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 811-04708
---------------------------------------------
SunAmerica Income Funds
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management, LLC
Harborside Financial Center,
3200 Plaza 5
Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
-----------------------------
Date of fiscal year end: March 31
--------------------------
Date of reporting period: September 30, 2016
-------------------------
Item 1. Reports to Stockholders
SEMI-ANNUAL REPORT 2016
SUNAMERICA
Income Funds
[PHOTO]
[LOGO]
Table of Contents
SHAREHOLDER LETTER.......................................... 2
EXPENSE EXAMPLE............................................. 4
STATEMENTS OF ASSETS AND LIABILITIES........................ 6
STATEMENTS OF OPERATIONS.................................... 8
STATEMENTS OF CHANGES IN NET ASSETS......................... 9
FINANCIAL HIGHLIGHTS........................................ 11
PORTFOLIO OF INVESTMENTS.................................... 14
NOTES TO FINANCIAL STATEMENTS............................... 69
APPROVAL OF ADVISORY AGREEMENTS............................. 84
Shareholder Letter -- (unaudited)
Dear Shareholders,
We are pleased to present this semi-annual update for the SunAmerica Income
Funds for the six month period ended September 30, 2016. It was a time wherein
fixed income market performance was primarily driven by shifting expectations
about global economic growth and central bank policy. For this semi-annual
period overall, the Bloomberg Barclays U.S. Aggregate Bond Index/*/, a broad
measure of the U.S. fixed income market, returned 2.68%.
As the semi-annual period began in April 2016, accommodative central bank
monetary policy, near-term stabilization in China and a rebound in commodity
prices supported global fixed income markets. However, investors turned more
cautious in June 2016 as the outcome of the referendum on the U.K.'s membership
in the European Union moved into sharper focus. The U.K.'s surprise vote to
leave the European Union, popularly known as Brexit, led to a spike in global
financial market volatility and a flight to safety at the end of the second
calendar quarter, with U.K. and European equity and credit markets bearing the
brunt of the sell-off. In the U.S., economic data released during the second
calendar quarter was generally constructive, but the Federal Reserve (the
"Fed") held interest rates steady, while upholding its baseline view for a
gradual tightening in monetary policy. After a flurry of hawkish Fed rhetoric
in May 2016, markets started to come around to the idea of a possible rate hike
in June or July 2016. However, a weak U.S. payroll report in early June 2016
and growing uncertainty over Brexit started to unwind some of those
expectations, and the Fed held rates steady at its June 2016 meeting amid
lingering uncertainty about the strength of the global economy. For the second
calendar quarter overall, global government bond yields fell across most
developed market economies. Outperforming U.S. Treasuries was the high yield
corporate bond sector, assisted by a rally in oil and other commodity prices.
Emerging markets debt also performed well, as spreads, or yield differentials
to U.S. Treasuries, tightened. Investment grade corporate bonds and commercial
mortgage-backed securities outpaced U.S. Treasuries as well. Residential
mortgage-backed securities and asset-backed securities posted positive returns
but lagged U.S. Treasuries for the quarter.
Volatility across the major fixed income asset classes declined markedly in the
third calendar quarter of 2016 as fears about the adverse consequences of
Brexit subsided. Credit sectors more than fully recovered from their
post-Brexit shock, as the negative impact on financial markets turned out to be
smaller than originally feared. Expectations of an extended period of central
bank policy accommodation amid sluggish global economic growth also supported
fixed income markets. That said, the policy paths of major central banks
appeared to increasingly diverge during the third quarter of 2016. Some central
banks, such as those of Australia and New Zealand, acted to counter slowing
economic growth and disinflationary pressures. The Bank of England unveiled a
stimulus package designed to prevent a recession following the country's vote
to leave the European Union. The Bank of Japan made changes whereby it aimed to
keep the yield on its 10-year government bond near zero, and it introduced a
commitment to expand its monetary base until core inflation overshoots its 2%
target. In contrast, the European Central Bank (ECB) kept its stimulus program
unchanged, as did the Fed. For the third calendar quarter as a whole, global
government bond yields diverged, rising in the U.S. and Japan and falling in
the U.K., Europe, Australia and Canada. Most spread, or non-government bond,
sectors posted positive total returns as spreads tightened, with lower quality
sectors leading the way.
For the semi-annual period overall, U.S. Treasury securities posted positive
returns, with the yield on the 10-year U.S. Treasury declining approximately 18
basis points+ to 1.59% by the end of September 2016. The U.S. Treasury yield
curve, or spectrum of maturities, flattened during the six months ended
September 30, 2016, as yields on maturities of less than four years rose and
yields on maturities of four years and longer fell. Non-U.S. Treasury sectors
generally outperformed U.S. Treasuries. High yield corporate bonds outperformed
U.S. Treasuries by a double-digit margin, followed at some distance by emerging
markets debt and investment grade corporate bonds. Commercial mortgage-backed
securities, agency securities, mortgage-backed securities and asset-backed
securities also outperformed U.S. Treasuries, albeit more modestly.
2
Against this backdrop, each of the SunAmerica Income Funds generated positive
absolute returns during the six-month period ended September 30, 2016. On the
following pages, you will find financial statements and portfolio information
for each of the SunAmerica Income Funds during this semi-annual period.
We thank you for being a part of the SunAmerica Income Funds. We value your
ongoing confidence in us and look forward to serving your investment needs in
the future. As always, if you have any questions regarding your investments,
please contact your financial adviser or get in touch us directly at
800-858-8850 or www.safunds.com.
Sincerely,
The SunAmerica Income Funds Investment Professionals
Timothy Campion Robert Vanden Assem David L. Albrycht
Andrew Doulos Anders Faergemann Frank Ossino
Kara Murphy Dana Burns Jonathan Stanley
Andrew Sheridan John Yovanovic
Jane Bayar
--------
Past performance is no guarantee of future results.
* The Bloomberg Barclays U.S. Aggregate Bond Index represents securities that
are SEC-registered, taxable and dollar denominated. The index covers the U.S.
investment-grade fixed-rate bond market, with index components for government
and corporate securities, mortgage pass-through securities and asset-backed
securities. Indices are not managed and an investor cannot invest directly in
an index.
+ A basis point is 1/100/th/ of a percentage point.
3
SunAmerica Income Funds
EXPENSE EXAMPLE -- September 30, 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 Income Funds (the "Trust"), you may incur two types of costs: (1)
transaction costs, including sales charges (loads) on purchase payments,
contingent deferred sales charges and (2) ongoing costs, including management
fees, distribution and service fees and other Fund expenses. The example set
forth below is intended to help you understand your ongoing costs (in dollars)
of investing in the Funds and to compare these costs with the ongoing costs of
investing in other mutual funds. The Example is based on an investment of
$1,000 invested at April 1, 2016 and held until September 30, 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 Six
Months Ended September 30, 2016" to estimate the expenses you paid on your
account during this period. The "Expenses Paid During the Six Months Ended
September 30, 2016" column and the "Annualized Expense Ratio" column do not
include small account fees that may be charged if your account balance is below
$500 ($250 for retirement plan accounts). In addition, the "Expenses Paid
During the Six Months Ended September 30, 2016" column and the "Annualized
Expense Ratio" column do not include administrative fees that may apply to
qualified retirement plan accounts. See the Funds' prospectuses, your
retirement plan document and/or materials from your financial adviser for a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended September 30, 2016" column would have been
higher and the "Ending Account Value" column would have been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an annual rate of return of 5% before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Funds and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds. The "Expenses Paid During the Six Months Ended September 30, 2016"
column and the "Annualized Expense Ratio" column do not include small account
fees that may be charged if your account balance is below $500 ($250 for
retirement plan accounts). In addition, the "Expenses Paid During the Six
Months Ended September 30, 2016" column and the "Annualized Expense Ratio"
column do not include administrative fees that may apply to qualified
retirement plan accounts and accounts held through financial institutions. See
the Funds' prospectuses, your retirement plan document and/or materials from
your financial adviser for a full description of these fees. Had these fees
been included, the "Expenses Paid During the Six Months Ended September 30,
2016" column would have been higher and the "Ending Account Value" column would
have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, small account
fees and administrative fees, if applicable to your account. Please refer to
the Funds' prospectus, your retirement plan document and/or material from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transaction costs and other fees were included, your costs would have been
higher.
4
SunAmerica Income Funds
EXPENSE EXAMPLE -- September 30, 2016 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------ ------------------------------------------
Ending Account
Ending Account Expenses Paid Value using Expenses Paid
Value using During the a Hypothetical During the
Beginning Actual Six Months Beginning 5% Annual Six Months
Account Value Return at Ended Account Value Return at Ended Annualized
at April 1, September 30, September 30, at April 1, September 30, September 30, Expense
Fund 2016 2016 2016* 2016 2016 2016* Ratio*
---- ------------- -------------- ------------- ------------- -------------- ------------- ----------
U.S. Government Securities
Class A#................. $1,000.00 $1,012.65 $ 4.99 $1,000.00 $1,020.10 $ 5.01 0.99%
Class C#................. $1,000.00 $1,009.36 $ 8.26 $1,000.00 $1,016.85 $ 8.29 1.64%
Strategic Bond Fund
Class A.................. $1,000.00 $1,067.87 $ 6.89 $1,000.00 $1,018.40 $ 6.73 1.33%
Class B.................. $1,000.00 $1,064.33 $10.30 $1,000.00 $1,015.09 $10.05 1.99%
Class C.................. $1,000.00 $1,061.02 $10.23 $1,000.00 $1,015.14 $10.00 1.98%
Class W.................. $1,000.00 $1,068.94 $ 5.81 $1,000.00 $1,019.45 $ 5.67 1.12%
Flexible Credit Fund
Class A.................. $1,000.00 $1,060.45 $ 7.49 $1,000.00 $1,017.80 $ 7.33 1.45%
Class C.................. $1,000.00 $1,056.82 $10.67 $1,000.00 $1,014.69 $10.45 2.07%
Class W.................. $1,000.00 $1,064.82 $ 6.16 $1,000.00 $1,019.10 $ 6.02 1.19%
--------
* Expenses are equal to each Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183 days then divided
by 365 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 adviser for
more information.
# During the stated period, the investment advisor either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Funds.
As a result, if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended September 30,
2016" and the "Annualized Expense Ratio" would have been higher.
5
SunAmerica Income Funds
STATEMENTS OF ASSETS AND LIABILITIES -- September 30, 2016 --
(unaudited)
U.S. Government Strategic Flexible
Securities Bond Credit
Fund Fund Fund
--------------- ------------ ------------
ASSETS:
Investments at value (unaffiliated)*........................ $192,301,698 $404,072,201 $346,211,528
Repurchase agreements (cost approximates value)............. 11,282,000 1,203,000 --
------------ ------------ ------------
Total investments.......................................... 203,583,698 405,275,201 346,211,528
------------ ------------ ------------
Cash........................................................ 584 1,300,291 652,515
Foreign cash*............................................... -- 139,560 7,171
Receivable for:
Shares of beneficial interest sold......................... 99,397 780,478 1,577,921
Dividends and interest..................................... 862,408 4,334,916 3,338,972
Investments sold........................................... -- 10,225,485 3,563,424
Prepaid Expenses and other assets........................... 3,918 4,532 5,850
Due from investment adviser for expense reimbursements/fee
waivers.................................................... 130,487 -- --
Unrealized appreciation on forward foreign currency
contracts.................................................. -- 95,102 --
------------ ------------ ------------
Total Assets................................................ 204,680,492 422,155,565 355,357,381
------------ ------------ ------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed..................... 165,814 742,102 780,303
Investments purchased...................................... -- 34,101,093 17,049,067
Investment advisory and management fees.................... 107,542 207,292 199,357
Distribution and service maintenance fees.................. 73,540 204,372 112,157
Transfer agent fees and expenses........................... 44,928 82,800 68,707
Trustees' fees and expenses................................ 727 1,352 624
Other accrued expenses..................................... 70,890 136,670 80,830
Dividends payable........................................... -- 57,609 213,234
Line of credit.............................................. -- -- 1,211,297
Unrealized depreciation on forward foreign currency
contracts.................................................. -- 14,817 --
------------ ------------ ------------
Total Liabilities........................................... 463,441 35,548,107 19,715,576
------------ ------------ ------------
Net Assets.................................................. $204,217,051 $386,607,458 $335,641,805
============ ============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01........................ $ 211,975 $ 1,126,304 $ 979,364
Paid-in capital............................................. 208,510,575 457,794,197 394,200,684
------------ ------------ ------------
208,722,550 458,920,501 395,180,048
Accumulated undistributed net investment income (loss)...... (1,308,347) (2,958,555) 302,269
Accumulated undistributed net realized gain (loss) on
investments, swap contracts, futures contracts, options
contracts, securities sold short and foreign exchange
transactions and capital gain distributions from
underlying funds........................................... (12,180,269) (74,428,448) (60,660,851)
Unrealized appreciation (depreciation) on investments....... 8,983,117 4,995,200 821,166
Unrealized foreign exchange gain (loss) on other assets and
liabilities................................................ -- 78,760 (827)
------------ ------------ ------------
Net Assets.................................................. $204,217,051 $386,607,458 $335,641,805
============ ============ ============
*Cost
Investment securities (unaffiliated)....................... $183,318,581 $399,077,001 $345,390,362
============ ============ ============
Foreign cash............................................... $ -- $ 138,615 $ 7,998
============ ============ ============
See Notes to Financial Statements
6
SunAmerica Income Funds
STATEMENTS OF ASSETS AND LIABILITIES -- September 30, 2016 --
(unaudited) (continued)
U.S. Government Strategic Flexible
Securities Bond Credit
Fund Fund Fund
--------------- ------------ ------------
Class A (unlimited shares authorized):
Net assets............................................................ $175,082,929 $172,184,715 $142,525,486
Shares of beneficial interest issued and outstanding.................. 18,171,672 50,228,696 41,664,642
Net asset value and redemption price per share (excluding any
applicable contingent deferred sales charge)......................... $ 9.63 $ 3.43 $ 3.42
Maximum sales charge (4.75% of offering price)........................ $ 0.48 $ 0.17 $ 0.17
------------ ------------ ------------
Maximum offering price to public...................................... $ 10.11 $ 3.60 $ 3.59
============ ============ ============
Class B (unlimited shares authorized):
Net assets............................................................ $ -- $ 31,081,967 $ --
Shares of beneficial interest issued and outstanding.................. -- 9,071,105 --
Net asset value, offering and redemption price per share (excluding
any applicable contingent deferred sales charge)..................... $ -- $ 3.43 $ --
============ ============ ============
Class C (unlimited shares authorized):
Net assets............................................................ $ 29,134,122 $149,523,670 $ 70,755,582
Shares of beneficial interest issued and outstanding.................. 3,025,786 43,460,533 20,553,784
Net asset value, offering and redemption price per share (excluding
any applicable contingent deferred sales charge)..................... $ 9.63 $ 3.44 $ 3.44
============ ============ ============
Class W (unlimited shares authorized):
Net assets............................................................ $ -- $ 33,817,106 $122,360,737
Shares of beneficial interest issued and outstanding.................. -- 9,870,116 35,717,951
Net asset value, offering and redemption price per share.............. $ -- $ 3.43 $ 3.43
============ ============ ============
See Notes to Financial Statements
7
SunAmerica Income Funds
STATEMENTS OF OPERATIONS -- For the six months ended September 30, 2016
-- (unaudited)
U.S. Government Strategic Flexible
Securities Bond Credit
Fund Fund Fund
--------------- ----------- -----------
INCOME:
Dividends (unaffiliated)................................................... $ -- $ 19,329 $ 103,784
Interest (unaffiliated).................................................... 1,811,296 8,142,582 8,238,578
---------- ----------- -----------
Total investment income*................................................. 1,811,296 8,161,911 8,342,362
---------- ----------- -----------
EXPENSES:
Investment advisory and management fees.................................... 632,112 1,256,860 1,122,794
Distribution and service maintenance fees:
Class A.................................................................. 287,972 308,410 231,389
Class B.................................................................. -- 154,688 --
Class C.................................................................. 150,121 756,538 331,590
Service fees -- Class W.................................................... -- 23,421 78,743
Transfer agent fees:
Class A.................................................................. 198,978 211,135 156,580
Class B.................................................................. -- 37,246 --
Class C.................................................................. 37,193 174,964 75,803
Class W.................................................................. -- 34,875 116,314
Registration fees:
Class A.................................................................. 13,227 7,567 30,115
Class B.................................................................. -- 3,427 --
Class C.................................................................. 14,278 16,173 9,171
Class W.................................................................. -- 3,403 4,758
Custodian and accounting fees.............................................. 18,775 56,004 31,119
Reports to shareholders.................................................... 18,730 41,302 20,800
Audit and tax fees......................................................... 23,600 30,440 30,924
Legal fees................................................................. 6,338 10,332 7,955
Trustees' fees and expenses................................................ 5,209 10,546 7,394
Interest expense........................................................... 257 -- 4,732
Other expenses............................................................. 7,478 11,313 9,654
---------- ----------- -----------
Total expenses before fee waivers, expense reimbursements and expense
recoupments............................................................. 1,414,268 3,148,644 2,269,835
Net (fees waived and expenses reimbursed)/recouped by investment
advisor (Note 3)........................................................ (353,520) -- --
---------- ----------- -----------
Net expenses............................................................. 1,060,748 3,148,644 2,269,835
---------- ----------- -----------
Net investment income (loss)............................................. 750,548 5,013,267 6,072,527
---------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain (loss) on investments (unaffiliated)...................... 371,527 (2,011,548) 1,003,606
Net realized foreign exchange gain (loss) on other assets and liabilities... -- (442,170) 3,113
---------- ----------- -----------
Net realized gain (loss) on investments and foreign currencies.............. 371,527 (2,453,718) 1,006,719
---------- ----------- -----------
Change in unrealized appreciation (depreciation) on investments
(unaffiliated)............................................................. 1,127,654 19,935,258 10,643,526
Change in unrealized foreign exchange gain (loss) on other assets and
liabilities................................................................ -- 1,672,998 (93)
---------- ----------- -----------
Net unrealized gain (loss) on investments and foreign currencies............ 1,127,654 21,608,256 10,643,433
---------- ----------- -----------
Net realized and unrealized gain (loss) on investments and foreign
currencies................................................................. 1,499,181 19,154,538 11,650,152
---------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............. $2,249,729 $24,167,805 $17,722,679
========== =========== ===========
* Net of foreign withholding taxes on interest and dividends of............. $ -- $ 24 $ --
========== =========== ===========
See Notes to Financial Statements
8
SunAmerica Income Funds
STATEMENTS OF CHANGES IN NET ASSETS
U.S. Government
Securities Fund
--------------------------
For the
six months
ended For year
September 30, ended
2016 March 31,
(unaudited) 2016
------------- ------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)......................................... $ 750,548 $ 1,356,002
Net realized gain (loss) on investments and foreign currencies....... 371,527 182,870
Net unrealized gain (loss) on investments and foreign currencies..... 1,127,654 (1,357,314)
------------ ------------
Net increase (decrease) in net assets resulting from operations....... 2,249,729 181,558
------------ ------------
Distributions to shareholders from:
Net investment income (Class A)...................................... (1,380,632) (2,895,384)
Net investment income (Class B)*..................................... -- --
Net investment income (Class C)...................................... (154,595) (293,718)
Net investment income (Class W)*..................................... -- --
Net realized gain on securities (Class A)............................ -- --
Net realized gain on securities (Class B)*........................... -- --
Net realized gain on securities (Class C)............................ -- --
Net realized gain on securities (Class W)*........................... -- --
------------ ------------
Total distributions to shareholders................................... (1,535,227) (3,189,102)
------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions (Note 6)................................................ 15,369,424 (20,275,343)
------------ ------------
Total increase (decrease) in net assets............................... 16,083,926 (23,282,887)
NET ASSETS:
Beginning of period................................................... 188,133,125 211,416,012
------------ ------------
End of period+........................................................ $204,217,051 $188,133,125
============ ============
+ Includes accumulated undistributed net investment income (loss)..... $ (1,308,347) $ (523,668)
============ ============
* See Note 1
See Notes to Financial Statements
9
SunAmerica Income Funds
STATEMENTS OF CHANGES IN NET ASSETS -- (continued)
Strategic Bond Fund Flexible Credit Fund
-------------------------- --------------------------
For the For the
six months six months
ended For the year ended For the year
September 30, ended September 30, ended
2016 March 31, 2016 March 31,
(unaudited) 2016 (unaudited) 2016
------------- ------------ ------------- ------------
INCREASE (DECREASE)
IN NET ASSETS
Operations:
Net investment
income (loss)...... $ 5,013,267 $ 13,804,186 $ 6,072,527 $ 9,204,013
Net realized gain
(loss) on
investments and
foreign currencies. (2,453,718) (17,240,406) 1,006,719 (5,156,658)
Net unrealized gain
(loss) on
investments and
foreign currencies. 21,608,256 (8,304,403) 10,643,433 (7,105,660)
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets resulting
from operations...... 24,167,805 (11,740,623) 17,722,679 (3,058,305)
------------ ------------ ------------ ------------
Distributions to
shareholders from:
Net investment
income (Class A)... (3,163,277) (8,053,946) (2,646,274) (4,950,089)
Net investment
income (Class B)*.. (452,372) (1,193,570) -- --
Net investment
income (Class C)... (2,221,989) (5,817,628) (1,113,984) (2,058,159)
Net investment
income (Class W)*.. (591,153) (1,325,284) (2,229,626) (2,677,821)
Net realized gain on
securities
(Class A).......... -- -- -- --
Net realized gain on
securities
(Class B)*......... -- -- -- --
Net realized gain on
securities
(Class C).......... -- -- -- --
Net realized gain on
securities
(Class W)*......... -- -- -- --
------------ ------------ ------------ ------------
Total distributions
to shareholders...... (6,428,791) (16,390,428) (5,989,884) (9,686,069)
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets resulting
from capital share
transactions (Note 6) (18,817,901) (58,954,992) 45,801,793 104,299,983
------------ ------------ ------------ ------------
Total increase
(decrease) in net
assets............... (1,078,887) (87,086,043) 57,534,588 91,555,609
NET ASSETS:
Beginning of period... 387,686,345 474,772,388 278,107,217 186,551,608
------------ ------------ ------------ ------------
End of period+........ $386,607,458 $387,686,345 $335,641,805 $278,107,217
============ ============ ============ ============
+ Includes
accumulated
undistributed net
investment income
(loss)............... $ (2,958,555) $ (1,543,031) $ 302,269 $ 219,626
============ ============ ============ ============
* See Note 1
See Notes to Financial Statements
10
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT SECURITIES FUND
-------------------------------
Net gain
(loss) on
Net investments Distributions Net Net
Asset (both Dividends from net Asset Assets,
Value, Net realized Total from from net realized Total Value, end of
beginning investment and investment investment gains on Distri- end of Total period
Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- --------
Class A
-------
03/31/12 $ 9.51 $0.17 $ 0.62 $ 0.79 $(0.22) $(0.02) $(0.24) $10.06 8.34%(4) $118,434
03/31/13 10.06 0.14 0.05 0.19 (0.21) (0.13) (0.34) 9.91 1.84 121,807
03/31/14 9.91 0.14 (0.45) (0.31) (0.17) -- (0.17) 9.43 (3.11) 106,747
03/31/15 9.43 0.12 0.34 0.46 (0.16) -- (0.16) 9.73 4.94 187,417
03/31/16 9.73 0.08 (0.05) 0.03 (0.17) -- (0.17) 9.59 0.33 156,468
09/30/16+ 9.59 0.04 0.08 0.12 (0.08) -- (0.08) 9.63 1.27 175,083
Class C
-------
03/31/12 $ 9.50 $0.11 $ 0.61 $ 0.72 $(0.15) $(0.02) $(0.17) $10.05 7.64%(4) $ 14,673
03/31/13 10.05 0.08 0.05 0.13 (0.14) (0.13) (0.27) 9.91 1.28 12,226
03/31/14 9.91 0.08 (0.46) (0.38) (0.11) -- (0.11) 9.42 (3.84) 7,295
03/31/15 9.42 0.06 0.34 0.40 (0.10) -- (0.10) 9.72 4.27 23,999
03/31/16 9.72 0.01 (0.03) (0.02) (0.11) -- (0.11) 9.59 (0.22) 31,665
09/30/16+ 9.59 0.01 0.08 0.09 (0.05) -- (0.05) 9.63 0.94 29,134
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets(3) net assets(3) Turnover
------------- ------------- ---------
0.99% 1.73% 152%
0.99 1.40 89
0.99 1.42 122
0.99 1.24 57
0.99 0.81 36
0.99(5) 0.87(5) 46
1.64% 1.08% 152%
1.64 0.76 89
1.64 0.77 122
1.64 0.61 57
1.64 0.16 36
1.64(5) 0.22(5) 46
--------
+ Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/12 03/31/13 03/31/14 03/31/15 03/31/16 09/30/16+(5)
-------- -------- -------- -------- -------- ------------
U.S. Government Securities Fund Class A. 0.39% 0.40% 0.40% 0.38% 0.37% 0.35%
U.S. Government Securities Fund Class C. 0.46 0.45 0.57 0.50 0.39 0.44
(4)The Fund's performance figure was increased by less than 0.01% from gains on
the disposal of investments in violation of investment restrictions.
(5)Annualized
See Notes to Financial Statements
11
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS -- (continued)
STRATEGIC BOND FUND
-------------------
Net gain
(loss) on
Net investments Distributions Net Net
Asset (both Dividends from net Asset Assets,
Value, Net realized Total from from net realized Total Value, end of
beginning investment and investment investment gains on Distri- end of Total period
Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's)
-------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- --------
Class A
-------
03/31/12 $3.46 $0.16 $ 0.02 $ 0.18 $(0.19) $-- $(0.19) $3.45 5.30% $299,325
03/31/13 3.45 0.13 0.16 0.29 (0.14) -- (0.14) 3.60 8.64 336,759
03/31/14 3.60 0.14 (0.06) 0.08 (0.15) -- (0.15) 3.53 2.34 255,821
03/31/15 3.53 0.13 (0.04) 0.09 (0.13) -- (0.13) 3.49 2.70 235,093
03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.32) 175,386
09/30/16+ 3.27 0.05 0.17 0.22 (0.06) -- (0.06) 3.43 6.79 172,185
Class B
-------
03/31/12 $3.46 $0.14 $ 0.01 $ 0.15 $(0.16) $-- $(0.16) $3.45 4.60% $ 52,000
03/31/13 3.45 0.11 0.15 0.26 (0.12) -- (0.12) 3.59 7.62 56,776
03/31/14 3.59 0.12 (0.05) 0.07 (0.13) -- (0.13) 3.53 1.95 46,462
03/31/15 3.53 0.10 (0.03) 0.07 (0.11) -- (0.11) 3.49 2.01 39,733
03/31/16 3.49 0.10 (0.20) (0.10) (0.12) -- (0.12) 3.27 (2.97) 31,038
09/30/16+ 3.27 0.04 0.17 0.21 (0.05) -- (0.05) 3.43 6.43 31,082
Class C
-------
03/31/12 $3.48 $0.14 $ 0.02 $ 0.16 $(0.17) $-- $(0.17) $3.47 4.63% $251,425
03/31/13 3.47 0.11 0.15 0.26 (0.12) -- (0.12) 3.61 7.62 270,965
03/31/14 3.61 0.12 (0.06) 0.06 (0.13) -- (0.13) 3.54 1.69 197,904
03/31/15 3.54 0.11 (0.04) 0.07 (0.11) -- (0.11) 3.50 2.05 184,282
03/31/16 3.50 0.10 (0.19) (0.09) (0.12) -- (0.12) 3.29 (2.63) 151,197
09/30/16+ 3.29 0.04 0.16 0.20 (0.05) -- (0.05) 3.44 6.10 149,524
Class W
-------
01/29/15(4)-03/31/15 $3.48 $0.01 $ 0.02 $ 0.03 $(0.02) $-- $(0.02) $3.49 0.99% $ 15,664
03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.14) 30,065
09/30/16+ 3.27 0.05 0.17 0.22 (0.06) -- (0.06) 3.43 6.89 33,817
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets net assets Turnover
---------- ---------- ---------
1.31% 4.72% 144%
1.30 3.70 166
1.31 4.01 158
1.30 3.62 137
1.34 3.54 108
1.33(5) 2.86(5) 124
1.98% 4.07% 144%
1.97 3.02 166
1.97 3.35 158
1.97 2.95 137
2.01 2.87 108
1.99(5) 2.20(5) 124
1.96% 4.09% 144%
1.94 3.05 166
1.96 3.37 158
1.94 2.98 137
1.98 2.90 108
1.98(5) 2.21(5) 124
1.20%(3)(5) 2.73%(3)(5) 137%
1.15 3.71 108
1.12(5) 3.06(5) 124
--------
+ Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/15
--------
Strategic Bond Fund Class W............. 0.69%(5)
(4)Inception date of class.
(5)Annualized.
See Notes to Financial Statements
12
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS -- (continued)
FLEXIBLE CREDIT FUND
--------------------
Net gain
(loss) on
Net investments Distributions Net
Asset (both Dividends from net Asset Net Assets,
Value, Net realized Total from from net realized Total Value, end of
beginning investment and investment investment gains on Distri- end of Total period
Period Ended of period income(1) unrealized) operations income investment butions period Return(2) (000's)
-------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -----------
Class A
-------
03/31/12 $3.50 $0.23 $(0.08) $ 0.15 $(0.25) $-- $(0.25) $3.40 4.52% $ 81,477
03/31/13 3.40 0.20 0.18 0.38 (0.20) -- (0.20) 3.58 11.42 74,175
03/31/14 3.58 0.19 0.00 0.19 (0.18) -- (0.18) 3.59 5.60 70,713
03/31/15 3.59 0.15 (0.11) 0.04 (0.17) -- (0.17) 3.46 1.06 127,508
03/31/16 3.46 0.13 (0.16) (0.03) (0.14) -- (0.14) 3.29 (0.93) 125,775
09/30/16+ 3.29 0.07 0.13 0.20 (0.07) -- (0.07) 3.42 6.05 142,525
Class C
-------
03/31/12 $3.53 $0.21 $(0.09) $ 0.12 $(0.23) $-- $(0.23) $3.42 3.56% $ 36,723
03/31/13 3.42 0.18 0.18 0.36 (0.18) -- (0.18) 3.60 10.67 33,918
03/31/14 3.60 0.17 0.00 0.17 (0.16) -- (0.16) 3.61 4.92 30,595
03/31/15 3.61 0.13 (0.11) 0.02 (0.15) -- (0.15) 3.48 0.43 45,411
03/31/16 3.48 0.11 (0.16) (0.05) (0.12) -- (0.12) 3.31 (1.54) 61,891
09/30/16+ 3.31 0.06 0.13 0.19 (0.06) -- (0.06) 3.44 5.68 70,756
Class W
-------
10/01/14(4)-03/31/15 $3.50 $0.06 $(0.01) $ 0.05 $(0.08) $-- $(0.08) $3.47 1.57% 13,632
03/31/16 3.47 0.13 (0.17) (0.04) (0.14) -- (0.14) 3.29 (1.02) 90,441
09/30/16+ 3.29 0.07 0.14 0.21 (0.07) -- (0.07) 3.43 6.48 122,361
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets(3) net assets(3) Turnover
------------- ------------- ---------
1.36% 6.72% 52%
1.36 5.82 44
1.36 5.41 49
1.41 4.50 74
1.45 3.92 52
1.45(5) 4.05(5) 25
2.01% 6.11% 52%
2.01 5.18 44
2.01 4.76 49
2.06 3.88 74
2.10 3.27 52
2.07(5) 3.43(5) 25
1.25%(5) 4.25%(5) 74%
1.25 4.11 52
1.19(5) 4.30(5) 25
--------
+ Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/12 03/31/13 03/31/14 03/31/15 03/31/16 09/30/16+(5)
-------- -------- -------- -------- -------- ------------
Flexible Credit Fund Class A............ 0.18% 0.16% 0.17% 0.19% 0.03% --%
Flexible Credit Fund Class C............ 0.19 0.16 0.18 0.20 0.02 --
Flexible Credit Fund Class W............ -- -- -- 1.12(5) 0.04 --
(4)Inception date of class.
(5)Annualized.
See Notes to Financial Statements
13
SunAmerica U.S. Government Securities Fund
PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited)
Industry Allocation*
Government National Mtg. Assoc.. 34.4%
United States Treasury Notes.... 16.8
United States Treasury Bonds.... 16.5
Federal Farm Credit Bank........ 14.5
Federal Home Loan Mtg. Corp..... 5.7
Repurchase Agreements........... 5.5
Federal Home Loan Bank.......... 4.1
Federal National Mtg. Assoc..... 2.1
Small Business Administration... 0.1
----
99.7%
====
Credit Quality+#
Aaa........... 100.0%
=====
--------
*Calculated as a percentage of net assets
+Source: Moody's
#Calculated as a percentage of total debt issues
14
SunAmerica U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
Principal Value
Security Description Amount (Note 2)
U.S. GOVERNMENT AGENCIES -- 60.9%
Federal Farm Credit Bank -- 14.5%
2.35% due 07/07/2025............... $ 4,350,000 $ 4,350,231
2.36% due 06/16/2025............... 20,000,000 20,114,800
2.63% due 02/24/2025............... 5,150,000 5,153,141
-----------
29,618,172
-----------
Federal Home Loan Bank -- 4.1%
0.75% due 08/15/2019(1)............ 2,250,000 2,248,769
1.69% due 02/26/2021............... 4,000,000 4,000,044
2.14% due 12/05/2022............... 372,093 371,878
4.50% due 09/13/2019............... 1,490,000 1,639,921
-----------
8,260,612
-----------
Federal Home Loan Mtg. Corp. -- 5.7%
3.50% due 08/01/2030............... 4,003,312 4,235,326
3.50% due 12/01/2044............... 4,700,271 4,975,998
Federal Home Loan Mtg. Corp. REMIC
Series 3747, Class WA
3.50% due 10/15/2030(2)............ 2,336,622 2,475,523
-----------
11,686,847
-----------
Federal National Mtg. Assoc. -- 2.1%
2.50% due 11/01/2027............... 4,206,384 4,361,172
-----------
Government National Mtg. Assoc. -- 34.4%
3.50% due 11/15/2041............... 587,193 624,657
3.50% due 03/15/2042............... 436,446 465,908
3.50% due 06/15/2042............... 2,484,504 2,641,066
3.50% due 07/15/2042............... 816,673 868,356
3.50% due 02/20/2045............... 1,327,074 1,409,711
4.00% due 03/15/2039............... 245,081 263,471
4.00% due 04/15/2039............... 134,356 144,439
4.00% due 06/15/2039............... 631,024 678,123
4.00% due 12/15/2039............... 314,569 338,176
4.00% due 08/15/2040............... 282,138 303,314
4.00% due 09/15/2040............... 480,559 517,081
4.00% due 11/15/2040............... 458,727 494,548
4.00% due 12/15/2040............... 839,919 906,554
4.00% due 02/15/2041............... 387,426 416,644
4.00% due 03/15/2041............... 245,303 264,091
4.00% due 07/15/2041............... 486,467 523,820
4.00% due 08/15/2041............... 985,242 1,060,931
4.00% due 09/15/2041............... 1,902,071 2,046,347
4.00% due 10/15/2041............... 881,093 949,975
4.00% due 11/15/2041............... 2,705,678 2,915,799
4.00% due 12/15/2041............... 1,156,999 1,249,261
4.00% due 01/15/2042............... 2,131,122 2,294,415
4.00% due 02/15/2042............... 1,253,203 1,351,358
4.00% due 03/15/2042............... 296,774 319,947
4.00% due 06/15/2042............... 539,540 581,565
4.50% due 05/15/2018............... 76,442 77,790
4.50% due 08/15/2018............... 82,690 84,177
4.50% due 09/15/2018............... 282,208 287,820
4.50% due 10/15/2018............... 385,787 393,381
4.50% due 09/15/2033............... 434,034 483,443
4.50% due 03/15/2039............... 127,713 141,039
4.50% due 04/15/2039............... 103,480 114,292
4.50% due 05/15/2039............... 475,822 526,047
4.50% due 06/15/2039............... 1,784,895 1,974,098
4.50% due 07/15/2039............... 853,545 944,254
4.50% due 09/15/2039............... 248,278 274,601
Principal Value
Security Description Amount (Note 2)
Government National Mtg. Assoc. (continued)
4.50% due 10/15/2039...... $ 259,638 $ 286,883
4.50% due 11/15/2039...... 260,199 287,743
4.50% due 12/15/2039...... 699,102 773,223
4.50% due 01/15/2040...... 329,268 364,288
4.50% due 02/15/2040...... 1,375,200 1,520,131
4.50% due 03/15/2040...... 795,626 880,850
4.50% due 04/15/2040...... 818,762 906,147
4.50% due 05/15/2040...... 340,803 377,805
4.50% due 06/15/2040...... 373,076 412,006
4.50% due 07/15/2040...... 684,493 757,557
4.50% due 08/15/2040...... 176,858 195,950
4.50% due 09/15/2040...... 178,779 198,777
4.50% due 11/15/2040...... 248,925 275,832
4.50% due 01/15/2041...... 238,716 263,623
4.50% due 02/15/2041...... 265,375 293,065
4.50% due 03/15/2041...... 1,719,955 1,902,319
4.50% due 04/15/2041...... 1,006,950 1,113,870
4.50% due 05/15/2041...... 337,058 372,573
4.50% due 06/15/2041...... 554,920 613,374
4.50% due 07/15/2041...... 164,740 181,929
4.50% due 08/15/2041...... 515,115 570,368
4.50% due 04/20/2044...... 978,108 1,056,591
5.00% due 04/15/2018...... 320,640 328,309
5.00% due 05/15/2018...... 34,302 34,665
5.00% due 08/15/2033...... 483,722 543,298
5.00% due 10/15/2033...... 789,380 884,857
5.00% due 05/15/2035...... 131,791 146,909
5.00% due 08/15/2035...... 440,775 495,816
5.00% due 03/15/2036...... 176,945 197,652
5.00% due 05/15/2036...... 111,675 125,693
5.00% due 09/15/2036...... 254,695 285,033
5.00% due 10/15/2036...... 96,017 107,031
5.00% due 01/15/2037...... 256,728 286,179
5.00% due 02/15/2037...... 473,208 530,518
5.00% due 03/15/2037...... 95,615 107,548
5.00% due 04/15/2037...... 682,266 765,530
5.00% due 04/15/2038...... 577,358 649,139
5.00% due 05/15/2038...... 286,166 320,701
5.00% due 08/15/2038...... 707,553 789,117
5.00% due 01/15/2039...... 261,771 294,312
5.00% due 02/15/2039...... 141,913 159,520
5.00% due 03/15/2039...... 142,330 158,658
5.00% due 04/15/2039...... 211,172 237,399
5.00% due 07/20/2039...... 1,352,611 1,491,243
5.00% due 08/15/2039...... 379,790 425,635
5.00% due 09/20/2039...... 4,440,580 4,963,152
5.00% due 10/15/2039...... 922,078 1,031,630
5.00% due 11/15/2039...... 790,601 889,469
5.00% due 12/15/2039...... 659,829 741,402
5.00% due 04/15/2040...... 672,020 755,032
5.00% due 05/15/2040...... 1,299,157 1,453,645
5.00% due 07/20/2045...... 616,628 670,430
5.50% due 06/15/2033...... 867,829 988,655
5.50% due 07/15/2033...... 134,765 154,232
5.50% due 10/15/2033...... 206,960 236,571
5.50% due 01/15/2034...... 609,922 696,190
5.50% due 02/15/2034...... 323,668 374,130
15
SunAmerica U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Government National Mtg. Assoc. (continued)
5.50% due 04/20/2035........ $ 575,404 $ 653,342
5.50% due 09/15/2035........ 523,211 611,866
5.50% due 10/15/2035........ 400,450 457,404
5.50% due 02/15/2038........ 190,778 216,305
5.50% due 04/15/2038........ 108,198 122,294
5.50% due 05/15/2038........ 102,473 115,822
5.50% due 09/15/2039........ 94,566 107,149
5.50% due 03/15/2040........ 174,613 198,947
5.50% due 08/15/2040........ 127,891 144,552
6.00% due 04/15/2028........ 196,222 229,717
6.00% due 08/15/2033........ 314,954 369,788
6.00% due 12/15/2033........ 151,694 177,919
6.00% due 07/15/2034........ 116,291 133,225
6.00% due 12/15/2034........ 111,156 129,489
6.00% due 09/20/2038........ 1,405,389 1,609,557
6.50% due 10/15/2031........ 104,346 120,335
------------
70,252,414
------------
Small Business Administration -- 0.1%
6.30% due 06/01/2018........ 84,901 87,755
------------
Total U.S. Government Agencies
(cost $121,992,028)......... 124,266,972
------------
U.S. GOVERNMENT TREASURIES -- 33.3%
United States Treasury Bonds -- 16.5%
2.25% due 08/15/2046........ 16,000,000 15,710,000
2.50% due 02/15/2045........ 1,000,000 1,033,438
4.25% due 11/15/2040........ 8,000,000 11,015,624
4.75% due 02/15/2041........ 4,000,000 5,901,408
------------
33,660,470
------------
Principal Value
Security Description Amount (Note 2)
United States Treasury Notes -- 16.8%
1.63% due 05/15/2026............... $25,000,000 $ 25,033,200
2.00% due 02/15/2025............... 5,000,000 5,177,735
2.00% due 08/15/2025............... 3,000,000 3,104,532
3.13% due 05/15/2019............... 1,000,000 1,058,789
------------
34,374,256
------------
Total U.S. Government Treasuries
(cost $61,326,553)................. 68,034,726
------------
Total Long-Term Investment Securities
(cost $183,318,581)................ 192,301,698
------------
REPURCHASE AGREEMENTS -- 5.5%
State Street Bank and Trust Co.
