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[LOGO] SunAmerica Mutual Funds
2000 Annual Report
Style Select Series(R)
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[LOGO] SunAmerica
Mutual Funds
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A Message from the President
December 15, 2000
Dear Shareholder:
We are very pleased to report on this annual period, which was filled with
exciting initiatives and achievements for SunAmerica Style Select Series. In our
quest to provide the greatest possible value to our shareholders, we continually
monitor these portfolios and make enhancements where needed to provide access to
more investment options and objectives.
Most prominently, we expanded our Focused Portfolios by introducing the new
Focused TechNet Portfolio in May 2000. The Focused TechNet Portfolio invests in
companies believed to be leading producers or beneficiaries of technological
innovation. It has three well-recognized and respected management teams with
investment expertise in the technology sector--Walter Price, Jr. and Huachen
Chen of Dresdner RCM Global Investors, Garrett Van Wagoner and Raiford
Garrabrant of Van Wagoner Capital Management and Donna Calder and Soohwan Kim of
SunAmerica Asset Management. Earlier this fiscal year, we successfully
introduced the Focused Value Portfolio.
Our first multi-managed focused mutual fund, the Focus Portfolio was also the
first of its kind on Wall Street. In February 2000, the three current
subadvisers of the Focus Portfolio were named Managers of the Decade by Money
Magazine (February 2000). At the end of this annual period, Focus Portfolio
Class A had returned 72.66% since inception, compared to the S&P 500's return of
28.11%.(1) (Returns do not include sales charges.) Our Focused Growth and Income
Portfolio also had reason to celebrate, as it ranked in the top 15% of its
category for the annual period, according to Lipper Analytics.(2)
Several other Style Select Portfolios also featured strong returns for the year.
The Large-Cap Value and Value portfolios each outperformed their respective
Lipper and Morningstar category averages for the 12 months ending 10/31/00. The
Mid-Cap Growth Portfolio outperformed its Lipper category average, and the
Aggressive Growth Portfolio outperformed its Morningstar objective during this
period as well. Such performance by both growth funds and value funds was
notable during a challenging period.
Moreover, we continued to enhance the Style Select Series portfolios by
introducing additional top-line investment managers to achieve greater
consistency of style and added performance potential. During the annual period,
Brian Clifford of SunAmerica Asset Management joined Miller Anderson & Sherrerd
and T. Rowe Price as a manager of 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. David Alger of Fred
Alger Management joined Marsico Capital Management and Jennison Associates as a
subadviser to the Focus Portfolio. And, most recently, Francis Gannon of
SunAmerica Asset Management joined Janus Capital Corporation and Jennison
Associates as a subadviser to the Large-Cap Growth Portfolio.
On the following pages, one Adviser from each of the eleven Style Select Series
portfolios discusses the management of their portion of the Portfolio over the
annual period and his or her investment outlook for the months ahead. You will
also find a complete financial summary and a listing of holdings for each
Portfolio.
As the Style Select Series continues to grow and mature, we are confident that
it will continue to provide an advantage you cannot find in most traditional
mutual funds--three world class managers in one fund. The Style Select
Portfolios also provide diversification of management styles, which helps manage
risk. Allocating your assets among growth, value and focused funds 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
SunAmerica Mutual Funds
(1) Past performance is no guarantee of future results. SunAmerica Style
Select Series Focus Portfolio Class A--One year average annual return with
maximum sales charge for the period ending 10/31/00: 5.78%; Average annual
return since inception with maximum sales charge for the period ending
10/31/00: 22.52%.
(2) Based on total return, sales charges not included. SunAmerica Style Select
Series Focused Growth and Income Portfolio Class A ranked 52 out of 488
Large-Cap Core funds for the 12 months ending 10/31/00. SunAmerica Style
Select Series Focused Growth and Income Portfolio Class A ranked 42 out of
305 Large-Cap Core funds since inception for the period ending 10/31/00.
1
<PAGE>
2000 Annual Report Style Select Series(R)
Large-Cap Growth Portfolio [LOGO]
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Fund Focus
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Large-Cap Growth Portfolio
Class A Outperforms S&P 500
Index for 12-Month Period Ended
October 31, 2000*
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Q&A
Francis Gannon, Portfolio Manager
SunAmerica Asset Management
How did you manage your portion of the Portfolio over the past fiscal year?
Robust economic growth drove the large-cap equity market to double-digit returns
in the first half of the fiscal year. Slower GDP growth, the ripple effects of
six interest rate hikes by the Federal Reserve Board, and higher oil prices led
to negative index returns in the second half. Volatility dominated the markets
throughout.
It is well worth noting that the portion of the Portfolio managed by SunAmerica
posted returns competitive with those of the S&P 500 Index since the Fund's
change in sub-advisers. We began managing the Large-Cap Growth Portfolio in May
2000. Therefore, our review focuses only on the period from our start date
through the end of the annual period on October 31, 2000, a highly challenging
period for the stock market.
When we first came on board with this Fund, we remained overweighted in the
technology sector throughout the period, but most recently reduced the
Portfolio's exposure to this group. We maintained an overweighting in the
capital goods sector, focusing on companies benefiting from technology and
telecommunications improvements. Given the ongoing strong economy and healthy
consumer spending, we built a strong position within the retail sector. We also
increased the Portfolio's weightings in energy, healthcare, and financial
services, as these sectors had begun to rebound toward the end of the first
calendar quarter.
Would you give us more specific examples?
We focused on select software companies such as BEA Systems and i2 Technologies,
fiber optics companies such as Ciena, and satellite-based telecommunications
companies such as General Motors Hughes. Other top performers included
Integrated Device Technologies, Juniper Networks, Sun Microsystems, Tyco,
Corning, and General Electric. We also took profits in several companies that
had big gains in 1999, such as Yahoo!, QUALCOMM, and Nokia--each of which we
sold before their stocks declined.
SPX Corp. is a capital goods company in the Portfolio that recently spun out to
the public its fiber optic business known as INRANGE Technologies. For most of
the annual period, the Portfolio benefited from its positions in Home Depot,
Wal-Mart, and sunglass manufacturer Oakley, Inc. Lucent Technologies, Microsoft
and Liberty Media disappointed, but we continue to hold these stocks, as each
continues to be a leader in its respective industry.
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<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
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Fund Objective
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Seeks long-term growth of
capital by investing generally
in equity securities of
Large-Cap companies, as
defined by Morningstar, Inc.
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Advisers
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[LOGO] JANUS
[LOGO] Jennison Associates
[LOGO] Sun America Asset Management
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What is your investment outlook for the remainder of the year and into 2001?
For several reasons, our long-term outlook for the equity markets is generally
favorable. These reasons include ongoing economic expansion, solid earnings
growth, an improved currency picture, a reduction in U.S. Treasury supply, and
strong merger and acquisition activity. At the same time, we expect volatility
and heavy sector rotation to continue. The primary risk we see ahead is earnings
disappointments. Should larger companies disappoint, the market may again
temporarily stumble.
Given this outlook, we intend to focus the Portfolio's investments in quality
companies that we believe present high growth opportunities.
*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 these indices.
3
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2000 Annual Report
Mid-Cap Growth Portfolio Style Select Series(R)
[LOGO]
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Fund Focus
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Mid-Cap Growth Portfolio Class
A Outperforms Lipper Category
Average and S&P Midcap 400
Index for 12-Month Period Ended
October 31, 2000*
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Q&A
Arden C. Armstrong, Portfolio Manager
Miller Anderson & Sherrerd, LLP
How did you manage your portion of the Portfolio over the past fiscal year?
Even in an environment of 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 twelve months ended
October 31, 2000.
Strong stock and sector selection were the primary drivers of our
outperformance. For example, the mid-cap equity market rallied strongly through
the end of 1999 and into the beginning of 2000, despite a campaign by the
Federal Reserve Board to raise interest rates and slow the U.S. economy. During
these months, we were invested in several aggressive growth sectors, including
technology. Around the middle of March, when the Fed made its fifth consecutive
rate increase, value stocks rotated into favor. As evidence of a moderating
economy began to mount, the mid-cap equity markets posted lackluster results. In
response, we focused the Portfolio toward stable growth names that should not be
as cyclical. While staying overweighted in technology, we also reduced our
holdings in select aggressive growth names that tend to underperform against a
slowing economic backdrop.
For the fiscal year, the Portfolio's overweighting in the technology sector
significantly contributed to returns. An underweighting in basic resources also
added to results, as this sector performed poorly. Consumer services was the
biggest detractor for the year, as many of the media and advertising companies
that we favored corrected after their strong run-ups in 1999. We were not
pleased with the performance of consumer Internet stocks, and we sold nearly all
of our holdings in that area. Telephone services stocks also underperformed for
the annual period, and our overweight position in this sector detracted from
results. Although current fundamentals are fairly strong, we trimmed our
holdings in this sector.
Would you give us more specific examples?
Effective stock selection was also a primary driver of Portfolio outperformance
for the fiscal year, especially in the technology and business services sectors.
Despite talk of a "tech wreck" amid great sector volatility, many
communications-related technology stocks in our portion of the Portfolio were
strong performers. Applied MicroCircuits, a semiconductor company, SDL Inc., a
fiber optic equipment manufacturer, and Ciena were the strongest contributors
during the year. Within our technology holdings, one of our biggest industry
weightings was in semiconductor stocks. In the spring, semiconductors did not
fall as quickly or as far as many of the other technology names, providing a
cushion for the Portfolio as technology stocks corrected. As we moved into the
fall, we aggressively trimmed our semiconductor weighting, refocusing our
technology holdings toward software, networking and optical stocks.
Business services companies added some diversity to the Portfolio during market
turbulence as well. Network Solutions, the dot.com registration company, and TMP
Worldwide Inc., an executive search firm that also runs the Internet site
Monster.com, turned in strong performance. We sold both of these stocks at
profits.
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Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
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Fund Objective
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Seeks long-term growth of
capital by investing generally
in equity securities of
Mid-Cap companies, as defined
by Morningstar, Inc.
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Advisers
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[LOGO] MILLER ANDERSON & SHERRERD, LLP
[LOGO] T. Rowe Price
[LOGO] Sun America Asset Management
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What is your investment outlook for the remainder of the year and into 2001?
Looking ahead, we see increasing signs of an economic slowdown, which could be
exacerbated by the recent spike in energy prices. In response, we intend to
continue positioning our Portfolio more heavily toward stable growth names and
away from companies with capital intensive and economically sensitive
businesses. We continue to be constructive on technology, however. We feel that
in the face of profit margin pressure, companies will choose to invest in
technology to improve operating efficiency. Overall, we continue to look for
companies with stable or improving business fundamentals and attractive returns
on capital.
*Past performance is no guarantee of future results. Portfolio returns do not
reflect the impact of sales charges. The S&P Midcap 400 Index is a
widely-recognized, unmanaged index of common stock prices. 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.
5
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2000 Annual Report Style Select Series(R)
Aggressive Growth Portfolio [LOGO]
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Fund Focus
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Aggressive Growth Portfolio
Class A Outperforms Morningstar
Objective Average and Russell
2500 Growth Index for 12-Month
Period Ended October 31, 2000*
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Q&A
Donna Calder & Team, Portfolio Manager
SunAmerica Asset Management
How did you manage your portion of the Portfolio over the past fiscal year?
Both small-cap and mid-cap stocks outperformed their large-cap brethren for the
fiscal year. SunAmerica's aggressive growth strategy was particularly effective
during the twelve months ended October 31, 2000. We are pleased to report that
our portion of the Aggressive Growth Portfolio outperformed the Russell 2500
Growth Index for the fiscal year. Effective sector allocation was particularly
key to our success.
While overweighted in the technology and telecommunications sectors in the first
half of the annual period, we have since reduced the Portfolio's allocation
here. We significantly trimmed the Portfolio's positions in Internet content and
software companies, including BroadVision, Vignette, Art Technology Group, and
Critical Path. We focused on three main trends.
o The Race for Broadband on the Internet. We believe that three emerging
technologies--optical networking, core IP routing, and broadband wireless
transmission--have the promise to boost the Internet's capacity, speed,
reliability and flexibility. The transition from copper to these new
technologies is driving explosive growth in fiber optics systems. The
primary beneficiaries of this trend include industry leaders and Portfolio
holdings Juniper Networks, Redback Networks, and Avanex.
o The Need for Better Networking and Data Storage. We expect growth in data
storage and storage networking to be explosive, as business activity
continues to move online and corporations need to move, manage, access,
back up, protect and store their data. This will be accomplished with
Storage Area Networks (SANs) as well as caching technology, the two
biggest growth markets in storage. The Fund added Brocade (network
switches), VERITAS (network management software) and BEA Systems
(e-commerce infrastructure software) to its holdings. These companies, as
well as Portfolio holding Network Appliance, Inc. (SANs and caching
hardware), are and should continue to be the primary beneficiaries of this
trend.
o The Approach of Personal Digital Appliances (PDAs). Advances in
wireless-access technology are also visible in the migration from PCs to
handheld devices, known as PDAs. Currently, we believe these handheld
Internet devices represent a largely untapped market, but are poised to
take off when the 3G global wireless network standard is adopted.
Would you give us more specific examples?
We maintained the Portfolio's overweighting in biotechnology, as an incredible
amount of development is taking place in this sub-sector, particularly in
research into therapies for cancer and inflammatory conditions. We also
concentrated on genomics companies, which are enabling the development of new
therapies through the discovery, analysis and expression of genes and proteins.
We believe biotech is going to be an exciting and profitable place to be
invested over the next three to five years. We also established a position
during the period in specialty pharmaceuticals through such companies as Biovail
and Alza Corp. These specialty pharmaceuticals, which tend to have more
consistent revenues and earnings growth and more diversified product lines,
successfully served as a defensive play for the Portfolio in a highly volatile
market.
The oil services companies that we bought in December 1998 experienced their
first turnarounds in quarterly earnings during the first quarter of 2000 and
performed well through the rest of the fiscal year. The price of oil and gas
rose due to growing demand, declining inventories and low production. By the
second calendar quarter, we trimmed our oil services positions and redeployed
those assets into land drillers. We added to the Portfolio's position in Nabors
Industries and bought Apache and Devon Energy. As oil prices continued to rise
and drilling activity picked up, these holdings contributed to Portfolio
performance.
We also established a position in alternative power producers, i.e. low cost
producers of electric power generated from natural gas. These companies are
benefiting from an increasingly deregulated utilities industry. We bought
Calpine, Dynegy, and Southern Energy for the Portfolio.
6
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
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Fund Objective
------------------------------
Seeks long-term growth of
capital by investing generally
in equity securities of small
and medium-sized companies
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Advisers
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[LOGO] JANUS
[LOGO] Sun America Asset Management
[LOGO] WARBURG PINCUS
----------------------------------------
What is your investment outlook for the remainder of the year and into 2001?
Our long-term outlook for the equity markets in general is favorable. Moderating
economic growth, tame inflationary pressures and high labor productivity are all
positive factors. So, too, are strong small-cap and mid-cap profit estimates and
attractive relative valuations in these equity markets. At the same time, we
expect volatility and heavy sector rotation to continue. The primary risk we see
ahead is earnings disappointments. Given this outlook, we intend to focus the
Portfolio's investments in quality companies that we believe offer consistent
revenue and earnings growth.
*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 of October 31, 2000. They are subject to
change every month. 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.
7
<PAGE>
2000 Annual Report Style Select Series(R)
Large-Cap Value Portfolio [LOGO]
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Fund Focus
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Large-Cap Value Portfolio Class
A Outperforms S&P 500 Index and
Morningstar and Lipper Category
Averages for 12-Month Period
Ended October 31, 2000*
-------------------------------
Q&A
Christopher C. Davis/Kenneth C. Feinberg, Portfolio Managers
Davis Selected Advisers, L.P.
How did you manage your portion of the Portfolio over the past fiscal year?
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 management teams, and established 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. Using this discipline, our portion of the Large-Cap Value
Portfolio outpaced the return of the S&P 500 Index for the twelve months ended
October 31, 2000.
The past fiscal year proved to be another period of tremendous stock price
volatility. The S&P 500 Index produced double-digit returns in the last months
of 1999, but then fell to a -1.81% return for the year 2000 to date.**
Many investment firms attempt to explain recent price fluctuations by citing
short-term market pressures, such as interest rate concerns, high oil prices and
a weak euro. However, looking at the broad picture, we believe there is
reasonable and rational grounds for such volatility. First, although the economy
remains strong, with high levels of productivity, corporate earnings are
unlikely to expand at the same rate as they have over the past decade. Second,
while the Internet is enhancing the productive power of the economy and
energizing many businesses, it is also creating structural changes throughout
the economy that are challenging companies to retool their business models from
the supply chain to delivery. Most importantly, there has been a decline in the
quality of reported earnings. In our view, Wall Street's obsession with
quarterly earnings results has created irrational expectations among investors.
It has also prompted companies to use aggressive accounting practices to create
the illusion of earnings consistency to protect their stock prices. In such an
environment, companies will inevitably fall short of Wall Street's earnings
expectations.
Based on the philosophy that volatility can ultimately become a friend to a
smart, vigilant investor, our portion of the Portfolio's outperformance is
primarily attributable to success in picking stocks from among the companies
that Wall Street has shunned.
Would you give us more specific examples?
We were able to develop strong long-term conviction in American Home Products,
despite its litigation worries, and in Tyco International, despite criticisms of
its accounting practices. Both were strong performers for the Portfolio in 2000.
During the fiscal year, we similarly built positions in Costco Wholesale, Merck
and Motorola.
The performance of some holdings was disappointing. Lexmark International, the
second largest printer maker, recently reported weak quarterly earnings, and its
stock price suffered. We believe the earnings shortfall was largely attributable
to the weak euro and a timely de-stocking of retail inventories. We continue to
hold this stock, as we remain confident in company management and its ability to
reinvigorate its operations. AT&T was another disappointment. Its long distance
business has suffered. Still, we believe AT&T remains one of the few companies
that has the resources to build a true seamless, global data and voice
communications network over the next decade. Thus, we continue to hold our
position at this time and are monitoring its current plans for restructuring.
8
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
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Fund Objective
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Seeks long-term growth of
capital by investing in equity
securities of Large-Cap
companies, as defined by
Morningstar, Inc., using a
"value" style of investing
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Advisers
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[LOGO] DAVIS SELECTED ADVISERS
[LOGO] Thornburg Investment Management
[LOGO] WELLINGTON MANAGEMENT
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What is your investment outlook for the remainder of the year and into 2001?
We continue to seek out high quality, well-managed companies with strong growth
prospects and buy them when the market presents us with value prices. Our
research team is dedicated to identifying company management teams with smart
business plans, entrepreneurial cultures, wise allocation of capital and smart
application of technology. Once we build a position, we intend to hold it for
the long term. We will not change our investment discipline in reaction to
market volatility, momentum, or investor "fads." We confidently believe our
method is successful in building wealth over full market cycles.
*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. Morningstar proprietary ratings reflect historical risk-adjusted
performance as of October 31, 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.
**The 1-year return for S&P 500 Index is 6.09% for the period ending 10/31/00.
9
<PAGE>
2000 Annual Report Style Select Series(R)
Value Portfolio [LOGO]
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Fund Focus
-------------------------------
Value Portfolio Class A
Outperforms S&P 500/BARRA Value
Index and Morningstar and
Lipper Category Averages for
12-Month Period Ended October
31, 2000*
-------------------------------
Q&A
Phillip Davidson/Scott Moore, Portfolio Managers
American Century
How did you manage your portion of the Portfolio over the past fiscal year?
At American Century, we managed our portion of the Value Portfolio utilizing our
classic multi-cap value driven strategy. This strategy seeks to identify
leading, financially strong 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 scour the domestic stock universe for companies in the
cheapest half of the universe. We then conduct fundamental analysis on this
narrowed group to determine which provide the best risk-reward potential.
For the twelve months ended October 31, 2000, our portion of the Portfolio
outperformed the S&P 500/BARRA Value Index. It also outperformed the S&P 500
Index, a benchmark of the broader equity market, over the same period.* Such
performance is particularly impressive given the bifurcated nature of the U.S.
equity market over the fiscal period. The first four months were dominated by
growth stocks, and in particular, technology and other "New Economy" sectors.
The next eight months experienced a run in value stocks and traditional "Old
Economy" sectors. The catalyst for this change in market preference appears to
have been the effects of six interest rate increases by the Federal Reserve
Board and the resultant slowing of U.S. economic growth. Combined with continued
strengthening of the dollar vs. the euro, many multinational and technology
companies warned of lower than expected earnings and guided down future growth
expectations. Investors shifted their preference to more reasonably priced
companies with more predictable earnings prospects--precisely where the
Portfolio was positioned.
The sectors contributing most to the Portfolio's one-year performance were
chemicals, electric utility, heavy electrical equipment, and life & health
insurance companies. The biggest detractors from performance were home products,
telephone, and food and beverage stocks.
Would you give us more specific examples?
For the annual period, the best performing stock for the Portfolio was Bush
Boake Allen. This specialty chemical company is a global producer of flavor,
fragrance and aroma chemicals used in a variety of consumer products. After
International Paper put its nearly 70% ownership in the company up for sale,
industry leader International Flavors and Fragrance announced in early September
that it would buy Bush Boake Allen. We sold the stock at a significant gain.
The Portfolio's second best performer was in the electric utilities sector. FPL
Group is one of the highest quality utility companies and benefited during the
period from strong customer growth and rising per customer usage. It has
exceeded earnings expectations over the past several quarters. The announcement
in July that FPL would merge with Entergy Corporation to form one of the largest
utility companies in the country was received favorably by the market. Two other
top performers for the Portfolio were in the financial services sector--MetLife
and Summit Bancorp. We sold our positions in both of these companies at
substantial gains for the Portfolio.
Sprint Corp. was the major disappointment for the Portfolio during the twelve
months. Its poor performance was primarily due to a failed acquisition by
WorldCom and slowing revenue growth in Sprint's core long distance business.
Looking longer term, we believe that Sprint's strategically well-positioned
assets and solid financial position, coupled with the industry's excellent
growth potential, bode well for the firm. We are holding this position. A
Ralston Purina security convertible into Interstate Bakeries Corporation stock
also detracted from performance. We exited the stock on relatively favorable
terms.
10
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
--------------
Fund Objective
-----------------------------
Seeks capital appreciation by
identifying medium-sized and
large companies thought to be
undervalued by the market
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Advisers
-------------------------------
[LOGO] AMERICAN CENTURY
[LOGO] DAVIS SELECTED ADVISERS
[LOGO] NEUBERGER BERMAN
-------------------------------
What is your investment outlook for the remainder of the year and into 2001?
Our outlook for the U.S. equity market is generally optimistic. Although it is
too soon to know if the resurgence in value-oriented investing is sustainable,
we remain committed to our disciplined, classic value investment strategy. We
continue to search for undervalued businesses that are temporarily out of favor
due to some transitory market or company specific issue. The good news is that
we are finding a wealth of companies that meet our investment criteria. We
believe that these companies continue to offer investors potential for strong,
risk-adjusted returns at reasonable prices.
*Past performance is no guarantee of future results. Portfolio returns do not
reflect the impact of sales charges. The S&P 500/BARRA Value Index is a
widely-recognized, capitalization-weighted (companies with larger market
capitalizations have more influence than those with smaller market
capitalizations) index of growth and value stocks as measured by book value.
Morningstar proprietary ratings reflect historical risk-adjusted performance as
of October 31, 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.
11
<PAGE>
2000 Annual Report Style Select Series(R)
Small-Cap Value Portfolio [LOGO]
----------
Fund Focus
-------------------------------
Small-Cap Value Portfolio Class
A Outperforms Russell 2000
Value Index for 12-Month Period
Ended October 31, 2000*
-------------------------------
Q&A
Herbert W. Gullquist/ Eileen D. Alexander & Team, Portfolio Managers
Lazard
How did you manage your portion of the Portfolio over the past fiscal year?
Our team employs a bottom-up value investment process. We focus on a company's
financial productivity and long-term sustainability of returns rather than just
its price to earnings multiples and earnings projections.
Small-cap value stocks outperformed both small-cap growth stocks and large-cap
stocks for the twelve months. For the fiscal year, the Russell 2000 Value Index
returned 17.30%, as compared to 16.16% for the Russell 2000 Growth Index.
Volatility remained high throughout.
At the start of the fiscal year, small-cap outperformance was relatively narrow,
limited primarily to the growth-oriented technology and biotechnology sectors.
When the market environment shifted dramatically in March, investors abandoned
speculative technology stocks and favored the strong fundamentals and attractive
valuations offered by small-cap value stocks. Toward the end of the period,
rising oil prices, the persistent weakness of the euro and uncertainty over the
election added to market volatility. Any company that failed to meet earnings
expectations was punished severely. Highly valued technology and
telecommunications stocks declined, while value sectors such as utilities and
finance generated strong gains.
Given this backdrop, we are pleased to report that our portion of the Small-Cap
Value Portfolio outperformed the Russell 2000 Value Index for the twelve months
ended October 31, 2000. ** Individual stock selection in the consumer
discretionary, technology and finance sectors drove our performance most. So,
too, did our underweight position in the technology sector and overweight
position in the energy sector. An underweighting in utilities, an overweighting
in consumer discretionary stocks, and stock selection within the energy sector
detracted from performance.
Would you give us more specific examples?
While the consumer discretionary sector was not a top performer for the year,
the Portfolio's holdings there performed particularly well in the first calendar
quarter of 2000, driven by Polaroid and Pier 1 Imports. In technology, many of
our holdings defended well amid the weakness in that sector from March onward,
due to their modest valuations, proven business plans, strong competitive
positions and tangible earnings. Mentor Graphics, whose software supports
automated electronic design, and electronics company Diebold both generated
strong gains for the Portfolio. Acxiom, one of the leaders in the information
management industry, rose on strong demand for its new products. Our financial
holdings were exceptionally strong during the third quarter, due to declining
interest rates and increased merger activity in the sector. Everest Reinsurance
Group and Queens County Bancorp both rose sharply.
The Portfolio's commercial services holdings had mixed results. Spherion, a
commercial staffing firm, American Management Systems, a systems consulting
firm, and Valassis Communications, a producer of coupon fliers in newspapers,
each detracted from returns. However, many of the best performing stocks in the
Portfolio dramatically rebounded from earlier weakness. These stocks included
Toll Brothers, the largest builder of luxury homes in the U.S., Sensormatic, a
supplier of electronic security systems to retailers, and Black Box, a provider
of networking products.
During the fiscal year, we sold our position in AAR Corp, supplier of
after-market products and services for the aviation/aerospace industry, upon a
deterioration of its fundamentals. We sold Cordant and Devry Inc. at profits,
when each appreciated to their respective price targets. We established new
positions in Allied Capital Corporation, a leading provider of capital to small
and middle-market private companies, and in Choice Point, a leading provider of
risk management and fraud prevention information to insurance companies,
corporations and government entities. We also purchased Manor Care, which
operates over 450 long-term care centers, assisted living facilities, outpatient
rehab clinics, home health care and management services facilities. Wild Oats
Markets, another new purchase for the Portfolio, operates a natural foods
supermarket chain.
12
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
--------------
Fund Objective
------------------------------
Seeks long-term growth of
capital by investing in equity
securities of Small-Cap
companies, as defined by
Morningstar, Inc., using a
"value" style of investing
------------------------------
--------
Advisers
------------------------------
[LOGO] BERGER
[LOGO] LAZARD
[LOGO] THIRD AVENUE FUNDS
------------------------------
What is your investment outlook for the remainder of the year and into 2001?
We believe the last four months of the fiscal year provided evidence that the
market environment has fundamentally and irreversibly changed since 1999 when
momentum was investors' sole focus and a company's fundamentals were nearly
irrelevant. We intend to continue to take advantage of the market's volatility
to invest in those companies that are positioned to succeed in this changing
environment. We believe current market conditions are particularly suited to our
disciplined relative value style of investing, which provides exposure to the
technology-driven "New Economy" while avoiding speculative excesses. In our
view, the equity market's return to fundamentals is healthy and should continue
into 2001. Even in a "New Economy," a company's true value is a function of its
sustainable financial productivity.
*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 these indices.
**One Year Average Annual Return with maximum sales charge (Class A) for the
period ending 10/31/00: 12.21% Average Annual Return since inception with
maximum sales charge (Class A) for the period ending 10/31/00: 1.66%.
13
<PAGE>
2000 Annual Report Style Select Series(R)
Focus Portfolio [LOGO]
----------
Fund Focus
-------------------------------
Focus Portfolio Class A
Outperforms S&P 500 Index and
Lipper Category Average for
12-Month Period Ended October
31, 2000*
-------------------------------
Q&A
Spiros "Sig" Segalas, Portfolio Manager
Jennison Associates
How did you manage your portion of the Portfolio over the past fiscal year?
The equity market underwent a dramatic change of mood in the middle of the
Portfolio's fiscal year ended October 31, 2000. Early in the period, investors
strongly favored growth stocks--particularly technology and telecommunications.
Then market preference alternated rapidly and sharply between growth and value
styles. Our portion of the Focus Portfolio significantly outperformed the S&P
500 Index for the annual period. However, most of the gains came during the
first half. During the second half, growth stocks underperformed an overall
market that was in decline.
The extraordinary rise in several of our technology stocks was the largest
contributing factor to performance. Some of the gains from the Portfolio's
technology holdings were locked in by sales near the market top. However some
shares fell in value, when the technology sector began a sharp decline in March
2000. For the fiscal year as a whole, our technology holdings had an average
weighting of more than 38% of net assets. Communication services had an average
portfolio weighting of more than 22%.
We redeployed assets from technology sector sales primarily into healthcare and
financial services stocks. As investors became more confident that economic
growth was slowing to sustainable levels, financials as a group benefited. In
healthcare, our focus was on drug and biotechnology stocks.
Would you give us more specific examples?
Our portion of the Portfolio's best performing holdings for the fiscal year were
Citigroup, Merrill Lynch, Cisco Systems, Texas Instruments, Hewlett Packard, and
EMC Corp. Annual returns for each ranged from 22% to nearly 49%. On the other
hand, IBM, Intel Corp., Nokia Corp., NTL Inc. and Nortel Networks each
experienced double-digit declines.
14
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
--------------
Fund Objective
----------------------------
Seeks long-term growth of
capital through a focused
portfolio of no more than 30
stocks
----------------------------
--------
Advisers
------------------------------------------
[LOGO] FRED ALGER MANAGEMENT, INC.
[LOGO] Jennison Associates
[LOGO] MARSICO Capital Management LLP
------------------------------------------
What is your investment outlook for the remainder of the year and into 2001?
We believe that over the past few years, investors gradually came to realize the
growth potential of technology firms. However, now-after the extraordinary gains
of the past two years--much of that potential has been priced into the sector's
stocks. This doesn't mean that technology's growth will subside or that its
stocks are overpriced. In our view, it means that technology has, as a group,
about the same possibilities for share price appreciation from its current
levels as the rest of the market does. As for the overall market, we believe
that an unusual period of large gains by a few favored growth stocks is coming
to an end and that markets are returning to historical norms with moderate gains
across a broader spectrum.
As a result, we expect that individual stock selection, not sector selection,
will be required to earn above-market returns over the next few years. We think
that's a good environment for the Focus Portfolio, where each of the three
managers, including Jennison, employs a research-intensive, concentrated,
aggressive approach to growth investing.
*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. 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.
15
<PAGE>
2000 Annual Report Style Select Series(R)
Focused TechNet Portfolio [LOGO]
----------
Fund Focus
-------------------------------
Focused TechNet Portfolio
Introduced to Investors on May
22, 2000; Class A Cumulative
Return of 24.16% for Period
from Inception through October
31, 2000*
-------------------------------
Garrett Van Wagoner/Raiford Garrabrant, Portfolio Managers
Van Wagoner Capital Management
How did you manage your portion of the Portfolio over the past fiscal year?
The Focused TechNet Portfolio's inception date was May 22, 2000. Given that this
is the Portfolio's first shareholder report, it is well worth reviewing the
mutual fund's stylized structure and our investment management strategies.
The Focused TechNet Portfolio seeks capital appreciation by investing generally
in 30 equity securities of companies of any size that the advisers believe are
leading producers or beneficiaries of technological innovation. This stylized
structure offers the three portfolio managers-Van Wagoner Capital Management,
Dresdner RCM Global Investors and SunAmerica Asset Management-flexibility in our
respective stock selection processes. Each portion of the Focused TechNet
Portfolio represents each team's ten best ideas at any given time and is not a
diversified portfolio.
At Van Wagoner, we manage our portion of the Portfolio by intensively
researching company fundamentals and industry trends, seeking to invest in what
we consider the very best companies with the greatest potential for long-term
growth--what we call the "best of breed." For the period from inception through
October 31, 2000, our portion of the Portfolio dramatically outperformed the
NASDAQ National Market Composite Index. True to the nature of a focused
portfolio, the return masks the market volatility that occurred during this
period.
For example, June was strong and July started that way as well. However, the
month soon hit a sell-off that lasted into early August. Then a big wave lifted
the markets even beyond their earlier quarterly high, only to recede and take
all the numbers right back down again. In fact, while September is historically
the toughest month for the equity market, this September was the worst for the
NASDAQ Composite in its 29-year history. Extremely high levels of volatility
continued to characterize the technology sector and the broader U.S. equity
markets in October. The NASDAQ Composite ended the month down 9.82%. During this
period, investors were concerned not so much with interest rates, but with
whether the economy was heading for the much-discussed "soft landing." Rising
oil prices didn't help any. Fears that the economic slowdown could turn into a
recession helped fuel the volatility. There was also uncertainty surrounding the
presidential election.
