-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GktCGuIjJB4CGWA1uVdR/mv62ZV6ZC/NWqU6m01fqREkLwURTBG+IoXGz20s8jYM Yr9KibLD632ymJuHQEAM0Q== 0001193125-07-261173.txt : 20071207 0001193125-07-261173.hdr.sgml : 20071207 20071207134856 ACCESSION NUMBER: 0001193125-07-261173 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070930 FILED AS OF DATE: 20071207 DATE AS OF CHANGE: 20071207 EFFECTIVENESS DATE: 20071207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNAMERICA EQUITY FUNDS CENTRAL INDEX KEY: 0000799084 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04801 FILM NUMBER: 071291985 BUSINESS ADDRESS: STREET 1: HARBORSIDE FINANCIAL CENTER STREET 2: 3200 PLAZA 5 CITY: JERSEY CITY STATE: NJ ZIP: 07311 BUSINESS PHONE: 800-858-8850 MAIL ADDRESS: STREET 1: HARBORSIDE FINANCIAL CENTER STREET 2: 3200 PLAZA 5 CITY: JERSEY CITY STATE: NJ ZIP: 07311 FORMER COMPANY: FORMER CONFORMED NAME: SUNAMERICA EQUITY PORTFOLIOS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED EQUITY PORTFOLIOS DATE OF NAME CHANGE: 19900306 0000799084 S000007622 Blue Chip Growth C000020786 Class A C000020787 Class B C000020788 Class C C000020789 Class I 0000799084 S000007623 Growth Opportunities C000020790 Class A C000020791 Class B C000020792 Class C C000020793 Class I 0000799084 S000007624 New Century C000020794 Class A C000020795 Class B C000020796 Class C 0000799084 S000007625 Balanced Assets C000020797 Class A C000020798 Class B C000020799 Class C C000020800 Class I 0000799084 S000007626 Growth & Income C000020801 Class A C000020802 Class B C000020803 Class C C000020804 Class I 0000799084 S000007627 Disciplined Growth Fund C000020805 Class A C000020806 Class B C000020807 Class C 0000799084 S000007629 International Equity C000020811 Class A C000020812 Class B C000020813 Class C C000020814 Class I 0000799084 S000007630 SunAmerica Value Fund C000020815 Class A C000020816 Class B C000020817 Class C C000020818 Class Z C000020819 Class I 0000799084 S000012533 SunAmerica International Small-Cap Fund C000034072 Class A C000034073 Class B C000034074 Class C N-CSR 1 dncsr.txt SUNAMERICA EQUITY FUNDS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-04801 --------------------------------------------- SunAmerica Equity Funds - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ 07311 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Vincent M. Marra Senior Vice President AIG SunAmerica Asset Management Corp. 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) 324-6464 ----------------------------- Date of fiscal year end: September 30 -------------------------- Date of reporting period: September 30, 2007 ------------------------- Item 1. Reports to Stockholders [PHOTO] ANNUAL REPORT 2007 AIG SUNAMERICA Equity Funds [LOGO] www.sunamericafunds.com live longer retire stronger/sm/ September 30, 2007 ANNUAL REPORT SUNAMERICA EQUITY FUNDS SunAmerica Blue Chip Growth Fund (SVLAX) SunAmerica Growth Opportunities Fund (SGWAX) SunAmerica New Century Fund (SEGAX) SunAmerica Growth and Income Fund (SEIAX) SunAmerica Balanced Assets Fund (SBAAX) SunAmerica International Equity Fund (SIEAX) SunAmerica Value Fund (SSVAX) SunAmerica Disciplined Growth Fund* (TXMAX) SunAmerica International Small-Cap Fund (SAESX) * Effective May 15, 2007, the name of the SunAmerica Tax Managed Equity Fund was changed to the SunAmerica Disciplined Growth Fund. Table of Contents SHAREHOLDER LETTER.......................................................... 2 EXPENSE EXAMPLE............................................................. 3 STATEMENT OF ASSETS AND LIABILITIES......................................... 6 STATEMENT OF OPERATIONS..................................................... 10 STATEMENT OF CHANGES IN NET ASSETS.......................................... 13 FINANCIAL HIGHLIGHTS........................................................ 18 PORTFOLIO OF INVESTMENTS.................................................... 27 NOTES TO FINANCIAL STATEMENTS............................................... 67 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..................... 88 APPROVAL OF ADVISORY AGREEMENTS............................................. 89 TRUSTEE AND OFFICER INFORMATION............................................. 93 SHAREHOLDER TAX INFORMATION................................................. 96 COMPARISONS: FUNDS vs. INDEXES.............................................. 97
Shareholder Letter Dear Shareholder: Enclosed is the annual report for the SunAmerica Equity Funds for the fiscal year ended September 30, 2007. The fiscal year was marked by many twists and turns but ended up being a strong year for the equity markets. International stocks led the way as the MSCI EAFE Index returned 24.86% over the annual period while the Dow Jones Industrial Average (DJIA) returned over 21.62%. The NASDAQ Composite and S&P 500 Index closely followed with returns of 19.62% and 16.44%, respectively. During the first quarter of the fiscal year ended September 30, 2007, equity markets were strong with the S&P 500 Index returning 6.99% and the MSCI EAFE Index bringing a 10.35% quarterly return. Small-cap stocks continued their multi-year trend of outperforming large-caps, and value outperformed growth. As we entered 2007, the equity markets once again got off to a fast start but were setback in February as the Chinese market corrected and concerns regarding the U.S. housing market escalated. For the period ended March 31, 2007, the S&P 500 Index secured a mere 0.64% gain, while the MSCI EAFE Index returned 4.08%. One important shift in market behavior occurred as growth stocks outperformed value, and mid-cap stocks outpaced small-cap stocks. A boom in private equity transactions, continued weakness in the U.S. housing market and the collapse of a Wall Street hedge fund were three of the themes that dominated the fiscal third quarter ended June 30, 2007. Against this backdrop, equities produced strong returns as the S&P 500 Index returned 6.29% and the NASDAQ Composite returned 8.94%. Growth stocks continued to outperform value stocks during the quarter. Despite a meltdown in the subprime mortgage market and the beginnings of a credit crunch, the fourth fiscal quarter, ended September 30, 2007, ended with the DJIA, S&P 500 Index and NASDAQ showing positive returns. With regard to asset classes, results were mixed as the growth category outperformed value, and large-cap indices outpaced small-cap indices. A 50-basis point cut by the Federal Reserve in the Federal Funds rate at the September meeting sparked a strong equity rally and repaired the declines of the equity markets from earlier in the quarter. This cut in the Federal Funds rate had been preceded by a 50-basis point cut in the discount rate (the rate at which the Federal Reserve lends to banks). The Federal Reserve's actions seemed to instill confidence in the market that the central bank would move aggressively to ward off a recession. It is a debatable point that the U.S. economy is heading into a recession; however one thing appears clear: economic growth is slowing. An important question is whether or not corporate earnings, which have clearly been decelerating, can continue to grow. At AIG SunAmerica, we continue to search for companies that can deliver earnings in this more challenging environment. We look to identify opportunities to grow capital while keeping a keen eye on risk. We employ a combination of quantitative tools and strong fundamental research and believe our approach will help us achieve our dual objective. Thank you for your investment in the SunAmerica Equity Funds. If you have any questions regarding our products, we invite you to contact your financial adviser, speak with a Shareholder Services Representative at 800-858-8850 or visit our website at www.sunamericafunds.com. Sincerely, The SunAmerica Equity Funds Investment Professionals AIG SunAmerica Asset Management Corp. AIG Investments - --------------- John Massey Allison Larkin Hans Danielsson Steve Neimeth Brendan Voege Robin Thorn Paul Ma Ben Barrett Jay Rushin Mike Beaulieu Soraya Benitez Andy Sheridan Sandra Salas Jay Merchant Sarah Kallok Kara Murphy
- -------- Past performance is no guarantee of future results. 2 SunAmerica Equity Funds EXPENSE EXAMPLE -- September 30, 2007 -- (unaudited) Disclosure of Portfolio Expenses in Shareholder Reports As a shareholder of a Fund in the SunAmerica Equity Funds (the "Trust"), you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges, redemption fees (applicable to Class A of International Equity Fund and International Small-Cap Fund only) 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, 2007 and held until September 30, 2007. 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, 2007" to estimate the expenses you paid on your account during this period. For shareholder accounts in classes other than Class I and Class Z the "Expenses Paid During the six months ended September 30, 2007" column does not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid During the six months ended September 30, 2007" column does not include administrative fees that may apply to qualified retirement plan accounts. See the Funds' prospectus and/or your retirement plan documents for full description of these fees. Had these fees been included, the "Expenses Paid During the six months ended September 30, 2007" column would have been higher and the "Ending Account Value" would have been lower. Hypothetical Example for Comparison Purposes The "Hypothetical" section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. For shareholder accounts in classes other than Class I and Class Z the "Expenses Paid During the six months ended September 30, 2007" column does not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the "Expenses Paid During the six months ended September 30, 2007" column does not include administrative fees that may apply to qualified retirement plan accounts. See the Funds' prospectus and/or your retirement plan document for full description of these fees. Had these fees been included, the "Expenses Paid During the six months ended September 30, 2007" column would have been higher and the "Ending Account Value" would have been lower. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, including sales charges on purchase payments, contingent deferred sales charges, redemption fees (applicable to Class A of International Equity Fund and International Small-Cap Fund only); small account fees and administrative fees, if applicable to your account. Please refer to the Fund's prospectus and/or qualified retirement plan document 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. 3 SunAmerica Equity Funds EXPENSE EXAMPLE -- September 30, 2007 -- (unaudited) (continued)
Actual Hypothetical ------------------------------------------ ------------------------------------------ Ending Account Ending Account Expense Paid Value using Expense Paid Value Using During the a Hypothetical During the Expense Beginning Actual Six Months Beginning 5% Assumed Six Months Ratio Account Value Return at Ended Account Value Return at Ended as of at April 1, September 30, September 30, at April 1, September 30, September 30, September 30, Fund 2007 2007 2007 2007 2007 2007 2007* - ---- ------------- -------------- ------------- ------------- -------------- ------------- ------------- Blue Chip Growth Fund@ Class A#.................. $1,000.00 $1,130.28 $ 8.54 $1,000.00 $1,017.05 $ 8.09 1.60% Class B#.................. $1,000.00 $1,126.11 $12.37 $1,000.00 $1,013.44 $11.71 2.32% Class C#.................. $1,000.00 $1,124.91 $13.37 $1,000.00 $1,012.48 $12.66 2.51% Class I#.................. $1,000.00 $1,132.22 $ 7.06 $1,000.00 $1,018.45 $ 6.68 1.32% Growth Opportunities Fund@ Class A#.................. $1,000.00 $ 983.20 $ 7.86 $1,000.00 $1,017.15 $ 7.99 1.58% Class B#.................. $1,000.00 $ 979.83 $11.27 $1,000.00 $1,013.69 $11.46 2.27% Class C#.................. $1,000.00 $ 979.21 $11.71 $1,000.00 $1,013.24 $11.91 2.36% Class I#.................. $1,000.00 $ 983.95 $ 6.61 $1,000.00 $1,018.40 $ 6.73 1.33% New Century Fund@ Class A................... $1,000.00 $1,033.69 $ 7.95 $1,000.00 $1,017.25 $ 7.89 1.56% Class B................... $1,000.00 $1,030.04 $11.65 $1,000.00 $1,013.59 $11.56 2.29% Class C#.................. $1,000.00 $1,030.40 $10.89 $1,000.00 $1,014.34 $10.81 2.14% Growth and Income Fund@ Class A#.................. $1,000.00 $1,112.04 $ 8.21 $1,000.00 $1,017.30 $ 7.84 1.55% Class B#.................. $1,000.00 $1,108.21 $11.52 $1,000.00 $1,014.14 $11.01 2.18% Class C#.................. $1,000.00 $1,109.12 $11.47 $1,000.00 $1,014.19 $10.96 2.17% Class I#.................. $1,000.00 $1,112.97 $ 6.99 $1,000.00 $1,018.45 $ 6.68 1.32% Balanced Assets Fund@ Class A#.................. $1,000.00 $1,070.73 $ 8.20 $1,000.00 $1,017.15 $ 7.99 1.58% Class B#.................. $1,000.00 $1,067.67 $11.71 $1,000.00 $1,013.74 $11.41 2.26% Class C#.................. $1,000.00 $1,067.53 $11.66 $1,000.00 $1,013.79 $11.36 2.25% Class I#.................. $1,000.00 $1,072.57 $ 6.81 $1,000.00 $1,018.50 $ 6.63 1.31% International Equity Fund Class A#.................. $1,000.00 $1,118.01 $10.09 $1,000.00 $1,015.54 $ 9.60 1.90% Class B#.................. $1,000.00 $1,114.20 $13.51 $1,000.00 $1,012.28 $12.86 2.55% Class C#.................. $1,000.00 $1,114.34 $13.52 $1,000.00 $1,012.28 $12.86 2.55% Class I#.................. $1,000.00 $1,118.21 $ 9.56 $1,000.00 $1,016.04 $ 9.10 1.80% Value Fund@ Class A#.................. $1,000.00 $1,086.00 $ 8.52 $1,000.00 $1,016.90 $ 8.24 1.63% Class B#.................. $1,000.00 $1,082.49 $11.90 $1,000.00 $1,013.64 $11.51 2.28% Class C#.................. $1,000.00 $1,082.49 $11.90 $1,000.00 $1,013.64 $11.51 2.28% Class I#.................. $1,000.00 $1,086.66 $ 8.00 $1,000.00 $1,017.40 $ 7.74 1.53% Class Z#.................. $1,000.00 $1,089.14 $ 5.55 $1,000.00 $1,019.75 $ 5.37 1.06% Disciplined Growth Fund@ Class A#.................. $1,000.00 $1,218.03 $ 8.06 $1,000.00 $1,017.80 $ 7.33 1.45% Class B#.................. $1,000.00 $1,214.44 $11.66 $1,000.00 $1,014.54 $10.61 2.10% Class C#.................. $1,000.00 $1,214.29 $11.66 $1,000.00 $1,014.54 $10.61 2.10% International Small-Cap Fund Class A#.................. $1,000.00 $1,059.00 $ 9.81 $1,000.00 $1,015.54 $ 9.60 1.90% Class B#.................. $1,000.00 $1,055.51 $13.14 $1,000.00 $1,012.28 $12.86 2.55% Class C#.................. $1,000.00 $1,055.51 $13.14 $1,000.00 $1,012.28 $12.86 2.55%
- -------- * Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183 days divided by 365 days. These ratios do not reflect transaction costs, including sales charges on purchase payments, contingent deferred sales charges, redemption fees (applicable to Class A of International Equity Fund and International Small-Cap Fund only), small account fees and administrative fees, if applicable to your account. Please refer to your Prospectus and/or qualified retirement plan document for more information. # During the stated period, the investment adviser either waived a portion of or all of the fees and assumed a portion of or all expenses for the Funds or through recoupment provisions, recovered a portion of or all fees and expenses waived or reimbursed in the previous two fiscal years. As a result, if these fees and expenses had not been waived or assumed, the "Actual/Hypothetical Ending Account Value" would have been lower and the "Actual/Hypothetical Expenses Paid During the Six Months Ended September 30, 2007" and the "Expense Ratios" would have been higher. If these fees and expenses had not been recouped, the "Actual/Hypothetical Ending Account Value" would have been higher and the "Actual/Hypothetical Expenses Paid During the Six Months Ended September 30, 2007" and "Expense Ratios" would have been lower. @ Through expense offset arrangements resulting from broker commission recapture, a portion of the Fund's expenses have been reduced. Had the expense reductions been applied, the Expense Example would have been as follows: 4 SunAmerica Equity Funds EXPENSE EXAMPLE -- September 30, 2007 -- (unaudited) (continued)
Actual Hypothetical ------------------------------------------ ------------------------------------------ Ending Account Ending Account Expense Paid Value using Expense Paid Value Using During the a Hypothetical During the Expense Beginning Actual Six Months Beginning 5% Assumed Six Months Ratio Account Value Return at Ended Account Value Return at Ended as of at April 1, September 30, September 30, at April 1, September 30, September 30, September 30, Fund 2007 2007 2007 2007 2007 2007 2007* - ---- ------------- -------------- ------------- ------------- -------------- ------------- ------------- Blue Chip Growth Fund Class A#............... $1,000.00 $1,130.28 $ 8.49 $1,000.00 $1,017.10 $ 8.04 1.59% Class B#............... $1,000.00 $1,126.11 $12.31 $1,000.00 $1,013.49 $11.66 2.31% Class C#............... $1,000.00 $1,124.91 $13.32 $1,000.00 $1,012.53 $12.61 2.50% Class I#............... $1,000.00 $1,132.22 $ 7.00 $1,000.00 $1,018.50 $ 6.63 1.31% Growth Opportunities Fund Class A#............... $1,000.00 $ 983.20 $ 7.61 $1,000.00 $1,017.40 $ 7.74 1.53% Class B#............... $1,000.00 $ 979.83 $10.97 $1,000.00 $1,013.99 $11.16 2.21% Class C#............... $1,000.00 $ 979.21 $11.41 $1,000.00 $1,013.54 $11.61 2.30% Class I#............... $1,000.00 $ 983.95 $ 6.32 $1,000.00 $1,018.70 $ 6.43 1.27% New Century Fund Class A................ $1,000.00 $1,033.69 $ 7.80 $1,000.00 $1,017.40 $ 7.74 1.53% Class B................ $1,000.00 $1,030.04 $11.50 $1,000.00 $1,013.74 $11.41 2.26% Class C#............... $1,000.00 $1,030.40 $10.79 $1,000.00 $1,014.44 $10.71 2.12% Growth and Income Fund Class A#............... $1,000.00 $1,112.04 $ 7.99 $1,000.00 $1,017.50 $ 7.64 1.51% Class B#............... $1,000.00 $1,108.21 $11.31 $1,000.00 $1,014.34 $10.81 2.14% Class C#............... $1,000.00 $1,109.12 $11.26 $1,000.00 $1,014.39 $10.76 2.13% Class I#............... $1,000.00 $1,112.97 $ 6.78 $1,000.00 $1,018.65 $ 6.48 1.28% Balanced Assets Fund Class A#............... $1,000.00 $1,070.73 $ 8.20 $1,000.00 $1,017.15 $ 7.99 1.58% Class B#............... $1,000.00 $1,067.67 $11.66 $1,000.00 $1,013.79 $11.36 2.25% Class C#............... $1,000.00 $1,067.53 $11.61 $1,000.00 $1,013.84 $11.31 2.24% Class I#............... $1,000.00 $1,072.57 $ 6.75 $1,000.00 $1,018.55 $ 6.58 1.30% Value Fund Class A#............... $1,000.00 $1,086.00 $ 8.42 $1,000.00 $1,017.00 $ 8.14 1.61% Class B#............... $1,000.00 $1,082.49 $11.80 $1,000.00 $1,013.74 $11.41 2.26% Class C#............... $1,000.00 $1,082.49 $11.80 $1,000.00 $1,013.74 $11.41 2.26% Class I#............... $1,000.00 $1,086.66 $ 7.95 $1,000.00 $1,017.45 $ 7.69 1.52% Class Z#............... $1,000.00 $1,089.14 $ 5.50 $1,000.00 $1,019.80 $ 5.32 1.05% Disciplined Growth Fund Class A#............... $1,000.00 $1,218.03 $ 7.84 $1,000.00 $1,018.00 $ 7.13 1.41% Class B#............... $1,000.00 $1,214.44 $11.44 $1,000.00 $1,014.74 $10.40 2.06% Class C#............... $1,000.00 $1,214.29 $11.43 $1,000.00 $1,014.74 $10.40 2.06%
5 SunAmerica Equity Funds STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2007
Blue Chip Growth New Growth Opportunities Century Fund Fund Fund ------------ ------------- ------------- ASSETS: Long-term investment securities, at market value (unaffiliated)*.......... $ 69,627,872 $ 48,274,459 $ 85,790,618 Short-term investment securities, at market value (unaffiliated)*......... -- -- -- Repurchase agreements (cost approximates market value).................... 1,123,000 10,150,000 13,531,000 ------------ ------------- ------------- Total investments....................................................... 70,750,872 58,424,459 99,321,618 ------------ ------------- ------------- Cash...................................................................... 290 412 17,327 Foreign cash*............................................................. -- -- -- Receivable for: Fund shares sold........................................................ 9,161 6,677 23,294 Dividends and interest.................................................. 26,832 24,294 83,598 Investments sold........................................................ 1,361,314 5,160,391 7,946,267 Prepaid expenses and other assets......................................... 5,784 31,497 8,818 Due from investment adviser for expense reimbursements/fee waivers........ 300 1,170 418 ------------ ------------- ------------- Total assets.............................................................. 72,154,553 63,648,900 107,401,340 ------------ ------------- ------------- LIABILITIES: Payable for: Fund shares redeemed.................................................... 45,932 173,790 110,619 Investments purchased................................................... 988,423 -- 1,975,000 Interest on securities sold short....................................... -- -- -- Investment advisory and management fees................................. 42,533 39,059 63,767 Distribution and service maintenance fees............................... 29,457 31,169 38,705 Transfer agent fees and expenses........................................ 29,553 27,203 36,737 Trustees' fees and expenses............................................. 29,219 25,332 49,662 Other accrued expenses.................................................. 82,029 101,552 92,667 Due to investment adviser from expense recoupment......................... -- -- -- Due to custodian.......................................................... -- -- -- Securities sold short, at market value#................................... -- -- -- ------------ ------------- ------------- Total liabilities......................................................... 1,247,146 398,105 2,367,157 ------------ ------------- ------------- Net Assets................................................................ $ 70,907,407 $ 63,250,795 $ 105,034,183 ============ ============= ============= NET ASSETS REPRESENTED BY: Shares of beneficial interest, $.01 par value............................. $ 39,154 $ 34,424 $ 48,656 Paid-in capital........................................................... 127,683,951 256,242,157 210,377,954 ------------ ------------- ------------- 127,723,105 256,276,581 210,426,610 Accumulated undistributed net investment income (loss).................... (28,338) (24,866) (49,536) Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short and foreign exchange transactions............................................................. (68,097,696) (193,429,999) (105,900,967) Unrealized appreciation (depreciation) on investments..................... 11,310,336 429,079 558,076 Unrealized foreign exchange gain (loss) on other assets and liabilities... -- -- -- Unrealized appreciation (depreciation) on securities sold short........... -- -- -- ------------ ------------- ------------- Net Assets................................................................ $ 70,907,407 $ 63,250,795 $ 105,034,183 ============ ============= ============= *Cost Long-term investment securities (unaffiliated).......................... $ 58,317,536 $ 47,845,380 $ 85,232,542 ============ ============= ============= Short-term investment securities (unaffiliated)......................... $ -- $ -- $ -- ============ ============= ============= Foreign cash............................................................ $ -- $ -- $ -- ============ ============= ============= #Proceeds from securities sold short...................................... $ -- $ -- $ -- ============ ============= =============
Growth and Balanced Income Assets Fund Fund ------------ ------------ ASSETS: Long-term investment securities, at market value (unaffiliated)*.......... $104,288,588 $149,194,938 Short-term investment securities, at market value (unaffiliated)*......... -- -- Repurchase agreements (cost approximates market value).................... 3,800,000 5,017,000 ------------ ------------ Total investments....................................................... 108,088,588 154,211,938 ------------ ------------ Cash...................................................................... 286 63,927 Foreign cash*............................................................. -- -- Receivable for: Fund shares sold........................................................ 50,779 17,513 Dividends and interest.................................................. 100,811 610,911 Investments sold........................................................ 3,870,943 3,081,840 Prepaid expenses and other assets......................................... 8,922 8,071 Due from investment adviser for expense reimbursements/fee waivers........ 639 3,078 ------------ ------------ Total assets.............................................................. 112,120,968 157,997,278 ------------ ------------ LIABILITIES: Payable for: Fund shares redeemed.................................................... 98,038 250,078 Investments purchased................................................... 1,045,148 3,225,135 Interest on securities sold short....................................... -- 869 Investment advisory and management fees................................. 67,400 93,720 Distribution and service maintenance fees............................... 54,575 58,937 Transfer agent fees and expenses........................................ 42,419 56,643 Trustees' fees and expenses............................................. 39,432 78,728 Other accrued expenses.................................................. 75,684 123,066 Due to investment adviser from expense recoupment......................... -- -- Due to custodian.......................................................... -- -- Securities sold short, at market value#................................... -- 597,047 ------------ ------------ Total liabilities......................................................... 1,422,696 4,484,223 ------------ ------------ Net Assets................................................................ $110,698,272 $153,513,055 ============ ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $.01 par value............................. $ 71,601 $ 97,164 Paid-in capital........................................................... 134,934,292 209,203,252 ------------ ------------ 135,005,893 209,300,416 Accumulated undistributed net investment income (loss).................... 204,199 236,935 Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short and foreign exchange transactions............................................................. (34,153,477) (69,026,832) Unrealized appreciation (depreciation) on investments..................... 9,641,657 12,996,080 Unrealized foreign exchange gain (loss) on other assets and liabilities... -- -- Unrealized appreciation (depreciation) on securities sold short........... -- 6,456 ------------ ------------ Net Assets................................................................ $110,698,272 $153,513,055 ============ ============ *Cost Long-term investment securities (unaffiliated).......................... $ 94,646,931 $136,198,858 ============ ============ Short-term investment securities (unaffiliated)......................... $ -- $ -- ============ ============ Foreign cash............................................................ $ -- $ -- ============ ============ #Proceeds from securities sold short...................................... $ -- $ 603,503 ============ ============
See Notes to Financial Statements 6 SunAmerica Equity Funds STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2007 -- (continued)
Blue Chip Growth New Growth and Balanced Growth Opportunities Century Income Assets Fund Fund Fund Fund Fund ----------- ------------- ----------- ----------- ------------ Class A (unlimited shares authorized): Net assets.................................................. $51,961,305 $39,646,389 $88,534,522 $66,962,905 $124,256,604 Shares of beneficial interest issued and outstanding........ 2,772,219 2,053,597 4,007,967 4,215,801 7,862,910 Net asset value and redemption price per share.............. $ 18.74 $ 19.31 $ 22.09 $ 15.88 $ 15.80 Maximum sales charge (5.75% of offering price).............. 1.14 1.18 1.35 0.97 0.96 ----------- ----------- ----------- ----------- ------------ - Maximum offering price to public............................ $ 19.88 $ 20.49 $ 23.44 $ 16.85 $ 16.76 =========== =========== =========== =========== ============ = Class B (unlimited shares authorized): Net assets.................................................. $14,314,288 $15,229,103 $10,701,236 $19,562,062 $ 14,713,809 Shares of beneficial interest issued and outstanding........ 866,318 895,992 557,455 1,317,009 933,075 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge) $ 16.52 $ 17.00 $ 19.20 $ 14.85 $ 15.77 =========== =========== =========== =========== ============ = Class C (unlimited shares authorized): Net assets.................................................. $ 3,958,948 $ 8,229,981 $ 5,798,425 $23,850,525 $ 13,890,689 Shares of beneficial interest issued and outstanding........ 241,501 485,367 300,134 1,607,077 879,234 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge) $ 16.39 $ 16.96 $ 19.32 $ 14.84 $ 15.80 =========== =========== =========== =========== ============ = Class I (unlimited shares authorized): Net assets.................................................. $ 672,866 $ 145,322 $ -- $ 322,780 $ 651,953 Shares of beneficial interest issued and outstanding........ 35,392 7,406 -- 20,219 41,211 Net asset value, offering and redemption price per share.... $ 19.01 $ 19.62 $ -- $ 15.96 $ 15.82 =========== =========== =========== =========== ============ = Class Z (unlimited shares authorized): Net assets.................................................. $ -- $ -- $ -- $ -- $ -- Shares of beneficial interest issued and outstanding........ -- -- -- -- -- Net asset value, offering and redemption price per share.... $ -- $ -- $ -- $ -- $ -- =========== =========== =========== =========== ============ =
See Notes to Financial Statements 7 SunAmerica Equity Funds STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2007 -- (continued)
International Equity Fund ------------- ASSETS: Long-term investment securities, at market value (unaffiliated)*........................................ $128,317,856 Short-term investment securities, at market value (unaffiliated)*....................................... -- Repurchase agreements (cost approximates market value).................................................. 2,952,000 ------------ Total investments..................................................................................... 131,269,856 ------------ Cash.................................................................................................... 503 Foreign cash*........................................................................................... 151,836 Receivable for: Fund shares sold...................................................................................... 143,633 Dividends and interest................................................................................ 323,014 Investments sold...................................................................................... 2,787,628 Prepaid expenses and other assets....................................................................... 1,831 Due from investment adviser for expense reimbursements/fee waivers...................................... -- ------------ Total assets............................................................................................ 134,678,301 ------------ LIABILITIES: Payable for: Fund shares redeemed.................................................................................. 153,722 Investments purchased................................................................................. 3,581,559 Interest on securities sold short..................................................................... -- Investment advisory and management fees............................................................... 101,319 Distribution and service maintenance fees............................................................. 58,718 Transfer agent fees and expenses...................................................................... 35,170 Trustees' fees and expenses........................................................................... 18,682 Other accrued expenses................................................................................ 111,856 Due to investment adviser from expense recoupment....................................................... 21,186 Due to custodian........................................................................................ -- Securities sold short, at market value#................................................................. -- ------------ Total liabilities....................................................................................... 4,082,212 ------------ Net Assets.............................................................................................. $130,596,089 ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $.01 par value........................................................... $ 67,692 Paid-in capital......................................................................................... 113,039,175 ------------ 113,106,867 Accumulated undistributed net investment income (loss).................................................. (125,271) Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short and foreign exchange transactions................................................ (5,685,106) Unrealized appreciation (depreciation) on investments................................................... 23,305,040 Unrealized foreign exchange gain (loss) on other assets and liabilities................................. (5,441) Unrealized appreciation (depreciation) on securities sold short......................................... -- ------------ Net Assets............................................................................................ $130,596,089 ============ *Cost Long-term investment securities (unaffiliated)........................................................ $105,012,816 ============ Short-term investment securities (unaffiliated)....................................................... $ -- ============ Foreign cash.......................................................................................... $ 147,981 ============ # Proceeds from securities sold short................................................................... $ -- ============
Value Fund ------------ ASSETS: Long-term investment securities, at market value (unaffiliated)*........................................ $215,107,719 Short-term investment securities, at market value (unaffiliated)*....................................... -- Repurchase agreements (cost approximates market value).................................................. 13,190,000 ------------ Total investments..................................................................................... 228,297,719 ------------ Cash.................................................................................................... 697 Foreign cash*........................................................................................... -- Receivable for: Fund shares sold...................................................................................... 111,099 Dividends and interest................................................................................ 236,545 Investments sold...................................................................................... 2,416,575 Prepaid expenses and other assets....................................................................... 25,335 Due from investment adviser for expense reimbursements/fee waivers...................................... -- ------------ Total assets............................................................................................ 231,087,970 ------------ LIABILITIES: Payable for: Fund shares redeemed.................................................................................. 323,601 Investments purchased................................................................................. 3,377,399 Interest on securities sold short..................................................................... -- Investment advisory and management fees............................................................... 184,307 Distribution and service maintenance fees............................................................. 89,799 Transfer agent fees and expenses...................................................................... 62,778 Trustees' fees and expenses........................................................................... 33,719 Other accrued expenses................................................................................ 101,840 Due to investment adviser from expense recoupment....................................................... 22,508 Due to custodian........................................................................................ -- Securities sold short, at market value#................................................................. -- ------------ Total liabilities....................................................................................... 4,195,951 ------------ Net Assets.............................................................................................. $226,892,019 ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $.01 par value........................................................... $ 118,705 Paid-in capital......................................................................................... 176,703,419 ------------ 176,822,124 Accumulated undistributed net investment income (loss).................................................. 1,613,189 Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short and foreign exchange transactions................................................ 27,021,207 Unrealized appreciation (depreciation) on investments................................................... 21,435,499 Unrealized foreign exchange gain (loss) on other assets and liabilities................................. -- Unrealized appreciation (depreciation) on securities sold short......................................... -- ------------ Net Assets............................................................................................ $226,892,019 ============ *Cost Long-term investment securities (unaffiliated)........................................................ $193,672,220 ============ Short-term investment securities (unaffiliated)....................................................... $ -- ============ Foreign cash.......................................................................................... $ -- ============ # Proceeds from securities sold short................................................................... $ -- ============
Disciplined Growth Fund@ ------------ ASSETS: Long-term investment securities, at market value (unaffiliated)*........................................ $ 60,358,998 Short-term investment securities, at market value (unaffiliated)*....................................... -- Repurchase agreements (cost approximates market value).................................................. 522,000 ------------ Total investments..................................................................................... 60,880,998 ------------ Cash.................................................................................................... -- Foreign cash*........................................................................................... 55,880 Receivable for: Fund shares sold...................................................................................... 312,532 Dividends and interest................................................................................ 41,890 Investments sold...................................................................................... 1,212,371 Prepaid expenses and other assets....................................................................... 52,490 Due from investment adviser for expense reimbursements/fee waivers...................................... -- ------------ Total assets............................................................................................ 62,556,161 ------------ LIABILITIES: Payable for: Fund shares redeemed.................................................................................. 70,123 Investments purchased................................................................................. 1,920,300 Interest on securities sold short..................................................................... -- Investment advisory and management fees............................................................... 40,367 Distribution and service maintenance fees............................................................. 34,451 Transfer agent fees and expenses...................................................................... 14,269 Trustees' fees and expenses........................................................................... 11,056 Other accrued expenses................................................................................ 59,407 Due to investment adviser from expense recoupment....................................................... 12,956 Due to custodian........................................................................................ 16,288 Securities sold short, at market value#................................................................. -- ------------ Total liabilities....................................................................................... 2,179,217 ------------ Net Assets.............................................................................................. $ 60,376,944 ============ NET ASSETS REPRESENTED BY: Shares of beneficial interest, $.01 par value........................................................... $ 35,556 Paid-in capital......................................................................................... 70,456,975 ------------ 70,492,531 Accumulated undistributed net investment income (loss).................................................. (9,070) Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short and foreign exchange transactions................................................ (18,802,292) Unrealized appreciation (depreciation) on investments................................................... 8,693,094 Unrealized foreign exchange gain (loss) on other assets and liabilities................................. 2,681 Unrealized appreciation (depreciation) on securities sold short......................................... -- ------------ Net Assets............................................................................................ $ 60,376,944 ============ *Cost Long-term investment securities (unaffiliated)........................................................ $ 51,665,904 ============ Short-term investment securities (unaffiliated)....................................................... $ -- ============ Foreign cash.......................................................................................... $ 53,266 ============ # Proceeds from securities sold short................................................................... $ -- ============
International Small-Cap Fund ------------- ASSETS: Long-term investment securities, at market value (unaffiliated)*........................................ $35,718,643 Short-term investment securities, at market value (unaffiliated)*....................................... 1,284,000 Repurchase agreements (cost approximates market value).................................................. -- ----------- Total investments..................................................................................... 37,002,643 ----------- Cash.................................................................................................... 2,166 Foreign cash*........................................................................................... 456,100 Receivable for: Fund shares sold...................................................................................... 45,596 Dividends and interest................................................................................ 67,434 Investments sold...................................................................................... 157,052 Prepaid expenses and other assets....................................................................... 1,446 Due from investment adviser for expense reimbursements/fee waivers...................................... 3,598 ----------- Total assets............................................................................................ 37,736,035 ----------- LIABILITIES: Payable for: Fund shares redeemed.................................................................................. 7,691 Investments purchased................................................................................. 218,784 Interest on securities sold short..................................................................... -- Investment advisory and management fees............................................................... 33,955 Distribution and service maintenance fees............................................................. 13,686 Transfer agent fees and expenses...................................................................... 9,947 Trustees' fees and expenses........................................................................... 952 Other accrued expenses................................................................................ 68,046 Due to investment adviser from expense recoupment....................................................... -- Due to custodian........................................................................................ -- Securities sold short, at market value#................................................................. -- ----------- Total liabilities....................................................................................... 353,061 ----------- Net Assets.............................................................................................. $37,382,974 =========== NET ASSETS REPRESENTED BY: Shares of beneficial interest, $.01 par value........................................................... $ 26,742 Paid-in capital......................................................................................... 32,957,984 ----------- 32,984,726 Accumulated undistributed net investment income (loss).................................................. (250) Accumulated undistributed net realized gain (loss) on investments, futures contracts, options contracts, securities sold short and foreign exchange transactions................................................ (93,570) Unrealized appreciation (depreciation) on investments................................................... 4,484,214 Unrealized foreign exchange gain (loss) on other assets and liabilities................................. 7,854 Unrealized appreciation (depreciation) on securities sold short......................................... -- ----------- Net Assets............................................................................................ $37,382,974 =========== *Cost Long-term investment securities (unaffiliated)........................................................ $31,234,429 =========== Short-term investment securities (unaffiliated)....................................................... $ 1,284,000 =========== Foreign cash.......................................................................................... $ 449,293 =========== # Proceeds from securities sold short................................................................... $ -- ===========
- -------- @ See Note 1 See Notes to Financial Statements 8 SunAmerica Equity Funds STATEMENT OF ASSETS AND LIABILITIES -- September 30,2007 -- (continued)
International Disciplined International Equity Value Growth Small-Cap Fund Fund Fund@ Fund ------------- ------------ ----------- ------------- Class A (unlimited shares authorized): Net assets.................................................. $75,407,948 $126,787,511 $25,773,505 $30,845,317 Shares of beneficial interest issued and outstanding........ 3,808,504 6,562,962 1,478,173 2,203,057 Net asset value and redemption price per share.............. $ 19.80 $ 19.32 $ 17.44 $ 14.00 Maximum sales charge (5.75% of offering price).............. 1.21 1.18 1.06 0.85 ----------- ------------ ----------- ----------- Maximum offering price to public............................ $ 21.01 $ 20.50 $ 18.50 $ 14.85 =========== ============ =========== =========== Class B (unlimited shares authorized): Net assets.................................................. $20,508,649 $ 39,355,021 $ 5,676,359 $ 1,181,050 Shares of beneficial interest issued and outstanding........ 1,111,961 2,157,559 340,991 85,081 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge) $ 18.44 $ 18.24 $ 16.65 $ 13.88 =========== ============ =========== =========== Class C (unlimited shares authorized): Net assets.................................................. $26,682,694 $ 26,071,162 $28,927,080 $ 5,356,607 Shares of beneficial interest issued and outstanding........ 1,448,187 1,429,512 1,736,422 386,017 Net asset value, offering and redemption price per share (excluding any applicable contingent deferred sales charge) $ 18.42 $ 18.24 $ 16.66 $ 13.88 =========== ============ =========== =========== Class I (unlimited shares authorized): Net assets.................................................. $ 7,996,798 $ 33,930 $ -- $ -- Shares of beneficial interest issued and outstanding........ 400,586 1,757 -- -- Net asset value, offering and redemption price per share.... $ 19.96 $ 19.31 $ -- $ -- =========== ============ =========== =========== Class Z (unlimited shares authorized): Net assets.................................................. $ -- $ 34,644,395 $ -- $ -- Shares of beneficial interest issued and outstanding........ -- 1,718,743 -- -- Net asset value, offering and redemption price per share.... $ -- $ 20.16 $ -- $ -- =========== ============ =========== ===========
- -------- @ See Note 1 See Notes to Financial Statements 9 SunAmerica Equity Funds STATEMENT OF OPERATIONS -- For the year ended September 30, 2007
Blue Chip Growth Growth Opportunities Fund Fund ----------- ------------- INVESTMENT INCOME: Dividends (unaffiliated).......................................................................... $ 765,442 $ 216,672 Interest (unaffiliated)........................................................................... 81,843 358,661 ----------- ----------- Total investment income*......................................................................... 847,285 575,333 ----------- ----------- EXPENSES: Investment advisory and management fees........................................................... 526,395 521,863 Distribution and service maintenance fees Class A.......................................................................................... 172,476 138,628 Class B.......................................................................................... 160,897 202,518 Class C.......................................................................................... 41,792 95,115 Service fees Class I.............................................................................. 1,595 526 Transfer agent fees and expenses Class A.......................................................................................... 136,703 112,096 Class B.......................................................................................... 53,949 63,646 Class C.......................................................................................... 13,666 29,242 Class I.......................................................................................... 1,187 750 Registration fees Class A.......................................................................................... 18,321 17,556 Class B.......................................................................................... 13,462 12,973 Class C.......................................................................................... 12,129 12,767 Class I.......................................................................................... 11,801 11,673 Class Z.......................................................................................... -- -- Custodian and accounting fees..................................................................... 38,564 41,158 Reports to shareholders........................................................................... 34,077 16,013 Audit and tax fees................................................................................ 32,700 35,707 Legal fees........................................................................................ 13,831 16,720 Trustees' fees and expenses....................................................................... 5,512 5,644 Interest expense.................................................................................. 56 -- Other expenses.................................................................................... 17,899 20,980 ----------- ----------- Total expenses before fee waivers, expense reimbursements, expense recoupments, custody credits and fees paid indirectly........................................................................ 1,307,012 1,355,575 Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)................ (22,744) (15,696) Custody credits earned on cash balances.......................................................... (394) (1,568) Fees paid indirectly (Note 5).................................................................... (7,908) (33,696) ----------- ----------- Net expenses..................................................................................... 1,275,966 1,304,615 ----------- ----------- Net investment income (loss)........................................................................ (428,681) (729,282) ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on investments (unaffiliated)**............................................ 4,257,405 11,409,851 Net realized foreign exchange gain (loss) on other assets and liabilities........................... 217 -- Net realized gain (loss) on securities sold short................................................... -- -- ----------- ----------- Net realized gain (loss) on investments and foreign currencies...................................... 4,257,622 11,409,851 ----------- ----------- Change in unrealized appreciation (depreciation) on investments (unaffiliated)...................... 8,515,725 (1,842,299) Change in unrealized foreign exchange gain (loss) on other assets and liabilities................... -- -- Change in unrealized appreciation (depreciation) on securities sold short........................... -- -- Change in accrued capital gains tax on unrealized appreciation (depreciation)....................... -- -- ----------- ----------- Net unrealized gain (loss) on investments and foreign currencies.................................... 8,515,725 (1,842,299) ----------- ----------- Net realized and unrealized gain (loss) on investments and foreign currencies....................... 12,773,347 9,567,552 ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................................... $12,344,666 $ 8,838,270 =========== =========== - -------- *Net of foreign withholding taxes on interest and dividends of...................................... $ 2,692 $ -- =========== =========== **Net of foreign withholding taxes on capital gains of.............................................. $ -- $ -- =========== ===========
New Growth and Century Income Fund Fund ----------- ----------- INVESTMENT INCOME: Dividends (unaffiliated).......................................................................... $ 629,074 $ 2,144,345 Interest (unaffiliated)........................................................................... 710,693 128,115 ----------- ----------- Total investment income*......................................................................... 1,339,767 2,272,460 ----------- ----------- EXPENSES: Investment advisory and management fees........................................................... 753,123 849,237 Distribution and service maintenance fees Class A.......................................................................................... 300,107 224,001 Class B.......................................................................................... 103,665 235,381 Class C.......................................................................................... 43,049 253,771 Service fees Class I.............................................................................. -- 790 Transfer agent fees and expenses Class A.......................................................................................... 228,959 175,664 Class B.......................................................................................... 31,910 67,255 Class C.......................................................................................... 14,141 67,837 Class I.......................................................................................... -- 560 Registration fees Class A.......................................................................................... 23,868 18,146 Class B.......................................................................................... 11,505 14,627 Class C.......................................................................................... 11,699 14,067 Class I.......................................................................................... -- 11,768 Class Z.......................................................................................... -- -- Custodian and accounting fees..................................................................... 46,554 39,316 Reports to shareholders........................................................................... 36,689 36,085 Audit and tax fees................................................................................ 29,162 31,761 Legal fees........................................................................................ 17,845 11,578 Trustees' fees and expenses....................................................................... 6,715 8,714 Interest expense.................................................................................. -- 1,266 Other expenses.................................................................................... 15,485 17,624 ----------- ----------- Total expenses before fee waivers, expense reimbursements, expense recoupments, custody credits and fees paid indirectly........................................................................ 1,674,476 2,079,448 Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4)................ (15,092) (26,424) Custody credits earned on cash balances.......................................................... (2,512) (392) Fees paid indirectly (Note 5).................................................................... (22,812) (22,522) ----------- ----------- Net expenses..................................................................................... 1,634,060 2,030,110 ----------- ----------- Net investment income (loss)........................................................................ (294,293) 242,350 ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on investments (unaffiliated)**............................................ 18,717,898 15,197,392 Net realized foreign exchange gain (loss) on other assets and liabilities........................... (190) 530 Net realized gain (loss) on securities sold short................................................... -- -- ----------- ----------- Net realized gain (loss) on investments and foreign currencies...................................... 18,717,708 15,197,922 ----------- ----------- Change in unrealized appreciation (depreciation) on investments (unaffiliated)...................... (1,684,002) 3,277,428 Change in unrealized foreign exchange gain (loss) on other assets and liabilities................... -- -- Change in unrealized appreciation (depreciation) on securities sold short........................... -- -- Change in accrued capital gains tax on unrealized appreciation (depreciation)....................... -- -- ----------- ----------- Net unrealized gain (loss) on investments and foreign currencies.................................... (1,684,002) 3,277,428 ----------- ----------- Net realized and unrealized gain (loss) on investments and foreign currencies....................... 17,033,706 18,475,350 ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................................... $16,739,413 $18,717,700 =========== =========== - -------- *Net of foreign withholding taxes on interest and dividends of...................................... $ 8,522 $ 10,577 =========== =========== **Net of foreign withholding taxes on capital gains of.............................................. $ -- $ -- =========== ===========
See Notes to Financial Statements 10 SunAmerica Equity Funds STATEMENT OF OPERATIONS -- For the year ended September 30, 2007 -- (continued)
