N-CSRS 1 d268689dncsrs.txt SUNAMERICA INCOME FUNDS N-CSRS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-04708 --------------------------------------------- SunAmerica Income Funds -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) John T. Genoy Senior Vice President SunAmerica Asset Management, LLC Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (201) 324-6414 ----------------------------- Date of fiscal year end: March 31 -------------------------- Date of reporting period: September 30, 2016 ------------------------- Item 1. Reports to Stockholders SEMI-ANNUAL REPORT 2016 SUNAMERICA Income Funds [PHOTO] [LOGO] Table of Contents SHAREHOLDER LETTER.......................................... 2 EXPENSE EXAMPLE............................................. 4 STATEMENTS OF ASSETS AND LIABILITIES........................ 6 STATEMENTS OF OPERATIONS.................................... 8 STATEMENTS OF CHANGES IN NET ASSETS......................... 9 FINANCIAL HIGHLIGHTS........................................ 11 PORTFOLIO OF INVESTMENTS.................................... 14 NOTES TO FINANCIAL STATEMENTS............................... 69 APPROVAL OF ADVISORY AGREEMENTS............................. 84
Shareholder Letter -- (unaudited) Dear Shareholders, We are pleased to present this semi-annual update for the SunAmerica Income Funds for the six month period ended September 30, 2016. It was a time wherein fixed income market performance was primarily driven by shifting expectations about global economic growth and central bank policy. For this semi-annual period overall, the Bloomberg Barclays U.S. Aggregate Bond Index/*/, a broad measure of the U.S. fixed income market, returned 2.68%. As the semi-annual period began in April 2016, accommodative central bank monetary policy, near-term stabilization in China and a rebound in commodity prices supported global fixed income markets. However, investors turned more cautious in June 2016 as the outcome of the referendum on the U.K.'s membership in the European Union moved into sharper focus. The U.K.'s surprise vote to leave the European Union, popularly known as Brexit, led to a spike in global financial market volatility and a flight to safety at the end of the second calendar quarter, with U.K. and European equity and credit markets bearing the brunt of the sell-off. In the U.S., economic data released during the second calendar quarter was generally constructive, but the Federal Reserve (the "Fed") held interest rates steady, while upholding its baseline view for a gradual tightening in monetary policy. After a flurry of hawkish Fed rhetoric in May 2016, markets started to come around to the idea of a possible rate hike in June or July 2016. However, a weak U.S. payroll report in early June 2016 and growing uncertainty over Brexit started to unwind some of those expectations, and the Fed held rates steady at its June 2016 meeting amid lingering uncertainty about the strength of the global economy. For the second calendar quarter overall, global government bond yields fell across most developed market economies. Outperforming U.S. Treasuries was the high yield corporate bond sector, assisted by a rally in oil and other commodity prices. Emerging markets debt also performed well, as spreads, or yield differentials to U.S. Treasuries, tightened. Investment grade corporate bonds and commercial mortgage-backed securities outpaced U.S. Treasuries as well. Residential mortgage-backed securities and asset-backed securities posted positive returns but lagged U.S. Treasuries for the quarter. Volatility across the major fixed income asset classes declined markedly in the third calendar quarter of 2016 as fears about the adverse consequences of Brexit subsided. Credit sectors more than fully recovered from their post-Brexit shock, as the negative impact on financial markets turned out to be smaller than originally feared. Expectations of an extended period of central bank policy accommodation amid sluggish global economic growth also supported fixed income markets. That said, the policy paths of major central banks appeared to increasingly diverge during the third quarter of 2016. Some central banks, such as those of Australia and New Zealand, acted to counter slowing economic growth and disinflationary pressures. The Bank of England unveiled a stimulus package designed to prevent a recession following the country's vote to leave the European Union. The Bank of Japan made changes whereby it aimed to keep the yield on its 10-year government bond near zero, and it introduced a commitment to expand its monetary base until core inflation overshoots its 2% target. In contrast, the European Central Bank (ECB) kept its stimulus program unchanged, as did the Fed. For the third calendar quarter as a whole, global government bond yields diverged, rising in the U.S. and Japan and falling in the U.K., Europe, Australia and Canada. Most spread, or non-government bond, sectors posted positive total returns as spreads tightened, with lower quality sectors leading the way. For the semi-annual period overall, U.S. Treasury securities posted positive returns, with the yield on the 10-year U.S. Treasury declining approximately 18 basis points+ to 1.59% by the end of September 2016. The U.S. Treasury yield curve, or spectrum of maturities, flattened during the six months ended September 30, 2016, as yields on maturities of less than four years rose and yields on maturities of four years and longer fell. Non-U.S. Treasury sectors generally outperformed U.S. Treasuries. High yield corporate bonds outperformed U.S. Treasuries by a double-digit margin, followed at some distance by emerging markets debt and investment grade corporate bonds. Commercial mortgage-backed securities, agency securities, mortgage-backed securities and asset-backed securities also outperformed U.S. Treasuries, albeit more modestly. 2 Against this backdrop, each of the SunAmerica Income Funds generated positive absolute returns during the six-month period ended September 30, 2016. On the following pages, you will find financial statements and portfolio information for each of the SunAmerica Income Funds during this semi-annual period. We thank you for being a part of the SunAmerica Income Funds. We value your ongoing confidence in us and look forward to serving your investment needs in the future. As always, if you have any questions regarding your investments, please contact your financial adviser or get in touch us directly at 800-858-8850 or www.safunds.com. Sincerely, The SunAmerica Income Funds Investment Professionals Timothy Campion Robert Vanden Assem David L. Albrycht Andrew Doulos Anders Faergemann Frank Ossino Kara Murphy Dana Burns Jonathan Stanley Andrew Sheridan John Yovanovic Jane Bayar -------- Past performance is no guarantee of future results. * The Bloomberg Barclays U.S. Aggregate Bond Index represents securities that are SEC-registered, taxable and dollar denominated. The index covers the U.S. investment-grade fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities and asset-backed securities. Indices are not managed and an investor cannot invest directly in an index. + A basis point is 1/100/th/ of a percentage point. 3 SunAmerica Income Funds EXPENSE EXAMPLE -- September 30, 2016 -- (unaudited) Disclosure of Portfolio Expenses in Shareholder Reports As a shareholder of a fund (each, a "Fund" and collectively the "Funds") in the SunAmerica Income Funds (the "Trust"), you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges and (2) ongoing costs, including management fees, distribution and service fees and other Fund expenses. The example set forth below is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at April 1, 2016 and held until September 30, 2016. Actual Expenses The "Actual" section of the table provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the column under the heading entitled "Expenses Paid During the Six Months Ended September 30, 2016" to estimate the expenses you paid on your account during this period. The "Expenses Paid During the Six Months Ended September 30, 2016" column and the "Annualized Expense Ratio" column do not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid During the Six Months Ended September 30, 2016" column and the "Annualized Expense Ratio" column do not include administrative fees that may apply to qualified retirement plan accounts. See the Funds' prospectuses, your retirement plan document and/or materials from your financial adviser for a full description of these fees. Had these fees been included, the "Expenses Paid During the Six Months Ended September 30, 2016" column would have been higher and the "Ending Account Value" column would have been lower. Hypothetical Example for Comparison Purposes The "Hypothetical" section of the table provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an annual rate of return of 5% before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The "Expenses Paid During the Six Months Ended September 30, 2016" column and the "Annualized Expense Ratio" column do not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid During the Six Months Ended September 30, 2016" column and the "Annualized Expense Ratio" column do not include administrative fees that may apply to qualified retirement plan accounts and accounts held through financial institutions. See the Funds' prospectuses, your retirement plan document and/or materials from your financial adviser for a full description of these fees. Had these fees been included, the "Expenses Paid During the Six Months Ended September 30, 2016" column would have been higher and the "Ending Account Value" column would have been lower. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, including sales charges on purchase payments, contingent deferred sales charges, small account fees and administrative fees, if applicable to your account. Please refer to the Funds' prospectus, your retirement plan document and/or material from your financial adviser, for more information. Therefore, the "Hypothetical" example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs and other fees were included, your costs would have been higher. 4 SunAmerica Income Funds EXPENSE EXAMPLE -- September 30, 2016 -- (unaudited) (continued)
Actual Hypothetical ------------------------------------------ ------------------------------------------ Ending Account Ending Account Expenses Paid Value using Expenses Paid Value using During the a Hypothetical During the Beginning Actual Six Months Beginning 5% Annual Six Months Account Value Return at Ended Account Value Return at Ended Annualized at April 1, September 30, September 30, at April 1, September 30, September 30, Expense Fund 2016 2016 2016* 2016 2016 2016* Ratio* ---- ------------- -------------- ------------- ------------- -------------- ------------- ---------- U.S. Government Securities Class A#................. $1,000.00 $1,012.65 $ 4.99 $1,000.00 $1,020.10 $ 5.01 0.99% Class C#................. $1,000.00 $1,009.36 $ 8.26 $1,000.00 $1,016.85 $ 8.29 1.64% Strategic Bond Fund Class A.................. $1,000.00 $1,067.87 $ 6.89 $1,000.00 $1,018.40 $ 6.73 1.33% Class B.................. $1,000.00 $1,064.33 $10.30 $1,000.00 $1,015.09 $10.05 1.99% Class C.................. $1,000.00 $1,061.02 $10.23 $1,000.00 $1,015.14 $10.00 1.98% Class W.................. $1,000.00 $1,068.94 $ 5.81 $1,000.00 $1,019.45 $ 5.67 1.12% Flexible Credit Fund Class A.................. $1,000.00 $1,060.45 $ 7.49 $1,000.00 $1,017.80 $ 7.33 1.45% Class C.................. $1,000.00 $1,056.82 $10.67 $1,000.00 $1,014.69 $10.45 2.07% Class W.................. $1,000.00 $1,064.82 $ 6.16 $1,000.00 $1,019.10 $ 6.02 1.19%
-------- * Expenses are equal to each Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183 days then divided by 365 days (to reflect the one-half year period). These ratios do not reflect transaction costs, including sales charges on purchase payments, contingent deferred sales charges, small account fees and administrative fees, if applicable to your account. Please refer to your Prospectus, your retirement plan documents and/or materials from your financial adviser for more information. # During the stated period, the investment advisor either waived a portion of or all of the fees and assumed a portion of or all expenses for the Funds. As a result, if these fees and expenses had not been waived or assumed, the "Actual/Hypothetical Ending Account Value" would have been lower and the "Actual/Hypothetical Expenses Paid During the Six Months Ended September 30, 2016" and the "Annualized Expense Ratio" would have been higher. 5 SunAmerica Income Funds STATEMENTS OF ASSETS AND LIABILITIES -- September 30, 2016 -- (unaudited)
U.S. Government Strategic Flexible Securities Bond Credit Fund Fund Fund --------------- ------------ ------------ ASSETS: Investments at value (unaffiliated)*........................ $192,301,698 $404,072,201 $346,211,528 Repurchase agreements (cost approximates value)............. 11,282,000 1,203,000 -- ------------ ------------ ------------ Total investments.......................................... 203,583,698 405,275,201 346,211,528 ------------ ------------ ------------ Cash........................................................ 584 1,300,291 652,515 Foreign cash*............................................... -- 139,560 7,171 Receivable for: Shares of beneficial interest sold......................... 99,397 780,478 1,577,921 Dividends and interest..................................... 862,408 4,334,916 3,338,972 Investments sold........................................... -- 10,225,485 3,563,424 Prepaid Expenses and other assets........................... 3,918 4,532 5,850 Due from investment adviser for expense reimbursements/fee waivers.................................................... 130,487 -- -- Unrealized appreciation on forward foreign currency contracts.................................................. -- 95,102 -- ------------ ------------ ------------ Total Assets................................................ 204,680,492 422,155,565 355,357,381 ------------ ------------ ------------ LIABILITIES: Payable for: Shares of beneficial interest redeemed..................... 165,814 742,102 780,303 Investments purchased...................................... -- 34,101,093 17,049,067 Investment advisory and management fees.................... 107,542 207,292 199,357 Distribution and service maintenance fees.................. 73,540 204,372 112,157 Transfer agent fees and expenses........................... 44,928 82,800 68,707 Trustees' fees and expenses................................ 727 1,352 624 Other accrued expenses..................................... 70,890 136,670 80,830 Dividends payable........................................... -- 57,609 213,234 Line of credit.............................................. -- -- 1,211,297 Unrealized depreciation on forward foreign currency contracts.................................................. -- 14,817 -- ------------ ------------ ------------ Total Liabilities........................................... 463,441 35,548,107 19,715,576 ------------ ------------ ------------ Net Assets.................................................. $204,217,051 $386,607,458 $335,641,805 ============ ============ ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $0.01........................ $ 211,975 $ 1,126,304 $ 979,364 Paid-in capital............................................. 208,510,575 457,794,197 394,200,684 ------------ ------------ ------------ 208,722,550 458,920,501 395,180,048 Accumulated undistributed net investment income (loss)...... (1,308,347) (2,958,555) 302,269 Accumulated undistributed net realized gain (loss) on investments, swap contracts, futures contracts, options contracts, securities sold short and foreign exchange transactions and capital gain distributions from underlying funds........................................... (12,180,269) (74,428,448) (60,660,851) Unrealized appreciation (depreciation) on investments....... 8,983,117 4,995,200 821,166 Unrealized foreign exchange gain (loss) on other assets and liabilities................................................ -- 78,760 (827) ------------ ------------ ------------ Net Assets.................................................. $204,217,051 $386,607,458 $335,641,805 ============ ============ ============ *Cost Investment securities (unaffiliated)....................... $183,318,581 $399,077,001 $345,390,362 ============ ============ ============ Foreign cash............................................... $ -- $ 138,615 $ 7,998 ============ ============ ============
See Notes to Financial Statements 6 SunAmerica Income Funds STATEMENTS OF ASSETS AND LIABILITIES -- September 30, 2016 -- (unaudited) (continued)
U.S. Government Strategic Flexible Securities Bond Credit Fund Fund Fund --------------- ------------ ------------ Class A (unlimited shares authorized): Net assets............................................................ $175,082,929 $172,184,715 $142,525,486 Shares of beneficial interest issued and outstanding.................. 18,171,672 50,228,696 41,664,642 Net asset value and redemption price per share (excluding any applicable contingent deferred sales charge)......................... $ 9.63 $ 3.43 $ 3.42 Maximum sales charge (4.75% of offering price)........................ $ 0.48 $ 0.17 $ 0.17 ------------ ------------ ------------ Maximum offering price to public...................................... $ 10.11 $ 3.60 $ 3.59 ============ ============ ============ Class B (unlimited shares authorized): Net assets............................................................ $ -- $ 31,081,967 $ -- Shares of beneficial interest issued and outstanding.................. -- 9,071,105 -- Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge)..................... $ -- $ 3.43 $ -- ============ ============ ============ Class C (unlimited shares authorized): Net assets............................................................ $ 29,134,122 $149,523,670 $ 70,755,582 Shares of beneficial interest issued and outstanding.................. 3,025,786 43,460,533 20,553,784 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge)..................... $ 9.63 $ 3.44 $ 3.44 ============ ============ ============ Class W (unlimited shares authorized): Net assets............................................................ $ -- $ 33,817,106 $122,360,737 Shares of beneficial interest issued and outstanding.................. -- 9,870,116 35,717,951 Net asset value, offering and redemption price per share.............. $ -- $ 3.43 $ 3.43 ============ ============ ============
See Notes to Financial Statements 7 SunAmerica Income Funds STATEMENTS OF OPERATIONS -- For the six months ended September 30, 2016 -- (unaudited)
U.S. Government Strategic Flexible Securities Bond Credit Fund Fund Fund --------------- ----------- ----------- INCOME: Dividends (unaffiliated)................................................... $ -- $ 19,329 $ 103,784 Interest (unaffiliated).................................................... 1,811,296 8,142,582 8,238,578 ---------- ----------- ----------- Total investment income*................................................. 1,811,296 8,161,911 8,342,362 ---------- ----------- ----------- EXPENSES: Investment advisory and management fees.................................... 632,112 1,256,860 1,122,794 Distribution and service maintenance fees: Class A.................................................................. 287,972 308,410 231,389 Class B.................................................................. -- 154,688 -- Class C.................................................................. 150,121 756,538 331,590 Service fees -- Class W.................................................... -- 23,421 78,743 Transfer agent fees: Class A.................................................................. 198,978 211,135 156,580 Class B.................................................................. -- 37,246 -- Class C.................................................................. 37,193 174,964 75,803 Class W.................................................................. -- 34,875 116,314 Registration fees: Class A.................................................................. 13,227 7,567 30,115 Class B.................................................................. -- 3,427 -- Class C.................................................................. 14,278 16,173 9,171 Class W.................................................................. -- 3,403 4,758 Custodian and accounting fees.............................................. 18,775 56,004 31,119 Reports to shareholders.................................................... 18,730 41,302 20,800 Audit and tax fees......................................................... 23,600 30,440 30,924 Legal fees................................................................. 6,338 10,332 7,955 Trustees' fees and expenses................................................ 5,209 10,546 7,394 Interest expense........................................................... 257 -- 4,732 Other expenses............................................................. 7,478 11,313 9,654 ---------- ----------- ----------- Total expenses before fee waivers, expense reimbursements and expense recoupments............................................................. 1,414,268 3,148,644 2,269,835 Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3)........................................................ (353,520) -- -- ---------- ----------- ----------- Net expenses............................................................. 1,060,748 3,148,644 2,269,835 ---------- ----------- ----------- Net investment income (loss)............................................. 750,548 5,013,267 6,072,527 ---------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on investments (unaffiliated)...................... 371,527 (2,011,548) 1,003,606 Net realized foreign exchange gain (loss) on other assets and liabilities... -- (442,170) 3,113 ---------- ----------- ----------- Net realized gain (loss) on investments and foreign currencies.............. 371,527 (2,453,718) 1,006,719 ---------- ----------- ----------- Change in unrealized appreciation (depreciation) on investments (unaffiliated)............................................................. 1,127,654 19,935,258 10,643,526 Change in unrealized foreign exchange gain (loss) on other assets and liabilities................................................................ -- 1,672,998 (93) ---------- ----------- ----------- Net unrealized gain (loss) on investments and foreign currencies............ 1,127,654 21,608,256 10,643,433 ---------- ----------- ----------- Net realized and unrealized gain (loss) on investments and foreign currencies................................................................. 1,499,181 19,154,538 11,650,152 ---------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............. $2,249,729 $24,167,805 $17,722,679 ========== =========== =========== * Net of foreign withholding taxes on interest and dividends of............. $ -- $ 24 $ -- ========== =========== ===========
See Notes to Financial Statements 8 SunAmerica Income Funds STATEMENTS OF CHANGES IN NET ASSETS
U.S. Government Securities Fund -------------------------- For the six months ended For year September 30, ended 2016 March 31, (unaudited) 2016 ------------- ------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss)......................................... $ 750,548 $ 1,356,002 Net realized gain (loss) on investments and foreign currencies....... 371,527 182,870 Net unrealized gain (loss) on investments and foreign currencies..... 1,127,654 (1,357,314) ------------ ------------ Net increase (decrease) in net assets resulting from operations....... 2,249,729 181,558 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)...................................... (1,380,632) (2,895,384) Net investment income (Class B)*..................................... -- -- Net investment income (Class C)...................................... (154,595) (293,718) Net investment income (Class W)*..................................... -- -- Net realized gain on securities (Class A)............................ -- -- Net realized gain on securities (Class B)*........................... -- -- Net realized gain on securities (Class C)............................ -- -- Net realized gain on securities (Class W)*........................... -- -- ------------ ------------ Total distributions to shareholders................................... (1,535,227) (3,189,102) ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 6)................................................ 15,369,424 (20,275,343) ------------ ------------ Total increase (decrease) in net assets............................... 16,083,926 (23,282,887) NET ASSETS: Beginning of period................................................... 188,133,125 211,416,012 ------------ ------------ End of period+........................................................ $204,217,051 $188,133,125 ============ ============ + Includes accumulated undistributed net investment income (loss)..... $ (1,308,347) $ (523,668) ============ ============
* See Note 1 See Notes to Financial Statements 9 SunAmerica Income Funds STATEMENTS OF CHANGES IN NET ASSETS -- (continued)
Strategic Bond Fund Flexible Credit Fund -------------------------- -------------------------- For the For the six months six months ended For the year ended For the year September 30, ended September 30, ended 2016 March 31, 2016 March 31, (unaudited) 2016 (unaudited) 2016 ------------- ------------ ------------- ------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss)...... $ 5,013,267 $ 13,804,186 $ 6,072,527 $ 9,204,013 Net realized gain (loss) on investments and foreign currencies. (2,453,718) (17,240,406) 1,006,719 (5,156,658) Net unrealized gain (loss) on investments and foreign currencies. 21,608,256 (8,304,403) 10,643,433 (7,105,660) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations...... 24,167,805 (11,740,623) 17,722,679 (3,058,305) ------------ ------------ ------------ ------------ Distributions to shareholders from: Net investment income (Class A)... (3,163,277) (8,053,946) (2,646,274) (4,950,089) Net investment income (Class B)*.. (452,372) (1,193,570) -- -- Net investment income (Class C)... (2,221,989) (5,817,628) (1,113,984) (2,058,159) Net investment income (Class W)*.. (591,153) (1,325,284) (2,229,626) (2,677,821) Net realized gain on securities (Class A).......... -- -- -- -- Net realized gain on securities (Class B)*......... -- -- -- -- Net realized gain on securities (Class C).......... -- -- -- -- Net realized gain on securities (Class W)*......... -- -- -- -- ------------ ------------ ------------ ------------ Total distributions to shareholders...... (6,428,791) (16,390,428) (5,989,884) (9,686,069) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 6) (18,817,901) (58,954,992) 45,801,793 104,299,983 ------------ ------------ ------------ ------------ Total increase (decrease) in net assets............... (1,078,887) (87,086,043) 57,534,588 91,555,609 NET ASSETS: Beginning of period... 387,686,345 474,772,388 278,107,217 186,551,608 ------------ ------------ ------------ ------------ End of period+........ $386,607,458 $387,686,345 $335,641,805 $278,107,217 ============ ============ ============ ============ + Includes accumulated undistributed net investment income (loss)............... $ (2,958,555) $ (1,543,031) $ 302,269 $ 219,626 ============ ============ ============ ============
* See Note 1 See Notes to Financial Statements 10 SunAmerica Income Funds FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT SECURITIES FUND ------------------------------- Net gain (loss) on Net investments Distributions Net Net Asset (both Dividends from net Asset Assets, Value, Net realized Total from from net realized Total Value, end of beginning investment and investment investment gains on Distri- end of Total period Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's) ------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- Class A ------- 03/31/12 $ 9.51 $0.17 $ 0.62 $ 0.79 $(0.22) $(0.02) $(0.24) $10.06 8.34%(4) $118,434 03/31/13 10.06 0.14 0.05 0.19 (0.21) (0.13) (0.34) 9.91 1.84 121,807 03/31/14 9.91 0.14 (0.45) (0.31) (0.17) -- (0.17) 9.43 (3.11) 106,747 03/31/15 9.43 0.12 0.34 0.46 (0.16) -- (0.16) 9.73 4.94 187,417 03/31/16 9.73 0.08 (0.05) 0.03 (0.17) -- (0.17) 9.59 0.33 156,468 09/30/16+ 9.59 0.04 0.08 0.12 (0.08) -- (0.08) 9.63 1.27 175,083 Class C ------- 03/31/12 $ 9.50 $0.11 $ 0.61 $ 0.72 $(0.15) $(0.02) $(0.17) $10.05 7.64%(4) $ 14,673 03/31/13 10.05 0.08 0.05 0.13 (0.14) (0.13) (0.27) 9.91 1.28 12,226 03/31/14 9.91 0.08 (0.46) (0.38) (0.11) -- (0.11) 9.42 (3.84) 7,295 03/31/15 9.42 0.06 0.34 0.40 (0.10) -- (0.10) 9.72 4.27 23,999 03/31/16 9.72 0.01 (0.03) (0.02) (0.11) -- (0.11) 9.59 (0.22) 31,665 09/30/16+ 9.59 0.01 0.08 0.09 (0.05) -- (0.05) 9.63 0.94 29,134
Ratio of net Ratio of investment expenses income to to average average Portfolio net assets(3) net assets(3) Turnover ------------- ------------- --------- 0.99% 1.73% 152% 0.99 1.40 89 0.99 1.42 122 0.99 1.24 57 0.99 0.81 36 0.99(5) 0.87(5) 46 1.64% 1.08% 152% 1.64 0.76 89 1.64 0.77 122 1.64 0.61 57 1.64 0.16 36 1.64(5) 0.22(5) 46
-------- + Unaudited (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load, but does include expense reimbursements. (3)Net of the following expense reimbursements, if applicable (based on average net assets):
03/31/12 03/31/13 03/31/14 03/31/15 03/31/16 09/30/16+(5) -------- -------- -------- -------- -------- ------------ U.S. Government Securities Fund Class A. 0.39% 0.40% 0.40% 0.38% 0.37% 0.35% U.S. Government Securities Fund Class C. 0.46 0.45 0.57 0.50 0.39 0.44
(4)The Fund's performance figure was increased by less than 0.01% from gains on the disposal of investments in violation of investment restrictions. (5)Annualized See Notes to Financial Statements 11 SunAmerica Income Funds FINANCIAL HIGHLIGHTS -- (continued)
STRATEGIC BOND FUND ------------------- Net gain (loss) on Net investments Distributions Net Net Asset (both Dividends from net Asset Assets, Value, Net realized Total from from net realized Total Value, end of beginning investment and investment investment gains on Distri- end of Total period Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's) -------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- Class A ------- 03/31/12 $3.46 $0.16 $ 0.02 $ 0.18 $(0.19) $-- $(0.19) $3.45 5.30% $299,325 03/31/13 3.45 0.13 0.16 0.29 (0.14) -- (0.14) 3.60 8.64 336,759 03/31/14 3.60 0.14 (0.06) 0.08 (0.15) -- (0.15) 3.53 2.34 255,821 03/31/15 3.53 0.13 (0.04) 0.09 (0.13) -- (0.13) 3.49 2.70 235,093 03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.32) 175,386 09/30/16+ 3.27 0.05 0.17 0.22 (0.06) -- (0.06) 3.43 6.79 172,185 Class B ------- 03/31/12 $3.46 $0.14 $ 0.01 $ 0.15 $(0.16) $-- $(0.16) $3.45 4.60% $ 52,000 03/31/13 3.45 0.11 0.15 0.26 (0.12) -- (0.12) 3.59 7.62 56,776 03/31/14 3.59 0.12 (0.05) 0.07 (0.13) -- (0.13) 3.53 1.95 46,462 03/31/15 3.53 0.10 (0.03) 0.07 (0.11) -- (0.11) 3.49 2.01 39,733 03/31/16 3.49 0.10 (0.20) (0.10) (0.12) -- (0.12) 3.27 (2.97) 31,038 09/30/16+ 3.27 0.04 0.17 0.21 (0.05) -- (0.05) 3.43 6.43 31,082 Class C ------- 03/31/12 $3.48 $0.14 $ 0.02 $ 0.16 $(0.17) $-- $(0.17) $3.47 4.63% $251,425 03/31/13 3.47 0.11 0.15 0.26 (0.12) -- (0.12) 3.61 7.62 270,965 03/31/14 3.61 0.12 (0.06) 0.06 (0.13) -- (0.13) 3.54 1.69 197,904 03/31/15 3.54 0.11 (0.04) 0.07 (0.11) -- (0.11) 3.50 2.05 184,282 03/31/16 3.50 0.10 (0.19) (0.09) (0.12) -- (0.12) 3.29 (2.63) 151,197 09/30/16+ 3.29 0.04 0.16 0.20 (0.05) -- (0.05) 3.44 6.10 149,524 Class W ------- 01/29/15(4)-03/31/15 $3.48 $0.01 $ 0.02 $ 0.03 $(0.02) $-- $(0.02) $3.49 0.99% $ 15,664 03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.14) 30,065 09/30/16+ 3.27 0.05 0.17 0.22 (0.06) -- (0.06) 3.43 6.89 33,817
Ratio of net Ratio of investment expenses income to to average average Portfolio net assets net assets Turnover ---------- ---------- --------- 1.31% 4.72% 144% 1.30 3.70 166 1.31 4.01 158 1.30 3.62 137 1.34 3.54 108 1.33(5) 2.86(5) 124 1.98% 4.07% 144% 1.97 3.02 166 1.97 3.35 158 1.97 2.95 137 2.01 2.87 108 1.99(5) 2.20(5) 124 1.96% 4.09% 144% 1.94 3.05 166 1.96 3.37 158 1.94 2.98 137 1.98 2.90 108 1.98(5) 2.21(5) 124 1.20%(3)(5) 2.73%(3)(5) 137% 1.15 3.71 108 1.12(5) 3.06(5) 124
-------- + Unaudited (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load, but does include expense reimbursements. (3)Net of the following expense reimbursements, if applicable (based on average net assets):
03/31/15 -------- Strategic Bond Fund Class W............. 0.69%(5)
(4)Inception date of class. (5)Annualized. See Notes to Financial Statements 12 SunAmerica Income Funds FINANCIAL HIGHLIGHTS -- (continued)
FLEXIBLE CREDIT FUND -------------------- Net gain (loss) on Net investments Distributions Net Asset (both Dividends from net Asset Net Assets, Value, Net realized Total from from net realized Total Value, end of beginning investment and investment investment gains on Distri- end of Total period Period Ended of period income(1) unrealized) operations income investment butions period Return(2) (000's) -------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ----------- Class A ------- 03/31/12 $3.50 $0.23 $(0.08) $ 0.15 $(0.25) $-- $(0.25) $3.40 4.52% $ 81,477 03/31/13 3.40 0.20 0.18 0.38 (0.20) -- (0.20) 3.58 11.42 74,175 03/31/14 3.58 0.19 0.00 0.19 (0.18) -- (0.18) 3.59 5.60 70,713 03/31/15 3.59 0.15 (0.11) 0.04 (0.17) -- (0.17) 3.46 1.06 127,508 03/31/16 3.46 0.13 (0.16) (0.03) (0.14) -- (0.14) 3.29 (0.93) 125,775 09/30/16+ 3.29 0.07 0.13 0.20 (0.07) -- (0.07) 3.42 6.05 142,525 Class C ------- 03/31/12 $3.53 $0.21 $(0.09) $ 0.12 $(0.23) $-- $(0.23) $3.42 3.56% $ 36,723 03/31/13 3.42 0.18 0.18 0.36 (0.18) -- (0.18) 3.60 10.67 33,918 03/31/14 3.60 0.17 0.00 0.17 (0.16) -- (0.16) 3.61 4.92 30,595 03/31/15 3.61 0.13 (0.11) 0.02 (0.15) -- (0.15) 3.48 0.43 45,411 03/31/16 3.48 0.11 (0.16) (0.05) (0.12) -- (0.12) 3.31 (1.54) 61,891 09/30/16+ 3.31 0.06 0.13 0.19 (0.06) -- (0.06) 3.44 5.68 70,756 Class W ------- 10/01/14(4)-03/31/15 $3.50 $0.06 $(0.01) $ 0.05 $(0.08) $-- $(0.08) $3.47 1.57% 13,632 03/31/16 3.47 0.13 (0.17) (0.04) (0.14) -- (0.14) 3.29 (1.02) 90,441 09/30/16+ 3.29 0.07 0.14 0.21 (0.07) -- (0.07) 3.43 6.48 122,361
Ratio of net Ratio of investment expenses income to to average average Portfolio net assets(3) net assets(3) Turnover ------------- ------------- --------- 1.36% 6.72% 52% 1.36 5.82 44 1.36 5.41 49 1.41 4.50 74 1.45 3.92 52 1.45(5) 4.05(5) 25 2.01% 6.11% 52% 2.01 5.18 44 2.01 4.76 49 2.06 3.88 74 2.10 3.27 52 2.07(5) 3.43(5) 25 1.25%(5) 4.25%(5) 74% 1.25 4.11 52 1.19(5) 4.30(5) 25
-------- + Unaudited (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load, but does include expense reimbursements. (3)Net of the following expense reimbursements, if applicable (based on average net assets):
03/31/12 03/31/13 03/31/14 03/31/15 03/31/16 09/30/16+(5) -------- -------- -------- -------- -------- ------------ Flexible Credit Fund Class A............ 0.18% 0.16% 0.17% 0.19% 0.03% --% Flexible Credit Fund Class C............ 0.19 0.16 0.18 0.20 0.02 -- Flexible Credit Fund Class W............ -- -- -- 1.12(5) 0.04 --
(4)Inception date of class. (5)Annualized. See Notes to Financial Statements 13 SunAmerica U.S. Government Securities Fund PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited) Industry Allocation* Government National Mtg. Assoc.. 34.4% United States Treasury Notes.... 16.8 United States Treasury Bonds.... 16.5 Federal Farm Credit Bank........ 14.5 Federal Home Loan Mtg. Corp..... 5.7 Repurchase Agreements........... 5.5 Federal Home Loan Bank.......... 4.1 Federal National Mtg. Assoc..... 2.1 Small Business Administration... 0.1 ---- 99.7% ====
Credit Quality+# Aaa........... 100.0% =====
-------- *Calculated as a percentage of net assets +Source: Moody's #Calculated as a percentage of total debt issues 14 SunAmerica U.S. Government Securities Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
Principal Value Security Description Amount (Note 2) U.S. GOVERNMENT AGENCIES -- 60.9% Federal Farm Credit Bank -- 14.5% 2.35% due 07/07/2025............... $ 4,350,000 $ 4,350,231 2.36% due 06/16/2025............... 20,000,000 20,114,800 2.63% due 02/24/2025............... 5,150,000 5,153,141 ----------- 29,618,172 ----------- Federal Home Loan Bank -- 4.1% 0.75% due 08/15/2019(1)............ 2,250,000 2,248,769 1.69% due 02/26/2021............... 4,000,000 4,000,044 2.14% due 12/05/2022............... 372,093 371,878 4.50% due 09/13/2019............... 1,490,000 1,639,921 ----------- 8,260,612 ----------- Federal Home Loan Mtg. Corp. -- 5.7% 3.50% due 08/01/2030............... 4,003,312 4,235,326 3.50% due 12/01/2044............... 4,700,271 4,975,998 Federal Home Loan Mtg. Corp. REMIC Series 3747, Class WA 3.50% due 10/15/2030(2)............ 2,336,622 2,475,523 ----------- 11,686,847 ----------- Federal National Mtg. Assoc. -- 2.1% 2.50% due 11/01/2027............... 4,206,384 4,361,172 ----------- Government National Mtg. Assoc. -- 34.4% 3.50% due 11/15/2041............... 587,193 624,657 3.50% due 03/15/2042............... 436,446 465,908 3.50% due 06/15/2042............... 2,484,504 2,641,066 3.50% due 07/15/2042............... 816,673 868,356 3.50% due 02/20/2045............... 1,327,074 1,409,711 4.00% due 03/15/2039............... 245,081 263,471 4.00% due 04/15/2039............... 134,356 144,439 4.00% due 06/15/2039............... 631,024 678,123 4.00% due 12/15/2039............... 314,569 338,176 4.00% due 08/15/2040............... 282,138 303,314 4.00% due 09/15/2040............... 480,559 517,081 4.00% due 11/15/2040............... 458,727 494,548 4.00% due 12/15/2040............... 839,919 906,554 4.00% due 02/15/2041............... 387,426 416,644 4.00% due 03/15/2041............... 245,303 264,091 4.00% due 07/15/2041............... 486,467 523,820 4.00% due 08/15/2041............... 985,242 1,060,931 4.00% due 09/15/2041............... 1,902,071 2,046,347 4.00% due 10/15/2041............... 881,093 949,975 4.00% due 11/15/2041............... 2,705,678 2,915,799 4.00% due 12/15/2041............... 1,156,999 1,249,261 4.00% due 01/15/2042............... 2,131,122 2,294,415 4.00% due 02/15/2042............... 1,253,203 1,351,358 4.00% due 03/15/2042............... 296,774 319,947 4.00% due 06/15/2042............... 539,540 581,565 4.50% due 05/15/2018............... 76,442 77,790 4.50% due 08/15/2018............... 82,690 84,177 4.50% due 09/15/2018............... 282,208 287,820 4.50% due 10/15/2018............... 385,787 393,381 4.50% due 09/15/2033............... 434,034 483,443 4.50% due 03/15/2039............... 127,713 141,039 4.50% due 04/15/2039............... 103,480 114,292 4.50% due 05/15/2039............... 475,822 526,047 4.50% due 06/15/2039............... 1,784,895 1,974,098 4.50% due 07/15/2039............... 853,545 944,254 4.50% due 09/15/2039............... 248,278 274,601
