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[LOGO] SUNAMERICA MUTUAL FUNDS
2000 SEMIANNUAL REPORT
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Style SELECT Series-Registered Trademark-
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[LOGO] SUNAMERICA
MUTUAL FUNDS
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A MESSAGE FROM THE PRESIDENT
June 15, 2000
Dear Shareholder:
We are very pleased that the multi-managed, institutional approach of our Style
SELECT Series has proved rewarding to so many investors. We are also proud that
this series of mutual funds has received acknowledgment from respected fund
watchers and industry publications.
Most prominently perhaps, all three of the Focus Portfolio's current subadvisers
have been named Managers of the Decade by MONEY MAGAZINE (February 2000). Newest
addition David Alger of Fred Alger Management, Inc. was also named Manager of
the Decade by USA TODAY, Thomas F. Marsico of Marsico Capital Management was
named World-Class Manager by Morningstar, Inc. (1994), and Spiros "Sig" Segalas
of Jennison Associates was named Manager of the Decade by MUTUAL FUNDS MAGAZINE.
Clearly, the investment styles of these three managers have served the Portfolio
well, as the Focus Portfolio ranked in the top 2% out of 449 large-cap core
funds (based on total return) for the six months ended April 30, 2000, according
to Lipper Analytics.(1) Our Focused Growth and Income Portfolio ranked in the
top 3% out of 449 large-cap core funds for the semiannual period, according
to Lipper.(1)
Having been the first on Wall Street to offer a multi-managed focused mutual
fund for individual investors, we have now expanded our multi-managed, focused
series of portfolios by introducing the new Focused Value Portfolio on November
1, 1999. The Focused Value Portfolio offers investors an aggressive, yet
strategic, value equity fund that holds only a limited number of securities. It
has three world class value managers--Martin J. Whitman (Third Avenue Funds),
William Fries (Thornburg Funds) and Phillip Davidson (American Century).
Our multi-managed, style-based mutual funds have also produced exciting news.
The Aggressive Growth, Mid-Cap Growth, Large-Cap Value, Value, and International
Equity Portfolios each outperformed or tracked both its Lipper category average
and its respective Morningstar benchmark index for its six month performance.
Such performance in both growth funds and value funds is particularly notable
during what proved to be a very challenging investment environment. (Returns do
not reflect the impact of sales charges.) We are also pleased to announce that
Morningstar-TM- recognized the Aggressive Growth Portfolio for its strong
investment processes by awarding the Portfolio its top Overall Rating-TM- based
on its risk-adjusted performance.(2) As of April 30, 2000, the Aggressive Growth
Portfolio was rated 5 stars among 429 mid-cap growth funds.
We continued to enhance the Style SELECT Series portfolios in response to your
growing investment needs by changing some of the investment managers to achieve
greater consistency of style and added performance potential. During the
semiannual period, Brian Clifford of SunAmerica Asset Management joined Miller
Anderson & Sherrerd and T. Rowe Price as a subadviser to the Mid-Cap Growth
Portfolio. William Fries of Thornburg Asset Management joined Davis Selected
Advisers and Wellington Management as a subadviser to the Large-Cap Value
Portfolio.
On the following pages, one Adviser from each of the ten Style SELECT Series
portfolios discusses the management of their portion of the Portfolio over the
semiannual period and his or her investment outlook for the remainder of the
year 2000. You will also find a complete financial summary and a listing of
holdings for each Portfolio.
Clearly, this has been yet another period of exciting initiatives and
opportunities for SunAmerica Mutual Funds. We continue to bring you style-based
and stylized investment choices designed to provide you with the same
multi-managed approach used by many of today's largest and most successful
institutional investors, an advantage you simply cannot get by investing in
traditional mutual funds. The Style SELECT Series is also designed to provide
you with the opportunity to diversify among management styles, each of which
will perform differently in given economic and market conditions. Allocating
your assets among growth, value, and focused funds across the equity
capitalization and global spectrum offers you the flexibility to take advantage
of different research criteria, buy and sell disciplines, and investment
strategies.
We thank you for being a part of the success of the Style SELECT Series. We
value your confidence in us and look forward to serving your investment needs in
the future.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
PRESIDENT
(1) Based on total return, sales charges not included. Focus Portfolio Class A
ranked 6th out of 449 large-cap core funds for the semiannual period and
44.71% for the full year. Focused Growth and Income Portfolio Class A
ranked 9th out of 449 large-cap core funds and 39.11% for the full year.
(2) Morningstar proprietary ratings reflect historical risk-adjusted
performance as of April 30, 2000. The ratings are subject to change every
month. Past performance is no guarantee of future results. Morningstar
ratings are calculated from the fund's three-, five-, and 10-year average
annual returns (if applicable) in excess of 90-day Treasury bill returns
with appropriate fee adjustments, and a risk factor that reflects fund
performance below 90-day T-bill returns. The top 10% of the funds in a
broad asset class receive 5 stars.
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[GRAPHIC]
2000 SEMIANNUAL REPORT -------------------
Style SELECT Series-Registered Trademark-
LARGE-CAP VALUE PORTFOLIO -----[GRAPHIC]-----
[SIDENOTE]
FUND FOCUS
LARGE-CAP VALUE PORTFOLIO
CLASS A OUTPERFORMS MORNINGSTAR
AND LIPPER CATEGORY AVERAGE
FOR 6-MONTH PERIOD ENDED
APRIL 30, 2000*
Q&A
WILLIAM FRIES, Portfolio Manager
THORNBURG INVESTMENT MANAGEMENT
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO SINCE YOU HAVE BECOME A
SUBADVISER?
We've been managing our portion of the Portfolio since February 1, 2000, and so
our discussion is from that point through the end of the semiannual period on
April 30, 2000. That said, Thornburg Investment Management is a strict value
manager with an approach that we say is "from a different place." What we mean
by that is more than just geography. Our approach to value investing looks
beyond simple accounting valuation measures and toward more comprehensive
features of intrinsic value.
We focus on selecting large, generally recognizable blue chip companies with
established track records. But in addition to basic value stocks, we also seek
to identify companies for the Portfolio that we consider to be consistent
growers and emerging franchises. We believe that stock selection is the ultimate
form of risk control. We try to make each new name in our portion of the
Portfolio improve its overall risk/reward characteristics and contribute to
maintaining generally conservative portfolio attributes.
Our focus on stock selection proved effective during this
period, as the basic value stocks in our portion of the Portfolio performed with
reasonable consistency and satisfactory results. This is especially notable
given that equity performance for the period ended April 30, 2000 was
challenging for investors in general and for value investors in particular.
In the early part of the period, market sentiment favored
securities widely recognized as having rapid growth. Value was clearly out of
favor. In fact, it seemed that investors who felt motivated to buy "New Economy"
stocks did so by selling "Old Economy" stocks. The character of the market since
late March was in sharp contrast to this environment. The April reversal in
technology stocks caused considerable anxiety among investors, both
professionals and individuals alike. Some of the traditional value sectors, such
as financials, energy, and healthcare, bounced back at this time and returned to
favor.
While market volatility is unsettling, it also creates some investment
opportunities. During this volatile period, we successfully added to existing
positions and purchased new names for the Portfolio.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
Technology holdings Seagate and Sony performed particularly well during the
early part of the period, and we sold both at a profit. Additions were made to
original investment positions in Bank of New York, Boeing, Dow Chemical,
Kimberly Clark, and PepsiCo.
We also sought to take advantage of perceived value by adding new names to the
Portfolio, including Adobe Systems, Advanced Micro Devices, Ford, and Wellpoint
Healthcare.
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Style SELECT Series 2000 Semiannual Report [LOGO] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE] [ADVISORS]
FUND OBJECTIVE
SEEKS LONG-TERM GROWTH OF CAPITAL [LOGO] [LOGO] [LOGO]
BY INVESTING GENERALLY IN EQUITY
SECURITIES OF LARGE-SIZED COMPANIES
USING A "VALUE" STYLE OF INVESTING
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
With the US economy growing at near record levels and interest rates likely to
rise over the near term, investor confidence will no doubt be tested. However,
we look at the positive side of such a scenario. For value investors, there
should be no shortage of investment opportunities. We intend to maintain a
modest cash reserve of 5% to 10% to be able to take advantage of such
opportunities as they develop.
We further believe that attractively priced Portfolio holdings such as Kimberly
Clark, the disposable paper products company, and El Paso Energy, a pipeline and
energy company, appear particularly well positioned for the investment
environment we foresee.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. Morningstar proprietary ratings reflect
historical risk-adjusted performance as of April 30, 2000. They are subject to
change every month. The Lipper category average is an equally weighted
performance index, adjusted for capital gains distributions and income dividends
of the largest qualifying funds in this investment objective. Investors cannot
actually make investments in these indices.
3
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2000 SEMIANNUAL REPORT -------------------
Style SELECT Series-Registered Trademark-
VALUE PORTFOLIO -----[GRAPHIC]-----
[SIDENOTE]
FUND FOCUS
VALUE PORTFOLIO CLASS A
OUTPERFORMS MORNINGSTAR AND
LIPPER CATEGORY AVERAGE AND
RUSSELL MIDCAP VALUE INDEX FOR
6-MONTH PERIOD ENDED
APRIL 30, 2000*
Q&A
CHRISTOPHER C. DAVIS, Portfolio Manager
DAVIS SELECTED ADVISERS
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
Davis Selected Advisers, L.P. invests in high quality, large-cap companies with
strong prospects for sustainable earnings growth. These companies typically have
strong brand names, innovative and responsive management teams, and proven track
records resulting from long-term vision. At all times, we seek to purchase
shares of these companies at value prices and attractive discounts to their
foreseeable future growth rates. We have adhered to our signature research and
investment process for over thirty years and have not altered this discipline in
the face of changing market environments.
Throughout the semi-annual period, the U.S. equity market was marked by extreme
volatility, primarily resulting from fears of higher interest rates and lower
quality of earnings. Profit-taking after an extended period of double-digit
returns, investors selling securities to pay 1999 taxes, and the Federal Reserve
Board's ongoing bias toward tightening monetary policy added to market
volatility during the first quarter of 2000. Such volatility was seen within
certain sectors and within certain indices. It was also evident in the dramatic
shifts in market leadership between the companies of the Dow Jones Industrial
Average, now categorized by the media and by Wall Street as the pinnacle of "Old
Economy" companies, and the companies of the NASDAQ Composite, representing "New
Economy" companies.
Our portion of the Value Portfolio outpaced the return of the S&P/Barra Value
Index over the six months ended April 30, 2000. It also outperformed the S&P 500
Index, a benchmark of the broader equity market, over the same period.* This is
particularly impressive because the more growth-oriented "New Economy" stocks
outperformed in the first four months of the period, and the more value-oriented
"Old Economy" stocks only rebounded in March and April. Although six months is
too short a time period in which to effectively judge the performance of any
investment manager, we believe that our strong relative performance is
indicative of the success of our stock selection process.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
Over the semi-annual period, our portion of the Portfolio benefited from strong
positions in several high quality technology companies, despite the volatility
and decline experienced in the tech-heavy NASDAQ Composite Index.
Hewlett-Packard and Texas Instruments, two of our top five positions during the
period, each posted a return in excess of 80% for the six months ended April 30,
2000. These stunning performances primarily reflect the continued success of
company operations and leadership in their respective industry niches.
Hewlett-Packard dominates the printer and printer accessories business. Texas
Instruments is the leading manufacturer of digital signal processors (DSPs),
which run new generations of wireless products and other consumer electronics.
The performance of Oracle and Applied Materials also strongly benefited our
portion of the Portfolio. Given our value basis, we took profits in several of
these strong performers when we believed their valuations had reached extreme
levels.
Our portion of the Portfolio also maintained an overweighted allocation to
financial companies given our expectation for the long-term growth potential of
global financial services. This sector allocation was widely diversified among
high quality banks, brokerages, insurance companies, and consumer financial
services companies. Over the period, top holdings such as American Express,
Wells Fargo, and Household International posted negative returns. However,
Morgan Stanley Dean Witter rendered a strong six-month performance of nearly
40%, based largely on the continued growth of its global brokerage and
investment banking brand. While the Federal Reserve Board's proactive measures
to tighten monetary policy further may create headwinds for many poorly
positioned financial companies, we believe the high quality businesses that we
have selected for the Portfolio should be able to weather difficult interest
rate environments and even improve market share.
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Style SELECT Series 2000 Semiannual Report [LOGO] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE] [ADVISORS]
FUND OBJECTIVE
SEEKS LONG-TERM GROWTH OF CAPITAL [LOGO] [LOGO] [LOGO]
BY INVESTING GENERALLY IN EQUITY
SECURITIES OF LARGE-SIZED COMPANIES
USING A "VALUE" STYLE OF INVESTING
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
We anticipate that the equity market will remain in a wide trading range for the
foreseeable future based on the high degree of uncertainty that still surrounds
interest rate levels, inflation, and corporate profits. Our outlook is therefore
neither overly pessimistic or optimistic, but rather realistic. Given the
extraordinary growth in stock prices over the past several years as well as the
high price level where the market started this year, investors may have to
moderate their expectations for returns in large company stocks for the year
2000.
Our investment strategy remains consistent throughout any market environment. We
intend to continue actively seeking high quality, well-managed companies with
strong growth prospects and to attempt to buy them at value prices. Given the
level of volatility in the stock market, we believe investors are best served by
investing in the highest quality businesses with the best fundamentals and
long-term growth prospects, if such businesses can be purchased at attractive
prices. Thus, our research team is dedicated to identifying company management
teams with smart business plans, strong track records for delivering results,
entrepreneurial cultures, wise allocation of capital, and smart application of
technology.
Once we feel we have found an attractive business and determine that we can
purchase shares at attractive and appropriate valuations, we will build a
position and hold for the long term. We do not intend to change our investment
discipline in reaction to market volatility, momentum, or investor "fads," as we
strongly believe that our method effectively achieves the Portfolio objective of
long-term capital appreciation.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. Morningstar proprietary ratings reflect
historical risk-adjusted performance as of April 30, 2000. They are subject to
change every month. The Lipper category average is an equally weighted
performance index, adjusted for capital gains distributions and income dividends
of the largest qualifying funds in this investment objective. The Russell Midcap
Value Index measures the performance of those Russell Midcap companies with
lower price-to-book ratios and lower forecasted growth values. The stocks are
also members of the Russell 1000 Value Index. Investors cannot actually make
investments in these indices.
5
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2000 SEMIANNUAL REPORT -------------------
Style SELECT Series-Registered Trademark-
SMALL-CAP VALUE PORTFOLIO -----[GRAPHIC]-----
[SIDENOTE]
FUND FOCUS
SMALL-CAP VALUE PORTFOLIO
CLASS A OUTPERFORMS RUSSELL
2000 VALUE INDEX FOR 6-MONTH
PERIOD ENDED APRIL 30, 2000*
Q&A
MARTIN J. WHITMAN/CURTIS JENSEN, Portfolio Managers
THIRD AVENUE FUNDS
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
We adhere to a "deep value" philosophy or what we call our "safe and cheap"
approach, whereby we look for fiscally sound companies whose equity securities
can be acquired at what are believed to be a substantial discount. This discount
must be based on a conservative estimate of the company's private market value
or takeover value. More specifically, we define "safe" as a) strong finances as
evidenced by the presence of high quality assets and an absence of liabilities
either on or off the balance sheet; b) reasonable management with good track
records as both owners and operators; and c) businesses that we can understand.
The "cheap" part comes from trying to buy businesses as a reasonable and
knowledgeable businessperson might, for example by buying at a significant
discount to what the underlying business might be worth.
Small-cap value stocks underperformed both small-cap growth stocks and large-cap
stocks for the six months, but our portion of the Small-Cap Value Portfolio
turned in solid performance during a challenging period. We significantly
outperformed the Russell 2000 Value Index for the six months ended April 30,
2000.
We focus on individual security selection rather than on macroeconomic factors,
and our small-cap companies exhibited strong earnings growth, positive
fundamentals, and attractive relative valuations throughout the semiannual
period. Our portion of the portfolio particularly benefited from our technology
positions and from strong merger and acquisition activity.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
Among the holdings in the portfolio that benefited from strong merger and
acquisition activity were Vertex Communications, Gleason Corp., Financial
Securities Assurance, LaSalle Re Holding Ltd, and Reynolds Metals. Elsewhere, we
bought as the market gave us opportunities, and given that we are buy and hold
investors seeking to profit from eventual market recognition of the true value
of the companies in our portfolio, turnover was relatively low. The most
disappointing stocks were in the financial and real estate sectors.
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Style SELECT Series 2000 Semiannual Report [LOGO] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE] [ADVISORS]
FUND OBJECTIVE
SEEKS LONG-TERM GROWTH OF CAPITAL [LOGO] [LOGO] [LOGO]
BY INVESTING GENERALLY IN EQUITY
SECURITIES OF SMALL-SIZED COMPANIES
USING A "VALUE" STYLE OF INVESTING
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
We will continue to apply the same value discipline that we have practiced for
nearly fifteen years. That is, we will employ a strict "bottom-up" approach with
a very specific focus on company fundamentals and pricing, without regard to or
influence by any macroeconomic outlook.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. The Russell 2000 Value Index is a
widely-recognized, capitalization-weighted (companies with larger market
capitalizations have more influence than those with smaller market
capitalizations) index of the 2,000 smallest companies out of the 3,000 largest
US companies with lower growth rates and price-to-book ratios. Investors cannot
actually make investments in this index.
7
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[GRAPHIC]
2000 SEMIANNUAL REPORT -------------------
Style SELECT Series-Registered Trademark-
LARGE-CAP GROWTH PORTFOLIO -----[GRAPHIC]-----
[SIDENOTE]
FUND FOCUS
LARGE-CAP GROWTH PORTFOLIO
CLASS A OUTPERFORMS S&P 500
INDEX FOR 6-MONTH PERIOD ENDED
APRIL 30, 2000*
Q&A
SPIROS "SIG" SEGALAS, Portfolio Manager
JENNISON ASSOCIATES
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
Jennison's growth equity investment strategy remains unchanged. We believe that
over the long term, carefully selected growth stocks can generate superior
investment returns. We challenge ourselves to discover those few stocks with
superior absolute and relative earnings growth and to construct a portfolio that
we believe will grow its earnings at a rate materially faster than the overall
equity market over the next twelve to eighteen months. We also seek to invest in
these stocks while their valuations do not fully reflect our positive earnings
expectations for the underlying company.
Our experienced equity analysts conduct analysis on a company by company basis.
We look for companies that demonstrate above-average revenue and earnings
growth, strong market positions, superior managements, improving profitability,
and distinctive attributes, such as strong research and development or superior
marketing ability. Portfolios are kept fully invested and consistent with
large-cap growth equity characteristics.
We are pleased to report that Jennison's large-cap growth strategy was
particularly effective during the six months ended April 30, 2000. Our portion
of the Large-Cap Growth Portfolio significantly outperformed the S&P 500 Index
for the semiannual period.
Of course, our growth-oriented strategy was key to the Portfolio's
outperformance, as the preference of most investors during the semiannual period
was for growth-oriented stocks. Investors especially sought exposure to the
technology and Internet-related sectors of the market. During these months, the
economy continued to perform strongly. GDP growth exceeded expectations, as
driven by capital spending for technology-related equipment as well as by strong
consumption. Interest rates rose over the period, but investors seemed to
believe that rapid earnings growth and little need for credit would support
earnings growth rates for most technology and telecommunications companies.
Also key to the Portfolio's strong outperformance was our sector positioning and
individual stock selection. We maintained our bias toward large-cap stocks
throughout.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
The primary reason for our outperformance was an overweighting in technology
stocks, including emerging growth industries such as fiber optics and broadband
semiconductor manufacturers. We focused on those fiber optic companies
benefiting from the build-out of telecommunications infrastructure systems. We
also focused on semiconductor companies benefiting from the fact that demand for
these chips has expanded beyond desk-top personal computers and has led to truly
exploding growth potential. Some of our larger technology holdings were Cisco
Systems, Intel and Texas Instruments.
The Portfolio also benefited from our overweighting in telecommunications
stocks, particularly those companies involved in broadband and wireless
technologies, such as Vodafone AirTouch and Nokia. Equally important, we were
underweighted in the traditionally economically-sensitive sectors of the market,
such as utilities and basic materials.
Although the finance and specialty retail sectors did not perform well as a
group over the semiannual period, our stock selection within these industries
was notably successful. For example, American International Group and Tiffany's
were winners for the Portfolio.
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Style SELECT Series 2000 Semiannual Report [LOGO] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE] [ADVISORS]
FUND OBJECTIVE
SEEKS LONG-TERM GROWTH OF CAPITAL [LOGO] [LOGO] [LOGO]
BY INVESTING GENERALLY IN EQUITY
SECURITIES OF LARGE-SIZED COMPANIES
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
We anticipate that the year 2000 may be another above-trend year for earnings
growth. While we believe earnings growth will be more moderate than in 1999, we
believe the holdings in our portion of the Portfolio are well-positioned to
outperform the market as a whole. Given current valuation levels, however, it
remains unlikely that prices will move higher in the form of multiple expansion.
Our major concern looking ahead is the possibility of higher than expected
economic growth. Such a scenario would likely cause the Federal Reserve Board to
become more aggressive in reining in the growth of money and credit in an
attempt to maintain price stability. It is difficult to estimate how high
short-term interest rates might have to go in order to slow down the U.S.
economy, but it is more clear that rising interest rates could have a negative
effect on price/earnings ratios and create an increasingly volatile environment
for stock prices.
Given that we use a bottom-up approach to individual stock selection and
purchases and sales of holdings are based on changes in company fundamentals, we
do not anticipate material changes to the current sector allocations based on
our macroeconomic outlook. We remain extremely optimistic about our Portfolio's
holdings and their above-average growth potential.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. The S&P 500 Index is the Standard & Poor's
500 Composite Stock Price Index, a widely-recognized, unmanaged index of common
stock prices. Investors cannot actually make investments in this index.
9
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[GRAPHIC]
2000 SEMIANNUAL REPORT -------------------
Style SELECT Series-Registered Trademark-
MID-CAP GROWTH PORTFOLIO -----[GRAPHIC]-----
[SIDENOTE]
FUND FOCUS
MID-CAP GROWTH PORTFOLIO CLASS A
OUTPERFORMS LIPPER CATEGORY
AVERAGE AND S&P 400 MIDCAP INDEX
FOR 6-MONTH PERIOD ENDED
APRIL 30, 2000*
Q&A
BRIAN CLIFFORD & TEAM, Portfolio Manager
SUNAMERICA ASSET MANAGEMENT
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
Even in an environment of narrow performance and significant market volatility,
we are pleased to report that our portion of the Mid-Cap Growth Portfolio
outperformed both the Russell Mid Cap Growth Index and the S&P 500 Index for the
six months*. One of the primary reasons for such success is our flexibility. We
were often able to move quickly in and out of positions as market conditions
changed and use periods of market weakness to take advantage of buying
opportunities.
In addition, we remained disciplined in our individual stock selection process.
Through the evaluation of political, economic and social market influences, we
identify those sectors of the market that we believe offer attractive growth
opportunities. Individual stocks within those groups are then selected on
fundamental and technical merits. This analysis focuses on companies with solid
balance sheets, quality managements and good product visibility. We search for
leading companies early in their growth cycles that are under-researched by Wall
Street and not yet household names.
For the semiannual period, growth stocks outperformed value stocks, and so the
Portfolio also benefited significantly from its strong growth bias. Sector
allocation was key as well. Our portion of the Portfolio overweighted the top
performing technology, healthcare and energy sectors. Equally important, we
maintained underweightings in the poorly performing consumer cyclicals, basic
materials, and retail sectors.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
Within the Portfolio's overweighted technology sector, we focused on the
software, semiconductor capital equipment, Internet infrastructure, storage area
networking, and application service provider sub-sectors. Network-attached
storage provider Network Appliances, fiber optic components manufacturer E-TEK
Dynamics, and synchronization software company Puma Technology each performed
particularly well. Gene Logic, which provides analysis software for genomics
companies, also did well, as did Interliant, an applications service provider.
New names to the Portfolio during the semiannual period included Metalink, BEA
Software, and Sanmina Corp.
Within the healthcare sector, we focused on therapeutic and genomic
biotechnology companies. Holdings such as Biogen, Genzyme, Human Genome
Sciences, Millennium Pharmaceuticals, and Affymetrix each performed well during
the semiannual period. We added Curagen, Celera, MedImmune, and Immunex to the
Portfolio.
Recognizing a fundamental shift in the energy industry, we focused the
Portfolio's overweighted energy position in oil services. Major oil producers
plan to increase capital expenditures, and we believe much of that will go to
companies in the business of oil exploration. In our view, these bigger spending
budgets, along with a sustained rally in the price of oil, earnings growth
strength, increased utilization demand, and attractive valuations, will likely
keep these stocks moving upward. Marine Drilling, Global Marine, Rowan, and
Halliburton each performed well for the Portfolio. New purchases in this sector
over the semiannual period included Patterson Energy and Baker Hughes.
Oil and gas exploration and production company Apache and Peregrine Software
both disappointed, but we continue to hold both based on healthy fundamentals
and positive growth-oriented outlooks.
10
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Style SELECT Series 2000 Semiannual Report [LOGO] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE] [ADVISORS]
FUND OBJECTIVE
SEEKS LONG-TERM GROWTH OF [LOGO] [LOGO] [LOGO]
CAPITAL BY INVESTING GENERALLY
IN EQUITY SECURITIES OF MEDIUM-
SIZED COMPANIES
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
Mid-cap stocks outperformed both large-cap and small-cap stocks during the
semiannual period. While we did see some multiple expansion in the mid-cap
sector during the period, mid-cap companies exhibited strong earnings growth and
positive fundamentals throughout, attracting strong money flows into the sector.
We believe mid-cap stocks will continue to do well, offering investors many of
the high growth characteristics of smaller-cap stocks along with the liquidity
advantages of larger-cap stocks. Earnings reports for mid-cap companies continue
to be generally positive to date. The outlook for profit growth in this market
segment remains strong and relative valuations continue to be attractive.
At the same time, market volatility will no doubt continue. We expect the
Federal Reserve Board to remain vigilant on the inflation front and believe the
likelihood exists that the Federal Reserve Board will continue to raise interest
rates during the remainder of the year. There is also the risk that Presidential
campaign rhetoric and elections may cause market volatility to increase. Given
this outlook, we believe it is important to manage downside risk, as we continue
to seek capital appreciation opportunities.
Overall, we remain constructive on the mid-cap equity market and believe our
portion of the Mid-Cap Growth Portfolio is well positioned for the future.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. The Lipper category average is an equally
weighted performance index, adjusted for capital gains distributions and income
dividends of the largest qualifying funds in this investment objective. The S&P
400 MidCap Index is a widely-recognized, unmanaged index of common stock prices.
Investors cannot actually make investments in these indices.
11
<PAGE>
[GRAPHIC]
2000 SEMIANNUAL REPORT -----------------------------------------
Style SELECT Series-Registered Trademark-
AGGRESSIVE GROWTH PORTFOLIO -----------------------------------------
[SIDENOTE]
FUND FOCUS
AGGRESSIVE GROWTH PORTFOLIO
CLASS A OUTPERFORMS LIPPER
CATEGORY AVERAGE AND MORNINGSTAR
OBJECTIVE AS WELL AS THE RUSSELL
2500 GROWTH INDEX FOR 6-MONTH
PERIOD ENDED APRIL 30, 2000*
Q&A
SCOTT W. SCHOELZEL, Portfolio Manager
JANUS
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
Janus managers employed the same strategy we always have for our portion of the
Portfolio--a bottom-up investment strategy. We focus on companies experiencing
above-average unit growth and on companies realizing positive change as a result
of a new product development, an improved regulatory environment, or a strong
management team. We believe that intensive research, based on the fundamental
factors affecting the business prospects of companies, can uncover growth
opportunities not widely recognized by the investment community.
Stocks advanced in the fourth calendar quarter of 1999, with technology and
telecommunications companies leading the way. The Federal Reserve Board interest
rate hike of November 16th did not discourage the bull market, but merely
prompted investors to focus their investments in companies possessing only the
most rapid growth prospects. This created an extremely narrow market.
Two more interest rate hikes by the Federal Reserve Board on February 2nd and
March 21st, along with a complicated outlook for interest rates, stirred intense
equity market volatility during the first quarter of 2000. Stocks finished the
period mixed. Once again, technology shares led the way, but by the end of
March, the market appeared to be rotating toward companies in the consumer and
manufacturing sectors. In April, stocks took a turn for the worse as several
factors, including higher interest rates and concerns about inflated stock
valuations, subverted their momentum. Technology stocks bore the brunt of the
sell-off.
While we monitored these developments in the macro-
environment, they did not impact our investment decisions. Regardless of how the
broader economy or the equity markets overall are behaving, we strive to
identify those factors that may make our holdings move over the long term. We
sift through hundreds of investment ideas, scrutinize business models, quiz
management teams, and gradually forge strong relationships with individual
companies. Only after we believe we have found a gem that we believe is capable
of winning in any market environment will we buy.
We are pleased to report that our investment style, i.e. our focus on the very
growth stocks that the markets rewarded, served our investors well for the
semiannual period. We continued to focus on the Internet and telecommunications
sectors, and strong performance by stocks in these sectors particularly
contributed to the Portfolio's outperformance.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
Our portion of the Portfolio had several winners.
- Internet infrastructure giant Cisco Systems gained after making an acquisition
that should enhance its intellectual superiority and broaden its product line.
- Shares of Internet software maker Inktomi soared after the company outlined
its wireless strategy. We believe the opportunity for this company is
open-ended because its software powers many of the Web's search engines.
- Texas Instruments, which makes circuits for wireless phones, gained upon the
introduction of two chip sets that should allow the company to compete in new
product markets.
- Nokia shares surged following the company's announcement that sales should
rise by as much as 40% next year. These numbers surpassed most expectations
but were in line with our research.
- Time Warner's stock moved higher after Internet bellwether America Online
announced it would acquire the media giant. We are extremely optimistic about
the content and distribution synergies potentially realized by this union.
We are most pleased to report that our portion of the Portfolio had only one
real laggard--Pfizer. Pfizer's hostile bid for Warner-Lambert could jeopardize
the companies' revenue sharing agreement for Lipitor, the blockbuster
anti-cholesterol drug. While these developments prompted a decline in Pfizer's
shares, we remain optimistic about the company's burgeoning drug pipeline.
12
<PAGE>
Style SELECT Series 2000 Semiannual Report [GRAPHIC] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE]
FUND OBJECTIVE [ADVISERS]
SEEKS LONG-TERM GROWTH OF [LOGO] [LOGO] [LOGO]
CAPITAL BY INVESTING GENERALLY
IN EQUITY SECURITIES OF SMALL
AND MEDIUM SIZED COMPANIES.
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
While the future is filled with promise, it is also laden with events and
circumstances that are difficult to analyze and, in some cases, are rather
unpredictable, particularly over the short term. For that reason, our analysts
continue to do what we do best--focus on finding great individual companies
through intensive research. By investing in best-of-breed businesses that we
believe will dominate their respective industries for years to come, we do not
get sidetracked by day-to-day or even quarter-to-quarter vagaries of the
marketplace. By seeking to know our investment universe better than anyone and
by constantly monitoring the competitive landscape, we are confident our
Portfolio will provide solid long-term results for our shareholders.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. Morningstar proprietary ratings reflect
historical risk-adjusted performance as of April 30, 2000. They are subject to
change every month. The Lipper category average is an equally weighted
performance index, adjusted for capital gains distributions and income dividends
of the largest qualifying funds in this investment objective. The Russell 2500
Growth Index measures the performance of those Russell 2500 companies with
higher price-to-book ratios and higher forecasted growth values. Investors
cannot actually make investments in these indices.
13
<PAGE>
[GRAPHIC]
2000 SEMIANNUAL REPORT -----------------------------------------
Style SELECT Series-Registered Trademark-
FOCUS PORTFOLIO -----------------------------------------
[SIDENOTE]
FUND FOCUS
FOCUS PORTFOLIO CLASS A RANKS
IN TOP 2% OF LIPPER CATEGORY
AVERAGE AND OUTPERFORMS
MORNINGSTAR CATEGORY AVERAGE
AND S&P 500 INDEX FOR 6-MONTH
PERIOD ENDED APRIL 30, 2000*
Q&A
DAVID ALGER, Portfolio Manager
FRED ALGER MANAGEMENT, INC.
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
We've been managing our portion of the Portfolio since mid-January 2000, and so
our discussion will focus from that point through the end of the semiannual
period on April 30, 2000.
During the last two months of 1999, the equity markets experienced great
strength, led by growth stocks and technology stocks of all market
capitalizations. Nearly all the major equity indices reached all-time highs
during the final week of 1999 and Y2K passed by uneventfully. The market
seemed poised to continue its rally during the traditionally bullish month of
January. Instead, the stock market began to experience increasing volatility
after the New Year, struggling as profit-taking and interest rate fears
weighed heavy.
Against a background of higher commodity prices and
unrelenting economic expansion, the Federal Reserve Board
followed up its three 1999 rate hikes with yet another 0.25% increase on
February 2, 2000. While the S&P 500 and value stocks as a whole continued to
flounder, technology and growth stocks regained the momentum they had previously
lost. During March, however, money flowed out of technology stocks and into "Old
Economy" stocks, including financials, pharmaceuticals and retailers. Many
trading days of March saw the Dow Jones Industrial Average moving strongly in
one direction and the NASDAQ moving decisively in the other, with each index
taking turns in the lead. The bifurcated nature of the market--between growth
and value and between "New Economy" stocks and "Old Economy" stocks--became even
more accentuated as the first calendar quarter drew to a close. The Dow
advanced, and the NASDAQ retreated. Adding to the volatility was yet another
interest rate hike by the Federal Reserve Board on March 21st.
On April 4th, the NASDAQ fell in excess of 500 points to an intra-day low of
3,649. Despite staging a strong recovery within the day, the NASDAQ continued to
plummet throughout the first part of April, bottoming on April 17th to a low of
3,227. This represented a drop of more than 37% from high to low, which
certainly qualified as a full-fledged bear market. Equity markets continued to
be extraordinarily volatile throughout the remainder of April. The NASDAQ closed
at 3,861 at the end of the semiannual period.
Despite such volatility, our portion of the Portfolio posted positive absolute
performance since its inception in mid-January. We continued to be guided by the
same philosophy we have adhered to since our inception in 1964. That is, that
the most profitable investment opportunities are found in companies experiencing
a period of rapid change. We believe these dynamic companies fall into one of
two categories.
- HIGH UNIT VOLUME GROWTH - These are vital, creative companies that offer goods
or services to a rapidly expanding marketplace. They include both established
and emerging firms, offering new or improved products, or firms simply
fulfilling an increased demand for an existing line.
- POSITIVE LIFE CYCLE CHANGE - These are companies experiencing a major change
expected to bring advantageous results. These changes may be as varied as new
management, products or technologies; restructuring or reorganization; or merger
and acquisition.
We believe companies in both these categories are likely to enjoy dynamic
earnings growth that will stimulate investor response and create a powerful
upward movement in their stocks' prices. We rely on in-depth, fundamental
research to discover these companies early--before they are recognized as
"surprise situations" by the rest of the market. This early discovery, before
the market is fully aware, allows us to produce superior rates of return.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
At the end of the semiannual period, our portion of the Portfolio held ten
stocks. Communications equipment, pharmaceuticals and semiconductors capital
equipment represented the top three industries. Nine of the ten stocks were
large-cap holdings, and four of the ten were technology stocks.
During parts of March and April, the Portfolio's performance was negatively
impacted by our slight overweighting in technology, especially Microsoft Corp.,
but for the semiannual period as a whole, our growth bias proved effective.
14
<PAGE>
Style SELECT Series 2000 Semiannual Report [GRAPHIC] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE]
FUND OBJECTIVE [ADVISERS]
SEEKS LONG-TERM GROWTH OF CAPITAL [LOGO] [LOGO] [LOGO]
BY INVESTING IN A FOCUSED PORTFOLIO
OF 30 EQUITY SECURITIES
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
We believe the recent volatility of the equity markets does not truly mean all
that much. Rather, it represents a dramatic, though perhaps obvious, wave of
profit taking in stocks that have done very well for a very long time. After
all, the NASDAQ at the end of the semiannual period was still up more than 50%
versus one year prior. In addition, there have been a number of very positive
developments of late that have been somewhat overlooked by many.
- The price of oil has fallen from $34/barrel to below $26/barrel.
- The bond market has rallied, with the yield on the 30-year Treasury bond
falling to below 6.00%, about 0.75% below where it was trading only months
earlier.
- There are signs the U.S. economy may finally be slowing, including a drop in
leading indicators such as durable goods, consumer confidence and new home
sales.
- Federal Reserve Board Chairman Alan Greenspan recently made the point that he
is not targeting the stock market, but rather consumer spending and that he is
still willing to pursue his philosophy of "gradualism."
In short, we continue to be optimistic about the equity markets as we look into
the second half of the year 2000. At the end of the semi-annual period, we do
not anticipate any changes in our investment strategy.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. Morningstar proprietary ratings reflect
historical risk-adjusted performance as of April 30, 2000. They are subject to
change every month. The Lipper category average is an equally weighted
performance index, adjusted for capital gains distributions and income dividends
of the largest qualifying funds in this investment objective. The S&P 500 Index
is the Standard & Poor's 500 Composite Stock Price Index, a widely-recognized,
unmanaged index of common stock prices. Investors cannot actually make
investments in these indices.
15
<PAGE>
[GRAPHIC]
2000 SEMIANNUAL REPORT -----------------------------------------
Style SELECT Series-Registered Trademark-
FOCUSED GROWTH -----------------------------------------
AND INCOME PORTFOLIO
[SIDENOTE]
FUND FOCUS
FOCUSED GROWTH AND INCOME
PORTFOLIO CLASS A RANKS IN
TOP 2% OF LIPPER CATEGORY
AVERAGE AND OUTPERFORMS
MORNINGSTAR CATEGORY AVERAGE
AND S&P 500 INDEX FOR 6-MONTH
PERIOD ENDED APRIL 30, 2000*
Q&A
FRANCIS GANNON & TEAM, Portfolio Manager
SUNAMERICA ASSET MANAGEMENT
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
We are pleased to report that the portion of the Focused Growth and Income
Portfolio managed by SunAmerica Asset Management significantly outperformed the
S&P 500 Index for the six months ended April 30, 2000*, a highly volatile period
in the equity markets.
At SunAmerica Asset Management, we stayed disciplined to our large-cap blend
style, seeking growth companies, value companies and companies we believe to
have elements of both. As always, we primarily focused on companies based on
both financial analysis and common sense. What we like to call our "real-world
approach" seeks to unearth what we believe are the best companies in the best
industries. Many of these companies are thought to be redefining the direction
of global business.
The Portfolio primarily benefited from our emphasis on the technology sector and
from a focus on companies with histories of above-average dividend yields and
records of increasing those dividends. The reason: a secure and growing dividend
can lead to capital appreciation while helping to contain risk.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
The Portfolio's largest sector weighting was in information technology during
the semiannual period. Holdings included Cisco Systems, Microsoft, EMC, Intel,
JDS Uniphase, Yahoo!, Sycamore Networks, Nortel Networks, Motorola, Dell
Computer, Inktomi, QUALCOMM, and IBM, each of which was a top performer for the
Portfolio.
