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, LLC
Harborside Financial Center,
3200 Plaza 5
Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
-----------------------------
Date of fiscal year end: March 31
--------------------------
Date of reporting period: March 31, 2015
-------------------------
Item 1. Reports to Stockholders
ANNUAL REPORT 2015
SUNAMERICA
Income Funds
[PHOTO]
[LOGO]
MARCH 31, 2015 ANNUAL REPORT
SUNAMERICA INCOME FUNDS
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND (SGTAX)
SUNAMERICA STRATEGIC BOND FUND (SDIAX)
SUNAMERICA FLEXIBLE CREDIT FUND (SHNAX)*
--------
* Effective October 1, 2014, the name of the SunAmerica High Yield Bond Fund
changed to the SunAmerica Flexible Credit Fund.
TABLE OF CONTENTS
SHAREHOLDER LETTER.......................................... 2
EXPENSE EXAMPLE............................................. 4
STATEMENTS OF ASSETS AND LIABILITIES........................ 6
STATEMENTS OF OPERATIONS.................................... 8
STATEMENTS OF CHANGES IN NET ASSETS......................... 9
FINANCIAL HIGHLIGHTS........................................ 11
PORTFOLIO OF INVESTMENTS.................................... 14
NOTES TO FINANCIAL STATEMENTS............................... 65
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..... 82
RESULTS OF SPECIAL SHAREHOLDER MEETING...................... 83
TRUSTEE AND OFFICER INFORMATION............................. 84
SHAREHOLDER TAX INFORMATION................................. 87
COMPARISONS: PORTFOLIOS VS. INDICES......................... 88
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, 2015. It was a period wherein fixed income
market performance was primarily driven by economic conditions and monetary
policies of global central banks, both of which diverged as the fiscal year
progressed, as well as by concerns surrounding geopolitical events. For the
annual period overall, the Barclays U.S. Aggregate Bond Index*, a broad measure
of the U.S. fixed income market, returned 5.72%.
As the annual period began, accommodative tones across the major central banks,
emerging market economic growth concerns and geopolitical tensions in Ukraine
and the Middle East overshadowed constructive economic releases in advanced
economies, keeping risk appetites suppressed. In turn, global fixed income
markets rallied as expectations of prolonged easy monetary policy and an
improving, albeit below trend, macro environment suppressed volatility. At the
same time, central bank monetary policy diverged. The European Central Bank
(ECB) unveiled a set of unconventional monetary policy measures in an effort to
fight disinflationary forces and rekindle growth in the Eurozone. The People's
Bank of China (PBOC) also announced a set of stimulus measures. The Bank of
Japan (BoJ) maintained its easy monetary policy framework, while the Bank of
England signaled a possible increase in rates before the end of the year and
the U.S. Federal Reserve (the "Fed") hinted that rate hikes might start in
2015. Virtually all of the key fixed income sectors generated positive absolute
returns during the second quarter of 2014, as global bond yields generally
decreased and credit spreads tightened.
Fixed income markets reflected a relatively cautious tone during the third
calendar quarter amid persistent geopolitical tensions and renewed concerns
about global economic growth. The ECB surprised markets by cutting its
benchmark lending and deposit rates further and announcing it would buy
asset-backed securities and covered bonds. The programs are part of the ECB's
broader effort to encourage lending and fend off fears of deflation. China's
central bank joined the ECB in boosting liquidity by injecting funds into its
nation's largest banks in an effort to combat weakening growth. However, the
pro-democracy protests in Hong Kong created new worries for China's economy,
which was already flagging because of the downturn in the real estate market.
Meanwhile, it was reported that Japan's economy contracted by an annualized
7.1% in the second calendar quarter as consumption plummeted after the April
2014 value-added tax increase. The policy-easing moves by the ECB and PBOC
highlighted the divergent paths of the major central banks, as the Bank of
England and the Fed leaned toward tighter policies. The flight-to-quality
rally, combined with expectations for continued easy policy by major central
banks fueled by a weakening global recovery and falling inflation, led to a
decline in global government bond yields but mixed performance by spread, or
non-government bond, sectors, as spread widening offset falling yields in many
cases.
The fourth quarter of 2014 was a microcosm of the predominant year-long global
fixed income trends - falling U.S. Treasury yields and U.S. dollar strength.
More broadly, markets were impacted by the accelerating decline in oil prices
and heightened vulnerabilities in Greece and certain other emerging market
countries, such as Brazil and Russia. Monetary policy and economic growth in
the U.S. increasingly diverged from other parts of the world. The ECB and BoJ
adopted more accommodative policy stances, while the Fed charted a course for
policy normalization, ending its quantitative easing asset purchases as
scheduled in October 2014 in what was ultimately a non-event, as the move was
widely expected. In the U.K., a combination of falling inflation and slowing
domestic demand, against a backdrop of weakness in the Eurozone, suggested that
the Bank of England would not tighten policy any time soon. Many riskier assets
lost ground. Global government bonds gained amid the flight-to-quality and
expectations that subpar growth and low inflation would pressure central banks
to remain accommodative. Absolute returns in the major fixed income sectors
were mixed, as the decline in government bond yields was not enough to offset
credit spread widening in sectors such as high yield and emerging markets.
Global government bond yields continued to decline in the first quarter of
2015, as many central banks stepped up their efforts to ward off deflation and
revive growth with further monetary policy easing measures. Even the Fed gave
the appearance that it was in no hurry to raise rates. Nevertheless, market
volatility was high as investors wondered when the Fed would begin to hike
rates; oil
2
prices extending their descent and reignited worries about Greece also
contributed to market volatility. Geopolitical concerns surrounding the Iran
nuclear negotiations and the Saudi Arabia-led military campaign in Yemen also
supported inflows to perceived safe haven assets. Many global government yields
fell, and credit spreads tightened. Globally, most spread sectors posted
positive absolute returns amid falling interest rates and outperformed
duration-equivalent government bonds.
For the annual period overall, U.S. Treasuries posted solid positive returns,
with the yield on the 10-year U.S. Treasury having fallen approximately 80
basis points+ to 1.92% by the end of March 2015. U.S. investment-grade
corporate bonds, mortgage-backed securities and emerging markets debt performed
better than duration-equivalent U.S. Treasury securities. Commercial
mortgage-backed securities, Treasury inflation protected securities (TIPS),
asset-backed securities and U.S. high-yield corporate bonds also posted
positive returns but lagged the total returns of U.S. Treasury securities by
comparison. Sovereign international bonds posted negative returns for the
annual period.
On the following pages, you will find detailed financial statements and
portfolio information for each of the SunAmerica Income Funds during the 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 adviser or get in touch with us directly at
800-858-8850 or www.safunds.com.
Sincerely,
THE SUNAMERICA INCOME FUNDS INVESTMENT PROFESSIONALS
Timothy Campion Robert Vanden Assem Christopher Jones David L. Albrycht
Andrew Doulos Anthony King John Yovanovic Frank Ossino
Kara Murphy Rajeev Mittal John Dunlevy Jonathan Stanley
--------
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, 2015 -- (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, 2014 and held until March 31, 2015.
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, 2015" to estimate the expenses you paid on your account
during this period. The "Expenses Paid During the Six Months Ended March 31,
2015" column and the "Annualized Expense Ratio" column do 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, 2015" column and the "Annualized Expense Ratio" column
do not include administrative fees that may apply to qualified retirement plan
accounts. See the Funds' prospectuses, 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, 2015" column would have been higher and the "Ending Account Value" column
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 each Fund's actual expense
ratio and an annual rate of return of 5% before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the 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, 2015"
column and the "Annualized Expense Ratio" column do 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, 2015" column and the "Annualized Expense Ratio" column
do not include administrative fees that may apply to qualified retirement plan
accounts and accounts held through financial institutions. See the Funds'
prospectuses, 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, 2015" column
would have been higher and the "Ending Account Value" column 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 Funds' 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, 2015 -- (UNAUDITED) (CONTINUED)
ACTUAL HYPOTHETICAL
------------------------------------------ ------------------------------------------
ENDING ACCOUNT
ENDING ACCOUNT EXPENSES PAID VALUE USING EXPENSES PAID
VALUE USING DURING THE A HYPOTHETICAL DURING THE
BEGINNING ACTUAL SIX MONTHS BEGINNING 5% ANNUAL SIX MONTHS
ACCOUNT VALUE RETURN AT ENDED ACCOUNT VALUE RETURN AT ENDED ANNUALIZED
AT OCTOBER 1, MARCH 31, MARCH 31, AT OCTOBER 1, MARCH 31, MARCH 31, EXPENSE
FUND 2014 2015 2015* 2014 2015 2015* RATIO*
---- ------------- -------------- ------------- ------------- -------------- ------------- ----------
U.S. GOVERNMENT SECURITIES
Class A#................. $1,000.00 $1,026.67 $ 5.00 $1,000.00 $1,020.00 $ 4.99 0.99%
Class C# ................ $1,000.00 $1,022.30 $ 8.27 $1,000.00 $1,016.75 $ 8.25 1.64%
STRATEGIC BOND
Class A.................. $1,000.00 $1,013.03 $ 6.57 $1,000.00 $1,018.40 $ 6.59 1.31%
Class B.................. $1,000.00 $1,009.62 $ 9.97 $1,000.00 $1,015.01 $10.00 1.99%
Class C ................. $1,000.00 $1,009.80 $ 9.82 $1,000.00 $1,015.16 $ 9.85 1.96%
Class W#................. $1,000.00 $1,009.87 $ 2.05 $1,000.00 $1,018.95 $ 6.04 1.20%
FLEXIBLE CREDIT+
Class A#................. $1,000.00 $1,011.77 $ 7.27 $1,000.00 $1,017.70 $ 7.29 1.45%
Class C# ................ $1,000.00 $1,008.58 $10.52 $1,000.00 $1,014.46 $10.55 2.10%
Class W#................. $1,000.00 $1,015.69 $ 6.28 $1,000.00 $1,018.70 $ 6.29 1.25%
--------
* Expenses are equal to each Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 182 days then divided
by 365 days (to reflect the one-half year period) except for the Strategic
Bond Class W "Actual Return" information which was multiplied by 62 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 adviser 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,
2015" and the "Annualized Expense Ratio" would have been higher.
+ See Note 1
5
SUNAMERICA INCOME FUNDS
STATEMENTS OF ASSETS AND LIABILITIES -- MARCH 31, 2015
U.S. GOVERNMENT STRATEGIC FLEXIBLE
SECURITIES BOND CREDIT
FUND FUND FUND+
--------------- ------------ ------------
ASSETS:
Investments at value
(unaffiliated)*.............. $198,593,211 $469,259,148 $180,822,227
Repurchase agreements (cost
approximates value).......... 12,561,000 365,000 --
------------ ------------ ------------
Total investments............ 211,154,211 469,624,148 180,822,227
------------ ------------ ------------
Cash.......................... 886 493,648 12,858,107
Foreign cash*................. -- 175,330 6,864
Receivable for:
Shares of beneficial
interest sold.............. 65,887 604,307 6,789,632
Dividends and interest....... 707,774 6,814,147 2,068,568
Investments sold............. -- 7,341,572 636,108
Prepaid expenses and other
assets....................... 1,156 4,098 869
Due from investment adviser
for expense
reimbursements/fee waivers... 119,801 2,998 140,019
Unrealized appreciation on
forward foreign currency
contracts.................... -- 1,404,308 --
------------ ------------ ------------
Total assets.................. 212,049,715 486,464,556 203,322,394
------------ ------------ ------------
LIABILITIES:
Payable for:
Shares of beneficial
interest redeemed.......... 254,253 1,087,017 8,066,117
Investments purchased........ -- 9,509,233 8,242,837
Investment advisory and
management fees............ 116,745 257,391 115,880
Distribution and service
maintenance fees........... 76,484 264,715 74,647
Transfer agent fees and
expenses................... 48,377 100,023 42,617
Trustees' fees and expenses.. 1,647 2,141 1,405
Other accrued expenses....... 119,870 160,006 119,343
Dividends payable............. 16,327 216,311 107,940
Unrealized depreciation on
forward foreign currency
contracts.................... -- 95,331 --
------------ ------------ ------------
Total liabilities............. 633,703 11,692,168 16,770,786
------------ ------------ ------------
Net assets.................... $211,416,012 $474,772,388 $186,551,608
============ ============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial
interest, $0.01.............. $ 217,314 $ 1,359,113 $ 537,738
Paid-in capital............... 213,411,311 535,334,281 246,414,586
------------ ------------ ------------
213,628,625 536,693,394 246,952,324
Accumulated undistributed net
investment income (loss)..... (117,198) 1,552,245 468,481
Accumulated undistributed net
realized gain (loss) on
investments, futures
contracts, options
contracts, securities sold
short and foreign exchange
transactions................. (10,938,350) (55,243,358) (58,151,763)
Unrealized appreciation
(depreciation) on investments 8,842,935 (9,470,325) (2,716,300)
Unrealized foreign exchange
gain (loss) on other assets
and liabilities.............. -- 1,240,432 (1,134)
------------ ------------ ------------
Net assets.................... $211,416,012 $474,772,388 $186,551,608
============ ============ ============
*Cost
Investments (unaffiliated)... $189,750,276 $478,729,473 $183,538,527
============ ============ ============
Foreign cash................. $ -- $ 190,001 $ 7,998
============ ============ ============
--------
+ See Note 1
See Notes to Financial Statements
6
SUNAMERICA INCOME FUNDS
STATEMENTS OF ASSETS AND LIABILITIES -- MARCH 31, 2015 -- (CONTINUED)
U.S. GOVERNMENT STRATEGIC FLEXIBLE
SECURITIES BOND CREDIT
FUND FUND FUND+
--------------- ------------ ------------
CLASS A (UNLIMITED SHARES AUTHORIZED):
Net assets............................ $187,417,482 $235,093,222 $127,508,014
Shares of beneficial interest issued
and outstanding...................... 19,262,983 67,394,602 36,810,289
Net asset value and redemption price
per share (excluding any applicable
contingent deferred sales charge).... $ 9.73 $ 3.49 $ 3.46
Maximum sales charge (4.75% of
offering price)...................... $ 0.49 $ 0.17 $ 0.17
------------ ------------ ------------
Maximum offering price to public...... $ 10.22 $ 3.66 $ 3.63
============ ============ ============
CLASS B (UNLIMITED SHARES AUTHORIZED):
Net assets............................ $ -- $ 39,733,427 $ --
Shares of beneficial interest issued
and outstanding...................... -- 11,393,554 --
Net asset value, offering and
redemption price per share
(excluding any applicable contingent
deferred sales charge)............... $ -- $ 3.49 $ --
============ ============ ============
CLASS C (UNLIMITED SHARES AUTHORIZED):
Net assets............................ $ 23,998,530 $184,281,656 $ 45,411,221
Shares of beneficial interest issued
and outstanding...................... 2,468,447 52,630,397 13,031,466
Net asset value, offering and
redemption price per share
(excluding any applicable contingent
deferred sales charge)............... $ 9.72 $ 3.50 $ 3.48
============ ============ ============
CLASS W (UNLIMITED SHARES AUTHORIZED):
Net assets............................ $ -- $ 15,664,083 $ 13,632,373
Shares of beneficial interest issued
and outstanding...................... -- 4,492,785 3,932,046
Net asset value, offering and
redemption price per share........... $ -- $ 3.49 $ 3.47
============ ============ ============
--------
+ See Note 1
See Notes to Financial Statements
7
SUNAMERICA INCOME FUNDS
STATEMENTS OF OPERATIONS -- FOR THE YEAR ENDED MARCH 31, 2015
U.S. GOVERNMENT STRATEGIC FLEXIBLE
SECURITIES BOND CREDIT
FUND FUND FUND+
--------------- ------------ -----------
INVESTMENT INCOME:
Dividends (unaffiliated)............................................................ $ -- $ 198,727 $ 118,811
Interest (unaffiliated)............................................................. 3,440,911 24,013,503 7,504,155
---------- ------------ -----------
Total investment income*........................................................... 3,440,911 24,212,230 7,622,966
---------- ------------ -----------
EXPENSES:
Investment advisory and management fees............................................. 994,336 3,129,675 965,317
Distribution and service maintenance fees:
Class A............................................................................ 470,607 896,612 291,456
Class B............................................................................ 44,407 435,077 85,681
Class C............................................................................ 144,085 1,920,838 331,137
Service Fees -- Class W............................................................. -- 1,019 5,631
Transfer agent fees and expenses:
Class A............................................................................ 311,834 579,119 192,381
Class B............................................................................ 11,365 97,466 20,469
Class C............................................................................ 34,383 428,959 75,230
Class W............................................................................ -- 2,252 10,122
Registration fees:
Class A............................................................................ 28,863 38,622 38,206
Class B............................................................................ 11,051 18,106 11,770
Class C............................................................................ 19,758 27,143 22,543
Class W............................................................................ -- 3,796 32,563
Custodian and accounting fees....................................................... 49,092 106,059 36,405
Reports to shareholders............................................................. 44,047 101,488 67,160
Audit and tax fees.................................................................. 51,182 68,113 66,669
Legal fees.......................................................................... 10,807 23,498 58,578
Trustees' fees and expenses......................................................... 8,096 26,227 22,853
Interest expense.................................................................... -- 203 72
Other expenses...................................................................... 18,820 24,769 28,194
---------- ------------ -----------
Total expenses before fee waivers, expense reimbursements and expense recoupments.. 2,252,733 7,929,041 2,362,437
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 4).. (612,460) (4,688) (284,559)
---------- ------------ -----------
Net expenses....................................................................... 1,640,273 7,924,353 2,077,878
---------- ------------ -----------
Net investment income (loss).......................................................... 1,800,638 16,287,877 5,545,088
---------- ------------ -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)................................ 3,245,020 (505,897) (848,410)
Net realized foreign exchange gain (loss) on other assets and liabilities............. -- 5,103,129 173,907
---------- ------------ -----------
Net realized gain (loss) on investments and foreign currencies........................ 3,245,020 4,597,232 (674,503)
---------- ------------ -----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)........ 1,678,618 (10,845,321) (2,671,271)
Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... -- 1,230,130 (1,459)
---------- ------------ -----------
Net unrealized gain (loss) on investments and foreign currencies...................... 1,678,618 (9,615,191) (2,672,730)
---------- ------------ -----------
Net realized and unrealized gain (loss) on investments and foreign currencies......... 4,923,638 (5,017,959) (3,347,233)
---------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $6,724,276 $ 11,269,918 $ 2,197,855
========== ============ ===========
* Net of foreign withholding taxes on interest and dividends of....................... $ -- $ (7,324) $ (510)
========== ============ ===========
+ See Note 1
See Notes to Financial Statements
8
SUNAMERICA INCOME FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
U.S. GOVERNMENT
SECURITIES FUND
--------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MARCH 31, MARCH 31,
2015 2014
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ 1,800,638 $ 1,678,382
Net realized gain (loss) on investments and foreign currencies......................... 3,245,020 (2,745,233)
Net unrealized gain (loss) on investments and foreign currencies....................... 1,678,618 (3,524,139)
------------ ------------
Net increase (decrease) in net assets resulting from operations.......................... 6,724,276 (4,590,990)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (2,308,336) (2,014,439)
Net investment income (Class B)........................................................ (50,109) (46,032)
Net investment income (Class C)........................................................ (157,120) (109,939)
Net investment income (Class W)........................................................ -- --
Net realized gain on securities (Class A).............................................. -- --
Net realized gain on securities (Class B).............................................. -- --
Net realized gain on securities (Class C).............................................. -- --
Net realized gain on securities (Class W).............................................. -- --
------------ ------------
Total distributions to shareholders...................................................... (2,515,565) (2,170,410)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 7). 89,657,072 (14,422,091)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. 93,865,783 (21,183,491)
NET ASSETS:
Beginning of period...................................................................... 117,550,229 138,733,720
------------ ------------
End of period+........................................................................... $211,416,012 $117,550,229
============ ============
+ Includes accumulated undistributed net investment income (loss)........................ $ (117,198) $ (121,374)
============ ============
See Notes to Financial Statements
9
SUNAMERICA INCOME FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
STRATEGIC BOND FUND FLEXIBLE CREDIT FUND*
--------------------------- --------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2015 2014 2015 2014
------------ ------------- ------------ ------------
INCREASE (DECREASE)
IN NET ASSETS
OPERATIONS:
Net investment
income (loss)...... $ 16,287,877 $ $21,016,911 $ 5,545,088 $ 5,950,915
Net realized gain
(loss) on
investments and
foreign currencies. 4,597,232 (2,449,211) (674,503) (3,941,256)
Net unrealized gain
(loss) on
investments and
foreign currencies. (9,615,191) (11,152,263) (2,672,730) 3,788,039
------------ ------------- ------------ ------------
Net increase
(decrease) in net
assets resulting
from operations...... 11,269,918 7,415,437 2,197,855 5,797,698
------------ ------------- ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income (Class A)... (9,771,036) (12,243,178) (3,932,700) (3,680,417)
Net investment
income (Class B)... (1,366,990) (1,817,175) (363,833) (569,761)
Net investment
income (Class C)... (6,089,494) (8,212,267) (1,350,467) (1,446,220)
Net investment
income (Class W)... (27,319) -- (173,730) --
Net realized gain on
securities
(Class A).......... -- -- -- --
Net realized gain on
securities
(Class B).......... -- -- -- --
Net realized gain on
securities
(Class C).......... -- -- -- --
Net realized gain on
securities
(Class W).......... -- -- -- --
------------ ------------- ------------ ------------
Total distributions
to shareholders...... (17,254,839) (22,272,620) (5,820,730) (5,696,398)
------------ ------------- ------------ ------------
NET INCREASE
(DECREASE) IN NET
ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS (NOTE 7) (19,429,831) (149,455,773) 75,727,824 (7,703,026)
------------ ------------- ------------ ------------
TOTAL INCREASE
(DECREASE) IN NET
ASSETS............... (25,414,752) (164,312,956) 72,104,949 (7,601,726)
NET ASSETS:
Beginning of period... 500,187,140 664,500,096 114,446,659 122,048,385
------------ ------------- ------------ ------------
End of period+........ $474,772,388 $ 500,187,140 $186,551,608 $114,446,659
============ ============= ============ ============
+ Includes
accumulated
undistributed net
investment income
(loss)............... $ 1,552,245 $ (2,115,922) $ 468,481 $ 529,884
============ ============= ============ ============
* See Note 1
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
-------
03/31/11 $ 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(4) 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
03/31/14 9.91 0.14 (0.45) (0.31) (0.17) -- (0.17) 9.43 (3.11) 106,747
03/31/15 9.43 0.12 0.34 0.46 (0.16) -- (0.16) 9.73 4.94 187,417
CLASS C
-------
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(4) 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
03/31/14 9.91 0.08 (0.46) (0.38) (0.11) -- (0.11) 9.42 (3.84) 7,295
03/31/15 9.42 0.06 0.34 0.40 (0.10) -- (0.10) 9.72 4.27 23,999
RATIO
OF NET
RATIO OF INVESTMENT
EXPENSES INCOME TO
TO AVERAGE AVERAGE PORTFOLIO
NET ASSETS(3) NET ASSETS(3) TURNOVER
------------- ------------- ---------
0.99% 1.77% 254%
0.99 1.73 152
0.99 1.40 89
0.99 1.42 122
0.99 1.24 57
1.64% 1.12% 254%
1.64 1.08 152
1.64 0.76 89
1.64 0.77 122
1.64 0.61 57
--------
(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):
03/31/11 03/31/12 03/31/13 03/31/14 03/31/15
-------- -------- -------- -------- --------
U.S. Government Securities Fund Class A. 0.37% 0.39% 0.40% 0.40% 0.38%
U.S. Government Securities Fund Class C. 0.44 0.46 0.45 0.57 0.50
(4)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)
STRATEGIC BOND 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
-------
03/31/11 $3.33 $0.19 $ 0.15 $0.34 $(0.21) $-- $(0.21) $3.46 10.45% $255,546
03/31/12 3.46 0.16 0.02 0.18 (0.19) -- (0.19) 3.45 5.30 299,325
03/31/13 3.45 0.13 0.16 0.29 (0.14) -- (0.14) 3.60 8.64 336,759
03/31/14 3.60 0.14 (0.06) 0.08 (0.15) -- (0.15) 3.53 2.34 255,821
03/31/15 3.53 0.13 (0.04) 0.09 (0.13) -- (0.13) 3.49 2.70 235,093
CLASS B
-------
03/31/11 $3.32 $0.16 $ 0.17 $0.33 $(0.19) $-- $(0.19) $3.46 10.04% $ 52,171
03/31/12 3.46 0.14 0.01 0.15 (0.16) -- (0.16) 3.45 4.60 52,000
03/31/13 3.45 0.11 0.15 0.26 (0.12) -- (0.12) 3.59 7.62 56,776
03/31/14 3.59 0.12 (0.05) 0.07 (0.13) -- (0.13) 3.53 1.95 46,462
03/31/15 3.53 0.10 (0.03) 0.07 (0.11) -- (0.11) 3.49 2.01 39,733
CLASS C
-------
03/31/11 $3.34 $0.17 $ 0.16 $0.33 $(0.19) $-- $(0.19) $3.48 10.04% $250,040
03/31/12 3.48 0.14 0.02 0.16 (0.17) -- (0.17) 3.47 4.63 251,425
03/31/13 3.47 0.11 0.15 0.26 (0.12) -- (0.12) 3.61 7.62 270,965
03/31/14 3.61 0.12 (0.06) 0.06 (0.13) -- (0.13) 3.54 1.69 197,904
03/31/15 3.54 0.11 (0.04) 0.07 (0.11) -- (0.11) 3.50 2.05 184,282
CLASS W
-------
01/29/15(4)-03/31/15 $3.48 $0.01 $ 0.02 $0.03 $(0.02) $-- $(0.02) $3.49 0.99% 15,664
RATIO
OF NET
RATIO OF INVESTMENT
EXPENSES INCOME TO
TO AVERAGE AVERAGE PORTFOLIO
NET ASSETS NET ASSETS TURNOVER
---------- ---------- ---------
1.31% 5.50% 152%
1.31 4.72 144
1.30 3.70 166
1.31 4.01 158
1.30 3.62 137
1.98% 4.83% 152%
1.98 4.07 144
1.97 3.02 166
1.97 3.35 158
1.97 2.95 137
1.96% 4.85% 152%
1.96 4.09 144
1.94 3.05 166
1.96 3.37 158
1.94 2.98 137
1.20%(3)(5) 2.73%(3)(5) 137%
--------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/15
--------
Strategic Bond Fund Class W............. 0.69%(5)
(4)Inception date of class.
(5)Annualized
See Notes to Financial Statements
12
SUNAMERICA INCOME FUNDS
FINANCIAL HIGHLIGHTS -- (CONTINUED)
FLEXIBLE CREDIT FUND*
---------------------
NET GAIN
(LOSS) ON
NET INVESTMENTS DISTRIBUTIONS NET
ASSET (BOTH DIVIDENDS FROM NET ASSET NET 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 INVESTMENT BUTIONS PERIOD RETURN(2) (000'S)
-------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -----------
CLASS A
-------
03/31/11 $3.36 $0.25 $ 0.16 $0.41 $(0.27) $-- $(0.27) $3.50 12.76% $ 76,156
03/31/12 3.50 0.23 (0.08) 0.15 (0.25) -- (0.25) 3.40 4.52 81,477
03/31/13 3.40 0.20 0.18 0.38 (0.20) -- (0.20) 3.58 11.42 74,175
03/31/14 3.58 0.19 0.00 0.19 (0.18) -- (0.18) 3.59 5.60 70,713
03/31/15 3.59 0.15 (0.11) 0.04 (0.17) -- (0.17) 3.46 1.06 127,508
CLASS C
-------
03/31/11 $3.38 $0.23 $ 0.17 $0.40 $(0.25) $-- $(0.25) $3.53 12.33% $ 39,301
03/31/12 3.53 0.21 (0.09) 0.12 (0.23) -- (0.23) 3.42 3.56 36,723
03/31/13 3.42 0.18 0.18 0.36 (0.18) -- (0.18) 3.60 10.67 33,918
03/31/14 3.60 0.17 0.00 0.17 (0.16) -- (0.16) 3.61 4.92 30,595
03/31/15 3.61 0.13 (0.11) 0.02 (0.15) -- (0.15) 3.48 0.43 45,411
CLASS W
-------
10/01/14(4)-03/31/15 $3.50 $0.06 $(0.01) $0.05 $(0.08) $-- $(0.08) $3.47 1.57% 13,632
RATIO
OF NET
RATIO OF INVESTMENT
EXPENSES INCOME TO
TO AVERAGE AVERAGE PORTFOLIO
NET ASSETS(3) NET ASSETS(3) TURNOVER
------------- ------------- ---------
1.36% 7.47% 48%
1.36 6.72 52
1.36 5.82 44
1.36 5.41 49
1.41 4.50 74
2.01% 6.83% 48%
2.01 6.11 52
2.01 5.18 44
2.01 4.76 49
2.06 3.88 74
1.25%(5) 4.25%(5) 74%
--------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/11 03/31/12 03/31/13 03/31/14 03/31/15
-------- -------- -------- -------- --------
Flexible Credit Fund Class A............ 0.16% 0.18% 0.16% 0.17% 0.19%
Flexible Credit Fund Class C............ 0.16 0.19 0.16 0.18 0.20
Flexible Credit Fund Class W............ -- -- -- -- 1.12
(4)Inception date of class.
(5)Annualized
* See Note 1
See Notes to Financial Statements
13
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Government National Mtg. Assoc.. 48.2%
United States Treasury Notes.... 22.0
United States Treasury Bonds.... 8.7
Repurchase Agreement............ 5.9
Federal National Mtg. Assoc..... 5.3
United States Treasury Bills.... 4.7
Federal Home Loan Bank.......... 2.9
Federal Farm Credit Bank........ 2.1
Small Business Administration... 0.1
----
99.9%
====
CREDIT QUALITY ALLOCATION+#
Aaa...................... 99.9%
Not Rated@............... 0.1
-----
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.
14
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
-----------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 56.2%
FEDERAL FARM CREDIT BANK -- 2.1%
0.75% due 05/30/2017.................. $ 2,000,000 $ 1,994,768
1.79% due 03/12/2019.................. 2,500,000 2,500,368
-----------
4,495,136
-----------
FEDERAL HOME LOAN BANK -- 0.5%
2.14% due 12/05/2022.................. 1,000,000 985,040
-----------
FEDERAL NATIONAL MTG. ASSOC. -- 5.3%
1.25% due 09/28/2016.................. 10,000,000 10,111,560
2.25% due 10/17/2022.................. 1,000,000 995,919
-----------
11,107,479
-----------
GOVERNMENT NATIONAL MTG. ASSOC. -- 48.2%
3.50% due 11/15/2041.................. 884,913 933,730
3.50% due 03/15/2042.................. 613,283 646,832
3.50% due 06/15/2042.................. 4,074,029 4,294,951
3.50% due 07/15/2042.................. 1,441,322 1,519,480
3.50% due 02/20/2045.................. 1,995,642 2,103,597
4.00% due 03/15/2039.................. 366,460 393,487
4.00% due 04/15/2039.................. 231,181 248,231
4.00% due 06/15/2039.................. 945,849 1,015,605
4.00% due 12/15/2039.................. 443,379 476,098
4.00% due 08/15/2040.................. 487,096 524,396
4.00% due 09/15/2040.................. 760,171 818,057
4.00% due 11/15/2040.................. 610,367 656,133
4.00% due 12/15/2040.................. 1,078,444 1,163,117
4.00% due 02/15/2041.................. 610,499 656,146
4.00% due 03/15/2041.................. 368,106 396,046
4.00% due 07/15/2041.................. 703,232 756,232
4.00% due 08/15/2041.................. 1,402,307 1,508,432
4.00% due 09/15/2041.................. 2,893,092 3,113,574
4.00% due 10/15/2041.................. 1,218,247 1,311,210
4.00% due 11/15/2041.................. 3,799,960 4,082,064
4.00% due 12/15/2041.................. 1,512,693 1,628,492
4.00% due 01/15/2042.................. 2,931,120 3,171,278
4.00% due 02/15/2042.................. 1,867,538 2,016,127
4.00% due 03/15/2042.................. 478,315 514,908
4.00% due 06/15/2042.................. 906,055 972,947
4.50% due 05/15/2018.................. 226,354 236,174
4.50% due 08/15/2018.................. 224,313 234,503
4.50% due 09/15/2018.................. 659,487 690,400
4.50% due 10/15/2018.................. 847,275 888,037
4.50% due 09/15/2033.................. 667,177 741,382
4.50% due 03/15/2039.................. 198,854 219,704
4.50% due 04/15/2039.................. 211,404 233,570
4.50% due 05/15/2039.................. 828,304 915,325
4.50% due 06/15/2039.................. 2,836,506 3,133,925
4.50% due 07/15/2039.................. 1,343,035 1,483,857
4.50% due 09/15/2039.................. 428,526 473,458
4.50% due 10/15/2039.................. 282,737 312,383
4.50% due 11/15/2039.................. 368,504 407,143
4.50% due 12/15/2039.................. 1,166,578 1,289,015
4.50% due 01/15/2040.................. 502,720 556,137
4.50% due 02/15/2040.................. 2,239,099 2,479,049
4.50% due 03/15/2040.................. 1,102,627 1,219,144
4.50% due 04/15/2040.................. 1,414,518 1,564,804
4.50% due 05/15/2040.................. 517,768 572,513
4.50% due 06/15/2040.................. 653,781 723,289
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
------------------------------------------------------
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
4.50% due 07/15/2040...... $ 954,515 $1,056,449
4.50% due 08/15/2040...... 247,581 274,091
4.50% due 09/15/2040...... 212,795 235,514
4.50% due 11/15/2040...... 301,836 334,399
4.50% due 01/15/2041...... 384,612 425,800
4.50% due 02/15/2041...... 414,040 457,942
4.50% due 03/15/2041...... 2,760,460 3,055,266
4.50% due 04/15/2041...... 2,150,159 2,379,301
4.50% due 05/15/2041...... 450,911 498,526
4.50% due 06/15/2041...... 988,585 1,101,294
4.50% due 07/15/2041...... 169,731 187,528
4.50% due 08/15/2041...... 926,043 1,023,633
4.50% due 04/20/2044...... 1,626,245 1,768,013
5.00% due 04/15/2018...... 828,148 877,775
5.00% due 05/15/2018...... 178,996 189,238
5.00% due 08/15/2033...... 689,588 775,511
5.00% due 10/15/2033...... 1,175,264 1,320,861
5.00% due 05/15/2035...... 324,261 361,640
5.00% due 08/15/2035...... 631,620 705,501
5.00% due 03/15/2036...... 255,579 287,698
5.00% due 05/15/2036...... 160,339 179,823
5.00% due 09/15/2036...... 385,727 432,127
5.00% due 10/15/2036...... 183,801 204,988
5.00% due 01/15/2037...... 540,748 604,601
5.00% due 02/15/2037...... 571,441 639,276
5.00% due 03/15/2037...... 179,711 201,304
5.00% due 04/15/2037...... 1,120,171 1,250,026
5.00% due 04/15/2038...... 876,162 977,504
5.00% due 05/15/2038...... 476,288 531,191
5.00% due 08/15/2038...... 1,223,252 1,364,259
5.00% due 01/15/2039...... 364,105 407,479
5.00% due 02/15/2039...... 232,466 259,345
5.00% due 03/15/2039...... 298,959 334,692
5.00% due 04/15/2039...... 315,094 352,300
5.00% due 07/20/2039...... 2,125,585 2,384,954
5.00% due 08/15/2039...... 691,121 772,850
5.00% due 10/15/2039...... 1,455,891 1,629,157
5.00% due 11/15/2039...... 1,231,668 1,375,957
5.00% due 12/15/2039...... 1,041,281 1,164,870
5.00% due 04/15/2040...... 1,286,010 1,437,334
5.00% due 05/15/2040...... 2,278,499 2,545,099
5.50% due 06/15/2033...... 1,209,158 1,374,774
5.50% due 07/15/2033...... 219,299 249,049
5.50% due 10/15/2033...... 281,832 321,261
5.50% due 01/15/2034...... 810,035 921,205
5.50% due 02/15/2034...... 344,259 393,713
5.50% due 04/20/2035...... 770,966 873,840
5.50% due 09/15/2035...... 610,586 708,319
5.50% due 10/15/2035...... 557,399 633,183
5.50% due 02/15/2038...... 275,426 310,912
5.50% due 04/15/2038...... 158,821 179,268
5.50% due 05/15/2038...... 181,356 205,099
5.50% due 09/15/2039...... 142,925 161,326
5.50% due 03/15/2040...... 261,719 295,415
5.50% due 08/15/2040...... 203,164 229,321
6.00% due 04/15/2028...... 258,900 301,730
6.00% due 08/15/2033...... 423,934 493,799
15
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
-----------------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
GOVERNMENT NATIONAL MTG. ASSOC. (CONTINUED)
6.00% due 12/15/2033.................. $ 176,136 $ 205,220
6.00% due 07/15/2034.................. 180,214 205,097
6.00% due 12/15/2034.................. 135,309 157,042
6.00% due 09/20/2038.................. 2,170,284 2,462,250
6.50% due 10/15/2031.................. 153,657 183,690
Government National Mtg. Assoc. REMIC
Series 2010-104, Class NG
3.00% due 07/20/2038(1)............... 1,374,242 1,407,315
------------
101,932,926
------------
SMALL BUSINESS ADMINISTRATION -- 0.1%
6.30% due 06/01/2018.................. 171,103 178,308
------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $114,898,051)................... 118,698,889
------------
U.S. GOVERNMENT TREASURIES -- 30.7%
UNITED STATES TREASURY BONDS -- 8.7%
2.50% due 02/15/2045.................. 2,000,000 1,981,562
4.25% due 11/15/2040.................. 8,000,000 10,647,504
4.75% due 02/15/2041.................. 4,000,000 5,734,688
------------
18,363,754
------------
UNITED STATES TREASURY NOTES -- 22.0%
0.88% due 11/15/2017.................. 2,000,000 2,005,312
1.25% due 10/31/2015.................. 17,000,000 17,103,754
1.50% due 07/31/2016.................. 16,000,000 16,233,744
2.00% due 02/15/2022.................. 5,000,000 5,103,125
2.00% due 02/15/2025.................. 5,000,000 5,031,640
3.13% due 05/15/2019.................. 1,000,000 1,075,781
------------
46,553,356
------------
TOTAL U.S. GOVERNMENT TREASURIES
(cost $59,871,269).................... 64,917,110
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $174,769,320)................... 183,615,999
------------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
------------------------------------------------------------------
SHORT-TERM INVESTMENT SECURITIES -- 7.1%
U.S. GOVERNMENT AGENCIES -- 2.4%
Federal Home Loan Bank
0.05% due 04/15/2015
(cost $4,999,912)..................... $ 5,000,000 $ 4,999,912
------------
U.S. GOVERNMENT TREASURIES -- 4.7%
United States Treasury Bills
0.20% due 03/03/16
(cost $9,981,044)..................... 10,000,000 9,977,300
------------
TOTAL SHORT-TERM INVESTMENT SECURITIES
(cost $14,980,956).................... 14,977,212
------------
REPURCHASE AGREEMENT -- 5.9%
State Street Bank and Trust Co. Joint
Repurchase Agreement(2)
(cost $12,561,000).................... 12,561,000 12,561,000
------------
TOTAL INVESTMENTS
(cost $202,311,276)(3)................ 99.9% 211,154,211
Other assets less liabilities............ 0.1 261,801
----------- ------------
NET ASSETS -- 100.0% $211,416,012
=========== ============
--------
(1) Collateralized Mortgage Obligation
(2) See Note 3 for details of Joint Repurchase Agreements.