Principal Value Security Description Amount (Note 2) Government National Mtg. Assoc. (continued) 4.50% due 10/15/2039...... $ 259,638 $ 286,883 4.50% due 11/15/2039...... 260,199 287,743 4.50% due 12/15/2039...... 699,102 773,223 4.50% due 01/15/2040...... 329,268 364,288 4.50% due 02/15/2040...... 1,375,200 1,520,131 4.50% due 03/15/2040...... 795,626 880,850 4.50% due 04/15/2040...... 818,762 906,147 4.50% due 05/15/2040...... 340,803 377,805 4.50% due 06/15/2040...... 373,076 412,006 4.50% due 07/15/2040...... 684,493 757,557 4.50% due 08/15/2040...... 176,858 195,950 4.50% due 09/15/2040...... 178,779 198,777 4.50% due 11/15/2040...... 248,925 275,832 4.50% due 01/15/2041...... 238,716 263,623 4.50% due 02/15/2041...... 265,375 293,065 4.50% due 03/15/2041...... 1,719,955 1,902,319 4.50% due 04/15/2041...... 1,006,950 1,113,870 4.50% due 05/15/2041...... 337,058 372,573 4.50% due 06/15/2041...... 554,920 613,374 4.50% due 07/15/2041...... 164,740 181,929 4.50% due 08/15/2041...... 515,115 570,368 4.50% due 04/20/2044...... 978,108 1,056,591 5.00% due 04/15/2018...... 320,640 328,309 5.00% due 05/15/2018...... 34,302 34,665 5.00% due 08/15/2033...... 483,722 543,298 5.00% due 10/15/2033...... 789,380 884,857 5.00% due 05/15/2035...... 131,791 146,909 5.00% due 08/15/2035...... 440,775 495,816 5.00% due 03/15/2036...... 176,945 197,652 5.00% due 05/15/2036...... 111,675 125,693 5.00% due 09/15/2036...... 254,695 285,033 5.00% due 10/15/2036...... 96,017 107,031 5.00% due 01/15/2037...... 256,728 286,179 5.00% due 02/15/2037...... 473,208 530,518 5.00% due 03/15/2037...... 95,615 107,548 5.00% due 04/15/2037...... 682,266 765,530 5.00% due 04/15/2038...... 577,358 649,139 5.00% due 05/15/2038...... 286,166 320,701 5.00% due 08/15/2038...... 707,553 789,117 5.00% due 01/15/2039...... 261,771 294,312 5.00% due 02/15/2039...... 141,913 159,520 5.00% due 03/15/2039...... 142,330 158,658 5.00% due 04/15/2039...... 211,172 237,399 5.00% due 07/20/2039...... 1,352,611 1,491,243 5.00% due 08/15/2039...... 379,790 425,635 5.00% due 09/20/2039...... 4,440,580 4,963,152 5.00% due 10/15/2039...... 922,078 1,031,630 5.00% due 11/15/2039...... 790,601 889,469 5.00% due 12/15/2039...... 659,829 741,402 5.00% due 04/15/2040...... 672,020 755,032 5.00% due 05/15/2040...... 1,299,157 1,453,645 5.00% due 07/20/2045...... 616,628 670,430 5.50% due 06/15/2033...... 867,829 988,655 5.50% due 07/15/2033...... 134,765 154,232 5.50% due 10/15/2033...... 206,960 236,571 5.50% due 01/15/2034...... 609,922 696,190 5.50% due 02/15/2034...... 323,668 374,130
15 SunAmerica U.S. Government Securities Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. GOVERNMENT AGENCIES (continued) Government National Mtg. Assoc. (continued) 5.50% due 04/20/2035........ $ 575,404 $ 653,342 5.50% due 09/15/2035........ 523,211 611,866 5.50% due 10/15/2035........ 400,450 457,404 5.50% due 02/15/2038........ 190,778 216,305 5.50% due 04/15/2038........ 108,198 122,294 5.50% due 05/15/2038........ 102,473 115,822 5.50% due 09/15/2039........ 94,566 107,149 5.50% due 03/15/2040........ 174,613 198,947 5.50% due 08/15/2040........ 127,891 144,552 6.00% due 04/15/2028........ 196,222 229,717 6.00% due 08/15/2033........ 314,954 369,788 6.00% due 12/15/2033........ 151,694 177,919 6.00% due 07/15/2034........ 116,291 133,225 6.00% due 12/15/2034........ 111,156 129,489 6.00% due 09/20/2038........ 1,405,389 1,609,557 6.50% due 10/15/2031........ 104,346 120,335 ------------ 70,252,414 ------------ Small Business Administration -- 0.1% 6.30% due 06/01/2018........ 84,901 87,755 ------------ Total U.S. Government Agencies (cost $121,992,028)......... 124,266,972 ------------ U.S. GOVERNMENT TREASURIES -- 33.3% United States Treasury Bonds -- 16.5% 2.25% due 08/15/2046........ 16,000,000 15,710,000 2.50% due 02/15/2045........ 1,000,000 1,033,438 4.25% due 11/15/2040........ 8,000,000 11,015,624 4.75% due 02/15/2041........ 4,000,000 5,901,408 ------------ 33,660,470 ------------
Principal Value Security Description Amount (Note 2) United States Treasury Notes -- 16.8% 1.63% due 05/15/2026............... $25,000,000 $ 25,033,200 2.00% due 02/15/2025............... 5,000,000 5,177,735 2.00% due 08/15/2025............... 3,000,000 3,104,532 3.13% due 05/15/2019............... 1,000,000 1,058,789 ------------ 34,374,256 ------------ Total U.S. Government Treasuries (cost $61,326,553)................. 68,034,726 ------------ Total Long-Term Investment Securities (cost $183,318,581)................ 192,301,698 ------------ REPURCHASE AGREEMENTS -- 5.5% State Street Bank and Trust Co. Joint Repurchase Agreement(3) (cost $11,282,000)................. 11,282,000 11,282,000 ------------ TOTAL INVESTMENTS (cost $194,600,581)(4)............. 99.7% 203,583,698 Other assets less liabilities......... 0.3 633,353 ----------- ------------ NET ASSETS 100.0% $204,217,051 =========== ============
-------- (1)"Step-up" security where the rate increases ("steps-up") at a predetermined rate. Rate shown reflects the increased rate. (2)Collateralized Mortgage Obligation (3)See Note 2 for details of Joint Repurchase Agreements. (4)See Note 5 for cost of investments on a tax basis. 16 SunAmerica U.S. Government Securities Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued) The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2016 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant Quoted Prices Observable Inputs Unobservable Inputs Total - --------------------- ----------------- ---------------------- ------------ ASSETS: Investments at Value:* U.S. Government Agencies... $-- $124,266,972 $-- $124,266,972 U.S. Government Treasuries. -- 68,034,726 -- 68,034,726 Repurchase Agreements...... -- 11,282,000 -- 11,282,000 --- ------------ --- ------------ Total Investments at Value. $-- $203,583,698 $-- $203,583,698 === ============ === ============
-------- * For a detailed presentation of investments, please refer to the Portfolio of Investments. The Fund's policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period. See Notes to Financial Statements 17 SunAmerica Strategic Bond Fund PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited) Industry Allocation* Federal National Mtg. Assoc............ 13.5% Federal Home Loan Mtg. Corp............ 10.1 Sovereign.............................. 7.9 Time Deposits.......................... 5.5 Diversified Banking Institutions....... 5.0 Government National Mtg. Assoc......... 3.7 Banks-Commercial....................... 2.9 Pipelines.............................. 2.5 Oil Companies-Exploration & Production. 2.5 Diversified Financial Services......... 2.3 Electric-Integrated.................... 2.3 Telephone-Integrated................... 2.2 Cable/Satellite TV..................... 1.9 Oil Companies-Integrated............... 1.4 Auto-Cars/Light Trucks................. 1.3 Medical-Hospitals...................... 1.3 Cellular Telecom....................... 1.2 United States Treasury Bonds........... 0.9 Paper & Related Products............... 0.9 Computers.............................. 0.8 Real Estate Investment Trusts.......... 0.8 Satellite Telecom...................... 0.7 Steel-Producers........................ 0.7 Finance-Consumer Loans................. 0.7 Finance-Auto Loans..................... 0.7 Computer Services...................... 0.6 Savings & Loans/Thrifts................ 0.6 Insurance-Multi-line................... 0.6 Casino Hotels.......................... 0.5 Oil Refining & Marketing............... 0.5 Medical-Drugs.......................... 0.5 Electric-Generation.................... 0.5 Banks-Fiduciary........................ 0.5 Food-Retail............................ 0.5 Electronic Components-Semiconductors... 0.5 Retail-Restaurants..................... 0.5 Banks-Super Regional................... 0.4 Gambling (Non-Hotel)................... 0.4 Diversified Manufacturing Operations... 0.4 Brewery................................ 0.4 Aerospace/Defense-Equipment............ 0.4 Rental Auto/Equipment.................. 0.4 United States Treasury Notes........... 0.4 Independent Power Producers............ 0.4 Auto-Heavy Duty Trucks................. 0.4 Investment Management/Advisor Services. 0.4 Food-Misc./Diversified................. 0.4 Airlines............................... 0.4 Printing-Commercial.................... 0.4 Insurance-Mutual....................... 0.4 Medical Labs & Testing Services........ 0.4 Electric-Distribution.................. 0.4 Metal Processors & Fabrication......... 0.4 Building-Residential/Commercial........ 0.3 Telecom Services....................... 0.3 Insurance-Life/Health.................. 0.3 Containers-Metal/Glass................. 0.3 Medical-HMO............................ 0.3 Repurchase Agreements.................. 0.3 Chemicals-Diversified.................. 0.3
Internet Connectivity Services....... 0.3% Oil-Field Services................... 0.3 Diversified Minerals................. 0.3 Medical-Biomedical/Gene.............. 0.3 Machinery-Farming.................... 0.3 Food-Dairy Products.................. 0.3 Coal................................. 0.3 Wire & Cable Products................ 0.3 Enterprise Software/Service.......... 0.3 Metal-Diversified.................... 0.3 Financial Guarantee Insurance........ 0.3 Chemicals-Plastics................... 0.3 Real Estate Operations & Development. 0.3 Chemicals-Specialty.................. 0.3 Industrial Gases..................... 0.3 Containers-Paper/Plastic............. 0.3 Cruise Lines......................... 0.2 Building Products-Wood............... 0.2 Computers-Integrated Systems......... 0.2 Finance-Other Services............... 0.2 Firearms & Ammunition................ 0.2 Publishing-Periodicals............... 0.2 Airport Development/Maintenance...... 0.2 Retail-Drug Store.................... 0.2 Finance-Mortgage Loan/Banker......... 0.2 Broadcast Services/Program........... 0.2 Batteries/Battery Systems............ 0.2 Internet Content-Entertainment....... 0.2 Real Estate Management/Services...... 0.2 Metal-Copper......................... 0.2 Finance-Leasing Companies............ 0.2 Medical-Generic Drugs................ 0.2 Television........................... 0.2 Insurance-Reinsurance................ 0.2 Security Services.................... 0.2 Applications Software................ 0.2 Finance-Commercial................... 0.2 Multimedia........................... 0.2 Food-Meat Products................... 0.2 Marine Services...................... 0.2 Retail-Discount...................... 0.2 Energy-Alternate Sources............. 0.2 Beverages-Wine/Spirits............... 0.2 Networking Products.................. 0.2 Food-Wholesale/Distribution.......... 0.2 Footwear & Related Apparel........... 0.2 E-Commerce/Services.................. 0.2 Radio................................ 0.2 Telecommunication Equipment.......... 0.2 Computers-Memory Devices............. 0.2 Hotels/Motels........................ 0.2 Aerospace/Defense.................... 0.2 Metal-Aluminum....................... 0.2 Banks-Money Center................... 0.1 Municipal Bonds & Notes.............. 0.1 Machinery-General Industrial......... 0.1 Computer Software.................... 0.1 Pharmacy Services.................... 0.1 Retail-Appliances.................... 0.1 Hazardous Waste Disposal............. 0.1
18 SunAmerica Strategic Bond Fund PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited) (continued) Industry Allocation* (continued) Finance-Credit Card.......................... 0.1% Tools-Hand Held.............................. 0.1 Semiconductor Components-Integrated Circuits. 0.1 Beverages-Non-alcoholic...................... 0.1 Gas-Distribution............................. 0.1 Coatings/Paint............................... 0.1 SupraNational Banks.......................... 0.1 Petrochemicals............................... 0.1 Steel Pipe & Tube............................ 0.1 Home Furnishings............................. 0.1 Metal-Iron................................... 0.1 Agricultural Chemicals....................... 0.1 Advertising Agencies......................... 0.1 Oil Field Machinery & Equipment.............. 0.1 Gold Mining.................................. 0.1 Rubber/Plastic Products...................... 0.1 Building & Construction-Misc................. 0.1 Consumer Products-Misc....................... 0.1 Transport-Marine............................. 0.1 E-Commerce/Products.......................... 0.1 Auto/Truck Parts & Equipment-Original........ 0.1 Oil & Gas Drilling........................... 0.1 Electronic Measurement Instruments........... 0.1 Building Societies........................... 0.1 Data Processing/Management................... 0.1 Tennessee Valley Authority................... 0.1 Publishing-Newspapers........................ 0.1 Home Decoration Products..................... 0.1 Finance-Investment Banker/Broker............. 0.1 Sugar........................................ 0.1 Gas-Transportation........................... 0.1 Retail-Major Department Stores............... 0.1 Building Products-Cement..................... 0.1 Power Converter/Supply Equipment............. 0.1 Office Automation & Equipment................ 0.1 ----- 104.8% =====
Credit Quality+# Aaa........... 31.5% Aa............ 3.4 A............. 11.1 Baa........... 15.2 Ba............ 11.6 B............. 16.3 Caa........... 6.2 Not Rated@.... 4.7 ----- 100.0% =====
-------- *Calculated as a percentage of net assets +Source: Moody's #Calculated as a percentage of total debt issues, excluding short-term securities. @Represents debt issues that either have no rating, or the rating is unavailable from the data source. 19 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
Principal Value Security Description Amount** (Note 2) ASSET BACKED SECURITIES -- 2.1% Diversified Financial Services -- 2.1% American Express Credit Account Master Trust FRS Series 2014-1, Class A 0.89% due 12/15/2021..................... $130,000 $130,505 Avis Budget Rental Car Funding AESOP LLC Series 2013-1A, Class A 1.92% due 09/20/2019*.................... 450,000 449,886 BA Credit Card Trust Series 2015-A2, Class A 1.36% due 09/15/2020..................... 78,000 78,316 Capital One Multi-Asset Execution Trust Series 2016-A4, Class A4 1.33% due 06/15/2022..................... 145,000 144,791 Carmax Auto Owner Trust Series 2016-3, Class A4 1.60% due 01/18/2022..................... 150,000 150,786 Chase Issuance Trust FRS Series 2014-A5, Class A5 0.89% due 04/15/2021..................... 326,000 326,939 Chase Issuance Trust Series 2016-A2, Class A 1.37% due 06/15/2021..................... 200,000 200,585 Chase Mtg. Trust VRS Series 2016-2, Class M2 3.75% due 12/25/2045*(1)................. 266,277 275,653 Citigroup Commercial Mtg. Trust Series 2016-SMPL, Class A 2.23% due 09/10/2031(2)(3)............... 163,000 162,984 Commercial Mtg. Trust Series 2015-CR24, Class A2 3.02% due 08/10/2048(2).................. 65,325 68,389 Commercial Mtg. Trust VRS Series 2016-787S, Class A 3.55% due 02/10/2036*(2)................. 329,000 353,898 Commercial Mtg. Trust VRS Series 2016-787S, Class B 3.96% due 02/10/2036*(2)................. 132,000 142,352 Core Industrial Trust Series 2015-CALW, Class A 3.04% due 02/10/2034*(2)................. 685,000 721,110 CSAIL Commercial Mtg. Trust Series 2015-C1, Class A2 2.97% due 04/15/2050(2).................. 39,000 40,476 Discover Card Execution Note Trust Series 2015-A4, Class A4 2.19% due 04/17/2023..................... 117,000 120,335 Ford Credit Auto Owner Trust Series 2014-C, Class B 1.97% due 04/15/2020..................... 76,000 76,596 Ford Credit Auto Owner Trust Series 2015-2, Class A 2.44% due 01/15/2027*.................... 50,000 51,342 GS Mtg. Securities Corp. II Series GC30, Class A2 2.73% due 05/10/2050(2).................. 73,125 75,458 GS Mtg. Securities Trust Series 2015-GC28, Class A2 2.90% due 02/10/2048(2).................. 102,000 105,402
Principal Value Security Description Amount** (Note 2) Diversified Financial Services (continued) Honda Auto Receivables Owner Trust Series 2016-2, Class A4 1.62% due 08/15/2022....................... $ 104,000 $ 104,782 Hudson Yards Mtg. Trust Series 2016-10HY, Class A 2.84% due 08/10/2038*(2)................... 1,830,000 1,858,757 JPMDB Commercial Mtg Securities Trust Series 2016-C2, Class A2 2.66% due 06/15/2049(2).................... 990,000 1,026,898 Morgan Stanley Capital Barclays Bank Trust Series 2016-MART, Class A 2.20% due 09/13/2031*(2)(3)................ 185,000 184,999 NRP Mtg. Trust VRS Series 2013-1, Class A1 3.25% due 07/25/2043*(1)................... 131,869 132,453 Palisades Center Trust Series 2016-PLSD, Class A 2.71% due 04/13/2033*(2)................... 843,000 859,703 Santander Drive Auto Receivables Trust Series 2014-5, Class C 2.46% due 06/15/2020....................... 26,000 26,289 Synchrony Credit Card Master Note Trust Series 2016-2, Class A 2.21% due 05/15/2024....................... 100,000 101,976 Taco Bell Funding LLC Series 2016-1A, Class A2I 3.83% due 05/25/2046*...................... 81,000 82,138 Taco Bell Funding LLC Series 2016-1A, Class A2II 4.38% due 05/25/2046*...................... 81,000 83,935 ---------- Total Asset Backed Securities (cost $8,083,902).......................... 8,137,733 ---------- U.S. CORPORATE BONDS & NOTES -- 40.7% Advertising Agencies -- 0.1% Interpublic Group of Cos., Inc. Senior Notes 4.20% due 04/15/2024....................... 176,000 189,005 Omnicom Group, Inc. Company Guar. Notes 3.60% due 04/15/2026....................... 195,000 206,092 ---------- 395,097 ---------- Aerospace/Defense -- 0.1% Boeing Co. Senior Notes 2.20% due 10/30/2022....................... 193,000 196,160 General Dynamics Corp. Company Guar. Notes 2.13% due 08/15/2026....................... 158,000 155,463 ---------- 351,623 ---------- Aerospace/Defense-Equipment -- 0.4% Harris Corp. Senior Notes 4.85% due 04/27/2035....................... 245,000 269,126 Harris Corp. Senior Notes 5.05% due 04/27/2045....................... 232,000 265,702
20 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Aerospace/Defense-Equipment (continued) Moog, Inc. Company Guar. Notes 5.25% due 12/01/2022*................. $578,000 $ 597,507 Spirit AeroSystems, Inc. Company Guar. Notes 3.85% due 06/15/2026.................. 36,000 37,388 Triumph Group, Inc. Company Guar. Notes 5.25% due 06/01/2022.................. 503,000 474,078 ---------- 1,643,801 ---------- Agricultural Operations -- 0.0% Archer-Daniels-Midland Co. Senior Notes 2.50% due 08/11/2026.................. 144,000 144,363 ---------- Airlines -- 0.4% Atlas Air, Inc. Pass-Through Certs. Series 1999-1, Class B 7.63% due 01/02/2018(3)............... 29,568 29,674 Atlas Air, Inc. Pass-Through Certs. Series 2000-1, Class B 9.06% due 01/02/2018(3)............... 226,917 231,228 United Airlines Pass-Through Trust Pass-Through Certs. Series 2014-2, Class B 4.63% due 03/03/2024.................. 678,170 688,343 United Airlines Pass-Through Trust Pass-Through Certs. Series 2013-1, Class B 5.38% due 02/15/2023.................. 449,602 467,586 ---------- 1,416,831 ---------- Appliances -- 0.0% Whirlpool Corp. Senior Notes 4.50% due 06/01/2046.................. 137,000 147,829 ---------- Applications Software -- 0.2% Microsoft Corp. Senior Notes 1.30% due 11/03/2018.................. 208,000 209,015 Microsoft Corp. Senior Notes 2.40% due 08/08/2026.................. 216,000 216,183 Microsoft Corp. Senior Notes 3.45% due 08/08/2036.................. 224,000 228,183 Microsoft Corp. Senior Notes 3.70% due 08/08/2046.................. 88,000 89,072 ---------- 742,453 ---------- Auto-Cars/Light Trucks -- 0.8% American Honda Finance Corp. Senior Notes 1.20% due 07/14/2017.................. 440,000 439,616
Principal Value Security Description Amount** (Note 2) Auto-Cars/Light Trucks (continued) American Honda Finance Corp. Senior Notes 1.20% due 07/12/2019.............. $ 288,000 $ 286,313 BMW US Capital LLC Company Guar. Notes 1.50% due 04/11/2019*............. 210,000 210,330 Daimler Finance North America LLC Company Guar. Notes 2.00% due 07/06/2021*............. 78,000 78,130 Daimler Finance North America LLC Company Guar. Notes 2.45% due 05/18/2020*............. 427,000 436,014 Ford Motor Credit Co. LLC Senior Notes 2.02% due 05/03/2019.............. 129,000 129,251 Ford Motor Credit Co. LLC Senior Notes 3.10% due 05/04/2023.............. 328,000 330,334 Hyundai Capital America Senior Notes 2.40% due 10/30/2018*............. 500,000 506,945 Toyota Motor Credit Corp. Senior Notes 1.00% due 09/27/2022.............. GBP 400,000 518,627 Toyota Motor Credit Corp. Senior Notes 2.00% due 10/24/2018.............. 163,000 165,385 ---------- 3,100,945 ---------- Auto-Heavy Duty Trucks -- 0.4% JB Poindexter & Co., Inc. Senior Notes 9.00% due 04/01/2022*............. 1,325,000 1,402,844 PACCAR Financial Corp. Senior Notes 1.65% due 02/25/2019.............. 68,000 68,684 ---------- 1,471,528 ---------- Auto/Truck Parts & Equipment-Replacement -- 0.0% Allison Transmission, Inc. Company Guar. Notes 5.00% due 10/01/2024*............. 120,000 123,000 ---------- Banks-Commercial -- 0.8% BankUnited, Inc. Senior Notes 4.88% due 11/17/2025.............. 485,000 501,421 Discover Bank Senior Notes 3.45% due 07/27/2026.............. 250,000 251,460 Fifth Third Bank Senior Notes 1.63% due 09/27/2019.............. 207,000 206,882 Fifth Third Bank Senior Notes 2.30% due 03/15/2019.............. 4,000 4,071 First Horizon National Corp. Senior Notes 3.50% due 12/15/2020.............. 609,000 621,578
21 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Banks-Commercial (continued) First Tennessee Bank NA Senior Notes 2.95% due 12/01/2019.................. $ 445,000 $ 450,987 Regions Financial Corp. Senior Notes 3.20% due 02/08/2021.................. 226,000 234,940 Regions Financial Corp. Sub. Notes 7.38% due 12/10/2037.................. 521,000 666,270 ---------- 2,937,609 ---------- Banks-Fiduciary -- 0.2% Citizens Financial Group, Inc. Sub. Notes 4.15% due 09/28/2022*................. 775,000 802,214 ---------- Banks-Super Regional -- 0.3% Capital One Financial Corp. Sub. Notes 3.75% due 07/28/2026.................. 110,000 110,390 JPMorgan Chase Bank NA Senior Notes 1.65% due 09/23/2019.................. 399,000 400,258 Wells Fargo & Co Senior Notes 1.50% due 09/12/2022.................. EUR 400,000 477,437 Wells Fargo & Co. Sub. Notes 4.30% due 07/22/2027.................. 205,000 220,936 Wells Fargo & Co. Sub. Notes 4.40% due 06/14/2046.................. 35,000 35,632 Wells Fargo & Co. Sub. Notes 4.90% due 11/17/2045.................. 46,000 50,647 ---------- 1,295,300 ---------- Batteries/Battery Systems -- 0.2% EnerSys Company Guar. Notes 5.00% due 04/30/2023*................. 876,000 874,905 ---------- Brewery -- 0.2% Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 1.90% due 02/01/2019.................. 155,000 156,496 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 2.65% due 02/01/2021.................. 291,000 300,282 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 3.30% due 02/01/2023.................. 128,000 135,105 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 4.70% due 02/01/2036.................. 216,000 248,351 Anheuser-Busch InBev Finance, Inc. Company Guar. Notes 4.90% due 02/01/2046.................. 96,000 114,219 ---------- 954,453 ----------
Principal Value Security Description Amount** (Note 2) Broadcast Services/Program -- 0.2% Clear Channel Worldwide Holdings, Inc. Company Guar. Notes Series A 6.50% due 11/15/2022................... $873,000 $879,548 -------- Building & Construction-Misc. -- 0.1% Weekley Homes LLC/Weekley Finance Corp. Senior Notes 6.00% due 02/01/2023................... 384,000 341,760 -------- Building Products-Wood -- 0.2% Boise Cascade Co. Company Guar. Notes 5.63% due 09/01/2024*.................. 580,000 588,700 Masco Corp. Senior Notes 4.45% due 04/01/2025................... 333,000 353,813 -------- 942,513 -------- Building-Residential/Commercial -- 0.1% K. Hovnanian Enterprises, Inc. Senior Sec. Notes 7.25% due 10/15/2020*.................. 631,000 555,280 -------- Cable/Satellite TV -- 1.1% Block Communications, Inc. Senior Notes 7.25% due 02/01/2020*.................. 542,000 555,550 Cable One, Inc. Company Guar. Notes 5.75% due 06/15/2022*.................. 688,000 718,960 CCO Holdings LLC/CCO Holdings Capital Corp. Senior Notes 5.75% due 02/15/2026*.................. 232,000 245,920 CCO Holdings LLC/CCO Holdings Capital Corp. Senior Notes 5.88% due 04/01/2024*.................. 290,000 309,401 Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 3.58% due 07/23/2020*.................. 168,000 175,593 Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 6.38% due 10/23/2035*.................. 133,000 156,645 Charter Communications Operating LLC/Charter Communications Operating Capital Senior Sec. Notes 6.48% due 10/23/2045*.................. 81,000 97,955 Comcast Corp. Company Guar. Notes 2.35% due 01/15/2027................... 144,000 142,083
22 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Cable/Satellite TV (continued) Comcast Corp. Company Guar. Notes 3.20% due 07/15/2036.................. $ 149,000 $ 145,737 Comcast Corp. Company Guar. Notes 3.40% due 07/15/2046.................. 149,000 144,843 Comcast Corp. Company Guar. Notes 5.50% due 11/23/2029.................. GBP 135,000 247,657 CSC Holdings LLC Company Guar. Notes 5.50% due 04/15/2027*................. 585,000 598,163 DISH DBS Corp. Company Guar. Notes 7.75% due 07/01/2026*................. 800,000 850,000 ---------- 4,388,507 ---------- Casino Hotels -- 0.4% Caesars Entertainment Resort Properties LLC Sec. Notes 11.00% due 10/01/2021................. 381,000 408,622 Downstream Development Authority of the Quapaw Tribe of Oklahoma Senior Sec. Notes 10.50% due 07/01/2019*................ 640,000 646,400 Golden Nugget Escrow, Inc. Senior Notes 8.50% due 12/01/2021*................. 547,000 574,350 ---------- 1,629,372 ---------- Cellular Telecom -- 1.1% Sprint Communications, Inc. Senior Notes 7.00% due 08/15/2020.................. 475,000 477,375 Sprint Communications, Inc. Company Guar. Notes 9.00% due 11/15/2018*................. 515,000 568,431 Sprint Corp. Company Guar. Notes 7.25% due 09/15/2021.................. 2,547,000 2,556,551 T-Mobile USA, Inc. Company Guar. Notes 6.54% due 04/28/2020.................. 737,000 761,874 ---------- 4,364,231 ---------- Chemicals-Diversified -- 0.1% Eastman Chemical Co. Senior Notes 1.50% due 05/26/2023.................. EUR 180,000 214,553 Westlake Chemical Corp. Company Guar. Notes 3.60% due 08/15/2026*................. 176,000 176,499 Westlake Chemical Corp. Company Guar. Notes 5.00% due 08/15/2046*................. 172,000 172,701 ---------- 563,753 ----------
Principal Value Security Description Amount** (Note 2) Chemicals-Plastics -- 0.2% A. Schulman, Inc. Company Guar. Notes 6.88% due 06/01/2023*.............. $ 573,000 $ 578,730 ---------- Chemicals-Specialty -- 0.3% Cabot Corp. Senior Notes 3.40% due 09/15/2026............... 42,000 42,223 Lubrizol Corp. Company Guar. Notes 6.50% due 10/01/2034............... 176,000 239,260 Unifrax I LLC/Unifrax Holding Co. Company Guar. Notes 7.50% due 02/15/2019*.............. 760,000 710,600 ---------- 992,083 ---------- Coal -- 0.3% SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. Company Guar. Notes 7.38% due 02/01/2020............... 1,131,000 1,057,485 ---------- Coatings/Paint -- 0.1% RPM International, Inc. Senior Notes 5.25% due 06/01/2045............... 425,000 445,820 ---------- Commercial Services-Finance -- 0.0% Automatic Data Processing, Inc. Senior Notes 2.25% due 09/15/2020............... 124,000 127,886 ---------- Computer Services -- 0.6% Harland Clarke Holdings Corp. Senior Sec. Notes 6.88% due 03/01/2020*.............. 590,000 563,450 Harland Clarke Holdings Corp. Senior Notes 9.25% due 03/01/2021*.............. 680,000 578,000 Hewlett Packard Enterprise Co. Senior Notes 6.20% due 10/15/2035*.............. 428,000 446,024 Leidos Holdings, Inc. Company Guar. Notes 4.45% due 12/01/2020............... 650,000 675,805 ---------- 2,263,279 ---------- Computer Software -- 0.1% Rackspace Hosting, Inc. Company Guar. Notes 6.50% due 01/15/2024*.............. 520,000 570,700 ---------- Computers -- 0.8% Apple, Inc. Senior Notes 2.45% due 08/04/2026............... 166,000 166,162 Apple, Inc. Senior Notes 2.85% due 05/06/2021............... 253,000 266,620
23 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Computers (continued) Apple, Inc. Senior Notes 2.85% due 02/23/2023.................. $ 239,000 $ 251,598 Apple, Inc. Senior Notes 3.85% due 08/04/2046.................. 121,000 123,754 Apple, Inc. Senior Notes 4.50% due 02/23/2036.................. 98,000 111,905 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 6.02% due 06/15/2026*................. 1,344,000 1,473,431 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Company Guar. Notes 7.13% due 06/15/2024*................. 49,000 53,893 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 8.10% due 07/15/2036*................. 266,000 312,694 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 8.35% due 07/15/2046*................. 178,000 213,129 ---------- 2,973,186 ---------- Computers-Integrated Systems -- 0.2% Diebold, Inc. Company Guar. Notes 8.50% due 04/15/2024*................. 897,000 929,516 ---------- Computers-Memory Devices -- 0.2% Western Digital Corp. Company Guar. Notes 10.50% due 04/01/2024*................ 497,000 576,520 ---------- Consumer Products-Misc. -- 0.0% Kimberly-Clark Corp. Senior Notes 1.85% due 03/01/2020.................. 97,000 98,515 ---------- Containers-Metal/Glass -- 0.3% Crown Cork & Seal Co., Inc. Company Guar. Notes 7.38% due 12/15/2026.................. 642,000 718,238 Owens-Brockway Glass Container, Inc. Company Guar. Notes 5.38% due 01/15/2025*................. 565,000 587,600 ---------- 1,305,838 ---------- Containers-Paper/Plastic -- 0.3% Amcor Finance USA, Inc. Company Guar. Notes 3.63% due 04/28/2026*................. 268,000 276,703 Brambles USA, Inc. Company Guar. Notes 4.13% due 10/23/2025*................. 101,000 107,507
Principal Value Security Description Amount** (Note 2) Containers-Paper/Plastic (continued) Multi-Color Corp. Company Guar. Notes 6.13% due 12/01/2022*........................ $ 546,000 $573,300 -------- 957,510 -------- Data Processing/Management -- 0.1% Fidelity National Information Services, Inc. Senior Notes 4.50% due 08/15/2046......................... 110,000 110,025 Fidelity National Information Services, Inc. Senior Notes 5.00% due 10/15/2025......................... 124,000 141,405 -------- 251,430 -------- Diagnostic Equipment -- 0.0% Danaher Corp. Senior Notes 4.38% due 09/15/2045......................... 39,000 46,083 -------- Distribution/Wholesale -- 0.0% WW Grainger, Inc. Senior Notes 3.75% due 05/15/2046......................... 108,000 111,596 -------- Diversified Banking Institutions -- 2.7% Bank of America Corp. Senior Notes 2.50% due 07/27/2020......................... EUR 450,000 550,286 Bank of America Corp. Senior Notes 2.63% due 10/19/2020......................... 150,000 153,074 Bank of America Corp. Sub. Notes 3.95% due 04/21/2025......................... 143,000 148,034 Bank of America Corp. Sub. Notes 4.25% due 10/22/2026......................... 534,000 566,541 Bank of America Corp. Sub. Notes 7.25% due 10/15/2025......................... 83,000 100,696 Citigroup, Inc. Sub. Notes 3.88% due 03/26/2025......................... 6,000 6,192 Citigroup, Inc. Sub. Notes 4.40% due 06/10/2025......................... 518,000 548,454 Citigroup, Inc. Sub. Notes 4.45% due 09/29/2027......................... 573,000 599,629 Citigroup, Inc. Sub. Notes 6.00% due 10/31/2033......................... 142,000 166,164 Deutsche Bank AG VRS Sub. Notes 7.50% due 04/30/2025......................... 600,000 490,500 Goldman Sachs Group, Inc. Senior Notes 2.13% due 09/30/2024......................... EUR 400,000 487,102
24 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Diversified Banking Institutions (continued) Goldman Sachs Group, Inc. Senior Notes 2.35% due 11/15/2021...................... $ 263,000 $262,390 Goldman Sachs Group, Inc. Senior Notes 2.63% due 08/19/2020...................... EUR 275,000 336,372 Goldman Sachs Group, Inc. Senior Notes 3.63% due 01/22/2023...................... 129,000 136,294 Goldman Sachs Group, Inc. Sub. Notes 4.25% due 10/21/2025...................... 189,000 198,903 Goldman Sachs Group, Inc. Senior Notes 4.75% due 10/21/2045...................... 90,000 101,003 Goldman Sachs Group, Inc. Sub. Notes 5.15% due 05/22/2045...................... 30,000 32,715 Goldman Sachs Group, Inc. Senior Notes 6.13% due 02/15/2033...................... 447,000 563,258 Goldman Sachs Group, Inc. Sub. Notes 6.75% due 10/01/2037...................... 226,000 287,768 JPMorgan Chase & Co. Senior Notes 2.30% due 08/15/2021...................... 150,000 150,326 JPMorgan Chase & Co. Senior Notes 2.63% due 04/23/2021...................... EUR 400,000 499,190 JPMorgan Chase & Co. Senior Notes 2.70% due 05/18/2023...................... 252,000 254,600 JPMorgan Chase & Co. Senior Notes 2.75% due 06/23/2020...................... 312,000 321,065 JPMorgan Chase & Co. Sub. Notes 4.13% due 12/15/2026...................... 365,000 389,458 JPMorgan Chase & Co. Sub. Notes 4.95% due 06/01/2045...................... 21,000 23,523 Morgan Stanley Senior Notes 1.75% due 03/11/2024...................... EUR 350,000 416,754 Morgan Stanley Senior Notes 2.13% due 04/25/2018...................... 283,000 285,379 Morgan Stanley Senior Notes 2.38% due 03/31/2021...................... EUR 350,000 429,372 Morgan Stanley Senior Notes 2.80% due 06/16/2020...................... 151,000 154,906
Principal Value Security Description Amount** (Note 2) Diversified Banking Institutions (continued) Morgan Stanley Sub. Notes 4.10% due 05/22/2023...................... $ 548,000 $ 579,379 Morgan Stanley Sub. Notes 5.00% due 11/24/2025...................... 568,000 633,718 Morgan Stanley Senior Notes 6.50% due 12/28/2018...................... EUR 300,000 385,646 ----------- 10,258,691 ----------- Diversified Financial Services -- 0.1% USAA Capital Corp. Senior Notes 2.13% due 06/03/2019*..................... 270,000 275,262 ----------- Diversified Manufacturing Operations -- 0.3% General Electric Co. Senior Notes 2.70% due 10/09/2022...................... 307,000 319,899 Ingersoll-Rand Global Holding Co., Ltd. Company Guar. Notes 5.75% due 06/15/2043...................... 403,000 504,318 Textron, Inc. Senior Notes 4.00% due 03/15/2026...................... 208,000 218,097 Trinity Industries, Inc. Company Guar. Notes 4.55% due 10/01/2024...................... 243,000 241,658 ----------- 1,283,972 ----------- Electric Products-Misc. -- 0.0% WESCO Distribution, Inc. Company Guar. Notes 5.38% due 06/15/2024*..................... 150,000 150,375 ----------- Electric-Distribution -- 0.1% Entergy Louisiana LLC 1st Mtg. Notes 4.95% due 01/15/2045...................... 481,000 512,117 ----------- Electric-Integrated -- 1.5% AES Corp. Senior Notes 5.50% due 03/15/2024...................... 870,000 905,339 Arizona Public Service Co. Senior Notes 2.20% due 01/15/2020...................... 161,000 164,764 Dominion Resources, Inc. Junior Sub. Notes 2.96% due 07/01/2019...................... 88,000 90,324 Dominion Resources, Inc. Senior Notes 5.25% due 08/01/2033...................... 536,000 606,583 Duke Energy Corp. Senior Notes 3.75% due 09/01/2046...................... 158,000 153,224
25 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Electric-Integrated (continued) Duke Energy Progress LLC 1st Mtg. Notes 2.80% due 05/15/2022....................... $ 207,000 $ 217,629 Entergy Arkansas, Inc. 1st Mtg. Notes 4.95% due 12/15/2044....................... 255,000 270,647 Exelon Generation Co. LLC Senior Notes 2.95% due 01/15/2020....................... 219,000 225,720 FirstEnergy Corp. Senior Notes 7.38% due 11/15/2031....................... 324,000 420,944 Louisville Gas & Electric Co. 1st Mtg. Notes 4.38% due 10/01/2045....................... 29,000 33,239 Massachusetts Electric Co. Notes 4.00% due 08/15/2046*...................... 456,000 474,202 Mirant Mid Atlantic LLC Pass Through Trust Pass-Through Certs. Class B 9.13% due 06/30/2017....................... 126,600 104,445 Mirant Mid Atlantic LLC Pass Through Trust Pass-Through Certs. Class C 10.06% due 12/30/2028...................... 1,051,264 804,217 South Carolina Electric & Gas Co. 1st Mtg. Notes 5.10% due 06/01/2065....................... 148,000 173,455 Southern California Edison Co. 1st Mtg. Notes 1.13% due 05/01/2017....................... 446,000 445,936 Talen Energy Supply LLC Senior Notes 4.63% due 07/15/2019*...................... 750,000 705,000 Trans-Allegheny Interstate Line Co. Senior Notes 3.85% due 06/01/2025*...................... 105,000 111,948 ---------- 5,907,616 ---------- Electronic Components-Misc. -- 0.0% Corning, Inc. Senior Notes 1.50% due 05/08/2018....................... 163,000 162,552 ---------- Electronic Components-Semiconductors -- 0.2% Amkor Technology, Inc. Senior Notes 6.38% due 10/01/2022....................... 352,000 363,440 Intel Corp. Senior Notes 1.35% due 12/15/2017....................... 353,000 354,102 ---------- 717,542 ----------
Principal Value Security Description Amount** (Note 2) Electronic Measurement Instruments -- 0.1% FLIR Systems, Inc. Senior Notes 3.13% due 06/15/2021....................... $ 133,000 $ 137,273 Fortive Corp. Company Guar. Notes 4.30% due 06/15/2046*...................... 123,000 131,636 ---------- 268,909 ---------- Electronic Parts Distribution -- 0.0% Avnet, Inc. Senior Notes 4.63% due 04/15/2026....................... 109,000 112,847 ---------- Energy-Alternate Sources -- 0.2% TerraForm Power Operating LLC Company Guar. Notes 9.38% due 02/01/2023*...................... 650,000 667,875 ---------- Enterprise Software/Service -- 0.3% Donnelley Financial Solutions, Inc. Senior Notes 8.25% due 10/15/2024*...................... 286,000 289,575 Oracle Corp. Senior Notes 1.90% due 09/15/2021....................... 289,000 289,733 Oracle Corp. Senior Notes 2.65% due 07/15/2026....................... 152,000 152,028 Oracle Corp. Senior Notes 3.85% due 07/15/2036....................... 227,000 235,707 Oracle Corp. Senior Notes 3.90% due 05/15/2035....................... 67,000 69,267 ---------- 1,036,310 ---------- Finance-Auto Loans -- 0.7% Ally Financial, Inc. Sub. Notes 5.75% due 11/20/2025....................... 1,371,000 1,434,409 Credit Acceptance Corp. Company Guar. Notes 7.38% due 03/15/2023....................... 1,165,000 1,205,775 ---------- 2,640,184 ---------- Finance-Commercial -- 0.2% Jefferies Finance LLC/JFIN Co-Issuer Corp. Senior Notes 6.88% due 04/15/2022*...................... 259,000 240,870 Jefferies Finance LLC/JFIN Co-Issuer Corp. Senior Notes 7.38% due 04/01/2020*...................... 498,000 485,550 ---------- 726,420 ---------- Finance-Consumer Loans -- 0.7% Enova International, Inc. Company Guar. Notes 9.75% due 06/01/2021....................... 1,422,000 1,272,690