Finally, we were reminded that not all tech stocks are created equal. There's a
definite shift in leadership going on. The Big Five--Intel, Microsoft, Dell,
Worldcom and Cisco--are starting to look like "Old Economy" companies, subject
to swings in economic and product cycles. The smaller companies appear to be
driving technology forward, away from the desktop focus and toward networking
and the Internet.
Would you give us more specific examples?
After a strong June, we took some profits in the Internet sector, but it remains
the key theme across our portion of the Focused TechNet Portfolio. Businesses
continue to expand and upgrade their networks, as the role of electronic
communications just keeps on growing. We invest in the companies that provide
the infrastructure and the software platforms enabling this growth. Our holdings
include Ariba and Interwoven, both of which continued to grow right through the
period's struggles. Ariba's software helps businesses reduce costs. Interwoven
helps organizations manage web site content. Juniper Networks, Netegrity and
Brocade Communications Systems also performed well for the Portfolio.
Data storage is another key theme for the Portfolio. As more and more businesses
are using the Internet as a tool for both cost-saving and revenue-producing
opportunities, the need to protect, manage, track, access and store data
increases exponentially. The Portfolio's primary holding in this group is
StorageNetworks, Inc.
Telecommunications services continued to be key for us as well, although this
sector struggled over the period. Increased competition among long distance
providers and the ongoing shift from voice to data put pressure on several of
these companies, including Portfolio holding Broadcom Corp.
16
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
--------------
Fund Objective
------------------------------
Seeks capital appreciation by
investing generally in 30
equity securities of companies
of any size that the advisers
believe are leading producers
or beneficiaries of
technological innovation.
------------------------------
--------
Advisers
----------------------------------------
[LOGO] VAN WAGONER FUNDS
[LOGO] Dresdner RCM Global Funds
[LOGO] Sun America Asset Management
----------------------------------------
What is your investment outlook for the remainder of the year and into 2001?
There is so much uncertainty at the moment regarding oil prices, the pace of the
economy, the impact of merger and acquisition activity and the presidential
election that it is difficult to look too far ahead. We do believe that market
volatility will continue to be high. However, we also are quite pleased with how
our Portfolio companies are positioned, and we expect good news from them into
2001. We intend to continue to focus on those companies that we believe will
perform well and drive the economy. In other words, those companies whose
products and management are making them the market's new leaders. Regardless of
short-term market conditions, we believe the long-term demand for increased
bandwidth, computer networking, web initiatives and further technological
innovation has only just begun.
*Past performance is no guarantee of future results. Portfolio returns do not
reflect the impact of sales charges.
17
<PAGE>
Focused Growth 2000 Annual Report Style Select Series(R)
and Income Portfolio [LOGO]
----------
Fund Focus
-------------------------------
Focused Growth and Income
Portfolio Class A Ranks in Top
11% of Lipper Category Average
and Outperforms Morningstar
Category Average and S&P 500
Index for 12-Month Period ended
October 31, 2000*
-------------------------------
Thomas F. Marsico, Portfolio Manager
Marsico Capital Management
How did you manage your portion of the Portfolio over the past fiscal year?
The U.S. stock market experienced significant volatility over the past fiscal
year. This required us to be very nimble in managing the Portfolio. At times,
the market seemed to make dramatic moves based on hard news, such as cyclically
rising interest rates, higher energy prices, or a major corporation's earnings
announcement. At other times, the market seems to have traded based on investor
perceptions. Valuation fluctuations were wide and short-lived. For example,
biotechnology companies soared early in the year, sold off sharply, and then
rallied. Telecommunications companies, one of the big winners in 1999, were out
of favor for much of 2000. Interestingly, such volatility was not confined to
"New Economy" sectors. Stocks of well-established retail companies also rose and
fell substantially over the period.
Given these turbulent markets, it is well worth noting that our portion of the
Portfolio outperformed the S&P 500 Index for the twelve months ended October 31,
2000. This strong performance is primarily attributable to effective individual
stock selection, particularly in the first and last quarters of the fiscal year.
Also benefiting performance was our decision to reduce the Portfolio's position
in technology stocks over fiscal 2000.
Would you give us more specific examples?
In the first fiscal quarter, the Portfolio's holdings registered strong gains,
buoyed by an overall positive market environment. Performance was boosted by the
Portfolio's technology holdings, such as QUALCOMM, EMC Corp., Cisco Systems and
Sun Microsystems. A diverse group of other companies positively impacted
investment results, too. These included Citigroup, Time Warner and Genentech.
On the heels of such strong gains, the second and third fiscal quarters were
characterized by a high degree of downside volatility. A technology sector
sell-off began in March and continued to do damage to many of the Portfolio's
holdings through May--especially those in the networking, semiconductor and
telecommunications sub-sectors. Retail, cable and multimedia also suffered. We
began to implement several changes in anticipation of a slower-growth economy.
For example, we maintained select holdings in Internet infrastructure, optical
systems and components, and software companies, but we reduced a number of
positions in the technology sector with high valuations. We increased positions
in the financial services sector and added selectively to health care and
consumer-related companies. We also initiated some new positions in "lifecycle
change" companies. These are organizations experiencing a fundamental change,
such as a new product, acquisition or management, which may create the potential
for improved future earnings growth.
In the last fiscal quarter, this strategic repositioning began to have a
positive impact on Portfolio performance. Automatic Data Processing and Adobe
Systems registered strong gains in the technology sector. Other contributors to
performance included Anheuser-Busch Cos. and General Dynamics.
18
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
--------------
Fund Objective
------------------------------
Invests primarily in equity
securities believed to be
poised for growth, undervalued
or likely to pay quarterly
dividends
------------------------------
--------
Advisers
------------------------------------------
[LOGO] MARSICO Capital Management LLP
[LOGO] Sun America Asset Management
------------------------------------------
What is your investment outlook for the remainder of the year and into 2001?
Based on a number of important macroeconomic underpinnings, we believe that the
long-term prospects for U.S. equities are quite positive. For one, we believe
that the U.S. is moving into a more favorable interest rate environment. In our
opinion, the Federal Reserve Board has most likely completed its series of rate
increases or, if not, has clearly made the majority of its move. There is
increasing evidence that an economic slowdown is at hand in the U.S., and at the
same time, we do not feel there is a high risk of recession.
We continue to believe that U.S. inflation remains relatively benign, despite
the spike in energy prices. Housing starts and auto sales appear to have slowed.
Real unit labor costs have declined. Real wage increases have been modest to
date, despite the tight labor markets that have prevailed for the last several
years. Productivity gains have continued to surprise on the upside. We believe
that such productivity gains are sustainable, as technological innovation
continues. Another important positive factor for the economy is budget surpluses
at the federal and state levels.
We do expect that volatility in the stock market will continue. Therefore, we
believe the importance of good stock selection--rather than general sector or
industry allocation--will increase even further as the new millennium
progresses. As always, we are completely focused on conducting hands-on,
intensive analysis of companies in our investment universe. We also remain
committed to seeking long-term growth of capital and current income, i.e. total
return potential, to help investors meet their growth and income investment
needs no matter what the market environment.
*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.
Morningstar proprietary ratings reflect historical risk-adjusted performance as
of October 31, 2000. They are subject to change every month. 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.
19
<PAGE>
2000 Annual Report Style Select Series(R)
Focused Value Portfolio [LOGO]
----------
Fund Focus
-------------------------------
Focused Value Portfolio Class A
Introduced to Investors on
November 1, 1999; Class A
Cumulative Return of 30.08% for
Period from Inception through
October 31, 2000*
-------------------------------
Q&A
Martin J. Whitman, Portfolio Manager
Third Avenue Funds
How did you manage your portion of the Portfolio over the past fiscal year?
We adhered to what we call our "safe and cheap" philosophy to acquire securities
that we believed were selling at significant discounts to the underlying
business values. 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 business
person might. For example, this might mean buying at a significant discount to
what the underlying company might be worth in a takeover or going-private
transaction.
In general, value stocks underperformed growth stocks for the fiscal year.
However, we are pleased to report that for the period from inception through
October 31, 2000, our portion of the Focused Value Portfolio notably
outperformed both the S&P 500 Index and the Russell 2000 Value Index. The Fund
was first introduced on November 1, 1999. **
In our portion of the Portfolio, merger and acquisition activity amongst a
couple of our holdings significantly boosted fiscal year returns. Financial and
real estate-related stocks also made meaningful contributions during the second
half of the period.
Would you give us more specific examples?
Portfolio holding La Salle Re Holdings Ltd. merged with another insurance
company known as Trenwick Group. And Portfolio holding Silicon Valley Group,
Inc., an electronics equipment company, agreed to be acquired by ASM
Lithography. Both deals were at significant premiums to our cost basis. The
stocks that were particularly helpful during the second six months included
insurance company First American Financial Corp., real estate company Catellus
Development Corp. and housing company D.R. Horton, Inc.
Elsewhere, we bought as the market gave us opportunities. Given that we are buy
and hold investors, turnover was low. Our portion of the Focused Value Portfolio
represents our team's ten best ideas at any point in time.
20
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
--------------
Fund Objective
------------------------------
Seeks long-term growth of
capital by investing generally
in 30 equity securities that
the advisers believe are
undervalued in the market,
without regard to market
capitalization
------------------------------
--------
Advisers
-------------------------------------------
[LOGO] AMERICAN CENTURY
[LOGO] THIRD AVENUE FUNDS
[LOGO] Thornburg Investment Management
-------------------------------------------
What is your investment outlook for the remainder of the year and into 2001?
We will continue to apply the same value discipline that we have practiced for
over fifteen years. That is, we will employ a strict "bottom-up" stock selection
approach with a very specific focus on individual companies' 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.
**Focused Value Portfolio's return does not take into account sales charges. If
it had, the total return would be lower. The Focused Value Portfolio's
cumulative return since inception (Class A) is 30.08% for the period ending
10/31/00.
21
<PAGE>
2000 Annual Report Style Select Series(R)
International Equity Portfolio [LOGO]
----------
Fund Focus
-------------------------------
International Equity Portfolio
Class A Outperforms MSCI EAFE
Index for 12-Month Period Ended
October 31, 2000*
-------------------------------
Q&A
Michael Levy/Robert L. Reiner, Portfolio Managers
Bankers Trust
How did you manage your portion of the Portfolio over the past fiscal year?
We use the term "growth at a reasonable price" to describe our philosophy, which
combines the best of the value and growth styles. Our team identifies
undervalued stocks with long-term growth potential and a catalyst that may
realize the inherent value of the company. This company-specific analysis seeks
to identify the best investment opportunities, regardless of country, industry
or sector.
This past fiscal year was a challenging one for international equity managers.
Most world equity markets achieved new highs during the closing weeks of 1999,
as Y2K fears abated. However, lingering concerns that stock valuations had
become stretched while economic fundamentals were weakening led investors to
flee European, Japanese, Asian and emerging equities markets during much of
2000. A series of interest rate increases in the U.S. and Europe, as well as
Japan's first rate hike in a decade, further clouded investor sentiment. A
dramatic rise in the tech-laden NASDAQ Composite Index in the early months of
the fiscal year and a relatively tight correlation with foreign stocks offering
similar attributes was followed by a sharp downturn in global equity indices
beginning in mid-March. The dot.com bubble burst, and sectors rotated abruptly.
Valuations, which seemed to matter little to investors during the first half of
the period, suddenly became important.
Particularly impacting Europe was the inability of central banks to stop the
euro currency from touching new lows against the US dollar and Japanese yen. In
Japan, concerns regarding the pace of economic recovery and restructuring
efforts unwound 20 months of strong Nikkei performance. Emerging markets were
hurt by a belief that slower world economic growth would cut short domestic
recovery and export demand.
Given this difficult environment, we are especially pleased to report that our
portion of the International Equity Portfolio outperformed its benchmark, the
MSCI EAFE Index. We maintained a neutral weighting in the European region with a
preference for the continent, as the positive effects of Economic and Monetary
Union are already being seen. We were underweight the United Kingdom and Japan,
EAFE's largest markets, because better stock specific investment opportunities
lay elsewhere. We significantly reduced exposure to Asia ex-Japan and emerging
markets due to sensitivities to a slowing global economic growth rate. We
remained buyers of Canada, the best performing market of the fiscal year,
because of exciting technology, capital equipment and financial sector
opportunities there.
Would you give us more specific examples?
Many stocks in the Portfolio were buffeted by heightened volatility and
short-term sector rotations in world markets. We significantly reduced our
exposure to the telecommunications and technology sectors on rich valuations,
peaking fundamentals and higher capital expenditure requirements. We sold or
trimmed several semiconductor-related companies such as ASM Lithography,
STMicroelectronics, PC giant Fujitsu, Samsung Electronics, Hyundai Electronics
and Malaysian Pacific Industries. We took profits in communications equipment
manufacturers Nokia, Alcatel and Nortel and sold Ericsson. We reduced software
names including Sema Group, Intershop Communications and Satyam Computer. We
reduced or sold several telecom providers, including KPNQwest, Sonera,
Telefonica, Cable & Wireless, Colt, NTT Docomo, SK Telecom and Telmex. Still, we
maintained positions in attractively priced technology stocks.
We moved to an underweighted position in media, based on stretched valuations
and the combination of a weakening global economy and expectations of a sharp
fall-off in Internet advertising. We sold cable and broadcast players Canal
Plus, NTL, PT Multimedia and Ucoma as well as media concerns Seat Pagine, TF1,
News Corp., Singapore Press Holdings and Televisa.
We significantly re-oriented the Portfolio towards financial stocks. In the
insurance group, we added Canada's Sun Life and Manulife, Italy's RAS and
Generali, and Switzerland's Zurich Financial and Swiss Reinsurance. Other
financials that were added include Germany's Dresdner Bank, Netherlands' ABN
Amro and Fortis, Spain's Banco Popular, UK's Royal Bank of Scotland and
Hungary's OTP Bank. We sold Japanese consumer finance companies Nichiei and
Shohkoh Fund, due to deteriorating industry fundamentals.
22
<PAGE>
Style Select Series 2000 Annual Report [LOGO] SunAmerica
Mutual Funds
--------------
Fund Objective
------------------------------
Seeks long-term growth of
capital by investing in equity
securities of issuers in
countries other than the
United States
------------------------------
--------
Advisers
----------------------------------------
[LOGO] Bankers Trust
[LOGO] T. Rowe Price International, Inc.
----------------------------------------
We increased holdings in the energy and oil services sector to capture improving
industry fundamentals and the recovery in drilling activity. Among our purchases
were BP Amoco, Shell T&T, Petrobras, PetroChina, Petroleum Geo Services, Saipem
and alternative energy play Vestas Wind Systems. We added to our position in
Total Fina Elf.
Other activity in the Portfolio focused on defensive growth areas. In the
consumer staples sector, we either established or added to positions in food
retailer Ahold, food producers Nestle and Numico, household products
manufacturer Reckitt Benckiser and tobacco firm Altadis. We overweighted
pharmaceutical and biotechnology with Aventis, Elan, Glaxo Wellcome, Serono and
Celltech. Select consumer discretionary firms that we viewed as more resilient
to any consumption slowdown were also added. These included Japan's audio and
video equipment leader Pioneer and France's luxury goods manufacturer Christian
Dior.
What is your investment outlook for the remainder of the year and into 2001?
As we near the peak of the current interest rate cycle, we believe there is
considerable room for rate reductions in the coming year to spur economic
growth. We believe that in the near term earnings expansion may slow to reflect
moderate global demand. Our most likely scenario is for a "soft landing."
In Europe, we anticipate a firmer euro and greater investor confidence in
equities in the months ahead. In Japan, we believe that the much-trumpeted
recovery offers little of substance for many deep-rooted and fundamental
reasons. Thus, investors will need to be selective and willing to trade out of
positions quickly in order to preserve gains in this contradictory market. In
Asia ex-Japan and the emerging markets overall, concerns about slowing global
growth, the global technology cycle, restructuring, commodity prices and the
direction of the US economy are likely to continue to weigh on equities for the
near term. However, profitability, domestic growth and attractive valuations are
all supportive going forward, and we will look for opportunities to add to our
exposure.
Overall, we believe that recent international market weakness can be attributed
to short-term influences rather than fundamental economic or political crises
seen in previous years. We remain constructive on the overseas markets over the
long term, as demographics and public policy are favorable for continued and
expanding equity ownership by investors throughout the world.
*Past performance is no guarantee of future results. Portfolio returns do not
reflect the impact of sales charges. 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 these indices.
If you would like additional information:
|_| Call FastFacts--Call our 24 hour automated account and fund
information hotline at 800-654-4760.
|_| Visit www.sunamericafunds.com for more up-to-date information.
SunAmerica Mutual Funds
thanks you for your continued support
23
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
LARGE-CAP MID-CAP AGGRESSIVE LARGE-CAP SMALL-CAP
GROWTH GROWTH GROWTH VALUE VALUE VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
ASSETS:
Investment securities, at value*...... $122,682,661 $182,429,096 $402,793,775 $71,131,383 $138,008,172 $49,434,251
Repurchase agreements (cost equals
market).............................. 3,286,000 7,330,000 34,501,000 2,528,000 7,538,000 2,704,000
Short-term securities*................ 3,864,000 3,768,501 30,461,188 1,315,000 1,476,000 --
Cash.................................. 71,147 31,796 886,597 6,140 26,814 7,432
Receivable for investments sold....... 1,245,726 954,485 3,128,894 374,681 2,348,378 341,729
Receivable for shares sold............ 366,728 3,941,861 5,604,185 250,750 261,186 324,615
Interest and dividends receivable..... 20,807 42,337 27,912 72,535 138,186 44,379
Deferred organizational expenses...... 4,237 9,383 9,358 4,237 9,358 4,237
Receivable from investment adviser.... 2,722 25,825 95,687 32,049 30,822 20,460
Prepaid expenses and other assets..... 1,162 1,582 3,885 1,557 1,569 490
Receivable for variation margin on
futures contracts.................... -- -- -- -- 94,250 --
------------ ------------ ------------ ----------- ------------ -----------
Total assets........................ 131,545,190 198,534,866 477,512,481 75,716,332 149,932,735 52,881,593
------------ ------------ ------------ ----------- ------------ -----------
LIABILITIES:
Payable for investments purchased..... 3,192,211 7,704,934 20,971,651 1,171,671 3,048,337 268,330
Payable for shares redeemed........... 302,405 203,800 336,059 58,562 107,759 26,382
Other accrued expenses................ 228,595 250,813 388,405 123,718 239,760 129,300
Investment advisory and management
fees payable......................... 106,570 154,992 388,855 59,177 117,848 42,191
Distribution and service maintenance
fees payable......................... 87,578 123,160 297,971 48,473 90,562 32,912
------------ ------------ ------------ ----------- ------------ -----------
Total liabilities................... 3,917,359 8,437,699 22,382,941 1,461,601 3,604,266 499,115
------------ ------------ ------------ ----------- ------------ -----------
Net assets........................ $127,627,831 $190,097,167 $455,129,540 $74,254,731 $146,328,469 $52,382,478
============ ============ ============ =========== ============ ===========
*Identified cost
Investment securities................. $102,044,757 $158,199,560 $325,477,671 $63,275,345 $126,365,361 $46,569,803
============ ============ ============ =========== ============ ===========
Short-term securities................. $ 3,864,000 $ 3,768,501 $ 30,461,188 $ 1,315,000 $ 1,476,000 $ --
============ ============ ============ =========== ============ ===========
</TABLE>
See Notes to Financial Statements
24
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
LARGE-CAP MID-CAP AGGRESSIVE LARGE-CAP SMALL-CAP
GROWTH GROWTH GROWTH VALUE VALUE VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
NET ASSETS WERE COMPOSED OF:
Common Stock, $.0001 par value
(1 billion shares authorized)........ $ 656 $ 877 $ 1,486 $ 480 $ 838 $ 381
Paid-in capital....................... 97,334,692 128,156,150 308,456,576 63,705,417 119,854,081 50,032,386
------------ ------------ ------------ ----------- ------------ -----------
97,335,348 128,157,027 308,458,062 63,705,897 119,854,919 50,032,767
Accumulated undistributed net
investment income (loss)............. (4,268) (8,167) (56,534) 188,044 (15,182) (3,153)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and
liabilities.......................... 9,658,847 37,718,775 69,411,908 2,504,752 14,870,221 (511,553)
Net unrealized appreciation on
investments.......................... 20,637,904 24,229,536 77,316,104 7,856,038 11,642,811 2,864,448
Net unrealized depreciation on futures
contracts............................ -- -- -- -- (24,300) --
Net unrealized depreciation on foreign
currency, and other assets and
liabilities.......................... -- (4) -- -- -- (31)
------------ ------------ ------------ ----------- ------------ -----------
Net assets........................ $127,627,831 $190,097,167 $455,129,540 $74,254,731 $146,328,469 $52,382,478
============ ============ ============ =========== ============ ===========
CLASS A:
Net assets............................ $ 35,549,151 $ 59,348,427 $162,800,868 $19,500,092 $ 52,062,408 $17,188,290
Shares outstanding.................... 1,801,215 2,686,036 5,219,071 1,242,400 2,930,201 1,234,469
Net asset value and redemption price
per share............................ $ 19.74 $ 22.10 $ 31.19 $ 15.70 $ 17.77 $ 13.92
Maximum sales charge (5.75% of
offering price)...................... 1.20 1.35 1.90 0.96 1.08 0.85
------------ ------------ ------------ ----------- ------------ -----------
Maximum offering price to public...... $ 20.94 $ 23.45 $ 33.09 $ 16.66 $ 18.85 $ 14.77
============ ============ ============ =========== ============ ===========
CLASS B:
Net assets............................ $ 59,530,728 $ 98,089,263 $217,962,553 $34,140,236 $ 79,261,045 $22,592,534
Shares outstanding.................... 3,079,515 4,566,507 7,190,651 2,219,186 4,578,642 1,655,320
Net asset value, offering and
redemption price per share (excluding
any applicable contingent deferred
sales charge)........................ $ 19.33 $ 21.48 $ 30.31 $ 15.38 $ 17.31 $ 13.65
============ ============ ============ =========== ============ ===========
CLASS II:
Net assets............................ $ 32,547,952 $ 32,659,477 $ 71,127,185 $19,717,077 $ 14,651,727 $12,195,323
Shares outstanding.................... 1,683,552 1,518,824 2,347,025 1,280,817 846,679 893,098
Net asset value and redemption price
per share (excluding any applicable
contingent deferred sales charge).... $ 19.33 $ 21.50 $ 30.31 $ 15.39 $ 17.30 $ 13.66
Maximum sales charge (1.00% of
offering price)...................... 0.20 0.22 0.31 0.16 0.17 0.14
------------ ------------ ------------ ----------- ------------ -----------
Maximum offering price to public...... $ 19.53 $ 21.72 $ 30.62 $ 15.55 $ 17.47 $ 13.80
============ ============ ============ =========== ============ ===========
CLASS Z:
Net assets............................ $ -- $ -- $ 3,238,934 $ 897,326 $ 353,289 $ 406,331
Shares outstanding.................... -- -- 102,134 56,299 19,601 28,793
Net asset value, offering and
redemption price per share........... $ -- $ -- $ 31.71 $ 15.94 $ 18.02 $ 14.11
============ ============ ============ =========== ============ ===========
</TABLE>
See Notes to Financial Statements
25
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED
FOCUSED GROWTH INTERNATIONAL
FOCUS TECHNET AND INCOME FOCUSED VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------
ASSETS:
Investment securities, at value*.... $1,682,134,938 $214,255,753 $194,794,042 $139,405,151 $103,898,180
Repurchase agreements (cost equals
market)............................ -- 36,773,000 10,434,000 7,704,000 6,436,000
Short-term securities*.............. 265,795,381 -- 13,200,000 -- 2,251,720
Cash................................ 368,001 3,293 56,560 1,836 801,330
Foreign cash........................ -- -- -- -- 588,559
Receivable for investments sold..... 92,531,210 5,584,161 3,364,614 6,688,816 4,001,436
Receivable for shares sold.......... 13,374,000 5,807,477 1,220,596 2,315,245 5,615,424
Interest and dividends receivable... 27,090 8,249 32,164 139,893 156,688
Deferred organizational expenses.... 8,682 -- 4,237 -- 9,358
Receivable from investment
adviser............................ 6,640 100,231 125,940 73,048 31,280
Prepaid expenses and other assets... 29,815 913 1,689 1,707 1,140
Foreign currency contracts.......... -- -- -- -- 1,972,697
Unrealized appreciation on forward
foreign currency contracts......... -- -- -- -- 79,296
-------------- ------------ ------------ ------------ ------------
Total assets...................... 2,054,275,757 262,533,077 223,233,842 156,329,696 125,843,108
-------------- ------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased... 193,093,521 14,941,041 6,886,701 8,296,975 4,605,931
Payable for shares redeemed......... 2,469,965 225,481 207,405 39,007 50,914
Distribution and service maintenance
fees payable....................... 1,337,262 155,447 149,240 92,196 69,878
Investment advisory and management
fees payable....................... 1,331,601 254,040 184,039 112,640 100,609
Other accrued expenses.............. 1,227,703 214,294 188,772 132,891 281,384
Due to custodian bank............... -- -- -- 37 --
Foreign currency contracts.......... -- -- -- -- 1,969,738
Unrealized depreciation on forward
foreign currency contracts......... -- -- -- -- 77,982
-------------- ------------ ------------ ------------ ------------
Total liabilities................. 199,460,052 15,790,303 7,616,157 8,673,746 7,156,436
-------------- ------------ ------------ ------------ ------------
Net assets...................... $1,854,815,705 $246,742,774 $215,617,685 $147,655,950 $118,686,672
============== ============ ============ ============ ============
*Identified cost
Investment securities............... $1,608,650,589 $201,486,130 $177,629,015 $121,676,067 $101,449,926
============== ============ ============ ============ ============
Short-term securities............... $ 265,795,381 $ -- $ 13,200,000 $ -- $ 2,251,720
============== ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
26
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED
FOCUSED GROWTH INTERNATIONAL
FOCUS TECHNET AND INCOME FOCUSED VALUE EQUITY
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)........ $ 8,741 $ 1,593 $ 1,121 $ 912 $ 834
Paid-in capital....................... 1,755,887,055 243,090,336 195,510,568 124,006,524 109,296,509
-------------- ------------ ------------ ------------ ------------
1,755,895,796 243,091,929 195,511,689 124,007,436 109,297,343
Accumulated undistributed net
investment (loss).................... (17,710) -- (3,505) (667) (195,694)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and
liabilities.......................... 25,453,270 (9,118,778) 2,944,474 5,920,222 7,140,143
Net unrealized appreciation on
investments.......................... 73,484,349 12,769,623 17,165,027 17,729,084 2,448,254
Net unrealized depreciation on foreign
currency, and other assets and
liabilities.......................... -- -- -- (125) (3,374)
-------------- ------------ ------------ ------------ ------------
Net assets........................ $1,854,815,705 $246,742,774 $215,617,685 $147,655,950 $118,686,672
============== ============ ============ ============ ============
CLASS A:
Net assets............................ $ 401,754,056 $ 89,371,313 $ 62,163,718 $ 40,754,521 $ 49,085,256
Shares outstanding.................... 18,698,434 5,758,238 3,185,285 2,506,673 3,398,272
Net asset value and redemption price
per share............................ $ 21.49 $ 15.52 $ 19.52 $ 16.26 $ 14.44
Maximum sales charge (5.75% of
offering price)...................... 1.31 0.95 1.19 0.99 0.88
-------------- ------------ ------------ ------------ ------------
Maximum offering price to public...... $ 22.80 $ 16.47 $ 20.71 $ 17.25 $ 15.32
============== ============ ============ ============ ============
CLASS B:
Net assets............................ $ 641,205,379 $ 70,072,716 $ 83,480,301 $ 33,417,752 $ 48,901,181
Shares outstanding.................... 30,327,230 4,530,396 4,365,183 2,067,767 3,474,334
Net asset value, offering and
redemption price per share (excluding
any applicable contingent deferred
sales charge)........................ $ 21.14 $ 15.47 $ 19.12 $ 16.16 $ 14.07
============== ============ ============ ============ ============
CLASS C:
Net assets............................ $ 6,187,705 $ 630,351 -- -- $ --
Shares outstanding.................... 292,657 40,743 -- -- --
Net asset value, offering and
redemption price per share (excluding
any applicable contingent deferred
sales charge)........................ $ 21.14 $ 15.47 $ -- $ -- $ --
============== ============ ============ ============ ============
CLASS II:
Net assets............................ $ 793,145,915 $ 86,105,430 $ 69,825,669 $ 73,483,677 $ 20,367,122
Shares outstanding.................... 37,516,066 5,564,311 3,653,711 4,547,354 1,446,942
Net asset value and redemption price
per share (excluding any applicable
contingent deferred sales charge).... $ 21.14 $ 15.47 $ 19.11 $ 16.16 $ 14.08
Maximum sales charge (1.00% of
offering price)...................... 0.21 0.16 0.19 0.16 0.14
-------------- ------------ ------------ ------------ ------------
Maximum offering price to public...... $ 21.35 $ 15.63 $ 19.30 $ 16.32 $ 14.22
============== ============ ============ ============ ============
CLASS Z:
Net assets............................ $ 12,522,650 $ 562,964 $ 147,997 $ -- $ 333,113
Shares outstanding.................... 579,257 36,259 7,584 -- 22,698
Net asset value, offering and
redemption price per share........... $ 21.62 $ 15.53 $ 19.51 $ -- $ 14.68
============== ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
27
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF OPERATIONS -- FOR THE YEAR ENDED OCTOBER 31, 2000
<TABLE>
<CAPTION>
LARGE-CAP MID-CAP AGGRESSIVE LARGE-CAP SMALL-CAP
GROWTH GROWTH GROWTH VALUE VALUE VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest....................................... $ 336,367 $ 576,273 $ 2,614,355 $ 163,771 $ 412,937 $ 276,335
Dividends*..................................... 486,842 297,908 481,747 1,444,882 2,608,598 806,247
---------- ----------- ----------- ---------- ----------- ----------
Total investment income...................... 823,209 874,181 3,096,102 1,608,653 3,021,535 1,082,582
---------- ----------- ----------- ---------- ----------- ----------
Expenses:
Investment advisory and management fees........ 1,284,121 1,735,805 4,383,211 629,304 1,489,746 471,360
Distribution and service maintenance fees
Class A...................................... 121,680 187,749 532,245 57,231 183,495 54,523
Class B...................................... 612,993 930,473 2,170,897 310,656 830,082 217,503
Class II..................................... 284,961 248,270 611,057 149,172 132,812 95,423
Transfer agent fees and expenses
Class A...................................... 103,653 141,622 460,001 50,077 170,110 50,738
Class B...................................... 167,744 243,461 588,012 93,059 249,683 71,430
Class II..................................... 76,603 65,335 165,676 43,854 39,048 30,464
Class Z...................................... -- -- 21,530 21,675 21,533 21,537
Registration fees
Class A...................................... -- -- 1,304 3,969 -- --
Class B...................................... -- -- 1,905 -- -- --
Class II..................................... -- 4,087 19,836 12,303 7,140 5,497
Class Z...................................... -- -- 6,359 5,898 4,702 4,201
Custodian fees and expenses.................... 134,896 148,524 318,361 132,970 147,382 125,329
Printing expense............................... 6,100 65,435 160,949 24,216 98,605 5,980
Trustees' fees and expenses.................... 5,094 7,296 16,671 4,176 8,799 2,866
Audit and tax consulting fees.................. 2,625 33,398 29,942 30,407 31,056 28,864
Amortization of organizational expenses........ 2,196 9,004 9,004 2,196 9,004 2,196
Insurance expense.............................. 215 241 602 145 256 123
Legal fees and expenses........................ -- 4,785 7,450 -- 4,825 --
Miscellaneous expenses......................... 849 919 1,971 699 1,186 2,896
---------- ----------- ----------- ---------- ----------- ----------
Total expenses............................... 2,803,730 3,826,404 9,506,983 1,572,007 3,429,464 1,190,930
Less: expenses waived/reimbursed by
investment adviser......................... -- -- -- (152,595) (147,237) (148,764)
Less: custody credits earned on cash
balances................................... (2,870) (7,214) (14,204) (3,755) (6,065) (1,256)
---------- ----------- ----------- ---------- ----------- ----------
Net expenses................................. 2,800,860 3,819,190 9,492,779 1,415,657 3,276,162 1,040,910
---------- ----------- ----------- ---------- ----------- ----------
Net investment income (loss)..................... (1,977,651) (2,945,009) (6,396,677) 192,996 (254,627) 41,672
---------- ----------- ----------- ---------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments................. 11,814,463 41,281,162 78,527,231 2,801,643 15,989,760 2,143,749
Net realized (loss) gain on written options
contracts....................................... -- -- 1,499,236 -- -- --
