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 811-04801
---------------------------------------------
SunAmerica Equity 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: September 30
--------------------------
Date of reporting period: March 31, 2015
-------------------------
Item 1. Reports to Stockholders
[PHOTO]
SEMI-ANNUAL REPORT 2015
SUNAMERICA
Equity Funds
MARCH 31, 2015 SEMI-ANNUAL REPORT
SUNAMERICA EQUITY FUNDS
SUNAMERICA INTERNATIONAL DIVIDEND STRATEGY FUND (SIEAX)
SUNAMERICA JAPAN FUND (SAESX)
TABLE OF CONTENTS
SHAREHOLDER LETTER.......................................... 2
EXPENSE EXAMPLE............................................. 4
STATEMENT OF ASSETS AND LIABILITIES......................... 6
STATEMENT OF OPERATIONS..................................... 8
STATEMENT OF CHANGES IN NET ASSETS.......................... 9
FINANCIAL HIGHLIGHTS........................................ 10
PORTFOLIO OF INVESTMENTS.................................... 12
NOTES TO FINANCIAL STATEMENTS............................... 18
SHAREHOLDER LETTER -- (UNAUDITED)
Dear Shareholders,
We are pleased to present this semi-annual update for the SunAmerica Equity
Funds for the six months ended March 31, 2015. It was a period wherein
international equity performance was driven largely by economic conditions and
monetary policies of global central banks, as well as by concerns surrounding
geopolitical events.
As the semi-annual period began in October 2014, the nearly six-year-old global
stock rally marched on. In the fourth quarter of 2014, global equities advanced
for a tenth consecutive quarter. There was no shortage of headlines for
investors to worry about - Ebola fears escalated; Japan's recession deepened;
Europe's economy remained near stalling speed; oil prices plunged; and Chinese
manufacturing data disappointed. The U.S. economy remained a bright spot in the
global landscape, as it was reported that it grew during the third quarter of
2014 at its fastest pace in more than a decade.+ Accommodative global monetary
policy remained a central theme. The Bank of Japan (BoJ) expanded its
quantitative easing policy in late October 2014. The People's Bank of China
(PBOC) surprised markets in November 2014 with its first rate cut in two years,
and the European Central Bank (ECB) continued to provide hints that sovereign
quantitative easing may begin early in 2015. The end of the U.S. Federal
Reserve's (the "Fed's") quantitative easing asset purchases in October 2014 was
ultimately a non-event, as the move was widely expected. Japanese equities led
the export-driven economies of the Pacific Basin higher in local currency
terms. However, given the yen's 9.3% decline versus the U.S. dollar during the
fourth quarter of 2014, Japan's equity market fell in U.S. dollar terms.
Global equities continued to surge ahead in the first quarter of 2015, rising
for the eleventh consecutive quarter.++ Upon reaching the bull market's sixth
anniversary, the MSCI All Country World Index (ACWI)* ended March 2015 up
189.5% from its closing low on March 9, 2009. Europe proved the bright spot
during 2015's first quarter due to further accommodative monetary policy and
encouraging economic data, including positive trends in manufacturing, exports
and economic sentiment. Investors responded favorably to the ECB's announcement
of a (Euro)1.14 trillion open-ended sovereign quantitative easing program to
combat record low inflation and stimulate growth in Europe. Performance in the
Japanese equity market was strong, posting double-digit gains in U.S. dollar
terms. Japan's trade deficit shrank to 425 billion yen in February 2015, well
below the 987 billion yen forecast, as exports jumped to a better than expected
2.4%, while lower oil prices helped reduce the cost of imports. The Japanese
economy emerged from recession but it was reported in the first quarter of 2015
that it only expanded at a 2.2% annualized pace in the fourth quarter, below
consensus estimates. Positive factors overall outweighed the concerns that
still hung over the markets, including disappointing manufacturing data from
China and Japan. Also, fears about Greece's future in the European Union
resurfaced amid uncertainty about the disbursement of more bailout aid. U.S.
stocks lagged the broader global equity market as some market participants
voiced concerns about potential headwinds such as valuations, near-term Fed
tightening and the strong U.S. dollar's impact on exports.
A major factor impacting returns for U.S. investors in international equities
during the semi-annual period was the surging U.S. dollar against most
currencies, as the U.S. dollar was supported by diverging monetary policy and
economic performance. Commodity currencies declined, with currencies of oil
exporters taking a particularly large hit. For example, for the six months
ended March 31, 2015, the Australian dollar declined 12.7% versus the U.S.
dollar; the Canadian dollar, declined 11.8%; the Russian ruble declined 32.0%.
Within emerging markets, countries with large current-account deficits and
shaky policy frameworks also depreciated. For instance, the Brazilian real fell
23.4% versus the U.S. dollar. The Japanese yen fell 8.5% versus the U.S.
dollar; the euro, declined 15.0%; the British pound fell 8.4%.
Against this backdrop, international equities, as measured by the MSCI ACWI
ex-U.S. (Net)*, posted a return of -0.51% in U.S. dollar terms for the
six-month period ended March 31, 2015. Having achieved double-digit gains in
local currency terms, Japanese equities, as measured by the MSCI Japan Index
(Net)*, returned 7.54% in U.S. dollar terms during the same period. To compare,
U.S. equities, as measured by the S&P 500(R) Index*, returned 5.93%, also for
the same period.
2
On the following pages, you will find detailed financial statements and
portfolio information for each of the SunAmerica Equity Funds during the
semi-annual period.
We thank you for being a part of the SunAmerica Equity 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 EQUITY FUNDS INVESTMENT PROFESSIONALS
Timothy Pettee Jun Oh Timothy Campion
Andrew Sheridan Kara Murphy Jane Bayar
--------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
+Market Update Fourth Quarter 2014, Wellington Management
++Market Update First Quarter 2015, Wellington Management
*The MSCI ALL COUNTRY WORLD INDEX (ACWI) is a free float-adjusted market
capitalization-weighted index designed to provide a broad measure of equity
market performance throughout the world, comprised of stocks from 46 different
countries, including 23 developed and 23 emerging markets. The MSCI ACWI
EX-U.S. (NET) is a free float-adjusted market capitalization-weighted index
designed to measure the equity market performance of 47 global developed and
emerging markets, excluding the U.S. Net total return indices reinvest
dividends after the deduction of withholding taxes, using (for international
indices) a tax rate applicable to non-resident institutional investors who do
not benefit from double taxation treaties. The MSCI JAPAN INDEX (NET) is a
free-float adjusted market capitalization weighted index that is designed to
track the equity market performance of Japanese securities listed on Tokyo
Stock Exchange, Osaka Stock Exchange, JASDAQ and Nagoya Stock Exchange. The
S&P 500 INDEX is Standard & Poor's 500 Composite Stock Price Index, a widely
recognized, unmanaged index of U.S. common stock prices. Indices are not
managed and an investor cannot invest directly in an index.
3
SUNAMERICA EQUITY 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 Equity 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
Period Ended March 31, 2015" to estimate the expenses you paid on your account
during this period. For shareholder accounts in classes other than Class I, the
"Expenses Paid During the Period Ended March 31, 2015" column and the
"Annualized Expense Ratio" column does not include small account fees that may
be charged if your account balance is below $500 ($250 for retirement plan
accounts). In addition, the "Expenses Paid During the Period Ended March 31,
2015" column does not include administrative fees that may apply to qualified
retirement plan accounts. See the Funds' prospectus, your retirement plan
document and/or materials from your financial adviser, for a full description
of these fees. Had these fees been included, the "Expenses Paid During the
Period Ended March 31, 2015" column would have been higher and the "Ending
Account Value" would have been lower.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is
not the Fund's actual return. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or expenses you paid
for the period. You may use this information to compare the ongoing costs of
investing in the 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. For shareholder accounts in classes other than Class I
the "Expenses Paid During the Period Ended March 31, 2015" column and the
"Annualized Expense Ratio" column does not include small account fees that may
be charged if your account balance is below $500 ($250 for retirement plan
accounts). In addition, the "Expenses Paid During the Period Ended March 31,
2015" column does not include administrative fees that may apply to qualified
retirement plan accounts. See the Funds' prospectus, your retirement plan
document and/or materials from your financial adviser, for a full description
of these fees. Had these fees been included, the "Expenses Paid During the
Period Ended March 31, 2015" column would have been higher and the "Ending
Account Value" would have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, small account
fees and administrative fees, if applicable to your account. Please refer to
the Fund's prospectus, your retirement plan document and/or materials from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transaction costs and other fees were included, your costs would have been
higher.
4
SUNAMERICA EQUITY FUNDS
EXPENSE EXAMPLE -- MARCH 31, 2015 -- (UNAUDITED) (CONTINUED)
ACTUAL HYPOTHETICAL
----------------------------------------- -----------------------------------------
ENDING ACCOUNT
ENDING ACCOUNT EXPENSE PAID VALUE USING A EXPENSE PAID
VALUE USING DURING THE HYPOTHETICAL DURING THE
BEGINNING ACTUAL PERIOD BEGINNING 5% ASSUMED PERIOD
ACCOUNT VALUE RETURN AT ENDED ACCOUNT VALUE RETURN AT ENDED
AT OCTOBER 1, MARCH 31, MARCH 31, AT OCTOBER 1, MARCH 31, MARCH 31,
FUND 2014 2015 2015 2014 2015 2015
---- ------------- -------------- ------------ ------------- -------------- ------------
INTERNATIONAL DIVIDEND STRATEGY FUND
Class A#........................... $1,000.00.. $ 862.74 $ 8.59 $1,000.00 $1,015.71 $ 9.30
Class C#........................... $1,000.00.. $ 859.76 $11.82 $1,000.00 $1,012.22 $12.79
Class I............................ $1,000.00.. $ 862.81 $ 7.94 $1,000.00 $1,016.40 $ 8.60
Class W+#.......................... $1,000.00.. $ 992.86 $ 2.88 $1,000.00 $1,016.45 $ 8.55
JAPAN FUND#
Class A............................ $1,000.00.. $1,048.70 $ 9.70 $1,000.00 $1,015.46 $ 9.55
Class C............................ $1,000.00.. $1,046.35 $13.01 $1,000.00 $1,012.22 $12.79
ANNUALIZED
EXPENSE
FUND RATIO*
---- ----------
INTERNATIONAL DIVIDEND STRATEGY FUND
Class A#........................... 1.85%
Class C#........................... 2.55%
Class I............................ 1.71%
Class W+#.......................... 1.70%
JAPAN FUND#
Class A............................ 1.90%
Class C............................ 2.55%
--------
* Expenses are equal to each Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 182 days divided by 365
days (to reflect the one-half year period) except for the International
Dividend Strategy Fund Class W Shares "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 advisor for more
information.
