<PAGE>
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PROSPECTUS
JULY 15, 1999
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[LOGO]
SEASONS SERIES TRUST
- MULTI-MANAGED GROWTH PORTFOLIO
- MULTI-MANAGED MODERATE GROWTH PORTFOLIO
- MULTI-MANAGED INCOME/EQUITY PORTFOLIO
- MULTI-MANAGED INCOME PORTFOLIO
- ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO
- STOCK PORTFOLIO
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITES OR PASSED
UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
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TABLE OF CONTENTS
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<TABLE>
<S> <C>
TRUST HIGHLIGHTS.................................. 3
Q&A....................................... 3
MORE INFORMATION ABOUT THE PORTFOLIOS............. 10
Investment Strategies..................... 10
GLOSSARY.......................................... 14
Investment Terminology.................... 14
Risk Terminology.......................... 16
MANAGEMENT........................................ 18
Investment Adviser and Manager............ 18
Information about the Subadvisers......... 19
Portfolio Management...................... 20
Custodian, Transfer and Dividend Paying
Agent.................................. 21
ACCOUNT INFORMATION............................... 22
Transaction Policies...................... 22
Dividend Policies and Taxes............... 23
OTHER INFORMATION................................. 23
Year 2000................................. 23
FINANCIAL HIGHLIGHTS.............................. 24
FOR MORE INFORMATION.............................. 25
</TABLE>
2
<PAGE>
MANAGED COMPONENTS -- the four distinct, actively managed investment components
in which all of the assets of the Multi-Managed Seasons Portfolios are invested.
The percentage each Multi-Managed Seasons Portfolio allocates to a Managed
Component differs based upon the Portfolio's investment objective.
CAPITAL APPRECIATION/GROWTH is an increase in the market value of securities
held.
INCOME is interest payments from bonds or dividends from stocks.
YIELD is the annual dollar income received on an investment expressed as a
percentage of the current or average price.
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TRUST HIGHLIGHTS
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The following questions and answers are designed to provide you with information
about Seasons Series Trust (the "Trust"), and to give you an overview of certain
of the Trust's separate investment series ("Portfolios") and their investment
goals and principal strategies. This Prospectus describes six of the Portfolios,
which we call the "Seasons Portfolios", available through Seasons Variable
Annuity Contract. More complete investment information is provided in the chart,
under "More Information About the Portfolios," which is on page 10, and the
glossary that follows on page 14.
Q: WHAT ARE THE PORTFOLIOS' INVESTMENT GOALS AND STRATEGIES?
A: Each Portfolio operates as a separate mutual fund and has its own investment
goal and a strategy for pursuing it. A Portfolio's investment goal may be
changed by the Board of Trustees without shareholder approval, but you will
be notified of any change. There can be no assurance that any Portfolio's
investment goal will be met or that the net return on an investment in a
Portfolio will exceed what could have been obtained through other investment
or savings vehicles.
<TABLE>
<CAPTION>
SEASONS PORTFOLIOS
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PORTFOLIO INVESTMENT GOAL STRATEGY
- ---------------------------------------- ---------------------------------------- ----------------------------------------
<S> <C> <C>
MULTI-MANAGED GROWTH PORTFOLIO long-term growth of capital asset allocation through Managed
Components
MULTI-MANAGED MODERATE GROWTH PORTFOLIO long-term growth of capital, with asset allocation through Managed
capital preservation as a secondary Components
objective
MULTI-MANAGED INCOME/ EQUITY PORTFOLIO conservation of principal while asset allocation through Managed
maintaining some potential for long-term Components
growth of capital
MULTI-MANAGED INCOME PORTFOLIO capital preservation asset allocation through Managed
Components
ASSET ALLOCATION: DIVERSIFIED GROWTH capital appreciation investment primarily through a strategic
PORTFOLIO allocation of approximately 80% (with a
range of 65-95%) of its assets to equity
securities and approximately 20% (with a
range of 5-35%) of its assets to fixed
income securities
STOCK PORTFOLIO long-term capital appreciation, with a investment primarily in the common
secondary objective of increasing stocks of a diversified group of well-
dividend income established growth companies
</TABLE>
3
<PAGE>
Each of the Seasons MULTI-MANAGED GROWTH, MULTI-MANAGED MODERATE GROWTH,
MULTI-MANAGED INCOME/EQUITY and MULTI-MANAGED INCOME PORTFOLIOS (referred to
hereinafter as the "Multi-Managed Seasons Portfolios") allocates all of its
assets among three or four distinct MANAGED COMPONENTS, each managed by a
separate Manager and each with its own investment strategy. The three Managers
of the Multi-Managed Seasons Portfolios are SunAmerica Asset Management Corp.
("SunAmerica"), Janus Capital Corporation ("Janus") and Wellington Management
Company, LLP ("WMC"). None of the Multi-Managed Seasons Portfolios contains a
passively managed component. The four current Managed Components are
SUNAMERICA/AGGRESSIVE GROWTH, JANUS/GROWTH, SUNAMERICA/BALANCED and WMC/FIXED
INCOME. The Managed Components each invest to varying degrees, according to
their investment strategy in a diverse portfolio of securities including, common
stocks, securities with equity characteristics (such as preferred stocks,
warrants or fixed income securities convertible into common stock), corporate
and U.S. government fixed income securities, money market instruments and/or
cash or cash equivalents. The assets of each Managed Component that comprise a
particular Multi-Managed Seasons Portfolio belong to that Portfolio. The term
"Manager" as used herein shall mean either SunAmerica, the Investment Adviser to
the Trust, or the other registered investment advisers that serve as Subadvisers
to the Trust, as the case may be.
Although each Multi-Managed Seasons Portfolio has a distinct investment
objective and allocates its assets in varying percentages among the Managed
Components in furtherance of that objective, each Manager intends to manage its
respective Managed Component(s) in the same general manner regardless of the
objective of the Multi-Managed Seasons Portfolio. However, the equity/debt
weightings of the SUNAMERICA/BALANCED component under normal market conditions
will vary depending on the objective of the Multi-Managed Seasons Portfolio. The
following chart shows the allocation of the assets of each Multi-Managed Seasons
Portfolio among Managed Components.
<TABLE>
<CAPTION>
SUNAMERICA/ JANUS/
AGGRESSIVE GROWTH GROWTH SUNAMERICA/ WMC/FIXED INCOME
PORTFOLIO COMPONENT COMPONENT BALANCED COMPONENT COMPONENT
- ----------------------------------------- ----------------- ------------ ------------------ ----------------
<S> <C> <C> <C> <C>
MULTI-MANAGED GROWTH PORTFOLIO 20% 40% 20% 20%
MULTI-MANAGED MODERATE GROWTH PORTFOLIO 18% 28% 18% 36%
MULTI-MANAGED INCOME/EQUITY PORTFOLIO 0% 18% 28% 54%
MULTI-MANAGED INCOME PORTFOLIO 0% 8% 17% 75%
</TABLE>
Differences in investment returns among the Managed Components may cause the
actual percentages to vary over the course of a calendar quarter from the
targets listed in the chart. Accordingly, the assets of each Multi-Managed
Seasons Portfolio will be reallocated or "rebalanced" among the Managed
Components on at least a quarterly basis to restore the target allocations for
such Portfolio.
4
<PAGE>
A "GROWTH" PHILOSOPHY - that of investing in securities believed to offer the
potential for capital appreciation - focuses on securities of companies that are
considered to have a historical record of above-average growth rate, significant
growth potential, above-average earnings growth or value, the ability to sustain
earnings growth, or that offer proven or unusual products or services, or
operate in industries experiencing increasing demand.
"HIGH-QUALITY" INSTRUMENTS have a very strong capacity to pay interest and repay
principal; they reflect the issuers' high creditworthiness and low risk of
default.