Balanced International Assets Equity Value Fund Fund Fund ----------- ------------- ----------- INVESTMENT INCOME: Dividends (unaffiliated)............................................................ $ 1,858,363 $ 2,438,911 $ 5,584,711 Interest (unaffiliated)............................................................. 3,233,679 36,467 436,609 ----------- ----------- ----------- Total investment income*........................................................... 5,092,042 2,475,378 6,021,320 ----------- ----------- ----------- EXPENSES: Investment advisory and management fees............................................. 1,190,430 1,226,399 2,338,256 Distribution and service maintenance fees Class A............................................................................ 438,898 240,633 442,382 Class B............................................................................ 178,854 213,036 447,702 Class C............................................................................ 147,081 240,872 326,155 Service fees Class I................................................................ 1,828 21,242 120 Transfer agent fees and expenses Class A............................................................................ 353,114 176,946 317,337 Class B............................................................................ 53,809 64,643 121,467 Class C............................................................................ 40,287 64,062 80,488 Class I............................................................................ 1,719 19,032 73 Registration fees Class A............................................................................ 22,338 19,728 21,920 Class B............................................................................ 14,497 14,364 16,223 Class C............................................................................ 12,591 15,636 14,075 Class I............................................................................ 11,824 12,419 10,216 Class Z............................................................................ -- -- 13,583 Custodian and accounting fees....................................................... 111,810 158,688 60,182 Reports to shareholders............................................................. 66,972 39,233 49,548 Audit and tax fees.................................................................. 41,994 35,855 34,413 Legal fees.......................................................................... 14,370 12,827 14,105 Trustees' fees and expenses......................................................... 12,133 8,624 16,806 Interest expense.................................................................... 244 5,240 -- Other expenses...................................................................... 19,141 15,542 21,421 ----------- ----------- ----------- Total expenses before fee waivers, expense reimbursements, expense recoupments, custody credits and fees paid indirectly.......................................... 2,733,934 2,605,021 4,346,472 Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4).. (44,098) 19,501 (203,086) Custody credits earned on cash balances............................................ (1,024) (7,821) (55) Fees paid indirectly (Note 5)...................................................... (12,237) -- (24,710) ----------- ----------- ----------- Net expenses....................................................................... 2,676,575 2,616,701 4,118,621 ----------- ----------- ----------- Net investment income (loss).......................................................... 2,415,467 (141,323) 1,902,699 ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on investments (unaffiliated)**.............................. 9,996,465 13,579,220 30,253,126 Net realized foreign exchange gain (loss) on other assets and liabilities............. 513 (107,574) 1,418 Net realized gain (loss) on securities sold short..................................... 11,757 -- -- ----------- ----------- ----------- Net realized gain (loss) on investments and foreign currencies........................ 10,008,735 13,471,646 30,254,544 ----------- ----------- ----------- Change in unrealized appreciation (depreciation) on investments (unaffiliated)........ 6,125,753 13,668,414 1,556,544 Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... -- (4,225) -- Change in unrealized appreciation (depreciation) on securities sold short............. 6,304 -- -- Change in accrued capital gains tax on unrealized appreciation (depreciation)......... -- -- -- ----------- ----------- ----------- Net unrealized gain (loss) on investments and foreign currencies...................... 6,132,057 13,664,189 1,556,544 ----------- ----------- ----------- Net realized and unrealized gain (loss) on investments and foreign currencies......... 16,140,792 27,135,835 31,811,088 ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $18,556,259 $26,994,512 $33,713,787 =========== =========== =========== - -------- *Net of foreign withholding taxes on interest and dividends of........................ $ 6,758 $ 259,852 $ 23,594 =========== =========== =========== **Net of foreign withholding taxes on capital gains of................................ $ -- $ 6 $ -- =========== =========== ===========
See Notes to Financial Statements 11 SunAmerica Equity Funds STATEMENT OF OPERATIONS -- For the year ended September 30, 2007-- (continued)
Disciplined International Growth Small-Cap Fund@ Fund ----------- ------------- INVESTMENT INCOME: Dividends (unaffiliated)............................................................ $ 546,884 $ 491,039 Interest (unaffiliated)............................................................. 58,531 19,811 ----------- ---------- Total investment income*........................................................... 605,415 510,850 ----------- ---------- EXPENSES: Investment advisory and management fees............................................. 480,141 366,797 Distribution and service maintenance fees Class A............................................................................ 78,614 94,610 Class B............................................................................ 71,215 8,453 Class C............................................................................ 269,047 40,188 Service fees Class I................................................................ -- -- Transfer agent fees and expenses Class A............................................................................ 57,241 62,407 Class B............................................................................ 19,699 2,643 Class C............................................................................ 64,941 10,075 Class I............................................................................ -- -- Registration fees Class A............................................................................ 23,232 14,498 Class B............................................................................ 14,275 13,737 Class C............................................................................ 20,357 14,154 Class I............................................................................ -- -- Class Z............................................................................ -- -- Custodian and accounting fees....................................................... 28,319 108,347 Reports to shareholders............................................................. -- 18,790 Audit and tax fees.................................................................. 37,533 39,244 Legal fees.......................................................................... 19,569 11,987 Trustees' fees and expenses......................................................... 4,279 2,063 Interest expense.................................................................... 19,732 -- Other expenses...................................................................... 23,607 927 ----------- ---------- Total expenses before fee waivers, expense reimbursements, expense recoupments, custody credits and fees paid indirectly.......................................... 1,231,801 808,920 Net (fees waived and expenses reimbursed)/recouped by investment adviser (Note 4).. (188,591) (170,983) Custody credits earned on cash balances............................................ (2,975) (307) Fees paid indirectly (Note 5)...................................................... (66,730) -- ----------- ---------- Net expenses....................................................................... 973,505 637,630 ----------- ---------- Net investment income (loss).......................................................... (368,090) (126,780) ----------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on investments (unaffiliated)**.............................. 10,473,517 1,248,744 Net realized foreign exchange gain (loss) on other assets and liabilities............. 13,786 (8,201) Net realized gain (loss) on securities sold short..................................... -- -- ----------- ---------- Net realized gain (loss) on investments and foreign currencies........................ 10,487,303 1,240,543 ----------- ---------- Change in unrealized appreciation (depreciation) on investments (unaffiliated)........ 5,719,639 5,850,248 Change in unrealized foreign exchange gain (loss) on other assets and liabilities..... 2,821 11,152 Change in unrealized appreciation (depreciation) on securities sold short............. -- -- Change in accrued capital gains tax on unrealized appreciation (depreciation)......... -- 149 ----------- ---------- Net unrealized gain (loss) on investments and foreign currencies...................... 5,722,460 5,861,549 ----------- ---------- Net realized and unrealized gain (loss) on investments and foreign currencies......... 16,209,763 7,102,092 ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $15,841,673 $6,975,312 =========== ========== - -------- *Net of foreign withholding taxes on interest and dividends of........................ $ 16,532 $ 48,687 =========== ========== **Net of foreign withholding taxes on capital gains of................................ $ -- $ -- =========== ==========
- -------- @ See Note 1 See Notes to Financial Statements 12 SunAmerica Equity Funds STATEMENT OF CHANGES IN NET ASSETS
Blue Chip Growth Fund -------------------------- For the year For the year ended ended September 30, September 30, 2007 2006 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ (428,681) $ (532,478) Net realized gain (loss) on investments and foreign currencies........................ 4,257,622 5,198,168 Net unrealized gain (loss) on investments and foreign currencies...................... 8,515,725 (2,357,467) ------------ ------------ Net increase (decrease) in net assets resulting from operations......................... 12,344,666 2,308,223 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)....................................................... -- -- Net investment income (Class B)....................................................... -- -- Net investment income (Class C)....................................................... -- -- Net investment income (Class I)....................................................... -- -- Net investment income (Class Z)....................................................... -- -- Net realized gain on securities (Class A)............................................. -- -- Net realized gain on securities (Class B)............................................. -- -- Net realized gain on securities (Class C)............................................. -- -- Net realized gain on securities (Class I)............................................. -- -- Net realized gain on securities (Class Z)............................................. -- -- ------------ ------------ Total distributions to shareholders..................................................... -- -- ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (13,625,270) (16,165,295) ------------ ------------ Total increase (decrease) in net assets................................................. (1,280,604) (13,857,072) NET ASSETS: Beginning of period..................................................................... 72,188,011 86,045,083 ------------ ------------ End of period+.......................................................................... $ 70,907,407 $ 72,188,011 ============ ============ - -------- +Includes accumulated undistributed net investment income (loss)........................ $ (28,338) $ (29,423) ============ ============
Growth Opportunities Fund -------------------------- For the year For the year ended ended September 30, September 30, 2007 2006 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ (729,282) $ (791,253) Net realized gain (loss) on investments and foreign currencies........................ 11,409,851 13,948,650 Net unrealized gain (loss) on investments and foreign currencies...................... (1,842,299) (9,975,076) ------------ ------------ Net increase (decrease) in net assets resulting from operations......................... 8,838,270 3,182,321 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)....................................................... -- -- Net investment income (Class B)....................................................... -- -- Net investment income (Class C)....................................................... -- -- Net investment income (Class I)....................................................... -- -- Net investment income (Class Z)....................................................... -- -- Net realized gain on securities (Class A)............................................. -- -- Net realized gain on securities (Class B)............................................. -- -- Net realized gain on securities (Class C)............................................. -- -- Net realized gain on securities (Class I)............................................. -- -- Net realized gain on securities (Class Z)............................................. -- -- ------------ ------------ Total distributions to shareholders..................................................... -- -- ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (14,171,956) (20,760,692) ------------ ------------ Total increase (decrease) in net assets................................................. (5,333,686) (17,578,371) NET ASSETS: Beginning of period..................................................................... 68,584,481 86,162,852 ------------ ------------ End of period+.......................................................................... $ 63,250,795 $ 68,584,481 ============ ============ - -------- +Includes accumulated undistributed net investment income (loss)........................ $ 24,866 $ (25,397) ============ ============
See Notes to Financial Statements 13 SunAmerica Equity Funds STATEMENT OF CHANGES IN NET ASSETS -- (continued)
New Century Fund -------------------------- For the year For the year ended ended September 30, September 30, 2007 2006 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ (294,293) $ (439,624) Net realized gain (loss) on investments and foreign currencies........................ 18,717,708 11,815,681 Net unrealized gain (loss) on investments and foreign currencies...................... (1,684,002) (8,389,295) ------------ ------------ Net increase (decrease) in net assets resulting from operations......................... 16,739,413 2,986,762 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)....................................................... -- -- Net investment income (Class B)....................................................... -- -- Net investment income (Class C)....................................................... -- -- Net investment income (Class I)....................................................... -- Net investment income (Class Z)....................................................... -- -- Net realized gain on securities (Class A)............................................. -- -- Net realized gain on securities (Class B)............................................. -- -- Net realized gain on securities (Class C)............................................. -- -- Net realized gain on securities (Class I)............................................. -- Net realized gain on securities (Class Z)............................................. -- -- ------------ ------------ Total distributions to shareholders..................................................... -- -- ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 8) 3,329,307 (17,643,382) ------------ ------------ Total increase (decrease) in net assets................................................. 20,068,720 (14,656,620) NET ASSETS: Beginning of period..................................................................... 84,965,463 99,622,083 ------------ ------------ End of period+.......................................................................... $105,034,183 $ 84,965,463 ============ ============ - -------- +Includes accumulated undistributed net investment income (loss)........................ $ (49,536) $ (47,113) ============ ============
Growth and Income Fund -------------------------- For the year For the year ended ended September 30, September 30, 2007 2006 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ 242,350 $ (32,741) Net realized gain (loss) on investments and foreign currencies........................ 15,197,922 14,027,002 Net unrealized gain (loss) on investments and foreign currencies...................... 3,277,428 (4,359,123) ------------ ------------ Net increase (decrease) in net assets resulting from operations......................... 18,717,700 9,635,138 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)....................................................... -- (99,245) Net investment income (Class B)....................................................... -- -- Net investment income (Class C)....................................................... -- -- Net investment income (Class I)....................................................... -- (2,121) Net investment income (Class Z)....................................................... -- -- Net realized gain on securities (Class A)............................................. -- -- Net realized gain on securities (Class B)............................................. -- -- Net realized gain on securities (Class C)............................................. -- -- Net realized gain on securities (Class I)............................................. -- -- Net realized gain on securities (Class Z)............................................. -- -- ------------ ------------ Total distributions to shareholders..................................................... -- (101,366) ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (24,101,118) (38,443,036) ------------ ------------ Total increase (decrease) in net assets................................................. (5,383,418) (28,909,264) NET ASSETS: Beginning of period..................................................................... 116,081,690 144,990,954 ------------ ------------ End of period+.......................................................................... $110,698,272 $116,081,690 ============ ============ - -------- +Includes accumulated undistributed net investment income (loss)........................ $ 204,199 $ (38,681) ============ ============
See Notes to Financial Statements 14 SunAmerica Equity Funds STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Balanced Assets Fund -------------------------- For the year For the year ended ended September 30, September 30, 2007 2006 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ 2,415,467 $ 2,524,412 Net realized gain (loss) on investments and foreign currencies........................ 10,008,735 5,408,614 Net unrealized gain (loss) on investments and foreign currencies...................... 6,132,057 1,638,175 ------------ ------------ Net increase (decrease) in net assets resulting from operations......................... 18,556,259 9,571,201 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)....................................................... (1,990,178) (2,367,072) Net investment income (Class B)....................................................... (133,492) (256,828) Net investment income (Class C)....................................................... (113,780) (176,512) Net investment income (Class I)....................................................... (13,500) (15,164) Net investment income (Class Z)....................................................... -- -- Net realized gain on securities (Class A)............................................. -- -- Net realized gain on securities (Class B)............................................. -- -- Net realized gain on securities (Class C)............................................. -- -- Net realized gain on securities (Class I)............................................. -- -- Net realized gain on securities (Class Z)............................................. -- -- ------------ ------------ Total distributions to shareholders..................................................... (2,250,950) (2,815,576) ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (26,486,903) (35,679,423) ------------ ------------ Total increase (decrease) in net assets................................................. (10,181,594) (28,923,798) NET ASSETS: Beginning of period..................................................................... 163,694,649 192,618,447 ------------ ------------ End of period+.......................................................................... $153,513,055 $163,694,649 ============ ============ - -------- +Includes accumulated undistributed net investment income (loss)........................ $ 236,935 $ (88,894) ============ ============
International Equity Fund -------------------------- For the year For the year ended ended September 30, September 30, 2007 2006 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ (141,323) $ (372,437) Net realized gain (loss) on investments and foreign currencies........................ 13,471,646 22,221,354 Net unrealized gain (loss) on investments and foreign currencies...................... 13,664,189 (2,823,314) ------------ ------------ Net increase (decrease) in net assets resulting from operations......................... 26,994,512 19,025,603 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)....................................................... -- -- Net investment income (Class B)....................................................... -- -- Net investment income (Class C)....................................................... -- -- Net investment income (Class I)....................................................... -- -- Net investment income (Class Z)....................................................... -- -- Net realized gain on securities (Class A)............................................. -- -- Net realized gain on securities (Class B)............................................. -- -- Net realized gain on securities (Class C)............................................. -- -- Net realized gain on securities (Class I)............................................. -- -- Net realized gain on securities (Class Z)............................................. -- -- ------------ ------------ Total distributions to shareholders..................................................... -- -- ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (10,955,655) 8,501,813 ------------ ------------ Total increase (decrease) in net assets................................................. 16,038,857 27,527,416 NET ASSETS: Beginning of period..................................................................... 114,557,232 87,029,816 ------------ ------------ End of period+.......................................................................... $130,596,089 $114,557,232 ============ ============ - -------- +Includes accumulated undistributed net investment income (loss)........................ $ (125,271) $ (116,139) ============ ============
See Notes to Financial Statements 15 SunAmerica Equity Funds STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Value Fund -------------------------- For the year For the year ended ended September 30, September 30, 2007 2006 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ 1,902,699 $ 1,551,527 Net realized gain (loss) on investments and foreign currencies........................ 30,254,544 22,506,011 Net unrealized gain (loss) on investments and foreign currencies...................... 1,556,544 1,434,818 ------------ ------------ Net increase (decrease) in net assets resulting from operations......................... 33,713,787 25,492,356 ------------ ------------ Distributions to shareholders from: Net investment income (Class A)....................................................... (1,037,323) (937,019) Net investment income (Class B)....................................................... (138,581) (80,387) Net investment income (Class C)....................................................... (102,287) (58,523) Net investment income (Class I)....................................................... (285) (27,586) Net investment income (Class Z)....................................................... (294,735) (189,399) Net realized gain on securities (Class A)............................................. (13,182,325) (8,311,112) Net realized gain on securities (Class B)............................................. (5,278,693) (3,719,250) Net realized gain on securities (Class C)............................................. (3,896,204) (2,707,693) Net realized gain on securities (Class I)............................................. (3,186) (214,316) Net realized gain on securities (Class Z)............................................. (2,693,654) (1,144,085) ------------ ------------ Total distributions to shareholders..................................................... (26,627,273) (17,389,370) ------------ ------------ Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (5,899,264) (32,363,644) ------------ ------------ Total increase (decrease) in net assets................................................. 1,187,250 (24,260,658) NET ASSETS: Beginning of period..................................................................... 225,704,769 249,965,427 ------------ ------------ End of period+.......................................................................... $226,892,019 $225,704,769 ============ ============ - -------- +Includes accumulated undistributed net investment income (loss)........................ $ 1,613,189 $ 1,282,283 ============ ============
See Notes to Financial Statements 16 SunAmerica Equity Funds STATEMENT OF CHANGES IN NET ASSETS -- (continued)
Disciplined Growth Fund# -------------------------- For the year For the year ended ended September 30, September 30, 2007 2006 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ (359,066) $ (247,089) Net realized gain (loss) on investments and foreign currencies........................ 10,478,279 2,537,901 Net unrealized gain (loss) on investments and foreign currencies...................... 5,722,460 950,584 ------------ ----------- Net increase (decrease) in net assets resulting from operations......................... 15,841,673 3,241,396 ------------ ----------- Distributions to shareholders from: Net investment income (Class A)....................................................... -- (51,047) Net investment income (Class B)....................................................... -- (1,497) Net investment income (Class C)....................................................... -- (1,412) Net investment income (Class I)....................................................... -- -- Net investment income (Class Z)....................................................... -- -- Net realized gain on securities (Class A)............................................. -- -- Net realized gain on securities (Class B)............................................. -- -- Net realized gain on securities (Class C)............................................. -- -- Net realized gain on securities (Class I)............................................. -- -- Net realized gain on securities (Class Z)............................................. -- -- ------------ ----------- Total distributions to shareholders..................................................... -- (53,956) ------------ ----------- Net increase (decrease) in net assets resulting from capital share transactions (Note 8) (14,243,867) 15,240,310 ------------ ----------- Total increase (decrease) in net assets................................................. 1,597,806 18,427,750 NET ASSETS: Beginning of period..................................................................... 58,779,138 40,351,388 ------------ ----------- End of period+.......................................................................... $ 60,376,944 $58,779,138 ============ =========== - -------- +Includes accumulated undistributed net investment income (loss)........................ $ (9,070) $ (62,579) ============ ===========
International Small-Cap Fund --------------------------- For the period For the year May 2, 2006@ ended through September 30, September 30, 2007 2006 ------------- -------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income (loss).......................................................... $ (126,780) $ (4,779) Net realized gain (loss) on investments and foreign currencies........................ 1,240,543 (1,276,207) Net unrealized gain (loss) on investments and foreign currencies...................... 5,861,549 (1,369,481) ----------- ----------- Net increase (decrease) in net assets resulting from operations......................... 6,975,312 (2,650,467) ----------- ----------- Distributions to shareholders from: Net investment income (Class A)....................................................... -- -- Net investment income (Class B)....................................................... -- -- Net investment income (Class C)....................................................... -- -- Net investment income (Class I)....................................................... -- -- Net investment income (Class Z)....................................................... -- -- Net realized gain on securities (Class A)............................................. -- -- Net realized gain on securities (Class B)............................................. -- -- Net realized gain on securities (Class C)............................................. -- -- Net realized gain on securities (Class I)............................................. -- -- Net realized gain on securities (Class Z)............................................. -- -- ----------- ----------- Total distributions to shareholders..................................................... -- -- ----------- ----------- Net increase (decrease) in net assets resulting from capital share transactions (Note 8) 4,903,738 28,154,391 ----------- ----------- Total increase (decrease) in net assets................................................. 11,879,050 25,503,924 NET ASSETS: Beginning of period..................................................................... 25,503,924 -- ----------- ----------- End of period+.......................................................................... $37,382,974 $25,503,924 =========== =========== - -------- +Includes accumulated undistributed net investment income (loss)........................ $ (250) $ -- =========== ===========
# See Note 1 @ Commencement of operations See Notes to Financial Statements 17 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS
BLUE CHIP GROWTH FUND --------------------- Net gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Ratio of Value investment realized Total from from net from Total Value end of expenses beginning income and investment investment capital distri- end of Total period to average Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets - ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ---------- Class A - - 09/30/03 $11.15 $(0.06) $2.03 $1.97 $-- $-- $-- $13.12 17.67% $64,672 1.54% 09/30/04 13.12 (0.08) 1.05 0.97 -- -- -- 14.09 7.39 62,316 1.60 09/30/05 14.09 (0.01) 1.13 1.12 -- -- -- 15.21 7.95 56,755 1.59 09/30/06 15.21 (0.07) 0.55 0.48 -- -- -- 15.69 3.16 49,539 1.55(3)(4) 09/30/07 15.69 (0.07) 3.12 3.05 -- -- -- 18.74 19.44 51,961 1.60(3)(4) Class B - - 09/30/03 $10.20 $(0.14) $1.84 $1.70 $-- $-- $-- $11.90 16.67% $30,263 2.32% 09/30/04 11.90 (0.16) 0.96 0.80 -- -- -- 12.70 6.72 27,946 2.26 09/30/05 12.70 (0.11) 1.02 0.91 -- -- -- 13.61 7.17 22,558 2.32 09/30/06 13.61 (0.17) 0.50 0.33 -- -- -- 13.94 2.42 17,479 2.29(3)(4) 09/30/07 13.94 (0.17) 2.75 2.58 -- -- -- 16.52 18.51 14,314 2.36(3)(4) Class C+ - - 09/30/03 $10.18 $(0.16) $1.85 $1.69 $-- $-- $-- $11.87 16.60% $ 7,286 2.44% 09/30/04 11.87 (0.18) 0.96 0.78 -- -- -- 12.65 6.57 6,458 2.37 09/30/05 12.65 (0.13) 1.01 0.88 -- -- -- 13.53 6.96 5,278 2.49 09/30/06 13.53 (0.17) 0.50 0.33 -- -- -- 13.86 2.44 4,528 2.30(3)(4) 09/30/07 13.86 (0.20) 2.73 2.53 -- -- -- 16.39 18.25 3,959 2.55(3)(4) Class I - - 09/30/03 $11.16 $(0.04) $2.04 $2.00 $-- $-- $-- $13.16 17.92% $19,778 1.33%(3) 09/30/04 13.16 (0.04) 1.05 1.01 -- -- -- 14.17 7.67 2,164 1.33(3) 09/30/05 14.17 0.03 1.14 1.17 -- -- -- 15.34 8.26 1,454 1.33(3) 09/30/06 15.34 (0.04) 0.57 0.53 -- -- -- 15.87 3.45 642 1.28(3)(4) 09/30/07 15.87 (0.02) 3.16 3.14 -- -- -- 19.01 19.79 673 1.32(3)(4)
Ratio of net investment income (loss) to average Portfolio net assets Turnover - ------------- --------- (0.50)% 114% (0.59) 145 (0.09) 120 (0.45)(3)(4) 154 (0.40)(3)(4) 72 (1.28)% 114% (1.25) 145 (0.80) 120 (1.20)(3)(4) 154 (1.14)(3)(4) 72 (1.40)% 114% (1.37) 145 (0.98) 120 (1.21)(3)(4) 154 (1.35)(3)(4) 72 (0.29)%(3) 114% (0.26)(3) 145 0.22(3) 120 (0.22)(3)(4) 154 (0.11)(3)(4) 72
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)Net of the following expense reimbursements/fee waivers (based on average net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07 -------- -------- -------- -------- -------- Blue Chip Growth Class A................ -- % -- % -- % 0.05% 0.01% Blue Chip Growth Class B................ -- -- -- 0.05 0.02 Blue Chip Growth Class C+............... -- -- -- 0.05 0.02 Blue Chip Growth Class I................ 0.33 0.13 0.49 1.15 1.92
(4)Includes expense reimbursements, but excludes expense reductions. If the expense reductions had been applied the ratio of expenses to average net assets would have been lower and the ratio of net investment income to average net assets would have been higher by:
09/30/06 09/30/07 -------- -------- Blue Chip Growth Class A................ 0.01% 0.01% Blue Chip Growth Class B................ 0.01 0.01 Blue Chip Growth Class C+............... 0.01 0.01 Blue Chip Growth Class I................ 0.01 0.01
+ Effective February 23, 2004, Class II shares were redesignated to Class C shares. See Notes to Financial Statements 18 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS -- (continued)
GROWTH OPPORTUNITIES FUND ------------------------- Net gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Ratio of Value investment realized Total from from net from Total Value end of expenses beginning income and investment investment capital distri- end of Total period to average Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets - ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ---------- Class A - - 09/30/03 $ 9.99 $(0.13) $3.88 $ 3.75 $-- $-- $-- $13.74 37.54% $62,600 1.63% 09/30/04 13.74 (0.16) 0.07 (0.09) -- -- -- 13.65 (0.66)(3) 49,918 1.58 09/30/05 13.65 (0.17) 2.79 2.62 -- -- -- 16.27 19.19 44,641 1.65 09/30/06 16.27 (0.12) 0.89 0.77 -- -- -- 17.04 4.73 37,382 1.59(4)(5) 09/30/07 17.04 (0.14) 2.41 2.27 -- -- -- 19.31 13.32 39,646 1.62(4)(5) Class B - - 09/30/03 $ 9.11 $(0.20) $3.53 $ 3.33 $-- $-- $-- $12.44 36.55% $38,870 2.36% 09/30/04 12.44 (0.24) 0.07 (0.17) -- -- -- 12.27 (1.37)(3) 31,429 2.27 09/30/05 12.27 (0.25) 2.50 2.25 -- -- -- 14.52 18.34 27,673 2.32 09/30/06 14.52 (0.21) 0.79 0.58 -- -- -- 15.10 3.99 21,500 2.30(4)(5) 09/30/07 15.10 (0.25) 2.15 1.90 -- -- -- 17.00 12.58 15,229 2.31(4)(5) Class C+ - - 09/30/03 $ 9.10 $(0.20) $3.53 $ 3.33 $-- $-- $-- $12.43 36.59% $19,808 2.33% 09/30/04 12.43 (0.24) 0.06 (0.18) -- -- -- 12.25 (1.45)(3) 14,599 2.29 09/30/05 12.25 (0.26) 2.51 2.25 -- -- -- 14.50 18.37 12,089 2.39 09/30/06 14.50 (0.21) 0.79 0.58 -- -- -- 15.08 4.00 9,281 2.28(4)(5) 09/30/07 15.08 (0.26) 2.14 1.88 -- -- -- 16.96 12.47 8,230 2.38(4)(5) Class I - - 09/30/03 $10.00 $(0.10) $3.90 $ 3.80 $-- $-- $-- $13.80 38.00% $ 4,404 1.33%(4) 09/30/04 13.80 (0.13) 0.08 (0.05) -- -- -- 13.75 (0.36)(3) 3,493 1.33(4) 09/30/05 13.75 (0.13) 2.82 2.69 -- -- -- 16.44 19.56 1,759 1.33(4) 09/30/06 16.44 (0.06) 0.88 0.82 -- -- -- 17.26 4.99 422 1.28(4)(5) 09/30/07 17.26 (0.06) 2.42 2.36 -- -- -- 19.62 13.67 145 1.32(4)(5)
Ratio of net investment income (loss) to average Portfolio net assets Turnover - ------------- --------- (1.11)% 204% (1.09) 170 (1.15) 86 (0.76)(4)(5) 278 (0.79)(4)(5) 321 (1.85)% 204% (1.78) 170 (1.82) 86 (1.46)(4)(5) 278 (1.48)(4)(5) 321 (1.82)% 204% (1.80) 170 (1.89) 86 (1.44)(4)(5) 278 (1.56)(4)(5) 321 (0.82)%(4) 204% (0.85)(4) 170 (0.85)(4) 86 (0.35)(4)(5) 278 (0.34)(4)(5) 321
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)The Fund's total return increased from a gain realized on the disposal of investments in violation of investment restrictions on Class A 0.07%, Class B 0.10%, Class C 0.10% and Class I 0.08%. (4)Net of the following expense reimbursements/fee waivers (based on average net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07 -------- -------- -------- -------- -------- Growth Opportunities Class A............ -- % -- % -- % 0.05% 0.00% Growth Opportunities Class B............ -- -- -- 0.05 0.01 Growth Opportunities Class C+........... -- -- -- 0.05 0.01 Growth Opportunities Class I............ 0.50 0.18 0.49 1.59 5.77
(5)Includes expense reimbursements, but excludes expense reductions. If the expense reductions had been applied the ratio of expenses to average net assets would have been lower and the ratio of net investment income to average net assets would have been higher by:
09/30/06 09/30/07 -------- -------- Growth Opportunities Class A............ 0.04% 0.05% Growth Opportunities Class B............ 0.04 0.05 Growth Opportunities Class C+........... 0.04 0.05 Growth Opportunities Class I............ 0.03 0.05
+ Effective February 23, 2004, Class II shares were redesignated to Class C shares. See Notes to Financial Statements 19 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS -- (continued)
NEW CENTURY FUND ---------------- Net gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Ratio of Value investment realized Total from from net from Total Value end of expenses beginning income and investment investment capital distri- end of Total period to average Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets - ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ---------- Class A - - 09/30/03 $11.22 $(0.13) $2.35 $2.22 $-- $-- $-- $13.44 19.79% $85,685 1.57% 09/30/04 13.44 (0.17) 1.50 1.33 -- -- -- 14.77 9.90 80,872 1.57 09/30/05 14.77 (0.15) 3.38 3.23 -- -- -- 18.00 21.87 87,314 1.58 09/30/06 18.00 (0.07) 0.67 0.60 -- -- -- 18.60 3.33 75,682 1.55(4) 09/30/07 18.60 (0.04) 3.53 3.49 -- -- -- 22.09 18.76 88,535 1.55(4) Class B - - 09/30/03 $10.11 $(0.20) $2.12 $1.92 $-- $-- $-- $12.03 18.99% $16,078 2.28% 09/30/04 12.03 (0.25) 1.35 1.10 -- -- -- 13.13 9.14 11,415 2.29 09/30/05 13.13 (0.25) 3.00 2.75 -- -- -- 15.88 20.94 10,344 2.32 09/30/06 15.88 (0.19) 0.60 0.41 -- -- -- 16.29 2.58 7,528 2.29(4) 09/30/07 16.29 (0.18) 3.09 2.91 -- -- -- 19.20 17.86 10,701 2.31(4) Class C+ - - 09/30/03 $10.09 $(0.18) $2.11 $1.93 $-- $-- $-- $12.02 19.13% $ 2,183 2.14%(3) 09/30/04 12.02 (0.22) 1.34 1.12 -- -- -- 13.14 9.32 2,180 2.10(3) 09/30/05 13.14 (0.22) 3.02 2.80 -- -- -- 15.94 21.31 1,964 2.14(3) 09/30/06 15.94 (0.16) 0.59 0.43 -- -- -- 16.37 2.70 1,756 2.14(3)(4) 09/30/07 16.37 (0.16) 3.11 2.95 -- -- -- 19.32 18.02 5,798 2.14(3)(4)
Ratio of net investment income (loss) to average Portfolio net assets Turnover - ------------- --------- (1.08)% 123% (1.20) 110 (0.89) 80 (0.39)(4) 235 (0.20)(4) 315 (1.77)% 123% (1.91) 110 (1.64) 80 (1.14)(4) 235 (1.00)(4) 315 (1.63)%(3) 123% (1.73)(3) 110 (1.45)(3) 80 (0.98)(3)(4) 235 (0.88)(3)(4) 315
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)Net of the following expense reimbursements (based on average net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07 -------- -------- -------- -------- -------- New Century Class C+.................... 0.66% 0.48% 0.66% 0.44% 0.35%
(4)Includes expense reimbursements, but excludes expense reductions. If the expense reductions had been applied the ratio of expenses to average net assets would have been lower and the ratio of net investment income to average net assets would have been higher by:
09/30/06 09/30/07 -------- -------- New Century Class A..................... 0.01% 0.02% New Century Class B..................... 0.01 0.02 New Century Class C..................... 0.01 0.03
+ Effective February 23, 2004, Class II shares were redesignated to Class C shares. See Notes to Financial Statements 20 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS -- (continued)
GROWTH AND INCOME FUND ---------------------- Net gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Ratio of Value investment realized Total from from net from Total Value end of expenses beginning income and investment investment capital distri- end of Total period to average Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets - ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ---------- Class A - - 09/30/03 $ 8.87 $ 0.01 $1.31 $1.32 $ -- $-- $ -- $10.19 14.88% $70,826 1.50% 09/30/04 10.19 0.00 1.19 1.19 -- -- -- 11.38 11.68 69,069 1.50 09/30/05 11.38 0.10 1.03 1.13 (0.11) -- (0.11) 12.40 9.89 65,666 1.55 09/30/06 12.40 0.04 1.01 1.05 (0.02) -- (0.02) 13.43 8.47 61,872 1.54(3)(4) 09/30/07 13.43 0.07 2.38 2.45 -- -- -- 15.88 18.24 66,963 1.52(3)(4) Class B - - 09/30/03 $ 8.49 $(0.06) $1.26 $1.20 $ -- $-- $ -- $ 9.69 14.13% $66,378 2.16% 09/30/04 9.69 (0.07) 1.13 1.06 -- -- -- 10.75 10.94 54,199 2.17 09/30/05 10.75 0.02 0.97 0.99 -- -- -- 11.74 9.21 41,120 2.20 09/30/06 11.74 (0.05) 0.96 0.91 -- -- -- 12.65 7.75 27,100 2.22(3)(4) 09/30/07 12.65 (0.03) 2.23 2.20 -- -- -- 14.85 17.39 19,562 2.21(3)(4) Class C+ - - 09/30/03 $ 8.48 $(0.06) $1.25 $1.19 $ -- $-- $ -- $ 9.67 14.03% $49,593 2.16% 09/30/04 9.67 (0.07) 1.13 1.06 -- -- -- 10.73 10.96 43,993 2.14 09/30/05 10.73 0.02 0.97 0.99 -- -- -- 11.72 9.23 37,448 2.18 09/30/06 11.72 (0.04) 0.95 0.91 -- -- -- 12.63 7.76 26,821 2.19(3)(4) 09/30/07 12.63 (0.02) 2.23 2.21 -- -- -- 14.84 17.50 23,851 2.19(3)(4) Class I - - 09/30/03 $ 8.88 $ 0.02 $1.31 $1.33 $ -- $-- $ -- $10.21 14.98% $12,899 1.32%(3) 09/30/04 10.21 0.02 1.18 1.20 -- -- -- 11.41 11.75 769 1.32(3) 09/30/05 11.41 0.12 1.04 1.16 (0.14) -- (0.14) 12.43 10.18 758 1.31(3) 09/30/06 12.43 0.07 1.01 1.08 (0.04) -- (0.04) 13.47 8.69 288 1.32(3)(4) 09/30/07 13.47 0.11 2.38 2.49 -- -- -- 15.96 18.49 323 1.31(3)(4)
Ratio of net investment income (loss) to average Portfolio net assets Turnover - ------------- --------- 0.06% 123% 0.01 139 0.78 79 0.31(3)(4) 152 0.49(3)(4) 164 (0.59)% 123% (0.67) 139 0.16 79 (0.39)(3)(4) 152 (0.21)(3)(4) 164 (0.60)% 123% (0.64) 139 0.17 79 (0.36)(3)(4) 152 (0.18)(3)(4) 164 0.23%(3) 123% 0.19(3) 139 1.00(3) 79 0.48(3)(4) 152 0.70(3)(4) 164
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)Net of the following expense reimbursements/fee waivers (based on average net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07 -------- -------- -------- -------- -------- Growth and Income Class A............... -- % -- % -- % 0.00% 0.01% Growth and Income Class B............... -- -- -- 0.00 0.01 Growth and Income Class C+.............. -- -- -- 0.00 0.01 Growth and Income Class I............... 0.37 0.14 0.96 2.23 3.72
(4)Includes expense reimbursements, but excludes expense reductions. If the expense reductions had been applied the ratio of expenses to average net assets would have been lower and the ratio of net investment income to average net assets would have been higher by:
09/30/06 09/30/07 -------- -------- Growth and Income Class A............... 0.01% 0.02% Growth and Income Class B............... 0.01 0.02 Growth and Income Class C+.............. 0.01 0.02 Growth and Income Class I............... 0.01 0.02
+ Effective February 23, 2004, Class II shares were redesignated to Class C shares. See Notes to Financial Statements 21 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS -- (continued)
BALANCED ASSETS FUND -------------------- Net gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Ratio of Value investment realized Total from from net from Total Value end of expenses beginning income and investment investment capital distri- end of Total period to average Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets - ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- -------- ---------- Class A - - 09/30/03 $11.79 $0.10 $0.68 $0.78 $(0.12) $-- $(0.12) $12.45 6.65% $175,324 1.49% 09/30/04 12.45 0.12 0.78 0.90 (0.16) -- (0.16) 13.19 7.27 160,269 1.50 09/30/05 13.19 0.21 0.56 0.77 (0.24) -- (0.24) 13.72 5.84 142,573 1.62 09/30/06 13.72 0.22 0.58 0.80 (0.25) -- (0.25) 14.27 5.90 127,313 1.52(3)(4) 09/30/07 14.27 0.25 1.52 1.77 (0.24) -- (0.24) 15.80 12.50 124,257 1.55(3)(4) Class B - - 09/30/03 $11.74 $0.03 $0.68 $0.71 $(0.04) $-- $(0.04) $12.41 6.07% $ 47,496 2.16% 09/30/04 12.41 0.03 0.77 0.80 (0.07) -- (0.07) 13.14 6.45 38,687 2.18 09/30/05 13.14 0.13 0.55 0.68 (0.15) -- (0.15) 13.67 5.16 30,002 2.27 09/30/06 13.67 0.13 0.58 0.71 (0.15) -- (0.15) 14.23 5.23 20,464 2.20(3)(4) 09/30/07 14.23 0.14 1.52 1.66 (0.12) -- (0.12) 15.77 11.70 14,714 2.28(3)(4) Class C+ - - 09/30/03 $11.76 $0.03 $0.67 $0.70 $(0.04) $-- $(0.04) $12.42 5.97% $ 25,784 2.15% 09/30/04 12.42 0.03 0.78 0.81 (0.07) -- (0.07) 13.16 6.53 22,781 2.18 09/30/05 13.16 0.13 0.55 0.68 (0.15) -- (0.15) 13.69 5.15 19,298 2.26 09/30/06 13.69 0.13 0.58 0.71 (0.15) -- (0.15) 14.25 5.22 15,164 2.18(3)(4) 09/30/07 14.25 0.15 1.52 1.67 (0.12) -- (0.12) 15.80 11.75 13,891 2.26(3)(4) Class I - - 09/30/03 $11.79 $0.12 $0.69 $0.81 $(0.14) $-- $(0.14) $12.46 6.89% $ 4,574 1.33%(3) 09/30/04 12.46 0.16 0.77 0.93 (0.18) -- (0.18) 13.21 7.44 679 1.29(3) 09/30/05 13.21 0.25 0.55 0.80 (0.28) -- (0.28) 13.73 6.10 746 1.32(3) 09/30/06 13.73 0.26 0.59 0.85 (0.29) -- (0.29) 14.29 6.24 754 1.28(3)(4) 09/30/07 14.29 0.29 1.53 1.82 (0.29) -- (0.29) 15.82 12.81 652 1.31(3)(4)
- Ratio of net investment income (loss) to average Portfolio net assets Turnover - ------------- --------- - - 0.86% 409% 0.89 181 1.56 160 1.59(3)(4) 154 1.66(3)(4) 123 - 0.22% 409% 0.20 181 0.91 160 0.91(3)(4) 154 0.93(3)(4) 123 - 0.22% 409% 0.21 181 0.92 160 0.93(3)(4) 154 0.95(3)(4) 123 - 1.02%(3) 409% 1.10(3) 181 1.84(3) 160 1.84(3)(4) 154 1.90(3)(4) 123
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)Net of the following expense reimbursements/fee waivers (based on average net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07 -------- -------- -------- -------- -------- Balanced Assets Class A................. -- % -- % -- % 0.05% 0.02% Balanced Assets Class B................. -- -- -- 0.05 0.02 Balanced Assets Class C+................ -- -- -- 0.05 0.02 Balanced Assets Class I................. 0.19 0.24 1.47 1.38 1.71
(4)Includes expense reimbursements, but excludes expense reductions. If the expense reductions had been applied the ratio of expenses to average net assets would have been lower and the ratio of net investment income to average net assets would have been higher by:
09/30/06 09/30/07 -------- -------- Balanced Assets Class A................. 0.00% 0.01% Balanced Assets Class B................. 0.00 0.01 Balanced Assets Class C+................ 0.00 0.01 Balanced Assets Class I................. 0.00 0.01
+ Effective February 23, 2004, Class II shares were redesignated to Class C shares. See Notes to Financial Statements 22 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS -- (continued)
INTERNATIONAL EQUITY FUND ------------------------- Net gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Ratio of Value investment realized Total from from net from Total Value end of expenses beginning income and investment investment capital distri- end of Total period to average Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3) - ------------ --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- ------------- Class A - - 09/30/03 $ 7.00 $ 0.03 $1.70 $1.73 $ -- $-- $ -- $ 8.73 24.71% $28,720 1.90% 09/30/04 8.73 0.01 1.46 1.47 0.00 -- 0.00 10.20 16.88 32,221 1.90 09/30/05 10.20 0.02 2.82 2.84 -- -- -- 13.04 27.84 43,527 1.90 09/30/06 13.04 (0.01) 2.81 2.80 -- -- -- 15.84 21.47 62,190 1.90 09/30/07 15.84 0.02 3.94 3.96 -- -- -- 19.80 25.00 75,408 1.90 Class B - - 09/30/03 $ 6.73 $(0.03) $1.64 $1.61 $ -- $-- $ -- $ 8.34 23.92% $24,799 2.55% 09/30/04 8.34 (0.06) 1.41 1.35 -- -- -- 9.69 16.19 20,673 2.55 09/30/05 9.69 (0.06) 2.68 2.62 -- -- -- 12.31 27.04 19,546 2.55 09/30/06 12.31 (0.11) 2.65 2.54 -- -- -- 14.85 20.63 21,240 2.55 09/30/07 14.85 (0.10) 3.69 3.59 -- -- -- 18.44 24.18 20,509 2.55 Class C+ - - 09/30/03 $ 6.72 $(0.03) $1.64 $1.61 $ -- $-- $ -- $ 8.33 23.96% $14,787 2.55% 09/30/04 8.33 (0.06) 1.41 1.35 -- -- -- 9.68 16.21 15,798 2.55 09/30/05 9.68 (0.06) 2.67 2.61 -- -- -- 12.29 26.96 16,892 2.55 09/30/06 12.29 (0.11) 2.66 2.55 -- -- -- 14.84 20.75 21,646 2.55 09/30/07 14.84 (0.09) 3.67 3.58 -- -- -- 18.42 24.12 26,683 2.55 Class I - - 09/30/03 $ 7.02 $ 0.03 $1.72 $1.75 $ -- $-- $ -- $ 8.77 24.93% $20,499 1.80% 09/30/04 8.77 (0.04) 1.53 1.49 (0.01) -- (0.01) 10.25 16.96 4,233 1.80 09/30/05 10.25 0.05 2.82 2.87 -- -- -- 13.12 28.00 7,065 1.80 09/30/06 13.12 0.00 2.84 2.84 -- -- -- 15.96 21.65 9,482 1.80 09/30/07 15.96 0.04 3.96 4.00 -- -- -- 19.96 25.06 7,997 1.80
Ratio of net investment income (loss) to average Portfolio net assets(3) Turnover - ------------- --------- 0.35% 209% 0.06 202 0.17 126 (0.09) 152 0.13 132 (0.41)% 209% (0.62) 202 (0.51) 126 (0.80) 152 (0.59) 132 (0.38)% 209% (0.60) 202 (0.49) 126 (0.76) 152 (0.52) 132 0.43% 209% (0.34) 202 0.43 126 (0.01) 152 0.24 132
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)Net of the following expense reimbursements (recoupments) (based on average net assets):
09/30/03 09/30/04 09/30/05 09/30/06 09/30/07 -------- -------- -------- -------- -------- International Equity Class A............ 0.18% 0.10% 0.09% (0.04)% (0.05)% International Equity Class B............ 0.13 0.11 0.17 0.02 0.04 International Equity Class C+........... 0.28 0.06 0.14 (0.01) (0.00) International Equity Class I............ 0.16 0.12 0.14 0.00 0.04
+ Effective February 23, 2004, Class II shares were redesignated to Class C shares. See Notes to Financial Statements 23 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS -- (continued)
VALUE FUND ---------- Net gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Value investment realized Total from from net from Total Value end of beginning income and investment investment capital distri- end of Total period Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) - -------------------- --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- -------- Class A - - 10/31/02 $15.10 $0.18 $ 0.07 $ 0.25 $(0.09) $(0.63) $(0.72) $14.63 1.44% $ 50,975 10/31/03 14.63 0.29 2.05 2.34 (0.18) (0.46) (0.64) 16.33 16.59 60,701 11/1/03-09/30/04(7) 16.33 0.32 1.86 2.18 (0.37) (0.45) (0.82) 17.69 13.79 91,769 09/30/05 17.69 0.17 2.22 2.39 (0.29) (1.78) (2.07) 18.01 14.06 130,754 09/30/06 18.01 0.15 1.89 2.04 (0.13) (1.17) (1.30) 18.75 12.02 121,729 09/30/07 18.75 0.18 2.59 2.77 (0.16) (2.04) (2.20) 19.32 15.80 126,788 Class B - - 10/31/02 $14.56 $0.07 $ 0.07 $ 0.14 $(0.01) $(0.63) $(0.64) $14.06 0.74% $ 78,584 10/31/03 14.06 0.19 1.98 2.17 (0.08) (0.46) (0.54) 15.69 15.94 83,935 11/1/03-09/30/04(7) 15.69 0.24 1.75 1.99 (0.27) (0.45) (0.72) 16.96 13.09 68,492 09/30/05 16.96 0.07 2.11 2.18 (0.18) (1.78) (1.96) 17.18 13.34 57,704 09/30/06 17.18 0.04 1.80 1.84 (0.03) (1.17) (1.20) 17.82 11.29 47,100 09/30/07 17.82 0.05 2.46 2.51 (0.05) (2.04) (2.09) 18.24 15.07 39,355 Class C+ - - 10/31/02 $14.56 $0.07 $ 0.07 $ 0.14 $(0.01) $(0.63) $(0.64) $14.06 0.74% $ 18,504 10/31/03 14.06 0.18 1.99 2.17 (0.08) (0.46) (0.54) 15.69 15.94 23,208 11/1/03-09/30/04(7) 15.69 0.22 1.77 1.99 (0.27) (0.45) (0.72) 16.96 13.09 30,985 09/30/05 16.96 0.06 2.12 2.18 (0.18) (1.78) (1.96) 17.18 13.34 41,095 09/30/06 17.18 0.04 1.80 1.84 (0.03) (1.17) (1.20) 17.82 11.30 33,849 09/30/07 17.82 0.06 2.45 2.51 (0.05) (2.04) (2.09) 18.24 15.07 26,071 Class I - - 11/16/01-10/31/02(5) $15.93 $0.19 $(0.77) $(0.58) $(0.09) $(0.63) $(0.72) $14.63 (3.83)% $ 4,726 10/31/03 14.63 0.30 2.05 2.35 (0.19) (0.46) (0.65) 16.33 16.72 6,629 11/1/03-09/30/04(7) 16.33 0.37 1.83 2.20 (0.40) (0.45) (0.85) 17.68 13.91 4,746 09/30/05 17.68 0.20 2.20 2.40 (0.30) (1.78) (2.08) 18.00 14.12 3,106 09/30/06 18.00 0.16 1.91 2.07 (0.15) (1.17) (1.32) 18.75 12.20 174 09/30/07 18.75 0.21 2.57 2.78 (0.18) (2.04) (2.22) 19.31 15.89 34 Class Z - - 10/31/02 $15.43 $0.27 $ 0.06 $ 0.33 $(0.16) $(0.63) $(0.79) $14.97 1.98% $ 360 10/31/03 14.97 0.36 2.13 2.49 (0.25) (0.46) (0.71) 16.75 17.36 4,532 11/1/03-09/30/04(7) 16.75 0.41 1.92 2.33 (0.45) (0.45) (0.90) 18.18 14.37 7,370 09/30/05 18.18 0.27 2.30 2.57 (0.39) (1.78) (2.17) 18.58 14.77 17,307 09/30/06 18.58 0.26 1.95 2.21 (0.19) (1.17) (1.36) 19.43 12.64 22,853 09/30/07 19.43 0.29 2.70 2.99 (0.22) (2.04) (2.26) 20.16 16.48 34,644
Ratio of net Ratio of investment expenses income (loss) to average to average Portfolio net assets(4) net assets(4) Turnover - ------------- ------------- --------- 1.78% 1.15% 188% 1.78(6) 1.94(6) 138 1.73(3) 2.12(3) 204 1.63 1.00 82 1.63(6) 0.88(6) 140 1.63(6) 0.97(6) 143 2.43% 0.49% 188% 2.41(6) 1.32(6) 138 2.40(3) 1.58(3) 204 2.28 0.38 82 2.28(6) 0.23(6) 140 2.28(6) 0.31(6) 143 2.43% 0.49% 188% 2.43(6) 1.28(6) 138 2.41(3) 1.48(3) 204 2.28 0.36 82 2.28(6) 0.23(6) 140 2.28(6) 0.32(6) 143 1.68%(3) 1.26%(3) 188% 1.68(6) 2.02(6) 138 1.67(3) 2.31(3) 204 1.53 1.11 82 1.53(6) 0.90(6) 140 1.53(6) 1.05(6) 143 1.21% 1.69% 188% 1.21(6) 2.33(6) 138 1.19(3) 2.58(3) 204 1.06 1.54 82 1.06(6) 1.45(6) 140 1.06(6) 1.54(6) 143
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)Annualized (4)Net of the following expense reimbursements (recoupments) (based on average net assets):
10/31/02 10/31/03 09/30/04(3) 09/30/05 09/30/06 09/30/07 -------- -------- ----------- -------- -------- -------- Value Class A........................... 0.01% (0.01)% 0.04% 0.08% 0.08% 0.07% Value Class B........................... (0.02) (0.01) 0.02 0.14 0.10 0.11 Value Class C+.......................... 0.03 0.02 0.06 0.08 0.08 0.09 Value Class I........................... 0.19(3) -- 0.10 0.25 0.30 21.30 Value Class Z........................... 5.52 1.00 0.16 0.10 0.07 0.07
(5)Commencement of sale of respective class of shares. (6)Includes expense reimbursements, but excludes expense reductions. If the expense reductions had been applied the ratio of expenses to average net assets would have been lower and the ratio of net investment income to average net assets would have been higher by:
10/31/03 09/30/06 09/30/07 -------- -------- -------- Value Class A........................... 0.01% 0.01% 0.01% Value Class B........................... 0.01 0.01 0.01 Value Class C+.......................... 0.01 0.01 0.01 Value Class I........................... 0.01 0.01 0.01 Value Class Z........................... 0.00 0.01 0.01
(7)The Fund changed its fiscal year end from October 31 to September 30. + Effective February 23, 2004, Class II shares were redesignated to Class C shares. See Notes to Financial Statements 24 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS -- (continued)
DISCIPLINED GROWTH FUND@ ------------------------ Net Gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Value investment realized Total from from net from Total Value end of beginning income and investment investment capital distri- end of Total period Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) - -------------------- --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- Class A - - 10/31/02 $11.04 $ 0.01 $(2.05) $(2.04) $ -- $-- $ -- $ 9.00 (18.48)% $16,587 10/31/03 9.00 0.03 1.46 1.49 -- -- -- 10.49 16.56 14,877 11/01/03-09/30/04(3) 10.49 0.03 0.75 0.78 -- -- -- 11.27 7.44 13,562 09/30/05 11.27 0.09 0.53 0.62 (0.06) -- (0.06) 11.83 5.51 11,251 09/30/06 11.83 (0.01) 1.34 1.33 (0.06) -- (0.06) 13.10 11.25 22,554 09/30/07 13.10 (0.04) 4.38 4.34 -- -- -- 17.44 33.13(7) 25,774 Class B - - 10/31/02 $10.85 $(0.06) $(2.00) $(2.06) $ -- $-- $ -- $ 8.79 (18.99)% $25,703 10/31/03 8.79 (0.03) 1.41 1.38 -- -- -- 10.17 15.70 22,694 11/01/03-09/30/04(3) 10.17 (0.04) 0.73 0.69 -- -- -- 10.86 6.78 19,669 09/30/05 10.86 0.01 0.52 0.53 -- -- -- 11.39 4.88 15,117 09/30/06 11.39 (0.10) 1.29 1.19 0.00 -- 0.00 12.58 10.46 9,299 09/30/07 12.58 (0.13) 4.20 4.07 -- -- -- 16.65 32.35(7) 5,676 Class C+ - - 10/31/02 $10.86 $(0.06) $(2.00) $(2.06) $ -- $-- $ -- $ 8.80 (18.97)% $26,430 10/31/03 8.80 (0.03) 1.42 1.39 -- -- -- 10.19 15.80 23,036 11/01/03-09/30/04(3) 10.19 (0.04) 0.73 0.69 -- -- -- 10.88 6.77 18,295 09/30/05 10.88 0.01 0.51 0.52 -- -- -- 11.40 4.78 13,983 09/30/06 11.40 (0.09) 1.29 1.20 0.00 -- 0.00 12.60 10.54 26,927 09/30/07 12.60 (0.13) 4.19 4.06 -- -- -- 16.66 32.22(7) 28,927
Ratio of net Ratio of investment expenses income (loss) to average to average Portfolio net assets(5) net assets(5) Turnover - ------------- ------------- --------- 1.45% 0.09% 16% 1.45 0.35 13 1.45(4) 0.25(4) 20 1.45 0.74 32 1.45(6) (0.02)(6) 999 1.45(6) (0.13)(6) 446 2.10% (0.56)% 16% 2.10 (0.30) 13 2.10(4) (0.40)(4) 20 2.10 0.09 32 2.10(6) (0.77)(6) 999 2.10(6) (0.75)(6) 446 2.10% (0.56)% 16% 2.10 (0.30) 13 2.10(4) (0.40)(4) 20 2.10 0.09 32 2.10(6) (0.68)(6) 999 2.10(6) (0.78)(6) 446
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)The Fund changed its fiscal year end from October 31 to September 30. (4)Annualized (5)Net of the following expense reimbursements (based on average net assets):
10/31/02 10/31/03 09/30/04(4) 09/30/05 09/30/06 09/30/07 -------- -------- ----------- -------- -------- -------- Disciplined Growth Class A.............. 0.00% 0.26% 0.24% 0.38% 0.31% 0.34% Disciplined Growth Class B.............. 0.20 0.23 0.25 0.35 0.37 0.45 Disciplined Growth Class C+............. 0.21 0.23 0.24 0.33 0.30 0.30
(6)Includes expense reimbursements, but excludes expense reductions. If the expense reductions had been applied the ratio of expenses to average net assets would have been lower and the ratio of net investment income to average net assets would have been higher by:
09/30/06 09/30/07 -------- -------- Disciplined Growth Class A.............. 0.04% 0.11% Disciplined Growth Class B.............. 0.02 0.14 Disciplined Growth Class C.............. 0.03 0.12
(7)Total Return for each class was increased by 0.38%, 0.40% and 0.40% for Class A, Class B and Class C, respectively, from a reimbursement by an affiliate. (See Note 4) @ See Note 1 + Effective February 23, 2004, Class II shares were redesignated to Class C shares. See Notes to Financial Statements 25 SunAmerica Equity Funds FINANCIAL HIGHLIGHTS -- (continued)
INTERNATIONAL SMALL-CAP FUND ---------------------------- Net gain (loss) on Net investments Distri- Net Net Asset Net (both Dividends butions Asset Assets Value investment realized Total from from net from Total Value end of beginning income and investment investment capital distri- end of Total period Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's) - -------------------- --------- ---------- ----------- ---------- ---------- ------- ------- ------ --------- ------- Class A 05/02/06-09/30/06(3) $12.50 $ 0.00 $(1.45) $(1.45) $-- $-- $-- $11.05 (11.60)% $21,557 09/30/07 11.05 (0.04) 2.99 2.95 -- -- -- 14.00 26.70 30,845 Class B 05/02/06-09/30/06(3) $12.50 $(0.04) $(1.44) $(1.48) $-- $-- $-- $11.02 (11.84)% $ 583 09/30/07 11.02 (0.11) 2.97 2.86 -- -- -- 13.88 25.95 1,181 Class C 05/02/06-09/30/06(3) $12.50 $(0.04) $(1.44) $(1.48) $-- $-- $-- $11.02 (11.84)% $ 3,363 09/30/07 11.02 (0.12) 2.98 2.86 -- -- -- 13.88 25.95 5,357
Ratio of net Ratio of investment expenses income (loss) to average to average Portfolio net assets(5) net assets(5) Turnover - ------------- ------------- --------- 1.90%(4) 0.08%(4) 55% 1.90 (0.30) 70 2.55%(4) (0.93)%(4) 55% 2.55 (0.89) 70 2.55%(4) (1.07)%(4) 55% 2.55 (0.94) 70
- -------- (1)Calculated based upon average shares outstanding. (2)Total return is not annualized and does not reflect sales load. Total return does include expense reimbursements and expense reductions. (3)Commencement of operations. (4)Annualized (5)Net of the following expense reimbursements (based on average net assets):
09/30/06(4) 09/30/07 ----------- -------- International Small-Cap Class A......... 1.27% 0.45% International Small-Cap Class B......... 12.63 2.10 International Small-Cap Class C......... 2.88 0.77
