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, 2016
-------------------------
Item 1. Reports to Stockholders
[PHOTO]
SEMI-ANNUAL REPORT 2016
SUNAMERICA
Equity Funds
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, 2016. It was a period wherein global
equity performance was driven largely by economic conditions, monetary policies
of global central banks, concerns surrounding geopolitical events and falling
oil prices.
Global equity markets gained ground during the semi-annual period overall, with
the MSCI ACWI/*/ returning 5.28% for the six months ended March 31, 2016.
However, this solid positive return masks what, during the period, was great
volatility.
As the semi-annual period began in October 2015, U.S. and international
equities saw a strong rebound following a volatile third quarter of 2015 during
which global equities had sold off. U.S. equity markets maintained their focus
on the timing of the Federal Reserve's (the "Fed's") initial rate hike.
International equities reacted positively to a new Chinese rate cut, hints from
the European Central Bank (ECB) that it might ease further and the potential
for the Bank of England to delay increasing interest rates following
disappointing economic growth there.
International stocks declined in November 2015, though dovish comments from the
ECB suggested it was prepared to act to raise Eurozone inflation, which buoyed
European equities. Asian developed equity markets were driven lower by
disappointing economic data from China. The Bank of Japan kept monetary policy
unchanged at its November 2015 policy meeting, despite a contraction of third
quarter 2015 GDP that put Japan's economy into a technical recession. U.S.
stocks, in contrast, finished November 2015 roughly flat. In December 2015, the
Fed finally increased the targeted federal funds rate, its first rate hike
since 2006. The Fed's emphasis in its statement on "gradual" adjustments to
policy going forward, helped to somewhat calm the markets. Still, divergent
global monetary policy remained in focus as the Bank of Japan announced
supplementary support for its quantitative and qualitative easing programs.
Early in 2016, global equities experienced a virtually worldwide sell-off,
triggered by investor concerns of an intensifying economic slowdown in China
and exacerbated by a plunge in oil prices to their lowest level since 2003. The
Fed's statement in January 2016 acknowledged the risks from international
financial markets and was also somewhat bearish on U.S. economic growth. The
ECB emphasized the potential for additional stimulative measures. The Bank of
Japan, in a surprise move, introduced a negative interest rate, reaffirming its
commitment to achieving a 2% inflation target. This sparked a relief rally in
Japan, but the effects were short-lived, as Japanese equities quickly gave up
their gains.
Market sentiment appeared to improve in February, as central banks outside the
U.S. increasingly acknowledged rising economic risks and sent more dovish
signals. For example, the ECB hinted at additional stimulus, while the People's
Bank of China signaled further monetary easing and a cut in its reserve
requirement ratio for banks. The Fed stressed it was not on a "pre-set" path
for rate hikes. U.S. and international equity markets were further supported in
the latter half of February 2016 by an oil price recovery, albeit a modest one.
Global equity markets rallied in March 2016, as investor risk tolerance
returned, recovering from early calendar year losses. Further, economic news
from China improved, U.S. oil production showed signs of slowing, and commodity
prices appeared to stabilize. In turn, global equity markets overall posted
their strongest gains since October 2015, with the MSCI ACWI returning 7.41% in
March 2016. The rally was led by sharp recoveries in emerging markets and by
the energy sector, with regional gains led by China, Brazil, Russia and India.
After a sustained period of appreciation, the U.S. dollar weakened in March
against the euro, Swiss franc, British pound sterling and Japanese yen due to
generally tighter financial conditions, mixed U.S. economic data and the Fed's
more dovish commentary.
2
Against this backdrop, international equities, as measured by the MSCI ACWI
ex-U.S. (Net)/*/, posted a return of 2.86% in U.S. dollar terms for the
six-month period ended March 31, 2016. Japanese equities, as measured by the
MSCI Japan Index (Net)/*/, performed similarly, generating a return of 2.22% in
U.S. dollar terms for the same period. To compare, U.S. equities, as measured
by the S&P 500(R) Index/*/, returned 8.49% for the same six-month period.
On the following pages, you will find financial statements and portfolio
information for each of the SunAmerica Equity Funds.
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.
* The Morgan Stanley Capital International All Country World Index (MSCI 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 provide a broad measure of
the global equity market performance of 45 developed and emerging markets
throughout the world, 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. 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 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, 2016 -- (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, 2015 and held until March 31, 2016.
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, 2016" 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, 2016" 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,
2016" 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, 2016" 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, 2016" 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,
2016" 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, 2016" 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, 2016 -- (unaudited) (continued)
Actual Hypothetical
----------------------------------------- -----------------------------------------
Ending Account
Ending Account Expense Paid Value using Expense Paid
Value Using During the a 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 2015 2016 2016 2015 2016 2016
---- ------------- -------------- ------------ ------------- -------------- ------------
International Dividend Strategy Fund
Class A#........................... $1,000.00 $1,027.09 $ 9.63 $1,000.00 $1,015.50 $ 9.57
Class C#........................... $1,000.00 $1,024.11 $12.90 $1,000.00 $1,012.25 $12.83
Class I............................ $1,000.00 $1,028.26 $ 9.03 $1,000.00 $1,016.10 $ 8.97
Class W#........................... $1,000.00 $1,030.12 $ 8.63 $1,000.00 $1,016.50 $ 8.57
Japan Fund#
Class A............................ $1,000.00 $ 974.31 $ 9.38 $1,000.00 $1,015.50 $ 9.57
Class C............................ $1,000.00 $ 971.53 $12.57 $1,000.00 $1,012.25 $12.83
Annualized
Expense
Fund Ratio*
---- ----------
International Dividend Strategy Fund
Class A#........................... 1.90%
Class C#........................... 2.55%
Class I............................ 1.78%
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 183 days divided by 366
days (to reflect the one-half year period). 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 Period Ended March 31, 2016"
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
Period Ended March 31, 2016" and the annualized "Expense Ratio" would have
been lower.