26 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Finance-Consumer Loans (continued) Navient Corp. Senior Notes 5.63% due 08/01/2033............................... $ 611,000 $ 485,745 OneMain Financial Holdings LLC Company Guar. Notes 6.75% due 12/15/2019*.............................. 916,000 962,945 ---------- 2,721,380 ---------- Finance-Credit Card -- 0.1% American Express Credit Corp. Senior Notes 2.25% due 05/05/2021............................... 296,000 300,540 Discover Financial Services Senior Notes 3.75% due 03/04/2025............................... 240,000 242,873 ---------- 543,413 ---------- Finance-Investment Banker/Broker -- 0.1% Lehman Brothers Holdings, Inc. Escrow Notes 6.75% due 12/28/2017+(3)(6)........................ 280,000 28 Lehman Brothers Holdings, Inc. Escrow Notes 7.50% due 05/11/2038+(3)(6)........................ 361,000 36 TD Ameritrade Holding Corp. Senior Notes 2.95% due 04/01/2022............................... 200,000 208,402 ---------- 208,466 ---------- Finance-Leasing Companies -- 0.1% International Lease Finance Corp. Senior Notes 5.88% due 08/15/2022............................... 191,000 211,771 ---------- Finance-Mortgage Loan/Banker -- 0.2% Quicken Loans, Inc. Company Guar. Notes 5.75% due 05/01/2025*.............................. 900,000 893,250 ---------- Finance-Other Services -- 0.1% National Rural Utilities Cooperative Finance Corp. Senior Notes 0.95% due 04/24/2017............................... 137,000 136,832 National Rural Utilities Cooperative Finance Corp. Collateral Trust Bonds 2.00% due 01/27/2020............................... 273,000 275,828 National Rural Utilities Cooperative Finance Corp. Collateral Trust Bonds 2.30% due 11/01/2020............................... 118,000 120,741 ---------- 533,401 ---------- Firearms & Ammunition -- 0.2% FGI Operating Co. LLC/FGI Finance, Inc. Sec. Notes 7.88% due 05/01/2020............................... 1,115,000 925,450 ----------
Principal Value Security Description Amount** (Note 2) Food-Misc./Diversified -- 0.3% General Mills, Inc. Senior Notes 2.10% due 11/16/2020................. EUR 275,000 $ 333,042 Kraft Heinz Foods Co. Company Guar. Notes 2.25% due 05/25/2028................. EUR500,000 609,267 Kraft Heinz Foods Co. Sec. Notes 4.88% due 02/15/2025*................ 286,000 315,396 ---------- 1,257,705 ---------- Food-Retail -- 0.3% Albertsons Cos. LLC/Safeway, Inc. Senior Notes 5.75% due 03/15/2025*................ 350,000 349,125 Albertsons Cos. LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC Senior Notes 6.63% due 06/15/2024*................ 416,000 432,640 Kroger Co. Senior Notes 2.65% due 10/15/2026................. 238,000 236,222 Kroger Co. Senior Notes 3.88% due 10/15/2046................. 107,000 107,672 ---------- 1,125,659 ---------- Food-Wholesale/Distribution -- 0.2% C&S Group Enterprises LLC Senior Sec. Notes 5.38% due 07/15/2022*................ 631,000 621,535 ---------- Footwear & Related Apparel -- 0.2% Wolverine World Wide, Inc. Company Guar. Notes 5.00% due 09/01/2026*................ 585,000 590,850 ---------- Gambling (Non-Hotel) -- 0.4% Mohegan Tribal Gaming Authority Company Guar. Notes 7.88% due 10/15/2024*................ 570,000 568,575 Scientific Games International, Inc. Company Guar. Notes 10.00% due 12/01/2022................ 1,220,000 1,125,450 Waterford Gaming LLC/Waterford Gaming Financial Corp. Escrow Notes 8.63% due 09/15/2014*+(3)(6)......... 478,062 5,880 ---------- 1,699,905 ---------- Gas-Distribution -- 0.1% Dominion Gas Holdings LLC Senior Notes 4.80% due 11/01/2043................. 179,000 198,062 ----------
27 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Hazardous Waste Disposal -- 0.1% Clean Harbors, Inc. Company Guar. Notes 5.13% due 06/01/2021.................. $ 543,000 $ 556,575 ---------- Home Decoration Products -- 0.1% Newell Rubbermaid, Inc. Senior Notes 4.20% due 04/01/2026.................. 113,000 123,069 Newell Rubbermaid, Inc. Senior Notes 5.38% due 04/01/2036.................. 82,000 96,240 ---------- 219,309 ---------- Home Furnishings -- 0.1% Tempur Sealy International, Inc. Company Guar. Notes 5.50% due 06/15/2026*................. 400,000 412,000 ---------- Hotels/Motels -- 0.2% Interval Acquisition Corp. Company Guar. Notes 5.63% due 04/15/2023.................. 557,000 575,103 ---------- Independent Power Producers -- 0.4% Dynegy, Inc. Company Guar. Notes 7.38% due 11/01/2022.................. 785,000 775,188 NRG Energy, Inc. Company Guar. Notes 6.25% due 07/15/2022.................. 692,000 702,380 ---------- 1,477,568 ---------- Industrial Gases -- 0.3% Air Products & Chemicals, Inc. Senior Notes 0.38% due 06/01/2021.................. EUR 300,000 341,417 Airgas, Inc. Company Guar. Notes 3.05% due 08/01/2020.................. 81,000 84,060 Praxair, Inc. Senior Notes 1.20% due 02/12/2024.................. EUR 320,000 380,702 Praxair, Inc. Senior Notes 1.50% due 03/11/2020.................. EUR 150,000 177,167 ---------- 983,346 ---------- Insurance-Life/Health -- 0.3% Aflac, Inc. Senior Notes 4.00% due 10/15/2046.................. 142,000 143,410 Jackson National Life Global Funding Sec. Notes 3.05% due 04/29/2026*................. 365,000 370,999 Pacific LifeCorp Senior Notes 6.00% due 02/10/2020*................. 210,000 232,991
Principal Value Security Description Amount** (Note 2) Insurance-Life/Health (continued) Pricoa Global Funding I Senior Sec. Notes 1.35% due 08/18/2017*................... $344,000 $ 343,954 Principal Life Global Funding II Senior Sec. Notes 3.00% due 04/18/2026*................... 93,000 94,519 Unum Group Senior Notes 5.75% due 08/15/2042.................... 90,000 101,801 ---------- 1,287,674 ---------- Insurance-Multi-line -- 0.3% Assurant, Inc. Senior Notes 6.75% due 02/15/2034.................... 591,000 744,345 MetLife, Inc. Senior Notes 4.60% due 05/13/2046.................... 134,000 145,007 Old Republic International Corp. Senior Notes 3.88% due 08/26/2026.................... 70,000 69,877 ---------- 959,229 ---------- Insurance-Mutual -- 0.4% Massachusetts Mutual Life Insurance Co. Sub. Notes 4.50% due 04/15/2065*................... 172,000 169,114 MassMutual Global Funding II Senior Sec. Notes 2.10% due 08/02/2018*................... 872,000 885,469 MassMutual Global Funding II Senior Sec. Notes 2.50% due 10/17/2022*................... 145,000 147,444 New York Life Global Funding Sec. Notes 2.10% due 01/02/2019*................... 199,000 202,270 ---------- 1,404,297 ---------- Insurance-Reinsurance -- 0.1% Berkshire Hathaway, Inc. Senior Notes 1.15% due 08/15/2018.................... 196,000 195,894 ---------- Internet Connectivity Services -- 0.3% Cogent Communications Group, Inc. Senior Sec. Notes 5.38% due 03/01/2022*................... 564,000 580,920 Zayo Group LLC/Zayo Capital, Inc. Company Guar. Notes 6.38% due 05/15/2025.................... 545,000 577,700 ---------- 1,158,620 ---------- Internet Content-Entertainment -- 0.2% Netflix, Inc. Senior Notes 5.88% due 02/15/2025.................... 792,000 855,360 ----------
28 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Investment Management/Advisor Services -- 0.3% Drawbridge Special Opportunities Fund LP/Drawbridge Special Opportunities Finance Senior Notes 5.00% due 08/01/2021*................. $1,106,000 $1,063,004 ---------- Machinery-Farming -- 0.3% John Deere Capital Corp. Senior Notes 1.13% due 06/12/2017.................. 537,000 537,673 John Deere Capital Corp. Senior Notes 1.55% due 12/15/2017.................. 545,000 547,912 ---------- 1,085,585 ---------- Marine Services -- 0.2% Great Lakes Dredge & Dock Corp. Company Guar. Notes 7.38% due 02/01/2019.................. 699,000 685,020 ---------- Medical Labs & Testing Services -- 0.4% Laboratory Corp. of America Holdings Senior Notes 3.20% due 02/01/2022.................. 85,000 88,522 Laboratory Corp. of America Holdings Senior Notes 3.60% due 02/01/2025.................. 274,000 287,821 Laboratory Corp. of America Holdings Senior Notes 4.70% due 02/01/2045.................. 141,000 153,363 Quest Diagnostics, Inc. Senior Notes 3.45% due 06/01/2026.................. 155,000 161,510 Roche Holdings, Inc. Company Guar. Notes 1.35% due 09/29/2017*................. 700,000 702,277 ---------- 1,393,493 ---------- Medical Products -- 0.0% Baxter International, Inc. Senior Notes 2.60% due 08/15/2026.................. 153,000 151,233 ---------- Medical-Biomedical/Gene -- 0.3% Amgen, Inc. Senior Notes 1.25% due 02/25/2022.................. EUR 325,000 383,077 Amgen, Inc. Senior Notes 2.00% due 02/25/2026.................. EUR 100,000 125,143 Amgen, Inc. Senior Notes 4.40% due 05/01/2045.................. 101,000 106,093 Amgen, Inc. Senior Notes 5.50% due 12/07/2026.................. GBP 250,000 430,493 Gilead Sciences, Inc. Senior Notes 4.00% due 09/01/2036.................. 76,000 77,498 ---------- 1,122,304 ----------
Principal Value Security Description Amount** (Note 2) Medical-Drugs -- 0.4% Baxalta, Inc. Company Guar. Notes 3.60% due 06/23/2022.......................... $ 214,000 $ 224,826 Endo Finance LLC/Endo Finco, Inc. Company Guar. Notes 7.25% due 01/15/2022*......................... 675,000 648,000 Forest Laboratories LLC Company Guar. Notes 4.88% due 02/15/2021*......................... 346,000 384,221 Johnson & Johnson Senior Notes 1.65% due 05/20/2035.......................... EUR 180,000 228,737 ---------- 1,485,784 ---------- Medical-HMO -- 0.3% Opal Acquisition, Inc. Senior Notes 8.88% due 12/15/2021*......................... 702,000 575,640 UnitedHealth Group, Inc. Senior Notes 1.40% due 12/15/2017.......................... 281,000 281,816 UnitedHealth Group, Inc. Senior Notes 2.13% due 03/15/2021.......................... 205,000 208,812 UnitedHealth Group, Inc. Senior Notes 3.35% due 07/15/2022.......................... 150,000 161,072 ---------- 1,227,340 ---------- Medical-Hospitals -- 1.3% CHS/Community Health Systems, Inc. Company Guar. Notes 6.88% due 02/01/2022.......................... 825,000 709,500 HCA, Inc. Senior Sec. Notes 5.25% due 06/15/2026.......................... 444,000 471,750 HCA, Inc. Company Guar. Notes 7.50% due 11/15/2095.......................... 1,128,000 1,139,280 IASIS Healthcare LLC/IASIS Capital Corp. Company Guar. Notes 8.38% due 05/15/2019.................... 756,000 684,180 RegionalCare Hospital Partners Holdings, Inc. Senior Sec. Notes 8.25% due 05/01/2023*......................... 1,010,000 1,042,825 Tenet Healthcare Corp. Senior Sec. Notes 4.75% due 06/01/2020.......................... 354,000 359,310 Tenet Healthcare Corp. Senior Notes 6.88% due 11/15/2031.......................... 565,000 464,712 ---------- 4,871,557 ----------
29 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Metal Processors & Fabrication -- 0.3% Novelis Corp. Company Guar. Notes 5.88% due 09/30/2026*....................... $600,000 $ 614,250 Novelis Corp. Company Guar. Notes 6.25% due 08/15/2024*....................... 396,000 420,255 ---------- 1,034,505 ---------- Metal-Aluminum -- 0.1% Kaiser Aluminum Corp. Company Guar. Notes 5.88% due 05/15/2024........................ 318,000 332,310 ---------- Mining -- 0.0% Renco Metals, Inc. Escrow Notes 11.50% due 07/01/2003+(3)(6)................ 500,000 15,000 ---------- Multimedia -- 0.2% Time Warner, Inc. Company Guar. Notes 4.85% due 07/15/2045........................ 127,000 141,968 Viacom, Inc. Senior Notes 3.45% due 10/04/2026........................ 147,000 146,914 Viacom, Inc. Senior Notes 5.85% due 09/01/2043........................ 103,000 116,168 Walt Disney Co. Senior Notes 1.50% due 09/17/2018........................ 212,000 213,656 Walt Disney Co. Senior Notes 1.65% due 01/08/2019........................ 100,000 101,155 ---------- 719,861 ---------- Networking Products -- 0.2% Cisco Systems, Inc. Senior Notes 2.13% due 03/01/2019........................ 322,000 328,299 Cisco Systems, Inc. Senior Notes 2.20% due 02/28/2021........................ 228,000 233,285 Cisco Systems, Inc. Senior Notes 2.50% due 09/20/2026........................ 72,000 72,840 ---------- 634,424 ---------- Office Automation & Equipment -- 0.1% Pitney Bowes, Inc. Senior Notes 3.38% due 10/01/2021........................ 189,000 188,909 ---------- Oil Companies-Exploration & Production -- 2.0% Anadarko Petroleum Corp. Senior Notes 6.45% due 09/15/2036........................ 609,000 711,495
Principal Value Security Description Amount** (Note 2) Oil Companies-Exploration & Production (continued) Carrizo Oil & Gas, Inc. Company Guar. Notes 6.25% due 04/15/2023............................ $600,000 $ 594,000 Denbury Resources, Inc. Company Guar. Notes 5.50% due 05/01/2022............................ 484,000 347,270 Denbury Resources, Inc. Sec. Notes 9.00% due 05/15/2021*........................... 825,000 864,187 Hess Corp. Senior Notes 4.30% due 04/01/2027............................ 138,000 139,074 Hess Corp. Senior Notes 5.60% due 02/15/2041............................ 148,000 147,521 Hilcorp Energy I LP/Hilcorp Finance Co. Senior Notes 5.00% due 12/01/2024*........................... 685,000 655,888 Hilcorp Energy I LP/Hilcorp Finance Co. Senior Notes 5.75% due 10/01/2025*........................... 43,000 42,785 Laredo Petroleum, Inc. Company Guar. Notes 7.38% due 05/01/2022............................ 787,000 813,561 Newfield Exploration Co. Senior Notes 5.38% due 01/01/2026............................ 559,000 560,398 Noble Energy, Inc. Senior Notes 3.90% due 11/15/2024............................ 289,000 294,753 Noble Energy, Inc. Senior Notes 5.05% due 11/15/2044............................ 122,000 120,449 Occidental Petroleum Corp. Senior Notes 4.40% due 04/15/2046............................ 152,000 167,793 Rex Energy Corp. Sec. Notes 1.00% due 10/01/2020............................ 646,815 352,514 Sanchez Energy Corp. Company Guar. Notes 6.13% due 01/15/2023............................ 791,000 634,778 SM Energy Co. Senior Notes 5.63% due 06/01/2025............................ 506,000 475,640 SM Energy Co. Senior Notes 6.50% due 01/01/2023............................ 116,000 117,160 WPX Energy, Inc. Senior Notes 7.50% due 08/01/2020............................ 750,000 793,125 ---------- 7,832,391 ---------- Oil Companies-Integrated -- 0.2% Chevron Corp. Senior Notes 1.37% due 03/02/2018............................ 324,000 324,571
30 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Oil Companies-Integrated (continued) Chevron Corp. Senior Notes 1.96% due 03/03/2020.................. $178,000 $ 180,474 Exxon Mobil Corp. Senior Notes 1.31% due 03/06/2018.................. 199,000 199,602 ---------- 704,647 ---------- Oil Field Machinery & Equipment -- 0.1% Forum Energy Technologies, Inc. Company Guar. Notes 6.25% due 10/01/2021.................. 410,000 388,475 ---------- Oil Refining & Marketing -- 0.4% Calumet Specialty Products Partner LP/ Calumet Finance Corp. Company Guar. Notes 6.50% due 04/15/2021.................. 646,000 528,105 Cheniere Corpus Christi Holdings LLC Senior Sec. Notes 7.00% due 06/30/2024*................. 220,000 237,600 PBF Holding Co LLC/PBF Finance Corp. Senior Sec. Notes 7.00% due 11/15/2023*................. 700,000 659,750 Valero Energy Corp. Senior Notes 3.40% due 09/15/2026.................. 287,000 285,088 ---------- 1,710,543 ---------- Oil-Field Services -- 0.3% Bristow Group, Inc. Company Guar. Notes 6.25% due 10/15/2022.................. 825,000 604,313 SESI LLC Company Guar. Notes 7.13% due 12/15/2021.................. 548,000 535,670 ---------- 1,139,983 ---------- Paper & Related Products -- 0.7% Clearwater Paper Corp. Company Guar. Notes 4.50% due 02/01/2023.................. 219,000 219,274 Domtar Corp. Company Guar. Notes 6.75% due 02/15/2044.................. 222,000 248,697 Georgia-Pacific LLC Senior Notes 3.60% due 03/01/2025*................. 492,000 524,080 Georgia-Pacific LLC Senior Notes 3.73% due 07/15/2023*................. 672,000 719,413 Georgia-Pacific LLC Company Guar. Notes 5.40% due 11/01/2020*................. 275,000 310,975 International Paper Co. Senior Notes 4.40% due 08/15/2047.................. 101,000 102,138
Principal Value Security Description Amount** (Note 2) Paper & Related Products (continued) PH Glatfelter Co. Company Guar. Notes 5.38% due 10/15/2020........................... $620,000 $ 626,200 ---------- 2,750,777 ---------- Pharmacy Services -- 0.1% Express Scripts Holding Co. Company Guar. Notes 3.00% due 07/15/2023........................... 107,000 108,679 Express Scripts Holding Co. Company Guar. Notes 4.50% due 02/25/2026........................... 191,000 209,496 Express Scripts Holding Co. Company Guar. Notes 4.80% due 07/15/2046........................... 239,000 248,266 ---------- 566,441 ---------- Pipelines -- 2.4% Antero Midstream Partners LP/Antero Midstream Finance Corp. Company Guar. Notes 5.38% due 09/15/2024*.......................... 507,000 513,338 Colorado Interstate Gas Co. LLC/ Colorado Interstate Issuing Corp. Company Guar. Notes 4.15% due 08/15/2026*.......................... 157,000 155,653 Columbia Pipeline Group, Inc. Company Guar. Notes 2.45% due 06/01/2018........................... 59,000 59,351 Energy Transfer Equity LP Senior Sec. Notes 7.50% due 10/15/2020........................... 700,000 768,250 Energy Transfer Partners LP Senior Notes 4.90% due 03/15/2035........................... 115,000 106,152 Energy Transfer Partners LP Senior Notes 6.05% due 06/01/2041........................... 29,000 29,367 Energy Transfer Partners LP Senior Notes 6.63% due 10/15/2036........................... 366,000 398,491 EnLink Midstream Partners LP Senior Notes 4.40% due 04/01/2024........................... 84,000 82,026 EnLink Midstream Partners LP Senior Notes 4.85% due 07/15/2026........................... 189,000 190,186 Enterprise Products Operating LLC Company Guar. Notes 3.95% due 02/15/2027........................... 120,000 125,744 Enterprise Products Operating LLC Company Guar. Notes 4.85% due 03/15/2044........................... 77,000 80,022 Genesis Energy LP/Genesis Energy Finance Corp. Company Guar. Notes 5.63% due 06/15/2024........................... 465,000 455,700
31 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Pipelines (continued) Genesis Energy LP/Genesis Energy Finance Corp. Company Guar. Notes 6.00% due 05/15/2023........................... $ 532,000 $ 528,010 Holly Energy Partners LP/Holly Energy Finance Corp. Company Guar. Notes 6.00% due 08/01/2024*.......................... 672,000 695,520 Kinder Morgan Energy Partners LP Company Guar. Notes 3.45% due 02/15/2023........................... 224,000 223,296 Kinder Morgan Energy Partners LP Company Guar. Notes 4.70% due 11/01/2042........................... 159,000 146,673 Kinder Morgan Energy Partners LP Company Guar. Notes 5.63% due 09/01/2041........................... 74,000 73,403 Plains All American Pipeline LP/PAA Finance Corp. Senior Notes 3.60% due 11/01/2024........................... 90,000 87,206 Plains All American Pipeline LP/PAA Finance Corp. Senior Notes 3.85% due 10/15/2023........................... 108,000 107,427 Rose Rock Midstream LP/Rose Rock Finance Corp. Company Guar. Notes 5.63% due 07/15/2022........................... 656,000 603,520 Sabine Pass Liquefaction LLC Senior Sec. Notes 5.63% due 04/15/2023........................... 575,000 613,812 Sabine Pass Liquefaction LLC Senior Sec. Notes 5.88% due 06/30/2026*.......................... 180,000 195,638 Sabine Pass Liquefaction LLC Senior Sec. Notes 6.25% due 03/15/2022........................... 511,000 558,267 Summit Midstream Holdings LLC/Summit Midstream Finance Corp. Company Guar. Notes 5.50% due 08/15/2022........................... 592,000 563,880 Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp. Company Guar. Notes 5.50% due 09/15/2024*.......................... 580,000 584,350 Tesoro Logistics LP/Tesoro Logistics Finance Corp. Company Guar. Notes 6.13% due 10/15/2021........................... 1,116,000 1,166,220 Western Gas Partners LP Senior Notes 4.65% due 07/01/2026........................... 202,000 209,049 Williams Partners LP Senior Notes 3.90% due 01/15/2025........................... 72,000 71,850 ---------- 9,392,401 ----------
Principal Value Security Description Amount** (Note 2) Power Converter/Supply Equipment -- 0.1% Hubbell, Inc. Senior Notes 3.35% due 03/01/2026....................... $183,000 $192,033 -------- Printing-Commercial -- 0.2% Quad/Graphics, Inc. Company Guar. Notes 7.00% due 05/01/2022....................... 642,000 616,320 RR Donnelley & Sons Co. Senior Notes 7.00% due 02/15/2022....................... 43,000 44,613 -------- 660,933 -------- Publishing-Newspapers -- 0.1% Lee Enterprises, Inc. Senior Sec. Notes 9.50% due 03/15/2022*...................... 221,000 228,183 -------- Publishing-Periodicals -- 0.2% Emerald Expositions Holdings, Inc. Senior Notes 9.00% due 06/15/2021*...................... 887,000 921,371 -------- Radio -- 0.2% Sirius XM Radio, Inc. Company Guar. Notes 5.38% due 07/15/2026*...................... 565,000 580,538 -------- Real Estate Investment Trusts -- 0.7% American Tower Corp. Senior Notes 3.13% due 01/15/2027....................... 221,000 219,973 American Tower Corp. Senior Notes 3.38% due 10/15/2026....................... 156,000 158,124 AvalonBay Communities, Inc. Senior Notes 3.90% due 10/15/2046....................... 77,000 76,096 Columbia Property Trust Operating Partnership LP Company Guar. Notes 3.65% due 08/15/2026....................... 73,000 73,430 CTR Partnership LP/CareTrust Capital Corp. Company Guar. Notes 5.88% due 06/01/2021....................... 781,000 808,335 CubeSmart LP Company Guar. Notes 3.13% due 09/01/2026....................... 144,000 143,364 DuPont Fabros Technology LP Company Guar. Notes 5.63% due 06/15/2023....................... 442,000 465,205 ESH Hospitality, Inc. Company Guar. Notes 5.25% due 05/01/2025*...................... 570,000 569,287 Federal Realty Investment Trust Senior Notes 3.63% due 08/01/2046....................... 30,000 29,361 Kimco Realty Corp. Senior Notes 2.80% due 10/01/2026....................... 76,000 75,346
32 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Real Estate Investment Trusts (continued) Liberty Property LP Senior Notes 3.25% due 10/01/2026...................... $ 97,000 $ 97,742 ---------- 2,716,263 ---------- Real Estate Management/Services -- 0.2% Kennedy-Wilson, Inc. Company Guar. Notes 5.88% due 04/01/2024...................... 845,000 851,338 ---------- Real Estate Operations & Development -- 0.3% Greystar Real Estate Partners LLC Senior Sec. Notes 8.25% due 12/01/2022*..................... 941,000 997,460 ---------- Rental Auto/Equipment -- 0.4% Avis Budget Car Rental LLC/Avis Budget Finance, Inc. Company Guar. Notes 5.13% due 06/01/2022*..................... 138,000 138,431 Avis Budget Car Rental LLC/Avis Budget Finance, Inc. Company Guar. Notes 5.25% due 03/15/2025*..................... 349,000 335,040 Herc Rentals, Inc. Sec. Notes 7.50% due 06/01/2022*..................... 556,000 575,460 Hertz Corp. Company Guar. Notes 5.50% due 10/15/2024*..................... 593,000 590,776 ---------- 1,639,707 ---------- Retail-Appliances -- 0.1% Conn's, Inc. Company Guar. Notes 7.25% due 07/15/2022...................... 720,000 561,600 ---------- Retail-Building Products -- 0.0% Home Depot, Inc. Senior Notes 2.00% due 04/01/2021...................... 17,000 17,284 Home Depot, Inc. Senior Notes 3.50% due 09/15/2056...................... 104,000 101,633 ---------- 118,917 ---------- Retail-Discount -- 0.2% Costco Wholesale Corp. Senior Notes 2.25% due 02/15/2022...................... 344,000 353,960 Dollar General Corp. Senior Notes 3.25% due 04/15/2023...................... 204,000 210,613 Dollar General Corp. Senior Notes 4.15% due 11/01/2025...................... 102,000 111,009 ---------- 675,582 ----------
Principal Value Security Description Amount** (Note 2) Retail-Drug Store -- 0.2% CVS Health Corp. Senior Notes 2.88% due 06/01/2026................ $ 236,000 $ 239,497 CVS Pass-Through Trust Pass-Through Certs. 4.70% due 01/10/2036*............... 186,182 206,317 CVS Pass-Through Trust Pass-Through Certs. 5.77% due 01/10/2033*............... 150,831 175,380 CVS Pass-Through Trust Pass-Through Certs. 5.93% due 01/10/2034*............... 240,504 284,387 ---------- 905,581 ---------- Retail-Restaurants -- 0.5% Brinker International, Inc. Senior Notes 5.00% due 10/01/2024*............... 575,000 582,971 Landry's, Inc. Company Guar. Notes 9.38% due 05/01/2020*............... 563,000 590,503 McDonald's Corp. Senior Notes 4.70% due 12/09/2035................ 33,000 37,374 PF Chang's China Bistro, Inc. Company Guar. Notes 10.25% due 06/30/2020*.............. 609,000 573,982 ---------- 1,784,830 ---------- Rubber/Plastic Products -- 0.1% Gates Global LLC/Gates Global Co. Company Guar. Notes 6.00% due 07/15/2022*............... 375,000 356,250 Venture Holdings Co. LLC Company Guar. Notes 11.00% due 06/01/2007+(3)(6)(7)(14). 100,000 0 ---------- 356,250 ---------- Satellite Telecom -- 0.2% Hughes Satellite Systems Corp. Company Guar. Notes 7.63% due 06/15/2021................ 806,000 859,398 ---------- Savings & Loans/Thrifts -- 0.6% First Niagara Financial Group, Inc. Senior Notes 6.75% due 03/19/2020................ 1,145,000 1,321,722 First Niagara Financial Group, Inc. Sub. Notes 7.25% due 12/15/2021................ 714,000 874,817 ---------- 2,196,539 ---------- Steel Pipe & Tube -- 0.1% Valmont Industries, Inc. Company Guar. Notes 5.25% due 10/01/2054................ 440,000 412,147 ----------
33 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Steel-Producers -- 0.4% AK Steel Corp. Senior Sec. Notes 7.50% due 07/15/2023............. $ 650,000 $ 692,250 Steel Dynamics, Inc. Company Guar. Notes 5.13% due 10/01/2021............. 444,000 461,205 United States Steel Corp. Senior Sec. Notes 8.38% due 07/01/2021*............ 434,000 474,687 ---------- 1,628,142 ---------- Telecom Services -- 0.1% Embarq Corp. Senior Notes 8.00% due 06/01/2036............. 550,000 556,589 ---------- Telecommunication Equipment -- 0.2% Plantronics, Inc. Company Guar. Notes 5.50% due 05/31/2023*............ 562,000 578,860 ---------- Telephone-Integrated -- 1.6% AT&T, Inc. Senior Notes 1.45% due 06/01/2022............. EUR 225,000 268,402 AT&T, Inc. Senior Notes 3.00% due 06/30/2022............. 450,000 462,649 AT&T, Inc. Senior Notes 4.35% due 06/15/2045............. 300,000 295,516 AT&T, Inc. Senior Notes 4.50% due 05/15/2035............. 368,000 386,654 AT&T, Inc. Senior Notes 4.75% due 05/15/2046............. 234,000 244,870 AT&T, Inc. Senior Notes 5.50% due 03/15/2027............. GBP 250,000 424,852 AT&T, Inc. Senior Notes 5.80% due 02/15/2019............. 129,000 141,498 CenturyLink, Inc. Senior Notes 5.63% due 04/01/2025............. 156,000 149,370 CenturyLink, Inc. Senior Notes 6.88% due 01/15/2028............. 311,000 299,726 CenturyLink, Inc. Senior Notes 7.50% due 04/01/2024............. 465,000 496,387 Cincinnati Bell, Inc. Company Guar. Notes 7.00% due 07/15/2024*............ 580,000 594,500 Frontier Communications Corp. Senior Notes 11.00% due 09/15/2025............ 1,250,000 1,304,687
Principal Value Security Description Amount** (Note 2) Telephone-Integrated (continued) Verizon Communications, Inc. Senior Notes 3.00% due 11/01/2021................. $ 405,000 $ 423,773 Verizon Communications, Inc. Senior Notes 4.40% due 11/01/2034................. 148,000 156,604 Verizon Communications, Inc. Senior Notes 4.67% due 03/15/2055................. 400,000 420,772 Verizon Communications, Inc. Senior Notes 4.86% due 08/21/2046................. 232,000 259,855 ------------ 6,330,115 ------------ Transport-Equipment & Leasing -- 0.0% GATX Corp. Senior Notes 3.25% due 09/15/2026................. 95,000 94,443 ------------ Transport-Rail -- 0.0% Burlington Northern Santa Fe LLC Senior Notes 3.90% due 08/01/2046................. 102,000 109,038 ------------ Trucking/Leasing -- 0.0% Penske Truck Leasing Co. LP/PTL Finance Corp. Senior Notes 3.38% due 02/01/2022*................ 125,000 129,990 ------------ Wire & Cable Products -- 0.3% Belden, Inc.* Company Guar. Notes 5.25% due 07/15/2024................. 575,000 583,625 General Cable Corp. Company Guar. Notes 5.75% due 10/01/2022................. 490,000 465,500 ------------ 1,049,125 ------------ Total U.S. Corporate Bonds & Notes (cost $153,102,130)................... 157,320,545 ------------ FOREIGN CORPORATE BONDS & NOTES -- 15.6% Aerospace/Defense -- 0.1% BAE Systems PLC Senior Notes 4.13% due 06/08/2022................. GBP 150,000 222,971 ------------ Agricultural Chemicals -- 0.1% Consolidated Energy Finance SA Company Guar. Notes 6.75% due 10/15/2019*................ 415,000 409,812 ------------ Airport Development/Maintenance -- 0.2% Heathrow Funding, Ltd. Senior Sec. Notes 1.88% due 05/23/2024................. EUR 600,000 732,851 Heathrow Funding, Ltd. Senior Sec. Notes 6.75% due 12/03/2028................. GBP 100,000 188,135 ------------ 920,986 ------------
34 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Auto-Cars/Light Trucks -- 0.5% Daimler AG Senior Notes 2.75% due 12/04/2020........................ GBP 235,000 $ 328,095 FCE Bank PLC Senior Notes 1.53% due 11/09/2020........................ EUR 300,000 352,103 FCE Bank PLC Senior Notes 1.62% due 05/11/2023........................ EUR 300,000 354,943 Kia Motors Corp. Senior Notes 3.25% due 04/21/2026*....................... 200,000 210,316 RCI Banque SA Senior Notes 2.25% due 03/29/2021........................ EUR 350,000 427,139 Volkswagen International Finance NV Company Guar. Notes 2.38% due 03/22/2017*....................... 107,000 107,427 ---------- 1,780,023 ---------- Auto/Truck Parts & Equipment-Original -- 0.1% Tupy Overseas SA Company Guar. Notes 6.63% due 07/17/2024........................ 290,000 292,537 ---------- Banks-Commercial -- 2.0% Australia & New Zealand Banking Group, Ltd. Senior Notes 1.60% due 07/15/2019........................ 253,000 252,738 Banco de Credito del Peru/Panama Senior Notes 5.38% due 09/16/2020........................ 200,000 220,500 Bank of China, Ltd. Sub. Notes 5.00% due 11/13/2024........................ 200,000 216,418 BPCE SA Senior Notes 2.13% due 03/17/2021........................ EUR 300,000 367,293 BPCE SA Senior Notes 2.88% due 01/16/2024........................ EUR 300,000 396,999 Cooperatieve Rabobank UA Company Guar. Notes 3.75% due 07/21/2026........................ 250,000 250,410 Cooperatieve Rabobank UA Senior Notes 4.55% due 08/30/2029........................ GBP 110,000 182,645 Cooperatieve Rabobank UA Senior Notes 5.25% due 05/23/2041........................ GBP 100,000 191,429 Credit Suisse Senior Notes 3.00% due 10/29/2021........................ 254,000 261,309 Danske Bank A/S FRS Sub. Notes 3.88% due 10/04/2023........................ EUR 300,000 359,414 DBS Group Holdings, Ltd. Senior Notes 2.25% due 07/16/2019*....................... 491,000 499,114
Principal Value Security Description Amount** (Note 2) Banks-Commercial (continued) HBOS PLC Sub. Notes 5.37% due 06/30/2021......... EUR 600,000 $ 793,415 ICICI Bank, Ltd. Senior Notes 5.75% due 11/16/2020......... 200,000 224,744 Intesa Sanpaolo SpA Sub. Notes 5.02% due 06/26/2024*........ 254,000 231,792 Mizuho Bank, Ltd. Company Guar. Notes 2.15% due 10/20/2018*........ 15,000 15,128 Mizuho Bank, Ltd. Company Guar. Notes 2.45% due 04/16/2019*........ 275,000 279,466 National Bank of Canada Bank Guar. Notes 2.10% due 12/14/2018......... 269,000 272,419 Royal Bank of Canada Sub. Notes 4.65% due 01/27/2026......... 222,000 241,970 Santander Issuances SAU Company Guar. Notes 5.18% due 11/19/2025......... 200,000 203,770 Shinhan Bank Sub. Bonds 3.88% due 03/24/2026*........ 200,000 211,521 Standard Chartered Bank Sub. Notes 5.88% due 09/26/2017......... EUR 150,000 177,704 Svenska Handelsbanken AB FRS Sub. Notes 2.66% due 01/15/2024......... EUR 500,000 586,564 Toronto-Dominion Bank Senior Notes 1.80% due 07/13/2021......... 289,000 287,918 Toronto-Dominion Bank VRS Sub. Notes 3.63% due 09/15/2031......... 325,000 325,896 Westpac Banking Corp. Senior Notes 0.88% due 02/16/2021......... EUR 600,000 698,273 ---------- 7,748,849 ---------- Banks-Money Center -- 0.1% ABN AMRO Bank NV Senior Notes 2.50% due 11/29/2023......... EUR 200,000 259,828 ABN AMRO Bank NV Senior Notes 4.13% due 03/28/2022......... EUR 100,000 136,654 Bank of Scotland PLC Sub. Notes 6.38% due 08/16/2019......... GBP 150,000 217,999 ---------- 614,481 ---------- Beverages-Non-alcoholic -- 0.1% Coca-Cola Femsa SAB de CV Company Guar. Notes 2.38% due 11/26/2018......... 442,000 449,610 ----------
35 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Beverages-Wine/Spirits -- 0.2% Bacardi, Ltd. Company Guar. Notes 2.75% due 07/15/2026*................ $ 102,000 $ 101,346 Diageo Capital PLC Company Guar. Notes 5.75% due 10/23/2017................. 346,000 362,120 Pernod Ricard SA Senior Notes 3.25% due 06/08/2026*................ 196,000 199,093 ---------- 662,559 ---------- Brewery -- 0.2% Anheuser-Busch InBev SA Company Guar. Notes 0.88% due 03/17/2022................. EUR 200,000 232,794 Anheuser-Busch InBev SA/NV Company Guar. Notes 2.75% due 03/17/2036................. EUR 360,000 486,631 ---------- 719,425 ---------- Building Products-Cement -- 0.1% St Marys Cement, Inc. Company Guar. Notes 5.75% due 01/28/2027*................ 200,000 197,250 ---------- Building Societies -- 0.1% Nationwide Building Society Sub. Notes 4.00% due 09/14/2026*................ 265,000 263,791 ---------- Building-Residential/Commercial -- 0.2% Mattamy Group Corp. Company Guar. Notes 6.50% due 11/15/2020*................ 925,000 922,109 ---------- Cable/Satellite TV -- 0.8% Altice Financing SA Senior Sec. Notes 7.50% due 05/15/2026*................ 1,340,000 1,395,275 Altice Luxembourg SA Company Guar. Notes 7.75% due 05/15/2022*................ 345,000 368,288 Numericable-SFR SA Senior Sec. Notes 7.38% due 05/01/2026*................ 1,354,000 1,384,045 ---------- 3,147,608 ---------- Cellular Telecom -- 0.1% Empresa Nacional de Telecomunicaciones SA Senior Notes 4.88% due 10/30/2024................. 200,000 205,443 VimpelCom Holdings BV Company Guar. Notes 5.95% due 02/13/2023................. 200,000 207,290 ---------- 412,733 ---------- Chemicals-Diversified -- 0.2% Israel Chemicals, Ltd. Senior Notes 4.50% due 12/02/2024*................ 200,000 210,750
Principal Value Security Description Amount** (Note 2) Chemicals-Diversified (continued) NOVA Chemicals Corp. Senior Notes 5.00% due 05/01/2025*................. $ 420,000 $425,250 -------- 636,000 -------- Chemicals-Plastics -- 0.1% Mexichem SAB de CV Company Guar. Notes 5.88% due 09/17/2044*................. 440,000 420,750 -------- Consumer Products-Misc. -- 0.1% Kimberly-Clark de Mexico SAB de CV Senior Notes 3.25% due 03/12/2025*................. 213,000 211,343 -------- Cruise Lines -- 0.2% Royal Caribbean Cruises, Ltd. Senior Notes 5.25% due 11/15/2022.................. 281,000 305,587 Royal Caribbean Cruises, Ltd. Senior Notes 7.50% due 10/15/2027.................. 571,000 685,914 -------- 991,501 -------- Diversified Banking Institutions -- 1.4% BNP Paribas SA Senior Notes 2.38% due 11/20/2019.................. GBP 200,000 270,795 BNP Paribas SA Senior Notes 2.88% due 09/26/2023.................. EUR 400,000 527,904 BNP Paribas SA Sub. Notes 4.38% due 05/12/2026*................. 209,000 216,035 Credit Agricole SA Senior Notes 3.13% due 02/05/2026.................. EUR 200,000 277,963 Credit Agricole SA Sub. Notes 3.90% due 04/19/2021.................. EUR 500,000 647,965 Credit Agricole SA Sub. Notes 4.38% due 03/17/2025*................. 239,000 243,987 Credit Agricole SA Senior Notes 5.50% due 12/17/2021.................. GBP 250,000 396,208 HSBC Holdings PLC Senior Notes 2.65% due 01/05/2022.................. 228,000 227,224 Lloyds Banking Group PLC Sub. Notes 4.58% due 12/10/2025*................. 336,000 342,844 Mitsubishi UFJ Financial Group, Inc. Senior Notes 2.95% due 03/01/2021.................. 314,000 323,303 Mizuho Financial Group, Inc. Senior Notes 2.27% due 09/13/2021.................. 208,000 207,437
36 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Diversified Banking Institutions (continued) Royal Bank of Scotland Group PLC Senior Notes 3.88% due 09/12/2023...................... $ 201,000 $ 197,783 Royal Bank of Scotland PLC FRS Sub. Notes 10.50% due 03/16/2022..................... EUR 950,000 1,113,604 Societe Generale SA Sub. Notes 6.13% due 08/20/2018...................... EUR 250,000 311,864 ---------- 5,304,916 ---------- Diversified Financial Services -- 0.1% GE Capital International Funding Co. ULC Company Guar. Notes 4.42% due 11/15/2035...................... 513,000 575,773 ---------- Diversified Manufacturing Operations -- 0.1% Ingersoll-Rand Luxembourg Finance SA Company Guar. Notes 4.65% due 11/01/2044...................... 137,000 149,478 Siemens Financieringsmaatschappij NV Company Guar. Notes 2.35% due 10/15/2026*..................... 257,000 253,814 ---------- 403,292 ---------- Diversified Minerals -- 0.3% FMG Resources August 2006 Pty, Ltd. Senior Sec. Notes 9.75% due 03/01/2022*..................... 977,000 1,133,320 ---------- E-Commerce/Products -- 0.1% Alibaba Group Holding, Ltd. Senior Notes 3.60% due 11/28/2024...................... 280,000 293,239 ---------- Electric-Distribution -- 0.1% State Grid Overseas Investment 2014, Ltd. Company Guar. Notes 4.13% due 05/07/2024*..................... 200,000 220,779 ---------- Electric-Generation -- 0.4% Electricite de France SA Senior Notes 2.35% due 10/13/2020*..................... 697,000 710,796 Electricite de France SA Senior Notes 3.63% due 10/13/2025*..................... 128,000 134,591 Electricite de France SA Senior Notes 4.95% due 10/13/2045*..................... 294,000 318,168 Electricite de France SA Senior Notes 6.00% due 01/22/2114*..................... 167,000 180,843 Electricite de France SA Senior Notes 6.25% due 05/30/2028...................... GBP 150,000 273,915 ---------- 1,618,313 ----------
Principal Value Security Description Amount** (Note 2) Electric-Integrated -- 0.6% Enel Finance International NV Company Guar. Notes 5.00% due 09/14/2022.............. EUR 400,000 $ 575,670 Enel Finance International NV Company Guar. Notes 5.63% due 08/14/2024.............. GBP 100,000 163,939 GDF Suez Senior Notes 2.38% due 05/19/2026.............. EUR 700,000 927,751 Iberdrola International BV Company Guar. Notes 2.50% due 10/24/2022.............. EUR 300,000 382,834 Iberdrola International BV Company Guar. Notes 3.00% due 01/31/2022.............. EUR 300,000 387,174 ---------- 2,437,368 ---------- Electronic Components-Semiconductors -- 0.1% Sensata Technologies BV Senior Unsecured Notes 5.00% due 10/01/2025.............. 57,000 58,282 Sensata Technologies UK Financing Co. PLC Company Guar. Notes 6.25% due 02/15/2026*............. 380,000 411,350 ---------- 469,632 ---------- Finance-Leasing Companies -- 0.1% Fly Leasing, Ltd. Senior Notes 6.38% due 10/15/2021.............. 585,000 593,775 ---------- Food-Meat Products -- 0.2% BRF SA Senior Notes 7.75% due 05/22/2018*(6).......... BRL 1,000,000 285,350 Marfrig Holdings Europe BV Company Guar. Notes 8.00% due 06/08/2023*............. 200,000 204,900 Minerva Luxembourg SA Company Guar. Notes 6.50% due 09/20/2026*............. 200,000 196,500 ---------- 686,750 ---------- Food-Misc./Diversified -- 0.1% BRF GmbH Company Guar. Notes 4.35% due 09/29/2026*............. 200,000 195,800 ---------- Food-Retail -- 0.2% Casino Guichard Perrachon SA Senior Notes 4.41% due 08/06/2019.............. EUR 300,000 371,885 Casino Guichard-Perrachon SA Senior Notes 5.98% due 05/26/2021.............. EUR 300,000 397,800 ---------- 769,685 ---------- Gas-Distribution -- 0.0% Gas Natural Capital Markets SA Company Guar. Notes 5.13% due 11/02/2021.............. EUR 100,000 140,209 ----------