Net realized (loss) on futures and options
contracts....................................... -- -- (3,062,931) -- (114,866) --
Net realized gain (loss) on foreign currency and
other assets and liabilities.................... -- 3 -- (14) 2,471 (248)
Net change in unrealized
appreciation/depreciation of investments........ (268,981) 5,236,311 6,186,470 5,051,768 (1,267,454) 5,697,043
Net change in unrealized
appreciation/depreciation on written options
contracts....................................... -- -- 38,060 -- -- --
Net change in unrealized
appreciation/depreciation on futures
contracts....................................... -- -- -- -- (24,300) --
Net change in unrealized
appreciation/depreciation on foreign currency
and other assets and liabilities................ -- (4) -- -- -- (58)
---------- ----------- ----------- ---------- ----------- ----------
Net realized and unrealized gain on investments,
foreign currency and other assets and
liabilities..................................... 11,545,482 46,517,472 83,188,066 7,853,397 14,585,611 7,840,486
---------- ----------- ----------- ---------- ----------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:................................ $9,567,831 $43,572,463 $76,791,389 $8,046,393 $14,330,984 $7,882,158
========== =========== =========== ========== =========== ==========
*Net of foreign withholding taxes on dividends
of.............................................. $ 5,115 $ 1,490 $ 9,509 $ 8,747 $ 6,981 $ 2,710
========== =========== =========== ========== =========== ==========
</TABLE>
See Notes to Financial Statements
28
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF OPERATIONS -- FOR THE YEAR ENDED OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED
FOCUSED GROWTH FOCUSED INTERNATIONAL
FOCUS TECHNET AND INCOME VALUE EQUITY
PORTFOLIO PORTFOLIO@ PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest............................................... $ 7,427,471 $ 531,232 $ 939,266 $ 233,628 $ 238,067
Dividends*............................................. 4,017,379 9,501 539,925 1,029,260 1,233,023
------------ ----------- ----------- ----------- -----------
Total investment income.............................. 11,444,850 540,733 1,479,191 1,262,888 1,471,090
------------ ----------- ----------- ----------- -----------
Expenses:
Investment advisory and management fees................ 13,196,864 1,025,920 1,778,603 743,756 1,225,017
Distribution and service maintenance fees
Class A.............................................. 1,186,074 105,281 188,783 85,099 130,871
Class B.............................................. 5,527,594 235,762 730,278 153,458 555,736
Class C.............................................. 9,269 1,791 -- -- --
Class II............................................. 6,499,351 282,109 508,875 347,158 181,751
Transfer agent fees and expenses
Class A.............................................. 871,609 75,315 143,302 59,023 105,469
Class B.............................................. 1,401,274 58,148 196,214 39,600 161,342
Class C.............................................. 3,667 1,062 -- -- --
Class II............................................. 1,617,483 69,133 131,912 84,914 53,070
Class Z.............................................. 14,294 1,305 1,170 -- 20,184
Registration fees
Class A.............................................. 121,392 41,997 30,993 40,208 --
Class B.............................................. 204,890 36,797 21,952 36,079 --
Class C.............................................. 13,554 13,269 -- -- --
Class II............................................. 274,018 43,368 34,302 53,687 10,020
Class Z.............................................. 16,472 11,108 650 -- 5,622
Custodian fees and expenses............................ 944,686 96,518 146,156 128,087 271,641
Printing expense....................................... 496,574 63,015 39,088 48,931 59,094
Trustees' fees and expenses............................ 48,806 852 5,286 1,893 2,973
Audit and tax consulting fees.......................... 30,847 23,447 28,348 28,605 35,309
Legal fees and expenses................................ 28,317 56,742 -- 17,733 3,256
Amortization of organizational expenses................ 3,404 -- 2,196 -- 9,004
Insurance expense...................................... 2,194 99 234 113 996
Miscellaneous expenses................................. 5,752 1,085 1,400 1,620 640
------------ ----------- ----------- ----------- -----------
Total expenses....................................... 32,518,385 2,244,123 3,989,742 1,869,964 2,831,995
Less: expenses waived/reimbursed by investment
adviser............................................ (687,498) (276,873) (597,931) (387,013) (84,141)
Less: custody credits earned on cash balances........ (44,483) (12,775) (3,889) (4,728) (8,953)
------------ ----------- ----------- ----------- -----------
Net expenses......................................... 31,786,404 1,954,475 3,387,922 1,478,223 2,738,901
------------ ----------- ----------- ----------- -----------
Net investment (loss).................................... (20,341,554) (1,413,742) (1,908,731) (215,335) (1,267,811)
------------ ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investments.................. 29,009,454 (8,850,785) 5,486,743 6,100,343 9,699,199
Net realized (loss) on written options contracts......... (2,172,204) -- (248,169) -- 155,087
Net realized loss on futures and purchased options
contracts............................................... -- (145,127) -- -- (677,326)
Net realized gain on foreign currency and other assets
and liabilities......................................... -- -- 21 689 155,590
Net change in unrealized appreciation/depreciation on
investments............................................. (44,256,215) 12,769,623 7,797,223 17,729,084 (9,331,301)
Net change in unrealized appreciation/depreciation on
foreign currency and other assets and liabilities....... -- -- (12) (125) (11,014)
------------ ----------- ----------- ----------- -----------
Net realized and unrealized gain (loss) on investments,
foreign currency and other assets and liabilities....... (17,418,965) 3,773,711 13,035,806 23,829,991 (9,765)
------------ ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS:........................................ $(37,760,519) $ 2,359,969 $11,127,075 $23,614,656 $(1,277,576)
============ =========== =========== =========== ===========
*Net of foreign withholding taxes on dividends of........ $ 56,696 $ -- $ 2,467 $ 2,364 $ 193,954
============ =========== =========== =========== ===========
</TABLE>
@ Commenced Operations May 22, 2000
See Notes to Financial Statements
29
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LARGE-CAP GROWTH PORTFOLIO MID-CAP GROWTH PORTFOLIO
---------------------------- -----------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment (loss).......................... $ (1,977,651) $(1,137,506) $ (2,945,009) $ (1,951,299)
Net realized gain on investments............... 11,814,463 4,070,851 41,281,162 16,802,129
Net realized gain (loss) on foreign currency
and other assets and liabilities............. -- 2 3 (498)
Net change in unrealized
appreciation/depreciation on investments..... (268,981) 16,386,674 5,236,311 13,995,487
Net change in unrealized depreciation on
foreign currency, other assets and
liabilities.................................. -- -- (4) --
------------ ----------- ------------ ------------
Net increase in net assets resulting from
operations................................... 9,567,831 19,320,021 43,572,463 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).................................... (1,572,067) -- (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.................................... (3,025,024) -- (14,830,032) (4,324,967)
------------ ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS (NOTE 8)........ 22,684,877 31,248,547 38,491,303 (1,809,150)
------------ ----------- ------------ ------------
TOTAL INCREASE IN NET ASSETS..................... 29,227,684 50,568,568 67,233,734 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 income (loss) for October 31, 2000
and October 31, 1999 of ($4,268), ($2,363),
($8,167), ($5,903), respectively].............. $127,627,831 $98,400,147 $190,097,167 $122,863,433
============ =========== ============ ============
</TABLE>
------------------
See Notes to Financial Statements
30
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO LARGE-CAP VALUE PORTFOLIO
----------------------------- ---------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
-----------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income (loss)..................... $ (6,396,677) $ (2,994,363) $ 192,996 $ (78,769)
Net realized gain on investments................. 78,527,231 42,805,808 2,801,643 1,241,999
Net realized (loss) on options contracts......... (1,563,695) (1,510,002) -- --
Net realized gain (loss) on foreign currency and
other assets and liabilities................... -- -- (14) 5
Net change in unrealized appreciation on
investments.................................... 6,186,470 48,575,991 5,051,768 3,995,010
Net change in unrealized
appreciation/depreciation on written options
contracts...................................... 38,060 (2,272) -- --
------------ ------------ ----------- -----------
Net increase in net assets resulting from
operations..................................... 76,791,389 86,875,162 8,046,393 5,158,245
------------ ------------ ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
(Class A)...................................... (12,050,143) -- (346,932) (80,398)
From net realized gains on investments
(Class B)...................................... (18,113,404) -- (689,761) (180,925)
From net realized gains on investments
(Class II)..................................... (3,525,596) -- (273,043) (37,456)
From net realized gains on investments
(Class Z)...................................... (80,760) -- (5,291) (1,202)
------------ ------------ ----------- -----------
Total dividends and distributions to
shareholders...................................... (33,769,903) -- (1,315,027) (299,981)
------------ ------------ ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (NOTE 8)....................... 145,176,321 38,219,588 9,200,214 6,363,980
------------ ------------ ----------- -----------
TOTAL INCREASE IN NET ASSETS....................... 188,197,807 125,094,750 15,931,580 11,222,244
NET ASSETS:
Beginning of period................................ 266,931,733 141,836,983 58,323,151 47,100,907
------------ ------------ ----------- -----------
End of period [including undistributed net
investment income (loss) for October 31, 2000 and
October 31, 1999 of ($56,534), ($19,200),
$188,044, and ($2,234), respectively]............ $455,129,540 $266,931,733 $74,254,731 $58,323,151
============ ============ =========== ===========
</TABLE>
------------------
See Notes to Financial Statements
31
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE PORTFOLIO SMALL-CAP VALUE PORTFOLIO
----------------------------- ---------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
-----------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income (loss)..................... $ (254,627) $ 49,109 $ 41,672 $ (19,799)
Net realized gain (loss) on investments.......... 15,989,760 13,645,902 2,143,749 (1,426,602)
Net realized gain (loss) on futures contracts.... (114,866) 7,640 -- --
Net realized gain (loss) on foreign currency and
other assets and liabilities................... 2,471 -- (248) --
Net change in unrealized
appreciation/depreciation on investments....... (1,267,454) 7,458,536 5,697,043 4,526,089
Net change in unrealized depreciation on futures
contracts...................................... (24,300) -- -- --
Net change in unrealized
appreciation/depreciation on foreign currency,
other assets and liabilities................... -- 70 (58) 27
------------ ------------ ----------- -----------
Net increase in net assets resulting from
operations..................................... 14,330,984 21,161,257 7,882,158 3,079,715
------------ ------------ ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments (Class
A)............................................. (2,614,539) -- -- --
From net realized gains on investments (Class
B)............................................. (4,224,970) -- -- --
From net realized gains on investments (Class
II)............................................ (597,058) -- -- --
From net realized gains on investments (Class
Z)............................................. (3,372) -- -- --
------------ ------------ ----------- -----------
Total dividends and distributions to
shareholders...................................... (7,439,939) -- -- --
------------ ------------ ----------- -----------
NET (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS (NOTE 8)....................... (27,305,302) (51,925,266) (882,455) (4,812,242)
------------ ------------ ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS............ (20,414,257) (30,764,009) 6,999,703 (1,732,527)
NET ASSETS:
Beginning of period................................ 166,742,726 197,506,735 45,382,775 47,115,302
------------ ------------ ----------- -----------
End of period [including undistributed net
investment income (loss) for October 31, 2000 and
October 31, 1999 of ($15,182), $32,289, ($3,153),
($2,195), respectively].......................... $146,328,469 $166,742,726 $52,382,478 $45,382,775
============ ============ =========== ===========
</TABLE>
------------------
See Notes to Financial Statements
32
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED TECHNET
FOCUS PORTFOLIO PORTFOLIO
------------------------------ ---------------
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR MAY 22, 2000*
ENDED ENDED THROUGH
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 2000
<S> <C> <C> <C>
------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment (loss)..................................... $ (20,341,554) $ (4,229,420) $ (1,413,742)
Net realized gain (loss) on investments................... 29,009,454 14,151,972 (8,850,785)
Net realized loss on options contracts.................... (2,172,204) (117,396) (145,127)
Net change in unrealized appreciation/depreciation of
investments............................................. (44,256,215) 111,104,979 12,769,623
-------------- ------------ ------------
Net increase (decrease) in net assets resulting from
operations.............................................. (37,760,519) 120,910,135 2,359,969
-------------- ------------ ------------
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)...................................... 1,191,258,148 473,439,111 244,382,805
-------------- ------------ ------------
TOTAL INCREASE IN NET ASSETS................................ 1,149,492,530 594,349,246 246,742,774
NET ASSETS:
Beginning of period......................................... 705,323,175 110,973,929 --
-------------- ------------ ------------
End of period [including undistributed net investment (loss)
for October 31, 2000 and October 31, 1999 of ($17,710),
($3,794), and $0, respectively]........................... $1,854,815,705 $705,323,175 $246,742,774
============== ============ ============
</TABLE>
------------------
* Commencement of Operations
See Notes to Financial Statements
33
<PAGE>
STYLE SELECT SERIES LOGO
STATEMENT OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED GROWTH AND INCOME FOCUSED VALUED
PORTFOLIO PORTFOLIO INTERNATIONAL EQUITY PORTFOLIO
---------------------------- ----------------- -------------------------------
FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR
ENDED ENDED NOVEMBER 1, 1999* ENDED ENDED
OCTOBER 31, OCTOBER 31, THROUGH OCTOBER 31, OCTOBER 31,
2000 1999 OCTOBER 31, 2000 2000 1999
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment (loss)...................... $ (1,908,731) $ (306,170) $ (215,335) $ (1,267,811) $ (593,312)
Net realized gain on investments........... 5,486,743 5,923,715 6,100,343 9,699,199 4,703,415
Net realized (loss) on options contracts... (248,169) (20,023) -- (177,990) (77,740)
Net realized (loss) on futures contracts... -- -- -- (344,249) (395,185)
Net realized gain (loss) on foreign
currency and other assets and
liabilities.............................. 21 (172) 689 155,590 (794,038)
Net change in unrealized appreciation/
depreciation on investments.............. 7,797,223 8,377,336 17,729,084 (9,331,301) 10,213,074
Net change in unrealized appreciation on
futures contracts........................ -- -- -- -- 157,105
Net change in unrealized appreciation/
depreciation of foreign currency and
other assets and liabilities............. (12) 12 (125) (11,014) 369,570
------------ ----------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations................ 11,127,075 13,974,698 23,614,656 (1,277,576) 13,582,889
------------ ----------- ------------ ------------ -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
(Class A)................................ (1,836,498) (130,146) -- -- (106,783)
From net realized gains on investments
(Class B)................................ (2,598,962) (234,029) -- -- (193,653)
From net realized gains on investments
(Class II)............................... (1,269,564) (35,835) -- -- (33,985)
From net realized gains on investments
(Class Z)................................ -- -- -- -- (586)
------------ ----------- ------------ ------------ -----------
Total dividends and distributions to
shareholders................................ (5,705,024) (400,010) -- -- (335,007)
------------ ----------- ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS
(NOTE 8).................................... 125,659,556 42,515,184 124,041,294 31,558,724 (9,204,051)
------------ ----------- ------------ ------------ -----------
TOTAL INCREASE IN NET ASSETS................. 131,081,607 56,089,872 147,655,950 30,281,148 4,043,831
NET ASSETS:
Beginning of period.......................... 84,536,078 28,446,206 -- 88,405,524 84,361,693
------------ ----------- ------------ ------------ -----------
End of period [including undistributed net
investment (loss) for October 31, 2000 and
October 31, 1999 of ($3,505), ($1,762),
($667), ($195,694), and ($60,065),
respectively].............................. $215,617,685 $84,536,078 $147,655,950 $118,686,672 $88,405,524
============ =========== ============ ============ ===========
</TABLE>
------------------
* Commencement of Operations
See Notes to Financial Statements
34
<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
ENDED OF PERIOD LOSS(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD
---------------------------------------- --------- -------- ------------ ---------- --------- ------- ------- ------
<S> <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
10/31/98................................ 11.79 (0.11) 2.05 1.94 (0.01) -- (0.01) 13.72
10/31/99................................ 13.72 (0.16) 4.67 4.51 -- -- -- 18.23
10/31/2000.............................. 18.23 (0.23) 2.29 2.06 -- (0.55) (0.55) 19.74
CLASS B
10/15/97-10/31/97....................... 12.50 -- (0.71) (0.71) -- -- -- 11.79
10/31/98................................ 11.79 (0.21) 2.04 1.83 -- -- -- 13.62
10/31/99................................ 13.62 (0.27) 4.63 4.36 -- -- -- 17.98
10/31/2000.............................. 17.98 (0.36) 2.26 1.90 -- (0.55) (0.55) 19.33
CLASS II
10/15/97-10/31/97....................... 12.50 -- (0.72) (0.72) -- -- -- 11.78
10/31/98................................ 11.78 (0.20) 2.04 1.84 -- -- -- 13.62
10/31/99................................ 13.62 (0.27) 4.62 4.35 -- -- -- 17.97
10/31/2000.............................. 17.97 (0.36) 2.27 1.91 -- (0.55) (0.55) 19.33
----------------------------------------------------------------------------------------------------------------------------
MID-CAP GROWTH PORTFOLIO
CLASS A
11/19/96-10/31/97....................... $12.50 $(0.16) $ 1.37 $ 1.21 $ -- $ -- $ -- $13.71
10/31/98................................ 13.71 (0.18) 1.07 0.89 -- -- -- 14.60
10/31/99................................ 14.60 (0.21) 4.42 4.21 -- (0.64) (0.64) 18.17
10/31/2000.............................. 18.17 (0.28) 6.38 6.10 -- (2.17) (2.17) 22.10
CLASS B
11/19/96-10/31/97....................... 12.50 (0.25) 1.38 1.13 -- -- -- 13.63
10/31/98................................ 13.63 (0.27) 1.06 0.79 -- -- -- 14.42
10/31/99................................ 14.42 (0.31) 4.34 4.03 -- (0.64) (0.64) 17.81
10/31/2000.............................. 17.81 (0.41) 6.25 5.84 -- (2.17) (2.17) 21.48
CLASS II
3/06/97-10/31/97........................ 11.93 (0.18) 1.89 1.71 -- -- -- 13.64
10/31/98................................ 13.64 (0.27) 1.06 0.79 -- -- -- 14.43
10/31/99................................ 14.43 (0.32) 4.36 4.04 -- (0.64) (0.64) 17.83
10/31/2000.............................. 17.83 (0.41) 6.25 5.84 -- (2.17) (2.17) 21.50
----------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
CLASS A
11/19/96-10/31/97....................... $12.50 $(0.11) $ 3.51 $ 3.40 $ -- $ -- $ -- $15.90
10/31/98................................ 15.90 (0.16) 0.87 0.71 -- (0.11) (0.11) 16.50
10/31/99................................ 16.50 (0.23) 9.86 9.63 -- -- -- 26.13
10/31/2000.............................. 26.13 (0.35) 8.65 8.30 -- (3.24) (3.24) 31.19
CLASS B
11/19/96-10/31/97....................... 12.50 (0.24) 3.54 3.30 -- -- -- 15.80
10/31/98................................ 15.80 (0.27) 0.87 0.60 -- (0.11) (0.11) 16.29
10/31/99................................ 16.29 (0.37) 9.69 9.32 -- -- -- 25.61
10/31/2000.............................. 25.61 (0.56) 8.50 7.94 -- (3.24) (3.24) 30.31
CLASS II
3/06/97-10/31/97........................ 13.38 (0.17) 2.59 2.42 -- -- -- 15.80
10/31/98................................ 15.80 (0.27) 0.88 0.61 -- (0.11) (0.11) 16.30
10/31/99................................ 16.30 (0.37) 9.67 9.30 -- -- -- 25.60
10/31/2000.............................. 25.60 (0.56) 8.51 7.95 -- (3.24) (3.24) 30.31
CLASS Z
4/03/98-10/31/98........................ 18.30 (0.03) (1.70) (1.73) -- -- -- 16.57
10/31/99................................ 16.57 (0.10) 9.91 9.81 -- -- -- 26.38
10/31/2000.............................. 26.38 (0.16) 8.73 8.57 -- (3.24) (3.24) 31.71
<CAPTION>
RATIO OF
NET ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS)
PERIOD TOTAL PERIOD TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED RETURN(2) (000'S) NET ASSETS ASSETS TURNOVER
---------------------------------------- --------- ---------- ------------------ --------------------- ---------
<S> <C> <C> <C> <C> <C>
LARGE-CAP GROWTH PORTFOLIO
CLASS A
10/15/97-10/31/97....................... (5.68)% $ 23,609 1.78%(3)(4) 0.34%(3)(4) 1%
10/31/98................................ 16.42 14,390 1.78(4) (0.90)(4) 30
10/31/99................................ 32.87 28,050 1.78(4) (0.98)(4) 66
10/31/2000.............................. 11.38 35,549 1.78% (1.12) 81
CLASS B
10/15/97-10/31/97....................... (5.68) 773 2.43(3)(4) (0.84)(3)(4) 1
10/31/98................................ 15.54 26,125 2.43(4) (1.54)(4) 30
10/31/99................................ 32.01 51,691 2.43(4) (1.63)(4) 66
10/31/2000.............................. 10.63 59,531 2.43 (1.77) 81
CLASS II
10/15/97-10/31/97....................... (5.76) 166 2.43(3)(4) (0.42)(3)(4) 1
10/31/98................................ 15.64 7,317 2.43(4) (1.54)(4) 30
10/31/99................................ 31.94 18,659 2.43(4) (1.63)(4) 66
10/31/2000.............................. 10.70 32,548 2.43 (1.77) 81
----------------------------------------
MID-CAP GROWTH PORTFOLIO
CLASS A
11/19/96-10/31/97....................... 9.68% $ 18,404 1.85%(3)(4) (1.19)%(3)(4) 97%
10/31/98................................ 6.49 32,115 1.78(4) (1.19)(4) 135
10/31/99................................ 29.83 38,991 1.76(4) (1.22)(4) 112
10/31/2000.............................. 36.16 59,348 1.78 (1.27) 151
CLASS B
11/19/96-10/31/97....................... 9.04 35,739 2.47(3)(4) (1.92)(3)(4) 97
10/31/98................................ 5.80 58,555 2.43(4) (1.84)(4) 135
10/31/99................................ 28.92 70,477 2.40(4) (1.87)(4) 112
10/31/2000.............................. 35.35 98,089 2.43 (1.92) 151
CLASS II
3/06/97-10/31/97........................ 14.33 4,685 2.45(3)(4) (1.97)(3)(4) 97
10/31/98................................ 5.79 9,482 2.43(4) (1.84)(4) 135
10/31/99................................ 28.97 13,396 2.43(4) (1.89)(4) 112
10/31/2000.............................. 35.31 32,659 2.43 (1.92) 151
----------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
CLASS A
11/19/96-10/31/97....................... 27.20% $ 38,537 1.84%(3)(4) (0.77)%(3)(4) 150%
10/31/98................................ 4.55 55,925 1.78(4) (0.95)(4) 142
10/31/99................................ 58.36 100,468 1.76(4) (1.00)(4) 126
10/31/2000.............................. 32.77 162,801 1.78 (1.07) 134
CLASS B
11/19/96-10/31/97....................... 26.40 48,594 2.47(3)(4) (1.58)(3)(4) 150
10/31/98................................ 3.87 74,998 2.43(4) (1.60)(4) 142
10/31/99................................ 57.21 140,508 2.39(4) (1.64)(4) 126
10/31/2000.............................. 31.95 217,963 2.43 (1.72) 134
CLASS II
3/06/97-10/31/97........................ 18.09 5,939 2.45(3)(4) (1.68)(3)(4) 150
10/31/98................................ 3.94 10,568 2.43(4) (1.60)(4) 142
10/31/99................................ 57.06 25,331 2.41(4) (1.65)(4) 126
10/31/2000.............................. 32.01 71,127 2.43 (1.70) 134
CLASS Z
4/03/98-10/31/98........................ (9.45) 346 1.21(3)(4) (0.36)(3)(4) 142
10/31/99................................ 59.20 624 1.21(4) (0.45)(4) 126
10/31/2000.............................. 33.55 3,239 1.21(4) (0.46)(4) 134
</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 10/31/2000 10/31/97 10/31/98 10/31/99 10/31/2000
-------- -------- -------- ---------- -------- -------- -------- ----------
<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% 1.23%
Mid-Cap Growth B....... 0.42% 0.33% 0.12% --
Mid-Cap Growth II...... 0.96% 0.39% 0.24% --
</TABLE>
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>
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
10/31/2000...................... 14.05 0.11 1.86 1.97 -- (0.32) (0.32) 15.70 14.36
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
10/31/2000...................... 13.87 0.02 1.81 1.83 -- (0.32) (0.32) 15.38 13.52
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
10/31/2000...................... 13.87 0.02 1.82 1.84 -- (0.32) (0.32) 15.39 13.59
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
10/31/2000...................... 14.18 0.22 1.86 2.08 -- (0.32) (0.32) 15.94 15.02
--------------------------------------------------------------------------------------------------------------------------------
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
10/31/2000...................... 16.82 0.04 1.68 1.72 -- (0.77) (0.77) 17.77 10.73
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
10/31/2000...................... 16.51 0.06 1.51 1.57 -- (0.77) (0.77) 17.31 10.00
CLASS II
3/06/97-10/31/97................ 13.56 (0.08) 2.52 2.44 -- -- -- 16.00 17.99
0/31/98......................... 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
10/31/2000...................... 16.51 0.07 1.49 1.56 -- (0.77) (0.77) 17.30 9.93
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
10/31/2000...................... 16.97 0.13 1.69 1.82 -- (0.77) (0.77) 18.02 11.25
--------------------------------------------------------------------------------------------------------------------------------
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
10/31/2000...................... 11.70 0.07 2.15 2.22 -- -- -- 13.92 18.97
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
10/31/2000...................... 11.54 (0.02) 2.13 2.11 -- -- -- 13.65 18.28
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
10/31/2000...................... 11.55 (0.02) 2.13 2.11 -- -- -- 13.66 18.27
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
10/31/2000...................... 11.79 0.14 2.18 2.32 -- -- -- 14.11 19.68
<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 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
10/31/2000...................... 19,500 1.78 (5) 0.76(5) 96
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
10/31/2000...................... 34,140 2.43 (5) 0.13(5) 96
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
10/31/2000...................... 19,717 2.43 (5) 0.12(5) 96
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
10/31/2000...................... 897 1.21 (5) 1.40(5) 96
--------------------------------
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
10/31/2000...................... 52,062 1.78 0.25 95
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
10/31/2000...................... 79,261 2.43 0.39 95
CLASS II
3/06/97-10/31/97................ 9,384 2.45 (3) (0.78)(3) 48
0/31/98......................... 15,260 2.43 (0.66) 69
10/31/99........................ 12,976 2.42 (0.21) 118
10/31/2000...................... 14,652 2.43 0.40 95
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
10/31/2000...................... 353 1.21 0.72 95
--------------------------------
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
10/31/2000...................... 17,188 1.78 0.52 67
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
10/31/2000...................... 22,593 2.43 (0.12) 67
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
10/31/2000...................... 12,195 2.43 (0.16) 67
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
10/31/2000...................... 406 1.21 1.00 67
</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 10/31/2000 10/31/97 10/31/98 10/31/99 10/31/2000
-------- -------- -------- ---------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Large-Cap Value A...... 0.58% 0.67% 0.17% 0.20% Value II............... 0.63% 0.21% 0.13% 0.11%
Large-Cap Value B...... 1.16% 0.61% 0.16% 0.17% Value Z................ -- 28.83% 23.27% 10.14%
Large-Cap Value II..... 3.22% 1.14% 0.22% 0.25% Small-Cap Value A...... 0.57% 0.66% 0.29% 0.25%
Large-Cap Value Z...... -- 11.77% 11.86% 4.73% Small-Cap Value B...... 0.74% 0.62% 0.31% 0.25%
Value A................ 0.28% 0.17% 0.04% 0.09% Small-Cap Value II..... 1.42% 1.05% 0.36% 0.31%
Value B................ 0.34% 0.19% 0.02% 0.07% Small-Cap Value Z...... -- 20.37% 20.90% 9.85%
</TABLE>
(5) Net of custody credits of 0.01%
See Notes to Financial Statements
36
<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
ENDED OF PERIOD (LOSS)(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD
---------------------------------------- --------- --------- ------------ ---------- --------- ------- ------- ------
<S> <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
10/31/99................................ 12.60 (0.12) 6.75 6.63 -- -- -- 19.23
10/31/2000.............................. 19.23 (0.19) 2.54 2.35 -- (0.09) (0.09) 21.49
CLASS B
6/08/98-10/31/98........................ 12.50 (0.04) 0.10 0.06 -- -- -- 12.56
10/31/99................................ 12.56 (0.23) 6.72 6.49 -- -- -- 19.05
10/31/2000.............................. 19.05 (0.34) 2.52 2.18 -- (0.09) (0.09) 21.14
CLASS C
5/22/00-10/31/00........................ 21.70 (0.16) (0.40) (0.56) -- -- -- 21.14
CLASS II
6/08/98-10/31/98........................ 12.50 (0.04) 0.10 0.06 -- -- -- 12.56
10/31/99................................ 12.56 (0.23) 6.72 6.49 -- -- -- 19.05
10/31/2000.............................. 19.05 (0.35) 2.53 2.18 -- (0.09) (0.09) 21.14
CLASS Z
7/07/99-10/31/99........................ 18.18 -- 1.09 1.09 -- -- -- 19.27
10/31/2000.............................. 19.27 (0.09) 2.53 2.44 -- (0.09) (0.09) 21.62
-----------------------------------------------------------------------------------------------------------------------------
FOCUSED TECHNET PORTFOLIO
CLASS A
05/22/00-10/31/00....................... $12.50 (0.11) $ 3.13 $ 3.02 $ -- $ -- $ -- $15.52
CLASS B
05/22/00-10/31/00 12.50 (0.17) 3.14 2.97 -- -- -- 15.47
CLASS C
05/22/00-10/31/00....................... 12.50 (0.17) 3.14 2.97 -- -- -- 15.47
CLASS II
05/22/00-10/31/00....................... 12.50 (0.17) 3.14 2.97 -- -- -- 15.47
CLASS Z
10/03/00-10/31/00....................... 17.33 (0.01) (1.79) (1.80) -- -- -- 15.53
-----------------------------------------------------------------------------------------------------------------------------
FOCUSED GROWTH AND INCOME
CLASS A
10/15/97-10/31/97....................... $12.50 $(0.01) $(0.53) $(0.52) $ -- $ -- $ -- $11.98
10/31/98................................ 11.98 0.03 1.04 1.07 (0.01) -- (0.01) 13.04
10/31/99................................ 13.04 (0.04) 4.30 4.26 -- (0.18) (0.18) 17.12
10/31/2000.............................. 17.12 (0.13) 3.51 3.38 -- (0.98) (0.98) 19.52
CLASS B
10/15/97-10/31/97....................... 12.50 -- (0.54) (0.54) -- -- -- 11.96
10/31/98................................ 11.96 (0.07) 1.08 1.01 (0.01) -- (0.01) 12.96
10/31/99................................ 12.96 (0.13) 4.25 4.12 -- (0.18) (0.18) 16.90
10/31/2000.............................. 16.90 (0.26) 3.46 3.20 -- (0.98) (0.98) 19.12
CLASS II
10/15/97-10/31/97....................... 12.50 -- (0.53) (0.53) -- -- -- 11.97
10/31/98................................ 11.97 (0.07) 1.06 0.99 (0.01) -- (0.01) 12.95
10/31/99................................ 12.95 (0.14) 4.26 4.12 -- (0.18) (0.18) 16.89
10/31/2000.............................. 16.89 (0.26) 3.46 3.20 -- (0.98) (0.98) 19.11
CLASS Z
10/06/00-10/31/00....................... 20.28 (0.01) (0.76) (0.77) -- -- -- 19.51
<CAPTION>
RATIO OF
NET ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS)
PERIOD TOTAL PERIOD TO AVERAGE TO AVERAGE NET PORTFOLIO
ENDED RETURN(2) (000'S) NET ASSETS(4) ASSETS(4) TURNOVER
---------------------------------------- --------- ---------- ------------------ --------------------- ---------
<S> <C> <C> <C> <C> <C>
FOCUS PORTFOLIO
CLASS A
6/08/98-10/31/98........................ 0.80% $ 29,770 1.45%(3) (0.21)%(3) 106%
10/31/99................................ 52.62 169,734 1.45 (0.70) 161
10/31/2000.............................. 12.23 401,754 1.54(5) (0.81)(5) 228
CLASS B
6/08/98-10/31/98........................ 0.48 45,817 2.10(3) (0.92)(3) 106
10/31/99................................ 51.67 271,531 2.10 (1.34) 161
10/31/2000.............................. 11.45 641,205 2.19(5) (1.46)(5) 228
CLASS C
5/22/00-10/31/00........................ (1.26) 6,188 2.20(3)(5) (1.61)(3)(5) 228
CLASS II
6/08/98-10/31/98........................ 0.48 35,387 2.10(3) (0.93)(3) 106
10/31/99................................ 51.67 261,536 2.10 (1.34) 161
10/31/2000.............................. 11.45 793,146 2.20(5) (1.46)(5) 228
CLASS Z
7/07/99-10/31/99........................ 6.00 2,522 0.93(3) (0.09)(3) 161
10/31/2000.............................. 12.67 12,523 1.12(5) (0.38)(5) 228
----------------------------------------
FOCUSED TECHNET PORTFOLIO
CLASS A
05/22/00-10/31/00....................... 24.16% $ 89,371 1.97%(3)(5) (1.30)%(3)(5) 176%
CLASS B
05/22/00-10/31/00 23.76 70,073 2.62(3)(5) (1.97)(3)(5) 176%
CLASS C
05/22/00-10/31/00....................... 23.76 630 2.62(3)(5) (1.99)(3)(5) 176%
CLASS II
05/22/00-10/31/00....................... 23.76 86,105 2.62(3)(5) (1.97)(3)(5) 176%
CLASS Z
10/03/00-10/31/00....................... (10.13) 563 1.40(3)(5) (0.76)(3)(5) 176%
----------------------------------------
FOCUSED GROWTH AND INCOME
CLASS A
10/15/97-10/31/97....................... (4.16)% $ 23,593 1.78%(3) 1.35%(3) 2%
10/31/98................................ 8.95 9,799 1.78 0.22 98
10/31/99................................ 33.10 29,281 1.54(5) (0.26)(5) 165
10/31/2000.............................. 19.88 62,164 1.45 (0.62 121
CLASS B
10/15/97-10/31/97....................... (4.32) 941 2.43(3) 0.29(3) 2
10/31/98................................ 8.43 16,157 2.43 (0.52) 98
10/31/99................................ 32.21 39,636 2.20(5) (0.87)(5) 165
10/31/2000.............................. 19.03 83,480 2.10 (1.27) 121
CLASS II
10/15/97-10/31/97....................... (4.24) 143 2.43(3) 0.54(3) 2
10/31/98................................ 8.26 2,490 2.43 (0.53) 98
10/31/99................................ 32.24 15,619 2.16(5) (0.97)(5) 165
10/31/2000.............................. 19.04 69,826 2.10 (1.26) 121
CLASS Z
10/06/00-10/31/00....................... (3.80) 148 0.88(3) (0.42)(3) 121
</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>
10/31/98 10/31/99 10/31/2000 10/31/97 10/31/98 10/31/99 10/31/2000
-------- -------- ---------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Focused Growth and
Focus A................ 0.32% 0.18% 0.05% Income A............... 0.58% 0.62% 0.37% 0.34%
Focused Growth and
Focus B................ 0.32% 0.16% 0.04% Income B............... 1.26% 0.67% 0.44% 0.32%
Focused Growth and
Focus C................ -- -- 1.70% Income II.............. 3.12% 2.11% 0.60% 0.35%
Focused Growth and
Focus II............... 0.32% 0.17% 0.04% Income Z............... -- -- -- 26.87%
Focus Z................ -- 2.23% 0.13%
Focused TechNet A...... -- -- 0.30%
Focused TechNet B...... -- -- 0.31%
Focused TechNet C...... -- -- 7.91%
Focused TechNet II..... -- -- 0.31%
Focused TechNet Z...... -- -- 45.91%
</TABLE>
(5) Net of custody credits of 0.02% and 0.01% for Focused Technet Portfolio and
Focused Growth & Income Portfolio, respectively.
