
3.32% 73%
2.28 104
2.59 148
1.76 96
0.38 150
2.67% 73%
1.63 104
1.89 148
1.14 96
(0.27) 150
2.55% 73%
1.63 104
1.94 148
1.12 96
(0.26) 150
--------
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/09 03/31/10 03/31/11 03/31/12 03/31/13
-------- -------- -------- -------- --------
GNMA Fund Class A............. 0.13% 0.15% 0.15% 0.15% 0.18%
GNMA Fund Class B............. 0.15 0.19 0.21 0.22 0.25
GNMA Fund Class C............. 0.15 0.16 0.17 0.17 0.19
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
BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD TO AVERAGE
PERIOD ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENTS BUTIONS PERIOD+ RETURN(2) (000'S) NET ASSETS
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------- --------- -------- ----------
CLASS A
-------
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
03/31/12 3.46 0.16 0.02 0.18 (0.19) -- (0.19) 3.45 5.30 299,325 1.31
03/31/13 3.45 0.13 0.16 0.29 (0.14) -- (0.14) 3.60 8.64 336,759 1.30
CLASS B
-------
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
03/31/12 3.46 0.14 0.01 0.15 (0.16) -- (0.16) 3.45 4.60 52,000 1.98
03/31/13 3.45 0.11 0.15 0.26 (0.12) -- (0.12) 3.59 7.62 56,776 1.97
CLASS C
-------
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
03/31/12 3.48 0.14 0.02 0.16 (0.17) -- (0.17) 3.47 4.63 251,425 1.96
03/31/13 3.47 0.11 0.15 0.26 (0.12) -- (0.12) 3.61 7.62 270,965 1.94
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS TURNOVER
---------- ---------
6.54% 112%
6.13 157
5.50 152
4.72 144
3.70 166
6.00% 112%
5.44 157
4.83 152
4.07 144
3.02 166
6.03% 112%
5.48 157
4.85 152
4.09 144
3.05 166
--------
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements.
See Notes to Financial Statements
13
SUNAMERICA INCOME FUNDS
FINANCIAL HIGHLIGHTS -- (CONTINUED)
HIGH YIELD 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
BEGINNING INVESTMENT AND INVESTMENT INVESTMENT GAINS ON DISTRI- END OF TOTAL PERIOD TO AVERAGE
PERIOD ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME INVESTMENT BUTIONS PERIOD RETURN(2) (000'S) NET ASSETS(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ------- -------------
CLASS A
-------
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
03/31/12 3.50 0.23 (0.08) 0.15 (0.25) -- (0.25) 3.40 4.52 81,477 1.36
03/31/13 3.40 0.20 0.18 0.38 (0.20) -- (0.20) 3.58 11.42 74,175 1.36
CLASS B
-------
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
03/31/12 3.51 0.21 (0.09) 0.12 (0.23) -- (0.23) 3.40 3.55 11,512 2.01
03/31/13 3.40 0.18 0.17 0.35 (0.17) -- (0.17) 3.58 10.70 13,956 2.01
CLASS C
-------
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
03/31/12 3.53 0.21 (0.09) 0.12 (0.23) -- (0.23) 3.42 3.56 36,723 2.01
03/31/13 3.42 0.18 0.18 0.36 (0.18) -- (0.18) 3.60 10.67 33,918 2.01
RATIO
OF NET
INVESTMENT
INCOME TO
AVERAGE PORTFOLIO
NET ASSETS(3) TURNOVER
------------- ---------
10.74% 77%
9.34 110
7.47 48
6.72 52
5.82 44
10.18% 77%
8.77 110
6.84 48
6.19 52
5.16 44
10.16% 77%
8.70 110
6.83 48
6.11 52
5.18 44
--------
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/09 03/31/10 03/31/11 03/31/12 03/31/13
-------- -------- -------- -------- --------
High Yield Bond Fund Class A............ 0.14% 0.18% 0.16% 0.18% 0.16%
High Yield Bond Fund Class B............ 0.16 0.23 0.21 0.25 0.22
High Yield Bond Fund Class C............ 0.15 0.18 0.16 0.19 0.16
See Notes to Financial Statements
14
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO PROFILE -- MARCH 31, 2013 -- (UNAUDITED)
INDUSTRY ALLOCATION*
United States Treasury Notes.... 37.2%
Government National Mtg. Assoc.. 31.1
United States Treasury Bonds.... 15.6
Repurchase Agreements........... 12.7
United States Treasury Bills.... 2.9
Federal Farm Credit Bank........ 0.4
Small Business Administration... 0.2
Federal National Mtg. Assoc..... 0.0
-----
100.1%
=====
CREDIT QUALITY ALLOCATION+#
Aaa................. 99.7%
Not Rated@.......... 0.3
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Moody'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.
15
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 31.7%
FEDERAL FARM CREDIT BANK -- 0.4%
6.30% due 12/03/2013.................. $ 500,000 $ 520,752
----------
FEDERAL NATIONAL MTG. ASSOC. -- 0.0%
8.00% due 01/01/2023.................. 6,407 6,427
11.00% due 02/01/2015................. 11 11
11.50% due 09/01/2019................. 558 571
----------
7,009
----------
GOVERNMENT NATIONAL MTG. ASSOC. -- 31.1%
4.50% due 05/15/2018.................. 238,133 260,968
4.50% due 08/15/2018.................. 386,482 423,542
4.50% due 09/15/2018.................. 1,053,937 1,155,466
4.50% due 10/15/2018.................. 1,048,996 1,149,734
4.50% due 09/15/2033.................. 1,009,436 1,109,780
4.50% due 02/15/2039.................. 9,712 10,620
4.50% due 04/15/2039.................. 478,879 523,639
4.50% due 05/15/2039.................. 586,240 641,035
4.50% due 06/15/2039.................. 194,182 212,329
4.50% due 07/15/2039.................. 165,682 181,168
4.50% due 09/15/2039.................. 686,426 750,586
4.50% due 10/15/2039.................. 752,996 823,400
4.50% due 12/15/2039.................. 1,270,283 1,389,014
4.50% due 01/15/2040.................. 749,208 822,628
4.50% due 02/15/2040.................. 1,004,925 1,102,622
4.50% due 03/15/2040.................. 860,591 944,257
4.50% due 04/15/2040.................. 593,719 651,738
4.50% due 05/15/2040.................. 534,353 586,960
4.50% due 06/15/2040.................. 1,071,327 1,176,900
4.50% due 07/15/2040.................. 841,686 923,961
4.50% due 08/15/2040.................. 366,541 402,176
4.50% due 09/15/2040.................. 19,065 20,918
4.50% due 03/15/2041.................. 1,763,131 1,935,957
4.50% due 04/15/2041.................. 168,036 187,050
4.50% due 06/15/2041.................. 951,536 1,051,351
4.50% due 07/15/2041.................. 66,209 72,397
4.50% due 08/15/2041.................. 1,248,150 1,364,814
5.00% due 04/15/2018.................. 1,031,728 1,115,028
5.00% due 04/15/2033.................. 7,426 8,086
5.00% due 08/15/2033.................. 661,950 725,047
5.00% due 09/15/2033.................. 308,622 340,604
5.00% due 10/15/2033.................. 204,736 225,826
5.00% due 04/15/2034.................. 8,275 9,067
5.00% due 11/15/2034.................. 69,249 75,884
5.00% due 02/15/2035.................. 6,353 6,942
5.00% due 03/15/2035.................. 134,956 148,139
5.00% due 04/15/2035.................. 18,368 20,071
5.00% due 05/15/2035.................. 507,289 554,308
5.00% due 09/15/2035.................. 250,344 274,494
5.00% due 10/15/2035.................. 42,101 46,003
5.00% due 12/15/2035.................. 23,922 26,139
5.00% due 03/15/2036.................. 440,704 482,867
5.00% due 05/15/2036.................. 383,009 417,552
5.00% due 06/15/2036.................. 265,592 289,545
5.00% due 09/15/2036.................. 607,215 663,116
5.00% due 10/15/2036.................. 246,576 268,814
5.00% due 11/15/2036.................. 18,731 20,420
5.00% due 12/15/2036.................. 86,262 94,043
5.00% due 01/15/2037.................. 1,041,010 1,132,293
5.00% due 02/15/2037.................. 376,054 409,307
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
5.00% due 03/15/2037..................... $ 367,403 $ 399,620
5.00% due 04/15/2037..................... 363,094 394,933
5.00% due 08/15/2038..................... 2,535,121 2,757,419
5.50% due 11/15/2032..................... 3,734 4,118
5.50% due 03/15/2033..................... 111,573 123,030
5.50% due 04/15/2033..................... 228,401 251,602
5.50% due 05/15/2033..................... 382,748 421,490
5.50% due 06/15/2033..................... 1,799,421 1,983,355
5.50% due 07/15/2033..................... 518,002 570,950
5.50% due 10/15/2033..................... 455,399 501,949
5.50% due 12/15/2033..................... 98,527 108,598
5.50% due 01/15/2034..................... 1,363,237 1,500,455
5.50% due 02/15/2034..................... 783,563 861,878
6.00% due 01/15/2028..................... 1,201 1,373
6.00% due 04/15/2028..................... 391,906 442,792
6.00% due 10/15/2028..................... 3,043 3,478
6.00% due 04/15/2029..................... 19,362 21,939
6.00% due 05/15/2029..................... 34,170 38,893
6.00% due 06/15/2029..................... 10,700 12,064
6.00% due 04/15/2031..................... 10,148 11,565
6.00% due 05/15/2031..................... 14,663 16,757
6.00% due 11/15/2031..................... 119,885 136,483
6.00% due 12/15/2031..................... 3,420 3,896
6.00% due 01/15/2032..................... 53,031 60,304
6.00% due 02/15/2032..................... 8,354 9,496
6.00% due 03/15/2032..................... 2,998 3,415
6.00% due 08/15/2032..................... 116,212 132,824
6.00% due 11/15/2032..................... 13,530 15,437
6.00% due 12/15/2032..................... 4,929 5,605
6.00% due 01/15/2033..................... 10,788 12,258
6.00% due 02/15/2033..................... 13,128 14,896
6.00% due 03/15/2033..................... 37,089 42,083
6.00% due 04/15/2033..................... 169,739 192,575
6.00% due 07/15/2033..................... 83,571 94,824
6.00% due 08/15/2033..................... 703,985 801,630
6.00% due 09/15/2033..................... 122,150 138,598
6.00% due 10/15/2033..................... 412,996 468,751
6.00% due 11/15/2033..................... 48,803 55,490
6.00% due 12/15/2033..................... 273,890 313,619
6.00% due 02/15/2034..................... 89,428 101,917
6.00% due 05/15/2034..................... 8,646 9,810
6.00% due 06/15/2034..................... 17,385 20,481
6.00% due 07/15/2034..................... 506,573 573,802
6.00% due 08/15/2034..................... 62,581 70,954
6.00% due 09/15/2034..................... 208,650 239,073
6.00% due 10/15/2034..................... 734,778 830,735
6.00% due 12/15/2034..................... 142,964 161,635
6.00% due 08/15/2035..................... 66,625 75,203
6.50% due 02/15/2029..................... 4,894 5,529
6.50% due 06/15/2031..................... 6,974 8,246
6.50% due 07/15/2031..................... 19,751 23,354
6.50% due 08/15/2031..................... 23,412 27,488
6.50% due 09/15/2031..................... 62,527 71,730
6.50% due 10/15/2031..................... 102,530 121,229
6.50% due 11/15/2031..................... 3,370 3,859
6.50% due 01/15/2032..................... 7,817 8,888
6.50% due 02/15/2032..................... 98,191 112,282
7.00% due 07/15/2023..................... 9,634 11,211
16
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
7.00% due 10/15/2023..................... $ 22,456 $ 26,133
7.00% due 09/15/2025..................... 89,919 105,903
7.00% due 03/20/2029..................... 8,232 10,079
7.00% due 06/20/2029..................... 1,197 1,435
7.00% due 11/20/2030..................... 20,594 24,730
7.50% due 04/15/2017..................... 1,845 1,851
7.50% due 08/15/2023..................... 42,061 44,162
7.50% due 09/15/2023..................... 202,299 215,678
9.00% due 12/15/2016..................... 18,799 19,448
11.00% due 08/20/2015.................... 27 28
11.00% due 09/20/2015.................... 84 90
11.50% due 05/20/2015.................... 455 458
12.50% due 09/15/2014.................... 611 614
-----------
43,087,082
-----------
SMALL BUSINESS ADMINISTRATION -- 0.2%
6.30% due 06/01/2018..................... 288,129 313,536
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $40,762,441)....................... 43,928,379
-----------
U.S. GOVERNMENT TREASURIES -- 52.8%
UNITED STATES TREASURY BONDS -- 15.6%
3.88% due 08/15/2040..................... 1,000,000 1,156,719
4.25% due 11/15/2040..................... 8,000,000 9,836,248
4.75% due 02/15/2041..................... 8,000,000 10,625,000
-----------
21,617,967
-----------
UNITED STATES TREASURY NOTES -- 37.2%
1.25% due 10/31/2015..................... 2,000,000 2,047,656
1.50% due 07/31/2016..................... 16,000,000 16,564,992
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
UNITED STATES TREASURY NOTES (CONTINUED)
1.63% due 08/15/2022.................. $ 2,000,000 $ 1,974,218
1.63% due 11/15/2022.................. 15,000,000 14,733,990
2.00% due 02/15/2022.................. 5,000,000 5,140,235
2.00% due 02/15/2023.................. 10,000,000 10,126,560
3.13% due 05/15/2019.................. 1,000,000 1,126,562
------------
51,714,213
------------
TOTAL U.S. GOVERNMENT TREASURIES
(cost $67,531,141).................... 73,332,180
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $108,293,582)................... 117,260,559
------------
SHORT-TERM INVESTMENT SECURITIES -- 2.9%
U.S. GOVERNMENT TREASURIES -- 2.9%
United States Treasury Bills
0.05% due 04/18/2013
(cost $3,999,905)..................... 4,000,000 3,999,905
------------
REPURCHASE AGREEMENT -- 12.7%
State Street Bank and Trust Co.
Joint Repurchase Agreement(1)
(cost $17,578,000).................... 17,578,000 17,578,000
------------
TOTAL INVESTMENTS --
(cost $129,871,487)(2)................ 100.1% 138,838,464
Liabilities in excess of other assets.... (0.1) (104,744)
----------- ------------
NET ASSETS -- 100.0% $138,733,720
=========== ============
--------
(1)See Note 2 for details of Joint Repurchase Agreements.
(2)See Note 5 for cost of investments on a tax basis.
17
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2013 (see Note 2):
LEVEL 1 -- UNADJUSTED LEVEL 2 --OTHER LEVEL 3 -- SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
--------------------- ----------------- ---------------------- ------------
ASSETS:
Long-Term Investment Securities:
U.S. Government Agencies:
Federal Farm Credit Bank......... $-- $ 520,752 $-- $ 520,752
Federal National Mtg. Assoc...... -- 7,009 -- 7,009
Government National Mtg. Assoc... -- 43,087,082 -- 43,087,082
Small Business Administration.... -- 313,536 313,536
U.S. Government Treasuries:
United States Treasury Bonds..... -- 21,617,967 -- 21,617,967
United States Treasury Notes..... -- 51,714,213 -- 51,714,213
Short-Term Investment Securities:
U.S. Government Treasuries....... -- 3,999,905 -- 3,999,905
Repurchase Agreement................ -- 17,578,000 -- 17,578,000
--- ------------ --- ------------
Total............................... $-- $138,838,464 $-- $138,838,464
=== ============ === ============
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
SUNAMERICA GNMA FUND
PORTFOLIO PROFILE -- MARCH 31, 2013 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Government National Mtg. Assoc.. 100.2%
Repurchase Agreements........... 20.2
U.S. Government Treasuries...... 9.3
Small Business Administration... 0.0
-----
129.7%
=====
CREDIT QUALITY ALLOCATION+#
Aaa........ 100.0%
Not Rated@. 0.0
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Moody'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.
18
SUNAMERICA GNMA FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 100.2%
GOVERNMENT NATIONAL MTG. ASSOC. -- 100.2%
3.00% due April TBA.................... $23,000,000 $24,042,187
3.50% due 11/15/2041................... 1,304,464 1,404,582
3.50% due 01/15/2042................... 497,333 535,503
3.50% due 02/15/2042................... 554,807 597,389
3.50% due 03/15/2042................... 1,297,458 1,397,789
3.50% due 06/15/2042................... 6,362,213 6,850,513
3.50% due 07/15/2042................... 2,723,548 2,932,581
3.50% due April TBA.................... 39,000,000 41,949,375
4.00% due 03/15/2039................... 607,618 662,992
4.00% due 04/15/2039................... 612,129 667,885
4.00% due 05/15/2039................... 38,697 42,223
4.00% due 06/15/2039................... 1,715,048 1,871,343
4.00% due 08/15/2039................... 147,179 160,592
4.00% due 11/15/2039................... 21,298 23,239
4.00% due 12/15/2039................... 781,877 853,097
4.00% due 08/15/2040................... 743,050 814,714
4.00% due 09/15/2040................... 1,215,730 1,332,981
4.00% due 11/15/2040................... 853,721 936,059
4.00% due 12/15/2040................... 2,305,946 2,534,021
4.00% due 01/15/2041................... 26,303 28,691
4.00% due 02/15/2041................... 1,086,313 1,184,972
4.00% due 03/15/2041................... 691,222 753,999
4.00% due 04/15/2041................... 171,466 187,039
4.00% due 06/15/2041................... 63,998 69,810
4.00% due 07/15/2041................... 1,655,523 1,805,878
4.00% due 08/15/2041................... 2,198,342 2,397,997
4.00% due 09/15/2041................... 4,949,806 5,399,349
4.00% due 10/15/2041................... 2,687,937 2,932,058
4.00% due 11/15/2041................... 6,266,864 6,836,021
4.00% due 12/15/2041................... 2,642,748 2,882,668
4.00% due 01/15/2042................... 4,694,305 5,134,340
4.00% due 02/15/2042................... 3,137,144 3,429,057
4.00% due 03/15/2042................... 917,437 1,001,333
4.00% due 04/15/2042................... 141,713 154,672
4.00% due 05/15/2042................... 149,650 163,335
4.00% due 06/15/2042................... 1,340,176 1,462,729
4.50% due 05/15/2018................... 376,790 412,920
4.50% due 08/15/2018................... 194,589 213,248
4.50% due 09/15/2018................... 627,006 687,523
4.50% due 10/15/2018................... 869,846 953,473
4.50% due 08/15/2033................... 58,724 64,561
4.50% due 09/15/2033................... 158,395 174,140
4.50% due 10/15/2038................... 134,900 147,509
4.50% due 12/15/2038................... 194,127 212,272
4.50% due 02/15/2039................... 58,060 63,497
4.50% due 03/15/2039................... 410,941 449,351
4.50% due 04/15/2039................... 120,479 131,741
4.50% due 05/15/2039................... 1,444,662 1,579,691
4.50% due 06/15/2039................... 5,313,312 5,809,941
4.50% due 07/15/2039................... 2,203,298 2,409,238
4.50% due 08/15/2039................... 143,431 157,214
4.50% due 09/15/2039................... 204,145 223,227
4.50% due 10/15/2039................... 107,474 117,520
4.50% due 11/15/2039................... 852,351 932,018
4.50% due 12/15/2039................... 764,314 836,584
4.50% due 01/15/2040................... 102,270 112,250
4.50% due 02/15/2040................... 3,325,071 3,651,313
4.50% due 03/15/2040................... 1,199,505 1,317,148
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
4.50% due 04/15/2040..................... $2,380,810 $2,612,038
4.50% due 05/15/2040..................... 389,171 427,941
4.50% due 06/15/2040..................... 797,371 875,085
4.50% due 07/15/2040..................... 460,454 505,220
4.50% due 08/15/2040..................... 49,620 54,443
4.50% due 09/15/2040..................... 517,065 567,863
4.50% due 10/15/2040..................... 50,297 55,061
4.50% due 11/15/2040..................... 568,010 623,231
4.50% due 01/15/2041..................... 608,508 665,385
4.50% due 02/15/2041..................... 737,124 806,022
4.50% due 03/15/2041..................... 2,987,012 3,281,025
4.50% due 04/15/2041..................... 4,000,733 4,374,677
4.50% due 05/15/2041..................... 1,159,704 1,268,101
4.50% due 06/15/2041..................... 614,487 672,290
4.50% due 07/15/2041..................... 536,530 586,679
4.50% due 08/15/2041..................... 425,328 465,083
5.00% due 03/15/2018..................... 109,472 117,732
5.00% due 04/15/2018..................... 1,350,448 1,450,835
5.00% due 05/15/2018..................... 2,658,296 2,880,111
5.00% due 01/15/2033..................... 5,242 5,754
5.00% due 05/15/2033..................... 4,230 4,644
5.00% due 08/15/2033..................... 883,107 969,374
5.00% due 09/15/2033..................... 918,750 1,018,043
5.00% due 10/15/2033..................... 2,203,332 2,420,268
5.00% due 04/15/2034..................... 13,921 15,281
5.00% due 05/15/2034..................... 53,927 59,094
5.00% due 11/15/2034..................... 236,931 259,632
5.00% due 12/15/2034..................... 213,525 233,983
5.00% due 09/15/2035..................... 4,965 5,420
5.00% due 10/15/2035..................... 36,569 39,959
5.00% due 11/15/2035..................... 38,589 42,166
5.00% due 12/15/2035..................... 16,293 17,803
5.00% due 02/15/2036..................... 81,800 89,379
5.00% due 04/15/2036..................... 161,414 175,999
5.00% due 06/15/2036..................... 344,735 376,029
5.00% due 07/15/2036..................... 267,294 291,401
5.00% due 08/15/2036..................... 8,276 9,217
5.00% due 09/15/2036..................... 266,798 291,596
5.00% due 10/15/2036..................... 17,031 18,738
5.00% due 11/15/2036..................... 146,390 159,592
5.00% due 12/15/2036..................... 387,010 421,913
5.00% due 01/15/2037..................... 141,956 154,404
5.00% due 02/15/2037..................... 465,629 506,459
5.00% due 04/15/2037..................... 1,910,470 2,082,368
5.00% due 12/15/2037..................... 5,542 6,027
5.00% due 04/15/2038..................... 2,155,789 2,344,825
5.00% due 05/15/2038..................... 1,403,926 1,527,032
5.00% due 06/15/2038..................... 72,154 78,481
5.00% due 08/15/2038..................... 178,292 193,925
5.00% due 10/15/2038..................... 293,481 319,215
5.00% due 01/15/2039..................... 530,656 579,178
5.00% due 02/15/2039..................... 608,555 664,200
5.00% due 03/15/2039..................... 1,236,203 1,349,238
5.00% due 04/15/2039..................... 675,260 737,004
5.00% due 08/15/2039..................... 1,123,863 1,226,627
5.00% due 09/15/2039..................... 46,943 51,235
5.00% due 10/15/2039..................... 3,127,728 3,413,719
5.00% due 11/15/2039..................... 2,202,100 2,403,455
19
SUNAMERICA GNMA FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
5.00% due 12/15/2039..................... $1,902,786 $2,075,289
5.00% due 04/15/2040..................... 1,966,426 2,156,678
5.00% due 05/15/2040..................... 4,479,972 4,885,811
5.00% due 06/15/2040..................... 218,360 238,520
5.50% due 06/15/2029..................... 1,703 1,865
5.50% due 01/15/2032..................... 15,025 16,570
5.50% due 03/15/2033..................... 209,528 230,806
5.50% due 04/15/2033..................... 443,147 488,466
5.50% due 05/15/2033..................... 438,684 483,484
5.50% due 06/15/2033..................... 158,050 174,245
5.50% due 07/15/2033..................... 2,231 2,459
5.50% due 08/15/2033..................... 4,177 4,589
5.50% due 12/15/2033..................... 24,811 27,696
5.50% due 01/15/2034..................... 117,325 130,521
5.50% due 02/15/2034..................... 132,076 145,515
5.50% due 04/15/2034..................... 84,524 93,177
5.50% due 06/15/2035..................... 103,699 114,040
5.50% due 09/15/2035..................... 967,884 1,089,536
5.50% due 10/15/2035..................... 899,783 989,830
5.50% due 11/15/2035..................... 13,763 15,137
5.50% due 12/15/2035..................... 23,285 25,745
5.50% due 02/15/2036..................... 169,884 186,064
5.50% due 03/15/2036..................... 60,181 66,056
5.50% due 05/15/2036..................... 54,992 60,201
5.50% due 09/15/2036..................... 127,964 140,084
5.50% due 03/15/2037..................... 74,016 81,027
5.50% due 05/15/2037..................... 46,970 51,419
5.50% due 12/15/2037..................... 215,546 235,962
5.50% due 01/15/2038..................... 104,690 114,606
5.50% due 02/15/2038..................... 752,034 823,265
5.50% due 04/15/2038..................... 380,523 416,565
5.50% due 05/15/2038..................... 834,318 932,627
5.50% due 06/15/2038..................... 425,782 466,112
5.50% due 07/15/2038..................... 346,812 380,345
5.50% due 08/15/2038..................... 352,007 386,156
5.50% due 10/15/2038..................... 183,973 201,493
5.50% due 11/15/2038..................... 77,330 84,655
5.50% due 12/15/2038..................... 309,522 338,839
5.50% due 01/15/2039..................... 151,619 165,996
5.50% due 02/15/2039..................... 274,233 300,545
5.50% due 03/15/2039..................... 165,667 181,829
5.50% due 05/15/2039..................... 51,722 56,622
5.50% due 08/15/2039..................... 238,892 261,519
5.50% due 09/15/2039..................... 352,532 385,924
5.50% due 10/15/2039..................... 105,825 115,849
5.50% due 11/15/2039..................... 3,537 3,872
5.50% due 01/15/2040..................... 59,209 64,817
5.50% due 03/15/2040..................... 661,931 724,627
5.50% due 04/15/2040..................... 218,912 244,167
5.50% due 05/15/2040..................... 108,360 118,624
5.50% due 08/15/2040..................... 441,080 482,859
5.50% due 09/15/2040..................... 191,337 209,460
5.50% due 11/15/2040..................... 183,202 200,596
5.50% due 02/15/2041..................... 130,270 142,598
5.50% due 03/15/2041..................... 53,944 59,054
5.50% due 04/15/2041..................... 127,211 139,261
5.50% due 05/15/2041..................... 29,537 32,335
5.50% due 06/15/2041..................... 212,428 232,549
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
5.50% due 09/15/2041..................... $ 8,245 $ 9,026
6.00% due 11/15/2023..................... 1,363 1,529
6.00% due 01/15/2024..................... 2,946 3,313
6.00% due 07/15/2028..................... 1,818 2,077
6.00% due 12/15/2028..................... 26,575 30,370
6.00% due 01/15/2029..................... 181,955 206,836
6.00% due 02/15/2029..................... 112,574 127,440
6.00% due 03/15/2029..................... 127,316 145,192
6.00% due 04/15/2029..................... 141,130 160,171
6.00% due 05/15/2029..................... 29,269 33,393
6.00% due 06/15/2029..................... 67,120 76,370
6.00% due 07/15/2029..................... 14,379 16,296
6.00% due 08/15/2029..................... 7,085 8,084
6.00% due 04/15/2031..................... 6,428 7,283
6.00% due 07/15/2031..................... 13,419 15,284
6.00% due 10/15/2031..................... 34,286 38,921
6.00% due 11/15/2031..................... 138,871 158,199
6.00% due 12/15/2031..................... 44,020 50,038
6.00% due 01/15/2032..................... 34,683 39,455
6.00% due 02/15/2032..................... 11,685 13,310
6.00% due 07/15/2032..................... 37,769 42,949
6.00% due 09/15/2032..................... 16,236 18,494
6.00% due 10/15/2032..................... 72,396 82,326
6.00% due 11/15/2032..................... 781 888
6.00% due 12/15/2032..................... 25,339 28,814
6.00% due 01/15/2033..................... 53,005 60,227
6.00% due 02/15/2033..................... 82,113 93,210
6.00% due 03/15/2033..................... 48,983 55,648
6.00% due 04/15/2033..................... 150,770 171,219
6.00% due 05/15/2033..................... 51,712 58,823
6.00% due 06/15/2033..................... 9,390 10,655
6.00% due 08/15/2033..................... 61,306 69,637
6.00% due 10/15/2033..................... 13,782 15,638
6.00% due 11/15/2033..................... 17,711 20,132
6.00% due 12/15/2033..................... 156,525 178,244
6.00% due 01/15/2034..................... 89,614 101,443
6.00% due 02/15/2034..................... 96,762 110,085
6.00% due 03/15/2034..................... 23,520 26,592
6.00% due 04/15/2034..................... 128,733 145,699
6.00% due 05/15/2034..................... 8,458 9,578
6.00% due 06/15/2034..................... 65,666 74,233
6.00% due 07/15/2034..................... 71,615 81,287
6.00% due 09/15/2034..................... 43,774 49,521
6.00% due 10/15/2034..................... 39,731 44,920
6.00% due 12/15/2034..................... 42,247 48,042
6.00% due 01/15/2035..................... 14,929 16,939
6.00% due 04/15/2035..................... 29,111 32,821
6.00% due 05/15/2035..................... 6,152 6,976
6.00% due 06/15/2035..................... 45,257 51,026
6.00% due 11/15/2035..................... 2,666 3,009
6.00% due 12/15/2035..................... 57,482 65,101
6.00% due 01/15/2036..................... 46,191 52,053
6.00% due 02/15/2036..................... 52,380 59,243
6.00% due 03/15/2036..................... 29,613 33,600
6.00% due 04/15/2036..................... 81,660 92,160
6.00% due 05/15/2036..................... 149,283 169,214
6.00% due 06/15/2036..................... 65,812 74,097
6.00% due 08/15/2036..................... 5,428 6,111
20
SUNAMERICA GNMA FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
6.00% due 09/15/2036.. $ 42,105 $ 47,465
6.00% due 10/15/2036.. 53,114 59,832
6.00% due 11/15/2036.. 45,237 50,933
6.00% due 07/15/2037.. 9,348 10,572
6.00% due 09/15/2037.. 9,352 10,530
6.00% due 11/15/2037.. 12,704 14,304
6.00% due 12/15/2037.. 12,703 14,302
6.00% due 01/15/2038.. 1,818 2,047
6.00% due 02/15/2038.. 12,431 13,996
6.00% due 05/15/2038.. 29,495 33,209
6.00% due 06/15/2038.. 18,756 21,118
6.00% due 07/15/2038.. 53,261 59,966
6.00% due 08/15/2038.. 7,302 8,221
6.00% due 10/15/2038.. 98,536 110,943
6.00% due 11/15/2038.. 66,491 74,772
6.00% due 12/15/2038.. 78,901 88,835
6.00% due 01/15/2039.. 120,934 136,158
6.00% due 02/15/2039.. 32,235 36,294
6.00% due 08/15/2039.. 37,637 42,384
6.00% due 09/15/2039.. 21,030 23,678
6.00% due 10/15/2039.. 27,278 30,712
6.00% due 02/15/2040.. 5,271 5,934
6.00% due 04/15/2040.. 17,628 19,848
6.00% due 05/15/2040.. 2,539 2,859
6.50% due 03/15/2028.. 8,295 9,572
6.50% due 08/15/2028.. 12,339 13,823
6.50% due 01/15/2029.. 1,251 1,471
6.50% due 02/15/2029.. 572 668
6.50% due 03/15/2029.. 52,548 60,967
6.50% due 04/15/2029.. 528 617
6.50% due 05/15/2029.. 4,397 5,067
6.50% due 06/15/2029.. 14,717 17,144
6.50% due 07/15/2029.. 1,089 1,224
6.50% due 10/15/2029.. 2,703 3,179
6.50% due 08/15/2031.. 66,103 78,151
6.50% due 09/15/2031.. 9,684 11,451
6.50% due 10/15/2031.. 102,530 121,229
6.50% due 11/15/2031.. 45,737 53,272
6.50% due 12/15/2031.. 57,433 65,336
6.50% due 02/15/2032.. 116,912 131,473
6.50% due 05/15/2032.. 327,787 379,842
6.50% due 06/15/2032.. 35,036 41,516
7.00% due 03/15/2023.. 9,207 10,715
7.00% due 01/20/2024.. 242 283
7.00% due 03/20/2024.. 228 267
7.00% due 07/20/2025.. 755 889
7.00% due 09/15/2025.. 39,050 45,991
7.00% due 01/20/2029.. 17,203 21,025
7.00% due 02/20/2029.. 2,884 3,452
7.00% due 06/20/2029.. 5,946 7,118
7.00% due 07/20/2029.. 20,313 24,881
7.00% due 09/20/2029.. 2,090 2,502
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
7.00% due 10/20/2029............... $ 4,006 $ 4,796
7.00% due 11/20/2029............... 1,312 1,570
7.00% due 03/20/2030............... 2,501 3,003
7.00% due 06/20/2030............... 2,440 2,931
7.00% due 08/20/2030............... 5,551 6,666
7.00% due 09/20/2030............... 8,444 10,140
7.00% due 10/20/2030............... 9,420 11,311
8.00% due 11/15/2026............... 44,294 51,379
8.00% due 12/15/2029............... 6,412 7,365
8.00% due 04/15/2030............... 12,669 14,842
8.00% due 05/15/2030............... 1,198 1,335
8.00% due 08/15/2030............... 21,382 25,000
8.50% due 03/15/2017............... 6,482 6,687
8.50% due 12/15/2022............... 13,447 13,502
8.50% due 01/15/2023............... 17,668 18,101
8.50% due 09/15/2024............... 9,275 10,824
9.00% due 07/15/2016............... 4,621 4,641
9.00% due 10/15/2016............... 2,095 2,104
------------
221,050,924
------------
SMALL BUSINESS ADMINISTRATION -- 0.0%
6.30% due 06/01/2018............... 96,043 104,512
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $216,090,621)................ 221,155,436
------------
SHORT-TERM INVESTMENT SECURITIES -- 9.3%
U.S. GOVERNMENT TREASURIES -- 9.3%
United States Treasury Bills
0.05% due 04/18/2013
(cost $20,440,517)................. 20,441,000 20,440,517
------------
REPURCHASE AGREEMENTS -- 20.2%
State Street Bank and Trust Co.
Joint Repurchase Agreement(1)..... 28,390,000 28,390,000
UBS Securities LLC
Joint Repurchase Agreement(1)..... 16,208,000 16,208,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $44,598,000)................. 44,598,000
------------
TOTAL INVESTMENTS --
(cost $281,129,138)(2)............. 129.7% 286,193,953
Liabilities in excess of other assets. (29.7) (65,561,684)
----------- ------------
NET ASSETS -- 100.0% $220,632,269
=========== ============
--------
(1) See Note 2 for details of Joint Repurchase Agreements.
(2) See Note 5 for cost of investments on a tax basis.
TBA --Securities purchased on a forward commitment basis with an approximate
principal amount and no definite maturity date. The actual principal and
maturity date will be determined upon settlement date.
21
SUNAMERICA GNMA FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2013 (see Note 2):
LEVEL 1 -- UNADJUSTED LEVEL 2 -- OTHER LEVEL 3 --SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
- --------------------- ----------------- --------------------- ------------
ASSETS:
Long-Term Investment Securities:
U.S. Government Agencies:
Government National Mtg. Assoc... $-- $221,050,924 $-- $221,050,924
Small Business Administration.... -- 104,512 -- 104,512
Short-Term Investment Securities:
U.S. Government Treasuries........ -- 20,440,517 -- 20,440,517
Repurchase Agreements............... -- 44,598,000 -- 44,598,000
--- ------------ --- ------------
Total............................... $-- $286,193,953 $-- $286,193,953
=== ============ === ============
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
22
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO PROFILE -- MARCH 31, 2013 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Sovereign.............................. 22.1%
Federal National Mtg. Assoc............ 6.7
Oil Companies-Exploration & Production. 4.1
Banks-Commercial....................... 4.0
Federal Home Loan Mtg. Corp............ 3.0
Diversified Financial Services......... 2.7
Diversified Banking Institutions....... 2.4
Pipelines.............................. 1.9
Telephone-Integrated................... 1.7
Casino Hotels.......................... 1.5
Medical-Hospitals...................... 1.3
Cable/Satellite TV..................... 1.2
Paper & Related Products............... 1.1
Oil Companies-Integrated............... 1.0
Electric-Integrated.................... 1.0
Real Estate Investment Trusts.......... 1.0
Finance-Leasing Companies.............. 1.0
Coal................................... 1.0
Cellular Telecom....................... 0.9
Containers-Metal/Glass................. 0.9
Building Products-Cement............... 0.9
Retail-Restaurants..................... 0.8
Real Estate Operations & Development... 0.7
Building-Residential/Commercial........ 0.7
Auto-Cars/Light Trucks................. 0.7
United States Treasury Notes........... 0.7
Telecom Services....................... 0.7
Oil-Field Services..................... 0.7
Medical-Drugs.......................... 0.7
Independent Power Producers............ 0.7
Diversified Manufacturing Operations... 0.6
Chemicals-Specialty.................... 0.6
Chemicals-Diversified.................. 0.6
Banks-Special Purpose.................. 0.6
Time Deposits.......................... 0.6
Sovereign Agency....................... 0.6
Commercial Services.................... 0.6
Savings & Loans/Thrifts................ 0.5
Containers-Paper/Plastic............... 0.5
Medical Instruments.................... 0.5
Consumer Products-Misc................. 0.5
Rental Auto/Equipment.................. 0.5
Banks-Super Regional................... 0.5
Repurchase Agreements.................. 0.5
Electric-Generation.................... 0.5
Steel-Producers........................ 0.5
Medical Products....................... 0.5
Building & Construction Products-Misc.. 0.4
Electronic Components-Semiconductors... 0.4
Diversified Minerals................... 0.4
Municipal Bonds........................ 0.4
Therapeutics........................... 0.4
Cruise Lines........................... 0.4
Government National Mtg. Assoc......... 0.4
Finance-Auto Loans..................... 0.4
Casino Services........................ 0.4
Airlines............................... 0.4
Transport-Services..................... 0.4
Home Furnishings....................... 0.4
Insurance-Multi-line................... 0.4
Oil & Gas Drilling..................... 0.4
Printing-Commercial.......................... 0.3%
Theaters..................................... 0.3
Retail-Apparel/Shoe.......................... 0.3
Steel Pipe & Tube............................ 0.3
Travel Services.............................. 0.3
Television................................... 0.3
Satellite Telecom............................ 0.3
Special Purpose Entities..................... 0.3
Music........................................ 0.3
Alternative Waste Technology................. 0.3
Multimedia................................... 0.3
Insurance-Life/Health........................ 0.3
Web Hosting/Design........................... 0.3
Non-Hazardous Waste Disposal................. 0.3
MRI/Medical Diagnostic Imaging............... 0.3
Beverages-Non-alcoholic...................... 0.3
Transport-Rail............................... 0.3
Commercial Services-Finance.................. 0.3
Marine Services.............................. 0.3
Data Processing/Management................... 0.3
Retail-Toy Stores............................ 0.3
Medical-Generic Drugs........................ 0.3
Retail-Drug Store............................ 0.3
Oil Refining & Marketing..................... 0.2
Metal-Iron................................... 0.2
Real Estate Management/Services.............. 0.2
Food-Misc./Diversified....................... 0.2
Advertising Services......................... 0.2
Aerospace/Defense-Equipment.................. 0.2
Transport-Equipment & Leasing................ 0.2
Enterprise Software/Service.................. 0.2
Communications Software...................... 0.2
Medical-HMO.................................. 0.2
Publishing-Newspapers........................ 0.2
Storage/Warehousing.......................... 0.2
Broadcast Services/Program................... 0.2
Chemicals-Plastics........................... 0.2
Financial Guarantee Insurance................ 0.2
Regional Authority........................... 0.2
Semiconductor Equipment...................... 0.2
Retail-Office Supplies....................... 0.2
Finance-Investment Banker/Broker............. 0.2
E-Commerce/Products.......................... 0.2
Firearms & Ammunition........................ 0.2
Finance-Commercial........................... 0.2
Retail-Pet Food & Supplies................... 0.2
Shipbuilding................................. 0.2
Pharmacy Services............................ 0.2
Hazardous Waste Disposal..................... 0.2
Banks-Money Center........................... 0.2
Trucking/Leasing............................. 0.2
Insurance-Mutual............................. 0.2
Consulting Services.......................... 0.2
Coatings/Paint............................... 0.2
Computers-Memory Devices..................... 0.2
Precious Metals.............................. 0.1
Radio........................................ 0.1
Chemicals-Other.............................. 0.1
Semiconductor Components-Integrated Circuits. 0.1
Computer Services............................ 0.1
Petrochemicals............................... 0.1
23
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO PROFILE -- MARCH 31, 2013 -- (UNAUDITED) (CONTINUED)
INDUSTRY ALLOCATION* (CONTINUED)
Direct Marketing...................... 0.1%
Wire & Cable Products................. 0.1
Retail-Propane Distribution........... 0.1
Auction Houses/Art Dealers............ 0.1
Building & Construction-Misc.......... 0.1
Sugar................................. 0.1
United States Treasury Bonds.......... 0.1
Insurance-Property/Casualty........... 0.1
Food-Meat Products.................... 0.1
Security Services..................... 0.1
Metal-Copper.......................... 0.1
Schools............................... 0.1
Food-Dairy Products................... 0.1
Auto/Truck Parts & Equipment-Original. 0.1
Diversified Operations................ 0.1
Pastoral & Agricultural............... 0.1
Banks-Fiduciary....................... 0.1
Investment Companies.................. 0.1
Retail-Misc./Diversified.............. 0.1
Computers............................. 0.1
Retail-Major Department Stores........ 0.1
Appliances............................ 0.1
Motion Pictures & Services............ 0.1
Disposable Medical Products........... 0.1
Steel-Specialty....................... 0.1
Electric-Transmission................. 0.1
Finance-Consumer Loans................ 0.1
Industrial Gases...................... 0.1
Advertising Agencies.................. 0.1
Gold Mining........................... 0.1
----
99.5%
====
CREDIT QUALITY ALLOCATION+#
Aaa................. 15.4%
Aa.................. 2.1
A................... 5.9
Baa................. 20.7
Ba.................. 15.6
B................... 24.3
Caa................. 7.6
Ca.................. 0.1
Not Rated@.......... 8.3
-----
100.0%
=====
--------
*Calculated as a percentage of net assets
+Source: Moody'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.
