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 811-21482
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SunAmerica Specialty Series
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside 5, 185 Hudson Street, Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management, LLC
Harborside 5,
185 Hudson Street,
Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
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Date of fiscal year end: October 31
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Date of reporting period: October 31, 2018
------------------------
Item 1. Reports to Stockholders
2018 ANNUAL REPORT
SunAmerica Specialty Series
Commodity Strategy Fund
ESG Dividend Fund
Focused Alpha Large-Cap Fund
Focused Multi-Cap Growth Fund
Income Explorer Fund
Small-Cap Fund
[GRAPHIC]
[LOGO]
Table of Contents
A MESSAGE FROM THE PRESIDENT................................ 2
EXPENSE EXAMPLE............................................. 4
STATEMENT OF ASSETS AND LIABILITIES......................... 6
STATEMENT OF OPERATIONS..................................... 8
STATEMENT OF CHANGES IN NET ASSETS.......................... 10
FINANCIAL HIGHLIGHTS........................................ 12
PORTFOLIO OF INVESTMENTS.................................... 18
NOTES TO FINANCIAL STATEMENTS............................... 65
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..... 90
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT
AGREEMENTS AND SUBADVISORY AGREEMENTS....................... 91
TRUSTEE AND OFFICER INFORMATION............................. 96
SHAREHOLDER TAX INFORMATION................................. 99
COMPARISONS: FUNDS vs. INDICES.............................. 101
SUPPLEMENTS TO THE PROSPECTUS............................... 120
A Message from the President -- (unaudited)
Dear Shareholders:
We are pleased to present this annual update for the SunAmerica Specialty
Series, including AIG Commodity Strategy Fund, AIG ESG Dividend Fund, AIG
Focused Alpha Large-Cap Fund, AIG Focused Multi-Cap Growth Fund, AIG Income
Explorer Fund and AIG Small-Cap Fund (the "Funds"), for the 12-month period
ended October 31, 2018.
Overall, the 12 months ended October 31, 2018 was a period wherein global
equity markets showed modestly positive gains, while global fixed income
markets and commodities struggled, generating negative absolute returns, all
against a backdrop of economic expansion and rising interest rates, especially
in the U.S.
With the exception of a two-month span of volatility in February and March
2018, global equity markets maintained an upward trajectory though much of the
annual period, reaching new highs in late September. Robust corporate earnings,
low unemployment levels and strong economic growth fueled the bull market run,
offsetting challenges arising from trade tensions and other geopolitical
concerns, interest rate increases and persistent turmoil in Washington, D.C.
Market volatility returned in October 2018, as investors reacted to a more
hawkish tone from the U.S. Federal Reserve (the "Fed"), speculation about the
impact both in the U.S. and globally of the ongoing trade war and uncertainty
surrounding the U.S. midterm elections in early November 2018. The Fed raised
interest rates three times during the annual period as part of its
normalization of monetary policy. Slowing economic growth outside the U.S.,
including a disappointing economic outlook from China, and softer third quarter
2018 corporate earnings guidance from a number of U.S. companies further
exacerbated the volatility late in the annual period. Global equities posted
their worst monthly performance in October 2018 since May 2010.
Commodities rallied through most of the annual period, led by strength in the
energy sector. However, in October 2018, commodities declined significantly, as
positive returns from precious metals and agriculture and livestock were unable
to offset poor results in energy and industrial metals. Energy suffered its
worst results in more than two years but remained the only positive performer
within the asset class for the annual period overall. Industrial metals was the
weakest commodity sector for the annual period in the wake of increased global
trade tensions.
During the annual period overall, developed market equities, as measured by the
MSCI World Index,/*/ substantially outperformed emerging market equities, as
measured by the MSCI Emerging Markets Index./*/ Among the developed markets,
U.S. equities, as measured by the S&P 500 Index,/*/ significantly outperformed
non-U.S. equities, as measured by the MSCI EAFE Index./*/ Within the U.S.
equity market, large-cap stocks performed best, followed at some distance by
mid-cap stocks and then small-cap stocks. Growth stocks significantly outpaced
value stocks across the capitalization spectrum.
Within the fixed income asset class, emerging markets debt and U.S. investment
grade corporate bonds were among the weakest performing sectors.
Mortgage-backed securities posted a negative return but outperformed U.S.
Treasuries. U.S. high yield corporate bonds and asset-backed securities posted
modestly positive returns for the annual period. In the U.S., the yield curve,
or spectrum of maturities, flattened, as yields on shorter-term maturities,
which were heavily influenced by Fed interest rate increases, generally rose
more than yields on intermediate- and longer-term maturities. The 10-year U.S.
Treasury yield ended the annual period at approximately 3.15%.
On the following pages, you will find the financial statements and portfolio
information for each of the Funds for the annual period ended October 31, 2018.
You will also find a comprehensive review of the portfolios' performance and
management strategies over the same annual period.
2
A Message from the President -- (unaudited) (continued)
Thank you for being a part of the SunAmerica Specialty Series Funds. We value
your ongoing confidence in us and look forward to serving your investment needs
in the future.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
President & CEO
SunAmerica Asset Management, LLC
--------
Past performance is no guarantee of future results. Diversification and asset
allocation do not guarantee a profit nor protect against a loss.
* The MSCI World Index is a free float-adjusted market capitalization-weighted
index that is designed to measure the equity market performance of 23
developed markets. The MSCI Emerging Markets Index is a free float-adjusted
market capitalization index that is designed to measure equity market
performance of 23 emerging markets. The S&P 500 Index is an unmanaged,
weighted index of 500 large company stocks that is widely-recognized as
representative of the performance of the U.S. stock market. The MSCI EAFE
(Europe, Australasia, Far East) Index is a free float-adjusted market
capitalization index that is designed to measure the equity market
performance of 21 developed markets, excluding the US & Canada. Indices are
not managed and an investor cannot invest directly into an index.
The AIG Commodity Strategy Fund is not a complete investment program and should
not be an investor's sole investment because its performance is linked to the
performance of highly volatile commodities. Investors should consider buying
shares of the AIG Commodity Strategy Fund only as part of an overall portfolio
strategy that includes other asset classes, such as fixed income and equity
investments. Investors in the AIG Commodity Strategy Fund should be willing to
assume greater risks of potentially significant short-term share price
fluctuation because of the AIG Commodity Strategy Fund's investments in
commodity-linked derivative instruments.
The risks associated with the use of futures contracts by the AIG Commodity
Strategy Fund include the risk that: (i) changes in the price of a futures
contract may not always track the changes in market value of the underlying
reference asset; (ii) trading restrictions or limitations may be imposed by an
exchange, and government regulations may restrict trading in futures contracts;
and (iii) if the Fund has insufficient cash to meet margin requirements, the
Fund may need to sell other investments, including at disadvantageous times.
Forwards are not exchange-traded and therefore no clearinghouse or exchange
stands ready to meet the obligations of the contracts. Thus, the Fund faces the
risk that its counterparties may not perform their obligations. Investments
that provide exposure to foreign markets involve special risks, such as
currency fluctuations, differing financial reporting and regulatory standards,
and economic and political instability. These risks are highlighted when the
issuer is in an emerging market. Fixed income securities and currency and fixed
income futures are subject to changes in their value when prevailing interest
rates change. Adverse changes in currency exchange rates (relative to the U.S.
dollar) may erode or reverse any potential gains from futures instruments that
are tied to foreign instruments or currencies. The Fund also has exposure to
the commodities markets, which may subject it to greater volatility than
investments in traditional securities. The AIG Commodity Strategy Fund expects
to invest a significant portion of its assets in repurchase agreements
collateralized by the U.S. government and its agencies, and may also invest in
other high-quality, short-term securities ("money market instruments"). The
primary purpose of the repurchase agreements and other money market instruments
held by the Fund will be to serve as collateral for the futures instruments.
The Fund's investments in repurchase agreements involve certain risks involving
the default or insolvency of the seller and counterparty risk (i.e., the risk
that the counterparty will not perform its obligations). The Fund's returns are
expected to be derived principally from changes in the value of the assets
underlying the futures instruments held by the Fund. Active trading of the
Fund's portfolio may result in high portfolio turnover and correspondingly
greater brokerage commissions and other transaction costs, which will be borne
directly by the Fund and which will affect the Fund's performance. Active
trading may also result in increased tax liability for Fund shareholders.
Investors should note that the ability of the subadviser to successfully
implement the Fund's strategies, including the proprietary investment processes
used by the subadviser, will influence the performance of the Fund
significantly.
Focused funds are less diversified than typical mutual funds; therefore, the
performance of each holding in a focused fund has a greater impact upon the
overall portfolio, which increases risk. Stocks of small-cap and mid-cap
companies are generally more volatile than and not as readily marketable as
those of larger companies, and may have fewer resources and a greater risk of
business failure than do large companies.
3
SunAmerica Specialty Series
EXPENSE EXAMPLE -- October 31, 2018 -- (unaudited)
Disclosure of Fund Expenses in Shareholder Reports
As a shareholder of a Fund (each a "Fund" and collectively, the "Funds") in the
SunAmerica Specialty Series (the "Trust"), you may incur two types of costs:
(1) transaction costs, including applicable sales charges (loads) on purchase
payments and contingent deferred sales charges and (2) ongoing costs, including
management fees; distribution and account maintenance fees; and other Fund
expenses. This Example 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 May 1, 2018 and held until October 31, 2018.
Actual Expenses
The "Actual" section of the table provides information about your 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 October 31, 2018" to estimate the expenses you paid
on your account during this period. For shareholder accounts in classes other
than Class W, the "Expenses Paid During the Six Months Ended October 31, 2018"
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 October 31, 2018" column and the "Annualized Expense Ratio" column
do not include administrative or other 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 advisers for a full description of these fees. Had these fees
been included, the "Expenses Paid During the Six Months Ended October 31, 2018"
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. For shareholder accounts in classes other than Class W, the
"Expenses Paid During the Six Months Ended October 31, 2018" 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
October 31, 2018" column and the "Annualized Expense Ratio" column do not
include administrative or other 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 advisers for a full description of these fees. Had these fees been
included, the "Expenses Paid During the Six Months Ended October 31, 2018"
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 materials from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs and other fees were included, your costs would have been
higher.
4
SunAmerica Specialty Series
EXPENSE EXAMPLE -- October 31, 2018 -- (unaudited) (continued)
Actual Hypothetical
----------------------------------------------- ----------------------------------------------
Ending Account
Ending Account Expenses Paid Value Using a Expenses Paid
Beginning Value Using During the Beginning Hypothetical 5% During the
Account Value Actual Return at Six Months Ended Account Value Annual Return Six Months Ended
at May 1, October 31, October 31, at May 1, at October 31, October 31,
2018 2018 2018* 2018 2018 2018*
------------- ---------------- ---------------- ------------- --------------- ----------------
AIG Commodity Strategy
Fund@
Class A#.................. $1,000.00 $ 914.55 $ 8.30 $1,000.00 $1,016.53 $ 8.74
Class C#.................. $1,000.00 $ 910.86 $11.41 $1,000.00 $1,013.26 $12.03
Class W#.................. $1,000.00 $ 914.36 $ 7.33 $1,000.00 $1,017.54 $ 7.73
AIG ESG Dividend Fund
Class A#.................. $1,000.00 $1,031.81 $ 6.40 $1,000.00 $1,018.90 $ 6.36
Class C#.................. $1,000.00 $1,028.45 $ 9.71 $1,000.00 $1,015.63 $ 9.65
Class W#.................. $1,000.00 $1,032.85 $ 5.38 $1,000.00 $1,019.91 $ 5.35
AIG Focused Alpha Large-Cap
Fund
Class A................... $1,000.00 $1,040.74 $ 8.38 $1,000.00 $1,016.99 $ 8.29
Class C................... $1,000.00 $1,037.20 $11.86 $1,000.00 $1,013.56 $11.72
Class W#.................. $1,000.00 $1,041.53 $ 7.82 $1,000.00 $1,017.54 $ 7.73
AIG Focused Multi-Cap
Growth Fund
Class A................... $1,000.00 $1,003.93 $ 8.28 $1,000.00 $1,016.94 $ 8.34
Class C................... $1,000.00 $1,000.69 $11.70 $1,000.00 $1,013.51 $11.77
Class W................... $1,000.00 $1,005.17 $ 7.33 $1,000.00 $1,017.90 $ 7.38
AIG Income Explorer Fund
Class A#.................. $1,000.00 $ 952.29 $ 8.46 $1,000.00 $1,016.53 $ 8.74
Class C#.................. $1,000.00 $ 949.00 $11.64 $1,000.00 $1,013.26 $12.03
Class W#.................. $1,000.00 $ 953.25 $ 7.48 $1,000.00 $1,017.54 $ 7.73
AIG Small-Cap Fund
Class A#.................. $1,000.00 $1,017.09 $ 8.74 $1,000.00 $1,016.53 $ 8.74
Class C#.................. $1,000.00 $1,013.80 $12.03 $1,000.00 $1,013.26 $12.03
Class W#.................. $1,000.00 $1,018.53 $ 7.73 $1,000.00 $1,017.54 $ 7.73
----------
Annualized
Expense
Ratio*
----------
AIG Commodity Strategy
Fund@
Class A#.................. 1.72%
Class C#.................. 2.37%
Class W#.................. 1.52%
AIG ESG Dividend Fund
Class A#.................. 1.25%
Class C#.................. 1.90%
Class W#.................. 1.05%
AIG Focused Alpha Large-Cap
Fund
Class A................... 1.63%
Class C................... 2.31%
Class W#.................. 1.52%
AIG Focused Multi-Cap
Growth Fund
Class A................... 1.64%
Class C................... 2.32%
Class W................... 1.45%
AIG Income Explorer Fund
Class A#.................. 1.72%
Class C#.................. 2.37%
Class W#.................. 1.52%
AIG Small-Cap Fund
Class A#.................. 1.72%
Class C#.................. 2.37%
Class W#.................. 1.52%
--------
* Expenses are equal to each Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 184 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 document and/or materials from your
financial adviser, for more information.
# During the stated period, the investment adviser either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Funds or
through recoupment provisions, recovered a portion of or all fees and
expenses waived or reimbursed in the previous two fiscal years. As a result,
if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended October 31,
2018" and the "Annualized Expense Ratio" would have been higher. If these
fees and expenses had not been recouped, the "Actual/Hypothetical Ending
Account Value" would have been higher and the "Actual/Hypothetical Expenses
Paid During the Six Months Ended October 31, 2018" and the "Annualized
Expense Ratio" would have been lower.
@ Consolidated (see Note 2 to Notes to Financial Statements)
5
SunAmerica Specialty Series
STATEMENT OF ASSETS AND LIABILITIES -- October 31, 2018
AIG AIG
AIG AIG Focused Focused AIG
Commodity ESG Alpha Multi-Cap Income
Strategy Dividend Large-Cap Growth Explorer
Fund# Fund Fund Fund Fund
----------- ----------- ------------ ------------ -----------
ASSETS:
Investments at value (unaffiliated)*............................... $18,380,530 $25,539,727 $603,686,070 $584,032,709 $53,860,957
Repurchase agreements (cost approximates value).................... 16,580,000 190,000 -- -- --
Cash............................................................... 3,767 131 46,734,969 77,785,547 924,506
Foreign cash*...................................................... -- -- -- -- 98,936
Receivable for:
Shares of beneficial interest sold............................... 81 143,523 232,920 577,467 5,487
Dividends and interest........................................... 6,283 48,238 366,441 -- 295,238
Investments sold................................................. -- -- -- -- --
Other receivables.................................................. -- -- 645,716 -- --
Prepaid expenses and other assets.................................. 5,374 1,298 5,652 5,573 5,247
Cash collateral for futures contracts.............................. 1,328,960 -- -- -- --
Due from broker.................................................... 1,197,000 -- -- -- --
Due from investment adviser for expense reimbursements/fee waivers. 56,685 47,943 -- -- 34,521
Variation margin on futures contracts.............................. 113,133 -- -- -- --
----------- ----------- ------------ ------------ -----------
Total assets..................................................... 37,671,813 25,970,860 651,671,768 662,401,296 55,224,892
----------- ----------- ------------ ------------ -----------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed........................... 164,286 25,328 379,303 430,129 42,051
Investments purchased............................................ -- -- 22,232,649 22,602,966 --
Investments purchased on an extended settlement basis............ -- -- -- -- 49,970
Payments on swap contracts....................................... 320,148 -- -- -- --
Investment advisory and management fees.......................... 26,549 16,567 548,195 556,641 47,883
Distribution and account maintenance fees........................ 12,040 7,520 208,567 220,317 18,225
Transfer agent fees and expenses................................. 9,926 5,869 164,003 173,817 12,161
Trustees' fees and expenses...................................... 122 75 1,738 1,651 94
Other accrued expenses........................................... 122,663 60,562 243,701 234,556 61,573
Due to investment adviser from expense recoupment................ -- -- 1,317 -- --
Call and put options written, at value@.......................... 10 -- -- -- --
Variation margin on futures contracts.............................. 257,900 -- -- -- --
Due to broker...................................................... 120,000 -- -- -- --
Due to custodian................................................... 219,555 -- -- -- --
Unrealized depreciation on swap contracts.......................... 36,027 -- -- -- --
----------- ----------- ------------ ------------ -----------
Total liabilities................................................ 1,289,226 115,921 23,779,473 24,220,077 231,957
----------- ----------- ------------ ------------ -----------
NET ASSETS......................................................... $36,382,587 $25,854,939 $627,892,295 $638,181,219 $54,992,935
=========== =========== ============ ============ ===========
AIG
Small-Cap
Fund
-----------
ASSETS:
Investments at value (unaffiliated)*............................... $64,791,168
Repurchase agreements (cost approximates value).................... 4,865,000
Cash............................................................... 295,621
Foreign cash*...................................................... --
Receivable for:
Shares of beneficial interest sold............................... 136,022
Dividends and interest........................................... 20,856
Investments sold................................................. 1,136,685
Other receivables.................................................. --
Prepaid expenses and other assets.................................. 5,460
Cash collateral for futures contracts.............................. 33
Due from broker.................................................... --
Due from investment adviser for expense reimbursements/fee waivers. 58,772
Variation margin on futures contracts.............................. --
-----------
Total assets..................................................... 71,309,617
-----------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed........................... 27,467
Investments purchased............................................ 745,098
Investments purchased on an extended settlement basis............ --
Payments on swap contracts....................................... --
Investment advisory and management fees.......................... 61,506
Distribution and account maintenance fees........................ 20,385
Transfer agent fees and expenses................................. 16,639
Trustees' fees and expenses...................................... 167
Other accrued expenses........................................... 61,728
Due to investment adviser from expense recoupment................ --
Call and put options written, at value@.......................... --
Variation margin on futures contracts.............................. 350
Due to broker...................................................... --
Due to custodian................................................... --
Unrealized depreciation on swap contracts.......................... --
-----------
Total liabilities................................................ 933,340
-----------
NET ASSETS......................................................... $70,376,277
===========
--------
# Consolidated (see Note 2)
See Notes to Financial Statements
6
SunAmerica Specialty Series
STATEMENT OF ASSETS AND LIABILITIES -- October 31, 2018 -- (continued)
AIG AIG
AIG AIG Focused Focused
Commodity ESG Alpha Multi-Cap
Strategy Dividend Large-Cap Growth
Fund# Fund Fund Fund
------------ ----------- ------------ ------------
NET ASSETS REPRESENTED BY:
Paid-in capital.......................................................... $133,738,002 $24,237,336 $411,017,558 $388,038,954
Total distributable earnings (loss)...................................... (97,355,415) 1,617,603 216,874,737 250,142,265
------------ ----------- ------------ ------------
Net assets............................................................... $ 36,382,587 $25,854,939 $627,892,295 $638,181,219
============ =========== ============ ============
*Cost
Investments (unaffiliated)............................................. $ 18,436,114 $25,872,585 $489,768,064 $449,653,734
============ =========== ============ ============
Foreign cash........................................................... $ -- $ -- $ -- $ --
============ =========== ============ ============
@Premiums received on options written.................................. $ 902 $ -- $ -- $ --
============ =========== ============ ============
Class A (unlimited shares authorized):
Net assets............................................................... $ 32,601,991 $22,972,745 $572,092,073 $493,050,903
Shares of beneficial interest issued and outstanding..................... 4,762,615 1,446,337 18,206,659 16,095,294
Net asset value and redemption price per share (excluding any applicable
contingent deferred sales charge)....................................... $ 6.85 $ 15.88 $ 31.42 $ 30.63
Maximum sales charge (5.75% of offering price)........................... 0.42 0.97 1.92 1.87
------------ ----------- ------------ ------------
Maximum offering price to public......................................... $ 7.27 $ 16.85 $ 33.34 $ 32.50
============ =========== ============ ============
Class C (unlimited shares authorized):
Net assets............................................................... $ 1,907,908 $ 383,821 $ 35,560,552 $ 68,172,882
Shares of beneficial interest issued and outstanding..................... 291,702 24,195 1,192,081 2,350,584
Net asset value, offering and redemption price per share (excluding any
applicable contingent deferred sales charge)............................ $ 6.54 $ 15.86 $ 29.83 $ 29.00
============ =========== ============ ============
Class W (unlimited shares authorized):
Net assets............................................................... $ 1,872,688 $ 2,498,373 $ 20,239,670 $ 76,957,434
Shares of beneficial interest issued and outstanding..................... 269,821 157,223 635,533 2,473,616
Net asset value, offering and redemption price per share................. $ 6.94 $ 15.89 $ 31.85 $ 31.11
============ =========== ============ ============
AIG
Income AIG
Explorer Small-Cap
Fund Fund
----------- -----------
NET ASSETS REPRESENTED BY:
Paid-in capital.......................................................... $57,992,049 $57,930,098
Total distributable earnings (loss)...................................... (2,999,114) 12,446,179
----------- -----------
Net assets............................................................... $54,992,935 $70,376,277
=========== ===========
*Cost
Investments (unaffiliated)............................................. $57,336,124 $58,322,268
=========== ===========
Foreign cash........................................................... $ 100,492 $ --
=========== ===========
@Premiums received on options written.................................. $ -- $ --
=========== ===========
Class A (unlimited shares authorized):
Net assets............................................................... $44,413,028 $50,470,808
Shares of beneficial interest issued and outstanding..................... 3,039,939 2,651,001
Net asset value and redemption price per share (excluding any applicable
contingent deferred sales charge)....................................... $ 14.61 $ 19.04
Maximum sales charge (5.75% of offering price)........................... 0.89 1.16
----------- -----------
Maximum offering price to public......................................... $ 15.50 $ 20.20
=========== ===========
Class C (unlimited shares authorized):
Net assets............................................................... $ 4,360,181 $ 3,099,449
Shares of beneficial interest issued and outstanding..................... 298,957 168,774
Net asset value, offering and redemption price per share (excluding any
applicable contingent deferred sales charge)............................ $ 14.58 $ 18.36
=========== ===========
Class W (unlimited shares authorized):
Net assets............................................................... $ 6,219,726 $16,806,020
Shares of beneficial interest issued and outstanding..................... 425,753 873,618
Net asset value, offering and redemption price per share................. $ 14.61 $ 19.24
=========== ===========
--------
# Consolidated (see Note 2)
See Notes to Financial Statements
7
SunAmerica Specialty Series
STATEMENT OF OPERATIONS -- For the period ended October 31, 2018
AIG AIG
AIG AIG Focused Focused AIG
Commodity ESG Alpha Multi-Cap Income AIG
Strategy Dividend Large-Cap Growth Explorer Small-Cap
Fund# Fund Fund Fund Fund Fund
---------- --------- ----------- ----------- ---------- ----------
INVESTMENT INCOME:
Dividends (unaffiliated).................. $ -- $ 824,478 $ 9,418,447 $ 3,909,159 $2,216,473 $ 487,278
Interest (unaffiliated)................... 624,112 999 13,961 38,809 529,406 20,789
---------- --------- ----------- ----------- ---------- ----------
Total investment income*............... 624,112 825,477 9,432,408 3,947,968 2,745,879 508,067
---------- --------- ----------- ----------- ---------- ----------
EXPENSES:
Investment advisory and management fees.. 473,207 200,841 6,548,986 6,438,577 500,158 675,666
Distribution and account maintenance
fees:
Class A................................ 121,616 83,992 1,909,376 1,722,992 132,977 183,058
Class C................................ 23,142 222 680,725 790,602 52,328 23,624
Service fees:
Class W................................ 3,046 2,567 26,935 93,387 9,713 18,252
Transfer agent fees and expenses:
Class A................................ 82,430 55,360 1,347,156 1,233,233 86,631 121,351
Class C................................ 6,953 1,713 168,437 190,416 13,281 7,499
Class W................................ 5,507 4,576 41,464 138,161 15,374 28,310
Registration fees:
Class A................................ 17,371 19,914 37,952 40,046 27,801 27,158
Class C................................ 14,090 11,312 20,953 18,691 15,632 14,567
Class W................................ 13,663 11,336 14,770 16,315 16,559 21,808
Custodian and accounting fees............ 135,896 29,171 75,696 74,216 33,452 67,310
Reports to shareholders.................. 26,089 20,982 139,487 131,316 26,908 29,663
Audit and tax fees....................... 75,542 64,817 36,339 36,353 54,440 33,583
Legal fees............................... 26,329 17,256 42,151 41,645 24,144 19,043
Trustees' fees and expenses.............. 2,044 1,353 33,258 32,124 2,410 3,292
Deferred offering costs.................. -- 10,954 -- -- -- --
Interest expense......................... -- -- 2,083 2,065 349 7,264
Other expenses........................... 17,278 17,324 30,166 29,683 27,267 58,928
---------- --------- ----------- ----------- ---------- ----------
Total expenses before fee waivers,
expense reimbursements, expense
recoupments and fees paid indirectly.. 1,044,203 553,690 11,155,934 11,029,822 1,039,424 1,340,376
Fees waived and expenses reimbursed
by investment advisor (see Note 4).... (354,057) (219,866) 562 -- (158,044) (178,778)
Fees paid indirectly (see Note 9)...... -- -- (14,013) (29,341) -- --
---------- --------- ----------- ----------- ---------- ----------
Net expenses........................... 690,146 333,824 11,142,483 11,000,481 881,380 1,161,598
---------- --------- ----------- ----------- ---------- ----------
Net investment income (loss).............. (66,034) 491,653 (1,710,075) (7,052,513) 1,864,499 (653,531)
---------- --------- ----------- ----------- ---------- ----------
--------
# Consolidated (see Note 2)
See Notes to Financial Statements
8
SunAmerica Specialty Series
STATEMENT OF OPERATIONS -- For the period ended October 31, 2018 --
(continued)
AIG
AIG AIG Focused
Commodity ESG Alpha
Strategy Dividend Large-Cap
Fund# Fund Fund
----------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated)................................................... $ (62,939) $ 1,966,682 $104,669,184
Futures contracts............................................................ 714,477 -- --
Forward contracts............................................................ -- -- --
Swap contracts............................................................... (729,534) -- --
Written options contracts.................................................... 15,128 -- --
Net realized gain (loss) on disposal of investments in violation of investments
restrictions (Note 4).......................................................... -- (14,608) --
Net increase from reimbursement of investment violation (Note 4)................ -- 14,608 --
Net realized foreign exchange gain (loss) on other assets and liabilities....... 26 -- (2,228)
----------- ----------- ------------
Net realized gain (loss) on investments and foreign currencies.................. (62,842) 1,966,682 104,666,956
----------- ----------- ------------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated)................................................... 121,986 (1,488,613) (56,096,952)
Futures contracts............................................................ (1,537,358) -- --
Forward contracts............................................................ -- -- --
Swap contracts............................................................... (30,625) -- --
Written options contracts.................................................... 1,972 -- --
Net increase from reimbursement of investment violation (Note 4)................ -- 150,670 --
Change in net unrealized foreign exchange gain (loss) on other assets and
liabilities.................................................................... -- -- --
----------- ----------- ------------
Net unrealized gain (loss) on investments and foreign currencies................ (1,444,025) (1,337,943) (56,096,952)
----------- ----------- ------------
Net realized and unrealized gain (loss) on investments and foreign
currencies..................................................................... (1,506,867) 628,739 48,570,004
----------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS..................................................................... $(1,572,901) $ 1,120,392 $ 46,859,929
=========== =========== ============
*Net of foreign withholding taxes on interest and dividends of.................. $ -- $ -- $ 138,126
=========== =========== ============
AIG
Focused AIG
Multi-Cap Income AIG
Growth Explorer Small-Cap
Fund Fund Fund
------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated)................................................... $124,402,736 $ 543,895 $ 7,212,783
Futures contracts............................................................ -- -- 409,520
Forward contracts............................................................ -- 17,067 --
Swap contracts............................................................... -- -- --
Written options contracts.................................................... -- -- --
Net realized gain (loss) on disposal of investments in violation of investments
restrictions (Note 4).......................................................... -- -- --
Net increase from reimbursement of investment violation (Note 4)................ -- -- --
Net realized foreign exchange gain (loss) on other assets and liabilities....... -- (3,156) 1
------------ ----------- -----------
Net realized gain (loss) on investments and foreign currencies.................. 124,402,736 557,806 7,622,304
------------ ----------- -----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated)................................................... (88,684,131) (4,500,650) (3,979,599)
Futures contracts............................................................ -- -- (676,335)
Forward contracts............................................................ -- (1,953) --
Swap contracts............................................................... -- -- --
Written options contracts.................................................... -- -- --
Net increase from reimbursement of investment violation (Note 4)................ -- -- --
Change in net unrealized foreign exchange gain (loss) on other assets and
liabilities.................................................................... -- (3,357) --
------------ ----------- -----------
Net unrealized gain (loss) on investments and foreign currencies................ (88,684,131) (4,505,960) (4,655,934)
------------ ----------- -----------
Net realized and unrealized gain (loss) on investments and foreign
currencies..................................................................... 35,718,605 (3,948,154) 2,966,370
------------ ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS..................................................................... $ 28,666,092 $(2,083,655) $ 2,312,839
============ =========== ===========
*Net of foreign withholding taxes on interest and dividends of.................. $ -- $ 59,677 $ 65
============ =========== ===========
--------
# Consolidated (see Note 2)
See Notes to Financial Statements
9
SunAmerica Specialty Series
STATEMENT OF CHANGES IN NET ASSETS
AIG Commodity
Strategy Fund# AIG ESG Dividend Fund
------------------------ -------------------------
For the
period
December 16,
For the For the For the 2016@
year ended year ended year ended through
October 31, October 31, October 31, October 31,
2018 2017 2018 2017
----------- ----------- ----------- ------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)..................................... $ (66,034) $ (402,621) $ 491,653 $ 323,474
Net realized gain (loss) on investments and foreign currencies... (62,842) 92,916 1,966,682 132,803
Net unrealized gain (loss) on investments and foreign currencies. (1,444,025) 682,430 (1,337,943) 1,005,085
----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting from operations.... (1,572,901) 372,725 1,120,392 1,461,362
----------- ----------- ----------- -----------
Distributions to shareholders from(1):
Distributable earnings (Class A)................................. (61,011) -- (926,828) --
Distributable earnings (Class C)................................. -- -- (10,033) --
Distributable earnings (Class W)................................. (6,043) -- (44,270) --
----------- ----------- ----------- -----------
Total distributions to shareholders................................ (67,054) -- (981,131) --
----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting from capital share
transactions (see Note 7)......................................... (1,398,356) (1,616,036) 85,994 24,168,322
----------- ----------- ----------- -----------
Total increase (decrease) in net assets............................ (3,038,311) (1,243,311) 225,255 25,629,684
NET ASSETS:
Beginning of period................................................ 39,420,898 40,664,209 25,629,684 --
----------- ----------- ----------- -----------
End of period...................................................... $36,382,587 $39,420,898 $25,854,939 $25,629,684
=========== =========== =========== ===========
AIG Focused Alpha
Large-Cap Fund
--------------------------
For the For the
year ended year ended
October 31, October 31,
2018 2017
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)..................................... $ (1,710,075) $ (2,240,749)
Net realized gain (loss) on investments and foreign currencies... 104,666,956 60,331,617
Net unrealized gain (loss) on investments and foreign currencies. (56,096,952) 114,209,450
------------ ------------
Net increase (decrease) in net assets resulting from operations.... 46,859,929 172,300,318
------------ ------------
Distributions to shareholders from(1):
Distributable earnings (Class A)................................. (42,929,817) --
Distributable earnings (Class C)................................. (10,460,288) --
Distributable earnings (Class W)................................. (1,279,042) --
------------ ------------
Total distributions to shareholders................................ (54,669,147) --
------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions (see Note 7)......................................... (3,586,898) (60,788,856)
------------ ------------
Total increase (decrease) in net assets............................ (11,396,116) 111,511,462
NET ASSETS:
Beginning of period................................................ 639,288,411 527,776,949
------------ ------------
End of period...................................................... $627,892,295 $639,288,411
============ ============
# Consolidated (see Note 2)
@ Commencement of operations.
(1)The prior year amounts have been restated to reflect the adoption of
amendments to Rule 6-09.3 of Regulation S-X. Below are the amounts as stated
in the October 31, 2017 annual report.
Distributions to shareholders from:
Net investment income (Class A)............ $ -- $ -- $ --
Net investment income (Class C)............ -- -- --
Net investment income (Class W)............ -- -- --
Net realized gain on investments (Class A). -- -- --
Net realized gain on investments (Class C). -- -- --
Net realized gain on investments (Class W). -- -- --
------------- ------------- --------------
Total distributions to shareholders.......... $ -- $ -- $ --
------------- ------------- --------------
See Notes to Financial Statements
10
SunAmerica Specialty Series
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
AIG Focused Multi-Cap
Growth Fund AIG Income Explorer Fund
-------------------------- ------------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, October 31, October 31, October 31,
2018 2017 2018 2017
------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)..................................... $ (7,052,513) $ (5,284,184) $ 1,864,499 $ 1,380,853
Net realized gain (loss) on investments and foreign currencies... 124,402,736 51,767,743 557,806 1,383,523
Net unrealized gain (loss) on investments and foreign currencies. (88,684,131) 110,141,740 (4,505,960) 1,045,481
------------ ------------ ----------- -----------
Net increase (decrease) in net assets resulting from operations.... 28,666,092 156,625,299 (2,083,655) 3,809,857
------------ ------------ ----------- -----------
Distributions to shareholders from(1):
Distributable earnings (Class A)................................. (37,619,171) (5,975,560) (1,683,253) (994,077)
Distributable earnings (Class C)................................. (7,778,934) (1,357,932) (193,863) (131,857)
Distributable earnings (Class W)................................. (3,879,281) (426,999) (303,598) (90,675)
------------ ------------ ----------- -----------
Total distributions to shareholders................................ (49,277,386) (7,760,491) (2,180,714) (1,212,609)
------------ ------------ ----------- -----------
Net increase (decrease) in net assets resulting from capital share
transactions (see Note 7)......................................... 65,890,995 (37,654,310) 14,751,199 15,906,209
------------ ------------ ----------- -----------
Total increase (decrease) in net assets............................ 45,279,701 111,210,498 10,486,830 18,499,457
NET ASSETS:
Beginning of period................................................ 592,901,518 481,691,020 44,506,105 26,006,648
------------ ------------ ----------- -----------
End of period...................................................... $638,181,219 $592,901,518 $54,992,935 $44,506,105
============ ============ =========== ===========
AIG Small-Cap Fund
------------------------
For the For the
year ended year ended
October 31, October 31,
2018 2017
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)..................................... $ (653,531) $ (419,650)
Net realized gain (loss) on investments and foreign currencies... 7,622,304 6,428,333
Net unrealized gain (loss) on investments and foreign currencies. (4,655,934) 8,391,818
----------- -----------
Net increase (decrease) in net assets resulting from operations.... 2,312,839 14,400,501
----------- -----------
Distributions to shareholders from(1):
Distributable earnings (Class A)................................. (4,732,978) (1,389,064)
Distributable earnings (Class C)................................. (210,588) (29,030)
Distributable earnings (Class W)................................. (849,123) (13,932)
----------- -----------
Total distributions to shareholders................................ (5,792,689) (1,432,026)
----------- -----------
Net increase (decrease) in net assets resulting from capital share
transactions (see Note 7)......................................... 15,298,243 1,698,979
----------- -----------
Total increase (decrease) in net assets............................ 11,818,393 14,667,454
NET ASSETS:
Beginning of period................................................ 58,557,884 43,890,430
----------- -----------
End of period...................................................... $70,376,277 $58,557,884
=========== ===========
(1)The prior year amounts have been restated to reflect the adoption of
amendments to Rule 6-09.3 of Regulation S-X. Below are the amounts as stated
in the October 31, 2017 annual report.
Distributions to shareholders from:
Net investment income (Class A)............ $ -- $ (994,077) $ --
Net investment income (Class C)............ -- (131,857) --
Net investment income (Class W)............ -- (90,675) --
Net realized gain on investments (Class A). (5,975,560) -- (1,389,064)
Net realized gain on investments (Class C). (1,357,932) -- (29,030)
Net realized gain on investments (Class W). (426,999) -- (13,932)
-------------- ------------- -------------
Total distributions to shareholders.......... $ (7,760,491) $ (1,216,609) $ (1,432,026)
-------------- ------------- -------------
See Notes to Financial Statements
11
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets
Value Net realized Total from from net from Total Value end of
beginning investment and investment investment net realized Distri- end of Total period
Period Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------
AIG COMMODITY STRATEGY FUND#
----------------------------
Class A
-------
10/31/14 $7.89 $(0.07) $(0.08) $(0.15) $ -- $-- $ -- $7.74 (1.90)%(4) $45,829
10/31/15 7.74 (0.09) (0.25) (0.34) -- -- -- 7.40 (4.39) 35,472
10/31/16 7.40 (0.10) (0.22) (0.32) -- -- -- 7.08 (4.32) 35,228
10/31/17 7.08 (0.07) 0.12 0.05 -- -- -- 7.13 0.71 35,015
10/31/18 7.13 (0.01) (0.26) (0.27) (0.01) -- (0.01) 6.85 (3.75) 32,602
Class C
-------
10/31/14 $7.77 $(0.13) $(0.06) $(0.19) $ -- $-- $ -- $7.58 (2.45)%(4) $ 9,153
10/31/15 7.58 (0.13) (0.25) (0.38) -- -- -- 7.20 (5.01) 5,272
10/31/16 7.20 (0.14) (0.22) (0.36) -- -- -- 6.84 (5.00) 3,478
10/31/17 6.84 (0.11) 0.12 0.01 -- -- -- 6.85 0.15 2,755
10/31/18 6.85 (0.06) (0.25) (0.31) -- -- -- 6.54 (4.53) 1,908
Class W
-------
10/31/14 $7.94 $(0.06) $(0.08) $(0.14) $ -- $-- $ -- $7.80 (1.76)%(4) $ 9,977
10/31/15 7.80 (0.07) (0.26) (0.33) -- -- -- 7.47 (4.23) 2,979
10/31/16 7.47 (0.09) (0.21) (0.30) -- -- -- 7.17 (4.02) 1,958
10/31/17 7.17 (0.06) 0.12 0.06 -- -- -- 7.23 0.84 1,651
10/31/18 7.23 0.01 (0.27) (0.26) (0.03) -- (0.03) 6.94 (3.64) 1,873
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets(3) net assets(3) Turnover
------------- ------------- ---------
1.72% (0.91)% 16%
1.72 (1.12) 54
1.72 (1.40) 50
1.73 (0.98) 49
1.72 (0.14) 1
2.37% (1.56)% 16%
2.37 (1.77) 54
2.37 (2.06) 50
2.38 (1.65) 49
2.37 (0.83) 1
1.52% (0.73)% 16%
1.52 (0.91) 54
1.52 (1.21) 50
1.53 (0.79) 49
1.52 0.08 1
--------
# Consolidated (see Note 2)
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements and expense reductions.
(3)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/14 10/31/15 10/31/16 10/31/17 10/31/18
-------- -------- -------- -------- --------
Commodity Strategy Fund Class A......... 0.49% 0.82% 0.85% 0.92% 0.83%
Commodity Strategy Fund Class C......... 0.59 0.92 1.21 1.25 1.45
Commodity Strategy Fund Class W......... 0.65 0.84 1.48 1.52 1.49
(4)The Fund's performance figure was increased by 0.69% for Class A, Class C
and Class W, from a reimbursement by an affiliate.
See Notes to Financial Statements
12
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets Ratio of
Value Net realized Total from from net from Total Value end of expenses
beginning investment and investment investment net realized Distri- end of Total period to average
Period Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ------- -------------
AIG ESG DIVIDEND FUND
---------------------
Class A
-------
12/16/16@-
10/31/17 $15.00 $0.25 $0.56 $0.81 $ -- $ -- $ -- $15.81 5.40% $24,913 1.25%(4)
10/31/18 15.81 0.30 0.37 0.67 (0.51) (0.09) (0.60) 15.88 4.26(5) 22,973 1.25
Class C
-------
12/16/16@-
10/31/17 $15.00 $0.16 $0.56 $0.72 $ -- $ -- $ -- $15.72 4.80% $ 365 1.90%(4)
10/31/18 15.72 0.19 0.38 0.57 (0.34) (0.09) (0.43) 15.86 3.59(5) 384 1.90
Class W
-------
12/16/16@-
10/31/17 $15.00 $0.28 $0.56 $0.84 $ -- $ -- $ -- $15.84 5.60% $ 352 1.05%(4)
10/31/18 15.84 0.31 0.40 0.71 (0.57) (0.09) (0.66) 15.89 4.48(5) 2,498 1.05
Ratio
of net
investment
income to
average Portfolio
net assets(3) Turnover
------------- ---------
1.92%(4) 18%
1.84 57
1.22%(4) 18%
1.18 57
2.06%(4) 18%
1.99 57
--------
@ Commencement of operations.
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements and expense reductions.
(3)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/17(4) 10/31/18
----------- --------
ESG Dividend Fund Class A............... 1.25% 0.75%
ESG Dividend Fund Class C............... 4.56 2.88
ESG Dividend Fund Class W............... 5.15 1.41
(4)Annualized.
(5)The Fund's performance figure was increased by 0.66% from a reimbursement of
losses resulting from an investment restriction violation (see Note 4).
See Notes to Financial Statements
13
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset Net (both Dividends Distributions Asset Assets Ratio of
Value investment realized Total from from net from net Total Value end of expenses
beginning income and investment investment realized Distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
AIG FOCUSED ALPHA LARGE-CAP FUND
--------------------------------
Class A
-------
10/31/14 $24.37 $(0.12) $ 4.47 $ 4.35 $-- $(1.27) $(1.27) $27.45 18.66% $525,359 1.66%(4)
10/31/15 27.45 (0.11) 0.86 0.75 -- (1.64) (1.64) 26.56 2.98 495,598 1.66
10/31/16 26.56 (0.11) (0.14) (0.25) -- (2.61) (2.61) 23.70 (0.91) 413,090 1.67
10/31/17 23.70 (0.07) 8.28 8.21 -- -- -- 31.91 34.64 505,796 1.65
10/31/18 31.91 (0.06) 2.30 2.24 -- (2.73) (2.73) 31.42 7.46 572,092 1.64
Class C
-------
10/31/14 $24.11 $(0.28) $ 4.40 $ 4.12 $-- $(1.27) $(1.27) $26.96 17.87% $126,687 2.32%(4)
10/31/15 26.96 (0.28) 0.85 0.57 -- (1.64) (1.64) 25.89 2.33 123,641 2.31
10/31/16 25.89 (0.26) (0.14) (0.40) -- (2.61) (2.61) 22.88 (1.58) 106,319 2.32
10/31/17 22.88 (0.24) 7.97 7.73 -- -- -- 30.61 33.78 118,151 2.30
10/31/18 30.61 (0.26) 2.21 1.95 -- (2.73) (2.73) 29.83 6.78 35,561 2.30
Class W
-------
10/31/14 $24.48 $(0.08) $ 4.48 $ 4.40 $-- $(1.27) $(1.27) $27.61 18.78% $ 8,109 1.52%(4)
10/31/15 27.61 (0.08) 0.88 0.80 -- (1.64) (1.64) 26.77 3.15 16,475 1.52(4)
10/31/16 26.77 (0.08) (0.15) (0.23) -- (2.61) (2.61) 23.93 (0.82) 8,368 1.52(4)
10/31/17 23.93 (0.05) 8.39 8.34 -- -- -- 32.27 34.85 15,342 1.52(4)
10/31/18 32.27 (0.03) 2.34 2.31 -- (2.73) (2.73) 31.85 7.60 20,240 1.52(4)
Ratio
of net
investment
income
(loss) to
average Portfolio
net assets(3) Turnover
------------- ---------
(0.46)%(4) 57%
(0.43) 82
(0.47) 38
(0.26) 68
(0.20) 65
(1.12)%(4) 57%
(1.08) 82
(1.12) 38
(0.91) 68
(0.81) 65
(0.31)%(4) 57%
(0.29)(4) 82
(0.31)(4) 38
(0.18)(4) 68
(0.09)(4) 65
--------
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements and expense reductions.
(3)Excludes expense reductions. If expense reductions had been applied, the
ratio of expenses to average net assets would have been lower and the ratio
of net investment income (loss) to average net assets would have been higher
by the following:
10/31/14 10/31/15 10/31/16 10/31/17 10/31/18
-------- -------- -------- -------- --------
Focused Alpha Large-Cap Fund Class A 0.00% 0.00% 0.00% 0.00% 0.00%
Focused Alpha Large-Cap Fund
Class C............................ 0.00 0.00 0.00 0.00 0.00
Focused Alpha Large-Cap Fund
Class W............................ 0.00 0.00 0.00 0.00 0.00
(4)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/14 10/31/15 10/31/16 10/31/17 10/31/18
-------- -------- -------- -------- --------
Focused Alpha Large-Cap Fund
Class A...................... (0.01)% -- % -- % -- % -- %
Focused Alpha Large-Cap Fund
Class C...................... (0.02) -- -- -- --
Focused Alpha Large-Cap Fund
Class W...................... 0.13 0.02 0.08 0.01 (0.00)
See Notes to Financial Statements
14
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset Net (both Dividends Distributions Asset Assets Ratio of
Value investment realized Total from from net from net Total Value end of expenses
beginning income and investment investment realized Distri- end of Total period to average
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
AIG FOCUSED MULTI-CAP GROWTH FUND
---------------------------------
Class A
-
10/31/14 $24.78 $(0.28) $3.77 $3.49 $-- $(1.05) $(1.05) $27.22 14.70% $462,483 1.65%
10/31/15 27.22 (0.26) 0.73 0.47 -- (0.84) (0.84) 26.85 1.87 441,345 1.67
10/31/16 26.85 (0.25) 0.43 0.18 -- (3.27) (3.27) 23.76 0.75 369,683 1.68
10/31/17 23.76 (0.25) 8.52 8.27 -- (0.39) (0.39) 31.64 35.38 456,940 1.66
10/31/18 31.64 (0.33) 1.93 1.60 -- (2.61) (2.61) 30.63 5.41 493,051 1.65
Class C
-
10/31/14 $24.50 $(0.45) $3.71 $3.26 $-- $(1.05) $(1.05) $26.71 13.90% $103,900 2.37%(4)
10/31/15 26.71 (0.43) 0.71 0.28 -- (0.84) (0.84) 26.15 1.17 99,519 2.33(4)
10/31/16 26.15 (0.39) 0.41 0.02 -- (3.27) (3.27) 22.90 0.09 81,943 2.33
10/31/17 22.90 (0.41) 8.17 7.76 -- (0.39) (0.39) 30.27 34.47 90,491 2.32
10/31/18 30.27 (0.52) 1.86 1.34 -- (2.61) (2.61) 29.00 4.74 68,173 2.31
Class W
-
10/31/14 $24.88 $(0.24) $3.78 $3.54 $-- $(1.05) $(1.05) $27.37 14.85% $ 54,920 1.50%(4)
10/31/15 27.37 (0.21) 0.73 0.52 -- (0.84) (0.84) 27.05 2.05 56,840 1.47
10/31/16 27.05 (0.21) 0.43 0.22 -- (3.27) (3.27) 24.00 0.91 30,065 1.51
10/31/17 24.00 (0.20) 8.62 8.42 -- (0.39) (0.39) 32.03 35.65 45,470 1.48
10/31/18 32.03 (0.27) 1.96 1.69 -- (2.61) (2.61) 31.11 5.64 76,957 1.45
Ratio
of net
investment
income
(loss) to
average Portfolio
net assets(3) Turnover
------------- ---------
(1.10)% 65%
(0.97) 103
(1.07) 29
(0.93) 66
(1.03) 94
(1.82)%(4) 65%
(1.64)(4) 103
(1.72) 29
(1.59) 66
(1.70) 94
(0.98)%(4) 65%
(0.78) 103
(0.86) 29
(0.75) 66
(0.83) 94
--------
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements and expense reductions.
(3)Excludes expense reductions. If expense reductions had been applied, the
ratio of expenses to average net assets would have been lower and the ratio
of net investment income (loss) to average net assets would have been higher
by the following:
10/31/14 10/31/15 10/31/16 10/31/17 10/31/18
-------- -------- -------- -------- --------
Focused Multi-Cap Fund Class A.......... 0.00% 0.00% 0.00% 0.00% 0.00%
Focused Multi-Cap Fund Class C.......... 0.00 0.00 0.00 0.00 0.00
Focused Multi-Cap Fund Class W.......... 0.00 0.00 0.00 0.00 0.00
(4)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/14 10/31/15
-------- --------
Focused Multi-Cap Fund Class A.......... -- % -- %
Focused Multi-Cap Fund Class C.......... (0.03) (0.00)
Focused Multi-Cap Fund Class W.......... (0.05) --
See Notes to Financial Statements
15
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets Ratio of
Value Net realized Total from from net from Total Value end of expenses
beginning investment and investment investment net realized Distri- end of Total period to average
Period Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ------- -------------
AIG INCOME EXPLORER FUND
------------------------
Class A
-------
10/31/14 $15.56 $0.72 $ 0.39 $ 1.11 $(0.71) $ -- $(0.71) $15.96 7.28% $23,620 1.72%
10/31/15 15.96 0.70 (1.39) (0.69) (0.71) (0.64) (1.35) 13.92 (4.38) 20,062 1.72
10/31/16 13.92 0.62 0.60 1.22 (0.64) -- (0.64) 14.50 9.10 22,195 1.72
10/31/17 14.50 0.65 1.23 1.88 (0.57) -- (0.57) 15.81 13.21(4) 31,625 1.72
10/31/18 15.81 0.57 (1.08) (0.51) (0.68) (0.01) (0.69) 14.61 (3.42) 44,413 1.72
Class C
-------
10/31/14 $15.56 $0.52 $ 0.49 $ 1.01 $(0.63) $ -- $(0.63) $15.94 6.58% $ 2,860 2.37%
10/31/15 15.94 0.60 (1.38) (0.78) (0.62) (0.64) (1.26) 13.90 (5.00) 3,110 2.37
10/31/16 13.90 0.52 0.61 1.13 (0.55) -- (0.55) 14.48 8.42 3,307 2.37
10/31/17 14.48 0.55 1.22 1.77 (0.47) -- (0.47) 15.78 12.43(4) 4,954 2.37
10/31/18 15.78 0.50 (1.11) (0.61) (0.58) (0.01) (0.59) 14.58 (4.07) 4,360 2.37
Class W
-------
10/31/14 $15.56 $0.65 $ 0.49 $ 1.14 $(0.74) $ -- $(0.74) $15.96 7.51% $ 502 1.52%
10/31/15 15.96 0.73 (1.40) (0.67) (0.74) (0.64) (1.38) 13.91 (4.26) 410 1.52
10/31/16 13.91 0.63 0.63 1.26 (0.67) -- (0.67) 14.50 9.38 505 1.52
10/31/17 14.50 0.54 1.37 1.91 (0.60) -- (0.60) 15.81 13.44(4) 7,927 1.52
10/31/18 15.81 0.61 (1.09) (0.48) (0.71) (0.01) (0.72) 14.61 (3.24) 6,220 1.52
Ratio
of net
investment
income to
average Portfolio
net assets(3) Turnover
------------- ---------
4.55% 51%
4.76 50
4.42 54
4.30 49
3.77 51
3.53% 51%
4.11 50
3.75 54
3.65 49
3.17 51
4.37% 51%
4.92 50
4.65 54
3.95 49
3.94 51
--------
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements and expense reductions.
(3)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/14 10/31/15 10/31/16 10/31/17 10/31/18
-------- -------- -------- -------- --------
Income Explorer Fund Class A............ 0.40% 0.42% 0.52% 0.40% 0.26%
Income Explorer Fund Class C............ 0.82 0.75 0.97 0.56 0.52
Income Explorer Fund Class W............ 3.71 2.94 4.00 0.71 0.46
(4)The Portfolio's performance figure was increased by less than 0.01% from
gains on the disposal of investments in violation of investment restrictions.
See Notes to Financial Statements
16
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets Ratio of
Value Net realized Total from from net from Total Value end of expenses
beginning investment and investment investment net realized Distri- end of Total period to average
Period Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets(4)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ------- -------------
AIG SMALL-CAP FUND
------------------
Class A
-------
02/06/14@-
10/31/14 $15.00 $(0.08) $0.57 $0.49 $-- $ -- $ -- $15.49 3.27% $50,123 1.72%(3)
10/31/15 15.49 (0.13) 1.06 0.93 -- -- -- 16.42 6.00 51,789 1.72
10/31/16 16.42 (0.10) 0.75 0.65 -- (1.32) (1.32) 15.75 4.61 42,739 1.72
10/31/17 15.75 (0.14) 5.22 5.08 -- (0.52) (0.52) 20.31 32.76 48,384 1.72
10/31/18 20.31 (0.19) 0.92 0.73 -- (2.00) (2.00) 19.04 4.05 50,471 1.73
Class C
-------
02/06/14@-
10/31/14 $15.00 $(0.15) $0.56 $0.41 $-- $ -- $ -- $15.41 2.73% $ 256 2.37%(3)
10/31/15 15.41 (0.23) 1.06 0.83 -- -- -- 16.24 5.39 541 2.37
10/31/16 16.24 (0.19) 0.72 0.53 -- (1.32) (1.32) 15.45 3.87 811 2.37
10/31/17 15.45 (0.26) 5.11 4.85 -- (0.52) (0.52) 19.78 31.89 1,944 2.37
10/31/18 19.78 (0.31) 0.89 0.58 -- (2.00) (2.00) 18.36 3.34 3,099 2.38
Class W
-------
02/06/14@-
10/31/14 $15.00 $(0.06) $0.57 $0.51 $-- $ -- $ -- $15.51 3.40% $ 113 1.52%(3)
10/31/15 15.51 (0.10) 1.07 0.97 -- -- -- 16.48 6.25 110 1.52
10/31/16 16.48 (0.07) 0.75 0.68 -- (1.32) (1.32) 15.84 4.79 341 1.52
10/31/17 15.84 (0.12) 5.26 5.14 -- (0.52) (0.52) 20.46 32.96 8,230 1.52
10/31/18 20.46 (0.16) 0.94 0.78 -- (2.00) (2.00) 19.24 4.29 16,806 1.53
Ratio
of net
investment
income to
average Portfolio
net assets(4) Turnover
------------- ---------
(0.76)%(3) 61%
(0.79) 88
(0.66) 67
(0.79) 65
(0.97) 63
(1.46)%(3) 61%
(1.47) 88
(1.33) 67
(1.48) 65
(1.64) 63
(0.57)%(3) 61%
(0.59) 88
(0.47) 67
(0.70) 65
(0.81) 63
--------
@ Commencement of operations.
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements and expense reductions.
(3)Annualized.
(4)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/14(3) 10/31/15 10/31/16 10/31/17 10/31/18
----------- -------- -------- -------- --------
Small Cap Fund Class A.................. 0.26% 0.33% 0.26% 0.29% 0.22%
Small Cap Fund Class C.................. 12.36 4.32 2.27 0.96 0.75
Small Cap Fund Class W.................. 18.46 13.86 5.01 0.50 0.36
See Notes to Financial Statements
17
SunAmerica Specialty Series -- AIG Commodity Strategy Fund
CONSOLIDATED PORTFOLIO PROFILE -- October 31, 2018@ -- (unaudited)
Industry Allocation*
Repurchase Agreements........ 45.6%
U.S. Government Agencies..... 34.0
U.S. Government Treasuries... 8.4
United States Treasury Notes. 6.3
Investment Companies......... 1.2
Federal Farm Credit Bank..... 0.6
----
96.1%
====
--------
* Calculated as a percentage of net assets
Credit Quality+**
Aaa. 100.0%
=====
--------
@ Consolidated (See Note 2)
+ Source: Moody's
**Calculated as a percentage of total debt issues, excluding short-term
securities.
