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May 22, 2000 PROSPECTUS
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SUNAMERICA STYLE SELECT SERIES(R)
o FOCUS PORTFOLIO
o FOCUSED TECHNET PORTFOLIO
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
[SUNAMERICA MUTUAL FUNDS LOGO]
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TABLE OF CONTENTS
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FUND HIGHLIGHTS ........................................................... 2
FINANCIALHIGHLIGHTS ....................................................... 8
SHAREHOLDER ACCOUNT INFORMATION ........................................... 9
MORE INFORMATION ABOUT THE PORTFOLIOS ..................................... 16
INVESTMENT STRATEGIES ................................................ 16
GLOSSARY ............................................................. 17
INVESTMENT TERMINOLOGY ........................................... 17
RISK TERMINOLOGY ................................................. 18
FUND MANAGEMENT ...................................................... 19
INFORMATION ABOUT ADVISERS ................................................ 20
[SUNAMERICA MUTUAL FUNDS LOGO]
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FUND HIGHLIGHTS
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Q&A
A FOCUS strategy is one in which an Adviser actively invests in a small number
of holdings which constitute its favorite stock-picking ideas at any given
moment. A focus philosophy reflects the belief that, over time, the performance
of most investment managers' "highest confidence" stocks exceeds that of their
more diversified portfolios. Each adviser may invest in up to 10 securities for
a total, in each Portfolio, of up to 30 securities. Each Adviser may invest in
additional financial securities for the purposes of cash management or to hedge
a security in a Portfolio.
When deemed appropriate by an Adviser, a Portfolio may engage in ACTIVE TRADING
when it frequently trades its portfolio securities to achieve its investment
goal.
The "GROWTH" ORIENTED philosophy to which the Portfolios subscribe--that of
investing in securities believed to offer the potential for long-term growth of
capital--focuses on securities considered to have a historical record of
above-average earnings growth; to have significant growth potential; to have
above-average earnings growth or the ability to sustain earnings growth; to
offer proven or unusual products or services; or to operate in industries
experiencing increasing demand.
MARKET CAPITALIZATION represents the total market value of the outstanding
securities of a corporation.
Q&A
The following questions and answers are designed to give you an overview of
SunAmerica Style Select Series, Inc. (the "Fund"), and to provide you with
information about two of the Fund's separate Portfolios and their investment
goals, principal investment strategies, and principal investment techniques.
Each Portfolio's investment goal may be changed without shareholder approval,
although you will receive notice of any change. More complete investment
information is provided in chart form, under "More Information About the
Portfolios," which is on page 16 and the glossary that follows on page 17.
Q: WHAT ARE THE PORTFOLIOS' INVESTMENT GOALS, PRINCIPAL STRATEGIES AND
TECHNIQUES?
A: PRINCIPAL
INVESTMENT INVESTMENT PRINCIPAL INVESTMENT
PORTFOLIO GOAL STRATEGIES TECHNIQUES
--------- ---- ---------- ----------
FOCUS long-term growth and active trading of equity
PORTFOLIO growth of capital focus securities that offer the
potential for long-term
growth of capital, without
regard to market
capitalization
FOCUSED long-term growth and active trading of primarily
TECHNET growth of capital focus domestic, but also foreign,
PORTFOLIO equity securities of
companies that demonstrate
the potential for long-term
growth of capital and that
the Advisers believe will
benefit significantly from
technological advances or
improvements, without
regard to market
capitalization
SunAmerica Asset Management Corp. ("SunAmerica") is the Portfolios' investment
manager and will initially allocate the assets of the Portfolios equally among
each Portfolio's Advisers. Each Adviser manages a separate portion of a
Portfolio using growth and focus strategies.
ADDITIONAL INFORMATION ABOUT THE FOCUSED TECHNET PORTFOLIO'S PRINCIPAL
INVESTMENT TECHNIQUES
The Focused TechNet Portfolio will invest in up to thirty companies whose
principal businesses the Advisers believe will significantly benefit from
advances or improvements in technology ("technology companies"). Technology
companies include companies in many industries that rely extensively on
technology in their product development or operations, are expected to benefit
from technological advances and improvements, or may be experiencing growth in
sales and earnings driven by technology related research, products or service.
The broad industry categories in which technology companies may be found include
computer software and hardware, network and capital broadcasting, internet and
internet-related businesses, the development, production, sale, and distribution
of goods or services used in the broadcast and media industries, communications
services or equipment, the design, manufacture, or sale of electric components,
defense and data storage and retrieval, healthcare and biotechnology. The
relative size of the Portfolio's investment in these industries will vary from
time to time, and at times, one of these industries may not be represented in
the Portfolio's holdings.
The Portfolio will significantly invest, under normal market conditions, in
internet and internet-related businesses. These companies include e-commerce
enterprises as well as those that develop services and products for the
internet. The Advisers may rotate the Portfolio's holdings out of internet or
internet-related companies for temporary defensive purposes or, if market
conditions warrant.
Q: WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE PORTFOLIOS?
A: The following section describes the principal risks of each Portfolio,
while the chart on page 16 describes principal and additional risks.
2
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RISKS OF INVESTING IN EQUITY SECURITIES
Each Portfolio invests primarily in equity securities. As with any equity
fund, the value of your investment in either of these Portfolios may
fluctuate in response to stock market movements. You should be aware that
the performance of different types of equity stocks may decline under
varying market conditions--for example, "growth" stocks may perform poorly
under circumstances in which "value" stocks in general have continued to
rise. In addition, individual stocks selected for either of these
Portfolios may underperform the market generally.
RISKS OF NON-DIVERSIFICATION
Each Portfolio is non-diversified, which means that it can invest a larger
portion of its assets in the stock of a single company than can some other
mutual funds. By concentrating in a smaller number of stocks, a Portfolio's
risk is increased because the effect of each stock on the Portfolio's
performance is greater.
RISKS OF INVESTING IN SMALL COMPANIES
Stocks of smaller companies may be more volatile than, and not as readily
marketable as, those of larger companies.
RISKS OF INVESTING IN TECHNOLOGY COMPANIES (A PRINCIPAL RISK OF FOCUSED
TECHNET PORTFOLIO ONLY)
Technology companies may react similarly to certain market pressures and
events. They may be significantly affected by short product cycles,
aggressive pricing of products and services, competition from new market
entrants, and obsolescence of existing technology. As a result, the
Portfolio's returns may be considerably more volatile than a fund that does
not invest in technology companies.
ADDITIONAL PRINCIPAL RISKS
Shares of the Portfolios are not bank deposits and are not guaranteed or
insured by any bank, SunAmerica or SunAmerica's affiliates, any government
entity or the Federal Deposit Insurance Corporation. As with any mutual
fund, there is no guarantee that a Portfolio will be able to achieve its
investment goal or that the net return on an investment in a Portfolio will
exceed what could have been obtained through other investment or savings
vehicles. If the value of the assets of a Portfolio goes down, you could
lose money.
Q: HOW HAVE THE PORTFOLIOS PERFORMED HISTORICALLY?
A: The following Risk/Return Bar Chart and Table illustrates the risks of
investing in the Focus Portfolio by showing the Portfolio's performance
during calendar year 1999, and comparing the Portfolio's average annual
returns to those of an appropriate market index. Sales charges are not
reflected in the bar chart. If these amounts were reflected, returns would
be less than those shown. Of course, past performance is not necessarily an
indication of how the Portfolio will perform in the future. Performance
information for the Focused TechNet Portfolio and for Class C shares of the
Focus Portfolio is not shown because they have been in existence for less
than one year.
3
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FUND HIGHLIGHTS
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FOCUS PORTFOLIO (CLASS B)
[BAR CHART OMITTED]
FOCUS PORTFOLIO (CLASS B)
[GRAPHIC - BAR CHART ILLUSTRATES INFORMATION BELOW]
During the period shown in the bar chart, the highest return for a quarter ended
was 31.61% (quarter ended 12/31/99) and the lowest return for a quarter was
1.06% (quarter ended 9/30/99). The Focus Portfolio's year-to-date return as of
March 31, 2000 was 9.03%.