37 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Gas-Transportation -- 0.1% Transportadora de Gas del Peru SA Senior Notes 4.25% due 04/30/2028......................... $ 200,000 $207,820 -------- Gold Mining -- 0.1% Gold Fields Orogen Holdings BVI, Ltd. Guar. Notes 4.88% due 10/07/2020......................... 200,000 202,460 Goldcorp, Inc. Senior Notes 5.45% due 06/09/2044......................... 161,000 173,602 -------- 376,062 -------- Insurance-Multi-line -- 0.2% Willow No 2 Ireland PLC for Zurich Insurance Co., Ltd. Senior Sec. Notes 3.38% due 06/27/2022......................... EUR 175,000 231,120 XLIT, Ltd. Company Guar. Notes 4.45% due 03/31/2025......................... 137,000 139,065 XLIT, Ltd. Company Guar. Notes 5.50% due 03/31/2045......................... 312,000 305,230 -------- 675,415 -------- Investment Management/Advisor Services -- 0.1% China Cinda Finance 2015 I, Ltd. Company Guar. Notes 4.25% due 04/23/2025*........................ 380,000 394,322 -------- Machinery-General Industrial -- 0.1% ATS Automation Tooling Systems, Inc. Senior Notes 6.50% due 06/15/2023*........................ 569,000 583,225 -------- Medical-Drugs -- 0.1% Teva Pharmaceutical Finance Netherlands III BV Company Guar. Notes 2.80% due 07/21/2023......................... 198,000 198,508 Teva Pharmaceutical Finance Netherlands III BV Company Guar. Notes 3.15% due 10/01/2026......................... 140,000 140,648 Teva Pharmaceutical Finance Netherlands III BV Company Guar. Notes 4.10% due 10/01/2046......................... 253,000 251,800 -------- 590,956 -------- Medical-Generic Drugs -- 0.2% Actavis Funding SCS Company Guar. Notes 3.00% due 03/12/2020......................... 273,000 281,876 Perrigo Co. PLC Senior Notes 4.00% due 11/15/2023......................... 502,000 516,150 -------- 798,026 --------
Principal Value Security Description Amount** (Note 2) Metal Processors & Fabrication -- 0.1% Elementia SAB de CV Company Guar. Notes 5.50% due 01/15/2025.................. $ 200,000 $ 204,000 ---------- Metal-Aluminum -- 0.1% Alcoa Nederland Holding BV Company Guar. Notes 7.00% due 09/30/2026*................. 200,000 206,750 ---------- Metal-Copper -- 0.2% First Quantum Minerals, Ltd. Company Guar. Notes 7.25% due 05/15/2022*................. 937,000 829,245 ---------- Metal-Diversified -- 0.3% Glencore Canada Financial Corp. Company Guar. Notes 7.38% due 05/27/2020.................. GBP 200,000 301,787 Glencore Finance Europe SA Company Guar. Notes 2.75% due 04/01/2021.................. EUR 250,000 294,177 Glencore Finance Europe SA Company Guar. Notes 6.00% due 04/03/2022.................. GBP 300,000 440,172 ---------- 1,036,136 ---------- Metal-Iron -- 0.1% Metalloinvest Finance, Ltd. Company Guar. Notes 5.63% due 04/17/2020.................. 200,000 209,840 NLMK Group Senior Notes 4.50% due 06/15/2023.................. 200,000 201,521 ---------- 411,361 ---------- Oil & Gas Drilling -- 0.1% Pacific Drilling SA Senior Sec. Notes 5.38% due 06/01/2020*................. 1,050,000 290,063 ---------- Oil Companies-Exploration & Production -- 0.5% Anadarko Finance Co. Company Guar. Notes 7.50% due 05/01/2031.................. 117,000 144,845 Empresa Nacional del Petroleo Senior Notes 3.75% due 08/05/2026*................. 200,000 202,500 MEG Energy Corp. Company Guar. Notes 6.38% due 01/30/2023*................. 994,000 786,502 MEG Energy Corp. Company Guar. Notes 6.50% due 03/15/2021*................. 350,000 285,688 Novatek OAO via Novatek Finance, Ltd. Senior Notes 6.60% due 02/03/2021.................. 200,000 219,886 Pertamina Persero PT Senior Notes 4.88% due 05/03/2022*................. 300,000 323,294
38 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Oil Companies-Exploration & Production (continued) Tengizchevroil Finance Co., Inc. Senior Sec. Notes 4.00% due 08/15/2026*.............. $ 200,000 $ 198,000 ---------- 2,160,715 ---------- Oil Companies-Integrated -- 1.1% BP Capital Markets PLC Company Guar. Notes 1.38% due 11/06/2017............... 302,000 302,028 BP Capital Markets PLC Company Guar. Notes 1.68% due 05/03/2019............... 197,000 197,768 BP Capital Markets PLC Company Guar. Notes 2.97% due 02/27/2026............... EUR 450,000 604,475 BP Capital Markets PLC Company Guar. Notes 3.02% due 01/16/2027............... 122,000 123,923 BP Capital Markets PLC Company Guar. Notes 3.12% due 05/04/2026............... 158,000 161,461 BP Capital Markets PLC Company Guar. Notes 3.25% due 05/06/2022............... 203,000 213,804 BP Capital Markets PLC Company Guar. Notes 4.33% due 12/10/2018............... GBP 100,000 139,629 Ecopetrol SA Senior Notes 4.13% due 01/16/2025............... 200,000 194,190 Lukoil International Finance BV Company Guar. Notes 4.56% due 04/24/2023............... 200,000 206,876 Petrobras Global Finance BV Company Guar. Notes 8.75% due 05/23/2026............... 155,000 171,275 Petroleos Mexicanos Company Guar. Notes 5.50% due 06/27/2044............... 157,000 136,103 Petroleos Mexicanos Company Guar. Notes 6.75% due 09/21/2047*.............. 676,000 676,000 Petronas Capital, Ltd. Company Guar. Notes 3.50% due 03/18/2025............... 275,000 295,897 Shell International Finance BV Company Guar. Notes 1.25% due 11/10/2017............... 201,000 201,346 Shell International Finance BV Company Guar. Notes 2.13% due 05/11/2020............... 219,000 222,305 Shell International Finance BV Company Guar. Notes 2.25% due 11/10/2020............... 232,000 236,360 Total Capital International SA Company Guar. Notes 2.25% due 06/09/2022............... GBP 140,000 194,487 ---------- 4,277,927 ----------
Principal Value Security Description Amount** (Note 2) Oil Refining & Marketing -- 0.2% Reliance Industries, Ltd. Senior Notes 4.13% due 01/28/2025*............... $ 250,000 $ 260,171 Thai Oil PCL Senior Notes 3.63% due 01/23/2023*............... 200,000 210,327 Ultrapar International SA Senior Unsecured Notes 5.25% due 10/06/2026................ 200,000 199,540 ---------- 670,038 ---------- Paper & Related Products -- 0.2% Bahia Sul Holdings GmbH Company Guar. Notes 5.75% due 07/14/2026*............... 200,000 201,520 Cascades, Inc. Company Guar. Notes 5.75% due 07/15/2023*............... 355,000 359,437 Klabin Finance SA Company Guar. Notes 5.25% due 07/16/2024*............... 200,000 199,500 ---------- 760,457 ---------- Petrochemicals -- 0.1% Alpek SAB de CV Company Guar. Notes 5.38% due 08/08/2023*............... 200,000 214,000 Braskem Finance, Ltd. Company Guar. Notes 5.75% due 04/15/2021................ 200,000 209,640 ---------- 423,640 ---------- Pipelines -- 0.1% Southern Gas Corridor CJSC Government Guar. Notes 6.88% due 03/24/2026*............... 500,000 560,000 ---------- Printing-Commercial -- 0.2% Cimpress NV Company Guar. Notes 7.00% due 04/01/2022*............... 720,000 750,600 ---------- Real Estate Investment Trusts -- 0.1% Trust F/1401 Senior Notes 5.25% due 01/30/2026*............... 200,000 207,300 ---------- Retail-Major Department Stores -- 0.1% El Puerto de Liverpool SAB de CV Company Guar. Notes 3.88% due 10/06/2026*............... 200,000 197,400 ---------- Satellite Telecom -- 0.5% Inmarsat Finance PLC Company Guar. Notes 4.88% due 05/15/2022*............... 910,000 864,500 Telesat Canada/Telesat LLC Company Guar. Notes 6.00% due 05/15/2017*............... 1,140,000 1,140,000 ---------- 2,004,500 ----------
39 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Security Services -- 0.2% Garda World Security Corp. Company Guar. Notes 7.25% due 11/15/2021*................... $ 811,000 $ 748,147 ---------- Semiconductor Components-Integrated Circuits -- 0.1% NXP BV/NXP Funding LLC Company Guar. Notes 4.63% due 06/01/2023*................... 415,000 453,906 ---------- Special Purpose Entity -- 0.0% Hellas Telecommunications Luxembourg II SCA FRS Sub. Notes 6.05% due 01/15/2015*+(3)(6)(7)(14)..... 1,330,000 0 ---------- Steel-Producers -- 0.3% ArcelorMittal Senior Notes 7.25% due 02/25/2022.................... 1,073,000 1,217,855 ---------- Sugar -- 0.1% Cosan Luxembourg SA Company Guar. Notes 7.00% due 01/20/2027*................... 200,000 208,000 ---------- SupraNational Banks -- 0.1% North American Development Bank Senior Notes 2.30% due 10/10/2018.................... 434,000 443,410 ---------- Telecom Services -- 0.1% Bharti Airtel International Netherlands BV Company Guar. Notes 5.35% due 05/20/2024.................... 200,000 218,864 GTH Finance BV Company Guar. Notes 7.25% due 04/26/2023*................... 200,000 216,828 ---------- 435,692 ---------- Telephone-Integrated -- 0.5% Deutsche Telekom International Finance BV Company Guar. Notes 2.49% due 09/19/2023*................... 453,000 453,693 Deutsche Telekom International Finance BV Company Guar. Notes 8.88% due 11/27/2028.................... GBP 150,000 337,750 Empresa de Telecomunicaciones de Bogota Senior Notes 7.00% due 01/17/2023*................... COP 640,000,000 164,946 Koninklijke KPN NV Senior Notes 5.75% due 09/17/2029.................... GBP 200,000 345,914 Oi SA Senior Notes 9.75% due 09/15/2016*+(6)(7)(14)........ BRL 575,000 32,046 Telecom Italia Capital SA Company Guar. Notes 7.72% due 06/04/2038.................... 341,000 373,395
Principal Value Security Description Amount** (Note 2) Telephone-Integrated (continued) Telefonica Emisiones SAU Company Guar. Notes 5.38% due 02/02/2026............... GBP 160,000 $ 265,661 ----------- 1,973,405 ----------- Transport-Marine -- 0.1% PT Pelabuhan Indonesia II Senior Notes 4.25% due 05/05/2025*.............. 300,000 306,207 ----------- Transport-Rail -- 0.0% Canadian Pacific Railway Co. Senior Notes 6.13% due 09/15/2115............... 152,000 187,615 ----------- Total Foreign Corporate Bonds & Notes (cost $62,757,671)................. 60,457,384 ----------- FOREIGN GOVERNMENT OBLIGATIONS -- 8.3% Banks-Fiduciary -- 0.3% Central Bank of Tunisia Senior Notes 5.75% due 01/30/2025............... 1,130,000 1,104,292 ----------- Electric-Distribution -- 0.1% Hydro-Quebec Government Guar. Notes 1.38% due 06/19/2017............... 375,000 375,998 ----------- Sovereign -- 7.9% Dominican Republic Senior Notes 5.50% due 01/27/2025*.............. 415,000 439,900 Dominican Republic Senior Bonds 5.88% due 04/18/2024............... 380,000 413,250 Dominican Republic Senior Notes 8.63% due 04/20/2027............... 350,000 428,750 Federal Republic of Germany Bonds 0.01% due 08/15/2026............... EUR 1,175,000 1,335,925 Federal Republic of Germany Bonds 2.50% due 08/15/2046............... EUR 95,000 167,851 Federal Republic of Germany Bonds 6.25% due 01/04/2030............... EUR 390,000 807,658 Federative Republic of Brazil Senior Notes 5.00% due 01/27/2045............... 420,000 381,150 Federative Republic of Brazil Senior Notes 6.00% due 04/07/2026............... 340,000 376,550 Federative Republic of Brazil Senior Notes 7.13% due 01/20/2037............... 260,000 305,500 Government of Egypt Senior Notes 5.75% due 04/29/2020............... 380,000 389,595
40 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN GOVERNMENT OBLIGATIONS (continued) Sovereign (continued) Government of Egypt Senior Notes 5.88% due 06/11/2025......... $ 450,000 $ 427,644 Government of Egypt Senior Notes 6.88% due 04/30/2040......... 200,000 192,540 Government of Finland Senior Bonds 2.63% due 07/04/2042*........ EUR 130,000 219,742 Government of Jamaica Senior Notes 6.75% due 04/28/2028......... 200,000 228,500 Government of Jamaica Senior Notes 8.00% due 03/15/2039......... 600,000 717,000 Government of Oman Bonds 4.75% due 06/15/2026......... 630,000 632,205 Government of Romania Senior Notes 6.13% due 01/22/2044......... 180,000 243,000 Islamic Republic of Pakistan Senior Notes 8.25% due 04/15/2024......... 200,000 218,982 Kingdom of Belgium Bonds 5.00% due 03/28/2035*........ EUR 255,000 506,680 Kingdom of Morocco Senior Notes 4.25% due 12/11/2022......... 380,000 402,891 Kingdom of Morocco Senior Notes 5.50% due 12/11/2042......... 200,000 228,588 Oriental Republic of Uruguay Senior Notes 5.10% due 06/18/2050......... 300,000 311,250 Republic of Argentina Senior Notes 6.88% due 04/22/2021......... 280,000 304,780 Republic of Argentina Senior Notes 7.50% due 04/22/2026*........ 371,000 418,488 Republic of Argentina Senior Notes 7.63% due 04/22/2046*........ 309,000 348,552 Republic of Argentina Senior Notes 7.63% due 04/22/2046......... 170,000 191,760 Republic of Chile Senior Notes 3.13% due 01/21/2026......... 380,000 401,845 Republic of Chile Senior Bonds 3.63% due 10/30/2042......... 350,000 372,313 Republic of Costa Rica Senior Notes 7.16% due 03/12/2045*........ 280,000 301,700
Principal Value Security Description Amount** (Note 2) Sovereign (continued) Republic of Guatemala Senior Notes 5.75% due 06/06/2022.... $ 240,000 $ 269,400 Republic of Honduras Senior Notes 7.50% due 03/15/2024.... 370,000 419,950 Republic of Honduras Senior Notes 8.75% due 12/16/2020.... 350,000 401,625 Republic of Indonesia Senior Notes 6.63% due 02/17/2037.... 117,000 153,390 Republic of Ivory Coast Senior Notes 5.38% due 07/23/2024.... 400,000 402,080 Republic of Ivory Coast Senior Notes 6.38% due 03/03/2028.... 200,000 209,500 Republic of Kenya Senior Notes 6.88% due 06/24/2024.... 800,000 784,000 Republic of Lebanon Senior Notes 5.80% due 04/14/2020.... 390,000 386,061 Republic of Lebanon Senior Notes 6.60% due 11/27/2026.... 700,000 686,910 Republic of Lebanon Senior Notes 6.65% due 02/26/2030.... 200,000 195,040 Republic of Lebanon Senior Notes 8.25% due 04/12/2021.... 190,000 205,852 Republic of Lithuania Senior Notes 6.63% due 02/01/2022.... 500,000 617,358 Republic of Lithuania Senior Notes 7.38% due 02/11/2020.... 550,000 653,202 Republic of Mozambique Senior Notes 10.50% due 01/18/2023*.. 774,000 634,835 Republic of Namibia Senior Notes 5.25% due 10/29/2025.... 370,000 390,831 Republic of Panama Senior Notes 3.75% due 03/16/2025.... 600,000 647,250 Republic of Panama Senior Notes 6.70% due 01/26/2036.... 670,000 914,550 Republic of Paraguay Senior Notes 6.10% due 08/11/2044.... 350,000 398,125 Republic of Peru Senior Notes 6.55% due 03/14/2037.... 300,000 423,750
41 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) FOREIGN GOVERNMENT OBLIGATIONS (continued) Sovereign (continued) Republic of Poland Senior Notes 4.00% due 01/22/2024......... $ 770,000 $850,850 Republic of Poland Senior Notes 5.13% due 04/21/2021......... 50,000 56,520 Republic of Serbia Senior Notes 7.25% due 09/28/2021......... 750,000 873,030 Republic of South Africa Senior Bonds 4.88% due 04/14/2026......... 350,000 367,920 Republic of Sri Lanka Senior Notes 6.83% due 07/18/2026*........ 265,000 284,890 Republic of Sri Lanka Senior Notes 6.85% due 11/03/2025......... 400,000 429,205 Republic of Sri Lanka Senior Notes 6.85% due 11/03/2025*........ 400,000 429,205 Republic of Turkey Senior Notes 3.25% due 03/23/2023......... 1,040,000 977,242 Republic of Turkey Senior Notes 4.88% due 04/16/2043......... 530,000 494,601 Republic of Turkey Notes 6.63% due 02/17/2045......... 200,000 233,114 Republic of Turkey Senior Notes 11.88% due 01/15/2030........ 220,000 366,047 Republic of Venezuela Bonds 8.25% due 10/13/2024......... 960,000 471,360 Russian Federation Senior Notes 5.88% due 09/16/2043......... 200,000 238,516 United Kingdom Gilt Treasury Bonds 1.50% due 07/22/2026......... GBP 125,000 173,315 United Kingdom Gilt Treasury Bonds 3.50% due 01/22/2045......... GBP 125,000 236,427 United Kingdom Gilt Treasury Bonds 4.50% due 09/07/2034......... GBP 350,000 686,072 United Mexican States Senior Notes 4.13% due 01/21/2026......... 600,000 645,300 United Mexican States Senior Notes 4.35% due 01/15/2047......... 628,000 617,010 United Mexican States Senior Bonds 4.75% due 03/08/2044......... 445,000 461,131
Principal Value Security Description Amount** (Note 2) Sovereign (continued) United Mexican States Senior Notes 6.05% due 01/11/2040............... $ 900,000 $ 1,095,750 ----------- 30,495,803 ----------- Total Foreign Government Obligations (cost $31,065,055)................. 31,976,093 ----------- U.S. GOVERNMENT AGENCIES -- 27.4% Federal Home Loan Mtg. Corp. -- 10.1% 2.49% due 02/01/2037 FRS........... 27,096 28,182 2.50% due 01/01/2028............... 295,298 306,675 2.50% due 04/01/2028............... 97,407 101,180 2.50% due 03/01/2031............... 158,057 163,921 3.00% due 11/01/2026............... 1,696,788 1,782,909 3.00% due 08/01/2043............... 1,044,577 1,087,216 3.00% due 07/01/2045............... 2,657,145 2,763,689 3.00% due 10/01/2045............... 281,210 292,486 3.00% due 12/01/2045............... 92,595 96,308 3.00% due October 30 TBA........... 2,163,000 2,247,661 3.01% due 11/01/2037 FRS........... 161,698 171,096 3.50% due 03/01/2042............... 386,250 408,895 3.50% due 04/01/2042............... 393,840 418,628 3.50% due 09/01/2043............... 412,720 439,817 3.50% due 03/01/2045............... 474,239 500,392 3.50% due 07/01/2045............... 3,704,223 3,936,945 3.50% due 08/01/2045............... 168,231 179,111 3.50% due 10/01/2045............... 262,943 277,367 3.50% due 11/01/2045............... 127,943 134,962 3.50% due 01/01/2046............... 2,569,761 2,710,730 3.50% due October 30 TBA........... 1,032,000 1,088,740 4.00% due 09/01/2040............... 1,053,330 1,134,219 4.00% due 12/01/2043............... 2,844,056 3,095,022 4.00% due 07/01/2044............... 174,328 186,978 4.00% due 10/01/2045............... 2,427,468 2,603,620 4.00% due 11/01/2045............... 2,372,001 2,544,128 4.50% due 02/01/2020............... 7,220 7,520 4.50% due 08/01/2020............... 16,078 16,473 4.50% due 01/01/2039............... 20,982 22,964 4.50% due 03/01/2039............... 1,934,801 2,165,875 4.50% due 12/01/2039............... 10,893 11,922 4.50% due 07/01/2040............... 226,702 251,660 4.50% due 04/01/2044............... 680,838 745,236 4.50% due 07/01/2044............... 1,597,731 1,760,374 4.50% due 09/01/2044............... 949,473 1,039,124 4.50% due 03/01/2046............... 1,750,549 1,918,878 5.00% due 02/01/2034............... 29,893 33,578 5.00% due 05/01/2034............... 41,118 45,532 5.00% due 11/01/2043............... 298,028 333,298 5.50% due 05/01/2037............... 76,582 86,685 6.00% due 03/01/2040............... 59,915 68,745 6.50% due 02/01/2035............... 24,235 28,221 Federal Home Loan Mtg. Corp. REMIC FRS Series 3572, Class JS 6.28% due 09/15/2039(1)(8)(9)...... 663,832 100,643
42 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) U.S. GOVERNMENT AGENCIES (continued) Federal Home Loan Mtg. Corp. (continued) Federal Home Loan Mtg. Corp. Structured Agency Credit Risk Series 2016-HQA1, Class M2 1.00% due 09/25/2028 FRS(1)........... $ 159,000 $ 164,004 Series 2014-DN1, Class M2 2.73% due 02/25/2024 FRS(1)........... 84,000 86,256 Series 2014-HQ2, Class M2 2.73% due 09/25/2024 FRS(1)........... 150,000 154,652 Series 2015-HQ1, Class M2 2.73% due 03/25/2025 FRS(1)........... 390,000 395,163 Series 2014-HQ3, Class M2 3.18% due 10/25/2024 FRS(1)........... 577,849 584,546 Series 2015-HQA1, Class M2 3.18% due 03/25/2028 FRS(1)........... 452,000 462,488 Federal Home Loan Mtg. Corp., REMIC Series 1103, Class N IO 11.50% due 06/15/2021(1)(8)........... 549 62 ----------- 39,184,776 ----------- Federal National Mtg. Assoc. -- 13.5% 2.50% due 12/01/2026.................. 723,008 751,148 2.50% due 09/01/2027.................. 565,542 586,317 2.50% due 02/01/2031.................. 265,955 275,724 2.50% due 05/01/2031.................. 1,622,952 1,682,571 2.50% due October 15 TBA.............. 2,236,000 2,315,947 2.53% due 09/01/2035 FRS.............. 103,274 108,264 2.67% due 10/01/2035 FRS.............. 114,081 120,539 2.67% due 05/01/2037 FRS.............. 40,282 42,099 2.67% due 05/01/2040 FRS.............. 136,787 144,606 2.78% due 11/01/2036 FRS.............. 67,782 71,607 2.79% due 10/01/2040 FRS.............. 68,778 72,712 2.80% due 07/01/2039 FRS.............. 100,206 105,100 3.00% due 04/01/2027.................. 638,885 671,476 3.00% due 10/01/2027.................. 328,788 345,718 3.00% due 11/01/2027.................. 374,568 393,838 3.00% due 10/01/2030.................. 267,547 280,961 3.00% due 03/01/2042.................. 161,582 168,323 3.00% due 12/01/2042.................. 167,917 175,567 3.00% due 05/01/2043.................. 880,438 917,059 3.00% due 06/01/2045.................. 46,817 49,106 3.00% due 08/01/2045.................. 1,903,755 1,980,423 3.00% due 05/01/2046.................. 3,976,455 4,136,595 3.00% due 09/01/2046.................. 342,000 355,773 3.00% due October 15 TBA.............. 1,441,000 1,512,825 3.00% due October 30 TBA.............. 2,014,000 2,093,223 3.05% due 10/01/2040 FRS.............. 42,991 45,359 3.08% due 08/01/2035 FRS.............. 91,228 97,336 3.50% due 08/01/2026.................. 132,379 139,664 3.50% due 08/01/2027.................. 160,133 168,968 3.50% due 10/01/2028.................. 48,131 51,314 3.50% due 08/01/2042.................. 157,256 166,538 3.50% due 02/01/2043.................. 147,212 158,677 3.50% due 07/01/2045.................. 131,279 138,649 3.50% due 08/01/2045.................. 249,286 264,639 3.50% due 09/01/2045.................. 145,696 153,756 3.50% due 10/01/2045.................. 291,588 311,465 3.50% due 11/01/2045.................. 298,498 315,923
Principal Value Security Description Amount** (Note 2) Federal National Mtg. Assoc. (continued) 3.50% due 12/01/2045.................. $2,586,260 $ 2,728,267 3.50% due 02/01/2046.................. 977,673 1,031,355 3.50% due 03/01/2046.................. 3,773,877 3,981,095 3.50% due October 15 TBA.............. 1,936,000 2,040,968 3.50% due October 30 TBA.............. 4,630,000 4,885,373 4.00% due 11/01/2025.................. 212,115 225,419 4.00% due 06/01/2039.................. 400,914 443,601 4.00% due 09/01/2040.................. 312,569 335,904 4.00% due 10/01/2040.................. 365,114 392,474 4.00% due 11/01/2041.................. 288,659 311,104 4.00% due 01/01/2043.................. 1,533,945 1,670,631 4.00% due 12/01/2043.................. 11,880 13,065 4.00% due 02/01/2045.................. 2,472,346 2,692,648 4.00% due October 30 TBA.............. 2,441,000 2,621,596 4.50% due 06/01/2019.................. 17,956 18,486 4.50% due 11/01/2022.................. 51,798 53,830 4.50% due 06/01/2023.................. 25,218 26,860 4.50% due 06/01/2039.................. 1,691,963 1,874,290 4.50% due 07/01/2041.................. 40,385 44,321 4.50% due 08/01/2045.................. 2,432,266 2,730,129 4.50% due October 30 TBA.............. 1,832,000 2,006,283 5.00% due 06/01/2019.................. 15,113 15,601 5.00% due 01/01/2023.................. 15,026 16,129 5.00% due 03/01/2034.................. 26,341 29,371 5.00% due 05/01/2035.................. 15,032 16,682 5.00% due 05/01/2040.................. 119,803 133,294 5.00% due 07/01/2040.................. 120,987 134,312 5.50% due 06/01/2038.................. 38,340 43,547 6.00% due 02/01/2032.................. 5,130 5,873 6.00% due 05/01/2034.................. 2,435 2,818 6.00% due 10/01/2034.................. 21,076 24,126 7.50% due 01/01/2030.................. 1,315 1,355 8.00% due 11/01/2028.................. 4,473 5,175 Fannie Mae Connecticut Avenue Securities FRS Series 2014-C01, Class M1 2.13% due 01/25/2024(1)............... 123,424 124,375 Federal National Mtg. Assoc., REMIC Series 1989-2, Class D 8.80% due 01/25/2019(1)............... 3,117 3,278 ----------- 52,053,444 ----------- Government National Mtg. Assoc. -- 3.7% 3.00% due 02/20/2045.................. 179,766 188,569 3.00% due 05/20/2045.................. 119,015 124,843 3.00% due 07/20/2045.................. 46,282 48,548 3.00% due 11/20/2045.................. 1,711,850 1,795,677 3.00% due 04/20/2046.................. 2,678,893 2,810,076 3.50% due 03/20/2045.................. 136,032 144,534 3.50% due 04/20/2045.................. 185,544 197,112 3.50% due 07/20/2045.................. 247,512 263,000 3.50% due 10/20/2045.................. 3,721,594 3,954,614 3.50% due 05/20/2046.................. 1,805,468 1,920,136 4.00% due 10/20/2045.................. 307,080 329,508 4.50% due 09/20/2045.................. 1,141,697 1,233,306 4.50% due 10/20/2045.................. 702,662 759,044 4.50% due 05/20/2046.................. 482,459 521,171 ----------- 14,290,138 -----------
43 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Shares/ Principal Value Security Description Amount** (Note 2) U.S. GOVERNMENT AGENCIES (continued) Tennessee Valley Authority -- 0.1% 1.75% due 10/15/2018....................... $ 238,000 $ 242,014 ------------ Total U.S. Government Agencies (cost $104,907,886)....................... 105,770,372 ------------ U.S. GOVERNMENT TREASURIES -- 1.3% United States Treasury Bonds -- 0.9% 2.50% due 02/15/2046...................... 940,000 971,579 2.50% due 05/15/2046...................... 2,500,000 2,587,500 ------------ 3,559,079 ------------ United States Treasury Notes -- 0.4% 0.50% due 04/30/2017...................... 400 400 1.13% due 06/30/2021...................... 478,000 477,440 1.13% due 07/31/2021...................... 436,000 435,370 1.38% due 01/31/2021...................... 109,000 110,192 1.63% due 05/15/2026...................... 550,000 550,730 ------------ 1,574,132 ------------ Total U.S. Government Treasuries (cost $5,058,547)......................... 5,133,211 ------------ LOANS(11)(12)(13) -- 0.5% Casino Hotels -- 0.1% Caesars Entertainment Resort Properties LLC FRS BTL-B 7.00% due 10/11/2020...................... 573,526 569,941 ------------ E-Commerce/Services -- 0.2% Rentpath, Inc. FRS 2nd Lien 10.00% due 12/17/2022..................... 693,906 586,351 ------------ Electronic Components-Semiconductors -- 0.2% SunEdison Semiconductor, Ltd. FRS 1st Lien 6.50% due 05/27/2019...................... 659,751 658,102 ------------ Total Loans (cost $1,891,205)......................... 1,814,394 ------------ MUNICIPAL BONDS & NOTES -- 0.1% Port Authority of New York & New Jersey Revenue Bonds Series 174 4.46% due 10/01/2062 (cost $512,000)........................... 512,000 589,184 ------------ COMMON STOCKS -- 0.2% Television -- 0.2% ION Media Networks, Inc.+(3)(6) (cost $6)................................. 655 792,530 ------------ PREFERRED SECURITIES -- 0.2% Electric-Distribution -- 0.1% Entergy Louisiana LLC 4.70%..................................... 8,600 221,450 ------------ Sovereign Agency -- 0.0% Federal Home Loan Mtg. Corp. FRS Series Z 8.38%..................................... 9,675 33,669 ------------
Shares/ Principal Value Security Description Amount** (Note 2) Telecom Services -- 0.1% Qwest Corp. 6.13%................................. $ 16,700 $ 425,015 ---------- Total Preferred Securities (cost $781,882)....................... 680,134 ---------- PREFERRED SECURITIES/CAPITAL SECURITIES -- 2.6% Banks-Commercial -- 0.1% Standard Chartered PLC FRS 7.50% due 04/02/2022*(4).............. 390,000 389,025 ---------- Banks-Super Regional -- 0.1% Fifth Third Bancorp FRS Series J 4.90% due 09/30/2019(4)............... 396,000 383,724 Banks-Super Regional -- 0.1% Wells Fargo Capital X 5.95% due 12/01/2086.................. 159,000 174,503 ---------- 558,227 ---------- Diversified Banking Institutions -- 0.9% BAC Capital Trust XIII FRS Series F 4.00% due 10/21/2016(4)............... 761,000 623,548 Citigroup, Inc. FRS Series P 5.95% due 05/15/2025(4)............... 762,000 777,316 JPMorgan Chase & Co. FRS Series U 6.13% due 04/30/2024(4)............... 1,186,000 1,254,563 Societe Generale SA VRS 7.38% due 09/13/2021*(4).............. 375,000 367,500 Societe Generale SA FRS 7.88% due 12/18/2023*(4).............. 356,000 347,100 ---------- 3,370,027 ---------- Electric-Generation -- 0.1% Electricite de France SA FRS 4.13% due 01/22/2022(4)............... EUR 300,000 334,477 ---------- Electric-Integrated -- 0.2% Dominion Resources, Inc. FRS 5.75% due 10/01/2054.................. 224,000 231,795 Engie SA FRS 3.88% due 07/10/2018(4)............... EUR 300,000 352,407 ---------- 584,202 ---------- Finance-Investment Banker/Broker -- 0.0% Lehman Brothers Holdings Capital Trust VII Escrow Security 0.00%+(3)(6).......................... 222,000 22 ---------- Finance-Other Services -- 0.1% National Rural Utilities Cooperative Finance Corp. FRS 4.75% due 04/30/2043.................. 388,000 393,944 ----------
44 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount** (Note 2) PREFERRED SECURITIES/CAPITAL SECURITIES (continued) Financial Guarantee Insurance -- 0.3% Assured Guaranty Municipal Holdings, Inc. FRS 6.40% due 12/15/2066*.................... $ 1,271,000 $ 1,010,445 ------------ Food-Dairy Products -- 0.3% Land O'Lakes Capital Trust I 7.45% due 03/15/2028*.................... 975,000 1,077,375 ------------ Gas-Distribution -- 0.0% Centrica PLC FRS 3.00% due 04/10/2076..................... EUR 100,000 109,948 ------------ Insurance-Life/Health -- 0.0% Prudential Financial, Inc. FRS 5.38% due 05/15/2045..................... 93,000 96,953 ------------ Insurance-Multi-line -- 0.1% MetLife Capital Trust IV 7.88% due 12/15/2067*.................... 97,000 121,696 MetLife, Inc. 6.40% due 12/15/2066..................... 379,000 419,506 ------------ 541,202 ------------ Insurance-Reinsurance -- 0.1% Muenchener Rueckversicherungs- Gesellschaft AG FRS 7.63% due 06/21/2028..................... GBP 400,000 567,046 ------------ Oil Companies-Integrated -- 0.1% TOTAL SA FRS 3.88% due 05/18/2022(4).................. EUR 260,000 309,887 ------------ Pipelines -- 0.0% Transcanada Trust FRS 5.63% due 05/20/2075..................... 118,000 119,475 ------------ Telephone-Integrated -- 0.1% Orange SA FRS 4.00% due 10/01/2021(4).................. EUR 250,000 296,634 ------------ Tools-Hand Held -- 0.1% Stanley Black & Decker, Inc. FRS 5.75% due 12/15/2053..................... 447,000 477,732 ------------ Total Preferred Securities/Capital Securities (cost $9,752,717)........................ 10,236,621 ------------ Total Long-Term Investment Securities (cost $377,913,001)...................... 382,908,201 ------------ SHORT-TERM INVESTMENT SECURITIES -- 5.8% Time Deposits -- 5.5% Euro Time Deposit with State Street Bank and Trust Co. 0.01% due 10/03/2016 (cost $21,164,000)....................... 21,164,000 21,164,000 ------------ REPURCHASE AGREEMENTS -- 0.3% State Street Bank and Trust Co. Joint Repurchase Agreement(10) (cost $1,203,000)........................ 1,203,000 1,203,000 ------------ TOTAL INVESTMENTS (cost $400,280,001)(5)................... 104.8% 405,275,201 Liabilities in excess of other assets....... (4.8) (18,667,743) ------------- ------------ NET ASSETS 100.0% $386,607,458 ============= ============
-------- * Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. At September 30, 2016, the aggregate value of these securities was $91,694,469 representing 23.7% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. ** Denominated in United States Dollars unless otherwise indicated. + Non-income producing security (1) Collateralized Mortgage Obligation (2) Commercial Mortgage Backed Security (3) Fair valued security. Securities are classified as Level 3 based on the securities valuation inputs (see Note 2). (4) Perpetual maturity--maturity date reflects the next call date. (5) See Note 5 for cost of investments on a tax basis. (6) Illiquid security. At September 30, 2016, the aggregate value of these securities was $1,130,892 representing 0.3% of net assets. (7) Security in default of interest and principal at maturity (8) Interest Only (9) Inverse Floating Rate Security that pays interest that varies inversely to changes in the market interest rates. The interest rate shown is the current interest rate at September 30, 2016. (10) See Note 2 for details of Joint Repurchase Agreements. (11) All loans in the Fund were purchased through assignment agreements unless otherwise indicated. (12) Senior loans in the Fund are generally subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for a borrower to prepay, prepayments may occur. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. (13) The Fund invests in senior loans which generally pay interest at rates which are periodically re-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the London Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more major United States banks, or the certificate of deposit rate. Senior loans are generally considered to be restrictive in that the Fund is ordinarily contractually obligated to receive approval from the Agent Bank and/or borrower prior to the disposition of a senior loan. (14) Company has filed for bankruptcy protection. BTL --Bank Term Loan REMIC --Real Estate Mortgage Investment Conduit TBA --Securities purchased on a forward commitment basis with an approximate principal amount and no definite maturity date. The actual principal amount and maturity date will be determined upon settlement date. ULC --Unlimited Company FRS --Floating Rate Security VRS --Variable Rate Security The rates shown on FRS and VRS are the current rates at September 30, 2016 and unless noted otherwise, the dates shown are the original maturity dates. BRL --Brazilian Real COP --Columbian Peso EUR --Euro GBP --British Pound 45 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued) Forward Foreign Currency Contracts
Contract In Exchange Delivery Unrealized Unrealized Counterparty to Deliver For Date Appreciation Depreciation -------------------------------------------------------------------------------------------- JPMorgan Chase Bank N.A EUR 12,250,000 USD 13,842,500 10/07/2016 $79,580 $ -- EUR 10,215,000 USD 11,473,213 10/28/2016 -- (14,593) GBP 6,095,000 USD 7,919,483 10/28/2016 15,522 -- USD 253,013 EUR 225,000 10/07/2016 -- (224) ------- -------- Net Unrealized Appreciation/(Depreciation)...... $95,102 $(14,817) ======= ========
-------- EUR --Euro Dollar GBP --Pound Sterling USD --United States 46 SunAmerica Strategic Bond Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued) The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2016 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant Quoted Prices Observable Inputs Unobservable Inputs Total --------------------- ----------------- ---------------------- ------------ ASSETS: Investments at Value:* Asset Backed Securities: Diversified Financial Services......... $ -- $ 7,789,750 $ 347,983 $ 8,137,733 U.S. Corporate Bonds & Notes: Airlines............................... -- 1,155,929 260,902 1,416,831 Finance-Investment Banker/Broker....... -- 208,402 64 208,466 Gambling (Non-Hotel)................... -- 1,694,025 5,880 1,699,905 Mining................................. -- -- 15,000 15,000 Rubber/Plastic Products................ -- 356,250 0 356,250 Other Industries....................... -- 153,624,093 -- 153,624,093 Foreign Corporate Bonds & Notes: Special Purpose Entity................. -- -- 0 0 Other Industries....................... -- 60,457,384 -- 60,457,384 Foreign Government Obligation............ -- 31,976,093 -- 31,976,093 U.S. Government Agencies................. -- 105,770,372 -- 105,770,372 U.S. Government Treasuries............... -- 5,133,211 -- 5,133,211 Loans.................................... -- 1,814,394 -- 1,814,394 Municipal Bonds & Notes.................. -- 589,184 -- 589,184 Common Stocks............................ -- -- 792,530 792,530 Preferred Securities..................... 680,134 -- -- 680,134 Preferred Securities/Capital Securities: Finance-Investment Banker/Broker....... -- -- 22 22 Other Industries....................... -- 10,236,599 -- 10,236,599 Short-Term Investment Securities......... -- 21,164,000 -- 21,164,000 Repurchase Agreements.................... -- 1,203,000 -- 1,203,000 -------- ------------ ---------- ------------ Total Investments at Value............... $680,134 $403,172,686 $1,422,381 $405,275,201 ======== ============ ========== ============ Other Financial Instruments:+ Forward Foreign Currency Contracts....... $ -- $ 95,102 $ -- $ 95,102 ======== ============ ========== ============ LIABILITIES: Other Financial Instruments:+ Forward Foreign Currency Contracts....... $ -- $ 14,817 $ -- $ 14,817 ======== ============ ========== ============
-------- * For a detailed presentation of investments, please refer to the Portfolio of Investments. + Other financial instruments are derivative instruments, not reflected in the Portfolio of Investments, such as futures, forward, swap and written option contracts, which are valued at the unrealized appreciation (depreciation) on the instrument. The Fund's policy is to recognize transfers between Levels as of the end of the reporting period. There were no material transfers between Levels during the reporting period. At the beginning and end of the reporting period, Level 3 investments were not considered a material portion of the Fund. See Notes to Financial Statements 47 SunAmerica Flexible Credit Fund PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited) Industry Allocation* Cable/Satellite TV........................... 4.7% Oil Companies-Exploration & Production....... 4.6 Medical-Hospitals............................ 4.3 Broadcast Services/Program................... 2.7 Telephone-Integrated......................... 2.2 Casino Hotels................................ 2.0 Medical-Drugs................................ 1.9 Independent Power Producers.................. 1.9 Building-Residential/Commercial.............. 1.8 Commercial Services.......................... 1.7 Data Processing/Management................... 1.7 Diversified Financial Services............... 1.7 Hotels/Motels................................ 1.6 Pipelines.................................... 1.6 Containers-Paper/Plastic..................... 1.6 Cellular Telecom............................. 1.5 Auto/Truck Parts & Equipment-Original........ 1.5 Telecom Services............................. 1.4 Containers-Metal/Glass....................... 1.4 Enterprise Software/Service.................. 1.4 Gambling (Non-Hotel)......................... 1.4 Aerospace/Defense-Equipment.................. 1.3 Distribution/Wholesale....................... 1.3 Airlines..................................... 1.3 Applications Software........................ 1.2 Real Estate Investment Trusts................ 1.2 Finance-Leasing Companies.................... 1.2 Building & Construction Products-Misc........ 1.1 Chemicals-Diversified........................ 1.1 Machinery-General Industrial................. 1.1 Real Estate Management/Services.............. 1.1 Chemicals-Specialty.......................... 1.1 Building Products-Cement..................... 1.0 Finance-Auto Loans........................... 1.0 Educational Software......................... 1.0 Food-Misc./Diversified....................... 1.0 Exchange-Traded Funds........................ 0.9 Computer Services............................ 0.9 Medical Labs & Testing Services.............. 0.9 Food-Retail.................................. 0.9 Television................................... 0.8 Electric-Integrated.......................... 0.8 Oil & Gas Drilling........................... 0.8 Commercial Services-Finance.................. 0.8 Consumer Products-Misc....................... 0.8 Diversified Minerals......................... 0.7 Computers-Periphery Equipment................ 0.7 Medical Products............................. 0.7 Finance-Other Services....................... 0.7 Oil Refining & Marketing..................... 0.7 Diversified Banking Institutions............. 0.7 Building & Construction-Misc................. 0.6 Finance-Consumer Loans....................... 0.6 Dialysis Centers............................. 0.6 Sovereign.................................... 0.6 Steel-Producers.............................. 0.6 Computers-Integrated Systems................. 0.6 Electronic Components-Semiconductors......... 0.6 Semiconductor Components-Integrated Circuits. 0.6 Oil-Field Services........................... 0.5 Extended Service Contracts................... 0.5