As oil prices rose over the six month period, the demand for drilling equipment
remained strong. As a result, we focused on the oil service stocks within the
energy sector, primarily through Schlumberger. We maintain an optimistic outlook
for this sector. Even if oil prices fall in the second half of the year as we
expect, the U.S. will still need to produce more oil domestically and thus will
need more exploration equipment.
Within the financial services sector, we focused on asset
management companies, such as Morgan Stanley Dean Witter, and large money center
banks, such as Citigroup and Chase Manhattan. These companies benefited from
high financial market volatility, strong initial public offering (IPO) and
merger and acquisition activity, and growing fee-based business.
The Portfolio also benefited from exposure to the capital goods sector through
such companies as General Electric and to the retail sector through such
companies as Home Depot and Gap Inc.
Portfolio performance continued to benefit from holdings in the information and
entertainment industry. Advertising spending related to the millennium
celebration was high, and we believe this trend will continue as the
Presidential election and the Olympics approach. Broadcast advertising for
Internet companies continues to accelerate. Company holdings included Time
Warner, TV Guide Inc., and Liberty Media Group. We significantly reduced the
Portfolio's weighting in the healthcare sector.
16
<PAGE>
Style SELECT Series 2000 Semiannual Report [GRAPHIC] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE]
FUND OBJECTIVE [ADVISERS]
SEEKS LONG-TERM GROWTH OF [LOGO] [LOGO] [LOGO]
CAPITAL AND A REASONABLE
LEVEL OF INCOME BY INVESTING
IN UP TO 60 EQUITY SECURITIES
OF LARGE-SIZED COMPANIES
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
Our outlook for the equity markets in general is positive. There are
several reasons for our constructive view.
- ONGOING ECONOMIC EXPANSION. The U.S. economy continues to benefit from strong
productivity-led growth without an apparent rise in inflation. We anticipate
U.S. GDP growth of about 4.5% for the year 2000 and a low annual inflation
rate of approximately 2%.
- STRONGER GLOBAL GROWTH. Economic growth continues to improve globally and
recent exponential growth of the technology industry continues to impact
equity investments worldwide. Synchronized worldwide growth is not expected to
cause inflationary pressure due to excess economic capacity.
- BENEFITS OF A "Y2K DIVIDEND." Cash kept on the sidelines by investors as the
millennium approached is flowing back into the market. Also, the investments
companies made in technology to become Y2K compliant will likely stay in
technology, further improving productivity and margin growth.
- MERGER AND ACQUISITION ACTIVITY. Based on attractive valuations, mergers and
acquisitions are continuing at a record-setting pace both in the U.S. and
internationally.
- GOVERNMENT BUDGET SURPLUS. The U.S. Treasury buyback program, which in turn
has contributed to an inversion in the fixed income yield curve, should help
equity market valuations.
- POSITIVE EARNINGS REPORTS. Company profits should continue to be stellar as
the year 2000 progresses, with yet another year of double-digit earnings
growth that we believe will extend beyond the technology sector. We believe
the market corrections in March and April were based on valuations rather than
on earnings or other fundamentals.
At the same time, volatility will no doubt continue. The primary risks we see
ahead include rising interest rates, higher oil prices, and election year
uncertainty. While company earnings reports continue to be generally positive to
date, the threat of earnings disappointments presents the primary investment
risk.
Given this outlook, we intend to continue to focus the Portfolio's investments
in high growth companies that will benefit from emerging trends over the
remainder of the year 2000. Seeking long-term growth of capital and current
income, i.e. total return potential, we believe the Portfolio is well positioned
to help investors meet both their growth and income investment needs over varied
market cycles.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. Morningstar proprietary ratings reflect
historical risk-adjusted performance as of April 30, 2000. They are subject to
change every month. The Lipper category average is an equally weighted
performance index, adjusted for capital gains distributions and income dividends
of the largest qualifying funds in this investment objective. The S&P 500 Index
is the Standard & Poor's 500 Composite Stock Price Index, a widely-recognized,
unmanaged index of common stock prices. Investors cannot actually make
investments in these indices.
17
<PAGE>
[GRAPHIC]
2000 SEMIANNUAL REPORT -----------------------------------------
Style SELECT Series-Registered Trademark-
FOCUSED VALUE PORTFOLIO -----------------------------------------
[SIDENOTE]
FUND FOCUS
FOCUSED VALUE PORTFOLIO
INTRODUCED TO INVESTORS ON
NOVEMBER 1, 1999; CLASS A
CUMULATIVE RETURN OF 10.96%
FOR PERIOD FROM INCEPTION
THROUGH APRIL 30, 2000*
Q&A
PHILLIP DAVIDSON, Portfolio Manager
AMERICAN CENTURY
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
The Focused Value Portfolio's inception date was November 1, 1999, and given
that this is the Portfolio's first shareholder report, it is well worth
reviewing this mutual fund's stylized structure and our investment management
strategies.
The Focused Value Portfolio seeks long-term growth of capital by investing
generally in a total of 30 equity securities that the advisers believe are
undervalued in the market, without regard to market capitalization. This
stylized structure offers the three portfolio managers--American Century
Investment Management, Third Avenue Funds, and Thornburg Investment
Management--flexibility in our respective stock selection processes. At the
same time, given that the Portfolio holds only 30 stocks, this Portfolio
offers investors an aggressive yet strategic value equity fund containing the
managers' very best ideas only.
At American Century, we manage our portion of the Portfolio utilizing our
classic multi-cap value driven strategy that seeks to identify leading
businesses selling at a discount to historical fair value and the catalyst that
will cause them to return to fair value. We use five value price screens to
screen the domestic stock universe for such companies and then conduct
fundamental research to determine which provide the best risk-reward potential.
Our portion of the Focused Value Portfolio represents our team's ten best ideas
at any given time and is not a diversified portfolio.
For the six months ended April 30, 2000, American Century's portion of the
Portfolio outperformed both the S&P/Barra Value Index and the Russell 1000 Value
Index. True to the nature of a focused portfolio, the semiannual return masks
the market volatility that occurred during this period. For the four months from
November through February, our holdings actually declined before a double-digit
rebound in March and April that more than compensated for the earlier months'
losses.
This portfolio volatility was a reflection of similar volatility in the broader
equity markets. Investors pushed the technology sector to record levels from the
beginning of November through the end of February. Such narrowness of the market
was generally at the expense of the traditional value sectors. In fact, during
January and February, the only S&P 500 sector that produced positive returns was
the technology sector. Then technology and the broader equity market experienced
a sharp decline in March, and there was a return to the "Old Economy" stocks
that had become oversold and undervalued. Given this volatility and our
outperformance, our team's discipline to our classic value strategy clearly was
effective.
Medical providers/services, computer software, chemical, and energy stocks
contributed the bulk of the return for our portion of the Portfolio during the
semiannual period. Property & casualty insurance companies, food & beverage,
financial services, and industrial parts stocks were the worst performers for
the six months.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
Columbia HCA Healthcare Corporation was the best performing stock in our portion
of the Portfolio. Columbia is the largest for-profit hospital company in the
United States and has been operating under a cloud of uncertainty for the past
few years due to government investigations into its operating practices. The
company has recently benefited from restructuring that has reduced lower
returning assets and increased core business profits. In addition, the company
has repurchased approximately 17% of its outstanding shares over the past two
years.
Another major contributor to performance was Autodesk Inc., a leading computer
software company. This holding provides a good example of how technology stocks
can work in a traditional value portfolio though considered a traditional growth
sector. Autodesk's stock fell more than 50% from its highs in 1999 due to
several factors, including the market-specific problem of reduced capital
spending on software leading up to Y2K and the company-specific problem of a lag
in bringing new and upgraded products to market. We viewed both of these factors
as transitory and manageable and thus were
18
<PAGE>
Style SELECT Series 2000 Semiannual Report [GRAPHIC] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE]
FUND OBJECTIVE [ADVISERS]
SEEKS LONG-TERM GROWTH OF [LOGO] [LOGO] [LOGO]
CAPITAL BY INVESTING IN A
FOCUSED PORTFOLIO OF 30 EQUITY
SECURITIES USING A "VALUE"
STYLE OF INVESTING
able to take advantage of the temporary undervaluation in the stock price. As
2000 capital spending for software increased and the company introduced new,
upgraded products, the price of the stock rebounded in the first quarter of the
year.
Bush Boake Allen Incorporated, the world's second largest fragrance and flavor
manufacturer, also contributed to performance. This company benefited from
stability in their core businesses with better volumes and pricing due to
recovering demand from Asia and the Far East.
Food stocks were among the most disappointing during the six months. We sold
Archer-Daniels-Midland, Tyson Foods and Interstate Bakeries in favor of
increasing our weighting in telecommunications and electrical equipment
stocks.
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
Although the market's long-running preference for growth stocks continued into
January and February 2000, we know that historically the market has moved in
cycles between growth and value styles. We remain confident that the market's
recent preference for growth stocks will not continue unabated and that a shift
to the value style of investing will occur. The performance of this Portfolio in
March and April of this year is a good sign that when the market does shift, the
Portfolio is well positioned to take advantage. In the meantime, we will
continue to be true to our disciplined, classic value approach of seeking high
quality, leading businesses that are temporarily out of favor.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges.
19
<PAGE>
[GRAPHIC]
2000 SEMIANNUAL REPORT -----------------------------------------
Style SELECT Series-Registered Trademark-
INTERNATIONAL EQUITY PORTFOLIO -----------------------------------------
[SIDENOTE]
FUND FOCUS
INTERNATIONAL EQUITY PORTFOLIO
CLASS A OUTPERFORMS LIPPER CATEGORY
AVERAGE AND MSCI EAFE INDEX FOR
6-MONTH PERIOD ENDED APRIL 30, 2000*
Q&A
DAVID J.L. WARREN & TEAM, Portfolio Manager
ROWE-PRICE FLEMING INTERNATIONAL, INC.
HOW DID YOU MANAGE YOUR PORTION OF THE PORTFOLIO OVER THE PAST SIX MONTHS?
The Rowe-Price Fleming investment approach links a broad macroeconomic framework
with an awareness of attractive individual stock opportunities within each
market. We seek to identify and exploit the often long-term pricing
inefficiencies that result from segmented world stock markets and from valuation
disparities between and within individual developed and emerging markets. Our
stock selection decisions emphasize growth at a reasonable price. During the
semiannual period, our portion of the Portfolio outperformed its benchmark.
Overweight positions in the top-performing technology and media sectors lifted
performance most. Overweighting buoyant markets including Brazil, Mexico and
Sweden and underweighting weaker ones including the UK, Japan and Switzerland
also contributed to our Portfolio's strength relative to the MSCI EAFE Index.
Successful stock selection within certain countries, particularly Japan, Hong
Kong and Italy, and within certain sectors, notably telecommunications and
banking, further added value. Telecommunications, media and technology (TMT)
growth stocks charged ahead until March. However, sector leadership shifted
toward traditional value stocks in March and April. It was the Portfolio's
combination of more reasonably-valued holdings within the "New Economy" TMT
sectors along with less dynamic, steady growth holdings in the value-oriented
sectors that helped performance remain relatively resilient throughout.
WOULD YOU GIVE US MORE SPECIFIC EXAMPLES?
Within Europe, country performance varied considerably based more on each
market's proportion of "New Economy" stocks than on domestic fundamentals.
Sweden's and Finland's markets were strongest, due mostly to the gains of
Ericsson and Nokia. Germany rose as Portfolio holdings Siemens, Deutsche Telekom
and Mannesmann soared. In France, technology and media stocks, such as ST
Microelectronics and Television Francaise 1, were especially strong. The UK and
Switzerland, with fewer TMT companies, were the weakest major markets, although
select stocks, such as Cable and Wireless and Vodafone-Airtouch both performed
strongly. Other winners from Europe in these "New Economy" sectors included
Telefonica (Spain), UPC, VNU, Philips and ASM Lithography (all Netherlands), and
Seat (Italy).
As sector leadership reversed in March, neglected energy producers, financials,
materials and pharmaceuticals rebounded. Royal Dutch/Shell (Netherlands/UK) and
TotalFina Elf (France) made progress. Glaxo Wellcome (UK) improved, and its
agreement to merge with SmithKline Beecham (UK) enhanced its prospects. The
banking sector consolidated as Royal Bank of Scotland won its battle to acquire
the UK's National Westminster Bank. Finnish/Swedish MeritaNordbanken acquired
Danish Unidanmark. In the services sector, the world's largest security company
Securitas (Sweden), global temporary employment agency Adecco (Switzerland), and
contract caterer Compass (UK) each maintained their growth rates.
The Portfolio's Japanese holdings, concentrated in the established,
fundamentally sound technology and consumer electronics companies, performed
strongly in the environment of surging demand for their products. For example,
Sony's plans to provide Internet banking, along with the upcoming launch of its
Playstation 2, propelled its price higher. NEC, Toshiba, Canon, Murata, and
Kyocera also did well. In telecommunications and media, Portfolio holdings NTT
DoCoMo and Fuji TV climbed. While diversified financial broker Nomura Securities
surged, our underweighting of the declining Japanese banking sector helped
Portfolio performance.
In the Pacific ex-Japan, Australia, Singapore and Korea were weaker as
financial, resource and industrial companies dominate those markets. In
contrast, Hong Kong, Taiwan and India registered double-digit gains as its TMT
stocks soared. The Portfolio's leading performers in Hong Kong were Pacific
Century CyberWorks, China Telecom, and Hutchison Whampoa. In Taiwan, electronic
components producer Hon Hai outperformed, and in India, finance company ICICI
was
20
<PAGE>
Style SELECT Series 2000 Semiannual Report [GRAPHIC] SUNAMERICA
MUTUAL FUNDS
[SIDENOTE]
FUND OBJECTIVE [ADVISERS]
SEEKS LONG-TERM GROWTH OF [LOGO] [LOGO]
CAPITAL BY INVESTING GENERALLY
IN EQUITY SECURITIES OF ISSUERS
IN COUNTRIES OTHER THAN THE
UNITED STATES
one of the region's best performers. Despite the Australian market's weakness,
the Portfolio's media holdings were winners, including NewsCorp and PBL, which
both have valuable content and Internet businesses. Korean technology giant
Samsung Electronics also rose.
Further macroeconomic improvements in Brazil and Mexico, coupled with the
buoyancy of regional TMT stocks, boosted Latin America's equity markets. The
Portfolio's largest positions in the region, Telebras (Brazil) and Telmex
(Mexico) performed strongly. Brazil's major energy stock, Petrobras, was also a
market leader.
WHAT IS YOUR INVESTMENT OUTLOOK FOR THE REMAINDER OF THE YEAR 2000?
Looking ahead, we believe accelerating deregulation, restructuring and
consolidation are key catalysts for earnings growth in Europe. The convergence
of information and communication technologies and their application to
traditional businesses are additional stimuli for further market gains. If
Japan's growth potential is to be fully realized, we believe the nation will
need to complement its leading position in "New Economy" technology with a
willingness to alter traditional ways of doing business. In the Pacific
ex-Japan, the slow but steady pace of reform coupled with economic recovery
could fuel growth of traditional and Internet-related sectors. The region's
enthusiastic embracing of the "New Economy" should also stimulate markets. Both
"New" and "Old" economy businesses in Latin America have great potential in the
context of a stable, supportive macroeconomic and political environment.
Following a period of indiscriminate investment in "New Economy" stocks through
much of the semiannual period, we expect March and April's increased selectivity
and attention to fundamentals to continue over the remainder of 2000. Over time,
we anticipate that a group of respected "New Economy," Internet-related
companies will establish themselves, but such a process will likely be
characterized by fierce competition and consolidation. This, along with an
environment of rising interest rates, may mean continued market volatility.
Thus, we see individual stock selection as crucial. The Portfolio's
cross-section of "New Economy" industry leaders with solid fundamentals and "Old
Economy" high caliber, growth businesses positions it well, in our view, for
both up and down markets.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Portfolio returns do not
reflect the impact of sales charges. The Lipper category average is an equally
weighted performance index, adjusted for capital gains distributions and income
dividends of the largest qualifying funds in this investment objective. The MSCI
EAFE Index is a widely-recognized, unmanaged index used to portray the pattern
of common stock price movement in Europe, Australia and the Far East. Investors
cannot actually make investments in this index.
21
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF ASSETS AND LIABILITIES -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LARGE-CAP MID-CAP AGGRESSIVE FOCUSED GROWTH LARGE-CAP
GROWTH GROWTH GROWTH AND INCOME VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
ASSETS:
Investment securities, at value*...... $121,573,295 $168,161,481 $400,344,594 $169,660,393 $59,125,447
Repurchase agreements (cost equals
market).............................. 3,119,000 -- 29,828,000 8,368,000 2,424,000
Short-term securities*................ 3,534,000 7,051,073 24,313,216 8,700,000 828,000
Cash.................................. 645,034 -- 167,053 96,447 4,366
Receivable for shares of beneficial
interest sold........................ 546,391 403,035 3,020,783 1,946,620 614,608
Receivable for investments sold....... 225,776 518,765 10,772,116 611,955 818,905
Interest and dividends receivable..... 50,211 22,502 40,125 114,739 73,645
Deferred organizational expenses...... 5,341 13,885 13,885 5,341 5,341
Prepaid expenses and other assets..... 387 642 1,193 358 272
Receivable from investment adviser.... -- -- -- 51,832 14,433
------------ ------------ ------------ ------------ -----------
Total assets........................ 129,699,435 176,171,383 468,500,965 189,555,685 63,909,017
------------ ------------ ------------ ------------ -----------
LIABILITIES:
Payable for investments purchased..... 1,222,122 2,175,368 25,889,608 7,945,066 432,721
Payable for shares of beneficial
interest redeemed.................... 281,916 134,366 444,405 216,231 117,926
Other accrued expenses................ 268,531 212,536 246,837 99,033 93,921
Investment advisory and management
fees payable......................... 104,382 138,508 352,016 146,807 50,458
Distribution and service maintenance
fees payable......................... 85,559 111,102 270,758 117,777 41,502
Due to investment adviser............. 7,235 6,674 21,520 -- --
Due to custodian bank................. -- 77,822 -- -- --
Written call options at value
(proceeds $214,130 on Aggressive
Growth Portfolio).................... -- -- 574,200 -- --
------------ ------------ ------------ ------------ -----------
Total liabilities................... 1,969,745 2,856,376 27,799,344 8,524,914 736,528
------------ ------------ ------------ ------------ -----------
Net assets........................ $127,729,690 $173,315,007 $440,701,621 $181,030,771 $63,172,489
============ ============ ============ ============ ===========
</TABLE>
See Notes to Financial Statements
22
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF ASSETS AND LIABILITIES -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
LARGE-CAP MID-CAP AGGRESSIVE FOCUSED GROWTH LARGE-CAP
GROWTH GROWTH GROWTH AND INCOME VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
NET ASSETS WERE COMPOSED OF:
Common Stock, $.0001 par value
(1 billion shares authorized)........ $ 614 $ 819 $ 1,375 $ 904 $ 436
Paid-in capital....................... 88,533,830 115,860,125 272,044,114 151,821,438 57,270,026
------------ ------------ ------------ ------------ -----------
88,534,444 115,860,944 272,045,489 151,822,342 57,270,462
Accumulated undistributed net
investment loss...................... (917,551) (1,405,295) (3,129,580) (818,942) (133,557)
Accumulated undistributed net realized
gain on investments, foreign
currency, and other assets and
liabilities.......................... 6,780,630 32,480,118 50,087,181 12,737,045 594,545
Net unrealized appreciation of
investments.......................... 33,332,167 26,379,240 122,058,601 17,290,326 5,441,039
Net unrealized depreciation on written
options contracts.................... -- -- (360,070) -- --
------------ ------------ ------------ ------------ -----------
Net assets........................ $127,729,690 $173,315,007 $440,701,621 $181,030,771 $63,172,489
============ ============ ============ ============ ===========
*Identified cost
Investment securities................. $ 88,241,128 $141,782,241 $278,284,135 $152,370,067 $53,684,408
============ ============ ============ ============ ===========
Short-term securities................. $ 3,534,000 $ 7,051,073 $ 24,315,074 $ 8,700,000 $ 828,000
============ ============ ============ ============ ===========
CLASS A:
Net assets............................ $ 35,077,655 $ 52,857,860 $153,537,833 $ 54,712,308 $16,169,478
Shares outstanding.................... 1,666,009 2,455,082 4,710,187 2,699,160 1,103,501
Net asset value and redemption price
per share............................ $ 21.05 $ 21.53 $ 32.60 $ 20.27 $ 14.65
Maximum sales charge (5.75% of
offering price)...................... 1.28 1.31 1.99 1.24 0.89
------------ ------------ ------------ ------------ -----------
Maximum offering price to public...... $ 22.33 $ 22.84 $ 34.59 $ 21.51 $ 15.54
============ ============ ============ ============ ===========
CLASS B:
Net assets............................ $ 63,088,105 $ 94,004,908 $219,081,456 $ 74,661,657 $31,300,450
Shares outstanding.................... 3,049,121 4,478,329 6,894,702 3,745,366 2,172,183
Net asset value, offering and
redemption price per share (excluding
any applicable contingent deferred
sales charge)........................ $ 20.69 $ 20.99 $ 31.78 $ 19.93 $ 14.41
============ ============ ============ ============ ===========
CLASS II:
Net assets............................ $ 29,563,930 $ 26,452,239 $ 66,189,422 $ 51,656,806 $15,028,978
Shares outstanding.................... 1,429,673 1,258,891 2,083,601 2,594,232 1,042,369
Net asset value and redemption price
per share (excluding any applicable
contingent deferred sales charge).... $ 20.68 $ 21.01 $ 31.77 $ 19.91 $ 14.42
Maximum sales charge (1.00% of
offering price)...................... 0.21 0.21 0.32 0.20 0.15
------------ ------------ ------------ ------------ -----------
Maximum offering price to public...... $ 20.89 $ 21.22 $ 32.09 $ 20.11 $ 14.57
============ ============ ============ ============ ===========
CLASS Z:
Net assets............................ -- -- $ 1,892,910 -- $ 673,583
Shares outstanding.................... -- -- 57,282 -- 45,399
Net asset value, offering and
redemption price per share........... -- -- $ 33.05 -- $ 14.84
============ ============ ============ ============ ===========
</TABLE>
See Notes to Financial Statements
23
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF ASSETS AND LIABILITIES -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
SMALL-CAP INTERNATIONAL
VALUE VALUE EQUITY FOCUS FOCUSED VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
ASSETS:
Investment securities, at value*...... $140,998,568 $44,367,170 $107,799,395 $1,529,678,170 $66,945,089
Repurchase agreements (cost equals
market)............................. 3,583,000 1,604,000 2,286,000 -- 6,903,000
Short-term securities*................ 1,210,000 -- 1,809,000 150,800,102 --
Cash.................................. 2,612 815 141,312 144,006 501
Foreign cash.......................... -- -- 517,375 -- --
Receivable for investments sold....... 1,981,354 265,182 624,516 9,496,652 32,991
Receivable for shares of beneficial
interest sold....................... 135,103 344,407 873,617 20,630,764 2,521,983
Interest and dividends receivable..... 127,693 87,249 313,346 493,370 73,422
Receivable from investment adviser.... 59,150 11,594 2,738 214,201 62,199
Deferred organizational expenses...... 13,885 5,341 13,885 10,393 --
Prepaid expenses and other assets..... 1,035 249 1,410 2,319 48,057
Foreign currency contracts............ -- -- 340,289 -- --
Unrealized appreciation of forward
foreign currency contracts.......... -- -- 323,676 -- --
------------ ----------- ------------ -------------- -----------
Total assets........................ 148,112,400 46,686,007 115,046,559 1,711,469,977 76,587,242
------------ ----------- ------------ -------------- -----------
LIABILITIES:
Payable for investments purchased..... 1,919,084 355,048 776,859 41,701,863 3,308,488
Payable for shares of beneficial
interest redeemed................... 222,303 188,841 80,269 2,010,284 85,004
Other accrued expenses................ 212,538 122,313 272,983 363,873 57,002
Investment advisory and management
fees payable........................ 120,427 37,264 102,603 1,122,937 54,471
Distribution and service maintenance
fees payable........................ 92,576 29,152 73,083 1,128,193 43,396
Payable for variation margin on
futures contracts................... 9,125 -- 11 -- --
Foreign currency contracts............ -- -- 340,612 -- --
Unrealized depreciation of forward
foreign currency contracts.......... -- -- 135,767 -- --
Written call options at value
(proceeds $28,484 on International
Equity Portfolio)................... -- -- 30,270 -- --
------------ ----------- ------------ -------------- -----------
Total liabilities................... 2,576,053 732,618 1,812,457 46,327,150 3,548,361
------------ ----------- ------------ -------------- -----------
Net assets........................ $145,536,347 $45,953,389 $113,234,102 $1,665,142,827 $73,038,881
============ =========== ============ ============== ===========
</TABLE>
See Notes to Financial Statements
24
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF ASSETS AND LIABILITIES -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
SMALL-CAP INTERNATIONAL
VALUE VALUE EQUITY FOCUS FOCUSED VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
NET ASSETS WERE COMPOSED OF:
Common Stock, $.0001 par value
(1 billion shares authorized).......... $ 865 $ 360 $ 704 $ 6,927 $ 528
Paid-in capital......................... 124,637,253 47,161,483 91,145,636 1,348,185,976 67,690,804
------------ ----------- ------------ -------------- -----------
124,638,118 47,161,843 91,146,340 1,348,192,903 67,691,332
Accumulated undistributed net investment
income (loss).......................... (66,605) 64,979 (873,940) (7,310,117) (43,756)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and
liabilities............................ 9,202,126 (1,805,596) 3,222,573 146,198,909 432,092
Net unrealized appreciation of
investments............................ 11,789,676 532,416 19,576,510 178,061,132 4,959,213
Net unrealized appreciation
(depreciation) of foreign currency, and
other assets and liabilities........... -- (253) 164,405 -- --
Net unrealized depreciation on futures
contracts.............................. (26,968) -- -- -- --
Net unrealized depreciation on written
options contracts...................... -- -- (1,786) -- --
------------ ----------- ------------ -------------- -----------
Net assets.......................... $145,536,347 $45,953,389 $113,234,102 $1,665,142,827 $73,038,881
============ =========== ============ ============== ===========
*Identified cost
Investment securities................... $129,208,892 $43,834,754 $ 88,222,885 $1,351,617,038 $61,985,876
============ =========== ============ ============== ===========
Short-term securities................... $ 1,210,000 -- $ 1,809,000 $ 150,800,102 --
============ =========== ============ ============== ===========
CLASS A:
Net assets.............................. $ 50,918,001 $14,895,795 $ 37,129,022 $ 357,433,250 $22,930,082
Shares outstanding...................... 2,982,184 1,152,723 2,272,226 14,721,718 1,653,515
Net asset value and redemption price per
share.................................. $ 17.07 $ 12.92 $ 16.34 $ 24.28 $ 13.87
Maximum sales charge (5.75% of offering
price)................................. 1.04 0.79 1.00 1.48 0.85
------------ ----------- ------------ -------------- -----------
Maximum offering price to public........ $ 18.11 $ 13.71 $ 17.34 $ 25.76 $ 14.72
============ =========== ============ ============== ===========
CLASS B:
Net assets.............................. $ 80,860,311 $21,107,522 $ 56,904,154 $ 588,621,046 $14,514,368
Shares outstanding...................... 4,844,853 1,660,911 3,562,927 24,555,745 1,049,459
Net asset value, offering and redemption
price per share (excluding any
applicable contingent deferred sales
charge)................................ $ 16.69 $ 12.71 $ 15.97 $ 23.97 $ 13.83
============ =========== ============ ============== ===========
CLASS II:
Net assets.............................. $ 13,385,511 $ 9,603,585 $ 18,874,529 $ 707,142,483 $35,594,431
Shares outstanding...................... 802,305 755,350 1,181,922 29,503,335 2,574,193
Net asset value and redemption price per
share (excluding any applicable
contingent deferred sales charge)...... $ 16.68 $ 12.71 $ 15.97 $ 23.97 $ 13.83
Maximum sales charge (1.00% of offering
price)................................. 0.17 0.13 0.16 0.24 0.14
------------ ----------- ------------ -------------- -----------
Maximum offering price to public........ $ 16.85 $ 12.84 $ 16.13 $ 24.21 $ 13.97
============ =========== ============ ============== ===========
CLASS Z:
Net assets.............................. $ 372,524 $ 346,487 $ 326,397 $ 11,946,048 --
Shares outstanding...................... 21,573 26,531 19,714 489,883 --
Net asset value, offering and redemption
price per share........................ $ 17.27 $ 13.06 $ 16.56 $ 24.39 --
============ =========== ============ ============== ===========
</TABLE>
See Notes to Financial Statements
25
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF OPERATIONS -- FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LARGE-CAP MID-CAP AGGRESSIVE FOCUSED GROWTH LARGE-CAP
GROWTH GROWTH GROWTH AND INCOME VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest................................ $ 124,852 $ 245,380 $ 1,016,411 $ 339,322 $ 67,268
Dividends*.............................. 269,648 127,038 213,605 231,627 445,555
----------- ----------- ------------ ----------- ----------
Total investment income............... 394,500 372,418 1,230,016 570,949 512,823
----------- ----------- ------------ ----------- ----------
Expenses:
Investment advisory and management
fees.................................. 592,340 810,250 2,051,830 731,258 286,282
Distribution and service maintenance
fees
Class A............................... 57,337 86,992 245,542 81,361 26,631
Class B............................... 295,420 442,668 1,021,660 316,172 147,413
Class II.............................. 123,556 104,414 247,528 182,625 61,057
Transfer agent fees and expenses
Class A............................... 46,481 63,199 193,638 58,103 22,086
Class B............................... 79,942 111,159 250,083 80,032 41,938
Class II.............................. 31,617 26,090 62,349 43,036 17,534
Class Z............................... -- -- 10,706 -- 11,121
Registration fees
Class A............................... -- -- 1,304 14,407 1,725
Class B............................... -- -- 1,905 3,468 --
Class II.............................. -- 4,087 4,673 9,554 4,210
Class Z............................... -- -- 3,515 -- 2,846
Custodian fees and expenses............. 77,492 80,597 186,090 76,256 64,797
Trustees' fees and expenses............. 2,963 4,340 8,652 1,968 2,002
Audit and tax consulting fees........... 2,625 9,158 10,304 11,644 11,611
Amortization of organizational
expenses.............................. 1,092 4,477 4,477 1,092 1,092
Insurance expense....................... 25 127 191 -- 27
Printing expense........................ -- 20,435 36,929 2,248 3,238
Legal fees and expenses................. -- 4,785 7,450 -- --
Miscellaneous expenses.................. 380 419 886 1,042 471
----------- ----------- ------------ ----------- ----------
Total expenses........................ 1,311,270 1,773,197 4,349,712 1,614,266 706,081
Less: expenses waived/reimbursed by
investment adviser.................. -- -- -- (223,475) (60,117)
Less: custody credits earned on cash
balances............................ (1,582) (1,387) (9,316) (2,662) (1,818)
----------- ----------- ------------ ----------- ----------
Net expenses.......................... 1,309,688 1,771,810 4,340,396 1,388,129 644,146
----------- ----------- ------------ ----------- ----------
Net investment loss....................... (915,188) (1,399,392) (3,110,380) (817,180) (131,323)
----------- ----------- ------------ ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investments.......... 6,962,697 33,108,767 50,829,540 13,374,522 897,930
Net realized gain (loss) on options....... -- -- 458,929 (248,169) --
Net realized gain on foreign currency and
other assets and liabilities............ -- -- -- 21 1
Net change in unrealized appreciation/
depreciation of investments............. 12,425,282 7,386,015 50,928,967 7,922,522 2,636,769
Net change in unrealized appreciation/
depreciation on written options
contracts............................... -- -- (322,010) -- --
Net change in unrealized appreciation/
depreciation of foreign currency and
other assets and liabilities............ -- -- -- (12) --
----------- ----------- ------------ ----------- ----------
Net realized and unrealized gain on
investments, foreign currency and other
assets and liabilities.................. 19,387,979 40,494,782 101,895,426 21,048,884 3,534,700
----------- ----------- ------------ ----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS:............................. $18,472,791 $39,095,390 $ 98,785,046 $20,231,704 $3,403,377
=========== =========== ============ =========== ==========
*Net of foreign withholding taxes on
dividends of............................ $ 3,517 $ 424 $ 6,836 $ 1,225 $ 2,801
=========== =========== ============ =========== ==========
</TABLE>
See Notes to Financial Statements
26
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF OPERATIONS -- FOR THE SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
SMALL-CAP INTERNATIONAL FOCUSED
VALUE VALUE EQUITY FOCUS VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest.................................... $ 203,580 $ 131,058 $ 82,297 $ 3,057,168 $ 84,787
Dividends*.................................. 1,383,901 430,319 445,995 1,741,591 292,160
---------- ---------- ----------- ------------ ----------
Total investment income................... 1,587,481 561,377 528,292 4,798,759 376,947
---------- ---------- ----------- ------------ ----------
Expenses:
Investment advisory and management fees..... 767,035 223,703 592,836 5,283,700 217,122
Distribution and service maintenance fees
Class A................................... 94,912 26,100 63,158 488,163 30,677
Class B................................... 431,006 107,015 279,020 2,268,304 39,803
Class II.................................. 63,957 41,368 78,945 2,518,565 89,677
Transfer agent fees and expenses
Class A................................... 83,317 22,544 49,634 325,839 23,598
Class B................................... 132,020 32,778 76,214 517,651 12,528
Class II.................................. 18,757 12,152 22,127 561,775 22,796
Class Z................................... 11,045 10,821 10,290 5,772 --
Registration fees
Class A................................... -- -- -- 45,698 5,399
Class B................................... -- -- -- 79,217 3,996
Class II.................................. 3,380 3,206 4,428 84,644 5,652
Class Z................................... 2,160 1,273 2,237 3,828 --
Custodian fees and expenses................. 101,004 57,370 139,458 439,091 57,966
Printing expense............................ 49,885 780 15,454 53,554 22,853
Audit and tax consulting fees............... 12,278 9,110 16,685 10,897 11,305
Trustees' fees and expenses................. 5,692 1,733 1,656 20,622 1,027
Legal fees and expenses..................... 4,825 -- 3,256 11,483 13,787
Amortization of organizational expenses..... 4,477 1,092 4,477 1,693 --
Insurance expense........................... 270 29 53 49 --
Miscellaneous expenses...................... 553 2,711 330 2,543 12,892
---------- ---------- ----------- ------------ ----------
Total expenses............................ 1,786,573 553,785 1,360,258 12,723,088 571,078
Less: expenses waived/reimbursed by
investment adviser...................... (94,922) (58,950) (31,187) (586,725) (147,429)
Less: custody credits earned on cash
balances................................ (5,276) (632) (2,643) (31,281) (2,946)
---------- ---------- ----------- ------------ ----------
Net expenses.............................. 1,686,375 494,203 1,326,428 12,105,082 420,703
---------- ---------- ----------- ------------ ----------
Net investment income (loss).................. (98,894) 67,174 (798,136) (7,306,323) (43,756)
---------- ---------- ----------- ------------ ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investments.............. 10,031,962 916,468 5,680,209 149,755,093 432,092
Net realized loss on options.................. -- -- (9,640) (2,172,204) --
Net realized loss on future contracts......... (13,000) -- (344,313) -- --
Net realized gain (loss) on foreign currency
and other assets and liabilities............ -- 48 (164,825) -- --
Net change in unrealized appreciation/
depreciation of investments................. (1,120,589) 3,365,011 7,796,955 60,320,568 4,959,213
Net change in unrealized appreciation/
depreciation on written options contracts... -- -- (1,786) -- --
Net change in unrealized appreciation/
depreciation on future contracts............ (26,968) -- -- -- --
Net change in unrealized appreciation/
depreciation of foreign currency and other
assets and liabilities...................... -- (280) 156,765 -- --
---------- ---------- ----------- ------------ ----------
Net realized and unrealized gain on
investments, foreign currency and other
assets and liabilities...................... 8,871,405 4,281,247 13,113,365 207,903,457 5,391,305
---------- ---------- ----------- ------------ ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS:................................. $8,772,511 $4,348,421 $12,315,229 $200,597,134 $5,347,549
========== ========== =========== ============ ==========
*Net of foreign withholding taxes on dividends
of.......................................... $ 3,946 $ 2,267 $ 66,872 $ 30,436 $ 747
========== ========== =========== ============ ==========
*Net of foreign withholding taxes on capital
gains of.................................... $ -- $ -- $ 1,115 $ -- $ --
========== ========== =========== ============ ==========
</TABLE>
See Notes to Financial Statements
27
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LARGE-CAP GROWTH PORTFOLIO MID-CAP GROWTH PORTFOLIO
------------------------------ -------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
<S> <C> <C> <C> <C>
----------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment loss............................ $ (915,188) $(1,137,506) $ (1,399,392) $ (1,951,299)
Net realized gain on investments............... 6,962,697 4,070,851 33,108,767 16,802,129
Net realized gain (loss) on foreign currency
and other assets and liabilities............. -- 2 -- (498)
Net change in unrealized
appreciation/depreciation of investments..... 12,425,282 16,386,674 7,386,015 13,995,487
------------ ----------- ------------ ------------
Net increase in net assets resulting from
operations................................... 18,472,791 19,320,021 39,095,390 28,845,819
------------ ----------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments (Class
A)........................................... (848,381) -- (4,655,172) (1,375,514)
From net realized gains on investments (Class
B)........................................... (1,572,068) -- (8,472,206) (2,566,792)
From net realized gains on investments (Class
II).......................................... (604,576) -- (1,702,654) (382,661)
------------ ----------- ------------ ------------
Total dividends and distributions to
shareholders.................................... (3,025,025) -- (14,830,032) (4,324,967)
------------ ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS (NOTE 8)........ 13,881,777 31,248,547 26,186,216 (1,809,150)
------------ ----------- ------------ ------------
TOTAL INCREASE IN NET ASSETS..................... 29,329,543 50,568,568 50,451,574 22,711,702
NET ASSETS:
Beginning of period.............................. 98,400,147 47,831,579 122,863,433 100,151,731
------------ ----------- ------------ ------------
End of period [including undistributed net
investment loss for April 30, 2000 and
October 31, 1999 of ($917,551), ($2,363),
($1,405,295), and ($5,903) respectively]....... $127,729,690 $98,400,147 $173,315,007 $122,863,433
============ =========== ============ ============
</TABLE>
------------------
See Notes to Financial Statements
28
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED GROWTH
AGGRESSIVE GROWTH PORTFOLIO AND INCOME PORTFOLIO
------------------------------- ------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
<S> <C> <C> <C> <C>
----------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment loss............................ $ (3,110,380) $ (2,994,363) $ (817,180) $ (306,170)
Net realized gain on investments............... 50,829,540 42,805,808 13,374,522 5,923,715
Net realized gain (loss) on options............ 458,929 (1,510,002) (248,169) (20,023)
Net realized gain (loss) on foreign currency
and other assets and liabilities............. -- -- 21 (172)
Net change in unrealized
appreciation/depreciation of investments..... 50,928,967 48,575,991 7,922,522 8,377,336
Net change in unrealized
appreciation/depreciation of foreign currency
and other assets and liabilities............. -- -- (12) 12
Net change in unrealized
appreciation/depreciation on written option
contracts.................................... (322,010) (2,272) -- --
------------ ------------ ------------ -----------
Net increase in net assets resulting from
operations................................... 98,785,046 86,875,162 20,231,704 13,974,698
------------ ------------ ------------ -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments (Class
A)........................................... (12,050,143) -- (1,836,498) (130,146)
From net realized gains on investments (Class
B)........................................... (18,113,404) -- (2,598,962) (234,029)
From net realized gains on investments (Class
II).......................................... (3,525,596) -- (1,269,564) (35,835)
From net realized gains on investments (Class