18
SunAmerica Specialty Series -- AIG Commodity Strategy Fund
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2018@
Shares/
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 0.6%
Federal Farm Credit Bank FRS -- 0.6%
2.20% (1 USFREF + 0.00%)
due 08/08/2019 (cost $200,000)............ $ 200,000 $ 199,895
----------
U.S. GOVERNMENT TREASURIES -- 6.3%
United States Treasury Notes FRS -- 6.3%
2.37% (3 UTBMM + 0.05%)
due 10/31/2019............................ 1,500,000 1,501,166
2.38% (3 UTBMM + 0.06%)
due 07/31/2019............................ 200,000 200,145
2.39% (3 UTBMM + 0.07%)
due 04/30/2019............................ 600,000 600,385
----------
Total U.S. Government Treasuries
(cost $2,300,049)......................... 2,301,696
----------
COMMON STOCKS -- 1.2%
Investment Companies -- 1.2%
Uranium Participation Corp.+(1)
(cost $488,060)........................... 130,545 450,207
----------
OPTIONS-PURCHASED -- 0.0%
Exchange Traded Purchased Call Options(1)(2)
(cost $39,399).............................. 59 21,285
----------
Total Long-Term Investment Securities
(cost $3,027,508)................................. 2,973,083
----------
SHORT-TERM INVESTMENT SECURITIES -- 42.4%
U.S. Government Agencies -- 34.0%
Federal Farm Credit Bank
2.65% due 07/19/2019...................... 192,000 188,506
2.65% due 07/23/2019...................... 189,000 185,507
Federal Home Loan Bank
2.05% due 11/02/2018...................... 486,000 485,970
2.08% due 11/07/2018...................... 318,000 317,885
2.09% due 11/14/2018...................... 475,000 474,626
2.16% due 11/14/2018...................... 600,000 599,528
2.19% due 11/23/2018...................... 444,000 443,409
2.20% due 12/19/2018...................... 448,000 446,668
2.21% due 11/14/2018...................... 500,000 499,606
2.22% due 11/02/2018...................... 443,000 442,973
2.22% due 11/07/2018...................... 450,000 449,837
2.22% due 11/21/2018...................... 292,000 291,646
2.22% due 11/28/2018...................... 596,000 595,026
2.23% due 11/23/2018...................... 300,000 299,600
2.23% due 11/30/2018...................... 443,000 442,222
2.23% due 12/12/2018...................... 469,000 467,809
2.23% due 12/14/2018...................... 472,000 470,743
2.24% due 12/19/2018...................... 450,000 448,662
2.24% due 12/21/2018...................... 300,000 299,071
2.27% due 12/26/2018...................... 300,000 298,978
2.27% due 01/04/2019...................... 441,000 439,197
2.29% due 01/09/2019...................... 290,000 288,722
2.32% due 01/16/2019...................... 475,000 472,693
2.35% due 01/23/2019...................... 292,000 290,452
2.35% due 01/25/2019...................... 445,000 442,583
2.37% due 03/20/2019...................... 194,000 192,210
2.42% due 04/03/2019...................... 294,000 290,951
Federal Home Loan Bank FRS
1.93% (3 ML -0.39%)
due 11/20/2018........................... 250,000 249,988
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------
U.S. Government Agencies (continued)
Federal Home Loan Bank FRS (continued)
2.00% (3 ML -0.33%)
due 03/15/2019......................... $ 500,000 $ 499,840
2.02% (3 ML -0.31%)
due 03/08/2019......................... 400,000 399,916
2.11% (1 ML -0.15%)
due 11/01/2018......................... 150,000 150,000
2.15% (1 ML- 0.14%)
due 01/17/2019......................... 500,000 499,968
-----------
12,364,792
-----------
U.S. Government Treasuries -- 8.4%
United States Treasury Bills
2.01% due 11/01/2018.................... 600,000 600,000
2.09% due 12/20/2018.................... 700,000 697,951
2.18% due 01/31/2019.................... 475,700 472,949
2.21% due 02/21/2019.................... 181,600 180,301
2.22% due 02/14/2019.................... 600,000 595,975
2.31% due 03/21/2019.................... 500,000 495,479
-----------
3,042,655
-----------
Total Short-Term Investment Securities
(cost $15,408,606)............................... 15,407,447
-----------
REPURCHASE AGREEMENTS -- 45.6%
Bank of America Securities LLC Joint
Repurchase Agreement(3)................. 2,810,000 2,810,000
Bank of America Securities LLC Joint
Repurchase Agreement(1)(3).............. 1,090,000 1,090,000
Barclays Capital, Inc. Joint Repurchase
Agreement(3)............................ 840,000 840,000
Barclays Capital, Inc. Joint Repurchase
Agreement(1)(3)......................... 320,000 320,000
BNP Paribas SA Joint Repurchase
Agreement(3)............................ 2,800,000 2,800,000
BNP Paribas SA Joint Repurchase
Agreement(1)(3)......................... 1,070,000 1,070,000
Deutsche Bank AG Joint Repurchase
Agreement(3)............................ 2,735,000 2,735,000
Deutsche Bank AG Joint Repurchase
Agreement(1)(3)......................... 1,045,000 1,045,000
RBS Securities, Inc. Joint Repurchase
Agreement(3)............................ 2,800,000 2,800,000
RBS Securities, Inc. Joint Repurchase
Agreement(1)(3)......................... 1,070,000 1,070,000
-----------
Total Repurchase Agreements
(cost $16,580,000)............................... 16,580,000
-----------
TOTAL INVESTMENTS
(cost $35,016,114)(4)................... 96.1% 34,960,530
Other assets less liabilities.............. 3.9 1,422,057
---------- -----------
NET ASSETS 100.0% $36,382,587
========== ===========
--------
@ Consolidated (see Note 2)
+ Non-income producing security
(1)The security is owned by the AIG Commodity Strategy Cayman Fund, Ltd., which
is a wholly-owned subsidiary of the AIG Commodity Strategy Fund.
(2)Call Options -- Purchased
19
SunAmerica Specialty Series -- AIG Commodity Strategy Fund
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2018@ --
(continued)
Exchange Traded Purchased Call Options(a)
----------------------------------------------------------------------------------------------------------------
Value at Unrealized
Expiration Strike No. of Notional Premiums October 31, Appreciation
Issue Counterparty Month Price Contracts Amount* Paid 2018 (Depreciation)
----------------- -------------------- ---------- ------- --------- -------- -------- ----------- --------------
Brent Oil Futures Morgan Stanley & Co. Jun-19 $ 85.00 5 $ 3,748 $13,700 $ 9,300 $ (4,400)
Corn Futures Morgan Stanley & Co. Dec-18 $380.00 28 508,550 7,013 1,925 (5,088)
Silver Futures Morgan Stanley & Co. Dec-18 $ 17.50 2 1,428 6,176 30 (6,146)
WTI Crude Futures Morgan Stanley & Co. Mar-19 $ 85.00 14 9,202 5,460 2,380 (3,080)
WTI Crude Futures Morgan Stanley & Co. Jun-19 $ 85.00 15 9,908 7,050 7,650 600
-- -------- ------- ------- --------
64 $532,836 $39,399 $21,285 $(18,114)
== ======== ======= ======= ========
--------
* Notional amount is calculated by multiplying the number of contracts by the
multiplier by the market value of the underlying security or index.
(3)See Note 3 for details of Joint Repurchase Agreements.
(4)See Note 6 for cost of investments on a tax basis.
FRS-- Floating Rate Security
The rates shown on FRS are the current interest rates at October 31, 2018 and
unless noted otherwise, the dates shown are the original maturity dates.
Index Legend
1 ML -- 1 Month USD LIBOR
3 ML -- 3 Month USD LIBOR
1 USFREF -- 1 Month Average Effective Federal Funds Rate
3 UTBMM -- US Treasury 3 Month Bill Money Market Yield
Exchange Traded Written Call Options(a)
------------------------------------------------------------------------------------------------------------
Value at Unrealized
Expiration Strike No. of Notional Premiums October 31, Appreciation
Issue Counterparty Month Price Contracts Amount* Received 2018 (Depreciation)
-------------- -------------------- ---------- ------ --------- -------- -------- ----------- --------------
Silver Futures Morgan Stanley & Co. Dec-18 $21.00 2 $1,428 $902 $10 $892
= ====== ==== === ====
--------
* Notional amount is calculated by multiplying the number of contracts by the
multiplier by the market value of the underlying security or index.
Futures Contracts(a)
-----------------------------------------------------------------------------------------------
Unrealized
Number of Notional Notional Appreciation
Contracts Type Description Expiration Month Basis* Value* (Depreciation)
--------- ---- ------ ---------------- -------- -------- --------------
41 Short Aluminum Futures December 2018 $2,102,833 $2,007,463 $ 95,370
41 Long Aluminum Futures December 2018 2,174,397 2,007,463 (166,934)
9 Long Aluminum Futures March 2019 456,301 442,463 (13,838)
19 Long Aluminum Futures June 2019 977,437 939,431 (38,006)
38 Long Brent Crude Futures January 2019 3,125,100 2,851,520 (273,580)
3 Long Brent Crude Futures April 2019 224,520 225,240 720
14 Short Brent Crude Futures December 2020 863,420 993,020 (129,600)
4 Long Brent Crude Futures December 2021 229,640 272,320 42,680
11 Short Coffee Futures January 2019 167,703 184,250 (16,547)
11 Long Coffee Futures March 2019 508,631 480,356 (28,275)
11 Short Copper Futures December 2018 1,704,900 1,650,275 54,625
16 Long Copper Futures December 2018 2,479,585 2,400,400 (79,185)
11 Long Copper Futures March 2019 1,701,938 1,646,013 (55,925)
73 Long Corn Futures December 2018 1,369,426 1,325,863 (43,563)
4 Long Cotton Futures March 2019 160,050 156,600 (3,450)
17 Long Gold Futures February 2019 2,102,780 2,075,360 (27,420)
3 Long Lean Hogs Futures December 2018 66,430 70,140 3,710
14 Long Live Cattle Futures December 2018 640,647 654,920 14,273
6 Short Live Cattle Futures April 2019 282,210 296,040 (13,830)
12 Long Low Sulfur Gasoil Futures January 2019 967,655 883,159 (84,496)
67 Long Natural Gas Futures January 2019 2,273,630 2,212,340 (61,290)
20 Short Natural Gas Futures March 2019 600,130 593,400 6,730
34 Long Natural Gas Futures April 2019 907,710 912,900 5,190
59 Short Natural Gas Futures October 2019 1,584,440 1,609,520 (25,080)
12 Long Nickel Futures December 2018 990,543 825,588 (164,955)
12 Long NY Harbor ULSD Futures January 2019 1,141,665 1,133,244 (8,421)
20
SunAmerica Specialty Series -- AIG Commodity Strategy Fund
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2018@ --
(continued)
Futures Contracts(a)
------------------------------------------------------------------------------------------
Unrealized
Number of Notional Notional Appreciation
Contracts Type Description Expiration Month Basis* Value* (Depreciation)
--------- ---- ------ ---------------- -------- -------- --------------
12 Long Silver Futures December 2018 $ 931,115 $ 856,920 $ (74,195)
36 Long Soybean Futures January 2019 1,581,363 1,533,150 (48,213)
16 Long Soybean Meal Futures January 2019 511,180 493,120 (18,060)
32 Long Soybean Oil Futures January 2019 566,592 542,208 (24,384)
56 Long Sugar Futures March 2019 756,426 827,277 70,851
27 Long Wheat Futures March 2019 699,288 696,600 (2,688)
6 Long Wheat Futures March 2019 154,050 155,400 1,350
5 Short Wheat Futures July 2019 148,600 133,500 15,100
29 Long WTI Crude Futures January 2019 1,982,170 1,897,760 (84,410)
5 Short WTI Crude Futures December 2019 265,750 327,350 (61,600)
13 Short Zinc Futures December 2018 794,096 817,294 (23,198)
13 Long Zinc Futures December 2018 838,122 817,294 (20,828)
8 Long Zinc Futures March 2019 487,129 496,450 9,321
4 Long Zinc Futures June 2019 240,750 246,200 5,450
-----------
$(1,266,601)
===========
--------
* Notional basis refers to the contractual amount agreed upon at inception of
the open contract; notional value represents the current value of the open
contract.
ULSD -- Ultra Low Sulfur Diesel Futures
Over the Counter Total Return Swap Contracts(a)+
------------------------------------------------------------------------------------------------------------------------------------
Upfront
Notional Premiums
Amount Maturity Payments Received (Paid) Total Return Received or Paid Paid/
Swap Counterparty (000's) Date by the Portfolio/Frequency by Portfolio/Frequency (Received)
---------------------------- -------- ---------- -------------------------- ------------------------------ ----------
Barclays $ 234 02/28/2019 (0.350)%/Monthly Bloomberg Soybean Meal $ --
Subindex/Monthly
Goldman Sachs International 150 03/29/2019 (0.150)%/Monthly S&P GSCI Industrial Metals --
Excess Return Index/Monthly
Goldman Sachs International 239 11/30/2018 16.78 per oz./At Maturity LBMA Silver Price/At Maturity --
JPMorgan 755 12/31/2018 (0.09)%/Monthly Bloomberg Commodity Index/ --
Monthly
JPMorgan 122 05/31/2019 (0.120)%/Monthly Bloomberg Corn Subindex/ --
Monthly
JPMorgan 11,407 03/29/2019 (0.090)%/Monthly Bloomberg Commodity Index/ --
Monthly
JPMorgan 440 03/29/2019 (0.020)%/Monthly S&P GSCI Grains Index Excess --
Return/Monthly
JPMorgan 474 04/30/2019 (0.070)%/Monthly Bloomberg Silver Subindex/ --
Monthly
Morgan Stanley 274 12/31/2018 (0.250)%/Monthly Bloomberg Soybean Meal --
Subindex/Monthly
-------
$--
=======
Over the Counter Total Return Swap Contracts(a)+
------------------------------------------------------------------------------------------------------------------------------------
Unrealized
Payments Received (Paid) Total Return Received or Paid Appreciation/
Swap Counterparty by the Portfolio/Frequency by Portfolio/Frequency (Depreciation)
---------------------------- -------------------------- ------------------------------ --------------
Barclays (0.350)%/Monthly Bloomberg Soybean Meal $ --
Subindex/Monthly
Goldman Sachs International (0.150)%/Monthly S&P GSCI Industrial Metals --
Excess Return Index/Monthly
Goldman Sachs International 16.78 per oz./At Maturity LBMA Silver Price/At Maturity (36,027)
JPMorgan (0.09)%/Monthly Bloomberg Commodity Index/ --
Monthly
JPMorgan (0.120)%/Monthly Bloomberg Corn Subindex/ --
Monthly
JPMorgan (0.090)%/Monthly Bloomberg Commodity Index/ --
Monthly
JPMorgan (0.020)%/Monthly S&P GSCI Grains Index Excess --
Return/Monthly
JPMorgan (0.070)%/Monthly Bloomberg Silver Subindex/ --
Monthly
Morgan Stanley (0.250)%/Monthly Bloomberg Soybean Meal --
Subindex/Monthly
--------
$(36,027)
========
--------
(a)The security is owned by the AIG Commodity Strategy Cayman Fund, Ltd. which
is a wholly-owned subsidiary of the AIG Commodity Strategy Fund.
+ Illiquid security. At October 31, 2018, the aggregate value of these
securities was $(36,027), representing 0.1% of net assets.
GSCI -- Goldman Sachs Commodity Index
21
SunAmerica Specialty Series -- AIG Commodity Strategy Fund
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2018@ --
(continued)
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2018 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at
Value:*
U.S.
Government
Agencies...... $ -- $ 199,895 $ -- $ 199,895
U.S.
Government
Treasuries.... -- 2,301,696 -- 2,301,696
Common Stocks.. 450,207 -- -- 450,207
Options --
Purchased..... 21,285 -- -- 21,285
Short-Term
Investment
Securities.... -- 15,407,447 -- 15,407,447
Repurchase
Agreements.... -- 16,580,000 -- 16,580,000
---------- ----------- ---- -----------
Total
Investments
at Value...... $ 471,492 $34,489,038 $ -- $34,960,530
========== =========== ==== ===========
Other
Financial
Instruments:+
Exchange
Traded
Written Call
Options....... $ 892 $ -- $ -- $ 892
Futures
Contracts..... 325,370 -- -- 325,370
---------- ----------- ---- -----------
Total Other
Financial
Instruments... $ 326,262 $ -- $ -- $ 326,262
========== =========== ==== ===========
LIABILITIES:
Other
Financial
Instruments:+
Futures
Contracts..... $1,591,971 $ -- $ -- $ 1,591,971
Over the
Counter Total
Return Swap
Contracts..... -- 36,027 -- 36,027
---------- ----------- ---- -----------
Total Other
Financial
Instruments... $1,591,971 $ 36,027 $ -- $ 1,627,998
========== =========== ==== ===========
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
+ Other financial instruments are derivative instruments not reflected in the
Consolidated Portfolio of Investments, such as futures, forward, swap and
written option contracts, which are valued at the unrealized appreciation
(depreciation) on the instrument.
@ Consolidated (see Note 2)
See Notes to Financial Statements
22
SunAmerica Specialty Series -- AIG ESG Dividend Fund
PORTFOLIO PROFILE -- October 31, 2018 -- (unaudited)
Industry Allocation*
Food-Misc./Diversified.................. 8.6%
Investment Management/Advisor Services.. 6.3
Advertising Agencies.................... 5.5
Consumer Products-Misc.................. 5.2
Cosmetics & Toiletries.................. 4.9
Electronic Components-Semiconductors.... 4.9
Retail-Major Department Stores.......... 3.6
Electric-Integrated..................... 3.4
Enterprise Software/Service............. 3.4
Retail-Mail Order....................... 3.1
Theaters................................ 3.0
Commercial Services..................... 3.0
Networking Products..................... 2.9
Retail-Jewelry.......................... 2.8
Distribution/Wholesale.................. 2.8
Computers............................... 2.8
Commercial Services-Finance............. 2.7
Airlines................................ 2.6
Retail-Apparel/Shoe..................... 2.6
Toys.................................... 2.6
Beverages-Non-alcoholic................. 2.5
Retail-Misc./Diversified................ 2.3
Human Resources......................... 2.2
Medical-Biomedical/Gene................. 2.2
Television.............................. 2.2
Building Products-Air & Heating......... 2.1
Apparel Manufacturers................... 2.1
Engines-Internal Combustion............. 1.9
Dental Supplies & Equipment............. 1.7
Home Decoration Products................ 1.6
Office Automation & Equipment........... 1.3
Repurchase Agreements................... 0.7
----
99.5%
====
--------
* Calculated as a percentage of net assets
23
SunAmerica Specialty Series -- AIG ESG Dividend Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018
Value
Security Description Shares (Note 3)
-------------------------------------------------------------------
COMMON STOCKS -- 98.8%
Advertising Agencies -- 5.5%
Interpublic Group of Cos., Inc................... 31,780 $ 736,025
Omnicom Group, Inc............................... 9,080 674,825
----------
1,410,850
----------
Airlines -- 2.6%
Delta Air Lines, Inc............................. 12,262 671,099
----------
Apparel Manufacturers -- 2.1%
Hanesbrands, Inc................................. 32,253 553,461
----------
Beverages-Non-alcoholic -- 2.5%
PepsiCo, Inc..................................... 5,753 646,522
----------
Building Products-Air & Heating -- 2.1%
Johnson Controls International PLC............... 17,379 555,607
----------
Commercial Services -- 3.0%
Nielsen Holdings PLC............................. 29,625 769,658
----------
Commercial Services-Finance -- 2.7%
H&R Block, Inc................................... 26,456 702,142
----------
Computers -- 2.8%
HP, Inc.......................................... 29,693 716,789
----------
Consumer Products-Misc. -- 5.2%
Clorox Co........................................ 4,932 732,155
Kimberly-Clark Corp.............................. 5,869 612,137
----------
1,344,292
----------
Cosmetics & Toiletries -- 4.9%
Colgate-Palmolive Co............................. 9,436 561,914
Procter & Gamble Co.............................. 8,059 714,672
----------
1,276,586
----------
Dental Supplies & Equipment -- 1.7%
Patterson Cos., Inc.............................. 19,401 438,075
----------
Distribution/Wholesale -- 2.8%
KAR Auction Services, Inc........................ 12,672 721,544
----------
Electric-Integrated -- 3.4%
AES Corp......................................... 60,107 876,360
----------
Electronic Components-Semiconductors -- 4.9%
Intel Corp....................................... 14,520 680,698
Texas Instruments, Inc........................... 6,287 583,622
----------
1,264,320
----------
Engines-Internal Combustion -- 1.9%
Cummins, Inc..................................... 3,658 500,012
----------
Enterprise Software/Service -- 3.4%
CA, Inc.......................................... 19,556 867,504
----------
Food-Misc./Diversified -- 8.6%
Campbell Soup Co................................. 14,789 553,256
General Mills, Inc............................... 11,954 523,585
Kellogg Co....................................... 10,127 663,116
Kraft Heinz Co................................... 8,806 484,066
----------
2,224,023
----------
Home Decoration Products -- 1.6%
Newell Brands, Inc............................... 25,249 400,954
----------
Shares/
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------------
Human Resources -- 2.2%
ManpowerGroup, Inc................................ 7,581 $ 578,355
-----------
Investment Management/Advisor Services -- 6.3%
Franklin Resources, Inc........................... 18,901 576,481
Legg Mason, Inc................................... 16,052 452,987
T. Rowe Price Group, Inc.......................... 6,168 598,234
-----------
1,627,702
-----------
Medical-Biomedical/Gene -- 2.2%
Gilead Sciences, Inc.............................. 8,287 565,008
-----------
Networking Products -- 2.9%
Cisco Systems, Inc................................ 16,590 758,993
-----------
Office Automation & Equipment -- 1.3%
Pitney Bowes, Inc................................. 50,573 334,793
-----------
Retail-Apparel/Shoe -- 2.6%
Foot Locker, Inc.................................. 14,061 662,836
-----------
Retail-Jewelry -- 2.8%
Signet Jewelers, Ltd.............................. 13,143 736,665
-----------
Retail-Mail Order -- 3.1%
Williams-Sonoma, Inc.............................. 13,584 806,618
-----------
Retail-Major Department Stores -- 3.6%
Nordstrom, Inc.................................... 14,055 924,397
-----------
Retail-Misc./Diversified -- 2.3%
GameStop Corp., Class A........................... 41,526 606,280
-----------
Television -- 2.2%
TEGNA, Inc........................................ 48,549 560,255
-----------
Theaters -- 3.0%
Cinemark Holdings, Inc............................ 18,649 775,239
-----------
Toys -- 2.6%
Hasbro, Inc....................................... 7,227 662,788
-----------
Total Long-Term Investment Securities
(cost $25,872,585)............................... 25,539,727
-----------
REPURCHASE AGREEMENTS -- 0.7%
Agreement with Fixed Income Clearing Corp.
bearing interest at 0.42%, dated 10/31/2018, to
be repurchased 11/01/2018 in the amount of
$190,002 and collateralized by $205,000 of
United States Treasury Bonds, bearing interest
at 3.00%, due 11/15/2044 and having an
approximate value of $195,289
(cost $190,000).................................. $190,000 190,000
-----------
TOTAL INVESTMENTS
(cost $26,062,585)(1)............................ 99.5% 25,729,727
Other assets less liabilities....................... 0.5 125,212
-------- -----------
NET ASSETS 100.0% $25,854,939
======== ===========
--------
(1)See Note 6 for cost of investments on a tax basis.
24
SunAmerica Specialty Series -- AIG ESG Dividend Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2018 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stocks.............. $25,539,727 $ -- $ -- $25,539,727
Repurchase Agreements...... -- 190,000 -- 190,000
----------- -------- ---- -----------
Total Investments at Value. $25,539,727 $190,000 $ -- $25,729,727
=========== ======== ==== ===========
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
See Notes to Financial Statements
25
SunAmerica Specialty Series -- AIG Focused Alpha Large-Cap Fund
PORTFOLIO PROFILE -- October 31, 2018 -- (unaudited)
Industry Allocation*
E-Commerce/Products..................... 8.9%
Diversified Banking Institutions........ 7.1
Medical-Drugs........................... 6.0
Computers............................... 5.9
Cable/Satellite TV...................... 5.7
Commercial Services-Finance............. 5.6
Finance-Credit Card..................... 5.5
Telephone-Integrated.................... 5.5
Medical-HMO............................. 5.4
Banks-Super Regional.................... 5.3
Applications Software................... 5.2
Transport-Rail.......................... 4.9
Web Portals/ISP......................... 4.9
Medical Labs & Testing Services......... 4.9
Electric-Integrated..................... 4.7
Oil Companies-Integrated................ 4.6
Entertainment Software.................. 3.4
Coatings/Paint.......................... 2.6
----
96.1%
====
--------
* Calculated as a percentage of net assets
26
SunAmerica Specialty Series -- AIG Focused Alpha Large-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
COMMON STOCKS -- 96.1%
Applications Software -- 5.2%
salesforce.com, Inc.+..................... 240,118 $32,953,794
-----------
Banks-Super Regional -- 5.3%
US Bancorp................................ 640,318 33,469,422
-----------
Cable/Satellite TV -- 5.7%
Comcast Corp., Class A.................... 932,043 35,548,120
-----------
Coatings/Paint -- 2.6%
Sherwin-Williams Co....................... 40,685 16,008,327
-----------
Commercial Services-Finance -- 5.6%
PayPal Holdings, Inc.+.................... 418,305 35,217,098
-----------
Computers -- 5.9%
Apple, Inc................................ 169,308 37,054,749
-----------
Diversified Banking Institutions -- 7.1%
Citigroup, Inc............................ 232,800 15,239,088
JPMorgan Chase & Co....................... 269,090 29,336,192
-----------
44,575,280
-----------
E-Commerce/Products -- 8.9%
Alibaba Group Holding, Ltd. ADR+.......... 158,954 22,615,975
Amazon.com, Inc.+......................... 20,744 33,149,120
-----------
55,765,095
-----------
Electric-Integrated -- 4.7%
FirstEnergy Corp.......................... 794,481 29,618,252
-----------
Entertainment Software -- 3.4%
Activision Blizzard, Inc.................. 310,964 21,472,064
-----------
Finance-Credit Card -- 5.5%
Visa, Inc., Class A....................... 252,749 34,841,450
-----------
Medical Labs & Testing Services -- 4.9%
Laboratory Corp. of America Holdings+..... 190,197 30,536,128
-----------
Medical-Drugs -- 6.0%
Pfizer, Inc............................... 869,661 37,447,603
-----------
Medical-HMO -- 5.4%
UnitedHealth Group, Inc................... 130,169 34,019,668
-----------
Oil Companies-Integrated -- 4.6%
Suncor Energy, Inc........................ 863,410 28,760,187
-----------
Printing-Commercial -- 0.0%
Quad/Graphics, Inc........................ 1 15
-----------
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Telephone-Integrated -- 5.5%
Verizon Communications, Inc............... 608,200 $ 34,722,138
------------
Transport-Rail -- 4.9%
Norfolk Southern Corp..................... 183,897 30,863,433
------------
Web Portals/ISP -- 4.9%
Alphabet, Inc., Class A+.................. 28,254 30,813,247
------------
TOTAL INVESTMENTS
(cost $489,768,064)(1).................... 96.1% 603,686,070
Other assets less liabilities.............. 3.9 24,206,225
------- ------------
NET ASSETS 100.0% $627,892,295
======= ============
--------
+ Non-income producing security
(1)See Note 6 for cost of investments on a tax basis.
ADR -- American Depositary Receipt
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2018 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Common Stocks.......... $603,686,070 $ -- $ -- $603,686,070
============ ==== ==== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
See Notes to Financial Statements
27
SunAmerica Specialty Series -- AIG Focused Multi-Cap Growth Fund
PORTFOLIO PROFILE -- October 31, 2018 -- (unaudited)
Industry Allocation*
E-Commerce/Products................ 12.2%
Medical-HMO........................ 7.6
Finance-Credit Card................ 7.5
Commercial Services-Finance........ 7.4
Applications Software.............. 7.1
Web Portals/ISP.................... 6.7
Resorts/Theme Parks................ 6.4
Computers.......................... 6.0
Entertainment Software............. 4.7
Auto-Cars/Light Trucks............. 4.0
Hotels/Motels...................... 3.7
Coatings/Paint..................... 3.5
Multimedia......................... 2.4
Commercial Services................ 2.3
Diagnostic Kits.................... 2.2
Professional Sports................ 1.8
Insurance-Property/Casualty........ 1.7
Finance-Investment Banker/Broker... 1.7
Enterprise Software/Service........ 1.1
Consulting Services................ 0.6
Schools............................ 0.6
Real Estate Investment Trusts...... 0.3
----
91.5%
====
--------
* Calculated as a percentage of net assets
28
SunAmerica Specialty Series -- AIG Focused Multi-Cap Growth Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
COMMON STOCKS -- 91.5%
Applications Software -- 7.1%
salesforce.com, Inc.+.................... 331,324 $45,470,906
-----------
Auto-Cars/Light Trucks -- 4.0%
Tesla, Inc.+............................. 75,664 25,522,980
-----------
Coatings/Paint -- 3.5%
Sherwin-Williams Co...................... 57,150 22,486,811
-----------
Commercial Services -- 2.3%
CoStar Group, Inc.+...................... 40,050 14,474,871
-----------
Commercial Services-Finance -- 7.4%
PayPal Holdings, Inc.+................... 563,132 47,410,083
-----------
Computers -- 6.0%
Apple, Inc............................... 174,879 38,274,018
-----------
Consulting Services -- 0.6%
Gartner, Inc.+........................... 26,375 3,890,840
-----------
Diagnostic Kits -- 2.2%
IDEXX Laboratories, Inc.+................ 66,675 14,143,101
-----------
E-Commerce/Products -- 12.2%
Alibaba Group Holding, Ltd. ADR+......... 221,488 31,513,313
Amazon.com, Inc.+........................ 29,156 46,591,579
-----------
78,104,892
-----------
Enterprise Software/Service -- 1.1%
Guidewire Software, Inc.+................ 80,000 7,117,600
-----------
Entertainment Software -- 4.7%
Activision Blizzard, Inc................. 433,286 29,918,398
-----------
Finance-Credit Card -- 7.5%
Visa, Inc., Class A...................... 347,515 47,904,943
-----------
Finance-Investment Banker/Broker -- 1.7%
Charles Schwab Corp...................... 229,000 10,588,960
-----------
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
Hotels/Motels -- 3.7%
Hyatt Hotels Corp., Class A.............. 337,375 $ 23,346,350
------------
Insurance-Property/Casualty -- 1.7%
Arch Capital Group, Ltd.+................ 390,000 11,064,300
------------
Medical-HMO -- 7.6%
UnitedHealth Group, Inc.................. 185,034 48,358,636
------------
Multimedia -- 2.4%
FactSet Research Systems, Inc............ 67,146 15,024,589
------------
Professional Sports -- 1.8%
Manchester United PLC, Class A........... 557,725 11,678,762
------------
Real Estate Investment Trusts -- 0.3%
American Homes 4 Rent, Class A........... 100,000 2,107,000
------------
Resorts/Theme Parks -- 6.4%
Marriott Vacations Worldwide Corp........ 50,800 4,495,292
Vail Resorts, Inc........................ 145,000 36,441,400
------------
40,936,692
------------
Schools -- 0.6%
2U, Inc.+................................ 60,000 3,774,600
------------
Web Portals/ISP -- 6.7%
Alphabet, Inc., Class A+................. 38,909 42,433,377
------------
TOTAL INVESTMENTS
(cost $449,653,734)(1)................. 91.5% 584,032,709
Other assets less liabilities............. 8.5 54,148,510
------- ------------
NET ASSETS 100.0% $638,181,219
======= ============
--------
+ Non-income producing security
(1)See Note 6 for cost of investments on a tax basis.
ADR -- American Depositary Receipt
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2018 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Common Stocks.......... $584,032,709 $ -- $ -- $584,032,709
============ ==== ==== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
See Notes to Financial Statements
29
SunAmerica Specialty Series -- AIG Income Explorer Fund
PORTFOLIO PROFILE -- October 31, 2018 -- (unaudited)
Industry Allocation*
Domestic Fixed Income Investment Companies...... 26.4%
Diversified Banking Institutions................ 7.8
Domestic Equity Investment Companies............ 6.3
International Fixed Income Investment Companies. 5.3
Insurance-Life/Health........................... 4.4
Insurance-Multi-line............................ 2.5
Telephone-Integrated............................ 2.3
Electric-Integrated............................. 2.2
Banks-Commercial................................ 1.9
Real Estate Investment Trusts................... 1.8
Oil Companies-Integrated........................ 1.8
Tobacco......................................... 1.7
Banks-Super Regional............................ 1.7
Cellular Telecom................................ 1.7
Domestic Mixed Allocation Investment Companies.. 1.5
Sovereign Agency................................ 1.2
Medical-Drugs................................... 1.2
Retail-Apparel/Shoe............................. 1.2
Insurance-Property/Casualty..................... 1.1
Metal-Diversified............................... 1.1
Auto-Cars/Light Trucks.......................... 1.1
Coal............................................ 1.1
Television...................................... 1.0
Human Resources................................. 1.0
Pipelines....................................... 1.0
Transport-Services.............................. 1.0
Semiconductor Components-Integrated Circuits.... 0.8
Diversified Minerals............................ 0.8
Gas-Distribution................................ 0.7
Closed-End Funds................................ 0.7
Fisheries....................................... 0.7
Telecom Services................................ 0.7
Diversified Manufacturing Operations............ 0.7
Commercial Services-Finance..................... 0.7
Oil Refining & Marketing........................ 0.7
Chemicals-Diversified........................... 0.6
Real Estate Operations & Development............ 0.6
Metal Processors & Fabrication.................. 0.6
Retail-Jewelry.................................. 0.6
Retail-Major Department Stores.................. 0.5
Water........................................... 0.5
Food-Retail..................................... 0.5
Building-Residential/Commercial................. 0.5
Metal-Iron...................................... 0.5
Airlines........................................ 0.5
Insurance-Reinsurance........................... 0.5
Computer Services............................... 0.5
Building-Heavy Construction..................... 0.5
Advertising Agencies............................ 0.4
Banks-Money Center.............................. 0.4
Public Thoroughfares............................ 0.4
Electronic Components-Misc...................... 0.4
Electric-Generation............................. 0.3
Private Equity.................................. 0.2
Food-Dairy Products............................. 0.2
Agricultural Operations......................... 0.2
Electric-Distribution........................... 0.2
Insurance-Mutual................................ 0.1
Investment Management/Advisor Services.......... 0.1
Investment Companies..... 0.1%
Banks-Fiduciary.......... 0.1
Energy-Alternate Sources. 0.1
----
97.9%
====
--------
* Calculated as a percentage of net assets
30
SunAmerica Specialty Series -- AIG Income Explorer Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
COMMON STOCKS -- 27.9%
Advertising Agencies -- 0.4%
WPP PLC........................................ 20,892 $237,072
--------
Airlines -- 0.5%
Deutsche Lufthansa AG.......................... 13,702 275,667
--------
Auto-Cars/Light Trucks -- 1.1%
Renault SA..................................... 3,691 275,673
Subaru Corp.................................... 11,602 312,928
--------
588,601
--------
Building-Heavy Construction -- 0.5%
Bouygues SA.................................... 7,430 271,171
--------
Building-Residential/Commercial -- 0.5%
Persimmon PLC.................................. 9,986 292,578
--------
Cellular Telecom -- 1.3%
China Mobile, Ltd.............................. 37,200 347,626
Telstra Corp., Ltd............................. 160,376 350,752
--------
698,378
--------
Chemicals-Diversified -- 0.6%
PTT Global Chemical PCL........................ 150,900 350,507
--------
Closed-End Funds -- 0.7%
Bancroft Fund, Ltd............................. 19,661 401,183
--------
Coal -- 1.1%
China Shenhua Energy Co., Ltd.................. 145,500 328,480
Yanzhou Coal Mining Co., Ltd................... 266,000 250,827
--------
579,307
--------
Commercial Services-Finance -- 0.7%
H&R Block, Inc................................. 14,012 371,879
--------
Computer Services -- 0.5%
International Business Machines Corp........... 2,356 271,953
--------
Electronic Components-Misc. -- 0.4%
General Interface Solution Holding, Ltd........ 58,000 194,603
--------
Fisheries -- 0.7%
Marine Harvest ASA............................. 16,229 392,323
--------
Food-Retail -- 0.5%
Wesfarmers, Ltd................................ 8,925 295,512
--------
Gas-Distribution -- 0.5%
Centrica PLC................................... 152,681 286,910
--------
Human Resources -- 1.0%
Adecco Group AG................................ 5,521 270,121
Randstad NV.................................... 5,509 277,851
--------
547,972
--------
Medical-Drugs -- 1.2%
GlaxoSmithKline PLC............................ 16,097 311,267
Sanofi......................................... 3,887 347,423
--------
658,690
--------
Metal Processors & Fabrication -- 0.6%
Catcher Technology Co., Ltd.................... 30,000 305,128
--------
Metal-Diversified -- 1.1%
MMC Norilsk Nickel PJSC ADR.................... 17,901 296,664
Rio Tinto, Ltd................................. 5,588 303,004
--------
599,668
--------
Value
Security Description Shares (Note 3)
--------------------------------------------------------
Metal-Iron -- 0.5%
Fortescue Metals Group, Ltd....... 102,462 $ 289,853
-----------
Oil Companies-Integrated -- 1.8%
China Petroleum & Chemical Corp... 376,000 304,056
Gazprom PAO ADR................... 71,841 339,884
Lukoil PJSC ADR................... 4,707 351,470
-----------
995,410
-----------
Oil Refining & Marketing -- 0.7%
SK Innovation Co., Ltd............ 1,929 362,753
-----------
Public Thoroughfares -- 0.4%
Atlantia SpA...................... 11,125 223,408
-----------
Real Estate Operations & Development -- 0.6%
China Vanke Co., Ltd.............. 100,000 306,610
-----------
Retail-Apparel/Shoe -- 1.2%
Hennes & Mauritz AB, Class B...... 20,465 360,195
L Brands, Inc..................... 8,984 291,261
-----------
651,456
-----------
Retail-Jewelry -- 0.6%
Pandora A/S....................... 4,846 303,114
-----------
Retail-Major Department Stores -- 0.5%
Marks & Spencer Group PLC......... 79,746 301,531
-----------
Semiconductor Components-Integrated Circuits -- 0.8%
Nanya Technology Corp............. 128,000 214,888
Winbond Electronics Corp.......... 535,000 233,857
-----------
448,745
-----------
Telecom Services -- 0.5%
Telenor ASA....................... 15,214 278,645
-----------
Telephone-Integrated -- 2.2%
AT&T, Inc......................... 9,957 305,481
BT Group PLC...................... 107,275 329,644
Orange SA......................... 18,858 294,797
Telefonica SA..................... 36,409 298,095
-----------
1,228,017
-----------
Television -- 1.0%
ITV PLC........................... 141,800 269,758
ProSiebenSat.1 Media SE........... 12,995 300,428
-----------
570,186
-----------
Tobacco -- 1.7%
Imperial Brands PLC............... 8,520 288,692
Japan Tobacco, Inc................ 12,000 308,569
Philip Morris International, Inc.. 4,003 352,544
-----------
949,805
-----------
Transport-Services -- 1.0%
Deutsche Post AG.................. 10,066 318,696
Royal Mail PLC.................... 49,209 225,558
-----------
544,254
-----------
Water -- 0.5%
Veolia Environnement SA........... 14,944 298,143
-----------
Total Common Stocks
(cost $16,969,953)............... 15,371,032
-----------
31
SunAmerica Specialty Series -- AIG Income Explorer Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------
PREFERRED SECURITIES -- 9.2%
Agricultural Operations -- 0.2%
CHS, Inc.
Series 4
7.50%....................... 4,456 $118,218
--------
Banks-Commercial -- 0.3%
BB&T Corp.
Series E
5.63%....................... 1,868 45,504
BB&T Corp.
5.85%....................... 3,574 89,922
Synovus Financial Corp.
Series D
6.30%....................... 1,700 43,435
--------
178,861
--------
Banks-Super Regional -- 0.5%
Capital One Financial Corp.
Series B
6.00%....................... 3,600 89,928
Capital One Financial Corp.
Series H
6.00%....................... 1,788 45,683
Wells Fargo & Co.
Series W
5.70%....................... 1,709 42,793
Wells Fargo & Co.
Series V
6.00%....................... 3,150 80,609
--------
259,013
--------
Diversified Banking Institutions -- 1.2%
Bank of America Corp.
Series HH
5.88%....................... 5,375 133,945
Bank of America Corp.
Series GG
6.00%....................... 5,304 133,289
GMAC Capital Trust I FRS
Series 2
(3 ML+5.79%)
8.13%....................... 8,433 221,451
Morgan Stanley
Series K
5.85%....................... 2,825 71,190
Morgan Stanley
Series F
6.88%....................... 2,769 74,237
--------
634,112
--------
Electric-Integrated -- 0.9%
CMS Energy Corp.
5.88%....................... 1,625 40,788
DTE Energy Co.
Series F
6.00%....................... 1,725 44,747
Integrys Holding, Inc.
6.00%....................... 4,090 102,761
PPL Capital Funding, Inc.
Series B
5.90%....................... 3,850 96,019
Value
Security Description Shares (Note 3)
----------------------------------------------------------
Electric-Integrated (continued)
SCE Trust
5.00%................................... 2,019 $ 42,641
SCE Trust
Series J
5.38%................................... 2,027 48,222
SCE Trust
Series K
5.45%................................... 1,263 30,893
Southern Co.
6.25%................................... 3,527 90,256
--------
496,327
--------
Energy-Alternate Sources -- 0.1%
Algonquin Power & Utilities Corp.
6.88%................................... 1,925 49,126
--------
Food-Dairy Products -- 0.1%
Dairy Farmers of America, Inc.
7.88%*(2)............................... 500 50,125
--------
Insurance-Life/Health -- 0.3%
Prudential Financial, Inc.
5.63%................................... 2,000 48,220
Unum Group
6.25%................................... 4,960 124,248
--------
172,468
--------
Insurance-Multi-line -- 0.7%
Allstate Corp.
Series G
5.63%................................... 2,028 49,625
American Financial Group, Inc.
6.00%................................... 4,764 119,291
American Financial Group, Inc.
6.25%................................... 3,803 96,482
Hartford Financial Services Group, Inc.
Series G
6.00%................................... 2,000 50,140
MetLife, Inc.
Series E
5.63%................................... 2,090 51,748
--------
367,286
--------
Insurance-Property/Casualty -- 0.5%
Arch Capital Group, Ltd.
Series F
5.45%................................... 1,386 31,240
Enstar Group, Ltd.
Series D
7.00%................................... 4,675 120,101
Hanover Insurance Group, Inc.
6.35%................................... 2,322 58,445
WR Berkley Corp.
5.70%................................... 3,500 81,900
--------
291,686
--------
Insurance-Reinsurance -- 0.5%
PartnerRe, Ltd.
Series I
5.88%................................... 2,500 61,775
32
SunAmerica Specialty Series -- AIG Income Explorer Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------
PREFERRED SECURITIES (continued)
Insurance-Reinsurance (continued)
Reinsurance Group of America, Inc.
5.75%................................. 2,397 $ 60,261
Reinsurance Group of America, Inc.
6.20%................................. 2,245 59,043
RenaissanceRe Holdings, Ltd.
Series F
5.75%................................. 3,844 93,601
--------
274,680
--------
Investment Companies -- 0.1%
Oaktree Capital Group LLC
Series B
6.55%................................. 2,500 62,875
--------
Investment Management/Advisor Services -- 0.1%
Ares Management LP
Series A
7.00%................................. 2,675 69,523
--------
Pipelines -- 0.4%
Enbridge, Inc.
Series B
6.38%................................. 5,450 134,506
Energy Transfer Partners LP
Series D
7.63%................................. 3,550 88,928
--------
223,434
--------
Private Equity -- 0.2%
Apollo Global Management LLC
Series B
6.38%................................. 5,351 132,116
--------
Real Estate Investment Trusts -- 1.8%
American Homes 4 Rent
Series E
6.35%................................. 3,167 74,836
American Homes 4 Rent
Series D
6.50%................................. 3,196 76,448
Colony Capital, Inc.
Series E
8.75%................................. 3,272 84,483
Global Net Lease, Inc.
Series A
7.25%................................. 1,700 42,313
Kimco Realty Corp.
Series K
5.63%................................. 1,750 40,128
Monmouth Real Estate Investment Corp.
Series C
6.13%................................. 2,000 48,000
National Retail Properties, Inc.
Series E
5.70%................................. 2,479 59,025
National Storage Affiliates Trust
Series A
6.00%................................. 1,745 42,316
Public Storage
Series Y
6.38%................................. 1,800 45,990
Shares/
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------
Real Estate Investment Trusts (continued)
SITE Centers Corp.
Class K
6.25%.......................... 2,800 $ 60,956
SITE Centers Corp.
Class J
6.50%.......................... 4,625 107,994
SL Green Realty Corp.
Series I
6.50%.......................... 4,040 99,869
Spirit Realty Capital, Inc.
Series A
6.00%.......................... 1,925 42,908
Summit Hotel Properties, Inc.
Series E
6.25%.......................... 1,839 42,205
Taubman Centers, Inc.
Series K
6.25%.......................... 1,534 36,279
VEREIT, Inc.
Series F
6.70%.......................... 3,752 93,350
----------
997,100
----------
Sovereign Agency -- 1.0%
AgriBank FCB
6.88%.......................... 1,250 134,063
CoBank ACB
Series H
6.20%.......................... 700 72,660
CoBank ACB
Series F
6.25%.......................... 900 92,700
Farm Credit Bank of Texas
6.75%*......................... 1,200 127,200
Farm Credit Bank of Texas
Series 1
10.00%......................... 100 114,000
----------
540,623
----------
Telecom Services -- 0.2%
Centaur Funding Corp.
Series B
9.08%*......................... 100 107,765
----------
Telephone-Integrated -- 0.1%
AT&T, Inc.
5.63%.......................... 1,800 42,606
----------
Total Preferred Securities
(cost $4,983,986).............. 5,067,944
----------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 21.2%
Banks-Commercial -- 1.6%
Citizens Financial Group, Inc.
6.38% due 04/06/2024(1)........ $ 50,000 49,994
Cooperatieve Rabobank UA
11.00% due 06/30/2019*(1)...... 200,000 209,200
DNB Bank ASA
6.50% due 03/26/2022(1)........ 200,000 199,736
ING Groep NV
6.88% due 04/16/2022(1)........ 200,000 202,000
33
SunAmerica Specialty Series -- AIG Income Explorer Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------
PREFERRED SECURITIES/CAPITAL SECURITIES (continued)
Banks-Commercial (continued)
Standard Chartered PLC
7.75% due 04/02/2023*(1)........... $200,000 $202,000
--------
862,930
--------
Banks-Fiduciary -- 0.1%
State Street Corp.
Series F
5.25% due 09/15/2020(1)............ 50,000 50,563
--------
Banks-Money Center -- 0.4%
Dresdner Funding Trust I
8.15% due 06/30/2031*.............. 100,000 124,000
HSBC Capital Funding Dollar 1 LP
10.18% due 06/30/2030*(1).......... 75,000 110,250
--------
234,250
--------
Banks-Super Regional -- 1.2%
PNC Financial Services Group, Inc.
6.75% due 08/01/2021(1)............ 80,000 84,500
Wells Fargo & Co.
Series U
5.88% due 06/15/2025(1)............ 109,000 112,270
Wells Fargo & Co.
Series S
5.90% due 06/15/2024(1)............ 50,000 50,375
Wells Fargo & Co. FRS
6.10% (3 ML+3.77%)
due 12/15/2018(1).................. 270,000 272,025
Wells Fargo Capital X
5.95% due 12/01/2086............... 115,000 120,175
--------
639,345
--------
Cellular Telecom -- 0.4%
Vodafone Group PLC
6.25% due 10/03/2078............... 200,000 195,250
--------
Diversified Banking Institutions -- 6.6%
Bank of America Corp.
Series AA
6.10% due 03/17/2025(1)............ 105,000 107,756
Bank of America Corp.
Series X
6.25% due 09/05/2024(1)............ 174,000 179,220
Bank of America Corp.
Series Z
6.50% due 10/23/2024(1)............ 180,000 190,881
Barclays PLC
7.75% due 09/15/2023(1)............ 200,000 199,540
BNP Paribas SA
7.38% due 08/19/2025*(1)........... 200,000 205,500
BNP Paribas SA
7.63% due 03/30/2021*(1)........... 200,000 207,750
Citigroup, Inc.
5.90% due 02/15/2023(1)............ 95,000 95,000
Citigroup, Inc.
Series R
6.13% due 11/15/2020(1)............ 200,000 204,500
Citigroup, Inc.
Series T
6.25% due 08/15/2026(1)............ 81,000 82,721
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------
Diversified Banking Institutions (continued)
Citigroup, Inc.
5.95% due 01/30/2023(1).......... $ 74,000 $ 74,093
Credit Agricole SA
8.13% due 12/23/2025*(1)......... 200,000 214,513
Credit Suisse Group AG
7.50% due 07/17/2023*(1)......... 200,000 203,500
HSBC Holdings PLC
6.88% due 06/01/2021(1).......... 200,000 207,250
JPMorgan Chase & Co.
Series Z
5.30% due 05/01/2020(1).......... 105,000 106,575
JPMorgan Chase & Co. FRS
Series I
5.99% (3 ML +3.47%)
due 01/30/2019(1)................ 96,000 96,515
JPMorgan Chase & Co.
Series S
6.75% due 02/01/2024(1).......... 252,000 268,758
Morgan Stanley
Series J
5.55% due 07/15/2020(1).......... 100,000 101,000
Royal Bank of Scotland Group PLC
7.65% due 09/30/2031(1).......... 70,000 87,325
Royal Bank of Scotland Group PLC
8.63% due 08/15/2021(1).......... 200,000 210,250
Societe Generale SA
7.38% due 09/13/2021*(1)......... 200,000 202,750
UBS Group AG
7.13% due 02/19/2020(1).......... 200,000 203,468
UBS Group AG
7.13% due 08/10/2021(1).......... 200,000 206,750
----------
3,655,615
----------
Diversified Manufacturing Operations -- 0.7%
General Electric Co.
Series D
5.00% due 01/21/2021(1).......... 416,000 385,320
----------
Diversified Minerals -- 0.8%
BHP Billiton Finance USA, Ltd.
6.25% due 10/19/2075*............ 200,000 208,250
BHP Billiton Finance USA, Ltd.
6.75% due 10/19/2075*............ 200,000 216,500
----------
424,750
----------
Electric-Distribution -- 0.2%
CenterPoint Energy, Inc.
Series A
6.13% due 09/01/2023(1).......... 100,000 100,875
----------
Electric-Generation -- 0.3%
Electricite de France SA
5.25% due 01/29/2023*(1)......... 200,000 193,750
----------
Electric-Integrated -- 1.3%
Emera, Inc.
Series 16-A
6.75% due 06/15/2076............. 168,000 174,720
Enel SpA
8.75% due 09/24/2073*............ 200,000 216,000
34
SunAmerica Specialty Series -- AIG Income Explorer Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------
PREFERRED SECURITIES/CAPITAL SECURITIES (continued)
Electric-Integrated (continued)
Southern California Edison Co.
6.25% due 02/01/2022(1)..................... $ 85,000 $ 87,550
Southern Co.
Series B
5.50% due 03/15/2057........................ 215,000 214,211
----------
692,481
----------
Gas-Distribution -- 0.2%
NiSource, Inc.
5.65% due 06/15/2023*(1).................... 135,000 132,327
----------
Insurance-Life/Health -- 4.1%
Dai-ichi Life Insurance Co., Ltd.
5.10% due 10/28/2024*(1).................... 200,000 199,750
Dai-ichi Life Insurance Co., Ltd.
7.25% due 07/25/2021*(1).................... 150,000 161,850
Hanwha Life Insurance Co., Ltd.
4.70% due 04/23/2048*....................... 200,000 190,262
La Mondiale SAM
4.80% due 01/18/2048........................ 200,000 171,000
La Mondiale SAM
Sub. Notes
7.63% due 04/23/2019(1)..................... 200,000 203,492
Meiji Yasuda Life Insurance Co.
5.10% due 04/26/2048*....................... 200,000 198,000
Nippon Life Insurance Co.
5.00% due 10/18/2042*....................... 200,000 202,000
Nippon Life Insurance Co.
5.10% due 10/16/2044*....................... 200,000 200,500
Prudential Financial, Inc.
5.20% due 03/15/2044........................ 90,000 87,750
Prudential Financial, Inc.
5.63% due 06/15/2043........................ 197,000 200,467
Prudential Financial, Inc.
5.70% due 09/15/2048........................ 80,000 77,440
Prudential Financial, Inc.
5.88% due 09/15/2042........................ 130,000 135,265
Sumitomo Life Insurance Co.
6.50% due 09/20/2073*....................... 200,000 214,020
----------
2,241,796
----------
Insurance-Multi-line -- 1.8%
Assurant, Inc.
7.00% due 03/27/2048........................ 100,000 100,000
Hartford Financial Services Group, Inc. FRS
4.44% (3 ML+2.13%)
due 02/12/2067*............................. 95,000 87,400
MetLife Capital Trust IV
7.88% due 12/15/2067*....................... 100,000 121,000
MetLife, Inc.
Series C
5.25% due 06/15/2020(1)..................... 157,000 157,981
MetLife, Inc.
5.88% due 03/15/2028(1)..................... 38,000 37,905
MetLife, Inc.
9.25% due 04/08/2068*....................... 100,000 132,500
MetLife, Inc.
10.75% due 08/01/2069....................... 85,000 129,625
Shares/
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------------
Insurance-Multi-line (continued)
Voya Financial, Inc.
5.65% due 05/15/2053............................ $166,000 $ 163,510
Voya Financial, Inc.
6.13% due 09/15/2023(1)......................... 60,000 59,625
-----------
989,546
-----------
Insurance-Mutual -- 0.1%
Liberty Mutual Group, Inc. FRS
5.24% (3 ML+2.91%)
due 03/07/2067*................................. 75,000 72,375
-----------
Insurance-Property/Casualty -- 0.6%
Mitsui Sumitomo Insurance Co., Ltd.
7.00% due 03/15/2072*........................... 100,000 107,625
QBE Insurance Group, Ltd.
6.75% due 12/02/2044............................ 200,000 205,000
-----------
312,625
-----------
Pipelines -- 0.6%
Enbridge Energy Partners LP FRS
6.19% (3 ML+3.80%)
due 10/01/2077.................................. 65,000 64,357
Enbridge, Inc.