Average Annual Total Returns
(as of the calendar year Past One Return Since
ended December 31, 1999) Year Inception****
Focus Portfolio* Class A 49.43% 46.79%
Class B 53.63% 49.41%
S&P 500 Index** 21.04% 22.22%
Morningstar Large-Cap Growth Category*** 38.63% 36.54%
* Includes sales charges.
** The S&P 500(R) is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices.
*** Developed by Morningstar, the Morningstar Large-Cap Growth category
currently reflects a group of 223 mutual funds that have portfolios with
median market capitalizations, price/earnings ratios, and price/book ratios
similar to those of the Portfolio.
**** Class A and B shares commenced offering on June 8, 1998.
4
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Q: WHAT ARE THE PORTFOLIOS' EXPENSES?
A: The following tables describe the fees and expenses that you may pay if you
buy and hold shares of a Portfolio.
Focused TechNet Portfolio
-------------------------
CLASS A CLASS B CLASS C
------- ------- -------
SHAREHOLDER FEES (FEES PAID
DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) ........... 5.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of amount redeemed)(2) .......... None 4.00% 1.00%
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends ............................. None None None
Redemption Fee(3) ................................ None None None
Exchange Fee ..................................... None None None
Maximum Account Fee .............................. None None None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM PORTFOLIO ASSETS)
Management Fees .................................. 1.25% 1.25% 1.25%
Distribution and Service (12b-1) Fees(4) ......... 0.35% 1.00% 1.00%
Other Expenses(5) ................................ 0.37% 0.37% 0.37%
---- ---- ----
Total Annual Portfolio Operating Expenses(5)(6) .. 1.97% 2.62% 2.62%
==== ==== ====
(1) The front-end sales charge on Class A shares decreases with the size of the
purchase to 0% for purchases of $1 million or more.
(2) Purchases of Class A shares over $1 million will be subject to a contingent
deferred sales charge (CDSC) on redemptions made within two years of
purchase. The CDSC on Class B shares applies only if shares are redeemed
within six years of their purchase. The CDSC on Class C shares applies only
if shares are redeemed within eighteen months of their purchase. See page 9
for more information on the CDSCs.
(3) A $15.00 fee is imposed on wire and overnight mail redemptions.
(4) Because these fees are paid out of the Portfolio's assets on an on-going
basis, over time these fees will increase the cost of your investment and
may cost you more than paying other types of sales charges.
(5) Estimated.
(6) The Board of Directors, including a majority of the Independent Directors,
approved the Investment Advisory and Management Agreement subject to the
Total Annual Portfolio Operating Expenses ratios set forth above.
SunAmerica will waive fees and reimbursements should the Total Annual
Portfolio Operating Expenses be higher than estimated. SunAmerica may not
increase such ratios, which are contractually required by agreement with
the Board of Directors, without the approval of the Directors, including a
majority of the Independent Directors. The expense waivers and fee
reimbursements will continue indefinitely, subject to termination by the
Directors, including a majority of the Independent Directors.
5
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FUND HIGHLIGHTS
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FOCUS PORTFOLIO
-------------------------
CLASS A CLASS B CLASS C
------- ------- -------
SHAREHOLDER FEES (FEES PAID
DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) ........... 5.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of amount redeemed)(2) .......... None 4.00% 1.00%
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends ............................. None None None
Redemption Fee(3) ................................ None None None
Exchange Fee ..................................... None None None
Maximum Account Fee .............................. None None None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM PORTFOLIO ASSETS)
Management Fees .................................. 0.85% 0.85% 0.85%
Distribution and Service (12b-1) Fees(4) ......... 0.35% 1.00% 1.00%
Other Expenses(5) ................................ 0.35% 0.35% 0.35%
---- ---- ----
Total Annual Portfolio Operating Expenses(5) ..... 1.55% 2.20% 2.20%
==== ==== ====
(1) The front-end sales charge on Class A shares decreases with the size of the
purchase to 0% for purchases of $1 million or more.
(2) Purchases of Class A shares over $1 million will be subject to a contingent
deferred sales charge (CDSC) on redemptions made within two years of
purchase. The CDSC on Class B shares applies only if shares are redeemed
within six years of their purchase. The CDSC on Class II shares applies
only if shares are redeemed within eighteen months of their purchase. See
page 9 for more information on the CDSCs.
(3) A $15.00 fee is imposed on wire and overnight mail redemptions.
(4) Because these fees are paid out of the Portfolio's assets on an on-going
basis, over time these fees will increase the cost of your investment and
may cost you more than paying other types of sales charges.
(5) As to Class C, estimated.
6
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EXAMPLE
This Example is intended to help you compare the cost of investing in the
Portfolios with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in a Portfolio for the time periods
indicated and that your investment has a 5% return each year and that the
Portfolio's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions and the net expenses shown in the
fee table your costs would be:
If you redeemed your investment at the end of the periods indicated:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
FOCUS PORTFOLIO
(Class A shares) ............... $724 $1,036 $1,371 $2,314
(Class B shares)* .............. $623 $ 988 $1,380 $2,293
(Class C shares) ............... $323 $ 688 $1,180 $2,293
FOCUSED TECHNET PORTFOLIO
(Class A shares) ............... $763 $1,158 $1,576 $2,739
(Class B shares)* .............. $665 $1,114 $1,590 $2,723
(Class C shares) ............... $365 $ 814 $1,390 $2,723
If you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
FOCUS PORTFOLIO
(Class A shares) ............... $724 $1,036 $1,371 $2,314
(Class B shares)* .............. $223 $ 688 $1,180 $2,293
(Class C shares) ............... $223 $ 688 $1,180 $2,293
FOCUSED TECHNET PORTFOLIO
(Class A shares) ............... $763 $1,158 $1,576 $2,739
(Class B shares)* .............. $265 $ 814 $1,390 $2,723
(Class C shares) ............... $265 $ 814 $1,390 $2,723
* Class B shares convert to Class A shares approximately seven years after
purchase as described in the section entitled "Shareholder Account
Information" on page 9. Therefore, expense information for years 8, 9 and 10
is the same for both Class A and B shares.
7
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FINANCIAL HIGHLIGHTS
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The Financial Highlights table for the Focus Portfolio is intended to help you
understand the Focus Portfolio's financial performance since inception. Certain
information reflects financial results for a single Portfolio share. The total
returns in each table represent the rate that an investor would have earned (or
lost) on an investment in the Portfolio (assuming reinvestment of all dividends
and distributions). This information has been audited by PricewaterhouseCoopers
LLP, whose report, along with Focus Portfolio's financial statements, are
incorporated by reference in the Fund's Statement of Additional Information
(SAI) which is available upon request. There are no financial highlights for
Focus Portfolio, Class C or Focused TechNet Portfolio, because they have been in
existence for less than one year.
FOCUS PORTFOLIO
<TABLE>
<CAPTION>
NET GAIN RATIO OF
NET (LOSS) ON NET
ASSET INVEST- TOTAL DIVI- RATIO OF INVESTMENT
VALUE, NET MENTS FROM DENDS DISTRI- NET NET EXPENSES INCOME
BEGIN- INVEST- (BOTH NET FROM NET BUTIONS ASSET ASSETS TO (LOSS) TO
NING MENT REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF AVERAGE AVERAGE
PERIOD OF INCOME AND UN- MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD NET NET PORTFOLIO
ENDED PERIOD (LOSS)(1) REALIZED) INCOME INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S) ASSETS(4) ASSET(4) TURNOVER
- ----------- ------ -------- -------- ------ -------- ------- ------- ------ --------- ----- - --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
-------
06/08/98--
10/31/98 ... $12.50 $(0.01) $0.11 $0.10 $-- $-- $-- $12.60 0.80% $29,770 1.45%(3) (0.21)%(3) 106%
10/31/99 ... 12.60 (0.12) 6.75 6.63 -- -- -- 19.23 52.62 169,734 1.45 (0.70) 161
CLASS B
-------
06/08/98--
10/31/98 ... 12.50 (0.04) 0.10 0.06 -- -- -- 12.56 0.48 45,817 2.10(3) (0.92)(3) 106
10/31/99 12.56 (0.23) 6.72 6.49 -- -- -- 19.05 51.67 271,531 2.10 (1.34) 161
</TABLE>
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(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):
10/31/98 10/31/99
-------- --------
Focus A 0.32% 0.18%
Focus B 0.32% 0.16%
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SHAREHOLDER ACCOUNT INFORMATION
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SELECTING A SHARE CLASS
Each Portfolio offers three classes of shares through this Prospectus: Class A,
Class B and Class C shares.