(3) See Note 6 for cost of investments on a tax basis.
REMIC --Real Estate Mortgage Investment Conduit
16
SUNAMERICA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2015 (see Note 3):
LEVEL 1 -- UNADJUSTED LEVEL 2 -- OTHER LEVEL 3 -- SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
- --------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
----------------------
U.S. Government Agencies......... $-- $118,698,889 $-- $118,698,889
U.S. Government Treasuries....... -- 64,917,110 -- 64,917,110
Short-Term Investment Securities. -- 14,977,212 -- 14,977,212
Repurchase Agreement............. -- 12,561,000 -- 12,561,000
--- ------------ --- ------------
TOTAL INVESTMENTS AT VALUE....... $-- $211,154,211 $-- $211,154,211
=== ============ === ============
--------
* For a detailed presentation of investments, 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 transfers between Levels during the reporting
period.
See Notes to Financial Statements
17
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Sovereign.............................. 14.1%
Diversified Banking Institutions....... 6.2
Banks-Commercial....................... 5.4
Oil Companies-Exploration & Production. 4.5
Federal National Mtg. Assoc............ 2.8
Telephone-Integrated................... 2.6
Pipelines.............................. 2.2
Electric-Integrated.................... 2.1
Time Deposits.......................... 1.6
Oil Companies-Integrated............... 1.6
Medical-Hospitals...................... 1.5
Medical-Drugs.......................... 1.3
Cellular Telecom....................... 1.3
Diversified Financial Services......... 1.3
Cable/Satellite TV..................... 1.2
Federal Home Loan Mtg. Corp............ 1.2
Casino Hotels.......................... 1.2
Finance-Leasing Companies.............. 1.2
Insurance-Multi-line................... 1.1
Real Estate Investment Trusts.......... 1.0
Telecom Services....................... 0.9
Paper & Related Products............... 0.9
Building Products-Cement............... 0.8
Airlines............................... 0.8
Independent Power Producers............ 0.8
Auto-Cars/Light Trucks................. 0.7
Insurance-Life/Health.................. 0.7
United States Treasury Notes........... 0.6
Containers-Metal/Glass................. 0.6
Electric-Distribution.................. 0.6
Savings & Loans/Thrifts................ 0.6
Chemicals-Specialty.................... 0.6
Banks-Money Center..................... 0.6
Specified Purpose Acquisitions......... 0.6
Internet Connectivity Services......... 0.6
Building - Residential/Commercial...... 0.6
Banks-Super Regional................... 0.6
Printing-Commercial.................... 0.5
Food-Dairy Products.................... 0.5
Steel-Producers........................ 0.5
Publishing-Periodicals................. 0.5
Computers.............................. 0.5
Commercial Services-Finance............ 0.5
Finance-Auto Loans..................... 0.5
Finance-Consumer Loans................. 0.5
Chemicals-Diversified.................. 0.5
Retail-Restaurants..................... 0.5
Electric-Generation.................... 0.5
Diversified Minerals................... 0.5
Medical-Generic Drugs.................. 0.5
Aerospace/Defense...................... 0.5
Municipal Bonds & Notes................ 0.5
Computer Services...................... 0.5
Diversified Manufacturing Operations... 0.4
Coal................................... 0.4
Agricultural Chemicals................. 0.4
Oil & Gas Drilling..................... 0.4
Investment Management/Advisor Services. 0.4
Banks-Special Purpose.................. 0.4
Auto/Truck Parts & Equipment-Original.. 0.4
Shipbuilding........................... 0.4
Wire & Cable Products........................ 0.4%
Containers-Paper/Plastic..................... 0.4
Publishing-Newspapers........................ 0.4
Transport-Rail............................... 0.4
Food-Misc./Diversified....................... 0.3
Finance-Credit Card.......................... 0.3
Financial Guarantee Insurance................ 0.3
SupraNational Banks.......................... 0.3
Security Services............................ 0.3
Machinery-Farming............................ 0.3
Medical-HMO.................................. 0.3
Beverages-Wine/Spirits....................... 0.3
Auto-Heavy Duty Trucks....................... 0.3
Food-Meat Products........................... 0.3
Electronic Components-Semiconductors......... 0.3
Cruise Lines................................. 0.3
Medical Labs & Testing Services.............. 0.3
Finance-Other Services....................... 0.3
Medical Instruments.......................... 0.3
Music........................................ 0.3
Sovereign Agency............................. 0.3
Retail-Regional Department Stores............ 0.3
Real Estate Operations & Development......... 0.3
Medical Products............................. 0.3
Satellite Telecom............................ 0.3
Airport Development/Maintenance.............. 0.3
Petrochemicals............................... 0.3
Storage/Warehousing.......................... 0.3
Special Purpose Entities..................... 0.3
Oil-Field Services........................... 0.3
Building Societies........................... 0.3
Gas-Distribution............................. 0.3
Oil Refining & Marketing..................... 0.2
Metal-Iron................................... 0.2
Advertising Services......................... 0.2
E-Commerce/Services.......................... 0.2
Gold Mining.................................. 0.2
Casino Services.............................. 0.2
Retail-Appliances............................ 0.2
Food-Wholesale/Distribution.................. 0.2
Distribution/Wholesale....................... 0.2
Transport-Equipment & Leasing................ 0.2
Alternative Waste Technology................. 0.2
Metal-Diversified............................ 0.2
Machinery-Construction & Mining.............. 0.2
Food-Retail.................................. 0.2
Retail-Drug Store............................ 0.2
Finance-Commercial........................... 0.2
Schools...................................... 0.2
Firearms & Ammunition........................ 0.2
Retail-Discount.............................. 0.2
Radio........................................ 0.2
Insurance Brokers............................ 0.2
Metal-Copper................................. 0.2
Steel Pipe & Tube............................ 0.2
Enterprise Software/Service.................. 0.2
Semiconductor Equipment...................... 0.2
Semiconductor Components-Integrated Circuits. 0.2
Banks-Fiduciary.............................. 0.2
Metal-Aluminum............................... 0.2
Machinery-General Industrial................. 0.2
18
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED) (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED) (CONTINUED)
INDUSTRY ALLOCATION* (CONTINUED)
Real Estate Management/Services.. 0.2%
Beverages-Non-alcoholic.......... 0.2
Theaters......................... 0.2
Office Automation & Equipment.... 0.2
Tools-Hand Held.................. 0.2
Publishing-Books................. 0.1
Insurance-Mutual................. 0.1
Mining Services.................. 0.1
Insurance-Reinsurance............ 0.1
Diversified Operations........... 0.1
Energy-Alternate Sources......... 0.1
Travel Services.................. 0.1
Advertising Agencies............. 0.1
Aerospace/Defense-Equipment...... 0.1
Decision Support Software........ 0.1
Multimedia....................... 0.1
Lottery Services................. 0.1
Consumer Products-Misc........... 0.1
Steel-Specialty.................. 0.1
Apparel Manufacturers............ 0.1
Retail-Music Store............... 0.1
Retail-Computer Equipment........ 0.1
Retail-Major Department Stores... 0.1
Poultry.......................... 0.1
Building Products-Wood........... 0.1
Retail-Apparel/Shoe.............. 0.1
Web Hosting/Design............... 0.1
Applications Software............ 0.1
Networking Products.............. 0.1
Regional Agencies................ 0.1
Government National Mtg. Assoc... 0.1
Sugar............................ 0.1
United States Treasury Bonds..... 0.1
Building & Construction-Misc..... 0.1
Repurchase Agreement............. 0.1
Trucking/Leasing................. 0.1
Tennessee Valley Authority....... 0.1
Television....................... 0.1
Gas-Transportation............... 0.1
Electric-Transmission............ 0.1
Brewery.......................... 0.1
Transport-Services............... 0.1
Finance-Investment Banker/Broker. 0.1
Retail-Mail Order................ 0.1
----
98.9%
====
CREDIT QUALITY ALLOCATION+#
Aaa........ 6.7%
Aa......... 3.5
A.......... 12.9
Baa........ 23.8
Ba......... 18.5
B.......... 20.3
Caa........ 7.8
Ca......... 0.2
Not Rated@. 6.3
-----
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.
19
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------
ASSET BACKED SECURITIES -- 0.9%
DIVERSIFIED FINANCIAL SERVICES -- 0.9%
Applebee's Funding LLC/IHOP Funding LLC
Series 2014-1, Class A2
4.28% due 09/05/2044*.................... $ 58,000 $ 60,033
Asset Backed Securities Corp.
Home Equity Loan Trust FRS
Series 2004-HE7, Class M2
1.75% due 10/25/2034..................... 105,006 98,221
Avis Budget Rental Car Funding AESOP LLC
Series 2014-1A, Class A
2.46% due 07/20/2020*.................... 67,000 67,826
Chase Issuance Trust FRS
Series 2014-A5, Class A5
0.54% due 04/15/2021..................... 376,000 376,000
Citibank Credit Card Issuance Trust
Series 2014-A2, Class A2
1.02% due 02/22/2019..................... 126,000 126,071
Citibank Credit Card Issuance Trust
Series 2014-A8, Class A8
1.73% due 04/09/2020..................... 100,000 101,093
Citibank Credit Card Issuance Trust
Series 2014-A1, Class A1
2.88% due 01/23/2023..................... 75,000 78,048
CLI Funding V LLC
Series 2014-2A, Class A
3.38% due 10/18/2029*.................... 71,875 72,902
Commercial Mtg. Trust
Series 2015-CR22, Class A2
2.86% due 03/10/2048(1).................. 193,000 200,188
Core Industrial
2015- CALW, Class A
3.04% due 02/10/2034*(1)................. 71,000 73,127
Countrywide Home Loan Mtg.
Pass Through Trust
Series 2005-6, Class 1A11
5.25% due 02/25/2026(2).................. 194,845 196,941
CSAIL Commercial Mtg. Trust
Series 2015-C1, Class A1
1.68% due 04/15/2050(1).................. 146,000 146,872
CSAIL Commercial Mtg. Trust
Series 2015-C1, Class A4
3.51% due 04/15/2050(1).................. 73,000 77,110
DB Master Finance LLC
Series 2015-1A, Class A2II
3.98% due 02/20/2045*.................... 107,000 109,275
Domino's Pizza Master Issuer LLC
Series 2012-1A, Class A2
5.22% due 01/25/2042*.................... 101,456 105,493
First Franklin Mtg. Loan Trust FRS
Series 2006-FF15, Class A5
0.33% due 11/25/2036..................... 115,188 100,817
Ford Credit Auto Owner Trust
Series 2014-C,Class B
1.97% due 04/15/2020..................... 76,000 76,154
Ford Credit Floorplan Master Owner Trust
Series 2014-4, Class A1
1.40% due 08/15/2019..................... 114,000 114,292
GS Mtg. Securities Corp. II
Series 2012-GCJ9, Class A2
1.76% due 11/10/2045(1).................. 468,000 471,550
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
GS Mtg. Securities Trust
Series 2015-GC28, Class A2
2.90% due 02/10/2048(1).................. $ 102,000 $ 105,984
JPMBB Commercial Mtg. Securities Trust
Series 2013-C15, Class A2
2.98% due 11/15/2045(1).................. 971,000 1,014,235
Nissan Auto Lease Trust
Series 2014-A, Class A4
1.04% due 10/15/2019..................... 100,000 100,088
NRP Mtg. Trust VRS
Series 2013-1, Class A1
3.25% due 07/25/2043*(2)................. 149,890 150,424
Santander Drive Auto Receivables Trust
Series 2014-5, Class C
2.46% due 06/15/2020..................... 76,000 76,433
Sierra Timeshare Receivables Funding LLC
Series 2014-2A, Class A
2.05% due 06/20/2031*.................... 69,418 69,806
TAL Advantage V LLC
Series 2013-2A, Class A
3.55% due 11/20/2038*.................... 69,333 70,900
----------
TOTAL ASSET BACKED SECURITIES
(cost $4,212,960)........................ 4,239,883
----------
U.S. CORPORATE BONDS & NOTES -- 46.0%
ADVERTISING AGENCIES -- 0.1%
Interpublic Group of Cos., Inc.
Senior Notes
3.75% due 02/15/2023..................... 353,000 365,659
Interpublic Group of Cos., Inc.
Senior Notes
4.20% due 04/15/2024..................... 248,000 262,728
----------
628,387
----------
ADVERTISING SERVICES -- 0.2%
Visant Corp.
Company Guar. Notes
10.00% due 10/01/2017.................... 1,301,000 1,164,395
----------
AEROSPACE/DEFENSE -- 0.3%
BAE Systems Holdings, Inc.
Company Guar. Notes
3.80% due 10/07/2024*.................... 208,000 218,344
BAE Systems Holdings, Inc.
Company Guar. Notes
4.75% due 10/07/2044*.................... 270,000 296,035
Boeing Co.
Senior Notes
0.95% due 05/15/2018..................... 490,000 485,919
Northrop Grumman Corp.
Senior Notes
3.85% due 04/15/2045..................... 342,000 336,660
----------
1,336,958
----------
AEROSPACE/DEFENSE-EQUIPMENT -- 0.1%
Moog, Inc.
Company Guar. Notes
5.25% due 12/01/2022*.................... 578,000 595,340
----------
20
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
AIRLINES -- 0.6%
Allegiant Travel Co.
Company Guar. Notes
5.50% due 07/15/2019....................... $ 882,000 $ 904,050
Atlas Air, Inc.
Pass Through Certs.
Series 1999-1, Class A-1
7.20% due 07/02/2020....................... 468,854 477,059
Atlas Air, Inc.
Pass Through Certs.
Series 1999-1, Class B
7.63% due 07/02/2016(3).................... 57,639 58,504
Atlas Air, Inc.
Pass Through Certs.
Series 2000-1, Class B
9.06% due 07/02/2017....................... 232,838 248,555
United Airlines Pass Through Trust
Pass Through Certs.
Series 2014-2, Class B
4.63% due 03/03/2024....................... 750,000 754,688
United Airlines Pass Through Trust
Pass Through Certs.
Series 2013-1, Class B
5.38% due 02/15/2023....................... 525,649 550,617
----------
2,993,473
----------
ALTERNATIVE WASTE TECHNOLOGY -- 0.2%
ADS Waste Holdings, Inc.
Company Guar. Notes
8.25% due 10/01/2020....................... 997,000 1,041,865
----------
APPAREL MANUFACTURERS -- 0.1%
Quiksilver, Inc./QS Wholesale, Inc.
Company Guar. Notes
10.00% due 08/01/2020...................... 747,000 528,503
----------
AUTO-CARS/LIGHT TRUCKS -- 0.2%
American Honda Finance Corp.
Senior Notes
1.20% due 07/14/2017....................... 619,000 620,604
Ford Motor Credit Co. LLC
Senior Notes
1.50% due 01/17/2017....................... 360,000 360,761
----------
981,365
----------
AUTO-HEAVY DUTY TRUCKS -- 0.3%
JB Poindexter & Co., Inc.
Senior Notes
9.00% due 04/01/2022*...................... 1,325,000 1,437,625
----------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.3%
Affinia Group, Inc.
Company Guar. Notes
7.75% due 05/01/2021....................... 1,425,000 1,474,875
----------
BANKS-COMMERCIAL -- 0.8%
Citizens Bank NA
Senior Notes
2.45% due 12/04/2019....................... 832,000 842,246
First Tennessee Bank NA
Senior Notes
2.95% due 12/01/2019....................... 445,000 451,343
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------------
BANKS-COMMERCIAL (CONTINUED)
KeyBank NA
Senior Notes
2.25% due 03/16/2020............................. $ 493,000 $ 496,403
PNC Bank NA
Senior Notes
1.13% due 01/27/2017............................. 1,059,000 1,062,563
Regions Financial Corp.
Sub. Notes
7.38% due 12/10/2037............................. 610,000 798,327
SVB Financial Group
Senior Notes
3.50% due 01/29/2025............................. 283,000 281,148
----------
3,932,030
----------
BANKS-FIDUCIARY -- 0.2%
Citizens Financial Group, Inc.
Sub. Notes
4.15% due 09/28/2022*............................ 775,000 814,176
----------
BANKS-SUPER REGIONAL -- 0.3%
Bank of America NA
Senior Notes
1.65% due 03/26/2018............................. 300,000 300,748
Wells Fargo & Co.
Senior Notes
1.40% due 09/08/2017............................. 882,000 885,900
----------
1,186,648
----------
BUILDING & CONSTRUCTION-MISC. -- 0.1%
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.00% due 02/01/2023............................. 384,000 367,680
----------
BUILDING PRODUCTS-CEMENT -- 0.6%
Cemex Finance LLC
Senior Sec. Notes
6.00% due 04/01/2024*............................ 1,105,000 1,102,237
Headwaters, Inc.
Sec. Notes
7.63% due 04/01/2019............................. 1,861,000 1,938,604
----------
3,040,841
----------
BUILDING PRODUCTS-WOOD -- 0.1%
Masco Corp.
Senior Notes
4.45% due 04/01/2025............................. 468,000 483,210
----------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.3%
Meritage Homes Corp.
Company Guar. Notes
7.00% due 04/01/2022............................. 1,200,000 1,287,000
----------
CABLE/SATELLITE TV -- 0.9%
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
6.50% due 04/30/2021............................. 897,000 941,850
CCOH Safari LLC
Company Guar. Notes
5.50% due 12/01/2022............................. 990,000 1,012,275
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc.
Company Guar. Notes
3.95% due 01/15/2025............................. 318,000 327,628
21
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
CABLE/SATELLITE TV (CONTINUED)
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc.
Company Guar. Notes
6.35% due 03/15/2040............................. $ 387,000 $ 457,994
DISH DBS Corp.
Company Guar. Notes
5.00% due 03/15/2023............................. 674,000 655,330
DISH DBS Corp.
Company Guar. Notes
5.88% due 11/15/2024............................. 286,000 286,358
Time Warner Cable, Inc.
Company Guar. Notes
6.55% due 05/01/2037............................. 149,000 187,121
Time Warner Cable, Inc.
Company Guar. Notes
7.30% due 07/01/2038............................. 343,000 462,369
----------
4,330,925
----------
CASINO HOTELS -- 1.0%
Caesars Entertainment Resort Properties LLC
Senior Sec. Notes
8.00% due 10/01/2020............................. 1,133,000 1,124,502
Caesars Entertainment Resort Properties LLC
Sec. Notes
11.00% due 10/01/2021............................ 721,000 630,875
Caesars Growth Properties Holdings LLC/Caesars
Growth Properties Finance, Inc.
Sec. Notes
9.38% due 05/01/2022*............................ 948,000 727,590
Downstream Development Authority of the
Quapaw Tribe of Oklahoma
Senior Sec. Notes
10.50% due 07/01/2019*........................... 917,000 809,253
Golden Nugget Escrow, Inc.
Senior Notes
8.50% due 12/01/2021*............................ 845,000 866,125
Seminole Hard Rock Entertainment, Inc./Seminole
Hard Rock International LLC
Company Guar. Notes
5.88% due 05/15/2021*............................ 575,000 577,156
----------
4,735,501
----------
CASINO SERVICES -- 0.2%
Scientific Games International, Inc.
Senior Sec. Notes
7.00% due 01/01/2022*............................ 585,000 598,163
Scientific Games International, Inc.
Company Guar. Notes
10.00% due 12/01/2022*........................... 572,000 534,820
----------
1,132,983
----------
CELLULAR TELECOM -- 0.9%
Sprint Communications, Inc.
Senior Notes
7.00% due 08/15/2020............................. 550,000 558,594
Sprint Corp.
Company Guar. Notes
7.13% due 06/15/2024............................. 1,337,000 1,303,575
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------------------
CELLULAR TELECOM (CONTINUED)
Sprint Corp.
Company Guar. Notes
7.25% due 09/15/2021.......................... $ 809,000 $ 813,045
T-Mobile USA, Inc.
Company Guar. Notes
6.38% due 03/01/2025.......................... 400,000 412,760
T-Mobile USA, Inc.
Company Guar. Notes
6.50% due 01/15/2024.......................... 900,000 940,500
----------
4,028,474
----------
CHEMICALS-DIVERSIFIED -- 0.3%
Celanese US Holdings LLC
Company Guar. Notes
4.63% due 11/15/2022.......................... 875,000 881,563
Eco Services Operations LLC/Eco Finance Corp.
Senior Notes
8.50% due 11/01/2022*......................... 557,000 562,570
----------
1,444,133
----------
CHEMICALS-SPECIALTY -- 0.6%
Chemtura Corp.
Company Guar. Notes
5.75% due 07/15/2021.......................... 1,026,000 1,040,108
Ecolab, Inc.
Senior Notes
2.25% due 01/12/2020.......................... 226,000 227,413
Evolution Escrow Issuer LLC
Company Guar. Notes
7.50% due 03/15/2022*......................... 462,000 467,775
Lubrizol Corp.
Company Guar. Notes
6.50% due 10/01/2034.......................... 248,000 335,920
W.R. Grace & Co.
Company Guar. Notes
5.13% due 10/01/2021*......................... 686,000 711,725
----------
2,782,941
----------
COAL -- 0.4%
Murray Energy Corp.
Sec. Notes
8.63% due 06/15/2021*......................... 1,045,000 1,092,025
SunCoke Energy Partners LP/SunCoke Energy
Partners Finance Corp.
Company Guar. Notes
7.38% due 02/01/2020*......................... 891,000 913,275
----------
2,005,300
----------
COMMERCIAL SERVICES-FINANCE -- 0.5%
Harland Clarke Holdings Corp.
Senior Sec. Notes
6.88% due 03/01/2020*......................... 670,000 681,725
Harland Clarke Holdings Corp.
Senior Notes
9.25% due 03/01/2021*......................... 1,618,000 1,569,460
----------
2,251,185
----------
22
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
COMPUTER SERVICES -- 0.3%
Compiler Finance Sub, Inc.
Senior Notes
7.00% due 05/01/2021*....................... $1,564,000 $1,200,370
----------
COMPUTERS -- 0.5%
Apple, Inc.
Senior Notes
3.45% due 02/09/2045........................ 375,000 355,964
Dell, Inc.
Senior Notes
4.63% due 04/01/2021........................ 942,000 946,710
Dell, Inc.
Senior Notes
7.10% due 04/15/2028........................ 414,000 450,225
Hewlett-Packard Co.
Senior Notes
6.00% due 09/15/2041........................ 702,000 781,277
----------
2,534,176
----------
CONSUMER PRODUCTS-MISC. -- 0.0%
Kimberly-Clark Corp.
Senior Notes
1.85% due 03/01/2020........................ 137,000 137,052
----------
CONTAINERS-METAL/GLASS -- 0.6%
Ball Corp.
Company Guar. Notes
5.00% due 03/15/2022........................ 335,000 350,075
Crown Cork & Seal Co., Inc.
Senior Notes
7.38% due 12/15/2026........................ 1,750,000 2,003,750
Owens-Brockway Glass Container, Inc.
Senior Notes
5.00% due 01/15/2022*....................... 617,000 628,507
----------
2,982,332
----------
CONTAINERS-PAPER/PLASTIC -- 0.4%
Consolidated Container Co. LLC/Consolidated
Container Capital, Inc.
Company Guar. Notes
10.13% due 07/15/2020*...................... 1,347,000 1,171,890
Graphic Packaging International, Inc.
Company Guar. Notes
4.88% due 11/15/2022........................ 505,000 523,937
----------
1,695,827
----------
DECISION SUPPORT SOFTWARE -- 0.1%
MSCI, Inc.
Company Guar. Notes
5.25% due 11/15/2024*....................... 566,000 585,103
----------
DISTRIBUTION/WHOLESALE -- 0.2%
H&E Equipment Services, Inc.
Company Guar. Notes
7.00% due 09/01/2022........................ 1,039,000 1,070,170
LKQ Corp.
Company Guar. Notes
4.75% due 05/15/2023........................ 22,000 21,560
----------
1,091,730
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------
DIVERSIFIED BANKING INSTITUTIONS -- 2.2%
Bank of America Corp.
Senior Notes
2.50% due 07/27/2020.................. EUR 245,000 $285,541
Bank of America Corp.
Senior Notes
2.60% due 01/15/2019.................. 678,000 690,063
Bank of America Corp.
Sub. Notes
4.25% due 10/22/2026.................. 504,000 520,300
Citigroup, Inc.
Sub. Notes
3.88% due 03/26/2025.................. 58,000 58,218
Citigroup, Inc.
Senior Notes
5.15% due 05/21/2026.................. GBP 40,000 72,205
Citigroup, Inc.
Sub. Notes
5.30% due 05/06/2044.................. 68,000 76,434
Citigroup, Inc.
Sub. Notes
5.88% due 02/22/2033.................. 758,000 882,140
Goldman Sachs Group, Inc.
Senior Notes
2.55% due 10/23/2019.................. 411,000 416,713
Goldman Sachs Group, Inc.
Senior Notes
5.25% due 07/27/2021.................. 565,000 642,526
Goldman Sachs Group, Inc.
Senior Notes
6.13% due 02/15/2033.................. 518,000 660,703
Goldman Sachs Group, Inc.
Sub. Notes
6.75% due 10/01/2037.................. 643,000 844,293
JPMorgan Chase & Co.
Senior Notes
2.20% due 10/22/2019.................. 653,000 654,777
JPMorgan Chase & Co.
Senior Notes
3.25% due 09/23/2022.................. 530,000 542,035
JPMorgan Chase & Co.
Sub. Notes
4.13% due 12/15/2026.................. 513,000 531,826
Merrill Lynch & Co., Inc.
Sub. Notes
6.11% due 01/29/2037.................. 512,000 623,458
Morgan Stanley
Senior Notes
1.88% due 01/05/2018.................. 675,000 679,618
Morgan Stanley
Sub. Notes
4.10% due 05/22/2023.................. 891,000 927,274
Morgan Stanley
Sub. Notes
4.35% due 09/08/2026.................. 394,000 413,016
Morgan Stanley
Senior Notes
4.75% due 03/22/2017.................. 700,000 745,215
23
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
DIVERSIFIED BANKING INSTITUTIONS (CONTINUED)
NationsBank Corp.
Sub. Notes
7.25% due 10/15/2025........................... $ 117,000 $ 147,294
-----------
10,413,649
-----------
DIVERSIFIED FINANCIAL SERVICES -- 0.3%
General Electric Capital Corp.
Company Guar. Notes
1.50% due 07/12/2016........................... 682,000 689,263
General Electric Capital Corp.
Company Guar. Notes
4.88% due 09/18/2037........................... GBP 125,000 218,811
USAA Capital Corp.
Senior Notes
2.13% due 06/03/2019*.......................... 420,000 424,163
-----------
1,332,237
-----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.4%
General Electric Co.
Senior Notes
2.70% due 10/09/2022........................... 432,000 439,388
Ingersoll-Rand Global Holding Co., Ltd.
Company Guar. Notes
5.75% due 06/15/2043........................... 567,000 692,201
Textron, Inc.
Senior Notes
4.63% due 09/21/2016........................... 595,000 625,417
Trinity Industries, Inc.
Company Guar. Notes
4.55% due 10/01/2024........................... 343,000 344,832
-----------
2,101,838
-----------
DIVERSIFIED OPERATIONS -- 0.0%
MUFG Americas Holdings Corp.
Senior Notes
1.63% due 02/09/2018........................... 208,000 207,996
-----------
E-COMMERCE/SERVICES -- 0.2%
Netflix, Inc.
Senior Notes
5.38% due 02/01/2021........................... 1,132,000 1,154,640
-----------
ELECTRIC-GENERATION -- 0.3%
AES Corp.
Senior Notes
5.50% due 03/15/2024........................... 1,020,000 1,017,450
Reliant Energy Mid-Atlantic Power Holdings LLC
Pass Through Certs.
9.24% due 07/02/2017........................... 221,677 233,869
-----------
1,251,319
-----------
ELECTRIC-INTEGRATED -- 1.0%
Arizona Public Service Co.
Senior Notes
2.20% due 01/15/2020........................... 227,000 228,528
Dominion Resources, Inc.
Senior Notes
5.25% due 08/01/2033........................... 755,000 870,453
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------------------------
ELECTRIC-INTEGRATED (CONTINUED)
Entergy Arkansas, Inc.
1st Mtg. Bonds
4.95% due 12/15/2044....................... $359,000 $ 377,651
Entergy Louisiana LLC
1st Mtg. Bonds
4.95% due 01/15/2045....................... 326,000 338,281
Exelon Generation Co. LLC
Senior Notes
2.95% due 01/15/2020....................... 307,000 312,179
FirstEnergy Corp.
Senior Notes
7.38% due 11/15/2031....................... 456,000 579,086
Georgia Power Co.
Senior Notes
3.00% due 04/15/2016....................... 180,000 184,469
Mirant Mid Atlantic LLC Pass Through Trust
Pass Through Certs.
9.13% due 06/30/2017....................... 259,337 273,601
Southern California Edison Co.
1st Mtg. Bonds
1.13% due 05/01/2017....................... 628,000 630,731
Southern Co.
Senior Notes
1.30% due 08/15/2017....................... 528,000 528,261
Trans-Allegheny Interstate Line Co.
Senior Notes
3.85% due 06/01/2025*...................... 255,000 266,354
----------
4,589,594
----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.3%
Amkor Technology, Inc.
Senior Notes
6.63% due 06/01/2021....................... 900,000 936,000
Intel Corp.
Senior Notes
1.35% due 12/15/2017....................... 496,000 498,500
----------
1,434,500
----------
ELECTRONIC PARTS DISTRIBUTION -- 0.0%
Arrow Electronics, Inc.
Senior Notes
4.00% due 04/01/2025....................... 164,000 164,992
----------
ENERGY-ALTERNATE SOURCES -- 0.1%
TerraForm Power Operating LLC
Company Guar. Notes
5.88% due 02/01/2023*...................... 636,000 659,850
----------
ENTERPRISE SOFTWARE/SERVICE -- 0.2%
Epicor Software Corp.
Company Guar. Notes
8.63% due 05/01/2019....................... 840,000 877,800
----------
FINANCE-AUTO LOANS -- 0.5%
Ally Financial, Inc.
Company Guar. Notes
3.50% due 01/27/2019....................... 486,000 479,925
24
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
FINANCE-AUTO LOANS (CONTINUED)
Ally Financial, Inc.
Senior Notes
4.13% due 03/30/2020....................... $ 871,000 $ 865,556
Ally Financial, Inc.
Senior Notes
5.13% due 09/30/2024....................... 485,000 500,156
Credit Acceptance Corp.
Company Guar. Notes
7.38% due 03/15/2023*...................... 600,000 591,750
----------
2,437,387
----------
FINANCE-COMMERCIAL -- 0.2%
Jefferies Finance LLC/JFIN Co-Issuer Corp.
Senior Notes
6.88% due 04/15/2022*...................... 524,000 487,320
Jefferies Finance LLC/JFIN Co-Issuer Corp.
Senior Notes
7.38% due 04/01/2020*...................... 498,000 483,060
----------
970,380
----------
FINANCE-CONSUMER LOANS -- 0.5%
Enova International, Inc.
Company Guar. Notes
9.75% due 06/01/2021*...................... 1,378,000 1,309,100
OneMain Financial Holdings, Inc.
Company Guar. Notes
6.75% due 12/15/2019*...................... 575,000 593,687
Synchrony Financial
Senior Notes
4.25% due 08/15/2024....................... 447,000 467,474
----------
2,370,261
----------
FINANCE-CREDIT CARD -- 0.2%
American Express Credit Corp.
Senior Notes
1.55% due 09/22/2017....................... 655,000 659,857
Discover Financial Services
Senior Notes
3.75% due 03/04/2025....................... 441,000 444,236
----------
1,104,093
----------
FINANCE-INVESTMENT BANKER/BROKER -- 0.0%
Lehman Brothers Holdings, Inc.
Escrow Notes
6.75% due 12/28/2017+(5)................... 280,000 28
Lehman Brothers Holdings, Inc.
Escrow Notes 7.50%
due 05/11/2038+(5)......................... 361,000 36
----------
64
----------
FINANCE-LEASING COMPANIES -- 0.5%
Air Lease Corp.
Senior Notes
4.75% due 03/01/2020....................... 1,605,000 1,723,368
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------------------------------
FINANCE-LEASING COMPANIES (CONTINUED)
Aircastle, Ltd.
Senior Notes
5.50% due 02/15/2022............................... $ 385,000 $ 409,544
----------
2,132,912
----------
FINANCE-OTHER SERVICES -- 0.2%
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Bonds
1.10% due 01/27/2017............................... 850,000 853,664
----------
FIREARMS & AMMUNITION -- 0.2%
FGI Operating Co. LLC/FGI Finance, Inc.
Sec. Notes
7.88% due 05/01/2020............................... 1,115,000 950,538
----------
FOOD-DAIRY PRODUCTS -- 0.2%
Dean Foods Co.
Company Guar. Notes
6.50% due 03/15/2023*.............................. 1,100,000 1,105,500
----------
FOOD-MEAT PRODUCTS -- 0.2%
JBS USA LLC/JBS USA Finance, Inc.
Senior Notes
5.88% due 07/15/2024*.............................. 733,000 742,163
----------
FOOD-MISC./DIVERSIFIED -- 0.3%
Darling Ingredients, Inc.
Company Guar. Notes
5.38% due 01/15/2022............................... 1,066,000 1,073,995
Mondelez International, Inc.
Senior Notes
2.38% due 01/26/2021............................... EUR 250,000 292,232
Mondelez International, Inc.
Senior Notes
7.25% due 07/18/2018............................... GBP 100,000 175,126
----------
1,541,353
----------
FOOD-RETAIL -- 0.2%
Albertson's Holdings LLC/Saturn Acquisition
Merger Sub, Inc.
Senior Sec. Notes
7.75% due 10/15/2022*.............................. 365,000 390,550
SUPERVALU, Inc.
Senior Notes
7.75% due 11/15/2022............................... 583,000 620,895
----------
1,011,445
----------
FOOD-WHOLESALE/DISTRIBUTION -- 0.2%
C&S Group Enterprises LLC
Senior Sec. Notes
5.38% due 07/15/2022*.............................. 1,131,000 1,105,553
----------
GAMBLING (NON-HOTEL) -- 0.0%
Waterford Gaming LLC/Waterford Gaming
Financial Corp.
Escrow Notes
8.63% due 09/15/2014*+(3)(5)(6).................... 478,062 4,685
----------
GAS-DISTRIBUTION -- 0.1%
Dominion Gas Holdings LLC
Senior Notes
4.80% due 11/01/2043............................... 252,000 284,818
----------
25
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
INDEPENDENT POWER PRODUCERS -- 0.8%
Calpine Corp.
Senior Sec. Notes
6.00% due 01/15/2022*.......................... $652,000 $ 697,640
Calpine Corp.
Senior Sec. Notes
7.88% due 01/15/2023*.......................... 609,000 673,067
Dynegy Finance I, Inc./Dynegy Finance II, Inc.
Senior Sec. Notes
7.38% due 11/01/2022*.......................... 800,000 841,000
GenOn Energy, Inc.
Senior Notes
9.50% due 10/15/2018........................... 753,000 768,060
NRG Energy, Inc.
Company Guar. Notes
6.25% due 07/15/2022........................... 662,000 680,205
NRG Energy, Inc.
Company Guar. Notes
7.63% due 01/15/2018........................... 190,000 209,237
----------
3,869,209
----------
INDUSTRIAL GASES -- 0.0%
Praxair, Inc.
Senior Notes
2.65% due 02/05/2025........................... 223,000 220,532
----------
INSURANCE BROKERS -- 0.2%
USI, Inc.
Senior Notes
7.75% due 01/15/2021*.......................... 900,000 922,500
----------
INSURANCE-LIFE/HEALTH -- 0.5%
American Equity Investment Life Holding Co.
Senior Notes
6.63% due 07/15/2021........................... 815,000 874,088
Pacific LifeCorp
Senior Notes
6.00% due 02/10/2020*.......................... 295,000 337,412
Pricoa Global Funding I
Senior Sec. Notes
1.35% due 08/18/2017*.......................... 494,000 493,656
Principal Life Global Funding II
Senior Sec. Notes
1.00% due 12/11/2015*.......................... 583,000 584,980
----------
2,290,136
----------
INSURANCE-MULTI-LINE -- 0.6%
Assurant, Inc.
Senior Notes
6.75% due 02/15/2034........................... 831,000 1,063,409
Genworth Holdings, Inc.
Company Guar. Notes
7.63% due 09/24/2021........................... 434,000 451,360
Kemper Corp.
Senior Notes
4.35% due 02/15/2025........................... 301,000 308,030
MetLife, Inc.
Senior Notes
4.05% due 03/01/2045........................... 288,000 298,258
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------------------------
INSURANCE-MULTI-LINE (CONTINUED)
Metropolitan Life Global Funding I
Sec. Notes
1.30% due 04/10/2017*..................... $ 886,000 $ 890,942
----------
3,011,999
----------
INSURANCE-MUTUAL -- 0.1%
New York Life Global Funding
Sec. Notes
1.65% due 05/15/2017*..................... 679,000 688,502
----------
INTERNET CONNECTIVITY SERVICES -- 0.6%
Cogent Communications Group, Inc.
Senior Sec. Notes
5.38% due 03/01/2022*..................... 1,204,000 1,200,990
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
6.00% due 04/01/2023*..................... 1,426,000 1,433,130
----------
2,634,120
----------
INVESTMENT MANAGEMENT/ADVISOR SERVICES -- 0.4%
Drawbridge Special Opportunities Fund LP/
Drawbridge Special Opportunities Finance
Senior Notes
5.00% due 08/01/2021*..................... 1,106,000 1,100,470
National Financial Partners Corp.
Senior Notes
9.00% due 07/15/2021*..................... 887,000 906,957
----------
2,007,427
----------
MACHINERY-CONSTRUCTION & MINING -- 0.2%
Oshkosh Corp.
Company Guar. Notes
5.38% due 03/01/2022...................... 850,000 881,875
Oshkosh Corp.
Company Guar. Notes
5.38% due 03/01/2025*..................... 134,000 138,020
----------
1,019,895
----------
MACHINERY-FARMING -- 0.3%
John Deere Capital Corp.
Senior Notes
1.13% due 06/12/2017...................... 756,000 758,552
John Deere Capital Corp.
Senior Notes
1.55% due 12/15/2017...................... 766,000 774,154
----------
1,532,706
----------
MEDICAL INSTRUMENTS -- 0.3%
Medtronic, Inc.
Company Guar. Notes
3.50% due 03/15/2025*..................... 498,000 520,605
Medtronic, Inc.
Company Guar. Notes
4.38% due 03/15/2035*..................... 649,000 705,750
Medtronic, Inc.
Company Guar. Notes
4.63% due 03/15/2045*..................... 150,000 170,021
----------
1,396,376
----------
26
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
MEDICAL LABS & TESTING SERVICES -- 0.3%
Laboratory Corp. of America Holdings
Senior Notes
3.20% due 02/01/2022........................ $ 119,000 $ 120,471
Laboratory Corp. of America Holdings
Senior Notes
3.60% due 02/01/2025........................ 386,000 387,575
Laboratory Corp. of America Holdings
Senior Notes
4.70% due 02/01/2045........................ 198,000 203,801
Roche Holdings, Inc.
Company Guar. Notes
1.35% due 09/29/2017*....................... 700,000 703,486
----------
1,415,333
----------
MEDICAL PRODUCTS -- 0.3%
Becton Dickinson and Co.