Q: WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE PORTFOLIOS?
A: The following section describes the principal risks of each Portfolio, and
the charts beginning on page 11 describes various additional risks.
RISKS OF INVESTING EQUITY SECURITIES
The MULTI-MANAGED GROWTH, MULTI-MANAGED MODERATE GROWTH, ASSET ALLOCATION:
DIVERSIFIED GROWTH and STOCK PORTFOLIOS invest primarily in equity
securities. In addition, the MULTI-MANAGED INCOME/EQUITY and MULTI-MANAGED
INCOME PORTFOLIOS invest significantly in equities. As with any equity fund,
the value of your investment in any of these Portfolios may fluctuate in
response to stock market movements. In addition, individual stocks selected
for any of these Portfolios may underperform the market generally. Growth
stocks are historically volatile, which will particularly affect the
MULTI-MANAGED GROWTH, MULTI-MANAGED MODERATE GROWTH, ASSET ALLOCATION:
DIVERSIFIED GROWTH and STOCK PORTFOLIOS.
RISKS OF INVESTING IN BONDS
The MULTI-MANAGED INCOME/EQUITY and MULTI-MANAGED INCOME PORTFOLIOS invest
primarily in bonds. In addition, MULTI-MANAGED GROWTH, MULTI-MANAGED
MODERATE GROWTH and ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIOS each
invests significantly in bonds. As a result, as with any bond fund, the
value of your investment in these Portfolios may go up or down in response
to changes in interest rates or defaults (or even the potential for future
default) by bond issuers. To the extent a Portfolio is invested in bonds,
movements in the bond market generally may affect its performance.
RISKS OF INVESTING IN JUNK BONDS
Each of the Portfolios except the STOCK PORTFOLIO may invest in varying
degrees in high yield/high risk securities, also known as "junk bonds,"
which are considered speculative. While the Managers try to diversify a
Portfolio and to engage in a credit analysis of each junk bond issuer in
which a Portfolio invests, junk bonds carry a substantial risk of default or
changes in the issuer's creditworthiness, or they may already be in default.
A junk bond's market price may fluctuate more than higher-quality securities
and may decline significantly. In addition, it may be more difficult for a
Portfolio to dispose of junk bonds or to determine their value. Junk bonds
may contain redemption or call provisions that, if exercised during a period
of declining interest rates, may force a Portfolio to replace the security
with a lower yielding security. If this occurs, it will result in a
decreased return for you.
5
<PAGE>
RISKS OF INVESTING INTERNATIONALLY
All of the Portfolios may invest in foreign securities. These securities may
be denominated in currencies other than U.S. dollars. Foreign investing
presents special risks, particularly in certain emerging market countries.
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.
RISKS OF INVESTING IN SMALLER COMPANIES
Each Portfolio may invest in smaller companies. Stocks of smaller companies
may be more volatile than, and not as liquid as, those of larger companies.
This will particularly affect the MULTI-MANAGED GROWTH, MULTI-MANAGED
MODERATE GROWTH and ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIOS.
RISKS OF INVESTING IN "NON-DIVERSIFIED" PORTFOLIOS
Each Multi-Managed Seasons Portfolio is "non-diversified," which means that
each can invest a larger portion of its assets in the stock of a single
company than can some other mutual funds. By concentrating in a smaller
number of stocks, a Portfolio's risk is increased because the effect of each
stock on the Portfolio's performance is greater.
ADDITIONAL PRINCIPAL RISKS
Finally, shares of Portfolios are not bank deposits and are not guaranteed
or insured by any bank, government entity or the Federal Deposit Insurance
Corporation. As with any mutual fund, there is no guarantee that a Portfolio
will be able to achieve its investment goals. If the value of the assets of
a Portfolio goes down, you could lose money.
Q: HOW HAVE THE SEASONS PORTFOLIOS PERFORMED HISTORICALLY?
A: The following Risk/Return Bar Charts and Tables provide some indication of
the risks of investing in the Seasons Portfolios by comparing the Seasons
Portfolios' performance with those of an appropriate market index for the
calendar years presented. Fees and expenses incurred at the contract level
are not reflected in the bar chart. If these amounts were reflected, returns
would be less than those shown. Of course, past performance is not
necessarily an indication of how a Seasons Portfolio will perform in the
future.
6
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MULTI-MANAGED GROWTH PORTFOLIO
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1998 31.45%
</TABLE>
During the one year period shown in the bar chart, the highest return for a
quarter was 21.27% (quarter ended 12/31/98) and the lowest return for a quarter
was -6.23% (quarter ended 09/30/98). For the most recent calendar quarter ended
6/30/99 the return was 3.95%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST RETURN SINCE
(AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1998) ONE YEAR INCEPTION***
<S> <C> <C>
----------------------------------------------------------------------------------
Multi-Managed Growth Portfolio 31.45% 30.16%
----------------------------------------------------------------------------------
Blended Benchmark Index* 16.59% 23.98%
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S&P 500-Registered Trademark-** 28.58% 36.28%
----------------------------------------------------------------------------------
</TABLE>
* The Blended Benchmark Index consists of 51% Standard & Poor's 500 Composite
Stock Price Index (S&P 500-Registered Trademark-), 27% Lehman Brothers
Aggregate Index, 20% Russell 2000-Registered Trademark- Index and 2%
Treasury Bills. The Lehman Brothers Aggregate Index provides a broad view of
the performance of the U.S. fixed income market. The Lehman Brothers
Aggregate Index provides a broad review of the performance of the U.S. fixed
income market. The Russell 2000-Registered Trademark- Index comprises the
smallest 2000 companies in the Russell 3000-Registered Trademark- Index and
is widely recognized as representative of small-cap growth stocks. Treasury
bills are short-term securities with maturities of one year or less issued
by the U.S. government.
** The Standards & Poors 500-Registered Trademark- Composite Stock Price Index
(S&P 500-Registered Trademark-) is an unmanaged, weighted index of 500 large
company stocks that is widely recognized as representative of the
performance of the U.S. stock market.
*** Inception date for the Portfolio is April 15, 1997.
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MULTI-MANAGED MODERATE GROWTH PORTFOLIO
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1998 25.07%
</TABLE>
During the one year period shown in the bar chart, the highest return for a
quarter was 16.24% (quarter ended 12/31/98) and the lowest return for a quarter
was -4.20% (quarter ended 09/30/98). For the most recent calendar quarter ended
6/30/99 the return was 2.84%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST RETURN SINCE
(AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1998) ONE YEAR INCEPTION***
<S> <C> <C>
----------------------------------------------------------------------------------
Multi-Managed Moderate Growth Portfolio 25.07% 25.23%
----------------------------------------------------------------------------------
Blended Benchmark Index* 14.43% 20.83%
----------------------------------------------------------------------------------
S&P 500-Registered Trademark-** 28.58% 36.28%
----------------------------------------------------------------------------------
</TABLE>
* The Blended Benchmark Index consists of 51% Standard & Poor's 500 Composite
Stock Price Index (S&P 500-Registered Trademark-), 27% Lehman Brothers
Aggregate Index, 20% Russell 2000-Registered Trademark- Index and 2%
Treasury Bills. The Lehman Brothers Aggregate Index provides a broad view of
the performance of the U.S. fixed income market. The Lehman Brothers
Aggregate Index provides a broad review of the performance of the U.S. fixed
income market. The Russell 2000-Registered Trademark- Index comprises the
smallest 2000 companies in the Russell 3000-Registered Trademark- Index and
is widely recognized as representative of small-cap growth stocks. Treasury
bills are short-term securities with maturities of one year or less issued
by the U.S. government.