# During the stated period, the investment advisor either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Funds or
through recoupment provisions, recovered a portion of or all fees and
expenses waived or reimbursed in the previous two fiscal years. 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 "Expense Ratios" would have been higher. If these fees and
expenses had not been recouped, the "Actual/Hypothetical Ending Account
Value" would have been higher and the "Actual/Hypothetical Expenses Paid
During the Six Months Ended March 31, 2015" and the annualized "Expense
Ratio" would have been lower.
+ Commenced operations on January 29, 2015
5
SUNAMERICA EQUITY FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- MARCH 31, 2015 -- (UNAUDITED)
INTERNATIONAL
DIVIDEND
STRATEGY FUND JAPAN FUND
------------- -----------
ASSETS:
Investments at value (unaffiliated)*........................ $ 145,242,027 $35,722,366
Repurchase agreements (cost approximates value)............. 2,236,000 940,000
------------- -----------
Total investments.......................................... 147,478,027 36,662,366
------------- -----------
Cash........................................................ 979 719
Foreign cash*............................................... 85,003 150,197
Receivable for:
Fund shares sold........................................... 313,655 297,048
Dividends and interest..................................... 669,588 321,101
Investments sold........................................... -- 1,469,093
Prepaid expenses and other assets........................... 11,586 475
Due from investment adviser for expense reimbursements/fee
waivers.................................................... 3,206 8,011
------------- -----------
Total assets................................................ 148,562,044 38,909,010
------------- -----------
LIABILITIES:
Payable for:
Fund shares redeemed....................................... 528,886 98,637
Investments purchased...................................... -- 1,072,346
Investment advisory and management fees.................... 127,112 36,340
Distribution and service maintenance fees.................. 62,040 13,389
Transfer agent fees and expenses........................... 37,076 8,685
Trustees' fees and expenses................................ -- 222
Other accrued expenses..................................... 110,732 48,076
Accrued foreign tax on capital gains....................... 2,314 --
------------- -----------
Total liabilities........................................... 868,160 1,277,695
------------- -----------
Net Assets.................................................. $ 147,693,884 $37,631,315
============= ===========
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01 par value.............. $ 155,115 $ 51,083
Paid-in capital............................................. 283,873,955 36,396,734
------------- -----------
284,029,070 36,447,817
Accumulated undistributed net investment income (loss)...... (219,913) (290,682)
Accumulated undistributed net realized gain (loss) on
investments, futures contracts, options contracts,
securities sold short, and foreign exchange transactions... (121,472,251) 67,983
Unrealized appreciation (depreciation) on investments....... (14,589,548) 1,413,135
Unrealized foreign exchange gain (loss) on other assets and
liabilities................................................ (51,160) (6,938)
Accrued capital gains tax on unrealized appreciation
(depreciation)............................................. (2,314) --
------------- -----------
Net Assets.................................................. $ 147,693,884 $37,631,315
============= ===========
*Cost
Investments (unaffiliated)................................. $ 159,831,266 $34,301,408
============= ===========
Foreign cash............................................... $ 85,312 $ 158,020
============= ===========
See Notes to Financial Statements
6
SUNAMERICA EQUITY FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
INTERNATIONAL
DIVIDEND
STRATEGY FUND JAPAN FUND
------------- -----------
CLASS A (UNLIMITED SHARES AUTHORIZED):
Net assets.................................................. $105,086,780 $33,222,109
Shares of beneficial interest issued and outstanding........ 10,805,037 4,488,153
Net asset value and redemption price per share.............. $ 9.73 $ 7.40
Maximum sales charge (5.75% of offering price).............. $ 0.59 $ 0.45
------------ -----------
Maximum offering price to public............................ $ 10.32 $ 7.85
============ ===========
CLASS C (UNLIMITED SHARES AUTHORIZED):
Net assets.................................................. $ 32,866,715 $ 4,409,206
Shares of beneficial interest issued and outstanding........ 3,705,993 620,167
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge) $ 8.87 $ 7.11
============ ===========
CLASS I (UNLIMITED SHARES AUTHORIZED):
Net assets.................................................. $ 341,665 $ --
Shares of beneficial interest issued and outstanding........ 34,759 --
Net asset value, offering and redemption price per share.... $ 9.83 $ --
============ ===========
CLASS W# (UNLIMITED SHARES AUTHORIZED):
Net assets.................................................. $ 9,398,724 $ --
Shares of beneficial interest issued and outstanding........ 965,671 --
Net asset value, offering and redemption price per share.... $ 9.73 $ --
============ ===========
# See Note 1
See Notes to Financial Statements
7
SUNAMERICA EQUITY FUNDS
STATEMENT OF OPERATIONS -- MARCH 31, 2015 -- (UNAUDITED)
INTERNATIONAL
DIVIDEND
STRATEGY FUND JAPAN FUND
------------- ----------
INVESTMENT INCOME:
Dividends (unaffiliated).................................... $ 2,364,950 $ 313,965
Interest (unaffiliated)..................................... -- --
------------ ----------
Total investment income*.................................. 2,364,950 313,965
------------ ----------
EXPENSES:
Investment advisory and management fees..................... 870,687 208,591
Distribution and service maintenance fees:
Class A................................................... 227,599 55,988
Class B#.................................................. 24,673 1,545
Class C................................................... 189,789 19,873
Service fees:
Class I................................................... 466 --
Class W#.................................................. 612 --
Transfer agent fees and expenses:
Class A................................................... 152,150 36,164
Class B#.................................................. 6,338 713
Class C................................................... 43,958 5,200
Class I................................................... 439 --
Class W#.................................................. 903 --
Registration fees:
Class A................................................... 21,549 10,857
Class B#.................................................. 3,732 6,082
Class C................................................... 10,701 7,702
Class W#.................................................. 2,548 --
Custodian and accounting fees............................... 79,849 13,178
Reports to shareholders..................................... 36,471 3,680
Audit and tax fees.......................................... 39,461 32,283
Legal fees.................................................. 8,797 3,040
Directors' fees and expenses................................ 15,284 833
Interest expense............................................ 1,177 96
Other expenses.............................................. 12,643 9,991
------------ ----------
Total expenses before fee waivers, expense
reimbursements, and expense recoupments.................. 1,749,826 415,816
Net (Fees waived and expenses reimbursed)/recouped by
investment adviser (Note 3).............................. 10,335 (57,266)
------------ ----------
Net expenses.............................................. 1,760,161 358,550
------------ ----------
Net investment income (loss)................................. 604,789 (44,585)
------------ ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)....... (24,750,111) 183,096
Net realized foreign exchange gain (loss) on other assets
and liabilities............................................. (631,593) (1,525)
------------ ----------
Net realized gain (loss) on investments and foreign
currencies.................................................. (25,381,704) 181,571
Change in unrealized appreciation (depreciation) on
investments (unaffiliated).................................. (4,120,962) 1,402,514
Change in unrealized foreign exchange gain (loss) on other
assets and liabilities...................................... (4,523) 271
Change in accrued capital gains tax on unrealized
appreciation (depreciation)................................. 143,860 --
------------ ----------
Net unrealized gain (loss) on investments and foreign
currencies.................................................. (3,981,625) 1,402,785
------------ ----------
Net realized and unrealized gain (loss) on investments and
foreign currencies.......................................... (29,363,329) 1,584,356
------------ ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.................................................. $(28,758,540) $1,539,771
============ ==========
* Net of foreign withholding taxes on interest and
dividends of................................................ $ 171,714 $ 37,478
============ ==========
** Net of foreign withholding taxes on capital gains of...... $ 136,768 $ --
============ ==========
# See Note 1
See Notes to Financial Statements
8
SUNAMERICA EQUITY FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- MARCH 31, 2015
INTERNATIONAL
DIVIDEND
STRATEGY FUND
---------------------------
FOR THE PERIOD
ENDED FOR THE YEAR
MARCH 31, ENDED