Senior Notes
3.73% due 12/15/2024........................ 188,000 196,761
Becton Dickinson and Co.
Senior Notes
4.69% due 12/15/2044........................ 129,000 140,187
Universal Hospital Services, Inc.
Sec. Notes
7.63% due 08/15/2020........................ 1,094,000 957,250
----------
1,294,198
----------
MEDICAL-DRUGS -- 0.7%
Endo Finance LLC
Company Guar. Notes
5.75% due 01/15/2022*....................... 852,000 873,300
Forest Laboratories, Inc.
Company Guar. Notes
4.88% due 02/15/2021*....................... 486,000 535,793
Merck & Co., Inc.
Senior Notes
1.88% due 10/15/2026........................ EUR 550,000 644,347
Valeant Pharmaceuticals International, Inc.
Senior Notes
5.88% due 05/15/2023*....................... 1,272,000 1,303,800
----------
3,357,240
----------
MEDICAL-GENERIC DRUGS -- 0.2%
Mylan, Inc.
Company Guar. Notes
7.88% due 07/15/2020*....................... 827,000 873,735
----------
MEDICAL-HMO -- 0.3%
Centene Corp.
Senior Notes
4.75% due 05/15/2022........................ 1,055,000 1,094,563
UnitedHealth Group, Inc.
Senior Notes
1.40% due 12/15/2017........................ 395,000 398,173
----------
1,492,736
----------
MEDICAL-HOSPITALS -- 1.3%
Capella Healthcare, Inc.
Company Guar. Notes
9.25% due 07/01/2017........................ 1,055,000 1,092,584
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------------------
MEDICAL-HOSPITALS (CONTINUED)
HCA, Inc.
Company Guar. Notes
5.38% due 02/01/2025..................... $ 142,000 $ 148,922
HCA, Inc.
Company Guar. Notes
5.88% due 05/01/2023..................... 625,000 675,000
HCA, Inc.
Company Guar. Notes
7.50% due 11/15/2095..................... 1,823,000 1,795,655
IASIS Healthcare LLC/IASIS Capital Corp.
Company Guar. Notes
8.38% due 05/15/2019..................... 850,000 884,000
Tenet Healthcare Corp.
Senior Sec. Notes
4.75% due 06/01/2020..................... 1,249,000 1,265,787
Tenet Healthcare Corp.
Senior Notes
6.88% due 11/15/2031..................... 565,000 522,625
----------
6,384,573
----------
METAL-ALUMINUM -- 0.2%
Alcoa, Inc.
Senior Notes
5.13% due 10/01/2024..................... 741,000 793,101
----------
METAL-COPPER -- 0.1%
Freeport-McMoRan, Inc.
Company Guar. Notes
2.30% due 11/14/2017..................... 416,000 414,673
----------
MULTIMEDIA -- 0.1%
Time Warner Entertainment Co. LP
Company Guar. Notes
8.38% due 07/15/2033..................... 385,000 564,624
----------
MUSIC -- 0.3%
Gibson Brands, Inc.
Senior Sec. Notes
8.88% due 08/01/2018*.................... 457,000 457,571
WMG Acquisition Corp.
Senior Sec. Notes
6.00% due 01/15/2021*.................... 439,000 447,780
WMG Acquisition Corp.
Company Guar. Notes
6.75% due 04/15/2022*.................... 481,000 455,748
----------
1,361,099
----------
NETWORKING PRODUCTS -- 0.1%
Cisco Systems, Inc.
Senior Notes
2.13% due 03/01/2019..................... 453,000 462,276
----------
NON-HAZARDOUS WASTE DISPOSAL -- 0.0%
Waste Management, Inc.
Company Guar. Notes
4.10% due 03/01/2045..................... 149,000 152,250
----------
OFFICE AUTOMATION & EQUIPMENT -- 0.2%
Pitney Bowes, Inc.
Senior Notes
4.63% due 03/15/2024..................... 406,000 425,874
27
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
OFFICE AUTOMATION & EQUIPMENT (CONTINUED)
Xerox Corp.
Senior Notes
4.80% due 03/01/2035............................ $ 287,000 $ 281,459
----------
707,333
----------
OIL & GAS DRILLING -- 0.1%
Summit Midstream Holdings LLC/Summit
Midstream Finance Corp.
Company Guar. Notes
5.50% due 08/15/2022............................ 416,000 394,160
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 3.5%
American Energy-Permian Basin LLC/AEPB
Finance Corp.
Senior Notes
7.38% due 11/01/2021*........................... 570,000 433,200
Anadarko Petroleum Corp.
Senior Notes
6.45% due 09/15/2036............................ 885,000 1,097,847
Atlas Energy Holdings Operating Co. LLC/Atlas
Resource Finance Corp.
Company Guar. Notes
7.75% due 01/15/2021............................ 1,271,000 864,280
Chaparral Energy, Inc.
Company Guar. Notes
7.63% due 11/15/2022............................ 526,000 352,420
Chaparral Energy, Inc.
Company Guar. Notes
8.25% due 09/01/2021............................ 635,000 438,150
Denbury Resources, Inc.
Company Guar. Notes
5.50% due 05/01/2022............................ 700,000 628,250
EOG Resources, Inc.
Senior Notes
3.90% due 04/01/2035............................ 157,000 160,992
EP Energy LLC/Everest Acquisition Finance, Inc.
Company Guar. Notes
7.75% due 09/01/2022............................ 1,213,000 1,237,260
EV Energy Partners LP/EV Energy Finance Corp.
Company Guar. Notes
8.00% due 04/15/2019............................ 1,105,000 1,005,550
Halcon Resources Corp.
Company Guar. Notes
9.75% due 07/15/2020............................ 1,178,000 830,490
Hess Corp.
Senior Notes
5.60% due 02/15/2041............................ 567,000 619,221
Hess Corp.
Senior Notes
7.88% due 10/01/2029............................ 235,000 303,499
Hilcorp Energy I LP/Hilcorp Finance Co.
Senior Notes
5.00% due 12/01/2024*........................... 977,000 918,380
Legacy Reserves LP/Legacy Reserves
Finance Corp.
Company Guar. Notes
6.63% due 12/01/2021............................ 652,000 515,080
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------------------------
OIL COMPANIES-EXPLORATION & PRODUCTION (CONTINUED)
Memorial Production Partners LP/Memorial
Production Finance Corp.
Company Guar. Notes
7.63% due 05/01/2021..................... $ 740,000 $ 673,400
Newfield Exploration Co.
Senior Notes
5.38% due 01/01/2026..................... 559,000 564,660
Noble Energy, Inc.
Senior Notes
3.90% due 11/15/2024..................... 290,000 295,030
Noble Energy, Inc.
Senior Notes
5.05% due 11/15/2044..................... 245,000 257,074
Northern Oil and Gas, Inc.
Senior Notes
8.00% due 06/01/2020..................... 1,264,000 1,121,800
Penn Virginia Corp.
Company Guar. Notes
8.50% due 05/01/2020..................... 915,000 860,100
Rex Energy Corp.
Company Guar. Notes
6.25% due 08/01/2022*.................... 1,235,000 830,537
Rex Energy Corp.
Company Guar. Notes
8.88% due 12/01/2020..................... 259,000 202,020
Rosetta Resources, Inc.
Company Guar. Notes
5.63% due 05/01/2021..................... 960,000 902,400
Sanchez Energy Corp.
Company Guar. Notes
6.13% due 01/15/2023..................... 789,000 709,114
Southwestern Energy Co.
Senior Notes
3.30% due 01/23/2018..................... 119,000 121,283
Southwestern Energy Co.
Senior Notes
4.05% due 01/23/2020..................... 225,000 232,505
Southwestern Energy Co.
Senior Notes
4.95% due 01/23/2025..................... 432,000 439,380
-----------
16,613,922
-----------
OIL COMPANIES-INTEGRATED -- 0.5%
Chevron Corp.
Senior Notes
1.37% due 03/02/2018..................... 456,000 458,222
Chevron Corp.
Senior Notes
1.96% due 03/03/2020..................... 456,000 458,920
Exxon Mobil Corp.
Senior Notes
1.31% due 03/06/2018..................... 464,000 466,671
Exxon Mobil Corp.
Senior Notes
2.71% due 03/06/2025..................... 327,000 330,333
Exxon Mobil Corp.
Senior Notes
3.57% due 03/06/2045..................... 124,000 128,573
28
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
---------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
OIL COMPANIES-INTEGRATED (CONTINUED)
Marathon Oil Corp.
Senior Notes
6.60% due 10/01/2037............................... $ 324,000 $ 390,877
----------
2,233,596
----------
OIL REFINING & MARKETING -- 0.2%
Calumet Specialty Products Partners LP/Calumet
Finance Corp.
Company Guar. Notes
6.50% due 04/15/2021*.............................. 646,000 626,620
Reliance Holdings USA, Inc.
Company Guar. Notes
5.40% due 02/14/2022............................... 450,000 494,527
----------
1,121,147
----------
OIL-FIELD SERVICES -- 0.3%
Bristow Group, Inc.
Company Guar. Notes
6.25% due 10/15/2022............................... 675,000 641,250
Freeport-McMoran Oil & Gas LLC/FCX Oil & Gas, Inc.
Company Guar. Notes
6.63% due 05/01/2021............................... 196,000 206,780
Freeport-McMoran Oil & Gas LLC/FCX Oil & Gas, Inc.
Company Guar. Notes
6.75% due 02/01/2022............................... 338,000 358,280
----------
1,206,310
----------
PAPER & RELATED PRODUCTS -- 0.7%
Domtar Corp.
Company Guar. Notes
6.75% due 02/15/2044............................... 312,000 359,551
Georgia-Pacific LLC
Senior Notes
3.60% due 03/01/2025*.............................. 834,000 854,944
Georgia-Pacific LLC
Senior Notes
3.73% due 07/15/2023*.............................. 946,000 990,911
Georgia-Pacific LLC
Company Guar. Notes
5.40% due 11/01/2020*.............................. 553,000 630,891
PH Glatfelter Co.
Company Guar. Notes
5.38% due 10/15/2020............................... 620,000 633,950
----------
3,470,247
----------
PIPELINES -- 2.1%
El Paso Pipeline Partners Operating Co. LLC
Company Guar. Notes
4.70% due 11/01/2042............................... 224,000 211,175
El Paso Pipeline Partners Operating Co. LLC
Company Guar. Notes
6.50% due 04/01/2020............................... 1,011,000 1,155,893
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020............................... 700,000 784,000
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
---------------------------------------------------------------------------
PIPELINES (CONTINUED)
Energy Transfer Partners LP
Senior Notes
4.90% due 03/15/2035............................... $ 124,000 $ 123,163
Energy Transfer Partners LP
Senior Notes
5.15% due 03/15/2045............................... 288,000 289,805
Energy Transfer Partners LP
Senior Notes
6.63% due 10/15/2036............................... 736,000 875,384
EnLink Midstream Partners LP
Senior Notes
5.05% due 04/01/2045............................... 219,000 222,775
Enterprise Products Operating LLC
Company Guar. Notes
3.75% due 02/15/2025............................... 316,000 326,200
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
5.63% due 06/15/2024............................... 715,000 672,100
Kinder Morgan, Inc.
Company Guar. Notes
5.00% due 02/15/2021*.............................. 589,000 629,526
Kinder Morgan, Inc.
Company Guar. Notes
5.55% due 06/01/2045............................... 336,000 354,266
MarkWest Energy Partners LP/MarkWest Energy
Finance Corp.
Company Guar. Notes
6.50% due 08/15/2021............................... 614,000 643,165
Rose Rock Midstream LP/Rose Rock
Finance Corp.
Company Guar. Notes
5.63% due 07/15/2022............................... 461,000 454,085
Sabine Pass Liquefaction LLC
Senior Sec. Notes
5.63% due 04/15/2023............................... 575,000 573,563
Sabine Pass Liquefaction LLC
Senior Sec. Notes
6.25% due 03/15/2022............................... 511,000 528,246
Tesoro Logistics LP/Tesoro Logistics Finance Corp.
Company Guar. Notes
6.13% due 10/15/2021............................... 926,000 953,780
Williams Partners LP/ACMP Finance Corp.
Senior Notes
6.13% due 07/15/2022............................... 1,020,000 1,080,690
----------
9,877,816
----------
POULTRY -- 0.1%
Pilgrim's Pride Corp.
Company Guar. Notes
5.75% due 03/15/2025*.............................. 488,000 498,980
----------
PRINTING-COMMERCIAL -- 0.4%
Multi-Color Corp.
Company Guar. Notes
6.13% due 12/01/2022*.............................. 887,000 922,480
Quad/Graphics, Inc.
Company Guar. Notes
7.00% due 05/01/2022*.............................. 1,175,000 1,130,937
----------
2,053,417
----------
29
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
PUBLISHING-NEWSPAPERS -- 0.4%
Lee Enterprises, Inc.
Senior Sec. Notes
9.50% due 03/15/2022*...................... $ 834,000 $ 861,105
McClatchy Co.
Senior Sec. Notes
9.00% due 12/15/2022....................... 825,000 796,125
----------
1,657,230
----------
PUBLISHING-PERIODICALS -- 0.5%
Expo Event Transco, Inc.
Senior Notes
9.00% due 06/15/2021*...................... 1,447,000 1,479,557
Time, Inc.
Company Guar. Notes
5.75% due 04/15/2022*...................... 1,130,000 1,104,575
----------
2,584,132
----------
RADIO -- 0.2%
Sirius XM Radio, Inc.
Company Guar. Notes
5.38% due 04/15/2025*...................... 940,000 944,700
----------
REAL ESTATE INVESTMENT TRUSTS -- 0.9%
CTR Partnership LP/CareTrust Capital Corp.
Company Guar. Notes
5.88% due 06/01/2021....................... 1,200,000 1,224,000
GEO Group, Inc.
Company Guar. Notes
5.13% due 04/01/2023....................... 959,000 978,180
Kimco Realty Corp.
Senior Notes
4.25% due 04/01/2045....................... 175,000 170,698
Omega Healthcare Investors, Inc.
Company Guar. Notes
4.50% due 04/01/2027*...................... 480,000 471,504
Omega Healthcare Investors, Inc.
Company Guar. Notes
4.95% due 04/01/2024....................... 474,000 499,406
Sabra Health Care LP/Sabra Capital Corp.
Company Guar. Notes
5.50% due 02/01/2021....................... 787,000 839,139
----------
4,182,927
----------
REAL ESTATE MANAGEMENT/SERVICES -- 0.1%
American Campus Communities Operating
Partnership LP
Company Guar. Notes
4.13% due 07/01/2024....................... 302,000 313,155
----------
REAL ESTATE OPERATIONS & DEVELOPMENT -- 0.1%
Greystar Real Estate Partners LLC
Senior Sec. Notes
8.25% due 12/01/2022*...................... 395,000 413,763
----------
RETAIL-APPAREL/SHOE -- 0.1%
Limited Brands, Inc.
Company Guar. Notes
6.63% due 04/01/2021....................... 420,000 481,114
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------------
RETAIL-APPLIANCES -- 0.2%
Conn's, Inc.
Company Guar. Notes
7.25% due 07/15/2022*.................. $1,236,000 $1,106,220
----------
RETAIL-COMPUTER EQUIPMENT -- 0.1%
GameStop Corp.
Company Guar. Notes
5.50% due 10/01/2019*.................. 500,000 516,250
----------
RETAIL-DISCOUNT -- 0.2%
Costco Wholesale Corp.
Senior Notes
2.25% due 02/15/2022................... 484,000 482,902
Dollar General Corp.
Company Guar. Notes
4.13% due 07/15/2017................... 440,000 462,837
----------
945,739
----------
RETAIL-DRUG STORE -- 0.2%
CVS Pass-Through Trust
Pass Through Certs.
4.70% due 01/10/2036*.................. 275,162 300,973
CVS Pass-Through Trust
Pass Through Certs.
5.77% due 01/10/2033*.................. 224,307 263,803
CVS Pass-Through Trust
Pass Through Certs.
5.93% due 01/10/2034*.................. 354,379 419,203
----------
983,979
----------
RETAIL-MAIL ORDER -- 0.1%
QVC, Inc.
Senior Sec. Notes
5.45% due 08/15/2034................... 259,000 256,891
----------
RETAIL-MUSIC STORE -- 0.1%
Guitar Center, Inc.
Senior Sec. Notes
6.50% due 04/15/2019*.................. 600,000 523,500
----------
RETAIL-REGIONAL DEPARTMENT STORES -- 0.3%
Bon-Ton Department Stores, Inc.
Sec. Notes
8.00% due 06/15/2021................... 1,570,000 1,295,250
----------
RETAIL-RESTAURANTS -- 0.5%
Landry's, Inc.
Company Guar. Notes
9.38% due 05/01/2020*.................. 863,000 925,567
PF Chang's China Bistro, Inc.
Company Guar. Notes
10.25% due 06/30/2020*................. 1,285,000 1,329,975
----------
2,255,542
----------
RUBBER/PLASTIC PRODUCTS -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007+(3)(5)(6)(8)..... 100,000 0
----------
30
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
SAVINGS & LOANS/THRIFTS -- 0.6%
Astoria Financial Corp.
Senior Notes
5.00% due 06/19/2017..................... $ 718,000 $ 759,765
First Niagara Financial Group, Inc.
Senior Notes
6.75% due 03/19/2020..................... 1,145,000 1,268,117
First Niagara Financial Group, Inc.
Sub. Notes
7.25% due 12/15/2021..................... 714,000 797,336
----------
2,825,218
----------
SCHOOLS -- 0.2%
Northwestern University
Notes
4.20% due 12/01/2047..................... 386,000 430,744
President and Fellows of Harvard College
Notes
3.62% due 10/01/2037..................... 191,000 198,814
University of Pennsylvania
Senior Notes
4.67% due 09/01/2112..................... 292,000 324,882
----------
954,440
----------
SECURITY SERVICES -- 0.1%
ADT Corp.
Senior Notes
3.50% due 07/15/2022..................... 498,000 453,180
----------
SEMICONDUCTOR EQUIPMENT -- 0.2%
Entegris, Inc.
Company Guar. Notes
6.00% due 04/01/2022*.................... 834,000 869,445
----------
SHIPBUILDING -- 0.4%
Huntington Ingalls Industries, Inc.
Company Guar. Notes
5.00% due 12/15/2021*.................... 594,000 619,245
Huntington Ingalls Industries, Inc.
Company Guar. Notes
7.13% due 03/15/2021..................... 1,043,000 1,121,225
----------
1,740,470
----------
SPECIAL PURPOSE ENTITIES -- 0.3%
MassMutual Global Funding II
Senior Sec. Notes
2.00% due 04/05/2017*.................... 856,000 869,008
MassMutual Global Funding II
Senior Sec. Notes
2.50% due 10/17/2022*.................... 345,000 341,388
----------
1,210,396
----------
SPECIFIED PURPOSE ACQUISITIONS -- 0.6%
Argos Merger Sub, Inc.
Senior Notes
7.13% due 03/15/2023*.................... 793,000 821,746
Opal Acquisition, Inc.
Senior Notes
8.88% due 12/15/2021*.................... 1,825,000 1,856,938
----------
2,678,684
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------
STEEL PIPE & TUBE -- 0.1%
Valmont Industries, Inc.
Company Guar. Notes
5.25% due 10/01/2054.............. $ 619,000 $ 610,031
----------
STEEL-PRODUCERS -- 0.3%
AK Steel Corp.
Company Guar. Notes
8.38% due 04/01/2022.............. 874,000 721,050
Steel Dynamics, Inc.
Company Guar. Notes
5.13% due 10/01/2021*............. 829,000 834,181
----------
1,555,231
----------
STEEL-SPECIALTY -- 0.1%
Allegheny Technologies, Inc.
Senior Notes
5.95% due 01/15/2021.............. 331,000 347,550
----------
STORAGE/WAREHOUSING -- 0.3%
Mobile Mini, Inc.
Company Guar. Notes
7.88% due 12/01/2020.............. 1,165,000 1,229,075
----------
TELECOM SERVICES -- 0.1%
Consolidated Communications, Inc.
Company Guar. Notes
6.50% due 10/01/2022*............. 632,000 639,900
----------
TELEPHONE-INTEGRATED -- 1.3%
AT&T, Inc.
Senior Notes
4.35% due 06/15/2045.............. 423,000 404,591
CenturyLink, Inc.
Senior Notes
5.63% due 04/01/2025*............. 930,000 933,488
CenturyLink, Inc.
Senior Notes
5.80% due 03/15/2022.............. 431,000 448,779
Cincinnati Bell, Inc.
Company Guar. Notes
8.38% due 10/15/2020.............. 497,000 528,684
Frontier Communications Corp.
Senior Notes
8.13% due 10/01/2018.............. 500,000 560,625
Frontier Communications Corp.
Senior Notes
9.25% due 07/01/2021.............. 549,000 636,840
Sprint Capital Corp.
Company Guar. Notes
8.75% due 03/15/2032.............. 1,110,000 1,146,075
Verizon Communications, Inc.
Senior Notes
3.00% due 11/01/2021.............. 569,000 580,350
Verizon Communications, Inc.
Senior Notes
4.40% due 11/01/2034.............. 384,000 391,163
Verizon Communications, Inc.
Senior Notes
4.50% due 09/15/2020.............. 63,000 69,569
31
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
TELEPHONE-INTEGRATED (CONTINUED)
Verizon Communications, Inc.
Senior Notes
4.67% due 03/15/2055*......................... $ 387,000 $ 379,005
Verizon Communications, Inc.
Senior Notes
4.75% due 02/17/2034.......................... GBP 125,000 217,298
Verizon Communications, Inc.
Senior Notes
6.40% due 09/15/2033.......................... 16,000 19,970
------------
6,316,437
------------
THEATERS -- 0.2%
National CineMedia LLC
Senior Sec. Notes
6.00% due 04/15/2022.......................... 690,000 708,975
------------
TRANSPORT-EQUIPMENT & LEASING -- 0.2%
Jurassic Holdings III, Inc.
Sec. Notes
6.88% due 02/15/2021*......................... 1,245,000 1,083,150
------------
TRANSPORT-RAIL -- 0.1%
Union Pacific Corp.
Senior Notes
3.88% due 02/01/2055.......................... 270,000 263,380
------------
TRAVEL SERVICES -- 0.1%
Sabre GLBL, Inc.
Senior Sec.
Notes 8.50% due 05/15/2019*................... 617,000 659,234
------------
TRUCKING/LEASING -- 0.1%
Penske Truck Leasing Co. LP/PTL Finance Corp.
Senior Notes
3.05% due 01/09/2020*......................... 353,000 358,914
------------
WEB HOSTING/DESIGN -- 0.1%
Equinix, Inc.
Senior Notes
5.38% due 01/01/2022.......................... 459,000 478,508
------------
WIRE & CABLE PRODUCTS -- 0.4%
Anixter, Inc.
Company Guar. Notes
5.13% due 10/01/2021.......................... 735,000 755,212
General Cable Corp.
Company Guar. Notes
5.75% due 10/01/2022.......................... 1,050,000 976,500
------------
1,731,712
------------
TOTAL U.S. CORPORATE BONDS & NOTES
(cost $219,523,523)........................... 218,546,124
------------
FOREIGN CORPORATE BONDS & NOTES -- 24.4%
AEROSPACE/DEFENSE -- 0.1%
BAE Systems PLC
Senior Notes
4.13% due 06/08/2022.......................... GBP 200,000 327,669
------------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------------------
AGRICULTURAL CHEMICALS -- 0.4%
Consolidated Energy Finance SA
Company Guar. Notes
6.75% due 10/15/2019*...................... $1,100,000 $1,108,250
Syngenta Finance NV
Company Guar. Notes
1.88% due 11/02/2021....................... EUR 800,000 923,386
----------
2,031,636
----------
AIRLINES -- 0.2%
Air Canada
Senior Sec. Notes
6.75% due 10/01/2019*...................... 940,000 1,003,450
----------
AIRPORT DEVELOPMENT/MAINTENANCE -- 0.3%
Heathrow Funding, Ltd.
Senior Sec. Notes
1.88% due 05/23/2024....................... EUR 900,000 1,035,878
Heathrow Funding, Ltd.
Senior Sec. Notes
6.75% due 12/03/2028....................... GBP 100,000 204,164
----------
1,240,042
----------
APPLICATIONS SOFTWARE -- 0.1%
Microsoft Corp.
Senior Notes
2.63% due 05/02/2033....................... EUR 350,000 462,371
----------
AUTO-CARS/LIGHT TRUCKS -- 0.5%
BMW Finance NV
Company Guar. Notes
2.63% due 01/17/2024....................... EUR 430,000 530,791
Hyundai Capital Services, Inc.*
Senior Notes
4.38% due 07/27/2016....................... 595,000 619,528
Volkswagen International Finance NV
Company Guar. Notes
2.38% due 03/22/2017*...................... 254,000 259,867
Volkswagen International Finance NV VRS
Company Guar. Notes
4.63% due 03/24/2026(4).................... EUR 600,000 733,858
----------
2,144,044
----------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.1%
Tupy Overseas SA
Company Guar. Notes
6.63% due 07/17/2024....................... 290,000 278,400
----------
BANKS-COMMERCIAL -- 4.2%
Abbey National Treasury Services PLC
Company Guar. Notes
1.13% due 01/14/2022....................... EUR 625,000 675,667
Abbey National Treasury Services PLC
Company Guar. Notes
1.38% due 03/13/2017....................... 514,000 516,176
Abbey National Treasury Services PLC
Company Guar. Notes
3.88% due 10/15/2029....................... GBP 100,000 165,782
ADCB Finance Cayman, Ltd.
Company Guar. Notes
4.50% due 03/06/2023....................... 300,000 310,125
32
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
BANKS-COMMERCIAL (CONTINUED)
Banco ABC Brasil SA
Senior Notes
8.50% due 03/28/2016*(5).............. BRL 3,100,000 $ 940,718
Banco de Bogota SA
Senior Notes
5.00% due 01/15/2017*................. 260,000 269,750
Banco de Credito del Peru
Senior Notes
5.38% due 09/16/2020.................. 400,000 439,000
Bangkok Bank PCL
Senior Notes
3.88% due 09/27/2022.................. 315,000 329,905
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Senior Notes
1.45% due 09/08/2017*................. 629,000 628,648
Banque Federative du Credit Mutuel SA
Sub. Notes
5.00% due 09/30/2015.................. EUR 450,000 494,448
Barclays Bank PLC
Senior Notes
2.13% due 02/24/2021.................. EUR 200,000 232,683
Barclays Bank PLC
Senior Notes
2.25% due 06/10/2024.................. EUR 350,000 416,982
BPCE SA
Senior Notes
1.38% due 05/22/2019.................. EUR 400,000 444,268
BPCE SA
Sub. Notes
4.50% due 03/15/2025*................. 443,000 449,407
BPCE SA
Sub. Notes
4.63% due 07/18/2023.................. EUR 200,000 259,576
Cooperatieve Centrale Raiffeisen-
Boerenleenbank BA
Senior Notes
5.25% due 05/23/2041.................. GBP 130,000 257,327
Credit Suisse
Sub. Notes
5.40% due 01/14/2020.................. 944,000 1,064,049
Credit Suisse AG FRS
Sub. Notes
5.75% due 09/18/2025.................. EUR 500,000 622,234
DBS Group Holdings, Ltd.
Senior Notes
2.25% due 07/16/2019*................. 691,000 698,835
Hana Bank
Sub. Notes
4.38% due 09/30/2024*................. 200,000 213,000
HBOS PLC
Sub. Notes
4.50% due 03/18/2030.................. EUR 300,000 372,494
ICICI Bank, Ltd.
Senior Notes
5.75% due 11/16/2020.................. 400,000 454,155
ING Bank NV
Senior Notes
4.00% due 03/15/2016*................. 489,000 502,394
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
---------------------------------------------------------------
BANKS-COMMERCIAL (CONTINUED)
ING Bank NV
Senior Notes
5.38% due 04/15/2021.................... GBP 200,000 $352,791
Intesa Sanpaolo SpA
Senior Notes
2.00% due 06/18/2021.................... EUR 250,000 282,811
Intesa Sanpaolo SpA
Senior Notes
3.50% due 01/17/2022.................... EUR 400,000 494,990
Intesa Sanpaolo SpA
Sub. Notes
5.02% due 06/26/2024*................... 769,000 787,064
Kookmin Bank
Senior Notes
1.63% due 07/14/2017*................... 855,000 853,245
Macquarie Bank, Ltd.
Senior Notes
2.60% due 06/24/2019*................... 308,000 312,361
Malayan Banking Bhd VRS
Sub. Notes
3.25% due 09/20/2022.................... 500,000 503,203
National Australia Bank, Ltd.
Senior Notes
2.75% due 03/09/2017.................... 473,000 488,474
National Australia Bank, Ltd.
Senior Notes
5.13% due 12/09/2021.................... GBP 100,000 175,645
Nordea Bank AB
Senior Notes
2.13% due 11/13/2019.................... GBP 100,000 152,804
Oversea-Chinese Banking Corp., Ltd. VRS
Sub. Notes
4.00% due 10/15/2024*................... 200,000 208,452
PKO Finance AB
Senior Notes
4.63% due 09/26/2022*................... 700,000 740,250
Rabobank
Senior Notes
4.55% due 08/30/2029.................... GBP 65,000 115,753
Sberbank of Russia Via SB Capital SA
Senior Notes
6.13% due 02/07/2022.................... 400,000 371,488
Siam Commercial Bank PCL
Senior Notes
3.50% due 04/07/2019*................... 200,000 207,209
Skandinaviska Enskilda Banken AB
Senior Notes
1.88% due 11/14/2019.................... EUR 400,000 457,640
Standard Chartered PLC
Senior Notes
1.63% due 06/13/2021.................... EUR 300,000 337,899
Svenska Handelsbanken AB
Senior Notes
2.63% due 08/23/2022.................... EUR 500,000 612,988
Svenska Handelsbanken AB FRS
Sub. Notes
2.66% due 01/15/2024.................... EUR 600,000 678,406
33
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
BANKS-COMMERCIAL (CONTINUED)
Turkiye Halk Bankasi AS
Senior Notes
3.88% due 02/05/2020*............. $ 355,000 $ 338,137
Turkiye Is Bankasi AS
Senior Notes
5.00% due 04/30/2020*............. 200,000 200,250
Zenith Bank PLC
Senior Notes
6.25% due 04/22/2019*............. 300,000 274,500
-----------
19,703,983
-----------
BANKS-MONEY CENTER -- 0.6%
ABN AMRO Bank NV
Senior Notes
2.50% due 11/29/2023.............. EUR 265,000 323,187
ABN AMRO Bank NV
Senior Notes
4.13% due 03/28/2022.............. EUR 350,000 463,404
Bank of Scotland PLC
Sub. Notes
6.38% due 08/16/2019.............. GBP 190,000 325,023
Lloyds Bank PLC
Senior Notes
6.50% due 09/17/2040.............. GBP 150,000 338,994
Lloyds Bank PLC VRS
Sub. Notes
11.88% due 12/16/2021............. EUR 600,000 761,275
Mizuho Bank, Ltd.
Company Guar. Notes
2.45% due 04/16/2019*............. 275,000 278,583
National Westminster Bank PLC
Sub. Notes
7.88% due 09/09/2015.............. GBP 140,000 213,161
-----------
2,703,627
-----------
BANKS-SPECIAL PURPOSE -- 0.4%
Bank Nederlandse Gemeenten NV
Senior Notes
1.88% due 12/07/2018.............. GBP 100,000 152,556
Bank Nederlandse Gemeenten NV
Senior Notes
2.63% due 09/01/2020.............. EUR 500,000 611,283
Burgan Finance No. 1 Jersey, Ltd.
Company Guar. Notes
7.88% due 09/29/2020.............. 305,000 354,508
Nederlandse Waterschapsbank NV
Senior Notes
3.00% due 11/16/2023.............. EUR 650,000 856,669
-----------
1,975,016
-----------
BEVERAGES-NON-ALCOHOLIC -- 0.2%
Coca-Cola Femsa SAB de CV
Company Guar. Notes
2.38% due 11/26/2018.............. 742,000 757,760
-----------
BEVERAGES-WINE/SPIRITS -- 0.3%
Diageo Capital PLC
Company Guar. Notes
5.75% due 10/23/2017.............. 686,000 762,253
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------------
BEVERAGES-WINE/SPIRITS (CONTINUED)
Pernod Ricard SA
Senior Notes
2.00% due 06/22/2020...................... EUR 600,000 $ 683,053
----------
1,445,306
----------
BREWERY -- 0.1%
Anadolu Efes Biracilik Ve Malt Sanayii AS
Senior Notes
3.38% due 11/01/2022...................... 350,000 311,325
----------
BUILDING & CONSTRUCTION PRODUCTS-MISC. -- 0.0%
Elementia SAB de CV
Company Guar. Notes
5.50% due 01/15/2025*..................... 200,000 198,800
----------
BUILDING PRODUCTS-CEMENT -- 0.2%
Cemex SAB de CV
Senior Sec. Notes
5.88% due 03/25/2019*..................... 500,000 516,250
Vulcan Materials Co.
Senior Notes
4.50% due 04/01/2025...................... 334,000 339,010
West China Cement, Ltd.
Senior Notes
6.50% due 09/11/2019...................... 320,000 314,840
----------
1,170,100
----------
BUILDING SOCIETIES -- 0.2%
Nationwide Building Society
Sub. Notes
6.75% due 07/22/2020...................... EUR 600,000 814,765
----------
BUILDING-HEAVY CONSTRUCTION -- 0.0%
Empresas ICA SAB de CV
Company Guar. Notes
8.88% due 05/29/2024*..................... 225,000 179,325
----------
BUILDING- RESIDENTIAL/COMMERCIAL -- 0.3%
Mattamy Group Corp.
Senior Notes
6.50% due 11/15/2020*..................... 1,325,000 1,275,312
----------
CABLE/SATELLITE TV -- 0.3%
Numericable Group SA
Senior Sec. Notes
6.00% due 05/15/2022*..................... 1,055,000 1,068,187
Unitymedia Hessen GmbH & Co. KG
Senior Sec. Notes
5.00% due 01/15/2025*..................... 525,000 530,250
----------
1,598,437
----------
CASINO HOTELS -- 0.2%
Wynn Macau, Ltd.
Senior Notes
5.25% due 10/15/2021*..................... 1,051,000 995,823
----------
CELLULAR TELECOM -- 0.4%
America Movil SAB de CV VRS
Jr. Sub. Notes
5.13% due 09/06/2073...................... EUR 775,000 907,343
34
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
CELLULAR TELECOM (CONTINUED)
ENTEL Chile SA
Senior Notes
4.88% due 10/30/2024.................. $ 450,000 $ 469,725
Mobile Telesystems OJSC via MTS
International Funding, Ltd.
Senior Notes
5.00% due 05/30/2023.................. 250,000 210,750
Mobile Telesystems OJSC via MTS
International Funding, Ltd.
Senior Notes
8.63% due 06/22/2020.................. 200,000 209,516
----------
1,797,334
----------
CHEMICALS-DIVERSIFIED -- 0.2%
NOVA Chemicals Corp.
Senior Notes
5.00% due 05/01/2025*................. 800,000 836,000
----------
COAL -- 0.0%
Indo Energy Finance BV
Senior Sec. Notes
7.00% due 05/07/2018.................. 200,000 164,000
----------
COMMERCIAL SERVICES-FINANCE -- 0.0%
Experian Finance PLC
Company Guar. Notes
4.75% due 11/23/2018.................. GBP 125,000 206,166
----------
CONSUMER PRODUCTS-MISC. -- 0.1%
Kimberly-Clark de Mexico SAB de CV
Senior Notes
3.25% due 03/12/2025*................. 413,000 415,011
----------
CRUISE LINES -- 0.3%
NCL Corp, Ltd.
Senior Notes
5.25% due 11/15/2019*................. 872,000 893,800
Royal Caribbean Cruises, Ltd.
Senior Notes
5.25% due 11/15/2022.................. 501,000 532,312
----------
1,426,112
----------
DIVERSIFIED BANKING INSTITUTIONS -- 2.0%
BNP Paribas SA
Senior Notes
2.38% due 05/20/2024.................. EUR 250,000 301,454
BNP Paribas SA VRS
Sub. Notes
2.63% due 10/14/2027.................. EUR 500,000 556,458
BNP Paribas SA
Senior Notes
2.88% due 09/26/2023.................. EUR 400,000 501,742
Citigroup, Inc.
Senior Notes
5.00% due 08/02/2019.................. EUR 300,000 382,528
Credit Agricole SA
Senior Notes
3.13% due 02/05/2026.................. EUR 500,000 642,885
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
---------------------------------------------------------------
DIVERSIFIED BANKING INSTITUTIONS (CONTINUED)
Credit Agricole SA
Sub. Notes
4.38% due 03/17/2025*................ EUR 439,000 $ 443,896
Credit Agricole SA
Senior Notes
5.50% due 12/17/2021................. GBP 100,000 179,874
Deutsche Bank AG
Senior Notes
1.88% due 02/13/2018................. 1,278,000 1,279,801
Deutsche Bank AG
Sub. Notes
4.50% due 04/01/2025................. 547,000 546,405
HSBC Holdings PLC
Senior Notes
6.50% due 05/20/2024................. GBP 150,000 292,147
Royal Bank of Scotland Group PLC
Senior Notes
1.63% due 06/25/2019................. EUR 225,000 246,586
Royal Bank of Scotland PLC
Sub. Notes
4.88% due 04/22/2015................. EUR 375,000 403,973
Royal Bank of Scotland PLC
Senior Notes
6.88% due 05/17/2025................. GBP 75,000 151,211
Royal Bank of Scotland PLC VRS
Sub. Notes
10.50% due 03/16/2022................ EUR 700,000 882,753
Societe Generale SA VRS
Sub. Notes
2.50% due 09/16/2026................. EUR 200,000 219,141
UBS AG
Senior Notes
1.38% due 08/14/2017................. 737,000 736,587
UBS AG VRS
Sub. Notes
4.75% due 02/12/2026................. EUR 600,000 717,642
UBS AG
Sub. Notes
5.13% due 05/15/2024................. 247,000 256,712
UBS AG VRS
Sub. Notes
5.25% due 06/21/2021................. GBP 120,000 185,118
UBS AG
Sub. Notes
7.63% due 08/17/2022................. 294,000 356,586
----------
9,283,499
----------
DIVERSIFIED FINANCIAL SERVICES -- 0.1%
GE Capital European Funding
Company Guar. Notes
6.03% due 03/01/2038................. EUR 125,000 248,691
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.0%
Ingersoll-Rand Luxembourg Finance SA
Company Guar. Notes
4.65% due 11/01/2044................. 194,000 205,924
----------
35
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
DIVERSIFIED MINERALS -- 0.5%
Anglo American Capital PLC
Company Guar. Notes
2.88% due 11/20/2020...................... EUR 400,000 $ 463,406
Anglo American Capital PLC
Company Guar. Notes
4.13% due 04/15/2021*..................... 401,000 412,851
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
6.88% due 04/01/2022*..................... 1,050,000 775,687
Volcan Cia Minera SAA
Company Guar. Notes
5.38% due 02/02/2022*..................... 610,000 579,805
----------
2,231,749
----------
DIVERSIFIED OPERATIONS -- 0.1%
Hutchison Whampoa International 14, Ltd.
Company Guar. Notes
3.63% due 10/31/2024*..................... 200,000 204,892
Tenedora Nemak SA de CV
Senior Notes
5.50% due 02/28/2023*..................... 250,000 258,625
----------
463,517
----------
ELECTRIC-DISTRIBUTION -- 0.2%
State Grid Overseas Investment 2014, Ltd.