5
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- March 31, 2016 -- (unaudited)
International
Dividend
Strategy Fund Japan Fund
------------- -----------
ASSETS:
Investments at value (unaffiliated)*................ $ 94,827,020 $36,991,675
Repurchase agreements (cost approximates value)..... 1,053,000 202,000
------------- -----------
Total investments.................................. 95,880,020 37,193,675
------------- -----------
Cash................................................ 2,160 670
Foreign cash*....................................... 362,860 156,489
Receivable for:
Fund shares sold................................... 40,209 41,497
Dividends and interest............................. 555,055 408,640
Investments sold................................... -- 242,337
Prepaid expenses and other assets................... 5,047 4,321
Due from investment adviser for expense
reimbursements/fee waivers......................... 20,947 11,956
------------- -----------
Total assets........................................ 96,866,298 38,059,585
------------- -----------
LIABILITIES:
Payable for:
Fund shares redeemed............................... 371,044 135,505
Investments purchased.............................. -- 345,632
Investment advisory and management fees............ 81,685 37,134
Distribution and service maintenance fees.......... 36,526 15,002
Transfer agent fees and expenses................... 22,808 7,490
Trustees' fees and expenses........................ 1,319 940
Other accrued expenses............................. 219,348 34,955
------------- -----------
Total liabilities................................... 732,730 576,658
------------- -----------
Net Assets.......................................... $ 96,133,568 $37,482,927
============= ===========
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01 par value...... $ 118,421 $ 59,595
Paid-in capital..................................... 220,883,102 43,243,014
------------- -----------
221,001,523 43,302,609
Accumulated undistributed net investment income
(loss)............................................. (366,005) (185,039)
Accumulated undistributed net realized gain (loss)
on investments, futures contracts, options
contracts, securities sold short, and foreign
exchange transactions.............................. (118,648,230) (1,845,827)
Unrealized appreciation (depreciation) on
investments........................................ (5,855,041) (3,776,809)
Unrealized foreign exchange gain (loss) on other
assets and liabilities............................. 1,321 (12,007)
------------- -----------
Net Assets.......................................... $ 96,133,568 $37,482,927
============= ===========
*Cost
Investments (unaffiliated)......................... $ 100,682,061 $40,768,484
============= ===========
Foreign cash....................................... $ 360,848 $ 168,494
============= ===========
See Notes to Financial Statements
6
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- March 31, 2016 -- (unaudited)
(continued)
International
Dividend
Strategy Fund Japan Fund
------------- -----------
Class A (unlimited shares authorized):
Net assets.......................................... $72,804,128 $30,990,668
Shares of beneficial interest issued and outstanding 8,819,511 4,885,303
Net asset value and redemption price per share...... $ 8.25 $ 6.34
Maximum sales charge (5.75% of offering price)...... $ 0.50 $ 0.39
----------- -----------
Maximum offering price to public.................... $ 8.75 $ 6.73
=========== ===========
Class C (unlimited shares authorized):
Net assets.......................................... $16,428,006 $ 6,492,259
Shares of beneficial interest issued and outstanding 2,187,183 1,074,223
Net asset value, offering and redemption price per
share (excluding any applicable contingent
deferred sales charge)............................. $ 7.51 $ 6.04
=========== ===========
Class I (unlimited shares authorized):
Net assets.......................................... $ 270,650 $ --
Shares of beneficial interest issued and outstanding 32,412 --
Net asset value, offering and redemption price per
share.............................................. $ 8.35 $ --
=========== ===========
Class W (unlimited shares authorized):
Net assets.......................................... $ 6,630,784 $ --
Shares of beneficial interest issued and outstanding 803,031 --
Net asset value, offering and redemption price per
share.............................................. $ 8.26 $ --
=========== ===========
See Notes to Financial Statements
7
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the six months ended March 31, 2016 --
(unaudited)
International
Dividend
Strategy Fund Japan Fund
------------- -----------
INVESTMENT INCOME:
Dividends (unaffiliated)............................................................. $ 1,175,914 $ 404,365
Interest (unaffiliated).............................................................. 42 22
----------- -----------
Total investment income*............................................................ 1,175,956 404,387
----------- -----------
EXPENSES:
Investment advisory and management fees.............................................. 499,942 238,457
Distribution and service maintenance fees:
Class A............................................................................. 126,543 58,984
Class C............................................................................. 94,827 38,829
Service fees:
Class I............................................................................. 343 --
Class W............................................................................. 6,328 --
Transfer agent fees and expenses:
Class A............................................................................. 90,302 38,046
Class C............................................................................. 23,109 9,201
Class I............................................................................. 339 --
Class W............................................................................. 10,720 --
Registration fees:
Class A............................................................................. 51,881 9,694
Class C............................................................................. 18,267 4,326
Class W............................................................................. 10,958 --
Custodian and accounting fees........................................................ 38,145 13,542
Reports to shareholders.............................................................. 33,643 3,140
Audit and tax fees................................................................... 29,285 29,285
Legal fees........................................................................... 8,453 2,341
Directors' fees and expenses......................................................... 4,394 2,251
Interest expense..................................................................... 867 27
Other expenses....................................................................... 25,050 13,944
----------- -----------
Total expenses before fee waivers, expense reimbursements, and expense recoupments.. 1,073,396 462,067
Net (Fees waived and expenses reimbursed)/recouped by investment adviser (Note 3)... (69,807) (42,852)
----------- -----------
Net expenses........................................................................ 1,003,589 419,215
----------- -----------
Net investment income (loss)........................................................... 172,367 (14,828)
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)**............................... (3,335,564) (1,476,869)
Net realized foreign exchange gain (loss) on other assets and liabilities.............. 8,099 (1,345)
----------- -----------
Net realized gain (loss) on investments and foreign currencies......................... (3,327,465) (1,478,214)
----------- -----------
Change in unrealized appreciation (depreciation) on investments (unaffiliated)......... 5,639,949 248,749
Change in unrealized foreign exchange gain (loss) on other assets and liabilities...... 32,360 8,134
----------- -----------
Net unrealized gain (loss) on investments and foreign currencies....................... 5,672,309 256,883
----------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies.......... 2,344,844 (1,221,331)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 2,517,211 $(1,236,159)
=========== ===========
* Net of foreign withholding taxes on interest and dividends of........................ $ 82,841 $ 44,929
=========== ===========
** Net of foreign withholding taxes on capital gains of................................ $ 2,825 $ --
=========== ===========
See Notes to Financial Statements
8
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- March 31, 2016
International
Dividend
Strategy Fund