2015 SEPTEMBER 30,
(UNAUDITED) 2014
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ 604,789 $ 5,624,412
Net realized gain (loss) on investments and foreign currencies......................... (25,381,704) 5,545,743
Net unrealized gain (loss) on investments and foreign currencies....................... (3,981,625) (15,250,279)
------------ ------------
Net increase (decrease) in net assets resulting from operations.......................... (28,758,540) (4,080,124)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (573,073) (4,140,584)
Net investment income (Class B)#....................................................... (22,454) (195,830)
Net investment income (Class C)........................................................ (117,256) (934,780)
Net investment income (Class I)........................................................ (1,729) (19,978)
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 I).............................................. -- --
Net realized gain on securities (Class W)#............................................. -- --
------------ ------------
Total distributions to shareholders...................................................... (714,512) (5,291,172)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 6). (40,290,978) 98,901,371
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. (69,764,030) 89,530,075
NET ASSETS:
Beginning of period...................................................................... 217,457,914 127,927,839
------------ ------------
End of period+........................................................................... $147,693,884 $217,457,914
============ ============
+ Includes accumulated undistributed net investment income (loss)........................ $ (219,913) (110,190)
============ ============
# See Note 1
JAPAN FUND
---------------------------
FOR THE PERIOD
ENDED FOR THE YEAR
MARCH 31, ENDED
2015 SEPTEMBER 30,
(UNAUDITED) 2014
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)........................................................... $ (44,585) $ (77,156)
Net realized gain (loss) on investments and foreign currencies......................... 181,571 3,619,719
Net unrealized gain (loss) on investments and foreign currencies....................... 1,402,785 (2,334,213)
----------- -----------
Net increase (decrease) in net assets resulting from operations.......................... 1,539,771 1,208,350
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A)........................................................ (215,951) (495,798)
Net investment income (Class B)#....................................................... (932) (5,794)
Net investment income (Class C)........................................................ (7,704) (39,909)
Net investment income (Class I)........................................................ -- --
Net investment income (Class W)#....................................................... -- --
Net realized gain on securities (Class A).............................................. (2,474,268) (1,975,339)
Net realized gain on securities (Class B)#............................................. (38,677) (27,616)
Net realized gain on securities (Class C).............................................. (319,855) (190,215)
Net realized gain on securities (Class I).............................................. -- --
Net realized gain on securities (Class W)#............................................. -- --
----------- -----------
Total distributions to shareholders...................................................... (3,057,387) (2,734,671)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (NOTE 6). (1,065,556) 14,227,530
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................................................. (2,583,172) 12,701,209
NET ASSETS:
Beginning of period...................................................................... 40,214,487 27,513,278
----------- -----------
End of period+........................................................................... $37,631,315 $40,214,487
=========== ===========
+ Includes accumulated undistributed net investment income (loss)........................ $ (290,682) $ (21,510)
=========== ===========
# See Note 1
See Notes to Financial Statements
9
SUNAMERICA EQUITY FUNDS
FINANCIAL HIGHLIGHTS
INTERNATIONAL DIVIDEND STRATEGY FUND
------------------------------------
NET GAIN
(LOSS) ON
NET INVESTMENTS DISTRI- NET NET
ASSET NET (BOTH DIVIDENDS BUTIONS ASSET ASSETS
VALUE INVESTMENT REALIZED TOTAL FROM FROM NET FROM DISTRIBUTIONS TOTAL VALUE END OF
BEGINNING INCOME AND INVESTMENT INVESTMENT CAPITAL FROM RETURN DISTRI- END OF TOTAL PERIOD
PERIOD ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS OF CAPITAL BUTIONS PERIOD RETURN(2) (000'S)
------------ --------- ---------- ----------- ---------- ---------- ------- ------------- ------- ------ --------- --------
CLASS A
-
09/30/10 $11.58 $(0.01) $ 0.33 $ 0.32 $(0.00) $-- $(0.06) $(0.06) $11.84 2.79% $100,990
09/30/11 11.84 0.08 (1.64) (1.56) (0.00) -- -- (0.00) 10.28 (13.17) 50,177
09/30/12 10.28 0.23 0.66 0.89 (0.26) -- -- (0.26) 10.91 8.77 51,309
09/30/13 10.91 0.47 0.50 0.97 (0.47) -- -- (0.47) 11.41 9.24 96,020
09/30/14 11.41 0.40 (0.14) 0.26 (0.34) -- -- (0.34) 11.33 2.20 162,284
03/31/15(5) 11.33 0.05 (1.61) (1.56) (0.04) -- -- (0.04) 9.73 (13.73) 105,087
CLASS C
-
09/30/10 10.70 (0.09) 0.32 0.23 -- -- -- -- 10.93 2.15 19,763
09/30/11 10.93 (0.02) (1.49) (1.51) -- -- -- -- 9.42 (13.82) 13,190
09/30/12 9.42 0.14 0.61 0.75 (0.14) -- -- (0.14) 10.03 7.98 12,571
09/30/13 10.03 0.36 0.47 0.83 (0.41) -- -- (0.41) 10.45 8.56 24,776
09/30/14 10.45 0.30 (0.13) 0.17 (0.27) -- -- (0.27) 10.35 1.56 46,349
03/31/15(5) 10.35 0.01 (1.46) (1.45) (0.03) -- -- (0.03) 8.87 (14.02) 32,867
CLASS I
-
09/30/10 11.67 (0.02) 0.35 0.33 (0.01) -- (0.06) (0.07) 11.93 2.80 2,600
09/30/11 11.93 0.08 (1.65) (1.57) (0.00) -- -- (0.00) 10.36 (13.13) 1,625
09/30/12 10.36 0.24 0.66 0.90 (0.27) -- -- (0.27) 10.99 8.84 1,289
09/30/13 10.99 0.44 0.56 1.00 (0.48) -- -- (0.48) 11.51 9.41 1,184
09/30/14 11.51 0.32 (0.02) 0.30 (0.36) -- -- (0.36) 11.45 2.45 426
03/31/15(5) 11.45 0.05 (1.62) (1.57) (0.05) -- -- (0.05) 9.83 (13.72) 342
CLASS W
-
01/29/15*-
03/31/15(5) 9.80 0.08 (0.15) (0.07) -- -- -- -- 9.73 (0.71) 9,399
RATIO
OF NET
RATIO OF INVESTMENT
EXPENSES INCOME (LOSS)
TO AVERAGE TO AVERAGE PORTFOLIO
NET ASSETS NET ASSETS TURNOVER
---------- ------------- ---------
1.85%(4) (0.11)%(4) 295%
1.84 0.63 262
1.90(3) 2.07(3) 248
1.90(3) 4.42(3) 32
1.90(3) 3.47(3) 80
1.85(3)(6) 0.92(3)(6) 85
2.55(3)(4) (0.82)(3)(4) 295%
2.55(3) (0.14)(3) 262
2.55(3) 1.38(3) 248
2.55(3) 3.70(3) 32
2.55(3) 2.85(3) 80
2.55(3)(6) 0.18(3)(6) 85
1.80(3)(4) (0.16)(3)(4) 295%
1.80(3) 0.59(3) 262
1.80(3) 2.14(3) 248
1.80(3) 3.98(3) 32
1.77(3) 2.66(3) 80
1.71(3)(6) 1.02(3)(6) 85
1.70(3)(6) 3.26(3)(6) 85%
--------
* Commencement of Operations
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements.
(3)Net of the following expense reimbursements (recoupments) (based on average
net assets) (See Note 3):
09/30/10 09/30/11 09/30/12 09/30/13 09/30/14 03/31/15(4)(5)
-------- -------- -------- -------- -------- --------------
International Dividend Strategy Class A. -- % -- % 0.25% 0.16% (0.09)% (0.01)%
International Dividend Strategy Class C. 0.02 (0.00) 0.33 0.20 (0.05) (0.04)
International Dividend Strategy Class I. 0.01 (0.09) 0.17 0.09 (0.09) --
International Dividend Strategy Class W. -- -- -- -- -- 0.60
(4)Includes expense reimbursements, but excludes expense reductions. If the
expense reductions had been applied the ratio of expenses to average net
assets would have been lower and the ratio of net investment income to
average net assets would have been higher by:
09/30/10
--------
International Dividend Strategy Class A. 0.01%
International Dividend Strategy Class C. 0.01
International Dividend Strategy Class I. 0.00
(5)Unaudited
(6)Annualized
See Notes to Financial Statements
10
SUNAMERICA EQUITY FUNDS
FINANCIAL HIGHLIGHTS -- (CONTINUED)
JAPAN FUND
----------
NET GAIN
(LOSS) ON
NET INVESTMENTS DISTRI- NET NET
ASSET NET (BOTH DIVIDENDS BUTIONS ASSET ASSETS
VALUE INVESTMENT REALIZED TOTAL FROM FROM NET FROM DISTRIBUTIONS TOTAL VALUE END OF
BEGINNING INCOME AND INVESTMENT INVESTMENT CAPITAL FROM RETURN DISTRI- END OF TOTAL PERIOD
PERIOD ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS OF CAPITAL BUTIONS PERIOD RETURN(2) (000'S)
------------ --------- ---------- ----------- ---------- ---------- ------- ------------- ------- ------ --------- -------
CLASS A
09/30/10 $8.34 $(0.02) $ 1.07 $ 1.05 $(0.29) $ -- $-- $(0.29) $9.10 13.01% $58,538
09/30/11 9.10 0.00 (1.11) (1.11) (0.26) -- -- (0.26) 7.73 (12.68) 31,292
09/30/12 7.73 0.04 0.02 0.06 (0.01) (1.37) -- (1.38) 6.41 1.38 20,714
09/30/13 6.41 (0.01) 1.86 1.85 (0.16) -- -- (0.16) 8.10 29.54 25,053
09/30/14 8.10 (0.01) 0.37 0.36 (0.15) (0.58) -- (0.73) 7.73 4.81 35,178
03/31/15(4) 7.73 (0.01) 0.31 0.30 (0.05) (0.58) -- (0.63) 7.40 4.87 33,222
CLASS C
09/30/10 8.16 (0.07) 1.05 0.98 (0.22) -- -- (0.22) 8.92 12.30 691
09/30/11 8.92 (0.04) (1.11) (1.15) (0.23) -- -- (0.23) 7.54 (13.35) 888
09/30/12 7.54 (0.02) 0.05 0.03 -- (1.37) -- (1.37) 6.20 0.85 438
09/30/13 6.20 (0.03) 1.77 1.74 (0.10) -- -- (0.10) 7.84 28.58 2,222
09/30/14 7.84 (0.05) 0.34 0.29 (0.12) (0.58) -- (0.70) 7.43 4.07 4,542
03/31/15(4) 7.43 (0.03) 0.30 0.27 (0.01) (0.58) -- (0.59) 7.11 4.64 4,409
RATIO
OF NET
RATIO OF INVESTMENT
EXPENSES INCOME (LOSS)
TO AVERAGE TO AVERAGE PORTFOLIO
NET ASSETS(3) NET ASSETS(3) TURNOVER
------------- ------------- ---------
1.90% (0.24)% 77%
1.90 0.04 79
1.90 0.52 192
1.90 (0.12) 162
1.90 (0.19) 111
1.90(5) (0.17)(5) 59
2.55 (0.86) 77%
2.55 (0.48) 79
2.55 (0.23) 192
2.55 (0.43) 162
2.55 (0.65) 111
2.55(5) (0.73)(5) 59
--------
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load. Total return
does include expense reimbursements.