Company Guar. Notes
4.13% due 05/07/2024*..................... 200,000 216,628
Vattenfall AB
Senior Notes
6.75% due 01/31/2019...................... EUR 550,000 733,368
Vattenfall AB
Senior Notes
6.88% due 04/15/2039...................... GBP 50,000 113,052
----------
1,063,048
----------
ELECTRIC-GENERATION -- 0.2%
Electricite de France SA
Senior Notes
4.63% due 04/26/2030...................... EUR 450,000 696,529
Electricite de France SA
Senior Notes
6.00% due 01/22/2114*..................... 236,000 286,306
----------
982,835
----------
ELECTRIC-INTEGRATED -- 0.9%
Colbun SA
Senior Notes
4.50% due 07/10/2024...................... 325,000 334,304
DONG Energy A/S
Senior Notes
6.50% due 05/07/2019...................... EUR 250,000 333,077
E.CL SA
Senior Notes
4.50% due 01/29/2025*..................... 200,000 206,576
Empresas Publicas de Medellin ESP
Senior Notes
8.38% due 02/01/2021...................... COP 266,000,000 108,272
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------------------
ELECTRIC-INTEGRATED (CONTINUED)
Enel Finance International NV
Company Guar. Notes
5.00% due 09/14/2022....................... EUR 450,000 $ 618,535
Enel Finance International NV
Company Guar. Notes
5.63% due 08/14/2024....................... GBP 100,000 180,906
GDF Suez
Senior Notes
2.38% due 05/19/2026....................... EUR 700,000 860,434
RWE AG VRS
Jr. Sub. Notes
4.63% due 09/28/2015(4).................... EUR 1,150,000 1,252,613
Scottish Power UK PLC
Senior Notes
8.38% due 02/20/2017....................... GBP 100,000 167,607
----------
4,062,324
----------
ELECTRIC-TRANSMISSION -- 0.1%
National Grid Electricity Transmission PLC
Senior Notes
6.50% due 07/27/2028....................... GBP 150,000 315,820
----------
ENGINEERING/R&D SERVICES -- 0.0%
ABB Finance BV
Company Guar. Notes
2.63% due 03/26/2019....................... EUR 200,000 233,633
----------
FINANCE-INVESTMENT BANKER/BROKER -- 0.1%
TD Ameritrade Holding Corp.
Senior Notes
2.95% due 04/01/2022....................... 281,000 285,703
----------
FINANCE-LEASING COMPANIES -- 0.7%
Aircastle, Ltd.
Senior Notes
6.25% due 12/01/2019....................... 1,800,000 1,978,884
Fly Leasing, Ltd.
Senior Notes
6.75% due 12/15/2020....................... 1,225,000 1,251,031
----------
3,229,915
----------
FOOD-MEAT PRODUCTS -- 0.1%
BRF SA
Senior Notes
3.95% due 05/22/2023*...................... 200,000 185,690
BRF SA
Senior Notes
7.75% due 05/22/2018*(5)................... BRL 1,000,000 256,145
ESAL GmbH
Company Guar. Notes
6.25% due 02/05/2023*...................... 260,000 252,850
----------
694,685
----------
FOOD-MISC./DIVERSIFIED -- 0.0%
Nestle Finance International, Ltd.
Company Guar. Notes
2.25% due 11/30/2023....................... GBP 95,000 144,520
----------
36
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
GAS-DISTRIBUTION -- 0.2%
Gas Natural Capital Markets SA
Company Guar. Notes
5.13% due 11/02/2021................. EUR 550,000 $ 747,938
----------
GAS-TRANSPORTATION -- 0.1%
National Grid Gas PLC
Senior Notes
6.00% due 05/13/2038................. GBP 60,000 130,026
Transportadora de Gas del Peru SA
Senior Notes
4.25% due 04/30/2028*................ 200,000 198,940
----------
328,966
----------
GOLD MINING -- 0.2%
Gold Fields Orogen Holding BVI, Ltd.
Company Guar. Notes
4.88% due 10/07/2020................. 450,000 399,094
Goldcorp, Inc.
Senior Notes
5.45% due 06/09/2044................. 337,000 351,346
Kinross Gold Corp.
Company Guar. Notes
5.95% due 03/15/2024................. 175,000 162,062
Polyus Gold International, Ltd.
Company Guar. Notes
5.63% due 04/29/2020*................ 250,000 228,437
----------
1,140,939
----------
INDUSTRIAL GASES -- 0.0%
Linde Finance BV
Company Guar. Notes
5.88% due 04/24/2023................. GBP 85,000 160,600
----------
INSURANCE-LIFE/HEALTH -- 0.1%
AIA Group, Ltd.
Senior Notes
3.20% due 03/11/2025*................ 327,000 329,877
----------
INSURANCE-MULTI-LINE -- 0.1%
XLIT, Ltd.
Company Guar. Notes
4.45% due 03/31/2025................. 123,000 123,796
XLIT, Ltd.
Company Guar. Notes
5.50% due 03/31/2045................. 239,000 239,055
----------
362,851
----------
INSURANCE-REINSURANCE -- 0.0%
Munich Re Group VRS
Sub. Notes
7.63% due 06/21/2028................. GBP 125,000 214,779
----------
LOTTERY SERVICES -- 0.1%
Cleopatra Finance, Ltd.
Senior Notes
6.50% due 02/15/2025*................ 575,000 554,875
----------
MACHINERY-GENERAL INDUSTRIAL -- 0.2%
Alstom SA
Senior Notes
3.00% due 07/08/2019................. EUR 400,000 467,709
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL (CONTINUED)
Alstom SA
Senior Notes
4.50% due 03/18/2020........................... EUR 250,000 $ 313,699
----------
781,408
----------
MEDICAL-DRUGS -- 0.6%
Bayer AG VRS
Jr. Sub Notes
3.00% due 07/01/2075........................... EUR 450,000 505,845
Grifols Worldwide Operations, Ltd.
Senior Notes
5.25% due 04/01/2022*.......................... 1,275,000 1,295,719
Roche Finance Europe BV
Company Guar. Notes
5.38% due 08/29/2023........................... GBP 50,000 93,826
Sanofi
Senior Notes
1.75% due 09/10/2026........................... EUR 500,000 578,992
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
5.63% due 12/01/2021*.......................... 340,000 345,100
----------
2,819,482
----------
MEDICAL-GENERIC DRUGS -- 0.3%
Actavis Funding SCS
Company Guar. Notes
3.80% due 03/15/2025........................... 247,000 254,911
Actavis Funding SCS
Company Guar. Notes
4.55% due 03/15/2035........................... 206,000 214,718
Actavis Funding SCS
Company Guar. Notes
4.75% due 03/15/2045........................... 401,000 426,205
Perrigo Finance PLC
Company Guar. Notes
3.50% due 12/15/2021........................... 444,000 459,450
----------
1,355,284
----------
METAL-COPPER -- 0.1%
First Quantum Minerals, Ltd.
Company Guar. Notes
7.25% due 05/15/2022*.......................... 537,000 495,383
----------
METAL-DIVERSIFIED -- 0.2%
Glencore Finance Europe SA
Company Guar. Notes
3.75% due 04/01/2026........................... EUR 525,000 664,486
Vedanta Resources PLC
Senior Notes
8.25% due 06/07/2021........................... 400,000 363,000
----------
1,027,486
----------
METAL-IRON -- 0.2%
OJSC Novolipetsk Steel via Steel Funding, Ltd.
Senior Notes
4.45% due 02/19/2018........................... 500,000 464,750
37
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
METAL-IRON (CONTINUED)
Samarco Mineracao SA
Senior Notes
4.13% due 11/01/2022*.................... $ 470,000 $ 423,000
Vale SA
Senior Notes
4.38% due 03/24/2018..................... EUR 250,000 289,982
----------
1,177,732
----------
MINING SERVICES -- 0.1%
Consolidated Minerals, Ltd.
Senior Sec. Notes
8.00% due 05/15/2020*.................... 974,000 686,670
----------
MUNICIPAL BONDS & NOTES -- 0.1%
City of Kyiv Via Kyiv Finance PLC
Senior Notes
9.38% due 07/11/2016*.................... 870,000 317,011
----------
OIL & GAS DRILLING -- 0.3%
CHC Helicopter SA
Senior Sec. Notes
9.25% due 10/15/2020..................... 658,800 556,686
Pacific Drilling SA
Senior Sec. Notes
5.38% due 06/01/2020*.................... 1,050,000 840,000
Transocean, Inc.
Company Guar. Notes
3.80% due 10/15/2022..................... 148,000 107,994
Transocean, Inc.
Company Guar. Notes
7.50% due 04/15/2031..................... 156,000 117,000
----------
1,621,680
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.9%
Anadarko Finance Co.
Company Guar. Notes
7.50% due 05/01/2031..................... 165,000 218,851
Baytex Energy Corp.
Company Guar. Notes
5.13% due 06/01/2021*.................... 761,000 698,217
Baytex Energy Corp.
Company Guar. Notes
5.63% due 06/01/2024*.................... 435,000 398,025
KazMunayGas National Co. JSC
Senior Notes
6.38% due 04/09/2021..................... 450,000 448,650
MEG Energy Corp.
Company Guar. Notes
6.38% due 01/30/2023*.................... 744,000 684,480
MIE Holdings Corp.
Company Guar. Notes
7.50% due 04/25/2019*.................... 420,000 250,425
PT Pertamina Persero
Senior Notes
4.88% due 05/03/2022*.................... 720,000 749,952
Sinopec Group Overseas Development 2014,
Ltd.
Company Guar. Notes
4.38% due 04/10/2024*.................... 300,000 325,467
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------
OIL COMPANIES-EXPLORATION & PRODUCTION (CONTINUED)
Talisman Energy, Inc.
Senior Notes
5.50% due 05/15/2042........... $ 645,000 $ 638,829
----------
4,412,896
----------
OIL COMPANIES-INTEGRATED -- 1.1%
BP Capital Markets PLC
Company Guar. Notes
1.38% due 11/06/2017........... 425,000 424,800
BP Capital Markets PLC
Company Guar. Notes
2.97% due 02/27/2026........... EUR 450,000 567,159
BP Capital Markets PLC
Company Guar. Notes
3.54% due 11/04/2024........... 316,000 321,810
BP Capital Markets PLC
Company Guar. Notes
4.33% due 12/10/2018........... GBP 100,000 162,583
BP Capital Markets PLC
Company Guar. Notes
4.74% due 03/11/2021........... 243,000 271,218
Ecopetrol SA
Senior Notes
4.13% due 01/16/2025........... 170,000 162,755
ENI Finance International SA
Company Guar. Notes
5.00% due 01/27/2019........... GBP 50,000 83,193
ENI SpA
Senior Notes
3.75% due 09/12/2025........... EUR 475,000 637,848
Pacific Rubiales Energy Corp.
Company Guar. Notes
5.13% due 03/28/2023........... 500,000 291,250
Petrobras Global Finance BV
Company Guar. Notes
5.38% due 01/27/2021........... 400,000 362,860
Petroleos de Venezuela SA
Company Guar. Notes
5.38% due 04/12/2027........... 350,000 107,607
Petroleos de Venezuela SA
Company Guar. Notes
8.50% due 11/02/2017........... 900,000 594,000
Petroleos Mexicanos
Company Guar. Notes
5.50% due 06/27/2044........... 221,000 222,934
Petroleos Mexicanos
Company Guar. Notes
5.63% due 01/23/2046*.......... 283,000 287,245
Petronas Capital, Ltd.
Company Guar. Notes
5.25% due 08/12/2019........... 300,000 336,535
Total Capital International SA
Company Guar. Notes
2.13% due 11/19/2021........... EUR 300,000 352,976
38
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
OIL COMPANIES-INTEGRATED (CONTINUED)
Total Capital International SA
Company Guar. Notes
2.25% due 12/17/2020....................... GBP 95,000 $ 146,544
----------
5,333,317
----------
OIL REFINING & MARKETING -- 0.0%
Thai Oil PCL
Senior Notes
3.63% due 01/23/2023*...................... 200,000 199,589
----------
PAPER & RELATED PRODUCTS -- 0.2%
Celulosa Arauco y Constitucion SA
Senior Notes
4.50% due 08/01/2024....................... 200,000 204,260
Inversiones CMPC SA
Company Guar. Notes
4.50% due 04/25/2022....................... 500,000 515,526
Klabin Finance SA
Company Guar. Notes
5.25% due 07/16/2024*...................... 200,000 194,000
----------
913,786
----------
PETROCHEMICALS -- 0.3%
Alpek SAB de CV
Company Guar. Notes
5.38% due 08/08/2023*...................... 400,000 431,000
Braskem Finance, Ltd.
Company Guar. Notes
5.75% due 04/15/2021....................... 400,000 377,000
Mexichem SAB de CV
Company Guar. Notes
5.88% due 09/17/2044*...................... 440,000 431,200
----------
1,239,200
----------
PIPELINES -- 0.1%
Transportadora de Gas Internacional SA ESP
Senior Notes
5.70% due 03/20/2022*...................... 400,000 420,000
----------
PRINTING-COMMERCIAL -- 0.1%
Cimpress NV
Senior Notes
7.00% due 04/01/2022*...................... 680,000 688,500
----------
REAL ESTATE INVESTMENT TRUSTS -- 0.1%
Trust F/1401
Senior Notes
5.25% due 12/15/2024*...................... 400,000 430,000
----------
REAL ESTATE OPERATIONS & DEVELOPMENT -- 0.2%
China Overseas Finance Cayman VI, Ltd.
Company Guar. Notes
4.25% due 05/08/2019....................... 300,000 311,503
Country Garden Holdings Co., Ltd.
Company Guar. Notes
7.25% due 04/04/2021*...................... 200,000 199,600
Country Garden Holdings Co., Ltd.
Company Guar. Notes
7.50% due 01/10/2023*...................... 200,000 193,500
MAF Global Securities, Ltd.
Company Guar. Notes
4.75% due 05/07/2024....................... 320,000 335,264
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
--------------------------------------------------------------------
REAL ESTATE OPERATIONS & DEVELOPMENT (CONTINUED)
Shimao Property Holdings, Ltd.
Company Guar. Notes
6.63% due 01/14/2020..................... $ 200,000 $ 200,000
----------
1,239,867
----------
RETAIL-MAJOR DEPARTMENT STORES -- 0.1%
LS Finance 2022, Ltd.
Company Guar. Notes
4.25% due 10/16/2022..................... 500,000 512,234
----------
SATELLITE TELECOM -- 0.3%
Intelsat Jackson Holdings SA
Company Guar. Notes
5.50% due 08/01/2023..................... 1,350,000 1,274,063
----------
SECURITY SERVICES -- 0.2%
Garda World Security Corp.
Company Guar. Notes
7.25% due 11/15/2021*.................... 1,111,000 1,091,558
----------
SOVEREIGN AGENCY -- 0.3%
European Financial Stability Facility
Government Guar. Notes
1.75% due 10/29/2020..................... EUR 695,000 820,633
European Financial Stability Facility
Government Guar. Notes
2.35% due 07/29/2044..................... EUR 180,000 274,508
Japan Bank for International Cooperation
Government Guar. Notes
2.63% due 12/15/2020..................... GBP 100,000 156,389
----------
1,251,530
----------
SPECIAL PURPOSE ENTITY -- 0.0%
Hellas Telecommunications
Luxembourg II SCA FRS
Sub. Notes
8.46% due 01/15/2015*+(3)(5)(6)(9)....... 1,330,000 0
----------
STEEL PIPE & TUBE -- 0.1%
TMK OAO Via TMK Capital SA
Senior Notes
6.75% due 04/03/2020..................... 350,000 270,200
----------
STEEL-PRODUCERS -- 0.2%
ArcelorMittal
Senior Notes
7.00% due 02/25/2022..................... 943,000 1,032,585
----------
STEEL-SPECIALTY -- 0.0%
GTL Trade Finance, Inc.
Company Guar. Notes
7.25% due 04/16/2044*.................... 200,000 183,000
----------
SUGAR -- 0.1%
Cosan Luxembourg SA
Company Guar. Notes
9.50% due 03/14/2018*(5)................. BRL 1,590,000 413,498
----------
SUPRANATIONAL BANKS -- 0.3%
European Investment Bank
Senior Notes
2.63% due 03/15/2035..................... EUR 600,000 890,372
39
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
SUPRANATIONAL BANKS (CONTINUED)
European Investment Bank
Senior Notes
4.63% due 10/12/2054...................... GBP 30,000 $ 69,782
North American Development Bank
Senior Notes
2.30% due 10/10/2018...................... 584,000 596,195
----------
1,556,349
----------
TELECOM SERVICES -- 0.7%
Altice Financing SA
Senior Sec. Notes
6.50% due 01/15/2022*..................... 918,000 942,097
Altice Financing SA
Senior Sec. Notes
6.63% due 02/15/2023*..................... 507,000 522,210
Altice SA
Company Guar. Notes
7.75% due 05/15/2022*..................... 1,211,000 1,231,436
Virgin Media Secured Finance PLC
Senior Sec. Notes
5.50% due 01/15/2025*..................... 500,000 518,125
----------
3,213,868
----------
TELEPHONE-INTEGRATED -- 1.1%
Deutsche Telekom International Finance BV
Company Guar. Notes
4.25% due 07/13/2022...................... EUR 225,000 301,705
Empresa de Telecomunicaciones de Bogota
Senior Notes
7.00% due 01/17/2023*..................... COP 640,000,000 233,231
Koninklijke KPN NV
Senior Notes
5.75% due 09/17/2029...................... GBP 135,000 250,241
Oi SA
Senior Notes
9.75% due 09/15/2016*(5).................. BRL 575,000 161,246
Orange SA
Senior Notes
7.25% due 11/10/2020...................... GBP 50,000 94,447
Telecom Italia Capital SA
Company Guar. Notes
7.18% due 06/18/2019...................... 463,000 533,029
Telecom Italia Capital SA
Company Guar. Notes
7.72% due 06/04/2038...................... 738,000 861,615
Telecom Italia SpA
Senior Notes
3.25% due 01/16/2023...................... EUR 400,000 455,858
Telefonica Emisiones SAU
Company Guar. Notes
4.69% due 11/11/2019...................... EUR 200,000 252,818
Telefonica Emisiones SAU
Company Guar. Notes
4.75% due 02/07/2017...................... EUR 300,000 348,500
Telefonica Emisiones SAU
Company Guar. Notes
5.29% due 12/09/2022...................... GBP 50,000 87,112
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------------
TELEPHONE-INTEGRATED (CONTINUED)
Verizon Communications, Inc.
Senior Notes
3.25% due 02/17/2026.......................... EUR 500,000 $ 641,812
Verizon Communications, Inc.
Senior Notes
4.86% due 08/21/2046.......................... 887,000 928,631
------------
5,150,245
------------
TRANSPORT-RAIL -- 0.3%
Kazakhstan Temir Zholy Finance BV
Company Guar. Notes
6.95% due 07/10/2042.......................... 400,000 366,080
Kazakhstan Temir Zholy Finance BV
Company Guar. Notes
6.38% due 10/06/2020.......................... 650,000 644,443
Russian Railways via RZD Capital PLC
Senior Notes
5.70% due 04/05/2022.......................... 400,000 358,000
------------
1,368,523
------------
TRANSPORT-SERVICES -- 0.1%
Transnet SOC, Ltd.
Senior Notes
4.00% due 07/26/2022*......................... 300,000 291,966
------------
TOTAL FOREIGN CORPORATE BONDS & NOTES
(cost $124,437,431)........................... 115,517,412
------------
FOREIGN GOVERNMENT OBLIGATIONS -- 14.3%
ELECTRIC-DISTRIBUTION -- 0.1%
Hydro-Quebec
Government Guar. Notes
1.38% due 06/19/2017.......................... 527,000 532,036
------------
REGIONAL AGENCIES -- 0.1%
Japan Finance Organization for Municipalities
Senior Notes
0.88% due 09/22/2021.......................... EUR 400,000 440,629
------------
SOVEREIGN -- 14.1%
Bolivarian Republic of Venezuela
Senior Notes
9.00% due 05/07/2023.......................... 370,000 132,275
Bolivarian Republic of Venezuela
Senior Notes
9.38% due 01/13/2034.......................... 278,000 102,026
Bolivarian Republic of Venezuela
Senior Notes
11.75% due 10/21/2026......................... 560,000 225,400
Bolivarian Republic of Venezuela
Senior Notes
11.95% due 08/05/2031......................... 555,000 225,885
Bolivarian Republic of Venezuela
Senior Notes
12.75% due 08/23/2022......................... 790,000 345,625
Commonwealth of Jamaica
Senior Notes
8.00% due 06/24/2019.......................... 160,000 176,320
Commonwealth of Jamaica
Senior Notes
8.00% due 03/15/2039.......................... 250,000 267,188
40
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
---------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
SOVEREIGN (CONTINUED)
Dominican Republic
Senior Notes
5.88% due 04/18/2024*................... $ 370,000 $387,575
Dominican Republic
Senior Notes
5.88% due 04/18/2024.................... 380,000 398,050
Dominican Republic
Senior Notes
6.60% due 01/28/2024*................... 260,000 282,750
Dominican Republic
Senior Notes
6.85% due 01/27/2045.................... 400,000 420,000
Dominican Republic
Senior Notes
7.45% due 04/30/2044.................... 350,000 394,625
Dominican Republic
Senior Notes
8.63% due 04/20/2027.................... 600,000 712,500
Federal Democratic Republic of Ethiopia
Senior Notes
6.63% due 12/11/2024*................... 450,000 437,063
Federative Republic of Brazil
Senior Notes
4.25% due 01/07/2025.................... 750,000 735,000
Federative Republic of Brazil
Senior Notes
4.88% due 01/22/2021.................... 675,000 708,750
Federative Republic of Brazil
Senior Notes
5.00% due 01/27/2045.................... 464,000 429,200
Government of Canada
Senior Notes
0.88% due 02/14/2017.................... 527,000 529,668
Government of Italy
Senior Notes
6.00% due 08/04/2028.................... GBP 95,000 178,685
Government of Romania
Senior Notes
4.88% due 01/22/2024.................... 700,000 775,250
Government of Romania
Senior Notes
6.13% due 01/22/2044.................... 330,000 419,661
Islamic Republic of Pakistan
Senior Notes
8.25% due 04/15/2024.................... 750,000 790,462
Kingdom of Bahrain
Senior Notes
6.13% due 08/01/2023*................... 821,000 913,362
Kingdom of Spain
Senior Notes
5.25% due 04/06/2029.................... GBP 300,000 531,197
Lebanese Republic
Senior Notes
4.00% due 12/31/2017.................... 319,500 315,906
Lebanese Republic
Senior Notes
6.00% due 01/27/2023.................... 750,000 752,962
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------
SOVEREIGN (CONTINUED)
Lebanese Republic
Senior Notes
6.60% due 11/27/2026........... $1,100,000 $1,127,500
Lebanese Republic
Senior Notes
8.25% due 04/12/2021........... 350,000 392,613
Oriental Republic of Uruguay
Senior Notes
4.50% due 08/14/2024........... 1,053,000 1,142,505
Oriental Republic of Uruguay
Senior Notes
5.10% due 06/18/2050........... 760,000 790,400
Oriental Republic of Uruguay
Senior Notes
7.88% due 01/15/2033(14)....... 500,000 710,000
Plurinational State of Bolivia
Senior Notes
5.95% due 08/22/2023*.......... 280,000 289,450
Republic of Armenia
Senior Notes
6.00% due 09/30/2020........... 750,000 731,250
Republic of Armenia
Notes
7.15% due 03/26/2025*.......... 380,000 370,500
Republic of Chile
Senior Notes
3.25% due 09/14/2021........... 700,000 743,750
Republic of Colombia
Senior Notes
2.63% due 03/15/2023........... 200,000 188,000
Republic of Colombia
Senior Notes
6.13% due 01/18/2041........... 900,000 1,066,500
Republic of Colombia
Senior Notes
7.38% due 03/18/2019........... 650,000 767,975
Republic of Costa Rica
Senior Notes
4.25% due 01/26/2023........... 830,000 788,500
Republic of Costa Rica
Senior Notes
7.00% due 04/04/2044*.......... 500,000 508,750
Republic of Costa Rica
Senior Notes
7.16% due 03/12/2045*.......... 280,000 288,400
Republic of Croatia
Senior Notes
5.50% due 04/04/2023*.......... 426,000 452,092
Republic of Croatia
Senior Notes
6.75% due 11/05/2019........... 700,000 776,125
Republic of El Salvador
Senior Notes
5.88% due 01/30/2025........... 800,000 783,000
Republic of El Salvador
Senior Notes
7.63% due 02/01/2041........... 740,000 764,050
41
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
SOVEREIGN (CONTINUED)
Republic of Honduras
Senior Notes
7.50% due 03/15/2024...... $ 370,000 $ 393,125
Republic of Hungary
Senior Notes
4.00% due 03/25/2019...... 350,000 365,053
Republic of Hungary
Senior Notes
5.38% due 03/25/2024...... 500,000 560,625
Republic of Hungary
Senior Notes
5.75% due 11/22/2023...... 970,000 1,115,500
Republic of Hungary
Senior Notes
7.63% due 03/29/2041...... 170,000 245,820
Republic of Indonesia
Senior Notes
4.13% due 01/15/2025*..... 1,130,000 1,159,662
Republic of Indonesia
Senior Notes
5.25% due 01/17/2042...... 500,000 524,375
Republic of Indonesia
Senior Notes
5.88% due 03/13/2020...... 750,000 848,437
Republic of Indonesia
Senior Notes
5.88% due 01/15/2024*..... 430,000 497,187
Republic of Indonesia
Senior Notes
6.63% due 02/17/2037...... 117,000 141,863
Republic of Indonesia
Senior Notes
8.50% due 10/12/2035...... 300,000 433,125
Republic of Italy
Senior Notes
5.25% due 12/07/2034...... GBP 155,000 277,796
Republic of Ivory Coast
Senior Notes
5.38% due 07/23/2024...... 400,000 378,000
Republic of Ivory Coast
Senior Notes
6.38% due 03/03/2028...... 550,000 551,375
Republic of Kazakhstan
Senior Notes
3.88% due 10/14/2024...... 400,000 369,560
Republic of Kazakhstan
Senior Notes
3.88% due 10/14/2024*..... 400,000 369,560
Republic of Kazakhstan
Senior Notes
4.88% due 10/14/2044...... 850,000 730,425
Republic of Kenya
Notes
5.88% due 06/24/2019...... 700,000 720,475
Republic of Kenya
Senior Notes
6.88% due 06/24/2024*..... 860,000 898,055
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------
SOVEREIGN (CONTINUED)
Republic of Latvia
Senior Notes
5.25% due 06/16/2021.... $1,080,000 $1,243,350
Republic of Lithuania
Senior Notes
5.13% due 09/14/2017.... 200,000 217,050
Republic of Lithuania
Senior Notes
6.63% due 02/01/2022.... 650,000 809,900
Republic of Lithuania
Senior Notes
7.38% due 02/11/2020.... 1,200,000 1,471,295
Republic of Mozambique
Government Guar. Notes
6.31% due 09/11/2020.... 900,000 864,225
Republic of Panama
Senior Notes
5.20% due 01/30/2020.... 670,000 745,375
Republic of Panama
Senior Notes
6.70% due 01/26/2036.... 670,000 877,700
Republic of Panama
Senior Notes
7.13% due 01/29/2026.... 650,000 845,812
Republic of Paraguay
Notes
6.10% due 08/11/2044*... 260,000 285,350
Republic of Paraguay
Notes
6.10% due 08/11/2044.... 750,000 823,125
Republic of Peru
Senior Notes
5.63% due 11/18/2050.... 271,000 331,298
Republic of Peru
Senior Notes
6.55% due 03/14/2037.... 500,000 665,625
Republic of Peru
Senior Notes
7.13% due 03/30/2019.... 835,000 997,825
Republic of Peru
Senior Notes
7.35% due 07/21/2025.... 990,000 1,346,400
Republic of Peru
Senior Notes
8.75% due 11/21/2033.... 480,000 762,600
Republic of Poland
Senior Notes
3.00% due 03/17/2023.... 1,110,000 1,139,415
Republic of Poland
Senior Notes
4.00% due 01/22/2024.... 1,530,000 1,679,940
Republic of Poland
Senior Notes
5.00% due 03/23/2022.... 625,000 717,969
Republic of Poland
Senior Notes
5.13% due 04/21/2021.... 50,000 57,440
42
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
SOVEREIGN (CONTINUED)
Republic of Poland
Senior Notes
5.63% due 06/20/2018........ EUR 250,000 $ 315,737
Republic of Senegal
Bonds
6.25% due 07/30/2024........ 760,000 740,594
Republic of Serbia
Senior Notes
5.25% due 11/21/2017........ 400,000 414,740
Republic of South Africa
Senior Notes
5.38% due 07/24/2044........ 330,000 354,618
Republic of South Africa
Senior Notes
5.88% due 09/16/2025........ 600,000 687,120
Republic of South Africa
Senior Notes
6.25% due 03/08/2041........ 942,000 1,130,400
Republic of South Africa
Senior Notes
6.88% due 05/27/2019........ 360,000 413,964
Republic of Sri Lanka
Senior Notes
5.13% due 04/11/2019........ 450,000 449,437
Republic of the Philippines
Senior Notes
3.95% due 01/20/2040........ 720,000 764,100
Republic of the Philippines
Senior Notes
4.00% due 01/15/2021........ 330,000 361,329
Republic of the Philippines
Senior Notes
6.50% due 01/20/2020........ 325,000 389,188
Republic of the Philippines
Senior Notes
8.38% due 06/17/2019........ 100,000 125,500
Republic of the Philippines
Senior Notes
9.88% due 01/15/2019........ 600,000 771,750
Republic of the Philippines
Senior Notes
10.63% due 03/16/2025....... 341,000 554,977
Republic of Turkey
Senior Notes
3.25% due 03/23/2023........ 1,040,000 983,726
Republic of Turkey
Senior Notes
4.88% due 04/16/2043........ 330,000 325,875
Republic of Ukraine
Senior Notes
7.80% due 11/28/2022........ 596,000 233,608
Republic of Venezuela
Senior Notes
7.00% due 12/01/2018........ 450,000 182,250
Republic of Zambia
Notes
5.38% due 09/20/2022........ 410,000 374,228
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------------------
SOVEREIGN (CONTINUED)
Republic of Zambia
Senior Notes
8.50% due 04/14/2024............... $ 750,000 $ 795,000
Russian Federation
Senior Notes
5.88% due 09/16/2043*.............. 600,000 582,750
Russian Federation
Senior Notes
7.50% due 03/31/2030(7)............ 431,250 494,816
Slovak Republic
Senior Notes
4.38% due 05/21/2022............... 610,000 681,913
United Mexican States
Senior Notes
3.60% due 01/30/2025............... 1,147,000 1,177,109
United Mexican States
Senior Notes
4.00% due 10/02/2023............... 710,000 751,180
United Mexican States
Senior Notes
4.75% due 03/08/2044............... 592,000 621,600
United Mexican States
Senior Notes
5.63% due 01/15/2017............... 430,000 461,175
United Mexican States
Senior Notes
6.05% due 01/11/2040............... 900,000 1,111,500
-----------
66,980,641
-----------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(cost $68,807,763)................. 67,953,306
-----------
U.S. GOVERNMENT AGENCIES -- 4.2%
FEDERAL HOME LOAN MTG. CORP. -- 1.2%
1.89% due 02/01/2037 FRS........... 32,453 34,186
2.44% due 11/01/2037 FRS........... 216,405 232,004
2.50% due 01/01/2028............... 367,881 378,172
2.50% due 04/01/2028............... 120,983 124,332
3.00% due 08/01/2043............... 1,218,254 1,244,916
3.50% due 03/01/2042............... 478,919 502,969
3.50% due 04/01/2042............... 495,233 520,096
3.50% due 09/01/2043............... 540,686 570,032
3.50% due 03/01/2045............... 389,000 408,197
4.00% due 09/01/2040............... 414,707 444,467
4.50% due 02/01/2020............... 14,993 15,735
4.50% due 08/01/2020............... 37,832 39,681
4.50% due 01/01/2039............... 39,423 42,869
4.50% due 12/01/2039............... 21,464 23,897
5.00% due 02/01/2034............... 45,750 50,918
5.00% due 05/01/2034............... 62,692 70,193
5.00% due 03/01/2039............... 47,235 52,332
5.00% due 07/01/2040............... 340,478 377,971
5.50% due 05/01/2037............... 124,998 140,196
6.00% due 03/01/2040............... 99,070 112,843
6.50% due 02/01/2035............... 28,667 32,841
Federal Home Loan Mtg. Corp. REMIC
Series 3964, Class MD
2.00% due 01/15/2041(2)............ 17,995 18,254
43
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
----------------------------------------------------------------
U.S. GOVERNMENT AGENCIES (CONTINUED)
FEDERAL HOME LOAN MTG. CORP. (CONTINUED)
Series 3572, Class JS FRS
6.63% due 09/15/2039(2)(10)............. $1,018,990 $ 172,553
Series 1103, Class N IO
11.57% due 06/15/2021(2)(10)............ 889 124
Federal Home Loan Mtg. Corp. Structured
Agency Credit Risk FRS
Series 2014-HQ1, Class M1
1.82% due 08/25/2024(2)................. 60,777 61,217
Series 2014-HQ2, Class M2
2.37% due 09/25/2024(2)................. 100,000 99,491
----------
5,770,486
----------
FEDERAL NATIONAL MTG. ASSOC. -- 2.8%
2.10% due 05/01/2037 FRS................ 57,650 61,279
2.24% due 07/01/2039 FRS................ 140,676 149,141
2.38% due 11/01/2036 FRS................ 101,106 108,048
2.43% due 08/01/2035 FRS................ 124,436 133,529
2.50% due 04/01/2028.................... 205,055 211,012
2.99% due 10/01/2040 FRS................ 67,238 71,890
3.00% due 10/01/2027.................... 430,672 451,988
3.00% due 11/01/2027.................... 493,272 518,020
3.00% due 03/01/2042.................... 190,486 195,245
3.00% due 12/01/2042.................... 192,746 197,559
3.00% due 05/01/2043.................... 1,074,944 1,101,086
3.00% due April TBA..................... 627,000 641,010
3.20% due 10/01/2040 FRS................ 119,487 127,483
3.50% due 08/01/2026.................... 191,251 203,138
3.50% due 08/01/2027.................... 200,254 212,584
3.50% due 10/01/2028.................... 63,687 68,179
3.50% due 08/01/2042.................... 193,710 203,722
3.50% due 02/01/2043.................... 173,433 183,989
3.50% due April TBA..................... 1,485,000 1,559,714
4.00% due 11/01/2025.................... 284,833 307,405
4.00% due 04/01/2039.................... 241,765 258,476
4.00% due 06/01/2039.................... 508,374 554,434
4.00% due 09/01/2040.................... 450,301 482,748
4.00% due 10/01/2040.................... 514,851 551,937
4.00% due 11/01/2041.................... 415,863 445,579
4.00% due 12/01/2043.................... 14,539 15,805
4.00% due 10/01/2044.................... 183,870 196,645
4.00% due April TBA..................... 580,000 620,147
4.50% due 06/01/2019.................... 38,528 40,469
4.50% due 11/01/2022.................... 88,698 93,723
4.50% due 06/01/2023.................... 42,676 45,765
4.50% due 01/01/2039.................... 496,805 542,128
4.50% due 07/01/2041.................... 66,653 73,078
4.50% due April TBA..................... 960,000 1,047,300
5.00% due 06/01/2019.................... 29,289 31,068
5.00% due 01/01/2023.................... 19,128 20,104
5.00% due 03/01/2034.................... 38,307 42,704
5.00% due 05/01/2035.................... 23,076 25,683
5.00% due 05/01/2040.................... 177,830 198,526
5.00% due 07/01/2040.................... 422,842 469,947
5.50% due 06/01/2038.................... 61,362 69,711
6.00% due 02/01/2032.................... 5,452 6,213
6.00% due 05/01/2034.................... 3,462 3,978
6.00% due 10/01/2034.................... 22,521 25,651
6.00% due 10/01/2037.................... 48,150 54,837
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------------
FEDERAL NATIONAL MTG. ASSOC. (CONTINUED)
6.50% due 10/01/2038............................ $ 136,676 $ 156,917
7.50% due 01/01/2030............................ 1,474 1,525
8.00% due 11/01/2028............................ 5,714 6,798
Fannie Mae Connecticut Avenue
Securities FRS
Series 2014-C01, Class M1
1.77% due 01/25/2024(2)......................... 55,335 55,646
Series 2013-C01, Class M1
2.17% due 10/25/2023(2)......................... 166,360 168,533
Federal National Mtg. Assoc., REMIC
Series 2011-117, Class MA
2.00% due 08/25/2040(2)......................... 148,985 149,778
Series 1989-2, Class D
8.80% due 01/25/2019(2)......................... 6,810 7,391
-----------
13,169,265
-----------
GOVERNMENT NATIONAL MTG. ASSOC. -- 0.1%
3.00% due 02/20/2045............................ 227,330 234,601
3.50% due 02/20/2045............................ 184,000 193,974
-----------
428,575
-----------
TENNESSEE VALLEY AUTHORITY -- 0.1%
1.75% due 10/15/2018............................ 335,000 341,355
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $19,076,604).............................. 19,709,681
-----------
U.S. GOVERNMENT TREASURIES -- 0.7%
UNITED STATES TREASURY BONDS -- 0.1%
3.63% due 02/15/2044............................ 312,000 381,493
-----------
UNITED STATES TREASURY NOTES -- 0.6%
0.07% due 01/31/2016 FRS........................ 1,621,000 1,620,844
0.13% due 04/15/2018 TIPS(11)................... 1,299,353 1,325,543
0.75% due 01/15/2017............................ 400 402
2.00% due 02/15/2025............................ 128,000 128,810
-----------
3,075,599
-----------
TOTAL U.S. GOVERNMENT TREASURIES
(cost $3,483,104)............................... 3,457,092
-----------
LOANS(12)(13) -- 1.2%
AEROSPACE/DEFENSE -- 0.1%
SI Organization, Inc. FRS
BTL-Delayed Draw
5.75% due 07/15/2015............................ 34,546 34,676
SI Organization, Inc. FRS
BTL
5.75% due 11/23/2019............................ 518,415 520,359
-----------
555,035
-----------
COMPUTER SERVICES -- 0.2%
Sungard Availability Services Capital, Inc. FRS
BTL-1st Lien
6.00% due 03/31/2019............................ 1,070,270 931,135
-----------
ELECTRIC-DISTRIBUTION -- 0.3%
Cedar Bay Generating Co. LP FRS
BTL
6.25% due 04/23/2020............................ 1,267,144 1,257,546
-----------
44
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
---------------------------------------------------------------------
LOANS (CONTINUED)
MEDICAL-HOSPITALS -- 0.2%
Ardent Medical Services, Inc. FRS
BTL-B
6.75% due 07/02/2018........................ $1,138,083 $1,139,862
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.1%
American Energy-Marcellus LLC FRS
BTL-2nd Lien
8.50% due 07/09/2021........................ 199,129 147,604
Sabine Oil & Gas LLC FRS
BTL-2nd Lien
8.75% due 12/31/2018........................ 647,315 310,711
----------
458,315
----------
PUBLISHING-BOOKS -- 0.1%
Cengage Learning Acquisitions Term Loan
BTL-1st Lien
7.00% due 03/31/2020........................ 748,111 750,355
----------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 0.2%
SunEdison Semiconductor, Ltd. FRS
BTL-1st Lien
6.50% due 05/27/2019........................ 829,965 819,591
----------
TOTAL LOANS
(cost $6,423,849)........................... 5,911,839
----------
MUNICIPAL BONDS & NOTES -- 0.4%
Ohio State University
Revenue Bonds
Series A
4.80% due 06/01/2111........................ 616,000 684,986
Port Authority of New York & New Jersey
Revenue Bonds
Series 174
4.46% due 10/01/2062........................ 725,000 792,244
Port Authority of New York & New Jersey
Revenue Bonds
Series 168
4.93% due 10/01/2051........................ 353,000 421,757
----------
TOTAL MUNICIPAL BONDS & NOTES
(cost $1,687,990)........................... 1,898,987
----------
COMMON STOCKS -- 0.1%
POWER CONVERTER/SUPPLY EQUIPMENT -- 0.0%
TPT Acquisition, Inc.+(3)(5)................. 10,910 163,650
----------
TELEVISION -- 0.1%
ION Media Networks, Inc.+(3)(5).............. 655 330,513
----------
TOTAL COMMON STOCKS
(cost $163,656)............................. 494,163
----------
PREFERRED SECURITIES -- 0.4%
DIVERSIFIED BANKING INSTITUTIONS -- 0.2%
Citigroup, Inc.