** The Standards & Poors 500-Registered Trademark- Composite Stock Price Index
(S&P 500-Registered Trademark-) is an unmanaged, weighted index of 500 large
company stocks that is widely recognized as representative of the
performance of the U.S. stock market.
*** Inception date for the Portfolio is April 15, 1997.
7
<PAGE>
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MULTI-MANAGED INCOME/EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1998 19.13%
</TABLE>
During the one year period shown in the bar chart, the highest return for a
quarter was 7.95% (quarter ended 12/31/98) and the lowest return for a quarter
was 0.49% (quarter ended 09/30/98). For the most recent calendar quarter ended
6/30/99 the return was 1.05%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST RETURN SINCE
(AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1998) ONE YEAR INCEPTION****
<S> <C> <C>
----------------------------------------------------------------------------------
Multi-Managed Income/Equity Portfolio 19.13% 19.64%
----------------------------------------------------------------------------------
Blended Benchmark Index* 15.51% 18.79%
----------------------------------------------------------------------------------
S&P 500-Registered Trademark-** 28.58% 36.28%
----------------------------------------------------------------------------------
Lehman Brothers Aggregate Index*** 8.69% 10.87%
----------------------------------------------------------------------------------
</TABLE>
* The Blended Benchmark Index consists of 51% Standard & Poor's 500 Composite
Stock Price Index (S&P 500-Registered Trademark-), 27% Lehman Brothers
Aggregate Index, 20% Russell 2000-Registered Trademark- Index and 2%
Treasury Bills. The Lehman Brothers Aggregate Index provides a broad view
of the performance of the U.S. fixed income market. The Russell
2000-Registered Trademark- Index comprises the smallest 2000 companies in
the Russell 3000-Registered Trademark- Index and is widely recognized as
representative of small-cap growth stocks. Treasury bills are short-term
securities with maturities of one year or less issued by the U.S.
government.
** The Standards & Poors 500-Registered Trademark- Composite Stock Price Index
(S&P 500-Registered Trademark-) is an unmanaged, weighted index of 500
large company stocks that is widely recognized as representative of the
performance of the U.S. stock market.
*** The Lehman Brothers Aggregate Index provides a broad review of the
performance of the U.S. fixed income market.
**** Inception date for the Portfolio is April 15, 1997.
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MULTI-MANAGED INCOME PORTFOLIO
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1998 13.58%
</TABLE>
During the one year period shown in the bar chart, the highest return for a
quarter was 4.10% (quarter ended 12/31/98) and the lowest return for a quarter
was 2.07% (quarter ended 09/30/98). For the most recent calendar quarter ended
6/30/99 the return was -0.17%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST RETURN SINCE
(AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1998) ONE YEAR INCEPTION***
<S> <C> <C>
----------------------------------------------------------------------------------
Multi-Managed Income Portfolio 13.58% 15.31%
----------------------------------------------------------------------------------
Blended Benchmark Index* 12.24% 14.96%
----------------------------------------------------------------------------------
Lehman Brothers Aggregate Index** 8.69% 10.87%
----------------------------------------------------------------------------------
</TABLE>
* The Blended Benchmark Index consists of 51% Standard & Poor's 500 Composite
Stock Price Index (S&P 500-Registered Trademark-), 27% Lehman Brothers
Aggregate Index, 20% Russell 2000-Registered Trademark- Index and 2%
Treasury Bills. The Lehman Brothers Aggregate Index provides a broad view of
the performance of the U.S. fixed income market. The Russell
2000-Registered Trademark- Index comprises the smallest 2000 companies in
the Russell 3000-Registered Trademark- Index and is widely recognized as
representative of small-cap growth stocks. Treasury bills are short-term
securities with maturities of one year or less issued by the U.S.
government.
** The Lehman Brothers Aggregate Index provides a broad review of the
performance of the U.S. fixed income market.
*** Inception date for the Portfolio is April 15, 1997.
8
<PAGE>
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ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1998 13.43%
</TABLE>
During the one year period shown in the bar chart, the highest return for a
quarter was 15.54% (quarter ended 12/31/98) and the lowest return for a quarter
was -9.81% (quarter ended 09/30/98). For the most recent calendar quarter ended
6/30/99 the return was 4.28%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST RETURN SINCE
(AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1998) ONE YEAR INCEPTION***
<S> <C> <C>
----------------------------------------------------------------------------------
Asset Allocation: Diversified Growth Portfolio 13.43% 15.24%
----------------------------------------------------------------------------------
Blended Benchmark Index* 23.30% 26.46%
----------------------------------------------------------------------------------
S&P 500-Registered Trademark-** 28.58% 36.28%
----------------------------------------------------------------------------------
</TABLE>
* The Blended Benchmark Index consists of 51% Standard & Poor's 500 Composite
Stock Price Index (S&P 500-Registered Trademark-), 27% Lehman Brothers
Aggregate Index, 20% Russell 2000-Registered Trademark- Index and 2%
Treasury Bills. The Lehman Brothers Aggregate Index provides a broad view of
the performance of the U.S. fixed income market. The Russell
2000-Registered Trademark- Index comprises the smallest 2000 companies in
the Russell 3000-Registered Trademark- Index and is widely recognized as
representative of small-cap growth stocks. Treasury bills are short-term
securities with maturities of one year or less issued by the U.S.
government.
** The Standards & Poors 500-Registered Trademark- Composite Stock Price Index
(S&P 500-Registered Trademark-) is an unmanaged, weighted index of 500 large
company stocks that is widely recognized as representative of the
performance of the U.S. stock market.
*** Inception date for the Portfolio is April 15, 1997.
- --------------------------------------------------------------------------------
STOCK PORTFOLIO
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1998 27.24%
</TABLE>
During the one year period shown in the bar chart, the highest return for a
quarter was 22.80% (quarter ended 12/31/98) and the lowest return for a quarter
was -11.25% (quarter ended 09/30/98). For the most recent calendar quarter ended
6/30/99 the return was 5.80%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST RETURN SINCE
(AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1998) ONE YEAR INCEPTION**
<S> <C> <C>
----------------------------------------------------------------------------------
Stock Portfolio 27.24% 33.52%
----------------------------------------------------------------------------------
S&P 500-Registered Trademark-* 28.58% 36.28%
----------------------------------------------------------------------------------
</TABLE>
* The Standards & Poors 500-Registered Trademark- Composite Stock Price Index
(S&P 500-Registered Trademark-) is an unmanaged, weighted index of 500 large
company stocks that is widely recognized as representative of the
performance of the U.S. stock market.
** Inception date for the Portfolio is April 15, 1997.
9
<PAGE>
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MORE INFORMATION ABOUT THE PORTFOLIOS
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The charts provided below summarize information about the investment strategies
that each Managed Component and Seasons Portfolio uses. We have included a
glossary to define the investment and risk terminology that we have used in the
charts and throughout this Prospectus. You should consider your ability to
assume the risks involved before investing in a Portfolio through the Seasons
Variable Annuity Contract. You should be aware that if you purchase Seasons
Variable Annuity Contract, you will not invest directly in one of the Seasons
Portfolios. Instead, the Seasons Variable Annuity Contract offers four variable
investment "Strategies," each of which invests in three of the six Seasons
Portfolios. The allocation of assets among the Portfolios will vary depending on
the objective of the Strategy.
Four of the Seasons Portfolios are Multi-Managed Seasons Portfolios, which means
that they pursue their investment goals by allocating their assets among three
or four Managed Components, as indicated in the chart on page 4. If you invest
in one of the Multi-Managed Seasons Portfolios, it's important for you to
understand how the chart provided below applies specifically to your investment.