24
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------------
ASSET BACKED SECURITIES -- 2.2%
DIVERSIFIED FINANCIAL SERVICES -- 2.2%
Ally Auto Receivables Trust
Series 2012-5, Class A4
0.85% due 01/16/2018.......................... $ 350,000 $ 350,218
AmeriCredit Automobile Receivables Trust
Series 2012-4, Class B
1.31% due 11/08/2017.......................... 300,000 301,715
AmeriCredit Automobile Receivables Trust
Series 2012-3, Class B
1.59% due 07/10/2017.......................... 263,000 266,398
Banc of America Alternative Loan Trust
Series 2004-10, Class 1CB1
6.00% due 11/25/2034(1)....................... 190,711 191,658
Banc of America Funding Trust FRS
Series 2006-A, Class 1A1
2.69% due 02/20/2036(1)....................... 695,953 675,337
Banc of America Funding Trust
Series 2005-8, Class 1A1
5.50% due 01/25/2036(1)....................... 914,441 911,055
Banc of America Funding Trust
Series 2005-8, Class 2A4
6.00% due 01/25/2036(1)....................... 2,004 1,995
Banc of America Funding Trust
Series 2006-2, Class 2A22
6.00% due 03/25/2036(1)....................... 268,995 265,928
Carrington Mtg. Loan Trust FRS
Series 2007-RFC1, Class A1
0.25% due 12/25/2036.......................... 569,608 546,650
Chase Issuance Trust
Series 2012-A4, Class A4
1.58% due 08/16/2021.......................... 225,000 224,199
Citibank Omni Master Trust
Series 2009-A17, Class A17
4.90% due 11/15/2018*......................... 1,000,000 1,069,229
Citicorp Mtg. Securities Trust
Series 2006-2, Class 1A8
5.75% due 04/25/2036(1)....................... 31,437 31,450
Citicorp Mtg. Securities Trust
Series 2006-4, Class 1A2
6.00% due 08/25/2036(1)....................... 191,176 196,276
CLI Funding V LLC
Series 2013-1A Class NOTE
2.83% due 03/18/2028*......................... 239,000 239,166
Commercial Mtg. Pass Through Certs.
Series 2013-CR6, Class A4
3.10% due 03/10/2046(2)....................... 400,000 409,332
Countrywide Alternative Loan Trust
Series 2004-24CB, Class 1A1
6.00% due 11/25/2034(1)....................... 520,196 522,460
Countrywide Asset-Backed Certs. FRS
Series 2004-6, Class 1A2
0.57% due 12/25/2034.......................... 314,319 306,005
Countrywide Asset-Backed Certs. FRS
Series 2004-BC2, Class M2
1.78% due 02/25/2034.......................... 74,015 72,944
Countrywide Home Loan Mtg. Pass Through Trust
Series 2005-6, Class 1A11
5.25% due 02/25/2026(1)....................... 300,000 302,766
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
Countrywide Home Loan Mtg.
Pass Through Trust
Series 2005-12, Class 2A4
5.50% due 05/25/2035(1)............................ $ 170,431 $ 171,337
Discover Card Master Trust
Series 2007-A1, Class A1
5.65% due 03/16/2020............................... 330,000 395,016
Entergy Arkansas Restoration Funding LLC
Series 2010A, Class A-1
2.30% due 08/01/2021............................... 204,623 214,073
Enterprise Fleet Financing LLC
Series 2012-2, Class A3
0.93% due 04/20/2018*.............................. 450,000 450,381
Fairway Outdoor Funding LLC
Series 2012-1A, Class A2
4.21% due 10/15/2042*.............................. 247,590 260,317
First Horizon Mtg. Pass-Through Trust
Series 2006-2, Class 1A3
6.00% due 08/25/2036(1)............................ 497,639 502,895
GS Mtg. Securities Corp. II
Series 2012-GCJ9, Class A2
1.76% due 11/10/2045(2)............................ 468,000 477,508
HLSS Servicer Advance Receivables Backed Notes
Series 2013-T1, Class B2
1.74% due 01/16/2046*.............................. 178,000 178,668
Morgan Stanley Bank of America Merrill Lynch Trust
Series 2012-C6, Class A2
1.87% due 11/15/2045(2)............................ 1,250,000 1,278,135
Morgan Stanley Bank of America Merrill Lynch Trust
Series 2012-C5, Class A2
1.97% due 08/15/2045(2)............................ 245,843 252,671
MortgageIT Trust FRS
Series 2004-2, Class A1
0.57% due 12/25/2034(1)............................ 272,000 263,776
MortgageIT Trust FRS
Series 2004-1, Class A2
1.10% due 11/25/2034(1)............................ 120,501 105,655
New Century Home Equity Loan Trust VRS
Series 2004-A, Class AII9
4.95% due 08/25/2034............................... 158,351 163,559
RFMSI Trust
Series 2006-S1, Class 1A3
5.75% due 01/25/2036(1)............................ 370,663 382,861
Structured Asset Securities Corp.
Series 2004-5H, Class A4
5.54% due 12/25/2033(1)............................ 374,684 387,322
TAL Advantage V, LLC
Series 2013-1A, Class A
2.83% due 02/22/2038*.............................. 260,808 261,642
UBS-Barclays Commercial Mtg. Trust
Series 2012-C2, Class A2
2.11% due 05/10/2063(2)............................ 653,239 675,671
UBS-Barclays Commercial Mtg. Trust
Series 2012-C4, Class A5
2.85% due 12/10/2045(2)............................ 681,000 678,546
25
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------
ASSET BACKED SECURITIES (CONTINUED)
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
Wells Fargo Mtg. Backed Securities Trust
Series 2007-7, Class A36
6.00% due 06/25/2037(1).................. $ 92,026 $ 92,456
Wells Fargo Mtg. Backed Securities Trust
Series 2007-14, Class 1A1
6.00% due 10/25/2037(1).................. 314,397 322,227
Wells Fargo Mtg. Backed Securities Trust
Series 2007-15, Class A1
6.00% due 11/25/2037(1).................. 289,522 289,949
WF-RBS Commercial Mtg. Trust
Series 2012-C8, Class A2
1.88% due 08/15/2045(2).................. 165,030 169,123
-----------
TOTAL ASSET BACKED SECURITIES
(cost $14,763,760) 14,858,569
-----------
U.S. CORPORATE BONDS & NOTES -- 47.3%
ADVERTISING AGENCIES -- 0.1%
Interpublic Group of Cos., Inc.
Senior Notes
6.25% due 11/15/2014..................... 341,000 365,723
-----------
ADVERTISING SERVICES -- 0.2%
Checkout Holding Corp.
Senior Notes
zero coupon due 11/15/2015*.............. 1,220,000 927,200
Visant Corp.
Company Guar. Notes
10.00% due 10/01/2017.................... 725,000 661,562
-----------
1,588,762
-----------
AEROSPACE/DEFENSE-EQUIPMENT -- 0.2%
Exelis, Inc.
Company Guar. Notes
5.55% due 10/01/2021..................... 322,000 342,401
Sequa Corp.
Company Guar. Notes
7.00% due 12/15/2017*.................... 1,205,000 1,220,062
-----------
1,562,463
-----------
AIRLINES -- 0.4%
Atlas Air, Inc.
Pass Through Certs.
Series 1999-1, Class A-1
7.20% due 01/02/2019..................... 918,702 937,076
Atlas Air, Inc.
Pass Through Certs.
Series 1999-1, Class B
7.63% due 01/02/2015..................... 116,476 101,334
Atlas Air, Inc.
Pass Through Certs.
Series 2000-1, Class B
9.06% due 01/02/2014..................... 307,561 298,335
Continental Airlines Pass Through Certs.
Series 2012-3, Class C
6.13% due 04/29/2018..................... 1,076,000 1,081,380
-----------
2,418,125
-----------
ALTERNATIVE WASTE TECHNOLOGY -- 0.3%
ADS Waste Holdings, Inc.
Senior Notes
8.25% due 10/01/2020*.................... 1,963,000 2,115,132
-----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
AUCTION HOUSE/ART DEALERS -- 0.1%
Sotheby's
Company Guar. Notes
5.25% due 10/01/2022*...................... $ 845,000 $ 853,450
----------
AUTO-CARS/LIGHT TRUCKS -- 0.5%
Chrysler Group LLC/CG Co-Issuer, Inc.
Sec. Notes
8.25% due 06/15/2021....................... 2,185,000 2,439,006
Daimler Finance North America LLC
Company Guar. Notes
1.88% due 01/11/2018*...................... 380,000 382,945
Ford Motor Co.
Senior Notes
4.75% due 01/15/2043....................... 477,000 443,946
----------
3,265,897
----------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.1%
Delphi Corp.
Company Guar. Notes
5.00% due 02/15/2023....................... 658,000 695,835
----------
BANKS-COMMERCIAL -- 1.4%
Associated Banc-Corp.
Senior Notes
5.13% due 03/28/2016....................... 784,000 857,322
Capital One NA
Senior Notes
1.50% due 03/22/2018....................... 1,161,000 1,149,704
CIT Group, Inc.
Senior Notes
5.00% due 08/15/2022....................... 550,000 587,283
CIT Group, Inc.
Senior Notes
5.50% due 02/15/2019*...................... 1,870,000 2,052,325
FirstMerit Corp.
Sub. Notes
4.35% due 02/04/2023....................... 311,000 322,354
PNC Bank NA
Sub. Notes
2.95% due 01/30/2023....................... 650,000 646,194
Regions Bank
Sub. Notes
7.50% due 05/15/2018....................... 224,000 274,960
Synovus Financial Corp.
Senior Notes
7.88% due 02/15/2019....................... 970,000 1,100,950
Union Bank NA
Senior Notes
2.13% due 06/16/2017....................... 815,000 838,859
Zions Bancorporation
Senior Notes
4.00% due 06/20/2016....................... 658,000 676,241
Zions Bancorporation
Senior Notes
4.50% due 03/27/2017....................... 783,000 836,344
----------
9,342,536
----------
26
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
BANKS-FIDUCIARY -- 0.1%
Bank of New York Mellon Corp.
Senior Notes
1.20% due 02/20/2015........................ $ 526,000 $ 531,954
----------
BANKS-MONEY CENTER -- 0.1%
Comerica Bank
Sub. Notes
5.20% due 08/22/2017........................ 386,000 445,070
----------
BANKS-SUPER REGIONAL -- 0.5%
Capital One Financial Corp. FRS
Senior Notes
1.45% due 07/15/2014........................ 346,000 349,760
JPMorgan Chase Bank NA
Sub. Notes
6.00% due 07/05/2017........................ 801,000 938,020
JPMorgan Chase Bank NA
Sub. Notes
6.00% due 10/01/2017........................ 786,000 925,868
SunTrust Banks, Inc.
Sub. Notes
6.00% due 02/15/2026........................ 38,000 43,443
Wachovia Corp.
Senior Notes
5.75% due 02/01/2018........................ 436,000 518,950
Wells Fargo & Co. FRS
Jr. Sub. Bonds
7.98% due 03/15/2018(3)..................... 235,000 271,131
Wells Fargo Bank NA FRS
Sub. Notes
0.50% due 05/16/2016........................ 350,000 344,279
----------
3,391,451
----------
BEVERAGES-NON-ALCOHOLIC -- 0.3%
Innovation Ventures LLC/Innovation Ventures
Finance Corp.
Senior Sec. Notes
9.50% due 08/15/2019*....................... 2,240,000 1,887,200
----------
BROADCAST SERVICES/PROGRAM -- 0.2%
Discovery Communications LLC
Company Guar. Notes
3.25% due 04/01/2023........................ 163,000 165,379
Nexstar Broadcasting, Inc.
Company Guar. Notes
6.88% due 11/15/2020*....................... 1,033,000 1,089,815
----------
1,255,194
----------
BUILDING & CONSTRUCTION PRODUCTS-MISC. -- 0.4%
Building Materials Corp. of America
Senior Notes
6.75% due 05/01/2021*....................... 850,000 928,625
Gibraltar Industries, Inc.
Company Guar. Notes
6.25% due 02/01/2021*....................... 730,000 773,800
Interline Brands, Inc.
Company Guar. Notes
7.50% due 11/15/2018........................ 910,000 987,350
----------
2,689,775
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
BUILDING & CONSTRUCTION-MISC. -- 0.1%
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.00% due 02/01/2023*....................... $ 820,000 $ 844,600
----------
BUILDING PRODUCTS-CEMENT -- 0.7%
Cemex Finance LLC
Senior Sec. Notes
9.38% due 10/12/2022*....................... 770,000 895,125
Cemex Finance LLC
Senior Sec. Notes
9.50% due 12/14/2016........................ 1,225,000 1,326,062
Headwaters, Inc.
Sec. Notes
7.63% due 04/01/2019........................ 2,011,000 2,151,770
----------
4,372,957
----------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.7%
Beazer Homes USA, Inc.
Company Guar. Notes
9.13% due 05/15/2019........................ 580,000 624,950
K. Hovnanian Enterprises, Inc.
Senior Sec. Notes
7.25% due 10/15/2020*....................... 650,000 719,875
MDC Holdings, Inc.
Company Guar. Notes
6.00% due 01/15/2043........................ 1,782,000 1,766,938
Meritage Homes Corp.
Company Guar. Notes
7.00% due 04/01/2022........................ 625,000 696,094
Taylor Morrison Communities, Inc./Monarch
Communities, Inc.
Company Guar. Notes
7.75% due 04/15/2020*....................... 912,000 978,120
----------
4,785,977
----------
CABLE/SATELLITE TV -- 1.2%
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
5.13% due 02/15/2023........................ 1,506,000 1,460,820
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
6.50% due 04/30/2021........................ 1,838,000 1,943,685
Comcast Corp.
Company Guar. Notes
4.25% due 01/15/2033........................ 1,334,000 1,342,829
COX Communications, Inc.
Senior Notes
3.25% due 12/15/2022*....................... 309,000 313,909
DIRECTV Holdings LLC/DIRECTV
Financing Co., Inc.
Company Guar. Notes
5.15% due 03/15/2042........................ 448,000 432,953
Echostar DBS Corp.
Company Guar. Notes
7.75% due 05/31/2015........................ 912,000 1,012,320
TCI Communications, Inc.
Senior Notes
7.13% due 02/15/2028........................ 250,000 338,285
Time Warner Cable, Inc.
Company Guar. Notes
4.50% due 09/15/2042........................ 281,000 255,436
27
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
CABLE/SATELLITE TV (CONTINUED)
WideOpenWest Finance LLC/WideOpenWest
Capital Corp.
Company Guar. Notes
10.25% due 07/15/2019*........................... $ 550,000 $ 611,875
----------
7,712,112
----------
CASINO HOTELS -- 1.3%
Caesars Entertainment Operating Co., Inc.
Senior Sec. Notes
8.50% due 02/15/2020............................. 1,997,000 1,972,037
Caesars Entertainment Operating Co., Inc
Company Guar. Notes
10.75% due 02/01/2016............................ 800,000 728,000
CityCenter Holdings LLC/CityCenter Finance Corp.
Sec. Notes
10.75% due 01/15/2017(4)(18)..................... 2,448,849 2,705,978
Downstream Development Authority
of the Quapaw Tribe of Oklahoma
Senior Sec. Notes
10.50% due 07/01/2019*........................... 755,000 838,050
Eldorado Resorts LLC/Eldorado Capital Corp.
Senior Sec. Notes
8.63% due 06/15/2019*............................ 987,000 973,429
Station Casinos LLC
Company Guar. Notes
7.50% due 03/01/2021*............................ 1,129,000 1,160,048
----------
8,377,542
----------
CASINO SERVICES -- 0.4%
Chukchansi Economic Development Authority
Sec. Notes
9.75% due 05/30/2020*(12)........................ 987,091 582,384
Graton Economic Development Authority
Senior Sec. Notes
9.63% due 09/01/2019*............................ 950,000 1,064,000
Greektown Superholdings, Inc.
Sec. Notes, Series A
13.00% due 07/01/2015............................ 293,000 314,242
Greektown Superholdings, Inc.
Sec. Notes, Series B
13.00% due 07/01/2015............................ 450,000 482,625
----------
2,443,251
----------
CELLULAR TELECOM -- 0.7%
Cricket Communications, Inc.
Senior Sec. Notes
7.75% due 05/15/2016............................. 1,620,000 1,690,875
Cricket Communications, Inc.
Company Guar. Notes
7.75% due 10/15/2020............................. 990,000 987,525
MetroPCS Wireless, Inc.
Company Guar. Notes
6.63% due 04/01/2023*............................ 1,208,000 1,232,160
Sprint Nextel Corp.
Senior Notes
7.00% due 08/15/2020............................. 918,000 1,009,800
----------
4,920,360
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------------
CHEMICALS-DIVERSIFIED -- 0.3%
Axiall Corp.
Company Guar. Notes
4.88% due 05/15/2023*............................ $ 639,000 $ 650,182
Eagle Spinco, Inc.
Company Guar. Notes
4.63% due 02/15/2021*............................ 490,000 498,575
Olin Corp.
Senior Notes
5.50% due 08/15/2022............................. 980,000 1,013,075
----------
2,161,832
----------
CHEMICALS-OTHER -- 0.1%
Taminco Global Chemical Corp.
Sec. Notes
9.75% due 03/31/2020*............................ 870,000 967,875
----------
CHEMICALS-PLASTICS -- 0.2%
PolyOne Corp.
Senior Notes
5.25% due 03/15/2023*............................ 1,229,000 1,238,217
----------
CHEMICALS-SPECIALTY -- 0.6%
Huntsman International LLC
Company Guar. Notes
4.88% due 11/15/2020*............................ 1,248,000 1,257,360
Huntsman International LLC
Company Guar. Notes
4.88% due 11/15/2020............................. 682,000 687,115
Lubrizol Corp.
Company Guar. Notes
6.50% due 10/01/2034............................. 248,000 329,075
Tronox Finance LLC
Company Guar. Notes
6.38% due 08/15/2020*............................ 1,931,000 1,873,070
----------
4,146,620
----------
COAL -- 0.9%
Alpha Natural Resources, Inc.
Company Guar. Notes
6.00% due 06/01/2019............................. 1,429,000 1,318,252
Arch Coal, Inc.
Company Guar. Notes
9.88% due 06/15/2019*............................ 965,000 989,125
CONSOL Energy, Inc.
Company Guar. Notes
6.38% due 03/01/2021............................. 1,148,000 1,185,310
Penn Virginia Resource Partners LP/Penn Virginia
Resource Finance Corp. II
Company Guar. Notes
8.38% due 06/01/2020............................. 1,140,000 1,197,000
SunCoke Energy Partners LP/SunCoke Energy
Partners Finance Corp.
Senior Notes
7.38% due 02/01/2020*............................ 993,000 1,045,133
----------
5,734,820
----------
COATINGS/PAINT -- 0.2%
US Coatings Acquisition Inc./Flash Dutch 2 BV
Company Guar. Notes
7.38% due 05/01/2021*............................ 964,000 1,014,610
----------
28
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
COMMERCIAL SERVICES -- 0.2%
Live Nation Entertainment, Inc.
Company Guar. Notes
7.00% due 09/01/2020*................................. $ 950,000 $1,021,250
----------
COMMERCIAL SERVICES-FINANCE -- 0.3%
Harland Clarke Holdings Corp.
Senior Sec. Notes
9.75% due 08/01/2018*................................. 1,345,000 1,425,700
Western Union Co.
Notes
2.88% due 12/10/2017.................................. 428,000 434,383
----------
1,860,083
----------
COMMUNICATIONS SOFTWARE -- 0.1%
Aspect Software, Inc.
Sec. Notes
10.63% due 05/15/2017................................. 615,000 615,000
----------
COMPUTER AIDED DESIGN -- 0.0%
Autodesk, Inc.
Senior Notes
1.95% due 12/15/2017.................................. 328,000 324,860
----------
COMPUTER SERVICES -- 0.1%
Affiliated Computer Services, Inc.
Senior Notes
5.20% due 06/01/2015.................................. 399,000 427,654
International Business Machines Corp.
Senior Notes
6.22% due 08/01/2027.................................. 375,000 501,287
----------
928,941
----------
COMPUTERS -- 0.1%
Hewlett-Packard Co.
Senior Notes
4.65% due 12/09/2021.................................. 491,000 509,118
----------
CONSULTING SERVICES -- 0.2%
FTI Consulting, Inc.
Company Guar. Notes
6.75% due 10/01/2020.................................. 940,000 1,017,550
----------
CONSUMER PRODUCTS-MISC. -- 0.5%
American Achievement Corp.
Sec. Notes
10.88% due 04/15/2016*................................ 1,373,000 1,331,810
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC
Senior Sec. Notes
5.75% due 10/15/2020.................................. 1,100,000 1,120,625
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC
Company Guar. Notes
9.88% due 08/15/2019.................................. 1,000,000 1,096,250
----------
3,548,685
----------
CONTAINERS-METAL/GLASS -- 0.6%
Ball Corp.
Company Guar. Notes
7.38% due 09/01/2019.................................. 684,000 757,530
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------------
CONTAINERS-METAL/GLASS (CONTINUED)
Crown Americas LLC/Crown Americas Capital Corp.
IV Company Guar. Notes
4.50% due 01/15/2023*........................... $ 789,000 $ 765,330
Crown Cork & Seal Co., Inc.
Senior Notes
7.38% due 12/15/2026............................ 2,200,000 2,453,000
----------
3,975,860
----------
CONTAINERS-PAPER/PLASTIC -- 0.5%
Consolidated Container Co. LLC/
Consolidated Container Capital, Inc.
Company Guar. Notes
10.13% due 07/15/2020*.......................... 650,000 711,750
Graphic Packaging International, Inc.
Company Guar. Notes
4.75% due 04/15/2021............................ 281,000 285,215
Packaging Dynamics Corp.
Senior Sec. Notes
8.75% due 02/01/2016*........................... 790,000 826,537
Rock-Tenn Co.
Company Guar. Notes
4.45% due 03/01/2019............................ 45,000 48,550
Sealed Air Corp.
Company Guar. Notes
6.50% due 12/01/2020*........................... 754,000 825,630
Tekni-Plex, Inc.
Senior Sec. Notes
9.75% due 06/01/2019*........................... 847,000 935,935
----------
3,633,617
----------
DATA PROCESSING/MANAGEMENT -- 0.3%
First Data Corp.
Senior Sec. Notes
6.75% due 11/01/2020*........................... 1,741,000 1,814,992
----------
DIRECT MARKETING -- 0.1%
Catalina Marketing Corp. VRS
Company Guar. Notes
11.63% due 10/01/2017*(5)....................... 850,100 901,106
----------
DISPOSABLE MEDICAL PRODUCTS -- 0.1%
CR Bard, Inc.
Senior Notes
1.38% due 01/15/2018............................ 438,000 437,387
----------
DIVERSIFIED BANKING INSTITUTIONS -- 2.3%
Ally Financial, Inc.
Company Guar. Notes
5.50% due 02/15/2017............................ 1,045,000 1,130,421
Ally Financial, Inc.
Sub. Notes
8.00% due 12/31/2018............................ 2,327,000 2,783,674
BAC Capital Trust XIII FRS
Limited Guar. Notes
4.00% due 05/06/2013(3)......................... 1,070,000 936,250
Bank of America Corp.
Senior Notes
2.00% due 01/11/2018............................ 333,000 331,416
29
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
DIVERSIFIED BANKING INSTITUTIONS (CONTINUED)
Bank of America Corp.
Senior Notes
3.30% due 01/11/2023............. $ 670,000 $ 660,660
Bank of America Corp.
Sub. Notes
5.42% due 03/15/2017............. 360,000 398,942
Bank of America Corp.
Senior Notes
5.88% due 01/05/2021............. 430,000 507,808
Bank of America Corp.
Sub. Notes
7.25% due 10/15/2025............. 117,000 143,151
Citigroup, Inc.
Sub. Notes
5.88% due 02/22/2033............. 1,324,000 1,452,954
Citigroup, Inc. FRS
Jr. Sub. Notes
5.90% due 02/15/2023(3).......... 355,000 368,428
Goldman Sachs Group, Inc.
Senior Notes
2.38% due 01/22/2018............. 656,000 664,943
Goldman Sachs Group, Inc.
Senior Notes
6.15% due 04/01/2018............. 828,000 975,688
Goldman Sachs Group, Inc.
Sub. Notes
6.75% due 10/01/2037............. 1,222,000 1,369,360
JPMorgan Chase & Co.
Senior Notes
6.30% due 04/23/2019............. 386,000 471,465
JPMorgan Chase & Co. FRS
Jr. Sub Notes
7.90% due 04/30/2018(3).......... 304,000 349,244
JPMorgan Chase Capital XXIII FRS
Limited Guar. Bonds
1.29% due 05/15/2077............. 140,000 110,250
Morgan Stanley
Sub. Notes
4.88% due 11/01/2022............. 610,000 646,668
Morgan Stanley
Senior Notes
5.75% due 01/25/2021............. 744,000 859,757
Morgan Stanley
Senior Notes
6.25% due 08/09/2026............. 579,000 692,149
Morgan Stanley
Senior Notes
6.38% due 07/24/2042............. 492,000 591,114
-----------
15,444,342
-----------
DIVERSIFIED FINANCIAL SERVICES -- 0.4%
General Electric Capital Corp.
Senior Sec. Notes
2.10% due 12/11/2019............. 301,000 305,996
General Electric Capital Corp.
Senior Notes
5.55% due 05/04/2020............. 456,000 543,868
General Electric Capital Corp.
Senior Notes
5.88% due 01/14/2038............. 467,000 544,515
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
General Electric Capital Corp.
Senior Notes
6.75% due 03/15/2032........... $1,042,000 $1,326,356
----------
2,720,735
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.3%
JB Poindexter & Co., Inc.
Senior Notes
9.00% due 04/01/2022*.......... 1,325,000 1,384,625
Textron, Inc.
Senior Notes
4.63% due 09/21/2016........... 595,000 652,629
----------
2,037,254
----------
E-COMMERCE/PRODUCTS -- 0.2%
Netflix, Inc.
Senior Notes
5.38% due 02/01/2021*.......... 1,215,000 1,205,887
----------
ELECTRIC-DISTRIBUTION -- 0.0%
Oglethorpe Power Corp.
1/st/ Mtg. Notes
4.20% due 12/01/2042........... 161,000 156,206
----------
ELECTRIC-GENERATION -- 0.4%
AES Corp.
Senior Notes
8.00% due 10/15/2017........... 1,020,000 1,199,775
Edison Mission Energy
Senior Notes
7.63% due 05/15/2027+(12)(13).. 1,475,000 789,125
Reliant Energy Mid-Atlantic
Power Holdings LLC
Pass Through Certs., Series B
9.24% due 07/02/2017........... 372,826 411,041
----------
2,399,941
----------
ELECTRIC-INTEGRATED -- 0.8%
CMS Energy Corp.
Senior Notes
2.75% due 05/15/2014........... 157,000 159,602
Dominion Resources, Inc.
Senior Notes
5.25% due 08/01/2033........... 525,000 600,614
Entergy Louisiana LLC
1/st/. Mtg. Notes
3.30% due 12/01/2022........... 237,000 239,363
Entergy Mississippi, Inc.
1/st/ Mtg. Notes
3.10% due 07/01/2023........... 502,000 505,981
Exelon Generation Co. LLC
Senior Notes
5.60% due 06/15/2042........... 536,000 580,724
FirstEnergy Corp.
Senior Notes
2.75% due 03/15/2018........... 441,000 445,994
FirstEnergy Corp.
Senior Notes
4.25% due 03/15/2023........... 785,000 793,933
30
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
ELECTRIC-INTEGRATED (CONTINUED)
Florida Power Corp.
1/st/. Mtg. Notes
3.85% due 11/15/2042....................... $ 284,000 $ 270,474
Georgia Power Co.
Senior Notes
3.00% due 04/15/2016....................... 180,000 191,821
Great Plains Energy, Inc.
Senior Notes
5.29% due 06/15/2022....................... 310,000 351,818
Mirant Mid Atlantic LLC Pass-Through Trust
Pass Through Certs., Series B
9.13% due 06/30/2017....................... 435,358 487,601
PPL Capital Funding, Inc.
Company Guar. Notes
3.50% due 12/01/2022....................... 310,000 312,288
Puget Energy, Inc.
Senior Sec. Notes
6.00% due 09/01/2021....................... 376,000 427,331
----------
5,367,544
----------
ELECTRONIC COMPONENTS-MISC. -- 0.0%
Jabil Circuit, Inc.
Senior Notes
4.70% due 09/15/2022....................... 298,000 296,883
----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.4%
Amkor Technology, Inc.
Senior Notes
6.38% due 10/01/2022....................... 1,697,000 1,692,758
Amkor Technology, Inc.
Senior Notes
6.63% due 06/01/2021....................... 960,000 969,600
Intel Corp.
Senior Notes
4.00% due 12/15/2032....................... 313,000 309,198
----------
2,971,556
----------
ENTERPRISE SOFTWARE/SERVICE -- 0.2%
Epicor Software Corp.
Company Guar. Notes
8.63% due 05/01/2019....................... 1,340,000 1,450,550
----------
FINANCE-AUTO LOANS -- 0.4%
General Motors Financial Co., Inc.
Company Guar. Notes
4.75% due 08/15/2017*...................... 1,654,000 1,725,005
General Motors Financial Co., Inc.
Company Guar. Notes
6.75% due 06/01/2018....................... 675,000 764,437
----------
2,489,442
----------
FINANCE-COMMERCIAL -- 0.2%
Jefferies Finance LLC/JFIN Co-Issuer Corp.
Senior Notes
7.38% due 04/01/2020*...................... 766,000 779,405
Textron Financial Corp.
Senior Notes
5.40% due 04/28/2013....................... 377,000 378,247
----------
1,157,652
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------------
FINANCE-CONSUMER LOANS -- 0.1%
HSBC Finance Corp.
Sub. Notes
6.68% due 01/15/2021............................... $ 322,000 $ 381,034
----------
FINANCE-INVESTMENT BANKER/BROKER -- 0.2%
Jefferies Group LLC
Senior Notes
6.50% due 01/20/2043............................... 327,000 348,580
Lehman Brothers Holdings, Inc.
Escrow Notes
6.75% due 12/28/2017+(10).......................... 280,000 28
Lehman Brothers Holdings, Inc.
Escrow Notes
7.50% due 05/11/2038+(10).......................... 361,000 36
Merrill Lynch & Co., Inc.
Sub. Notes
6.05% due 05/16/2016............................... 400,000 444,712
Merrill Lynch & Co., Inc.
Sub. Notes
6.11% due 01/29/2037............................... 367,000 413,371
----------
1,206,727
----------
FINANCE-LEASING COMPANIES -- 0.4%
Air Lease Corp.
Company Guar. Notes
4.75% due 03/01/2020............................... 1,620,000 1,660,500
Air Lease Corp.
Senior Notes
6.13% due 04/01/2017............................... 678,000 733,935
----------
2,394,435
----------
FINANCE-OTHER SERVICES -- 0.0%
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Bonds
1.00% due 02/02/2015............................... 269,000 271,566
----------
FINANCIAL GUARANTEE INSURANCE -- 0.2%
Assured Guaranty Municipal Holdings, Inc. FRS
Company Guar. Notes
6.40% due 12/15/2066*.............................. 1,360,000 1,230,800
----------
FIREARMS & AMMUNITION -- 0.2%
FGI Operating Co. LLC/FGI Finance, Inc.
Sec. Notes
7.88% due 05/01/2020*.............................. 1,115,000 1,170,750
----------
FOOD-DAIRY PRODUCTS -- 0.1%
Land O' Lakes, Inc.
Senior Notes
6.00% due 11/15/2022*.............................. 665,000 709,888
----------
FOOD-MISC./DIVERSIFIED -- 0.2%
Chiquita Brands International, Inc.
Senior Sec. Notes
7.88% due 02/01/2021*.............................. 1,215,000 1,274,231
ConAgra Foods, Inc.
Senior Notes
6.63% due 08/15/2039*.............................. 262,000 327,104
----------
1,601,335
----------
31
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
GAMBLING (NON-HOTEL) -- 0.0%
Waterford Gaming LLC
Senior Notes
8.63% due 09/15/2014*(9)(10)............ $ 792,609 $ 317,044
----------
GAS-DISTRIBUTION -- 0.0%
Southern Union Co.
Senior Notes
7.60% due 02/01/2024.................... 240,000 306,549
----------
HOME FURNISHINGS -- 0.4%
Norcraft Cos. LP/Norcraft Finance Corp.
Sec. Notes
10.50% due 12/15/2015................... 1,033,000 1,082,067
Sealy Mattress Co.
Company Guar. Notes
8.25% due 06/15/2014.................... 1,239,000 1,243,659
----------
2,325,726
----------
INDEPENDENT POWER PRODUCERS -- 0.6%
Calpine Corp.
Senior Sec. Notes
7.88% due 07/31/2020*................... 774,000 847,530
Calpine Corp.
Senior Sec. Notes
7.88% due 01/15/2023*................... 785,000 871,350
GenOn Energy, Inc.
Senior Notes
9.50% due 10/15/2018.................... 695,000 818,362
NRG Energy, Inc.
Company Guar. Notes
6.63% due 03/15/2023*................... 575,000 609,500
NRG Energy, Inc.
Company Guar. Notes
7.63% due 01/15/2018.................... 190,000 216,125
NRG Energy, Inc.
Company Guar. Notes
8.25% due 09/01/2020.................... 430,000 485,363
----------
3,848,230
----------
INDUSTRIAL GASES -- 0.1%
Airgas, Inc.
Senior Notes
2.38% due 02/15/2020.................... 378,000 377,186
----------
INSURANCE-LIFE/HEALTH -- 0.3%
Pacific LifeCorp
Senior Notes
6.00% due 02/10/2020*................... 295,000 340,371
Principal Life Global Funding II
Sec. Notes
1.00% due 12/11/2015*................... 699,000 700,925
Prudential Financial, Inc.
Senior Notes
4.75% due 09/17/2015.................... 274,000 298,513
Prudential Financial, Inc. FRS
Jr. Sub. Notes
5.63% due 06/15/2043.................... 628,000 649,980
----------
1,989,789
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------
INSURANCE-MULTI-LINE -- 0.2%
Assurant, Inc.
Senior Notes
4.00% due 03/15/2023................ $ 451,000 $ 444,848
Metropolitan Life Global Funding I
Senior Sec. Notes
2.50% due 09/29/2015*............... 727,000 755,583
----------
1,200,431
----------
INSURANCE-MUTUAL -- 0.2%
Liberty Mutual Group, Inc.
Senior Notes
5.75% due 03/15/2014*............... 195,000 202,334
New York Life Global Funding
Sec. Notes
1.65% due 05/15/2017*............... 829,000 841,425
----------
1,043,759
----------
MARINE SERVICES -- 0.3%
Great Lakes Dredge & Dock Corp.
Company Guar. Notes
7.38% due 02/01/2019................ 1,756,000 1,852,580
----------
MEDICAL INSTRUMENTS -- 0.5%
Accellent, Inc.
Senior Sec. Notes
8.38% due 02/01/2017................ 2,580,000 2,741,250
Medtronic, Inc.
Senior Notes
4.00% due 04/01/2043................ 453,000 440,638
St Jude Medical, Inc.
Senior Notes
3.25% due 04/15/2023................ 193,000 193,824
St Jude Medical, Inc.
Senior Notes
4.75% due 04/15/2043................ 200,000 203,838
----------
3,579,550
----------
MEDICAL PRODUCTS -- 0.5%
Becton Dickinson and Co.
Senior Notes
7.00% due 08/01/2027................ 370,000 494,531
Biomet, Inc.
Company Guar. Notes
6.50% due 08/01/2020*............... 475,000 504,094
Universal Hospital Services, Inc.
Sec. Notes
7.63% due 08/15/2020................ 929,000 999,836
Universal Hospital Services, Inc.
Sec. Notes
7.63% due 08/15/2020*............... 965,000 1,037,375
----------
3,035,836
----------
MEDICAL-DRUGS -- 0.5%
AbbVie, Inc.
Company Guar. Notes
1.20% due 11/06/2015*............... 333,000 335,587
AbbVie, Inc.
Company Guar. Notes
2.00% due 11/06/2018*............... 372,000 376,434
Endo Pharmaceuticals Holdings, Inc.
Company Guar. Notes
7.00% due 07/15/2019................ 925,000 988,594
32
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
MEDICAL-DRUGS (CONTINUED)
Valeant Pharmaceuticals International
Company Guar. Notes
6.88% due 12/01/2018*.................... $1,075,000 $1,154,953
Zoetis, Inc.
Senior Notes
1.88% due 02/01/2018*.................... 189,000 190,219
Zoetis, Inc.
Senior Notes
3.25% due 02/01/2023*.................... 397,000 402,591
----------
3,448,378
----------
MEDICAL-GENERIC DRUGS -- 0.3%
Actavis, Inc.
Senior Notes
4.63% due 10/01/2042..................... 229,000 231,012
Mylan, Inc.
Company Guar. Notes
3.13% due 01/15/2023*.................... 498,000 490,369
Mylan, Inc.