See Notes to Financial Statements 26 SunAmerica Blue Chip Growth Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Computers......................................... 6.4% Diversified Manufacturing Operations.............. 5.9 Web Portals/ISP................................... 4.8 Oil-Field Services................................ 3.9 Electronic Components-Semiconductors.............. 3.7 Cosmetics & Toiletries............................ 3.3 Applications Software............................. 3.2 Medical-Biomedical/Gene........................... 3.2 Beverages-Non-alcoholic........................... 3.0 Medical-Drugs..................................... 3.0 Aerospace/Defense................................. 2.9 Electric Products-Misc............................ 2.9 Networking Products............................... 2.9 Finance-Investment Banker/Broker.................. 2.8 Medical Products.................................. 2.1 Retail-Drug Store................................. 2.1 Oil Companies-Integrated.......................... 2.0 Retail-Discount................................... 1.9 Aerospace/Defense-Equipment....................... 1.7 Instruments-Scientific............................ 1.7 Wireless Equipment................................ 1.7 E-Commerce/Services............................... 1.6 Medical-HMO....................................... 1.6 Repurchase Agreement.............................. 1.6 Finance-Credit Card............................... 1.5 Agricultural Chemicals............................ 1.3 Medical Instruments............................... 1.3 Computer Aided Design............................. 1.2 Enterprise Software/Service....................... 1.2 Finance-Other Services............................ 1.2 Telecom Equipment-Fiber Optics.................... 1.2 Therapeutics...................................... 1.2 Cable TV.......................................... 1.1 Cellular Telecom.................................. 1.1 Electronic Measurement Instruments................ 1.1 Banks-Fiduciary................................... 1.0 Coal.............................................. 1.0 Electronics-Military.............................. 1.0 Entertainment Software............................ 1.0 Medical-Generic Drugs............................. 1.0 Multimedia........................................ 1.0 Commercial Services............................... 0.9 Finance-Consumer Loans............................ 0.9 Machinery-General Industrial...................... 0.9 Diagnostic Kits................................... 0.8 Retail-Consumer Electronics....................... 0.8 Retail-Office Supplies............................ 0.8 Retail-Regional Department Stores................. 0.8 Retail-Restaurants................................ 0.8 X-Ray Equipment................................... 0.8 Computers-Memory Devices.......................... 0.5 Internet Infrastructure Software.................. 0.5 Machinery-Construction & Mining................... 0.5 Radio............................................. 0.5 Rental Auto/Equipment............................. 0.5 Retail-Apparel/Shoe............................... 0.5 ---- 99.8% ====
- -------- * Calculated as a percentage of net assets 27 SunAmerica Blue Chip Growth Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) -------------------------------------------------------------- COMMON STOCK -- 98.2% Aerospace/Defense -- 2.9% Boeing Co................................. 7,900 $ 829,421 Raytheon Co............................... 12,200 778,604 Spirit Aerosystems Holdings, Inc., Class A+................................. 11,700 455,598 ---------- 2,063,623 ---------- Aerospace/Defense-Equipment -- 1.7% United Technologies Corp.................. 14,700 1,183,056 ---------- Agricultural Chemicals -- 1.3% Monsanto Co............................... 10,800 925,992 ---------- Applications Software -- 3.2% Microsoft Corp............................ 76,200 2,244,852 ---------- Banks-Fiduciary -- 1.0% The Bank of New York Mellon Corp.......... 15,849 699,575 ---------- Beverages-Non-alcoholic -- 3.0% PepsiCo, Inc.............................. 28,700 2,102,562 ---------- Cable TV -- 1.1% Comcast Corp., Class A+................... 31,200 754,416 ---------- Cellular Telecom -- 1.1% NII Holdings, Inc.+....................... 9,600 788,640 ---------- Coal -- 1.0% Peabody Energy Corp....................... 15,100 722,837 ---------- Commercial Services -- 0.9% AerCap Holdings NV+....................... 25,200 627,228 ---------- Computer Aided Design -- 1.2% Autodesk, Inc.+........................... 17,028 850,889 ---------- Computers -- 6.4% Apple, Inc.+.............................. 10,900 1,673,586 Hewlett-Packard Co........................ 19,600 975,884 International Business Machines Corp...... 11,900 1,401,820 Research In Motion, Ltd.+................. 5,000 492,750 ---------- 4,544,040 ---------- Computers-Memory Devices -- 0.5% Network Appliance, Inc.+.................. 14,100 379,431 ---------- Cosmetics & Toiletries -- 3.3% Procter & Gamble Co....................... 33,000 2,321,220 ---------- Diagnostic Kits -- 0.8% Inverness Medical Innovations, Inc.+...... 10,000 553,200 ---------- Diversified Manufacturing Operations -- 5.9% Danaher Corp.............................. 13,400 1,108,314 Dover Corp................................ 15,200 774,440 General Electric Co....................... 56,300 2,330,820 ---------- 4,213,574 ---------- E-Commerce/Services -- 1.6% eBay, Inc.+............................... 29,600 1,154,992 ---------- Electric Products-Misc. -- 2.9% AMETEK, Inc............................... 25,504 1,102,283 Emerson Electric Co....................... 18,300 973,926 ---------- 2,076,209 ----------
Value Security Description Shares (Note 3) -------------------------------------------------------------- Electronic Components-Semiconductors -- 3.7% Broadcom Corp., Class A+.................. 15,700 $ 572,108 Intel Corp................................ 52,204 1,349,995 Texas Instruments, Inc.................... 19,500 713,505 ---------- 2,635,608 ---------- Electronic Measurement Instruments -- 1.1% Agilent Technologies, Inc.+............... 21,700 800,296 ---------- Electronics-Military -- 1.0% L-3 Communications Holdings, Inc.......... 7,200 735,408 ---------- Enterprise Software/Service -- 1.2% Oracle Corp.+............................. 41,000 887,650 ---------- Entertainment Software -- 1.0% Electronic Arts, Inc.+.................... 12,100 677,479 ---------- Finance-Consumer Loans -- 0.9% SLM Corp.................................. 12,200 605,974 ---------- Finance-Credit Card -- 1.5% American Express Co....................... 17,400 1,033,038 ---------- Finance-Investment Banker/Broker -- 2.8% Merrill Lynch & Co., Inc.................. 4,300 306,504 TD Ameritrade Holding Corp.+.............. 47,800 870,916 The Goldman Sachs Group, Inc.............. 3,800 823,612 ---------- 2,001,032 ---------- Finance-Other Services -- 1.2% CME Group, Inc............................ 900 528,615 NYMEX Holdings, Inc....................... 2,500 325,450 ---------- 854,065 ---------- Instruments-Scientific -- 1.7% Thermo Fisher Scientific, Inc.+........... 20,400 1,177,488 ---------- Internet Infrastructure Software -- 0.5% Akamai Technologies, Inc.+................ 11,500 330,395 ---------- Machinery-Construction & Mining -- 0.5% Caterpillar, Inc.......................... 4,400 345,092 ---------- Machinery-General Industrial -- 0.9% IDEX Corp................................. 17,131 623,397 ---------- Medical Instruments -- 1.3% Medtronic, Inc............................ 17,000 958,970 ---------- Medical Products -- 2.1% Johnson & Johnson......................... 22,800 1,497,960 ---------- Medical-Biomedical/Gene -- 3.2% Amgen, Inc.+.............................. 6,600 373,362 Celgene Corp.+............................ 8,400 599,004 Genentech, Inc.+.......................... 8,600 670,972 Genzyme Corp.+............................ 10,500 650,580 ---------- 2,293,918 ---------- Medical-Drugs -- 3.0% Abbott Laboratories....................... 8,200 439,684 Allergan, Inc............................. 5,200 335,244 Novartis AG ADR........................... 11,300 621,048 Schering-Plough Corp...................... 22,400 708,512 ---------- 2,104,488 ----------
28 SunAmerica Blue Chip Growth Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Value Security Description Shares (Note 3) ------------------------------------------------------------ COMMON STOCK (continued) Medical-Generic Drugs -- 1.0% Barr Pharmaceuticals, Inc.+............ 12,500 $ 711,375 ----------- Medical-HMO -- 1.6% UnitedHealth Group, Inc................ 23,700 1,147,791 ----------- Multimedia -- 1.0% News Corp., Class A.................... 31,279 687,825 ----------- Networking Products -- 2.9% Cisco Systems, Inc.+................... 62,700 2,075,997 ----------- Oil Companies-Integrated -- 2.0% Exxon Mobil Corp....................... 15,200 1,406,912 ----------- Oil-Field Services -- 3.9% Halliburton Co......................... 24,700 948,480 Schlumberger, Ltd...................... 17,000 1,785,000 ----------- 2,733,480 ----------- Radio -- 0.5% XM Satellite Radio Holdings, Inc., Class A+.............................. 23,900 338,663 ----------- Rental Auto/Equipment -- 0.5% RSC Holdings, Inc.+.................... 22,600 370,640 ----------- Retail-Apparel/Shoe -- 0.5% American Eagle Outfitters, Inc......... 14,200 373,602 ----------- Retail-Consumer Electronics -- 0.8% Best Buy Co., Inc...................... 12,400 570,648 ----------- Retail-Discount -- 1.9% Target Corp............................ 11,000 699,270 Wal-Mart Stores, Inc................... 14,400 628,560 ----------- 1,327,830 ----------- Retail-Drug Store -- 2.1% CVS Caremark Corp...................... 38,302 1,517,908 ----------- Retail-Office Supplies -- 0.8% Staples, Inc........................... 26,900 578,081 ----------- Retail-Regional Department Stores -- 0.8% Kohl's Corp.+.......................... 10,000 573,300 ----------- Retail-Restaurants -- 0.8% Starbucks Corp.+....................... 22,600 592,120 ----------- Telecom Equipment-Fiber Optics -- 1.2% Corning, Inc........................... 33,600 828,240 ----------- Therapeutics -- 1.2% Gilead Sciences, Inc.+................. 20,400 833,748 ----------- Web Portals/ISP -- 4.8% Google, Inc., Class A+................. 3,950 2,240,717 Yahoo!, Inc.+.......................... 43,400 1,164,856 ----------- 3,405,573 ----------- Wireless Equipment -- 1.7% QUALCOMM, Inc.......................... 28,250 1,193,845 ----------- X-Ray Equipment -- 0.8% Hologic, Inc.+......................... 9,700 591,700 ----------- Total Long-Term Investment Securities (cost $58,317,536).................... 69,627,872 -----------
Principal Value Security Description Amount (Note 3) -------------------------------------------------------- REPURCHASE AGREEMENT -- 1.6% State Street Bank & Trust Co. Joint Repurchase Agreement(1) (cost $1,123,000)............. $1,123,000 $ 1,123,000 ----------- TOTAL INVESTMENTS -- (cost $59,440,536)(2)......... 99.8% 70,750,872 Other assets less liabilities.... 0.2 156,535 ---------- ----------- NET ASSETS -- 100.0% $70,907,407 ========== ===========
- -------- + Non-income producing security (1) See Note 3 for details of Joint Repurchase Agreement. (2) See Note 7 for cost of investments on a tax basis. ADR --American Depository Receipt See Notes to Financial Statements 29 SunAmerica Growth Opportunities Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Repurchase Agreement............................................................ 16.1% Commercial Services-Finance..................................................... 6.4 Physical Therapy/Rehabilation Centers........................................... 5.5 Data Processing/Management...................................................... 4.9 Finance-Investment Banker/Broker................................................ 4.1 Printing-Commercial............................................................. 2.9 E-Commerce/Products............................................................. 2.8 Insurance-Multi-line............................................................ 2.7 Retail-Petroleum Products....................................................... 2.6 X-Ray Equipment................................................................. 2.6 Telecom Services................................................................ 2.4 Decision Support Software....................................................... 2.1 Electronic Components-Semiconductors............................................ 2.0 Computer Aided Design........................................................... 1.9 Power Converter/Supply Equipment................................................ 1.9 Commercial Services............................................................. 1.8 Dental Supplies & Equipment..................................................... 1.7 Machinery-General Industrial.................................................... 1.7 Retail-Discount................................................................. 1.7 Computer Graphics............................................................... 1.6 Real Estate Management/Services................................................. 1.6 Retail-Apparel/Shoe............................................................. 1.6 Oil Companies-Exploration & Production.......................................... 1.5 Wireless Equipment.............................................................. 1.5 Medical-HMO..................................................................... 1.4 Transport-Services.............................................................. 1.3 Internet Infrastructure Equipment............................................... 1.2 Retail-Convenience Store........................................................ 1.2 Semiconductor Equipment......................................................... 1.2 Diagnostic Equipment............................................................ 1.1 Veterinary Diagnostics.......................................................... 1.1 Human Resources................................................................. 1.0 Instruments-Scientific.......................................................... 1.0 Transactional Software.......................................................... 1.0 Retirement/Aged Care............................................................ 0.9 Casino Services................................................................. 0.8 Medical-Outpatient/Home Medical................................................. 0.7 Oil-Field Services.............................................................. 0.7 Retail-Catalog Shopping......................................................... 0.7 Finance-Consumer Loans.......................................................... 0.5 Internet Connectivity Services.................................................. 0.5 Internet Financial Services..................................................... 0.3 Rental Auto/Equipment........................................................... 0.2 ---- 92.4% ====
- -------- * Calculated as a percentage of net assets 30 SunAmerica Growth Opportunities Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) ----------------------------------------------------------- COMMON STOCK -- 76.3% Casino Services -- 0.8% Shuffle Master, Inc.+.................. 32,800 $ 490,360 ---------- Commercial Services -- 1.8% AerCap Holdings NV+.................... 46,500 1,157,385 ---------- Commercial Services-Finance -- 6.4% Euronet Worldwide, Inc.+............... 52,700 1,568,879 Global Cash Access, Inc.+.............. 40,200 425,718 Heartland Payment Systems, Inc......... 23,026 591,768 Jackson Hewitt Tax Service, Inc........ 51,900 1,451,124 ---------- 4,037,489 ---------- Computer Aided Design -- 1.9% Aspen Technology, Inc.+................ 84,700 1,212,904 ---------- Computer Graphics -- 1.6% Trident Microsystems, Inc.+............ 63,800 1,013,782 ---------- Data Processing/Management -- 4.9% Global Payments, Inc................... 31,600 1,397,352 MoneyGram International, Inc........... 74,800 1,689,732 ---------- 3,087,084 ---------- Decision Support Software -- 2.1% Cognos, Inc.+.......................... 32,700 1,358,031 ---------- Dental Supplies & Equipment -- 1.7% Sirona Dental Systems, Inc.+........... 31,200 1,112,904 ---------- Diagnostic Equipment -- 1.1% Home Diagnostics, Inc.+................ 71,200 682,096 ---------- E-Commerce/Products -- 2.8% NutriSystem, Inc.+..................... 38,600 1,809,954 ---------- Electronic Components-Semiconductors -- 2.0% SiRF Technology Holdings, Inc.+........ 58,800 1,255,380 ---------- Finance-Consumer Loans -- 0.5% Nelnet, Inc., Class A.................. 19,400 353,856 ---------- Finance-Investment Banker/Broker -- 4.1% E*TRADE Financial Corp.+............... 110,800 1,447,048 MF Global, Ltd.+....................... 39,500 1,145,500 ---------- 2,592,548 ---------- Human Resources -- 1.0% Heidrick & Struggles International, Inc.+................................ 17,600 641,520 ---------- Instruments-Scientific -- 1.0% FEI Co.+............................... 19,500 612,885 ---------- Insurance-Multi-line -- 2.7% HCC Insurance Holdings, Inc............ 59,900 1,715,536 ---------- Internet Connectivity Services -- 0.5% NDS Group PLC ADR+..................... 6,900 344,172 ---------- Internet Financial Services -- 0.3% Online Resources Corp.+................ 14,400 182,016 ---------- Internet Infrastructure Equipment -- 1.2% Avocent Corp.+......................... 25,500 742,560 ---------- Machinery-General Industrial -- 1.7% Flow International Corp.+.............. 121,800 1,074,276 ----------
Value Security Description Shares (Note 3) ----------------------------------------------------------------- Medical-HMO -- 1.4% Magellan Health Services, Inc.+............. 21,600 $ 876,528 ---------- Medical-Outpatient/Home Medical -- 0.7% Radiation Therapy Services, Inc.+........... 20,400 424,728 ---------- Oil Companies-Exploration & Production -- 1.5% Unit Corp.+................................. 19,200 929,280 ---------- Oil-Field Services -- 0.7% TETRA Technologies, Inc.+................... 21,300 450,282 ---------- Physical Therapy/Rehabilation Centers -- 5.5% Healthsouth Corp.+.......................... 34,400 602,344 Psychiatric Solutions, Inc.+................ 72,700 2,855,656 ---------- 3,458,000 ---------- Power Converter/Supply Equipment -- 1.9% PowerSecure International, Inc.+............ 94,700 1,179,962 ---------- Printing-Commercial -- 2.9% Cenveo, Inc.+............................... 52,000 1,124,760 Consolidated Graphics, Inc.+................ 11,100 696,969 ---------- 1,821,729 ---------- Real Estate Management/Services -- 1.6% Grubb & Ellis Co.+.......................... 106,600 991,380 ---------- Rental Auto/Equipment -- 0.2% RSC Holdings, Inc.+......................... 9,200 150,880 ---------- Retail-Apparel/Shoe -- 1.6% Charlotte Russe Holding, Inc.+.............. 42,400 620,736 DSW, Inc., Class A+......................... 15,300 385,101 ---------- 1,005,837 ---------- Retail-Catalog Shopping -- 0.7% Coldwater Creek, Inc.+...................... 43,700 474,582 ---------- Retail-Convenience Store -- 1.2% The Pantry, Inc.+........................... 29,400 753,522 ---------- Retail-Discount -- 1.7% Citi Trends, Inc.+.......................... 49,300 1,072,768 ---------- Retail-Petroleum Products -- 2.6% World Fuel Services Corp.................... 40,500 1,652,805 ---------- Retirement/Aged Care -- 0.9% Five Star Quality Care, Inc.+............... 67,700 556,494 ---------- Semiconductor Equipment -- 1.2% Tessera Technologies, Inc.+................. 20,800 780,000 ---------- Telecom Services -- 2.4% NeuStar Inc.+............................... 31,600 1,083,564 Time Warner Telecom, Inc., Class A+......... 19,000 417,430 ---------- 1,500,994 ---------- Transactional Software -- 1.0% VeriFone Holdings, Inc.+.................... 14,300 633,919 ---------- Transport-Services -- 1.3% UTI Worldwide, Inc.......................... 35,100 806,598 ---------- Veterinary Diagnostics -- 1.1% Animal Health International, Inc.+.......... 61,700 686,721 ----------
31 SunAmerica Growth Opportunities Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/ Principal Value Security Description Amount (Note 3) -------------------------------------------------------------- COMMON STOCK (continued) Wireless Equipment -- 1.5% Radyne Corp.+...................... 87,800 $ 925,412 ----------- X-Ray Equipment -- 2.6% Hologic, Inc.+..................... 27,300 1,665,300 ----------- Total Long-Term Investment Securities (cost $47,845,380)................ 48,274,459 ----------- REPURCHASE AGREEMENT -- 16.1% State Street Bank & Trust Co. Joint Repurchase Agreement(1) (cost $10,150,000)................ $10,150,000 10,150,000 ----------- TOTAL INVESTMENTS -- (cost $57,995,380)(2)............. 92.4% 58,424,459 Other assets less liabilities........ 7.6 4,826,336 ----------- ----------- NET ASSETS -- 100.0% $63,250,795 =========== ===========
- -------- + Non-income producing security (1) See Note 3 for details of Joint Repurchase Agreement. (2) See Note 7 for cost of investment on a tax basis. ADR --American Depository Receipt See Notes to Financial Statements 32 SunAmerica New Century Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Repurchase Agreement............................................................ 12.9% Data Processing/Management...................................................... 7.5 Commercial Services-Finance..................................................... 6.8 Physical Therapy/Rehabilation Centers........................................... 5.4 Finance-Investment Banker/Broker................................................ 5.0 E-Commerce/Products............................................................. 2.8 Retail-Apparel/Shoe............................................................. 2.8 Insurance-Multi-line............................................................ 2.7 Retail-Petroleum Products....................................................... 2.6 X-Ray Equipment................................................................. 2.6 Commercial Services............................................................. 2.5 Oil Companies-Exploration & Production.......................................... 2.4 Telecom Services................................................................ 2.3 Retirement/Aged Care............................................................ 2.2 Decision Support Software....................................................... 2.1 Medical Products................................................................ 2.1 Retail-Restaurants.............................................................. 2.1 Computer Aided Design........................................................... 1.9 Electronic Components-Semiconductors............................................ 1.9 Medical-Generic Drugs........................................................... 1.8 Printing-Commercial............................................................. 1.8 Dental Supplies & Equipment..................................................... 1.7 Electric Products-Misc.......................................................... 1.7 Computer Graphics............................................................... 1.6 Cable TV........................................................................ 1.5 Real Estate Investment Trusts................................................... 1.5 Retail-Regional Department Stores............................................... 1.4 Medical-HMO..................................................................... 1.3 Transport-Services.............................................................. 1.3 Internet Infrastructure Software................................................ 1.2 Semiconductor Equipment......................................................... 1.2 Internet Infrastructure Equipment............................................... 1.1 Instruments-Scientific.......................................................... 1.0 Transactional Software.......................................................... 1.0 Retail-Office Supplies.......................................................... 0.8 Oil-Field Services.............................................................. 0.7 Retail-Catalog Shopping......................................................... 0.7 Internet Connectivity Services.................................................. 0.5 Rental Auto/Equipment........................................................... 0.2 ---- 94.6% ====
- -------- * Calculated as a percentage of net assets 33 SunAmerica New Century Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) --------------------------------------------------------------- COMMON STOCK -- 81.7% Cable TV -- 1.5% Time Warner Cable, Inc.+.................. 47,100 $1,544,880 ---------- Commercial Services -- 2.5% AerCap Holdings NV+....................... 75,400 1,876,706 Iron Mountain, Inc.+...................... 25,100 765,048 ---------- 2,641,754 ---------- Commercial Services-Finance -- 6.8% Euronet Worldwide, Inc.+.................. 86,800 2,584,036 Jackson Hewitt Tax Service, Inc........... 84,000 2,348,640 Moody's Corp.............................. 43,100 2,172,240 ---------- 7,104,916 ---------- Computer Aided Design -- 1.9% Aspen Technology, Inc.+................... 139,300 1,994,776 ---------- Computer Graphics -- 1.6% Trident Microsystems, Inc.+............... 104,700 1,663,683 ---------- Data Processing/Management -- 7.5% Fiserv, Inc.+............................. 54,200 2,756,612 Global Payments, Inc...................... 53,100 2,348,082 MoneyGram International, Inc.............. 121,300 2,740,167 ---------- 7,844,861 ---------- Decision Support Software -- 2.1% Cognos, Inc.+............................. 52,900 2,196,937 ---------- Dental Supplies & Equipment -- 1.7% Sirona Dental Systems, Inc.+.............. 50,600 1,804,902 ---------- E-Commerce/Products -- 2.8% NutriSystem, Inc.+........................ 62,900 2,949,381 ---------- Electric Products-Misc. -- 1.7% Molex, Inc................................ 65,800 1,771,994 ---------- Electronic Components-Semiconductors -- 1.9% SiRF Technology Holdings, Inc.+........... 93,400 1,994,090 ---------- Finance-Investment Banker/Broker -- 5.0% E*TRADE Financial Corp.+.................. 179,800 2,348,188 MF Global, Ltd.+.......................... 65,300 1,893,700 TD Ameritrade Holding Corp.+.............. 56,600 1,031,252 ---------- 5,273,140 ---------- Instruments-Scientific -- 1.0% FEI Co.+.................................. 32,300 1,015,189 ---------- Insurance-Multi-line -- 2.7% HCC Insurance Holdings, Inc............... 97,500 2,792,400 ---------- Internet Connectivity Services -- 0.5% NDS Group PLC ADR+........................ 10,900 543,692 ---------- Internet Infrastructure Equipment -- 1.1% Avocent Corp.+............................ 40,900 1,191,008 ---------- Internet Infrastructure Software -- 1.2% Akamai Technologies, Inc.+................ 42,800 1,229,644 ---------- Medical Products -- 2.1% Varian Medical Systems, Inc.+............. 53,200 2,228,548 ---------- Medical-Generic Drugs -- 1.8% Barr Pharmaceuticals, Inc.+............... 33,100 1,883,721 ----------
Value Security Description Shares (Note 3) ----------------------------------------------------------------- Medical-HMO -- 1.3% Magellan Health Services, Inc.+............ 33,900 $ 1,375,662 ----------- Oil Companies-Exploration & Production -- 2.4% Southwestern Energy Co.+................... 24,300 1,016,955 Unit Corp.+................................ 31,100 1,505,240 ----------- 2,522,195 ----------- Oil-Field Services -- 0.7% TETRA Technologies, Inc.+.................. 34,700 733,558 ----------- Physical Therapy/Rehabilation Centers -- 5.4% Healthsouth Corp.+......................... 61,200 1,071,612 Psychiatric Solutions, Inc.+............... 117,600 4,619,328 ----------- 5,690,940 ----------- Printing-Commercial -- 1.8% Cenveo, Inc.+.............................. 86,400 1,868,832 ----------- Real Estate Investment Trusts -- 1.5% Public Storage, Inc........................ 19,600 1,541,540 ----------- Rental Auto/Equipment -- 0.2% RSC Holdings, Inc.+........................ 15,100 247,640 ----------- Retail-Apparel/Shoe -- 2.8% American Eagle Outfitters, Inc............. 87,900 2,312,649 DSW, Inc., Class A+........................ 26,000 654,420 ----------- 2,967,069 ----------- Retail-Catalog Shopping -- 0.7% Coldwater Creek, Inc.+..................... 69,600 755,856 ----------- Retail-Office Supplies -- 0.8% Office Depot, Inc.+........................ 39,600 816,552 ----------- Retail-Petroleum Products -- 2.6% World Fuel Services Corp................... 65,700 2,681,217 ----------- Retail-Regional Department Stores -- 1.4% Kohl's Corp.+.............................. 26,100 1,496,313 ----------- Retail-Restaurants -- 2.1% Starbucks Corp.+........................... 86,100 2,255,820 ----------- Retirement/Aged Care -- 2.2% Brookdale Senior Living, Inc............... 57,800 2,301,018 ----------- Semiconductor Equipment -- 1.2% Tessera Technologies, Inc.+................ 34,400 1,290,000 ----------- Telecom Services -- 2.3% NeuStar Inc................................ 52,000 1,783,080 Time Warner Telecom, Inc., Class A+........ 30,800 676,676 ----------- 2,459,756 ----------- Transactional Software -- 1.0% VeriFone Holdings, Inc.+................... 23,600 1,046,188 ----------- Transport-Services -- 1.3% UTI Worldwide, Inc......................... 57,700 1,325,946 ----------- X-Ray Equipment -- 2.6% Hologic, Inc.+............................. 45,000 2,745,000 ----------- Total Long-Term Investment Securities (cost $85,232,542)........................ 85,790,618 -----------
34 SunAmerica New Century Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ---------------------------------------------------------- REPURCHASE AGREEMENT -- 12.9% State Street Bank & Trust Co. Joint Repurchase Agreement(1) (cost $13,531,000)............ $13,531,000 $ 13,531,000 ------------ TOTAL INVESTMENTS -- (cost $98,763,542)(2)......... 94.6% 99,321,618 Other assets less liabilities.... 5.4 5,712,565 ----------- ------------ NET ASSETS -- 100.0% $105,034,183 =========== ============
- -------- + Non-income producing security (1) See Note 3 for details of Joint Repurchase Agreement. (2) See Note 7 for cost of investments on a tax basis. ADR --American Depository Receipt See Notes to Financial Statements 35 SunAmerica Growth and Income Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Oil Companies-Integrated........................................................ 7.7% Finance-Investment Banker/Broker................................................ 7.2 Diversified Manufacturing Operations............................................ 5.2 Banks-Super Regional............................................................ 4.0 Medical-Drugs................................................................... 3.9 Oil-Field Services.............................................................. 3.8 Repurchase Agreement............................................................ 3.4 Telephone-Integrated............................................................ 3.3 Electric-Integrated............................................................. 3.0 Electronic Components-Semiconductors............................................ 2.9 Aerospace/Defense-Equipment..................................................... 2.3 Computers....................................................................... 2.2 Medical Products................................................................ 2.0 Retail-Apparel/Shoe............................................................. 2.0 Retail-Regional Department Stores............................................... 1.9 Investment Management/Advisor Services.......................................... 1.7 Medical Instruments............................................................. 1.7 Networking Products............................................................. 1.7 Telecom Services................................................................ 1.7 Aerospace/Defense............................................................... 1.6 Cosmetics & Toiletries.......................................................... 1.6 Finance-Mortgage Loan/Banker.................................................... 1.6 Food-Wholesale/Distribution..................................................... 1.6 Medical-Generic Drugs........................................................... 1.6 Medical-HMO..................................................................... 1.6 Retail-Drug Store............................................................... 1.6 Applications Software........................................................... 1.5 Food-Misc....................................................................... 1.5 Medical-Biomedical/Gene......................................................... 1.5 Telecom Equipment-Fiber Optics.................................................. 1.5 Apparel Manufacturers........................................................... 1.4 Cable TV........................................................................ 1.4 Finance-Credit Card............................................................. 1.4 Food-Confectionery.............................................................. 1.4 Insurance-Property/Casualty..................................................... 1.4 Multimedia...................................................................... 1.4 Transport-Services.............................................................. 1.4 Beverages-Non-alcoholic......................................................... 1.3 Tobacco......................................................................... 1.3 Enterprise Software/Service..................................................... 1.2 Web Portals/ISP................................................................. 1.2 Paper & Related Products........................................................ 1.1 Semiconductor Equipment......................................................... 1.0 Wireless Equipment.............................................................. 1.0 Metal-Aluminum.................................................................. 0.9 ---- 97.6% ====
- -------- * Calculated as a percentage of net assets 36 SunAmerica Growth and Income Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) --------------------------------------------------------------- COMMON STOCK -- 94.2% Aerospace/Defense -- 1.6% General Dynamics Corp..................... 20,900 $1,765,423 ---------- Aerospace/Defense-Equipment -- 2.3% United Technologies Corp.................. 31,100 2,502,928 ---------- Apparel Manufacturer -- 1.4% Phillips-Van Heusen....................... 29,800 1,563,904 ---------- Applications Software -- 1.5% Microsoft Corp............................ 57,300 1,688,058 ---------- Banks-Super Regional -- 4.0% Bank of America Corp...................... 44,800 2,252,096 Wachovia Corp............................. 42,600 2,136,390 ---------- 4,388,486 ---------- Beverages-Non-alcoholic -- 1.3% PepsiCo, Inc.............................. 19,400 1,421,244 ---------- Cable TV -- 1.4% Comcast Corp., Class A+................... 62,800 1,518,504 ---------- Computers -- 2.2% Apple, Inc.+.............................. 7,700 1,182,258 International Business Machines Corp...... 10,700 1,260,460 ---------- 2,442,718 ---------- Cosmetics & Toiletries -- 1.6% Procter & Gamble Co....................... 25,700 1,807,738 ---------- Diversified Manufacturing Operations -- 5.2% 3M Co..................................... 17,600 1,647,008 General Electric Co....................... 73,000 3,022,200 Textron, Inc.............................. 17,400 1,082,454 ---------- 5,751,662 ---------- Electric-Integrated -- 3.0% Duke Energy Corp.......................... 89,400 1,670,886 Southern Co............................... 44,700 1,621,716 ---------- 3,292,602 ---------- Electronic Components-Semiconductors -- 2.9% Intel Corp................................ 80,100 2,071,386 Texas Instruments, Inc.................... 29,800 1,090,382 ---------- 3,161,768 ---------- Enterprise Software/Service -- 1.2% Oracle Corp.+............................. 61,000 1,320,650 ---------- Finance-Credit Card -- 1.4% American Express Co....................... 26,600 1,579,242 ---------- Finance-Investment Banker/Broker -- 7.2% Citigroup, Inc............................ 52,500 2,450,175 JPMorgan Chase & Co....................... 33,600 1,539,552 Merrill Lynch & Co., Inc.................. 29,500 2,102,760 TD Ameritrade Holding Corp.+.............. 104,200 1,898,524 ---------- 7,991,011 ---------- Finance-Mortgage Loan/Banker -- 1.6% Fannie Mae................................ 29,700 1,806,057 ---------- Food-Confectionery -- 1.4% The Hershey Co............................ 32,800 1,522,248 ----------
Value Security Description Shares (Note 3) ---------------------------------------------------------------- Food-Misc. -- 1.5% Kraft Foods, Inc., Class A.................. 49,900 $1,722,049 ---------- Food-Wholesale/Distribution -- 1.6% Sysco Corp.................................. 48,600 1,729,674 ---------- Insurance-Property/Casualty -- 1.4% Chubb Corp.................................. 29,800 1,598,472 ---------- Investment Management/Advisor Services -- 1.7% Invesco PLC ADR............................. 70,400 1,921,920 ---------- Medical Instruments -- 1.7% Medtronic, Inc.............................. 32,700 1,844,607 ---------- Medical Products -- 2.0% Johnson & Johnson........................... 33,000 2,168,100 ---------- Medical-Biomedical/Gene -- 1.5% Genzyme Corp.+.............................. 26,400 1,635,744 ---------- Medical-Drugs -- 3.9% Merck & Co., Inc............................ 30,400 1,571,376 Pfizer, Inc................................. 62,050 1,515,882 Schering-Plough Corp........................ 37,500 1,186,125 ---------- 4,273,383 ---------- Medical-Generic Drugs -- 1.6% Barr Pharmaceuticals, Inc.+................. 31,100 1,769,901 ---------- Medical-HMO -- 1.6% WellPoint, Inc.+............................ 22,500 1,775,700 ---------- Metal-Aluminum -- 0.9% Alcoa, Inc.................................. 26,300 1,028,856 ---------- Multimedia -- 1.4% News Corp., Class A......................... 70,900 1,559,091 ---------- Networking Products -- 1.7% Cisco Systems, Inc.+........................ 57,500 1,903,825 ---------- Oil Companies-Integrated -- 7.7% Chevron Corp................................ 23,800 2,227,204 ConocoPhillips.............................. 37,100 3,256,267 Exxon Mobil Corp............................ 32,400 2,998,944 ---------- 8,482,415 ---------- Oil-Field Services -- 3.8% Halliburton Co.............................. 64,200 2,465,280 Schlumberger, Ltd........................... 16,800 1,764,000 ---------- 4,229,280 ---------- Paper & Related Products -- 1.1% International Paper Co...................... 34,800 1,248,276 ---------- Retail-Apparel/Shoe -- 2.0% American Eagle Outfitters, Inc.............. 82,600 2,173,206 ---------- Retail-Drug Store -- 1.6% CVS Caremark Corp........................... 45,000 1,783,350 ---------- Retail-Regional Department Stores -- 1.9% Kohl's Corp.+............................... 37,000 2,121,210 ---------- Semiconductor Equipment -- 1.0% Applied Materials, Inc...................... 54,200 1,121,940 ----------
37 SunAmerica Growth and Income Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/ Principal Value Security Description Amount (Note 3) - -------------------------------------------------------------------------------------------------------- COMMON STOCK (continued) Telecom Equipment-Fiber Optics -- 1.5% Corning, Inc................................................................... 68,000 $ 1,676,200 ------------ Telecom Services -- 1.7% Time Warner Telecom, Inc., Class A+............................................ 86,100 1,891,617 ------------ Telephone-Integrated -- 3.3% AT&T, Inc...................................................................... 40,400 1,709,324 Verizon Communications, Inc.................................................... 44,300 1,961,604 ------------ 3,670,928 ------------ Tobacco -- 1.3% Altria Group, Inc.............................................................. 21,000 1,460,130 ------------ Transport-Services -- 1.4% United Parcel Service, Inc., Class B........................................... 21,200 1,592,120 ------------ Web Portals/ISP -- 1.2% Google, Inc., Class A+......................................................... 2,300 1,304,721 ------------ Wireless Equipment -- 1.0% QUALCOMM, Inc.................................................................. 25,500 1,077,630 ------------ Total Long-Term Investment Securities (cost $94,646,931)........................................................... 104,288,588 ------------ REPURCHASE AGREEMENT -- 3.4% State Street Bank & Trust Co. Joint Repurchase Agreement(1) (cost $3,800,000).. $3,800,000 3,800,000 ------------ TOTAL INVESTMENTS -- (cost $98,446,931)(2)........................................................ 97.6% 108,088,588 Other assets less liabilities................................................... 2.4 2,609,684 ---------- ------------ NET ASSETS -- 100.0% $110,698,272 ========== ============
- -------- + Non-income producing security (1) See Note 3 for details of Joint Repurchase Agreement. (2) See Note 7 for cost of investments on a tax basis. ADR --American Depository Receipt See Notes to Financial Statements 38 SunAmerica Balanced Assets Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Diversified Financial Services........ 5.7% Finance-Investment Banker/Broker...... 5.4 Oil Companies-Integrated.............. 5.2 Federal Home Loan Mtg. Corp........... 5.0 Diversified Manufacturing Operations.. 3.5 Repurchase Agreements................. 3.3 Banks-Super Regional.................. 3.0 Telephone-Integrated.................. 3.0 Electric-Integrated................... 2.9 Computers............................. 2.8 Medical-Drugs......................... 2.6 Federal National Mtg. Assoc........... 2.5 Sovereign............................. 1.9 Cosmetics & Toiletries................ 1.8 Electronic Components-Semiconductors.. 1.8 Web Portals/ISP....................... 1.8 Electric Products-Misc................ 1.7 Medical Products...................... 1.6 Aerospace/Defense..................... 1.6 Applications Software................. 1.5 Finance-Credit Card................... 1.5 Oil-Field Services.................... 1.5 Aerospace/Defense-Equipment........... 1.4 Retail-Drug Store..................... 1.4 Multimedia............................ 1.3 Medical-Biomedical/Gene............... 1.2 Special Purpose Entities.............. 1.2 Banks-Fiduciary....................... 1.1 Beverages-Non-alcoholic............... 1.1 Cable TV.............................. 1.1 Networking Products................... 1.1 Banks-Commercial...................... 0.9 Finance-Mortgage Loan/Banker.......... 0.9 Insurance-Multi-line.................. 0.9 Cellular Telecom...................... 0.7 Insurance-Property/Casualty........... 0.7 Retail-Apparel/Shoe................... 0.7 Retail-Discount....................... 0.7 Retail-Regional Department Stores..... 0.7 Agricultural Chemicals................ 0.6 Brewery............................... 0.6 E-Commerce/Services................... 0.6 Food-Misc............................. 0.6 Government National Mtg. Assoc........ 0.6 Instruments-Scientific................ 0.6 Medical-HMO........................... 0.6 Non-Hazardous Waste Disposal.......... 0.6 Savings & Loans/Thrifts............... 0.6 Wireless Equipment.................... 0.6 Enterprise Software/Service........... 0.5 Medical Instruments................... 0.5 Oil Companies-Exploration & Production 0.5 Pipelines............................. 0.5 Tobacco............................... 0.5 Coal.................................. 0.4 Computer Aided Design................. 0.4 Electronic Measurement Instruments.... 0.4 Electronics-Military.................. 0.4 Finance-Other Services................ 0.4 Medical-Generic Drugs................. 0.4
Metal-Aluminum........................ 0.4% Paper & Related Products.............. 0.4 Real Estate Investment Trusts......... 0.4 Telecom Equipment-Fiber Optics........ 0.4 Therapeutics.......................... 0.4 Banks-Money Center.................... 0.3 Commercial Services................... 0.3 Diagnostic Kits....................... 0.3 Entertainment Software................ 0.3 Finance-Consumer Loans................ 0.3 Machinery-General Industrial.......... 0.3 Radio................................. 0.3 Rental Auto/Equipment................. 0.3 Retail-Consumer Electronics........... 0.3 Retail-Office Supplies................ 0.3 Retail-Restaurants.................... 0.3 Telecom Services...................... 0.3 Transport-Air Freight................. 0.3 Transport-Rail........................ 0.3 X-Ray Equipment....................... 0.3 Computers-Memory Devices.............. 0.2 Containers-Paper/Plastic.............. 0.2 Finance-Auto Loans.................... 0.2 Independent Power Producers........... 0.2 Internet Infrastructure Software...... 0.2 Machinery-Construction & Mining....... 0.2 Medical-Hospitals..................... 0.2 Office Automation & Equipment......... 0.2 Steel-Producers....................... 0.2 Airlines.............................. 0.1 Auto-Cars/Light Trucks................ 0.1 Broadcast Services/Program............ 0.1 Building Products-Cement.............. 0.1 Building-Residential/Commercial....... 0.1 Chemicals-Diversified................. 0.1 Chemicals-Specialty................... 0.1 Commercial Services-Finance........... 0.1 Computer Services..................... 0.1 Diversified Operations................ 0.1 Electric-Generation................... 0.1 Finance-Commercial.................... 0.1 Food-Retail........................... 0.1 Gas-Distribution...................... 0.1 Insurance Brokers..................... 0.1 Insurance-Life/Health................. 0.1 Investment Companies.................. 0.1 Investment Management/Advisor Services 0.1 Metal-Diversified..................... 0.1 Metal Processors & Fabrication........ 0.1 Oil Refining & Marketing.............. 0.1 Real Estate Operations & Development.. 0.1 Satellite Telecom..................... 0.1 Television............................ 0.1 Transport-Marine...................... 0.1 Transport-Services.................... 0.1 ----- 100.5% =====
- -------- * Calculated as a percentage of net assets 39 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) --------------------------------------------------------------- COMMON STOCK -- 66.1% Aerospace/Defense -- 1.6% Boeing Co................................... 6,200 $ 650,938 General Dynamics Corp....................... 9,000 760,230 Raytheon Co................................. 9,600 612,672 Spirit Aerosystems Holdings, Inc., Class A+. 9,200 358,248 ---------- 2,382,088 ---------- Aerospace/Defense-Equipment -- 1.3% United Technologies Corp.................... 25,200 2,028,096 ---------- Agricultural Chemicals -- 0.5% Monsanto Co................................. 8,500 728,790 ---------- Applications Software -- 1.5% Microsoft Corp.............................. 76,478 2,253,042 ---------- Banks-Fiduciary -- 1.1% The Bank of New York Mellon Corp............ 39,716 1,753,064 ---------- Banks-Super Regional -- 2.6% Bank of America Corp........................ 39,688 1,995,116 Wachovia Corp............................... 19,700 987,955 Wells Fargo & Co............................ 28,200 1,004,484 ---------- 3,987,555 ---------- Beverages-Non-alcoholic -- 1.1% PepsiCo, Inc................................ 22,700 1,663,002 ---------- Brewery -- 0.5% Anheuser-Busch Cos., Inc.................... 15,000 749,850 ---------- Cable TV -- 0.9% Comcast Corp., Class A+..................... 59,800 1,445,964 ---------- Cellular Telecom -- 0.4% NII Holdings, Inc.+......................... 7,500 616,125 ---------- Coal -- 0.4% Peabody Energy Corp......................... 11,900 569,653 ---------- Commercial Services -- 0.3% AerCap Holdings NV+......................... 19,900 495,311 ---------- Computer Aided Design -- 0.4% Autodesk, Inc.+............................. 13,444 671,797 ---------- Computers -- 2.7% Apple, Inc.+................................ 8,600 1,320,444 Hewlett-Packard Co.......................... 15,500 771,745 International Business Machines Corp........ 14,000 1,649,200 Research In Motion, Ltd.+................... 3,900 384,345 ---------- 4,125,734 ---------- Computers-Memory Devices -- 0.2% Network Appliance, Inc.+.................... 11,100 298,701 ---------- Cosmetics & Toiletries -- 1.8% Procter & Gamble Co......................... 40,400 2,841,736 ---------- Diagnostic Kits -- 0.3% Inverness Medical Innovations, Inc.+........ 7,900 437,028 ---------- Diversified Manufacturing Operations -- 3.4% Danaher Corp................................ 10,500 868,455 Dover Corp.................................. 12,090 615,985 General Electric Co......................... 90,400 3,742,560 ---------- 5,227,000 ----------
Value Security Description Shares (Note 3) -------------------------------------------------------------- E-Commerce/Services -- 0.6% eBay, Inc.+............................... 23,400 $ 913,068 ---------- Electric Products-Misc. -- 1.7% AMETEK, Inc............................... 20,234 874,513 Emerson Electric Co....................... 31,800 1,692,396 ---------- 2,566,909 ---------- Electric-Integrated -- 1.9% Duke Energy Corp.......................... 39,300 734,517 FPL Group, Inc............................ 12,000 730,560 Southern Co............................... 19,600 711,088 Xcel Energy, Inc.......................... 33,500 721,590 ---------- 2,897,755 ---------- Electronic Components-Semiconductors -- 1.7% Broadcom Corp., Class A+.................. 12,400 451,856 Intel Corp................................ 63,900 1,652,454 Texas Instruments, Inc.................... 15,200 556,168 ---------- 2,660,478 ---------- Electronic Measurement Instruments -- 0.4% Agilent Technologies, Inc.+............... 16,900 623,272 ---------- Electronics-Military -- 0.4% L-3 Communications Holdings, Inc.......... 5,700 582,198 ---------- Enterprise Software/Service -- 0.5% Oracle Corp.+............................. 32,300 699,295 ---------- Entertainment Software -- 0.3% Electronic Arts, Inc.+.................... 9,500 531,905 ---------- Finance-Consumer Loans -- 0.3% SLM Corp.................................. 9,600 476,832 ---------- Finance-Credit Card -- 1.4% American Express Co....................... 36,400 2,161,068 ---------- Finance-Investment Banker/Broker -- 4.9% Citigroup, Inc............................ 38,088 1,777,567 JPMorgan Chase & Co....................... 29,400 1,347,108 Merrill Lynch & Co., Inc.................. 19,500 1,389,960 Morgan Stanley............................ 15,000 945,000 TD Ameritrade Holding Corp.+.............. 75,400 1,373,788 The Goldman Sachs Group, Inc.............. 2,984 646,752 ---------- 7,480,175 ---------- Finance-Mortgage Loan/Banker -- 0.6% Fannie Mae................................ 14,200 863,502 ---------- Finance-Other Services -- 0.4% CME Group, Inc............................ 700 411,145 NYMEX Holdings, Inc....................... 2,000 260,360 ---------- 671,505 ---------- Food-Misc. -- 0.6% Kraft Foods, Inc., Class A................ 28,928 998,305 ---------- Independent Power Producer -- 0.0% Mirant Corp.+............................. 186 7,566 ---------- Instruments-Scientific -- 0.6% Thermo Fisher Scientific, Inc.+........... 16,100 929,292 ---------- Insurance-Multi-line -- 0.6% MetLife, Inc.............................. 14,100 983,193 ----------
40 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Value Security Description Shares (Note 3) --------------------------------------------------------------- COMMON STOCK (continued) Insurance-Property/Casualty -- 0.6% Chubb Corp.................................. 17,600 $ 944,064 ---------- Internet Infrastructure Software -- 0.2% Akamai Technologies, Inc.+.................. 9,000 258,570 ---------- Machinery-Construction & Mining -- 0.2% Caterpillar, Inc............................ 3,400 266,662 ---------- Machinery-General Industrial -- 0.3% IDEX Corp................................... 13,558 493,376 ---------- Medical Instruments -- 0.5% Medtronic, Inc.............................. 13,500 761,535 ---------- Medical Products -- 1.6% Johnson & Johnson........................... 37,700 2,476,890 ---------- Medical-Biomedical/Gene -- 1.2% Amgen, Inc.+................................ 5,200 294,164 Celgene Corp.+.............................. 6,600 470,646 Genentech, Inc.+............................ 6,800 530,536 Genzyme Corp.+.............................. 8,300 514,268 ---------- 1,809,614 ---------- Medical-Drugs -- 2.3% Abbott Laboratories......................... 6,500 348,530 Allergan, Inc............................... 4,100 264,327 Merck & Co., Inc............................ 13,700 708,153 Novartis AG ADR............................. 8,900 489,144 Pfizer, Inc................................. 49,314 1,204,741 Schering-Plough Corp........................ 17,700 559,851 ---------- 3,574,746 ---------- Medical-Generic Drugs -- 0.4% Barr Pharmaceuticals, Inc.+................. 9,900 563,409 ---------- Medical-HMO -- 0.6% UnitedHealth Group, Inc..................... 18,800 910,484 ---------- Metal-Aluminum -- 0.3% Alcoa, Inc.................................. 10,800 422,496 ---------- Multimedia -- 0.8% News Corp., Class A......................... 57,714 1,269,131 ---------- Networking Products -- 1.1% Cisco Systems, Inc.+........................ 49,600 1,642,256 ---------- Non-Hazardous Waste Disposal -- 0.5% Waste Management, Inc....................... 20,700 781,218 ---------- Oil Companies-Integrated -- 5.1% Chevron Corp................................ 22,128 2,070,738 ConocoPhillips.............................. 16,900 1,483,313 Exxon Mobil Corp............................ 33,600 3,110,016 Marathon Oil Corp........................... 20,400 1,163,208 ---------- 7,827,275 ---------- Oil-Field Services -- 1.4% Halliburton Co.............................. 19,300 741,120 Schlumberger, Ltd........................... 13,400 1,407,000 ---------- 2,148,120 ---------- Paper & Related Products -- 0.3% International Paper Co...................... 14,900 534,463 ---------- Radio -- 0.2% XM Satellite Radio Holdings, Inc., Class A+. 18,900 267,813 ----------
Value Security Description Shares (Note 3) ------------------------------------------------------------- Rental Auto/Equipment -- 0.2% RSC Holdings, Inc.+.................... 17,900 $ 293,560 ------------ Retail-Apparel/Shoe -- 0.7% American Eagle Outfitters, Inc......... 39,600 1,041,876 ------------ Retail-Consumer Electronics -- 0.3% Best Buy Co., Inc...................... 9,700 446,394 ------------ Retail-Discount -- 0.7% Target Corp............................ 8,700 553,059 Wal-Mart Stores, Inc................... 11,400 497,610 ------------ 1,050,669 ------------ Retail-Drug Store -- 1.3% CVS Caremark Corp...................... 48,761 1,932,398 ------------ Retail-Office Supplies -- 0.3% Staples, Inc........................... 21,300 457,737 ------------ Retail-Regional Department Stores -- 0.7% Kohl's Corp.+.......................... 19,800 1,135,134 ------------ Retail-Restaurants -- 0.3% Starbucks Corp.+....................... 17,800 466,360 ------------ Telecom Equipment-Fiber Optics -- 0.4% Corning, Inc........................... 26,400 650,760 ------------ Telephone-Integrated -- 2.1% AT&T, Inc.............................. 40,535 1,715,036 Verizon Communications, Inc............ 32,600 1,443,528 ------------ 3,158,564 ------------ Therapeutics -- 0.4% Gilead Sciences, Inc.+................. 16,200 662,094 ------------ Tobacco -- 0.5% Altria Group, Inc...................... 10,300 716,159 ------------ Web Portals/ISP -- 1.8% Google, Inc., Class A+................. 3,150 1,786,901 Yahoo!, Inc.+.......................... 34,600 928,664 ------------ 2,715,565 ------------ Wireless Equipment -- 0.6% QUALCOMM, Inc.......................... 22,350 944,511 ------------ X-Ray Equipment -- 0.3% Hologic, Inc.+......................... 7,700 469,700 ------------ Total Common Stock (cost $87,842,248).................... 101,414,457 ------------ PREFERRED STOCK -- 0.6% Banks-Money Center -- 0.1% Santander Finance Preferred SA 5.87%*(1)............................. 8,400 173,250 ------------ Banks-Super Regional -- 0.1% Wachovia Capital Trust IX 6.38%................................. 3,100 71,517 ------------ Diversified Financial Services -- 0.2% General Electric Capital Corp. 8.00%(2).............................. 14,000 322,700 ------------ Finance-Mortgage Loan/Banker -- 0.0% Freddie Mac 6.55%...................... 2,338 58,707 ------------
41 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/ Principal Value Security Description Amount (Note 3) ---------------------------------------------------------------------- PREFERRED STOCK (continued) Special Purpose Entity -- 0.1% Structured Repackaged Asset-Backed Trust Securities, 4.92%(1)............................. 9,200 $186,852 -------- Telephone-Integrated -- 0.1% AT&T, Inc. 6.38%.................................. 4,400 104,808 -------- Total Preferred Stock (cost $1,022,444)................................ 917,834 -------- ASSET BACKED SECURITIES -- 5.3% Diversified Financial Services -- 5.3% Banc of America Funding Corp., Series 2007-C, Class 5A1 5.37% due 05/20/36(3)(4)......................... $347,186 345,282 Banc of America Funding Corp., Series 2006-J, Class 2A1 5.89% due 01/20/47(3)(4)......................... 338,324 342,978 Bear Stearns Commercial Mtg. Securities, Inc., Series 2007-PW15, Class A2 5.21% due 02/11/44(5)............................ 165,000 163,758 Bear Stearns Commercial Mtg. Securities, Inc., Series 2006-PW12, Class G 5.75% due 09/11/38(4)(5)......................... 58,000 48,792 Bear Stearns Commercial Mtg. Securities, Inc., Series 2007-PW15, Class H 5.93% due 02/11/44*(4)(5)........................ 375,000 279,057 Bear Stearns Commercial Mtg. Securities, Inc., Series 2006-PW12, Class F 5.93% due 09/11/38*(4)(5)........................ 340,000 300,519 Chase Mtg. Finance Corp. Series 2007-A2, Class 1A1 4.56% due 07/25/37(3)(4)......................... 436,314 433,802 Commercial Mtg. Pass Through Certs., Series 2004-LB2A, Class A3 4.22% due 03/10/39(5)............................ 674,000 660,073 Countrywide Asset-Backed Certs. Series 2006-S4, Class A3 5.80% due 10/25/36(4)............................ 920,000 907,761 Countrywide Asset-Backed Certs., Series 2006-S6, Class A3 5.66% due 03/25/34(4)............................ 928,000 910,409 J.P. Morgan Chase Commercial Mtg. Securities Corp., Series 2006-CB16, Class E 5.84% due 05/12/45*(4)(5)........................ 230,000 208,396 LB-UBS Commercial Mtg. Trust, Series 2007-C6, Class AM 6.11% due 07/17/40(4)(5)......................... 515,000 524,311 LB-UBS Commercial Mtg. Trust, Series 2007-C6, Class B 6.45% due 07/17/40(4)(5)......................... 400,000 397,645 Merrill Lynch Mtg. Investors Trust, Series 2004-A1, Class 3A 4.84% due 02/25/34(3)(4)......................... 301,821 299,028 Merrill Lynch/ Countrywide Commercial Mtg. Trust, Series 2007-5, Class H 6.12% due 08/25/48............................... 210,000 160,187
Principal Value Security Description Amount (Note 3) ---------------------------------------------------------------- Diversified Financial Services (continued) Morgan Stanley Capital I, Series 2006-IQ12, Class D 5.53% due 12/15/43(4)(5)................. $250,000 $ 233,605 Ocwen Advance Receivables Backed Notes, Series 2006-1A 5.34% due 11/24/15*(6)................... 350,000 297,500 Providian Master Note Trust Series 2006-C1A, Class C1 6.16% due 03/16/15*(1)................... 550,000 527,829 Wachovia Bank Commercial Mtg. Trust, Series 2006-WL7A, Class F 5.95% due 09/15/21*(1)(5)................ 515,000 506,896 Wells Fargo Mtg. Backed Securities Trust, Series 2006-AR17, Class A2 5.84% due 10/25/36(1)(3)................. 440,192 444,474 Wells Fargo Mtg. Backed Securities Trust, Series 2006-AR12, Class 2A1 6.10% due 09/25/36(3)(4)................. 221,309 223,976 ---------- Total Asset Backed Securities (cost $8,552,417)........................ 8,216,278 ---------- CORPORATE BONDS & NOTES -- 11.4% Aerospace/Defense-Equipment -- 0.1% United Technologies Corp. Senior Notes 6.10% due 05/15/12....................... 84,000 87,516 ---------- Agricultural Chemicals -- 0.1% Mosaic Global Holdings, Inc. Debentures 7.38% due 08/01/18....................... 10,000 9,700 Terra Capital, Inc. Company Guar. Notes 7.00% due 02/01/17....................... 25,000 24,375 The Mosaic Co. Senior Notes 7.38% due 12/01/14*...................... 45,000 47,250 ---------- 81,325 ---------- Airlines -- 0.1% American Airlines, Inc. Pass Through Certs. Series 2001-1, Class A-2 6.82% due 05/23/11....................... 70,000 68,250 Northwest Airlines, Inc. Pass Through Certs. Series 2002-1 Class G2 6.26% due 11/20/21....................... 43,025 42,434 ---------- 110,684 ---------- Auto-Cars/Light Trucks -- 0.1% DaimlerChrysler NA Holding Corp. Company Guar. Notes 6.05% due 03/13/09(1).................... 60,000 59,606 Ford Motor Co. Debentures 6.38% due 02/01/29....................... 70,000 51,450