Security Services...................... 0.5% Racetracks............................. 0.5 Leisure Games.......................... 0.5 Finance-Mortgage Loan/Banker........... 0.5 Investment Companies................... 0.5 Retail-Drug Store...................... 0.5 MRI/Medical Diagnostic Imaging......... 0.4 Medical-Outpatient/Home Medical........ 0.4 Food-Baking............................ 0.4 Retail-Arts & Crafts................... 0.4 Schools................................ 0.4 Banks-Super Regional................... 0.4 Oil Companies-Integrated............... 0.4 Medical-HMO............................ 0.4 Retail-Auto Parts...................... 0.4 Building Products-Wood................. 0.4 Diversified Manufacturing Operations... 0.4 Investment Management/Advisor Services. 0.4 Diagnostic Equipment................... 0.4 Electric-Generation.................... 0.4 Paper & Related Products............... 0.4 Banks-Mortgage......................... 0.4 Food-Dairy Products.................... 0.4 Specified Purpose Acquisitions......... 0.4 Physicians Practice Management......... 0.4 Metal Processors & Fabrication......... 0.3 Auction Houses/Art Dealers............. 0.3 Retail-Restaurants..................... 0.3 Private Equity......................... 0.3 Radio.................................. 0.3 Diagnostic Kits........................ 0.3 Disposable Medical Products............ 0.3 Professional Sports.................... 0.3 Human Resources........................ 0.3 Auto-Heavy Duty Trucks................. 0.3 Miscellaneous Manufacturing............ 0.3 Food-Confectionery..................... 0.3 Computers.............................. 0.3 Non-Hazardous Waste Disposal........... 0.3 Resorts/Theme Parks.................... 0.3 Insurance-Multi-line................... 0.3 Retail-Leisure Products................ 0.3 Food-Catering.......................... 0.3 Publishing-Books....................... 0.3 Gas-Distribution....................... 0.3 Cosmetics & Toiletries................. 0.3 Insurance-Property/Casualty............ 0.2 Special Purpose Entities............... 0.2 Metal-Diversified...................... 0.2 Medical-Wholesale Drug Distribution.... 0.2 Energy-Alternate Sources............... 0.2 Machinery-Farming...................... 0.2 Apparel Manufacturers.................. 0.2 Rubber/Plastic Products................ 0.2 Machinery-Pumps........................ 0.2 Satellite Telecom...................... 0.2 Medical-Generic Drugs.................. 0.2 Rental Auto/Equipment.................. 0.2 Bicycle Manufacturing.................. 0.2 Chemicals-Plastics..................... 0.2 Metal-Copper........................... 0.2
48 SunAmerica Flexible Credit Fund PORTFOLIO PROFILE -- September 30, 2016 -- (unaudited) (continued) Industry Allocation* (continued) Casino Services.......................... 0.2% Alternative Waste Technology............. 0.2 Food-Flour & Grain....................... 0.2 Medical-Biomedical/Gene.................. 0.2 Retail-Misc./Diversified................. 0.2 Metal-Aluminum........................... 0.2 Consulting Services...................... 0.2 Retail-Hypermarkets...................... 0.2 Retail-Building Products................. 0.2 Retail-Pet Food & Supplies............... 0.2 Research & Development................... 0.2 Retail-Perfume & Cosmetics............... 0.2 Financial Guarantee Insurance............ 0.2 Metal-Iron............................... 0.2 Theaters................................. 0.1 Filtration/Separation Products........... 0.1 Bloodstock Services...................... 0.1 Retail-Major Department Stores........... 0.1 Home Decoration Products................. 0.1 Medical Information Systems.............. 0.1 Electric Products-Misc................... 0.1 Semiconductor Equipment.................. 0.1 Auto/Truck Parts & Equipment-Replacement. 0.1 Advertising Services..................... 0.1 Finance-Commercial....................... 0.1 Health Care Providers & Services......... 0.1 ----- 103.1% =====
Credit Quality+# Aaa........... 0.3% Baa........... 3.1 Ba............ 39.1 B............. 42.3 Caa........... 9.0 Ca............ 0.1 Not Rated@.... 6.1 ----- 100.0% =====
-------- *Calculated as a percentage of net assets +Source: Moody's #Calculated as a percentage of total debt issues, excluding short-term securities. @Represents debt issues that either have no rating, or the rating is unavailable from the data source. 49 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited)
Principal Value Security Description Amount (Note 2) ASSET BACKED SECURITIES -- 1.7% Diversified Financial Services -- 1.7% GLS Auto Receivables Trust 9.79% due 10/15/2025(2)................ $ 340,000 $ 347,069 Home Equity Loan Trust VRS Series 2007-HSA3, Class AI4 6.11% due 06/25/2037................... 1,105,738 1,112,464 JP Morgan Chase Commercial Mtg. Securities Trust Series 2013-C16, Class A2 3.07% due 12/15/2046................... 1,097,942 1,128,253 JPMBB Commercial Mtg. Securities Trust Series 2014-C19, Class A2 3.05% due 04/15/2047................... 2,110,000 2,185,204 Leaf Receivables Funding 10 LLC Series 2015-1, Class E2 6.00% due 06/15/2023*.................. 590,000 578,059 Leaf Receivables Funding 11 LLC Series 2016-1, Class E2 6.00% due 06/15/2024*.................. 290,000 270,372 ---------- Total Asset Backed Securities (cost $5,593,459)...................... 5,621,421 ---------- U.S. CORPORATE BONDS & NOTES -- 33.4% Aerospace/Defense-Equipment -- 0.5% Transdigm, Inc. Company Guar. Notes 6.50% due 05/15/2025................... 1,530,000 1,593,112 ---------- Airlines -- 0.2% US Airways Pass Through Trust Series 2012-2 Class C 5.45% due 06/03/2018................... 500,000 512,500 ---------- Alternative Waste Technology -- 0.2% Advanced Disposal Services, Inc. Company Guar. Notes 8.25% due 10/01/2020................... 620,000 651,000 ---------- Apparel Manufacturers -- 0.2% Hanesbrands, Inc. Company Guar. Notes 4.63% due 05/15/2024*.................. 235,000 241,169 Hanesbrands, Inc. Company Guar. Notes 4.88% due 05/15/2026*.................. 480,000 490,800 ---------- 731,969 ---------- Applications Software -- 0.1% Emdeon, Inc. Company Guar. Notes 11.00% due 12/31/2019.................. 420,000 442,050 ---------- Auto/Truck Parts & Equipment-Original -- 0.5% MPG Holdco I, Inc. Company Guar. Notes 7.38% due 10/15/2022................... 340,000 347,650 Tenneco, Inc. Company Guar. Notes 5.00% due 07/15/2026................... 605,000 612,562 TI Group Automotive Systems, LLC Senior Notes 8.75% due 07/15/2023*.................. 570,000 619,875 ---------- 1,580,087 ----------
Principal Value Security Description Amount (Note 2) Auto/Truck Parts & Equipment-Replacement -- 0.1% Allison Transmission, Inc. Company Guar. Notes 5.00% due 10/01/2024*.................. $ 240,000 $ 246,000 ---------- Banks-Mortgage -- 0.4% Provident Funding Associates LP/PFG Finance Corp. Company Guar. Notes 6.75% due 06/15/2021*.................. 1,205,000 1,215,544 ---------- Broadcast Services/Program -- 0.6% Clear Channel Worldwide Holdings, Inc. Company Guar. Notes 7.63% due 03/15/2020................... 1,535,000 1,521,569 iHeartCommunications, Inc. Senior Sec. Notes 9.00% due 12/15/2019................... 640,000 506,400 ---------- 2,027,969 ---------- Building & Construction Products-Misc. -- 0.4% NCI Building Systems, Inc. Company Guar. Notes 8.25% due 01/15/2023*.................. 585,000 636,188 Standard Industries, Inc. Senior Notes 5.50% due 02/15/2023*.................. 215,000 224,675 Standard Industries, Inc. Senior Notes 6.00% due 10/15/2025*.................. 565,000 604,550 ---------- 1,465,413 ---------- Building Products-Cement -- 0.1% Cemex Finance LLC Senior Sec. Notes 6.00% due 04/01/2024*.................. 490,000 502,250 ---------- Building Products-Wood -- 0.4% Boise Cascade Co. Company Guar. Notes 5.63% due 09/01/2024*.................. 640,000 649,600 Masco Corp. Senior Notes 3.50% due 04/01/2021................... 690,000 714,150 ---------- 1,363,750 ---------- Building-Residential/Commercial -- 1.8% Beazer Homes USA, Inc. Company Guar. Notes 5.75% due 06/15/2019................... 310,000 322,400 Beazer Homes USA, Inc. Company Guar. Notes 8.75% due 03/15/2022*.................. 265,000 279,575 Lennar Corp. Company Guar. Notes 4.50% due 11/15/2019................... 355,000 374,081 Lennar Corp. Company Guar. Notes 4.88% due 12/15/2023................... 620,000 635,500 M/I Homes, Inc. Company Guar. Notes 6.75% due 01/15/2021................... 475,000 497,562 MDC Holdings, Inc. Company Guar. Notes 5.50% due 01/15/2024................... 755,000 788,975
50 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Building-Residential/Commercial (continued) PulteGroup, Inc. Company Guar. Notes 5.50% due 03/01/2026........................ $ 675,000 $ 708,750 Toll Brothers Finance Corp. Company Guar. Notes 4.88% due 11/15/2025........................ 1,280,000 1,312,000 TRI Pointe Group Inc./TRI Pointe Homes Inc. Company Guar. Notes 5.88% due 06/15/2024........................ 835,000 868,400 TRI Pointe Holdings, Inc. Company Guar. Notes 4.38% due 06/15/2019........................ 230,000 236,613 ---------- 6,023,856 ---------- Cable/Satellite TV -- 1.9% CCO Holdings LLC/CCO Holdings Capital Corp. Senior Notes 5.50% due 05/01/2026*....................... 445,000 463,913 Cequel Communications Holdings I LLC/Cequel Capital Corp. Senior Notes 5.13% due 12/15/2021*....................... 570,000 568,581 CSC Holdings LLC Senior Notes 5.25% due 06/01/2024........................ 595,000 565,250 CSC Holdings LLC Company Guar. Notes 5.50% due 04/15/2027*....................... 580,000 593,050 CSC Holdings LLC Company Guar. Notes 6.63% due 10/15/2025*....................... 540,000 585,900 CSC Holdings LLC Senior Notes 10.13% due 01/15/2023*...................... 350,000 403,375 DISH DBS Corp. Company Guar. Notes 6.75% due 06/01/2021........................ 1,320,000 1,425,600 DISH DBS Corp. Company Guar. Notes 7.75% due 07/01/2026*....................... 960,000 1,020,000 RCN Telecom Services LLC/RCN Capital Corp. Senior Notes 8.50% due 08/15/2020*....................... 810,000 863,662 ---------- 6,489,331 ---------- Casino Hotels -- 1.0% Boyd Gaming Corp. Company Guar. Notes 6.88% due 05/15/2023........................ 520,000 562,900 Caesars Entertainment Resort Properties LLC Senior Sec. Notes 8.00% due 10/01/2020........................ 265,000 273,944 Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. Sec. Notes 9.38% due 05/01/2022........................ 1,290,000 1,377,075
Principal Value Security Description Amount (Note 2) Casino Hotels (continued) MGM Resorts International Company Guar. Notes 4.63% due 09/01/2026.............. $1,085,000 $1,057,875 ---------- 3,271,794 ---------- Cellular Telecom -- 1.3% Sprint Communications, Inc. Senior Notes 6.00% due 11/15/2022.............. 985,000 913,588 Sprint Corp. Company Guar. Notes 7.25% due 09/15/2021.............. 615,000 617,306 Sprint Corp. Company Guar. Notes 7.88% due 09/15/2023.............. 1,050,000 1,056,562 T-Mobile USA, Inc. Company Guar. Notes 6.50% due 01/15/2026.............. 780,000 862,875 T-Mobile USA, Inc. Company Guar. Notes 6.73% due 04/28/2022.............. 955,000 1,002,750 ---------- 4,453,081 ---------- Coatings/Paint -- 0.0% Axalta Coating Systems LLC Company Guar. Notes 4.88% due 08/15/2024*............. 150,000 153,656 ---------- Computer Services -- 0.2% Harland Clarke Holdings Corp. Senior Sec. Notes 6.88% due 03/01/2020*............. 350,000 334,250 Harland Clarke Holdings Corp. Senior Notes 9.25% due 03/01/2021*............. 400,000 340,000 ---------- 674,250 ---------- Computers -- 0.3% Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 5.45% due 06/15/2023*............. 155,000 166,076 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 6.02% due 06/15/2026*............. 110,000 120,593 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Company Guar. Notes 7.13% due 06/15/2024*............. 340,000 373,948 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 8.10% due 07/15/2036*............. 140,000 164,576 Diamond 1 Finance Corp./Diamond 2 Finance Corp. Senior Sec. Notes 8.35% due 07/15/2046*............. 115,000 137,696 ---------- 962,889 ----------
51 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Containers-Paper/Plastic -- 0.8% Berry Plastics Corp. Sec. Notes 5.13% due 07/15/2023.................. $ 990,000 $1,004,850 Graphic Packaging International, Inc. Company Guar. Notes 4.13% due 08/15/2024.................. 820,000 826,150 Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC Senior Sec. Notes 5.13% due 07/15/2023*................. 635,000 655,637 Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC Company Guar. Notes 7.00% due 07/15/2024*................. 40,000 42,900 ---------- 2,529,537 ---------- Data Processing/Management -- 0.2% First Data Corp. Senior Sec. Notes 5.00% due 01/15/2024*................. 685,000 695,275 ---------- Diagnostic Kits -- 0.2% Alere, Inc. Company Guar. Notes 6.50% due 06/15/2020.................. 600,000 600,000 ---------- Disposable Medical Products -- 0.2% Sterigenics-Nordion Holdings LLC Senior Notes 6.50% due 05/15/2023*................. 720,000 748,800 ---------- Electric Products-Misc. -- 0.1% WESCO Distribution, Inc. Company Guar. Notes 5.38% due 06/15/2024*................. 260,000 260,650 ---------- Electric-Integrated -- 0.0% Texas Competitive Electric Holdings Co. LLC/TCEH Finance, Inc. Senior Sec. Notes 11.50% due 10/01/2020+*(3)(4)......... 295,000 89,975 ---------- Energy-Alternate Sources -- 0.2% TerraForm Power Operating LLC Company Guar. Notes 9.38% due 02/01/2023*................. 760,000 780,900 ---------- Enterprise Software/Service -- 0.1% Infor US, Inc. Company Guar. Notes 6.50% due 05/15/2022.................. 475,000 480,938 ---------- Finance-Auto Loans -- 1.0% Ally Financial, Inc. Senior Notes 4.13% due 03/30/2020.................. 1,910,000 1,943,425 Ally Financial, Inc. Senior Notes 4.25% due 04/15/2021.................. 700,000 713,125 Ally Financial, Inc. Sub. Notes 5.75% due 11/20/2025.................. 700,000 732,375 ---------- 3,388,925 ----------
Principal Value Security Description Amount (Note 2) Finance-Consumer Loans -- 0.6% Navient Corp. Senior Notes 7.25% due 09/25/2023................... $ 205,000 $ 205,000 Springleaf Finance Corp. Company Guar. Notes 5.25% due 12/15/2019................... 1,390,000 1,419,537 TMX Finance LLC/TitleMax Finance Corp. Senior Sec. Notes 8.50% due 09/15/2018*.................. 600,000 447,000 ---------- 2,071,537 ---------- Finance-Other Services -- 0.2% Double Eagle Acquisition Sub, Inc. Senior Notes 7.50% due 10/01/2024*.................. 270,000 274,725 Nationstar Mtg. LLC/Nationstar Capital Corp. Company Guar. Notes 6.50% due 07/01/2021................... 415,000 406,700 ---------- 681,425 ---------- Food-Flour & Grain -- 0.2% Post Holdings, Inc. Company Guar. Notes 5.00% due 08/15/2026*.................. 650,000 646,750 ---------- Food-Misc./Diversified -- 0.2% Dole Food Co, Inc. Senior Sec. Notes 7.25% due 05/01/2019*.................. 450,000 456,750 Pinnacle Foods Finance LLC/Pinnacle Foods Finance Corp. Company Guar. Notes 5.88% due 01/15/2024*.................. 130,000 138,775 ---------- 595,525 ---------- Food-Retail -- 0.5% Albertsons Cos. LLC/Safeway, Inc. Senior Notes 5.75% due 03/15/2025*.................. 785,000 783,037 Safeway, Inc. Senior Notes 7.25% due 02/01/2031................... 760,000 754,300 ---------- 1,537,337 ---------- Food-Wholesale/Distribution -- 0.0% US Foods, Inc. Company Guar. Notes 5.88% due 06/15/2024*.................. 145,000 150,438 ---------- Gambling (Non-Hotel) -- 0.4% Mohegan Tribal Gaming Authority Company Guar. Notes 9.75% due 09/01/2021................... 560,000 604,100 Scientific Games International, Inc. Senior Sec. Notes 7.00% due 01/01/2022*.................. 565,000 597,488 ---------- 1,201,588 ----------
52 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Gas-Distribution -- 0.3% NGL Energy Partners LP/NGL Energy Finance Corp Company Guar. Notes 5.13% due 07/15/2019.................. $ 935,000 $ 878,900 ---------- Home Decoration Products -- 0.1% Newell Brands, Inc. Senior Notes 5.00% due 11/15/2023*................. 295,000 314,076 ---------- Hotels/Motels -- 0.0% Diamond Resorts International, Inc. Senior Sec. Notes 7.75% due 09/01/2023*................. 90,000 90,113 ---------- Human Resources -- 0.1% AMN Healthcare, Inc. Company Guar. Notes 5.13% due 10/01/2024*................. 245,000 247,450 Team Health, Inc. Company Guar. Notes 7.25% due 12/15/2023*................. 65,000 69,956 ---------- 317,406 ---------- Independent Power Producers -- 1.0% Calpine Corp. Senior Notes 5.38% due 01/15/2023.................. 727,000 724,274 Dynegy, Inc. Company Guar. Notes 7.38% due 11/01/2022.................. 1,260,000 1,244,250 NRG Energy, Inc. Company Guar. Notes 7.25% due 05/15/2026*................. 630,000 641,025 NRG Yield Operating LLC Company Guar. Notes 5.38% due 08/15/2024.................. 665,000 683,287 ---------- 3,292,836 ---------- Insurance-Multi-line -- 0.1% Genworth Holdings, Inc. Company Guar. Notes 4.90% due 08/15/2023.................. 400,000 333,000 ---------- Medical Information Systems -- 0.1% Quintiles IMS, Inc. Company Guar. Notes 5.00% due 10/15/2026*................. 300,000 312,000 ---------- Medical Labs & Testing Services -- 0.2% inVentiv Health, Inc. Senior Sec. Notes 9.00% due 01/15/2018*................. 415,000 426,153 Quorum Health Corp. Company Guar. Notes 11.63% due 04/15/2023*................ 385,000 319,550 ---------- 745,703 ---------- Medical Products -- 0.3% Fredenius US Finance II, Inc. Company Guar. Notes 4.50% due 01/15/2023*................. 190,000 198,075
Principal Value Security Description Amount (Note 2) Medical Products (continued) Teleflex, Inc. Company Guar. Notes 4.88% due 06/01/2026........................ $ 740,000 $ 765,900 ---------- 963,975 ---------- Medical-Drugs -- 0.6% Endo Finance LLC/Endo Finco, Inc. Company Guar. Notes 5.38% due 01/15/2023*....................... 460,000 407,100 PRA Holdings, Inc. Senior Notes 9.50% due 10/01/2023*....................... 421,000 463,100 Quintiles Transnational Corp. Company Guar. Notes 4.88% due 05/15/2023*....................... 510,000 524,025 Valeant Pharmaceuticals International, Inc. Company Guar. Notes 7.25% due 07/15/2022*....................... 295,000 273,613 Valeant Pharmaceuticals International, Inc. Company Guar. Notes 6.38% due 10/15/2020*....................... 505,000 473,437 ---------- 2,141,275 ---------- Medical-HMO -- 0.3% Centene Corp. Senior Notes 4.75% due 05/15/2022........................ 280,000 289,100 Centene Corp. Senior Notes 5.63% due 02/15/2021........................ 570,000 604,200 MPH Acquisition Holdings LLC Senior Notes 7.13% due 06/01/2024*....................... 75,000 80,625 ---------- 973,925 ---------- Medical-Hospitals -- 2.5% CHS/Community Health Systems, Inc. Senior Sec. Notes 5.13% due 08/15/2018........................ 82,000 82,820 CHS/Community Health Systems, Inc. Company Guar. Notes 6.88% due 02/01/2022........................ 1,025,000 881,500 HCA, Inc. Senior Sec. Notes 4.50% due 02/15/2027........................ 775,000 779,844 HCA, Inc. Senior Sec. Notes 5.25% due 06/15/2026........................ 490,000 520,625 HCA, Inc. Company Guar. Notes 5.38% due 02/01/2025........................ 1,000,000 1,032,500 HCA, Inc. Senior Sec. Notes 6.50% due 02/15/2020........................ 1,345,000 1,489,587 Surgery Center Holdings, Inc. Company Guar. Notes 8.88% due 04/15/2021*....................... 420,000 448,350 Tenet Healthcare Corp. FRS Senior Sec. Notes 4.35% due 06/15/2020........................ 315,000 316,606
53 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Medical-Hospitals (continued) Tenet Healthcare Corp. Senior Notes 5.00% due 03/01/2019.................. $ 760,000 $ 742,900 Tenet Healthcare Corp. Senior Sec. Notes 6.00% due 10/01/2020.................. 750,000 793,125 Tenet Healthcare Corp. Senior Notes 8.13% due 04/01/2022.................. 730,000 730,000 Universal Health Services, Inc. Senior Sec. Notes 4.75% due 08/01/2022*................. 235,000 242,638 Universal Health Services, Inc. Senior Sec. Notes 5.00% due 06/01/2026*................. 245,000 255,106 ---------- 8,315,601 ---------- Metal Processors & Fabrication -- 0.3% Novelis Corp. Company Guar. Notes 5.88% due 09/30/2026*................. 1,015,000 1,039,106 Novelis Corp. Company Guar. Notes 6.25% due 08/15/2024*................. 90,000 95,513 ---------- 1,134,619 ---------- Metal-Aluminum -- 0.2% Aleris International, Inc. Senior Sec. Notes 9.50% due 04/01/2021*................. 570,000 614,175 ---------- Metal-Copper -- 0.2% Freeport-McMoRan Copper & Gold, Inc. Company Guar. Notes 3.88% due 03/15/2023.................. 300,000 269,226 Freeport-McMoRan, Inc. Company Guar. Notes 3.55% due 03/01/2022.................. 445,000 404,950 ---------- 674,176 ---------- MRI/Medical Diagnostic Imaging -- 0.2% Surgical Care Affiliates, Inc. Company Guar. Notes 6.00% due 04/01/2023*................. 734,000 770,700 ---------- Oil & Gas Drilling -- 0.3% Helmerich & Payne International Drilling Co. Company Guar. Notes 4.65% due 03/15/2025.................. 375,000 395,732 Rowan Cos., Inc. Company Guar. Notes 5.40% due 12/01/2042.................. 870,000 578,550 ---------- 974,282 ---------- Oil Companies-Exploration & Production -- 3.4% Antero Resources Corp. Company Guar. Notes 5.38% due 11/01/2021.................. 130,000 131,463 Antero Resources Corp. Company Guar. Notes 5.63% due 06/01/2023.................. 190,000 193,563
Principal Value Security Description Amount (Note 2) Oil Companies-Exploration & Production (continued) Antero Resources Corp. Company Guar. Notes 6.00% due 12/01/2020............... $ 350,000 $ 361,704 Bonanza Creek Energy, Inc. Company Guar. Notes 6.75% due 04/15/2021............... 425,000 193,375 Callon Petroleum Co Company Guar. Notes 6.13% due 10/01/2024*.............. 390,000 403,650 Carrizo Oil & Gas, Inc. Company Guar. Notes 6.25% due 04/15/2023............... 1,550,000 1,534,500 Chesapeake Energy Corp. Company Guar. Notes 5.75% due 03/15/2023............... 220,000 187,000 Chesapeake Energy Corp. Company Guar. Notes 6.63% due 08/15/2020............... 200,000 188,250 Continental Resources, Inc. Company Guar. Notes 4.50% due 04/15/2023............... 420,000 403,200 Continental Resources, Inc. Company Guar. Notes 5.00% due 09/15/2022............... 695,000 693,262 Diamondback Energy, Inc. Company Guar. Notes 7.63% due 10/01/2021............... 570,000 604,200 EP Energy LLC/Everest Acquisition Finance, Inc. Company Guar. Notes 9.38% due 05/01/2020............... 964,000 682,030 Laredo Petroleum, Inc. Company Guar. Notes 5.63% due 01/15/2022............... 470,000 455,900 Newfield Exploration Co. Senior Notes 5.38% due 01/01/2026............... 635,000 636,587 Newfield Exploration Co. Senior Notes 5.75% due 01/30/2022............... 590,000 609,175 Parsley Energy LLC/Parsley Finance Corp. Company Guar. Notes 6.25% due 06/01/2024*.............. 1,380,000 1,424,850 QEP Resources, Inc. Senior Notes 5.25% due 05/01/2023............... 930,000 916,050 Range Resources Corp. Company Guar. Notes 5.00% due 03/15/2023*.............. 955,000 933,512 SM Energy Co. Senior Notes 6.13% due 11/15/2022............... 340,000 340,000 Whiting Petroleum Corp. Company Guar. Notes 5.75% due 03/15/2021............... 720,000 673,200 ----------- 11,565,471 -----------
54 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Oil Refining & Marketing -- 0.7% Cheniere Corpus Christi Holdings LLC Senior Sec. Notes 7.00% due 06/30/2024*......................... $ 415,000 $ 448,200 Sunoco LP/Sunoco Finance Corp. Company Guar. Notes 6.38% due 04/01/2023*......................... 1,755,000 1,803,262 ---------- 2,251,462 ---------- Oil-Field Services -- 0.1% FTS International, Inc. FRS Senior Sec. Notes 8.35% due 06/15/2020*......................... 475,000 403,465 ---------- Physicians Practice Management -- 0.2% MEDNAX, Inc. Company Guar. Notes 5.25% due 12/01/2023*......................... 620,000 651,775 ---------- Pipelines -- 1.6% Antero Midstream Partners LP/Antero Midstream Finance Corp. Company Guar. Notes 5.38% due 09/15/2024*......................... 370,000 374,625 Blue Racer Midstream LLC/Blue Racer Finance Corp. Company Guar. Notes 6.13% due 11/15/2022*......................... 875,000 855,312 Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp. Company Guar. Notes 6.25% due 04/01/2023.......................... 600,000 607,500 Enbridge Energy Partners LP Senior Notes 4.38% due 10/15/2020.......................... 125,000 131,831 Energy Transfer Equity LP Senior Sec. Notes 7.50% due 10/15/2020.......................... 571,000 626,672 EnLink Midstream Partners LP Senior Notes 4.85% due 07/15/2026.......................... 80,000 80,502 Holly Energy Partners LP/Holly Energy Finance Corp. Company Guar. Notes 6.00% due 08/01/2024*......................... 100,000 103,500 MPLX LP Company Guar. Notes 4.88% due 12/01/2024.......................... 830,000 858,491 Regency Energy Partners LP/Regency Energy Finance Corp. Company Guar. Notes 5.00% due 10/01/2022.......................... 630,000 664,932 Sabine Pass Liquefaction LLC Senior Sec. Notes 5.63% due 02/01/2021.......................... 700,000 739,375 Sabine Pass Liquefaction LLC Senior Sec. Notes 6.25% due 03/15/2022.......................... 200,000 218,500 ---------- 5,261,240 ----------
Principal Value Security Description Amount (Note 2) Private Equity -- 0.3% Icahn Enterprises LP/Icahn Enterprises Finance Corp. Company Guar. Notes 5.88% due 02/01/2022.................... $1,120,000 $1,075,200 ---------- Racetracks -- 0.2% GLP Capital LP/GLP Financing II, Inc. Company Guar. Notes 4.88% due 11/01/2020.................... 610,000 657,275 ---------- Radio -- 0.3% Sirius XM Radio, Inc. Company Guar. Notes 5.38% due 07/15/2026*................... 1,035,000 1,063,463 ---------- Real Estate Investment Trusts -- 0.9% Corrections Corp. of America Company Guar. Notes 5.00% due 10/15/2022.................... 615,000 556,575 ESH Hospitality, Inc. Company Guar. Notes 5.25% due 05/01/2025*................... 780,000 779,025 iStar Financial, Inc. Senior Notes 5.00% due 07/01/2019.................... 1,000,000 997,380 MGP Escrow Issuer LLC/MGP Escrow Co-Issuer, Inc. Company Guar. Notes 5.63% due 05/01/2024*................... 280,000 303,716 MPT Operating Partnership LP/MPT Finance Corp. Company Guar. Notes 5.25% due 08/01/2026.................... 50,000 51,875 MPT Operating Partnership LP/MPT Finance Corp. Company Guar. Notes 6.38% due 03/01/2024.................... 315,000 341,775 ---------- 3,030,346 ---------- Rental Auto/Equipment -- 0.2% United Rentals North America, Inc. Company Guar. Notes 5.50% due 07/15/2025.................... 675,000 688,500 ---------- Resort/Theme Parks -- 0.2% Six Flags Entertainment Corp. Company Guar. Notes 4.88% due 07/31/2024*................... 600,000 606,000 ---------- Retail-Drug Store -- 0.3% Rite Aid Corp. Company Guar. Notes 6.13% due 04/01/2023*................... 130,000 140,292 Rite Aid Corp. Company Guar. Notes 6.75% due 06/15/2021.................... 730,000 771,063 ---------- 911,355 ---------- Retail-Hypermarkets -- 0.2% Tops Holding LLC /Tops Markets II Corp. Senior Sec. Notes 8.00% due 06/15/2022*................... 670,000 603,000 ----------
55 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) U.S. CORPORATE BONDS & NOTES (continued) Retail-Perfume & Cosmetics -- 0.2% Sally Holdings LLC/Sally Capital, Inc. Company Guar. Notes 5.63% due 12/01/2025....................... $ 500,000 $ 538,125 ---------- Retail-Propane Distribution -- 0.0% AmeriGas Finance LLC/AmeriGas Finance Corp. Company Guar. Notes 7.00% due 05/20/2022....................... 145,000 153,338 ---------- Retail-Restaurants -- 0.3% Landry's, Inc. Senior Notes 6.75% due 10/15/2024*...................... 340,000 345,950 Landry's, Inc. Company Guar. Notes 9.38% due 05/01/2020*...................... 700,000 734,195 ---------- 1,080,145 ---------- Rubber/Plastic Products -- 0.0% Venture Holdings Co. LLC Company Guar. Notes 11.00% due 06/01/2007+(1)(2)(3)(5)......... 550,000 0 ---------- Security Services -- 0.5% ADT Corp. Senior Sec. Notes 6.25% due 10/15/2021....................... 845,000 918,937 Prime Security Services Borrower LLC/Prime Finance, Inc. Sec. Notes 9.25% due 05/15/2023*...................... 785,000 855,650 ---------- 1,774,587 ---------- Specified Purpose Acquisitions -- 0.4% Argos Merger Sub, Inc. Senior Notes 7.13% due 03/15/2023*...................... 1,135,000 1,188,913 ---------- Steel-Producers -- 0.2% AK Steel Corp. Senior Sec. Notes 7.50% due 07/15/2023....................... 495,000 527,175 United States Steel Corp. Senior Notes 7.38% due 04/01/2020....................... 76,000 75,620 ---------- 602,795 ---------- Telecom Services -- 0.1% Qwest Corp. Senior Notes 7.25% due 09/15/2025....................... 415,000 454,146 ---------- Telephone-Integrated -- 1.1% CenturyLink, Inc. Senior Notes 5.80% due 03/15/2022....................... 620,000 635,500 CenturyLink, Inc. Senior Notes 7.50% due 04/01/2024....................... 1,020,000 1,088,850 Frontier Communications Corp. Senior Notes 6.25% due 09/15/2021....................... 495,000 475,819
Principal Value Security Description Amount (Note 2) Telephone-Integrated (continued) Frontier Communications Corp. Senior Notes 10.50% due 09/15/2022........... $ 110,000 $ 116,600 Level 3 Financing, Inc. Company Guar. Notes 5.25% due 03/15/2026*........... 580,000 598,850 Windstream Services LLC Company Guar. Notes 7.75% due 10/15/2020............ 805,000 819,087 ------------ 3,734,706 ------------ Television -- 0.1% Sinclair Television Group, Inc. Company Guar. Notes 5.13% due 02/15/2027*........... 300,000 293,250 ------------ Total U.S. Corporate Bonds & Notes (cost $111,095,813)............. 112,255,420 ------------ FOREIGN CORPORATE BONDS & NOTES -- 8.5% Building Products-Cement -- 0.2% Cemex SAB de CV Senior Sec. Notes 5.70% due 01/11/2025*........... 510,000 516,222 Cemex SAB de CV Senior Sec. Notes 7.75% due 04/16/2026*........... 200,000 221,900 ------------ 738,122 ------------ Cable/Satellite TV -- 1.7% Altice Financing SA Senior Sec. Notes 6.63% due 02/15/2023*........... 400,000 410,500 Altice Finco SA Senior Sec. Notes 9.88% due 12/15/2020*........... 455,000 483,438 Altice Luxembourg SA Company Guar. Notes 7.75% due 05/15/2022*........... 1,100,000 1,174,250 Numericable-SFR SA Senior Sec. Notes 6.00% due 05/15/2022*........... 1,200,000 1,224,000 Numericable-SFR SA Senior Sec. Notes 7.38% due 05/01/2026*........... 910,000 930,193 UPCB Finance VI, Ltd. Senior Sec. Notes 6.88% due 01/15/2022*........... 64,000 67,040 Virgin Media Finance PLC Company Guar. Notes 6.00% due 10/15/2024*........... 400,000 414,004 Ziggo Secured Finance BV Senior Sec. Notes 5.50% due 01/15/2027*........... 995,000 993,756 ------------ 5,697,181 ------------ Chemicals-Diversified -- 0.4% INEOS Group Holdings SA Company Guar. Notes 5.63% due 08/01/2024*........... 955,000 937,094
56 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Chemicals-Diversified (continued) INEOS Group Holdings SA Sec. Notes 5.88% due 02/15/2019*............... $450,000 $ 459,000 ---------- 1,396,094 ---------- Containers-Metal/Glass -- 0.2% Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. Company Guar. Notes 6.00% due 06/30/2021*............... 365,000 375,037 Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. Company Guar. Notes 7.25% due 05/15/2024*............... 260,000 276,900 Ardagh Packaging Finance PLC/Ardagh MP Holdings USA, Inc. Senior Notes 7.00% due 11/15/2020*............... 51,176 52,840 ---------- 704,777 ---------- Diversified Manufacturing Operations -- 0.4% Bombardier, Inc. Senior Notes 4.75% due 04/15/2019*............... 585,000 568,912 Bombardier, Inc. Senior Notes 4.75% due 04/15/2019................ 515,000 500,837 Bombardier, Inc. Senior Notes 6.13% due 01/15/2023*............... 305,000 270,688 ---------- 1,340,437 ---------- Diversified Minerals -- 0.4% FMG Resources August 2006 Pty, Ltd. Senior Sec. Notes 9.75% due 03/01/2022*............... 410,000 475,600 Teck Resources, Ltd. Company Guar. Notes 4.75% due 01/15/2022................ 600,000 588,000 Teck Resources, Ltd. Company Guar. Notes 8.00% due 06/01/2021*............... 90,000 97,875 Teck Resources, Ltd. Company Guar. Notes 8.50% due 06/01/2024*............... 240,000 274,800 ---------- 1,436,275 ---------- Finance-Commercial -- 0.1% Dana Financing Luxembourg SARL Company Guar. Notes 6.50% due 06/01/2026*............... 185,000 193,880 ---------- Finance-Leasing Companies -- 0.9% AerCap Ireland Capital, Ltd./AerCap Global Aviation Trust Company Guar. Notes 4.25% due 07/01/2020................ 170,000 176,375 AerCap Ireland Capital, Ltd./AerCap Global Aviation Trust Company Guar. Notes 4.50% due 05/15/2021................ 860,000 899,775
Principal Value Security Description Amount (Note 2) Finance-Leasing Companies (continued) AerCap Ireland Capital, Ltd./AerCap Global Aviation Trust Company Guar. Notes 4.63% due 10/30/2020........................ $ 475,000 $ 498,750 Aircastle, Ltd. Senior Notes 5.00% due 04/01/2023........................ 1,425,000 1,492,687 ---------- 3,067,587 ---------- Gambling (Non-Hotel) -- 0.3% International Game Technology PLC Senior Sec. Notes 6.25% due 02/15/2022*....................... 900,000 954,000 ---------- Machinery-Farming -- 0.2% CNH Industrial NV Senior Notes 4.50% due 08/15/2023........................ 750,000 756,375 ---------- Medical Products -- 0.1% Mallinckrodt International Finance SA/Mallinckrodt CB LLC Company Guar. Notes 5.63% due 10/15/2023*....................... 465,000 445,238 ---------- Medical-Biomedical/Gene -- 0.2% Concordia International Corp. Company Guar. Notes 7.00% due 04/15/2023*....................... 1,005,000 645,713 ---------- Medical-Drugs -- 0.4% Capsugel SA Senior Notes 7.00% due 05/15/2019*(6).................... 573,000 574,432 Valeant Pharmaceuticals International, Inc. Company Guar. Notes 5.38% due 03/15/2020*....................... 490,000 453,250 Valeant Pharmaceuticals International, Inc. Company Guar. Notes 6.75% due 08/15/2018*....................... 435,000 437,175 ---------- 1,464,857 ---------- Metal-Diversified -- 0.2% Vedanta Resources PLC Senior Notes 8.25% due 06/07/2021*....................... 800,000 808,000 ---------- Metal-Iron -- 0.2% Vale Overseas, Ltd. Company Guar. Notes 5.88% due 06/10/2021........................ 460,000 481,620 ---------- Oil & Gas Drilling -- 0.4% Transocean, Inc. Company Guar. Notes 6.80% due 12/15/2016........................ 625,000 627,931 Transocean, Inc. Company Guar. Notes 6.80% due 03/15/2038........................ 520,000 340,600 Transocean, Inc. Company Guar. Notes 9.00% due 07/15/2023*....................... 335,000 324,531 ---------- 1,293,062 ----------
57 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) FOREIGN CORPORATE BONDS & NOTES (continued) Oil Companies-Exploration & Production -- 0.4% Alberta Energy Co., Ltd. Senior Notes 8.13% due 09/15/2030............... $ 480,000 $ 567,348 Encana Corp. Senior Notes 3.90% due 11/15/2021............... 625,000 626,237 ---------- 1,193,585 ---------- Oil Companies-Integrated -- 0.4% Petrobras Global Finance BV Company Guar. Notes 8.38% due 05/23/2021............... 85,000 92,862 Petrobras Global Finance BV Company Guar. Notes 8.75% due 05/23/2026............... 600,000 663,000 YPF Sociedad Anonima Senior Notes 8.50% due 03/23/2021*.............. 580,000 647,280 ---------- 1,403,142 ---------- Oil-Field Services -- 0.1% Weatherford International, Ltd. Company Guar. Notes 8.25% due 06/15/2023............... 485,000 478,938 ---------- Paper & Related Products -- 0.4% Cascades, Inc. Company Guar. Notes 5.50% due 07/15/2022*.............. 675,000 685,969 Cascades, Inc. Company Guar. Notes 5.75% due 07/15/2023*.............. 530,000 536,625 ---------- 1,222,594 ---------- Satellite Telecom -- 0.2% Intelsat Jackson Holdings SA Company Guar. Notes 5.50% due 08/01/2023............... 240,000 166,200 Intelsat Jackson Holdings SA Company Guar. Notes 7.25% due 04/01/2019............... 695,000 559,041 ---------- 725,241 ---------- Semiconductor Components-Integrated Circuits -- 0.3% NXP BV/NXP Funding LLC Company Guar. Notes 4.13% due 06/01/2021*.............. 625,000 669,531 NXP BV/NXP Funding LLC Company Guar. Notes 4.63% due 06/01/2023*.............. 200,000 218,750 ---------- 888,281 ---------- Special Purpose Entity -- 0.0% Hellas Telecommunications Luxembourg II SCA FRS Sub. Notes 6.00% due 01/15/2015+*(1)(2)(3)(5). 1,025,000 0 ----------
Principal Value Security Description Amount (Note 2) Steel-Producers -- 0.4% ArcelorMittal Senior Notes 6.13% due 06/01/2025.......................... $ 745,000 $ 812,050 BlueScope Steel Finance, Ltd./BlueScope Steel Finance USA LLC Company Guar. Notes 6.50% due 05/15/2021*......................... 490,000 518,175 ----------- 1,330,225 ----------- Total Foreign Corporate Bonds & Notes (cost $29,127,558)............................ 28,665,224 ----------- LOANS(7)(8)(9) -- 56.5% Advertising Services -- 0.1% Advantage Sales & Marketing, Inc. FRS 2nd Lien 7.50% due 07/25/2022.......................... 258,000 244,670 ----------- Aerospace/Defense-Equipment -- 0.8% Silver II Borrower SCA FRS BTL 4.00% due 12/13/2019.......................... 900,000 840,150 TransDigm, Inc. FRS BTL 3.75% to 3.84% due 06/09/2023................. 475,117 474,721 TransDigm, Inc. FRS BTL-D 3.84% due 06/04/2021.......................... 1,469,925 1,466,710 ----------- 2,781,581 ----------- Airlines -- 1.1% Air Canada FRS BTL-B 3.50% due 09/21/2023.......................... 482,000 482,602 American Airlines, Inc. FRS BTL 3.25% due 06/27/2020.......................... 1,309,059 1,310,900 American Airlines, Inc. FRS BTL-B 3.25% due 10/10/2021.......................... 479,160 479,959 American Airlines, Inc. FRS BTL 3.50% due 04/28/2023.......................... 222,000 222,451 United Airlines, Inc. FRS BTL-B1 3.50% due 09/15/2021.......................... 1,341,608 1,342,278 ----------- 3,838,190 ----------- Applications Software -- 1.1% Deltek, Inc. FRS 1st Lien 5.00% due 06/25/2022.......................... 691,586 693,603 Deltek, Inc. FRS BTL-B 9.50% due 06/25/2023.......................... 247,000 248,852 Emdeon, Inc. FRS BTL-B2 3.75% due 11/02/2018.......................... 835,182 836,017