(3)Net of the following expense reimbursements (based on average net assets)
(See Note 3):
09/30/10 09/30/11 09/30/12 09/30/13 09/30/14 03/31/15(4)(5)
-------- -------- -------- -------- -------- --------------
Japan Class A........................... 0.18% 0.27% 0.59% 0.55% 0.29% 0.24%
Japan Class C........................... 2.66 1.19 2.80 1.57 0.84 0.60
(4)Unaudited
(5)Annualized
See Notes to Financial Statements
11
SUNAMERICA INTERNATIONAL DIVIDEND STRATEGY FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Telephone-Integrated......................... 8.9%
Oil Companies-Integrated..................... 8.3
Telecom Services............................. 7.1
Insurance-Multi-line......................... 4.9
Medical-Drugs................................ 4.4
Finance-Investment Banker/Broker............. 4.0
Cellular Telecom............................. 3.9
Diversified Operations....................... 3.7
Electronic Components-Misc................... 3.3
Electric-Integrated.......................... 3.3
Steel-Producers.............................. 2.8
Food-Retail.................................. 2.7
Insurance-Reinsurance........................ 2.7
Semiconductor Components-Integrated Circuits. 2.7
Building & Construction-Misc................. 2.6
Banks-Commercial............................. 2.6
Building-Residential/Commercial.............. 2.6
Medical-Generic Drugs........................ 2.5
Office Automation & Equipment................ 2.5
Cable/Satellite TV........................... 2.3
Auto-Cars/Light Trucks....................... 2.3
Import/Export................................ 2.3
Real Estate Operations & Development......... 2.2
Computers.................................... 2.2
Rubber-Tires................................. 2.1
Finance-Other Services....................... 1.8
Public Thoroughfares......................... 1.6
Oil Companies-Exploration & Production....... 1.6
Repurchase Agreement......................... 1.5
Cosmetics & Toiletries....................... 1.3
Coal......................................... 1.1
Metal-Iron................................... 1.1
Oil & Gas Drilling........................... 1.0
----
99.9%
====
--------
*Calculated as a percentage of net assets
COUNTRY ALLOCATION*
Brazil....................................... 14.4%
Japan........................................ 12.0
United Kingdom............................... 8.7
Taiwan....................................... 8.2
Switzerland.................................. 6.2
France....................................... 4.5
Singapore.................................... 4.2
Italy........................................ 4.2
Turkey....................................... 3.9
Thailand..................................... 3.9
China........................................ 3.7
Norway....................................... 3.7
Netherlands.................................. 2.7
Sweden....................................... 2.6
Israel....................................... 2.5
Belgium...................................... 2.2
Spain........................................ 2.1
Canada....................................... 2.1
Finland...................................... 2.1
Poland....................................... 1.9
Russia....................................... 1.6
United States................................ 1.5
Denmark...................................... 1.0
----
99.9%
====
--------
*Calculated as a percentage of net assets
12
SUNAMERICA INTERNATIONAL DIVIDEND STRATEGY FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (UNAUDITED)
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
COMMON STOCKS -- 91.5%
BELGIUM -- 2.2%
Belgacom SA(1)............................... 92,507 $ 3,239,635
-----------
BERMUDA -- 0.0%
Peace Mark Holdings, Ltd.+(2)................ 800,000 0
-----------
BRAZIL -- 7.5%
BM&FBovespa SA............................... 747,700 2,614,508
CCR SA....................................... 475,600 2,429,002
CETIP SA - Mercados Organizados.............. 257,600 2,570,713
Cia Siderurgica Nacional SA.................. 954,400 1,623,785
Natura Cosmeticos SA......................... 221,454 1,866,526
-----------
11,104,534
-----------
CANADA -- 2.1%
BCE, Inc..................................... 74,333 3,146,923
-----------
CHINA -- 3.7%
Bank of Communications Co., Ltd., Class H(1). 4,453,000 3,822,478
China Shenhua Energy Co., Ltd., Class H(1)... 664,000 1,695,487
-----------
5,517,965
-----------
DENMARK -- 1.0%
TDC A/S(1)................................... 194,268 1,391,606
-----------
FINLAND -- 2.1%
Nokian Renkaat Oyj(1)........................ 101,466 3,024,502
-----------
FRANCE -- 4.5%
Bouygues SA(1)............................... 97,905 3,846,210
Total SA(1).................................. 56,636 2,817,717
-----------
6,663,927
-----------
ISRAEL -- 2.5%
Teva Pharmaceutical Industries, Ltd.(1)...... 59,663 3,716,647
-----------
ITALY -- 4.2%
Eni SpA(1)................................... 153,806 2,662,065
UnipolSai SpA(1)............................. 1,203,776 3,502,455
-----------
6,164,520
-----------
JAPAN -- 12.0%
Canon, Inc.(1)............................... 105,000 3,713,202
Daihatsu Motor Co., Ltd.(1).................. 218,900 3,351,646
Daiwa Securities Group, Inc.(1).............. 442,000 3,483,446
Sekisui House, Ltd.(1)....................... 262,600 3,818,149
Sumitomo Corp.(1)............................ 311,800 3,338,652
-----------
17,705,095
-----------
NETHERLANDS -- 2.7%
Koninklijke Ahold NV(1)...................... 203,505 4,014,671
-----------
NORWAY -- 3.7%
Statoil ASA(1)............................... 134,116 2,369,641
Telenor ASA(1)............................... 150,988 3,051,541
-----------
5,421,182
-----------
POLAND -- 1.9%
PGE SA(1).................................... 502,873 2,765,005
-----------
RUSSIA -- 1.6%
Mobile Telesystems OJSC ADR.................. 233,981 2,363,208
-----------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
SINGAPORE -- 4.2%
Keppel Corp., Ltd.(1)...................... 416,000 $ 2,720,937
Singapore Telecommunications, Ltd.(1)...... 1,100,000 3,499,770
------------
6,220,707
------------
SPAIN -- 2.1%
Telefonica SA(1)........................... 222,119 3,160,678
------------
SWEDEN -- 2.6%
Tele2 AB, Class B(1)....................... 53,576 640,625
TeliaSonera AB(1).......................... 491,920 3,126,065
------------
3,766,690
------------
SWITZERLAND -- 6.2%
Swiss Re AG(1)............................. 41,225 3,990,326
Transocean, Ltd.(1)........................ 104,767 1,508,866
Zurich Insurance Group AG(1)............... 10,939 3,705,093
------------
9,204,285
------------
TAIWAN -- 8.2%
Asustek Computer, Inc.(1).................. 327,000 3,285,267
Pegatron Corp.(1).......................... 1,807,000 4,880,533
Siliconware Precision Industries Co.(1).... 2,403,000 3,958,908
------------
12,124,708
------------
THAILAND -- 3.9%
Advanced Info Service PCL.................. 453,200 3,300,811
PTT Exploration & Production PCL........... 717,800 2,404,432
------------
5,705,243
------------
TURKEY -- 3.9%
Emlak Konut Gayrimenkul Yatirim Ortakligi
AS(1)..................................... 2,930,111 3,317,678
Eregli Demir ve Celik Fabrikalari TAS(1)... 1,605,989 2,494,419
------------
5,812,097
------------
UNITED KINGDOM -- 8.7%
AstraZeneca PLC(1)......................... 46,167 3,165,215
BP PLC(1).................................. 458,920 2,965,080
GlaxoSmithKline PLC(1)..................... 144,724 3,314,169
Sky PLC(1)................................. 231,457 3,405,959
------------
12,850,423
------------
TOTAL COMMON STOCKS
(cost $143,871,336)....................... 135,084,251
------------
PREFERRED SECURITIES -- 6.9%
BRAZIL -- 6.9%
Cia Energetica de Minas Gerais+............ 523,871 2,104,315
Itausa - Investimentos Itau SA............. 869,400 2,718,620
Petroleo Brasileiro SA..................... 476,200 1,451,779
Telefonica Brasil SA....................... 141,615 2,195,519
Vale SA, Class A+.......................... 341,200 1,651,718
------------
TOTAL PREFERRED SECURITIES
(cost $15,959,930)........................ 10,121,951
------------
RIGHTS -- 0.0%
Telefonica SA+ (cost $0)................... 222,119 35,825
------------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $159,831,266)....................... 145,242,027
------------
13
SUNAMERICA INTERNATIONAL DIVIDEND STRATEGY FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (UNAUDITED) (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
REPURCHASE AGREEMENT -- 1.5%
State Street Bank & Trust Co.
Joint Repurchase Agreement(3)
(cost $2,236,000).............. $2,236,000 $ 2,236,000
------------
TOTAL INVESTMENTS --
(cost $162,067,266)(4)......... 99.9% 147,478,027
Other assets less liabilities..... 0.1 215,857
---------- ------------
NET ASSETS -- 100.0% $147,693,884
========== ============
--------
+ Non-income producing security
(1)Security was valued using fair value procedures at March 31, 2015. The
aggregate value of these securities was $112,764,343 representing 76.4% of
net assets. Securities are classified as Level 2 based on the securities
valuation inputs. See Note 2 regarding fair value pricing for foreign equity
securities.
(2)Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(3)See Note 2 for details of Joint Repurchase Agreements.
(4)See Note 5 for cost of investments on a tax basis.
ADR-- American Depository Receipt
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2015 (see Note 2):
LEVEL 1 -- UNADJUSTED LEVEL 2 -- OTHER LEVEL 3 -- SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
- --------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Common Stock:
Bermuda.................. $ -- $ -- $ 0 $ 0
Brazil................... 11,104,534 -- -- 11,104,534
Canada................... 3,146,923 -- -- 3,146,923
Russia................... 2,363,208 -- -- 2,363,208
Thailand................. 5,705,243 -- -- 5,705,243
Other Countries.......... -- 112,764,343 -- 112,764,343
Preferred Securities....... 10,121,951 -- -- 10,121,951
Rights..................... 35,825 -- -- 35,825
Repurchase Agreement....... -- 2,236,000 -- 2,236,000
----------- ------------ --- ------------
Total Investments at Value. $32,477,684 $115,000,343 $-- $147,478,027
=========== ============ === ============
--------
* 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. Securities currently valued at $28,927,042 were transferred
from Level 1 to Level 2 due to foreign equity securities whose values were
adjusted for fair value pricing procedures for foreign equity securities. There
were no additional transfers between Levels during the reporting period.
At the beginning and end of the reporting period, Level 3 investments in
securities were not considered a material portion of the Fund.