Z)........................................... (80,760) -- -- --
------------ ------------ ------------ -----------
Total dividends and distributions to
shareholders.................................... (33,769,903) -- (5,705,024) (400,010)
------------ ------------ ------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (NOTE 8)..................... 108,754,745 38,219,588 81,968,013 42,515,184
------------ ------------ ------------ -----------
TOTAL INCREASE IN NET ASSETS..................... 173,769,888 125,094,750 96,494,693 56,089,872
NET ASSETS:
Beginning of period.............................. 266,931,733 141,836,983 84,536,078 28,446,206
------------ ------------ ------------ -----------
End of period [including undistributed net
investment loss for April 30, 2000 and October
31, 1999 of ($3,129,580), ($19,200),
($818,942), and ($1,762) respectively]......... $440,701,621 $266,931,733 $181,030,771 $84,536,078
============ ============ ============ ===========
</TABLE>
------------------
See Notes to Financial Statements
29
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
LARGE-CAP VALUE PORTFOLIO VALUE PORTFOLIO
------------------------------- -------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income (loss).................... $ (131,323) $ (78,769) $ (98,894) $ 49,109
Net realized gain on investments................ 897,930 1,241,999 10,031,962 13,645,902
Net realized gain (loss) on future contracts.... -- -- (13,000) 7,640
Net realized gain on foreign currency and other
assets and liabilities........................ 1 5 -- --
Net change in unrealized
appreciation/depreciation of investments...... 2,636,769 3,995,010 (1,120,589) 7,458,536
Net change in unrealized
appreciation/depreciation on future
contracts..................................... -- -- (26,968) --
Net change in unrealized
appreciation/depreciation of foreign currency
and other assets and liabilities.............. -- -- -- 70
----------- ----------- ------------ ------------
Net increase in net assets resulting from
operations.................................... 3,403,377 5,158,245 8,772,511 21,161,257
----------- ----------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments (Class
A)............................................ (346,932) (80,398) (2,614,539) --
From net realized gains on investments (Class
B)............................................ (689,761) (180,925) (4,224,970) --
From net realized gains on investments (Class
II)........................................... (273,043) (37,456) (597,058) --
From net realized gains on investments (Class
Z)............................................ (5,291) (1,202) (3,372) --
----------- ----------- ------------ ------------
Total dividends and distributions to
shareholders..................................... (1,315,027) (299,981) (7,439,939) --
----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS (NOTE 8)......... 2,760,988 6,363,980 (22,538,951) (51,925,266)
----------- ----------- ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........... 4,849,338 11,222,244 (21,206,379) (30,764,009)
NET ASSETS:
Beginning of period............................... 58,323,151 47,100,907 166,742,726 197,506,735
----------- ----------- ------------ ------------
End of period [including undistributed net
investment income (loss) for April 30, 2000 and
October 31, 1999 of ($133,557), ($2,234),
($66,605), and $32,289 respectively]............ $63,172,489 $58,323,151 $145,536,347 $166,742,726
=========== =========== ============ ============
</TABLE>
------------------
See Notes to Financial Statements
30
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
SMALL-CAP VALUE PORTFOLIO INTERNATIONAL EQUITY PORTFOLIO
------------------------------- --------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
<S> <C> <C> <C> <C>
------------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income (loss)..................... $ 67,174 $ (19,799) $ (798,136) $ (593,312)
Net realized gain (loss) on investments.......... 916,468 (1,426,602) 5,680,209 4,703,415
Net realized loss on options..................... -- -- (9,640) (77,740)
Net realized loss on future contracts............ -- -- (344,313) (395,185)
Net realized gain (loss) on foreign currency and
other assets and liabilities................... 48 -- (164,825) (794,038)
Net change in unrealized
appreciation/depreciation of investments....... 3,365,011 4,526,089 7,796,955 10,213,074
Net change in unrealized
appreciation/depreciation on future
contracts...................................... -- -- -- 157,105
Net change in unrealized
appreciation/depreciation of foreign currency
and other assets and liabilities............... (280) 27 156,765 369,570
Net change in unrealized
appreciation/depreciation on written option
contracts...................................... -- -- (1,786) --
------------ ----------- ------------ -----------
Net increase in net assets resulting from
operations..................................... 4,348,421 3,079,715 12,315,229 13,582,889
------------ ----------- ------------ -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments (Class
A)............................................. -- -- -- (106,783)
From net realized gains on investments (Class
B)............................................. -- -- -- (193,653)
From net realized gains on investments (Class
II)............................................ -- -- -- (33,985)
From net realized gains on investments (Class
Z)............................................. -- -- -- (586)
------------ ----------- ------------ -----------
Total dividends and distributions to
shareholders...................................... -- -- -- (335,007)
------------ ----------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS (NOTE 8).......... (3,777,807) (4,812,242) 12,513,349 (9,204,051)
------------ ----------- ------------ -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS............ 570,614 (1,732,527) 24,828,578 4,043,831
NET ASSETS:
Beginning of period................................ 45,382,775 47,115,302 88,405,524 84,361,693
------------ ----------- ------------ -----------
End of period [including undistributed net
investment income (loss) for April 30, 2000 and
October 31, 1999 of $64,979, ($2,195),
($873,940), and ($60,065) respectively].......... $ 45,953,389 $45,382,775 $113,234,102 $88,405,524
============ =========== ============ ===========
</TABLE>
------------------
See Notes to Financial Statements
31
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUS PORTFOLIO FOCUSED VALUE PORTFOLIO
-------------------------------- -----------------------
FOR THE SIX FOR THE YEAR FOR THE PERIOD
MONTHS ENDED ENDED NOVEMBER 1, 1999*
APRIL 30, 2000 OCTOBER 31, THROUGH APRIL 30, 2000
(UNAUDITED) 1999 (UNAUDITED)
<S> <C> <C> <C>
----------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment loss................................. $ (7,306,323) $ (4,229,420) $ (43,756)
Net realized gain on investments.................... 149,755,093 14,151,972 432,092
Net realized loss on options........................ (2,172,204) (117,396) --
Net change in unrealized appreciation/depreciation
of investments.................................... 60,320,568 111,104,979 4,959,213
-------------- ------------ -----------
Net increase in net assets resulting from
operations........................................ 200,597,134 120,910,135 5,347,549
-------------- ------------ -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments (Class A).... (928,076) -- --
From net realized gains on investments (Class B).... (1,517,098) -- --
From net realized gains on investments (Class II)... (1,544,641) -- --
From net realized gains on investments (Class Z).... (15,284) -- --
-------------- ------------ -----------
Total dividends and distributions to shareholders..... (4,005,099) -- --
-------------- ------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (NOTE 8).......................... 763,227,617 473,439,111 67,691,332
-------------- ------------ -----------
TOTAL INCREASE IN NET ASSETS.......................... 959,819,652 594,349,246 73,038,881
NET ASSETS:
Beginning of period................................... 705,323,175 110,973,929 --
-------------- ------------ -----------
End of period [including undistributed net investment
loss for April 30, 2000 and October 31, 1999 of
($7,310,117), ($3,794), and ($43,756)
respectively]....................................... $1,665,142,827 $705,323,175 $73,038,881
============== ============ ===========
</TABLE>
------------------
* Commencement of Operations
See Notes to Financial Statements
32
<PAGE>
STYLE SELECT SERIES LOGO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NET DIVIDENDS
GAIN (LOSS) TOTAL FROM DISTRI- NET
NET ASSET NET ON INVEST- FROM NET BUTIONS ASSET
VALUE, INVEST- MENTS (BOTH INVEST- INVEST- FROM TOTAL VALUE,
PERIOD BEGINNING MENT REALIZED AND MENT MENT CAPITAL DISTRI- END OF TOTAL
ENDED OF PERIOD LOSS(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2)
-------------------------------- --------- -------- ------------ ---------- --------- ------- ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LARGE-CAP GROWTH PORTFOLIO
CLASS A
10/15/97-10/31/97............... $12.50 $ -- $(0.71) $(0.71) $ -- $ -- $ -- $11.79 (5.68)%
10/31/98........................ 11.79 (0.11) 2.05 1.94 (0.01) -- (0.01) 13.72 16.42
10/31/99........................ 13.72 (0.16) 4.67 4.51 -- -- -- 18.23 32.87
04/30/00(6)..................... 18.23 (0.11) 3.48 3.37 -- (0.55) (0.55) 21.05 15.95
CLASS B
10/15/97-10/31/97............... 12.50 -- (0.71) (0.71) -- -- -- 11.79 (5.68)
10/31/98........................ 11.79 (0.21) 2.04 1.83 -- -- -- 13.62 15.54
10/31/99........................ 13.62 (0.27) 4.63 4.36 -- -- -- 17.98 32.01
04/30/00(6)..................... 17.98 (0.18) 3.44 3.26 -- (0.55) (0.55) 20.69 18.42
CLASS II
10/15/97-10/31/97............... 12.50 -- (0.72) (0.72) -- -- -- 11.78 (5.76)
10/31/98........................ 11.78 (0.20) 2.04 1.84 -- -- -- 13.62 15.64
10/31/99........................ 13.62 (0.27) 4.62 4.35 -- -- -- 17.97 31.94
04/30/00(6)..................... 17.97 (0.18) 3.44 3.26 -- (0.55) (0.55) 20.68 18.43
-------------------------------------------------------------------------------------------------------------------------------
MID-CAP GROWTH PORTFOLIO
CLASS A
11/19/96-10/31/97............... $12.50 $(0.16) $ 1.37 $ 1.21 $ -- $ -- $ -- $13.71 9.68%
10/31/98........................ 13.71 (0.18) 1.07 0.89 -- -- -- 14.60 6.49
10/31/99........................ 14.60 (0.21) 4.42 4.21 -- (0.64) (0.64) 18.17 29.83
04/30/00(6)..................... 18.17 (0.14) 5.67 5.53 -- (2.17) (2.17) 21.53 32.65
CLASS B
11/19/96-10/31/97............... 12.50 (0.25) 1.38 1.13 -- -- -- 13.63 9.04
10/31/98........................ 13.63 (0.27) 1.06 0.79 -- -- -- 14.42 5.80
10/31/99........................ 14.42 (0.31) 4.34 4.03 -- (0.64) (0.64) 17.81 28.92
04/30/00(6)..................... 17.81 (0.20) 5.55 5.35 -- (2.17) (2.17) 20.99 32.26
CLASS II
3/06/97-10/31/97................ 11.93 (0.18) 1.89 1.71 -- -- -- 13.64 14.33
10/31/98........................ 13.64 (0.27) 1.06 0.79 -- -- -- 14.43 5.79
10/31/99........................ 14.43 (0.32) 4.36 4.04 -- (0.64) (0.64) 17.83 28.97
04/30/00(6)..................... 17.83 (0.21) 5.56 5.35 -- (2.17) (2.17) 21.01 32.22
-------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
CLASS A
11/19/96-10/31/97............... $12.50 $(0.11) $ 3.51 $ 3.40 $ -- $ -- $ -- $15.90 27.20%
10/31/98........................ 15.90 (0.16) 0.87 0.71 -- (0.11) (0.11) 16.50 4.55
10/31/99........................ 16.50 (0.23) 9.86 9.63 -- -- -- 26.13 58.36
04/30/00(6)..................... 26.13 (0.19) 9.90 9.71 -- (3.24) (3.24) 32.60 38.77
CLASS B
11/19/96-10/31/97............... 12.50 (0.24) 3.54 3.30 -- -- -- 15.80 26.40
10/31/98........................ 15.80 (0.27) 0.87 0.60 -- (0.11) (0.11) 16.29 3.87
10/31/99........................ 16.29 (0.37) 9.69 9.32 -- -- -- 25.61 57.21
04/30/00(6)..................... 25.61 (0.29) 9.70 9.41 -- (3.24) (3.24) 31.78 38.35
CLASS II
3/06/97-10/31/97................ 13.38 (0.17) 2.59 2.42 -- -- -- 15.80 18.09
10/31/98........................ 15.80 (0.27) 0.88 0.61 -- (0.11) (0.11) 16.30 3.94
10/31/99........................ 16.30 (0.37) 9.67 9.30 -- -- -- 25.60 57.06
04/30/00(6)..................... 25.60 (0.29) 9.70 9.41 -- (3.24) (3.24) 31.77 38.37
CLASS Z
4/03/98-10/31/98................ 18.30 (0.03) (1.70) (1.73) -- -- -- 16.57 (9.45)
10/31/99........................ 16.57 (0.10) 9.91 9.81 -- -- -- 26.38 59.20
04/30/00(6)..................... 26.38 (0.10) 10.01 9.91 -- (3.24) (3.24) 33.05 39.19
<CAPTION>
RATIO OF
NET ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS)
PERIOD PERIOD TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED (000'S) NET ASSETS(4) ASSETS(4) TURNOVER
-------------------------------- ---------- ------------- -------------- ---------
<S> <C> <C> <C> <C>
LARGE-CAP GROWTH PORTFOLIO
CLASS A
10/15/97-10/31/97............... $ 23,609 1.78%(3) 0.34%(3) 1%
10/31/98........................ 14,390 1.78 (0.90) 30
10/31/99........................ 28,050 1.78 (0.98) 66
04/30/00(6)..................... 35,078 1.78(3)(5) (1.10)(3)(5) 27
CLASS B
10/15/97-10/31/97............... 773 2.43(3) (0.84)(3) 1
10/31/98........................ 26,125 2.43 (1.54) 30
10/31/99........................ 51,691 2.43 (1.63) 66
04/30/00(6)..................... 63,088 2.43(3)(5) (1.75)(3)(5) 27
CLASS II
10/15/97-10/31/97............... 166 2.43(3) (0.42)(3) 1
10/31/98........................ 7,317 2.43 (1.54) 30
10/31/99........................ 18,659 2.43 (1.63) 66
04/30/00(6)..................... 29,564 2.43(3)(5) (1.75)(3)(5) 27
--------------------------------
MID-CAP GROWTH PORTFOLIO
CLASS A
11/19/96-10/31/97............... $ 18,404 1.85%(3) (1.19)%(3) 97%
10/31/98........................ 32,115 1.78 (1.19) 135
10/31/99........................ 38,991 1.76 (1.22) 112
04/30/00(6)..................... 52,858 1.78(3)(5) (1.31)(3)(5) 87
CLASS B
11/19/96-10/31/97............... 35,739 2.47(3) (1.92)(3) 97
10/31/98........................ 58,555 2.43 (1.84) 135
10/31/99........................ 70,477 2.40 (1.87) 112
04/30/00(6)..................... 94,005 2.43(3)(5) (1.96)(3)(5) 87
CLASS II
3/06/97-10/31/97................ 4,685 2.45(3) (1.97)(3) 97
10/31/98........................ 9,482 2.43 (1.84) 135
10/31/99........................ 13,396 2.43 (1.89) 112
04/30/00(6)..................... 26,452 2.43(3)(5) (1.98)(3)(5) 87
--------------------------------
AGGRESSIVE GROWTH PORTFOLIO
CLASS A
11/19/96-10/31/97............... $ 38,537 1.84%(3) (0.77)%(3) 150%
10/31/98........................ 55,925 1.78 (0.95) 142
10/31/99........................ 100,468 1.76 (1.00) 126
04/30/00(6)..................... 153,538 1.78(3)(5) (1.16)(3)(5) 61
CLASS B
11/19/96-10/31/97............... 48,594 2.47(3) (1.58)(3) 150
10/31/98........................ 74,998 2.43 (1.60) 142
10/31/99........................ 140,508 2.39 (1.64) 126
04/30/00(6)..................... 219,081 2.43(3)(5) (1.81)(3)(5) 61
CLASS II
3/06/97-10/31/97................ 5,939 2.45(3) (1.68)(3) 150
10/31/98........................ 10,568 2.43 (1.60) 142
10/31/99........................ 25,331 2.41 (1.65) 126
04/30/00(6)..................... 66,189 2.43(3)(5) (1.79)(3)(5) 61
CLASS Z
4/03/98-10/31/98................ 346 1.21(3) (0.36)(3) 142
10/31/99........................ 624 1.21 (0.45) 126
04/30/00(6)..................... 1,893 1.21(3)(5) (0.56)(3)(5) 61
</TABLE>
------------------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Annualized
(4) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
10/31/97 10/31/98 10/31/99 4/30/00 10/31/97 10/31/98 10/31/99 4/30/00
-------- -------- -------- ------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Large-Cap Growth A..... 0.59% 0.72% 0.31% -- Aggressive Growth A.... 0.26% 0.27% 0.08% --
Large-Cap Growth B..... 1.53% 0.80% 0.30% -- Aggressive Growth B.... 0.32% 0.28% 0.06% --
Large-Cap Growth II.... 3.29% 1.42% 0.41% -- Aggressive Growth II... 0.73% 0.44% 0.10% --
Mid-Cap Growth A....... 0.34% 0.30% 0.12% -- Aggressive Growth Z.... -- 7.62% 4.71% 2.14%
Mid-Cap Growth B....... 0.42% 0.33% 0.12% --
Mid-Cap Growth II...... 0.96% 0.39% 0.24% 0.02%
</TABLE>
(5) The expense ratio reflects a gross up of custody expense credits
(6) Unaudited
See Notes to Financial Statements
33
<PAGE>
STYLE SELECT SERIES LOGO
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
NET DIVIDENDS
NET GAIN (LOSS) TOTAL FROM DISTRI- NET
NET ASSET INVEST- ON INVEST- FROM NET BUTIONS ASSET
VALUE, MENT MENTS (BOTH INVEST- INVEST- FROM TOTAL VALUE,
PERIOD BEGINNING INCOME REALIZED AND MENT MENT CAPITAL DISTRI- END OF TOTAL
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2)
-------------------------------- --------- --------- ------------ ---------- --------- ------- ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOCUSED GROWTH AND INCOME
CLASS A
10/15/97-10/31/97............... $12.50 $(0.01) $(0.53) $(0.52) $ -- $ -- $ -- $11.98 (4.16)%
10/31/98........................ 11.98 0.03 1.04 1.07 (0.01) -- (0.01) 13.04 8.95
10/31/99........................ 13.04 (0.04) 4.30 4.26 -- (0.18) (0.18) 17.12 33.10
04/30/00(6)..................... 17.12 (0.07) 4.20 4.13 -- (0.98) (0.98) 20.27 24.48
CLASS B
10/15/97-10/31/97............... 12.50 -- (0.54) (0.54) -- -- -- 11.96 (4.32)
10/31/98........................ 11.96 (0.07) 1.08 1.01 (0.01) -- (0.01) 12.96 8.43
10/31/99........................ 12.96 (0.13) 4.25 4.12 -- (0.18) (0.18) 16.90 32.21
04/30/00(6)..................... 16.90 (0.13) 4.14 4.01 -- (0.98) (0.98) 19.93 24.08
CLASS II
10/15/97-10/31/97............... 12.50 -- (0.53) (0.53) -- -- -- 11.97 (4.24)
10/31/98........................ 11.97 (0.07) 1.06 0.99 (0.01) -- (0.01) 12.95 8.26
10/31/99........................ 12.95 (0.14) 4.26 4.12 -- (0.18) (0.18) 16.89 32.24
04/30/00(6)..................... 16.89 (0.13) 4.13 4.00 -- (0.98) (0.98) 19.91 24.03
--------------------------------------------------------------------------------------------------------------------------------
LARGE-CAP VALUE PORTFOLIO
CLASS A
10/15/97-10/31/97............... $12.50 $ 0.01 $(0.65) $(0.64) $ -- $ -- $ -- $11.86 (5.12)%
10/31/98........................ 11.86 0.03 0.71 0.74 (0.01) -- (0.01) 12.59 6.22
10/31/99........................ 12.59 0.05 1.49 1.54 -- (0.08) (0.08) 14.05 12.28
04/30/00(6)..................... 14.05 -- 0.92 0.92 -- (0.32) (0.32) 14.65 6.71
CLASS B
10/15/97-10/31/97............... 12.50 -- (0.64) (0.64) -- -- -- 11.86 (5.12)
10/31/98........................ 11.86 (0.04) 0.69 0.65 -- -- -- 12.51 5.52
10/31/99........................ 12.51 (0.05) 1.49 1.44 -- (0.08) (0.08) 13.87 11.55
04/30/00(6)..................... 13.87 (0.04) 0.90 0.86 -- (0.32) (0.32) 14.41 6.36
CLASS II
10/15/97-10/31/97............... 12.50 -- (0.64) (0.64) -- -- -- 11.86 (5.12)
10/31/98........................ 11.86 (0.04) 0.69 0.65 -- -- -- 12.51 5.52
10/31/99........................ 12.51 (0.04) 1.48 1.44 -- (0.08) (0.08) 13.87 11.55
04/30/00(6)..................... 13.87 (0.04) 0.91 0.87 -- (0.32) (0.32) 14.42 6.43
CLASS Z
4/16/98-10/31/98................ 13.86 0.06 (1.27) (1.21) (0.01) -- (0.01) 12.64 (8.72)
10/31/99........................ 12.64 0.13 1.49 1.62 -- (0.08) (0.08) 14.18 12.87
04/30/00(6)..................... 14.18 0.04 0.94 0.98 -- (0.32) (0.32) 14.84 7.08
<CAPTION>
RATIO OF
NET ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS)
PERIOD PERIOD TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED (000'S) NET ASSETS(4) ASSETS(4) TURNOVER
-------------------------------- ---------- ------------- -------------- ---------
<S> <C> <C> <C> <C>
FOCUSED GROWTH AND INCOME
CLASS A
10/15/97-10/31/97............... $ 23,593 1.78%(3) 1.35%(3) 2%
10/31/98........................ 9,799 1.78 0.22 98
10/31/99........................ 29,281 1.54 (0.26) 165
04/30/00(6)..................... 54,712 1.46(3)(5) (0.68)(3)(5) 61
CLASS B
10/15/97-10/31/97............... 941 2.43(3) 0.29(3) 2
10/31/98........................ 16,157 2.43 (0.52) 98
10/31/99........................ 39,636 2.20 (0.87) 165
04/30/00(6)..................... 74,662 2.10(3)(5) (1.33)(3)(5) 61
CLASS II
10/15/97-10/31/97............... 143 2.43(3) 0.54(3) 2
10/31/98........................ 2,490 2.43 (0.53) 98
10/31/99........................ 15,619 2.16 (0.97) 165
04/30/00(6)..................... 51,657 2.10(3)(5) (1.31)(3)(5) 61
--------------------------------
LARGE-CAP VALUE PORTFOLIO
CLASS A
10/15/97-10/31/97............... $ 23,240 1.78%(3) 1.07%(3) --%
10/31/98........................ 12,921 1.78 0.22 37
10/31/99........................ 15,996 1.78 0.34 42
04/30/00(6)..................... 16,169 1.78(3)(5) 0.01(3)(5) 60
CLASS B
10/15/97-10/31/97............... 1,325 2.43(3) 0.22(3) --
10/31/98........................ 28,149 2.43 (0.34) 37
10/31/99........................ 31,422 2.43 (0.33) 42
04/30/00(6)..................... 31,300 2.43(3)(5) (0.64)(3)(5) 60
CLASS II
10/15/97-10/31/97............... 172 2.43(3) 0.53(3) --
10/31/98........................ 5,823 2.43 (0.31) 37
10/31/99........................ 10,664 2.43 (0.28) 42
04/30/00(6)..................... 15,029 2.43(3)(5) (0.65)(3)(5) 60
CLASS Z
4/16/98-10/31/98................ 207 1.21(3) 0.97(3) 37
10/31/99........................ 241 1.21 0.89 42
04/30/00(6)..................... 674 1.21(3)(5) 0.56(3)(5) 60
</TABLE>
------------------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Annualized
(4) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
10/31/97 10/31/98 10/31/99 4/30/00 10/31/97 10/31/98 10/31/99 4/30/00
-------- -------- -------- ------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Focused Growth and
Income A............. 0.58% 0.62% 0.37% 0.33 % Large-Cap Value A...... 0.58% 0.67% 0.17% 0.17%
Large-Cap Value B...... 1.16% 0.61% 0.16% 0.14%
Focused Growth and
Income B............. 1.26% 0.67% 0.44% 0.29% Large-Cap Value II..... 3.22% 1.14% 0.22% 0.21%
Large-Cap Value Z...... -- 11.77% 11.86% 8.18%
Focused Growth and
Income II............ 3.12% 2.11% 0.60% 0.30%
</TABLE>
(5) The expense ratio reflects a gross up of custody expense credits
(6) Unaudited
See Notes to Financial Statements
34
<PAGE>
STYLE SELECT SERIES LOGO
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
NET DIVIDENDS
NET GAIN (LOSS) TOTAL FROM DISTRI- NET
NET ASSET INVEST- ON INVEST- FROM NET BUTIONS ASSET
VALUE, MENT MENTS (BOTH INVEST- INVEST- FROM TOTAL VALUE,
PERIOD BEGINNING INCOME REALIZED AND MENT MENT CAPITAL DISTRI- END OF TOTAL
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2)
-------------------------------- --------- --------- ------------ ---------- --------- ------- ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VALUE PORTFOLIO
CLASS A
11/16/96-10/31/97............... $ 12.50 $ -- $ 3.59 $ 3.59 $ -- $ -- $ -- $16.09 28.72%
10/31/98........................ 16.09 -- (0.51) (0.51) -- (0.59) (0.59) 14.99 (3.32)
10/31/99........................ 14.99 0.07 1.76 1.83 -- -- -- 16.82 12.21
04/30/00(6)..................... 16.82 0.02 1.00 1.02 -- (0.77) (0.77) 17.07 6.37
CLASS B
11/16/96-10/31/97............... 12.50 (0.11) 3.61 3.50 -- -- -- 16.00 28.00
10/31/98........................ 16.00 (0.10) (0.50) (0.60) -- (0.59) (0.59) 14.81 (3.92)
10/31/99........................ 14.81 (0.03) 1.73 1.70 -- -- -- 16.51 11.48
04/30/00(6)..................... 16.51 (0.03) 0.98 0.95 -- (0.77) (0.77) 16.69 6.06
CLASS II
3/06/97-10/31/97................ 13.56 (0.08) 2.52 2.44 -- -- -- 16.00 17.99
10/31/98........................ 16.00 (0.11) (0.49) (0.60) -- (0.59) (0.59) 14.81 (3.92)
10/31/99........................ 14.81 (0.03) 1.73 1.70 -- -- -- 16.51 11.48
04/30/00(6)..................... 16.51 (0.03) 0.97 0.94 -- (0.77) (0.77) 16.68 5.99
CLASS Z
4/03/98-10/31/98................ 17.62 0.05 (2.63) (2.58) -- -- -- 15.04 (14.64)
10/31/99........................ 15.04 0.17 1.76 1.93 -- -- -- 16.97 12.83
04/30/00(6)..................... 16.97 0.05 1.02 1.07 -- (0.77) (0.77) 17.27 6.62
--------------------------------------------------------------------------------------------------------------------------------
SMALL-CAP VALUE PORTFOLIO
CLASS A
10/15/97-10/31/97............... $ 12.50 $ 0.01 $(0.37) $(0.36) $ -- $ -- $ -- $12.14 (2.88)%
10/31/98........................ 12.14 0.05 (1.36) (1.31) (0.01) -- (0.01) 10.82 (10.79)
10/31/99........................ 10.82 0.05 0.83 0.88 -- -- -- 11.70 8.13
04/30/00(6)..................... 11.70 0.04 1.18 1.22 -- -- -- 12.92 10.43
CLASS B
10/15/97-10/31/97............... 12.50 0.01 (0.38) (0.37) -- -- -- 12.13 (2.96)
10/31/98........................ 12.13 (0.05) (1.33) (1.38) (0.01) -- (0.01) 10.74 (11.40)
10/31/99........................ 10.74 (0.03) 0.83 0.80 -- -- -- 11.54 7.45
04/30/00(6)..................... 11.54 0.01 1.16 1.17 -- -- -- 12.71 10.14
CLASS II
10/15/97-10/31/97............... 12.50 0.01 (0.37) (0.36) -- -- -- 12.14 (2.88)
10/31/98........................ 12.14 (0.06) (1.33) (1.39) (0.01) -- (0.01) 10.74 (11.47)
10/31/99........................ 10.74 (0.03) 0.84 0.81 -- -- -- 11.55 7.54
04/30/00(6)..................... 11.55 -- 1.16 1.16 -- -- -- 12.71 10.04
CLASS Z
4/03/98-10/31/98................ 13.63 0.04 (2.80) (2.76) (0.02) -- (0.02) 10.85 (20.30)
10/31/99........................ 10.85 0.11 0.83 0.94 -- -- -- 11.79 8.66
04/30/00(6)..................... 11.79 0.08 1.19 1.27 -- -- -- 13.06 10.77
--------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
CLASS A
11/19/96-10/31/97............... $ 12.50 $ 0.01 $(0.05) $(0.04) $ -- $ -- $ -- $12.46 (0.32)%
10/31/98........................ 12.46 (0.01) (0.01) (0.02) -- (0.22) (0.22) 12.22 (0.09)
10/31/99........................ 12.22 (0.03) 2.12 2.09 -- (0.05) (0.05) 14.26 17.15
04/30/00(6)..................... 14.26 (0.09) 2.17 2.08 -- -- -- 16.34 14.59
CLASS B
11/19/96-10/31/97............... 12.50 (0.09) (0.03) (0.12) -- -- -- 12.38 (0.96)
10/31/98........................ 12.38 (0.09) -- (0.09) -- (0.22) (0.22) 12.07 (0.67)
10/31/99........................ 12.07 (0.12) 2.08 1.96 -- (0.05) (0.05) 13.98 16.29
04/30/00(6)..................... 13.98 (0.14) 2.13 1.99 -- -- -- 15.97 14.23
CLASS II
3/06/97-10/31/97................ 12.60 (0.07) (0.15) (0.22) -- -- -- 12.38 (1.75)
10/31/98........................ 12.38 (0.09) -- (0.09) -- (0.22) (0.22) 12.07 (0.67)
10/31/99........................ 12.07 (0.13) 2.10 1.97 -- (0.05) (0.05) 13.99 16.37
04/30/00(6)..................... 13.99 (0.14) 2.12 1.98 -- -- -- 15.97 14.15
CLASS Z
4/06/98-10/31/98................ 13.87 0.03 (1.63) (1.60) -- -- -- 12.27 (11.54)
10/31/99........................ 12.27 0.03 2.16 2.19 -- (0.05) (0.05) 14.41 17.90
04/30/00(6)..................... 14.41 0.01 2.14 2.15 -- -- -- 16.56 14.92
<CAPTION>
RATIO OF
NET ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS)
PERIOD PERIOD TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED (000'S) NET ASSETS(4) ASSETS(4) TURNOVER
-------------------------------- ---------- ------------- -------------- ---------
<S> <C> <C> <C> <C>
VALUE PORTFOLIO
CLASS A
11/16/96-10/31/97............... $ 48,377 1.84%(3) --%(3) 48%
10/31/98........................ 71,116 1.78 (0.01) 69
10/31/99........................ 58,581 1.77 0.43 118
04/30/00(6)..................... 50,918 1.78(3)(5) 0.29(3)(5) 48
CLASS B
11/16/96-10/31/97............... 77,534 2.46(3) (0.74)(3) 48
10/31/98........................ 111,030 2.43 (0.66) 69
10/31/99........................ 95,112 2.40 (0.19) 118
04/30/00(6)..................... 80,860 2.43(3)(5) (0.36)(3)(5) 48
CLASS II
3/06/97-10/31/97................ 9,384 2.45(3) (0.78)(3) 48
10/31/98........................ 15,260 2.43 (0.66) 69
10/31/99........................ 12,976 2.42 (0.21) 118
04/30/00(6)..................... 13,386 2.43(3)(5) (0.37)(3)(5) 48
CLASS Z
4/03/98-10/31/98................ 101 1.21(3) 0.62(3) 69
10/31/99........................ 74 1.21 0.98 118
04/30/00(6)..................... 373 1.21(3)(5) 0.63(3)(5) 48
--------------------------------
SMALL-CAP VALUE PORTFOLIO
CLASS A
10/15/97-10/31/97............... $ 21,346 1.78%(3) 2.57%(3) --%
10/31/98........................ 15,051 1.78 0.42 50
10/31/99........................ 15,473 1.78 0.39 102
04/30/00(6)..................... 14,896 1.78(3)(5) 0.73(3)(5) 35
CLASS B
10/15/97-10/31/97............... 3,112 2.43(3) 1.75(3) --
10/31/98........................ 25,954 2.43 (0.44) 50
10/31/99........................ 22,601 2.43 (0.26) 102
04/30/00(6)..................... 21,108 2.43(3)(5) 0.09(3)(5) 35
CLASS II
10/15/97-10/31/97............... 525 2.43(3) 1.75(3) --
10/31/98........................ 5,968 2.43 (0.48) 50
10/31/99........................ 7,230 2.43 (0.26) 102
04/30/00(6)..................... 9,604 2.43(3)(5) 0.07(3)(5) 35
CLASS Z
4/03/98-10/31/98................ 142 1.21(3) 0.70(3) 50
10/31/99........................ 78 1.21 0.96 102
04/30/00(6)..................... 346 1.21(3)(5) 1.28(3)(5) 35
--------------------------------
INTERNATIONAL EQUITY PORTFOLIO
CLASS A
11/19/96-10/31/97............... $ 24,365 2.10%(3) 0.07%(3) 70%
10/31/98........................ 28,418 2.03 (0.11) 114
10/31/99........................ 29,324 2.03 (0.23) 102
04/30/00(6)..................... 37,129 2.03(3)(5) (1.04)(3)(5) 41
CLASS B
11/19/96-10/31/97............... 42,656 2.72(3) (0.69)(3) 70
10/31/98........................ 47,817 2.68 (0.74) 114
10/31/99........................ 47,342 2.68 (0.92) 102
04/30/00(6)..................... 56,904 2.68(3)(5) (1.72)(3)(5) 41
CLASS II
3/06/97-10/31/97................ 4,459 2.70(3) (0.75)(3) 70
10/31/98........................ 7,982 2.68 (0.71) 114
10/31/99........................ 11,709 2.68 (0.95) 102
04/30/00(6)..................... 18,875 2.68(3)(5) (1.67)(3)(5) 41
CLASS Z
4/06/98-10/31/98................ 145 1.46(3) 0.40(3) 114
10/31/99........................ 32 1.46 0.19 102
04/30/00(6)..................... 326 1.46(3)(5) 0.13(3)(5) 41
</TABLE>
------------------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Annualized
(4) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
10/31/97 10/31/98 10/31/99 4/30/00 10/31/97 10/31/98 10/31/99 4/30/00
-------- -------- -------- ------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Value A............. 0.28% 0.17% 0.04% 0.10% Small-Cap Value II........ 1.42% 1.05% 0.36% 0.27%
Value B............. 0.34% 0.19% 0.02% 0.10% Small-Cap Value Z......... -- 20.37% 20.90% 16.31%
Value II............ 0.63% 0.21% 0.13% 0.14% International Equity A.... 0.37% 0.45% 0.25% 0.03%
Value Z............. -- 28.83% 23.27% 14.77% International Equity B.... 0.45% 0.48% 0.24% 0.03%
Small-Cap Value A... 0.57% 0.66% 0.29% 0.19% International Equity II... 0.87% 0.55% 0.33% 0.08%
Small-Cap Value B... 0.74% 0.62% 0.31% 0.20% International Equity Z.... -- 16.25% 26.35% 23.65%
</TABLE>
(5) The expense ratio reflects a gross up of custody expense credits
(6) Unaudited
See Notes to Financial Statements
35
<PAGE>
STYLE SELECT SERIES LOGO
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
NET DIVIDENDS
NET GAIN (LOSS) TOTAL FROM DISTRI- NET
NET ASSET INVEST- ON INVEST- FROM NET BUTIONS ASSET
VALUE, MENT MENTS (BOTH INVEST- INVEST- FROM TOTAL VALUE,
PERIOD BEGINNING INCOME REALIZED AND MENT MENT CAPITAL DISTRI- END OF TOTAL
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2)
-------------------------------- --------- --------- ------------ ---------- --------- ------- ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOCUS PORTFOLIO
CLASS A
6/08/98-10/31/98................ $ 12.50 $(0.01) $ 0.11 $ 0.10 $ -- $ -- $ -- $12.60 0.80%
10/31/99........................ 12.60 (0.12) 6.75 6.63 -- -- -- 19.23 52.62
04/30/00(6)..................... 19.23 (0.08) 5.22 5.14 -- (0.09) (0.09) 24.28 26.80
CLASS B
6/08/98-10/31/98................ 12.50 (0.04) 0.10 0.06 -- -- -- 12.56 0.48
10/31/99........................ 12.56 (0.23) 6.72 6.49 -- -- -- 19.05 51.67
04/30/00(6)..................... 19.05 (0.16) 5.17 5.01 -- (0.09) (0.09) 23.97 26.37
CLASS II
6/08/98-10/31/98................ 12.50 (0.04) 0.10 0.06 -- -- -- 12.56 0.48
10/31/99........................ 12.56 (0.23) 6.72 6.49 -- -- -- 19.05 51.67
04/30/00(6)..................... 19.05 (0.16) 5.17 5.01 -- (0.09) (0.09) 23.97 26.37
CLASS Z
7/07/99-10/31/99................ 18.18 -- 1.09 1.09 -- -- -- 19.27 6.00
04/30/00(6)..................... 19.27 (0.01) 5.22 5.21 -- (0.09) (0.09) 24.39 27.11
--------------------------------------------------------------------------------------------------------------------------------
FOCUSED VALUE PORTFOLIO
CLASS A
11/01/99-4/30/00(6)............. $ 12.50 $ 0.02 $ 1.35 $ 1.37 $ -- $ -- $ -- $13.87 10.96%
CLASS B
11/01/99-4/30/00(6)............. 12.50 (0.04) 1.37 1.33 -- -- -- 13.83 10.64
CLASS II
11/01/99-4/30/00(6)............. 12.50 (0.04) 1.37 1.33 -- -- -- 13.83 10.64
<CAPTION>
RATIO OF
NET ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS)
PERIOD PERIOD TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED (000'S) NET ASSETS(4) ASSETS(4) TURNOVER
-------------------------------- ---------- ------------- -------------- ---------
<S> <C> <C> <C> <C>
FOCUS PORTFOLIO
CLASS A
6/08/98-10/31/98................ $ 29,770 1.45%(3) (0.21)%(3) 106%
10/31/99........................ 169,734 1.45 (0.70) 161
04/30/00(6)..................... 357,433 1.45(3)(5) (0.68)(3)(5) 105
CLASS B
6/08/98-10/31/98................ 45,817 2.10(3) (0.92)(3) 106
10/31/99........................ 271,531 2.10 (1.34) 161
04/30/00(6)..................... 588,621 2.10(3)(5) (1.33)(3)(5) 105
CLASS II
6/08/98-10/31/98................ 35,387 2.10(3) (0.93)(3) 106
10/31/99........................ 261,536 2.10 (1.34) 161
04/30/00(6)..................... 707,142 2.10(3)(5) (1.33)(3)(5) 105
CLASS Z
7/07/99-10/31/99................ 2,522 0.93(3) (0.09)(3) 161
04/30/00(6)..................... 11,946 0.88(3)(5) (0.10)(3)(5) 105
--------------------------------
FOCUSED VALUE PORTFOLIO
CLASS A
11/01/99-4/30/00(6)............. $ 22,927 1.55%(3)(5) 0.32%(3)(5) 77%
CLASS B
11/01/99-4/30/00(6)............. 14,512 2.20(3)(5) (0.54)(3)(5) 77
CLASS II
11/01/99-4/30/00(6)............. 35,589 2.20(3)(5) (0.56)(3)(5) 77
</TABLE>
------------------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Annualized
(4) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
10/31/97 10/31/98 10/31/99 4/30/00 4/30/00
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Focus A....................... -- 0.32% 0.18% 0.10% Focused Value A............... 0.61%
Focus B....................... -- 0.32% 0.16% 0.10% Focused Value B............... 0.83%
Focus II...................... -- 0.32% 0.17% 0.09% Focused Value II.............. 0.68%
Focus Z....................... -- -- 2.23% 0.33%
</TABLE>
(5) The expense ratio reflects a gross up of custody expense credits
(6) Unaudited
See Notes to Financial Statements
36
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--95.2%
AEROSPACE & MILITARY TECHNOLOGY--0.3%
General Motors Corp., Class H+............................ 4,100 $ 394,881
-------------
BANKS--1.0%
Bank of New York Co., Inc................................. 21,780 894,341
Chase Manhattan Corp...................................... 5,900 425,169
-------------
1,319,510
-------------
BROADCASTING & MEDIA--10.7%
AT&T Corp.-Liberty Media Group, Inc., Class A+............ 31,775 1,586,764
Cablevision Systems Corp., Class A+....................... 15,845 1,072,508
CBS Corp.+................................................ 28,675 1,684,656
Clear Channel Communications, Inc.+....................... 9,300 669,600
Comcast Corp., Class A+................................... 52,220 2,092,064
Grupo Televisa SA GDR+.................................... 10,550 669,266
Interpublic Group of Cos., Inc............................ 13,100 537,100
Omnicom Group, Inc........................................ 6,200 564,588
Time Warner, Inc.......................................... 34,610 3,112,737
Univision Communications, Inc., Class A+.................. 4,600 502,550
Viacom, Inc., Class B+.................................... 20,340 1,105,987
-------------
13,597,820
-------------
COMMUNICATION EQUIPMENT--3.4%
Broadcom Corp., Class A+.................................. 1,300 224,088
Ericsson L.M. Telecommunications Co., ADR Class B......... 8,400 742,875
JDS Uniphase Corp.+....................................... 3,300 342,169
Lucent Technologies, Inc.................................. 29,220 1,817,119
Metromedia Fiber Network, Inc., Class A+.................. 6,400 197,600
QUALCOMM, Inc.+........................................... 1,600 173,500
Tellabs, Inc.+............................................ 16,200 887,962
-------------
4,385,313
-------------
COMPUTERS & BUSINESS EQUIPMENT--4.4%
Compaq Computer Corp...................................... 11,000 321,750
Dell Computer Corp.+...................................... 40,955 2,052,869
Hewlett-Packard Co........................................ 22,400 3,024,000
Lexmark International Group, Inc., Class A+............... 1,600 188,800
-------------
5,587,419
-------------
COMPUTER SOFTWARE--11.7%
Cisco Systems, Inc.+...................................... 60,950 4,225,549
Electronic Data Systems Corp.............................. 20,100 1,381,875
EMC Corp.+................................................ 20,985 2,915,603
Equant NV NY Registry Shares+............................. 5,100 397,800
Microsoft Corp.+.......................................... 48,125 3,356,719
Sun Microsystems, Inc.+................................... 25,200 2,316,825
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMPUTER SOFTWARE (CONTINUED)
Sycamore Networks, Inc.+.................................. 400 31,400
VERITAS Software Corp.+................................... 3,300 $ 353,977
-------------
14,979,748
-------------
DRUGS--5.2%
American Home Products Corp............................... 13,700 769,769
Bristol-Myers Squibb Co.(1)............................... 16,000 839,000
Glaxo Wellcome PLC ADR.................................... 8,400 527,625
Merck & Co., Inc.......................................... 6,100 423,950
Pfizer, Inc.(1)........................................... 50,000 2,106,250
Pharmacia Corp............................................ 15,896 793,807
Schering-Plough Corp.(1).................................. 29,275 1,180,148
-------------
6,640,549
-------------
ELECTRONICS--10.4%
Applied Materials, Inc.+.................................. 26,100 2,657,306
Applied Micro Circuits Corp.+............................. 2,100 270,638
ASM Lithography Holdings NV+.............................. 36,000 1,440,000
Intel Corp................................................ 19,300 2,447,481
KLA-Tencor Corp.+(1)...................................... 4,700 351,912
Linear Technology Corp.................................... 30,890 1,764,591
Motorola, Inc............................................. 5,900 702,469
Solectron Corp.+.......................................... 23,200 1,086,050
STMicroelectronics NV NY Registry Shares.................. 1,200 227,625
Texas Instruments, Inc.................................... 14,070 2,291,651
-------------
13,239,723
-------------
ENERGY SERVICES--0.2%
Schlumberger Ltd.......................................... 2,700 206,719
-------------
ENERGY SOURCES--0.7%
Enron Corp................................................ 12,050 839,734
-------------
ENTERTAINMENT PRODUCTS--0.5%
Electronic Arts, Inc.+.................................... 10,000 605,000
-------------
FINANCIAL SERVICES--8.5%
American Express Co....................................... 17,155 2,574,322
Charles Schwab Corp....................................... 23,550 1,047,975
Citigroup, Inc............................................ 52,687 3,131,584
Federal National Mortgage Association..................... 8,810 531,353
Merrill Lynch & Co., Inc.(1).............................. 6,000 611,625
Morgan Stanley, Dean Witter & Co.......................... 26,740 2,052,295
Wells Fargo Co............................................ 22,000 903,375
-------------
10,852,529
-------------
FOOD, BEVERAGE & TOBACCO--2.9%
Anheuser-Busch Cos., Inc.(1).............................. 7,875 555,680
Bestfoods................................................. 19,000 954,750
Coca-Cola Co.............................................. 32,100 1,510,706
</TABLE>
37
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Large-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
FOOD, BEVERAGE & TOBACCO (CONTINUED)
PepsiCo, Inc.............................................. 19,500 $ 715,406
-------------
3,736,542
-------------
HOUSEHOLD PRODUCTS--2.9%
Estee Lauder Cos., Class A................................ 7,600 335,350
Gillette Co.(1)........................................... 37,000 1,369,000
Warner-Lambert Co.(1)..................................... 17,800 2,025,863
-------------
3,730,213
-------------
HOUSING--2.6%
Home Depot, Inc........................................... 60,085 3,368,515
-------------
INSURANCE--1.4%
American International Group, Inc.*....................... 15,625 1,713,867
-------------
INTERNET CONTENT--0.3%
Juniper Networks, Inc.+................................... 1,100 233,956
VeriSign, Inc.+........................................... 1,400 195,125
-------------
429,081
-------------
INTERNET SOFTWARE--0.5%
America Online, Inc.+..................................... 10,900 651,956
-------------
LEISURE & TOURISM--2.9%
Carnival Corp., Class A................................... 14,000 348,250
Marriott International, Inc., Class A..................... 20,000 640,000
McDonald's Corp.(1)....................................... 38,900 1,483,063
MGM Grand, Inc............................................ 42,700 1,259,650
-------------
3,730,963
-------------
MEDICAL PRODUCTS--3.5%
Amgen, Inc.+(1)........................................... 9,700 543,200
Boston Scientific Corp.+.................................. 28,000 742,000
Genentech, Inc.+.......................................... 2,200 257,400
Johnson & Johnson Co...................................... 14,900 1,229,250
Medtronic, Inc. (1)....................................... 22,600 1,173,788
PE Corp.-PE Biosystems Group.............................. 7,840 470,400
-------------
4,416,038
-------------
MULTI-INDUSTRY--3.5%
Corning, Inc.............................................. 2,100 414,750
General Electric Co....................................... 21,450 3,373,012
Tyco International Ltd.................................... 15,665 719,611
-------------
4,507,373
-------------
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL--5.8%
Circuit City Stores, Inc.(1).............................. 22,300 $ 1,311,519
Costco Wholesale Corp.+................................... 26,250 1,419,140
Gap, Inc.................................................. 34,000 1,249,500
Kohl's Corp.+............................................. 17,600 844,800
Newell Rubbermaid, Inc.................................... 18,100 455,894
Staples, Inc.+............................................ 26,220 499,819
Tiffany & Co.............................................. 7,200 523,350
Wal-Mart Stores, Inc...................................... 20,080 1,111,930
-------------
7,415,952
-------------
TELECOMMUNICATIONS--10.7%
Allegiance Telecommunications, Inc.+...................... 6,250 442,188
AT&T Wireless Group+...................................... 7,100 225,869
Global Crossing Ltd.+..................................... 10,800 340,200
Level 3 Communications, Inc.+............................. 3,600 320,400
Nextel Communications, Inc., Class A+..................... 14,665 1,604,901
Nokia Corp., Class A ADR.................................. 82,600 4,697,875
NTL, Inc.+................................................ 9,725 743,962
Qwest Communications International, Inc.+................. 24,000 1,041,000
Sprint Corp. (PCS Group)+................................. 22,040 1,212,200
Telefonica SA ADR......................................... 13,930 922,862
Vodafone AirTouch PLC ADR................................. 45,340 2,130,999
-------------
13,682,456
-------------
TELEPHONE--1.2%
MCI WorldCom, Inc.+....................................... 27,800 1,263,163
NEXTLINK Communications, Inc., Class A+................... 3,300 278,231
-------------
1,541,394
-------------
TOTAL INVESTMENT SECURITIES--95.2%
(cost $88,241,128)........................................ 121,573,295
-------------
SHORT-TERM SECURITIES--2.8%
American Express Credit Corp. 5.96% due 05/01/00.......... $ 1,234 1,234,000
Federal Home Loan Bank Discount Notes
5.88% due 05/01/00...................................... 1,300 1,300,000
General Electric Capital Corp. 5.90% due 05/01/00......... 1,000 1,000,000
-------------
TOTAL SHORT-TERM SECURITIES
(cost $3,534,000)......................................... 3,534,000
-------------
</TABLE>
38
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Large-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT--2.4%
Agreement with State Street Bank and Trust Co., bearing
4.75%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $3,120,235 collateralized by $2,750,000 U.S.