To summarize the allocation strategy, because the MULTI-MANAGED GROWTH and
MULTI-MANAGED MODERATE GROWTH PORTFOLIOS seek long-term growth of capital, each
therefore allocates a relatively larger percentage of its assets to the
SUNAMERICA/AGGRESSIVE GROWTH and JANUS/GROWTH components than do the other two
Multi-Managed Seasons Portfolios. In contrast, the MULTI-MANAGED INCOME/EQUITY
and MULTI-MANAGED INCOME PORTFOLIOS focus on preservation of principal or
capital and therefore allocate a relatively larger percentage of their assets to
the SUNAMERICA/BALANCED and WMC/FIXED INCOME components. The MULTI-MANAGED
INCOME/EQUITY and MULTI-MANAGED INCOME PORTFOLIOS do not allocate any percentage
of their assets to the SUNAMERICA/AGGRESSIVE GROWTH component.
You should carefully review the investment objectives and policies of each
Multi-Managed Seasons Portfolio to understand how each Managed Component applies
to an investment in any of the Multi-Managed Season Portfolios. For example, if
you invest in a Strategy that invests heavily in the MULTI-MANAGED INCOME
PORTFOLIO, you should be aware that this Portfolio distributes its assets among
the JANUS/GROWTH component, the SUNAMERICA/BALANCED component and the WMC/FIXED
INCOME component in a ratio of 8%/17%/75%. When reviewing the charts provided
below, please keep in mind how the investment strategies and risks of each of
the Managed Components applies to your investment. You should also bear in mind
when reviewing the chart that the MULTI-MANAGED INCOME PORTFOLIO invests three
quarters of its assets in the WMC/FIXED INCOME component and pay close attention
to that component's investment strategies and risks.
10
<PAGE>
SEASONS PORTFOLIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SUNAMERICA/ SUNAMERICA/ WMC/FIXED ASSET ALLOCATION:
AGGRESSIVE GROWTH JANUS/GROWTH BALANCED INCOME DIVERSIFIED STOCK PORTFOLIO
COMPONENT COMPONENT COMPONENT COMPONENT GROWTH PORTFOLIO
What are the equity securities common stocks equity securities U.S. and foreign strategic common stock of
Portfolio's or of small, lesser selected for of mid- to fixed income allocation of well-established
Managed known or new their growth large-cap securities of approximately 80% growth companies
Component's growth companies potential companies varying (with a range of (at least 65% of
principal or industries, believed to be maturities and 65-95%) of its total assets)
investments such as undervalued, and risk/ return assets to equity
(under normal technology, long-term bonds characteristics securities and
market telecommunications, and other debt (at least 80% approximately 20%
conditions)? media and securities; investment grade (with a range of
healthcare neutral securities and at 5-35%) of its
equity/debt least 85% U.S. assets to fixed
weightings of dollar income securities
70%/30% for denominated)
Multi-Managed
Growth and
Moderate Growth
Portfolios;
50%/50% for
Multi-Managed
Income/ Equity
and Income
Portfolios
(actual
weightings may
differ)
What are the - stock market - stock market - stock and bond - bond market - stock market - stock market
Portfolio's or volatility volatility market volatility volatility volatility
Managed - securities - securities volatility - securities - securities - securities
Component's selection selection - securities selection selection selection
principal risks? - growth stocks - growth stocks selection - interest rate - growth stocks - growth stocks
- small and mid- - junk bonds - interest rate fluctuations - foreign - foreign
market - small and mid- fluctuations - non-diversification exposure exposure
capitalization market - non-diversification - small and mid-
- non-diversification capitalization market
- non-diversification capitalization
What other
investments can
the Portfolio or
Managed Component
use?
- - Large company Yes See principal See principal No See principal See principal
stocks investments investments investments investments
section above section above section above section above
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
SUNAMERICA/ SUNAMERICA/ WMC/FIXED ASSET ALLOCATION:
AGGRESSIVE GROWTH JANUS/GROWTH BALANCED INCOME DIVERSIFIED STOCK PORTFOLIO
COMPONENT COMPONENT COMPONENT COMPONENT GROWTH PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
What other
investments can
the Portfolio or
Managed Component
use?
- - Medium-sized See principal See principal See principal No See principal Yes
company stocks investments investments investments investments
section above section above section above section above
- - Small company See principal See principal Yes (up to 20%) No See principal Yes
stocks investments investments investments
section above section above section above
- - Active trading Yes Yes No Yes Yes No
- - Types of fixed
income
securities:
Investment Yes Yes Yes Yes Yes Yes
grade
U.S. government Yes Yes Yes Yes Yes Yes
securities
Asset-backed Yes Yes Yes Yes Yes Yes
and
mortgage-backed
securities
Junk bonds No Yes (up to 35%) No Yes (up to 20%) Yes (up to 20%) No
- - Short-term Yes (up to 25%) Yes (up to 25%) Yes (up to 25%) Yes (up to 25%) Yes (up to 25%) Yes (up to 25%)
money market
instruments
- - Temporary Yes (up to 100%) Yes (up to 100%) Yes (up to 100%) Yes (up to 100%) Yes (up to 100%) Yes (up to 100%)
defensive
investments
- - Foreign Yes Yes Yes (up to 25%) Yes (up to 15% Yes (up to 60%) Yes (up to 30%)
securities denominated in
foreign
currencies; up to
100% denominated
in U.S. dollars)
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
SUNAMERICA/ SUNAMERICA/ WMC/FIXED ASSET ALLOCATION:
AGGRESSIVE GROWTH JANUS/GROWTH BALANCED INCOME DIVERSIFIED STOCK PORTFOLIO
COMPONENT COMPONENT COMPONENT COMPONENT GROWTH PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
What other
investments can
the Portfolio or
Managed Component
use?
- - ADRs/EDRs/ GDRs Yes Yes Yes No Yes Yes
- - Currency Yes Yes Yes Yes Yes Yes
transactions
- - Currency Yes Yes Yes Yes Yes Yes
baskets
- - PFICs Yes Yes Yes Yes Yes Yes
- - Emerging Yes Yes Yes Yes (up to 20%, Yes Yes
markets including
investments in
foreign and
domestic junk
bonds)
- - Illiquid Yes (up to 15%) Yes (up to 15%) Yes (up to 15%) Yes (up to 15%) Yes (up to 15%) Yes (up to 15%)
securities
- - Options and Yes Yes Yes Yes Yes Yes
futures
- - Securities Yes (up to Yes (up to Yes (up to Yes (up to Yes (up to Yes (up to
lending 33 1/3%) 33 1/3%) 33 1/3%) 33 1/3%) 33 1/3%) 33 1/3%)
- - Special Yes Yes Yes Yes Yes Yes
situations
- - Borrowing for Yes (up to Yes (up to Yes (up to Yes (up to Yes (up to Yes (up to
temporary or 33 1/3%) 33 1/3%) 33 1/3%) 33 1/3%) 33 1/3%) 33 1/3%)
emergency
purposes
What other - foreign - foreign - foreign - foreign - emerging - emerging
potential risks exposure exposure exposure exposure markets markets
can affect the - emerging - emerging - emerging - emerging - euro conversion - euro conversion
Portfolio or markets markets markets markets - credit quality - illiquidity
Managed - euro conversion - euro conversion - euro conversion - euro conversion - junk bonds - prepayment
Component? - illiquidity - credit quality - illiquidity - credit quality - illiquidity - derivatives
- prepayment - illiquidity - prepayment - junk bonds - prepayment - hedging
- derivatives - prepayment - derivatives - illiquidity - derivatives - small and mid-
- hedging - derivatives - hedging - prepayment - hedging market
- hedging - small and mid- - derivatives - foreign capitalization
market - hedging exposure
capitalization
</TABLE>
13
<PAGE>
- --------------------------------------------------------------------------------
GLOSSARY
- --------------------------------------------------------------------------------
INVESTMENT TERMINOLOGY
LARGE COMPANIES generally have market capitalizations of over $5 billion,
although there may be some overlap among capitalization categories.