See Notes to Financial Statements
37
<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 VALUE PORTFOLIO
CLASS A
11/01/99-10/31/00............... $12.50 $ 0.03 $ 3.73 $ 3.76 $ -- $ -- $ -- $16.26 30.08%
CLASS B
11/01/99-10/31/00............... 12.50 (0.07) 3.73 3.66 -- -- -- 16.16 29.28
CLASS II
11/01/99-10/31/00............... 12.50 (0.08) 3.74 3.66 -- -- -- 16.16 29.28
--------------------------------------------------------------------------------------------------------------------------------
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
10/31/2000...................... 14.26 (0.11) 0.29 0.18 -- -- -- 14.44 1.26
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
10/31/2000...................... 13.98 (0.22) 0.31 0.09 -- -- -- 14.07 0.64
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
10/31/2000...................... 13.99 (0.21) 0.30 0.09 -- -- -- 14.08 0.64
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
10/31/2000...................... 14.41 0.03 0.24 0.27 -- -- -- 14.68 1.87
<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 VALUE PORTFOLIO
CLASS A
11/01/99-10/31/00............... $40,755 1.55 %(3)(5) 0.19%(3)(5) 220%
CLASS B
11/01/99-10/31/00............... 33,418 2.20 (3)(5) (0.52)(3)(5) 220
CLASS II
11/01/99-10/31/00............... 73,484 2.20 (3)(5) (0.53)(3)(5) 220
--------------------------------
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
10/31/2000...................... 49,085 2.03 (5) (0.72)(5) 89
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
10/31/2000...................... 48,901 2.68 (5) (1.37)(5) 89
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
10/31/2000...................... 20,367 2.68 (5) (1.30)(5) 89
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
10/31/2000...................... 333 1.46 (5) 0.19(5) 89
</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>
10/31/2000 10/31/97 10/31/98 10/31/99 10/31/2000
---------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Focused Value A........ 0.50% International Equity 0.37% 0.45% 0.25% 0.04%
A......................
Focused Value B........ 0.59% International Equity 0.45% 0.48% 0.24% 0.04%
B......................
Focused Value II....... 0.50% International Equity 0.87% 0.55% 0.33% 0.10%
II.....................
International Equity -- 16.25% 26.35% 11.45%
Z....................
</TABLE>
(5) Net of custody credits of 0.01%
See Notes to Financial Statements
38
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--96.1%
AEROSPACE & MILITARY TECHNOLOGY--0.2%
Boeing Co................................................. 4,590 $ 311,259
-------------
APPAREL & TEXTILES--0.1%
Oakley, Inc.+............................................. 8,000 168,000
-------------
BANKS--2.8%
Bank of New York Co., Inc................................. 28,780 1,656,649
Chase Manhattan Corp...................................... 29,100 1,324,050
Fleetboston Financial Corp................................ 9,000 342,000
Mellon Financial Corp.+................................... 4,500 217,125
-------------
3,539,824
-------------
BROADCASTING & MEDIA--9.5%
AT&T Corp.-Liberty Media Group, Inc., Class A+............ 88,950 1,601,100
Cablevision Systems Corp., Class A+....................... 13,495 1,005,377
Comcast Corp., Class A+................................... 59,220 2,413,215
Omnicom Group, Inc........................................ 6,300 581,175
Pegasus Communications Corp.,Class A+..................... 3,800 135,137
Time Warner, Inc.......................................... 36,335 2,758,190
Univision Communications, Inc., Class A+.................. 11,200 428,400
Viacom, Inc., Class B+.................................... 56,051 3,187,901
-------------
12,110,495
-------------
COMMUNICATION EQUIPMENT--2.5%
CIENA Corp.+.............................................. 5,000 525,625
JDS Uniphase Corp.+....................................... 12,700 1,033,463
Lucent Technologies, Inc.................................. 8,900 207,481
Metromedia Fiber Network, Inc., Class A+.................. 11,200 212,800
Network Appliance, Inc.+.................................. 1,300 154,700
Nortel Networks Corp...................................... 23,800 1,082,900
-------------
3,216,969
-------------
COMPUTERS & BUSINESS EQUIPMENT--2.4%
Compaq Computer Corp...................................... 22,900 696,389
Dell Computer Corp.+...................................... 9,600 283,200
Hewlett-Packard Co........................................ 29,200 1,355,975
International Business Machines Corp...................... 7,500 738,750
-------------
3,074,314
-------------
COMPUTER SOFTWARE--12.7%
Cisco Systems, Inc.+...................................... 91,600 4,934,950
EMC Corp.+................................................ 56,270 5,011,547
i2 Technologies, Inc.+.................................... 2,000 340,000
Microsoft Corp.+.......................................... 40,975 2,822,153
Oracle Corp.+............................................. 12,000 396,000
Sun Microsystems, Inc.+................................... 21,540 2,388,248
VERITAS Software Corp.+................................... 1,800 253,828
-------------
16,146,726
-------------
</TABLE>
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
DRUGS--7.1%
ALZA Corp.+............................................... 6,000 $ 485,625
American Home Products Corp............................... 20,500 1,301,750
Eli Lilly & Co............................................ 10,780 963,463
Immunex Corp.+............................................ 4,500 191,531
Merck & Co., Inc.......................................... 3,500 314,781
Millenium Pharmaceuticals, Inc.+.......................... 5,000 362,813
Pfizer, Inc............................................... 61,580 2,659,486
Pharmacia Corp............................................ 14,696 808,280
Schering-Plough Corp...................................... 26,175 1,352,920
Serono SA ADR+............................................ 12,900 291,863
Teva Pharmaceutical Industries Ltd. ADR................... 6,000 354,750
-------------
9,087,262
-------------
ELECTRIC UTILITIES--0.3%
Exelon Corp............................................... 5,800 348,725
-------------
ELECTRONICS--9.4%
Agilent Technologies, Inc.+............................... 4,614 213,686
Analog Devices, Inc.+..................................... 2,700 175,500
Applied Materials, Inc.+.................................. 38,675 2,054,609
Applied Micro Circuits Corp.+............................. 3,200 244,400
ASM Lithography Holdings NV+.............................. 43,900 1,220,969
Broadcom Corp., Class A+.................................. 900 200,137
Emerson Electric Co....................................... 4,500 330,469
Integrated Device Technology, Inc.+....................... 8,000 450,500
Intel Corp................................................ 33,500 1,507,500
Linear Technology Corp.................................... 30,890 1,994,336
Motorola, Inc............................................. 22,400 558,600
Palm, Inc.+............................................... 8,000 428,500
STMicroelectronics NV NY Registry Shares.................. 8,400 436,275
Texas Instruments, Inc.................................... 44,040 2,160,712
-------------
11,976,193
-------------
ENERGY SERVICES--1.8%
Baker Hughes, Inc......................................... 5,900 202,813
Halliburton Co............................................ 17,300 641,181
Nabors Industries, Inc.+.................................. 3,700 188,330
Schlumberger Ltd.......................................... 14,100 1,073,362
Transocean Sedco Forex, Inc............................... 3,500 185,500
-------------
2,291,186
-------------
ENERGY SOURCES--3.6%
Anadarko Petroleum Corp................................... 8,375 536,419
Apache Corp............................................... 6,500 359,531
Burlington Resources, Inc................................. 2,200 79,200
Chevron Corp.............................................. 2,200 180,675
Devon Energy Corp......................................... 4,000 201,600
Enron Corp................................................ 19,950 1,637,147
Exxon Mobil Corp.......................................... 9,000 802,687
Kerr-McGee Corp........................................... 8,000 522,500
Royal Dutch Petroleum Co.
NY Registry Shares GDR.................................. 4,500 267,188
-------------
4,586,947
-------------
</TABLE>
39
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
FINANCIAL SERVICES--11.3%
American Express Co....................................... 50,790 $ 3,047,400
Capital One Financial Corp................................ 5,000 315,625
Charles Schwab Corp....................................... 35,325 1,240,791
Citigroup, Inc............................................ 66,848 3,517,876
Federal National Mortgage Association..................... 13,560 1,044,120
Goldman Sachs Group, Inc.................................. 7,000 698,687
Merrill Lynch & Co., Inc.................................. 11,800 826,000
Morgan (J.P.) & Co., Inc.................................. 1,500 248,250
Morgan Stanley, Dean Witter & Co.......................... 31,315 2,514,986
Wells Fargo Co............................................ 22,000 1,018,875
-------------
14,472,610
-------------
FOOD, BEVERAGE & TOBACCO--0.5%
Anheuser-Busch Cos., Inc.................................. 14,875 680,531
-------------
INSURANCE--1.7%
American International Group, Inc.#....................... 18,687 1,831,326
Chubb Corp................................................ 3,500 295,531
-------------
2,126,857
-------------
INTERNET CONTENT--1.3%
Juniper Networks, Inc.+................................... 4,900 955,500
VeriSign, Inc.+........................................... 5,350 706,200
-------------
1,661,700
-------------
INTERNET SOFTWARE--2.1%
America Online, Inc.+..................................... 25,200 1,270,836
BEA Systems, Inc.+........................................ 10,000 717,500
Inktomi Corp.+............................................ 11,310 717,478
-------------
2,705,814
-------------
LEISURE & TOURISM--0.9%
MGM Mirage, Inc........................................... 33,820 1,168,904
-------------
MACHINERY--0.2%
SPX Corp.+................................................ 2,300 284,338
-------------
MEDICAL PRODUCTS--3.2%
Amgen, Inc.+.............................................. 15,900 921,207
Genentech, Inc.+.......................................... 19,080 1,574,100
Human Genome Sciences, Inc.+.............................. 3,500 309,367
Johnson & Johnson Co...................................... 4,000 368,500
PE Corp.-PE Biosystems Group.............................. 7,240 847,080
-------------
4,020,254
-------------
MULTI-INDUSTRY--6.4%
Corning, Inc.............................................. 19,400 1,484,100
General Electric Co....................................... 104,350 5,719,684
Tyco International Ltd.................................... 16,900 958,019
-------------
8,161,803
-------------
MULTI-INDUSTRY (CONTINUED)
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL--5.3%
Costco Wholesale Corp.+................................... 6,200 $ 227,075
Gap, Inc.................................................. 24,500 632,406
Home Depot, Inc........................................... 55,585 2,390,155
Kohl's Corp.+............................................. 15,700 850,744
Tiffany & Co.............................................. 22,800 973,275
Wal-Mart Stores, Inc...................................... 38,110 1,729,241
-------------
6,802,896
-------------
TELECOMMUNICATIONS--10.8%
General Motors Corp., Class H+............................ 60,175 1,949,670
Global Crossing Ltd.+..................................... 25,900 611,888
Level 3 Communications, Inc.+............................. 2,900 138,294
Nextel Communications, Inc., Class A+..................... 33,730 1,296,497
Nokia Corp. ADR........................................... 101,175 4,325,231
NTL, Inc.+................................................ 9,925 436,080
Qwest Communications International, Inc.+................. 24,100 1,171,862
Sprint Corp. (PCS Group)+................................. 22,040 840,275
Telefonica SA ADR......................................... 13,930 807,069
Vodafone Group PLC........................................ 42,240 1,797,857
Xo Communications, Inc.................................... 10,800 364,331
-------------
13,739,054
-------------
TOTAL INVESTMENT SECURITIES--96.1%
(cost $102,044,757)....................................... 122,682,661
-------------
SHORT-TERM SECURITIES--3.0%
American Express Credit Corp. 6.61% due 11/01/00.......... 874 874,000
Federal Home Loan Mortgage Discount Notes 6.45% due
11/01/00................................................ 1,900 1,900,000
Ford Motor Credit Co.
6.51% due 11/01/00...................................... 1,090 1,090,000
-------------
TOTAL SHORT-TERM SECURITIES
(cost $3,864,000)......................................... 3,864,000
-------------
REPURCHASE AGREEMENT--2.6%
State Street Bank & Trust Co. Joint Repurchase Agreement
(Note 2)
(cost: $3,286,000) $ 3,286 3,286,000
-------------
TOTAL INVESTMENTS--
(cost $109,194,757)....................................... 101.7% 129,832,661
liabilities in excess of other assets....................... (1.7) (2,204,830)
------------- -------------
NET ASSETS-- 100.0% $ 127,627,831
============= =============
</TABLE>
------------------
+ Non-income producing security
# Security represents an investment in an affiliated company
ADR ("American Depositary Receipt")
GDR ("Global Depositary Receipt")
See Notes to Financial Statements
40
<PAGE>
STYLE SELECT SERIES LOGO
Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--96.0%
AEROSPACE & MILITARY TECHNOLOGY--1.2%
Embraer-Empresa Brasileira de Aeronautica SA ADR.......... 14,200 $ 410,912
Goodrich (B.F.) Co........................................ 21,200 867,875
Precision Castparts Corp.................................. 19,700 743,675
Titan Corp.+.............................................. 18,400 246,100
-------------
2,268,562
-------------
APPAREL & TEXTILES--0.2%
Jones Apparel Group, Inc.+................................ 15,200 422,750
-------------
AUTOMOTIVE--0.6%
Harley-Davidson, Inc...................................... 15,700 756,544
O'Reilly Automotive, Inc.+................................ 25,000 450,000
-------------
1,206,544
-------------
BANKS--0.2%
North Fork Bancorp., Inc.................................. 21,100 425,956
-------------
BROADCASTING & MEDIA--4.1%
AT&T Corp.-Liberty Media Group, Inc., Class A+............ 44 792
Cablevision Systems Corp., Class A+....................... 8,600 640,700
Catalina Marketing Corp.+................................. 21,600 847,800
Charter Communications, Inc., Class A+.................... 25,100 489,450
Cox Radio, Inc.+.......................................... 8,900 202,475
Crown Castle International Corp.+#........................ 12,400 375,875
EchoStar Communications Corp., Class A+................... 18,300 828,075
Entravision Communications Corp.+......................... 16,100 284,769
Gemstar-TV Guide International, Inc.+..................... 9,988 684,802
GoAmerica, Inc.+.......................................... 20,800 217,100
Lamar Advertising Co.+.................................... 29,600 1,420,800
Reader's Digest Association, Inc., Class A................ 14,900 546,644
Rogers Communications, Inc., Class B+..................... 16,100 313,950
Univision Communications, Inc., Class A+.................. 12,100 462,825
USA Networks, Inc.+....................................... 22,900 463,725
Vyyo, Inc.+............................................... 3,000 66,375
-------------
7,846,157
-------------
BUSINESS SERVICES--6.5%
Affiliated Computer Services, Inc., Class A+.............. 23,000 1,280,812
BISYS Group, Inc.+........................................ 13,000 612,625
Ceridian Corp.+........................................... 22,000 550,000
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
BUSINESS SERVICES (CONTINUED)
CIBER, Inc.+.............................................. 15,300 $ 119,531
Concord EFS, Inc.+........................................ 66,950 2,765,872
Dycom Industries, Inc.+................................... 14,350 539,919
Fiserv, Inc.+............................................. 11,175 585,989
FutureLink Corp.+......................................... 12,500 22,656
Hertz Corp., Class A...................................... 12,800 420,800
Manpower, Inc............................................. 22,600 786,762
NOVA Corp.+............................................... 31,100 487,881
Plexus Corp.+............................................. 6,800 428,825
Republic Services, Inc.+.................................. 58,500 786,094
Robert Half International, Inc.+.......................... 38,400 1,171,200
SunGard Data Systems, Inc.+............................... 18,100 925,363
United Rentals, Inc.+..................................... 12,200 262,300
Viad Corp................................................. 30,200 645,525
-------------
12,392,154
-------------
CHEMICALS--0.0%
Crompton Corp............................................. 3 24
-------------
COMMUNICATION EQUIPMENT--6.7%
Adaptec, Inc.+............................................ 15,000 237,188
Advanced Fibre Communications, Inc.+...................... 16,800 547,050
Andrew Corp.+............................................. 25,100 660,444
CIENA Corp.+.............................................. 9,500 998,687
Comverse Technology, Inc.+................................ 4,600 514,050
Corvis Corp.+............................................. 7,600 498,750
Emulex Corp.+............................................. 6,300 925,312
Extreme Networks, Inc.+................................... 10,000 829,375
Finisar Corp.+............................................ 12,800 368,800
Foundry Networks, Inc.+................................... 6,900 458,419
Harmonic, Inc.+........................................... 9,700 140,650
JDS Uniphase Corp.+....................................... 6,360 517,545
JNI Corp.+................................................ 8,300 739,219
Lightpath Technologies, Inc.+............................. 13,000 354,250
Network Appliance, Inc.+.................................. 6,100 725,900
New Focus, Inc.+.......................................... 10,500 666,750
Newport Corp.............................................. 5,100 562,144
ONI Systems Corp.+........................................ 10,500 851,156
Oplink Communications, Inc.+.............................. 900 21,938
Powerwave Technologies, Inc.+............................. 21,300 1,025,062
Scientific-Atlanta, Inc................................... 14,000 958,125
Turnstone Systems, Inc.+.................................. 4,300 91,375
-------------
12,692,189
-------------
COMPUTERS & BUSINESS EQUIPMENT--1.0%
Brocade Communications Systems, Inc.+..................... 3,900 877,987
McData Corp.+............................................. 1,900 158,383
Tech Data Corp.+.......................................... 20,700 861,638
-------------
1,898,008
-------------
</TABLE>
41
<PAGE>
STYLE SELECT SERIES LOGO
Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
COMPUTER SOFTWARE--6.5%
Adobe Systems, Inc........................................ 5,200 $ 395,525
Electronic Arts, Inc.+.................................... 32,700 1,635,000
EMC Corp.+................................................ 6,100 543,281
Informatica Corp.+........................................ 6,000 567,000
Intuit, Inc.+............................................. 16,500 1,013,719
Keane, Inc.+.............................................. 25,300 328,900
Mercury Interactive Corp.+................................ 12,200 1,354,200
NetIQ Corp.+.............................................. 8,400 723,450
Nuance Communications, Inc.+.............................. 4,700 405,375
Opnet Technologies, Inc.+................................. 100 3,294
PeopleSoft, Inc.+......................................... 20,500 894,633
Peregrine Systems, Inc.+.................................. 22,800 547,200
Rational Software Corp.+.................................. 19,500 1,163,906
Research In Motion Ltd.+.................................. 4,600 460,000
Siebel Systems, Inc.+..................................... 6,100 640,119
Sycamore Networks, Inc.+.................................. 7,800 493,350
Ulticom, Inc.+............................................ 8,400 401,100
VERITAS Software Corp.+................................... 4,550 641,621
Vitria Technology, Inc.+.................................. 8,200 220,375
-------------
12,432,048
-------------
DRUGS--10.6%
Abgenix, Inc.+............................................ 4,500 354,938
Allergan, Inc............................................. 14,000 1,176,875
Alpharma, Inc., Class A................................... 3,800 143,867
ALZA Corp.+............................................... 13,800 1,116,937
AmeriSource Health Corp., Class A+........................ 36,100 1,568,094
Biogen, Inc.+............................................. 3,800 228,713
Biovail Corp.+............................................ 18,100 761,331
Charles River Laboratories International, Inc.+........... 9,800 247,869
CV Therapeutics, Inc.+.................................... 7,300 574,875
Genzyme Corp.+............................................ 3,000 213,000
Genzyme Surgical Products+................................ 500 3,734
Gilead Sciences, Inc.+.................................... 10,500 903,000
IDEC Pharmaceuticals Corp.+............................... 1,900 372,638
Immunex Corp.+............................................ 7,600 323,475
King Pharmaceuticals, Inc.+............................... 23,700 1,062,056
Medarex, Inc.+............................................ 15,600 953,550
MedImmune, Inc.+.......................................... 27,700 1,810,887
Merck & Co., Inc.......................................... 6,900 620,569
Millenium Pharmaceuticals, Inc.+.......................... 32,400 2,351,025
Omnicare, Inc............................................. 57,600 1,008,000
Pfizer, Inc............................................... 17,900 773,056
Schering-Plough Corp...................................... 9,900 511,706
Sepracor, Inc.+........................................... 5,000 340,625
Serono SA ADR+............................................ 31,200 705,900
Shire Pharmaceuticals Group PLC ADR+...................... 16,100 1,012,288
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
DRUGS (CONTINUED)
Teva Pharmaceutical Industries Ltd. ADR................... 12,700 $ 750,888
Watson Pharmaceuticals, Inc.+............................. 4,400 275,275
-------------
20,165,171
-------------
ELECTRIC UTILITIES--0.9%
Calpine Corp.+............................................ 10,500 828,844
Southern Energy, Inc.+.................................... 23,900 651,275
TNPC, Inc.+............................................... 13,400 222,775
-------------
1,702,894
-------------
ELECTRICAL EQUIPMENT--1.1%
Sanmina Corp.+............................................ 13,000 1,486,062
SCI Systems, Inc.+........................................ 15,400 662,200
-------------
2,148,262
-------------
ELECTRONICS--12.1%
Altera Corp.+............................................. 8,000 327,500
American Superconductor Corp.+............................ 4,000 191,000
Analog Devices, Inc.+..................................... 24,300 1,579,500
Applied Micro Circuits Corp.+............................. 15,228 1,163,038
Atmel Corp.+.............................................. 24,400 364,475
Broadcom Corp., Class A+.................................. 3,000 667,125
C-Mac Industries, Inc.+................................... 6,100 338,550
Celestica, Inc.+.......................................... 3,900 279,572
Flextronics International Ltd.+........................... 25,600 972,800
GlobeSpan, Inc.+.......................................... 2,900 223,119
Integrated Device Technology, Inc.+....................... 3,000 168,938
International Rectifier Corp.+............................ 8,000 357,000
Jabil Circuit, Inc.+...................................... 24,600 1,403,737
KLA-Tencor Corp.+......................................... 31,800 1,075,238
Kulicke & Soffa Industries, Inc.+......................... 16,800 246,750
Lam Research Corp.+....................................... 18,100 350,688
Lattice Semiconductor Corp.+.............................. 37,900 1,106,206
LTX Corp.+................................................ 12,200 170,800
Maxim Integrated Products, Inc.+.......................... 11,200 742,700
MIPS Technologies, Inc.+.................................. 11,100 390,581
Molex, Inc., Class A...................................... 12,500 491,406
PerkinElmer, Inc.......................................... 10,500 1,254,750
PMC-Sierra, Inc.+......................................... 4,500 762,750
Power-One, Inc.+.......................................... 8,400 595,875
QLogic Corp.+............................................. 22,600 2,186,550
SDL, Inc.+................................................ 1,600 414,800
TranSwitch Corp.+......................................... 6,500 365,625
TriQuint Semiconductor, Inc.+............................. 8,000 306,500
Tvia, Inc.+............................................... 36,000 589,500
Varian Semiconductor Equipment Associates, Inc.+.......... 2,300 52,900
Vitesse Semiconductor Corp.+.............................. 18,100 1,265,869
Waters Corp.+............................................. 26,200 1,901,137
</TABLE>
42
<PAGE>
STYLE SELECT SERIES LOGO
Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
ELECTRONICS (CONTINUED)
Xilinx, Inc.+............................................. 10,400 $ 753,350
-------------
23,060,329
-------------
ENERGY SERVICES--6.4%
Baker Hughes, Inc......................................... 26,700 917,812
BJ Services Co.+.......................................... 19,600 1,027,775
Diamond Offshore Drilling, Inc............................ 44,100 1,524,206
Halliburton Co............................................ 6,100 226,081
Lone Star Technologies, Inc.+............................. 10,900 437,635
Marine Drilling Co., Inc.+................................ 32,000 764,000
Nabors Industries, Inc.+.................................. 10,700 544,630
National-Oilwell, Inc.+................................... 10,000 292,500
Patterson Energy, Inc.+................................... 31,400 883,125
R & B Falcon Corp.+....................................... 20,600 515,000
Rowan Cos., Inc.+......................................... 31,400 790,888
Smith International, Inc.+................................ 23,200 1,635,600
Tidewater, Inc............................................ 22,300 1,029,981
Transocean Sedco Forex, Inc............................... 9,200 487,600
Varco International, Inc.+................................ 22,891 394,870
Veritas DGC, Inc.+........................................ 20,000 600,000
-------------
12,071,703
-------------
ENERGY SOURCES--1.8%
Devon Energy Corp......................................... 20,700 1,043,280
Enron Corp................................................ 4,600 377,487
Global Marine, Inc.+...................................... 51,400 1,362,100
Ocean Energy, Inc.+....................................... 51,200 710,400
-------------
3,493,267
-------------
FINANCIAL SERVICES--4.7%
Capital One Financial Corp................................ 13,200 833,250
Donaldson, Lufkin & Jenrette, Inc......................... 4,700 422,119
Eaton Vance Corp.......................................... 10,700 532,994
Federated Investors, Inc., Class B........................ 43,000 1,252,375
Franklin Resources, Inc................................... 13,200 565,488
Heller Financial, Inc..................................... 32,400 947,700
Lehman Brothers Holdings, Inc............................. 22,400 1,444,800
Merrill Lynch & Co., Inc.................................. 9,600 672,000
Morgan Stanley Dean Witter & Co........................... 4,600 369,437
Waddell & Reed Financial, Inc., Class A................... 30,800 981,750
Waddell & Reed Financial, Inc., Class B................... 26,100 815,625
-------------
8,837,538
-------------
FOOD, BEVERAGE & TOBACCO--0.2%
Sysco Corp................................................ 6,500 339,219
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
GAS & PIPELINE UTILITIES--0.4%
Dynegy, Inc., Class A..................................... 16,992 $ 786,942
-------------
HEALTH SERVICES--3.3%
Health Management Associates, Inc., Class A+.............. 51,100 1,012,419
Incyte Genomics, Inc.+.................................... 8,800 322,300
Laboratory Corp. of America Holdings+..................... 900 121,387
Lincare Holdings, Inc.+................................... 55,200 2,321,850
Quest Diagnostics, Inc.+.................................. 2,600 250,250
Tenet Healthcare Corp..................................... 21,300 837,356
Wellpoint Health Networks, Inc.+.......................... 11,200 1,309,700
-------------
6,175,262
-------------
HOUSING--0.3%
Polycom, Inc.+............................................ 9,600 624,000
-------------
INSURANCE--1.7%
Ace Ltd................................................... 21,400 839,950
Aflac, Inc................................................ 12,200 891,362
MGIC Investment Corp...................................... 10,700 728,937
Protective Life Corp...................................... 15,800 365,375
Radian Group, Inc......................................... 6,300 446,513
-------------
3,272,137
-------------
INTERNET CONTENT--4.6%
Check Point Software Technologies, Ltd.+.................. 6,000 950,250
CNET Networks, Inc.+...................................... 14,400 453,600
Commerce One, Inc.+....................................... 7,000 449,313
Critical Path, Inc.+...................................... 11,500 558,469
Digex, Inc.+.............................................. 10,100 396,425
DoubleClick, Inc.+........................................ 13,800 224,250
E*TRADE Group, Inc.+...................................... 20,300 295,619
eSPEED, Inc., Class A+.................................... 2,000 42,000
Exodus Communications, Inc.+.............................. 36,800 1,235,100
HomeStore.com, Inc.+...................................... 25,800 877,200
Internet Security Systems, Inc.+.......................... 16,800 1,482,600
Juniper Networks, Inc.+................................... 3,500 682,500
Macromedia, Inc.+......................................... 4,800 369,900
PurchasePro.com, Inc.+.................................... 3,100 83,700
TMP Worldwide, Inc.+...................................... 7,200 501,187
WebMD Corp.+.............................................. 6,000 68,250
Yahoo!, Inc.+............................................. 1,602 93,917
-------------
8,764,280
-------------
INTERNET SOFTWARE--1.2%
Art Technology Group, Inc.+............................... 8,000 502,000
BEA Systems, Inc.+........................................ 7,800 559,650
Entrade, Inc.+(1)......................................... 11,250 29,742
Phone.com, Inc.+.......................................... 4,600 425,788
Rhythms NetConnections, Inc.+............................. 2,000 4,375
Serviceware Technologies, Inc.+........................... 15,200 89,300
</TABLE>
43
<PAGE>
STYLE SELECT SERIES LOGO
Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
INTERNET SOFTWARE (CONTINUED)
Software.com, Inc.+....................................... 3,700 $ 551,300
USinternetworking, Inc.+.................................. 9,300 21,506
-------------
2,183,661
-------------
LEISURE & TOURISM--0.9%
Galileo International, Inc................................ 22,800 450,300
MGM Mirage, Inc........................................... 16,300 563,369
Outback Steakhouse, Inc.+................................. 21,700 618,450
-------------
1,632,119
-------------
MEDICAL PRODUCTS--5.7%
Affymetrix, Inc.+......................................... 10,600 586,975
Biosource International, Inc.+............................ 15,200 323,950
Celgene Corp.+............................................ 8,100 521,438
Cell Therapeutics, Inc.+.................................. 6,900 461,545
COR Therapeutics, Inc.+................................... 7,800 440,700
CuraGen Corp.+............................................ 13,400 865,975
Cytyc Corp.+.............................................. 4,900 290,938
Forest Laboratories, Inc.+................................ 6,500 861,250
Human Genome Sciences, Inc.+.............................. 16,600 1,467,284
Invitrogen Corp.+......................................... 7,300 555,256
Maxim Pharmaceuticals, Inc.+.............................. 6,400 284,000
PE Corp. -- Celera Genomics+.............................. 4,600 310,500
PE Corp. -- PE Biosystems Group........................... 6,700 783,900
QLT PhotoTherapeutics, Inc.+.............................. 13,500 671,414
St. Jude Medical, Inc.+................................... 28,300 1,556,500
Sybron International Corp.+............................... 33,500 829,125
-------------
10,810,750
-------------
METALS & MINERALS--0.4%
Allegheny Technologies, Inc............................... 12,800 259,200
Martin Marietta Materials, Inc............................ 10,500 403,200
-------------
662,400
-------------
MULTI-INDUSTRY--2.3%
Bombardier Inc., Class B.................................. 38,100 597,378
Corning, Inc.............................................. 13,700 1,048,050
Danaher Corp.............................................. 11,000 694,375
ITT Industries, Inc....................................... 16,000 521,000
Pentair, Inc.............................................. 22,600 673,762
Quanta Services, Inc.+.................................... 17,400 540,488
Teleflex, Inc............................................. 8,300 286,869
-------------
4,361,922
-------------
RETAIL--4.0%
BJ's Wholesale Club, Inc.+................................ 21,700 714,744
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
RETAIL (CONTINUED)
Borders Group, Inc.+...................................... 15,400 $ 213,675
Circuit City Stores, Inc.................................. 28,800 381,600
Consolidated Stores Corp.+................................ 25,600 304,000
CVS Corp.................................................. 17,200 910,525
Family Dollar Stores, Inc................................. 41,100 798,881
MSC Industrial Direct Co., Inc., Class A+................. 14,900 221,638
RadioShack Corp........................................... 13,100 781,087
Starbucks Corp.+.......................................... 17,000 759,688
Tiffany & Co.............................................. 14,700 627,506
TJX Cos., Inc............................................. 38,100 1,038,225
Venator Group, Inc.+...................................... 30,000 423,750
Whole Foods Market, Inc.+................................. 6,900 319,125
-------------
7,494,444
-------------
TELECOMMUNICATIONS--6.1%
Aether Systems, Inc.+..................................... 5,900 475,687
Allegiance Telecom, Inc.+................................. 25,350 796,941
Aspect Communications, Inc.+.............................. 15,200 250,563
AT&T Canada, Inc.+........................................ 7,200 222,750
Gilat Satellite Networks Ltd.+............................ 8,800 450,450
IDT Corp.+................................................ 18,100 647,075
MasTec, Inc.+............................................. 16,750 484,703
McLeodUSA, Inc., Class A+................................. 78,600 1,513,050
Microcell Telecommunications, Inc.+....................... 12,400 345,456
Time Warner Telecom, Inc., Class A+....................... 8,400 500,850
Tritel, Inc.+............................................. 18,300 251,911
Triton PCS Holdings, Inc., Class A+....................... 7,500 348,750
ViaSat, Inc.+............................................. 23,800 523,600
VoiceStream Wireless Corp.+............................... 18,470 2,428,805
Western Wireless Corp., Class A+.......................... 50,300 2,389,250
-------------
11,629,841
-------------
TRANSPORTATION--0.3%
C.H. Robinson Worldwide, Inc.............................. 4,000 218,750
Expeditors International of Washington, Inc............... 7,900 409,813
-------------
628,563
-------------
TOTAL INVESTMENT SECURITIES--96.0%
(cost $158,199,560)....................................... 182,429,096
-------------
</TABLE>
44
<PAGE>
STYLE SELECT SERIES LOGO
Mid-Cap Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM SECURITIES--2.0%
Cayman Island Time Deposit with State Street Bank & Trust
Co. 4.50% due 11/01/00.................................. $ 1,003 $ 1,003,000
T. Rowe Price Reserve Investment Fund#.................... 2,766 2,765,501
-------------
TOTAL SHORT-TERM SECURITIES
(cost $3,768,501)......................................... 3,768,501
-------------
REPURCHASE AGREEMENT--3.8%
State Street Bank & Trust Co.