Treasury Bond 10.75% due 5/15/03 approximate aggregate
value $3,184,357
(cost $3,119,000)....................................... $ 3,119 $ 3,119,000
-------------
TOTAL INVESTMENTS--
(cost $94,894,128)........................................ 100.4% 128,226,295
Liabilities in excess of other assets....................... (0.4) (496,605)
------------- -------------
NET ASSETS-- 100.0% $ 127,729,690
============= =============
</TABLE>
------------------
+ Non-income producing security
* Security represents an investment in an affiliated company
ADR ("American Depositary Receipt")
GDR ("Global Depositary Receipt")
(1) Security is traded with rights attached
See Notes to Financial Statements
39
<PAGE>
STYLE SELECT SERIES LOGO
Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--97.0%
AEROSPACE & MILITARY TECHNOLOGY--0.4%
Titan Corp.+.............................................. 17,700 $ 759,994
-------------
APPAREL & TEXTILES--0.3%
Jones Apparel Group, Inc.+................................ 17,400 516,563
-------------
AUTOMOTIVE--0.8%
Danaher Corp.............................................. 7,500 428,437
Harley-Davidson, Inc.(1).................................. 17,200 684,775
O'Reilly Automotive, Inc.+................................ 18,200 245,700
-------------
1,358,912
-------------
BANKS--0.1%
North Fork Bancorp., Inc. (1)............................. 15,300 247,669
-------------
BROADCASTING & MEDIA--8.1%
American Tower Corp., Class A+............................ 15,800 734,700
AT&T Corp.-Liberty Media Group, Inc., Class A+............ 14,222 710,211
Cablevision Systems Corp., Class A+....................... 12,000 812,250
Catalina Marketing Corp.+................................. 5,300 536,625
Charter Communications, Inc., Class A+.................... 13,800 202,688
Citadel Communications Corp.+............................. 15,100 589,844
Crown Castle International Corp.+......................... 12,400 475,850
EchoStar Communications Corp., Class A+................... 9,200 585,925
GoAmerica, Inc.+.......................................... 3,000 29,813
Harmonic, Inc. +.......................................... 11,700 863,606
Hispanic Broadcasting Corp.+.............................. 8,000 808,500
Infinity Broadcasting Corp., Class A+..................... 5,025 170,536
Lamar Advertising Co.+.................................... 10,900 480,281
Liberty Digital, Inc., Class A+........................... 13,200 422,400
Pinnacle Holdings, Inc.+.................................. 8,200 460,737
Reader's Digest Association, Inc., Class A................ 19,300 617,600
RF Micro Devices, Inc.+................................... 5,100 530,719
Rogers Communications, Inc., Class B+..................... 11,700 304,200
Sirius Satellite Radio, Inc.+............................. 6,900 273,844
TMP Worldwide, Inc.+...................................... 13,500 882,562
Tritel, Inc.+............................................. 21,100 688,387
TV Guide, Inc., Class A+.................................. 16,700 497,869
United States Cellular Corp.+............................. 200 12,013
UnitedGlobalCom, Inc...................................... 3,000 159,375
Univision Communications, Inc., Class A+.................. 10,200 1,114,350
Vyyo, Inc.+............................................... 5,000 105,625
Young & Rubicam, Inc...................................... 16,600 924,412
-------------
13,994,922
-------------
BUSINESS SERVICES--5.9%
Acxiom Corp.+............................................. 16,900 $ 456,300
Applied Micro Circuits Corp.+............................. 6,800 876,350
Ceridian Corp.+........................................... 18,000 390,375
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
BUSINESS SERVICES (CONTINUED)
Concord EFS, Inc.+........................................ 59,750 1,336,906
Dycom Industries, Inc.+................................... 17,950 933,400
Fiserv, Inc.+............................................. 21,675 995,695
Hertz Corp., Class A...................................... 12,600 392,963
Manpower, Inc............................................. 15,900 561,469
MedQuist, Inc.+........................................... 10,000 354,375
National Data Corp........................................ 8,000 222,000
NOVA Corp.+............................................... 28,000 885,500
Pentair, Inc.............................................. 15,200 581,400
Republic Services, Inc.+.................................. 42,000 574,875
Robert Half International, Inc.+(1)....................... 14,000 855,750
United Rentals, Inc.+..................................... 15,900 215,644
Viad Corp................................................. 21,400 543,025
-------------
10,176,027
-------------
CHEMICALS--0.0%
CK Witco Corp............................................. 3 35
Great Lakes Chemical Corp.(1)............................. 1,500 40,407
-------------
40,442
-------------
COMMUNICATION EQUIPMENT--3.4%
ADC Telecommunications, Inc.+............................. 13,700 832,275
Advanced Fibre Communications, Inc.+...................... 9,300 424,894
Avanex Corp.+............................................. 3,100 377,812
Broadcom Corp., Class A+.................................. 3,000 517,125
CIENA Corp.+.............................................. 5,600 692,300
Efficient Networks, Inc.+................................. 1,600 105,200
Finisar Corp.+............................................ 15,000 559,687
Gilat Satellite Networks Ltd.+............................ 4,400 377,850
Globecomm Systems, Inc.+.................................. 3,900 73,613
JDS Uniphase Corp.+....................................... 6,200 642,862
Mitel Corp.+.............................................. 13,900 349,238
QUALCOMM, Inc.+........................................... 3,500 379,531
ViaSat, Inc.+............................................. 13,100 613,244
-------------
5,945,631
-------------
COMPUTERS & BUSINESS EQUIPMENT--1.7%
CIBER, Inc.+.............................................. 21,000 379,313
Jabil Circuit, Inc.+...................................... 23,200 949,750
Network Appliance, Inc.+.................................. 6,200 458,412
Network Solutions, Inc.+.................................. 4,100 606,800
Tech Data Corp.+.......................................... 12,600 528,412
-------------
2,922,687
-------------
COMPUTER SOFTWARE--7.5%
Adobe Systems, Inc........................................ 6,200 749,813
Affiliated Computer Services, Inc., Class A+.............. 15,900 526,688
</TABLE>
40
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Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
COMPUTER SOFTWARE (CONTINUED)
Cambridge Technology Partners, Inc.+...................... 9,200 $ 101,200
Citrix Systems, Inc.+..................................... 14,200 867,087
Digex, Inc.+.............................................. 7,000 546,000
E.piphany, Inc.+.......................................... 1,400 92,488
Electronic Arts, Inc.+.................................... 3,700 223,850
eLoyalty Corp.+........................................... 3,600 59,175
EMC Corp.+................................................ 6,200 861,412
eXcelon Corp.+............................................ 27,800 326,650
HNC Software, Inc.+....................................... 1,400 69,300
Informatica Corp.+........................................ 3,700 155,169
Intuit, Inc.+............................................. 14,900 535,469
ISS Group, Inc.+.......................................... 9,000 813,938
Keane, Inc.+.............................................. 18,400 531,300
Mercury Interactive Corp.+................................ 9,200 828,000
Mission Critical Software, Inc.+.......................... 3,300 118,800
NetIQ Corp.+.............................................. 700 25,725
New Era of Networks, Inc.+................................ 6,000 188,250
Novell, Inc.+ 7,500 147,188
Parametric Technology Corp.+.............................. 10,300 84,009
Peregrine Systems, Inc.+.................................. 19,300 464,406
Puma Technology, Inc.+.................................... 6,000 183,750
Rational Software Corp.+.................................. 10,900 927,862
Siebel Systems, Inc.+..................................... 20,700 2,543,512
SunGard Data Systems, Inc.+............................... 13,100 452,769
Sycamore Networks, Inc.+.................................. 3,000 235,500
Symantec Corp.+........................................... 2,300 143,606
Vitria Technology, Inc.+.................................. 3,200 118,200
-------------
12,921,116
-------------
DRUGS--7.8%
Abgenix, Inc.+............................................ 1,400 125,388
AmeriSource Health Corp., Class A+........................ 28,000 560,000
ArQule, Inc.+............................................. 13,900 164,194
Biogen, Inc.+ (1)......................................... 4,600 270,538
Biovail Corp.+............................................ 9,100 433,956
Cabot Corp................................................ 13,100 353,700
CV Therapeutics, Inc.+.................................... 7,000 279,125
Genzyme Corp.+............................................ 6,200 302,638
Genzyme Corp.-Surgical Division+.......................... 500 4,281
Gilead Sciences, Inc.+.................................... 10,000 541,875
IDEC Pharmaceuticals Corp.+............................... 3,200 204,800
Immunex Corp.+............................................ 9,300 366,188
Medarex, Inc.+............................................ 7,700 408,100
MedImmune, Inc.+.......................................... 13,400 2,143,162
Merck & Co., Inc.......................................... 13,900 966,050
Millenium Pharmaceuticals, Inc.+.......................... 20,000 1,587,500
Molecular Devices Corp.+.................................. 1,200 51,581
Omnicare, Inc............................................. 41,000 622,687
Pfizer, Inc.(1)........................................... 27,800 1,171,075
Schering-Plough Corp.(1).................................. 11,300 455,531
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
DRUGS (CONTINUED)
Sepracor, Inc.+........................................... 6,800 $ 625,600
Shire Pharmaceuticals Group ADR+.......................... 13,100 527,275
SuperGen, Inc.+........................................... 8,000 265,000
Teva Pharmaceutical Industries Ltd. ADR................... 20,000 880,000
Watson Pharmaceuticals, Inc.+............................. 4,700 211,206
-------------
13,521,450
-------------
ELECTRICAL EQUIPMENT--1.9%
Sanmina Corp.+............................................ 26,000 1,561,625
SCI Systems, Inc.+........................................ 32,100 1,709,325
-------------
3,270,950
-------------
ELECTRONICS--13.6%
Altera Corp.+............................................. 5,000 511,250
American Superconductor Corp.+............................ 4,600 175,663
Analog Devices, Inc.+(1).................................. 20,700 1,590,019
Atmel Corp.+.............................................. 31,900 1,561,106
ATMI, Inc.+............................................... 9,600 369,600
Bookham Technology PLC ADR+............................... 1,900 98,800
Conexant Systems, Inc.+................................... 6,200 371,225
CTS Corp.................................................. 4,700 296,394
Flextronics International Ltd.+........................... 13,500 948,375
JNI Corp.+................................................ 9,300 371,419
KLA-Tencor Corp.+ (1)..................................... 6,500 486,687
Lam Research Corp.+....................................... 13,900 637,662
Lattice Semiconductor Corp.+.............................. 16,900 1,138,637
LSI Logic Corp.+.......................................... 7,200 450,000
LTX Corp.+................................................ 12,300 562,725
Maxim Integrated Products, Inc.+.......................... 30,800 1,996,225
Metalink Ltd.+............................................ 11,100 317,044
MKS Instruments, Inc.+.................................... 9,300 437,100
Molex, Inc., Class A...................................... 9,050 362,000
Motorola, Inc............................................. 4,702 559,832
National Semiconductor Corp.+............................. 9,300 564,975
Novellus Systems, Inc.+................................... 14,100 940,294
Nu Horizons Electronics Corp.+............................ 10,000 178,750
Pericom Semiconductor Corp.+.............................. 10,000 439,375
PMC-Sierra, Inc.+......................................... 10,700 2,053,062
QLogic Corp.+............................................. 14,900 1,494,656
SDL, Inc.+................................................ 4,800 936,000
TelCom Semiconductor, Inc.+............................... 13,900 341,419
Teleflex, Inc............................................. 9,300 321,431
TriQuint Semiconductor, Inc.+............................. 10,000 1,028,125
Varian Semiconductor Equipment Associates, Inc.+.......... 4,600 309,350
Vitesse Semiconductor Corp.+.............................. 6,200 421,988
Waters Corp.+............................................. 7,000 663,250
Xilinx, Inc.+ (1)......................................... 9,800 717,850
-------------
23,652,288
-------------
</TABLE>
41
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Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
ENERGY SERVICES--5.1%
Baker Hughes, Inc......................................... 9,300 $ 295,856
BJ Services Co.+.......................................... 24,700 1,735,175
Diamond Offshore Drilling, Inc............................ 26,300 1,060,219
Grant Prideco, Inc.+...................................... 6,200 119,350
Halliburton Co............................................ 12,300 543,506
Marine Drilling Co., Inc.+................................ 32,400 842,400
Nabors Industries, Inc.+.................................. 20,000 788,750
National-Oilwell, Inc.+................................... 20,000 478,750
Patterson Energy, Inc.+................................... 26,000 734,500
R & B Falcon Corp.+....................................... 15,000 311,250
Rowan Cos., Inc.+(1)...................................... 24,700 690,056
Transocean Sedco Forex, Inc............................... 21,600 1,015,200
Weatherford International, Inc.+.......................... 6,200 251,875
-------------
8,866,887
-------------
ENERGY SOURCES--3.2%
Apache Corp............................................... 9,300 450,469
Burlington Resources, Inc.(1)............................. 10,800 424,575
Devon Energy Corp......................................... 28,000 1,349,250
Enron Corp................................................ 9,300 648,094
Global Marine, Inc.+...................................... 51,700 1,240,800
Millipore Corp............................................ 5,900 422,956
Noble Affiliates, Inc..................................... 11,600 418,325
Ocean Energy, Inc.+....................................... 37,300 482,569
Triton Energy Ltd.+....................................... 3,500 127,531
-------------
5,564,569
-------------
FINANCIAL SERVICES--3.4%
Capital One Financial Corp................................ 8,900 389,375
E*TRADE Group, Inc.+...................................... 17,300 371,950
Federated Investors, Inc., Class B........................ 21,900 618,675
Goldman Sachs Group, Inc.................................. 9,300 867,225
Heller Financial, Inc..................................... 23,300 452,894
Lehman Brothers Holdings, Inc............................. 4,600 377,487
Merrill Lynch & Co., Inc.(1).............................. 9,300 948,019
Morgan Stanley,
Dean Witter & Co........................................ 9,300 713,775
NextCard, Inc.+........................................... 4,200 44,362
Waddell & Reed Financial,
Inc., Class A........................................... 30,150 802,744
Waddell & Reed Financial,
Inc., Class B........................................... 13,050 314,016
-------------
5,900,522
-------------
GAS & PIPELINE UTILITIES--0.7%
Avista Corp............................................... 13,900 410,919
Dynegy, Inc., Class A+.................................... 11,796 771,901
-------------
1,182,820
-------------
HEALTH SERVICES--1.8%
Allscripts, Inc.+......................................... 4,600 142,600
Gene Logic, Inc.+......................................... 7,700 206,937
Health Management Associates, Inc., Class A+.............. 54,000 $ 860,625
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
HEALTH SERVICES (CONTINUED)
Incyte Pharmacuticals, Inc.+.............................. 1,600 123,200
Lincare Holdings, Inc.+................................... 38,800 1,183,400
Medical Manager Corp.+.................................... 3,100 99,200
Wellpoint Health Networks, Inc.+.......................... 7,900 582,625
-------------
3,198,587
-------------
HOUSEHOLD PRODUCTS--1.4%
Estee Lauder Cos., Class A................................ 15,200 670,700
Warner-Lambert Co. (1).................................... 15,400 1,752,712
-------------
2,423,412
-------------
INSURANCE--0.9%
ACE Ltd................................................... 16,300 390,181
MGIC Investment Corp...................................... 8,900 425,531
Protective Life Corp. (1)................................. 11,400 271,463
Radian Group, Inc......................................... 9,400 478,812
-------------
1,565,987
-------------
INTERNET CONTENT--3.2%
ActivCard SA ADR+......................................... 2,300 59,225
CMGI, Inc.+............................................... 6,700 477,375
CNET Networks, Inc.+...................................... 2,800 96,775
CyberSource Corp.+........................................ 2,500 37,813
Exodus Communications, Inc.+.............................. 19,900 1,759,906
Foundry Networks, Inc..................................... 3,200 291,200
GoTo.com, Inc.+........................................... 1,900 64,838
HomeStore.com, Inc.+...................................... 11,900 217,175
Internet Capital Group, Inc.+............................. 2,200 93,225
Juniper Networks, Inc.+................................... 2,800 595,525
MyPoints.com, Inc.+....................................... 12,600 220,500
PSINet, Inc.+............................................. 7,200 166,950
PurchasePro.com, Inc.+.................................... 1,000 30,000
S1 Corp.+................................................. 4,300 233,544
Verio, Inc.+.............................................. 6,200 232,887
VERITAS Software Corp.+................................... 6,950 745,496
Vicinity Corp.+........................................... 100 1,188
Visual Networks, Inc.+.................................... 1,400 54,600
Yahoo!, Inc.+............................................. 1,902 247,735
-------------
5,625,957
-------------
INTERNET SOFTWARE--3.7%
BEA Systems, Inc.+........................................ 12,400 598,300
BroadVision, Inc.+........................................ 9,000 395,437
Commerce One, Inc.+....................................... 8,700 531,244
Covad Communications
Group, Inc.+............................................ 3,750 104,063
Cysive, Inc.+............................................. 7,000 381,062
Documentum, Inc.+......................................... 9,300 548,700
Entrade, Inc.+*........................................... 11,250 99,352
eSPEED, Inc.+............................................. 1,400 66,150
Inktomi Corp.+............................................ 12,000 1,847,250
</TABLE>
42
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Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
INTERNET SOFTWARE (CONTINUED)
Interliant, Inc.+......................................... 12,300 $ 255,225
Liberate Technologies, Inc.+.............................. 1,800 70,425
Macromedia, Inc.+......................................... 8,000 696,000
Phone.com, Inc.+.......................................... 400 33,600
Rhythms NetConnections, Inc.+............................. 9,200 190,325
Selectica, Inc.+.......................................... 500 19,000
USinternetworking, Inc.+.................................. 19,500 485,062
Xpedior, Inc.+............................................ 4,600 74,750
-------------
6,395,945
-------------
LEISURE & TOURISM--1.9%
Galileo International, Inc................................ 18,700 432,437
MGM Grand, Inc............................................ 18,300 539,850
Outback Steakhouse, Inc.+................................. 15,900 520,725
Premier Parks, Inc.+...................................... 39,600 853,875
Royal Caribbean Cruises Ltd............................... 10,300 214,369
Southwest Airlines Co. (1)................................ 33,200 720,025
-------------
3,281,281
-------------
MACHINERY--2.5%
Dover Corp................................................ 12,900 655,481
Grainger (W. W.), Inc.(1)................................. 12,000 520,500
Kulicke & Soffa Industries, Inc.+......................... 9,300 728,306
MSC Industrial Direct Co., Inc., Class A+................. 12,100 169,400
Smith International, Inc.+(1)............................. 29,600 2,249,600
-------------
4,323,287
-------------
MEDICAL PRODUCTS--4.8%
ABIOMED, Inc.+............................................ 4,600 170,775
Affymetrix, Inc.+......................................... 4,600 621,287
Celgene Corp.+............................................ 13,800 649,462
Cell Therapeutics, Inc.+.................................. 13,900 215,450
COR Therapeutics, Inc.+................................... 4,600 350,463
CuraGen Corp.+............................................ 13,600 362,100
Forest Laboratories, Inc.+................................ 21,400 1,798,937
Henry Schein, Inc.+....................................... 200 2,797
Human Genome Sciences, Inc.+.............................. 4,600 352,188
Invitrogen Corp.+......................................... 6,300 392,963
Maxim Pharmaceuticals, Inc.+.............................. 13,000 503,750
Mylan Laboratories, Inc................................... 18,200 516,425
PE Corp.-Celera Genomics+................................. 4,600 379,500
PE Corp.-PE Biosystems Group.............................. 13,200 792,000
QLT PhotoTherapeutics, Inc.+.............................. 3,500 194,469
Sybron International Corp.+............................... 24,200 753,225
Valentis, Inc.+........................................... 21,600 194,400
-------------
8,250,191
-------------
METALS & MINERALS--0.9%
Allegheny Technologies, Inc............................... 1,900 45,956
Lone Star Technologies, Inc.+............................. 12,300 567,338
Martin Marietta Materials, Inc............................ 6,300 333,900
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
METALS & MINERALS (CONTINUED)
Maverick Tube Corp.+...................................... 18,500 $ 527,250
-------------
1,474,444
-------------
MULTI-INDUSTRY--1.4%
Bombardie, Inc., Class B.................................. 25,300 679,951
Corning, Inc.............................................. 6,000 1,185,000
PerkinElmer, Inc.......................................... 11,000 602,250
-------------
2,467,201
-------------
RETAIL--4.2%
BJ's Wholesale Club, Inc.+................................ 15,900 563,456
Borders Group, Inc.+...................................... 11,200 177,800
Circuit City Stores, Inc.(1).............................. 21,000 1,235,062
Consolidated Stores Corp.+................................ 18,700 232,581
Costco Wholesale Corp.+................................... 3,700 200,031
CVS Corp.................................................. 11,800 513,300
eBay, Inc.+............................................... 2,800 445,725
eToys, Inc.+.............................................. 4,600 36,800
Family Dollar Stores, Inc................................. 29,800 568,063
HomeGrocer.com, Inc.+..................................... 12,600 63,000
Priceline.com, Inc.+...................................... 3,700 234,025
ShopKo Stores, Inc.+...................................... 14,900 266,338
Starbucks Corp.+.......................................... 16,700 504,914
Ticketmaster Online-CitySearch, Inc., Class B+............ 19,300 386,000
Tiffany & Co.............................................. 10,100 734,144
TJX Cos., Inc............................................. 27,700 531,494
Whole Foods Market, Inc.+................................. 13,100 557,569
-------------
7,250,302
-------------
TELECOMMUNICATIONS--5.3%
Allegiance Telecom, Inc.+................................. 2,750 194,563
Allied Riser Communications Corp.+........................ 10,000 195,000
Copper Mountain Networks, Inc.+........................... 700 58,363
E-Tek Dynamics, Inc.+..................................... 3,000 614,250
FLAG Telecom Holdings Ltd.+............................... 21,200 413,400
GT Group Telecom, Inc.+................................... 8,300 107,381
IDT Corp.+................................................ 18,700 591,387
Intermedia Communications, Inc.+.......................... 9,300 378,975
MasTec, Inc.+............................................. 8,000 691,000
McLeodUSA, Inc., Class A+................................. 52,400 1,310,000
Microcell Telecommunications, Inc.+....................... 14,000 488,250
RIT Technologies Ltd.+.................................... 13,900 135,525
Scientific-Atlanta, Inc. (1).............................. 11,000 715,687
VoiceStream Wireless Corp.+............................... 15,070 1,491,426
Western Wireless Corp., Class A+.......................... 34,600 1,719,187
WorldQuest Networks, Inc.+................................ 9,300 79,050
-------------
9,183,444
-------------
</TABLE>
43
<PAGE>
STYLE SELECT SERIES LOGO
Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
TELEPHONE--0.9%
AT&T Canada, Inc.+........................................ 7,500 $ 319,688
NEXTLINK Communications, Inc., Class A+................... 9,700 817,831
Time Warner Telecom, Inc., Class A+....................... 6,800 372,300
-------------
1,509,819
-------------
TRANSPORTATION--0.2%
C.H. Robinson Worldwide, Inc.............................. 4,200 210,000
Expeditors International of Washington, Inc............... 3,700 158,175
-------------
368,175
-------------
TOTAL INVESTMENT SECURITIES--97.0%
(cost $141,782,241)....................................... 168,161,481
-------------
SHORT-TERM SECURITIES--4.1%
Cayman Island Time Deposit with State Street Bank and
Trust Co.