Joint Repurchase Agreement(3)
(cost $11,282,000)................. 11,282,000 11,282,000
------------
TOTAL INVESTMENTS
(cost $194,600,581)(4)............. 99.7% 203,583,698
Other assets less liabilities......... 0.3 633,353
----------- ------------
NET ASSETS 100.0% $204,217,051
=========== ============
--------
(1)"Step-up" security where the rate increases ("steps-up") at a predetermined
rate. Rate shown reflects the increased rate.
(2)Collateralized Mortgage Obligation
(3)See Note 2 for details of Joint Repurchase Agreements.
(4)See Note 5 for cost of investments on a tax basis.
16
SunAmerica U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2016 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
- --------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
U.S. Government Agencies... $-- $124,266,972 $-- $124,266,972
U.S. Government Treasuries. -- 68,034,726 -- 68,034,726
Repurchase Agreements...... -- 11,282,000 -- 11,282,000
--- ------------ --- ------------
Total Investments at Value. $-- $203,583,698 $-- $203,583,698
=== ============ === ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
17
SunAmerica Strategic Bond Fund
PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited)
Industry Allocation*
Federal National Mtg. Assoc............ 13.5%
Federal Home Loan Mtg. Corp............ 10.1
Sovereign.............................. 7.9
Time Deposits.......................... 5.5
Diversified Banking Institutions....... 5.0
Government National Mtg. Assoc......... 3.7
Banks-Commercial....................... 2.9
Pipelines.............................. 2.5
Oil Companies-Exploration & Production. 2.5
Diversified Financial Services......... 2.3
Electric-Integrated.................... 2.3
Telephone-Integrated................... 2.2
Cable/Satellite TV..................... 1.9
Oil Companies-Integrated............... 1.4
Auto-Cars/Light Trucks................. 1.3
Medical-Hospitals...................... 1.3
Cellular Telecom....................... 1.2
United States Treasury Bonds........... 0.9
Paper & Related Products............... 0.9
Computers.............................. 0.8
Real Estate Investment Trusts.......... 0.8
Satellite Telecom...................... 0.7
Steel-Producers........................ 0.7
Finance-Consumer Loans................. 0.7
Finance-Auto Loans..................... 0.7
Computer Services...................... 0.6
Savings & Loans/Thrifts................ 0.6
Insurance-Multi-line................... 0.6
Casino Hotels.......................... 0.5
Oil Refining & Marketing............... 0.5
Medical-Drugs.......................... 0.5
Electric-Generation.................... 0.5
Banks-Fiduciary........................ 0.5
Food-Retail............................ 0.5
Electronic Components-Semiconductors... 0.5
Retail-Restaurants..................... 0.5
Banks-Super Regional................... 0.4
Gambling (Non-Hotel)................... 0.4
Diversified Manufacturing Operations... 0.4
Brewery................................ 0.4
Aerospace/Defense-Equipment............ 0.4
Rental Auto/Equipment.................. 0.4
United States Treasury Notes........... 0.4
Independent Power Producers............ 0.4
Auto-Heavy Duty Trucks................. 0.4
Investment Management/Advisor Services. 0.4
Food-Misc./Diversified................. 0.4
Airlines............................... 0.4
Printing-Commercial.................... 0.4
Insurance-Mutual....................... 0.4
Medical Labs & Testing Services........ 0.4
Electric-Distribution.................. 0.4
Metal Processors & Fabrication......... 0.4
Building-Residential/Commercial........ 0.3
Telecom Services....................... 0.3
Insurance-Life/Health.................. 0.3
Containers-Metal/Glass................. 0.3
Medical-HMO............................ 0.3
Repurchase Agreements.................. 0.3
Chemicals-Diversified.................. 0.3
Internet Connectivity Services....... 0.3%
Oil-Field Services................... 0.3
Diversified Minerals................. 0.3
Medical-Biomedical/Gene.............. 0.3
Machinery-Farming.................... 0.3
Food-Dairy Products.................. 0.3
Coal................................. 0.3
Wire & Cable Products................ 0.3
Enterprise Software/Service.......... 0.3
Metal-Diversified.................... 0.3
Financial Guarantee Insurance........ 0.3
Chemicals-Plastics................... 0.3
Real Estate Operations & Development. 0.3
Chemicals-Specialty.................. 0.3
Industrial Gases..................... 0.3
Containers-Paper/Plastic............. 0.3
Cruise Lines......................... 0.2
Building Products-Wood............... 0.2
Computers-Integrated Systems......... 0.2
Finance-Other Services............... 0.2
Firearms & Ammunition................ 0.2
Publishing-Periodicals............... 0.2
Airport Development/Maintenance...... 0.2
Retail-Drug Store.................... 0.2
Finance-Mortgage Loan/Banker......... 0.2
Broadcast Services/Program........... 0.2
Batteries/Battery Systems............ 0.2
Internet Content-Entertainment....... 0.2
Real Estate Management/Services...... 0.2
Metal-Copper......................... 0.2
Finance-Leasing Companies............ 0.2
Medical-Generic Drugs................ 0.2
Television........................... 0.2
Insurance-Reinsurance................ 0.2
Security Services.................... 0.2
Applications Software................ 0.2
Finance-Commercial................... 0.2
Multimedia........................... 0.2
Food-Meat Products................... 0.2
Marine Services...................... 0.2
Retail-Discount...................... 0.2
Energy-Alternate Sources............. 0.2
Beverages-Wine/Spirits............... 0.2
Networking Products.................. 0.2
Food-Wholesale/Distribution.......... 0.2
Footwear & Related Apparel........... 0.2
E-Commerce/Services.................. 0.2
Radio................................ 0.2
Telecommunication Equipment.......... 0.2
Computers-Memory Devices............. 0.2
Hotels/Motels........................ 0.2
Aerospace/Defense.................... 0.2
Metal-Aluminum....................... 0.2
Banks-Money Center................... 0.1
Municipal Bonds & Notes.............. 0.1
Machinery-General Industrial......... 0.1
Computer Software.................... 0.1
Pharmacy Services.................... 0.1
Retail-Appliances.................... 0.1
Hazardous Waste Disposal............. 0.1
18
SunAmerica Strategic Bond Fund
PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited) (continued)
Industry Allocation* (continued)
Finance-Credit Card.......................... 0.1%
Tools-Hand Held.............................. 0.1
Semiconductor Components-Integrated Circuits. 0.1
Beverages-Non-alcoholic...................... 0.1
Gas-Distribution............................. 0.1
Coatings/Paint............................... 0.1
SupraNational Banks.......................... 0.1
Petrochemicals............................... 0.1
Steel Pipe & Tube............................ 0.1
Home Furnishings............................. 0.1
Metal-Iron................................... 0.1
Agricultural Chemicals....................... 0.1
Advertising Agencies......................... 0.1
Oil Field Machinery & Equipment.............. 0.1
Gold Mining.................................. 0.1
Rubber/Plastic Products...................... 0.1
Building & Construction-Misc................. 0.1
Consumer Products-Misc....................... 0.1
Transport-Marine............................. 0.1
E-Commerce/Products.......................... 0.1
Auto/Truck Parts & Equipment-Original........ 0.1
Oil & Gas Drilling........................... 0.1
Electronic Measurement Instruments........... 0.1
Building Societies........................... 0.1
Data Processing/Management................... 0.1
Tennessee Valley Authority................... 0.1
Publishing-Newspapers........................ 0.1
Home Decoration Products..................... 0.1
Finance-Investment Banker/Broker............. 0.1
Sugar........................................ 0.1
Gas-Transportation........................... 0.1
Retail-Major Department Stores............... 0.1
Building Products-Cement..................... 0.1
Power Converter/Supply Equipment............. 0.1
Office Automation & Equipment................ 0.1
-----
104.8%
=====
Credit Quality+#
Aaa........... 31.5%
Aa............ 3.4
A............. 11.1
Baa........... 15.2
Ba............ 11.6
B............. 16.3
Caa........... 6.2
Not Rated@.... 4.7
-----
100.0%
=====
--------
*Calculated as a percentage of net assets
+Source: Moody's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
19
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
Principal Value
Security Description Amount** (Note 2)
ASSET BACKED SECURITIES -- 2.1%
Diversified Financial Services -- 2.1%
American Express Credit Account
Master Trust FRS
Series 2014-1, Class A
0.89% due 12/15/2021..................... $130,000 $130,505
Avis Budget Rental Car Funding AESOP LLC
Series 2013-1A, Class A
1.92% due 09/20/2019*.................... 450,000 449,886
BA Credit Card Trust
Series 2015-A2, Class A
1.36% due 09/15/2020..................... 78,000 78,316
Capital One Multi-Asset Execution Trust
Series 2016-A4, Class A4
1.33% due 06/15/2022..................... 145,000 144,791
Carmax Auto Owner Trust
Series 2016-3, Class A4
1.60% due 01/18/2022..................... 150,000 150,786
Chase Issuance Trust FRS
Series 2014-A5, Class A5
0.89% due 04/15/2021..................... 326,000 326,939
Chase Issuance Trust
Series 2016-A2, Class A
1.37% due 06/15/2021..................... 200,000 200,585
Chase Mtg. Trust VRS
Series 2016-2, Class M2
3.75% due 12/25/2045*(1)................. 266,277 275,653
Citigroup Commercial Mtg. Trust
Series 2016-SMPL, Class A
2.23% due 09/10/2031(2)(3)............... 163,000 162,984
Commercial Mtg. Trust
Series 2015-CR24, Class A2
3.02% due 08/10/2048(2).................. 65,325 68,389
Commercial Mtg. Trust VRS
Series 2016-787S, Class A
3.55% due 02/10/2036*(2)................. 329,000 353,898
Commercial Mtg. Trust VRS
Series 2016-787S, Class B
3.96% due 02/10/2036*(2)................. 132,000 142,352
Core Industrial Trust
Series 2015-CALW, Class A
3.04% due 02/10/2034*(2)................. 685,000 721,110
CSAIL Commercial Mtg. Trust
Series 2015-C1, Class A2
2.97% due 04/15/2050(2).................. 39,000 40,476
Discover Card Execution Note Trust
Series 2015-A4, Class A4
2.19% due 04/17/2023..................... 117,000 120,335
Ford Credit Auto Owner Trust
Series 2014-C, Class B
1.97% due 04/15/2020..................... 76,000 76,596
Ford Credit Auto Owner Trust
Series 2015-2, Class A
2.44% due 01/15/2027*.................... 50,000 51,342
GS Mtg. Securities Corp. II
Series GC30, Class A2
2.73% due 05/10/2050(2).................. 73,125 75,458
GS Mtg. Securities Trust
Series 2015-GC28, Class A2
2.90% due 02/10/2048(2).................. 102,000 105,402
Principal Value
Security Description Amount** (Note 2)
Diversified Financial Services (continued)
Honda Auto Receivables Owner Trust
Series 2016-2, Class A4
1.62% due 08/15/2022....................... $ 104,000 $ 104,782
Hudson Yards Mtg. Trust
Series 2016-10HY, Class A
2.84% due 08/10/2038*(2)................... 1,830,000 1,858,757
JPMDB Commercial Mtg Securities Trust
Series 2016-C2, Class A2
2.66% due 06/15/2049(2).................... 990,000 1,026,898
Morgan Stanley Capital Barclays Bank Trust
Series 2016-MART, Class A
2.20% due 09/13/2031*(2)(3)................ 185,000 184,999
NRP Mtg. Trust VRS
Series 2013-1, Class A1
3.25% due 07/25/2043*(1)................... 131,869 132,453
Palisades Center Trust
Series 2016-PLSD, Class A
2.71% due 04/13/2033*(2)................... 843,000 859,703
Santander Drive Auto Receivables Trust
Series 2014-5, Class C
2.46% due 06/15/2020....................... 26,000 26,289
Synchrony Credit Card Master Note Trust
Series 2016-2, Class A
2.21% due 05/15/2024....................... 100,000 101,976
Taco Bell Funding LLC
Series 2016-1A, Class A2I
3.83% due 05/25/2046*...................... 81,000 82,138
Taco Bell Funding LLC
Series 2016-1A, Class A2II
4.38% due 05/25/2046*...................... 81,000 83,935
----------
Total Asset Backed Securities
(cost $8,083,902).......................... 8,137,733
----------
U.S. CORPORATE BONDS & NOTES -- 40.7%
Advertising Agencies -- 0.1%
Interpublic Group of Cos., Inc.
Senior Notes
4.20% due 04/15/2024....................... 176,000 189,005
Omnicom Group, Inc.
Company Guar. Notes
3.60% due 04/15/2026....................... 195,000 206,092
----------
395,097
----------
Aerospace/Defense -- 0.1%
Boeing Co.
Senior Notes
2.20% due 10/30/2022....................... 193,000 196,160
General Dynamics Corp.
Company Guar. Notes
2.13% due 08/15/2026....................... 158,000 155,463
----------
351,623
----------
Aerospace/Defense-Equipment -- 0.4%
Harris Corp.
Senior Notes
4.85% due 04/27/2035....................... 245,000 269,126
Harris Corp.
Senior Notes
5.05% due 04/27/2045....................... 232,000 265,702
20
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Aerospace/Defense-Equipment (continued)
Moog, Inc.
Company Guar. Notes
5.25% due 12/01/2022*................. $578,000 $ 597,507
Spirit AeroSystems, Inc.
Company Guar. Notes
3.85% due 06/15/2026.................. 36,000 37,388
Triumph Group, Inc.
Company Guar. Notes
5.25% due 06/01/2022.................. 503,000 474,078
----------
1,643,801
----------
Agricultural Operations -- 0.0%
Archer-Daniels-Midland Co.
Senior Notes
2.50% due 08/11/2026.................. 144,000 144,363
----------
Airlines -- 0.4%
Atlas Air, Inc.
Pass-Through Certs.
Series 1999-1, Class B
7.63% due 01/02/2018(3)............... 29,568 29,674
Atlas Air, Inc.
Pass-Through Certs.
Series 2000-1, Class B
9.06% due 01/02/2018(3)............... 226,917 231,228
United Airlines Pass-Through Trust
Pass-Through Certs.
Series 2014-2, Class B
4.63% due 03/03/2024.................. 678,170 688,343
United Airlines Pass-Through Trust
Pass-Through Certs.
Series 2013-1, Class B
5.38% due 02/15/2023.................. 449,602 467,586
----------
1,416,831
----------
Appliances -- 0.0%
Whirlpool Corp.
Senior Notes
4.50% due 06/01/2046.................. 137,000 147,829
----------
Applications Software -- 0.2%
Microsoft Corp.
Senior Notes
1.30% due 11/03/2018.................. 208,000 209,015
Microsoft Corp.
Senior Notes
2.40% due 08/08/2026.................. 216,000 216,183
Microsoft Corp.
Senior Notes
3.45% due 08/08/2036.................. 224,000 228,183
Microsoft Corp.
Senior Notes
3.70% due 08/08/2046.................. 88,000 89,072
----------
742,453
----------
Auto-Cars/Light Trucks -- 0.8%
American Honda Finance Corp.
Senior Notes
1.20% due 07/14/2017.................. 440,000 439,616
Principal Value
Security Description Amount** (Note 2)
Auto-Cars/Light Trucks (continued)
American Honda Finance Corp.
Senior Notes
1.20% due 07/12/2019.............. $ 288,000 $ 286,313
BMW US Capital LLC
Company Guar. Notes
1.50% due 04/11/2019*............. 210,000 210,330
Daimler Finance North America LLC
Company Guar. Notes
2.00% due 07/06/2021*............. 78,000 78,130
Daimler Finance North America LLC
Company Guar. Notes
2.45% due 05/18/2020*............. 427,000 436,014
Ford Motor Credit Co. LLC
Senior Notes
2.02% due 05/03/2019.............. 129,000 129,251
Ford Motor Credit Co. LLC
Senior Notes
3.10% due 05/04/2023.............. 328,000 330,334
Hyundai Capital America
Senior Notes
2.40% due 10/30/2018*............. 500,000 506,945
Toyota Motor Credit Corp.
Senior Notes
1.00% due 09/27/2022.............. GBP 400,000 518,627
Toyota Motor Credit Corp.
Senior Notes
2.00% due 10/24/2018.............. 163,000 165,385
----------
3,100,945
----------
Auto-Heavy Duty Trucks -- 0.4%
JB Poindexter & Co., Inc.
Senior Notes
9.00% due 04/01/2022*............. 1,325,000 1,402,844
PACCAR Financial Corp.
Senior Notes
1.65% due 02/25/2019.............. 68,000 68,684
----------
1,471,528
----------
Auto/Truck Parts & Equipment-Replacement -- 0.0%
Allison Transmission, Inc.
Company Guar. Notes
5.00% due 10/01/2024*............. 120,000 123,000
----------
Banks-Commercial -- 0.8%
BankUnited, Inc.
Senior Notes
4.88% due 11/17/2025.............. 485,000 501,421
Discover Bank
Senior Notes
3.45% due 07/27/2026.............. 250,000 251,460
Fifth Third Bank
Senior Notes
1.63% due 09/27/2019.............. 207,000 206,882
Fifth Third Bank
Senior Notes
2.30% due 03/15/2019.............. 4,000 4,071
First Horizon National Corp.
Senior Notes
3.50% due 12/15/2020.............. 609,000 621,578
21
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Banks-Commercial (continued)
First Tennessee Bank NA
Senior Notes
2.95% due 12/01/2019.................. $ 445,000 $ 450,987
Regions Financial Corp.
Senior Notes
3.20% due 02/08/2021.................. 226,000 234,940
Regions Financial Corp.
Sub. Notes
7.38% due 12/10/2037.................. 521,000 666,270
----------
2,937,609
----------
Banks-Fiduciary -- 0.2%
Citizens Financial Group, Inc.
Sub. Notes
4.15% due 09/28/2022*................. 775,000 802,214
----------
Banks-Super Regional -- 0.3%
Capital One Financial Corp.
Sub. Notes
3.75% due 07/28/2026.................. 110,000 110,390
JPMorgan Chase Bank NA
Senior Notes
1.65% due 09/23/2019.................. 399,000 400,258
Wells Fargo & Co
Senior Notes
1.50% due 09/12/2022.................. EUR 400,000 477,437
Wells Fargo & Co.
Sub. Notes
4.30% due 07/22/2027.................. 205,000 220,936
Wells Fargo & Co.
Sub. Notes
4.40% due 06/14/2046.................. 35,000 35,632
Wells Fargo & Co.
Sub. Notes
4.90% due 11/17/2045.................. 46,000 50,647
----------
1,295,300
----------
Batteries/Battery Systems -- 0.2%
EnerSys
Company Guar. Notes
5.00% due 04/30/2023*................. 876,000 874,905
----------
Brewery -- 0.2%
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
1.90% due 02/01/2019.................. 155,000 156,496
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
2.65% due 02/01/2021.................. 291,000 300,282
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
3.30% due 02/01/2023.................. 128,000 135,105
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
4.70% due 02/01/2036.................. 216,000 248,351
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
4.90% due 02/01/2046.................. 96,000 114,219
----------
954,453
----------
Principal Value
Security Description Amount** (Note 2)
Broadcast Services/Program -- 0.2%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes
Series A
6.50% due 11/15/2022................... $873,000 $879,548
--------
Building & Construction-Misc. -- 0.1%
Weekley Homes LLC/Weekley
Finance Corp.
Senior Notes
6.00% due 02/01/2023................... 384,000 341,760
--------
Building Products-Wood -- 0.2%
Boise Cascade Co.
Company Guar. Notes
5.63% due 09/01/2024*.................. 580,000 588,700
Masco Corp.
Senior Notes
4.45% due 04/01/2025................... 333,000 353,813
--------
942,513
--------
Building-Residential/Commercial -- 0.1%
K. Hovnanian Enterprises, Inc.
Senior Sec. Notes
7.25% due 10/15/2020*.................. 631,000 555,280
--------
Cable/Satellite TV -- 1.1%
Block Communications, Inc.
Senior Notes
7.25% due 02/01/2020*.................. 542,000 555,550
Cable One, Inc.
Company Guar. Notes
5.75% due 06/15/2022*.................. 688,000 718,960
CCO Holdings LLC/CCO Holdings
Capital Corp.
Senior Notes
5.75% due 02/15/2026*.................. 232,000 245,920
CCO Holdings LLC/CCO Holdings
Capital Corp.
Senior Notes
5.88% due 04/01/2024*.................. 290,000 309,401
Charter Communications Operating
LLC/Charter Communications
Operating Capital
Senior Sec. Notes
3.58% due 07/23/2020*.................. 168,000 175,593
Charter Communications Operating
LLC/Charter Communications
Operating Capital
Senior Sec. Notes
6.38% due 10/23/2035*.................. 133,000 156,645
Charter Communications Operating
LLC/Charter Communications
Operating Capital
Senior Sec. Notes
6.48% due 10/23/2045*.................. 81,000 97,955
Comcast Corp.
Company Guar. Notes
2.35% due 01/15/2027................... 144,000 142,083
22
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Cable/Satellite TV (continued)
Comcast Corp.
Company Guar. Notes
3.20% due 07/15/2036.................. $ 149,000 $ 145,737
Comcast Corp.
Company Guar. Notes
3.40% due 07/15/2046.................. 149,000 144,843
Comcast Corp.
Company Guar. Notes
5.50% due 11/23/2029.................. GBP 135,000 247,657
CSC Holdings LLC
Company Guar. Notes
5.50% due 04/15/2027*................. 585,000 598,163
DISH DBS Corp.
Company Guar. Notes
7.75% due 07/01/2026*................. 800,000 850,000
----------
4,388,507
----------
Casino Hotels -- 0.4%
Caesars Entertainment Resort
Properties LLC
Sec. Notes
11.00% due 10/01/2021................. 381,000 408,622
Downstream Development Authority
of the Quapaw Tribe of Oklahoma
Senior Sec. Notes
10.50% due 07/01/2019*................ 640,000 646,400
Golden Nugget Escrow, Inc.
Senior Notes
8.50% due 12/01/2021*................. 547,000 574,350
----------
1,629,372
----------
Cellular Telecom -- 1.1%
Sprint Communications, Inc.
Senior Notes
7.00% due 08/15/2020.................. 475,000 477,375
Sprint Communications, Inc.
Company Guar. Notes
9.00% due 11/15/2018*................. 515,000 568,431
Sprint Corp.
Company Guar. Notes
7.25% due 09/15/2021.................. 2,547,000 2,556,551
T-Mobile USA, Inc.
Company Guar. Notes
6.54% due 04/28/2020.................. 737,000 761,874
----------
4,364,231
----------
Chemicals-Diversified -- 0.1%
Eastman Chemical Co.
Senior Notes
1.50% due 05/26/2023.................. EUR 180,000 214,553
Westlake Chemical Corp.
Company Guar. Notes
3.60% due 08/15/2026*................. 176,000 176,499
Westlake Chemical Corp.
Company Guar. Notes
5.00% due 08/15/2046*................. 172,000 172,701
----------
563,753
----------
Principal Value
Security Description Amount** (Note 2)
Chemicals-Plastics -- 0.2%
A. Schulman, Inc.
Company Guar. Notes
6.88% due 06/01/2023*.............. $ 573,000 $ 578,730
----------
Chemicals-Specialty -- 0.3%
Cabot Corp.
Senior Notes
3.40% due 09/15/2026............... 42,000 42,223
Lubrizol Corp.
Company Guar. Notes
6.50% due 10/01/2034............... 176,000 239,260
Unifrax I LLC/Unifrax Holding Co.
Company Guar. Notes
7.50% due 02/15/2019*.............. 760,000 710,600
----------
992,083
----------
Coal -- 0.3%
SunCoke Energy Partners LP/SunCoke
Energy Partners Finance Corp.
Company Guar. Notes
7.38% due 02/01/2020............... 1,131,000 1,057,485
----------
Coatings/Paint -- 0.1%
RPM International, Inc.
Senior Notes
5.25% due 06/01/2045............... 425,000 445,820
----------
Commercial Services-Finance -- 0.0%
Automatic Data Processing, Inc.
Senior Notes
2.25% due 09/15/2020............... 124,000 127,886
----------
Computer Services -- 0.6%
Harland Clarke Holdings Corp.
Senior Sec. Notes
6.88% due 03/01/2020*.............. 590,000 563,450
Harland Clarke Holdings Corp.
Senior Notes
9.25% due 03/01/2021*.............. 680,000 578,000
Hewlett Packard Enterprise Co.
Senior Notes
6.20% due 10/15/2035*.............. 428,000 446,024
Leidos Holdings, Inc.
Company Guar. Notes
4.45% due 12/01/2020............... 650,000 675,805
----------
2,263,279
----------
Computer Software -- 0.1%
Rackspace Hosting, Inc.
Company Guar. Notes
6.50% due 01/15/2024*.............. 520,000 570,700
----------
Computers -- 0.8%
Apple, Inc.
Senior Notes
2.45% due 08/04/2026............... 166,000 166,162
Apple, Inc.
Senior Notes
2.85% due 05/06/2021............... 253,000 266,620
23
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Computers (continued)
Apple, Inc.
Senior Notes
2.85% due 02/23/2023.................. $ 239,000 $ 251,598
Apple, Inc.
Senior Notes
3.85% due 08/04/2046.................. 121,000 123,754
Apple, Inc.
Senior Notes
4.50% due 02/23/2036.................. 98,000 111,905
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Senior Sec. Notes
6.02% due 06/15/2026*................. 1,344,000 1,473,431
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Company Guar. Notes
7.13% due 06/15/2024*................. 49,000 53,893
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Senior Sec. Notes
8.10% due 07/15/2036*................. 266,000 312,694
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Senior Sec. Notes
8.35% due 07/15/2046*................. 178,000 213,129
----------
2,973,186
----------
Computers-Integrated Systems -- 0.2%
Diebold, Inc.
Company Guar. Notes
8.50% due 04/15/2024*................. 897,000 929,516
----------
Computers-Memory Devices -- 0.2%
Western Digital Corp.
Company Guar. Notes
10.50% due 04/01/2024*................ 497,000 576,520
----------
Consumer Products-Misc. -- 0.0%
Kimberly-Clark Corp.
Senior Notes
1.85% due 03/01/2020.................. 97,000 98,515
----------
Containers-Metal/Glass -- 0.3%
Crown Cork & Seal Co., Inc.
Company Guar. Notes
7.38% due 12/15/2026.................. 642,000 718,238
Owens-Brockway Glass Container, Inc.
Company Guar. Notes
5.38% due 01/15/2025*................. 565,000 587,600
----------
1,305,838
----------
Containers-Paper/Plastic -- 0.3%
Amcor Finance USA, Inc.
Company Guar. Notes
3.63% due 04/28/2026*................. 268,000 276,703
Brambles USA, Inc.
Company Guar. Notes
4.13% due 10/23/2025*................. 101,000 107,507
Principal Value
Security Description Amount** (Note 2)
Containers-Paper/Plastic (continued)
Multi-Color Corp.
Company Guar. Notes
6.13% due 12/01/2022*........................ $ 546,000 $573,300
--------
957,510
--------
Data Processing/Management -- 0.1%
Fidelity National Information Services, Inc.
Senior Notes
4.50% due 08/15/2046......................... 110,000 110,025
Fidelity National Information Services, Inc.
Senior Notes
5.00% due 10/15/2025......................... 124,000 141,405
--------
251,430
--------
Diagnostic Equipment -- 0.0%
Danaher Corp.
Senior Notes
4.38% due 09/15/2045......................... 39,000 46,083
--------
Distribution/Wholesale -- 0.0%
WW Grainger, Inc.
Senior Notes
3.75% due 05/15/2046......................... 108,000 111,596
--------
Diversified Banking Institutions -- 2.7%
Bank of America Corp.
Senior Notes
2.50% due 07/27/2020......................... EUR 450,000 550,286
Bank of America Corp.
Senior Notes
2.63% due 10/19/2020......................... 150,000 153,074
Bank of America Corp.
Sub. Notes
3.95% due 04/21/2025......................... 143,000 148,034
Bank of America Corp.
Sub. Notes
4.25% due 10/22/2026......................... 534,000 566,541
Bank of America Corp.
Sub. Notes
7.25% due 10/15/2025......................... 83,000 100,696
Citigroup, Inc.
Sub. Notes
3.88% due 03/26/2025......................... 6,000 6,192
Citigroup, Inc.
Sub. Notes
4.40% due 06/10/2025......................... 518,000 548,454
Citigroup, Inc.
Sub. Notes
4.45% due 09/29/2027......................... 573,000 599,629
Citigroup, Inc.
Sub. Notes
6.00% due 10/31/2033......................... 142,000 166,164
Deutsche Bank AG VRS
Sub. Notes
7.50% due 04/30/2025......................... 600,000 490,500
Goldman Sachs Group, Inc.
Senior Notes
2.13% due 09/30/2024......................... EUR 400,000 487,102
24
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Diversified Banking Institutions (continued)
Goldman Sachs Group, Inc.
Senior Notes
2.35% due 11/15/2021...................... $ 263,000 $262,390
Goldman Sachs Group, Inc.
Senior Notes
2.63% due 08/19/2020...................... EUR 275,000 336,372
Goldman Sachs Group, Inc.
Senior Notes
3.63% due 01/22/2023...................... 129,000 136,294
Goldman Sachs Group, Inc.
Sub. Notes
4.25% due 10/21/2025...................... 189,000 198,903
Goldman Sachs Group, Inc.
Senior Notes
4.75% due 10/21/2045...................... 90,000 101,003
Goldman Sachs Group, Inc.
Sub. Notes
5.15% due 05/22/2045...................... 30,000 32,715
Goldman Sachs Group, Inc.
Senior Notes
6.13% due 02/15/2033...................... 447,000 563,258
Goldman Sachs Group, Inc.
Sub. Notes
6.75% due 10/01/2037...................... 226,000 287,768
JPMorgan Chase & Co.
Senior Notes
2.30% due 08/15/2021...................... 150,000 150,326
JPMorgan Chase & Co.
Senior Notes
2.63% due 04/23/2021...................... EUR 400,000 499,190
JPMorgan Chase & Co.
Senior Notes
2.70% due 05/18/2023...................... 252,000 254,600
JPMorgan Chase & Co.
Senior Notes
2.75% due 06/23/2020...................... 312,000 321,065
JPMorgan Chase & Co.
Sub. Notes
4.13% due 12/15/2026...................... 365,000 389,458
JPMorgan Chase & Co.
Sub. Notes
4.95% due 06/01/2045...................... 21,000 23,523
Morgan Stanley
Senior Notes
1.75% due 03/11/2024...................... EUR 350,000 416,754
Morgan Stanley
Senior Notes
2.13% due 04/25/2018...................... 283,000 285,379
Morgan Stanley
Senior Notes
2.38% due 03/31/2021...................... EUR 350,000 429,372
Morgan Stanley
Senior Notes
2.80% due 06/16/2020...................... 151,000 154,906
Principal Value
Security Description Amount** (Note 2)
Diversified Banking Institutions (continued)
Morgan Stanley
Sub. Notes
4.10% due 05/22/2023...................... $ 548,000 $ 579,379
Morgan Stanley
Sub. Notes
5.00% due 11/24/2025...................... 568,000 633,718
Morgan Stanley
Senior Notes
6.50% due 12/28/2018...................... EUR 300,000 385,646
-----------
10,258,691
-----------
Diversified Financial Services -- 0.1%
USAA Capital Corp.
Senior Notes
2.13% due 06/03/2019*..................... 270,000 275,262
-----------
Diversified Manufacturing Operations -- 0.3%
General Electric Co.
Senior Notes
2.70% due 10/09/2022...................... 307,000 319,899
Ingersoll-Rand Global Holding Co., Ltd.
Company Guar. Notes
5.75% due 06/15/2043...................... 403,000 504,318
Textron, Inc.
Senior Notes
4.00% due 03/15/2026...................... 208,000 218,097
Trinity Industries, Inc.
Company Guar. Notes
4.55% due 10/01/2024...................... 243,000 241,658
-----------
1,283,972
-----------
Electric Products-Misc. -- 0.0%
WESCO Distribution, Inc.
Company Guar. Notes
5.38% due 06/15/2024*..................... 150,000 150,375
-----------
Electric-Distribution -- 0.1%
Entergy Louisiana LLC
1st Mtg. Notes
4.95% due 01/15/2045...................... 481,000 512,117
-----------
Electric-Integrated -- 1.5%
AES Corp.
Senior Notes
5.50% due 03/15/2024...................... 870,000 905,339
Arizona Public Service Co.
Senior Notes
2.20% due 01/15/2020...................... 161,000 164,764
Dominion Resources, Inc.
Junior Sub. Notes
2.96% due 07/01/2019...................... 88,000 90,324
Dominion Resources, Inc.
Senior Notes
5.25% due 08/01/2033...................... 536,000 606,583
Duke Energy Corp.
Senior Notes
3.75% due 09/01/2046...................... 158,000 153,224
25
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Electric-Integrated (continued)
Duke Energy Progress LLC
1st Mtg. Notes
2.80% due 05/15/2022....................... $ 207,000 $ 217,629
Entergy Arkansas, Inc.
1st Mtg. Notes
4.95% due 12/15/2044....................... 255,000 270,647
Exelon Generation Co. LLC
Senior Notes
2.95% due 01/15/2020....................... 219,000 225,720
FirstEnergy Corp.
Senior Notes
7.38% due 11/15/2031....................... 324,000 420,944
Louisville Gas & Electric Co.
1st Mtg. Notes
4.38% due 10/01/2045....................... 29,000 33,239
Massachusetts Electric Co.
Notes
4.00% due 08/15/2046*...................... 456,000 474,202
Mirant Mid Atlantic LLC Pass Through Trust
Pass-Through Certs.
Class B
9.13% due 06/30/2017....................... 126,600 104,445
Mirant Mid Atlantic LLC Pass Through Trust
Pass-Through Certs.
Class C
10.06% due 12/30/2028...................... 1,051,264 804,217
South Carolina Electric & Gas Co.
1st Mtg. Notes
5.10% due 06/01/2065....................... 148,000 173,455
Southern California Edison Co.
1st Mtg. Notes
1.13% due 05/01/2017....................... 446,000 445,936
Talen Energy Supply LLC
Senior Notes
4.63% due 07/15/2019*...................... 750,000 705,000
Trans-Allegheny Interstate Line Co.
Senior Notes
3.85% due 06/01/2025*...................... 105,000 111,948
----------
5,907,616
----------
Electronic Components-Misc. -- 0.0%
Corning, Inc.
Senior Notes
1.50% due 05/08/2018....................... 163,000 162,552
----------
Electronic Components-Semiconductors -- 0.2%
Amkor Technology, Inc.
Senior Notes
6.38% due 10/01/2022....................... 352,000 363,440
Intel Corp.
Senior Notes
1.35% due 12/15/2017....................... 353,000 354,102
----------
717,542
----------
Principal Value
Security Description Amount** (Note 2)
Electronic Measurement Instruments -- 0.1%
FLIR Systems, Inc.
Senior Notes
3.13% due 06/15/2021....................... $ 133,000 $ 137,273
Fortive Corp.
Company Guar. Notes
4.30% due 06/15/2046*...................... 123,000 131,636
----------
268,909
----------
Electronic Parts Distribution -- 0.0%
Avnet, Inc.
Senior Notes
4.63% due 04/15/2026....................... 109,000 112,847
----------
Energy-Alternate Sources -- 0.2%
TerraForm Power Operating LLC
Company Guar. Notes
9.38% due 02/01/2023*...................... 650,000 667,875
----------
Enterprise Software/Service -- 0.3%
Donnelley Financial Solutions, Inc.
Senior Notes
8.25% due 10/15/2024*...................... 286,000 289,575
Oracle Corp.
Senior Notes
1.90% due 09/15/2021....................... 289,000 289,733
Oracle Corp.
Senior Notes
2.65% due 07/15/2026....................... 152,000 152,028
Oracle Corp.
Senior Notes
3.85% due 07/15/2036....................... 227,000 235,707
Oracle Corp.
Senior Notes
3.90% due 05/15/2035....................... 67,000 69,267
----------
1,036,310
----------
Finance-Auto Loans -- 0.7%
Ally Financial, Inc.
Sub. Notes
5.75% due 11/20/2025....................... 1,371,000 1,434,409
Credit Acceptance Corp.