Joint Repurchase Agreement (Note 2)
(cost: $7,330,000)...................................... 7,330 7,330,000
-------------
TOTAL INVESTMENTS--
(cost $169,298,061)....................................... 101.8% 193,527,597
Liabilities in excess of other assets (1.8) (3,430,430)
------------- -------------
NET ASSETS-- 100.0% $ 190,097,167
============= =============
</TABLE>
------------------
+ Non-income producing security
# Security represents an investment in an affiliated company
ADR ("American Depositary Receipt")
(1) At October 31, 2000 the Portfolio held restricted securities amounting to
0.02% of net assets. The Portfolio will not bear any costs, including those
involved in registration under the Securities Act of 1933, in connection with
the disposition of the securities.
<TABLE>
<CAPTION>
DATE OF UNIT VALUATION AS OF
DESCRIPTION ACQUISITION COST OCTOBER 31, 2000
--------------------- ----------- -------- -----------------
<S> <C> <C> <C>
Entrade, Inc. 12/21/99 $32.00 $0.84375
</TABLE>
See Notes to Financial Statements
45
<PAGE>
STYLE SELECT SERIES LOGO
Aggressive Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--88.4%
APPAREL & TEXTILES--0.3%
Talbots, Inc.............................................. 16,100 $ 1,272,906
-------------
BROADCASTING & MEDIA--3.4%
ADVO, Inc.+............................................... 10,900 401,256
Cinar Films, Inc., Class B+............................... 33,700 120,056
Comcast Corp., Class A+................................... 18,200 741,650
EchoStar Communications Corp., Class A+................... 141,700 6,411,925
Pegasus Communications Corp., Class A+.................... 36,900 1,312,257
Scholastic Corp.+......................................... 2,300 184,000
Spanish Broadcasting Systems Inc., Class A+............... 48,400 435,600
Sylvan Learning Systems, Inc.+............................ 70,000 1,080,625
Time Warner, Inc.......................................... 61,420 4,662,392
-------------
15,349,761
-------------
BUSINESS SERVICES--3.7%
Aeroflex, Inc.+........................................... 61,875 3,681,562
Concord EFS, Inc.+........................................ 42,800 1,768,175
DeVry, Inc.+.............................................. 54,000 1,994,625
ITT Educational Services, Inc............................. 79,400 1,250,550
Mobile Mini, Inc.+........................................ 35,000 697,813
On Assignment, Inc.+...................................... 95,400 2,402,888
Paychex, Inc.............................................. 53,250 3,018,609
Waste Connections, Inc.................................... 40,000 1,022,500
Waste Management, Inc..................................... 46,600 932,000
-------------
16,768,722
-------------
CHEMICALS--0.3%
Semtech Corp.+............................................ 47,800 1,541,550
-------------
COMMUNICATION EQUIPMENT--4.7%
3Com Corp.+............................................... 38,710 687,103
Advanced Switching Commerce, Inc.+........................ 500 5,094
ANTEC Corp.+.............................................. 49,000 597,188
CIENA Corp.+.............................................. 33,400 3,511,175
Cosine Communications, Inc.+.............................. 46,200 1,527,487
Emulex Corp.+............................................. 8,000 1,175,000
Extreme Networks, Inc.+................................... 12,200 1,011,837
Finisar Corp.+............................................ 55,600 1,601,975
JDS Uniphase Corp.+....................................... 15,800 1,285,725
Natural Microsystems Corp.+............................... 31,400 1,418,887
Netro Corp.+.............................................. 37,200 811,425
Network Appliance, Inc.+.................................. 21,900 2,606,100
Oplink Communications, Inc.+.............................. 71,000 1,730,625
Stratos Lightwave, Inc.+.................................. 44,300 1,171,181
Tekelec, Inc.+............................................ 52,700 1,940,019
Turnstone Systems, Inc.+.................................. 19,100 405,875
-------------
21,486,696
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMPUTERS & BUSINESS EQUIPMENT--2.0%
Brocade Communications Systems, Inc.+..................... 18,000 $ 4,092,750
Concurrent Computer Corp.+................................ 60,000 1,057,500
Redback Networks, Inc.+................................... 20,800 2,213,900
Tech Data Corp.+.......................................... 37,500 1,560,937
-------------
8,925,087
-------------
COMPUTER SOFTWARE--9.4%
CheckFree Holdings Corp.+................................. 7,600 378,100
Cisco Systems, Inc.+...................................... 146,735 7,905,348
EMC Corp.+................................................ 78,270 6,970,922
i2 Technologies, Inc.+.................................... 14,100 2,397,000
Mercator Software, Inc.+.................................. 76,000 346,750
Mercury Interactive Corp.+................................ 18,200 2,020,200
Micromuse, Inc.+.......................................... 17,700 3,003,469
National Instruments Corp.+............................... 32,875 1,534,851
NetIQ Corp.+.............................................. 14,000 1,205,750
Nvidia Corp.+............................................. 25,200 1,565,944
Research In Motion Ltd.+.................................. 73,875 7,387,500
Siebel Systems, Inc.+..................................... 36,000 3,777,750
Sun Microsystems, Inc.+................................... 10,700 1,186,362
Sycamore Networks, Inc.+.................................. 32,300 2,042,975
VERITAS Software Corp.+................................... 8,700 1,226,836
-------------
42,949,757
-------------
DRUGS--12.8%
Abgenix, Inc.+............................................ 34,900 2,752,737
Alexion Pharmaceuticals, Inc.............................. 17,410 1,799,759
Allergan, Inc............................................. 89,625 7,534,102
Alpharma, Inc., Class A................................... 10,000 388,125
ALZA Corp.+............................................... 49,100 3,974,031
Biovail Corp.+............................................ 87,600 3,684,675
Caremark Rx, Inc.+........................................ 234,300 2,928,750
Cephalon, Inc.+........................................... 50,700 2,718,787
Elan Corp. PLC ADR+....................................... 54,100 2,809,819
Enzon, Inc................................................ 13,500 961,875
Esperion Therapeutics, Inc................................ 97,500 1,346,719
Express Scripts, Inc.+.................................... 30,700 2,062,656
Genzyme Corp.............................................. 19,600 1,391,600
Icos Corp................................................. 10,900 559,988
IDEC Pharmaceuticals Corp.+............................... 10,300 2,020,087
IVAX Corp.+............................................... 94,100 4,093,350
King Pharmaceuticals, Inc.+............................... 22,500 1,008,281
Medarex, Inc.+............................................ 16,600 1,014,675
Medicis Pharmaceutical Corp., Class A+.................... 24,000 1,767,000
MedImmune, Inc.+.......................................... 123,950 8,103,231
Millenium Pharmaceuticals, Inc.+.......................... 40,000 2,902,500
Pfizer, Inc............................................... 54,435 2,350,912
-------------
58,173,659
-------------
</TABLE>
46
<PAGE>
STYLE SELECT SERIES LOGO
Aggressive Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
ELECTRIC UTILITIES--1.4%
Calpine Corp.+............................................ 26,800 $ 2,115,525
Constellation Energy Group, Inc........................... 47,600 1,984,325
Southern Energy, Inc.+.................................... 73,435 2,001,104
TNPC, Inc.+............................................... 14,200 236,075
-------------
6,337,029
-------------
ELECTRONICS--8.0%
Amphenol Corp.+........................................... 22,300 1,432,775
Bookham Technology PLC ADR+............................... 47,800 1,610,263
Broadcom Corp., Class A+.................................. 9,300 2,068,087
Caliper Technologies Corp................................. 29,900 1,685,613
Celestica, Inc.+.......................................... 20,400 1,466,250
Coherent, Inc.+........................................... 32,000 1,114,000
Flextronics International Ltd.+........................... 82,835 3,147,730
Intersil Holding Corp.+................................... 42,200 2,022,962
Linear Technology Corp.................................... 16,900 1,091,106
Lumenon Innovative Lightwave Technology, Inc.............. 30,000 365,625
Maxim Integrated Products, Inc.+.......................... 57,400 3,806,337
Molex, Inc................................................ 23,100 1,247,400
Palm, Inc.+............................................... 116,415 6,235,478
PMC-Sierra, Inc.+......................................... 8,600 1,457,700
QLogic Corp.+............................................. 19,400 1,876,950
Sawtek, Inc.+............................................. 20,000 1,017,500
Texas Instruments, Inc.................................... 59,770 2,932,466
TranSwitch Corp.+......................................... 36,000 2,079,000
-------------
36,657,242
-------------
ENERGY SERVICES--3.2%
BJ Services Co.+.......................................... 29,900 1,567,881
Diamond Offshore Drilling, Inc............................ 27,900 964,294
Grant Prideco, Inc.+...................................... 45,400 842,737
Nabors Industries, Inc.+.................................. 93,300 4,748,970
Precision Drilling Corp.+................................. 41,600 1,190,800
R & B Falcon Corp.+....................................... 60,400 1,510,000
Smith International, Inc.+................................ 20,600 1,452,300
Transocean Sedco Forex, Inc............................... 16,200 858,600
Weatherford International, Inc.+.......................... 37,200 1,357,800
-------------
14,493,382
-------------
ENERGY SOURCES--3.2%
Anadarko Petroleum Corp................................... 48,435 3,102,262
Apache Corp............................................... 69,100 3,822,094
Devon Energy Corp......................................... 30,200 1,522,080
Global Industries Ltd.+................................... 6,500 68,250
Global Marine, Inc.+...................................... 57,300 1,518,450
Noble Affiliates, Inc.+................................... 40,200 1,474,837
Noble Drilling Corp.+..................................... 32,000 1,330,000
Pogo Producing Co......................................... 66,000 1,650,000
-------------
14,487,973
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
FINANCIAL SERVICES--7.9%
Blackrock, Inc............................................ 2,800 $ 119,350
Citigroup, Inc............................................ 130,746 6,880,508
Federated Investors, Inc., Class B........................ 75,500 2,198,938
Franklin Resources, Inc................................... 36,100 1,546,524
IndyMac Bancorp., Inc..................................... 110,100 2,298,338
Merrill Lynch & Co., Inc.................................. 141,060 9,874,200
Morgan Stanley Dean Witter & Co........................... 95,175 7,643,742
Nasdaq 100 Trust.......................................... 66,600 5,441,428
-------------
36,003,028
-------------
GAS & PIPELINE UTILITIES--1.8%
Dynegy, Inc., Class A..................................... 104,300 4,830,394
El Paso Energy Corp....................................... 33,100 2,074,956
Newfield Exploration Co.+................................. 34,000 1,283,500
-------------
8,188,850
-------------
HEALTH SERVICES--2.6%
Community Health Systems, Inc.+........................... 49,300 1,389,644
Foundation Health Systems, Inc.+.......................... 110,700 2,234,756
Health Management Associates, Inc., Class A+.............. 93,300 1,848,506
Mid Atlantic Medical Services, Inc.+...................... 109,300 1,858,100
Tenet Healthcare Corp..................................... 62,000 2,437,375
Wellpoint Health Networks, Inc.+.......................... 19,600 2,291,975
-------------
12,060,356
-------------
HOUSING--0.9%
Polycom, Inc.+............................................ 48,200 3,133,000
Yankee Candle Co.+........................................ 63,700 935,594
-------------
4,068,594
-------------
INSURANCE--1.1%
Radian Group, Inc......................................... 21,800 1,545,075
Reinsurance Group of America, Inc......................... 56,551 2,113,594
Xl Capital Ltd., Class A.................................. 20,000 1,537,500
-------------
5,196,169
-------------
INTERNET CONTENT--4.7%
Check Point Software Technologies, Ltd.+.................. 15,600 2,470,650
Clarent Corp.+............................................ 44,900 1,394,706
Commerce One, Inc.+....................................... 29,000 1,861,437
Critical Path, Inc.+...................................... 6,700 325,369
Juniper Networks, Inc.+................................... 13,200 2,574,000
Macromedia, Inc.+......................................... 4,200 323,663
VeriSign, Inc.+........................................... 80,780 10,662,960
WatchGuard Technologies, Inc.+............................ 26,700 1,335,000
Yahoo!, Inc.+............................................. 4,200 246,225
-------------
21,194,010
-------------
</TABLE>
47
<PAGE>
STYLE SELECT SERIES LOGO
Aggressive Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
INTERNET SOFTWARE--3.1%
Agile Software Corp.+..................................... 11,200 $ 844,200
Ariba, Inc.+.............................................. 18,000 2,274,750
Art Technology Group, Inc.+............................... 18,500 1,160,875
BEA Systems, Inc.+........................................ 46,400 3,329,200
BroadVision, Inc.+........................................ 5,500 163,625
CacheFlow, Inc............................................ 8,400 907,200
Entrade, Inc.+(1)......................................... 14,000 37,013
Inktomi Corp.+............................................ 46,800 2,968,875
Liberate Technologies, Inc.+.............................. 32,900 627,156
Phone.com, Inc.+.......................................... 11,950 1,106,122
RealNetworks, Inc.+....................................... 14,500 298,836
Vignette Corp.+........................................... 6,400 190,800
-------------
13,908,652
-------------
LEISURE & TOURISM--0.5%
Extended Stay America, Inc.+.............................. 189,100 2,328,294
-------------
MACHINERY--0.2%
Oshkosh Truck Corp., Class B.............................. 24,600 1,011,675
-------------
MEDICAL PRODUCTS--2.7%
Aclara Biosciences, Inc.+................................. 58,700 1,049,263
Alkermes, Inc.+........................................... 40,600 1,504,738
Celgene Corp.+............................................ 25,900 1,667,312
Deltagen, Inc............................................. 10,000 158,750
Inhale Therapeutic Systems, Inc.+......................... 31,500 1,567,125
Lexicon Genetics, Inc.+................................... 26,400 534,600
Myriad Genetics, Inc.+.................................... 15,700 1,884,000
QLT PhotoTherapeutics, Inc.+.............................. 30,500 1,516,899
St. Jude Medical, Inc.+................................... 35,100 1,930,500
Visible Genetics, Inc.+................................... 9,900 299,475
-------------
12,112,662
-------------
METALS & MINERALS--0.1%
Maverick Tube Corp.+...................................... 45,500 708,094
-------------
MULTI-INDUSTRY--1.0%
General Electric Co....................................... 79,845 4,376,504
-------------
REAL ESTATE COMPANIES--0.3%
Lennar Corp............................................... 48,900 1,570,913
-------------
REAL ESTATE INVESTMENT TRUSTS--0.1%
Prologis Trust............................................ 18,200 382,200
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES/
CONTRACTS/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
RETAIL--0.9%
AnnTaylor Stores Corp..................................... 26,500 $ 795,000
Home Depot, Inc........................................... 40,340 1,734,620
Skymall, Inc.+............................................ 100,000 206,250
Stamps.com, Inc.+......................................... 30,000 118,125
Wal-Mart Stores, Inc...................................... 25,900 1,175,212
-------------
4,029,207
-------------
TELECOMMUNICATIONS--5.6%
Aether Systems, Inc.+..................................... 13,800 1,112,625
Amdocs Ltd.+.............................................. 29,200 1,892,525
AudioCodes Ltd.+.......................................... 67,000 2,650,688
Avanex Corp.+............................................. 30,400 3,087,500
General Motors Corp., Class H+............................ 79,300 2,569,320
Level 3 Communications, Inc.+............................. 50,990 2,431,586
MRV Communications, Inc.+................................. 32,500 1,283,750
Nokia Corp. ADR........................................... 191,800 8,199,450
Sonus Networks, Inc....................................... 43,700 1,507,650
Speechworks International Inc.+........................... 9,500 790,875
-------------
25,525,969
-------------
TELEPHONE--0.8%
Telefonos de Mexico SA ADR................................ 65,775 3,547,739
-------------
TRANSPORTATION--0.6%
Offshore Logistics, Inc.+................................. 60,600 1,045,350
Railworks Corp.+.......................................... 100,900 258,556
Skywest, Inc.+............................................ 29,900 1,509,950
-------------
2,813,856
-------------
INVESTMENT COMPANIES--1.1%
Semiconductor Holders Trust+.............................. 77,300 5,086,340
-------------
TOTAL COMMON STOCK
(cost $325,256,431)....................................... 402,556,875
-------------
PUT OPTIONS--0.1%+(2)
Broadcom Corp. exp 12/00
@ $200.................................................. 4,200 57,750
Juniper Networks, Inc.+ exp 11/00 @ $200.................. 800 15,800
VeriSign, Inc. exp 12/00 @ $160........................... 4,400 163,350
-------------
TOTAL OPTIONS
(cost $221,240)........................................... 236,900
-------------
TOTAL INVESTMENT SECURITIES--88.5%
(cost $325,477,671)....................................... 402,793,775
-------------
SHORT-TERM SECURITIES--6.7%
Federal Home Loan Bank Discount Notes
6.31% due 12/14/00...................................... $ 10,000 9,924,273
</TABLE>
48
<PAGE>
STYLE SELECT SERIES LOGO
Aggressive Growth Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM SECURITIES (CONTINUED)
Federal Home Loan Bank Discount Notes
6.31% due 12/14/00...................................... $ 5,000 $ 4,962,315
Federal Home Loan Bank Discount Notes
6.35% due 12/07/00...................................... 4,000 3,974,600
Federal Home Loan Mortgage Discount Notes
6.45% due 11/01/00...................................... 4,600 4,600,000
UBS Finance, Inc.
6.65% due 11/01/00...................................... 7,000 7,000,000
-------------
TOTAL SHORT-TERM SECURITIES
(cost $30,461,188)........................................ 30,461,188
-------------
REPURCHASE AGREEMENTS--7.6%
State Street Bank & Trust Co.
Joint Repurchase Agreement
(Note 2)................................................ 13,128 13,128,000
Paine Webber, Inc.
Joint Repurchase Agreement
(Note 2)................................................ 13,000 13,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Agreement with State Street Bank and Trust Co., bearing
5.50%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $8,374,279 collateralized by $8,580,000 U.S.
Treasury Bond 5.75% due 4/30/03 approximate aggregate
value $8,542,463........................................ $ 8,373 $ 8,373,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $34,501,000)........................................ 34,501,000
-------------
TOTAL INVESTMENTS--
(cost $390,439,859)....................................... 102.8% 467,755,963
Liabilities in excess of other assets....................... (2.8) (12,626,423)
------------- -------------
NET ASSETS-- 100.0% $ 455,129,540
============= =============
</TABLE>
------------------
+ Non-income producing security
ADR ("American Depositary Receipt")
(1) At October 31, 2000 the Portfolio held restricted securities amounting to
0.01% of net assets. The Portfolio will not bear any costs, including those
involved in registration under the Securities Act of 1933, in connection with
the disposition of the securities.
<TABLE>
<CAPTION>
DATE OF UNIT VALUATION AS OF
DESCRIPTION ACQUISITION COST OCTOBER 31, 2000
--------------------- ----------- -------- -----------------
<S> <C> <C> <C>
Entrade, Inc. 12/21/99 $32.00 $0.84375
</TABLE>
(2) 1 option contract equals 100 shares
See Notes to Financial Statements
49
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--95.7%
AUTOMOTIVE--0.2%
Ford Motor Co............................................. 5,667 $ 148,050
Visteon Corp.............................................. 536 9,481
-------------
157,531
-------------
BANKS--4.3%
Bank of America Corp...................................... 4,700 225,894
Bank of New York Co., Inc................................. 14,320 824,295
Bank One Corp............................................. 1,600 58,400
Chase Manhattan Corp...................................... 9,800 445,900
Golden West Financial Corp................................ 10,700 599,869
National City Corp........................................ 29,300 626,287
State Street Corp......................................... 1,200 149,688
U.S. Bancorp.............................................. 4,000 96,750
Wachovia Corp............................................. 3,000 162,000
-------------
3,189,083
-------------
BROADCASTING & MEDIA--1.1%
Comcast Corp.+............................................ 5,700 228,712
Dow Jones & Co., Inc...................................... 900 52,988
Eastman Kodak Co.......................................... 1,400 62,825
Gannett Co., Inc.......................................... 5,800 336,400
Tribune Co................................................ 2,400 88,950
WPP Group PLC ADR......................................... 200 13,375
-------------
783,250
-------------
BUSINESS SERVICES--1.4%
Electronic Data Systems Corp.............................. 8,300 389,581
Unisys Corp.+............................................. 18,100 230,775
United Parcel Service, Inc................................ 2,100 127,575
Waste Management, Inc..................................... 14,100 282,000
-------------
1,029,931
-------------
CHEMICALS--1.0%
Air Products & Chemicals, Inc............................. 6,200 231,337
Ashland, Inc.............................................. 8,300 271,825
Engelhard Corp............................................ 11,200 233,800
-------------
736,962
-------------
COMMUNICATION EQUIPMENT--2.3%
QUALCOMM, Inc.+........................................... 13,800 898,509
Tellabs, Inc.+............................................ 15,200 759,050
Tycom Ltd.+............................................... 1,000 33,500
-------------
1,691,059
-------------
COMPUTERS & BUSINESS EQUIPMENT--4.2%
Dell Computer Corp.+...................................... 14,800 436,600
Hewlett-Packard Co........................................ 31,400 1,458,137
International Business Machines Corp...................... 6,300 620,550
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMPUTERS & BUSINESS EQUIPMENT (CONTINUED)
Lexmark International Group, Inc., Class A+............... 13,800 $ 565,800
-------------
3,081,087
-------------
COMPUTER SOFTWARE--3.0%
Adobe Systems, Inc........................................ 14,820 1,127,246
BMC Software, Inc.+....................................... 19,400 394,063
First Data Corp........................................... 13,100 656,637
Novell, Inc.+............................................. 6,900 62,100
-------------
2,240,046
-------------
DRUGS--5.3%
American Home Products Corp............................... 27,790 1,764,665
Bristol-Myers Squibb Co................................... 10,100 615,469
Eli Lilly & Co............................................ 1,900 169,812
Merck & Co., Inc.......................................... 4,400 395,725
Pharmacia Corp............................................ 13,730 755,150
SmithKline Beecham PLC ADR................................ 4,100 267,269
-------------
3,968,090
-------------
ELECTRIC UTILITIES--1.6%
American Electric Power Co., Inc.......................... 3,500 145,250
Exelon Corp............................................... 2,500 150,313
FPL Group, Inc............................................ 1,900 125,400
Pinnacle West Capital Corp................................ 7,300 317,094
SCANA Corp................................................ 6,000 159,000
Southern Co............................................... 10,200 299,625
-------------
1,196,682
-------------
ELECTRONICS--6.1%
Agilent Technologies, Inc.+............................... 4,137 191,595
Applied Materials, Inc.+.................................. 1,500 79,688
Emerson Electric Co....................................... 13,000 954,687
Intel Corp................................................ 23,790 1,070,550
Koninklijke (Royal) Philips Electronics NV ADR............ 13,560 541,553
Molex, Inc................................................ 4,156 224,424
Motorola, Inc............................................. 26,000 648,375
Teradyne, Inc.+........................................... 10,500 328,125
Texas Instruments, Inc.................................... 10,500 515,156
-------------
4,554,153
-------------
ENERGY SERVICES--0.2%
Schlumberger Ltd.......................................... 1,900 144,638
-------------
ENERGY SOURCES--6.3%
BP Amoco PLC ADR.......................................... 15,260 777,306
Burlington Resources, Inc................................. 13,500 486,000
Devon Energy Corp......................................... 3,127 157,601
Exxon Mobil Corp.......................................... 9,700 865,119
Shell Transport & Trading Co. PLC NY Registry Shares
ADR..................................................... 8,500 418,094
Unocal Corp............................................... 43,540 1,485,802
</TABLE>
50
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
ENERGY SOURCES (CONTINUED)
USX-Marathon Group........................................ 18,100 $ 492,094
-------------
4,682,016
-------------
FINANCIAL SERVICES--18.2%
American Express Co....................................... 25,500 1,530,000
Associates First Capital Corp., Class A................... 21,100 783,337
Charles Schwab Corp....................................... 33,750 1,185,469
Citigroup, Inc............................................ 38,682 2,035,640
Donaldson, Lufkin & Jenrette, Inc......................... 4,400 395,175
Dun & Bradstreet Corp.+................................... 4,000 86,500
Federal Home Loan Mortgage Corp........................... 3,700 222,000
Goldman Sachs Group, Inc.................................. 6,790 677,727
Household International, Inc.............................. 21,600 1,086,750
Merrill Lynch & Co., Inc.................................. 10,520 736,400
Moody's Corp.............................................. 4,200 110,513
Morgan (J.P.) & Co., Inc.................................. 2,000 331,000
Morgan Stanley Dean Witter & Co........................... 8,400 674,625
Providian Financial Corp.................................. 4,200 436,800
Stilwell Financial, Inc................................... 19,060 854,126
Washington Mutual, Inc.................................... 13,800 607,200
Wells Fargo Co............................................ 38,220 1,770,064
-------------
13,523,326
-------------
FOOD, BEVERAGE & TOBACCO--3.2%
Corn Products International, Inc.......................... 4,800 120,600
PepsiCo, Inc.............................................. 17,064 826,538
Philip Morris Cos., Inc................................... 25,500 933,937
Sara Lee Corp............................................. 13,700 295,406
Universal Corp............................................ 6,300 176,400
-------------
2,352,881
-------------
FOREST PRODUCTS--1.2%
Georgia-Pacific Corp. (Timber Group)...................... 2,000 56,625
Minnesota Mining & Manufacturing Co....................... 2,300 222,238
Sealed Air Corp.+......................................... 12,100 582,312
Weyerhaeuser Co........................................... 1,300 61,019
-------------
922,194
-------------
GAS & PIPELINE UTILITIES--0.5%
Equitable Resources, Inc.................................. 4,000 232,000
National Fuel Gas Co...................................... 2,600 139,425
-------------
371,425
-------------
HEALTH SERVICES--3.6%
Tenet Healthcare Corp..................................... 23,100 908,119
Wellpoint Health Networks, Inc.+.......................... 15,233 1,781,309
-------------
2,689,428
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--3.1%
Gillette Co............................................... 2,300 $ 80,212
Kimberly-Clark Corp....................................... 33,600 2,217,600
-------------
2,297,812
-------------
INSURANCE--5.9%
ACE Ltd................................................... 12,000 471,000
American General Corp..................................... 5,100 410,550
American International Group, Inc.#....................... 1,405 137,690
Chubb Corp................................................ 6,000 506,625
CIGNA Corp................................................ 3,100 378,045
Loews Corp................................................ 1,300 118,219
Marsh & McLennan Cos., Inc................................ 3,900 509,925
MBIA, Inc................................................. 9,500 690,531
Progressive Corp.......................................... 4,500 442,125
Sun Life Financial Services of Canada, Inc.+.............. 1,900 38,950
TransAtlantic Holdings, Inc.#............................. 5,400 501,525
UnumProvident Corp........................................ 5,546 156,674
-------------
4,361,859
-------------
INTERNET CONTENT--0.6%
E*TRADE Group, Inc.+...................................... 30,600 445,613
-------------
INTERNET SOFTWARE--1.2%
America Online, Inc.+..................................... 17,100 862,353
-------------
LEISURE & TOURISM--1.1%
Marriott International, Inc., Class A..................... 5,300 214,650
McDonald's Corp........................................... 20,600 638,600
-------------
853,250
-------------
MACHINERY--0.3%
Dover Corp................................................ 5,300 224,919
-------------
MEDICAL PRODUCTS--0.9%
Baxter International, Inc................................. 5,000 410,938
Beckman Coulter, Inc...................................... 3,600 252,225
-------------
663,163
-------------
METALS & MINERALS--3.6%
Alcoa, Inc................................................ 58,400 1,675,350
Martin Marietta Materials, Inc............................ 5,100 195,840
Masco Corp................................................ 27,500 513,906
Vulcan Materials Co....................................... 6,100 256,200
-------------
2,641,296
-------------
MULTI-INDUSTRY--3.3%
Berkshire Hathaway, Inc., Class A+........................ 14 891,800
Cooper Industries, Inc.................................... 4,400 168,300
Tyco International Ltd.................................... 24,200 1,371,837
-------------
2,431,937
-------------
REAL ESTATE INVESTMENT TRUSTS--0.2%
CenterPoint Properties Corp............................... 100 4,444
Equity Residential Properties Trust....................... 800 37,650
</TABLE>
51
<PAGE>
STYLE SELECT SERIES LOGO
Large-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
General Growth Properties, Inc............................ 3,300 $ 97,350
-------------
139,444
-------------
RETAIL--4.5%
Costco Wholesale Corp.+................................... 19,300 706,862
CVS Corp.................................................. 13,420 710,421
Family Dollar Stores, Inc................................. 13,000 252,688
May Department Stores Co.................................. 9,150 240,188
Staples, Inc.+............................................ 72,400 1,031,700
Target Corp............................................... 14,600 403,325
-------------
3,345,184
-------------
TELECOMMUNICATIONS--1.5%
AT&T Wireless Group+...................................... 2,700 67,331
Avaya, Inc.+.............................................. 925 12,430
Loral Space & Communications Ltd.+........................ 6,900 39,244
Lucent Technologies, Inc.................................. 12,800 298,400
Nokia Corp. ADR........................................... 16,570 708,367
-------------
1,125,772
-------------
TELEPHONE--5.3%
AT&T Corp................................................. 50,623 1,173,821
BellSouth Corp............................................ 9,600 463,800
Sprint Corp............................................... 3,400 86,700
Verizon Communications, Inc............................... 31,338 1,811,728
WorldCom, Inc.+........................................... 19,400 460,750
-------------
3,996,799
-------------
TRANSPORTATION--0.5%
Canadian National Railway Co.............................. 5,400 170,100
Norfolk Southern Corp..................................... 14,600 206,225
-------------
376,325
-------------
TOTAL COMMON STOCK
(cost $63,212,585)........................................ 71,079,508
-------------
<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%........ 2,500 $ 51,875
-------------
TOTAL INVESTMENT SECURITIES--95.8%
(cost $63,275,345)........................................ 71,131,383
-------------
SHORT-TERM SECURITIES--1.8%
Cayman Island Time Deposit with State Street Bank & Trust
Co. 4.50% due 11/01/00
(cost: $1,315,000)...................................... $ 1,315 1,315,000
-------------
REPURCHASE AGREEMENTS--3.4%
SBC Warburg Dillon Read LLC
Joint Repurchase Agreement
(Note 2)................................................ 950 950,000
Agreement with State Street Bank & Trust Co., bearing
6.62%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $1,578,290, collateralized by $1,650,000
Federal Home Loan Bank Discount Notes zero coupon due
01/03/01 approximate aggregate value $1,627,313......... 1,578 1,578,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $2,528,000)......................................... 2,528,000
-------------
TOTAL INVESTMENTS--
(cost $67,118,345)........................................ 101.0% 74,974,383
Liabilities in excess of other assets....................... (1.0) (719,652)
------------- -------------
NET ASSETS-- 100.0% $ 74,254,731
============= =============
</TABLE>
------------------
+ Non-income producing security
# Security represents an investment in an affiliated company
ADR ("American Depositary Receipt")
See Notes to Financial Statements
52
<PAGE>
STYLE SELECT SERIES LOGO
Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--89.0%
AEROSPACE & MILITARY TECHNOLOGY--0.6%
General Dynamics Corp..................................... 13,200 $ 944,625
-------------
APPAREL & TEXTILES--0.5%
Kellwood Co............................................... 35,000 680,313
-------------
AUTOMOTIVE--0.4%
Lear Corp.+............................................... 22,900 624,025
-------------
BANKS--5.0%
Bank of New York Co., Inc................................. 16,500 949,781
Bank One Corp............................................. 2,600 94,900
Chase Manhattan Corp...................................... 26,850 1,221,675
Commerce Bancshares, Inc.................................. 21,350 767,266
First Virginia Banks, Inc................................. 53,100 2,197,012