Company Guar. Notes
6.00% due 11/15/2018*.................... 173,000 189,970
Mylan, Inc.
Company Guar. Notes
7.88% due 07/15/2020*.................... 687,000 801,671
----------
1,713,022
----------
MEDICAL-HMO -- 0.2%
Cigna Corp.
Senior Notes
5.38% due 02/15/2042..................... 336,000 379,900
Cigna Corp.
Senior Notes
6.15% due 11/15/2036..................... 145,000 175,262
WellPoint, Inc.
Senior Notes
1.25% due 09/10/2015..................... 708,000 713,854
WellPoint, Inc.
Senior Notes
3.13% due 05/15/2022..................... 159,000 160,078
----------
1,429,094
----------
MEDICAL-HOSPITALS -- 1.3%
Capella Healthcare, Inc.
Company Guar. Notes
9.25% due 07/01/2017..................... 1,855,000 2,008,037
HCA, Inc.
Senior Sec. Notes
6.50% due 02/15/2020..................... 365,000 411,766
HCA, Inc.
Senior Notes
7.50% due 11/15/2095..................... 2,325,000 2,092,500
IASIS Healthcare LLC/IASIS Capital Corp.
Company Guar. Notes
8.38% due 05/15/2019..................... 2,347,000 2,467,284
Tenet Healthcare Corp.
Senior Notes
6.75% due 02/01/2020..................... 585,000 628,875
Tenet Healthcare Corp.
Senior Notes
6.88% due 11/15/2031..................... 1,320,000 1,207,800
----------
8,816,262
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------
METAL PROCESSORS & FABRICATION -- 0.0%
Precision Castparts Corp.
Senior Notes
1.25% due 01/15/2018................. $ 311,000 $ 311,646
----------
METAL-COPPER -- 0.1%
Freeport-McMoRan Copper & Gold, Inc.
Senior Notes
2.38% due 03/15/2018*................ 401,000 402,675
Freeport-McMoRan Copper & Gold, Inc.
Senior Notes
5.45% due 03/15/2043*................ 339,000 335,032
----------
737,707
----------
METAL-IRON -- 0.2%
Cliffs Natural Resources, Inc.
Senior Notes
4.88% due 04/01/2021................. 1,446,000 1,424,945
----------
MOTION PICTURES & SERVICES -- 0.1%
NAI Entertainment Holdings LLC
Senior Sec. Notes
8.25% due 12/15/2017*................ 450,000 488,250
----------
MRI/MEDICAL DIAGNOSTIC IMAGING -- 0.3%
Radnet Management, Inc.
Company Guar. Notes
10.38% due 04/01/2018................ 1,840,000 1,918,200
----------
MULTIMEDIA -- 0.3%
CC Holdings GS V LLC
Senior Sec. Notes
2.38% due 12/15/2017*................ 275,000 276,778
NBCUniversal Enterprise, Inc.
Company Guar. Notes
1.97% due 04/15/2019*................ 437,000 438,209
Time Warner Cos., Inc.
Company Guar. Notes
6.95% due 01/15/2028................. 629,000 813,220
Time Warner Entertainment Co. LP
Company Guar. Notes
8.38% due 07/15/2033................. 385,000 532,209
----------
2,060,416
----------
MUSIC -- 0.3%
WMG Acquisition Corp.
Senior Sec. Notes
6.00% due 01/15/2021*................ 2,055,000 2,152,612
----------
NON-FERROUS METALS -- 0.0%
Renco Metals, Inc.
Company Guar. Notes
11.50% due 07/01/2003+(6)(7)(9)(10).. 500,000 0
----------
NON-HAZARDOUS WASTE DISPOSAL -- 0.3%
Casella Waste Systems, Inc.
Company Guar. Notes
7.75% due 02/15/2019................. 2,053,000 1,955,482
----------
OIL & GAS DRILLING -- 0.2%
Hercules Offshore, Inc.
Company Guar. Notes
10.50% due 10/15/2017*............... 635,000 688,975
Rowan Cos., Inc.
Company Guar. Notes
5.40% due 12/01/2042................. 379,000 378,418
----------
1,067,393
----------
33
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
OIL COMPANIES-EXPLORATION & PRODUCTION -- 3.5%
Alta Mesa Holdings LP/Alta Mesa Finance
Services Corp.
Company Guar. Notes
9.63% due 10/15/2018............................ $1,140,000 $1,202,700
Anadarko Holding Co.
Senior Notes
7.15% due 05/15/2028............................ 687,000 826,888
Atlas Energy Holdings Operating Co.
LLC/Atlas Resource Finance Corp.
Senior Notes
7.75% due 01/15/2021*........................... 1,271,000 1,220,160
Carrizo Oil & Gas, Inc.
Company Guar. Notes
7.50% due 09/15/2020............................ 1,062,000 1,133,685
Chaparral Energy, Inc.
Company Guar. Notes
7.63% due 11/15/2022............................ 526,000 574,655
Chaparral Energy, Inc.
Company Guar. Notes
8.25% due 09/01/2021............................ 635,000 719,138
Chesapeake Energy Corp.
Company Guar. Notes
5.75% due 03/15/2023............................ 499,000 505,861
Chesapeake Energy Corp.
Company Guar. Notes
9.50% due 02/15/2015............................ 880,000 994,400
EP Energy LLC/Everest Acquisition Finance, Inc.
Company Guar. Notes
7.75% due 09/01/2022............................ 1,213,000 1,340,365
EPL Oil & Gas, Inc.
Company Guar. Notes
8.25% due 02/15/2018*........................... 1,090,000 1,155,400
EPL Oil & Gas, Inc.
Company Guar. Notes
8.25% due 02/15/2018............................ 470,000 499,375
EV Energy Partners LP/EV Energy Finance Corp.
Company Guar. Notes
8.00% due 04/15/2019............................ 1,555,000 1,640,525
Halcon Resources Corp.
Company Guar. Notes
8.88% due 05/15/2021*........................... 1,700,000 1,831,750
Linn Energy LLC/Linn Energy Finance Corp.
Company Guar. Notes
6.25% due 11/01/2019*........................... 827,000 845,608
Linn Energy LLC/Linn Energy Finance Corp.
Company Guar. Notes
8.63% due 04/15/2020............................ 635,000 700,088
Milagro Oil & Gas, Inc.
Sec. Notes
10.50% due 05/15/2016........................... 959,000 748,020
Noble Energy, Inc.
Senior Notes
6.00% due 03/01/2041............................ 667,000 796,312
Penn Virginia Corp.
Company Guar. Notes
7.25% due 04/15/2019............................ 1,211,000 1,207,972
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------
OIL COMPANIES-EXPLORATION & PRODUCTION (CONTINUED)
Pioneer Natural Resources Co.
Company Guar. Notes
5.88% due 07/15/2016.................... $ 624,000 $ 705,678
Plains Exploration & Production Co.
Company Guar. Notes
6.13% due 06/15/2019.................... 565,000 618,675
Plains Exploration & Production Co.
Company Guar. Notes
6.50% due 11/15/2020.................... 308,000 340,340
Plains Exploration & Production Co.
Company Guar. Notes
6.88% due 02/15/2023.................... 761,000 861,833
QEP Resources, Inc.
Senior Notes
6.88% due 03/01/2021.................... 754,000 857,675
Samson Investment Co.
Senior Notes
9.75% due 02/15/2020*................... 1,115,000 1,184,687
Talos Production LLC/Talos
Production Finance, Inc.
Senior Notes
9.75% due 02/15/2018*................... 625,000 618,750
-----------
23,130,540
-----------
OIL COMPANIES-INTEGRATED -- 0.1%
Hess Corp.
Senior Notes
7.88% due 10/01/2029.................... 275,000 354,726
Murphy Oil Corp.
Senior Notes
2.50% due 12/01/2017.................... 552,000 554,290
-----------
909,016
-----------
OIL REFINING & MARKETING -- 0.2%
Alon Refining Krotz Springs, Inc.
Senior Sec. Notes
13.50% due 10/15/2014................... 735,000 789,206
Marathon Petroleum Corp.
Senior Notes
6.50% due 03/01/2041.................... 179,000 222,564
Reliance Holdings USA, Inc.
Company Guar. Notes
5.40% due 02/14/2022.................... 550,000 613,088
-----------
1,624,858
-----------
OIL-FIELD SERVICES -- 0.7%
Exterran Holdings, Inc.
Company Guar. Notes
7.25% due 12/01/2018.................... 935,000 1,005,125
Exterran Partners LP/EXLP Finance Corp.
Company Guar. Notes
6.00% due 04/01/2021*................... 1,020,000 1,016,175
Green Field Energy Services, Inc.
Senior Sec. Notes
13.25% due 11/15/2016*.................. 1,091,000 1,123,730
Hiland Partners LP/Hiland Partners
Finance Corp.
Company Guar. Notes
7.25% due 10/01/2020*................... 500,000 546,250
34
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
OIL-FIELD SERVICES (CONTINUED)
Oil States International, Inc.
Company Guar. Notes
6.50% due 06/01/2019.................................... $ 700,000 $ 749,000
----------
4,440,280
----------
PAPER & RELATED PRODUCTS -- 1.0%
Boise Cascade LLC/Boise Cascade Finance Corp.
Company Guar. Notes
6.38% due 11/01/2020*................................... 1,000,000 1,061,250
Clearwater Paper Corp.
Company Guar. Notes
4.50% due 02/01/2023*................................... 2,014,000 1,973,720
Georgia-Pacific LLC
Company Guar. Notes
5.40% due 11/01/2020*................................... 1,066,000 1,261,302
Longview Fibre Paper & Packaging, Inc.
Senior Sec. Notes
8.00% due 06/01/2016*................................... 941,000 985,697
PH Glatfelter Co.
Company Guar. Notes
5.38% due 10/15/2020.................................... 1,012,000 1,060,070
----------
6,342,039
----------
PETROCHEMICALS -- 0.1%
PetroLogistics LP/PetroLogistics Finance Corp.
Company Guar. Notes
6.25% due 04/01/2020*................................... 663,000 667,144
----------
PIPELINES -- 1.9%
Access Midstream Partners LP/ACMP Finance Corp.
Company Guar. Notes
4.88% due 05/15/2023.................................... 1,246,000 1,230,425
Access Midstream Partners LP/ACMP Finance Corp.
Company Guar. Notes
6.13% due 07/15/2022.................................... 1,020,000 1,093,950
Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp.
Company Guar. Notes
5.88% due 08/01/2023*................................... 493,000 490,535
Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp.
Company Guar. Notes
6.63% due 10/01/2020*................................... 775,000 807,938
Copano Energy LLC/Copano Energy Finance Corp.
Company Guar. Notes
7.13% due 04/01/2021.................................... 710,000 820,050
El Paso Pipeline Partners Operating Co. LLC
Company Guar. Notes
4.70% due 11/01/2042.................................... 440,000 417,759
El Paso Pipeline Partners Operating Co.
LLC Company Guar. Notes
5.00% due 10/01/2021.................................... 87,000 97,543
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020.................................... 1,100,000 1,267,750
Energy Transfer Partners LP
Senior Notes
3.60% due 02/01/2023.................................... 207,000 205,990
Energy Transfer Partners LP
Senior Notes
6.50% due 02/01/2042.................................... 880,000 1,005,508
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------------
PIPELINES (CONTINUED)
Enterprise Products Operating LLC
Company Guar. Notes
4.85% due 03/15/2044........................... $ 224,000 $ 228,675
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
5.75% due 02/15/2021*.......................... 220,000 227,150
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
7.88% due 12/15/2018........................... 805,000 883,487
Inergy Midstream LP/NRGM Finance Corp.
Company Guar. Notes
6.00% due 12/15/2020*.......................... 840,000 873,600
MarkWest Energy Partners LP/
MarkWest Energy Finance Corp.
Company Guar. Notes
5.50% due 02/15/2023........................... 275,000 288,063
MarkWest Energy Partners LP/
MarkWest Energy Finance Corp.
Company Guar. Notes
6.50% due 08/15/2021........................... 614,000 663,120
Southern Star Central Corp.
Senior Notes
6.75% due 03/01/2016........................... 650,000 658,125
Targa Resources Partners LP/Targa Resources
Partners Finance Corp.
Company Guar. Notes
5.25% due 05/01/2023*.......................... 918,000 954,720
Western Gas Partners LP
Senior Notes
4.00% due 07/01/2022........................... 166,000 171,720
-----------
12,386,108
-----------
PRECIOUS METALS -- 0.1%
Coeur d'Alene Mines Corp.
Company Guar. Notes
7.88% due 02/01/2021*.......................... 936,000 988,650
-----------
PRINTING-COMMERCIAL -- 0.3%
RR Donnelley & Sons Co.
Senior Notes
8.25% due 03/15/2019........................... 1,125,000 1,215,000
Valassis Communications, Inc.
Company Guar. Notes
6.63% due 02/01/2021........................... 990,000 1,056,825
-----------
2,271,825
-----------
PUBLISHING-NEWSPAPERS -- 0.2%
McClatchy Co.
Senior Sec. Notes
9.00% due 12/15/2022*.......................... 1,275,000 1,383,375
-----------
RADIO -- 0.1%
Entercom Radio LLC
Company Guar. Notes
10.50% due 12/01/2019.......................... 850,000 977,500
-----------
REAL ESTATE INVESTMENT TRUSTS -- 1.0%
American Tower Trust I
Sec. Notes
1.55% due 03/15/2043*.......................... 260,000 261,011
35
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
Brandywine Operating Partnership LP
Company Guar. Notes
4.95% due 04/15/2018...................... $ 281,000 $ 309,802
Corrections Corp. of America
Company Guar. Notes
4.13% due 04/01/2020*..................... 1,300,000 1,324,375
Geo Group, Inc.
Company Guar. Notes
6.63% due 02/15/2021...................... 47,000 51,641
Host Hotels & Resorts LP
Senior Notes
3.75% due 10/15/2023...................... 187,000 187,731
Host Hotels & Resorts LP
Company Guar. Notes
4.75% due 03/01/2023...................... 462,000 496,650
Host Hotels & Resorts LP
Senior Notes
5.25% due 03/15/2022...................... 554,000 614,940
Omega Healthcare Investors, Inc.
Company Guar. Notes
5.88% due 03/15/2024...................... 957,000 1,019,205
RHP Hotel Properties LP/RHP Finance Corp.
Company Guar. Notes
5.00% due 04/15/2021*..................... 588,000 588,000
Sabra Health Care LP/Sabra Capital Corp.
Company Guar. Notes
8.13% due 11/01/2018...................... 1,525,000 1,656,531
----------
6,509,886
----------
REAL ESTATE MANAGEMENT/SERVICES -- 0.2%
Kennedy-Wilson, Inc.
Company Guar. Notes
8.75% due 04/01/2019...................... 1,515,000 1,636,200
----------
REAL ESTATE OPERATIONS & DEVELOPMENT -- 0.2%
First Industrial LP
Senior Notes
5.75% due 01/15/2016...................... 1,535,000 1,636,081
----------
RECYCLING -- 0.0%
Aleris International, Inc.
Escrow Notes
9.00% due 12/15/2014+(9)(10).............. 3,285,000 124
----------
RENTAL AUTO/EQUIPMENT -- 0.5%
Ashtead Capital, Inc.
Sec. Notes
6.50% due 07/15/2022*..................... 425,000 461,656
H&E Equipment Services, Inc.
Company Guar. Notes
7.00% due 09/01/2022*..................... 1,140,000 1,254,000
Hertz Corp.
Company Guar. Notes
5.88% due 10/15/2020...................... 450,000 474,750
United Rentals North America, Inc.
Company Guar. Notes
6.13% due 06/15/2023...................... 1,170,000 1,251,900
----------
3,442,306
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 0.3%
CDR DB Sub, Inc.
Senior Notes
7.75% due 10/15/2020*....................... $1,274,000 $1,309,035
Limited Brands, Inc.
Company Guar. Notes
6.63% due 04/01/2021........................ 820,000 926,600
----------
2,235,635
----------
RETAIL-DRUG STORE -- 0.3%
CVS Pass-Through Trust
Pass Through Certs.
5.77% due 01/31/2033*....................... 237,920 276,764
CVS Pass-Through Trust
Pass Through Certs
5.93% due 01/10/2034*....................... 617,038 729,285
Rite Aid Corp.
Senior Sec. Notes
8.00% due 08/15/2020........................ 600,000 678,000
----------
1,684,049
----------
RETAIL-OFFICE SUPPLIES -- 0.2%
Office Depot, Inc.
Senior Sec. Notes
9.75% due 03/15/2019*....................... 1,032,000 1,210,020
----------
RETAIL-PET FOOD & SUPPLIES -- 0.2%
Radio Systems Corp.
Sec. Notes
8.38% due 11/01/2019*....................... 1,083,000 1,145,273
----------
RETAIL-PROPANE DISTRIBUTION -- 0.1%
AmeriGas Finance LLC/AmeriGas Finance Corp.
Company Guar. Notes
6.75% due 05/20/2020........................ 160,000 174,000
AmeriGas Finance LLC/AmeriGas Finance Corp.
Company Guar. Notes
7.00% due 05/20/2022........................ 640,000 696,000
----------
870,000
----------
RETAIL-REGIONAL DEPARTMENT STORES -- 0.0%
Macy's Retail Holdings, Inc.
Company Guar. Notes
6.90% due 04/01/2029........................ 218,000 262,162
----------
RETAIL-RESTAURANTS -- 0.8%
Dave & Buster's, Inc.
Company Guar. Notes
11.00% due 06/01/2018....................... 1,095,000 1,238,719
Landry's, Inc.
Senior Notes
9.38% due 05/01/2020*....................... 1,566,000 1,687,365
Wok Acquisition Corp.
Company Guar. Notes
10.25% due 06/30/2020*...................... 1,935,000 2,070,450
----------
4,996,534
----------
RETAIL-TOY STORES -- 0.3%
Toys R Us Property Co. II LLC
Senior Sec. Notes
8.50% due 12/01/2017........................ 1,625,000 1,716,406
----------
36
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
RUBBER/PLASTIC PRODUCTS -- 0.0%
Venture Holdings Co. LLC
Escrow Notes
11.00% due 06/01/2007+(9)(10)....... $ 100,000 $ 0
----------
SAVINGS & LOANS/THRIFTS -- 0.4%
Astoria Financial Corp.
Senior Notes
5.00% due 06/19/2017................ 569,000 609,320
First Niagara Financial Group, Inc.
Sub. Notes
7.25% due 12/15/2021................ 820,000 998,685
People's United Financial, Inc.
Senior Notes
3.65% due 12/06/2022................ 822,000 837,848
Santander Holdings USA, Inc.
Senior Notes
3.00% due 09/24/2015................ 300,000 307,603
----------
2,753,456
----------
SCHOOLS -- 0.1%
Northwestern University Bonds
4.20% due 12/01/2047................ 386,000 401,074
University of Pennsylvania
Senior Notes
4.67% due 09/01/2112................ 292,000 310,627
----------
711,701
----------
SECURITY SERVICES -- 0.1%
ADT Corp.
Senior Notes
2.25% due 07/15/2017*............... 278,000 279,071
ADT Corp.
Senior Notes
3.50% due 07/15/2022*............... 465,000 463,558
----------
742,629
----------
SHIPBUILDING -- 0.2%
Huntington Ingalls Industries, Inc.
Company Guar. Notes
7.13% due 03/15/2021................ 1,043,000 1,134,263
----------
SPECIAL PURPOSE ENTITIES -- 0.2%
MassMutual Global Funding II
Senior Sec. Notes
2.00% due 04/05/2017*............... 856,000 877,455
MassMutual Global Funding II
Sec. Notes
2.50% due 10/17/2022*............... 345,000 337,548
----------
1,215,003
----------
STEEL PIPE & TUBE -- 0.2%
JMC Steel Group, Inc.
Senior Notes
8.25% due 03/15/2018*............... 1,490,000 1,579,400
----------
STEEL-PRODUCERS -- 0.4%
AK Steel Corp.
Senior Sec. Notes
8.75% due 12/01/2018*............... 935,000 1,030,837
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------
STEEL-PRODUCERS (CONTINUED)
Gerdau Holdings, Inc.
Company Guar. Notes
7.00% due 01/20/2020...................... $ 425,000 $ 484,288
Ryerson, Inc./Joseph T Ryerson & Son, Inc.
Senior Sec. Notes
9.00% due 10/15/2017*..................... 800,000 874,000
----------
2,389,125
----------
STEEL-SPECIALTY -- 0.1%
Allegheny Technologies, Inc.
Senior Notes
5.95% due 01/15/2021.................... 383,000 428,185
----------
STORAGE/WAREHOUSING -- 0.2%
Mobile Mini, Inc.
Company Guar. Notes
7.88% due 12/01/2020.................... 1,165,000 1,296,062
----------
TELECOM SERVICES -- 0.2%
BellSouth Telecommunications, Inc.
Senior Notes
6.38% due 06/01/2028.................... 251,000 303,567
Consolidated Communications Finance Co.
Company Guar. Notes
10.88% due 06/01/2020*.................. 825,000 940,500
----------
1,244,067
----------
TELEPHONE-INTEGRATED -- 1.2%
AT&T, Inc.
Senior Notes
4.35% due 06/15/2045*................... 154,000 143,164
AT&T, Inc.
Senior Notes
6.50% due 09/01/2037.................... 506,000 620,513
BellSouth Corp.
Senior Notes
6.55% due 06/15/2034.................... 430,000 508,312
CenturyLink, Inc.
Senior Notes
5.63% due 04/01/2020.................... 550,000 562,375
CenturyLink, Inc.
Senior Notes
5.80% due 03/15/2022.................... 1,025,000 1,037,813
Frontier Communications Corp.
Senior Notes
8.13% due 10/01/2018.................... 1,600,000 1,824,000
Frontier Communications Corp.
Senior Notes
9.25% due 07/01/2021.................... 99,000 113,603
Sprint Capital Corp.
Company Guar. Notes
8.75% due 03/15/2032.................... 1,850,000 2,206,125
Verizon Communications, Inc.
Senior Notes
6.40% due 02/15/2038.................... 116,000 139,521
Windstream Corp.
Company Guar. Notes
6.38% due 08/01/2023*................... 1,047,000 1,039,147
----------
8,194,573
----------
37
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
TELEVISION -- 0.3%
Gray Television, Inc.
Company Guar. Notes
7.50% due 10/01/2020............... $1,025,000 $1,094,188
Local TV Finance LLC
Senior Notes
9.25% due 06/15/2015*(4)........... 681,081 686,189
----------
1,780,377
----------
THEATERS -- 0.3%
Cinemark USA, Inc.
Company Guar. Notes
5.13% due 12/15/2022*.............. 1,512,000 1,519,560
National CineMedia LLC
Senior Sec. Notes
6.00% due 04/15/2022............... 680,000 729,300
----------
2,248,860
----------
TRANSPORT-EQUIPMENT & LEASING -- 0.2%
Aviation Capital Group Corp.
Senior Notes
4.63% due 01/31/2018*.............. 940,000 969,778
GATX Corp.
Senior Notes
2.38% due 07/30/2018............... 175,000 177,001
GATX Corp.
Senior Notes
3.90% due 03/30/2023............... 390,000 392,917
----------
1,539,696
----------
TRANSPORT-RAIL -- 0.1%
Burlington Northern Santa Fe LLC
Senior Notes
4.45% due 03/15/2043............... 281,000 284,229
Norfolk Southern Corp.
Senior Notes
6.00% due 05/23/2111............... 402,000 491,436
----------
775,665
----------
TRANSPORT-SERVICES -- 0.3%
Bristow Group, Inc.
Company Guar. Notes
6.25% due 10/15/2022............... 675,000 729,000
Era Group, Inc.
Company Guar. Notes
7.75% due 12/15/2022*.............. 1,045,000 1,076,350
----------
1,805,350
----------
TRAVEL SERVICES -- 0.3%
Sabre, Inc.
Senior Sec. Notes
8.50% due 05/15/2019*.............. 2,021,000 2,192,785
----------
TRUCKING/LEASING -- 0.2%
Penske Truck Leasing Co. LP/PTL
Finance Corp.
Senior Notes
2.88% due 07/17/2018*.............. 619,000 631,191
Penske Truck Leasing Co. LP/PTL
Finance Corp.
Notes
3.13% due 05/11/2015*.............. 227,000 234,874
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
TRUCKING/LEASING (CONTINUED)
Penske Truck Leasing Co. LP/PTL
Finance Corp.
Notes
4.25% due 01/17/2023*................... $ 213,000 $ 214,534
------------
1,080,599
------------
WEB HOSTING/DESIGN -- 0.3%
Equinix, Inc.
Senior Notes
4.88% due 04/01/2020.................... 1,970,000 1,984,775
------------
WIRE & CABLE PRODUCTS -- 0.1%
International Wire Group Holdings, Inc.
Senior Sec. Notes
8.50% due 10/15/2017*................... 858,000 883,740
------------
WIRELESS EQUIPMENT -- 0.0%
Motorola Solutions, Inc.
Senior Notes
6.63% due 11/15/2037.................... 11,445 12,706
------------
TOTAL U.S. CORPORATE BONDS & NOTES
(cost $304,541,507)..................... 314,241,431
------------
FOREIGN CORPORATE BONDS & NOTES -- 14.3%
APPLIANCES -- 0.1%
Arcelik AS
Senior Notes
5.00% due 04/03/2023*................... 500,000 498,514
------------
AUTO-CARS/LIGHT TRUCKS -- 0.2%
Automotores Gildemeister SA
Company Guar. Notes
6.75% due 01/15/2023*................... 800,000 840,000
Volkswagen International Finance NV
Company Guar. Notes
1.60% due 11/20/2017*................... 580,000 581,676
------------
1,421,676
------------
BANKS-COMMERCIAL -- 2.4%
Akbank TAS
Senior Notes
7.50% due 02/05/2018*................... TRY 2,385,000 1,297,614
ANZ New Zealand Int'l, Ltd.
Bank Guar. Notes
1.13% due 03/24/2016*................... 1,315,000 1,316,190
Axis Bank, Ltd.
Senior Notes
5.13% due 09/05/2017.................... 500,000 531,847
Banco ABC Brasil SA
Senior Notes
8.50% due 03/28/2016*(9)................ BRL 3,100,000 1,531,431
Banco Bradesco SA
Senior Notes
4.50% due 01/12/2017*................... 325,000 346,938
Banco de Bogota SA
Senior Notes
5.00% due 01/15/2017*................... 260,000 278,525
Banco do Brasil SA
Sub. Notes
5.88% due 01/26/2022*................... 440,000 470,800
Bank of Ceylon
Senior Notes
6.88% due 05/03/2017*................... 450,000 472,500
38
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
BANKS-COMMERCIAL (CONTINUED)
Bank of Montreal
Senior Notes
1.40% due 09/11/2017................. $ 742,000 $ 743,113
Barclays Bank PLC
Sub. Notes
6.05% due 12/04/2017*................ 314,000 349,989
Cooperatieve Centrale Raiffeisen-
Boerenleenbank BA
Senior Notes
1.70% due 03/19/2018................. 426,000 424,086
ING Bank NV
Notes
2.00% due 09/25/2015*................ 1,499,000 1,522,984
LBG Capital No.1 PLC FRS
Bank Guar. Notes
8.00% due 06/15/2020*(3)............. 862,000 919,305
Malayan Banking Bhd
Sub. Notes
3.25% due 09/20/2022................. 500,000 504,386
National Australia Bank, Ltd.
Senior Notes
1.60% due 08/07/2015................. 719,000 731,556
National Bank of Canada Bank
Guar. Notes
1.45% due 11/07/2017................. 1,040,000 1,036,089
PKO Finance AB
Senior Notes
4.63% due 09/26/2022*................ 700,000 725,207
RHB Bank Bhd
Senior Notes
3.25% due 05/11/2017................. 425,000 439,496
Russian Agricultural Bank OJSC Via
RSHB Capital SA
Senior Notes
5.30% due 12/27/2017*................ 440,000 466,356
Sberbank of Russia Via SB Capital SA
Senior Notes
6.13% due 02/07/2022................. 500,000 558,750
Turkiye Garanti Bankasi AS
Senior Notes
5.25% due 09/13/2022*................ 575,000 598,719
Turkiye Halk Bankasi AS
Senior Notes
3.88% due 02/05/2020*................ 355,000 348,787
-----------
15,614,668
-----------
BANKS-MONEY CENTER -- 0.1%
Royal Bank of Scotland NV FRS
Sub. Notes
0.98% due 03/09/2015................. 670,000 637,612
-----------
BANKS-SPECIAL PURPOSE -- 0.6%
Burgan Finance No. 1, Ltd.
Bank Guar. Notes
7.88% due 09/29/2020................. 1,005,000 1,170,825
Development Bank of Kazakhstan JSC
Senior Notes
4.13% due 12/10/2022*................ 600,000 580,500
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------------
BANKS-SPECIAL PURPOSE (CONTINUED)
Development Bank of Kazakhstan JSC
Senior Notes
5.50% due 12/20/2015................... $ 340,000 $ 365,500
Kreditanstalt fuer Wiederaufbau
Government Guar. Notes
3.75% due 09/25/2015................... NOK 10,500,000 1,874,652
----------
3,991,477
----------
BUILDING & CONSTRUCTION PRODUCTS-MISC. -- 0.0%
Corp GEO SAB de CV
Company Guar. Notes
9.25% due 06/30/2020*.................. 360,000 311,400
----------
BUILDING PRODUCTS-CEMENT -- 0.2%
Cemex SAB de CV
Senior Sec. Notes
5.88% due 03/25/2019*.................. 625,000 631,250
Rearden G Holdings EINS GmbH
Company Guar. Notes
7.88% due 03/30/2020................... 550,000 605,000
----------
1,236,250
----------
CELLULAR TELECOM -- 0.2%
VimpelCom Holdings BV
Company Guar. Notes
9.00% due 02/13/2018*.................. RUB 24,000,000 800,257
Vodafone Group PLC
Senior Notes
4.38% due 02/19/2043................... 680,000 648,882
----------
1,449,139
----------
CHEMICALS-DIVERSIFIED -- 0.3%
Ineos Finance PLC
Senior Sec. Notes
8.38% due 02/15/2019*.................. 973,000 1,076,381
OXEA Finance/Cy SCA
Senior Sec. Notes
9.50% due 07/15/2017*.................. 753,000 817,005
----------
1,893,386
----------
COAL -- 0.1%
Indo Energy Finance II BV
Company Guar. Notes
6.38% due 01/24/2023*.................. 450,000 462,375
----------
COMMERCIAL SERVICES -- 0.4%
Global A&T Electronics, Ltd.
Senior Sec. Notes
10.00% due 02/01/2019*................. 2,200,000 2,354,000
----------
COMPUTERS-MEMORY DEVICES -- 0.2%
Seagate HDD Cayman
Company Guar. Notes
7.75% due 12/15/2018................... 925,000 1,014,031
----------
CONTAINERS-METAL/GLASS -- 0.3%
Ardagh Packaging Finance PLC/Ardagh MP
Holdings USA, Inc.
Senior Notes
7.00% due 11/15/2020*.................. 1,677,000 1,723,118
----------
39
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
CRUISE LINES -- 0.4%
NCL Corp., Ltd.
Company Guar. Notes
5.00% due 02/15/2018*..................... $ 780,000 $ 794,625
Royal Caribbean Cruises, Ltd.
Senior Notes
5.25% due 11/15/2022...................... 1,918,000 1,941,975
----------
2,736,600
----------
DIVERSIFIED BANKING INSTITUTIONS -- 0.1%
Royal Bank of Scotland Group PLC
Senior Notes
2.55% due 09/18/2015...................... 424,000 435,783
----------
DIVERSIFIED FINANCIAL SERVICES -- 0.1%
DTEK Finance PLC
Company Guar. Notes
7.88% due 04/04/2018*..................... 650,000 639,486
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.3%
Bombardier, Inc.
Senior Notes
6.13% due 01/15/2023*..................... 1,890,000 1,960,875
Pentair Finance SA
Company Guar. Notes
1.35% due 12/01/2015*..................... 292,000 292,410
----------
2,253,285
----------
DIVERSIFIED MINERALS -- 0.4%
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
6.00% due 04/01/2017*..................... 825,000 847,687
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
6.38% due 02/01/2016*..................... 600,000 618,750
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
6.88% due 04/01/2022*..................... 1,250,000 1,309,375
Volcan Cia Minera SAA
Company Guar. Notes
5.38% due 02/02/2022*..................... 118,000 125,080
----------
2,900,892
----------
DIVERSIFIED OPERATIONS -- 0.1%
Tenedora Nemak SA de CV
Senior Notes
5.50% due 02/28/2023*..................... 650,000 658,125
----------
ELECTRIC-GENERATION -- 0.1%
Abu Dhabi National Energy Co.
Senior Notes
5.88% due 12/13/2021*..................... 200,000 235,250
Abu Dhabi National Energy Co.
Senior Notes
6.17% due 10/25/2017...................... 120,000 140,700
Comision Federal de Electricidad
Senior Notes
4.88% due 05/26/2021*..................... 500,000 555,625
----------
931,575
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
ELECTRIC-INTEGRATED -- 0.2%
Centrais Eletricas Brasileiras SA
Senior Notes
5.75% due 10/27/2021................. $ 500,000 $ 533,125
E-CL SA
Senior Notes
5.63% due 01/15/2021................. 550,000 619,457
Electricite de France SA FRS
Sub. Notes
5.25% due 01/29/2023*(3)............. 267,000 265,248
Empresas Publicas de Medellin ESP
Senior Notes
8.38% due 02/01/2021................. COP 266,000,000 169,803
----------
1,587,633
----------
ELECTRIC-TRANSMISSION -- 0.1%
Empresa de Energia de Bogota SA
Senior Notes
6.13% due 11/10/2021*................ 360,000 401,400
----------
FINANCE-LEASING COMPANIES -- 0.6%
AerCap Aviation Solutions BV
Company Guar. Notes
6.38% due 05/30/2017................. 732,000 785,985
Aircastle, Ltd.
Senior Notes
6.25% due 12/01/2019................. 1,800,000 1,966,500
Milestone Aviation Group, Ltd.
Senior Notes
8.63% due 12/15/2017*................ 1,047,000 1,075,792
----------
3,828,277
----------
FOOD-MEAT PRODUCTS -- 0.1%
ESAL GmbH
Company Guar. Notes
6.25% due 02/05/2023*................ 260,000 261,300
Minerva Luxembourg SA
Company Guar. Notes
7.75% due 01/31/2023*................ 460,000 493,350
----------
754,650
----------
GOLD MINING -- 0.1%
Gold Fields Orogen Holding BVI, Ltd.
Company Guar. Notes
4.88% due 10/07/2020................. 350,000 343,875
----------
HAZARDOUS WASTE DISPOSAL -- 0.2%
Tervita Corp.
Senior Sec. Notes
8.00% due 11/15/2018*................ 1,055,000 1,090,606
----------
INDEPENDENT POWER PRODUCERS -- 0.1%
AES Drax Energy, Ltd.
Senior Sec. Notes
11.50% due 08/30/2010+(6)(9)(10)(14). 725,000 0
PT Perusahaan Listrik Negara
Senior Notes
5.50% due 11/22/2021*................ 500,000 542,500
----------
542,500
----------
40
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
INSURANCE-MULTI-LINE -- 0.2%
Catlin Insurance Co., Ltd. FRS
Jr. Sub. Notes
7.25% due 01/19/2017*(3)....................... $997,000 $1,024,418
----------
INSURANCE-PROPERTY/CASUALTY -- 0.1%
Sompo Japan Insurance, Inc. FRS
Jr. Sub. Notes
5.33% due 03/28/2073*.......................... 723,000 729,942
----------
INVESTMENT COMPANIES -- 0.1%
Temasek Financial I, Ltd.
Company Guar. Notes
2.38% due 01/23/2023*.......................... 539,000 519,061
----------
MEDICAL-DRUGS -- 0.2%
Hypermarcas SA
Senior Notes
6.50% due 04/20/2021*.......................... 310,000 335,187
Takeda Pharmaceutical Co., Ltd.
Senior Notes
1.63% due 03/17/2017*.......................... 659,000 667,831
----------
1,003,018
----------
METAL-IRON -- 0.0%
OJSC Novolipetsk Steel via Steel Funding, Ltd.
Notes
4.95% due 09/26/2019*.......................... 265,000 267,716
----------
MUNICIPAL BONDS -- 0.1%
City of Kyiv Via Kyiv Finance PLC
Senior Notes
9.38% due 07/11/2016*.......................... 870,000 860,988
----------
OIL & GAS DRILLING -- 0.2%
Transocean, Inc.
Company Guar. Notes
6.38% due 12/15/2021........................... 477,000 555,360
Transocean, Inc.
Company Guar. Notes
7.35% due 12/15/2041........................... 158,000 190,750
Transocean, Inc.
Company Guar. Notes
7.50% due 04/15/2031........................... 280,000 336,320
----------
1,082,430
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.5%
Anadarko Finance Co.
Company Guar. Notes
7.50% due 05/01/2031........................... 588,000 779,257
Gazprom OAO Via Gaz Capital SA
Senior Notes
6.00% due 01/23/2021*.......................... 260,000 291,200
KazMunayGas National Co.
Senior Notes
6.38% due 04/09/2021*.......................... 600,000 698,250
KazMunaiGaz Finance Sub BV
Company Guar. Notes
7.00% due 05/05/2020........................... 500,000 595,000
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------
OIL COMPANIES-EXPLORATION & PRODUCTION (CONTINUED)
PT Pertamina Persero
Senior Notes
4.88% due 05/03/2022*......... $ 720,000 $ 748,800
----------
3,112,507
----------
OIL COMPANIES-INTEGRATED -- 0.9%
BG Energy Capital PLC
Company Guar. Notes
2.88% due 10/15/2016*......... 470,000 497,925
BP Capital Markets PLC
Company Guar. Notes
1.85% due 05/05/2017.......... 214,000 219,370
BP Capital Markets PLC
Company Guar. Notes
2.25% due 11/01/2016.......... 711,000 739,709
Petroleos de Venezuela SA
Company Guar. Notes
5.38% due 04/12/2027.......... 350,000 241,500
Petroleos de Venezuela SA
Company Guar. Notes
8.50% due 11/02/2017.......... 1,850,000 1,799,125
Petroleos Mexicanos
Company Guar. Notes
4.88% due 01/24/2022.......... 800,000 886,000
Petroleos Mexicanos
Company Guar. Notes
5.50% due 06/27/2044*......... 621,000 640,561
Petronas Capital, Ltd.
Company Guar. Notes
5.25% due 08/12/2019.......... 600,000 697,765
Rosneft Oil Co via Rosneft
International Finance, Ltd.
Senior Notes
4.20% due 03/06/2022*......... 200,000 198,250
Sibur Securities, Ltd.
Company Guar. Notes
3.91% due 01/31/2018*......... 310,000 304,575
----------
6,224,780
----------
OIL REFINING & MARKETING -- 0.0%
Thai Oil PCL
Senior Notes
3.63% due 01/23/2023*......... 200,000 201,077
----------
PAPER & RELATED PRODUCTS -- 0.1%
Inversiones CMPC SA
Company Guar. Notes
4.50% due 04/25/2022.......... 880,000 897,109
----------
PASTORAL & AGRICULTURAL -- 0.1%
MHP SA
Company Guar. Notes
8.25% due 04/02/2020*......... 650,000 644,233
----------
PETROCHEMICALS -- 0.0%
Mexichem SAB de CV
Company Guar. Notes
6.75% due 09/19/2042*......... 224,000 248,360
----------
41
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
PIPELINES -- 0.0%
Transportadora de Gas Internacional SA ESP
Senior Notes
5.70% due 03/20/2022*...................... $ 200,000 $ 218,000
----------
REAL ESTATE OPERATIONS & DEVELOPMENT -- 0.5%
Agile Property Holdings, Ltd.