See Notes to Financial Statements
14
SUNAMERICA JAPAN FUND
PORTFOLIO PROFILE -- MARCH 31, 2015 -- (UNAUDITED)
INDUSTRY ALLOCATION*
Auto/Truck Parts & Equipment-Original.. 12.7%
Telephone-Integrated................... 9.1
Insurance-Life/Health.................. 6.3
Television............................. 6.1
Banks-Commercial....................... 5.5
Machinery-Electrical................... 5.4
Diversified Banking Institutions....... 4.7
Computers-Integrated Systems........... 4.2
Insurance-Property/Casualty............ 3.3
Medical-Drugs.......................... 2.9
Real Estate Operations & Development... 2.9
Real Estate Management/Services........ 2.7
Repurchase Agreements.................. 2.5
Steel-Specialty........................ 2.5
Toys................................... 2.2
Chemicals-Diversified.................. 2.2
E-Commerce/Products.................... 2.0
Food-Retail............................ 1.9
Petrochemicals......................... 1.5
Non-Ferrous Metals..................... 1.5
Brewery................................ 1.4
Human Resources........................ 1.1
Transport-Rail......................... 1.1
Oil Companies-Exploration & Production. 1.1
Diversified Manufacturing Operations... 1.1
Retail-Consumer Electronics............ 1.1
Office Automation & Equipment.......... 1.0
Retail-Drug Store...................... 1.0
Auto-Heavy Duty Trucks................. 1.0
Steel-Producers........................ 1.0
Retail-Misc./Diversified............... 0.9
Machinery-Farming...................... 0.9
Auto-Cars/Light Trucks................. 0.9
Chemicals-Specialty.................... 0.9
Entertainment Software................. 0.8
----
97.4%
====
--------
*Calculated as a percentage of net assets
COUNTRY ALLOCATION*
Japan......... 94.9%
United States. 2.5
----
97.4%
====
--------
*Calculated as a percentage of net assets
15
SUNAMERICA JAPAN FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (UNAUDITED)
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
COMMON STOCKS -- 94.9%
AUTO-CARS/LIGHT TRUCKS -- 0.9%
Fuji Heavy Industries, Ltd.(1)............... 10,300 $ 342,457
----------
AUTO-HEAVY DUTY TRUCKS -- 1.0%
Hino Motors, Ltd.(1)......................... 25,300 361,223
----------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 12.7%
Denso Corp.(1)............................... 27,400 1,250,952
KYB Co., Ltd.(1)............................. 92,500 339,090
NGK Insulators, Ltd.(1)...................... 42,320 904,268
Sumitomo Electric Industries, Ltd.(1)........ 87,650 1,150,369
Toyota Industries Corp.(1)................... 19,780 1,133,583
----------
4,778,262
----------
BANKS-COMMERCIAL -- 5.5%
Shinsei Bank, Ltd.(1)........................ 294,000 585,138
Sumitomo Mitsui Financial Group, Inc.(1)..... 38,415 1,472,035
----------
2,057,173
----------
BREWERY -- 1.4%
Asahi Group Holdings, Ltd.(1)................ 17,100 543,343
----------
CHEMICALS-DIVERSIFIED -- 2.2%
Mitsubishi Gas Chemical Co., Inc.(1)......... 165,300 815,652
----------
CHEMICALS-SPECIALTY -- 0.9%
Tokyo Ohka Kogyo Co., Ltd.(1)................ 10,560 341,711
----------
COMPUTERS-INTEGRATED SYSTEMS -- 4.2%
Fujitsu, Ltd.(1)............................. 231,105 1,577,389
----------
DIVERSIFIED BANKING INSTITUTIONS -- 4.7%
Mitsubishi UFJ Financial Group, Inc.(1)...... 283,820 1,757,284
----------
DIVERSIFIED MANUFACTURING OPERATIONS -- 1.1%
Toshiba Corp.(1)............................. 99,000 415,610
----------
E-COMMERCE/PRODUCTS -- 2.0%
Rakuten, Inc.(1)............................. 42,330 746,781
----------
ENTERTAINMENT SOFTWARE -- 0.8%
Dena Co., Ltd.(1)............................ 15,100 295,855
----------
FOOD-RETAIL -- 1.9%
Seven & I Holdings Co., Ltd.(1).............. 17,300 727,992
----------
HUMAN RESOURCES -- 1.1%
Recruit Holdings Co., Ltd.(1)................ 13,800 431,147
----------
INSURANCE-LIFE/HEALTH -- 6.3%
Sony Financial Holdings, Inc.(1)............. 66,595 1,072,108
T&D Holdings, Inc.(1)........................ 94,790 1,305,719
----------
2,377,827
----------
INSURANCE-PROPERTY/CASUALTY -- 3.3%
Tokio Marine Holdings, Inc.(1)............... 33,280 1,257,819
----------
MACHINERY-ELECTRICAL -- 5.4%
Hitachi, Ltd.(1)............................. 33,000 225,615
Mitsubishi Electric Corp.(1)................. 150,130 1,786,827
----------
2,012,442
----------
MACHINERY-FARMING -- 0.9%
Kubota Corp.(1).............................. 21,700 343,806
----------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
MEDICAL-DRUGS -- 2.9%
Ono Pharmaceutical Co., Ltd.(1).............. 2,000 $ 226,324
Takeda Pharmaceutical Co., Ltd.(1)........... 17,050 852,235
-----------
1,078,559
-----------
MISCELLANEOUS MANUFACTURING -- 0.0%
Peace Mark Holdings, Ltd.+(2)................ 8,000 0
-----------
NON-FERROUS METALS -- 1.5%
Mitsubishi Materials Corp.(1)................ 166,205 559,315
-----------
OFFICE AUTOMATION & EQUIPMENT -- 1.0%
Ricoh Co., Ltd.(1)........................... 34,300 373,839
-----------
OIL COMPANIES-EXPLORATION & PRODUCTION -- 1.1%
Inpex Corp.(1)............................... 38,100 420,356
-----------
PETROCHEMICALS -- 1.5%
Mitsui Chemicals, Inc.(1).................... 180,000 578,475
-----------
REAL ESTATE MANAGEMENT/SERVICES -- 2.7%
Mitsubishi Estate Co., Ltd.(1)............... 43,980 1,020,811
-----------
REAL ESTATE OPERATIONS & DEVELOPMENT -- 2.9%
Leopalace21 Corp.+(1)........................ 66,900 350,480
Sumitomo Realty & Development Co., Ltd.(1)... 20,170 726,320
-----------
1,076,800
-----------
RETAIL-CONSUMER ELECTRONICS -- 1.1%
K's Holdings Corp.(1)........................ 12,600 407,882
-----------
RETAIL-DRUG STORE -- 1.0%
Tsuruha Holdings, Inc.(1).................... 4,815 369,194
-----------
RETAIL-MISC./DIVERSIFIED -- 0.9%
Ryohin Keikaku Co., Ltd.(1).................. 2,410 350,520
-----------
STEEL-PRODUCERS -- 1.0%
Japan Steel Works, Ltd.(1)................... 85,670 360,424
-----------
STEEL-SPECIALTY -- 2.5%
Hitachi Metals, Ltd.(1)...................... 61,065 939,026
-----------
TELEPHONE-INTEGRATED -- 9.1%
KDDI Corp.(1)................................ 35,400 802,027
Nippon Telegraph & Telephone Corp.(1)........ 29,570 1,822,140
SoftBank Corp.(1)............................ 13,750 799,281
-----------
3,423,448
-----------
TELEVISION -- 6.1%
Nippon Television Holdings, Inc.(1).......... 89,850 1,497,924
TV Asahi Holdings Corp.(1)................... 48,410 808,414
-----------
2,306,338
-----------
TOYS -- 2.2%
Bandai Namco Holdings, Inc.(1)............... 19,600 381,912
Nintendo Co., Ltd.(1)........................ 3,140 462,104
-----------
844,016
-----------
TRANSPORT-RAIL -- 1.1%
East Japan Railway Co.(1).................... 5,350 429,590
-----------
TOTAL LONG-TERM INVESTMENT SECURITIES
(cost $34,301,408).......................... 35,722,366
-----------
16
SUNAMERICA JAPAN FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2015 -- (UNAUDITED) (CONTINUED)
PRINCIPAL VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
REPURCHASE AGREEMENT -- 2.5%
Agreement with State Street Bank & Trust bearing
interest at 0.00% dated 03/31/2015, to be
repurchased 04/01/2015 in the amount of
$940,000 collateralized by $990,000 of Federal
Home Loan Mtg. Assoc. Notes, bearing interest
at 2.00% due 01/30/2023 and having an
approximate value of $959,521.
(cost $940,000).................................. $940,000 $ 940,000
-----------
TOTAL INVESTMENTS
(cost $35,241,408)(3)............................ 97.4% 36,662,366
Other assets less liabilities....................... 2.6 968,949
-------- -----------
NET ASSETS 100.0% $37,631,315
======== ===========
--------
+ Non-income producing security
(1)Security was valued using fair value procedures at March 31, 2015. The
aggregate value of these securities was $35,722,366 representing 94.9% of
net assets. Securities are classified as Level 2 based on the securities
valuation inputs. See Note 2 regarding fair value pricing for foreign equity
securities.
(2)Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(3)See Note 5 for cost of investments on a tax basis.
The following is a summary of the inputs used to value the Fund's net assets as
of March 31, 2015 (see Note 2):
LEVEL 1 -- UNADJUSTED LEVEL 2 -- OTHER LEVEL 3 -- SIGNIFICANT
QUOTED PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL
- --------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stock:
Miscellaneous Manufacturing. $-- $ -- $ 0 $ 0
Other Industries............ -- 35,722,366 -- 35,722,366
Repurchase Agreement.......... -- 940,000 -- 940,000
--- ----------- --- -----------
Total Investments at Value.... $-- $36,662,366 $-- $36,662,366
=== =========== === ===========
--------
* 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. Securities currently valued at $27,613,231 were transferred
from Level 1 to Level 2 due to foreign equity securities whose values were
adjusted for fair value pricing procedures for foreign equity securities. There
were no additional transfers between Levels during the reporting period.
At the beginning and end of the reporting period, Level 3 investments in
securities were not considered a material portion of the Fund.
See Notes to Financial Statements
17
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
Note 1. Organization
SunAmerica Equity Funds is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment
company and was organized as a Massachusetts business trust (the "Trust" or
"Equity Funds") on June 16, 1986. It currently consists of two different
funds (each, a "Fund" and collectively, the "Funds"). Each Fund is a
separate series of the Trust with a distinct objective and/or strategy. Each
Fund is advised and/or managed by SunAmerica Asset Management, LLC. (the
"Adviser" or "SunAmerica"). An investor may invest in one or more of the
following Funds: SunAmerica International Dividend Strategy Fund
("International Dividend Strategy Fund"), or SunAmerica Japan Fund ("Japan
Fund"). The Funds are considered to be separate entities for financial and
tax reporting purposes.
Effective January 27, 2012, the name of the International Small-Cap Fund was
changed to Japan Fund and certain changes were made to the principal
investment strategies and techniques of the Fund which are reflected below.
The investment objective and principal investment techniques for each of the
Funds are as follows:
INTERNATIONAL DIVIDEND STRATEGY FUND seeks total return by employing a "buy
and hold" strategy to identify approximately 50 to 100 high dividend
yielding equity securities selected annually from the MSCI ACWI ex-U.S.
Index. At least 80% of the Fund's net assets, plus any borrowing for
investment purposes, will be invested in dividend yielding equity securities.
JAPAN FUND seeks long-term capital appreciation by active trading of
securities of Japanese issuers and other investments that are tied
economically to Japan ("Japanese companies"). Under normal circumstances, at
least 80% of the Fund's net assets, plus any borrowings for investment
purposes, will be invested in Japanese companies.