---------------------------
For the
six months
ended For the Year
March 31, ended
2016 September 30,
(unaudited) 2015
------------ -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........................................................... $ 172,367 $ 3,403,235
Net realized gain (loss) on investments and foreign currencies......................... (3,327,465) (51,329,771)
Net unrealized gain (loss) on investments and foreign currencies....................... 5,672,309 (864,632)
------------ -------------
Net increase (decrease) in net assets resulting from operations.......................... 2,517,211 (48,791,168)
------------ -------------
Distributions to shareholders from:
Net investment income (Class A)........................................................ (162,565) (2,162,271)
Net investment income (Class B)#....................................................... -- (22,454)
Net investment income (Class C)........................................................ (17,639) (561,676)
Net investment income (Class I)........................................................ (659) (8,089)
Net investment income (Class W)#....................................................... (23,624) (301,775)
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...................................................... (204,487) (3,056,265)
------------ -------------
Net increase (decrease) in net assets resulting from capital share transactions (Note 6). (11,520,507) (60,269,130)
------------ -------------
Total increase (decrease) in net assets.................................................. (9,207,783) (112,116,563)
NET ASSETS:
Beginning of period...................................................................... $105,341,351 $ 217,457,914
------------ -------------
End of period+........................................................................... $ 96,133,568 $ 105,341,351
============ =============
+ Includes accumulated undistributed net investment income (loss)........................ $ (366,005) $ (333,885)
============ =============
# See Note 1
Japan Fund
-------------------------
For the
six months
ended For the Year
March 31, ended
2016 September 30,
(unaudited) 2015
----------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)........................................................... $ (14,828) $ (210,083)
Net realized gain (loss) on investments and foreign currencies......................... (1,478,214) 1,392,129
Net unrealized gain (loss) on investments and foreign currencies....................... 256,883 (4,049,111)
----------- -----------
Net increase (decrease) in net assets resulting from operations.......................... (1,236,159) (2,867,065)
----------- -----------
Distributions to shareholders from:
Net investment income (Class A)........................................................ -- (215,951)
Net investment income (Class B)#....................................................... -- (932)
Net investment income (Class C)........................................................ -- (7,704)
Net investment income (Class I)........................................................ -- --
Net investment income (Class W)#....................................................... -- --
Net realized gain on securities (Class A).............................................. (1,096,454) (2,474,268)
Net realized gain on securities (Class B)#............................................. -- (38,677)
Net realized gain on securities (Class C).............................................. (263,731) (319,855)
Net realized gain on securities (Class I).............................................. -- --
Net realized gain on securities (Class W)#............................................. -- --
----------- -----------
Total distributions to shareholders...................................................... (1,360,185) (3,057,387)
----------- -----------
Net increase (decrease) in net assets resulting from capital share transactions (Note 6). 495,396 5,293,840
----------- -----------
Total increase (decrease) in net assets.................................................. (2,100,948) (630,612)
NET ASSETS:
Beginning of period...................................................................... $39,583,875 $40,214,487
----------- -----------
End of period+........................................................................... $37,482,927 $39,583,875
=========== ===========
+ Includes accumulated undistributed net investment income (loss)........................ $ (185,039) $ (170,211)
=========== ===========
# 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 Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets
------------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- -------- ----------
Class A
-
09/30/11 $11.84 $ 0.08 $(1.64) $(1.56) $(0.00) $-- $(0.00) $10.28 (13.17)% $ 50,177 1.84%
09/30/12 10.28 0.23 0.66 0.89 (0.26) -- (0.26) 10.91 8.77 51,309 1.90(3)
09/30/13 10.91 0.47 0.50 0.97 (0.47) -- (0.47) 11.41 9.24 96,020 1.90(3)
09/30/14 11.41 0.40 (0.14) 0.26 (0.34) -- (0.34) 11.33 2.20 162,284 1.90(3)
09/30/15 11.33 0.23 (3.29) (3.06) (0.22) -- (0.22) 8.05 (27.24) 71,969 1.88(3)
03/31/16(5) 8.05 0.02 0.20 0.22 (0.02) -- (0.02) 8.25 2.71 72,804 1.90(3)(4)
Class C
-
09/30/11 10.93 (0.02) (1.49) (1.51) -- -- -- 9.42 (13.82) 13,190 2.55(3)
09/30/12 9.42 0.14 0.61 0.75 (0.14) -- (0.14) 10.03 7.98 12,571 2.55(3)
09/30/13 10.03 0.36 0.47 0.83 (0.41) -- (0.41) 10.45 8.56 24,776 2.55(3)
09/30/14 10.45 0.30 (0.13) 0.17 (0.27) -- (0.27) 10.35 1.56 46,349 2.55(3)
09/30/15 10.35 0.16 (3.01) (2.85) (0.16) -- (0.16) 7.34 (27.70) 22,445 2.55(3)
03/31/16(5) 7.34 (0.01) 0.19 0.18 (0.01) -- (0.01) 7.51 2.41 16,428 2.55(3)(4)
Class I
-
09/30/11 11.93 0.08 (1.65) (1.57) (0.00) -- (0.00) 10.36 (13.13) 1,625 1.80(3)
09/30/12 10.36 0.24 0.66 0.90 (0.27) -- (0.27) 10.99 8.84 1,289 1.80(3)
09/30/13 10.99 0.44 0.56 1.00 (0.48) -- (0.48) 11.51 9.41 1,184 1.80(3)
09/30/14 11.51 0.32 (0.02) 0.30 (0.36) -- (0.36) 11.45 2.45 426 1.77(3)
09/30/15 11.45 0.26 (3.34) (3.08) (0.23) -- (0.23) 8.14 (27.13) 283 1.71
03/31/16(5) 8.14 0.02 0.21 0.23 (0.02) -- (0.02) 8.35 2.83 271 1.78(3)(4)
Class W
-
01/29/15*-09/30/15 9.80 0.27 (1.84) (1.57) (0.19) -- (0.19) 8.04 (16.23) 10,644 1.70(3)(4)
03/31/16(5) 8.04 0.03 0.21 0.24 (0.02) -- (0.02) 8.26 3.01 6,631 1.70(3)(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets Turnover
------------- ---------
0.63% 262%
2.07(3) 248
4.42(3) 32
3.47(3) 80
2.31(3) 160
0.46(3)(4) 10
(0.14)(3) 262%
1.38(3) 248
3.70(3) 32
2.85(3) 80
1.69(3) 160
(0.21)(3)(4) 10
0.59(3) 262%
2.14(3) 248
3.98(3) 32
2.66(3) 80
2.61 160
0.58(3)(4) 10
3.98(3)(4) 160%
0.63(3)(4) 10
--------
* 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 (recoupments).
(3)Net of the following expense reimbursements (recoupments) (based on average
net assets) (See Note 3):
09/30/11 09/30/12 09/30/13 09/30/14 09/30/15 03/31/16(4)(5)
-------- -------- -------- -------- -------- --------------
International Dividend Strategy Class A. -- % 0.25% 0.16% (0.09)% (0.01)% 0.12%
International Dividend Strategy Class C. (0.00) 0.33 0.20 (0.05) (0.02) 0.16
International Dividend Strategy Class I. (0.09) 0.17 0.09 (0.09) -- --
International Dividend Strategy Class W. -- -- -- -- 0.20 0.24
(4)Annualized
(5)Unaudited
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 Ratio of
Value investment realized Total from from net from Total Value end of expenses
beginning income and investment investment capital distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3)
------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- -------------
Class A
-
09/30/11 $9.10 $ 0.00 $(1.11) $(1.11) $(0.26) $ -- $(0.26) $7.73 (12.68)% $31,292 1.90%
09/30/12 7.73 0.04 0.02 0.06 (0.01) (1.37) (1.38) 6.41 1.38 20,714 1.90
09/30/13 6.41 (0.01) 1.86 1.85 (0.16) -- (0.16) 8.10 29.54 25,053 1.90
09/30/14 8.10 (0.01) 0.37 0.36 (0.15) (0.58) (0.73) 7.73 4.81 35,178 1.90
09/30/15 7.73 (0.03) (0.36) (0.39) (0.05) (0.58) (0.63) 6.71 (4.91) 32,241 1.90
03/31/16(5) 6.71 0.00 (0.15) (0.15) -- (0.22) (0.22) 6.34 (2.57) 30,991 1.90(4)
Class C
-
09/30/11 8.92 (0.04) (1.11) (1.15) (0.23) -- (0.23) 7.54 (13.35) 888 2.55
09/30/12 7.54 (0.02) 0.05 0.03 -- (1.37) (1.37) 6.20 0.85 438 2.55
09/30/13 6.20 (0.03) 1.77 1.74 (0.10) -- (0.10) 7.84 28.58 2,222 2.55
09/30/14 7.84 (0.05) 0.34 0.29 (0.12) (0.58) (0.70) 7.43 4.07 4,542 2.55
09/30/15 7.43 (0.07) (0.35) (0.42) (0.01) (0.58) (0.59) 6.42 (5.52) 7,343 2.55
03/31/16(5) 6.42 (0.02) (0.14) (0.16) -- (0.22) (0.22) 6.04 (2.85) 6,492 2.55(4)
Ratio
of net
investment
income (loss)
to average Portfolio
net assets(3) Turnover
------------- ---------
0.04% 79%
0.52 192
(0.12) 162
(0.19) 111
(0.46) 144
0.08(4) 78
(0.48) 79%
(0.23) 192
(0.43) 162
(0.65) 111
(0.95) 144
(0.73)(4) 78
--------
(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 (recoupments).