Series J
7.13%....................................... 31,375 867,205
----------
ELECTRIC-INTEGRATED -- 0.1%
Entergy Louisiana LLC
4.70%....................................... 12,025 288,119
----------
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-----------------------------------------------------------------
SOVEREIGN AGENCY -- 0.0%
Federal Home Loan Mtg. Corp. FRS
Series Z
8.38%.................................. 11,300 $ 47,008
----------
TELECOM SERVICES -- 0.1%
Qwest Corp.
6.13%.................................. 23,325 583,125
----------
TOTAL PREFERRED SECURITIES
(cost $1,842,533)...................... 1,785,457
----------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 4.6%
BANKS-COMMERCIAL -- 0.4%
Banco Bilbao Vizcaya Argentaria SA VRS
7.00% due 02/19/2019(4)................ EUR 200,000 221,233
Danske Bank A/S FRS
5.56% due 03/16/2017(4)................ GBP 50,000 76,766
Danske Bank A/S VRS
5.75% due 04/06/2020(4)................ EUR 300,000 332,252
HSBC Bank Capital Funding LP VRS
5.84% due 11/05/2031(4)................ GBP 100,000 165,214
Standard Chartered
PLC VRS
6.50% due 04/02/2020*(4)............... 437,000 440,864
Standard Chartered Bank VRS
8.10% due 05/11/2016(4)................ GBP 190,000 296,995
Woori Bank
4.75% due 04/30/2024................... 350,000 373,929
----------
1,907,253
----------
BANKS-SUPER REGIONAL -- 0.3%
Fifth Third Bancorp FRS
Series J
4.90% due 09/30/2019(4)................ 558,000 539,168
Wells Fargo & Co. FRS
Series U
5.88% due 06/15/2025(4)................ 386,000 408,272
Wells Fargo Capital X
5.95% due 12/01/2086................... 223,000 231,084
----------
1,178,524
----------
BUILDING SOCIETIES -- 0.1%
Nationwide Building Society VRS
6.88% due 06/20/2019(4)................ GBP 185,000 278,202
----------
CELLULAR TELECOM -- 0.0%
America Movil SAB de CV VRS
6.38% due 09/06/2073................... GBP 100,000 163,359
----------
DIVERSIFIED BANKING INSTITUTIONS --1.8%
BAC Capital Trust XIII FRS
Series F
1.00% due 05/14/2015(4)................ 1,070,000 845,300
Bank of America Corp. FRS
6.10% due 03/17/2025(4)................ 620,000 628,912
Citigroup, Inc. VRS
Series N
5.80% due 11/15/2019(4)................ 648,000 649,620
45
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
------------------------------------------------------------------------
PREFERRED SECURITIES/CAPITAL SECURITIES (CONTINUED)
DIVERSIFIED BANKING INSTITUTIONS (CONTINUED)
Credit Agricole SA VRS
6.63% due 09/23/2019*(4)...................... $ 524,000 $ 525,310
Credit Suisse Group AG VRS
6.25% due 12/18/2024*(4)...................... 570,000 560,025
Credit Suisse Group AG VRS
7.50% due 12/11/2023*(4)...................... 505,000 542,244
Deutsche Bank AG VRS
7.50% due 04/30/2025(4)....................... 1,200,000 1,221,000
HSBC Holdings PLC VRS
6.38% due 03/30/2025(4)....................... 219,000 223,927
JPMorgan Chase & Co. FRS
Series V
5.00% due 07/01/2019(4)....................... 444,000 436,208
JPMorgan Chase & Co. FRS
Series U
6.13% due 04/30/2024(4)....................... 1,197,000 1,220,820
JPMorgan Chase & Co. FRS
Series 1
7.90% due 04/30/2018(4)....................... 546,000 587,633
Societe Generale SA VRS
6.00% due 01/27/2020*(4)...................... 715,000 678,356
Societe Generale SA VRS
7.00% due 12/19/2017(4)....................... EUR 300,000 359,332
UBS AG FRS
4.28% due 04/15/2015(4)....................... EUR 300,000 322,575
----------
8,801,262
----------
ELECTRIC-INTEGRATED -- 0.1%
Dominion Resources, Inc.
5.75% due 10/01/2054(4)....................... 315,000 336,514
----------
FINANCE-CREDIT CARD -- 0.1%
American Express Co. FRS
5.20% due 11/15/2019(4)....................... 547,000 555,205
----------
FINANCE-INVESTMENT BANKER/BROKER -- 0.0%
Lehman Brothers Holdings Capital Trust VII
Escrow Security
5.86% due 11/30/2056+(5)...................... 222,000 22
----------
FINANCE-OTHER SERVICES -- 0.1%
National Rural Utilities Cooperative Finance
Corp. FRS
4.75% due 04/30/2043.......................... 547,000 548,641
----------
FINANCIAL GUARANTEE INSURANCE -- 0.3%
Assured Guaranty Municipal Holdings, Inc. FRS
6.40% due 12/15/2066*......................... 1,880,000 1,598,000
----------
FOOD-DAIRY PRODUCTS -- 0.3%
Land O'Lakes Capital Trust I
7.45% due 03/15/2028*......................... 1,450,000 1,566,000
----------
INSURANCE-LIFE/HEALTH -- 0.1%
Nippon Life Insurance Co. VRS
5.10% due 10/16/2044*......................... 324,000 351,135
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT** (NOTE 3)
-------------------------------------------------------------------------
INSURANCE-MULTI-LINE -- 0.4%
Allianz Finance II BV VRS
4.38% due 02/17/2017(4).................... EUR 635,000 $ 720,338
AXA SA VRS
3.88% due 10/08/2025(4).................... EUR 250,000 296,116
Farmers Exchange Capital III FRS
5.45% due 10/15/2054*...................... 450,000 487,468
MetLife, Inc.
6.40% due 12/15/2066....................... 533,000 631,605
------------
2,135,527
------------
INSURANCE-REINSURANCE -- 0.1%
Munich Re Group VRS
5.77% due 06/12/2017(4).................... EUR 400,000 469,443
------------
REAL ESTATE MANAGEMENT/SERVICES -- 0.1%
Deutsche Annington Finance BV VRS
4.00% due 12/17/2021(4).................... EUR 400,000 453,756
------------
TELEPHONE-INTEGRATED -- 0.2%
Orange SA VRS
4.25% due 02/07/2020(4).................... EUR 400,000 460,637
Telefonica Europe BV VRS
4.20% due 12/04/2019(4).................... EUR 300,000 340,478
Telefonica Europe BV VRS
6.75% due 11/26/2020(4).................... GBP 100,000 161,876
------------
962,991
------------
TOOLS-HAND HELD -- 0.2%
Stanley Black & Decker, Inc. FRS
5.75% due 12/15/2053....................... 629,000 677,370
------------
TOTAL PREFERRED SECURITIES/CAPITAL SECURITIES
(cost $21,308,060)......................... 21,983,204
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $470,967,473)........................ 461,497,148
------------
SHORT-TERM INVESTMENT SECURITIES -- 1.6%
TIME DEPOSITS -- 1.6%
Euro Time Deposit with State Street
Bank and Trust Co.
0.01 due 04/01/2015
(cost $7,762,000).......................... 7,762,000 7,762,000
------------
REPURCHASE AGREEMENT -- 0.1%
State Street Bank and Trust Co.
Joint Repurchase Agreement(15)
(cost $365,000)............................ 365,000 365,000
------------
TOTAL INVESTMENTS
(cost $479,094,473)(16).................... 98.9% 469,624,148
Other assets less liabilities................. 1.1 5,148,240
------------ ------------
NET ASSETS -- 100.0% $474,772,388
============ ============
--------
* 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, 2015, the
46
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
aggregate value of these securities was $128,694,502 representing 27.1% of
net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
** Denominated in United States Dollars unless otherwise indicated.
+ Non-income producing security
(1) Commercial Mortgage Backed Security
(2) Collateralized Mortgage Obligation
(3) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 3.
(4) Perpetual maturity--maturity date reflects the next call date.
(5) Illiquid security. At March 31, 2015, the aggregate value of these
securities was $2,270,541 representing 0.5% of net assets.
(6) Security in default of interest and principal at maturity.
(7) "Step-up" security where the rate increases ("steps-up") at a
predetermined rate. Rate shown reflects the increased rate.
(8) Company has filed for Chapter 7 bankruptcy.
(9) Company has filed for bankruptcy protection in the country of issuance.
(10) Interest Only
(11) Principal amount of security is adjusted for inflation.
(12) 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.
(13) 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.
(14) PIK ("Payment-in-Kind") security -- Income may be paid in additional
securities or cash at the discretion of the issuer.
(15) See Note 3 for details of Joint Repurchase Agreements.
(16) See Note 6 for cost of investments on a tax basis.
BTL --Bank Term Loan
REMIC --Real Estate Mortgage Investment Conduit
TBA --Securities purchases 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.
TIPS --Treasury Inflation Protected Securities
FRS --Floating Rate Security
VRS --Variable Rate Security
The rates shown on FRS and VRS are the current rates at March 31, 2015 and
unless noted otherwise the dates are the original maturity dates.
BRL --Brazilian Real
COP --Columbian Peso
EUR --Euro
GBP --British Pound
47
SUNAMERICA STRATEGIC BOND FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
CONTRACT IN EXCHANGE DELIVERY UNREALIZED UNREALIZED
COUNTERPARTY TO DELIVER FOR DATE APPRECIATION DEPRECIATION
------------------------------------------------------------------------------------------
JPMorgan Chase Bank N.A EUR 23,300,000 USD 25,807,779 04/10/2015 $ 751,791 $ --
EUR 16,600,000 USD 18,219,994 04/24/2015 365,693 --
EUR 650,000 USD 697,187 04/24/2015 -- (1,927)
GBP 6,700,000 USD 10,225,071 04/10/2015 286,824 --
GBP 149,358 USD 220,000 04/10/2015 -- (1,546)
USD 2,764,283 EUR 2,500,000 04/10/2015 -- (75,872)
USD 656,781 GBP 432,000 04/10/2015 -- (15,986)
---------- --------
Net Unrealized Appreciation/(Depreciation).... $1,404,308 $(95,331)
========== ========
EUR --Euro
GBP --British Pound
USD --United States Dollar
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2015 (see Note 3):
LEVEL 1 -- UNADJUSTED LEVEL 2 -- OTHER LEVEL 3 -- SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
- --------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
----------------------
Asset Backed Securities................. $ -- $ 4,239,883 $ -- $ 4,239,883
U.S. Corporate Bonds & Notes:
Airlines.............................. -- 2,934,969 58,504 2,993,473
Gambling (Non-Hotel).................. -- -- 4,685 4,685
Rubber/Plastic Products............... -- -- 0 0
Other Industries...................... -- 215,547,966 -- 215,547,966
Foreign Corporate Bonds & Notes:
Special Purpose Entity................ -- -- 0 0
Other Industries...................... -- 115,517,412 -- 115,517,412
Foreign Government Obligations.......... -- 67,953,306 -- 67,953,306
U.S. Government Agencies................ -- 19,709,681 -- 19,709,681
U.S. Government Treasuries.............. -- 3,457,092 -- 3,457,092
Loans................................... -- 5,911,839 -- 5,911,839
Municipal Bonds & Notes................. -- 1,898,987 -- 1,898,987
Common Stocks........................... -- -- 494,163 494,163
Preferred Securities.................... 1,785,457 -- -- 1,785,457
Preferred Securities/Capital Securities. -- 21,983,204 -- 21,983,204
Short-Term Investment Securities........ -- 7,762,000 -- 7,762,000
Repurchase Agreement.................... -- 365,000 -- 365,000
---------- ------------ -------- ------------
TOTAL INVESTMENTS AT VALUE.............. $1,785,457 $467,281,339 $557,352 $469,624,148
========== ============ ======== ============
Other Financial Instruments:+
-----------------------------
Open Forward Foreign Currency Contracts. $ -- $ 1,404,308 $ -- $ 1,404,308
========== ============ ======== ============
LIABILITIES:
Other Financial Instruments:+
-----------------------------
Open Forward Foreign Currency Contracts. $ -- $ 95,331 $ -- $ 95,331
========== ============ ======== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
+ Other financial instruments are derivative instruments, not reflected in the
Portfolio of Investments, such as futures, forward, swap and written option
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.
At the beginning and end of the reporting period, Level 3 investments were not
considered a material portion of the Fund.
See Notes to Financial Statements
48
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED)
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Oil Companies-Exploration & Production. 4.8%
Medical-Hospitals...................... 4.6
Casino Hotels.......................... 3.4
Cable/Satellite TV..................... 2.7
Telephone-Integrated................... 2.7
Cellular Telecom....................... 2.6
Television............................. 2.5
Food-Misc./Diversified................. 2.4
Medical-Drugs.......................... 2.4
Airlines............................... 2.4
Broadcast Services/Program............. 2.2
Data Processing/Management............. 1.9
Auto-Cars/Light Trucks................. 1.7
Distribution/Wholesale................. 1.6
Hotels/Motels.......................... 1.6
Pipelines.............................. 1.6
Computers-Integrated Systems........... 1.5
Telecom Services....................... 1.5
Applications Software.................. 1.4
Commercial Services.................... 1.4
Real Estate Management/Services........ 1.3
Finance-Auto Loans..................... 1.2
Electronic Components-Semiconductors... 1.2
Building Products-Cement............... 1.2
Independent Power Producers............ 1.2
Commercial Services-Finance............ 1.1
Chemicals-Diversified.................. 1.1
Building & Construction Products-Misc.. 1.1
Auto/Truck Parts & Equipment-Original.. 1.1
Dialysis Centers....................... 1.1
Food-Catering.......................... 1.1
Building-Residential/Commercial........ 1.0
Computer Services...................... 0.9
Medical-Outpatient/Home Medical........ 0.9
Finance-Consumer Loans................. 0.9
Aerospace/Defense-Equipment............ 0.8
Containers-Metal/Glass................. 0.8
Satellite Telecom...................... 0.8
Publishing-Newspapers.................. 0.8
Medical Labs & Testing Services........ 0.8
Workers Comp/Injury Services........... 0.8
Rental Auto/Equipment.................. 0.7
Medical-HMO............................ 0.7
Steel-Producers........................ 0.7
Racetracks............................. 0.7
Gambling (Non-Hotel)................... 0.7
Oil & Gas Drilling..................... 0.6
Diversified Banking Institutions....... 0.6
Containers-Paper/Plastic............... 0.6
Energy-Alternate Sources............... 0.6
Specified Purpose Acquisitions......... 0.6
Consumer Products-Misc................. 0.6
Banks-Mortgage......................... 0.6
Computers-Periphery Equipment.......... 0.6
Human Resources........................ 0.6
Medical Products....................... 0.6
Advertising Sales...................... 0.6
Machinery-General Industrial........... 0.6
Diversified Minerals................... 0.5
Electric-Integrated.................... 0.5
Real Estate Investment Trusts.......... 0.5
Insurance-Property/Casualty............ 0.5
Paper & Related Products................. 0.5%
Multimedia............................... 0.5
Retail-Drug Store........................ 0.5
Finance-Leasing Companies................ 0.5
Retail-Leisure Products.................. 0.5
Leisure Products......................... 0.5
Internet Security........................ 0.4
Printing-Commercial...................... 0.4
Security Services........................ 0.4
Leisure Games............................ 0.4
Retail-Restaurants....................... 0.4
MRI/Medical Diagnostic Imaging........... 0.4
Bicycle Manufacturing.................... 0.4
Diversified Manufacturing Operations..... 0.4
Diversified Operations................... 0.4
Professional Sports...................... 0.4
Machinery-Electrical..................... 0.4
Physical Therapy/Rehabilitation Centers.. 0.4
Casino Services.......................... 0.4
Theaters................................. 0.3
Diagnostic Kits.......................... 0.3
Retail-Discount.......................... 0.3
Semiconductor Equipment.................. 0.3
Finance-Mortgage Loan/Banker............. 0.3
Finance-Investment Banker/Broker......... 0.3
Food-Baking.............................. 0.3
Diagnostic Equipment..................... 0.3
Insurance-Multi-line..................... 0.3
Investment Management/Advisor Services... 0.3
Physicians Practice Management........... 0.3
Banks-Commercial......................... 0.2
Non-Hazardous Waste Disposal............. 0.2
Educational Software..................... 0.2
Office Automation & Equipment............ 0.2
Retail-Arts & Crafts..................... 0.2
Finance-Other Services................... 0.2
Coal..................................... 0.2
Oil Refining & Marketing................. 0.2
Internet Financial Services.............. 0.2
Engineering/R&D Services................. 0.2
Metal-Diversified........................ 0.2
Gas-Distribution......................... 0.2
Retail-Pawn Shops........................ 0.2
Food-Retail.............................. 0.2
E-Commerce/Services...................... 0.2
Rubber/Plastic Products.................. 0.2
Building & Construction-Misc............. 0.2
Retail-Propane Distribution.............. 0.2
Chemicals-Specialty...................... 0.1
Machinery-Construction & Mining.......... 0.1
Home Decoration Products................. 0.1
Retail-Pet Food & Supplies............... 0.1
Shipbuilding............................. 0.1
Chemicals-Plastics....................... 0.1
Building Products-Doors & Windows........ 0.1
Internet Connectivity Services........... 0.1
Auto/Truck Parts & Equipment-Replacement. 0.1
Banks-Super Regional..................... 0.1
----
96.9%
====
--------
*Calculated as a percentage of net assets
49
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED) (CONTINUED)
CREDIT QUALITY ALLOCATION+#
A.......... 0.2%
Baa........ 1.1
Ba......... 33.0
B.......... 50.3
Caa........ 11.1
Ca......... 0.1
Not Rated@. 4.2
-----
100.0%
=====
--------
+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.
50
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
--------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES -- 0.0%
MEDICAL-DRUGS -- 0.0%
Savient Pharmaceuticals, Inc.
Escrow Notes
4.75% due 02/01/2018+(1)(2)
(cost $387,640)............................ $ 745,000 $ 0
----------
U.S. CORPORATE BONDS & NOTES -- 47.9%
AIRLINES -- 0.4%
American Airlines Group, Inc.
Company Guar. Notes
4.63% due 03/01/2020*...................... 245,000 239,947
US Airways Pass Through Trust
Series 2012-2, Class C
5.45% due 06/03/2018....................... 500,000 513,750
----------
753,697
----------
APPLICATIONS SOFTWARE -- 0.2%
Emdeon, Inc.
Company Guar. Notes
11.00% due 12/31/2019...................... 420,000 458,325
----------
AUTO-CARS/LIGHT TRUCKS -- 0.6%
FCA US LLC/CG Co-Issuer, Inc.
Sec. Notes
8.00% due 06/15/2019....................... 465,000 487,669
General Motors Co.
Senior Notes
4.88% due 10/02/2023....................... 665,000 720,005
----------
1,207,674
----------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.3%
Dana Holding Corp.
Senior Notes
5.50% due 12/15/2024....................... 155,000 159,650
MPG Holdco I, Inc.
Company Guar. Notes
7.38% due 10/15/2022*...................... 340,000 363,375
----------
523,025
----------
BANKS-COMMERCIAL -- 0.2%
CIT Group, Inc.
Senior Notes
5.50% due 02/15/2019*...................... 430,000 447,200
----------
BANKS-MORTGAGE -- 0.6%
Provident Funding Associates LP/
PFG Finance Corp.
Company Guar. Notes
6.75% due 06/15/2021*...................... 1,205,000 1,147,762
----------
BROADCAST SERVICES/PROGRAM -- 1.2%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes
7.63% due 03/15/2020....................... 1,425,000 1,499,812
iHeartCommunications, Inc.
Senior Sec. Notes
9.00% due 12/15/2019....................... 500,000 495,000
iHeartCommunications, Inc.
Senior Notes
10.00% due 01/15/2018...................... 260,000 221,000
----------
2,215,812
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
--------------------------------------------------------------------
BUILDING & CONSTRUCTION PRODUCTS-MISC. -- 1.1%
Builders FirstSource, Inc.
Senior Sec. Notes
7.63% due 06/01/2021*....................... $415,000 $ 418,113
Building Materials Corp.
Senior Notes
5.38% due 11/15/2024*....................... 180,000 182,700
NCI Building Systems, Inc.
Company Guar. Notes
8.25% due 01/15/2023*....................... 425,000 449,437
Nortek, Inc.
Company Guar. Notes
8.50% due 04/15/2021........................ 960,000 1,027,200
----------
2,077,450
----------
BUILDING PRODUCTS-CEMENT -- 0.3%
Cemex Finance LLC
Senior Sec. Notes
6.00% due 04/01/2024*....................... 490,000 488,775
----------
BUILDING-RESIDENTIAL/COMMERCIAL -- 1.0%
DR Horton, Inc.
Company Guar. Notes
4.00% due 02/15/2020........................ 180,000 182,520
Lennar Corp.
Company Guar. Notes
4.50% due 11/15/2019........................ 355,000 364,762
Standard Pacific Corp.
Company Guar. Notes
6.25% due 12/15/2021........................ 300,000 318,000
Taylor Morrison Communities, Inc./Monarch
Communities, Inc.
Company Guar. Notes
5.25% due 04/15/2021*....................... 400,000 396,000
TRI Pointe Holdings, Inc.
Senior Notes
4.38% due 06/15/2019*....................... 230,000 224,538
TRI Pointe Holdings, Inc.
Senior Notes
5.88% due 06/15/2024*....................... 400,000 391,000
----------
1,876,820
----------
CABLE/SATELLITE TV -- 2.5%
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
5.13% due 02/15/2023........................ 25,000 25,250
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
5.25% due 09/30/2022........................ 185,000 189,162
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
5.75% due 09/01/2023........................ 125,000 130,625
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
6.63% due 01/31/2022........................ 580,000 619,875
CCO Holdings LLC/CCO Holdings Capital Corp.
Company Guar. Notes
7.38% due 06/01/2020........................ 365,000 390,094
51
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
CABLE/SATELLITE TV (CONTINUED)
Cequel Communications Holdings I LLC/
Cequel Capital Corp.
Senior Notes
5.13% due 12/15/2021*....................... $ 570,000 $ 570,000
CSC Holdings LLC
Senior Notes
5.25% due 06/01/2024*....................... 775,000 790,500
DISH DBS Corp.
Company Guar. Notes
6.75% due 06/01/2021........................ 1,320,000 1,405,800
RCN Telecom Services LLC/RCN Capital Corp.
Senior Notes
8.50% due 08/15/2020*....................... 530,000 561,800
----------
4,683,106
----------
CASINO HOTELS -- 1.2%
Boyd Gaming Corp.
Company Guar. Notes
9.00% due 07/01/2020........................ 600,000 647,250
Caesars Entertainment Resort Properties LLC
Senior Sec. Notes
8.00% due 10/01/2020........................ 485,000 481,362
MGM Resorts International
Company Guar. Notes
6.75% due 10/01/2020........................ 1,000,000 1,072,500
----------
2,201,112
----------
CASINO SERVICES -- 0.3%
Scientific Games International, Inc.
Senior Sec. Notes
7.00% due 01/01/2022*....................... 455,000 465,238
----------
CELLULAR TELECOM -- 2.4%
Sprint Corp.
Company Guar. Notes
7.25% due 09/15/2021........................ 615,000 618,075
Sprint Corp.
Company Guar. Notes
7.88% due 09/15/2023........................ 1,050,000 1,071,000
Syniverse Holdings, Inc.
Company Guar. Notes
9.13% due 01/15/2019........................ 1,000,000 985,000
T-Mobile USA, Inc.
Company Guar. Notes
6.50% due 01/15/2024........................ 125,000 130,625
T-Mobile USA, Inc.
Company Guar. Notes
6.63% due 11/15/2020........................ 645,000 674,025
T-Mobile USA, Inc.
Company Guar. Notes
6.73% due 04/28/2022........................ 955,000 1,005,137
----------
4,483,862
----------
CHEMICALS-PLASTICS -- 0.1%
Hexion US Finance Corp.
Senior Sec. Notes
6.63% due 04/15/2020........................ 230,000 210,450
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
-------------------------------------------------------------------------
CHEMICALS-SPECIALTY -- 0.1%
Tronox Finance LLC
Company Guar. Notes
6.38% due 08/15/2020............................. $ 250,000 $ 244,375
----------
COMMERCIAL SERVICES -- 0.3%
ServiceMaster Co.
Company Guar. Notes
7.00% due 08/15/2020............................. 536,000 569,500
----------
COMMERCIAL SERVICES-FINANCE -- 0.3%
Interactive Data Corp.
Company Guar. Notes
5.88% due 04/15/2019*............................ 640,000 646,400
----------
COMPUTER SERVICES -- 0.3%
SunGard Data Systems, Inc.
Company Guar. Notes
6.63% due 11/01/2019............................. 515,000 530,450
----------
COMPUTERS-INTEGRATED SYSTEMS -- 0.2%
Project Homestake Merger Corp.
Company Guar. Notes
8.88% due 03/01/2023*............................ 440,000 441,100
----------
DATA PROCESSING/MANAGEMENT -- 0.9%
First Data Corp.
Sec. Notes
8.25% due 01/15/2021*............................ 1,189,000 1,272,230
First Data Corp.
Company Guar. Notes
11.75% due 08/15/2021............................ 330,000 381,562
----------
1,653,792
----------
DIAGNOSTIC KITS -- 0.3%
Alere, Inc.
Company Guar. Notes
6.50% due 06/15/2020............................. 600,000 619,500
----------
DISTRIBUTION/WHOLESALE -- 0.5%
American Builders & Contractors Supply Co., Inc.
Senior Notes
5.63% due 04/15/2021*............................ 115,000 116,438
HD Supply, Inc.
Senior Sec. Notes
5.25% due 12/15/2021*............................ 705,000 726,150
----------
842,588
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.4%
JM Huber Corp.
Senior Notes
9.88% due 11/01/2019*............................ 675,000 729,844
----------
DIVERSIFIED OPERATIONS -- 0.4%
Bombardier, Inc.
Senior Notes
4.75% due 04/15/2019*............................ 735,000 720,300
----------
E-COMMERCE/SERVICES -- 0.2%
Netflix, Inc.
Senior Notes
5.50% due 02/15/2022*............................ 350,000 357,875
----------
52
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
---------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
ELECTRIC-INTEGRATED -- 0.1%
Texas Competitive Electric Holdings Co. LLC/
TCEH Finance, Inc.
Senior Sec. Notes
11.50% due 10/01/2020*+(3)(4)................ $ 295,000 $ 184,375
----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.6%
Freescale Semiconductor, Inc.
Senior Sec. Notes
6.00% due 01/15/2022*........................ 1,065,000 1,159,519
----------
ENERGY-ALTERNATE SOURCES -- 0.2%
TerraForm Power Operating LLC
Company Guar. Notes
5.88% due 02/01/2023*........................ 380,000 394,250
----------
FINANCE-AUTO LOANS -- 1.2%
Ally Financial, Inc.
Senior Notes
3.25% due 02/13/2018......................... 185,000 183,150
Ally Financial, Inc.
Senior Notes
4.13% due 03/30/2020......................... 1,910,000 1,898,062
Ally Financial, Inc.
Senior Notes
4.13% due 02/13/2022......................... 200,000 195,000
----------
2,276,212
----------
FINANCE-CONSUMER LOANS -- 0.9%
Springleaf Finance Corp.
Senior Notes
5.25% due 12/15/2019......................... 1,210,000 1,196,387
TMX Finance LLC/TitleMax Finance Corp.
Senior Sec. Notes
8.50% due 09/15/2018*........................ 600,000 426,000
----------
1,622,387
----------
FINANCE-INVESTMENT BANKER/BROKER -- 0.3%
E*TRADE Financial Corp.
Senior Notes
5.38% due 11/15/2022......................... 530,000 559,150
----------
FINANCE-OTHER SERVICES -- 0.2%
Nationstar Mtg. LLC/Nationstar Capital Corp.
Company Guar. Notes
6.50% due 07/01/2021......................... 415,000 402,550
----------
FOOD-CATERING -- 0.6%
Aramark Services, Inc.
Company Guar. Notes
5.75% due 03/15/2020......................... 985,000 1,029,325
----------
FOOD-MISC./DIVERSIFIED -- 0.2%
Dole Food Co., Inc.
Senior Secured Notes
7.25% due 05/01/2019*........................ 450,000 456,750
----------
GAMBLING (NON-HOTEL) -- 0.3%
International Game Technology PLC
Senior Sec. Notes
5.63% due 02/15/2020......................... 405,000 395,685
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
-----------------------------------------------------------------------
GAMBLING (NON-HOTEL) (CONTINUED)
International Game Technology PLC
Senior Sec. Notes
6.25% due 02/15/2022............................ $205,000 $ 200,388
----------
596,073
----------
GAS-DISTRIBUTION -- 0.2%
NGL Energy Partners LP/NGL Energy Finance Corp.
Company Guar. Notes
5.13% due 07/15/2019............................ 385,000 377,300
----------
HOME DECORATION PRODUCTS -- 0.1%
RSI Home Products, Inc.
Sec. Notes
6.50% due 03/15/2023*........................... 225,000 228,938
----------
INDEPENDENT POWER PRODUCERS -- 0.3%
Dynegy Finance I, Inc./Dynegy Finance II, Inc.
Senior Sec. Notes
7.38% due 11/01/2022*........................... 190,000 199,737
Dynegy Finance I, Inc./Dynegy Finance II, Inc.
Senior Sec. Notes
7.63% due 11/01/2024*........................... 115,000 120,463
Dynegy, Inc.
Company Guar. Notes
5.88% due 06/01/2023............................ 195,000 189,638
----------
509,838
----------
INSURANCE-MULTI-LINE -- 0.3%
Genworth Holdings, Inc.
Company Guar. Notes
4.90% due 08/15/2023............................ 605,000 517,275
----------
INTERNET CONNECTIVITY SERVICES -- 0.1%
Zayo Group LLC/Zayo Capital, Inc.
Senior Sec. Notes
8.13% due 01/01/2020............................ 121,000 127,958
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
10.13% due 07/01/2020........................... 62,000 70,215
----------
198,173
----------
MACHINERY-CONSTRUCTION & MINING -- 0.1%
Oshkosh Corp.
Company Guar. Notes
5.38% due 03/01/2025*........................... 230,000 236,900
----------
MEDICAL LABS & TESTING SERVICES -- 0.1%
inVentiv Health, Inc.
Senior Sec. Notes
9.00% due 01/15/2018*........................... 165,000 173,250
----------
MEDICAL PRODUCTS -- 0.6%
Biomet, Inc.
Company Guar. Notes
6.50% due 08/01/2020............................ 275,000 291,500
Biomet, Inc.
Company Guar. Notes
6.50% due 10/01/2020............................ 745,000 782,250
----------
1,073,750
----------
53
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
---------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
MEDICAL-DRUGS -- 2.0%
Endo Finance LLC & Endo Finco, Inc.
Company Guar. Notes
5.38% due 01/15/2023*................. $ 460,000 $ 458,850
Pinnacle Merger Sub, Inc.
Senior Notes
9.50% due 10/01/2023*................. 421,000 467,310
Salix Pharmaceuticals, Ltd.
Company Guar. Notes
6.00% due 01/15/2021*................. 865,000 959,069
Valeant Pharmaceuticals International
Senior Notes
6.13% due 04/15/2025*................. 215,000 222,525
Valeant Pharmaceuticals International
Company Guar. Notes
7.25% due 07/15/2022*................. 725,000 766,687
VRX Escrow Corp.
Senior Notes
5.38% due 03/15/2020*................. 415,000 418,631
VRX Escrow Corp.
Senior Notes
5.88% due 05/15/2023*................. 440,000 451,000
----------
3,744,072
----------
MEDICAL-HMO -- 0.7%
Centene Corp.
Senior Notes
4.75% due 05/15/2022.................. 600,000 622,500
MPH Acquisition Holdings LLC
Company Guar. Notes
6.63% due 04/01/2022*................. 395,000 409,319
WellCare Health Plans, Inc.
Senior Notes
5.75% due 11/15/2020.................. 270,000 283,500
----------
1,315,319
----------
MEDICAL-HOSPITALS -- 4.0%
CHS/Community Health Systems, Inc.
Senior Sec. Notes
5.13% due 08/15/2018.................. 405,000 417,656
CHS/Community Health Systems, Inc.
Company Guar. Notes
6.88% due 02/01/2022.................. 1,865,000 1,993,219
HCA, Inc.
Company Guar. Notes
5.38% due 02/01/2025.................. 260,000 272,675
HCA, Inc.
Senior Sec. Notes
6.50% due 02/15/2020.................. 2,030,000 2,285,780
Tenet Healthcare Corp.
Senior Notes
5.00% due 03/01/2019*................. 760,000 754,300
Tenet Healthcare Corp.
Senior Sec. Notes
6.00% due 10/01/2020.................. 750,000 795,000
Tenet Healthcare Corp.
Senior Notes
8.13% due 04/01/2022.................. 775,000 854,437
----------
7,373,067
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
-----------------------------------------------------------------------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.4%
Amsurg Corp.
Company Guar. Notes
5.63% due 07/15/2022............................ $695,000 $ 710,638
----------
MRI/MEDICAL DIAGNOSTIC IMAGING -- 0.4%
Surgical Care Affiliates, Inc.
Company Guar. Notes
6.00% due 04/01/2023*........................... 734,000 739,505
----------
OFFICE AUTOMATION & EQUIPMENT -- 0.2%
CDW LLC/CDW Finance Corp.
Company Guar. Notes
6.00% due 08/15/2022............................ 410,000 440,115
----------
OIL & GAS DRILLING -- 0.2%
Helmerich & Payne International Drilling Co.
Company Guar. Notes
4.65% due 03/15/2025*........................... 375,000 388,355
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 4.0%
Antero Resources Corp.
Company Guar. Notes
5.38% due 11/01/2021............................ 130,000 126,100
Antero Resources Corp.
Company Guar. Notes
5.63% due 06/01/2023*........................... 190,000 188,100
Antero Resources Corp.
Company Guar. Notes
6.00% due 12/01/2020............................ 350,000 350,175
Blue Racer Midstream LLC/Blue Racer
Finance Corp.
Company Guar. Notes
6.13% due 11/15/2022*........................... 285,000 292,838
Bonanza Creek Energy, Inc.
Company Guar. Notes
6.75% due 04/15/2021............................ 425,000 413,313
California Resources Corp.
Company Guar. Notes
5.00% due 01/15/2020*........................... 270,000 243,675
Carrizo Oil & Gas, Inc.
Company Guar. Notes
7.50% due 09/15/2020............................ 445,000 457,237
Chesapeake Energy Corp.
Company Guar. Notes
6.63% due 08/15/2020............................ 575,000 593,687
Diamondback Energy, Inc.
Company Guar. Notes
7.63% due 10/01/2021............................ 570,000 599,925
Endeavor Energy Resources LP/EER Finance, Inc.
Senior Notes
7.00% due 08/15/2021*........................... 55,000 53,075
EP Energy LLC/Everest Acquisition Finance, Inc.
Company Guar. Notes
9.38% due 05/01/2020............................ 964,000 1,009,790
Gulfport Energy Corp.
Company Guar. Notes
7.75% due 11/01/2020............................ 345,000 353,625
Halcon Resources Corp.
Company Guar. Notes
8.88% due 05/15/2021............................ 650,000 451,750
54
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
---------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
OIL COMPANIES-EXPLORATION & PRODUCTION (CONTINUED)
Laredo Petroleum, Inc.
Company Guar. Notes
6.25% due 03/15/2023......................... $180,000 $ 179,550
Newfield Exploration Co.
Senior Notes
5.38% due 01/01/2026......................... 635,000 641,429
Range Resources Corp.
Company Guar. Notes
6.75% due 08/01/2020......................... 20,000 20,750
Rosetta Resources, Inc.
Company Guar. Notes
5.63% due 05/01/2021......................... 365,000 343,100
Rosetta Resources, Inc.
Company Guar. Notes
5.88% due 06/01/2022......................... 430,000 405,275
SM Energy Co.
Senior Notes
6.13% due 11/15/2022*........................ 405,000 402,975
WPX Energy, Inc.
Senior Notes
5.25% due 09/15/2024......................... 270,000 237,465
WPX Energy, Inc.
Senior Notes
6.00% due 01/15/2022......................... 91,000 84,630
----------
7,448,464
----------
OIL REFINING & MARKETING -- 0.2%
Sunoco LP/Sunoco Finance Corp.
Company Guar. Notes
6.38% due 04/01/2023*........................ 380,000 391,400
----------
PAPER & RELATED PRODUCTS -- 0.5%
Cascades, Inc.
Senior Notes
5.50% due 07/15/2022*........................ 675,000 685,125
Mercer International, Inc.
Company Guar.
Notes 7.00% due 12/01/2019................... 230,000 238,050
----------
923,175
----------
PHYSICAL THERAPY/REHABILITATION CENTERS -- 0.4%
HealthSouth Corp.
Company Guar. Notes
5.75% due 11/01/2024......................... 650,000 676,000
----------
PHYSICIANS PRACTICE MANAGEMENT -- 0.3%
Envision Healthcare Corp.
Company Guar. Notes
5.13% due 07/01/2022*........................ 480,000 490,800
----------
PIPELINES -- 1.6%
Crestwood Midstream Partners LP/Crestwood
Midstream Finance Corp.
Company Guar. Notes
6.25% due 04/01/2023*........................ 750,000 757,500
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020......................... 571,000 639,520
Kinder Morgan, Inc.
Company Guar. Notes
6.50% due 09/15/2020......................... 430,000 497,794
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
--------------------------------------------------------------------
PIPELINES (CONTINUED)
Kinder Morgan, Inc.
Company Guar. Notes
7.00% due 06/15/2017........................ $ 180,000 $ 198,547
MarkWest Energy Partners LP/MarkWest Energy
Finance Corp.
Company Guar. Notes
4.88% due 12/01/2024........................ 575,000 587,880
Sabine Pass Liquefaction LLC
Senior Sec. Notes
6.25% due 03/15/2022........................ 200,000 206,750
----------
2,887,991
----------
PRINTING-COMMERCIAL -- 0.4%
Quad/Graphics, Inc.