42 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ------------------------------------------------------ CORPORATE BONDS & NOTES (continued) Auto-Cars/Light Trucks (continued) General Motors Corp. Debentures 8.25% due 07/15/23.............. $ 40,000 $ 35,000 General Motors Corp. Senior Bonds 8.38% due 07/15/33.............. 58,000 50,823 -------- 196,879 -------- Banks-Commercial -- 0.6% American Express Centurion Bank Notes 6.00% due 09/13/17.............. 35,000 34,824 Colonial Bank NA Sub. Notes 6.38% due 12/01/15.............. 70,000 69,151 Compass Bank Notes 5.50% due 04/01/20.............. 110,000 105,114 Compass Bank Sub. Notes 6.40% due 10/01/17.............. 80,000 79,527 First Maryland Capital II Company Guar. Notes 6.21% due 02/01/27(1)........... 196,000 182,299 Popular North America, Inc. Company Guar. Notes 5.65% due 04/15/09.............. 90,000 90,713 Silicon Valley Bank Senior Notes 5.70% due 06/01/12.............. 100,000 99,787 SouthTrust Bank Sub. Notes 4.75% due 03/01/13.............. 120,000 117,437 SouthTrust Corp. Sub. Notes 5.80% due 06/15/14.............. 55,000 55,047 Union Bank of California NA Sub. Notes 5.95% due 05/11/16.............. 120,000 119,116 US Bank NA Notes 3.90% due 08/15/08.............. 38,000 37,419 -------- 990,434 -------- Banks-Super Regional -- 0.3% Capital One Financial Corp. Senior Notes 5.70% due 09/15/11.............. 242,000 242,402 Capital One Financial Corp. Senior Notes 6.75% due 09/15/17.............. 72,000 73,723 JPMorgan Chase Bank NA Sub. Notes 6.00% due 10/01/17.............. 100,000 100,969 -------- 417,094 -------- Brewery -- 0.1% Anheuser-Busch Cos., Inc. Bonds 6.00% due 11/01/41.............. 136,000 129,568 --------
Principal Value Security Description Amount (Note 3) ----------------------------------------------------------- Broadcast Services/Program -- 0.0% Nexstar Finance, Inc. Senior Sub. Notes 7.00% due 01/15/14.................... $ 35,000 $ 33,600 -------- Building Products-Air & Heating -- 0.0% American Standard, Inc. Company Guar. Notes 7.38% due 02/01/08.................... 51,000 51,242 -------- Building-Residential/Commercial -- 0.1% Centex Corp. Senior Notes 5.45% due 08/15/12.................... 60,000 54,782 D.R. Horton, Inc. Company Guar. Notes 5.00% due 01/15/09.................... 41,000 39,431 -------- 94,213 -------- Cable TV -- 0.2% Cablevision Systems Corp. Senior Notes 8.00% due 04/15/12.................... 20,000 19,400 CCH I LLC Company Guar. Notes 11.00% due 10/01/15................... 28,000 28,700 CCH II LLC/CCH II Capital Corp. Company Guar. Notes 10.25% due 10/01/13................... 85,000 88,613 Comcast Corp. Company Guar. Notes 5.85% due 11/15/15.................... 50,000 49,586 Comcast Corp. Company Guar. Notes 5.88% due 02/15/18.................... 100,000 98,364 -------- 284,663 -------- Casino Hotels -- 0.0% MGM Mirage, Inc. Senior Notes 5.88% due 02/27/14.................... 35,000 32,244 Turning Stone Resort Casino Enterprise Senior Notes 9.13% due 09/15/14*................... 30,000 31,050 -------- 63,294 -------- Cellular Telecom -- 0.2% American Cellular Corp. Senior Notes 10.00% due 08/01/11................... 16,000 16,720 Centennial Communications Corp. Senior Notes 11.11% due 01/01/13(1)................ 100,000 103,000 Cricket Communications, Inc. Company Guar. Notes 9.38% due 11/01/14.................... 25,000 25,375 MetroPCS Wireless, Inc. Senior Notes 9.25% due 11/01/14*................... 25,000 25,500
43 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ---------------------------------------------------------- CORPORATE BONDS & NOTES (continued) Cellular Telecom (continued) Nextel Communications, Inc. Company Guar. Notes 5.95% due 03/15/14................... $100,000 $ 95,471 Rural Cellular Corp. Senior Sub. Notes 8.62% due 06/01/13*(1)............... 15,000 15,375 Rural Cellular Corp. Senior Notes 11.11% due 11/01/12(1)............... 5,000 5,100 -------- 286,541 -------- Chemicals-Diversified -- 0.1% EI Du Pont de Nemours & Co. Senior Notes 4.88% due 04/30/14................... 38,000 36,543 Lyondell Chemical Co. Company Guar. Notes 8.00% due 09/15/14................... 35,000 38,500 Rohm & Haas Co. Notes 6.00% due 09/15/17................... 45,000 45,131 -------- 120,174 -------- Chemicals-Specialty -- 0.1% Huntsman International LLC Company Guar. Notes 7.88% due 11/15/14................... 55,000 58,575 Momentive Performance Materials, Inc. Senior Sub. Notes 11.50% due 12/01/16*................. 85,000 84,150 -------- 142,725 -------- Commercial Services-Finance -- 0.1% The Western Union Co. Senior Notes 5.40% due 11/17/11................... 161,000 160,696 -------- Computer Services -- 0.1% Compucom Systems, Inc. Senior Sub. Notes 12.50% due 10/01/15*................. 30,000 29,250 Computer Sciences Corp. Notes 3.50% due 04/15/08................... 65,000 64,139 -------- 93,389 -------- Computers -- 0.1% International Business Machines Corp. Senior Notes 5.70% due 09/14/17................... 100,000 100,524 -------- Containers-Paper/Plastic -- 0.2% Jefferson Smurfit Corp. Company Guar. Notes 8.25% due 10/01/12................... 30,000 30,075
Principal Value Security Description Amount (Note 3) -------------------------------------------------------------- Containers-Paper/Plastic (continued) Pliant Corp. Company Guar. Notes 11.13% due 09/01/09...................... $ 82,000 $ 73,800 Smurfit-Stone Container Enterprises, Inc. Senior Notes 8.00% due 03/15/17....................... 175,000 171,937 -------- 275,812 -------- Direct Marketing -- 0.0% Affinity Group, Inc. Senior Sub. Notes 9.00% due 02/15/12....................... 45,000 45,900 -------- Diversified Financial Services -- 0.1% AXA Financial, Inc. Senior Notes 6.50% due 04/01/08....................... 55,000 55,305 General Electric Capital Corp. Senior Notes 5.63% due 09/15/17....................... 44,000 43,988 -------- 99,293 -------- Diversified Operations -- 0.0% Capmark Financial Group, Inc. Company Guar. Notes 5.88% due 05/10/12*...................... 50,000 45,536 -------- Electric-Generation -- 0.1% Bruce Mansfield Unit Trust Pass Through Certs. 6.85% due 06/01/34....................... 110,000 110,262 The AES Corp. Senior Notes 8.88% due 02/15/11....................... 85,000 88,719 -------- 198,981 -------- Electric-Integrated -- 0.9% Centerpoint Energy, Inc. Senior Notes 5.88% due 06/01/08....................... 140,000 139,866 Commonwealth Edison Co. 1st Mtg. Bonds 5.90% due 03/15/36....................... 110,000 102,997 Commonwealth Edison Co. 1st Mtg. Bonds 5.95% due 08/15/16....................... 50,000 49,829 Commonwealth Edison Co. 1st Mtg. Notes 6.15% due 09/15/17....................... 44,000 44,262 Dominion Resources, Inc. Senior Notes 5.69% due 05/15/08(2).................... 132,000 132,058 Dominion Resources, Inc. Jr. Sub. Notes 6.30% due 09/30/11(7).................... 109,000 107,992 Duke Energy Indiana, Inc. Debentures 5.00% due 09/15/13....................... 60,000 57,673
44 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ----------------------------------------------------------------- CORPORATE BONDS & NOTES (continued) Electric-Integrated (continued) Entergy Louisiana LLC 1st Mtg. Bonds 5.83% due 11/01/10....................... $195,000 $ 195,401 Mackinaw Power LLC Secured Notes 6.30% due 10/31/23*...................... 110,000 112,559 Mirant Americas Generation LLC Senior Notes 8.30% due 05/01/11....................... 30,000 30,300 Mirant Mid-Atlantic LLC Pass Through Certs. Series B 9.13% due 06/30/17....................... 40,254 44,581 Nisource Finance Corp. Company Guar. Notes 5.25% due 09/15/17....................... 43,000 39,909 Pepco Holdings, Inc. Senior Notes 6.45% due 08/15/12....................... 55,000 57,278 PSEG Power LLC Company Guar. Notes 7.75% due 04/15/11....................... 65,000 69,600 Puget Sound Energy, Inc. Senior Notes 5.20% due 10/01/15....................... 212,000 202,881 Southern Energy, Inc. Notes 7.90% due 07/15/09+(6)(8)(9)............. 150,000 0 ---------- 1,387,186 ---------- Electronic Components-Semiconductors -- 0.1% Freescale Semiconductor, Inc. Senior Sub. Notes 10.13% due 12/15/16...................... 50,000 46,500 National Semiconductor Corp. Senior Notes 6.60% due 06/15/17....................... 100,000 102,433 ---------- 148,933 ---------- Electronics-Military -- 0.0% L-3 Communications Corp. Company Guar. Notes 6.38% due 10/15/15....................... 40,000 39,300 ---------- Finance-Auto Loans -- 0.2% Ford Motor Credit Co. LLC Notes 7.38% due 10/28/09....................... 140,000 137,278 General Motors Acceptance Corp. Notes 6.88% due 09/15/11....................... 140,000 133,233 General Motors Acceptance Corp. Notes 6.88% due 08/28/12....................... 8,000 7,504 ---------- 278,015 ---------- Finance-Commercial -- 0.1% Transamerica Finance Corp. Senior Notes 6.40% due 09/15/08....................... 75,000 75,750 ----------
Principal Value Security Description Amount (Note 3) ----------------------------------------------------------- Finance-Consumer Loans -- 0.0% John Deere Capital Corp. Debentures 5.10% due 01/15/13................... $ 72,000 $ 70,896 -------- Finance-Credit Card -- 0.1% Capital One Bank Senior Sub. Notes 6.50% due 06/13/13................... 82,000 83,112 -------- Finance-Investment Banker/Broker -- 0.5% Citigroup, Inc. Senior Notes 5.88% due 05/29/37................... 45,000 43,377 JP Morgan Chase & Co. Senior Notes 5.38% due 01/15/14................... 120,000 119,201 Lehman Brothers Holdings, Inc. Sub. Notes 6.50% due 07/19/17................... 50,000 50,672 Lehman Brothers Holdings, Inc. Sub. Notes 6.88% due 07/17/37................... 90,000 89,278 Lehman Brothers Holdings, Inc. Senior Notes 7.00% due 09/27/27................... 54,000 55,290 Morgan Stanley Senior Notes 5.75% due 08/31/12................... 100,000 100,169 The Bear Stearns Cos., Inc. Senior Notes 6.40% due 10/02/17................... 180,000 179,200 The Goldman Sachs Group, Inc. Sub. Notes 6.75% due 10/01/37................... 81,000 81,520 -------- 718,707 -------- Finance-Mortgage Loan/Banker -- 0.3% Countrywide Financial Corp. Company Guar. Notes 5.80% due 06/07/12................... 27,000 25,307 Countrywide Financial Corp. Sub. Notes 6.25% due 05/15/16................... 100,000 90,496 Residential Capital LLC Senior Notes 6.50% due 06/01/12................... 162,000 131,220 Residential Capital LLC Company Guar. Notes 6.50% due 04/17/13................... 60,000 48,450 Residential Capital LLC Company Guar. Notes 6.88% due 06/30/15................... 250,000 201,875 -------- 497,348 -------- Food-Retail -- 0.0% The Kroger Co. Company Guar. Notes 6.40% due 08/15/17................... 23,000 23,453 --------
45 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ----------------------------------------------------------------- CORPORATE BONDS & NOTES (continued) Funeral Services & Related Items -- 0.0% Service Corp. International Senior Notes 6.75% due 04/01/16......................... $ 30,000 $ 29,062 -------- Home Furnishings -- 0.0% Simmons Co. Company Guar. Notes 7.88% due 01/15/14......................... 25,000 24,000 Simmons Co. Senior Disc. Notes 10.00% due 12/15/14(2)..................... 21,000 16,747 -------- 40,747 -------- Hotel/Motel -- 0.0% Starwood Hotels & Resorts Worldwide, Inc. Senior Notes 6.25% due 02/15/13......................... 45,000 45,164 -------- Independent Power Producers -- 0.2% Calpine Corp. Sec. Notes 8.75% due 07/15/13*(10).................... 175,000 190,750 NRG Energy, Inc. Company Guar. Notes 7.38% due 02/01/16......................... 90,000 90,225 -------- 280,975 -------- Insurance Brokers -- 0.1% Marsh & McLennan Cos., Inc. Senior Notes 5.15% due 09/15/10......................... 60,000 59,790 Marsh & McLennan Cos., Inc. Senior Notes 7.13% due 06/15/09......................... 40,000 41,354 -------- 101,144 -------- Insurance-Life/Health -- 0.1% Americo Life, Inc. Notes 7.88% due 05/01/13*........................ 134,000 136,853 Monumental Global Funding II Notes 5.65% due 07/14/11*........................ 66,000 67,562 -------- 204,415 -------- Insurance-Property/Casualty -- 0.1% The Travelers Cos., Inc. Senior Notes 6.25% due 06/15/37......................... 90,000 86,814 W.R. Berkley Corp. Senior Sub. Notes 6.25% due 02/15/37......................... 3,000 2,771 -------- 89,585 -------- Investment Management/Advisor Services -- 0.1% LVB Acquisition Merger Sub, Inc. Senior Notes 10.38% due 10/15/17*....................... 40,000 38,650
Principal Value Security Description Amount (Note 3) --------------------------------------------------------------------- Investment Management/Advisor Services (continued) LVB Acquisition Merger Sub, Inc. Senior Sub. Notes 11.63% due 10/15/17*........................... $ 50,000 $ 48,500 -------- 87,150 -------- Machinery-Farming -- 0.0% Case Corp. Notes 7.25% due 01/15/16............................. 50,000 51,750 -------- Medical-Drugs -- 0.2% American Home Products Corp. Notes 6.95% due 03/15/11............................. 123,000 128,910 Schering-Plough Corp Senior Notes 6.00% due 09/15/17............................. 100,000 100,449 Wyeth Bonds 5.50% due 02/01/14............................. 126,000 125,295 -------- 354,654 -------- Medical-HMO -- 0.0% Coventry Health Care, Inc. Senior Notes 5.95% due 03/15/17............................. 47,000 45,451 WellPoint, Inc. Notes 3.75% due 12/14/07............................. 6,620 6,596 -------- 52,047 -------- Medical-Hospitals -- 0.2% Community Health Systems, Inc. Senior Notes 8.88% due 07/15/15*............................ 80,000 82,200 HCA, Inc. Senior Notes 6.25% due 02/15/13............................. 55,000 48,675 HCA, Inc. Sec. Notes 9.13% due 11/15/14*............................ 25,000 26,375 HCA, Inc. Sec. Notes 9.25% due 11/15/16*............................ 140,000 148,750 -------- 306,000 -------- Metal Processors & Fabrication -- 0.1% Commercial Metals Co. Senior Notes 6.50% due 07/15/17............................. 87,000 90,305 Timken Co. Notes 5.75% due 02/15/10............................. 96,000 97,404 -------- 187,709 -------- Metal-Aluminum -- 0.1% Alcoa, Inc. Notes 6.00% due 01/15/12............................. 60,000 61,194
46 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ----------------------------------------------------------------- CORPORATE BONDS & NOTES (continued) Metal-Aluminum (continued) Alcoa, Inc. Bonds 6.50% due 06/15/18......................... $141,000 $145,033 -------- 206,227 -------- Metal-Diversified -- 0.1% Freeport-McMoRan Copper & Gold, Inc. Senior Notes 8.38% due 04/01/17......................... 65,000 71,012 -------- Mining -- 0.0% Newmont Mining Corp. Company Guar. Notes 5.88% due 04/01/35......................... 60,000 52,865 -------- Multimedia -- 0.4% Belo Corp. Senior Notes 6.75% due 05/30/13......................... 60,000 61,538 Cox Enterprises, Inc. Notes 7.88% due 09/15/10*........................ 205,000 219,328 News America, Inc. Company Guar. Bonds 7.30% due 04/30/28......................... 80,000 83,546 Time Warner Entertainment Co. LP Senior Notes 8.38% due 07/15/33......................... 156,000 182,927 Viacom, Inc. Senior Notes 6.88% due 04/30/36......................... 50,000 49,792 -------- 597,131 -------- Non-Hazardous Waste Disposal -- 0.1% Waste Management, Inc. Company Guar. Notes 6.88% due 05/15/09......................... 56,000 57,882 Waste Management, Inc. Company Guar. Notes 7.75% due 05/15/32......................... 60,000 67,382 -------- 125,264 -------- Office Automation & Equipment -- 0.2% IKON Office Solutions, Inc. Senior Notes 7.75% due 09/15/15......................... 40,000 40,200 Pitney Bowes, Inc. Notes 5.25% due 01/15/37......................... 194,000 186,123 Pitney Bowes, Inc. Notes 5.75% due 09/15/17......................... 85,000 85,123 -------- 311,446 -------- Oil Companies-Exploration & Production -- 0.4% Anadarko Petroleum Corp. Senior Notes 5.95% due 09/15/16......................... 120,000 118,849
Principal Value Security Description Amount (Note 3) --------------------------------------------------------------------- Oil Companies-Exploration & Production (continued) Apache Corp. Senior Notes 6.25% due 04/15/12............................. $200,000 $208,216 Chesapeake Energy Corp. Company Guar. Notes 7.50% due 09/15/13............................. 175,000 179,813 Sabine Pass LNG LP Secured Notes 7.50% due 11/30/16............................. 75,000 73,875 -------- 580,753 -------- Oil Companies-Integrated -- 0.1% Hess Corp. Bonds 7.88% due 10/01/29............................. 80,000 91,953 Marathon Oil Corp. Notes 6.60% due 10/01/37............................. 69,000 70,549 -------- 162,502 -------- Oil Refining & Marketing -- 0.1% The Premcor Refining Group, Inc. Company Guar. Notes 6.75% due 05/01/14............................. 180,000 187,619 -------- Oil-Field Services -- 0.1% Allis-Chalmers Energy, Inc. Company Guar. Notes 9.00% due 01/15/14............................. 15,000 15,112 Weatherford International, Inc. Company Guar. Notes 6.80% due 06/15/37*............................ 90,000 92,439 -------- 107,551 -------- Paper & Related Products -- 0.1% Bowater, Inc. Notes 6.50% due 06/15/13............................. 75,000 54,750 Georgia-Pacific Corp. Company Guar. Notes 7.00% due 01/15/15*............................ 30,000 29,250 Georgia-Pacific Corp. Company Guar. Notes 7.13% due 01/15/17*............................ 10,000 9,675 -------- 93,675 -------- Physicians Practice Management -- 0.0% US Oncology, Inc. Senior Sub. Notes 10.75% due 08/15/14............................ 10,000 10,325 -------- Pipelines -- 0.3% CenterPoint Energy Resources Corp. Notes 7.75% due 02/15/11............................. 130,000 138,181 Copano Energy LLC Company Guar. Notes 8.13% due 03/01/16............................. 95,000 96,663
47 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ---------------------------------------------------------- CORPORATE BONDS & NOTES (continued) Pipelines (continued) Duke Energy Field Services LLC Notes 6.88% due 02/01/11................... $ 60,000 $ 62,256 Dynegy-Roseton Danskammer Pass Through Certs. Series B 7.67% due 11/08/16................... 45,000 45,225 ONEOK Partners LP Company Guar. Notes 6.85% due 10/15/37................... 74,000 74,582 Williams Cos., Inc. Senior Notes 7.88% due 09/01/21................... 90,000 97,875 -------- 514,782 -------- Publishing-Newspapers -- 0.0% Knight Ridder, Inc. Debentures 6.88% due 03/15/29................... 70,000 56,880 -------- Publishing-Periodicals -- 0.0% The Reader's Digest Association, Inc. Senior Sub. Notes 9.00% due 02/15/17*.................. 25,000 22,500 -------- Radio -- 0.1% Chancellor Media Corp. Company Guar. Notes 8.00% due 11/01/08................... 182,000 184,953 -------- Real Estate Investment Trusts -- 0.4% AvalonBay Communities, Inc. Senior Notes 5.75% due 09/15/16................... 110,000 106,887 Health Care Property Investors, Inc. Senior Notes 5.65% due 12/15/13................... 100,000 96,596 Liberty Property LP Senior Notes 5.63% due 10/01/17................... 45,000 44,916 New Plan Excel Realty Trust Senior Notes 4.50% due 02/01/11................... 110,000 107,730 PPF Funding, Inc., Bonds 5.35% due 04/15/12*.................. 60,000 59,480 Reckson Operating Partnership LP Senior Notes 6.00% due 03/31/16................... 35,000 33,256 Simon Property Group LP Notes 5.38% due 08/28/08................... 40,000 39,768 Vornado Realty LP Notes 4.50% due 08/15/09................... 60,000 59,065 -------- 547,698 --------
Principal Value Security Description Amount (Note 3) ------------------------------------------------------------ Recycling -- 0.0% Aleris International, Inc. Company Guar. Notes 9.00% due 12/15/14..................... $ 45,000 $ 41,625 Aleris International, Inc. Senior Sub. Notes 10.00% due 12/15/16.................... 20,000 17,700 -------- 59,325 -------- Rental Auto/Equipment -- 0.1% ERAC USA Finance Co. Notes 7.35% due 06/15/08*.................... 150,000 151,636 United Rentals North America, Inc. Senior Sub. Notes 7.75% due 11/15/13..................... 40,000 41,200 -------- 192,836 -------- Research & Development -- 0.0% Alion Science and Technology Corp. Company Guar. Notes 10.25% due 02/01/15.................... 55,000 49,912 -------- Retail-Drug Store -- 0.1% CVS Caremark Corp. Senior Notes 6.25% due 06/01/27..................... 100,000 96,912 CVS Lease Pass Through Trust Pass Through Certs. 6.04% due 12/10/28*.................... 118,037 114,653 -------- 211,565 -------- Retail-Regional Department Stores -- 0.0% JC Penney Corp., Inc. Senior Notes 5.75% due 02/15/18..................... 14,000 13,440 -------- Retail-Restaurants -- 0.0% NPC International, Inc. Company Guar. Notes 9.50% due 05/01/14..................... 35,000 31,850 -------- Savings & Loans/Thrifts -- 0.6% Independence Community Bank Corp. Sub. Notes 3.50% due 06/20/13(7).................. 64,000 62,977 Sovereign Bancorp, Inc. Senior Notes 4.80% due 09/01/10..................... 206,000 201,258 Washington Mutual Bank Sub. Notes 5.13% due 01/15/15..................... 210,000 195,594 Washington Mutual Bank Sub. Notes 5.50% due 01/15/13..................... 138,000 132,999 Washington Mutual Preferred Funding III Bonds 6.90% due 06/12/12*(7)................. 100,000 102,448 Washington Mutual, Inc. Senior Notes 5.50% due 08/24/11..................... 150,000 148,087
48 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) --------------------------------------------------------------- CORPORATE BONDS & NOTES (continued) Savings & Loans/Thrifts (continued) Western Financial Bank Senior Debentures 9.63% due 05/15/12........................ $126,000 $135,259 -------- 978,622 -------- Special Purpose Entities -- 0.5% BAE Systems Holdings, Inc. Notes 5.20% due 08/15/15*....................... 175,000 166,787 Capital One Capital IV Company Guar. Bonds 6.75% due 02/17/37........................ 65,000 57,964 Consolidated Communications Illinois/Texas Holdings, Inc. Senior Notes 9.75% due 04/01/12........................ 159,000 160,590 Cyrus Reinsurance Holdings SPC Senior Notes 6.36% due 09/01/08*(6)(7)................. 76,000 74,480 KAR Holdings, Inc. Senior Notes 9.36% due 05/01/14*(1).................... 25,000 23,938 Norbord Delaware GP I Company Guar. Notes 6.45% due 02/15/17*....................... 49,000 44,567 Pricoa Global Funding I Notes 5.30% due 09/27/13*....................... 110,000 110,558 Principal Life Global Funding I Sec. Notes 5.25% due 01/15/13*....................... 100,000 99,727 -------- 738,611 -------- Steel-Producers -- 0.2% International Steel Group, Inc. Senior Notes 6.50% due 04/15/14........................ 130,000 129,080 Reliance Steel & Aluminum Co. Company Guar. Notes 6.85% due 11/15/36........................ 60,000 58,590 United States Steel Corp. Senior Notes 6.05% due 06/01/17........................ 55,000 52,631 United States Steel Corp. Senior Notes 6.65% due 06/01/37........................ 48,000 44,283 -------- 284,584 -------- Telecom Services -- 0.1% Bellsouth Telecommunications, Inc. Debentures 7.00% due 12/01/95........................ 104,000 105,673 Qwest Corp. Senior Notes 7.50% due 10/01/14........................ 65,000 67,600 -------- 173,273 --------
Principal Value Security Description Amount (Note 3) ---------------------------------------------------------- Telephone-Integrated -- 0.5% AT&T Corp. Senior Notes 7.30% due 11/15/11................... $ 63,000 $ 67,680 BellSouth Corp. Senior Notes 6.00% due 10/15/11................... 200,000 204,896 Citizens Communications Co. Senior Notes 7.13% due 03/15/19................... 25,000 24,625 GTE Northwest, Inc. Debentures 5.55% due 10/15/08................... 70,000 70,165 Level 3 Financing, Inc. Company Guar. Notes 9.25% due 11/01/14................... 20,000 19,700 New England Telephone & Telegraph Co. Debentures 7.88% due 11/15/29................... 80,000 88,890 Sprint Capital Corp. Company Guar. Notes 6.88% due 11/15/28................... 120,000 115,812 Verizon New York, Inc. Debentures 6.88% due 04/01/12................... 102,000 107,447 -------- 699,215 -------- Television -- 0.1% Paxson Communication Corp. Senior Notes 11.61% due 01/15/13*(1).............. 55,000 56,100 Young Broadcasting, Inc. Company Guar. Notes 10.00% due 03/01/11.................. 25,000 23,062 -------- 79,162 -------- Transport-Air Freight -- 0.3% Atlas Air, Inc. Pass Through Certs. Series 1991-1, Class B 7.63% due 01/02/15................... 366,911 421,948 -------- Transport-Rail -- 0.2% BNSF Funding Trust I Company Guar. Bonds 6.61% due 01/15/26(7)................ 130,000 117,274 CSX Corp. Senior Notes 6.25% due 03/15/18................... 90,000 90,473 Union Pacific Corp. Notes 3.88% due 02/15/09................... 18,000 17,630 -------- 225,377 -------- Transport-Services -- 0.1% FedEx Corp. Company Guar. Notes 5.50% due 08/15/09................... 55,000 55,615
49 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ------------------------------------------------------------- CORPORATE BONDS & NOTES (continued) Transport-Services (continued) PHI, Inc. Company Guar. Notes 7.13% due 04/15/13.................. $ 75,000 $ 72,000 Ryder System, Inc. Notes 5.85% due 03/01/14.................. 32,000 32,257 ----------- 159,872 ----------- Travel Service -- 0.0% Travelport LLC Company Guar. Notes 10.25% due 09/01/14(1).............. 25,000 25,000 ----------- Total Corporate Bonds & Notes (cost $17,436,446).................. 17,440,960 ----------- FOREIGN CORPORATE BONDS & NOTES -- 3.8% Banks-Commercial -- 0.3% Banco Continental de Panama SA Notes 6.63% due 12/01/10*................. 35,000 35,700 Caisse Nationale des Caisses d'Epargne et de Prevoyance Notes 4.93% due 12/30/09(1)(12)........... 109,000 87,472 Credit Agricole SA Jr. Sub. Notes 6.64% due 05/31/17*(1)(12).......... 111,000 103,557 HSBC Holdings PLC Sub. Notes 6.50% due 09/15/37.................. 100,000 100,653 Royal Bank of Scotland Group PLC Bonds 6.99% due 10/29/17*(7).............. 100,000 101,871 Societe Generale Sub. Notes 5.92% due 04/05/07*(1)(12).......... 65,000 61,575 ----------- 490,828 ----------- Banks-Money Center -- 0.2% HBOS Capital Funding LP Bank Guar. Bonds 6.85% due 03/23/09(12).............. 200,000 190,500 Mizuho Financial Group Cayman, Ltd. Bank Guar. Bonds 8.38% due 04/27/09(12).............. 145,000 151,029 National Westminster Bank PLC Sub. Notes 7.75% due 10/16/07(7)............... 55,000 55,104 ----------- 396,633 ----------- Broadcast Services/Program -- 0.1% Grupo Televisa SA Senior Notes 6.63% due 03/18/25.................. 139,000 141,258 -----------
Principal Value Security Description Amount (Note 3) --------------------------------------------------------------- Building Products-Cement -- 0.1% C8 Capital SPV, Ltd. Notes 6.64% due 12/31/14*(7)................... $221,000 $214,803 -------- Cellular Telecom -- 0.1% America Movil SA de CV Bonds 6.38% due 03/01/35....................... 112,000 109,958 -------- Cruise Lines -- 0.0% Royal Caribbean Cruises, Ltd. Senior Notes 7.00% due 06/15/13....................... 70,000 69,611 -------- Diversified Financial Services -- 0.1% CIT Group Funding Co. of Canada Company Guar. Notes 5.20% due 06/01/15....................... 103,000 93,522 -------- Diversified Manufacturing Operations -- 0.1% Tyco International Group SA Company Guar. Notes 6.00% due 11/15/13....................... 120,000 121,130 -------- Diversified Operations -- 0.1% Hutchison Whampoa Finance, Ltd. Company Guar. Notes 7.50% due 08/01/27*...................... 140,000 156,332 -------- Electric-Integrated -- 0.1% Empresa Nacional de Electricidad SA Bonds 7.33% due 02/01/37....................... 84,000 88,807 Enel Finance International SA Company Guar. Notes 6.25% due 09/15/17*...................... 30,000 30,111 Enel Finance International SA Company Guar. Notes 6.80% due 09/15/37*...................... 105,000 106,919 -------- 225,837 -------- Electronic Components-Misc. -- 0.0% NXP BV / NXP Funding LLC Company Guar. Notes 9.50% due 10/15/15....................... 10,000 9,325 -------- Finance-Other Services -- 0.0% Lukoil International Finance BV Company Guar. Notes 6.36% due 06/07/17*...................... 72,000 69,120 -------- Food-Retail -- 0.1% Delhaize Group Notes 6.50% due 06/15/17*...................... 90,000 90,768 -------- Gas-Distribution -- 0.1% Nakilat, Inc. Sec. Notes 6.07% due 12/31/33*...................... 85,000 82,014 --------
50 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ----------------------------------------------------------------- FOREIGN CORPORATE BONDS & NOTES (continued) Insurance-Multi-line -- 0.3% Aegon NV Sub. Bonds 5.86% due 07/15/14(1)(12).................. $156,000 $121,680 AXA SA Sub. Notes 6.38% due 12/14/36*(7)..................... 85,000 76,639 ING Groep NV Bonds 5.78% due 12/08/15(7)...................... 225,000 212,589 -------- 410,908 -------- Investment Companies -- 0.1% Canadian Oil Sands, Ltd. Notes 5.80% due 08/15/13*........................ 124,000 122,905 -------- Medical-Drugs -- 0.1% Angiotech Pharmaceuticals, Inc. Company Guar. Notes 7.75% due 04/01/14......................... 55,000 50,325 Angiotech Pharmaceuticals, Inc. Company Guar. Notes 9.11% due 12/01/13(1)...................... 15,000 15,375 AstraZeneca PLC Notes 6.45% due 09/15/37......................... 99,000 102,650 Elan Finance PLC Company Guar. Bonds 7.75% due 11/15/11......................... 70,000 68,600 -------- 236,950 -------- Metal-Aluminum -- 0.0% Alcan, Inc. Notes 6.13% due 12/15/33......................... 75,000 72,020 -------- Metal-Diversified -- 0.0% Inco, Ltd. Bonds 7.20% due 09/15/32......................... 71,000 73,861 -------- Multimedia -- 0.1% The Thomson Corp. Notes 5.70% due 10/01/14......................... 90,000 89,239 -------- Oil Companies-Exploration & Production -- 0.1% Nexen, Inc. Bonds 6.40% due 05/15/37......................... 100,000 97,175 -------- Paper & Related Products -- 0.0% Abitibi-Consolidated, Inc. Notes 8.55% due 08/01/10......................... 45,000 37,125 -------- Pipelines -- 0.2% Enbridge, Inc. Bonds 5.80% due 06/15/14......................... 183,000 182,390
Principal Value Security Description Amount (Note 3) --------------------------------------------------------------- Pipelines (continued) Kinder Morgan Finance Co. ULC Company Guar. Notes 5.70% due 01/05/16....................... $105,000 $ 95,439 -------- 277,829 -------- Real Estate Operations & Development -- 0.1% Brascan Corp. Notes 8.13% due 12/15/08....................... 157,000 163,018 -------- Satellite Telecom -- 0.1% Intelsat Bermuda, Ltd. Company Guar. Notes 8.89% due 01/15/15(1).................... 65,000 65,650 Intelsat Intermediate Holding Co., Ltd. Senior Notes 9.25% due 02/01/15(2).................... 25,000 20,562 Intelsat, Ltd. Senior Notes 6.50% due 11/01/13....................... 40,000 30,400 -------- 116,612 -------- Special Purpose Entities -- 0.6% Aries Vermoegensverwaltungs GmbH Bonds 9.60% due 10/25/14*...................... 250,000 313,125 Hybrid Capital Funding I LP Sub. Notes 8.00% due 06/30/11(12)................... 286,000 264,431 Rio Tinto Finance USA, Ltd. Notes 2.63% due 09/30/08....................... 55,000 53,856 SMFG Preferred Capital, Ltd. Sub. Bonds 6.08% due 01/25/17*(1)(12)............... 121,000 111,887 SovRisc BV Notes 4.63% due 10/31/08*...................... 133,000 133,117 -------- 876,416 -------- Telecom Services -- 0.2% Telenet Group Holdings NV Notes 11.50% due 06/15/14*(2).................. 26,000 25,740 TELUS Corp. Notes 8.00% due 06/01/11....................... 238,000 257,568 -------- 283,308 -------- Telephone-Integrated -- 0.3% British Telecommunications PLC Bonds 8.63% due 12/15/30....................... 140,000 185,388 Telecom Italia Capital SA Company Guar. Bonds 5.25% due 10/01/15....................... 55,000 52,213
51 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ---------------------------------------------------------- FOREIGN CORPORATE BONDS & NOTES (continued) Telephone-Integrated (continued) Telecom Italia Capital SA Company Guar. Bonds 6.20% due 07/18/11................ $115,000 $ 117,840 Telefonica Emisiones SAU Company Guar. Notes 6.22% due 07/03/17................ 82,000 82,838 ---------- 438,279 ---------- Transport-Marine -- 0.1% DP World, Ltd. Bonds 6.85% due 07/02/37*............... 121,000 120,180 ---------- Transport-Rail -- 0.1% Canadian National Railway Co. Notes 6.38% due 10/15/11................ 130,000 134,931 Canadian National Railway Co. Debentures 6.38% due 11/15/37................ 64,000 64,769 ---------- 199,700 ---------- Total Foreign Corporate Bonds & Notes (cost $6,076,373)................. 5,886,664 ---------- FOREIGN GOVERNMENT AGENCIES -- 1.9% Sovereign -- 1.9% Federal Republic of Brazil Notes 8.00% due 01/15/18................ 200,000 223,200 Federal Republic of Brazil Bonds 10.50% due 07/14/14............... 205,000 259,325 Republic of Argentina Bonds 5.39% due 08/03/12(1)............. 230,000 130,410 Republic of Argentina Notes 8.28% due 12/31/33................ 371,506 337,142 Republic of Turkey Notes 9.00% due 06/30/11................ 190,000 208,525 Republic of Turkey Senior Notes 11.88% due 01/15/30............... 380,000 589,950 Republic of Venezuela Notes 8.50% due 10/08/14................ 100,000 100,250 Republic of Venezuela Bonds 9.25% due 09/15/27................ 500,000 517,500 Russian Federation Bonds 7.50% due 03/31/30(2)............. 348,250 392,791 Russian Federation Bonds 7.50% due 03/31/30*(2)............ 124,375 138,989 ---------- Total Foreign Government Agencies (cost $2,724,975)................. 2,898,082 ----------
Principal Value Security Description Amount (Note 3) --------------------------------------------------------------- U.S. GOVERNMENT AGENCIES -- 8.1% Federal Home Loan Mtg. Corp. -- 5.0% 5.00% due 05/01/34................... $ 823,349 $ 787,450 5.00% due 06/01/34................... 1,459,563 1,395,926 5.00% due 11/01/35................... 984,967 941,104 5.00% due 11/01/36................... 33,426 31,894 5.50% due 07/01/34................... 520,091 510,324 5.70% due 08/01/36(1)................ 1,303,423 1,306,655 5.80% due 01/01/37(1)................ 247,410 249,172 5.81% due 01/01/37(1)................ 443,472 443,768 5.98% due 10/01/36(1)................ 613,244 613,871 6.00% due 12/01/33................... 94,754 95,287 6.00% due October TBA................ 625,000 625,586 6.50% due 03/01/36................... 283,914 289,061 6.50% due 05/01/36................... 8,997 9,160 7.00% due 04/01/32................... 156,723 162,478 Federal Home Loan Mtg. Corp. REMIC Series 3349, Class HB 5.50% due 06/15/31(3)................. 232,000 231,361 ------------ 7,693,097 ------------ Federal National Mtg. Assoc. -- 2.5% 5.00% due 08/01/18................... 164,618 161,816 5.00% due October TBA................ 130,000 123,988 5.50% due 12/01/33................... 937,494 920,886 5.50% due 02/01/36(1)................ 315,953 317,350 5.50% due 11/01/36................... 493,170 483,144 6.00% due 06/01/17................... 260,133 264,158 6.00% due 12/01/33................... 86,848 87,287 6.00% due 11/01/36................... 980,342 973,867 6.50% due 09/01/10................... 65,895 67,071 6.50% due 09/01/32................... 276,011 282,680 6.50% due 07/01/36................... 118,385 120,558 ------------ 3,802,805 ------------ Government National Mtg. Assoc. -- 0.6% 5.50% due 05/15/33................... 460,176 454,399 5.50% due 12/15/33................... 339,661 335,397 7.50% due 01/15/32................... 128,645 134,965 ------------ 924,761 ------------ Total U.S. Government Agencies (cost $12,543,955).................. 12,420,663 ------------ Total Long-Term Investment Securities (cost $136,198,858)................. 149,194,938 ------------
52 SunAmerica Balanced Assets Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Principal Value Security Description Amount (Note 3) ------------------------------------------------------------------------- REPURCHASE AGREEMENTS -- 3.3% Agreement with State Street Bank & Trust Co., bearing interest at 2.50%, dated 09/28/07, to be repurchased 10/01/07 in the amount of $1,394,290 and collateralized by $1,455,000 of Federal National Mtg. Assoc. Bonds, bearing interest at 5.20%, due 03/05/19 and having an approximate value of $1,423,685................................ $1,394,000 $ 1,394,000 State Street Bank & Trust Co. Joint Repurchase Agreement (11).............. 3,623,000 3,623,000 ------------ Total Repurchase Agreements (cost $5,017,000)............................ 5,017,000 ------------ TOTAL INVESTMENTS (cost $141,215,858)(13)...................... 100.5% 154,211,938 Liabilities in excess of other assets........... (0.5) (698,883) ---------- ------------ NET ASSETS 100.0% $153,513,055 ========== ============ Bonds & Notes Sold Short -- (0.4%) U.S. Government Agencies -- (0.4%) Federal Home Loan Mtg. Corp. 5.00% due October TBA (Proceeds $603,503).......................... $ (626,000) $ (597,047) ========== ============
- -------- + Non-income producing security * 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, 2007, the aggregate value of these securities was $6,896,675 representing 4.5% of net assets. Unless otherwise indicated these securities are not considered to be illiquid. (1) Floating rate security where the rate fluctuates. The rate moves up or down at each reset date. The rate reflected is as of September 30, 2007. (2) "Step-up" security where the rate increases ("steps-up") at a predetermined rate. Rate shown reflects the increased rate. (3) Collateralized Mortgage Obligation (4) Variable Rate Security -- the rate reflected is as of September 30, 2007, maturity date reflects the stated maturity date. (5) Commercial Mortgage Backed Security (6) Fair valued security; see Note 3 (7) Variable Rate Security -- the rate reflected is as of September 30, 2007, maturity date reflects next reset date. (8) Illiquid security (9) To the extent permitted by the Statement of Additional Information, the Balanced Assets Fund may invest in restricted securities. The Fund has no right to demand registration of these securities. The securities are valued pursuant to Note 3. Restricted securities held by a Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. 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, these securities may exhibit greater price volatility than securities for which secondary markets exist. As of September 30, 2007, the Balanced Assets Fund held the following restricted securities:
Market Value Acquisition Principal Acquisition Market Per Par % of Name Date Amount Cost Value Amount Net Assets ---- ----------- --------- ----------- ------ ------- ---------- Southern Energy 7.90% due 07/15/09...... 01/10/2006 150,000 $0 $0 $0 0.00%
(10) Company has filed Chapter 11 bankruptcy protection. (11) See Note 3 for details of Joint Repurchase Agreement. (12) Perpetual maturity -- maturity date reflects the next call date. (13) See Note 7 for cost of investments on a tax basis. ADR -- AmericanDepository Receipt TBA -- Securitiespurchased on a forward commitment basis with an approximate principal amount and no definite maturity date. The actual principal and maturity date will be determined upon settlement date. See Notes to Financial Statements 53 SunAmerica International Equity Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Banks-Commercial................................................................ 7.1% Insurance-Multi-line............................................................ 5.5 Medical-Drugs................................................................... 4.4 Oil-Field Services.............................................................. 4.1 Steel-Producers................................................................. 3.6 Auto-Cars/Light Trucks.......................................................... 3.5 Medical Products................................................................ 3.2 Soap & Cleaning Preparation..................................................... 3.0 Electronic Components-Misc...................................................... 2.9 Food-Misc....................................................................... 2.7 Cellular Telecom................................................................ 2.4 Chemicals-Diversified........................................................... 2.4 Electric-Integrated............................................................. 2.4 Tobacco......................................................................... 2.4 Building-Heavy Construction..................................................... 2.3 Coal............................................................................ 2.3 Index Fund-Mid Cap.............................................................. 2.3 Repurchase Agreement............................................................ 2.3 Telephone-Integrated............................................................ 2.1 Diversified Minerals............................................................ 1.9 Oil Companies-Integrated........................................................ 1.8 Hotels/Motels................................................................... 1.7 Enterprise Software/Service..................................................... 1.6 Building & Construction-Misc.................................................... 1.5 Circuit Boards.................................................................. 1.5 Diversified Manufacturing Operations............................................ 1.5 Machinery-Construction & Mining................................................. 1.5 Chemicals-Other................................................................. 1.4 Satellite Telecom............................................................... 1.4 Machinery-General Industrial.................................................... 1.3 Metal-Diversified............................................................... 1.3 Miscellaneous Manufacturing..................................................... 1.3 Diversified Financial Services.................................................. 1.2 Import/Export................................................................... 1.1 Medical-Generic Drugs........................................................... 1.1 Rubber-Tires.................................................................... 1.1 E-Commerce/Products............................................................. 1.0 Food-Retail..................................................................... 1.0 Gas-Distribution................................................................ 1.0 Insurance-Life/Health........................................................... 1.0 Insurance-Property/Casualty..................................................... 1.0 Toys............................................................................ 1.0 Agricultural Chemicals.......................................................... 0.9 Auto/Truck Parts & Equipment-Original........................................... 0.9 Building-Residential/Commercial................................................. 0.9 Electric Products-Misc.......................................................... 0.9 Water........................................................................... 0.9 Engineering/R&D Services........................................................ 0.8 Office Automation & Equipment................................................... 0.8 Cable TV........................................................................ 0.7 Real Estate Operations & Development............................................ 0.7 Machine Tools & Related Products................................................ 0.6 Transport-Marine................................................................ 0.6 Building Products-Cement........................................................ 0.4 Lighting Products & Systems..................................................... 0.3 ----- 100.5% =====
- -------- * Calculated as a percentage of net assets Country Allocation* Japan........................................................................... 16.1% Germany......................................................................... 14.0 France.......................................................................... 11.0 United Kingdom.................................................................. 9.9 Australia....................................................................... 5.6 Switzerland..................................................................... 5.3 Italy........................................................................... 4.4 Norway.......................................................................... 4.4 South Korea..................................................................... 3.6 Greece.......................................................................... 2.5 Cayman Islands.................................................................. 2.3 China........................................................................... 2.3 Mexico.......................................................................... 2.3 United States................................................................... 2.3 Brazil.......................................................................... 1.7 South Africa.................................................................... 1.7 Belgium......................................................................... 1.6 Russia.......................................................................... 1.6 Singapore....................................................................... 1.3 Taiwan.......................................................................... 1.2 Israel.......................................................................... 1.1 Hong Kong....................................................................... 1.0 Egypt........................................................................... 0.9 Malaysia........................................................................ 0.9 Sweden.......................................................................... 0.8 New Zealand..................................................................... 0.5 Bermuda......................................................................... 0.2 ----- 100.5% =====
54 SunAmerica International Equity Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) --------------------------------------------------------------------- COMMON STOCK -- 93.6% Australia -- 5.6% BHP Billiton, Ltd............................... 39,300 $ 1,553,586 Boart Longyear Group+........................... 472,100 997,025 CSL, Ltd........................................ 22,000 2,094,678 QBE Insurance Group, Ltd........................ 45,200 1,355,658 Woolworths, Ltd................................. 47,680 1,256,996 ----------- 7,257,943 ----------- Belgium -- 1.6% KBC Groep NV.................................... 15,300 2,104,907 ----------- Bermuda -- 0.2% Peace Mark Holdings, Ltd........................ 164,000 244,718 ----------- Brazil -- 1.0% B2W Companhia Global do Varejo.................. 28,000 1,321,331 ----------- Cayman Islands -- 2.3% Hengan International Group Co., Ltd............. 184,000 694,688 Kingboard Chemical Holdings, Ltd................ 291,000 1,849,200 Neo-Neon Holdings, Ltd.......................... 328,000 430,366 ----------- 2,974,254 ----------- China -- 2.3% China Coal Energy Co............................ 996,400 2,960,803 ----------- Egypt -- 0.9% Orascom Construction Industries................. 6,700 1,133,975 ----------- France -- 8.7% Accor SA........................................ 24,500 2,175,101 AXA SA.......................................... 44,894 2,008,840 Compagnie Generale des Etablissements Michelin, Class B........................................ 11,200 1,505,712 Electricite de France........................... 13,200 1,395,691 Renault SA...................................... 14,900 2,159,085 Vinci SA........................................ 27,100 2,117,263 ----------- 11,361,692 ----------- Germany -- 12.4% Allianz SE...................................... 15,000 3,504,628 Bayer AG........................................ 30,900 2,459,532 E.ON AG......................................... 4,500 831,999 GEA Group AG+................................... 40,100 1,410,645 MAN AG.......................................... 11,700 1,702,563 Merck KGaA...................................... 18,776 2,265,049 SAP AG.......................................... 34,600 2,025,319 Siemens AG...................................... 14,400 1,979,857 ----------- 16,179,592 ----------- Greece -- 2.5% Hellenic Telecommunications Organization SA..... 26,200 971,357 National Bank of Greece SA...................... 36,500 2,326,508 ----------- 3,297,865 ----------- Hong Kong -- 1.0% Hong Kong & China Gas Co., Ltd.................. 533,500 1,244,903 Peregrine Investments Holdings, Ltd.+(1)(2)..... 91,000 0 ----------- 1,244,903 ----------- Israel -- 1.1% Teva Pharmaceutical Industries, Ltd. ADR........ 31,500 1,400,805 -----------
Value Security Description Shares (Note 3) ----------------------------------------------------------- Italy -- 4.4% Saipem SpA............................ 83,400 $ 3,558,212 UniCredito Italiano SpA............... 262,500 2,245,871 ----------- 5,804,083 ----------- Japan -- 16.1% Canon, Inc............................ 18,300 998,921 Daiichi Sankyo Co., Ltd............... 49,300 1,480,738 FANUC, Ltd............................ 21,900 2,232,612 Ibiden Co., Ltd....................... 22,700 1,911,017 Japan Tobacco, Inc.................... 560 3,076,307 JFE Holdings, Inc..................... 22,700 1,608,654 Komatsu, Ltd.......................... 58,500 1,965,873 Mitsui & Co., Ltd..................... 57,000 1,384,495 Mori Seiki Co., Ltd................... 29,000 749,837 Nintendo Co., Ltd..................... 2,500 1,301,528 Sumitomo Mitsui Financial Group, Inc.. 115 896,052 Tokyo Electric Power Co., Inc......... 38,600 974,535 Toyota Motor Corp..................... 40,600 2,396,448 ----------- 20,977,017 ----------- Malaysia -- 0.9% UMW Holdings Bhd...................... 291,800 1,207,448 ----------- Mexico -- 2.3% Axtel SAB de CV+...................... 249,400 1,909,709 Desarrolladora Homex SAB de CV ADR+... 20,900 1,159,950 ----------- 3,069,659 ----------- New Zealand -- 0.5% Nufarm, Ltd........................... 59,500 708,012 ----------- Norway -- 4.4% DNB NOR ASA........................... 97,700 1,498,686 Norsk Hydro ASA....................... 54,400 2,366,205 Petroleum Geo-Services ASA............ 65,400 1,886,334 ----------- 5,751,225 ----------- Russia -- 1.6% Mechel ADR............................ 41,100 2,096,100 ----------- Singapore -- 1.3% CapitaLand, Ltd....................... 172,000 943,655 Cosco Corp. Singapore, Ltd............ 192,700 771,838 ----------- 1,715,493 ----------- South Africa -- 1.7% Murray & Roberts Holdings, Ltd........ 62,400 813,909 Pretoria Portland Cement Co., Ltd..... 68,653 476,335 Tiger Brands, Ltd..................... 36,500 963,454 ----------- 2,253,698 ----------- South Korea -- 3.6% Daelim Industrial Co.................. 4,800 888,986 Hyundai Steel Co...................... 12,100 1,020,673 LG Electronics, Inc................... 12,700 1,186,462 Shinhan Financial Group Co., Ltd...... 24,400 1,594,318 ----------- 4,690,439 ----------- Sweden -- 0.8% Boliden AB............................ 46,200 983,993 -----------
55 SunAmerica International Equity Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Value Security Description Shares (Note 3) ---------------------------------------------------------- COMMON STOCK (continued) Switzerland -- 5.3% Nestle SA.......................... 5,800 $ 2,605,454 Nobel Biocare Holding AG........... 5,200 1,408,031 Syngenta AG........................ 5,700 1,228,860 Zurich Financial Services AG....... 5,800 1,739,875 ------------ 6,982,220 ------------ Taiwan -- 1.2% AU Optronics Corp. ADR............. 94,035 1,591,072 ------------ United Kingdom -- 9.9% Friends Provident PLC.............. 379,000 1,333,745 Inmarsat PLC....................... 197,740 1,839,808 Pennon Group PLC................... 95,300 1,183,551 Reckitt Benckiser PLC.............. 30,700 1,803,965 Rio Tinto PLC...................... 7,300 631,485 Royal Bank of Scotland Group PLC... 19,300 207,311 Smith & Nephew PLC................. 156,700 1,915,632 Vodafone Group PLC................. 859,800 3,104,898 Xstrata PLC........................ 13,900 922,573 ------------ 12,942,968 ------------ United States -- 0.0% SoftBrands, Inc.+.................. 40 76 ------------ Total Common Stock (cost $99,075,707)................ 122,256,291 ------------ PREFERRED STOCK -- 2.3% Brazil -- 0.7% NET Servicos de Comunicacao SA..... 53,700 880,645 ------------ Germany -- 1.6% Henkel KGaA........................ 42,300 2,176,865 ------------ Total Preferred Stock (cost $2,957,460)................. 3,057,510 ------------ EXCHANGE TRADED FUNDS -- 2.3% France -- 2.3% streetTRACKS MSCI Europe+ (cost $2,979,649)................. 14,500 3,004,055 ------------ Total Long-Term Investment Securities (cost $105,012,816)............... 128,317,856 ------------
Principal Value Security Description Amount (Note 3) ------------------------------------------------------------------------- REPURCHASE AGREEMENT -- 2.3% Agreement with State Street Bank & Trust Co., bearing interest at 2.50%, dated 09/28/07, to be repurchased 10/01/07 in the amount of $2,952,615 and collateralized by Federal Home Loan Mtg. Notes, bearing interest at 5.20% due 03/15/19 and having an approximate value of $3,013,712 (cost $2,952,000)............................ $2,952,000 $ 2,952,000 ------------ TOTAL INVESTMENTS -- (cost $107,964,816)(3)....................... 100.5% 131,269,856 Liabilities in excess of other assets........... (0.5) (673,767) ---------- ------------ NET ASSETS -- 100.0% $130,596,089 ========== ============
- -------- + Non-income producing security (1) Fair valued security. See Note 3 (2) Illiquid security (3) See Note 7 for cost of investments on a tax basis. ADR --American Depository Receipt See Notes to Financial Statements 56 SunAmerica Value Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Oil Companies-Integrated.............................................. 13.7% Finance-Investment Banker/Broker...................................... 12.1 Banks-Super Regional.................................................. 8.1 Telephone-Integrated.................................................. 6.5 Electric-Integrated................................................... 5.9 Repurchase Agreement.................................................. 5.8 Diversified Manufacturing Operations.................................. 3.9 Medical-Drugs......................................................... 3.9 Finance-Credit Card................................................... 2.8 Medical Products...................................................... 2.6 Banks-Fiduciary....................................................... 2.3 Aerospace/Defense-Equipment........................................... 2.2 Cosmetics & Toiletries................................................ 2.1 Food-Misc............................................................. 2.0 Insurance-Multi-line.................................................. 2.0 Electric Products-Misc................................................ 1.9 Insurance-Property/Casualty........................................... 1.9 Finance-Mortgage Loan/Banker.......................................... 1.8 Cable TV.............................................................. 1.7 Aerospace/Defense..................................................... 1.6 Non-Hazardous Waste Disposal.......................................... 1.6 Brewery............................................................... 1.5 Multimedia............................................................ 1.5 Retail-Apparel/Shoe................................................... 1.5 Retail-Drug Store..................................................... 1.5 Tobacco............................................................... 1.5 Retail-Regional Department Stores..................................... 1.4 Electronic Components-Semiconductors.................................. 1.2 Computers............................................................. 1.1 Paper & Related Products.............................................. 1.1 Applications Software................................................. 1.0 Metal-Aluminum........................................................ 0.9 ----- 100.6% =====
- -------- * Calculated as a percentage of net assets 57 SunAmerica Value Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) ---------------------------------------------------------------- COMMON STOCK -- 94.8% Aerospace/Defense -- 1.6% General Dynamics Corp..................... 41,900 $ 3,539,293 ----------- Aerospace/Defense-Equipment -- 2.2% United Technologies Corp.................. 62,800 5,054,144 ----------- Applications Software -- 1.0% Microsoft Corp............................ 75,200 2,215,392 ----------- Banks-Fiduciary -- 2.3% The Bank of New York Mellon Corp.......... 120,283 5,309,292 ----------- Banks-Super Regional -- 8.1% Bank of America Corp...................... 186,400 9,370,328 Wachovia Corp............................. 91,300 4,578,695 Wells Fargo & Co.......................... 125,000 4,452,500 ----------- 18,401,523 ----------- Brewery -- 1.5% Anheuser-Busch Cos., Inc.................. 69,500 3,474,305 ----------- Cable TV -- 1.7% Comcast Corp., Class A+................... 163,100 3,943,758 ----------- Computers -- 1.1% International Business Machines Corp...... 21,500 2,532,700 ----------- Cosmetics & Toiletries -- 2.1% Procter & Gamble Co....................... 65,900 4,635,406 ----------- Diversified Manufacturing Operations -- 3.9% General Electric Co....................... 212,000 8,776,800 ----------- Electric Products-Misc. -- 1.9% Emerson Electric Co....................... 81,200 4,321,464 ----------- Electric-Integrated -- 5.9% Duke Energy Corp.......................... 182,300 3,407,187 FPL Group, Inc............................ 55,600 3,384,928 Southern Co............................... 90,900 3,297,852 Xcel Energy, Inc.......................... 155,100 3,340,854 ----------- 13,430,821 ----------- Electronic Components-Semiconductors -- 1.2% Intel Corp................................ 106,500 2,754,090 ----------- Finance-Credit Card -- 2.8% American Express Co....................... 105,300 6,251,661 ----------- Finance-Investment Banker/Broker -- 12.1% Citigroup, Inc............................ 178,100 8,311,927 JPMorgan Chase & Co....................... 136,100 6,236,102 Merrill Lynch & Co., Inc.................. 74,700 5,324,616 Morgan Stanley............................ 69,400 4,372,200 TD Ameritrade Holding Corp.+.............. 173,900 3,168,458 ----------- 27,413,303 ----------- Finance-Mortgage Loan/Banker -- 1.8% Fannie Mae................................ 65,800 4,001,298 ----------- Food-Misc. -- 2.0% Kraft Foods, Inc., Class A................ 134,257 4,633,209 ----------- Insurance-Multi-line -- 2.0% MetLife, Inc.............................. 65,400 4,560,342 ----------- Insurance-Property/Casualty -- 1.9% Chubb Corp................................ 81,400 4,366,296 -----------
Shares/ Principal Value Security Description Amount (Note 3) -------------------------------------------------------------------- Medical Products -- 2.6% Johnson & Johnson...................... 91,000 $ 5,978,700 ------------ Medical-Drugs -- 3.9% Merck & Co., Inc....................... 63,600 3,287,484 Pfizer, Inc............................ 230,200 5,623,786 ------------ 8,911,270 ------------ Metal-Aluminum -- 0.9% Alcoa, Inc............................. 50,500 1,975,560 ------------ Multimedia -- 1.5% News Corp., Class A.................... 152,900 3,362,271 ------------ Non-Hazardous Waste Disposal -- 1.6% Waste Management, Inc.................. 96,600 3,645,684 ------------ Oil Companies-Integrated -- 13.7% Chevron Corp........................... 102,800 9,620,024 ConocoPhillips......................... 78,300 6,872,391 Exxon Mobil Corp....................... 99,000 9,163,440 Marathon Oil Corp...................... 94,400 5,382,688 ------------ 31,038,543 ------------ Paper & Related Products -- 1.1% International Paper Co................. 67,900 2,435,573 ------------ Retail-Apparel/Shoe -- 1.5% American Eagle Outfitters, Inc......... 131,400 3,457,134 ------------ Retail-Drug Store -- 1.5% CVS Caremark Corp...................... 85,800 3,400,254 ------------ Retail-Regional Department Stores -- 1.4% Kohl's Corp.+.......................... 55,700 3,193,281 ------------ Telephone-Integrated -- 6.5% AT&T, Inc.............................. 190,750 8,070,632 Verizon Communications, Inc............ 151,000 6,686,280 ------------ 14,756,912 ------------ Tobacco -- 1.5% Altria Group, Inc...................... 48,000 3,337,440 ------------ Total Long-Term Investment Securities (cost $193,672,220)................... 215,107,719 ------------ REPURCHASE AGREEMENT -- 5.8% State Street Bank & Trust Co. Joint Repurchase Agreement(1) (cost $13,190,000).................... $13,190,000 13,190,000 ------------ TOTAL INVESTMENTS -- (cost $206,862,220)(2)................ 100.6% 228,297,719 Liabilities in excess of other assets.... (0.6) (1,405,700) ----------- ------------ NET ASSETS -- 100.0% $226,892,019 =========== ============