58 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Applications Software (continued) Mitchell International, Inc. FRS BTL 4.50% due 10/13/2020....................... $ 871,949 $ 870,424 Mitchell International, Inc. FRS 2nd Lien 8.50% due 10/11/2021....................... 160,000 155,600 SS&C European Holdings SARL FRS BTL-A1 3.27% due 07/08/2020....................... 46,922 46,453 SS&C European Holdings SARL FRS BTL-B2 4.00% due 07/08/2022....................... 93,366 94,016 SS&C Technologies Holdings Europe SARL FRS BTL-A2 3.27% due 07/08/2020....................... 72,778 72,050 SS&C Technologies, Inc. FRS BTL-B1 4.00% due 07/08/2022....................... 751,312 756,544 ---------- 3,773,559 ---------- Auction Houses/Art Dealers -- 0.3% KAR Auction Services, Inc. FRS BTL-B3 4.38% due 03/09/2023....................... 1,086,540 1,100,801 ---------- Auto-Heavy Duty Trucks -- 0.3% Navistar, Inc. FRS BTL-B 6.50% due 08/07/2020....................... 1,025,000 1,025,321 ---------- Auto/Truck Parts & Equipment-Original -- 1.0% Cooper-Standard Automotive, Inc. FRS BTL 4.00% due 04/04/2021....................... 785,930 789,040 Federal-Mogul Holdings Corp. FRS BTL-C 4.75% due 04/15/2021....................... 1,240,351 1,196,008 MPG Holdco I, Inc. FRS BTL-B 3.75% due 10/20/2021....................... 691,837 692,578 TI Group Automotive Systems LLC FRS Term B 4.50% due 06/30/2022....................... 701,910 703,372 ---------- 3,380,998 ---------- Bicycle Manufacturing -- 0.2% SRAM LLC FRS 1st Lien 4.00% to 5.50% due 04/10/2020.............. 699,025 678,055 ---------- Bloodstock Services -- 0.1% NVA Holdings, Inc. FRS 1st Lien 4.75% due 08/14/2021....................... 27,510 27,487 NVA Holdings, Inc. FRS BTL 5.50% due 08/14/2021....................... 362,180 362,633 ---------- 390,120 ----------
Principal Value Security Description Amount (Note 2) Broadcast Services/Program -- 2.1% iHeartCommunications, Inc. FRS BTL-D 7.27% due 01/30/2019.................. $1,555,000 $1,190,223 Nexstar Broadcasting, Inc. FRS BTL-B 3.00% due 09/21/2023.................. 1,505,773 1,512,669 Univision Communications, Inc. FRS BTL 4.00% due 03/01/2020.................. 3,830,339 3,833,932 Univision Communications, Inc. FRS BTL-C4 4.00% due 03/01/2020.................. 545,631 546,086 ---------- 7,082,910 ---------- Building & Construction Products-Misc. -- 0.7% Builders FirstSource, Inc. FRS BTL-B 4.75% due 08/11/2022.................. 532,898 535,340 CPG International, Inc. FRS BTL 4.75% due 09/30/2020.................. 725,649 726,556 Summit Materials Co. I LLC FRS BTL 4.00% due 07/17/2022.................. 1,039,838 1,042,763 ---------- 2,304,659 ---------- Building & Construction-Misc. -- 0.6% American Builders Contractors FRS BTL-B 3.50% due 09/23/2023.................. 261,681 262,171 Brock Holdings III, Inc. FRS 1st Lien 7.00% due 03/16/2017.................. 306,470 301,873 Floor and Decor Outlet of America FRS BTL 5.25% due 09/30/2023.................. 920,000 920,000 HD Supply, Inc. FRS BTL-B 2.75% due 10/16/2023.................. 683,000 683,569 ---------- 2,167,613 ---------- Building Products-Cement -- 0.7% Headwaters, Inc. FRS BTL-B1 4.00% due 03/24/2022.................. 1,736,513 1,740,854 Quikrete Holdings, Inc. FRS 1st Lien 4.00% due 09/28/2020.................. 600,000 603,500 ---------- 2,344,354 ---------- Building-Residential/Commercial -- 0.0% TOUSA, Inc. Escrow Loans 12.25% due 08/15/2011+(1)(2).......... 2,037,810 0 ---------- Cable/Satellite TV -- 1.1% Charter Communications Operating LLC FRS BTL 3.25% due 08/24/2021.................. 354,220 355,272
59 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Cable/Satellite TV (continued) Charter Communications Operating LLC FRS BTL 3.50% due 01/24/2023............................ $ 285,565 $ 287,231 CSC Holdings LLC FRS BTL-B 5.00% due 10/11/2024............................ 599,418 600,167 Neptune Finco Corp. FRS BTL 5.00% due 10/09/2022............................ 987,525 987,525 Virgin Media Investment Holdings, Ltd. FRS BTL-F 3.65% due 06/30/2023............................ 974,991 978,240 Ziggo Secured Finance Partnership FRS BTL-D 3.53% due 08/31/2024............................ 400,000 399,917 ---------- 3,608,352 ---------- Casino Hotels -- 1.0% Boyd Gaming Corp. FRS BTL-B2 4.00% due 09/15/2023............................ 248,000 249,364 Boyd Gaming Corp. FRS BTL-B 3.53% due 08/14/2020............................ 205,317 205,958 Caesars Entertainment Resort Properties LLC FRS BTL-B 7.00% due 10/11/2020............................ 1,005,000 998,719 CityCenter Holdings LLC FRS BTL-B 4.25% due 10/16/2020............................ 1,044,331 1,050,206 Station Casinos LLC FRS BTL-B 3.75% due 06/08/2023............................ 1,012,463 1,015,879 ---------- 3,520,126 ---------- Casino Services -- 0.2% Eldorado Resorts, Inc. FRS BTL-B 4.25% due 07/23/2022............................ 329,825 329,413 Graton Economic Development Authority FRS BTL-B 4.75% due 09/01/2022............................ 338,545 339,391 ---------- 668,804 ---------- Cellular Telecom -- 0.2% T-Mobile USA, Inc. FRS BTL-B 3.50% due 11/09/2022............................ 580,613 584,345 ---------- Chemicals-Diversified -- 0.7% Ineos US Finance LLC FRS BTL-B 3.75% due 05/04/2018............................ 1,091,556 1,093,830 Ineos US Finance LLC FRS BTL 4.25% due 03/31/2022............................ 1,203,096 1,206,533 ---------- 2,300,363 ----------
Principal Value Security Description Amount (Note 2) Chemicals-Plastics -- 0.2% PolyOne Corp. FRS BTL-B1 3.50% due 11/14/2022......................... $ 673,686 $ 676,634 ---------- Chemicals-Specialty -- 1.1% Huntsman International LLC FRS BTL-B 4.25% due 04/01/2023......................... 821,870 827,520 Kraton Polymers LLC FRS BTL 6.00% due 01/06/2022......................... 900,000 905,766 MacDermid, Inc. FRS BTL-B3 5.50% due 06/07/2020......................... 895,477 897,876 PQ Corp. FRS BTL 5.75% due 11/04/2022......................... 303,240 304,946 Royal Holdings, Inc. FRS 1st Lien 4.50% due 06/19/2022......................... 615,213 616,904 ---------- 3,553,012 ---------- Commercial Services -- 1.7% Brickman Group, Ltd. FRS 1st Lien 4.00% due 12/18/2020......................... 1,385,217 1,380,023 Brickman Group, Ltd. FRS 2nd Lien 7.50% due 12/17/2021......................... 776,000 768,240 CPI Acquisition, Inc. FRS BTL-B 5.50% due 08/17/2022......................... 1,310,685 1,279,556 ServiceMaster Co. LLC FRS BTL-B 4.25% due 07/01/2021......................... 2,421,740 2,445,202 ---------- 5,873,021 ---------- Commercial Services-Finance -- 0.8% Harland Clarke Holdings Corp. FRS BTL-B-4 6.99% due 08/04/2019......................... 303,694 297,114 TransUnion LLC FRS BTL-B2 3.59% due 04/09/2021......................... 2,368,097 2,374,017 ---------- 2,671,131 ---------- Computer Services -- 0.7% Abacus Innovations Corp. FRS BTL-B 3.27% due 08/16/2023......................... 714,000 717,570 Harland Clarke Holdings Corp. FRS BTL-B5 7.00% due 12/31/2019......................... 439,959 430,610 Presidio, Inc. FRS BTL 5.25% due 02/02/2022......................... 615,054 613,516 Science Applications International Corp. FRS BTL-B 3.25% due 05/04/2022......................... 548,235 551,319 ---------- 2,313,015 ----------
60 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Computers-Integrated Systems -- 0.6% Kronos, Inc. FRS 1st Lien 4.50% due 10/30/2019..................... $1,340,230 $1,342,743 Kronos, Inc. FRS 2nd Lien 9.75% due 04/30/2020..................... 564,396 574,555 ---------- 1,917,298 ---------- Computers-Memory Devices -- 0.0% Western Digital Corp. FRS BTL-B1 4.50% due 04/29/2023..................... 90,773 91,737 ---------- Computers-Periphery Equipment -- 0.7% CDW LLC FRS BTL 3.00% due 08/04/2023..................... 2,463,254 2,467,873 ---------- Consulting Services -- 0.2% Vertiv Co. FRS BTL-B 6.00% due 09/29/2023..................... 619,000 605,073 ---------- Consumer Products-Misc. -- 0.8% Dell, Inc. FRS BTL-B 4.00% due 09/07/2023..................... 1,770,000 1,779,588 Spectrum Brands, Inc. FRS 1st Lien 3.50% to 5.25% due 06/23/2022............ 809,467 811,390 ---------- 2,590,978 ---------- Containers-Metal/Glass -- 1.2% Anchor Glass Container Corp. FRS 1st Lien 4.75% due 07/01/2022..................... 1,886,263 1,896,166 Ardagh Holdings USA, Inc. FRS Delayed Draw 4.00% due 12/17/2019..................... 630,067 631,248 Berlin Packaging LLC FRS 1st Lien 4.50% due 10/01/2021..................... 540,573 541,474 Owens-Brockway Glass Container, Inc. FRS BTL-B 3.50% due 09/01/2022..................... 974,667 979,541 ---------- 4,048,429 ---------- Containers-Paper/Plastic -- 0.8% Berry Plastics Group, Inc. FRS BTL-D 3.50% due 02/08/2020..................... 1,190,330 1,191,074 Reynolds Group Holdings, Inc. FRS BTL 4.25% due 02/05/2023..................... 1,458,115 1,461,926 ---------- 2,653,000 ---------- Cosmetics & Toiletries -- 0.3% Coty, Inc. FRS BTL 3.75% due 10/27/2022..................... 290,208 290,450 Galleria Co. FRS BTL-B 3.75% due 01/26/2023..................... 583,333 585,156 ---------- 875,606 ----------
Principal Value Security Description Amount (Note 2) Data Processing/Management -- 1.5% CCC Information Services, Inc. FRS Term Loan B 4.00% due 12/20/2019.................... $1,037,838 $1,035,244 First Data Corp. FRS BTL 4.28% due 07/08/2022.................... 651,000 654,526 First Data Corp. FRS BTL 4.53% due 03/24/2021.................... 3,322,167 3,340,289 ---------- 5,030,059 ---------- Diagnostic Equipment -- 0.4% Ortho-Clinical Diagnostics, Inc. FRS BTL-B 4.75% due 06/30/2021.................... 1,346,906 1,318,284 ---------- Diagnostic Kits -- 0.1% Alere, Inc. FRS BTL-B 4.25% due 06/18/2022.................... 452,776 448,688 ---------- Dialysis Centers -- 0.6% DaVita HealthCare Partners, Inc. FRS BTL-B 3.50% due 06/24/2021.................... 1,469,925 1,476,356 U.S. Renal Care, Inc. FRS BTL 5.25% due 12/31/2022.................... 612,188 587,700 ---------- 2,064,056 ---------- Disposable Medical Products -- 0.1% Sterigenics-Nordion Holdings LLC FRS BTL-B 4.25% due 05/15/2022.................... 291,060 290,696 ---------- Distribution/Wholesale -- 1.3% American Builders & Contractors Supply Co., Inc. FRS BTL-B 3.50% due 04/16/2020.................... 1,770,643 1,773,741 HD Supply, Inc. FRS BTL-B 3.75% due 08/13/2021.................... 1,070,255 1,071,815 Spin Holdco, Inc. FRS 1st Lien 4.25% due 11/14/2019.................... 488,781 484,963 Univar, Inc. FRS BTL 4.25% due 07/01/2022.................... 1,035,540 1,035,325 ---------- 4,365,844 ---------- Diversified Minerals -- 0.3% FMG Resources August 2006 Pty, Ltd. FRS BTL-B 3.75% due 06/30/2019.................... 1,123,095 1,121,691 ---------- Educational Software -- 1.0% Blackboard, Inc. FRS BTL-B3 4.75% due 10/04/2018.................... 1,145,000 1,139,513 Blackboard, Inc. FRS BTL-B4 6.00% due 06/30/2021.................... 1,490,000 1,478,825
61 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Educational Software (continued) Cengage Learning, Inc. FRS BTL-B 5.25% due 06/07/2023............................ $ 737,153 $ 736,099 ---------- 3,354,437 ---------- Electric-Generation -- 0.4% APLP Holdings LP FRS BTL 6.00% due 04/13/2023............................ 1,307,910 1,312,269 ---------- Electric-Integrated -- 0.8% Dayton Power & Light Co. FRS BTL-B 4.00% due 08/24/2022............................ 154,000 155,540 Energy Future Intermediate Holding Co. LLC FRS DIP 4.25% due 12/19/2016............................ 1,150,000 1,152,395 Texas Competitive Electric Holdings Co. LLC FRS DIP-B 5.00% due 10/17/2017(3)......................... 783,673 787,788 Texas Competitive Electric Holdings Co. LLC FRS DIP-C 5.00% due 10/17/2017(3)......................... 179,082 180,022 Texas Competitive Electric Holdings Co. LLC FRS BTL 5.00% due 10/10/2017+(3)(4)..................... 1,372,835 398,336 ---------- 2,674,081 ---------- Electronic Components-Semiconductors -- 0.6% Avago Technologies Cayman Finance, Ltd. FRS BTL-B3 3.52% due 02/01/2023............................ 1,343,366 1,358,899 NXP NV FRS BTL-F 3.40% due 12/07/2020............................ 331,118 332,463 ON Semiconductor Corp. FRS BTL-B 5.25% due 03/31/2023............................ 220,000 221,161 ---------- 1,912,523 ---------- Enterprise Software/Service -- 1.3% Applied Systems, Inc. FRS 2nd Lien 7.50% due 01/24/2022............................ 467,388 468,946 BMC Software Finance, Inc. FRS BTL 5.00% due 09/10/2020............................ 1,045,000 1,006,248 Donnelley Financial Solutions, Inc. FRS BTL-B 5.00% due 09/30/2023............................ 360,000 360,900 Infor US, Inc. FRS BTL-B5 3.75% due 06/03/2020............................ 1,582,500 1,570,067 Sophia LP FRS BTL-B 4.75% due 09/30/2022............................ 835,506 835,158 ---------- 4,241,319 ----------
Principal Value Security Description Amount (Note 2) Extended Service Contracts -- 0.5% Sedgwick Claims Management Services, Inc. FRS 1st Lien 3.75% due 03/01/2021.......................... $1,137,893 $1,126,039 Sedgwick Claims Management Services, Inc. FRS BTL 5.25% due 03/01/2021.......................... 129,675 129,999 Sedgwick Claims Management Services, Inc. FRS 2nd Lien 6.75% due 02/28/2022.......................... 595,000 590,538 ---------- 1,846,576 ---------- Filtration/Separation Products -- 0.1% Filtration Group, Inc. FRS 1st Lien 4.25% due 11/21/2020.......................... 408,027 408,741 ---------- Finance-Leasing Companies -- 0.3% Delos Finance SARL FRS BTL 3.59% due 03/06/2021.......................... 923,000 928,307 ---------- Finance-Mortgage Loan/Banker -- 0.5% Walter Investment Management Corp. FRS BTL-B 4.75% due 12/19/2020.......................... 1,681,839 1,538,883 ---------- Finance-Other Services -- 0.5% Omnova Solutions, Inc. FRS BTL-B 5.25% due 08/28/2023.......................... 1,578,000 1,570,110 ---------- Financial Guarantee Insurance -- 0.2% VF Holdings Corp. FRS BTL-1st Lien 4.75% due 06/30/2023.......................... 536,000 537,089 ---------- Food-Baking -- 0.4% Hostess Brands LLC FRS 1st Lien 4.50% due 08/03/2022.......................... 821,700 825,368 Hostess Brands LLC FRS 2nd Lien 8.50% due 08/03/2023.......................... 610,000 611,144 ---------- 1,436,512 ---------- Food-Catering -- 0.3% Aramark Services, Inc. FRS BTL-F 3.34% due 02/24/2021.......................... 908,690 912,098 ---------- Food-Confectionery -- 0.3% Amplify Snack Brands, Inc. FRS 1st Lien 6.50% due 08/24/2023.......................... 980,000 971,834 ---------- Food-Dairy Products -- 0.4% ASP MSG Acquisition Co., Inc. FRS BTL 6.00% due 08/16/2023.......................... 1,007,000 1,010,776 Chobani LLC FRS 1st Lien 5.25% due 09/30/2023.......................... 202,000 200,990 ---------- 1,211,766 ----------
62 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Food-Misc./Diversified -- 0.8% Dole Food Co., Inc. FRS BTL-B 4.50% to 6.00% due 11/01/2018............ $ 529,063 $ 529,945 Pinnacle Foods Finance LLC FRS BTL-H 3.25% due 04/29/2020..................... 2,062,926 2,069,925 Pinnacle Foods Finance LLC FRS BTL-I 3.28% due 01/13/2023..................... 58,558 58,913 ---------- 2,658,783 ---------- Food-Retail -- 0.4% Albertsons LLC FRS BTL-B 4.50% due 08/25/2021..................... 720,626 724,590 Albertsons LLC FRS BTL-B 4.75% due 12/21/2022..................... 466,658 470,449 ---------- 1,195,039 ---------- Gambling (Non-Hotel) -- 0.7% Mohegan Tribal Gaming Authority FRS BTL-B 5.50% due 06/15/2018..................... 821,314 819,004 Mohegan Tribal Gaming Authority FRS BTL-B 6.50% due 09/28/2023..................... 850,000 844,688 Scientific Games International, Inc. FRS BTL-B2 6.00% due 10/01/2021..................... 720,829 721,392 ---------- 2,385,084 ---------- Health Care Providers & Services -- 0.1% Press Ganey Holdings, Inc. FRS BTL 3.25% due 09/20/2023..................... 172,000 172,224 ---------- Hotels/Motels -- 1.6% Hilton Worldwide Finance LLC FRS BTL-B2 3.03% to 3.21% due 10/25/2023............ 4,784,308 4,815,918 Hilton Worldwide Finance LLC FRS BTL 3.50% due 10/26/2020..................... 468,006 469,343 ---------- 5,285,261 ---------- Human Resources -- 0.2% Team Health, Inc. FRS BLT-B 3.84% due 11/23/2022..................... 714,609 717,735 ---------- Independent Power Producers -- 0.9% Calpine Corp. FRS BTL-B5 3.59% due 05/27/2022..................... 1,614,563 1,617,590 NRG Energy, Inc. FRS BTL-B 3.50% due 06/30/2023..................... 1,409,248 1,411,597 ---------- 3,029,187 ----------
Principal Value Security Description Amount (Note 2) Insurance-Property/Casualty -- 0.2% Asurion LLC FRS BTL-B2 4.25% due 07/08/2020................... $ 406,305 $ 406,739 Asurion LLC FRS BTL-B-1 5.00% due 05/24/2019................... 78,518 78,682 Asurion LLC FRS BTL-B4 5.00% due 08/04/2022................... 351,450 352,768 ---------- 838,189 ---------- Investment Companies -- 0.5% RPI Finance Trust FRS BTL-B4 3.59% due 11/09/2020................... 743,647 746,170 UFC Holdings LLC FRS BTL 5.00% due 08/18/2023................... 764,000 768,229 ---------- 1,514,399 ---------- Investment Management/Advisor Services -- 0.4% AlixPartners LLP FRS BTL-B 4.50% due 07/28/2022................... 1,322,640 1,323,192 ---------- Leisure Games -- 0.5% Aristocrat International Pty, Ltd. FRS BTL-B1 3.50% due 10/20/2021................... 1,728,469 1,732,790 ---------- Machinery-General Industrial -- 1.1% Aspen Merger Sub, Inc. FRS 1st Lien 5.25% due 09/27/2023................... 461,000 463,688 Aspen Merger Sub, Inc. FRS 2nd Lien 9.75% due 09/27/2024................... 330,000 326,700 Gardner Denver, Inc. FRS BTL 4.25% due 07/30/2020................... 1,174,780 1,136,893 RBS Global, Inc. FRS 1st Lien 4.00% due 08/21/2020................... 1,752,616 1,751,156 ---------- 3,678,437 ---------- Machinery-Pumps -- 0.2% NN, Inc. FRS BTL-B 5.75% due 10/19/2022................... 726,332 726,786 ---------- Medical Labs & Testing Services -- 0.7% American Renal Holdings, Inc. FRS 1st Lien 4.75% due 09/20/2019................... 345,160 341,277 inVentiv Health, Inc. FRS BTL-B 4.75% due 09/28/2023................... 756,000 756,227 inVentiv Health, Inc. FRS BTL-B4 7.75% due 05/15/2018................... 590,000 590,369 Quorum Health Corp. FRS BTL 6.75% due 04/29/2022................... 567,150 549,249 ---------- 2,237,122 ----------
63 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Medical Products -- 0.3% DJO Finance LLC FRS BTL 4.25% due 06/08/2020............................ $ 374,220 $ 366,385 Greatbatch, Ltd. FRS BTL-B 5.25% due 10/27/2022............................ 700,705 690,895 ---------- 1,057,280 ---------- Medical-Drugs -- 0.9% Capsugel Holdings US, Inc. FRS BTL 4.00% due 07/31/2021............................ 796,000 796,711 Endo Lux Finance Co. FRS BTL 3.75% due 09/26/2022............................ 647,110 645,492 Quintiles Transnational Corp. FRS BTL-B 3.25% due 05/12/2022............................ 148,125 147,940 Valeant Pharmaceuticals International, Inc. FRS BTL-BE 5.25% due 08/05/2020............................ 678,862 678,392 Valeant Pharmaceuticals International, Inc. FRS BTL-B 5.50% due 04/01/2022............................ 616,189 617,575 ---------- 2,886,110 ---------- Medical-Generic Drugs -- 0.2% Amneal Pharmaceuticals LLC FRS BTL-B 4.50% to 6.00% due 11/01/2019................... 719,050 718,151 ---------- Medical-HMO -- 0.1% MultiPlan, Inc. FRS BTL-B 5.00% due 06/07/2023............................ 417,153 422,144 ---------- Medical-Hospitals -- 1.8% Acadia Healthcare Co., Inc. FRS BTL-B 3.75% due 02/16/2023............................ 613,375 617,975 Ardent Legacy Acquisitions, Inc. FRS BTL-B 6.50% due 08/04/2021............................ 499,950 497,450 CHS/Community Health Systems, Inc. FRS BTL-H 4.00% due 01/27/2021............................ 1,849,338 1,814,201 CHS/Community Health Systems, Inc. FRS BTL-F 4.08% due 12/31/2018............................ 252,174 250,630 HCA, Inc, FRS BTL-B6 3.77% due 03/17/2023............................ 182,682 184,680 IASIS Healthcare LLC FRS BTL-B2 4.50% due 05/03/2018............................ 992,268 980,485 National Surgical Hospitals, Inc. FRS 1st Lien 4.50% due 06/01/2022............................ 290,325 287,603 Select Medical Corp. FRS BTL-F 6.00% to 7.50% due 03/03/2021................... 796,995 803,969 Surgery Center Holdings, Inc. FRS BTL - 1st Lien 4.75% due 11/03/2020............................ 726,295 726,295 ---------- 6,163,288 ----------
Principal Value Security Description Amount (Note 2) Medical-Outpatient/Home Medical -- 0.4% 21st Century Oncology, Inc. FRS BTL 7.13% due 04/30/2022............... $ 513,500 $ 480,122 Amsurg Corp. FRS BTL 3.50% due 07/16/2021............... 837,232 837,651 National Mentor Holdings, Inc. FRS Tranche B 4.25% due 01/31/2021............... 139,496 139,540 ---------- 1,457,313 ---------- Medical-Wholesale Drug Distribution -- 0.2% Lanai Holdings III, Inc. FRS BTL-B 5.75% due 08/28/2022............... 817,000 804,745 ---------- Miscellaneous Manufacturing -- 0.3% Gates Global LLC FRS BTL-B 4.25% due 07/06/2021............... 1,028,419 1,011,891 ---------- MRI/Medical Diagnostic Imaging -- 0.2% Surgical Care Affiliates LLC FRS BTL 4.25% due 03/17/2022............... 752,453 754,021 ---------- Non-Hazardous Waste Disposal -- 0.3% Waste Industries USA, Inc. FRS BTL-B 3.50% due 02/27/2020............... 955,381 959,262 ---------- Oil & Gas Drilling -- 0.1% Jonah Energy LLC FRS 2nd Lien 7.50% due 05/12/2021............... 400,000 360,000 Paragon Offshore Finance Co. FRS BTL-B 5.25% due 07/18/2021(3)............ 263,655 61,519 ---------- 421,519 ---------- Oil Companies-Exploration & Production -- 0.8% Chesapeake Energy Corp. FRS BTL 8.50% due 08/23/2021............... 181,000 189,417 EP Energy LLC FRS BTL 9.75% due 06/30/2021............... 680,000 666,400 Fieldwood Energy LLC FRS 1st Lien 7.00% due 08/31/2020............... 95,382 77,498 Fieldwood Energy LLC FRS 2nd Lien 8.38% due 09/30/2020............... 211,234 85,550 Fieldwood Energy LLC FRS 1st Lien 8.38% due 09/30/2020............... 128,766 90,136 MEG Energy Corp. FRS BTL 3.75% due 03/31/2020............... 1,687,962 1,562,208 ---------- 2,671,209 ----------
64 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Oil-Field Services -- 0.3% McJunkin Red Man Corp. FRS BTL-B 5.00% due 11/08/2019............... $1,063,678 $1,033,097 ---------- Physicians Practice Management -- 0.2% Envision Healthcare Corp. FRS BTL-B2 4.50% due 10/28/2022............... 503,198 504,692 ---------- Professional Sports -- 0.3% Delta 2 Lux Sarl FRS BTL-B3 4.75% due 07/30/2021............... 1,035,000 1,035,647 ---------- Publishing-Books -- 0.3% McGraw-Hill Global Education Holdings LLC FRS BTL 5.00% due 05/04/2022............... 877,800 881,750 ---------- Racetracks -- 0.3% Penn National Gaming, Inc. FRS BTL-B 3.25% due 10/30/2020............... 1,091,582 1,091,126 ---------- Real Estate Investment Trusts -- 0.3% ESH Hospitality, Inc. FRS BTL-B 3.75% due 08/30/2023............... 444,000 446,855 MGM Growth Properties Operating Partnership LP FRS BTL-B 4.00% due 04/25/2023............... 601,975 607,054 ---------- 1,053,909 ---------- Real Estate Management/Services -- 1.1% Capital Automotive LP FRS 2nd Lien 6.00% due 04/30/2020............... 955,000 958,581 DTZ US Borrower LLC FRS 1st Lien 4.25% due 11/04/2021............... 1,481,250 1,478,165 Realogy Group LLC FRS BTL-B 3.75% due 07/20/2022............... 1,181,676 1,188,692 ---------- 3,625,438 ---------- Research & Development -- 0.2% Pharmaceutical Product Development LLC FRS BTL-B 4.25% due 08/18/2022............... 537,091 538,568 ---------- Resort/Theme Parks -- 0.1% Six Flags Theme Parks, Inc. FRS Term B 3.34% to 5.00% due 06/30/2022...... 337,908 338,611 ---------- Retail-Arts & Crafts -- 0.4% Michaels Stores, Inc. FRS BTL-B1 3.75% due 01/27/2023............... 1,429,781 1,433,951 ----------
Principal Value Security Description Amount (Note 2) Retail-Auto Parts -- 0.4% Harbor Freight Tools USA, Inc. FRS BTL 4.00% due 08/19/2023.................. $1,358,000 $1,364,790 ---------- Retail-Building Products -- 0.2% Siteone Landscape Supply Holdings FRS BTL-B 6.25% due 04/29/2022.................. 585,060 590,911 ---------- Retail-Drug Store -- 0.2% Rite Aid Corp. FRS BTL-2 4.88% due 06/21/2021.................. 520,000 520,780 ---------- Retail-Leisure Products -- 0.3% Party City Holdings, Inc. FRS BTL-B 4.25% to 4.49% due 08/19/2022......... 919,416 921,550 ---------- Retail-Major Department Stores -- 0.1% Hudson's Bay Co. FRS BTL-B 4.75% due 09/30/2022.................. 341,014 342,122 ---------- Retail-Misc./Diversified -- 0.2% Leslie's Poolmart, Inc. FRS Company Guar. Notes 5.25% due 08/16/2023.................. 638,750 642,742 ---------- Retail-Pet Food & Supplies -- 0.2% PetSmart, Inc. FRS BTL-B 4.25% due 03/11/2022.................. 581,638 582,365 ---------- Rubber/Plastic Products -- 0.2% U.S. Farathane LLC FRS BTL-B2 5.75% due 12/23/2021.................. 731,455 729,169 ---------- Schools -- 0.4% Laureate Education, Inc. FRS BTL-B 8.16% due 03/17/2021.................. 1,438,933 1,429,339 ---------- Semiconductor Components-Integrated Circuits -- 0.3% Cypress Semiconductor Corp. FRS BTL-B 6.50% due 07/05/2021.................. 900,000 908,250 ---------- Semiconductor Equipment -- 0.1% MKS Instruments, Inc. FRS BTL-B1 4.25% due 05/01/2023.................. 251,851 254,841 ---------- Special Purpose Entity -- 0.2% Ipreo Holdings LLC BTL-B 4.25% due 08/06/2021.................. 880,887 834,641 ---------- Telecom Services -- 1.3% Sable International Finance, Ltd. FRS BTL-B1 5.59% due 12/30/2022.................. 490,875 494,250 Sable International Finance, Ltd. FRS BTL-B2 5.83% due 12/30/2022.................. 401,625 404,386 SBA Senior Finance II LLC FRS Term B2 3.34% due 06/10/2022.................. 828,513 827,995
65 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued)
Principal Value Security Description Amount (Note 2) LOANS (continued) Telecom Services (continued) Securus Technologies Holdings, Inc. FRS BTL-B2 5.25% due 04/30/2020.................... $ 992,500 $ 978,233 UPC Financing Partnership FRS BTL 4.08% due 08/31/2024.................... 926,731 930,206 West Corp. FRS BTL-B12 3.75% due 06/17/2023.................... 684,074 687,494 ------------ 4,322,564 ------------ Telephone-Integrated -- 1.1% Level 3 Financing, Inc. FRS BTL-B2 3.50% due 05/31/2022.................... 3,251,000 3,268,611 XO Communications LLC FRS BTL 4.25% due 03/19/2021.................... 538,945 538,776 ------------ 3,807,387 ------------ Television -- 0.5% Mission Broadcasting, Inc. FRS BTL-B2 3.00% due 09/26/2023.................... 64,227 64,521 Sinclair Television Group, Inc. FRS BTL-B1 3.50% due 07/30/2021.................... 834,438 836,872 Tribune Media Co. FRS BTL 3.75% due 12/27/2020.................... 878,485 882,878 ------------ 1,784,271 ------------ Theaters -- 0.1% CDS US Intermediate Holdings Inc. FRS BTL 5.00% due 07/08/2022.................... 466,290 465,707 ------------ Total Loans (cost $190,187,049)..................... 189,486,870 ------------ FOREIGN GOVERNMENT OBLIGATIONS -- 0.6% Sovereign -- 0.6% City of Buenos Aires Argentina Senior Notes 7.50% due 06/01/2027*................... 250,000 272,250 Republic of Argentina Senior Notes 6.25% due 04/22/2019*................... 435,000 461,318 Republic of Argentina Senior Notes 6.88% due 04/22/2021*................... 430,000 468,055 Republic of Argentina Senior Notes 7.13% due 07/06/2036*................... 755,000 799,545 ------------ Total Foreign Government Obligations (cost $1,878,888)....................... 2,001,168 ------------ COMMON STOCKS+(1)(2) -- 0.0% Multimedia -- 0.0% Haights Cross Communication, Inc. (cost $167,305)......................... 19,388 0 ------------ PREFERRED SECURITIES -- 0.4% Diversified Banking Institutions -- 0.4% GMAC Capital Trust I FRS Series 2 (cost $1,191,988)....................... 46,500 1,181,565 ------------
Principal Value Security Description Amount (Note 2) PREFERRED SECURITIES/CAPITAL SECURITIES -- 0.9% Banks-Super Regional -- 0.4% KeyCorp. FRS 5.00% due 09/15/2026(10)........... $1,310,000 $ 1,290,350 SunTrust Banks, Inc. FRS 5.63% due 12/15/2019(10)........... 110,000 113,712 ------------ 1,404,062 ------------ Diversified Banking Institutions -- 0.3% Citigroup, Inc. FRS Series T 6.25% due 08/15/2026(10)........... 845,000 909,431 JPMorgan Chase & Co. FRS Series Z 5.30% due 05/01/2020(10)........... 110,000 111,513 ------------ 1,020,944 ------------ Insurance-Multi-line -- 0.2% Voya Financial, Inc. FRS 5.65% due 05/15/2053............... 600,000 600,000 ------------ Total Preferred Securities/Capital Securities (cost $3,004,425).................. 3,025,006 ------------ WARRANTS+(1)(2)(11) -- 0.2% Television -- 0.2% ION Media Networks, Inc. Expires 12/18/2016 (strike price $0.01)............... 332 401,707 ION Media Networks, Inc. Expires 12/18/2016 (strike price $0.01)............... 328 396,867 ------------ Total Warrants (cost $0).......................... 798,574 ------------ EXCHANGE-TRADED FUNDS -- 0.9% SPDR Bloomberg Barclays High Yield Bond ETF (cost $3,143,877).................. 86,500 $ 3,176,280 ------------ Total Long-Term Investment Securities (cost $345,390,362)................ 346,211,528 ------------ TOTAL INVESTMENTS (cost $345,390,362)(12)............ 103.1% 346,211,528 Liabilities in excess of other assets. (3.1) (10,569,723) ---------- ------------ NET ASSETS 100.0% $335,641,805 ========== ============
-------- * Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. At September 30, 2016, the aggregate value of these securities was $63,175,140 representing 18.8% of net assets. Unless otherwise indicated, these securities are not considered to be illiquid. + Non-income producing security (1) Illiquid security. At September 30, 2016, the aggregate value of these securities was $798,574 representing 0.2% of net assets. (2) Fair valued security. Securities are classified as Level 3 based on the securities valuation inputs (see Note 2). (3) Company has filed for bankruptcy protection. (4) Security in default of interest. (5) Security in default of interest and principal at maturity. 66 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued) (6) PIK ("Payment-in-Kind") security -- Income may be paid in additional securities or cash at the discretion of the issuer. The security is currently paying interest in cash at the coupon rate listed. (7) Senior loans in the Fund are generally subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for a borrower to prepay, prepayments may occur. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. (8) The Fund invests in senior loans which generally pay interest at rates which are periodically re-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the London Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more major United States banks, or the certificate of deposit rate. Senior loans are generally considered to be restrictive in that the Fund is ordinarily contractually obligated to receive approval from the Agent Bank and/or borrower prior to the disposition of a senior loan. (9) All loans in the Fund were purchased through assignment agreements unless otherwise indicated. (10) Perpetual maturity -- maturity date reflects the next call date. (11) Denotes a restricted security that: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933, as amended (the "1933 Act"); (b) is subject to a contractual restriction on public sales; or (c) is otherwise subject to a restriction on sales by operation of applicable law. Restricted securities are valued pursuant to Note 2. Certain restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the 1933 Act. The Fund has no right to demand registration of these securities. The risk of investing in certain restricted securities is greater than the risk of investing in the securities of widely held, publicly traded companies. To the extent applicable, lack of a secondary market and resale restrictions may result in the inability of a Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, certain restricted securities may exhibit greater price volatility than securities for which secondary markets exist. As of September 30, 2016, the Fund held the following restricted securities:
Shares/ Value % of Acquisition Principal Acquisition Per Net Description Date Amount Cost Value Share Assets ----------- ----------- --------- ----------- -------- --------- ------ Warrants ION Media Networks, Inc. Expires 12/18/2016 (strike price $0.01).......... 03/1/2011 332 $0 $401,707 $1,209.96 0.12% ION Media Networks, Inc. Expires 12/18/2016 (strike price 11/11/2010 327 0 $0.01).......... 03/01/2011 1 0 --- -- 328 0 396,867 1,209.96 0.12 -------- ---- $798,574 0.24% ======== ====
(12) See Note 5 for cost of investments on a tax basis. BTL --Bank Term Loan DIP --Debtor-in-possession ETF --Exchange-Traded Fund FRS --Floating Rate Security VRS --Variable Rate Security The rates shown on FRS and VRS are the current interest rates at September 30, 2016 and unless noted otherwise, the dates shown are the original maturity dates. 67 SunAmerica Flexible Credit Fund PORTFOLIO OF INVESTMENTS -- September 30, 2016 -- (unaudited) (continued) The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2016 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant Quoted Prices Observable Inputs Unobservable Inputs Total - --------------------- ----------------- ---------------------- ------------ ASSETS: Investments at Value:* Asset Backed Securities: Diversified Financial Services........ $ -- $ 5,274,352 $ 347,069 $ 5,621,421 U.S. Corporate Bonds & Notes: Rubber/Plastic Products............... -- -- 0 0 Other Industries...................... -- 112,255,420 -- 112,255,420 Foreign Corporate Bonds & Notes: Special Purpose Entity................ -- -- 0 0 Other Industries...................... -- 28,665,224 -- 28,665,224 Loans: Building-Residential/Commercial....... -- -- 0 0 Oil & Gas Drilling.................... -- 360,000 61,519 421,519 Other Industries...................... -- 189,065,351 -- 189,065,351 Foreign Government Obligations.......... -- 2,001,168 -- 2,001,168 Common Stocks........................... -- -- 0 0 Preferred Securities.................... 1,181,565 -- -- 1,181,565 Preferred Securities/Capital Securities. -- 3,025,006 -- 3,025,006 Warrants................................ -- -- 798,574 798,574 Exchange Traded Funds................... 3,176,280 -- -- 3,176,280 ---------- ------------ ---------- ------------ Total Investments at Value.............. $4,357,845 $340,646,521 $1,207,162 $346,211,528 ========== ============ ========== ============