Company Guar. Notes
9.88% due 03/20/2017....................... 350,000 392,438
China Overseas Finance Cayman II, Ltd.
Company Guar. Notes
5.50% due 11/10/2020....................... 300,000 336,111
China Overseas Finance Cayman IV, Ltd.
Company Guar. Notes
4.88% due 02/15/2017....................... 440,000 478,945
Country Garden Holdings Co., Ltd.
Company Guar. Notes
7.50% due 01/10/2023*...................... 200,000 204,260
Country Garden Holdings Co., Ltd.
Company Guar. Notes
11.13% due 02/23/2018...................... 410,000 471,500
Mattamy Group Corp.
Senior Notes
6.50% due 11/15/2020*...................... 1,525,000 1,521,187
----------
3,404,441
----------
RETAIL-MAJOR DEPARTMENT STORES -- 0.1%
LS Finance 2022, Ltd.
Company Guar. Notes
4.25% due 10/16/2022....................... 500,000 504,257
----------
RETAIL-MISC./DIVERSIFIED -- 0.1%
Wesfarmers, Ltd.
Senior Notes
1.87% due 03/20/2018*...................... 507,000 511,360
----------
SATELLITE TELECOM -- 0.3%
Intelsat Luxembourg SA
Company Guar. Notes
7.75% due 06/01/2021*...................... 340,000 345,950
Intelsat Luxembourg SA
Company Guar. Notes
11.50% due 02/04/2017(4)................... 1,725,000 1,831,950
----------
2,177,900
----------
SAVINGS & LOANS/THRIFTS -- 0.1%
RBS Citizens Financial Group, Inc.
Sub. Notes
4.15% due 09/28/2022*...................... 775,000 795,872
----------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 0.1%
NXP BV/NXP Funding LLC
Senior Notes
5.75% due 03/15/2023*...................... 935,000 953,700
----------
SEMICONDUCTOR EQUIPMENT -- 0.2%
MagnaChip Semiconductor SA/MagnaChip
Semiconductor Finance Co.
Company Guar. Notes
10.50% due 04/15/2018...................... 1,100,000 1,226,500
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
SOVEREIGN -- 0.1%
Perusahaan Penerbit SBSN
Senior Notes
3.30% due 11/21/2022*................... $ 950,000 $ 929,813
----------
SOVEREIGN AGENCY -- 0.2%
AHML Finance, Ltd.
Notes
7.75% due 02/13/2018*................... RUB35,000,000 1,131,172
----------
SPECIAL PURPOSE ENTITIES -- 0.1%
Federal Grid Co. OJS via Federal Grid
Finance, Ltd.
Notes
8.45% due 03/13/2019.................... RUB 29,000,000 944,955
Hellas Telecommunications
Luxembourg II FRS
Sub. Notes
6.03% due
01/15/2015*+(9)(10)(12)(14)............. 1,330,000 0
----------
944,955
----------
STEEL PIPE & TUBE -- 0.1%
TMK OAO Via TMK Capital SA
Senior Notes
6.75% due 04/03/2020*................... 650,000 649,968
----------
STEEL-PRODUCERS -- 0.1%
Severstal OAO Via Steel Capital SA
Senior Notes
4.45% due 03/19/2018*................... 650,000 643,500
Severstal OAO Via Steel Capital SA
Senior Notes
5.90% due 10/17/2022*................... 200,000 199,000
----------
842,500
----------
SUGAR -- 0.1%
Cosan Luxembourg SA
Company Guar. Notes
9.50% due 03/14/2018*................... BRL 1,590,000 809,826
----------
TELECOM SERVICES -- 0.5%
Digicel, Ltd. Senior
Notes
6.00% due 04/15/2021*................... 1,255,000 1,248,725
UPCB Finance III, Ltd.
Senior Sec. Notes
6.63% due 07/01/2020*................... 900,000 967,500
Wind Acquisition Holdings Finance SA
Senior Sec. Notes
12.25% due 07/15/2017*(4)(18)........... 1,013,626 1,054,171
----------
3,270,396
----------
TELEPHONE-INTEGRATED -- 0.5%
Empresa de Telecomunicaciones de Bogota
Senior Notes
7.00% due 01/17/2023*................... COP 640,000,000 371,726
Koninklijke KPN NV
Senior Sub. Notes
7.00% due 03/28/2073*................... 253,000 249,838
42
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
TELEPHONE-INTEGRATED (CONTINUED)
Oi SA
Senior Notes
5.75% due 02/10/2022................. $ 600,000 $ 627,000
Oi SA
Senior Notes
9.75% due 09/15/2016*................ BRL 575,000 294,708
Telefonica Chile SA
Senior Notes
3.88% due 10/12/2022................. 700,000 687,189
Telefonica Emisiones SAU
Company Guar. Notes
5.46% due 02/16/2021................. 788,000 848,052
-----------
3,078,513
-----------
TELEVISION -- 0.0%
Myriad International Holdings BV
Company Guar. Notes
6.38% due 07/28/2017................. 200,000 225,260
-----------
THERAPEUTICS -- 0.4%
Warner Chilcott Co. LLC
Company Guar. Notes
7.75% due 09/15/2018................. 2,562,000 2,738,138
-----------
TRANSPORT-RAIL -- 0.2%
Russian Railways via RZD Capital PLC
Senior Notes
5.70% due 04/05/2022................. 400,000 441,000
Russian Railways via RZD Capital PLC
Senior Notes
8.30% due 04/02/2019................. RUB 20,000,000 662,859
-----------
1,103,859
-----------
TRANSPORT-SERVICES -- 0.1%
Transnet SOC, Ltd.
Senior Notes
4.00% due 07/26/2022*................ 600,000 574,500
-----------
TOTAL FOREIGN CORPORATE BONDS & NOTES
(cost $94,190,540) 94,618,902
-----------
FOREIGN GOVERNMENT AGENCIES -- 22.5%
REGIONAL AUTHORITY -- 0.2%
Hydro-Quebec
Government Guar. Notes
1.38% due 06/19/2017................. 577,000 584,617
Province of British Columbia
Senior Notes
2.85% due 06/15/2015................. 612,000 644,191
-----------
1,228,808
-----------
SOVEREIGN -- 22.0%
Arab Republic of Egypt
Senior Notes
5.75% due 04/29/2020................. 610,000 515,450
Arab Republic of Egypt
Senior Notes
6.88% due 04/30/2040................. 530,000 410,750
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------
SOVEREIGN (CONTINUED)
Commonwealth of Australia
Senior Notes
4.50% due 10/21/2014.......... AUD 870,000 $ 928,784
Commonwealth of Jamaica
Senior Notes
8.00% due 06/24/2019.......... 260,000 256,750
Commonwealth of Jamaica
Senior Notes
8.00% due 03/15/2039.......... 250,000 220,625
Dominican Republic
Senior Notes
7.50% due 05/06/2021.......... 437,000 488,566
Dominican Republic
Senior Notes
8.63% due 04/20/2027.......... 600,000 733,500
Dominican Republic
Senior Notes
9.04% due 01/23/2018.......... 404,401 450,301
European Union
Senior Notes
3.25% due 04/04/2018.......... EUR 190,000 272,509
Export Credit Bank of Turkey
Bonds
5.38% due 11/04/2016.......... 350,000 375,865
Federal Republic of Nigeria
Senior Notes
6.75% due 01/28/2021.......... 1,400,000 1,629,250
Federative Republic of Brazil
Senior Notes
4.88% due 01/22/2021.......... 1,920,000 2,227,200
Federative Republic of Brazil
Senior Notes
8.75% due 02/04/2025.......... 570,000 872,100
Federative Republic of Brazil
Bonds
10.13% due 05/15/2027......... 500,000 860,750
Federative Republic of Brazil
Senior Notes
10.25% due 01/10/2028......... BRL 2,000,000 1,185,624
Federative Republic of Brazil
Senior Bonds
12.50% due 01/05/2022......... BRL 1,700,000 1,129,554
Government of Australia
Senior Notes
5.75% due 05/15/2021.......... AUD 1,880,000 2,292,910
Government of Canada
Senior Notes
0.88% due 02/14/2017.......... 527,000 530,584
Government of Canada
Bonds
4.25% due 06/01/2018.......... CAD 300,000 337,508
Government of Canada
Bonds
5.75% due 06/01/2029.......... CAD 2,435,000 3,505,113
Government of Malaysia
Notes
3.31% due 10/31/2017.......... MYR 7,100,000 2,307,972
43
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------
FOREIGN GOVERNMENT AGENCIES (CONTINUED)
SOVEREIGN (CONTINUED)
Government of New Zealand
Senior Notes
6.00% due 04/15/2015.............. NZD 3,500,000 $3,136,808
Government of Romania
Senior Notes
6.75% due 02/07/2022.............. 600,000 698,250
Government of Romania
Senior Notes
6.75% due 02/07/2022*............. 420,000 488,775
Government of Ukraine
Senior Notes
7.80% due 11/28/2022*............. 1,250,000 1,265,625
Kingdom of Morocco
Senior Notes
4.25% due 12/11/2022*............. 1,300,000 1,326,650
Kingdom of Norway
Bonds
3.75% due 05/25/2021.............. NOK 7,620,000 1,477,567
Kingdom of Sweden
Bonds
3.50% due 06/01/2022.............. SEK 19,250,000 3,395,529
Lebanese Republic
Senior Notes
5.00% due 10/12/2017.............. 1,420,000 1,412,900
Lebanese Republic
Senior Notes
6.60% due 11/27/2026.............. 1,712,000 1,737,680
Lebanese Republic
Senior Notes
8.25% due 04/12/2021.............. 1,000,000 1,145,000
Northern Territory Treasury Corp.
Senior Notes
5.75% due 11/20/2016.............. AUD 1,200,000 1,345,639
Oriental Republic of Uruguay
Senior Notes
7.63% due 03/21/2036.............. 620,000 892,490
Oriental Republic of Uruguay
Senior Notes
7.88% due 01/15/2033.............. 580,000 839,260
Republic of Argentina
Senior Notes
2.50% due 12/31/2038(5)........... 1,144,761 357,738
Republic of Argentina
Senior Notes
8.28% due 12/31/2033.............. 1,915,866 1,034,567
Republic of Argentina
Senior Notes
8.75% due 06/02/2017.............. 440,000 323,400
Republic of Austria
Senior Notes
4.15% due 03/15/2037*............. EUR 310,000 510,136
Republic of Belarus
Bonds
8.75% due 08/03/2015.............. 930,000 967,200
Republic of Belarus
Senior Notes
8.95% due 01/26/2018.............. 550,000 587,125
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------
SOVEREIGN (CONTINUED)
Republic of Bulgaria
Bonds
8.25% due 01/15/2015.... $ 1,400,000 $1,569,750
Republic of Colombia
Senior Notes
4.38% due 07/12/2021.... 1,650,000 1,845,525
Republic of Colombia
Senior Notes
7.38% due 03/18/2019.... 650,000 836,875
Republic of Colombia
Senior Notes
8.13% due 05/21/2024.... 790,000 1,137,205
Republic of Croatia
Notes
5.50% due 04/04/2023*... 690,000 686,951
Republic of Croatia
Senior Notes
6.25% due 04/27/2017.... 700,000 749,805
Republic of Croatia
Senior Notes
6.38% due 03/24/2021.... 470,000 505,485
Republic of Croatia
Senior Notes
6.63% due 07/14/2020.... 390,000 424,125
Republic of Croatia
Senior Notes
6.75% due 11/05/2019.... 680,000 744,661
Republic of El Salvador
Senior Notes
5.88% due 01/30/2025*... 350,000 366,975
Republic of El Salvador
Senior Notes
7.38% due 12/01/2019.... 770,000 913,605
Republic of El Salvador
Senior Notes
7.63% due 02/01/2041.... 900,000 1,032,750
Republic of Hungary
Senior Notes
4.13% due 02/19/2018.... 1,196,000 1,142,180
Republic of Hungary
Senior Notes
4.75% due 02/03/2015.... 400,000 400,600
Republic of Hungary
Senior Notes
6.25% due 01/29/2020.... 570,000 582,113
Republic of Hungary
Senior Notes
6.38% due 03/29/2021.... 990,000 1,019,700
Republic of Hungary
Bonds
6.50% due 06/24/2019.... HUF 280,000,000 1,220,547
Republic of Hungary
Bonds
6.75% due 02/24/2017.... HUF 150,000,000 663,125
Republic of Hungary
Notes
7.00% due 06/24/2022.... HUF 165,000,000 725,933
44
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------
FOREIGN GOVERNMENT AGENCIES (CONTINUED)
SOVEREIGN (CONTINUED)
Republic of Hungary
Bonds
7.50% due 10/24/2013.... HUF 210,000,000 $ 898,294
Republic of Hungary
Senior Notes
7.63% due 03/29/2041.... 752,000 767,040
Republic of Indonesia
Bonds
3.75% due 04/25/2022.... 600,000 609,000
Republic of Indonesia
Senior Notes
4.88% due 05/05/2021.... 1,010,000 1,105,950
Republic of Indonesia
Bonds
5.25% due 01/17/2042.... 900,000 958,500
Republic of Indonesia
Senior Notes
5.88% due 03/13/2020.... 400,000 462,000
Republic of Indonesia
Senior Notes
7.75% due 01/17/2038.... 300,000 417,900
Republic of Indonesia
Senior Notes
8.50% due 10/12/2035.... 390,000 575,250
Republic of Indonesia
Senior Notes
11.63% due 03/04/2019... 850,000 1,232,500
Republic of Ireland
Bonds
4.50% due 04/18/2020.... EUR 510,000 683,033
Republic of Italy
Bonds
5.00% due 03/01/2022.... EUR 1,040,000 1,383,812
Republic of Ivory Coast
Senior Notes
5.75% due 12/31/2032(5). 700,000 647,500
Republic of Latvia
Senior Notes
2.75% due 01/12/2020*... 1,950,000 1,874,925
Republic of Latvia
Senior Notes
5.25% due 06/16/2021.... 540,000 606,150
Republic of Lithuania
Senior Notes
5.13% due 09/14/2017.... 420,000 465,150
Republic of Lithuania
Senior Notes
6.63% due 02/01/2022.... 600,000 735,000
Republic of Panama
Senior Notes
6.70% due 01/26/2036.... 850,000 1,132,625
Republic of Panama
Senior Notes
7.13% due 01/29/2026.... 620,000 835,140
Republic of Peru
Senior Notes
7.13% due 03/30/2019.... 660,000 847,110
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------
SOVEREIGN (CONTINUED)
Republic of Peru
Senior Notes
7.35% due 07/21/2025..... $ 957,000 $1,350,805
Republic of Peru
Senior Bonds
7.84% due 08/12/2020..... PEN 2,400,000 1,167,475
Republic of Peru
Senior Notes
8.20% due 08/12/2026..... PEN 1,800,000 971,027
Republic of Peru
Senior Notes
8.75% due 11/21/2033..... 720,000 1,177,200
Republic of Poland
Senior Notes
3.00% due 03/17/2023..... 2,470,000 2,392,195
Republic of Poland
Bonds
4.75% due 04/25/2017..... PLN 9,300,000 3,004,593
Republic of Poland
Senior Notes
5.00% due 03/23/2022..... 1,050,000 1,199,551
Republic of Poland
Senior Notes
5.13% due 04/21/2021..... 540,000 623,700
Republic of Poland
Bonds
5.25% due 10/25/2020..... PLN 6,400,000 2,168,027
Republic of Poland
Bonds
5.50% due 10/25/2019..... PLN 2,000,000 682,418
Republic of Poland
Bonds
5.75% due 09/23/2022..... PLN 2,150,000 754,664
Republic of Poland
Bonds
6.25% due 10/24/2015..... PLN 4,000,000 1,317,705
Republic of Serbia
Notes
6.75% due 11/01/2024(5).. 440,000 441,100
Republic of Serbia
Senior Notes
7.25% due 09/28/2021..... 1,000,000 1,107,500
Republic of Singapore
Senior Notes
2.25% due 06/01/2021..... SGD 1,900,000 1,636,697
Republic of Slovenia
Senior Notes
5.50% due 10/26/2022*.... 400,000 383,000
Republic of Slovenia
Senior Notes
5.50% due 10/26/2022..... 1,000,000 957,500
Republic of South Africa
Senior Notes
4.67% due 01/17/2024..... 930,000 995,100
Republic of South Africa
Bonds
5.88% due 05/30/2022..... 200,000 234,500
45
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------
FOREIGN GOVERNMENT AGENCIES (CONTINUED)
SOVEREIGN (CONTINUED)
Republic of South Africa
Bonds
6.75% due 03/31/2021........ ZAR 5,000,000 $ 548,822
Republic of South Africa
Senior Notes
8.25% due 09/15/2017........ ZAR 6,000,000 707,652
Republic of South Africa
Bonds
10.50% due 12/21/2026....... ZAR 3,800,000 520,620
Republic of South Africa
Bonds
13.50% due 09/15/2015....... ZAR 8,700,000 1,112,413
Republic of Sri Lanka
Senior Notes
5.88% due 07/25/2022*....... 400,000 415,000
Republic of Sri Lanka
Senior Notes
6.25% due 10/04/2020........ 693,000 738,045
Republic of Sri Lanka
Senior Notes
6.25% due 07/27/2021........ 770,000 815,231
Republic of Sri Lanka
Notes
7.40% due 01/22/2015........ 887,000 944,655
Republic of the Philippines
Senior Notes
4.00% due 01/15/2021........ 1,100,000 1,215,500
Republic of the Philippines
Senior Notes
7.75% due 01/14/2031........ 1,990,000 2,878,038
Republic of the Philippines
Senior Notes
9.38% due 01/18/2017........ 200,000 259,750
Republic of the Philippines
Senior Notes
9.50% due 02/02/2030........ 480,000 786,600
Republic of the Philippines
Senior Notes
9.88% due 01/15/2019........ 300,000 423,750
Republic of the Philippines
Senior Notes
10.63% due 03/16/2025....... 785,000 1,316,837
Republic of Turkey
Senior Notes
3.25% due 03/23/2023........ 750,000 706,875
Republic of Turkey
Bonds
6.00% due 01/14/2041........ 1,000,000 1,120,000
Republic of Turkey
Senior Notes
6.88% due 03/17/2036........ 405,000 499,163
Republic of Turkey
Senior Notes
7.38% due 02/05/2025........ 690,000 881,475
Republic of Turkey
Bonds
8.00% due 01/29/2014........ TRY 2,000,000 1,121,857
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------
SOVEREIGN (CONTINUED)
Republic of Turkey
Bonds
9.00% due 01/27/2016.... TRY 3,500,000 $2,062,863
Republic of Turkey
Bonds
9.50% due 01/12/2022.... TRY 1,000,000 642,443
Republic of Turkey
Senior Notes
11.88% due 01/15/2030... 1,340,000 2,445,500
Republic of Ukraine
Bonds
6.75% due 11/14/2017.... 970,000 957,875
Republic of Ukraine
Senior Notes
7.95% due 02/23/2021.... 460,000 478,860
Republic of Uruguay
Notes
8.00% due 11/18/2022.... 817,594 1,139,726
Republic of Venezuela
Bonds
9.00% due 05/07/2023.... 1,400,000 1,340,500
Republic of Venezuela
Senior Notes
11.75% due 10/21/2026... 900,000 995,850
Republic of Venezuela
Senior Notes
11.95% due 08/05/2031... 880,000 990,000
Republic of Venezuela
Senior Notes
12.75% due 08/23/2022... 1,300,000 1,516,450
Russian Federation
Senior Notes
3.63% due 04/29/2015.... 800,000 835,200
Russian Federation
Senior Notes
4.50% due 04/04/2022.... 800,000 871,600
Russian Federation
Senior Notes
5.63% due 04/04/2042.... 1,200,000 1,347,000
Russian Federation
Senior Notes
7.50% due 03/31/2030(5). 1,338,765 1,658,395
Russian Federation
Bonds
7.85% due 03/10/2018.... RUB 25,000,000 858,258
United Mexican States
Senior Notes
3.63% due 03/15/2022.... 1,720,000 1,827,500
United Mexican States
Senior Notes
4.75% due 03/08/2044.... 654,000 678,525
United Mexican States
Bonds
5.00% due 06/15/2017.... MXN 25,000,000 2,059,993
United Mexican States
Senior Notes
5.13% due 01/15/2020.... 760,000 889,960
46
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------------
FOREIGN GOVERNMENT AGENCIES (CONTINUED)
SOVEREIGN (CONTINUED)
United Mexican States
Bonds
7.25% due 12/15/2016........................ MXN 41,910,000 $ 3,712,813
United Mexican States
Senior Notes Series A
7.50% due 04/08/2033........................ 40,000 57,200
United Mexican States
Senior Notes
8.30% due 08/15/2031........................ 1,100,000 1,669,250
------------
145,891,594
------------
SOVEREIGN AGENCY -- 0.3%
Eskom Holdings SOC, Ltd.
Senior Notes
5.75% due 01/26/2021........................ 400,000 433,000
Financing of Infrastructural Projects State
Enterprise
Government Guar. Bonds
7.40% due 04/20/2018........................ 930,000 892,800
Vnesheconombank Via VEB Finance PLC
Senior Notes
6.03% due 07/05/2022*....................... 690,000 763,312
------------
2,089,112
------------
TOTAL FOREIGN GOVERNMENT AGENCIES
(cost $148,996,780)......................... 149,209,514
------------
U.S. GOVERNMENT AGENCIES -- 10.2%
FEDERAL HOME LOAN MTG. CORP. -- 3.0%
2.50% due 01/01/2028........................ 505,489 525,852
3.00% due 08/01/2027........................ 2,081,686 2,196,055
3.00% due 02/01/2043........................ 1,497,504 1,541,291
3.50% due 02/01/2042........................ 1,118,688 1,180,639
3.50% due 03/01/2042........................ 607,972 641,925
3.50% due 04/01/2042........................ 600,262 632,002
3.50% due 08/01/2042........................ 971,321 1,032,396
4.00% due 09/01/2040........................ 561,621 596,962
4.00% due 02/01/2041........................ 1,496,372 1,590,534
4.50% due 02/01/2020........................ 41,566 44,416
4.50% due 08/01/2020........................ 53,582 57,255
4.50% due 01/01/2039........................ 103,406 110,623
5.00% due 09/01/2018........................ 109,866 117,642
5.00% due 07/01/2020........................ 190,219 204,157
5.00% due 01/01/2024........................ 193,490 207,184
5.00% due 02/01/2034........................ 89,182 96,814
5.00% due 05/01/2034........................ 101,418 113,235
5.00% due 02/01/2036........................ 492,209 534,460
5.00% due 07/01/2038........................ 1,363,264 1,466,304
5.00% due 03/01/2039........................ 407,113 441,827
5.00% due 07/01/2040........................ 627,289 680,583
5.50% due 05/01/2037........................ 288,908 314,254
5.50% due 09/01/2037........................ 268,116 290,381
5.50% due 10/01/2037........................ 1,000,923 1,084,043
5.50% due 11/01/2037........................ 353,397 393,877
5.50% due 01/01/2038........................ 627,263 681,118
5.50% due 04/01/2038........................ 201,787 218,544
5.50% due 06/01/2041........................ 701,430 761,653
6.00% due 03/01/2040........................ 246,258 269,555
6.50% due 05/01/2029........................ 2,187 2,463
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------
FEDERAL HOME LOAN MTG. CORP. (CONTINUED)
6.50% due 02/01/2035.................. $ 72,827 $ 83,157
6.50% due 11/01/2037.................. 1,132,432 1,288,488
Federal Home Loan Mtg. Corp. REMIC
Series 41, Class F
10.00% due 05/15/2020(1).............. 2,081 2,194
Series 1103, Class N IO
11.57% due 06/15/2021(1)(8)........... 1,874 401
Series 3572, Class JS FRS
6.60% due 09/15/2039(1)(8)............ 4,951,230 822,478
-----------
20,224,762
-----------
FEDERAL NATIONAL MTG. ASSOC. -- 6.7%
2.50% due 03/01/2028.................. 994,362 1,034,565
3.00% due 10/01/2027.................. 1,720,864 1,812,177
3.00% due 11/01/2027.................. 785,003 826,657
3.00% due 03/01/2042.................. 86,762 89,560
3.00% due 06/01/2042.................. 769,931 794,759
3.00% due 12/01/2042.................. 1,924,146 1,986,195
3.50% due 08/01/2027.................. 577,795 615,254
3.50% due 12/01/2041.................. 1,532,170 1,618,930
3.50% due 01/01/2042.................. 926,141 978,584
3.50% due 04/01/2042.................. 925,265 977,658
3.50% due 05/01/2042.................. 1,222,416 1,291,635
3.50% due 07/01/2042.................. 1,203,345 1,271,484
4.00% due 06/01/2039.................. 666,831 734,056
4.00% due 09/01/2040.................. 1,479,539 1,578,067
4.00% due 10/01/2040.................. 879,511 938,081
4.00% due 12/01/2040.................. 2,286,147 2,463,752
4.00% due 03/01/2041.................. 1,236,512 1,318,856
4.00% due 08/01/2041.................. 1,596,189 1,702,984
4.00% due 11/01/2041.................. 905,433 966,012
4.50% due 06/01/2019.................. 81,221 87,538
4.50% due 11/01/2022.................. 178,924 192,839
4.50% due 06/01/2023.................. 94,098 101,269
4.50% due 10/01/2024.................. 401,570 432,109
4.50% due 03/01/2025.................. 555,170 597,391
4.50% due 05/01/2025.................. 455,007 489,611
4.50% due 01/01/2039.................. 1,009,843 1,088,180
4.50% due 07/01/2040.................. 1,436,592 1,570,928
4.50% due 08/01/2040.................. 1,925,330 2,113,655
4.50% due 07/01/2041.................. 1,991,274 2,149,477
4.50% due 10/01/2041.................. 2,708,556 2,923,745
5.00% due 06/01/2019.................. 54,751 59,154
5.00% due 01/01/2023.................. 35,287 38,086
5.00% due 03/01/2034.................. 80,821 87,914
5.00% due 04/01/2035.................. 1,384,205 1,505,698
5.00% due 05/01/2035.................. 52,759 57,426
5.00% due 05/01/2040.................. 260,200 284,095
5.00% due 07/01/2040.................. 822,511 903,442
5.00% due 08/01/2040.................. 969,006 1,064,352
5.50% due 11/01/2019.................. 366,721 401,556
5.50% due 08/01/2020.................. 92,910 101,735
5.50% due 11/01/2022.................. 129,644 141,959
5.50% due 08/01/2023.................. 94,158 103,102
5.50% due 06/01/2038.................. 147,226 161,538
6.00% due 02/01/2032.................. 11,416 12,791
6.00% due 05/01/2034.................. 5,801 6,469
6.00% due 10/01/2034.................. 138,058 152,769
47
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
FEDERAL NATIONAL MTG. ASSOC. (CONTINUED)
6.00% due 07/01/2037.................. $ 541,674 $ 594,041
6.00% due 10/01/2037.................. 49,908 54,726
6.00% due 11/01/2037.................. 476,554 522,626
6.00% due 11/01/2038.................. 852,962 935,424
6.00% due 04/01/2040.................. 412,389 452,419
6.00% due 06/01/2040.................. 567,372 622,224
6.50% due 02/01/2035.................. 40,221 47,588
6.50% due 09/01/2037.................. 224,045 251,447
6.50% due 10/01/2037.................. 179,196 202,090
6.50% due 10/01/2038.................. 866,273 968,647
6.50% due 02/01/2039.................. 110,075 123,083
7.50% due 01/01/2030.................. 1,649 1,721
7.50% due 09/01/2030.................. 1,656 1,779
8.00% due 11/01/2028.................. 8,705 10,482
13.00% due 11/15/2015................. 49 49
Federal National Mtg. Assoc. REMIC
Series 2010-112, Class AB
4.00% due 11/25/2035(1).............. 127,239 127,255
Series 1989-2, Class D
8.80% due 01/25/2019(1).............. 12,841 14,452
Series 1989-17, Class E
10.40% due 04/25/2019(1)............. 270 281
-----------
44,758,428
-----------
GOVERNMENT NATIONAL MTG. ASSOC. -- 0.4%
5.00% due 04/15/2040.................. 2,333,981 2,585,321
-----------
SOVEREIGN AGENCY -- 0.1%
Tennessee Valley Authority
Senior Notes
3.50% due 12/15/2042.................. 443,000 427,099
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $65,880,641) 67,995,610
-----------
U.S. GOVERNMENT TREASURIES -- 0.8%
UNITED STATES TREASURY BONDS -- 0.1%
3.00% due 05/15/2042.................. 793,000 776,396
-----------
UNITED STATES TREASURY NOTES -- 0.7%
0.25% due 02/28/2014.................. 358,000 358,294
0.50% due 07/31/2017.................. 314,000 312,209
0.63% due 05/31/2017.................. 235,000 235,294
0.63% due 08/31/2017.................. 365,000 364,629
0.75% due 10/31/2017.................. 56,000 56,162
0.75% due 02/28/2018.................. 781,000 780,817
1.00% due 03/31/2017.................. 242,000 246,216
1.38% due 11/30/2015.................. 105,000 107,904
1.88% due 06/30/2015.................. 750,000 776,777
2.00% due 01/31/2016.................. 120,000 125,578
2.00% due 02/15/2022.................. 100,000 102,805
2.00% due 02/15/2023.................. 340,000 344,303
2.38% due 08/31/2014.................. 700,000 721,356
-----------
4,532,344
-----------
TOTAL U.S. GOVERNMENT TREASURIES
(cost $5,367,425) 5,308,740
-----------
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------
LOANS (10)(15)(16) -- 0.6%
CASINO HOTELS -- 0.2%
Tropicana Entertainment
BTL
5.50% due 03/16/2018.................... $ 990,000 $1,002,375
Twin River Management Group, Inc.
BTL
1.00% due 09/27/2018.................... 272,963 275,579
----------
1,277,954
----------
COMMUNICATIONS SOFTWARE -- 0.1%
CompuCom Systems, Inc.
BTL
10.25% due 10/01/2019................... 800,000 820,000
----------
GAMBLING (NON-HOTEL) -- 0.0%
Northfield Park Associates
BTL
9.00% due 10/23/2018.................... 262,500 269,719
----------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC
Escrow Loan
16.50% due 08/30/2011+(9)............... 1,720,938 0
----------
MEDICAL-HOSPITALS -- 0.0%
Ardent Health
BTL
6.75% due 03/15/2018.................... 239,400 243,889
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.1%
Sabine Oil & Gas, LLC
BTL
8.75% due 12/31/2018.................... 647,315 667,543
----------
PHARMACY SERVICES -- 0.2%
Aptalis Pharma, Inc.
BTL
5.50% due 02/17/2017.................... 1,089,000 1,099,890
----------
TOTAL LOANS
(cost $4,234,404) 4,378,995
----------
MUNICIPAL BONDS & NOTES -- 0.3%
Ohio State University
Revenue Bonds
4.80% due 06/01/2111.................... 616,000 654,463
Port Authority of New York & New Jersey
Revenue Bonds
4.50% due 10/01/2062.................... 725,000 723,992
Port Authority of New York & New Jersey
Revenue Bonds
4.90% due 10/01/2051.................... 554,000 614,824
----------
TOTAL MUNICIPAL BONDS & NOTES
(cost $1,888,886) 1,993,279
----------
COMMON STOCK -- 0.0%
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC+(9)(10)(11)
(cost $0)............................... 128,418 0
----------
48
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
PREFERRED STOCK -- 0.2%
BANKS-COMMERCIAL -- 0.2%
City National Corp.
Series C
5.50%...................................... 14,337 $ 356,991
Zions Bancorporation FRS
Series G
6.30%...................................... 25,725 688,144
------------
1,045,135
------------
FINANCE-INVESTMENT BANKER/BROKER -- 0.0%
Lehman Brothers Holdings Capital Trust VII
Escrow Security
0.00%+(10)................................. 222,000 22
------------
FINANCE-MORTGAGE LOAN/BANKER -- 0.0%
Federal Home Loan Mtg. Corp. FRS
Series Z
8.38%...................................... 11,300 37,516
------------
INSURANCE-PROPERTY/CASUALTY -- 0.0%
Hanover Insurance Group, Inc.
6.35%...................................... 1,405 36,066
------------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC
Class C+(9)(10)............................ 39,177 0
------------
SAVINGS & LOANS/THRIFTS -- 0.0%
Astoria Financial Corp.
Series C
6.50%...................................... 3,775 94,300
------------
TOTAL PREFERRED STOCK
(cost $1,303,459) 1,213,039
------------
WARRANTS + -- 0.0%
OIL-FIELD SERVICES -- 0.0%
Green Field Energy Services, Inc.
Expires 11/15/2021*........................ 1,065 53,250
------------
PUBLISHING-PERIODICALS -- 0.0%
Reader's Digest Assoc., Inc.
Expires 02/19/2014(9)(10).................. 6,739 0
------------
TELEVISION -- 0.0%
ION Media Networks, Inc.
Expires 12/18/2016
(strike price $500.00)(9)(10)(17).......... 330 115,500
ION Media Networks, Inc.
Expires 12/18/2016
(strike price $687.00)(9)(10)(17).......... 325 65,000
------------
180,500
------------
TOTAL WARRANTS
(cost $6,978).............................. 233,750
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $641,174,380)........................ 654,051,829
------------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------
SHORT-TERM INVESTMENT SECURITIES -- 0.6%
TIME DEPOSITS -- 0.6%
Euro Time Deposit with State Street
Bank and Trust Co.
0.01% due 04/01/2013
(cost $3,806,000)................... $3,806,000 $ 3,806,000
------------
REPURCHASE AGREEMENT -- 0.5%
State Street Bank and Trust Co.
Joint Repurchase Agreement(19)
(cost $3,387,000)................... 3,387,000 3,387,000
------------
TOTAL INVESTMENTS
(cost $648,367,380)(20)............. 99.5% 661,244,829
Other assets less liabilities.......... 0.5 3,255,267
---------- ------------
NET ASSETS 100.0% $664,500,096
========== ============
--------
* 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 March 31, 2013, the
aggregate value of these securities was $184,242,830 representing 27.7% 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) Collateralized Mortgage Obligation
(2) Commercial Mortgage Backed Security
(3) Perpetual maturity -- maturity date reflects the next call date.
(4) PIK ("Payment-in-Kind") security -- Income may be paid in additional
securities or cash at the discretion of the issuer.
(5) "Step-up" security where the rate increases ("steps-up") at a
predetermined rate. Rate shown reflects the increased rate.
(6) Security in default of principal and interest at maturity.
(7) Company has filed for Chapter 7 bankruptcy.
(8) Interest Only
(9) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(10) Illiquid security. At March 31, 2013, the aggregate value of these
securities was $4,876,749 representing 0.7% of net assets.
(11) Consists of more than one type of securities traded together as a unit.
(12) Security in default
(13) Company has filed for Chapter 11 bankruptcy protection.
(14) Company has filed for bankruptcy protection in country of issuance.
(15) 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.
(16) 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.
49
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
(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 than securities for which secondary markets exist. As of
March 31, 2013, 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
---- ----------- --------- ----------- -------- ------- ------
ION Media
Networks, Inc.
Expires 12/18/2016
(strike price
$500.00)
Warrant............ 03/15/2011 330 $-- $115,500 $350.00 0.00%
ION Media
Networks, Inc.
Expires 12/18/2016
(strike price
$687.00)
Warrant............ 03/15/2011 325 -- 65,000 200.00 0.00
-------- ----
$180,500 0.00%
======== ====
(18) Security currently paying interest/dividends in the form of additional
securities.
(19) See Note 2 for details of Joint Repurchase Agreements.
(20) See Note 5 for cost of investments on a tax basis.
BTL -- Bank Term Loan
REMIC-- Real Estate Mortgage Investment Conduit
FRS -- Floating Rate Security
VRS -- Variable Rate Security
The rates shown on FRS and VRS are the current rates at March 31, 2013 and
unless noted otherwise the dates are the original maturity dates.
AUD --Australian Dollar
BRL --Brazilian Real
CAD --Canadian Dollar
COP --Columbian Peso
EUR -- Euro
HUF --Hungarian Forint
MXN --Mexican Peso
MYR --Malaysian Ringgit
NOK --Norwegian Krone
NZD --New Zealand Dollar
PEN --Peruvian Nuevo Sol
PLN --Polish Zloty
RUB --Russian Ruble
SEK --Swedish Krona
SGD --Singapore Dollar
TRY --New Turkish Lira
ZAR --South African Rand
50
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2013 (see Note 2):
LEVEL 1 --UNADJUSTED LEVEL 2 -- OTHER LEVEL 3 --SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
- -------------------- ----------------- --------------------- ------------
ASSETS:
Long-Term Investment Securities:
Asset Backed Securities............ $ -- $ 14,858,569 $ -- $ 14,858,569
U.S. Corporate Bonds & Notes:
Electric-Generation............... -- 1,988,900 411,041 2,399,941
Electric-Integrated............... -- 4,879,943 487,601 5,367,544
Gambling (Non-Hotel).............. -- -- 317,044 317,044
Non-Ferrous Metals................ -- -- 0 0
Recycling......................... -- -- 124 124
Rubber/Plastic Products........... -- -- 0 0
Other Industries*................. -- 306,156,778 -- 306,156,778
Foreign Corporate Bonds & Notes:
Banks-Commercial.................. -- 14,083,237 1,531,431 15,614,668
Independent Power Producers....... -- 542,500 0 542,500
Special Purpose Entities.......... -- 944,955 0 944,955
Other Industries*................. -- 77,516,779 -- 77,516,779
Foreign Government Agencies:
Sovereign......................... -- 145,891,594 -- 145,891,594
Other Government Agencies*........ -- 3,317,920 -- 3,317,920
U.S. Government Agencies:
Federal National Mtg. Assoc....... -- 44,758,428 -- 44,758,428
Other Government Agencies*........ -- 23,237,182 -- 23,237,182
U.S. Government Treasuries......... -- 5,308,740 -- 5,308,740
Loans:
Medical-Drugs..................... -- -- 0 0
Other Industries*................. -- 4,378,995 -- 4,378,995
Municipal Bond & Notes............. -- 1,993,279 -- 1,993,279
Common Stock....................... -- -- 0 0
Preferred Stock:
Finance-Investment Banker/Broker.. -- 22 -- 22
Medical-Drugs..................... -- -- 0 0
Other Industries*................. 1,213,017 -- -- 1,213,017
Warrants:
Oil-Field Services................ -- 53,250 -- 53,250
Other Industries*................. -- -- 180,500 180,500
Short Term Investment Securities:
Time Deposits..................... -- 3,806,000 -- 3,806,000
Repurchase Agreement................. -- 3,387,000 -- 3,387,000
---------- ------------ ---------- ------------
Total................................ $1,213,017 $657,104,071 $2,927,741 $661,244,829
========== ============ ========== ============
--------
* Sum of all other industries or government agencies each of which
individually has an aggregate market value of less than 5% of net assets.
For a detailed presentation of securities by industry or government agency
classification, please refer to the Portfolio of Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no material transfers between Levels during the
reporting period.
At the beginning and end of the reporting period, Level 3 investments in
securities were not considered a material portion of the Fund.