- -------- + Non-income producing security (1) See Note 3 for details of Joint Repurchase Agreement. (2) See Note 7 for cost of investments on a tax basis. See Notes to Financial Statements 58 SunAmerica Disciplined Growth Fund@ PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Electronic Components-Semiconductors.................................. 8.0% Medical-Biomedical/Gene............................................... 7.4 Aerospace/Defense-Equipment........................................... 6.1 Computers............................................................. 5.7 Casino Hotels......................................................... 4.7 Food-Misc............................................................. 3.8 Metal Processors & Fabrication........................................ 3.7 Aerospace/Defense..................................................... 3.1 Data Processing/Management............................................ 3.1 Medical-Drugs......................................................... 2.8 Transport-Marine...................................................... 2.8 X-Ray Equipment....................................................... 2.7 Internet Security..................................................... 2.6 Engineering/R&D Services.............................................. 2.5 Electronic Measurement Instruments.................................... 2.4 Energy-Alternate Sources.............................................. 2.4 Oil Field Machinery & Equipment....................................... 2.3 Beverages-Non-alcoholic............................................... 2.1 Oil-Field Services.................................................... 2.1 Cosmetics & Toiletries................................................ 2.0 Oil Companies-Integrated.............................................. 2.0 Banks-Super Regional.................................................. 1.8 Diversified Manufacturing Operations.................................. 1.7 Tobacco............................................................... 1.6 Retail-Regional Department Stores..................................... 1.5 Diversified Minerals.................................................. 1.3 Metal-Diversified..................................................... 1.3 Diagnostic Kits....................................................... 1.2 Insurance-Multi-line.................................................. 1.2 Metal-Copper.......................................................... 1.1 Networking Products................................................... 1.0 Telephone-Integrated.................................................. 1.0 Web Portals/ISP....................................................... 1.0 Advanced Materials.................................................... 0.9 Computers-Integrated Systems.......................................... 0.9 Finance-Other Services................................................ 0.9 Multimedia............................................................ 0.9 Oil Refining & Marketing.............................................. 0.9 Optical Supplies...................................................... 0.9 Real Estate Investment Trusts......................................... 0.9 Repurchase Agreement.................................................. 0.9 Finance-Investment Banker/Broker...................................... 0.8 Finance-Mortgage Loan/Banker.......................................... 0.8 Specified Purpose Acquisitions........................................ 0.7 Web Hosting/Design.................................................... 0.5 Cable TV.............................................................. 0.4 Retail-Apparel/Shoe................................................... 0.3 Software Tools........................................................ 0.1 ----- 100.8% =====
- -------- * Calculated as a percentage of net assets @ See Note 1 59 SunAmerica Disciplined Growth Fund@ PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) --------------------------------------------------------------- COMMON STOCK -- 100.0% Advanced Materials -- 0.9% Hexcel Corp.+............................. 24,000 $ 545,040 ---------- Aerospace/Defense -- 3.1% Raytheon Co............................... 19,800 1,263,636 Rockwell Collins, Inc..................... 8,600 628,144 ---------- 1,891,780 ---------- Aerospace/Defense-Equipment -- 6.1% Alliant Techsystems, Inc.+................ 20,600 2,251,580 BE Aerospace, Inc.+....................... 18,000 747,540 Triumph Group, Inc........................ 8,100 661,851 ---------- 3,660,971 ---------- Banks-Super Regional -- 1.8% Bank of America Corp...................... 22,000 1,105,940 ---------- Beverages-Non-alcoholic -- 2.1% PepsiCo, Inc.............................. 17,000 1,245,420 ---------- Cable TV -- 0.4% Comcast Corp., Class A+................... 10,700 258,726 ---------- Casino Hotels -- 4.7% Las Vegas Sands Corp.+.................... 11,200 1,494,304 MGM Mirage, Inc.+......................... 10,000 894,400 Wynn Resorts, Ltd......................... 2,900 456,924 ---------- 2,845,628 ---------- Computers -- 5.7% Apple, Inc.+.............................. 9,300 1,427,922 Hewlett-Packard Co........................ 25,000 1,244,750 International Business Machines Corp...... 6,300 742,140 ---------- 3,414,812 ---------- Computers-Integrated Systems -- 0.9% Riverbed Technology, Inc.+................ 13,000 525,070 ---------- Cosmetics & Toiletries -- 2.0% Procter & Gamble Co....................... 16,800 1,181,712 ---------- Data Processing/Management -- 3.1% NAVTEQ Corp.+............................. 24,000 1,871,280 ---------- Diagnostic Kits -- 1.2% Inverness Medical Innovations, Inc.+...... 13,000 719,160 ---------- Diversified Manufacturing Operations -- 1.7% Roper Industries, Inc..................... 15,500 1,015,250 ---------- Diversified Minerals -- 1.3% Cia Vale do Rio Doce ADR.................. 24,000 814,320 ---------- Electronic Components-Semiconductors -- 8.0% Advanced Analogic Technologies, Inc.+..... 146,500 1,558,760 Intel Corp................................ 28,000 724,080 Microsemi Corp.+.......................... 24,000 669,120 ON Semiconductor Corp.+................... 98,000 1,230,880 SiRF Technology Holdings, Inc.+........... 30,000 640,500 ---------- 4,823,340 ---------- Electronic Measurement Instruments -- 2.4% Garmin, Ltd............................... 12,100 1,444,740 ----------
Value Security Description Shares (Note 3) ---------------------------------------------------------- Energy-Alternate Sources -- 2.4% Sunpower Corp., Class A+.............. 17,400 $1,441,068 ---------- Engineering/R&D Services -- 2.5% ABB, Ltd. ADR......................... 28,500 747,555 Fluor Corp............................ 5,200 748,696 ---------- 1,496,251 ---------- Finance-Investment Banker/Broker -- 0.8% Merrill Lynch & Co., Inc.............. 6,900 491,832 ---------- Finance-Mortgage Loan/Banker -- 0.8% Fannie Mae............................ 8,300 504,723 ---------- Finance-Other Services -- 0.9% NYMEX Holdings, Inc................... 4,400 572,792 ---------- Food-Misc. -- 3.8% Kellogg Co............................ 19,900 1,114,400 Kraft Foods, Inc., Class A............ 34,000 1,173,340 ---------- 2,287,740 ---------- Insurance-Multi-line -- 1.2% MetLife, Inc.......................... 10,000 697,300 ---------- Internet Security -- 2.6% Blue Coat Systems, Inc.+.............. 19,800 1,559,448 ---------- Medical-Biomedical/Gene -- 7.4% Genzyme Corp.+........................ 9,300 576,228 Medivation, Inc.+..................... 30,000 601,500 Omrix Biopharmaceuticals, Inc.+....... 57,100 2,016,201 Sangamo Biosciences, Inc.+............ 90,000 1,269,900 ---------- 4,463,829 ---------- Medical-Drugs -- 2.8% Acadia Pharmaceuticals, Inc.+......... 35,000 526,750 Elan Corp. PLC ADR+................... 22,000 462,880 Gentium SpA ADR+...................... 6,000 137,820 Novartis AG ADR....................... 10,200 560,592 ---------- 1,688,042 ---------- Metal Processors & Fabrication -- 3.7% Dynamic Materials Corp................ 16,000 766,240 Precision Castparts Corp.............. 9,900 1,465,002 ---------- 2,231,242 ---------- Metal-Copper -- 1.1% Southern Copper Corp.................. 5,300 656,299 ---------- Metal-Diversified -- 1.3% Freeport-McMoRan Copper & Gold, Inc... 7,400 776,186 ---------- Multimedia -- 0.9% News Corp., Class A................... 25,000 549,750 ---------- Networking Products -- 1.0% Atheros Communications, Inc.+......... 20,000 599,400 ---------- Oil Companies-Integrated -- 2.0% Exxon Mobil Corp...................... 12,800 1,184,768 ---------- Oil Field Machinery & Equipment -- 2.3% National-Oilwell Varco, Inc.+......... 9,600 1,387,200 ----------
60 SunAmerica Disciplined Growth Fund@ PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/ Principal Value Security Description Amount (Note 3) -------------------------------------------------------------- COMMON STOCK (continued) Oil Refining & Marketing -- 0.9% Valero Energy Corp..................... 7,900 $ 530,722 ----------- Oil-Field Services -- 2.1% Schlumberger, Ltd...................... 12,000 1,260,000 ----------- Optical Supplies -- 0.9% Alcon, Inc............................. 4,000 575,680 ----------- Real Estate Investment Trusts -- 0.9% Annaly Mortgage Management, Inc........ 36,000 573,480 ----------- Retail-Apparel/Shoe -- 0.3% J Crew Group, Inc.+.................... 5,000 207,500 ----------- Retail-Regional Department Stores -- 1.5% Kohl's Corp.+.......................... 16,000 917,280 ----------- Software Tools -- 0.1% VMware, Inc. Class A+.................. 900 76,500 ----------- Specified Purpose Acquisitions -- 0.7% Star Maritime Acquisition Corp.+....... 30,000 420,300 ----------- Telephone-Integrated -- 1.0% AT&T, Inc.............................. 15,000 634,650 ----------- Tobacco -- 1.6% Altria Group, Inc...................... 14,000 973,420 ----------- Transport-Marine -- 2.8% DryShips, Inc.......................... 18,600 1,689,810 ----------- Web Hosting/Design -- 0.5% NIC, Inc............................... 40,000 277,600 ----------- Web Portals/ISP -- 1.0% Google, Inc., Class A+................. 1,100 623,997 ----------- X-Ray Equipment -- 2.7% Hologic, Inc.+......................... 27,000 1,647,000 ----------- Total Long-Term Investment Securities (cost $51,665,904)................... 60,358,998 ----------- REPURCHASE AGREEMENT -- 0.9% State Street Bank & Trust Co,. Joint Repurchase Agreement(1) (cost $522,000)............................ $522,000 522,000 ----------- TOTAL INVESTMENTS -- (cost $52,187,904)(2)................ 100.8% 60,880,998 Liabilities in excess of other assets... (0.8) (504,054) -------- ----------- NET ASSETS -- 100.0% $60,376,944 ======== ===========
- -------- @ See Note 1 + Non-income producing security (1) See Note 3 for details of Joint Repurchase Agreement. (2) See Note 7 for cost of investments on a tax basis. ADR --American Depository Receipt See Notes to Financial Statements 61 SunAmerica International Small-Cap Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) Industry Allocation* Building & Construction Products-Misc................................. 5.5% Time Deposits......................................................... 3.4 Diversified Manufacturing Operations.................................. 3.3 Finance-Other Services................................................ 2.9 Auto/Truck Parts & Equipment-Original................................. 2.7 Machinery-General Industrial.......................................... 2.5 Computers-Integrated Systems.......................................... 2.4 Distribution/Wholesale................................................ 2.3 Miscellaneous Manufacturing........................................... 2.3 Apparel Manufacturers................................................. 2.1 Electronic Components-Misc............................................ 2.1 Machinery-Electrical.................................................. 1.9 Machinery-Material Handling........................................... 1.9 Rubber-Tires.......................................................... 1.9 Medical-Biomedical/Gene............................................... 1.8 Medical-Drugs......................................................... 1.8 Banks-Commercial...................................................... 1.6 Chemicals-Specialty................................................... 1.5 Agricultural Chemicals................................................ 1.4 Machinery-Construction & Mining....................................... 1.4 Rental Auto/Equipment................................................. 1.4 Retail-Apparel/Shoe................................................... 1.4 Retail-Misc./Diversified.............................................. 1.4 Chemicals-Diversified................................................. 1.3 Gambling (Non-Hotel).................................................. 1.3 Engineering/R&D Services.............................................. 1.2 Investment Management/Advisor Services................................ 1.2 Retail-Consumer Electronics........................................... 1.2 Brewery............................................................... 1.1 Building & Construction-Misc.......................................... 1.1 Oil Refining & Marketing.............................................. 1.1 Computers............................................................. 1.0 Office Automation & Equipment......................................... 1.0 Applications Software................................................. 0.9 Audio/Video Products.................................................. 0.9 Electric-Integrated................................................... 0.9 Electronic Components-Semiconductors.................................. 0.9 Energy-Alternate Sources.............................................. 0.9 Industrial Audio & Video Products..................................... 0.9 Oil Field Machinery & Equipment....................................... 0.9 Retail-Discount....................................................... 0.9 Retail-Restaurants.................................................... 0.9 Water................................................................. 0.9 Coatings/Paint........................................................ 0.8 Direct Marketing...................................................... 0.8 E-Commerce/Services................................................... 0.8 Enterprise Software/Service........................................... 0.8 Finance-Investment Banker/Broker...................................... 0.8 Footwear & Related Apparel............................................ 0.8 Medical Products...................................................... 0.8 Environmental Monitoring & Detection.................................. 0.7 Networking Products................................................... 0.7 Appliances............................................................ 0.6 Auto-Cars/Light Trucks................................................ 0.6 Fisheries............................................................. 0.6 Hotels/Motels......................................................... 0.6 Medical Imaging Systems............................................... 0.6 Medical Instruments................................................... 0.6 Medical-Hospitals..................................................... 0.6 Real Estate Operations & Development.................................. 0.6
Resorts/Theme Parks................................................... 0.6% Retail-Automobile..................................................... 0.6 Veterinary Products................................................... 0.6 Beverages-Non-alcoholic............................................... 0.5 Electric-Generation................................................... 0.5 Electronics-Military.................................................. 0.5 Entertainment Software................................................ 0.5 Environmental Consulting & Engineering................................ 0.5 Shipbuilding.......................................................... 0.5 Travel Services....................................................... 0.5 Web Portals/ISP....................................................... 0.5 Beverages-Wine/Spirits................................................ 0.4 Building-Maintance & Services......................................... 0.4 Commerce.............................................................. 0.4 Consulting Services................................................... 0.4 Motion Pictures & Services............................................ 0.4 Retail-Sporting Goods................................................. 0.4 Telecommunication Equipment........................................... 0.4 Textile-Products...................................................... 0.4 Transport-Marine...................................................... 0.4 Transport-Truck....................................................... 0.4 Warehousing & Harbor Transportation Services.......................... 0.4 Decision Support Software............................................. 0.3 Finance-Leasing Companies............................................. 0.3 Internet Content-Information/News..................................... 0.3 Machinery-Print Trade................................................. 0.3 Medical-Wholesale Drug Distribution................................... 0.3 Metal Processors & Fabrication........................................ 0.3 Oil-Field Services.................................................... 0.3 Protection/Safety..................................................... 0.3 Retail-Regional Department Stores..................................... 0.3 Advertising Sales..................................................... 0.2 Cellular Telecom...................................................... 0.2 Computers-Periphery Equipment......................................... 0.2 E-Services/Consulting................................................. 0.2 Electronic Connectors................................................. 0.2 Electronic Parts Distribution......................................... 0.2 Food-Misc............................................................. 0.2 Human Resources....................................................... 0.2 Internet Content-Entertainment........................................ 0.2 Printing-Commercial................................................... 0.2 Retail-Drug Store..................................................... 0.2 Textile-Apparel....................................................... 0.2 Batteries/Battery Systems............................................. 0.1 Coal.................................................................. 0.1 Cosmetics & Toiletries................................................ 0.1 Schools............................................................... 0.1 Television............................................................ 0.1 ---- 99.0% ====
- -------- * Calculated as a percentage of net assets 62 SunAmerica International Small-Cap Fund PORTFOLIO PROFILE -- September 30, 2007 -- (unaudited) (continued) Country Allocation* Japan........................................................................... 28.2% Germany......................................................................... 12.6 Denmark......................................................................... 5.6 United Kingdom.................................................................. 5.6 Sweden.......................................................................... 5.2 France.......................................................................... 5.0 Finland......................................................................... 4.5 Switzerland..................................................................... 3.5 United States................................................................... 3.4 Australia....................................................................... 2.7 China........................................................................... 2.5 Cayman Islands.................................................................. 2.2 South Korea..................................................................... 2.2 Greece.......................................................................... 1.8 Singapore....................................................................... 1.8 Taiwan.......................................................................... 1.7 Italy........................................................................... 1.6 Bermuda......................................................................... 1.4 Austria......................................................................... 1.2 Ireland......................................................................... 1.2 Netherlands..................................................................... 1.1 Belgium......................................................................... 0.9 Norway.......................................................................... 0.9 Malaysia........................................................................ 0.8 Spain........................................................................... 0.6 Philippines..................................................................... 0.4 Indonesia....................................................................... 0.3 Thailand........................................................................ 0.1 ---- 99.0% ====
- -------- * Calculated as a percentage of net assets 63 SunAmerica International Small-Cap Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007
Value Security Description Shares (Note 3) ------------------------------------------------------------------------- COMMON STOCK -- 92.6% Australia -- 2.7% Bradken, Ltd....................................... 26,826 $ 252,799 IBT Education, Ltd................................. 29,128 51,564 JB Hi-Fi, Ltd...................................... 36,632 468,403 MacArthur Coal, Ltd................................ 5,782 34,888 Tassal Group, Ltd.................................. 73,726 222,431 ---------- 1,030,085 ---------- Austria -- 1.2% Andritz AG......................................... 6,450 445,613 ---------- Belgium -- 0.9% EVS Broadcast Equipment SA......................... 3,265 326,366 ---------- Bermuda -- 1.4% Global Sources, Ltd.+.............................. 6,300 139,671 IT, Ltd............................................ 682,000 156,159 Sino Techfibre, Ltd................................ 172,000 160,943 TPV Technology, Ltd................................ 90,000 64,601 ---------- 521,374 ---------- Cayman Islands -- 2.2% AAC Acoustic Technologies Holdings, Inc.+.......... 90,000 111,026 Anta Sports Products, Ltd.+........................ 134,000 145,827 Hans Energy Co., Ltd.+............................. 1,208,000 108,775 Shenzhou International Group Holdings, Ltd......... 153,000 72,428 SINA Corp.+........................................ 4,000 191,400 The9 Ltd. ADR+..................................... 5,600 193,144 ---------- 822,600 ---------- China -- 2.5% China BlueChemical, Ltd............................ 808,000 534,242 Shanghai Jin Jiang International Hotels Group Co., Ltd............................................... 428,000 210,866 Travelsky Technology, Ltd.......................... 177,000 189,663 ---------- 934,771 ---------- Denmark -- 5.6% Bang & Olufsen A/S, Class B........................ 3,105 350,418 FLSmidth & Co. A/S................................. 7,124 757,655 Genmab A/S+........................................ 3,579 222,494 NKT Holding A/S.................................... 3,195 358,130 Royal UNIBREW A/S.................................. 3,020 392,815 ---------- 2,081,512 ---------- Finland -- 4.5% KCI Konecranes Oyj................................. 9,581 385,406 Lassila & Tikanoja Oyj............................. 6,117 197,391 Nokian Renkaat Oyj................................. 13,140 514,517 Oriola-KD Oyj...................................... 11,785 55,456 Ramirent Oyj....................................... 24,142 522,920 ---------- 1,675,690 ---------- France -- 5.0% Guerbet............................................ 1,057 235,309 IMS International Metal Service SA................. 4,489 188,192 Ingenico SA........................................ 8,236 239,110 Laurent-Perrier.................................... 943 154,637 Neopost SA......................................... 2,657 374,783 Sechilienne SA..................................... 4,256 336,821
Value Security Description Shares (Note 3) -------------------------------------------------------------------- France (continued) Teleperformance.................................. 2,163 $ 84,295 Velcan Energy+................................... 795 44,325 Virbac SA........................................ 2,320 205,406 ---------- 1,862,878 ---------- Germany -- 9.6% AWD Holding AG................................... 11,320 378,201 Bauer AG......................................... 3,447 225,610 ElringKlinger AG................................. 4,347 492,789 Fielmann AG...................................... 7,587 505,990 Kloeckner & Co. AG............................... 9,647 666,760 Pfleiderer AG.................................... 3,689 85,480 Rational AG...................................... 1,063 204,510 Software AG...................................... 3,273 307,284 Symrise AG+...................................... 14,528 385,321 Wincor Nixdorf AG................................ 3,960 327,512 ---------- 3,579,457 ---------- Greece -- 1.8% Athens Stock Exchange SA......................... 20,748 665,676 ---------- Indonesia -- 0.3% PT United Tractors............................... 124,000 111,186 ---------- Ireland -- 1.2% Kingspan Group PLC (Ireland)..................... 15,549 341,450 Norkom Group PLC+................................ 36,550 92,250 ---------- 433,700 ---------- Italy -- 1.6% ASM SpA.......................................... 46,680 288,552 Digital Multimedia Technologies SpA+............. 2,190 143,057 Piccolo Credito Valtellinese Scarl............... 617 8,781 Tod's SpA........................................ 1,890 158,711 ---------- 599,101 ---------- Japan -- 28.2% Amano Corp....................................... 7,400 89,484 Asahi Soft Drinks Co, Ltd........................ 12,500 188,264 Chugoku Marine Paints, Ltd....................... 22,000 285,187 Daiichi Chuo Kisen Kaisha........................ 12,000 116,902 Dena Co., Ltd.................................... 44 194,211 Digital Garage, Inc.+............................ 64 64,075 Disco Corp....................................... 2,700 150,673 Don Quijote Co, Ltd.............................. 17,000 351,500 en-japan, Inc.................................... 29 118,409 EPS Co., Ltd..................................... 32 104,192 Exedy Corp....................................... 8,600 268,036 Fujimi, Inc...................................... 5,800 119,166 Glory, Ltd....................................... 2,400 76,263 Harmonic Drive Systems, Inc...................... 17 76,960 HIS Co., Ltd..................................... 9,600 180,525 Hisamitsu Pharmaceutical Co., Inc................ 5,900 160,258 Hitachi Systems & Services, Ltd.................. 6,300 123,406 Imagineer Co., Ltd............................... 3,000 60,854 Intelligence, Ltd................................ 39 58,739 Iriso Electronics Co., Ltd....................... 2,900 70,692 Japan Aviation Electronics Industry, Ltd......... 13,000 203,604
64 SunAmerica International Small-Cap Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Value Security Description Shares (Note 3) -------------------------------------------------------------------- COMMON STOCK (continued) Japan (continued) Japan Steel Works, Ltd........................... 19,000 $ 315,440 Kaga Electronics Co., Ltd........................ 4,300 66,635 Kakaku.com, Inc.................................. 50 127,976 Kenedix, Inc..................................... 49 85,318 Kitz Corp........................................ 12,000 109,067 Koito Manufacturing Co., Ltd..................... 12,000 146,363 Kyoritsu Maintenance Co., Ltd.................... 7,800 141,584 La Parler Co., Ltd............................... 67 47,072 Land Business Co., Ltd........................... 11 8,715 Lintec Corp...................................... 8,600 168,833 Mani, Inc........................................ 1,500 71,170 MCJ Co., Ltd..................................... 58 20,627 Miraca Holdings, Inc............................. 5,100 115,662 Miraial Co., Ltd................................. 2,000 99,769 Mitsubishi UFJ Lease & Finance Co., Ltd.......... 3,380 112,112 Modec, Inc....................................... 7,800 282,488 Moshi Moshi Hotline, Inc......................... 5,950 292,152 Nabtesco Corp.................................... 20,000 326,296 Nichias Corp..................................... 24,000 245,088 Nihon Dempa Kogyo Co., Ltd....................... 3,100 193,236 Nishimatsuya Chain Co., Ltd...................... 12,000 152,213 Nissha Printing Co, Ltd.......................... 2,600 75,602 NPC, Inc......................................... 1,600 42,485 Obic Co, Ltd..................................... 1,130 219,182 Okasan Holdings, Inc............................. 22,000 127,750 Otsuka Corp...................................... 2,900 284,534 Resort Solution Co., Ltd......................... 2,000 8,114 ResortTrust, Inc................................. 11,100 236,273 Rohto Pharmaceutical Co., Ltd.................... 10,000 117,529 Saint Marc Holdings Co., Ltd..................... 2,300 88,504 Sankyu, Inc...................................... 29,000 166,883 Sasebo Heavy Industries Co., Ltd................. 29,000 198,442 Sato Corp........................................ 5,900 110,177 Secom Techno Service Co., Ltd.................... 3,000 97,158 Star Micronics Co., Ltd.......................... 12,200 378,113 Sugi Pharmacy Co., Ltd........................... 2,500 60,941 Sumco Techxiv Corp............................... 800 45,479 Sysmex Corp...................................... 5,900 227,545 Taiyo Ink Manufacturing Co., Ltd................. 5,100 147,408 Takeei Corp...................................... 200 10,813 Teikoku Piston Ring Co., Ltd..................... 12,200 109,929 Telepark Corp.................................... 58 62,108 The Kagoshima Bank, Ltd.......................... 12,000 85,666 Toho Pharmaceutical Co., Ltd..................... 6,500 111,762 Toshiba Machine Co., Ltd......................... 12,000 89,427 Toyo Tanso Co., Ltd.............................. 3,150 317,838 Tsumura & Co..................................... 6,700 119,283 Unicharm Petcare Corp............................ 2,000 88,974 Union Tool Co.................................... 3,900 168,406 USS Co, Ltd...................................... 3,290 216,249 Works Applications Co., Ltd...................... 157 136,272 Xebio Co., Ltd................................... 5,600 136,508 Yamaguchi Financial Group, Inc................... 6,000 62,682 ----------- 10,537,252 -----------
Value Security Description Shares (Note 3) ---------------------------------------------------------------- Malaysia -- 0.8% Muhibbah Engineering Bhd.................... 47,300 $ 127,706 Sarawak Energy Bhd.......................... 241,800 166,759 ---------- 294,465 ---------- Netherlands -- 1.1% Aalberts Industries NV...................... 18,184 433,541 ---------- Norway -- 0.9% Sevan Marine ASA+........................... 31,715 330,901 ---------- Philippines -- 0.4% Chemrez Technologies, Inc................... 107,000 9,857 International Container Term Services, Inc.. 185,600 150,375 ---------- 160,232 ---------- Singapore -- 1.8% Ho Bee Investment, Ltd...................... 154,000 225,998 Inter-Roller Engineering, Ltd............... 166,000 93,867 Raffles Medical Group, Ltd.................. 206,800 210,211 United Test and Assembly Center, Ltd.+...... 185,000 146,954 ---------- 677,030 ---------- South Korea -- 2.2% CJ Internet Corp............................ 5,940 147,007 Hyundai DSF Co., Ltd........................ 6,970 119,568 Jinsung T.E.C............................... 9,548 129,887 JVM Co., Ltd................................ 2,683 158,013 Nexen Tire Corp............................. 3,550 172,807 STX Pan Ocean Co., Ltd.+.................... 13,230 35,634 The Basic House Co., Ltd.................... 8,420 72,129 ---------- 835,045 ---------- Spain -- 0.6% Mecalux SA+................................. 4,848 219,903 ---------- Sweden -- 5.2% Intrum Justitia AB.......................... 25,863 402,347 JM AB....................................... 14,516 350,280 Lindab International AB..................... 17,889 488,581 Munters AB.................................. 19,140 276,225 RaySearch Laboratories AB+.................. 6,530 204,692 RNB Retail and Brands AB.................... 18,951 236,737 ---------- 1,958,862 ---------- Switzerland -- 3.5% Banque Cantonale Vaudoise................... 347 155,729 Basilea Pharmaceutica AG+................... 1,433 326,787 Compagne Financiere Tradition............... 1,025 198,969 Gurit Holding AG............................ 198 209,352 Speedel Holding AG+......................... 826 108,407 Vontobel Holding AG......................... 5,993 307,050 ---------- 1,306,294 ---------- Taiwan -- 1.7% CyberTAN Technology, Inc.................... 70,720 251,372 Everlight Electronics Co., Ltd.............. 37,077 161,896 Sanyang Industrial Co., Ltd................. 302,000 237,361 ---------- 650,629 ----------
65 SunAmerica International Small-Cap Fund PORTFOLIO OF INVESTMENTS -- September 30, 2007 -- (continued)
Shares/ Principal Value Security Description Amount (Note 3) ------------------------------------------------------------- COMMON STOCK (continued) Thailand -- 0.1% BEC World PCL....................... 29,400 $ 19,900 ----------- United Kingdom -- 5.6% Cookson Group PLC................... 29,156 455,153 Detica Group PLC.................... 22,998 146,338 IG Group Holdings PLC............... 62,265 482,505 Luminar PLC......................... 19,696 242,191 Northumbrian Water Group PLC........ 47,897 333,925 Tanfield Group PLC+................. 119,638 423,468 ----------- 2,083,580 ----------- Total Common Stock (cost $30,337,632)................. 34,597,643 ----------- PREFERRED STOCK -- 3.0% Germany -- 3.0% Fuchs Petrolub AG................... 4,574 422,122 Hugo Boss AG 7.49%.............................. 10,303 698,878 ----------- Total Preferred Stock (cost $896,797).................... 1,121,000 ----------- Total Long-Term Investment Securities (cost $31,234,429)................. 35,718,643 ----------- SHORT-TERM INVESTMENT SECURITIES -- 3.4% Time Deposits -- 3.4% Euro Time Deposit with State Street Bank & Trust Co. 2.40% due 10/01/07 (cost $1,284,000).................. $1,284,000 1,284,000 ----------- TOTAL INVESTMENTS -- (cost $32,518,429)(1).............. 99.0% 37,002,643 Other assets less liabilities......... 1.0 380,331 ---------- ----------- NET ASSETS -- 100.0% $37,382,974 ========== ===========
- -------- + Non-income producing security (1) See Note 7 for cost of investments on a tax basis. ADR --American Depository Receipt See Notes to Financial Statements 66 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 Note 1. Organization SunAmerica Equity Funds is registered under the Investment Company Act of 1940, as amended, (the "1940 Act") as an open-end management investment company and was organized as a Massachusetts business trust (the "Trust" or "Equity Funds") on June 16, 1986. It currently consists of nine different funds (each, a "Fund" and collectively, the "Funds"). Each Fund is a separate series of the Trust with a distinct objective and/or strategy. Each Fund is advised and/or managed by AIG SunAmerica Asset Management Corp. (the "Adviser" or "AIG 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 Blue Chip Growth Fund ("Blue Chip Growth Fund"), SunAmerica Growth Opportunities Fund ("Growth Opportunities Fund"), SunAmerica New Century Fund ("New Century Fund"), SunAmerica Growth and Income Fund ("Growth and Income Fund"), SunAmerica Balanced Assets Fund ("Balanced Assets Fund"), SunAmerica International Equity Fund ("International Equity Fund"), SunAmerica Value Fund ("Value Fund"), SunAmerica Disciplined Growth Fund ("Disciplined Growth Fund") and SunAmerica International Small-Cap Fund ("International Small-Cap Fund"). The Funds are considered to be separate entities for financial and tax reporting purposes. On May 15, 2007, the name of the SunAmerica Tax Managed Equity Fund was changed to the SunAmerica Disciplined Growth Fund. The investment objective and principal investment techniques for each of the Funds is as follows: Blue Chip Growth Fund seeks capital appreciation, by primarily investing in equity securities of Blue Chip companies that demonstrate the potential for capital appreciation. At least 80% of the Fund's net assets plus any borrowing for investment purposes will be invested in such securities. Growth Opportunities Fund seeks capital appreciation by primarily investing in equity securities that demonstrate the potential for capital appreciation, issued generally by small-cap companies. New Century Fund seeks capital appreciation by investing in equity securities that demonstrate the potential for capital appreciation, without regard to market capitalization. Growth and Income Fund seeks capital appreciation and current income by investing in equity securities issued by companies of any size, that pay dividends, demonstrate the potential for capital appreciation and/or are believed to be undervalued in the market. Balanced Assets Fund seeks capital appreciation and conservation of principal through active trading partly in equity securities that demonstrate the potential for capital appreciation issued by companies with market capitalization of over $1.5 billion and partly in investment-grade fixed income securities. International Equity Fund seeks capital appreciation by investing in equity securities and other securities with equity characteristics of non-U.S. issuers located in a number of different countries other than the U.S. and selected without regard to market capitalization. At least 80% of the Fund's net assets plus any borrowing for investment purposes will be invested in such securities. Value Fund seeks long-term growth of capital through active trading of equity securities selected on the basis of value criteria, issued by companies of any market capitalization. Disciplined Growth Fund seeks capital appreciation by investing in equity securities that demonstrate the potential for capital appreciation, without regard to market capitalization. International Small-Cap Fund seeks long-term capital appreciation by investing in equity and equity-related securities of small-capitalization companies throughout the world including emerging market countries, excluding the U.S. Under normal circumstances, at least 80% of the Fund's net assets, plus any borrowings for investment purposes will be invested in such securities. The Blue Chip Growth Fund, Growth Opportunities Fund, New Century Fund, Growth and Income Fund, Balanced Assets Fund, Disciplined Growth Fund and International Small-Cap Fund are organized as "diversified" funds within the meaning of the 1940 Act. The International Equity Fund and Value Fund are organized as "non-diversified" funds. 67 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) Each Fund offers multiple classes of shares. The classes within each Fund are presented in the Statement of Assets and Liabilities. The cost structure for each class is as follows: Class A shares are offered at net asset value per share plus an initial sales charge. Additionally, purchases of Class A shares in excess of $1,000,000 will be purchased at net asset value but will be subject to a contingent deferred sales charge on redemptions made within two years of purchase. With respect to Class A shares of the International Equity Fund and International Small-Cap Fund, a redemption fee of 2% will be assessed on the proceeds of any redemption of shares that were purchased within ninety (90) days prior to the date of such redemption. An exchange fee of 2% will be assessed on the amount of any exchange of Class A shares of the International Equity Fund and International Small-Cap Fund that were purchased within ninety (90) days prior to the date of such exchange. Class B shares are offered without an initial sales charge, although a declining contingent sales charge may be imposed on redemptions made within six years of purchase. Class B shares of each Fund convert automatically to Class A shares approximately eight years after purchase of such Class B shares and at such time will be subject to the lower distribution fee applicable to Class A shares. Class C shares are offered at net asset value per share without an initial sales charge, although may be subject to a contingent deferred sales charge on redemptions made within 12 months of purchase. Certain Class C shares of particular Funds issued in connection with particular reorganizations or mergers will convert automatically to Class A shares approximately ten years after purchase and at such time will be subject to the lower distribution fee applicable to Class A shares. Class I and Class Z shares are offered at net asset value per share. These classes are offered exclusively to participants in certain employee benefit plans and other programs. Each class of shares bears the same voting, dividend, liquidation and other rights and conditions, except as may otherwise be provided in the Trust's registration statement. Class A, Class B and Class C shares each make distribution and account maintenance fee payments under the distribution plans pursuant to Rule 12b-1 under the 1940 Act, except that Class B and Class C shares are subject to higher distribution fee rates. Class I shares and Class Z shares have not adopted 12b-1 plans and make no payments thereunder, however, Class I shares pay a service fee to the Funds' distributor for providing administrative and shareholder services. Indemnifications: Under the Trust's organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. 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. Fund Merger Pursuant to a plan of reorganization, all the assets and liabilities of SunAmerica Biotech/Health Fund ("Biotech/Health Fund") were transferred in a tax-free exchange to the New Century Fund, in exchange for shares of New Century Fund. The details of the reorganization, which was consummated on March 19, 2007, are set forth below. Class A, Class B, and Class C shares of Biotech/Health Fund were exchanged tax-free for Class A, Class B, and Class C shares of New Century Fund, respectively. Net assets and unrealized appreciation (depreciation) as of the merger date were as follows: Net assets of the Biotech/Health Fund prior to merger............. $ 21,294,588 Net assets of the New Century Fund prior to merger................ $ 88,216,005 ------------ Aggregate net assets of the New Century Fund following acquisition $109,510,593 ------------ Unrealized appreciation (depreciation) in the Biotech/Health Fund. $ 397,826
68 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) Note 3. Significant Accounting Policies The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates. The following is a summary of the significant accounting policies followed by the Trust in the preparation of their financial statements: Security Valuations: Stocks are generally valued based upon closing sales prices reported on recognized securities exchanges. 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, a portfolio uses the exchange that is the primary market for the security. 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 the Fund may determine that certain closing prices are unreliable. This determination will be based on review of a number of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. If a Fund determines that closing prices do not reflect the fair value of the securities, the Fund will adjust the previous closing prices in accordance with pricing procedures approved by the Board of Trustees (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, the Funds use an outside pricing service to provide it with closing market prices and information used for adjusting those prices. Non-convertible bonds and debentures, other long-term debt securities, and short term debt securities with maturities in excess of 60 days, are valued at bid prices obtained for the day of valuation from a bond pricing service, when such prices are available. If a vendor quote is unavailable the securities may be priced at the mean of two independent quotes obtained from brokers. Securities for which market quotations are not readily available are valued as determined pursuant to procedures adopted in good faith by the Board. Short-term securities with 60 days or less to maturity are amortized to maturity based on their cost to the Fund if acquired within 60 days of maturity or, if already held by the Fund on the 60th day, are amortized to maturity based on the value determined on the 61st day. Securities for which market quotations are not readily available or where a development/significant event occurs that may significantly impact the value of the security, are fair valued, as determined pursuant to procedures adopted in good faith by the Board. New Accounting Pronouncements: On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. However, Registered Investment Companies are not required to implement FIN 48 until their last net asset value calculation in the first required financial statement reporting period for fiscal years beginning after December 15, 2006. At this time, management does not anticipate the adoption of FIN 48 to have a material impact on the financial statements. In September 2006, the FASB issued Statement on Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value 69 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) and requires additional disclosures about the use of fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. As of September 30, 2007, the Funds do not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value. Repurchase Agreements: The Funds, along with other affiliated registered investment companies, pursuant to exemptive relief granted by the Securities and Exchange Commission ("SEC"), may transfer uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by U.S. Treasury or federal agency obligations. For repurchase agreements and joint repurchase agreements, the Funds' custodian takes possession of the collateral pledged for investments in repurchase agreements ("repo" or collectively "repos"). The underlying collateral is valued daily on a mark to market basis 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 the Fund may be delayed or limited. As of September 30, 2007, the following Funds held an undivided interest in a joint repurchase agreement with State Street Bank & Trust Co.:
Percentage Principal Fund Interest Amount - ---- ---------- ----------- Blue Chip Growth.... 0.55% $ 1,123,000 Growth Opportunities 4.97 10,150,000 New Century......... 6.62 13,531,000 Growth & Income..... 1.86 3,800,000 Balanced Assets..... 1.77 3,623,000 Value............... 6.45 13,190,000 Disciplined Growth.. 0.26 522,000
As of such date, the repurchase agreement in that joint account and the collateral therefore were as follows: State Street Bank & Trust Co., dated September 28, 2007, bearing interest at a rate of 3.70% per annum, with a principal amount of $204,370,000, a repurchase price of $204,433,014 and a maturity date of October 1, 2007. The repurchase agreement is collateralized by the following:
Maturity Principal Type of Collateral Interest Rate Date Amount Market Value - ------------------ ------------- -------- ------------ ------------ U.S. Treasury Bonds 6.25% 08/15/23 $ 75,100,000 $ 86,834,375 U.S. Treasury Notes 4.63 02/29/08 19,100,000 19,195,500 U.S. Treasury Bills 4.07 03/13/08 1,270,000 1,246,187 U.S. Treasury Notes 3.75 05/15/08 100,035,000 101,186,903
Securities Transactions, Investment Income, Expenses, Dividends and Distributions to Shareholders: Security transactions are recorded on a trade date basis. Realized gains and losses on sales of investments are calculated on the identified cost basis. Interest income is accrued daily 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 Fund is informed after the ex-dividend date. Funds which earn foreign income and capital gains may be subject to foreign withholding taxes and capital gains taxes at various rates. Under applicable foreign law, a withholding of tax may be imposed on interest, dividends, and capital gains at various rates. For financial statements purposes, the Funds amortize all premiums and accrete all discounts on fixed income securities. Net investment income, other than class-specific expenses, and realized and unrealized gains and losses, are allocated daily to each class of shares based upon the relative net asset value of outstanding shares of each class of shares at the beginning of the day (after adjusting for the current capital shares activity of the respective class). 70 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) Expenses common to all Funds, not directly related to individual Funds, are allocated among the Funds based upon their relative net asset value or other appropriate methods. In all other respects, expenses are charged to each Fund as incurred on a specific identification basis. Interest earned on cash balances held at the custodian are shown as custody credits on the Statement of Operations. Dividends from net investment income, if any, are paid annually, except for the Balanced Assets Fund and Growth and Income Fund, which pay quarterly. Capital gain distributions, if any, are paid at least annually. The Balanced Assets Fund and Growth and Income Fund reserve the right to declare and pay dividends less frequently than disclosed above, provided that net realized capital gains and net investment income, if any, are paid annually. The Funds record dividends and distributions to their shareholders on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined and presented in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. 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 investment income (loss), net realized gain (loss) and net assets are not affected by these reclassifications. Each Fund 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 realized gain on investments to its shareholders. Therefore, no federal tax provisions are required. Each Fund is considered a separate entity for tax purposes. Foreign Currency Translation: The books and records of the Funds are maintained in U.S. dollars. Assets and liabilities denominated in foreign currencies 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 include foreign exchange gains and losses from currency gains or losses between the trade and 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 other assets and liabilities arising as a result of changes in the exchange rate. Forward Foreign Currency Contracts: Certain funds may enter into forward foreign currency contracts ("forward contracts") to attempt to protect securities and related receivables and payables against changes in future foreign exchange rates or to enhance return. 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 change in market value is recorded by the Fund as unrealized gain or loss. On settlement date, the Fund records realized foreign exchange gains or losses when the contract is closed 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 may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward contracts involve elements of risk in excess of the amounts reflected in the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward contract. Futures Contracts: A futures contract is an agreement between two parties to buy and sell a financial instrument at a set price on a future date. Upon entering into a futures transaction, a Fund will be required to segregate an initial margin payment of cash or other liquid securities with the Futures Commission Merchant ("the broker"). The Funds' activities in futures contracts are used primarily for hedging purposes and from time to time for income enhancement. Futures contracts are conducted through regulated exchanges that minimize counter-party credit risks. A Funds' participation in the futures markets involves certain risks, including imperfect correlation between movements in the price of futures contracts and movements in the price of the securities hedged or used for cover. Pursuant to a contract, the Funds agree to receive from or pay to the broker an amount of cash equal to 71 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) the daily fluctuation in value of the contract. Such receipts or payments are known as "variation margin" and are recorded by the Funds as unrealized appreciation or depreciation. Futures contracts involve elements of risk in excess of the amount reflected in the Statement of Assets and Liabilities. When a contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Options: An option is a contract conveying a right to buy or sell a financial instrument at a specified price during a stipulated period. The premium paid by a Fund for the purchase of a call or a put option is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently marked to market to reflect the current market value of the option. When a Fund writes a call or a put option, an amount equal to the premium received by the Fund is included in the Fund's Statement of Assets and Liabilities as a liability and is subsequently marked to market to reflect the current market value of the option written. If an option which the Fund has written either expires on its stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such options is extinguished. If a call option which the Fund has written is exercised, the Fund realizes a capital gain or loss from the sale of the underlying security and the proceeds from such sale are increased by the premium originally received. If a put option which the Fund has written is exercised, the amount of the premium originally received reduces the cost of the security which the Fund purchased upon exercise of the option. There were no transactions in call and put options written during the year ended September 30, 2007. Mortgage-Backed Dollar Rolls: During the year ended September 30, 2007, the Balanced Assets Fund entered into dollar rolls using "to be announced" ("TBA") mortgage-backed securities ("TBA Rolls"). The Fund's 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 Balanced Assets Fund had TBA Rolls outstanding at period end, which are included in receivable for investments sold and payable for investments purchased in the Statement of Assets and Liabilities. Dollar roll transactions involve the risk that the market value of the securities held by the 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 dollar roll transaction files bankruptcy or becomes insolvent, the 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 the Fund with the proceeds of the dollar roll transaction may not exceed transaction costs. Short Sales: All funds may engage in "short sales against the box". A short sale is against the box to the extent that the Fund contemporaneously owns, or has the right to obtain without payment, securities identical to those sold short. In addition, the Disciplined Growth Fund, Value Fund, International Equity Fund and International Small-Cap Fund may sell a security it does not own in anticipation of a decline in the market value of that security ("short sales"). To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund then is obligated to replace the security borrowed by purchasing it at market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced, the Fund is required to pay to the lender any dividends or interest that accrues during the period of the loan. To borrow the security, the Fund may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. Until the Fund replaces a borrowed security, the Fund will maintain daily a segregated account, containing cash or liquid securities, at such a level that (i) the amount deposited in the account plus the amount deposited with the broker as collateral will equal the current value of the security sold short and (ii) the amount deposited in the segregated account plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time it was sold short. Liabilities for securities sold short are reported at market value in the financial statements. Such liabilities are subject to off balance sheet risk to the extent of any future increases in market value of the securities sold short. The ultimate liability for securities sold short could exceed the liabilities recorded in the Statement of Assets and Liabilities. The Fund bears the risk of potential inability of the broker to meet their obligation to perform. During the year ended September 30, 2007, Growth Opportunities Fund and Disciplined Growth Fund engaged in short sales. 72 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) Note 4. 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 AIG SunAmerica. Under the Agreement, AIG SunAmerica provides continuous supervision of a Fund's portfolio and administers its corporate affairs, subject to general review by the Trustees. In connection therewith, AIG 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 AIG SunAmerica and its affiliates. The Funds pay AIG SunAmerica a monthly investment advisory and management fee calculated daily at the following annual percentages of each Fund's average daily net assets:
Management Assets Fees --------------------------- ---------- Blue Chip Growth Fund*...... $0 - $350 million 0.75% (greater than) $350 million 0.70 (greater than) $700 million 0.65 Growth Opportunities Fund*.. $0 - $350 million 0.75 (greater than) $350 million 0.70 (greater than) $700 million 0.65 New Century Fund............ $0 - $350 million 0.75 (greater than) $350 million 0.70 (greater than) $700 million 0.65 Growth and Income Fund+..... $0 - $350 million 0.75 (greater than) $350 million 0.70 (greater than) $700 million 0.65 Balanced Assets Fund*....... $0 - $350 million 0.75 (greater than) $350 million 0.70 (greater than) $700 million 0.65 International Equity Fund... (greater than) $0 1.00 Value Fund.................. $0 - $750 million 1.00 (greater than) $750 million 0.95 (greater than) $1.5 billion 0.90 Disciplined Growth Fund..... (greater than) $0 0.85 International Small-Cap Fund (greater than) $0 1.15
- -------- * On August 29, 2006, AIG SunAmerica agreed to the continuation of a 0.05% waiver of the investment advisory fees for the Blue Chip Growth Fund, Growth Opportunities Fund and Balanced Assets Fund. Effective September 1, 2006, AIG SunAmerica agreed to, until further notice, an additional 0.02% waiver of the investment advisory fee for these funds. Effective October 1, 2006, AIG SunAmerica agreed to, until further notice, reduce the waiver of the investment advisory fee for the funds to 0.02%. Effective January 1, 2007, AIG SunAmerica removed the 0.02% waiver from the Growth Opportunities Fund. Effective July 1, 2007 AIG SunAmerica removed the 0.02% waiver from the Blue Chip Growth Fund. For the year ended September 30, 2007, the amount of investment advisory fees waived were $10,571, $3,580 and $31,745, respectively. These amounts are reflected in the Statement of Operations. + Effective September 1, 2006, AIG SunAmerica agreed, until further notice, to waive 0.05% of the investment advisory fees for the Growth and Income Fund. Effective January 1, 2007, AIG SunAmerica removed the 0.05% waiver from the Growth and Income Fund. For the year ended September 30, 2007, the amount of investment advisory fees waived were $14,698. These amounts are reflected in the Statement of Operations. For the year ended September 30, 2007, AIG SunAmerica earned fees in the amounts stated in the Statement of Operations. The International Equity Fund and International Small-Cap Fund are subadvised by AIG Global Investment Corp. ("AIGGIC") pursuant to a subadvisory agreement with AIG SunAmerica. AIGGIC is an indirect wholly-owned subsidiary of AIG and an affiliate of AIG SunAmerica. AIGGIC receives an annual fee of 0.47% of average daily net assets for the International Equity Fund and 0.60% of average daily net assets for the International Small-Cap Fund, which is paid by AIG SunAmerica. For the year ended September 30, 2007, AIGGIC waived 0.05% of the fee paid by AIG SunAmerica for the International Small-Cap Fund. AIG SunAmerica has contractually agreed to waive fees or reimburse expenses to the extent necessary to cap the Funds' annual fund operating expenses at the following percentages of each Fund's average net assets. The contractual expense waivers and fee reimbursements will continue indefinitely subject to termination by the Trustees, including a majority of the trustees who are not deemed to be "interested persons" of the Trust, as defined by Section 2(a)(19) of the 1940 Act ("Disinterested Trustees"). 73 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Fund Percentage - ---- ---------- Blue Chip Growth Class I....... 1.33% Growth Opportunities Class I... 1.33 Growth and Income Class I...... 1.32 Balanced Assets Class I........ 1.33 International Equity Class A... 1.90 International Equity Class B... 2.55 International Equity Class C... 2.55 International Equity Class I... 1.80 Value Class A.................. 1.63 Value Class B.................. 2.28 Value Class C.................. 2.28 Value Class I.................. 1.53 Value Class Z.................. 1.06 Disciplined Growth Class A..... 1.45 Disciplined Growth Class B..... 2.10 Disciplined Growth Class C..... 2.10 International Small-Cap Class A 1.90 International Small-Cap Class B 2.55 International Small-Cap Class C 2.55
Further, AIG SunAmerica is voluntarily waiving fees and/or reimbursing expenses, if necessary, so that the total net expense ratio for the following classes do not exceed the amounts set forth below. The voluntary fee waivers and/or expense reimbursements may be terminated at any time at the option of AIG SunAmerica.