4.25% due 05/01/00 $ 1,923 1,923,000
Federal Home Loan Bank Consolidated Discount Notes
5.88% due 05/01/00 1,151 1,151,000
Federal Home Loan Mortgage Discount Notes
5.88% due 05/17/00 2,000 1,994,773
Federal Home Loan Mortgage Discount Notes
5.90% due 05/16/00 2,000 1,982,300
-------------
TOTAL SHORT-TERM SECURITIES
(cost $7,051,073)......................................... 7,051,073
-------------
TOTAL INVESTMENTS--
(cost $148,833,314)....................................... 101.1% 175,212,554
Liabilities in excess of other assets....................... (1.1) (1,897,547)
------------- -------------
NET ASSETS-- 100.0% $ 173,315,007
============= =============
</TABLE>
------------------
+ Non-income producing security
* Resale restricted to qualified institutional buyers ADR ("American Depositary
Receipt")
(1) Security is traded with rights attached
See Notes to Financial Statements
44
<PAGE>
STYLE SELECT SERIES LOGO
Aggressive Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--90.8%
AEROSPACE & MILITARY TECHNOLOGY--2.5%
General Motors Corp., Class H+............................ 106,945 $ 10,300,140
HEICO Corp., Class A...................................... 42,500 595,000
-------------
10,895,140
-------------
APPAREL & TEXTILES--0.4%
Talbots, Inc.............................................. 32,900 1,663,506
-------------
BANKS--0.1%
Imperial Bancorp+......................................... 21,784 427,511
-------------
BROADCASTING & MEDIA--7.4%
Cinar Films, Inc., Class B+............................... 33,700 168,500
Comcast Corp., Class A+................................... 96,390 3,861,624
Digital Microwave Corp.+.................................. 34,400 1,270,650
EchoStar Communications Corp., Class A+................... 146,900 9,355,694
Entercom Communications Corp.+............................ 10,500 446,250
Hispanic Broadcasting Corp.+.............................. 12,013 1,214,064
i3 Mobile, Inc.+.......................................... 41,300 774,375
InfoSpace, Inc............................................ 24,000 1,723,500
Insight Communications, Inc., Class A+.................... 52,700 1,073,763
Netro Corp.+.............................................. 23,600 1,017,750
Pegasus Communications Corp.,Class A+..................... 16,200 1,767,825
Proxim, Inc.+............................................. 10,000 769,375
RF Micro Devices, Inc.+................................... 15,500 1,612,969
Spanish Broadcasting
Systems Inc.,Class A+................................... 48,400 904,475
Time Warner, Inc.......................................... 61,420 5,523,961
TMP Worldwide, Inc.+...................................... 19,400 1,268,275
-------------
32,753,050
-------------
BUSINESS SERVICES--3.1%
Aeroflex, Inc.+........................................... 30,300 1,128,675
DeVry, Inc.+.............................................. 54,000 1,285,875
Forrester Research, Inc.+................................. 36,200 1,640,313
ITT Educational Services, Inc.+........................... 66,400 1,186,900
Mobile Mini, Inc.+........................................ 35,000 730,625
On Assignment, Inc.+...................................... 72,400 2,271,550
Paychex, Inc.............................................. 35,500 1,868,187
QRS Corp.+................................................ 23,300 768,900
Vishay Intertechnology, Inc.+............................. 33,625 2,820,297
-------------
13,701,322
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMUNICATION EQUIPMENT--5.0%
3Com Corp.(1)............................................. 38,710 $ 1,526,626
Andrew Corp.+............................................. 60,000 1,766,250
ANTEC Corp.+.............................................. 34,900 1,875,875
Broadcom Corp., Class A+.................................. 17,300 2,982,087
Finisar Corp.+............................................ 49,900 1,861,894
Harris Corp............................................... 47,500 1,534,844
JDS Uniphase Corp.+....................................... 17,600 1,824,900
Natural Microsystems Corp.+............................... 24,700 1,608,587
Performance Technologies, Inc.+........................... 21,500 751,156
Powerwave Technologies, Inc.+............................. 14,300 2,975,294
Research In Motion Ltd.+.................................. 53,075 2,255,687
Spectrasite Holdings, Inc.+............................... 57,800 1,213,800
-------------
22,177,000
-------------
COMPUTERS & BUSINESS EQUIPMENT--2.6%
Apple Computer, Inc.+..................................... 71,325 8,848,758
Network Appliance, Inc.+.................................. 34,700 2,565,631
-------------
11,414,389
-------------
COMPUTER SOFTWARE--10.4%
CheckFree Holdings Corp.+................................. 7,600 386,175
Cisco Systems, Inc.+...................................... 177,240 12,287,717
Citrix Systems, Inc.+..................................... 40,200 2,454,712
E.piphany, Inc.+.......................................... 2,300 151,944
EMC Corp.+................................................ 39,135 5,437,319
i2 Technologies, Inc.+.................................... 12,100 1,563,925
Informix Corp.+........................................... 84,000 924,000
Mercator Software, Inc.+.................................. 30,000 1,104,375
Mercury Interactive Corp.+................................ 23,000 2,070,000
Micromuse, Inc.+.......................................... 16,100 1,579,813
National Instruments Corp.+............................... 29,875 1,456,406
Nvidia Corp.+............................................. 14,600 1,301,225
Oracle Corp.+............................................. 28,200 2,254,237
Peregrine Systems, Inc.+.................................. 43,200 1,039,500
Pinnacle Systems, Inc.+................................... 40,000 960,000
Saga Systems, Inc.+....................................... 47,400 882,825
SeaChange International, Inc.+............................ 35,000 1,050,000
Siebel Systems, Inc.+..................................... 24,500 3,010,437
Sun Microsystems, Inc.+................................... 10,700 983,731
SunGard Data Systems, Inc.+............................... 25,000 864,063
Tibco Software, Inc.+..................................... 18,300 1,629,844
VERITAS Software Corp.+................................... 9,900 1,061,930
Wind River Systems, Inc.+................................. 28,000 1,195,250
-------------
45,649,428
-------------
DRUGS--5.4%
Abgenix, Inc.+............................................ 17,800 1,594,212
Allergan, Inc............................................. 39,760 2,340,870
</TABLE>
45
<PAGE>
STYLE SELECT SERIES LOGO
Aggressive Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
DRUGS (CONTINUED)
Biovail Corp.+............................................ 28,900 $ 1,378,169
Caremark Rx, Inc.+........................................ 234,300 1,493,663
Cephalon, Inc.+........................................... 34,400 1,935,000
Express Scripts, Inc., Class A+........................... 30,700 1,097,525
Genzyme Corp.+............................................ 19,600 956,725
IVAX Corp.+............................................... 67,100 1,836,862
Jones Pharma, Inc......................................... 21,100 607,944
MedImmune, Inc.+.......................................... 42,850 6,853,322
Millenium Pharmaceuticals, Inc.+.......................... 20,000 1,587,500
Pfizer, Inc.(1)........................................... 54,435 2,293,074
-------------
23,974,866
-------------
ELECTRONICS--8.3%
Altera Corp.+............................................. 8,300 848,675
Burr-Brown Corp.(1)+...................................... 50,800 3,460,750
Coherent, Inc.+........................................... 25,000 1,445,313
DSP Group, Inc.+.......................................... 29,500 2,098,187
GlobeSpan, Inc.+.......................................... 17,000 1,615,000
Lattice Semiconductor Corp.+.............................. 28,400 1,913,450
Linear Technology Corp.................................... 26,000 1,485,250
Maxim Integrated Products, Inc.+.......................... 57,400 3,720,237
Metalink Ltd.+............................................ 44,000 1,256,750
Metromedia Fiber Network, Inc., Class A+.................. 59,220 1,828,418
Novellus Systems, Inc.+................................... 29,100 1,940,606
PMC-Sierra, Inc.+......................................... 11,200 2,149,000
Power-One, Inc.+.......................................... 23,900 1,631,175
Sawtek, Inc.+............................................. 31,900 1,525,219
Semtech Corp.+............................................ 23,000 1,568,313
Symbol Technologies, Inc.................................. 26,250 1,463,438
Texas Instruments, Inc.................................... 29,885 4,867,519
Varian Semiconductor
Equipment Associates, Inc.+............................. 25,000 1,681,250
-------------
36,498,550
-------------
ENERGY SERVICES--6.0%
BJ Services Co.+.......................................... 86,000 6,041,500
Cooper Cameron Corp.+..................................... 40,400 3,030,000
Diamond Offshore Drilling, Inc............................ 27,900 1,124,719
Grant Prideco, Inc.+...................................... 65,200 1,255,100
Nabors Industries, Inc.+.................................. 101,100 3,987,131
National-Oilwell, Inc.+................................... 48,000 1,149,000
Precision Drilling Corp.+................................. 68,400 2,188,800
Pride International, Inc.+................................ 40,000 905,000
R & B Falcon Corp.+....................................... 39,000 809,250
Santa Fe International Corp............................... 38,000 1,306,250
Transocean Sedco Forex, Inc. 43,300 2,035,100
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
ENERGY SERVICES (CONTINUED)
Weatherford International, Inc.+.......................... 65,200 $ 2,648,750
-------------
26,480,600
-------------
ENERGY SOURCES--0.6%
Global Industries Ltd.+................................... 6,500 92,625
Global Marine, Inc.+...................................... 46,900 1,125,600
Pogo Producing Co......................................... 59,000 1,511,875
-------------
2,730,100
-------------
FINANCIAL SERVICES--3.7%
Citigroup, Inc............................................ 98,060 5,828,441
Investment Technology Group............................... 43,000 1,612,500
Merrill Lynch & Co., Inc.(1).............................. 27,895 2,843,547
Morgan Stanley, Dean
Witter & Co............................................. 73,750 5,660,312
Raymond James Financial, Inc.............................. 10,000 201,250
-------------
16,146,050
-------------
HEALTH SERVICES--0.4%
Bally Total Fitness
Holding Corp.+.......................................... 31,400 702,575
Foundation Health Systems, Inc.+.......................... 17,200 173,075
Gene Logic, Inc.+......................................... 34,400 924,500
LifePoint Hospitals, Inc.+................................ 10,000 171,250
-------------
1,971,400
-------------
HOUSING--1.9%
Home Depot, Inc........................................... 137,045 7,683,085
Yankee Candle Co.+........................................ 45,700 822,600
-------------
8,505,685
-------------
INSURANCE--0.4%
Enhance Financial Services Group, Inc..................... 51,300 519,413
Reinsurance Group of
America, Inc............................................ 51,551 1,282,331
-------------
1,801,744
-------------
INTERNET CONTENT--4.7%
BackWeb Technologies Ltd.+................................ 44,300 1,038,281
Clarent Corp.+............................................ 19,200 1,305,600
Critical Path, Inc.+...................................... 13,400 778,875
DoubleClick, Inc.+........................................ 3,400 257,975
Engage Technologies, Inc.+................................ 19,500 487,500
ibasis, Inc.+............................................. 23,000 520,375
Internet Capital Group, Inc.+............................. 3,000 127,125
Netopia, Inc.+............................................ 23,200 968,600
VeriSign, Inc.+........................................... 89,780 12,513,087
</TABLE>
46
<PAGE>
STYLE SELECT SERIES LOGO
Aggressive Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
INTERNET CONTENT (CONTINUED)
WatchGuard Technologies, Inc.+............................ 22,000 $ 1,060,125
Yahoo!, Inc.+............................................. 14,600 1,901,650
-------------
20,959,193
-------------
INTERNET SOFTWARE--5.4%
Agile Software Corp.+..................................... 9,700 359,506
America Online, Inc.+..................................... 22,400 1,339,800
Ariba, Inc.+.............................................. 11,900 882,831
Art Technology Group, Inc.+............................... 19,700 1,196,775
BroadVision, Inc.+........................................ 39,600 1,739,925
Commerce One, Inc.+....................................... 24,440 1,492,367
Covad Communications
Group, Inc.+............................................ 28,750 797,812
Documentum, Inc.+......................................... 15,900 938,100
Entrade, Inc.+#........................................... 14,000 123,638
Inktomi Corp.+............................................ 46,120 7,099,597
ITXC Corp.+............................................... 28,000 750,750
Kana Communications, Inc.+................................ 7,600 323,475
Macromedia, Inc.+......................................... 11,500 1,000,500
Phone.com, Inc.+.......................................... 19,950 1,675,800
Portal Software, Inc.+.................................... 14,700 674,363
Primus Knowledge
Solutions, Inc.+........................................ 12,200 453,688
RealNetworks, Inc.+....................................... 6,500 309,563
Vignette Corp.+........................................... 55,200 2,659,950
Websense, Inc.+........................................... 500 16,250
-------------
23,834,690
-------------
LEISURE & TOURISM--0.6%
Extended Stay America, Inc.+.............................. 198,900 1,777,669
Outback Steakhouse, Inc.+................................. 30,900 1,011,975
-------------
2,789,644
-------------
MACHINERY--2.4%
Cognex Corp.+............................................. 31,800 1,808,625
Kulicke & Soffa
Industries, Inc.+....................................... 25,600 2,004,800
Orbotech Ltd.+............................................ 18,750 1,598,438
Oshkosh Truck Corp., Class B.............................. 24,600 774,900
Smith International, Inc.(1)+............................. 59,000 4,484,000
-------------
10,670,763
-------------
MEDICAL PRODUCTS--3.2%
Aclara Biosciences, Inc.+................................. 34,200 1,303,875
Affymetrix, Inc.+......................................... 11,600 1,566,725
Alkermes, Inc.+........................................... 46,100 2,454,825
Invitrogen Corp.+......................................... 30,900 1,927,387
Myriad Genetics, Inc.+.................................... 26,800 1,725,250
Pharmacopeia, Inc.+....................................... 28,700 1,180,288
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
MEDICAL PRODUCTS (CONTINUED)
QLT PhotoTherapeutics, Inc.+.............................. 46,700 $ 2,594,769
Visible Genetics, Inc.+................................... 34,200 1,254,712
-------------
14,007,831
-------------
METALS & MINERALS--0.2%
Maverick Tube Corp.+...................................... 23,200 661,200
-------------
MULTI-INDUSTRY--1.0%
General Electric Co....................................... 26,615 4,185,209
-------------
REAL ESTATE INVESTMENT TRUSTS--0.3%
IndyMac Mortgage Holdings, Inc.+.......................... 100,100 1,307,556
-------------
RETAIL--3.1%
Best Buy Co., Inc.+....................................... 17,000 1,372,750
BJ's Wholesale Club, Inc.+................................ 31,800 1,126,913
Costco Wholesale Corp.+................................... 22,140 1,196,944
eBay, Inc.+............................................... 9,890 1,574,364
Gap, Inc.................................................. 20,925 768,994
Linens 'N Things, Inc.+................................... 41,100 1,268,963
Lowe's Cos., Inc.......................................... 19,400 960,300
Polycom, Inc.+............................................ 29,100 2,302,537
Skymall, Inc.+............................................ 100,000 350,000
Stamps.com, Inc.+......................................... 43,900 702,400
Sunglass Hut
International, Inc.+.................................... 77,000 577,500
The Kroll O'Gara Co.+..................................... 27,300 209,869
Wal-Mart Stores, Inc...................................... 25,900 1,434,212
-------------
13,845,746
-------------
TELECOMMUNICATIONS--10.4%
Amdocs Ltd.+.............................................. 66,400 4,494,450
AudioCodes Ltd.+.......................................... 31,000 2,325,000
Copper Mountain Networks, Inc.+........................... 13,600 1,133,900
CoreComm Ltd.+............................................ 28,875 902,344
Inet Technologies, Inc.+.................................. 4,900 211,313
Intermedia Communications, Inc.+.......................... 35,800 1,458,850
ITC DeltaCom, Inc.+....................................... 43,613 1,433,777
Level 3 Communications, Inc.+............................. 50,990 4,538,110
McLeodUSA, Inc., Class A+................................. 78,600 1,965,000
Net2Phone, Inc.+.......................................... 24,500 1,081,062
Nokia Corp., Class A ADR.................................. 237,800 13,524,875
Scientific-Atlanta, Inc.(1)............................... 36,300 2,361,769
Sprint Corp. (PCS Group)+................................. 79,330 4,363,150
TTI Team Telecom International Ltd.+...................... 40,000 1,075,000
VoiceStream Wireless Corp.+............................... 10,700 1,059,300
West TeleServices Corp.+.................................. 23,200 490,100
</TABLE>
47
<PAGE>
STYLE SELECT SERIES LOGO
Aggressive Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
SHARES/
CONTRACTS/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
WinStar Communications, Inc.+............................. 82,770 $ 3,300,454
-------------
45,718,454
-------------
TELEPHONE--0.9%
Telefonos de Mexico SA ADR................................ 65,775 3,868,392
-------------
TRANSPORTATION--0.4%
Offshore Logistics, Inc.+................................. 47,300 573,513
Railworks Corp.+.......................................... 100,900 958,550
-------------
1,532,063
-------------
TOTAL COMMON STOCK
(cost $277,726,506)....................................... 400,171,082
-------------
PUT OPTIONS--0.0%+(2)
BJ Services Co.
exp 5/00 @ $6........................................... 94 12,925
Broadvision, Inc.
exp. 5/00 @ $35......................................... 188 28,200
Oil Services Index
exp 5/00 @ $105......................................... 326 75,387
Smith International, Inc.
exp 5/00 @ $75.......................................... 94 38,775
Weatherford International, Inc. exp 5/00 @ $55............ 108 18,225
-------------
TOTAL PUT OPTIONS
(cost $557,629)........................................... 173,512
-------------
TOTAL INVESTMENT SECURITIES--90.8%
(cost $278,284,135)....................................... 400,344,594
-------------
SHORT-TERM SECURITIES--5.5%
Federal Home Loan Bank Discount Notes
5.77% due 5/26/00....................................... $ 5,000 4,979,966
Federal Home Loan Bank Discount Notes
5.88% due 5/01/00....................................... 7,400 7,400,000
Federal National Mortgage Association Discount Notes
5.99% due 7/18/00....................................... 5,000 4,933,250
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM SECURITIES (CONTINUED)
Household Finance Corp. 6.00% due 7/18/00................. $ 7,000 $ 7,000,000
-------------
TOTAL SHORT-TERM SECURITIES
(cost $24,315,074)........................................ 24,313,216
-------------
REPURCHASE AGREEMENTS--6.8%
Joint Repurchase Agreement (Note 2)
(cost $23,000,000)...................................... 23,000 23,000,000
Joint Repurchase Agreement (Note 2)
(cost $56,000).......................................... 56 56,000
Agreement with State Street Bank and Trust Co., bearing
5.00%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $6,774,822 collateralized by $6,165,000 U.S.
Treasury Bond 9.13%, due 05/15/09 approximate aggregate
value $6,911,279
(cost $6,772,000)....................................... 6,772 6,772,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $29,828,000)........................................ 29,828,000
-------------
TOTAL INVESTMENTS--
(cost $332,213,079)....................................... 103.1% 454,485,810
Liabilities in excess of other assets....................... (3.1) (13,784,189)
------------- -------------
NET ASSETS-- 100.0% $ 440,701,621
============= =============
</TABLE>
------------------
+ Non-income producing security
* The security or a portion thereof has been segregated as collateral for the
written option contracts.
# Resale restricted to qualified institutional buyers
ADR ("American Depositary Receipt")
(1) Security is traded with rights attached
(2) 1 option contract equals 100 shares
See Notes to Financial Statements
OPEN COVERED WRITTEN CALL OPTIONS+
<TABLE>
<CAPTION>
STRIKE
CALL OPTIONS CONTRACTS(2) EXPIRATION DATE PRICE VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
Powerwave Technologies Inc.
(proceeds $214,130) 66 August 2000 $140.00 $(574,200)
=========
</TABLE>
48
<PAGE>
STYLE SELECT SERIES LOGO
Focused Growth and Income Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--91.1%
AEROSPACE & MILITARY TECHNOLOGY--3.5%
General Dynamics Corp..................................... 24,798 $ 1,450,683
General Motors Corp., Class H+............................ 50,000 4,815,625
-------------
6,266,308
-------------
AUTOMOTIVE--0.4%
Ford Motor Co............................................. 14,486 792,203
-------------
BANKS--1.2%
Chase Manhattan Corp...................................... 30,000 2,161,875
-------------
BROADCASTING & MEDIA--5.7%
AT&T Corp.-Liberty Media Group, Inc., Class A+............ 45,000 2,247,187
Clear Channel Communications, Inc.+....................... 13,308 958,176
Comcast Corp., Class A+................................... 38,550 1,544,409
Time Warner, Inc.......................................... 50,704 4,560,191
TV Guide, Inc., Class A+.................................. 35,000 1,043,438
-------------
10,353,401
-------------
COMMUNICATION EQUIPMENT--5.9%
JDS Uniphase Corp.+....................................... 43,996 4,561,835
Nortel Networks Corp...................................... 25,000 2,831,250
QUALCOMM, Inc.+........................................... 31,133 3,375,985
-------------
10,769,070
-------------
COMPUTERS & BUSINESS EQUIPMENT--3.1%
Dell Computer Corp.+...................................... 40,000 2,005,000
International Business Machines Corp...................... 25,000 2,790,625
Lexmark International Group, Inc., Class A+............... 7,294 860,692
-------------
5,656,317
-------------
COMPUTER SOFTWARE--19.6%
Adobe Systems, Inc........................................ 21,594 2,611,524
Cisco Systems, Inc.+...................................... 128,544 8,911,715
Electronic Data Systems Corp.............................. 30,000 2,062,500
EMC Corp.+................................................ 65,118 9,047,332
Microsoft Corp.+.......................................... 40,000 2,790,000
Oracle Corp.+............................................. 63,570 5,081,627
Sun Microsystems, Inc.+................................... 28,637 2,632,814
Sycamore Networks, Inc.+.................................. 30,000 2,355,000
-------------
35,492,512
-------------
ELECTRONICS--13.0%
Applied Materials, Inc.+.................................. 27,936 2,844,234
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
ELECTRONICS (CONTINUED)
Intel Corp................................................ 42,400 $ 5,376,850
Motorola, Inc............................................. 41,840 4,981,575
PMC-Sierra, Inc.+......................................... 25,000 4,796,875
Sony Corp. ADR............................................ 15,645 3,529,903
Texas Instruments, Inc.................................... 12,447 2,027,305
-------------
23,556,742
-------------
ENERGY SERVICES--1.7%
Schlumberger Ltd.......................................... 40,000 3,062,500
-------------
FINANCIAL SERVICES--9.2%
American Express Co....................................... 15,000 2,250,937
Citigroup, Inc............................................ 77,323 4,595,886
Federal National Mortgage Association..................... 74,671 4,503,595
Morgan Stanley, Dean Witter & Co.......................... 68,428 5,251,849
-------------
16,602,267
-------------
FOOD, BEVERAGE & TOBACCO--0.4%
Coca-Cola Co.............................................. 16,343 769,142
-------------
HOUSEHOLD PRODUCTS--0.4%
Kimberly-Clark Corp....................................... 13,104 760,851
-------------
HOUSING--2.8%
Home Depot, Inc........................................... 89,247 5,003,410
-------------
INTERNET CONTENT--3.4%
Juniper Networks, Inc.+................................... 20,252 4,307,347
Yahoo!, Inc.+............................................. 14,000 1,823,500
-------------
6,130,847
-------------
INTERNET SOFTWARE--3.0%
America Online, Inc.+..................................... 40,242 2,406,975
Inktomi Corp.+............................................ 20,000 3,078,750
-------------
5,485,725
-------------
LEISURE & TOURISM--0.8%
Four Seasons Hotels, Inc.................................. 26,534 1,485,904
-------------
MEDICAL PRODUCTS--4.3%
Genentech, Inc.+.......................................... 65,792 7,697,664
-------------
MULTI-INDUSTRY--5.4%
Corning, Inc.............................................. 23,143 4,570,743
General Electric Co....................................... 32,749 5,149,780
-------------
9,720,523
-------------
RETAIL--3.6%
Gap, Inc.................................................. 45,000 1,653,750
Tiffany & Co.............................................. 29,093 2,114,698
</TABLE>
49
<PAGE>
STYLE SELECT SERIES LOGO
Focused Growth and Income Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
RETAIL (CONTINUED)
Wal-Mart Stores, Inc...................................... 49,576 $ 2,745,271
-------------
6,513,719
-------------
TELECOMMUNICATIONS--2.7%
Sprint Corp. (PCS Group)+................................. 47,077 2,589,235
Vodafone AirTouch PLC ADR................................. 48,211 2,265,917
-------------
4,855,152
-------------
TELEPHONE--1.0%
AT&T Corp................................................. 40,000 1,867,500
-------------
TOTAL COMMON STOCK
(cost $146,943,067)....................................... 165,003,632
-------------
BONDS & NOTES--2.6%
INTERNET CONTENT--2.3%
Juniper Networks, Inc.
convertible
4.75% due 03/15/07...................................... $ 4,481 4,105,716
-------------
MEDICAL PRODUCTS--0.3%
Alexion Pharmaceuticals, Inc.
convertible
5.75% due 03/15/07*..................................... 946 551,045
-------------
TOTAL BONDS & NOTES
(cost $5,427,000)......................................... 4,656,761
-------------
TOTAL INVESTMENT SECURITIES--93.7%
(cost $152,370,067)....................................... 169,660,393
-------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM SECURITIES--4.8%
Federal Home Loan Bank Discount Notes
5.88% due 05/01/00
(cost $8,700,000)....................................... $ 8,700 $ 8,700,000
-------------
REPURCHASE AGREEMENTS--4.6%
Joint Repurchase Agreement (Note 2)
(cost $8,000,000)....................................... 8,000 8,000,000
Joint Repurchase Agreement (Note 2)
(cost $368,000)......................................... 368 368,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $8,368,000)......................................... 8,368,000
-------------
TOTAL INVESTMENTS--
(cost $169,438,067)....................................... 103.1% 186,728,393
Liabilities in excess of other assets....................... (3.1) (5,697,622)
------------- -------------
NET ASSETS-- 100.0% $ 181,030,771
============= =============
</TABLE>
------------------
+ Non-income producing security
* Resale restricted to qualified institutional buyers
ADR ("American Depositary Receipt")
See Notes to Financial Statements
50
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--93.5%
AEROSPACE & MILITARY TECHNOLOGY--1.7%
Boeing Co................................................. 21,400 $ 849,313
Precision Castparts Corp.(1).............................. 5,000 208,750
-------------
1,058,063
-------------
AUTOMOTIVE--1.7%
Ford Motor Co............................................. 19,810 1,083,359
-------------
BANKS--4.5%
Bank of America Corp...................................... 502 24,598
Bank of New York Co., Inc................................. 28,470 1,169,049
Chase Manhattan Corp...................................... 2,800 201,775
Golden West Financial Corp................................ 12,600 429,975
National City Corp........................................ 22,300 379,100
State Street Corp......................................... 1,200 116,250
U.S. Bancorp.............................................. 26,700 542,344
-------------
2,863,091
-------------
BROADCASTING & MEDIA--3.0%
AT&T Wireless Group+...................................... 2,700 85,894
Dow Jones & Co., Inc...................................... 900 58,388
Gannett Co., Inc.......................................... 5,800 370,475
MediaOne Group, Inc.+..................................... 9,200 695,750
NTT Corp. ADR............................................. 8,600 547,712
Tribune Co.(1)............................................ 2,400 93,300
WPP Group PLC ADR......................................... 200 15,475
-------------
1,866,994
-------------
BUSINESS SERVICES--0.7%
Ceridian Corp.+........................................... 18,400 399,050
Waste Management, Inc..................................... 400 6,350
-------------
405,400
-------------
CHEMICALS--2.0%
Air Products & Chemicals, Inc............................. 7,000 217,438
Dow Chemical Co........................................... 7,600 858,800
Engelhard Corp............................................ 11,200 196,700
-------------
1,272,938
-------------
COMMUNICATION EQUIPMENT--2.2%
3Com Corp.(1)............................................. 3,900 153,806
Loral Space & Communications Ltd.+........................ 6,900 67,706
Lucent Technologies, Inc.................................. 8,300 516,157
Newbridge Networks Corp.+................................. 6,000 214,875
Tellabs, Inc.+............................................ 8,000 438,500
-------------
1,391,044
-------------
COMPUTERS & BUSINESS EQUIPMENT--4.6%
Hewlett-Packard Co........................................ 11,700 1,579,500
International Business Machines Corp...................... 7,100 792,537
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMPUTERS & BUSINESS EQUIPMENT (CONTINUED)
Lexmark International Group, Inc., Class A+............... 4,500 $ 531,000
-------------
2,903,037
-------------
COMPUTER SOFTWARE--3.8%
Adobe Systems, Inc........................................ 7,410 896,147
BMC Software, Inc.+....................................... 15,300 716,231
Electronic Data Systems Corp.............................. 2,200 151,250
First Data Corp........................................... 3,200 155,800
Novell, Inc.+............................................. 6,900 135,413
SAP AG ADR................................................ 3,400 167,025
Unisys Corp.+............................................. 8,000 185,500
-------------
2,407,366
-------------
DRUGS--5.2%
American Home Products Corp............................... 16,000 899,000
Bristol-Myers Squibb Co.(1)............................... 9,000 471,937
Eli Lilly & Co.(1)........................................ 1,900 146,894
Merck & Co., Inc.......................................... 15,685 1,090,107
Pfizer, Inc.(1)........................................... 300 12,638
Pharmacia Corp............................................ 7,730 386,017
SmithKline Beecham PLC ADR................................ 4,100 281,875
-------------
3,288,468
-------------
ELECTRIC UTILITIES--0.9%
PECO Energy Co............................................ 3,600 150,075
Pinnacle West Capital Corp................................ 7,300 256,412
Southern Co............................................... 6,500 162,094
-------------
568,581
-------------
ELECTRONICS--6.0%
Advanced Micro Devices, Inc.+............................. 8,400 737,100
Agilent Technologies, Inc.+............................... 400 35,450
Applied Materials, Inc.+.................................. 1,500 152,719
Emerson Electric Co.(1)................................... 5,400 296,325
Intel Corp................................................ 5,900 748,194
Koninklijke (Royal) Philips Electronics NV ADR............ 2,640 117,810
Molex, Inc................................................ 4,156 228,320
Motorola, Inc............................................. 4,300 511,969
Texas Instruments, Inc.................................... 5,700 928,387
-------------
3,756,274
-------------
ENERGY SERVICES--0.7%
Ashland, Inc.............................................. 8,300 283,237
Schlumberger Ltd.......................................... 1,900 145,469
-------------
428,706
-------------
ENERGY SOURCES--7.8%
Anadarko Petroleum Corp................................... 7,400 321,438
Arch Coal, Inc............................................ 1,969 10,582
BP Amoco PLC ADR.......................................... 24,108 1,229,508
Burlington Resources, Inc.(1)............................. 13,500 530,719
</TABLE>
51
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
ENERGY SOURCES (CONTINUED)
Devon Energy Corp......................................... 3,127 $ 150,682
Exxon Mobil Corp.......................................... 5,700 442,819
Shell Transport & Trading Co. PLC NY Shares ADR........... 8,500 410,125
Texaco, Inc.(1)........................................... 3,400 168,300
Union Pacific Resources Group, Inc........................ 37,500 719,531
Unocal Corp............................................... 16,800 542,850
USX-Marathon Group........................................ 18,100 421,956
-------------
4,948,510
-------------
FINANCIAL SERVICES--14.9%
American Express Co....................................... 8,500 1,275,531
Associates First Capital Corp., Class A................... 21,100 468,156
Charles Schwab Corp....................................... 18,200 809,900
Citigroup, Inc............................................ 29,012 1,724,401
Donaldson, Lufkin & Jenrette, Inc......................... 4,400 183,425
Federal Home Loan Mortgage Corp........................... 3,700 169,969
Heller Financial, Inc..................................... 4,200 81,638
Household International, Inc.............................. 21,600 901,800
ING Groep NV ADR.......................................... 12,800 703,200
MBIA, Inc.(1)............................................. 5,700 281,794
Merrill Lynch & Co., Inc.(1).............................. 9,260 943,941
Morgan Stanley, Dean Witter & Co.......................... 8,400 644,700
Providian Financial Corp.................................. 4,200 369,862
Wells Fargo Co............................................ 20,500 841,781
-------------
9,400,098
-------------
FOOD, BEVERAGE & TOBACCO--2.4%
Coca-Cola Co.............................................. 100 4,706
Corn Products International, Inc.+........................ 4,800 115,200
Flowers Industries, Inc.(1)............................... 4,500 68,625
PepsiCo, Inc.............................................. 19,200 704,400
Philip Morris Cos., Inc................................... 16,600 363,125
Sara Lee Corp.(1)......................................... 10,900 163,500
Universal Corp............................................ 6,300 118,913
-------------
1,538,469
-------------
FOREST PRODUCTS--1.5%
Champion International Corp............................... 1,500 98,625
Georgia-Pacific Corp.
(Timber Group).......................................... 6,200 143,763
Georgia-Pacific Group..................................... 7,200 264,600
Sealed Air Corp.+......................................... 6,500 361,562
Weyerhaeuser Co........................................... 1,300 69,469
-------------
938,019
-------------
GAS & PIPELINE UTILITIES--2.2%
El Paso Energy Corp....................................... 20,300 862,750
Equitable Resources, Inc.................................. 8,800 408,100
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
GAS & PIPELINE UTILITIES (CONTINUED)
National Fuel Gas Co...................................... 2,600 $ 123,337
-------------
1,394,187
-------------
HEALTH SERVICES--3.8%
Columbia/HCA Healthcare Corp.............................. 16,400 466,375
Tenet Healthcare Corp.+................................... 8,700 221,850
Wellpoint Health Networks, Inc.+.......................... 23,500 1,733,125
-------------
2,421,350
-------------
HOUSEHOLD PRODUCTS--2.2%
Gillette Co.(1)........................................... 2,300 85,100
Kimberly-Clark Corp....................................... 22,600 1,312,212
-------------
1,397,312
-------------
HOUSING--0.8%
Masco Corp................................................ 21,800 489,138
-------------
INSURANCE--4.1%
ACE Ltd................................................... 12,000 287,250
American General Corp..................................... 5,100 285,600
American International Group, Inc.*....................... 937 102,777
Chubb Corp................................................ 3,000 190,875
CIGNA Corp.(1)............................................ 4,200 334,950
Marsh & McLennan Cos., Inc.(1)............................ 3,900 384,394
Progressive Corp.......................................... 4,100 268,294
StanCorp Financial Group, Inc............................. 6,200 180,575
Sun Life Financial Services of Canada+.................... 1,900 22,919
Transatlantic Holdings, Inc............................... 5,400 447,862
UnumProvident Corp........................................ 5,546 94,282
-------------
2,599,778
-------------
LEISURE & TOURISM--1.6%
Brunswick Corp.(1)........................................ 6,700 128,556
Marriott International, Inc., Class A..................... 5,300 169,600
McDonald's Corp.(1)....................................... 19,300 735,813
-------------
1,033,969
-------------
MACHINERY--0.4%
Dover Corp................................................ 5,300 269,306
-------------
MEDICAL PRODUCTS--1.0%
Baxter International, Inc................................. 8,900 579,613
Edwards Lifesciences Corp.+............................... 1,820 27,300
Johnson & Johnson Co...................................... 300 24,750
-------------
631,663
-------------
METALS & MINERALS--2.0%
Alcoa, Inc................................................ 11,200 726,600
Martin Marietta Materials, Inc............................ 5,100 270,300
Vulcan Materials Co....................................... 6,100 267,256
-------------
1,264,156
-------------
</TABLE>
52
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
MULTI-INDUSTRY--3.0%
Berkshire Hathaway, Inc., Class A+........................ 14 $ 830,200
Cooper Industries, Inc.................................... 3,000 102,937
General Electric Co....................................... 100 15,725
SCANA Corp................................................ 6,000 155,250
Tyco International Ltd.................................... 16,500 757,969
-------------
1,862,081
-------------
REAL ESTATE COMPANIES--0.0%
Boardwalk Equities, Inc.+................................. 100 790
-------------
REAL ESTATE INVESTMENT TRUSTS--0.4%
CenterPoint Properties Corp............................... 100 3,588
Crescent Real Estate Equities Co.......................... 3,200 54,800
Equity Residential Properties Trust....................... 800 36,400
General Growth Properties, Inc............................ 3,300 108,487
Mack-Cali Realty Corp..................................... 800 20,600
Vornado Realty Trust...................................... 500 17,250
-------------
241,125
-------------
RETAIL--0.5%
May Department Stores Co.................................. 10,950 301,125
-------------
TELECOMMUNICATIONS--1.2%
BCE, Inc.................................................. 6,400 734,400
Globalstar Telecommunications Ltd.+....................... 3,500 41,125
-------------
775,525
-------------
TELEPHONE--5.0%
AT&T Corp................................................. 19,600 915,075
Bell Atlantic Corp.(1).................................... 15,500 918,375
MCI WorldCom, Inc.+....................................... 12,600 572,512
Sprint Corp............................................... 12,500 768,750
-------------
3,174,712
-------------
TRANSPORTATION--1.7%
Canadian National Railway Co.............................. 5,400 151,538
Norfolk Southern Corp..................................... 14,600 257,325
Union Pacific Corp........................................ 16,300 686,637
-------------
1,095,500
-------------
TOTAL COMMON STOCK
(cost $53,621,648)........................................ 59,070,134
-------------
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK--0.1%
REAL ESTATE INVESTMENT TRUSTS--0.1%
General Growth Properties, Inc., convertible 7.25%
(cost $62,760).......................................... 2,500 $ 55,313
-------------
TOTAL INVESTMENT SECURITIES--93.6%
(cost $53,684,408)........................................ 59,125,447
-------------
SHORT-TERM SECURITIES--1.3%
Cayman Island Time Deposit with State Street Bank and
Trust Co. 3.00% due 05/01/00
(cost $828,000)......................................... $ 828 828,000
-------------
REPURCHASE AGREEMENTS--3.8%
Joint Repurchase Agreement (Note 2)
(cost $600,000)......................................... 600 600,000
Agreement with State Street Bank & Trust Co., bearing
5.80%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $1,824,882, collateralized by $1,865,000
Federal National Mortgage Association 5.60% due 03/01/04
approximate aggregate value $1,883,650
(cost $1,824,000)....................................... 1,824 1,824,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $2,424,000)......................................... 2,424,000
-------------
TOTAL INVESTMENTS--
(cost $56,936,408)........................................ 98.7% 62,377,447
Other assets less liabilities............................... 1.3 795,042
------------- -------------
NET ASSETS-- 100.0% $ 63,172,489
============= =============
</TABLE>
------------------
+ Non-income producing security
* Security represents an investment in an affiliated company
ADR ("American Depositary Receipt")
(1) Security is traded with rights attached
See Notes to Financial Statements
53
<PAGE>
STYLE SELECT SERIES LOGO
Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--91.8%
AEROSPACE & MILITARY TECHNOLOGY--1.4%
General Dynamics Corp..................................... 24,000 $ 1,404,000
General Motors Corp., Class H+............................ 6,200 597,138
-------------
2,001,138
-------------
AUTOMOTIVE--0.8%
General Motors Corp....................................... 6,400 599,200
Lear Corp.+............................................... 18,700 559,831
-------------
1,159,031
-------------
BANKS--5.4%
Bank of America Corp...................................... 181 8,869
Bank of New York Co., Inc................................. 30,000 1,231,875
Century Bancorp, Inc., Class A............................ 3,700 48,100
Chase Manhattan Corp...................................... 16,100 1,160,206
Commerce Bancshares, Inc.................................. 17,450 538,769
First Union Corp.(1)...................................... 200 6,375
First Virginia Banks, Inc.(1)............................. 45,300 1,653,450
Golden West Financial Corp................................ 30,100 1,027,162
KeyCorp................................................... 15,800 292,300
State Street Corp......................................... 2,800 271,250
Summit Bancorp............................................ 53,800 1,365,175
U.S. Bancorp.............................................. 10,800 219,375
Washington Federal, Inc................................... 5,000 87,188
-------------
7,910,094
-------------
BROADCASTING & MEDIA--3.3%
AMFM, Inc.+............................................... 6,000 398,250
AT&T Corp.-Liberty Media Group, Inc., Class A+............ 15,600 779,025
Dow Jones & Co., Inc...................................... 2,400 155,700
Gannett Co., Inc.......................................... 5,300 338,537
MediaOne Group, Inc.+..................................... 21,600 1,633,500
News Corp. Ltd. ADR....................................... 28,500 1,254,000
Tribune Co.(1)............................................ 5,200 202,150
WPP Group PLC ADR......................................... 600 46,425
-------------
4,807,587
-------------
BUSINESS SERVICES--1.0%
Ceridian Corp.+........................................... 38,800 841,475
HON INDUSTRIES, Inc....................................... 23,900 596,006
Waste Management, Inc..................................... 72 1,143
-------------
1,438,624
-------------
CHEMICALS--2.2%
Bush Boake Allen, Inc.+................................... 46,900 1,401,137
du Pont (E.I.) de Nemours & Co............................ 13,000 616,688
Praxair, Inc.............................................. 25,500 1,133,156
-------------
3,150,981
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMUNICATION EQUIPMENT--1.7%
Loral Space & Communications Ltd.+........................ 20,600 $ 202,138
Lucent Technologies, Inc.................................. 19,800 1,231,313
SBC Communications, Inc................................... 100 4,381
Tellabs, Inc.+............................................ 18,900 1,035,956
-------------
2,473,788
-------------
COMPUTERS & BUSINESS EQUIPMENT--6.4%
Gateway, Inc.+............................................ 9,500 524,875
Hewlett-Packard Co........................................ 24,300 3,280,500
International Business Machines Corp...................... 27,500 3,069,687
Lexmark International Group, Inc., Class A+............... 10,900 1,286,200
Xerox Corp................................................ 46,000 1,216,125
-------------
9,377,387
-------------
COMPUTER SOFTWARE--3.2%
BMC Software, Inc.+....................................... 17,300 809,856
Cadence Design Systems, Inc.+(1).......................... 35,500 596,844
Computer Associates International, Inc.................... 18,400 1,026,950
Computer Sciences Corp.+(1)............................... 14,700 1,198,969
Novell, Inc.+............................................. 16,200 317,925
Parametric Technology Corp.+.............................. 33,400 272,419
SAP AG ADR................................................ 8,000 393,000
-------------
4,615,963
-------------
DRUGS--5.6%
American Home Products Corp............................... 47,400 2,663,288
Bristol-Myers Squibb Co.(1)............................... 52,200 2,737,237
Eli Lilly & Co.(1)........................................ 4,900 378,831
Merck & Co., Inc.......................................... 21,600 1,501,200
Pfizer, Inc.(1)........................................... 1,600 67,400
Pharmacia Corp............................................ 3,500 174,781
SmithKline Beecham PLC ADR................................ 10,100 694,375
-------------
8,217,112
-------------
ELECTRIC UTILITIES--1.4%
Duke Energy Corp.......................................... 100 5,750
Edison International...................................... 100 1,906
Florida Progress Corp.(1)................................. 8,000 392,000
FPL Group, Inc.(1)........................................ 37,600 1,699,050
Southern Co............................................... 100 2,494
-------------
2,101,200
-------------
ELECTRONICS--5.9%
Agilent Technologies, Inc.+............................... 500 44,313
Applied Materials, Inc.+.................................. 2,800 285,075
Emerson Electric Co.(1)................................... 19,600 1,075,550
Intel Corp................................................ 13,600 1,724,650
</TABLE>
54
<PAGE>
STYLE SELECT SERIES LOGO
Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
ELECTRONICS (CONTINUED)
Koninklijke (Royal) Philips Electronics NV ADR............ 6,640 $ 296,310
Micron Technology, Inc.................................... 3,500 487,375
Molex, Inc................................................ 8,665 476,033
Motorola, Inc............................................. 10,500 1,250,156
National Semiconductor Corp.+............................. 6,900 419,175
Samsung Electronics Co. Ltd. GDR+(2)...................... 2,500 400,625
Texas Instruments, Inc.................................... 13,200 2,149,950
-------------
8,609,212
-------------
ENERGY SERVICES--1.3%
Halliburton Co............................................ 16,600 733,513
Schlumberger Ltd.......................................... 4,100 313,906
Transocean Sedco Forex, Inc............................... 18,100 850,700
-------------
1,898,119
-------------
ENERGY SOURCES--5.8%
Amerada Hess Corp......................................... 100 6,363
Anadarko Petroleum Corp................................... 13,500 586,406
BP Amoco PLC ADR.......................................... 328 16,728
Chevron Corp.(1).......................................... 27,100 2,306,887
Devon Energy Corp......................................... 7,539 363,286
Exxon Mobil Corp.......................................... 13,432 1,043,498
Royal Dutch Petroleum Co. NY Registry Shares GDR.......... 14,900 854,888
Texaco, Inc.(1)........................................... 17,500 866,250
Total Fina SA ADR+........................................ 9,000 680,625
WD-40 Co.................................................. 34,300 683,856
Williams Cos., Inc........................................ 26,300 981,319
-------------
8,390,106
-------------
ENTERTAINMENT PRODUCTS--1.0%
National Presto Industries, Inc........................... 42,000 1,449,000
-------------
FINANCIAL SERVICES--11.8%
American Express Co....................................... 20,800 3,121,300
Citigroup, Inc............................................ 39,984 2,376,549
Countrywide Credit Industries, Inc.(1).................... 17,500 483,437
Donaldson, Lufkin & Jenrette, Inc......................... 10,600 441,888
Dun & Bradstreet Corp..................................... 12,500 376,563
Federal Home Loan Mortgage Corp........................... 10,300 473,156
Household International, Inc.............................. 53,000 2,212,750
Morgan (J.P.) & Co., Inc.................................. 200 25,675
Morgan Stanley, Dean Witter & Co.......................... 26,320 2,020,060
Providian Financial Corp.................................. 13,200 1,162,425
SLM Holding Corp.......................................... 10,300 322,519
Student Loan Corp......................................... 30,100 1,204,000
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
FINANCIAL SERVICES (CONTINUED)
United Asset Management Corp.............................. 21,000 $ 378,000
Wells Fargo Co............................................ 62,600 2,570,512
-------------
17,168,834
-------------
FOOD, BEVERAGE & TOBACCO--2.9%
Anheuser-Busch Cos., Inc.(1).............................. 18,000 1,270,125
Archer-Daniels-Midland Co................................. 19,610 194,874
Coca-Cola Co.............................................. 500 23,531
Gallaher Group PLC ADR.................................... 200 3,675
Lance, Inc................................................ 74,700 793,688
Nabisco Holdings Corp., Class A........................... 13,900 522,119
Philip Morris Cos., Inc................................... 26,600 581,875
Tyson Foods, Inc., Class A................................ 18,400 192,050
UST, Inc.................................................. 40,100 601,500
-------------
4,183,437
-------------
FOREST PRODUCTS--3.5%
Bemis Co., Inc.(1)........................................ 21,300 784,106
Georgia-Pacific Group..................................... 7,000 257,250
International Paper Co.................................... 248 9,114
Minnesota Mining & Manufacturing Co....................... 21,000 1,816,500
Sealed Air Corp.+......................................... 15,500 862,188
Sonoco Products Co........................................ 14,600 304,775
Weyerhaeuser Co........................................... 19,000 1,015,312
-------------
5,049,245
-------------
GAS & PIPELINE UTILITIES--2.3%
AGL Resources, Inc........................................ 77,600 1,358,000
Cascade Natural Gas Corp.................................. 23,800 383,775
El Paso Energy Corp....................................... 100 4,250
Northwest Natural Gas Co.................................. 12,800 281,600
Washington Gas Light Co................................... 51,400 1,317,125
-------------
3,344,750
-------------
HEALTH SERVICES--0.3%
Wellpoint Health Networks, Inc.+.......................... 6,000 442,500
-------------
HOUSEHOLD PRODUCTS--0.8%
AptarGroup, Inc........................................... 14,400 410,400
Gillette Co.(1)........................................... 5,000 185,000
Procter & Gamble Co....................................... 8,700 518,738
-------------
1,114,138
-------------
HOUSING--0.8%
Masco Corp................................................ 53,900 1,209,381
Maytag Corp.(1)........................................... 200 6,888
-------------
1,216,269
-------------
INSURANCE--4.4%
American International Group, Inc.*....................... 4,156 455,861
Aon Corp.................................................. 25,100 679,269
</TABLE>
55
<PAGE>
STYLE SELECT SERIES LOGO
Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
INSURANCE (CONTINUED)
Chubb Corp................................................ 9,300 $ 591,712
CIGNA Corp.(1)............................................ 21,100 1,682,725
Horace Mann Educators Corp................................ 10,000 145,625
Progressive Corp.......................................... 10,100 660,919
Sun Life Financial Services of Canada+.................... 4,800 57,900
Transatlantic Holdings, Inc............................... 12,100 1,003,544
UnumProvident Corp........................................ 10,319 175,423
XL Capital Ltd., Class A.................................. 19,645 935,593
-------------
6,388,571
-------------
LEISURE & TOURISM--3.0%
Carnival Corp., Class A................................... 22,400 557,200
Continental Airlines, Inc., Class B+...................... 9,700 388,000
Marriott International, Inc., Class A..................... 12,700 406,400
McDonald's Corp.(1)....................................... 47,100 1,795,687
The Walt Disney Co........................................ 27,500 1,191,094
-------------
4,338,381
-------------
MACHINERY--1.2%
Dover Corp................................................ 11,200 569,100
Nordson Corp.............................................. 15,300 683,719
Tecumseh Products Co., Class A............................ 9,000 417,937
-------------
1,670,756
-------------
MEDICAL PRODUCTS--0.9%
Johnson & Johnson Co...................................... 16,700 1,377,750
-------------
METALS & MINERALS--1.4%
Alcoa, Inc................................................ 10,700 694,162
Barrick Gold Corp......................................... 7,900 132,819
Martin Marietta Materials, Inc............................ 12,100 641,300
Vulcan Materials Co....................................... 13,900 608,994
-------------
2,077,275
-------------
MULTI-INDUSTRY--5.0%
Berkshire Hathaway, Inc., Class A+........................ 39 2,312,700
Berkshire Hathaway, Inc., Class B+........................ 400 766,450
Cooper Industries, Inc.................................... 18,800 645,075
Fortune Brands, Inc....................................... 200 5,000
General Electric Co....................................... 400 62,900
Honeywell International, Inc.............................. 23,100 1,293,600
Pall Corp.(1)............................................. 8,600 191,887
Russ Berrie & Co., Inc.................................... 7,900 147,138
Tyco International Ltd.................................... 38,900 1,786,969
-------------
7,211,719
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
REAL ESTATE COMPANIES--0.0%
Boardwalk Equities, Inc.+................................. 700 $ 5,530
-------------
REAL ESTATE INVESTMENT TRUSTS--0.5%
CenterPoint Properties Corp............................... 1,300 46,638
Crescent Real Estate Equities Co.......................... 5,500 94,187
Equity Residential Properties Trust....................... 1,900 86,450
General Growth Properties, Inc............................ 7,200 236,700
Mack-Cali Realty Corp..................................... 800 20,600
Manufactured Home Communities, Inc........................ 8,100 202,500
Vornado Realty Trust...................................... 1,100 37,950
-------------
725,025
-------------
RETAIL--1.3%
Consolidated Stores Corp.+................................ 15,500 192,781
The Kroger Co.(1)......................................... 79,000 1,466,438
Weis Markets, Inc......................................... 8,100 269,325
-------------
1,928,544
-------------
TELECOMMUNICATIONS--0.9%
AT&T Wireless Group+...................................... 14,700 467,644
Globalstar Telecommunications Ltd.+....................... 10,644 125,067
Nextel Communications, Inc., Class A+..................... 6,300 689,456
-------------
1,282,167
-------------
TELEPHONE--3.7%
AT&T Corp................................................. 25,300 1,181,194
Bell Atlantic Corp.(1).................................... 2,000 118,500
GTE Corp.................................................. 25,400 1,720,850
MCI WorldCom, Inc.+....................................... 29,500 1,340,406
Sprint Corp............................................... 16,400 1,008,600
-------------
5,369,550
-------------
TRANSPORTATION--0.7%
XTRA Corp................................................. 22,300 1,048,100
-------------
TOTAL COMMON STOCK
(cost $121,907,849)....................................... 133,541,883
-------------
PREFERRED STOCK--2.9%
ENERGY SOURCES--0.1%
Belco Oil & Gas Corp. convertible 6.50%................... 5,400 75,938
-------------
FINANCIAL SERVICES--1.2%
Union Pacific Capital Trust convertible 6.25%............. 33,200 1,386,100
Wendys Financing I Series A convertible 5.00%............. 8,300 423,300
-------------
1,809,400
-------------
</TABLE>
56
<PAGE>
STYLE SELECT SERIES LOGO
Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (continued)
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK (CONTINUED)
INSURANCE--1.5%
Metlife Capital Trust I convertible 8.00%................. 37,600 $ 2,117,350
-------------
REAL ESTATE INVESTMENT TRUSTS--0.1%
General Growth Properties, Inc., convertible 7.25%........ 7,700 170,362
Vornado Realty Trust Series A convertible 6.50%........... 300 14,438
-------------
184,800
-------------
TOTAL PREFERRED STOCK
(cost $3,884,917)......................................... 4,187,488
-------------
BONDS & NOTES--2.2%
COMPUTERS & BUSINESS EQUIPMENT--0.1%
Hewlett Packard Co. convertible zero coupon due
10/14/17................................................ $ 250 194,600
-------------
ENERGY SERVICES--0.4%
Baker Hughes, Inc. convertible zero coupon due 05/05/08... 450 347,085
Diamond Offshore Drilling, Inc. convertible 3.75% due
02/15/07................................................ 173 194,699
-------------
541,784
-------------
HEALTH SERVICES--0.8%
Medical Care International, Inc. convertible 6.75% due
10/01/06................................................ 1,475 1,224,250
-------------
RETAIL--0.9%
Office Depot, Inc. convertible
zero coupon due 12/11/07................................ 1,994 1,308,563
-------------
TOTAL BONDS & NOTES
(cost $3,416,126)......................................... 3,269,197
-------------
TOTAL INVESTMENT SECURITIES--96.9%
(cost $129,208,892)....................................... 140,998,568
-------------
SHORT-TERM SECURITIES--0.8%
Cayman Island Time Deposit with State Street Bank and
Trust Co. 4.25% due 05/01/00 (cost $1,210,000).......... 1,210 1,210,000
-------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS--2.5%
Agreement with State Street Bank and Trust Co., bearing
5.80%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $497,240 collateralized by $510,000 Federal
National Mortgage Association 5.60%, due 03/01/04
approximate aggregate value $515,100
(cost $497,000)......................................... $ 497 $ 497,000
Agreement with State Street Bank and Trust Co., bearing
4.75%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $3,087,222 collateralized by $2,720,000 U.S.