Golden West Financial Corp................................ 20,000 1,070,794
State Street Corp......................................... 2,300 286,902
U.S. Bancorp.............................................. 8,700 210,431
Washington Federal, Inc................................... 23,800 531,038
-------------
7,329,799
-------------
BROADCASTING & MEDIA--2.0%
American Tower Corp., Class A+............................ 3,200 131,000
AT&T Corp.-Liberty Media Group, Inc., Class A+............ 32,800 590,400
Dow Jones & Co., Inc...................................... 2,400 141,300
Gannett Co., Inc.......................................... 11,300 655,400
News Corp. Ltd. ADR....................................... 24,000 868,500
Tribune Co................................................ 5,200 192,725
Viacom, Inc., Class B+.................................... 4,100 233,188
WPP Group PLC ADR......................................... 600 33,504
-------------
2,846,017
-------------
BUSINESS SERVICES--0.9%
Ceridian Corp.+........................................... 18,600 465,000
Electronic Data Systems Corp.............................. 5,200 244,075
Fluor Corp................................................ 9,500 332,500
United Parcel Service, Inc................................ 4,800 291,600
-------------
1,333,175
-------------
CHEMICALS--1.7%
Air Products & Chemicals, Inc............................. 10,500 391,781
du Pont (E.I.) de Nemours & Co............................ 2,000 90,750
Monsanto Co.+............................................. 12,100 308,550
Praxair, Inc.............................................. 30,200 1,124,950
Rohm & Haas Co............................................ 19,400 583,213
-------------
2,499,244
-------------
COMMUNICATION EQUIPMENT--1.0%
Tellabs, Inc.+............................................ 28,400 1,418,225
Tycom Ltd.+............................................... 1,900 63,650
-------------
1,481,875
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMPUTERS & BUSINESS EQUIPMENT--4.6%
Gateway, Inc.+............................................ 10,400 $ 536,744
Hewlett-Packard Co........................................ 36,400 1,690,325
International Business Machines Corp...................... 21,800 2,147,300
Lexmark International Group, Inc., Class A+............... 47,100 1,931,100
Pitney Bowes, Inc......................................... 16,100 477,969
-------------
6,783,438
-------------
COMPUTER SOFTWARE--3.1%
Autodesk, Inc............................................. 20,500 452,281
BMC Software, Inc.+....................................... 28,500 578,906
Cadence Design Systems, Inc.+............................. 32,100 824,569
Computer Associates International, Inc.................... 18,000 573,750
Computer Sciences Corp.+.................................. 12,300 774,900
First Data Corp........................................... 14,700 736,837
Novell, Inc.+............................................. 16,200 145,800
Parametric Technology Corp.+.............................. 33,400 411,238
-------------
4,498,281
-------------
DRUGS--5.7%
American Home Products Corp............................... 40,500 2,571,750
Bristol-Myers Squibb Co................................... 31,500 1,919,531
Eli Lilly & Co............................................ 3,600 321,750
Merck & Co., Inc.......................................... 22,800 2,050,575
Pharmacia Corp............................................ 6,000 330,000
Schering-Plough Corp...................................... 11,500 594,406
SmithKline Beecham PLC ADR................................ 7,700 501,944
-------------
8,289,956
-------------
ELECTRIC UTILITIES--2.7%
Edison International...................................... 16,100 487,050
Exelon Corp............................................... 7,100 426,888
Florida Progress Corp..................................... 32,100 1,707,319
Wisconsin Energy Corp..................................... 73,100 1,375,194
-------------
3,996,451
-------------
ELECTRICAL EQUIPMENT--0.6%
Parker Hannifin Corp...................................... 4,400 182,050
SCI Systems, Inc.+........................................ 15,900 683,700
-------------
865,750
-------------
ELECTRONICS--4.0%
Agilent Technologies, Inc.+............................... 8,768 406,068
Applied Materials, Inc.+.................................. 2,800 148,750
Emerson Electric Co....................................... 10,000 734,375
Intel Corp................................................ 10,600 477,000
Koninklijke (Royal) Philips Electronics NV ADR............ 5,373 214,584
Molex, Inc................................................ 6,865 370,710
Motorola, Inc............................................. 82,300 2,052,356
</TABLE>
53
<PAGE>
STYLE SELECT SERIES LOGO
Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
ELECTRONICS (CONTINUED)
Samsung Electronics Co. Ltd. GDR+......................... 1,600 $ 117,600
Texas Instruments, Inc.................................... 22,200 1,089,188
Thermo Electron Corp...................................... 6,300 182,700
-------------
5,793,331
-------------
ENERGY SERVICES--0.8%
Halliburton Co............................................ 16,700 618,944
Schlumberger Ltd.......................................... 3,100 235,987
Transocean Sedco Forex, Inc............................... 6,800 360,400
-------------
1,215,331
-------------
ENERGY SOURCES--5.0%
BP Amoco PLC ADR.......................................... 8,200 417,688
Chevron Corp.@............................................ 21,100 1,732,837
Devon Energy Corp......................................... 5,739 289,246
Exxon Mobil Corp.......................................... 11,800 1,052,412
Nicor, Inc................................................ 21,200 748,625
Royal Dutch Petroleum Co. NY Registry Shares GDR.......... 31,400 1,864,375
WD-40 Co.................................................. 11,100 242,813
Williams Cos., Inc........................................ 24,200 1,011,862
-------------
7,359,858
-------------
ENTERTAINMENT PRODUCTS--1.0%
National Presto Industries, Inc........................... 49,100 1,491,413
-------------
FINANCIAL SERVICES--13.3%
American Express Co....................................... 46,800 2,808,000
Citigroup, Inc............................................ 64,678 3,403,680
CNA Surety Corp........................................... 35,900 417,337
Donaldson, Lufkin & Jenrette, Inc......................... 8,000 718,500
Dun & Bradstreet Corp.+................................... 9,150 197,869
Federal Home Loan Mortgage Corp........................... 13,400 804,000
Household International, Inc.............................. 40,200 2,022,562
Moody's Corp.............................................. 9,100 239,444
Morgan Stanley, Dean Witter & Co.......................... 20,720 1,664,075
Providian Financial Corp.................................. 16,300 1,695,200
Stilwell Financial, Inc................................... 10,300 461,569
Student Loan Corp......................................... 36,600 1,958,100
USA Education, Inc........................................ 7,300 407,888
Wells Fargo Co............................................ 58,600 2,713,912
-------------
19,512,136
-------------
FOOD, BEVERAGE & TOBACCO--3.1%
Anheuser-Busch Cos., Inc.................................. 19,400 887,550
General Mills, Inc........................................ 10,700 446,725
H.J. Heinz & Co........................................... 6,300 264,206
Lance, Inc................................................ 77,100 775,819
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO (CONTINUED)
Philip Morris Cos., Inc................................... 32,500 $ 1,190,312
UST, Inc.................................................. 35,300 891,325
-------------
4,455,937
-------------
FOREST PRODUCTS--2.2%
Bemis Co., Inc............................................ 24,200 626,175
Minnesota Mining & Manufacturing Co.@..................... 16,000 1,546,000
Sealed Air Corp.+......................................... 22,000 1,058,750
-------------
3,230,925
-------------
GAS & PIPELINE UTILITIES--3.2%
AGL Resources, Inc........................................ 45,500 927,062
Northwest Natural Gas Co.................................. 52,800 1,237,500
Piedmont Natural Gas, Inc................................. 21,200 646,600
WGL Holding Co............................................ 72,100 1,838,550
-------------
4,649,712
-------------
HOUSEHOLD PRODUCTS--1.7%
Gillette Co............................................... 12,000 418,500
International Flavors & Fragrances, Inc................... 18,300 306,525
Kimberly-Clark Corp....................................... 13,100 864,600
Procter & Gamble Co....................................... 11,400 814,388
-------------
2,404,013
-------------
HOUSING--0.3%
York International Corp................................... 15,600 424,125
-------------
INSURANCE--4.8%
American International Group, Inc.#....................... 6,234 610,932
Aon Corp.................................................. 20,500 849,469
Chubb Corp................................................ 4,900 413,744
CIGNA Corp................................................ 11,100 1,353,645
Horace Mann Educators Corp................................ 21,400 359,787
Loews Corp................................................ 2,500 227,344
Progressive Corp.......................................... 9,500 933,375
Sun Life Financial Services of Canada, Inc.+.............. 4,800 98,400
TransAtlantic Holdings, Inc.#............................. 9,500 882,312
UnumProvident Corp........................................ 10,319 291,512
XL Capital Ltd., Class A.................................. 13,345 1,025,897
-------------
7,046,417
-------------
LEISURE & TOURISM--2.6%
Carnival Corp., Class A................................... 31,300 776,631
Marriott International, Inc., Class A..................... 9,600 388,800
McDonald's Corp........................................... 63,400 1,965,400
The Walt Disney Co........................................ 20,200 723,413
-------------
3,854,244
-------------
</TABLE>
54
<PAGE>
STYLE SELECT SERIES LOGO
Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
MACHINERY--0.8%
Deere & Co.@.............................................. 19,100 $ 703,119
Dover Corp................................................ 10,000 424,375
-------------
1,127,494
-------------
MEDICAL PRODUCTS--1.0%
Bard (C.R.), Inc.......................................... 5,900 247,063
Becton, Dickinson & Co.................................... 18,700 626,450
Johnson & Johnson Co...................................... 5,900 543,537
-------------
1,417,050
-------------
METALS & MINERALS--2.1%
Alcoa, Inc................................................ 27,300 783,169
Martin Marietta Materials, Inc............................ 10,900 418,560
Masco Corp................................................ 75,100 1,403,431
Vulcan Materials Co....................................... 11,600 487,200
-------------
3,092,360
-------------
MULTI-INDUSTRY--5.4%
Berkshire Hathaway, Inc., Class A+........................ 26 1,656,200
Berkshire Hathaway, Inc., Class B+........................ 700 1,472,100
Cooper Industries, Inc.................................... 27,100 1,036,575
Pall Corp................................................. 34,200 737,437
Russ Berrie & Co., Inc.................................... 21,000 476,438
Tyco International Ltd.................................... 45,000 2,550,937
-------------
7,929,687
-------------
REAL ESTATE INVESTMENT TRUSTS--0.6%
CenterPoint Properties Corp............................... 1,300 57,769
Equity Office Properties Trust............................ 11,200 337,400
Equity Residential Properties Trust....................... 1,900 89,419
General Growth Properties, Inc............................ 5,800 171,100
Manufactured Home Communities, Inc........................ 9,300 231,337
-------------
887,025
-------------
RETAIL--2.6%
Costco Wholesale Corp.+................................... 51,100 1,871,537
Family Dollar Stores, Inc................................. 6,900 134,119
The Kroger Co.+........................................... 75,600 1,705,725
Weis Markets, Inc......................................... 4,100 150,675
-------------
3,862,056
-------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--1.9%
AT&T Wireless Group+...................................... 6,100 $ 152,119
Avaya, Inc.+.............................................. 1,933 25,975
General Motors Corp., Class H+............................ 26,500 858,600
Level 3 Communications, Inc.+............................. 3,900 185,981
Loral Space & Communications Ltd.+........................ 13,900 79,056
Lucent Technologies, Inc.................................. 23,200 540,850
Nextel Communications, Inc., Class A+..................... 14,800 568,875
NTL, Inc.+................................................ 3,600 158,175
WinStar Communications, Inc.+............................. 14,200 276,900
-------------
2,846,531
-------------
TELEPHONE--3.3%
AT&T Corp................................................. 22,700 526,356
Sprint Corp............................................... 36,300 925,650
Verizon Communications.................................... 49,670 2,871,547
WorldCom, Inc.+........................................... 21,100 501,124
-------------
4,824,677
-------------
TRANSPORTATION--0.5%
XTRA Corp................................................. 15,400 700,700
-------------
TOTAL COMMON STOCK
(cost $118,707,326)....................................... 130,297,971
-------------
PREFERRED STOCK--3.9%
FINANCIAL SERVICES--3.4%
Newell Financial Trust I convertible 5.25%................ 37,200 1,190,400
Union Pacific Capital Trust convertible 6.25%............. 57,000 2,565,000
Wendys Financing I Series A convertible 5.00%............. 25,200 1,234,800
-------------
4,990,200
-------------
FOREST PRODUCTS--0.4%
International Paper Capital Trust convertible 5.25%....... 12,300 533,512
-------------
REAL ESTATE INVESTMENT TRUSTS--0.1%
General Growth Properties, Inc., convertible 7.25%........ 5,300 109,975
-------------
TOTAL PREFERRED STOCK
(cost $5,599,223)......................................... 5,633,687
-------------
</TABLE>
55
<PAGE>
STYLE SELECT SERIES LOGO
Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS & NOTES--1.4%
ELECTRONICS--0.2%
Motorola, Inc. convertible zero coupon due 09/27/13....... $ 275 $ 240,287
-------------
ENERGY SERVICES--0.2%
Baker Hughes, Inc. convertible zero coupon due 5/05/08.... 390 307,944
-------------
FOOD, BEVERAGE & TOBACCO--0.1%
Costco Wholesale Corp. convertible zero coupon due
08/19/17................................................ 195 169,439
-------------
HEALTH SERVICES--0.9%
Medical Care International, Inc. convertible 6.75% due
10/01/06................................................ 1,475 1,358,844
-------------
TOTAL BONDS & NOTES
(cost $2,058,812)......................................... 2,076,514
-------------
TOTAL INVESTMENT SECURITIES--94.3%
(cost $126,365,361)....................................... 138,008,172
-------------
SHORT-TERM SECURITIES--1.0%
Cayman Island Time Deposit with State Street Bank & Trust
Co. 4.50% due 11/01/00 (cost: $1,476,000)............... 1,476 1,476,000
-------------
REPURCHASE AGREEMENTS--5.2%
Agreement with State Street Bank & Trust Co., bearing
6.62%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $1,103,203 collateralized by $1,120,000
Federal Home Loan Bank 6.50% due 11/18/03 approximate
aggregate value $1,141,000.............................. 1,103 1,103,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
Agreement with State Street Bank & Trust Co., bearing
5.25%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $6,435,938 collateralized by $6,595,000 U.S.
Treasury Bond 5.75% due 4/30/03 approximate aggregate
value $6,566,147........................................ 6,435 $ 6,435,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $7,538,000)......................................... 7,538,000
-------------
TOTAL INVESTMENTS--
(cost $135,379,361)....................................... 100.5% $ 147,022,172
Liabilities in excess of other assets....................... (0.5) (693,703)
------------- -------------
NET ASSETS-- 100.0% $ 146,328,469
============= =============
</TABLE>
------------------
@ The security or a portion thereof represents collateral for the
following open futures contracts
+ Non-income producing security
# Security represents an investment in an affiliated company
ADR ("American Depositary Receipt")
GDR ("Global Depositary Receipt")
See Notes to Financial Statements
<TABLE>
<CAPTION>
OPEN FUTURES CONTRACTS
NUMBER OF VALUE AT VALUE AS OF UNREALIZED
CONTRACTS DESCRIPTION EXPIRATION DATE TRADE DATE OCTOBER 31, 2000 DEPRECIATION
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
13 S&P 500 Index Future December 2000 $4,704,950 $4,680,650 $(24,300)
</TABLE>
56
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Small-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--94.3%
APPAREL & TEXTILES--1.5%
Ross Stores, Inc.......................................... 25,200 $ 332,325
Tommy Hilfiger Corp.+..................................... 4,300 49,988
Wolverine World Wide, Inc................................. 37,000 400,062
-------------
782,375
-------------
AUTOMOTIVE--0.7%
Borg Warner Automotive, Inc............................... 4,700 177,425
Wabash National Corp...................................... 21,000 168,000
-------------
345,425
-------------
BANKS--3.0%
Associated Banc-Corp...................................... 13,420 322,919
Chittenden Corp........................................... 4,700 124,844
Citizens Banking Corp..................................... 510 12,144
Community First Bankshares................................ 2,050 31,775
F.N.B. Corp............................................... 12,653 272,029
Queens County Bancorp, Inc................................ 6,100 170,800
Seacoast Financial Services Corp.......................... 22,000 233,750
Southwest Bancorp. of Texas, Inc.+........................ 2,000 73,000
Staten Island Bancorp, Inc................................ 8,100 156,431
West America Bancorp...................................... 2,300 82,656
Wilmington Trust Corp..................................... 2,200 115,775
-------------
1,596,123
-------------
BROADCASTING & MEDIA--1.3%
Banta Corp................................................ 7,200 166,050
Bowne & Co., Inc.......................................... 2,400 20,100
Imax Corp.+............................................... 7,300 35,588
Pulitzer, Inc............................................. 2,700 110,565
R.H. Donnelley Corp.+..................................... 8,100 183,262
Valassis Communications, Inc.+............................ 6,600 183,150
-------------
698,715
-------------
BUSINESS SERVICES--9.0%
Affiliated Computer Services, Inc., Class A+.............. 2,200 122,513
A.O. Smith Corp........................................... 6,610 93,366
ACNielson Corp.+.......................................... 8,300 198,681
Acxiom Corp.+............................................. 8,200 330,050
BISYS Group, Inc.+........................................ 400 18,850
Briggs & Stratton Corp.................................... 14,000 499,625
Brightpoint, Inc.+........................................ 15,000 99,844
CDI Corp.+................................................ 4,200 66,675
Choicepoint, Inc.......................................... 1,500 76,781
Corinthian Colleges, Inc.................................. 800 55,300
Dycom Industries, Inc.+................................... 1,750 65,844
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS SERVICES (CONTINUED)
FSI International, Inc.+.................................. 45,000 $ 419,062
Gartner Group, Inc., Class A.............................. 19,900 189,050
Granite Construction, Inc................................. 3,200 73,000
HON INDUSTRIES, Inc....................................... 13,040 313,775
Houghton Mifflin Co....................................... 3,500 128,844
ITT Educational Services, Inc............................. 8,400 132,300
Insituform Technologies, Inc., Class A.................... 4,900 174,869
Kforce.com, Inc.+......................................... 28,920 117,487
Longview Fibre Co......................................... 12,840 174,945
Mail-Well, Inc.+.......................................... 1,400 6,913
Maximus, Inc.+............................................ 5,800 142,462
National Data Corp........................................ 4,900 186,812
Pittston Brink's Group.................................... 6,226 98,838
Spherion Corp............................................. 37,600 446,500
Tetra Tech, Inc.+......................................... 3,900 135,525
United Stationers, Inc.+.................................. 4,800 144,300
-------------
4,512,211
-------------
CHEMICALS--1.3%
A. Schulman, Inc.......................................... 26,000 284,375
Ferro Corp................................................ 5,300 108,650
Minerals Technologies, Inc................................ 1,400 43,838
RPM, Inc.................................................. 27,000 241,312
-------------
678,175
-------------
COMMUNICATION EQUIPMENT--1.3%
Anixter International, Inc.+.............................. 5,400 130,950
ANTEC Corp.+.............................................. 6,200 75,563
Black Box Corp.+.......................................... 3,600 237,150
CommScope, Inc.+.......................................... 6,100 154,406
Computer Network Technology Corp.+........................ 2,200 66,859
-------------
664,928
-------------
COMPUTERS & BUSINESS EQUIPMENT--1.4%
Advanced Digital Information.............................. 10,000 130,000
American Management Systems, Inc.+........................ 7,600 164,350
Bell & Howell Co.+........................................ 2,600 49,400
Diebold, Inc.+............................................ 5,100 132,600
Maxtor Corp............................................... 5,300 41,406
Micron Electronics, Inc.+................................. 12,100 95,666
Radisys Corp.+............................................ 3,500 92,750
-------------
706,172
-------------
COMPUTER SOFTWARE--4.5%
AVT Corp.+................................................ 28,000 175,875
</TABLE>
57
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Small-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
COMPUTER SOFTWARE (CONTINUED)
Complete Business
Solutions, Inc.+........................................ 13,000 $ 134,875
Computer Horizons Corp.+.................................. 23,000 115,000
Hyperion Solutions Corp.+................................. 7,630 106,820
J.D. Edwards & Co.+....................................... 9,100 235,462
JDA Software Group, Inc.+................................. 18,920 284,982
Mentor Graphics Corp.+.................................... 12,300 288,281
Pinnacle Systems, Inc.+................................... 21,300 268,912
Progress Software Corp.+.................................. 16,000 253,000
Storage Technology Corp.+................................. 9,300 90,675
Structural Dynamics Research Corp.+(1).................... 17,000 175,313
Transaction Systems Architects, Inc., Class A+............ 17,760 239,760
-------------
2,368,955
-------------
DRUGS--1.2%
AmeriSource Health Corp., Class A+........................ 1,100 47,781
Omnicare, Inc............................................. 20,000 350,000
Perrigo Co.+.............................................. 38,000 251,750
-------------
649,531
-------------
ELECTRIC UTILITIES--0.3%
Sierra Pacific Resources.................................. 9,620 165,344
-------------
ELECTRICAL EQUIPMENT--0.7%
Belden, Inc............................................... 3,800 98,563
Crane Co.................................................. 5,600 146,650
Credence Systems Corp.+................................... 1,200 22,500
Roper Industries, Inc..................................... 2,900 101,500
-------------
369,213
-------------
ELECTRONICS--4.0%
Allen Telecommunications, Inc.+........................... 4,700 87,831
Analogic Corp............................................. 17,600 621,500
Kemet Corp.+.............................................. 4,200 117,075
Lam Research Corp.+....................................... 900 17,438
Sensormatic Electronics Corp.+............................ 12,800 230,400
Silicon Valley Group, Inc.+............................... 25,000 823,437
Watts Industries, Inc., Class A........................... 20,000 223,750
-------------
2,121,431
-------------
ENERGY SERVICES--2.0%
Coflexip SA ADR........................................... 3,200 182,600
Core Laboratories NV+..................................... 10,400 224,250
Helmerich & Payne, Inc.................................... 5,900 185,481
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY SERVICES (CONTINUED)
Key Energy Service, Inc.+................................. 48,000 $ 432,000
-------------
1,024,331
-------------
ENERGY SOURCES--2.4%
Barrett Resources Corp.+.................................. 4,900 178,238
Chieftain International, Inc.+............................ 14,200 287,550
Louis Dreyfus Natural Gas Corp............................ 4,800 153,900
Mitchell Energy Development Corp.......................... 5,500 253,000
Noble Affiliates, Inc..................................... 11,000 403,562
-------------
1,276,250
-------------
ENTERTAINMENT PRODUCTS--0.9%
Harman International Industries, Inc...................... 6,300 302,400
Hasbro, Inc............................................... 12,600 135,450
Polaroid Corp............................................. 1,300 13,081
-------------
450,931
-------------
FINANCIAL SERVICES--2.5%
Allied Capital Corp....................................... 8,200 169,125
Capital Southwest Corp.................................... 6,000 320,250
Heller Financial, Inc..................................... 6,600 193,050
Liberty Financial Cos., Inc............................... 11,400 307,800
Profit Recovery Group International, Inc.+................ 8,600 46,225
Webster Financial Corp.................................... 12,000 292,500
-------------
1,328,950
-------------
FOOD, BEVERAGE & TOBACCO--0.5%
Adolph Coors Co., Class B................................. 1,000 63,688
Whitman Corp.............................................. 15,900 206,700
-------------
270,388
-------------
FOREST PRODUCTS--2.7%
Deltic Timber Corp........................................ 30,000 583,125
Packaging Corp. of America................................ 12,100 177,719
Rayonier, Inc............................................. 15,000 527,812
Wausau-Mosinee Paper Corp................................. 11,700 102,375
-------------
1,391,031
-------------
GAS & PIPELINE UTILITIES--0.1%
Avista Corp............................................... 3,400 76,288
-------------
HEALTH SERVICES--3.0%
Apria Healthcare Group, Inc.+............................. 8,000 160,000
Dendrite International, Inc.+............................. 7,700 167,475
Innovative Clinical Solutions............................. 108,000 114,750
Kendle International, Inc.+............................... 1,000 9,250
</TABLE>
58
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Small-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
HEALTH SERVICES (CONTINUED)
Manor Care, Inc.+......................................... 40,300 $ 672,506
PAREXEL International Corp.+.............................. 35,000 306,250
Renal Care Group, Inc..................................... 6,400 150,400
-------------
1,580,631
-------------
HOUSEHOLD PRODUCTS--0.2%
Pennzoil-Quaker State Co.................................. 8,300 97,525
-------------
HOUSING--4.0%
Bassett Furniture Industries, Inc......................... 6,000 75,750
D.R. Horton, Inc.......................................... 27,250 504,125
Fleetwood Enterprises, Inc................................ 15,000 197,812
Furniture Brands International, Inc.+..................... 9,300 156,938
Hughes Supply, Inc........................................ 5,600 105,000
Kaufman & Broad Home Corp................................. 3,800 113,050
La-Z-Boy, Inc............................................. 20,000 315,000
Pulte Corp................................................ 12,000 399,750
Toll Brothers, Inc.+...................................... 7,400 240,500
-------------
2,107,925
-------------
INSURANCE--13.7%
Chiyoda Fire & Marine Insurance Co. Ltd................... 200,000 535,215
Enhance Financial Services Group, Inc..................... 50,000 581,250
Everest Reinsurance Group Ltd............................. 4,600 269,675
First American Financial Corp............................. 45,000 942,188
Gallagher (Arthur J.) & Co................................ 2,600 164,125
HCC Insurance Holdings, Inc............................... 4,800 91,500
Horace Mann Educators Corp................................ 19,500 327,844
IPC Holdings Ltd.......................................... 20,000 407,813
Leucadia National Corp.................................... 20,400 507,450
MBIA, Inc................................................. 13,000 944,937
Old Republic International Corp........................... 21,000 546,000
Radian Group, Inc......................................... 3,199 226,729
Renaissance Holdings Ltd.+................................ 2,000 145,125
Stewart Information Services Corp......................... 40,100 631,575
Trenwick Group Ltd........................................ 43,000 843,875
-------------
7,165,301
-------------
INTERNET CONTENT--0.6%
Avocent Corp.............................................. 1,600 113,500
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
INTERNET CONTENT (CONTINUED)
Answerthink, Inc.......................................... 11,100 $ 181,763
-------------
295,263
-------------
INVESTMENT COMPANIES--0.3%
Morgan Stanley Asia--Pacific Fund+........................ 18,000 159,750
-------------
LEISURE & TOURISM--0.5%
Alaska Air Group, Inc.+................................... 6,000 155,625
Prime Hospitality Corp.+.................................. 9,600 91,200
-------------
246,825
-------------
MACHINERY--7.5%
Alamo Group, Inc.......................................... 50,000 646,875
Federal Signal Corp....................................... 30,240 706,860
JLG Industries, Inc....................................... 12,400 172,825
Kaydon Corp............................................... 10,650 233,634
Manitowoc, Inc............................................ 16,500 448,594
Paccar, Inc............................................... 15,000 630,938
Regal-Beloit Corp......................................... 7,200 120,600
Snap-On, Inc.............................................. 3,700 94,581
Tecumseh Products Co...................................... 6,630 264,371
Toyoda Automatic Loom Works Ltd........................... 35,000 633,506
-------------
3,952,784
-------------
MEDICAL PRODUCTS--2.4%
Dentsply International, Inc............................... 5,300 183,844
Inamed Corp.+............................................. 5,200 145,600
Invacare Corp............................................. 9,300 265,050
Steris Corp.+............................................. 36,500 547,500
Varian Medical Systems, Inc.+............................. 2,200 107,525
-------------
1,249,519
-------------
METALS & MINERALS--2.3%
Alcoa, Inc................................................ 26,500 760,218
Martin Marietta Materials, Inc............................ 4,100 157,440
USG Corp.+................................................ 17,500 298,594
-------------
1,216,252
-------------
MULTI-INDUSTRY--1.4%
Trinity Industries, Inc................................... 31,500 757,969
-------------
REAL ESTATE COMPANIES--4.4%
Catellus Development Corp.+............................... 47,300 860,269
Forest City Enterprises, Inc., Class A.................... 23,500 869,500
LNR Property Corp......................................... 26,200 566,575
-------------
2,296,344
-------------
</TABLE>
59
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Small-Cap Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS--7.2%
Alexandria Real Estate Equities, Inc...................... 3,100 $ 105,013
Chateau Communities, Inc.................................. 5,700 160,312
Chelsea GCA Realty, Inc................................... 2,000 64,500
FelCor Lodging Trust, Inc................................. 8,000 175,500
Gables Residential Trust.................................. 10,000 255,000
Highwoods Properties, Inc................................. 9,000 194,625
Home Properties of New York, Inc.......................... 14,360 390,412
IRT Property Co........................................... 15,000 122,813
JDN Realty Corp........................................... 18,000 196,875
Kilroy Realty Corp........................................ 2,900 75,581
Koger Equity, Inc......................................... 31,300 498,844
Mack-Cali Realty Corp..................................... 3,000 81,375
Parkway Properties, Inc................................... 3,500 100,188
Plum Creek Timber Co., Inc................................ 17,000 440,937
Prentiss Properties Trust................................. 9,500 241,062
Summit Properties, Inc.................................... 8,000 192,000
Wellsford Real Property, Inc.............................. 27,500 489,844
-------------
3,784,881
-------------
RETAIL--3.4%
AnnTaylor Stores Corp..................................... 9,000 270,000
Blockbuster, Inc.......................................... 14,600 129,575
Borders Group, Inc.+...................................... 14,200 197,025
Casey's General Stores, Inc............................... 13,000 162,500
Ethan Allen Interiors, Inc................................ 1,900 55,575
Lands End, Inc............................................ 5,840 149,796
Pier 1 Imports, Inc....................................... 24,250 321,312
Venator Group, Inc.+...................................... 15,700 221,763
Whole Foods Market, Inc.+................................. 5,000 231,250
Wild Oats Markets, Inc.................................... 5,200 32,825
-------------
1,771,621
-------------
TELECOMMUNICATIONS--0.2%
Viasystems Group, Inc..................................... 1,300 18,444
West TeleServices Corp.+.................................. 4,000 102,000
-------------
120,444
-------------
TRANSPORTATION--2.2%
CNF Transportation, Inc................................... 27,600 736,575
Kansas City Southern Inds Inc............................. 28,000 243,250
Knight Transportation, Inc.+.............................. 11,000 174,625
-------------
1,154,450
-------------
TOTAL INVESTMENT SECURITIES--94.3%
(cost $46,569,803)........................................ 49,434,251
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNTS VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--5.1%
Agreement with State Street Bank & Trust Co., bearing
5.25%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $796,116 collateralized by $720,000 U.S.
Treasury Bond 6.88% due 8/15/25 approximate aggregate
value $816,420.......................................... $ 796 $ 796,000
Agreement with State Street Bank & Trust Co., bearing
5.25%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $799,117 collateralized by $815,000 U.S.
Treasury Note 5.50% due 5/15/09 approximate aggregate
value $818,776.......................................... 799 799,000
Agreement with State Street Bank & Trust Co., bearing
6.45%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $1,109,199 collateralized by $1,140,000 U.S.