Each Fund is organized as a "diversified" fund within the meaning of the
1940 Act.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statement of Assets and Liabilities. The cost structure
for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, purchases of Class A shares in amounts
$1,000,000 or more will be purchased at net asset value but will be subject
to a contingent deferred sales charge on redemptions made within two years
of purchase.
Class B shares are offered without an initial sales charge, although a
declining contingent deferred sales charge may be imposed on redemptions
made within six years of purchase. Class B shares of each Fund convert
automatically to Class A shares approximately eight years after purchase 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, although may be subject to a contingent deferred sales charge
on redemptions made within 12 months of purchase.
Class I shares are closed to new purchases, however, existing investors may
continue to purchase shares through reinvestments of dividends and capital
gains distributions.
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 International Dividend Strategy Fund commenced
operations effective January 29, 2015. The International Dividend Strategy
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 International Dividend Strategy Fund converted to Class A shares.
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 and Class C shares each make distribution
and account maintenance fee payments under the distribution plans pursuant
to Rule 12b-1 under the 1940 Act, except Class C shares are subject to higher
18
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
distribution fee rates. Class I and Class W shares have not adopted a 12b-1
plan and make no payments thereunder, however, Class I and Class W shares
pay a service fee to the Funds' distributor for providing administrative and
shareholder services.
INDEMNIFICATIONS: Under the Trust's organizational documents, its officers
and trustees are indemnified against certain liabilities arising out of the
performance of their duties to the Trust. In addition, pursuant to
Indemnification Agreements between the Trust and each of the current
trustees who is not an "interested person," as defined in Section 2(a)(19)
of the 1940 Act, of the Trust (collectively, the "Disinterested Trustees"),
the Trust provides the Disinterested Trustees with a limited indemnification
against liabilities arising out of the performance of their duties to the
Trust, whether such liabilities are asserted during or after their service
as trustees. In addition, in the normal course of business the Trust enters
into contracts that contain the obligation to indemnify others. The Trust's
maximum exposure under these arrangements is unknown. Currently, however,
the Trust expects the risk of loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those
estimates and those differences could be significant. The following is a
summary of significant accounting policies consistently followed by the
Trust in the preparation of its financial statements:
SECURITY VALUATION
In accordance with the authoritative guidance on fair value measurements and
disclosures under GAAP, the Funds disclose the fair value of 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 is reported on a schedule following each Fund's Portfolio of
Investments.
19
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, the
Funds use the exchange that is the primary market for the security. Such
securities are generally categorized as Level 1. However, depending on the
foreign market, closing prices may be up to 15 hours old when they are used
to price a Funds' 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.
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.
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.
MASTER AGREEMENTS: The Funds have entered into Master Repurchase Agreements
("Master Agreements") with certain counterparties that govern repurchase
agreement transactions. The Master Agreements may contain provisions
regarding, among
20
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
other things, the parties' general obligations, representations, agreements,
collateral requirements and events of default. Collateral can be in the form
of cash or securities as agreed to by the Funds and applicable counterparty.
The 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. Upon the occurrence of an event of default, the
other party may elect to terminate early and cause settlement of all
repurchase agreement transactions 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 the Funds' counterparties to elect
early termination could cause the Funds to accelerate the payment of
liabilities. 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 of March 31, 2015, the repurchase agreements held by the Funds
are subject to master netting agreements. See the Portfolio of Investments
for more information about a Portfolio's holdings in repurchase agreements.
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 Fund held an undivided interest in the
joint repurchase agreement with State Street Bank & Trust Co.:
PERCENTAGE PRINCIPAL
FUND OWNERSHIP AMOUNT
---- ---------- ----------
International Dividend Strategy. 1.10% $2,236,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
State Street Bank & 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 VALUE
------------------ -------- ---------- ------------ ------------
U.S. Treasury Notes. 2.30% 11/15/2024 $ 91,160,000 $ 94,350,600
U.S. Treasury Notes. 1.75 03/21/2022 112,675,000 112,815,844
SECURITIES TRANSACTIONS, INVESTMENT INCOME, EXPENSES, DIVIDENDS AND
DISTRIBUTIONS TO SHAREHOLDERS: Security transactions are recorded on a trade
date basis. Realized gains and losses on the sale of investments are
calculated on the identified cost basis. For financial statement purposes,
the Funds amortize all premiums and accrete all discounts on fixed income
securities.
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.
21
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
Funds which earn foreign income and capital gains may be subject to foreign
withholding taxes and capital gains taxes at various rates. Under applicable
foreign law, a withholding of tax may be imposed on interest, dividends, and
capital gains from the sale of foreign securities at various rates.
Net investment income, expenses other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class
of shares based upon the relative net asset value of outstanding shares of
each class of shares at the beginning of the day (after adjusting for
current capital shares activity of the respective class).
Expenses common to all Funds, not directly related to individual Funds are
allocated among the Funds based upon relative net assets or other
appropriate allocation methods. In all other respects, expenses are charged
to each Fund as incurred on a specific identification basis.
Dividends from net investment income, if any, are normally paid quarterly
for the International Dividend Strategy Fund. The Japan Fund pays annually.
Capital gain distributions, if any, are paid annually. Each of the Funds
reserves 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 Funds record
dividends and distributions to their shareholders on the ex-dividend date.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the capital accounts at fiscal year end based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net assets
are not affected by these reclassifications.
Each Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income, including any net capital gains on investments, to its
shareholders. Each Fund also intends to distribute sufficient net investment
income and net capital gains, if any, so that each Fund will not be subject
to excise tax on undistributed income and gains. Therefore, no federal
income tax or excise tax provision is required.
Each Fund recognizes the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed each Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2011 - 2012 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.
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
22
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
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.
Note 3. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with SunAmerica. Under the Agreement, SunAmerica
provides continuous supervision of a Fund's portfolio and administers its
corporate affairs, subject to general review by the Trustees. In connection
therewith, SunAmerica furnishes the Funds with office facilities, maintains
certain of the Funds' books and records, and pays the salaries and expenses
of all personnel, including officers of the Funds who are employees of
SunAmerica and its affiliates.
The Funds pay SunAmerica a monthly investment advisory and management fee
calculated daily at the following annual percentages of each Fund's average
daily net assets:
MANAGEMENT
FUND FEES
---- ----------
International Dividend Strategy Fund. 1.00%
Japan Fund........................... 1.15
For the six months ended March 31, 2015, SunAmerica earned fees in the
amounts stated in the Statement of Operations.
The Japan Fund is subadvised by Wellington Management Company LLP
("Wellington Management") pursuant to a subadvisory agreement with
SunAmerica. Wellington Management receives an annual fee of 0.45% of average
daily net assets of the Japan Fund, which is paid by SunAmerica.
SunAmerica has contractually agreed to waive fees or reimburse expenses to
the extent necessary to cap the Funds' annual fund operating expenses at the
following percentages of each Class's average daily net assets. For the
purposes of waived fee and/or reimbursed expense calculations, annual fund
operating expenses shall not include extraordinary expenses, as determined
under generally accepted accounting principles, such as litigation, or
acquired fund fees and expenses, brokerage commissions and other
transactional expenses relating to the purchase and sale of portfolio
securities, interest, taxes governmental fees and other expenses not
incurred in the ordinary course of the Funds' business. The contractual fee
waivers and expense reimbursements will continue in effect indefinitely
unless terminated by the Trustees, including a majority of the Disinterested
Trustees.
FUND PERCENTAGE
---------------
International Dividend Strategy Fund Class A... 1.90%
International Dividend Strategy Fund Class B... 2.55
International Dividend Strategy Fund Class C... 2.55
International Dividend Strategy Fund Class I .. 1.80
International Dividend Strategy Fund Class W... 1.70
Japan Fund Class A............................. 1.90
Japan Fund Class B............................. 2.55
Japan Fund Class C............................. 2.55
Any contractual waivers and/or reimbursements made by SunAmerica are subject
to recoupment from the Funds within two years after the occurrence of the
waiver and/or reimbursement, provided that the Funds are able to effect such
payments to SunAmerica and remain in compliance with the expense limitations
in effect at the time the waivers and/or reimbursements were made.
23
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
For the six months ended March 31, 2015, pursuant to the contractual expense
limitations referred to above, SunAmerica has waived or reimbursed expenses
as follows:
OTHER EXPENSE
FUND REIMBURSED
---- -------------
Japan Fund. $ --
FUND AMOUNT
---- -------
International Dividend Strategy Fund Class A. $ --
International Dividend Strategy Fund Class B. 1,166
International Dividend Strategy Fund Class C. 4,125
International Dividend Strategy Fund Class I. --
International Dividend Strategy Fund Class W. 2,454
Japan Fund Class A........................... 38,703
Japan Fund Class B........................... 6,695
Japan Fund Class C........................... 11,868
For the six months ended March 31, 2015, the amounts recouped by SunAmerica
are as follows:
FUND AMOUNT
---- -------
International Dividend Strategy Class A. $ 6,467
International Dividend Strategy Class B. 148
International Dividend Strategy Class C. 11,465
International Dividend Strategy Class I. --
International Dividend Strategy Class W. --
Japan Fund Class A...................... --
Japan Fund Class B...................... --
Japan Fund Class C...................... --
At March 31, 2015, expenses previously waived and/or reimbursed by
SunAmerica that remain subject to recoupment and expires during the time
periods indicated are as follows:
OTHER EXPENSES REIMBURSED
----------------------------------------------------
FUND SEPTEMBER 30, 2015 SEPTEMBER 30, 2016 MARCH 31, 2017
---- ------------------ ------------------ --------------
Japan Fund. $24,835 $16,387 $--
CLASS SPECIFIC EXPENSES REIMBURSED
----------------------------------------------------
FUND SEPTEMBER 30, 2015 SEPTEMBER 30, 2016 MARCH 31, 2017
---- ------------------ ------------------ --------------
International Dividend Strategy Class A. $ -- $ -- $ --
International Dividend Strategy Class B. 7,738 7,910 1,166
International Dividend Strategy Class C. 11,795 5,661 4,125
International Dividend Strategy Class I. -- -- --
International Dividend Strategy Class W. -- -- 2,454
Japan Fund Class A...................... 34,461 71,156 38,703
Japan Fund Class B...................... 8,400 19,365 6,695
Japan Fund Class C...................... 10,088 24,375 11,868
The Trust, on behalf of each Fund, has entered into a Distribution Agreement
with AIG Capital Services, Inc. ("ACS" or the "Distributor"), an affiliate
of the Adviser. Each Fund has adopted a Distribution Plan on behalf of each
class of shares (other than Class I and Class W shares) (each, a "Plan" and
collectively, the "Plans") in accordance with the provisions of Rule 12b-1
under the 1940 Act, hereinafter referred to as the "Class A Plan," and
"Class C Plan." In adopting the Plans, the Trustees determined that there
was a reasonable likelihood that each such Plan would benefit the Fund and
the shareholders of the respective class. The sales charge and distribution
fees of a particular class will not be used to subsidize the sale of shares
of any other class.