Fund Percentage - ---- ---------- New Century Class C 2.14%
For the International Equity Fund, Value Fund, Disciplined Growth Fund, and International Small-Cap Fund, any voluntary or contractual waivers and/or reimbursements made by AIG SunAmerica are subject to recoupment from the Funds within the following two years of making such waivers or reimbursements, provided that the Funds are able to effect such payment to AIG SunAmerica and remain in compliance with the foregoing expense limitations. For the year ending September 30, 2007, pursuant to the contractual and voluntary expense limitations in the above tables AIG SunAmerica has waived or reimbursed expenses as follows: Blue Chip Growth Class I....... $ 12,173 Growth Opportunities Class I... 12,116 New Century Fund Class C....... 15,092 Growth & Income Class I........ 11,726 Balanced Assets Class I........ 12,353 International Equity Class A... -- International Equity Class B... 8,561 International Equity Class C... -- International Equity Class I... 3,344 Value Fund Class A............. 91,558 Value Fund Class B............. 49,989 Value Fund Class C............. 30,639 Value Fund Class I............. 10,196 Value Fund Class Z............. 20,704 Disciplined Growth Class A..... 76,239 Disciplined Growth Class B..... 32,330 Disciplined Growth Class C..... 80,022 International Small-Cap Class A 122,407 International Small-Cap Class B 17,711 International Small-Cap Class C 30,865
74 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) For the period ended September 30, 2007, the amounts recouped by the Adviser are as follows: International Equity Class A $31,232 International Equity Class B -- International Equity Class C 174 International Equity Class I --
At September 30, 2007, the amount of expenses previously waived and/or reimbursed by AIG SunAmerica during the prior two years that remain subject to recoupment are as follows:
Class Other Specific Expenses Expenses Reimbursed Reimbursed - - ---------- ---------- International Equity Class A........ $ -- $ 11,143 International Equity Class B........ -- 15,048 International Equity Class C........ -- 6,806 International Equity Class I........ -- 5,330 Value Fund Class A.................. 80,383 118,282 Value Fund Class B.................. 31,952 70,292 Value Fund Class C.................. 22,045 40,980 Value Fund Class I.................. 997 16,929 Value Fund Class Z.................. 14,723 28,846 Disciplined Growth Class A.......... 13,918 115,181 Disciplined Growth Class B.......... 11,934 73,217 Disciplined Growth Class C.......... 16,977 125,502 International Small-Cap Fund Class A 139,263 90,199 International Small-Cap Fund Class B 2,961 34,927 International Small-Cap Fund Class C 14,352 48,423
The Trust, on behalf of each Fund, has entered into a Distribution Agreement with AIG SunAmerica Capital Services, Inc. ("SACS" or the "Distributor"), an affiliate of the Adviser. Each Fund has adopted a Distribution Plan on behalf of each class of shares (other than Class I and Class Z shares) (each a "Plan" and collectively, the "Plans") in accordance with the provisions of Rule 12b-1 under the 1940 Act, hereinafter referred to as the "Class A Plan," "Class B Plan" and "Class C Plan." In adopting the Plans, the Trustees determined that there was a reasonable likelihood that each such Plan would benefit the Fund and the shareholders of the respective class. The sales charge and distribution fees of a particular class will not be used to subsidize the sale of shares of any other class. Under the Class A Plan, Class B Plan and Class C Plan, the Distributor receives a distribution fee from a Fund at an annual rate of 0.10%, 0.75% and 0.75%, respectively, of the average daily net assets of the Fund's Class A, Class B and Class C shares to compensate the Distributor and certain securities firms for providing sales and promotional activities for distributing that class of shares. The distribution costs for which the Distributor may be compensated include fees paid to broker-dealers that have sold Fund shares, commissions and other expenses such as those incurred for sales literature, prospectus printing and distribution and compensation to wholesalers. It is possible that in any given year the amount paid to the Distributor under each Class' Plan may exceed the Distributor's distribution costs as described above. The Plans provide that the Class A, Class B and Class C shares of each Fund will pay the Distributor an account maintenance fee up to an annual rate of 0.25% of the aggregate average daily net assets of such class of shares for payments to compensate the Distributor and certain securities firms for account maintenance activities. Accordingly, for the year ended September 30, 2007, SACS received fees (see Statement of Operations) based upon the aforementioned rates. In addition, SACS is paid a fee of 0.25% of average daily net assets of Class I shares in connection with providing administrative and shareholder services to Class I shareholders. For the year ended September 30, 2007, SACS earned fees (see Statement of Operations) based upon the aforementioned rates. 75 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) SACS receives sales charges on each Fund's Class A shares, portions of which are reallocated to affiliated broker-dealers and non-affiliated broker-dealers. SACS also receives the proceeds of contingent deferred sales charges paid by investors in connection with certain redemptions of each Fund's Class A, Class B and Class C shares. SACS has advised the Funds that for the year ended September 30, 2007, the proceeds received from sales (and paid out to affiliated and non-affiliated broker-dealers) and redemptions are 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 - ---- -------- -------------- -------------- ------------- ------------- ------------- Blue Chip Growth....... $ 27,152 $11,566 $11,337 $ 9 $21,445 $ 350 Growth Opportunities... 36,133 17,002 13,996 -- 22,272 503 New Century............ 51,483 23,818 19,286 601 20,740 373 Growth & Income........ 65,369 30,078 26,136 31 30,323 987 Balanced Assets........ 150,159 89,910 39,739 576 28,689 15,417 International Equity... 99,776 26,765 55,217 204 24,229 1,878 Value.................. 127,716 44,950 58,235 404 59,657 1,550 Disciplined Growth..... 56,059 27,259 18,391 60 6,646 11,314 International Small-Cap 69,677 21,444 41,181 -- 429 439
The Trust has entered into a Service Agreement with AIG 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. Pursuant to the Service Agreement, the Funds (except for Class Z shares of the Funds) pay a fee to SAFS for services rendered based upon an annual rate of 0.22% of average daily net assets. No portion of this fee is paid or reimbursed by the Class Z shares, however, Class Z shares pay all direct transfer agency fees and out-of-pocket expenses relating to Class Z shares. For the year ended September 30, 2007, the Funds incurred the following expenses which are included in transfer agent fees payable in the Statement of Asset and Liabilities and in transfer agent fees and expenses in the Statement of Operations to compensate SAFS pursuant to the terms of the Service Agreement.
Expense Payable At September 30, 2007 -------------------------------- ------------------------------- Fund Class A Class B Class C Class I Class A Class B Class C Class I - ---- -------- ------- ------- ------- ------- ------- ------- ------- Blue Chip Growth....... $105,300 $33,094 $ 8,711 $ 1,404 $ 8,221 $1,920 $ 538 $ 119 Growth Opportunities... 83,861 42,096 20,062 463 5,827 2,092 1,220 26 New Century............ 182,830 22,171 9,249 -- 13,169 1,683 897 -- Growth and Income...... 135,449 50,378 55,009 695 9,783 3,148 4,013 59 Balanced Assets........ 254,455 37,281 31,948 1,608 13,283 2,039 2,413 121 International Equity... 148,458 45,798 52,234 18,693 11,770 3,130 4,252 1,365 Value.................. 274,790 97,556 71,251 105 21,115 6,776 4,461 6 Disciplined Growth..... 49,184 15,571 59,150 -- 4,317 981 4,989 -- International Small-Cap 59,469 1,860 8,841 -- 5,362 203 931 --
At September 30, 2007, AIG SunAmerica, Inc. an affiliated company of the Adviser, owned 17.5% of the total outstanding shares of International Equity. On July 9, 2007, the Adviser made the following payment to the Fund set forth below, which represents the net difference between amounts realized by the Fund upon the disposition of AIG stock that converted from American General Corp. stock upon the acquisition of American General Corp. by AIG, and amounts the Fund would have realized had the Fund's predecessor sold such stock on the date that the Adviser became affiliated with American General Corp., based on the closing price with respect to such date (August 29, 2001).
Fund Amount - ---- -------- Disciplined Growth Fund $191,815
76 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) Note 5. Expense Reductions Through expense offset arrangements resulting from broker commission recapture, a portion of the expenses of the Funds set forth below have been reduced. For the year ended September 30, 2007, the amount of expense reductions received by each Fund, used to offset the Fund's non-affiliated expenses were as follows:
Total Expense Fund Reductions - ---- ------------- Blue Chip Growth.... $ 7,908 Growth Opportunities 33,696 New Century......... 22,812 Growth and Income... 22,522 Balanced Assets..... 12,237 Value............... 24,710 Disciplined Growth.. 66,730
Note 6. 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, 2007, were as follows:
Blue Chip Growth New Growth and Balanced Growth Opportunities Century Income Assets Fund Fund Fund Fund Fund ------------- ------------- ------------ ------------- ------------ Purchases (excluding U.S. government securities)........... $ 49,562,257 $196,201,618 $270,671,943 $180,376,596 $164,499,079 Sales and maturities (excluding U.S. government securities) 62,471,852 214,287,423 287,818,537 207,172,154 181,862,864 Purchases of U.S. government securities.................... -- -- -- -- 26,252,964 Sales and maturities of U.S. government securities......... -- -- -- -- 36,305,046 International Disciplined International Equity Value Growth Small-Cap Fund Fund Fund Fund ------------- ------------- ------------ ------------- Purchases (excluding U.S. government securities)........... $160,962,023 $320,905,939 $248,281,140 $ 26,479,954 Sales and maturities (excluding U.S. government securities) 174,133,436 352,408,193 260,957,005 21,892,234 Purchases of U.S. government securities.................... -- -- -- -- Sales and maturities of U.S. government securities......... -- -- -- --
77 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) Note 7. Federal Income Taxes The amounts of aggregate unrealized gain (loss) and the cost of investment securities for federal income tax purposes, including short-term securities and repurchase agreements, were as follows at September 30, 2007:
Blue Chip Growth New Growth and Balanced Growth Opportunities Century Income Assets Fund Fund Fund Fund Fund ------------- ------------- ----------- ------------- ------------ Cost (tax basis).......................... $ 59,968,979 $ 58,382,340 $99,170,396 $99,042,612 $141,825,305 ============ ============ =========== =========== ============ Appreciation.............................. 12,267,364 3,039,157 4,743,237 10,925,335 15,307,019 Depreciation.............................. (1,485,471) (2,997,038) (4,592,015) (1,879,359) (2,920,386) ------------ ------------ ----------- ----------- ------------ Net unrealized appreciation (depreciation) $ 10,781,893 $ 42,119 $ 151,222 $ 9,045,976 $ 12,386,633 ============ ============ =========== =========== ============ International Disciplined International Equity Value Growth Small-Cap Fund Fund Fund Fund ------------- ------------- ----------- ------------- Cost (tax basis).......................... $108,035,552 $207,386,064 $52,379,191 $32,624,746 ============ ============ =========== =========== Appreciation.............................. 24,664,419 23,641,124 9,046,268 6,387,129 Depreciation.............................. (1,430,115) (2,729,469) (544,461) (2,009,232) ------------ ------------ ----------- ----------- Net unrealized appreciation (depreciation) $ 23,234,304 $ 20,911,655 $ 8,501,807 $ 4,377,897 ============ ============ =========== ===========
The following details the tax basis of distributions as well as the components of distributable earnings. The tax character of distributions paid may differ from the character of distributions shown on the Statement of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax basis components of distributable earnings differ from the amounts reflected in the Statement of Assets and Liabilities due to temporary book/tax differences primarily arising from wash sales, post October losses and derivative transactions.
Distributable Earnings Tax Distributions ----------------------------------------- ---------------------- For the year ended September 30, 2007 ---------------------------------------------------------------- Long-term Gains/ Capital Unrealized Long-Term Ordinary Loss Appreciation Ordinary Capital Fund Income Carryover (Depreciation) Income Gains - ---- ----------- -------------- -------------- ---------- ----------- Blue Chip Growth....... $ -- $ (52,435,231) $10,781,893 $ -- $ -- Growth Opportunities... -- (173,866,796) 42,119 -- -- New Century............ -- (75,049,480) 151,222 -- -- Growth and Income...... 242,352 (33,557,797) 9,045,976 -- -- Balanced Assets........ 412,431 (68,456,727) 12,393,089 2,250,950 -- International Equity... -- 8,141,350 23,228,863 -- -- Value.................. 17,252,045 11,938,455 20,911,655 9,883,623 16,743,650 Disciplined Growth..... -- (18,611,005) 8,504,488 -- -- International Small-Cap 5,925 6,822 4,385,751 -- --
78 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Tax Distributions ---------------------- For year ended September 30, 2006 ---------------------- Long-Term Ordinary Capital Fund Income Gains - ---- ----------- ---------- Blue Chip Growth....... $ -- $ -- Growth Opportunities... -- -- New Century............ -- -- Growth and Income...... 101,366 -- Balanced Assets........ 2,815,576 -- International Equity... -- -- Value.................. 14,799,743 2,589,627 Disciplined Growth..... 53,956 -- International Small-Cap -- --
For the year ended September 30, 2007, the reclassifications arising from book/tax differences resulted in increases (decreases) that were primarily due to net investment losses, treatment of foreign currency, tax treatments of certain debt obligations, principal paydown adjustments and capital loss carryforwards resulting from the merger of the SunAmerica Biotech/Health Fund and the New Century Fund to the components of net assets as follows:
Accumulated Accumulated Undistributed Net Undistributed Investment Net Realized Capital Paid- Fund Income (Loss) Gain (Loss) in - ---- ----------------- ------------- ------------- Blue Chip Growth....... $429,766 $ (217) $ (429,549) Growth Opportunities... 729,813 -- (729,813) New Century............ 291,870 (31,042,626) 30,750,756 Growth and Income...... 530 (530) -- Balanced Assets........ 161,312 (161,312) -- International Equity... 132,191 2,835 (135,026) Value.................. 1,418 (1,418) -- Disciplined Growth..... 421,599 (13,786) (407,813) International Small-Cap 126,530 (126,530) --
For Federal income tax purposes, the Funds indicated below have capital loss carryforwards, which expire in the year indicated, as of September 30, 2007, which are available to offset future capital gains, if any:
Capital Loss Carryforward ------------------------------------------------------------------------- Fund 2008 2009 2010 2011 2012 2013 2014 - ---- ----------- ----------- ------------ ----------- ---------- -------- ---- Blue Chip Growth*...... $15,134,022 $ -- $ 10,374,287 $42,060,944 $ -- $ -- $-- Growth Opportunities*.. 6,398,027 151,316 121,180,899 65,312,802 -- -- -- New Century*........... 12,315,199 17,583,650 39,244,108 36,351,156 -- -- -- Growth and Income...... -- -- -- 27,835,407 5,722,390 -- -- Balanced Assets........ -- -- 8,896,612 55,685,563 3,874,552 -- -- International Equity*.. 13,755,719 -- -- -- -- -- -- Value.................. -- -- -- -- -- -- -- Disciplined Growth..... -- -- 13,578,150 4,260,050 594,906 177,899 -- International Small-Cap -- -- -- -- -- -- --
- -------- * The capital loss carryforwards include realized capital losses from the acquisition of other funds. These losses may be subject to annual limitation imposed by the Internal Revenue Code. Therefore, it is possible that not all of these capital losses will be available for use. 79 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) The Funds indicated below, utilized capital loss carryforwards, which offset net taxable gains realized in the year ended September 30, 2007.
Capital Loss Carryforward Fund Utilized - ---- ------------ Blue Chip Growth....... $ 4,529,567 Growth Opportunities... 11,657,513 New Century............ 18,768,373 Growth and Income...... 14,900,525 Balanced Assets........ 10,059,461 International Equity... 5,232,853 Value.................. -- Disciplined Growth..... 10,300,713 International Small-Cap 1,191,758
Under the current law, capital losses related to securities and foreign currency realized after October 31 and prior to the Fund's fiscal year end may be deferred as occurring the first day of the following year. For the fiscal year ended September 30, 2007, the Funds elected to defer capital losses as follows:
Deferred Deferred Post- Post- October October Capital Currency Fund Loss Loss - ---- -------- -------- New Century......... $-- $ 190 International Equity -- 107,024
Note 8. Capital Share Transactions Transactions in capital shares of each class of each fund were as follows:
Blue Chip Growth Fund -------------------------------------------------------------------------------------------- Class A Class B ---------------------------------------------- -------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ---------------------- ---------------------- --------------------- --------------------- Shares Amount Shares Amount Shares Amount Shares Amount -------- ------------ -------- ------------ -------- ----------- -------- ----------- Shares sold (1)(2)(3)(4) 272,319 $ 4,717,820 286,191 $ 4,393,307 61,910 $ 927,860 107,187 $ 1,479,959 Reinvested dividends.... -- -- -- -- -- -- -- -- Shares redeemed (1)(2).. (656,693) (11,104,067) (861,719) (13,297,858) (449,635) (6,803,173) (511,064) (7,023,069) -------- ------------ -------- ------------ -------- ----------- -------- ----------- Net increase (decrease). (384,374) $ (6,386,247) (575,528) $ (8,904,551) (387,725) $(5,875,313) (403,877) $(5,543,110) ======== ============ ======== ============ ======== =========== ======== ===========
- -------- (1)For the year ended September 30, 2007, includes automatic conversion of 205,245 shares of Class B shares in the amount of $3,153,549 to 181,415 shares of Class A shares in the amount of $3,153,549. (2)For the year ended September 30, 2006, includes automatic conversion of 140,669 shares of Class B shares in the amount of $1,929,214 to 125,387 shares of Class A shares in the amount of $1,929,214. (3)For the year ended September 30, 2007, includes automatic conversion of 17,217 shares of Class C shares in the amount of $262,954 to 15,124 shares of Class A shares in the amount of $262,954. (4)For the year ended September 30, 2006, includes automatic conversion of 13,646 shares of Class C shares in the amount of $184,614 to 12,078 shares of Class A shares in the amount of $184,614. 80 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Blue Chip Growth Fund --------------------------------------------------------------------------------------------- Class C Class I ---------------------------------------------- --------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ---------------------- ---------------------- ---------------------- --------------------- Shares Amount Shares Amount Shares Amount Shares Amount -------- ------------ -------- ------------ -------- ------------ -------- ----------- Shares sold............. 18,808 $ 279,270 42,327 $ 583,163 6,566 $ 112,457 10,100 $ 157,155 Reinvested dividends.... -- -- -- -- -- -- -- -- Shares redeemed (3)(4).. (104,067) (1,557,478) (105,697) (1,448,494) (11,604) (197,959) (64,498) (1,009,458) -------- ------------ -------- ------------ -------- ------------ -------- ----------- Net increase (decrease). (85,259) $ (1,278,208) (63,370) $ (865,331) (5,038) $ (85,502) (54,398) $ (852,303) ======== ============ ======== ============ ======== ============ ======== =========== Growth Opportunities Fund --------------------------------------------------------------------------------------------- Class A Class B ---------------------------------------------- --------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ---------------------- ---------------------- ---------------------- --------------------- Shares Amount Shares Amount Shares Amount Shares Amount -------- ------------ -------- ------------ -------- ------------ -------- ----------- Shares sold (5)(6)(7)(8) 467,598 $ 9,161,091 308,492 $ 5,164,212 57,020 $ 971,620 76,853 $ 1,138,934 Reinvested dividends.... -- -- -- -- -- -- -- -- Shares redeemed (5)(6).. (607,841) (11,673,643) (858,318) (14,201,135) (584,520) (10,064,774) (558,658) (8,294,844) -------- ------------ -------- ------------ -------- ------------ -------- ----------- Net increase (decrease). (140,243) $ (2,512,552) (549,826) $ (9,036,923) (527,500) $ (9,093,154) (481,805) $(7,155,910) ======== ============ ======== ============ ======== ============ ======== =========== Growth Opportunities Fund --------------------------------------------------------------------------------------------- Class C Class I ---------------------------------------------- --------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ---------------------- ---------------------- ---------------------- --------------------- Shares Amount Shares Amount Shares Amount Shares Amount -------- ------------ -------- ------------ -------- ------------ -------- ----------- Shares sold............. 73,251 $ 1,243,056 35,295 $ 519,835 900 $ 17,303 6,157 $ 104,273 Reinvested dividends.... -- -- -- -- -- -- -- -- Shares redeemed (7)(8).. (203,387) (3,485,346) (253,692) (3,730,537) (17,924) (341,263) (88,753) (1,461,430) -------- ------------ -------- ------------ -------- ------------ -------- ----------- Net increase (decrease). (130,136) $ (2,242,290) (218,397) $ (3,210,702) (17,024) $ (323,960) (82,596) $(1,357,157) ======== ============ ======== ============ ======== ============ ======== ===========
- -------- (3)For the year ended September 30, 2007, includes automatic conversion of 17,217 shares of Class C shares in the amount of $262,954 to 15,124 shares of Class A shares in the amount of $262,954. (4)For the year ended September 30, 2006, includes automatic conversion of 13,646 shares of Class C shares in the amount of $184,614 to 12,078 shares of Class A shares in the amount of $184,614. (5)For the year ended September 30, 2007, includes automatic conversion of 277,289 shares of Class B shares in the amount of $4,814,621 to 244,697 shares of Class A shares in the amount of $4,814,621. (6)For the year ended September 30, 2006, includes automatic conversion of 89,673 shares of Class B shares in the amount of $1,335,833 to 79,800 shares of Class A shares in the amount of $1,335,833. (7)For the year ended September 30, 2007, includes automatic conversion of 15,202 shares of Class C shares in the amount of $266,305 to 13,404 shares of Class A shares in the amount of $266,305. (8)For the year ended September 30, 2006, includes automatic conversion of 14,961 shares of Class C shares in the amount of $217,480 to 13,265 shares of Class A shares in the amount of $217,480. 81 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
New Century Fund ---------------------------------------------------------------------------------------------- Class A Class B ------------------------------------------------ -------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ---------------------- ------------------------ --------------------- --------------------- Shares Amount Shares Amount Shares Amount Shares Amount -------- ------------ ---------- ------------ -------- ----------- -------- ----------- Shares sold (1)(2)(3).... 349,824 $ 7,584,889 251,417 $ 4,619,033 41,725 $ 1,374,288 52,369 $ 849,797 Shares issued in merger + 456,997 9,556,448 -- -- 378,511 6,906,165 -- -- Shares redeemed (1)(2)... (867,696) (20,403,970) (1,032,640) (18,939,346) (324,871) (6,113,256) (241,463) (3,911,556) -------- ------------ ---------- ------------ -------- ----------- -------- ----------- Net increase (decrease).. (60,875) $ (3,262,633) (781,223) $(14,320,313) 95,365 $ 2,167,197 (189,094) $(3,061,759) ======== ============ ========== ============ ======== =========== ======== =========== New Century Fund ------------------------------------------------ Class C ------------------------------------------------ For the For the year ended year ended September 30, 2007 September 30, 2006 ---------------------- ------------------------ Shares Amount Shares Amount -------- ------------ ---------- ------------ Shares sold.............. 30,355 $ 1,513,139 18,023 $ 288,668 Shares issued in merger + 263,342 4,832,027 -- -- Shares redeemed (3)...... (100,822) (1,920,423) (33,993) (549,978) -------- ------------ ---------- ------------ Net increase (decrease).. 192,875 $ 4,424,743 (15,970) $ (261,310) ======== ============ ========== ============
- -------- (1)For the year ended September 30, 2007, includes automatic conversion of 165,359 shares of Class B shares in the amount of $3,144,259 to 144,044 shares of Class A shares in the amount of $3,144,259. (2)For the year ended September 30, 2006, includes automatic conversion of 94,711 shares of Class B shares in the amount of $1,533,530 to 83,219 shares of Class A shares in the amount of $1,533,530. (3)For the year ended September 30, 2007, includes automatic conversion of 79 shares of Class C shares in the amount of $1,590 to 69 shares of Class A shares in the amount of $1,590. + See Note 2.
Growth and Income Fund ---------------------------------------------------------------------------------------------------- Class A Class B -------------------------------------------------- ------------------------------------------------ For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ------------------------ ------------------------ ---------------------- ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ---------- ------------ -------- ------------ ---------- ------------ Shares sold (1)(2)(3)(4) 1,024,726 $ 15,049,599 1,037,304 $ 13,187,347 88,044 $ 1,200,393 138,475 $ 1,670,363 Reinvested dividends.... -- -- 7,291 92,385 -- -- -- -- Shares redeemed (1)(2).. (1,415,515) (20,646,675) (1,733,300) (22,055,189) (913,913) (12,582,078) (1,498,815) (18,023,263) ---------- ------------ ---------- ------------ -------- ------------ ---------- ------------ Net increase (decrease). (390,789) $ (5,597,076) (688,705) $ (8,775,457) (825,869) $(11,381,685) (1,360,340) $(16,352,900) ========== ============ ========== ============ ======== ============ ========== ============
- -------- (1)For the year ended September 30, 2007, includes automatic conversion of 465,198 shares of Class B shares in the amount of $6,461,560 to 436,352 shares of Class A shares in the amount of $6,461,560. (2)For the year ended September 30, 2006, includes automatic conversion of 569,345 shares of Class B shares in the amount of $6,846,288 to 537,783 shares of Class A shares in the amount of $6,846,288. (3)For the year ended September 30, 2007, includes automatic conversion of 102,570 shares of Class C shares in the amount of $1,439,849 to 96,087 shares of Class A shares in the amount of $1,439,849. (4)For the year ended September 30, 2006, includes automatic conversion of 257,374 shares of Class C shares in the amount of $3,090,506 to 244,371 shares of Class A shares in the amount of $3,090,506. 82 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Growth and Income Fund ------------------------------------------------------------------------------------------------- Class C Class I -------------------------------------------------- --------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ------------------------ ------------------------ --------------------- ---------------------- Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ---------- ------------ -------- ----------- -------- ------------ Shares sold............. 69,560 $ 943,742 50,775 $ 607,720 3,981 $ 57,853 4,901 $ 62,493 Reinvested dividends.... -- -- -- -- -- -- 167 2,121 Shares redeemed (3)(4).. (585,816) (8,047,218) (1,122,450) (13,426,842) (5,169) (76,734) (44,644) (560,171) ---------- ------------ ---------- ------------ -------- ----------- -------- ------------ Net increase (decrease). (516,256) $ (7,103,476) (1,071,675) $(12,819,122) (1,188) $ (18,881) (39,576) $ (495,557) ========== ============ ========== ============ ======== =========== ======== ============ Balanced Assets Fund ------------------------------------------------------------------------------------------------- Class A Class B -------------------------------------------------- --------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ------------------------ ------------------------ --------------------- ---------------------- Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ---------- ------------ -------- ----------- -------- ------------ Shares sold (5)(6)(7)(8) 659,237 $ 9,995,580 740,185 $ 10,265,397 82,301 $ 1,239,592 103,140 $ 1,423,304 Reinvested dividends.... 122,714 1,865,233 160,938 2,242,794 7,877 119,339 16,817 233,746 Shares redeemed (5)(6).. (1,840,180) (27,750,445) (2,374,864) (32,919,295) (595,400) (8,989,165) (876,652) (12,118,388) ---------- ------------ ---------- ------------ -------- ----------- -------- ------------ Net increase (decrease). (1,058,229) $(15,889,632) (1,473,741) $(20,411,104) (505,222) $(7,630,234) (756,695) $(10,461,338) ========== ============ ========== ============ ======== =========== ======== ============ Balanced Assets Fund ------------------------------------------------------------------------------------------------- Class C Class I -------------------------------------------------- --------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ------------------------ ------------------------ --------------------- ---------------------- Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ---------- ------------ -------- ----------- -------- ------------ Shares sold............. 37,806 $ 565,546 59,887 $ 822,679 2,467 $ 37,069 3,998 $ 55,500 Reinvested dividends.... 6,854 104,202 11,763 163,790 886 13,500 1,087 15,163 Shares redeemed (7)(8).. (229,341) (3,460,624) (417,497) (5,771,742) (14,882) (226,730) (6,630) (92,371) ---------- ------------ ---------- ------------ -------- ----------- -------- ------------ Net increase (decrease). (184,681) $ (2,790,876) (345,847) $ (4,785,273) (11,529) $ (176,161) (1,545) $ (21,708) ========== ============ ========== ============ ======== =========== ======== ============
- -------- (3)For the year ended September 30, 2007, includes automatic conversion of 102,570 shares of Class C shares in the amount of $1,439,849 to 96,087 shares of Class A shares in the amount of $1,439,849. (4)For the year ended September 30, 2006, includes automatic conversion of 257,374 shares of Class C shares in the amount of $3,090,506 to 244,371 shares of Class A shares in the amount of $3,090,506. (5)For the year ended September 30, 2007, includes automatic conversion of 312,489 shares of Class B shares in the amount of $4,744,038 to 311,322 shares of Class A shares in the amount of $4,744,038. (6)For the year ended September 30, 2006, includes automatic conversion of 289,554 shares of Class B shares in the amount of $4,003,645 to 288,356 shares of Class A shares in the amount of $4,003,645. (7)For the year ended September 30, 2007, includes automatic conversion of 9,120 shares of Class C shares in the amount of $137,980 to 9,106 shares of Class A shares in the amount of $137,980. (8)For the year ended September 30, 2006, includes automatic conversion of 29,174 shares of Class C shares in the amount of $403,247 to 29,117 shares of Class A shares in the amount of $403,247. 83 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
International Equity Fund ------------------------------------------------------------------------------------------------------ Class A Class B -------------------------------------------------- -------------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ------------------------ ------------------------ ------------------------ ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------ Shares sold (1)(2)(3)(4). 1,360,169 $ 24,122,022 1,792,340 $ 26,707,517 234,766 $ 3,887,709 422,480 $ 5,960,828 Reinvested dividends..... -- -- -- -- -- -- -- -- Shares redeemed (1)(2)... (1,476,609) (26,115,354) (1,204,676) (17,947,877) (552,783) (9,228,788) (580,769) (8,067,772) ---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------ Net increase (decrease).. (116,440) $ (1,993,332) 587,664 $ 8,759,640 (318,017) $ (5,341,079) (158,289) $ (2,106,944) ========== ============ ========== ============ ========== ============ ========== ============ International Equity Fund ------------------------------------------------------------------------------------------------------ Class C Class I -------------------------------------------------- -------------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ------------------------ ------------------------ ------------------------ ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------ Shares sold.............. 340,641 $ 5,685,742 499,169 $ 6,840,120 140,027 $ 2,462,907 318,984 $ 4,744,366 Reinvested dividends..... -- -- -- -- -- -- -- -- Shares redeemed (3)(4)(5)(6)............ (351,299) (5,862,416) (414,380) (5,730,063) (333,525) (5,907,477) (263,235) (4,005,306) ---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------ Net increase (decrease).. (10,658) $ (176,674) 84,789 $ 1,110,057 (193,498) $ (3,444,570) 55,749 $ 739,060 ========== ============ ========== ============ ========== ============ ========== ============ Value Fund ------------------------------------------------------------------------------------------------------ Class A Class B -------------------------------------------------- -------------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ------------------------ ------------------------ ------------------------ ------------------------ Shares Amount Shares Amount Shares Amount Shares Amount ---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------ Shares sold (7)(8)(9)(10) 1,330,412 $ 24,650,750 1,120,447 $ 19,761,774 305,011 $ 5,377,534 249,089 $ 4,201,032 Reinvested dividends..... 704,045 12,539,044 470,358 8,066,638 284,619 4,810,045 205,229 3,363,708 Shares redeemed (7)(8)... (1,963,578) (36,336,366) (2,359,246) (41,370,087) (1,074,442) (18,893,815) (1,169,879) (19,607,142) ---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------ Net increase (decrease).. 70,879 $ 853,428 (768,441) $(13,541,675) (484,812) $ (8,706,236) (715,561) $(12,042,402) ========== ============ ========== ============ ========== ============ ========== ============
- -------- (1)For the year ended September 30, 2007, includes automatic conversion of 276,480 shares of Class B shares in the amount of $4,654,844 to 258,279 shares of Class A shares in the amount of $4,654,844. (2)For the year ended September 30, 2006, includes automatic conversion of 213,551 shares of Class B shares in the amount of $2,955,239 to 200,881 shares of Class A shares in the amount of $2,955,239. (3)For the year ended September 30, 2007, includes automatic conversion of 35,187 shares of Class C shares in the amount of $594,960 to 32,839 shares of Class A shares in the amount of $594,960. (4)For the year ended September 30, 2006, includes automatic conversion of 62,893 shares of Class C shares in the amount of $842,371 to 59,154 shares of Class A shares in the amount of $824,371. (5)For the year ended September 30, 2007, net of redemption fees of $2,583, $771, $904, and $320 for Class A, Class B, Class C and Class I shares, respectively. (6)For the year ended September 30, 2006, net of redemption fees of $3,190, $1,102, $1,103 and $501 for Class A, Class B, Class C and Class I shares, respectively. (7)For the year ended September 30, 2007, includes automatic conversion of 559,465 shares of Class B shares in the amount of $9,849,109 to 529,830 shares of Class A shares in the amount of $9,849,109. (8)For the year ended September 30, 2006, includes automatic conversion of 414,287 shares of Class B shares in the amount of $6,940,648 to 395,001 shares of Class A shares in the amount of $6,940,648. (9)For the year ended September 30, 2007, includes automatic conversion of 7,899 shares of Class C shares in the amount of $138,746 to 7,473 shares of Class A shares in the amount of $138,746. (10)For the year ended September 30, 2006, includes automatic conversion of 3,114 shares of Class C shares in the amount of $38,164 to 3,019 shares of Class A shares in the amount of $38,164. 84 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
Value Fund ---------------------------------------------------------------------------------------- Class C Class I ---------------------------------------------- ---------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ---------------------- ---------------------- ----------------- --------------------- Shares Amount Shares Amount Shares Amount Shares Amount -------- ------------ -------- ------------ ------ --------- -------- ----------- Shares sold............ 234,527 $ 4,126,128 220,948 $ 3,715,419 654 $ 12,289 42,694 $ 745,901 Reinvested dividends... 198,577 3,355,958 147,920 2,422,937 199 3,531 14,121 241,900 Shares redeemed (9)(10) (902,862) (15,771,477) (861,447) (14,432,704) (8,370) (162,102) (220,088) (3,918,465) -------- ------------ -------- ------------ ------ --------- -------- ----------- Net increase (decrease) (469,758) $ (8,289,391) (492,579) $ (8,294,348) (7,517) $(146,282) (163,273) $(2,930,664) ======== ============ ======== ============ ====== ========= ======== =========== Value Fund ---------------------------------------------- Class Z ---------------------------------------------- For the For the year ended year ended September 30, 2007 September 30, 2006 ---------------------- ---------------------- Shares Amount Shares Amount -------- ------------ -------- ------------ Shares sold............ 509,315 $ 9,851,572 327,401 $ 5,980,931 Reinvested dividends... 161,535 2,988,389 75,381 1,333,483 Shares redeemed........ (128,127) (2,450,744) (158,366) (2,868,969) -------- ------------ -------- ------------ Net increase (decrease) 542,723 $ 10,389,217 244,416 $ 4,445,445 ======== ============ ======== ============
- -------- (9)For the year ended September 30, 2007, includes automatic conversion of 7,899 shares of Class C shares in the amount of $138,746 to 7,473 shares of Class A shares in the amount of $138,746. (10)For the year ended September 30, 2006, includes automatic conversion of 3,114 shares of Class C shares in the amount of $38,164 to 3,019 shares of Class A shares in the amount of $38,164.
Disciplined Growth Fund# -------------------------------------------------------------------------------------------- Class A Class B ---------------------------------------------- -------------------------------------------- For the For the For the For the year ended year ended year ended year ended September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 ---------------------- ---------------------- --------------------- --------------------- Shares Amount Shares Amount Shares Amount Shares Amount -------- ------------ --------- ----------- -------- ----------- -------- ----------- Shares sold (1)(2)..... 532,983 $ 7,889,774 1,402,693 $18,992,948 24,300 $ 356,197 78,337 $ 1,037,524 Reinvested dividends... -- -- 3,627 44,146 -- -- 109 1,276 Shares redeemed (1)(2). (776,777) (11,139,424) (635,487) (8,323,021) (422,344) (5,886,295) (666,910) (8,467,051) -------- ------------ --------- ----------- -------- ----------- -------- ----------- Net increase (decrease) (243,794) $ (3,249,650) 770,833 $10,714,073 (398,044) $(5,530,098) (588,464) $(7,428,251) ======== ============ ========= =========== ======== =========== ======== =========== Disciplined Growth Fund# ---------------------------------------------- Class C ---------------------------------------------- For the For the year ended year ended September 30, 2007 September 30, 2006 ---------------------- ---------------------- Shares Amount Shares Amount -------- ------------ --------- ----------- Shares sold............ 158,305 $ 2,312,884 1,260,574 $16,302,699 Reinvested dividends... -- -- 105 1,242 Shares redeemed........ (559,493) (7,777,003) (349,343) (4,349,453) -------- ------------ --------- ----------- Net increase (decrease) (401,188) $ (5,464,119) 911,336 $11,954,488 ======== ============ ========= ===========
- -------- (1)For the year ended September 30, 2007, includes automatic conversion of 285,157 shares of Class B shares in the amount of $3,980,961 to 273,229 shares of Class A shares in the amount of $3,980,961. (2)For the year ended September 30, 2006, includes automatic conversion of 239,315 shares of Class B shares in the amount of $3,094,224 to 230,195 shares of Class A shares in the amount of $3,094,224. # See Note 1 85 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued)
International Small-Cap Fund ------------------------------------------------------------------------------------ Class A Class B -------------------------------------------- -------------------------------------- For the For the For the period May 2, 2006@ For the period May 2, 2006@ year ended through year ended through September 30, 2007 September 30, 2006 September 30, 2007 September 30, 2006 -------------------- ---------------------- ------------------ ------------------ Shares Amount Shares Amount Shares Amount Shares Amount ------- ----------- --------- ----------- ------- --------- ------ -------- Shares sold............ 335,947 $ 4,376,150 1,979,431 $24,347,088 43,182 $ 571,843 53,478 $612,219 Reinvested dividends... -- -- -- -- -- -- -- -- Shares redeemed (1)(2). (83,528) (1,082,480) (28,793) (311,514) (11,022) (145,437) (557) (6,051) ------- ----------- --------- ----------- ------- --------- ------ -------- Net increase (decrease) 252,419 $ 3,293,670 1,950,638 $24,035,574 32,160 $ 426,406 52,921 $606,168 ======= =========== ========= =========== ======= ========= ====== ======== International Small-Cap Fund -------------------------------------------- Class C -------------------------------------------- For the For the period May 2, 2006@ year ended through September 30, 2007 September 30, 2006 -------------------- ---------------------- Shares Amount Shares Amount ------- ----------- --------- ----------- Shares sold............ 152,986 $ 2,062,450 313,677 $ 3,605,692 Reinvested dividends... -- -- -- -- Shares redeemed (1).... (72,183) (878,788) (8,463) (93,043) ------- ----------- --------- ----------- Net increase (decrease) 80,803 $ 1,183,662 305,214 $ 3,512,649 ======= =========== ========= ===========
- -------- (1)For the year ended September 30, 2007, net of redemption fees of $1,504, $47, and $218 for Class A, Class B, and Class C shares, respectively. (2)For the year ended September 30, 2007, includes automatic conversion of 6,170 shares of Class B shares in the amount of $82,165 to 6,131 shares of Class A shares in the amount of $82,165. @ Commencement of operations Note 9. Line of Credit The AIG SunAmerica Family of Mutual Funds has established a $75 million committed and $50 million uncommitted lines of credit with State Street Bank and Trust Company, the Funds' custodian. Interest is currently payable at the Federal Funds Rate plus 50 basis points on the committed line and State Street Bank and Trust Company's discretionary bid rate on the uncommitted line of credit. There is also a commitment fee of 10 basis points per annum on the daily unused portion of the committed line of credit which is included in other expenses on the Statement of Operations. Borrowings under the line of credit will commence when the respective Fund's cash shortfall exceeds $100,000. For the year ended September 30, 2007, the following Funds had borrowings:
Weighted Days Interest Average Debt Average Fund Outstanding Charges Utilized Interest - ---- ----------- -------- ------------ -------- Blue Chip Growth.... 1 $ 56 $ 346,258 5.81% Growth and Income... 14 1,266 558,120 5.83 Balanced Assets..... 8 244 190,065 5.77 International Equity 49 5,240 666,585 5.78 Disciplined Growth.. 111 19,732 1,111,675 5.77
At September 30, 2007, there were no borrowings outstanding. Note 10. Interfund Lending Agreement Pursuant to exemptive relief granted by the SEC, the Funds are permitted to participate in an interfund lending program among investment companies advised by AIG SunAmerica or an affiliate. The interfund lending program allows the participating Funds to borrow money from and loan money to each other for temporary or emergency purposes. An interfund loan will be made under this facility only if the participating Funds receive a more favorable interest rate than would otherwise be available from a typical bank for a comparable transaction. For the year ended September 30, 2007, none of the Funds participated in this program. 86 SunAmerica Equity Funds NOTES TO FINANCIAL STATEMENTS -- September 30, 2007 -- (continued) Note 11. Trustees Retirement Plan The Trustees of the SunAmerica Equity Funds have adopted the AIG SunAmerica Disinterested Trustees' and Directors' Retirement Plan (the "Retirement Plan") effective January 1, 1993, as amended December 9, 2006, for the unaffiliated Trustees. The Retirement Plan provides generally that an unaffiliated Trustee may become a participant ("Participant") in the Retirement Plan if he or she has at least 10 years of consecutive service as a Disinterested Trustee of any of the adopting AIG SunAmerica mutual funds (the "Adopting Funds") or has attained the age of 60 while a Trustee and completed five (5) consecutive years of service as a Trustee of any Adopting Fund (an "Eligible Trustee"). Pursuant to the Retirement Plan, an Eligible Trustee may receive benefits upon (i) his or her death or disability while a Trustee or (ii) the termination of his or her tenure as a Trustee, other than removal for cause from each of the Adopting Funds with respect to which he or she is an Eligible Trustee. As of each of the first 10 birthdays after becoming a Participant and on which he or she is both a Trustee and Participant, each Eligible Trustee will be credited with an amount equal to 50% of his or her regular fees (excluding committee fees) for services as a Disinterested Trustee of each Adopting Fund for the calendar year in which such birthday occurs. In addition, an amount equal to 8.50% of any amounts credited under the preceding statement during prior years is added to each Eligible Trustee's account. The rights of any Participant to benefits under the Retirement Plan shall be an unsecured claim against the assets of the Adopting Funds. An Eligible Trustee may receive any benefits payable under the Retirement Plan, at his or her election, either in one lump sum or in up to 15 annual installments. Any undistributed amounts shall continue to accrue interest at 8.50%. The following amounts for the Retirement Plan Liabilities are included in the Trustee fees and expenses payable line on the Statement of Assets and Liabilities and the amounts for the Retirement Plan Expenses are included in the Trustees' fees and expenses line on the Statement of Operations.
Retirement Plan Retirement Plan Retirement Plan Liability Expense Payments --------------- --------------- --------------- Fund As of September 30, 2007 - ---- ----------------------------------------------- Blue Chip Growth.............. $28,288 $1,062 $2,147 Growth Opportunities.......... 24,322 1,058 1,589 New Century................... 49,259 1,283 3,418 Growth and Income............. 38,051 1,722 2,250 Balanced Assets............... 77,064 2,395 6,236 International Equity.......... 18,248 1,636 1,153 Value......................... 32,260 3,386 1,836 Disciplined Growth............ 10,751 760 546 International Small-Cap Equity 250 250 --
Note 12. Investment Concentration Some of the Funds may invest internationally, including in "emerging market" countries. These securities may be denominated in currencies other than U.S. dollars. While investing internationally may reduce your risk by increasing the diversification of your investment, the value of your investment may be affected by fluctuating currency values, changing local and regional economic, political and social conditions, and greater market volatility. In addition, foreign securities may not be as liquid as domestic securities. These risks are primary risks of the International Equity Fund and International Small-Cap Fund. At September 30, 2007, the International Equity Fund and International Small-Cap Fund had approximately 16% and 28%, respectively, of their net assets invested in equity securities of companies domiciled in Japan. Note 13. Other Information The matter related to AIG's settlement with the Securities and Exchange Commission (the "Commission") and other governmental authorities that was reported in recent shareholder reports has been resolved. With respect to such matter, in September 2007, the Commission issued a permanent exemptive order (the "Order") pursuant to Section 9(c) of the 1940 Act, to AIG and certain affiliated persons of AIG, including AIG SunAmerica, AIGGIC and SACS. The Order permits each entity to continue to provide advisory or distribution services to the Funds, as applicable. There has been no adverse impact to the Funds or the Funds' shareholders. 87 SunAmerica Equity Funds REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Trustees of SunAmerica Equity Funds We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of SunAmerica Balanced Assets Fund, SunAmerica Blue Chip Growth Fund, SunAmerica Growth and Income Fund, SunAmerica Growth Opportunities Fund, SunAmerica International Equity Fund, and SunAmerica New Century Fund as of September 30, 2007, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. Additionally, we have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of SunAmerica Value Fund, and SunAmerica Disciplined Growth Fund (formerly the SunAmerica Tax Managed Equity Fund) as of September 30, 2007, and the related statements of operations, the statements of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the four years in the period then ended. Additionally, we have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the SunAmerica International Small-Cap Fund as of September 30, 2007, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for the each of the periods presented through October 31, 2003 for the SunAmerica Value Fund and SunAmerica Disciplined Growth Fund were audited by other auditors whose report dated December 17, 2003, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2007, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the SunAmerica Balanced Assets Fund, SunAmerica Blue Chip Growth Fund, SunAmerica Growth and Income Fund, SunAmerica Growth Opportunities Fund, SunAmerica International Equity Fund, and SunAmerica New Century Fund, as of September 30, 2007, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the SunAmerica Value Fund and SunAmerica Disciplined Growth Fund as of September 30, 2007, the results of their operations, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the SunAmerica International Small-Cap Fund as of September 30, 2007, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the two years in the period then ended, in conformity with U.S. generally accepted accounting principles. Houston, Texas November 21, 2007 [LOGO] Ernst & Young LLP 88 SunAmerica Equity Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2007 -- (unaudited) Approval of the Investment Advisory and Management Agreement and Subadvisory Agreement The Board, including the Disinterested Trustees who are not interested persons of SunAmerica Equity Funds (the "Trust") or its separate series (each a "Fund" and collectively, the "Funds"), AIG SunAmerica or AIGGIC, approved the continuation of the Investment Advisory and Management Agreement between the Fund and AIG SunAmerica (the "Advisory Agreement") for a one-year period ending August 31, 2008 at a meeting held on August 27, 2007. At this same meeting, the Board also approved the continuation of the Subadvisory Agreement, as amended,/1/ between AIG SunAmerica and AIGGIC (the "Subadvisory Agreement") with respect to the International Equity Fund and the International Small-Cap Fund for a one-year period ending August 31, 2008. In accordance with Section 15(c) of the 1940 Act, the Board requested and the Adviser provided materials relating to the Board's consideration of whether to approve the continuation of the Advisory Agreement and Subadvisory Agreement. In determining whether to approve the continuation of the Advisory Agreement and Subadvisory Agreement, the Board, including Disinterested Trustees, considered the following information: Nature, Extent and Quality of Services Provided by the Adviser and Subadviser. The Board, including the Disinterested Trustees, considered the nature, quality and extent of services to be provided by AIG SunAmerica and AIGGIC. 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 AIG SunAmerica would provide office space, accounting, legal, and compliance, clerical and administrative services and has authorized any of its officers and employees, if elected, to serve as officers or trustees of the Funds without compensation. Finally, the Board noted that AIG SunAmerica is responsible for monitoring and reviewing the activities of affiliated and unaffiliated third-party service providers, including AIGGIC. In connection with the services provided by AIG SunAmerica, the Board analyzed the structure and duties of AIG SunAmerica's fund administration, accounting, 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 AIG SunAmerica and concluded, based on their experience and interaction with AIG SunAmerica, that: (i) AIG SunAmerica is able to retain quality portfolio managers and other personnel; (ii) AIG SunAmerica exhibited a high level of diligence and attention to detail in carrying out its advisory responsibilities under the Advisory Agreement; (iii) AIG SunAmerica had been responsive to requests of the Board; and (iv) AIG SunAmerica had 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 AIG 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 AIG SunAmerica's experience in providing management and investment advisory and administrative services to advisory clients and noted that as of July 31, 2007, AIG SunAmerica managed, advised an/or administered approximately $56.2 billion in assets. The Board also considered AIG SunAmerica's code of ethics, and that it has developed internal procedures, adopted by the Board, for monitoring compliance with the investment objectives, policies and restrictions of the Funds as set forth in the Fund's prospectus. Additionally, the Board considered AIG SunAmerica's compliance and regulatory history, and noted that with respect to AIG's settlement with the Commission and other governmental authorities, AIG SunAmerica applied for a permanent exemptive order granting relief from the provisions of Section 9(a) of the 1940 Act./2/ - -------- /1/ The Subadvisory Agreement was amended in order to comply with the requirements of the exemptive rules relating to subadvisory affiliates (Rules 17a-10, 10f-3, 12d3-1 and 17e-1 under the 1940 Act) so that the Fund can rely on these provisions. These provisions permit certain exemptions for transactions with subadvisory affiliates. /2/ Please see Note 13 to the Financial Statements contained in this annual report for additional information regarding final resolution of this matter. 89 SunAmerica Equity Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2007 -- (unaudited) (continued) With respect to the International Equity Fund and the International Small-Cap Fund, for which AIG SunAmerica has delegated daily investment management responsibilities to AIGGIC, the Board also considered the nature, quality and extent of subadvisory services provided by AIGGIC. The Board observed that AIGGIC is responsible for providing investment management services, including investment research, advice and supervision, and determining which securities will be purchased or sold by each of the International Equity Fund and International Small-Cap Fund. The Board reviewed AIGGIC'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 International Equity Fund and International Small-Cap Fund and concluded, based on their experience with AIGGIC, that: (i) AIGGIC is able to retain high quality portfolio managers and other investment personnel; (ii) AIGGIC exhibited a high level of diligence and attention to detail in carrying out its responsibilities under the Subadvisory Agreement; and (iii) AIGGIC had been responsive to requests of the Board and of AIG SunAmerica. The Board considered that AIGGIC has developed internal policies and procedures for monitoring compliance with the investment objectives, policies and restrictions of the International Equity Fund and the International Small-Cap Fund as set forth in the Prospectus. The Board also considered AIGGIC's code of ethics, compliance and regulatory history, and noted that AIGGIC also applied for a permanent exemptive order from the provisions of Section 9(a) of the 1940 Act with respect to AIG's settlement with the SEC and other governmental authorities./1/ The Board concluded that the nature and extent of services to be provided by AIGGIC under the Subadvisory Agreement were reasonable and appropriate in relation to the subadvisory fees and that the quality of services continues to be high. Investment Performance. The Board, including the Disinterested Trustees, also considered the investment performance of AIG SunAmerica and AIGGIC with respect to the Funds. In connection with its review, the Board received and reviewed information regarding the investment performance of the Funds as compared to each Fund's peer group ("Peer Group") and/or peer universe ("Peer Universe") as determined by Lipper, Inc. ("Lipper") and to an appropriate index or combination of indices. The Board also noted that it regularly reviews the performance of the Funds throughout the year. In preparation for the August 27, 2007 meeting, the Board was provided with reports independently prepared by Lipper. Based on the Lipper reports, the Board reviewed each Fund's annualized total returns for the prior one-, two-, three-, four-, five- and ten-year periods ended June 30, 2007. The Board also received a report prepared by AIG SunAmerica that detailed the Funds' performance for the three- and six-month periods ended June 30, 2007. Specifically, the Board considered that the SunAmerica Disciplined Growth Fund and SunAmerica International Equity Fund each ranked in the fifth quintile of its respective Peer Group during the one-year period ended June 30, 2007 but had also ranked in the first and third quintile for the prior three-year period, and in the first and second quintile for the prior five-year period, respectively. With respect to the SunAmerica Disciplined Growth Fund, the Board noted the recent change to its investment goal, principal investment strategy and principal investment techniques and considered that the Fund's performance has improved since these changes were implemented noting that the Fund ranked in the third quintile and outperformed its index for the prior three-month period. Additionally, the Board considered that while SunAmerica International Small-Cap Fund has ranked in the fourth quintile for the prior one-year period, it has demonstrated improved performance over shorter periods noting that the Fund ranked in the third quintile and outperformed its index for the prior three-month period. The Board further considered that the SunAmerica Growth Opportunities Fund had demonstrated improved performance and ranked in the first quintile of its Peer Group for the prior one-year period and that the SunAmerica Balanced Assets Fund had improved performance during each of the one-, two- and three-year periods and ranked in the third quintile for such periods. With respect to the SunAmerica New Century Fund and SunAmerica Growth Opportunities Fund the Board observed that both Funds ranked in the third quintile for the three- and five-year periods, but that the SunAmerica New Century Fund ranked in the first quintile and the SunAmerica Growth Opportunities Fund in the second quintile for the prior one-year periods. Additionally, the Board observed that the SunAmerica Value Fund ranked in the third quintile for the prior one- and three-year periods but that it provided strong returns over the prior five- and ten-year periods. With respect to the SunAmerica Blue Chip Growth Fund, the Board observed that its performance had improved as compared to its three- and five-year periods and that it ranked in the second quintile for the prior one-year period. The Board acknowledged AIG SunAmerica's commitment to enhance the Investments Department, including the addition of new analysts and changes to portfolio managers where necessary in prior years and noted that these measures have appeared to generally 90 SunAmerica Equity Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2007 -- (unaudited) (continued) result in improved performance. The Board noted, however, that certain Funds continued to underperform and that the Board would continue to monitor performance on an on going basis and in connection with its consideration of the advisory agreements. Consideration of the Management Fees and Subadvisory Fees and the Cost of the Services and Profits to be Realized by the Adviser, Subadvisers and their Affiliates from the Relationship with the Funds. The Board, including the Disinterested Trustees, received and reviewed information regarding the fees to be paid by the Funds to AIG SunAmerica pursuant to the Advisory Agreement and the fees paid by AIG SunAmerica to AIGGIC pursuant to the Subadvisory Agreement. 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 AIG SunAmerica, AIGGIC 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 Lipper. The reports showed comparative fee information for each Fund's Peer Group and/or Peer Universe. In considering the reasonableness of the management fee to be paid by each Fund to AIG SunAmerica, the Board reviewed a number of expense comparisons, including: (i) contractual and actual advisory 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 AIG SunAmerica with respect to each class of the SunAmerica International Equity Fund, SunAmerica Value Fund, SunAmerica Disciplined Growth Fund and SunAmerica International Small-Cap Fund, as well as the Class I shares of the SunAmerica Blue Chip Growth Fund, SunAmerica Growth Opportunities Fund, SunAmerica Growth and Income Fund and SunAmerica Balanced Assets Fund. The Board compared each Fund's net expense ratio to those of other funds within its Peer Group and/or Peer Universe as a guide to help assess the reasonableness of the Fund's management fee. 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 Lipper as a whole was useful in assessing whether AIG SunAmerica was providing services at a cost that was competitive with other, similar funds. The Board also considered advisory fees received by AIG SunAmerica with respect to other mutual funds and accounts with similar investment strategies to the Funds. The Board noted the advisory fee paid by the Funds were reasonable as compared to the fees AIG 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 AIG SunAmerica to AIGGIC pursuant to the Subadvisory Agreement. To assist in analyzing the reasonableness of the subadvisory fees, the Board received a report prepared independently by Lipper. The report showed comparative fee information of each Fund's Peer Group that the Trustees used as a guide to help assess the reasonableness of the subadvisory fees. The Trustees noted that Peer Group information as a whole was useful in assessing whether AIGGIC was providing services at a cost that was competitive with other similar funds. The Trustees also considered that the subadvisory fees are paid by AIG 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 AIG SunAmerica and the amount of the management fees which it retained. The Board also considered advisory fees received by AIGGIC with respect to other mutual funds and accounts with similar investment strategies to the SunAmerica International Equity Fund and SunAmerica International Small-Cap Fund. The Board noted that the subadvisory fees paid by AIG SunAmerica to AIGGIC were reasonable as compared to fees AIGGIC receives for other mutual funds and accounts for which it serves as adviser or subadviser. In addition, the Board received and reviewed financial statements relating to AIG SunAmerica's financial condition and profitability with respect to the services it provided the Funds and considered how profit margins could affect AIG 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 AIG SunAmerica and its affiliates that provide services to the Funds. In particular, the Board considered the profitability of AIG SunAmerica under the Advisory Agreement, and considered the profitability of AIG SunAmerica's affiliates under the Rule 12b-1 Plans, Service Agreements, and Administrative and Shareholder Agreements. Additionally, the Board considered whether AIG SunAmerica, AIGGIC and its affiliates received any indirect benefits from the relationship with the Funds. Specifically, the Board observed that AIG Federal Savings Bank, an affiliate of AIG SunAmerica and AIGGIC, serves as custodian with respect to certain shareholder retirement accounts that are administered by AIG SunAmerica and receives a fee payable by the qualifying shareholders. 91 SunAmerica Equity Funds APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2007 -- (unaudited) (continued) The Board also reviewed AIGGIC's financial statements and considered whether AIGGIC had the financial resources necessary to attract and retain high quality investment management personnel and to continue to provide the high quality of services that it had provided to the International Equity Fund and International Small-Cap Fund to date. The Board concluded that AIG SunAmerica and AIGGIC had the financial resources necessary to perform their obligations under the Advisory Agreement and Subadvisory Agreement and to continue to provide the Funds with the high quality services that they had provided in the past. The Board also concluded that the management fee and subadvisory fees were reasonable in light of the factors discussed above. Economies of Scale. The Board, including the Disinterested 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 the Funds in the AIG SunAmerica complex share common resources and, as a result, an increase in the overall size of the complex could permit each fund to incur lower expenses than they otherwise would achieve as stand-alone entities. The Board also considered the anticipated efficiencies in the processes of AIG SunAmerica as it adds labor and capital to expand the scale of operations. The Board also took into account that the SunAmerica Blue Chip Growth Fund, SunAmerica Growth Opportunities Fund, SunAmerica New Century Fund, SunAmerica Balanced Assets Fund, SunAmerica Growth and Income Fund, and SunAmerica Value Fund 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, with the exception of the New Century Fund, AIG SunAmerica has agreed to contractually cap the total annual operating expenses of one or more classes of the Funds, at certain levels. The Board observed that those expense caps benefited shareholders by keeping total fees down 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 did not review specific information regarding whether there have been economies of scale with respect to AIGGIC's 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 Advisory Agreement and Subadvisory Agreement, the Board also received information regarding AIG SunAmerica's and AIGGIC's brokerage and soft dollar practices. The Board considered that AIG SunAmerica and AIGGIC are responsible for decisions to buy and sell securities for the portfolios they manage, selection of broker-dealers and negotiation of commission rates. The Board noted that they receive reports from AIG SunAmerica and from an independent third party which included information on brokerage commissions and execution throughout the year and that commissions paid had generally been reasonable and the quality of brokerage execution had generally been high. The Board also considered the benefits AIG SunAmerica and AIGGIC derive from their soft dollar arrangements, including arrangement under which brokers provide brokerage and/or research services to AIG SunAmerica and/or AIGGIC in return for allocating brokerage. Conclusion. After a full and complete discussion, the Board approved the Advisory Agreement and the Subadvisory Agreement with respect to International Equity Fund and International Small-Cap Fund, each for a one-year period ending August 31, 2008. Based upon their evaluation of all these factors in their totality, the Board, including the Disinterested Trustees, was satisfied that the terms of the Advisory Agreement and Subadvisory Agreement 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 Agreement, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together. The Disinterested Trustees were also assisted by the advice of independent counsel in making this determination. 92 SunAmerica Equity Funds TRUSTEE AND OFFICER INFORMATION -- September 30, 2007 -- (unaudited) The following table contains information regarding the Trustees and Officers that oversee operations of the Funds and other investment companies within the Fund complex.