MEDIUM SIZED COMPANIES generally have market capitalizations ranging from $1
billion to $5 billion, although there may be some overlap among capitalization
categories. Benchmark indices such as the S&P 400-Registered Trademark- MidCap
Index includes issuers with capitalizations ranging from $500 million to $10
billion. Accordingly, Portfolios will consider companies within this
capitalization range to be "mid cap", based also on certain other relevant
criteria.
SMALL COMPANIES generally have market capitalizations of $1 billion or less,
although there may be some overlap among capitalization categories. A Manager
may consider an issuer that has a market capitalization in excess of $1 billion
to be "small cap" if it meets certain relevant criteria.
ACTIVE TRADING means that a Portfolio may engage in frequent trading of
portfolio securities to achieve its investment goal. In addition, because a
Portfolio may sell a security without regard to how long it has held the
security, active trading may have tax consequences for certain shareholders,
involving a possible increase in short-term capital gains or losses. Active
trading may result in high portfolio turnover and correspondingly greater
brokerage commissions and other transaction costs, which will be borne directly
by a Portfolio. During periods of increased market volatility, active trading
may be more pronounced.
FIXED INCOME SECURITIES provide consistent interest or dividend payments. They
include corporate bonds, notes, debentures, preferred stocks, convertible
securities, Yankee bonds, U.S. government securities and mortgage-backed and
asset-backed securities. The issuer of a senior fixed income security is
obligated to make payments on this security ahead of other payments to security
holders.
An INVESTMENT GRADE fixed income security is rated in one of the top four
ratings categories by a debt rating agency (or is considered of comparable
quality by the Manager). The two best-known debt rating organizations are
Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies,
Inc. and Moody's Investors Service, Inc. "Investment grade" refers to any
security rated "BBB" or above by Standard & Poor's or "Baa" or above by Moody's.
U.S. GOVERNMENT SECURITIES are issued or guaranteed by the U.S. government, its
agencies and instrumentalities. Some U.S. government securities are issued or
unconditionally guaranteed by the U.S. Treasury. They are of the highest
possible credit quality. While these securities are subject to variations in
market value due to fluctuations in interest rates, they will be paid in full if
held to maturity. Other U.S. government securities are neither direct
obligations of, nor guaranteed by, the U.S. Treasury. However, they involve
federal sponsorship in one way or another. For example some are backed by
specific types of collateral; some are supported by the issuer's right to borrow
from the Treasury; some are supported by the discretionary authority of the
Treasury to purchase certain obligations of the issuer; and others are supported
only by the credit of the issuing government agency or instrumentality.
ASSET-BACKED SECURITIES represent an interest in a pool of consumer or other
types of loans. Payments of principal and interest on the underlying loans are
passed through to the holders of asset-backed
14
<PAGE>
securities over the life of the securities. MORTGAGE-BACKED SECURITIES represent
an undivided ownership interest in a pool of mortgages.
A "JUNK BOND" is a high yield, high risk bond that does not meet the credit
quality standards of investment grade securities.
SHORT-TERM MONEY MARKET INSTRUMENTS include money market securities such as
short-term U.S. government obligations, repurchase agreements, commercial paper,
bankers' acceptances and certificates of deposit. These securities provide a
Portfolio with sufficient liquidity to meet redemptions and cover expenses.
A Portfolio may BORROW for temporary or emergency purposes including to meet
redemptions. Borrowing may exaggerate changes in a Portfolio's net asset value
and yield. Borrowing will cost the Portfolio interest expense and other fees.
The cost of borrowing may reduce a Portfolio's return.
DEFENSIVE INVESTMENTS include high quality fixed income securities and money
market instruments. A Portfolio will make temporary defensive investments in
response to adverse market, economic, political or other conditions. When a
Portfolio takes a defensive position, it may miss out on investment
opportunities that could have resulted from investing in accordance with its
principal investment strategy. As a result, a Portfolio may not achieve its
investment goal.
FOREIGN SECURITIES are issued by companies located outside of the U.S.,
including emerging markets. Foreign securities may include yankee bonds, foreign
corporate and government bonds, foreign equity securities, American Depositary
Receipts (ADRs) or other similar securities that represents interest in foreign
equity securities, such as European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs).
It may be necessary under certain foreign laws, less expensive, or more
expedient to invest in FOREIGN INVESTMENT COMPANIES, which invest in certain
foreign markets, including emerging markets. Investing through such vehicles may
involve frequent or layered fees or expenses, and the Managers will not invest
in such investment companies unless, in their judgment, the potential benefits
justify the payment of any associated fees and expenses.
PFICS (passive foreign investment companies) are any foreign corporations that
generate certain amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents and annuities. To the extent that a Portfolio invests in PFICs,
the tax laws may require the Portfolio to recognize income associated with the
PFIC prior to the actual receipt of any such income in order to avoid the
imposition of tax at the Portfolio level.
CURRENCY TRANSACTIONS include the purchase and sale of currencies to facilitate
securities transactions and forward currency contracts, which are generally used
to hedge against changes in currency exchange rates.
A CURRENCY BASKET consists of specified amounts of currencies of certain foreign
countries.
EMERGING MARKETS: An emerging market country is generally a country with a low
or middle income economy or that is in the early stages of its industrialization
cycle. For fixed income investments, an emerging market includes those where the
sovereign credit rating is below investment grade. Emerging market countries may
change over time depending on market and economic conditions and the list may
vary by Manager.
15
<PAGE>
ILLIQUID SECURITIES are subject to legal or contractual restrictions that may
make them difficult to sell. A security that cannot easily be sold within seven
days will generally be considered illiquid. Certain restricted securities (such
as Rule 144A securities) are not generally considered illiquid because of their
established institutional trading markets.
OPTIONS AND FUTURES are contracts involving the right to receive or obligation
to deliver assets or money depending on the performance of one or more
underlying assets or a market or economic index.
SECURITIES LENDING involves a loan of securities by a Portfolio in exchange for
cash or collateral. A Portfolio earns interest on the loan while retaining
ownership of the security.
A SPECIAL SITUATION arises when, in the opinion of the Manager, the securities
of a particular issuer will be recognized and appreciate in value due to a
specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
RISK TERMINOLOGY
MARKET VOLATILITY: The stock and/or bond markets as a whole could go up or down
(sometimes dramatically). This could affect the value of the securities held by
a Portfolio.
SECURITIES SELECTION: A strategy used by a Portfolio, or securities selected by
its portfolio manager, may fail to produce the intended return.
INTEREST RATE FLUCTUATIONS: Volatility of the bond market is due principally to
changes in interest rates. As interest rates rise, bond prices typically fall;
and as interest rates fall, bond prices typically rise. Longer-term and lower
quality bonds tend to be more sensitive to changes in interest rates.
GROWTH STOCKS: Growth stocks can be volatile for several reasons. Since the
issuers usually reinvest a high portion of earnings in their own businesses,
growth stocks may lack the comfortable dividend yield associated with value
stocks that can cushion total return in a bear market. Also, growth stocks
normally carry a higher price/earnings ratio than many other stocks.
Consequently, if earnings expectations are not met, the market price of growth
stocks will often go down more than other stocks. However, the market frequently
rewards growth stocks with price increases when expectations are met or
exceeded.
FOREIGN EXPOSURE: Investors in foreign countries are subject to a number of
risks. A principal risk is that fluctuations in the exchange rates between the
U.S. dollar and foreign currencies may negatively affect an investment. In
addition, there may be less publicly available information about a foreign
company and it may not be subject to the same uniform accounting, auditing and
financial reporting standards as U.S. companies. Foreign governments may not
regulate securities markets and companies to the same degree as in the U.S.