See Notes to Financial Statements
51
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO PROFILE -- MARCH 31, 2013 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Oil Companies-Exploration & Production. 6.5%
Cable/Satellite TV..................... 6.1
Medical-Hospitals...................... 4.5
Cellular Telecom....................... 4.1
Paper & Related Products............... 3.1
Satellite Telecom...................... 2.8
Pipelines.............................. 2.6
Building-Residential/Commercial........ 2.6
Diversified Banking Institutions....... 2.5
Data Processing/Management............. 2.3
Telephone-Integrated................... 2.1
Telecom Services....................... 2.1
Banks-Commercial....................... 2.0
Chemicals-Diversified.................. 2.0
Television............................. 2.0
Theaters............................... 1.9
Aerospace/Defense-Equipment............ 1.9
Coal................................... 1.7
Electric-Generation.................... 1.4
Electric-Integrated.................... 1.4
Transport-Marine....................... 1.4
Casino Hotels.......................... 1.4
Diversified Financial Services......... 1.4
Electronic Components-Semiconductors... 1.2
Building Products-Wood................. 1.2
Finance-Consumer Loans................. 1.2
Food-Misc./Diversified................. 1.2
Investment Management/Advisor Services. 1.0
Retail-Propane Distribution............ 1.0
Insurance-Multi-line................... 0.9
Building & Construction Products-Misc.. 0.9
Rental Auto/Equipment.................. 0.9
Banks-Mortgage......................... 0.9
Computer Services...................... 0.9
Auto/Truck Parts & Equipment-Original.. 0.9
Real Estate Management/Services........ 0.9
Medical Products....................... 0.9
Office Automation & Equipment.......... 0.9
Machinery-Farming...................... 0.8
Medical Information Systems............ 0.8
Retail-Arts & Crafts................... 0.8
Chemicals-Plastics..................... 0.8
Casino Services........................ 0.8
Enterprise Software/Service............ 0.8
Funeral Services & Related Items....... 0.8
Commercial Services.................... 0.8
Medical-Outpatient/Home Medical........ 0.8
Retail-Discount........................ 0.7
Shipbuilding........................... 0.7
X-Ray Equipment........................ 0.7
Retail-Regional Department Stores...... 0.7
Finance-Other Services................. 0.7
Gambling (Non-Hotel)................... 0.7
Repurchase Agreements.................. 0.6
Diversified Manufacturing Operations... 0.6
Finance-Auto Loans..................... 0.6
Chemicals-Specialty.................... 0.6
Applications Software.................. 0.5
Diversified Minerals................... 0.5
Web Hosting/Design..................... 0.5
Retail-Home Furnishings........ 0.5%
Independent Power Producers.... 0.5
Finance-Leasing Companies...... 0.4
Real Estate Investment Trusts.. 0.4
Oil & Gas Drilling............. 0.4
Finance-Mortgage Loan/Banker... 0.4
Pharmacy Services.............. 0.4
Multimedia..................... 0.4
Rubber-Tires................... 0.4
Computers-Integrated Systems... 0.3
Resorts/Theme Parks............ 0.3
Hotels/Motels.................. 0.3
Telecommunication Equipment.... 0.3
Containers-Metal/Glass......... 0.3
Non-Hazardous Waste Disposal... 0.2
Dialysis Centers............... 0.2
Wireless Equipment............. 0.2
Building Products-Cement....... 0.2
Internet Connectivity Services. 0.2
Advertising Sales.............. 0.2
Medical-Biomedical/Gene........ 0.2
Travel Services................ 0.2
Retail-Perfume & Cosmetics..... 0.2
Retail-Leisure Products........ 0.2
E-Commerce/Services............ 0.2
Radio.......................... 0.2
Agricultural Chemicals......... 0.2
Diagnostic Kits................ 0.1
Agricultural Operations........ 0.1
Medical-Drugs.................. 0.1
Motion Pictures & Services..... 0.1
Aerospace/Defense.............. 0.1
Building & Construction-Misc... 0.1
Home Furnishings............... 0.1
----
98.6%
====
CREDIT QUALITY ALLOCATION+#
Baa................. 1.2%
Ba.................. 36.7
B................... 38.5
Caa................. 17.1
Not Rated@.......... 6.5
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Moody'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.
52
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 2.1%
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.4%
KB Home
Company Guar. Notes
1.38% due 02/01/2019........................ $ 412,000 $ 452,943
----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.4%
Micron Technology, Inc.
Senior Notes
1.63% due 02/15/2033*....................... 226,000 258,770
Micron Technology, Inc.
Senior Notes
2.13% due 02/15/2033*....................... 190,000 215,175
ON Semiconductor Corp.
Company Guar. Notes
2.63% due 12/15/2026........................ 16,000 18,130
----------
492,075
----------
MEDICAL-BIOMEDICAL/GENE -- 0.2%
Exelixis, Inc.
Senior Sub. Notes
4.25% due 08/15/2019........................ 255,000 253,406
----------
MEDICAL-DRUGS -- 0.1%
Savient Pharmaceuticals, Inc.
Senior Notes
4.75% due 02/01/2018........................ 745,000 178,334
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 1.0%
Chesapeake Energy Corp.
Company Guar. Notes
2.50% due 05/15/2037........................ 1,241,000 1,174,990
----------
TOTAL CONVERTIBLE BONDS & NOTES
(cost $2,610,336)........................... 2,551,748
----------
U.S. CORPORATE BONDS & NOTES -- 78.0%
ADVERTISING SALES -- 0.2%
Lamar Media Corp.
Company Guar. Notes
5.88% due 02/01/2022........................ 240,000 259,800
----------
AEROSPACE/DEFENSE -- 0.1%
Esterline Technologies Corp.
Company Guar. Notes
7.00% due 08/01/2020........................ 85,000 93,819
----------
AEROSPACE/DEFENSE-EQUIPMENT -- 1.9%
B/E Aerospace, Inc.
Senior Notes
6.88% due 10/01/2020........................ 815,000 901,594
TransDigm, Inc.
Company Guar. Notes
5.50% due 10/15/2020*....................... 235,000 244,988
TransDigm, Inc.
Company Guar. Notes
7.75% due 12/15/2018........................ 1,025,000 1,124,937
----------
2,271,519
----------
AGRICULTURAL CHEMICALS -- 0.2%
CF Industries, Inc.
Company Guar. Notes
6.88% due 05/01/2018........................ 165,000 197,695
----------
AGRICULTURAL OPERATIONS -- 0.1%
American Rock Salt Co., LLC/
American Rock Capital Corp.
Sec. Notes
8.25% due 05/01/2018*....................... 191,000 181,450
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------------
APPLICATIONS SOFTWARE -- 0.5%
Emdeon, Inc.
Company Guar. Notes
11.00% due 12/31/2019............................. $550,000 $ 633,875
----------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.9%
Tenneco, Inc.
Company Guar. Notes
7.75% due 08/15/2018.............................. 145,000 159,500
TRW Automotive, Inc.
Company Guar. Notes
7.25% due 03/15/2017*............................. 795,000 919,219
----------
1,078,719
----------
BANKS-COMMERCIAL -- 1.2%
CIT Group, Inc.
Senior Notes
5.25% due 03/15/2018.............................. 406,000 438,480
CIT Group, Inc.
Senior Notes
5.38% due 05/15/2020.............................. 550,000 603,625
CIT Group, Inc.
Senior Notes
5.50% due 02/15/2019*............................. 430,000 471,925
----------
1,514,030
----------
BANKS-MORTGAGE -- 0.9%
Provident Funding Associates LP/PFG Finance Corp.
Senior Sec. Notes
10.25% due 04/15/2017*............................ 970,000 1,081,550
----------
BUILDING & CONSTRUCTION PRODUCTS-MISC. -- 0.9%
Associated Materials LLC/AMH New Finance, Inc.
Senior Sec. Notes
9.13% due 11/01/2017.............................. 35,000 37,362
Gibraltar Industries, Inc.
Company Guar. Notes
6.25% due 02/01/2021*............................. 150,000 159,000
Nortek, Inc.
Company Guar. Notes
8.50% due 04/15/2021*............................. 210,000 232,575
Nortek, Inc.
Company Guar. Notes
8.50% due 04/15/2021.............................. 600,000 666,000
Ply Gem Industries, Inc.
Company Guar. Notes
9.38% due 04/15/2017.............................. 65,000 71,500
----------
1,166,437
----------
BUILDING & CONSTRUCTION-MISC. -- 0.1%
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.00% due 02/01/2023*............................. 85,000 87,550
----------
BUILDING PRODUCTS-WOOD -- 1.0%
Masco Corp.
Senior Notes
6.13% due 10/03/2016.............................. 265,000 295,926
53
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
BUILDING PRODUCTS-WOOD (CONTINUED)
Masco Corp.
Senior Notes
7.13% due 03/15/2020.......................... $ 710,000 $ 828,867
Masco Corp.
Senior Notes
7.75% due 08/01/2029.......................... 110,000 123,814
----------
1,248,607
----------
BUILDING-RESIDENTIAL/COMMERCIAL -- 2.2%
K Hovnanian Enterprises, Inc.
Sec. Notes
9.13% due 11/15/2020*......................... 341,000 379,789
KB Home
Company Guar. Notes
7.50% due 09/15/2022.......................... 255,000 286,237
KB Home
Company Guar. Notes
8.00% due 03/15/2020.......................... 681,000 784,852
Lennar Corp.
Company Guar. Notes
4.75% due 11/15/2022*......................... 890,000 872,200
Pulte Homes, Inc.
Company Guar. Notes
6.38% due 05/15/2033.......................... 135,000 135,675
Ryland Group, Inc.
Company Guar. Notes
5.38% due 10/01/2022.......................... 175,000 178,938
----------
2,637,691
----------
CABLE/SATELLITE TV -- 4.7%
CCO Holdings LLC/CCO Holdings
Capital Corp.
Company Guar. Notes
5.25% due 09/30/2022.......................... 960,000 943,200
CCO Holdings LLC/CCO Holdings
Capital Corp.
Company Guar. Notes
6.63% due 01/31/2022.......................... 580,000 622,050
CCO Holdings LLC/CCO Holdings
Capital Corp.
Company Guar. Notes
7.38% due 06/01/2020.......................... 570,000 631,987
CSC Holdings LLC
Senior Notes
6.75% due 11/15/2021.......................... 495,000 555,019
DISH DBS Corp.
Company Guar. Notes
5.00% due 03/15/2023*......................... 520,000 511,550
DISH DBS Corp.
Company Guar. Notes
6.75% due 06/01/2021.......................... 1,875,000 2,081,250
Harron Communications LP/Harron Finance Corp.
Senior Notes
9.13% due 04/01/2020*......................... 330,000 366,300
----------
5,711,356
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------
CASINO HOTELS -- 1.4%
Caesars Entertainment Operating Co., Inc.
Senior Sec. Notes
8.50% due 02/15/2020...................... $ 500,000 $ 493,750
Caesars Entertainment Operating Co., Inc.
Senior Sec. Notes
11.25% due 06/01/2017..................... 550,000 585,063
Wynn Las Vegas LLC/Wynn Las
Vegas Capital Corp.
1st. Mtg. Notes
5.38% due 03/15/2022...................... 570,000 597,787
----------
1,676,600
----------
CASINO SERVICES -- 0.5%
Greektown Superholdings, Inc.
Sec. Notes, Series A
13.00% due 07/01/2015..................... 620,000 664,950
Greektown, Inc. LLC
Escrow Notes
10.75% due 12/01/2013+(1)(2).............. 489,000 0
----------
664,950
----------
CELLULAR TELECOM -- 4.0%
MetroPCS Wireless, Inc.
Company Guar. Notes
6.63% due 11/15/2020...................... 645,000 674,025
MetroPCS Wireless, Inc.
Company Guar. Notes
7.88% due 09/01/2018...................... 770,000 841,225
NII Capital Corp.
Company Guar. Notes
7.63% due 04/01/2021...................... 520,000 374,400
NII Capital Corp.
Company Guar. Notes
8.88% due 12/15/2019...................... 380,000 285,950
Sprint Nextel Corp.
Company Guar. Notes
7.00% due 03/01/2020*..................... 395,000 460,175
Sprint Nextel Corp.
Company Guar. Notes
9.00% due 11/15/2018*..................... 910,000 1,124,987
Syniverse Holdings, Inc.
Company Guar. Notes
9.13% due 01/15/2019...................... 1,000,000 1,097,500
----------
4,858,262
----------
CHEMICALS-DIVERSIFIED -- 0.9%
Celanese US Holdings LLC
Company Guar. Notes
6.63% due 10/15/2018...................... 395,000 427,094
Momentive Performance Materials, Inc.
Senior Sec. Notes
8.88% due 10/15/2020...................... 275,000 283,250
Momentive Performance Materials, Inc.
Sec. Notes
9.00% due 01/15/2021...................... 471,000 353,250
----------
1,063,594
----------
54
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
CHEMICALS-PLASTICS -- 0.8%
Hexion US Finance Corp.
Senior Sec. Notes
6.63% due 04/15/2020......................... $ 230,000 $ 230,575
Hexion US Finance Corp./Hexion
Nova Scotia Finance ULC
Senior Sec. Notes
8.88% due 02/01/2018......................... 390,000 403,650
Hexion US Finance Corp./Hexion
Nova Scotia Finance ULC
Sec. Notes
9.00% due 11/15/2020......................... 355,000 337,250
----------
971,475
----------
CHEMICALS-SPECIALTY -- 0.6%
Ferro Corp.
Senior Notes
7.88% due 08/15/2018......................... 675,000 700,313
----------
COAL -- 1.3%
Peabody Energy Corp.
Company Guar. Notes
6.00% due 11/15/2018......................... 875,000 929,687
Peabody Energy Corp.
Company Guar. Notes
6.50% due 09/15/2020......................... 641,000 682,665
----------
1,612,352
----------
COMMERCIAL SERVICES -- 0.8%
Iron Mountain, Inc.
Company Guar. Notes
5.75% due 08/15/2024......................... 380,000 379,525
Iron Mountain, Inc.
Company Guar. Notes
7.75% due 10/01/2019......................... 500,000 555,625
----------
935,150
----------
COMPUTER SERVICES -- 0.9%
SunGard Data Systems, Inc.
Company Guar. Notes
6.63% due 11/01/2019*........................ 180,000 185,850
SunGard Data Systems, Inc.
Company Guar. Notes
7.38% due 11/15/2018......................... 556,000 594,920
SunGard Data Systems, Inc.
Company Guar. Notes
7.63% due 11/15/2020......................... 275,000 298,031
----------
1,078,801
----------
COMPUTERS-INTEGRATED SYSTEMS -- 0.3%
NCR Corp.
Company Guar. Notes
4.63% due 02/15/2021*........................ 405,000 402,975
----------
DATA PROCESSING/MANAGEMENT -- 2.3%
Fidelity National Information Services, Inc.
Company Guar. Notes
5.00% due 03/15/2022......................... 345,000 366,131
First Data Corp.
Senior Sec. Notes
7.38% due 06/15/2019*........................ 1,115,000 1,186,081
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT (CONTINUED)
First Data Corp.
Sec. Notes
8.25% due 01/15/2021*........................ $ 934,000 $ 971,360
First Data Corp.
Sec. Notes
8.75% due 01/15/2022*(3)..................... 285,000 301,388
----------
2,824,960
----------
DIAGNOSTIC KITS -- 0.1%
Alere, Inc.
Company Guar. Notes
9.00% due 05/15/2016......................... 175,000 183,969
----------
DIALYSIS CENTERS -- 0.2%
Fresenius Medical Care U.S. Finance II, Inc.
Company Guar. Notes
5.63% due 07/31/2019*........................ 200,000 219,500
Fresenius Medical Care U.S. Finance, Inc.
Company Guar. Notes
6.50% due 09/15/2018*........................ 65,000 74,100
----------
293,600
----------
DIVERSIFIED BANKING INSTITUTIONS -- 1.1%
Ally Financial, Inc.
Sub. Notes
8.00% due 12/31/2018......................... 270,000 322,987
Ally Financial, Inc.
Company Guar. Notes
8.00% due 03/15/2020......................... 875,000 1,085,000
----------
1,407,987
----------
DIVERSIFIED FINANCIAL SERVICES -- 0.6%
Community Choice Financial, Inc.
Senior Sec. Notes
10.75% due 05/01/2019........................ 725,000 686,938
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.6%
JM Huber Corp.
Senior Notes
9.88% due 11/01/2019*........................ 675,000 764,438
----------
E-COMMERCE/SERVICES -- 0.2%
IAC/InterActiveCorp.
Company Guar. Notes
4.75% due 12/15/2022*........................ 235,000 229,713
----------
ELECTRIC-GENERATION -- 1.4%
AES Corp.
Senior Notes
8.00% due 10/15/2017......................... 1,490,000 1,752,612
----------
ELECTRIC-INTEGRATED -- 0.4%
DPL, Inc.
Senior Notes
7.25% due 10/15/2021......................... 300,000 318,000
Texas Competitive Electric Holdings
Co. LLC/TCEH Finance, Inc.
Senior Sec. Notes
11.50% due 10/01/2020*....................... 295,000 220,513
----------
538,513
----------
55
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.8%
Freescale Semiconductor, Inc.
Company Guar. Notes
8.05% due 02/01/2020...................... $305,000 $ 322,538
Freescale Semiconductor, Inc.
Senior Sec. Notes
9.25% due 04/15/2018*..................... 535,000 587,162
Freescale Semiconductor, Inc.
Company Guar. Notes
10.75% due 08/01/2020..................... 111,000 125,985
----------
1,035,685
----------
ENTERPRISE SOFTWARE/SERVICE -- 0.8%
Infor US, Inc.
Company Guar. Notes
9.38% due 04/01/2019...................... 426,000 482,977
Infor US, Inc.
Company Guar. Notes
11.50% due 07/15/2018..................... 394,000 462,950
----------
945,927
----------
FINANCE-AUTO LOANS -- 0.6%
Credit Acceptance Corp.
Senior Sec. Notes
9.13% due 02/01/2017...................... 685,000 744,938
----------
FINANCE-CONSUMER LOANS -- 1.2%
SLM Corp.
Senior Notes
8.00% due 03/25/2020...................... 211,000 244,760
SLM Corp.
Senior Notes
8.45% due 06/15/2018...................... 484,000 573,540
TMX Finance LLC/TitleMax Finance Corp.
Senior Sec. Notes
13.25% due 07/15/2015..................... 580,000 635,100
----------
1,453,400
----------
FINANCE-LEASING COMPANIES -- 0.4%
Air Lease Corp.
Senior Notes
6.13% due 04/01/2017...................... 475,000 514,188
----------
FINANCE-MORTGAGE LOAN/BANKER -- 0.4%
Ladder Capital Finance Holdings LLP
Senior Notes
7.38% due 10/01/2017*..................... 470,000 491,150
----------
FINANCE-OTHER SERVICES -- 0.7%
CNH Capital LLC
Company Guar. Notes
6.25% due 11/01/2016...................... 185,000 204,425
Nationstar Mortgage LLC/Nationstar
Capital Corp.
Company Guar. Notes
6.50% due 07/01/2021*..................... 610,000 635,925
----------
840,350
----------
FOOD-MISC./DIVERSIFIED -- 0.5%
ARAMARK Corp.
Company Guar. Notes
5.75% due 03/15/2020*..................... 580,000 593,050
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
FUNERAL SERVICES & RELATED ITEMS -- 0.8%
Service Corp. International
Senior Notes
7.63% due 10/01/2018........................ $802,000 $ 941,348
----------
GAMBLING (NON-HOTEL) -- 0.5%
Isle of Capri Casinos, Inc.
Company Guar. Notes
8.88% due 06/15/2020........................ 515,000 560,063
----------
HOME FURNISHINGS -- 0.1%
Tempur-Pedic International, Inc.
Company Guar. Notes
6.88% due 12/15/2020*....................... 75,000 80,063
----------
HOTEL/MOTELS -- 0.3%
Choice Hotels International, Inc.
Company Guar. Notes
5.75% due 07/01/2022........................ 285,000 316,350
----------
INDEPENDENT POWER PRODUCERS -- 0.5%
Calpine Corp.
Senior Sec. Notes
7.50% due 02/15/2021*....................... 554,000 608,015
----------
INSURANCE-MULTI-LINE -- 0.5%
Hartford Financial Services Group, Inc. FRS
Jr. Sub. Debentures
8.13% due 06/15/2038........................ 560,000 664,300
----------
INTERNET CONNECTIVITY SERVICES -- 0.2%
Zayo Group LLC/Zayo Capital, Inc.
Senior Sec. Notes
8.13% due 01/01/2020........................ 135,000 151,200
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
10.13% due 07/01/2020....................... 95,000 111,863
----------
263,063
----------
INVESTMENT MANAGEMENT/ADVISOR SERVICES -- 1.0%
Nuveen Investments, Inc.
Senior Notes
9.13% due 10/15/2017*....................... 555,000 573,037
Nuveen Investments, Inc.
Senior Notes
9.50% due 10/15/2020*....................... 590,000 616,550
----------
1,189,587
----------
MACHINERY-FARMING -- 0.8%
Case New Holland, Inc.
Company Guar. Notes
7.88% due 12/01/2017........................ 870,000 1,017,900
----------
MEDICAL INFORMATION SYSTEMS -- 0.8%
IMS Health, Inc.
Senior Notes
12.50% due 03/01/2018*...................... 840,000 1,008,000
----------
MEDICAL PRODUCTS -- 0.9%
Biomet, Inc.
Company Guar. Notes
6.50% due 08/01/2020*....................... 275,000 291,844
Biomet, Inc.
Company Guar. Notes
6.50% due 10/01/2020*....................... 745,000 765,953
----------
1,057,797
----------
56
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
MEDICAL-HOSPITALS -- 4.5%
CHS/Community Health Systems, Inc.
Senior Sec. Notes
5.13% due 08/15/2018.................. $ 320,000 $ 335,200
HCA Holdings, Inc.
Senior Notes
6.25% due 02/15/2021.................. 360,000 383,850
HCA, Inc.
Senior Sec. Notes
6.50% due 02/15/2020.................. 2,030,000 2,290,094
HCA, Inc.
Senior Notes
7.50% due 11/15/2095.................. 380,000 342,000
HCA, Inc.
Senior Sec. Notes
7.88% due 02/15/2020.................. 550,000 607,750
Health Management Associates, Inc.
Company Guar. Notes
7.38% due 01/15/2020.................. 555,000 609,112
Tenet Healthcare Corp.
Senior Sec. Notes
4.50% due 04/01/2021*................. 100,000 98,000
Tenet Healthcare Corp.
Senior Sec. Notes
6.25% due 11/01/2018.................. 770,000 854,700
----------
5,520,706
----------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.8%
Radiation Therapy Services, Inc.
Sec. Notes
8.88% due 01/15/2017.................. 415,000 404,625
Radiation Therapy Services, Inc.
Company Guar. Notes
9.88% due 04/15/2017.................. 836,000 518,320
----------
922,945
----------
MOTION PICTURES & SERVICES -- 0.1%
NAI Entertainment Holdings LLC
Senior Sec. Notes
8.25% due 12/15/2017*................. 153,000 166,005
----------
MULTIMEDIA -- 0.4%
NBCUniversal Enterprise, Inc.
Jr. Sub. Notes
5.25% due 03/19/2021*(15)............. 445,000 449,699
----------
NON-FERROUS METALS -- 0.0%
Renco Metals, Inc.
Company Guar. Notes
11.50% due 07/01/2003+(1)(2)(5)(11)... 2,150,000 0
----------
NON-HAZARDOUS WASTE DISPOSAL -- 0.2%
Casella Waste Systems, Inc.
Company Guar. Notes
7.75% due 02/15/2019.................. 320,000 304,800
----------
OFFICE AUTOMATION & EQUIPMENT -- 0.9%
CDW LLC/CDW Finance Corp.
Company Guar. Notes
8.50% due 04/01/2019.................. 941,000 1,050,391
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-----------------------------------------------------------------------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 4.7%
Antero Resources Finance Corp.
Company Guar. Notes
6.00% due 12/01/2020*........................... $350,000 $ 365,750
Antero Resources Finance Corp.
Company Guar. Notes
7.25% due 08/01/2019............................ 310,000 335,963
Antero Resources Finance Corp.
Company Guar. Notes
9.38% due 12/01/2017............................ 535,000 580,475
Continental Resources, Inc.
Company Guar. Notes
5.00% due 09/15/2022............................ 330,000 350,625
Denbury Resources, Inc.
Company Guar. Notes
4.63% due 07/15/2023............................ 525,000 506,625
Endeavour International Corp.
Senior Sec. Notes
12.00% due 03/01/2018........................... 565,000 543,812
EP Energy LLC
Senior Notes
9.38% due 05/01/2020............................ 964,000 1,113,420
EP Energy LLC/Everest Acquisition Finance, Inc.
Senior Sec. Notes
6.88% due 05/01/2019............................ 50,000 54,750
EPE Holdings LLC/EP Energy Bond Co., Inc.
Senior Notes
8.88% due 12/15/2017*(3)........................ 270,000 283,500
Newfield Exploration Co.
Senior Notes
5.75% due 01/30/2022............................ 320,000 342,400
Plains Exploration & Production Co.
Company Guar. Notes
6.75% due 02/01/2022............................ 280,000 311,850
Range Resources Corp.
Company Guar. Notes
6.75% due 08/01/2020............................ 355,000 390,500
Rosetta Resources, Inc.
Company Guar. Notes
9.50% due 04/15/2018............................ 505,000 556,762
----------
5,736,432
----------
PAPER & RELATED PRODUCTS -- 0.8%
Boise Cascade LLC/Boise Cascade
Finance Corp.
Company Guar. Notes
6.38% due 11/01/2020*........................... 170,000 180,412
Clearwater Paper Corp.
Company Guar. Notes
4.50% due 02/01/2023*........................... 90,000 88,200
Clearwater Paper Corp.
Company Guar. Notes
7.13% due 11/01/2018............................ 160,000 174,000
Neenah Paper, Inc.
Company Guar. Notes
7.38% due 11/15/2014............................ 393,000 393,982
PH Glatfelter Co.
Company Guar. Notes
5.38% due 10/15/2020............................ 105,000 109,988
----------
946,582
----------
57
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
PHARMACY SERVICES -- 0.4%
BioScrip, Inc.
Company Guar. Notes
10.25% due 10/01/2015....................... $ 440,000 $ 464,200
----------
PIPELINES -- 2.6%
El Paso LLC
Senior Sec. Notes
6.50% due 09/15/2020........................ 545,000 602,118
El Paso LLC
Senior Sec. Notes
7.00% due 06/15/2017........................ 785,000 897,826
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020........................ 681,000 784,852
Kinder Morgan Finance Co. LLC
Senior Sec. Notes
6.00% due 01/15/2018*....................... 535,000 592,040
MarkWest Energy Partners LP/MarkWest Energy
Finance Corp.
Company Guar. Notes
6.25% due 06/15/2022........................ 283,000 304,932
----------
3,181,768
----------
RADIO -- 0.2%
Sirius XM Radio, Inc.
Company Guar. Notes
5.25% due 08/15/2022*....................... 200,000 204,500
----------
REAL ESTATE INVESTMENT TRUSTS -- 0.4%
Felcor Lodging LP
Senior Sec. Notes
5.63% due 03/01/2023*....................... 140,000 142,625
Felcor Lodging LP
Senior Sec. Notes
6.75% due 06/01/2019........................ 330,000 358,050
----------
500,675
----------
REAL ESTATE MANAGEMENT/SERVICES -- 0.9%
CBRE Services, Inc.
Company Guar. Notes
5.00% due 03/15/2023........................ 590,000 596,637
Realogy Group LLC
Senior Sec. Notes
7.63% due 01/15/2020*....................... 418,000 471,295
----------
1,067,932
----------
RECYCLING -- 0.0%
Aleris International, Inc.
Escrow Notes
9.00% due 12/15/2014+(1)(2)................. 2,145,000 81
----------
RENTAL AUTO/EQUIPMENT -- 0.9%
HDTFS, Inc.
Company Guar. Notes
6.25% due 10/15/2022........................ 140,000 151,900
Hertz Corp.
Company Guar. Notes
5.88% due 10/15/2020........................ 215,000 226,825
United Rentals North America, Inc.
Sec. Notes
5.75% due 07/15/2018........................ 100,000 108,375
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
RENTAL AUTO/EQUIPMENT (CONTINUED)
United Rentals North America, Inc.
Company Guar. Notes
7.38% due 05/15/2020........................ $325,000 $ 360,750
United Rentals North America, Inc.
Company Guar. Notes
7.63% due 04/15/2022........................ 225,000 251,437
----------
1,099,287
----------
RESORT/THEME PARKS -- 0.3%
Cedar Fair LP
Company Guar. Notes
5.25% due 03/15/2021*....................... 350,000 347,813
----------
RETAIL-ARTS & CRAFTS -- 0.8%
Michaels Stores, Inc.
Company Guar. Notes
7.75% due 11/01/2018........................ 905,000 988,712
----------
RETAIL-DISCOUNT -- 0.7%
99 Cents Only Stores
Company Guar. Notes
11.00% due 12/15/2019....................... 775,000 889,313
----------
RETAIL-HOME FURNISHINGS -- 0.5%
GRD Holdings III Corp.
Senior Sec. Notes
10.75% due 06/01/2019*...................... 585,000 614,981
----------
RETAIL-LEISURE PRODUCTS -- 0.2%
Party City Holdings, Inc.
Senior Notes
8.88% due 08/01/2020*....................... 210,000 230,475
----------
RETAIL-PERFUME & COSMETICS -- 0.2%
Sally Holdings LLC/Sally Capital, Inc.
Company Guar. Notes
5.75% due 06/01/2022........................ 235,000 245,281
----------
RETAIL-PROPANE DISTRIBUTION -- 1.0%
AmeriGas Finance LLC/AmeriGas Finance Corp.
Company Guar. Notes
6.75% due 05/20/2020........................ 240,000 261,000
AmeriGas Finance LLC/AmeriGas Finance Corp.
Company Guar. Notes
7.00% due 05/20/2022........................ 425,000 462,187
Ferrellgas LP/Ferrellgas Finance Corp.
Senior Notes
6.50% due 05/01/2021........................ 442,000 456,365
----------
1,179,552
----------
RETAIL-REGIONAL DEPARTMENT STORES -- 0.7%
JC Penney Corp., Inc.
Senior Notes
5.65% due 06/01/2020........................ 275,000 222,406
JC Penney Corp., Inc.
Senior Notes
6.38% due 10/15/2036........................ 210,000 157,500
JC Penney Corp., Inc.
Senior Notes
7.13% due 11/15/2023........................ 80,000 75,600
JC Penney Corp., Inc.
Senior Notes
7.40% due 04/01/2037........................ 445,000 354,887
58
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
RETAIL-REGIONAL DEPARTMENT STORES (CONTINUED)
JC Penney Corp., Inc.
Senior Notes
7.95% due 04/01/2017................ $ 45,000 $ 42,413
----------
852,806
----------
RUBBER-TIRES -- 0.4%
Continental Rubber of America Corp.
Senior Sec. Notes
4.50% due 09/15/2019*............... 430,000 439,675
----------
RUBBER/PLASTIC PRODUCTS -- 0.0%
Venture Holdings Co. LLC
Escrow Notes
11.00% due 06/01/2007+(1)(2)........ 550,000 0
----------
SATELLITE TELECOM -- 1.1%
DigitalGlobe, Inc.
Company Guar. Notes
5.25% due 02/01/2021*............... 575,000 571,406
Hughes Satellite Systems Corp.
Senior Sec. Notes
6.50% due 06/15/2019................ 750,000 823,125
----------
1,394,531
----------
SHIPBUILDING -- 0.7%
Huntington Ingalls Industries, Inc.
Company Guar. Notes
6.88% due 03/15/2018................ 455,000 494,812
Huntington Ingalls Industries, Inc.
Company Guar. Notes
7.13% due 03/15/2021................ 361,000 392,588
----------
887,400
----------
TELECOM SERVICES -- 0.3%
GCI, Inc.
Senior Notes
6.75% due 06/01/2021................ 255,000 239,063
Level 3 Communications, Inc.
Senior Notes
8.88% due 06/01/2019*............... 90,000 98,325
----------
337,388
----------
TELEPHONE-INTEGRATED -- 2.1%
Level 3 Financing, Inc.
Company Guar. Notes
7.00% due 06/01/2020*............... 149,000 156,077
Level 3 Financing, Inc.
Company Guar. Notes
8.13% due 07/01/2019................ 66,000 72,600
Level 3 Financing, Inc.
Company Guar. Notes
8.63% due 07/15/2020................ 1,075,000 1,198,625
Windstream Corp.
Company Guar. Notes
6.38% due 08/01/2023*............... 145,000 143,913
Windstream Corp.
Company Guar. Notes
7.75% due 10/15/2020................ 930,000 1,009,050
----------
2,580,265
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------
TELEVISION -- 1.5%
Gray Television, Inc.
Company Guar. Notes
7.50% due 10/01/2020................... $ 595,000 $ 635,162
Sinclair Television Group, Inc.
Sec. Notes
9.25% due 11/01/2017*.................. 540,000 585,225
Univision Communications, Inc.
Senior Sec. Notes
6.75% due 09/15/2022*.................. 520,000 561,600
----------
1,781,987
----------
THEATERS -- 1.9%
AMC Entertainment, Inc.
Company Guar. Notes
8.75% due 06/01/2019................... 1,065,000 1,168,837
AMC Entertainment, Inc.
Company Guar. Notes
9.75% due 12/01/2020................... 315,000 363,431
Cinemark USA, Inc.
Company Guar. Notes
5.13% due 12/15/2022*.................. 105,000 105,525
Regal Cinemas Corp.
Company Guar. Notes
8.63% due 07/15/2019................... 325,000 360,344
Regal Entertainment Group
Senior Notes
5.75% due 02/01/2025................... 78,000 76,635
Regal Entertainment Group
Company Guar. Notes
9.13% due 08/15/2018................... 215,000 241,338
----------
2,316,110
----------
TRANSPORT-MARINE -- 1.4%
ACL I Corp.
Senior Notes
11.38% due 02/15/2016(3)(4)............ 836,718 878,554
Marquette Transportation Co./Marquette
Transportation Finance Corp.
Sec. Notes
10.88% due 01/15/2017.................. 785,000 839,950
----------
1,718,504
----------
WEB HOSTING/DESIGN -- 0.5%
Equinix, Inc.
Senior Notes
4.88% due 04/01/2020................... 35,000 35,263
Equinix, Inc.
Senior Notes
5.38% due 04/01/2023................... 200,000 202,500
Equinix, Inc.
Senior Notes
7.00% due 07/15/2021................... 350,000 388,500
----------
626,263
----------
WIRELESS EQUIPMENT -- 0.2%
SBA Communications Corp.
Senior Notes
5.63% due 10/01/2019*.................. 280,000 288,050
----------
59
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
X-RAY EQUIPMENT -- 0.6%
Hologic, Inc.
Senior Notes
2.00% due 03/01/2042................... $ 625,000 $ 654,687
Hologic, Inc.
Company Guar. Notes
6.25% due 08/01/2020................... 70,000 74,463
-----------
729,150
-----------
TOTAL U.S. CORPORATE BONDS & NOTES
(cost $92,842,383)..................... 95,200,733
-----------
FOREIGN CONVERTIBLE BONDS & NOTES -- 0.2%
BUILDING PRODUCTS-CEMENT -- 0.2%
Cemex SAB de CV
Sub. Notes
3.75% due 03/15/2018
(cost $276,891)........................ 206,000 278,873
-----------
FOREIGN CORPORATE BONDS & NOTES -- 11.0%
BANKS-COMMERCIAL -- 0.8%
LBG Capital No.1 PLC
Bank Guar. Notes
7.88% due 11/01/2020*.................. 920,000 1,001,880
-----------
BUILDING PRODUCTS-WOOD -- 0.2%
Ainsworth Lumber Co., Ltd.
Senior Sec. Notes
7.50% due 12/15/2017*.................. 220,000 239,800
-----------
CABLE/SATELLITE TV -- 1.1%
Nara Cable Funding, Ltd.
Senior Sec. Notes
8.88% due 12/01/2018*.................. 490,000 513,275
Unitymedia Hessen GmbH & Co. KG
Senior Sec. Notes
5.50% due 01/15/2023*.................. 780,000 801,450
-----------
1,314,725
-----------
CELLULAR TELECOM -- 0.1%
NII International Telecom Sarl
Company Guar. Notes
11.38% due 08/15/2019*................. 135,000 141,075
-----------
CHEMICALS-DIVERSIFIED -- 1.1%
Ineos Finance PLC
Senior Sec. Notes
7.50% due 05/01/2020*.................. 210,000 228,637
Ineos Group Holdings SA
Sec. Notes
8.50% due 02/15/2016*.................. 1,140,000 1,157,100
-----------
1,385,737
-----------
CONTAINERS-METAL/GLASS -- 0.3%
Ardagh Packaging Finance PLC/Ardagh MP
Holdings USA, Inc.
Senior Notes
7.00% due 11/15/2020*.................. 290,000 297,975
-----------
DIVERSIFIED BANKING INSTITUTIONS -- 0.5%
Royal Bank of Scotland Group PLC
Sub. Notes
6.13% due 12/15/2022................... 235,000 243,060
UBS AG
Sub. Notes
7.63% due 08/17/2022................... 320,000 357,588
-----------
600,648
-----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
----------------------------------------------------------------------
DIVERSIFIED MINERALS -- 0.5%
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
7.00% due 11/01/2015*....................... $ 605,000 $ 633,738
----------
GAMBLING (NON-HOTEL) -- 0.2%
Great Canadian Gaming Corp.
Company Guar. Notes
6.63% due 07/25/2022*....................... CAD 265,000 271,458
----------
INDEPENDENT POWER PRODUCERS -- 0.0%
AES Drax Energy, Ltd.
Senior Sec. Notes
11.50% due 08/30/2010+(1)(2)(6)(11)......... 4,460,000 0
----------
METAL PROCESSORS & FABRICATION -- 0.0%
International Utility Structures
Escrow Notes
10.75% due 02/01/2008+(1)(2)................ 2,150,000 0
----------
OIL & GAS DRILLING -- 0.4%
Seadrill, Ltd.
Senior Notes
5.63% due 09/15/2017*....................... 495,000 499,950
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.8%
Harvest Operations Corp.
Company Guar. Notes
6.88% due 10/01/2017........................ 640,000 715,200
MEG Energy Corp.
Company Guar. Notes
6.38% due 01/30/2023*....................... 220,000 228,800
----------
944,000
----------
PAPER & RELATED PRODUCTS -- 1.0%
Cascades, Inc.
Company Guar. Notes
7.88% due 01/15/2020........................ 305,000 327,875
Fibria Overseas Finance, Ltd.
Company Guar. Notes
7.50% due 05/04/2020*....................... 802,000 892,626
----------
1,220,501
----------
SATELLITE TELECOM -- 1.7%
Intelsat Jackson Holdings SA
Company Guar. Notes
7.25% due 04/01/2019........................ 900,000 983,250
Intelsat Luxembourg SA
Company Guar. Notes
6.75% due 06/01/2018*....................... 85,000 87,550
Intelsat Luxembourg SA
Company Guar. Notes
7.75% due 06/01/2021*....................... 755,000 768,212
Intelsat Luxembourg SA
Company Guar. Notes
11.50% due 02/04/2017....................... 219,000 232,578
----------
2,071,590
----------
SPECIAL PURPOSE ENTITY -- 0.0%
Hellas Telecommunications Luxembourg II FRS
Sub. Notes
6.03% due 01/15/2015*+(1)(2)(6)(7).......... 1,025,000 0
----------
60
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
---------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
TELECOM SERVICES -- 1.8%
Altice Financing SA
Senior Sec. Notes
7.88% due 12/15/2019*....................... $ 350,000 $ 381,640
Altice Finco SA
Senior Notes
9.88% due 12/15/2020*....................... 255,000 285,600
UPCB Finance VI, Ltd.
Senior Sec. Notes
6.88% due 01/15/2022*....................... 875,000 951,562
Wind Acquisition Finance SA
Sec. Notes
11.75% due 07/15/2017*...................... 510,000 540,600
-----------
2,159,402
-----------
TELEVISION -- 0.3%
Videotron, Ltd.