Each class of shares has its own cost structure, so you can choose the one best
suited to your investment needs. Your broker or financial advisor can help you
determine which class is right for you.
CLASS A CLASS B CLASS C
o Front-end sales charge, o No front-end sales o No front-end sales
as described below. charge; all your money charge; all your money
There are several ways goes to work for you goes to work for you
to reduce these right away. right away.
charges, also described
below. o Higher annual expenses o Higher annual expenses
than Class A shares. than Class A shares.
o Lower annual expenses
than Class B or Class C o Deferred sales charge o Deferred sales charge
shares. on shares you sell on shares you sell
within six years of within eighteen months
purchase, as described of purchase, as
below. described below.
o Automatic conversion to o No conversion to
Class A shares Class A.
approximately one year
after such time that no
CDSC would be payable
upon redemption, as
described below, thus
reducing future annual
expenses.
CALCULATION OF SALES CHARGES
CLASS A. Sales Charges are as follows:
Concession
Sales Charge to Dealers
-------------------------------------
% OF % OF NET % OF
OFFERING AMOUNT OFFERING
YOUR INVESTMENT PRICE INVESTED PRICE
-------------------------------------
Less than $50,000 ....................... 5.75% 6.10% 5.00%
$50,000 but less than $100,000 .......... 4.75% 4.99% 4.00%
$100,000 but less than $250,000 ......... 3.75% 3.90% 3.00%
$250,000 but less than $500,000 ......... 3.00% 3.09% 2.25%
$500,000 but less than $1,000,000 ....... 2.10% 2.15% 1.35%
$1,000,000 or more ...................... None None 1.00%
INVESTMENTS OF $1 MILLION OR MORE. Class A shares are available with no
front-end sales charge. However, a 1% CDSC is imposed on any shares you sell
within one year of purchase and a 0.50% CDSC is charged on any shares you sell
after the first year and within the second year after purchase.
CLASS B. Shares are offered at their net asset value per share, without any
initial sales charge. However, there is a CDSC on shares you sell within six
years of buying them. The longer the time between the purchase and the sale of
shares, the lower the rate of the CDSC:
Class B deferred charges:
Years after purchase CDSC on shares being sold
1st or 2nd year 4.00%
3rd or 4th year 3.00%
5th year 2.00%
6th year 1.00%
7th year and thereafter None
CLASS C. Shares are offered at their net asset value per share, without any
initial sales charge. However, there is a CDSC of 1% on shares you sell within
18 months after you buy them.
DETERMINATION OF CDSC. Each CDSC is based on the original purchase cost or the
current market value of the shares being sold, whichever is less. There is no
CDSC on shares you purchase through reinvestment of dividends. To keep your CDSC
as low as possible, each time you place a request to sell shares we will first
sell any shares in your account that are not subject to a CDSC. If there are not
enough of these shares available, we will sell shares that have the lowest CDSC.
FOR PURPOSES OF THE CDSC, WE COUNT ALL PURCHASES YOU MAKE DURING A CALENDAR
MONTH AS HAVING BEEN MADE ON THE FIRST DAY OF THAT MONTH.
9
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SHAREHOLDER ACCOUNT INFORMATION
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SALES CHARGE REDUCTIONS AND WAIVERS
WAIVERS FOR CERTAIN INVESTORS. Various individuals and institutions may purchase
CLASS A shares without front-end sales charges, including:
o financial planners, institutions, broker-dealer representatives or
registered investment advisers utilizing Portfolio shares in fee-based
investment products under an agreement with the Distributor
o participants in certain retirement plans that meet applicable conditions,
as described in the Statement of Additional Information
o Fund Directors and other individuals, and their families, who are
affiliated with any Portfolio or any fund distributed by SunAmerica
Capital Services, Inc.
o selling brokers and their employees and sales representatives and their
families
o participants in "Net Asset Value Transfer Program"
We will generally waive the CDSC for CLASS B or CLASS C shares in the following
cases:
o within one year of the shareholder's death or becoming disabled
o taxable distributions from or loans to participants made by qualified
retirement plans or retirement accounts (not including rollovers) for
which SunAmerica Fund Services, Inc. serves as a fiduciary
o Fund Directors and other individuals, and their families, who are
affiliated with any Portfolio or any fund distributed by SunAmerica
Capital Services, Inc.
o to make payments through the Systematic Withdrawal Plan (subject to
certain conditions)
o participants in "Net Asset Value Transfer Program"
REDUCING YOUR CLASS A SALES CHARGES. There are several special purchase plans
that allow you to combine multiple purchases of Class A shares of SunAmerica
Mutual Funds to take advantage of the breakpoints in the sales charge schedule.
For information about the "Rights of Accumulation," "Letter of Intent,"
"Combined Purchase Privilege," and "Reduced Sales Charge for Group Purchases,"
contact your broker or financial advisor, or consult the Statement of Additional
Information.
TO UTILIZE: IF YOU THINK YOU MAY BE ELIGIBLE FOR A SALES CHARGE REDUCTION OR
CDSC WAIVER, CONTACT YOUR BROKER OR FINANCIAL ADVISOR.
REINSTATEMENT PRIVILEGE. If you sell shares of a Portfolio, within one year
after the sale, you may invest some or all of the proceeds of the sale in the
same share class of the Portfolio without a sales charge. A shareholder may use
the reinstatement privilege only one time after selling such shares. If you paid
a CDSC when you sold your shares, we will credit your account with the dollar
amount of the CDSC at the time of sale. This may impact the amount of gain or
loss recognized on the previous sale, for tax purposes. All accounts involved
must be registered in the same name(s).
DISTRIBUTION AND SERVICE (12b-1) FEES
Each class of shares of each Portfolio has its own 12b-1 plan that provides for
distribution and account maintenance and service fees (payable to the
Distributor) based on a percentage of average daily net assets, as follows:
ACCOUNT MAINTENANCE AND
CLASS DISTRIBUTION FEE SERVICE FEE
A 0.10% 0.25%
B 0.75% 0.25%
C 0.75% 0.25%
Because 12b-1 fees are paid out of a Portfolio's assets on an ongoing basis,
over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.
SELECTING A SHARE CLASS
Each Portfolio offers Class A, B and C shares through this prospectus. Class A
and Class B shares are available to all persons who meet eligibility
requirements. Class C shares are offered exclusively through certain financial
intermediaries who have executed an agreement with the Distributor to sell Class
C shares.
OPENING AN ACCOUNT*
1. Read this prospectus carefully.
2. Determine how much you want to invest. The minimum initial investment for
each class of the Portfolios are as follows:
o non-retirement account: $500
o retirement account: $250
o dollar cost averaging: $500 to open; you must invest at least $25 a
month
The minimum subsequent investment for the Portfolios are as follows:
o non-retirement account: $100
o retirement account: $25
3. Complete the appropriate parts of the Account Application, carefully
following the instructions. If you have questions, please contact your broker
or financial advisor or call Shareholder/Dealer Services at 1-800-858-8850,
extension 5125.
4. Complete the appropriate parts of the Supplemental Account Application. By
applying for additional investor services now, you can avoid the delay and
inconvenience of having to submit an additional application if you want to
add services later.
5. Make your initial investment using the chart on the next page. You can
initiate any purchase, exchange or sale of shares through your broker or
financial advisor.
* Class C shares are not available for sale through SunAmerica Fund Services,
Inc. or by telephone. Class C shares may be bought only through certain
financial intermediaries who have executed an agreement with the Distributor
to sell Class C shares.