Company Guar. Notes
7.00% due 05/01/2022*....................... 835,000 803,688
----------
PUBLISHING-NEWSPAPERS -- 0.8%
Gannett Co., Inc.
Company Guar. Notes
4.88% due 09/15/2021*....................... 325,000 331,500
Gannett Co., Inc.
Company Guar. Notes
5.13% due 10/15/2019........................ 990,000 1,037,025
Gannett Co., Inc.
Company Guar. Notes
5.50% due 09/15/2024*....................... 60,000 62,775
----------
1,431,300
----------
RACETRACKS -- 0.7%
GLP Capital LP/GLP Financing II, Inc.
Company Guar. Notes
4.88% due 11/01/2020........................ 610,000 625,250
Penn National Gaming, Inc.
Senior Notes
5.88% due 11/01/2021........................ 660,000 655,050
----------
1,280,300
----------
REAL ESTATE INVESTMENT TRUSTS -- 0.5%
iStar Financial, Inc.
Senior Notes
5.00% due 07/01/2019........................ 1,000,000 1,000,000
----------
RENTAL AUTO/EQUIPMENT -- 0.5%
Ahern Rentals, Inc.
Secured Notes
9.50% due 06/15/2018*....................... 400,000 423,500
Hertz Corp.
Company Guar. Notes
6.25% due 10/15/2022........................ 445,000 459,462
----------
882,962
----------
RETAIL-ARTS & CRAFTS -- 0.2%
Michaels Stores, Inc.
Company Guar. Notes
5.88% due 12/15/2020*....................... 405,000 416,138
----------
RETAIL-DISCOUNT -- 0.3%
Family Tree Escrow LLC
Senior Notes
5.25% due 03/01/2020*....................... 195,000 204,263
55
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
--------------------------------------------------------------------
U.S. CORPORATE BONDS & NOTES (CONTINUED)
RETAIL-DISCOUNT (CONTINUED)
Family Tree Escrow LLC
Senior Notes
5.75% due 03/01/2023*.......................... $385,000 $405,212
--------
609,475
--------
RETAIL-DRUG STORE -- 0.5%
Rite Aid Corp.
Company Guar. Notes
6.13% due 04/01/2023*.......................... 130,000 133,250
Rite Aid Corp.
Company Guar. Notes
6.75% due 06/15/2021........................... 730,000 776,537
--------
909,787
--------
RETAIL-LEISURE PRODUCTS -- 0.5%
Party City Holdings, Inc.
Company Guar. Notes
8.88% due 08/01/2020........................... 210,000 226,275
PC Nextco Holdings LLC/PC Nextco Finance, Inc.
Senior Notes
8.75% due 08/15/2019(5)........................ 640,000 651,200
--------
877,475
--------
RETAIL-PAWN SHOPS -- 0.2%
First Cash Financial Services, Inc.
Company Guar. Notes
6.75% due 04/01/2021........................... 365,000 375,950
--------
RETAIL-PROPANE DISTRIBUTION -- 0.2%
AmeriGas Finance LLC/AmeriGas Finance Corp.
Company Guar. Notes
6.75% due 05/20/2020........................... 120,000 126,300
AmeriGas Finance LLC/AmeriGas Finance Corp.
Company Guar. Notes
7.00% due 05/20/2022........................... 145,000 155,513
--------
281,813
--------
RETAIL-RESTAURANTS -- 0.4%
Landry's, Inc.
Senior Notes
9.38% due 05/01/2020*.......................... 700,000 750,750
--------
RUBBER/PLASTIC PRODUCTS -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007+(1)(2)(6)(7)............. 550,000 0
--------
SATELLITE TELECOM -- 0.3%
DigitalGlobe, Inc.
Company Guar. Notes
5.25% due 02/01/2021*.......................... 490,000 490,000
--------
SECURITY SERVICES -- 0.4%
ADT Corp.
Senior Notes
6.25% due 10/15/2021........................... 745,000 793,425
--------
SEMICONDUCTOR EQUIPMENT -- 0.3%
Entegris, Inc.
Company Guar. Notes
6.00% due 04/01/2022*.......................... 580,000 604,650
--------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
---------------------------------------------------------------
SHIPBUILDING -- 0.1%
Huntington Ingalls Industries, Inc.
Company Guar. Notes
5.00% due 12/15/2021*................ $ 210,000 $ 218,925
-----------
SPECIFIED PURPOSE ACQUISITIONS -- 0.6%
Argos Merger Sub, Inc.
Senior Notes
7.13% due 03/15/2023*................ 1,135,000 1,176,144
-----------
STEEL-PRODUCERS -- 0.7%
AK Steel Corp.
Company Guar. Notes
7.63% due 05/15/2020................. 725,000 623,500
United States Steel Corp.
Senior Notes
7.38% due 04/01/2020................. 681,000 691,419
-----------
1,314,919
-----------
TELECOM SERVICES -- 0.2%
West Corp.
Company Guar. Notes
5.38% due 07/15/2022*................ 350,000 342,125
-----------
TELEPHONE-INTEGRATED -- 1.8%
Frontier Communications Corp.
Senior Notes
6.25% due 09/15/2021................. 945,000 947,362
Level 3 Financing, Inc.
Company Guar. Notes
6.13% due 01/15/2021................. 330,000 346,087
Level 3 Financing, Inc.
Company Guar. Notes
7.00% due 06/01/2020................. 149,000 159,058
Level 3 Financing, Inc.
Company Guar. Notes
8.63% due 07/15/2020................. 945,000 1,024,144
Windstream Corp.
Company Guar. Notes
7.75% due 10/15/2020................. 805,000 824,119
-----------
3,300,770
-----------
TELEVISION -- 0.4%
Univision Communications, Inc.
Senior Sec. Notes
5.13% due 05/15/2023*................ 765,000 776,475
-----------
THEATERS -- 0.3%
AMC Entertainment, Inc.
Company Guar. Notes
9.75% due 12/01/2020................. 520,000 569,400
-----------
TOTAL U.S. CORPORATE BONDS & NOTES
(cost $89,187,742)................... 89,327,419
-----------
FOREIGN CORPORATE BONDS & NOTES -- 6.4%
AIRLINES -- 0.3%
Air Canada
Senior Sec. Notes
6.75% due 10/01/2019*................ 500,000 533,750
-----------
AUTO-CARS/LIGHT TRUCKS -- 0.2%
Jaguar Land Rover Automotive PLC
Company Guar. Notes
4.25% due 11/15/2019*................ 380,000 390,450
-----------
56
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
--------------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
BUILDING PRODUCTS-CEMENT -- 0.3%
Cemex SAB de CV
Senior Sec. Notes
5.70% due 01/11/2025*....................... $ 510,000 $ 503,115
----------
BUILDING PRODUCTS-DOORS & WINDOWS -- 0.1%
Masonite International Corp.
Company Guar. Notes
5.63% due 03/15/2023*....................... 200,000 205,000
----------
CELLULAR TELECOM -- 0.2%
Digicel Group, Ltd.
Senior Notes
8.25% due 09/30/2020*....................... 380,000 380,570
----------
CHEMICALS-DIVERSIFIED -- 0.9%
INEOS Group Holdings SA
Sec. Notes
5.88% due 02/15/2019*....................... 450,000 444,937
INEOS Group Holdings SA
Sec. Notes
6.13% due 08/15/2018*....................... 1,305,000 1,311,525
----------
1,756,462
----------
CONTAINERS-METAL/GLASS -- 0.4%
Ardagh Finance Holdings SA
Senior Notes
8.63% due 06/15/2019*(5)(8)................. 292,276 304,517
Ardagh Packaging Finance PLC
Company Guar. Notes
6.00% due 06/30/2021*....................... 365,000 358,612
Ardagh Packaging Finance PLC/Ardagh
Holdings USA, Inc.
Senior Notes
7.00% due 11/15/2020*....................... 51,176 51,240
----------
714,369
----------
CRUISE LINES -- 0.0%
NCL Corp. Ltd.
Senior Notes
5.25% due 11/15/2019*....................... 55,000 56,375
----------
ENGINEERING/R&D SERVICES -- 0.2%
Abengoa Finance SAU
Company Guar. Notes
7.75% due 02/01/2020*....................... 395,000 379,200
----------
FINANCE-LEASING COMPANIES -- 0.5%
Aircastle, Ltd.
Senior Notes
5.13% due 03/15/2021........................ 840,000 877,800
----------
INDEPENDENT POWER PRODUCERS -- 0.2%
Abengoa Yield PLC
Company Guar. Notes
7.00% due 11/15/2019*....................... 295,000 303,850
----------
MEDICAL-DRUGS -- 0.1%
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
5.50% due 03/01/2023*....................... 235,000 236,763
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
------------------------------------------------------------------------
METAL-DIVERSIFIED -- 0.2%
Vedanta Resources PLC
Senior Notes
6.00% due 01/31/2019*........................... $ 425,000 $ 378,671
----------
OIL & GAS DRILLING -- 0.0%
Ensco PLC
Senior Notes
5.20% due 03/15/2025............................ 83,000 83,129
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.5%
Harvest Operations Corp.
Company Guar. Notes
6.88% due 10/01/2017............................ 520,000 473,200
MEG Energy Corp.
Company Guar. Notes
7.00% due 03/31/2024*........................... 425,000 400,563
----------
873,763
----------
RENTAL AUTO/EQUIPMENT -- 0.2%
United Rentals North America, Inc.
Company Guar. Notes
5.50% due 07/15/2025............................ 465,000 473,719
----------
SATELLITE TELECOM -- 0.5%
Intelsat Jackson Holdings SA
Company Guar. Notes
5.50% due 08/01/2023............................ 240,000 226,500
Intelsat Jackson Holdings SA
Company Guar. Notes
7.25% due 04/01/2019............................ 695,000 720,368
----------
946,868
----------
SPECIAL PURPOSE ENTITY -- 0.0%
Hellas Telecommunications Luxembourg II SCA FRS
Sub. Notes
8.46% due 01/15/2015*+(1)(2)(6)(9).............. 1,025,000 0
----------
TELECOM SERVICES -- 1.3%
Altice Financing SA
Senior Sec. Notes
6.63% due 02/15/2023*........................... 400,000 412,000
Altice Financing SA
Senior Sec. Notes
7.88% due 12/15/2019*........................... 350,000 371,000
Altice Finco SA
Senior Sec. Notes
9.88% due 12/15/2020*........................... 455,000 503,912
Altice SA
Company Guar. Notes
7.63% due 02/15/2025*........................... 390,000 390,731
Digicel, Ltd.
Company Guar. Notes
6.75% due 03/01/2023*........................... 250,000 242,188
UPCB Finance VI, Ltd.
Senior Sec. Notes
6.88% due 01/15/2022*........................... 400,000 427,000
----------
2,346,831
----------
57
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
---------------------------------------------------------------
FOREIGN CORPORATE BONDS & NOTES (CONTINUED)
TELEPHONE-INTEGRATED -- 0.3%
Softbank Corp.
Company Guar. Notes
4.50% due 04/15/2020*................. $ 545,000 $ 556,581
-----------
TOTAL FOREIGN CORPORATE BONDS & NOTES
(cost $13,024,050).................... 11,997,266
-----------
LOANS(10)(11)(15) -- 41.6%
ADVERTISING SALES -- 0.6%
Advantage Sales & Marketing, Inc. FRS
1st Lien
4.25% due 07/25/2021.................. 527,350 526,597
Advantage Sales & Marketing, Inc. FRS
2nd Lien
7.50% due 07/25/2022.................. 515,000 514,871
-----------
1,041,468
-----------
AEROSPACE/DEFENSE-EQUIPMENT -- 0.8%
TransDigm, Inc. FRS
BTL-D
8.50% due 06/02/2021.................. 1,492,481 1,489,060
-----------
AIRLINES -- 1.7%
American Airlines, Inc. FRS
BTL
3.75% due 06/27/2019.................. 1,120,630 1,119,629
American Airlines, Inc. FRS
BTL-B
4.25% due 10/12/2021.................. 484,000 487,126
LM US Member LLC FRS
1st Lien
4.75% due 10/25/2019.................. 623,603 624,188
LM US Member LLC FRS
BTL
4.75% due 10/25/2019.................. 24,750 24,773
LM US Member LLC FRS
2nd Lien
4.75% due 01/25/2021.................. 250,000 246,250
United Airlines, Inc. FRS
BTL-B1
3.25% due 09/15/2021.................. 646,750 644,729
-----------
3,146,695
-----------
APPLICATIONS SOFTWARE -- 1.2%
Applied Systems, Inc. FRS
2nd Lien
7.50% due 01/22/2022.................. 885,000 880,796
Deltek, Inc. FRS
2nd Lien
3.25% due 10/10/2019.................. 95,000 95,713
Mitchell International, Inc. FRS
2nd Lien
4.25% due 10/11/2021.................. 320,000 316,720
Mitchell International, Inc. FRS
BTL
4.50% due 10/12/2020.................. 885,449 885,228
-----------
2,178,457
-----------
AUTO-CARS/LIGHT TRUCKS -- 0.9%
FCA US LLC FRS
BTL-B
3.25% due 12/31/2018.................. 1,595,970 1,592,312
-----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
--------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.8%
Cooper-Standard Automotive, Inc. FRS
BTL
3.25% due 04/04/2021................. $ 797,990 $ 795,596
Federal-Mogul Holdings Corp. FRS
BTL-C
4.75% due 04/15/2021................. 548,622 546,701
MPG Holdco I, Inc. FRS
BTL-B
4.25% due 10/20/2021................. 167,056 167,682
----------
1,509,979
----------
AUTO/TRUCK PARTS & EQUIPMENT-REPLACEMENT -- 0.1%
Allison Transmission, Inc. FRS
BTL-B3
3.50% due 08/23/2019................. 155,000 154,876
----------
BEVERAGES-NON-ALCOHOLIC -- 0.0%
Le-Natures, Inc. FRS
Escrow Loans
9.36% due 03/01/2011+(1)(2).......... 1,200,000 0
----------
BICYCLE MANUFACTURING -- 0.4%
SRAM LLC FRS
1st Lien
4.00% due 04/10/2020................. 735,461 733,622
----------
BLOODSTOCK SERVICES -- 0.0%
NVA Holdings, Inc. FRS
1st Lien
4.75% due 08/14/2021................. 27,930 27,930
----------
BROADCAST SERVICES/PROGRAM -- 1.0%
iHeartCommunications, Inc. FRS
BTL-D
3.25% due 01/30/2019................. 2,060,000 1,956,485
----------
BUILDING & CONSTRUCTION-MISC. -- 0.2%
Brock Holdings III, Inc. FRS
1st Lien
4.00% due 03/16/2017................. 313,271 308,050
----------
BUILDING PRODUCTS-CEMENT -- 0.6%
Headwaters Inc. FRS
BTL-B
4.00% due 03/11/2022................. 590,000 592,212
Quikrete Holdings, Inc. FRS
1st Lien
6.75% due 09/26/2020................. 600,000 599,000
----------
1,191,212
----------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.0%
TOUSA, Inc. FRS
Escrow Loans
12.25% due 08/15/2013+(1)(2)......... 2,037,810 0
----------
CABLE/SATELLITE TV -- 0.2%
Ziggo NV FRS
BTL-B2
2.75% due 01/15/2022................. 95,319 94,634
Ziggo NV FRS
BTL-B3
2.75% due 01/15/2022................. 156,766 155,639
58
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
----------------------------------------------------------
LOANS (CONTINUED)
CABLE/SATELLITE TV (CONTINUED)
Ziggo NV FRS
BTL-B1
3.50% due 01/15/2022.............. $ 147,915 $ 146,852
----------
397,125
----------
CASINO HOTELS -- 2.2%
Boyd Gaming Corp. FRS
BTL-B
4.00% due 08/14/2020.............. 628,314 628,609
CityCenter Holdings LLC FRS
BTL-B
3.25% due 10/16/2020.............. 650,000 652,166
Golden Nugget, Inc. FRS
Delayed Draw
4.00% due 11/21/2019.............. 139,220 139,916
Golden Nugget, Inc. FRS
BTL
4.00% due 11/21/2019.............. 324,846 326,470
MGM Resorts International FRS
BTL-B
3.50% due 12/20/2019.............. 897,704 894,712
Peppermill Casinos, Inc. FRS
BTL-B
6.75% due 11/09/2018.............. 792,958 792,958
Station Casinos LLC FRS
BTL-B
4.25% due 03/02/2020.............. 603,474 604,659
----------
4,039,490
----------
CHEMICALS-DIVERSIFIED -- 0.2%
Ineos US Finance LLC FRS
BTL
4.25% due 03/31/2022.............. 365,000 364,924
----------
COAL -- 0.2%
Arch Coal, Inc. FRS
BTL-B
6.25% due 05/16/2018.............. 520,308 401,287
----------
COMMERCIAL SERVICES -- 1.1%
Brickman Group, Ltd. FRS
1st Lien
4.00% due 12/18/2020.............. 771,720 766,681
Brickman Group, Ltd. FRS
2nd Lien
5.00% due 12/18/2021.............. 515,000 515,644
ServiceMaster Co. LLC FRS
BTL-B
4.25% due 07/01/2021.............. 723,371 723,823
----------
2,006,148
----------
COMMERCIAL SERVICES-FINANCE -- 0.8%
Harland Clarke Holdings Corp. FRS
BTL-B4
3.25% due 08/04/2019.............. 315,924 316,450
TransUnion LLC FRS
BTL
8.50% due 04/09/2021.............. 1,195,599 1,195,101
----------
1,511,551
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
-------------------------------------------------------------
COMPUTER SERVICES -- 0.6%
DynCorp International, Inc. FRS
BTL
6.25% due 07/07/2016................. $ 560,000 $ 555,100
Presidio, Inc. FRS
BTL-B
6.75% due 04/16/2022................. 640,000 635,200
----------
1,190,300
----------
COMPUTERS-INTEGRATED SYSTEMS -- 1.3%
Kronos, Inc. FRS
1st Lien
9.75% due 10/30/2019................. 1,363,831 1,365,253
Kronos, Inc. FRS
2nd Lien
9.75% due 04/30/2020................. 564,557 577,965
Riverbed Technology, Inc. FRS
BTL-B
4.00% due 02/19/2022................. 507,000 510,984
----------
2,454,202
----------
COMPUTERS-PERIPHERY EQUIPMENT -- 0.6%
CDW LLC FRS
BTL-B
4.00% due 04/29/2020................. 1,145,809 1,134,192
----------
CONSUMER PRODUCTS-MISC. -- 0.6%
Reynolds Group Holdings, Inc. FRS
BTL
4.50% due 12/01/2018................. 1,166,660 1,170,409
----------
CONTAINERS-METAL/GLASS -- 0.4%
Berlin Packaging LLC FRS
1st Lien
6.75% due 10/01/2021................. 548,622 549,307
Crown Americas LLC FRS
BTL-B
3.25% due 10/22/2021................. 212,468 214,294
----------
763,601
----------
CONTAINERS-PAPER/PLASTIC -- 0.6%
Berry Plastics Group, Inc. FRS
BTL-D
4.25% due 02/08/2020................. 1,208,832 1,204,753
----------
DATA PROCESSING/MANAGEMENT -- 1.0%
First Data Corp. FRS
2nd Lien
3.67% due 03/24/2017................. 750,000 749,219
First Data Corp. FRS
BTL
3.67% due 03/24/2018................. 1,070,000 1,068,885
----------
1,818,104
----------
DIAGNOSTIC EQUIPMENT -- 0.3%
Ortho-Clinical Diagnostics, Inc. FRS
BTL-B
4.25% due 06/30/2021................. 547,243 541,685
----------
DIALYSIS CENTERS -- 1.1%
DaVita HealthCare Partners, Inc. FRS
BTL-B
3.25% due 06/24/2021................. 1,492,481 1,494,879
59
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
-----------------------------------------------------------------------------
LOANS (CONTINUED)
DIALYSIS CENTERS (CONTINUED)
US Renal Care, Inc. FRS
BTL-B2, 1st Lien.
4.25% due 07/03/2019................................. $ 497,475 $ 497,786
----------
1,992,665
----------
DISTRIBUTION/WHOLESALE -- 1.1%
American Builders & Contractors Supply Co., Inc. FRS
BTL-B
3.50% due 04/16/2020................................. 1,105,805 1,101,196
Spin Holdco, Inc. FRS
1st Lien
4.25% due 11/14/2019................................. 997,500 991,266
----------
2,092,462
----------
DIVERSIFIED MINERALS -- 0.5%
FMG Resources August 2006 Pty, Ltd. FRS
BTL-B
2.75% due 06/30/2019................................. 1,120,641 1,012,178
----------
EDUCATIONAL SOFTWARE -- 0.2%
Evergreen Skills Lux Sarl FRS
1st Lien
4.25% due 04/28/2021................................. 448,872 442,812
----------
ELECTRIC-INTEGRATED -- 0.4%
Texas Competitive Electric Holdings Co. LLC FRS
BTL
4.67% due 10/10/2017+(3)(4).......................... 1,372,835 820,514
----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.6%
Avago Technologies Cayman, Ltd. FRS
BTL-B
4.00% due 05/06/2021................................. 650,892 651,869
Freescale Semiconductor, Inc. FRS
BTL-B5
5.00% due 01/15/2021................................. 428,475 430,464
----------
1,082,333
----------
ENERGY-ALTERNATE SOURCES -- 0.4%
Granite Acquisition, Inc. FRS
BTL-B
5.00% due 10/15/2021................................. 742,392 749,816
Granite Acquisition, Inc. FRS
BTL-C
6.00% due 10/15/2021................................. 32,747 33,075
----------
782,891
----------
FINANCE-MORTGAGE LOAN/BANKER -- 0.3%
Walter Investment Management Corp. FRS
BTL-B
4.00% due 12/19/2020................................. 641,751 588,004
----------
FOOD-BAKING -- 0.3%
Old HB, Inc. FRS
BTL-B
6.75% due 04/09/2020................................. 547,236 556,813
----------
FOOD-CATERING -- 0.5%
Aramark Services, Inc. FRS
BTL-F
3.25% due 02/21/2021................................. 922,670 920,594
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
------------------------------------------------------------
FOOD-MISC./DIVERSIFIED -- 2.2%
Dole Food Co., Inc. FRS
BTL-B
3.25% due 11/01/2018................ $ 472,165 $ 471,378
H.J. Heinz Co. FRS
BTL-B2
6.00% due 06/05/2020................ 2,069,866 2,069,608
Pinnacle Foods Finance LLC FRS
BTL-H
6.75% due 04/29/2020................ 1,643,682 1,635,757
----------
4,176,743
----------
FOOD-RETAIL -- 0.2%
Albertson's Holdings LLC FRS
BTL-B4
5.50% due 08/25/2021................ 357,000 359,727
----------
GAMBLING (NON-HOTEL) -- 0.4%
Mohegan Tribal Gaming Authority FRS
BTL-B
4.25% due 11/19/2019................ 658,333 653,890
----------
HOTELS/MOTELS -- 1.6%
Hilton Worldwide Finance LLC FRS
BTL
3.50% due 10/26/2020................ 2,901,173 2,903,764
----------
HUMAN RESOURCES -- 0.6%
Ceridian HCM Holding, Inc. FRS
BTL
3.43% due 09/15/2020................ 748,125 738,774
CHG Buyer Corp. FRS
2nd Lien
4.00% due 11/19/2020................ 384,117 384,837
----------
1,123,611
----------
INDEPENDENT POWER PRODUCERS -- 0.7%
Calpine Corp FRS
Delayed Draw
3.43% due 10/30/2020................ 1,272,731 1,273,526
----------
INSURANCE-PROPERTY/CASUALTY -- 0.5%
Asurion LLC FRS
BTL-B2
4.25% due 07/08/2020................ 783,389 780,451
Asurion LLC FRS
BTL-B1
5.00% due 05/24/2019................ 176,378 176,851
----------
957,302
----------
INTERNET FINANCIAL SERVICES -- 0.2%
US LLC 2 FRS
BTL
4.25% due 07/16/2021................ 393,025 391,387
----------
INTERNET SECURITY -- 0.4%
Blue Coat Systems, Inc. FRS
BTL
4.25% due 05/31/2019................ 447,728 447,355
Blue Coat Systems, Inc. FRS
2nd Lien
9.50% due 06/28/2020................ 350,000 357,875
----------
805,230
----------
60
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
------------------------------------------------------------------
LOANS (CONTINUED)
INVESTMENT MANAGEMENT/ADVISOR SERVICES -- 0.3%
National Financial Partners Corp. FRS
BTL
4.50% due 07/01/2020........................ $ 498,747 $ 497,033
----------
LEISURE GAMES -- 0.4%
Aristocrat Leisure Pty, Ltd. FRS
BTL-B
4.00% due 10/20/2021........................ 781,538 784,050
----------
LEISURE PRODUCTS -- 0.5%
Leslie's Poolmart, Inc. FRS
Tranche B
4.75% due 10/16/2019........................ 861,478 857,170
----------
MACHINERY-ELECTRICAL -- 0.4%
Alliance Laundry Systems LLC FRS
1st Lien
4.25% due 12/10/2018........................ 687,784 688,643
----------
MACHINERY-GENERAL INDUSTRIAL -- 0.6%
RBS Global, Inc. FRS
1st Lien
4.00% due 08/21/2020........................ 1,037,429 1,037,059
----------
MEDICAL LABS & TESTING SERVICES -- 0.7%
American Renal Holdings, Inc. FRS
2nd Lien
8.50% due 03/20/2020........................ 290,000 287,825
INC Research LLC FRS
BTL
4.50% due 11/13/2021........................ 264,337 264,337
inVentiv Health, Inc. FRS
BTL-B4
7.75% due 05/05/2018........................ 590,000 591,475
Surgical Care Affiliates LLC FRS
BTL
4.25% due 03/17/2022........................ 109,000 109,000
----------
1,252,637
----------
MEDICAL-DRUGS -- 0.3%
Valeant Pharmaceuticals International FRS
Delayed Draw
4.00% due 03/10/2022........................ 281,928 283,161
Valeant Pharmaceuticals International FRS
BTL-F1
4.00% due 03/13/2022........................ 368,072 369,683
----------
652,844
----------
MEDICAL-HOSPITALS -- 0.6%
Ardent Medical Services, Inc. FRS
2nd Lien
6.25% due 01/02/2019........................ 235,000 235,441
CHS/Community Health Systems, Inc. FRS
BTL-F
3.43% due 12/31/2018........................ 287,137 287,035
RegionalCare Hospital Partners, Inc. FRS
1st Lien
6.75% due 04/23/2019........................ 651,717 652,531
----------
1,175,007
----------
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
---------------------------------------------------------------------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.5%
Amsurg Corp. FRS
BTL
3.75% due 07/16/2021........................ $ 850,080 $ 851,143
National Mentor Holdings, Inc. FRS
Tranche B
4.25% due 01/27/2021........................ 141,642 141,465
----------
992,608
----------
MULTIMEDIA -- 0.5%
TWCC Holding Corp. FRS
2nd Lien
4.25% due 06/26/2020........................ 315,000 276,413
Virgin Media Investment Holdings, Ltd. FRS
BTL-B
3.50% due 06/07/2020........................ 641,107 640,127
----------
916,540
----------
NON-HAZARDOUS WASTE DISPOSAL -- 0.2%
Waste Industries USA, Inc. FRS
BTL
4.00% due 02/20/2020........................ 446,000 447,115
----------
OIL & GAS DRILLING -- 0.4%
Drillships Financing Holding, Inc. FRS
Tranche B-1
2.75% due 03/31/2021........................ 324,177 246,699
Jonah Energy LLC FRS
2nd Lien
7.50% due 05/12/2021........................ 400,000 355,333
Paragon Offshore Finance Co. FRS
BTL-B
4.00% due 07/18/2021........................ 265,658 178,788
----------
780,820
----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.3%
Fieldwood Energy LLC FRS
2nd Lien
8.38% due 09/30/2020........................ 340,000 247,350
Templar Energy LLC FRS
2nd Lien
8.50% due 11/25/2020........................ 430,000 290,035
----------
537,385
----------
PROFESSIONAL SPORTS -- 0.4%
Delta 2 Lux Sarl FRS
BTL-B3
4.25% due 07/31/2021........................ 530,000 526,246
Delta 2 Lux Sarl FRS
2nd Lien
4.25% due 07/31/2022........................ 186,000 184,760
----------
711,006
----------
REAL ESTATE MANAGEMENT/SERVICES -- 1.3%
Capital Automotive LP FRS
2nd Lien
3.43% due 04/30/2020........................ 305,000 309,575
Realogy Group LLC FRS
BTL-B
3.75% due 03/05/2020........................ 2,026,570 2,023,023
----------
2,332,598
----------
61
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
-----------------------------------------------------------------------
LOANS (CONTINUED)
RETAIL-PET FOOD & SUPPLIES -- 0.1%
PetSmart, Inc. FRS
1st Lien
4.00% due 02/18/2022.......................... $ 224,000 $ 225,578
-----------
RUBBER/PLASTIC PRODUCTS -- 0.2%
US Farathane LLC FRS
BTL
3.75% due 01/26/2022.......................... 331,800 332,837
-----------
TELEPHONE-INTEGRATED -- 0.6%
Level 3 Financing, Inc. FRS
BTL-B
4.75% due 01/31/2022.......................... 531,000 533,370
XO Communications LLC FRS
BTL
4.00% due 03/19/2021.......................... 547,236 548,092
-----------
1,081,462
-----------
TELEVISION -- 1.9%
Tribune Media Co. FRS
BTL
8.50% due 12/27/2020.......................... 562,489 562,208
Univision Communications, Inc. FRS
BTL
4.00% due 03/01/2020.......................... 2,985,908 2,979,065
-----------
3,541,273
-----------
THEATERS -- 0.0%
Regal Cinemas Corp. FRS
BTL
3.75% due 03/25/2022.......................... 76,000 76,095
-----------
WORKERS COMP/INJURY SERVICES -- 0.8%
Sedgwick Claims Management Services, Inc. FRS
1st Lien
3.75% due 03/01/2021.......................... 1,155,399 1,140,596
Sedgwick Claims Management Services, Inc. FRS
2nd Lien
6.75% due 02/28/2022.......................... 280,000 273,000
-----------
1,413,596
-----------
TOTAL LOANS
(cost $79,200,341).............................. 77,597,719
-----------
COMMON STOCKS -- 0.0%
FOOD-MISC./DIVERSIFIED -- 0.0%
Wornick Co.+(1)(2)............................. 7,270 35,012
-----------
MULTIMEDIA -- 0.0%
Haights Cross Communication, Inc.+(1)(2)....... 19,388 0
-----------
TOTAL COMMON STOCKS
(cost $204,047)................................. 35,012
-----------
SHARES/
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 3)
----------------------------------------------------------------
MEMBERSHIP INTEREST CERTIFICATES -- 0.1%
CASINO SERVICES -- 0.1%
Herbst Gaming, Inc.+(12)
(cost $232,720)....................... 23,439 $ 199,232
------------
PREFERRED SECURITIES -- 0.6%
DIVERSIFIED BANKING INSTITUTIONS -- 0.6%
GMAC Capital Trust I FRS
Series 2
8.13%
(cost $1,191,987)..................... 46,500 1,220,625
------------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 0.1%
BANKS-SUPER REGIONAL -- 0.1%
SunTrust Banks, Inc. FRS
5.63% due 12/15/2019(13)
(cost $110,000)....................... $110,000 111,925
------------
WARRANTS -- 0.2%
TELEVISION -- 0.2%
ION Media Networks, Inc.
Expires 12/18/2016
(strike price $0.01)(1)(2)(12)........ 332 167,524
ION Media Networks, Inc.
Expires 12/18/2016
(strike price $0.01)(1)(2)(12)........ 328 165,505
------------
TOTAL WARRANTS
(cost $0)............................... 333,029
------------
TOTAL INVESTMENTS
(cost $183,538,527)(14)................. 96.9% 180,822,227
Other assets less liabilities............ 3.1 5,729,381
-------- ------------
NET ASSETS -- 100.0% $186,551,608
======== ============
--------
+ Non-income producing security
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At March 31, 2015, the
aggregate value of these securities was $41,549,888 representing 22.3% of
net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
(1) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 3.
(2) Illiquid security. At March 31, 2015, the aggregate value of these
securities was $368,041 representing 0.2% of net assets.
(3) Company has filed for Chapter 11 bankruptcy protection.
(4) Security in default of interest.
(5) PIK ("Payment-in-Kind") security -- Income may be paid in additional
securities or cash at the discretion of the issuer.
(6) Security in default of interest and principal at maturity.
(7) Company has filed for Chapter 7 bankruptcy.
(8) Security currently paying interest in the form of additional securities.
(9) Company has filed for bankruptcy protection in the country of issuance.
(10) 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.
62
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
(11) 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.
(12) 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
3. 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, 2015, the SunAmerica Flexible Credit Fund held the following
restricted securities:
VALUE % OF
ACQUISITION ACQUISITION PER NET
DESCRIPTION DATE SHARES COST VALUE SHARE ASSETS
----------- ----------- ------ ----------- -------- ------- ------
MEMBERSHIP INTEREST CERTIFICATES
Herbst
Gaming,
Inc........ 03/26/2008 23,439 $232,720 $199,232 $ 8.50 0.11%
WARRANTS
ION Media
Networks,
Inc.
Expires
12/18/2016
(strike
price
$0.01)..... 03/01/2011 332 0 167,524 504.59 0.09
ION Media
Networks,
Inc.
Expires
12/18/2016
(strike
price
$0.01)..... 11/11/2010 327 0
03/01/2011 1 0
------ --------
328 0 165,505 504.59 0.09
-------- ----
$532,261 0.29%
======== ====
(13) Perpetual maturity -- maturity date reflects the next call date.
(14) See Note 6 for cost of investments on a tax basis.
(15) All loans in the portfolio were purchased through assignment agreements
unless otherwise indicated.
BTL --Bank Term Loan
FRS --Floating Rate Security
The rates shown on FRS are the current interest rates at March 31, 2015 and
unless noted otherwise, the dates shown are original maturity dates.
63
SUNAMERICA FLEXIBLE CREDIT FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (CONTINUED)
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2015 (see Note 3):
LEVEL 1 -- UNADJUSTED LEVEL 2 -- OTHER LEVEL 3 -- SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
- --------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
----------------------
Convertible Bonds & Notes............... $ -- $ -- $ 0 $ 0
U.S. Corporate Bonds & Notes:
Rubber/Plastic Products............... -- -- 0 0
Other Industries...................... -- 89,327,419 -- 89,327,419
Foreign Corporate Bonds & Notes:
Special Purpose Entity................ -- -- 0 0
Other Industries...................... -- 11,997,266 -- 11,997,266
Loans:
Beverages-Non-alcoholic............... -- -- 0 0
Building-Residential/Commercial....... -- -- 0 0
Other Industries...................... -- 77,597,719 -- 77,597,719
Common Stocks........................... -- -- 35,012 35,012
Membership Interest Certificates........ -- 199,232 -- 199,232
Preferred Securities.................... 1,220,625 -- -- 1,220,625
Preferred Securities/Capital Securities. -- 111,925 -- 111,925
Warrants................................ -- -- 333,029 333,029
---------- ------------ -------- ------------
TOTAL INVESTMENTS AT VALUE.............. $1,220,625 $179,233,561 $368,041 $180,822,227
========== ============ ======== ============
--------
* For a detailed presentation of investments, 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 transfers between Levels during the reporting
period.
At the beginning and end of the reporting period, Level 3 investments were not
considered a material portion of the Fund.
See Notes to Financial Statements
64
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015
Note 1. Organization
The SunAmerica Income Funds (the "Trust") is a diversified open-end
management investment company organized as a Massachusetts business trust.
The Trust currently consists of three 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, LLC (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 Strategic Bond Fund ("Strategic Bond Fund"), and
SunAmerica Flexible Credit Fund ("Flexible Credit Fund") (formerly High
Yield Bond 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.
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. and foreign 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.
FLEXIBLE CREDIT FUND seeks a high level of total return by the active
trading in credit instruments. Under normal circumstances, at least 80% of
the Fund's net assets, plus any borrowings for investment purposes, will be
invested in credit instruments and derivative instruments and
exchange-traded funds ("ETFs") that are linked to, or provide investment
exposure to, credit instruments. The Fund considers a credit instrument to
be any debt instrument or instrument with debt-like characteristics,
including but not limited to, corporate and sovereign bonds, secured
floating rate loans and other institutionally traded secured floating rate
debt obligations ("Loans"), and securitized instruments, which are
securities backed by pools of assets such as mortgages, loans, or other
receivables. The credit instruments in which the Fund intends to primarily
invest are U.S. and non-U.S. below investment grade, high yield bonds
(commonly referred to as "junk bonds") and Loans.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statements 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 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.
Class W shares are offered at net asset value per share. The class is
offered exclusively through advisory fee-based programs sponsored by certain
financial intermediaries and other programs.
Class W shares of the Flexible Credit Fund and the Strategic Bond Fund
commenced operations effective October 1, 2014 and January 29, 2015,
respectively. The U.S. Government Securities Fund and the Flexible Credit
Fund stopped offering Class B shares for sale as of the close of business
December 2, 2014. As of the close of business January 27, 2015, Class B
shares of each of the U.S. Government Securities Fund and the Flexible
Credit Fund converted to Class A shares of each respective Fund.
--------
+ On June 3, 2014, the Board of Trustees of the Trust (the "Board") approved a
change in the High Yield Bond Fund's name to the "SunAmerica Flexible Credit
Fund", along with certain changes to the Fund's principal investment
strategy and techniques. The Board also approved a new Subadvisory Agreement
between SunAmerica and Newfleet Asset Management, LLC, replacing Wellington
Management Company LLP. These changes became effective on October 1, 2014.
65
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
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.
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. Fund Merger
Pursuant to an Agreement and Plan of Reorganization, all of the assets and
liabilities of the SunAmerica GNMA Fund, a series of the Trust, were
transferred in a tax-free exchange to the U.S. Government Securities Fund,
in exchange for shares of the U.S. Government Securities Fund. The
reorganization was consummated on November 10, 2014. The acquiring fund
acquired all of the assets and liabilities of the target fund as shown in
the table below. Class A, Class B, and Class C shares of the SunAmerica GNMA
Fund were exchanged tax-free for Class A, Class B, and Class C shares of the
U.S. Government Securities Fund at an exchange ratio of 1.11 to 1, 1.11 to
1, and 1.11 to 1, respectively. Shares of the U.S. Government Securities
Fund issued in connection with the acquisition of the SunAmerica GNMA Fund
were 12,979,447 with a value of $125,333,608. The assets in the investment
portfolio of the SunAmerica GNMA Fund with a value of $125,119,235 and
identified cost of $122,854,034 as of the date of the reorganization, were
the principal assets acquired by the acquiring fund. For financial statement
purposes, assets received and shares issued by the acquiring fund were
recorded at value; however, the cost basis of the investments received from
the target fund were carried forward to align ongoing reporting of the
acquiring fund's realized and unrealized gains and losses with amounts
distributable to shareholders for tax purposes.