Foreign investments will also be affected by local political or economic
developments and governmental actions. Consequently, foreign securities may be
less liquid, more volatile and more difficult to price than U.S. securities.
These risks are heightened when the issuer is in an EMERGING MARKET.
Historically, the markets of EMERGING MARKET countries have been more volatile
than more developed markets; however, such markets can provide higher rates of
return to investors.
16
<PAGE>
EURO CONVERSION: Effective January 1, 1999, several European countries
irrevocably fixed their existing national currencies to a new single European
currency unit, the "euro." Certain European investments may be subject to
additional risks as a result of this conversion. These risks include adverse tax
and accounting consequences, as well as difficulty in processing transactions.
SunAmerica is aware of such potential problems and is coordinating efforts to
prevent or alleviate their adverse impact on the Portfolios. There can be no
assurance that a Portfolio will not suffer any adverse consequences as a result
of the euro conversion.
CREDIT QUALITY: The creditworthiness of the issuer is always a factor in
analyzing fixed income securities. An issuer with a lower credit rating will be
more likely than a higher rated issuer to default or otherwise become unable to
honor its financial obligations. This type of issuer will typically issue JUNK
BONDS. In addition to the risk of default, junk bonds may be more volatile, less
liquid, more difficult to value and more susceptible to adverse economic
conditions or investor perceptions than other bonds.
ILLIQUIDITY: Certain securities may be difficult or impossible to sell at the
time and the price that the seller would like.
PREPAYMENT: Prepayment risk is the possibility that the principal of the loans
underlying mortgage-backed or other asset-backed securities may be retired in
advance of the maturity date. As a general rule, prepayments increase during a
period of falling interest rates and decrease during a period of rising interest
rates. As a result of prepayments, in periods of declining interest rates a
Portfolio may be required to reinvest its assets in securities with lower
interest rates. In periods of increasing interest rates, prepayments generally
may decline, with the effect that the securities subject to prepayment risk held
by a Portfolio may exhibit price characteristics of longer-term debt securities.
DERIVATIVES: In addition to general risks relating to market volatility,
interest rate fluctuations, credit quality, options and futures contracts are
subject to certain special risks. To the extent a contract is used to hedge
another position in the portfolio, there is a risk that changes in the value of
the contract will not exactly match those of the hedged position. Moreover,
while hedging can reduce or eliminate losses, it can also reduce or eliminate
gains. To the extent an option or futures contract is used to enhance return,
rather than as a hedge, a Portfolio will be directly exposed to the risks of the
contract. Gains or losses from non-hedging positions may be substantially
greater than the cost of the position.
HEDGING: A strategy in which a Manager uses a derivative to offset the risk that
other instruments in a Portfolio's holdings may decrease in value. Gains on a
derivative that reacts in an opposite manner to market movements may
substantially reduce losses on the other investment. While hedging can reduce
losses, it can also reduce or eliminate gains if the market moves in a different
manner than the Manager anticipates or if the cost of the derivative outweighs
the benefit of the hedge. Hedging also involves the risk that changes in the
value of the derivative will not match those of the instruments being hedged as
expected, in which case any losses on the instruments being hedged may not be
reduced.
SMALL AND MID-MARKET CAPITALIZATION: Companies with smaller market
capitalizations (particularly under $1 billion) tend to be at early stages of
development with limited product lines, market access for products, financial
resources, access to new capital, or depth in management. Consequently, the
securities of smaller companies may not be as readily marketable and may be
subject to more abrupt or erratic market movements. Securities of medium-sized
companies are usually more volatile than shares of large companies and entail
greater risks.
NON-DIVERSIFICATION: Non-diversified investment companies can invest a larger
portion of their assets in the stock of a single company than can diversified
investment companies, and thus they can concentrate in a smaller number of
stocks. A non-diversified investment company's risk may increase because the
effect of each stock on its performance is greater.
17
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND MANAGER
SUNAMERICA ASSET MANAGEMENT CORP. SUNAMERICA serves as investment adviser and
manager for all the Portfolios of the Trust. SunAmerica selects the Subadvisers
for the Portfolios, serves as Manager for certain Portfolios or portions of
Portfolios, provides various administrative services and supervises the daily
business affairs of each Portfolio.
SunAmerica, located at The SunAmerica Center, 733 Third Avenue, New York, New
York 10017-3204, is a corporation organized in 1982 under the laws of the State
of Delaware. SunAmerica is engaged in providing investment advice and management
services to the Trust, other mutual funds and pension funds. In addition to
serving as adviser to the Trust, SunAmerica serves as adviser, manager and/or
administrator for Anchor Pathway Fund, Anchor Series Trust, SunAmerica Strategic
Investment Series, Inc., Style Select Series, Inc., SunAmerica Equity Funds,
SunAmerica Income Funds, SunAmerica Money Market Funds, Inc. and SunAmerica
Series Trust. SunAmerica managed, advised and/or administered assets of
approximately $19.3 billion as of March 31, 1999 for investment companies,
individuals, pension accounts, and corporate and trust accounts.
In addition to serving as the investment adviser and manager to the Trust and
each Portfolio and supervising activities of the other Subadvisers, SunAmerica
manages the SunAmerica/Aggressive Growth and SunAmerica/Balanced components of
the Multi-Managed Seasons Portfolios.
For the fiscal year ended March 31, 1999 each Seasons portfolio paid SunAmerica
a fee equal to the following percentage of average daily net assets:
<TABLE>
<CAPTION>
PORTFOLIO FEE
- ------------------------------------------------------------ ---------
<S> <C>
Multi-Managed Growth Portfolio.............................. 0.89%
Multi-Managed Moderate Growth Portfolio..................... 0.85%
Multi-Managed Income/Equity Portfolio....................... 0.81%
Multi-Managed Income Portfolio.............................. 0.77%
Asset Allocation: Diversified Growth Portfolio.............. 0.85%
Stock Portfolio............................................. 0.85%
</TABLE>
SunAmerica compensates the Subadvisers out of the fees that it receives from the
Portfolios. SunAmerica may terminate any agreement with a Subadvisers without
shareholder approval. Moreover, SunAmerica has received an exemptive order from
the Securities and Exchange Commission that permits SunAmerica, subject to
certain conditions, to enter into agreements relating to the Trust with
Subadvisers approved by the Board of Trustees without obtaining shareholder
approval. The exemptive order also permits SunAmerica, subject to the approval
of the Board but without shareholder approval, to employ new Subadvisers for new
or existing Portfolios, change the terms of particular agreements with
Subadvisers or continue the employment of existing Subadvisers after events that
would otherwise cause an automatic termination of a Subadvisers agreement.
Shareholders of a Portfolio have the right to terminate an agreement with a
Subadvisers for that Portfolio at any time by a vote of the majority of
18
<PAGE>
the outstanding voting securities of such Portfolio. Shareholders will be
notified of any Subadvisers changes. The order also permits the Trust to
disclose to shareholders the Subadvisers fees only in the aggregate for each
Portfolio. Each of the Subadvisers is independent of SunAmerica and discharges
its responsibilities subject to the policies of the Trustees and the oversight
and supervision of SunAmerica, which pays the Subadvisers fees. These fees do
not increase Portfolio expenses.
INFORMATION ABOUT THE SUBADVISERS
JANUS CAPITAL CORPORATION. JANUS is a Colorado corporation with principal
offices at 100 Fillmore Street, Denver, Colorado 80206-4923. Janus serves as
investment adviser to all of the Janus funds, as well as adviser or subadviser
to other mutual funds and individual, corporate, charitable and retirement
accounts, and, as of March 31, 1999, had assets under management of
approximately $136 billion.