6.25% due 03/01/2078............................ 35,000 32,750
TransCanada Trust
5.63% due 05/20/2075............................ 52,000 49,497
TransCanada Trust
Series 16-A
5.88% due 08/15/2076............................ 178,000 175,223
-----------
321,827
-----------
Sovereign Agency -- 0.2%
CoBank ACB
Series I
6.25% due 10/01/2026(1)......................... 123,000 128,535
-----------
Total Preferred Securities/Capital Securities
(cost $11,838,649).............................. 11,634,160
-----------
REGISTERED INVESTMENT COMPANIES(3) -- 39.5%
Domestic Equity Investment Companies -- 6.3%
Eaton Vance Tax-Advantaged Dividend Income
Fund............................................ 23,077 511,617
Eaton Vance Tax-Managed Diversified Equity
Income Fund..................................... 39,045 447,456
First Trust Energy Income and Growth Fund........ 15,877 310,554
Gabelli Dividend & Income Trust.................. 34,689 714,247
Gabelli Equity Trust, Inc........................ 81,900 476,658
Reaves Utility Income Fund....................... 26,418 802,050
Tortoise MLP Fund, Inc........................... 12,504 179,807
-----------
3,442,389
-----------
Domestic Fixed Income Investment Companies -- 26.4%
AllianzGI Convertible & Income Fund.............. 73,940 459,167
AllianzGI Convertible & Income Fund II........... 98,834 539,634
BlackRock Corporate High Yield Fund, Inc......... 75,129 737,767
BlackRock Floating Rate Income Strategies Fund,
Inc............................................. 6,110 79,247
BlackRock Limited Duration Income Trust.......... 18,879 269,970
BlackRock MuniHoldings Investment Quality
Fund............................................ 24,566 290,861
35
SunAmerica Specialty Series -- AIG Income Explorer Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES(3) (continued)
Domestic Fixed Income Investment Companies (continued)
BlackRock MuniYield Quality Fund III, Inc........... 18,006 $ 209,770
BlackRock Taxable Municipal Bond Trust.............. 12,827 253,205
Calamos Convertible and High Income Fund............ 61,997 673,287
DoubleLine Income Solutions Fund.................... 41,579 780,022
Eaton Vance Limited Duration Income Fund............ 47,345 581,397
Eaton Vance Senior Floating-Rate Trust.............. 7,841 105,305
Eaton Vance Senior Income Trust..................... 28,742 178,775
Flaherty & Crumrine Preferred Securities Income
Fund, Inc.......................................... 38,160 665,892
Flaherty & Crumrine Total Return Fund, Inc.......... 20,825 369,852
Franklin Limited Duration Income Trust.............. 15,233 141,667
Guggenheim Taxable Municipal Managed Duration
Trust.............................................. 14,301 287,879
Invesco Dynamic Credit Opportunities Fund........... 30,138 331,819
John Hancock Preferred Income Fund.................. 37,710 783,237
MFS Multimarket Income Trust........................ 28,969 151,798
New America High Income Fund, Inc................... 94,470 773,709
Nuveen AMT-Free Quality Municipal Income Fund....... 22,728 275,691
Nuveen Credit Strategies Income Fund................ 70,168 537,487
Nuveen Floating Rate Income Fund.................... 8,667 86,323
Nuveen Floating Rate Income Opportunity Fund........ 13,139 131,916
Nuveen Municipal Credit Income Fund................. 22,018 292,619
Nuveen Municipal Value Fund, Inc.................... 17,799 163,395
Nuveen Preferred Income Opportunities Fund.......... 95,918 867,099
Nuveen Short Duration Credit Opportunities Fund..... 10,266 164,153
PIMCO Corporate & Income Opportunity Fund........... 17,437 292,244
PIMCO Dynamic Credit and Mortgage Income
Fund............................................... 43,464 987,502
PIMCO High Income Fund.............................. 65,582 527,279
PIMCO Income Strategy Fund II....................... 57,760 586,842
Pioneer Floating Rate Trust......................... 12,997 137,443
Pioneer High Income Trust........................... 42,175 368,609
Wells Fargo Income Opportunities Fund............... 22,011 164,862
Western Asset Global Corporate Defined Opportunity
Fund, Inc.......................................... 8,868 134,794
Western Asset High Yield Defined Opportunity Fund,
Inc................................................ 10,089 141,145
-----------
14,523,663
-----------
Domestic Mixed Allocation Investment Company -- 1.5%
Flaherty & Crumrine Dynamic Preferred and Income
Fund, Inc.......................................... 38,233 841,126
-----------
International Fixed Income Investment Companies -- 5.3%
AllianceBernstein Global High Income Fund, Inc...... 21,083 233,178
BrandywineGLOBAL Global Income Opportunities
Fund, Inc.......................................... 24,701 254,173
First Trust Aberdeen Global Opportunity Income
Fund............................................... 5,094 46,457
Nuveen Preferred & Income Term Fund................. 21,487 471,855
PIMCO Dynamic Income Fund........................... 26,147 828,075
PIMCO Income Opportunity Fund....................... 24,605 627,674
Wells Fargo Multi-Sector Income Fund................ 21,301 246,453
Western Asset Global High Income Fund, Inc.......... 22,138 191,715
-----------
2,899,580
-----------
Total Registered Investment Companies
(cost $23,463,536)................................. 21,706,758
-----------
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------
U.S. CORPORATE BONDS & NOTES -- 0.1%
Food-Dairy Products -- 0.1%
Land O' Lakes, Inc.
Junior Sub. Notes
7.00% due 09/18/2028*(1)... $50,000 $ 49,938
Land O' Lakes, Inc.
Junior Sub. Notes
7.25% due 04/04/2027*(1)... 30,000 31,125
-----------
Total U.S. Corporate Bonds & Notes
(cost $80,000)............. 81,063
-----------
TOTAL INVESTMENTS
(cost $57,336,124)(4)...... 97.9% 53,860,957
Other assets less liabilities. 2.1 1,131,978
------- -----------
NET ASSETS 100.0% $54,992,935
======= ===========
--------
* 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 October 31, 2018, the aggregate value
of these securities was $4,899,725 representing 8.9% of net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(1)Perpetual maturity -- maturity date reflects the next call date.
(2)Illiquid security. At October 31, 2018, the aggregate value of these
securities was $50,125 representing 0.1% of net assets.
(3)Represents common shares of closed-end investment companies.
(4)See Note 6 for cost of investments on a tax basis.
ADR-- American Depositary Receipt
FRS-- Floating Rate Security
The rates shown on FRS are the current interest rates at October 31, 2018 and
unless noted otherwise, the dates shown are the original maturity dates.
Index Legend
3 ML -- 3 Month USD Libor
36
SunAmerica Specialty Series -- AIG Income Explorer Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2018 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stocks........................... $ 2,344,807 $13,026,225** $ -- $15,371,032
Preferred Securities:
Electric-Integrated................... 393,566 102,761 -- 496,327
Food-Dairy Products................... -- 50,125 -- 50,125
Sovereign Agency...................... 206,723 333,900 -- 540,623
Telecom Services...................... -- 107,765 -- 107,765
Other Industries...................... 3,873,104 -- -- 3,873,104
Preferred Securities/Capital Securities. -- 11,634,160 -- 11,634,160
Registered Investment Companies......... 21,706,758 -- -- 21,706,758
U.S. Corporate Bonds & Notes............ -- 81,063 -- 81,063
----------- ----------- ---- -----------
Total Investments at Value.............. $28,524,958 $25,335,999 $ -- $53,860,957
=========== =========== ==== ===========
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
** Represents foreign equity securities that have been fair valued in
accordance with pricing procedures approved by the Board (see Note 3).
See Notes to Financial Statements
37
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO PROFILE -- October 31, 2018 -- (unaudited)
Industry Allocation*
Repurchase Agreements..................... 6.9%
Banks-Commercial.......................... 5.2
Medical-Biomedical/Gene................... 4.3
Real Estate Investment Trusts............. 3.1
Medical Products.......................... 2.7
Medical-Drugs............................. 2.4
Exchange-Traded Funds..................... 2.0
Insurance-Property/Casualty............... 1.9
Electronic Components-Misc................ 1.8
Retail-Restaurants........................ 1.6
Investment Management/Advisor Services.... 1.6
Human Resources........................... 1.6
Building-Mobile Home/Manufactured Housing. 1.5
Food-Wholesale/Distribution............... 1.4
Medical-Outpatient/Home Medical........... 1.4
Computer Services......................... 1.3
Enterprise Software/Service............... 1.3
Networking Products....................... 1.3
Chemicals-Specialty....................... 1.2
Applications Software..................... 1.2
Auto/Truck Parts & Equipment-Replacement.. 1.2
Internet Security......................... 1.2
Recreational Vehicles..................... 1.1
Diversified Manufacturing Operations...... 1.1
Water Treatment Systems................... 1.1
Oil Refining & Marketing.................. 1.0
Metal Products-Distribution............... 1.0
Commercial Services-Finance............... 1.0
Electronic Components-Semiconductors...... 1.0
Retail-Apparel/Shoe....................... 1.0
Commercial Services....................... 0.9
Computer Software......................... 0.9
Building & Construction-Misc.............. 0.9
Internet Content-Information/News......... 0.9
Energy-Alternate Sources.................. 0.9
Oil Companies-Exploration & Production.... 0.9
Wireless Equipment........................ 0.9
MRI/Medical Diagnostic Imaging............ 0.8
Insurance-Life/Health..................... 0.8
Footwear & Related Apparel................ 0.8
Electronic Measurement Instruments........ 0.8
Medical Labs & Testing Services........... 0.8
Machinery-General Industrial.............. 0.8
Consulting Services....................... 0.8
E-Marketing/Info.......................... 0.8
Building-Heavy Construction............... 0.8
Beverages-Non-alcoholic................... 0.8
Medical Information Systems............... 0.8
Financial Guarantee Insurance............. 0.8
Multimedia................................ 0.8
Hazardous Waste Disposal.................. 0.7
Tobacco................................... 0.7
Computers-Periphery Equipment............. 0.7
Telecom Services.......................... 0.7
Internet Connectivity Services............ 0.7
Semiconductor Equipment................... 0.6
Retail-Jewelry............................ 0.6
Dialysis Centers.......................... 0.6
Athletic Equipment........................ 0.6
Electric-Integrated....................... 0.5
Finance-Consumer Loans.................... 0.5
Patient Monitoring Equipment................. 0.5%
Savings & Loans/Thrifts...................... 0.5
Disposable Medical Products.................. 0.5
Medical Imaging Systems...................... 0.5
Night Clubs.................................. 0.5
Steel-Specialty.............................. 0.5
Auto-Heavy Duty Trucks....................... 0.5
Oil Field Machinery & Equipment.............. 0.5
U.S. Government Treasuries................... 0.5
Finance-Investment Banker/Broker............. 0.4
Oil-Field Services........................... 0.4
Physicians Practice Management............... 0.4
Schools...................................... 0.4
Gas-Distribution............................. 0.4
Physical Therapy/Rehabilitation Centers...... 0.4
Distribution/Wholesale....................... 0.3
Auto/Truck Parts & Equipment-Original........ 0.3
E-Commerce/Services.......................... 0.3
Building & Construction Products-Misc........ 0.3
Medical Instruments.......................... 0.2
Aerospace/Defense-Equipment.................. 0.2
Food-Misc./Diversified....................... 0.2
Television................................... 0.2
Retail-Misc./Diversified..................... 0.2
Industrial Automated/Robotic................. 0.2
Telecom Equipment-Fiber Optics............... 0.2
Building-Residential/Commercial.............. 0.2
Aerospace/Defense............................ 0.2
Metal Processors & Fabrication............... 0.2
Semiconductor Components-Integrated Circuits. 0.2
Airlines..................................... 0.2
Transport-Marine............................. 0.2
Insurance-Multi-line......................... 0.2
Transport-Truck.............................. 0.2
Retail-Discount.............................. 0.1
Coal......................................... 0.1
Water........................................ 0.1
Rental Auto/Equipment........................ 0.1
Retail-Automobile............................ 0.1
Diagnostic Equipment......................... 0.1
Rubber/Plastic Products...................... 0.1
Office Furnishings-Original.................. 0.1
Consumer Products-Misc....................... 0.1
Computer Data Security....................... 0.1
Computers-Integrated Systems................. 0.1
Medical-Generic Drugs........................ 0.1
Therapeutics................................. 0.1
Miscellaneous Manufacturing.................. 0.1
Engineering/R&D Services..................... 0.1
Instruments-Controls......................... 0.1
Medical-Hospitals............................ 0.1
Finance-Mortgage Loan/Banker................. 0.1
Computers-Other.............................. 0.1
Chemicals-Diversified........................ 0.1
Printing-Commercial.......................... 0.1
Racetracks................................... 0.1
Insurance-Reinsurance........................ 0.1
Steel-Producers.............................. 0.1
Data Processing/Management................... 0.1
Electronic Parts Distribution................ 0.1
E-Commerce/Products.......................... 0.1
38
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO PROFILE -- October 31, 2018 -- (unaudited) (continued)
Industry Allocation* (continued)
Machinery-Pumps........................ 0.1%
Oil & Gas Drilling..................... 0.1
Power Converter/Supply Equipment....... 0.1
Cellular Telecom....................... 0.1
Health Care Cost Containment........... 0.1
Firearms & Ammunition.................. 0.1
Building Products-Wood................. 0.1
Retail-Building Products............... 0.1
Real Estate Management/Services........ 0.1
Building Products-Doors & Windows...... 0.1
Non-Hazardous Waste Disposal........... 0.1
Recreational Centers................... 0.1
Resorts/Theme Parks.................... 0.1
Telecommunication Equipment............ 0.1
Publishing-Newspapers.................. 0.1
Transport-Equipment & Leasing.......... 0.1
Retail-Home Furnishings................ 0.1
Paper & Related Products............... 0.1
Transport-Services..................... 0.1
Advertising Services................... 0.1
Containers-Paper/Plastic............... 0.1
Cosmetics & Toiletries................. 0.1
Retail-Pawn Shops...................... 0.1
Diagnostic Kits........................ 0.1
Machine Tools & Related Products....... 0.1
Real Estate Operations & Development... 0.1
Veterinary Diagnostics................. 0.1
Environmental Consulting & Engineering. 0.1
Satellite Telecom...................... 0.1
Drug Delivery Systems.................. 0.1
Casino Services........................ 0.1
Wire & Cable Products.................. 0.1
Web Hosting/Design..................... 0.1
Medical-HMO............................ 0.1
Batteries/Battery Systems.............. 0.1
Security Services...................... 0.1
Audio/Video Products................... 0.1
Lasers-System/Components............... 0.1
Metal-Iron............................. 0.1
Transactional Software................. 0.1
Golf................................... 0.1
Telephone-Integrated................... 0.1
Chemicals-Plastics..................... 0.1
Hotels/Motels.......................... 0.1
Medical-Nursing Homes.................. 0.1
Brewery................................ 0.1
Precious Metals........................ 0.1
Food-Confectionery..................... 0.1
Internet Content-Entertainment......... 0.1
Appliances............................. 0.1
Building-Maintenance & Services........ 0.1
Private Equity......................... 0.1
----
99.0%
====
--------
* Calculated as a percentage of net assets
39
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
COMMON STOCKS -- 89.6%
Advanced Materials -- 0.0%
Haynes International, Inc..................... 146 $ 4,228
--------
Advertising Agencies -- 0.0%
MDC Partners, Inc., Class A+.................. 657 1,623
Telaria, Inc.+................................ 517 1,515
--------
3,138
--------
Advertising Sales -- 0.0%
Boston Omaha Corp., Class A+.................. 59 1,633
Clear Channel Outdoor Holdings, Inc., Class A. 436 2,538
--------
4,171
--------
Advertising Services -- 0.1%
Fluent, Inc.+................................. 384 929
Trade Desk, Inc., Class A+.................... 383 47,320
--------
48,249
--------
Aerospace/Defense -- 0.2%
AeroVironment, Inc.+.......................... 250 22,492
Cubic Corp.................................... 298 19,552
Esterline Technologies Corp.+................. 308 36,147
Kratos Defense & Security Solutions, Inc.+.... 1,037 12,994
MSA Safety, Inc............................... 401 41,880
National Presto Industries, Inc............... 58 7,231
--------
140,296
--------
Aerospace/Defense-Equipment -- 0.2%
AAR Corp...................................... 382 18,176
Aerojet Rocketdyne Holdings, Inc.+............ 823 29,068
Astronics Corp.+.............................. 249 7,261
Astronics Corp., Class B+..................... 37 1,087
Barnes Group, Inc............................. 563 31,866
Ducommun, Inc.+............................... 125 4,645
Kaman Corp.................................... 325 20,644
Moog, Inc., Class A........................... 378 27,046
Triumph Group, Inc............................ 574 10,475
--------
150,268
--------
Agricultural Biotech -- 0.0%
Calyxt, Inc.+................................. 70 843
Marrone Bio Innovations, Inc.+................ 642 963
--------
1,806
--------
Agricultural Chemicals -- 0.0%
Intrepid Potash, Inc.+........................ 1,124 4,440
--------
Agricultural Operations -- 0.0%
Alico, Inc.................................... 39 1,291
Andersons, Inc................................ 320 11,520
Cadiz, Inc.+.................................. 266 2,958
Limoneira Co.................................. 175 4,314
Tejon Ranch Co.+.............................. 248 4,712
--------
24,795
--------
Airlines -- 0.2%
Allegiant Travel Co........................... 152 17,349
Hawaiian Holdings, Inc........................ 593 20,524
Mesa Air Group, Inc.+......................... 114 1,647
SkyWest, Inc.................................. 600 34,374
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Airlines (continued)
Spirit Airlines, Inc.+........................ 808 $ 41,935
--------
115,829
--------
Apparel Manufacturers -- 0.0%
Oxford Industries, Inc........................ 197 17,529
Superior Group of Cos., Inc................... 107 1,861
--------
19,390
--------
Appliances -- 0.1%
Hamilton Beach Brands Holding Co., Class A.... 76 1,765
iRobot Corp.+................................. 314 27,685
--------
29,450
--------
Applications Software -- 1.2%
Appfolio, Inc., Class A+...................... 178 10,164
Avalara, Inc.+................................ 102 3,419
Brightcove, Inc.+............................. 418 3,352
Ebix, Inc..................................... 283 16,219
Five9, Inc.+.................................. 675 26,568
HubSpot, Inc.+................................ 427 57,922
Immersion Corp.+.............................. 305 3,053
MINDBODY, Inc., Class A+...................... 513 16,334
New Relic, Inc.+.............................. 522 46,588
Park City Group, Inc.+........................ 157 1,355
PDF Solutions, Inc.+.......................... 326 2,608
Telenav, Inc.+................................ 364 1,551
Upland Software, Inc.+........................ 19,996 630,674
--------
819,807
--------
Athletic Equipment -- 0.6%
Clarus Corp................................... 246 2,411
Fox Factory Holding Corp.+.................... 425 22,835
Nautilus, Inc.+............................... 30,498 372,991
Vista Outdoor, Inc.+.......................... 672 8,400
--------
406,637
--------
Auction Houses/Art Dealers -- 0.0%
Sotheby's+.................................... 439 18,438
--------
Audio/Video Products -- 0.1%
Daktronics, Inc............................... 423 3,092
Roku, Inc.+................................... 510 28,356
Sonos, Inc.+.................................. 189 2,402
Universal Electronics, Inc.+.................. 159 4,972
--------
38,822
--------
Auto Repair Centers -- 0.0%
Monro, Inc.................................... 375 27,900
--------
Auto-Heavy Duty Trucks -- 0.5%
Blue Bird Corp.+.............................. 16,109 299,788
Navistar International Corp.+................. 579 19,391
REV Group, Inc................................ 353 3,851
--------
323,030
--------
Auto-Truck Trailers -- 0.0%
Wabash National Corp.......................... 666 10,057
--------
Auto/Truck Parts & Equipment-Original -- 0.3%
Altra Industrial Motion Corp.................. 707 22,815
American Axle & Manufacturing Holdings, Inc.+. 1,312 19,903
Cooper-Standard Holdings, Inc.+............... 209 19,364
Dana, Inc..................................... 1,722 26,812
40
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------------
COMMON STOCKS (continued)
Auto/Truck Parts & Equipment-Original (continued)
Gentherm, Inc.+......................... 433 $ 18,896
Meritor, Inc.+.......................... 976 16,582
Methode Electronics, Inc................ 424 12,550
Miller Industries, Inc.................. 130 3,142
Modine Manufacturing Co.+............... 583 7,585
Spartan Motors, Inc..................... 402 2,705
Superior Industries International, Inc.. 289 2,841
Tenneco, Inc............................ 599 20,624
Titan International, Inc................ 591 4,172
Tower International, Inc................ 233 6,918
--------
184,909
--------
Auto/Truck Parts & Equipment-Replacement -- 1.2%
Commercial Vehicle Group, Inc.+......... 40,744 272,577
Douglas Dynamics, Inc................... 12,169 528,013
Motorcar Parts of America, Inc.+........ 224 4,744
Standard Motor Products, Inc............ 250 13,528
--------
818,862
--------
B2B/E-Commerce -- 0.0%
ePlus, Inc.+............................ 158 13,411
--------
Banks-Commercial -- 5.2%
1st Constitution Bancorp................ 86 1,739
1st Source Corp......................... 185 8,619
Access National Corp.................... 179 4,649
ACNB Corp............................... 80 3,208
Allegiance Bancshares, Inc.+............ 139 5,381
American National Bankshares, Inc....... 97 3,501
Ameris Bancorp.......................... 499 21,402
Ames National Corp...................... 101 2,776
Arrow Financial Corp.................... 144 5,060
Atlantic Capital Bancshares, Inc.+...... 300 4,521
Auburn National Bancorporation, Inc..... 28 1,128
BancFirst Corp.......................... 212 12,165
Bancorp, Inc.+.......................... 593 6,227
BancorpSouth Bank....................... 1,109 31,828
Bank of Commerce Holdings............... 183 2,185
Bank of Marin Bancorp................... 80 6,799
Bank of N.T. Butterfield & Son, Ltd..... 643 25,906
Bank of Princeton....................... 68 1,921
Bankwell Financial Group, Inc........... 73 2,213
Banner Corp............................. 377 21,798
Bar Harbor Bankshares................... 179 4,577
Baycom Corp.+........................... 120 2,903
BCB Bancorp, Inc........................ 159 1,978
Blue Hills Bancorp, Inc................. 271 6,290
BOK Financial Corp...................... 77 6,601
Bridge Bancorp, Inc..................... 195 5,792
Bridgewater Bancshares, Inc.+........... 58 644
Bryn Mawr Bank Corp..................... 11,209 447,687
Business First Bancshares............... 125 3,296
Byline Bancorp, Inc.+................... 192 4,224
C&F Financial Corp...................... 39 1,893
Cadence BanCorp......................... 851 18,773
Cambridge Bancorp....................... 43 3,677
Camden National Corp.................... 181 7,340
Capital City Bank Group, Inc............ 134 3,176
Capstar Financial Holdings, Inc......... 93 1,375
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
Banks-Commercial (continued)
Carolina Financial Corp.................... 247 $ 8,173
Cass Information Systems, Inc.............. 141 9,320
Cathay General Bancorp..................... 911 34,317
CB Financial Services, Inc................. 55 1,525
CBTX, Inc.................................. 219 7,277
CenterState Bank Corp...................... 1,079 26,522
Central Pacific Financial Corp............. 338 9,140
Central Valley Community Bancorp........... 136 2,753
Century Bancorp, Inc., Class A............. 34 2,554
Chemical Financial Corp.................... 840 39,362
Chemung Financial Corp..................... 39 1,695
Citizens & Northern Corp................... 140 3,525
City Holding Co............................ 177 13,059
Civista Bancshares, Inc.................... 162 3,752
CNB Financial Corp......................... 171 4,378
Coastal Financial Corp.+................... 75 1,225
Codorus Valley Bancorp, Inc................ 107 2,811
Columbia Banking System, Inc............... 861 31,934
Community Bank System, Inc................. 591 34,509
Community Financial Corp................... 57 1,719
Community Trust Bancorp, Inc............... 182 8,283
ConnectOne Bancorp, Inc.................... 356 7,380
County Bancorp, Inc........................ 60 1,249
Customers Bancorp, Inc.+................... 345 7,069
CVB Financial Corp......................... 1,317 28,776
Eagle Bancorp, Inc.+....................... 376 18,488
Enterprise Bancorp, Inc.................... 113 3,659
Enterprise Financial Services Corp......... 268 11,645
Equity Bancshares, Inc., Class A+.......... 157 5,666
Esquire Financial Holdings, Inc.+.......... 70 1,679
Evans Bancorp, Inc......................... 55 2,420
Farmers & Merchants Bancorp, Inc........... 105 4,268
Farmers National Banc Corp................. 298 3,904
FB Financial Corp.......................... 193 7,041
FCB Financial Holdings, Inc., Class A+..... 499 19,526
Fidelity D&D Bancorp, Inc.................. 33 2,167
Fidelity Southern Corp..................... 258 5,991
Financial Institutions, Inc................ 181 5,168
First Bancorp, Inc./Maine.................. 120 3,427
First Bancorp, Inc./North Carolina......... 344 12,690
First BanCorp./Puerto Rico+................ 2,516 23,223
First Bancshares, Inc...................... 146 5,262
First Bank................................. 192 2,281
First Busey Corp........................... 515 14,379
First Business Financial Services, Inc..... 98 2,051
First Choice Bancorp....................... 106 2,385
First Commonwealth Financial Corp.......... 1,175 15,863
First Community Bancshares, Inc............ 190 6,561
First Community Corp....................... 84 1,835
First Financial Bancorp.................... 1,124 29,415
First Financial Bankshares, Inc............ 765 45,127
First Financial Corp....................... 140 6,420
First Foundation, Inc.+.................... 448 7,262
First Guaranty Bancshares, Inc............. 57 1,302
First Internet Bancorp..................... 115 2,964
First Interstate BancSystem, Inc., Class A. 387 16,045
First Merchants Corp....................... 581 24,175
First Mid-Illinois Bancshares, Inc......... 149 5,555
First Midwest Bancorp, Inc................. 1,206 27,690
41
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
-------------------------------------------------------
COMMON STOCKS (continued)
Banks-Commercial (continued)
First Northwest Bancorp+............. 112 $ 1,635
First of Long Island Corp............ 289 5,841
First United Corp.................... 80 1,440
Franklin Financial Network, Inc.+.... 151 5,119
Fulton Financial Corp................ 2,029 32,484
German American Bancorp, Inc......... 248 7,864
Glacier Bancorp, Inc................. 1,000 42,400
Great Southern Bancorp, Inc.......... 130 7,040
Great Western Bancorp, Inc........... 697 25,545
Green Bancorp, Inc................... 25,384 469,604
Guaranty Bancorp..................... 302 7,858
Guaranty Bancshares, Inc............. 91 2,714
Hancock Holding Co.+................. 1,002 42,044
Hanmi Financial Corp................. 376 7,888
HarborOne Bancorp, Inc.+............. 171 3,112
Heartland Financial USA, Inc......... 346 18,386
Heritage Commerce Corp............... 470 6,820
Heritage Financial Corp.............. 430 14,070
Hilltop Holdings, Inc................ 847 16,855
Home BancShares, Inc................. 1,876 35,719
Hope Bancorp, Inc.................... 1,466 21,228
Horizon Bancorp...................... 436 7,307
Howard Bancorp, Inc.+................ 154 2,450
IBERIABANK Corp...................... 654 48,716
Independent Bank Corp./Massachusetts. 320 25,104
Independent Bank Corp./Michigan...... 259 5,732
International Bancshares Corp........ 651 25,194
Investar Holding Corp................ 105 2,739
Kearny Financial Corp................ 1,142 14,777
Lakeland Bancorp, Inc................ 530 8,729
Lakeland Financial Corp.............. 287 12,350
LCNB Corp............................ 106 1,801
LegacyTexas Financial Group, Inc..... 560 21,577
Level One Bancorp, Inc............... 16 435
Live Oak Bancshares, Inc............. 300 5,520
Luther Burbank Corp.................. 240 2,321
Macatawa Bank Corp................... 306 3,320
MB Financial, Inc.................... 978 43,413
MBT Financial Corp................... 210 2,396
Mercantile Bank Corp................. 191 6,066
Merchants Bancorp.................... 190 4,370
Meta Financial Group, Inc............ 13,397 338,140
Metropolitan Bank Holding Corp.+..... 1,381 50,904
Mid Penn Bancorp, Inc................ 55 1,472
Middlefield Banc Corp................ 36 1,671
Midland States Bancorp, Inc.......... 248 6,689
MidSouth Bancorp, Inc................ 176 2,337
MidWestOne Financial Group, Inc...... 131 3,774
MVB Financial Corp................... 99 1,814
National Bankshares, Inc............. 80 3,454
National Commerce Corp.+............. 210 7,791
NBT Bancorp, Inc..................... 502 18,318
Nicolet Bankshares, Inc.+............ 98 5,233
Northeast Bancorp.................... 87 1,636
Northrim BanCorp, Inc................ 80 3,042
Norwood Financial Corp............... 68 2,584
Oak Valley Bancorp................... 82 1,488
OFG Bancorp.......................... 510 8,716
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
Banks-Commercial (continued)
Ohio Valley Banc Corp....................... 48 $ 1,677
Old Line Bancshares, Inc.................... 184 5,509
Old National Bancorp........................ 1,779 31,755
Old Second Bancorp, Inc..................... 342 4,863
OP Bancorp+................................. 149 1,547
Opus Bank................................... 232 4,406
Origin Bancorp, Inc......................... 206 7,694
Orrstown Financial Services, Inc............ 88 1,783
Pacific City Financial Corp................. 139 2,275
Pacific Mercantile Bancorp+................. 183 1,513
Park National Corp.......................... 162 14,807
PCSB Financial Corp......................... 195 3,650
Peapack Gladstone Financial Corp............ 216 5,830
Penns Woods Bancorp, Inc.................... 54 2,187
People's Utah Bancorp....................... 181 6,065
Peoples Bancorp of North Carolina, Inc...... 55 1,531
Peoples Bancorp, Inc........................ 208 7,120
Peoples Financial Services Corp............. 81 3,451
Preferred Bank.............................. 3,867 198,802
Premier Financial Bancorp, Inc.............. 139 2,466
Provident Bancorp, Inc.+.................... 51 1,277
QCR Holdings, Inc........................... 154 5,610
RBB Bancorp................................. 163 3,518
Reliant Bancorp, Inc........................ 119 2,856
Renasant Corp............................... 567 19,777
Republic Bancorp, Inc., Class A............. 113 5,070
Republic First Bancorp, Inc.+............... 518 3,497
S&T Bancorp, Inc............................ 405 16,245
Sandy Spring Bancorp, Inc................... 408 14,504
SB One Bancorp.............................. 84 2,027
Seacoast Banking Corp. of Florida+.......... 541 14,234
Select Bancorp, Inc.+....................... 132 1,626
ServisFirst Bancshares, Inc................. 548 19,717
Shore Bancshares, Inc....................... 148 2,386
Sierra Bancorp.............................. 166 4,520
Simmons First National Corp., Class A....... 1,066 28,547
SmartFinancial, Inc.+....................... 134 2,726
South State Corp............................ 430 29,098
Southern First Bancshares, Inc.+............ 81 2,909
Southern National Bancorp of Virginia, Inc.. 230 3,475
Southside Bancshares, Inc................... 391 12,387
Spirit of Texas Bancshares, Inc.+........... 25 522
State Bank Financial Corp................... 444 11,353
Sterling Bancorp, Inc....................... 258 2,670
Stock Yards Bancorp, Inc.................... 254 8,054
Summit Financial Group, Inc................. 129 2,722
Tompkins Financial Corp..................... 174 12,725
Towne Bank.................................. 776 21,829
TriCo Bancshares............................ 300 10,806
TriState Capital Holdings, Inc.+............ 289 7,289
Triumph Bancorp, Inc.+...................... 282 10,113
TrustCo Bank Corp........................... 1,102 8,254
Trustmark Corp.............................. 794 24,455
UMB Financial Corp.......................... 534 34,096
Union Bankshares Corp....................... 771 26,322
United Bankshares, Inc...................... 1,177 39,041
United Community Banks, Inc................. 923 22,955
United Security Bancshares.................. 154 1,651
Unity Bancorp, Inc.......................... 91 1,926
42
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCKS (continued)
Banks-Commercial (continued)
Univest Corp. of Pennsylvania........... 339 $ 8,461
Valley National Bancorp................. 3,800 37,924
Veritex Holdings, Inc.+................. 274 6,455
Washington Trust Bancorp, Inc........... 177 9,089
WesBanco, Inc........................... 615 24,662
West Bancorporation, Inc................ 187 4,112
Westamerica Bancorporation.............. 303 17,638
Western New England Bancorp, Inc........ 317 3,183
----------
3,675,383
----------
Banks-Fiduciary -- 0.0%
Boston Private Financial Holdings, Inc.. 981 13,243
Parke Bancorp, Inc...................... 81 1,599
Union Bankshares, Inc................... 46 2,183
----------
17,025
----------
Banks-Mortgage -- 0.0%
Walker & Dunlop, Inc.................... 326 13,679
----------
Banks-Regional -- 0.0%
Amalgamated Bank, Class A+.............. 115 2,231
----------
Banks-Super Regional -- 0.0%
Independent Bank Group, Inc............. 249 14,419
National Bank Holdings Corp., Class A... 338 11,411
----------
25,830
----------
Batteries/Battery Systems -- 0.1%
EnerSys................................. 496 39,467
----------
Beverages-Non-alcoholic -- 0.8%
Celsius Holdings, Inc.+................. 269 1,073
Coca-Cola Bottling Co. Consolidated..... 55 9,495
National Beverage Corp.+................ 138 12,758
Primo Water Corp.+...................... 30,338 505,735
----------
529,061
----------
Beverages-Wine/Spirits -- 0.0%
MGP Ingredients, Inc.................... 156 11,103
----------
Brewery -- 0.1%
Boston Beer Co., Inc., Class A+......... 99 30,422
Craft Brew Alliance, Inc.+.............. 150 2,751
----------
33,173
----------
Broadcast Services/Program -- 0.0%
Hemisphere Media Group, Inc.+........... 213 2,869
MSG Networks, Inc., Class A+............ 697 17,808
----------
20,677
----------
Building & Construction Products-Misc. -- 0.3%
American Woodmark Corp.+................ 166 10,033
Armstrong Flooring, Inc.+............... 250 3,888
Builders FirstSource, Inc.+............. 1,330 16,465
Caesarstone, Ltd........................ 270 4,263
Forterra, Inc.+......................... 222 1,001
Gibraltar Industries, Inc.+............. 376 13,401
Louisiana-Pacific Corp.................. 1,690 36,791
NCI Building Systems, Inc.+............. 502 6,150
Patrick Industries, Inc.+............... 280 12,183
Quanex Building Products Corp........... 411 6,091
Value
Security Description Shares (Note 3)
---------------------------------------------------------
Building & Construction Products-Misc. (continued)
Summit Materials, Inc., Class A+..... 1,320 $ 17,820
Trex Co., Inc.+...................... 696 42,665
----------
170,751
----------
Building & Construction-Misc. -- 0.9%
Comfort Systems USA, Inc............. 431 23,050
EMCOR Group, Inc..................... 684 48,550
IES Holdings, Inc.+.................. 98 1,738
MYR Group, Inc.+..................... 189 6,311
NV5 Global, Inc.+.................... 6,873 536,575
TopBuild Corp.+...................... 417 19,024
Willscot Corp.+...................... 420 6,233
----------
641,481
----------
Building Products-Air & Heating -- 0.0%
AAON, Inc............................ 486 16,762
----------
Building Products-Cement -- 0.0%
Continental Building Products, Inc.+. 438 12,181
US Concrete, Inc.+................... 189 6,169
----------
18,350
----------
Building Products-Doors & Windows -- 0.1%
Apogee Enterprises, Inc.............. 326 11,768
Griffon Corp......................... 407 4,933
JELD-WEN Holding, Inc.+.............. 814 13,236
Masonite International Corp.+........ 322 17,835
PGT Innovations, Inc.+............... 584 11,832
----------
59,604
----------
Building Products-Wood -- 0.1%
Boise Cascade Co..................... 458 14,102
Simpson Manufacturing Co., Inc....... 488 27,855
Universal Forest Products, Inc....... 706 19,958
----------
61,915
----------
Building-Heavy Construction -- 0.8%
Aegion Corp.+........................ 378 7,318
Dycom Industries, Inc.+.............. 356 24,165
Granite Construction, Inc............ 517 23,637
MasTec, Inc.+........................ 763 33,198
Orion Group Holdings, Inc.+.......... 331 1,562
Primoris Services Corp............... 492 10,416
Sterling Construction Co., Inc.+..... 37,692 428,181
Tutor Perini Corp.+.................. 441 6,836
----------
535,313
----------
Building-Maintenance & Services -- 0.1%
ABM Industries, Inc.................. 779 23,954
Brightview Holdings, Inc.+........... 291 4,284
----------
28,238
----------
Building-Mobile Home/Manufactured Housing -- 1.5%
Cavco Industries, Inc.+.............. 2,581 517,774
LCI Industries....................... 288 19,973
Skyline Champion Corp................ 20,110 479,221
Winnebago Industries, Inc............ 364 10,032
----------
1,027,000
----------
Building-Residential/Commercial -- 0.2%
Beazer Homes USA, Inc.+.............. 370 3,260
43
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------
COMMON STOCKS (continued)
Building-Residential/Commercial (continued)
Century Communities, Inc.+............ 308 $ 6,536
Green Brick Partners, Inc.+........... 289 2,717
Hovnanian Enterprises, Inc., Class A+. 1,428 2,085
Installed Building Products, Inc.+.... 259 7,889
KB Home............................... 1,011 20,190
LGI Homes, Inc.+...................... 218 9,328
M/I Homes, Inc.+...................... 326 7,879
MDC Holdings, Inc..................... 534 15,005
Meritage Homes Corp.+................. 456 16,986
New Home Co., Inc.+................... 152 1,084
Taylor Morrison Home Corp., Class A+.. 1,375 22,744
TRI Pointe Group, Inc.+............... 1,782 21,206
William Lyon Homes, Class A+.......... 376 5,098
--------
142,007
--------
Cable/Satellite TV -- 0.0%
WideOpenWest, Inc.+................... 349 3,399
--------
Capacitors -- 0.0%
KEMET Corp.+.......................... 664 14,462
--------
Casino Hotels -- 0.0%
Boyd Gaming Corp...................... 969 25,737
Century Casinos, Inc.+................ 318 1,984
--------
27,721
--------
Casino Services -- 0.1%
Eldorado Resorts, Inc.+............... 775 28,288
Scientific Games Corp.+............... 647 14,402
--------
42,690
--------
Cellular Telecom -- 0.1%
8x8, Inc.+............................ 1,083 18,617
ATN International, Inc................ 123 10,392
Liberty Latin America, Ltd., Class A+. 511 9,188
Liberty Latin America, Ltd., Class C+. 1,338 24,097
NII Holdings, Inc.+................... 1,045 6,500
--------
68,794
--------
Chemicals-Diversified -- 0.1%
Aceto Corp............................ 1 2
AdvanSix, Inc.+....................... 362 10,042
Codexis, Inc.+........................ 599 9,326
Innophos Holdings, Inc................ 229 6,710
Innospec, Inc......................... 285 19,072
Koppers Holdings, Inc.+............... 242 6,473
Quaker Chemical Corp.................. 154 27,705
--------
79,330
--------
Chemicals-Fibers -- 0.0%
Rayonier Advanced Materials, Inc...... 596 7,378
--------
Chemicals-Other -- 0.0%
American Vanguard Corp................ 343 5,522
--------
Chemicals-Plastics -- 0.1%
A. Schulman, Inc. CVR+(1)(2).......... 318 463
Landec Corp.+......................... 319 4,367
PolyOne Corp.......................... 940 30,371
--------
35,201
--------
Value
Security Description Shares (Note 3)
-------------------------------------------------------
Chemicals-Specialty -- 1.2%
AgroFresh Solutions, Inc.+........... 371 $ 2,118
Balchem Corp......................... 378 35,400
Ferro Corp.+......................... 993 16,821
GCP Applied Technologies, Inc.+...... 847 21,997
H.B. Fuller Co....................... 596 26,498
Hawkins, Inc......................... 114 3,837
Ingevity Corp.+...................... 499 45,449
KMG Chemicals, Inc................... 7,136 535,343
Kraton Corp.+........................ 365 10,052
Minerals Technologies, Inc........... 417 22,831
Oil-Dri Corp. of America............. 59 1,825
OMNOVA Solutions, Inc.+.............. 515 3,806
PQ Group Holdings, Inc.+............. 431 6,917
Rogers Corp.+........................ 216 26,581
Sensient Technologies Corp........... 501 32,495
Stepan Co............................ 239 19,739
Tronox, Ltd., Class A................ 1,102 12,618
Valhi, Inc........................... 297 618
--------
824,945
--------
Circuit Boards -- 0.0%
Park Electrochemical Corp............ 227 4,009
TTM Technologies, Inc.+.............. 1,104 12,917
--------
16,926
--------
Coal -- 0.1%
Advanced Emissions Solutions, Inc.... 218 2,158
Arch Coal, Inc., Class A............. 215 20,618
Cloud Peak Energy, Inc.+............. 872 1,491
CONSOL Energy, Inc.+................. 331 13,187
Hallador Energy Co................... 195 1,279
NACCO Industries, Inc., Class A...... 44 1,520
Peabody Energy Corp.................. 922 32,685
Ramaco Resources, Inc.+.............. 70 522
SunCoke Energy, Inc.+................ 765 8,568
Warrior Met Coal, Inc................ 508 14,224
--------
96,252
--------
Coatings/Paint -- 0.0%
Kronos Worldwide, Inc................ 267 3,746
--------
Coffee -- 0.0%
Farmer Bros. Co.+.................... 118 2,845
--------
Commercial Services -- 0.9%
Acacia Research Corp.+............... 570 1,870
Care.com, Inc.+...................... 27,638 486,429
Emerald Expositions Events, Inc...... 292 4,269
Forrester Research, Inc.............. 121 4,874
Healthcare Services Group, Inc....... 872 35,394
HMS Holdings Corp.+.................. 975 28,100
Medifast, Inc........................ 138 29,212
National Research Corp............... 130 4,947
Nutrisystem, Inc..................... 347 12,339
PFSweb, Inc.+........................ 179 1,269
ServiceSource International, Inc.+... 911 1,212
SP Plus Corp.+....................... 266 8,501
Team, Inc.+.......................... 348 6,925
Weight Watchers International, Inc.+. 454 30,009
--------
655,350
--------
44
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCKS (continued)
Commercial Services-Finance -- 1.0%
Cardtronics PLC, Class A+................ 467 $ 12,684
CBIZ, Inc.+.............................. 607 13,463
Everi Holdings, Inc.+.................... 768 5,530
EVERTEC, Inc............................. 717 18,699
Evo Payments, Inc., Class A+............. 191 4,534
Green Dot Corp., Class A+................ 569 43,096
I3 Verticals, Inc., Class A+............. 91 1,956
MoneyGram International, Inc.+........... 363 1,539
PRGX Global, Inc.+....................... 65,506 562,041
Travelport Worldwide, Ltd................ 1,477 22,096
--------
685,638
--------
Communications Software -- 0.0%
Avaya Holdings Corp.+.................... 1,233 20,246
Digi International, Inc.+................ 316 3,665
--------
23,911
--------
Computer Aided Design -- 0.0%
Altair Engineering, Inc., Class A+....... 356 13,578
--------
Computer Data Security -- 0.1%
Carbon Black, Inc.+...................... 98 1,614
ForeScout Technologies, Inc.+............ 354 9,749
OneSpan, Inc.+........................... 371 5,445
Qualys, Inc.+............................ 397 28,282
Rapid7, Inc.+............................ 430 15,583
Tenable Holdings, Inc.+.................. 148 4,215
Varonis Systems, Inc.+................... 332 20,275
--------
85,163
--------
Computer Graphics -- 0.0%
Monotype Imaging Holdings, Inc........... 488 8,555
--------
Computer Services -- 1.3%
CACI International, Inc., Class A+....... 289 51,575
Carbonite, Inc.+......................... 18,328 627,001
ConvergeOne Holdings, Inc................ 312 2,908
Engility Holdings, Inc.+................. 214 6,640
ExlService Holdings, Inc.+............... 393 25,191
Information Services Group, Inc.+........ 402 1,652
Insight Enterprises, Inc.+............... 414 21,400
KeyW Holding Corp.+...................... 573 4,487
MAXIMUS, Inc............................. 752 48,857
Perspecta, Inc........................... 1,691 41,413
Presidio, Inc............................ 373 4,998
Rimini Street, Inc.+..................... 115 822
Science Applications International Corp.. 499 34,685
Sykes Enterprises, Inc.+................. 465 14,262
TTEC Holdings, Inc....................... 167 4,162
Unisys Corp.+............................ 594 10,935
Virtusa Corp.+........................... 335 16,613
--------
917,601
--------
Computer Software -- 0.9%
Avid Technology, Inc.+................... 323 1,712
Box, Inc., Class A+...................... 1,453 26,154
Cision, Ltd.+............................ 634 9,377
Cloudera, Inc.+.......................... 1,217 16,746
Cornerstone OnDemand, Inc.+.............. 640 31,520
Envestnet, Inc.+......................... 520 27,050
Value
Security Description Shares (Note 3)
-----------------------------------------------------
Computer Software (continued)
j2 Global, Inc..................... 552 $ 40,208
Remark Holdings, Inc.+............. 303 688
SecureWorks Corp., Class A+........ 101 1,665
SendGrid, Inc.+.................... 340 12,349
Simulations Plus, Inc.............. 21,756 439,689
TiVo Corp.......................... 1,422 15,642
Veritone, Inc.+.................... 95 655
Yext, Inc.+........................ 956 18,374
--------
641,829
--------
Computers-Integrated Systems -- 0.1%
Agilysys, Inc.+.................... 182 2,961
Cray, Inc.+........................ 476 10,800
Diebold Nixdorf, Inc............... 898 3,502
Maxwell Technologies, Inc.+........ 482 1,417
Mercury Systems, Inc.+............. 553 25,914
MTS Systems Corp................... 210 9,943
NetScout Systems, Inc.+............ 915 23,113
PAR Technology Corp.+.............. 134 2,372
USA Technologies, Inc.+............ 671 3,892
--------
83,914
--------
Computers-Other -- 0.1%
3D Systems Corp.+.................. 1,285 15,523
Lumentum Holdings, Inc.+........... 738 40,331
PlayAGS, Inc.+..................... 259 6,281
Stratasys, Ltd.+................... 596 11,360
Wesco Aircraft Holdings, Inc.+..... 638 6,495
--------
79,990
--------
Computers-Periphery Equipment -- 0.7%
Electronics For Imaging, Inc.+..... 524 15,956
Mitek Systems, Inc.+............... 385 3,530
TransAct Technologies, Inc......... 32,043 471,032
--------
490,518
--------
Computers-Voice Recognition -- 0.0%
Vocera Communications, Inc.+....... 351 12,183
--------
Consulting Services -- 0.8%
CRA International, Inc............. 10,808 455,557
Franklin Covey Co.+................ 115 2,569
FTI Consulting, Inc.+.............. 447 30,892
Hackett Group, Inc................. 284 5,814
Huron Consulting Group, Inc.+...... 260 14,168
ICF International, Inc............. 213 15,685
Kelly Services, Inc., Class A...... 368 8,644
Navigant Consulting, Inc........... 528 11,405
Vectrus, Inc.+..................... 131 3,511
--------
548,245
--------
Consumer Products-Misc. -- 0.1%
Central Garden & Pet Co.+.......... 122 3,963
Central Garden & Pet Co., Class A+. 477 14,143
Helen of Troy, Ltd.+............... 312 38,725
Rosetta Stone, Inc.+............... 232 4,823
WD-40 Co........................... 161 26,900
--------
88,554
--------
45
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCKS (continued)
Containers-Metal/Glass -- 0.0%
Greif, Inc., Class A...................... 301 $ 14,237
Greif, Inc., Class B...................... 66 3,390
--------
17,627
--------
Containers-Paper/Plastic -- 0.1%
KapStone Paper and Packaging Corp......... 1,034 36,190
Multi-Color Corp.......................... 163 8,665
UFP Technologies, Inc.+................... 78 2,693
--------
47,548
--------
Cosmetics & Toiletries -- 0.1%
e.l.f. Beauty, Inc.+...................... 262 2,780
Edgewell Personal Care Co.+............... 635 30,467
Inter Parfums, Inc........................ 205 12,093
Revlon, Inc., Class A+.................... 96 2,016
--------
47,356
--------
Cruise Lines -- 0.0%
Lindblad Expeditions Holdings, Inc.+...... 251 3,391
--------
Data Processing/Management -- 0.1%
Amber Road, Inc.+......................... 276 2,457
Bottomline Technologies, Inc.+............ 474 31,587
CommVault Systems, Inc.+.................. 463 26,956
CSG Systems International, Inc............ 391 13,724
--------
74,724
--------
Dental Supplies & Equipment -- 0.0%
Patterson Cos., Inc....................... 965 21,790
--------
Diagnostic Equipment -- 0.1%
Accelerate Diagnostics, Inc.+............. 307 4,587
BioTelemetry, Inc.+....................... 382 22,194
GenMark Diagnostics, Inc.+................ 610 3,251
Genomic Health, Inc.+..................... 247 17,712
OPKO Health, Inc.+........................ 3,786 12,797
Oxford Immunotec Global PLC+.............. 299 4,608
Quanterix Corp.+.......................... 99 1,733
Repligen Corp.+........................... 460 24,941
--------
91,823
--------
Diagnostic Kits -- 0.1%
Celcuity, Inc.+........................... 68 1,907
Meridian Bioscience, Inc.................. 489 7,927
OraSure Technologies, Inc.+............... 708 9,841
Quidel Corp.+............................. 402 25,873
--------
45,548
--------
Dialysis Centers -- 0.6%
American Renal Associates Holdings, Inc.+. 22,355 431,228
--------
Direct Marketing -- 0.0%
Quotient Technology, Inc.+................ 939 12,085
--------
Disposable Medical Products -- 0.5%
BioLife Solutions, Inc.+.................. 23,047 293,158
CONMED Corp............................... 297 20,027
Merit Medical Systems, Inc.+.............. 627 35,814
Utah Medical Products, Inc................ 40 3,487
--------
352,486
--------
Value
Security Description Shares (Note 3)
------------------------------------------------------
Distribution/Wholesale -- 0.3%
Anixter International, Inc.+........ 347 $ 22,794
BlueLinx Holdings, Inc.+............ 105 2,473
Core-Mark Holding Co., Inc.......... 537 20,626
Dorman Products, Inc.+.............. 316 24,967
EnviroStar, Inc..................... 44 1,828
Essendant, Inc...................... 439 5,593
Fossil Group, Inc.+................. 537 11,658
G-III Apparel Group, Ltd.+.......... 512 20,408
H&E Equipment Services, Inc......... 374 9,010
Nexeo Solutions, Inc.+.............. 386 4,034
ScanSource, Inc.+................... 296 11,508
SiteOne Landscape Supply, Inc.+..... 470 31,979
Systemax, Inc....................... 144 4,653
Titan Machinery, Inc.+.............. 222 3,164
Triton International, Ltd........... 616 19,817
Veritiv Corp.+...................... 135 4,501
--------
199,013
--------
Diversified Manufacturing Operations -- 1.1%
Actuant Corp., Class A.............. 718 17,124
Chase Corp.......................... 85 9,167
EnPro Industries, Inc............... 244 15,177
Fabrinet+........................... 14,953 647,764
Federal Signal Corp................. 699 15,371
GP Strategies Corp.+................ 146 2,133
Harsco Corp.+....................... 947 26,014
LSB Industries, Inc.+............... 254 1,930
Lydall, Inc.+....................... 199 5,944
NL Industries, Inc.+................ 98 519
Standex International Corp.......... 150 12,168
Synalloy Corp....................... 97 1,794
Tredegar Corp....................... 305 5,673
--------
760,778
--------
Diversified Minerals -- 0.0%
United States Lime & Minerals, Inc.. 24 1,800
--------
Diversified Operations/Commercial Services -- 0.0%
Viad Corp........................... 240 11,494
--------
Drug Delivery Systems -- 0.1%
Antares Pharma, Inc.+............... 1,699 5,080
Assertio Therapeutics, Inc.+........ 693 3,365
Heron Therapeutics, Inc.+........... 811 22,513
Revance Therapeutics, Inc.+......... 386 8,403
Senseonics Holdings, Inc.+.......... 1,003 3,721
--------
43,082
--------
E-Commerce/Products -- 0.1%
1-800-flowers.com, Inc., Class A+... 316 3,302
Etsy, Inc.+......................... 1,407 59,826
Lands' End, Inc.+................... 124 2,023
Overstock.com, Inc.+................ 244 4,909
--------
70,060
--------
E-Commerce/Services -- 0.3%
Cargurus, Inc.+..................... 589 26,163
Cars.com, Inc.+..................... 828 21,619
ChannelAdvisor Corp.+............... 305 3,532
Groupon, Inc.+...................... 5,191 16,975
Leaf Group, Ltd.+................... 194 1,698
46
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCKS (continued)
E-Commerce/Services (continued)
Liberty Expedia Holdings, Inc., Class A+. 641 $ 27,832
Shutterfly, Inc.+........................ 389 19,450
Shutterstock, Inc........................ 221 9,034
Stamps.com, Inc.+........................ 207 41,849
Travelzoo, Inc.+......................... 56 430
TrueCar, Inc.+........................... 1,089 12,393
--------
180,975
--------
E-Marketing/Info -- 0.8%
Cardlytics, Inc.+........................ 70 1,481
Liquidity Services, Inc.+................ 307 1,824
New Media Investment Group, Inc.......... 702 9,863
QuinStreet, Inc.+........................ 33,041 525,352
--------
538,520
--------
E-Services/Consulting -- 0.0%
Perficient, Inc.+........................ 402 10,058
--------
Educational Software -- 0.0%
Instructure, Inc.+....................... 374 13,965
--------
Electric Products-Misc. -- 0.0%
Graham Corp.............................. 113 2,781
nLight, Inc.+............................ 82 1,463
Novanta, Inc.+........................... 385 22,411
--------
26,655
--------
Electric-Distribution -- 0.0%
Spark Energy, Inc., Class A.............. 136 1,015
Unitil Corp.............................. 171 8,124
--------
9,139
--------
Electric-Generation -- 0.0%
Atlantic Power Corp.+.................... 1,293 2,844
Ormat Technologies, Inc.................. 469 23,999
--------
26,843
--------
Electric-Integrated -- 0.5%
ALLETE, Inc.............................. 607 44,918
Ameresco, Inc., Class A+................. 223 3,651
Avista Corp.............................. 772 39,696
Black Hills Corp......................... 631 37,545
El Paso Electric Co...................... 477 27,213
IDACORP, Inc............................. 594 55,396
MGE Energy, Inc.......................... 411 25,679
NorthWestern Corp........................ 595 34,962
Otter Tail Corp.......................... 464 20,913
PNM Resources, Inc....................... 937 35,990
Portland General Electric Co............. 1,053 47,469
--------
373,432
--------
Electronic Components-Misc. -- 1.8%
Applied Optoelectronics, Inc.+........... 221 4,338
Atkore International Group, Inc.+........ 459 8,840
AVX Corp................................. 549 9,157
Bel Fuse, Inc., Class B.................. 114 2,508
Benchmark Electronics, Inc............... 551 12,028
Comtech Telecommunications Corp.......... 271 7,566
IntriCon Corp.+.......................... 7,691 322,099
Kimball Electronics, Inc.+............... 305 5,612
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Electronic Components-Misc. (continued)
Knowles Corp.+............................. 1,029 $ 16,649
NVE Corp................................... 4,790 405,713
OSI Systems, Inc.+......................... 198 13,694
Plexus Corp.+.............................. 376 21,959
Sanmina Corp.+............................. 798 20,190
Sparton Corp.+............................. 113 1,399
Vishay Intertechnology, Inc................ 1,560 28,548
Vishay Precision Group, Inc.+.............. 122 3,959
ZAGG, Inc.+................................ 32,976 399,340
----------
1,283,599
----------
Electronic Components-Semiconductors -- 1.0%
Adesto Technologies Corp.+................. 291 1,161
Alpha & Omega Semiconductor, Ltd.+......... 234 2,169
Amkor Technology, Inc.+.................... 1,205 8,616
AXT, Inc.+................................. 448 2,952
CEVA, Inc.+................................ 260 6,406
Cree, Inc.+................................ 1,185 46,002
CTS Corp................................... 385 10,276
Diodes, Inc.+.............................. 473 14,280
Impinj, Inc.+.............................. 192 3,763
Inphi Corp.+............................... 511 16,352
Kopin Corp.+............................... 728 1,624
Lattice Semiconductor Corp.+............... 1,378 8,282
MACOM Technology Solutions Holdings, Inc.+. 533 7,499
Photronics, Inc.+.......................... 799 7,782
Pixelworks, Inc.+.......................... 101,690 425,064
Rambus, Inc.+.............................. 1,255 10,931
Rudolph Technologies, Inc.+................ 371 7,713
Semtech Corp.+............................. 766 34,424
Silicon Laboratories, Inc.+................ 505 41,173
SMART Global Holdings, Inc.+............... 117 3,277
Synaptics, Inc.+........................... 416 15,617
Xperi Corp................................. 577 7,501
----------
682,864
----------
Electronic Measurement Instruments -- 0.8%
Badger Meter, Inc.......................... 336 16,501
CyberOptics Corp.+......................... 23,192 490,279