Company Guar. Notes
7.38% due 03/15/2023....................... 1,165,000 1,205,775
----------
2,640,184
----------
Finance-Commercial -- 0.2%
Jefferies Finance LLC/JFIN Co-Issuer Corp.
Senior Notes
6.88% due 04/15/2022*...................... 259,000 240,870
Jefferies Finance LLC/JFIN Co-Issuer Corp.
Senior Notes
7.38% due 04/01/2020*...................... 498,000 485,550
----------
726,420
----------
Finance-Consumer Loans -- 0.7%
Enova International, Inc.
Company Guar. Notes
9.75% due 06/01/2021....................... 1,422,000 1,272,690
26
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Finance-Consumer Loans (continued)
Navient Corp.
Senior Notes
5.63% due 08/01/2033............................... $ 611,000 $ 485,745
OneMain Financial Holdings LLC
Company Guar. Notes
6.75% due 12/15/2019*.............................. 916,000 962,945
----------
2,721,380
----------
Finance-Credit Card -- 0.1%
American Express Credit Corp.
Senior Notes
2.25% due 05/05/2021............................... 296,000 300,540
Discover Financial Services
Senior Notes
3.75% due 03/04/2025............................... 240,000 242,873
----------
543,413
----------
Finance-Investment Banker/Broker -- 0.1%
Lehman Brothers Holdings, Inc.
Escrow Notes
6.75% due 12/28/2017+(3)(6)........................ 280,000 28
Lehman Brothers Holdings, Inc.
Escrow Notes
7.50% due 05/11/2038+(3)(6)........................ 361,000 36
TD Ameritrade Holding Corp.
Senior Notes
2.95% due 04/01/2022............................... 200,000 208,402
----------
208,466
----------
Finance-Leasing Companies -- 0.1%
International Lease Finance Corp.
Senior Notes
5.88% due 08/15/2022............................... 191,000 211,771
----------
Finance-Mortgage Loan/Banker -- 0.2%
Quicken Loans, Inc.
Company Guar. Notes
5.75% due 05/01/2025*.............................. 900,000 893,250
----------
Finance-Other Services -- 0.1%
National Rural Utilities Cooperative Finance Corp.
Senior Notes
0.95% due 04/24/2017............................... 137,000 136,832
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Bonds
2.00% due 01/27/2020............................... 273,000 275,828
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Bonds
2.30% due 11/01/2020............................... 118,000 120,741
----------
533,401
----------
Firearms & Ammunition -- 0.2%
FGI Operating Co. LLC/FGI Finance, Inc.
Sec. Notes
7.88% due 05/01/2020............................... 1,115,000 925,450
----------
Principal Value
Security Description Amount** (Note 2)
Food-Misc./Diversified -- 0.3%
General Mills, Inc.
Senior Notes
2.10% due 11/16/2020................. EUR 275,000 $ 333,042
Kraft Heinz Foods Co.
Company Guar. Notes
2.25% due 05/25/2028................. EUR500,000 609,267
Kraft Heinz Foods Co.
Sec. Notes
4.88% due 02/15/2025*................ 286,000 315,396
----------
1,257,705
----------
Food-Retail -- 0.3%
Albertsons Cos. LLC/Safeway, Inc.
Senior Notes
5.75% due 03/15/2025*................ 350,000 349,125
Albertsons Cos. LLC/Safeway,
Inc./New Albertson's,
Inc./Albertson's LLC
Senior Notes
6.63% due 06/15/2024*................ 416,000 432,640
Kroger Co.
Senior Notes
2.65% due 10/15/2026................. 238,000 236,222
Kroger Co.
Senior Notes
3.88% due 10/15/2046................. 107,000 107,672
----------
1,125,659
----------
Food-Wholesale/Distribution -- 0.2%
C&S Group Enterprises LLC
Senior Sec. Notes
5.38% due 07/15/2022*................ 631,000 621,535
----------
Footwear & Related Apparel -- 0.2%
Wolverine World Wide, Inc.
Company Guar. Notes
5.00% due 09/01/2026*................ 585,000 590,850
----------
Gambling (Non-Hotel) -- 0.4%
Mohegan Tribal Gaming Authority
Company Guar. Notes
7.88% due 10/15/2024*................ 570,000 568,575
Scientific Games International, Inc.
Company Guar. Notes
10.00% due 12/01/2022................ 1,220,000 1,125,450
Waterford Gaming LLC/Waterford
Gaming Financial Corp.
Escrow Notes
8.63% due 09/15/2014*+(3)(6)......... 478,062 5,880
----------
1,699,905
----------
Gas-Distribution -- 0.1%
Dominion Gas Holdings LLC
Senior Notes
4.80% due 11/01/2043................. 179,000 198,062
----------
27
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Hazardous Waste Disposal -- 0.1%
Clean Harbors, Inc.
Company Guar. Notes
5.13% due 06/01/2021.................. $ 543,000 $ 556,575
----------
Home Decoration Products -- 0.1%
Newell Rubbermaid, Inc.
Senior Notes
4.20% due 04/01/2026.................. 113,000 123,069
Newell Rubbermaid, Inc.
Senior Notes
5.38% due 04/01/2036.................. 82,000 96,240
----------
219,309
----------
Home Furnishings -- 0.1%
Tempur Sealy International, Inc.
Company Guar. Notes
5.50% due 06/15/2026*................. 400,000 412,000
----------
Hotels/Motels -- 0.2%
Interval Acquisition Corp.
Company Guar. Notes
5.63% due 04/15/2023.................. 557,000 575,103
----------
Independent Power Producers -- 0.4%
Dynegy, Inc.
Company Guar. Notes
7.38% due 11/01/2022.................. 785,000 775,188
NRG Energy, Inc.
Company Guar. Notes
6.25% due 07/15/2022.................. 692,000 702,380
----------
1,477,568
----------
Industrial Gases -- 0.3%
Air Products & Chemicals, Inc.
Senior Notes
0.38% due 06/01/2021.................. EUR 300,000 341,417
Airgas, Inc.
Company Guar. Notes
3.05% due 08/01/2020.................. 81,000 84,060
Praxair, Inc.
Senior Notes
1.20% due 02/12/2024.................. EUR 320,000 380,702
Praxair, Inc.
Senior Notes
1.50% due 03/11/2020.................. EUR 150,000 177,167
----------
983,346
----------
Insurance-Life/Health -- 0.3%
Aflac, Inc.
Senior Notes
4.00% due 10/15/2046.................. 142,000 143,410
Jackson National Life Global Funding
Sec. Notes
3.05% due 04/29/2026*................. 365,000 370,999
Pacific LifeCorp
Senior Notes
6.00% due 02/10/2020*................. 210,000 232,991
Principal Value
Security Description Amount** (Note 2)
Insurance-Life/Health (continued)
Pricoa Global Funding I
Senior Sec. Notes
1.35% due 08/18/2017*................... $344,000 $ 343,954
Principal Life Global Funding II
Senior Sec. Notes
3.00% due 04/18/2026*................... 93,000 94,519
Unum Group
Senior Notes
5.75% due 08/15/2042.................... 90,000 101,801
----------
1,287,674
----------
Insurance-Multi-line -- 0.3%
Assurant, Inc.
Senior Notes
6.75% due 02/15/2034.................... 591,000 744,345
MetLife, Inc.
Senior Notes
4.60% due 05/13/2046.................... 134,000 145,007
Old Republic International Corp.
Senior Notes
3.88% due 08/26/2026.................... 70,000 69,877
----------
959,229
----------
Insurance-Mutual -- 0.4%
Massachusetts Mutual Life Insurance Co.
Sub. Notes
4.50% due 04/15/2065*................... 172,000 169,114
MassMutual Global Funding II
Senior Sec. Notes
2.10% due 08/02/2018*................... 872,000 885,469
MassMutual Global Funding II
Senior Sec. Notes
2.50% due 10/17/2022*................... 145,000 147,444
New York Life Global Funding
Sec. Notes
2.10% due 01/02/2019*................... 199,000 202,270
----------
1,404,297
----------
Insurance-Reinsurance -- 0.1%
Berkshire Hathaway, Inc.
Senior Notes
1.15% due 08/15/2018.................... 196,000 195,894
----------
Internet Connectivity Services -- 0.3%
Cogent Communications Group, Inc.
Senior Sec. Notes
5.38% due 03/01/2022*................... 564,000 580,920
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
6.38% due 05/15/2025.................... 545,000 577,700
----------
1,158,620
----------
Internet Content-Entertainment -- 0.2%
Netflix, Inc.
Senior Notes
5.88% due 02/15/2025.................... 792,000 855,360
----------
28
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Investment Management/Advisor Services -- 0.3%
Drawbridge Special Opportunities
Fund LP/Drawbridge Special
Opportunities Finance
Senior Notes
5.00% due 08/01/2021*................. $1,106,000 $1,063,004
----------
Machinery-Farming -- 0.3%
John Deere Capital Corp.
Senior Notes
1.13% due 06/12/2017.................. 537,000 537,673
John Deere Capital Corp.
Senior Notes
1.55% due 12/15/2017.................. 545,000 547,912
----------
1,085,585
----------
Marine Services -- 0.2%
Great Lakes Dredge & Dock Corp.
Company Guar. Notes
7.38% due 02/01/2019.................. 699,000 685,020
----------
Medical Labs & Testing Services -- 0.4%
Laboratory Corp. of America Holdings
Senior Notes
3.20% due 02/01/2022.................. 85,000 88,522
Laboratory Corp. of America Holdings
Senior Notes
3.60% due 02/01/2025.................. 274,000 287,821
Laboratory Corp. of America Holdings
Senior Notes
4.70% due 02/01/2045.................. 141,000 153,363
Quest Diagnostics, Inc.
Senior Notes
3.45% due 06/01/2026.................. 155,000 161,510
Roche Holdings, Inc.
Company Guar. Notes
1.35% due 09/29/2017*................. 700,000 702,277
----------
1,393,493
----------
Medical Products -- 0.0%
Baxter International, Inc.
Senior Notes
2.60% due 08/15/2026.................. 153,000 151,233
----------
Medical-Biomedical/Gene -- 0.3%
Amgen, Inc.
Senior Notes
1.25% due 02/25/2022.................. EUR 325,000 383,077
Amgen, Inc.
Senior Notes
2.00% due 02/25/2026.................. EUR 100,000 125,143
Amgen, Inc.
Senior Notes
4.40% due 05/01/2045.................. 101,000 106,093
Amgen, Inc.
Senior Notes
5.50% due 12/07/2026.................. GBP 250,000 430,493
Gilead Sciences, Inc.
Senior Notes
4.00% due 09/01/2036.................. 76,000 77,498
----------
1,122,304
----------
Principal Value
Security Description Amount** (Note 2)
Medical-Drugs -- 0.4%
Baxalta, Inc.
Company Guar. Notes
3.60% due 06/23/2022.......................... $ 214,000 $ 224,826
Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
7.25% due 01/15/2022*......................... 675,000 648,000
Forest Laboratories LLC
Company Guar. Notes
4.88% due 02/15/2021*......................... 346,000 384,221
Johnson & Johnson
Senior Notes
1.65% due 05/20/2035.......................... EUR 180,000 228,737
----------
1,485,784
----------
Medical-HMO -- 0.3%
Opal Acquisition, Inc.
Senior Notes
8.88% due 12/15/2021*......................... 702,000 575,640
UnitedHealth Group, Inc.
Senior Notes
1.40% due 12/15/2017.......................... 281,000 281,816
UnitedHealth Group, Inc.
Senior Notes
2.13% due 03/15/2021.......................... 205,000 208,812
UnitedHealth Group, Inc.
Senior Notes
3.35% due 07/15/2022.......................... 150,000 161,072
----------
1,227,340
----------
Medical-Hospitals -- 1.3%
CHS/Community Health Systems, Inc.
Company Guar. Notes
6.88% due 02/01/2022.......................... 825,000 709,500
HCA, Inc.
Senior Sec. Notes
5.25% due 06/15/2026.......................... 444,000 471,750
HCA, Inc.
Company Guar. Notes
7.50% due 11/15/2095.......................... 1,128,000 1,139,280
IASIS Healthcare LLC/IASIS Capital Corp.
Company Guar.
Notes 8.38% due 05/15/2019.................... 756,000 684,180
RegionalCare Hospital Partners Holdings, Inc.
Senior Sec. Notes
8.25% due 05/01/2023*......................... 1,010,000 1,042,825
Tenet Healthcare Corp.
Senior Sec. Notes
4.75% due 06/01/2020.......................... 354,000 359,310
Tenet Healthcare Corp.
Senior Notes
6.88% due 11/15/2031.......................... 565,000 464,712
----------
4,871,557
----------
29
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Metal Processors & Fabrication -- 0.3%
Novelis Corp.
Company Guar. Notes
5.88% due 09/30/2026*....................... $600,000 $ 614,250
Novelis Corp.
Company Guar. Notes
6.25% due 08/15/2024*....................... 396,000 420,255
----------
1,034,505
----------
Metal-Aluminum -- 0.1%
Kaiser Aluminum Corp.
Company Guar. Notes
5.88% due 05/15/2024........................ 318,000 332,310
----------
Mining -- 0.0%
Renco Metals, Inc.
Escrow Notes
11.50% due 07/01/2003+(3)(6)................ 500,000 15,000
----------
Multimedia -- 0.2%
Time Warner, Inc.
Company Guar. Notes
4.85% due 07/15/2045........................ 127,000 141,968
Viacom, Inc.
Senior Notes
3.45% due 10/04/2026........................ 147,000 146,914
Viacom, Inc.
Senior Notes
5.85% due 09/01/2043........................ 103,000 116,168
Walt Disney Co.
Senior Notes
1.50% due 09/17/2018........................ 212,000 213,656
Walt Disney Co.
Senior Notes
1.65% due 01/08/2019........................ 100,000 101,155
----------
719,861
----------
Networking Products -- 0.2%
Cisco Systems, Inc.
Senior Notes
2.13% due 03/01/2019........................ 322,000 328,299
Cisco Systems, Inc.
Senior Notes
2.20% due 02/28/2021........................ 228,000 233,285
Cisco Systems, Inc.
Senior Notes
2.50% due 09/20/2026........................ 72,000 72,840
----------
634,424
----------
Office Automation & Equipment -- 0.1%
Pitney Bowes, Inc.
Senior Notes
3.38% due 10/01/2021........................ 189,000 188,909
----------
Oil Companies-Exploration & Production -- 2.0%
Anadarko Petroleum Corp.
Senior Notes
6.45% due 09/15/2036........................ 609,000 711,495
Principal Value
Security Description Amount** (Note 2)
Oil Companies-Exploration & Production (continued)
Carrizo Oil & Gas, Inc.
Company Guar. Notes
6.25% due 04/15/2023............................ $600,000 $ 594,000
Denbury Resources, Inc.
Company Guar. Notes
5.50% due 05/01/2022............................ 484,000 347,270
Denbury Resources, Inc.
Sec. Notes
9.00% due 05/15/2021*........................... 825,000 864,187
Hess Corp.
Senior Notes
4.30% due 04/01/2027............................ 138,000 139,074
Hess Corp.
Senior Notes
5.60% due 02/15/2041............................ 148,000 147,521
Hilcorp Energy I LP/Hilcorp Finance Co.
Senior Notes
5.00% due 12/01/2024*........................... 685,000 655,888
Hilcorp Energy I LP/Hilcorp Finance Co.
Senior Notes
5.75% due 10/01/2025*........................... 43,000 42,785
Laredo Petroleum, Inc.
Company Guar. Notes
7.38% due 05/01/2022............................ 787,000 813,561
Newfield Exploration Co.
Senior Notes
5.38% due 01/01/2026............................ 559,000 560,398
Noble Energy, Inc.
Senior Notes
3.90% due 11/15/2024............................ 289,000 294,753
Noble Energy, Inc.
Senior Notes
5.05% due 11/15/2044............................ 122,000 120,449
Occidental Petroleum Corp.
Senior Notes
4.40% due 04/15/2046............................ 152,000 167,793
Rex Energy Corp.
Sec. Notes
1.00% due 10/01/2020............................ 646,815 352,514
Sanchez Energy Corp.
Company Guar. Notes
6.13% due 01/15/2023............................ 791,000 634,778
SM Energy Co.
Senior Notes
5.63% due 06/01/2025............................ 506,000 475,640
SM Energy Co.
Senior Notes
6.50% due 01/01/2023............................ 116,000 117,160
WPX Energy, Inc.
Senior Notes
7.50% due 08/01/2020............................ 750,000 793,125
----------
7,832,391
----------
Oil Companies-Integrated -- 0.2%
Chevron Corp.
Senior Notes
1.37% due 03/02/2018............................ 324,000 324,571
30
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Oil Companies-Integrated (continued)
Chevron Corp.
Senior Notes
1.96% due 03/03/2020.................. $178,000 $ 180,474
Exxon Mobil Corp.
Senior Notes
1.31% due 03/06/2018.................. 199,000 199,602
----------
704,647
----------
Oil Field Machinery & Equipment -- 0.1%
Forum Energy Technologies, Inc.
Company Guar. Notes
6.25% due 10/01/2021.................. 410,000 388,475
----------
Oil Refining & Marketing -- 0.4%
Calumet Specialty Products Partner LP/
Calumet Finance Corp.
Company Guar. Notes
6.50% due 04/15/2021.................. 646,000 528,105
Cheniere Corpus Christi Holdings LLC
Senior Sec. Notes
7.00% due 06/30/2024*................. 220,000 237,600
PBF Holding Co LLC/PBF Finance Corp.
Senior Sec. Notes
7.00% due 11/15/2023*................. 700,000 659,750
Valero Energy Corp.
Senior Notes
3.40% due 09/15/2026.................. 287,000 285,088
----------
1,710,543
----------
Oil-Field Services -- 0.3%
Bristow Group, Inc.
Company Guar. Notes
6.25% due 10/15/2022.................. 825,000 604,313
SESI LLC
Company Guar. Notes
7.13% due 12/15/2021.................. 548,000 535,670
----------
1,139,983
----------
Paper & Related Products -- 0.7%
Clearwater Paper Corp.
Company Guar. Notes
4.50% due 02/01/2023.................. 219,000 219,274
Domtar Corp.
Company Guar. Notes
6.75% due 02/15/2044.................. 222,000 248,697
Georgia-Pacific LLC
Senior Notes
3.60% due 03/01/2025*................. 492,000 524,080
Georgia-Pacific LLC
Senior Notes
3.73% due 07/15/2023*................. 672,000 719,413
Georgia-Pacific LLC
Company Guar. Notes
5.40% due 11/01/2020*................. 275,000 310,975
International Paper Co.
Senior Notes
4.40% due 08/15/2047.................. 101,000 102,138
Principal Value
Security Description Amount** (Note 2)
Paper & Related Products (continued)
PH Glatfelter Co.
Company Guar. Notes
5.38% due 10/15/2020........................... $620,000 $ 626,200
----------
2,750,777
----------
Pharmacy Services -- 0.1%
Express Scripts Holding Co.
Company Guar. Notes
3.00% due 07/15/2023........................... 107,000 108,679
Express Scripts Holding Co.
Company Guar. Notes
4.50% due 02/25/2026........................... 191,000 209,496
Express Scripts Holding Co.
Company Guar. Notes
4.80% due 07/15/2046........................... 239,000 248,266
----------
566,441
----------
Pipelines -- 2.4%
Antero Midstream Partners LP/Antero
Midstream Finance Corp.
Company Guar. Notes
5.38% due 09/15/2024*.......................... 507,000 513,338
Colorado Interstate Gas Co. LLC/
Colorado Interstate Issuing Corp.
Company Guar. Notes
4.15% due 08/15/2026*.......................... 157,000 155,653
Columbia Pipeline Group, Inc.
Company Guar. Notes
2.45% due 06/01/2018........................... 59,000 59,351
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020........................... 700,000 768,250
Energy Transfer Partners LP
Senior Notes
4.90% due 03/15/2035........................... 115,000 106,152
Energy Transfer Partners LP
Senior Notes
6.05% due 06/01/2041........................... 29,000 29,367
Energy Transfer Partners LP
Senior Notes
6.63% due 10/15/2036........................... 366,000 398,491
EnLink Midstream Partners LP
Senior Notes
4.40% due 04/01/2024........................... 84,000 82,026
EnLink Midstream Partners LP
Senior Notes
4.85% due 07/15/2026........................... 189,000 190,186
Enterprise Products Operating LLC
Company Guar. Notes
3.95% due 02/15/2027........................... 120,000 125,744
Enterprise Products Operating LLC
Company Guar. Notes
4.85% due 03/15/2044........................... 77,000 80,022
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
5.63% due 06/15/2024........................... 465,000 455,700
31
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Pipelines (continued)
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
6.00% due 05/15/2023........................... $ 532,000 $ 528,010
Holly Energy Partners LP/Holly Energy
Finance Corp.
Company Guar. Notes
6.00% due 08/01/2024*.......................... 672,000 695,520
Kinder Morgan Energy Partners LP
Company Guar. Notes
3.45% due 02/15/2023........................... 224,000 223,296
Kinder Morgan Energy Partners LP
Company Guar. Notes
4.70% due 11/01/2042........................... 159,000 146,673
Kinder Morgan Energy Partners LP
Company Guar. Notes
5.63% due 09/01/2041........................... 74,000 73,403
Plains All American Pipeline LP/PAA
Finance Corp.
Senior Notes
3.60% due 11/01/2024........................... 90,000 87,206
Plains All American Pipeline LP/PAA
Finance Corp.
Senior Notes
3.85% due 10/15/2023........................... 108,000 107,427
Rose Rock Midstream LP/Rose Rock
Finance Corp.
Company Guar. Notes
5.63% due 07/15/2022........................... 656,000 603,520
Sabine Pass Liquefaction LLC
Senior Sec. Notes
5.63% due 04/15/2023........................... 575,000 613,812
Sabine Pass Liquefaction LLC
Senior Sec. Notes
5.88% due 06/30/2026*.......................... 180,000 195,638
Sabine Pass Liquefaction LLC
Senior Sec. Notes
6.25% due 03/15/2022........................... 511,000 558,267
Summit Midstream Holdings
LLC/Summit Midstream Finance Corp.
Company Guar. Notes
5.50% due 08/15/2022........................... 592,000 563,880
Tallgrass Energy Partners LP/Tallgrass
Energy Finance Corp.
Company Guar. Notes
5.50% due 09/15/2024*.......................... 580,000 584,350
Tesoro Logistics LP/Tesoro Logistics
Finance Corp.
Company Guar. Notes
6.13% due 10/15/2021........................... 1,116,000 1,166,220
Western Gas Partners LP
Senior Notes
4.65% due 07/01/2026........................... 202,000 209,049
Williams Partners LP
Senior Notes
3.90% due 01/15/2025........................... 72,000 71,850
----------
9,392,401
----------
Principal Value
Security Description Amount** (Note 2)
Power Converter/Supply Equipment -- 0.1%
Hubbell, Inc.
Senior Notes
3.35% due 03/01/2026....................... $183,000 $192,033
--------
Printing-Commercial -- 0.2%
Quad/Graphics, Inc.
Company Guar. Notes
7.00% due 05/01/2022....................... 642,000 616,320
RR Donnelley & Sons Co.
Senior Notes
7.00% due 02/15/2022....................... 43,000 44,613
--------
660,933
--------
Publishing-Newspapers -- 0.1%
Lee Enterprises, Inc.
Senior Sec. Notes
9.50% due 03/15/2022*...................... 221,000 228,183
--------
Publishing-Periodicals -- 0.2%
Emerald Expositions Holdings, Inc.
Senior Notes
9.00% due 06/15/2021*...................... 887,000 921,371
--------
Radio -- 0.2%
Sirius XM Radio, Inc.
Company Guar. Notes
5.38% due 07/15/2026*...................... 565,000 580,538
--------
Real Estate Investment Trusts -- 0.7%
American Tower Corp.
Senior Notes
3.13% due 01/15/2027....................... 221,000 219,973
American Tower Corp.
Senior Notes
3.38% due 10/15/2026....................... 156,000 158,124
AvalonBay Communities, Inc.
Senior Notes
3.90% due 10/15/2046....................... 77,000 76,096
Columbia Property Trust Operating
Partnership LP
Company Guar. Notes
3.65% due 08/15/2026....................... 73,000 73,430
CTR Partnership LP/CareTrust Capital Corp.
Company Guar. Notes
5.88% due 06/01/2021....................... 781,000 808,335
CubeSmart LP Company
Guar. Notes
3.13% due 09/01/2026....................... 144,000 143,364
DuPont Fabros Technology LP
Company Guar. Notes
5.63% due 06/15/2023....................... 442,000 465,205
ESH Hospitality, Inc.
Company Guar. Notes
5.25% due 05/01/2025*...................... 570,000 569,287
Federal Realty Investment Trust
Senior Notes
3.63% due 08/01/2046....................... 30,000 29,361
Kimco Realty Corp.
Senior Notes
2.80% due 10/01/2026....................... 76,000 75,346
32
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Real Estate Investment Trusts (continued)
Liberty Property LP
Senior Notes
3.25% due 10/01/2026...................... $ 97,000 $ 97,742
----------
2,716,263
----------
Real Estate Management/Services -- 0.2%
Kennedy-Wilson, Inc.
Company Guar. Notes
5.88% due 04/01/2024...................... 845,000 851,338
----------
Real Estate Operations & Development -- 0.3%
Greystar Real Estate Partners LLC
Senior Sec. Notes
8.25% due 12/01/2022*..................... 941,000 997,460
----------
Rental Auto/Equipment -- 0.4%
Avis Budget Car Rental LLC/Avis
Budget Finance, Inc.
Company Guar. Notes
5.13% due 06/01/2022*..................... 138,000 138,431
Avis Budget Car Rental LLC/Avis
Budget Finance, Inc.
Company Guar. Notes
5.25% due 03/15/2025*..................... 349,000 335,040
Herc Rentals, Inc.
Sec. Notes
7.50% due 06/01/2022*..................... 556,000 575,460
Hertz Corp.
Company Guar. Notes
5.50% due 10/15/2024*..................... 593,000 590,776
----------
1,639,707
----------
Retail-Appliances -- 0.1%
Conn's, Inc.
Company Guar. Notes
7.25% due 07/15/2022...................... 720,000 561,600
----------
Retail-Building Products -- 0.0%
Home Depot, Inc.
Senior Notes
2.00% due 04/01/2021...................... 17,000 17,284
Home Depot, Inc.
Senior Notes
3.50% due 09/15/2056...................... 104,000 101,633
----------
118,917
----------
Retail-Discount -- 0.2%
Costco Wholesale Corp.
Senior Notes
2.25% due 02/15/2022...................... 344,000 353,960
Dollar General Corp.
Senior Notes
3.25% due 04/15/2023...................... 204,000 210,613
Dollar General Corp.
Senior Notes
4.15% due 11/01/2025...................... 102,000 111,009
----------
675,582
----------
Principal Value
Security Description Amount** (Note 2)
Retail-Drug Store -- 0.2%
CVS Health Corp.
Senior Notes
2.88% due 06/01/2026................ $ 236,000 $ 239,497
CVS Pass-Through Trust
Pass-Through Certs.
4.70% due 01/10/2036*............... 186,182 206,317
CVS Pass-Through Trust
Pass-Through Certs.
5.77% due 01/10/2033*............... 150,831 175,380
CVS Pass-Through Trust
Pass-Through Certs.
5.93% due 01/10/2034*............... 240,504 284,387
----------
905,581
----------
Retail-Restaurants -- 0.5%
Brinker International, Inc.
Senior Notes
5.00% due 10/01/2024*............... 575,000 582,971
Landry's, Inc.
Company Guar. Notes
9.38% due 05/01/2020*............... 563,000 590,503
McDonald's Corp.
Senior Notes
4.70% due 12/09/2035................ 33,000 37,374
PF Chang's China Bistro, Inc.
Company Guar. Notes
10.25% due 06/30/2020*.............. 609,000 573,982
----------
1,784,830
----------
Rubber/Plastic Products -- 0.1%
Gates Global LLC/Gates Global Co.
Company Guar. Notes
6.00% due 07/15/2022*............... 375,000 356,250
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007+(3)(6)(7)(14). 100,000 0
----------
356,250
----------
Satellite Telecom -- 0.2%
Hughes Satellite Systems Corp.
Company Guar. Notes
7.63% due 06/15/2021................ 806,000 859,398
----------
Savings & Loans/Thrifts -- 0.6%
First Niagara Financial Group, Inc.
Senior Notes
6.75% due 03/19/2020................ 1,145,000 1,321,722
First Niagara Financial Group, Inc.
Sub. Notes
7.25% due 12/15/2021................ 714,000 874,817
----------
2,196,539
----------
Steel Pipe & Tube -- 0.1%
Valmont Industries, Inc.
Company Guar. Notes
5.25% due 10/01/2054................ 440,000 412,147
----------
33
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Steel-Producers -- 0.4%
AK Steel Corp.
Senior Sec. Notes
7.50% due 07/15/2023............. $ 650,000 $ 692,250
Steel Dynamics, Inc.
Company Guar. Notes
5.13% due 10/01/2021............. 444,000 461,205
United States Steel Corp.
Senior Sec. Notes
8.38% due 07/01/2021*............ 434,000 474,687
----------
1,628,142
----------
Telecom Services -- 0.1%
Embarq Corp.
Senior Notes
8.00% due 06/01/2036............. 550,000 556,589
----------
Telecommunication Equipment -- 0.2%
Plantronics, Inc.
Company Guar. Notes
5.50% due 05/31/2023*............ 562,000 578,860
----------
Telephone-Integrated -- 1.6%
AT&T, Inc.
Senior Notes
1.45% due 06/01/2022............. EUR 225,000 268,402
AT&T, Inc.
Senior Notes
3.00% due 06/30/2022............. 450,000 462,649
AT&T, Inc.
Senior Notes
4.35% due 06/15/2045............. 300,000 295,516
AT&T, Inc.
Senior Notes
4.50% due 05/15/2035............. 368,000 386,654
AT&T, Inc.
Senior Notes
4.75% due 05/15/2046............. 234,000 244,870
AT&T, Inc.
Senior Notes
5.50% due 03/15/2027............. GBP 250,000 424,852
AT&T, Inc.
Senior Notes
5.80% due 02/15/2019............. 129,000 141,498
CenturyLink, Inc.
Senior Notes
5.63% due 04/01/2025............. 156,000 149,370
CenturyLink, Inc.
Senior Notes
6.88% due 01/15/2028............. 311,000 299,726
CenturyLink, Inc.
Senior Notes
7.50% due 04/01/2024............. 465,000 496,387
Cincinnati Bell, Inc.
Company Guar. Notes
7.00% due 07/15/2024*............ 580,000 594,500
Frontier Communications Corp.
Senior Notes
11.00% due 09/15/2025............ 1,250,000 1,304,687
Principal Value
Security Description Amount** (Note 2)
Telephone-Integrated (continued)
Verizon Communications, Inc.
Senior Notes
3.00% due 11/01/2021................. $ 405,000 $ 423,773
Verizon Communications, Inc.
Senior Notes
4.40% due 11/01/2034................. 148,000 156,604
Verizon Communications, Inc.
Senior Notes
4.67% due 03/15/2055................. 400,000 420,772
Verizon Communications, Inc.
Senior Notes
4.86% due 08/21/2046................. 232,000 259,855
------------
6,330,115
------------
Transport-Equipment & Leasing -- 0.0%
GATX Corp.
Senior Notes
3.25% due 09/15/2026................. 95,000 94,443
------------
Transport-Rail -- 0.0%
Burlington Northern Santa Fe LLC
Senior Notes
3.90% due 08/01/2046................. 102,000 109,038
------------
Trucking/Leasing -- 0.0%
Penske Truck Leasing Co. LP/PTL
Finance Corp.
Senior Notes
3.38% due 02/01/2022*................ 125,000 129,990
------------
Wire & Cable Products -- 0.3%
Belden, Inc.*
Company Guar. Notes
5.25% due 07/15/2024................. 575,000 583,625
General Cable Corp.
Company Guar. Notes
5.75% due 10/01/2022................. 490,000 465,500
------------
1,049,125
------------
Total U.S. Corporate Bonds & Notes
(cost $153,102,130)................... 157,320,545
------------
FOREIGN CORPORATE BONDS & NOTES -- 15.6%
Aerospace/Defense -- 0.1%
BAE Systems PLC
Senior Notes
4.13% due 06/08/2022................. GBP 150,000 222,971
------------
Agricultural Chemicals -- 0.1%
Consolidated Energy Finance SA
Company Guar. Notes
6.75% due 10/15/2019*................ 415,000 409,812
------------
Airport Development/Maintenance -- 0.2%
Heathrow Funding, Ltd.
Senior Sec. Notes
1.88% due 05/23/2024................. EUR 600,000 732,851
Heathrow Funding, Ltd.
Senior Sec. Notes
6.75% due 12/03/2028................. GBP 100,000 188,135
------------
920,986
------------
34
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Auto-Cars/Light Trucks -- 0.5%
Daimler AG
Senior Notes
2.75% due 12/04/2020........................ GBP 235,000 $ 328,095
FCE Bank PLC
Senior Notes
1.53% due 11/09/2020........................ EUR 300,000 352,103
FCE Bank PLC
Senior Notes
1.62% due 05/11/2023........................ EUR 300,000 354,943
Kia Motors Corp.
Senior Notes
3.25% due 04/21/2026*....................... 200,000 210,316
RCI Banque SA
Senior Notes
2.25% due 03/29/2021........................ EUR 350,000 427,139
Volkswagen International Finance NV
Company Guar. Notes
2.38% due 03/22/2017*....................... 107,000 107,427
----------
1,780,023
----------
Auto/Truck Parts & Equipment-Original -- 0.1%
Tupy Overseas SA
Company Guar. Notes
6.63% due 07/17/2024........................ 290,000 292,537
----------
Banks-Commercial -- 2.0%
Australia & New Zealand Banking Group, Ltd.
Senior Notes
1.60% due 07/15/2019........................ 253,000 252,738
Banco de Credito del Peru/Panama
Senior Notes
5.38% due 09/16/2020........................ 200,000 220,500
Bank of China, Ltd.
Sub. Notes
5.00% due 11/13/2024........................ 200,000 216,418
BPCE SA
Senior Notes
2.13% due 03/17/2021........................ EUR 300,000 367,293
BPCE SA
Senior Notes
2.88% due 01/16/2024........................ EUR 300,000 396,999
Cooperatieve Rabobank UA
Company Guar. Notes
3.75% due 07/21/2026........................ 250,000 250,410
Cooperatieve Rabobank UA
Senior Notes
4.55% due 08/30/2029........................ GBP 110,000 182,645
Cooperatieve Rabobank UA
Senior Notes
5.25% due 05/23/2041........................ GBP 100,000 191,429
Credit Suisse
Senior Notes
3.00% due 10/29/2021........................ 254,000 261,309
Danske Bank A/S FRS
Sub. Notes
3.88% due 10/04/2023........................ EUR 300,000 359,414
DBS Group Holdings, Ltd.
Senior Notes
2.25% due 07/16/2019*....................... 491,000 499,114
Principal Value
Security Description Amount** (Note 2)
Banks-Commercial (continued)
HBOS PLC
Sub. Notes
5.37% due 06/30/2021......... EUR 600,000 $ 793,415
ICICI Bank, Ltd.
Senior Notes
5.75% due 11/16/2020......... 200,000 224,744
Intesa Sanpaolo SpA
Sub. Notes
5.02% due 06/26/2024*........ 254,000 231,792
Mizuho Bank, Ltd.
Company Guar. Notes
2.15% due 10/20/2018*........ 15,000 15,128
Mizuho Bank, Ltd.
Company Guar. Notes
2.45% due 04/16/2019*........ 275,000 279,466
National Bank of Canada
Bank Guar. Notes
2.10% due 12/14/2018......... 269,000 272,419
Royal Bank of Canada
Sub. Notes
4.65% due 01/27/2026......... 222,000 241,970
Santander Issuances SAU
Company Guar. Notes
5.18% due 11/19/2025......... 200,000 203,770
Shinhan Bank
Sub. Bonds
3.88% due 03/24/2026*........ 200,000 211,521
Standard Chartered Bank
Sub. Notes
5.88% due 09/26/2017......... EUR 150,000 177,704
Svenska Handelsbanken AB FRS
Sub. Notes
2.66% due 01/15/2024......... EUR 500,000 586,564
Toronto-Dominion Bank
Senior Notes
1.80% due 07/13/2021......... 289,000 287,918
Toronto-Dominion Bank VRS
Sub. Notes
3.63% due 09/15/2031......... 325,000 325,896
Westpac Banking Corp.
Senior Notes
0.88% due 02/16/2021......... EUR 600,000 698,273
----------
7,748,849
----------
Banks-Money Center -- 0.1%
ABN AMRO Bank NV
Senior Notes
2.50% due 11/29/2023......... EUR 200,000 259,828
ABN AMRO Bank NV
Senior Notes
4.13% due 03/28/2022......... EUR 100,000 136,654
Bank of Scotland PLC
Sub. Notes
6.38% due 08/16/2019......... GBP 150,000 217,999
----------
614,481
----------
Beverages-Non-alcoholic -- 0.1%
Coca-Cola Femsa SAB de CV
Company Guar. Notes
2.38% due 11/26/2018......... 442,000 449,610
----------
35
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Beverages-Wine/Spirits -- 0.2%
Bacardi, Ltd.
Company Guar. Notes
2.75% due 07/15/2026*................ $ 102,000 $ 101,346
Diageo Capital PLC
Company Guar. Notes
5.75% due 10/23/2017................. 346,000 362,120
Pernod Ricard SA
Senior Notes
3.25% due 06/08/2026*................ 196,000 199,093
----------
662,559
----------
Brewery -- 0.2%
Anheuser-Busch InBev SA
Company Guar. Notes
0.88% due 03/17/2022................. EUR 200,000 232,794
Anheuser-Busch InBev SA/NV
Company Guar. Notes
2.75% due 03/17/2036................. EUR 360,000 486,631
----------
719,425
----------
Building Products-Cement -- 0.1%
St Marys Cement, Inc.
Company Guar. Notes
5.75% due 01/28/2027*................ 200,000 197,250
----------
Building Societies -- 0.1%
Nationwide Building Society
Sub. Notes
4.00% due 09/14/2026*................ 265,000 263,791
----------
Building-Residential/Commercial -- 0.2%
Mattamy Group Corp.
Company Guar. Notes
6.50% due 11/15/2020*................ 925,000 922,109
----------
Cable/Satellite TV -- 0.8%
Altice Financing SA
Senior Sec. Notes
7.50% due 05/15/2026*................ 1,340,000 1,395,275
Altice Luxembourg SA
Company Guar. Notes
7.75% due 05/15/2022*................ 345,000 368,288
Numericable-SFR SA
Senior Sec. Notes
7.38% due 05/01/2026*................ 1,354,000 1,384,045
----------
3,147,608
----------
Cellular Telecom -- 0.1%
Empresa Nacional de
Telecomunicaciones SA
Senior Notes
4.88% due 10/30/2024................. 200,000 205,443
VimpelCom Holdings BV
Company Guar. Notes
5.95% due 02/13/2023................. 200,000 207,290
----------
412,733
----------
Chemicals-Diversified -- 0.2%
Israel Chemicals, Ltd.