Treasury Bond 10.75% due 05/15/03 approximate aggregate
value $3,149,619
(cost $3,086,000)....................................... 3,086 3,086,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $3,583,000) 3,583,000....
-------------
TOTAL INVESTMENTS--
(cost $134,001,892)....................................... 100.2% 145,791,568
Liabilities in excess of other assets....................... (0.2) (255,221)
------------- -------------
NET ASSETS-- 100.0% $ 145,536,347
============= =============
</TABLE>
------------------
+ Non-income producing security
* Security represents an investment in an affiliated company
ADR ("American Depositary Receipt")
GDR ("Global Depositary Receipt")
(1) Security is traded with rights attached
(2) Resale restricted to qualified institutional buyers
See Notes to Financial Statements
OPEN FUTURES CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF VALUE AT VALUE AS OF UNREALIZED
CONTRACTS DESCRIPTION EXPIRATION DATE TRADE DATE APRIL 30, 2000 DEPRECIATION
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
5 Long S & P 500 Index Future June 2000 $1,851,968 $1,825,000 $(26,968)
</TABLE>
57
<PAGE>
STYLE SELECT SERIES LOGO
Small-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--95.8%
AEROSPACE & MILITARY TECHNOLOGY--0.3%
AAR Corp.(1).............................................. 2,500 $ 37,656
Cordant Technologies, Inc................................. 1,800 101,925
-------------
139,581
-------------
APPAREL & TEXTILES--1.4%
Venator Group, Inc.+...................................... 23,600 280,250
Wolverine World Wide, Inc.(1)............................. 32,000 384,000
-------------
664,250
-------------
AUTOMOTIVE--1.0%
Apogee Enterprises, Inc................................... 6,100 21,731
Borg-Warner Automotive, Inc............................... 3,700 154,706
Polaris Industries, Inc................................... 2,300 70,438
Tower Automotive, Inc.+................................... 11,000 171,875
Wabash National Corp...................................... 3,590 52,279
-------------
471,029
-------------
BANKS--5.6%
Astoria Financial Corp.................................... 3,560 98,122
CCB Financial Corp.(1).................................... 10,770 426,088
Chittenden Corp........................................... 2,700 71,719
Community Bank Systems, Inc............................... 7,000 159,250
Community First Bankshares, Inc........................... 11,000 185,625
F.N.B. Corp............................................... 12,653 249,887
InterWest Bancorp, Inc.................................... 12,000 192,000
Keystone Financial, Inc................................... 16,000 240,000
Peoples Heritage Financial Group, Inc..................... 22,000 287,375
Republic Security Financial Corp.......................... 26,000 144,625
Seacoast Financial Services Corp.......................... 22,000 206,250
Southwest Bancorp. of Texas, Inc.+........................ 7,700 150,631
Staten Islands Bancorp, Inc............................... 6,600 113,437
Wilmington Trust Corp..................................... 1,500 69,188
-------------
2,594,197
-------------
BROADCASTING & MEDIA--2.1%
ACNielson Corp.+.......................................... 7,300 168,356
Banta Corp................................................ 8,600 168,238
Houghton Mifflin Co....................................... 3,600 149,625
Imax Corp.+............................................... 4,400 101,200
Pulitzer, Inc............................................. 2,700 103,613
R.H. Donnelley Corp.+..................................... 6,300 126,000
Valassis Communications, Inc.+............................ 4,900 166,906
-------------
983,938
-------------
BUSINESS SERVICES--8.0%
Acxiom Corp.+............................................. 5,000 135,000
Bowne & Co., Inc.......................................... 14,700 169,050
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
BUSINESS SERVICES (CONTINUED)
Briggs & Stratton Corp.................................... 1,350 $ 51,806
Brightpoint, Inc.+........................................ 12,700 150,019
CDI Corp.+................................................ 4,200 94,500
Choicepoint, Inc.+........................................ 1,500 57,000
CIRCOR International, Inc................................. 12,050 137,822
DeVry, Inc.+.............................................. 2,100 50,006
Dycom Industries, Inc.+................................... 3,050 158,600
FSI International, Inc.+.................................. 42,800 639,325
Gartner Group, Inc., Class A+............................. 9,200 124,200
Granite Construction, Inc................................. 3,200 76,000
HON INDUSTRIES, Inc....................................... 19,000 473,812
Interim Services, Inc.+................................... 24,100 412,712
ITT Educational Services, Inc.+........................... 3,200 57,200
Mail-Well, Inc.+.......................................... 7,600 67,925
Maximus, Inc.+............................................ 4,000 94,250
Pittston Brink's Group.................................... 6,226 101,951
Romac International, Inc.+................................ 22,550 232,547
STERIS Corp.+............................................. 28,200 253,800
United Stationers, Inc.+.................................. 4,100 136,838
-------------
3,674,363
-------------
CHEMICALS--1.8%
A. Schulman, Inc.......................................... 26,000 334,750
Ferro Corp................................................ 5,600 128,100
Fuller (H.B.) Co.......................................... 2,900 111,469
R.P.M., Inc............................................... 25,000 253,125
-------------
827,444
-------------
COMMUNICATION EQUIPMENT--1.7%
Allen Telecom, Inc.+...................................... 4,700 83,425
Anixter International, Inc.+.............................. 5,000 168,437
ANTEC Corp.+.............................................. 2,300 123,625
AVT Corp.+................................................ 19,360 214,170
Belden, Inc............................................... 3,800 112,813
Black Box Corp.+.......................................... 1,200 92,325
-------------
794,795
-------------
COMPUTERS & BUSINESS EQUIPMENT--3.7%
American Management Systems, Inc.+........................ 6,000 222,000
Bell & Howell Co.+........................................ 6,600 175,312
Electronics for Imaging, Inc.+............................ 2,200 114,950
Evans & Sutherland Computer Corp.+........................ 44,700 508,462
Kemet Corp.+.............................................. 3,300 245,850
Micron Electronics, Inc.+................................. 9,400 100,463
Quantum Corp.+............................................ 19,600 229,075
Radisys Corp.+............................................ 2,500 103,438
-------------
1,699,550
-------------
</TABLE>
58
<PAGE>
STYLE SELECT SERIES LOGO
Small-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
COMPUTER SOFTWARE--3.3%
Affiliated Computer Services, Inc., Class A+.............. 1,700 $ 56,312
Complete Business Solutions, Inc.+........................ 12,000 274,500
Computer Horizons Corp.+(1)............................... 15,000 206,250
JDA Software Group, Inc.+................................. 7,000 130,375
Kronos, Inc.+............................................. 990 31,804
Mentor Graphics Corp.+.................................... 23,600 309,750
Paradyne Networks, Inc.+.................................. 1,000 28,188
Storage Technology Corp.+................................. 7,400 96,200
Structural Dynamics Research Corp.+(1).................... 19,000 254,125
Transaction Systems Architects, Inc., Class A+............ 7,030 114,677
-------------
1,502,181
-------------
DRUGS--1.4%
AmeriSource Health Corp., Class A+........................ 9,600 192,000
Omnicare, Inc............................................. 27,000 410,063
West Pharmaceutical Services, Inc......................... 2,382 58,210
-------------
660,273
-------------
ELECTRIC UTILITIES--0.3%
Sierra Pacific Resources.................................. 7,920 119,790
-------------
ELECTRICAL EQUIPMENT--2.4%
Crane Co.(1).............................................. 5,600 150,500
Credence Systems Corp.+................................... 600 85,650
Hussmann International, Inc............................... 26,600 369,075
Mark IV Industries, Inc................................... 3,700 78,394
Roper Industries, Inc..................................... 4,100 129,150
Watts Industries, Inc., Class A........................... 19,500 260,812
-------------
1,073,581
-------------
ELECTRONICS--3.2%
Analogic Corp............................................. 17,600 716,100
Diebold, Inc.+............................................ 4,400 127,050
General Semiconductor, Inc.+.............................. 5,200 104,000
Lam Research Corp.+....................................... 900 41,288
Sensormatic Electronics Corp.+............................ 7,400 123,487
Silicon Valley Group, Inc.+............................... 10,000 285,000
Tektronix, Inc.+.......................................... 1,100 63,662
-------------
1,460,587
-------------
ENERGY SERVICES--1.0%
Coflexip SA ADR........................................... 3,000 152,250
Key Energy Service, Inc.+................................. 32,000 312,000
-------------
464,250
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
ENERGY SOURCES--2.9%
Barrett Resources Corp.+.................................. 3,400 $ 107,950
Chieftain International, Inc.+............................ 10,000 190,000
Devon Energy Corp......................................... 5,000 240,937
Evergreen Resources, Inc.+................................ 1,920 44,400
Helmerich & Payne, Inc.................................... 7,400 231,713
Noble Affiliates, Inc..................................... 10,000 360,625
Pennzoil-Quaker State Co.................................. 13,900 152,031
-------------
1,327,656
-------------
ENTERTAINMENT PRODUCTS--0.8%
Harman International Industries, Inc...................... 4,000 261,500
Polaroid Corp.(1)......................................... 6,200 125,163
-------------
386,663
-------------
FINANCIAL SERVICES--3.6%
Associated Banc-Corp...................................... 7,000 178,938
E. W. Blanch Holdings, Inc................................ 2,700 60,075
Liberty Financial Cos., Inc............................... 11,400 213,750
MBIA, Inc.(1)............................................. 13,000 642,687
Profit Recovery Group International, Inc.+................ 7,300 128,206
The BISYS Group, Inc.+.................................... 1,300 81,331
Webster Financial Corp.................................... 15,000 320,625
-------------
1,625,612
-------------
FOOD, BEVERAGE & TOBACCO--1.5%
American Italian Pasta Co., Class A+...................... 6,200 153,450
Coors Adolph Co., Class B................................. 1,600 81,600
Flowers Industries, Inc.(1)............................... 9,900 150,975
Ralcorp Holdings, Inc.+................................... 8,800 121,550
Vlasic Foods International, Inc.+......................... 26,000 45,500
Whitman Corp.............................................. 12,300 140,681
-------------
693,756
-------------
FOREST PRODUCTS--2.4%
Deltic Timber Corp........................................ 19,000 418,000
Packaging Corp. of America................................ 7,700 91,438
Rayonier, Inc............................................. 10,000 469,375
Wausau-Mosinee Paper Corp................................. 11,700 141,862
-------------
1,120,675
-------------
GAS & PIPELINE UTILITIES--0.5%
Mitchell Energy & Development Corp., Class B.............. 9,000 215,438
-------------
HEALTH SERVICES--2.0%
Apria Healthcare Group, Inc.+............................. 7,900 110,106
Dendrite International, Inc.+............................. 2,500 57,188
Kendle International, Inc.+............................... 1,000 9,125
Manor Care, Inc.+......................................... 20,500 244,719
</TABLE>
59
<PAGE>
STYLE SELECT SERIES LOGO
Small-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
HEALTH SERVICES (CONTINUED)
MedQuist, Inc.+........................................... 8,000 $ 283,500
PAREXEL International Corp.+.............................. 25,000 225,000
-------------
929,638
-------------
HOUSING--3.6%
Bassett Furniture Industries, Inc......................... 6,000 79,875
Champion Enterprises, Inc.+............................... 13,910 98,240
D.R. Horton, Inc.......................................... 17,500 226,406
Dorel Industries, Inc., Class B+.......................... 4,100 79,181
Furniture Brands International, Inc.+..................... 8,000 149,500
Hughes Supply, Inc........................................ 3,700 56,425
Kaufman & Broad Home Corp................................. 3,800 73,150
Lennar Corp............................................... 14,000 260,750
Pulte Corp................................................ 19,470 418,605
Toll Brothers, Inc.+...................................... 9,600 208,200
-------------
1,650,332
-------------
INSURANCE--12.7%
Chiyoda Fire & Marine Insurance Co. Ltd................... 200,000 549,924
Enhance Financial Services Group, Inc..................... 43,750 442,969
Everest Reinsurance Group Ltd............................. 5,000 146,250
Financial Security Assured Holdings Ltd................... 15,500 1,144,094
First American Financial Corp............................. 45,000 694,687
Gallagher (Arthur J.) & Co................................ 4,200 156,450
HCC Insurance Holdings, Inc............................... 4,000 47,000
Horace Mann Educators Corp................................ 6,000 87,375
IPC Holdings Ltd.......................................... 20,000 255,000
LaSalle Re Holdings Ltd................................... 43,000 564,375
Leucadia National Corp.................................... 20,400 475,575
Old Republic International Corp........................... 39,000 555,750
Radian Group, Inc......................................... 3,199 162,949
Stewart Information Services Corp......................... 40,100 571,425
-------------
5,853,823
-------------
INVESTMENT COMPANIES--1.2%
Capital Southwest Corp.................................... 6,000 336,000
Morgan Stanley Asia-Pacific Fund+......................... 18,000 191,250
-------------
527,250
-------------
LEISURE & TOURISM--1.0%
Alaska Air Group, Inc.+................................... 3,500 100,625
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
LEISURE & TOURISM (CONTINUED)
Landry's Seafood Restaurants, Inc.+....................... 24,000 $ 207,000
Lone Star Steakhouse & Saloon, Inc.+...................... 6,900 81,506
Prime Hospitality Corp.+.................................. 9,600 88,800
-------------
477,931
-------------
MACHINERY--5.3%
Alamo Group, Inc.......................................... 50,000 543,750
Federal Signal Corp....................................... 39,700 806,406
JLG Industries, Inc....................................... 12,400 117,800
Regal-Beloit Corp......................................... 7,200 130,050
Standard Register Co...................................... 3,900 50,944
Stewart & Stevenson Services, Inc......................... 24,000 289,500
Toyoda Automatic Loom Works Ltd........................... 25,000 495,302
-------------
2,433,752
-------------
MEDICAL PRODUCTS--1.2%
Dentsply International, Inc............................... 3,900 113,344
Inamed Corp.+............................................. 1,500 62,062
Invacare Corp............................................. 9,300 248,775
Varian Medical Systems, Inc.+............................. 3,500 140,000
-------------
564,181
-------------
METALS & MINERALS--2.4%
American National Can Group, Inc.......................... 4,200 70,613
Martin Marietta Materials, Inc............................ 2,400 127,200
Minerals Technologies, Inc................................ 1,100 50,875
Reynolds Metals Co.(1).................................... 12,500 831,250
-------------
1,079,938
-------------
MULTI-INDUSTRY--0.2%
Renaissance Holdings Ltd.+................................ 2,000 73,500
-------------
REAL ESTATE COMPANIES--5.1%
Catellus Development Corp.+............................... 46,900 609,700
Forest City Enterprises, Inc., Class A.................... 23,500 684,437
LNR Property Corp......................................... 26,200 564,938
Wellsford Real Properties, Inc.+.......................... 53,800 477,475
-------------
2,336,550
-------------
REAL ESTATE INVESTMENT TRUSTS--7.2%
Chateau Communities, Inc.................................. 4,800 124,800
Chelsea GCA Realty, Inc................................... 1,400 45,675
EastGroup Properties, Inc................................. 8,480 176,490
FelCor Lodging Trust, Inc................................. 8,000 157,000
Gables Residential Trust.................................. 11,000 264,000
Glenborough Realty Trust, Inc............................. 3,100 45,725
</TABLE>
60
<PAGE>
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-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
Highwoods Properties, Inc................................. 9,000 $ 204,187
Home Properties of New York, Inc.......................... 11,000 308,000
IRT Property Co........................................... 18,000 149,625
Kilroy Realty Corp........................................ 2,900 69,963
Koger Equity, Inc......................................... 31,300 547,750
Mack-Cali Realty Corp..................................... 3,000 77,250
Parkway Properties, Inc................................... 5,000 150,000
Plum Creek Timber Co., Inc................................ 17,000 414,375
Prentiss Properties Trust................................. 11,000 261,250
Summit Properties, Inc.................................... 16,500 328,969
-------------
3,325,059
-------------
RETAIL--3.6%
Abercrombie & Fitch Co., Class A+......................... 11,350 124,850
AnnTaylor Stores Corp.+................................... 16,000 331,000
Borders Group, Inc.+...................................... 11,100 176,212
Casey's General Stores, Inc............................... 12,500 146,094
Ethan Allen Interiors, Inc................................ 4,200 112,088
Great Atlantic & Pacific Tea Co., Inc..................... 2,000 36,625
Pier 1 Imports, Inc....................................... 44,500 506,187
The Men's Wearhouse, Inc.+................................ 3,400 72,888
Whole Foods Market, Inc.+................................. 3,000 127,687
-------------
1,633,631
-------------
TRANSPORTATION--1.4%
CNF Transportation, Inc................................... 12,100 338,044
Knight Transportation, Inc.+.............................. 11,000 202,125
Knightsbridge Tankers Ltd................................. 6,540 121,807
-------------
661,976
-------------
TOTAL COMMON STOCK
(cost $43,328,590)........................................ 44,047,170
-------------
BONDS & NOTES--0.7%
HEALTH SERVICES--0.7%
Phymatrix Corp. convertible 6.75% due 6/15/03
(cost $506,164)......................................... $ 1,000 320,000
-------------
TOTAL INVESTMENT SECURITIES--96.5%
(cost $43,834,754)........................................ 44,367,170
-------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS--3.5%
Agreement with State Street Bank and Trust Co., bearing
4.75%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $794,314 collateralized by $805,000 U.S.
Treasury Note 4.00% due 10/31/00 approximate aggregate
value $811,867
(cost $794,000)......................................... $ 794 $ 794,000
Agreement with State Street Bank and Trust Co., bearing
4.75%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $453,179 collateralized by $475,000 U.S.
Treasury Note 5.63% due 05/15/08 approximate aggregate
value $462,174
(cost $453,000)......................................... 453 453,000
Agreement with State Street Bank and Trust Co., bearing
5.68%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $357,169 collateralized by $325,000 U.S.
Treasury Bond 9.13% due 05/15/09 approximate aggregate
value $364,342
(cost $357,000)......................................... 357 357,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $1,604,000)......................................... 1,604,000
-------------
TOTAL INVESTMENTS--
(cost $45,438,754)........................................ 100.0% 45,971,170
Liabilities in excess of other assets....................... 0.0 (17,781)
------------- -------------
NET ASSETS.................................................. 100.0% $ 45,953,389
============= =============
</TABLE>
------------------
+ Non-income producing security
(1) Security is traded with rights attached
See Notes to Financial Statements
61
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-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--92.9%
ARGENTINA--0.1%
Telefonica de Argentina SA ADR (Utilities)................ 2,690 $ 94,486
-------------
AUSTRALIA--1.9%
Brambles Industries Ltd. (Industrial & Commercial)........ 14,040 395,209
Broken Hill Proprietary Co. Ltd. (Materials).............. 6,094 65,626
Commonwealth Bank of Australia (Finance).................. 9,319 141,935
Lend Lease Corp. Ltd. (Finance)........................... 5,782 62,658
News Corp. Ltd.
(Information & Entertainment)........................... 33,601 426,721
News Corp. Ltd. ADR
(Information & Entertainment)........................... 9,130 401,720
Publishing & Broadcasting Ltd.
(Information & Entertainment)........................... 19,000 147,577
TABCORP Holdings Ltd.
(Information & Entertainment)........................... 11,000 58,883
Telstra Corp. Ltd.
(Information Technology)................................ 51,919 222,554
Telstra Corp. Ltd. IR
(Information Technology)................................ 44,620 114,134
Westpac Banking Corp. Ltd. (Finance)...................... 23,390 149,301
-------------
2,186,318
-------------
BELGIUM--0.3%
Dexia Belgium (Credit Communal)
(Finance)............................................... 944 122,378
Fortis (B) (Finance)...................................... 6,850 172,933
UCB SA (Healthcare)....................................... 670 22,537
-------------
317,848
-------------
BOTSWANA--0.1%
Sechaba Brewery Ltd. (Consumer Staples)................... 73,200 62,023
-------------
BRAZIL--0.1%
Compania Brasileira de Distribuicao ADR
(Industrial & Commercial)............................... 1,696 48,336
Uniao De Banco Brasilieros SA GDR+ (Finance).............. 2,000 49,875
-------------
98,211
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
CANADA--1.8%
Alcan Aluminium Ltd. (Materials).......................... 1,740 $ 56,633
Celestica, Inc.
(Industrial & Commercial)............................... 6,551 353,451
Celestica, Inc.+
(Industrial & Commercial)............................... 6,413 349,909
Nortel Networks Corp. (Information Technology)............ 7,450 842,143
Rogers Communications, Inc., Class B+
(Information & Entertainment)........................... 16,860 438,891
Royal Bank of Canada (Finance)............................ 1,010 47,673
-------------
2,088,700
-------------
DENMARK--0.1%
Tele Danmark A/S (Utilities).............................. 1,240 90,805
-------------
EGYPT--0.2%
Egypt Mobile Phone+ (Information Technology).............. 4,800 182,990
-------------
FINLAND--3.7%
Jot Automation Group Oyj (Information Technology)......... 30,610 221,229
Nokia Oyj
(Information Technology)................................ 31,880 1,828,771
Nokia Corp., Class A ADR (Information Technology)......... 20,800 1,183,000
Sonera Oyj
(Information Technology)................................ 14,160 778,808
Tietoenator Oyj
(Information Technology)................................ 4,430 213,447
-------------
4,225,255
-------------
FRANCE--11.6%
Alcatel
(Information Technology)................................ 2,110 489,141
Altran Technologies SA (Industrial & Commercial).......... 410 83,790
Aventis SA (Healthcare)................................... 7,251 398,809
Aventis SA (Healthcare)................................... EUR 1,282 70,744
Axa (Finance)............................................. 6,494 962,893
Banque Nationale de Paris (Finance)....................... 10,920 882,543
Business Objects SA ADR+ (Information Technology)......... 2,352 230,202
Canal Plus
(Information & Entertainment)........................... 6,450 1,243,103
</TABLE>
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-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
FRANCE (CONTINUED)
Cap Gemini SA
(Information Technology)................................ 1,020 $ 200,293
Carrefour SA
(Consumer Discretionary)................................ 816 53,115
Christian Dior SA
(Consumer Discretionary)................................ 1,330 316,180
Compagnie de Saint Gobain (Materials)..................... 1,300 177,393
Groupe Danone
(Consumer Staples)...................................... 170 37,169
Hermes International (Consumer Discretionary)............. 660 93,601
L' Oreal SA
(Consumer Staples)...................................... 70 47,473
Lafarge SA (Materials).................................... 311 25,757
Legrand SA
(Information Technology)................................ 1,070 199,411
Louis Vuitton Moet Henessy (Consumer Staples)............. 533 223,668
Sanofi-Synthelabo SA+ (Healthcare)........................ 19,974 745,401
Schneider Electric SA (Information Technology)............ 938 61,397
Societe Generale (Finance)................................ 2,446 506,549
Societe Television Francaise 1
(Information & Entertainment)........................... 2,155 1,475,210
Sodexho Alliance SA
(Multi-industry)........................................ 406 60,827
Suez Lyonnaise des Eaux SA (Utilities).................... 4,420 693,143
Total Fina Elf (Energy)................................... 14,218 2,157,280
Vivendi (Multi-industry).................................. 16,772 1,658,920
-------------
13,094,012
-------------
GERMANY--6.1%
Allianz AG (Finance)...................................... 900 346,340
Bayer AG (Materials)...................................... 17,423 725,913
Deutsche Bank AG (Finance)................................ 2,531 170,039
Deutsche Lufthansa AG (Industrial & Commercial)........... 14,360 298,299
Deutsche Telekom AG (Information Technology).............. 5,127 332,746
Epcos AG+
(Information Technology)................................ 5,680 800,372
Gehe AG (Healthcare)...................................... 2,490 77,417
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
GERMANY (CONTINUED)
HypoVereinsbank (Finance)................................. 12,030 732,744
Infineon Technologies AG+ (Information Technology)........ 6,640 $ 457,259
Intershop Communications AG+
(Information Technology)................................ 1,490 661,702
Muenchener Ruckversicherungs-
Gesellschaft AG (Finance)............................... 1,583 464,111
Rhon-Klinikum AG
(Consumer Discretionary)................................ 920 33,915
SAP AG
(Information Technology)................................ 1,090 511,314
Siemens AG (Multi-industry)............................... 4,619 684,459
Thyssen Krupp AG
(Multi-industry)........................................ 18,450 387,454
Veba AG (Utilities)....................................... 3,880 194,707
-------------
6,878,791
-------------
GREECE--0.1%
Hellenic Telecommunications Organization SA (Information
Technology)............................................. 7,300 164,335
-------------
HONG KONG--2.5%
Cable & Wireless HKT Ltd. (Information Technology)........ 50,400 119,057
Cheung Kong (Holdings) Ltd.
(Real Estate)........................................... 26,000 310,430
China Telecom
(Hong Kong) Ltd.+
(Information Technology)................................ 117,800 843,135
Dao Heng Bank Group Ltd. (Finance)........................ 25,000 115,545
Henderson Land Development Co. Ltd. (Real Estate)......... 25,000 109,446
Hutchison Whampoa Ltd. (Multi-industry)................... 68,500 993,748
Li & Fung Ltd.
(Industrial & Commercial)............................... 38,500 150,259
Pacific Century CyberWorks Ltd.+
(Information Technology)................................ 97,000 180,571
Peregrine Investments Holdings Ltd.+(1) (Finance)......... 91,000 0
Sun Hung Kai Properties Ltd. (Real Estate)................ 7,000 54,819
-------------
2,877,010
-------------
INDIA--0.2%
ICICI Ltd. ADR (Finance).................................. 8,008 203,203
-------------
</TABLE>
63
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-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
IRELAND--1.2%
Bank of Ireland (Finance)................................. 96,838 $ 653,223
CRH PLC (Materials)....................................... 41,170 658,726
-------------
1,311,949
-------------
ITALY--5.0%
Alleanza Assicurazioni (Finance).......................... 16,000 165,529
Banca Intesa SpA (Finance)................................ 27,432 101,001
Bipop-Carire SpA (Finance)................................ 3,000 272,730
ENI SpA (Energy).......................................... 177,041 880,386
Mediaset SpA
(Information & Entertainment)........................... 12,000 194,729
Mediolanum SpA (Finance).................................. 15,780 261,807
San Paolo-IMI SpA
(Industrial & Commercial)............................... 43,700 611,806
Seat Pagine Gialle SpA
(Information & Entertainment)........................... 114,540 502,940
Tecnost SpA+
(Information Technology)................................ 27,000 94,746
Telecom Italia Mobile SpA (Information Technology)........ 75,000 715,916
Telecom Italia SpA (Information Technology)............... 78,447 1,096,843
UniCredito Italiano SpA (Finance)......................... 177,598 720,086
-------------
5,618,519
-------------
JAPAN--16.5%
Bridgestone Corp.
(Consumer Discretionary)................................ 4,000 86,840
Canon, Inc.
(Information Technology)................................ 16,000 731,750
DDI Corp. (Utilities)..................................... 9 103,319
East Japan Railway Co. (Industrial & Commercial).......... 11 65,176
Fanuc Ltd.
(Information Technology)................................ 2,100 220,081
Fuji Bank Ltd. (Finance).................................. 47,000 391,612
Fuji Television Network, Inc.
(Information & Entertainment)........................... 22 366,616
Fujitsu Ltd.
(Information Technology)................................ 34,000 963,200
Furukawa Electric Co. Ltd. (Information Technology)....... 29,000 402,453
Hitachi Ltd.
(Information Technology)................................ 7,000 83,599
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
Ito-Yokado Co. Ltd.
(Consumer Discretionary)................................ 2,000 $ 146,091
Kao Corp.
(Consumer Staples)...................................... 3,000 91,376
Kokuyo Co. Ltd.
(Information Technology)................................ 5,000 71,055
Komori Corp.
(Industrial & Commercial)............................... 2,000 27,422
Kyocera Corp.
(Information Technology)................................ 7,700 1,288,145
Makita Corp.
(Consumer Discretionary)................................ 6,000 52,104
Marui Co. Ltd.
(Consumer Discretionary)................................ 10,000 187,937
Matsushita Electric Industrial Co. Ltd.
(Information Technology)................................ 23,000 608,989
Mitsui Fudosan Co. Ltd.
(Real Estate)........................................... 27,000 274,462
Murata Manufacturing Co. Ltd.
(Information Technology)................................ 8,000 1,555,340
NEC Corp.
(Information Technology)................................ 30,300 824,719
Nichiei Co. Ltd. (Finance)................................ 10,000 198,121
Nippon Telegraph & Telephone
Corp. (Utilities)....................................... 107 1,327,408
Nomura Securities Co. Ltd. (Finance)...................... 20,000 503,634
NTT DoCoMo, Inc. (Information Technology)................. 42 1,403,694
Rohm Co. Ltd.