-------- * For a detailed presentation of investments, please refer to the Portfolio of Investments. The Fund's policy is to recognize transfers between Levels as of the end of the reporting period. There were no transfers between Levels during the reporting period. At the beginning and end of the reporting period, Level 3 investments were not considered a material portion of the Fund. See Notes to Financial Statements 68 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) Note 1. Organization The SunAmerica Income Funds (the "Trust") is a diversified open-end management investment company organized as a Massachusetts business trust. The Trust currently consists of three different series (each, a "Fund" and collectively, the "Funds"). Each Fund is a separate series of the Trust with distinct investment objectives and/or strategies. Each Fund is managed by SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"), an indirect wholly-owned subsidiary of American International Group, Inc. ("AIG"). An investor may invest in one or more of the following Funds: SunAmerica U.S. Government Securities Fund ("U.S. Government Securities Fund"), SunAmerica Strategic Bond Fund ("Strategic Bond Fund"), and SunAmerica Flexible Credit Fund ("Flexible Credit Fund"). The Funds are considered to be separate entities for financial and tax reporting purposes. The investment goals and principal investment techniques for each of the Funds are as follows: U.S. Government Securities Fund seeks high current income consistent with relative safety of capital by the active trading of U.S. Government securities, without regard to the maturities of such securities. Under normal market conditions, at least 80% of the Fund's net assets plus any borrowing for investment purposes will be invested in such securities. Strategic Bond Fund seeks a high level of total return by the active trading of a broad range of bonds, including both investment grade and non-investment grade U.S. and foreign bonds (which may include "junk bonds"), U.S. and foreign government and agency obligations, and mortgage-backed securities, without regard to the maturities of such securities. Under normal market conditions, at least 80% of the Fund's net assets plus any borrowing for investment purposes will be invested in bonds. Flexible Credit Fund seeks a high level of total return by the active trading in credit instruments. Under normal circumstances, at least 80% of the Fund's net assets, plus any borrowings for investment purposes, will be invested in credit instruments and derivative instruments and exchange-traded funds ("ETFs") that are linked to, or provide investment exposure to, credit instruments. The Fund considers a credit instrument to be any debt instrument or instrument with debt-like characteristics, including but not limited to, corporate and sovereign bonds, secured floating rate loans and other institutionally traded secured floating rate debt obligations ("Loans"), and securitized instruments, which are securities backed by pools of assets such as mortgages, loans, or other receivables. The credit instruments in which the Fund intends to primarily invest are U.S. and non-U.S. below investment grade, high yield bonds (commonly referred to as "junk bonds") and Loans. Each Fund offers multiple classes of shares. The classes within each Fund are presented in the Statements of Assets and Liabilities. The cost structure for each class is as follows: Class A shares are offered at net asset value per share plus an initial sales charge. Additionally, purchases of Class A shares in amounts of $1,000,000 or more will be purchased at net asset value but will be subject to a contingent deferred sales charge on redemptions made within two years of purchase. Class B shares are offered without an initial sales charge, although a declining contingent deferred sales charge may be imposed on redemptions made within six years of purchase. Class B shares convert automatically to Class A shares on the first business day of the month following the eighth anniversary of the issuance of such Class B shares and at such time will be subject to the lower distribution fee applicable to Class A shares. The U.S. Government Fund and the Flexible Credit Fund stopped offering Class B shares for sale as of the close of business December 2, 2014. As of the close of business January 27, 2015, Class B shares of each of the U.S. Government Securities Fund and the Flexible Credit Fund converted to Class A shares of each respective Fund. Class C shares are offered at net asset value per share without an initial sales charge and may be subject to a contingent deferred sales charge on redemptions made within 12 months of purchase. Class W shares are offered at net asset value per share. The class is offered exclusively through advisory fee-based programs sponsored by certain financial intermediaries and other programs. Class W shares of the Flexible Credit Fund and the Strategic Bond Fund commenced operations effective October 1, 2014 and January 29, 2015, respectively. 69 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) Each class of shares bears the same voting, dividend, liquidation and other rights and conditions except as may otherwise be provided in the Trust's registration statement. Class A, Class B and Class C shares each makes distribution and account maintenance and service fee payments under the distribution plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), except that Class B and Class C shares are subject to higher distribution fees. Indemnifications: The Trust's organizational documents provide current and former officers and trustees with a limited indemnification against liabilities arising out of the performance of their duties to the Trust. In addition, pursuant to Indemnification Agreements between the Trust and each of the current trustees who is not an "interested person," as defined in Section 2(a)(19) of the 1940 Act, of the Trust (collectively, the "Disinterested Trustees"), the Trust provides the Disinterested Trustees with a limited indemnification against liabilities arising out of the performance of their duties to the Trust, whether such liabilities are asserted during or after their service as trustees. In addition, in the normal course of business, the Trust enters into contracts that contain the obligation to indemnify others. The Trust's maximum exposure under these arrangements is unknown. Currently, however, the Trust expects the risk of loss to be remote. Note 2. Significant Accounting Policies The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates and those differences could be significant. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements: Security Valuation: In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. In accordance with GAAP, fair value is defined as the price that the Funds would receive upon selling an asset or transferring a liability in a timely transaction to an independent third party in the principal or most advantageous market. GAAP establishes a three-tier hierarchy to provide more transparency around the inputs used to measure fair value and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tiers are as follows: Level 1 -- Unadjusted quoted prices in active markets for identical securities Level 2 -- Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with pricing procedures approved by the Board of Trustees ("the Board"), etc.) Level 3 -- Significant unobservable inputs (includes inputs that reflect the Funds' own assumptions about the assumptions market participants would use in pricing the security, developed based on the best information available under the circumstances) Changes in valuation techniques may result in transfers in or out of an investment's assigned Level within the hierarchy. The methodology used for valuing investments is not necessarily an indication of the risk associated with investing in those investments and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to each security. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is recently issued and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. 70 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) The summary of each Fund's asset and liabilities classified in the fair value hierarchy as of September 30, 2016 is reported on a schedule following each Fund's Portfolio of Investments. Stocks are generally valued based upon closing sales prices reported on recognized securities exchanges on which the securities are principally traded and are generally categorized as Level 1. Stocks listed on the NASDAQ are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the NOCP will be the last sale price unless the reported trade for the stock is outside the range of the bid/ask price. In such cases, the NOCP will be normalized to the nearer of the bid or ask price. For listed securities having no sales reported and for unlisted securities, such securities will be valued based upon the last reported bid price. As of the close of regular trading on the New York Stock Exchange ("NYSE"), securities traded primarily on security exchanges outside the United States are valued at the last sale price on such exchanges on the day of valuation, or if there is no sale on the day of valuation, at the last-reported bid price. If a security's price is available from more than one exchange, the Funds use the exchange that is the primary market for the security. Such securities are generally categorized as Level 1. However, depending on the foreign market, closing prices may be up to 15 hours old when they are used to price a Fund's shares, and a Fund may determine that certain closing prices do not reflect the fair value of the security. This determination will be based on the review of a number of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. If a Fund determines that closing prices do not reflect the fair value of the securities, the Fund will adjust the previous closing prices in accordance with pricing procedures approved by the Board to reflect what it believes to be the fair value of the securities as of the close of regular trading on the NYSE. The Funds may also fair value securities in other situations, for example, when a particular foreign market is closed but a Fund is open. For foreign equity securities and foreign equity futures contracts, the Funds use an outside pricing service to provide it with closing market prices and information used for adjusting those prices and when so adjusted, such securities and futures are generally categorized as Level 2. Bonds, debentures and other debt securities are valued at evaluated bid prices obtained for the day of valuation from a Board-approved pricing service, and are generally categorized as Level 2. The pricing service may use valuation models or matrix pricing which considers information with respect to comparable bond and note transactions, quotations from bond dealers, or by reference to other securities that are considered comparable in such characteristics as rating, interest rate, and maturity date, option adjusted spread models, prepayments projections, interest rate spreads, and yield curves to determine current value. If a price is unavailable from a Board-approved pricing service, the securities may be priced at the mean of two independent quotes obtained from brokers. Senior floating rate loans ("Loans") are valued at the average of available bids in the market for such Loans, as provided by a Board-approved loan pricing service, and are generally categorized as Level 2. Investments in registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded. Registered investment companies are generally categorized as Level 1. Forward foreign currency contracts ("forward contracts") are valued at the 4:00 p.m. Eastern Time forward rate and are generally categorized as Level 2. Other securities are valued on the basis of last sale or bid price (if a last sale price is not available) which is, in the opinion of the Adviser, the broadest and most representative market, that may be either a securities exchange or over-the-counter market and are generally categorized as Level 1 or Level 2. The Board is responsible for the share valuation process and has adopted policies and procedures (the "PRC Procedures") for valuing the securities and other assets held by the Funds, including procedures for the fair valuation of securities and other assets for which market quotations are not readily available or are unreliable. The PRC Procedures provide for the establishment of a 71 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) pricing review committee, which is responsible for, among other things, making certain determinations in connection with the Trust's fair valuation procedures. Securities for which market quotations are not readily available or the values of which may be significantly impacted by the occurrence of developments or significant events are generally categorized as Level 3. There is no single standard for making fair value determinations, which may result in prices that vary from those of other funds. Derivative Instruments: Forward Foreign Currency Contracts: During the period, the Strategic Bond Fund used forward contracts to attempt to protect securities and related receivables and payables against changes in future foreign exchange rates. A forward contract is an agreement between two parties to buy or sell currency at a set price on a future date. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked-to-market daily using the forward rate and the cumulative change in market value is recorded by a Fund as unrealized appreciation or depreciation. On the settlement date, a Fund records either realized gains or losses equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks to the Funds of entering into forward contracts include counterparty risk, market risk and illiquidity risk. Counterparty risk arises upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts. If the counterparty defaults, a Fund's loss will generally consist of the net amount of contractual payments that the Fund has not yet received though the Fund's maximum exposure due to counterparty risk could extend to the notional amount of the contract. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. These contracts may involve market risk in excess of the unrealized appreciation or depreciation reported on the Statements of Assets and Liabilities. Illiquidity risk arises because the secondary market for forwards may have less liquidity relative to markets for other securities. Currency transactions are also subject to risks different from those of other portfolio transactions. Because currency control is of great importance to the issuing governments and influences economic planning and policy, purchases and sales of currency and related instruments can be adversely affected by government exchange controls, limitations or restrictions on repatriation of currency, and manipulations or exchange restrictions imposed by governments. Forward foreign currency contracts outstanding at the end of the period, if any, are reported on a schedule following each Fund's Portfolio of Investments. Master Agreements: Certain Funds that hold derivative instruments and other financial instruments may be a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements or similar agreements ("Master Agreements") with certain counterparties that govern certain instruments. Master Agreements may contain provisions regarding, among other things, the parties' general obligations, representations, agreements, collateral requirements, events of default and early termination. Collateral can be in the form of cash or securities as agreed to by the Fund and applicable counterparty. Collateral requirements are generally determined based on a Fund's net position with each counterparty. Master Agreements may also include certain provisions that require a Fund to post additional collateral upon the occurrence of certain events, such as when a Fund's net assets fall below a specified level. In addition, Master Agreements typically specify certain standard termination events, such as failure of a party to pay or deliver, credit support defaults and other events of default. Termination events applicable to a Fund may also occur upon a decline in the Fund's net assets below a specified level over a certain period of time. Additional termination events applicable to counterparties may occur upon a decline in a counterparty's long-term and short-term credit ratings below a specified level, or upon a decline in the ratings of a counterparty's credit support provider. Upon the occurrence of a termination event, the other party may elect to terminate early and cause settlement of all instruments outstanding pursuant to a particular Master Agreement, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of a Fund's counterparties to elect early termination could cause a Fund to accelerate the payment of liabilities, which settlement amounts could be in excess of the amount of assets that are already posted as collateral. Typically, the Master Agreement will permit a single net payment in the event of default. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events. As a result, the early termination with respect to derivative instruments subject to Master Agreements that are in a net liability position could be material to a Fund's financial 72 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) statements. The Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Asset and Liabilities. The following tables represent the value of derivatives held as of September 30, 2016, by their primary underlying risk exposure and respective location on the Statements of Assets and Liabilities and the effect of derivatives on the Statements of Operations for the period ended September 30, 2016. The derivative contracts held during the period are not accounted for as hedging instruments under GAAP. For a detailed presentation of derivatives held as of September 30, 2016, please refer to each Fund's Portfolio of Investments.
Liability Asset Derivatives Derivatives ----------------- --------------- Foreign Foreign Exchange Exchange Contracts Contracts ----------------- --------------- Foreign Forward Foreign Forward Exchange Exchange Fund Contracts(1) Contracts(2) ---- ----------------- --------------- Strategic Bond. $95,102 $14,817 ======= =======
-------- Statement of Assets and Liabilities Location: (1)Unrealized appreciation on forward foreign currency contracts (2)Unrealized depreciation on forward foreign currency contracts
Change in Unrealized Realized Gain Appreciation (Loss) on (Depreciation) on Derivatives Derivatives Recognized in Recognized in Statement of Statement of Operations Operations --------------- ----------------- Foreign Foreign Exchange Exchange Contracts Contracts --------------- ----------------- Foreign Forward Foreign Forward Exchange Exchange Fund Contracts(1) Contracts(2) ---- --------------- ----------------- Strategic Bond. $(300,763) $1,680,895 ========= ==========
-------- Statement of Operations Location: (1)Net realized foreign exchange gain (loss) on other assets and liabilities (2)Change in unrealized foreign exchange gain (loss) on other assets and liabilities The following table represents the average monthly balances of derivatives held during the six months ended September 30, 2016:
Average Amount Outstanding During the Year --------------- Foreign Forward Exchange Fund Contracts(1) ---- --------------- Strategic Bond. $46,677,168 ===========
-------- (1)Amounts represent notional amounts in US dollars. 73 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) There were no derivative assets and liabilities subject to Master Agreements outstanding at September 30, 2016. The repurchase agreements held by the Funds as of September 30, 2016, are subject to Master Agreements. See the Portfolio of Investments and the Notes to the Financial Statements for more information about the Funds' holdings in repurchase agreements. Mortgage-Backed Dollar Rolls: During the year ended September 30, 2016, the Strategic Bond Fund entered into dollar rolls using "to be announced" ("TBA") mortgage-backed securities ("TBA Rolls"). TBA Roll transactions involve the sale of mortgage or other asset backed securities with the commitment to purchase substantially similar securities on a specified future date. The Funds' policy is to record the components of TBA Rolls as purchase/sale transactions. Any difference between the purchase and sale price is recorded as a realized gain or loss on the date the transaction is entered into. The Strategic Bond Fund had TBA Rolls outstanding at period end, which are included in receivable for investments sold and payable for investments purchased in the Statements of Assets and Liabilities. TBA Roll transactions involve the risk that the market value of the securities held by a Fund may decline below the price of the securities that the Fund has sold but is obligated to repurchase under the agreement. In the event that the buyer of securities in a TBA Roll transaction files bankruptcy or becomes insolvent, a Fund's use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund's obligation to repurchase the securities. The return earned by a Fund with the proceeds of the TBA Roll transaction may not exceed the transaction costs. When-Issued Securities and Forward Commitments: Certain Funds may purchase or sell when-issued securities, including TBA securities that have been authorized, but not yet issued in the market. In addition, a Fund may purchase or sell securities on a forward commitment basis. A forward commitment involves entering into a contract to purchase or sell securities, typically on an extended settlement basis, for a fixed price at a future date. The Funds may engage in when-issued or forward commitment transactions in order to secure what is considered to be an advantageous price and yield at the time of entering into the obligation. The purchase of securities on a when-issued or forward commitment basis involves a risk of loss if the value of the security to be purchased declines before the settlement date. Conversely, the sale of securities on a when-issued or forward commitment basis involves the risk that the value of the securities sold may increase before the settlement date. For the period ended September 30, 2016, the Strategic Bond Fund purchased and/or sold when-issued securities. Stripped Mortgage-Backed Securities: Stripped Mortgage-Backed Securities ("SMBS") are multiple-class mortgage-backed securities. SMBS are often structured with two classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. SMBS have greater market volatility than other types of U.S. government securities in which a Fund invests. A common type of SMBS has one class receiving some of the interest and all or most of the principal (the "principal only" class) from the mortgage pool, while the other class will receive all or most of the interest (the "interest only" class). The yield to maturity on an interest only class is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments, including principal prepayments, on the underlying pool of mortgage assets, and a rapid rate of principal payment may have a material adverse effect on a Fund's yield. Inflation-Indexed Bonds: Certain Funds may purchase inflation-indexed bonds. Inflation-indexed bonds are fixed income securities whose principal value is adjusted periodically according to the rate of inflation. Two structures are common. The U.S. Treasury and certain other issuers use a structure that reflects inflation in the principal value of the bond. Other issuers pay out any inflation related accruals as part of a semiannual coupon. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates (i.e., stated interest rates) and the rate of inflation. Therefore, if the rate of inflation rises at a faster rate than nominal interest rates, real interest rates (i.e., nominal interest rates minus inflation) might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if nominal interest rates increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-indexed bonds. There can be no assurance, however, that the value of inflation-indexed bonds will be directly correlated to changes in nominal interest rates, and short-term increases in inflation may lead to a decline in their value. Coupon payments received from inflation-indexed bonds are recorded in the Statements of Operations as interest income. In addition, any increase or decrease in the principal amount of an inflation-indexed bond will be recorded in the Statements of Operations as an increase or decrease to interest income, even though principal is not paid until maturity. Repurchase Agreements: The Funds, along with other affiliated registered investment companies, pursuant to procedures adopted by the Board and applicable guidance from the Securities and Exchange Commission ("SEC"), may transfer uninvested 74 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by U.S. Treasury or federal agency obligations. In a repurchase agreement, the seller of a security agrees to repurchase the security at a mutually agreed-upon time and price, which reflects the effective rate of return for the term of the agreement. For repurchase agreements and joint repurchase agreements, the Trust's custodian takes possession of the collateral pledged for investments in such repurchase agreements ("repo" or collectively "repos"). The underlying collateral is valued daily on a mark to market basis, plus accrued interest to ensure that the value, at the time the agreement is entered into, is equal to at least 102% of the repurchase price, including accrued interest. In the event of default of the obligation to repurchase, a Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by a Fund may be delayed or limited. As of September 30, 2016, the following funds held an undivided interest in a joint repurchase agreement with State Street Bank and Trust Co.:
Percentage Principal Fund Ownership Amount ---- ---------- ----------- U.S. Government Securities. 2.71% $11,282,000 Strategic Bond............. 0.29 1,203,000
As of such date, the repurchase agreement in that joint account and the collateral thereof were as follows: State Street Bank and Trust Co., dated September 30, 2016, bearing interest at a rate of 0.01% per annum, with a principal amount of $416,353,000, a repurchase price of $416,353,347, and a maturity date of October 3, 2016. The repurchase agreement is collateralized by the following:
Interest Maturity Principal Market Type of Collateral Rate Date Amount Value ------------------ -------- ---------- ------------ ------------ U.S. Treasury Bonds. 7.88% 02/15/2021 $ 25,000,000 $ 32,523,450 U.S. Treasury Bonds. 8.50 02/15/2020 25,000,000 31,566,400 U.S. Treasury Bonds. 8.75 05/15/2020 25,000,000 32,738,275 U.S. Treasury Notes. 3.38 11/15/2019 98,560,000 107,353,425 U.S. Treasury Notes. 3.50 05/15/2020 200,000,000 220,500,000
Securities Transactions, Investment Income, Expenses, Dividends and Distributions to Shareholders: Security transactions are recorded on a trade date basis. Interest income is accrued daily from settlement date except when collection is not expected. Dividend income is recorded on the ex-dividend date except for certain dividends from foreign securities, which are recorded as soon as the Trust is informed after the ex-dividend date. Paydown gains and losses on mortgage and asset-backed securities are recorded as components of interest income on the Statements of Operations. For financial statement purposes, the Funds amortize all premiums and accrete all discounts on fixed income securities. Realized gains and losses on the sale of investments are calculated on the identified cost basis. Funds which earn foreign income and capital gains may be subject to foreign withholding taxes and capital gains taxes at various rates. Under applicable foreign law, a withholding of tax may be imposed on interest, dividends, and capital gains from the sale of foreign securities at various rates. Net investment income, expenses other than class specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative net asset value of outstanding shares of each class of shares at the beginning of the day (after adjusting for current capital shares activity of the respective class). Expenses common to all Funds are allocated among the Funds based upon relative net assets or other appropriate allocation methods. In all other respects, expenses are charged to each Fund as incurred on a specific identification basis. Dividends from net investment income are accrued daily and paid monthly. Capital gain distributions, if any, are paid annually. The Funds record dividends and distributions to their shareholders on the ex-dividend date. The Funds reserve the right to declare 75 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) and pay dividends less frequently than disclosed above, provided that the net realized capital gains and net investment income, if any, are paid at least annually. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts at fiscal year end based on their federal tax-basis treatment; temporary differences do not require reclassification. Net assets are not affected by these reclassifications. Each Fund is considered a separate entity for tax purposes and intends to comply with the requirements of the Internal Revenue Code, as amended, applicable to regulated investment companies and distribute all of its taxable income, including any net capital gains on investments, to its shareholders. Each Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. Therefore, no federal income tax or excise tax provision is required. The Funds recognize the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained, assuming examination by tax authorities. Management has analyzed each Fund's tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2012 -- 2014 or expected to be taken in each Fund's 2015 tax return. The Funds are not aware of any tax provisions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Funds file U.S. federal and certain state income tax returns. With few exceptions, the Funds are no longer subject to U.S. federal and state tax examinations by tax authorities for tax returns ending before 2012. Foreign Currency Translation: The books and records of the Funds are maintained in U.S. dollars. Assets and liabilities denominated in foreign currencies and commitments under forward foreign currency contracts are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds do not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of securities held at the end of the period. Similarly, the Funds do not isolate the effect of changes in foreign exchange rates from the changes in the market prices of portfolio securities sold during the period. Realized foreign exchange gains and losses on other assets and liabilities and change in unrealized foreign exchange gains and losses on other assets and liabilities located in the Statements of Operations include realized foreign exchange gains and losses from currency gains or losses between the trade and the settlement dates of securities transactions, the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Funds' books and the U.S. dollar equivalent amounts actually received or paid and changes in the unrealized foreign exchange gains and losses relating to the other assets and liabilities arising as a result of changes in the exchange rates and realized gains and losses on forward foreign currency contracts. Note 3. Investment Advisory and Management Agreement, Distribution Agreement and Service Agreement The Trust, on behalf of each Fund, has an Investment Advisory and Management Agreement (the "Agreement") with SunAmerica. Under the Agreement, SunAmerica provides continuous supervision of a Fund's portfolio and administers its corporate affairs, subject to general review by the Trustees. In connection therewith, SunAmerica furnishes the Funds with office facilities, maintains certain of the Funds' books and records, and pays the salaries and expenses of all personnel, including officers of the Funds, who are employees of SunAmerica and its affiliates. 76 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) The Funds pay SunAmerica a monthly investment advisory and management fee calculated daily at the following annual percentages of each Fund's average daily net assets:
Management Fund Assets Fees ---- ---------------------------- ---------- U.S. Government Securities........................ $0 - $200 million 0.650% (greater than) $200 million 0.620 (greater than) $400 million 0.550 Strategic Bond.................................... $0 - $350 million 0.650 (greater than) $350 million 0.600 Flexible Credit................................... $0 - $200 million 0.750 (greater than) $200 million 0.720 (greater than) $400 million 0.550
The Strategic Bond Fund is subadvised by PineBridge Investments, LLC ("PineBridge") and the Flexible Credit Fund is subadvised by Newfleet Asset Management, LLC ("Newfleet"). Under the Subadvisory Agreements, PineBridge and Newfleet manage the investment and reinvestment of the assets of the Strategic Bond Fund and the Flexible Credit Fund, respectively. SunAmerica pays PineBridge and Newfleet fees out of the investment advisory fees it receives from the respective Funds. The portion of the investment advisory fees received by SunAmerica that are paid to PineBridge and Newfleet with respect to the Strategic Bond Fund and Flexible Credit Fund are as follows:
Subadvisory Fund Assets Fees ---- ---------------------------- ----------- Strategic Bond.................................... $0 - $200 million 0.350% (greater than) $200 million 0.250 (greater than) $500 million 0.200 Flexible Credit................................... $0 - $200 million 0.300 (greater than) $200 million 0.250 (greater than) $400 million 0.150
SunAmerica has contractually agreed to waive fees and/or reimburse expenses, to the extent necessary to cap the Funds' annual fund operating expenses at the following percentages of each Fund's average net assets. For the purposes of waived fees and/or reimbursed expense calculations, annual Fund operating expenses shall not include extraordinary expenses (i.e., expenses that are unusual in nature and/or infrequent in occurrence, such as litigation), or acquired Fund fees and expenses, brokerage commissions and other transactional expenses relating to the purchase and sale of portfolio securities, interest, taxes and governmental fees, and other expenses not incurred in the ordinary course of a Fund's business. The contractual fee waivers and expense reimbursements will continue indefinitely, subject to termination by the Trustees, including a majority of the Disinterested Trustees.
Fund Percentage ---- ---------- U.S. Government Securities Class A..... 0.99% U.S. Government Securities Class C..... 1.64 Strategic Bond Class A................. 1.40 Strategic Bond Class B................. 2.05 Strategic Bond Class C................. 2.05 Strategic Bond Class W................. 1.20 Flexible Credit Class A................ 1.45 Flexible Credit Class C................ 2.10 Flexible Credit Class W................ 1.25
For the U.S. Government Securities Fund, any contractual waivers and/or reimbursements made by SunAmerica are subject to recoupment from the Fund within two years after the occurrence of the waivers and/or reimbursements, provided that the Fund is able to effect such payment to SunAmerica and remain in compliance with the expense limitations in effect at the time the waivers and/or reimbursements were made. 77 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) For the period ended September 30, 2016, pursuant to the contractual expense limitations in the above tables SunAmerica has waived and/or reimbursed expenses as follows:
Other Expenses Fund Reimbursed ---- -------------- U.S. Government Securities.............. $ 89,876 Class Specific Fund Expenses ---- -------------- U.S. Government Securities Class A...... $212,173 U.S. Government Securities Class C...... 51,471
At September 30, 2016, expenses previously waived or reimbursed by SunAmerica that are subject to recoupment and expire during the time period indicated are as follows:
Fund Other Expenses Reimbursed ---- ------------------------------------------------ March 31, 2017 March 31, 2018 September 30, 2018 -------------- -------------- ------------------ U.S. Government Securities.... $127,894 $216,436 $ 89,876 Class Specific Expenses Reimbursed ------------------------------------------------ Fund March 31, 2017 March 31, 2018 September 30, 2018 ---- -------------- -------------- ------------------ U.S. Government Securities Class A...................... $211,113 $412,070 $212,173 U.S. Government Securities Class C...................... 35,891 72,293 51,471
The Trust, on behalf of each Fund, has entered into a Distribution Agreement with AIG Capital Services, Inc. ("ACS" or "Distributor"), an affiliate of the Adviser. Each Fund has adopted a Distribution Plan on behalf of each Class (other than Class W shares of the Strategic Bond and Flexible Credit Funds), in accordance with the provisions of Rule 12b-1 under the 1940 Act (each, a "Plan," and collectively, the "Plans"), hereinafter referred to as the "Class A Plan," the "Class B Plan" and the "Class C Plan." In adopting the Class A Plan, the Class B Plan and the Class C Plan, the Trustees determined that there was a reasonable likelihood that each such Plan would benefit the Trust and the shareholders of the respective class. The sales charge and distribution fees of a particular class will not be used to subsidize the sale of shares of any other class. The Class A, Class B and Class C Plans, provide that the Trust, on behalf of the respective classes, shall pay the Distributor a distribution fee at an annual rate of up to 0.10%, 0.75% and 0.75%, of average daily net assets of such Fund's Class A, Class B and Class C shares, respectively, to compensate the Distributor and certain securities firms for providing sales and promotional activities for distributing that class of shares. The distribution costs for which the Distributor may be compensated for include fees paid to broker-dealers that have sold Fund shares, commissions, and other expenses such as those incurred for sales literature, prospectus printing and distribution and compensation to wholesalers. It is possible that in any given year, the amount paid to the Distributor under the Class A Plan, Class B Plan or Class C Plan may exceed the Distributor's distribution costs as described above. Except for Class W shares of the Strategic Bond and Flexible Credit Funds, the Plans also provide that each class of shares of the Trust will also pay the Distributor an account maintenance fee at the annual rate of up to 0.25% of the aggregate average daily net assets of such class of shares to compensate the Distributor and securities firms for account maintenance activities. For the period ended September 30, 2016, ACS received fees as reflected in the Statements of Operations based on the aforementioned rates. The Trust, on behalf of the Strategic Bond and Flexible Credit Funds, has entered into an Administrative and Shareholder Services Agreement with ACS, pursuant to which ACS is paid an annual fee of 0.15% of average daily net assets of Class W shares as compensation for providing additional shareholder services to Class W shareholders. For the period ended September 30, 2016, ACS earned fees as reflected in the Statements of Operations based on the aforementioned rate. ACS receives sales charges on each Fund's Class A shares, portions of which are reallowed to affiliated broker-dealers and non-affiliated broker-dealers. ACS also receives the proceeds of contingent deferred sales charges paid by investors in connection with certain redemptions of Class A, Class B and Class C shares. ACS has advised the Funds that for the period ended 78 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) September 30, 2016, the proceeds received from Class A sales (and paid out to affiliated and non-affiliated broker-dealers) and Class A, Class B and Class C redemptions were as follows:
Class A Class B Class C ---------------------------------------------------- ------------- ------------- Contingent Contingent Contingent Sales Affiliated Non-affiliated Deferred Deferred Deferred Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges Sales Charges ---- -------- -------------- -------------- ------------- ------------- ------------- U.S. Government Securities. $ 31,123 $ 7,982 $ 17,834 $ -- $ -- $12,263 Strategic Bond............. 143,661 55,668 63,741 106 43,588 2,469 Flexible Credit............ 248,486 29,620 178,684 -- -- 4,476
The Trust has entered into a Service Agreement with SunAmerica Fund Services, Inc. ("SAFS"), an affiliate of the Adviser. Under the Service Agreement, SAFS performs certain shareholder account functions by assisting the Funds' transfer agent in connection with the services that it offers to the shareholders of the Funds. The Service Agreement permits the Funds to compensate SAFS for services rendered, based upon an annual rate of 0.22% of average daily net assets, which is approved annually by the Trustees. For the period ended September 30, 2016, the Funds incurred the following expenses which are included in transfer agent fees and expenses in the Statements of Operations to compensate SAFS pursuant to the terms of the Service Agreement:
Payable at Fund Expenses September 30, 2016 ---- -------- ------------------ US Government Securities Class A. $178,240 $28,354 US Government Securities Class C. 32,715 4,973 Strategic Bond Class A........... 193,019 30,948 Strategic Bond Class B........... 34,031 5,668 Strategic Bond Class C........... 166,204 27,032 Strategic Bond Class W........... 34,350 6,013 Flexible Credit Class A.......... 144,457 24,087 Flexible Credit Class C.......... 72,902 12,597 Flexible Credit Class W.......... 115,490 21,689
At September 30, 2016, SunAmerica Active Allocation Portfolio and SunAmerica Multi-Asset Allocation Portfolio, each a series of SunAmerica Series, Inc., owned a percentage of the outstanding shares of the following Funds:
Holder --------------------- SunAmerica SunAmerica Active Multi-Asset Allocation Allocation Fund Portfolio Portfolio ---- ---------- ----------- U.S. Government Securities . . . . . . . . . . . . .. 8.67% 13.37% Strategic Bond . . . . . . . . . . . ................ 3.07 -- Flexible Credit . . . . . . ......................... 3.27 4.01
Note 4. Purchases and Sales of Investment Securities The cost of purchases and proceeds from sales and maturities of long-term investments during the year ended September 30, 2016 were as follows:
Purchases of Investment Sales of Investment Purchase of U.S. Sales of U.S. Securities (Excluding U.S. Securities (Excluding U.S. Government Government Fund Government Securities) Government Securities) Securities Securities ---- -------------------------- -------------------------- ---------------- ------------- U.S. Government Securities. $ -- $ -- $110,782,066 $ 81,771,913 Strategic Bond............. 153,063,491 217,838,372 316,025,563 255,480,422 Flexible Credit............ 132,813,182 77,092,498 -- --
79 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) Note 5. Federal Income Taxes The following details the tax basis of distributions as well as the components of distributable earnings. The tax basis components of distributable earnings differ from the amounts reflected in the Statements of Assets and Liabilities by temporary book/tax differences primarily arising from wash sales, post October capital losses, distributions payable, deferred compensation plans, amortization of premium/discount and treatment of defaulted securities.