Senior Notes
4.50% due 12/02/2024*................ 200,000 210,750
Principal Value
Security Description Amount** (Note 2)
Chemicals-Diversified (continued)
NOVA Chemicals Corp.
Senior Notes
5.00% due 05/01/2025*................. $ 420,000 $425,250
--------
636,000
--------
Chemicals-Plastics -- 0.1%
Mexichem SAB de CV
Company Guar. Notes
5.88% due 09/17/2044*................. 440,000 420,750
--------
Consumer Products-Misc. -- 0.1%
Kimberly-Clark de Mexico SAB de CV
Senior Notes
3.25% due 03/12/2025*................. 213,000 211,343
--------
Cruise Lines -- 0.2%
Royal Caribbean Cruises, Ltd.
Senior Notes
5.25% due 11/15/2022.................. 281,000 305,587
Royal Caribbean Cruises, Ltd.
Senior Notes
7.50% due 10/15/2027.................. 571,000 685,914
--------
991,501
--------
Diversified Banking Institutions -- 1.4%
BNP Paribas SA
Senior Notes
2.38% due 11/20/2019.................. GBP 200,000 270,795
BNP Paribas SA
Senior Notes
2.88% due 09/26/2023.................. EUR 400,000 527,904
BNP Paribas SA
Sub. Notes
4.38% due 05/12/2026*................. 209,000 216,035
Credit Agricole SA
Senior Notes
3.13% due 02/05/2026.................. EUR 200,000 277,963
Credit Agricole SA
Sub. Notes
3.90% due 04/19/2021.................. EUR 500,000 647,965
Credit Agricole SA
Sub. Notes
4.38% due 03/17/2025*................. 239,000 243,987
Credit Agricole SA
Senior Notes
5.50% due 12/17/2021.................. GBP 250,000 396,208
HSBC Holdings PLC
Senior Notes
2.65% due 01/05/2022.................. 228,000 227,224
Lloyds Banking Group PLC
Sub. Notes
4.58% due 12/10/2025*................. 336,000 342,844
Mitsubishi UFJ Financial Group, Inc.
Senior Notes
2.95% due 03/01/2021.................. 314,000 323,303
Mizuho Financial Group, Inc.
Senior Notes
2.27% due 09/13/2021.................. 208,000 207,437
36
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Diversified Banking Institutions (continued)
Royal Bank of Scotland Group PLC
Senior Notes
3.88% due 09/12/2023...................... $ 201,000 $ 197,783
Royal Bank of Scotland PLC FRS
Sub. Notes
10.50% due 03/16/2022..................... EUR 950,000 1,113,604
Societe Generale SA
Sub. Notes
6.13% due 08/20/2018...................... EUR 250,000 311,864
----------
5,304,916
----------
Diversified Financial Services -- 0.1%
GE Capital International Funding Co. ULC
Company Guar. Notes
4.42% due 11/15/2035...................... 513,000 575,773
----------
Diversified Manufacturing Operations -- 0.1%
Ingersoll-Rand Luxembourg Finance SA
Company Guar. Notes
4.65% due 11/01/2044...................... 137,000 149,478
Siemens Financieringsmaatschappij NV
Company Guar. Notes
2.35% due 10/15/2026*..................... 257,000 253,814
----------
403,292
----------
Diversified Minerals -- 0.3%
FMG Resources August 2006 Pty, Ltd.
Senior Sec. Notes
9.75% due 03/01/2022*..................... 977,000 1,133,320
----------
E-Commerce/Products -- 0.1%
Alibaba Group Holding, Ltd.
Senior Notes
3.60% due 11/28/2024...................... 280,000 293,239
----------
Electric-Distribution -- 0.1%
State Grid Overseas Investment 2014, Ltd.
Company Guar. Notes
4.13% due 05/07/2024*..................... 200,000 220,779
----------
Electric-Generation -- 0.4%
Electricite de France SA
Senior Notes
2.35% due 10/13/2020*..................... 697,000 710,796
Electricite de France SA
Senior Notes
3.63% due 10/13/2025*..................... 128,000 134,591
Electricite de France SA
Senior Notes
4.95% due 10/13/2045*..................... 294,000 318,168
Electricite de France SA
Senior Notes
6.00% due 01/22/2114*..................... 167,000 180,843
Electricite de France SA
Senior Notes
6.25% due 05/30/2028...................... GBP 150,000 273,915
----------
1,618,313
----------
Principal Value
Security Description Amount** (Note 2)
Electric-Integrated -- 0.6%
Enel Finance International NV
Company Guar. Notes
5.00% due 09/14/2022.............. EUR 400,000 $ 575,670
Enel Finance International NV
Company Guar. Notes
5.63% due 08/14/2024.............. GBP 100,000 163,939
GDF Suez
Senior Notes
2.38% due 05/19/2026.............. EUR 700,000 927,751
Iberdrola International BV
Company Guar. Notes
2.50% due 10/24/2022.............. EUR 300,000 382,834
Iberdrola International BV
Company Guar. Notes
3.00% due 01/31/2022.............. EUR 300,000 387,174
----------
2,437,368
----------
Electronic Components-Semiconductors -- 0.1%
Sensata Technologies BV
Senior Unsecured Notes
5.00% due 10/01/2025.............. 57,000 58,282
Sensata Technologies UK Financing
Co. PLC
Company Guar. Notes
6.25% due 02/15/2026*............. 380,000 411,350
----------
469,632
----------
Finance-Leasing Companies -- 0.1%
Fly Leasing, Ltd.
Senior Notes
6.38% due 10/15/2021.............. 585,000 593,775
----------
Food-Meat Products -- 0.2%
BRF SA
Senior Notes
7.75% due 05/22/2018*(6).......... BRL 1,000,000 285,350
Marfrig Holdings Europe BV
Company Guar. Notes
8.00% due 06/08/2023*............. 200,000 204,900
Minerva Luxembourg SA
Company Guar. Notes
6.50% due 09/20/2026*............. 200,000 196,500
----------
686,750
----------
Food-Misc./Diversified -- 0.1%
BRF GmbH
Company Guar. Notes
4.35% due 09/29/2026*............. 200,000 195,800
----------
Food-Retail -- 0.2%
Casino Guichard Perrachon SA
Senior Notes
4.41% due 08/06/2019.............. EUR 300,000 371,885
Casino Guichard-Perrachon SA
Senior Notes
5.98% due 05/26/2021.............. EUR 300,000 397,800
----------
769,685
----------
Gas-Distribution -- 0.0%
Gas Natural Capital Markets SA
Company Guar. Notes
5.13% due 11/02/2021.............. EUR 100,000 140,209
----------
37
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Gas-Transportation -- 0.1%
Transportadora de Gas del Peru SA
Senior Notes
4.25% due 04/30/2028......................... $ 200,000 $207,820
--------
Gold Mining -- 0.1%
Gold Fields Orogen Holdings BVI, Ltd.
Guar. Notes
4.88% due 10/07/2020......................... 200,000 202,460
Goldcorp, Inc.
Senior Notes
5.45% due 06/09/2044......................... 161,000 173,602
--------
376,062
--------
Insurance-Multi-line -- 0.2%
Willow No 2 Ireland PLC for Zurich Insurance
Co., Ltd.
Senior Sec. Notes
3.38% due 06/27/2022......................... EUR 175,000 231,120
XLIT, Ltd.
Company Guar. Notes
4.45% due 03/31/2025......................... 137,000 139,065
XLIT, Ltd.
Company Guar. Notes
5.50% due 03/31/2045......................... 312,000 305,230
--------
675,415
--------
Investment Management/Advisor Services -- 0.1%
China Cinda Finance 2015 I, Ltd.
Company Guar. Notes
4.25% due 04/23/2025*........................ 380,000 394,322
--------
Machinery-General Industrial -- 0.1%
ATS Automation Tooling Systems, Inc.
Senior Notes
6.50% due 06/15/2023*........................ 569,000 583,225
--------
Medical-Drugs -- 0.1%
Teva Pharmaceutical Finance
Netherlands III BV
Company Guar. Notes
2.80% due 07/21/2023......................... 198,000 198,508
Teva Pharmaceutical Finance
Netherlands III BV
Company Guar. Notes
3.15% due 10/01/2026......................... 140,000 140,648
Teva Pharmaceutical Finance
Netherlands III BV
Company Guar. Notes
4.10% due 10/01/2046......................... 253,000 251,800
--------
590,956
--------
Medical-Generic Drugs -- 0.2%
Actavis Funding SCS
Company Guar. Notes
3.00% due 03/12/2020......................... 273,000 281,876
Perrigo Co. PLC
Senior Notes
4.00% due 11/15/2023......................... 502,000 516,150
--------
798,026
--------
Principal Value
Security Description Amount** (Note 2)
Metal Processors & Fabrication -- 0.1%
Elementia SAB de CV
Company Guar. Notes
5.50% due 01/15/2025.................. $ 200,000 $ 204,000
----------
Metal-Aluminum -- 0.1%
Alcoa Nederland Holding BV
Company Guar. Notes
7.00% due 09/30/2026*................. 200,000 206,750
----------
Metal-Copper -- 0.2%
First Quantum Minerals, Ltd.
Company Guar. Notes
7.25% due 05/15/2022*................. 937,000 829,245
----------
Metal-Diversified -- 0.3%
Glencore Canada Financial Corp.
Company Guar. Notes
7.38% due 05/27/2020.................. GBP 200,000 301,787
Glencore Finance Europe SA
Company Guar. Notes
2.75% due 04/01/2021.................. EUR 250,000 294,177
Glencore Finance Europe SA
Company Guar. Notes
6.00% due 04/03/2022.................. GBP 300,000 440,172
----------
1,036,136
----------
Metal-Iron -- 0.1%
Metalloinvest Finance, Ltd.
Company Guar. Notes
5.63% due 04/17/2020.................. 200,000 209,840
NLMK Group
Senior Notes
4.50% due 06/15/2023.................. 200,000 201,521
----------
411,361
----------
Oil & Gas Drilling -- 0.1%
Pacific Drilling SA
Senior Sec. Notes
5.38% due 06/01/2020*................. 1,050,000 290,063
----------
Oil Companies-Exploration & Production -- 0.5%
Anadarko Finance Co.
Company Guar. Notes
7.50% due 05/01/2031.................. 117,000 144,845
Empresa Nacional del Petroleo
Senior Notes
3.75% due 08/05/2026*................. 200,000 202,500
MEG Energy Corp.
Company Guar. Notes
6.38% due 01/30/2023*................. 994,000 786,502
MEG Energy Corp.
Company Guar. Notes
6.50% due 03/15/2021*................. 350,000 285,688
Novatek OAO via Novatek Finance, Ltd.
Senior Notes
6.60% due 02/03/2021.................. 200,000 219,886
Pertamina Persero PT
Senior Notes
4.88% due 05/03/2022*................. 300,000 323,294
38
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Oil Companies-Exploration & Production (continued)
Tengizchevroil Finance Co., Inc.
Senior Sec. Notes
4.00% due 08/15/2026*.............. $ 200,000 $ 198,000
----------
2,160,715
----------
Oil Companies-Integrated -- 1.1%
BP Capital Markets PLC
Company Guar. Notes
1.38% due 11/06/2017............... 302,000 302,028
BP Capital Markets PLC
Company Guar. Notes
1.68% due 05/03/2019............... 197,000 197,768
BP Capital Markets PLC
Company Guar. Notes
2.97% due 02/27/2026............... EUR 450,000 604,475
BP Capital Markets PLC
Company Guar. Notes
3.02% due 01/16/2027............... 122,000 123,923
BP Capital Markets PLC
Company Guar. Notes
3.12% due 05/04/2026............... 158,000 161,461
BP Capital Markets PLC
Company Guar. Notes
3.25% due 05/06/2022............... 203,000 213,804
BP Capital Markets PLC
Company Guar. Notes
4.33% due 12/10/2018............... GBP 100,000 139,629
Ecopetrol SA
Senior Notes
4.13% due 01/16/2025............... 200,000 194,190
Lukoil International Finance BV
Company Guar. Notes
4.56% due 04/24/2023............... 200,000 206,876
Petrobras Global Finance BV
Company Guar. Notes
8.75% due 05/23/2026............... 155,000 171,275
Petroleos Mexicanos
Company Guar. Notes
5.50% due 06/27/2044............... 157,000 136,103
Petroleos Mexicanos
Company Guar. Notes
6.75% due 09/21/2047*.............. 676,000 676,000
Petronas Capital, Ltd.
Company Guar. Notes
3.50% due 03/18/2025............... 275,000 295,897
Shell International Finance BV
Company Guar. Notes
1.25% due 11/10/2017............... 201,000 201,346
Shell International Finance BV
Company Guar. Notes
2.13% due 05/11/2020............... 219,000 222,305
Shell International Finance BV
Company Guar. Notes
2.25% due 11/10/2020............... 232,000 236,360
Total Capital International SA
Company Guar. Notes
2.25% due 06/09/2022............... GBP 140,000 194,487
----------
4,277,927
----------
Principal Value
Security Description Amount** (Note 2)
Oil Refining & Marketing -- 0.2%
Reliance Industries, Ltd.
Senior Notes
4.13% due 01/28/2025*............... $ 250,000 $ 260,171
Thai Oil PCL
Senior Notes
3.63% due 01/23/2023*............... 200,000 210,327
Ultrapar International SA
Senior Unsecured Notes
5.25% due 10/06/2026................ 200,000 199,540
----------
670,038
----------
Paper & Related Products -- 0.2%
Bahia Sul Holdings GmbH
Company Guar. Notes
5.75% due 07/14/2026*............... 200,000 201,520
Cascades, Inc.
Company Guar. Notes
5.75% due 07/15/2023*............... 355,000 359,437
Klabin Finance SA
Company Guar. Notes
5.25% due 07/16/2024*............... 200,000 199,500
----------
760,457
----------
Petrochemicals -- 0.1%
Alpek SAB de CV
Company Guar. Notes
5.38% due 08/08/2023*............... 200,000 214,000
Braskem Finance, Ltd.
Company Guar. Notes
5.75% due 04/15/2021................ 200,000 209,640
----------
423,640
----------
Pipelines -- 0.1%
Southern Gas Corridor CJSC
Government Guar. Notes
6.88% due 03/24/2026*............... 500,000 560,000
----------
Printing-Commercial -- 0.2%
Cimpress NV
Company Guar. Notes
7.00% due 04/01/2022*............... 720,000 750,600
----------
Real Estate Investment Trusts -- 0.1%
Trust F/1401
Senior Notes
5.25% due 01/30/2026*............... 200,000 207,300
----------
Retail-Major Department Stores -- 0.1%
El Puerto de Liverpool SAB de CV
Company Guar. Notes
3.88% due 10/06/2026*............... 200,000 197,400
----------
Satellite Telecom -- 0.5%
Inmarsat Finance PLC
Company Guar. Notes
4.88% due 05/15/2022*............... 910,000 864,500
Telesat Canada/Telesat LLC
Company Guar. Notes
6.00% due 05/15/2017*............... 1,140,000 1,140,000
----------
2,004,500
----------
39
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Security Services -- 0.2%
Garda World Security Corp.
Company Guar. Notes
7.25% due 11/15/2021*................... $ 811,000 $ 748,147
----------
Semiconductor Components-Integrated
Circuits -- 0.1%
NXP BV/NXP Funding LLC
Company Guar. Notes
4.63% due 06/01/2023*................... 415,000 453,906
----------
Special Purpose Entity -- 0.0%
Hellas Telecommunications Luxembourg II
SCA FRS
Sub. Notes
6.05% due 01/15/2015*+(3)(6)(7)(14)..... 1,330,000 0
----------
Steel-Producers -- 0.3%
ArcelorMittal
Senior Notes
7.25% due 02/25/2022.................... 1,073,000 1,217,855
----------
Sugar -- 0.1%
Cosan Luxembourg SA
Company Guar. Notes
7.00% due 01/20/2027*................... 200,000 208,000
----------
SupraNational Banks -- 0.1%
North American Development Bank
Senior Notes
2.30% due 10/10/2018.................... 434,000 443,410
----------
Telecom Services -- 0.1%
Bharti Airtel International Netherlands
BV
Company Guar. Notes
5.35% due 05/20/2024.................... 200,000 218,864
GTH Finance BV
Company Guar. Notes
7.25% due 04/26/2023*................... 200,000 216,828
----------
435,692
----------
Telephone-Integrated -- 0.5%
Deutsche Telekom International
Finance BV
Company Guar. Notes
2.49% due 09/19/2023*................... 453,000 453,693
Deutsche Telekom International
Finance BV
Company Guar. Notes
8.88% due 11/27/2028.................... GBP 150,000 337,750
Empresa de Telecomunicaciones de
Bogota
Senior Notes
7.00% due 01/17/2023*................... COP 640,000,000 164,946
Koninklijke KPN NV
Senior Notes
5.75% due 09/17/2029.................... GBP 200,000 345,914
Oi SA
Senior Notes
9.75% due 09/15/2016*+(6)(7)(14)........ BRL 575,000 32,046
Telecom Italia Capital SA
Company Guar. Notes
7.72% due 06/04/2038.................... 341,000 373,395
Principal Value
Security Description Amount** (Note 2)
Telephone-Integrated (continued)
Telefonica Emisiones SAU
Company Guar. Notes
5.38% due 02/02/2026............... GBP 160,000 $ 265,661
-----------
1,973,405
-----------
Transport-Marine -- 0.1%
PT Pelabuhan Indonesia II
Senior Notes
4.25% due 05/05/2025*.............. 300,000 306,207
-----------
Transport-Rail -- 0.0%
Canadian Pacific Railway Co.
Senior Notes
6.13% due 09/15/2115............... 152,000 187,615
-----------
Total Foreign Corporate Bonds & Notes
(cost $62,757,671)................. 60,457,384
-----------
FOREIGN GOVERNMENT OBLIGATIONS -- 8.3%
Banks-Fiduciary -- 0.3%
Central Bank of Tunisia
Senior Notes
5.75% due 01/30/2025............... 1,130,000 1,104,292
-----------
Electric-Distribution -- 0.1%
Hydro-Quebec
Government Guar. Notes
1.38% due 06/19/2017............... 375,000 375,998
-----------
Sovereign -- 7.9%
Dominican Republic
Senior Notes
5.50% due 01/27/2025*.............. 415,000 439,900
Dominican Republic
Senior Bonds
5.88% due 04/18/2024............... 380,000 413,250
Dominican Republic
Senior Notes
8.63% due 04/20/2027............... 350,000 428,750
Federal Republic of Germany
Bonds
0.01% due 08/15/2026............... EUR 1,175,000 1,335,925
Federal Republic of Germany
Bonds
2.50% due 08/15/2046............... EUR 95,000 167,851
Federal Republic of Germany
Bonds
6.25% due 01/04/2030............... EUR 390,000 807,658
Federative Republic of Brazil
Senior Notes
5.00% due 01/27/2045............... 420,000 381,150
Federative Republic of Brazil
Senior Notes
6.00% due 04/07/2026............... 340,000 376,550
Federative Republic of Brazil
Senior Notes
7.13% due 01/20/2037............... 260,000 305,500
Government of Egypt
Senior Notes
5.75% due 04/29/2020............... 380,000 389,595
40
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Sovereign (continued)
Government of Egypt
Senior Notes
5.88% due 06/11/2025......... $ 450,000 $ 427,644
Government of Egypt
Senior Notes
6.88% due 04/30/2040......... 200,000 192,540
Government of Finland
Senior Bonds
2.63% due 07/04/2042*........ EUR 130,000 219,742
Government of Jamaica
Senior Notes
6.75% due 04/28/2028......... 200,000 228,500
Government of Jamaica
Senior Notes
8.00% due 03/15/2039......... 600,000 717,000
Government of Oman
Bonds
4.75% due 06/15/2026......... 630,000 632,205
Government of Romania
Senior Notes
6.13% due 01/22/2044......... 180,000 243,000
Islamic Republic of Pakistan
Senior Notes
8.25% due 04/15/2024......... 200,000 218,982
Kingdom of Belgium
Bonds
5.00% due 03/28/2035*........ EUR 255,000 506,680
Kingdom of Morocco
Senior Notes
4.25% due 12/11/2022......... 380,000 402,891
Kingdom of Morocco
Senior Notes
5.50% due 12/11/2042......... 200,000 228,588
Oriental Republic of Uruguay
Senior Notes
5.10% due 06/18/2050......... 300,000 311,250
Republic of Argentina
Senior Notes
6.88% due 04/22/2021......... 280,000 304,780
Republic of Argentina
Senior Notes
7.50% due 04/22/2026*........ 371,000 418,488
Republic of Argentina
Senior Notes
7.63% due 04/22/2046*........ 309,000 348,552
Republic of Argentina
Senior Notes
7.63% due 04/22/2046......... 170,000 191,760
Republic of Chile
Senior Notes
3.13% due 01/21/2026......... 380,000 401,845
Republic of Chile
Senior Bonds
3.63% due 10/30/2042......... 350,000 372,313
Republic of Costa Rica
Senior Notes
7.16% due 03/12/2045*........ 280,000 301,700
Principal Value
Security Description Amount** (Note 2)
Sovereign (continued)
Republic of Guatemala
Senior Notes
5.75% due 06/06/2022.... $ 240,000 $ 269,400
Republic of Honduras
Senior Notes
7.50% due 03/15/2024.... 370,000 419,950
Republic of Honduras
Senior Notes
8.75% due 12/16/2020.... 350,000 401,625
Republic of Indonesia
Senior Notes
6.63% due 02/17/2037.... 117,000 153,390
Republic of Ivory Coast
Senior Notes
5.38% due 07/23/2024.... 400,000 402,080
Republic of Ivory Coast
Senior Notes
6.38% due 03/03/2028.... 200,000 209,500
Republic of Kenya
Senior Notes
6.88% due 06/24/2024.... 800,000 784,000
Republic of Lebanon
Senior Notes
5.80% due 04/14/2020.... 390,000 386,061
Republic of Lebanon
Senior Notes
6.60% due 11/27/2026.... 700,000 686,910
Republic of Lebanon
Senior Notes
6.65% due 02/26/2030.... 200,000 195,040
Republic of Lebanon
Senior Notes
8.25% due 04/12/2021.... 190,000 205,852
Republic of Lithuania
Senior Notes
6.63% due 02/01/2022.... 500,000 617,358
Republic of Lithuania
Senior Notes
7.38% due 02/11/2020.... 550,000 653,202
Republic of Mozambique
Senior Notes
10.50% due 01/18/2023*.. 774,000 634,835
Republic of Namibia
Senior Notes
5.25% due 10/29/2025.... 370,000 390,831
Republic of Panama
Senior Notes
3.75% due 03/16/2025.... 600,000 647,250
Republic of Panama
Senior Notes
6.70% due 01/26/2036.... 670,000 914,550
Republic of Paraguay
Senior Notes
6.10% due 08/11/2044.... 350,000 398,125
Republic of Peru
Senior Notes
6.55% due 03/14/2037.... 300,000 423,750
41
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Sovereign (continued)
Republic of Poland
Senior Notes
4.00% due 01/22/2024......... $ 770,000 $850,850
Republic of Poland
Senior Notes
5.13% due 04/21/2021......... 50,000 56,520
Republic of Serbia
Senior Notes
7.25% due 09/28/2021......... 750,000 873,030
Republic of South Africa
Senior Bonds
4.88% due 04/14/2026......... 350,000 367,920
Republic of Sri Lanka
Senior Notes
6.83% due 07/18/2026*........ 265,000 284,890
Republic of Sri Lanka
Senior Notes
6.85% due 11/03/2025......... 400,000 429,205
Republic of Sri Lanka
Senior Notes
6.85% due 11/03/2025*........ 400,000 429,205
Republic of Turkey
Senior Notes
3.25% due 03/23/2023......... 1,040,000 977,242
Republic of Turkey
Senior Notes
4.88% due 04/16/2043......... 530,000 494,601
Republic of Turkey
Notes
6.63% due 02/17/2045......... 200,000 233,114
Republic of Turkey
Senior Notes
11.88% due 01/15/2030........ 220,000 366,047
Republic of Venezuela
Bonds
8.25% due 10/13/2024......... 960,000 471,360
Russian Federation
Senior Notes
5.88% due 09/16/2043......... 200,000 238,516
United Kingdom Gilt Treasury
Bonds
1.50% due 07/22/2026......... GBP 125,000 173,315
United Kingdom Gilt Treasury
Bonds
3.50% due 01/22/2045......... GBP 125,000 236,427
United Kingdom Gilt Treasury
Bonds
4.50% due 09/07/2034......... GBP 350,000 686,072
United Mexican States
Senior Notes
4.13% due 01/21/2026......... 600,000 645,300
United Mexican States
Senior Notes
4.35% due 01/15/2047......... 628,000 617,010
United Mexican States
Senior Bonds
4.75% due 03/08/2044......... 445,000 461,131
Principal Value
Security Description Amount** (Note 2)
Sovereign (continued)
United Mexican States
Senior Notes
6.05% due 01/11/2040............... $ 900,000 $ 1,095,750
-----------
30,495,803
-----------
Total Foreign Government Obligations
(cost $31,065,055)................. 31,976,093
-----------
U.S. GOVERNMENT AGENCIES -- 27.4%
Federal Home Loan Mtg. Corp. -- 10.1%
2.49% due 02/01/2037 FRS........... 27,096 28,182
2.50% due 01/01/2028............... 295,298 306,675
2.50% due 04/01/2028............... 97,407 101,180
2.50% due 03/01/2031............... 158,057 163,921
3.00% due 11/01/2026............... 1,696,788 1,782,909
3.00% due 08/01/2043............... 1,044,577 1,087,216
3.00% due 07/01/2045............... 2,657,145 2,763,689
3.00% due 10/01/2045............... 281,210 292,486
3.00% due 12/01/2045............... 92,595 96,308
3.00% due October 30 TBA........... 2,163,000 2,247,661
3.01% due 11/01/2037 FRS........... 161,698 171,096
3.50% due 03/01/2042............... 386,250 408,895
3.50% due 04/01/2042............... 393,840 418,628
3.50% due 09/01/2043............... 412,720 439,817
3.50% due 03/01/2045............... 474,239 500,392
3.50% due 07/01/2045............... 3,704,223 3,936,945
3.50% due 08/01/2045............... 168,231 179,111
3.50% due 10/01/2045............... 262,943 277,367
3.50% due 11/01/2045............... 127,943 134,962
3.50% due 01/01/2046............... 2,569,761 2,710,730
3.50% due October 30 TBA........... 1,032,000 1,088,740
4.00% due 09/01/2040............... 1,053,330 1,134,219
4.00% due 12/01/2043............... 2,844,056 3,095,022
4.00% due 07/01/2044............... 174,328 186,978
4.00% due 10/01/2045............... 2,427,468 2,603,620
4.00% due 11/01/2045............... 2,372,001 2,544,128
4.50% due 02/01/2020............... 7,220 7,520
4.50% due 08/01/2020............... 16,078 16,473
4.50% due 01/01/2039............... 20,982 22,964
4.50% due 03/01/2039............... 1,934,801 2,165,875
4.50% due 12/01/2039............... 10,893 11,922
4.50% due 07/01/2040............... 226,702 251,660
4.50% due 04/01/2044............... 680,838 745,236
4.50% due 07/01/2044............... 1,597,731 1,760,374
4.50% due 09/01/2044............... 949,473 1,039,124
4.50% due 03/01/2046............... 1,750,549 1,918,878
5.00% due 02/01/2034............... 29,893 33,578
5.00% due 05/01/2034............... 41,118 45,532
5.00% due 11/01/2043............... 298,028 333,298
5.50% due 05/01/2037............... 76,582 86,685
6.00% due 03/01/2040............... 59,915 68,745
6.50% due 02/01/2035............... 24,235 28,221
Federal Home Loan Mtg. Corp.
REMIC FRS
Series 3572, Class JS
6.28% due 09/15/2039(1)(8)(9)...... 663,832 100,643
42
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Federal Home Loan Mtg. Corp. (continued)
Federal Home Loan Mtg. Corp.
Structured Agency Credit Risk
Series 2016-HQA1, Class M2
1.00% due 09/25/2028 FRS(1)........... $ 159,000 $ 164,004
Series 2014-DN1, Class M2
2.73% due 02/25/2024 FRS(1)........... 84,000 86,256
Series 2014-HQ2, Class M2
2.73% due 09/25/2024 FRS(1)........... 150,000 154,652
Series 2015-HQ1, Class M2
2.73% due 03/25/2025 FRS(1)........... 390,000 395,163
Series 2014-HQ3, Class M2
3.18% due 10/25/2024 FRS(1)........... 577,849 584,546
Series 2015-HQA1, Class M2
3.18% due 03/25/2028 FRS(1)........... 452,000 462,488
Federal Home Loan Mtg. Corp., REMIC
Series 1103, Class N IO
11.50% due 06/15/2021(1)(8)........... 549 62
-----------
39,184,776
-----------
Federal National Mtg. Assoc. -- 13.5%
2.50% due 12/01/2026.................. 723,008 751,148
2.50% due 09/01/2027.................. 565,542 586,317
2.50% due 02/01/2031.................. 265,955 275,724
2.50% due 05/01/2031.................. 1,622,952 1,682,571
2.50% due October 15 TBA.............. 2,236,000 2,315,947
2.53% due 09/01/2035 FRS.............. 103,274 108,264
2.67% due 10/01/2035 FRS.............. 114,081 120,539
2.67% due 05/01/2037 FRS.............. 40,282 42,099
2.67% due 05/01/2040 FRS.............. 136,787 144,606
2.78% due 11/01/2036 FRS.............. 67,782 71,607
2.79% due 10/01/2040 FRS.............. 68,778 72,712
2.80% due 07/01/2039 FRS.............. 100,206 105,100
3.00% due 04/01/2027.................. 638,885 671,476
3.00% due 10/01/2027.................. 328,788 345,718
3.00% due 11/01/2027.................. 374,568 393,838
3.00% due 10/01/2030.................. 267,547 280,961
3.00% due 03/01/2042.................. 161,582 168,323
3.00% due 12/01/2042.................. 167,917 175,567
3.00% due 05/01/2043.................. 880,438 917,059
3.00% due 06/01/2045.................. 46,817 49,106
3.00% due 08/01/2045.................. 1,903,755 1,980,423
3.00% due 05/01/2046.................. 3,976,455 4,136,595
3.00% due 09/01/2046.................. 342,000 355,773
3.00% due October 15 TBA.............. 1,441,000 1,512,825
3.00% due October 30 TBA.............. 2,014,000 2,093,223
3.05% due 10/01/2040 FRS.............. 42,991 45,359
3.08% due 08/01/2035 FRS.............. 91,228 97,336
3.50% due 08/01/2026.................. 132,379 139,664
3.50% due 08/01/2027.................. 160,133 168,968
3.50% due 10/01/2028.................. 48,131 51,314
3.50% due 08/01/2042.................. 157,256 166,538
3.50% due 02/01/2043.................. 147,212 158,677
3.50% due 07/01/2045.................. 131,279 138,649
3.50% due 08/01/2045.................. 249,286 264,639
3.50% due 09/01/2045.................. 145,696 153,756
3.50% due 10/01/2045.................. 291,588 311,465
3.50% due 11/01/2045.................. 298,498 315,923
Principal Value
Security Description Amount** (Note 2)
Federal National Mtg. Assoc. (continued)
3.50% due 12/01/2045.................. $2,586,260 $ 2,728,267
3.50% due 02/01/2046.................. 977,673 1,031,355
3.50% due 03/01/2046.................. 3,773,877 3,981,095
3.50% due October 15 TBA.............. 1,936,000 2,040,968
3.50% due October 30 TBA.............. 4,630,000 4,885,373
4.00% due 11/01/2025.................. 212,115 225,419
4.00% due 06/01/2039.................. 400,914 443,601
4.00% due 09/01/2040.................. 312,569 335,904
4.00% due 10/01/2040.................. 365,114 392,474
4.00% due 11/01/2041.................. 288,659 311,104
4.00% due 01/01/2043.................. 1,533,945 1,670,631
4.00% due 12/01/2043.................. 11,880 13,065
4.00% due 02/01/2045.................. 2,472,346 2,692,648
4.00% due October 30 TBA.............. 2,441,000 2,621,596
4.50% due 06/01/2019.................. 17,956 18,486
4.50% due 11/01/2022.................. 51,798 53,830
4.50% due 06/01/2023.................. 25,218 26,860
4.50% due 06/01/2039.................. 1,691,963 1,874,290
4.50% due 07/01/2041.................. 40,385 44,321
4.50% due 08/01/2045.................. 2,432,266 2,730,129
4.50% due October 30 TBA.............. 1,832,000 2,006,283
5.00% due 06/01/2019.................. 15,113 15,601
5.00% due 01/01/2023.................. 15,026 16,129
5.00% due 03/01/2034.................. 26,341 29,371
5.00% due 05/01/2035.................. 15,032 16,682
5.00% due 05/01/2040.................. 119,803 133,294
5.00% due 07/01/2040.................. 120,987 134,312
5.50% due 06/01/2038.................. 38,340 43,547
6.00% due 02/01/2032.................. 5,130 5,873
6.00% due 05/01/2034.................. 2,435 2,818
6.00% due 10/01/2034.................. 21,076 24,126
7.50% due 01/01/2030.................. 1,315 1,355
8.00% due 11/01/2028.................. 4,473 5,175
Fannie Mae Connecticut Avenue
Securities FRS
Series 2014-C01, Class M1
2.13% due 01/25/2024(1)............... 123,424 124,375
Federal National Mtg. Assoc., REMIC
Series 1989-2, Class D
8.80% due 01/25/2019(1)............... 3,117 3,278
-----------
52,053,444
-----------
Government National Mtg. Assoc. -- 3.7%
3.00% due 02/20/2045.................. 179,766 188,569
3.00% due 05/20/2045.................. 119,015 124,843
3.00% due 07/20/2045.................. 46,282 48,548
3.00% due 11/20/2045.................. 1,711,850 1,795,677
3.00% due 04/20/2046.................. 2,678,893 2,810,076
3.50% due 03/20/2045.................. 136,032 144,534
3.50% due 04/20/2045.................. 185,544 197,112
3.50% due 07/20/2045.................. 247,512 263,000
3.50% due 10/20/2045.................. 3,721,594 3,954,614
3.50% due 05/20/2046.................. 1,805,468 1,920,136
4.00% due 10/20/2045.................. 307,080 329,508
4.50% due 09/20/2045.................. 1,141,697 1,233,306
4.50% due 10/20/2045.................. 702,662 759,044
4.50% due 05/20/2046.................. 482,459 521,171
-----------
14,290,138
-----------
43
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Shares/
Principal Value
Security Description Amount** (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Tennessee Valley Authority -- 0.1%
1.75% due 10/15/2018....................... $ 238,000 $ 242,014
------------
Total U.S. Government Agencies
(cost $104,907,886)....................... 105,770,372
------------
U.S. GOVERNMENT TREASURIES -- 1.3%
United States Treasury Bonds -- 0.9%
2.50% due 02/15/2046...................... 940,000 971,579
2.50% due 05/15/2046...................... 2,500,000 2,587,500
------------
3,559,079
------------
United States Treasury Notes -- 0.4%
0.50% due 04/30/2017...................... 400 400
1.13% due 06/30/2021...................... 478,000 477,440
1.13% due 07/31/2021...................... 436,000 435,370
1.38% due 01/31/2021...................... 109,000 110,192
1.63% due 05/15/2026...................... 550,000 550,730
------------
1,574,132
------------
Total U.S. Government Treasuries
(cost $5,058,547)......................... 5,133,211
------------
LOANS(11)(12)(13) -- 0.5%
Casino Hotels -- 0.1%
Caesars Entertainment Resort
Properties LLC FRS
BTL-B
7.00% due 10/11/2020...................... 573,526 569,941
------------
E-Commerce/Services -- 0.2%
Rentpath, Inc. FRS
2nd Lien
10.00% due 12/17/2022..................... 693,906 586,351
------------
Electronic Components-Semiconductors -- 0.2%
SunEdison Semiconductor, Ltd. FRS
1st Lien
6.50% due 05/27/2019...................... 659,751 658,102
------------
Total Loans
(cost $1,891,205)......................... 1,814,394
------------
MUNICIPAL BONDS & NOTES -- 0.1%
Port Authority of New York & New Jersey
Revenue Bonds
Series 174
4.46% due 10/01/2062
(cost $512,000)........................... 512,000 589,184
------------
COMMON STOCKS -- 0.2%
Television -- 0.2%
ION Media Networks, Inc.+(3)(6)
(cost $6)................................. 655 792,530
------------
PREFERRED SECURITIES -- 0.2%
Electric-Distribution -- 0.1%
Entergy Louisiana LLC
4.70%..................................... 8,600 221,450
------------
Sovereign Agency -- 0.0%
Federal Home Loan Mtg. Corp. FRS
Series Z
8.38%..................................... 9,675 33,669
------------
Shares/
Principal Value
Security Description Amount** (Note 2)
Telecom Services -- 0.1%
Qwest Corp.
6.13%................................. $ 16,700 $ 425,015
----------
Total Preferred Securities
(cost $781,882)....................... 680,134
----------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 2.6%
Banks-Commercial -- 0.1%
Standard Chartered PLC FRS
7.50% due 04/02/2022*(4).............. 390,000 389,025
----------
Banks-Super Regional -- 0.1%
Fifth Third Bancorp FRS
Series J
4.90% due 09/30/2019(4)............... 396,000 383,724
Banks-Super Regional -- 0.1%
Wells Fargo Capital X
5.95% due 12/01/2086.................. 159,000 174,503
----------
558,227
----------
Diversified Banking Institutions -- 0.9%
BAC Capital Trust XIII FRS
Series F
4.00% due 10/21/2016(4)............... 761,000 623,548
Citigroup, Inc. FRS
Series P
5.95% due 05/15/2025(4)............... 762,000 777,316
JPMorgan Chase & Co. FRS
Series U
6.13% due 04/30/2024(4)............... 1,186,000 1,254,563
Societe Generale SA VRS
7.38% due 09/13/2021*(4).............. 375,000 367,500
Societe Generale SA FRS
7.88% due 12/18/2023*(4).............. 356,000 347,100
----------
3,370,027
----------
Electric-Generation -- 0.1%
Electricite de France SA FRS
4.13% due 01/22/2022(4)............... EUR 300,000 334,477
----------
Electric-Integrated -- 0.2%
Dominion Resources, Inc. FRS
5.75% due 10/01/2054.................. 224,000 231,795
Engie SA FRS
3.88% due 07/10/2018(4)............... EUR 300,000 352,407
----------
584,202
----------
Finance-Investment Banker/Broker -- 0.0%
Lehman Brothers Holdings Capital
Trust VII
Escrow Security
0.00%+(3)(6).......................... 222,000 22
----------
Finance-Other Services -- 0.1%
National Rural Utilities Cooperative
Finance Corp. FRS
4.75% due 04/30/2043.................. 388,000 393,944
----------
44
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
PREFERRED SECURITIES/CAPITAL SECURITIES (continued)
Financial Guarantee Insurance -- 0.3%
Assured Guaranty Municipal
Holdings, Inc. FRS
6.40% due 12/15/2066*.................... $ 1,271,000 $ 1,010,445
------------
Food-Dairy Products -- 0.3%
Land O'Lakes Capital Trust I
7.45% due 03/15/2028*.................... 975,000 1,077,375
------------
Gas-Distribution -- 0.0%
Centrica PLC FRS
3.00% due 04/10/2076..................... EUR 100,000 109,948
------------
Insurance-Life/Health -- 0.0%
Prudential Financial, Inc. FRS
5.38% due 05/15/2045..................... 93,000 96,953
------------
Insurance-Multi-line -- 0.1%
MetLife Capital Trust IV
7.88% due 12/15/2067*.................... 97,000 121,696
MetLife, Inc.