(3)Net of the following expense reimbursements (based on average net assets)
(See Note 3):
09/30/11 09/30/12 09/30/13 09/30/14 09/30/15 03/31/16(4)(5)
-------- -------- -------- -------- -------- --------------
Japan Class A........................... 0.27% 0.59% 0.55% 0.29% 0.24% 0.19%
Japan Class C........................... 1.19 2.80 1.57 0.84 0.50 0.26
(4)Annualized
(5)Unaudited
See Notes to Financial Statements
11
SunAmerica International Dividend Strategy Fund
PORTFOLIO PROFILE -- March 31, 2016 -- (unaudited)
Industry Allocation*
Cellular Telecom.................................. 8.0%
Real Estate Operations & Development.............. 6.6
Food-Retail....................................... 6.3
Electronic Components-Misc........................ 5.6
Computers......................................... 5.2
Oil Companies-Integrated.......................... 4.0
Distribution/Wholesale............................ 3.9
Metal-Diversified................................. 3.4
Tobacco........................................... 2.5
Telephone-Integrated.............................. 2.5
Semiconductor Components-Integrated Circuits...... 2.5
Public Thoroughfares.............................. 2.4
Steel-Producers................................... 2.3
Finance-Other Services............................ 2.3
Cosmetics & Toiletries............................ 2.2
Oil-Field Services................................ 2.2
Machinery-Electrical.............................. 2.2
Aerospace/Defense................................. 2.2
Explosives........................................ 2.1
Power Converter/Supply Equipment.................. 2.1
Transport-Services................................ 2.1
Computers-Periphery Equipment..................... 2.0
Coal.............................................. 1.9
Machinery-General Industrial...................... 1.9
Telecom Services.................................. 1.9
Oil Companies-Exploration & Production............ 1.9
Retail-Consumer Electronics....................... 1.9
Electronic Components-Semiconductors.............. 1.8
Multimedia........................................ 1.7
Gambling (Non-Hotel).............................. 1.7
Metal-Copper...................................... 1.7
Auto-Cars/Light Trucks............................ 1.6
Investment Management/Advisor Services............ 1.6
Electric-Generation............................... 1.6
Building & Construction Products-Misc............. 1.5
Retail-Apparel/Shoe............................... 1.3
Repurchase Agreements............................. 1.1
----
99.7%
====
Country Allocation*
Taiwan.................................. 15.4%
Australia............................... 12.3
China................................... 10.6
France.................................. 10.2
United Kingdom.......................... 7.7
Cayman Islands.......................... 5.6
South Africa............................ 5.4
Brazil.................................. 4.9
Turkey.................................. 4.6
Russia.................................. 3.8
Bermuda................................. 3.7
Japan................................... 2.5
Switzerland............................. 2.2
Norway.................................. 2.1
Germany................................. 2.1
Finland................................. 1.9
Sweden.................................. 1.9
Hong Kong............................... 1.7
United States........................... 1.1
----
99.7%
====
--------
*Calculated as a percentage of net assets
12
SunAmerica International Dividend Strategy Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2016 -- (unaudited)
Value
Security Description Shares (Note 2)
COMMON STOCKS -- 98.6%
Australia -- 12.3%
ASX, Ltd................................... 69,507 $ 2,207,416
Orica, Ltd................................. 174,538 2,056,385
Rio Tinto, Ltd............................. 52,501 1,718,044
Wesfarmers, Ltd............................ 68,657 2,181,474
Woodside Petroleum, Ltd.................... 90,647 1,803,843
Woolworths, Ltd............................ 108,434 1,836,954
-----------
11,804,116
-----------
Bermuda -- 3.7%
GOME Electrical Appliances Holding, Ltd.... 12,457,454 1,782,538
Li & Fung, Ltd............................. 2,950,000 1,749,309
Peace Mark Holdings, Ltd.+(1)(2)........... 800,000 0
-----------
3,531,847
-----------
Brazil -- 4.9%
CCR SA+.................................... 607,000 2,368,476
Telefonica Brasil SA (Preference Shares)... 188,338 2,369,644
-----------
4,738,120
-----------
Cayman Islands -- 5.6%
Belle International Holdings, Ltd.......... 2,247,000 1,300,577
Country Garden Holdings Co., Ltd........... 5,601,000 2,209,396
Shimao Property Holdings, Ltd.............. 1,296,778 1,912,398
-----------
5,422,371
-----------
China -- 10.6%
China National Building Material Co., Ltd.. 3,100,759 1,438,988
China Shenhua Energy Co., Ltd., Class H.... 1,179,000 1,857,255
China Vanke Co., Ltd....................... 902,300 2,212,321
Great Wall Motor Co., Ltd.................. 1,911,275 1,552,210
Huaneng Power International, Inc........... 1,674,000 1,493,304
Jiangxi Copper Co., Ltd.................... 1,385,000 1,665,781
-----------
10,219,859
-----------
Finland -- 1.9%
Metso Oyj.................................. 76,943 1,835,995
-----------
France -- 10.2%
Casino Guichard Perrachon SA............... 34,922 2,001,987
Rexel SA................................... 139,553 1,993,700
Schneider Electric SE...................... 32,338 2,043,728
Technip SA................................. 38,387 2,127,680
Vivendi SA................................. 79,678 1,675,500
-----------
9,842,595
-----------
Germany -- 2.1%
Deutsche Post AG........................... 72,190 2,005,981
-----------
Hong Kong -- 1.7%
Lenovo Group, Ltd.......................... 2,084,000 1,628,010
-----------
Japan -- 2.5%
Japan Tobacco, Inc......................... 57,900 2,412,822
-----------
Norway -- 2.1%
Statoil ASA................................ 130,232 2,050,736
-----------
Russia -- 3.8%
MMC Norilsk Nickel PJSC ADR................ 115,216 1,493,199
Mobile TeleSystems PJSC ADR................ 264,579 2,140,444
-----------
3,633,643
-----------
Shares/
Principal Value
Security Description Amount (Note 2)
South Africa -- 5.4%
MTN Group, Ltd............................. 142,978 $ 1,309,330
Sasol, Ltd................................. 62,347 1,864,614
Vodacom Group, Ltd......................... 184,660 2,007,855
-----------
5,181,799
-----------
Sweden -- 1.9%
Tele2 AB, Class B.......................... 197,922 1,835,805
-----------
Switzerland -- 2.2%
ABB, Ltd................................... 106,687 2,079,262
-----------
Taiwan -- 15.4%
Asustek Computer, Inc...................... 216,000 1,939,597
AU Optronics Corp.......................... 5,722,469 1,719,372
Foxconn Technology Co., Ltd................ 654,614 1,468,529
Hon Hai Precision Industry Co., Ltd........ 733,000 1,931,345
Innolux Corp............................... 5,567,000 1,945,959
MediaTek, Inc.............................. 226,342 1,737,089
Pegatron Corp.............................. 720,000 1,680,090
Siliconware Precision Industries Co., Ltd.. 1,454,000 2,349,242
-----------
14,771,223
-----------
Turkey -- 4.6%
Eregli Demir ve Celik Fabrikalari TAS...... 1,482,043 2,230,060
Turkcell Iletisim Hizmetleri AS............ 523,385 2,201,047
-----------
4,431,107
-----------
United Kingdom -- 7.7%
Aberdeen Asset Management PLC.............. 376,644 1,500,608