Treasury Note 5.75% due 4/30/03 approximate aggregate
value $1,135,013........................................ 1,109 1,109,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $2,704,000)......................................... 2,704,000
-------------
TOTAL INVESTMENTS--
(cost $49,273,803)........................................ 99.5% 52,138,251
Other assets less liabilities............................... 0.5 244,227
------------- -------------
NET ASSETS.................................................. 100.0% $ 52,382,478
============= =============
</TABLE>
------------------
+ Non-income producing security
ADR ("American Depositary Receipt")
See Notes to Financial Statements
60
<PAGE>
STYLE SELECT SERIES LOGO
Focus Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--90.7%
AEROSPACE & MILITARY TECHNOLOGY--3.0%
Boeing Co................................................. 816,368 $ 55,359,954
--------------
BANKS--3.0%
Chase Manhattan Corp...................................... 1,241,000 56,465,500
--------------
BROADCASTING & MEDIA--3.0%
Viacom, Inc., Class B+.................................... 987,400 56,158,375
--------------
COMMUNICATION EQUIPMENT--1.5%
JDS Uniphase Corp.+....................................... 339,600 27,634,950
--------------
COMPUTER SOFTWARE--17.2%
Adobe Systems, Inc........................................ 960,230 73,037,494
Cisco Systems, Inc.+...................................... 3,755,547 202,330,095
EMC Corp.+................................................ 491,437 43,768,608
--------------
319,136,197
--------------
DRUGS--17.6%
ALZA Corp.+............................................... 336,750 27,255,703
American Home Products Corp............................... 747,400 47,459,900
Cardinal Health, Inc...................................... 714,600 67,708,350
Eli Lilly & Co............................................ 531,500 47,502,813
Pfizer, Inc............................................... 3,150,000 136,040,625
--------------
325,967,391
--------------
ELECTRIC UTILITIES--2.7%
Calpine Corp.+............................................ 639,000 50,441,063
--------------
ELECTRONICS--4.2%
Flextronics International Ltd.+........................... 2,060,029 78,281,102
--------------
ENERGY SERVICES--3.1%
Transocean Sedco Forex, Inc............................... 1,093,500 57,955,500
--------------
FINANCIAL SERVICES--3.3%
Citigroup, Inc............................................ 1,149,900 60,513,487
--------------
INTERNET CONTENT--6.1%
Commerce One, Inc.+....................................... 880,000 56,485,000
eBay, Inc.+............................................... 1,099,000 56,598,500
--------------
113,083,500
--------------
MEDICAL PRODUCTS--5.2%
Baxter International, Inc................................. 693,500 56,997,031
Genentech, Inc.+.......................................... 476,946 39,348,045
--------------
96,345,076
--------------
MULTI-INDUSTRY--4.7%
Corning, Inc.............................................. 314,730 24,076,845
Tyco International Ltd.................................... 1,100,000 62,356,250
--------------
86,433,095
--------------
RETAIL--9.9%
Costco Wholesale Corp.+................................... 1,559,567 57,119,141
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL (CONTINUED)
Home Depot, Inc........................................... 2,927,883 $ 125,898,969
--------------
183,018,110
--------------
TELECOMMUNICATIONS--6.2%
Nokia Corp. ADR........................................... 1,460,900 62,453,475
Vodafone Group PLC ADR.................................... 1,242,600 52,888,163
--------------
115,341,638
--------------
TOTAL INVESTMENT SECURITIES--90.7%
(cost $1,608,650,589)..................................... 1,682,134,938
--------------
SHORT-TERM SECURITIES--14.3%
AEP Credit, Inc.
6.49% due 11/07/00...................................... $ 2,200,000 2,189,291
American Express Credit Corp.
6.61% due 11/01/00...................................... 25,500,000 25,500,000
Dayton Power & Light Co .
6.53% due 11/06/00...................................... 500,000 497,823
Fayette Funding L.P.
6.50% due 11/21/00...................................... 6,600,000 6,576,167
Federal Home Loan Bank Discount Notes
6.23% due 11/01/00...................................... 177,500,000 177,500,000
Ford Motor Credit Co.
6.51% due 11/01/00...................................... 25,500,000 25,500,000
General Electric Capital Corp.
6.50% due 11/01/00...................................... 12,859,000 12,859,000
Merrill Lynch & Co., Inc.
6.48% due 11/16/00...................................... 600,000 598,380
Rembrandt International Co., Inc.
6.52% due 11/28/00...................................... 4,200,000 4,179,462
Textron Financial Corp.
6.52% due 11/17/00...................................... 400,000 398,841
Verizon Network Fund
6.45% due 11/03/00...................................... 10,000,000 9,996,417
--------------
TOTAL SHORT-TERM SECURITIES
(cost $265,795,381)....................................... 265,795,381
--------------
TOTAL INVESTMENTS--
(cost $1,874,445,970)..................................... 105.0% 1,947,930,319
Liabilities in excess of other assets..................... (5.0) (93,114,614)
------------- --------------
NET ASSETS-- 100.0% $1,854,815,705
============= ==============
</TABLE>
------------------
+ Non-income producing security
ADR ("American Depositary Receipt")
See Notes to Financial Statements
61
<PAGE>
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Focused TechNet Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--86.8%
COMMUNICATION EQUIPMENT--7.7%
JDS Uniphase Corp.+....................................... 40,100 $ 3,263,138
Network Appliance, Inc.+.................................. 107,700 12,816,300
QUALCOMM, Inc.+........................................... 45,000 2,929,922
-------------
19,009,360
-------------
COMPUTERS & BUSINESS EQUIPMENT--9.1%
Brocade Communications Systems, Inc.+..................... 42,500 9,663,437
Compaq Computer Corp...................................... 288,000 8,758,080
Redback Networks, Inc.+................................... 38,100 4,055,269
-------------
22,476,786
-------------
COMPUTER SOFTWARE--17.6%
Electronic Arts, Inc.+.................................... 161,500 8,075,000
Intuit, Inc.+............................................. 134,000 8,232,625
Netegrity, Inc.+.......................................... 140,000 10,920,000
StorageNetworks, Inc.+.................................... 90,000 5,709,375
Sun Microsystems, Inc.+................................... 40,000 4,435,000
Sycamore Networks, Inc.+.................................. 94,800 5,996,100
-------------
43,368,100
-------------
ELECTRONICS--19.2%
Applied Micro Circuits Corp.+............................. 80,000 6,110,000
Broadcom Corp., Class A+.................................. 37,500 8,339,062
Maxim Integrated Products, Inc.+.......................... 99,000 6,564,938
Palm, Inc.+............................................... 150,000 8,034,375
PMC-Sierra, Inc.+......................................... 38,900 6,593,550
SDL, Inc.+................................................ 45,500 11,795,875
-------------
47,437,800
-------------
INTERNET CONTENT--15.4%
Check Point Software Technologies, Ltd.+.................. 53,000 8,393,875
Commerce One, Inc.+....................................... 99,000 6,354,562
eBay, Inc.+............................................... 121,500 6,257,250
Juniper Networks, Inc.+................................... 87,500 17,062,500
-------------
38,068,187
-------------
INTERNET SOFTWARE--12.0%
Ariba, Inc.+.............................................. 90,000 11,373,750
Interwoven, Inc.+......................................... 120,000 12,090,000
Vignette Corp.+........................................... 208,000 6,201,000
-------------
29,664,750
-------------
MEDICAL PRODUCTS--3.3%
Human Genome Sciences, Inc.+.............................. 91,700 8,105,420
-------------
TELECOMMUNICATIONS--2.5%
Avanex Corp.+............................................. 60,000 6,093,750
-------------
TOTAL COMMON STOCK
(cost $201,450,526)..................................... 214,224,153
-------------
<CAPTION>
CONTRACTS/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
PUT OPTION--0.0%+(1)
Juniper Networks, Inc. exp. 11/00 @ $200
(cost $35,604).......................................... 16 $ 31,600
-------------
TOTAL INVESTMENT SECURITIES--86.8%
(cost $201,486,130)....................................... 214,255,753
-------------
REPURCHASE AGREEMENTS--14.9%
Paine Webber, Inc. Joint Repurchase Agreement
(Note 2)................................................ $ 10,000 10,000,000
State Street Bank & Trust Co. Joint Repurchase Agreement
(Note 2)................................................ 12,498 12,498,000
Agreement with State Street Bank & Trust Co., bearing
6.3%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $11,573,025, collateralized by $11,575,000
United States Treasury Notes 5.50% due 11/30/02
approximate aggregate value $11,806,500................. 11,571 11,571,000
Agreement with State Street Bank & Trust Co., bearing
6.3%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $2,704,473, collateralized by $2,370,000
United States Treasury Bonds 15.75% due 11/15/01
approximate aggregate value $2,761,050.................. 2,704 2,704,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $36,773,000)........................................ 36,773,000
-------------
TOTAL INVESTMENTS--
(cost $238,259,130)....................................... 101.7% 251,028,753
Liabilities in excess of other assets..................... (1.7) (4,285,979)
------------- -------------
NET ASSETS-- 100.0% $ 246,742,774
============= =============
</TABLE>
------------------
+ Non-income producing security
(1) 1 option contract equals 100 shares
See Notes to Financial Statements
62
<PAGE>
STYLE SELECT SERIES LOGO
Focused Growth and Income Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--90.3%
AEROSPACE & MILITARY TECHNOLOGY--3.5%
Boeing Co..................................................................... 53,337 $ 3,616,915
General Dynamics Corp......................................................... 55,710 3,986,747
-------------
7,603,662
-------------
BANKS--0.9%
Chase Manhattan Corp.......................................................... 40,000 1,820,000
-------------
BROADCASTING & MEDIA--0.6%
Clear Channel Communications, Inc.+........................................... 21,567 1,295,368
-------------
COMMUNICATION EQUIPMENT--3.0%
CIENA Corp.+.................................................................. 30,000 3,153,750
JDS Uniphase Corp.+........................................................... 22,400 1,822,800
Nortel Networks Corp.......................................................... 31,100 1,415,050
-------------
6,391,600
-------------
COMPUTERS & BUSINESS EQUIPMENT--3.2%
Brocade Communications Systems, Inc.+......................................... 15,000 3,410,625
International Business Machines Corp.......................................... 35,000 3,447,500
-------------
6,858,125
-------------
COMPUTER SOFTWARE--16.8%
Adobe Systems, Inc............................................................ 61,090 4,646,658
Automatic Data Processing, Inc................................................ 19,118 1,248,644
Cisco Systems, Inc.+.......................................................... 143,548 7,733,648
EMC Corp.+.................................................................... 133,709 11,908,458
Microsoft Corp.+.............................................................. 50,000 3,443,750
Oracle Corp.+................................................................. 120,740 3,984,420
Sun Microsystems, Inc.+....................................................... 30,243 3,353,193
-------------
36,318,771
-------------
DRUGS--4.1%
Merck & Co., Inc.............................................................. 26,237 2,359,690
Pfizer, Inc................................................................... 149,975 6,477,046
-------------
8,836,736
-------------
ELECTRONICS--8.6%
Emerson Electric Co........................................................... 50,000 3,671,875
Intel Corp.................................................................... 84,800 3,816,000
Palm, Inc.+................................................................... 70,000 3,749,375
PerkinElmer, Inc.............................................................. 40,000 4,780,000
PMC-Sierra, Inc.+............................................................. 15,000 2,542,500
-------------
18,559,750
-------------
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------------------------------------------
ENERGY SERVICES--1.8%
<S> <C> <C>
Schlumberger Ltd.............................................................. 50,000 $ 3,806,250
-------------
ENERGY SOURCES--1.8%
Kerr-McGee Corp............................................................... 60,000 3,918,750
-------------
FINANCIAL SERVICES--12.3%
American Express Co........................................................... 70,000 4,200,000
Citigroup, Inc................................................................ 161,635 8,506,042
Goldman Sachs Group, Inc...................................................... 32,189 3,212,864
Merrill Lynch & Co., Inc...................................................... 61,424 4,299,680
Morgan Stanley Dean Witter & Co............................................... 78,802 6,328,786
-------------
26,547,372
-------------
FOOD, BEVERAGE & TOBACCO--1.1%
Anheuser-Busch Cos., Inc...................................................... 52,689 2,410,522
-------------
HEALTH SERVICES--2.3%
Tenet Healthcare Corp......................................................... 127,306 5,004,717
-------------
INTERNET CONTENT--1.4%
Juniper Networks, Inc.+....................................................... 15,000 2,925,000
-------------
LEISURE & TOURISM--0.9%
Four Seasons Hotels, Inc...................................................... 26,534 1,936,982
-------------
MEDICAL PRODUCTS--6.8%
Amgen, Inc.+.................................................................. 25,000 1,448,438
Genentech, Inc.+.............................................................. 133,140 10,984,050
Guidant Corp.+................................................................ 43,499 2,302,728
-------------
14,735,216
-------------
MULTI-INDUSTRY--10.0%
Corning, Inc.................................................................. 85,978 6,577,317
General Electric Co........................................................... 200,495 10,989,632
Tyco International Ltd........................................................ 70,000 3,968,125
-------------
21,535,074
-------------
RETAIL--8.6%
Costco Wholesale Corp.+....................................................... 104,409 3,823,980
Home Depot, Inc............................................................... 191,666 8,241,638
Tiffany & Co.................................................................. 94,974 4,054,202
Wal-Mart Stores, Inc.......................................................... 54,371 2,467,084
-------------
18,586,904
-------------
TELECOMMUNICATIONS--2.6%
General Motors Corp., Class H+................................................ 176,026 5,703,243
-------------
TOTAL INVESTMENT SECURITIES--90.3%
(cost $177,629,015)........................................................... 194,794,042
-------------
</TABLE>
63
<PAGE>
STYLE SELECT SERIES LOGO
Focused Growth and Income Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM SECURITIES--6.1%
Federal Home Loan Bank Discount Notes
6.23% due 11/01/00
(cost: $13,200,000)......................................................... $ 13,200 $ 13,200,000
-------------
REPURCHASE AGREEMENT--4.9%
State Street Bank & Trust Co.
Joint Repurchase Agreement
(Note 2)
(cost: $10,434,000)......................................................... 10,434 10,434,000
-------------
TOTAL INVESTMENTS--
(cost $201,263,015)........................................................... 101.3% 218,428,042
Liabilities in excess of other assets......................................... (1.3) (2,810,357)
------------- -------------
NET ASSETS-- 100.0% $ 215,617,685
============= =============
</TABLE>
------------------
+ Non-income producing security
See Notes to Financial Statements
64
<PAGE>
STYLE SELECT SERIES LOGO
Focused Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--89.3%
BANKS--3.3%
Bank of New York Co., Inc................................. 83,974 $ 4,833,753
-------------
COMMUNICATION EQUIPMENT--2.5%
QUALCOMM, Inc.+........................................... 57,600 3,750,300
-------------
COMPUTER SOFTWARE--8.1%
Computer Sciences Corp.+.................................. 56,500 3,559,500
DST Systems, Inc.+........................................ 70,294 4,331,868
J.D. Edwards & Co.+....................................... 155,000 4,010,625
-------------
11,901,993
-------------
DRUGS--2.8%
American Home Products Corp............................... 66,000 4,191,000
-------------
ELECTRIC UTILITIES--7.0%
Florida Progress Corp..................................... 84,700 4,504,981
Wisconsin Energy Corp..................................... 309,500 5,822,469
-------------
10,327,450
-------------
ELECTRONICS--5.5%
Silicon Valley Group, Inc.+............................... 245,700 8,092,744
-------------
ENERGY SOURCES--5.8%
Royal Dutch Petroleum Co. NY Registry Shares GDR.......... 78,400 4,655,000
Unocal Corp............................................... 114,800 3,917,550
-------------
8,572,550
-------------
FINANCIAL SERVICES--6.8%
Liberty Financial Cos., Inc............................... 175,000 4,725,000
Student Loan Corp......................................... 100,300 5,366,050
-------------
10,091,050
-------------
FOREST PRODUCTS--4.1%
Minnesota Mining & Manufacturing Co....................... 62,100 6,000,413
-------------
HEALTH SERVICES--5.5%
PAREXEL International Corp.+.............................. 420,600 3,680,250
Wellpoint Health Networks, Inc.+.......................... 38,577 4,511,098
-------------
8,191,348
-------------
HOUSEHOLD PRODUCTS--3.1%
Kimberly-Clark Corp....................................... 70,000 4,620,000
-------------
HOUSING--5.7%
D.R. Horton, Inc.......................................... 377,903 6,991,205
York International Corp................................... 50,000 1,359,375
-------------
8,350,580
-------------
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
INSURANCE--11.4%
Enhance Financial Services Group, Inc..................... 477,000 $ 5,545,125
First American Financial Corp............................. 339,600 7,110,375
Trenwick Group Ltd........................................ 212,000 4,160,500
-------------
16,816,000
-------------
MACHINERY--4.3%
Alamo Group, Inc.......................................... 244,100 3,158,044
Toyoda Automatic Loom Works Ltd........................... 175,000 3,167,529
-------------
6,325,573
-------------
MEDICAL PRODUCTS--2.4%
Becton, Dickinson & Co.................................... 105,400 3,530,900
-------------
REAL ESTATE COMPANIES--2.5%
Catellus Development Corp.+............................... 201,000 3,655,688
-------------
RETAIL--3.1%
Staples, Inc.+............................................ 326,330 4,650,203
-------------
TELEPHONE--5.4%
Sprint Corp............................................... 123,300 3,144,150
Verizon Communications.................................... 83,796 4,844,456
-------------
7,988,606
-------------
TOTAL COMMON STOCK
(cost $114,694,070)....................................... 131,890,151
-------------
PREFERRED STOCK--5.1%
FINANCIAL SERVICES--5.1%
Union Pacific Capital Trust convertible 6.25%
(cost $6,981,997)....................................... 167,000 7,515,000
-------------
TOTAL INVESTMENT SECURITIES--94.4%
(cost $121,676,067)....................................................... 139,405,151
-------------
REPURCHASE AGREEMENTS--5.2%
Agreement with State Street
Bank & Trust Co., bearing
5.25%, dated 10/31/00 to be
repurchased 11/01/00 in the
amount of $3,218,469
collateralized by $3,285,000
U.S. Treasury Bond 6.25%
due 10/31/01 approximate
aggregate value $3,282,947.............................. $ 3,218 3,218,000
</TABLE>
65
<PAGE>
STYLE SELECT SERIES LOGO
Focused Value Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Agreement with State Street
Bank & Trust Co., bearing
5.25%, dated 10/31/00 to be
repurchased 11/01/00 in the
amount of $1,278,186
collateralized by $1,095,000
U.S. Treasury Bond 7.50%
due 11/15/16 approximate
aggregate value $1,304,835.............................. $ 1,278 $ 1,278,000
Agreement with State Street
Bank & Trust Co., bearing
5.25%, dated 10/31/00 to be
repurchased 11/01/00 in the
amount of $3,208,468
collateralized by $3,290,000
U.S. Treasury Bond 5.50%
due 3/31/03 approximate
aggregate value $3,272,510.............................. 3,208 3,208,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $7,704,000)......................................... 7,704,000
-------------
TOTAL INVESTMENTS--
(cost $129,380,067)....................................... 99.6% 147,109,151
Other assets less liabilities............................. 0.4 546,799
------------- -------------
NET ASSETS-- 100.0% $ 147,655,950
============= =============
</TABLE>
------------------
+ Non-income producing security
GDR "Global Depositary Receipt"
See Notes to Financial Statements
66
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK--85.6%
AUSTRALIA--1.0%
Brambles Industries Ltd. (Industrial & Commercial)........ 20,390 $ 528,659
Commonwealth Bank of Australia (Finance).................. 5,319 79,154
News Corp. Ltd. ADR (Information & Entertainment)......... 2,600 111,800
Publishing & Broadcasting Ltd. (Information &
Entertainment).......................................... 26,000 177,493
Qantas Airways Ltd. (Information & Entertainment)......... 77,200 155,264
Telstra Corp. Ltd. (Information Technology)............... 34,519 112,654
-------------
1,165,024
-------------
BELGIUM--0.3%
Dexia Belgium (Credit Communal) (Finance)................. 944 141,871
Fortis (B) (Finance)...................................... 7,490 229,452
UCB SA (Healthcare)....................................... 670 23,880
-------------
395,203
-------------
BRAZIL--0.6%
Petroleo Brasileiros SA ADR+ (Energy)..................... 14,600 424,312
Tele Norte Leste Participacoes SA ADR (Utilities)......... 8,021 177,465
Uniao De Banco Brasilieros SA GDR+ (Finance).............. 2,000 50,500
-------------
652,277
-------------
CANADA--3.2%
Alcan Aluminium Ltd. (Materials).......................... 4,820 151,621
Bombardier Inc., Class B (Multi-industry)................. 33,522 525,599
C-Mac Industries, Inc.+ (Information Technology).......... 3,000 166,500
Canada Life Financial Corp. (Finance)..................... 4,800 111,869
Celestica, Inc.+ (Industrial & Commercial)................ 13,143 940,036
Manulife Financial Corp. (Finance)........................ 11,605 300,856
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
CANADA (CONTINUED)
Nortel Networks Corp. (Information Technology)............ 15,361 $ 695,179
Royal Bank of Canada (Finance)............................ 2,020 63,873
Seagram Co., Ltd. (Information & Entertainment)........... 4,300 245,638
Sun Life Financial Services Inc.+ (Finance)............... 28,129 580,074
-------------
3,781,245
-------------
CHINA--0.2%
Petrochina Co. Ltd. (Energy).............................. 1,184,300 249,039
-------------
DENMARK--0.0%
Tele Danmark A/S (Utilities).............................. 700 33,126
-------------
FINLAND--1.3%
Nokia Oyj (Information Technology)........................ 29,652 1,220,139
Nokia Oyj ADR (Information Technology).................... 7,481 319,813
-------------
1,539,952
-------------
FRANCE--11.5%
Alcatel SA (Information Technology)....................... 14,960 912,775
Altran Technologies SA (Industrial & Commercial).......... 1,820 372,059
Aventis SA (Healthcare)................................... 25,113 1,810,121
Axa (Finance)............................................. 10,403 1,377,166
Banque Nationale de Paris (Finance)....................... 14,560 1,255,331
Bouygues (Industrial & Commercial)........................ 2,010 102,341
Business Objects SA ADR+ (Information Technology)......... 5,373 423,376
Canal Plus (Information & Entertainment).................. 300 43,406
Cap Gemini SA (Information Technology).................... 1,020 162,728
Christian Dior SA (Consumer Discretionary)................ 6,760 343,619
Compagnie de Saint-Gobain (Materials)..................... 1,540 203,737
</TABLE>
67
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
FRANCE (CONTINUED)
France Telecom SA (Information Technology)................ 2,700 $ 282,278
Groupe Danone+ (Consumer Staples)......................... 480 67,128
Hermes International (Consumer Discretionary)............. 820 110,640
L'Oreal SA (Consumer Staples)............................. 1,040 79,429
Lafarge SA (Materials).................................... 311 22,960
Legrand SA (Information Technology)....................... 1,230 198,318
Louis Vuitton Moet Henessy (Consumer Staples)............. 885 64,587
Sanofi-Synthelabo SA (Healthcare)......................... 7,744 407,437
Schneider Electric SA (Information Technology)............ 1,308 85,190
Societe Generale (Finance)................................ 13,114 744,500
Societe Television Francaise 1 (Information &
Entertainment).......................................... 8,990 490,539
Sodexho Alliance SA (Multi-industry)...................... 506 79,223
Suez Lyonnaise des Eaux SA (Utilities).................... 4,060 619,468
Total Fina Elf (Energy)................................... 15,538 2,223,084
Vivendi (Multi-industry).................................. 15,842 1,138,667
-------------
13,620,107
-------------
GERMANY--3.8%
Allianz AG (Finance)...................................... 1,020 345,839
Bayer AG (Materials)...................................... 2,373 103,002
Deutsche Bank AG (Finance)................................ 2,531 207,221
Deutsche Lufthansa AG (Industrial & Commercial)........... 15,800 308,381
Deutsche Telekom AG (Information Technology).............. 1,337 50,205
Dresdner Bank AG (Finance)................................ 10,440 434,996
Epcos AG+ (Information Technology)........................ 4,150 314,558
Gehe AG (Healthcare)...................................... 3,540 128,874
HypoVereinsbank (Finance)................................. 5,770 317,043
Intershop Communications AG+ (Information Technology)..... 6,640 287,370
Muenchener Ruckversicherungs-Gesellschaft AG (Finance).... 936 294,284
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
GERMANY (CONTINUED)
Rhon-Klinikum AG (Consumer Discretionary)................. 920 $ 50,161
SAP AG (Information Technology)........................... 2,710 443,614
Siemens AG (Multi-industry)............................... 759 96,645
Veba AG (Utilities)....................................... 21,410 1,087,932
-------------
4,470,125
-------------
HONG KONG--2.1%
Cheung Kong (Holdings) Ltd. (Real Estate)................. 29,000 320,714
China Telecom (Hong Kong) Ltd.+ (Information
Technology)............................................. 143,500 919,990
China Unicom (Information Technology)..................... 26,000 52,173
China Unicom ADR (Information Technology)................. 7,490 153,545
Dao Heng Bank Group Ltd. (Finance)........................ 10,000 50,519
Henderson Land Development Co. Ltd. (Real Estate)......... 10,000 43,083
Hutchison Whampoa Ltd. (Multi-industry)................... 65,350 812,790
MTR Corp.+ (Industrial & Commercial)...................... 48,000 71,086
Pacific Century CyberWorks Ltd.+ (Information
Technology)............................................. 121,680 93,612
Peregrine Investments Holdings Ltd.+(2) (Finance)......... 91,000 0
-------------
2,517,512
-------------
INDIA--0.1%
ICICI Ltd. ADR (Finance).................................. 8,008 75,575
-------------
IRELAND--2.2%
Bank of Ireland (Finance)................................. 98,770 761,052
CRH PLC (Materials)....................................... 41,640 631,803
Elan Corp. PLC ADR+ (Healthcare).......................... 20,800 1,080,300
SmartForce PLC ADR+ (Information Technology).............. 3,287 165,428
-------------
2,638,583
-------------
</TABLE>
68
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
ITALY--6.5%
Alleanza Assicurazioni SpA (Finance)...................... 19,000 $ 252,009
Assicurazioni Generali (Finance).......................... 15,080 495,880
Banca Intesa SpA (Finance)................................ 211,151 876,204
Bipop-Carire SpA (Finance)................................ 28,000 221,451
ENI SpA (Energy).......................................... 203,871 1,103,772
Mediaset SpA (Information & Entertainment)................ 5,000 72,343
Mediolanum SpA (Finance).................................. 13,780 201,950
Olivetti SpA (Utilities).................................. 86,059 260,716
Riunione Adriatica de Sicurta SpA (Finance)............... 54,980 721,769
Saipem SpA (Energy)....................................... 33,360 173,819
San Paolo-IMI SpA (Industrial & Commercial)............... 36,316 588,619
Tecnost SpA (Information Technology)...................... 36,000 121,282
Telecom Italia Mobile SpA (Information Technology)........ 51,000 433,652
Telecom Italia SpA (Information Technology)............... 87,851 1,017,613
UniCredito Italiano SpA (Finance)......................... 237,768 1,210,620
-------------
7,751,699
-------------
JAPAN--12.9%
Canon, Inc. (Information Technology)...................... 19,000 753,975
DDI Corp. (Utilities)..................................... 12 56,308
East Japan Railway Co. (Industrial & Commercial).......... 11 63,209
Fanuc Ltd. (Information Technology)....................... 7,300 655,639
Fuji Television Network, Inc. (Information &
Entertainment).......................................... 22 241,947
Fujitsu Ltd. (Information Technology)..................... 41,000 730,459
Furukawa Electric Co. Ltd. (Information Technology)....... 27,000 710,168
Hitachi Ltd. (Information Technology)..................... 7,000 75,058
Ito-Yokado Co. Ltd. (Consumer Discretionary).............. 2,000 90,363
Kao Corp. (Consumer Staples).............................. 3,000 89,905
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
Kokuyo Co. Ltd. (Information Technology).................. 5,000 $ 76,983
Kyocera Corp. (Information Technology).................... 4,500 585,621
Makita Corp. (Consumer Discretionary)..................... 6,000 43,715
Marui Co. Ltd. (Consumer Discretionary)................... 14,000 206,571
Matsushita Communication Industrial Co. (Information
Technology)............................................. 600 78,633
Matsushita Electric Industrial Co. Ltd. (Information
Technology)............................................. 22,000 639,142
Mitsui Fudosan Co. Ltd. (Real Estate)..................... 36,000 436,164
Mizuho Holdings, Inc. (Finance)........................... 77 592,063
Murata Manufacturing Co. Ltd. (Information Technology).... 4,600 550,575
NEC Corp. (Information Technology)........................ 25,300 482,280
Nippon Telegraph & Telephone Corp. (Utilities)............ 94 855,446
Nissan Motor Co. Ltd. (Consumer Discretionary)............ 26,000 178,472
Nomura Securities Co. Ltd. (Finance)...................... 23,000 487,971
NTT DoCoMo, Inc. (Information Technology)................. 16 394,446
Pioneer Electronic Corp. (Industrial & Commercial)........ 12,000 371,718
Rohm Co. Ltd. (Information Technology).................... 1,800 453,815
Sankyo Co. Ltd. (Healthcare).............................. 7,000 154,287
Seven-Eleven Japan Co. Ltd. (Consumer Discretionary)...... 4,000 260,276
Shin-Etsu Chemical Co. Ltd. (Materials)................... 4,000 164,230
Shiseido Co. Ltd. (Consumer Staples)...................... 10,000 129,222
Softbank Corp. (Information Technology)................... 1,600 96,045
Sony Corp. (Information Technology)....................... 14,200 1,134,803
Sumitomo Bank Ltd. (Finance).............................. 34,000 412,867
</TABLE>
69
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
JAPAN (CONTINUED)
Sumitomo Corp. (Industrial & Commercial).................. 14,000 $ 123,173
Takeda Chemical Industries Ltd. (Healthcare).............. 15,700 1,034,532
TDK Corp. (Information & Entertainment)................... 1,700 171,379
Tokyo Electron Ltd. (Information Technology).............. 2,800 219,145
Toshiba Corp. (Information Technology).................... 151,000 1,079,412
Yamanouchi Pharmaceutical Co. Ltd. (Healthcare)........... 9,000 407,460
-------------
15,287,477
-------------
KOREA--0.6%
Korea Electric Power Corp. (Utilities).................... 5,000 111,648
Korea Telecom Corp. ADR (Information Technology).......... 10,280 379,075
Pohang Iron & Steel Co. Ltd. ADR (Materials).............. 1,451 22,944
Samsung Electronics (Information Technology).............. 1,470 184,154
-------------
697,821
-------------
LUXEMBOURG--0.0%
Societe Europeenne des Satellites (Information &
Entertainment).......................................... 260 34,640
-------------
MEXICO--1.0%
Fomento Economico Mexicano SA de CV (Multi-industry)...... 48,000 182,714
Grupo Iusacell SA de CV ADR+ (Information Technology)..... 4,000 52,000
Grupo Televisa SA de CV GDR+ (Information &
Entertainment).......................................... 9,400 508,775
Telefonos de Mexico SA ADR (Utilities).................... 8,030 433,118
-------------
1,176,607
-------------
NETHERLANDS--8.8%
ABN AMRO Holdings NV (Finance)............................ 29,030 672,532
Akzo Nobel NV (Materials)................................. 720 32,780
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
NETHERLANDS (CONTINUED)
ASM Lithography Holding NV+ (Information Technology)...... 11,160 $ 305,041
Buhrmann NV (Industrial & Commercial)..................... 34,102 931,835
CSM NV (Consumer Staples)................................. 2,980 68,025
Equant NV (Information Technology)........................ 900 30,130
Fortis NV (Finance)....................................... 25,140 768,017
Hagemeyer NV (Multi-industry)............................. 11,740 277,457
ING Groep NV (Finance).................................... 32,260 2,215,254
Koninklijke (Royal) Philips Electronics NV (Information
Technology)............................................. 45,469 1,786,872
Koninklijke Ahold NV (Consumer Discretionary)............. 35,848 1,041,298
Koninklijke KPN NV (Utilities)............................ 3,403 68,931
Koninklijke Numico NV (Consumer Staples).................. 8,270 386,688
Royal Dutch Petroleum Co. (Energy)........................ 7,350 435,919
STMicroelectronics NV (Information Technology)............ 5,406 272,729
STMicroelectronics NV NY Registry Shares (Information
Technology)............................................. 5,920 307,470
United Pan-Europe Communications NV Class A+ (Information
& Entertainment)........................................ 1,110 19,451
VNU NV (Information & Entertainment)...................... 13,640 642,407
Wolters Kluwer NV (Information & Entertainment)........... 8,437 189,874
-------------
10,452,710
-------------
NORWAY--0.2%
Orkla ASA, Class A (Multi-industry)....................... 7,910 142,788
Petroleum Geo-Services+ (Energy).......................... 7,010 96,700
-------------
239,488
-------------
POLAND--0.2%
Bank Polska Kesa Opicki SA (Finance)...................... USD 10,490 109,915
</TABLE>
70
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
POLAND (CONTINUED)
Telekomunikacja Polska SA ADR* (Information Technology)... USD 36,607 $ 180,421
-------------
290,336
-------------
PORTUGAL--0.0%
Jeronimo Martins SGPS SA (Consumer Staples)............... 3,628 34,974
-------------
SINGAPORE--0.7%
DBS Group Holdings Ltd. (Finance)......................... 29,000 341,798
Flextronics International Ltd.+ (Information
Technology)............................................. 2,900 110,200
Singapore Telecommunications Ltd. (Information
Technology)............................................. 39,000 64,619
United Overseas Bank Ltd. (Finance)....................... 37,512 277,661
-------------
794,278
-------------
SPAIN--3.2%
Banco Bilbao Vizcaya Argentaria SA (Finance).............. 72,870 970,849
Banco Santander Central Hispano SA (Finance).............. 33,769 327,256
Banco Popular Esp (Finance)............................... 21,800 652,107
Endesa SA (Utilities)..................................... 15,500 252,543
Repsol YPF SA (Energy).................................... 10,621 168,723
Tabacalera SA (Consumer Staples).......................... 37,650 563,914
Telefonica SA+ (Utilities)................................ 38,905 741,842
Telefonica SA ADR+ (Utilities)............................ 2,213 128,216
-------------
3,805,450
-------------
SWEDEN--1.9%
Atlas Copco AB, Class B (Industrial & Commercial)......... 1,430 29,552
Electrolux AB, Class B (Consumer Discretionary)........... 7,270 91,673
Ericsson LM Telecommunications Co., Class B (Information
Technology)............................................. 61,210 814,720
Hennes & Mauritz AB, Class B (Consumer Discretionary)..... 10,880 203,613
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
SWEDEN (CONTINUED)
Nordic Baltic Holding AB (Finance)........................ 6,860 $ 51,630
Nordic Baltic Holding AB+ (Finance)....................... 50,123 376,212
Sandvik AB, Class B (Consumer Discretionary).............. 1,720 37,955
Securitas AB, Series B (Consumer Discretionary)........... 29,214 622,738
-------------
2,228,093
-------------
SWITZERLAND--3.4%
ABB AG (Industrial & Commercial).......................... 1,665 147,966
ABB Ltd. (Industrial & Commercial)........................ 1,264 112,330
Adecco SA (Industrial & Commercial)....................... 380 262,762
Ares-Serono Group SA (Healthcare)......................... 180 161,916
Credit Suisse Group (Finance)............................. 1,304 244,464
Nestle SA (Consumer Staples).............................. 638 1,322,068
Roche Holdings AG (Healthcare)............................ 85 776,424
Schweizerische Rueckversicherungs-Gesellschaft
(Finance)............................................... 113 222,844
UBS AG+ (Finance)......................................... 3,512 486,475
Zurich Financial Services Group AG (Finance).............. 606 293,291
-------------
4,030,540
-------------
TAIWAN--0.0%
Hon Hai Precision Industry Co. Ltd. GDR* (Information
Technology)............................................. 5,299 55,346
-------------
TURKEY--0.1%
Yapive Kredi Bankasi (Finance)............................ 12,936,140 111,831
-------------
UNITED KINGDOM--19.6%
Abbey National PLC (Finance).............................. 7,000 96,590
AstraZeneca Group PLC (Healthcare)........................ 11,398 533,844
Autonomy Corp.+ (Information Technology).................. 1,000 51,073
Baltimore Technologies PLC+ (Information Technology)...... 6,000 46,184
Barclays PLC (Finance).................................... 29,340 839,497
</TABLE>
71
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
UNITED KINGDOM (CONTINUED)
BG Group PLC (Utilities).................................. 6,483 $ 25,962
BP Amoco PLC (Energy)..................................... 30,000 254,424
BP Amoco PLC ADR (Energy)................................. 8,000 407,500
British Aerospace PLC (Industrial & Commercial)........... 133,473 758,189
British Telecommunications PLC (Information Technology)... 45,040 528,034
Cable & Wireless PLC (Information Technology)............. 48,834 690,843
Cadbury Schweppes PLC (Consumer Staples).................. 28,000 173,069
Celltech Group PLC+ (Healthcare).......................... 31,130 618,802
Centrica PLC (Utilities).................................. 13,500 46,423
David S. Smith Holdings PLC (Materials)................... 10,000 22,054
Diageo PLC (Consumer Staples)............................. 37,996 358,622
Dimension Data Holdings PLC (Information Technology)...... 5,500 48,201
Electrocomponents PLC (Information Technology)............ 7,000 69,878
Energis PLC+ (Information Technology)..................... 25,590 218,880
GKN PLC (Consumer Discretionary).......................... 2,000 22,925
Glaxo Wellcome PLC (Healthcare)........................... 68,013 1,957,879
Granada Compass PLC (Multi-industry)...................... 78,770 678,890
Granada Media PLC (Information & Entertainment)........... 4,703 27,363
Hays PLC (Industrial & Commercial)........................ 39,400 215,092
Hilton Group PLC (Information & Entertainment)............ 10,000 27,786
HSBC Holdings PLC (Finance)............................... 40,800 567,611
Kingfisher PLC (Consumer Discretionary)................... 28,000 167,381
Lattice Group PLC+ (Energy)............................... 6,483 13,828
Logica PLC (Information Technology)....................... 19,440 575,130
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
--------------------------------------------------------------------------------------------
Marconi PLC (Information Technology)...................... 27,000 340,828
Reckitt Benckiser PLC (Consumer Staples).................. 79,380 $ 1,043,498
Reed International PLC (Information & Entertainment)...... 91,000 841,072
Rio Tinto PLC (Materials)................................. 22,000 355,918
Royal Bank of Scotland Group PLC (Finance)................ 113,090 2,538,439
Royal Bank of Scotland Group PLC+ (Finance)............... 47,200 55,815
Shell Transport & Trading Co. PLC (Energy)................ 255,470 2,055,387
SmithKline Beecham PLC (Healthcare)....................... 53,300 688,287
Standard Chartered PLC (Finance).......................... 20,000 288,449
Tesco PLC (Consumer Discretionary)........................ 56,800 216,543
Tomkins PLC (Multi-industry).............................. 58,744 139,785
Unilever PLC (Consumer Staples)........................... 28,214 190,869
United News & Media PLC (Information & Entertainment)..... 10,400 130,150
Vodafone AirTouch PLC (Information Technology)............ 906,380 3,771,082
WPP Group PLC (Information & Entertainment)............... 40,000 536,851
-------------
23,234,927
-------------
UNITED STATES--0.2%
Comverse Technology, Inc.+ (Information Technology)....... 1,600 178,800
-------------
TOTAL COMMON STOCK
(cost $98,357,516)........................................ 101,542,785
-------------
PREFERRED STOCK--1.6%
AUSTRALIA--0.6%
News Corp. Ltd.+ (Information & Entertainment)............ 40,188 360,384
News Corp. Ltd. ADR (Information & Entertainment)......... 11,022 398,859
-------------
759,243
-------------
BRAZIL--0.6%
Petroleo Brasileiros SA (Energy).......................... 13,790 365,590
Telecomunicacoes Brasileiras SA ADR (Information
Technology)............................................. 4,079 298,787
</TABLE>
72
<PAGE>
STYLE SELECT SERIES LOGO
International Equity Portfolio
-------------------------------------------
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
SHARES/ VALUE
SECURITY DESCRIPTION CONTRACTS (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK (CONTINUED)
BRAZIL (CONTINUED)
Telesp Celular Participacoes SA (Information
Technology)............................................. 1,330,808 $ 15,741
-------------
680,118
-------------
GERMANY--0.3%
Porsche AG (Consumer Discretionary)....................... 88 296,467
-------------
HUNGARY--0.1%
OTP Bank (Finance)........................................ 3,200 148,418
-------------
TOTAL PREFERRED STOCK
(cost $1,932,583)......................................... 1,884,246
-------------
RIGHTS--0.0%+
AUSTRALIA--0.0%
Telstra Corp. Ltd......................................... 10,000 32,635
BRAZIL--0.0%
Telesp Celular Participacoes SA ADR....................... 1 28
-------------
TOTAL RIGHTS
(cost $30,345)............................................ 32,663
-------------
PUT OPTIONS--0.4%(1)
UNITED STATES--0.4%
Currency Option Long Euro/Short USD
exp 11/00 @ $0.86....................................... 1,100 26,620
Japan Bank Basket Index
exp 3/01 @ $74.......................................... 30,347 138,947
Japan Bank Basket Index
exp 3/01 @ $79.......................................... 30,347 146,368
Nikkei 225 Index
exp 12/00 @ $154........................................ 354 4,550
Nikkei 225 Index
exp 12/00 @ $174........................................ 115 12
Nikkei 225 Index
exp 12/00 @ $156........................................ 108 948
Nikkei 225 Index
exp 12/00 @ 17,703 JPY.................................. 11 144
Nikkei 225 Index
exp 12/00 @ $157........................................ 107 761
Nikkei 225 Index
exp 12/00 @ $153........................................ 156 3,344
<CAPTION>
CONTRACTS/
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
--------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES (CONTINUED)
Nikkei 225 Index
exp 3/01 @ $148......................................... 333 $ 116,792
-------------
TOTAL PUT OPTIONS
(cost $1,129,482)......................................... 438,486
-------------
TOTAL INVESTMENT SECURITIES--87.6%
(cost $101,449,926)....................................... 103,898,180
-------------
SHORT-TERM SECURITIES--1.9%
Euro Time Deposit with State Street Bank & Trust Co. 4.75%
due 11/01/00............................................ $ 200 169,720
Cayman Island Time Deposit with State Street Bank & Trust
Co. 4.50% due 11/01/00.................................. 2,082 2,082,000
-------------
TOTAL SHORT-TERM SECURITIES
(cost $2,251,720)......................................... 2,251,720
-------------
REPURCHASE AGREEMENT--5.4%
Agreement with State Street Bank & Trust Co., bearing
5.25%, dated 10/31/00 to be repurchased 11/01/00 in the
amount of $6,436,000, collateralized by $6,595,000 U.S.