Number of Position Term of Portfolios in Name, Held With Office and Fund Complex Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2) - ---------------------- ---------- -------------- ----------------------------- ------------- ----------------------------- Disinterested Trustees Jeffrey S. Burum Trustee 2004-Present Founder and CEO of 42 None DOB: February 27, 1963 Sourthern California Development Corporation/ National Housing Development Corporation (1992 to present); Founder, Owner and Partner of Colonies Crossroads, Inc. (1999 to present); Owner and Managing Member of Diversified Pacific Development Group LLC (1998 to present). Dr. Judith L. Craven Trustee 2001-Present Retired. 89 Director, Belo Corp. (1992 to DOB: October 6, 1945 present); Director, Sysco Corp. (1996 to present); Director, Luby's, Inc. (1998 to present): Director, University of Texas Board of Regents (2001-present). William F. Devin Trustee 2001-Present Retired. 90 Director, Boston Options DOB: December 30, 1938 Exchange (1985-present). Samuel M. Eisenstat Chairman 1986-Present Attorney, solo practitioner. 51 Director, North European Oil DOB: March 7, 1940 of the Royalty Trust. Board Stephen J. Gutman Trustee 1986-Present Senior Associate, Corcoran 51 None DOB: May 10, 1943 Group (Real Estate) (2003 to present); President and Member of Managing Directors, Beau Brummell- Soho LLC (licensing of menswear specialty retailing and other activities) (June 1988 to present). William J. Shea Trustee 2004-Present Managing Partner, DLB 51 Director, Boston Private DOB: February 9, 1948 Capital, LLC (Private Equity) Financial Holdings (October (2006-Present) President and 2004 to present). CEO, Conseco, Inc. (Financial Services) (2001-2004); Chairman of the Board of Centennial Technologies, Inc. (1998 to 2001). Interested Trustee Peter A. Harbeck(3) Trustee 1995-Present President, CEO and Director, 98 None DOB: January 23, 1954 AIG SunAmerica. (August 1995 to present); Director, SACS (August 1993 to present) President and CEO, AIG Advisor Group, Inc. (June 2004 to present).
93 SunAmerica Equity Funds TRUSTEE AND OFFICER INFORMATION -- September 30, 2007 -- (unaudited) (continued)
Number of Position Term of Portfolios in Name, Held With Office and Fund Complex Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2) - ---------------------- ---------- -------------- ----------------------------- ------------- ------------------- Officers Vincent M. Marra President 2004-Present Senior Vice President, AIG N/A N/A DOB: May 28, 1950 SunAmerica (February 2003 to present); Chief Administrative Officer, Chief Operating Officer and Chief Financial Officer, Carret & Co. LLC (June 2002 to February 2003); President and Chief Operating Officer, Bowne Digital Solutions (1999 to May 2002). Donna M. Handel Treasurer 2002-Present Senior Vice President, AIG N/A N/A DOB: June 25, 1966 SunAmerica (December 2004 to present); Vice President, AIG SunAmerica (1997 to December 2004). Gregory N. Bressler Secretary September Senior Vice President and N/A N/A DOB: November 17, 1966 and Chief 2005 to General Counsel, AIG Legal Present SunAmerica (June 2005 to Officer present); Vice President and Director of U.S. Asset Management Compliance, Goldman Sachs Asset Management L.P. (June 2004 to June 2005); Deputy General Counsel, Credit Suisse Asset Management LLC (June 2002 to June 2004); Counsel, Credit Suisse Asset Management LLC (January 2000 to June 2002). James Nichols Vice 2006-present Director, President and CEO, N/A N/A DOB: April 7, 1966 President SACS (July 2006 to present); Senior Vice President, SACS (March 2002 to July 2006); Vice President, AIG SunAmerica (1995 to March 2002). Cynthia Gibbons Chief 2005-present Vice President, AIG N/A N/A DOB: December 6, 1967 Compliance SunAmerica (August 2002 to Officer present); Securities Compliance Manager, American General Investment Management, (June 2000 to August 2002).
94 SunAmerica Equity Funds TRUSTEE AND OFFICER INFORMATION -- September 30, 2007 -- (unaudited) (continued)
Number of Position Term of Portfolios in Name, Held With Office and Fund Complex Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships Date of Birth* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2) - ---------------------- ---------- -------------- --------------------------------- ------------- ------------------- Nori L. Gabert Vice 2005-present Vice President and Deputy N/A N/A DOB: August 15, 1953 President General Counsel, AIG and SunAmerica (2001 to present); Assistant Vice President and Secretary, Secretary VALIC Company I and VALIC Company II (2000 to present); Formerly, Associate General Counsel, American General Corporation, (1997 to 2001). Timothy Pettee Vice 2004- Chief Investment Officer, AIG N/A N/A DOB: April 7, 1958 President present SunAmerica (2003-present); Executive Vice President and Global Director of Research Schroder Investment Management (2000-2002); Director of Research U.S. Trust Co. (1998-2000). Gregory R. Kingston Vice 2002-present Vice President, AIG N/A N/A DOB: January 18, 1966 President SunAmerica (2001-present); and Formerly, Vice President, Assistant American General Investment Treasurer Management, L.P. (1999-2001) Matthew J. Hackethal Anti- 2006-present CCO, AIG SunAmerica (2006 to N/A N/A DOB: December 31, 1971 Money present); Vice President, Credits Laundering Suisse Asset Management (2001 Compliance to 2006); CCO, Credit Suisse Officer Alternative Funds (2005 to 2006); CCO, Credit Suisse Asset Management Securities, Inc. (2004 to 2005)
- -------- * The business address for each Trustee is the Harborside Financial Center, 3200 Plaza 5, Jersey City, NJ 07311-4992. (1) The "Fund Complex" means two or more registered investment companies that hold themselves out to investors as related companies for purposes of investment services or have a common investment advisor that is an affiliated person of the Advisor. The "Fund Complex" includes the SunAmerica Money Market Funds (2 funds), SunAmerica Equity Funds (9 funds), SunAmerica Income Funds (5 funds), SunAmerica Focused Series, Inc. (18 portfolios), SunAmerica Focused Alpha Growth Fund, Inc. (1 fund), SunAmerica Focused Alpha Large-Cap Fund, Inc. (1 fund), Anchor Series Trust (9 portfolios), SunAmerica Senior Floating Rate Fund, Inc. (1 fund), SunAmerica Series Trust (35 portfolios), VALIC Company I (32 portfolios), VALIC Company II (15 funds), Seasons Series Trust (24 portfolios) and AIG Series Trust (5 portfolios). AIG Strategic Hedge Fund of Funds (1 fund) and Brazos Mutual Funds (4 funds). (2) Directorships of companies required to report to the SEC under the Securities Exchange Act of 1934 (i.e. "public companies") or other investment companies registered under the 1940 Act. (3) Interested Trustee, as defined within the 1940 Act, because he is an officer and a director of the Adviser and a director of the principal underwriter of the Trust. (4) Trustees serve until their successors are duly elected and qualified, subject to the Trustee's Retirement Plan as discussed in Note 11 of the financial statements. Each officer will hold office for an indefinite term, until the date he or she resigns or retires or until his/her successor is duly elected and qualifies. Additional information concerning the Trustees is contained in the Statement of Additional Information which is available, without charge, by calling (800) 858-8850. 95 SunAmerica Equity Funds SHAREHOLDERS TAX INFORMATION -- (unaudited) Certain tax information regarding the SunAmerica Equity Funds is required to be provided to the shareholders based upon each Fund's income and distributions for the taxable year ended September 30, 2007. The information and distributions reported herein may differ from the information and distributions taxable to the shareholders for the calendar year ending December 31, 2007. The information necessary to complete your tax returns will be included with your Form 1099-DIV to be received under separate cover in January 2008. During the year ended September 30, 2007, the Portfolios paid the following long-term capital gains dividends along with the percentage of ordinary income dividends that qualified for the 70% dividends received deduction for corporations:
Net Net Net Long- Qualifying % for the Total Investment Short-term Term 70% Dividends Fund Dividends Income Capital Gains* Capital Gains Received Deductions - ---- --------- ---------- -------------- ------------- -------------------- Blue Chip Growth Class A....... $ -- $ -- $ -- $ -- -- % Blue Chip Growth Class B....... -- -- -- -- -- Blue Chip Growth Class C....... -- -- -- -- -- Blue Chip Growth Class I....... -- -- -- -- -- Growth Opportunities Class A... -- -- -- -- -- Growth Opportunities Class B... -- -- -- -- -- Growth Opportunities Class C... -- -- -- -- -- Growth Opportunities Class I... -- -- -- -- -- New Century Class A............ -- -- -- -- -- New Century Class B............ -- -- -- -- -- New Century Class C............ -- -- -- -- -- Growth and Income Class A...... -- -- -- -- -- Growth and Income Class B...... -- -- -- -- -- Growth and Income Class C...... -- -- -- -- -- Growth and Income Class I...... -- -- -- -- -- Balanced Assets Class A........ 0.24 0.24 -- -- 68.65 Balanced Assets Class B........ 0.12 0.12 -- -- 68.65 Balanced Assets Class C........ 0.12 0.12 -- -- 68.65 Balanced Assets Class I........ 0.29 0.29 -- -- 68.65 International Equity Class A... -- -- -- -- -- International Equity Class B... -- -- -- -- -- International Equity Class C... -- -- -- -- -- International Equity Class I... -- -- -- -- -- Value Class A.................. 2.20 0.16 0.68 1.36 60.02 Value Class B.................. 2.09 0.05 0.68 1.36 60.02 Value Class C.................. 2.09 0.05 0.68 1.36 60.02 Value Class I.................. 2.22 0.18 0.68 1.36 60.02 Value Class Z.................. 2.26 0.22 0.68 1.36 60.02 Disciplined Growth Class A..... -- -- -- -- -- Disciplined Growth Class B..... -- -- -- -- -- Disciplined Growth Class C..... -- -- -- -- -- International Small-Cap Class A -- -- -- -- -- International Small-Cap Class B -- -- -- -- -- International Small-Cap Class C -- -- -- -- --
- -------- * Short-term capital gains are treated as ordinary income for tax purposes. The International Equity Fund and International Small-Cap Fund intend to make an election under Internal Revenue Code Section 853 to pass through foreign taxes paid by the Fund to its shareholders. The total amount of foreign taxes passed through to the shareholders for the fiscal year ended September 30, 2007 was $242,623 and $43,120, respectively. The gross foreign source income for the information reporting is $2,128,037 and $396,793, respectively For the year ended September 30, 2007, certain dividends paid by the following funds may be subject to a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid during the fiscal year, the following represents the maximum amount that may be considered qualified dividend income:
Fund Income ---- ---------- Balanced Assets $2,250,950 Value.......... 9,883,623
96 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) As required by the Securities and Exchange Commission, the following graphs compare the performance of a $10,000 investment in the SunAmerica Equity Funds' portfolios to a similar investment in an index. Please note that "inception", as used herein, reflects the date on which a specific class of shares commenced operations. It is important to note that the SunAmerica Equity Funds are professionally managed mutual funds, while the indices are not available for investment and are unmanaged. The comparison is shown for illustrative purposes only. The graphs present the performance of the largest class of that particular Fund. The performance of the other classes will vary based upon the difference in sales charges and fees assessed to shareholders of that class. 97 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica Blue Chip Growth Fund For the annual period ended September 30, 2007, the SunAmerica Blue Chip Growth Fund Class A returned 19.44% (before maximum sales charge), outperforming its Russell 1000 Growth Index* benchmark, which returned 19.35% during the period. Most of the major equity indices registered positive gains for the annual period, led higher by growth stocks. In terms of industry groups, Energy (4.59% weight) was the top-performing group in the Russell 1000 Growth Index, appreciating 49.49%, followed by Materials (3.25% weight) which returned 46.19%. On the other hand, two of the largest constituents in the Russell 1000 Growth Index, Consumer Discretionary (15.38% weight) and Healthcare (17.04% weight) increased a more modest 8.91% and 10.87%, respectively. Information Technology, the index's largest component (24.31% weight), returned 25.59% for the annual period. With respect to stock sector weightings versus the portfolio's benchmark, the combination of stock selection in the Industrial, Energy, Healthcare and Information Technology groups, as well as a Consumer Discretionary underweight, assisted performance. Conversely, factors that hindered results included security selection in the Consumer Discretionary and Consumer Staples sectors, overweight exposure to the Financial group, and a Materials underweight. Top-performing investments for the quarter included several technology companies including Apple Inc., Cisco Systems, Google Inc. Class A, and International Business Machines Corp. Schlumberger Ltd., an oil services company, was another top contributor. Portfolio detractors included Motorola Inc., a provider of integrated telecommunications solutions; Amgen Inc., a developer of human therapeutics to fight hematology, cancer and infection diseases; Wesco International Inc., a distributor of electrical products; Cooper Cos., a manufacturer of specialty healthcare products; and Network Appliance, a provider of unified storage solutions for data-intensive enterprises. - -------- Past performance is no guarantee of future results. * The Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Index is a comprehensive large-cap index measuring the performance of the largest 1,000 U.S. incorporated companies. Indices are not managed and an investor cannot invest directly into an index. Securities listed may or may not be a part of current Portfolio construction. 98 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Over the past ten years, $10,000 invested in Blue Chip Growth Fund Class A shares would have increased to $13,717. The same amount invested in securities mirroring the performance of the S&P 500 Index and the Russell 1000 Growth Index would be valued at $18,893 and $14,894, respectively. [CHART] Blue Chip Russell 1000 Growth Class A/#/ S&P 500 Index Growth Index ----------------- ------------- ------------ 9/30/1997 $ 9,427 $10,000 $10,000 10/31/1997 9,175 9,666 9,630 11/30/1997 9,315 10,114 10,039 12/31/1997 9,491 10,287 10,152 1/31/1998 9,486 10,401 10,455 2/28/1998 10,252 11,150 11,242 3/31/1998 10,779 11,721 11,690 4/30/1998 11,029 11,839 11,852 5/31/1998 10,731 11,636 11,516 6/30/1998 11,216 12,108 12,221 7/31/1998 11,242 11,979 12,140 8/31/1998 9,177 10,250 10,318 9/30/1998 9,906 10,906 11,111 10/31/1998 10,508 11,792 12,004 11/30/1998 11,200 12,507 12,917 12/31/1998 12,169 13,227 14,081 1/31/1999 13,095 13,780 14,908 2/28/1999 12,552 13,352 14,227 3/31/1999 13,244 13,886 14,976 4/30/1999 13,501 14,424 14,996 5/31/1999 13,015 14,084 14,535 6/30/1999 13,930 14,865 15,553 7/31/1999 13,552 14,402 15,059 8/31/1999 13,627 14,330 15,305 9/30/1999 13,501 13,938 14,983 10/31/1999 14,496 14,819 16,115 11/30/1999 15,376 15,121 16,984 12/31/1999 17,610 16,011 18,751 1/31/2000 16,959 15,207 17,871 2/29/2000 18,042 14,919 18,745 3/31/2000 18,863 16,378 20,087 4/30/2000 17,454 15,886 19,131 5/31/2000 16,414 15,560 18,168 6/30/2000 17,629 15,943 19,544 7/31/2000 17,335 15,694 18,729 8/31/2000 19,364 16,669 20,425 9/30/2000 18,180 15,789 18,493 10/31/2000 16,783 15,722 17,618 11/30/2000 14,804 14,483 15,021 12/31/2000 15,064 14,553 14,546 1/31/2001 15,261 15,070 15,551 2/28/2001 13,548 13,696 12,911 3/31/2001 12,597 12,828 11,506 4/30/2001 13,585 13,825 12,961 5/31/2001 13,548 13,918 12,770 6/30/2001 13,124 13,579 12,474 7/31/2001 12,809 13,445 12,163 8/31/2001 11,865 12,604 11,168 9/30/2001 10,504 11,586 10,053 10/31/2001 10,848 11,807 10,581 11/30/2001 11,967 12,712 11,597 12/31/2001 11,931 12,824 11,575 1/31/2002 11,462 12,637 11,371 2/28/2002 11,082 12,393 10,899 3/31/2002 11,528 12,859 11,276 4/30/2002 10,796 12,079 10,355 5/31/2002 10,540 11,990 10,105 6/30/2002 9,698 11,136 9,170 7/31/2002 8,981 10,268 8,666 8/31/2002 8,952 10,336 8,692 9/30/2002 8,161 9,212 7,790 10/31/2002 8,725 10,023 8,505 11/30/2002 9,164 10,613 8,967 12/31/2002 8,439 9,990 8,348 1/31/2003 8,264 9,728 8,145 2/28/2003 8,227 9,582 8,108 3/31/2003 8,300 9,675 8,258 4/30/2003 8,901 10,472 8,869 5/31/2003 9,303 11,023 9,312 6/30/2003 9,376 11,164 9,440 7/31/2003 9,618 11,361 9,675 8/31/2003 9,830 11,582 9,915 9/30/2003 9,603 11,459 9,809 10/31/2003 10,321 12,107 10,360 11/30/2003 10,372 12,213 10,469 12/31/2003 10,635 12,853 10,831 1/31/2004 10,774 13,089 11,052 2/29/2004 10,855 13,271 11,122 3/31/2004 10,650 13,071 10,916 4/30/2004 10,474 12,866 10,789 5/31/2004 10,599 13,043 10,990 6/30/2004 10,774 13,296 11,127 7/31/2004 10,196 12,856 10,498 8/31/2004 10,130 12,908 10,447 9/30/2004 10,313 13,048 10,546 10/31/2004 10,452 13,247 10,710 11/30/2004 10,789 13,783 11,079 12/31/2004 11,148 14,252 11,513 1/31/2005 10,789 13,905 11,129 2/28/2005 10,833 14,197 11,248 3/31/2005 10,643 13,946 11,043 4/30/2005 10,350 13,681 10,832 5/31/2005 10,862 14,116 11,357 6/30/2005 10,767 14,137 11,315 7/31/2005 11,272 14,662 11,868 8/31/2005 11,111 14,528 11,715 9/30/2005 11,133 14,646 11,769 10/31/2005 10,987 14,402 11,654 11/30/2005 11,440 14,946 12,157 12/31/2005 11,331 14,951 12,119 1/31/2006 11,550 15,347 12,332 2/28/2006 11,440 15,389 12,312 3/31/2006 11,572 15,580 12,494 4/30/2006 11,521 15,790 12,477 5/31/2006 11,140 15,335 12,054 6/30/2006 11,031 15,356 12,007 7/31/2006 10,891 15,451 11,778 8/31/2006 11,206 15,818 12,145 9/30/2006 11,484 16,226 12,479 10/31/2006 11,806 16,755 12,918 11/30/2006 11,953 17,073 13,174 12/31/2006 11,997 17,313 13,219 1/31/2007 12,304 17,575 13,559 2/28/2007 12,041 17,231 13,304 3/31/2007 12,136 17,424 13,376 4/30/2007 12,736 18,195 14,006 5/31/2007 13,182 18,830 14,509 6/30/2007 13,036 18,518 14,293 7/31/2007 12,795 17,943 14,071 8/31/2007 13,036 18,212 14,296 9/30/2007 13,717 18,893 14,894
Class A Class B Class C++ Class I ------------------ ------------------ ------------------ ------------------ Blue Average Average Average Average Chip Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Growth Fund Return Return+ Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 12.55% 19.44% 14.51% 18.51% 17.25% 18.25% 19.79% 19.79% - -------------------------------------------------------------------------------------------- 5 Year Return 9.64% 68.07% 9.85% 61.96% 9.99% 61.00% 11.24% 70.34% - -------------------------------------------------------------------------------------------- 10 Year Return 3.21% 45.51% 3.19% 36.87% N/A N/A N/A N/A - -------------------------------------------------------------------------------------------- Since Inception* 6.75% 164.43% 8.47% 526.01% (0.24)% (2.04)% 2.66% 16.63% - --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date: Class A: 10/08/93; Class B: 03/13/85; Class C: 02/02/99; Class I: 11/16/01. # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. ++ Effective February 23, 2004, Class II shares were redesignated as Class C shares. For the 12 month period ended September 30, 2007, the SunAmerica Blue Chip Growth Class A returned 12.55% compared to 19.35% for the Russell 1000 Growth Index and 16.44% for the S&P 500 Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 99 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica Growth Opportunities Fund For the annual period ended September 30, 2007, the SunAmerica Growth Opportunities Fund Class A returned 13.32% (before maximum sales charge), trailing its benchmark, the Russell 2000 Growth Index*, which returned 18.94%. The Fund also trailed its previous benchmark, the Russell Midcap Growth Index**, which returned 21.22%. The fiscal year began on a promising note, as small-cap stocks outperformed their large-cap counterparts during the Fund's first fiscal quarter, ended December 31, 2006. The market rally was sustained during the second fiscal quarter in anticipation of moderate economic activity and a more benign Federal Reserve. However, the subprime market continued to deteriorate, and fears of a weakening economy increased volatility near the end of the second quarter. After a brief sell-off in the early spring, stocks regained positive momentum as solid employment, profits, and capital spending trends as well as record mergers and acquisitions announcements propelled the equity markets higher. As the third quarter drew to a close, however, inflation fears resurfaced as did concerns about the continued deterioration in the subprime market. The final quarter of the annual period was extremely volatile. Simultaneous to the weakness in the housing market and the uncertainty that hangs over the job market and American consumer spending, traditional inflationary indicators continue to simmer. Oil broke the $80 level and gold and agricultural commodity prices continued their upward trend. Despite a meltdown in the sub-prime mortgage market and an ensuing liquidity crisis, the markets regained its footing after the Federal Reserve lowered the Federal Funds rate by 50-basis points, to conclude the year with broad-based gains. Our investment approach remains focused on fundamental research and stock selection as the team conducts extensive research to identify companies with solid growth potential and reasonable valuations. While this strategy proved successful during the majority of the annual period, our focus on growth at reasonable valuation investing was not rewarded as much as we had hoped during the fourth quarter. With respect to stock sector weightings versus the portfolio's benchmark, the combination of: security selection in the Industrials, Information Technology, Energy and Material groups; Industrials overweight; and underweight exposure to the Consumer Discretionary and Information Technology groups, positively impacted returns. Stock selection in Consumer Discretionary and Healthcare groups detracted the most from portfolio performance, particularly retailing and healthcare equipment/services companies. Results were further hindered by overweight exposure to the Financials group, the worst performing industry in the Russell 2000 Growth Index. Ceradyne Inc., NutriSystem Inc., Dynamic Materials Corp., NeuStar Inc. Class A, and Psychiatric Solutions Inc. were among the top contributing securities during the period. Stocks which detracted from performance included E*Trade Financial Corp., Trump Entertainment Resorts Inc., American Reprographics Co., Allot Communications Ltd., and Children's Place Retail Stores Inc. - -------- Past performance is no guarantee of future results. * The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. Indices are not managed and an investor cannot invest directly into an index. ** The Russell Midcap Growth Index measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. Indices are not managed and an investor cannot invest directly into an index. The Fund has replaced the benchmark used for the prior fiscal year (the Russell Midcap Growth Index) with the Russell 2000 Growth Index, which management believes represents a better approximation of performance. Securities listed may or may not be a part of current Portfolio construction. 100 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Over the past ten years, $10,000 invested in Growth Opportunities Fund Class A shares would have increased to $14,545. The same amount invested in securities mirroring the performance of the Russell 2000 Growth Index and the Russell Midcap Growth Index would be valued at $14,312 and $20,557, respectively. [CHART] Growth Opportunities Russell Mid-Cap Russell 2000 Class A/#/ Growth Index Growth Index ---------- --------------- -------------- 9/30/1997 $ 9,425 $10,000 $10,000 10/31/1997 8,960 9,499 9,399 11/30/1997 8,955 9,599 9,175 12/31/1997 9,174 9,725 9,180 1/31/1998 8,812 9,550 9,058 2/28/1998 9,436 10,448 9,858 3/31/1998 9,992 10,886 10,271 4/30/1998 10,209 11,034 10,334 5/31/1998 9,636 10,580 9,583 6/30/1998 10,059 10,879 9,681 7/31/1998 9,837 10,413 8,873 8/31/1998 7,922 8,426 6,825 9/30/1998 9,029 9,063 7,517 10/31/1998 9,068 9,730 7,909 11/30/1998 10,209 10,387 8,522 12/31/1998 11,298 11,462 9,293 1/31/1999 12,507 11,806 9,711 2/28/1999 11,459 11,229 8,823 3/31/1999 12,745 11,854 9,137 4/30/1999 12,965 12,394 9,944 5/31/1999 12,536 12,235 9,960 6/30/1999 13,358 13,089 10,485 7/31/1999 13,447 12,672 10,160 8/31/1999 13,525 12,541 9,780 9/30/1999 13,763 12,434 9,969 10/31/1999 15,132 13,395 10,224 11/30/1999 16,870 14,782 11,305 12/31/1999 21,357 17,342 13,298 1/31/2000 21,310 17,338 13,174 2/29/2000 28,836 20,983 16,239 3/31/2000 26,675 21,005 14,532 4/30/2000 24,132 18,966 13,065 5/31/2000 22,046 17,584 11,921 6/30/2000 26,204 19,449 13,461 7/31/2000 24,261 18,218 12,307 8/31/2000 28,481 20,965 13,602 9/30/2000 27,806 19,940 12,926 10/31/2000 25,550 18,575 11,877 11/30/2000 19,265 14,539 9,721 12/31/2000 20,812 15,304 10,315 1/31/2001 20,834 16,179 11,150 2/28/2001 17,083 13,380 9,622 3/31/2001 15,328 11,465 8,747 4/30/2001 16,812 13,376 9,818 5/31/2001 16,435 13,314 10,045 6/30/2001 15,659 13,321 10,319 7/31/2001 14,311 12,422 9,439 8/31/2001 13,053 11,522 8,849 9/30/2001 11,615 9,618 7,422 10/31/2001 12,360 10,629 8,136 11/30/2001 13,581 11,773 8,815 12/31/2001 13,927 12,220 9,363 1/31/2002 13,671 11,824 9,030 2/28/2002 12,202 11,153 8,446 3/31/2002 13,498 12,005 9,180 4/30/2002 12,157 11,369 8,981 5/31/2002 11,283 11,030 8,456 6/30/2002 9,845 9,813 7,739 7/31/2002 8,368 8,859 6,550 8/31/2002 7,984 8,828 6,547 9/30/2002 7,517 8,127 6,074 10/31/2002 8,218 8,756 6,381 11/30/2002 8,948 9,442 7,014 12/31/2002 8,067 8,871 6,530 1/31/2003 7,992 8,784 6,352 2/28/2003 8,052 8,708 6,183 3/31/2003 8,263 8,870 6,277 4/30/2003 8,813 9,474 6,871 5/31/2003 9,754 10,386 7,645 6/30/2003 9,754 10,534 7,792 7/31/2003 9,935 10,910 8,381 8/31/2003 10,560 11,511 8,832 9/30/2003 10,349 11,288 8,608 10/31/2003 10,892 12,197 9,352 11/30/2003 11,148 12,524 9,657 12/31/2003 11,268 12,661 9,700 1/31/2004 11,607 13,079 10,209 2/29/2004 11,713 13,298 10,193 3/31/2004 11,682 13,273 10,241 4/30/2004 10,997 12,898 9,727 5/31/2004 11,080 13,202 9,920 6/30/2004 11,389 13,412 10,251 7/31/2004 10,327 12,524 9,330 8/31/2004 9,943 12,370 9,130 9/30/2004 10,289 12,831 9,634 10/31/2004 10,477 13,267 9,869 11/30/2004 11,215 13,952 10,703 12/31/2004 11,554 14,620 11,087 1/31/2005 11,328 14,229 10,588 2/28/2005 11,615 14,589 10,733 3/31/2005 11,298 14,376 10,331 4/30/2005 10,726 13,807 9,673 5/31/2005 11,200 14,598 10,355 6/30/2005 11,449 14,869 10,690 7/31/2005 11,946 15,737 11,437 8/31/2005 12,089 15,641 11,276 9/30/2005 12,255 15,843 11,365 10/31/2005 11,841 15,377 10,945 11/30/2005 12,247 16,211 11,565 12/31/2005 12,255 16,389 11,548 1/31/2006 12,910 17,371 12,662 2/28/2006 12,827 17,157 12,594 3/31/2006 13,347 17,636 13,206 4/30/2006 13,445 17,711 13,168 5/31/2006 12,880 16,877 12,241 6/30/2006 12,488 16,808 12,249 7/31/2006 12,044 16,206 11,613 8/31/2006 12,519 16,579 11,953 9/30/2006 12,835 16,958 12,034 10/31/2006 13,468 17,609 12,813 11/30/2006 14,063 18,300 13,120 12/31/2006 14,146 18,136 13,089 1/31/2007 14,477 18,796 13,332 2/28/2007 14,718 18,755 13,290 3/31/2007 14,793 18,854 13,413 4/30/2007 15,087 19,681 13,765 5/31/2007 15,908 20,480 14,391 6/30/2007 15,712 20,125 14,310 7/31/2007 14,492 19,674 13,567 8/31/2007 14,439 19,781 13,908 9/30/2007 14,545 20,557 14,312
Class A Class B Class C++ Class I ------------------ ------------------ ------------------ ------------------ Growth Average Average Average Average Opportunities Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Fund Return Return+ Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 6.80% 13.32% 8.58% 12.58% 11.47% 12.47% 13.67% 13.67% - -------------------------------------------------------------------------------------------- 5 Year Return 12.77% 93.49% 13.04% 86.61% 13.26% 86.37% 14.43% 96.20% - -------------------------------------------------------------------------------------------- 10 Year Return 3.82% 54.32% 3.83% 45.66% N/A N/A N/A N/A - -------------------------------------------------------------------------------------------- Since Inception* 8.74% 499.54% 6.23% 133.04% 1.09% 9.85% 1.39% 8.46% - --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date: Class A: 01/28/87; Class B: 10/04/93; Class C: 02/02/99; Class I: 11/16/01 # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. ++ Effective February 23, 2004, Class II shares were redesignated as Class C shares. For the 12 month period ended September 30, 2007, the SunAmerica Growth Opportunities Class A returned 6.80% compared to 18.94% for the Russell 2000 Growth Index and 21.22% for the Russell Midcap Growth Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) The Fund has replaced the benchmark used in the Line Graph for the prior fiscal year (the Russell Midcap Growth Index) with the Russell 2000 Growth Index, which management believes represents a better approximation of performance. - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 101 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica New Century Fund For the annual period ended September 30, 2007, the SunAmerica New Century Fund Class A returned 18.76% (before maximum sales charge), trailing its benchmark, the Russell Midcap Growth Index*, which returned 21.22%. The Fund also slightly trailed its previous benchmark, the Russell 3000 Growth Index**, which returned 19.31%. For the majority of the annual period, several macroeconomic factors greatly influenced the investment environment including steady corporate spending and profit growth. At the same time, core inflation, a key indicator monitored by the Federal Reserve, remained stable. Record merger and acquisitions announcements also propelled the equity markets higher. The final quarter of the annual period, however, was especially challenging due to continued weakness in the housing market and traditional inflationary indicators became worrisome as oil broke the $80 level and gold and agricultural commodity prices continued their upward trend. Despite a meltdown in the sub-prime mortgage market and an ensuing liquidity crisis, the market regained its footing after the Federal Reserve lowered the Federal Funds rate by 50 basis points, to conclude the year with broad-based gains. Overall, the mid-cap growth category was the best performing domestic equity asset class during the annual period. Energy (6.60% weight) was the top-performing sector in the Russell Midcap Growth Index with a return of 49.72%, while the Consumer Staples sector (4.27% weight) was the principal laggard, returning 10.82%. Our investment approach remains focused on fundamental research and stock selection as the team conducts extensive research to identify companies with solid growth potential and reasonable valuations. While this strategy proved successful during the majority of the annual period, our focus on growth at reasonable valuation investing was not rewarded as much as we had hoped during the fourth quarter. A leading contributor to overall Fund performance during the annual period was security selection in the Information Technology, Industrials, Healthcare, Telecom Services and Materials groups. Overweight exposure to the Industrials and Healthcare groups assisted performance as did an Information Technology underweight. These gains were limited, however, by stock selection in the Consumer Discretionary and Financials sectors as well as underweight exposure to both the Materials and Energy groups. The following holdings contributed to performance: Ceradyne Inc.; NutriSystem Inc.; Alliance Data Systems Corp.; NeuStar Inc. Class A; and Psychiatric Solutions Inc. Individual portfolio holdings which detracted from performance included E*Trade Financial Corp., Office Depot Inc., American Reprographics Co., Children's Place Retail Stores Inc., and Health Management Associates Inc. Class A. - -------- Past performance is no guarantee of future results. * The Russell Midcap Growth Index measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. Indices are not managed and an investor cannot invest directly into an index. ** The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. Russell 3000 Index consists of the 3,000 largest U.S. companies based on total market capitalization. Indices are not managed and an investor cannot invest directly into an index. The Fund has replaced the benchmark used for the prior fiscal year (the Russell 3000 Growth Index) with the Russell Midcap Growth Index, which management believes represents a better approximation of performance. Securities listed may or may not be a part of current Portfolio construction. 102 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Over the past ten years, $10,000 invested in New Century Fund Class A shares would have increased to $14,099. The same amount invested in securities mirroring the performance of the Russell Midcap Growth Index and Russell 3000 Growth Index would be valued at $20,557 and $14,764, respectively. [CHART] New Century Russell Mid-Cap Russell 3000 Class A/#/ Growth Index Growth Index ------------- ----------------- ------------- 9/30/1997 $ 9,426 $10,000 $10,000 10/31/1997 8,543 9,499 9,606 11/30/1997 8,266 9,599 9,948 12/31/1997 8,332 9,725 10,049 1/31/1998 7,928 9,550 10,308 2/28/1998 8,524 10,448 11,096 3/31/1998 8,931 10,886 11,540 4/30/1998 8,909 11,034 11,691 5/31/1998 8,346 10,580 11,311 6/30/1998 8,839 10,879 11,952 7/31/1998 8,343 10,413 11,792 8/31/1998 6,729 8,426 9,944 9/30/1998 7,069 9,063 10,726 10/31/1998 7,362 9,730 11,565 11/30/1998 8,217 10,387 12,446 12/31/1998 9,390 11,462 13,568 1/31/1999 10,481 11,806 14,351 2/28/1999 9,548 11,229 13,647 3/31/1999 10,915 11,854 14,350 4/30/1999 11,295 12,394 14,454 5/31/1999 10,619 12,235 14,045 6/30/1999 11,263 13,089 15,010 7/31/1999 10,651 12,672 14,533 8/31/1999 10,718 12,541 14,714 9/30/1999 10,817 12,434 14,445 10/31/1999 11,437 13,395 15,486 11/30/1999 13,384 14,782 16,374 12/31/1999 17,331 17,342 18,158 1/31/2000 16,736 17,338 17,355 2/29/2000 21,374 20,983 18,440 3/31/2000 18,635 21,005 19,482 4/30/2000 16,746 18,966 18,480 5/31/2000 15,497 17,584 17,503 6/30/2000 18,635 19,449 18,891 7/31/2000 16,786 18,218 18,046 8/31/2000 19,303 20,965 19,697 9/30/2000 18,685 19,940 17,893 10/31/2000 16,482 18,575 17,004 11/30/2000 13,616 14,539 14,459 12/31/2000 14,111 15,304 14,087 1/31/2001 13,735 16,179 15,072 2/28/2001 11,877 13,380 12,548 3/31/2001 10,926 11,465 11,199 4/30/2001 11,948 13,376 12,612 5/31/2001 11,916 13,314 12,462 6/30/2001 11,667 13,321 12,222 7/31/2001 10,875 12,422 11,865 8/31/2001 9,976 11,522 10,909 9/30/2001 8,431 9,618 9,775 10/31/2001 8,814 10,629 10,315 11/30/2001 9,414 11,773 11,297 12/31/2001 9,605 12,220 11,323 1/31/2002 9,369 11,824 11,109 2/28/2002 8,903 11,153 10,630 3/31/2002 9,420 12,005 11,035 4/30/2002 9,165 11,369 10,180 5/31/2002 8,910 11,030 9,908 6/30/2002 8,316 9,813 8,997 7/31/2002 7,480 8,859 8,441 8/31/2002 7,493 8,828 8,464 9/30/2002 7,161 8,127 7,603 10/31/2002 7,301 8,756 8,280 11/30/2002 7,576 9,442 8,753 12/31/2002 7,244 8,871 8,148 1/31/2003 7,110 8,784 7,949 2/28/2003 6,982 8,708 7,901 3/31/2003 7,040 8,870 8,047 4/30/2003 7,512 9,474 8,652 5/31/2003 8,074 10,386 9,119 6/30/2003 8,201 10,534 9,248 7/31/2003 8,463 10,910 9,510 8/31/2003 8,903 11,511 9,766 9/30/2003 8,578 11,288 9,651 10/31/2003 9,229 12,197 10,215 11/30/2003 9,248 12,524 10,339 12/31/2003 9,261 12,661 10,672 1/31/2004 9,395 13,079 10,916 2/29/2004 9,420 13,298 10,979 3/31/2004 9,433 13,273 10,794 4/30/2004 9,108 12,898 10,636 5/31/2004 9,344 13,202 10,836 6/30/2004 9,695 13,412 10,988 7/31/2004 9,146 12,524 10,337 8/31/2004 8,935 12,370 10,272 9/30/2004 9,427 12,831 10,406 10/31/2004 9,739 13,267 10,576 11/30/2004 10,371 13,952 10,984 12/31/2004 10,697 14,620 11,411 1/31/2005 10,588 14,229 11,019 2/28/2005 10,907 14,589 11,139 3/31/2005 10,684 14,376 10,918 4/30/2005 10,193 13,807 10,669 5/31/2005 10,882 14,598 11,204 6/30/2005 11,067 14,869 11,196 7/31/2005 11,654 15,737 11,764 8/31/2005 11,501 15,641 11,611 9/30/2005 11,488 15,843 11,668 10/31/2005 11,118 15,377 11,527 11/30/2005 11,571 16,211 12,037 12/31/2005 11,520 16,389 12,001 1/31/2006 12,082 17,371 12,295 2/28/2006 12,075 17,157 12,271 3/31/2006 12,414 17,636 12,490 4/30/2006 12,516 17,711 12,471 5/31/2006 11,941 16,877 12,005 6/30/2006 11,648 16,808 11,963 7/31/2006 11,226 16,206 11,700 8/31/2006 11,584 16,579 12,064 9/30/2006 11,871 16,958 12,374 10/31/2006 12,363 17,609 12,839 11/30/2006 12,784 18,300 13,099 12/31/2006 12,994 18,136 13,137 1/31/2007 13,441 18,796 13,466 2/28/2007 13,569 18,755 13,230 3/31/2007 13,639 18,854 13,306 4/30/2007 14,156 19,681 13,910 5/31/2007 14,915 20,480 14,421 6/30/2007 14,660 20,125 14,217 7/31/2007 13,626 19,674 13,952 8/31/2007 13,811 19,781 14,185 9/30/2007 14,099 20,557 14,764
Class A Class B Class C++ ------------------ ------------------ ------------------ New Average Average Average Century Annual Cumulative Annual Cumulative Annual Cumulative Fund Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 11.96% 18.76% 13.86% 17.86% 17.02% 18.02% - ------------------------------------------------------------------------- 5 Year Return 13.17% 96.88% 13.43% 89.81% 13.87% 91.48% - ------------------------------------------------------------------------- 10 Year Return 3.49% 49.56% 3.55% 41.74% N/A N/A - ------------------------------------------------------------------------- Since Inception* 9.80% 632.42% 7.77% 185.37% 5.26% 64.06% - -------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date: Class A: 01/28/87; Class B: 09/24/93; Class C: 02/02/98. # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. ++ Effective February 23, 2004, Class II shares were redesignated as Class C shares. For the 12 month period ended September 30, 2007, the SunAmerica New Century Class A returned 11.96% compared to 21.22% for the Russell Midcap Growth Index and 19.31% for the Russell 3000 Growth Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) The Fund has replaced the benchmark used in the Line Graph for the prior fiscal year (the Russell 3000 Growth Index) with the Russell Midcap Growth Index, which management believes represents a better approximation of performance. - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 103 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica Growth and Income Fund For the annual period ended September 30, 2007, the SunAmerica Growth and Income Fund Class A returned 18.24% (before maximum sales charge), outperforming its benchmark, the S&P 500 Index*, which returned 16.44%. Overall, U.S. equities finished the annual period on a strong note as the Dow Jones Industrial Average (DJIA)** approached another record close in the final week of the Fund's fiscal year. The combination of strong corporate earnings, and the possibility of another round of interest rate cuts lifted the stock market higher. During the 12-month period, growth outperformed its value counterpart across the capitalization spectrum. In terms of industry groups, all ten S&P 500 sectors posted positive returns, led by the Energy (9.74% weight) and Materials (3.15% weight) sectors, which returned 44.30% and 36.28%, respectively. On the other hand, Financials, the index's top constituent (21.37% weight) and Consumer Discretionary (11.36% weight), were the principal laggards, returning 1.96% and 5.82%, respectively. The Fund focuses its investment selection on companies of any size that demonstrate the potential for capital appreciation and are believed to be undervalued in the market. To a large extent, performance was driven by stock selection in the Industrials group, particularly capital goods companies. Overweight exposure and security selection in both the Energy and Telecom Services groups also positively impacted returns. Additionally, a Consumer Discretionary underweight was also beneficial. Alternatively, stock selection in the Consumer Staples and Consumer Discretionary sectors hindered results. Three integrated oil producers, ExxonMobil Corp., ConocoPhillips, and Chevron Corp. were the top-performing holdings in the portfolio during the annual period, as increased demand for oil produced higher revenues at each company. Schlumberger Ltd., an energy service company, and Cisco Systems Inc., a developer of computer networking products, also delivered strong results. Investments in Motorola Inc., Constellation Brands Inc. Class A, Comcast Corp. Class A, Amgen Inc. and Time Warner Cable Inc. were a drag on performance during the period. - -------- Past performance is no guarantee of future results. * The S&P 500 Index is the Standard & Poor's 500 Composite Stock Price Index, a widely recognized, unmanaged index of common stock prices. Indices are not managed and an investor cannot invest directly into an index. ** The Dow Jones Industrial Average (DJIA) is one of several stock market indices created by Wall Street Journal editor and Dow Jones & Company founder Charles Dow. The average consists of 30 of the largest and most widely held public companies in the United States. Indices are not managed and an investor cannot invest directly into an index. Securities listed may or may not be a part of current Portfolio construction. 104 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Over the past ten years, $10,000 invested in Growth and Income Fund Class A shares would have increased to $14,556. The same amount invested in securities mirroring the performance of the S&P 500 Index would be valued at $18,893. [CHART] Growth & Income Class A/#/ S&P 500 Index -------------------------- -------------- 9/30/1997 $ 9,425 $10,000 10/31/1997 9,194 9,666 11/30/1997 9,601 10,114 12/31/1997 9,807 10,287 1/31/1998 9,838 10,401 2/28/1998 10,483 11,150 3/31/1998 10,980 11,721 4/30/1998 11,011 11,839 5/31/1998 10,786 11,636 6/30/1998 11,167 12,108 7/31/1998 11,058 11,979 8/31/1998 9,286 10,250 9/30/1998 9,947 10,906 10/31/1998 10,537 11,792 11/30/1998 11,167 12,507 12/31/1998 12,098 13,227 1/31/1999 12,837 13,780 2/28/1999 12,371 13,352 3/31/1999 13,006 13,886 4/30/1999 13,279 14,424 5/31/1999 12,805 14,084 6/30/1999 13,608 14,865 7/31/1999 13,311 14,402 8/31/1999 13,198 14,330 9/30/1999 13,038 13,938 10/31/1999 13,897 14,819 11/30/1999 14,467 15,121 12/31/1999 16,126 16,011 1/31/2000 15,543 15,207 2/29/2000 16,109 14,919 3/31/2000 17,033 16,378 4/30/2000 15,834 15,886 5/31/2000 15,077 15,560 6/30/2000 16,034 15,943 7/31/2000 15,759 15,694 8/31/2000 17,565 16,669 9/30/2000 16,641 15,789 10/31/2000 15,685 15,722 11/30/2000 13,971 14,483 12/31/2000 14,375 14,553 1/31/2001 14,456 15,070 2/28/2001 13,114 13,696 3/31/2001 12,243 12,828 4/30/2001 13,132 13,825 5/31/2001 13,069 13,918 6/30/2001 12,534 13,579 7/31/2001 12,262 13,445 8/31/2001 11,355 12,604 9/30/2001 10,076 11,586 10/31/2001 10,230 11,807 11/30/2001 11,200 12,712 12/31/2001 11,273 12,824 1/31/2002 10,738 12,637 2/28/2002 10,575 12,393 3/31/2002 11,046 12,859 4/30/2002 10,493 12,079 5/31/2002 10,366 11,990 6/30/2002 9,650 11,136 7/31/2002 8,833 10,268 8/31/2002 8,960 10,336 9/30/2002 8,044 9,212 10/31/2002 8,579 10,023 11/30/2002 9,006 10,613 12/31/2002 8,398 9,990 1/31/2003 8,126 9,728 2/28/2003 8,044 9,582 3/31/2003 8,090 9,675 4/30/2003 8,616 10,472 5/31/2003 8,988 11,023 6/30/2003 9,042 11,164 7/31/2003 9,251 11,361 8/31/2003 9,414 11,582 9/30/2003 9,242 11,459 10/31/2003 9,885 12,107 11/30/2003 9,976 12,213 12/31/2003 10,303 12,853 1/31/2004 10,402 13,089 2/29/2004 10,557 13,271 3/31/2004 10,366 13,071 4/30/2004 10,158 12,866 5/31/2004 10,221 13,043 6/30/2004 10,384 13,296 7/31/2004 10,139 12,856 8/31/2004 10,148 12,908 9/30/2004 10,321 13,048 10/31/2004 10,511 13,247 11/30/2004 10,937 13,783 12/31/2004 11,319 14,252 1/31/2005 11,101 13,905 2/28/2005 11,310 14,197 3/31/2005 11,137 13,946 4/30/2005 10,919 13,681 5/31/2005 11,219 14,116 6/30/2005 11,146 14,137 7/31/2005 11,401 14,662 8/31/2005 11,310 14,528 9/30/2005 11,342 14,646 10/31/2005 11,122 14,402 11/30/2005 11,443 14,946 12/31/2005 11,396 14,951 1/31/2006 11,579 15,347 2/28/2006 11,689 15,389 3/31/2006 11,799 15,580 4/30/2006 12,028 15,790 5/31/2006 11,735 15,335 6/30/2006 11,698 15,356 7/31/2006 11,762 15,451 8/31/2006 12,019 15,818 9/30/2006 12,303 16,226 10/31/2006 12,697 16,755 11/30/2006 12,871 17,073 12/31/2006 13,072 17,313 1/31/2007 13,265 17,575 2/28/2007 12,935 17,231 3/31/2007 13,081 17,424 4/30/2007 13,686 18,195 5/31/2007 14,162 18,830 6/30/2007 13,997 18,518 7/31/2007 13,704 17,943 8/31/2007 14,098 18,212 9/30/2007 14,556 18,893
Class A Class B Class C++ Class I ------------------ ------------------ ------------------ ------------------ Growth Average Average Average Average and Income Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Fund Return Return+ Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 11.44% 18.24% 13.39% 17.39% 16.50% 17.50% 18.49% 18.49% - -------------------------------------------------------------------------------------------- 5 Year Return 11.27% 80.95% 11.59% 75.03% 11.87% 75.21% 12.78% 82.44% - -------------------------------------------------------------------------------------------- 10 Year Return 3.83% 54.44% 3.91% 46.78% N/A N/A N/A N/A - -------------------------------------------------------------------------------------------- Since Inception* 9.09% 236.10% 9.19% 220.35% 3.24% 36.10% 4.82% 31.82% - --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date: Class A: 07/01/94; Class B: 07/06/94; Class C: 02/02/98; Class I: 11/16/01. # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. ++ Effective February 23, 2004, Class II shares were redesignated as Class C shares. For the 12 month period ended September 30, 2007, the SunAmerica Growth and Income Class A returned 11.44% compared to 16.44% for the S&P 500 Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 105 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica Balanced Assets Fund For the annual period ended September 30, 2007, the SunAmerica Balanced Assets Fund Class A returned 12.50% (before maximum sales charge). At the end of the fiscal period, the Fund held 69% of its total long-term portfolio in equities and 31% in fixed-income securities. The Fund's equity benchmark, the S&P 500 Index*, returned 16.44%, whereas its fixed-income benchmark, the Lehman Brothers Aggregate Bond Index**, returned 5.14% for the same period. A balanced fund is designed to cushion risk and provide a return somewhere between that of its fixed-income and equity benchmarks. The Fund's equity holdings were aided by outstanding security selection in the Industrials group, particularly capital goods and commercial service and supply companies. Stock selection in the Financials, Telecom Services, Energy and Information Technology groups also had a positive impact on results, as did a Consumer Discretionary underweight. On the other hand, stock selection in the Consumer Discretionary and Consumer Staples groups and an underweight in the energy sector were detractors from relative performance. Several Energy companies led the list of top-performing equity holdings, including ExxonMobil Corp., Chevron Corp., and ConocoPhillips. Apple Inc. and General Electric Co. were other top contributors. The positions which detracted most significantly from the Fund's performance included Motorola Inc., Constellation Brands Inc. Class A, Amgen Inc., Wesco International Inc., and Pfizer Inc. Market conditions continued to play a role in the performance of the fixed-income portion of the Fund versus its relevant benchmark. In particular, the Fund's exposure to BBB-rated credit in the second half of the fiscal year was a cause for underperformance versus the benchmark in the credit sector. The decision on the part of the Federal Open Market Committee (FOMC) to cut the Federal Funds rate by 50-basis points at the September 18th meeting, provided much needed liquidity to a market that was reeling from the fall-out in the U.S. subprime mortgage market. Sector selection also played a role in the performance of the Fund versus its benchmark. Specifically, an overweight in financial and industrial credit sectors contributed to the Fund's underperformance. Security selection is a primary driver of the Fund's returns. Each fixed-income asset class is managed from a bottom-up perspective which places a high degree of weight on the manager's ability to select the best-performing securities available. Top-performing securities for the year included Calpine secured debt, Republic of Turkey and Atlas Air secured notes. Poor performers included Bear Stearns, Residential Capital and Republic of Argentina. - -------- Past performance is no guarantee of future results. * The S&P 500 Index is the Standard & Poor's 500 Composite Stock Price Index, a widely recognized, unmanaged index of common stock prices. Indices are not managed and an investor cannot invest directly into an index. ** The Lehman Brothers Aggregate Bond Index represents securities that are U.S. domestic, taxable and dollar denominated. The index covers components for government and corporate securities, mortgage pass-through securities and asset-backed securities. Indices are not managed and an investor cannot invest directly into an index. Securities listed may or may not be a part of current Portfolio construction. 106 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Over the past ten years, $10,000 invested in Balanced Assets Fund Class A shares would have increased to $13,600. The same amount invested in securities mirroring the performance of the Lehman Brothers Aggregate Bond Index and the S&P 500 Index would be valued at $17,849 and $18,893, respectively. [CHART] Balanced Assets Lehman Bros.Aggregate Class A/#/ Bond Index S&P 500 Index ----------- ---------- ------------- 9/30/1997 $ 9,424 $10,000 $10,000 10/31/1997 9,327 10,145 9,666 11/30/1997 9,480 10,192 10,114 12/31/1997 9,653 10,295 10,287 1/31/1998 9,675 10,426 10,401 2/28/1998 10,194 10,418 11,150 3/31/1998 10,564 10,453 11,721 4/30/1998 10,750 10,508 11,839 5/31/1998 10,615 10,608 11,636 6/30/1998 10,955 10,698 12,108 7/31/1998 10,955 10,720 11,979 8/31/1998 9,698 10,895 10,250 9/30/1998 10,302 11,150 10,906 10/31/1998 10,691 11,091 11,792 11/30/1998 11,228 11,154 12,507 12/31/1998 11,907 11,188 13,227 1/31/1999 12,471 11,267 13,780 2/28/1999 12,043 11,070 13,352 3/31/1999 12,558 11,131 13,886 4/30/1999 12,763 11,166 14,424 5/31/1999 12,341 11,068 14,084 6/30/1999 12,935 11,033 14,865 7/31/1999 12,667 10,986 14,402 8/31/1999 12,698 10,981 14,330 9/30/1999 12,580 11,108 13,938 10/31/1999 13,155 11,149 14,819 11/30/1999 13,437 11,148 15,121 12/31/1999 14,488 11,095 16,011 1/31/2000 14,067 11,058 15,207 2/29/2000 14,371 11,192 14,919 3/31/2000 15,117 11,340 16,378 4/30/2000 14,287 11,307 15,886 5/31/2000 13,789 11,301 15,560 6/30/2000 14,452 11,536 15,943 7/31/2000 14,390 11,641 15,694 8/31/2000 15,415 11,810 16,669 9/30/2000 14,554 11,884 15,789 10/31/2000 13,832 11,963 15,722 11/30/2000 12,839 12,159 14,483 12/31/2000 13,089 12,385 14,553 1/31/2001 13,245 12,587 15,070 2/28/2001 12,302 12,696 13,696 3/31/2001 11,707 12,760 12,828 4/30/2001 12,184 12,706 13,825 5/31/2001 12,153 12,783 13,918 6/30/2001 11,915 12,831 13,579 7/31/2001 11,781 13,119 13,445 8/31/2001 11,193 13,269 12,604 9/30/2001 10,428 13,423 11,586 10/31/2001 10,767 13,704 11,807 11/30/2001 11,310 13,515 12,712 12/31/2001 11,218 13,429 12,824 1/31/2002 10,973 13,538 12,637 2/28/2002 10,815 13,669 12,393 3/31/2002 10,931 13,441 12,859 4/30/2002 10,638 13,702 12,079 5/31/2002 10,503 13,818 11,990 6/30/2002 10,118 13,938 11,136 7/31/2002 9,760 14,106 10,268 8/31/2002 9,872 14,344 10,336 9/30/2002 9,422 14,577 9,212 10/31/2002 9,558 14,510 10,023 11/30/2002 9,758 14,506 10,613 12/31/2002 9,422 14,806 9,990 1/31/2003 9,230 14,819 9,728 2/28/2003 9,222 15,024 9,582 3/31/2003 9,231 15,012 9,675 4/30/2003 9,650 15,136 10,472 5/31/2003 9,955 15,418 11,023 6/30/2003 9,972 15,388 11,164 7/31/2003 9,931 14,870 11,361 8/31/2003 10,060 14,969 11,582 9/30/2003 10,048 15,365 11,459 10/31/2003 10,460 15,222 12,107 11/30/2003 10,508 15,258 12,213 12/31/2003 10,756 15,414 12,853 1/31/2004 10,854 15,538 13,089 2/29/2004 10,975 15,706 13,271 3/31/2004 10,864 15,824 13,071 4/30/2004 10,637 15,412 12,866 5/31/2004 10,670 15,350 13,043 6/30/2004 10,838 15,437 13,296 7/31/2004 10,594 15,590 12,856 8/31/2004 10,651 15,887 12,908 9/30/2004 10,779 15,930 13,048 10/31/2004 10,893 16,064 13,247 11/30/2004 11,097 15,936 13,783 12/31/2004 11,385 16,082 14,252 1/31/2005 11,237 16,183 13,905 2/28/2005 11,328 16,088 14,197 3/31/2005 11,121 16,005 13,946 4/30/2005 11,005 16,222 13,681 5/31/2005 11,220 16,397 14,116 6/30/2005 11,211 16,487 14,137 7/31/2005 11,435 16,337 14,662 8/31/2005 11,402 16,546 14,528 9/30/2005 11,408 16,376 14,646 10/31/2005 11,241 16,246 14,402 11/30/2005 11,507 16,318 14,946 12/31/2005 11,500 16,473 14,951 1/31/2006 11,659 16,474 15,347 2/28/2006 11,676 16,529 15,389 3/31/2006 11,712 16,367 15,580 4/30/2006 11,763 16,337 15,790 5/31/2006 11,544 16,319 15,335 6/30/2006 11,528 16,354 15,356 7/31/2006 11,629 16,575 15,451 8/31/2006 11,856 16,829 15,818 9/30/2006 12,081 16,977 16,226 10/31/2006 12,343 17,089 16,755 11/30/2006 12,496 17,287 17,073 12/31/2006 12,591 17,187 17,313 1/31/2007 12,735 17,180 17,575 2/28/2007 12,608 17,445 17,231 3/31/2007 12,694 17,445 17,424 4/30/2007 13,086 17,539 18,195 5/31/2007 13,368 17,406 18,830 6/30/2007 13,212 17,355 18,518 7/31/2007 12,980 17,500 17,943 8/31/2007 13,169 17,714 18,212 9/30/2007 13,600 17,849 18,893