FARO Technologies, Inc.+................... 198 10,007
Fitbit, Inc., Class A+..................... 2,481 11,735
Itron, Inc.+............................... 399 20,804
Mesa Laboratories, Inc..................... 40 7,308
Stoneridge, Inc.+.......................... 323 8,207
----------
564,841
----------
Electronic Parts Distribution -- 0.1%
Digimarc Corp.+............................ 132 3,317
SYNNEX Corp................................ 489 37,951
Tech Data Corp.+........................... 450 31,797
----------
73,065
----------
Electronic Security Devices -- 0.0%
Alarm.com Holdings, Inc.+.................. 363 16,146
Napco Security Technologies, Inc.+......... 140 1,970
ShotSpotter, Inc.+......................... 86 3,327
----------
21,443
----------
Energy-Alternate Sources -- 0.9%
Amyris, Inc.+.............................. 366 2,727
47
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
COMMON STOCKS (continued)
Energy-Alternate Sources (continued)
Clean Energy Fuels Corp.+..................... 1,615 $ 3,569
Enphase Energy, Inc.+......................... 1,018 4,622
FuelCell Energy, Inc.+........................ 1,010 854
FutureFuel Corp............................... 304 4,986
Green Plains, Inc............................. 464 7,906
Pattern Energy Group, Inc., Class A........... 952 17,060
Plug Power, Inc.+............................. 2,516 4,655
Renewable Energy Group, Inc.+................. 17,709 550,396
REX American Resources Corp.+................. 67 4,969
Sunrun, Inc.+................................. 1,138 13,952
TerraForm Power, Inc., Class A................ 861 9,703
TPI Composites, Inc.+......................... 171 4,319
Vivint Solar, Inc.+........................... 371 1,925
--------
631,643
--------
Engineering/R&D Services -- 0.1%
Argan, Inc.................................... 172 7,571
Exponent, Inc................................. 607 30,629
Infrastructure and Energy Alternatives, Inc.+. 202 2,020
Iteris, Inc.+................................. 299 1,292
KBR, Inc...................................... 1,660 32,835
Mistras Group, Inc.+.......................... 206 4,099
VSE Corp...................................... 102 3,199
--------
81,645
--------
Engines-Internal Combustion -- 0.0%
Briggs & Stratton Corp........................ 489 7,105
--------
Enterprise Software/Service -- 1.3%
Alteryx, Inc., Class A+....................... 344 18,228
American Software, Inc., Class A.............. 39,462 454,208
Apptio, Inc., Class A+........................ 405 10,489
Asure Software, Inc.+......................... 148 1,649
Benefitfocus, Inc.+........................... 264 9,380
Blackbaud, Inc................................ 568 40,737
Blackline, Inc.+.............................. 423 19,619
Coupa Software, Inc.+......................... 626 40,584
Daily Journal Corp.+.......................... 13 3,081
Domo, Inc., Class B+.......................... 95 1,542
Donnelley Financial Solutions, Inc.+.......... 396 6,158
Everbridge, Inc.+............................. 316 16,062
Evolent Health, Inc., Class A+................ 802 17,804
Exela Technologies, Inc.+..................... 558 3,404
Hortonworks, Inc.+............................ 831 14,842
LivePerson, Inc.+............................. 683 15,436
LiveRamp Holdings, Inc.+...................... 905 41,340
Majesco+...................................... 66 487
ManTech International Corp., Class A.......... 311 17,814
MicroStrategy, Inc., Class A+................. 112 14,109
MobileIron, Inc.+............................. 853 4,124
Model N, Inc.+................................ 304 4,669
Omnicell, Inc.+............................... 456 32,239
Progress Software Corp........................ 533 17,131
PROS Holdings, Inc.+.......................... 366 12,049
QAD, Inc., Class A............................ 121 5,134
SailPoint Technologies Holding, Inc.+......... 617 16,067
SPS Commerce, Inc.+........................... 199 18,525
Verint Systems, Inc.+......................... 750 34,252
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------------
Enterprise Software/Service (continued)
Workiva, Inc.+........................................ 335 $ 11,420
--------
902,583
--------
Entertainment Software -- 0.0%
Glu Mobile, Inc.+..................................... 1,313 9,257
--------
Environmental Consulting & Engineering -- 0.1%
Tetra Tech, Inc....................................... 653 43,124
--------
Filtration/Separation Products -- 0.0%
ESCO Technologies, Inc................................ 300 18,366
--------
Finance-Commercial -- 0.0%
Hannon Armstrong Sustainable Infrastructure Capital,
Inc.................................................. 608 12,616
NewStar Financial, Inc. CVR+(1)(2).................... 360 194
On Deck Capital, Inc.+................................ 601 4,147
--------
16,957
--------
Finance-Consumer Loans -- 0.5%
Curo Group Holdings Corp.+............................ 138 1,942
Elevate Credit, Inc.+................................. 243 1,035
Encore Capital Group, Inc.+........................... 306 7,775
Enova International, Inc.+............................ 12,897 305,014
LendingClub Corp.+.................................... 3,721 12,019
Nelnet, Inc., Class A................................. 219 12,328
Ocwen Financial Corp.+................................ 1,383 4,840
PRA Group, Inc.+...................................... 525 16,191
Regional Management Corp.+............................ 110 3,175
World Acceptance Corp.+............................... 72 7,307
--------
371,626
--------
Finance-Investment Banker/Broker -- 0.4%
Arlington Asset Investment Corp., Class A............. 332 2,792
Cowen, Inc.+.......................................... 330 4,884
Diamond Hill Investment Group, Inc.................... 38 6,543
GAIN Capital Holdings, Inc............................ 322 2,460
Greenhill & Co., Inc.................................. 229 5,049
Houlihan Lokey, Inc................................... 393 16,184
INTL. FCStone, Inc.+.................................. 181 8,196
Investment Technology Group, Inc...................... 384 10,552
Ladenburg Thalmann Financial Services, Inc............ 65,232 180,692
Moelis & Co., Class A................................. 525 21,189
Oppenheimer Holdings, Inc., Class A................... 114 3,507
Piper Jaffray Cos..................................... 173 12,003
PJT Partners, Inc., Class A........................... 235 10,655
Siebert Financial Corp.+.............................. 87 1,196
--------
285,902
--------
Finance-Leasing Companies -- 0.0%
Aircastle, Ltd........................................ 658 12,785
Marlin Business Services Corp......................... 102 2,711
--------
15,496
--------
Finance-Mortgage Loan/Banker -- 0.1%
Ellie Mae, Inc.+...................................... 402 26,645
Federal Agricultural Mtg. Corp., Class C.............. 106 7,403
Granite Point Mtg. Trust, Inc......................... 505 9,398
Impac Mtg. Holdings, Inc.+............................ 115 597
LendingTree, Inc.+.................................... 94 18,959
Mr. Cooper Group, Inc.+............................... 305 4,419
PennyMac Financial Services, Inc...................... 233 4,658
48
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------
COMMON STOCKS (continued)
Finance-Mortgage Loan/Banker (continued)
TPG RE Finance Trust, Inc........... 414 $ 8,205
----------
80,284
----------
Finance-Other Services -- 0.0%
HomeStreet, Inc.+................... 293 7,612
WageWorks, Inc.+.................... 467 18,591
----------
26,203
----------
Financial Guarantee Insurance -- 0.8%
MBIA, Inc.+......................... 1,042 10,316
MGIC Investment Corp.+.............. 4,259 52,002
NMI Holdings, Inc., Class A+........ 19,470 411,596
Radian Group, Inc................... 2,544 48,819
----------
522,733
----------
Firearms & Ammunition -- 0.1%
American Outdoor Brands Corp.+...... 632 8,646
Axon Enterprise, Inc.+.............. 677 41,784
Sturm Ruger & Co., Inc.............. 198 11,759
----------
62,189
----------
Food-Canned -- 0.0%
Seneca Foods Corp., Class A+........ 85 2,689
----------
Food-Confectionery -- 0.1%
Hostess Brands, Inc.+............... 1,162 12,085
Simply Good Foods Co.+.............. 710 13,461
Tootsie Roll Industries, Inc........ 193 6,093
----------
31,639
----------
Food-Dairy Products -- 0.0%
Dean Foods Co....................... 1,074 8,581
----------
Food-Meat Products -- 0.0%
Nathan's Famous, Inc................ 34 2,546
----------
Food-Misc./Diversified -- 0.2%
B&G Foods, Inc...................... 774 20,155
Cal-Maine Foods, Inc................ 367 17,862
Darling Ingredients, Inc.+.......... 1,930 39,874
J&J Snack Foods Corp................ 177 27,640
John B. Sanfilippo & Son, Inc....... 101 6,369
Lancaster Colony Corp............... 222 38,046
----------
149,946
----------
Food-Retail -- 0.0%
Ingles Markets, Inc., Class A....... 166 5,468
Smart & Final Stores, Inc.+......... 271 1,368
Village Super Market, Inc., Class A. 97 2,390
Weis Markets, Inc................... 112 5,169
----------
14,395
----------
Food-Wholesale/Distribution -- 1.4%
Calavo Growers, Inc................. 5,497 533,209
Chefs' Warehouse, Inc.+............. 12,170 409,277
Fresh Del Monte Produce, Inc........ 358 11,825
Performance Food Group Co.+......... 1,199 35,155
SpartanNash Co...................... 419 7,479
United Natural Foods, Inc.+......... 593 12,886
----------
1,009,831
----------
Value
Security Description Shares (Note 3)
--------------------------------------------------------
Footwear & Related Apparel -- 0.8%
Crocs, Inc.+.......................... 22,114 $454,221
Deckers Outdoor Corp.+................ 355 45,145
Rocky Brands, Inc..................... 80 2,298
Steven Madden, Ltd.................... 1,026 32,083
Weyco Group, Inc...................... 72 2,278
Wolverine World Wide, Inc............. 1,087 38,230
--------
574,255
--------
Funeral Services & Related Items -- 0.0%
Carriage Services, Inc................ 207 3,945
Matthews International Corp., Class A. 367 15,275
--------
19,220
--------
Gambling (Non-Hotel) -- 0.0%
Golden Entertainment, Inc.+........... 214 3,888
Monarch Casino & Resort, Inc.+........ 133 5,156
Red Rock Resorts, Inc., Class A....... 818 18,929
--------
27,973
--------
Gas-Distribution -- 0.4%
Chesapeake Utilities Corp............. 186 14,778
New Jersey Resources Corp............. 1,027 46,318
Northwest Natural Holding Co.......... 337 21,834
ONE Gas, Inc.......................... 614 48,451
RGC Resources, Inc.................... 87 2,469
South Jersey Industries, Inc.......... 1,010 29,835
Southwest Gas Holdings, Inc........... 578 44,662
Spire, Inc............................ 580 42,096
--------
250,443
--------
Gold Mining -- 0.0%
Gold Resource Corp.................... 620 2,685
--------
Golf -- 0.1%
Acushnet Holdings Corp................ 407 9,943
Callaway Golf Co...................... 1,106 23,668
Drive Shack, Inc.+.................... 712 3,802
--------
37,413
--------
Hazardous Waste Disposal -- 0.7%
Heritage-Crystal Clean, Inc.+......... 20,814 478,514
US Ecology, Inc....................... 258 18,042
--------
496,556
--------
Health Care Cost Containment -- 0.1%
CorVel Corp.+......................... 107 6,202
HealthEquity, Inc.+................... 637 58,476
--------
64,678
--------
Healthcare Safety Devices -- 0.0%
Tandem Diabetes Care, Inc.+........... 600 22,566
--------
Home Furnishings -- 0.0%
Ethan Allen Interiors, Inc............ 282 5,398
Flexsteel Industries, Inc............. 86 2,186
Hooker Furniture Corp................. 136 3,981
Purple Innovation, Inc.+.............. 51 354
Sleep Number Corp.+................... 405 14,730
--------
26,649
--------
49
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
COMMON STOCKS (continued)
Hotels/Motels -- 0.1%
BBX Capital Corp......................... 772 $ 4,516
Belmond, Ltd., Class A+.................. 1,055 18,062
Bluegreen Vacations Corp................. 88 1,153
Marcus Corp.............................. 227 8,857
Red Lion Hotels Corp.+................... 187 2,044
----------
34,632
----------
Housewares -- 0.0%
Lifetime Brands, Inc..................... 139 1,439
Tupperware Brands Corp................... 591 20,744
----------
22,183
----------
Human Resources -- 1.6%
AMN Healthcare Services, Inc.+........... 556 28,145
ASGN, Inc.+.............................. 597 40,047
Barrett Business Services, Inc........... 5,961 375,066
BG Staffing, Inc......................... 99 2,558
Cross Country Healthcare, Inc.+.......... 418 3,691
Heidrick & Struggles International, Inc.. 220 7,592
Insperity, Inc........................... 451 49,542
Kforce, Inc.............................. 271 8,352
Korn/Ferry International................. 676 30,515
Paylocity Holding Corp.+................. 341 22,434
Resources Connection, Inc................ 351 5,728
TriNet Group, Inc.+...................... 513 24,106
TrueBlue, Inc.+.......................... 474 11,059
Willdan Group, Inc.+..................... 16,369 494,344
----------
1,103,179
----------
Identification Systems -- 0.0%
Brady Corp., Class A..................... 553 22,280
----------
Import/Export -- 0.0%
Castle Brands, Inc.+..................... 1,085 1,029
----------
Independent Power Producers -- 0.0%
Clearway Energy, Inc., Class A........... 410 7,962
Clearway Energy, Inc., Class C........... 819 16,061
----------
24,023
----------
Industrial Audio & Video Products -- 0.0%
GoPro, Inc., Class A+.................... 1,329 8,732
Turtle Beach Corp.+...................... 92 1,633
----------
10,365
----------
Industrial Automated/Robotic -- 0.2%
Hurco Cos., Inc.......................... 73 2,974
Ichor Holdings, Ltd.+.................... 8,016 142,284
----------
145,258
----------
Instruments-Controls -- 0.1%
Allied Motion Technologies, Inc.......... 82 3,580
Control4 Corp.+.......................... 306 8,544
Watts Water Technologies, Inc., Class A.. 327 22,906
Woodward, Inc............................ 631 46,467
----------
81,497
----------
Instruments-Scientific -- 0.0%
Fluidigm Corp.+.......................... 309 2,225
----------
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Insurance Brokers -- 0.0%
Crawford & Co., Class B...................... 138 $ 1,271
eHealth, Inc.+............................... 221 7,594
Goosehead Insurance, Inc., Class A+.......... 115 3,942
----------
12,807
----------
Insurance-Life/Health -- 0.8%
American Equity Investment Life Holding Co... 1,054 32,906
CNO Financial Group, Inc..................... 1,935 36,571
FBL Financial Group, Inc., Class A........... 116 8,002
FGL Holdings+................................ 1,669 13,185
Health Insurance Innovations, Inc., Class A+. 8,419 411,689
Independence Holding Co...................... 55 1,991
National Western Life Group, Inc., Class A... 27 7,271
Primerica, Inc............................... 508 55,748
Trupanion, Inc.+............................. 297 7,502
----------
574,865
----------
Insurance-Multi-line -- 0.2%
Citizens, Inc.+.............................. 582 4,575
Genworth Financial, Inc., Class A+........... 5,935 25,402
Horace Mann Educators Corp................... 484 19,011
Kemper Corp.................................. 621 46,693
United Fire Group, Inc....................... 248 13,350
----------
109,031
----------
Insurance-Property/Casualty -- 1.9%
Ambac Financial Group, Inc.+................. 533 10,969
AMERISAFE, Inc............................... 225 14,645
AmTrust Financial Services, Inc.............. 1,303 18,685
Donegal Group, Inc., Class A................. 110 1,477
EMC Insurance Group, Inc..................... 109 2,613
Employers Holdings, Inc...................... 379 17,419
Enstar Group, Ltd.+.......................... 142 25,787
FedNat Holding Co............................ 135 2,907
Hallmark Financial Services, Inc.+........... 153 1,704
HCI Group, Inc............................... 86 3,756
Heritage Insurance Holdings, Inc............. 236 3,295
Investors Title Co........................... 16 2,912
James River Group Holdings, Ltd.............. 305 11,742
Kingstone Cos., Inc.......................... 32,403 550,851
Kinsale Capital Group, Inc................... 7,827 467,350
National General Holdings Corp............... 726 20,226
Navigators Group, Inc........................ 244 16,873
NI Holdings, Inc.+........................... 114 1,783
ProAssurance Corp............................ 625 27,450
Protective Insurance Corp., Class B.......... 113 2,605
RLI Corp..................................... 462 34,156
Safety Insurance Group, Inc.................. 173 14,407
Selective Insurance Group, Inc............... 683 44,292
State Auto Financial Corp.................... 197 6,263
Stewart Information Services Corp............ 275 11,352
Third Point Reinsurance, Ltd.+............... 925 10,230
Tiptree, Inc................................. 318 1,873
United Insurance Holdings Corp............... 242 4,772
Universal Insurance Holdings, Inc............ 372 15,617
----------
1,348,011
----------
Insurance-Reinsurance -- 0.1%
Argo Group International Holdings, Ltd.+..... 382 23,535
Essent Group, Ltd.+.......................... 1,131 44,584
50
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------------------
COMMON STOCKS (continued)
Insurance-Reinsurance (continued)
Global Indemnity, Ltd............................. 99 $ 3,544
Greenlight Capital Re, Ltd., Class A+............. 351 4,068
Maiden Holdings, Ltd.............................. 802 2,815
--------
78,546
--------
Internet Application Software -- 0.0%
eGain Corp.+...................................... 208 1,554
Tucows, Inc., Class A+............................ 112 5,620
VirnetX Holding Corp.+............................ 647 2,135
--------
9,309
--------
Internet Connectivity Services -- 0.7%
Boingo Wireless, Inc.+............................ 13,878 434,798
Cogent Communications Holdings, Inc............... 493 25,626
Internap Corp.+................................... 236 2,022
--------
462,446
--------
Internet Content-Entertainment -- 0.1%
Limelight Networks, Inc.+......................... 1,286 5,183
Pandora Media, Inc.+.............................. 3,015 25,627
--------
30,810
--------
Internet Content-Information/News -- 0.9%
Chegg, Inc.+...................................... 1,276 34,809
HealthStream, Inc................................. 20,896 549,774
LiveXLive Media, Inc.+............................ 57 169
TechTarget, Inc.+................................. 239 4,857
XO Group, Inc.+................................... 286 9,898
Yelp, Inc.+....................................... 955 40,893
--------
640,400
--------
Internet Security -- 1.2%
Imperva, Inc.+.................................... 410 22,693
Zix Corp.+........................................ 116,497 785,190
Zscaler, Inc.+.................................... 164 5,952
--------
813,835
--------
Investment Companies -- 0.0%
B. Riley Financial, Inc........................... 241 4,639
Columbia Financial, Inc.+......................... 585 8,822
PDL Community Bancorp+............................ 103 1,412
--------
14,873
--------
Investment Management/Advisor Services -- 1.6%
Altisource Portfolio Solutions SA+................ 117 2,952
Artisan Partners Asset Management, Inc., Class A.. 566 15,514
Ashford, Inc.+.................................... 7 441
Associated Capital Group, Inc., Class A........... 30 1,163
Blucora, Inc.+.................................... 9,888 285,961
BrightSphere Investment Group PLC................. 947 10,796
Cohen & Steers, Inc............................... 263 10,097
Federated Investors, Inc., Class B................ 1,140 28,124
Focus Financial Partners, Inc. Class A+........... 222 8,480
FRP Holdings, Inc.+............................... 83 4,023
GAMCO Investors, Inc., Class A.................... 50 1,026
Hamilton Lane, Inc., Class A...................... 176 6,755
Pzena Investment Management, Inc., Class A........ 26,300 264,578
Silvercrest Asset Management Group, Inc., Class A. 27,299 392,560
Value
Security Description Shares (Note 3)
------------------------------------------------------------
Investment Management/Advisor Services (continued)
Stifel Financial Corp................... 817 $ 37,353
Virtus Investment Partners, Inc......... 82 8,146
Waddell & Reed Financial, Inc., Class A. 916 17,468
Westwood Holdings Group, Inc............ 98 4,150
WisdomTree Investments, Inc............. 1,377 10,699
----------
1,110,286
----------
Lasers-System/Components -- 0.1%
Electro Scientific Industries, Inc.+.... 380 11,020
II-VI, Inc.+............................ 728 27,103
----------
38,123
----------
Leisure Products -- 0.0%
Escalade, Inc........................... 125 1,462
Johnson Outdoors, Inc., Class A......... 57 4,293
Marine Products Corp.................... 88 1,793
----------
7,548
----------
Linen Supply & Related Items -- 0.0%
UniFirst Corp........................... 180 26,874
----------
Machine Tools & Related Products -- 0.1%
Kennametal, Inc......................... 959 33,997
Milacron Holdings Corp.+................ 816 11,424
----------
45,421
----------
Machinery-Construction & Mining -- 0.0%
Astec Industries, Inc................... 270 10,155
Hyster-Yale Materials Handling, Inc..... 122 7,375
----------
17,530
----------
Machinery-Electrical -- 0.0%
Babcock & Wilcox Enterprises, Inc.+..... 377 369
Franklin Electric Co., Inc.............. 546 23,161
----------
23,530
----------
Machinery-Farming -- 0.0%
Alamo Group, Inc........................ 113 9,686
Lindsay Corp............................ 126 12,048
----------
21,734
----------
Machinery-General Industrial -- 0.8%
Albany International Corp., Class A..... 338 23,653
Applied Industrial Technologies, Inc.... 449 29,513
Chart Industries, Inc.+................. 363 24,702
DXP Enterprises, Inc.+.................. 187 5,943
Gencor Industries, Inc.+................ 104 1,184
Kadant, Inc............................. 4,498 443,953
Manitex International, Inc.+............ 171 1,460
Manitowoc Co, Inc.+..................... 416 7,604
Tennant Co.............................. 210 12,835
Twin Disc, Inc.+........................ 100 1,913
----------
552,760
----------
Machinery-Material Handling -- 0.0%
Columbus McKinnon Corp.................. 263 9,660
----------
Machinery-Print Trade -- 0.0%
Eastman Kodak Co.+...................... 199 486
----------
Machinery-Pumps -- 0.1%
Cactus, Inc., Class A+.................. 447 14,957
CSW Industrials, Inc.+.................. 183 8,423
51
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------
COMMON STOCKS (continued)
Machinery-Pumps (continued)
Gorman-Rupp Co......................... 208 $ 7,176
Mueller Water Products, Inc., Class A.. 1,821 18,683
NN, Inc................................ 326 3,782
SPX FLOW, Inc.+........................ 496 16,978
--------
69,999
--------
Marine Services -- 0.0%
Great Lakes Dredge & Dock Corp.+....... 672 3,905
SEACOR Marine Holdings, Inc.+.......... 194 3,546
--------
7,451
--------
Medical Imaging Systems -- 0.5%
Lantheus Holdings, Inc.+............... 24,971 348,845
--------
Medical Information Systems -- 0.8%
Allscripts Healthcare Solutions, Inc.+. 2,051 24,427
Castlight Health, Inc., Class B+....... 924 2,282
Computer Programs & Systems, Inc....... 136 3,400
Inovalon Holdings, Inc., Class A+...... 811 7,632
Medidata Solutions, Inc.+.............. 680 47,804
NantHealth, Inc.+...................... 241 374
NextGen Healthcare, Inc.+.............. 626 9,246
Tabula Rasa HealthCare, Inc.+.......... 5,806 428,947
--------
524,112
--------
Medical Instruments -- 0.2%
AngioDynamics, Inc.+................... 429 8,765
Avanos Medical, Inc.+.................. 552 31,243
Cardiovascular Systems, Inc.+.......... 382 10,715
Endologix, Inc.+....................... 979 1,194
LivaNova PLC+.......................... 573 64,170
Natus Medical, Inc.+................... 379 11,325
NuVasive, Inc.+........................ 605 33,983
TransEnterix, Inc.+.................... 1,881 6,151
--------
167,546
--------
Medical Labs & Testing Services -- 0.8%
Evolus, Inc.+.......................... 107 1,586
Invitae Corp.+......................... 772 10,955
Medpace Holdings, Inc.+................ 256 13,337
Miragen Therapeutics, Inc.+............ 306 1,322
Natera, Inc.+.......................... 387 8,498
Neuronetics, Inc.+..................... 75 1,911
R1 RCM, Inc.+.......................... 50,727 429,658
Syneos Health, Inc.+................... 730 33,310
Teladoc Health, Inc.+.................. 789 54,709
--------
555,286
--------
Medical Laser Systems -- 0.0%
Cutera, Inc.+.......................... 160 3,248
--------
Medical Products -- 2.7%
Accuray, Inc.+......................... 984 4,418
AtriCure, Inc.+........................ 395 12,565
Atrion Corp............................ 17 11,597
AxoGen, Inc.+.......................... 399 14,879
Cerus Corp.+........................... 1,562 10,465
CryoLife, Inc.+........................ 419 12,981
CytoSorbents Corp.+.................... 350 3,500
FONAR Corp.+........................... 72 1,781
Value
Security Description Shares (Note 3)
------------------------------------------------------
Medical Products (continued)
Glaukos Corp.+.................... 389 $ 22,539
Globus Medical, Inc., Class A+.... 856 45,240
Haemonetics Corp.+................ 612 63,936
Inogen, Inc.+..................... 208 39,430
Inspire Medical Systems, Inc.+.... 92 3,687
Integer Holdings Corp.+........... 366 27,256
Intersect ENT, Inc.+.............. 352 9,877
Invacare Corp..................... 388 5,013
iRadimed Corp.+................... 12,614 314,845
iRhythm Technologies, Inc.+....... 284 21,942
K2M Group Holdings, Inc.+......... 485 13,279
LeMaitre Vascular, Inc............ 6,646 177,448
Luminex Corp...................... 488 14,040
MiMedx Group, Inc.+............... 1,219 7,095
NanoString Technologies, Inc.+.... 296 4,561
Nevro Corp.+...................... 343 16,725
Novocure, Ltd.+................... 866 28,699
Nuvectra Corp.+................... 164 3,282
NxStage Medical, Inc.+............ 763 21,654
Orthofix Medical, Inc.+........... 7,214 438,755
OrthoPediatrics Corp.+............ 82 2,848
Pulse Biosciences, Inc.+.......... 125 1,601
Rockwell Medical, Inc.+........... 559 2,281
SeaSpine Holdings Corp.+.......... 139 2,387
Sientra, Inc.+.................... 273 5,621
Surmodics, Inc.+.................. 153 9,705
T2 Biosystems, Inc.+.............. 366 1,921
Tactile Systems Technology, Inc.+. 6,788 444,478
Wright Medical Group NV+.......... 1,464 39,499
----------
1,861,830
----------
Medical-Biomedical/Gene -- 4.3%
Abeona Therapeutics, Inc.+........ 368 3,165
ACADIA Pharmaceuticals, Inc.+..... 1,158 22,558
Acceleron Pharma, Inc.+........... 455 23,100
Achillion Pharmaceuticals, Inc.+.. 1,600 4,576
Acorda Therapeutics, Inc.+........ 513 9,803
ADMA Biologics, Inc.+............. 228 1,224
Aduro Biotech, Inc.+.............. 755 3,201
Adverum Biotechnologies, Inc.+.... 641 2,692
Agenus, Inc.+..................... 1,025 1,630
Albireo Pharma, Inc.+............. 107 2,858
Alder Biopharmaceuticals, Inc.+... 686 8,712
Aldeyra Therapeutics, Inc.+....... 200 2,154
Allakos, Inc.+.................... 97 4,690
Allena Pharmaceuticals, Inc.+..... 136 1,119
AMAG Pharmaceuticals, Inc.+....... 404 8,686
Amicus Therapeutics, Inc.+........ 2,228 24,909
AnaptysBio, Inc.+................. 223 16,663
ANI Pharmaceuticals, Inc.+........ 9,597 465,742
Aptinyx, Inc.+.................... 157 4,088
Aratana Therapeutics, Inc.+....... 535 3,178
Arbutus Biopharma Corp.+.......... 416 1,764
Arcus Biosciences, Inc.+.......... 109 1,095
Ardelyx, Inc.+.................... 514 1,414
Arena Pharmaceuticals, Inc.+...... 584 20,825
ArQule, Inc.+..................... 1,276 4,938
Arrowhead Pharmaceuticals, Inc.+.. 1,024 13,025
Arsanis, Inc.+.................... 61 82
52
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
COMMON STOCKS (continued)
Medical-Biomedical/Gene (continued)
Assembly Biosciences, Inc.+................ 247 $ 5,651
Atara Biotherapeutics, Inc.+............... 494 16,880
Audentes Therapeutics, Inc.+............... 383 10,801
AVEO Pharmaceuticals, Inc.+................ 1,223 2,996
Avid Bioservices, Inc.+.................... 596 3,123
Avrobio, Inc.+............................. 72 2,164
Bellicum Pharmaceuticals, Inc.+............ 474 1,929
BioCryst Pharmaceuticals, Inc.+............ 1,284 9,399
Biohaven Pharmaceutical Holding Co., Ltd.+. 334 12,041
BioTime, Inc.+............................. 1,054 2,055
Blueprint Medicines Corp.+................. 487 29,595
Calithera Biosciences, Inc.+............... 366 1,728
Cambrex Corp.+............................. 387 20,623
Cara Therapeutics, Inc.+................... 383 7,177
CASI Pharmaceuticals, Inc.+................ 587 1,925
Cellular Biomedicine Group, Inc.+.......... 137 1,743
Champions Oncology, Inc.+.................. 10,019 124,035
ChemoCentryx, Inc.+........................ 16,772 181,473
ChromaDex Corp.+........................... 453 1,576
Clearside Biomedical, Inc.+................ 329 1,783
Cohbar, Inc.+.............................. 279 1,069
Constellation Pharmaceuticals, Inc.+....... 48 297
Crinetics Pharmaceuticals, Inc.+........... 82 2,043
Cue Biopharma, Inc.+....................... 208 1,319
Cymabay Therapeutics, Inc.+................ 694 7,322
CytomX Therapeutics, Inc.+................. 524 7,472
Deciphera Pharmaceuticals, Inc.+........... 103 2,080
Denali Therapeutics, Inc.+................. 536 7,756
Dicerna Pharmaceuticals, Inc.+............. 534 7,027
Dynavax Technologies Corp.+................ 734 7,259
Editas Medicine, Inc.+..................... 537 13,602
Eidos Therapeutics, Inc.+.................. 85 1,040
ElectroCore LLC+........................... 71 712
Emergent BioSolutions, Inc.+............... 524 32,064
Endocyte, Inc.+............................ 765 18,092
Enzo Biochem, Inc.+........................ 518 1,720
Epizyme, Inc.+............................. 616 4,959
Esperion Therapeutics, Inc.+............... 269 12,221
Evelo Biosciences, Inc.+................... 63 574
Fate Therapeutics, Inc.+................... 591 7,364
FibroGen, Inc.+............................ 880 37,726
Five Prime Therapeutics, Inc.+............. 395 4,795
Fortress Biotech, Inc.+.................... 412 343
Forty Seven, Inc.+......................... 96 1,185
Geron Corp.+............................... 1,988 3,042
GlycoMimetics, Inc.+....................... 401 5,045
GTx, Inc.+................................. 60 95
Halozyme Therapeutics, Inc.+............... 1,469 22,814
Harvard Bioscience, Inc.+.................. 60,567 239,845
Helius Medical Technologies, Inc.+......... 192 1,966
Homology Medicines, Inc.+.................. 123 2,315
Idera Pharmaceuticals, Inc.+............... 225 1,501
ImmunoGen, Inc.+........................... 1,689 9,171
Immunomedics, Inc.+........................ 1,673 37,693
Innovate Biopharmaceuticals, Inc.+......... 218 918
Innoviva, Inc.+............................ 811 11,322
Inovio Pharmaceuticals, Inc.+.............. 976 4,812
Insmed, Inc.+.............................. 901 13,155
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
Medical-Biomedical/Gene (continued)
Intellia Therapeutics, Inc.+............. 391 $ 6,639
Intercept Pharmaceuticals, Inc.+......... 258 24,771
Intrexon Corp.+.......................... 867 10,023
Iovance Biotherapeutics, Inc.+........... 967 8,780
Karyopharm Therapeutics, Inc.+........... 571 6,018
Kezar Life Sciences, Inc.+............... 61 1,509
Kindred Biosciences, Inc.+............... 365 5,307
Kiniksa Pharmaceuticals, Ltd., Class A+.. 76 1,447
Lexicon Pharmaceuticals, Inc.+........... 509 3,985
Ligand Pharmaceuticals, Inc.+............ 246 40,543
Liquidia Technologies, Inc.+............. 57 934
Loxo Oncology, Inc.+..................... 317 48,393
MacroGenics, Inc.+....................... 461 7,588
Magenta Therapeutics, Inc.+.............. 48 421
Medicines Co.+........................... 810 18,841
MeiraGTx Holdings PLC+................... 44 588
Menlo Therapeutics, Inc.+................ 113 689
Molecular Templates, Inc.+............... 106 454
Mustang Bio, Inc.+....................... 190 756
Myriad Genetics, Inc.+................... 782 35,213
NantKwest, Inc.+......................... 332 724
NeoGenomics, Inc.+....................... 22,492 414,752
Neon Therapeutics, Inc.+................. 74 434
NewLink Genetics Corp.+.................. 343 648
Novavax, Inc.+........................... 4,487 7,897
Nymox Pharmaceutical Corp.+.............. 381 667
Omeros Corp.+............................ 539 8,231
Organovo Holdings, Inc.+................. 1,343 1,356
Ovid therapeutics, Inc.+................. 155 795
Pacific Biosciences of California, Inc.+. 1,434 6,381
Palatin Technologies, Inc.+.............. 2,334 2,100
PDL BioPharma, Inc.+..................... 1,687 4,201
Pfenex, Inc.+............................ 335 1,330
Pieris Pharmaceuticals, Inc.+............ 611 2,517
PolarityTE, Inc.+........................ 118 1,798
Prothena Corp. PLC+...................... 473 5,865
PTC Therapeutics, Inc.+.................. 533 20,531
Puma Biotechnology, Inc.+................ 343 12,708
Radius Health, Inc.+..................... 476 7,535
REGENXBIO, Inc.+......................... 373 24,868
Replimune Group, Inc.+................... 88 1,133
resTORbio, Inc.+......................... 91 1,006
Retrophin, Inc.+......................... 476 12,214
Rigel Pharmaceuticals, Inc.+............. 1,976 5,671
RTI Surgical, Inc.+...................... 669 3,064
Rubius Therapeutics, Inc.+............... 143 2,350
Sangamo Therapeutics, Inc.+.............. 1,194 15,128
Savara, Inc.+............................ 337 3,033
Scholar Rock Holding Corp.+.............. 73 1,715
Selecta Biosciences, Inc.+............... 212 1,090
Sienna Biopharmaceuticals, Inc.+......... 181 1,671
Solid Biosciences, Inc.+................. 143 4,576
Spark Therapeutics, Inc.+................ 370 16,646
Spectrum Pharmaceuticals, Inc.+.......... 1,187 14,125
Stemline Therapeutics, Inc.+............. 333 4,988
Surface Oncology, Inc.+.................. 86 672
Syndax Pharmaceuticals, Inc.+............ 165 794
Synlogic, Inc.+.......................... 181 1,432
Theravance Biopharma, Inc.+.............. 504 12,232
53
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCKS (continued)
Medical-Biomedical/Gene (continued)
Tobira Therapeutics, Inc. CVR+(1)(2)... 104 $ 0
Tocagen, Inc.+......................... 210 2,197
Translate Bio, Inc.+................... 115 647
Tyme Technologies, Inc.+............... 494 1,107
Ultragenyx Pharmaceutical, Inc.+....... 553 26,793
UNITY Biotechnology, Inc.+............. 59 657
Unum Therapeutics, Inc.+............... 42 314
Veracyte, Inc.+........................ 333 4,945
Verastem, Inc.+........................ 809 4,102
Vericel Corp.+......................... 41,761 465,635
Viking Therapeutics, Inc.+............. 610 8,296
WaVe Life Sciences, Ltd.+.............. 207 9,665
XOMA Corp.+............................ 67 825
ZIOPHARM Oncology, Inc.+............... 1,549 3,067
Zomedica Pharmaceuticals Corp.+........ 485 834
----------
3,011,184
----------
Medical-Drugs -- 2.4%
Achaogen, Inc.+........................ 369 1,421
Aclaris Therapeutics, Inc.+............ 315 3,745
Adamas Pharmaceuticals, Inc.+.......... 259 4,286
Aeglea BioTherapeutics, Inc.+.......... 192 1,657
Aerie Pharmaceuticals, Inc.+........... 419 22,282
Aimmune Therapeutics, Inc.+............ 510 13,556
Akcea Therapeutics, Inc.+.............. 150 3,348
Akorn, Inc.+........................... 1,099 7,330
Ampio Pharmaceuticals, Inc.+........... 1,152 530
Apellis Pharmaceuticals, Inc.+......... 425 5,946
Aquestive Therapeutics, Inc.+.......... 61 923
Array BioPharma, Inc.+................. 2,400 38,880
Athenex, Inc.+......................... 517 6,240
Athersys, Inc.+........................ 1,335 2,496
BioSpecifics Technologies Corp.+....... 8,711 533,723
Catalyst Biosciences, Inc.+............ 140 1,246
Catalyst Pharmaceuticals, Inc.+........ 1,135 3,382
Chimerix, Inc.+........................ 519 1,811
Clovis Oncology, Inc.+................. 560 6,513
Coherus Biosciences, Inc.+............. 611 7,143
Collegium Pharmaceutical, Inc.+........ 345 5,537
Concert Pharmaceuticals, Inc.+......... 251 3,745
Corbus Pharmaceuticals Holdings, Inc.+. 587 3,909
Corcept Therapeutics, Inc.+............ 1,150 13,513
Corium International, Inc.+............ 315 3,985
Corvus Pharmaceuticals, Inc.+.......... 163 1,237
CTI Biopharma Corp.+................... 601 1,034
Cytokinetics, Inc.+.................... 541 3,619
Dova Pharmaceuticals, Inc.+............ 139 2,580
Durect Corp.+.......................... 1,845 1,845
Eagle Pharmaceuticals, Inc.+........... 124 6,106
Eloxx Pharmaceuticals Inc+............. 264 3,176
Enanta Pharmaceuticals, Inc.+.......... 197 15,201
Global Blood Therapeutics, Inc.+....... 588 20,633
Horizon Pharma PLC+.................... 1,946 35,437
Immune Design Corp.+................... 397 572
Insys Therapeutics, Inc.+.............. 316 2,695
Intra-Cellular Therapies, Inc.+........ 527 8,948
Ironwood Pharmaceuticals, Inc.+........ 1,630 21,353
Jounce Therapeutics, Inc.+............. 186 751
Kadmon Holdings, Inc.+................. 1,173 2,780
Value
Security Description Shares (Note 3)
----------------------------------------------------------
Medical-Drugs (continued)
Kala Pharmaceuticals, Inc.+........... 137 $ 993
Keryx Biopharmaceuticals, Inc.+....... 1,112 3,091
Kura Oncology, Inc.+.................. 333 3,620
Lannett Co., Inc.+.................... 342 1,252
Madrigal Pharmaceuticals, Inc.+....... 82 15,651
Mallinckrodt PLC+..................... 969 24,283
Marinus Pharmaceuticals, Inc.+........ 428 2,003
MediciNova, Inc.+..................... 469 4,577
Melinta Therapeutics, Inc.+........... 409 1,076
Minerva Neurosciences, Inc.+.......... 360 3,949
MyoKardia, Inc.+...................... 400 21,176
Neos Therapeutics, Inc.+.............. 333 1,042
Ocular Therapeutix, Inc.+............. 393 1,949
Odonate Therapeutics, Inc.+........... 80 1,160
Optinose, Inc.+....................... 226 2,391
Pacira Pharmaceuticals, Inc.+......... 470 22,978
Paratek Pharmaceuticals, Inc.+........ 371 2,764
Phibro Animal Health Corp., Class A... 235 10,086
Prestige Consumer Healthcare, Inc.+... 612 22,130
Progenics Pharmaceuticals, Inc.+...... 993 4,975
Ra Pharmaceuticals, Inc.+............. 170 2,434
Reata Pharmaceuticals, Inc., Class A+. 220 12,965
Rhythm Pharmaceuticals, Inc.+......... 179 5,014
Rocket Pharmaceuticals, Inc.+......... 246 3,897
scPharmaceuticals, Inc.+.............. 80 342
Seres Therapeutics, Inc.+............. 242 1,663
SIGA Technologies, Inc.+.............. 611 2,951
Sorrento Therapeutics, Inc.+.......... 1,287 4,106
Spero Therapeutics, Inc.+............. 99 794
Spring Bank Pharmaceuticals, Inc.+.... 165 1,658
Supernus Pharmaceuticals, Inc.+....... 576 27,395
Synergy Pharmaceuticals, Inc.+........ 2,925 1,219
Syros Pharmaceuticals, Inc.+.......... 298 1,961
Tetraphase Pharmaceuticals, Inc.+..... 622 1,275
TG Therapeutics, Inc.+................ 739 3,362
TherapeuticsMD, Inc.+................. 2,150 10,514
Tricida, Inc.+........................ 137 3,699
Vanda Pharmaceuticals, Inc.+.......... 30,798 584,238
Verrica Pharmaceuticals, Inc.+........ 68 898
Voyager Therapeutics, Inc.+........... 252 3,420
Xeris Pharmaceuticals, Inc.+.......... 78 1,710
Zogenix, Inc.+........................ 494 20,629
----------
1,672,404
----------
Medical-Generic Drugs -- 0.1%
Amneal Pharmaceuticals, Inc.+......... 1,023 18,874
Amphastar Pharmaceuticals, Inc.+...... 418 7,503
Endo International PLC+............... 2,637 44,671
Momenta Pharmaceuticals, Inc.+........ 903 11,296
Teligent, Inc.+....................... 484 1,554
----------
83,898
----------
Medical-HMO -- 0.1%
Magellan Health, Inc.+................ 290 18,867
Tivity Health, Inc.+.................. 471 16,207
Triple-S Management Corp., Class B+... 260 4,462
----------
39,536
----------
Medical-Hospitals -- 0.1%
Community Health Systems, Inc.+....... 1,008 3,185
54
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------------------
COMMON STOCKS (continued)
Medical-Hospitals (continued)
LifePoint Health, Inc.+........................... 418 $ 27,112
Quorum Health Corp.+.............................. 345 1,373
Select Medical Holdings Corp.+.................... 1,276 21,156
Surgery Partners, Inc.+........................... 219 2,976
Tenet Healthcare Corp.+........................... 985 25,344
--------
81,146
--------
Medical-Nursing Homes -- 0.1%
Ensign Group, Inc................................. 580 21,483
Genesis Healthcare, Inc.+......................... 672 1,035
National HealthCare Corp.......................... 143 11,373
--------
33,891
--------
Medical-Outpatient/Home Medical -- 1.4%
Addus HomeCare Corp.+............................. 6,496 425,488
Amedisys, Inc.+................................... 315 34,650
Civitas Solutions, Inc.+.......................... 31,023 448,593
LHC Group, Inc.+.................................. 347 31,726
Providence Service Corp.+......................... 131 8,658
--------
949,115
--------
Medical-Wholesale Drug Distribution -- 0.0%
Diplomat Pharmacy, Inc.+.......................... 668 13,253
Owens & Minor, Inc................................ 719 5,680
--------
18,933
--------
Metal Processors & Fabrication -- 0.2%
AZZ, Inc.......................................... 305 13,527
CIRCOR International, Inc......................... 191 6,209
Global Brass & Copper Holdings, Inc............... 256 8,095
LB Foster Co., Class A+........................... 117 2,127
Mueller Industries, Inc........................... 667 16,242
Park-Ohio Holdings Corp........................... 105 3,473
RBC Bearings, Inc.+............................... 281 41,498
Rexnord Corp.+.................................... 1,231 33,003
Sun Hydraulics Corp............................... 336 15,590
--------
139,764
--------
Metal Products-Distribution -- 1.0%
Lawson Products, Inc.+............................ 20,099 664,473
Olympic Steel, Inc................................ 108 2,037
Worthington Industries, Inc....................... 494 20,689
--------
687,199
--------
Metal Products-Fasteners -- 0.0%
Eastern Co........................................ 64 1,811
TriMas Corp.+..................................... 540 15,903
--------
17,714
--------
Metal-Aluminum -- 0.0%
Century Aluminum Co.+............................. 588 4,669
Kaiser Aluminum Corp.............................. 193 18,406
--------
23,075
--------
Metal-Diversified -- 0.0%
Covia Holdings Corp.+............................. 366 2,115
Ferroglobe Representation & Warranty Trust+(1)(2). 777 0
--------
2,115
--------
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Metal-Iron -- 0.1%
Cleveland-Cliffs, Inc.+....................... 3,505 $ 37,714
--------
Mining Services -- 0.0%
Havilah Mining Corp.+......................... 200 50
--------
Miscellaneous Manufacturing -- 0.1%
American Railcar Industries, Inc.............. 85 5,943
FreightCar America, Inc.+..................... 141 2,016
Hillenbrand, Inc.............................. 739 35,398
John Bean Technologies Corp................... 369 38,365
--------
81,722
--------
Motion Pictures & Services -- 0.0%
Eros International PLC+....................... 421 4,202
IMAX Corp.+................................... 631 12,216
--------
16,418
--------
MRI/Medical Diagnostic Imaging -- 0.8%
RadNet, Inc.+................................. 39,533 585,088
--------
Multimedia -- 0.8%
E.W. Scripps Co., Class A..................... 537 9,032
Entravision Communications Corp., Class A..... 100,992 498,900
Liberty Media Corp.-Liberty Braves, Series A+. 117 3,019
Liberty Media Corp.-Liberty Braves, Series C+. 420 10,878
Media General, Inc. CVR+(1)(2)................ 1,299 0
--------
521,829
--------
Networking Products -- 1.3%
A10 Networks, Inc.+........................... 588 3,416
Calix, Inc.+.................................. 526 3,840
Extreme Networks, Inc.+....................... 1,351 7,498
Infinera Corp.+............................... 1,775 9,833
Lantronix, Inc.+.............................. 74,357 281,813
NeoPhotonics Corp.+........................... 414 3,312
NETGEAR, Inc.+................................ 368 20,417
Silicom, Ltd.+................................ 12,744 547,992
--------
878,121
--------
Night Clubs -- 0.5%
RCI Hospitality Holdings, Inc................. 13,045 341,518
--------
Non-Ferrous Metals -- 0.0%
Energy Fuels, Inc.+........................... 969 3,266
Materion Corp................................. 237 13,469
Uranium Energy Corp.+......................... 1,868 2,484
--------
19,219
--------
Non-Hazardous Waste Disposal -- 0.1%
Advanced Disposal Services, Inc.+............. 853 23,108
Casella Waste Systems, Inc., Class A+......... 469 15,271
Charah Solutions, Inc.+....................... 87 653
Covanta Holding Corp.......................... 1,384 20,331
--------
59,363
--------
Office Automation & Equipment -- 0.0%
Pitney Bowes, Inc............................. 2,215 14,663
--------
Office Furnishings-Original -- 0.1%
CompX International, Inc...................... 19 248
Herman Miller, Inc............................ 700 23,065
HNI Corp...................................... 511 19,362
Interface, Inc................................ 695 11,322
55
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------
COMMON STOCKS (continued)
Office Furnishings-Original (continued)
Kimball International, Inc., Class B.. 426 $ 7,012
Knoll, Inc............................ 570 11,314
Steelcase, Inc., Class A.............. 999 16,583
--------
88,906
--------
Office Supplies & Forms -- 0.0%
ACCO Brands Corp...................... 1,218 9,829
--------
Oil & Gas Drilling -- 0.1%
Diamond Offshore Drilling, Inc.+...... 763 10,819
Noble Corp. PLC+...................... 2,904 14,578
Ocean Rig UDW, Inc., Class A+......... 643 19,477
Quintana Energy Services, Inc.+....... 73 466
Rowan Cos. PLC, Class A+.............. 1,501 23,881
--------
69,221
--------
Oil Companies-Exploration & Production -- 0.9%
Abraxas Petroleum Corp.+.............. 123,875 227,930
Alta Mesa Resources, Inc., Class A+... 1,193 3,758
Approach Resources, Inc.+............. 530 885
Berry Petroleum Corp.................. 155 2,170
Bonanza Creek Energy, Inc.+........... 222 5,717
California Resources Corp.+........... 532 16,673
Callon Petroleum Co.+................. 2,688 26,799
Carrizo Oil & Gas, Inc.+.............. 1,029 18,738
Denbury Resources, Inc.+.............. 5,411 18,668
Earthstone Energy, Inc., Class A+..... 222 1,827
Eclipse Resources Corp.+.............. 1,036 1,181
EP Energy Corp., Class A+............. 487 877
Evolution Petroleum Corp.............. 300 3,090
Goodrich Petroleum Corp.+............. 104 1,567
Gulfport Energy Corp.+................ 2,056 18,730
Halcon Resources Corp.+............... 1,571 5,216
HighPoint Resources Corp.+............ 1,280 4,762
Isramco, Inc.+........................ 9 980
Jagged Peak Energy, Inc.+............. 756 9,314
Laredo Petroleum, Inc.+............... 1,831 9,594
Lilis Energy, Inc.+................... 523 1,412
Mammoth Energy Services, Inc.......... 147 3,669
Matador Resources Co.+................ 1,241 35,790
Midstates Petroleum Co., Inc.+........ 176 1,269
Northern Oil and Gas, Inc.+........... 2,289 6,730
Oasis Petroleum, Inc.+................ 3,172 31,910
Panhandle Oil and Gas, Inc., Class A.. 186 3,309
PDC Energy, Inc.+..................... 780 33,111
Penn Virginia Corp.+.................. 146 10,042
Resolute Energy Corp.+................ 257 7,152
Ring Energy, Inc.+.................... 674 4,806
Rosehill Resources, Inc.+............. 14 74
Sanchez Energy Corp.+................. 927 1,539
SandRidge Energy, Inc.+............... 361 3,231
SilverBow Resources, Inc.+............ 83 2,180
Southwestern Energy Co.+.............. 6,942 37,070
SRC Energy, Inc.+..................... 2,848 20,164
Talos Energy, Inc.+................... 237 6,176
Ultra Petroleum Corp.+................ 1,874 2,249
Unit Corp.+........................... 616 14,248
W&T Offshore, Inc.+................... 1,095 7,380
WildHorse Resource Development Corp.+. 321 6,808
Value
Security Description Shares (Note 3)
-------------------------------------------------------------------
Oil Companies-Exploration & Production (continued)
Zion Oil & Gas, Inc.+........................... 642 $ 719
--------
619,514
--------
Oil Field Machinery & Equipment -- 0.5%
Dril-Quip, Inc.+................................ 441 18,769
Exterran Corp.+................................. 381 7,959
Flotek Industries, Inc.+........................ 648 1,173
Forum Energy Technologies, Inc.+................ 954 8,548
Natural Gas Services Group, Inc.+............... 147 2,837
Profire Energy, Inc.+........................... 112,791 257,163
Smart Sand, Inc.+............................... 262 726
Thermon Group Holdings, Inc.+................... 381 8,222
US Silica Holdings, Inc......................... 922 12,908
--------
318,305
--------
Oil Refining & Marketing -- 1.0%
Adams Resources & Energy, Inc................... 25 1,014
CVR Energy, Inc................................. 186 7,998
Delek US Holdings, Inc.......................... 984 36,133
Murphy USA, Inc.+............................... 354 28,543
Par Pacific Holdings, Inc.+..................... 366 6,471
Trecora Resources+.............................. 37,243 402,224
Vertex Energy, Inc.+............................ 163,754 245,631
--------
728,014
--------
Oil-Field Services -- 0.4%
Archrock, Inc................................... 1,497 15,359
Basic Energy Services, Inc.+.................... 226 1,756
Bristow Group, Inc.+............................ 387 4,261
C&J Energy Services, Inc.+...................... 759 14,254
CARBO Ceramics, Inc.+........................... 243 1,174
DMC Global, Inc................................. 168 6,476
Era Group, Inc.+................................ 238 2,694
Frank's International NV+....................... 862 6,120
FTS International, Inc.+........................ 383 4,906
Gulfmark Offshore, Inc.+........................ 46 1,550
Helix Energy Solutions Group, Inc.+............. 1,656 14,109
Independence Contract Drilling, Inc.+........... 404 1,620
Keane Group, Inc.+.............................. 633 7,957
Key Energy Services, Inc.+...................... 120 1,086
KLX Energy Services Holdings, Inc.+............. 237 6,847
Liberty Oilfield Services, Inc., Class A........ 521 9,889
Matrix Service Co.+............................. 312 6,343
McDermott International, Inc.+.................. 2,112 16,326
MRC Global, Inc.+............................... 989 15,656
NCS Multistage Holdings, Inc.+.................. 115 1,300
Newpark Resources, Inc.+........................ 1,049 8,612
Nine Energy Service, Inc.+...................... 175 6,480
NOW, Inc.+...................................... 1,270 16,307
Nuverra Environmental Solutions, Inc.+.......... 15 169
Oceaneering International, Inc.+................ 1,164 22,046
Oil States International, Inc.+................. 702 15,634
PHI, Inc.+...................................... 138 1,075
Pioneer Energy Services Corp.+.................. 898 2,667
ProPetro Holding Corp.+......................... 834 14,720
SEACOR Holdings, Inc.+.......................... 201 9,646
Select Energy Services, Inc., Class A+.......... 531 5,076
Solaris Oilfield Infrastructure, Inc., Class A+. 306 4,039
Superior Energy Services, Inc.+................. 1,805 14,133
TETRA Technologies, Inc.+....................... 1,433 4,256
--------
264,543
--------
56
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------
COMMON STOCKS (continued)
Optical Supplies -- 0.0%
STAAR Surgical Co.+.................... 517 $ 20,737
--------
Paper & Related Products -- 0.1%
Clearwater Paper Corp.+................ 190 4,586
Neenah, Inc............................ 196 15,770
P.H. Glatfelter Co..................... 511 9,147
Schweitzer-Mauduit International, Inc.. 362 11,555
Verso Corp., Class A+.................. 406 11,413
--------
52,471
--------
Patient Monitoring Equipment -- 0.5%
CareDx, Inc.+.......................... 13,679 357,159
--------
Pharmacy Services -- 0.0%
BioScrip, Inc.+........................ 1,489 3,991
--------
Photo Equipment & Supplies -- 0.0%
Ambarella, Inc.+....................... 381 13,251
--------
Physical Therapy/Rehabilitation Centers -- 0.4%
AAC Holdings, Inc.+.................... 155 854
U.S. Physical Therapy, Inc............. 2,265 243,533
--------
244,387
--------
Physicians Practice Management -- 0.4%
Apollo Medical Holdings, Inc.+......... 12,868 263,151
--------
Pipelines -- 0.0%
NextDecade Corp.+...................... 92 478
SemGroup Corp., Class A................ 931 17,214
Tellurian, Inc.+....................... 1,002 8,016
--------
25,708
--------
Pollution Control -- 0.0%
CECO Environmental Corp.+.............. 357 2,656
--------
Poultry -- 0.0%
Sanderson Farms, Inc................... 240 23,614
--------
Power Converter/Supply Equipment -- 0.1%
Energous Corp.+........................ 274 2,203
Generac Holdings, Inc.+................ 714 36,221
Powell Industries, Inc................. 104 3,033
SPX Corp.+............................. 507 14,865
SunPower Corp.+........................ 725 4,357
Vicor Corp.+........................... 206 8,261
--------
68,940
--------
Precious Metals -- 0.1%
Coeur Mining, Inc.+.................... 2,183 10,435
Hecla Mining Co........................ 5,336 12,806
Tahoe Resources, Inc.+................. 3,656 8,665
--------
31,906
--------
Printing-Commercial -- 0.1%
Cimpress NV+........................... 259 32,372
Deluxe Corp............................ 562 26,532
Ennis, Inc............................. 302 5,847
LSC Communications, Inc................ 386 3,640
Quad/Graphics, Inc..................... 368 5,678
RR Donnelley & Sons Co................. 831 4,878
--------
78,947
--------
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
Private Equity -- 0.1%
Kennedy-Wilson Holdings, Inc................ 1,475 $27,995
-------
Publishing-Books -- 0.0%
Houghton Mifflin Harcourt Co.+.............. 1,218 8,161
Scholastic Corp............................. 332 14,402
Tribune Publishing Co.+..................... 203 3,063
-------
25,626
-------
Publishing-Newspapers -- 0.1%
Gannett Co., Inc............................ 1,334 12,940
New York Times Co., Class A................. 1,547 40,841
-------
53,781
-------
Publishing-Periodicals -- 0.0%
Meredith Corp............................... 464 23,924
Value Line, Inc............................. 13 328
-------
24,252
-------
Quarrying -- 0.0%
Compass Minerals International, Inc......... 401 19,453
-------
Racetracks -- 0.1%
Churchill Downs, Inc........................ 139 34,696
Empire Resorts, Inc.+....................... 42 270
International Speedway Corp., Class A....... 285 10,690
Penn National Gaming, Inc.+................. 1,269 30,813
Speedway Motorsports, Inc................... 135 2,097
-------
78,566
-------
Radio -- 0.0%
Beasley Broadcast Group, Inc., Class A...... 94 627
Entercom Communications Corp., Class A...... 1,507 9,780
Saga Communications, Inc., Class A.......... 45 1,577
-------
11,984
-------
Real Estate Investment Trusts -- 3.1%
Acadia Realty Trust......................... 948 26,392
AG Mtg. Investment Trust, Inc............... 331 5,726
Agree Realty Corp........................... 355 20,331
Alexander & Baldwin, Inc.................... 804 15,710
Alexander's, Inc............................ 25 7,875
American Assets Trust, Inc.................. 453 17,377
Americold Realty Trust...................... 1,016 25,146
Annaly Capital Management, Inc.............. 978 9,653
Anworth Mtg. Asset Corp..................... 1,146 4,997
Apollo Commercial Real Estate Finance, Inc.. 1,452 27,167
Arbor Realty Trust, Inc..................... 765 9,241
Ares Commercial Real Estate Corp............ 315 4,558
Armada Hoffler Properties, Inc.............. 573 8,584
ARMOUR Residential REIT, Inc................ 490 10,672
Ashford Hospitality Trust, Inc.............. 1,000 5,150
Blackstone Mtg. Trust, Inc., Class A........ 1,316 44,402
Bluerock Residential Growth REIT, Inc....... 281 2,661
Braemar Hotels & Resorts, Inc............... 344 3,660
BRT Apartments Corp......................... 106 1,233
Capstead Mtg. Corp.......................... 1,083 7,429
CareTrust REIT, Inc......................... 946 16,706
CatchMark Timber Trust, Inc., Class A....... 578 5,115
CBL & Associates Properties, Inc............ 1,994 6,580
Cedar Realty Trust, Inc..................... 1,041 3,925
Chatham Lodging Trust....................... 533 10,393
57
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
COMMON STOCKS (continued)
Real Estate Investment Trusts (continued)
Cherry Hill Mtg. Investment Corp............ 186 $ 3,331
Chesapeake Lodging Trust.................... 698 20,514
City Office REIT, Inc....................... 418 4,606
Clipper Realty, Inc......................... 175 2,352
Colony Credit Real Estate, Inc.............. 989 21,105
Community Healthcare Trust, Inc............. 205 6,093
CoreCivic, Inc.............................. 1,398 31,399
CorEnergy Infrastructure Trust, Inc......... 140 5,058
CorePoint Lodging, Inc.+.................... 487 7,972
Cousins Properties, Inc..................... 4,951 41,143
DiamondRock Hospitality Co.................. 2,441 25,508
Dynex Capital, Inc.......................... 656 3,798
Easterly Government Properties, Inc......... 713 12,955
EastGroup Properties, Inc................... 414 39,657
Exantas Capital Corp........................ 357 4,048
First Industrial Realty Trust, Inc.......... 1,466 45,006
Four Corners Property Trust, Inc............ 798 20,812
Franklin Street Properties Corp............. 1,227 8,540
Front Yard Residential Corp................. 581 5,386
GEO Group, Inc.............................. 1,415 31,286
Getty Realty Corp........................... 386 10,356
Gladstone Commercial Corp................... 331 6,286
Gladstone Land Corp......................... 154 1,927
Global Medical REIT, Inc.................... 223 2,043
Global Net Lease, Inc....................... 845 17,111
Government Properties Income Trust.......... 1,162 10,260
Great Ajax Corp............................. 189 2,465
Healthcare Realty Trust, Inc................ 1,460 40,676
Hersha Hospitality Trust.................... 419 7,358
Independence Realty Trust, Inc.............. 1,027 10,178