PUTNAM INVESTMENT MANAGEMENT, INC. PUTNAM is a Massachusetts corporation with
principal offices at One Post Office Square, Boston, Massachusetts. Putnam has
been managing mutual funds since 1937 and serves as investment adviser to the
funds in the Putnam Family. Putnam and its affiliates managed assets of
approximately $306 billion as of March 31, 1999.
T. ROWE PRICE ASSOCIATES, INC. T. ROWE PRICE is a Maryland corporation with
principal offices at 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe
Price serves as investment adviser to the T. Rowe Price family of no-load mutual
funds and to individual and institutional clients. T. Rowe Price and its
affiliates managed assets approximately at $149 billion as of March 31, 1999.
WELLINGTON MANAGEMENT COMPANY, LLP. WMC is a Massachusetts limited liability
partnership. The principal offices of WMC are located at 75 State Street,
Boston, Massachusetts 02109. WMC is a professional investment counseling firm
which provides investment services to investment companies, employee benefit
plans, endowments, foundations, and other institutions and individuals. As of
March 31, 1999, WMC had discretionary management authority with respect to
approximately $215.3 billion of assets.
19
<PAGE>
PORTFOLIO MANAGEMENT
The management of each Portfolio and Managed Component is summarized in the
following table.
<TABLE>
<CAPTION>
SEASONS PORTFOLIOS
PORTFOLIO MANAGEMENT ALLOCATED AMONG
PORTFOLIO THE FOLLOWING MANAGERS
- -------------------------------------------------------------------------------------------
<S> <C>
Multi-Managed Growth Portfolio -Janus
(through Janus/Growth component)
-SunAmerica
(through SunAmerica/Aggressive Growth
component and SunAmerica/Balanced
component)
-WMC
(through WMC/Fixed Income component)
- -------------------------------------------------------------------------------------------
Multi-Managed Moderate Growth Portfolio -Janus
(through Janus/Growth component)
-SunAmerica
(through SunAmerica/Aggressive Growth
component and SunAmerica/Balanced
component)
-WMC
(through WMC/Fixed Income component)
- -------------------------------------------------------------------------------------------
Multi-Managed Income/Equity Portfolio -Janus
(through Janus/Growth component)
-SunAmerica
(through SunAmerica/Balanced component)
-WMC
(through WMC/Fixed Income component)
- -------------------------------------------------------------------------------------------
Multi-Managed Income Portfolio -Janus
(through Janus/Growth component)
-SunAmerica
(through SunAmerica/Balanced component)
-WMC
(through WMC/Fixed Income component)
- -------------------------------------------------------------------------------------------
Asset Allocation: Diversified Growth Portfolio -Putnam Investment Management, Inc.
("Putnam")
- -------------------------------------------------------------------------------------------
Stock Portfolio -T. Rowe Price Associates, Inc.
("T. Rowe Price")
- -------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
The primary investment manager(s) and/or the management team(s) for each
Portfolio and Managed Component is set forth in the following table.
<TABLE>
<CAPTION>
NAME AND TITLE OF
MANAGER(S) PORTFOLIO MANAGER(S) EXPERIENCE
PORTFOLIO OR MANAGED COMPONENT (AND/OR MANAGEMENT TEAM(S))
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
SunAmerica/ Aggressive Growth SunAmerica - Donna M. Calder Ms. Calder has been a portfolio manager since
component Vice President and Portfolio joining the firm in March 1998. Prior to joining
(Multi-Managed Seasons Manager SunAmerica, Ms. Calder was the Founder and General
Portfolio) (Domestic Equity Investment Partner of Manhattan Capital Partners, L.P.
Team) (1991-1995).
- -------------------------------------------------------------------------------------------
SunAmerica/ Balanced component SunAmerica - Francis D. Gannon Mr. Gannon has been a portfolio manager with the
(Multi-Managed Seasons Vice President and Portfolio firm since 1996. He joined SunAmerica as an equity
Portfolios) Manager analyst in 1993.
(Domestic Equity Investment
Team)
- Fixed Income Investment Team
- -------------------------------------------------------------------------------------------
Janus/Growth component Janus - Warren B. Lammert Executive Mr. Lammert first joined Janus in 1987 and has
(Multi-Managed Seasons Vice President Portfolio been a portfolio manager with the firm since 1993.
Portfolios) Manager He is a Chartered Financial Analyst.
- -------------------------------------------------------------------------------------------
WMC/Fixed Income component WMC - Lucius T. Hill, III Mr. Hill has been a portfolio manager with WMC
(Multi-Managed Seasons Senior Vice President and since joining the firm in 1993.
Portfolios) Partner
- -------------------------------------------------------------------------------------------
Asset Allocation: Diversified Putnam - Global Asset Allocation N/A
Growth Portfolio Committee
- -------------------------------------------------------------------------------------------
Stock Portfolio T. Rowe - Robert W. Smith Mr. Smith has been managing investments with T.
Price Managing Director, Investment Rowe Price since joining the firm in 1992.
Advisory Committee Chairman,
and Equity Portfolio Manager
- -------------------------------------------------------------------------------------------
</TABLE>
CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT
State Street Bank and Trust Company, Boston, Massachusetts, acts as Custodian of
the Trust's assets as well as Transfer and Dividend Paying Agent and in so doing
performs certain bookkeeping, data processing and administrative services.
21
<PAGE>
- --------------------------------------------------------------------------------
ACCOUNT INFORMATION
- --------------------------------------------------------------------------------
Shares of the Seasons Portfolios are not offered directly to the public.
Instead, shares of the Seasons Portfolios are currently offered only to Variable
Annuity Account Five, a separate account of Anchor National Life Insurance
Company. So if you would like to invest in a Seasons Portfolio, you must
purchase a Seasons Variable Annuity Contract from Anchor National. You should be
aware that if you purchase Seasons Variable Annuity Contract, you will not
invest directly in one of the Seasons Portfolios. Instead, the Seasons Variable
Annuity Contract offers four variable investment "Strategies," each of which
invests in three of the six Seasons Portfolios, managed collectively by five
different professional investment managers. The allocation of assets among the
Portfolios will vary depending on the objective of the Strategy.
You should also be aware that the Contracts involve fees and expenses that are
not described in this Prospectus, and that the Contracts also may involve
certain restrictions and limitations. You will find information about purchasing
a Seasons Variable Annuity Contract in the prospectus that offers the Contracts,
which accompanies this Prospectus.
TRANSACTION POLICIES
VALUATION OF SHARES The net asset value per share (NAV) for each Portfolio is
determined each business day at the close of regular trading on the New York
Stock Exchange (generally 4:00 p.m., Eastern time) by dividing its net assets by
the number of its shares outstanding. Investments for which market quotations
are readily available are valued at market, except that short-term securities
with 60 days or less to maturity are valued on an amortized cost basis. All
other securities and assets are valued at "fair value" following procedures
approved by the Trustees.
BUY AND SELL PRICES Variable Annuity Account Five buys and sells shares of a
Portfolio at NAV, without any sales or other charges.
EXECUTION OF REQUESTS The Trust is open on those days when the New York Stock
Exchange is open for regular trading. We execute buy and sell requests at the
next NAV to be calculated after the Trust accepts the request. If the Trust
receives the order before the Trust's close of business (generally 4:00 p.m.,
Eastern time), the order will receive that day's closing price. If the Trust
receives the order after that time, it will receive the next business day's
closing price. If the Trust receives the order after that time, it will receive
the next business day's closing price.
During periods of extreme volatility or market crisis, a Portfolio may
temporarily suspend the processing of sell requests or may postpone payment of
proceeds for up to seven business days or longer, or as allowed by federal
securities laws.
22
<PAGE>
DIVIDEND POLICIES AND TAXES
DISTRIBUTIONS Each Portfolio annually declares and distributes substantially all
of its net investment income in the form of dividends and capital gains
distributions.