(Information Technology)................................ 1,500 502,708
Sankyo Co. Ltd. (Healthcare).............................. 7,000 154,238
Seven-Eleven Japan Co. Ltd. (Consumer Discretionary)...... 3,000 369,393
Shin-Etsu Chemical Co. Ltd. (Materials)................... 4,000 211,452
Shiseido Co. Ltd.
(Consumer Staples)...................................... 8,000 101,171
Shohkoh Fund & Co. Ltd. (Finance)......................... 1,000 178,679
Softbank Corp.
(Information Technology)................................ 600 147,757
Softbank Corp.+
(Information Technology)................................ 1,200 295,515
</TABLE>
64
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-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
JAPAN (CONTINUED)
Sony Corp.
(Information Technology)................................ 6,800 $ 781,262
Sony Corp.+
(Information Technology)................................ 5,700 659,631
Sumitomo Bank Ltd. (Finance).............................. 25,000 312,688
Sumitomo Corp.
(Industrial & Commercial)............................... 14,000 156,830
Sumitomo Electric Industries, Ltd.
(Information Technology)................................ 9,000 119,900
Takeda Chemical Industries Ltd. (Healthcare).............. 12,700 835,967
TDK Corp.
(Information & Entertainment)........................... 1,000 133,963
Toshiba Corp.
(Information Technology)................................ 136,000 1,319,520
Yamanouchi Pharmaceutical Co. Ltd. (Healthcare)........... 8,000 422,904
-------------
18,678,721
-------------
KAZAKHSTAN--0.0%
Firebird Republica Fund Ltd.(1) (Investment Companies).... 960 60,282
-------------
KOREA--1.6%
Korea Telecom Corp. ADR (Information Technology).......... 8,890 306,705
Pohang Iron & Steel Co. Ltd. ADR (Materials).............. 6,751 141,771
Samsung Electronics (Information Technology).............. 3,990 1,078,622
SK Telecom Co. Ltd. (Information Technology).............. 200 53,165
SK Telecom Co. Ltd. ADR (Information Technology).......... 8,500 272,531
-------------
1,852,794
-------------
LUXEMBOURG--0.0%
Societe Europeenne des Satellites
(Information & Entertainment)........................... 260 39,503
-------------
MALAYSIA--0.2%
AMMB Holdings Berhad (Finance)............................ 33,800 128,084
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
MALAYSIA (CONTINUED)
Malaysian Pacific Industries Berhad
(Information Technology)................................ 11,300 $ 126,382
-------------
254,466
-------------
MEXICO--1.6%
Fomento Economico Mexicano SA de CV (Multi-industry)...... 31,000 122,715
Grupo Televisa SA de CV GDR+
(Information & Entertainment)........................... 12,700 805,656
Telefonos de Mexico SA ADR (Utilities).................... 14,400 846,900
-------------
1,775,271
-------------
NETHERLANDS--8.5%
ABN AMRO Holdings NV (Finance)............................ 2,588 53,290
Akzo Nobel NV (Materials)................................. 720 29,474
Asm Lithography Holding NV+
(Information Technology)................................ 32,880 1,285,322
Buhrmann NV
(Industrial & Commercial)............................... 31,255 805,535
CSM NV (Consumer Staples)................................. 5,130 88,144
Equant NV+
(Information Technology)................................ 2,090 161,787
Fortis NV (Finance)....................................... 9,510 239,136
Gucci Group NV-NY Registry Shares
(Consumer Discretionary)................................ 398 34,875
ING Groep NV (Finance).................................... 25,220 1,376,109
Koninklijke (Royal) Philips Electronics NV
(Information Technology)................................ 39,332 1,754,582
Koninklijke KPN NV (Utilities)............................ 8,340 840,453
KPNQwest NV+
(Information Technology)................................ 5,830 242,212
Royal Dutch Petroleum Co. (Energy)........................ 6,400 368,876
STMicroelectronics NV
(Information Technology)................................ 2,482 473,615
STMicroelectronics NV NY Registry Shares
(Information Technology)................................ 4,670 885,841
TNT Post Group NV (Industrial & Commercial)............... 520 11,345
</TABLE>
65
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-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
NETHERLANDS (CONTINUED)
United Pan-Europe Communications NV Class A+
(Information & Entertainment)........................... 4,030 $ 146,657
VNU NV
(Information & Entertainment)........................... 11,580 619,536
Wolters Kluwer NV
(Information & Entertainment)........................... 6,837 161,355
-------------
9,578,144
-------------
NEW ZEALAND--0.1%
Telecom Corp. of New Zealand Ltd.
(Information Technology)................................ 27,000 114,067
-------------
NORWAY--0.1%
Orkla ASA, Class A
(Multi-industry)........................................ 6,390 98,791
-------------
PORTUGAL--0.1%
Jeronimo Martins SGPS SA (Consumer Staples)............... 3,628 64,711
-------------
SINGAPORE--0.8%
DBS Group Holdings Ltd. (Finance)......................... 13,000 179,021
NatSteel Electronics Ltd. (Information Technology)........ 40,000 229,710
Singapore Press Holdings Ltd.
(Information & Entertainment)........................... 9,900 193,765
United Overseas Bank Ltd. (Finance)....................... 42,512 296,451
-------------
898,947
-------------
SPAIN--3.4%
Banco Bilbao Vizcaya Argentaria SA (Finance).............. 56,364 768,608
Banco Santander Central Hispano SA (Finance).............. 95,142 992,081
Endesa SA (Utilities)..................................... 14,130 308,294
Repsol YPF SA (Energy).................................... 7,551 154,454
Telefonica SA+ (Utilities)................................ 50,335 1,120,194
Union Electrica Fenosa SA (Utilities)..................... 28,110 541,506
-------------
3,885,137
-------------
SWEDEN--3.1%
Atlas Copco AB, Class B (Industrial & Commercial)......... 1,430 32,696
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
SWEDEN (CONTINUED)
Electrolux AB, Class B (Consumer Discretionary)........... 5,870 $ 99,186
Ericsson L.M. Telecommunications Co., Class B
(Information Technology)................................ 19,140 1,701,381
Hennes & Mauritz AB, Class B
(Consumer Discretionary)................................ 9,280 246,335
Nordic Baltic Holding AB (Finance)........................ 39,433 248,490
Nordic Baltic Holding AB+ (Finance)....................... 6,860 42,701
Sandvik AB, Class B (Consumer Discretionary).............. 24,710 589,777
Securitas AB, Series B (Consumer Discretionary)........... 19,832 513,164
-------------
3,473,730
-------------
SWITZERLAND--3.4%
ABB AG
(Industrial & Commercial)............................... 7,462 837,260
ABB Ltd.
(Industrial & Commercial)............................... 1,064 118,671
Adecco SA
(Industrial & Commercial)............................... 1,580 1,296,396
Ares-Serono Group, Class B (Healthcare)................... 131 402,218
Credit Suisse Group (Finance)............................. 1,194 215,669
Nestle SA (Consumer Staples).............................. 280 493,578
Roche Holdings AG (Healthcare)............................ 16 167,093
Swisscom AG (Utilities)................................... 177 62,402
UBS AG (Finance).......................................... 1,266 310,159
-------------
3,903,446
-------------
TAIWAN--0.3%
Hon Hai Precision Industry Co. Ltd. GDR+* (Information
Technology)............................................. 4,076 113,802
Taiwan Semiconductor Manufacturing Co.+ (Information
Technology)............................................. 39,030 251,313
-------------
365,115
-------------
TURKEY--0.2%
Vestel Elektronik Sanayi ve Ticaret A/S+
(Information Technology)................................ 130,090 48,935
</TABLE>
66
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-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
TURKEY (CONTINUED)
Yapive Kredi Bankasi (Finance)............................ 5,256,000 $ 167,624
-------------
216,559
-------------
UNITED KINGDOM--15.8%
Abbey National PLC (Finance).............................. 7,000 79,887
AstraZeneca Group PLC (Healthcare)........................ 9,398 394,046
Baltimore Technologies PLC+ (Information Technology)...... 1,100 111,014
Barclays PLC (Finance).................................... 21,620 553,055
BG Group PLC (Utilities).................................. 6,483 39,138
BP Amoco PLC (Energy)..................................... 26,000 224,466
BP Amoco PLC ADR (Energy)................................. 14,600 744,600
Cable & Wireless PLC (Information Technology)............. 79,474 1,319,038
Cadbury Schweppes PLC (Consumer Staples).................. 23,000 157,563
Celltech Group PLC+ (Healthcare).......................... 32,700 539,670
Centrica PLC (Utilities).................................. 13,500 48,343
Colt Telecom Group PLC+ (Information Technology).......... 14,040 624,091
Compass Group PLC
(Information & Entertainment)........................... 39,000 561,670
David S. Smith Holdings PLC (Materials)................... 10,000 21,174
Diageo PLC
(Consumer Staples)...................................... 28,996 233,853
Electrocomponents PLC (Information Technology)............ 9,000 90,381
GKN PLC
(Consumer Discretionary)................................ 2,000 27,714
Glaxo Wellcome PLC (Healthcare)........................... 36,333 1,122,889
Hays PLC
(Industrial & Commercial)............................... 4,400 30,417
Hilton Group PLC
(Information & Entertainment)........................... 10,000 42,038
HSBC Holdings PLC (Finance)............................... 12,800 143,378
Kingfisher PLC
(Consumer Discretionary)................................ 22,000 179,828
Logica PLC
(Information Technology)................................ 11,370 344,314
Marconi PLC
(Information Technology)................................ 18,000 223,921
Old Mutual PLC+ (Finance)................................. 89,800 202,731
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
Reckitt Benckiser PLC (Consumer Staples).................. 88,780 $ 913,329
Reed International PLC
(Information & Entertainment)........................... 67,000 466,291
Rio Tinto PLC (Materials)................................. 16,000 249,112
Royal Bank of Scotland Group PLC (Finance)................ 91,070 1,420,751
Safeway PLC
(Consumer Discretionary)................................ 15,000 50,562
Shell Transport & Trading Co. PLC (Energy)................ 209,150 1,713,661
SmithKline Beecham PLC (Healthcare)....................... 44,300 606,962
Standard Chartered PLC (Finance).......................... 15,000 202,481
Tesco PLC
(Consumer Discretionary)................................ 29,300 99,677
Tomkins PLC
(Multi-industry)........................................ 58,744 180,408
Unilever PLC
(Consumer Staples)...................................... 22,214 133,502
United News & Media PLC
(Information & Entertainment)........................... 8,400 109,205
Vodafone AirTouch PLC (Information Technology)............ 703,460 3,220,043
WPP Group PLC
(Information & Entertainment)........................... 30,000 483,433
-------------
17,908,636
-------------
UNITED STATES--2.2%
Bookham Technology PLC ADR+
(Information Technology)................................ 1,880 97,760
Elan Corp. PLC ADR+ (Healthcare).......................... 15,400 660,275
Embratel Participacoes SA ADR
(Information Technology)................................ 8,200 184,500
Grupo Iusacell SA de CV ADR+
(Information & Entertainment)........................... 3,400 54,188
IMPSAT Fiber Networks, Inc.+
(Information Technology)................................ 4,568 72,231
NTL, Inc.+
(Information Technology)................................ 5,510 421,515
Partner Communication Co. Ltd. ADR+
(Information Technology)................................ 13,410 143,319
</TABLE>
67
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
UNITED STATES (CONTINUED)
SmartForce PLC ADR+ (Information Technology).............. 3,287 $ 156,954
Tele Norte Leste Participacoes SA ADR (Utilities)......... 6,838 121,802
Telekomunikacja Polska SA GDR*
(Information Technology)................................ 20,287 148,834
UnitedGlobalCom, Inc., Class A+
(Information & Entertainment)........................... 5,393 286,503
UTStarcom, Inc.+
(Information Technology)................................ 1,254 59,565
Videsh Sanchar Nigam Ltd. GDR
(Information Technology)................................ 6,300 117,495
Videsh Sanchar Nigam Ltd. GDR*
(Information Technology)................................ 1,200 22,680
-------------
2,547,621
-------------
TOTAL COMMON STOCK
(cost $85,779,634)........................................ 105,210,396
-------------
PREFERRED STOCK--2.2%
AUSTRALIA--0.4%
News Corp. Ltd.
(Information & Entertainment)........................... 42,188 453,828
-------------
BRAZIL--1.3%
Banco Itau SA+ (Finance).................................. 510,000 38,133
Petroleo Brasileiros SA (Energy).......................... 1,293,000 308,014
Telecomunicacoes Brasileiras SA ADR
(Information Technology)................................ 8,789 1,038,750
Telecomunicacoes de Sao
Paulo SA
(Information Technology)................................ 2,076,771 51,750
Telesp Cellular Participacoes SA
(Information Technology)................................ 1,330,808 23,882
-------------
1,460,529
-------------
GERMANY--0.4%
SAP AG
(Information Technology)................................ 870 512,910
-------------
HUNGARY--0.1%
OTP Bank (Finance)........................................ 2,500 110,811
-------------
TOTAL PREFERRED STOCK
(cost $2,177,542)......................................... 2,538,078
-------------
<CAPTION>
CONTRACTS/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
PUT OPTIONS--0.1%(2)
UNITED STATES--0.1%
Currency Option Long Euro/Short USD
exp 5/00 @ $99.......................................... 2,000 $ 26,480
Nikkei 225 Index
exp 6/00 @ $19,727(1)................................... 5 3,164
Nikkei 225 Index
exp 6/00 @ $20,239(1)................................... 7 8,478
Nikkei 225 Index
exp 6/00 @ $20,923(1)................................... 15 8,637
Nikkei 225 Index
exp 6/00 @ $20,434(1)................................... 7 4,162
-------------
TOTAL PUT OPTIONS
(cost $265,709)........................................... 50,921
-------------
TOTAL INVESTMENT SECURITIES--95.2%
(cost $88,222,885)........................................ 107,799,395
-------------
SHORT-TERM SECURITIES--1.6%
Cayman Island Time Deposit with State Street Bank and
Trust Co.
4.25% due 05/01/00
(cost $1,809,000)....................................... $ 1,809 1,809,000
-------------
REPURCHASE AGREEMENT--2.0%
Agreement with State Street Bank & Trust Co., bearing
4.75%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $2,286,905, collateralized by $2,605,000 U.S.
Treasury Bond 5.25% due 11/15/28 approximate aggregate
value $2,334,450
(cost $2,286,000)....................................... 2,286 2,286,000
-------------
TOTAL INVESTMENTS--
(cost $92,317,885)........................................ 98.8% 111,894,395
Other assets less liabilities--............................. 1.2 1,339,707
------------- -------------
NET ASSETS-- 100.0% $ 113,234,102
============= =============
</TABLE>
------------------
+ Non-income producing security
* Resale restricted to qualified institutional buyers
ADR ("American Depositary Receipt")
GDR ("Global Depositary Receipt")
EUR - Euro Currency
(1) Fair valued security, see Note 2
(2) 1 option contract equals 100 shares
See Notes to Financial Statements
68
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
OPEN COVERED WRITTEN CALL OPTIONS+
<TABLE>
<CAPTION>
EXPIRATION STRIKE
CALL OPTIONS CONTRACTS(2) DATE PRICE VALUE
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
Currency Option Long Euro/Short
USD................................ 2,000 May 2000 $96.00 $(19,920)
Currency Option Long Euro/Short
USD................................ 1,500 May 2000 0.90 (10,350)
--------
Total Open Covered Written Call
Options
(proceeds $28,484)................. $(30,270)
========
</TABLE>
69
<PAGE>
STYLE SELECT SERIES LOGO
Focus Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--91.9%
AEROSPACE & MILITARY TECHNOLOGY--3.3%
United Technologies Corp.................................. 888,000 $ 55,222,500
--------------
BROADCASTING & MEDIA--1.0%
Comcast Corp., Class A+................................... 394,785 15,816,074
--------------
COMMUNICATION EQUIPMENT--3.4%
Ericsson L.M. Telecommunications Co., ADR Class B......... 556,400 49,206,625
QUALCOMM, Inc.+........................................... 66,742 7,237,336
--------------
56,443,961
--------------
COMPUTERS & BUSINESS EQUIPMENT--3.3%
Hewlett-Packard Co........................................ 403,800 54,513,000
--------------
COMPUTER SOFTWARE--14.1%
Adobe Systems, Inc........................................ 287,000 34,709,063
Cisco Systems, Inc.+...................................... 1,350,200 93,606,834
EMC Corp.+................................................ 410,861 57,084,000
Microsoft Corp.+.......................................... 700,000 48,825,000
--------------
234,224,897
--------------
ELECTRONICS--13.9%
Applied Materials, Inc.+.................................. 600,000 61,087,500
Flextronics International Ltd.+........................... 1,283,000 90,130,750
Sony Corp. ADR............................................ 124,383 28,063,914
Texas Instruments, Inc.................................... 320,400 52,185,150
--------------
231,467,314
--------------
ENERGY SERVICES--3.5%
Halliburton Co............................................ 1,300,000 57,443,750
--------------
FINANCIAL SERVICES--6.6%
Citigroup, Inc............................................ 1,850,200 109,971,262
--------------
HOUSEHOLD PRODUCTS--4.4%
Kimberly-Clark Corp....................................... 78,489 4,557,268
Warner-Lambert Co.(1)..................................... 600,000 68,287,500
--------------
72,844,768
--------------
HOUSING--2.5%
Home Depot, Inc........................................... 753,200 42,226,275
--------------
INTERNET CONTENT--1.6%
CNET Networks, Inc.+...................................... 750,000 25,921,875
--------------
INTERNET SOFTWARE--6.4%
America Online, Inc.+..................................... 1,786,000 106,825,125
--------------
MEDICAL PRODUCTS--3.2%
Genentech, Inc.+.......................................... 458,382 53,630,694
--------------
MULTI-INDUSTRY--6.6%
Corning, Inc.............................................. 560,000 110,600,000
--------------
RETAIL--3.3%
eBay, Inc.+............................................... 350,000 55,715,625
--------------
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS--14.8%
NTL, Inc.+................................................ 609,125 $ 46,598,062
Qwest Communications International, Inc.+................. 1,031,300 44,732,638
Sprint Corp. (PCS Group)+................................. 1,090,274 59,965,070
Vodafone AirTouch PLC ADR................................. 2,032,240 95,515,280
--------------
246,811,050
--------------
TOTAL INVESTMENT SECURITIES--91.9%
(cost $1,351,617,038)..................................... 1,529,678,170
--------------
SHORT-TERM SECURITIES--9.0%
American Express Credit
5.96% due 5/01/00......................................... $ 23,929 23,929,000
Baus Funding LLC
6.02% due 5/25/00......................................... 10,000 9,959,867
Consolidated Natural Gas Co. 6.08% due 5/02/00.............. 1,400 1,399,763
Dow Chemical Co.
6.00% due 5/11/00......................................... 600 599,000
Federal Home Loan Bank Consolidated Discount Notes 5.75% due
5/01/00................................................... 58,800 58,800,000
Fleet Financial Group, Inc. 6.01% due 5/17/00............... 5,500 5,485,309
Ford Motor Credit Co.
5.28% due 5/01/00......................................... 6,537 6,537,000
General Electric Capital Corp. 5.90% due 5/01/00............ 24,463 24,463,000
MDU Resources Group, Inc. 6.03% due 5/24/00................. 6,100 6,076,500
Motorola Credit Corp.
6.00% due 5/26/00......................................... 10,000 9,958,333
Schering Corp.
5.97% due 5/11/00......................................... 1,600 1,597,347
Toyota Credit De Prior
6.02% due 5/16/00......................................... 2,000 1,994,983
--------------
TOTAL SHORT-TERM SECURITIES
(cost $150,800,102)....................................... 150,800,102
--------------
TOTAL INVESTMENTS --
(cost $1,502,417,140)..................................... 100.9% 1,680,478,272
Liabilities in excess of other assets..................... (0.9) (15,335,445)
------------- --------------
NET ASSETS-- 100.0% $1,665,142,827
============= ==============
</TABLE>
------------------
+ Non-income producing security
ADR ("American Depositary Receipt")
(1) Security is traded with rights attached
See Notes to Financial Statements
70
<PAGE>
STYLE SELECT SERIES LOGO
Focused Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--88.0%
AUTOMOTIVE--3.1%
Ford Motor Co............................................. 41,695 $ 2,280,195
-------------
BANKS--5.6%
Bank of New York Co., Inc................................. 60,095 2,467,651
Summit Bancorp............................................ 65,000 1,649,375
-------------
4,117,026
-------------
CHEMICALS--3.2%
Bush Boake Allen, Inc.+................................... 77,700 2,321,288
-------------
COMPUTER SOFTWARE--3.1%
DST Systems, Inc.+........................................ 30,000 2,225,625
-------------
ELECTRIC UTILITIES--3.2%
FPL Group, Inc.(1)........................................ 51,000 2,304,563
-------------
ELECTRONICS--11.4%
Advanced Micro Devices, Inc.+............................. 23,700 2,079,675
Analogic Corp............................................. 30,000 1,220,625
Emerson Electric Co.(1)................................... 30,000 1,646,250
Silicon Valley Group, Inc.+............................... 119,000 3,391,500
-------------
8,338,050
-------------
FINANCIAL SERVICES--5.3%
Liberty Financial Cos., Inc............................... 113,000 2,118,750
Student Loan Corp......................................... 43,000 1,720,000
-------------
3,838,750
-------------
FOREST PRODUCTS--4.7%
Minnesota Mining & Manufacturing Co....................... 40,000 3,460,000
-------------
GAS & PIPELINE UTILITIES--5.5%
AGL Resources, Inc........................................ 90,500 1,583,750
El Paso Energy Corp....................................... 57,110 2,427,175
-------------
4,010,925
-------------
HEALTH SERVICES--9.5%
Columbia/HCA Healthcare Corp.............................. 79,800 2,269,313
PAREXEL International Corp.+.............................. 244,000 2,196,000
Wellpoint Health Networks, Inc.+.......................... 33,650 2,481,687
-------------
6,947,000
-------------
HOUSING--3.3%
D.R. Horton, Inc.......................................... 185,000 2,393,438
-------------
INSURANCE--10.0%
Enhance Financial Services Group, Inc..................... 173,000 1,751,625
First American Financial Corp............................. 205,000 3,164,687
LaSalle Re Holdings Ltd................................... 182,000 2,388,750
-------------
7,305,062
-------------
MACHINERY--1.8%
Alamo Group, Inc.......................................... 120,200 1,307,175
-------------
REAL ESTATE COMPANIES--3.6%
Catellus Development Corp.+............................... 201,000 2,613,000
-------------
RETAIL--3.8%
CVS Corp.................................................. 64,360 2,799,660
-------------
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS--2.0%
Nokia Corp., Class A ADR.................................. 26,000 $ 1,478,750
-------------
TELEPHONE--8.9%
Bell Atlantic Corp.(1).................................... 37,975 2,250,019
MCI WorldCom, Inc.+....................................... 53,460 2,429,088
Sprint Corp............................................... 30,000 1,845,000
-------------
6,524,107
-------------
TOTAL COMMON STOCK
(cost $59,605,771)........................................ 64,264,614
-------------
PREFERRED STOCK--3.7%
INSURANCE--3.7%
Metlife Capital Trust I convertible 8.00%
(cost $2,380,105)....................................... 47,600 2,680,475
-------------
TOTAL INVESTMENT SECURITIES--91.7%
(cost $61,985,876)........................................ 66,945,089
-------------
REPURCHASE AGREEMENTS--9.4%
Agreement with State Street Bank and Trust Co., bearing
4.75%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $1,982,785 collateralized by $1,750,000 U.S.
Treasury Bond 10.75% due 05/15/03 approximate aggregate
value $2,026,409
(cost $1,982,000)....................................... $ 1,982 1,982,000
Agreement with State Street Bank and Trust Co., bearing
4.75%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $2,139,847 collateralized by $1,830,000 U.S.
Treasury Bond 7.88% due 02/15/21 approximate aggregate
value $2,182,582
(cost $2,139,000)....................................... 2,139 2,139,000
Agreement with State Street Bank and Trust Co., bearing
4.75%, dated 04/28/00 to be repurchased 05/01/00 in the
amount of $2,783,101 collateralized by $2,605,000 U.S.
Treasury Bond 6.88% due 08/15/25 approximate aggregate
value
(cost $2,838,327)....................................... 2,782 2,782,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $6,903,000)......................................... 6,903,000
-------------
TOTAL INVESTMENTS--
(cost $68,888,876)........................................ 101.1% 73,848,089
Liabilities in excess of other assets..................... (1.1) (809,208)
------------- -------------
NET ASSETS-- 100.0% $ 73,038,881
============= =============
</TABLE>
------------------
+ Non-income producing security
ADR "American Depositary Receipt"
(1) Security is traded with rights attached
71
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
SunAmerica Style Select Series, Inc. (the "Fund") is an open-end management
investment company organized as a Maryland corporation on July 3, 1996. The Fund
is managed by SunAmerica Asset Management Corp. ("SunAmerica"), an indirect
wholly-owned subsidiary of American International Group, Inc. The Fund currently
offers ten separate investment portfolios (each, a "Portfolio"). The assets of
each Portfolio are normally allocated among at least three investment advisers
(each, an "Adviser") with the exception of the Focused Growth and Income and
International Portfolios, each of which will be independently responsible for
advising its respective portion of the Portfolio's assets. The investment
objective for each of the Portfolios is as follows:
LARGE-CAP GROWTH seeks long-term growth of capital by investing generally in
equity securities of large-sized companies.
MID-CAP GROWTH seeks long-term growth of capital by investing generally in
equity securities of medium-sized companies.
AGGRESSIVE GROWTH seeks long-term growth of capital by investing generally in
equity securities of small and medium-sized companies.
FOCUSED GROWTH AND INCOME seeks long-term growth of capital and a reasonable
level of current income by investing generally in equity securities of
large-sized companies.
LARGE-CAP VALUE seeks long-term growth of capital by investing in equity
securities of large-sized companies using a "value" style of investing.
VALUE seeks long-term growth of capital by investing in equity securities using
a "value" style of investing.
SMALL-CAP VALUE seeks long-term growth of capital by investing in equity
securities of small-sized companies using a "value" style of investing.
INTERNATIONAL EQUITY seeks long-term growth of capital by investing in equity
securities of issuers in countries other than the United States.
FOCUS seeks long-term growth of capital by investing generally in equity
securities.
FOCUSED VALUE seeks long-term growth of capital by investing generally in equity
securities.
Each Portfolio offers multiple classes of shares. The classes within each
Portfolio are presented in the Statement of Assets and Liabilities. The cost
structure for each class is as follows:
<TABLE>
<S> <C>
Class A shares-- Offered at net asset value per share plus an initial sales
charge. Any purchases of Class A shares in excess of
$1,000,000 will be subject to a contingent deferred sales
charge on redemptions made within one year of purchase.
</TABLE>
72
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<S> <C>
Class B shares-- Offered at net asset value per share without an initial
sales charge, although a declining contingent deferred sales
charge may be imposed on redemptions made within six years
of purchase. Class B shares will convert automatically to
Class A shares on the first business day of the month after
seven years from the issuance of such shares and at such
time will be subject to the lower distribution fee
applicable to Class A shares.
Class II shares-- Offered at net asset value per share plus an initial sales
charge. Certain redemptions made within the first 18 months
of the date of purchase are subject to a contingent deferred
sales charge.
Class Z shares-- Offered at net asset value per share exclusively for sale to
employees participating in the SunAmerica profit sharing and
retirement plan.
</TABLE>
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions. Class A, Class B, and Class II shares each make
distribution and account maintenance and service fee payments under the
distribution plans pursuant to Rule 12b-1 under the Investment Company Act of
1940 (the "Act"), except that Class B, and Class II shares are subject to higher
distribution fee rates. There are no distribution or service fee payments
applicable to Class Z.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with 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 Portfolios in the preparation of
their financial statements:
SECURITY VALUATIONS: Securities that are actively traded in the over-the-counter
market, including listed securities for which the primary market is believed by
the Adviser to be over-the-counter, are valued at the quoted bid price provided
by principal market makers. Securities listed on the New York Stock Exchange
("NYSE") or other national securities exchanges, are valued on the basis of the
last sale price on the exchange on which they are primarily traded. If there is
no sale on that day, then securities are valued at the closing bid price on the
NYSE or other primary exchange for that day. However, if the last sale price on
the NYSE is different than the last sale price on any other exchange, the NYSE
price is used. Securities that are traded on foreign exchanges are ordinarily
valued at the last quoted sales price available before the time when the assets
are valued. If a security's price is available from more than one foreign
exchange, a Portfolio uses the exchange that is the primary market for the
security. Values of portfolio securities primarily traded on foreign exchanges
are already translated into U.S. dollars when received from a quotation service.
Options traded on national securities exchanges are valued as of the close of
the exchange on which they are traded. Futures and options traded on commodities
exchanges are valued at their last sale price as of the close of such exchange.
The Portfolios may make use of a pricing service in the determination of their
net asset values. Securities for which market quotations are not readily
available and other assets are valued at fair value as determined pursuant to
procedures adopted in good faith by the Directors. Short-term investments which
mature in less than 60 days are valued at amortized cost, if their original
maturity was 60 days or less, or by amortizing their value on the 61st day prior
to maturity, if their original term to maturity exceeded 60 days.
REPURCHASE AGREEMENTS: The Portfolios, along with other affiliated registered
investment companies, 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. The Portfolios' custodian takes possession of the collateral
pledged for investments in such repurchase agreements. The underlying
73
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
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 Portfolio 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 Portfolio may be delayed or limited.
Pursuant to exemptive relief granted by the Securities and Exchange Commission,
the Portfolios are permitted to participate in joint repurchase agreement
transactions with other affiliated mutual funds.
As of April 30, 2000, the Aggressive Growth Portfolio and the Focused Growth and
Income Portfolio had a 0.03% and 0.22% undivided interest, respectively, which
represented $56,000 and $368,000, respectively, in principal amount in a joint
repurchase agreement with State Street Bank and Trust Co. As of such date the
repurchase agreement in the joint account and the collateral therefore were as
follows:
State Street Bank and Trust Co. Repurchase Agreement, 5.62% dated 4/28/00, in
the principal amount of $164,508,000 repurchase price $164,585,045 due 5/01/00,
collateralized by $2,970,000 U.S. Treasury Note 6.63% due 4/30/02, $40,250,000
U.S. Treasury Note 5.38% due 2/15/01, $25,280,000 U.S. Treasury Note 4.00% due
10/31/00, $49,115,000 U.S. Treasury Note 5.63% due 5/15/08, and $25,730,000 U.S.
Treasury Note 6.13% due 8/15/07 approximate aggregate value $167,819,701.
As of April 30, 2000, the Aggressive Growth Portfolio and the Focused Growth and
Income Portfolio had a 15.33% and 5.33% undivided interest, respectively, which
represented $23,000,000 and $8,000,000, respectively, in principal amount in a
joint repurchase agreement with PaineWebber, Inc. As of such date the repurchase
agreement in the joint account and the collateral therefore were as follows:
PaineWebber, Inc. Repurchase Agreement, 5.60% dated 4/28/00, in the principal
amount of $150,000,000 repurchase price $150,070,000 due 5/01/00, collateralized
by $50,000,000 U.S. Treasury Strip 9.38% due 2/15/06, $50,000,000 U.S. Treasury
Strip 7.25% due 5/15/16, and $24,950,000 U.S. Treasury Strip 8.75% due 5/15/17
approximate aggregate value $153,817,510.
As of April 30, 2000, the Large Cap Value Portfolio had a 0.20% undivided
interest, which represented $600,000, in principal amount in a joint repurchase
agreement with Lehman Brothers. As of such date the repurchase agreement in the
joint account and the collateral therefore were as follows:
Lehman Brothers Repurchase Agreement, 5.73% dated 4/28/00, in the principal
amount of $296,715,000 repurchase price $296,856,681 due 5/01/00, collateralized
by $175,476,000 U.S. Treasury Note 8.75% due 8/15/20, $140,912,000 U.S. Treasury
Bond zero coupon due 11/15/22, $95,755,000 U.S. Treasury Bond zero coupon due
11/15/24, $38,805,000 U.S. Treasury Bond zero coupon 5/15/11, $6,285,000 U.S.
Treasury Bond zero coupon due 5/15/08, $340,746,000 U.S. Treasury Bond zero
coupon due 5/15/17 and $176,334,000 U.S. Treasury Bond zero coupon due 2/15/19
approximate aggregate value $306,331,737.
SECURITIES TRANSACTIONS, INVESTMENT INCOME, EXPENSES, DIVIDENDS AND
DISTRIBUTIONS TO SHAREHOLDERS: As customary in the mutual fund industry,
securities transactions are recorded on a trade date basis. Realized gains and
losses on sales of investments are calculated on the identified cost basis.
Interest income is recorded on the accrual basis; dividend income is recorded on
the ex-dividend date. Portfolios investing in foreign securities may be subject
74
<PAGE>
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NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
to taxes imposed by countries in which they invest. Such taxes are generally
based on either income or gains earned or repatriated. The Portfolios accrue
such taxes when the related income is earned. The Portfolios amortize premiums
and accrue discounts including original issue discounts for federal income tax
purposes.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses, is 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).
Expenses common to all Portfolios, not directly related to individual
Portfolios, are allocated among the Portfolios based upon their relative net
asset value or other appropriate methods.
The Portfolios issue and redeem their shares, invest in securities and
distribute dividends from net investment income and net realized gains which are
paid in cash or are reinvested at the discretion of the shareholders. These
activities are reported in the Statement of Changes in Net Assets.
Dividends from net investment income and capital gain distributions, if any, are
paid annually. The Portfolios 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 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 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.
For the year ended October 31, 1999, the following reclassifications arising
from book/tax differences were primarily the result of reclassifications due to
net operating losses.
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED
UNDISTRIBUTED UNDISTRIBUTED PAID
NET REALIZED NET INVESTMENT IN
GAIN/LOSS INCOME/LOSS CAPITAL
-------------- -------------- --------------
<S> <C> <C> <C>
Large-Cap Growth Portfolio.............. (2) 1,135,950 (1,135,948)
Mid-Cap Growth Portfolio................ (1,939,165) 1,948,144 (8,979)
Aggressive Growth Portfolio............. (2,967,241) 2,979,077 (11,836)
Focused Growth and Income Portfolio..... (298,011) 305,248 (7,237)
Large-Cap Value Portfolio............... (76,240) 77,315 (1,075)
Value Portfolio......................... 9,580 (11,259) 1,679
Small-Cap Value Portfolio............... 31,713 18,405 (50,118)
International Equity Portfolio.......... 961,759 267,962 (1,229,721)
Focus Portfolio......................... (3,218,478) 4,225,626 (1,007,148)
</TABLE>
FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are maintained
in U.S. dollars. Assets and liabilities denominated in foreign currencies and
commitments under forward foreign currency contracts are translated into
U.S. dollars at the mean of the quoted bid and asked prices of such currencies
against the U.S. dollar.
The Fund does 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 fiscal year-end. Similarly, the Fund does
75
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STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
not isolate the effect of changes in foreign exchange rates from the changes in
the market prices of portfolio securities sold during the year.
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 a Portfolio's 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 portfolios 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 Portfolio as unrealized gain or loss.
On settlement date, the Portfolio 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 such a contract the Portfolios are required to pledge to the broker an
amount of cash or U.S. government securities equal to the minimum "initial
margin" requirements of the exchange on which the futures contract is traded.
The Portfolios' activities in futures contracts are for hedging purposes and are
conducted through regulated exchanges which do not result in counterparty credit
risks. A Portfolio's 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 Portfolios agree to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as "variation margin" and are recorded by the
Portfolios 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 Portfolios 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 Portfolio for the purchase of a call or a put option is included in the
Portfolio'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 Portfolio writes a call or a put option, an amount equal to the premium
received by the Portfolio is included in the Portfolio'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 Portfolio has
written either expires on its stipulated expiration date, or if the Portfolio
enters into a closing purchase transaction, the Portfolio 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
76
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
the liability related to such option is extinguished. If a call option which the
Portfolio has written is exercised, the Portfolio 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
Portfolio has written is exercised, the amount of the premium originally
received reduces the cost basis of the security which the Portfolio purchased
upon exercise of the option.
For the six months ended April 30, 2000, transactions in written option
contracts were as follows:
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH INTERNATIONAL EQUITY
PORTFOLIO PORTFOLIO
----------------------- ---------------------
CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Written option contracts as of 10/31/99..................... (29) $ (37,703) -- $ --
Options written during the period........................... (2,046) (4,897,038) (12,430) (84,682)
Written options closed during the period.................... 2,009 3,157,725 -- --
Written options expired during the period................... -- -- 8,930 56,198
Net realized gain on written options closed................. -- 1,562,886 -- --
------ ----------- ------- --------
Written option contracts as of 4/30/00...................... (66) $ (214,130) (3,500) $(28,484)
====== =========== ======= ========
</TABLE>
<TABLE>
<CAPTION>
FOCUSED
GROWTH AND INCOME
PORTFOLIO FOCUS PORTFOLIO
-------------------- -----------------------
CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- -------- --------- -----------
<S> <C> <C> <C> <C>
Written options contracts as of 10/31/99.................... -- $ -- -- $ --
Options written during the period........................... (6,600) (120,268) (530) (966,255)
Written options closed during the period.................... 6,600 368,437 530 3,138,459
Net realized loss on written options closed................. -- (248,169) -- (2,172,204)
------ -------- ---- -----------
Written options contracts as of 4/30/00..................... -- $ -- -- $ --
====== ======== ==== ===========
</TABLE>
ORGANIZATIONAL EXPENSES: Expenses incurred by SunAmerica in connection with the
organization of new Portfolios or new classes of shares are being amortized on a
straight line basis by the Portfolios over a period not to exceed 60 months from
the date the Portfolios commenced operations.
NOTE 3. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT, DISTRIBUTION AGREEMENT AND
SERVICES AGREEMENT
The Fund, on behalf of each Portfolio, has entered into an Investment Advisory
and Management Agreement (the "Agreement") with SunAmerica. Under the Agreement,
SunAmerica provides continuous supervision of the respective Portfolios and
administers their corporate affairs, subject to general review by the Board of
Directors (the "Directors"). In connection therewith, SunAmerica furnishes the
Fund with office facilities, maintains certain of the Fund's books and records,
and pays for the salaries and expenses of all personnel, including officers of
the Fund who are employees of SunAmerica and its affiliates. The annual rate of
the investment advisory and management fee payable by each Portfolio to
SunAmerica as full compensation for services and facilities furnished to the
Fund is as follows: 1.00% of the average daily net assets of the Large-Cap
Growth, Mid-Cap Growth, Aggressive Growth, Focused Growth and Income, Large-Cap
Value, Value, Small-Cap Value and Focused Value Portfolios, respectively, 1.10%
of the average daily net assets of the International Equity Portfolio, and .85%
of the average daily net assets of the Focus Portfolio.
77
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NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
The organizations described below act as Advisers to the Fund pursuant to
Subadvisory Agreements with SunAmerica. Under the Subadvisory Agreements, the
Advisers manage the investment and reinvestment of the assets of the respective
Portfolios for which they are responsible. Each of the following Advisers is
independent of SunAmerica (with the exception of the Mid-Cap Growth, Aggressive
Growth and Focused Growth and Income Portfolios for which SunAmerica acts as an
Adviser) and discharges its responsibilities subject to the policies of the
Directors and the oversight and supervision of SunAmerica, which pays the
Advisers' fees.