6.40% due 12/15/2066..................... 379,000 419,506
------------
541,202
------------
Insurance-Reinsurance -- 0.1%
Muenchener Rueckversicherungs-
Gesellschaft AG FRS
7.63% due 06/21/2028..................... GBP 400,000 567,046
------------
Oil Companies-Integrated -- 0.1%
TOTAL SA FRS
3.88% due 05/18/2022(4).................. EUR 260,000 309,887
------------
Pipelines -- 0.0%
Transcanada Trust FRS
5.63% due 05/20/2075..................... 118,000 119,475
------------
Telephone-Integrated -- 0.1%
Orange SA FRS
4.00% due 10/01/2021(4).................. EUR 250,000 296,634
------------
Tools-Hand Held -- 0.1%
Stanley Black & Decker, Inc. FRS
5.75% due 12/15/2053..................... 447,000 477,732
------------
Total Preferred Securities/Capital Securities
(cost $9,752,717)........................ 10,236,621
------------
Total Long-Term Investment Securities
(cost $377,913,001)...................... 382,908,201
------------
SHORT-TERM INVESTMENT SECURITIES -- 5.8%
Time Deposits -- 5.5%
Euro Time Deposit with State Street Bank
and Trust Co.
0.01% due 10/03/2016
(cost $21,164,000)....................... 21,164,000 21,164,000
------------
REPURCHASE AGREEMENTS -- 0.3%
State Street Bank and Trust Co. Joint
Repurchase Agreement(10)
(cost $1,203,000)........................ 1,203,000 1,203,000
------------
TOTAL INVESTMENTS
(cost $400,280,001)(5)................... 104.8% 405,275,201
Liabilities in excess of other assets....... (4.8) (18,667,743)
------------- ------------
NET ASSETS 100.0% $386,607,458
============= ============
--------
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At September 30, 2016,
the aggregate value of these securities was $91,694,469 representing 23.7%
of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
** Denominated in United States Dollars unless otherwise indicated.
+ Non-income producing security
(1) Collateralized Mortgage Obligation
(2) Commercial Mortgage Backed Security
(3) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs (see Note 2).
(4) Perpetual maturity--maturity date reflects the next call date.
(5) See Note 5 for cost of investments on a tax basis.
(6) Illiquid security. At September 30, 2016, the aggregate value of these
securities was $1,130,892 representing 0.3% of net assets.
(7) Security in default of interest and principal at maturity
(8) Interest Only
(9) Inverse Floating Rate Security that pays interest that varies inversely to
changes in the market interest rates. The interest rate shown is the
current interest rate at September 30, 2016.
(10) See Note 2 for details of Joint Repurchase Agreements.
(11) All loans in the Fund were purchased through assignment agreements unless
otherwise indicated.
(12) Senior loans in the Fund are generally subject to mandatory and/or
optional prepayment. Because of these mandatory prepayment conditions and
because there may be significant economic incentives for a borrower to
prepay, prepayments may occur. As a result, the actual remaining maturity
may be substantially less than the stated maturities shown.
(13) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior
loans are generally considered to be restrictive in that the Fund is
ordinarily contractually obligated to receive approval from the Agent Bank
and/or borrower prior to the disposition of a senior loan.
(14) Company has filed for bankruptcy protection.
BTL --Bank Term Loan
REMIC --Real Estate Mortgage Investment Conduit
TBA --Securities purchased on a forward commitment basis with an approximate
principal amount and no definite maturity date. The actual principal
amount and maturity date will be determined upon settlement date.
ULC --Unlimited Company
FRS --Floating Rate Security
VRS --Variable Rate Security
The rates shown on FRS and VRS are the current rates at September 30, 2016 and
unless noted otherwise, the dates shown are the original maturity dates.
BRL --Brazilian Real
COP --Columbian Peso
EUR --Euro
GBP --British Pound
45
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Forward Foreign Currency Contracts
Contract In Exchange Delivery Unrealized Unrealized
Counterparty to Deliver For Date Appreciation Depreciation
--------------------------------------------------------------------------------------------
JPMorgan Chase Bank N.A EUR 12,250,000 USD 13,842,500 10/07/2016 $79,580 $ --
EUR 10,215,000 USD 11,473,213 10/28/2016 -- (14,593)
GBP 6,095,000 USD 7,919,483 10/28/2016 15,522 --
USD 253,013 EUR 225,000 10/07/2016 -- (224)
------- --------
Net Unrealized Appreciation/(Depreciation)...... $95,102 $(14,817)
======= ========
--------
EUR --Euro Dollar
GBP --Pound Sterling
USD --United States
46
SunAmerica Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2016 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Asset Backed Securities:
Diversified Financial Services......... $ -- $ 7,789,750 $ 347,983 $ 8,137,733
U.S. Corporate Bonds & Notes:
Airlines............................... -- 1,155,929 260,902 1,416,831
Finance-Investment Banker/Broker....... -- 208,402 64 208,466
Gambling (Non-Hotel)................... -- 1,694,025 5,880 1,699,905
Mining................................. -- -- 15,000 15,000
Rubber/Plastic Products................ -- 356,250 0 356,250
Other Industries....................... -- 153,624,093 -- 153,624,093
Foreign Corporate Bonds & Notes:
Special Purpose Entity................. -- -- 0 0
Other Industries....................... -- 60,457,384 -- 60,457,384
Foreign Government Obligation............ -- 31,976,093 -- 31,976,093
U.S. Government Agencies................. -- 105,770,372 -- 105,770,372
U.S. Government Treasuries............... -- 5,133,211 -- 5,133,211
Loans.................................... -- 1,814,394 -- 1,814,394
Municipal Bonds & Notes.................. -- 589,184 -- 589,184
Common Stocks............................ -- -- 792,530 792,530
Preferred Securities..................... 680,134 -- -- 680,134
Preferred Securities/Capital Securities:
Finance-Investment Banker/Broker....... -- -- 22 22
Other Industries....................... -- 10,236,599 -- 10,236,599
Short-Term Investment Securities......... -- 21,164,000 -- 21,164,000
Repurchase Agreements.................... -- 1,203,000 -- 1,203,000
-------- ------------ ---------- ------------
Total Investments at Value............... $680,134 $403,172,686 $1,422,381 $405,275,201
======== ============ ========== ============
Other Financial Instruments:+
Forward Foreign Currency Contracts....... $ -- $ 95,102 $ -- $ 95,102
======== ============ ========== ============
LIABILITIES:
Other Financial Instruments:+
Forward Foreign Currency Contracts....... $ -- $ 14,817 $ -- $ 14,817
======== ============ ========== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
+ Other financial instruments are derivative instruments, not reflected in the
Portfolio of Investments, such as futures, forward, swap and written option
contracts, which are valued at the unrealized appreciation (depreciation) on
the instrument.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no material transfers between Levels during the
reporting period.
At the beginning and end of the reporting period, Level 3 investments were not
considered a material portion of the Fund.
See Notes to Financial Statements
47
SunAmerica Flexible Credit Fund
PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited)
Industry Allocation*
Cable/Satellite TV........................... 4.7%
Oil Companies-Exploration & Production....... 4.6
Medical-Hospitals............................ 4.3
Broadcast Services/Program................... 2.7
Telephone-Integrated......................... 2.2
Casino Hotels................................ 2.0
Medical-Drugs................................ 1.9
Independent Power Producers.................. 1.9
Building-Residential/Commercial.............. 1.8
Commercial Services.......................... 1.7
Data Processing/Management................... 1.7
Diversified Financial Services............... 1.7
Hotels/Motels................................ 1.6
Pipelines.................................... 1.6
Containers-Paper/Plastic..................... 1.6
Cellular Telecom............................. 1.5
Auto/Truck Parts & Equipment-Original........ 1.5
Telecom Services............................. 1.4
Containers-Metal/Glass....................... 1.4
Enterprise Software/Service.................. 1.4
Gambling (Non-Hotel)......................... 1.4
Aerospace/Defense-Equipment.................. 1.3
Distribution/Wholesale....................... 1.3
Airlines..................................... 1.3
Applications Software........................ 1.2
Real Estate Investment Trusts................ 1.2
Finance-Leasing Companies.................... 1.2
Building & Construction Products-Misc........ 1.1
Chemicals-Diversified........................ 1.1
Machinery-General Industrial................. 1.1
Real Estate Management/Services.............. 1.1
Chemicals-Specialty.......................... 1.1
Building Products-Cement..................... 1.0
Finance-Auto Loans........................... 1.0
Educational Software......................... 1.0
Food-Misc./Diversified....................... 1.0
Exchange-Traded Funds........................ 0.9
Computer Services............................ 0.9
Medical Labs & Testing Services.............. 0.9
Food-Retail.................................. 0.9
Television................................... 0.8
Electric-Integrated.......................... 0.8
Oil & Gas Drilling........................... 0.8
Commercial Services-Finance.................. 0.8
Consumer Products-Misc....................... 0.8
Diversified Minerals......................... 0.7
Computers-Periphery Equipment................ 0.7
Medical Products............................. 0.7
Finance-Other Services....................... 0.7
Oil Refining & Marketing..................... 0.7
Diversified Banking Institutions............. 0.7
Building & Construction-Misc................. 0.6
Finance-Consumer Loans....................... 0.6
Dialysis Centers............................. 0.6
Sovereign.................................... 0.6
Steel-Producers.............................. 0.6
Computers-Integrated Systems................. 0.6
Electronic Components-Semiconductors......... 0.6
Semiconductor Components-Integrated Circuits. 0.6
Oil-Field Services........................... 0.5
Extended Service Contracts................... 0.5
Security Services...................... 0.5%
Racetracks............................. 0.5
Leisure Games.......................... 0.5
Finance-Mortgage Loan/Banker........... 0.5
Investment Companies................... 0.5
Retail-Drug Store...................... 0.5
MRI/Medical Diagnostic Imaging......... 0.4
Medical-Outpatient/Home Medical........ 0.4
Food-Baking............................ 0.4
Retail-Arts & Crafts................... 0.4
Schools................................ 0.4
Banks-Super Regional................... 0.4
Oil Companies-Integrated............... 0.4
Medical-HMO............................ 0.4
Retail-Auto Parts...................... 0.4
Building Products-Wood................. 0.4
Diversified Manufacturing Operations... 0.4
Investment Management/Advisor Services. 0.4
Diagnostic Equipment................... 0.4
Electric-Generation.................... 0.4
Paper & Related Products............... 0.4
Banks-Mortgage......................... 0.4
Food-Dairy Products.................... 0.4
Specified Purpose Acquisitions......... 0.4
Physicians Practice Management......... 0.4
Metal Processors & Fabrication......... 0.3
Auction Houses/Art Dealers............. 0.3
Retail-Restaurants..................... 0.3
Private Equity......................... 0.3
Radio.................................. 0.3
Diagnostic Kits........................ 0.3
Disposable Medical Products............ 0.3
Professional Sports.................... 0.3
Human Resources........................ 0.3
Auto-Heavy Duty Trucks................. 0.3
Miscellaneous Manufacturing............ 0.3
Food-Confectionery..................... 0.3
Computers.............................. 0.3
Non-Hazardous Waste Disposal........... 0.3
Resorts/Theme Parks.................... 0.3
Insurance-Multi-line................... 0.3
Retail-Leisure Products................ 0.3
Food-Catering.......................... 0.3
Publishing-Books....................... 0.3
Gas-Distribution....................... 0.3
Cosmetics & Toiletries................. 0.3
Insurance-Property/Casualty............ 0.2
Special Purpose Entities............... 0.2
Metal-Diversified...................... 0.2
Medical-Wholesale Drug Distribution.... 0.2
Energy-Alternate Sources............... 0.2
Machinery-Farming...................... 0.2
Apparel Manufacturers.................. 0.2
Rubber/Plastic Products................ 0.2
Machinery-Pumps........................ 0.2
Satellite Telecom...................... 0.2
Medical-Generic Drugs.................. 0.2
Rental Auto/Equipment.................. 0.2
Bicycle Manufacturing.................. 0.2
Chemicals-Plastics..................... 0.2
Metal-Copper........................... 0.2
48
SunAmerica Flexible Credit Fund
PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited) (continued)
Industry Allocation* (continued)
Casino Services.......................... 0.2%
Alternative Waste Technology............. 0.2
Food-Flour & Grain....................... 0.2
Medical-Biomedical/Gene.................. 0.2
Retail-Misc./Diversified................. 0.2
Metal-Aluminum........................... 0.2
Consulting Services...................... 0.2
Retail-Hypermarkets...................... 0.2
Retail-Building Products................. 0.2
Retail-Pet Food & Supplies............... 0.2
Research & Development................... 0.2
Retail-Perfume & Cosmetics............... 0.2
Financial Guarantee Insurance............ 0.2
Metal-Iron............................... 0.2
Theaters................................. 0.1
Filtration/Separation Products........... 0.1
Bloodstock Services...................... 0.1
Retail-Major Department Stores........... 0.1
Home Decoration Products................. 0.1
Medical Information Systems.............. 0.1
Electric Products-Misc................... 0.1
Semiconductor Equipment.................. 0.1
Auto/Truck Parts & Equipment-Replacement. 0.1
Advertising Services..................... 0.1
Finance-Commercial....................... 0.1
Health Care Providers & Services......... 0.1
-----
103.1%
=====
Credit Quality+#
Aaa........... 0.3%
Baa........... 3.1
Ba............ 39.1
B............. 42.3
Caa........... 9.0
Ca............ 0.1
Not Rated@.... 6.1
-----
100.0%
=====
--------
*Calculated as a percentage of net assets
+Source: Moody's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
49
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
Principal Value
Security Description Amount (Note 2)
ASSET BACKED SECURITIES -- 1.7%
Diversified Financial Services -- 1.7%
GLS Auto Receivables Trust
9.79% due 10/15/2025(2)................ $ 340,000 $ 347,069
Home Equity Loan Trust VRS
Series 2007-HSA3, Class AI4
6.11% due 06/25/2037................... 1,105,738 1,112,464
JP Morgan Chase Commercial Mtg.
Securities Trust
Series 2013-C16, Class A2
3.07% due 12/15/2046................... 1,097,942 1,128,253
JPMBB Commercial Mtg. Securities Trust
Series 2014-C19, Class A2
3.05% due 04/15/2047................... 2,110,000 2,185,204
Leaf Receivables Funding 10 LLC
Series 2015-1, Class E2
6.00% due 06/15/2023*.................. 590,000 578,059
Leaf Receivables Funding 11 LLC
Series 2016-1, Class E2
6.00% due 06/15/2024*.................. 290,000 270,372
----------
Total Asset Backed Securities
(cost $5,593,459)...................... 5,621,421
----------
U.S. CORPORATE BONDS & NOTES -- 33.4%
Aerospace/Defense-Equipment -- 0.5%
Transdigm, Inc.
Company Guar. Notes
6.50% due 05/15/2025................... 1,530,000 1,593,112
----------
Airlines -- 0.2%
US Airways Pass Through Trust
Series 2012-2 Class C
5.45% due 06/03/2018................... 500,000 512,500
----------
Alternative Waste Technology -- 0.2%
Advanced Disposal Services, Inc.
Company Guar. Notes
8.25% due 10/01/2020................... 620,000 651,000
----------
Apparel Manufacturers -- 0.2%
Hanesbrands, Inc.
Company Guar. Notes
4.63% due 05/15/2024*.................. 235,000 241,169
Hanesbrands, Inc.
Company Guar. Notes
4.88% due 05/15/2026*.................. 480,000 490,800
----------
731,969
----------
Applications Software -- 0.1%
Emdeon, Inc.
Company Guar. Notes
11.00% due 12/31/2019.................. 420,000 442,050
----------
Auto/Truck Parts & Equipment-Original -- 0.5%
MPG Holdco I, Inc.
Company Guar. Notes
7.38% due 10/15/2022................... 340,000 347,650
Tenneco, Inc.
Company Guar. Notes
5.00% due 07/15/2026................... 605,000 612,562
TI Group Automotive Systems, LLC
Senior Notes
8.75% due 07/15/2023*.................. 570,000 619,875
----------
1,580,087
----------
Principal Value
Security Description Amount (Note 2)
Auto/Truck Parts & Equipment-Replacement -- 0.1%
Allison Transmission, Inc.
Company Guar. Notes
5.00% due 10/01/2024*.................. $ 240,000 $ 246,000
----------
Banks-Mortgage -- 0.4%
Provident Funding Associates LP/PFG
Finance Corp.
Company Guar. Notes
6.75% due 06/15/2021*.................. 1,205,000 1,215,544
----------
Broadcast Services/Program -- 0.6%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes
7.63% due 03/15/2020................... 1,535,000 1,521,569
iHeartCommunications, Inc.
Senior Sec. Notes
9.00% due 12/15/2019................... 640,000 506,400
----------
2,027,969
----------
Building & Construction Products-Misc. -- 0.4%
NCI Building Systems, Inc.
Company Guar. Notes
8.25% due 01/15/2023*.................. 585,000 636,188
Standard Industries, Inc.
Senior Notes
5.50% due 02/15/2023*.................. 215,000 224,675
Standard Industries, Inc.
Senior Notes
6.00% due 10/15/2025*.................. 565,000 604,550
----------
1,465,413
----------
Building Products-Cement -- 0.1%
Cemex Finance LLC
Senior Sec. Notes
6.00% due 04/01/2024*.................. 490,000 502,250
----------
Building Products-Wood -- 0.4%
Boise Cascade Co.
Company Guar. Notes
5.63% due 09/01/2024*.................. 640,000 649,600
Masco Corp.
Senior Notes
3.50% due 04/01/2021................... 690,000 714,150
----------
1,363,750
----------
Building-Residential/Commercial -- 1.8%
Beazer Homes USA, Inc.
Company Guar. Notes
5.75% due 06/15/2019................... 310,000 322,400
Beazer Homes USA, Inc.
Company Guar. Notes
8.75% due 03/15/2022*.................. 265,000 279,575
Lennar Corp.
Company Guar. Notes
4.50% due 11/15/2019................... 355,000 374,081
Lennar Corp.
Company Guar. Notes
4.88% due 12/15/2023................... 620,000 635,500
M/I Homes, Inc.
Company Guar. Notes
6.75% due 01/15/2021................... 475,000 497,562
MDC Holdings, Inc.
Company Guar. Notes
5.50% due 01/15/2024................... 755,000 788,975
50
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Building-Residential/Commercial (continued)
PulteGroup, Inc.
Company Guar. Notes
5.50% due 03/01/2026........................ $ 675,000 $ 708,750
Toll Brothers Finance Corp.
Company Guar. Notes
4.88% due 11/15/2025........................ 1,280,000 1,312,000
TRI Pointe Group Inc./TRI Pointe Homes Inc.
Company Guar. Notes
5.88% due 06/15/2024........................ 835,000 868,400
TRI Pointe Holdings, Inc.
Company Guar. Notes
4.38% due 06/15/2019........................ 230,000 236,613
----------
6,023,856
----------
Cable/Satellite TV -- 1.9%
CCO Holdings LLC/CCO Holdings
Capital Corp.
Senior Notes
5.50% due 05/01/2026*....................... 445,000 463,913
Cequel Communications Holdings I
LLC/Cequel Capital Corp.
Senior Notes
5.13% due 12/15/2021*....................... 570,000 568,581
CSC Holdings LLC
Senior Notes
5.25% due 06/01/2024........................ 595,000 565,250
CSC Holdings LLC
Company Guar. Notes
5.50% due 04/15/2027*....................... 580,000 593,050
CSC Holdings LLC
Company Guar. Notes
6.63% due 10/15/2025*....................... 540,000 585,900
CSC Holdings LLC
Senior Notes
10.13% due 01/15/2023*...................... 350,000 403,375
DISH DBS Corp.
Company Guar. Notes
6.75% due 06/01/2021........................ 1,320,000 1,425,600
DISH DBS Corp.
Company Guar. Notes
7.75% due 07/01/2026*....................... 960,000 1,020,000
RCN Telecom Services LLC/RCN
Capital Corp.
Senior Notes
8.50% due 08/15/2020*....................... 810,000 863,662
----------
6,489,331
----------
Casino Hotels -- 1.0%
Boyd Gaming Corp.
Company Guar. Notes
6.88% due 05/15/2023........................ 520,000 562,900
Caesars Entertainment Resort
Properties LLC
Senior Sec. Notes
8.00% due 10/01/2020........................ 265,000 273,944
Caesars Growth Properties Holdings
LLC/Caesars Growth Properties
Finance, Inc.
Sec. Notes
9.38% due 05/01/2022........................ 1,290,000 1,377,075
Principal Value
Security Description Amount (Note 2)
Casino Hotels (continued)
MGM Resorts International
Company Guar. Notes
4.63% due 09/01/2026.............. $1,085,000 $1,057,875
----------
3,271,794
----------
Cellular Telecom -- 1.3%
Sprint Communications, Inc.
Senior Notes
6.00% due 11/15/2022.............. 985,000 913,588
Sprint Corp.
Company Guar. Notes
7.25% due 09/15/2021.............. 615,000 617,306
Sprint Corp.
Company Guar. Notes
7.88% due 09/15/2023.............. 1,050,000 1,056,562
T-Mobile USA, Inc.
Company Guar. Notes
6.50% due 01/15/2026.............. 780,000 862,875
T-Mobile USA, Inc.
Company Guar. Notes
6.73% due 04/28/2022.............. 955,000 1,002,750
----------
4,453,081
----------
Coatings/Paint -- 0.0%
Axalta Coating Systems LLC
Company Guar. Notes
4.88% due 08/15/2024*............. 150,000 153,656
----------
Computer Services -- 0.2%
Harland Clarke Holdings Corp.
Senior Sec. Notes
6.88% due 03/01/2020*............. 350,000 334,250
Harland Clarke Holdings Corp.
Senior Notes
9.25% due 03/01/2021*............. 400,000 340,000
----------
674,250
----------
Computers -- 0.3%
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Senior Sec. Notes
5.45% due 06/15/2023*............. 155,000 166,076
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Senior Sec. Notes
6.02% due 06/15/2026*............. 110,000 120,593
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Company Guar. Notes
7.13% due 06/15/2024*............. 340,000 373,948
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Senior Sec. Notes
8.10% due 07/15/2036*............. 140,000 164,576
Diamond 1 Finance Corp./Diamond 2
Finance Corp.
Senior Sec. Notes
8.35% due 07/15/2046*............. 115,000 137,696
----------
962,889
----------
51
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Containers-Paper/Plastic -- 0.8%
Berry Plastics Corp.
Sec. Notes
5.13% due 07/15/2023.................. $ 990,000 $1,004,850
Graphic Packaging International, Inc.
Company Guar. Notes
4.13% due 08/15/2024.................. 820,000 826,150
Reynolds Group Issuer, Inc./Reynolds
Group Issuer LLC
Senior Sec. Notes
5.13% due 07/15/2023*................. 635,000 655,637
Reynolds Group Issuer, Inc./Reynolds
Group Issuer LLC
Company Guar. Notes
7.00% due 07/15/2024*................. 40,000 42,900
----------
2,529,537
----------
Data Processing/Management -- 0.2%
First Data Corp.
Senior Sec. Notes
5.00% due 01/15/2024*................. 685,000 695,275
----------
Diagnostic Kits -- 0.2%
Alere, Inc.
Company Guar. Notes
6.50% due 06/15/2020.................. 600,000 600,000
----------
Disposable Medical Products -- 0.2%
Sterigenics-Nordion Holdings LLC
Senior Notes
6.50% due 05/15/2023*................. 720,000 748,800
----------
Electric Products-Misc. -- 0.1%
WESCO Distribution, Inc.
Company Guar. Notes
5.38% due 06/15/2024*................. 260,000 260,650
----------
Electric-Integrated -- 0.0%
Texas Competitive Electric Holdings
Co. LLC/TCEH Finance, Inc.
Senior Sec. Notes
11.50% due 10/01/2020+*(3)(4)......... 295,000 89,975
----------
Energy-Alternate Sources -- 0.2%
TerraForm Power Operating LLC
Company Guar. Notes
9.38% due 02/01/2023*................. 760,000 780,900
----------
Enterprise Software/Service -- 0.1%
Infor US, Inc.
Company Guar. Notes
6.50% due 05/15/2022.................. 475,000 480,938
----------
Finance-Auto Loans -- 1.0%
Ally Financial, Inc.
Senior Notes
4.13% due 03/30/2020.................. 1,910,000 1,943,425
Ally Financial, Inc.
Senior Notes
4.25% due 04/15/2021.................. 700,000 713,125
Ally Financial, Inc.
Sub. Notes
5.75% due 11/20/2025.................. 700,000 732,375
----------
3,388,925
----------
Principal Value
Security Description Amount (Note 2)
Finance-Consumer Loans -- 0.6%
Navient Corp.
Senior Notes
7.25% due 09/25/2023................... $ 205,000 $ 205,000
Springleaf Finance Corp.
Company Guar. Notes
5.25% due 12/15/2019................... 1,390,000 1,419,537
TMX Finance LLC/TitleMax Finance Corp.
Senior Sec. Notes
8.50% due 09/15/2018*.................. 600,000 447,000
----------
2,071,537
----------
Finance-Other Services -- 0.2%
Double Eagle Acquisition Sub, Inc.
Senior Notes
7.50% due 10/01/2024*.................. 270,000 274,725
Nationstar Mtg. LLC/Nationstar
Capital Corp.
Company Guar. Notes
6.50% due 07/01/2021................... 415,000 406,700
----------
681,425
----------
Food-Flour & Grain -- 0.2%
Post Holdings, Inc.
Company Guar. Notes
5.00% due 08/15/2026*.................. 650,000 646,750
----------
Food-Misc./Diversified -- 0.2%
Dole Food Co, Inc.
Senior Sec. Notes
7.25% due 05/01/2019*.................. 450,000 456,750
Pinnacle Foods Finance LLC/Pinnacle
Foods Finance Corp.
Company Guar. Notes
5.88% due 01/15/2024*.................. 130,000 138,775
----------
595,525
----------
Food-Retail -- 0.5%
Albertsons Cos. LLC/Safeway, Inc.
Senior Notes
5.75% due 03/15/2025*.................. 785,000 783,037
Safeway, Inc.
Senior Notes
7.25% due 02/01/2031................... 760,000 754,300
----------
1,537,337
----------
Food-Wholesale/Distribution -- 0.0%
US Foods, Inc.
Company Guar. Notes
5.88% due 06/15/2024*.................. 145,000 150,438
----------
Gambling (Non-Hotel) -- 0.4%
Mohegan Tribal Gaming Authority
Company Guar. Notes
9.75% due 09/01/2021................... 560,000 604,100
Scientific Games International, Inc.
Senior Sec. Notes
7.00% due 01/01/2022*.................. 565,000 597,488
----------
1,201,588
----------
52
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Gas-Distribution -- 0.3%
NGL Energy Partners LP/NGL Energy
Finance Corp
Company Guar. Notes
5.13% due 07/15/2019.................. $ 935,000 $ 878,900
----------
Home Decoration Products -- 0.1%
Newell Brands, Inc.
Senior Notes
5.00% due 11/15/2023*................. 295,000 314,076
----------
Hotels/Motels -- 0.0%
Diamond Resorts International, Inc.
Senior Sec. Notes
7.75% due 09/01/2023*................. 90,000 90,113
----------
Human Resources -- 0.1%
AMN Healthcare, Inc.
Company Guar. Notes
5.13% due 10/01/2024*................. 245,000 247,450
Team Health, Inc.
Company Guar. Notes
7.25% due 12/15/2023*................. 65,000 69,956
----------
317,406
----------
Independent Power Producers -- 1.0%
Calpine Corp.
Senior Notes
5.38% due 01/15/2023.................. 727,000 724,274
Dynegy, Inc.
Company Guar. Notes
7.38% due 11/01/2022.................. 1,260,000 1,244,250
NRG Energy, Inc.
Company Guar. Notes
7.25% due 05/15/2026*................. 630,000 641,025
NRG Yield Operating LLC
Company Guar. Notes
5.38% due 08/15/2024.................. 665,000 683,287
----------
3,292,836
----------
Insurance-Multi-line -- 0.1%
Genworth Holdings, Inc.
Company Guar. Notes
4.90% due 08/15/2023.................. 400,000 333,000
----------
Medical Information Systems -- 0.1%
Quintiles IMS, Inc.
Company Guar. Notes
5.00% due 10/15/2026*................. 300,000 312,000
----------
Medical Labs & Testing Services -- 0.2%
inVentiv Health, Inc.
Senior Sec. Notes
9.00% due 01/15/2018*................. 415,000 426,153
Quorum Health Corp.
Company Guar. Notes
11.63% due 04/15/2023*................ 385,000 319,550
----------
745,703
----------
Medical Products -- 0.3%
Fredenius US Finance II, Inc.
Company Guar. Notes
4.50% due 01/15/2023*................. 190,000 198,075
Principal Value
Security Description Amount (Note 2)
Medical Products (continued)
Teleflex, Inc.
Company Guar. Notes
4.88% due 06/01/2026........................ $ 740,000 $ 765,900
----------
963,975
----------
Medical-Drugs -- 0.6%
Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
5.38% due 01/15/2023*....................... 460,000 407,100
PRA Holdings, Inc.
Senior Notes
9.50% due 10/01/2023*....................... 421,000 463,100
Quintiles Transnational Corp.
Company Guar. Notes
4.88% due 05/15/2023*....................... 510,000 524,025
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
7.25% due 07/15/2022*....................... 295,000 273,613
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
6.38% due 10/15/2020*....................... 505,000 473,437
----------
2,141,275
----------
Medical-HMO -- 0.3%
Centene Corp.
Senior Notes
4.75% due 05/15/2022........................ 280,000 289,100
Centene Corp.
Senior Notes
5.63% due 02/15/2021........................ 570,000 604,200
MPH Acquisition Holdings LLC
Senior Notes
7.13% due 06/01/2024*....................... 75,000 80,625
----------
973,925
----------
Medical-Hospitals -- 2.5%
CHS/Community Health Systems, Inc.
Senior Sec. Notes
5.13% due 08/15/2018........................ 82,000 82,820
CHS/Community Health Systems, Inc.
Company Guar. Notes
6.88% due 02/01/2022........................ 1,025,000 881,500
HCA, Inc.
Senior Sec. Notes
4.50% due 02/15/2027........................ 775,000 779,844
HCA, Inc.
Senior Sec. Notes
5.25% due 06/15/2026........................ 490,000 520,625
HCA, Inc.
Company Guar. Notes
5.38% due 02/01/2025........................ 1,000,000 1,032,500
HCA, Inc.
Senior Sec. Notes
6.50% due 02/15/2020........................ 1,345,000 1,489,587
Surgery Center Holdings, Inc.
Company Guar. Notes
8.88% due 04/15/2021*....................... 420,000 448,350
Tenet Healthcare Corp. FRS
Senior Sec. Notes
4.35% due 06/15/2020........................ 315,000 316,606
53
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Medical-Hospitals (continued)
Tenet Healthcare Corp.
Senior Notes
5.00% due 03/01/2019.................. $ 760,000 $ 742,900
Tenet Healthcare Corp.
Senior Sec. Notes
6.00% due 10/01/2020.................. 750,000 793,125
Tenet Healthcare Corp.
Senior Notes
8.13% due 04/01/2022.................. 730,000 730,000
Universal Health Services, Inc.
Senior Sec. Notes
4.75% due 08/01/2022*................. 235,000 242,638
Universal Health Services, Inc.
Senior Sec. Notes
5.00% due 06/01/2026*................. 245,000 255,106
----------
8,315,601
----------
Metal Processors & Fabrication -- 0.3%
Novelis Corp.
Company Guar. Notes
5.88% due 09/30/2026*................. 1,015,000 1,039,106
Novelis Corp.
Company Guar. Notes
6.25% due 08/15/2024*................. 90,000 95,513
----------
1,134,619
----------
Metal-Aluminum -- 0.2%
Aleris International, Inc.
Senior Sec. Notes
9.50% due 04/01/2021*................. 570,000 614,175
----------
Metal-Copper -- 0.2%
Freeport-McMoRan Copper & Gold, Inc.
Company Guar. Notes
3.88% due 03/15/2023.................. 300,000 269,226
Freeport-McMoRan, Inc.
Company Guar. Notes
3.55% due 03/01/2022.................. 445,000 404,950
----------
674,176
----------
MRI/Medical Diagnostic Imaging -- 0.2%
Surgical Care Affiliates, Inc.
Company Guar. Notes
6.00% due 04/01/2023*................. 734,000 770,700
----------
Oil & Gas Drilling -- 0.3%
Helmerich & Payne International
Drilling Co.
Company Guar. Notes
4.65% due 03/15/2025.................. 375,000 395,732
Rowan Cos., Inc.
Company Guar. Notes
5.40% due 12/01/2042.................. 870,000 578,550
----------
974,282
----------
Oil Companies-Exploration & Production -- 3.4%
Antero Resources Corp.
Company Guar. Notes
5.38% due 11/01/2021.................. 130,000 131,463
Antero Resources Corp.
Company Guar. Notes
5.63% due 06/01/2023.................. 190,000 193,563
Principal Value
Security Description Amount (Note 2)
Oil Companies-Exploration & Production (continued)
Antero Resources Corp.
Company Guar. Notes
6.00% due 12/01/2020............... $ 350,000 $ 361,704
Bonanza Creek Energy, Inc.
Company Guar. Notes
6.75% due 04/15/2021............... 425,000 193,375
Callon Petroleum Co
Company Guar. Notes
6.13% due 10/01/2024*.............. 390,000 403,650
Carrizo Oil & Gas, Inc.
Company Guar. Notes
6.25% due 04/15/2023............... 1,550,000 1,534,500
Chesapeake Energy Corp.
Company Guar. Notes
5.75% due 03/15/2023............... 220,000 187,000
Chesapeake Energy Corp.
Company Guar. Notes
6.63% due 08/15/2020............... 200,000 188,250
Continental Resources, Inc.
Company Guar. Notes
4.50% due 04/15/2023............... 420,000 403,200
Continental Resources, Inc.
Company Guar. Notes
5.00% due 09/15/2022............... 695,000 693,262
Diamondback Energy, Inc.
Company Guar. Notes
7.63% due 10/01/2021............... 570,000 604,200
EP Energy LLC/Everest Acquisition
Finance, Inc.
Company Guar. Notes
9.38% due 05/01/2020............... 964,000 682,030
Laredo Petroleum, Inc.
Company Guar. Notes
5.63% due 01/15/2022............... 470,000 455,900
Newfield Exploration Co.
Senior Notes
5.38% due 01/01/2026............... 635,000 636,587
Newfield Exploration Co.
Senior Notes
5.75% due 01/30/2022............... 590,000 609,175
Parsley Energy LLC/Parsley Finance
Corp.
Company Guar. Notes
6.25% due 06/01/2024*.............. 1,380,000 1,424,850
QEP Resources, Inc.
Senior Notes
5.25% due 05/01/2023............... 930,000 916,050
Range Resources Corp.
Company Guar. Notes
5.00% due 03/15/2023*.............. 955,000 933,512
SM Energy Co.
Senior Notes
6.13% due 11/15/2022............... 340,000 340,000
Whiting Petroleum Corp.
Company Guar. Notes
5.75% due 03/15/2021............... 720,000 673,200
-----------
11,565,471
-----------
54
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Oil Refining & Marketing -- 0.7%
Cheniere Corpus Christi Holdings LLC
Senior Sec. Notes
7.00% due 06/30/2024*......................... $ 415,000 $ 448,200
Sunoco LP/Sunoco Finance Corp.
Company Guar. Notes
6.38% due 04/01/2023*......................... 1,755,000 1,803,262
----------
2,251,462
----------
Oil-Field Services -- 0.1%
FTS International, Inc. FRS
Senior Sec. Notes
8.35% due 06/15/2020*......................... 475,000 403,465
----------
Physicians Practice Management -- 0.2%
MEDNAX, Inc.
Company Guar. Notes
5.25% due 12/01/2023*......................... 620,000 651,775
----------
Pipelines -- 1.6%
Antero Midstream Partners LP/Antero Midstream
Finance Corp.
Company Guar. Notes
5.38% due 09/15/2024*......................... 370,000 374,625
Blue Racer Midstream LLC/Blue
Racer Finance Corp.
Company Guar. Notes
6.13% due 11/15/2022*......................... 875,000 855,312
Crestwood Midstream Partners
LP/Crestwood Midstream Finance
Corp.
Company Guar. Notes
6.25% due 04/01/2023.......................... 600,000 607,500
Enbridge Energy Partners LP
Senior Notes
4.38% due 10/15/2020.......................... 125,000 131,831
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020.......................... 571,000 626,672
EnLink Midstream Partners LP
Senior Notes
4.85% due 07/15/2026.......................... 80,000 80,502
Holly Energy Partners LP/Holly
Energy Finance Corp.
Company Guar. Notes
6.00% due 08/01/2024*......................... 100,000 103,500
MPLX LP
Company Guar. Notes
4.88% due 12/01/2024.......................... 830,000 858,491
Regency Energy Partners LP/Regency Energy
Finance Corp.
Company Guar. Notes
5.00% due 10/01/2022.......................... 630,000 664,932
Sabine Pass Liquefaction LLC
Senior Sec. Notes
5.63% due 02/01/2021.......................... 700,000 739,375
Sabine Pass Liquefaction LLC
Senior Sec. Notes
6.25% due 03/15/2022.......................... 200,000 218,500
----------
5,261,240
----------
Principal Value
Security Description Amount (Note 2)
Private Equity -- 0.3%
Icahn Enterprises LP/Icahn Enterprises
Finance Corp.
Company Guar. Notes
5.88% due 02/01/2022.................... $1,120,000 $1,075,200
----------
Racetracks -- 0.2%
GLP Capital LP/GLP Financing II, Inc.
Company Guar. Notes
4.88% due 11/01/2020.................... 610,000 657,275
----------
Radio -- 0.3%
Sirius XM Radio, Inc.
Company Guar. Notes
5.38% due 07/15/2026*................... 1,035,000 1,063,463
----------
Real Estate Investment Trusts -- 0.9%
Corrections Corp. of America
Company Guar. Notes
5.00% due 10/15/2022.................... 615,000 556,575
ESH Hospitality, Inc.