BAE Systems PLC............................ 283,252 2,070,716
Unilever PLC............................... 47,681 2,158,889
William Hill PLC........................... 355,904 1,671,516
-----------
7,401,729
-----------
Total Long-Term Investment Securities
(cost $100,682,061)....................... 94,827,020
-----------
REPURCHASE AGREEMENTS -- 1.1%
State Street Bank and Trust Co. Joint
Repurchase Agreement(3)
(cost $1,053,000)......................... $1,053,000 1,053,000
-----------
TOTAL INVESTMENTS --
(cost $101,735,061)(4).................... 99.7% 95,880,020
Other assets less liabilities................ 0.3 253,548
---------- -----------
NET ASSETS -- 100.0% $96,133,568
========== ===========
--------
+ Non-income producing security
(1) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(2) Illiquid security. At March 31, 2016 the aggregate value of these
securities was $0 representing 0.0% of net assets.
(3) See Note 2 for details of Joint Repurchase Agreements.
(4) See Note 5 for cost of investments on a tax basis.
ADR --American Depositary Receipt
13
SunAmerica International Dividend Strategy Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2016 -- (unaudited) (continued)
The following is a summary of the inputs used to value the Funds's net assets
as of March 31, 2016 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
- --------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stocks:
Bermuda.................. $ 3,531,847 $ -- $ 0 $ 3,531,847
Other Countries.......... 91,295,173 -- -- 91,295,173
Repurchase Agreements...... -- 1,053,000 -- 1,053,000
----------- ---------- --- -----------
Total Investments at Value. $94,827,020 $1,053,000 $ 0 $95,880,020
=========== ========== === ===========
--------
* 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 $84,619,262 were transferred
from Level 2 to Level 1 due to foreign equity securities whose values were
previously 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, 2016 -- (unaudited)
Industry Allocation*
Auto/Truck Parts & Equipment-Original............. 9.8%
Telephone-Integrated.............................. 9.2
Computers-Integrated Systems...................... 5.2
Auto-Heavy Duty Trucks............................ 5.1
Electronic Components-Misc........................ 4.4
Television........................................ 4.3
Diversified Banking Institutions.................. 3.9
Rubber-Tires...................................... 3.8
Insurance-Life/Health............................. 3.6
Chemicals-Specialty............................... 3.6
Machinery-Electrical.............................. 3.4
Toys.............................................. 3.0
Electronic Components-Semiconductors.............. 3.0
Transport-Rail.................................... 2.9
Insurance-Property/Casualty....................... 2.6
Human Resources................................... 2.4
Medical Instruments............................... 2.1
Real Estate Operations & Development.............. 2.0
Audio/Video Products.............................. 1.9
Electronic Connectors............................. 1.9
Non-Ferrous Metals................................ 1.8
Chemicals-Diversified............................. 1.8
E-Services/Consulting............................. 1.8
Food-Retail....................................... 1.7
Computer Services................................. 1.6
Medical-Drugs..................................... 1.5
Auto-Cars/Light Trucks............................ 1.5
Photo Equipment & Supplies........................ 1.3
Retail-Convenience Store.......................... 1.2
Computers-Memory Devices.......................... 1.1
Internet Content-Information/News................. 1.1
Oil Companies-Exploration & Production............ 1.0
E-Commerce/Products............................... 1.0
Repurchase Agreements............................. 0.5
Metal Products-Fasteners.......................... 0.5
Metal Products-Distribution....................... 0.5
Machinery-Farming................................. 0.5
Retail-Automobile................................. 0.5
Consulting Services............................... 0.2
----
99.2%
====
Country Allocation*
Japan................................... 98.7%
United States........................... 0.5
----
99.2%
====
--------
*Calculated as a percentage of net assets
15
Value
Security Description Shares (Note 2)
COMMON STOCKS -- 98.7%
Audio/Video Products -- 1.9%
Panasonic Corp.............................. 43,210 $ 396,797
Sony Corp................................... 13,020 334,683
----------
731,480
----------
Auto-Cars/Light Trucks -- 1.5%
Suzuki Motor Corp........................... 20,500 548,452
----------
Auto-Heavy Duty Trucks -- 5.1%
Hino Motors, Ltd............................ 88,480 956,774
Isuzu Motors, Ltd........................... 93,180 962,061
----------
1,918,835
----------
Auto/Truck Parts & Equipment-Original -- 9.8%
Exedy Corp.................................. 11,640 257,322
NGK Spark Plug Co., Ltd..................... 58,290 1,115,613
Sumitomo Electric Industries, Ltd........... 61,700 750,520
Toyota Industries Corp...................... 23,660 1,063,749
TS Tech Co., Ltd............................ 20,000 468,079
----------
3,655,283
----------
Chemicals-Diversified -- 1.8%
Mitsubishi Gas Chemical Co., Inc............ 126,000 678,449
----------
Chemicals-Specialty -- 3.6%
Shin-Etsu Chemical Co., Ltd................. 25,730 1,331,481
----------
Computer Services -- 1.6%
SCSK Corp................................... 15,140 591,905
----------
Computers-Integrated Systems -- 5.2%
Fujitsu, Ltd................................ 528,395 1,955,923
----------
Computers-Memory Devices -- 1.1%
TDK Corp.................................... 7,490 415,945
----------
Consulting Services -- 0.2%
FreakOut, Inc.+............................. 1,900 69,723
----------
Diversified Banking Institutions -- 3.9%
Mitsubishi UFJ Financial Group, Inc......... 311,870 1,445,113
----------
E-Commerce/Products -- 1.0%
Rakuten, Inc................................ 38,260 369,019
----------
E-Services/Consulting -- 1.8%
Digital Garage, Inc......................... 36,200 659,702
----------
Electronic Components-Misc. -- 4.4%
Hitachi High-Technologies Corp.............. 28,580 804,999
Hoya Corp................................... 12,410 472,053
Kyocera Corp................................ 8,400 369,975
----------
1,647,027
----------
Electronic Components-Semiconductors -- 3.0%
Rohm Co., Ltd............................... 13,190 555,516
Sumco Corp.................................. 88,310 555,542
----------
1,111,058
----------
Electronic Connectors -- 1.9%
Japan Aviation Electronics Industry, Ltd.... 59,370 695,274
----------
Food-Retail -- 1.7%
Seven & i Holdings Co., Ltd................. 14,580 620,795
----------
Value
Security Description Shares (Note 2)
Human Resources -- 2.4%
Recruit Holdings Co., Ltd.................... 30,080 $ 918,075
----------
Insurance-Life/Health -- 3.6%
Sony Financial Holdings, Inc................. 68,205 871,463
T&D Holdings, Inc............................ 52,320 487,892
----------
1,359,355
----------
Insurance-Property/Casualty -- 2.6%
Tokio Marine Holdings, Inc................... 29,170 984,904
----------
Internet Content-Information/News -- 1.1%
Mixi, Inc.................................... 10,800 401,120
----------
Machinery-Electrical -- 3.4%
Hitachi, Ltd................................. 125,070 585,205
Mitsubishi Electric Corp..................... 66,010 691,801