<TABLE>
<S> <C>
Large-Cap Growth Portfolio Janus Capital Corporation ("Janus")
Jennison Associates LLC ("Jennison")
Montag & Caldwell, Inc. ("Montag & Caldwell")
Mid-Cap Growth Portfolio Miller Anderson & Sherrerd, LLP ("MAS")
SunAmerica
T. Rowe Price Associates, Inc. ("T. Rowe
Price")
Aggressive Growth Portfolio Janus
SunAmerica
Credit Suisse Asset Management, LLC ("CSAM")
Focused Growth and Income Portfolio Marsico Capital Management, LLC ("Marsico")
SunAmerica
Large-Cap Value Portfolio Thornburg Investment Management ("Thornburg")
Davis Selected Advisers, L.P. ("Davis")
Wellington Management
Value Portfolio Davis
Neuberger & Berman, LLC ("Neuberger & Berman")
American Century Investment Management, Inc.
("American Century")
Small-Cap Value Portfolio Berger Associates, Inc. ("Berger")
Lazard Asset Management ("Lazard")
Third Avenue Advisers ("Third Avenue")
International Equity Portfolio Rowe-Price Fleming International, Inc.
("Rowe-Fleming")
Bankers Trust Company ("BT")
Focus Portfolio Fred Alger Management, Inc. ("Alger")
Jennison
Marsico
Focused Value Portfolio American Century
Third Avenue
Thornburg
</TABLE>
Effective November 1, 1999, SunAmerica assumed the role as subadvisor of the
Mid-Cap Growth Portfolio from Wellington Management Co., LLP. Effective February
1, 2000, Thornburg assumed the role as subadvisor of the Large-Cap Value
Portfolio from David L. Babson & Co., Inc. Effective January 19, 2000, Fred
Alger assumed the
78
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STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
role as subadvisor of the Focus Portfolio from Bramwell Capital Management, Inc.
Warburg Pincus Asset Management, Inc. changed their name to Credit Suisse Asset
Management, LLC.
Each Adviser is paid monthly by SunAmerica a fee equal to a percentage of the
average daily net assets of the Portfolio allocated to the Adviser. For the six
months ended April 30, 2000, SunAmerica paid the Advisers for each Portfolio the
following, expressed as an annual percentage of the average daily net assets of
each Portfolio: Large-Cap Growth Portfolio, .44%; Mid-Cap Growth Portfolio,
.34%; Aggressive Growth Portfolio, .34%; Focused Growth and Income Portfolio,
.22%; Large-Cap Value Portfolio, .43%; Value Portfolio, .50%; Small-Cap Value
Portfolio, .55%; International Equity Portfolio, .62%; Focus Portfolio, .40%;
and Focused Value Portfolio, .50%. SunAmerica has agreed to waive fees or
reimburse expenses, if necessary, to keep annual operating expenses at or below
the following percentages of each Portfolio's average net assets: Large-Cap
Growth Portfolio, Mid-Cap Growth Portfolio, Aggressive Growth Portfolio,
Large-Cap Value Portfolio, Value Portfolio and Small-Cap Value Portfolio 1.78%
for Class A shares and 2.43% for Class B shares and Class II shares,
respectively. International Equity Portfolio 2.03% for Class A shares and 2.68%
for Class B and Class II shares and 1.46% for Class Z shares. Aggressive Growth
Portfolio, Large-Cap Value Portfolio, Value Portfolio and Small-Cap Value
Portfolio 1.21% for Class Z shares. Focused Growth and Income Portfolio, and
Focus Portfolio 1.45% for Class A shares and 2.10% for Class B shares and
Class II shares. Focus Portfolio .88% for Class Z shares. Focused Value 1.55%
for Class A shares and 2.20% for Class B and II shares. SunAmerica also may
waive or reimburse additional amounts to increase the investment return to a
Portfolio's investors. Further, any waivers or reimbursements made by SunAmerica
with respect to a Portfolio are subject to recoupment from that Portfolio within
the following two years, provided that the Portfolio is able to effect such
payment to SunAmerica and remain in compliance with the foregoing expense
limitations.
At April 30, 2000, expenses previously waived or reimbursed by SunAmerica that
are subject to recoupment are as follows:
<TABLE>
<CAPTION>
MANAGEMENT OTHER
FEES EXPENSES
REIMBURSED REIMBURSED
-------------- --------------
<S> <C> <C>
Large-Cap Growth A...................... $ 121,554 $ 14,786
Large-Cap Growth B...................... $ 134,316 $ 27,244
Large-Cap Growth II..................... $ 39,631 $ 32,683
Mid-Cap Growth A........................ $ 80,504 $ 7,774
Mid-Cap Growth B........................ $ 157,451 $ 11,886
Mid-Cap Growth II....................... $ 28,942 $ 20,578
Aggressive Growth A..................... $ 137,647 $ 20,787
Aggressive Growth B..................... $ 170,474 $ 5,614
Aggressive Growth II.................... $ 29,172 $ 11,761
Aggressive Growth Z..................... $ -- $ 40,113
Focused Growth and Income A............. $ 186,998 $ 9,917
Focused Growth and Income B............. $ 193,745 $ 27,820
Focused Growth and Income II............ $ 74,896 $ 30,539
Large-Cap Value A....................... $ 83,655 $ 5,825
Large-Cap Value B....................... $ 104,254 $ 5,530
Large-Cap Value II...................... $ 24,674 $ 20,474
Large-Cap Value Z....................... $ -- $ 41,679
<CAPTION>
MANAGEMENT OTHER
FEES EXPENSES
REIMBURSED REIMBURSED
-------------- --------------
<S> <C> <C>
Value A................................. $ 127,596 $ 24,179
Value B................................. $ 202,782 $ 23,826
Value II................................ $ 24,703 $ 27,578
Value Z................................. $ -- $ 40,015
Small-Cap Value A....................... $ 99,726 $ 5,282
Small-Cap Value B....................... $ 130,688 $ 8,604
Small-Cap Value II...................... $ 34,042 $ 17,231
Small-Cap Value Z....................... $ 347 $ 38,234
International Equity A.................. $ 123,451 $ 13,556
International Equity B.................. $ 216,657 $ 22,834
International Equity II................. $ 37,093 $ 18,714
International Equity Z.................. $ -- $ 37,954
Focus A................................. $ 283,190 $ 30,299
Focus B................................. $ 426,545 $ 27,648
Focus II................................ $ 396,505 $ 32,780
Focus Z................................. $ 4,478 $ 13,361
Focused Value A......................... $ 52,203 $ 913
Focused Value B......................... $ 28,926 $ 4,147
Focused Value II........................ $ 60,972 $ 268
</TABLE>
79
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
At April 30, 2000, the amounts repaid to the Adviser which are included in the
management fee along with the remaining balance subject to recoupment are as
follows:
<TABLE>
<CAPTION>
BALANCE
AMOUNT SUBJECT TO
RECOUPED RECOUPMENT
-------------- --------------
<S> <C> <C>
Large-Cap Growth Portfolio--Class A..... $ 5,508 $ 125,497
Large-Cap Growth Portfolio--Class B..... $ 13,704 $ 218,288
Large-Cap Growth Portfolio--Class II.... $ 5,227 $ 93,540
Mid-Cap Growth Portfolio--Class A....... $ 12,573 $ 87,978
Mid-Cap Growth Portfolio--Class B....... $ 22,384 $ 163,541
Mid-Cap Growth Portfolio--Class II...... $ 4,882 $ 44,788
Aggressive Growth Portfolio--Class A.... $ 38,677 $ 132,350
Aggressive Growth Portfolio--Class B.... $ 121,531 $ 90,715
Aggressive Growth Portfolio--Class II... $ 17,106 $ 37,015
Value Portfolio--Class A................ $ 137 $ 62,074
Value Portfolio--Class B................ $ 1,960 $ 65,873
Value Portfolio--Class II............... $ 522 $ 26,097
International Equity Portfolio--Class
A...................................... $ 6,131 $ 138,306
International Equity Portfolio--Class
B...................................... $ 8,777 $ 241,073
International Equity Portfolio--Class
II..................................... $ 557 $ 53,728
</TABLE>
The Fund, on behalf of each Portfolio, has entered into a Distribution Agreement
with SunAmerica Capital Services, Inc. ("SACS" or the "Distributor"), an
indirect wholly-owned subsidiary of SunAmerica Inc. Each Portfolio has adopted a
Distribution Plan (the "Plan") in accordance with the provisions of Rule 12b-1
under the Act. Rule 12b-1 under the Act permits an investment company directly
or indirectly to pay expenses associated with the distribution of its shares
("distribution expenses") in accordance with a plan adopted by the investment
company's Board of Directors. Pursuant to such rule, the Directors and the
shareholders of each class of shares of each Portfolio have adopted Distribution
Plans hereinafter referred to as the "Class A Plan", "Class B Plan", and
"Class II Plan". In adopting the Distribution Plans, the Directors 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 II Plan, the Distributor
receives payments from a Portfolio at an annual rate of up to 0.10%, 0.75% and
0.75%, respectively, of average daily net assets of such Portfolio's Class to
compensate the Distributor and certain securities firms for providing sales and
promotional activities for distributing that class of shares. The distribution
costs for which the Distributor may be reimbursed out of such distribution fees
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 Distribution Plans
provide that each class of shares of each Portfolio may also pay the Distributor
an account maintenance and service fee up to an annual rate of 0.25% of the
aggregate average daily net assets of such class of shares for payments to
broker-dealers for providing continuing account maintenance. Accordingly, for
the six months ended April 30, 2000, SACS received fees (see Statement of
Operations) based upon the aforementioned rates.
80
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
SACS receives sales charges on each Portfolio's Class A and Class II shares,
portions of which are reallowed 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
Portfolio's Class B, and Class II shares. SACS has advised the Portfolios that
for the six months ended April 30, 2000 the proceeds received from sales (and
paid out to affiliated and non-affiliated broker-dealers) and redemptions are as
follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------------------------- --------------
CONTINGENT
AFFILIATED NON-AFFILIATED DEFERRED
SALES CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Large-Cap Growth Portfolio.............. $ 171,012 $ 97,321 $ 46,452 $ 59,992
Mid-Cap Growth Portfolio................ 161,327 86,319 49,520 76,499
Aggressive Growth Portfolio............. 977,544 534,752 299,065 132,469
Focused Growth & Income Portfolio....... 680,003 321,238 261,172 50,437
Large-Cap Value Portfolio............... 71,342 34,619 25,670 64,757
Value Portfolio......................... 121,184 61,895 41,539 215,530
Small-Cap Value Portfolio............... 55,862 23,416 15,141 63,611
International Equity Portfolio.......... 128,871 78,107 29,250 56,092
Focus Portfolio......................... 4,386,168 1,375,246 2,369,903 432,672
Focused Value Portfolio................. 431,647 143,823 208,328 7,556
</TABLE>
<TABLE>
<CAPTION>
CLASS II
--------------------------------------------------------------
CONTINGENT
AFFILIATED NON-AFFILIATED DEFERRED
SALES CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Large-Cap Growth Portfolio.............. $ 85,080 $ 27,584 $ 57,496 $ 4,231
Mid-Cap Growth Portfolio................ 100,422 38,100 62,322 2,700
Aggressive Growth Portfolio............. 808,947 156,455 652,492 11,757
Focused Growth & Income Portfolio....... 288,620 179,306 109,314 9,514
Large-Cap Value Portfolio............... 59,638 16,434 43,204 4,730
Value Portfolio......................... 27,827 11,599 16,228 1,805
Small-Cap Value Portfolio............... 36,615 12,176 24,439 2,911
International Equity Portfolio.......... 67,227 38,808 28,419 2,849
Focus Portfolio......................... 3,938,236 884,866 3,053,370 110,081
Focused Value Portfolio................. 325,407 85,136 240,271 12,453
</TABLE>
81
<PAGE>
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NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
The Fund, on behalf of each Portfolio, has entered into a Service Agreement with
SunAmerica Fund Services, Inc. ("SAFS"), an indirect wholly-owned subsidiary of
SunAmerica Inc. Under the Service Agreement, SAFS performs certain shareholder
account functions by assisting the Portfolios' transfer agent in connection with
the services that it offers to the shareholders of the Portfolios. The Service
Agreement, which permits the Portfolios to compensate SAFS for services rendered
based upon an annual rate of 0.22% of average daily net assets, is approved
annually by the Directors. For the six months ended April 30, 2000, the
Portfolios incurred the following expenses, which are included in transfer agent
fees in the Statement of Operations, to compensate SAFS pursuant to the terms of
the Service Agreement.
<TABLE>
<CAPTION>
PAYABLE
EXPENSE APRIL 30, 2000
------------------------------- -------------------------------
CLASS A CLASS B CLASS II CLASS A CLASS B CLASS II
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Large-Cap Growth
Portfolio.............. $ 36,041 $ 64,993 $ 27,182 $ 6,371 $ 11,316 $ 5,277
Mid-Cap Growth
Portfolio.............. 54,681 97,387 22,971 9,276 16,587 4,608
Aggressive Growth
Portfolio.............. 154,340 224,765 54,456 27,002 38,778 11,338
Focused Growth and Income
Portfolio.............. 51,142 69,558 40,177 9,825 13,425 9,047
Large-Cap Value
Portfolio.............. 16,739 32,431 13,433 2,848 5,530 2,604
Value Portfolio.......... 59,659 94,821 14,071 9,327 14,711 2,390
Small-Cap Value
Portfolio.............. 16,406 23,543 9,101 2,651 3,811 1,675
International Equity
Portfolio.............. 39,699 61,384 17,368 6,670 10,393 3,398
Focus Portfolio.......... 306,845 499,027 554,084 62,270 103,318 123,090
Focused Value
Portfolio.............. 19,281 8,757 19,729 3,749 2,362 5,873
</TABLE>
NOTE 4. PURCHASES AND SALES OF INVESTMENT SECURITIES
The cost of purchases and proceeds from sales and maturities of long-term
investments during for the six months ended April 30, 2000 were as follows:
<TABLE>
<CAPTION>
FOCUSED GROWTH
LARGE-CAP MID-CAP GROWTH AGGRESSIVE GROWTH AND INCOME LARGE-CAP VALUE
GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- -------------- ----------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Purchases (excluding U.S.
government securities)................. $ 36,838,433 $ 166,015,918 $ 285,002,420 $ 152,372,406 $ 32,475,513
Sales (excluding U.S.
government securities)................. 29,703,817 128,078,578 217,162,162 82,062,176 32,417,320
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP VALUE INTERNATIONAL FOCUSED VALUE
VALUE PORTFOLIO PORTFOLIO EQUITY PORTFOLIO FOCUS PORTFOLIO PORTFOLIO
--------------- --------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Purchases (excluding U.S. government
securities)............................ $ 71,288,121 $ 15,142,708 $ 45,857,338 $1,880,878,024 $ 90,103,526
Sales (excluding U.S. government
securities)............................ 98,622,030 16,732,478 36,146,550 1,181,931,322 28,549,805
</TABLE>
82
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
NOTE 5. TRANSACTIONS WITH AFFILIATES
The following Portfolios incurred brokerage commissions with affiliated brokers:
<TABLE>
<CAPTION>
FOCUSED GROWTH INTERNATIONAL FOCUSED
AND INCOME VALUE EQUITY FOCUS VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Shelby Cullom Davis & Co...... $ -- $ 360 $ -- $ -- $ --
J.P. Morgan Securities,
Inc.......................... -- 145 -- -- 2,235
Deutsche Bank Group........... -- -- 125 -- --
Jardine Fleming Securities
Ltd.......................... -- -- 1,948 -- --
Montgomery Securities......... 3,827 -- -- 11,150 --
</TABLE>
As disclosed in the investment portfolios, certain Portfolios own common stock
issued by American International Group, Inc. ("AIG"). Effective January 1, 1999,
SunAmerica, the investment adviser, became a wholly owned subsidiary of AIG.
NOTE 6. FEDERAL INCOME TAXES
The Portfolios intend to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute all of their
taxable income, including any net realized gain on investments, to their
shareholders. Therefore, no federal tax provision is required.
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:
<TABLE>
<CAPTION>
FOCUSED GROWTH
LARGE-CAP GROWTH MID-CAP GROWTH AGGRESSIVE GROWTH AND INCOME LARGE-CAP VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- -------------- ----------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Cost.................................... $ 94,894,128 $ 148,833,314 $ 332,427,209 $ 169,438,067 $ 56,936,408
============= ============= ============= ============= =============
Appreciation............................ $ 36,063,729 $ 40,653,286 $ 142,449,956 $ 23,938,035 $ 8,656,250
Depreciation............................ (2,731,562) (14,274,046) (20,391,355) (6,647,709) (3,215,211)
------------- ------------- ------------- ------------- -------------
Net unrealized appreciation............. $ 33,332,167 $ 26,379,240 $ 122,058,601 $ 17,290,326 $ 5,441,039
============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP VALUE INTERNATIONAL FOCUSED VALUE
VALUE PORTFOLIO PORTFOLIO EQUITY PORTFOLIO FOCUS PORTFOLIO PORTFOLIO
--------------- --------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Cost.......................... $ 134,001,892 $ 45,438,754 $ 92,317,885 $1,502,417,140 $ 68,888,876
============= ============= ============= ============== =============
Appreciation.................. $ 19,891,738 $ 5,165,418 $ 24,253,041 $ 252,709,483 $ 6,595,010
Depreciation.................. (8,102,062) (4,633,002) (4,676,531) (74,648,351) (1,635,797)
------------- ------------- ------------- -------------- -------------
Net unrealized appreciation... $ 11,789,676 $ 532,416 $ 19,576,510 $ 178,061,132 $ 4,959,213
============= ============= ============= ============== =============
</TABLE>
At October 31, 1999 Small-Cap Value Portfolio had a capital loss carryforward of
$2,386,594 which will expire 2006-2007 and, International Equity Portfolio had a
capital loss carryforward of $1,540,956 which will expire 2006, which are
available to the extent provided in regulations.
Large-Cap Growth Portfolio, Aggressive Growth Portfolio, Value Portfolio,
International Equity Portfolio, and Focus Portfolio utilized capital loss
carryforwards of $1,082,976, $4,430,983, $6,407,836, $4,309,219, and
83
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
$4,898,476, respectively, to offset the Portfolios' net taxable gains realized
and recognized in the year ended October 31, 1999.
NOTE 7. OPEN FORWARD CURRENCY CONTRACTS
At April 30, 2000, the International Equity Portfolio held forward foreign
currency exchange contracts ("forward contracts") in order to hedge against
changes in future foreign exchange rates and enhance return. Forward contracts
involve elements of market risk in excess of the amount reflected in the
Statement of Assets and Liabilities. The Portfolio bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward
contracts. International Equity Portfolio held the following forward currency
contracts at April 30, 2000.
<TABLE>
<CAPTION>
GROSS
CONTRACT IN DELIVERY UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION
---------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
AUD 492,918 USD 300,000 05/08/00 $ 12,115
AUD 250,710 USD 150,000 05/08/00 3,575
CHF 1,657,630 USD 1,000,000 05/25/00 36,218
EUR 1,000,000 JPY 100,795,000 05/17/00 25,952
EUR 1,000,000 JPY 100,457,500 05/17/00 22,817
*EUR 1,000,000 JPY 100,547,500 05/17/00 23,653
EUR 1,000,000 JPY 98,220,000 05/25/00 2,801
EUR 1,000,000 JPY 98,210,000 05/25/00 2,708
EUR 1,613,563 USD 1,500,000 05/25/00 30,220
EUR 1,610,133 USD 1,500,000 05/25/00 33,344
GBP 190,012 USD 300,000 05/08/00 4,143
GBP 94,836 USD 150,000 05/08/00 2,336
GBP 632,843 USD 1,000,000 05/25/00 14,528
GBP 633,754 USD 1,000,000 05/25/00 13,111
JPY 91,642,062 USD 867,880 05/08/00 17,953
JPY 105,115,000 USD 998,148 05/10/00 22,922
JPY 105,370,000 USD 1,000,000 05/10/00 22,408
JPY 1,556,000 USD 14,985 05/17/00 530
JPY 685,000 USD 6,617 05/17/00 254
NOK 2,509,140 USD 300,000 05/08/00 19,913
NOK 1,273,860 USD 150,000 05/08/00 7,803
NZD 615,852 USD 300,000 05/08/00 945
NZD 301,841 USD 150,000 05/08/00 3,427
-------------
323,676
-------------
</TABLE>
84
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
GROSS
CONTRACT IN UNREALIZED
TO DELIVER EXCHANGE FOR DELIVERY DATE DEPRECIATION
----------------- ----------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
USD 1,000,000 CAD 1,476,400 05/25/00 $ (2,374)
USD 1,000,000 CAD 1,475,090 05/25/00 (3,260)
USD 575,000 CHF 949,268 05/08/00 (24,009)
USD 287,500 CHF 469,890 05/08/00 (14,758)
USD 300,000 EUR 308,769 05/08/00 (19,094)
USD 150,000 EUR 155,982 05/08/00 (8,094)
*JPY 200,320,000 EUR 2,000,000 05/17/00 (40,106)
JPY 99,239,000 EUR 1,000,000 05/17/00 (11,498)
USD 575,000 JPY 61,157,000 05/08/00 (7,805)
USD 287,500 JPY 30,485,062 05/08/00 (4,769)
-------------
(135,767)
-------------
Net Unrealized Appreciation 187,909
=============
</TABLE>
----------------
<TABLE>
<S> <C> <C>
* Represents open forward currency
contracts and offsetting or partially
offsetting open forward foreign currency
contracts that do not have additional
market risk but have continued
counterparty settlement risk.
AUD -- Australian Dollar
CAD -- Canadian Dollar
CHF -- Swiss Franc
EUR -- Euro Currency
GBP -- Pound Sterling
JPY -- Japanese Yen
NOK -- Norwegian Krone
NZD -- New Zealand Dollar
USD -- United States Dollar
</TABLE>
85
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
NOTE 8. CAPITAL SHARE TRANSACTIONS
Transactions in shares of each class of each series were as follows:
<TABLE>
<CAPTION>
LARGE-CAP GROWTH PORTFOLIO
-----------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- -------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 391,092 $ 8,025,492 955,893 $ 15,603,668 417,239 $ 8,398,990 1,567,411 $25,184,736
Reinvested
dividends.......... 42,095 809,497 -- -- 72,124 1,366,039 -- --
Shares redeemed..... (305,957) (6,257,016) (465,782) (7,597,190) (315,716) (6,339,328) (609,744) (9,947,519)
--------- ----------- ---------- ------------ -------- ----------- --------- -----------
Net increase........ 127,230 $ 2,577,973 490,111 $ 8,006,478 173,647 $ 3,425,701 957,667 $15,237,217
========= =========== ========== ============ ======== =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------
CLASS II
--------------------------------------------------
FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 453,476 $ 9,156,581 777,065 $ 12,563,735
Reinvested
dividends.......... 28,191 533,653 -- --
Shares redeemed..... (90,441) (1,812,131) (275,945) (4,558,883)
--------- ----------- ---------- ------------
Net increase........ 391,226 $ 7,878,103 501,120 $ 8,004,852
========= =========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
MID-CAP GROWTH PORTFOLIO
-----------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- -------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 911,053 $ 19,710,728 2,253,520 $ 37,907,454 487,310 $10,281,586 1,525,775 $ 25,350,060
Reinvested
dividends.......... 242,454 4,395,701 87,640 1,288,306 417,359 7,395,601 152,206 2,206,988
Shares redeemed..... (844,142) (18,086,806) (2,394,645) (40,438,565) (382,793) (7,965,230) (1,782,873) (29,720,800)
---------- ------------ ---------- ------------ --------- ----------- ---------- ------------
Net increase
(decrease)......... 309,365 $ 6,019,623 (53,485) $ (1,242,805) 521,876 $ 9,711,957 (104,892) $ (2,163,752)
========== ============ ========== ============ ========= =========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------
CLASS II
--------------------------------------------------
FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 542,857 $ 11,466,539 1,398,691 $ 23,421,973
Reinvested
dividends.......... 70,909 1,257,930 17,899 259,890
Shares redeemed..... (106,092) (2,269,833) (1,322,303) (22,084,456)
---------- ------------ ---------- ------------
Net increase........ 507,674 $ 10,454,636 94,287 $ 1,597,407
========== ============ ========== ============
</TABLE>
86
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
-----------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- -------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 1,548,582 $ 51,420,718 1,873,821 $ 43,092,613 1,426,496 $ 46,418,318 1,874,991 $ 42,043,794
Reinvested
dividends.......... 357,444 10,308,675 -- -- 575,071 16,205,493 -- --
Shares redeemed..... (1,041,480) (33,181,651) (1,416,599) (32,954,142) (593,417) (19,246,112) (991,014) (21,938,947)
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
Net increase........ 864,546 $ 28,547,742 457,222 $ 10,138,471 1,408,150 $ 43,377,699 883,977 $ 20,104,847
========== ============ ========== ============ ========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
CLASS II CLASS Z
-------------------------------------------------- -------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 1,322,984 $ 43,673,655 501,298 $ 11,537,832 45,925 $ 1,734,385 8,549 $ 197,777
Reinvested
dividends.......... 98,653 2,779,056 -- -- 2,769 80,760 -- --
Shares redeemed..... (327,530) (10,853,433) (160,336) (3,624,140) (15,082) (585,119) (5,745) (135,199)
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
Net increase........ 1,094,107 $ 35,599,278 340,962 $ 7,913,692 33,612 $ 1,230,026 2,804 $ 62,578
========== ============ ========== ============ ========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
FOCUSED GROWTH AND INCOME PORTFOLIO
-----------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- -------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 1,345,932 $ 27,765,257 1,462,757 $ 22,261,103 1,630,966 $ 32,882,292 1,480,395 $ 22,219,188
Reinvested
dividends.......... 91,821 1,747,359 9,306 124,043 121,779 2,284,575 15,408 203,845
Shares redeemed..... (448,880) (9,180,750) (512,978) (7,527,895) (352,523) (7,119,468) (397,068) (5,800,382)
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
Net increase........ 988,873 $ 20,331,866 959,085 $ 14,857,251 1,400,222 $ 28,047,399 1,098,735 $ 16,622,651
========== ============ ========== ============ ========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------
CLASS II
--------------------------------------------------
FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 1,760,859 $ 35,566,791 897,015 $ 13,510,938
Reinvested
dividends.......... 64,682 1,212,773 2,151 28,463
Shares redeemed..... (156,346) (3,190,816) (166,400) (2,504,119)
---------- ------------ ---------- ------------
Net increase........ 1,669,195 $ 33,588,748 732,766 $ 11,035,282
========== ============ ========== ============
</TABLE>
87
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
LARGE-CAP VALUE PORTFOLIO
-----------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- -------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 269,135 $ 3,788,477 536,741 $ 7,416,875 481,009 $ 6,700,209 1,078,720 $ 14,841,980
Reinvested
dividends.......... 24,508 329,880 5,994 75,283 46,586 618,192 13,092 163,267
Shares redeemed..... (328,675) (4,565,065) (430,408) (5,856,941) (621,311) (8,428,294) (1,076,085) (14,521,640)
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
Net increase
(decrease)......... (35,032) $ (446,708) 112,327 $ 1,635,217 (93,716) $ (1,109,893) 15,727 $ 483,607
========== ============ ========== ============ ========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
CLASS II CLASS Z
-------------------------------------------------- -------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 466,030 $ 6,533,192 545,700 $ 7,541,736 28,674 $ 402,006 4,036 $ 55,588
Reinvested
dividends.......... 18,802 249,513 2,238 27,906 389 5,291 95 1,202
Shares redeemed..... (211,304) (2,863,619) (244,591) (3,332,709) (637) (8,794) (3,535) (48,567)
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
Net increase........ 273,528 $ 3,919,086 303,347 $ 4,236,933 28,426 $ 398,503 596 $ 8,223
========== ============ ========== ============ ========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
VALUE PORTFOLIO
------------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- --------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold....... 448,738 $ 7,478,208 776,261 $ 12,767,145 353,370 $ 5,722,524 796,331 $ 12,955,414
Reinvested
dividends........ 154,190 2,470,123 -- -- 234,181 3,676,646 -- --
Shares redeemed... (1,103,432) (18,206,928) (2,036,821) (33,086,307) (1,503,009) (24,258,355) (2,534,120) (40,681,427)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net decrease...... (500,504) $ (8,258,597) (1,260,560) $(20,319,162) (915,458) $(14,859,185) (1,737,789) $(27,726,013)
========== ============ ========== ============ ========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
CLASS II CLASS Z
-------------------------------------------------- -------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 198,128 $ 3,239,046 279,729 $ 4,561,264 21,389 $ 351,923 8,388 $ 140,517
Reinvested
dividends.......... 30,627 480,839 -- -- 208 3,372 -- --
Shares redeemed..... (212,543) (3,423,211) (524,232) (8,403,002) (4,369) (73,138) (10,723) (178,870)
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
Net increase
(decrease)......... 16,212 $ 296,674 (244,503) $ (3,841,738) 17,228 $ 282,157 (2,335) $ (38,353)
========== ============ ========== ============ ========= ============ ========== ============
</TABLE>
88
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
SMALL-CAP VALUE PORTFOLIO
---------------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- -----------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ --------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 237,730 $ 2,907,811 705,389 $ 8,247,647 216,076 $ 2,600,397 632,998 $ 7,307,720
Reinvested
dividends...... -- -- -- -- -- -- -- --
Shares
redeemed....... (407,322) (4,948,706) (774,635) (8,912,260) (512,896) (6,138,950) (1,092,801) (12,274,195)
---------- ------------ ---------- ------------ ------------- ------------ ---------- ------------
Net decrease.... (169,592) $ (2,040,895) (69,246) $ (664,613) (296,820) $ (3,538,553) (459,803) $ (4,966,475)
========== ============ ========== ============ ============= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
CLASS II CLASS Z
-------------------------------------------------- -----------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
---------------------------------------------------------------------------------------------------------
------------------------ ------------------------ --------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 285,996 $ 3,441,876 315,861 $ 3,656,054 22,270 $ 277,034 8,751 $ 103,187
Reinvested
dividends...... -- -- -- -- -- -- -- --
Shares
redeemed....... (156,736) (1,887,995) (245,438) (2,763,551) (2,388) (29,274) (15,186) (176,844)
---------- ------------ ---------- ------------ ------------- ------------ ---------- ------------
Net increase
(decrease)..... 129,260 $ 1,553,881 70,423 $ 892,503 19,882 $ 247,760 (6,435) $ (73,657)
========== ============ ========== ============ ============= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
---------------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- -----------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ --------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,587,623 $ 26,656,480 4,614,050 $ 60,501,869 708,087 $ 11,802,264 718,626 $ 9,458,419
Reinvested
dividends...... -- -- 7,841 98,642 -- -- 14,042 174,265
Shares
redeemed....... (1,371,361) (23,330,951) (4,890,684) (64,497,428) (530,441) (8,689,981) (1,310,103) (17,143,968)
---------- ------------ ---------- ------------ ------------- ------------ ---------- ------------
Net increase
(decrease)..... 216,262 $ 3,325,529 (268,793) $ (3,896,917) 177,646 $ 3,112,283 (577,435) $ (7,511,284)
========== ============ ========== ============ ============= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
CLASS II CLASS Z
-------------------------------------------------- -----------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ --------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,137,074 $ 19,138,316 795,257 $ 10,419,003 18,040 $ 324,516 2,994 $ 39,173
Reinvested
dividends...... -- -- 2,040 25,318 -- -- 46 586
Shares
redeemed....... (792,319) (13,377,935) (621,680) (8,112,814) (524) (9,350) (12,643) (167,116)
---------- ------------ ---------- ------------ ------------- ------------ ---------- ------------
Net increase
(decrease)..... 344,755 $ 5,760,381 175,617 $ 2,331,507 17,516 $ 315,166 (9,603) $ (127,357)
========== ============ ========== ============ ============= ============ ========== ============
</TABLE>
89
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUS PORTFOLIO
-------------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- ---------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold....... 8,149,492 $193,115,107 8,710,962 $145,884,519 11,785,659 $277,727,617 12,231,833 $205,304,812
Reinvested
dividends........ 39,304 857,223 -- -- 61,636 1,330,102 -- --
Shares redeemed... (2,292,125) (54,410,757) (2,248,697) (38,707,010) (1,542,916) (36,164,827) (1,628,171) (27,561,380)
---------- ------------ ---------- ------------ ---------- ------------ ----------- ------------
Net increase...... 5,896,671 $139,561,573 6,462,265 $107,177,509 10,304,379 $242,892,892 10,603,662 $177,743,432
========== ============ ========== ============ ========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
CLASS II CLASS Z
-------------------------------------------------- ---------------------------------------------------
FOR THE PERIOD
FOR THE SIX MONTHS FOR THE SIX MONTHS JULY 7, 1999*
ENDED APRIL 30, 2000 FOR THE YEAR ENDED ENDED APRIL 30, 2000 THROUGH
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) OCTOBER 31, 1999
------------------------ ------------------------ ------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold....... 16,990,604 $400,961,838 12,102,392 $206,502,140 382,579 $ 9,167,967 148,210 $ 2,689,926
Reinvested
dividends........ 67,292 1,452,165 -- -- 699 15,284 -- --
Shares redeemed... (1,282,299) (30,231,527) (1,192,191) (20,360,820) (24,277) (592,575) (17,328) (313,076)
---------- ------------ ---------- ------------ ---------- ------------ ----------- ------------
Net increase...... 15,775,597 $372,182,476 10,910,201 $186,141,320 359,001 $ 8,590,676 130,882 $ 2,376,850
========== ============ ========== ============ ========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
FOCUSED VALUE PORTFOLIO
---------------------------------------------------------------------------
CLASS A CLASS B CLASS II
----------------------- ------------------------ ------------------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
NOVEMBER 1, 1999+ NOVEMBER 1, 1999+ NOVEMBER 1, 1999+
THROUGH THROUGH THROUGH
APRIL 30, 2000 APRIL 30, 2000 APRIL 30, 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED)
----------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ----------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold......... 4,158,325 $52,543,393 1,158,396 $ 15,088,879 2,824,826 $ 36,856,855
Reinvested
dividends.......... -- -- -- -- -- --
Shares redeemed..... (2,504,810) (32,145,661) (108,937) (1,406,985) (250,633) (3,245,149)
---------- ----------- ---------- ------------ ---------- ------------
Net increase........ 1,653,515 $20,397,732 1,049,459 $ 13,681,894 2,574,193 $ 33,611,706
========== =========== ========== ============ ========== ============
</TABLE>
* Inception of the class
+ Commencement of Operations
90
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2000 (UNAUDITED) -- (CONTINUED)
NOTE 9. DIRECTORS' RETIREMENT PLAN
The Directors (and Trustees) of the SunAmerica Family of Mutual Funds have
adopted the SunAmerica Disinterested Trustees' and Directors' Retirement Plan
(the "Retirement Plan") effective January 1, 1993 for the unaffiliated
Directors. The Retirement Plan provides generally that if a disinterested
Director who has at least 10 years of consecutive service as a Disinterested
Director of any of the SunAmerica mutual funds (an "Eligible Director") retires
after reaching age 60 but before age 70 or dies while a Director, such person
will be eligible to receive a retirement or death benefit from each SunAmerica
mutual fund with respect to which he or she is an Eligible Director. As of each
birthday, prior to the 70th birthday, but in no event for a period greater than
10 years, each Eligible Director will be credited with an amount equal to 50% of
his or her regular fees (excluding committee fees) for services as a
Disinterested Director of each SunAmerica mutual fund for the calendar year in
which such birthday occurs. In addition, an amount equal to 8.5% of any amounts
credited under the preceding clause during prior years, is added to each
Eligible Director's account until such Eligible Trustee reaches his or her 70th
birthday. An Eligible Director may receive any benefits payable under the
Retirement Plan, at his or her election, either in one lump sum or in up to
fifteen annual installments any undistributed amounts shall continue to accrue
interest at 8.5%. As of April 30, 2000, Large-Cap Growth Portfolio, Mid-Cap
Growth Portfolio, Aggressive Growth Portfolio, Focused Growth and Income
Portfolio, Large-Cap Value Portfolio, Value Portfolio, Small-Cap Value
Portfolio, International Equity Portfolio, Focus Portfolio, and Focused Value
Portfolio had accrued $3,287, $7,268, $11,320, $2,545, $2,849, $13,635, $2,724,
$8,918, $9,774, and $207, respectively, for the Retirement Plan, which is
included in accrued expenses on the Statement of Assets and Liabilities, and as
of April 30, 2000 expensed $924, $1,365, $2,681, $783, $615, $2,036, $529,
$1,032, $5,980, and $207, respectively, for the Retirement Plan, which is
included in Directors' fees and expenses on the Statement of Operations.
NOTE 10. COMMITMENTS AND CONTINGENCIES
The SunAmerica Family of Mutual Funds has established committed and uncommitted
lines of credit with State Street Bank and Trust Company, the Funds' custodian.
Interest is payable at the Federal Funds Rate plus 50 basis points on the
committed line and Federal Funds Rate plus 100 basis points on the uncommitted
line of credit. There is also a commitment fee of 8 basis points per day for the
daily unused portion of the committed line of credit. Borrowings under the line
of credit will commence when the Fund's cash shortfall exceeds $100,000.
NOTE 11. SUBSEQUENT EVENTS
Effective May 1, 2000, SunAmerica Asset Management Co. assumed the role as
subadvisor of the Large-Cap Growth Portfolio from Montag & Caldwell, Inc.
91
<PAGE>
SUNAMERICA CAPITAL SERVICES, INC. ----------------
THE SUNAMERICA CENTER BULK RATE
733 THIRD AVENUE U.S. POSTAGE
NEW YORK, NY 10017-3204 PAID
800-858-8850, x5660 Hackensack, NJ
PERMIT NO. 552
----------------
---
AIG Member of American International Group, Inc.
---
www.sunamericafunds.com
MULTI-MANAGED, STYLE-BASED MUTUAL FUNDS
LARGE-CAP VALUE PORTFOLIO [LOGO] [LOGO] [LOGO]
VALUE PORTFOLIO [LOGO] [LOGO] [LOGO]
SMALL-CAP VALUE PORTFOLIO [LOGO] [LOGO] [LOGO]
LARGE-CAP GROWTH PORTFOLIO [LOGO] [LOGO] [LOGO]
MID-CAP GROWTH PORTFOLIO [LOGO] [LOGO] [LOGO]
AGGRESSIVE GROWTH PORTFOLIO [LOGO] [LOGO] [LOGO]
FOCUS PORTFOLIO [LOGO] [LOGO] [LOGO]
FOCUSED GROWTH AND INCOME PORTFOLIO [LOGO] [LOGO] [LOGO]
FOCUSED VALUE PORTFOLIO [LOGO] [LOGO] [LOGO]
INTERNATIONAL EQUITY PORTFOLIO [LOGO] [LOGO] [LOGO]
This report is submitted solely for the general information of shareholders of
the fund. Distribution of this report to persons other than shareholders of the
fund is authorized only in connection with a currently effective prospectus,
setting forth details of the Fund, which must precede or accompany this report.
The accompanying report has not been examined by independent accountants and
accordingly no opinion has been expressed thereon.
[LOGO] SUN AMERICA
MUTUAL FUNDS
SSSAN-4/00