Company Guar. Notes
5.25% due 05/01/2025*................... 780,000 779,025
iStar Financial, Inc.
Senior Notes
5.00% due 07/01/2019.................... 1,000,000 997,380
MGP Escrow Issuer LLC/MGP
Escrow Co-Issuer, Inc.
Company Guar. Notes
5.63% due 05/01/2024*................... 280,000 303,716
MPT Operating Partnership LP/MPT
Finance Corp.
Company Guar. Notes
5.25% due 08/01/2026.................... 50,000 51,875
MPT Operating Partnership LP/MPT
Finance Corp.
Company Guar. Notes
6.38% due 03/01/2024.................... 315,000 341,775
----------
3,030,346
----------
Rental Auto/Equipment -- 0.2%
United Rentals North America, Inc.
Company Guar. Notes
5.50% due 07/15/2025.................... 675,000 688,500
----------
Resort/Theme Parks -- 0.2%
Six Flags Entertainment Corp.
Company Guar. Notes
4.88% due 07/31/2024*................... 600,000 606,000
----------
Retail-Drug Store -- 0.3%
Rite Aid Corp.
Company Guar. Notes
6.13% due 04/01/2023*................... 130,000 140,292
Rite Aid Corp.
Company Guar. Notes
6.75% due 06/15/2021.................... 730,000 771,063
----------
911,355
----------
Retail-Hypermarkets -- 0.2%
Tops Holding LLC /Tops Markets II Corp.
Senior Sec. Notes
8.00% due 06/15/2022*................... 670,000 603,000
----------
55
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Retail-Perfume & Cosmetics -- 0.2%
Sally Holdings LLC/Sally Capital, Inc.
Company Guar. Notes
5.63% due 12/01/2025....................... $ 500,000 $ 538,125
----------
Retail-Propane Distribution -- 0.0%
AmeriGas Finance LLC/AmeriGas
Finance Corp.
Company Guar. Notes
7.00% due 05/20/2022....................... 145,000 153,338
----------
Retail-Restaurants -- 0.3%
Landry's, Inc.
Senior Notes
6.75% due 10/15/2024*...................... 340,000 345,950
Landry's, Inc.
Company Guar. Notes
9.38% due 05/01/2020*...................... 700,000 734,195
----------
1,080,145
----------
Rubber/Plastic Products -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007+(1)(2)(3)(5)......... 550,000 0
----------
Security Services -- 0.5%
ADT Corp.
Senior Sec. Notes
6.25% due 10/15/2021....................... 845,000 918,937
Prime Security Services Borrower LLC/Prime
Finance, Inc.
Sec. Notes
9.25% due 05/15/2023*...................... 785,000 855,650
----------
1,774,587
----------
Specified Purpose Acquisitions -- 0.4%
Argos Merger Sub, Inc.
Senior Notes
7.13% due 03/15/2023*...................... 1,135,000 1,188,913
----------
Steel-Producers -- 0.2%
AK Steel Corp.
Senior Sec. Notes
7.50% due 07/15/2023....................... 495,000 527,175
United States Steel Corp.
Senior Notes
7.38% due 04/01/2020....................... 76,000 75,620
----------
602,795
----------
Telecom Services -- 0.1%
Qwest Corp.
Senior Notes
7.25% due 09/15/2025....................... 415,000 454,146
----------
Telephone-Integrated -- 1.1%
CenturyLink, Inc.
Senior Notes
5.80% due 03/15/2022....................... 620,000 635,500
CenturyLink, Inc.
Senior Notes
7.50% due 04/01/2024....................... 1,020,000 1,088,850
Frontier Communications Corp.
Senior Notes
6.25% due 09/15/2021....................... 495,000 475,819
Principal Value
Security Description Amount (Note 2)
Telephone-Integrated (continued)
Frontier Communications Corp.
Senior Notes
10.50% due 09/15/2022........... $ 110,000 $ 116,600
Level 3 Financing, Inc.
Company Guar. Notes
5.25% due 03/15/2026*........... 580,000 598,850
Windstream Services LLC
Company Guar. Notes
7.75% due 10/15/2020............ 805,000 819,087
------------
3,734,706
------------
Television -- 0.1%
Sinclair Television Group, Inc.
Company Guar. Notes
5.13% due 02/15/2027*........... 300,000 293,250
------------
Total U.S. Corporate Bonds & Notes
(cost $111,095,813)............. 112,255,420
------------
FOREIGN CORPORATE BONDS & NOTES -- 8.5%
Building Products-Cement -- 0.2%
Cemex SAB de CV
Senior Sec. Notes
5.70% due 01/11/2025*........... 510,000 516,222
Cemex SAB de CV
Senior Sec. Notes
7.75% due 04/16/2026*........... 200,000 221,900
------------
738,122
------------
Cable/Satellite TV -- 1.7%
Altice Financing SA
Senior Sec. Notes
6.63% due 02/15/2023*........... 400,000 410,500
Altice Finco SA
Senior Sec. Notes
9.88% due 12/15/2020*........... 455,000 483,438
Altice Luxembourg SA
Company Guar. Notes
7.75% due 05/15/2022*........... 1,100,000 1,174,250
Numericable-SFR SA
Senior Sec. Notes
6.00% due 05/15/2022*........... 1,200,000 1,224,000
Numericable-SFR SA
Senior Sec. Notes
7.38% due 05/01/2026*........... 910,000 930,193
UPCB Finance VI, Ltd.
Senior Sec. Notes
6.88% due 01/15/2022*........... 64,000 67,040
Virgin Media Finance PLC
Company Guar. Notes
6.00% due 10/15/2024*........... 400,000 414,004
Ziggo Secured Finance BV
Senior Sec. Notes
5.50% due 01/15/2027*........... 995,000 993,756
------------
5,697,181
------------
Chemicals-Diversified -- 0.4%
INEOS Group Holdings SA
Company Guar. Notes
5.63% due 08/01/2024*........... 955,000 937,094
56
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Chemicals-Diversified (continued)
INEOS Group Holdings SA
Sec. Notes
5.88% due 02/15/2019*............... $450,000 $ 459,000
----------
1,396,094
----------
Containers-Metal/Glass -- 0.2%
Ardagh Packaging Finance
PLC/Ardagh Holdings USA, Inc.
Company Guar. Notes
6.00% due 06/30/2021*............... 365,000 375,037
Ardagh Packaging Finance
PLC/Ardagh Holdings USA, Inc.
Company Guar. Notes
7.25% due 05/15/2024*............... 260,000 276,900
Ardagh Packaging Finance
PLC/Ardagh MP Holdings USA, Inc.
Senior Notes
7.00% due 11/15/2020*............... 51,176 52,840
----------
704,777
----------
Diversified Manufacturing Operations -- 0.4%
Bombardier, Inc.
Senior Notes
4.75% due 04/15/2019*............... 585,000 568,912
Bombardier, Inc.
Senior Notes
4.75% due 04/15/2019................ 515,000 500,837
Bombardier, Inc.
Senior Notes
6.13% due 01/15/2023*............... 305,000 270,688
----------
1,340,437
----------
Diversified Minerals -- 0.4%
FMG Resources August 2006 Pty, Ltd.
Senior Sec. Notes
9.75% due 03/01/2022*............... 410,000 475,600
Teck Resources, Ltd.
Company Guar. Notes
4.75% due 01/15/2022................ 600,000 588,000
Teck Resources, Ltd.
Company Guar. Notes
8.00% due 06/01/2021*............... 90,000 97,875
Teck Resources, Ltd.
Company Guar. Notes
8.50% due 06/01/2024*............... 240,000 274,800
----------
1,436,275
----------
Finance-Commercial -- 0.1%
Dana Financing Luxembourg SARL
Company Guar. Notes
6.50% due 06/01/2026*............... 185,000 193,880
----------
Finance-Leasing Companies -- 0.9%
AerCap Ireland Capital, Ltd./AerCap
Global Aviation Trust
Company Guar. Notes
4.25% due 07/01/2020................ 170,000 176,375
AerCap Ireland Capital, Ltd./AerCap
Global Aviation Trust
Company Guar. Notes
4.50% due 05/15/2021................ 860,000 899,775
Principal Value
Security Description Amount (Note 2)
Finance-Leasing Companies (continued)
AerCap Ireland Capital, Ltd./AerCap
Global Aviation Trust
Company Guar. Notes
4.63% due 10/30/2020........................ $ 475,000 $ 498,750
Aircastle, Ltd.
Senior Notes
5.00% due 04/01/2023........................ 1,425,000 1,492,687
----------
3,067,587
----------
Gambling (Non-Hotel) -- 0.3%
International Game Technology PLC
Senior Sec. Notes
6.25% due 02/15/2022*....................... 900,000 954,000
----------
Machinery-Farming -- 0.2%
CNH Industrial NV
Senior Notes
4.50% due 08/15/2023........................ 750,000 756,375
----------
Medical Products -- 0.1%
Mallinckrodt International Finance
SA/Mallinckrodt CB LLC
Company Guar. Notes
5.63% due 10/15/2023*....................... 465,000 445,238
----------
Medical-Biomedical/Gene -- 0.2%
Concordia International Corp.
Company Guar. Notes
7.00% due 04/15/2023*....................... 1,005,000 645,713
----------
Medical-Drugs -- 0.4%
Capsugel SA
Senior Notes
7.00% due 05/15/2019*(6).................... 573,000 574,432
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
5.38% due 03/15/2020*....................... 490,000 453,250
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
6.75% due 08/15/2018*....................... 435,000 437,175
----------
1,464,857
----------
Metal-Diversified -- 0.2%
Vedanta Resources PLC
Senior Notes
8.25% due 06/07/2021*....................... 800,000 808,000
----------
Metal-Iron -- 0.2%
Vale Overseas, Ltd.
Company Guar. Notes
5.88% due 06/10/2021........................ 460,000 481,620
----------
Oil & Gas Drilling -- 0.4%
Transocean, Inc.
Company Guar. Notes
6.80% due 12/15/2016........................ 625,000 627,931
Transocean, Inc.
Company Guar. Notes
6.80% due 03/15/2038........................ 520,000 340,600
Transocean, Inc.
Company Guar. Notes
9.00% due 07/15/2023*....................... 335,000 324,531
----------
1,293,062
----------
57
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Oil Companies-Exploration & Production -- 0.4%
Alberta Energy Co., Ltd.
Senior Notes
8.13% due 09/15/2030............... $ 480,000 $ 567,348
Encana Corp.
Senior Notes
3.90% due 11/15/2021............... 625,000 626,237
----------
1,193,585
----------
Oil Companies-Integrated -- 0.4%
Petrobras Global Finance BV
Company Guar. Notes
8.38% due 05/23/2021............... 85,000 92,862
Petrobras Global Finance BV
Company Guar. Notes
8.75% due 05/23/2026............... 600,000 663,000
YPF Sociedad Anonima
Senior Notes
8.50% due 03/23/2021*.............. 580,000 647,280
----------
1,403,142
----------
Oil-Field Services -- 0.1%
Weatherford International, Ltd.
Company Guar. Notes
8.25% due 06/15/2023............... 485,000 478,938
----------
Paper & Related Products -- 0.4%
Cascades, Inc.
Company Guar. Notes
5.50% due 07/15/2022*.............. 675,000 685,969
Cascades, Inc.
Company Guar. Notes
5.75% due 07/15/2023*.............. 530,000 536,625
----------
1,222,594
----------
Satellite Telecom -- 0.2%
Intelsat Jackson Holdings SA
Company Guar. Notes
5.50% due 08/01/2023............... 240,000 166,200
Intelsat Jackson Holdings SA
Company Guar. Notes
7.25% due 04/01/2019............... 695,000 559,041
----------
725,241
----------
Semiconductor Components-Integrated Circuits -- 0.3%
NXP BV/NXP Funding LLC
Company Guar. Notes
4.13% due 06/01/2021*.............. 625,000 669,531
NXP BV/NXP Funding LLC
Company Guar. Notes
4.63% due 06/01/2023*.............. 200,000 218,750
----------
888,281
----------
Special Purpose Entity -- 0.0%
Hellas Telecommunications
Luxembourg II SCA FRS
Sub. Notes
6.00% due 01/15/2015+*(1)(2)(3)(5). 1,025,000 0
----------
Principal Value
Security Description Amount (Note 2)
Steel-Producers -- 0.4%
ArcelorMittal
Senior Notes
6.13% due 06/01/2025.......................... $ 745,000 $ 812,050
BlueScope Steel Finance, Ltd./BlueScope Steel
Finance USA LLC
Company Guar. Notes
6.50% due 05/15/2021*......................... 490,000 518,175
-----------
1,330,225
-----------
Total Foreign Corporate Bonds & Notes
(cost $29,127,558)............................ 28,665,224
-----------
LOANS(7)(8)(9) -- 56.5%
Advertising Services -- 0.1%
Advantage Sales & Marketing, Inc. FRS
2nd Lien
7.50% due 07/25/2022.......................... 258,000 244,670
-----------
Aerospace/Defense-Equipment -- 0.8%
Silver II Borrower SCA FRS
BTL
4.00% due 12/13/2019.......................... 900,000 840,150
TransDigm, Inc. FRS
BTL
3.75% to 3.84% due 06/09/2023................. 475,117 474,721
TransDigm, Inc. FRS
BTL-D
3.84% due 06/04/2021.......................... 1,469,925 1,466,710
-----------
2,781,581
-----------
Airlines -- 1.1%
Air Canada FRS
BTL-B
3.50% due 09/21/2023.......................... 482,000 482,602
American Airlines, Inc. FRS
BTL
3.25% due 06/27/2020.......................... 1,309,059 1,310,900
American Airlines, Inc. FRS
BTL-B
3.25% due 10/10/2021.......................... 479,160 479,959
American Airlines, Inc. FRS
BTL
3.50% due 04/28/2023.......................... 222,000 222,451
United Airlines, Inc. FRS
BTL-B1
3.50% due 09/15/2021.......................... 1,341,608 1,342,278
-----------
3,838,190
-----------
Applications Software -- 1.1%
Deltek, Inc. FRS
1st Lien
5.00% due 06/25/2022.......................... 691,586 693,603
Deltek, Inc. FRS
BTL-B
9.50% due 06/25/2023.......................... 247,000 248,852
Emdeon, Inc. FRS
BTL-B2
3.75% due 11/02/2018.......................... 835,182 836,017
58
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Applications Software (continued)
Mitchell International, Inc. FRS
BTL
4.50% due 10/13/2020....................... $ 871,949 $ 870,424
Mitchell International, Inc. FRS
2nd Lien
8.50% due 10/11/2021....................... 160,000 155,600
SS&C European Holdings SARL FRS
BTL-A1
3.27% due 07/08/2020....................... 46,922 46,453
SS&C European Holdings SARL FRS
BTL-B2
4.00% due 07/08/2022....................... 93,366 94,016
SS&C Technologies Holdings Europe SARL FRS
BTL-A2
3.27% due 07/08/2020....................... 72,778 72,050
SS&C Technologies, Inc. FRS
BTL-B1
4.00% due 07/08/2022....................... 751,312 756,544
----------
3,773,559
----------
Auction Houses/Art Dealers -- 0.3%
KAR Auction Services, Inc. FRS
BTL-B3
4.38% due 03/09/2023....................... 1,086,540 1,100,801
----------
Auto-Heavy Duty Trucks -- 0.3%
Navistar, Inc. FRS
BTL-B
6.50% due 08/07/2020....................... 1,025,000 1,025,321
----------
Auto/Truck Parts & Equipment-Original -- 1.0%
Cooper-Standard Automotive, Inc. FRS
BTL
4.00% due 04/04/2021....................... 785,930 789,040
Federal-Mogul Holdings Corp. FRS
BTL-C
4.75% due 04/15/2021....................... 1,240,351 1,196,008
MPG Holdco I, Inc. FRS
BTL-B
3.75% due 10/20/2021....................... 691,837 692,578
TI Group Automotive Systems LLC FRS
Term B
4.50% due 06/30/2022....................... 701,910 703,372
----------
3,380,998
----------
Bicycle Manufacturing -- 0.2%
SRAM LLC FRS
1st Lien
4.00% to 5.50% due 04/10/2020.............. 699,025 678,055
----------
Bloodstock Services -- 0.1%
NVA Holdings, Inc. FRS
1st Lien
4.75% due 08/14/2021....................... 27,510 27,487
NVA Holdings, Inc. FRS
BTL
5.50% due 08/14/2021....................... 362,180 362,633
----------
390,120
----------
Principal Value
Security Description Amount (Note 2)
Broadcast Services/Program -- 2.1%
iHeartCommunications, Inc. FRS
BTL-D
7.27% due 01/30/2019.................. $1,555,000 $1,190,223
Nexstar Broadcasting, Inc. FRS
BTL-B
3.00% due 09/21/2023.................. 1,505,773 1,512,669
Univision Communications, Inc. FRS
BTL
4.00% due 03/01/2020.................. 3,830,339 3,833,932
Univision Communications, Inc. FRS
BTL-C4
4.00% due 03/01/2020.................. 545,631 546,086
----------
7,082,910
----------
Building & Construction Products-Misc. -- 0.7%
Builders FirstSource, Inc. FRS
BTL-B
4.75% due 08/11/2022.................. 532,898 535,340
CPG International, Inc. FRS
BTL
4.75% due 09/30/2020.................. 725,649 726,556
Summit Materials Co. I LLC FRS
BTL
4.00% due 07/17/2022.................. 1,039,838 1,042,763
----------
2,304,659
----------
Building & Construction-Misc. -- 0.6%
American Builders Contractors FRS
BTL-B
3.50% due 09/23/2023.................. 261,681 262,171
Brock Holdings III, Inc. FRS
1st Lien
7.00% due 03/16/2017.................. 306,470 301,873
Floor and Decor Outlet of America FRS
BTL
5.25% due 09/30/2023.................. 920,000 920,000
HD Supply, Inc. FRS
BTL-B
2.75% due 10/16/2023.................. 683,000 683,569
----------
2,167,613
----------
Building Products-Cement -- 0.7%
Headwaters, Inc. FRS
BTL-B1
4.00% due 03/24/2022.................. 1,736,513 1,740,854
Quikrete Holdings, Inc. FRS
1st Lien
4.00% due 09/28/2020.................. 600,000 603,500
----------
2,344,354
----------
Building-Residential/Commercial -- 0.0%
TOUSA, Inc.
Escrow Loans
12.25% due 08/15/2011+(1)(2).......... 2,037,810 0
----------
Cable/Satellite TV -- 1.1%
Charter Communications Operating
LLC FRS
BTL
3.25% due 08/24/2021.................. 354,220 355,272
59
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Cable/Satellite TV (continued)
Charter Communications Operating
LLC FRS
BTL
3.50% due 01/24/2023............................ $ 285,565 $ 287,231
CSC Holdings LLC FRS
BTL-B
5.00% due 10/11/2024............................ 599,418 600,167
Neptune Finco Corp. FRS
BTL
5.00% due 10/09/2022............................ 987,525 987,525
Virgin Media Investment Holdings, Ltd.
FRS
BTL-F
3.65% due 06/30/2023............................ 974,991 978,240
Ziggo Secured Finance Partnership FRS
BTL-D
3.53% due 08/31/2024............................ 400,000 399,917
----------
3,608,352
----------
Casino Hotels -- 1.0%
Boyd Gaming Corp. FRS
BTL-B2
4.00% due 09/15/2023............................ 248,000 249,364
Boyd Gaming Corp. FRS
BTL-B
3.53% due 08/14/2020............................ 205,317 205,958
Caesars Entertainment Resort Properties LLC FRS
BTL-B
7.00% due 10/11/2020............................ 1,005,000 998,719
CityCenter Holdings LLC FRS
BTL-B
4.25% due 10/16/2020............................ 1,044,331 1,050,206
Station Casinos LLC FRS
BTL-B
3.75% due 06/08/2023............................ 1,012,463 1,015,879
----------
3,520,126
----------
Casino Services -- 0.2%
Eldorado Resorts, Inc. FRS
BTL-B
4.25% due 07/23/2022............................ 329,825 329,413
Graton Economic Development Authority FRS
BTL-B
4.75% due 09/01/2022............................ 338,545 339,391
----------
668,804
----------
Cellular Telecom -- 0.2%
T-Mobile USA, Inc. FRS
BTL-B
3.50% due 11/09/2022............................ 580,613 584,345
----------
Chemicals-Diversified -- 0.7%
Ineos US Finance LLC FRS
BTL-B
3.75% due 05/04/2018............................ 1,091,556 1,093,830
Ineos US Finance LLC FRS
BTL
4.25% due 03/31/2022............................ 1,203,096 1,206,533
----------
2,300,363
----------
Principal Value
Security Description Amount (Note 2)
Chemicals-Plastics -- 0.2%
PolyOne Corp. FRS
BTL-B1
3.50% due 11/14/2022......................... $ 673,686 $ 676,634
----------
Chemicals-Specialty -- 1.1%
Huntsman International LLC FRS
BTL-B
4.25% due 04/01/2023......................... 821,870 827,520
Kraton Polymers LLC FRS
BTL
6.00% due 01/06/2022......................... 900,000 905,766
MacDermid, Inc. FRS
BTL-B3
5.50% due 06/07/2020......................... 895,477 897,876
PQ Corp. FRS
BTL
5.75% due 11/04/2022......................... 303,240 304,946
Royal Holdings, Inc. FRS
1st Lien
4.50% due 06/19/2022......................... 615,213 616,904
----------
3,553,012
----------
Commercial Services -- 1.7%
Brickman Group, Ltd. FRS
1st Lien
4.00% due 12/18/2020......................... 1,385,217 1,380,023
Brickman Group, Ltd. FRS
2nd Lien
7.50% due 12/17/2021......................... 776,000 768,240
CPI Acquisition, Inc. FRS
BTL-B
5.50% due 08/17/2022......................... 1,310,685 1,279,556
ServiceMaster Co. LLC FRS
BTL-B
4.25% due 07/01/2021......................... 2,421,740 2,445,202
----------
5,873,021
----------
Commercial Services-Finance -- 0.8%
Harland Clarke Holdings Corp. FRS
BTL-B-4
6.99% due 08/04/2019......................... 303,694 297,114
TransUnion LLC FRS
BTL-B2
3.59% due 04/09/2021......................... 2,368,097 2,374,017
----------
2,671,131
----------
Computer Services -- 0.7%
Abacus Innovations Corp. FRS
BTL-B
3.27% due 08/16/2023......................... 714,000 717,570
Harland Clarke Holdings Corp. FRS
BTL-B5
7.00% due 12/31/2019......................... 439,959 430,610
Presidio, Inc. FRS
BTL
5.25% due 02/02/2022......................... 615,054 613,516
Science Applications International Corp. FRS
BTL-B
3.25% due 05/04/2022......................... 548,235 551,319
----------
2,313,015
----------
60
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Computers-Integrated Systems -- 0.6%
Kronos, Inc. FRS
1st Lien
4.50% due 10/30/2019..................... $1,340,230 $1,342,743
Kronos, Inc. FRS
2nd Lien
9.75% due 04/30/2020..................... 564,396 574,555
----------
1,917,298
----------
Computers-Memory Devices -- 0.0%
Western Digital Corp. FRS
BTL-B1
4.50% due 04/29/2023..................... 90,773 91,737
----------
Computers-Periphery Equipment -- 0.7%
CDW LLC FRS
BTL
3.00% due 08/04/2023..................... 2,463,254 2,467,873
----------
Consulting Services -- 0.2%
Vertiv Co. FRS
BTL-B
6.00% due 09/29/2023..................... 619,000 605,073
----------
Consumer Products-Misc. -- 0.8%
Dell, Inc. FRS
BTL-B
4.00% due 09/07/2023..................... 1,770,000 1,779,588
Spectrum Brands, Inc. FRS
1st Lien
3.50% to 5.25% due 06/23/2022............ 809,467 811,390
----------
2,590,978
----------
Containers-Metal/Glass -- 1.2%
Anchor Glass Container Corp. FRS
1st Lien
4.75% due 07/01/2022..................... 1,886,263 1,896,166
Ardagh Holdings USA, Inc. FRS
Delayed Draw
4.00% due 12/17/2019..................... 630,067 631,248
Berlin Packaging LLC FRS
1st Lien
4.50% due 10/01/2021..................... 540,573 541,474
Owens-Brockway Glass Container, Inc. FRS
BTL-B
3.50% due 09/01/2022..................... 974,667 979,541
----------
4,048,429
----------
Containers-Paper/Plastic -- 0.8%
Berry Plastics Group, Inc. FRS
BTL-D
3.50% due 02/08/2020..................... 1,190,330 1,191,074
Reynolds Group Holdings, Inc. FRS
BTL
4.25% due 02/05/2023..................... 1,458,115 1,461,926
----------
2,653,000
----------
Cosmetics & Toiletries -- 0.3%
Coty, Inc. FRS
BTL
3.75% due 10/27/2022..................... 290,208 290,450
Galleria Co. FRS
BTL-B
3.75% due 01/26/2023..................... 583,333 585,156
----------
875,606
----------
Principal Value
Security Description Amount (Note 2)
Data Processing/Management -- 1.5%
CCC Information Services, Inc. FRS
Term Loan B
4.00% due 12/20/2019.................... $1,037,838 $1,035,244
First Data Corp. FRS
BTL
4.28% due 07/08/2022.................... 651,000 654,526
First Data Corp. FRS
BTL
4.53% due 03/24/2021.................... 3,322,167 3,340,289
----------
5,030,059
----------
Diagnostic Equipment -- 0.4%
Ortho-Clinical Diagnostics, Inc. FRS
BTL-B
4.75% due 06/30/2021.................... 1,346,906 1,318,284
----------
Diagnostic Kits -- 0.1%
Alere, Inc. FRS
BTL-B
4.25% due 06/18/2022.................... 452,776 448,688
----------
Dialysis Centers -- 0.6%
DaVita HealthCare Partners, Inc. FRS
BTL-B
3.50% due 06/24/2021.................... 1,469,925 1,476,356
U.S. Renal Care, Inc. FRS
BTL
5.25% due 12/31/2022.................... 612,188 587,700
----------
2,064,056
----------
Disposable Medical Products -- 0.1%
Sterigenics-Nordion Holdings LLC FRS
BTL-B
4.25% due 05/15/2022.................... 291,060 290,696
----------
Distribution/Wholesale -- 1.3%
American Builders & Contractors
Supply Co., Inc. FRS
BTL-B
3.50% due 04/16/2020.................... 1,770,643 1,773,741
HD Supply, Inc. FRS
BTL-B
3.75% due 08/13/2021.................... 1,070,255 1,071,815
Spin Holdco, Inc. FRS
1st Lien
4.25% due 11/14/2019.................... 488,781 484,963
Univar, Inc. FRS
BTL
4.25% due 07/01/2022.................... 1,035,540 1,035,325
----------
4,365,844
----------
Diversified Minerals -- 0.3%
FMG Resources August 2006 Pty, Ltd. FRS
BTL-B
3.75% due 06/30/2019.................... 1,123,095 1,121,691
----------
Educational Software -- 1.0%
Blackboard, Inc. FRS
BTL-B3
4.75% due 10/04/2018.................... 1,145,000 1,139,513
Blackboard, Inc. FRS
BTL-B4
6.00% due 06/30/2021.................... 1,490,000 1,478,825
61
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Educational Software (continued)
Cengage Learning, Inc. FRS
BTL-B
5.25% due 06/07/2023............................ $ 737,153 $ 736,099
----------
3,354,437
----------
Electric-Generation -- 0.4%
APLP Holdings LP FRS
BTL
6.00% due 04/13/2023............................ 1,307,910 1,312,269
----------
Electric-Integrated -- 0.8%
Dayton Power & Light Co. FRS
BTL-B
4.00% due 08/24/2022............................ 154,000 155,540
Energy Future Intermediate Holding Co. LLC FRS
DIP
4.25% due 12/19/2016............................ 1,150,000 1,152,395
Texas Competitive Electric Holdings Co. LLC FRS
DIP-B
5.00% due 10/17/2017(3)......................... 783,673 787,788
Texas Competitive Electric Holdings Co. LLC FRS
DIP-C
5.00% due 10/17/2017(3)......................... 179,082 180,022
Texas Competitive Electric Holdings Co. LLC FRS
BTL
5.00% due 10/10/2017+(3)(4)..................... 1,372,835 398,336
----------
2,674,081
----------
Electronic Components-Semiconductors -- 0.6%
Avago Technologies Cayman Finance, Ltd. FRS
BTL-B3
3.52% due 02/01/2023............................ 1,343,366 1,358,899
NXP NV FRS
BTL-F
3.40% due 12/07/2020............................ 331,118 332,463
ON Semiconductor Corp. FRS
BTL-B
5.25% due 03/31/2023............................ 220,000 221,161
----------
1,912,523
----------
Enterprise Software/Service -- 1.3%
Applied Systems, Inc. FRS
2nd Lien
7.50% due 01/24/2022............................ 467,388 468,946
BMC Software Finance, Inc. FRS
BTL
5.00% due 09/10/2020............................ 1,045,000 1,006,248
Donnelley Financial Solutions, Inc. FRS
BTL-B
5.00% due 09/30/2023............................ 360,000 360,900
Infor US, Inc. FRS
BTL-B5
3.75% due 06/03/2020............................ 1,582,500 1,570,067
Sophia LP FRS
BTL-B
4.75% due 09/30/2022............................ 835,506 835,158
----------
4,241,319
----------
Principal Value
Security Description Amount (Note 2)
Extended Service Contracts -- 0.5%
Sedgwick Claims Management Services, Inc. FRS
1st Lien
3.75% due 03/01/2021.......................... $1,137,893 $1,126,039
Sedgwick Claims Management Services, Inc. FRS
BTL
5.25% due 03/01/2021.......................... 129,675 129,999
Sedgwick Claims Management Services, Inc. FRS
2nd Lien
6.75% due 02/28/2022.......................... 595,000 590,538
----------
1,846,576
----------
Filtration/Separation Products -- 0.1%
Filtration Group, Inc. FRS
1st Lien
4.25% due 11/21/2020.......................... 408,027 408,741
----------
Finance-Leasing Companies -- 0.3%
Delos Finance SARL FRS
BTL
3.59% due 03/06/2021.......................... 923,000 928,307
----------
Finance-Mortgage Loan/Banker -- 0.5%
Walter Investment Management Corp. FRS
BTL-B
4.75% due 12/19/2020.......................... 1,681,839 1,538,883
----------
Finance-Other Services -- 0.5%
Omnova Solutions, Inc. FRS
BTL-B
5.25% due 08/28/2023.......................... 1,578,000 1,570,110
----------
Financial Guarantee Insurance -- 0.2%
VF Holdings Corp. FRS
BTL-1st Lien
4.75% due 06/30/2023.......................... 536,000 537,089
----------
Food-Baking -- 0.4%
Hostess Brands LLC FRS
1st Lien
4.50% due 08/03/2022.......................... 821,700 825,368
Hostess Brands LLC FRS
2nd Lien
8.50% due 08/03/2023.......................... 610,000 611,144
----------
1,436,512
----------
Food-Catering -- 0.3%
Aramark Services, Inc. FRS
BTL-F
3.34% due 02/24/2021.......................... 908,690 912,098
----------
Food-Confectionery -- 0.3%
Amplify Snack Brands, Inc. FRS
1st Lien
6.50% due 08/24/2023.......................... 980,000 971,834
----------
Food-Dairy Products -- 0.4%
ASP MSG Acquisition Co., Inc. FRS
BTL
6.00% due 08/16/2023.......................... 1,007,000 1,010,776
Chobani LLC FRS
1st Lien
5.25% due 09/30/2023.......................... 202,000 200,990
----------
1,211,766
----------
62
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Food-Misc./Diversified -- 0.8%
Dole Food Co., Inc. FRS
BTL-B
4.50% to 6.00% due 11/01/2018............ $ 529,063 $ 529,945
Pinnacle Foods Finance LLC FRS
BTL-H
3.25% due 04/29/2020..................... 2,062,926 2,069,925
Pinnacle Foods Finance LLC FRS
BTL-I
3.28% due 01/13/2023..................... 58,558 58,913
----------
2,658,783
----------
Food-Retail -- 0.4%
Albertsons LLC FRS
BTL-B
4.50% due 08/25/2021..................... 720,626 724,590
Albertsons LLC FRS
BTL-B
4.75% due 12/21/2022..................... 466,658 470,449
----------
1,195,039
----------
Gambling (Non-Hotel) -- 0.7%
Mohegan Tribal Gaming Authority FRS
BTL-B
5.50% due 06/15/2018..................... 821,314 819,004
Mohegan Tribal Gaming Authority FRS
BTL-B
6.50% due 09/28/2023..................... 850,000 844,688
Scientific Games International, Inc. FRS
BTL-B2
6.00% due 10/01/2021..................... 720,829 721,392
----------
2,385,084
----------
Health Care Providers & Services -- 0.1%
Press Ganey Holdings, Inc. FRS
BTL
3.25% due 09/20/2023..................... 172,000 172,224
----------
Hotels/Motels -- 1.6%
Hilton Worldwide Finance LLC FRS
BTL-B2
3.03% to 3.21% due 10/25/2023............ 4,784,308 4,815,918
Hilton Worldwide Finance LLC FRS
BTL
3.50% due 10/26/2020..................... 468,006 469,343
----------
5,285,261
----------
Human Resources -- 0.2%
Team Health, Inc. FRS
BLT-B
3.84% due 11/23/2022..................... 714,609 717,735
----------
Independent Power Producers -- 0.9%
Calpine Corp. FRS
BTL-B5
3.59% due 05/27/2022..................... 1,614,563 1,617,590
NRG Energy, Inc. FRS
BTL-B
3.50% due 06/30/2023..................... 1,409,248 1,411,597
----------
3,029,187
----------
Principal Value
Security Description Amount (Note 2)
Insurance-Property/Casualty -- 0.2%
Asurion LLC FRS
BTL-B2
4.25% due 07/08/2020................... $ 406,305 $ 406,739
Asurion LLC FRS
BTL-B-1
5.00% due 05/24/2019................... 78,518 78,682
Asurion LLC FRS
BTL-B4
5.00% due 08/04/2022................... 351,450 352,768
----------
838,189
----------
Investment Companies -- 0.5%
RPI Finance Trust FRS
BTL-B4
3.59% due 11/09/2020................... 743,647 746,170
UFC Holdings LLC FRS
BTL
5.00% due 08/18/2023................... 764,000 768,229
----------
1,514,399
----------
Investment Management/Advisor Services -- 0.4%
AlixPartners LLP FRS
BTL-B
4.50% due 07/28/2022................... 1,322,640 1,323,192
----------
Leisure Games -- 0.5%
Aristocrat International Pty, Ltd. FRS
BTL-B1
3.50% due 10/20/2021................... 1,728,469 1,732,790
----------
Machinery-General Industrial -- 1.1%
Aspen Merger Sub, Inc. FRS
1st Lien
5.25% due 09/27/2023................... 461,000 463,688
Aspen Merger Sub, Inc. FRS
2nd Lien
9.75% due 09/27/2024................... 330,000 326,700
Gardner Denver, Inc. FRS
BTL
4.25% due 07/30/2020................... 1,174,780 1,136,893
RBS Global, Inc. FRS
1st Lien
4.00% due 08/21/2020................... 1,752,616 1,751,156
----------
3,678,437
----------
Machinery-Pumps -- 0.2%
NN, Inc. FRS
BTL-B
5.75% due 10/19/2022................... 726,332 726,786
----------
Medical Labs & Testing Services -- 0.7%
American Renal Holdings, Inc. FRS
1st Lien
4.75% due 09/20/2019................... 345,160 341,277
inVentiv Health, Inc. FRS
BTL-B
4.75% due 09/28/2023................... 756,000 756,227
inVentiv Health, Inc. FRS
BTL-B4
7.75% due 05/15/2018................... 590,000 590,369
Quorum Health Corp. FRS
BTL
6.75% due 04/29/2022................... 567,150 549,249
----------
2,237,122
----------
63
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Medical Products -- 0.3%
DJO Finance LLC FRS
BTL
4.25% due 06/08/2020............................ $ 374,220 $ 366,385
Greatbatch, Ltd. FRS
BTL-B
5.25% due 10/27/2022............................ 700,705 690,895
----------
1,057,280
----------
Medical-Drugs -- 0.9%
Capsugel Holdings US, Inc. FRS
BTL
4.00% due 07/31/2021............................ 796,000 796,711
Endo Lux Finance Co. FRS
BTL
3.75% due 09/26/2022............................ 647,110 645,492
Quintiles Transnational Corp. FRS
BTL-B
3.25% due 05/12/2022............................ 148,125 147,940
Valeant Pharmaceuticals International, Inc. FRS
BTL-BE
5.25% due 08/05/2020............................ 678,862 678,392
Valeant Pharmaceuticals International, Inc. FRS
BTL-B
5.50% due 04/01/2022............................ 616,189 617,575
----------
2,886,110
----------
Medical-Generic Drugs -- 0.2%
Amneal Pharmaceuticals LLC FRS
BTL-B
4.50% to 6.00% due 11/01/2019................... 719,050 718,151
----------
Medical-HMO -- 0.1%
MultiPlan, Inc. FRS
BTL-B
5.00% due 06/07/2023............................ 417,153 422,144
----------
Medical-Hospitals -- 1.8%
Acadia Healthcare Co., Inc. FRS
BTL-B
3.75% due 02/16/2023............................ 613,375 617,975
Ardent Legacy Acquisitions, Inc. FRS
BTL-B
6.50% due 08/04/2021............................ 499,950 497,450
CHS/Community Health Systems, Inc. FRS
BTL-H
4.00% due 01/27/2021............................ 1,849,338 1,814,201
CHS/Community Health Systems, Inc. FRS
BTL-F
4.08% due 12/31/2018............................ 252,174 250,630
HCA, Inc, FRS
BTL-B6
3.77% due 03/17/2023............................ 182,682 184,680
IASIS Healthcare LLC FRS
BTL-B2
4.50% due 05/03/2018............................ 992,268 980,485
National Surgical Hospitals, Inc. FRS
1st Lien
4.50% due 06/01/2022............................ 290,325 287,603
Select Medical Corp. FRS
BTL-F
6.00% to 7.50% due 03/03/2021................... 796,995 803,969
Surgery Center Holdings, Inc. FRS
BTL - 1st Lien
4.75% due 11/03/2020............................ 726,295 726,295
----------
6,163,288
----------
Principal Value
Security Description Amount (Note 2)
Medical-Outpatient/Home Medical -- 0.4%
21st Century Oncology, Inc. FRS
BTL
7.13% due 04/30/2022............... $ 513,500 $ 480,122
Amsurg Corp. FRS
BTL
3.50% due 07/16/2021............... 837,232 837,651
National Mentor Holdings, Inc. FRS
Tranche B
4.25% due 01/31/2021............... 139,496 139,540
----------
1,457,313
----------
Medical-Wholesale Drug Distribution -- 0.2%
Lanai Holdings III, Inc. FRS
BTL-B
5.75% due 08/28/2022............... 817,000 804,745
----------
Miscellaneous Manufacturing -- 0.3%
Gates Global LLC FRS
BTL-B
4.25% due 07/06/2021............... 1,028,419 1,011,891
----------
MRI/Medical Diagnostic Imaging -- 0.2%
Surgical Care Affiliates LLC FRS
BTL
4.25% due 03/17/2022............... 752,453 754,021
----------
Non-Hazardous Waste Disposal -- 0.3%
Waste Industries USA, Inc. FRS
BTL-B
3.50% due 02/27/2020............... 955,381 959,262
----------
Oil & Gas Drilling -- 0.1%
Jonah Energy LLC FRS
2nd Lien
7.50% due 05/12/2021............... 400,000 360,000
Paragon Offshore Finance Co. FRS
BTL-B
5.25% due 07/18/2021(3)............ 263,655 61,519
----------
421,519
----------
Oil Companies-Exploration & Production -- 0.8%
Chesapeake Energy Corp. FRS
BTL
8.50% due 08/23/2021............... 181,000 189,417
EP Energy LLC FRS
BTL
9.75% due 06/30/2021............... 680,000 666,400
Fieldwood Energy LLC FRS
1st Lien
7.00% due 08/31/2020............... 95,382 77,498
Fieldwood Energy LLC FRS
2nd Lien
8.38% due 09/30/2020............... 211,234 85,550
Fieldwood Energy LLC FRS
1st Lien
8.38% due 09/30/2020............... 128,766 90,136
MEG Energy Corp. FRS
BTL
3.75% due 03/31/2020............... 1,687,962 1,562,208
----------
2,671,209
----------
64
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Oil-Field Services -- 0.3%
McJunkin Red Man Corp. FRS
BTL-B
5.00% due 11/08/2019............... $1,063,678 $1,033,097
----------
Physicians Practice Management -- 0.2%
Envision Healthcare Corp. FRS
BTL-B2
4.50% due 10/28/2022............... 503,198 504,692
----------
Professional Sports -- 0.3%
Delta 2 Lux Sarl FRS
BTL-B3
4.75% due 07/30/2021............... 1,035,000 1,035,647
----------
Publishing-Books -- 0.3%
McGraw-Hill Global Education
Holdings LLC FRS
BTL
5.00% due 05/04/2022............... 877,800 881,750
----------
Racetracks -- 0.3%
Penn National Gaming, Inc. FRS
BTL-B
3.25% due 10/30/2020............... 1,091,582 1,091,126
----------
Real Estate Investment Trusts -- 0.3%
ESH Hospitality, Inc. FRS
BTL-B
3.75% due 08/30/2023............... 444,000 446,855
MGM Growth Properties Operating
Partnership LP FRS
BTL-B
4.00% due 04/25/2023............... 601,975 607,054
----------
1,053,909
----------
Real Estate Management/Services -- 1.1%
Capital Automotive LP FRS
2nd Lien
6.00% due 04/30/2020............... 955,000 958,581
DTZ US Borrower LLC FRS
1st Lien
4.25% due 11/04/2021............... 1,481,250 1,478,165
Realogy Group LLC FRS
BTL-B
3.75% due 07/20/2022............... 1,181,676 1,188,692
----------
3,625,438
----------
Research & Development -- 0.2%
Pharmaceutical Product Development
LLC FRS
BTL-B
4.25% due 08/18/2022............... 537,091 538,568
----------
Resort/Theme Parks -- 0.1%
Six Flags Theme Parks, Inc. FRS
Term B
3.34% to 5.00% due 06/30/2022...... 337,908 338,611
----------
Retail-Arts & Crafts -- 0.4%
Michaels Stores, Inc. FRS
BTL-B1
3.75% due 01/27/2023............... 1,429,781 1,433,951
----------
Principal Value
Security Description Amount (Note 2)
Retail-Auto Parts -- 0.4%
Harbor Freight Tools USA, Inc. FRS
BTL
4.00% due 08/19/2023.................. $1,358,000 $1,364,790
----------
Retail-Building Products -- 0.2%
Siteone Landscape Supply Holdings FRS
BTL-B
6.25% due 04/29/2022.................. 585,060 590,911
----------
Retail-Drug Store -- 0.2%
Rite Aid Corp. FRS
BTL-2
4.88% due 06/21/2021.................. 520,000 520,780
----------
Retail-Leisure Products -- 0.3%
Party City Holdings, Inc. FRS
BTL-B
4.25% to 4.49% due 08/19/2022......... 919,416 921,550
----------
Retail-Major Department Stores -- 0.1%
Hudson's Bay Co. FRS
BTL-B
4.75% due 09/30/2022.................. 341,014 342,122
----------
Retail-Misc./Diversified -- 0.2%
Leslie's Poolmart, Inc. FRS
Company Guar. Notes
5.25% due 08/16/2023.................. 638,750 642,742
----------
Retail-Pet Food & Supplies -- 0.2%
PetSmart, Inc. FRS
BTL-B
4.25% due 03/11/2022.................. 581,638 582,365
----------
Rubber/Plastic Products -- 0.2%
U.S. Farathane LLC FRS
BTL-B2
5.75% due 12/23/2021.................. 731,455 729,169
----------
Schools -- 0.4%
Laureate Education, Inc. FRS
BTL-B
8.16% due 03/17/2021.................. 1,438,933 1,429,339
----------
Semiconductor Components-Integrated Circuits -- 0.3%
Cypress Semiconductor Corp. FRS
BTL-B
6.50% due 07/05/2021.................. 900,000 908,250
----------
Semiconductor Equipment -- 0.1%
MKS Instruments, Inc. FRS
BTL-B1
4.25% due 05/01/2023.................. 251,851 254,841
----------
Special Purpose Entity -- 0.2%
Ipreo Holdings LLC
BTL-B
4.25% due 08/06/2021.................. 880,887 834,641
----------
Telecom Services -- 1.3%
Sable International Finance, Ltd. FRS
BTL-B1
5.59% due 12/30/2022.................. 490,875 494,250
Sable International Finance, Ltd. FRS
BTL-B2
5.83% due 12/30/2022.................. 401,625 404,386
SBA Senior Finance II LLC FRS
Term B2
3.34% due 06/10/2022.................. 828,513 827,995
65
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Telecom Services (continued)
Securus Technologies Holdings, Inc. FRS
BTL-B2
5.25% due 04/30/2020.................... $ 992,500 $ 978,233
UPC Financing Partnership FRS
BTL
4.08% due 08/31/2024.................... 926,731 930,206
West Corp. FRS
BTL-B12
3.75% due 06/17/2023.................... 684,074 687,494
------------
4,322,564
------------
Telephone-Integrated -- 1.1%
Level 3 Financing, Inc. FRS
BTL-B2
3.50% due 05/31/2022.................... 3,251,000 3,268,611
XO Communications LLC FRS
BTL
4.25% due 03/19/2021.................... 538,945 538,776
------------
3,807,387
------------
Television -- 0.5%
Mission Broadcasting, Inc. FRS
BTL-B2
3.00% due 09/26/2023.................... 64,227 64,521
Sinclair Television Group, Inc. FRS
BTL-B1
3.50% due 07/30/2021.................... 834,438 836,872
Tribune Media Co. FRS
BTL
3.75% due 12/27/2020.................... 878,485 882,878
------------
1,784,271
------------
Theaters -- 0.1%
CDS US Intermediate Holdings Inc. FRS
BTL
5.00% due 07/08/2022.................... 466,290 465,707
------------
Total Loans
(cost $190,187,049)..................... 189,486,870
------------
FOREIGN GOVERNMENT OBLIGATIONS -- 0.6%
Sovereign -- 0.6%
City of Buenos Aires Argentina
Senior Notes
7.50% due 06/01/2027*................... 250,000 272,250
Republic of Argentina
Senior Notes
6.25% due 04/22/2019*................... 435,000 461,318
Republic of Argentina
Senior Notes
6.88% due 04/22/2021*................... 430,000 468,055
Republic of Argentina
Senior Notes
7.13% due 07/06/2036*................... 755,000 799,545
------------
Total Foreign Government Obligations
(cost $1,878,888)....................... 2,001,168
------------
COMMON STOCKS+(1)(2) -- 0.0%
Multimedia -- 0.0%
Haights Cross Communication, Inc.