Company Guar. Notes
5.00% due 07/15/2022........................ 405,000 411,075
-----------
TRAVEL SERVICES -- 0.2%
Carlson Wagonlit BV
Senior Sec. Notes
6.88% due 06/15/2019*....................... 236,000 246,030
-----------
TOTAL FOREIGN CORPORATE BONDS & NOTES
(cost $18,110,848).......................... 13,439,584
-----------
LOANS(2)(8)(9) -- 2.1%
BEVERAGES-NON-ALCOHOLIC -- 0.0%
Le-Natures, Inc.
Escrow Loan
9.36% due 03/01/2011+(1).................... 1,200,000 0
-----------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.0%
TOUSA, Inc.
BTL
12.25% due 8/15/2013+(1)(3)(7)(10).......... 1,977,412 0
-----------
CABLE/SATELLITE TV -- 0.3%
Kabel Deutschland V&S GMBH
BTL
4.25% due 02/01/2019........................ 370,000 372,346
-----------
COAL -- 0.4%
Arch Coal, Inc.
BTL, 2/nd/ Lien
5.75% due 05/01/2018........................ 530,989 540,546
-----------
ELECTRIC-INTEGRATED -- 1.0%
Texas Competitive Electric Holdings Co. LLC
BTL
4.73% due 10/10/2017........................ 1,622,835 1,156,262
-----------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC
Escrow Loan
16.50% due 08/30/2011+(1)................... 1,720,938 0
-----------
TELECOMMUNICATION EQUIPMENT -- 0.3%
Alcatel-Lucent USA, Inc.
BTL
5.25% due 08/01/2016........................ 210,000 213,347
Alcatel-Lucent USA, Inc.
BTL
5.25% due 01/30/2019........................ 99,750 101,485
-----------
314,832
-----------
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------------
X-RAY EQUIPMENT -- 0.1%
Hologic, Inc.
BTL
4.50% due 07/19/2019........................ $149,250 $ 151,504
----------
TOTAL LOANS
(cost $4,992,742)........................... 2,535,490
----------
COMMON STOCK -- 2.0%
BUILDING PRODUCTS-DOORS & WINDOWS -- 0.0%
Masonite Worldwide Holdings, Inc.+........... 692 30,967
----------
CASINO SERVICES -- 0.0%
Greektown, Inc.+(1)(2)....................... 370 0
----------
FOOD-MISC./DIVERSIFIED -- 0.7%
Wornick Co.+(1)(2)........................... 7,270 791,049
----------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC+(1)(2)(12)......... 128,418 0
----------
MULTIMEDIA -- 0.0%
Haights Cross Communication, Inc.+(1)(2)..... 19,388 0
----------
PAPER & RELATED PRODUCTS -- 1.3%
Caraustar Industries, Inc.+(1)(2)............ 73 1,620,461
----------
TOTAL COMMON STOCK
(cost $2,586,741)........................... 2,442,477
----------
MEMBERSHIP INTEREST CERTIFICATES -- 0.3%
CASINO SERVICES -- 0.3%
Herbst Gaming, Inc.+(2)(13)
(cost $232,720)............................. 23,439 304,707
----------
PREFERRED STOCK -- 2.1%
DIVERSIFIED BANKING INSTITUTIONS -- 0.9%
GMAC Capital Trust I FRS
8.13%....................................... 39,000 1,060,800
----------
DIVERSIFIED FINANCIAL SERVICES -- 0.8%
Citigroup Capital XIII FRS
7.88%....................................... 34,000 972,060
----------
INSURANCE-MULTI-LINE -- 0.4%
Hartford Financial Services Group, Inc. FRS
7.88%....................................... 18,000 541,800
----------
MEDICAL-DRUGS -- 0.0%
Triax Pharmaceuticals LLC, Class C+(1)(2).... 39,177 0
----------
TOTAL PREFERRED STOCK
(cost $2,345,345)........................... 2,574,660
----------
WARRANTS+ -- 0.2%
BUILDING PRODUCTS-DOORS & WINDOWS -- 0.0%
Masonite Worldwide Holdings, Inc.
Expires 05/20/2014
(strike price $55.31)(2)(14)................ 3,355 12,581
Masonite Worldwide Holdings, Inc.
Expires 05/20/2016
(strike price $55.31)(2)(14)................ 2,517 7,551
----------
20,132
----------
PUBLISHING-PERIODICALS -- 0.0%
Reader's Digest Assoc., Inc.
Expires 02/19/2014(1)(2).................... 3,250 0
----------
61
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 2)
-------------------------------------------------------------
WARRANTS+ (CONTINUED)
TELEVISION -- 0.2%
ION Media Networks, Inc.
Expires 12/18/2016
(strike price $500.00)(1)(2)(13)... $ 332 $ 116,200
ION Media Networks, Inc.
Expires 12/18/2016
(strike price $687.00)(1)(2)(13)... 328 65,600
------------
181,800
------------
TOTAL WARRANTS
(cost $3,365)...................... 201,932
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $124,001,371)................ 119,530,204
------------
REPURCHASE AGREEMENTS -- 0.6%
Bank of America Securities LLC
Joint Repurchase Agreement(16)..... $120,000 120,000
Barclays Capital PLC
Joint Repurchase Agreement(16)..... 220,000 220,000
BNP Paribas SA
Joint Repurchase Agreement(16)..... 120,000 120,000
Deutsche Bank AG
Joint Repurchase Agreement(16)..... 20,000 20,000
Royal Bank of Scotland
Joint Repurchase Agreement(16)..... 165,000 165,000
UBS Securities LLC
Joint Repurchase Agreement(16)..... 140,000 140,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $785,000).................... 785,000
------------
TOTAL INVESTMENTS --
(cost $124,786,371)(17)............ 98.6% 120,315,204
Other assets less liabilities......... 1.4 1,733,181
-------- ------------
NET ASSETS -- 100.0% $122,048,385
======== ============
--------
* 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 March 31, 2013, the aggregate value of
these securities was $35,727,919 representing 29.3% 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)Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(2)Illiquid security. At March 31, 2013, the aggregate value of these
securities was $5,453,720 representing 4.5% of net assets.
(3)PIK ("Payment-in-Kind") security -- Income may be paid in additional
securities or cash at the discretion of the issuer.
(4)Security currently paying interest/dividends in the form of additional
securities.
(5)Company has filed for Chapter 7 bankruptcy.
(6)Company has filed for bankruptcy protection in country of issuance.
(7)Security in default
(8)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.
(9)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.
(10)Company has filed for Chapter 11 bankruptcy protection.
(11)Security in default of interest and principal at maturity.
(12)Consists of more than one type of securities traded together as a unit.
(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 addition, certain
restricted securities may exhibit greater price volatility than securities
for which secondary markets exist. As of March 31, 2013, 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 $232,720 $304,707 $ 13.00 0.25%
ION Media
Networks, Inc.
Expires
12/18/2016
(strike price
$500.00)
Warrant............ 03/01/2011 332 -- 116,200 350.00 0.10
ION Media
Networks, Inc.
Expires
12/18/2016
(strike price
$687.00)
Warrant............ 11/11/2010 327 --
03/01/2011 1 --
------- --------
328 -- 65,600 200.00 0.05
-------- ----
$486,507 0.40%
======== ====
(14) Fair valued security. Securities are classified as Level 2 based on the
securities valuation inputs; see Note 2.
(15) Perpetual maturity -- maturity date reflects the next call date.
(16) See Note 2 for details of Joint Repurchase Agreements.
(17) See Note 5 for cost of investments on a tax basis.
BTL --Bank Term Loan
FRS --Floating Rate Securities
The rates shown on FRS are the current interest rates at March 31, 2013 and
unless noted otherwise, the dates shown are the original maturity dates.
62
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
CONTRACT IN EXCHANGE DELIVERY UNREALIZED UNREALIZED
COUNTERPARTY TO DELIVER FOR DATE APPRECIATION DEPRECIATION
-----------------
Barclays Bank PLC CAD 265,000 USD 259,122 04/22/2013 $-- $(1,627)
=== =======
CAD --Canadian Dollar
USD --United States Dollar
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2013 (see Note 2):
LEVEL 1 --UNADJUSTED LEVEL 2 -- OTHER LEVEL 3 --SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS
- -------------------- ----------------- ---------------------
ASSETS:
Long-Term Investment Securities:
Convertible Bonds & Notes............................... $ -- $ 2,551,748 $ --
U.S. Corporate Bonds & Notes:
Casino Services........................................ -- 664,950 0
Non-Ferrous Metals..................................... -- -- 0
Recycling.............................................. -- -- 81
Rubber/Plastic Products................................ -- -- 0
Other Industries*...................................... -- 94,535,702 --
Foreign Convertible Bonds & Notes....................... -- 278,873 --
Foreign Corporate Bonds & Notes:
Independent Power Producers............................ -- -- 0
Metal Processors & Fabrication......................... -- -- 0
Special Purpose Entity................................. -- -- 0
Other Industries*...................................... -- 13,439,584 --
Loans:
Beverages-Non-alcoholic................................ -- -- 0
Building-Residential/Commercial........................ -- -- 0
Medical-Drugs.......................................... -- -- 0
Other Industries*...................................... -- 2,535,490 --
Common Stock:
Building Products-Doors & Windows...................... 30,967 -- --
Other Industries*...................................... -- -- 2,411,510
Membership Interest Certificates........................ -- 304,707 --
Preferred Stock:
Medical-Drugs.......................................... -- -- 0
Other Industries*...................................... 2,574,660 -- --
Warrants:
Building Products-Doors & Windows...................... -- 20,132 --
Other Industries*...................................... -- -- 181,800
Repurchase Agreements..................................... -- 785,000 --
---------- ------------ ----------
Total..................................................... $2,605,627 $115,116,186 $2,593,391
========== ============ ==========
LIABILITIES:
Other Financial Instruments:@
Open Forward Foreign Currency Contracts -- Depreciation. $ -- $ 1,627 $ --
========== ============ ==========
TOTAL
- ------------
ASSETS:
Long-Term Investment Securities:
Convertible Bonds & Notes............................... $ 2,551,748
U.S. Corporate Bonds & Notes:
Casino Services........................................ 664,950
Non-Ferrous Metals..................................... 0
Recycling.............................................. 81
Rubber/Plastic Products................................ 0
Other Industries*...................................... 94,535,702
Foreign Convertible Bonds & Notes....................... 278,873
Foreign Corporate Bonds & Notes:
Independent Power Producers............................ 0
Metal Processors & Fabrication......................... 0
Special Purpose Entity................................. 0
Other Industries*...................................... 13,439,584
Loans:
Beverages-Non-alcoholic................................ 0
Building-Residential/Commercial........................ 0
Medical-Drugs.......................................... 0
Other Industries*...................................... 2,535,490
Common Stock:
Building Products-Doors & Windows...................... 30,967
Other Industries*...................................... 2,411,510
Membership Interest Certificates........................ 304,707
Preferred Stock:
Medical-Drugs.......................................... 0
Other Industries*...................................... 2,574,660
Warrants:
Building Products-Doors & Windows...................... 20,132
Other Industries*...................................... 181,800
Repurchase Agreements..................................... 785,000
------------
Total..................................................... $120,315,204
============
LIABILITIES:
Other Financial Instruments:@
Open Forward Foreign Currency Contracts -- Depreciation. $ 1,627
============
--------
* Sum of all other industries each of which individually has an aggregate
market value of less than 5% of net assets. For a detailed presentation of
securities by industry classification, please refer to the Portfolio of
Investments.
@ Other financial instruments are derivative instruments not reflected in the
Portfolio of Investments, such as futures, forwards and swap contracts,
which are valued at the unrealized appreciation (depreciation) on the
instrument.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no material transfers between Levels during the
reporting period.
63
SUNAMERICA HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2013 -- (CONTINUED)
The following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
MEMBERSHIP
U.S. CORPORATE FOREIGN CORPORATE COMMON INTEREST PREFERRED
BONDS & NOTES BONDS & NOTES LOANS STOCK CERTIFICATES STOCK WARRANTS
-------------- ----------------- ----------- ---------- ------------ --------- --------
Balance as of 03/31/2012............. $ 604,857 $ 0 $ 1,707,039 $1,888,847 $ 251,969 $ 0 $145,860
Accrued discounts.................... 2,746 4,688 46,555 -- -- -- --
Accrued premiums..................... -- -- -- -- -- -- --
Realized gain........................ 21,868 -- 51,180 -- -- -- --
Realized loss........................ (164,968) -- (1,893,289) (53,936) -- (78,353) --
Change in unrealized appreciation(1). 191,770 -- 1,989,216 699,680 52,738 78,353 57,501
Change in unrealized depreciation(1). (13,681) (4,688) (134,693) (123,081) -- -- (1,429)
Purchases............................ 1,716,615 -- 7,343 0 -- 0 --
Sales................................ (2,359,126) -- (1,773,351) (0) -- (0) --
Transfers into Level 3............... -- -- -- -- -- -- --
Transfers out of Level 3............. -- -- -- -- (304,707) -- (20,132)
----------- ------- ----------- ---------- --------- -------- --------
Balance as of 03/31/2013............. $ 81 $ 0 $ 0 $2,411,510 $ -- $ 0 $181,800
=========== ======= =========== ========== ========= ======== ========
(1)The total change in unrealized appreciation(depreciation) included in the
statement of operations attributable to level 3 investments still held at
March 31, 2013 includes:
MEMBERSHIP
U.S. CORPORATE FOREIGN CORPORATE COMMON INTEREST PREFERRED
BONDS & NOTES BONDS & NOTES LOANS STOCK CERTIFICATES STOCK WARRANTS
-------------- ----------------- -------- -------- ------------ --------- --------
$(1,850) $(4,688) $(25,460) $522,663 $-- $-- $49,600
======= ======= ======== ======== === === =======
The following is quantitative information about Level 3 fair value measurements:
FAIR VALUE AT
DESCRIPTION 03/31/13(1) VALUATION TECHNIQUE(S) UNOBSERVABLE INPUT(2) RANGE (WEIGHTED AVERAGE)
----------- ------------- ---------------------- ---------------------- ------------------------
U.S. Corporate Bonds & Notes $ 81 Income Approach Future Cash Flows $0.00-$0.004 ($0.001)
-----------------------------------------------------------------------------------------------------------------------
Foreign Corporate Bonds & Notes $ 0 Income Approach Future Cash Flows $0.00
-----------------------------------------------------------------------------------------------------------------------
Loans $ 0 Income Approach Future Cash Flows $0.00
-----------------------------------------------------------------------------------------------------------------------
Common Stock $ 791,049 Market Comparable EV/2013 EBITDA 9.21x
Multiple and Discount 10%
for Lack of
Marketability
------------------------------------------------------------------------------------
$1,620,461 Market Comparable LTM EV/2013 EBITDA 8.62x
Multiple and Discount 10%
for Lack of
Marketability
------------------------------------------------------------------------------------
$ 0 Income Approach Future Cash Flows $0.00
-----------------------------------------------------------------------------------------------------------------------
Preferred Stock $ 0 Income Approach Future Cash Flows $0.00
-----------------------------------------------------------------------------------------------------------------------
Warrants $ 0 Black Scholes Model Discount for Lack of 10%
Marketability
-----------------------------------------------------------------------------------------------------------------------
(1)The Fund's other securities classified as Level 3 with a fair value of
$181.800 at March 31, 2013 are illiquid securities with valuations
attributable to a single broker which were deemed to be indicative quotes
(which do not necessarily represent prices on which the broker may be
willing to trade).
(2)The significant unobservable inputs regarding the Level 3 securities in the
table above are attributable to private securities and include assumptions
made from non-public financial statements, private transactions, and/or
market comparables. Significant increase (decrease) in any of those inputs
in isolation may result in a significantly higher (lower) fair value
measurement.
EV -- Enterprise Value
EBITDA -- Earning Before Interest, Taxes, Depreciation, and Amortization
LTM -- Last Twelve Months
See Notes to Financial Statements
64
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013
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 ("U.S. Government Securities
Fund"), SunAmerica GNMA Fund ("GNMA Fund"), SunAmerica Strategic Bond Fund
("Strategic Bond Fund"), and SunAmerica High Yield Bond Fund ("High Yield
Fund"). The Funds are considered to be separate entities for financial and
tax reporting purposes. The investment goals 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.
65
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (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 ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those
estimates and those differences could be significant. The following is a
summary of significant accounting policies consistently followed by the
Trust in the preparation of its financial statements:
SECURITY VALUATION: In accordance with the authoritative guidance on fair
value measurements and disclosures under GAAP, the Funds disclose the fair
value of its investments in a hierarchy that prioritizes the inputs to
valuation techniques used to measure the fair value. In accordance with
GAAP, fair value is defined as the price that the Funds would receive upon
selling an asset or transferring a liability in a timely transaction to an
independent third party in the principal or most advantageous market. GAAP
established a three-tier hierarchy to provide more transparency around the
inputs used to measure fair value and to establish classification of fair
value measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk. Inputs may be observable or
unobservable. Observable inputs are inputs that reflect the assumptions
market participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the reporting
entity. Unobservable inputs are inputs that reflect the reporting entity's
own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
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 of Trustees ("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.)
Changes in valuation techniques may result in transfers in or out of an
investment's assigned Level within the hierarchy. The methodology used for
valuing investments are not necessarily an indication of the risk associated
with investing in those investments and the determination of the
significance of a particular input to the fair value measurement in its
entirety requires judgment and consideration of factors specific to each
security.
The availability of observable inputs can vary from security to security and
is affected by a wide variety of factors, including, for example, the type
of security, whether the security is recently issued and not yet established
in the marketplace, the liquidity of markets, and other characteristics
particular to the security. To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree
of judgment exercised in determining fair value is greatest for instruments
categorized in Level 3.
The summary of inputs used to value the Funds' net assets as of March 31,
2013 are reported on a schedule following the Portfolio of Investments.
66
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, the
Funds use the exchange that is the primary market for the security. Such
securities are generally categorized as Level 1. However, depending on the
foreign market, closing prices may be up to 15 hours old when they are used
to price the 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 to reflect what it believes to be the fair
value of the securities as of the close of regular trading on the NYSE. The
Funds may also fair value securities in other situations, for example, when
a particular foreign market is closed but a Fund is open. For foreign equity
securities and foreign equity futures contracts, the Funds use an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices, and when so adjusted, such securities and
futures are generally categorized as Level 2.
On March 29, 2013, the NYSE was closed for Good Friday, however, certain
foreign markets were open. As a result, the Funds' priced securities that
traded on the open foreign markets at the closing price of the applicable
market and the remaining securities were valued at their applicable closing
or fair value prices on March 28, 2013, the last day in the reporting period
that the Funds
were open.
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 and are generally categorized as Level 2. 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.
Short-term securities with 60 days or less to maturity are amortized to
maturity based on their cost to the Fund if acquired within 60 days of
maturity or, if already held by the Fund on the 60th day, are amortized to
maturity based on the value determined on the 61st day, and are generally
categorized as Level 2.
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, and are generally categorized as Level 2.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in 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. Registered investment companies are generally categorized as Level 1.
Forward foreign currency contracts ("forward contracts") are valued at the
4:00 p.m. Eastern Time forward rate and are generally categorized as Level 2.
Other securities are valued on the basis of last sale or bid price (if a
last sale price is not available) which 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 and are generally categorized as Level 1
or Level 2.
67
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
The Board is responsible for the share valuation process and has adopted a
policy and procedures (the "PRC Procedures") for valuing the securities and
other assets held by the Funds, including procedures for the fair valuation
of securities and other assets for which market quotations are not readily
available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the Trust's
fair valuation procedures. Securities for which market quotations are not
readily available or the values of which may be significantly impacted by
the occurrence of developments or significant events are generally
categorized as Level 3. There is no single standard for making fair value
determinations, which may result in prices that vary from those of other
funds.
DERIVATIVE INSTRUMENTS: The following tables represent the value of
derivatives held as of March 31, 2013, by their primary underlying risk
exposure and respective location on the Statement of Assets and Liabilities
and the effect of derivatives on the Statement of Operations for the year
ending March 31, 2013:
STRATEGIC BOND FUND
---------------------------------------------------------------------------------------------------
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------------------------- -------------------------------------------------
STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
DERIVATIVE CONTRACTS(1) LIABILITIES LOCATION VALUE LIABILITIES LOCATION
------------------------------ ------------------------------------------- ----- -------------------------------------------
Foreign exchange contracts(2). Unrealized appreciation on forward foreign Unrealized depreciation on forward foreign
currency contracts $ -- currency contracts
===
STRATEGIC BOND FUND
---------------------------------------------------------------------------------------------------
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------------------------- -------------------------------------------------
STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
DERIVATIVE CONTRACTS(1) LIABILITIES LOCATION LIABILITIES LOCATION VALUE
------------------------------ ------------------------------------------- ------------------------------------------- -----
Foreign exchange contracts(2). Unrealized appreciation on forward foreign Unrealized depreciation on forward foreign
currency contracts currency contracts $ --
===
CHANGE IN UNREALIZED
APPRECIATION
LOCATION OF GAIN (LOSS) REALIZED GAIN (LOSS) (DEPRECIATION)
ON DERIVATIVES ON DERIVATIVES ON DERIVATIVES
RECOGNIZED IN STATEMENT OF RECOGNIZED IN STATEMENT RECOGNIZED IN STATEMENT
DERIVATIVE CONTRACTS(1) OPERATIONS OF OPERATIONS OF OPERATIONS
------------------------------ --------------------------------------- ----------------------- -----------------------
Foreign exchange contracts(2). Net realized foreign exchange gain
(loss) on other assets and liabilities/
Change in unrealized foreign exchange
gain (loss) on other assets and
liabilities $25,163 $ --
======= ===
--------
(1)The Fund's derivative contracts held during the period ended March 31, 2013,
are not accounted for as hedging instruments under accounting principles
generally accepted in the United States of America.
(2)The average notional par amount outstanding for forward foreign currency
contracts was $647,903.
HIGH YIELD FUND
----------------------------------------------------------------------------------------------------
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------------------------- --------------------------------------------------
STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
DERIVATIVE CONTRACTS(1) LIABILITIES LOCATION VALUE LIABILITIES LOCATION
------------------------------ ------------------------------------------- ----- -------------------------------------------
Foreign exchange contracts(2). Unrealized appreciation on forward foreign Unrealized depreciation on forward foreign
currency contracts $ -- currency contracts
===
HIGH YIELD FUND
----------------------------------------------------------------------------------------------------
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------------------------- --------------------------------------------------
STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
DERIVATIVE CONTRACTS(1) LIABILITIES LOCATION LIABILITIES LOCATION VALUE
------------------------------ ------------------------------------------- ------------------------------------------- ------
Foreign exchange contracts(2). Unrealized appreciation on forward foreign Unrealized depreciation on forward foreign
currency contracts currency contracts $1,627
======
CHANGE IN UNREALIZED
APPRECIATION
LOCATION OF GAIN (LOSS) REALIZED GAIN (LOSS) (DEPRECIATION)
ON DERIVATIVES ON DERIVATIVES ON DERIVATIVES
RECOGNIZED IN STATEMENT RECOGNIZED IN STATEMENT RECOGNIZED IN STATEMENT
DERIVATIVE CONTRACTS(1) OF OPERATIONS OF OPERATIONS OF OPERATIONS
------------------------------ --------------------------------------- ----------------------- -----------------------
Foreign exchange contracts(2). Net realized foreign exchange gain
(loss) on other assets and liabilities/
Change in unrealized foreign exchange
gain (loss) on other assets and
liabilities $2,364 $(1,627)
====== ========
--------
(1)The Fund's derivative contracts held during the period ended March 31, 2013,
are not accounted for as hedging instruments under accounting principles
generally accepted in the United States of America.
(2)The average notional par amount outstanding for forward foreign currency
contracts was $199,717.
68
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
Forward Foreign Currency Contracts: Certain Funds may enter into forward
contracts for various purposes, including to facilitate settlement of
foreign currency denominated Fund transactions, to attempt to protect
securities and related receivables and payables against changes in future
foreign exchange rates, to hedge portfolio exposure to benchmark currency
allocations or to manage and/or gain exposure to certain foreign currencies.
During the year ended March 31, 2013, the Strategic Bond Fund and the High
Yield Bond Fund used forward contracts to protect securities and related
receivables and payables against changes in future foreign exchange rates.
As of March 31, 2013, the High Yield Bond Fund had open forward contracts,
which are reported on a schedule following the Fund's Portfolio of
Investments.
A forward contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the forward rate and the cumulative change in
market value is recorded by the Fund as unrealized appreciation or
depreciation. On the settlement date, the Fund records either realized gains
or losses equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
Risks to the Funds of entering into forward contracts include counterparty
risk, market risk and illiquidity risk. Counterparty risk arises upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts. If the counterparty defaults, the
Fund's loss will generally consist of the net amount of contractual payments
that the Fund has not yet received though the Fund's maximum risk due to
counterparty risk could extend to the notional amount of the contract.
Market risk is the risk that the value of the forward contract will
depreciate due to unfavorable changes in the exchange rates. These contracts
may involve market risk in excess of the unrealized appreciation or
depreciation reported on the Statement of Assets and Liabilities.
Illiquidity risk arises because the secondary market for forwards may have
less liquidity relative to markets for other securities. Currency
transactions are also subject to risks different from those of other Fund
transactions. Because currency control is of great importance to the issuing
governments and influences economic planning and policy, purchases and sales
of currency and related instruments can be adversely affected by government
exchange controls, limitations or restrictions on repatriation of currency,
and manipulations or exchange restrictions imposed by governments.
MORTGAGE-BACKED DOLLAR ROLLS: During the year ended March 31, 2013, the GNMA
Fund and the Strategic Bond Fund entered into dollar rolls using "to be
announced" ("TBA") mortgage-backed securities ("TBA Rolls"). Roll
transactions involve the sale of mortgage or other asset backed securities
with the commitment to purchase substantially similar securities on a
specified future date. 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. The GNMA Fund had TBA Rolls outstanding at year
end, which are included in receivable for investments sold and payable for
investments purchased in the Statements of Assets and Liabilities. 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 Funds' 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 the transaction costs. For the
year ended March 31, 2013, the GNMA Fund and the Strategic Bond Fund had
realized gains (losses) from mortgage-backed dollar rolls of $115,430 and
$24,975, respectively.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS: The Funds may purchase or
sell when-issued securities, including TBA securities that have been
authorized, but not yet issued in the market. In addition, a Fund may
purchase or sell securities on a forward commitment basis. A forward
commitment involves entering into a contract to purchase or sell securities,
typically on an extended settlement basis, for a fixed price at a future
date. The Funds may engage in when-issued or forward commitment transactions
in order to secure what is considered to be an advantageous price and yield
at the time of entering into the obligation. The purchase of securities on a
when-issued or forward commitment basis involves a risk of loss if the value
of the security to be purchased declines before the settlement date.
Conversely, the sale of securities on a when- issued or forward commitment
basis involves the risk that the value of the securities sold may increase
before the settlement date. For the year ended March 31, 2013, the GNMA Fund
and Strategic Bond Fund purchased and/or sold when-issued securities and/or
forward commitments.
STRIPPED MORTGAGE-BACKED SECURITIES: Stripped Mortgage-Backed Securities
("SMBS") are derivative multiple-class mortgage-backed securities. SMBS are
often structured with two classes that receive different proportions of the
interest and
69
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
principal distributions on a pool of mortgage assets. SMBSs have greater
market volatility than other types of U.S. government securities in which a
Fund invests. A common type of SMBS has one class receiving some of the
interest and all or most of the principal (the "principal only" class) from
the mortgage pool, while the other class will receive all or most of the
interest (the "interest only" class). The yield to maturity on an interest
only class is extremely sensitive not only to changes in prevailing interest
rates, but also to the rate of principal payments, including principal
prepayments, on the underlying pool of mortgage assets, and a rapid rate of
principal payment may have a material adverse effect on a Fund's yield.
INFLATION-INDEXED BONDS: Certain Funds may purchase inflation-indexed bonds.
Inflation-indexed bonds are fixed income securities whose principal value is
adjusted periodically according to the rate of inflation. Two structures are
common. The U.S. Treasury and certain other issuers use a structure that
reflects inflation in the principal value of the bond. Other issuers pay out
any inflation related accruals as part of a semiannual coupon. The value of
inflation-indexed bonds is expected to change in response to changes in real
interest rates. Real interest rates, in turn, are tied to the relationship
between nominal interest rates (i.e., stated interest rates) and the rate of
inflation. Therefore, if the rate of inflation rises at a faster rate than
nominal interest rates, real interest rates (i.e., nominal interest rates
minus inflation) might decline, leading to an increase in value of
inflation-indexed bonds. In contrast, if nominal interest rates increase at
a faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds. There can be no assurance,
however, that the value of inflation-indexed bonds will be directly
correlated to changes in nominal interest rates, and short-term increases in
inflation may lead to a decline in their value. Coupon payments received
from inflation-indexed bonds are recorded in the Statement of Operations as
interest income. In addition, any increase or decrease in the principal
amount of an inflation-indexed bond will be recorded in the Statement of
Operations as an increase or decrease to interest income, even though
principal is not paid until maturity.
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"), 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.
In a repurchase agreement, the seller of a security agrees to repurchase the
security at a mutually agreed-upon time and price, which reflects the
effective rate of return for the term of the agreement. For repurchase
agreements and joint repurchase agreements, the Funds' custodian takes
possession of the collateral pledged for investments in such repurchase
agreements ("repo" or collectively "repos"). 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, the 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 March 31, 2013, the following Fund held an undivided interest in the
joint repurchase agreement with Bank of America Securities LLC:
FUND PERCENTAGE PRINCIPAL
High Yield Bond. 0.16% $120,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
Bank of America Securities LLC, dated March 28, 2013, bearing interest at a
rate of 0.13% per annum, with a principal amount of $74,945,000, a
repurchase price of $74,946,083, and a maturity date of April 1, 2013. The
repurchase agreement is collateralized by the following:
TYPE OF COLLATERAL INTEREST MATURITY PRINCIPAL VALUE
U.S. Treasury Notes. 0.25% 12/15/2014 $60,049,000 $60,110,850
U.S. Treasury Notes. 1.38 11/30/2015 15,986,000 16,502,508
70
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
As of March 31, 2013, the following Fund held an undivided interest in the
joint repurchase agreement with Barclays Capital PLC:
FUND PERCENTAGE PRINCIPAL
High Yield Bond. 0.18% $220,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
Barclays Capital PLC, dated March 28, 2013, bearing interest at a rate of
0.15% per annum, with a principal amount of $125,247,000, a repurchase price
of $125,249,087, and a maturity date of April 1, 2013. The repurchase
agreement is collateralized by the following:
TYPE OF COLLATERAL INTEREST MATURITY PRINCIPAL VALUE
U.S. Treasury Notes. 0.63% 08/31/2017 $127,485,000 $127,507,947
As of March 31, 2013, the following Fund held an undivided interest in the
joint repurchase agreement with BNP Paribas SA:
FUND PERCENTAGE PRINCIPAL
High Yield Bond. 0.16% $120,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
BNP Paribas SA, dated March 28, 2013, bearing interest at a rate of 0.15%
per annum, with a principal amount of $74,945,000, a repurchase price of
$74,946,249, and a maturity date of April 1, 2013. The repurchase agreement
is collateralized by the following:
TYPE OF COLLATERAL INTEREST MATURITY PRINCIPAL VALUE
U.S. Treasury Notes. 1.25% 10/31/2015 $74,362,100 $76,534,217
As of March 31, 2013, the following Fund held an undivided interest in the
joint repurchase agreement with Deutsche Bank AG:
FUND PERCENTAGE PRINCIPAL
High Yield Bond. 0.13% $20,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
Deutsche Bank AG, dated March 28, 2013, bearing interest at a rate of 0.14%
per annum, with a principal amount of $14,940,000, a repurchase price of
$14,940,232, and a maturity date of April 1, 2013. The repurchase agreement
is collateralized by the following:
TYPE OF COLLATERAL INTEREST MATURITY PRINCIPAL VALUE
U.S. Treasury Notes. 2.38% 02/28/2015 $14,677,000 $15,301,360
As of March 31, 2013, the following Fund held an undivided interest in the
joint repurchase agreement with Royal Bank of Scotland.
PERCENTAGE PRINCIPAL
FUND OWNERSHIP AMOUNT
---- ---------- ---------
High Yield Bond. 0.17% $165,000
71
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
Royal Bank of Scotland, dated March 28, 2013, bearing interest at a rate of
0.15% per annum, with a principal amount of $99,965,000, a repurchase price
of $99,966,666, and a maturity date of April 1, 2013. The repurchase
agreement is collateralized by the following:
TYPE OF COLLATERAL INTEREST MATURITY PRINCIPAL VALUE
U.S. Treasury Notes. 4.25% 08/15/2014 $96,152,000 $101,997,080
As of March 31, 2013, the following Funds held an undivided interest in the
joint repurchase agreement with State Street Bank and Trust Co.:
FUND PERCENTAGE PRINCIPAL
U.S. Government Securities. 5.99% $17,578,000
GNMA....................... 9.67 28,390,000
Strategic Bond............. 1.15 3,387,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
State Street Bank and Trust Co., dated March 28, 2013, bearing interest at a
rate of 0.01% per annum, with a principal amount of $293,509,000, a
repurchase price of $293,509,326, and a maturity date of April 1, 2013. The
repurchase agreement is collateralized by the following:
TYPE OF COLLATERAL INTEREST MATURITY PRINCIPAL VALUE
U.S. Treasury Notes. 0.25% 01/31/2014 $ 4,685,000 $ 4,690,655
U.S. Treasury Notes. 0.25 08/15/2015 11,400,000 11,385,750
U.S. Treasury Notes. 0.38 11/15/2015 15,560,000 15,603,319
U.S. Treasury Notes. 0.63 11/30/2017 45,120,000 45,120,000
U.S. Treasury Notes. 1.50 06/30/2016 8,955,000 9,300,708
U.S. Treasury Notes. 1.75 03/31/2014 140,570,000 143,987,116
U.S. Treasury Notes. 2.13 02/29/2016 15,435,000 16,245,338
U.S. Treasury Notes. 2.13 08/15/2021 50,645,000 53,050,638
As of March 31, 2013, the following Fund held an undivided interest in the
joint repurchase agreement with UBS Securities LLC:
FUND PERCENTAGE PRINCIPAL
GNMA. 16.21% $16,208,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Securities LLC, dated March 28, 2013, bearing interest at a rate of
0.10% per annum, with a principal amount of $100,000,000, a repurchase price
of $100,001,111, and a maturity date of April 1, 2013. The repurchase
agreement is collateralized by the following:
TYPE OF COLLATERAL INTEREST MATURITY PRINCIPAL VALUE
U.S. Treasury Inflation Index Notes. 2.50% 07/15/2016 $23,301,100 $30,844,831
U.S. Treasury Inflation Index Notes. 1.13 01/15/2021 15,000,000 18,656,250
U.S. Treasury Inflation Index Notes. 2.13 02/15/2041 35,000,000 52,500,000
72
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
As of March 31, 2013, the following Fund held an undivided interest in the
joint repurchase agreement with UBS Securities LLC:
FUND PERCENTAGE PRINCIPAL
High Yield Bond. 0.16% 140,000
As of such date, the repurchase agreement in that joint account and the
collateral therefore were as follows:
UBS Securities LLC, dated March 28, 2013, bearing interest at a rate of
0.14% per annum, with a principal amount of $84,875,000, a repurchase price
of $84,876,320, and a maturity date of April 1, 2013. The repurchase
agreement is collateralized by the following:
TYPE OF COLLATERAL INTEREST MATURITY PRINCIPAL VALUE
U.S. Treasury Notes. 0.25% 12/15/2015 $87,045,300 $86,917,343
SECURITIES TRANSACTIONS, INVESTMENT INCOME, EXPENSES, DIVIDENDS AND
DISTRIBUTIONS TO SHAREHOLDERS: Security transactions are recorded on a trade
date basis. Interest income is accrued daily from settlement date except
when collection is not expected. Dividend income is recorded on the
ex-dividend date except for certain dividends from foreign securities, which
are recorded as soon as the Funds are informed after the ex-dividend date.
Paydown gains and losses on mortgage and asset-backed securities are
recorded as components of interest income on the Statement of Operations.
For financial statement purposes, the Funds amortize all premiums and
accrete all discounts on fixed income securities.
Realized gains and losses on the sale of investments are calculated on the
identified cost basis. Funds which earn foreign income and capital gains may
be subject to foreign withholding taxes and capital gains taxes at various
rates. Under applicable foreign law, a withholding of tax may be imposed on
interest, dividends, and capital gains from the sale of foreign securities
at various rates.
Net investment income, expenses other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class
of shares based upon the relative net asset value of outstanding shares of
each class of shares at the beginning of the day (after adjusting for
current capital shares activity of the respective class).
Expenses common to all Funds, not directly related to individual Funds are
allocated among the Funds based upon relative net assets or other
appropriate allocation methods. In all other respects, expenses are charged
to each Fund as incurred on a specific identification basis. Interest earned
on cash balances held at the custodian are shown as custody credits on the
Statement of Operations.
Dividends from net investment income 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 and presented in accordance with federal income
tax regulations, which may differ from GAAP. 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 assets
are not affected by these reclassifications.
Each Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income, including any net capital gains on investments, to its
shareholders. Each Fund also intends to distribute sufficient net investment
income and net capital gains, if any, so that each Fund will not be subject
to excise tax on undistributed income and gains. Therefore, no federal
income tax or excise tax provision is required.
73
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
Each Fund recognizes the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed each Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2009 -- 2011 or expected to be taken in each Fund's 2012 tax return. The
Funds are not aware of any tax provisions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will change
materially in the next twelve months. The Funds file U.S. federal and
certain state income tax returns. With few exceptions, the Funds are no
longer subject to U.S. federal and state tax examinations by tax authorities
for tax returns ending before 2009.
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 year. 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 located in the Statement of Operations include realized
foreign exchange gains and losses from currency gains or losses between the
trade and the settlement dates of securities transactions, the difference
between the amounts of interest, dividends and foreign withholding taxes
recorded on the Funds' books and the U.S. dollar equivalent amounts actually
received or paid and changes in the unrealized foreign exchange gains and
losses relating to the other assets and liabilities arising as a result of
changes in the exchange rates and realized gains and losses on forward
foreign currency contracts.
NEW ACCOUNTING PRONOUNCEMENTS: In May 2011, the FASB issued Accounting
Standards Update ("ASU") No. 2011-04, "Amendments to Achieve Common Fair
Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." ASU
2011-04 requires common fair value measurement and disclosure requirements
between U.S. GAAP and International Financial Reporting Standards. The new
and revised disclosures are effective for interim and annual reporting
periods beginning after December 15, 2011. All required changes to
accounting policies have been made in accordance with ASU No. 2011-04.
In May 2011, the FASB issued ASU No. 2011-11 "Disclosures about Offsetting
Assets and Liabilities which was subsequently clarified in FASB ASU 2013-01
"Clarifying the Scope of Disclosures about Offsetting Assets and
Liabilities" which was issued in January 2013. The amended Standard requires
an entity to disclose information about offsetting and related arrangements
to enable users of its financial statements to understand the effect of
those arrangements on its financial position. The new and revised
disclosures are effective for annual reporting periods beginning on or after
January 1, 2013, and interim periods within those annual periods. At this
time, management is evaluating the implications of ASU 2013-01 and its
impact on the financial statements.
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.
74
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
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
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 are as follows:
SUBADVISORY
ASSETS FEES
---------------------------- -----------
Strategic Bond Fund.. $0 - 200 million 0.350%
(greater than) $200 million 0.250
(greater than) $500 million 0.200
High Yield Bond Fund. $0 - $150 million 0.400
(greater than) $150 million 0.350
(greater than) $500 million 0.300
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 Class A....................... 0.99
GNMA Class B....................... 1.64
GNMA 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
75
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
For the U.S. Government Fund and GNMA Fund, any contractual waivers and/or
reimbursements made by SunAmerica are subject to recoupment from the Funds
within two years after the occurrence of the waiver and/or reimbursement,
provided that the Funds are able to effect such payment to SunAmerica and
remain in compliance with the expense limitations in effect at the time the
waivers and/or reimbursements were made.