24
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
Under the Class A Plan and Class C Plan, the Distributor receives a
distribution fee from a Fund at an annual rate of 0.10% and 0.75%,
respectively, of the average daily net assets of the Fund's Class A and
Class C shares 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 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
each Class' Plan may exceed the Distributor's distribution costs as
described above. The Plans provide that the Class A and Class C shares of
each Fund will pay the Distributor an account maintenance fee up to an
annual rate of 0.25% of the aggregate average daily net assets of such class
of shares for payments to compensate the Distributor and certain securities
firms for account maintenance activities. Accordingly, For the six months
ended March 31, 2015, ACS received fees (see Statement of Operations) based
upon the aforementioned rates.
In addition, ACS is paid a fee of 0.25% and 0.15% of average daily net
assets of Class I and Class W shares, respectively, in connection with
providing administrative and shareholder services to Class I and Class W
shareholders. For the six months ended March 31, 2015, ACS earned fees (see
Statement of Operations) based upon the aforementioned rates.
ACS receives sales charges on each Fund's Class A shares, portions of which
are reallocated 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 each
Fund's Class A and Class C shares. ACS has advised the funds that for the
six months ended March 31, 2015, the proceeds received from sales (and paid
out to affiliated and non-affiliated broker-dealers) and redemptions are as
follows:
CLASS A CLASS C
---------------------------------------------------- -------------
CONTINGENT CONTINGENT
SALES AFFILIATED NON-AFFILIATED DEFERRED DEFERRED
FUND CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES SALES CHARGES
---- -------- -------------- -------------- ------------- -------------
International Dividend Strategy Fund. $126,525 $34,982 $71,378 $6,852 $19,749
Japan Fund........................... 29,403 336 24,431 5,405 1,726
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, State Street Bank and Trust Company, in
connection with the services that it offers to the shareholders of the
Funds. Pursuant to the Service Agreement, the Funds pay a fee to SAFS for
services rendered based upon an annual rate of 0.22% of average daily net
assets. For the six months ended March 31, 2015, the Funds incurred the
following expenses which are included in transfer agent fees payable in the
Statement of Asset and Liabilities and in transfer agent fees and expenses
in the Statement of Operations to compensate SAFS pursuant to the terms of
the Service Agreement.
EXPENSE PAYABLE AT MARCH 31, 2015
-------------------------------- -------------------------------
FUND CLASS A CLASS C CLASS I CLASS W CLASS A CLASS C CLASS I CLASS W
---- -------- ------- ------- ------- ------- ------- ------- -------
International Dividend Strategy Fund.. $143,062 $41,754 $410 $897 $20,802 $6,220 $65 $878
Japan Fund............................ 35,192 4,372 -- -- 6,163 789 -- --
At March 31, 2015, the following affiliates owned a percentage of the
outstanding shares of the following funds: Focused Multi-Asset Strategy
Portfolio and Focused Balanced Strategy Portfolio owned 13% and 14%,
respectively, of the International Dividend Strategy Fund and Focused
Multi-Asset Strategy Portfolio and Focused Balanced Strategy Portfolio owned
48% and 11%, respectively, of the Japan Fund.
25
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
Note 4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the six months ended March 31, 2015 were as follows:
INTERNATIONAL
DIVIDEND STRATEGY
FUND JAPAN FUND
----------------- -----------
Purchases (excluding U.S. government securities)... $149,710,506 $21,310,232
Sales (excluding U.S. government securities)....... 193,055,422 26,111,030
Purchase of U.S. government securities............. -- --
Sales and maturities of U.S. government securities. -- --
Note 5. Federal Income Taxes
The following details the tax basis of distributions as well as the
components of distributable earnings. The tax basis components of
distributable earnings differ from the amounts reflected in the Statement of
Assets and Liabilities by temporary book/tax differences primarily arising
from wash sales, post October losses, investments in passive foreign
investment companies, investments in real estate investment trusts,
investments in regulated investment companies and investments in
partnerships, treatment of defaulted securities and derivative transactions.
DISTRIBUTABLE EARNINGS TAX DISTRIBUTIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2014 FOR THE YEAR ENDED SEPTEMBER 30, 2014
---------------------------------------- -------------------------------------
LONG-TERM UNREALIZED
ORDINARY GAINS/CAPITAL APPRECIATION ORDINARY LONG-TERM
INCOME LOSS CARRYOVER (DEPRECIATION)* INCOME CAPITAL GAINS
---------- -------------- --------------- ---------- -------------
International Dividend Strategy Fund. $ 402,718 $(95,426,863) $(11,750,768) $5,291,172 $ --
Japan Fund........................... 2,692,598 364,693 (329,621) 1,911,294 823,377
--------
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for federal income tax purposes, including short-term securities
and repurchase agreements, were as follows at March 31, 2015:
INTERNATIONAL
DIVIDEND JAPAN
STRATEGY FUND FUND
------------- -----------
Cost (tax basis)........................... $162,140,383 $35,374,316
============ ===========
Appreciation............................... 8,769,632 2,230,289
Depreciation............................... (23,431,988) (942,239)
------------ -----------
Net unrealized appreciation (depreciation). $(14,662,356) $ 1,288,050
============ ===========
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated,
as of September 30, 2014, which are available to offset future capital
gains, if any:
CAPITAL LOSS CARRYFORWARD+ UNLIMITED+
FUND ----------------------------------------------- --------------
2015 2016 2017 2018 ST LT
----------- ----------- ----------- ----------- ---------- ---
International Dividend Strategy Fund*. $31,528,888 $25,210,425 $16,578,456 $19,381,525 $2,727,569 $--
Japan Fund............................ -- -- -- -- -- --
--------
+ On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted, which changed various technical rules
governing the tax treatment of regulated investment companies. The changes
are generally effective for taxable years beginning after the date of
enactment. Under the Act, the fund will be permitted to carry forward
capital losses incurred in taxable years beginning after the date of
enactment for an unlimited period. However, any losses incurred during those
future taxable years will be required to be utilized prior to the losses
incurred in pre-enactment taxable years, which carry an expiration date. As
a result of this ordering rule, pre-enactment capital loss carryforwards may
be more likely to expire unused. 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 capital loss carryforwards include realized capital losses from the
acquisition of other funds. Certain losses may be subject to annual
limitations imposed by the Internal Revenue Code. Therefore, it is possible
that not all of the capital losses will be available for use. As of
September 30, 2014, based on current tax law, the International Dividend
Strategy Fund has $0 of capital losses that will not be available for use.
26
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
Note 6. Capital Share Transactions
Transactions in capital shares of each class of each Fund were as follows:
INTERNATIONAL DIVIDEND STRATEGY FUND
------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- --------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE PERIOD ENDED FOR THE
MARCH 31, 2015 YEAR ENDED JANUARY 27, 2015+ YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2014 (UNAUDITED) SEPTEMBER 30, 2014
------------------------ ------------------------ --------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ -------- ----------- -------- -----------
Shares sold(1)(2)....... 2,722,566 $ 27,884,735 10,141,651 $122,319,215 75,544 $ 739,591 706,588 $ 7,873,260
Reinvested dividends.... 49,114 464,115 278,544 3,325,814 2,000 17,288 13,528 148,269
Shares redeemed(1)(2)... (6,287,942) (63,255,012) (4,515,532) (52,201,032) (887,830) (8,119,762) (478,112) (5,107,918)
---------- ------------ ---------- ------------ -------- ----------- -------- -----------
Net increase (decrease). (3,516,262) $(34,906,162) 5,904,663 $ 73,443,997 (810,286) $(7,362,883) 242,004 $ 2,913,611
========== ============ ========== ============ ======== =========== ======== ===========
INTERNATIONAL DIVIDEND STRATEGY FUND
------------------------------------------------------------------------------------------------
CLASS C CLASS I
-------------------------------------------------- --------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE
MARCH 31, 2015 YEAR ENDED MARCH 31, 2015 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2014 (UNAUDITED) SEPTEMBER 30, 2014
------------------------ ------------------------ --------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ -------- ----------- -------- -----------
Shares sold............. 531,972 $ 4,961,086 2,566,050 $ 28,424,533 -- $ -- -- $ --
Reinvested dividends.... 9,605 82,893 64,750 706,088 181 1,729 1,694 19,978
Shares redeemed......... (1,313,035) (12,144,714) (521,134) (5,543,315) (2,654) (27,306) (34,379) (763,521)
---------- ------------ ---------- ------------ -------- ----------- -------- -----------
Net increase (decrease). (771,458) $ (7,100,735) 2,109,666 $ 23,587,306 (2,473) $ (25,577) (32,685) $ (743,543)
========== ============ ========== ============ ======== =========== ======== ===========
INTERNATIONAL DIVIDEND STRATEGY FUND
--------------------------------------------------
CLASS W
--------------------------------------------------
FOR THE
PERIOD JANUARY 29, 2015*
THROUGH
MARCH 31, 2015
(UNAUDITED)
------------------------
SHARES AMOUNT
---------- ------------
Shares sold............. 1,015,060 $ 9,593,562
Reinvested dividends.... -- --
Shares redeemed......... (49,389) (489,183)
---------- ------------
Net increase (decrease). 965,671 $ 9,104,379
========== ============
--------
(1)For the six months ended March 31, 2015, includes automatic conversion of
406,607 shares of Class B shares in the amount of $3,699,759 to 371,580
shares of Class A shares in the amount of $3,699,759.
(2)For the year ended September 30, 2014, includes automatic conversion of
45,073 shares of Class B shares in the amount of $486,223 to 41,253 shares
of Class A shares in the amount of $486,223.