The following is a summary of the shares outstanding, net assets, net asset
value per share and net unrealized appreciation (depreciation) immediately
before and after the reorganization:
NET ASSET NET UNREALIZED
SHARES VALUE APPRECIATION
OUTSTANDING NET ASSETS PER SHARE (DEPRECIATION)
----------- ------------ --------- --------------
Target Fund
SunAmerica GNMA Fund....................... $2,265,201
Class A.................................... 9,096,890 $ 97,317,280 $10.70
Class B.................................... 851,684 9,136,498 10.73
Class C.................................... 1,757,477 18,879,830 10.74
Acquiring Fund
SunAmerica U.S. Government Securities Fund. $5,835,409
Class A.................................... 9,875,105 $ 95,366,623 $ 9.66
Class B.................................... 294,560 2,845,301 9.66
Class C.................................... 853,892 8,239,955 9.65
Post Reorganization
SunAmerica U.S. Government Securities Fund. $8,100,610
Class A.................................... 19,952,209 $192,683,902 $ 9.66
Class B.................................... 1,240,419 11,981,799 9.66
Class C.................................... 2,810,376 27,119,786 9.65
Assuming the reorganization had been completed on April 1, 2014, the
beginning of the annual reporting period for the acquiring fund, the pro
forma results of operations for the period ended March 31, 2015, are as
follows:
Net investment income (loss)................... $2,770,789
Net realized/unrealized gains (losses)......... 6,356,714
----------
Change in net assets resulting from operations. $9,127,503
==========
66
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
Because the combined investment portfolios have been managed as a single
integrated portfolio since the reorganization was completed, it is not
practicable to separate the amounts of revenue and earnings of the target
fund that have been included in the Statement of Operations since November
10, 2014.
Note 3. 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 their 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
establishes 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 is 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,
2015 are reported on a schedule following each Fund's Portfolio of
Investments.
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.
67
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
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 a Fund's shares, and a 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.
Bonds, debentures, other long-term debt securities, and short-term debt
securities with maturities in excess of 60 days, are valued at evaluated bid
prices obtained for the day of valuation from a Board-approved pricing
service, and are generally categorized as Level 2. The pricing service 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 spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, 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 a Fund if acquired within 60 days of
maturity or, if already held by a 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 floating rate loans ("Loans") are valued at the average of available
bids in the market for such Loans, as provided by a Board-approved loan
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.
The Board is responsible for the share valuation process and has adopted
policies 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.
68
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
DERIVATIVE INSTRUMENTS:
Forward Foreign Currency Contracts: Certain Funds may enter into forward
contracts for various purposes, including to facilitate settlement of
foreign currency denominated portfolio 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, 2015, the Flexible Credit Fund and the
Strategic Bond Fund used forward contracts to attempt to protect securities
and related receivables and payables against changes in future foreign
exchange rates. As of March 31, 2015, the Strategic Bond Fund had open
forward contracts, which are reported on a schedule following each 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 a Fund as unrealized appreciation or
depreciation. On the settlement date, a 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, a 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 exposure 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 Statements 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
portfolio 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.
Master Agreements: Certain Funds that hold derivative instruments and other
financial instruments may be a party to ISDA (International Swaps and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern certain
instruments. Master Agreements may contain provisions regarding, among other
things, the parties' general obligations, representations, agreements,
collateral requirements, events of default and early termination. Collateral
can be in the form of cash or securities as agreed to by the Fund and
applicable counterparty. Collateral requirements are generally determined
based on a Fund's net position with each counterparty. Master Agreements may
also include certain provisions that require a Fund to post additional
collateral upon the occurrence of certain events, such as when a Fund's net
assets fall below a specified level. In addition, Master Agreements
typically specify certain standard termination events, such as failure of a
party to pay or deliver, credit support defaults and other events of
default. Termination events applicable to a Fund may also occur upon a
decline in the Fund's net assets below a specified level over a certain
period of time. Additional termination events applicable to counterparties
may occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments outstanding pursuant to a particular Master Agreement,
including the payment of any losses and costs resulting from such early
termination, as reasonably determined by the terminating party. Any decision
by one or more of a Fund's counterparties to elect early termination could
cause a Fund to accelerate the payment of liabilities, which settlement
amounts could be in excess of the amount of assets that are already posted
as collateral. Typically, the Master Agreement will permit a single net
payment in the event of default. Note, however, that bankruptcy or
insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset in bankruptcy, insolvency or other
events. As a result, the early termination with respect to derivative
instruments subject to Master Agreements that are in a net liability
position could be material to a Fund's financial statements. See additional
information on specific types of derivative instruments and other financial
instruments as disclosed in the Notes to the Financial Statements. The Funds
do not offset derivative assets and derivative liabilities that are subject
to netting arrangements in the Statements of Asset and Liabilities.
69
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
The following tables represent the value of derivatives held as of March 31,
2015, by their primary underlying risk exposure and respective location on
the Statements of Assets and Liabilities and the effect of derivatives on
the Statements of Operations for the year ended March 31, 2015. For a
detailed presentation of derivatives held as of March 31, 2015, please refer
to each Fund's Portfolio of Investments.
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 Unrealized appreciation on forward foreign Unrealized depreciation on forward foreign
contracts(2)........... currency contracts $1,404,308 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 Unrealized appreciation on forward foreign Unrealized depreciation on forward foreign
contracts(2)........... currency contracts currency contracts $95,331
=======
CHANGE IN UNREALIZED
APPRECIATION
LOCATION OF GAIN (LOSS) REALIZED GAIN (LOSS) (DEPRECIATION)
ON DERIVATIVES ON DERIVATIVES ON DERIVATIVES
RECOGNIZED IN STATEMENT RECOGNIZED IN STATEMENTS RECOGNIZED IN STATEMENTS
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 $6,085,554 $1,308,977
========== ==========
--------
(1)The Fund's derivative contracts held during the year ended March 31, 2015,
are not accounted for as hedging instruments under accounting principles
generally accepted in the United States of America.
(2)The average notional amount outstanding for forward foreign currency
contracts was $23,414,522.
FLEXIBLE CREDIT 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
===
FLEXIBLE CREDIT 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
REALIZED GAIN (LOSS) (DEPRECIATION)
LOCATION OF GAIN (LOSS) ON ON DERIVATIVES ON DERIVATIVES
DERIVATIVES RECOGNIZED IN RECOGNIZED IN STATEMENTS RECOGNIZED IN STATEMENTS
DERIVATIVE CONTRACTS(1) STATEMENT 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 $165,031 $(325)
======== ======
--------
(1)The Fund's derivative contracts held during the year ended March 31, 2015,
are not accounted for as hedging instruments under accounting principles
generally accepted in the United States of America.
(2)The average notional amount outstanding for forward foreign currency
contracts was $1,194,930.
70
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
There were no derivative assets and liabilities subject to Master Agreements
outstanding at March 31, 2015. The repurchase agreements held by the Funds
as of March 31, 2015, are also subject to Master Agreements. See the
Portfolio of Investments and the Notes to the Financial Statements for more
information about the Funds' holdings in repurchase agreements.
MORTGAGE-BACKED DOLLAR ROLLS: During the year ended March 31, 2015, the
Strategic Bond Fund entered into dollar rolls using "to be announced"
("TBA") mortgage-backed securities ("TBA Rolls"). TBA 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 Strategic Bond Fund had TBA Rolls outstanding at period
end, which are included in receivable for investments sold and payable for
investments purchased in the Statements of Assets and Liabilities. TBA Roll
transactions involve the risk that the market value of the securities held
by a 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 TBA Roll transaction files bankruptcy or
becomes insolvent, a Fund's use of the proceeds from the sale of the
securities may be restricted pending a determination by the other party, or
its trustee or receiver, whether to enforce the Fund's obligation to
repurchase the securities. The return earned by a Fund with the proceeds of
the TBA Roll transaction may not exceed the transaction costs. For the year
ended March 31, 2015, the Strategic Bond Fund had realized gains (losses)
from mortgage-backed dollar rolls of $103,461.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS: Certain 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, 2015, the Strategic
Bond Fund purchased and/or sold when-issued securities.
STRIPPED MORTGAGE-BACKED SECURITIES: Stripped Mortgage-Backed Securities
("SMBS") are multiple-class mortgage-backed securities. SMBS are often
structured with two classes that receive different proportions of the
interest and principal distributions on a pool of mortgage assets. SMBS 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 Statements 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 Statements of
Operations as an increase or decrease to interest income, even though
principal is not paid until maturity.
71
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
REPURCHASE AGREEMENTS: The Funds, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from the Securities and Exchange Commission ("SEC"), 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 Trust's 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, a Fund has the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligation. If
the seller defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by a Fund may be delayed or limited.
As of March 31, 2015, the following Funds held an undivided interest in the
joint repurchase agreement with State Street Bank and Trust Co.:
PERCENTAGE PRINCIPAL
FUND OWNERSHIP AMOUNT
---- ---------- -----------
U.S. Government Securities. 6.18% $12,561,000
Strategic Bond............. 0.18 365,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
State Street Bank and Trust Co., dated March 31, 2015, bearing interest at a
rate of 0.00% per annum, with a principal amount of $203,102,000, a
repurchase price of $203,102,000, and a maturity date of April 1, 2015. The
repurchase agreement is collateralized by the following:
INTEREST MATURITY PRINCIPAL
TYPE OF COLLATERAL RATE DATE AMOUNT MARKET VALUE
------------------ -------- ---------- ------------ ------------
U.S. Treasury Notes. 1.75% 03/31/2022 $112,675,000 $112,815,844
U.S. Treasury Notes. 2.25 11/15/2024 91,160,000 94,350,600
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 Trust is 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 Statements 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 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.
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.
72
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
The Funds reserve the right to declare and pay dividends less frequently
than disclosed above, provided that the net realized capital gains and net
investment income, if any, are paid at least annually. The amount of
dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations, which may differ from 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 it will not be subject to
excise tax on undistributed income and gains. Therefore, no federal income
tax or excise tax provision is required.
The Funds recognize 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
2011 - 2013 or expected to be taken in each Fund's 2014 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 2011.
During the fiscal years 2010 through 2014, the calculation of accretion of
discount and premium amortization for certain securities was accounted for
incorrectly in the Flexible Credit Fund. These instances resulted in an
overstatement of net investment income and an understatement of realized and
unrealized gains/losses, but had no impact on net asset value per share in
any prior year since this represented only a reclassification between income
and capital accounts. The impact of these misclassifications, including the
impact to per share amounts and net investment income ratios was immaterial
to all previous periods, and therefore, no changes to prior year reported
amounts have been recorded. In the fiscal year ended March 31, 2015,
management recorded an adjustment to adjust the Flexible Credit Fund's March
31, 2015 "Accumulated undistributed net investment income (loss)" in the
amount of ($790,122), "Accumulated undistributed net realized gain (loss) on
investments, futures contracts, option contracts, securities sold short, and
foreign exchange transactions" in the amount of $150,062 and "Unrealized
appreciation (depreciation) on investments" in the amount of $640,060 in
order to correctly present the components of ending net assets. Management
concluded the impact of recording the adjustment in the financial statements
for the year ended March 31, 2015 to also be immaterial.
FOREIGN CURRENCY TRANSLATION: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars based on the exchange rate of such currencies
against U.S. dollars on the date of valuation.
The Funds do not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at the end of the period. Similarly, the
Funds do not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
period.
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 Statements 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.
Note 4. 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
73
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
corporate affairs, subject to general review by the Trustees. In connection
therewith, SunAmerica furnishes the Funds with office facilities, maintains
certain of the Funds' books and records, and pays the salaries and expenses
of all personnel, including officers of the Funds, who are employees of
SunAmerica and its affiliates.
The Funds pay SunAmerica a monthly investment advisory and management fee
calculated daily at the following annual percentages of each Fund's average
daily net assets:
MANAGEMENT
ASSETS FEES
---------------------------- ----------
U.S. Government Securities Fund........ $0 - $200 million 0.650%
(greater than) $200 million 0.620
(greater than) $400 million 0.550
Strategic Bond Fund.................... $0 - $350 million 0.650
(greater than) $350 million 0.600
Flexible Credit 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 Flexible Credit Fund is subadvised by Newfleet Asset
Management, LLC ("Newfleet"). Under the Subadvisory Agreements, PineBridge
and Newfleet manage the investment and reinvestment of the assets of the
Strategic Bond Fund and the Flexible Credit Fund, respectively.
SunAmerica pays PineBridge and Newfleet 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
Newfleet Asset Management, LLC with respect to the Strategic Bond Fund and
Flexible Credit 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
Flexible Credit Fund+................. $0 - $200 million 0.300
(greater than) $200 million 0.250
(greater than) $400 million 0.150
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, litigation, or acquired Fund
fees and expenses, brokerage commissions and other transactional expenses
relating to the purchase and sale of portfolio securities, interest, taxes
and governmental fees, and other expenses not incurred in the ordinary
course of a Fund's business. The contractual fee waivers and expense
reimbursements will continue indefinitely, subject to termination by the
Trustees, including a majority of the Disinterested Trustees.
--------
+ Prior to October 1, 2014, the subadvisory fee payable by SunAmerica to
Wellington Management Company, LLP was equal to an annual rate of 0.40% of
average daily net assets on the first $150 million, 0.35% of average daily
net assets on the next $350 million and 0.30% thereafter.
74
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
FUND PERCENTAGE
---- ----------
U.S. Government Securities Class A.................................. 0.99%
U.S. Government Securities Class C.................................. 1.64
Strategic Bond Class A.............................................. 1.40
Strategic Bond Class B.............................................. 2.05
Strategic Bond Class C.............................................. 2.05
Strategic Bond Class W.............................................. 1.20
Flexible Credit Class A+............................................ 1.45
Flexible Credit Class C+............................................ 2.10
Flexible Credit Class W............................................. 1.25
For the U.S. Government Securities Fund, any contractual waivers and/or
reimbursements made by SunAmerica are subject to recoupment from the Fund
within two years after the occurrence of the waivers and/or reimbursements,
provided that the Fund is 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, 2015, pursuant to the contractual expense
limitations in the above table, SunAmerica has waived and/or reimbursed
expenses as follows:
OTHER EXPENSES
FUND REIMBURSED
---- --------------
U.S. Government Securities.................................. $195,553
CLASS SPECIFIC
FUND EXPENSES
---- --------------
U.S. Government Securities Class A.......................... $340,654
U.S. Government Securities Class B.......................... 22,280
U.S. Government Securities Class C.......................... 53,973
Strategic Bond Class W...................................... 4,688
Flexible Credit Class A..................................... 154,382
Flexible Credit Class B..................................... 21,354
Flexible Credit Class C..................................... 66,923
Flexible Credit Class W..................................... 41,900
At March 31, 2015, 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, 2016 MARCH 31, 2017
---- -------------- --------------
U.S. Government Securities.............. $179,558 $195,553
CLASS SPECIFIC EXPENSES REIMBURSED
----------------------------------
FUND MARCH 31, 2016 MARCH 31, 2017
---- -------------- --------------
U.S. Government Securities Class A...... $288,050 $340,654
U.S. Government Securities Class C...... 39,432 53,973
The Trust, on behalf of each Fund, has entered into a Distribution Agreement
with AIG Capital Services, Inc. ("ACS" or "Distributor"), an affiliate of
the Adviser. Each Fund has adopted a Distribution Plan on behalf of each
Class (other than Class W shares of the Strategic Bond and Flexible Credit
Funds), 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.
--------
+ Prior to October 1, 2014, SunAmerica agreed to waive its fees/and or
reimburse expenses to the extent that the total annual operating expenses
exceeded 1.36% and 2.01% for Class A and C shares, respectively.
75
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
The Class A, Class B and Class C Plans, provide that the Trust, on behalf of
the respective classes, shall pay the Distributor a distribution fee at an
annual rate of up to 0.10%, 0.75% and 0.75%, of average daily net assets of
such Fund's Class A, Class B and Class C shares, respectively, to compensate
the Distributor and certain securities firms for providing sales and
promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be compensated for include
fees paid to broker-dealers that have sold Fund shares, commissions, and
other expenses such as those incurred for sales literature, prospectus
printing and distribution and compensation to wholesalers. It is possible
that in any given year, the amount paid to the Distributor under the Class A
Plan, Class B Plan or Class C Plan may exceed the Distributor's distribution
costs as described above. Except for Class W shares of the Strategic Bond
and Flexible Credit Funds, 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. For the year ended March 31, 2015, ACS
received fees as reflected in the Statements of Operations based on the
aforementioned rates.
The Trust, on behalf of the Strategic Bond and Flexible Credit Funds, has
entered into an Administrative and Shareholder Services Agreement with ACS,
pursuant to which ACS is paid an annual fee of 0.15% of average daily net
assets of Class W shares as compensation for providing additional
shareholder services to Class W shareholders. For the year ended March 31,
2015, ACS earned fees as reflected in the Statements of Operations based on
the aforementioned rate.
ACS receives sales charges on each Fund's Class A shares, portions of which
are reallowed to affiliated broker-dealers and non-affiliated
broker-dealers. ACS 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. ACS has advised the Funds that for the year
ended March 31, 2015, 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. $ 38,779 $ 12,147 $ 20,118 $ 1,753 $12,268 $ 526
Strategic Bond............. 451,679 260,327 112,941 5,722 51,426 12,931
Flexible Credit............ 299,977 70,540 178,146 10,016 25,488 2,460
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, 2015, the Funds incurred the following expenses
which are included in transfer agent fees and expenses in the Statements of
Operations to compensate SAFS pursuant to the terms of the Service Agreement:
PAYABLE AT
FUND EXPENSES MARCH 31, 2015
---- -------- --------------
US Government Securities Class A................... $294,467 $35,063
US Government Securities Class B................... 9,769 --
US Government Securities Class C................... 31,698 4,555
Strategic Bond Class A............................. 562,718 45,297
Strategic Bond Class B............................. 95,717 7,510
Strategic Bond Class C............................. 422,320 34,653
Strategic Bond Class W............................. 1,494 1,467
Flexible Credit Class A............................ 182,744 23,090
Flexible Credit Class B............................ 18,845 --
Flexible Credit Class C............................ 72,778 7,889
Flexible Credit Class W............................ 8,258 3,012
76
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
At March 31, 2015, 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 6%
Focused Multi-Asset Strategy Portfolio 7
Pershing LLC 18
Flexible Credit Focused Balanced Strategy Portfolio 5
Focused Multi-Asset Strategy Portfolio 5
Pershing LLC 5
Strategic Bond Pershing LLC 5
Note 5. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the year ended March 31, 2015 were as follows:
U.S. GOVERNMENT STRATEGIC FLEXIBLE CREDIT
SECURITIES FUND BOND FUND FUND
--------------- ------------ ---------------
Purchases (excluding U.S.
government securities)... $ -- $539,195,680 $170,247,008
Sales (excluding U.S.
government securities)... -- 505,763,495 91,961,227
Purchases of U.S.
government securities.... 76,619,896 114,181,814 284,890
Sales of U.S. government
securities............... 130,191,079 148,574,437 284,932
Note 6. 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 Statements
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.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
FOR THE YEAR ENDED MARCH 31, 2015 FOR THE YEAR ENDED MARCH 31, 2015
---------------------------------------- ---------------------------------
LONG-TERM UNREALIZED
ORDINARY GAINS/CAPITAL APPRECIATION ORDINARY LONG-TERM
FUND INCOME LOSS CARRYOVER (DEPRECIATION)* INCOME CAPITAL GAINS
---- ---------- -------------- --------------- ----------- -------------
U.S. Government Securities. $ 373,084 $(10,814,287) $ 8,230,993 $ 2,515,565 $--
Strategic Bond............. 4,680,328 (49,688,392) (11,120,757) 17,254,839 --
Flexible Credit............ 1,074,645 (55,582,920) (3,175,773) 5,820,730 --
--------
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
TAX DISTRIBUTIONS
FOR THE YEAR ENDED MARCH 31, 2014
---------------------------------
ORDINARY LONG-TERM
FUND INCOME CAPITAL GAINS
---- ----------- -------------
U.S. Government Securities. $ 2,170,410 $--
Strategic Bond............. 22,272,620 --
Flexible Credit............ 5,696,398 --
77
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
As of March 31, 2015, 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. $ -- $ -- $ -- $8,664,573 $2,149,714
Strategic Bond............. -- -- 49,688,392 -- --
Flexible Credit............ 1,874,057 9,384,737 41,322,811 84,473 2,916,842
--------
+ 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, 2015:
CAPITAL LOSS
CARRYFORWARD
FUND UTILIZED
---- ------------
U.S. Government Securities. $2,152,353
Strategic Bond............. 5,654,716
Flexible Credit............ --
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, 2015, 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. $-- $ -- $ --
Strategic Bond............. -- (8,796) 5,466,959
Flexible Credit............ -- 375,551 2,021,242
For the period ended March 31, 2015, 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, capital loss carryforwards acquired as the result of
a merger and treatment of foreign currency to the components of net assets
as follows:
ACCUMULATED ACCUMULATED
UNDISTRIBUTED UNDISTRIBUTED
NET INVESTMENT NET REALIZED CAPITAL
FUND INCOME (LOSS) GAIN (LOSS) PAID-IN
---- -------------- ------------- -----------
U.S. Government Securities. $ 719,103 $(10,934,500) $10,215,397
Strategic Bond............. 4,476,390 (4,320,446) (155,944)
Flexible Credit............ 1,004,360 (47,116) (957,244)
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 STRATEGIC FLEXIBLE
SECURITIES FUND BOND FUND CREDIT FUND
--------------- ------------ ------------
Cost.......................................... $202,923,218 $480,676,361 $183,996,866
============ ============ ============
Appreciation.................................. 9,072,797 10,000,989 2,818,216
Depreciation.................................. (841,804) (21,053,202) (5,992,855)
------------ ------------ ------------
Unrealized appreciation (depreciation) -- net. $ 8,230,993 $(11,052,213) $ (3,174,639)
============ ============ ============
78
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
Note 7. 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 PERIOD ENDED YEAR ENDED
MARCH 31, 2015 MARCH 31, 2014 JANUARY 27, 2015+ MARCH 31, 2014
------------------------ ------------------------ ------------------------ ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ---------- ------------ -------- -----------
Shares sold(1)(2)(3)..... 3,831,245 $ 36,906,014 2,997,405 $ 28,749,556 63,229 $ 605,716 103,345 $ 976,258
Shares issued in merger#. 10,077,104 97,317,280 -- -- 945,859 9,136,498 -- --
Reinvested dividends..... 213,308 2,057,492 187,267 1,783,073 3,369 32,429 3,649 34,823
Shares redeemed(1)(2)(3). (6,175,600) (59,297,986) (4,154,046) (39,601,661) (1,384,324) (13,444,429) (209,133) (1,985,784)
---------- ------------ ---------- ------------ ---------- ------------ -------- -----------
Net increase (decrease).. 7,946,057 $ 76,982,800 (969,374) $ (9,069,032) (371,867) $ (3,669,786) (102,139) $ (974,703)
========== ============ ========== ============ ========== ============ ======== ===========
U.S. GOVERNMENT SECURITIES FUND
--------------------------------------------------
CLASS C
--------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MARCH 31, 2015 MARCH 31, 2014
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Shares sold.............. 352,307 $ 3,393,240 82,491 $ 790,305
Shares issued in merger#. 1,956,484 18,879,830 -- --
Reinvested dividends..... 13,622 131,560 9,214 87,861
Shares redeemed.......... (627,961) (6,060,572) (551,933) (5,256,522)
---------- ------------ ---------- ------------
Net increase (decrease).. 1,694,452 $ 16,344,058 (460,228) $ (4,378,356)
========== ============ ========== ============
STRATEGIC BOND
---------------------------------------------------------------------------------------------------------
CLASS A CLASS B
----------------------------------------------------- --------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2015 MARCH 31, 2014 MARCH 31, 2015 MARCH 31, 2014
------------------------- -------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------- ---------- ------------ ---------- ------------
Shares sold(4)(5)... 19,143,787 $ 67,456,885 20,037,364 $ 70,574,479 1,352,463 $ 4,771,995 1,561,817 $ 5,483,865
Reinvested dividends 2,285,858 8,067,498 2,812,086 9,825,626 301,291 1,063,953 392,316 1,370,206
Shares
redeemed(4)(5)..... (26,532,888) (92,825,598) (44,018,941) (153,795,261) (3,429,949) (12,094,118) (4,581,464) (15,981,270)
----------- ------------ ----------- ------------- ---------- ------------ ---------- ------------
Net increase
(decrease)......... (5,103,243) $(17,301,215) (21,169,491) $ (73,395,156) (1,776,195) $ (6,258,170) (2,627,331) $ (9,127,199)
=========== ============ =========== ============= ========== ============ ========== ============
STRATEGIC BOND
-------------------------------------------------------------------------------
CLASS C CLASS W
----------------------------------------------------- ------------------------
FOR THE FOR THE FOR THE PERIOD
YEAR ENDED YEAR ENDED JANUARY 29, 2015@
MARCH 31, 2015 MARCH 31, 2014 THROUGH MARCH 31, 2015
------------------------- -------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------- ---------- ------------
Shares sold......... 7,003,618 $ 24,755,006 6,034,013 $ 21,399,391 4,495,707 $ 15,562,006
Reinvested dividends 1,129,436 4,000,084 1,500,983 5,264,874 7,382 25,765
Shares redeemed..... (11,371,270) (40,177,422) (26,746,922) (93,597,683) (10,304) (35,885)
----------- ------------ ----------- ------------- ---------- ------------
Net increase
(decrease)......... (3,238,216) $(11,422,332) (19,211,926) $ (66,933,418) 4,492,785 $ 15,551,886
=========== ============ =========== ============= ========== ============
--------
(1)For the year ended March 31, 2015, includes automatic conversion of 21,005
shares of Class B shares in the amount of $201,042 to 21,009 shares of Class
A shares in the amount of $201,042.
(2)For the year ended March 31, 2014, includes automatic conversion of 20,154
shares of Class B shares in the amount of $193,287 to 20,162 shares of Class
A shares in the amount of $193,287.
(3)For the year ended March 31, 2015, includes the conversion of 593,059 shares
of Class B shares in the amount of $5,776,391 to 593,668 shares of Class A
shares in the amount of $5,776,391 relating to the conversion of Class B
shares on January 27, 2015.
(4)For the year ended March 31, 2015, includes automatic conversion of 371,070
shares of Class B shares in the amount of $1,309,413 to 371,070 shares of
Class A shares in the amount of $1,309,413.
(5)For the year ended March 31, 2014, includes automatic conversion of 363,338
shares of Class B shares in the amount of $1,270,299 to 363,264 shares of
Class A shares in the amount of $1,270,299.
+ See Note 1
@ Commencement of Operations.
# See Note 2
79
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
FLEXIBLE CREDIT FUND
------------------------------------------------------------------------------------------------------
CLASS A CLASS B
--------------------------------------------------- -------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
MARCH 31, 2015 MARCH 31, 2014 JANUARY 27, 2015+ MARCH 31, 2014
------------------------- ------------------------ ------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------ ---------- -----------
Shares sold(1)(2)(3) 28,174,315 $ 97,646,255 6,980,643 $ 24,808,319 410,799 $ 1,457,988 985,464 $ 3,523,721
Reinvested dividends 831,116 2,923,018 752,185 2,657,899 71,262 253,385 114,254 404,144
Shares
redeemed(1)(2)(3).. (11,868,733) (41,693,769) (8,798,049) (30,951,768) (4,132,646) (14,417,561) (1,346,048) (4,747,328)
----------- ------------ ---------- ------------ ---------- ------------ ---------- -----------
Net increase
(decrease)......... 17,136,698 $ 58,875,504 (1,065,221) $ (3,485,550) (3,650,585) $(12,706,188) (246,330) $ (819,463)
=========== ============ ========== ============ ========== ============ ========== ===========
FLEXIBLE CREDIT FUND
-----------------------------------------------------------------------------
CLASS C CLASS W
--------------------------------------------------- ------------------------
FOR THE FOR THE FOR THE PERIOD
YEAR ENDED YEAR ENDED OCTOBER 1, 2014@
MARCH 31, 2015 MARCH 31, 2014 THROUGH MARCH 31, 2015
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------ ---------- ------------
Shares sold......... 6,133,326 $ 21,431,596 1,029,564 $ 3,674,020 5,079,276 $ 17,617,248
Reinvested dividends 274,366 971,877 291,589 1,035,927 48,605 168,265
Shares redeemed..... (1,839,787) (6,483,464) (2,287,139) (8,107,960) (1,195,835) (4,147,014)
----------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease)......... 4,567,905 $ 15,920,009 (965,986) $ (3,398,013) 3,932,046 $ 13,638,499
=========== ============ ========== ============ ========== ============
--------
(1)For the year ended March 31, 2015, includes automatic conversion of 162,884
shares of Class B shares in the amount of $574,439 to 163,300 shares of
Class A shares in the amount of $574,439.
(2)For the year ended March 31, 2014, includes automatic conversion of 151,815
shares of Class B shares in the amount of $540,697 to 151,909 shares of
Class A shares in the amount of $540,697.
(3)For the year ended March 31, 2015, includes the conversion of 469,743 shares
of Class B shares in the amount of $1,611,218 to 471,116 shares of Class A
shares in the amount of $1,611,218 relating to the conversion of Class B
shares on January 27, 2015.
+ See Note 1
@ Commencement of Operations.
Note 8. 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 15
basis points per annum on the daily unused portion of the committed line of
credit and a one-time closing fee of 5 basis points on the uncommitted line
of credit, both of which are included in other expenses on the Statements of
Operations. Prior to September 12, 2014, the commitment fee was 10 basis
points per annum on the daily unused portion of the committed line of credit
and there was no closing fee on the uncommitted line of credit. Borrowings
under the line of credit will commence when the respective Fund's cash
shortfall exceeds $100,000. For the year ended March 31, 2015, the following
Funds had borrowings:
DAYS INTEREST AVERAGE DEBT WEIGHTED AVERAGE
FUND OUTSTANDING CHARGES UTILIZED INTEREST
---- ----------- -------- ------------ ----------------
Strategic Bond.............. 6 $203 $ 900,760 1.36%
Flexible Credit............. 1 72 1,925,400 1.35
At March 31, 2015, there were no borrowings outstanding.
Note 9. 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, 2015, none of the Funds participated in this program.
80
SUNAMERICA INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (CONTINUED)
Note 10. 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 Trustees 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.
The following amounts for the Retirement Plan Liabilities are included in
the Trustees' fees and expenses payable line on the Statements of Assets and
Liabilities and the amounts for the Retirement Plan Expenses are included in
the Trustees' fees and expenses line on the Statements of Operations.
AS OF MARCH 31, 2015
- -----------------------------------------------
RETIREMENT PLAN RETIREMENT PLAN RETIREMENT PLAN
FUND LIABILITY EXPENSE PAYMENTS
---- --------------- --------------- ---------------
U.S. Government Securities. $110 $ 3 $3,279
Strategic Bond............. 51 11 2,401
Flexible Credit............ 31 3 1,493
Note 11. Investment Concentration Note
The Flexible Credit 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 Flexible Credit Fund and Strategic Bond Fund invest in participations
and assignments, or act as a party to the primary lending syndicate of a
variable rate senior loan interest to United States corporations,
partnerships, and other entities. If the lead lender in a typical lending
syndicate becomes insolvent, enters receivership or, if not FDIC insured,
enters into bankruptcy, the Funds may incur certain costs and delays in
receiving payment, or may suffer a loss of principal and/or interest. When
the Funds purchase a participation of a senior loan interest, the Funds
typically enter into a contractual agreement with the lender or other third
party selling the participation but not with the borrower directly. As such,
the Funds are subject to the credit risk of the borrower, selling
participant, lender or other persons positioned between the Funds and the
borrower.
The U.S. Government Securities 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, and 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's concentration in such investments, it may be
subject to risks associated with the U.S. Government agencies or
instrumentalities. At March 31, 2015, the Fund had 58.6% of its net assets
invested in such securities.
81
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 three
funds constituting SunAmerica Income Funds (the "Trust") at March 31, 2015, 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 audits 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, 2015 by correspondence with the custodian and
brokers, and the application of alternative auditing procedures where
securities purchased had not been received, provide a reasonable basis for our
opinion expressed above.
PricewaterhouseCoopers LLP
Houston, Texas
May 29, 2015
82
SUNAMERICA INCOME FUNDS
RESULTS OF SPECIAL SHAREHOLDER MEETING -- MARCH 31, 2015 -- (UNAUDITED)
On October 16, 2014, a Special Meeting of Shareholders of the SunAmerica GNMA
Fund was held to consider a proposal to approve an Agreement and Plan of
Reorganization pursuant to which the SunAmerica GNMA Fund would transfer all of
its assets to the U.S. Government Securities Fund, in exchange solely for the
assumption of Class A, Class B and Class C shares of the U.S. Government
Securities Fund, which shares were distributed by the SunAmerica GNMA Fund to
the holders of its shares in complete liquidation thereof.
The voting results of this Special Meeting were as follows:
FOR AGAINST ABSTAIN
--- ------- -------
5,700,114 398,967 592,080
83
SUNAMERICA INCOME FUNDS
TRUSTEE AND OFFICER INFORMATION -- MARCH 31, 2015 -- (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 to Retired. 77 Director, Sysco Corporation
Age: 69 present (1996 to present); Director,
Luby's Inc. (1998 to
present).
William F. Devin Trustee 2001 to Retired. 77 None
Age: 76 present
Richard W. Grant Trustee; 2011 to Retired. Prior to that, 28 None
Age: 69 Chairman present Attorney and Partner at
of the Morgan Lewis and Bockius
Board (1989 to 2011).
Stephen J. Gutman Trustee 1985 to Senior Vice President and 28 None
Age: 71 present Associate Broker, Corcoran
Group (real estate) (2002 to
present); President, SJG
Marketing, Inc. (2009 to
present).
William J. Shea Trustee 2004 to Executive Chairman, 28 Director, Boston Private
Age: 67 present Caliber ID, Inc. (formerly Financial Holdings (2004 to
Lucid, Inc.) (medical present); Chairman,
devices) (2007 to present); Demoullas Supermarkets
(1999 to present).
84
SUNAMERICA INCOME FUNDS
TRUSTEE AND OFFICER INFORMATION -- MARCH 31, 2015 -- (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 137 None
Age: 61 present Director, SunAmerica,
(1995 to present); Director,
AIG Capital Services, Inc.
("ACS") (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: 46 present SunAmerica (2002 to
present); Senior Vice
President, SunAmerica
(2003 to present); Chief
Operating Officer,
SunAmerica (2006 to
present).
Gregory R. Kingston Vice 2002 to Vice President, SunAmerica N/A N/A
Age: 49 President present (2001 to present); Head of
and Mutual Fund
Treasurer Administration,
SunAmerica (2014 to
present).
Donna McManus Vice 2014 to Vice President, SunAmerica N/A N/A
Age: 54 President present (2014 to present); Managing
and Director, BNY Mellon
Assistant (2009 to 2014).
Treasurer
Shawn Parry Vice 2014 to Assistant Vice President, N/A N/A
Age: 42 President present SAAMCo (2005 to 2014);
and Vice President, SAAMCo
Assistant (2014 to present).
Treasurer
Gregory N. Bressler Secretary 2005 to Senior Vice President and N/A N/A
Age: 49 present General Counsel,
SunAmerica (2005 to
present).
James Nichols Vice 2006 to Director, President and N/A N/A
Age: 49 President present CEO, ACS (2006 to
present); Senior Vice
President, SunAmerica
(2002 to present).
85
SUNAMERICA INCOME FUNDS
TRUSTEE AND OFFICER INFORMATION -- MARCH 31, 2015 -- (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)
-------------------- ------------- -------------- ----------------------------- ------------ --------------------
Katherine Stoner Chief June 2011 Vice President, SunAmerica N/A N/A
Age: 58 Compliance to present Asset Management, LLC
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).
Nori L. Gabert Vice 2002 to Vice President and Deputy N/A N/A
Age: 61 President present General Counsel,
and SunAmerica (2005 to
Assistant present).
Secretary
Kathleen D. Fuentes Chief Legal 2013 to Vice President and Deputy N/A N/A
Age: 46 Officer and present General Counsel,
Assistant SunAmerica (2006 to
Secretary present).
Matthew J. Hackethal Anti- 2006 to Chief Compliance Officer, N/A N/A
Age: 43 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 (3 funds), SunAmerica Equity Funds (2 funds),
SunAmerica Series, Inc. (6 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 (20 portfolios) and SunAmerica Specialty Series (7 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 10 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.
86
SUNAMERICA INCOME FUNDS
SHAREHOLDER TAX INFORMATION -- MARCH 31, 2015 -- (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, 2015. The information and distributions reported herein
may differ from the information and distributions taxable to the shareholders
for the calendar year ending December 31, 2015. 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 2016.
For the year ended March 31, 2015, 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. -- --
Strategic Bond Fund Class A............. -- 0.65
Strategic Bond Fund Class B............. -- 0.65
Strategic Bond Fund Class C............. -- 0.65
Strategic Bond Fund Class W............. -- 0.65
Flexible Credit Fund Class A............ -- 1.85
Flexible Credit Fund Class B............ -- 1.85
Flexible Credit Fund Class C............ -- 1.85
Flexible Credit Fund Class W............ -- 1.85
For the year ended March 31, 2015, certain dividends paid by the Strategic Bond
Fund and Flexible Credit 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.. $198,727
Flexible Credit Fund. 118,811
87
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.
88
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 4.94%
(before maximum sales charge) for the 12-month period ended March 31, 2015. The
Fund posted absolute gains but trailed its benchmark, the Bank of America
Merrill Lynch ("BofA ML") U.S. Treasury Master Index*, which returned 6.15%
during the same period.
The U.S. Treasury market performed strongly during the annual period, as
Federal Reserve (the "Fed") policy dominated investor sentiment along with
troubles from certain European countries. Throughout, the Fed maintained a
federal funds target rate of 0% to 0.25%.
Amid this backdrop, duration and yield curve positioning within the U.S.
Treasury sector overall contributed positively to the Fund's results during the
annual period. The Fund held a longer duration position than the BofA ML U.S.
Treasury Master Index for much of the annual period, which helped as interest
rates generally declined. Positioning on the longer-term end of the yield curve
proved prudent, as longer-dated U.S. Treasuries outperformed shorter-dated U.S.
Treasuries. Sector allocation also boosted relative results. In particular,
having an allocation to mortgage-backed securities helped, as mortgage-backed
securities, and specifically GNMAs, which are not components of the BofA ML
U.S. Treasury Master Index, outpaced U.S. Treasuries during the annual period.
Only partially offsetting these contributors was the impact of exposure to
government-related agency securities, which lagged the performance of U.S.
Treasuries during the annual period and thus detracted. Also hurting was a
sizable position in cash during a period when the U.S. Treasury market rallied.
Individual security selection overall detracted from the Fund's relative
results. Active management of positions in 10-year and 30-year U.S. Treasury
securities amidst broad market volatility generally helped. However, gains were
offset by security selection within the U.S. Treasuries sector.
Toward the end of the annual period, the Fund sold some positions in U.S.
Treasury securities with 10-year and 30-year maturities after a strong run of
outperformance, taking profits. By the end of the annual period, the Fund had
also shifted to a shorter duration than that of the BofA ML U.S. Treasury
Master Index in anticipation of the Fed increasing interest rate hikes some
time in the next several months. At the end of the annual period, the Fund had
approximately 31% of its total net assets invested in U.S. Treasuries, 48% in
GNMAs, 8% in government-related agency securities and 13% in cash and cash
equivalents.
--------
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 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.
Securities listed may or may not be a part of current Fund construction.
89
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 $13,587. The same amount invested in
securities mirroring the performance of the BofA Merrill Lynch U.S. Treasury
Master Index would be valued at $15,775.