(cost $167,305)......................... 19,388 0
------------
PREFERRED SECURITIES -- 0.4%
Diversified Banking Institutions -- 0.4%
GMAC Capital Trust I FRS
Series 2
(cost $1,191,988)....................... 46,500 1,181,565
------------
Principal Value
Security Description Amount (Note 2)
PREFERRED SECURITIES/CAPITAL SECURITIES -- 0.9%
Banks-Super Regional -- 0.4%
KeyCorp. FRS
5.00% due 09/15/2026(10)........... $1,310,000 $ 1,290,350
SunTrust Banks, Inc. FRS
5.63% due 12/15/2019(10)........... 110,000 113,712
------------
1,404,062
------------
Diversified Banking Institutions -- 0.3%
Citigroup, Inc. FRS
Series T
6.25% due 08/15/2026(10)........... 845,000 909,431
JPMorgan Chase & Co. FRS
Series Z
5.30% due 05/01/2020(10)........... 110,000 111,513
------------
1,020,944
------------
Insurance-Multi-line -- 0.2%
Voya Financial, Inc. FRS
5.65% due 05/15/2053............... 600,000 600,000
------------
Total Preferred Securities/Capital Securities
(cost $3,004,425).................. 3,025,006
------------
WARRANTS+(1)(2)(11) -- 0.2%
Television -- 0.2%
ION Media Networks, Inc.
Expires 12/18/2016
(strike price $0.01)............... 332 401,707
ION Media Networks, Inc.
Expires 12/18/2016
(strike price $0.01)............... 328 396,867
------------
Total Warrants
(cost $0).......................... 798,574
------------
EXCHANGE-TRADED FUNDS -- 0.9%
SPDR Bloomberg Barclays High Yield
Bond ETF
(cost $3,143,877).................. 86,500 $ 3,176,280
------------
Total Long-Term Investment Securities
(cost $345,390,362)................ 346,211,528
------------
TOTAL INVESTMENTS
(cost $345,390,362)(12)............ 103.1% 346,211,528
Liabilities in excess of other assets. (3.1) (10,569,723)
---------- ------------
NET ASSETS 100.0% $335,641,805
========== ============
--------
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At September 30, 2016,
the aggregate value of these securities was $63,175,140 representing 18.8%
of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
+ Non-income producing security
(1) Illiquid security. At September 30, 2016, the aggregate value of these
securities was $798,574 representing 0.2% of net assets.
(2) Fair valued security. Securities are classified as Level 3 based on the
securities valuation inputs (see Note 2).
(3) Company has filed for bankruptcy protection.
(4) Security in default of interest.
(5) Security in default of interest and principal at maturity.
66
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
(6) PIK ("Payment-in-Kind") security -- Income may be paid in additional
securities or cash at the discretion of the issuer. The security is
currently paying interest in cash at the coupon rate listed.
(7) Senior loans in the Fund are generally subject to mandatory and/or
optional prepayment. Because of these mandatory prepayment conditions and
because there may be significant economic incentives for a borrower to
prepay, prepayments may occur. As a result, the actual remaining maturity
may be substantially less than the stated maturities shown.
(8) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior
loans are generally considered to be restrictive in that the Fund is
ordinarily contractually obligated to receive approval from the Agent Bank
and/or borrower prior to the disposition of a senior loan.
(9) All loans in the Fund were purchased through assignment agreements unless
otherwise indicated.
(10) Perpetual maturity -- maturity date reflects the next call date.
(11) Denotes a restricted security that: (a) cannot be offered for public sale
without first being registered, or being able to take advantage of an
exemption from registration, under the Securities Act of 1933, as amended
(the "1933 Act"); (b) is subject to a contractual restriction on public
sales; or (c) is otherwise subject to a restriction on sales by operation
of applicable law. Restricted securities are valued pursuant to Note
2. Certain restricted securities held by the Fund may not be sold except
in exempt transactions or in a public offering registered under the 1933
Act. The Fund has no right to demand registration of these securities. The
risk of investing in certain restricted securities is greater than the
risk of investing in the securities of widely held, publicly traded
companies. To the extent applicable, lack of a secondary market and resale
restrictions may result in the inability of a Fund to sell a security at a
fair price and may substantially delay the sale of the security. In
addition, certain restricted securities may exhibit greater price
volatility than securities for which secondary markets exist. As of
September 30, 2016, the Fund held the following restricted securities:
Shares/ Value % of
Acquisition Principal Acquisition Per Net
Description Date Amount Cost Value Share Assets
----------- ----------- --------- ----------- -------- --------- ------
Warrants
ION Media
Networks, Inc.
Expires
12/18/2016
(strike price
$0.01).......... 03/1/2011 332 $0 $401,707 $1,209.96 0.12%
ION Media
Networks, Inc.
Expires
12/18/2016
(strike price 11/11/2010 327 0
$0.01).......... 03/01/2011 1 0
--- --
328 0 396,867 1,209.96 0.12
-------- ----
$798,574 0.24%
======== ====
(12) See Note 5 for cost of investments on a tax basis.
BTL --Bank Term Loan
DIP --Debtor-in-possession
ETF --Exchange-Traded Fund
FRS --Floating Rate Security
VRS --Variable Rate Security
The rates shown on FRS and VRS are the current interest rates at
September 30, 2016 and unless noted otherwise, the dates shown are the
original maturity dates.
67
SunAmerica Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
(continued)
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2016 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
- --------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Asset Backed Securities:
Diversified Financial Services........ $ -- $ 5,274,352 $ 347,069 $ 5,621,421
U.S. Corporate Bonds & Notes:
Rubber/Plastic Products............... -- -- 0 0
Other Industries...................... -- 112,255,420 -- 112,255,420
Foreign Corporate Bonds & Notes:
Special Purpose Entity................ -- -- 0 0
Other Industries...................... -- 28,665,224 -- 28,665,224
Loans:
Building-Residential/Commercial....... -- -- 0 0
Oil & Gas Drilling.................... -- 360,000 61,519 421,519
Other Industries...................... -- 189,065,351 -- 189,065,351
Foreign Government Obligations.......... -- 2,001,168 -- 2,001,168
Common Stocks........................... -- -- 0 0
Preferred Securities.................... 1,181,565 -- -- 1,181,565
Preferred Securities/Capital Securities. -- 3,025,006 -- 3,025,006
Warrants................................ -- -- 798,574 798,574
Exchange Traded Funds................... 3,176,280 -- -- 3,176,280
---------- ------------ ---------- ------------
Total Investments at Value.............. $4,357,845 $340,646,521 $1,207,162 $346,211,528
========== ============ ========== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
At the beginning and end of the reporting period, Level 3 investments were not
considered a material portion of the Fund.
See Notes to Financial Statements
68
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
Note 1. Organization
The SunAmerica Income Funds (the "Trust") is a diversified open-end
management investment company organized as a Massachusetts business trust.
The Trust currently consists of three different series (each, a "Fund" and
collectively, the "Funds"). Each Fund is a separate series of the Trust with
distinct investment objectives and/or strategies. Each Fund is managed by
SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"), an
indirect wholly-owned subsidiary of American International Group, Inc.
("AIG"). An investor may invest in one or more of the following Funds:
SunAmerica U.S. Government Securities Fund ("U.S. Government Securities
Fund"), SunAmerica Strategic Bond Fund ("Strategic Bond Fund"), and
SunAmerica Flexible Credit Fund ("Flexible Credit Fund"). The Funds are
considered to be separate entities for financial and tax reporting purposes.
The investment goals and principal investment techniques for each of the
Funds are as follows:
U.S. Government Securities Fund seeks high current income consistent with
relative safety of capital by the active trading of U.S. Government
securities, without regard to the maturities of such securities. Under
normal market conditions, at least 80% of the Fund's net assets plus any
borrowing for investment purposes will be invested in such securities.
Strategic Bond Fund seeks a high level of total return by the active trading
of a broad range of bonds, including both investment grade and
non-investment grade U.S. and foreign bonds (which may include "junk
bonds"), U.S. and foreign government and agency obligations, and
mortgage-backed securities, without regard to the maturities of such
securities. Under normal market conditions, at least 80% of the Fund's net
assets plus any borrowing for investment purposes will be invested in bonds.
Flexible Credit Fund seeks a high level of total return by the active
trading in credit instruments. Under normal circumstances, at least 80% of
the Fund's net assets, plus any borrowings for investment purposes, will be
invested in credit instruments and derivative instruments and
exchange-traded funds ("ETFs") that are linked to, or provide investment
exposure to, credit instruments. The Fund considers a credit instrument to
be any debt instrument or instrument with debt-like characteristics,
including but not limited to, corporate and sovereign bonds, secured
floating rate loans and other institutionally traded secured floating rate
debt obligations ("Loans"), and securitized instruments, which are
securities backed by pools of assets such as mortgages, loans, or other
receivables. The credit instruments in which the Fund intends to primarily
invest are U.S. and non-U.S. below investment grade, high yield bonds
(commonly referred to as "junk bonds") and Loans.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statements of Assets and Liabilities. The cost
structure for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, purchases of Class A shares in amounts of
$1,000,000 or more will be purchased at net asset value but will be subject
to a contingent deferred sales charge on redemptions made within two years
of purchase.
Class B shares are offered without an initial sales charge, although a
declining contingent deferred sales charge may be imposed on redemptions
made within six years of purchase. Class B shares convert automatically to
Class A shares on the first business day of the month following the eighth
anniversary of the issuance of such Class B shares and at such time will be
subject to the lower distribution fee applicable to Class A shares. The U.S.
Government Fund and the Flexible Credit Fund stopped offering Class B shares
for sale as of the close of business December 2, 2014. As of the close of
business January 27, 2015, Class B shares of each of the U.S. Government
Securities Fund and the Flexible Credit Fund converted to Class A shares of
each respective Fund.
Class C shares are offered at net asset value per share without an initial
sales charge and may be subject to a contingent deferred sales charge on
redemptions made within 12 months of purchase.
Class W shares are offered at net asset value per share. The class is
offered exclusively through advisory fee-based programs sponsored by certain
financial intermediaries and other programs. Class W shares of the Flexible
Credit Fund and the Strategic Bond Fund commenced operations effective
October 1, 2014 and January 29, 2015, respectively.
69
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions except as may otherwise be provided in the Trust's
registration statement. Class A, Class B and Class C shares each makes
distribution and account maintenance and service fee payments under the
distribution plan pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), except that Class B and Class C shares
are subject to higher distribution fees.
Indemnifications: The Trust's organizational documents provide current and
former officers and trustees with a limited indemnification against
liabilities arising out of the performance of their duties to the Trust. In
addition, pursuant to Indemnification Agreements between the Trust and each
of the current trustees who is not an "interested person," as defined in
Section 2(a)(19) of the 1940 Act, of the Trust (collectively, the
"Disinterested Trustees"), the Trust provides the Disinterested Trustees
with a limited indemnification against liabilities arising out of the
performance of their duties to the Trust, whether such liabilities are
asserted during or after their service as trustees. In addition, in the
normal course of business, the Trust enters into contracts that contain the
obligation to indemnify others. The Trust's maximum exposure under these
arrangements is unknown. Currently, however, the Trust expects the risk of
loss to be remote.
Note 2. 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.
70
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
The summary of each Fund's asset and liabilities classified in the fair
value hierarchy as of September 30, 2016 is reported on a schedule following
each Fund's Portfolio of Investments.
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
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 the 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, and maturity date, option
adjusted spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, the securities may be priced at the mean of
two independent quotes obtained from brokers.
Senior floating rate loans ("Loans") are valued at the average of available
bids in the market for such Loans, as provided by a Board-approved loan
pricing service, and are generally categorized as Level 2.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the last sales price or official closing price as of the close of the
customary trading session on the exchange where the security is principally
traded. Registered investment companies are generally categorized as Level 1.
Forward foreign currency contracts ("forward contracts") are valued at the
4:00 p.m. Eastern Time forward rate and are generally categorized as Level 2.
Other securities are valued on the basis of last sale or bid price (if a
last sale price is not available) which is, in the opinion of the Adviser,
the broadest and most representative market, that may be either a securities
exchange or over-the-counter market and are generally categorized as Level 1
or Level 2.
The Board is responsible for the share valuation process and has adopted
policies and procedures (the "PRC Procedures") for valuing the securities
and other assets held by the Funds, including procedures for the fair
valuation of securities and other assets for which market quotations are not
readily available or are unreliable. The PRC Procedures provide for the
establishment of a
71
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
pricing review committee, which is responsible for, among other things,
making certain determinations in connection with the Trust's fair valuation
procedures. Securities for which market quotations are not readily available
or the values of which may be significantly impacted by the occurrence of
developments or significant events are generally categorized as Level 3.
There is no single standard for making fair value determinations, which may
result in prices that vary from those of other funds.
Derivative Instruments:
Forward Foreign Currency Contracts: During the period, the Strategic Bond
Fund used forward contracts to attempt to protect securities and related
receivables and payables against changes in future foreign exchange rates.
A forward contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the forward rate and the cumulative change in
market value is recorded by a Fund as unrealized appreciation or
depreciation. On the settlement date, a Fund records either realized gains
or losses equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
Risks to the Funds of entering into forward contracts include counterparty
risk, market risk and illiquidity risk. Counterparty risk arises upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts. If the counterparty defaults, a Fund's
loss will generally consist of the net amount of contractual payments that
the Fund has not yet received though the Fund's maximum exposure due to
counterparty risk could extend to the notional amount of the contract.
Market risk is the risk that the value of the forward contract will
depreciate due to unfavorable changes in the exchange rates. These contracts
may involve market risk in excess of the unrealized appreciation or
depreciation reported on the Statements of Assets and Liabilities.
Illiquidity risk arises because the secondary market for forwards may have
less liquidity relative to markets for other securities. Currency
transactions are also subject to risks different from those of other
portfolio transactions. Because currency control is of great importance to
the issuing governments and influences economic planning and policy,
purchases and sales of currency and related instruments can be adversely
affected by government exchange controls, limitations or restrictions on
repatriation of currency, and manipulations or exchange restrictions imposed
by governments.
Forward foreign currency contracts outstanding at the end of the period, if
any, are reported on a schedule following each Fund's Portfolio of
Investments.
Master Agreements: Certain Funds that hold derivative instruments and other
financial instruments may be a party to ISDA (International Swaps and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern certain
instruments. Master Agreements may contain provisions regarding, among other
things, the parties' general obligations, representations, agreements,
collateral requirements, events of default and early termination. Collateral
can be in the form of cash or securities as agreed to by the Fund and
applicable counterparty. Collateral requirements are generally determined
based on a Fund's net position with each counterparty. Master Agreements may
also include certain provisions that require a Fund to post additional
collateral upon the occurrence of certain events, such as when a Fund's net
assets fall below a specified level. In addition, Master Agreements
typically specify certain standard termination events, such as failure of a
party to pay or deliver, credit support defaults and other events of
default. Termination events applicable to a Fund may also occur upon a
decline in the Fund's net assets below a specified level over a certain
period of time. Additional termination events applicable to counterparties
may occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments outstanding pursuant to a particular Master Agreement,
including the payment of any losses and costs resulting from such early
termination, as reasonably determined by the terminating party. Any decision
by one or more of a Fund's counterparties to elect early termination could
cause a Fund to accelerate the payment of liabilities, which settlement
amounts could be in excess of the amount of assets that are already posted
as collateral. Typically, the Master Agreement will permit a single net
payment in the event of default. Note, however, that bankruptcy or
insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset in bankruptcy, insolvency or other
events. As a result, the early termination with respect to derivative
instruments subject to Master Agreements that are in a net liability
position could be material to a Fund's financial
72
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
statements. The Funds do not offset derivative assets and derivative
liabilities that are subject to netting arrangements in the Statements of
Asset and Liabilities.
The following tables represent the value of derivatives held as of September
30, 2016, by their primary underlying risk exposure and respective location
on the Statements of Assets and Liabilities and the effect of derivatives on
the Statements of Operations for the period ended September 30, 2016. The
derivative contracts held during the period are not accounted for as hedging
instruments under GAAP. For a detailed presentation of derivatives held as
of September 30, 2016, please refer to each Fund's Portfolio of Investments.
Liability
Asset Derivatives Derivatives
----------------- ---------------
Foreign Foreign
Exchange Exchange
Contracts Contracts
----------------- ---------------
Foreign Forward Foreign Forward
Exchange Exchange
Fund Contracts(1) Contracts(2)
---- ----------------- ---------------
Strategic Bond. $95,102 $14,817
======= =======
--------
Statement of Assets and Liabilities Location:
(1)Unrealized appreciation on forward foreign currency contracts
(2)Unrealized depreciation on forward foreign currency contracts
Change in
Unrealized
Realized Gain Appreciation
(Loss) on (Depreciation) on
Derivatives Derivatives
Recognized in Recognized in
Statement of Statement of
Operations Operations
--------------- -----------------
Foreign Foreign
Exchange Exchange
Contracts Contracts
--------------- -----------------
Foreign Forward Foreign Forward
Exchange Exchange
Fund Contracts(1) Contracts(2)
---- --------------- -----------------
Strategic Bond. $(300,763) $1,680,895
========= ==========
--------
Statement of Operations Location:
(1)Net realized foreign exchange gain (loss) on other assets and liabilities
(2)Change in unrealized foreign exchange gain (loss) on other assets and
liabilities
The following table represents the average monthly balances of derivatives
held during the six months ended September 30, 2016:
Average Amount
Outstanding
During the Year
---------------
Foreign Forward
Exchange
Fund Contracts(1)
---- ---------------
Strategic Bond. $46,677,168
===========
--------
(1)Amounts represent notional amounts in US dollars.
73
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
There were no derivative assets and liabilities subject to Master Agreements
outstanding at September 30, 2016. The repurchase agreements held by the
Funds as of September 30, 2016, are subject to Master Agreements. See the
Portfolio of Investments and the Notes to the Financial Statements for more
information about the Funds' holdings in repurchase agreements.
Mortgage-Backed Dollar Rolls: During the year ended September 30, 2016, the
Strategic Bond Fund entered into dollar rolls using "to be announced"
("TBA") mortgage-backed securities ("TBA Rolls"). TBA Roll transactions
involve the sale of mortgage or other asset backed securities with the
commitment to purchase substantially similar securities on a specified
future date. The Funds' policy is to record the components of TBA Rolls as
purchase/sale transactions. Any difference between the purchase and sale
price is recorded as a realized gain or loss on the date the transaction is
entered into. The Strategic Bond Fund had TBA Rolls outstanding at period
end, which are included in receivable for investments sold and payable for
investments purchased in the Statements of Assets and Liabilities. TBA Roll
transactions involve the risk that the market value of the securities held
by a Fund may decline below the price of the securities that the Fund has
sold but is obligated to repurchase under the agreement. In the event that
the buyer of securities in a TBA Roll transaction files bankruptcy or
becomes insolvent, a Fund's use of the proceeds from the sale of the
securities may be restricted pending a determination by the other party, or
its trustee or receiver, whether to enforce the Fund's obligation to
repurchase the securities. The return earned by a Fund with the proceeds of
the TBA Roll transaction may not exceed the transaction costs.
When-Issued Securities and Forward Commitments: Certain Funds may purchase
or sell when-issued securities, including TBA securities that have been
authorized, but not yet issued in the market. In addition, a Fund may
purchase or sell securities on a forward commitment basis. A forward
commitment involves entering into a contract to purchase or sell securities,
typically on an extended settlement basis, for a fixed price at a future
date. The Funds may engage in when-issued or forward commitment transactions
in order to secure what is considered to be an advantageous price and yield
at the time of entering into the obligation. The purchase of securities on a
when-issued or forward commitment basis involves a risk of loss if the value
of the security to be purchased declines before the settlement date.
Conversely, the sale of securities on a when-issued or forward commitment
basis involves the risk that the value of the securities sold may increase
before the settlement date. For the period ended September 30, 2016, the
Strategic Bond Fund purchased and/or sold when-issued securities.
Stripped Mortgage-Backed Securities: Stripped Mortgage-Backed Securities
("SMBS") are multiple-class mortgage-backed securities. SMBS are often
structured with two classes that receive different proportions of the
interest and principal distributions on a pool of mortgage assets. SMBS have
greater market volatility than other types of U.S. government securities in
which a Fund invests. A common type of SMBS has one class receiving some of
the interest and all or most of the principal (the "principal only" class)
from the mortgage pool, while the other class will receive all or most of
the interest (the "interest only" class). The yield to maturity on an
interest only class is extremely sensitive not only to changes in prevailing
interest rates, but also to the rate of principal payments, including
principal prepayments, on the underlying pool of mortgage assets, and a
rapid rate of principal payment may have a material adverse effect on a
Fund's yield.
Inflation-Indexed Bonds: Certain Funds may purchase inflation-indexed bonds.
Inflation-indexed bonds are fixed income securities whose principal value is
adjusted periodically according to the rate of inflation. Two structures are
common. The U.S. Treasury and certain other issuers use a structure that
reflects inflation in the principal value of the bond. Other issuers pay out
any inflation related accruals as part of a semiannual coupon. The value of
inflation-indexed bonds is expected to change in response to changes in real
interest rates. Real interest rates, in turn, are tied to the relationship
between nominal interest rates (i.e., stated interest rates) and the rate of
inflation. Therefore, if the rate of inflation rises at a faster rate than
nominal interest rates, real interest rates (i.e., nominal interest rates
minus inflation) might decline, leading to an increase in value of
inflation-indexed bonds. In contrast, if nominal interest rates increase at
a faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds. There can be no assurance,
however, that the value of inflation-indexed bonds will be directly
correlated to changes in nominal interest rates, and short-term increases in
inflation may lead to a decline in their value. Coupon payments received
from inflation-indexed bonds are recorded in the Statements of Operations as
interest income. In addition, any increase or decrease in the principal
amount of an inflation-indexed bond will be recorded in the Statements of
Operations as an increase or decrease to interest income, even though
principal is not paid until maturity.
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
74
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
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 September 30, 2016, the following funds held an undivided interest in
a joint repurchase agreement with State Street Bank and Trust Co.:
Percentage Principal
Fund Ownership Amount
---- ---------- -----------
U.S. Government Securities. 2.71% $11,282,000
Strategic Bond............. 0.29 1,203,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
State Street Bank and Trust Co., dated September 30, 2016, bearing interest
at a rate of 0.01% per annum, with a principal amount of $416,353,000, a
repurchase price of $416,353,347, and a maturity date of October 3, 2016.
The repurchase agreement is collateralized by the following:
Interest Maturity Principal Market
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ------------ ------------
U.S. Treasury Bonds. 7.88% 02/15/2021 $ 25,000,000 $ 32,523,450
U.S. Treasury Bonds. 8.50 02/15/2020 25,000,000 31,566,400
U.S. Treasury Bonds. 8.75 05/15/2020 25,000,000 32,738,275
U.S. Treasury Notes. 3.38 11/15/2019 98,560,000 107,353,425
U.S. Treasury Notes. 3.50 05/15/2020 200,000,000 220,500,000
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded on a trade
date basis. Interest income is accrued daily from settlement date except
when collection is not expected. Dividend income is recorded on the
ex-dividend date except for certain dividends from foreign securities, which
are recorded as soon as the Trust is informed after the ex-dividend date.
Paydown gains and losses on mortgage and asset-backed securities are
recorded as components of interest income on the Statements of Operations.
For financial statement purposes, the Funds amortize all premiums and
accrete all discounts on fixed income securities.
Realized gains and losses on the sale of investments are calculated on the
identified cost basis. Funds which earn foreign income and capital gains may
be subject to foreign withholding taxes and capital gains taxes at various
rates. Under applicable foreign law, a withholding of tax may be imposed on
interest, dividends, and capital gains from the sale of foreign securities
at various rates.
Net investment income, expenses other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class
of shares based upon the relative net asset value of outstanding shares of
each class of shares at the beginning of the day (after adjusting for
current capital shares activity of the respective class).
Expenses common to all Funds are allocated among the Funds based upon
relative net assets or other appropriate allocation methods. In all other
respects, expenses are charged to each Fund as incurred on a specific
identification basis.
Dividends from net investment income are accrued daily and paid monthly.
Capital gain distributions, if any, are paid annually. The Funds record
dividends and distributions to their shareholders on the ex-dividend date.
The Funds reserve the right to declare
75
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
and pay dividends less frequently than disclosed above, provided that the
net realized capital gains and net investment income, if any, are paid at
least annually.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the capital accounts at fiscal year end based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net assets
are not affected by these reclassifications.
Each Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income, including any net capital gains on investments, to its
shareholders. Each Fund also intends to distribute sufficient net investment
income and net capital gains, if any, so that it will not be subject to
excise tax on undistributed income and gains. Therefore, no federal income
tax or excise tax provision is required.
The Funds recognize the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed each Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
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 period. Similarly, the
Funds do not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
period.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities located in the Statements of Operations include realized
foreign exchange gains and losses from currency gains or losses between the
trade and the settlement dates of securities transactions, the difference
between the amounts of interest, dividends and foreign withholding taxes
recorded on the Funds' books and the U.S. dollar equivalent amounts actually
received or paid and changes in the unrealized foreign exchange gains and
losses relating to the other assets and liabilities arising as a result of
changes in the exchange rates and realized gains and losses on forward
foreign currency contracts.
Note 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.
76
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 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
Fund Assets Fees
---- ---------------------------- ----------
U.S. Government Securities........................ $0 - $200 million 0.650%
(greater than) $200 million 0.620
(greater than) $400 million 0.550
Strategic Bond.................................... $0 - $350 million 0.650
(greater than) $350 million 0.600
Flexible Credit................................... $0 - $200 million 0.750
(greater than) $200 million 0.720
(greater than) $400 million 0.550
The Strategic Bond Fund is subadvised by PineBridge Investments, LLC
("PineBridge") and the Flexible Credit Fund is subadvised by Newfleet Asset
Management, LLC ("Newfleet"). Under the Subadvisory Agreements, PineBridge
and Newfleet manage the investment and reinvestment of the assets of the
Strategic Bond Fund and the Flexible Credit Fund, respectively.
SunAmerica pays PineBridge and Newfleet fees out of the investment advisory
fees it receives from the respective Funds. The portion of the investment
advisory fees received by SunAmerica that are paid to PineBridge and
Newfleet with respect to the Strategic Bond Fund and Flexible Credit Fund
are as follows:
Subadvisory
Fund Assets Fees
---- ---------------------------- -----------
Strategic Bond.................................... $0 - $200 million 0.350%
(greater than) $200 million 0.250
(greater than) $500 million 0.200
Flexible Credit................................... $0 - $200 million 0.300
(greater than) $200 million 0.250
(greater than) $400 million 0.150
SunAmerica has contractually agreed to waive fees and/or reimburse expenses,
to the extent necessary to cap the Funds' annual fund operating expenses at
the following percentages of each Fund's average net assets. For the
purposes of waived fees and/or reimbursed expense calculations, annual Fund
operating expenses shall not include extraordinary expenses (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 and governmental fees, and other expenses not
incurred in the ordinary course of a Fund's business. The contractual fee
waivers and expense reimbursements will continue indefinitely, subject to
termination by the Trustees, including a majority of the Disinterested
Trustees.
Fund Percentage
---- ----------
U.S. Government Securities Class A..... 0.99%
U.S. Government Securities Class C..... 1.64
Strategic Bond Class A................. 1.40
Strategic Bond Class B................. 2.05
Strategic Bond Class C................. 2.05
Strategic Bond Class W................. 1.20
Flexible Credit Class A................ 1.45
Flexible Credit Class C................ 2.10
Flexible Credit Class W................ 1.25
For the U.S. Government Securities Fund, any contractual waivers and/or
reimbursements made by SunAmerica are subject to recoupment from the Fund
within two years after the occurrence of the waivers and/or reimbursements,
provided that the Fund is able to effect such payment to SunAmerica and
remain in compliance with the expense limitations in effect at the time the
waivers and/or reimbursements were made.
77
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
For the period ended September 30, 2016, pursuant to the contractual expense
limitations in the above tables SunAmerica has waived and/or reimbursed
expenses as follows:
Other Expenses
Fund Reimbursed
---- --------------
U.S. Government Securities.............. $ 89,876
Class Specific
Fund Expenses
---- --------------
U.S. Government Securities Class A...... $212,173
U.S. Government Securities Class C...... 51,471
At September 30, 2016, expenses previously waived or reimbursed by
SunAmerica that are subject to recoupment and expire during the time period
indicated are as follows:
Fund Other Expenses Reimbursed
---- ------------------------------------------------
March 31, 2017 March 31, 2018 September 30, 2018
-------------- -------------- ------------------
U.S. Government Securities.... $127,894 $216,436 $ 89,876
Class Specific Expenses Reimbursed
------------------------------------------------
Fund March 31, 2017 March 31, 2018 September 30, 2018
---- -------------- -------------- ------------------
U.S. Government Securities
Class A...................... $211,113 $412,070 $212,173
U.S. Government Securities
Class C...................... 35,891 72,293 51,471
The Trust, on behalf of each Fund, has entered into a Distribution Agreement
with AIG Capital Services, Inc. ("ACS" or "Distributor"), an affiliate of
the Adviser. Each Fund has adopted a Distribution Plan on behalf of each
Class (other than Class W shares of the Strategic Bond and Flexible Credit
Funds), in accordance with the provisions of Rule 12b-1 under the 1940 Act
(each, a "Plan," and collectively, the "Plans"), hereinafter referred to as
the "Class A Plan," the "Class B Plan" and the "Class C Plan." In adopting
the Class A Plan, the Class B Plan and the Class C Plan, the Trustees
determined that there was a reasonable likelihood that each such Plan would
benefit the Trust and the shareholders of the respective class. The sales
charge and distribution fees of a particular class will not be used to
subsidize the sale of shares of any other class.
The Class A, Class B and Class C Plans, provide that the Trust, on behalf of
the respective classes, shall pay the Distributor a distribution fee at an
annual rate of up to 0.10%, 0.75% and 0.75%, of average daily net assets of
such Fund's Class A, Class B and Class C shares, respectively, to compensate
the Distributor and certain securities firms for providing sales and
promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be compensated for include
fees paid to broker-dealers that have sold Fund shares, commissions, and
other expenses such as those incurred for sales literature, prospectus
printing and distribution and compensation to wholesalers. It is possible
that in any given year, the amount paid to the Distributor under the Class A
Plan, Class B Plan or Class C Plan may exceed the Distributor's distribution
costs as described above. Except for Class W shares of the Strategic Bond
and Flexible Credit Funds, the Plans also provide that each class of shares
of the Trust will also pay the Distributor an account maintenance fee at the
annual rate of up to 0.25% of the aggregate average daily net assets of such
class of shares to compensate the Distributor and securities firms for
account maintenance activities. For the period ended September 30, 2016, ACS
received fees as reflected in the Statements of Operations based on the
aforementioned rates.
The Trust, on behalf of the Strategic Bond and Flexible Credit Funds, has
entered into an Administrative and Shareholder Services Agreement with ACS,
pursuant to which ACS is paid an annual fee of 0.15% of average daily net
assets of Class W shares as compensation for providing additional
shareholder services to Class W shareholders. For the period ended
September 30, 2016, ACS earned fees as reflected in the Statements of
Operations based on the aforementioned rate.