Industrial Logistics Properties Trust....... 238 5,138
InfraREIT, Inc.+............................ 520 10,930
Innovative Industrial Properties, Inc....... 76 3,115
Invesco Mtg. Capital, Inc................... 1,323 19,951
Investors Real Estate Trust................. 1,412 7,667
iStar, Inc.................................. 766 8,043
Jernigan Capital, Inc....................... 212 4,149
Kite Realty Group Trust..................... 974 15,428
KKR Real Estate Finance Trust, Inc.......... 205 4,116
Ladder Capital Corp......................... 1,024 17,244
LaSalle Hotel Properties.................... 1,304 43,045
Lexington Realty Trust...................... 2,536 19,705
LTC Properties, Inc......................... 463 19,803
Mack-Cali Realty Corp....................... 1,065 21,619
MedEquities Realty Trust, Inc............... 337 2,787
Monmouth Real Estate Investment Corp........ 911 13,629
National Health Investors, Inc.............. 481 35,334
National Storage Affiliates Trust........... 666 17,736
New Senior Investment Group, Inc............ 879 5,028
New York Mortgage Trust, Inc................ 1,636 10,045
NexPoint Residential Trust, Inc............. 194 6,914
NorthStar Realty Europe Corp................ 526 7,059
One Liberty Properties, Inc................. 176 4,564
Orchid Island Capital, Inc.................. 616 4,029
Pebblebrook Hotel Trust..................... 802 27,035
Pennsylvania Real Estate Investment Trust... 810 7,250
PennyMac Mtg. Investment Trust.............. 705 13,614
Physicians Realty Trust..................... 2,151 35,664
Piedmont Office Realty Trust, Inc., Class A. 1,509 27,192
Value
Security Description Shares (Note 3)
-------------------------------------------------------------------
Real Estate Investment Trusts (continued)
PotlatchDeltic Corp............................ 725 $ 26,281
Preferred Apartment Communities, Inc., Class A. 470 7,920
PS Business Parks, Inc......................... 234 30,560
QTS Realty Trust, Inc., Class A................ 600 22,992
Ramco-Gershenson Properties Trust.............. 934 12,404
Ready Capital Corp............................. 208 3,187
Redwood Trust, Inc............................. 967 15,878
Retail Opportunity Investments Corp............ 1,308 23,008
Rexford Industrial Realty, Inc................. 1,069 33,855
RLJ Lodging Trust.............................. 2,047 39,794
Ryman Hospitality Properties, Inc.............. 527 40,890
Sabra Health Care REIT, Inc.................... 2,095 45,357
Saul Centers, Inc.............................. 139 6,639
Select Income REIT............................. 1,041 19,685
Seritage Growth Properties, Class A............ 385 14,638
Spirit MTA REIT................................ 507 5,430
STAG Industrial, Inc........................... 1,238 32,757
Summit Hotel Properties, Inc................... 1,217 14,020
Sunstone Hotel Investors, Inc.................. 2,687 38,881
Tanger Factory Outlet Centers, Inc............. 1,082 24,085
Terreno Realty Corp............................ 675 25,265
Tier REIT, Inc................................. 595 12,894
UMH Properties, Inc............................ 29,253 419,195
Universal Health Realty Income Trust........... 151 9,679
Urban Edge Properties.......................... 1,288 26,391
Urstadt Biddle Properties, Inc., Class A....... 348 6,929
Washington Prime Group, Inc.................... 2,200 14,080
Washington Real Estate Investment Trust........ 928 25,863
Western Asset Mtg. Capital Corp................ 476 4,746
Xenia Hotels & Resorts, Inc.................... 1,327 27,270
----------
2,198,318
----------
Real Estate Management/Services -- 0.1%
Farmland Partners, Inc......................... 373 2,555
HFF, Inc., Class A............................. 442 16,243
Marcus & Millichap, Inc.+...................... 229 7,951
Maui Land & Pineapple Co., Inc.+............... 80 902
Newmark Group, Inc., Class A................... 274 2,669
RE/MAX Holdings, Inc., Class A................. 210 7,852
Redfin Corp.+.................................. 932 14,399
RMR Group, Inc., Class A....................... 83 6,298
Safety Income and Growth, Inc.................. 93 1,672
----------
60,541
----------
Real Estate Operations & Development -- 0.1%
American Realty Investors, Inc.+............... 24 364
Consolidated-Tomoka Land Co.................... 46 2,664
Cushman & Wakefield PLC+....................... 535 8,699
Essential Properties Realty Trust, Inc......... 419 5,698
Forestar Group, Inc.+.......................... 124 2,232
Griffin Industrial Realty, Inc................. 10 351
McGrath RentCorp............................... 284 15,163
Stratus Properties, Inc.+...................... 69 1,991
Transcontinental Realty Investors, Inc.+....... 20 682
Trinity Place Holdings, Inc.+.................. 206 1,100
Whitestone REIT................................ 449 6,044
----------
44,988
----------
58
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
COMMON STOCKS (continued)
Recreational Centers -- 0.1%
Planet Fitness, Inc., Class A+............ 1,041 $ 51,103
St. Joe Co.+.............................. 415 6,304
Town Sports International Holdings, Inc.+. 170 1,305
--------
58,712
--------
Recreational Vehicles -- 1.1%
Camping World Holdings, Inc., Class A..... 382 6,551
Malibu Boats, Inc., Class A+.............. 7,983 320,917
MCBC Holdings, Inc.+...................... 15,170 450,245
--------
777,713
--------
Rental Auto/Equipment -- 0.1%
Aaron's, Inc.............................. 815 38,411
Avis Budget Group, Inc.+.................. 786 22,102
CAI International, Inc.+.................. 203 5,057
Herc Holdings, Inc.+...................... 283 9,073
Hertz Global Holdings, Inc.+.............. 645 8,869
Rent-A-Center, Inc.+...................... 522 7,439
Textainer Group Holdings, Ltd.+........... 321 3,765
--------
94,716
--------
Resorts/Theme Parks -- 0.1%
Marriott Vacations Worldwide Corp......... 458 40,528
SeaWorld Entertainment, Inc.+............. 646 16,874
--------
57,402
--------
Retail-Apparel/Shoe -- 1.0%
Abercrombie & Fitch Co., Class A.......... 801 15,780
American Eagle Outfitters, Inc............ 1,899 43,791
Ascena Retail Group, Inc.+................ 2,061 7,935
Boot Barn Holdings, Inc.+................. 326 8,046
Buckle, Inc............................... 339 6,915
Caleres, Inc.............................. 495 16,929
Cato Corp., Class A....................... 267 5,148
Chico's FAS, Inc.......................... 1,505 11,543
Children's Place, Inc..................... 190 28,386
DSW, Inc., Class A........................ 809 21,479
Duluth Holdings, Inc., Class B+........... 97 2,981
Express, Inc.+............................ 857 7,550
Francesca's Holdings Corp.+............... 410 1,246
Genesco, Inc.+............................ 229 9,799
Guess?, Inc............................... 678 14,401
J. Jill, Inc.+............................ 193 975
New York & Co., Inc.+..................... 113,294 448,644
Shoe Carnival, Inc........................ 125 5,091
Tailored Brands, Inc...................... 585 12,291
Tilly's, Inc., Class A.................... 171 3,033
Vera Bradley, Inc.+....................... 267 3,522
Winmark Corp.............................. 29 4,457
--------
679,942
--------
Retail-Appliances -- 0.0%
Conn's, Inc.+............................. 231 6,417
--------
Retail-Automobile -- 0.1%
America's Car-Mart, Inc.+................. 71 5,318
Asbury Automotive Group, Inc.+............ 237 15,429
Carvana Co.+.............................. 381 14,764
Group 1 Automotive, Inc................... 226 13,049
Value
Security Description Shares (Note 3)
---------------------------------------------------------
Retail-Automobile (continued)
Lithia Motors, Inc., Class A........... 270 $ 24,051
Rush Enterprises, Inc., Class A........ 354 12,528
Rush Enterprises, Inc., Class B........ 52 1,875
Sonic Automotive, Inc., Class A........ 282 5,110
--------
92,124
--------
Retail-Bedding -- 0.0%
Bed Bath & Beyond, Inc................. 1,583 21,750
--------
Retail-Bookstores -- 0.0%
Barnes & Noble Education, Inc.+........ 452 2,581
Barnes & Noble, Inc.................... 702 4,444
--------
7,025
--------
Retail-Building Products -- 0.1%
At Home Group, Inc.+................... 520 14,217
Beacon Roofing Supply, Inc.+........... 803 22,412
BMC Stock Holdings, Inc.+.............. 793 13,275
Foundation Building Materials, Inc.+... 174 1,658
GMS, Inc.+............................. 383 6,297
Tile Shop Holdings, Inc................ 473 3,074
--------
60,933
--------
Retail-Computer Equipment -- 0.0%
PC Connection, Inc..................... 136 4,507
--------
Retail-Discount -- 0.1%
Big Lots, Inc.......................... 473 19,639
BJ's Wholesale Club Holdings, Inc.+.... 834 18,473
Citi Trends, Inc....................... 150 3,800
Ollie's Bargain Outlet Holdings, Inc.+. 585 54,346
--------
96,258
--------
Retail-Drug Store -- 0.0%
Rite Aid Corp.+........................ 12,389 14,867
--------
Retail-Floor Coverings -- 0.0%
Lumber Liquidators Holdings, Inc.+..... 335 4,007
--------
Retail-Hair Salons -- 0.0%
Regis Corp.+........................... 417 7,022
--------
Retail-Home Furnishings -- 0.1%
Bassett Furniture Industries, Inc...... 120 2,370
Haverty Furniture Cos., Inc............ 222 4,502
Kirkland's, Inc.+...................... 185 1,870
La-Z-Boy, Inc.......................... 550 15,290
Lovesac Co.+........................... 42 800
Pier 1 Imports, Inc.................... 962 1,530
RH+.................................... 227 26,266
--------
52,628
--------
Retail-Jewelry -- 0.6%
Movado Group, Inc...................... 10,275 395,690
Signet Jewelers, Ltd................... 695 38,955
--------
434,645
--------
Retail-Leisure Products -- 0.0%
MarineMax, Inc.+....................... 306 6,965
Party City Holdco, Inc.+............... 667 6,983
--------
13,948
--------
59
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------
COMMON STOCKS (continued)
Retail-Major Department Stores -- 0.0%
J.C. Penney Co., Inc.+................. 3,696 $ 5,433
Sears Holdings Corp.+.................. 478 96
--------
5,529
--------
Retail-Misc./Diversified -- 0.2%
Container Store Group, Inc.+........... 188 1,111
Five Below, Inc.+...................... 643 73,186
Gaia, Inc.+............................ 132 1,929
GameStop Corp., Class A................ 1,180 17,228
Hudson, Ltd., Class A+................. 468 9,894
PriceSmart, Inc........................ 260 18,239
Sally Beauty Holdings, Inc.+........... 1,419 25,272
--------
146,859
--------
Retail-Office Supplies -- 0.0%
Office Depot, Inc...................... 6,538 16,737
--------
Retail-Pawn Shops -- 0.1%
EZCORP, Inc., Class A+................. 589 5,854
FirstCash, Inc......................... 512 41,165
--------
47,019
--------
Retail-Pet Food & Supplies -- 0.0%
Freshpet, Inc.+........................ 309 11,773
PetIQ, Inc.+........................... 131 4,147
PetMed Express, Inc.................... 235 6,566
--------
22,486
--------
Retail-Petroleum Products -- 0.0%
World Fuel Services Corp............... 789 25,248
--------
Retail-Regional Department Stores -- 0.0%
Dillard's, Inc., Class A............... 137 9,648
--------
Retail-Restaurants -- 1.6%
Biglari Holdings, Inc., Class A+....... 1 750
Biglari Holdings, Inc., Class B+....... 11 1,567
BJ's Restaurants, Inc.................. 243 14,867
Bloomin' Brands, Inc................... 986 19,671
Bojangles', Inc.+...................... 205 3,241
Brinker International, Inc............. 517 22,412
Cannae Holdings, Inc.+................. 812 14,998
Carrols Restaurant Group, Inc.+........ 409 5,382
Cheesecake Factory, Inc................ 503 24,315
Chuy's Holdings, Inc.+................. 197 4,801
Cracker Barrel Old Country Store, Inc.. 227 36,020
Dave & Buster's Entertainment, Inc..... 469 27,929
Del Frisco's Restaurant Group, Inc.+... 389 2,626
Del Taco Restaurants, Inc.+............ 366 3,989
Denny's Corp.+......................... 18,820 326,527
Dine Brands Global, Inc................ 197 15,965
El Pollo Loco Holdings, Inc.+.......... 252 3,152
Fiesta Restaurant Group, Inc.+......... 280 7,227
Habit Restaurants, Inc., Class A+...... 240 3,048
J Alexander's Holdings, Inc.+.......... 151 1,593
Jack in the Box, Inc................... 320 25,258
Noodles & Co.+......................... 165 1,556
Papa John's International, Inc......... 261 14,235
Potbelly Corp.+........................ 269 3,142
Red Robin Gourmet Burgers, Inc.+....... 153 4,621
Ruth's Hospitality Group, Inc.......... 15,512 419,289
Value
Security Description Shares (Note 3)
----------------------------------------------------------
Retail-Restaurants (continued)
Shake Shack, Inc., Class A+........... 290 $ 15,338
Sonic Corp............................ 407 17,615
Texas Roadhouse, Inc.................. 798 48,247
Wingstop, Inc......................... 342 21,416
Zoe's Kitchen, Inc.+.................. 223 2,837
----------
1,113,634
----------
Retail-Sporting Goods -- 0.0%
Big 5 Sporting Goods Corp............. 236 828
Hibbett Sports, Inc.+................. 223 3,896
Sportsman's Warehouse Holdings, Inc.+. 437 2,198
Zumiez, Inc.+......................... 219 5,094
----------
12,016
----------
Retail-Vision Service Center -- 0.0%
National Vision Holdings, Inc.+....... 572 23,698
----------
Retail-Vitamins & Nutrition Supplements -- 0.0%
GNC Holdings, Inc., Class A+.......... 967 3,559
----------
Retirement/Aged Care -- 0.0%
Brookdale Senior Living, Inc.+........ 2,201 19,655
Capital Senior Living Corp.+.......... 290 2,610
----------
22,265
----------
Rubber-Tires -- 0.0%
Cooper Tire & Rubber Co............... 597 18,441
----------
Rubber/Plastic Products -- 0.1%
Myers Industries, Inc................. 414 6,566
Proto Labs, Inc.+..................... 319 38,105
Raven Industries, Inc................. 422 18,349
Trinseo SA............................ 504 27,155
----------
90,175
----------
Satellite Telecom -- 0.1%
Intelsat SA+.......................... 537 13,994
Iridium Communications, Inc.+......... 1,130 22,385
Loral Space & Communications, Inc.+... 151 6,744
----------
43,123
----------
Savings & Loans/Thrifts -- 0.5%
Axos Financial, Inc.+................. 697 21,161
Banc of California, Inc............... 506 8,071
BankFinancial Corp.................... 159 2,245
Beneficial Bancorp, Inc............... 803 12,551
Berkshire Hills Bancorp, Inc.......... 479 15,984
Brookline Bancorp, Inc................ 930 14,415
BSB Bancorp, Inc.+.................... 99 2,851
Capitol Federal Financial, Inc........ 1,517 18,826
Community Bankers Trust Corp.+........ 253 2,156
Dime Community Bancshares, Inc........ 382 6,158
Entegra Financial Corp.+.............. 79 1,792
ESSA Bancorp, Inc..................... 112 1,809
First Defiance Financial Corp......... 235 6,397
First Financial Northwest, Inc........ 98 1,481
First Savings Financial Group, Inc.... 21 1,357
Flagstar Bancorp, Inc.+............... 348 10,715
Flushing Financial Corp............... 323 7,329
FS Bancorp, Inc....................... 37 1,670
Greene County Bancorp, Inc............ 36 1,154
Hingham Institution for Savings....... 16 3,258
60
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------
COMMON STOCKS (continued)
Savings & Loans/Thrifts (continued)
Home Bancorp, Inc................... 92 $ 3,656
HomeTrust Bancshares, Inc.+......... 206 5,616
Investors Bancorp, Inc.............. 2,910 32,534
Malvern Bancorp, Inc.+.............. 75 1,523
Meridian Bancorp, Inc............... 566 8,965
MutualFirst Financial, Inc.......... 69 2,450
Northfield Bancorp, Inc............. 511 6,730
Northwest Bancshares, Inc........... 1,126 18,174
OceanFirst Financial Corp........... 559 14,154
Oconee Federal Financial Corp....... 11 271
Oritani Financial Corp.............. 472 6,896
Pacific Premier Bancorp, Inc.+...... 537 15,696
People's United Financial, Inc...... 288 4,509
Provident Financial Services, Inc... 730 17,812
Prudential Bancorp, Inc............. 105 1,887
Riverview Bancorp, Inc.............. 250 2,117
SI Financial Group, Inc............. 131 1,734
Southern Missouri Bancorp, Inc...... 84 2,828
Territorial Bancorp, Inc............ 92 2,506
Timberland Bancorp, Inc............. 77 2,234
United Community Financial Corp..... 571 5,225
United Financial Bancorp, Inc....... 597 9,224
Washington Federal, Inc............. 983 27,681
Waterstone Financial, Inc........... 300 4,902
WSFS Financial Corp................. 355 15,098
--------
355,802
--------
Schools -- 0.4%
Adtalem Global Education, Inc.+..... 705 35,694
American Public Education, Inc.+.... 189 6,186
Cambium Learning Group, Inc.+....... 9,891 142,233
Career Education Corp.+............. 800 11,504
K12, Inc.+.......................... 433 9,270
Laureate Education, Inc., Class A+.. 984 14,652
Strategic Education, Inc............ 246 30,952
--------
250,491
--------
Security Services -- 0.1%
Brink's Co.......................... 592 39,261
--------
Seismic Data Collection -- 0.0%
Dawson Geophysical Co.+............. 248 1,392
ION Geophysical Corp.+.............. 125 1,476
--------
2,868
--------
Semiconductor Components-Integrated Circuits -- 0.2%
Cirrus Logic, Inc.+................. 721 26,994
Integrated Device Technology, Inc.+. 1,526 71,432
MaxLinear, Inc.+.................... 736 14,286
Power Integrations, Inc............. 337 18,980
--------
131,692
--------
Semiconductor Equipment -- 0.6%
ACM Research, Inc., Class A+........ 98 936
Advanced Energy Industries, Inc.+... 461 19,837
Aquantia Corp.+..................... 254 2,428
Axcelis Technologies, Inc.+......... 377 6,507
Brooks Automation, Inc.............. 818 25,383
Cabot Microelectronics Corp......... 300 29,286
Cohu, Inc........................... 466 9,693
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Semiconductor Equipment (continued)
Entegris, Inc................................... 1,671 $ 44,348
FormFactor, Inc.+............................... 870 10,649
inTEST Corp.+................................... 37,548 275,978
Nanometrics, Inc.+.............................. 268 8,592
Ultra Clean Holdings, Inc.+..................... 452 4,755
Veeco Instruments, Inc.+........................ 569 5,411
--------
443,803
--------
Steel Pipe & Tube -- 0.0%
Advanced Drainage Systems, Inc.................. 426 11,838
Northwest Pipe Co.+............................. 112 1,995
Omega Flex, Inc................................. 34 2,057
TimkenSteel Corp.+.............................. 471 5,478
--------
21,368
--------
Steel-Producers -- 0.1%
AK Steel Holding Corp.+......................... 3,708 13,719
Carpenter Technology Corp....................... 549 23,942
Commercial Metals Co............................ 1,371 26,131
Ryerson Holding Corp.+.......................... 187 1,717
Schnitzer Steel Industries, Inc., Class A....... 308 8,285
Shiloh Industries, Inc.+........................ 174 1,582
--------
75,376
--------
Steel-Specialty -- 0.5%
Allegheny Technologies, Inc.+................... 1,478 38,265
Universal Stainless & Alloy Products, Inc.+..... 14,979 294,188
--------
332,453
--------
Storage/Warehousing -- 0.0%
Mobile Mini, Inc................................ 523 21,506
--------
SupraNational Banks -- 0.0%
Banco Latinoamericano de Comercio Exterior SA,
Class E........................................ 360 6,178
--------
Telecom Equipment-Fiber Optics -- 0.2%
Acacia Communications, Inc.+.................... 322 11,099
Ciena Corp.+.................................... 1,687 52,736
Clearfield, Inc.+............................... 132 1,587
Finisar Corp.+.................................. 1,381 23,049
Harmonic, Inc.+................................. 980 5,400
KVH Industries, Inc.+........................... 190 2,346
Oclaro, Inc.+................................... 1,981 16,284
Viavi Solutions, Inc.+.......................... 2,676 30,854
--------
143,355
--------
Telecom Services -- 0.7%
Consolidated Communications Holdings, Inc....... 826 10,342
Fusion Connect, Inc.+........................... 252 627
GTT Communications, Inc.+....................... 500 17,950
HC2 Holdings, Inc.+............................. 501 2,605
Ooma, Inc.+..................................... 215 3,234
ORBCOMM, Inc.+.................................. 42,464 404,682
RigNet, Inc.+................................... 165 2,821
Spok Holdings, Inc.............................. 215 3,014
Vonage Holdings Corp.+.......................... 2,603 34,516
--------
479,791
--------
Telecommunication Equipment -- 0.1%
ADTRAN, Inc..................................... 564 7,580
Aerohive Networks, Inc.+........................ 391 1,498
61
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------------------
COMMON STOCKS (continued)
Telecommunication Equipment (continued)
Casa Systems, Inc.+................................ 319 $ 4,594
DASAN Zhone Solutions, Inc.+....................... 69 897
Maxar Technologies, Ltd............................ 667 9,945
Plantronics, Inc................................... 390 22,998
Preformed Line Products Co......................... 36 2,275
Quantenna Communications, Inc.+.................... 398 7,148
--------
56,935
--------
Telephone-Integrated -- 0.1%
Cincinnati Bell, Inc.+............................. 540 7,662
Frontier Communications Corp....................... 1,228 5,907
Shenandoah Telecommunications Co................... 550 20,911
Windstream Holdings, Inc.+......................... 480 1,978
--------
36,458
--------
Television -- 0.2%
Central European Media Enterprises, Ltd., Class A+. 1,014 3,427
Gray Television, Inc.+............................. 940 16,271
Nexstar Media Group, Inc., Class A................. 527 39,467
Sinclair Broadcast Group, Inc., Class A............ 849 24,315
TEGNA, Inc......................................... 2,553 29,462
World Wrestling Entertainment, Inc., Class A....... 506 36,731
--------
149,673
--------
Textile-Apparel -- 0.0%
Unifi, Inc.+....................................... 184 4,212
--------
Textile-Products -- 0.0%
Culp, Inc.......................................... 131 3,033
--------
Theaters -- 0.0%
AMC Entertainment Holdings, Inc., Class A.......... 612 11,787
National CineMedia, Inc............................ 908 8,127
Reading International, Inc., Class A+.............. 198 2,875
--------
22,789
--------
Therapeutics -- 0.1%
Akebia Therapeutics, Inc.+......................... 593 4,442
Anika Therapeutics, Inc.+.......................... 168 6,008
Fennec Pharmaceuticals, Inc.+...................... 137 997
Flexion Therapeutics, Inc.+........................ 395 5,348
G1 Therapeutics, Inc.+............................. 245 9,802
La Jolla Pharmaceutical Co.+....................... 252 4,108
MannKind Corp.+.................................... 1,649 3,018
Mersana Therapeutics, Inc.+........................ 148 925
Mirati Therapeutics, Inc.+......................... 237 8,857
Portola Pharmaceuticals, Inc.+..................... 766 15,082
Proteostasis Therapeutics, Inc.+................... 301 1,869
Recro Pharma, Inc.+................................ 207 1,337
Vital Therapies, Inc.+............................. 358 110
Xencor, Inc.+...................................... 544 17,800
Zafgen, Inc.+...................................... 359 3,486
--------
83,189
--------
Tobacco -- 0.7%
22nd Century Group, Inc.+.......................... 1,368 3,311
Pyxus International, Inc.+......................... 99 2,350
Turning Point Brands, Inc.......................... 11,017 452,799
Universal Corp..................................... 291 19,747
Vector Group, Ltd.................................. 1,206 16,305
--------
494,512
--------
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Toys -- 0.0%
Funko, Inc., Class A+......................... 124 $ 2,337
--------
Traffic Management Sys -- 0.0%
Arlo Technologies, Inc.+...................... 140 1,903
--------
Transactional Software -- 0.1%
ACI Worldwide, Inc.+.......................... 1,351 33,897
InnerWorkings, Inc.+.......................... 507 3,645
--------
37,542
--------
Transport-Air Freight -- 0.0%
Air Transport Services Group, Inc.+........... 687 13,465
Atlas Air Worldwide Holdings, Inc.+........... 279 14,402
--------
27,867
--------
Transport-Equipment & Leasing -- 0.1%
GATX Corp..................................... 443 33,194
General Finance Corp.+........................ 115 1,495
Greenbrier Cos., Inc.......................... 373 17,699
Willis Lease Finance Corp.+................... 36 1,246
--------
53,634
--------
Transport-Marine -- 0.2%
Ardmore Shipping Corp.+....................... 393 2,539
Costamare, Inc................................ 574 3,042
DHT Holdings, Inc............................. 1,082 5,442
Dorian LPG, Ltd.+............................. 326 2,592
Eagle Bulk Shipping, Inc.+.................... 562 2,804
Frontline, Ltd.+.............................. 905 6,471
GasLog, Ltd................................... 480 9,821
Genco Shipping & Trading, Ltd.+............... 115 1,267
Golar LNG, Ltd................................ 1,114 29,833
International Seaways, Inc.+.................. 256 5,507
Nordic American Tankers, Ltd.................. 1,651 4,276
Overseas Shipholding Group, Inc., Class A+.... 671 2,107
Safe Bulkers, Inc.+........................... 599 1,515
Scorpio Bulkers, Inc.......................... 685 4,357
Scorpio Tankers, Inc.......................... 3,456 6,186
Ship Finance International, Ltd............... 981 12,262
Teekay Corp................................... 807 5,350
Teekay Tankers, Ltd., Class A................. 2,250 2,498
Tidewater, Inc.+.............................. 282 7,572
--------
115,441
--------
Transport-Services -- 0.1%
CryoPort, Inc.+............................... 304 3,374
Echo Global Logistics, Inc.+.................. 329 8,459
Hub Group, Inc., Class A+..................... 385 17,641
Matson, Inc................................... 499 17,505
Radiant Logistics, Inc.+...................... 458 2,491
Universal Logistics Holdings, Inc............. 98 2,663
--------
52,133
--------
Transport-Truck -- 0.2%
ArcBest Corp.................................. 302 11,210
Covenant Transportation Group, Inc., Class A+. 145 3,629
Daseke, Inc.+................................. 483 2,937
Forward Air Corp.............................. 345 20,696
Heartland Express, Inc........................ 550 10,708
Marten Transport, Ltd......................... 460 8,860
P.A.M. Transportation Services, Inc.+......... 26 1,524
62
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
COMMON STOCKS (continued)
Transport-Truck (continued)
Saia, Inc.+................................... 302 $ 18,984
US Xpress Enterprises, Inc. Class A+.......... 247 2,379
USA Truck, Inc.+.............................. 93 1,829
Werner Enterprises, Inc....................... 563 18,123
YRC Worldwide, Inc.+.......................... 391 3,230
--------
104,109
--------
Travel Services -- 0.0%
Liberty TripAdvisor Holdings, Inc., Class A+.. 855 12,329
--------
Venture Capital -- 0.0%
Safeguard Scientifics, Inc.+.................. 227 1,941
--------
Veterinary Diagnostics -- 0.1%
Heska Corp.+.................................. 78 7,817
Neogen Corp.+................................. 592 35,946
--------
43,763
--------
Virtual Reality Products -- 0.0%
Vuzix Corp.+.................................. 277 1,684
--------
Vitamins & Nutrition Products -- 0.0%
Natural Grocers by Vitamin Cottage, Inc.+..... 106 1,921
Natural Health Trends Corp.................... 87 1,978
Nature's Sunshine Products, Inc.+............. 100 885
USANA Health Sciences, Inc.+.................. 149 17,436
--------
22,220
--------
Water -- 0.1%
American States Water Co...................... 431 26,386
Artesian Resources Corp., Class A............. 93 3,403
California Water Service Group................ 565 23,730
Connecticut Water Service, Inc................ 142 9,815
Consolidated Water Co., Ltd................... 173 2,128
Global Water Resources, Inc................... 127 1,415
Middlesex Water Co............................ 187 8,415
PICO Holdings, Inc............................ 238 2,718
SJW Group..................................... 203 12,328
York Water Co................................. 152 4,733
--------
95,071
--------
Water Treatment Systems -- 1.1%
AquaVenture Holdings, Ltd.+................... 128 2,144
Energy Recovery, Inc.+........................ 45,985 344,887
Evoqua Water Technologies Corp.+.............. 891 8,554
Pure Cycle Corp.+............................. 39,051 394,025
--------
749,610
--------
Web Hosting/Design -- 0.1%
Endurance International Group Holdings, Inc.+. 826 8,153
NIC, Inc...................................... 758 10,089
Q2 Holdings, Inc.+............................ 431 22,942
--------
41,184
--------
Web Portals/ISP -- 0.0%
Meet Group, Inc.+............................. 820 3,616
--------
Wire & Cable Products -- 0.1%
Belden, Inc................................... 476 25,728
Encore Wire Corp.............................. 240 10,608
Insteel Industries, Inc....................... 215 5,616
--------
41,952
--------
Shares/
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------------
Wireless Equipment -- 0.9%
CalAmp Corp.+.................................. 26,119 $ 520,813
Gogo, Inc.+.................................... 679 3,884
InterDigital, Inc.............................. 407 28,877
pdvWireless, Inc.+............................. 110 4,455
Ribbon Communications, Inc.+................... 620 4,216
ViaSat, Inc.+.................................. 652 41,571
-----------
603,816
-----------
Wound, Burn & Skin Care -- 0.0%
Dermira, Inc.+................................. 410 5,145
-----------
X-Ray Equipment -- 0.0%
Varex Imaging Corp.+........................... 449 11,656
ViewRay, Inc.+................................. 710 6,142
-----------
17,798
-----------
Total Common Stocks
(cost $56,486,991)............................ 63,050,832
-----------
EXCHANGE-TRADED FUNDS -- 2.0%
iShares Russell 2000 ETF....................... 8,814 1,322,365
Vanguard Russell 2000 ETF Shares............... 900 108,504
-----------
Total Exchange-Traded Funds
(cost $1,525,790)............................. 1,430,869
-----------
Total Long-Term Investment Securities
(cost $58,012,781)............................ 64,481,701
-----------
SHORT-TERM INVESTMENT SECURITIES -- 0.5%
U.S. Government Treasuries -- 0.5%
United States Treasury Bills
2.00% due 11/15/2018(3)....................... $ 100,000 99,918
2.04% due 11/29/2018(3)....................... 50,000 49,916
2.04% due 11/08/2018(3)....................... 60,000 59,975
2.12% due 12/27/2018(3)....................... 50,000 49,829
2.20% due 12/27/2018(3)....................... 50,000 49,829
-----------
Total Short-Term Investment Securities
(cost $309,487)............................... 309,467
-----------
REPURCHASE AGREEMENTS -- 6.9%
Agreement with Fixed Income Clearing Corp.,
bearing interest at 0.42%, dated 10/31/2018,
to be repurchased 11/01/2018 in the amount
of $4,865,057 and collateralized by
$5,210,000 of United States Treasury Bonds,
bearing interest at 3.00%, due 11/15/2044
and having an approximate value of
$4,963,192 (cost $4,865,000).................. 4,865,000 4,865,000
-----------
TOTAL INVESTMENTS
(cost $63,187,268)(4)......................... 99.0% 69,656,168
Other assets less liabilities.................... 1.0 720,109
---------- -----------
NET ASSETS 100.0% $70,376,277
========== ===========
--------
+ Non-income producing security
(1)Securities classified as Level 3 (see Note 3).
(2)Illiquid security. At October 31, 2018, the aggregate value of these
securities was $657 representing 0.0% of net assets.
(3)The security or a portion thereof was pledged as collateral to cover margin
requirements for open futures contracts.
(4)See Note 6 for cost of investments on a tax basis.
CVR -- Contingent Value Rights
63
SunAmerica Specialty Series -- AIG Small-Cap Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2018 -- (continued)
Futures Contracts
-----------------------------------------------------------------------------------------------
Unrealized
Number of Notional Notional Appreciation
Contracts Type Description Expiration Month Basis* Value* (Depreciation)
--------- ---- ----------- ---------------- -------- -------- --------------
70 Long E-Mini Russell 2000 Index December 2018 $5,967,985 $5,291,650 $(676,335)
=========
--------
* Notional basis refers to the contractual amount agreed upon at inception of
the open contract; notional value represents the current value of the open
contract.
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2018 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stocks:
Chemicals-Plastics.............. $ 34,738 $ -- $463 $ 35,201
Finance-Commercial.............. 16,763 -- 194 16,957
Medical-Biomedical/Gene......... 3,011,184 -- 0 3,011,184
Metal-Diversified............... 2,115 -- 0 2,115
Multimedia...................... 521,829 -- 0 521,829
Other Industries................ 59,463,546 -- -- 59,463,546
Exchange-Traded Funds............. 1,430,869 -- -- 1,430,869
Short-Term Investments Securities. -- 309,467 -- 309,467
Repurchase Agreements............. -- 4,865,000 -- 4,865,000
----------- ---------- ---- -----------
Total Investments at Value........ $64,481,044 $5,174,467 $657 $69,656,168
=========== ========== ==== ===========
LIABILITIES:
Other Financial Instruments:+
Futures Contracts................. $ 676,335 $ -- $ -- $ 676,335
=========== ========== ==== ===========
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
At the beginning and end of the reporting period, Level 3 investments in
securities were not considered a material portion of the Fund. There were no
transfers during the reporting period.
See Notes to Financial Statements
64
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018
Note 1. Organization
SunAmerica Specialty Series (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company and is organized as a Delaware Statutory Trust. The Trust
consists of six different investment funds (each a "Fund" and collectively,
the "Funds") as of October 31, 2018. Each Fund is managed by SunAmerica
Asset Management, LLC (the "Adviser" or "SunAmerica"). An investor may
invest in one or more of the following Funds: AIG Commodity Strategy Fund
(the "Commodity Strategy Fund"), AIG ESG Dividend Fund (the "ESG Dividend
Fund"), AIG Focused Alpha Large-Cap Fund (the "Focused Alpha Large-Cap
Fund"), AIG Focused Multi-Cap Growth Fund (the "Focused Multi-Cap Growth
Fund"), AIG Income Explorer Fund (the "Income Explorer Fund") and AIG
Small-Cap Fund ("the Small-Cap Fund").
The Funds are considered to be separate entities for financial and tax
reporting purposes. The investment objective and principal investment
techniques for each Fund are as follows:
The Commodity Strategy Fund seeks to provide long-term total return through
a strategy that is designed to provide diversified exposure to the
commodities markets. The Fund seeks to achieve its investment goal by
investing its assets in a combination of commodity-linked derivative
instruments and fixed income securities.
The ESG Dividend Fund seeks to provide total return including capital
appreciation and current income, employing a "buy and hold" strategy with up
to forty dividend yielding equity securities selected annually from the
Russell 1000(R) Index that meet the Fund's ESG standards.
The Focused Alpha Large-Cap Fund seeks to provide growth of capital through
active trading of equity securities to achieve a blend of growth companies,
value companies and companies that have elements of growth and value, issued
by large-cap companies. Under normal market conditions, the Fund will invest
at least 80% of its net assets, plus any borrowing for investment purposes,
in large-cap companies.
The Focused Multi-Cap Growth Fund seeks to provide growth of capital through
active trading of equity securities of large, small and mid-cap companies.
The Income Explorer Fund seeks to provide high current income with a
secondary objective of capital appreciation primarily by strategically
allocating its assets among a preferred securities strategy, closed-end fund
strategy and global dividend equity strategy. Through this combination of
investments, the Fund expects to gain exposure to a broad range of
income-producing investments, including both fixed income and equity
securities.
The Small-Cap Fund seeks to provide long-term growth of capital by
strategically allocating its assets between a small-cap index strategy and a
micro-cap growth strategy.
Each Fund, except for the Focused Alpha Large-Cap Fund and Focused Multi-Cap
Growth Fund, is a "diversified" Fund within the meaning of the 1940 Act.
Each Fund offers multiple classes of shares of beneficial interest. The
classes within each Fund are presented in the Statement of Assets and
Liabilities. The cost structure for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, any purchases of Class A shares in excess of
$1,000,000 will be purchased at net asset value but will be subject to a
contingent deferred sales charge on redemptions made within two years of
purchase.
Class C shares are offered at net asset value and may be subject to a
contingent deferred sales charge on redemptions made within 12 months of
purchase.
65
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
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.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Funds'
registration statement. Class A and Class C shares make distribution and
account maintenance fee payments under a distribution plan pursuant to Rule
12b-1 under the 1940 Act, with Class C shares being subject to higher
distribution fee rates. Class W shares have not adopted 12b-1 Plans and make
no payments thereunder, however, Class W shares pay a service fee to the
Funds' distributor for administrative and shareholder services.
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. Basis for consolidation for the SunAmerica Commodity Strategy Cayman
Fund Ltd.
The AIG Commodity Strategy Cayman Fund Ltd. (the "Commodity Strategy
Subsidiary"), a Cayman Islands exempted company, was incorporated on
October 20, 2008, and is a wholly-owned subsidiary of the Commodity Strategy
Fund. The Commodity Strategy Subsidiary commenced operations on May 22, 2009
and was organized as a wholly-owned subsidiary of the Commodity Strategy
Fund in order to effect certain investments on behalf of the Commodity
Strategy Fund consistent with the investment objectives and policies in the
Commodity Strategy Fund's prospectus and statement of additional
information. With respect to its investments, the Commodity Strategy
Subsidiary will generally be subject to the same fundamental,
non-fundamental and certain other investment restrictions as the Commodity
Strategy Fund; however, the Commodity Strategy Subsidiary (unlike the
Commodity Strategy Fund) may invest without limitation in commodity-linked
swap agreements and other commodity-linked derivative instruments that may
otherwise be limited if purchased by the Commodity Strategy Fund due to
federal tax requirements relating to qualifying income. The Commodity
Strategy Fund and Commodity Strategy Subsidiary may test for compliance with
certain investment restrictions on a consolidated basis, except that with
respect to its investment in certain securities that may involve leverage,
the Commodity Strategy Subsidiary will comply with asset segregation or
"earmarking" requirements to the same extent as the Commodity Strategy Fund.
The Commodity Strategy Fund may invest up to 25% of its assets in the
Commodity Strategy Subsidiary. As of October 31, 2018, net assets of the
Commodity Strategy Fund were $36,382,587, of which approximately $6,690,269,
or approximately 18.4%, represented the Commodity Strategy Fund's ownership
of all issued shares and voting rights of the Commodity Strategy Subsidiary.
Note 3. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those
estimates and those differences could be significant. The Funds are
considered investment companies under GAAP and follow the accounting and
reporting guidance applicable to investment companies. 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
66
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
based on market data obtained from sources independent of the reporting
entity. Unobservable inputs are inputs that reflect the reporting entity's
own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
referenced indices, quoted prices in inactive markets, adjusted quoted
prices in active markets, adjusted quoted prices
on foreign equity securities that were adjusted in accordance with pricing
procedures approved by the Board of Trustees (the "Board") , etc.)
Level 3 -- Significant unobservable inputs (includes inputs that reflect the
Funds' own assumptions about the assumptions market participants would use
in pricing the security, developed based on the best information available
under the circumstances)
Changes in valuation techniques may result in transfers in or out of an
investment's assigned Level within the hierarchy. The methodology used for
valuing investments is not necessarily an indication of the risk associated
with investing in those investments and the determination of the
significance of a particular input to the fair value measurement in its
entirety requires judgment and consideration of factors specific to each
security.
The availability of observable inputs can vary from security to security and
is affected by a wide variety of factors, including, for example, the type
of security, whether the security is recently issued and not yet established
in the marketplace, the liquidity of markets, and other characteristics
particular to the security. To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree
of judgment exercised in determining fair value is greatest for instruments
categorized in Level 3.
The summary of the Funds' assets and liabilities classified in the fair
value hierarchy as of October 31, 2018 is reported on a schedule at the end
of 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 services may
use valuation models or matrix pricing which considers information with
respect to comparable bond and note transactions, quotations from bond
dealers, or by reference to other securities that are considered comparable
in such characteristics as rating, interest rate, maturity date, option
67
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
adjusted spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, the securities may be priced at the mean of
two independent quotes obtained from brokers.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the last sales price or official closing price as of the close of the
customary trading session on the exchange where the security is principally
traded. Investments in registered investment companies are generally
categorized as Level 1.
Futures contracts traded on national securities exchanges are valued at the
quoted daily settlement price established by the exchange on which they
trade reported by a Board-approved pricing service, and are generally
categorized as Level 1. Option contracts traded on national securities
exchanges are valued at the mean of the last bid and ask price reported by a
Board-approved pricing service as of the close of the exchange on which they
are traded, and are generally categorized as Level 1.
Option contracts traded in the over-the-counter ("OTC") market are valued at
the mid valuation provided by a Board-approved pricing service, and are
generally categorized as Level 2. Swap contracts traded on national
securities exchanges are valued at the closing price of the exchange on
which they are traded or if a closing price of the exchange is not
available, the swap will be valued using a mid valuation provided by a
Board-approved pricing service, and are generally categorized as Level 2.
Swap contracts traded over the counter are valued at a mid valuation
provided by a Board-approved pricing service, and are generally categorized
as Level 2. 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 OTC market, and are generally categorized as Level 1 or Level 2.
The Board is responsible for the share valuation process and has adopted
policies and procedures (the "PRC Procedures") for valuing the securities
and other assets held by the Funds, including procedures for the fair
valuation of securities and other assets for which market quotations are not
readily available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the Trust's
fair valuation procedures. Securities for which market quotations are not
readily available or the values of which may be significantly impacted by
the occurrence of developments or significant events are generally
categorized as Level 3. There is no single standard for making fair value
determinations, which may result in prices that vary from those of other
funds.
Derivative Instruments:
Futures: During the period, the Commodity Strategy Fund entered into futures
transactions for investment purposes in order to provide exposure to
commodities. The Small-Cap Fund entered into futures transactions for
investment purposes in order to provide exposure to U.S and non-U.S. equity
markets.
A futures contract is an agreement between two parties to buy and sell a
financial instrument at a set price on a future date. Upon entering into a
futures transaction, a Fund will be required to segregate an initial margin
payment of cash or other liquid securities with the futures commission
merchant (the "broker"). Subsequent payments are made or received by a Fund
as a result of changes in the value of the contract and/or changes in the
value of the initial margin requirement. Such receipts or payments are
recorded in the Statements of Assets and Liabilities as variation margin for
changes in the value of the contracts and as cash collateral for futures
contracts for the changes in the value of the initial margin requirement.
When a contract is closed, a Fund records a realized gain or loss 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.
The primary risk to a Fund of entering into futures contracts is market
risk. Market risk is the risk that there will be an unfavorable change in
the interest rate, value or currency rate of the underlying security or
securities. Futures contracts involve, to varying degrees, risk of loss in
excess of the variation margin. There may also be trading restrictions or
limitations imposed by
68
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
an exchange, and government regulations may restrict trading in futures
contracts. While a Fund will generally only purchase exchange-traded
futures, due to market conditions, there may not always be a liquid
secondary market for a futures contract and, as a result, the Fund may be
unable to close out its futures contracts at a time which is advantageous.
In addition, if a Fund has insufficient cash to meet margin requirements,
the Fund may need to sell other investments, including at disadvantageous
times. There is generally minimal counterparty credit risk to a Fund since
exchange-traded futures contracts are centrally cleared.
Futures contracts outstanding at the end of the period, if any, are reported
on a schedule at the end of each Fund's Portfolio of Investments.
Forward Foreign Currency Contracts: During the period, the Income Explorer
Fund used forward contracts for investment purposes in order to gain
currency exposure.
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.
For federal income tax purposes, the Income Explorer Fund has made an
election to treat gains and losses from forward foreign currency contracts
as capital gains and losses.
Risks to a Fund 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 Statement of Assets and Liabilities.
Illiquidity risk arises because the secondary market for forwards may have
less liquidity relative to markets for other securities. Currency
transactions are also subject to risks different from those of other
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 at the end of each Fund's Portfolio of
Investments.
Options: During the period, the Commodity Strategy Fund used options
contracts to provide exposure to commodities.
An option is a contract conveying a right to buy or sell a financial
instrument at a specified price during a stipulated period. When a Fund
writes a call or a put option, it receives a premium which is equal to the
current market value of the option written. The premiums on written options
are recorded as a liability on the Statement of Assets and Liabilities. If a
Fund purchases a call or a put option, it pays a premium which reflects the
current market value of the option and which is included on the Fund's
Statement of Assets and Liabilities as an investment. The option position is
marked to market daily and its value fluctuates based upon the value of the
underlying financial instrument, time to expiration, cost of borrowing
funds, and volatility of the value of the underlying financial instrument.
If an option which a Fund has written either expires on its stipulated
expiration date, or if the Fund enters into a closing purchase transaction,
the Fund realizes a gain (or loss if the cost of a closing purchase
transaction exceeds the premium received when the option was written)
without regard to any unrealized gain or loss on the underlying security,
and the liability related to such options is extinguished. If a call option
which a Fund has written is exercised, the Fund realizes a gain or loss from
the sale of the underlying security and the proceeds from such sale are
increased by the premium originally received. If a put option which a Fund
has written is exercised, the amount of the premium originally received
reduces the cost of the security which the Fund purchased upon exercise of
the option. Options may be traded on a national securities exchange or in
the OTC market.
69
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
Risks to the Funds of entering into option contracts include counterparty
risk, market risk and, with respect to OTC options, illiquidity risk.
Counterparty risk arises from the potential inability of counterparties to
meet the terms of their contracts. If the counterparty defaults, the Fund's
loss will consist of the net amount of contractual payments that the Fund
has not yet received. Market risk is the risk that there will be an
unfavorable change in the value of the underlying securities, and for
written options, may result in losses in excess of the amounts shown on the
statement and assets and liabilities. There is also the risk a Fund may not
be able to enter into a closing transaction because of an illiquid market.
In addition, unlisted options are not traded on an exchange and may not be
as actively traded as listed options, making the valuation of such
securities more difficult. An unlisted option also entails a greater risk
that the party on the other side of the option transaction may default,
which would make it impossible to close out an unlisted option position in
some cases, and profits related to the transaction lost thereby.
Option contracts outstanding at the end of the period, if any, are reported
on a schedule at the end of each Fund's Portfolio of Investments.
Swap Contracts: Certain Funds may enter into credit default, interest rate
and/or total return swap contracts. Swap contracts are privately negotiated
in the OTC market and may be entered into as a bilateral contract or a
centrally cleared contract ("centrally cleared swaps"). In a centrally
cleared swap, immediately following execution of the swap contract, the swap
contract is novated to a central counterparty (the "CCP") and a Fund faces
the CCP through a broker. Upon entering into a centrally cleared swap, a
Fund is required to deposit initial margin with the broker in the form of
cash or securities in an amount that varies depending on the size and risk
profile of the particular swap. Securities deposited as initial margin are
designated on the Portfolio of Investments and cash deposited is recorded on
the Statement of Assets and Liabilities as cash collateral for centrally
cleared swap contracts. Unlike a bilateral swap contract, for centrally
cleared swaps, a Fund has no credit exposure to the counterparty as the CCP
stands between the Fund and the counterparty. Swaps are marked-to-market
daily and the changes in value are recorded as an unrealized gain (loss).
The daily change in valuation of swap contracts, if any, is recorded as
unrealized appreciation (depreciation) on swap contracts. When the swap is
terminated, a Fund will record a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction
and the Fund's basis in the contract, if any. Generally, the basis of the
contracts is the premium received or paid. Upfront payments and receipts on
swap contracts are amortized on a daily basis. Net periodic payments made or
received by a Fund are included as part of realized gain (loss).
Total Return Swaps: During the period, the Commodity Strategy Fund used
total return swaps for investment purposes in order to provide exposure to
commodities.
Total return swaps give a Fund the right to receive the appreciation in the
value of a specified security, index or other instrument in return for a fee
paid to the counterparty, which will typically be an agreed upon interest
rate. If the underlying asset in a total return swap declines in value over
the term of the swap, a Fund may also be required to pay the dollar value of
that decline to the counterparty.
The Fund will generally enter into total return swaps only on a net basis,
which means that the two payment streams are netted against each other, with
the Fund receiving or paying, as the case may be, only the net amount of the
two payments. Payments may be made at the conclusion of a total return swap
contract or periodically during its term. Total return swaps normally do not
involve the delivery of securities or other underlying assets. Accordingly,
the risk of loss with respect to total return swaps is normally limited to
the net amount of payments that the Fund is contractually obligated to make.
If the counterparty to a total return swap defaults, the Fund's risk of loss
consists of the net discounted amount of payments that the Fund is
contractually entitled to receive, if any.
Total return swap contracts outstanding at the end of the period, if any,
are reported on a schedule at the end of the Fund's Portfolio of Investments.
Risks of Entering into Swap Agreements: Risks to a Fund of entering into
credit default swaps, total return swaps and interest rate swaps, include
credit risk, market risk, counterparty risk, liquidity risk and
documentation risk. By entering into swap agreements, a Fund may be exposed
to risk of potential loss due to unfavorable changes in interest rates, the
price of the underlying security or index, or the underlying referenced
asset's perceived or actual credit, that the counterparty may default on its
obligation to perform or the possibility that there is no liquid market for
these agreements. There is also the risk that the parties may disagree as to
the
70
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
meaning of contractual terms in the swap agreement. In addition, to the
extent that a subadviser does not accurately analyze and predict the
underlying economic factors influencing the value of the swap, a Fund may
suffer a loss, which may be in excess of the amount reflected on the
statement of assets and liabilities.
Risks of Commodity-Linked Derivatives: Commodity-linked derivatives are
derivative instruments, the value of which is primarily linked to the price
movement of a commodity, commodity index or commodity futures or option
contract. The commodity-linked derivative instruments in which certain of
the Funds invest have substantial risks, including risk of loss of a
significant portion of their principal value. Commodity-linked derivative
instruments may be more volatile and less liquid than the underlying
instruments and their value will be affected by the performance of the
commodity markets, as well as economic and other regulatory or political
developments, overall market movements and other factors. Typically, the
return of the commodity-linked swaps will be based on some multiple of the
performance of an index. The multiple (or leverage) will magnify the
positive and negative return the Fund earns from these swaps as compared to
the index.
Master Agreements: Certain Funds that hold derivative instruments and other
financial instruments may be a party to ISDA (International Swap and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern such
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 a 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 a Fund's net assets below a specified level over a certain period
of time. Additional termination events applicable to counterparties may
occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments outstanding pursuant to a particular Master Agreement,
including the payment of any losses and costs resulting from such early
termination, as reasonably determined by the terminating party. Any decision
by one or more of a Fund's counterparties to elect early termination could
cause a Fund to accelerate the payment of liabilities, which settlement
amounts could be in excess of the amount of assets that are already posted
as collateral. Typically, the Master Agreement will permit a single net
payment in the event of default. Note, however, that bankruptcy or
insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset in bankruptcy, insolvency or other
events. As a result, the early termination with respect to derivative
instruments subject to Master Agreements that are in a net liability
position could be material to a Fund's financial statements. The Funds do
not offset derivative assets and derivative liabilities that are subject to
netting arrangements in the Statement of Assets and Liabilities.
The following tables represent the value of derivatives held as of October
31, 2018, by their primary underlying risk exposure and the respective
location on the Statement of Assets and Liabilities and the effect of
derivatives on the Statement of Operations for the year ended October 31,
2018. 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 October 31, 2018, please refer to a schedule at the
end of each Fund's Portfolio of Investments.