10
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BUYING SHARES*
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
BY CHECK
...............................................................................
o Make out a check for the o Make out a check for the
investment amount, payable to investment amount payable to
the specific Portfolio or the specific Portfolio or
SunAmerica Funds. SunAmerica Funds.
o Deliver the check and your o Include the stub from your Fund
completed Account Application statement or a note specifying
(and Supplemental Account the Portfolio name, your share
Application, if applicable) to class, your account number and
your broker or financial the name(s) in which the
advisor, or mail them to: account is registered.
SunAmerica Fund Services, Inc. o Indicate the Portfolio and
Mutual Fund Operations, account number in the memo
3rd Floor section of your check.
The SunAmerica Center
733 Third Avenue o Deliver the check and your stub
New York, New York 10017-3204 to your broker or financial
advisor, or mail them to:
o All purchases must be in U.S.
dollars. Cash will not be NON-RETIREMENT ACCOUNTS:
accepted. A $25.00 fee will be SunAmerica Fund Services, Inc.
charged for all checks returned c/o NFDS
due to insufficient funds. P.O. Box 219373
Kansas City, Missouri 64121-9373
RETIREMENT ACCOUNTS:
SunAmerica Fund Services, Inc.
Mutual Fund Operations,
3rd Floor
The SunAmerica Center
733 Third Avenue
New York, New York 10017-3204
BY WIRE
...............................................................................
o Deliver your completed o Instruct your bank to wire the
application to your broker or amount of your investment to:
financial advisor or fax it to
SunAmerica Fund Services, Inc. State Street Bank &
at 212-551-5585. Trust Company
Boston, MA
o Obtain your account number by ABA #0110-00028
referring to your statement or DDA # 99029712
by calling your broker or
financial advisor or Specify the Portfolio name, your
Shareholder/Dealer Services at share class, your Portfolio number,
1-800-858-8850, ext. 5125. account number and the name(s) in
which the account is registered. Your
o Instruct your bank to wire the bank may charge a fee to wire funds.
amount of your investment to:
State Street Bank &
Trust Company
Boston, MA
ABA #0110-00028
DDA # 99029712
Specify the Portfolio name, your
choice of share class, your new
Portfolio number and account number
and the name(s) in which the account
is registered. Your bank may charge a
fee to wire funds.
TO OPEN OR ADD TO AN ACCOUNT USING DOLLAR COST AVERAGING, SEE "ADDITIONAL
INVESTOR SERVICES."
* Class C shares are not available for sale through SunAmerica Fund Services,
Inc. or by telephone. Class C shares may be bought only through certain
financial intermediaries who have executed an agreement with the Distributor to
sell Class C shares.
11
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SHAREHOLDER ACCOUNT INFORMATION
- --------------------------------------------------------------------------------
SELLING SHARES
HOW REQUIREMENTS
THROUGH YOUR BROKER OR FINANCIAL ADVISOR
...............................................................................
o Accounts of any type. o Call your broker or financial
advisor to place your order to
o Sales of any amount. sell shares.
BY MAIL
...............................................................................
o Accounts of any type. o Write a letter of instruction
indicating the Portfolio name,
o Include all signatures and any your share class, your account
additional documents that may be number, the name(s) in which the
required (see next page). account is registered and the
dollar value or number of shares
o Mail the materials to: you wish to sell.
SunAmerica Fund Services, Inc. o Sales of $100,000 or more
Mutual Fund Operations, require the letter of
3rd Floor instruction to have a signature
The SunAmerica Center guarantee.
733 Third Avenue
New York, New York 10017-3204 o A check will normally be mailed
on the next business day to the
name(s) and address in which the
account is registered, or
otherwise according to your
letter of instruction.
BY PHONE
...............................................................................
o Most accounts. o Call Shareholder/Dealer Services
at 1-800-858-8850, extension
o Sales of less than $100,000. 5125 between 8:30 a.m. and 7:00
p.m. (Eastern time) on most
business days. Indicate the
Portfolio name, the name of the
person requesting the
redemption, your share class,
your account number, the name(s)
in which the account is
registered and the dollar value
or number of shares you wish to
sell.
o A check will be mailed to the
name(s) and address in which the
account is registered or to a
different address indicated in a
written authorization previously
provided to the Portfolio by the
shareholder(s) on the account.
BY WIRE
...............................................................................
o Request by mail to sell any o Proceeds will normally be wired
amount (accounts of any type). on the next business day. A $15
fee will be deducted from your
o Request by phone to sell less account.
than $100,000.
TO SELL SHARES THROUGH A SYSTEMATIC WITHDRAWAL PLAN, SEE "ADDITIONAL INVESTOR
SERVICES."
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- --------------------------------------------------------------------------------
SELLING SHARES IN WRITING. In certain circumstances, you will need to make your
request to sell shares in writing. Corporations, executors, administrators,
trustees or guardians may need to include additional items with a request to
sell shares. You may also need to include a signature guarantee, which protects
you against fraudulent orders. You will need a signature guarantee if:
o your address of record has changed within the past 30 days
o you are selling shares worth $100,000 or more
o you are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s)
You can generally obtain a signature guarantee from the following sources:
o a broker or securities dealer
o a federal savings, cooperative or other type of bank
o a savings and loan or other thrift institution
o a credit union
o a securities exchange or clearing agency
A notary public CANNOT provide a signature guarantee.
TRANSACTION POLICIES
VALUATION OF SHARES. The net asset value per share (NAV) for each Portfolio and
class is determined each business day at the close of regular trading on the New
York Stock Exchange (generally 4:00 p.m., Eastern time) by dividing the net
assets of each class by the number of such class's outstanding shares.
Investments for which market quotations are readily available are valued at
market at their price as of the close of regular trading on the New York Stock
Exchange for the day. All other securities and assets are valued at fair value
following procedures approved by the Directors.
BUY AND SELL PRICES. When you buy shares, you pay the NAV plus any applicable
sales charges, as described earlier. When you sell shares, you receive the NAV
minus any applicable CDSCs.
EXECUTION OF REQUESTS. Each Portfolio is open on those days when the New York
Stock Exchange is open for regular trading. We execute buy and sell requests at
the next NAV to be calculated after a Portfolio receives your request in good
order. If the Portfolio or the Distributor receives your order before the
Portfolio's close of business (generally 4:00 p.m., Eastern time), you will
receive that day's closing price. If the Portfolio or the Distributor receives
your order after that time, you will receive the next business day's closing
price. If you place your order through a broker or financial advisor, you should
make sure the order is transmitted to the Portfolio before the Portfolio's close
of business. Each Portfolio and the Distributor reserve the right to reject any
order to buy shares.
During periods of extreme volatility or market crisis, a Portfolio may
temporarily suspend the processing of sell requests, or may postpone payment of
proceeds for up to three business days or longer, as allowed by federal
securities laws.
Each Portfolio may invest in securities that are primarily listed on foreign
exchanges that trade on weekends or other days when a Portfolio does not price
its shares. As a result, the value of a Portfolio's shares may change on days
when you will not be able to purchase or redeem your shares.
If a Portfolio determines that it would be detrimental to the best interests of
the remaining shareholders of the Portfolio to make payment of redemption
proceeds wholly or partly in cash, the Portfolio may pay the redemption price by
a distribution in kind of securities from the Portfolio in lieu of cash.
At various times, a Portfolio may be requested to redeem shares for which it has
not yet received good payment. A Portfolio may delay or cause to be delayed the
mailing of a redemption check until such time as good payment (E.G., cash or
certified check drawn on a United States bank) has been collected for the
purchase of such shares, which will not exceed 15 days.
TELEPHONE TRANSACTIONS. For your protection, telephone requests are recorded in
order to verify their accuracy. In addition, Shareholder/Dealer Services will
take measures to verify the identity of the caller, such as asking for name,
account number, social security or other taxpayer ID number and other relevant
information. If appropriate measures are not taken, the Portfolio is responsible
for any loss that may occur to any account due to an unauthorized telephone
call. Also for your protection, telephone transactions are not permitted on
accounts whose names or addresses have changed within the past 30 days. At times
of peak activity, it may be difficult to place requests by phone. During these
times, consider sending your request in writing.