DISTRIBUTION REINVESTMENT The dividends and distributions will be reinvested
automatically in additional shares of the same Portfolio on which they were
paid.
TAXABILITY OF A PORTFOLIO Each Portfolio intends to continue to qualify as a
regulated investment company under the Internal Revenue Code of 1986, as
amended. So long as each Portfolio is qualified as a regulated investment
company, it will not be subject to federal income tax on the earnings that it
distributes to its shareholders.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
YEAR 2000
Many computer and computer-based systems cannot distinguish the year 2000 from
the year 1900 because of the way they encode and calculate dates (commonly known
as the "Year 2000 Issue"). The Year 2000 Issue could potentially have an adverse
impact on the handling of security trades, the payment of interest and
dividends, pricing and account services. We recognize the importance of the Year
2000 Issue and are taking appropriate steps necessary in preparation for the
year 2000. The Trust's management fully anticipates that their systems will be
adapted in time for the year 2000, and to further this goal they have
coordinated a plan to repair, adapt or replace their systems as necessary. They
have also obtained representations from their outside service providers that
they are doing the same. The Trust's management completed their plan
significantly by the end of the 1998 calendar year and expects to perform
appropriate systems testing during the 1999 calendar year. If the problem has
not been fully addressed, however, the Trust could be negatively impacted. The
Year 2000 Issue could also have a negative impact on the companies in which the
Trust invests, which could hurt the Trust's investment returns.
23
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD)
- --------------------------------------------------------------------------------
The Financial Highlights table for each Portfolio is intended to help you
understand the Portfolio's financial performance since inception. Certain
information reflects financial results for a single Portfolio share. The total
returns in each table represent the rate that an investor would have earned on
an investment in the Portfolio (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with each Portfolio's financial statements, is included in
the Statement of Additional Information (SAI), which is available upon request.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Net
realized & Dividends Dividends
Net Asset Net unrealized declared from net
Value investment gain (loss) Total from from net realized
beginning of income on investment investment gain on
Period ended period */** investments operations income investments
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Multi-Managed Growth Portfolio
4/15/97-3/31/98 $10.00 $0.18 $2.95 $3.13 ($0.08) ($0.20)
3/31/99 12.85 0.16 4.41 4.57 (0.18) (0.03)
Multi-Managed Moderate Growth Portfolio
4/15/97-3/31/98 10.00 0.27 2.40 2.67 (0.13) (0.17)
3/31/99 12.37 0.28 3.10 3.38 (0.23) (0.02)
Multi-Managed Income/Equity Portfolio
4/15/97-3/31/98 10.00 0.41 1.68 2.09 (0.20) (0.10)
3/31/99 11.79 0.43 1.57 2.00 (0.36) (0.10)
Multi-Managed Income Portfolio
4/15/97-3/31/98 10.00 0.51 1.15 1.66 (0.27) (0.10)
3/31/99 11.29 0.53 0.72 1.25 (0.40) (0.07)
Asset Allocation: Diversified Growth Portfolio
4/15/97-3/31/98 10.00 0.23 1.76 1.99 (0.12) (0.16)
3/31/99 11.71 0.14 0.90 1.04 (0.12) --
Stock Portfolio
4/15/97-3/31/98 10.00 0.03 4.80 4.83 (0.02) (0.15)
3/31/99 14.66 0.03 1.84 1.87 (0.02) (0.30)
- -------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------- ------------------------------------------------------
Ratio of
Ratio of net
expenses investment
Net Assets to income to
Net Asset Total end of average average
Value end Return period net net Portfolio
Period ended of period *** (000's) assets+ assets+ Turnover
- ---------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
4/15/97-3/31/98 $12.85 31.55% $ 32,481 1.29%# 1.52%# 114%
3/31/99 17.21 35.98 69,712 1.19 1.11 124
4/15/97-3/31/98 12.37 26.86 32,622 1.21# 2.36# 101
3/31/99 15.50 27.73 75,694 1.16 2.08 105
4/15/97-3/31/98 11.79 21.10 25,957 1.14# 3.72# 46
3/31/99 13.33 17.27 62,121 1.14 3.51 65
4/15/97-3/31/98 11.29 16.81 18,378 1.06# 4.69# 47
3/31/99 12.07 11.19 50,250 1.06 4.50 43
4/15/97-3/31/98 11.71 20.09 50,384 1.21# 2.06# 166
3/31/99 12.63 9.02 117,663 1.21 1.21 149
4/15/97-3/31/98 14.66 48.59 42,085 1.21# 0.24# 46
3/31/99 16.21 13.05 97,047 1.10 0.20 52
- ---------------- ------------------------------------------------------
</TABLE>
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser.
*** Total return is not annualized and does not reflect expenses that apply to
the separate accounts of Anchor National Life Insurance Company. If such
expenses had been included, total return would have been lower.
# Annualized
+ The investment adviser waived a portion of or all fees and assumed a portion
of or all expenses for the Portfolios. If all fees and expenses had been
incurred by the Portfolios, the ratio of expenses to average net assets and
the ratio of net investment income to average net assets would have been as
follows:
<TABLE>
<CAPTION>
Expenses Net Investment Income
------------------------------ ------------------------------
3/31/98 3/31/99 3/31/98 3/31/99
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Multi-Managed Growth Portfolio.................... 1.44 % 1.19 % 1.37 % 1.11 %
Multi-Managed Moderate Growth Portfolio........... 1.40 1.16 2.17 2.08
Multi-Managed Income/Equity Portfolio............. 1.43 1.14 3.43 3.51
Multi-Managed Income Portfolio.................... 1.50 1.07 4.25 4.49
Asset Allocation: Diversified Growth Portfolio.... 1.53 1.22 1.74 1.20
Stock Portfolio................................... 1.26 1.10 0.19 0.20
</TABLE>
24
<PAGE>
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
The following documents contain more information about the Portfolios and
are available free of charge upon request:
ANNUAL/SEMI-ANNUAL REPORTS. Contain financial statements, performance data
and information on portfolio holdings. The annual report also contains a
written analysis of market conditions and investment strategies that
significantly affected a Portfolio's performance for the most recently
completed fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI). Contains additional information
about the Portfolios' policies, investment restrictions and business
structure. This prospectus incorporates the SAI by reference.
You may obtain copies of these documents or ask questions about the
Portfolios by contacting:
Anchor National Life Insurance Company
Annuity Service Center
P.O. Box 54299
Los Angeles, California 90054-0299
1-800-445-7862
Information about the Portfolios (including the SAI) can be reviewed and copied
at the Public Reference Room of the Securities and Exchange Commission,
Washington, D.C. Call (800) SEC-0330 for information on the operation of the
Public Reference Room. Information about the Portfolios is also available on the
Securities and Exchange Commission's web-site at http://www.sec.gov and copies
may be obtained upon payment of a duplicating fee by writing the Public
Reference Section of the Securities and Exchange Commission, Washington, D.C.
20549-6009.
You should rely only on the information contained in this prospectus. No one is
authorized to provide you with any different information.
[LOGO]
Anchor National Life Insurance Company
1 SunAmerica Center
Los Angeles, California 90067-6022
INVESTMENT COMPANY ACT
File No. 811-07725
25
<PAGE>
Please forward a copy (without charge) of the Seasons Variable Annuity Statement
of Additional Information to:
(Please print or type and fill in all information.)
------------------------------------------------------------------
Name
------------------------------------------------------------------
Address
------------------------------------------------------------------
City/State/Zip
------------------------------------------------------------------
Date: _____________________ Signed: ______________________________
Return to: Anchor National Life Insurance Company, Annuity Service Center, P.O.
Box 52499, Los Angeles, California 90054-0299
26