71
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
Asset Derivatives
-----------------------------------------------------------------------------------------------
Interest Foreign
Rate Equity Exchange
Contracts Contracts Commodity Contracts Contracts
--------------- --------------- ----------------------------------------- ------------
Foreign
Futures Futures Futures Options Swap Exchange
Fund Contracts(1)(8) Contracts(1)(8) Contracts(1)(8) Purchased(2) Contracts(6) Contracts(3) Total
---- --------------- --------------- --------------- ------------ ------------ ------------ --------
Commodity Strategy#. $-- $ -- $113,133 $21,285 $ -- $-- $134,418
Income Explorer..... -- -- -- -- -- -- --
Small-Cap........... -- -- -- -- -- -- --
Liability Derivatives
-----------------------------------------------------------------------------------------------
Interest Foreign
Rate Equity Exchange
Contracts Contracts Commodity Contracts Contracts
--------------- --------------- ----------------------------------------- ------------
Foreign
Futures Futures Futures Options Swap Exchange
Fund Contracts(1)(8) Contracts(1)(8) Contracts(1)(8) Written(4) Contracts(7) Contracts(5) Total
---- --------------- --------------- --------------- ------------ ------------ ------------ --------
Commodity Strategy#. $-- $ -- $257,900 $ 10 $36,027 $-- $293,937
Income Explorer..... -- -- -- -- -- -- --
Small-Cap........... -- 350 -- -- -- -- 350
--------
Statement of Assets and Liabilities Location:
(1)Variation margin on futures contracts
(2)Investments, at value
(3)Unrealized appreciation on forward foreign currency contracts
(4)Call and put options written, at value
(5)Unrealized depreciation on forward foreign currency contracts
(6)Unrealized appreciation on swap contracts
(7)Unrealized depreciation on swap contracts
(8)The variation margin on futures contracts is included in the cumulative
unrealized appreciation (depreciation) as reported on each Fund's Portfolio
of Investments in the following amounts:
Cumulative
Unrealized
Appreciation
Fund (Depreciation)
---- --------------
Commodity Strategy#. $(1,266,601)
Small-Cap........... (676,335)
--------
# Consolidated (see Note 2)
72
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
Realized Gain (Loss) on Derivatives Recognized in Statement of Operations
----------------------------------------------------------------------------------------------------
Interest Foreign
Rate Equity Exchange
Contracts Contracts Commodity Contracts Contracts
------------ ------------ ---------------------------------------- ------------
Foreign
Futures Futures Futures Swap Exchange
Fund Contracts(1) Contracts(1) Contracts(1) Options* Contracts(2) Contracts(3) Total
---- ------------ ------------ ------------ -------- ------------ ------------ -----------
Commodity Strategy#. $-- $ -- $ 714,477 $(40,485) $(729,534) $ -- $ (55,542)
Income Explorer..... -- -- -- -- -- 17,067 17,067
Small-Cap........... -- 409,520 -- -- -- -- 409,520
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Statement of Operations
----------------------------------------------------------------------------------------------------
Interest Foreign
Rate Equity Exchange
Contracts Contracts Commodity Contracts Contracts
------------ ------------ ---------------------------------------- ------------
Foreign
Futures Futures Futures Swap Exchange
Fund Contracts(4) Contracts(4) Contracts(4) Options* Contracts(5) Contracts(6) Total
---- ------------ ------------ ------------ -------- ------------ ------------ -----------
Commodity Strategy#. $-- $ -- $(1,537,358) $ (7,471) $ (30,625) $ -- $(1,575,454)
Income Explorer..... -- -- -- -- -- (1,953) (1,953)
Small-Cap........... -- (676,335) -- -- -- -- (676,335)
--------
* Includes amounts relating to purchased and written options as follows:
Change in Unrealized
Realized Gain (Loss) on Appreciation (Depreciation) on
Derivatives Recognized in Derivatives Recognized in
Statement of Operations Statement of Operations
------------------------- ------------------------------
Commodity Contracts Commodity Contracts
------------------------- ------------------------------
Options Options Options Options
Purchased(7) Written(8) Purchased(9) Written(10)
------------ ---------- ------------ -----------
Commodity Strategy#. $(55,613) $15,128 $(9,443) $1,972
--------
Statement of Operations Location:
(1)Net realized gain (loss) on futures contracts
(2)Net realized gain (loss) on swap contracts
(3)Net realized gain (loss) on forward contracts
(4)Change in unrealized appreciation (depreciation) on futures contracts
(5)Change in unrealized appreciation (depreciation) on swap contracts
(6)Change in unrealized appreciation (depreciation) on forward contracts
(7)Net realized gain (loss) on investments
(8)Net realized gain (loss) on written options contracts
(9)Change in unrealized appreciation (depreciation) on investments
(10)Change in unrealized appreciation (depreciation) on written options
contracts
# Consolidated (see Note 2)
The following table represents the average monthly balances of derivatives
held during the period ended October 31, 2018.
Average Amount Outstanding During the Period
--------------------------------------------------------------------------------------------------
Foreign Purchased Call Purchased Put Written Call Written Put
Futures Exchange Options Options Total Return Option Option
Fund Contracts(2) Contracts(2) Contracts(1) Contracts(1) Swap Contracts(1) Contracts(1) Contracts(1)
---- ------------ ------------ -------------- ------------- ----------------- ------------ ------------
Commodity Strategy#. $40,374,396 $ -- $41,959 $1,445 $16,413,770 $1,478 $131
Income Explorer..... -- 223,485 -- -- --
Small-Cap........... 3,083,020 -- -- -- --
--------
(1)Amounts represent values in US dollars.
(2)Amounts represent notional amounts in US dollars.
# Consolidated (see Note 2)
73
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
The following tables set forth the Funds' derivative assets and liabilities
by counterparty, net of amount available for offset under Master Agreements
and net of related collateral pledged/(received) as of October 31, 2018. The
repurchase agreements held by the Funds as of October 31, 2018 are subject
to Master Agreements but are not included in the following tables. See the
Portfolio of Investments and Notes to the Financial Statements for more
information about the Funds' holdings in repurchase agreements.
AIG Commodity Strategy Fund#
-----------------------------------------------------------------------
Derivative Assets(1) Derivative Liabilities(1)
----------------------------------- -----------------------------------
Forward Forward Net
Foreign Foreign Derivative Collateral
Currency Options Currency Options Assets Pledged/ Net
Counterparty Contracts OTC Swaps Purchased Total Contracts OTC Swaps Written Total (Liabilities) (Received)(2) Amount(3)
------------ --------- --------- --------- ----- --------- --------- ------- ------- ------------- ------------- ---------
Goldman Sachs
International. $-- $-- $-- $-- $-- $36,027 $-- $36,027 $(36,027) $-- $(36,027)
========= ========= ========= ===== ========= ========= ======= ======= ============= ============= =========
--------
(1)Gross amounts of recognized assets and liabilities not offset in the
Statement of Assets and Liabilities.
(2)For each respective counterparty, collateral pledged or (received) is
limited to an amount not to exceed 100% of the derivative asset/liability in
the table above.
(3)Net amount represents the net amount due (to)/from counterparty in the event
of a default based on the contractual set-off rights under the agreement.
# Consolidated (see Note 2)
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from the Securities and Exchange Commission ("SEC"), may
transfer uninvested cash balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. In a
repurchase agreement, the seller of a security agrees to repurchase the
security at a mutually agreed-upon time and price, which reflects the
effective rate of return for the term of the agreement. For repurchase
agreements and joint repurchase agreements, the Funds' custodian takes
possession of the collateral pledged for investments in such repurchase
agreements ("repo" or collectively "repos"). The underlying collateral is
valued daily on a mark to market basis, plus accrued interest to ensure that
the value, at the time the agreement is entered into, is equal to at least
102% of the repurchase price, including accrued interest. In the event of
default of the obligation to repurchase, 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 October 31, 2018, the following Fund held an undivided interest in the
joint repurchase agreement with Bank of America Securities LLC:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 5.62% $2,810,000
Commodity Strategy Subsidiary. 2.18 1,090,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Bank of America Securities LLC, dated October 31, 2018, bearing interest at
a rate of 2.18% per annum, with a principal amount of $50,000,000, a
repurchase price of $50,003,028, and a maturity date of November 1, 2018.
The repurchase agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Bonds. 3.13% 08/15/2044 $53,264,000 $51,523,693
74
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
As of October 31 2018, the following Funds held an undivided interest in the
joint repurchase agreement with Barclays Capital, Inc:
Percentage Principal
Fund Ownership Amount
---- ---------- ---------
Commodity Strategy............ 5.60% $840,000
Commodity Strategy Subsidiary. 2.13 320,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Barclays Capital, Inc., dated October 31, 2018, bearing interest at a rate
of 2.19% per annum, with a principal amount of $15,000,000, a repurchase
price of $15,000,913, and a maturity date of November 1, 2018. The
repurchase agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Bonds. 3.38% 05/15/2044 $15,074,000 $15,366,724
As of October 31, 2018, the following Funds held an undivided interest in
the joint repurchase agreement with BNP Paribas SA:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 5.60% $2,800,000
Commodity Strategy Subsidiary. 2.14 1,070,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
BNP Paribas SA, dated October 31, 2018, bearing interest at a rate of 2.19%
per annum, with a principal amount of $50,000,000, a repurchase price of
$50,003,042, and a maturity date of November 1, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 2.13% 11/30/2024 $53,263,800 $51,162,010
As of October 31, 2018, the following Funds held an undivided interest in
the joint repurchase agreement with Deutsche Bank AG:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 5.60% $2,735,000
Commodity Strategy Subsidiary. 2.14 1,045,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Deutsche Bank AG, dated October 31, 2018, bearing interest at a rate of
2.19% per annum, with a principal amount of $48,835,000, a repurchase price
of $48,837,971, and a maturity date of November 1, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 1.88% 04/30/2022 $51,690,000 $49,909,776
75
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
As of October 31, 2018, the following Funds held an undivided interest in
the joint repurchase agreement with RBS Securities, Inc.:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 5.60% $2,800,000
Commodity Strategy Subsidiary. 2.14 1,070,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
RBS Securities, Inc., dated October 31, 2018, bearing interest at a rate of
2.18% per annum, with a principal amount of $50,000,000, a repurchase price
of $50,003,028, and a maturity date of November 1, 2018. The repurchase
agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 2.88% 05/15/2028 $51,345,000 $51,052,173
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Securities transactions are recorded on a
trade date basis. Realized gains and losses on sales of investments are
calculated on the identified cost basis.
Interest income is accrued daily from settlement date except when collection
is not expected. For financial statement purposes, the Funds amortize all
premiums and accrete all discounts on fixed income securities. 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.
Securities purchased or sold on a when-issued or forward commitment basis
outstanding at the end of the period, if any, are included in investments
purchased/sold on an extended settlement basis in the Statement of Assets
and Liabilities.
Distributions received from Real Estate Investment Trusts ("REIT")
investments are recharacterized based on information provided by the REIT
into the following categories: ordinary income, long-term and short-term
capital gains and return of capital. If information is not available on a
timely basis from the REIT, the recharacterization will be based on
available information which may include the previous year's allocation. If
new or additional information becomes available from the REIT at a later
date, a recharacterization will be made in the following year. The amount
recharacterized as ordinary income is recorded as dividend income and the
amount recharacterized as capital gain is recorded as realized gain in the
Statement of Operations. The amount recharacterized as return of capital is
recorded as a reduction to the cost of investments in the Statement of
Assets and Liabilities. These recharacterizations are reflected in the
accompanying financial statements.
Expenses common to all Funds are allocated among the Funds based on relative
net assets or other appropriate methods. In all other respects, expenses are
charged to each Fund as incurred on a specific identification basis.
Net investment income, 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 (or the value
of dividend-eligible shares, as appropriate) of each class of shares at the
beginning of the day (after adjusting for the current capital share activity
of the respective class).
Dividends from net investment income, if any, are normally paid monthly for
the Income Explorer Fund and quarterly for the ESG Dividend Fund. All other
Funds pay annually. Each of the Funds reserves the right to declare and pay
dividends less frequently than disclosed above, provided that the net
realized capital gains and the net investment income, if any, are paid at
least annually. The Funds record dividends and distributions to their
shareholders on the ex-dividend date.
76
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the capital accounts at fiscal year end based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net assets
are not affected by these reclassifications.
Each Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income, including any net capital gains on investments, to its
shareholders. Each Fund also intends to distribute sufficient net investment
income and net capital gains, if any, so that each Fund will not be subject
to excise tax on undistributed income and gains. Therefore, no federal
income tax or excise tax provision is required.
Each Fund recognizes the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed each Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2015 -2017 or expected to be taken in each Funds' 2018 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 2015.
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.
Organization and Offering Costs: Organization costs incurred in connection
with the commencement of the ESG Dividend Fund are expensed, while offering
costs are reflected as "Deferred offering costs" in the Statement of Assets
and Liabilities of the Fund, and amortized over a 12-month period. As of
October 31, 2018, the deferred offering costs of the ESG Dividend Fund were
fully amortized.
New Accounting Pronouncements: In August 2018, the SEC adopted amendments to
certain financial statement disclosure requirements of Regulation S-X to
conform them to GAAP for investment companies. The final rule became
effective on November 5, 2018. All required changes have been made in
accordance with Regulation S-X.
In August 2018, the FASB issued Accounting Standards Update ("ASU") No.
2018-13 "Disclosure Framework - Changes to the Disclosure Requirements for
Fair Value Measurement". The ASU eliminates, modifies, and adds disclosure
requirements for fair value measurements and is effective for fiscal years,
and interim periods within those fiscal years, beginning after December 15,
2019. The ASU allows for early adoption of either the entire standard or
only the provisions that eliminate or modify the requirements. Management
has elected to early adopt the provisions that eliminate disclosure
requirements and is still evaluating the impact of applying the rest of the
ASU.
Note 4. Investment Advisory and Management Agreements, Distribution and Service
Agreements
The Trust, on behalf of each Fund, has entered into Investment Advisory and
Management Agreements (the "Agreements") with SunAmerica. Under the
Agreements, SunAmerica provides continuous supervision of each Fund's
portfolio and administrative
77
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
affairs, subject to general review by the Board. In connection therewith,
SunAmerica furnishes the Funds with office facilities, maintains certain of
the Funds' books and records, pays the salaries and expenses of all
personnel, including officers of the Funds who are employees of SunAmerica
and its affiliates and oversees the performance of services provided to the
Funds by third parties. Pursuant to the Agreements, the Funds pay SunAmerica
a management fee at an annual rate based on average daily net assets, which
is computed daily and payable monthly, as follows:
Fund Percentage
---- ----------
Commodity Strategy....... 1.00%
ESG Dividend............. 0.75
Focused Alpha Large-Cap.. 1.00
Focused Multi-Cap Growth. 1.00
Income Explorer.......... 1.00
Small-Cap................ 1.00
The Commodity Strategy Subsidiary has entered into a separate contract with
SunAmerica whereby SunAmerica provides investment advisory and other
services to the Commodity Strategy Subsidiary. In consideration of these
services, the Commodity Strategy Subsidiary pays SunAmerica a management fee
at the annual rate of 1.00% of average daily net assets of the Commodity
Strategy Subsidiary. SunAmerica has contractually agreed to waive the
management fee it receives from the Commodity Strategy Fund in an amount
equal to the management fee paid by the Commodity Strategy Subsidiary to
SunAmerica (the "Commodity Strategy Subsidiary management fee waiver"). This
waiver may not be terminated by SunAmerica, and will remain in effect for as
long as SunAmerica's contract with the Commodity Strategy Subsidiary is in
place. For the year ended October 31, 2018, the amount of advisory fees
waived was $78,344.
Pursuant to the Subadvisory Agreement between SunAmerica and Wellington
Management Company LLP ("Wellington") (the "Commodity Strategy Subadvisory
Agreement"), SunAmerica has delegated portfolio management responsibilities
of the Commodity Strategy Fund to Wellington. Pursuant to a Subadvisory
Agreement between SunAmerica and Wellington with respect to the Commodity
Strategy Subsidiary, SunAmerica has delegated portfolio management
responsibilities of the Commodity Strategy Subsidiary to Wellington.
Payments to Wellington for its services are made by SunAmerica, not by the
Fund.
Pursuant to the Subadvisory Agreement between SunAmerica and Marsico Capital
Management, LLC ("Marsico") and the Subadvisory Agreement between SunAmerica
and Blackrock Investment Management, LLC ("Blackrock"), SunAmerica has
delegated portfolio management responsibilities of the Focused Alpha
Large-Cap Fund to Marsico and Blackrock. Each Subadviser is paid by
SunAmerica and not the Fund.
Pursuant to the Subadvisory Agreement between SunAmerica and Marsico, and
the Subadvisory Agreement between SunAmerica and BAMCO, Inc. ("BAMCO"),
SunAmerica has delegated portfolio management responsibilities of the
Focused Multi-Cap Growth Fund to Marsico and BAMCO. Each subadviser is paid
by SunAmerica and not the Fund.
Pursuant to the Subadvisory Agreement between SunAmerica and Cohen & Steers
Capital Management, Inc. ("Cohen & Steers"), SunAmerica has delegated a
portion of portfolio management responsibilities of the Income Explorer Fund
to Cohen & Steers. Cohen and Steers is paid by SunAmerica and not by the
Fund.
Pursuant to the Subadvisory Agreement between SunAmerica and Cadence Capital
Management, LLC ("Cadence"), SunAmerica has delegated a portion of portfolio
management responsibilities of the Small-Cap Fund to Cadence. Cadence is
paid by SunAmerica and not by the Fund.
Effective November 19, 2018, pursuant to an Advisory Fee Wavier Agreement
with Focused Multi-Cap Growth Fund and Small-Cap Fund, SunAmerica is
contractually obligated to waive its advisory fee so that the advisory fee
equals 0.90% and 0.85%, respectively, of average daily net assets of each of
the Funds.
78
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
SunAmerica has contractually agreed to waive fees and/or reimburse expenses
to the extent necessary to cap the Funds' annual Fund operating expense at
the following percentages of each Class's average daily net assets. For the
purposes of waived fee and/or reimbursed expense calculations, annual Fund
operating expenses shall not include extraordinary expenses (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
expense fee waivers and expense reimbursements will continue in effect
indefinitely, unless terminated by the Trustees, including a majority of the
Disinterested Trustees.
Fund Percentage
---- ----------
Commodity Strategy Class A#...... 1.72%
Commodity Strategy Class C#...... 2.37
Commodity Strategy Class W#...... 1.52
ESG Dividend Class A............. 1.25
ESG Dividend Class C............. 1.90
ESG Dividend Class W............. 1.05
Focused Alpha Large-Cap Class A.. 1.72
Focused Alpha Large-Cap Class C.. 2.37
Focused Alpha Large-Cap Class W.. 1.52
Focused Multi-Cap Growth Class A. 1.72
Focused Multi-Cap Growth Class C. 2.37
Focused Multi-Cap Growth Class W. 1.52
Income Explorer Class A.......... 1.72
Income Explorer Class C.......... 2.37
Income Explorer Class W.......... 1.52
Small-Cap Class A................ 1.72
Small-Cap Class C................ 2.37
Small-Cap Class W................ 1.52
--------
# Consolidated (see Note 2)
Any contractual waivers and/or reimbursements made by SunAmerica with
respect to a Fund, with the exception of the Subsidiary management fee
waivers, are subject to recoupment from the Funds within two years after the
occurrence of any such waivers and/or reimbursements, provided that the
Funds are able to effect such payment to SunAmerica and remain in compliance
with the expense limitations in effect at the time the waivers and/or
reimbursements were made.
For the year ended October 31, 2018, pursuant to the contractual expense
limitations referred above, SunAmerica has waived or reimbursed expenses as
follows:
Other
Expenses
Fund Reimbursed
---- ----------
Commodity Strategy#...... $146,594
ESG Dividend............. 124,777
Focused Alpha Large-Cap.. --
Focused Multi-Cap Growth. --
Income Explorer.......... 8,159
Small-Cap................ 22,722
Class Specific
Expenses
Fund Reimbursed
---- --------------
Commodity Strategy Class A#. $89,901
Commodity Strategy Class C#. 20,550
Commodity Strategy Class W#. 18,668
ESG Dividend Class A........ 58,848
ESG Dividend Class C........ 9,338
ESG Dividend Class W........ 15,719
79
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
Class Specific
Expenses
Fund Reimbursed
---- --------------
Focused Alpha Large-Cap Class A.. $ --
Focused Alpha Large-Cap Class C.. --
Focused Alpha Large-Cap Class W.. 3,398
Focused Multi-Cap Growth Class A. --
Focused Multi-Cap Growth Class C. --
Focused Multi-Cap Growth Class W. --
Income Explorer Class A.......... 94,645
Income Explorer Class C.......... 26,340
Income Explorer Class W.......... 28,900
Small-Cap Class A................ 98,881
Small-Cap Class C................ 18,191
Small-Cap Class W................ 41,848
--------
# Consolidated (see Note 2)
For the year ended October 31, 2018, the amounts recouped by SunAmerica are
as follows:
Class Specific
Expenses
Fund Recouped
---- --------------
Focused Alpha Large-Cap Class W..... $3,960
Small-Cap Class C................... 143
Small-Cap Class W................... 2,721
At October 31, 2018, expenses previously waived and/or reimbursed by
SunAmerica that are subject to recoupment and expire during the time periods
indicated are as follows:
Other Expenses Reimbursed
-------------------------
October 31, October 31,
Fund 2019 2020
---- ----------- -----------
Commodity Strategy#....... $162,994 $146,594
ESG Dividend.............. 189,689 124,777
Income Explorer........... 32,449 8,159
Small-Cap................. 13,643 22,722
Class Specific Expenses Reimbursed
----------------------------------
October 31, October 31,
Fund 2019 2020
---- ----------- -----------
Commodity Strategy Class A#....... $106,001 $89,901
Commodity Strategy Class C#....... 19,833 20,550
Commodity Strategy Class W#....... 16,039 18,668
ESG Dividend Class A.............. 32,616 58,848
ESG Dividend Class C.............. 2,285 9,338
ESG Dividend Class W.............. 3,986 15,719
Focused Alpha Large-Cap Class A... -- --
Focused Alpha Large-Cap Class C... -- --
Focused Alpha Large-Cap Class W... 2,075 3,398
Focused Multi-Cap Growth Class A.. -- --
Focused Multi-Cap Growth Class C.. -- --
Focused Multi-Cap Growth Class W.. -- --
Income Explorer Class A........... 79,698 94,645
Income Explorer Class C........... 19,631 26,340
Income Explorer Class W........... 13,942 28,900
Small-Cap Class A................. 121,298 98,881
Small-Cap Class C................. 12,792 18,191
Small-Cap Class W................. 18,118 41,848
--------
# Consolidated (see Note 2)
80
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
The following changes to expense caps became effective for the ESG Dividend
Fund, Focused Multi-Cap Growth Fund and Small-Cap Fund on November 19, 2018:
Percentage
----------
ESG Dividend Class A.................... 1.13%
ESG Dividend Class C.................... 1.78%
ESG Dividend Class W.................... 0.93%
Focused Multi-Cap Growth Class A........ 1.13%
Focused Multi-Cap Growth Class C........ 1.78%
Focused Multi-Cap Growth Class W........ 0.93%
Small-Cap Class A....................... 1.25%
Small-Cap Class C....................... 1.90%
Small-Cap Class W....................... 1.05%
The Trust, on behalf of each Fund, has a Distribution Agreement with AIG
Capital Services, Inc. ("ACS" or the "Distributor"), an affiliate of the
Adviser. Each Fund has adopted a Distribution Plan on behalf of its Class A
shares and Class C shares (each a "Plan" and collectively, the "Plans") in
accordance with the provisions of Rule 12b-1 under the 1940 Act, hereinafter
referred to as the "Class A Plan" and the "Class C Plan." In adopting the
Plans, the Trustees determined that there was a reasonable likelihood that
each such Plan would benefit the Fund and the shareholders of the respective
class. The sales charge and distribution fees of a particular class will not
be used to subsidize the sale of shares of any other class.
Under the Class A Plan and Class C Plan, the Distributor receives payments
from a Fund at an annual rate of 0.10% and 0.75%, respectively, of average
daily net assets of such Fund's Class to compensate the Distributor and
certain securities firms for providing sales and promotional activities for
distributing that class of shares. The distribution costs for which the
Distributor may be compensated include fees paid to broker-dealers that have
sold Fund shares, commissions and other expenses such as those incurred for
sales literature, prospectus printing and distribution and compensation to
wholesalers. It is possible that in any given year, the amount paid to the
Distributor under each Plan may exceed the Distributor's distribution costs
as described above. For the year ended October 31, 2018, ACS waived fees in
the amount of $11,184 for the Class A shares of ESG Dividend Fund. The Plans
further provide that the Class A and Class C shares of each Fund shall pay
the Distributor an account maintenance fee up to an annual rate of 0.25% of
the average daily net assets of such class of shares for payments to
broker-dealers for providing account maintenance activities. The Distributor
does not receive or retain any distribution and/or a account maintenance
fees for any shares when the shareholder does not have a broker of record.
For the year ended October 31, 2018, ACS received fees based upon the
aforementioned rates (see Statement of Operations).
The Trust, on behalf of each fund, 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 administrative and shareholder services to Class
W shareholders. For the year ended October 31, 2018, ACS earned fees based
upon the aforementioned rates (see Statement of Operations).
ACS receives sales charges on each Fund's Class A shares, portions of which
are reallocated to affiliated broker-dealers and nonaffiliated
broker-dealers. ACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of each
Fund's Class A and Class C shares. ACS has advised the Funds that for the
year ended October 31, 2018, the proceeds received from sales (and paid out
to affiliated and non-affiliated broker-dealers) and redemptions are as
follows:
Class A Class C
---------------------------------------------------- -------------
Contingent Contingent
Sales Affiliated Non-affiliated Deferred Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges
---- -------- -------------- -------------- ------------- -------------
Commodity Strategy....... $ 3,176 $ 1,310 $ 1,414 $ 2 $ 215
ESG Dividend............. 23,087 11,548 7,611 -- --
Focused Alpha Large-Cap.. 368,831 62,473 249,351 997 2,897
Focused Multi-Cap Growth. 987,882 241,388 590,830 1,715 4,903
Income Explorer.......... 46,602 10,231 28,244 -- 945
Small-Cap................ 114,720 8,891 86,829 1,188 308
The Trust has entered into a Service Agreement with AIG Fund Services, Inc.
("AFS"), an affiliate of the Adviser. Under the Service Agreement, AFS
performs certain shareholder account functions by assisting the Funds'
transfer agent, DST Asset
81
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
Manager Solutions, Inc. ("DST"), in connection with the services that it
offers to the shareholders of the Funds. Pursuant to the Service Agreement,
the Funds pay a fee to AFS for services rendered based upon an annual rate
of 0.22% of daily net assets. For the year ended October 31, 2018, the Funds
incurred the following expenses which are included in transfer agent fees
payable in the Statement of Assets and Liabilities and in transfer agent
fees and expenses in the Statement of Operations, to compensate AFS pursuant
to the terms of the Service Agreement.
Payable at
Fund Expenses October 31, 2018
---- ---------- ----------------
Commodity Strategy Class A....... $ 76,968 $ 6,349
Commodity Strategy Class C....... 5,091 371
Commodity Strategy Class W....... 4,467 368
ESG Dividend Class A............. 54,084 4,320
ESG Dividend Class C............. 850 72
ESG Dividend Class W............. 3,765 468
Focused Alpha Large-Cap Class A.. 1,239,468 109,887
Focused Alpha Large-Cap Class C.. 153,614 6,843
Focused Alpha Large-Cap Class W.. 39,505 3,872
Focused Multi-Cap Growth Class A. 1,099,085 94,831
Focused Multi-Cap Growth Class C. 174,711 13,099
Focused Multi-Cap Growth Class W. 136,968 14,530
Income Explorer Class A.......... 83,958 8,452
Income Explorer Class C.......... 11,527 869
Income Explorer Class W.......... 14,245 1,213
Small-Cap Class A................ 115,869 9,756
Small-Cap Class C................ 5,569 593
Small-Cap Class W................ 26,769 3,183
At October 31, 2018, SunAmerica Series, Inc. AIG Active Allocation Fund and
AIG Multi-Asset Allocation Fund ("Strategy Funds"), affiliates of the
Adviser owned 5% or more of the outstanding shares of the following Funds:
Holder
------------------------------
AIG Active AIG Multi-Asset
Fund Allocation Fund Allocation Fund
---- --------------- ---------------
Commodity Strategy. 10.89% 63.53%
ESG Dividend....... 16.11 67.84
Income Explorer.... 9.63 42.32
Small-Cap.......... 12.32 38.39
The Strategy Portfolios do not invest in the underlying funds for the
purpose of exercising management or control; however, investments by these
Portfolios within the set limits across their asset allocations may
represent a significant portion of net assets of the underlying funds.
On August 6, 2018, the ESG Dividend Fund purchased shares of Keurig Dr.
Pepper ("KDP") as a substitution for another security. This purchase caused
the Fund to exceed the industry-related cap that is applied during the
selection process. The Fund sold KDP on September 18, 2018, at a loss of
$10,987, and purchased AbbVie ("ABBV") as a replacement security. The Fund
subsequently determined that Nielsen Holdings PLC ("Nielsen Holdings")
should have been purchased as the replacement security and, on October 4,
2018, the Fund sold ABBV at a loss of $3,621 and purchased Nielsen Holdings.
The price increase of Nielsen Holdings from August 6, 2018 to October 4,
2018 resulted in a loss to the Fund in the amount of $150,670. In October
2018, SunAmerica reimbursed the Fund in the amount of $165,278 for these
losses.
82
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
Note 5. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the year ended October 31, 2018 were as follows:
Purchases Sales
of portfolio of portfolio
securities securities Purchases Sales
(excluding U.S. (excluding U.S. of U.S. of U.S.
government government government government
Fund securities securities securities securities
---- --------------- --------------- ---------- ----------
Commodity Strategy....... $ 33,189 $ 123,452 $1,000,000
ESG Dividend............. 15,077,526 15,520,057 -- --
Focused Alpha Large-Cap.. 419,836,839 495,360,033 -- --
Focused Multi-Cap Growth. 576,182,966 600,333,029 -- --
Income Explorer.......... 39,560,945 24,956,362 -- --
Small-Cap................ 44,918,208 40,046,896 -- --
Note 6. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily due to taxable
income from a wholly-owned foreign subsidiary, amortization of
organizational costs, late year ordinary loss deferral, partnership
investments, investments in passive foreign investment companies, wash sales
and derivative transactions.
Distributable Earnings Tax Distributions
-------------------------------------- -------------------------
For the year ended October 31, 2018
-----------------------------------------------------------------
Long-term Unrealized
Ordinary Gains/Capital Appreciation Ordinary Long-Term
Fund Income Loss Carryover (Depreciation)* Income Capital Gains
---- -------- -------------- --------------- ----------- -------------
Commodity Strategy#...... $ 25,673 $(83,767,850) $ (9,547,972) $ 67,054 $ --
ESG Dividend............. 347,779 1,650,859 (381,035) 981,131 --
Focused Alpha Large-Cap.. -- 104,668,821 113,918,006 13,732,012 40,937,135
Focused Multi-Cap Growth. -- 122,154,351 134,201,686 -- 49,277,386
Income Explorer.......... 105,789 416,587 (3,518,231) 2,147,476 33,238
Small-Cap................ 273,336 5,967,938 6,204,906 1,857,529 3,935,160
--------
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
# Consolidated (see Note 2)
Tax Distributions
For the year ended
October 31, 2017
------------------------
Ordinary Long-Term
Fund Income Capital Gains
---- ---------- -------------
Commodity Strategy....... $ -- $ --
ESG Dividend............. -- --
Focused Alpha Large-Cap.. -- --
Focused Multi-Cap Growth. -- 7,760,491
Income Explorer.......... 1,216,609 --
Small-Cap................ -- 1,432,026
83
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
As of October 31, 2018, for Federal income tax purposes, the Funds indicated
below have capital loss carryforwards, which are available to offset future
capital gains, if any:
Unlimited
-----------------------
Fund ST LT
---- ----------- -----------
Commodity Strategy#...... $51,868,138 $31,899,712
ESG Dividend............. -- --
Focused Alpha Large-Cap.. -- --
Focused Multi-Cap Growth. -- --
Income Explorer.......... -- --
Small-Cap................ -- --
For the period ended October 31, 2018 AIG Commodity Strategy portfolio
utilized $2 of capital loss carryforward.
Under the current tax law, late year ordinary losses may be deferred and
treated as occurring on the first day of the following year. For the fiscal
year ended October 31, 2018 the Funds elected to defer late year ordinary
losses as follows:
Deferred Late Year
Fund Ordinary Loss
---- ------------------
Commodity Strategy#...... $ --
ESG Dividend............. --
Focused Alpha Large-Cap.. 1,712,093
Focused Multi-Cap Growth. 6,213,774
Income Explorer.......... --
Small-Cap................ --
--------
# Consolidated (see Note 2)
For the period ended October 31, 2018, the reclassifications arising from
book/tax differences resulted in increases (decreases) that were due to
deconsolidation adjustments of the wholly owned foreign subsidiaries,
derivative transactions, net investment losses, expiration of capital loss
carryovers, wash sales, treatment of foreign currency, and nondeductible
expenses to the components of net assets as follows:
Accumulated Accumulated
Undistributed Undistributed Net
Net Investment Realized Gain
Fund Income (Loss) (Loss) Capital Paid-in
---- -------------- ----------------- ---------------
Commodity Strategy....... $ 91,739 $ 62,844 $ (154,583)
ESG Dividend............. 5,674 (5,674) --
Focused Alpha Large-Cap.. (2,018) 2,018 --
Focused Multi-Cap Growth. 4,463,820 (2,138,424) (2,325,396)
Income Explorer.......... 72,499 (72,499) --
Small-Cap................ 655,396 (655,396) --
At October 31, 2018, the amounts of aggregate unrealized gain (loss) and the
cost of investment securities for federal tax purposes, including short-term
securities and repurchase agreements and derivatives, were as follows:
Net
Aggregate Aggregate Unrealized
Unrealized Unrealized Gain/ Cost of
Fund Gain Loss (Loss) Investments
---- ------------ ------------ ------------ ------------
Commodity Strategy#...... $ 5,145,681 $(13,336,333) $ (8,190,652) $ 44,774,959
ESG Dividend............. 2,318,120 (2,699,155) (381,035) 26,110,762
Focused Alpha Large-Cap.. 124,208,677 (10,290,671) 113,918,006 489,768,064
Focused Multi-Cap Growth. 147,767,039 (13,565,353) 134,201,686 449,831,023
Income Explorer.......... 221,265 (3,739,496) (3,518,231) 57,379,188
Small-Cap................ 11,577,490 (5,372,584) 6,204,906 63,451,262
--------
# Consolidated (see Note 2)
84
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into
law. Certain provisions of the Act were effective upon enactment with the
remainder becoming effective for tax years beginning after December 31,
2017. Management is currently evaluating the impact, if any, on the
financial statements and the accompanying notes to financial statements.
Note 7. Capital Share Transactions
Transactions in capital shares of each class of each Fund were as follows:
Commodity Strategy Fund#
----------------------------------------------------------------------------------------------
Class A Class A Class C Class C
------------------------ --------------------- --------------------- ----------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, 2018 October 31, 2017 October 31, 2018 October 31, 2017
------------------------ --------------------- --------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ -------- ----------- -------- ----------- -------- ------------
Shares sold................ 1,619,670 $ 11,880,945 798,053 $ 5,527,159 9,163 $ 63,895 21,234 $ 146,454
Reinvested shares.......... 8,624 59,854 -- -- -- -- -- --
Shares redeemed............ (1,799,912) (13,083,452) (864,608) (6,104,961) (92,784) (640,264) (127,255) (865,569)
---------- ------------ -------- ----------- -------- ----------- -------- ------------
Net increase (decrease) in
shares outstanding before
automatic conversion...... (171,618) (1,142,653) -- -- (83,621) (576,369) -- --
Shares issued/(reacquired)
upon automatic
conversion................ 25,904 186,179 -- -- (26,994) (186,179) -- --
---------- ------------ -------- ----------- -------- ----------- -------- ------------
Net increase (decrease).... (145,714) $ (956,474) (66,555) $ (577,802) (110,615) $ (762,548) (106,021) $ (719,115)
========== ============ ======== =========== ======== =========== ======== ============
Commodity Strategy Fund#
-----------------------------------------------
Class W Class W
------------------------ ---------------------
For the For the
year ended year ended
October 31, 2018 October 31, 2017
------------------------ ---------------------
Shares Amount Shares Amount
---------- ------------ -------- -----------
Shares sold................ 155,952 $ 1,145,736 58,362 $ 421,222
Reinvested shares.......... 752 5,282 -- --
Shares redeemed............ (115,167) (830,352) (103,302) (740,341)
---------- ------------ -------- -----------
Net increase (decrease).... 41,537 $ 320,666 (44,940) $ (319,119)
========== ============ ======== ===========
--------
# Consolidated (see Note 2)
ESG Dividend Fund
----------------------------------------------------------------------------------------
Class A Class A Class C Class C
---------------------- ---------------------- -------------- ------------------------
For the For the period For the For the period
year ended December 16, 2016* year ended December 16, 2016*
October 31, 2018 through October 31, 2017 October 31, 2018 through October 31, 2017
---------------------- ---------------------- -------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ --------- ----------- ------ ------- ------ --------
Shares sold............. 68,182 $ 1,095,499 1,749,813 $26,182,337 891 $14,266 23,220 $348,420
Reinvested shares....... 57,756 925,918 -- -- 626 10,032 -- --
Shares redeemed......... (254,921) (4,118,199) (174,493) (2,695,435) (542) (8,876) -- --
-------- ------------ --------- ----------- ---- ------- ------ --------
Net increase (decrease). (128,983) $(2,096,782) 1,575,320 $23,486,902 975 $15,422 23,220 $348,420
======== ============ ========= =========== ==== ======= ====== ========
85
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
ESG Dividend Fund
--------------------------------------------------
Class W Class W
------------------------ ------------------------
For the For the period
year ended December 16, 2016*
October 31, 2018 through October 31, 2017
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold............. 143,398 $ 2,304,995 22,200 $ 333,000
Reinvested shares....... 2,754 44,202 -- --
Shares redeemed......... (11,129) (181,843) -- --
---------- ------------ ---------- ------------
Net increase
(decrease)............. 135,023 $ 2,167,354 22,200 $ 333,000
========== ============ ========== ============
Focused Alpha Large-Cap Fund
------------------------------------------------------------------------------
Class A Class A Class C
------------------------ ------------------------ ------------------------
For the For the For the
year ended year ended year ended
October 31, 2018 October 31, 2017 October 31, 2018
------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------
Shares sold............. 2,397,357 $ 72,821,938 680,493 $ 19,302,610 197,254 $ 5,928,549
Reinvested shares....... 1,354,077 40,527,524 -- -- 354,695 10,137,186
Shares redeemed......... (2,390,171) (75,811,620) (2,263,757) (62,692,386) (2,173,937) (62,389,813)
---------- ------------ ---------- ------------ ---------- ------------
Net increase (decrease)
in shares outstanding
before automatic
conversion............. 1,361,263 37,537,842 -- -- (1,621,988) (46,324,078)
Shares
issued/(reacquired)
upon automatic
conversion............. 996,516 31,069,723 -- -- (1,045,543) (31,069,723)
---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease)............. 2,357,779 $ 68,607,565 (1,583,264) $(43,389,776) (2,667,531) $(77,393,801)
========== ============ ========== ============ ========== ============
Focused Alpha Large-Cap Fund
--------------------------------------------------
Class W Class W
------------------------ ------------------------
For the For the
year ended year ended
October 31, 2018 October 31, 2017
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold............. 386,088 $ 12,455,918 518,493 $ 15,170,238
Reinvested shares....... 31,057 941,329 -- --
Shares redeemed......... (257,008) (8,197,909) (392,738) (11,779,029)
---------- ------------ ---------- ------------
Net increase
(decrease)............. 160,137 $ 5,199,338 125,755 $ 3,391,209
========== ============ ========== ============
Shares sold.............
Reinvested shares.......
Shares redeemed.........
Net increase
(decrease).............
----------------------
Class C
----------------------
For the
year ended
October 31, 2017
----------------------
Shares Amount
--------- ------------
Shares sold............. 126,659 $ 3,346,850
Reinvested shares....... -- --
Shares redeemed......... (914,267) (24,137,139)
-------- ------------
Net increase (decrease)
in shares outstanding
before automatic
conversion............. -- --
Shares
issued/(reacquired)
upon automatic
conversion............. -- --
-------- ------------
Net increase
(decrease)............. (787,608) $(20,790,289)
======== ============
Shares sold.............
Reinvested shares.......
Shares redeemed.........
Net increase
(decrease).............
--------
* Commencement of operations
86
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
Focused Multi-Cap Growth Fund
-----------------------------------------------------------------------------
Class A Class A Class C
------------------------ ------------------------ ------------------------
For the For the For the
year ended year ended year ended
October 31, 2018 October 31, 2017 October 31, 2018
------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------
Shares sold................ 2,711,467 $ 86,165,054 1,149,529 $ 31,579,237 714,635 $ 21,892,758
Reinvested shares.......... 1,188,572 34,884,590 235,190 5,564,598 261,228 7,301,311
Shares redeemed............ (2,720,684) (85,784,825) (2,502,152) (65,479,951) (1,117,708) (33,215,494)
---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease) in shares
outstanding before
automatic conversion...... 1,179,355 35,264,819 -- -- (141,845) (4,021,425)
Shares
issued/(reacquired)
upon automatic
conversion................ 472,031 15,105,961 -- -- (496,621) (15,105,961)
---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease)................ 1,651,386 $ 50,370,780 (1,117,433) $(28,336,116) (638,466) $(19,127,386)
========== ============ ========== ============ ========== ============
Focused Multi-Cap Growth Fund
--------------------------------------------------
Class W Class W
------------------------ ------------------------
For the For the
year ended year ended
October 31, 2018 October 31, 2017
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold................ 1,821,788 $ 59,225,727 761,790 $ 21,457,555
Reinvested shares.......... 92,850 2,762,282 13,418 320,814
Shares redeemed............ (860,667) (27,340,408) (608,199) (15,915,170)
---------- ------------ ---------- ------------
Net increase
(decrease)................ 1,053,971 $ 34,647,601 167,009 $ 5,863,199
========== ============ ========== ============
Income Explorer Fund
-----------------------------------------------------------------------------
Class A Class A Class C
------------------------ ------------------------ ------------------------
For the For the For the
year ended year ended year ended
October 31, 2018 October 31, 2017 October 31, 2018
------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------
Shares sold................ 1,762,469 $ 27,485,149 1,003,506 $ 15,384,847 105,523 $ 1,665,122
Reinvested shares.......... 108,056 1,674,221 64,190 980,769 11,735 182,186
Shares redeemed............ (856,460) (13,378,396) (598,076) (9,090,962) (106,259) (1,639,799)
---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease) in shares
outstanding before
automatic conversion...... 1,014,065 15,780,974 -- -- 10,999 207,509
Shares issued/(reacquired)
upon automatic
conversion................ 25,853 406,919 -- -- (25,918) (406,919)
---------- ------------ ---------- ------------ ---------- ------------
Net
increase (decrease)....... 1,039,918 $ 16,187,893 469,620 $ 7,274,654 (14,919) $ (199,410)
========== ============ ========== ============ ========== ============
-----------------------
Class C
----------------------
For the
year ended
October 31, 2017
----------------------
Shares Amount
--------- ------------
Shares sold................ 285,454 $ 7,249,635
Reinvested shares.......... 53,273 1,213,029
Shares redeemed............ (928,163) (23,644,057)
-------- ------------
Net increase
(decrease) in shares
outstanding before
automatic conversion...... -- --
Shares
issued/(reacquired)
upon automatic
conversion................ -- --
-------- ------------
Net increase
(decrease)................ (589,436) $(15,181,393)
======== ============
Shares sold................
Reinvested shares..........
Shares redeemed............
Net increase
(decrease)................
-----------------------
Class C
----------------------
For the
year ended
October 31, 2017
----------------------
Shares Amount
--------- ------------
Shares sold................ 177,564 $ 2,734,798
Reinvested shares.......... 8,247 125,782
Shares redeemed............ (100,354) (1,560,643)
-------- ------------
Net increase
(decrease) in shares
outstanding before
automatic conversion...... -- --
Shares issued/(reacquired)
upon automatic
conversion................ -- --
-------- ------------
Net
increase (decrease)....... 85,457 $ 1,299,937
======== ============
87
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
Income Explorer Fund
----------------------------------------------
Class W Class W
---------------------- ----------------------
For the For the
year ended year ended
October 31, 2018 October 31, 2017
---------------------- ----------------------
Shares Amount Shares Amount
-------- ------------ -------- ------------
Shares sold................ 283,191 $ 4,420,873 486,896 $ 7,654,707
Reinvested shares.......... 19,404 301,743 5,667 88,419
Shares redeemed............ (378,226) (5,959,900) (25,994) (411,508)
-------- ------------ -------- ------------
Net increase
(decrease)................ (75,631) $ (1,237,284) 466,569 $ 7,331,618
======== ============ ======== ============
Small-Cap Fund
--------------------------------------------------------------------------------------------
Class A Class A Class C Class C
---------------------- ---------------------- ------------------- -----------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, 2018 October 31, 2017 October 31, 2018 October 31, 2017
---------------------- ---------------------- ------------------- -----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ -------- ------------ ------- ---------- ---------- -----------
Shares sold................ 574,499 $ 11,192,104 290,584 $ 5,244,799 100,301 $1,942,803 53,327 $ 950,781
Reinvested shares.......... 258,775 4,720,058 78,873 1,384,213 11,540 204,147 1,667 28,657
Shares redeemed............ (571,045) (11,339,452) (700,332) (12,743,109) (34,652) (658,404) (9,225) (165,173)
-------- ------------ -------- ------------ ------- ---------- ---------- -----------
Net increase
(decrease) in shares
outstanding before
automatic conversion...... 262,229 4,572,710 -- -- 77,189 1,488,546 -- --
Shares issued/(reacquired)
upon automatic
conversion................ 6,468 122,891 -- -- (6,677) (122,891) -- --
-------- ------------ -------- ------------ ------- ---------- ---------- -----------
Net increase
(decrease)................ 268,697 $ 4,695,601 (330,875) $ (6,114,097) 70,512 $1,365,655 45,769 $ 814,265
======== ============ ======== ============ ======= ========== ========== ===========
Small-Cap Fund
----------------------------------------------
Class W Class W
---------------------- ----------------------
For the For the
year ended year ended
October 31, 2018 October 31, 2017
---------------------- ----------------------
Shares Amount Shares Amount
-------- ------------ -------- ------------
Shares sold................ 634,428 $ 12,521,968 413,473 $ 7,614,236
Reinvested shares.......... 44,203 812,888 789 13,932
Shares redeemed............ (207,190) (4,097,869) (33,586) (629,357)
-------- ------------ -------- ------------
Net increase
(decrease)................ 471,441 $ 9,236,987 380,676 $ 6,998,811
======== ============ ======== ============
Note 8. Line of Credit
The Trust, along with certain other funds managed by the Adviser and
exclusive of the Commodity Strategy Fund, has access to a $75 million
committed unsecured line of credit and a $50 million uncommitted unsecured
line of credit. The Commodity Strategy Fund has access to a $10 million
committed secured 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 lines 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.
There is also a commitment fee of 25 basis points per annum on the
88
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2018 -- (continued)
daily unused portion of the committed line of credit and an upfront fee of
$25,000 on the uncommitted line of credit. Borrowings under the line of
credit will commence when the respective Fund's cash shortfall exceeds
$100,000. For the year ended October 31, 2018, the following Funds had
borrowings:
Average Weighted
Days Interest Debt Average
Fund Outstanding Charges Utilized Interest
---- ----------- -------- ---------- --------
Focused Alpha Large-Cap.. 50 $2,083 $ 515,274 3.01%
Focused Multi-Cap Growth. 11 2,065 2,404,435 2.81
Income Explorer.......... 26 349 156,915 3.07
At October 31, 2018, none of the Funds had outstanding borrowings.
Note 9. Expense Reductions
Through expense offset arrangements resulting from broker commission
recapture, a portion of the expenses of certain Funds have been reduced. For
the year ended October 31, 2018, the amount of expense reductions received
by each Fund used to offset non-affiliated expenses are reflected as Fees
paid indirectly in the Statement of Operations.
Note 10. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the SEC, the Funds are permitted
to participate in an interfund lending program among investment companies
advised by SunAmerica or an affiliate. The interfund lending program allows
the participating Funds to borrow money from and lend money to each other
for temporary or emergency purposes. An interfund loan will be made under
this facility only if the participating Funds receive a more favorable
interest rate than would otherwise be available from a typical bank for a
comparable transaction.
For the year ended October 31, 2018, none of the Funds participated in this
program.
Note 11. Investment Concentration
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 Commodity Strategy Funds'
concentration in such investments, these funds may be subject to risks
associated with U.S. Government agencies or instrumentalities.
The Commodity Strategy Fund's exposure to the commodities markets may
subject the Fund to greater volatility than investments in traditional
securities. The value of commodity-linked derivative instruments may be
affected by changes in overall market movements, commodity index volatility,
changes in interest rates, or sectors affecting a particular industry or
commodity, such as drought, floods, weather, livestock disease, embargoes,
tariffs and international economic, political and regulatory developments.
Note 12. Security Transactions with Affiliated Portfolios
The Funds are permitted to transfer securities by purchasing from and/or
selling to other affiliated funds under certain conditions approved by the
Board of Trustees. The affiliated funds involved in such transactions must
have a common investment adviser or investment advisers which are affiliated
persons of each other, common Trustees, and/or common officers in compliance
with Rule 17a-7 of the 1940 Act. Pursuant to the Act, such a transaction
must be either a purchase or a sale, for no consideration other than cash
payment against prompt delivery of the security at the current market price.
No brokerage commission or fee (except for customary transfer fees), or
other remuneration is paid in connection with such transactions. For the
year ended October 31, 2018, the following Fund engaged in security
transactions with affiliated Funds:
Proceeds
Cost of from Realized
Fund Purchases Sales Gain(Loss)
---- --------- ---------- ----------
Focused Multi-Cap Growth. $-- $2,681,518 $(565,640)
89
SunAmerica Specialty Series
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of SunAmerica Specialty Series and Shareholders of
each of the six funds listed in the table below
Opinions on the Financial Statements
We have audited the financial statements and financial highlights of each of
the funds listed in the table below (constituting SunAmerica Specialty Series,
hereafter collectively referred to as the "Funds") as of the date listed in the
table below and for the periods listed in the table below (collectively
referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of
each of the Funds as of the date listed in the table below, the results of each
of their operations, the changes in each of their net assets and each of the
financial highlights for each of the periods listed in the table below in
conformity with accounting principles generally accepted in the United States
of America.
SunAmerica Specialty Series
-------------------------------------
AIG Commodity Strategy Fund(1)
-------------------------------------
AIG ESG Dividend Fund(2)
-------------------------------------
AIG Focused Alpha Large-Cap Fund(3)
-------------------------------------
AIG Focused Multi-Cap Growth Fund(3)
-------------------------------------
AIG Income Explorer Fund(3)
-------------------------------------
AIG Small-Cap Fund(4)
--------
(1)The consolidated statement of assets and liabilities, including the
consolidated portfolio of investments, as of October 31, 2018, the related
consolidated statement of operations for the year then ended, the statement
of changes in net assets for each of the two years in the period ended
October 31, 2018, including the related notes, and the financial highlights
for each of the five years in the period ended October 31, 2018
(2)The statement of assets and liabilities, including the portfolio of
investments, as of October 31, 2018, the related statement of operations for
the year then ended and the statement of changes in net assets, including
the related notes, for the year ended October 31, 2018 and for the period
from December 16, 2016 (commencement of operations) through October 31, 2017
and the financial highlights for each of the periods indicated therein
(3)The statements of assets and liabilities, including the portfolios of
investments, as of October 31, 2018, the related statements of operations
for the year then ended, the statements of changes in net assets for each of
the two years in the period ended October 31, 2018, including the related
notes, and the financial highlights for each of the five years in the period
ended October 31, 2018
(4)The statement of assets and liabilities, including the portfolio of
investments, as of October 31, 2018, the related statement of operations for
the year then ended and the statement of changes in net assets, including
the notes, for each of the two years in the period ended October 31, 2018
and the financial highlights for each of the periods indicated therein
Basis for Opinions
These financial statements are the responsibility of the Funds' management. Our
responsibility is to express an opinion on the Funds' financial statements
based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required
to be independent with respect to the Funds in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements.
Our procedures included confirmation of securities owned as of October 31, 2018
by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We
believe that our audits provide a reasonable basis for our opinions.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
December 21, 2018
We have served as the auditor of one or more investment companies in the AIG
Funds family of funds since 1984.
90
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2018 -- (unaudited)
Approval of the Investment Advisory and Management Agreements and Subadvisory
Agreements
The Board of Trustees (the "Board," the members of which are referred to as
"Trustees") of SunAmerica Specialty Series (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"), Wellington Management Company LLP ("Wellington"), BAMCO, Inc.
("BAMCO"), Marsico Capital Management LLC ("Marsico"), BlackRock Investment
Management LLC ("BlackRock"), Cohen and Steers Capital Management, Inc. ("Cohen
and Steers"), Cadence Capital Management, LLC ("Cadence" and together with
Wellington, BAMCO, Marsico, BlackRock and Cohen and Steers, the "Subadvisers"),
approved the continuation of the Investment Advisory and Management Agreements
between the Trust, on behalf of each of the Funds and SunAmerica (the "Advisory
Agreements"), each for a one-year period ending June 30, 2019 at an in-person
meeting held on June 5-6, 2018 (the "Meeting"). The Trust currently consists of
the following seven separate Funds: the AIG Global Trends Fund (the "Global
Trends Fund"), the AIG Commodity Strategy Fund (the "Commodity Strategy Fund"),
the AIG Focused Multi-Cap Growth Fund (the "Multi-Cap Growth Fund"), the AIG
Focused Alpha Large-Cap Fund (the "Alpha Large-Cap Fund"), the AIG Income
Explorer Fund (the "Income Explorer Fund"), the AIG Small-Cap Fund (the
"Small-Cap Fund"), and the AIG ESG Dividend Fund (the "ESG Dividend Fund").
At the Meeting, the Board, including the Independent Trustees, also approved
the continuation of the Subadvisory Agreement between SunAmerica and Wellington
with respect to the Global Trends Fund and Commodity Strategy Fund, the
Subadvisory Agreement between SunAmerica and Marsico with respect to each of
the Multi-Cap Growth Fund and Alpha Large-Cap Fund, the Subadvisory Agreement
between SunAmerica and BAMCO with respect to the Multi-Cap Growth Fund, the
Subadvisory Agreement between SunAmerica and BlackRock with respect to the
Alpha Large-Cap Fund, the Subadvisory Agreement between SunAmerica and Cohen
and Steers with respect to the Income Explorer Fund, and the Subadvisory
Agreement between SunAmerica and Cadence with respect to the Small-Cap Fund
each for a one-year period ending June 30, 2019 (the "Subadvisory Agreements,"
and together with the Advisory Agreements, the "Agreements").
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 Advisory Agreements
and Subadvisory Agreements. These materials included, among other things: (a) a
summary of the services provided to the Funds by SunAmerica and its affiliates,
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 on 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 Advisory Agreements
and Subadvisory Agreements, the Board, including the Independent Trustees,
considered at the Meeting, and from time to time, as appropriate, factors that
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 Agreements.
91
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2018 -- (unaudited) (continued)
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 Agreements; (iii) SunAmerica has
been responsive to requests of the Board; and (iv) SunAmerica 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 Agreements 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 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, 2018, SunAmerica managed, advised and/or
administered approximately $89.5 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 in 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 and other key personnel of the
Subadvisers, in addition to current and projected staffing levels and
compensation practices, and concluded, based on its experience with each
Subadviser, 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 in effectively serving as subadvisers to the
Funds. The Board concluded that the nature and extent of services provided by
the Subadvisers under the Subadvisory Agreements were reasonable and
appropriate in relation to the subadvisory fees 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. 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 universe ("Peer Universe") and/or peer group
("Peer Group") as independently determined by Broadridge and to an appropriate
index or combination of indices. The Board was provided with a description of
the methodology used by Broadridge to select the funds in the Peer Groups and
Peer Universes.
The Board noted that performance information was for the periods ended
March 31, 2018. 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.
Commodity Strategy Fund. The Board considered that the Fund's performance was
below the medians of its Peer Group and Peer Universe for the one-year period.
The Board also considered that the Fund underperformed its Broadridge Index for
the one-year period. The Board noted management's discussion of the Fund's
performance and the fact that Wellington Management had begun managing the Fund
as of September 2015 under the Fund's new name and investment strategies. The
Board concluded that the Fund's performance was being appropriately monitored.
92
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2018 -- (unaudited) (continued)
ESG Dividend Fund. The Board considered that the Fund's performance was below
the medians of its Peer Group and Peer Universe for the one-year period. The
Board also noted that the Fund underperformed its Broadridge Index for the
one-year period. The Board noted management's discussion of the Fund's
performance and concluded that the Fund's performance was satisfactory in view
of its limited performance history and that the Fund's performance was being
appropriately monitored.
Global Trends Fund. The Board considered that the Fund's performance was below
the medians 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 noted
that management was recommending the liquidation of this Fund.
Multi-Cap Growth Fund. The Board considered that the Fund's performance was
above the medians of its Peer Group and Peer Universe for the one-, three- and
five-year periods. The Board also noted that the Fund outperformed its
Broadridge Index for the one-, three- and five-year periods. The Board
concluded that the Fund's performance was satisfactory.
Alpha Large-Cap Fund. The Board considered that the Fund's performance was
above the medians of its Peer Group and Peer Universe for the one-year period,
and below the medians of its Peer Group and Peer Universe for the three- and
five-year periods. The Board further noted that the Fund outperformed its
Broadridge Index for the one-year period and underperformed its Broadridge
Index for the three- and five-year periods. The Board noted management's
discussion of the Fund's performance and concluded that the Fund's performance
was satisfactory.
Income Explorer Fund. The Board noted that the Fund's performance was above the
medians of its Peer Group and Peer Universe for the one- and three-year
periods. The Board further noted that the Fund underperformed its Broadridge
Index for the one-year period and outperformed its Broadridge Index for the
three-year period. The Board concluded that the Fund's performance was
satisfactory.