EXCHANGES. You may exchange shares of a Portfolio for shares of the same class
of any other fund distributed by SunAmerica Capital Services, Inc. Additionally,
you may exchange Class C shares of a Portfolio for Class IIshares of any other
fund distributed by SunAmerica Capital Services, Inc. Before making an exchange,
you should review a copy of the prospectus of the fund into which you would like
to exchange. All exchanges are subject to applicable minimum investment
requirements. A Systematic Exchange Program is described under "Additional
Investor Services." An exchange is treated as a taxable sale of the exchanged
shares and a purchase of the new shares for federal income tax purposes.
13
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SHAREHOLDER ACCOUNT INFORMATION
- --------------------------------------------------------------------------------
If you exchange shares that were purchased subject to a CDSC, the CDSC will
continue to apply following the exchange. In determining the CDSC applicable to
shares being sold after an exchange, we will take into account the length of
time you held those shares prior to the exchange.
To protect the interests of other shareholders, we may cancel the exchange
privileges of any investors that, in the opinion of the Portfolio, are using
market timing strategies or making excessive exchanges. A Portfolio may change
or cancel its exchange privilege at any time, upon 60 days' written notice to
its shareholders. A Portfolio may also refuse any exchange order.
CERTIFICATED SHARES. Most shares are electronically recorded. If you wish to
have certificates for your shares, please call Shareholder/Dealer Services at
1-800-858-8850 extension 5125, for further information. You may sell or exchange
certificated shares only by returning the certificates to the Portfolio, along
with a letter of instruction and a signature guarantee. The Portfolios do not
issue certificates for fractional shares.
MULTI-PARTY CHECKS. A Portfolio may agree to accept a "multi-party check" in
payment for Portfolio shares. This is a check made payable to the investor by
another party and then endorsed over to a Portfolio by the investor. If you use
a multi-party check to purchase shares, you may experience processing delays. In
addition, the Portfolio is not responsible for verifying the authenticity of any
endorsement and assumes no liability for any losses resulting from a fraudulent
endorsement.
ADDITIONAL INVESTOR SERVICES
To select one or more of these additional services, complete the relevant
part(s) of the Supplemental Account Application. To add a service to an existing
account, contact your broker or financial advisor, or call Shareholder/Dealer
Services at 1-800-858-8850, extension 5125.
DOLLAR COST AVERAGING lets you make regular investments from your bank account
to a Portfolio or any other fund distributed by SunAmerica Capital Services of
your choice. You determine the frequency and amount of your investments, and you
can terminate your participation at any time.
SYSTEMATIC WITHDRAWAL PLAN may be used for routine bill payment or periodic
withdrawals from your account. To use:
o Make sure you have at least $5,000 worth of shares in your account.
o Make sure you are not planning to invest more money in this account
(buying shares during a period when you are also selling shares of the
same fund is not advantageous to you, because of sales charges).
o Specify the payee(s) and amount(s). The payee may be yourself or any other
party (which may require a signature guarantee), and there is no limit to
the number of payees you may have, as long as they are all on the same
payment schedule. Each withdrawal must be at least $50.
o Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
o Make sure your dividends and capital gains are being reinvested.
You cannot elect the systematic withdrawal plan if you have requested
certificates for your shares.
SYSTEMATIC EXCHANGE PROGRAM may be used to exchange shares of a Portfolio
periodically for the same class of shares of one or more other funds distributed
by SunAmerica Capital Services, Inc. To use:
o Specify the SunAmerica Mutual Fund(s) from which you would like money
withdrawn and into which you would like money invested.
o Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
o Specify the amount(s). Each exchange must be worth at least $50.
o Accounts must be registered identically; otherwise a signature guarantee
will be required.
ASSET PROTECTION PLAN (OPTIONAL) Anchor National Life Insurance Company offers
an Asset Protection Plan to certain investors in each Portfolio. The benefits of
this optional coverage payable at death will be related to the amounts paid to
purchase Portfolio shares and to the value of the Portfolio shares held for the
benefit of the insured persons. However, to the extent the purchased shares are
redeemed prior to death, coverage with respect to these shares will terminate.
Purchasers of the Asset Protection Plan are required to authorize periodic
redemptions of Portfolio shares to pay the premiums for this coverage. These
redemptions will not be subject to CDSCs, but will have the same tax
consequences as any other Portfolio redemptions.
The Asset Protection Plan will be available to eligible persons who enroll for
the coverage within a limited time period after shares in a Portfolio are
initially purchased or transferred. In addition, coverage cannot be made
available unless Anchor National knows for whose benefit shares are purchased.
For instance, coverage cannot be made available for shares registered in the
name of your broker unless the broker provides Anchor National with information
regarding the beneficial owners of the shares. In addition, coverage is
available only to shares purchased on behalf of natural persons between 21 and
75 years of age; coverage is not available with respect to shares purchased for
a retirement account. Other restrictions on the coverage apply. This coverage
may not be available in all states and may be subject to additional restrictions
or limitations. Purchasers of shares should also make themselves familiar with
the impact on the Asset
14
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- --------------------------------------------------------------------------------
Protection Plan coverage of purchasing additional shares, reinvestment of
dividends and capital gains distributions and redemptions.
Anchor National is a SunAmerica company.
Please call 1-800-858-8850, extension 5660 for more information, including the
cost of the Asset Protection Plan option.
RETIREMENT PLANS. SunAmerica Mutual Funds offer a range of qualified retirement
plans, including IRAs, Simple IRAs, Roth IRAs, SEPs, SARSEPs, 401(k) plans,
403(b) plans and other pension, educational and profit-sharing plans. Using
these plans, you can invest in any fund distributed by SunAmerica Capital
Services, Inc. with a low minimum investment of $250 or, for some group plans,
no minimum investment at all. To find out more, call Retirement Plans at
1-800-858-8850, extension 5134.
DIVIDEND, DISTRIBUTION AND ACCOUNT POLICIES
ACCOUNT STATEMENTS. In general, you will receive account statements as follows:
o after every transaction that affects your account balance (except a
dividend reinvestment or automatic purchase from or automatic redemption
to your bank account)
o after any changes of name or address of the registered owner(s)
o in all other circumstances, quarterly or annually, depending upon the
Portfolio
Every year you should also receive, if applicable, a Form 1099 tax information
statement, mailed by January 31.
DIVIDENDS. Each Portfolio generally distributes most or all of its net earnings
in the form of dividends. Income dividends and capital gains distributions, if
any, are paid at least annually by the Portfolios.
DIVIDEND REINVESTMENTS. Your dividends and distributions, if any, will be
automatically reinvested in additional shares of the same share class on which
they were paid. Alternatively, dividends and distributions may be reinvested in
any other fund distributed by SunAmerica Capital Services, Inc. or paid in cash
(if more than $10). You will need to complete the relevant part of the Account
Application to elect one of these other options. For existing accounts, contact
your broker or financial advisor or call Shareholder/Dealer Services at
1-800-858-8850, extension 5125 to change dividend and distribution payment
options.
TAXABILITY OF DIVIDENDS. The Portfolios intend to satisfy the requirements
necessary to qualify as a regulated investment company for federal income tax
purposes. For so long as each Portfolio so qualifies, it will pay no federal
income tax on the income and capital gains that it distributes to shareholders.
Dividends you receive from a Portfolio, whether reinvested or taken as cash, are
generally considered taxable. The Portfolios intend to make distributions that
may be taxed as ordinary income and capital gains (which may be taxable at
different rates depending on the length of time the Portfolio holds its assets).
Some dividends paid in January may be taxable as if they had been paid the
previous December. Corporations may be entitled to take a dividends-received
deduction for a portion of certain dividends they receive.
The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.
"BUYING INTO A DIVIDEND." You should note that if you purchase shares just
before a distribution, you will be taxed for that distribution like other
shareholders, even though that distribution represents simply a return of part
of your investment. You may wish to defer your purchase until after the record
date for the distribution, so as to avoid this tax impact.
TAXABILITY OF TRANSACTIONS. Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions. If you hold Class B shares, you will not have a taxable event when
they convert into Class A shares.