ACS receives sales charges on each Fund's Class A shares, portions of which
are reallowed to affiliated broker-dealers and non-affiliated
broker-dealers. ACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of Class A,
Class B and Class C shares. ACS has advised the Funds that for the period
ended
78
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
September 30, 2016, the proceeds received from Class A sales (and paid out
to affiliated and non-affiliated broker-dealers) and Class A, Class B and
Class C redemptions were as follows:
Class A Class B Class C
---------------------------------------------------- ------------- -------------
Contingent Contingent Contingent
Sales Affiliated Non-affiliated Deferred Deferred Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges Sales Charges
---- -------- -------------- -------------- ------------- ------------- -------------
U.S. Government Securities. $ 31,123 $ 7,982 $ 17,834 $ -- $ -- $12,263
Strategic Bond............. 143,661 55,668 63,741 106 43,588 2,469
Flexible Credit............ 248,486 29,620 178,684 -- -- 4,476
The Trust has entered into a Service Agreement with SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Adviser. Under the Service
Agreement, SAFS performs certain shareholder account functions by assisting
the Funds' transfer agent in connection with the services that it offers to
the shareholders of the Funds. The Service Agreement permits the Funds to
compensate SAFS for services rendered, based upon an annual rate of 0.22% of
average daily net assets, which is approved annually by the Trustees. For
the period ended September 30, 2016, the Funds incurred the following
expenses which are included in transfer agent fees and expenses in the
Statements of Operations to compensate SAFS pursuant to the terms of the
Service Agreement:
Payable at
Fund Expenses September 30, 2016
---- -------- ------------------
US Government Securities Class A. $178,240 $28,354
US Government Securities Class C. 32,715 4,973
Strategic Bond Class A........... 193,019 30,948
Strategic Bond Class B........... 34,031 5,668
Strategic Bond Class C........... 166,204 27,032
Strategic Bond Class W........... 34,350 6,013
Flexible Credit Class A.......... 144,457 24,087
Flexible Credit Class C.......... 72,902 12,597
Flexible Credit Class W.......... 115,490 21,689
At September 30, 2016, SunAmerica Active Allocation Portfolio and SunAmerica
Multi-Asset Allocation Portfolio, each a series of SunAmerica Series, Inc.,
owned a percentage of the outstanding shares of the following Funds:
Holder
---------------------
SunAmerica SunAmerica
Active Multi-Asset
Allocation Allocation
Fund Portfolio Portfolio
---- ---------- -----------
U.S. Government Securities . . . . . . . . . . . . .. 8.67% 13.37%
Strategic Bond . . . . . . . . . . . ................ 3.07 --
Flexible Credit . . . . . . ......................... 3.27 4.01
Note 4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the year ended September 30, 2016 were as follows:
Purchases of Investment Sales of Investment Purchase of U.S. Sales of U.S.
Securities (Excluding U.S. Securities (Excluding U.S. Government Government
Fund Government Securities) Government Securities) Securities Securities
---- -------------------------- -------------------------- ---------------- -------------
U.S. Government Securities. $ -- $ -- $110,782,066 $ 81,771,913
Strategic Bond............. 153,063,491 217,838,372 316,025,563 255,480,422
Flexible Credit............ 132,813,182 77,092,498 -- --
79
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
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 Statements
of Assets and Liabilities by temporary book/tax differences primarily
arising from wash sales, post October capital losses, distributions payable,
deferred compensation plans, amortization of premium/discount and treatment
of defaulted securities.
Distributable Earnings Tax Distributions
For the year ended March 31, 2016 For the year ended March 31, 2016
---------------------------------------- ---------------------------------
Long-term Unrealized
Ordinary Gains/Capital Appreciation Ordinary Long-Term
Fund Income Loss Carryover (Depreciation)* Income Capital Gains
---- ---------- -------------- --------------- ----------- -------------
U.S. Government Securities. $ 481,941 $(11,882,338) $ 6,747,202 $ 3,189,102 $--
Strategic Bond............. 356,714 (61,012,609) (16,453,517) 16,390,428 --
Flexible Credit............ 1,132,885 (58,512,325) (10,246,257) 9,686,069 --
--------
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
As of March 31, 2016, for Federal income tax purposes, the Funds indicated
below have capital loss carryforwards, which expire in the year indicated,
which are available to offset future capital gains, if any:
Capital Loss Carryforward+ Unlimited+
-------------------------- ---------------------
Fund 2017 2018 ST LT
---- ---------- ----------- ---------- ----------
U.S. Government Securities............. $ -- $ -- $8,832,105 $3,050,233
Strategic Bond......................... -- 49,688,392 2,433,730 8,890,487
Flexible Credit........................ 9,384,737 41,322,811 1,504,166 6,300,611
--------
+ On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted which changes various technical rules governing
the tax treatment of regulated investment companies. The changes are
generally effective taxable years beginning after the date of enactment.
Under the Act, a 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.
Under the current law, capital losses realized after October 31 and late
year ordinary losses may be deferred and treated as occurring on the first
day of the following year. For the fiscal year ended March 31, 2016, the
Funds elected to defer late year ordinary losses and post October capital
losses as follows:
Deferred Deferred
Deferred Post-October Post-October
Late Year Short-Term Long-Term
Fund Ordinary Loss Capital Loss Capital Loss
---- ------------- ------------ ------------
U.S. Government Securities. $ -- $ 27,620 $ 517,775
Strategic Bond............. 1,517,537 2,616,057 8,247,774
Flexible Credit............ -- 1,418,217 1,719,068
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for federal tax purposes, including short-term securities and
repurchase agreements, were as follows:
Aggregate Aggregate Unrealized
Unrealized Unrealized Gain/(Loss) Cost of
Fund Gain Loss Net Investments
---- ----------- ----------- ----------- ------------
U.S. Government Securities....... $ 9,789,543 $(1,914,687) $7,874,856 $195,708,842
Strategic Bond................... 12,872,782 (9,397,413) 3,475,369 401,799,832
Flexible Credit Bond............. 7,486,534 (7,088,531) 398,003 345,813,525
80
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
Note 6. Capital Share Transactions
Transactions in capital shares of each class of each Fund were as follows:
U.S. Government Securities Fund
---------------------------------------------------
Class A
---------------------------------------------------
For the
six months ended For the
September 30, 2016 year ended
(unaudited) March 31, 2016
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
Shares
sold.......... 3,469,640 $ 33,525,297 3,180,760 $ 30,402,860
Reinvested
dividends..... 129,019 1,242,556 270,193 2,586,420
Shares
redeemed...... (1,737,817) (16,735,743) (6,403,106) (61,225,580)
---------- ------------ ----------- ------------
Net
increase
(decrease).... 1,860,842 $ 18,032,110 (2,952,153) $(28,236,300)
========== ============ =========== ============
U.S. Government Securities Fund
---------------------------------------------------
Class C
---------------------------------------------------
For the
six months ended For the
September 30, 2016 year ended
(unaudited) March 31, 2016
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
Shares
sold.......... 316,771 $ 3,044,053 2,452,847 $ 23,409,209
Reinvested
dividends..... 13,268 127,722 25,490 243,879
Shares
redeemed...... (607,355) (5,834,461) (1,643,682) (15,692,131)
---------- ------------ ----------- ------------
Net
increase
(decrease).... (277,316) $ (2,662,686) 834,655 $ 7,960,957
========== ============ =========== ============
Strategic Bond
------------------------------------------------------------------------------------------------------
Class A Class B
--------------------------------------------------- -------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2016 year ended September 30, 2016 year ended
(unaudited) March 31, 2016 (unaudited) March 31, 2016
------------------------ ------------------------- ----------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------
Shares
sold(1)(2).... 2,800,857 $ 9,441,543 11,811,127 $ 39,450,903 753,660 $ 2,556,404 1,109,451 $ 3,647,483
Reinvested
dividends..... 840,307 2,841,728 2,121,593 7,060,743 111,760 377,868 287,331 954,645
Shares
redeemed(1)(2) (6,967,942) (23,537,778) (27,771,848) (93,474,978) (1,275,976) (4,290,618) (3,308,675) (11,047,375)
---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------
Net
increase
(decrease).... (3,326,778) $(11,254,507) (13,839,128) $(46,963,332) (410,556) $(1,356,346) (1,911,893) $ (6,445,247)
========== ============ =========== ============ ========== =========== ========== ============
Strategic Bond
------------------------------------------------------------------------------------------------------
Class C Class W
--------------------------------------------------- -------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2016 year ended September 30, 2016 year ended
(unaudited) March 31, 2016 (unaudited) March 31, 2016
------------------------ ------------------------- ----------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------
Shares
sold.......... 1,882,484 $ 6,392,138 4,799,228 $ 15,900,642 2,469,828 $ 8,379,733 9,165,702 $ 31,407,808
Reinvested
dividends..... 452,683 1,535,564 1,188,650 3,965,886 110,515 373,687 253,845 842,281
Shares
redeemed...... (4,877,692) (16,491,150) (12,615,217) (42,009,648) (1,896,114) (6,397,020) (4,726,445) (15,653,382)
---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------
Net
increase
(decrease).... (2,542,525) $ (8,563,448) (6,627,339) $(22,143,120) 684,229 $ 2,356,400 4,693,102 $ 16,596,707
========== ============ =========== ============ ========== =========== ========== ============
--------
(1)For the six months ended September 30, 2016, includes automatic conversion
of 97,813 shares of Class B shares in the amount of $328,405 to 97,786
shares of Class A shares in the amount of $328,405.
(2)For the year ended March 31, 2016, includes automatic conversion of 239,551
shares of Class B shares in the amount of $798,621 to 239,551 shares of
Class A shares in the amount of $798,621.
81
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
Flexible Credit Fund
----------------------------------------------------
Class A
----------------------------------------------------
For the
six months ended For the
September 30, 2016 year ended
(unaudited) March 31, 2016
------------------------- -------------------------
Shares Amount Shares Amount
----------- ------------ ----------- ------------
Shares
sold...... 11,068,850 $ 37,180,017 28,006,173 $ 94,181,643
Reinvested
dividends. 712,978 2,411,620 1,280,817 4,286,740
Shares
redeemed.. (8,352,123) (28,029,986) (27,862,342) (94,089,799)
----------- ------------ ----------- ------------
Net
increase
(decrease) $ 3,429,705 $ 11,561,651 1,424,648 $ 4,378,584
=========== ============ =========== ============
Flexible Credit Fund
---------------------------------------------------------------------------------------------------------
Class C Class W
---------------------------------------------------- ---------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2016 year ended September 30, 2016 year ended
(unaudited) March 31, 2016 (unaudited) March 31, 2016
------------------------- ------------------------- ------------------------ -------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ---------- ------------ ----------- ------------
Shares
sold...... 3,856,919 $ 13,080,867 11,931,449 $ 40,650,007 13,367,594 $ 45,182,005 34,047,527 $115,125,832
Reinvested
dividends. 240,413 818,143 448,842 1,510,779 354,474 1,200,076 377,753 1,259,129
Shares
redeemed.. (2,241,925) (7,597,202) (6,713,380) (22,403,219) (5,457,968) (18,443,747) (10,903,475) (36,221,129)
----------- ------------ ----------- ------------ ---------- ------------ ----------- ------------
Net
increase
(decrease) 1,855,407 $ 6,301,808 5,666,911 $ 19,757,567 8,264,100 $ 27,938,334 23,521,805 $ 80,163,832
=========== ============ =========== ============ ========== ============ =========== ============
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 "State Street", 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's discretionary bid rate on the uncommitted line of credit. The
Trust, on behalf of each of the Funds, has paid State Street for its own
account, such Fund's ratable portion of an upfront fee in an amount equal to
$100,000 in the aggregate for the committed and uncommitted lines of credit
and the committed line of credit made available by State Street to certain
other funds managed by the Adviser, which are also party to the uncommitted
line of credit. The $100,000 upfront fee is inclusive of a closing fee of 5
basis points on the uncommitted line of credit. There is also a commitment
fee of 25 basis points per annum on the daily unused portion of the
committed line of credit. Borrowings under the line of credit will commence
when the respective Fund's cash shortfall exceeds $100,000.
For the six months ended September 30, 2016, the following Funds had
borrowings:
Average Weighted
Days Interest Debt Average
Fund Outstanding Charges Utilized Interest
---- ----------- -------- ---------- --------
U.S. Government Securities. 2 $ 257 $2,647,390 1.76%
Flexible Credit............ 70 4,732 1,395,089 1.73
At September 30, 2016, the following fund had an outstanding borrowing:
Fund Amount
---- ----------
Flexible Credit. $1,211,297
Note 8. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the Securities and Exchange
Commission, the Funds are permitted to participate in an interfund lending
program among investment companies advised by SunAmerica or an affiliate.
The interfund lending program
82
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited)
(continued)
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 period ended September 30, 2016, none of the
Funds participated in this program.
Note 9. Investment Concentration
The Flexible Credit Fund's investment in high yield securities, whether
rated or unrated, may be considered speculative and subject to greater
market fluctuations and risk of loss of income and principal than
lower-yielding, higher-rated, fixed-income securities. The risk of loss due
to default by the issuer may be significantly greater for the holders of
high yield securities, because such securities are generally unsecured and
are often subordinated to other creditors of the issuer.
The Flexible Credit Fund and Strategic Bond Fund invest in participations
and assignments, or act as a party to the primary lending syndicate of a
variable rate senior loan interest to United States corporations,
partnerships, and other entities. If the lead lender in a typical lending
syndicate becomes insolvent, enters receivership or, if not FDIC insured,
enters into bankruptcy, a Fund may incur certain costs and delays in
receiving payment, or may suffer a loss of principal and/or interest. When a
Fund purchases a participation of a senior loan interest, the Fund typically
enters into a contractual agreement with the lender or other third party
selling the participation but not with the borrower directly. As such, a
Fund is subject to the credit risk of the borrower, selling participant,
lender or other persons positioned between the Funds and the borrower.
Each Fund may invest in obligations issued by agencies and instrumentalities
of the U.S. Government that may vary in the level of support they receive
from the government. The government may choose not to provide financial
support to government sponsored agencies or instrumentalities if it is not
legally obligated to do so, and if the issuer defaults, a fund holding
securities of such issuer might not be able to recover its investment from
the U.S. Government. As a result of the U.S. Government Fund's concentration
in such investments, it may be subject to risks associated with U.S.
Government agencies or instrumentalities.
83
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited)
Approval of the Investment Advisory and Management Agreement and Subadvisory
Agreements
The Board of Trustees (the "Board" the members of which are referred to as
"Trustees") of SunAmerica Income Funds (the "Trust"), including the Trustees
who are not "interested persons," as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent
Trustees"), of the Trust or its separate series (each, a "Fund," and
collectively, the "Funds"), SunAmerica Asset Management, LLC ("SunAmerica"),
PineBridge Investments LLC ("PineBridge") and Newfleet Asset Management, LLC
("Newfleet," and together with PineBridge, the "Subadvisers"), approved the
continuation of the Investment Advisory and Management Agreement between the
Trust, on behalf of the Funds, and SunAmerica (the "Advisory Agreement") for a
one-year period ending June 30, 2017 at an in-person meeting held on June 7-8,
2016 (the "Meeting"). The Trust currently consists of the following three
separate Funds: SunAmerica Flexible Credit Fund ("Flexible Credit Fund"),
SunAmerica Strategic Bond Fund ("Strategic Bond Fund") and SunAmerica U.S.
Government Securities Fund ("U.S. Government Securities Fund").
At the Meeting, the Board, including the Independent Trustees, also approved
the continuation of the Subadvisory Agreement between SunAmerica and PineBridge
with respect to the Strategic Bond Fund and the Subadvisory Agreement between
SunAmerica and Newfleet with respect to the Flexible Credit Fund (the
"Subadvisory Agreements" and together with the Advisory Agreement, the
"Agreements") for a one-year period ending June 30, 2017.
In accordance with Section 15(c) of the 1940 Act, the Board requested, and
SunAmerica and the Subadvisers provided, materials relating to the Board's
consideration of whether to approve the continuation of the Agreements. These
materials included, as applicable: (a) a summary of the services provided or to
be provided, as applicable, by SunAmerica and its affiliates to the Funds and
by the Subadvisers; (b) information independently compiled and prepared by
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent third-party
provider of mutual fund data, on fees and expenses of the Funds, and the
investment performance of the Funds as compared with a peer group of funds,
along with fee and performance data with respect to the Funds and any other
mutual funds or other accounts advised or subadvised by SunAmerica or the
Subadvisers with similar investment objectives and/or strategies, as
applicable; (c) information on the profitability of SunAmerica and its
affiliates, and a discussion relating to indirect benefits; (d) information
relating to economies of scale; (e) information about SunAmerica's general
compliance policies and procedures and the services it provides in connection
with its oversight of subadvisers; (f) information about SunAmerica's and the
Subadvisers' risk management processes; (g) information regarding brokerage and
soft dollar practices; and (h) information about the key personnel of
SunAmerica and its affiliates, and the Subadvisers, that are involved in the
investment management, administration, compliance and risk management
activities with respect to the Funds, as well as current and projected staffing
levels and compensation practices.
In determining whether to approve the continuation of the Agreements, the
Board, including the Independent Trustees, considered at the Meeting, and from
time to time as appropriate, factors it deemed relevant, including the
following information:
Nature, Extent and Quality of Services Provided by SunAmerica and the
Subadvisers. The Board, including the Independent Trustees, considered the
nature, extent and quality of services provided by SunAmerica. The Board noted
that the services include acting as investment manager and adviser to the
Funds, managing the daily business affairs of the Funds, and obtaining and
evaluating economic, statistical and financial information to formulate and
implement investment policies. Additionally, the Board observed that SunAmerica
provides office space, bookkeeping, accounting, legal, and compliance, clerical
and administrative services and has authorized its officers and employees, if
elected, to serve as officers or trustees of the Trust without compensation.
The Board also noted that SunAmerica is responsible for monitoring and
reviewing the activities of affiliated and unaffiliated third-party service
providers, including the Subadvisers. In addition to the quality of the
advisory services provided by SunAmerica, the Board considered the quality of
the administrative and other services provided by SunAmerica to the Funds
pursuant to the Advisory Agreement.
In connection with the services provided by SunAmerica, the Board analyzed the
structure and duties of SunAmerica's fund administration, accounting,
operations, legal and compliance departments and concluded that they were
adequate to meet the needs of the Funds. The Board also reviewed the personnel
responsible for providing advisory services to the Funds and other key
personnel of SunAmerica, in addition to current and projected staffing levels
and compensation practices. The Board concluded, based on its experience and
interaction with SunAmerica, that: (i) SunAmerica would continue to be able to
retain quality investment and other personnel; (ii) SunAmerica has exhibited a
high level of diligence and attention to detail in carrying out its advisory
and other responsibilities under the Advisory Agreement; (iii) SunAmerica has
been responsive to requests of the Board; and (iv) SunAmerica
84
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited)
(continued)
has kept the Board apprised of developments relating to the Funds and the
industry in general. The Board concluded that the nature and extent of services
provided under the Advisory Agreement were reasonable and appropriate in
relation to the management fee and that the quality of services continues to be
high.
The Board also considered SunAmerica's reputation and long-standing
relationship with the Funds and considered the benefit to shareholders of
investing in funds that are part of a family of funds offering a variety of
types of mutual funds and shareholder services. The Board considered
SunAmerica's experience in providing management and investment advisory and
administrative services to advisory clients and noted that as of March 31,
2016, SunAmerica managed, advised and/or administered approximately $79.5
billion in assets. In addition, the Board considered SunAmerica's code of
ethics and its commitment to compliance generally and with respect to its
management and administration of the Funds. The Board also considered
SunAmerica's risk management processes. The Board further observed that
SunAmerica has developed internal procedures for monitoring compliance with the
investment objectives, policies and restrictions of the Funds as set forth in
the Funds' prospectuses. The Board also reviewed SunAmerica's compliance and
regulatory history and noted that there were no material legal, regulatory or
compliance issues that would potentially impact SunAmerica from effectively
serving as the investment adviser to the Funds.
The Board also considered the nature, extent and quality of services provided
by each Subadviser to the applicable Funds. The Board observed that the
Subadvisers are responsible for providing day-to-day investment management
services, including investment research, advice and supervision, and
determining which securities will be purchased or sold by the Fund that each
Subadviser manages, subject to the oversight and review of SunAmerica. The
Board reviewed each Subadviser's history, structure, size, visibility and
resources, which are needed to attract and retain highly qualified investment
professionals. The Board reviewed the personnel that are responsible for
providing subadvisory services to the Funds, in addition to current and
projected staffing levels and compensation practices, and concluded, based on
its experience with the Subadvisers, that each Subadviser: (i) has been able to
retain high quality portfolio managers and other investment personnel; (ii) has
exhibited a high level of diligence and attention to detail in carrying out its
responsibilities under the applicable Subadvisory Agreement; and (iii) has been
responsive to requests of the Board and of SunAmerica. In addition, the Board
considered each Subadviser's code of ethics and risk management processes. The
Board further observed that each Subadviser has developed internal policies and
procedures for monitoring compliance with the investment objectives, policies
and restrictions of the Funds as set forth in the Funds' Prospectuses. The
Board also reviewed each Subadviser's compliance and regulatory history and
noted that there were no material legal, regulatory or compliance issues that
would potentially impact the Subadvisers from effectively serving as
Subadvisers to the Funds. The Board concluded that the nature and extent of
services provided by each Subadviser under the respective Subadvisory Agreement
were reasonable and appropriate in relation to the subadvisory fee and that the
quality of services continues to be high.
Investment Performance. The Board, including the Independent Trustees, also
considered the investment performance of SunAmerica and the Subadvisers with
respect to the Funds, as applicable. In connection with its review, the Board
received and reviewed information regarding the investment performance of the
Funds as compared to each Fund's peer group ("Peer Group") and/or peer universe
("Peer Universe") as independently determined by Broadridge and to an
appropriate index or combination of indices, including the Funds' benchmarks.
The Board was provided with a description of the methodology used by Broadridge
to select the funds in each Peer Group and Peer Universe.
The Board noted that performance information was for the periods ended
March 31, 2016. The Board also noted that it regularly reviews the performance
of the Funds throughout the year. The Board further noted that, while it
monitors performance of the Funds closely, it generally attaches more
importance to performance over relatively long periods of time, typically three
to five years.
U.S. Government Securities Fund. The Board considered that the Fund's
performance was below the median of its Peer Group and Peer Universe for the
one-, three- and five-year periods. The Board also considered that the Fund
underperformed its Broadridge Index for the one-, three- and five-year periods.
The Board considered that a new management team within SunAmerica assumed
responsibility for day-to-day management of the Fund, effective July 2014. The
Board noted management's discussion of the Fund's performance, including
continued monitoring of the Fund and concluded that the Fund's performance was
being addressed.
Flexible Credit Fund. The Board considered that the Fund's performance was
above the median of its Peer Group and Peer Universe for the one-, three- and
five-year periods. The Board further considered that the Fund outperformed its
Broadridge Index for the one- and three-year periods. The Board noted
management's discussion of the Fund's performance and that effective October 1,
2014, the
85
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited)
(continued)
Fund changed its name and certain of the Fund's principal investment strategies
and techniques, and Newfleet was appointed as the subadviser to the Fund. The
Board concluded that the Fund's performance was satisfactory.
Strategic Bond Fund. The Board considered that the Fund's performance was below
the median of its Peer Group and Peer Universe for the one-, three- and
five-year periods and that the Fund underperformed its Broadridge Index for the
one-, three- and five-year periods. The Board noted management's discussion of
the Fund's performance and that the Board had approved certain changes to the
Fund's principal investment strategy effective July 29, 2014, and concluded
that the Fund's performance was being addressed.
Consideration of the Management Fees and Subadvisory Fee and the Cost of the
Services and Profits to be Realized by SunAmerica, the Subadvisers and their
Affiliates from the Relationship with the Funds. The Board, including the
Independent Trustees, received and reviewed information regarding the fees to
be paid by the Funds to SunAmerica pursuant to the Advisory Agreement and the
fees to be paid by SunAmerica to the Subadvisers pursuant to the Subadvisory
Agreements. The Board examined this information in order to determine the
reasonableness of the fees in light of the nature and quality of services to be
provided and any potential additional benefits to be received by SunAmerica,
the Subadvisers or their affiliates in connection with providing such services
to the Funds.
To assist in analyzing the reasonableness of the management fee for each of the
Funds, the Board received reports independently prepared by Broadridge. The
reports showed comparative fee information for each Fund's Peer Group and/or
Peer Universe as determined by Broadridge, including rankings within each
category. In considering the reasonableness of the management fee to be paid by
each Fund to SunAmerica, the Board reviewed a number of expense comparisons,
including: (i) contractual and actual management fees; and (ii) actual total
operating expenses. In considering each Fund's total operating expenses, the
Board analyzed the level of fee waivers and expense reimbursements and the net
expense caps contractually agreed upon by SunAmerica with respect to each Fund.
The Board further considered that, unlike the funds in each Peer Group and Peer
Universe, the fee waivers and/or reimbursements being made by SunAmerica with
respect to the Funds are only reflected in the total expenses category of the
Broadridge reports, rather than also being reflected as specific management fee
waivers in the actual management fee category of the Broadridge reports. As a
result, the Board took into account that the actual management fees presented
by Broadridge for the funds in each Peer Group and Peer Universe may appear
lower on a relative basis. The Board also considered the various expense
components of the Funds and compared each Fund's net expense ratio (taking into
account the contractual fee caps and waivers) to those of other funds within
its Peer Group and/or Peer Universe as a guide to help assess the
reasonableness of the management fee for the Funds. The Board acknowledged that
it was difficult to make precise comparisons with other funds in the Peer
Groups and Peer Universes since the exact nature of services provided under the
various fund agreements is often not apparent. The Board noted, however, that
the comparative fee information provided by Broadridge as a whole was useful in
assessing whether SunAmerica was providing services at a cost that was
competitive with other, similar funds.
The Board also considered the management fees received by SunAmerica with
respect to other mutual funds and accounts with similar investment strategies
to the Funds, to the extent applicable. The Board noted, however, that the
mutual funds identified as similar to the U.S. Government Securities Fund are
sold only in the variable annuity market and, accordingly, are in different
Broadridge classifications, with a peer groups consisting of funds underlying
variable insurance products. The Board then noted the management fees paid by
the Funds were reasonable as compared to the fees SunAmerica was receiving from
other mutual funds and accounts for which it serves as adviser or subadviser.
The Board also received and reviewed information regarding the fees paid by
SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. To assist
in analyzing the reasonableness of the subadvisory fees, the Board received a
report independently prepared by Broadridge. The report showed comparative fee
information of the Funds' Peer Groups and/or Peer Universe that the Board used
as a guide to help assess the reasonableness of the subadvisory fees. The Board
noted that Peer Group information as a whole was useful in assessing whether
the Subadvisers were providing services at a cost that was competitive with
other similar funds. The Board also considered that the subadvisory fees are
paid by SunAmerica out of its management fee and not by the Funds, and that
subadvisory fees may vary widely within a Peer Group for various reasons,
including market pricing demands, existing relationships, experience and
success, and individual client needs. The Board further considered the amount
of subadvisory fees paid out by SunAmerica and the amount of the management
fees which it retained and determined that these amounts were reasonable in
light of the services performed by SunAmerica and the Subadvisers, respectively.
86
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited)
(continued)
The Board also considered advisory fees received by the Subadvisers with
respect to other mutual funds and accounts with similar investment strategies
to the Funds. The Board then noted that the subadvisory fee paid by SunAmerica
to PineBridge was reasonable as compared to fees PineBridge receives for other
mutual funds and accounts for which it serves as adviser or subadviser. The
Board also noted that Newfleet indicated that it does not serve as adviser or
subadviser to any fund or account with a similar investment policy as the
Flexible Credit Fund.
U.S. Government Securities Fund. The Board considered that the Fund's actual
management fees were above the median of its Peer Group and Peer Universe. The
Board also considered that the Fund's total expenses were above the median of
its Peer Group and Peer Universe. The Board noted that the Fund's advisory fee
contains breakpoints and further noted management's discussion regarding the
Fund's expenses.
Flexible Credit Fund. The Board considered that the Fund's actual management
fees were above the median of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the median of its Peer
Group and Peer Universe. The Board noted that the Fund's advisory fee contains
breakpoints and further noted management's discussion regarding the Fund's
expenses.
Strategic Bond Fund. The Board considered that the Fund's actual management
fees were above the median of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the median of its Peer
Group and Peer Universe. The Board noted that the Fund's advisory fee contains
breakpoints and further noted management's discussion regarding the Fund's
expenses.
Profitability. The Board also considered SunAmerica's profitability and the
benefits SunAmerica and its affiliates received from its relationship with the
Funds. The Board received and reviewed financial statements relating to
SunAmerica's financial condition and profitability with respect to the services
it provided the Funds and considered how profit margins could affect
SunAmerica's ability to attract and retain high quality investment
professionals and other key personnel. The Board was also provided with a
profitability analysis that detailed the revenues earned and the expenses
incurred by SunAmerica and its affiliates that provide services to the Funds on
a Fund by Fund basis. The Board also considered the contractual fee waivers
and/or expense reimbursements agreed to by SunAmerica.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, including the amount of management fees it retained after payment to
the Subadvisers, and considered the profitability of SunAmerica's affiliates
under the Rule 12b-1 Plans and Service Agreements. Additionally, the Board
considered whether SunAmerica and their affiliates received any indirect
benefits from the relationship with the Funds. Specifically, the Board observed
that AIG Federal Savings Bank, an affiliate of SunAmerica serves as custodian
with respect to certain shareholder retirement accounts that are administered
by SunAmerica and receives a fee payable by the qualifying shareholders. The
Board further considered whether there were any collateral or "fall-out"
benefits that SunAmerica and its affiliates may derive as a result of their
relationship with the Funds. The Board noted that SunAmerica believes that any
such benefits are de minimis and do not impact the reasonableness of the
management fees.
The Board also reviewed the Subadvisers' financial statements and considered
whether the Subadvisers had the financial resources necessary to attract and
retain high quality investment management personnel and to provide a high
quality of services.
The Board concluded that SunAmerica and the Subadvisers had the financial
resources necessary to perform their obligations under the Agreements and to
continue to provide the Funds with the high quality services that they had
provided in the past. The Board also concluded that the management fee and
subadvisory fee were reasonable in light of the factors discussed above.
Economies of Scale. The Board, including the Independent Trustees, considered
whether the shareholders would benefit from economies of scale and whether
there was potential for future realization of economies with respect to the
Funds. The Board considered that as a result of being part of the SunAmerica
fund complex, the Funds share common resources and may share certain expenses,
and if the size of the complex increases, each Fund could incur lower expenses
than they otherwise would achieve as stand-alone entities. The Board also took
into account that each of the Funds had management fee arrangements that
included breakpoints that will adjust the fee downward as the size of the Fund
increases, thereby allowing the shareholders to potentially participate in any
economies of scale. The Board further noted that SunAmerica has agreed to
contractually cap the total annual operating expenses of
87
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited)
(continued)
the Funds at certain levels. The Board observed that those expense caps and fee
waivers benefited shareholders by limiting total fees even in the absence of
breakpoints or economies of scale. The Board concluded that the Funds'
management fee structure was reasonable and that it would continue to review
fees in connection with the renewal of the Advisory Agreement, including
whether the implementation of additional breakpoints would be appropriate in
the future due to an increase in asset size or otherwise.
The Board noted that the Subadvisory Agreements included breakpoints, but did
not review specific information regarding whether there have been economies of
scale with respect to the Subadvisers' management of the Funds because it
regards that information as less relevant at the subadviser level. Rather, the
Board considered information regarding economies of scale in the context of the
renewal of the Advisory Agreement.
Other Factors. In consideration of the Agreements, the Board also received
information regarding SunAmerica's and the Subadvisers' brokerage and soft
dollar practices. The Board considered that SunAmerica and the Subadvisers are
responsible for decisions to buy and sell securities for the applicable Funds,
selection of broker-dealers and negotiation of commission rates. The Board
noted that it receives reports from SunAmerica and from an independent third
party which include information on brokerage commissions and execution
throughout the year. The Board also considered the benefits SunAmerica and the
Subadvisers derive from their soft dollar arrangements, including arrangements
under which brokers provide brokerage and/or research services to SunAmerica
and/or the Subadvisers in return for allocating brokerage; however, the Board
noted that the securities in which the Funds invest are traded primarily in the
over-the-counter market on a "net" basis with dealers acting as principal for
their own accounts without a stated commission (although the price of the
security usually includes a profit to the dealer) and, therefore, the Funds
generally do not incur brokerage commissions. Accordingly, the Board observed
that SunAmerica and the Subadvisers typically would not receive soft dollar
benefits in return for allocating the Funds' brokerage transactions. The Board
further observed that when making purchases of new issues with fixed
underwriting fees, SunAmerica or the Subadvisers may designate the use of
broker-dealers who have agreed to provide certain statistical, research and
other information.
Conclusion. After a full and complete discussion, the Board approved the
Agreements, each for a one-year period ending June 30, 2017. Based upon their
evaluation of all these factors in their totality, the Board, including the
Independent Trustees, was satisfied that the terms of the Agreements were fair
and reasonable and in the best interests of the Funds and the Funds'
shareholders. In arriving at a decision to approve the Advisory Agreement and
Subadvisory Agreements, the Board did not identify any single factor or group
of factors as all-important or controlling, but considered all factors
together, and each Independent Trustee may have attributed different weights to
different factors. The Independent Trustees were also assisted by the advice of
independent legal counsel in making this determination.
88
[LOGO] SunAmerica
Mutual Funds
Harborside Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Trustees VOTING PROXIES ON DISCLOSURE OF
Richard W. Grant TRUST PORTFOLIO QUARTERLY PORTFOLIO
Peter A. Harbeck SECURITIES HOLDINGS
Dr. Judith L. Craven A description of the The Trust is required
William F. Devin policies and to file its com-plete
Stephen J. Gutman proce-dures that the schedule of portfolio
Officers Trust uses to holdings with the U.S.
John T. Genoy, President determine how to vote Securities and
James Nichols, Vice proxies relating to Exchange Commission
President secu-rities held in a for its first and
Gregory N. Bressler, Fund's portfolio, third fiscal quarters
Secretary which is available in on Form N-Q. The
Kathleen Fuentes, Chief the Trust's Statement Trust's Forms N-Q are
Legal Officer and of Additional available on the
Assistant Secretary Information, may be U.S. Securities and
Gregory R. Kingston, ob-tained without Exchange Commis-sion
Treasurer charge upon request, website at
Donna McManus, Vice by calling (800) www.sec.gov. You can
President and 858-8850. The also review and obtain
Assistant Treasurer in-formation is also copies of the Forms
Shawn Parry, Vice available from the N-Q at the U.S.
President and EDGAR database on the Securities and
Assistant Treasurer U.S. Secu-rities and Exchange Commission
Matthew J. Hackethal, Exchange Commission's Public Refer-ence Room
Acting Chief website at in Washington DC
Compliance Officer, http://www.sec.gov. (information on the
Anti-Money Laundering DELIVERY OF operation of the
Compliance Officer SHAREHOLDER DOCUMENTS Public Reference Room
Investment Adviser The Funds have adopted may be ob-tained by
SunAmerica Asset a policy that allows calling
Management, LLC them to send only one 1-800-SEC-0330).
Harborside Financial copy of a Fund's PROXY VOTING RECORD ON
Center prospectus, proxy SUNAMERICA INCOME FUNDS
3200 Plaza 5 material, annual Information regarding
Jersey City, NJ report and semi-annual how the Funds voted
07311-4992 report (the proxies relating to
Distributor "shareholder securities held in the
AIG Capital Services, documents") to Funds during the most
Inc. shareholders with recent twelve month
Harborside Financial multiple accounts period ended June 30
Center residing at the same is available, once
3200 Plaza 5 "household." This filed with the U.S.
Jersey City, NJ practice is called Securities and
07311-4992 householding and Exchange Commission,
Shareholder Servicing reduces Fund expenses, without charge, upon
Agent which benefits you and request, by calling
SunAmerica Fund other shareholders. (800) 858-8850 or on
Services, Inc. Unless the Funds the U.S. Securities
Harborside Financial receive instructions and Exchange
Center to the con-trary, you Commission's website
3200 Plaza 5 will only receive one at http://www.sec.gov.
Jersey City, NJ copy of the This report is
07311-4992 shareholder documents. submitted solely for
Custodian and Transfer The Funds will the general
Agent continue to household information of
State Street Bank and the share-holder shareholders of the
Trust Company documents Funds. Distribution of
One Lincoln Street indefinitely, until we this report to persons
Boston, MA 02111 are instructed other than
otherwise. If you do shareholders of the
not wish to Funds is authorized
participate in only in con-nection
householding please with a currently
contact Shareholder effective pro-spectus,
Services at (800) setting forth details
858-8850 ext. 6010 or of the Funds, which
send a written request must precede or
with your name, the accom-pany this report.
name of your fund(s) The accompanying
and your account report has not been
number(s) to audited by independent
SunAmerica Mutual accountants and
Funds c/o BFDS, P.O. accordingly no
Box 219186, Kansas opinions have been
City MO, 64121-9186. expressed thereon.
We will resume
individual mailings
for your account
within thirty (30)
days of receipt of
your request.
GO PAPERLESS!!
DID YOU KNOW THAT YOU HAVE THE OPTION TO
RECEIVE YOUR SHAREHOLDER REPORTS ONLINE?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
IT'S QUICK -- Fund documents will be received faster than via traditional mail.
IT'S CONVENIENT -- Elimination of bulky documents from personal files.
IT'S COST EFFECTIVE -- Reduction of your Fund's printing and mailing costs.
TO SIGN UP FOR ELECTRONIC DELIVERY, FOLLOW
THESE SIMPLE STEPS:
1 GO TO WWW.SAFUNDS.COM
2 CLICK ON THE LINK TO "GO PAPERLESS!!"
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.safunds.com at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
FOR INFORMATION ON RECEIVING THIS REPORT ONLINE, SEE INSIDE BACK COVER.
DISTRIBUTED BY:
AIG CAPITAL SERVICES, INC.
This fund report must be preceded by or accompanied by a prospectus.
Investors should carefully consider a Fund's investment objectives, risks,
charges and expenses before investing. The prospectus, containing this and
other important information, can be obtained from your financial adviser, the
SunAmerica Sales Desk at 800-858-8850, ext. 6003, or at www.safunds.com. Read
the prospectus carefully before investing.
WWW.SAFUNDS.COM
INSAN - 9/16
[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 in Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Exhibits.
(a) (1) Not applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as
Exhibit 99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Income Funds
By: /s/ John T. Genoy
-----------------------
John T. Genoy
President
Date: December 8, 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: December 8, 2016
By: /s/ Gregory R. Kingston
-----------------------
Gregory R. Kingston
Treasurer
Date: December 8, 2016