Small-Cap Fund. The Board noted that the Fund's performance was above the
medians of its Peer Group and Peer Universe for the one- and three-year
periods. The Board further noted that the Fund outperformed its Broadridge
Index for the one- and three-year periods. The Board concluded that the Fund's
performance was satisfactory.
Consideration of the Management Fees and Subadvisory Fees and the Cost of the
Services and Profits to be Realized by SunAmerica and the Subadvisers and their
Affiliates from the Relationship with the Funds. The Board, including the
Independent Trustees, received and reviewed information regarding the fees paid
by the Funds to SunAmerica pursuant to the Advisory Agreements and the fees
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 the Funds,
as applicable. The Board further considered that, unlike the funds in the 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 fees 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 the applicable Peer
Groups and Peer Universes 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) 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 Funds 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.
93
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2018 -- (unaudited) (continued)
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 prepared independently by Broadridge. The report showed comparative fee
information of each Fund's Peer Group and/or Peer Universe that the Trustees
used as a guide to help assess the reasonableness of the subadvisory fees. The
Trustees noted that Peer Group and/or Peer Universe 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 Trustees also considered
that the subadvisory fees are paid by SunAmerica out of its management fees 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 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.
The Board also considered fees received by the Subadvisers with respect to
other mutual funds and accounts with similar investment strategies to the Funds
for which they serve as adviser or subadviser, as applicable. The Board
observed that the similar accounts identified by Wellington were institutional
separate accounts, and Wellington highlighted certain differences between these
separate accounts and the Commodity Strategy Fund, including that these
separate accounts are subject to different investment limitations and
restrictions and do not experience daily cash flows in a manner similar to the
Fund. The Board then noted that the subadvisory fees paid by SunAmerica to the
Subadvisers were reasonable as compared to fees the applicable Subadvisers
receive for other comparable accounts for which they serve as adviser or
subadviser.
Commodity Strategy Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
ESG Dividend Fund. The Board considered that the Fund's actual management fees
were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were equal to the median of its Peer
Group and above the median of its Peer Universe. The Board noted management's
discussion regarding the Fund's expenses.
Global Trends Fund. The Board considered that the Fund's actual management fees
were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses and also noted management's recommendation to liquidate the
Fund.
Multi-Cap Growth Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
Alpha Large-Cap Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
Income Explorer Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
Small-Cap Fund. The Board considered that the Fund's actual management fees
were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board 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 their 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, as well as an Investment Management Profitability
Analysis prepared by an independent information service, Broadridge. In
particular, the Board considered the contractual fee waivers and/or expense
reimbursements agreed to by SunAmerica.
94
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2018 -- (unaudited) (continued)
The Board considered the profitability of SunAmerica under the Advisory
Agreements, 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, Service Agreements and Administrative and
Shareholder Services Agreement. Additionally, the Board considered whether
SunAmerica, the Subadvisers 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 financial statements and/or other information from the
Subadvisers and their affiliates 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 fees 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 AIG 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 further noted
that SunAmerica has agreed to contractually cap the total annual operating
expenses of each class of the Funds, at certain levels. The Board observed that
those expense caps 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 Agreements,
including whether the implementation of breakpoints would be appropriate in the
future due to an increase in asset size or otherwise.
The Board noted that the Subadvisory Agreements with respect to certain of the
Funds 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 Agreements and
concluded that the management fee structure, including the amount of management
fees retained by SunAmerica, was reasonable in light of the factors discussed
above.
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 that 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.
Conclusion. After a full and complete discussion, the Board approved the
Agreements, each for a one-year period ending June 30, 2019. 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 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.
95
SunAmerica Specialty Series
TRUSTEE AND OFFICER INFORMATION -- October 31, 2018 -- (unaudited)
The following table contains basic information regarding the Trustees and
Officers that oversee operations of the Funds and other investment companies
within the Fund complex.
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by
Age* Complex Time Served(4) During Past 5 Years Trustee(1)
----------------------- ------------ ---------------- ------------------------------------- -------------
DISINTERESTED TRUSTEES
Dr. Judith L. Craven Trustee 2004 to present Retired. 73
Age: 73
William F. Devin Trustee 2004 to present Retired. 73
Age: 79
Richard W. Grant Trustee 2004 to present Retired. 24
Age: 73 Chairman of
the Board
Stephen J. Gutman Trustee 2004 to present Vice President and Associate Broker, 24
Age: 75 Corcoran Group (real estate) (2002
to present); President, SJG
Marketing Inc. (2009 to present).
Eileen A. Kamerick Director 2018 to present National Association of Corporate 24
Age: 59 Directors Board Leadership Fellow
and financial expert; Adjunct
Professor of Law, University of
Chicago, Washington University in
St. Louis and University of Iowa law
schools (2007 to Present); formerly,
Senior Advisor to the Chief
Executive Officer and Executive
Vice President and Chief Financial
Officer of ConnectWise, Inc. (2015
to 2016); Chief Financial Officer,
Press Ganey Associates (2012 to
2014).
INTERESTED TRUSTEE
Peter A. Harbeck(3) Trustee 2004 to present President, CEO and Director, 150
Age: 64 SunAmerica. (1995 to present);
Director, AIG Capital Services, Inc.
("ACS") (1993 to present).
Name,
Address and Other Directorships
Age* Held by Trustee(2)
----------------------- ---------------------------------------
DISINTERESTED TRUSTEES
Dr. Judith L. Craven Director, Sysco Corp. (1996 to
Age: 73 present); Director, Luby's, Inc. (1998
to present).
William F. Devin None
Age: 79
Richard W. Grant None
Age: 73
Stephen J. Gutman None
Age: 75
Eileen A. Kamerick Hochschild Mining plc (2016
Age: 59 to Present); Director of
Associated Banc-Corp (2007
to Present); Legg Mason Closed End
Funds (2013 to Present); Westell
Technologies, Inc. (2003 to 2016)
INTERESTED TRUSTEE
Peter A. Harbeck(3) None
Age: 64
96
SunAmerica Specialty Series
TRUSTEE AND OFFICER INFORMATION -- October 31, 2018 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Age* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
-------------------- --------------- -------------- ------------------------------------ ------------- -------------------
OFFICERS
John T. Genoy President 2007-present Chief Financial Officer, SunAmerica N/A N/A
Age: 50 (2002 to present); Senior Vice
President, SunAmerica (2003 to
present); Chief Operating Officer,
SunAmerica (2006 to present).
Gregory N. Bressler Secretary 2005-present Senior Vice President and General N/A N/A
Age: 52 Counsel, SunAmerica (2005 to
present).
Kathleen Fuentes Chief Legal 2013-present Vice President and Deputy General N/A N/A
Age: 49 Officer and Counsel, SunAmerica (2006 to
Assistant present)
Secretary
James Nichols Vice President 2006-present Director, President and CEO, ACS N/A N/A
Age: 52 (2006 to present); Senior Vice
President, SunAmerica (2002 to
present).
Gregory R. Kingston Treasurer 2014-present Vice President and Head of Mutual N/A N/A
Age: 52 Fund Administration, SunAmerica
(2014 to present).
Shawn Parry Vice President 2014-present Vice President (2014 to present); N/A N/A
Age: 46 and Assistant Assistant Vice President,
Treasurer SunAmerica (2005 to 2014)
Donna McManus Vice President 2014-present Vice President, SunAmerica, (2014 N/A N/A
Age: 57 and Assistant to present), Managing Director, BNY
Treasurer Mellon (2009-2014).
97
SunAmerica Specialty Series
TRUSTEE AND OFFICER INFORMATION -- October 31, 2018 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Age* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
--------------------- ----------- ---------------- ------------------------------------ ------------- -------------------
Christopher C. Joe Chief 2017 to Present Chief Compliance Officer, AIG N/A N/A
Age: 49 Compliance Funds, Anchor Series Trust, Seasons
Officer Series Trust, SunAmerica Series
Trust, VALIC Company I and
VALIC Company II (2017-Present);
Chief Compliance Officer, VALIC
Retirement Services Company
(2017-Present); Chief Compliance
Officer, Invesco PowerShares (2012-
2017); Chief Compliance Officer,
Invesco Investment Advisers, LLC
(2010-2013); U.S. Compliance
Director, Invesco Ltd. (2006-2014);
Deputy Chief Compliance Officer,
Invesco Advisers, LLC (2014-2015).
Matthew J. Hackethal Anti-Money 2006-present Acting Chief Compliance Officer N/A N/A
Age: 46 Laundering (2016 to 2017); Chief Compliance
Compliance Officer, SunAmerica (2006 to
Officer present) and Vice President,
SunAmerica (2011-Present).
--------
* The business address for each Trustee is the Harborside 5, 185 Hudson
Street, Suite 3300, Jersey City, NJ 07311-4992.
(1) The "Fund Complex" means two or more registered investment companies that
hold themselves out to investors as related companies for purposes of
investment services or have a common investment adviser or an investment
adviser that is an affiliated person of the Adviser. The "Fund Complex"
includes the Trust (6 funds), SunAmerica Money Market Funds Inc. (1 fund),
SunAmerica Equity Funds (2 funds), SunAmerica Income Funds (3 funds),
SunAmerica Series, Inc. (6 portfolios), Anchor Series Trust (5 portfolios),
SunAmerica Senior Floating Rate Fund, Inc. (1 fund), SunAmerica Series
Trust (58 portfolios), VALIC Company I (34 portfolios), VALIC Company II
(15 funds), Seasons Series Trust (19 portfolios).
(2) Directorships of companies required to report to the SEC under the
Securities Exchange Act of 1934 (i.e., "public companies") or other
investment companies registered under the 1940 Act.
(3) Interested Trustee, as defined within the 1940 Act, because he is an
officer and a director of the Adviser and a director of the principal
underwriter of the Trust.
(4) Trustees serve until their successors are duly elected and qualified. Each
officer will hold office for an indefinite term, until the date he or she
resigns or retires or until his/her successor is duly elected and qualifies.
Additional information concerning the Trustees is contained in the Statement of
Additional Information which is available, without charge, by calling (800)
858-8850.
98
SunAmerica Specialty Series
SHAREHOLDER TAX INFORMATION -- October 31, 2018 -- (unaudited)
Certain tax information regarding SunAmerica Specialty Series is required to be
provided to shareholders based upon each Fund's income and distributions for
the taxable period ended October 31, 2018. The information and distributions
reported herein may differ from the information and distributions taxable to
the shareholders for the calendar year end December 31, 2018. The information
necessary to complete your income tax returns will be included with your Form
1099-DIV to be received under separate cover in early 2019.
During the year ended October 31, 2018, the Funds paid the following long-term
capital gains along with the percentage of ordinary income dividends that
qualified for the dividends received deductions for corporations.
Qualifying % for the
Net Long-Term Dividends
Fund Capital Gains Received Deduction
---- ------------- --------------------
Commodity Strategy....... $ -- --%
ESG Dividend............. -- 50.09
Focused Alpha Large-Cap.. 40,937,135 47.45
Focused Multi-Cap Growth. 49,277,385 --
Income Explorer.......... 33,238 9.70
Small-Cap................ 3,935,160 22.28
For the year ended October 31, 2018, certain dividends paid by the following
Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs
and Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid
during the fiscal year, the following represents the maximum amount that may be
considered qualified dividend income:
Fund Amount
---- -----------
Commodity Strategy....... $ 67,054
ESG Dividend............. 981,132
Focused Alpha Large-Cap.. 13,732,012
Focused Multi-Cap Growth. --
Income Explorer.......... 2,147,477
Small-Cap................ 1,857,529
99
(THIS PAGE INTENTIONALLY LEFT BLANK)
100
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited)
As required by the Securities and Exchange Commission, the graphs on the
following pages compare the performance of a $10,000 investment in the
SunAmerica Specialty Series' Funds to a similar investment in an index or
indices. Please note that "inception," as used herein, reflects the date on
which a specific class of shares commenced operations. It is important to note
that the SunAmerica Specialty Series' Funds are professionally managed mutual
funds, while the indices are not available for investment and are unmanaged.
The comparison is shown for illustrative purposes only. The graphs present the
performance of the largest class of that particular Fund. The performance of
the other classes will vary based upon the difference in sales charges and fees
assessed to shareholders of that class.
101
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Commodity Strategy Fund
For the annual period ended October 31, 2018, Class A shares of the AIG
Commodity Strategy Fund returned -3.75% (before maximum sales charge),
underperforming the Fund's benchmark, the Bloomberg Commodity Index,/*/ which
returned -1.73% for the same period. To compare, the S&P 500 Index,/*/ a
broad-based equity market index, returned 7.35% for the same period.
The Fund seeks to provide long-term total return through a strategy designed to
provide diversified exposure to the commodities markets by investing its assets
in a combination of commodity-linked derivative instruments and fixed income
securities. A portion of the Fund's assets are managed pursuant to an index
strategy designed to track, before fees and expenses, the performance of the
Bloomberg Commodity Index (the "Index"), and a portion of the Fund's assets are
managed pursuant to an active strategy designed to outperform the Index. The
Fund does not invest directly in commodities.
Three key factors affected the commodities markets during the annual period.
First, within the energy sector, the petroleum complex rallied on fears of
global supply disruptions and strong demand. Crude oil in particular benefited
from declining inventory amid OPEC's decision not to increase production and as
the first round of U.S. sanctions on Iran took effect, with prices approaching
a four-year high in the third quarter of 2018. Energy delivered strong
performance until October 2018, when it suffered its worst result in more than
two years, as supply threats from Hurricane Michael and Iranian sanctions were
overshadowed by hawkish U.S. monetary policy and a slowdown in global economic
growth. Second, there was improved economic growth across China during the
first months of the annual period, which fueled expectations for higher demand
and tighter supplies for industrial metals. In addition, with specific
commodities such as aluminum, China clamped down on excess production,
providing added price support. However, higher inventories, lower Chinese
demand amid weaker than expected GDP growth rates, and global trade tensions,
including the prospect of higher tariffs, then drove industrial metals prices
significantly lower in the last months of the annual period. Third, solid
economic data out of the emerging markets early in 2018 provided some stability
in the U.S. dollar, which, in turn, benefited commodities. However, most of
those gains reverted by the end of the third calendar quarter. Concerns about
U.S. dollar-denominated debt and country-specific issues led to a loss of
market confidence within the emerging markets. This caused most emerging market
currencies to depreciate versus the U.S. dollar, led by the Argentine peso and
the Turkish lira. This was a major headwind for the commodities asset class
overall during the annual period. While a weakening of the U.S. dollar is often
inflationary and can lead to strong real asset performance, a strengthening
U.S. dollar can have the opposite effect.
Given this backdrop, sector selection detracted from the Fund's relative
results during the annual period, primarily due to the Fund's overweight to
industrial metals and underweight to energy - the former being the worst
performing sector in the Index and the latter being the best performing sector
in the Index during the annual period. Partially offsetting these detractors
were the positive contributions made by having underweighted allocations to
agriculture and livestock and to precious metals, which each underperformed the
Index during the annual period. Commodity contract selection also detracted
from the Fund's relative results. Contract selection in crude oil and natural
gas were the largest detractors, driven by positioning along the respective
futures curves. Such results were mitigated by positioning along the copper
futures curve, which added value. Security selection boosted the Fund's
relative performance, driven by, relative to the Index, an overweight to crude
oil and an underweight to natural gas within the energy
102
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
sector; an underweight to live cattle and an overweight to soybean meal within
the agriculture and livestock sector; and an overweight to aluminum and an
out-of-benchmark exposure to uranium within the industrial metals sector. These
positive contributors were partially offset by underweights to wheat and cotton
as well as by security selection within the precious metals sector, which
detracted.
--------
Past performance is no guarantee of future results. Diversification does not
guarantee a profit or protect against a loss.
* The Bloomberg Commodity Index is a broadly diversified commodity price
index made up of 22 exchange-traded futures on physical commodities weighted to
account for economic significance and market liquidity. The S&P 500 Index is an
unmanaged, weighted index of 500 large company stocks that is widely recognized
as representative of the performance of the U.S. stock market. Indices are not
managed and an investor cannot invest directly in an index.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be a part of current portfolio
construction.
103
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in AIG Commodity Strategy Fund Class A shares
would be valued at $6,982. The same amount invested in securities mirroring the
performance of the Bloomberg Commodity Index and the S&P 500 Index would be
valued at $6,559 and $34,757, respectively.
[CHART]
AIG Commodity Bloomberg
Date Strategy Class A# Commodity Index++ S&P 500 Index@
----------- --------------------- ----------------- ---------------
11/4/2008 9425 10000 10000
11/30/2008 9133 9349 9306
12/31/2008 8935 8930 9405
1/31/2009 8586 8450 8612
2/28/2009 8294 8076 7695
3/31/2009 8558 8367 8369
4/30/2009 8718 8428 9170
5/31/2009 9293 9524 9683
6/30/2009 9284 9343 9702
7/31/2009 9406 9645 10436
8/31/2009 9425 9588 10813
9/30/2009 9510 9739 11217
10/31/2009 9632 10059 11008
11/30/2009 9802 10412 11668
12/31/2009 9771 10619 11894
1/31/2010 9544 9846 11466
2/28/2010 9705 10211 11821
3/31/2010 9828 10084 12535
4/30/2010 9942 10280 12733
5/31/2010 9488 9569 11716
6/30/2010 9478 9599 11102
7/31/2010 9601 10249 11880
8/31/2010 9478 9989 11344
9/30/2010 9733 10714 12356
10/31/2010 9942 11248 12827
11/30/2010 9875 11208 12828
12/31/2010 10223 12406 13686
1/31/2011 10457 12530 14010
2/28/2011 10535 12695 14490
3/31/2011 10672 12958 14496
4/30/2011 10837 13406 14925
5/31/2011 10457 12723 14756
6/30/2011 10106 12086 14510
7/31/2011 10291 12444 14215
8/31/2011 11237 12568 13443
9/30/2011 11452 10716 12498
10/31/2011 10457 11426 13864
11/30/2011 10525 11172 13833
12/31/2011 10270 10753 13975
1/31/2012 9587 11019 14601
2/29/2012 9557 11317 15233
3/31/2012 9200 10849 15734
4/30/2012 9180 10803 15635
5/31/2012 9618 9816 14695
6/30/2012 9241 10355 15301
7/31/2012 9292 11025 15513
8/31/2012 9261 11168 15863
9/30/2012 9047 11359 16273
10/31/2012 8884 10919 15972
11/30/2012 8792 10925 16065
12/31/2012 8670 10640 16211
1/31/2013 8650 10895 17051
2/28/2013 8507 10450 17283
3/31/2013 8568 10520 17931
4/30/2013 8263 10226 18276
5/31/2013 8140 9997 18704
6/30/2013 8110 9526 18453
7/31/2013 8212 9655 19391
8/31/2013 8303 9984 18830
9/30/2013 8079 9729 19420
10/31/2013 8018 9585 20313
11/30/2013 7988 9509 20932
12/31/2013 8100 9626 21462
1/31/2014 8059 9655 20720
2/28/2014 8232 10257 21668
3/31/2014 8191 10299 21850
4/30/2014 8303 10550 22011
5/31/2014 8365 10247 22528
6/30/2014 8487 10308 22994
7/31/2014 8232 9794 22676
8/31/2014 8252 9692 23584
9/30/2014 7967 9089 23253
10/31/2014 7886 9015 23821
11/30/2014 7784 8649 24461
12/31/2014 7641 7989 24400
1/31/2015 7600 7722 23667
2/28/2015 7733 7921 25028
3/31/2015 7662 7514 24632
4/30/2015 7672 7945 24868
5/31/2015 7682 7731 25188
6/30/2015 7682 7864 24700
7/31/2015 7600 7029 25218
8/31/2015 7539 6965 23696
9/30/2015 7529 6727 23110
10/31/2015 7539 6697 25059
11/30/2015 6948 6211 25134
12/31/2015 6673 6019 24737
1/31/2016 6520 5918 23510
2/29/2016 6449 5822 23478
3/31/2016 6714 6044 25071
4/30/2016 7305 6559 25168
5/31/2016 7234 6546 25620
6/30/2016 7509 6817 25686
7/31/2016 7173 6468 26633
8/31/2016 7060 6354 26671
9/30/2016 7305 6553 26676
10/31/2016 7213 6521 26189
11/30/2016 7356 6608 27159
12/31/2016 7488 6728 27696
1/31/2017 7478 6737 28221
2/28/2017 7478 6751 29342
3/31/2017 7213 6571 29376
4/30/2017 7040 6472 29678
5/31/2017 6908 6386 30095
6/30/2017 6908 6374 30283
7/31/2017 7091 6518 30906
8/31/2017 7132 6544 31001
9/30/2017 7122 6535 31640
10/31/2017 7264 6675 32378
11/30/2017 7254 6644 33372
12/31/2017 7492 6842 33743
1/31/2018 7625 6978 35674
2/28/2018 7472 6857 34360
3/31/2018 7431 6815 33486
4/30/2018 7645 6991 33615
5/31/2018 7727 7090 34424
6/30/2018 7431 6842 34636
7/31/2018 7257 6696 35925
8/31/2018 7084 6577 37096
9/30/2018 7206 6704 37307
10/31/2018 6982 6559 34757
Class A Class C Class W
------------------ ------------------ ------------------
AIG Average Average Average
Commodity Annual Cumulative Annual Cumulative Annual Cumulative
Strategy Fund# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -9.22% -3.75% -5.48% -4.53% -3.64% -3.64%
--------------------------------------------------------------------------
5 Year Return -3.88% -12.93% -3.31% -15.50% -2.48% -11.81%
--------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
Since Inception* -3.53% -25.92% -3.57% -30.42% -2.74% -24.21%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 11/04/08; Class C: 11/04/08; Class W: 11/04/08
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the 12 month period ended October 31, 2018, the AIG Commodity Strategy Fund
Class A returned -9.22%, compared to -1.73% for the Bloomberg Commodity Index
and 7.35% for the S&P 500 Index. (The performance data and graph do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
++ The Bloomberg Commodity Index is a broadly diversified commodity price index
made up of 22 exchange-traded futures on physical commodities weighted to
account for economic significance and market liquidity.
@ The S&P 500 Index is an unmanaged, weighted index of 500 large company stocks
that is widely recognized as representative of the performance of the U.S.
stock market.
Indices are not managed and an investor cannot invest directly into an index.
104
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG ESG Dividend Fund
For the annual period ended October 31, 2018, Class A shares of the AIG ESG
Dividend Fund returned 4.26% (before maximum sales charge). The Fund
outperformed its benchmark, the Russell 1000 Value Index/*/ (the "Index"),
which returned 3.03% for the same period.
The Fund seeks to provide total return (including capital appreciation and
current income) through a "buy and hold" strategy based on value and
Environmental, Social and Governance (ESG) investing. The Fund uses a
disciplined, proprietary rules-based screening process to identify companies
that meet the Fund's ESG standards. Companies must not generate significant
revenues from certain types of businesses that include weapons, alcohol,
tobacco, gambling and nuclear energy. Companies must not have a poor track
record in how they interact with employees, customers, the environment and the
society in which they do business. After identifying companies from the Russell
1000 Index/*/ that meet the Fund's ESG standards, the Fund then selects up to
40 dividend yielding stocks using selection criteria that will generally
include dividend yield as well as a combination of factors that relate to
profitability, valuation and ESG criteria.
During the annual period, the Fund outperformed the Index primarily because of
effective stock selection in the Consumer Discretionary sector. Individual
security selection in and an overweight allocation to Information Technology
also contributed positively. Security selection among Utilities companies and
an underweight to Financials, which underperformed the Index during the annual
period, further boosted the Fund's relative results during the annual period.
These gains were partially offset by the detracting effect of having
underweight exposure to and weak security selection in the strongly performing
Health Care sector. Stock selection in and an overweight to Industrials, which
underperformed the Index during the annual period, also hurt. Having an
overweight to Consumer Staples, which lagged the Index during the annual
period, further dampened the Fund's relative results.
The individual stocks that contributed most positively to the Fund's relative
results during the annual period included fashion retailer Nordstrom, utilities
company AES Corp., computer software developer CA, Inc., pharmaceutical
products researcher and developer AbbVie and non-alcoholic beverages
manufacturer Keurig Dr. Pepper. Not owning industrials conglomerate General
Electric Co. also proved beneficial, as its stock declined significantly during
the annual period. Conversely, several Industrials companies headed the list of
the primary individual stock detractors from the Fund's relative results during
the annual period. These included integrated mail and document management
systems company Pitney Bowes, Inc., home and office products manufacturer
Newell Brands, Inc. and transportation equipment manufacturer Cummins, Inc.
Dental products, veterinary supplies and rehab supplies distributor Patterson
Cos., Inc. and asset management company Legg Mason, Inc. were also notable
laggards during the annual period. Having no exposure to pharmaceuticals
company Merck, whose stock appreciated substantially during the annual period,
hurt as well.
--------
Past performance is no guarantee of future results.
* The Russell 1000 Value Index is a market-capitalization weighted index of
those firms in the Russell 1000 Index with lower price-to-book ratios and lower
forecasted growth values. The Russell 1000 Index is a comprehensive large-cap
index measuring the performance of the largest 1,000 U.S. incorporated
companies. Indices are not managed and an investor cannot invest directly into
an index.
The Fund employs a Disciplined Strategy and will not deviate from its strategy
(except to the extent necessary to comply with federal tax laws or other
applicable laws). If the Fund is committed to a strategy that is unsuccessful,
the Fund will not meet its investment goal. Because the Fund will not use
certain techniques available to other mutual funds to reduce stock market
exposure, the Fund may be more susceptible to general market declines than
other mutual funds. ESG screening limits the availability of investment
opportunities for the Fund. If the Fund changes its ESG standards or a company
stops meeting the Fund's ESG standards, the Fund may sell the affected
investments even if this means the Fund loses money. The performance of the
Fund may be subject to greater fluctuation since its strategy involves holding
a limited number of securities.
The Fund's holdings are subject to change. Accordingly, securities listed may
or may not be a part of current portfolio construction.
105
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in AIG ESG Dividend Fund Class A shares would
be valued at $10,354. The same amount invested in securities mirroring the
performance of the Russell 1000(R) Value Index would be valued at $11,114.
[CHART]
AIG ESG
Dividend Fund Russell
Date Class A# 1000(R) Value
---------- --------------- -------------
12/15/2016 9,422 10,000
12/31/2016 9,227 9,923
1/31/2017 9,315 9,994
2/28/2017 9,648 10,353
3/31/2017 9,655 10,248
4/30/2017 9,686 10,228
5/31/2017 9,642 10,218
6/30/2017 9,755 10,385
7/31/2017 9,818 10,523
8/31/2017 9,598 10,401
9/30/2017 9,918 10,709
10/31/2017 9,931 10,787
11/30/2017 10,220 11,117
12/31/2017 10,487 11,279
1/31/2018 10,982 11,715
2/28/2018 10,545 11,156
3/31/2018 10,157 10,960
4/30/2018 10,035 10,996
5/31/2018 10,009 11,061
6/30/2018 10,372 11,088
7/31/2018 10,677 11,527
8/31/2018 10,781 11,698
9/30/2018 10,738 11,721
10/31/2018 10,354 11,114
Class A Class C Class W
------------------ ------------------ ------------------
Average Average Average
AIG ESG Annual Cumulative Annual Cumulative Annual Cumulative
Dividend Fund# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -1.71% 4.26% 2.59% 3.59% 4.48% 4.48%
--------------------------------------------------------------------------
5 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
Since Inception* 1.87% 9.89% 4.47% 8.56% 5.38% 10.33%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 12/16/16; Class C: 12/16/16; Class W: 12/16/16
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the 12 month period ended October 31, 2018, the AIG ESG Dividend Fund
Class A returned -1.71%, compared to 3.03% for the Russell 1000 Value Index.
(The performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
++ The Russell 1000 Value Index is a market-capitalization weighted index of
those firms in the Russell 1000 Index with lower price-to-book ratios and
lower forecasted growth values.
Indices are not managed and an investor cannot invest directly into an index.
106
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Focused Alpha Large-Cap Fund
For the annual period ended October 31, 2018, Class A shares of the AIG Focused
Alpha Large-Cap Fund returned 7.46% (before maximum sales charge). The Fund
outperformed its benchmark, the Russell 1000(R) Index,/*/ which returned 6.98%
for the same period.
The AIG Focused Alpha Large-Cap Fund brings together Marsico Capital Management
LLC ("Marsico") and BlackRock Investment Management ("BlackRock"), well-known
equity managers who each contribute stock picks to the Fund's portfolio.
Marsico emphasizes large-cap growth investing, while BlackRock favors a
large-cap value investment style. The Fund managers' combined stock picks,
blending different investment styles, are designed to offer the potential for
attractive returns over the long term.
Below, Tom Marsico, portfolio manager at Marsico Capital Management, discusses
Marsico's portion of the Fund's performance during the annual period. Marsico
manages the large-cap growth portion of the Fund's portfolio.
Our portion of the Fund outperformed the Russell 1000(R) Index during the
annual period in large part because our portion of the Fund emphasizes
investments in U.S. large-cap growth equities, which outperformed U.S.
large-cap value equities during the annual period.
Sector allocation overall is not a consideration in our portfolio construction
but rather a residual of our stock selection process. Nevertheless, sector
allocation contributed positively to our portion of the Fund's relative results
during the annual period. Throughout the annual period, we maintained our
portion of the Fund's overweight allocation to the Information Technology
sector. This positioning proved prudent, as Information Technology was the
strongest performing sector in the Russell 1000(R) Index during the annual
period. Also, our portion of the Fund benefited from an overweight allocation
in Consumer Discretionary, which was the second-best performing sector in the
Russell 1000(R) Index during the annual period, and from having no exposure to
Financials, which significantly underperformed the Russell 1000(R) Index during
the annual period. There were no notable detractors from our portion of the
Fund's results from an allocation perspective during the annual period.
Stock selection as a whole detracted from our portion of the Fund's relative
results during the annual period. More specifically, stock selection in the
Communication Services, Information Technology and Consumer Discretionary
sectors dampened returns. Within Communication Services, positions in social
media company Facebook, Inc, search engine Alphabet, Inc. and video game maker
Activision Blizzard, Inc. were notable detractors. In Information Technology,
semiconductor chipmaker Applied Materials, Inc. experienced a double-digit
share price decline. In Consumer Discretionary, China-based retail conglomerate
Alibaba Group Holdings, disappointed most. We sold our portion of the Fund's
positions in Facebook, Inc and Applied Materials, Inc, during the annual
period. Notably, we maintained our conviction at the end of the annual period
in the long-term opportunity for Alibaba Group Holdings, Ltd., despite the
looming U.S.-China trade war and its implications.
Such detractors were partially offset by our portion of the Fund's position in
e-commerce retailer Amazon.com, Inc. which saw its shares rise significantly
during the annual period, making it a meaningful positive contributor to
relative results. In Information Technology, shares of salesforce.com, Inc.
surged prior to us selling our portion of the Fund's position in the software
company. Payments processing companies Visa, Inc. and PayPal Holdings, Inc.
also performed well, adding to returns. Elsewhere, a position in hospital
operator UnitedHealth Group, Inc. was an especially strong performer during the
annual period.
Below, Todd Burnside, portfolio manager at BlackRock Investment Management,
discusses BlackRock's portion of the Fund's performance during the annual
period. BlackRock manages the large-cap value portion of the Fund's portfolio.
Our portion of the Fund outperformed the Russell 1000(R) Index during the
annual period, due primarily to stock selection. Given the focused nature of
our portion of the Fund, sector allocation is not particularly relevant to our
strategy, though it also contributed positively to relative results during the
annual period. Further, while our process, focused on stock-specific risk, is
designed to limit
107
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
the impact of macroeconomic factors on performance, it is worth noting that our
emphasis on high quality businesses, durable cash flows and valuations
benefited relative results during times of heightened market volatility
throughout the annual period, especially in October 2018 when the U.S. equity
markets fell significantly.
Stock selection in Industrials, Communication Services and Utilities
contributed most positively to our portion of the Fund's results. Within
Industrials, Norfolk Southern Corp. added most, as the operating income of the
railroad transportation company hit new highs, aided by a pick-up in industrial
activity. Within Communication Services, a position in Verizon Communications,
Inc. was a notable contributor. In Utilities, FirstEnergy Corp. contributed
most positively, with its share price appreciating due to strong earnings
results. Conversely, weak security selection in Health Care, Consumer
Discretionary and Energy detracted most from our portion of the Fund's relative
performance during the annual period. Biotechnology firm Biogen, Inc. was the
largest detractor within Health Care. Not owning the strongly performing
e-commerce giant Amazon.com, Inc. detracted from relative performance in
Consumer Discretionary. In Energy, a position in Canadian integrated energy
company Suncor Energy, Inc. hurt most.
From a sector allocation perspective, having a neutral exposure to
Communication Services, an overweight in Health Care and no exposure to
Materials, each relative to the Russell 1000(R) Index, contributed most
positively. Within Communication Services, strong performance came from the
Media and Diversified Telecommunication Services industries. Health Care
benefited from a defensive rotation among investors and strong corporate
earnings within select industries, including Medical Devices. Having no
exposure to Materials boosted relative results, as the ongoing U.S.-China trade
tariff dispute weighed on the sector broadly. Conversely, having an underweight
to Information Technology and overweights to Financials and Industrials,
relative to the Russell 1000(R) Index, detracted.
Also adding value to our portion of the Fund's results during the annual period
was exposure to risk and style factors relative to the Russell 1000(R) Index.
The top style factor positive contributors to active risk were an overweight to
momentum and an underweight to volatility, the latter adding particular value
during spans of market stress.
--------
Past performance is no guarantee of future results.
* The Russell 1000(R) Index offers investors access to the extensive large-cap
segment of the U.S. equity universe representing approximately 92% of the U.S.
market. The Russell 1000(R) is constructed to provide a comprehensive and
unbiased barometer for the large-cap segment and is completely reconstituted
annually to ensure new and growing equities are reflected. The Russell 1000(R)
includes the largest 1,000 securities in the Russell 3000(R) Index. Indices are
not managed and an investor cannot invest directly into an index.
Because focused mutual funds are less diversified than typical mutual funds,
the performance of each holding in a focused fund has a greater impact upon the
overall portfolio, which increases risk.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be part of current portfolio
construction.
108
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in the AIG Focused Alpha Large-Cap
Fund Class A shares would be valued at $34,874. The same amount invested in
securities mirroring the performance of the Russell 1000(R) Index would be
valued at $35,238.
[CHART]
Focused Alpha Large-Cap Russell 1000(R) Index@
Fund Class A#
10/31/2008 9,422 10,000
11/30/2008 8,633 9,244
12/31/2008 8,875 9,392
1/31/2009 8,466 8,625
2/28/2009 7,635 7,733
3/31/2009 8,015 8,410
4/30/2009 8,540 9,261
5/31/2009 9,088 9,773
6/30/2009 8,956 9,797
7/31/2009 9,710 10,545
8/31/2009 9,901 10,928
9/30/2009 10,355 11,371
10/31/2009 10,061 11,120
11/30/2009 10,745 11,775
12/31/2009 10,929 12,062
1/31/2010 10,509 11,628
2/28/2010 10,826 12,011
3/31/2010 11,431 12,749
4/30/2010 11,453 12,985
5/31/2010 10,469 11,955
6/30/2010 9,711 11,290
7/31/2010 10,498 12,075
8/31/2010 10,186 11,534
9/30/2010 11,562 12,594
10/31/2010 12,300 13,084
11/30/2010 12,568 13,127
12/31/2010 13,143 14,003
1/31/2011 13,412 14,340
2/28/2011 14,107 14,839
3/31/2011 14,776 14,877
4/30/2011 15,420 15,325
5/31/2011 15,053 15,160
6/30/2011 14,920 14,895
7/31/2011 14,859 14,572
8/31/2011 13,732 13,733
9/30/2011 12,075 12,708
10/31/2011 13,311 14,133
11/30/2011 12,919 14,096
12/31/2011 12,953 14,213
1/31/2012 13,860 14,906
2/29/2012 14,789 15,560
3/31/2012 15,633 16,047
4/30/2012 15,305 15,954
5/31/2012 14,203 14,974
6/30/2012 14,563 15,547
7/31/2012 14,774 15,731
8/31/2012 15,133 16,113
9/30/2012 15,477 16,528
10/31/2012 15,039 16,249
11/30/2012 15,203 16,378
12/31/2012 15,159 16,548
1/31/2013 15,887 17,445
2/28/2013 16,231 17,680
3/31/2013 17,122 18,362
4/30/2013 17,506 18,694
5/31/2013 18,160 19,109
6/30/2013 17,768 18,849
7/31/2013 18,512 19,858
8/31/2013 18,070 19,310
9/30/2013 18,790 19,983
10/31/2013 19,926 20,863
11/30/2013 20,785 21,448
12/31/2013 21,387 22,027
1/31/2014 21,103 21,323
2/28/2014 22,214 22,335
3/31/2014 21,404 22,478
4/30/2014 20,887 22,583
5/31/2014 21,740 23,102
6/30/2014 21,921 23,628
7/31/2014 22,180 23,246
8/31/2014 23,136 24,206
9/30/2014 22,963 23,782
10/31/2014 23,644 24,363
11/30/2014 24,169 25,001
12/31/2014 24,339 24,943
1/31/2015 23,468 24,258
2/28/2015 24,807 25,659
3/31/2015 24,523 25,340
4/30/2015 24,257 25,520
5/31/2015 24,761 25,854
6/30/2015 24,715 25,369
7/31/2015 25,128 25,858
8/31/2015 23,734 24,302
9/30/2015 22,973 23,636
10/31/2015 24,348 25,548
11/30/2015 24,229 25,633
12/31/2015 23,872 25,172
1/31/2016 22,589 23,817
2/29/2016 22,253 23,809
3/31/2016 23,495 25,467
4/30/2016 23,261 25,606
5/31/2016 23,831 26,054
6/30/2016 23,403 26,113
7/31/2016 24,207 27,108
8/31/2016 24,421 27,144
9/30/2016 24,574 27,165
10/31/2016 24,116 26,636
11/30/2016 25,256 27,686
12/31/2016 25,287 28,206
1/31/2017 26,091 28,773
2/28/2017 27,170 29,887
3/31/2017 27,109 29,906
4/30/2017 27,933 30,222
5/31/2017 28,503 30,608
6/30/2017 29,165 30,821
7/31/2017 30,315 31,432
8/31/2017 31,282 31,530
9/30/2017 31,751 32,201
10/31/2017 32,443 32,940
11/30/2017 33,308 33,944
12/31/2017 33,096 34,323
1/31/2018 36,207 36,207
2/28/2018 34,674 34,878
3/31/2018 33,463 34,086
4/30/2018 33,541 34,202
5/31/2018 35,063 35,075
6/30/2018 34,985 35,302
7/31/2018 36,107 36,520
8/31/2018 37,796 37,778
9/30/2018 37,452 37,922
10/31/2018 34,874 35,238
Class A Class C Class W
------------------ ------------------ ------------------
AIG Average Average Average
Focused Alpha Annual Cumulative Annual Cumulative Annual Cumulative
Large-Cap Fund# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 1.27% 7.46% 5.80% 6.78% 7.60% 7.60%
--------------------------------------------------------------------------
5 Year Return 10.52% 75.01% 11.12% 69.41% 11.99% 76.16%
--------------------------------------------------------------------------
10 Year Return 13.31% 270.13% N/A N/A N/A N/A
--------------------------------------------------------------------------
Since Inception* 9.17% 227.35% 14.01% 143.08% 14.93% 156.56%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 12/27/05; Class C: 01/24/12; Class W: 01/24/12
# For the purpose of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and the CDSC with respect to the Class C
shares has been deducted as applicable.
For the 12 month period ended October 31, 2018, the AIG Focused Alpha Large-Cap
Class A returned 1.27%, compared to 6.98% for the Russell 1000(R) Index. (The
performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of the Fund
Shares.)
The Fund acquired the assets and assumed the liabilities of the SunAmerica
Focused Alpha Large-Cap Fund, Inc. (the "Predecessor Fund"), a closed-end
investment company also advised by SunAmerica, in a reorganization that
occurred on January 23, 2012 (the "Reorganization"). Prior to the
Reorganization, the Fund had no operating history and the performance
information in the graph and the table reflects the performance of the
Predecessor Fund through the Reorganization. The Predecessor Fund may have
performed differently if it were an open-end fund since closed-end funds are
generally not subject to the cash flow fluctuations of an open-end fund. The
performance figures above for the period prior to the Reorganization were
calculated using the actual operating expenses of the Predecessor Fund, which
were lower than those of the Fund. If the Fund's higher operating expenses were
applied to the performance for the period prior to the Reorganization, the
performance would have been lower.
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum sales charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
@ The Russell 1000(R) Index offers investors access to the extensive large-cap
segment of the U.S. equity universe representing approximately 92% of the
U.S. market. The Russell 1000(R) is constructed to provide a comprehensive
and unbiased barometer for the large-cap segment and is completely
reconstructed annually to ensure new and growing equities are reflected. The
Russell 1000(R) includes the largest 1,000 securities in the Russell 3000(R)
Index. Indices are not managed and an investor cannot invest directly into an
index.
109
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Focused Multi-Cap Growth Fund
For the annual period ended October 31, 2018, Class A shares of the AIG Focused
Multi-Cap Growth Fund returned 5.41% (before maximum sales charge). The Fund
underperformed its benchmark, the Russell 3000(R) Growth Index,/*/ which
returned 10.20% for the same period.
The AIG Focused Multi-Cap Growth Fund brings together Marsico Capital
Management LLC ("Marsico") and BAMCO Inc. ("BAMCO"), well-known equity managers
who each contribute stock picks to the Fund's portfolio. Marsico emphasizes
large-cap growth investing, while BAMCO focuses on small/mid-cap growth
opportunities. The Fund managers' combined stock picks, blending different
investment styles, are designed to offer the potential for attractive returns
over the long term.
Below, Tom Marsico, portfolio manager at Marsico Capital Management, discusses
Marsico's portion of the Fund's performance during the annual period. Marsico
manages the large-cap growth portion of the Fund's portfolio.
Our portion of the Fund underperformed the Russell 3000(R) Growth Index during
the annual period due primarily to stock selection. Our portion of the Fund was
held back most by stock selection in the Communication Services, Information
Technology and Consumer Discretionary sectors. Within Communication Services,
positions in social media company Facebook, search engine Alphabet, Inc. and
video game maker Activision Blizzard, Inc. were notable detractors. In
Information Technology, semiconductor chipmaker Applied Materials experienced a
double-digit share price decline. In Consumer Discretionary, China-based retail
conglomerate Alibaba Group Holdings, Ltd. disappointed most. We sold our
portion of the Fund's positions in Facebook and Applied Materials during the
annual period. Notably, we maintained our conviction at the end of the annual
period in the long-term opportunity for Alibaba Group Holdings, Ltd., despite
the looming U.S.-China trade war and its implications.
Such detractors were partially offset by effective stock selection in the
Health Care sector overall. A position in hospital operator UnitedHealth Group,
Inc. was an especially strong performer during the annual period. Elsewhere,
retailing holding Amazon.com, Inc. saw its shares rise significantly during the
annual period, making it a meaningful positive contributor to relative results.
In Information Technology, shares of salesforce.com, Inc. surged prior to us
selling our portion of the Fund's position in the software company. Payments
processing companies Visa, Inc. and PayPal Holdings, Inc. also performed well,
adding to returns.
Sector allocation overall is not a consideration in our portfolio construction
but rather a residual of our stock selection process. Nevertheless, sector
allocation contributed positively to our portion of the Fund's relative results
during the annual period. Throughout the annual period, we maintained our
portion of the Fund's overweight allocation to the Information Technology
sector. This positioning proved prudent, as Information Technology was the
second-strongest performing sector in the Russell 3000(R) Growth Index during
the annual period. Also, our portion of the Fund benefited from an overweight
allocation in Consumer Discretionary, which was the best performing sector in
the Russell 3000(R) Growth Index during the annual period, and from an
underweight in Industrials, which underperformed the Russell 3000(R) Growth
Index during the annual period. This positive sector allocation impact was
partially offset by our portion of the Fund's 4% average cash weighting, which
was elevated further near the end of the annual period, and which detracted
during an annual period when the Russell 3000(R) Growth Index rallied.
Below, Ron Baron, portfolio manager at BAMCO, Inc., discusses BAMCO's portion
of the Fund's performance during the annual period. BAMCO manages the
small/mid-cap portion of the Fund's portfolio.
Our portion of the Fund produced an absolute gain during the annual period yet
trailed the Russell 3000(R) Growth Index on a relative basis, as negative stock
selection overshadowed positive sector allocation. Stock selection detracted
from relative performance during the annual period primarily due to the
underperformance of investments within the Consumer Discretionary and
Financials sectors. Adverse stock selection in Consumer Discretionary was
driven by timeshare company Marriott Vacations Worldwide Corp. and
110
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
electric vehicle maker Tesla, Inc. Shares of Marriott Vacations Worldwide Corp.
fell after initially stated synergies from its acquisition of Interval Leisure
Group missed market expectations. Tesla's stock price declined on investor
concerns around CEO Elon Musk's announcement of potential privatization, which
led to lawsuits and investigations. Weakness in Financials was attributable to
the weak performance of Arch Capital Group, Ltd., a specialty insurance company
based in Bermuda. Its shares declined after a mortgage insurance competitor cut
its premium rates, leading to concerns about industry pricing pressure.
Additionally, Freddie Mac introduced a new pilot program for distributing
mortgage insurance, sparking concerns about greater competition.
These detractors were partially offset by the outperformance of our portion of
the Fund's investments in Health Care, Communication Services and Industrials.
Our portion of the Fund's only holding in Health Care, veterinary diagnostic
leader IDEXX Laboratories, Inc., boosted relative results, as competitive
trends remained strong. Strength in Communication Services and Industrials was
due to the strong performance of English Premier League professional sports
team Manchester United PLC and real estate information and marketing services
company CoStar Group, Inc., respectively. Manchester United's stock price
reacted positively to other Premier League teams selling stakes in their clubs.
CoStar Group's shares gained after the company reported consecutive quarters of
strong bookings growth.
Sector allocation contributed positively to our portion of the Fund's
performance, driven by a meaningful overweight exposure to the top performing
Consumer Discretionary sector through sizable positions in Vail Resorts, Inc.,
Hyatt Hotels Corp., and Tesla, Inc. Our portion of the Fund's exposure to
Consumer Discretionary was geared toward experiential businesses with either
unique real estate or disruptive innovations insulated from the Amazon.com,
Inc. effect. Underweight exposures to the lagging Materials, Communication
Services, Industrials, Real Estate and Energy sectors also added value.
Somewhat offsetting these positive contributors was our portion of the Fund's
significantly underweight exposure to the strongly performing Information
Technology sector, which detracted. In particular, a lack of exposure to Apple
and other Technology Hardware Storage & Peripherals stocks, which were up
sharply during the annual period, hurt relative results. All that said, at
BAMCO, we construct our portion of the Fund from the bottom up, one stock at a
time. Each stock is included in the portfolio if it meets our rigorous
investment criteria. To help manage risk, we are aware of our sector and
security weights, but we do not include a holding to achieve a target sector
allocation or to approximate an index. Exposure to any given sector is purely a
result of our stock selection process.
--------
Past performance is no guarantee of future results.
* The Russell 3000(R) Growth Index measures the performance of those Russell
3000(R) Index companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 3000(R) Index consists of the 3,000 largest U.S.
companies based on total market capitalization. Indices are not managed and an
investor cannot invest directly into an index.
Because focused mutual funds are less diversified than typical mutual funds,
the performance of each holding in a focused fund has a greater impact upon the
overall portfolio, which increases risk. Stocks of small-cap and mid-cap
companies are generally more volatile than and not as readily marketable as
those of larger companies, and may have fewer resources and a greater risk of
business failure than do large companies.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be part of current portfolio
construction.
111
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in the AIG Focused Multi-Cap Growth
Fund Class A shares would be valued at $37,587. The same amount invested in
securities mirroring the performance of the Russell 3000(R) Growth Index would
be valued at $41,645.
[CHART]
Focused Multi-Cap Russell 3000(R)
Growth Fund Class A# Growth Index@
10/31/2008 9,423 10,000
11/30/2008 8,494 9,174
12/31/2008 8,539 9,364
1/31/2009 8,137 8,894
2/28/2009 7,535 8,207
3/31/2009 7,983 8,939
4/30/2009 8,947 9,832
5/31/2009 9,349 10,311
6/30/2009 9,188 10,442
7/31/2009 10,080 11,189
8/31/2009 10,285 11,412
9/30/2009 10,873 11,917
10/31/2009 10,597 11,704
11/30/2009 11,102 12,397
12/31/2009 11,485 12,829
1/31/2010 11,017 12,268
2/28/2010 11,431 12,698
3/31/2010 12,283 13,453
4/30/2010 12,599 13,636
5/31/2010 11,690 12,606
6/30/2010 11,011 11,899
7/31/2010 11,899 12,743
8/31/2010 11,459 12,120
9/30/2010 13,051 13,444
10/31/2010 13,686 14,081
11/30/2010 14,182 14,281
12/31/2010 15,182 15,092
1/31/2011 15,376 15,437
2/28/2011 16,137 15,975
3/31/2011 17,003 16,042
4/30/2011 17,672 16,583
5/31/2011 16,925 16,390
6/30/2011 16,895 16,145
7/31/2011 17,051 15,944
8/31/2011 16,021 15,059
9/30/2011 14,145 13,900
10/31/2011 15,615 15,477
11/30/2011 15,052 15,469
12/31/2011 14,875 15,421
1/31/2012 15,847 16,360
2/29/2012 16,811 17,123
3/31/2012 17,672 17,670
4/30/2012 17,719 17,622
5/31/2012 16,516 16,482
6/30/2012 16,779 16,960
7/31/2012 17,138 17,147
8/31/2012 17,273 17,620
9/30/2012 17,592 17,979
10/31/2012 17,146 17,452
11/30/2012 17,321 17,732
12/31/2012 17,023 17,766
1/31/2013 17,961 18,558
2/28/2013 18,259 18,786
3/31/2013 19,171 19,511
4/30/2013 19,595 19,882
5/31/2013 20,137 20,301
6/30/2013 19,776 19,939
7/31/2013 20,525 21,032
8/31/2013 20,200 20,667
9/30/2013 21,400 21,630
10/31/2013 22,366 22,540
11/30/2013 22,772 23,200
12/31/2013 23,108 23,847
1/31/2014 23,099 23,189
2/28/2014 24,437 24,376
3/31/2014 23,334 24,102
4/30/2014 22,807 24,003
5/31/2014 23,759 24,711
6/30/2014 24,399 25,273
7/31/2014 24,344 24,795
8/31/2014 25,381 25,950
9/30/2014 25,108 25,496
10/31/2014 25,654 26,234
11/30/2014 25,871 27,015
12/31/2014 25,647 26,814
1/31/2015 25,258 26,388
2/28/2015 26,202 28,158
3/31/2015 26,231 27,900
4/30/2015 25,706 27,964
5/31/2015 26,348 28,406
6/30/2015 26,669 27,974
7/31/2015 27,078 28,854
8/31/2015 25,365 27,067
9/30/2015 24,800 26,314
10/31/2015 26,134 28,521
11/30/2015 26,212 28,673
12/31/2015 25,866 28,180
1/31/2016 24,591 26,496
2/29/2016 24,647 26,472
3/31/2016 25,943 28,275
4/30/2016 25,533 28,055
5/31/2016 26,021 28,615
6/30/2016 25,777 28,501
7/31/2016 26,841 29,885
8/31/2016 27,140 29,771
9/30/2016 27,229 29,904
10/31/2016 26,331 29,114
11/30/2016 26,265 29,890
12/31/2016 26,216 30,263
1/31/2017 27,613 31,242
2/28/2017 28,458 32,500
3/31/2017 29,101 32,876
4/30/2017 30,148 33,617
5/31/2017 30,982 34,404
6/30/2017 31,557 34,406
7/31/2017 32,796 35,271
8/31/2017 33,821 35,864
9/30/2017 34,384 36,445
10/31/2017 35,556 37,790
11/30/2017 36,288 38,934
12/31/2017 35,772 39,217
1/31/2018 39,844 41,898
2/28/2018 38,802 40,792
3/31/2018 37,452 39,799
4/30/2018 37,428 39,930
5/31/2018 39,587 41,740
6/30/2018 39,648 42,136
7/31/2018 39,881 43,333
8/31/2018 42,482 45,728
9/30/2018 41,451 45,879
10/31/2018 37,587 41,645
Class A Class C Class W
------------------ ------------------ ------------------
AIG Average Average Average
Focused Multi-Cap Annual Cumulative Annual Cumulative Annual Cumulative
Growth# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -0.65% 5.41% 3.79% 4.74% 5.64% 5.64%
---------------------------------------------------------------------------
5 Year Return 9.64% 68.06% 10.20% 62.51% 11.14% 69.54%
---------------------------------------------------------------------------
10 Year Return 14.16% 298.91% N/A N/A N/A N/A
---------------------------------------------------------------------------
Since Inception* 9.67% 261.12% 13.03% 129.23% 13.98% 142.63%
---------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 07/28/05; Class C: 01/24/12; Class W: 01/24/12
# For the purpose of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and the CDSC with respect to the Class C
shares has been deducted as applicable.
For the 12 month period ended October 31, 2018, the AIG Focused Multi-Cap
Growth Class A returned -0.65%, compared to 10.20% for the Russell 3000(R)
Growth Index. (The performance data and graph do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
the Fund Shares.)
The Fund acquired the assets and assumed the liabilities of the SunAmerica
Focused Alpha Growth Fund, Inc. (the "Predecessor Fund"), a closed-end
investment company also advised by SunAmerica, in a reorganization that
occurred on January 23, 2012 (the "Reorganization"). Prior to the
Reorganization, the Fund had no operating history and the performance
information in the graph and the table reflects the performance of the
Predecessor Fund through the Reorganization. The Predecessor Fund may have
performed differently if it were an open-end fund since closed-end funds are
generally not subject to the cash flow fluctuations of an open-end fund. The
performance figures above for the period prior to the Reorganization were
calculated using the actual operating expenses of the Predecessor Fund, which
were lower than those of the Fund. If the Fund's higher operating expenses were
applied to the performance for the period prior to the Reorganization, the
performance would have been lower.
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum sales charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
@ The Russell 3000(R) Growth Index measures the performance of those Russell
3000(R) Index companies with higher price-to-book ratios and higher
forecasted growth values. The Russell 3000(R) Index consists of the 3,000
largest U.S. companies based on total market capitalization. Indices are not
managed and an investor cannot invest directly into an index.
112
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Income Explorer Fund
For the annual period ended October 31, 2018, Class A shares of the AIG Income
Explorer Fund returned -3.42% (before maximum sales charge). The Fund
underperformed a blended benchmark composed of 60% MSCI World Index (Net)/*/
and 40% Bloomberg Barclays U.S. Aggregate Bond Index./*/ The blended benchmark
returned 0.01% for the same period. The components of the blended benchmark,
the Bloomberg Barclays U.S. Aggregate Bond Index, a broad-based fixed income
market index, returned -2.05%, and the MSCI World Index (Net), a broad-based
global equity market index, returned 1.16%, for the same annual period.
The Fund seeks to achieve its investment objective of high current income and,
secondarily, capital appreciation by strategically allocating its assets among
a preferred securities strategy, closed-end fund strategy and global dividend
equity strategy. Through this combination of investments, the portfolio
management teams expect to gain exposure to a broad range of income-producing
investments, including both fixed income and equity securities.
The Fund brings together SunAmerica Asset Management, LLC ("SunAmerica") and
Cohen & Steers Capital Management, Inc. ("Cohen & Steers"). SunAmerica, the
Fund's investment adviser, is responsible for determining the allocation among
the different sleeves of the Fund and for managing the global dividend equity
strategy. Cohen & Steers manages the preferred securities and closed-end fund
sleeves of the Fund.
Below, Timothy Pettee, lead portfolio manager of the Fund and SunAmerica's
Chief Investment Officer, discusses SunAmerica's portion of the Fund's
performance during the annual period. SunAmerica manages the global dividend
equity strategy sleeve of the Fund.
Our portion of the Fund underperformed the MSCI World Index during the annual
period. Individual stock selection as well as country allocation overall
detracted. Sector allocation as a whole contributed positively, albeit modestly.
From a sector perspective, having an underweighted allocation to and weak stock
selection in Information Technology, which was among the best-performing
sectors in the MSCI World Index during the annual period, detracted most.
Individual stock selection in Industrials, Utilities, Consumer Staples and
Telecommunication Services also dampened our portion of the Fund's relative
results. Having an underweight to Health Care, which outperformed the MSCI
World Index during the annual period, hurt as well. Only partially offsetting
these detractors was the positive contribution made by having an overweighted
allocation to and effective stock selection in the strongly performing Consumer
Discretionary sector. Having underweight exposures to the weaker Financials and
Industrials sectors and strong individual security selection among Health Care
companies also proved beneficial.