OTHER TAX CONSIDERATIONS. If you are neither a lawful permanent resident nor a
citizen of the U.S. or if you are a foreign entity, ordinary income dividends
paid to you (which include distributions of net short-term capital gains) will
generally be subject to a 30% U.S. withholding tax, unless a lower treaty rate
applies.
By law, each Portfolio must withhold 31% of your distributions and proceeds if
you have not provided a taxpayer identification number or social security
number.
This section summarizes some of the consequences under current federal income
tax law of an investment in a Portfolio. It is not a substitution for
professional tax advice. Consult your tax advisor about the potential tax
consequences of an investment in a Portfolio under all applicable laws.
SMALL ACCOUNTS. If you draw down an account so that its total value is less than
$500 ($250 for retirement plan accounts), you may be asked to purchase more
shares within 60 days. If you do not take action, the Fund may close out your
account and mail you the proceeds. Alternatively, you may be charged a $2.00
monthly charge to maintain your account. Your account will not be closed if its
drop in value is due to Portfolio performance or the effects of sales charges.
15
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How
Requirements
MORE INFORMATION ABOUT THE PORTFOLIOS
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
Each Portfolio has its own investment goal and a strategy for pursuing it.
The chart summarizes information about each Portfolio's investment
approach. Following this chart is a glossary that further describes the
investment and risk terminology that we use. Please review the glossary in
conjunction with this chart.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOCUS FOCUSED
PORTFOLIO TECHNET PORTFOLIO
- --------------------------------------------------------------------------------
What is the Portfolio's investment goal? Long-term growth Long-term growth
of capital of capital
- --------------------------------------------------------------------------------
What principal investment strategies Growth and focus Growth and focus
does the Portfolio use to implement
its investment goal?
- --------------------------------------------------------------------------------
What are the Portfolio's principal o Active trading o Active trading
investment techniques? of up to of up to
thirty equity thirty equity
securities that securities of
offer the companies that
potential for offer the
long-term growth potential for
of capital, long-term
without regard growth of
to market capital and
capitalization that the
Advisers
believe will
benefit
significantly
from
technological
advances or
improvements,
without regard
to market
capitalization
- -------------------------------------------------------------------------------
What are the Portfolio's other o Trading of o Trading of
significant investment techniques? foreign foreign
securities securities
- --------------------------------------------------------------------------------
What other types of securities may o Short-term o Short-term
the Portfolio normally invest in as investments investments
part of efficient portfolio (up to 10%) (up to 10%)
management or for return o Defensive
enhancement purposes? instruments o Defensive
instruments
o Options and
futures o Options and
futures
o Special
situations o Special
situations
- --------------------------------------------------------------------------------
What principal risks normally may o Stock market o Stock market
affect the Portfolio? volatility volatility
o Securities o Securities
selection selection
o Non- o Non-
diversification diversification
o Small market
capitalization
o Technology
companies
- --------------------------------------------------------------------------------
What other risks may affect o Foreign o Foreign
the Portfolio? exposure exposure
o Derivatives o Derivatives
o Hedging o Hedging
o Emerging
markets
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
GLOSSARY
- --------------------------------------------------------------------------------
LARGE-CAP COMPANIES and MID-CAP COMPANIES generally have a substantial
record of operations (i.e., in business for at least five years) and are
listed for trading on the New York Stock Exchange or another national or
international stock exchange or, in some cases, are traded over the counter.
SMALL-CAP COMPANIES generally will be companies that have been in business
for a shorter period of time.
- --------------------------------------------------------------------------------
INVESTMENT TERMINOLOGY
GROWTH OF CAPITAL is growth of the value of an investment.
ACTIVE TRADING means that the Portfolio may engage, when the Adviser deems
appropriate, in frequent trading of portfolio securities to achieve its
investment goal. In addition, because a Portfolio may sell a security without
regard to how long it has held the security, active trading may have tax
consequences for certain shareholders, involving a possible increase in
short-term capital gains or losses. Active trading may result in high portfolio
turnover and correspondingly greater brokerage commissions and other transaction
costs, which will be borne directly by a Portfolio. During periods of increased
market volatility, active trading may be more pronounced.
EQUITY SECURITIES include common and preferred stocks, convertible securities,
warrants and rights.
LARGE-CAP COMPANIES are those with market caps within the Morningstar, Inc.
Large-Cap category. Currently, this range is $9.5 billion or higher.
MID-CAP COMPANIES are those with market caps within the Morningstar, Inc.
Mid-Cap category. Currently, this range is between $1.5 billion and $9.5
billion.
SMALL-CAP COMPANIES are those with market caps within the Morningstar, Inc.
Small-Cap category. Currently, this range is $1.5 billion or less.
FOREIGN SECURITIES are issued by companies located outside of the United States
and include securities issued by companies located in emerging markets. Foreign
securities may include American Depositary Receipts (ADRs) or other similar
securities that convert into foreign securities.
SHORT-TERM INVESTMENTS include money market securities such as short-term U.S.
government obligations, repurchase agreements, commercial paper, bankers'
acceptances and certificates of deposit. These securities provide a Portfolio
with sufficient liquidity to meet redemptions and cover expenses.
DEFENSIVE INSTRUMENTS include high quality fixed income securities and money
market instruments. A Portfolio will make temporary defensive investments in
response to adverse market, economic, political or other conditions. When a
Portfolio takes a defensive position, it may miss out on investment
opportunities that could have resulted from investing in accordance with its
principal investment strategy. As a result, a Portfolio may not achieve its
investment goal.
OPTIONS AND FUTURES are contracts involving the right to receive or obligation
to deliver assets or money depending on the performance of one or more
underlying assets or financial instruments.
A SPECIAL SITUATION arises when, in the opinion of the Adviser, the securities
of a particular issuer will be recognized and appreciated in value due to a
specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investments in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
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MORE INFORMATION ABOUT THE PORTFOLIOS
- --------------------------------------------------------------------------------
RISK TERMINOLOGY
STOCK MARKET VOLATILITY: The stock market as a whole could go up or down
(sometimes dramatically). This could affect the value of the securities in a
Portfolio's portfolio.
SECURITIES SELECTION: A strategy used by a Portfolio, or securities selected by
an Adviser, may fail to produce the intended return.
NON-DIVERSIFICATION: Each Portfolio will hold up to thirty securities. As a
result, performance may be affected more by a decline in the market price of one
stock than would be the case if each Portfolio were more diversified.
SMALL MARKET CAPITALIZATION: Companies with smaller market capitalizations tend
to be at early stages of development with limited product lines, market access
for products, financial resources, access to new capital, or depth in
management. It may be difficult to obtain reliable information and financial
data about these companies. Consequently, the securities of smaller companies
may not be as readily marketable and may be subject to more abrupt or erratic
market movements.
TECHNOLOGY COMPANIES: The industries in which technology companies may be found
can be significantly affected by short product cycles, aggressive pricing of
products and services, competition from new market entrants, worldwide
scientific and technological developments and changes in governmental regulation
and policies.
FOREIGN EXPOSURE: Investors in foreign countries are subject to a number of
risks. A principal risk is that fluctuations in the exchange rates between the
U.S. dollar and foreign currencies may negatively affect an investment. In
addition, there may be less publicly available information about a foreign
company and it may not be subject to the same uniform accounting, auditing and
financial reporting standards as U.S. companies. Foreign governments may not
regulate securities markets and companies to the same degree as the U.S.
government. Foreign investments will also be affected by local political or
economic developments and governmental actions. Consequently, foreign securities
may be less liquid, more volatile and more difficult to price than U.S.
securities. These risks are heightened when the issuer is in an emerging market.
DERIVATIVES: Derivatives are subject to general risks relating to heightened
sensitivity to market volatility, interest rate fluctuations, illiquidity and
creditworthiness of the counterparty to the derivatives transactions.
HEDGING: Hedging is a strategy in which the Adviser uses a derivative security
to reduce certain risk characteristics of an underlying security or portfolio of
securities. While hedging strategies can be very useful and inexpensive ways of
reducing risk, they are sometimes ineffective due to unexpected changes in the
market or exchange. Moreover, while hedging can reduce or eliminate losses, it
can also reduce or eliminate gains.