----------
1,277,006
----------
Machinery-Farming -- 0.5%
Kubota Corp.................................. 13,600 185,672
----------
Medical Instruments -- 2.1%
Olympus Corp................................. 20,430 794,182
----------
Medical-Drugs -- 1.5%
Takeda Pharmaceutical Co., Ltd............... 12,400 565,875
----------
Metal Products-Distribution -- 0.5%
MISUMI Group, Inc............................ 13,850 198,253
----------
Metal Products-Fasteners -- 0.5%
Tsubaki Nakashima Co., Ltd................... 14,600 200,297
----------
Miscellaneous Manufacturing -- 0.0%
Peace Mark Holdings, Ltd.+(1)(2)............. 8,000 0
----------
Non-Ferrous Metals -- 1.8%
Mitsubishi Materials Corp.................... 240,945 680,799
----------
Oil Companies-Exploration & Production -- 1.0%
Inpex Corp................................... 51,880 393,439
----------
Photo Equipment & Supplies -- 1.3%
FUJIFILM Holdings Corp....................... 12,100 478,538
----------
Real Estate Operations & Development -- 2.0%
Leopalace21 Corp.+........................... 126,210 762,564
----------
Retail-Automobile -- 0.5%
USS Co., Ltd................................. 11,600 185,320
----------
Retail-Convenience Store -- 1.2%
FamilyMart Co., Ltd.......................... 8,970 466,253
----------
Rubber-Tires -- 3.8%
Toyo Tire & Rubber Co, Ltd................... 95,280 1,422,279
----------
Telephone-Integrated -- 9.2%
Nippon Telegraph & Telephone Corp............ 43,240 1,862,611
SoftBank Group Corp.......................... 33,230 1,584,363
----------
3,446,974
----------
Television -- 4.3%
Nippon Television Holdings, Inc.............. 98,460 1,624,597
----------
Toys -- 3.0%
Bandai Namco Holdings, Inc................... 25,590 557,980
16
SunAmerica Japan Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2016 -- (unaudited)
SunAmerica Japan Fund
PORTFOLIO OF INVESTMENTS -- March 31, 2016 -- (unaudited) (continued)
Shares/
Principal Value
Security Description Amount (Note 2)
COMMON STOCKS (continued)
Toys (continued)
Nintendo Co., Ltd................................. 3,900 $ 554,445
-----------
1,112,425
-----------
Transport-Rail -- 2.9%
East Japan Railway Co............................. 12,610 1,088,284
-----------
Total Long-Term Investment Securities
(cost $40,768,484)............................... 36,991,675
-----------
REPURCHASE AGREEMENTS -- 0.5%
Agreement with State Street Bank & Trust bearing
interest at 0.01%, dated 03/31/2016, to be
repurchased 04/01/2016 in the amount of
$202,000 collateralized by $200,000 of U.S.
Treasury Notes, bearing interest at 2.13% due
09/30/2021 and having an approximate value
of $207,813 (cost $202,000)...................... $202,000 202,000
-----------
TOTAL INVESTMENTS --
(cost $40,970,484)(3)............................ 99.2% 37,193,675
Other assets less liabilities....................... 0.8 289,252
-------- -----------
NET ASSETS -- 100.0% $37,482,927
======== ===========
--------
+ Non-income producing security
(1)Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs; see Note 2.
(2)Illiquid security. At March 31, 2016, the aggregate value of these
securities was $0 representing 0.0% of net assets.
(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, 2016 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
- --------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stocks:
Miscellaneous Manufacturing. $ -- $ -- $ 0 $ 0
Other Industries............ 36,991,675 -- -- 36,991,675
Repurchase Agreements......... -- 202,000 -- 202,000
----------- -------- --- -----------
Total Investments at Value.... $36,991,675 $202,000 $ 0 $37,193,675
=========== ======== === ===========
--------
* 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 $24,807,557 were transferred
from Level 2 to Level 1 due to foreign equity securities whose values were
previously 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, 2016 -- (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 18, 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.
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 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 International Dividend Strategy Fund commenced operations
effective January 29, 2015. The International Dividend Strategy Fund and the
Japan 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 and Japan 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 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
18
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
(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 the Funds' assets and liabilities classified in the fair
value hierarchy as of March 31, 2016, is reported on a schedule following
the portfolio of investments.
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
19
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, the
Funds use the exchange that is the primary market for the security. Such
securities are generally categorized as Level 1. However, depending on the
foreign market, closing prices may be up to 15 hours old when they are used
to price a Fund's shares, and a Fund may determine that certain closing
prices do not reflect the fair value of the security. This determination
will be based on review of a number of factors, including developments in
foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign
securities and baskets of foreign securities. If a Fund determines that
closing prices do not reflect the fair value of the securities, the Fund
will adjust the previous closing prices in accordance with pricing
procedures approved by the Board to reflect what it believes to be the fair
value of the securities as of the close of regular trading on the NYSE. The
Funds may also fair value securities in other situations, for example, when
a particular foreign market is closed but a Fund is open. For foreign equity
securities and foreign equity futures contracts, the Funds use an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices, and when so adjusted, such securities and
futures are generally categorized as Level 2.
Bonds, debentures, and other debt securities 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, 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.
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 OTC 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 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,
20
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
insolvency or other events. As of March 31, 2016, the repurchase agreements
held by the Funds are subject to master netting agreements. See the
Portfolio of Investments for more information about a Fund'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, 2016, the following Fund held an undivided interest in the
joint repurchase agreement with State Street Bank & Trust Co.:
Percentage Principal
Ownership Amount
---------- ----------
International Dividend Strategy Fund.... 0.23% $1,053,000
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, 2016, bearing interest at a
rate of 0.01% per annum, with a principal amount of $463,848,000, a
repurchase price of $463,848,129, and a maturity date of April 1, 2016. The
repurchase agreement is collateralized by the following:
Interest Principal
Type of Collateral Rate Maturity Date Amount Value
------------------ -------- ------------- ------------ ------------
U.S. Treasury Notes..................... 3.38% 11/15/2019 $466,710,000 $473,127,263
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.