+ See Note 1
* Commencement of operations
27
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
JAPAN FUND JAPAN FUND
---------------------------------------------- --------------------------------------
CLASS A CLASS B
---------------------------------------------- --------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE PERIOD ENDED FOR THE
MARCH 31, 2015 YEAR ENDED JANUARY 27, 2015+ YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2014 (UNAUDITED) SEPTEMBER 30, 2014
--------------------- ----------------------- ------------------ ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- ----------- ------- --------- ------- ---------
Shares sold(1).......... 499,208 $ 3,584,268 1,031,698 $ 7,749,168 1,981 $ 13,696 58,674 $ 441,558
Reinvested dividends.... 343,801 2,275,963 73,705 468,763 6,208 39,608 4,679 33,410
Shares redeemed(1)...... (908,391) (6,528,183) (1,241,592) (8,747,150) (74,653) (498,059) (27,265) (197,151)
-------- ----------- ---------- ----------- ------- --------- ------- ---------
Net increase (decrease). (65,382) $ (667,952) (136,189) $ (529,219) (66,464) $(444,755) 36,088 $ 277,817
======== =========== ========== =========== ======= ========= ======= =========
JAPAN FUND
----------------------------------------------
CLASS C
----------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE
MARCH 31, 2015 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 2014
--------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- -----------
Shares sold............. 152,720 $ 1,046,139 233,230 $ 1,735,449
Reinvested dividends.... 28,554 181,886 1,039 6,443
Shares redeemed......... (172,440) (1,180,874) (21,622) (145,195)
-------- ----------- ---------- -----------
Net increase (decrease). 8,834 $ 47,151 212,647 $ 1,596,697
======== =========== ========== ===========
--------
(1)For the six months ended March 31, 2015, includes automatic conversion of
36,409 shares of Class B shares in the amount of $242,562 to 35,052 shares
of Class A shares in the amount of $242,562.
(2)For the year ended September 30, 2014, includes automatic conversion of
4,388 shares of Class B shares in the amount of $32,062 to 4,236 shares of
Class A shares in the amount of $32,062.
+ See Note 1
Note 7. Line of Credit
The SunAmerica family of mutual funds have 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. Borrowings under the line of credit will commence when the
respective Fund's cash shortfall exceeds $100,000. For the six months ended
March 31, 2015, the following Funds had borrowings:
AVERAGE WEIGHTED
DAYS INTEREST DEBT AVERAGE
FUND OUTSTANDING CHARGES UTILIZED INTEREST
---- ----------- -------- ---------- --------
International Dividend Strategy Fund. 18 $1,177 $1,739,970 1.36%
Japan Fund........................... 5 96 500,108 1.38
At March 31, 2015, there were no borrowings outstanding.
Note 8. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the SEC, 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 six months ended March 31, 2015, none of the Funds participated in
this program.
28
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2015 -- (UNAUDITED)
(CONTINUED)
Note 9. Trustees' Retirement Plan
The Board has adopted the SunAmerica Disinterested Trustees' and Directors'
Retirement Plan (the "Retirement Plan") effective January 1, 1993, as
amended, for the Disinterested Trustees. The Retirement Plan provides
generally that a Disinterested Trustee may become a participant
("Participant") in the Retirement Plan if he or she has at least 10 years of
consecutive service as a Disinterested Trustee of any of the adopting
SunAmerica mutual funds (the "Adopting Funds") or has attained the age of 60
while a Trustee and completed five (5) consecutive years of service as a
Trustee of any Adopting Fund (an "Eligible Trustee/Director"). Pursuant to
the Retirement Plan, an Eligible Trustee may receive benefits upon (i) his
or her death or disability while a Trustee or (ii) the termination of his or
her tenure as a Trustee, other than removal for cause from each of the
Adopting Funds with respect to which he or she is an Eligible Trustee.
As of each of the first 10 birthdays after becoming a Participant and on
which he or she is both a Trustee and Participant, each Eligible Trustee
will be credited with an amount equal to 50% of his or her regular fees
(excluding committee fees) for services as a Disinterested Trustee of each
Adopting Fund for the calendar year in which such birthday occurs. In
addition, an amount equal to 8.50% of any amounts credited under the
preceding statement during prior years is added to each Eligible Trustee's
account. The rights of any Participant to benefits under the Retirement Plan
shall be an unsecured claim against the assets of the Adopting Funds. An
Eligible Trustee may receive any benefits payable under the Retirement Plan,
at his or her election, either in one lump sum or in up to 15 annual
installments. Any undistributed amounts shall continue to accrue interest at
8.50%.
Effective December 3, 2008, the Retirement Plan was amended to, among other
things, (1) freeze the Retirement Plan as to future accruals for active
Participants as of December 31, 2008, (2) prohibit Disinterested Trustees
from first becoming participants in the Retirement Plan after December 31,
2008 and (3) permit active Participants to elect to receive a distribution
of their entire Retirement Plan account balance in 2009. The freeze on
future accruals does not apply to Participants that have commenced receiving
benefits under the Retirement Plan on or before December 31, 2008.
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.
RETIREMENT PLAN RETIREMENT PLAN RETIREMENT PLAN
FUND LIABILITY EXPENSE PAYMENTS
---- --------------- --------------- ---------------
AS OF MARCH 31, 2015
-----------------------------------------------
International Dividend Strategy Fund. $18 $1 $426
Note 10. Investment Concentration
The Funds may invest internationally, including in "emerging market"
countries. Emerging market securities involve risks not typically associated
with investing in securities of issuers in more developed markets. The
markets of emerging market countries are typically more volatile and
potentially less liquid than more developed countries. These securities may
be denominated in currencies other than U.S. dollars. While investing
internationally may reduce portfolio risk by increasing the diversification
of portfolio investments, the value of the investment may be affected by
fluctuating currency values, changing local and regional economic, political
and social conditions, and greater market volatility. In addition, because
the Japan Fund concentrates its investments in Japan, the Fund's performance
is expected to be closely tied to social, political and economic conditions
of that country. These risks are primary risks of the Japan Fund. At
March 31, 2015, the Japan Fund had 94.9% of its net assets invested in
equity securities domiciled in Japan.
29
[LOGO]
HARBORSIDE FINANCIAL CENTER
3200 PLAZA 5
JERSEY CITY, NJ 07311-4992
TRUSTEES SHAREHOLDER SERVICING This report is submitted
Richard W. Grant AGENT solely for the general
Peter A. Harbeck SunAmerica Fund information of
Dr. Judith L. Craven Services, Inc. shareholders of the
William F. Devin Harborside Financial Funds. Distribution of
Stephen J. Gutman Center this report to persons
William J. Shea 3200 Plaza 5 other than shareholders
OFFICERS Jersey City, NJ of the Funds is
John T. Genoy, President 07311-4992 authorized only in
and Chief Executive CUSTODIAN AND TRANSFER con-nection with a
Officer AGENT currently effective
Kara Murphy, Vice State Street Bank and pro-spectus, setting
President Trust Company forth details of the
James Nichols, Vice P.O. Box 5607 Funds, which must precede
President Boston, MA 02110 or accom-pany this report.
Katherine Stoner, Vice VOTING PROXIES ON TRUST DELIVERY OF SHAREHOLDER
President and Chief PORTFOLIO SECURITIES DOCUMENTS
Compliance Officer A description of the The Funds have adopted a
Gregory N. Bressler, policies and procedures policy that allows them
Secretary that the Trust uses to to send only one copy of
Gregory R. Kingston, determine how to vote a Fund's prospectus,
Treasurer proxies relating to proxy material, annual
Shawn Parry, Vice securities held in a report and semi-annual
President and Fund's portfolio which is report (the "shareholder
Assistant Treasurer available in the Trust's documents") to
Donna McManus, Vice Statement of Additional shareholders with
President and Information, may be multiple accounts
Assistant Treasurer obtained without charge residing at the same
Kathleen Fuentes, Chief upon request, by calling "household." This
Legal Officer and (800) 858-8850. This practice is called
Assistant Secretary in-formation is also householding and reduces
Nori L. Gabert, Vice available from the EDGAR Fund expenses, which
President and database on the U.S. benefits you and other
Assistant Secretary Securities and Ex-change shareholders. Unless the
Matthew Hackethal, Commission's website at Funds receive
Anti-Money Laundering http://www.sec.gov. instructions to the
Compliance Officer PROXY VOTING RECORD ON con-trary, you will only
INVESTMENT ADVISER SUNAMERICA EQUITY FUNDS receive one copy of the
SunAmerica Asset Information regarding how shareholder documents.
Management, LLC SunAmerica Equity Funds The Funds will continue
Harborside Financial voted proxies relating to to household the
Center securities held in share-holder documents
3200 Plaza 5 SunAmerica Equity Funds indefinitely, until we
Jersey City, NJ during the most recent are instructed otherwise.
07311-4992 twelve month period ended If you do not wish to
DISTRIBUTOR June 30 is available, participate in
AIG Capital Services, once filed with the U.S. householding, please
Inc. Securities and Exchange contact Shareholder
Harborside Financial Commission, without Services at (800)
Center charge, upon request, by 858-8850 ext. 6010 or
3200 Plaza 5 calling (800) 858-8850 or send a written request
Jersey City, NJ on the U.S. Securities with your name, the name
07311-4992 and Exchange Commission's of your fund(s) and your
website at account number(s) to
http://www.sec.gov. SunAmerica Mutual Funds
DISCLOSURE OF QUARTERLY c/o BFDS, P.O. Box
PORTFOLIO HOLDINGS 219186, Kansas City MO,
The Trust is required to 64121-9186. We will
file its complete resume individual
schedule of portfolio mailings for your account
holdings with the U.S. within thirty (30) days
Securities and Exchange of receipt of your
Commission for its first request.
and third fiscal quarters The accompanying report
on Form N-Q. The Trust's has not been audited by
Forms N-Q are available independent accountants
on the U.S. Securities and accordingly no
and Exchange Commission's opinion has been
website at expressed thereon.
http://www.sec.gov. You
can also review and
obtain copies of the
Forms N-Q at the U.S.
Securities and Exchange
Com-mission's Public
Reference Room in
Wash-ington, DC
(information on the
operation of Public
Reference Room may be
obtained by calling
1-800-SEC-0330).
[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.
FUNDS 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
EQSAN - 3/15
[LOGO]
AIG
Sun America
Mutual Funds
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees that were
implemented after the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a-
101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270. 30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Exhibits.
(a) (1) Not applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b)under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Equity Funds
By: /s/ John T. Genoy
------------------
John T. Genoy
President
Date: June 08, 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 08, 2015
By: /s/ Gregory R. Kingston
-------------------
Gregory R. Kingston
Treasurer
Date: June 08, 2015