EMERGING MARKETS: An emerging market country is one that the World Bank, the
International Finance Corporation or the United Nations or its authorities has
determined to have a low or middle income economy. Historical experience
indicates that the markets of emerging market countries have been more volatile
than more developed markets; however, such markets can provide higher rates of
return to investors.
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FUND MANAGEMENT
MANAGER: SunAmerica Asset Management Corp. selects the Advisers for each
Portfolio, may manage certain portions of each Portfolio directly, provides
various administrative services, and supervises the daily business affairs of
each Portfolio. The Advisers are responsible for decisions to buy and sell
securities for each Portfolio, selection of broker-dealers and negotiation of
commission rates for their respective portion of the relevant Portfolio.
SunAmerica may terminate any agreement with another Adviser without shareholder
approval. Moreover, SunAmerica has received an exemptive order from the
Securities and Exchange Commission that permits SunAmerica, subject to certain
conditions, to enter into agreements relating to a Portfolio with Advisers
approved by the Board of Directors without obtaining shareholder approval. The
exemptive order also permits SunAmerica, subject to the approval of the Board
but without shareholder approval, to employ new Advisers for new or existing
Portfolios, change the terms of particular agreements with Advisers or continue
the employment of existing Advisers after events that would otherwise cause an
automatic termination of a subadvisory agreement. Shareholders of a Portfolio
have the right to terminate an agreement with an Adviser at any time by a vote
of the majority of the outstanding voting securities of such Portfolio.
Shareholders will be notified of any Adviser changes. The order also permits the
Portfolio to disclose to shareholders the Advisers' fees only in the aggregate
for each Portfolio. The annual rate of the investment advisory fee payable to
SunAmerica is 1.25% of average daily net assets for the Focused TechNet
Portfolio and 0.85% of average daily net assets for the Focus Portfolio.
Payments to the Advisers for their services is made by SunAmerica, not by the
Portfolios.
SunAmerica, located in The SunAmerica Center, 733 Third Avenue, New York, New
York 10017, was organized in 1982 under the laws of Delaware, and manages,
advises and/or administers assets in excess of $30 billion as of March 31, 2000.
In addition to managing the Portfolios, SunAmerica serves as adviser, manager
and/or administrator for Anchor Pathway Fund, Anchor Series Trust, Brazos Mutual
Funds, Seasons Series Trust, SunAmerica Equity Funds, Inc., SunAmerica Income
Funds, SunAmerica Money Market Funds, Inc., SunAmerica Series Trust and
SunAmerica Strategic Investment Series, Inc.
SunAmerica is the Portfolios' investment manager and will initially allocate the
assets of each Portfolio equally among the Advisers. SunAmerica will also
allocate new cash from share purchases and redemption requests equally among the
Advisers, unless SunAmerica determines, subject to the review of the Board, that
a different allocation of assets would be in the best interests of the Portfolio
and its shareholders.
With respect to the Focus Portfolio, in general, SunAmerica will not rebalance
or reallocate assets of the Portfolio among Advisers. However, SunAmerica
reserves the right, subject to the review of the Board, to reallocate assets
from one Adviser to another when it would be in the best interests of the
Portfolio and its shareholders to do so. In some instances, the effect of the
reallocation will be to shift assets from a better performing Adviser to a
portion of the Portfolio with a relatively lower total return.
With respect to the Focused TechNet Portfolio, SunAmerica intends, on a
quarterly basis, to review the asset allocation in the Portfolio to ensure that
no portion of assets managed by an Adviser exceeds that portion managed by any
other Adviser to the Portfolio by more than 5%. If such a condition exists,
SunAmerica generally will then re-allocate cash flows among the Advisers so as
to effect a re-balancing of the Portfolio's asset allocation. In addition,
SunAmerica reserves the right, subject to the review of the Board, to reallocate
assets from one Adviser to another when it would be in the best interests of the
Portfolio and its shareholders to do so. In some instances, the effect of the
reallocation will be to shift assets from a better performing Adviser to a
portion of the Portfolio with a relatively lower total return.
19
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INFORMATION ABOUT ADVISERS
- --------------------------------------------------------------------------------
THE ADVISERS AND PORTFOLIO MANAGERS FOR THE PORTFOLIOS ARE DESCRIBED BELOW:
PORTFOLIO MANAGEMENT ALLOCATED
PORTFOLIO AMONG THE FOLLOWING ADVISERS
- --------- ----------------------------------
Focus Portfolio Fred Alger Management, Inc. ("Alger")
Jennison Associates LLC ("Jennison")
Marsico Capital Management, LLC ("Marsico")
Focused TechNet Portfolio SunAmerica
Dresdner RCM Global Investors LLC
("Dresdner")
Van Wagoner Capital Management, Inc.
("Van Wagoner")
DESCRIPTION OF THE ADVISERS
FRED ALGER MANAGEMENT, INC. Alger is a New York corporation wholly owned by its
principals and located at 1 World Trade Center, New York, New York 10048. Since
1964, Alger has provided investment management services to large corporate
pension plans, state and local governments, insurance companies, mutual funds
and high net-worth individuals. As of December 31, 1999, Alger had approximately
$17.4 billion in assets under management.
JENNISON ASSOCIATES LLC. Jennison is a Delaware limited liability company
located at 466 Lexington Avenue, New York, NY 10017. As of December 31, 1999,
Jennison had approximately $59.1 billion in assets under management for
institutional and mutual fund clients.
MARSICO CAPITAL MANAGEMENT, LLC. Marsico is a Colorado limited liability company
located at 1200 17th Street, Suite 1300, Denver, CO 80202. As of December 31,
1999, Marsico had approximately $14 billion in assets under management.
SUNAMERICA ASSET MANAGEMENT CORP. See page 19.
DRESDNER RCM GLOBAL INVESTORS LLC. Dresdner is an indirect wholly owned
subsidiary of Dresdner Bank AG, an international banking organization, and is
located at Four Embarcadero Center, San Francisco, California 94111. As of
December 31, 1999, Dresdner had approximately $47 billion in total assets under
management and advice.
VAN WAGONER CAPITAL MANAGEMENT, INC. Van Wagoner is a privately owned company
located at 345 California Street, San Francisco, California 94104. As of March
31, 2000, Van Wagoner had approximately $4.5 billion in assets under management.
NAME, TITLE AND
AFFILIATION OF
PORTFOLIO PORTFOLIO MANAGER EXPERIENCE
- --------- ----------------- ----------
FOCUS PORTFOLIO DAVID D. ALGER MR. ALGER JOINED ALGER IN 1971
PRESIDENT AND PORTFOLIO AND HAS BEEN PRESIDENT AND
MANAGER (ALGER) DIRECTOR SINCE 1995. PRIOR TO
1995, MR. ALGER WAS EXECUTIVE
VICE PRESIDENT AND DIRECTOR OF
RESEARCH WITH THE FIRM.
SPIROS "SIG" SEGALAS MR. SEGALAS IS A FOUNDING MEMBER
PORTFOLIO MANAGER OF JENNISON, WHICH WAS
(JENNISON) ESTABLISHED IN 1969, AND HE HAS
BEEN A DIRECTOR AND EQUITY
PORTFOLIO MANAGER EVER SINCE. IN
ADDITION, MR. SEGALAS HAS SERVED
AS PRESIDENT AND CHIEF INVESTMENT
OFFICER OF JENNISON SINCE 1993
AND 1973, RESPECTIVELY.
THOMAS F. MARSICO MR. MARSICO HAS BEEN THE CHAIRMAN
PORTFOLIO MANAGER AND CHIEF EXECUTIVE OFFICER OF
(MARSICO) MARSICO SINCE HE FORMED MARSICO
IN 1997. FROM 1988 THROUGH 1997,
MR. MARSICO SERVED AS THE
PORTFOLIO MANAGER OF THE JANUS
TWENTY FUND AND FROM 1991 THROUGH
1997, MR. MARSICO SERVED AS THE
PORTFOLIO MANAGER OF THE JANUS
GROWTH & INCOME FUND.