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 share activity of the respective class).
Expenses common to all Funds are allocated among the Funds based upon
relative net assets or other appropriate allocation methods. In all other
respects, expenses are charged to each Fund as incurred on a specific
identification basis.
21
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
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
2012 - 2014 or expected to be taken in each Fund's 2015 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 2012.
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars based on the exchange rate of such currencies
against U.S. dollars on the date of valuation.
The Funds do not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at the end of the year.
Similarly, the Funds do not isolate the effect of changes in foreign
exchange rates from the changes in the market prices of portfolio securities
sold during the year.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities located in the Statements of Operations include realized
foreign exchange gains and losses from currency gains or losses between the
trade and the settlement dates of securities transactions, the difference
between the amounts of interest, dividends and foreign withholding taxes
recorded on the Funds' books and the U.S. dollar equivalent amounts actually
received or paid and changes in the unrealized foreign exchange gains and
losses relating to the other assets and liabilities arising as a result of
changes in the exchange rates.
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.
22
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
The Funds pay SunAmerica a monthly investment advisory and management fee
calculated daily at the following annual percentages of each Fund's average
daily net assets:
Management
Fees
----------
International Dividend Strategy Fund.... 1.00%
Japan Fund.............................. 1.15
For the six months ended March 31, 2016, 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 fees and/or reimbursed expense calculations, annual fund
operating expenses shall not include extraordinary expenses (i.e., expenses
that are unusual in nature and/or infrequent in occurrence, 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 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 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.
For the six months ended March 31, 2016, pursuant to the contractual expense
limitations referred to above, SunAmerica has waived or reimbursed expenses
as follows:
Other Expense
Reimbursed
-------------
Japan Fund.............................. $--
Amount
-------
International Dividend Strategy Fund Class A................ $44,529
International Dividend Strategy Fund Class C................ 15,298
International Dividend Strategy Fund Class I................ --
International Dividend Strategy Fund Class W................ 9,980
Japan Fund Class A.......................................... 32,858
Japan Fund Class C.......................................... 9,994
23
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
For the six months ended March 31, 2016, SunAmerica did not recoup any prior
waivers and/or reimbursements from the Funds.
At March 31, 2016, expenses previously waived and/or reimbursed by
SunAmerica during the prior two years that remain subject to recoupment and
expires during the time periods indicated are as follows:
Other Expenses Reimbursed
----------------------------------------------------
September 30, 2016 September 30, 2017 March 31, 2018
------------------ ------------------ --------------
Japan Fund.............................. $10,713 $9,052 $--
Class Specific Expenses Reimbursed
----------------------------------------------------
September 30, 2016 September 30, 2017 March 31, 2018
------------------ ------------------ --------------
International Dividend Strategy Fund Class A................ $ -- $ -- $44,529
International Dividend Strategy Fund Class C................ 1,721 12,717 15,298
International Dividend Strategy Fund Class I................ -- -- --
International Dividend Strategy Fund Class W................ -- 14,010 9,980
Japan Fund Class A.......................................... 37,640 73,638 32,858
Japan Fund Class C.......................................... 14,746 24,456 9,994
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.
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, 2016, 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, 2016, 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, 2016, 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
Charges Broker-dealers Broker-dealers Sales Charges Sales Charges
------- -------------- -------------- ------------- -------------
International Dividend Strategy Fund.... $33,005 $13,012 $15,432 $4,044 $ 3,856
Japan Fund.............................. 36,543 4,212 26,774 17 10,961
24
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
The Trust has entered into a Service Agreement with SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Adviser. Under the Service
Agreement, SAFS performs certain shareholder account functions by assisting
the Funds' transfer agent, 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, 2016, 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, 2016
------------------------------- -------------------------------
Class A Class C Class I Class W Class A Class C Class I Class W
------- ------- ------- ------- ------- ------- ------- -------
International Dividend Strategy Fund.... $79,541 $20,862 $302 $9,282 $13,552 $3,088 $50 $1,281
Japan Fund.............................. 37,076 8,542 -- -- 5,851 1,252 -- --
At March 31, 2016, 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 14% and 7%,
respectively, of the International Dividend Strategy Fund and Focused
Multi-Asset Strategy Portfolio and Focused Balanced Strategy Portfolio owned
33% and 7%, respectively, of the Japan Fund.
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, 2016 were as follows:
International
Dividend Strategy
Fund Japan Fund
----------------- -----------
Purchases (excluding U.S. government securities)............ $ 9,976,152 $31,377,263
Sales (excluding U.S. government securities)................ 20,475,536 31,301,857
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 and derivative transactions.
For the year ended September 30, 2015
----------------------------------------------------------------
Distributable Earnings Tax Distributions
-------------------------------------- ------------------------
Long-term Unrealized
Ordinary Gains/Capital Appreciation Ordinary Long-Term
Income Loss Carryover (Depreciation)* Income Capital Gains
-------- -------------- --------------- ---------- -------------
International Dividend Strategy Fund.... $ -- $(78,248,204) $(12,244,533) $3,056,264 $ --
Japan Fund.............................. 605,141 632,720 (4,435,143) 2,692,687 364,700
--------
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
25
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
For Federal income tax purposes, the Funds indicated below have capital loss
carryforwards, which expire in the year indicated, as of March 31, 2016,
which are available to offset future capital gains, if any:
Capital Loss Carryforward+ Unlimited+
----------------------------------- ----------------------
2016 2017 2018 ST LT
----------- ----------- ----------- ----------- ----------
International Dividend Strategy Fund*... $25,210,425 $16,578,456 $19,381,525 $11,958,054 $5,119,744
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, 2015, based on current tax law, the International Dividend
Strategy Fund has $0 of capital losses that will not be available for use.