Class A Class B Class C++ Class I ------------------ ------------------ ------------------ ------------------ Balanced Average Average Average Average Assets Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Fund Return Return+ Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 6.04% 12.50% 7.70% 11.70% 10.75% 11.75% 12.81% 12.81% - -------------------------------------------------------------------------------------------- 5 Year Return 6.35% 44.34% 6.59% 39.56% 6.90% 39.58% 7.86% 46.01% - -------------------------------------------------------------------------------------------- 10 Year Return 3.12% 44.31% 3.15% 36.35% N/A N/A N/A N/A - -------------------------------------------------------------------------------------------- Since Inception* 6.08% 142.70% 8.70% 562.23% 0.40% 3.52% 3.51% 22.39% - --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date: Class A: 09/24/93; Class B: 01/29/85; Class C: 02/02/99; Class I: 11/16/01. # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. ++ Effective February 23, 2004, Class II shares were redesignated as Class C shares. For the 12 month period ended September 30, 2007, the SunAmerica Balanced Assets Class A returned 6.04% compared to 16.44% for the S&P 500 Index and 5.14% for the Lehman Bros. Aggregate Bond Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 107 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica International Equity Fund The SunAmerica International Equity Fund Class A returned 25.00% (before maximum sales charge) for the annual period ended September 30, 2007. The Fund lagged its current benchmark, the MSCI AC World ex U.S. Daily Total Return Net Index*, which returned 31.06% for the annual period. The Fund's previous benchmark, the MSCI EAFE Daily Total Return Net Index**, returned 24.86% during the annual period, which ended September 30, 2007. On March 31, 2007, the Fund's benchmark changed from the MSCI EAFE Daily Total Return Net Index to the MSCI AC World ex U.S. Daily Total Return Net Index, as the Fund began incorporating emerging market securities into its investments. The last 12 months have witnessed an extension of the current bull market and, on balance, a continuation of benign macro- and firm-level economic conditions - -- strong corporate profits, supportive historical market valuations, relatively tame inflationary pressures, and strong global growth. International stocks, particularly those with costs and revenues derived in emerging and resource-intensive markets, performed better than developed markets. Of course, large, globally-diversified companies with sales in the faster-growing markets also performed well. An upsurge in leveraged merger and acquisitions activity in Europe and the United States also fueled the bullish environment. The fiscal year witnessed two share sell-offs touched off by different causes. The first, which occurred in later February/March, came over worries of a slowdown in the booming Chinese economy. The second more serious bout of volatility, which occurred from mid-July through mid-August, came as the result of worries about the weakening U.S. economy and credit markets (i.e., the subprime crisis). The U.S. Federal Reserve responded to the second sell-off by suspending its hawkish tone and cutting both the benchmark Federal Funds rate and the discount rate it charges banks -- the former by a surprising 50 basis points. In addition, the U.S. Federal Reserve and other central banks added liquidity to the financial system through open market actions. These actions alleviated some of the worries about continued growth and the markets regained their record levels. In addition to, and intertwined with, conditions in international stock markets, the other major economic news of the last fiscal year relates to commodity prices and exchange rates. Commodities and metals prices remained firm, driven by strong demand from booming emerging markets and, in some cases, worries about sufficient levels of future supply. Among other commodities, corn, soy, wheat, gold, and copper all reached or were very near all-time highs. Crude oil averaged near $70 a barrel and as of this writing is currently above $80. As for exchange rates, the hallmark of this past fiscal year was the significant depreciation of the U.S. dollar vs. the currencies of most of its major trading partners (the Euro, British pound sterling, and Brazilian real among others). Although our investment focus is on fundamental research and stock selection, the markets did affect Fund performance. The increased volatility that occurred during the periods discussed above hurt some of our investments in higher beta and riskier regions, such as emerging markets. Although the Fund's Class A shares showed a strong return of 25.00%, it underperformed its benchmark in the fiscal year. Among the stock selection detractors from performance were the Japanese financial services conglomerate Sumitomo Mitsui and the DRAM chip manufacturer Elpida Memory. Television Francaise was the biggest disappointment in France. Our overweight in the healthcare sector and underweight in the materials sector, on average over the fiscal year, were the largest detractors from performance in terms of sector selection. Our allocation country selection was slightly negative and the largest detractors were France, Italy, Finland, and Japan. Stocks that contributed to the Fund's strong performance were Italian oil-field and deep-sea platform service company Saipem and China Coal Energy. In addition, our allocation to the industrial sector contributed positively to Fund performance. The largest contributors to Fund performance on a country allocation basis were Germany, the United Kingdom, Norway and China. - -------- Past performance is no guarantee of future results. Investing internationally involves special risks, such as currency fluctuations, and economic and political instability. Diversification does not insure against market loss. * The Morgan Stanley Capital International (MSCI) All Country (AC) World ex U.S. Daily Total Return Net Index is a market capitalization-weighted index designed to measure equity market performance in 47 global developed and emerging markets, excluding the U.S. Indices are not managed and an investor cannot invest directly into an index. ** The MSCI EAFE (Europe, Australia, Far East) Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. & Canada. Indices are not managed and an investor cannot invest directly into an index. Securities listed may or may not be a part of current Portfolio construction. 108 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Over the past ten years, $10,000 invested in International Equity Fund Class A shares would have increased to $15,288. The same amount invested in securities mirroring the performance of the MSCI All Country World ex-U.S. Daily Total Return Net Index and the MSCI EAFE Index would be valued at $24,055 and $21,527, respectively. [CHART] MSCI All Country World International Equity ex-U.S. Daily Total Class A/#/ MSCI EAFE Index Return Net Index -------------------- --------------- ---------------------- 9/30/1997 $ 9,424 $10,000 $10,000 10/31/1997 8,653 9,231 9,149 11/30/1997 8,521 9,137 9,034 12/31/1997 8,482 9,217 9,138 1/31/1998 8,680 9,638 9,412 2/28/1998 9,112 10,257 10,040 3/31/1998 9,572 10,573 10,387 4/30/1998 9,777 10,656 10,461 5/31/1998 9,770 10,605 10,271 6/30/1998 9,685 10,685 10,233 7/31/1998 9,819 10,793 10,330 8/31/1998 8,454 9,456 8,873 9/30/1998 8,100 9,166 8,686 10/31/1998 8,645 10,122 9,595 11/30/1998 9,069 10,640 10,111 12/31/1998 9,354 11,060 10,456 1/31/1999 9,375 11,027 10,436 2/28/1999 9,048 10,765 10,195 3/31/1999 9,283 11,214 10,704 4/30/1999 9,588 11,668 11,243 5/31/1999 9,148 11,067 10,732 6/30/1999 9,560 11,499 11,235 7/31/1999 9,744 11,841 11,492 8/31/1999 9,737 11,884 11,535 9/30/1999 9,737 12,004 11,613 10/31/1999 10,128 12,453 12,035 11/30/1999 10,909 12,886 12,510 12/31/1999 12,493 14,042 13,696 1/31/2000 11,768 13,150 12,942 2/29/2000 12,663 13,504 13,287 3/31/2000 12,479 14,028 13,802 4/30/2000 11,605 13,289 13,038 5/31/2000 11,271 12,965 12,721 6/30/2000 11,733 13,472 13,265 7/31/2000 11,392 12,907 12,736 8/31/2000 11,640 13,019 12,895 9/30/2000 10,831 12,385 12,179 10/31/2000 10,256 12,093 11,784 11/30/2000 9,687 11,639 11,249 12/31/2000 9,988 12,053 11,627 1/31/2001 9,949 12,047 11,801 2/28/2001 9,123 11,143 10,867 3/31/2001 8,320 10,401 10,099 4/30/2001 8,830 11,123 10,785 5/31/2001 8,490 10,731 10,488 6/30/2001 8,166 10,292 10,085 7/31/2001 7,927 10,105 9,861 8/31/2001 7,672 9,849 9,616 9/30/2001 6,738 8,851 8,596 10/31/2001 6,854 9,078 8,837 11/30/2001 6,900 9,412 9,241 12/31/2001 7,001 9,468 9,360 1/31/2002 6,823 8,965 8,959 2/28/2002 6,931 9,028 9,024 3/31/2002 7,217 9,517 9,514 4/30/2002 7,224 9,580 9,576 5/31/2002 7,309 9,701 9,680 6/30/2002 7,031 9,315 9,262 7/31/2002 6,283 8,395 8,359 8/31/2002 6,159 8,376 8,360 9/30/2002 5,403 7,477 7,474 10/31/2002 5,688 7,878 7,875 11/30/2002 5,928 8,236 8,254 12/31/2002 5,735 7,959 7,987 1/31/2003 5,573 7,627 7,707 2/28/2003 5,503 7,452 7,550 3/31/2003 5,395 7,305 7,404 4/30/2003 5,827 8,021 8,117 5/31/2003 6,144 8,507 8,634 6/30/2003 6,298 8,713 8,873 7/31/2003 6,491 8,924 9,110 8/31/2003 6,676 9,139 9,381 9/30/2003 6,738 9,421 9,644 10/31/2003 7,178 10,008 10,269 11/30/2003 7,286 10,231 10,493 12/31/2003 7,868 11,030 11,294 1/31/2004 7,906 11,186 11,476 2/29/2004 7,937 11,444 11,767 3/31/2004 8,022 11,509 11,840 4/30/2004 7,767 11,248 11,472 5/31/2004 7,744 11,286 11,508 6/30/2004 7,937 11,534 11,758 7/31/2004 7,628 11,159 11,415 8/31/2004 7,698 11,209 11,506 9/30/2004 7,876 11,501 11,876 10/31/2004 8,177 11,894 12,289 11/30/2004 8,686 12,706 13,142 12/31/2004 9,095 13,263 13,707 1/31/2005 8,949 13,020 13,471 2/28/2005 9,373 13,583 14,135 3/31/2005 9,103 13,242 13,752 4/30/2005 8,972 12,930 13,412 5/31/2005 8,980 12,936 13,496 6/30/2005 9,103 13,108 13,750 7/31/2005 9,435 13,510 14,258 8/31/2005 9,814 13,851 14,623 9/30/2005 10,068 14,468 15,377 10/31/2005 9,821 14,046 14,817 11/30/2005 10,122 14,389 15,315 12/31/2005 10,887 15,059 16,052 1/31/2006 11,690 15,983 17,171 2/28/2006 11,497 15,948 17,122 3/31/2006 11,890 16,474 17,619 4/30/2006 12,609 17,260 18,528 5/31/2006 12,122 16,590 17,674 6/30/2006 11,945 16,589 17,656 7/31/2006 12,029 16,753 17,837 8/31/2006 12,292 17,214 18,342 9/30/2006 12,238 17,240 18,354 10/31/2006 12,585 17,911 19,101 11/30/2006 12,933 18,446 19,795 12/31/2006 13,273 19,025 20,412 1/31/2007 13,373 19,154 20,488 2/28/2007 13,334 19,309 20,613 3/31/2007 13,674 19,801 21,194 4/30/2007 14,114 20,680 22,177 5/31/2007 14,408 21,043 22,785 6/30/2007 14,593 21,069 22,979 7/31/2007 14,400 20,758 22,913 8/31/2007 14,238 20,434 22,561 9/30/2007 15,288 21,527 24,055
Class A Class B Class C ++ Class I ------------------ ------------------ ------------------ ------------------ International Average Average Average Average Equity Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Fund Return Return+ Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 17.79% 25.00% 20.18% 24.18% 23.12% 24.12% 25.06% 25.06% - -------------------------------------------------------------------------------------------- 5 Year Return 21.66% 182.96% 22.17% 174.15% 22.32% 173.85% 23.24% 184.28% - -------------------------------------------------------------------------------------------- 10 Year Return 4.34% 62.23% 4.44% 54.41% 4.29% 52.25% N/A N/A - -------------------------------------------------------------------------------------------- Since Inception* 4.78% 76.12% 4.86% 67.42% 4.73% 63.00% 14.37% 119.86% - --------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date Class A and Class B: 11/19/96; Class C: 03/06/97; Class I: 11/16/01. # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. ++ Effective February 23, 2004, Class II shares were redesignated as Class C shares. For the 12 month period ended September 30, 2007, the SunAmerica International Equity Class A returned 17.79% compared to 31.06% for the MSCI All Country World ex U.S. Daily Total Return Net Index and 24.86% for the MSCI EAFE Daily Total Return Net Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) The Fund has replaced the benchmark used in the Line Graph for the prior fiscal year (the MSCI EAFE Index) with the MSCI ACWI Index, which management believes represents a better approximation of performance. - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 109 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica Value Fund For the annual period ended September 30, 2007, the SunAmerica Value Fund Class A returned 15.80% (before maximum sales charge), outperforming its benchmark, the Russell 1000 Value Index*, which returned 14.45%; it also outperformed its previous benchmark, the Russell 3000 Value Index**, which returned 13.73%. Equity prices trended higher over the course of the annual period as growth stocks outperformed their value counterparts across the capitalization spectrum. While mid-cap stocks outperformed, the large-cap indices also posted strong results. The combination of steady commodity prices, strong corporate earnings, and the possibility of another round of interest rate cuts lifted the stock market higher. However, the final quarter of the annual period was extremely volatile due to the increasing concerns about a slowing growth for the U.S. economy. There were also worries that the Federal Reserve might not reduce rates enough to offset weakness in the housing and mortgage markets, which were causing much of the economic weakness. In addition to these issues, inflation continued to haunt investors as energy prices continued to rise. Poor equity returns in the first two months of the final quarter of the annual period were offset by a strong rally in September as the Federal Reserve cut rates and investors began to focus on the low valuations of equities. In terms of industry groups, all ten Russell 1000 Value sectors generated positive returns. The Energy (13.44% weight) and Materials (3.87% weight) sectors paced the rally, advancing 42.43% and 31.89%, respectively. On the other hand, Financials, the index's top constituent (35.02% weight) was the principal laggard, returning 0.26%, followed by the Healthcare group (7.09% weight), appreciating 5.82%. The primary driver of the Fund's absolute and relative performance against its benchmark was the stock selection in the Financial, Energy and Telecom Services groups. Underweight exposure to the Financial and Consumer Discretionary sectors boosted returns, as did an Energy sector overweight. Gains were offset, however, by stock selection in the Consumer Staples, Consumer Discretionary and Healthcare categories, as well as a Utilities underweight. In terms of individual stock holdings, several Energy and Telecom Services companies headed the list of top-performing holdings during the annual period: ExxonMobil Corp., Chevron Corp., ConocoPhillips, AT&T, and Verizon Communications Inc. On the other hand, investments in Motorola Inc., Constellation Brands Inc. Class A, Pfizer Inc., Comcast Corp. Class A, and Wachovia Corp. hindered results. - -------- Past performance is no guarantee of future results. * The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. Indices are not managed and an investor cannot invest directly into an index. ** The Russell 3000 Value Index measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000 Index consists of the 3,000 largest U.S. companies based on total market capitalization. Indices are not managed and an investor cannot invest directly into an index. The Fund has replaced the benchmark used for the prior fiscal year (the Russell 3000 Value Index) with the Russell 1000 Value Index, which management believes represents a better approximation of performance. Securities listed may or may not be a part of current Portfolio construction. 110 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Over the past ten years, $10,000 invested in Value Fund Class A shares would have increased to $20,654. The same amount invested in securities mirroring the performance of the Russell 1000 Value Index and the Russell 3000 Value Index would be valued at $23,249 and $23,320, respectively. [CHART] Russell 3000 Russell 1000 Value Class A/#@/ Value Index Value Index ----------------- -------------- ------------- 9/30/1997 $ 9,427 $10,000 $10,000 10/31/1997 9,034 9,721 9,721 11/30/1997 9,158 10,119 10,150 12/31/1997 9,288 10,419 10,447 1/31/1998 9,095 10,267 10,299 2/28/1998 9,777 10,952 10,992 3/31/1998 10,150 11,600 11,665 4/30/1998 10,249 11,675 11,743 5/31/1998 9,847 11,479 11,568 6/30/1998 9,783 11,606 11,717 7/31/1998 9,404 11,339 11,510 8/31/1998 7,709 9,644 9,797 9/30/1998 7,965 10,196 10,359 10/31/1998 8,734 10,946 11,162 11/30/1998 9,089 11,438 11,682 12/31/1998 9,293 11,825 12,079 1/31/1999 9,282 11,891 12,176 2/28/1999 9,066 11,674 12,004 3/31/1999 9,323 11,891 12,253 4/30/1999 10,039 13,000 13,397 5/31/1999 10,051 12,895 13,250 6/30/1999 10,465 13,276 13,634 7/31/1999 10,121 12,893 13,235 8/31/1999 9,806 12,415 12,744 9/30/1999 9,433 11,995 12,299 10/31/1999 9,789 12,618 13,006 11/30/1999 9,864 12,530 12,905 12/31/1999 10,138 12,612 12,967 1/31/2000 9,838 12,206 12,544 2/29/2000 9,619 11,410 11,612 3/31/2000 10,535 12,701 13,029 4/30/2000 10,425 12,569 12,877 5/31/2000 10,535 12,679 13,013 6/30/2000 10,382 12,163 12,418 7/31/2000 10,266 12,332 12,574 8/31/2000 10,980 13,009 13,273 9/30/2000 10,693 13,116 13,395 10/31/2000 10,852 13,414 13,724 11/30/2000 10,474 12,931 13,214 12/31/2000 11,177 13,625 13,877 1/31/2001 11,431 13,699 13,930 2/28/2001 10,950 13,343 13,543 3/31/2001 10,524 12,889 13,064 4/30/2001 11,039 13,519 13,705 5/31/2001 11,328 13,826 14,013 6/30/2001 11,266 13,579 13,701 7/31/2001 11,328 13,531 13,673 8/31/2001 11,074 13,023 13,125 9/30/2001 10,366 12,069 12,201 10/31/2001 10,373 11,994 12,096 11/30/2001 11,032 12,702 12,799 12/31/2001 11,436 13,035 13,101 1/31/2002 11,314 12,955 13,000 2/28/2002 11,421 12,980 13,021 3/31/2002 11,824 13,620 13,637 4/30/2002 11,565 13,225 13,169 5/31/2002 11,680 13,251 13,235 6/30/2002 11,234 12,527 12,475 7/31/2002 10,616 11,311 11,316 8/31/2002 10,709 11,387 11,401 9/30/2002 9,983 10,152 10,133 10/31/2002 10,522 10,861 10,884 11/30/2002 11,004 11,558 11,570 12/31/2002 10,750 11,056 11,067 1/31/2003 10,465 10,785 10,799 2/28/2003 10,225 10,493 10,511 3/31/2003 10,285 10,517 10,529 4/30/2003 11,006 11,447 11,456 5/31/2003 11,674 12,216 12,195 6/30/2003 11,667 12,373 12,348 7/31/2003 11,727 12,588 12,531 8/31/2003 11,952 12,805 12,727 9/30/2003 11,900 12,679 12,603 10/31/2003 12,268 13,474 13,374 11/30/2003 12,441 13,683 13,555 12/31/2003 13,241 14,499 14,391 1/31/2004 13,257 14,773 14,644 2/29/2004 13,526 15,087 14,958 3/31/2004 13,407 14,981 14,827 4/30/2004 13,407 14,583 14,464 5/31/2004 13,399 14,733 14,612 6/30/2004 13,746 15,113 14,957 7/31/2004 13,565 14,859 14,746 8/31/2004 13,707 15,065 14,956 9/30/2004 13,960 15,328 15,188 10/31/2004 14,212 15,581 15,441 11/30/2004 14,835 16,419 16,221 12/31/2004 15,321 16,955 16,764 1/31/2005 15,136 16,623 16,467 2/28/2005 15,516 17,156 17,012 3/31/2005 15,419 16,910 16,779 4/30/2005 15,162 16,560 16,479 5/31/2005 15,436 17,008 16,875 6/30/2005 15,498 17,242 17,060 7/31/2005 15,816 17,783 17,554 8/31/2005 15,746 17,676 17,477 9/30/2005 15,922 17,900 17,723 10/31/2005 15,578 17,445 17,272 11/30/2005 16,037 18,028 17,837 12/31/2005 15,971 18,117 17,947 1/31/2006 16,304 18,890 18,644 2/28/2006 16,437 18,995 18,758 3/31/2006 16,580 19,311 19,012 4/30/2006 16,970 19,761 19,495 5/31/2006 16,590 19,233 19,002 6/30/2006 16,713 19,366 19,124 7/31/2006 17,151 19,768 19,589 8/31/2006 17,389 20,122 19,917 9/30/2006 17,836 20,505 20,314 10/31/2006 18,359 21,210 20,979 11/30/2006 18,606 21,705 21,458 12/31/2006 19,061 22,165 21,939 1/31/2007 19,179 22,452 22,220 2/28/2007 18,762 22,109 21,873 3/31/2007 19,018 22,444 22,212 4/30/2007 19,799 23,219 23,032 5/31/2007 20,536 24,058 23,863 6/30/2007 20,194 23,496 23,306 7/31/2007 19,574 22,332 22,228 8/31/2007 20,045 22,599 22,477 9/30/2007 20,654 23,320 23,249
Class A Class B Class C++ Class I Class Z ------------------ ------------------ ------------------ ------------------ ------------------ Average Average Average Average Average Value Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Fund Return Return+ Return Return+ Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 9.16% 15.80% 11.07% 15.07% 14.07% 15.07% 15.89% 15.89% 16.48% 16.48% - --------------------------------------------------------------------------------------------------------------- 5 Year Return 14.28% 106.89% 14.70% 100.54% 14.92% 100.43% 15.78% 108.06% 16.33% 113.07% - --------------------------------------------------------------------------------------------------------------- 10 Year Return 7.52% 119.09% 7.61% 108.23% 7.47% 105.45% N/A N/A N/A N/A - --------------------------------------------------------------------------------------------------------------- Since Inception* 9.85% 194.28% 9.93% 179.58% 9.18% 153.03% 11.55% 89.83% 8.25% 112.32% - ---------------------------------------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date: Class A and Class B: 11/19/96; Class C: 03/06/97; Class I: 11/16/01; Class Z: 04/03/98. # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. ++ Effective February 23, 2004, Class II shares were redesignated as Class C shares. For the 12 month period ended September 30, 2007, the SunAmerica Value Class A returned 9.16% compared to 14.45% for the Russell 1000 Value Index and 13.73% for the Russell 3000 Value Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) The Fund has replaced the benchmark used in the Line Graph for the prior fiscal year (the Russell 3000 Value Index) with the Russell 1000 Value Index, which management believes represents a better approximation of performance. - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 111 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica Disciplined Growth Fund For the annual period ended September 30, 2007, the SunAmerica Disciplined Growth Fund Class A returned 33.13% (before maximum sales charge), outperforming its benchmark, the S&P 500 Index*, which returned 16.44%. During the course of the annual period, the Fund changed its name from the SunAmerica Tax Managed Equity Fund to the SunAmerica Disciplined Growth Fund. Stock selection is focused on growth-oriented equities of all capitalization ranges. The Fund will utilize growth, valuation, and behavioral factors in regard to stock selection and portfolio construction. Although equity market conditions were challenging during the fiscal period ended September 30, 2007, U.S. stock indices concluded another year with solid results. Growth stocks led the market higher and the S&P 500 Index finished the period at near record levels. Several macroeconomic factors greatly influenced the investment environment during the fiscal year, including steady corporate spending and profit growth. At the same time, core inflation, a key indicator monitored by the Federal Reserve, remained stable. Companies that do business overseas benefited from strong international economic growth trends and a weakening dollar. While the deteriorating housing market and sub-prime mortgage problems created liquidity concerns in the U.S. credit markets, a reduction in the Federal Funds rate by 50-basis points, to 4.75%, seemed to instill confidence and prompted a significant equity rally. This reduction in the Federal Funds rate and ensuing equity rally allowed most domestic stock indices to finish the annual period on a positive note. The Fund's absolute performance and relative outperformance of its benchmark was primarily due to the combination of overweight exposure and stock selection in the Information Technology space, especially in the Hardware/Equipment sub-sector. Security selection in Industrials and Materials was also additive, as was an underweight in the Financial sector. Conversely, stock selection in the Financial, Consumer Staples and Healthcare groups was a drag on performance as were Energy and Utility underweights. Blue Coat Systems Inc., Apple Inc., NAVTEQ Corp., Precision Castparts Corp., and Alliant Techsystems Inc. were the top contributors during the period. Knight Capital Group Inc. Class A, AerCap Holdings N.V., Polycom Inc., Comcast Corp. Class A and Noven Pharmaceuticals were the leading detractors from performance. - -------- Past performance is no guarantee of future results. * The S&P 500 Index is the Standard & Poor's 500 Composite Stock Price Index, a widely recognized, unmanaged index of common stock prices. Indices are not managed and an investor cannot invest directly into an index. Securities listed may or may not be a part of current Portfolio construction. 112 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Since the Fund's inception on March 1, 1999, $10,000 invested in Disciplined Growth Fund Class A shares would be valued at $13,274. The same amount invested in securities mirroring the performance of the S&P 500 Index would be valued at $14,150. [CHART] Disciplined Growth Class A/#/ S&P 500 Index -------------------- ------------- 3/1/1999 $ 9,427 $10,000 3/31/1999 9,842 10,400 4/30/1999 10,324 10,803 5/31/1999 10,091 10,548 6/30/1999 10,581 11,133 7/31/1999 10,204 10,786 8/31/1999 10,068 10,732 9/30/1999 9,759 10,439 10/31/1999 10,294 11,099 11/30/1999 10,535 11,325 12/31/1999 10,950 11,991 1/31/2000 10,716 11,389 2/29/2000 10,626 11,173 3/31/2000 11,561 12,267 4/30/2000 10,943 11,897 5/31/2000 10,596 11,653 6/30/2000 10,837 11,941 7/31/2000 10,837 11,754 8/31/2000 11,471 12,484 9/30/2000 10,965 11,825 10/31/2000 10,965 11,775 11/30/2000 10,113 10,847 12/31/2000 10,128 10,900 1/31/2001 10,475 11,286 2/28/2001 9,472 10,257 3/31/2001 8,824 9,608 4/30/2001 9,517 10,354 5/31/2001 9,608 10,424 6/30/2001 9,382 10,170 7/31/2001 9,306 10,070 8/31/2001 8,786 9,439 9/30/2001 8,183 8,677 10/31/2001 8,326 8,843 11/30/2001 8,974 9,521 12/31/2001 9,035 9,604 1/31/2002 8,733 9,464 2/28/2002 8,529 9,282 3/31/2002 8,876 9,631 4/30/2002 8,198 9,047 5/31/2002 8,190 8,980 6/30/2002 7,609 8,340 7/31/2002 7,006 7,690 8/31/2002 7,081 7,741 9/30/2002 6,282 6,900 10/31/2002 6,787 7,507 11/30/2002 7,142 7,949 12/31/2002 6,742 7,482 1/31/2003 6,531 7,286 2/28/2003 6,440 7,177 3/31/2003 6,478 7,246 4/30/2003 7,014 7,843 5/31/2003 7,315 8,256 6/30/2003 7,376 8,361 7/31/2003 7,481 8,508 8/31/2003 7,579 8,674 9/30/2003 7,489 8,582 10/31/2003 7,911 9,067 11/30/2003 7,979 9,147 12/31/2003 8,416 9,627 1/31/2004 8,514 9,803 2/29/2004 8,620 9,939 3/31/2004 8,499 9,789 4/30/2004 8,371 9,636 5/31/2004 8,439 9,768 6/30/2004 8,590 9,958 7/31/2004 8,348 9,629 8/31/2004 8,424 9,667 9/30/2004 8,499 9,772 10/31/2004 8,567 9,921 11/30/2004 8,846 10,323 12/31/2004 9,112 10,674 1/31/2005 8,877 10,414 2/28/2005 9,013 10,633 3/31/2005 8,854 10,445 4/30/2005 8,657 10,247 5/31/2005 8,861 10,572 6/30/2005 8,824 10,588 7/31/2005 9,036 10,981 8/31/2005 8,907 10,881 9/30/2005 8,968 10,969 10/31/2005 8,778 10,786 11/30/2005 9,043 11,194 12/31/2005 9,260 11,198 1/31/2006 10,799 11,494 2/28/2006 10,273 11,525 3/31/2006 10,662 11,669 4/30/2006 11,073 11,826 5/31/2006 10,372 11,485 6/30/2006 10,342 11,501 7/31/2006 9,946 11,572 8/31/2006 10,060 11,847 9/30/2006 9,976 12,152 10/31/2006 10,220 12,548 11/30/2006 10,700 12,787 12/31/2006 10,722 12,966 1/31/2007 10,913 13,162 2/28/2007 10,738 12,905 3/31/2007 10,898 13,049 4/30/2007 11,141 13,627 5/31/2007 11,614 14,103 6/30/2007 11,614 13,869 7/31/2007 11,614 13,439 8/31/2007 12,375 13,640 9/30/2007 13,274 14,150
Class A Class B Class C++ ------------------ ------------------ ------------------ Disciplined Average Average Average Growth Annual Cumulative Annual Cumulative Annual Cumulative Fund Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 25.47% 33.13% 28.35% 32.35% 31.22% 32.22% - ------------------------------------------------------------------------- 5 Year Return 14.77% 111.30% 15.19% 104.82% 15.40% 104.69% - ------------------------------------------------------------------------- Since Inception* 3.35% 40.81% 3.43% 33.52% 3.40% 33.29% - -------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date: Class A, Class B and Class C: 03/01/99 # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. ++ Effective February 23, 2004, Class II shares were redesignated as Class C shares. For the 12 month period ended September 30, 2007, the SunAmerica Disciplined Growth Fund Class A returned 25.47% compared to 16.44% for the S&P 500 Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) Performance information that includes a period prior to May 15, 2007 reflects management of the Fund for such period in accordance with the investment goals and principal investment strategies and techniques ("policies") of the Fund as a tax managed fund. Accordingly, any such performance information may not reflect (or may only partially reflect) the management of the Fund in accordance with its current investment goals and policies, depending on the period shown. - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 113 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) SunAmerica International Small-Cap Fund The SunAmerica International Small-Cap Fund Class A returned 26.70% (before maximum sales charge) for the annual period ended September 30, 2007. The Fund outperformed its benchmark, the MSCI EAFE Small Cap Index*, which returned 19.10% for the annual period. Global equity markets over the last 12 months have continued to rise strongly despite the occasional wobble. Small-cap stocks in Europe and Asia rose by 42.7% and 34.5%, respectively; whereas in Japan, small-cap stocks fell by nearly 17%, in U.S. dollar terms. The poor performance can be attributed to a combination of negative earnings surprises, thin liquidity and of course, continual concerns about the pace of global economic growth. In the first calendar quarter of 2007, markets rallied strongly but sold off in the final week of February when the Chinese government made hawkish statements regarding the potential cooling of their local equity market. The markets reflected concerns several times over the last 18 months about the state of the U.S. economy. The emergence of losses in the U.S. subprime mortgage market in the Fund's third fiscal quarter forced the U.S. Federal Reserve to cut interest rates in order to help restore confidence in the market. Stock selection was the primary source of the portfolio's outperformance over its benchmark, with consumer discretionary, financial and industrial sectors providing the strongest contribution. Consumer staples, healthcare and telecommunication services were the only sectors where stock selection detracted from performance. JB Hi-Fi, an electronics retailer in Australia and New Zealand, and Hugo Boss, the German based fashion company, were among the strongest contributors in the consumer discretionary sector. Hellenic Exchanges, a Greek-based holding company of financial market exchanges and Elringklinger, a German-based manufacturer of automobile spare parts, were strong contributors within the financial and industrial sectors, respectively. Japan-based Culture Convenience Club, UK-based Wolfson Microelectronics and Japan-based Park 24 were among the strongest detractors to performance. - -------- Past performance is no guarantee of future results. Investing internationally involves special risks, such as currency fluctuations, and economic and political instability. Diversification does not insure against market loss. * The MSCI EAFE Small Cap Index is a free-float adjusted market capitalization index. It consists of 21 developed market country indices in Europe, Australasia and the Far East. Price indices measure market price performance only, dividends are not considered in price indices. Indices are not managed and an investor cannot invest directly into an index. Securities listed may or may not be a part of current Portfolio construction. 114 SunAmerica Equity Funds COMPARISONS: FUNDS vs. INDEXES -- (unaudited) (continued) Since inception, $10,000 invested in International Small-Cap Class A shares would be valued at $10,558. The same amount invested in securities mirroring the performance of the MSCI EAFE Small-Cap Index would be valued at $10,887. [CHART] International MSCI EAFE Small-Cap Small-Cap Class A/#/ Index -------------------- ------------------- 5/01/2006 $ 9,427 $10,000 5/31/2006 8,650 9,309 6/30/2006 8,431 9,104 7/31/2006 8,213 8,858 8/31/2006 8,311 9,106 9/30/2006 8,333 9,141 10/31/2006 8,673 9,476 11/30/2006 8,959 9,883 12/31/2006 9,336 10,211 1/31/2007 9,578 10,425 2/28/2007 9,608 10,599 3/31/2007 9,970 10,937 4/30/2007 10,294 11,342 5/31/2007 10,558 11,424 6/30/2007 10,596 11,399 7/31/2007 10,603 11,354 8/31/2007 10,181 10,768 9/30/2007 10,558 10,887
Class A Class B Class C ------------------ ------------------ ------------------ International Average Average Average Small-Cap Annual Cumulative Annual Cumulative Annual Cumulative Fund Return Return+ Return Return+ Return Return+ - ---------------- ------- ---------- ------- ---------- ------- ---------- 1 Year Return 19.45% 26.70% 21.95% 25.95% 24.95% 25.95% - ------------------------------------------------------------------------- Since Inception* 3.91% 12.00% 4.92% 11.04% 7.62% 10.96% - -------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been included, the return would have been lower. * Inception date: Class A, Class B and Class C: 05/02/06. # For the purposes of the graph and the accompanying table, it has been assumed that the maximum sales charge, of 5.75% of offering price, was deducted from the initial $10,000 investment in the Fund. For the 12 month period ended September 30, 2007, the SunAmerica International Small-Cap Fund Class A returned 19.45% compared to 19.10% for the MSCI EAFE Small-Cap Index. (The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.) - -------- Performance data quoted represents past performance and is no guarantee of future results. Maximum Sales Charge: Class A: 5.75%, Class B: 4.00% Contingent Deferred Sales Charge (CDSC), Class C: 1.00% CDSC. The fund's daily net asset values are not guaranteed and shares are not insured by the FDIC, the Federal Reserve Board or any other agency. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be higher or lower than the original cost. Current performance may be higher or lower than that shown. Performance as of the most recent month end is available at www.sunamericafunds.com 115 [LOGO] AIG Sun America Mutual Funds Harborside Financial Center 3200 Plaza 5 Jersey City, NJ 07311-4992 Trustees Shareholder Servicing This report is submitted Samuel M. Eisenstat Agent solely for the general Peter A. Harbeck AIG SunAmerica Fund information of Dr. Judith L. Craven Services, Inc. shareholders of the William F. Devin Harborside Financial Funds. Distribution of Stephen J. Gutman Center this report to persons Jeffrey S. Burum 3200 Plaza 5 other than shareholders William J. Shea Jersey City, NJ of the Funds is 07311-4992 authorized only in Officers con-nection with a Vincent M. Marra, Custodian and Transfer currently effective President and Chief Agent pro-spectus, setting Executive Officer State Street Bank and forth details of the Donna M. Handel, Trust Company Funds, which must precede Treasurer P.O. Box 5607 or accom-pany this report. Timothy P. Pettee, Vice Boston, MA 02110 President DELIVERY OF SHAREHOLDER James Nichols, Vice VOTING PROXIES ON TRUST DOCUMENTS President PORTFOLIO SECURITIES The Funds have adopted a Cynthia Gibbons, Vice A description of the policy that allows them President and Chief policies and procedures to send only one copy of Compliance Officer that the Trust uses to a Fund's prospectus, Gregory N. Bressler, determine how to vote proxy material, annual Chief Legal Officer proxies relating to report and semi-annual and Secretary securities held in a report (the "shareholder Gregory R. Kingston, Fund's portfolio which is documents") to Vice President and available in the Trust's shareholders with Assistant Treasurer Statement of Additional multiple accounts Kathleen Fuentes, Information, may be residing at the same Assistant Secretary obtained without charge "household." This Nori L. Gabert, Vice upon request, by calling practice is called President and (800) 858-8850. This householding and reduces Assistant Secretary in-formation is also Fund expenses, which Matthew Hackethal, available from the EDGAR benefits you and other Anti-Money Laundering database on the U.S. shareholders. Unless the Compliance Officer Securities and Ex-change Funds receive John E. Smith Jr., Commission's website at instructions to the Assistant Treasurer http://www.sec.gov. con-trary, you will only receive one copy of the Investment Adviser PROXY VOTING RECORD ON shareholder documents. AIG SunAmerica Asset SUNAMERICA EQUITY FUNDS The Funds will continue Management Corp. Information regarding how to household the Harborside Financial SunAmerica Equity Funds share-holder documents Center voted proxies relating to indefinitely, until we 3200 Plaza 5 securities held in are instructed otherwise. Jersey City, NJ SunAmerica Equity Funds If you do not wish to 07311-4992 during the most recent participate in twelve month period ended householding, please Distributor June 30 is available, contact Shareholder AIG SunAmerica Capital once filed with the U.S. Services at (800) Services, Inc. Securities and Exchange 858-8850 ext. 6010 or Harborside Financial Commission, without send a written request Center charge, upon request, by with your name, the name 3200 Plaza 5 calling (800) 858-8850 or of your fund(s) and your Jersey City, NJ on the U.S. Securities account number(s) to AIG 07311-4992 and Exchange Commission's SunAmerica Mutual Funds website at c/o BFDS, P.O. Box http://www.sec.gov. 219186, Kansas City MO, 64121-9186. We will DISCLOSURE OF QUARTERLY resume individual PORTFOLIO HOLDINGS mailings for your account The Trust is required to within thirty (30) days file its complete of receipt of your schedule of portfolio request. holdings with the U.S. Securities and Exchange Commission for its first and third fiscal quarters on Form N-Q. The Trust's Forms N-Q are available on the U.S. Securities and Exchange Commission's website at http://www.sec.gov. You can also review and obtain copies of the Forms N-Q at the U.S. Securities and Exchange Com-mission's Public Reference Room in Wash-ington, DC (information on the operation of Public Reference Room may be obtained by calling 1-800-SEC-0330).
116 Distributed by: AIG SunAmerica Capital Services, Inc. Investors should carefully consider the investment objectives, risks, charges and expenses of any mutual fund before investing. This and other important information is contained in the prospectus, which can be obtained from your financial adviser or from the AIG SunAmerica Sales Desk at 800-858-8850, ext. 6003. Read the prospectus carefully before investing. www.sunamericafunds.com EQANN - 9/07 [LOGO] [LOGO] Item 2. Code of Ethics The SunAmerica Equity Funds (the "registrant") has adopted a Code of Ethics applicable to its Principal Executive and Principal Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. Item 3. Audit Committee Financial Expert. The registrant's Board of Trustees has determined that William J. Shea, the Chairman of the registrant's Audit Committee, qualifies as an audit committee financial expert, as defined in the instructions to Item 3(a) of Form N-CSR. Mr. Shea is considered to be "independent" for purposes of Item 3(a)(2) of Form N-CSR. Item 4. Principal Accountant Fees and Services. (a)--(d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrant's principal accountant were as follows: 2006 2007 (a) Audit Fees ....................$ 241,000 $ 234,410 (b) Audit-Related Fees ............$ 0 $ 0 (c) Tax Fees ......................$ 71,550 $ 81,000 (d) All Other Fees ................$ 0 $ 0 Audit Fees include amounts related to the audit of the registrant's annual financial statements and services normally provided by the principal accountant in connection with statutory and regulatory filings. Tax Fees principally include tax compliance, tax advice, tax planning and preparation of tax returns. Aggregate fees billed to the investment adviser and Adviser Affiliates (as defined below in Item 4(e)) that are required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for the last two fiscal years for professional services rendered by the registrant's principal accountant were as follows: 2006 2007 (b) Audit-Related Fees ............$ 0 $ 0 (c) Tax Fees ......................$ 0 $ 0 (d) All Other Fees ................$ 1,768,468 $ 1,927,000 All other fees include amounts related to a SAS 70 Report on the Processing of Transactions by Service Organizations. (e) (1) The registrant's audit committee pre-approves all audit services provided by the registrant's principal accountant for the registrant and all non-audit services provided by the registrant's principal accountant for the registrant, its investment adviser and any entity controlling, controlled by, or under common control with the investment adviser ("Adviser Affiliates") that provides ongoing services to the registrant, if the engagement by the investment adviser or Adviser Affiliate relates directly to the operations and financial reporting of the registrant. The audit committee has not presently established any pre-approval policies and procedures that permit the pre-approval of the above services other than by the full audit committee. Certain de minimis exceptions are allowed for non- audit services in accordance with Rule 2-01(c)(7)(i)(C) of Regulation S-X as set forth in the registrant's audit committee charter. (2) No services included in (b)-(d) above in connection with fees billed to the registrant or the investment adviser or Adviser Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) Not applicable. (g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant's principal accountant for non-audit services rendered to the registrant, its investment adviser, and Adviser Affiliates that provides ongoing services to the registrant for 2007 and 2006 were $1,927,000 and $1,856,118, respectively. (h) Non-audit services rendered to the registrant's investment adviser and any Adviser Affiliate that provides ongoing services to the registrant that were not pre-approved pursuant to Paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X were considered by the registrant's audit committee as to whether they were compatible with maintaining the principal accountant's independence. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. Schedule of Investments. Included in Item 1 to the Form. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of Matters to a Vote of Security Holders. There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Trustees that were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a- 101), or this Item 10. Item 11. Controls and Procedures. (a) An evaluation was performed within 90 days of the filing of this report, under the supervision and with the participation of the registrant's management, including the President and Treasurer, of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as defined under Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)). Based on that evaluation, the registrant's management, including the President and Treasurer, concluded that the registrant's disclosure controls and procedures are effective. (b) There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's last fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal contro1 over financial reporting. Item 12. Exhibits. (a) (1) Code of Ethics applicable to its Principal Executive and Principle Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.406. Code of Ethics. (2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes- Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SunAmerica Equity Funds By: /s/ Vincent M. Marra ------------------- Vincent M. Marra President Date: December 7, 2006 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/ Vincent M. Marra ------------------- Vincent M. Marra President Date: December 7, 2006 By: /s/ Donna M. Handel ------------------- Donna M. Handel Treasurer Date: December 7, 2006 EX-99.CODE ETH 2 dex99codeeth.txt CODE OF ETHICS Exhibit 99_406 ANCHOR SERIES TRUST AIG SERIES TRUST SUNAMERICA EQUITY FUNDS SUNAMERICA FOCUSED SERIES, INC. SUNAMERICA INCOME FUNDS SUNAMERICA MONEY MARKET FUNDS, INC. SUNAMERICA SENIOR FLOATING RATE FUND, INC. SUNAMERICA FOCUSED ALPHA GROWTH FUND, INC. SUNAMERICA FOCUSED ALPHA LARGE-CAP FUND, INC. (collectively, the "Funds") CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND PRINCIPAL ACCOUNTING OFFICERS I. Introduction The Boards of Directors/Trustees of the Funds (the "Boards") have adopted this Code of Ethics (this "Code") pursuant to Section 406 of the Sarbanes-Oxley Act applicable to the Funds' Principal Executive Officer and Principal Accounting Officer (the "Covered Officers" each of whom is set forth in Exhibit A) for the purpose of promoting: . Honest and ethical conduct, including the ethical handling of conflicts of interest between personal and professional relationships; . Full, fair, accurate, timely and understandable disclosure; . Compliance with applicable laws and governmental rules and regulations; . The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and . Accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest A "conflict of interest" occurs when a Covered Officer's private interest improperly interferes with the interests of, or his or her service to, a Trust. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Trust. Certain conflicts of interest arise out of the relationships between Covered Officers and the Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended (the "Investment Company Act") and the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Funds because of their status as "affiliated persons" of the Funds. The compliance programs and procedures of the Funds and the Funds' investment adviser, AIG SunAmerica Asset Management Corp. ("SAAMCo"), are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between, the Funds and SAAMCo, of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Funds or for SAAMCo, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Funds and SAAMCo. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Funds and SAAMCo and is consistent with the performance by the Covered Officers of their duties as officers of the Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Boards that the Covered Officers may also be officers or employees of other investment companies advised by SAAMCo. In particular, each Covered Officer must: . Not use his or her personal influence or personal relationships to influence investment decisions or financial reporting by a Trust whereby the Covered Officer would benefit personally to the detriment of the Trust; . Not cause a Trust to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Trust; and . Report at least annually to the Ethics Committee any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest. There are certain potential conflict of interest situations that should be discussed with the Ethics Committee if material. Examples of these include: . Service as a director on the board of any company; . The receipt of any non-nominal gifts; . The receipt of any entertainment from any company with which a Trust has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; 2 . Any ownership interest in, or any consulting or employment relationship with, any of the Funds' service providers, other than SAAMCo, the Funds' principal underwriter or any affiliated person thereof; . A direct or indirect financial interest in commissions, transaction charges or spreads paid by a Trust for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. Disclosure and Compliance . Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Funds; . Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including to the Boards and auditors, or to governmental regulators and self-regulatory organizations; . Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Funds and SAAMCo with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents that the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and . It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. Reporting and Accountability Each Covered Officer must: . Upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Boards that he or she has received, read and understands the Code; . Annually thereafter affirm to the Boards that he or she has complied with the requirements of the Code; . Not retaliate against any other Covered Officer or affiliated person of the Funds for reports of potential violations of this Code that are made in good faith; and . Notify the Ethics Committee promptly if he or she knows of any violation of this Code. Failure to do so is itself a violation of this Code. 3 The Ethics Committee is responsible for applying this Code to specific situations in which questions are presented to it and has the authority to interpret this Code in any particular situation. The Ethics Committee will also consider waivers sought by the Covered Officers. The Funds will act according to the following procedures in investigating and enforcing this Code: . The Ethics Committee will take all appropriate action to investigate any potential violations reported to it; . If, after such investigation, the Ethics Committee believes that no violation has occurred, the Ethics Committee is not required to take any further action; . If the Ethics Committee determines that a violation has occurred, it will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of SAAMCo or its board; or a recommendation to dismiss the Covered Officer; . The Ethics Committee will be responsible for granting waivers, as appropriate; . The Ethics Committee will inform the Boards of violations or waivers of this Code; and . Any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. Other Policies and Procedures This Code shall be the sole Code of Ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to investment companies thereunder. Insofar as other policies or procedures of the Funds, SAAMCo, the Funds' principal underwriter or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Code of Ethics of the Funds, SAAMCo and the Funds' principal underwriter, under Rule 17j-1 of the Investment Company Act, and SAAMCo's more detailed policies and procedures set forth in the SAAMCo Compliance Procedures Manual are separate requirements applying to Covered Officers and others, and are not part of this Code. VI. Amendments Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Boards. VII. Confidentiality 4 All reports and records prepared or maintained pursuant to this Code shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Funds, the Ethics Committee, SAAMCo and the Boards and their independent counsel. VIII. Internal Use The Code is intended solely for internal use by the Funds and does not constitute an admission, by or on behalf of the Funds, as to any fact, circumstance or legal conclusion. Date: August 7, 2003 5 Exhibit A Vincent Marra, as President of the Funds Donna M. Handel, as Treasurer of the Funds 6 EX-99.CERT 3 dex99cert.txt CERTIFICATION PURSUANT TO SECTION 302 Exhibit 99.CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Vincent M. Marra, certify that: 1. I have reviewed this report on Form N-CSR of SunAmerica Equity Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 16, 2007 /s/ Vincent M. Marra ------------------- Vincent M. Marra President CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Donna M. Handel, certify that: 1. I have reviewed this report on Form N-CSR of SunAmerica Equity Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 16, 2007 /s/ Donna M. Handel ------------------- Donna M. Handel Treasurer EX-99.906.CERT 4 dex99906cert.txt CERTIFICATION PURSUANT TO SECTION 906 Exhibit 99.906.CERT CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT Vincent M. Marra, President, and Donna M. Handel, Treasurer of SunAmerica Equity Funds (the "registrant"), each certify to the best of his or her knowledge that: 1. The attached Form N-CSR report of the registrant fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in such N-CSR report fairly represents, in all material respects, the financial conditions and results of operations of the registrant as of, and for, the periods presented in the report. Dated: November 16, 2007 /s/ Vincent M. Marra --------------- Vincent M. Marra President /s/ Donna M. Handel --------------- Donna M. Handel Treasurer -----END PRIVACY-ENHANCED MESSAGE-----