20
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NAME, TITLE AND
AFFILIATION OF
PORTFOLIO PORTFOLIO MANAGER EXPERIENCE
- --------- ----------------- ----------
FOCUSED TECHNET WALTER C. PRICE,JR. MR. PRICE JOINED DRESDNER IN 1974
PORTFOLIO PORTFOLIO MANAGER AS A SENIOR SECURITIES ANALYST
(DRESDNER) AND BECAME A PRINCIPAL IN 1978.
HE HAS BEEN A MANAGING DIRECTOR
AND PORTFOLIO MANAGER WITH THE
FIRM SINCE 1985. MR. PRICE HAS
ANALYTICAL RESPONSIBILITY FOR
MUCH OF DRESDNER'S TECHNOLOGY
AREA.
HUACHEN CHEN MR. CHEN JOINED DRESDNER IN 1985
PORTFOLIO MANAGER AS A SECURITIES ANALYST. HE
(DRESDNER) BECAME A PRINCIPAL IN 1994 AND
CURRENTLY HAS RESEARCH AND MONEY
MANAGEMENT RESPONSIBILITIES FOR
THE TECHNOLOGY AREA.
DONNA CALDER MS. CALDER JOINED SUNAMERICA AS A
PORTFOLIO MANAGER PORTFOLIO MANAGER IN FEBRUARY
(SUNAMERICA) 1998. MS. CALDER SERVED AS A
GENERAL PARTNER OF MANHATTAN
CAPITAL PARTNERS, L.P. FROM
NOVEMBER 1991 THROUGH AUGUST
1995. SHE ALSO HAS SERVED AS A
PORTFOLIO MANAGER WITH
OPPENHEIMER MANAGEMENT AND E.F.
HUTTON & COMPANY.
SOOHWAN KIM, CFA SOOHWHAN KIM JOINED SUNAMERICA AS
SENIOR TECHNOLOGY ANALYST A SENIOR RESEARCH ANALYST IN JULY
(SUNAMERICA) OF 1999. PREVIOUSLY, HE WAS VICE
PRESIDENT, ANALYST AT CITIBANK
GLOBAL ASSET MANAGEMENT. FROM
1992 TO 1993, HE SERVED AS AN
ECONOMIST WITH THE UNION BANK OF
SWITZERLAND.
GARRETT R. VAN WAGONER, CFA MR. VAN WAGONER IS PORTFOLIO
PORTFOLIO MANAGER MANAGER AND PRESIDENT OF THE VAN
(VAN WAGONER) WAGONER FUNDS. PRIOR TO FOUNDING
VAN WAGONER CAPITAL MANAGEMENT,
INC. IN 1995, MR. VAN WAGONER
MANAGED THE GOVETT SMALLER
COMPANIES FUND FOR THREE YEARS.
HE ALSO WORKED WITH BESSEMER
TRUST, N.A. AND HAS OVER 20 YEARS
EXPERIENCE OF EQUITY PORTFOLIO
MANAGEMENT.
RAIFORD GARRABRANT, CFA MR. GARRABRANT IS A RESEARCH
PORTFOLIO MANAGER AND ANALYST AND PORTFOLIO MANAGER FOR
RESEARCH ANALYST VAN WAGONER CAPITAL MANAGEMENT,
(VAN WAGONER) INC. RESPONSIBLE FOR COVERING
COMPANIES WITH MARKET
CAPITALIZATIONS OF $500 MILLION
AND BELOW. PRIOR TO JOINING VAN
WAGONER CAPITAL MANAGEMENT, INC.,
HE WAS THE ASSISTANT PORTFOLIO
MANAGER FOR THE GOVETT SMALLER
COMPANIES FUND AND ASSISTED MR.
VAN WAGONER IN MANAGING THIS FUND
IN 1994 AND 1995. MR.GARRABRANT
ALSO WORKED WITH FIRST CITIZEN'S
BANK AND TRUST AS A FINANCIAL
ANALYST AND HAS OVER EIGHT YEARS
OF RESEARCH AND PORTFOLIO
MANAGEMENT EXPERIENCE.
21
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INFORMATION ABOUT ADVISERS
- --------------------------------------------------------------------------------
DISTRIBUTOR. SunAmerica Capital Services, Inc. distributes each Portfolio's
shares. The Distributor, a SunAmerica company, receives the initial and deferred
sales charges, all or a portion of which may be re-allowed to other
broker-dealers. In addition, the Distributor receives fees under each
Portfolio's 12b-1 plans.
The Distributor, at its expense, may from time to time provide additional
compensation to broker-dealers (including in some instances, affiliates of the
Distributor) in connection with sales of shares of a Portfolio. This
compensation may include (i) full re-allowance of the front-end sales charge on
Class A shares; (ii) additional compensation with respect to the sale of Class
A, Class B or Class C shares; or (iii) financial assistance to broker-dealers in
connection with conferences, sales or training programs for their employees,
seminars for the public, advertising campaigns regarding one or more of the
Portfolios, and/or other broker-dealer sponsored special events. In some
instances, this compensation will be made available only to certain
broker-dealers whose representatives have sold a significant number of shares of
a Portfolio. Compensation may also include payment for travel expenses,
including lodging, incurred in connection with trips taken by invited registered
representatives for meetings or seminars of a business nature. In addition, the
following types of non-cash compensation may be offered through sales contests:
(i) travel mileage on major air carriers; (ii) tickets for entertainment events
(such as concerts or sporting events); or (iii) merchandise (such as clothing,
trophies, clocks, pens or other electronic equipment). Broker-dealers may not
use sales of a Portfolio's shares to qualify for this compensation to the extent
receipt of such compensation may be prohibited by applicable law or the rules of
any self-regulatory agency, such as the National Association of Securities
Dealers, Inc. Dealers who receive bonuses or other incentives may be deemed to
be underwriters under the Securities Act of 1933.
Certain laws and regulations limit the ability of banks and other depository
institutions to underwrite and distribute securities. However, in the opinion of
the Distributor based upon the advice of counsel, these laws and regulations do
not prohibit such depository institutions from providing other services to
investment companies of the type contemplated by each Portfolio's 12b-1 plans.
Banks and other financial services firms may be subject to various state laws
regarding these services, and may be required to register as dealers pursuant to
state law.
ADMINISTRATOR. SunAmerica Fund Services, Inc. assists the Portfolio's transfer
agent in providing shareholder services. The Administrator, a SunAmerica
company, is paid a monthly fee by each Portfolio for its services at the annual
rate of 0.22% of average daily net assets.
SunAmerica, the Distributor and Administrator are all located in The SunAmerica
Center, 733 Third Avenue, New York, New York 10017.
22
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FOR MORE INFORMATION
- --------------------------------------------------------------------------------
The following documents contain more information about each Portfolio and are
available free of charge upon request:
ANNUAL AND SEMI-ANNUAL REPORTS. Contain financial statements, performance
data and information on portfolio holdings. The annual reports also contain a
written analysis of market conditions and investment strategies that
significantly affected a Portfolio's performance during the last applicable
period.
STATEMENT OF ADDITIONAL INFORMATION (SAI). Contains additional information
about a Portfolio's policies, investment restrictions and business structure.
This prospectus incorporates the SAI by reference.
You may obtain copies of these documents or ask questions about the Portfolios
by contacting:
SunAmerica Fund Services, Inc.
Mutual Fund Operations
The SunAmerica Center
733 Third Avenue
New York, New York 10017-3204
1-800-858-8850, extension 5125
or
by calling your broker or financial advisor.
Information about the Portfolios (including the SAI) can be reviewed and copied
at the Public Reference Room of the Securities and Exchange Commission,
Washington, D.C. Call 1-202-942-8090 for information on the operation of the
Public Reference Room. Information about the Portfolios is also available on the
Securities and Exchange Commission's web-site at http://www.sec.gov and copies
may be obtained upon payment of a duplicating fee by electronic request at the
following E-mail address: [email protected], or by writing the Public Reference
Section of the Securities and Exchange Commission, Washington, D.C. 20549-0102.
You should rely only on the information contained in this prospectus. No one is
authorized to provide you with any different information.
DISTRIBUTOR: SunAmerica Capital Services
INVESTMENT COMPANY ACT
File No. 811-07797
[SUNAMERICA LOGO]
TECPR