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, 2016:
International
Dividend
Strategy Fund Japan Fund
------------- -----------
Cost (tax basis)............................................ $102,453,564 $41,359,953
============ ===========
Appreciation................................................ 4,249,223 807,545
Depreciation................................................ (10,822,767) (4,973,823)
------------ -----------
Net unrealized appreciation (depreciation).................. $ (6,573,544) $(4,166,278)
============ ===========
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
six months ended For the For the
March 31, 2016 year ended period ended
(unaudited) September 30, 2015 January 27, 2015+
------------------------ ------------------------ ---------------------
Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- -----------
Shares sold(1)...... 1,358,717 $ 11,071,863 3,815,299 $ 38,450,295 75,544 $ 739,541
Reinvested dividends 19,413 153,554 208,390 1,922,494 2,001 17,288
Shares redeemed(1).. (1,503,985) (12,097,527) (9,399,622) (94,027,602) (887,831) (8,119,762)
---------- ------------ ---------- ------------ -------- -----------
Net increase
(decrease)......... (125,855) $ (872,110) (5,375,933) $(53,654,813) (810,286) $(7,362,933)
========== ============ ========== ============ ======== ===========
International Dividend Strategy Fund
-------------------------------------------------------------------------------------------
Class C Class I
-------------------------------------------------- ---------------------------------------
For the For the
six months ended For the six months ended For the
March 30, 2016 year ended March 31, 2016 year ended
(unaudited) September 30, 2015 (unaudited) September 30, 2015
------------------------ ------------------------ --------------------- ----------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ----------- ------ --------
Shares sold......... 204,310 $ 1,515,133 759,519 $ 6,998,554 -- $ -- -- $ --
Reinvested dividends 1,810 13,051 47,193 397,757 82 659 868 8,089
Shares redeemed..... (1,078,905) (7,929,726) (2,224,195) (20,040,819) (2,460) (18,780) (3,310) (33,283)
---------- ------------ ---------- ------------ -------- ----------- ------ --------
Net increase
(decrease)......... (872,785) $ (6,401,542) (1,417,483) $(12,644,508) (2,378) $ (18,121) (2,442) $(25,194)
========== ============ ========== ============ ======== =========== ====== ========
--------
+ See Note 1
(1)For the year ended September 30, 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.
26
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
International Dividend Strategy Fund
-----------------------------------------------
Class W
-----------------------------------------------
For the For the
six months ended period January 29, 2015*
March 31, 2016 through
(unaudited) September 30, 2015
--------------------- ------------------------
Shares Amount Shares Amount
-------- ----------- ---------- ------------
Shares sold......... 73,968 $ 589,752 2,449,993 $ 24,413,106
Reinvested dividends 1,133 8,965 13,417 124,765
Shares redeemed..... (595,276) (4,827,451) (1,140,204) (11,119,553)
-------- ----------- ---------- ------------
Net increase
(decrease)......... (520,175) $(4,228,734) 1,323,206 $ 13,418,318
======== =========== ========== ============
Japan Fund
-------------------------------------------------------------------
Class A Class B
----------------------------------------------- ------------------
For the
six months ended For the For the
March 31, 2016 year ended period ended
(unaudited) September 30, 2015 January 27, 2015+
--------------------- ------------------------ ------------------
Shares Amount Shares Amount Shares Amount
-------- ----------- ---------- ------------ ------- ---------
Shares sold(1)................ 575,874 $ 4,134,300 1,683,479 $ 12,676,567 1,981 $ 13,696
Reinvested dividends.......... 123,097 864,144 343,801 2,275,963 6,208 39,607
Shares redeemed(1)............ (619,869) (4,202,549) (1,774,614) (12,993,637) (74,653) (498,060)
-------- ----------- ---------- ------------ ------- ---------
Net increase (decrease)....... 79,102 $ 795,895 252,666 $ 1,958,893 (66,464) $(444,757)
======== =========== ========== ============ ======= =========
Japan Fund
-----------------------------------------------
Class C
-----------------------------------------------
For the
six months ended For the
March 31, 2016 year ended
(unaudited) September 30, 2015
--------------------- ------------------------
Shares Amount Shares Amount
-------- ----------- ---------- ------------
Shares sold................... 250,320 $ 1,678,294 773,451 $ 5,476,838
Reinvested dividends.......... 31,106 208,408 28,554 181,886
Shares redeemed............... (350,697) (2,187,201) (269,844) (1,879,020)
-------- ----------- ---------- ------------
Net increase (decrease)....... (69,271) $ (300,499) 532,161 $ 3,779,704
======== =========== ========== ============
--------
+ See Note 1
* Commencement of operations
(1)For the year ended September 30, 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.
Note 7. Line of Credit
The Trust, along with certain other funds managed by the Adviser, has access
to a $75 million committed unsecured line of credit and a $50 million
uncommitted unsecured line of credit. The committed and uncommitted lines of
credit are renewable on an annual basis with State Street Bank and Trust
Company, the Trust's custodian. Interest is currently payable on the
committed line of credit at the higher of the Federal Funds Rate (but not
less than zero) plus 125 basis points or the One-Month London Interbank
Offered Rate (but not less than zero) plus 125 basis points and State Street
Bank and Trust Company's discretionary bid rate on the uncommitted line of
credit. There is also a commitment fee of 20 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. Borrowings
27
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 2016 -- (unaudited)
(continued)
under the line of credit will commence when the respective Portfolio's cash
shortfall exceeds $100,000. For the six months ended March 31, 2016, the
following Funds had borrowings:
Days Interest Average Debt Weighted Average
Outstanding Charges Utilized Interest
----------- -------- ------------ ----------------
International Dividend Strategy Fund.... 9 $195 $493,474 1.60%
Japan Fund.............................. 1 27 569,381 1.68
At March 31, 2016, 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, 2016, the Funds did not participate in
this program.
Note 9. Investment Concentration
The Funds 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.
28
[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
Matthew Hackethal, available from the EDGAR Fund expenses, which
Anti-Money Laundering database on the U.S. benefits you and other
Compliance Officer Securities and Ex-change shareholders. Unless the
Chris Okeke, Assistant Commission's website at Funds receive
Treasurer http://www.sec.gov. instructions to the
Investment Adviser PROXY VOTING RECORD ON con-trary, you will only
SunAmerica Asset SUNAMERICA EQUITY FUNDS receive one copy of the
Management, LLC Information regarding how shareholder documents.
Harborside Financial SunAmerica Equity Funds The Funds will continue
Center voted proxies relating to to household the
3200 Plaza 5 securities held in share-holder documents
Jersey City, NJ SunAmerica Equity Funds indefinitely, until we
07311-4992 during the most recent are instructed otherwise.
Distributor twelve month period ended If you do not wish to
AIG Capital Services, June 30 is available, participate in
Inc. once filed with the U.S. householding, please
Harborside Financial Securities and Exchange contact Shareholder
Center Commission, without Services at (800)
3200 Plaza 5 charge, upon request, by 858-8850 ext. 6010 or
Jersey City, NJ calling (800) 858-8850 or send a written request
07311-4992 on the U.S. Securities with your name, the name
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 This report is submitted
on Form N-Q. The Trust's solely for the general
Forms N-Q are available information of
on the U.S. Securities shareholders of the
and Exchange Commission's Funds. Distribution of
website at this report to persons
http://www.sec.gov. You other than shareholders
can also review and of the Funds is
obtain copies of the authorized only in
Forms N-Q at the U.S. con-nection with a
Securities and Exchange currently effective
Com-mission's Public pro-spectus, setting
Reference Room in forth details of the
Wash-ington, DC Funds, which must precede
(information on the or accom-pany this report.
operation of Public The accompanying report
Reference Room may be has not been audited by
obtained by calling independent accountants
1-800-SEC-0330). and accordingly no
opinion has been
expressed thereon.
[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 - 3/16
[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, 2016
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, 2016
By: /s/ Gregory R. Kingston
-------------------
Gregory R. Kingston
Treasurer
Date: June 08, 2016