For the year ended March 31, 2013, 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. $202,369
CLASS SPECIFIC
FUND EXPENSES
---- --------------
U.S. Government Securities Class A. $297,796
U.S. Government Securities Class B. 21,636
U.S. Government Securities Class C. 42,702
GNMA Class A....................... 394,834
GNMA Class B....................... 37,793
GNMA Class C....................... 115,142
High Yield Bond Class A............ 122,623
High Yield Bond Class B............ 28,454
High Yield Bond Class C............ 59,092
At March 31, 2013, expenses previously waived or reimbursed by SunAmerica
that are subject to recoupment and expire during the time period indicated
are as follows:
OTHER EXPENSES
REIMBURSED
-----------------------------
FUND MARCH 31, 2014 MARCH 31, 2015
---- -------------- --------------
U.S. Government Securities. $228,627 $202,369
CLASS SPECIFIC EXPENSES
REIMBURSED
-----------------------------
FUND MARCH 31, 2014 MARCH 31, 2015
---- -------------- --------------
U.S. Government Securities Class A. $315,150 $297,796
U.S. Government Securities Class B. 22,735 21,636
U.S. Government Securities Class C. 45,128 42,702
GNMA Class A....................... 385,748 394,834
GNMA Class B....................... 36,628 37,793
GNMA Class C....................... 104,517 115,143
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
76
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
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 year ended March 31,
2013, 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 year
ended March 31, 2013, 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 DEFERRED DEFERRED
FUND CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES SALES CHARGES SALES CHARGES
---- -------- -------------- -------------- ------------- ------------- -------------
U.S. Government Securities. $ 64,119 $ 42,275 $ 15,473 $ 84 $ 9,693 $ 6,921
GNMA....................... 279,069 154,475 80,436 896 30,915 14,986
Strategic Bond............. 648,485 249,346 288,873 4,344 57,152 32,105
High Yield Bond............ 115,265 31,853 63,085 -- 17,499 7,392
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 year ended March 31, 2013, 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 MARCH 31, 2013
---- -------- --------------
U.S. Government Securities Class A. $260,187 $22,405
U.S. Government Securities Class B. 10,624 882
U.S. Government Securities Class C. 30,834 2,354
GNMA Class A....................... 473,971 30,063
GNMA Class B....................... 33,302 2,690
GNMA Class C....................... 131,887 9,196
Strategic Bond Class A............. 663,688 61,940
Strategic Bond Class B............. 120,753 10,663
Strategic Bond Class C............. 577,452 50,785
High Yield Bond Class A............ 171,796 14,397
High Yield Bond Class B............ 28,784 2,629
High Yield Bond Class C............ 79,181 6,360
At March 31, 2013, Focused Balanced Strategy Portfolio and Focused
Multi-Asset Strategy Portfolio, each a series of SunAmerica Series, Inc.,
and shares held through Pershing LLC, in a brokerage account sweep vehicle
for customers of the broker-dealers within Advisor Group, Inc., an affiliate
of the Adviser, owned a percentage of the outstanding shares of the
following Funds:
FUND HOLDER PERCENTAGE
---- ------ ----------
U.S. Government Securities. Focused Balanced Strategy Portfolio 12%
Focused Multi-Asset Strategy Portfolio 13
Pershing LLC 6
GNMA....................... Pershing LLC 22
Strategic Bond............. Pershing LLC 7
High Yield Bond............ Pershing LLC 11
77
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
Note 4. Purchases and Sales of Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the year ended March 31, 2013 were as follows:
U.S.
GOVERNMENT
SECURITIES GNMA STRATEGIC HIGH YIELD
FUND FUND BOND FUND BOND FUND
----------- ------------ ------------ -----------
Purchases (excluding U.S. government securities). $ -- $ -- $903,265,848 $54,434,904
Sales (excluding U.S. government securities)..... -- -- 795,441,410 60,602,382
Purchases of U.S. government securities.......... 98,974,219 383,735,252 170,500,800 --
Sales of U.S. government securities.............. 99,626,574 449,110,695 200,442,817 --
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, post October capital losses, distributions payable,
deferred compensation plans, amortization of premium/discount, and treatment
of defaulted securities.
TAX DISTRIBUTIONS
DISTRIBUTABLE EARNINGS FOR THE YEAR ENDED
FOR THE YEAR ENDED MARCH 31, 2013 MARCH 31, 2013
--------------------------------------- -------------------------
LONG-TERM UNREALIZED
ORDINARY GAINS/ CAPITAL APPRECIATION ORDINARY LONG-TERM
INCOME LOSS CARRYOVER (DEPRECIATION) INCOME CAPITAL GAINS
---------- -------------- -------------- ----------- -------------
U.S. Government Securities. $ 431,193 $ -- $ 8,597,708 $ 4,398,492 $ --
GNMA....................... 32,626 2,683 4,588,431 6,729,729 871,615
Strategic Bond............. 1,850,698 (52,812,990) 10,351,778 22,960,807 --
High Yield Bond............ 642,302 (53,081,995) (4,857,300) 6,906,431 --
TAX DISTRIBUTIONS
FOR THE YEAR ENDED
MARCH 31, 2012
-------------------------
ORDINARY LONG-TERM
INCOME CAPITAL GAINS
----------- -------------
U.S. Government Securities. $ 3,484,062 $ --
GNMA....................... 12,404,286 7,272,727
Strategic Bond............. 29,313,671 --
High Yield Bond............ 8,905,911 --
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.......................................... $130,240,756 $281,605,523 $650,863,010 $125,172,497
============ ============ ============ ============
Appreciation.................................. 8,724,558 4,851,381 22,904,220 8,973,799
Depreciation.................................. (126,850) (262,951) (12,522,401) (13,831,092)
------------ ------------ ------------ ------------
Unrealized appreciation (depreciation) -- net. $ 8,597,708 $ 4,588,430 $ 10,381,819 $ (4,857,293)
============ ============ ============ ============
78
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
As of March 31, 2013, 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:
CAPITAL LOSS CARRYFORWARD+ UNLIMITED+
--------------------------------- ----------
FUND 2016 2017 2018 ST LT
---- ---------- ---------- ----------- --- ---
U.S. Government Securities. $ -- $ -- $ -- $-- $--
GNMA....................... -- -- -- -- --
Strategic Bond............. -- -- 52,812,990 -- --
High Yield Bond............ 2,374,447 9,384,737 41,322,811 -- --
--------
+ On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted which changes various technical rules governing
the tax treatment of regulated investment companies. The changes are
generally effective 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. Additionally, post-enactment capital losses that
are carried forward will retain their character as either short-term or
long-term losses rather than being considered all short-term as under
previous law.
The Funds indicated below utilized capital loss carryforwards, which offset
net realized taxable gains in the year ended March 31, 2013:
CAPITAL LOSS
CARRYFORWARD
FUND UTILIZED
---- ------------
U.S. Government Securities. $ --
GNMA....................... --
Strategic Bond............. 15,893,126
High Yield Bond............ 1,002,745
Under the current law, capital losses realized after October 31 and late
year ordinary losses may be deferred and treated as occurring on the first
day of the following year. For the fiscal year ended March 31, 2013, the
Funds elected to defer late year ordinary losses and post October capital
losses as follows:
DEFERRED DEFERRED
DEFERRED POST-OCTOBER POST-OCTOBER
LATE YEAR SHORT-TERM LONG-TERM
FUND ORDINARY LOSS CAPITAL LOSS CAPITAL LOSS
---- ------------- ------------ ------------
U.S. Government Securities. $-- $ -- $169,033
GNMA....................... -- 2,200,141 200,783
Strategic Bond............. -- -- --
High Yield Bond............ -- -- 229,320
For the period ended March 31, 2013, the reclassifications arising from
book/tax differences resulted in increases (decreases) that were primarily
due to net paydown adjustments, amortization of discount/premium, treatment
of litigation payments and treatment of foreign currency to the components
of net assets as follows:
ACCUMULATED ACCUMULATED
UNDISTRIBUTED NET UNDISTRIBUTED NET
INVESTMENT INCOME REALIZED GAIN
FUND (LOSS) (LOSS) CAPITAL PAID-IN
---- ----------------- ----------------- ---------------
U.S. Government Securities. $ 440,065 $ (440,065) $--
GNMA....................... 6,002,901 (6,002,901) --
Strategic Bond............. 3,282,265 (3,282,265) --
High Yield Bond............ 780,682 (780,682) --
79
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
Note 6. Capital Share Transactions
Transactions in capital shares of each class of each Fund were as follows:
U.S. GOVERNMENT SECURITIES FUND
------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- --------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2013 MARCH 31, 2012 MARCH 31, 2013 MARCH 31, 2012
------------------------ ------------------------ --------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ -------- ----------- -------- -----------
Shares sold(1)(2)....... 3,921,197 $ 39,447,474 1,405,257 $ 14,128,533 127,429 $ 1,295,234 163,944 $ 1,641,064
Reinvested dividends.... 328,546 3,322,601 265,168 2,644,161 9,726 98,256 6,063 60,550
Shares redeemed(1)(2)... (3,733,737) (37,849,010) (5,046,881) (50,447,645) (135,820) (1,372,818) (297,805) (2,949,533)
---------- ------------ ---------- ------------ -------- ----------- -------- -----------
Net increase (decrease). 516,006 $ 4,921,065 (3,376,456) $(33,674,951) 1,335 $ 20,672 (127,798) $(1,247,919)
========== ============ ========== ============ ======== =========== ======== ===========
U.S. GOVERNMENT SECURITIES FUND
------------------------------------------------------
CLASS C
------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MARCH 31, 2013 MARCH 31, 2012
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
Shares sold............. 420,100 $ 4,283,867 463,474 $ 4,664,490
Reinvested dividends.... 28,048 283,084 16,984 169,767
Shares redeemed......... (673,224) (6,807,829) (406,740) (4,067,868)
----------- ------------- ----------- -------------
Net increase (decrease). (225,076) $ (2,240,878) 73,718 $ 766,389
=========== ============= =========== =============
GNMA FUND
----------------------------------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------------------------ --------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2013 MARCH 31, 2012 MARCH 31, 2013 MARCH 31, 2012
-------------------------- -------------------------- --------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------- -------- ----------- -------- -----------
Shares sold(3)(4)....... 5,416,785 $ 62,579,052 10,752,999 $ 127,166,757 282,061 $ 3,259,259 303,238 $ 3,588,788
Reinvested dividends.... 380,593 4,365,435 950,324 11,157,553 19,598 225,123 50,306 591,739
Shares redeemed(3)(4)... (13,849,327) (159,070,338) (10,644,733) (125,557,144) (371,142) (4,278,192) (679,990) (8,029,528)
----------- ------------- ----------- ------------- -------- ----------- -------- -----------
Net increase (decrease). (8,051,949) $ (92,125,851) 1,058,590 $ 12,767,166 (69,483) $ (793,810) (326,446) $(3,849,001)
=========== ============= =========== ============= ======== =========== ======== ===========
GNMA FUND
------------------------------------------------------
CLASS C
------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MARCH 31, 2013 MARCH 31, 2012
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
Shares sold............. 1,048,290 $ 12,116,850 1,561,756 $ 18,543,947
Reinvested dividends.... 80,372 924,664 180,002 2,120,243
Shares redeemed......... (2,502,463) (28,716,232) (1,454,595) (17,222,966)
----------- ------------- ----------- -------------
Net increase (decrease). (1,373,801) $ (15,674,718) 287,163 $ 3,441,224
=========== ============= =========== =============
--------
(1)For the year ended March 31, 2013, includes automatic conversion of 43,544
shares of Class B shares in the amount of $441,515 to 43,558 shares of Class
A shares in the amount of $441,515.
(2)For the year ended March 31, 2012, includes automatic conversion of 124,754
shares of Class B shares in the amount of $1,237,798 to 124,831 shares of
Class A shares in the amount of $1,237,798.
(3)For the year ended March 31, 2013, includes automatic conversion of 97,771
shares of Class B shares in the amount of $1,131,290 to 98,033 shares of
Class A shares in the amount of $1,131,290.
(4)For the year ended March 31, 2012, includes automatic conversion of 408,762
shares of Class B shares in the amount of $4,825,027 to 409,970 shares of
Class A shares in the amount of $4,825,027.
80
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
STRATEGIC BOND FUND
---------------------------------------------------------------------------------------------------------
CLASS A CLASS B
----------------------------------------------------- --------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2013 MARCH 31, 2012 MARCH 31, 2013 MARCH 31, 2012
-------------------------- ------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------ ---------- ------------ ---------- ------------
Shares
sold(1)(2).... 39,698,118 $ 141,997,626 36,753,274 $125,996,809 3,254,487 $ 11,593,612 2,571,494 $ 8,806,180
Reinvested
dividends..... 2,550,049 9,085,201 3,129,147 10,710,874 302,081 1,075,790 372,194 1,273,594
Shares
redeemed(1)(2) (35,270,059) (125,154,964) (26,954,012) (92,309,285) (2,823,364) (10,038,084) (2,941,428) (10,102,470)
----------- ------------- ----------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease).... 6,978,108 $ 25,927,863 12,928,409 $ 44,398,398 733,204 $ 2,631,318 2,260 $ (22,696)
=========== ============= =========== ============ ========== ============ ========== ============
STRATEGIC BOND FUND
----------------------------------------------------
CLASS C
----------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MARCH 31, 2013 MARCH 31, 2012
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
Shares sold.... 14,476,888 $ 51,811,193 13,236,961 $ 45,773,697
Reinvested
dividends..... 1,475,837 5,280,489 1,758,235 6,038,058
Shares redeemed (13,406,963) (47,878,110) (14,347,592) (49,387,349)
----------- ------------ ----------- ------------
Net increase
(decrease).... 2,545,762 $ 9,213,572 647,604 $ 2,424,406
=========== ============ =========== ============
HIGH YIELD BOND FUND
------------------------------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------------------- ------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2013 MARCH 31, 2012 MARCH 31, 2013 MARCH 31, 2012
------------------------- ------------------------- ----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------ ---------- ----------- ---------- -----------
Shares
sold(3)(4).... 9,122,794 $ 31,448,594 19,270,829 $ 64,460,601 1,546,059 $ 5,378,068 386,434 $ 1,305,757
Reinvested
dividends..... 819,177 2,850,296 933,291 3,152,130 125,945 439,400 144,270 487,870
Shares
redeemed(3)(4) (13,173,287) (45,652,403) (17,965,878) (60,320,917) (1,157,337) (4,051,421) (1,654,246) (5,614,909)
----------- ------------ ----------- ------------ ---------- ----------- ---------- -----------
Net increase
(decrease).... (3,231,316) $(11,353,513) 2,238,242 $ 7,291,814 514,667 $ 1,766,047 (1,123,542) $(3,821,282)
=========== ============ =========== ============ ========== =========== ========== ===========
HIGH YIELD BOND FUND
----------------------------------------------------
CLASS C
----------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MARCH 31, 2013 MARCH 31, 2012
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
Shares sold.... 1,161,535 $ 4,046,891 2,588,354 $ 8,822,795
Reinvested
dividends..... 342,771 1,199,593 374,739 1,272,132
Shares redeemed (2,817,449) (9,874,909) (3,367,694) (11,416,462)
----------- ------------ ----------- ------------
Net increase
(decrease).... (1,313,143) $ (4,628,425) (404,601) $ (1,321,535)
=========== ============ =========== ============
--------
(1)For the year ended March 31, 2013, includes automatic conversion of 396,814
shares of Class B shares in the amount of $1,403,483 to 396,709 shares of
Class A shares in the amount of $1,403,483.
(2)For the year ended March 31, 2012, includes automatic conversion of 712,012
shares of Class B shares in the amount of $2,437,443 to 711,863 shares of
Class A shares in the amount of $2,437,443.
(3)For the year ended March 31, 2013, includes automatic conversion of 207,491
shares of Class B shares in the amount of $724,006 to 207,774 shares of
Class A shares in the amount of $724,006.
(4)For the year ended March 31, 2012, includes automatic conversion of 591,269
shares of Class B shares in the amount of $2,015,970 to 592,730 shares of
Class A shares in the amount of $2,015,970.
81
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
Note 7. Line of Credit
The SunAmerica family of mutual funds has established a $75 million
committed and a $50 million uncommitted line of credit with State Street
Bank and Trust Company, the Funds' custodian. Interest is currently payable
at the higher of the Federal Funds Rate plus 125 basis points or the
overnight 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
basis points per annum on the daily unused portion of the committed line of
credit which is included in other expenses on the Statement of Operations.
Borrowings under the line of credit will commence when the respective Fund's
cash shortfall exceeds $100,000. For the year ended March 31, 2013, the
following Funds had borrowings:
AVERAGE WEIGHTED
DAYS INTEREST DEBT AVERAGE
FUND OUTSTANDING CHARGES UTILIZED INTEREST
---- ----------- -------- ---------- --------
GNMA............ 10 $2,342 $5,907,779 1.42%
Strategic Bond.. 11 213 488,113 1.43
High Yield Bond. 7 336 1,208,404 1.44
At March 31, 2013, there were no borrowings outstanding.
Note 8. Interfund Lending Agreement
Pursuant to the 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 lend money to each other for temporary or emergency purposes. An
interfund loan will be made under this facility only if the participating
Funds receive a more favorable interest rate than would otherwise be
available from a typical bank for a comparable transaction. For the year
ended March 31, 2013, none of the Funds participated in this program.
Note 9. Trustees' Retirement Plan
The Board has adopted the SunAmerica Disinterested Trustees' and Directors'
Retirement Plan (the "Retirement Plan") effective January 1, 1993, as
amended, for the Disinterested Trustees. The Retirement Plan provides
generally that a Disinterested 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 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/Director"). 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 Trustees
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.
82
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2013 -- (CONTINUED)
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 RETIREMENT RETIREMENT
PLAN PLAN PLAN
LIABILITY EXPENSE PAYMENTS
---------- ---------- ----------
FUND AS OF MARCH 31, 2013
---- --------------------------------
U.S. Government Securities. $6,844 $161 $3,733
GNMA....................... 3,963 393 1,998
Strategic Bond............. 4,511 664 2,158
High Yield Bond............ 3,022 138 1,612
Note 10. Investment Concentration
The High Yield 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 U.S. Government Securities Fund and the GNMA Fund 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 not be able to recover its investment from the U.S.
Government. As a result of the U.S. Government Securities Fund and the GNMA
Fund's concentration in such investments, it may be subject to risks
associated with the U.S. Government agencies or instrumentalities. At
March 31, 2013, the U.S. Government Securities Fund and the GNMA Fund had
31.7% and 100.2%, respectively, of their net assets invested in such
securities.
Note 11. Security Transactions with Affiliated Portfolios
The Funds are permitted to transfer securities by purchasing from and/or
selling to other affiliated funds under certain conditions approved by the
Board of Trustees. The affiliated funds involved in such transactions must
have a common investment adviser or investment advisers which are affiliated
persons of each other, common Trustees, and/or common officers in compliance
with Rule 17a-7 of the 1940 Act. Pursuant to the Act, such a 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 transactions. For the
year ended March 31, 2013, the following Funds engaged in security
transactions with affiliated Funds:
COST OF PROCEED REALIZED
FUND PURCHASES FROM SALES GAIN/LOSS
---- --------- ---------- ---------
Strategic Bond. $350,761 $685,000 $12,788
83
SUNAMERICA INCOME FUNDS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of SunAmerica Income Funds:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of each of the four
funds constituting SunAmerica Income Funds (the "Trust'') at March 31, 2013,
the results of each of their operations for the year then ended, the changes in
each of their net assets for each of the two years in the period then ended and
the financial highlights for each of the five years in the period then ended,
in conformity with accounting principles generally accepted in the United
States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements'') are the responsibility of
the Trust's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at March 31, 2013 by correspondence with the custodian, transfer
agent, and brokers, and the application of alternative auditing procedures
where securities purchased had not been received, provide a reasonable basis
for our opinion.
Houston, Texas
May 29, 2013
84
SUNAMERICA INCOME FUNDS
TRUSTEE AND OFFICER INFORMATION -- MARCH 31, 2013 -- (UNAUDITED)
The following table contains basic information regarding the Trustees and
Officers who oversee operations of the Funds and other investment companies
within the Fund Complex.
NUMBER OF
TERM OF FUNDS IN
POSITION(S) OFFICE AND FUND COMPLEX
NAME, ADDRESS HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER TRUSTEESHIP(S)
AND DATE OF BIRTH* THE FUND TIME SERVED(4) DURING PAST 5 YEARS TRUSTEE(1) HELD BY TRUSTEE(2)
-------------------- ----------- -------------- ------------------------------ ------------ -----------------------------
DISINTERESTED
TRUSTEES
Dr. Judith L. Craven Trustee 2001-present Retired. 79 Director, Belo Corporation
Age: 67 (1992 to present); Director,
Sysco Corporation (1996 to
present); Director, Luby's
Inc. (1998 to present).
William F. Devin Trustee 2001-present Retired. 79 None
Age: 74
Richard W. Grant Trustee; 2011-present Retired. Prior to that, 30 None
Age: 67 Chairman Attorney and Partner at
of the Morgan Lewis and Bockius
Board (1989 to 2011).
Stephen J. Gutman Trustee 1985-present Vice President and 30 None
Age: 69 Associate Broker, Corcoran
Group (real estate) (2003 to
present); President and
Managing Member, Beau-
Brummell Soho LLC
(licensing of menswear
specialty retailing and other
activities) (1995 to 2009);
President, SJG Marketing,
Inc. (2009 to present).
William J. Shea Trustee 2004-present Executive Chairman, 30 Director, Boston Private
Age: 65 Caliber ID, Inc. (formerly Financial Holdings (2004 to
Lucid, Inc.) (medical present); Chairman,
devices) (2007 to present); Demoullas Supermarkets
Managing Partner, DLB (1999 to present).
Capital, LLC (private
equity) (2006 to 2007).
85
SUNAMERICA INCOME FUNDS
TRUSTEE AND OFFICER INFORMATION -- MARCH 31, 2013 -- (UNAUDITED)
(CONTINUED)
NUMBER OF
TERM OF FUNDS IN
POSITION(S) OFFICE AND FUND COMPLEX
NAME, ADDRESS HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER TRUSTEESHIP(S)
AND DATE OF BIRTH* THE FUND TIME SERVED(4) DURING PAST 5 YEARS TRUSTEE(1) HELD BY TRUSTEE(2)
------------------- ----------- -------------- ----------------------------- ------------ --------------------
INTERESTED TRUSTEE
Peter A. Harbeck(3) Trustee 1995 to President, CEO and 79 None
Age: 59 present Director, SunAmerica,
(1995 to present); Director,
SunAmerica Capital
Services, Inc. ("SACS")
(1993 to present);
Chairman, Advisor Group,
Inc. (2004 to present).
OFFICERS
John T. Genoy President 2007 to Chief Financial Officer, N/A N/A
Age: 44 present SunAmerica (2002 to
present); Senior Vice
President, SunAmerica
(2003 to present); Chief
Operating Officer,
SunAmerica (2006 to
present).
Donna M. Handel Treasurer 2002 to Senior Vice President, N/A N/A
Age: 46 present SunAmerica (2004 to
present).
Gregory N. Bressler Chief 2005 to Senior Vice President and N/A N/A
Age: 47 Legal present General Counsel,
Officer SunAmerica (2005 to
and present).
Secretary
86
SUNAMERICA INCOME FUNDS
TRUSTEE AND OFFICER INFORMATION -- MARCH 31, 2013 -- (UNAUDITED)
(CONTINUED)
NUMBER OF
TERM OF FUNDS IN
POSITION(S) OFFICE AND FUND COMPLEX
NAME, ADDRESS HELD WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER TRUSTEESHIP(S)
AND DATE OF BIRTH* FUND TIME SERVED(4) DURING PAST 5 YEARS TRUSTEE(1) HELD BY TRUSTEE(2)
------------------- ------------- -------------- ----------------------------- ------------ --------------------
Timothy Pettee Vice 2004 to Chief Investment Officer, N/A N/A
Age: 55 President present SunAmerica (2003 to
present).
Michael Cheah Vice 2000 to Senior Vice President, N/A N/A
Age: 53 President present SunAmerica (1999 to
present).
James Nichols Vice 2006 to Director, President and N/A N/A
Age: 47 President present CEO, SACS (2006 to
present); Senior Vice
President, SunAmerica
(2002 to present).
Katherine Stoner Chief June 2011 Vice President, SunAmerica N/A N/A
Age: 56 Compliance to present Asset Management Corp.
Officer (May 2011 to present); Vice
("CCO") President, The Variable
Annuity Life Insurance
Company ("VALIC") and
Western National Life
Insurance Company
("WNL") (2006 to present);
Deputy General Counsel
and Secretary, VALIC and
WNL (2007 to present);
Vice President, VALIC
Financial Advisors, Inc. and
VALIC Retirement Services
Company (2010 to present).
Gregory R. Kingston Vice 2002 to Vice President, SunAmerica N/A N/A
Age: 47 President present (2001 to present).
and
Assistant
Treasurer
Nori L. Gabert Vice 2002 to Vice President and Deputy N/A N/A
Age: 59 President present General Counsel,
and SunAmerica (2005 to
Assistant present).
Secretary
87
SUNAMERICA INCOME FUNDS
TRUSTEE AND OFFICER INFORMATION -- MARCH 31, 2013 -- (UNAUDITED)
(CONTINUED)
NUMBER OF
TERM OF FUNDS IN
POSITION(S) OFFICE AND FUND COMPLEX
NAME, ADDRESS HELD WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER TRUSTEESHIP(S)
AND DATE OF BIRTH* FUND TIME SERVED(4) DURING PAST 5 YEARS TRUSTEE(1) HELD BY TRUSTEE(2)
-------------------- ------------- -------------- -------------------------- ------------ --------------------
Matthew J. Hackethal Anti- 2006 to Chief Compliance Officer, N/A N/A
Age: 41 Money present SunAmerica (2006 to
Laundering present).
Compliance
Officer
--------
* The business address for each Trustee and Officer is Harborside Financial
Center, 3200 Plaza 5, Jersey City, NJ 07311-4992.
(1)The term "Fund Complex" means two or more registered investment companies
that hold themselves out to investors as related companies for purposes of
investment services or have a common investment adviser or an investment
adviser that is an affiliated person of the investment adviser. The "Fund
Complex" includes the Trust (4 funds), SunAmerica Equity Funds (3 funds),
SunAmerica Series, Inc. (7 portfolios), SunAmerica Money Market Funds, Inc.
(1 fund); Anchor Series Trust (8 portfolios), SunAmerica Senior Floating
Rate Fund, Inc. (1 fund), SunAmerica Series Trust (40 portfolios), VALIC
Company I (34 portfolios), VALIC Company II (15 portfolios), Seasons Series
Trust (21 portfolios) and SunAmerica Specialty Series (6 portfolios).
(2)Trusteeships of companies required to report to the Commission under the
Securities Exchange Act of 1934 (i.e. "public companies") or other
investment companies regulated under the 1940 Act.
(3)Mr. Harbeck is an "interested person" of the Funds, as defined within the
1940 Act, because he is an officer and a director of the Adviser and a
director of the principal underwriter of the Trust.
(4)Trustees serve until their successors are duly elected and qualified,
subject to the Trustees' retirement plan as discussed in Note 9 of the
financial statements. Each officer will hold office for an indefinite term,
until the date he or she resigns or retires or until his/her successor is
duly elected and qualifies.
Additional information concerning the Trustees and Officers is contained in the
Statement of Additional Information and is available without charge by calling
(800) 858-8850.
88
SUNAMERICA INCOME FUNDS
SHAREHOLDER TAX INFORMATION -- MARCH 31, 2013 -- (UNAUDITED)
Certain tax information regarding the Fund is required to be provided to
shareholders based upon each Fund's income and distributions for the taxable
year ended March 31, 2013. The information and distributions reported herein
may differ from the information and distributions taxable to the shareholders
for the calendar year ending December 31, 2013. The information necessary to
complete your income tax returns will be included with your Form 1099-DIV which
will be sent to shareholders in early 2014.
For the year ended March 31, 2013, the Funds paid the following long-term
capital gains dividends along with percentage of ordinary income dividends that
qualified for the 70% dividends received deduction for corporations:
NET QUALIFYING % FOR THE
LONG-TERM 70% DIVIDENDS
CAPITAL GAINS RECEIVED DEDUCTION
------------- --------------------
U.S. Government Securities Fund Class A. $ -- -- %
U.S. Government Securities Fund Class B. -- --
U.S. Government Securities Fund Class C. -- --
GNMA Fund Class A....................... 0.04 --
GNMA Fund Class B....................... 0.04 --
GNMA Fund Class C....................... 0.04 --
Strategic Bond Fund Class A............. -- 0.56
Strategic Bond Fund Class B............. -- 0.56
Strategic Bond Fund Class C............. -- 0.56
High Yield Bond Fund Class A............ -- 2.57
High Yield Bond Fund Class B............ -- 2.57
High Yield Bond Fund Class C............ -- 2.57
For the year ended March 31, 2013, certain dividends paid by the Strategic Bond
Fund and High Yield Bond Fund may be subject to a maximum tax rate of 15%, as
provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the
distributions paid during the fiscal year, the following represents the maximum
amount that may be considered qualified dividend income:
AMOUNT
--------
Strategic Bond Fund.. $141,241
High Yield Bond Fund. 195,274
89
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (unaudited)
As required by the Securities and Exchange Commission, the graphs on the
following pages compare the performance of a $10,000 investment in the
SunAmerica Income Funds' portfolios to a similar investment in an index. Please
note that "inception", as used herein, reflects the date on which a specific
class of shares commenced operations. It is important to note that the
SunAmerica Income Funds are professionally managed mutual funds, while the
indices are not available for investment and are unmanaged. The comparison is
shown for illustrative purposes only. The graphs present the performance of the
largest class of that particular Fund. The performance of the other classes
will vary based upon the difference in sales charges and fees assessed to
shareholders of that class.
90
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
The SunAmerica U.S. Government Securities Fund Class A shares returned 1.84%
(before maximum sales charge) for the 12-month period ended March 31, 2013. The
Fund trailed its benchmark, the Bank of America Merrill Lynch ("BofA ML") U.S.
Treasury Master Index/*/, which returned 3.23% during the same period.
The U.S. Treasury market enjoyed a strong return during the annual period, as
the yield on the 10-year U.S. Treasury note began the annual period at the
start of April 2012 at 2.22%, fell to a record low of 1.43% in July and then
rose to end the 2012 calendar year at 1.78%. The 10-year U.S. Treasury yield
then gained only modestly to 1.86% by the end of March 2013. Most of the
sector's rally can be attributed to the second quarter of 2012 when the 10-year
U.S. Treasury note produced a total return of nearly 6%, as measured by the
BofA ML 10-Year Treasury Index./*/ During the second quarter of 2012, evidence
of slowing global economic growth, including weakened U.S. economic data and a
deepening recession in the Eurozone, as well as renewed tensions in Europe
drove U.S. Treasury yields to multi-decade lows. There were brief rallies in
U.S. Treasuries during the lead-up to the November 6, 2012 U.S. elections, and
again in the last days of 2012, as investors focused on the late negotiations
over U.S. fiscal policies. U.S. Treasuries rebounded again in February 2013, as
market volatility increased primarily on worries about U.S. fiscal policy
gridlock and Italy's elections. For the third and fourth quarters of 2012 and
the first quarter of 2013 overall, however, non-U.S. Treasury sectors performed
better amidst a broad "risk on" trade, while the U.S. Treasury market, as
measured by the BofA ML 10-Year Treasury Index, posted flat to slightly
negative returns.
Primarily as a result of the Fed's accommodative monetary policy, U.S. Treasury
yields fell across the spectrum of maturities for the annual period overall,
but yields declined most for the 10-year U.S. Treasury. The U.S. Treasury yield
curve flattened during the annual period as a whole, meaning the difference in
yields between 2-year and 30-year U.S. Treasuries narrowed, due to decreased
fears of inflation.
Not surprisingly, the Fund's performance was impacted significantly during the
annual period by fluctuations in underlying U.S. Treasury security performance.
During the second quarter of 2012, when U.S. Treasury yields declined with
intensifying investor concerns, the Fund delivered positive returns. During the
latter three quarters of the annual period, when U.S. Treasury yields generally
rose as accommodative central bank policy dominated investor sentiment, the
Fund lost ground.
Security selection was the primary driver of performance during the annual
period, particularly amongst U.S. Treasury securities, where we focused on
intermediate-term and longer-term maturities, which outperformed shorter-term
maturities during the annual period. Also contributing positively to the Fund's
annual results was its duration and yield curve positioning. The Fund held a
longer duration position than the BofA ML U.S. Treasury Master Index through
much of the annual period, which helped as interest rates declined overall.
The primary detractor from the Fund's results was its allocation decisions,
specifically its exposure to mortgage-backed security pass-throughs, including
Government National Mortgage Association (GNMA) securities, and agency
mortgage-backed securities, whose performance broadly lagged that of U.S.
Treasuries during the annual period. Also detracting was a sizable position in
cash and cash equivalents, as fixed income assets overall generated a higher
return than cash. We modestly decreased the Fund's allocation to cash during
the annual period, but still maintained a sizable position as we felt market
conditions warranted a more defensive and conservative portfolio stance. The
Fund had an average weighting of 11.95% of its total net assets in cash and
cash equivalents during the annual period.
--------
Past performance is no guarantee of future results.
U.S. Government guarantee applies only to the underlying securities of the
Fund's portfolio and not to the Fund shares. Interest rates and bond prices
typically move inversely to each other; therefore, as with any bond fund, the
value of your investment in this Fund may go up or down in response to changes
in interest rates.
*The BANK OF AMERICA MERRILL LYNCH (BOFA ML) U.S. TREASURY MASTER INDEX tracks
the performance of U.S. dollar denominated sovereign debt publicly issued by
the U.S. government in its domestic market. The BANK OF AMERICA MERRILL LYNCH
(BOFA ML) 10-YEAR TREASURY INDEX is a sub-index of the BofA ML U.S. Treasury
Master Index that measures the total return performance of U.S. Treasury bonds
with maturities of 10 years or longer. Indices are not managed and an investor
cannot invest directly into an index.
Securities listed may or may not be a part of current Fund construction.
91
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
Over the past ten years, $10,000 invested in U.S. Government Securities Fund
Class A shares would have increased to $13,892. The same amount invested in
securities mirroring the performance of the BofA Merrill Lynch U.S. Treasury
Master Index would be valued at $15,756.
[CHART]
BofA Merrill
U.S. Government Lynch U.S.
Securities Treasury Master
Fund Class A# Index**
------------------ ---------------------
3/31/2003 9,525 10,000
4/30/2003 9,561 10,046
5/31/2003 9,797 10,326
6/30/2003 9,734 10,263
7/31/2003 9,198 9,828
8/31/2003 9,287 9,883
9/30/2003 9,617 10,177
10/31/2003 9,477 10,026
11/30/2003 9,486 10,039
12/31/2003 9,573 10,127
1/31/2004 9,658 10,212
2/29/2004 9,764 10,335
3/31/2004 9,839 10,432
4/30/2004 9,518 10,104
5/31/2004 9,479 10,070
6/30/2004 9,540 10,111
7/31/2004 9,631 10,205
8/31/2004 9,814 10,414
9/30/2004 9,830 10,439
10/31/2004 9,909 10,519
11/30/2004 9,830 10,380
12/31/2004 9,909 10,481
1/31/2005 9,989 10,557
2/28/2005 9,941 10,474
3/31/2005 9,899 10,440
4/30/2005 10,080 10,620
5/31/2005 10,166 10,749
6/30/2005 10,196 10,815
7/31/2005 10,086 10,671
8/31/2005 10,234 10,841
9/30/2005 10,104 10,698
10/31/2005 9,995 10,617
11/30/2005 10,041 10,667
12/31/2005 10,176 10,776
1/31/2006 10,169 10,746
2/28/2006 10,192 10,763
3/31/2006 10,065 10,651
4/30/2006 9,989 10,608
5/31/2006 9,970 10,613
6/30/2006 9,995 10,647
7/31/2006 10,131 10,776
8/31/2006 10,291 10,934
9/30/2006 10,384 11,034
10/31/2006 10,443 11,091
11/30/2006 10,558 11,206
12/31/2006 10,472 11,114
1/31/2007 10,441 11,097
2/28/2007 10,623 11,280
3/31/2007 10,593 11,274
4/30/2007 10,641 11,333
5/31/2007 10,530 11,234
6/30/2007 10,474 11,228
7/31/2007 10,617 11,415
8/31/2007 10,749 11,595
9/30/2007 10,806 11,657
10/31/2007 10,895 11,748
11/30/2007 11,179 12,106
12/31/2007 11,179 12,120
1/31/2008 11,404 12,426
2/29/2008 11,470 12,561
3/31/2008 11,526 12,652
4/30/2008 11,377 12,438
5/31/2008 11,217 12,288
6/30/2008 11,296 12,390
7/31/2008 11,304 12,440
8/31/2008 11,468 12,597
9/30/2008 11,559 12,679
10/31/2008 11,479 12,661
11/30/2008 12,066 13,341
12/31/2008 12,467 13,814
1/31/2009 12,123 13,389
2/28/2009 12,058 13,316
3/31/2009 12,303 13,617
4/30/2009 12,106 13,358
5/31/2009 11,985 13,224
6/30/2009 11,999 13,198
7/31/2009 12,084 13,251
8/31/2009 12,182 13,374
9/30/2009 12,291 13,479
10/31/2009 12,303 13,471
11/30/2009 12,398 13,661
12/31/2009 12,110 13,301
1/31/2010 12,254 13,511
2/28/2010 12,282 13,564
3/31/2010 12,210 13,449
4/30/2010 12,330 13,591
5/31/2010 12,552 13,825
6/30/2010 12,760 14,083
7/31/2010 12,788 14,178
8/31/2010 13,036 14,469
9/30/2010 12,936 14,469
10/31/2010 12,835 14,443
11/30/2010 12,789 14,345
12/31/2010 12,622 14,083
1/31/2011 12,527 14,084
2/28/2011 12,577 14,072
3/31/2011 12,592 14,064
4/30/2011 12,725 14,226
5/31/2011 12,899 14,451
6/30/2011 12,831 14,407
7/31/2011 13,028 14,670
8/31/2011 13,406 15,081
9/30/2011 13,670 15,322
10/31/2011 13,574 15,206
11/30/2011 13,693 15,317
12/31/2011 13,815 15,462
1/31/2012 13,825 15,532
2/29/2012 13,753 15,421
3/31/2012 13,642 15,262
4/30/2012 13,815 15,495
5/31/2012 14,016 15,779
6/30/2012 13,971 15,719
7/31/2012 14,103 15,887
8/31/2012 14,085 15,866
9/30/2012 14,039 15,811
10/31/2012 13,995 15,784
11/30/2012 14,032 15,875
12/31/2012 13,987 15,796
1/31/2013 13,831 15,646
2/28/2013 13,895 15,739
3/31/2013 13,892 15,756
U.S. GOVERNMENT SECURITIES FUND
Class A Class B Class C
------------------ ------------------ ------------------
Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative
Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -2.98% 1.84% -2.76% 1.18% 0.29% 1.28%
--------------------------------------------------------------------------
5 Year Return 2.80% 20.53% 2.78% 16.68% 3.13% 16.69%
--------------------------------------------------------------------------
10 Year Return 3.34% 45.85% 3.30% 38.33% 3.18% 36.70%
--------------------------------------------------------------------------
Since Inception* 4.88% 165.65% 5.62% 339.69% 4.37% 80.77%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 10/1/93; Class B: 03/3/86; Class C: 06/1/99.