Regionally, positioning decisions in Taiwan, Brazil, Turkey, France and the
U.K. detracted the most from relative results. Conversely, our portion of the
Fund benefited from positioning in Russia, Norway and Sweden. Having an
underweight exposure to the U.S. negatively affected results, but it was more
than offset by effective domestic stock selection. Stock selection among
Australian equities also added value.
Among individual holdings, notable laggards included Taiwan-based touch screen
manufacturer General Interface Solution Holding, Ltd., Taiwan-based
semiconductor company Nanya Technology Corp., Turkish petroleum refiner Tupras
Turkiye Petrol Rafinerileri AS, Turkish petrochemicals manufacturer Petkim
Petrokimya Holding AS and Spain-based food products retailer Distribuidora
Internacional de Alimentacion SA. In addition, not owning U.S.-based
Information Technology giant Apple, Inc. hurt relative results. Positions in
U.S. department store retailer Macy's, Inc., U.S. discount retailer Kohl's
Corp., U.S. hard disk drive manufacturer Seagate Technology PLC, Russian oil
and gas company Lukoil PJSC and Norway-based fish farming plant Marine Harvest
ASA were among the top positive contributors to our portion of the Fund's
relative performance during the annual period.
113
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Below, Doug Bond and William Scapell, portfolio managers at Cohen & Steers,
discuss Cohen & Steers' portions of the Fund's performance during the annual
period. Mr. Bond and Mr. Scapell of Cohen & Steers manage the closed-end fund
and preferred securities sleeves of the Fund, respectively.
Closed-End Fund Sleeve: Closed-end funds overall posted negative returns during
the annual period, although there were pockets of strength by sector. All three
major closed-end fund categories - equity, taxable fixed income and municipal -
saw discounts to their underlying net asset values widen during the annual
period. That said, market conditions, including economic expansion, rising U.S.
interest rates and heightened volatility, resulted in equity closed-end funds
outperforming fixed income closed-end funds during the annual period. In that
context, the performance of our portion of the Fund relative to the Morningstar
All Taxable Fixed Income Index,+ an index that tracks the weighted average
market price of closed-end funds that invest in taxable fixed income
securities, benefited significantly by its out-of-Index allocation to equity
strategy closed-end funds.
Within our portion of the Fund's allocation to fixed income strategy closed-end
funds, an overweight in multi-sector fixed income closed-end funds helped
relative performance. Our portion of the Fund's underweight in emerging market
income closed-end funds also contributed positively to performance. Conversely,
its underweight in senior loan closed-end funds detracted.
Security selection contributed most positively to our portion of the Fund's
relative return in the multi-sector fixed income closed-end funds category,
followed by security selection in the preferred securities closed-end funds
category. On the other hand, security selection in the high yield, global
income and senior loan closed-end fund categories detracted from relative
results.
Preferred Securities Sleeve: Fixed income sectors generally posted negative
absolute returns during the annual period amid economic expansion and higher
interest rates, particularly in the U.S. Rate-sensitive sectors, such as U.S.
Treasuries and long-term investment grade corporate bonds declined most.
Shorter-duration and credit-sensitive sectors, including preferred securities,
declined as well but more modestly so. Preferred securities issued by banks,
which account for the majority of the preferred securities market, generally
posted modest declines, although they outperformed the broad preferred
securities sector. Banks reported earnings that remained healthy overall from a
credit perspective, with strong capital levels and low loan losses. However,
there were signs of a slowdown in loan growth, a trend toward higher deposit
costs, and increased spending on payrolls and technology upgrades. Contingent
capital securities, a relatively new and evolving source of Tier 1 capital
issued primarily by European banks, struggled during the annual period as
economic growth in Europe slowed from its strong pace in 2017 and as political
uncertainties in Italy, Spain and Germany added to the risk premiums demanded
by investors.
Relative to a blended index - 50% BofA Merrill Lynch Capital Securities Index++
and 50% BofA Merrill Lynch Fixed Rate Preferred Securities Index++ - which
tracks various aspects of the preferred securities market, our portion of the
Fund benefited from favorable security selection in the real estate, utilities
and telecommunications segments of the market. From an individual security
perspective, the top positive contributors were out-of-blended index issues
from Ally Financial and Wells Fargo, whose issues each saw solid gains during
the annual period. Also boosting the preferred securities sleeve's relative
results was its defensive positioning against rising interest rates by being,
for example, underweight low coupon, longer duration securities, which lagged
the blended index during the annual period.
114
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Detracting from our portion of the Fund's relative performance was security
selection in the banking and brokerage segments of the market. Individual
securities that hindered relative results most included an out-of-blended index
issue from European insurance company La Mondiale SAM, which experienced a
double-digit decline during the annual period.
--------
Past performance is no guarantee of future results. Diversification does not
guarantee a profit or protect against a loss.
* The MSCI World Index (Net) is a free float-adjusted market
capitalization-weighted index that is designed to measure the equity market
performance of developed markets. It consists of the following 23 developed
market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United
Kingdom and the United States. Net total return indices reinvest dividends
after the deduction of withholding taxes, using (for international indices) a
tax rate applicable to non-resident institutional investors who do not benefit
from double taxation treaties. The Bloomberg Barclays U.S. Aggregate Bond Index
represents securities that are U.S. domestic, taxable and dollar denominated.
The index covers components for government and corporate securities, mortgage
pass-through securities and asset-backed securities.
+ The Morningstar All Taxable Fixed Income Index is a weighted average of the
market price of closed-end funds that invest in taxable fixed-income securities.
++ The BofA Merrill Lynch Capital Securities Index is a sub-set of the BofA
Merrill Lynch U.S. Corporate Index including all fixed-to-floating rate,
perpetual callable and callable securities. The BofA Merrill Lynch U.S.
Corporate Index tracks the performance of U.S. dollar-denominated
investment-grade corporate debt publicly issued in the U.S. domestic market.
Qualifying securities must be rated investment-grade (based on an average of
Moody's, S&P and Fitch) and must have an investment-grade-rated country of risk
(based on an average of Moody's, S&P and Fitch foreign-currency long-term
sovereign debt ratings). The BofA Merrill Lynch Fixed Rate Preferred Securities
Index tracks the performance of fixed-rate U.S. dollar-denominated preferred
securities issued in the U.S. domestic market. Qualifying securities must be
rated investment-grade (based on an average of Moody's, S&P and Fitch) and must
have an investment-grade-rated country of risk (based on an average of Moody's,
S&P and Fitch foreign-currency long-term sovereign debt ratings).
Indices are not managed and an investor cannot invest directly in an index.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be a part of current portfolio
construction.
115
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in AIG Income Explorer Fund Class A shares
would be valued at $12,109. The same amount invested in securities mirroring
the performance of the Blended Benchmark [MSCI World Index (Net) (60%) and
Bloomberg Barclays U.S. Aggregate Bond Index (40%)], the MSCI World Index (Net)
and the Bloomberg Barclays U.S. Aggregate Bond Index would be valued at
$13,662, $15,506 and $11,096, respectively.
[CHART]
Blended
Banchmark
(MSCI World
AIG (net)(60%)
Income and Barclays Barclays US
Explorer US Aggregate MSCI World Aggregate
Date Fund Class A# Bond Index (40%) Index (net)++ Bond Index@
---------- --------------- ----------------- --------------- --------------
7/1/2013 9,422 10,000 10,000 10,000
7/31/2013 9,555 10,271 10,447 10,008
8/31/2013 9,355 10,119 10,225 9,956
9/30/2013 9,629 10,461 10,736 10,051
10/31/2013 9,896 10,741 11,157 10,132
11/30/2013 9,824 10,839 11,355 10,094
12/31/2013 9,951 10,952 11,595 10,037
1/31/2014 9,887 10,774 11,166 10,185
2/28/2014 10,205 11,120 11,725 10,239
3/31/2014 10,336 11,122 11,742 10,222
4/30/2014 10,604 11,228 11,862 10,308
5/31/2014 10,744 11,412 12,095 10,426
6/30/2014 10,933 11,537 12,312 10,431
7/31/2014 10,755 11,414 12,115 10,405
8/31/2014 10,970 11,616 12,382 10,520
9/30/2014 10,600 11,395 12,046 10,448
10/31/2014 10,617 11,484 12,124 10,551
11/30/2014 10,665 11,655 12,367 10,626
12/31/2014 10,384 11,546 12,167 10,636
1/31/2015 10,400 11,518 11,947 10,859
2/28/2015 10,663 11,879 12,647 10,757
3/31/2015 10,535 11,790 12,449 10,807
4/30/2015 10,792 11,939 12,741 10,768
5/31/2015 10,658 11,952 12,785 10,742
6/30/2015 10,386 11,733 12,488 10,625
7/31/2015 10,262 11,892 12,712 10,699
8/31/2015 9,926 11,413 11,871 10,683
9/30/2015 9,694 11,191 11,433 10,755
10/31/2015 10,151 11,724 12,339 10,757
11/30/2015 10,000 11,677 12,277 10,729
12/31/2015 9,898 11,539 12,061 10,694
1/31/2016 9,663 11,188 11,340 10,841
2/29/2016 9,643 11,170 11,255 10,918
3/31/2016 10,231 11,666 12,019 11,018
4/30/2016 10,471 11,794 12,209 11,061
5/31/2016 10,407 11,835 12,278 11,064
6/30/2016 10,607 11,841 12,140 11,262
7/31/2016 11,049 12,171 12,653 11,334
8/31/2016 11,156 12,171 12,664 11,321
9/30/2016 11,160 12,207 12,731 11,314
10/31/2016 11,075 12,028 12,485 11,227
11/30/2016 10,914 12,018 12,664 10,962
12/31/2016 11,127 12,197 12,967 10,977
1/31/2017 11,460 12,384 13,280 10,999
2/28/2017 11,656 12,623 13,649 11,073
3/31/2017 11,731 12,701 13,794 11,067
4/30/2017 11,985 12,853 13,998 11,152
5/31/2017 12,121 13,056 14,294 11,238
6/30/2017 12,226 13,081 14,349 11,227
7/31/2017 12,505 13,291 14,693 11,275
8/31/2017 12,406 13,350 14,714 11,376
9/30/2017 12,563 13,504 15,044 11,322
10/31/2017 12,538 13,661 15,328 11,329
11/30/2017 12,526 13,831 15,660 11,314
12/31/2017 12,786 13,969 15,872 11,366
1/31/2018 12,941 14,347 16,710 11,235
2/28/2018 12,770 13,936 16,018 11,129
3/31/2018 12,703 13,789 15,669 11,200
4/30/2018 12,716 13,843 15,849 11,117
5/31/2018 12,628 13,935 15,948 11,196
6/30/2018 12,600 13,924 15,940 11,182
7/31/2018 12,788 14,186 16,438 11,185
8/31/2018 12,750 14,328 16,642 11,257
9/30/2018 12,693 14,339 16,734 11,184
10/31/2018 12,109 13,662 15,506 11,096
Class A Class C Class W
------------------ ------------------ ------------------
Average Average Average
AIG Annual Cumulative Annual Cumulative Annual Cumulative
Income Explorer Fund# Return Return+ Return Return+ Return Return+
--------------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -8.95% -3.42% -4.99% -4.07% -3.24% -3.24%
-------------------------------------------------------------------------------
5 Year Return 2.89% 22.36% 3.44% 18.41% 4.33% 23.58%
-------------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------
Since Inception* 3.65% 28.52% 4.13% 24.10% 5.02% 29.88%
-------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 07/02/13; Class C: 07/02/13; Class I: 07/02/13
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the 12 month period ended October 31, 2018, the AIG Income Explorer Fund
Class A returned -8.95%, compared to 0.01% for the Blended Benchmark [MSCI
World Index (Net) (60%) and the Bloomberg Barclays US Aggregate Bond Index
(40%)], 1.16% for the MSCI World Index (Net) and -2.05% for the Bloomberg
Barclays US Aggregate Bond Index. (The performance data and graph do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
++ The MSCI World Index (Net) is a free float-adjusted market
capitalization-weighted index that is designed to measure the equity market
performance of developed markets consisting of 23 developed market country
indexes: Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Hong Kong, Ireland, Italy, Israel, Japan, Netherlands, New Zealand,
Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom
and the United States. Net total return indices reinvest dividends after the
deduction of withholding taxes, using (for international indices) a tax rate
applicable to non-resident institutional investors who do not benefit from
double taxation treaties.
@ The Bloomberg Barclays U.S. Aggregate Bond Index represents securities that
are U.S. domestic, taxable and dollar denominated. The index covers
components for government and corporate securities, mortgage pass-through
securities and asset-backed securities.
Indices are not managed and an investor cannot invest directly into an index.
116
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Small-Cap Fund
For the annual period ended October 31, 2018, Class A shares of the AIG
Small-Cap Fund returned 4.05% (before maximum sales charge). The Fund
outperformed its benchmark, the Russell 2000(R) Index,/*/ which returned 1.85%
for the same period.
The Fund seeks to achieve its investment objective of long-term growth of
capital primarily by strategically allocating its assets between a small-cap
index strategy and an actively-managed micro-cap growth strategy. The small-cap
index strategy provides broad exposure to small-cap stocks by tracking the
Russell 2000(R) Index, and the micro-cap strategy is actively managed to
enhance alpha potential relative to the Russell Microcap(R) Index.+
SunAmerica Asset Management, LLC ("SunAmerica") is the Fund's investment
adviser, managing the overall asset allocations and the index strategy. Cadence
Capital Management, LLC ("Cadence") is the portfolio manager of the micro-cap
growth strategy. The Fund will generally allocate approximately 40-60% of its
assets to each strategy.
Below, Timothy Campion, lead portfolio manager of the Fund and Senior Vice
President at SunAmerica, discusses SunAmerica's portion of the Fund's
performance during the annual period. SunAmerica manages the small-cap index
sleeve of the Fund.
Our portion of the Fund closely tracked the return of the Russell 2000(R) Index
during the annual period. U.S. small-cap stocks underperformed all other
capitalization segments of the U.S. equity market during the annual period, as
measured by the Russell indices. Still, there was great dispersion among the
performance of the sectors of the Russell 2000(R) Index during the annual
period. Telecommunication Services, Health Care and Consumer Staples were the
best relative performers in terms of total return, each sector posting a robust
double-digit gain. Conversely, Materials, Energy and Real Estate were weakest,
each posting a solidly negative return during the annual period.
Among individual holdings, several Health Care companies were among the top
positive contributors to the Russell 2000(R) Index and to our portion of the
Fund's relative performance during the annual period. These included Nektar
Therapeutics, Sarepta Therapeutics, Inc., AveXis, Inc. and SAGE Therapeutics,
Inc. GrubHub, Inc., a provider of online/mobile restaurant delivery services,
also posted strong results. Notable laggards included Clovis Oncology, Inc. and
Puma Biotechnology, Inc., each of the Pharmaceuticals & Biotechnology industry
of the Health Care sector; McDermott International, Inc. of the Energy sector;
Dana, Inc. of the Automobiles & Components industry of the Consumer
Discretionary sector; and Maxar Technologies Ltd. of the Technology Hardware
and Equipment industry of the Information Technology sector.
Each sector and stock in the Russell 2000(R) Index was represented in our
portion of the Fund with approximately the same weighting as in the Index and
therefore had a similar effect.
Below, Michael Skillman, portfolio manager, managing director and Chief
Executive Officer at Cadence, discusses Cadence's portion of the Fund's
performance during the annual period. Cadence manages the micro-cap sleeve of
the Fund.
Our portion of the Fund outperformed the return of the Russell 2000(R) Index
during the annual period, driven by strong stock selection across several
sectors. The Consumer Staples sector was the biggest positive contributor to
our portion of the Fund's relative outperformance both on a relative and
absolute basis. The biggest gainer in the sector was Medifast, Inc., a purveyor
of weight loss and healthy living products, which enjoyed a substantial jump in
both sales and earnings, led by its Optiva-branded products. During the annual
period, Medifast, Inc. consistently beat earnings estimates and surpassed
revenue targets while ratcheting up forward guidance targets. We exited the
position in mid-June 2018 after what we viewed as stellar price performance.
Financials was another positive contributor to our portion of the Fund's
results, with strong stock selection in both the Diversified Financials and
Insurance industries, though Banking was a notable detractor. Our top pick was
Health Insurance Innovations, Inc., a developer/administrator of
117
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
web-based individual health insurance plans. During the annual period, the
company surpassed earnings and revenue expectations and also benefited from
some advantageous regulatory changes enacted during the summer.
The largest individual positive contributor to our portion of the Fund's
results was in Health Care - namely, Tabula Rasa Healthcare, Inc., which offers
a cloud-based patient-specific technology solution to optimize medication
regimens. The company focuses on reducing adverse drug events, enhancing
compliance and ultimately improving quality of care and medication outcomes.
Interest in this area grew along with the company's earnings before interest,
taxes, depreciation and amortization, pushing its stock price higher during the
annual period. Stock selection overall in Industrials proved beneficial, with
Vicor Corp., a producer of modular power systems, being the top contributor
within the sector, though Daseke, Inc., a domestic provider of flatbed and
specialized freight logistics solutions, was among our portion of the Fund's
biggest detractors.
Consumer Discretionary was the biggest sector detractor from our portion of the
Fund's relative results. Both having an underweight to the strongly performing
sector and stock selection within the sector was disappointing. From an
industry perspective, gains in Leisure Products and Restaurants were more than
offset by losses in Auto Parts, Automobiles and Specialty Apparel. The biggest
individual detractor in the sector was Horizon Global Corp., a provider of
towing and trailering equipment, which is in the midst of a turnaround. Poor
performance and even worse guidance in the first calendar quarter caused a
downdraft in its stock, which led us to exit the position soon after. Retailing
was another drag on relative performance, as our portion of the Fund had only a
modest exposure to this strongly performing industry.
Other significant detractors could be found in the Semiconductor industry of
the Information Technology sector. Amtech Systems, Inc., a provider of furnace
systems for solar cell and semiconductor manufacturers was a lead detractor
from our portion of the Fund's results. We eliminated the position in the early
spring, as demand from China softened. Ichor Holdings Ltd. was another
detractor within the Semiconductor industry that saw its share price decline.
--------
Past performance is no guarantee of future results. Diversification does not
guarantee a profit or protect against a loss.
* The Russell 2000(R) Index measures the performance of approximately 2,000
small-cap companies in the Russell 3000(R) Index, which is made up of 3,000 of
the biggest U.S. stocks. The Russell 2000(R) Index serves as a benchmark for
small-cap stocks in the United States. The weighted average market
capitalization for companies in the Russell 2000(R) Index is about
US$1.3 billion.
+ The Russell Microcap(R) Index is a capitalization-weighted index of 2,000
small-cap and micro-cap stocks that captures the smallest 1,000 companies in
the Russell 2000(R) Index, plus 1,000 smaller U.S.-based listed stocks. The
Russell Microcap(R) Index is recalculated annually to prevent growing stocks
from distorting index performance, and to include new entrants. The Russell
Microcap(R) Index represents just 3% of the overall U.S. equity market by
capitalization.
Indices are not managed and an investor cannot invest directly in an index.
A portion of the Fund is actively managed and its holdings are subject to
change. Accordingly, securities listed may or may not be a part of current
portfolio construction.
118
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in AIG Small-Cap Fund Class A shares would be
valued at $14,905. The same amount invested in securities mirroring the
performance of the Russell(R) 2000 Index would be valued at $14,740.
[CHART]
AIG Small-Cap
Date Fund Class A# Russell 2000(R) Index
---------- -------------- -------------------
2/5/2014 9,422 10,000
2/28/2014 9,981 10,827
3/31/2014 9,881 10,753
4/30/2014 9,384 10,336
5/31/2014 9,410 10,419
6/30/2014 9,893 10,973
7/31/2014 9,209 10,309
8/31/2014 9,692 10,820
9/30/2014 9,127 10,166
10/31/2014 9,730 10,836
11/30/2014 9,698 10,846
12/31/2014 10,107 11,155
1/31/2015 9,824 10,796
2/28/2015 10,327 11,437
3/31/2015 10,660 11,636
4/30/2015 10,402 11,339
5/31/2015 10,565 11,598
6/30/2015 10,798 11,685
7/31/2015 10,791 11,549
8/31/2015 10,188 10,824
9/30/2015 9,742 10,293
10/31/2015 10,314 10,872
11/30/2015 10,578 11,226
12/31/2015 10,091 10,662
1/31/2016 9,242 9,725
2/29/2016 9,112 9,724
3/31/2016 9,783 10,501
4/30/2016 10,030 10,665
5/31/2016 10,311 10,906
6/30/2016 10,379 10,899
7/31/2016 11,064 11,549
8/31/2016 11,146 11,754
9/30/2016 11,393 11,885
10/31/2016 10,790 11,320
11/30/2016 11,962 12,582
12/31/2016 12,308 12,934
1/31/2017 12,287 12,985
2/28/2017 12,548 13,236
3/31/2017 12,682 13,253
4/30/2017 12,929 13,399
5/31/2017 12,597 13,126
6/30/2017 13,020 13,580
7/31/2017 13,133 13,681
8/31/2017 13,302 13,507
9/30/2017 14,219 14,350
10/31/2017 14,325 14,472
11/30/2017 14,572 14,889
12/31/2017 14,490 14,829
1/31/2018 14,741 15,216
2/28/2018 14,154 14,627
3/31/2018 14,475 14,816
4/30/2018 14,655 14,945
5/31/2018 15,641 15,852
6/30/2018 15,884 15,965
7/31/2018 15,899 16,243
8/31/2018 16,854 16,944
9/30/2018 16,502 16,536
10/31/2018 14,905 14,740
Class A Class C Class W
------------------ ------------------ ------------------
Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative
AIG Small-Cap Fund# Return Return+ Return Return+ Return Return+
------------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -1.94% 4.05% 2.41% 3.34% 4.29% 4.29%
-----------------------------------------------------------------------------
5 Year Return N/A N/A N/A N/A N/A N/A
-----------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
-----------------------------------------------------------------------------
Since Inception* 8.80% 58.19% 9.44% 53.27% 10.39% 59.65%
-----------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 02/06/14; Class C: 02/06/14; Class W: 02/06/14
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the 12 month period ended October 31, 2018, the AIG Small-Cap Fund Class A
returned -1.94%, compared to 1.85% for the Russell(R) 2000 Index. (The
performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
@ The Russell 2000(R) Index measures the performance of approximately 2,000
small-cap companies in the Russell 3000(R) Index, which is made up of 3,000
of the biggest U.S. stocks. The Russell 2000(R) Index serves as a benchmark
for small-cap stocks in the United States. The weighted average market
capitalization for companies in the Russell 2000(R) Index is about US$1.3
billion. Indices are not managed and an investor cannot invest directly into
an index.
119
SunAmerica Specialty Series
SUPPLEMENTS TO THE PROSPECTUS
THESE SUPPLEMENTS ARE NOT PART OF THE ANNUAL REPORT
SunAmerica Specialty Series
AIG ESG Dividend Fund
(the "Fund")
Supplement dated November 19, 2018, to the Summary Prospectus, Prospectus
and Statement of Additional Information
each dated February 28, 2018, as supplemented and amended to date
Effective November 19, 2018, SunAmerica Asset Management, LLC has agreed to
modify the expense caps on total expenses to reduce the net expenses paid by
shareholders of the Fund. Accordingly, the following changes to the Summary
Prospectus, Prospectus and Statement of Additional Information are effective as
of November 19, 2018:
The table in the section of the Fund's Summary Prospectus entitled "Fees and
Expenses of the Fund" and the table in the subsection of the Fund's Prospectus
entitled "Fund Highlights - Fees and Expenses of the Fund" are deleted in their
entirety and replaced with the following:
Class A Class C Class W
------- ------- -------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)...................................................... 5.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of the lesser of the amount redeemed or original purchase cost)/(1)/.... None 1.00% None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends................................ None None None
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
Management Fees............................................................................ 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees................................................... 0.35% 1.00% None
Other Expenses............................................................................. 1.41% 5.28% 5.45%
Total Annual Fund Operating Expenses Before Fee Waiver and/or Expense Reimbursement........ 2.51% 7.03% 6.20%
Fee Waiver and/or Expense Reimbursement/(2)(3)/............................................ 1.38% 5.25% 5.27%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement/(2)(3)/. 1.13% 1.78% 0.93%
--------
(1) Purchases of Class A shares of $1 million or more will be subject to a
contingent deferred sales charge ("CDSC") on redemptions made within two
years of purchase. The CDSC on Class C shares applies only if shares are
redeemed within twelve months of their purchase. See pages 7-9 of the
Prospectus for more information about the CDSCs.
(2) Pursuant to an Expense Limitation Agreement, SunAmerica Asset Management,
LLC ("SunAmerica") is contractually obligated to waive its fees and/or
reimburse expenses to the extent that the Total Annual Fund Operating
Expenses exceed 1.13%, 1.78% and 0.93% for Class A, Class C and Class W
shares, respectively. For purposes of the Expense Limitation Agreement,
"Total 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 the Fund's
business. This agreement will continue in effect indefinitely, unless
terminated by the Board of Trustees, including a majority of the trustees
of the Board of Trustees who are not "interested persons" of SunAmerica
Specialty Series as defined in the Investment Company Act of 1940, as
amended (the "Independent Trustees").
(3) Any waivers and/or reimbursements made by SunAmerica with respect to the
Fund are subject to recoupment from the Fund within two years after the
occurrence of the waiver and/or reimbursement, provided that such payments
to SunAmerica shall not be made if they would cause the annual fund
operating expenses of a class of the Fund to exceed the lesser of (a) the
current expense limitation in effect at the time the waiver and/or
reimbursement occurred, or (b) the current expense limitation in effect, if
any.
120
SunAmerica Specialty Series
SUPPLEMENTS TO THE PROSPECTUS
The example in the section of the Fund's Summary Prospectus entitled "Fees and
Expenses of the Fund" and the example in the subsection of the Fund's
Prospectus entitled "Fund Highlights - Fees and Expenses of the Fund" are
deleted in their entirety and replaced with the following:
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same. Although your actual costs may be higher
or lower, based on these assumptions and the net expenses shown in the fee
table, your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
AIG ESG Dividend Fund
Class A............... $684 $913 $1,161 $1,871
Class C............... 281 560 964 2,095
Class W............... 95 296 515 1,143
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
AIG ESG Dividend Fund
Class A............... $684 $913 $1,161 $1,871
Class C............... 181 560 964 2,095
Class W............... 95 296 515 1,143
The seventh paragraph of the subsection of the Fund's Statement of Additional
Information entitled "Management of the Fund - The Adviser" is deleted in its
entirety and replaced with the following:
Pursuant to an Expense Limitation Agreement, SunAmerica is contractually
obligated to waive its fees and/or reimburse expenses to the extent that the
Total Annual Fund Operating Expenses exceed the following amounts in the
table below.
Total Annual Fund Operating Expenses
(as a percentage of average daily net assets)
---------------------------------------------
Class %
----- -----
Class A Shares.............. 1.13%
Class C Shares.............. 1.78%
Class W Shares.............. 0.93%
The ninth paragraph of the subsection of the Fund's Statement of Additional
Information entitled "Management of the Fund - The Adviser" is deleted in its
entirety and replaced with the following:
Further, any waivers and/or reimbursements made by SunAmerica with respect
to the Fund pursuant to the Expense Limitation Agreement are subject to
recoupment from the Fund within the two years after the occurrence of the
waiver and/or reimbursement, provided that such payments to SunAmerica shall
not be made if they would cause the annual fund operating expenses of a
class of the Fund to exceed the lesser of (a) the current expense limitation
in effect at the time the waiver and/or reimbursement occurred, or (b) the
current expense limitation in effect, if any. The potential reimbursements
are accounted for as possible contingent liabilities that are not recordable
on the balance sheet of the Fund until collection is probable, but will
appear as footnote disclosure to the Fund's financial statements. At such
time as it appears probable that the Fund is able to effect such
reimbursement and that SunAmerica intends to seek such reimbursement, the
amount of the reimbursement will be accrued as an expense of the Fund for
that current period.
Capitalized terms used but not defined herein shall have the meanings assigned
to them by the Summary Prospectus, Prospectus and/or the Statement of
Additional Information.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
121
SunAmerica Specialty Series
SUPPLEMENTS TO THE PROSPECTUS
SunAmerica Specialty Series
AIG Focused Multi-Cap Growth Fund
(the "Fund")
Supplement dated November 19, 2018, to the Summary Prospectus, Prospectus
and Statement of Additional Information
each dated February 28, 2018, as supplemented and amended to date
Effective November 19, 2018, SunAmerica Asset Management, LLC ("SunAmerica")
has agreed to modify the expense caps on total expenses to reduce the net
expenses paid by shareholders of the Fund. In addition, pursuant to an Advisory
Fee Waiver Agreement, SunAmerica has contractually agreed to waive a portion of
its fees payable by the Fund through February 29, 2020. The Board of Trustees
also approved Subadvisory Fee Waiver Agreements by and between SunAmerica and
each of Marsico Capital Management, LLC ("Marsico") and BAMCO, Inc. ("BAMCO"),
the Fund's subadvisers, with respect to the Fund. Effective November 19, 2018,
pursuant to the Subadvisory Fee Waiver Agreements, Marsico and BAMCO have each
contractually agreed to waive a portion of its fees payable by SunAmerica, with
respect to the Fund, through February 29, 2020. Accordingly, the following
changes to the Summary Prospectus, Prospectus and Statement of Additional
Information are effective as of November 19, 2018:
The table in the section of the Fund's Summary Prospectus entitled "Fees and
Expenses of the Fund" and the table in the subsection of the Fund's Prospectus
entitled "Fund Highlights - AIG Focused Multi-Cap Growth Fund - Fees and
Expenses of the Fund" are deleted in their entirety and replaced with the
following:
Class A Class C Class W
------- ------- -------
Shareholder Fees
(fees paid directly from your investment)...................................................
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)......................................................... 5.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of the lesser of the amount redeemed or original purchase cost)/(1)/....... None 1.00% None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends................................... None None None
Maximum Account Fee........................................................................... None None None
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)...........
Management Fees............................................................................... 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees...................................................... 0.35% 1.00% None
Other Expenses................................................................................ 0.31% 0.32% 0.48%
Total Annual Fund Operating Expenses Before Fee Waiver and/or Expense Reimbursement........... 1.66% 2.32% 1.48%
Fee Waiver and/or Expense Reimbursement/(2)(3)(4)/............................................ 0.53% 0.54% 0.55%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement/(2)(3)(4)/. 1.13% 1.78% 0.93%
--------
(1) Purchases of Class A shares of $1 million or more will be subject to a
contingent deferred sales charge ("CDSC") on redemptions made within two
years of purchase. The CDSC on Class C shares applies only if shares are
redeemed within twelve months of their purchase. See pages 13-15 of the
Prospectus for more information about the CDSCs.
(2) Pursuant to an Expense Limitation Agreement, SunAmerica Asset Management,
LLC ("SunAmerica" or the "Adviser") is contractually obligated to waive its
fees and/or reimburse expenses to the extent that the Total Annual Fund
Operating Expenses exceed 1.13%, 1.78% and 0.93% for Class A, Class C and
Class W shares, respectively. For purposes of the Expense Limitation
Agreement, "Total 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 the Fund's business. This agreement will continue in effect
indefinitely, unless terminated by the Board of Trustees, including a
majority of the trustees of the Board of Trustees who are not "interested
persons" of SunAmerica Specialty Series as defined in the Investment
Company Act of 1940, as amended (the "Independent Trustees").
(3) Any waivers and/or reimbursements made by SunAmerica with respect to the
Fund are subject to recoupment from the Fund within two years after the
occurrence of the waiver and/or reimbursement, provided that such payments
to SunAmerica shall not
122
SunAmerica Specialty Series
SUPPLEMENTS TO THE PROSPECTUS
be made if they would cause the annual fund operating expenses of a class of
the Fund to exceed the lesser of (a) the current expense limitation in
effect at the time the waiver and/or reimbursement occurred, or (b) the
current expense limitation in effect, if any.
(4) Pursuant to an Advisory Fee Wavier Agreement, effective through
February 29, 2020, SunAmerica is contractually obligated to waive its
advisory fee with respect to the Fund so that the advisory fee payable by
the Fund to SunAmerica equals 0.90% of average daily net assets. This
agreement may be modified or discontinued prior to February 29, 2020, only
with the approval of the Board of Trustees, including a majority of the
Independent Trustees.
The example in the section of the Fund's Summary Prospectus entitled "Fees and
Expenses of the Fund" and the example in the subsection of the Fund's
Prospectus entitled "Fund Highlights - AIG Focused Multi-Cap Growth Fund - Fees
and Expenses of the Fund" are deleted in their entirety and replaced with the
following:
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same and that all fee waivers and/or
reimbursements remain in place through the term of the applicable waiver
and/or expense reimbursement. Although your actual costs may be higher or
lower, based on these assumptions and the net expenses shown in the fee
table, your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
AIG Focused Multi-Cap Growth Fund
Class A........................... $684 $913 $1,161 $1,871
Class C........................... 281 560 964 2,095
Class W........................... 95 296 515 1,143
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
AIG Focused Multi-Cap Growth Fund
Class A........................... $684 $913 $1,161 $1,871
Class C........................... 181 560 964 2,095
Class W........................... 95 296 515 1,143
In the subsection of the Fund's Prospectus entitled "Fund Management -
Adviser," the fourth paragraph is deleted in its entirety and replaced with the
following:
Pursuant to an Advisory Fee Waiver Agreement, effective November 19, 2018,
through February 29, 2020, SunAmerica has contractually agreed to waive its
management fee with respect to the AIG Focused Multi-Cap Growth Fund so that
the management fee payable by the Fund to SunAmerica equals 0.90% of average
daily net assets. In addition, pursuant to an Expense Limitation Agreement,
SunAmerica is contractually obligated to waive its fees and/or reimburse
expenses to the extent noted in the footnotes of the Fees and Expenses Table
for each Fund. Any waivers and/or reimbursements made by SunAmerica with
respect to a Fund are subject to recoupment from the Fund within two years
after the occurrence of the waiver and/or reimbursement, provided that such
payments to SunAmerica shall not be made if they would cause the annual fund
operating expenses of a class of the Fund to exceed the lesser of (a) the
current expense limitation in effect at the time the waiver and/or
reimbursement occurred, or (b) the current expense limitation in effect, if
any. The potential amount of the recoupment is accounted for as a contingent
liability that is not recordable on the balance sheet of a Fund until
collection is probable, but appears as footnote disclosure to each Fund's
financial statements. At such time as it appears probable that a Fund is able
to effect such recoupment and that SunAmerica intends to seek such recoupment,
the amount of the recoupment will be accrued as an expense of the Fund for that
current period.
The subsection of the Fund's Prospectus entitled "Fund Management - Information
About Subadvisers" is amended to add the following after the table:
Pursuant to Subadvisory Fee Waiver Agreements, effective November 19, 2018,
through February 29, 2020, each of Marsico and BAMCO has contractually agreed
to waive a portion of its subadvisory fee payable by SunAmerica with respect to
the AIG Focused Multi-Cap Growth Fund.
123
SunAmerica Specialty Series
SUPPLEMENTS TO THE PROSPECTUS
The subsection of the Fund's Statement of Additional Information entitled
"Management of the Funds - Adviser" is amended by adding the following after
the seventh paragraph:
Pursuant to an Advisory Fee Waiver Agreement, SunAmerica is contractually
obligated to waive a portion of its advisory fee with respect to the Focused
Multi-Cap Growth Fund so that the advisory fee rate payable by the Fund to
SunAmerica under the Investment Advisory and Management Agreement is 0.90%
of the Fund's average daily net assets. The Advisory Fee Waiver Agreement
will continue in effect until February 29, 2020, and from year to year
thereafter provided such continuance is agreed to by SunAmerica and approved
by a majority of the Trustees of the Trust who (i) are not "interested
persons" of the Trust or the Adviser, as defined in the 1940 Act, and
(ii) have no direct or indirect financial interest in the operation of the
Advisory Fee Waiver Agreement. Upon termination of the Investment Advisory
and Management Agreement with respect to the Focused Multi-Cap Growth Fund,
the Advisory Fee Waiver Agreement shall automatically terminate.
The ninth paragraph of the subsection of the Fund's Statement of Additional
Information entitled "Management of the Funds - Adviser," solely as it pertains
to the Fund, is deleted in its entirety and replaced with the following:
Pursuant to an Expense Limitation Agreement, SunAmerica is contractually
obligated to waive its fees and/or reimburse expenses to the extent that the
Total Annual Fund Operating Expenses exceed the following amounts in the
table below.
Total Annual Fund Operating Expenses
(as a percentage of average daily net assets)
---------------------------------------------
Fund Class A Class C Class W
---- ------- ------- -------
Focused Multi-Cap Growth Fund. 1.13% 1.78% 0.93%
The eleventh paragraph of the subsection of the Fund's Statement of Additional
Information entitled "Management of the Funds - Adviser" is deleted in its
entirety and replaced with the following:
Further, any waivers and/or reimbursements made by SunAmerica with respect
to a Fund pursuant to the Expense Limitation Agreement are subject to
recoupment from the Fund within the two years after the occurrence of the
waiver and/or reimbursement, provided that such payments to SunAmerica shall
not be made if they would cause the annual fund operating expenses of a
class of the Fund to exceed the lesser of (a) the current expense limitation
in effect at the time the waiver and/or reimbursement occurred, or (b) the
current expense limitation in effect, if any. The potential reimbursements
are accounted for as possible contingent liabilities that are not recordable
on the balance sheet of the Fund until collection is probable, but will
appear as footnote disclosure to a Fund's financial statements. At such time
as it appears probable that a Fund is able to effect such reimbursement and
that SunAmerica intends to seek such reimbursement, the amount of the
reimbursement will be accrued as an expense of the Fund for that current
period.
The subsection of the Fund's Statement of Additional Information entitled
"Management of the Funds - The Subadvisers" is amended by adding the following
after the second paragraph:
Pursuant to Subadvisory Fee Waiver Agreements, each of Marsico and BAMCO is
contractually obligated to waive a portion of its subadvisory fee payable by
SunAmerica with respect to the Focused Multi-Cap Growth Fund. Each
Subadvisory Fee Waiver Agreement shall continue in effect through
February 29, 2020, and from year to year thereafter provided such
continuance is agreed to by the Subadviser and approved by a majority of the
Trustees of the Trust who (i) are not "interested persons" of the Trust or
the Subadviser, as defined in the 1940 Act, and (ii) have no direct or
indirect financial interest in the operation of the Subadvisory Fee Waiver
Agreement. Upon termination of the Subadvisory Agreement with respect to a
Fund, the Subadvisory Fee Waiver Agreement shall automatically terminate.
Capitalized terms used but not defined herein shall have the meanings assigned
to them by the Summary Prospectus, Prospectus and/or the Statement of
Additional Information.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
124
SunAmerica Specialty Series
SUPPLEMENTS TO THE PROSPECTUS
SunAmerica Specialty Series
AIG Small-Cap Fund
(the "Fund")
Supplement dated November 19, 2018, to the Summary Prospectus, Prospectus
and Statement of Additional Information
each dated February 28, 2018, as supplemented and amended to date
Effective November 19, 2018, SunAmerica Asset Management, LLC ("SunAmerica")
has agreed to modify the expense caps on total expenses to reduce the net
expenses paid by shareholders of the Fund. In addition, pursuant to an Advisory
Fee Waiver Agreement, SunAmerica has contractually agreed to waive a portion of
its fees payable by the Fund through February 29, 2020. The Board of Trustees
also approved a Subadvisory Fee Waiver Agreement by and between SunAmerica and
Cadence Capital Management, LLC ("Cadence"), the Fund's subadviser, with
respect to the Fund. Effective November 19, 2018, pursuant to the Subadvisory
Fee Waiver Agreement, Cadence has contractually agreed to waive a portion of
its fees payable by SunAmerica, with respect to the Fund, through February 29,
2020. Accordingly, the following changes to the Summary Prospectus, Prospectus
and Statement of Additional Information are effective as of November 19, 2018:
The table in the section of the Fund's Summary Prospectus entitled "Fees and
Expenses of the Fund" and the table in the subsection of the Fund's Prospectus
entitled "Fund Highlights - Fees and Expenses of the Fund" are deleted in their
entirety and replaced with the following:
Class A Class C Class W
------- ------- -------
Shareholder Fees
(fees paid directly from your investment)...................................................
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)......................................................... 5.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of the lesser of the amount redeemed or original purchase cost)/(1)/....... None 1.00% None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends................................... None None None
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)...........
Management Fees............................................................................... 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees...................................................... 0.35% 1.00% None
Other Expenses................................................................................ 0.66% 1.38% 1.02%
Total Annual Fund Operating Expenses Before Fee Waiver and/or Expense Reimbursement........... 2.01% 3.38% 2.02%
Fee Waiver and/or Expense Reimbursement/(2)(3)(4)/............................................ 0.76% 1.48% 0.97%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement/(2)(3)(4)/. 1.25% 1.90% 1.05%
--------
(1) Purchases of Class A shares of $1 million or more will be subject to a
contingent deferred sales charge ("CDSC") on redemptions made within two
years of purchase. The CDSC on Class C shares applies only if shares are
redeemed within twelve months of their purchase. See pages 7-9 of the
Prospectus for more information about the CDSCs.
(2) Pursuant to an Expense Limitation Agreement, SunAmerica Asset Management,
LLC ("SunAmerica" or the "Adviser") is contractually obligated to waive its
fees and/or reimburse expenses to the extent that the Total Annual Fund
Operating Expenses exceed 1.25%, 1.90% and 1.05% for Class A, Class C and
Class W shares, respectively. For purposes of the Expense Limitation
Agreement, "Total 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 the Fund's business. This agreement will continue in effect
indefinitely, unless terminated by the Board of Trustees, including a
majority of the trustees of the Board of Trustees who are not "interested
persons" of SunAmerica Specialty Series as defined in the Investment
Company Act of 1940, as amended (the "Independent Trustees").
(3) Any waivers and/or reimbursements made by SunAmerica with respect to the
Fund are subject to recoupment from the Fund within two years after the
occurrence of the waiver and/or reimbursement, provided that such payments
to SunAmerica shall not be made if they would cause the annual fund
operating expenses of a class of the Fund to exceed the lesser of (a) the
current expense limitation in effect at the time the waiver and/or
reimbursement occurred, or (b) the current expense limitation in effect, if
any.
125
SunAmerica Specialty Series
SUPPLEMENTS TO THE PROSPECTUS
(4) Pursuant to an Advisory Fee Wavier Agreement, effective through
February 29, 2020, SunAmerica is contractually obligated to waive its
advisory fee with respect to the Fund so that the advisory fee payable by
the Fund to SunAmerica equals 0.85% of average daily net assets. This
agreement may be modified or discontinued prior to February 29, 2020, only
with the approval of the Board of Trustees, including a majority of the
Independent Trustees.
The example in the section of the Fund's Summary Prospectus entitled "Fees and
Expenses of the Fund" and the example in the subsection of the Fund's
Prospectus entitled "Fund Highlights - Fees and Expenses of the Fund" are
deleted in their entirety and replaced with the following:
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same and that all fee waivers and/or
reimbursements remain in place through the term of the applicable waiver
and/or expense reimbursement. Although your actual costs may be higher or
lower, based on these assumptions and the net expenses shown in the fee
table, your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
AIG Small-Cap Fund
Class A............ $695 $949 $1,222 $1,999
Class C............ 293 597 1,026 2,222
Class W............ 107 334 579 1,283
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
AIG Small-Cap Fund
Class A............ $695 $949 $1,222 $1,999
Class C............ 193 597 1,026 2,222
Class W............ 107 334 579 1,283
In the subsection of the Fund's Prospectus entitled "Fund Management -
Adviser," the third paragraph is deleted in its entirety and replaced with the
following:
Pursuant to an Investment Advisory and Management Agreement, the Fund pays
SunAmerica a management fee at the annual rate of 1.00% of the average daily
net assets of the Fund. Pursuant to an Advisory Fee Waiver Agreement,
effective November 19, 2018, through February 29, 2020, SunAmerica has
contractually agreed to waive its management fee with respect to the Fund so
that the management fee payable by the Fund to SunAmerica equals 0.85% of
average daily net assets.
In addition, SunAmerica has contractually agreed to waive fees and/or
reimburse expenses to the extent noted in the footnotes to the Fees and
Expenses Table of this Prospectus. Any waivers and/or reimbursements made by
SunAmerica are subject to recoupment from the Fund within two years after
the occurrence of the waiver and/or reimbursement, provided that such
payments to SunAmerica shall not be made if they would cause the annual fund
operating expenses of a class of the Fund to exceed the lesser of (a) the
current expense limitation in effect at the time the waiver and/or
reimbursement occurred, or (b) the current expense limitation in effect, if
any. The potential amount of the recoupment is accounted for as a contingent
liability that is not recordable on the balance sheet of the Fund until
collection is probable, but appears as footnote disclosure to the Fund's
financial statements. At such time as it appears probable that the Fund is
able to effect such recoupment and that SunAmerica intends to seek such
recoupment, the amount of the recoupment will be accrued as an expense of
the Fund for that current period.
In the subsection of the Fund's Prospectus entitled "Fund Management -
Subadviser," the following is added to the end of the second paragraph:
Pursuant to a Subadvisory Fee Waiver Agreement, effective November 19, 2018,
through February 29, 2020, Cadence has contractually agreed to waive its
subadvisory fee with respect to the Fund so that the subadvisory fee payable
by SunAmerica to Cadence equals 0.40% of average daily net assets.
126
SunAmerica Specialty Series
SUPPLEMENTS TO THE PROSPECTUS
The subsection of the Fund's Statement of Additional Information entitled
"Management of the Fund - The Adviser" is amended by adding the following after
the seventh paragraph:
Pursuant to an Advisory Fee Waiver Agreement, SunAmerica is contractually
obligated to waive a portion of its advisory fee with respect to the Fund so
that the advisory fee rate payable by the Fund to SunAmerica under the
Investment Advisory and Management Agreement is 0.85% of the Fund's average
daily net assets. The Advisory Fee Waiver Agreement will continue in effect
until February 29, 2020, and from year to year thereafter provided such
continuance is agreed to by SunAmerica and approved by a majority of the
Trustees of the Trust who (i) are not "interested persons" of the Trust or
the Adviser, as defined in the 1940 Act, and (ii) have no direct or indirect
financial interest in the operation of the Advisory Fee Waiver Agreement.
Upon termination of the Investment Advisory and Management Agreement with
respect to the Fund, the Advisory Fee Waiver Agreement shall automatically
terminate.
The eighth paragraph of the subsection of the Fund's Statement of Additional
Information entitled "Management of the Fund - The Adviser" is deleted in its
entirety and replaced with the following:
Pursuant to an Expense Limitation Agreement, SunAmerica is contractually
obligated to waive its fees and/or reimburse expenses to the extent that the
Total Annual Fund Operating Expenses exceed the following amounts in the
table below.
Total Annual Fund Operating Expenses
(as a percentage of average daily net assets)
---------------------------------------------
Class %
----- ----
Class A Shares.............. 1.25%
Class C Shares.............. 1.90%
Class W Shares.............. 1.05%
The tenth paragraph of the subsection of the Fund's Statement of Additional
Information entitled "Management of the Fund - The Adviser" is deleted in its
entirety and replaced with the following:
Further, any waivers and/or reimbursements made by SunAmerica with respect
to the Fund pursuant to the Expense Limitation Agreement are subject to
recoupment from the Fund within the two years after the occurrence of the
waiver and/or reimbursement, provided that such payments to SunAmerica shall
not be made if they would cause the annual fund operating expenses of a
class of the Fund to exceed the lesser of (a) the current expense limitation
in effect at the time the waiver and/or reimbursement occurred, or (b) the
current expense limitation in effect, if any. The potential reimbursements
are accounted for as possible contingent liabilities that are not recordable
on the balance sheet of the Fund until collection is probable, but will
appear as footnote disclosure to the Fund's financial statements. At such
time as it appears probable that the Fund is able to effect such
reimbursement and that SunAmerica intends to seek such reimbursement, the
amount of the reimbursement will be accrued as an expense of the Fund for
that current period.
The subsection of the Fund's Statement of Additional Information entitled
"Management of the Fund - The Subadviser" is amended by adding the following
after the third paragraph:
Pursuant to a Subadvisory Fee Waiver Agreement, Cadence is contractually
obligated to waive a portion of its subadvisory fee with respect to the Fund
so that the subadvisory fee payable by SunAmerica to Cadence is equal to
0.40% of the Fund's average daily net assets. The Subadvisory Fee Waiver
Agreement shall continue in effect through February 29, 2020, and from year
to year thereafter provided such continuance is agreed to by the Subadviser
and approved by a majority of the Trustees of the Trust who (i) are not
"interested persons" of the Trust or the Subadviser, as defined in the 1940
Act, and (ii) have no direct or indirect financial interest in the operation
of the Subadvisory Fee Waiver Agreement. Upon termination of the Subadvisory
Agreement with respect to the Fund, the Subadvisory Fee Waiver Agreement
shall automatically terminate.
Capitalized terms used but not defined herein shall have the meanings assigned
to them by the Summary Prospectus, Prospectus and/or the Statement of
Additional Information.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
127
[LOGO]
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Directors/Trustees VOTING PROXIES ON FUND PORTFOLIO DELIVERY OF SHAREHOLDER DOCUMENTS
Richard W. Grant SECURITIES The Funds have adopted a policy that
Peter A. Harbeck A description of the policies and proce- allows them to send only one copy of a
Dr. Judith L. Craven dures that the Trust uses to determine Fund's prospectus, proxy material,
William F. Devin how to vote proxies related to securities annual report and semi-annual report
Stephen J. Gutman held in a Fund's portfolio, which is (the "shareholder documents") to
Eileen A. Kamerick available in the Trust's Statement of shareholders with multiple accounts
Officers Additional Information, may be ob- residing at the same "household." This
John T. Genoy, President and Chief tained without charge upon request, by practice is called householding and
Executive Officer calling (800) 858-8850. The in- reduces Fund expenses, which benefits
Timothy Pettee, Vice President formation is also available from the you and other shareholders. Unless the
James Nichols, Vice President EDGAR database on the U.S. Secu- Funds receive instructions to the con-
Gregory N. Bressler, Secretary rities and Exchange Commission's trary, you will only receive one copy of
Gregory R. Kingston, Treasurer website at http://www.sec.gov. the shareholder documents. The Funds
Shawn Parry, Vice President and PROXY VOTING RECORD ON FUND will continue to household the share-
Assistant Treasurer PORTFOLIO SECURITIES holder documents indefinitely, until we
Donna McManus, Vice President and Information regarding how the Trust are instructed otherwise. If you do not
Assistant Treasurer voted proxies related to securities held wish to participate in householding
Kathleen Fuentes, Chief Legal Officer in the Funds during the most recent please contact Shareholder Services at
and Assistant Secretary twelve month period ended June 30 is (800) 858-8850 ext. 6010 or send a
Christopher C. Joe, Chief Compliance available, once filed with the U.S. written request with your name, the
Officer Securities and Exchange Commission, name of your fund(s) and your ac-
Matthew J. Hackethal, Anti-Money without charge, upon request, by call- count number(s) to AIG Funds,
Laundering Compliance Officer ing (800) 858-8850 or on the U.S. P.O. Box 219186, Kansas City MO,
Investment Adviser Securities and Exchange Commission 64121-9186. We will resume in-
SunAmerica Asset Management, LLC website at http://www.sec.gov. dividual mailings for your account
Harborside 5 DISCLOSURE OF QUARTERLY PORTFOLIO within thirty (30) days of receipt of
185 Hudson Street, Suite 3300 HOLDINGS your request.
Jersey City, NJ 07311 The Trust is required to file its com- This report is submitted solely for the
Distributor plete schedule of portfolio holdings general information of shareholders of
AIG Capital Services, Inc. with the U.S. Securities and Exchange the Funds. Distribution of this report
Harborside 5 Commission for its first and third fiscal to persons other than shareholders of
185 Hudson Street, Suite 3300 quarters on Form N-Q. The Trust's the Funds is authorized only in con-
Jersey City, NJ 07311 Forms N-Q are available on the U.S. nection with a currently effective pro-
Shareholder Servicing Agent Securities and Exchange Commission spectus, setting forth details of the
AIG Fund Services, Inc. website at http://www.sec.gov. You can Funds, which must precede or accom-
Harborside 5 also review and obtain copies of the pany this report.
185 Hudson Street, Suite 3300 Forms N-Q at the U.S. Securities and
Jersey City, NJ 07311 Exchange Commission Public Refer-
Custodian ence Room in Washington DC
State Street Bank and Trust Company (information on the operation of the
One Lincoln Street Public Reference Room may be ob-
Boston, MA 02111 tained by calling 1-800-SEC-0330).
Transfer Agent
DST Asset Manager Solutions, Inc.
303 W 11th Street
Kansas City, MO 64105
[GRAPHIC]
Go Paperless!!
Did you know that you have the option to
receive your shareholder reports online?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
It's Quick -- Fund documents will be received faster than via traditional mail.
It's Convenient -- Elimination of bulky documents from personal files.
It's Cost Effective -- Reduction of your Fund's printing and mailing costs.
To sign up for electronic delivery, follow
these simple steps:
1 Go to www.aig.com/funds
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.aig.com/funds 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.
[GRAPHIC]
For information on receiving this report online, see inside back cover.
AIG Funds are advised by SunAmerica Asset Management, LLC (SAAMCo) and
distributed by AIG Capital Services, Inc. (ACS), Member FINRA. Harborside 5,
185 Hudson Street, Suite 3300, Jersey City, NJ 07311, 800-858-8850. SAAMCo and
ACS are members of American International Group, Inc. (AIG).
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
AIG Funds Sales Desk at 800-858-8850, ext. 6003, or at aig.com/funds. Read the
prospectus carefully before investing.
HWANN-10/18
Item 2. Code of Ethics
SunAmerica Specialty Series ("the registrant") has adopted a Code of
Ethics applicable to its Principal Executive and Principal Accounting
Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002.
During the fiscal year ended October 31, 2018, there were no
reportable amendments, waivers or implicit waivers to a provision of
the Code of Ethics that applies to the registrant's Principal
Executive and Principal Accounting Officers.
Item 3. Audit Committee Financial Expert.
As of January 16, 2018, the registrant's Board of Trustees has
determined that Eileen A. Kamerick, a Trustee of the registrant,
qualifies as an audit committee financial expert, as defined in Item 3
(b) of Form N-CSR. Ms. Kamerick is considered to be "independent" for
purposes of Item 3(a)(2) of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two
fiscal years for professional services rendered by the registrant's
principal accountants were as follows:
2017 2018
(a) Audit Fees............................. $275,088 $249,965
(b) Audit-Related Fees..................... $ 0 $ 0
(c) Tax Fees............................... $ 0 $ 0
(d) All Other Fees......................... $ 0 $ 0
Audit Fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
principal accountant in connection with statutory and regulatory
filings.
Aggregate fees billed to the investment adviser and Adviser Affiliates
(as defined below in Item 4(e)) that are required to be pre-approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for
the last two fiscal years for services rendered by the registrant's
principal accountant were as follows:
2017 2018
(b) Audit-Related Fees.................... $ 0 $ 0
(c) Tax Fees.............................. $ 0 $ 0
(d) All Other Fees........................ $ 0 $36,429
(e) (1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser ("Adviser Affiliates") that provides ongoing
services to the registrant, if the engagement by the investment
adviser or Adviser Affiliate relates directly to the operations and
financial reporting of the registrant. The audit committee has not
presently established any pre-approval policies and procedures that
permit the pre-approval of the above services other than by the full
audit committee. Certain de minimis exceptions are allowed for
non-audit services in accordance with Rule 2-01(c)(7)(i)(C) of
Regulation S-X as set forth in the registrant's audit committee
charter.
(2) No services included in (b)-(d) above in connection with fees
billed to the registrant or the investment adviser or Adviser
Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of Rule
2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the
preceding fiscal year by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser,
and Adviser Affiliates that provide ongoing services to the registrant
for 2017 and 2018 were $0 and $105,000, respectively.
(h) Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees that were
implemented after the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15)) of Schedule 14A (17 CFR
240.14a - 101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the
registrant's last fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management
Investment Companies.
Not applicable.
Item 13. Exhibits.
(a) (1) Code of Ethics applicable to its Principal Executive and Principle
Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act
of 2002 attached hereto as Exhibit 99.406. Code of Ethics.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Specialty Series
By: /s/ John T. Genoy
--------------------------
John T. Genoy
President
Date: January 4, 2019
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: January 4, 2019
By: /s/ Gregory R. Kingston
--------------------------
Gregory R. Kingston
Treasurer
Date: January 4, 2019