Distributable Earnings Tax Distributions For the year ended March 31, 2016 For the year ended March 31, 2016 ---------------------------------------- --------------------------------- Long-term Unrealized Ordinary Gains/Capital Appreciation Ordinary Long-Term Fund Income Loss Carryover (Depreciation)* Income Capital Gains ---- ---------- -------------- --------------- ----------- ------------- U.S. Government Securities. $ 481,941 $(11,882,338) $ 6,747,202 $ 3,189,102 $-- Strategic Bond............. 356,714 (61,012,609) (16,453,517) 16,390,428 -- Flexible Credit............ 1,132,885 (58,512,325) (10,246,257) 9,686,069 --
-------- * Unrealized appreciation (depreciation) includes amounts for derivatives and other assets and liabilities denominated in foreign currency. As of March 31, 2016, for Federal income tax purposes, the Funds indicated below have capital loss carryforwards, which expire in the year indicated, which are available to offset future capital gains, if any:
Capital Loss Carryforward+ Unlimited+ -------------------------- --------------------- Fund 2017 2018 ST LT ---- ---------- ----------- ---------- ---------- U.S. Government Securities............. $ -- $ -- $8,832,105 $3,050,233 Strategic Bond......................... -- 49,688,392 2,433,730 8,890,487 Flexible Credit........................ 9,384,737 41,322,811 1,504,166 6,300,611
-------- + On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted which changes various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective taxable years beginning after the date of enactment. Under the Act, a Fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term losses rather than being considered all short-term as under previous law. Under the current law, capital losses realized after October 31 and late year ordinary losses may be deferred and treated as occurring on the first day of the following year. For the fiscal year ended March 31, 2016, the Funds elected to defer late year ordinary losses and post October capital losses as follows:
Deferred Deferred Deferred Post-October Post-October Late Year Short-Term Long-Term Fund Ordinary Loss Capital Loss Capital Loss ---- ------------- ------------ ------------ U.S. Government Securities. $ -- $ 27,620 $ 517,775 Strategic Bond............. 1,517,537 2,616,057 8,247,774 Flexible Credit............ -- 1,418,217 1,719,068
The amounts of aggregate unrealized gain (loss) and the cost of investment securities for federal tax purposes, including short-term securities and repurchase agreements, were as follows:
Aggregate Aggregate Unrealized Unrealized Unrealized Gain/(Loss) Cost of Fund Gain Loss Net Investments ---- ----------- ----------- ----------- ------------ U.S. Government Securities....... $ 9,789,543 $(1,914,687) $7,874,856 $195,708,842 Strategic Bond................... 12,872,782 (9,397,413) 3,475,369 401,799,832 Flexible Credit Bond............. 7,486,534 (7,088,531) 398,003 345,813,525
80 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) Note 6. Capital Share Transactions Transactions in capital shares of each class of each Fund were as follows:
U.S. Government Securities Fund --------------------------------------------------- Class A --------------------------------------------------- For the six months ended For the September 30, 2016 year ended (unaudited) March 31, 2016 ------------------------ ------------------------- Shares Amount Shares Amount ---------- ------------ ----------- ------------ Shares sold.......... 3,469,640 $ 33,525,297 3,180,760 $ 30,402,860 Reinvested dividends..... 129,019 1,242,556 270,193 2,586,420 Shares redeemed...... (1,737,817) (16,735,743) (6,403,106) (61,225,580) ---------- ------------ ----------- ------------ Net increase (decrease).... 1,860,842 $ 18,032,110 (2,952,153) $(28,236,300) ========== ============ =========== ============ U.S. Government Securities Fund --------------------------------------------------- Class C --------------------------------------------------- For the six months ended For the September 30, 2016 year ended (unaudited) March 31, 2016 ------------------------ ------------------------- Shares Amount Shares Amount ---------- ------------ ----------- ------------ Shares sold.......... 316,771 $ 3,044,053 2,452,847 $ 23,409,209 Reinvested dividends..... 13,268 127,722 25,490 243,879 Shares redeemed...... (607,355) (5,834,461) (1,643,682) (15,692,131) ---------- ------------ ----------- ------------ Net increase (decrease).... (277,316) $ (2,662,686) 834,655 $ 7,960,957 ========== ============ =========== ============ Strategic Bond ------------------------------------------------------------------------------------------------------ Class A Class B --------------------------------------------------- ------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2016 year ended September 30, 2016 year ended (unaudited) March 31, 2016 (unaudited) March 31, 2016 ------------------------ ------------------------- ----------------------- ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------ Shares sold(1)(2).... 2,800,857 $ 9,441,543 11,811,127 $ 39,450,903 753,660 $ 2,556,404 1,109,451 $ 3,647,483 Reinvested dividends..... 840,307 2,841,728 2,121,593 7,060,743 111,760 377,868 287,331 954,645 Shares redeemed(1)(2) (6,967,942) (23,537,778) (27,771,848) (93,474,978) (1,275,976) (4,290,618) (3,308,675) (11,047,375) ---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------ Net increase (decrease).... (3,326,778) $(11,254,507) (13,839,128) $(46,963,332) (410,556) $(1,356,346) (1,911,893) $ (6,445,247) ========== ============ =========== ============ ========== =========== ========== ============ Strategic Bond ------------------------------------------------------------------------------------------------------ Class C Class W --------------------------------------------------- ------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2016 year ended September 30, 2016 year ended (unaudited) March 31, 2016 (unaudited) March 31, 2016 ------------------------ ------------------------- ----------------------- ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------ Shares sold.......... 1,882,484 $ 6,392,138 4,799,228 $ 15,900,642 2,469,828 $ 8,379,733 9,165,702 $ 31,407,808 Reinvested dividends..... 452,683 1,535,564 1,188,650 3,965,886 110,515 373,687 253,845 842,281 Shares redeemed...... (4,877,692) (16,491,150) (12,615,217) (42,009,648) (1,896,114) (6,397,020) (4,726,445) (15,653,382) ---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------ Net increase (decrease).... (2,542,525) $ (8,563,448) (6,627,339) $(22,143,120) 684,229 $ 2,356,400 4,693,102 $ 16,596,707 ========== ============ =========== ============ ========== =========== ========== ============
-------- (1)For the six months ended September 30, 2016, includes automatic conversion of 97,813 shares of Class B shares in the amount of $328,405 to 97,786 shares of Class A shares in the amount of $328,405. (2)For the year ended March 31, 2016, includes automatic conversion of 239,551 shares of Class B shares in the amount of $798,621 to 239,551 shares of Class A shares in the amount of $798,621. 81 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued)
Flexible Credit Fund ---------------------------------------------------- Class A ---------------------------------------------------- For the six months ended For the September 30, 2016 year ended (unaudited) March 31, 2016 ------------------------- ------------------------- Shares Amount Shares Amount ----------- ------------ ----------- ------------ Shares sold...... 11,068,850 $ 37,180,017 28,006,173 $ 94,181,643 Reinvested dividends. 712,978 2,411,620 1,280,817 4,286,740 Shares redeemed.. (8,352,123) (28,029,986) (27,862,342) (94,089,799) ----------- ------------ ----------- ------------ Net increase (decrease) $ 3,429,705 $ 11,561,651 1,424,648 $ 4,378,584 =========== ============ =========== ============ Flexible Credit Fund --------------------------------------------------------------------------------------------------------- Class C Class W ---------------------------------------------------- --------------------------------------------------- For the For the six months ended For the six months ended For the September 30, 2016 year ended September 30, 2016 year ended (unaudited) March 31, 2016 (unaudited) March 31, 2016 ------------------------- ------------------------- ------------------------ ------------------------- Shares Amount Shares Amount Shares Amount Shares Amount ----------- ------------ ----------- ------------ ---------- ------------ ----------- ------------ Shares sold...... 3,856,919 $ 13,080,867 11,931,449 $ 40,650,007 13,367,594 $ 45,182,005 34,047,527 $115,125,832 Reinvested dividends. 240,413 818,143 448,842 1,510,779 354,474 1,200,076 377,753 1,259,129 Shares redeemed.. (2,241,925) (7,597,202) (6,713,380) (22,403,219) (5,457,968) (18,443,747) (10,903,475) (36,221,129) ----------- ------------ ----------- ------------ ---------- ------------ ----------- ------------ Net increase (decrease) 1,855,407 $ 6,301,808 5,666,911 $ 19,757,567 8,264,100 $ 27,938,334 23,521,805 $ 80,163,832 =========== ============ =========== ============ ========== ============ =========== ============
Note 7. Line of Credit The Trust, along with certain other funds managed by the Adviser, has access to a $75 million committed unsecured line of credit and a $50 million uncommitted unsecured line of credit. The committed and uncommitted lines of credit are renewable on an annual basis with State Street Bank and Trust Company "State Street", the Trust's custodian. Interest is currently payable on the committed line of credit at the higher of the Federal Funds Rate (but not less than zero) plus 125 basis points or the One-Month London Interbank Offered Rate (but not less than zero) plus 125 basis points and State Street's discretionary bid rate on the uncommitted line of credit. The Trust, on behalf of each of the Funds, has paid State Street for its own account, such Fund's ratable portion of an upfront fee in an amount equal to $100,000 in the aggregate for the committed and uncommitted lines of credit and the committed line of credit made available by State Street to certain other funds managed by the Adviser, which are also party to the uncommitted line of credit. The $100,000 upfront fee is inclusive of a closing fee of 5 basis points on the uncommitted line of credit. There is also a commitment fee of 25 basis points per annum on the daily unused portion of the committed line of credit. Borrowings under the line of credit will commence when the respective Fund's cash shortfall exceeds $100,000. For the six months ended September 30, 2016, the following Funds had borrowings:
Average Weighted Days Interest Debt Average Fund Outstanding Charges Utilized Interest ---- ----------- -------- ---------- -------- U.S. Government Securities. 2 $ 257 $2,647,390 1.76% Flexible Credit............ 70 4,732 1,395,089 1.73
At September 30, 2016, the following fund had an outstanding borrowing:
Fund Amount ---- ---------- Flexible Credit. $1,211,297
Note 8. Interfund Lending Agreement Pursuant to the exemptive relief granted by the Securities and Exchange Commission, the Funds are permitted to participate in an interfund lending program among investment companies advised by SunAmerica or an affiliate. The interfund lending program 82 SunAmerica Income Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2016 -- (unaudited) (continued) allows the participating Funds to borrow money from and lend money to each other for temporary or emergency purposes. An interfund loan will be made under this facility only if the participating Funds receive a more favorable interest rate than would otherwise be available from a typical bank for a comparable transaction. For the period ended September 30, 2016, none of the Funds participated in this program. Note 9. Investment Concentration The Flexible Credit Fund's investment in high yield securities, whether rated or unrated, may be considered speculative and subject to greater market fluctuations and risk of loss of income and principal than lower-yielding, higher-rated, fixed-income securities. The risk of loss due to default by the issuer may be significantly greater for the holders of high yield securities, because such securities are generally unsecured and are often subordinated to other creditors of the issuer. The Flexible Credit Fund and Strategic Bond Fund invest in participations and assignments, or act as a party to the primary lending syndicate of a variable rate senior loan interest to United States corporations, partnerships, and other entities. If the lead lender in a typical lending syndicate becomes insolvent, enters receivership or, if not FDIC insured, enters into bankruptcy, a Fund may incur certain costs and delays in receiving payment, or may suffer a loss of principal and/or interest. When a Fund purchases a participation of a senior loan interest, the Fund typically enters into a contractual agreement with the lender or other third party selling the participation but not with the borrower directly. As such, a Fund is subject to the credit risk of the borrower, selling participant, lender or other persons positioned between the Funds and the borrower. Each Fund may invest in obligations issued by agencies and instrumentalities of the U.S. Government that may vary in the level of support they receive from the government. The government may choose not to provide financial support to government sponsored agencies or instrumentalities if it is not legally obligated to do so, and if the issuer defaults, a fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. As a result of the U.S. Government Fund's concentration in such investments, it may be subject to risks associated with U.S. Government agencies or instrumentalities. 83 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited) Approval of the Investment Advisory and Management Agreement and Subadvisory Agreements The Board of Trustees (the "Board" the members of which are referred to as "Trustees") of SunAmerica Income Funds (the "Trust"), including the Trustees who are not "interested persons," as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent Trustees"), of the Trust or its separate series (each, a "Fund," and collectively, the "Funds"), SunAmerica Asset Management, LLC ("SunAmerica"), PineBridge Investments LLC ("PineBridge") and Newfleet Asset Management, LLC ("Newfleet," and together with PineBridge, the "Subadvisers"), approved the continuation of the Investment Advisory and Management Agreement between the Trust, on behalf of the Funds, and SunAmerica (the "Advisory Agreement") for a one-year period ending June 30, 2017 at an in-person meeting held on June 7-8, 2016 (the "Meeting"). The Trust currently consists of the following three separate Funds: SunAmerica Flexible Credit Fund ("Flexible Credit Fund"), SunAmerica Strategic Bond Fund ("Strategic Bond Fund") and SunAmerica U.S. Government Securities Fund ("U.S. Government Securities Fund"). At the Meeting, the Board, including the Independent Trustees, also approved the continuation of the Subadvisory Agreement between SunAmerica and PineBridge with respect to the Strategic Bond Fund and the Subadvisory Agreement between SunAmerica and Newfleet with respect to the Flexible Credit Fund (the "Subadvisory Agreements" and together with the Advisory Agreement, the "Agreements") for a one-year period ending June 30, 2017. In accordance with Section 15(c) of the 1940 Act, the Board requested, and SunAmerica and the Subadvisers provided, materials relating to the Board's consideration of whether to approve the continuation of the Agreements. These materials included, as applicable: (a) a summary of the services provided or to be provided, as applicable, by SunAmerica and its affiliates to the Funds and by the Subadvisers; (b) information independently compiled and prepared by Broadridge Financial Solutions, Inc. ("Broadridge"), an independent third-party provider of mutual fund data, on fees and expenses of the Funds, and the investment performance of the Funds as compared with a peer group of funds, along with fee and performance data with respect to the Funds and any other mutual funds or other accounts advised or subadvised by SunAmerica or the Subadvisers with similar investment objectives and/or strategies, as applicable; (c) information on the profitability of SunAmerica and its affiliates, and a discussion relating to indirect benefits; (d) information relating to economies of scale; (e) information about SunAmerica's general compliance policies and procedures and the services it provides in connection with its oversight of subadvisers; (f) information about SunAmerica's and the Subadvisers' risk management processes; (g) information regarding brokerage and soft dollar practices; and (h) information about the key personnel of SunAmerica and its affiliates, and the Subadvisers, that are involved in the investment management, administration, compliance and risk management activities with respect to the Funds, as well as current and projected staffing levels and compensation practices. In determining whether to approve the continuation of the Agreements, the Board, including the Independent Trustees, considered at the Meeting, and from time to time as appropriate, factors it deemed relevant, including the following information: Nature, Extent and Quality of Services Provided by SunAmerica and the Subadvisers. The Board, including the Independent Trustees, considered the nature, extent and quality of services provided by SunAmerica. The Board noted that the services include acting as investment manager and adviser to the Funds, managing the daily business affairs of the Funds, and obtaining and evaluating economic, statistical and financial information to formulate and implement investment policies. Additionally, the Board observed that SunAmerica provides office space, bookkeeping, accounting, legal, and compliance, clerical and administrative services and has authorized its officers and employees, if elected, to serve as officers or trustees of the Trust without compensation. The Board also noted that SunAmerica is responsible for monitoring and reviewing the activities of affiliated and unaffiliated third-party service providers, including the Subadvisers. In addition to the quality of the advisory services provided by SunAmerica, the Board considered the quality of the administrative and other services provided by SunAmerica to the Funds pursuant to the Advisory Agreement. In connection with the services provided by SunAmerica, the Board analyzed the structure and duties of SunAmerica's fund administration, accounting, operations, legal and compliance departments and concluded that they were adequate to meet the needs of the Funds. The Board also reviewed the personnel responsible for providing advisory services to the Funds and other key personnel of SunAmerica, in addition to current and projected staffing levels and compensation practices. The Board concluded, based on its experience and interaction with SunAmerica, that: (i) SunAmerica would continue to be able to retain quality investment and other personnel; (ii) SunAmerica has exhibited a high level of diligence and attention to detail in carrying out its advisory and other responsibilities under the Advisory Agreement; (iii) SunAmerica has been responsive to requests of the Board; and (iv) SunAmerica 84 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited) (continued) has kept the Board apprised of developments relating to the Funds and the industry in general. The Board concluded that the nature and extent of services provided under the Advisory Agreement were reasonable and appropriate in relation to the management fee and that the quality of services continues to be high. The Board also considered SunAmerica's reputation and long-standing relationship with the Funds and considered the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of types of mutual funds and shareholder services. The Board considered SunAmerica's experience in providing management and investment advisory and administrative services to advisory clients and noted that as of March 31, 2016, SunAmerica managed, advised and/or administered approximately $79.5 billion in assets. In addition, the Board considered SunAmerica's code of ethics and its commitment to compliance generally and with respect to its management and administration of the Funds. The Board also considered SunAmerica's risk management processes. The Board further observed that SunAmerica has developed internal procedures for monitoring compliance with the investment objectives, policies and restrictions of the Funds as set forth in the Funds' prospectuses. The Board also reviewed SunAmerica's compliance and regulatory history and noted that there were no material legal, regulatory or compliance issues that would potentially impact SunAmerica from effectively serving as the investment adviser to the Funds. The Board also considered the nature, extent and quality of services provided by each Subadviser to the applicable Funds. The Board observed that the Subadvisers are responsible for providing day-to-day investment management services, including investment research, advice and supervision, and determining which securities will be purchased or sold by the Fund that each Subadviser manages, subject to the oversight and review of SunAmerica. The Board reviewed each Subadviser's history, structure, size, visibility and resources, which are needed to attract and retain highly qualified investment professionals. The Board reviewed the personnel that are responsible for providing subadvisory services to the Funds, in addition to current and projected staffing levels and compensation practices, and concluded, based on its experience with the Subadvisers, that each Subadviser: (i) has been able to retain high quality portfolio managers and other investment personnel; (ii) has exhibited a high level of diligence and attention to detail in carrying out its responsibilities under the applicable Subadvisory Agreement; and (iii) has been responsive to requests of the Board and of SunAmerica. In addition, the Board considered each Subadviser's code of ethics and risk management processes. The Board further observed that each Subadviser has developed internal policies and procedures for monitoring compliance with the investment objectives, policies and restrictions of the Funds as set forth in the Funds' Prospectuses. The Board also reviewed each Subadviser's compliance and regulatory history and noted that there were no material legal, regulatory or compliance issues that would potentially impact the Subadvisers from effectively serving as Subadvisers to the Funds. The Board concluded that the nature and extent of services provided by each Subadviser under the respective Subadvisory Agreement were reasonable and appropriate in relation to the subadvisory fee and that the quality of services continues to be high. Investment Performance. The Board, including the Independent Trustees, also considered the investment performance of SunAmerica and the Subadvisers with respect to the Funds, as applicable. In connection with its review, the Board received and reviewed information regarding the investment performance of the Funds as compared to each Fund's peer group ("Peer Group") and/or peer universe ("Peer Universe") as independently determined by Broadridge and to an appropriate index or combination of indices, including the Funds' benchmarks. The Board was provided with a description of the methodology used by Broadridge to select the funds in each Peer Group and Peer Universe. The Board noted that performance information was for the periods ended March 31, 2016. The Board also noted that it regularly reviews the performance of the Funds throughout the year. The Board further noted that, while it monitors performance of the Funds closely, it generally attaches more importance to performance over relatively long periods of time, typically three to five years. U.S. Government Securities Fund. The Board considered that the Fund's performance was below the median of its Peer Group and Peer Universe for the one-, three- and five-year periods. The Board also considered that the Fund underperformed its Broadridge Index for the one-, three- and five-year periods. The Board considered that a new management team within SunAmerica assumed responsibility for day-to-day management of the Fund, effective July 2014. The Board noted management's discussion of the Fund's performance, including continued monitoring of the Fund and concluded that the Fund's performance was being addressed. Flexible Credit Fund. The Board considered that the Fund's performance was above the median of its Peer Group and Peer Universe for the one-, three- and five-year periods. The Board further considered that the Fund outperformed its Broadridge Index for the one- and three-year periods. The Board noted management's discussion of the Fund's performance and that effective October 1, 2014, the 85 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited) (continued) Fund changed its name and certain of the Fund's principal investment strategies and techniques, and Newfleet was appointed as the subadviser to the Fund. The Board concluded that the Fund's performance was satisfactory. Strategic Bond Fund. The Board considered that the Fund's performance was below the median of its Peer Group and Peer Universe for the one-, three- and five-year periods and that the Fund underperformed its Broadridge Index for the one-, three- and five-year periods. The Board noted management's discussion of the Fund's performance and that the Board had approved certain changes to the Fund's principal investment strategy effective July 29, 2014, and concluded that the Fund's performance was being addressed. Consideration of the Management Fees and Subadvisory Fee and the Cost of the Services and Profits to be Realized by SunAmerica, the Subadvisers and their Affiliates from the Relationship with the Funds. The Board, including the Independent Trustees, received and reviewed information regarding the fees to be paid by the Funds to SunAmerica pursuant to the Advisory Agreement and the fees to be paid by SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. The Board examined this information in order to determine the reasonableness of the fees in light of the nature and quality of services to be provided and any potential additional benefits to be received by SunAmerica, the Subadvisers or their affiliates in connection with providing such services to the Funds. To assist in analyzing the reasonableness of the management fee for each of the Funds, the Board received reports independently prepared by Broadridge. The reports showed comparative fee information for each Fund's Peer Group and/or Peer Universe as determined by Broadridge, including rankings within each category. In considering the reasonableness of the management fee to be paid by each Fund to SunAmerica, the Board reviewed a number of expense comparisons, including: (i) contractual and actual management fees; and (ii) actual total operating expenses. In considering each Fund's total operating expenses, the Board analyzed the level of fee waivers and expense reimbursements and the net expense caps contractually agreed upon by SunAmerica with respect to each Fund. The Board further considered that, unlike the funds in each Peer Group and Peer Universe, the fee waivers and/or reimbursements being made by SunAmerica with respect to the Funds are only reflected in the total expenses category of the Broadridge reports, rather than also being reflected as specific management fee waivers in the actual management fee category of the Broadridge reports. As a result, the Board took into account that the actual management fees presented by Broadridge for the funds in each Peer Group and Peer Universe may appear lower on a relative basis. The Board also considered the various expense components of the Funds and compared each Fund's net expense ratio (taking into account the contractual fee caps and waivers) to those of other funds within its Peer Group and/or Peer Universe as a guide to help assess the reasonableness of the management fee for the Funds. The Board acknowledged that it was difficult to make precise comparisons with other funds in the Peer Groups and Peer Universes since the exact nature of services provided under the various fund agreements is often not apparent. The Board noted, however, that the comparative fee information provided by Broadridge as a whole was useful in assessing whether SunAmerica was providing services at a cost that was competitive with other, similar funds. The Board also considered the management fees received by SunAmerica with respect to other mutual funds and accounts with similar investment strategies to the Funds, to the extent applicable. The Board noted, however, that the mutual funds identified as similar to the U.S. Government Securities Fund are sold only in the variable annuity market and, accordingly, are in different Broadridge classifications, with a peer groups consisting of funds underlying variable insurance products. The Board then noted the management fees paid by the Funds were reasonable as compared to the fees SunAmerica was receiving from other mutual funds and accounts for which it serves as adviser or subadviser. The Board also received and reviewed information regarding the fees paid by SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. To assist in analyzing the reasonableness of the subadvisory fees, the Board received a report independently prepared by Broadridge. The report showed comparative fee information of the Funds' Peer Groups and/or Peer Universe that the Board used as a guide to help assess the reasonableness of the subadvisory fees. The Board noted that Peer Group information as a whole was useful in assessing whether the Subadvisers were providing services at a cost that was competitive with other similar funds. The Board also considered that the subadvisory fees are paid by SunAmerica out of its management fee and not by the Funds, and that subadvisory fees may vary widely within a Peer Group for various reasons, including market pricing demands, existing relationships, experience and success, and individual client needs. The Board further considered the amount of subadvisory fees paid out by SunAmerica and the amount of the management fees which it retained and determined that these amounts were reasonable in light of the services performed by SunAmerica and the Subadvisers, respectively. 86 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited) (continued) The Board also considered advisory fees received by the Subadvisers with respect to other mutual funds and accounts with similar investment strategies to the Funds. The Board then noted that the subadvisory fee paid by SunAmerica to PineBridge was reasonable as compared to fees PineBridge receives for other mutual funds and accounts for which it serves as adviser or subadviser. The Board also noted that Newfleet indicated that it does not serve as adviser or subadviser to any fund or account with a similar investment policy as the Flexible Credit Fund. U.S. Government Securities Fund. The Board considered that the Fund's actual management fees were above the median of its Peer Group and Peer Universe. The Board also considered that the Fund's total expenses were above the median of its Peer Group and Peer Universe. The Board noted that the Fund's advisory fee contains breakpoints and further noted management's discussion regarding the Fund's expenses. Flexible Credit Fund. The Board considered that the Fund's actual management fees were above the median of its Peer Group and Peer Universe. The Board also considered that the Fund's total expenses were above the median of its Peer Group and Peer Universe. The Board noted that the Fund's advisory fee contains breakpoints and further noted management's discussion regarding the Fund's expenses. Strategic Bond Fund. The Board considered that the Fund's actual management fees were above the median of its Peer Group and Peer Universe. The Board also considered that the Fund's total expenses were above the median of its Peer Group and Peer Universe. The Board noted that the Fund's advisory fee contains breakpoints and further noted management's discussion regarding the Fund's expenses. Profitability. The Board also considered SunAmerica's profitability and the benefits SunAmerica and its affiliates received from its relationship with the Funds. The Board received and reviewed financial statements relating to SunAmerica's financial condition and profitability with respect to the services it provided the Funds and considered how profit margins could affect SunAmerica's ability to attract and retain high quality investment professionals and other key personnel. The Board was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by SunAmerica and its affiliates that provide services to the Funds on a Fund by Fund basis. The Board also considered the contractual fee waivers and/or expense reimbursements agreed to by SunAmerica. The Board considered the profitability of SunAmerica under the Advisory Agreement, including the amount of management fees it retained after payment to the Subadvisers, and considered the profitability of SunAmerica's affiliates under the Rule 12b-1 Plans and Service Agreements. Additionally, the Board considered whether SunAmerica and their affiliates received any indirect benefits from the relationship with the Funds. Specifically, the Board observed that AIG Federal Savings Bank, an affiliate of SunAmerica serves as custodian with respect to certain shareholder retirement accounts that are administered by SunAmerica and receives a fee payable by the qualifying shareholders. The Board further considered whether there were any collateral or "fall-out" benefits that SunAmerica and its affiliates may derive as a result of their relationship with the Funds. The Board noted that SunAmerica believes that any such benefits are de minimis and do not impact the reasonableness of the management fees. The Board also reviewed the Subadvisers' financial statements and considered whether the Subadvisers had the financial resources necessary to attract and retain high quality investment management personnel and to provide a high quality of services. The Board concluded that SunAmerica and the Subadvisers had the financial resources necessary to perform their obligations under the Agreements and to continue to provide the Funds with the high quality services that they had provided in the past. The Board also concluded that the management fee and subadvisory fee were reasonable in light of the factors discussed above. Economies of Scale. The Board, including the Independent Trustees, considered whether the shareholders would benefit from economies of scale and whether there was potential for future realization of economies with respect to the Funds. The Board considered that as a result of being part of the SunAmerica fund complex, the Funds share common resources and may share certain expenses, and if the size of the complex increases, each Fund could incur lower expenses than they otherwise would achieve as stand-alone entities. The Board also took into account that each of the Funds had management fee arrangements that included breakpoints that will adjust the fee downward as the size of the Fund increases, thereby allowing the shareholders to potentially participate in any economies of scale. The Board further noted that SunAmerica has agreed to contractually cap the total annual operating expenses of 87 SunAmerica Income Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2016 -- (unaudited) (continued) the Funds at certain levels. The Board observed that those expense caps and fee waivers benefited shareholders by limiting total fees even in the absence of breakpoints or economies of scale. The Board concluded that the Funds' management fee structure was reasonable and that it would continue to review fees in connection with the renewal of the Advisory Agreement, including whether the implementation of additional breakpoints would be appropriate in the future due to an increase in asset size or otherwise. The Board noted that the Subadvisory Agreements included breakpoints, but did not review specific information regarding whether there have been economies of scale with respect to the Subadvisers' management of the Funds because it regards that information as less relevant at the subadviser level. Rather, the Board considered information regarding economies of scale in the context of the renewal of the Advisory Agreement. Other Factors. In consideration of the Agreements, the Board also received information regarding SunAmerica's and the Subadvisers' brokerage and soft dollar practices. The Board considered that SunAmerica and the Subadvisers are responsible for decisions to buy and sell securities for the applicable Funds, selection of broker-dealers and negotiation of commission rates. The Board noted that it receives reports from SunAmerica and from an independent third party which include information on brokerage commissions and execution throughout the year. The Board also considered the benefits SunAmerica and the Subadvisers derive from their soft dollar arrangements, including arrangements under which brokers provide brokerage and/or research services to SunAmerica and/or the Subadvisers in return for allocating brokerage; however, the Board noted that the securities in which the Funds invest are traded primarily in the over-the-counter market on a "net" basis with dealers acting as principal for their own accounts without a stated commission (although the price of the security usually includes a profit to the dealer) and, therefore, the Funds generally do not incur brokerage commissions. Accordingly, the Board observed that SunAmerica and the Subadvisers typically would not receive soft dollar benefits in return for allocating the Funds' brokerage transactions. The Board further observed that when making purchases of new issues with fixed underwriting fees, SunAmerica or the Subadvisers may designate the use of broker-dealers who have agreed to provide certain statistical, research and other information. Conclusion. After a full and complete discussion, the Board approved the Agreements, each for a one-year period ending June 30, 2017. Based upon their evaluation of all these factors in their totality, the Board, including the Independent Trustees, was satisfied that the terms of the Agreements were fair and reasonable and in the best interests of the Funds and the Funds' shareholders. In arriving at a decision to approve the Advisory Agreement and Subadvisory Agreements, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and each Independent Trustee may have attributed different weights to different factors. The Independent Trustees were also assisted by the advice of independent legal counsel in making this determination. 88 [LOGO] SunAmerica Mutual Funds Harborside Financial Center 3200 Plaza 5 Jersey City, NJ 07311-4992 Trustees VOTING PROXIES ON DISCLOSURE OF Richard W. Grant TRUST PORTFOLIO QUARTERLY PORTFOLIO Peter A. Harbeck SECURITIES HOLDINGS Dr. Judith L. Craven A description of the The Trust is required William F. Devin policies and to file its com-plete Stephen J. Gutman proce-dures that the schedule of portfolio Officers Trust uses to holdings with the U.S. John T. Genoy, President determine how to vote Securities and James Nichols, Vice proxies relating to Exchange Commission President secu-rities held in a for its first and Gregory N. Bressler, Fund's portfolio, third fiscal quarters Secretary which is available in on Form N-Q. The Kathleen Fuentes, Chief the Trust's Statement Trust's Forms N-Q are Legal Officer and of Additional available on the Assistant Secretary Information, may be U.S. Securities and Gregory R. Kingston, ob-tained without Exchange Commis-sion Treasurer charge upon request, website at Donna McManus, Vice by calling (800) www.sec.gov. You can President and 858-8850. The also review and obtain Assistant Treasurer in-formation is also copies of the Forms Shawn Parry, Vice available from the N-Q at the U.S. President and EDGAR database on the Securities and Assistant Treasurer U.S. Secu-rities and Exchange Commission Matthew J. Hackethal, Exchange Commission's Public Refer-ence Room Acting Chief website at in Washington DC Compliance Officer, http://www.sec.gov. (information on the Anti-Money Laundering DELIVERY OF operation of the Compliance Officer SHAREHOLDER DOCUMENTS Public Reference Room Investment Adviser The Funds have adopted may be ob-tained by SunAmerica Asset a policy that allows calling Management, LLC them to send only one 1-800-SEC-0330). Harborside Financial copy of a Fund's PROXY VOTING RECORD ON Center prospectus, proxy SUNAMERICA INCOME FUNDS 3200 Plaza 5 material, annual Information regarding Jersey City, NJ report and semi-annual how the Funds voted 07311-4992 report (the proxies relating to Distributor "shareholder securities held in the AIG Capital Services, documents") to Funds during the most Inc. shareholders with recent twelve month Harborside Financial multiple accounts period ended June 30 Center residing at the same is available, once 3200 Plaza 5 "household." This filed with the U.S. Jersey City, NJ practice is called Securities and 07311-4992 householding and Exchange Commission, Shareholder Servicing reduces Fund expenses, without charge, upon Agent which benefits you and request, by calling SunAmerica Fund other shareholders. (800) 858-8850 or on Services, Inc. Unless the Funds the U.S. Securities Harborside Financial receive instructions and Exchange Center to the con-trary, you Commission's website 3200 Plaza 5 will only receive one at http://www.sec.gov. Jersey City, NJ copy of the This report is 07311-4992 shareholder documents. submitted solely for Custodian and Transfer The Funds will the general Agent continue to household information of State Street Bank and the share-holder shareholders of the Trust Company documents Funds. Distribution of One Lincoln Street indefinitely, until we this report to persons Boston, MA 02111 are instructed other than otherwise. If you do shareholders of the not wish to Funds is authorized participate in only in con-nection householding please with a currently contact Shareholder effective pro-spectus, Services at (800) setting forth details 858-8850 ext. 6010 or of the Funds, which send a written request must precede or with your name, the accom-pany this report. name of your fund(s) The accompanying and your account report has not been number(s) to audited by independent SunAmerica Mutual accountants and Funds c/o BFDS, P.O. accordingly no Box 219186, Kansas opinions have been City MO, 64121-9186. expressed thereon. We will resume individual mailings for your account within thirty (30) days of receipt of your request. GO PAPERLESS!! DID YOU KNOW THAT YOU HAVE THE OPTION TO RECEIVE YOUR SHAREHOLDER REPORTS ONLINE? By choosing this convenient service, you will no longer receive paper copies of Fund documents such as annual reports, semi-annual reports, prospectuses and proxy statements in the mail. Instead, you are provided with quick and easy access to this information via the Internet. Why Choose Electronic Delivery? IT'S QUICK -- Fund documents will be received faster than via traditional mail. IT'S CONVENIENT -- Elimination of bulky documents from personal files. IT'S COST EFFECTIVE -- Reduction of your Fund's printing and mailing costs. TO SIGN UP FOR ELECTRONIC DELIVERY, FOLLOW THESE SIMPLE STEPS: 1 GO TO WWW.SAFUNDS.COM 2 CLICK ON THE LINK TO "GO PAPERLESS!!"
The email address you provide will be kept strictly confidential. Once your enrollment has been processed, you will begin receiving email notifications when anything you receive electronically is available online. You can return to www.safunds.com at any time to change your email address, edit your preferences or to cancel this service if you choose to resume physical delivery of your Fund documents. Please note - this option is only available to accounts opened through the Funds. FOR INFORMATION ON RECEIVING THIS REPORT ONLINE, SEE INSIDE BACK COVER. DISTRIBUTED BY: AIG CAPITAL SERVICES, INC. This fund report must be preceded by or accompanied by a prospectus. Investors should carefully consider a Fund's investment objectives, risks, charges and expenses before investing. The prospectus, containing this and other important information, can be obtained from your financial adviser, the SunAmerica Sales Desk at 800-858-8850, ext. 6003, or at www.safunds.com. Read the prospectus carefully before investing. WWW.SAFUNDS.COM INSAN - 9/16 [LOGO] AIG Sun America Mutual Funds Item 2. Code of Ethics. Not applicable. Item 3. Audit Committee Financial Expert. Not applicable. Item 4. Principal Accountant Fees and Services. Not applicable. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. Investments. Included in Item 1 to the Form. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of Matters to a Vote of Security Holders. There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Trustees that were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a- 101), or this Item 10. Item 11. Controls and Procedures. (a) An evaluation was performed within 90 days of the filing of this report, under the supervision and with the participation of the registrant's management, including the President and Treasurer, of the effectiveness of the design and operation of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based on that evaluation, the registrant's management, including the President and Treasurer, concluded that the registrant's disclosure controls and procedures are effective. (b) There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's last fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal contro1 over financial reporting. Item 12. Exhibits. (a) (1) Not applicable. (2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes- Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SunAmerica Income Funds By: /s/ John T. Genoy ----------------------- John T. Genoy President Date: December 8, 2016 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John T. Genoy ----------------------- John T. Genoy President Date: December 8, 2016 By: /s/ Gregory R. Kingston ----------------------- Gregory R. Kingston Treasurer Date: December 8, 2016