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 4.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
For the 12-month period ending March 31, 2013, the SunAmerica U.S. Government
Securities Fund Class A returned -2.98%, compared to 3.23% for the BofA Merrill
Lynch U.S. Treasury Master Index. (The performance table and graph do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 4.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. Class B shares of the Fund
convert automatically to Class A shares approximately eight years after
purchase. The fund's daily net asset values are not guaranteed and shares are
not insured by the FDIC, the Federal Reserve Board or any other agency. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be higher or lower than the original
cost. Current performance may be higher or lower than that shown. Performance
as of the most recent month end is available at www.safunds.com.
** The BofA Merrill Lynch U.S. Treasury Master Index tracks the performance of
U.S. dollar denominated sovereign debt publicly issued by the U.S.
government in its domestic market. Indices are not managed and an investor
cannot invest directly into an index.
92
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
SUNAMERICA GNMA FUND
The SunAmerica GNMA Fund Class A shares returned -0.34% (before maximum
sales charge) for the 12-month period ended March 31, 2013. The Fund
underperformed its benchmark, the Bank of America Merrill Lynch ("BofA ML")
Mortgages GNMA Master Index/*/, which returned 1.66% during the same period.
U.S. agency mortgage-backed securities lagged U.S. Treasuries but posted
modestly positive returns during the annual period, attributable primarily to
the first half of the annual period. During the second quarter of 2012, a rally
in U.S Treasuries and investors' flight to quality supported positive
performance of agency mortgage-backed securities. Also, a new schedule for GNMA
mortgage insurance premiums went into effect. Premiums on newer GNMA loans were
increased, while premiums on seasoned loans, or those from pre-May 2009, were
reduced. This led to a surge in government refinance applications that lasted
into the third quarter of 2012.
The third quarter of 2012 was particularly active on the regulatory front.
In mid-August, the U.S. Treasury Department announced an amendment to the
Preferred Stock Purchase Agreement anticipated to accelerate the wind-down of
the government-sponsored enterprise ("GSE")-retained portfolios and require the
GSEs to pay all profits back to the Treasury instead of paying a fixed
dividend. The Federal Housing Finance Agency also raised the guarantee fee on
conventional mortgages. Another notable development was the Fed's announcement
of plans to purchase an additional $40 billion of agency mortgage-backed
securities per month via QE3, which, not surprisingly, triggered a significant
tightening in mortgage spreads.
Although QE3 was a near-term positive for the sector, agency mortgage-backed
securities posted modestly negative total returns during the second half of the
annual period. During the fourth quarter of 2012, investors locked in profits
from the prior two quarters. During the first quarter of 2013, doubts arose
about how long the Fed would continue its purchases in the sector given
heightened concerns that quantitative easing may not be maintained through the
end of 2013.
For the annual period overall, 30-year Fannie Maes and Freddie Macs
outperformed 30-year GNMAs on an absolute-return basis, due mainly to shrinking
demand for GNMAs. The exception, however, was during the second quarter of 2012
when 30-year GNMAs marginally outperformed, as the Home Affordable Refinancing
Program triggered faster pre-payment speeds in Fannie Maes and Freddie Macs.
Detracting most from the Fund's results during the annual period was
individual issue selection within the GNMA sector, particularly our emphasis on
higher coupon securities. The Fund was significantly overweight relative to its
benchmark index in 5.5% coupon securities and was underweight securities with
4% to 4.5% coupons relative to the benchmark. Lower coupon securities
outperformed higher coupon mortgages during the annual period as a whole on
increased Fed purchases. Thus, such positioning hurt the Fund's relative
results for the annual period overall, though it helped during the first
quarter of 2013 when lower coupons lagged higher coupons as some investors
moved up in coupon to protect themselves against a further sell-off in rates.
Another detractor from the Fund's results was a sizable position in cash and
cash equivalents, as fixed income assets overall generated a higher return than
cash. We had modestly increased the Fund's allocation to cash during the annual
period as we felt market conditions warranted a more defensive and conservative
portfolio stance. The Fund had an average weighting of 10% of its total net
assets in cash and cash equivalents during the annual period.
Contributing positively to the Fund's results relative to its benchmark was
its allocation to U.S. Treasury securities. As indicated earlier, U.S.
Treasuries, which are not a component of the BofA ML Mortgages GNMA Master
Index, outperformed mortgage-backed securities during the annual period.
Also contributing positively to the Fund's results was its duration and
yield curve positioning. The Fund held a longer duration position than the BofA
ML Mortgages GNMA Master Index through much of the annual period, which helped
as interest rates declined overall.
--------
Past performance is no guarantee of future results.
U.S. Government guarantee applies only to the underlying securities of the
Fund's portfolio and not to the Fund shares. Interest rates and bond prices
typically move inversely to each other. Therefore, as with any bond fund, the
value of your investment in this Fund may go up or down in response to changes
in interest rates.
/*/The Bank of America Merrill Lynch (BofA ML) Mortgages GNMA Master Index is a
subset of the BofA ML U.S. Mortgage Backed Securities Index including all
securities issued by Ginnie Mae except for interest-only fixed rate mortgage
pools and hybrids. The BofA ML U.S. Mortgage Backed Securities Index tracks
the performance of U.S. dollar denominated fixed rate and hybrid residential
mortgage pass-through securities publicly issued by U.S. agencies in the
U.S. domestic market. Indices are not managed and an investor cannot invest
directly into an index.
Securities listed may or may not be a part of current Fund construction.
93
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
Over the past ten years, $10,000 invested in GNMA Fund Class A shares would
have increased to $14,353. The same amount invested in securities mirroring the
performance of the BofA Merrill Lynch Mortgages GNMA Master Index would be
valued at $16,433.
[CHART]
BofA Merrill Lynch
Mortgages GNMA Master
GNMA Fund Class A# Index**
------------------- ---------------------
3/31/2003 9,521 10,000
4/30/2003 9,572 10,031
5/31/2003 9,707 10,031
6/30/2003 9,685 10,063
7/31/2003 9,168 9,892
8/31/2003 9,281 9,971
9/30/2003 9,593 10,122
10/31/2003 9,498 10,092
11/30/2003 9,489 10,129
12/31/2003 9,603 10,210
1/31/2004 9,678 10,260
2/29/2004 9,756 10,329
3/31/2004 9,813 10,368
4/30/2004 9,556 10,211
5/31/2004 9,521 10,185
6/30/2004 9,603 10,276
7/31/2004 9,706 10,367
8/31/2004 9,858 10,513
9/30/2004 9,868 10,531
10/31/200 9,948 10,617
11/30/200 9,915 10,594
12/31/200 9,981 10,660
1/31/2005 10,040 10,726
2/28/2005 9,984 10,695
3/31/2005 9,951 10,666
4/30/2005 10,061 10,776
5/31/2005 10,124 10,853
6/30/2005 10,151 10,888
7/31/2005 10,107 10,854
8/31/2005 10,198 10,943
9/30/2005 10,129 10,898
10/31/2005 10,068 10,849
11/30/2005 10,091 10,875
12/31/2005 10,208 11,017
1/31/2006 10,233 11,050
2/28/2006 10,244 11,069
3/31/2006 10,168 10,997
4/30/2006 10,119 10,959
5/31/2006 10,080 10,931
6/30/2006 10,088 10,935
7/31/2006 10,229 11,091
8/31/2006 10,370 11,271
9/30/2006 10,446 11,338
10/31/2006 10,514 11,421
11/30/2006 10,599 11,531
12/31/2006 10,573 11,520
1/31/2007 10,555 11,519
2/28/2007 10,707 11,660
3/31/2007 10,700 11,685
4/30/2007 10,749 11,742
5/31/2007 10,664 11,681
6/30/2007 10,596 11,618
7/31/2007 10,706 11,717
8/31/2007 10,835 11,849
9/30/2007 10,911 11,948
10/31/2007 11,035 12,071
11/30/2007 11,293 12,310
12/31/2007 11,304 12,317
1/31/2008 11,485 12,523
2/29/2008 11,582 12,584
3/31/2008 11,630 12,630
4/30/2008 11,555 12,609
5/31/2008 11,410 12,547
6/30/2008 11,466 12,556
7/31/2008 11,462 12,550
8/31/2008 11,601 12,705
9/30/2008 11,699 12,760
10/31/2008 11,559 12,593
11/30/2008 12,057 13,040
12/31/2008 12,286 13,268
1/31/2009 12,201 13,271
2/28/2009 12,258 13,350
3/31/2009 12,441 13,556
4/30/2009 12,412 13,594
5/31/2009 12,404 13,617
6/30/2009 12,375 13,604
7/31/2009 12,484 13,746
8/31/2009 12,572 13,830
9/30/2009 12,650 13,936
10/31/2009 12,728 14,017
11/30/2009 12,903 14,207
12/31/2009 12,653 13,981
1/31/2010 12,833 14,166
2/28/2010 12,889 14,220
3/31/2010 12,883 14,247
4/30/2010 12,986 14,350
5/31/2010 13,201 14,544
6/30/2010 13,348 14,732
7/31/2010 13,474 14,895
8/31/2010 13,533 14,955
9/30/2010 13,458 14,886
10/31/2010 13,560 15,049
11/30/2010 13,551 15,020
12/31/2010 13,429 14,926
1/31/2011 13,410 14,944
2/28/2011 13,481 14,994
3/31/2011 13,499 15,016
4/30/2011 13,645 15,206
5/31/2011 13,863 15,414
6/30/2011 13,817 15,450
7/31/2011 14,001 15,614
8/31/2011 14,279 15,880
9/30/2011 14,244 15,900
10/31/2011 14,278 15,944
11/30/2011 14,348 15,993
12/31/2011 14,411 16,097
1/31/2012 14,405 16,143
2/29/2012 14,371 16,158
3/31/2012 14,402 16,165
4/30/2012 14,458 16,277
5/31/2012 14,440 16,366
6/30/2012 14,427 16,377
7/31/2012 14,514 16,523
8/31/2012 14,503 16,521
9/30/2012 14,516 16,548
10/31/2012 14,445 16,476
11/30/2012 14,398 16,455
12/31/2012 14,409 16,476
1/31/2013 14,352 16,367
2/28/2013 14,370 16,413
3/31/2013 14,353 16,433
GNMA FUND
Class A Class B Class C
------------------ ------------------ ------------------
Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative
Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -5.07% -0.34% -4.85% -0.97% -1.94% -0.97%
--------------------------------------------------------------------------
5 Year Return 3.30% 23.42% 3.28% 19.46% 3.64% 19.56%
--------------------------------------------------------------------------
10 Year Return 3.68% 50.75% 3.51% 41.26% 3.52% 41.37%
--------------------------------------------------------------------------
Since Inception* 5.44% 194.63% 6.87% 631.65% 4.71% 89.13%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 10/11/93; Class B: 04/25/83; Class C: 06/1/99.
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 4.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
For the 12-month period ending March 31, 2013, the SunAmerica GNMA Fund Class A
returned -5.07%, compared to 1.66% for the BofA Merrill Lynch Mortgages GNMA
Master Index. (The performance table and graph do not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption of
fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 4.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. Class B shares of the Fund
convert automatically to Class A shares approximately eight years after
purchase. The fund's daily net asset values are not guaranteed and shares are
not insured by the FDIC, the Federal Reserve Board or any other agency. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be higher or lower than the original
cost. Current performance may be higher or lower than that shown. Performance
as of the most recent month end is available at www.safunds.com.
** The BofA Merrill Lynch Mortgages GNMA Master Index is a subset of the BofA
Merrill Lynch U.S. Mortgage Backed Securities Index including all securities
issued by Ginnie Mae except for interest-only fixed rate mortgage pools and
hybrids. The BofA Merrill Lynch U.S. Mortgage Backed Securities Index tracks
the performance of U.S. dollar denominated fixed rate and hybrid residential
mortgage pass-through securities publicly issued by U.S. agencies in the
U.S. domestic market. Indices are not managed and an investor cannot invest
directly into an index.
94
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
The SunAmerica Strategic Bond Fund Class A shares returned 8.64% (before
maximum sales charge) for the 12-month period ended March 31, 2013. The Fund
outperformed its benchmark, the Barclays U.S. Aggregate Bond Index/*/, which
returned 3.77% during the same annual period.
The Fund's outperformance relative to its benchmark can be attributed primarily
to sector selection during the annual period. More specifically, the Fund's
allocations to high yield corporate bonds, investment grade corporate bonds and
emerging market bonds boosted performance, as generally strong market
conditions, driven by good fundamentals, reasonable valuations and a strong
demand for fixed income overall supported a rally in riskier asset classes.
These positive contributors more than offset positions in securitized products
and U.S. Treasuries, which detracted as traditional "flight to quality" sectors
lagged.
Security selection within each asset class was also a positive contributor to
the Fund's results. Particularly helpful was a keen focus on individual credit
opportunities. Top performing individual securities during the annual period
included telecommunications giant Sprint and financial guaranty and mortgage
guaranty insurance provider Assured Guaranty. Weak performers included
positions in integrated telephone company CenturyLink and in the sovereign debt
of Argentina.
While the Fund remained U.S.-centric, portions of the Fund were allocated to
non-U.S. dollar denominated sovereign and emerging markets bonds, which meant
country exposure had an impact on results during the annual period. Exposure to
bonds in Mexico and Australia added value, while certain bond positions in
Hungary and Poland detracted from relative results.
Also contributing positively to the Fund's results during the annual period was
its duration and yield curve positioning overall. The Fund had a modestly
longer duration position than the Barclays U.S. Aggregate Bond Index, given our
view that interest rates would stay low. As interest rates moved even lower
across the yield curve, such positioning helped. A marginally long duration
stance compared to the benchmark index also positioned the Fund to take
advantage of the "roll" down the yield curve. The Fund's yield curve
positioning, which overweighted 10-year and 30-year maturities, was a positive
contributor to performance.
Early in the annual period, we modestly reduced the Fund's target weight to
high yield corporate bonds and correspondingly increased its target weight to
investment grade corporate bonds, as we moved to a lower overall risk level
following the rally induced by the European Central Bank's (the "ECB")
Long-Term Refinancing Operations initiative, which enabled higher risk
countries in the Eurozone to roll their existing debt maturities and therefore
avoid the contagion that might come from a possible restructuring or default.
We also made the change based on our view that economic growth was beginning to
disappoint. Then, in June 2012, following the Spanish bank bailout and based on
our view that more aggressive central bank activity was coming, we increased
the Fund's allocations to both high yield corporate bonds and emerging market
bonds and decreased its exposure to investment grade corporate bonds. In
November and December 2012, we further increased the Fund's exposure to high
yield corporate bonds and emerging market bonds. Central bank action in the
form of Outright Monetary Transactions from the ECB and QE3 from the Federal
Reserve signaled that the risk rally would likely continue despite the
then-looming fiscal cliff in the U.S. and other ongoing fiscal issues. We
reduced the Fund's exposure to investment grade corporate bonds and securities
products to accommodate the target change.
95
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
With these changes, the Fund ended the annual period on March 31, 2013
overweight, within the credit sector, to financial institutions. The Fund was
also overweight relative to its benchmark index in asset-backed securities. On
the same date, the Fund was underweight relative to the Barclays U.S. Aggregate
Bond Index in U.S. Treasuries, agency securities and supranationals. Within the
credit sector, the Fund was underweight industrials and utilities. The Fund had
a neutral weighting relative to its benchmark index in commercial
mortgage-backed securities at the end of the annual period.
--------
Past performance is no guarantee of future results.
Interest rates and bond prices typically move inversely to each other;
therefore, as with any bond fund, the value of an investment in this Fund may
go up or down in response to changes in interest rates. High-yield bonds tend
to have lower interest rate risk than higher-quality bonds of similar maturity
but carry greater credit and default risk. Investing internationally involves
special risks, such as currency fluctuations and economic and political
instability.
*The Barclays 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
into an index.
Securities listed may or may not be a part of current Fund construction.
96
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
Over the past ten years, $10,000 invested in Strategic Bond Fund Class A shares
would have increased to $20,367. The same amount invested in securities
mirroring the performance of the Barclays U.S. Aggregate Bond Index would be
valued at $16,327.
[CHART]
Strategic Bond Fund Barclays Capital U.S.
Class A# Aggregate Bond Index**
------------------- ---------------------
3/31/2003 9,536 10,000
4/30/2003 9,899 10,083
5/31/2003 10,206 10,271
6/30/2003 10,292 10,250
7/31/2003 10,032 9,906
8/31/2003 10,183 9,971
9/30/2003 10,525 10,235
10/31/2003 10,583 10,140
11/30/2003 10,736 10,164
12/31/2003 11,018 10,267
1/31/2004 11,206 10,350
2/29/2004 11,194 10,462
3/31/2004 11,256 10,541
4/30/2004 11,015 10,266
5/31/2004 10,871 10,225
6/30/2004 11,065 10,283
7/31/2004 11,195 10,385
8/31/2004 11,428 10,583
9/30/2004 11,599 10,612
10/31/2004 11,805 10,701
11/30/2004 12,046 10,615
12/31/2004 12,378 10,713
1/31/2005 12,405 10,780
2/28/2005 12,510 10,717
3/31/2005 12,275 10,662
4/30/2005 12,330 10,806
5/31/2005 12,456 10,923
6/30/2005 12,615 10,982
7/31/2005 12,668 10,882
8/31/2005 12,863 11,022
9/30/2005 12,845 10,908
10/31/2005 12,682 10,822
11/30/2005 12,772 10,870
12/31/2005 12,944 10,973
1/31/2006 13,120 10,974
2/28/2006 13,206 11,010
3/31/2006 13,114 10,902
4/30/2006 13,208 10,882
5/31/2006 13,041 10,871
6/30/2006 13,021 10,894
7/31/2006 13,305 11,041
8/31/2006 13,515 11,210
9/30/2006 13,572 11,309
10/31/2006 13,741 11,383
11/30/2006 13,949 11,516
12/31/2006 13,969 11,449
1/31/2007 13,948 11,444
2/28/2007 14,116 11,620
3/31/2007 14,173 11,621
4/30/2007 14,307 11,683
5/31/2007 14,287 11,595
6/30/2007 14,147 11,561
7/31/2007 13,970 11,657
8/31/2007 14,030 11,800
9/30/2007 14,363 11,889
10/31/2007 14,595 11,996
11/30/2007 14,456 12,212
12/31/2007 14,515 12,246
1/31/2008 14,498 12,452
2/29/2008 14,475 12,469
3/31/2008 14,498 12,512
4/30/2008 14,688 12,486
5/31/2008 14,673 12,394
6/30/2008 14,489 12,384
7/31/2008 14,393 12,374
8/31/2008 14,384 12,491
9/30/2008 13,606 12,324
10/31/2008 12,011 12,033
11/30/2008 11,779 12,424
12/31/2008 12,247 12,888
1/31/2009 12,366 12,774
2/28/2009 12,207 12,726
3/31/2009 12,370 12,903
4/30/2009 13,034 12,965
5/31/2009 13,616 13,059
6/30/2009 13,879 13,133
7/31/2009 14,466 13,345
8/31/2009 14,686 13,483
9/30/2009 15,230 13,625
10/31/2009 15,354 13,692
11/30/2009 15,567 13,869
12/31/2009 15,620 13,652
1/31/2010 15,742 13,861
2/28/2010 15,805 13,913
3/31/2010 16,120 13,896
4/30/2010 16,386 14,040
5/31/2010 15,925 14,158
6/30/2010 16,197 14,380
7/31/2010 16,722 14,534
8/31/2010 16,904 14,721
9/30/2010 17,232 14,737
10/31/2010 17,563 14,789
11/30/2010 17,240 14,704
12/31/2010 17,439 14,545
1/31/2011 17,615 14,562
2/28/2011 17,784 14,599
3/31/2011 17,856 14,607
4/30/2011 18,184 14,792
5/31/2011 18,258 14,985
6/30/2011 18,071 14,941
7/31/2011 18,355 15,179
8/31/2011 17,961 15,400
9/30/2011 17,461 15,512
10/31/2011 18,070 15,529
11/30/2011 17,774 15,516
12/31/2011 18,060 15,686
1/31/2012 18,509 15,824
2/29/2012 18,792 15,820
3/31/2012 18,748 15,733
4/30/2012 18,973 15,908
5/31/2012 18,875 16,052
6/30/2012 19,044 16,058
7/31/2012 19,545 16,280
8/31/2012 19,663 16,290
9/30/2012 19,891 16,313
10/31/2012 20,010 16,345
11/30/2012 20,128 16,371
12/31/2012 20,239 16,347
1/31/2013 20,246 16,233
2/28/2013 20,303 16,314
3/31/2013 20,367 16,327
STRATEGIC BOND FUND
Class A Class B Class C
------------------ ------------------ ------------------
Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative
Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 3.54% 8.64% 3.62% 7.62% 6.62% 7.62%
--------------------------------------------------------------------------
5 Year Return 6.02% 40.48% 5.95% 35.49% 6.35% 36.02%
--------------------------------------------------------------------------
10 Year Return 7.37% 113.59% 7.31% 102.57% 7.20% 100.43%
--------------------------------------------------------------------------
Since Inception* 6.80% 276.51% 7.19% 273.68% 6.81% 249.47%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 11/1/93; Class B: 04/1/94; Class C: 04/1/94.
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 4.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
For the 12-month period ending March 31, 2013, the SunAmerica Strategic Bond
Fund Class A returned 3.54%, compared to 3.77% for the Barclays U.S. Aggregate
Bond Index. (The performance table and graph do not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption of
fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 4.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. Class B shares of the Fund
convert automatically to Class A shares approximately eight years after
purchase. The fund's daily net asset values are not guaranteed and shares are
not insured by the FDIC, the Federal Reserve Board or any other agency. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be higher or lower than the original
cost. Current performance may be higher or lower than that shown. Performance
as of the most recent month end is available at www.safunds.com.
** The Barclays 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 into an index.
97
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
SUNAMERICA HIGH YIELD BOND FUND
The SunAmerica High Yield Bond Fund Class A shares returned 11.42% (before
maximum sales charge) for the 12-month period ended March 31, 2013. The Fund
underperformed its benchmark, the Citigroup High Yield Market Index/*/, which
returned 12.60% during the same period.
The high yield bond market began the annual period under pressure, but
rebounded in late June 2012 on positive news out of Europe to post returns that
only modestly trailed duration-equivalent U.S. Treasuries for the second
quarter of 2012. For the last nine months of the annual period, high yield
bonds outperformed duration-equivalent U.S. Treasuries each month, extending
their winning streak to 10 consecutive months, as renewed monetary stimulus
from global central banks, positive U.S. economic data and earnings trends
outweighed concerns about fiscal tightening, renewed European debt problems and
discussion from the Federal Reserve (the "Fed"). Fund flows provided a robust
technical, or supply/demand, tailwind in 2012; net retail flows were positive
in 39 of the 52 weeks, and totaled $31.9 billion for the calendar year. New
issuance set a record in 2012, with more than $344.6 billion priced.
Fundamentals also remained strong. The trailing 12-month par-weighted default
rate declined to 1.14% in December 2012, the lowest since October 2011 and well
below the 25-year average of 4.20%. In the first quarter of 2013, the technical
backdrop remained supportive albeit less robust, as investor demand turned
negative, and mutual fund outflows totaled $239.5 million. However, new
issuance kept up its rapid pace, with more than $101.3 billion priced--the
highest quarterly total ever. The trailing 12-month par-weighted default rate
ended March 2013 at 1.24%. Issuers meaningfully strengthened their balance
sheets and liquidity positions since the 2008 credit crisis, and proceeds from
new issuance were used mainly to refinance existing debt, although there were
also signs during the annual period of a pickup in shareholder-friendly
actions, such as merger and acquisition activity and leveraged buyouts. The
sector's average yield of 5.67% at the end of the annual period compared
favorably to other fixed income sectors.
Amidst the broadly supportive but somewhat volatile macro backdrop, the Fund
maintained a slightly defensive positioning throughout the annual period, with
a bias toward higher quality, lower yielding securities. This positioning
detracted from the Fund's results, as the high yield bond market rallied
substantially, with lower quality bonds outperforming higher quality bonds.
During the annual period, the BB-rated securities in the Citigroup High Yield
Market Index returned 10.47%, while securities rated B returned 13.32% and
securities rated CCC returned 15.54%. As such, the Fund's overweight allocation
to investment grade credit and BB-rated securities detracted from relative
performance as did an underweight allocation to B-rated securities.
Sector allocation also detracted from the Fund's results relative to its
benchmark index during the annual period. Overweight allocations to the
comparatively weak media cable and chemicals industries weighed on the Fund's
relative performance. A residual cash position in a rising market further
detracted. Only partially offsetting these detractors was the positive impact
of the Fund's overweight allocation to the comparatively strong financial
services industry and its underweight allocations to the energy and retail
stores industries.
Security selection contributed positively to the Fund's performance during the
annual period. Effective security selection in the paper, financial services
and chemicals industries significantly more than offset weaker security
selection in the health care, wireless, and supermarkets industries. Among the
greatest individual contributors to the Fund's relative returns during the
annual period were holdings in Caraustar Industries, a recycled paperboard and
packaging solutions company; TXU, an energy utility; Ally Financial, a retail
bank and automobile financing services provider; and Lloyds TSB Bank, a U.K.
retail bank. Not owning a position in Cengage Learning, a leading provider of
teaching, learning and research solutions for the academic, professional and
library markets, also boosted relative results. Detracting from the Fund's
relative results during the annual period were positions in Wornick, a leading
supplier of convenience foods and military rations to institutional customers;
Radiation Therapy Services, a radiation therapy services provider to cancer
patients; and Savient Pharmaceuticals, a broadly diversified pharmaceuticals
company. Not owning certain securities in wireless and wireline communications
operator Sprint Nextel and consumer credit company America General Finance,
which performed well, also hurt.
From a credit quality perspective, security selection among BB-rated and
B-rated securities proved effective as did selection among investment grade
credits. These positive contributors more than offset weaker security selection
among CCC and below-rated securities during the annual period.
98
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
As of March 31, 2013, the Fund was overweight relative to the Citigroup High
Yield Market Index in the financial institutions, technology and media cable
industries. The Fund was underweight its benchmark index in the energy,
packaging and metals & mining industries at the end of the annual period.
--------
Past performance is no guarantee of future results.
High-yield bonds tend to have lower interest-rate risk than higher-quality
bonds of similar maturity but carry greater credit and default risk. Interest
rates and bond prices typically move inversely to each other; therefore, as
with any bond fund, the value of an investment in this Fund may go up or down
in response to changes in interest rates.
*The Citigroup High Yield Market Index is a broad-based, unmanaged index of
high-yield securities. Indices are not managed and an investor cannot invest
directly into an index.
Securities listed may or may not be a part of current Fund construction.
99
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
Over the past ten years, $10,000 invested in High Yield Bond Fund Class A
shares would have increased to $20,818. The same amount invested in securities
mirroring the performance of the Citigroup High Yield Market Index would be
valued at $25,436.
[CHART]
High Yield Bond Fund Citigroup High
Class A# Yield Market Index**
-------------------- --------------------
3/31/2003 9,531 10,000
4/30/2003 10,098 10,621
5/31/2003 10,279 10,692
6/30/2003 10,619 11,024
7/31/2003 10,564 10,861
8/31/2003 10,697 10,973
9/30/2003 11,073 11,298
10/31/2003 11,265 11,560
11/30/2003 11,457 11,721
12/31/2003 11,839 12,022
1/31/2004 12,241 12,230
2/29/2004 12,086 12,163
3/31/2004 12,014 12,239
4/30/2004 12,037 12,197
5/31/2004 11,833 11,986
6/30/2004 12,157 12,165
7/31/2004 12,244 12,321
8/31/2004 12,386 12,546
9/30/2004 12,558 12,717
10/31/2004 12,851 12,980
11/30/2004 13,309 13,130
12/31/2004 13,707 13,319
1/31/2005 13,786 13,300
2/28/2005 14,028 13,500
3/31/2005 13,608 13,121
4/30/2005 13,384 12,940
5/31/2005 13,649 13,206
6/30/2005 13,985 13,428
7/31/2005 14,352 13,622
8/31/2005 14,654 13,679
9/30/2005 14,549 13,542
10/31/2005 14,358 13,441
11/30/2005 14,519 13,476
12/31/2005 14,716 13,595
1/31/2006 15,036 13,809
2/28/2006 15,074 13,878
3/31/2006 15,188 13,978
4/30/2006 15,401 14,054
5/31/2006 15,387 14,045
6/30/2006 15,336 13,984
7/31/2006 15,524 14,135
8/31/2006 15,850 14,371
9/30/2006 16,038 14,570
10/31/2006 16,264 14,779
11/30/2006 16,386 15,025
12/31/2006 16,579 15,206
1/31/2007 16,664 15,348
2/28/2007 16,845 15,562
3/31/2007 16,860 15,585
4/30/2007 17,085 15,796
5/31/2007 17,137 15,915
6/30/2007 16,900 15,611
7/31/2007 16,304 15,100
8/31/2007 16,463 15,283
9/30/2007 16,868 15,686
10/31/2007 17,005 15,787
11/30/2007 16,689 15,438
12/31/2007 16,730 15,485
1/31/2008 16,104 15,290
2/29/2008 15,811 15,092
3/31/2008 15,861 15,027
4/30/2008 16,484 15,690
5/31/2008 16,616 15,773
6/30/2008 16,438 15,253
7/31/2008 16,031 15,024
8/31/2008 16,014 15,064
9/30/2008 14,732 13,857
10/31/2008 12,056 11,732
11/30/2008 10,588 10,588
12/31/2008 10,623 11,473
1/31/2009 10,964 12,094
2/28/2009 10,714 11,636
3/31/2009 10,681 12,040
4/30/2009 11,668 13,502
5/31/2009 12,461 14,315
6/30/2009 12,783 14,755
7/31/2009 13,547 15,659
8/31/2009 13,616 15,864
9/30/2009 14,257 16,779
10/31/2009 14,548 17,042
11/30/2009 14,700 17,225
12/31/2009 15,162 17,805
1/31/2010 15,317 18,003
2/28/2010 15,369 17,994
3/31/2010 15,854 18,525
4/30/2010 16,245 18,940
5/31/2010 15,544 18,317
6/30/2010 15,696 18,539
7/31/2010 16,242 19,173
8/31/2010 16,256 19,146
9/30/2010 16,755 19,713
10/31/2010 17,108 20,207
11/30/2010 16,912 19,978
12/31/2010 17,234 20,355
1/31/2011 17,587 20,816
2/28/2011 17,830 21,091
3/31/2011 17,928 21,171
4/30/2011 18,127 21,472
5/31/2011 18,228 21,565
6/30/2011 18,013 21,368
7/31/2011 18,216 21,629
8/31/2011 17,318 20,791
9/30/2011 16,885 20,182
10/31/2011 17,721 21,358
11/30/2011 17,436 20,904
12/31/2011 17,873 21,478
1/31/2012 18,343 22,097
2/29/2012 18,701 22,602
3/31/2012 18,685 22,589
4/30/2012 18,885 22,813
5/31/2012 18,646 22,526
6/30/2012 19,010 23,006
7/31/2012 19,326 23,417
8/31/2012 19,475 23,682
9/30/2012 19,734 24,000
10/31/2012 19,774 24,193
11/30/2012 19,979 24,350
12/31/2012 20,252 24,737
1/31/2013 20,462 25,053
2/28/2013 20,491 25,149
3/31/2013 20,818 25,436
HIGH YIELD BOND FUND
Class A Class B Class C
------------------ ------------------ ------------------
Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative
Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 6.11% 11.42% 6.70% 10.70% 9.67% 10.67%
--------------------------------------------------------------------------
5 Year Return 4.55% 31.25% 4.57% 26.77% 4.92% 27.16%
--------------------------------------------------------------------------
10 Year Return 7.61% 118.42% 7.60% 108.10% 7.43% 104.74%
--------------------------------------------------------------------------
Since Inception* 5.16% 116.82% 5.12% 105.32% 5.19% 89.33%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 11/2/98; Class B: 11/2/98; Class C: 08/21/00.
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 4.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares, was deducted
from the initial investment in the Fund and that the CDSCs with respect to
the Class B and Class C shares have been deducted, as applicable.
For the 12-month period ending March 31, 2013, the SunAmerica High Yield Bond
Fund Class A returned 6.11%, compared to 12.60% for the Citigroup High Yield
Market Index. (The performance table and graph do not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption of
fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 4.75%, Class B: 4.00% Contingent
Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. Class B shares of the Fund
convert automatically to Class A shares approximately eight years after
purchase. The fund's daily net asset values are not guaranteed and shares are
not insured by the FDIC, the Federal Reserve Board or any other agency. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be higher or lower than the original
cost. Current performance may be higher or lower than that shown. Performance
as of the most recent month end is available at www.safunds.com.
** The Citigroup High Yield Market Index is a broad-based, unmanaged index of
high-yield securities. Indices are not managed and an investor cannot invest
directly into an index.
100
[LOGO] SunAmerica
Mutual Funds
HARBORSIDE FINANCIAL CENTER
3200 PLAZA 5
JERSEY CITY, NJ 07311-4992
TRUSTEES VOTING PROXIES ON DISCLOSURE OF
Richard W. Grant TRUST PORTFOLIO QUARTERLY PORTFOLIO
Peter A. Harbeck SECURITIES HOLDINGS
Dr. Judith L. Craven A description of the The Trust is required
William F. Devin policies and to file its com-plete
Stephen J. Gutman proce-dures that the schedule of portfolio
William J. Shea Trust uses to holdings with the U.S.
determine how to vote Securities and
OFFICERS proxies relating to Exchange Commission
John T. Genoy, President secu-rities held in a for its first and
Donna M. Handel, Fund's portfolio, third fiscal quarters
Treasurer which is available in on Form N-Q. The
James Nichols, Vice the Trust's Statement Trust's Forms N-Q are
President of Additional available on the
Timothy Pettee, Vice Information, may be U.S. Securities and
President ob-tained without Exchange Commis-sion
Michael Cheah, Vice charge upon request, website at
President by calling (800) www.sec.gov. You can
Katherine Stoner, Vice 858-8850. The also review and obtain
President and Chief in-formation is also copies of the Forms
Compliance Officer available from the N-Q at the U.S.
Gregory N. Bressler, EDGAR database on the Securities and
Chief Legal Officer U.S. Secu-rities and Exchange Commission
and Secretary Exchange Commission's Public Refer-ence Room
Nori L. Gabert, Vice website at in Washington DC
President and http://www.sec.gov. (information on the
Assistant Secretary operation of the
Kathleen Fuentes, DELIVERY OF Public Reference Room
Assistant Secretary SHAREHOLDER DOCUMENTS may be ob-tained by
John E. McLean, The Funds have adopted calling
Assistant Secretary a policy that allows 1-800-SEC-0330).
Gregory R. Kingston, them to send only one
Vice President and copy of a Fund's PROXY VOTING RECORD ON
Assistant Treasurer prospectus, proxy SUNAMERICA INCOME FUNDS
John E. Smith Jr., material, annual Information regarding
Assistant Treasurer report and semi-annual how the Funds voted
Matthew J. Hackethal, report (the proxies relating to
Anti-Money Laundering "shareholder securities held in the
Compliance Officer documents") to Funds during the most
shareholders with recent twelve month
INVESTMENT ADVISER multiple accounts period ended June 30
SunAmerica Asset residing at the same is available, once
Management Corp. "household." This filed with the U.S.
Harborside Financial practice is called Securities and
Center householding and Exchange Commission,
3200 Plaza 5 reduces Fund expenses, without charge, upon
Jersey City, NJ which benefits you and request, by calling
07311-4992 other shareholders. (800) 858-8850 or on
Unless the Funds the U.S. Securities
DISTRIBUTOR receive instructions and Exchange
SunAmerica Capital to the con-trary, you Commission's website
Services, Inc. will only receive one at http://www.sec.gov.
Harborside Financial copy of the
Center shareholder documents. This report is
3200 Plaza 5 The Funds will submitted solely for
Jersey City, NJ continue to household the general
07311-4992 the share-holder information of
documents shareholders of the
SHAREHOLDER SERVICING indefinitely, until we Funds. Distribution of
AGENT are instructed this report to persons
SunAmerica Fund otherwise. If you do other than
Services, Inc. not wish to shareholders of the
Harborside Financial participate in Funds is authorized
Center householding please only in con-nection
3200 Plaza 5 contact Shareholder with a currently
Jersey City, NJ Services at (800) effective pro-spectus,
07311-4992 858-8850 ext. 6010 or setting forth details
send a written request of the Funds, which
CUSTODIAN AND TRANSFER with your name, the must precede or
AGENT name of your fund(s) accom-pany this report.
State Street Bank and and your account
Trust Company number(s) to
P.O. Box 5607 SunAmerica Mutual
Boston, MA 02110 Funds c/o BFDS, P.O.
Box 219186, Kansas
City MO, 64121-9186.
We will resume
individual mailings
for your account
within thirty (30)
days of receipt of
your request.
[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.SAFUNDS.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.safunds.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.safunds.com. Read
the prospectus carefully before investing.
WWW.SAFUNDS.COM
INANN - 3/13
[LOGO]
Sun America
Mutual Funds
Item 2. Code of Ethics.
The SunAmerica Income Funds (the "registrant") has adopted a Code of
Ethics applicable to its Principal Executive and Principal Accounting
Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002.
During the fiscal year ended 2013, there were no reportable amendments,
waivers or implicit waivers to a provision of the Code of Ethics that
applies to the registrant's Principal Executive and Principal
Accounting Officers.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that William J. Shea,
the Chairman of the registrant's Audit Committee, qualifies as an audit
committee financial expert, as defined in Item 3(b) of Form N-CSR.
Mr. Shea is considered to be "independent" for purposes of Item 3(a)(2)
of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two
fiscal years for professional services rendered by the registrant's
principal accountant were as follows:
2012 2013
(a) Audit Fees ....................$ 146,507 $ 166,506
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 78,121 $ 64,173
(d) All Other Fees ................$ 0 $ 0
Audit Fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
principal accountant in connection with statutory and regulatory
filings. Tax Fees principally include tax compliance, tax advice, tax
planning and preparation of tax returns.
Aggregate fees billed to the investment adviser and Adviser Affiliates
(as defined below in Item 4(e)) that are required to be pre-approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for
the last two fiscal years for services rendered by the registrant's
principal accountant were as follows:
2012 2013
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 0 $ 0
(d) All Other Fees ................$ 0 $ 0
(e) (1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser ("Adviser Affiliates") that provides ongoing
services to the registrant, if the engagement by the investment
adviser or Adviser Affiliates relates directly to the operations and
financial reporting of the registrant. The audit committee has not
presently established any pre-approval policies and procedures that
permit the pre-approval of the above services other than by the full
audit committee. Certain de minimis exceptions are allowed for non-
audit services in accordance with Rule 2-01(c)(7)(i)(C) of Regulation
S-X as set forth in the registrant's audit committee charter.
(2) No services included in (b)-(d) above in connection with fees
billed to the registrant or the investment adviser or Adviser
Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-
01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the
preceding fiscal year by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser,
and Adviser Affiliates that provides ongoing services to the registrant
for 2012 and 2013 were $139,982 and $117,763, respectively.
(h) 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 in Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Exhibits.
(a) (1) Code of Ethics applicable to its Principal Executive and
Principle Accounting Officers pursuant to Section 406 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.406.
Code of Ethics.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Income Funds
By: /s/ John T. Genoy
-------------------
John T. Genoy
President
Date: June 6, 2013
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: June 6, 2013
By: /s/ Donna M. Handel
-------------------
Donna M. Handel
Treasurer
Date: June 6, 2013