[CHART]
U.S. Government BofA Merrill Lynch
Date Securities Fund Class A/#/ U.S. Treasury Master Index/*/*/
---------- -------------------------- -------------------------------
3/31/2005 $ 9,522 $10,000
4/30/2005 9,696 10,173
5/31/2005 9,779 10,296
6/30/2005 9,808 10,359
7/31/2005 9,702 10,222
8/31/2005 9,845 10,384
9/30/2005 9,720 10,247
10/31/2005 9,615 10,169
11/30/2005 9,659 10,218
12/31/2005 9,789 10,322
1/31/2006 9,782 10,293
2/28/2006 9,804 10,309
3/31/2006 9,682 10,203
4/30/2006 9,610 10,161
5/31/2006 9,591 10,166
6/30/2006 9,614 10,198
7/31/2006 9,746 10,322
8/31/2006 9,900 10,473
9/30/2006 9,989 10,569
10/31/2006 10,046 10,623
11/30/2006 10,157 10,734
12/31/2006 10,073 10,646
1/31/2007 10,044 10,629
2/28/2007 10,219 10,805
3/31/2007 10,190 10,799
4/30/2007 10,237 10,855
5/31/2007 10,129 10,761
6/30/2007 10,076 10,755
7/31/2007 10,213 10,934
8/31/2007 10,340 11,106
9/30/2007 10,395 11,166
10/31/2007 10,481 11,253
11/30/2007 10,754 11,595
12/31/2007 10,754 11,610
1/31/2008 10,970 11,902
2/29/2008 11,034 12,032
3/31/2008 11,088 12,119
4/30/2008 10,945 11,914
5/31/2008 10,790 11,770
6/30/2008 10,866 11,868
7/31/2008 10,874 11,916
8/31/2008 11,032 12,066
9/30/2008 11,119 12,145
10/31/2008 11,043 12,127
11/30/2008 11,607 12,779
12/31/2008 11,993 13,232
1/31/2009 11,662 12,825
2/28/2009 11,599 12,755
3/31/2009 11,835 13,043
4/30/2009 11,646 12,796
5/31/2009 11,529 12,666
6/30/2009 11,543 12,642
7/31/2009 11,625 12,692
8/31/2009 11,718 12,810
9/30/2009 11,824 12,911
10/31/2009 11,835 12,904
11/30/2009 11,926 13,086
12/31/2009 11,649 12,740
1/31/2010 11,788 12,942
2/28/2010 11,815 12,993
3/31/2010 11,746 12,882
4/30/2010 11,861 13,018
5/31/2010 12,075 13,242
6/30/2010 12,275 13,490
7/31/2010 12,302 13,581
8/31/2010 12,540 13,859
9/30/2010 12,444 13,859
10/31/2010 12,347 13,835
11/30/2010 12,303 13,740
12/31/2010 12,142 13,490
1/31/2011 12,050 13,490
2/28/2011 12,099 13,479
3/31/2011 12,113 13,471
4/30/2011 12,241 13,627
5/31/2011 12,409 13,842
6/30/2011 12,343 13,800
7/31/2011 12,533 14,052
8/31/2011 12,896 14,445
9/30/2011 13,150 14,677
10/31/2011 13,058 14,565
11/30/2011 13,172 14,672
12/31/2011 13,289 14,810
1/31/2012 13,299 14,877
2/29/2012 13,229 14,772
3/31/2012 13,123 14,619
4/30/2012 13,289 14,842
5/31/2012 13,483 15,114
6/30/2012 13,440 15,057
7/31/2012 13,567 15,218
8/31/2012 13,549 15,197
9/30/2012 13,505 15,145
10/31/2012 13,463 15,119
11/30/2012 13,498 15,206
12/31/2012 13,455 15,131
1/31/2013 13,305 14,987
2/28/2013 13,367 15,076
3/31/2013 13,364 15,092
4/30/2013 13,509 15,251
5/31/2013 13,154 14,944
6/30/2013 12,933 14,756
7/31/2013 12,847 14,727
8/31/2013 12,785 14,648
9/30/2013 12,830 14,760
10/31/2013 12,902 14,841
11/30/2013 12,823 14,777
12/31/2013 12,719 14,624
1/31/2014 12,914 14,857
2/28/2014 12,971 14,904
3/31/2014 12,948 14,862
4/30/2014 13,033 14,954
5/31/2014 13,133 15,118
6/30/2014 13,137 15,094
7/31/2014 13,128 15,071
8/31/2014 13,313 15,255
9/30/2014 13,234 15,158
10/31/2014 13,378 15,323
11/30/2014 13,451 15,464
12/31/2014 13,447 15,504
1/31/2015 13,592 15,951
2/28/2015 13,526 15,672
3/31/2015 13,587 15,775
U.S. GOVERNMENT SECURITIES FUND
Class A@ Class C
------------------ ------------------
Average Average
Annual Cumulative Annual Cumulative
Return Return+ Return Return+
----------------- ------- ---------- ------- ----------
1 Year Return -0.04% 4.94% 3.27% 4.27%
-------------------------------------------------------
5 Year Return 1.95% 15.68% 2.27% 11.87%
-------------------------------------------------------
10 Year Return 3.11% 42.69% 2.95% 33.75%
-------------------------------------------------------
Since Inception* 4.50% 170.10% 3.83% 81.23%
-------------------------------------------------------
+ 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 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.
@ As of the close of business on December 2, 2014, Class B shares of the Fund
were no longer offered to new or existing shareholders, except that
dividends and/or capital gain distributions received by a shareholder from
the Fund continued to be automatically reinvested in additional Class B
shares of the Fund, at the net asset value per share in effect on the
payable date, unless the shareholder had elected to receive them in cash or
automatically reinvest them in any retail fund distributed by AIG Capital
Services, Inc. As of the close of business on January 27, 2015, all
outstanding Class B shares of the Funds were converted to Class A shares.
For the 12-month period ending March 31, 2015, the SunAmerica U.S. Government
Securities Fund Class A returned -0.04%, compared to 6.15% 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 C: 1.00% CDSC. 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.
90
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
SUNAMERICA STRATEGIC BOND FUND
The SunAmerica Strategic Bond Fund Class A shares returned 2.70% (before
maximum sales charge) for the 12-month period ended March 31, 2015. The Fund
posted absolute gains but underperformed its benchmark, the Barclays U.S.
Aggregate Bond Index*, which returned 5.72% during the same annual period.
The Fund's underperformance relative to its benchmark can be attributed
primarily to positioning among risk asset classes, as credit spreads, or yield
differentials to U.S. Treasuries, widened in most spread, or non-U.S. Treasury,
sectors. For example, U.S. high yield bond spreads, as measured by the
option-adjusted spread of the Barclays U.S. Corporate High Yield Index*,
widened 108 basis points+ during the annual period, leading to an
underperformance of duration-matched U.S. Treasuries of 2.03%. Within
investment-grade corporate bonds, index spreads widened 22 basis points during
the annual period, leading to an underperformance of duration-matched U.S.
Treasuries of 0.78%. The Fund maintained overweight allocations to these two
sectors, as well as to emerging market debt, and thus the Fund underperformed
the Barclays U.S. Aggregate Bond Index for the 12 months ended March 31, 2015.
Within the securitized allocation, the Fund remained underweight to agency
mortgage-backed securities during the annual period based on the view that they
were priced fairly and that prepayment speeds could increase significantly.
Instead, we favored commercial mortgage-backed securities and asset-backed
securities. This positioning detracted from the Fund's relative results, as the
longer-dated nature of mortgage-backed securities drove that sector to
outperform.
Security selection, always a key and integral part of our investment process,
contributed positively overall to the Fund's returns relative to its benchmark
during the annual period. Notable positive contributions from security
selection within the investment grade corporate bond and emerging markets debt
sectors more than offset the detracting impact of security selection within the
high yield bond sector. The Fund's emphasis on financial issuers within the
investment-grade corporate bond sector more than offset the detracting impact
of an overweight to energy-related issuers within the high yield bond sector.
While the Fund remained U.S.-centric, portions of the Fund were allocated to
non-U.S. dollar denominated sovereign and emerging market bonds, which meant
country exposure had an impact on results during the annual period. Outside of
the U.S., positions in the sovereign debt of Peru, Poland and Hungary were
positive contributors to performance. However, positions in the sovereign debt
of Venezuela and the Philippines detracted.
The Fund began the annual period with approximate target allocations of 30% to
investment-grade corporate bonds, 5% to securitized products, 45% to high-yield
bonds, 15% to emerging markets debt and 5% to non-U.S. dollar denominated
sovereign debt. In April 2014, the target weight to high-yield bonds was
reduced to approximately 40%, and the target weight to investment-grade
corporate bonds was increased to approximately 35%, as we moved with the
intention to lower the Fund's overall exposure to risk. In October 2014, the
target weight to non-U.S. dollar denominated investment-grade bonds was reduced
to 0%. While this reduced the Fund's non-U.S. dollar currency exposure, the
proceeds were invested in non-U.S. dollar denominated credit issuers that we
felt represented strong total return opportunities. We were able to increase
the Fund's allocation to non-U.S. dollar denominated credits that, in our view,
offered value but hedged currency exposure back to the U.S. dollar. This
currency-hedged non-U.S. dollar denominated investment grade credit allocation
represented about 10% of total Fund value, with approximately 30% of total Fund
value in U.S. dollar investment grade credits, effectively making the Fund's
investment grade credit allocation equal 40%. In February 2015, the target
weight to emerging markets debt was increased to about 20%, and the target
weight to investment-grade corporate bonds was reduced to approximately 35%.
With these changes, the Fund ended the annual period on March 31, 2015 with
target allocations of 35% to investment-grade corporate bonds, 5% to
securitized products, 40% to high-yield bonds, 20% to emerging markets debt and
less than 1% to non-U.S. dollar denominated sovereign debt.
--------
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. BARCLAYS U.S. CORPORATE HIGH YIELD INDEX is composed of
fixed-rate, publicly issued, non-investment grade debt. Indices are not
managed and an investor cannot invest directly into an index.
+A basis point is 1/100/th/ of a percentage point.
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 Strategic Bond Fund Class A shares
would have increased to $16,628. The same amount invested in securities
mirroring the performance of the Barclays U.S. Aggregate Bond Index would be
valued at $16,175.
[CHART]
Strategic Barclays
Date Bond Fund Class A/#/ U.S. Aggregate Bond Index/*/*/
--------- --------------------- --------------------------------
3/31/2005 $ 9,534 $10,000
4/30/2005 9,577 10,135
5/31/2005 9,675 10,245
6/30/2005 9,799 10,301
7/31/2005 9,840 10,207
8/31/2005 9,991 10,338
9/30/2005 9,977 10,231
10/31/2005 9,850 10,150
11/30/2005 9,921 10,195
12/31/2005 10,054 10,292
1/31/2006 10,191 10,293
2/28/2006 10,258 10,327
3/31/2006 10,187 10,226
4/30/2006 10,259 10,207
5/31/2006 10,130 10,196
6/30/2006 10,114 10,218
7/31/2006 10,334 10,356
8/31/2006 10,498 10,515
9/30/2006 10,542 10,607
10/31/2006 10,673 10,677
11/30/2006 10,834 10,801
12/31/2006 10,851 10,738
1/31/2007 10,834 10,734
2/28/2007 10,964 10,899
3/31/2007 11,008 10,900
4/30/2007 11,113 10,959
5/31/2007 11,097 10,875
6/30/2007 10,989 10,843
7/31/2007 10,851 10,934
8/31/2007 10,898 11,068
9/30/2007 11,157 11,152
10/31/2007 11,337 11,252
11/30/2007 11,228 11,454
12/31/2007 11,275 11,486
1/31/2008 11,261 11,679
2/29/2008 11,243 11,696
3/31/2008 11,261 11,735
4/30/2008 11,409 11,711
5/31/2008 11,397 11,625
6/30/2008 11,255 11,616
7/31/2008 11,180 11,606
8/31/2008 11,173 11,716
9/30/2008 10,569 11,559
10/31/2008 9,329 11,286
11/30/2008 9,150 11,654
12/31/2008 9,513 12,088
1/31/2009 9,605 11,982
2/28/2009 9,482 11,936
3/31/2009 9,609 12,102
4/30/2009 10,124 12,160
5/31/2009 10,576 12,248
6/30/2009 10,780 12,318
7/31/2009 11,237 12,517
8/31/2009 11,407 12,646
9/30/2009 11,830 12,779
10/31/2009 11,926 12,842
11/30/2009 12,092 13,009
12/31/2009 12,132 12,805
1/31/2010 12,227 13,001
2/28/2010 12,277 13,049
3/31/2010 12,521 13,033
4/30/2010 12,728 13,169
5/31/2010 12,369 13,280
6/30/2010 12,581 13,488
7/31/2010 12,988 13,632
8/31/2010 13,130 13,807
9/30/2010 13,385 13,822
10/31/2010 13,642 13,871
11/30/2010 13,391 13,792
12/31/2010 13,546 13,643
1/31/2011 13,683 13,659
2/28/2011 13,813 13,693
3/31/2011 13,869 13,701
4/30/2011 14,124 13,874
5/31/2011 14,182 14,056
6/30/2011 14,036 14,014
7/31/2011 14,257 14,237
8/31/2011 13,951 14,445
9/30/2011 13,563 14,550
10/31/2011 14,036 14,565
11/30/2011 13,806 14,553
12/31/2011 14,028 14,713
1/31/2012 14,377 14,842
2/29/2012 14,597 14,839
3/31/2012 14,562 14,757
4/30/2012 14,737 14,921
5/31/2012 14,661 15,056
6/30/2012 14,792 15,062
7/31/2012 15,182 15,270
8/31/2012 15,273 15,280
9/30/2012 15,450 15,300
10/31/2012 15,543 15,331
11/30/2012 15,635 15,355
12/31/2012 15,720 15,333
1/31/2013 15,726 15,226
2/28/2013 15,771 15,302
3/31/2013 15,820 15,314
4/30/2013 16,132 15,469
5/31/2013 15,786 15,193
6/30/2013 15,258 14,958
7/31/2013 15,398 14,979
8/31/2013 15,225 14,902
9/30/2013 15,453 15,043
10/31/2013 15,729 15,165
11/30/2013 15,691 15,108
12/31/2013 15,770 15,023
1/31/2014 15,823 15,245
2/28/2014 16,095 15,326
3/31/2014 16,190 15,299
4/30/2014 16,334 15,429
5/31/2014 16,572 15,604
6/30/2014 16,671 15,612
7/31/2014 16,541 15,573
8/31/2014 16,735 15,745
9/30/2014 16,414 15,638
10/31/2014 16,514 15,792
11/30/2014 16,470 15,904
12/31/2014 16,287 15,919
1/31/2015 16,479 16,253
2/28/2015 16,623 16,100
3/31/2015 16,628 16,175
STRATEGIC BOND FUND
Class A Class B Class C Class W
------------------ ------------------ ------------------ ------------------
Average Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
Return Return+ Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -2.28% 2.70% -1.94% 2.01% 1.06% 2.05% N/A N/A
---------------------------------------------------------------------------------------------
5 Year Return 4.79% 32.80% 4.87% 28.83% 5.16% 28.58% N/A N/A
---------------------------------------------------------------------------------------------
10 Year Return 5.22% 74.40% 5.16% 65.34% 5.01% 63.01% N/A N/A
---------------------------------------------------------------------------------------------
Since Inception* 6.39% 295.74% 6.73% 292.76% 6.33% 262.65% N/A 0.99%
---------------------------------------------------------------------------------------------
+ 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; Class
W: 01/29/15.
# 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, 2015, the SunAmerica Strategic Bond
Fund Class A returned -2.28%, compared to 5.72% 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.
92
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
SUNAMERICA FLEXIBLE CREDIT FUND
The SunAmerica Flexible Credit Fund Class A shares returned 1.06% (before
maximum sales charge) for the 12-month period ended March 31, 2015. The Fund
posted absolute gains but underperformed the Flexible Credit Blended Benchmark
- composed 50% of the Barclays U.S. High-Yield 2% Issuer Capped Index* and 50%
of the S&P/LSTA Leveraged Loan Index* - which returned 2.28% during the same
period. The Fund outperformed the Bank of America Merrill Lynch USD 3-Month
LIBOR Constant Maturity Index*, a broad measure of market performance, which
returned 0.23% for the same annual period.
The Fund operated as the SunAmerica High Yield Bond Fund from the start of the
annual period on April 1, 2014 through September 30, 2014, and Wellington
Management served as the Fund's subadviser. During this portion of the annual
period, the Fund's Class A shares returned -0.12% (before maximum sales charge)
as compared to a return of 0.26% for the Fund's benchmark, the Citigroup High
Yield Market Index*. Below, Wellington Management discusses the Fund's
performance from April 1, 2014 through September 30, 2014 (the "Reporting
Period").
Amidst a somewhat volatile macro backdrop, the Fund's quality positioning
overall detracted from its relative results during the Reporting Period. Early
in the Reporting Period, there was minimal dispersion between performance of
higher and lower quality bonds. However, there was subsequently a heightening
of risk aversion within the market, and higher quality bonds performed better
than their lower quality counterparts. The Fund's underweight positioning in
bonds rated BB hurt the Fund's relative performance, as BB-rated bonds
outperformed during the Reporting Period.
Sector allocation contributed positively, albeit modestly, to the Fund's
results relative to its benchmark index during the Reporting Period. An
underweight allocation to the gaming industry contributed most positively to
the Fund's relative performance. We maintained a cautious view on the industry
given increases in gaming capacity while gaming revenues were declining. An
overweight allocation to the technology & related sectors also helped. Only
partially offsetting these contributors was the detracting impact of the Fund's
overweight allocation to the wireless industry. We had become more positive on
the wireless industry, as we believed recent industry consolidation in the U.S.
would improve industry structure and economics. An underweight allocation to
the utilities sector and having a residual cash position in a rising market,
even if only a modestly rising market, also hurt.
Security selection was the strongest positive driver of performance during the
Reporting Period. Weak security selection in the supermarkets and energy
industries was more than offset by effective security selection in the
financial services, metals & mining, wireless, and food & beverage sectors. A
lack of exposure to casino resort operator Caesars Entertainment, which
significantly lagged the Citigroup High Yield Market Index, along with
overweight positions in television entertainment network owner and operator ION
Media Networks, all-natural beverage producer Le-Nature, investment manager
Nuveen Investments and diversified bank Royal Bank of Scotland Group, which
each outpaced the Citigroup High Yield Market Index, contributed positively to
relative results. Among the biggest individual detractors from the Fund's
relative returns during the Reporting Period were holdings in convenience food
and military rations manufacturer and distributor The Wornick Company, imagery
and other digital content creator and distributor Getty Images, offshore
drilling rig provider Paragon Offshore, casino operator Affinity Gaming and
title lending business TitleMax.
Effective October 1, 2014, the Fund changed its name to the SunAmerica Flexible
Credit Fund and certain changes were made to the Fund's investment goal,
principal investment strategy and principal investment techniques. In addition,
on this same date, Newfleet Asset Management ("Newfleet") assumed portfolio
management responsibility for the Fund. From October 1, 2014 through March 31,
2015, the Fund's Class A shares returned 1.47% (before maximum sales charge) as
compared to a return of 1.56% for the Flexible Credit Blended Benchmark. Below,
Newfleet discusses the Fund's performance from October 1, 2014 through March
31, 2015 (the "Reporting Period").
The newly constructed SunAmerica Flexible Credit Fund primarily invests in
credit instruments that are U.S. and non-U.S. below investment grade,
high-yield bonds and floating rate loans. Since we assumed management of the
Fund on October 1, 2014 through March 31, 2015, its allocation between
high-yield bonds and floating rate loans has fluctuated between 70% high-yield
bonds/30% floating rate loans and 55% high-yield bonds/45% floating rate loans.
We allocated more toward high-yield bonds throughout the Reporting Period on
our belief that the market environment was more conducive to that sector given
the Federal Reserve (the "Fed") still had a stated hold on raising interest
rates. Further, our qualitative and quantitative analytic screening process
indicated high-yield bonds had a better total return profile given then-current
market conditions. As market conditions and relative valuations between the two
sectors shifted, we proactively adjusted the allocation between high-yield
bonds and floating rate loans accordingly.
93
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
From an industry perspective, allocation detracted, albeit modestly, from
relative results. An overweight allocation to pharmaceuticals hurt performance
as did underweight allocations to the packaging, wireless, auto, electric
utilities, banking and finance companies industries. Partially offsetting these
detractors, however, was the positive contributions of overweight allocations
to the cable & satellite, media & entertainment, lodging, consumer products,
health care and technology industries and underweight allocations to the
independent energy and oil field services industries.
Security selection was the strongest positive driver of performance during the
Reporting Period. Weak issue selection in electric utilities and financials was
more than offset by effective individual security selection in the health care
and technology industries. Avoiding several of the most troubled credits,
especially in the energy and metals & mining industries, also boosted relative
results. Exposure to hospital operator HCA Holdings, semiconductor device
provider Freescale Semiconductor and health care facilities operator Community
Health Systems contributed positively to relative results. Among the biggest
individual detractors from the Fund's relative returns during the Reporting
Period were holdings in oil and gas exploration and production company Halcon
Resources, electric utilities company Energy Future Holdings (formerly TXU) and
title lending business Titlemax.
During the Reporting Period, we sought to upgrade the credit quality of the
Fund's portfolio, as we entered the later stages of the current credit cycle.
Defaults were still low, the maturity wall was pushed out, and fundamentals, in
our view, were still good. However, there were signs on the horizon that
investors may need to be increasingly focused on individual issue selection. We
were also cognizant of the reduced liquidity conditions in the marketplace.
During the Reporting Period, we established new Fund positions in specialty
pharmaceuticals company Valeant Pharmaceuticals International and midstream
energy assets operator Crestwood Midstream Partners LP. We sold the Fund's
positions in oil and gas exploration and production company Tullow Oil and
satellite services company Intelsat, each based on fundamental analysis.
--------
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 but may be subject to greater market
fluctuations and risk of default or loss of income and principal than
securities in higher rating categories. High-yield debt instruments carry a
greater default risk, may be more volatile, less liquid, more difficult to
value and more susceptible to adverse economic conditions or investor
perceptions than other debt instruments. Investments in floating rate loans
involve certain risks, including, among others risks of nonpayment of principal
and interest; collateral impairment; non-diversification and borrower industry
concentration; and lack of full liquidity.
*The BARCLAYS U.S. HIGH YIELD 2% ISSUER CAPPED INDEX is a component of the U.S.
Corporate High-Yield Bond Index, which covers the universe of fixed-rate,
non-investment grade corporate debt of issuers in non-emerging market
countries. It is not market capitalization-weighted and each issuer is capped
at 2% of the index. The S&P/LSTA LEVERAGED LOAN INDEX (LLI) reflects the
market-weighted performance of U.S. dollar-denominated institutional leveraged
loan portfolios. The LLI is the only domestic leveraged loan index that
utilizes real-time market weightings spreads and interest payments. The BANK
OF AMERICA MERRILL LYNCH USD 3-MONTH LIBOR CONSTANT MATURITY INDEX tracks the
performance of a synthetic asset paying LIBOR to a stated maturity. 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.
94
SUNAMERICA INCOME FUNDS
COMPARISONS: PORTFOLIOS VS. INDICES -- (UNAUDITED) (CONTINUED)
Over the past ten years, $10,000 invested in Flexible Credit Fund Class A
shares would have increased to $15,600. The same amount invested in securities
mirroring the performance of the Citigroup High Yield Market Index, the Blended
Benchmark (50% Barclays U.S. High-Yield 2% Issuer Capped Index/50% S&P/LSTA
Leveraged Loan Index), the Barclays U.S. High-Yield 2% Issuer Capped Index, the
S&P/LSTA Leveraged Loan Index and the Bank of America Merrill Lynch USD 3-Month
LIBOR Constant Maturity Index would be valued at $21,077, $18,949, $21,940,
$16,258 and $12,143, respectively.
[CHART]
Blended Benchmark
(50% Barclays U.S.
High-Yield 2% S&P/LSTA
Issuer Capped Leveraged
Citigroup Index/50% Barclays U.S. Loan Bank of America
Flexible High Yield S&P/LSTA High-Yield 2% Index Merrill Lynch USD
Credit Fund Market Leveraged Issuer /DAGGER/ 3-Month LIBOR Constant
Date Class A/#/ Index/*/*/ Loan Index) Capped@ /DAGGER/ Maturity Index
---------- ----------- ----------- ------------------ ------------- ---------- -------------------------
3/31/2005 $ 9,527 $10,000 $10,000 $10,000 $10,000 $10,000
4/30/2005 9,370 9,862 9,948 9,903 9,993 10,023
5/31/2005 9,556 10,065 10,039 10,078 9,999 10,049
6/30/2005 9,791 10,234 10,162 10,260 10,063 10,073
7/31/2005 10,048 10,382 10,281 10,422 10,140 10,097
8/31/2005 10,259 10,425 10,327 10,454 10,201 10,128
9/30/2005 10,186 10,321 10,302 10,361 10,242 10,156
10/31/2005 10,052 10,244 10,272 10,268 10,273 10,187
11/30/2005 10,165 10,270 10,331 10,348 10,312 10,219
12/31/2005 10,303 10,361 10,406 10,443 10,366 10,256
1/31/2006 10,527 10,524 10,504 10,567 10,438 10,292
2/28/2006 10,553 10,577 10,588 10,670 10,504 10,326
3/31/2006 10,633 10,653 10,642 10,715 10,568 10,365
4/30/2006 10,783 10,711 10,702 10,782 10,619 10,402
5/31/2006 10,772 10,704 10,708 10,768 10,646 10,448
6/30/2006 10,737 10,658 10,693 10,708 10,676 10,488
7/31/2006 10,869 10,773 10,769 10,799 10,736 10,538
8/31/2006 11,097 10,953 10,882 10,959 10,803 10,588
9/30/2006 11,228 11,104 10,986 11,110 10,861 10,634
10/31/2006 11,386 11,263 11,098 11,262 10,933 10,685
11/30/2006 11,472 11,451 11,215 11,440 10,991 10,732
12/31/2006 11,607 11,589 11,317 11,567 11,069 10,778
1/31/2007 11,666 11,698 11,431 11,699 11,165 10,831
2/28/2007 11,794 11,860 11,554 11,870 11,242 10,875
3/31/2007 11,804 11,878 11,587 11,890 11,287 10,923
4/30/2007 11,961 12,039 11,697 12,045 11,354 10,973
5/31/2007 11,998 12,129 11,773 12,129 11,423 11,023
6/30/2007 11,832 11,897 11,679 11,909 11,449 11,070
7/31/2007 11,415 11,508 11,281 11,495 11,065 11,122
8/31/2007 11,526 11,648 11,378 11,666 11,091 11,167
9/30/2007 11,810 11,955 11,631 11,956 11,308 11,225
10/31/2007 11,906 12,032 11,725 12,037 11,416 11,287
11/30/2007 11,684 11,766 11,521 11,784 11,257 11,326
12/31/2007 11,712 11,802 11,560 11,829 11,292 11,386
1/31/2008 11,274 11,653 11,285 11,648 10,928 11,470
2/29/2008 11,069 11,502 11,074 11,504 10,654 11,500
3/31/2008 11,105 11,453 11,056 11,477 10,644 11,537
4/30/2008 11,541 11,958 11,488 11,949 11,038 11,560
5/31/2008 11,633 12,021 11,566 11,997 11,142 11,590
6/30/2008 11,508 11,625 11,437 11,701 11,170 11,615
7/31/2008 11,223 11,451 11,322 11,554 11,085 11,642
8/31/2008 11,211 11,481 11,332 11,590 11,070 11,668
9/30/2008 10,314 10,561 10,548 10,700 10,389 11,664
10/31/2008 8,441 8,941 9,003 8,978 9,016 11,734
11/30/2008 7,413 8,069 8,225 8,190 8,249 11,779
12/31/2008 7,437 8,744 8,393 8,767 8,006 11,822
1/31/2009 7,676 9,217 8,983 9,351 8,599 11,841
2/28/2009 7,501 8,869 8,897 9,098 8,666 11,850
3/31/2009 7,478 9,176 9,083 9,347 8,791 11,865
4/30/2009 8,169 10,290 10,013 10,449 9,555 11,881
5/31/2009 8,724 10,910 10,655 11,150 10,138 11,900
6/30/2009 8,949 11,245 11,045 11,478 10,583 11,908
7/31/2009 9,484 11,934 11,638 12,167 11,084 11,917
8/31/2009 9,533 12,091 11,881 12,401 11,335 11,925
9/30/2009 9,982 12,788 12,411 13,109 11,698 11,930
10/31/2009 10,185 12,988 12,557 13,346 11,762 11,933
11/30/2009 10,291 13,128 12,635 13,477 11,793 11,937
12/31/2009 10,615 13,570 13,028 13,919 12,139 11,939
1/31/2010 10,724 13,721 13,246 14,101 12,387 11,942
2/28/2010 10,760 13,714 13,274 14,119 12,423 11,944
3/31/2010 11,100 14,118 13,624 14,547 12,702 11,946
4/30/2010 11,373 14,435 13,887 14,894 12,889 11,947
5/31/2010 10,883 13,960 13,482 14,361 12,599 11,946
6/30/2010 10,989 14,129 13,533 14,538 12,540 11,952
7/31/2010 11,371 14,613 13,875 15,049 12,733 11,959
8/31/2010 11,381 14,592 13,901 15,054 12,776 11,968
9/30/2010 11,730 15,024 14,204 15,500 12,955 11,971
10/31/2010 11,978 15,400 14,497 15,896 13,158 11,974
11/30/2010 11,840 15,226 14,440 15,714 13,205 11,976
12/31/2010 12,065 15,514 14,660 15,998 13,369 11,979
1/31/2011 12,312 15,865 14,967 16,352 13,632 11,982
2/28/2011 12,483 16,074 15,100 16,567 13,695 11,985
3/31/2011 12,552 16,135 15,123 16,621 13,693 11,989
4/30/2011 12,691 16,364 15,288 16,878 13,781 11,992
5/31/2011 12,762 16,436 15,319 16,961 13,768 11,996
6/30/2011 12,611 16,285 15,216 16,796 13,717 11,998
7/31/2011 12,753 16,484 15,315 16,990 13,737 12,000
8/31/2011 12,125 15,845 14,670 16,307 13,132 12,001
9/30/2011 11,821 15,382 14,460 15,770 13,189 12,004
10/31/2011 12,406 16,278 15,103 16,717 13,570 12,006
11/30/2011 12,207 15,932 14,903 16,356 13,503 12,008
12/31/2011 12,513 16,369 15,140 16,792 13,572 12,012
1/31/2012 12,842 16,841 15,535 17,301 13,868 12,019
2/29/2012 13,093 17,226 15,779 17,713 13,975 12,026
3/31/2012 13,081 17,216 15,830 17,690 14,083 12,031
4/30/2012 13,221 17,387 15,970 17,872 14,187 12,036
5/31/2012 13,054 17,168 15,809 17,634 14,091 12,041
6/30/2012 13,309 17,533 16,031 18,006 14,188 12,045
7/31/2012 13,530 17,847 16,276 18,349 14,352 12,051
8/31/2012 13,634 18,049 16,463 18,564 14,514 12,056
9/30/2012 13,816 18,291 16,669 18,822 14,675 12,061
10/31/2012 13,844 18,439 16,768 18,987 14,721 12,066
11/30/2012 13,988 18,558 16,861 19,139 14,767 12,070
12/31/2012 14,178 18,853 17,060 19,441 14,883 12,073
1/31/2013 14,326 19,094 17,266 19,702 15,041 12,076
2/28/2013 14,346 19,167 17,327 19,802 15,073 12,079
3/31/2013 14,575 19,386 17,487 20,003 15,197 12,082
4/30/2013 14,762 19,750 17,697 20,365 15,288 12,086
5/31/2013 14,625 19,646 17,663 20,247 15,316 12,088
6/30/2013 14,276 19,139 17,379 19,716 15,226 12,091
7/31/2013 14,547 19,499 17,630 20,090 15,376 12,094
8/31/2013 14,403 19,366 17,573 19,968 15,370 12,097
9/30/2013 14,547 19,540 17,681 20,166 15,408 12,100
10/31/2013 14,862 20,024 17,967 20,670 15,520 12,103
11/30/2013 14,883 20,104 18,057 20,775 15,597 12,105
12/31/2013 14,946 20,213 18,148 20,887 15,670 12,108
1/31/2014 15,053 20,359 18,271 21,034 15,772 12,110
2/28/2014 15,369 20,759 18,471 21,458 15,800 12,113
3/31/2014 15,391 20,816 18,526 21,509 15,857 12,115
4/30/2014 15,497 20,946 18,595 21,645 15,875 12,118
5/31/2014 15,604 21,131 18,745 21,843 15,985 12,120
6/30/2014 15,752 21,299 18,877 22,026 16,077 12,122
7/31/2014 15,469 21,009 18,749 21,734 16,072 12,124
8/31/2014 15,707 21,331 18,913 22,079 16,097 12,127
9/30/2014 15,374 20,870 18,658 21,616 16,001 12,129
10/31/2014 15,611 21,108 18,793 21,872 16,042 12,132
11/30/2014 15,490 20,933 18,771 21,714 16,122 12,134
12/31/2014 15,268 20,584 18,518 21,400 15,920 12,136
1/31/2015 15,320 20,675 18,610 21,541 15,973 12,139
2/28/2015 15,636 21,209 18,965 22,060 16,198 12,141
3/31/2015 15,600 21,077 18,949 21,940 16,258 12,143
FLEXIBLE CREDIT FUND
--------------------------------------------------------------------------
Class A## Class C Class W
------------------ ------------------ ------------------
Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative
Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -3.76% 1.06% -0.53% 0.43% N/A N/A
--------------------------------------------------------------------------
5 Year Return 5.99% 40.54% 6.35% 36.04% N/A N/A
--------------------------------------------------------------------------
10 Year Return 4.55% 63.74% 4.37% 53.31% N/A N/A
--------------------------------------------------------------------------
Since Inception* 4.95% 132.06% 4.86% 100.07% N/A 1.57%
--------------------------------------------------------------------------
+ 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 C: 08/21/00; Class W: 10/01/14.
# 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.
## As of the close of business on December 2, 2014, Class B shares of the Fund
were no longer offered to new or existing shareholders, except that
dividends and/or capital gain distributions received by a shareholder from
the Fund continued to be automatically reinvested in additional Class B
shares of the Fund, at the net asset value per share in effect on the
payable date, unless the shareholder had elected to receive them in cash or
automatically reinvest them in any retail fund distributed by AIG Capital
Services, Inc. As of the close of business on January 27, 2015, all
outstanding Class B shares of the Funds were converted to Class A shares.
For the 12 month period ending March 31, 2015, the SunAmerica Flexible Credit
Fund Class A returned -3.76%, compared to 2.28% for the Blended Benchmark (50%
Barclays U.S. High-Yield 2% Issuer Capped Index/50% S&P/LSTA Leveraged Loan
Index), 2.00% for the Barclays U.S. High-Yield 2% Issuer Capped Index, 2.53%
for the S&P/LSTA Leveraged Loan Index and 0.23% for the Bank of America Merrill
Lynch USD 3-Month LIBOR Constant Maturity Index. (The performance data 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 C: 1.00% CDSC. 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.
@ The Barclays U.S. High-Yield 2% Issuer Capped Index is the 2% issuer capped
component of the U.S. Corporate High Yield Index, which represents the
performance of fixed-income securities having a maximum quality rating of
Ba1, a minimum amount outstanding of $150 million, and at least one year to
maturity.
++ The S&P/LSTA Leveraged Loan Index is a daily total return index that uses
LSTA/LPC Mark-to-Market Pricing to calculate market value change. On a
real-time basis, the S&P/LSTA Leveraged Loan Index tracks the current
outstanding balance and spread over LIBOR for fully funded term loans. The
facilities included in the S&P/LSTA Leveraged Loan Index represent a broad
cross section of leveraged loans syndicated in the United States, including
dollar-denominated loans to overseas issuers. The S&P/LSTA Leveraged Loan
Index is unmanaged and not available for direct investment.
95
[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.
OFFICERS determine how to vote Securities and
John T. Genoy, President proxies relating to Exchange Commission
James Nichols, Vice secu-rities held in a for its first and
President Fund's portfolio, third fiscal quarters
Katherine Stoner, Vice which is available in on Form N-Q. The
President and Chief the Trust's Statement Trust's Forms N-Q are
Compliance Officer of Additional available on the
Gregory N. Bressler, Information, may be U.S. Securities and
Secretary ob-tained without Exchange Commis-sion
Nori L. Gabert, Vice charge upon request, website at
President and by calling (800) www.sec.gov. You can
Assistant Secretary 858-8850. The also review and obtain
Kathleen Fuentes, Chief in-formation is also copies of the Forms
Legal Officer and available from the N-Q at the U.S.
Assistant Secretary EDGAR database on the Securities and
Gregory R. Kingston, U.S. Secu-rities and Exchange Commission
Treasurer Exchange Commission's Public Refer-ence Room
Donna McManus, Vice website at in Washington DC
President and http://www.sec.gov. (information on the
Assistant Treasurer DELIVERY OF operation of the
Shawn Parry, Vice SHAREHOLDER DOCUMENTS Public Reference Room
President and The Funds have adopted may be ob-tained by
Assistant Treasurer a policy that allows calling
Matthew J. Hackethal, them to send only one 1-800-SEC-0330).
Anti-Money Laundering copy of a Fund's PROXY VOTING RECORD ON
Compliance Officer prospectus, proxy SUNAMERICA INCOME FUNDS
INVESTMENT ADVISER material, annual Information regarding
SunAmerica Asset report and semi-annual how the Funds voted
Management, LLC report (the proxies relating to
Harborside Financial "shareholder securities held in the
Center documents") to Funds during the most
3200 Plaza 5 shareholders with recent twelve month
Jersey City, NJ multiple accounts period ended June 30
07311-4992 residing at the same is available, once
DISTRIBUTOR "household." This filed with the U.S.
AIG Capital Services, practice is called Securities and
Inc. householding and Exchange Commission,
Harborside Financial reduces Fund expenses, without charge, upon
Center which benefits you and request, by calling
3200 Plaza 5 other shareholders. (800) 858-8850 or on
Jersey City, NJ Unless the Funds the U.S. Securities
07311-4992 receive instructions and Exchange
SHAREHOLDER SERVICING to the con-trary, you Commission's website
AGENT will only receive one at http://www.sec.gov.
SunAmerica Fund copy of the This report is
Services, Inc. shareholder documents. submitted solely for
Harborside Financial The Funds will the general
Center continue to household information of
3200 Plaza 5 the share-holder shareholders of the
Jersey City, NJ documents Funds. Distribution of
07311-4992 indefinitely, until we this report to persons
CUSTODIAN AND TRANSFER are instructed other than
AGENT otherwise. If you do shareholders of the
State Street Bank and not wish to Funds is authorized
Trust Company participate in only in con-nection
P.O. Box 5607 householding please with a currently
Boston, MA 02110 contact Shareholder effective pro-spectus,
Services at (800) setting forth details
858-8850 ext. 6010 or of the Funds, which
send a written request must precede or
with your name, the accom-pany this report.
name of your fund(s)
and your account
number(s) to
SunAmerica Mutual
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:
AIG 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 - 3/15
[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 2015, 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:
2014 2015
(a) Audit Fees ....................$ 171,504 $ 140,171
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 57,040 $ 54,837
(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:
2014 2015
(b) Audit-Related Fees ............$ 0 $ 0
(c) Tax Fees ......................$ 0 $ 0
(d) All Other Fees ................$ 0 $ 17,640
(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 2014 and 2015 were $103,022 and $91,502, 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 8, 2015
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 8, 2015
By: /s/ Gregory R. Kingston
-----------------------
Gregory R. Kingston
Treasurer
Date: June 8, 2015