Treasury Bond 5.75% due 4/30/03 approximate aggregate
value $6,566,147
(cost $6,436,000)....................................... 6,436 6,436,000
-------------
TOTAL INVESTMENTS--
(cost $110,137,646)....................................... 94.9% 112,585,900
Other assets less liabilities--............................. 5.1 6,100,772
------------- -------------
NET ASSETS-- 100.0% $ 118,686,672
============= =============
</TABLE>
------------------
+ Non-income producing security
* Resale restricted to qualified institutional buyers
ADR ("American Depositary Receipt")
GDR ("Global Depositary Receipt")
JPY Japanese Yen
(1) 1 option contract equals 100 shares
(2) Fair valued security; See Note 2
See Notes to Financial Statements
73
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000
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 eleven 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 PORTFOLIO seeks long-term growth of capital through active
trading of equity securities selected on the basis of growth criteria, issued by
large-cap companies.
MID-CAP GROWTH PORTFOLIO seeks long-term growth of capital through active
trading of equity securities selected on the basis of growth criteria, issued by
mid-cap companies.
AGGRESSIVE GROWTH PORTFOLIO seeks long-term growth of capital through active
trading of equity securities selected on the basis of growth criteria, issued by
small-cap companies.
LARGE-CAP VALUE PORTFOLIO seeks long-term growth of capital through active
trading of equity securities selected on the basis of value criteria, issued by
large-cap companies.
VALUE PORTFOLIO seeks long-term growth of capital through active trading of
equity securities selected on the basis of value criteria, issued by large-cap
or mid-cap companies.
SMALL-CAP VALUE PORTFOLIO seeks long-term growth of capital through active
trading of equity securities selected on the basis of value criteria, issued by
small-cap companies.
FOCUS PORTFOLIO seeks long-term growth of capital through active trading of
equity securities without regard to market capitalization.
FOCUSED TECHNET PORTFOLIO seeks long-term growth of capital through active
trading of 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.
FOCUSED GROWTH AND INCOME PORTFOLIO seeks long-term growth of capital and
current income through active trading of equity securities selected to achieve a
blend of growth companies, value companies and companies that the advisers
believe have elements of growth and value, issued by large-cap companies. Each
adviser may emphasize either a growth orientation or a value orientation at any
particular time.
FOCUSED VALUE PORTFOLIO seeks long-term growth of capital through active trading
of equity securities selected on the basis of value criteria, without regard to
market capitalization.
INTERNATIONAL EQUITY PORTFOLIO seeks long-term growth of capital through active
trading of equity securities and other securities with equity characteristics of
non-U.S. issuers located in at least three countries other than the U.S. and
selected without regard to market capitalization at the time of purchase.
74
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
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.
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 C shares-- Offered at net asset value per share, without an initial
sales charge. However, redemptions made within the first
eighteen months of the date of purchase are subject to a
contingent deferred sales charge.
Class II shares-- Offered at net asset value per share plus an initial sales
charge. Certain redemptions made within the first eighteen
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, Class C 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, Class C 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
75
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
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 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 October 31, 2000, the Large-Cap Growth Portfolio, the Mid-Cap Growth
Portfolio, the Aggressive Growth Portfolio, the Focused TechNet Portfolio, and
the Focused Growth and Income Portfolio had a 1.5%, 3.3%, 5.9%, 5.7%, and 4.7%
undivided interest, respectively, which represented $3,286,000, $7,330,000,
$13,128,000 $12,498,000, and $10,434,000, 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, 6.30% dated 10/31/00, in
the principal amount of $220,932,000 repurchase price $220,970,663 due 11/01/00,
collateralized by $4,970,000 U.S. Treasury Note 6.13% due 8/31/02, $49,090,000
U.S. Treasury Note 4.88% due 3/31/01, $48,640,000 U.S. Treasury Note 5.63% due
2/28/01, $24,330,000 U.S. Treasury Note 4.50% due 1/31/01, $24,290,000 U.S.
Treasury Note 5.75% due 8/15/03, $24,245,000 U.S. Treasury Note 5.25% due
1/31/01, and $37,530,000 U.S. Treasury Note 8.50% due 2/15/20, approximate
aggregate value $225,382,714.
As of October 31, 2000, the Large-Cap Value Portfolio had a 0.3% undivided
interest which represented $950,000 in principal amount in a joint repurchase
agreement with SBC Warburg Dillon Read LLC. As of such date the repurchase
agreement in the joint account and the collateral therefore were as follows:
SBC Warburg Dillon Read LLC Repurchase Agreement, 6.56% dated 10/31/00, in the
principal amount of $330,075,000 repurchase price $330,135,147 due 11/01/00,
collateralized by $100,000,000 U.S. Treasury Bonds 8.75% due 11/15/08,
$100,000,000 U.S. Treasury Notes 7.00% due 7/15/06, and $117,805,000 U.S.
Treasury Notes 5.50% due 2/28/03; approximate aggregate value $336,677,081.
As of October 31, 2000, the Aggressive Growth Portfolio and the Focused TechNet
Portfolio had a 5.2% and a 4.0% undivided interest, respectively, which
represented $13,000,000 and $10,000,000, respectively, in principal amount
76
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
in a joint repurchase agreement with Paine Webber, Inc. As of such date the
repurchase agreement in the joint account and the collateral therefore were as
follows:
PaineWebber, Inc. Repurchase Agreement, 6.44% dated 10/31/00, in the principal
amount of $250,000,000 repurchase price $250,044,722 due 11/01/00,
collateralized by $150,000,000 U.S. Treasury Notes 6.88% due 5/15/06 and
$93,221,000 U.S. Treasury Notes 5.50% due 5/15/09; approximate aggregate value
$255,568,918.
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
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.
77
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
For the year ended October 31, 2000, 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.................................. $(1,973,550) $ 1,975,746 $ (2,196)
Mid-Cap Growth Portfolio.................................... (2,933,741) 2,942,745 (9,004)
Aggressive Growth Portfolio................................. (6,350,340) 6,359,343 (9,003)
Large-Cap Value Portfolio................................... 6,509 (2,718) (3,791)
Value Portfolio............................................. (190,308) 207,156 (16,848)
Small-Cap Value Portfolio................................... 67,058 (42,630) (24,428)
Focus Portfolio............................................. -- 20,327,638 (20,327,638)
Focused TechNet Portfolio................................... (122,866) 1,413,742 (1,290,876)
Focused Growth and Income Portfolio......................... (1,904,792) 1,906,988 (2,196)
Focused Value Portfolio..................................... (180,810) 214,668 (33,858)
International Equity Portfolio.............................. (237,810) 1,132,182 (894,372)
</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 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.
78
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NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
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 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 year ended October 31, 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...................... (2,450) (5,559,279) (28,229,898) (170,387)
Written options closed during the period............... 2,479 4,097,746 8,504,898 15,300
Written options expired during the period.............. -- -- 19,725,000 --
Net realized gain on written options closed............ -- 1,499,236 -- 155,087
------ ----------- ----------- ---------
Written option contracts as of 10/31/00................ -- $ -- -- $ --
====== =========== =========== =========
</TABLE>
79
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED
GROWTH AND INCOME FOCUS
PORTFOLIO 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 10/31/00................... -- $ -- -- $ --
====== ========= ==== ===========
</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, Large-Cap Value, Value, Small-Cap
Value, Focused Growth and Income and Focused Value Portfolios, respectively;
.85% of the average daily net assets of the Focus Portfolio; 1.25% of the
average daily net assets of the Focused TechNet Portfolio; and 1.10% of the
average daily net assets of the International Equity Portfolio.
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 Large-Cap Growth, Mid-Cap
Growth, Aggressive Growth, Focused TechNet 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.
80
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
Large-Cap Growth Portfolio
Janus Capital Corporation ("Janus")
Jennison Associates LLC ("Jennison")
SunAmerica
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")
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")
Focus Portfolio
Fred Alger Management, Inc. ("Alger")
Jennison
Marsico Capital Management, LLC ("Marsico")
Focused TechNet Portfolio
Dresdner RCM Global Investors
SunAmerica
Van Wagoner Capital Management
Focused Growth and Income Portfolio
Marsico
SunAmerica
Focused Value Portfolio
American Century
Third Avenue
Thornburg
International Equity Portfolio
T. Rowe Price International, Inc.
Bankers Trust Company ("BT")
Effective November 1, 1999, SunAmerica assumed the role as subadvisor of the
Mid-Cap Growth Portfolio from Wellington Management Co., LLP. Effective January
19, 2000, Fred Alger assumed the role as subadvisor of the Focus Portfolio from
Bramwell Capital Management, Inc. Effective February 1, 2000, Thornburg assumed
the role as subadvisor of the Large-Cap Value Portfolio from David L. Babson &
Co., Inc. Warburg Pincus Asset Management, Inc. changed their name to Credit
Suisse Asset Management, LLC. Effective May 1, 2000, SunAmerica Asset Management
Co. assumed the role of Large-Cap Growth Portfolio from Montag & Caldwell, Inc.
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 year
ended October 31, 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, .37%; Mid-Cap Growth Portfolio,
.35%; Aggressive Growth Portfolio, .34%; Large-Cap Value Portfolio, .43%; Value
Portfolio, .50%; Small-Cap Value Portfolio, .55%; Focus Portfolio, .40%; Focused
TechNet Portfolio, .48%; Focused Growth and Income Portfolio, .22%; Focused
Value Portfolio, .50%; and International Equity Portfolio, .61%. 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
81
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STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
Small-Cap Value Portfolio 1.78% for Class A shares and 2.43% for Class B shares
and Class II shares, respectively. Aggressive Growth Portfolio, Large-Cap Value
Portfolio, Value Portfolio, and Small-Cap Value Portfolio 1.21% for Class Z
shares. Focus Portfolio 2.20% for Class C shares. Focused TechNet Portfolio
1.97% for Class A shares, 2.62% for Class B, Class C, and Class II shares and
1.40% for Class Z shares. Focused Growth and Income Portfolio 1.45% for Class A
shares, 2.10% for Class B and Class II shares and 0.88% for Class Z shares.
Focused Value Portfolio 1.55% for Class A shares and 2.20% for Class B and Class
II shares. International Equity Portfolio 2.03% for Class A shares, 2.68% for
Class B and Class II shares and 1.46% for Class Z 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 October 31, 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......... $ 66,372 $ 8,369
Large-Cap Growth B......... 126,146 7,704
Large-Cap Growth II........ 42,877 16,427
Mid-Cap Growth A........... 55,129 641
Mid-Cap Growth B........... 96,631 --
Mid-Cap Growth II.......... 18,626 18,392
Aggressive Growth A........ 79,991 42,961
Aggressive Growth B........ 73,558 --
Aggressive Growth II....... 22,858 18,282
Aggressive Growth Z........ 745 50,523
Large-Cap Value A.......... 51,450 7,543
Large-Cap Value B.......... 105,121 --
Large-Cap Value II......... 39,015 17,789
Large-Cap Value Z.......... 1,376 53,677
Value A.................... 49,793 29,035
Value B.................... 78,980 --
Value II................... 12,145 20,901
Value Z.................... 203 51,481
Small-Cap Value A.......... 84,344 --
Small-Cap Value B.......... 125,932 222
Small-Cap Value II......... 43,552 10,344
Small-Cap Value Z.......... 1,012 50,250
<CAPTION>
MANAGEMENT OTHER
FEES EXPENSES
REIMBURSED REIMBURSED
---------- ----------
<S> <C> <C>
Focus A.................... $288,449 $44,156
Focus B.................... 458,369 24,692
Focus C.................... 1,869 13,886
Focus II................... 449,129 14,877
Focus Z.................... 8,678 11,473
Focused TechNet A.......... 89,982 --
Focused TechNet B.......... 73,436 --
Focused TechNet C.......... 14,166 --
Focused TechNet II......... 86,828 --
Focused TechNet Z.......... 12,774 --
Focused Growth and
Income A.................. 227,224 13,116
Focused Growth and
Income B.................. 321,640 17,354
Focused Growth and
Income II................. 186,441 28,528
Focused Growth and
Income Z.................. 1,778 --
Focused Value A............ 121,570 1,210
Focused Value B............ 76,729 13,947
Focused Value II........... 173,557 --
International Equity A..... 89,255 3,903
International Equity B..... 143,142 2,849
International Equity II.... 32,063 17,764
International Equity Z..... 334 49,707
</TABLE>
82
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
For the year ended October 31, 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......................... $ 9,919 $ 74,741
Large-Cap Growth Portfolio--Class B......................... 29,564 133,850
Large-Cap Growth Portfolio--Class II........................ 13,417 59,304
Mid-Cap Growth Portfolio--Class A........................... 18,053 55,770
Mid-Cap Growth Portfolio--Class B........................... 31,356 96,631
Mid-Cap Growth Portfolio--Class II.......................... 8,986 37,018
Aggressive Growth Portfolio--Class A........................ 62,493 122,952
Aggressive Growth Portfolio--Class B........................ 116,053 73,558
Aggressive Growth Portfolio--Class II....................... 27,077 41,140
Value Portfolio--Class A.................................... 1,783 78,828
Value Portfolio--Class B.................................... 4,546 78,980
International Equity Portfolio--Class A..................... 4,563 93,158
International Equity Portfolio--Class B..................... 6,067 145,991
International Equity Portfolio--Class II.................... 113 49,827
</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", "Class C
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, Class C Plan, and Class II Plan, the
Distributor receives payments from a Portfolio at an annual rate of up to 0.10%,
0.75%, 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 year ended October 31,
2000, SACS received fees (see Statement of Operations) based upon the
aforementioned rates.
83
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (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, Class C and Class II shares. SACS has advised the
Portfolios that for the year ended October 31, 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 CLASS C
----------------------------------------------- ------------- ------------
CONTINGENT CONTINGENT
AFFILIATED NON-AFFILIATED DEFERRED DEFERRED
SALES CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES SALES CHARGE
------------- -------------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Large-Cap Growth Portfolio.............. $ 322,232 $ 154,120 $ 121,579 $ 118,365 $ --
Mid-Cap Growth Portfolio................ 304,533 164,367 92,430 144,584 --
Aggressive Growth Portfolio............. 1,530,781 853,222 451,536 254,562 --
Large-Cap Value Portfolio............... 147,823 66,987 57,311 115,689 --
Value Portfolio......................... 226,376 107,024 85,360 326,284 --
Small-Cap Value Portfolio............... 111,286 45,514 39,073 99,822 --
Focus Portfolio......................... 8,469,185 2,379,036 5,054,322 1,017,230 356
Focused TechNet Portfolio............... 3,596,404 891,882 2,430,800 57,569 15
Focused Growth & Income Portfolio....... 1,174,057 541,224 487,288 120,069 --
Focused Value Portfolio................. 743,264 274,175 359,867 32,526 --
International Equity Portfolio.......... 211,706 115,896 60,338 120,560 --
</TABLE>
<TABLE>
<CAPTION>
CLASS II
---------------------------------------------------------------
CONTINGENT
AFFILIATED NON-AFFILIATED DEFERRED
SALES CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Large-Cap Growth Portfolio.............. $ 151,626 $ 53,704 $ 97,922 $ 10,648
Mid-Cap Growth Portfolio................ 147,052 57,498 89,554 8,398
Aggressive Growth Portfolio............. 942,502 211,880 730,622 31,193
Large-Cap Value Portfolio............... 106,222 36,018 70,204 7,233
Value Portfolio......................... 54,400 19,259 35,141 4,775
Small-Cap Value Portfolio............... 62,631 19,997 42,634 5,690
Focus Portfolio......................... 6,169,053 1,318,097 4,850,956 319,233
Focused TechNet Portfolio............... 794,686 225,256 569,430 17,778
Focused Growth & Income Portfolio....... 500,228 262,875 237,353 24,016
Focused Value Portfolio................. 616,547 154,050 462,497 25,873
International Equity Portfolio.......... 109,270 57,721 51,549 9,126
</TABLE>
84
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (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 year ended October 31, 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 AT
EXPENSE OCTOBER 31, 2000
---------------------------------------------- -------------------------------------------
CLASS A CLASS B CLASS C CLASS II CLASS A CLASS B CLASS C CLASS II
--------- ---------- -------- ---------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Large-Cap Growth Portfolio.... $ 76,484 $ 134,858 $ -- $ 62,692 $ 6,428 $ 11,026 $ -- $ 5,992
Mid-Cap Growth Portfolio...... 118,014 204,704 -- 54,619 10,774 17,868 -- 5,457
Aggressive Growth Portfolio... 334,554 477,597 -- 134,433 29,829 41,508 -- 13,605
Large-Cap Value Portfolio..... 35,974 68,344 -- 32,818 3,377 6,019 -- 3,463
Value Portfolio............... 115,339 182,618 -- 29,219 9,146 14,152 -- 2,569
Small-Cap Value Portfolio..... 34,271 47,851 -- 20,993 3,029 4,038 -- 2,143
Focus Portfolio............... 745,532 1,216,071 2,039 1,429,857 73,993 119,441 993 147,865
Focused TechNet Portfolio..... 66,177 51,868 394 62,064 16,081 12,804 115 15,651
Focused Growth and Income
Portfolio................... 118,664 160,661 -- 111,952 11,755 15,692 -- 13,027
Focused Value Portfolio....... 53,491 33,761 -- 76,375 6,920 5,506 -- 12,356
International Equity
Portfolio................... 82,262 122,262 -- 39,985 7,137 9,201 -- 3,721
</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 year ended October 31, 2000 were as follows:
<TABLE>
<CAPTION>
LARGE-CAP MID-CAP GROWTH AGGRESSIVE GROWTH LARGE-CAP VALUE
GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO VALUE PORTFOLIO
---------------- -------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Purchases (excluding
U.S.
government
securities)............ $111,942,808 $288,070,744 $602,290,428 $64,647,433 $137,792,227
Sales (excluding U.S.
government
securities)............ 95,649,313 241,570,503 514,623,255 57,098,804 173,290,742
<CAPTION>
SMALL-CAP VALUE
PORTFOLIO
---------------
<S> <C>
Purchases (excluding
U.S.
government
securities)............ $31,213,964
Sales (excluding U.S.
government
securities)............ 30,116,636
</TABLE>
<TABLE>
<CAPTION>
FOCUSED GROWTH
FOCUSED TECHNET AND INCOME FOCUSED VALUE INTERNATIONAL
FOCUS PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO EQUITY PORTFOLIO
--------------- --------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Purchases (excluding U.S.
government securities)... $4,266,126,198 $462,932,705 $296,565,312 $267,023,025 $111,721,898
Sales (excluding U.S.
government securities)... 3,193,075,486 252,631,395 193,108,356 151,395,666 92,642,145
</TABLE>
85
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
NOTE 5. TRANSACTIONS WITH AFFILIATES
The following Portfolios incurred brokerage commissions with affiliated brokers:
<TABLE>
<CAPTION>
FOCUSED GROWTH INTERNATIONAL
MID-CAP GROWTH VALUE SMALL-CAP FOCUS AND INCOME FOCUSED VALUE EQUITY
PORTFOLIO PORTFOLIO VALUE PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- --------- --------------- ---------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Montgomery
Securities, Inc...... -- -- -- 13,023 18,153 -- --
M.J. Whitman.......... -- -- 8,528 -- -- 112,786 --
Morgan Stanley Dean
Witter & Co.......... 6,015 -- -- -- -- -- --
J.P. Morgan
Securities, Inc...... -- 1,120 -- -- -- 5,460 --
Neuberger & Berman
Management, Inc...... -- 59,319 -- -- -- -- --
Shelby Cullom Davis &
Co., L.P............. -- 360 -- -- -- -- --
Deutsche Bank Group... -- -- -- -- -- -- 537
Deutsche Morgan
Grenfell............. -- -- -- -- -- -- 4,109
Jardine Fleming
Securities Ltd....... -- -- -- -- -- -- 1,634
Robert Fleming
Securities Ltd....... -- -- -- -- -- -- 1,037
Fred Alger &
Co., Inc............. -- -- -- 1,274,468 -- -- --
Prudential
Securities, Inc...... -- -- -- 2,400 -- -- --
</TABLE>
As disclosed in the investment portfolios, certain portfolios own securities
issued by American International Group, Inc. ("AIG") or an affiliate thereof.
Effective January 1, 1999, SunAmerica, the investment adviser, became a wholly
owned subsidiary of AIG. For the year ended October 31, 2000 the following
portfolios recorded realized gains/losses and income on security transactions of
AIG and subsidiaries of AIG as follows:
<TABLE>
<CAPTION>
REALIZED
SECURITY GAIN/LOSS INCOME
----------------------------------------- --------- --------
<S> <C> <C> <C>
Large-Cap Growth Portfolio American International Group, Inc. $60,003 $3,150
Mid-Cap Growth Portfolio Crown Castle International Corp. 14,262 --
Large-Cap Value Portfolio American International Group, Inc. 23 193
Large-Cap Value Portfolio Transatlantic Holdings, Inc. -- 2,754
Value Portfolio Transatlantic Holdings, Inc. 33,000 6,825
Value Portfolio American International Group, Inc. -- 854
</TABLE>
During the year ended October 31, 2000 the Mid-Cap Growth Portfolio invested in
the T. Rowe Price Reserve Investment Fund, an open-end management investment
company managed by T. Rowe Price Associates, Inc. The fund pays no investment
management fees and was utilized as a cash management option. Distributions from
the fund totaled $158,852 and are reflected as interest income in the
accompanying Statement of Operations.
86
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
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 provisions are 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>
LARGE-CAP GROWTH MID-CAP GROWTH AGGRESSIVE GROWTH LARGE-CAP VALUE SMALL-CAP VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO VALUE PORTFOLIO PORTFOLIO
---------------- -------------- ----------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Cost................. $110,987,090 $172,226,264 $393,555,475 $67,453,766 $136,861,665 $49,690,107
============ ============ ============ =========== ============ ===========
Appreciation......... $ 23,037,864 $ 33,124,011 $102,638,475 $11,726,457 $ 19,047,121 $ 7,229,459
Depreciation......... (4,192,293) (11,822,678) (28,437,987) (4,205,840) (8,886,614) (4,781,315)
------------ ------------ ------------ ----------- ------------ -----------
Net unrealized
appreciation........ $ 18,845,571 $ 21,301,333 $ 74,200,488 $ 7,520,617 $ 10,160,507 $ 2,448,144
============ ============ ============ =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
FOCUSED GROWTH
FOCUSED TECHNET AND INCOME FOCUSED VALUE INTERNATIONAL
FOCUS PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO EQUITY PORTFOLIO
--------------- --------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Cost...................... $1,900,717,703 $247,377,908 $203,510,141 $131,079,145 $111,268,235
============== ============ ============ ============ ============
Appreciation.............. $ 128,227,197 $ 22,221,672 $ 22,616,987 $ 20,503,589 $ 7,710,831
Depreciation.............. (81,014,581) (18,570,827) (7,699,086) (4,473,583) (6,393,166)
-------------- ------------ ------------ ------------ ------------
Net unrealized
appreciation............. $ 47,212,616 $ 3,650,845 $ 14,917,901 $ 16,030,006 $ 1,317,665
============== ============ ============ ============ ============
</TABLE>
At October 31, 2000 Small-Cap Value Portfolio had a capital loss carryforward of
$32,801 which will expire 2007, which is available to the extent provided in
regulations.
Small-Cap Value Portfolio and International Equity Portfolio utilized capital
loss carryforwards of $2,329,926 and $1,540,956, respectively, to offset net
taxable gains realized and recognized in the year ended October 31, 2000.
NOTE 7. OPEN FORWARD CURRENCY CONTRACTS
At October 31, 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 October 31, 2000.
<TABLE>
<CAPTION>
GROSS
CONTRACT IN DELIVERY UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION
---------------- ---------------- -------- ------------
<S> <C> <C> <C> <C> <C>
USD 1,100,000 CHF 1,974,566 11/16/00 $ 213
USD 1,063,227 EUR 1,279,070 11/16/00 23,676
JPY 128,646,000 USD 1,200,000 11/16/00 17,517
JPY 260,748,000 USD 2,434,622 11/16/00 37,890
-------
79,296
-------
</TABLE>
<TABLE>
<CAPTION>
GROSS
CONTRACT IN DELIVERY UNREALIZED
TO DELIVER EXCHANGE FOR DATE DEPRECIATION
---------------- ---------------- -------- ------------
<S> <C> <C> <C> <C> <C>
USD 1,100,000 CHF 1,924,549 11/16/00 (27,656)
USD 1,100,000 CHF 1,924,808 11/16/00 (27,512)
USD 1,100,000 CHF 1,933,239 11/16/00 (22,814)
--------
(77,982)
--------
$ 1,314
========
</TABLE>
87
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (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
-----------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.............. 2,804,568 $ 59,379,497 955,893 $ 15,603,668
Reinvested dividends..... 42,096 809,498 -- --
Shares redeemed.......... (2,584,228) (54,679,854) (465,782) (7,597,190)
---------- ------------ ---------- ------------
Net increase............. 262,436 $ 5,509,141 490,111 $ 8,006,478
========== ============ ========== ============
<CAPTION>
LARGE-CAP GROWTH PORTFOLIO
----------------------------------------------------
CLASS B
----------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.............. 704,144 $ 14,272,142 1,567,411 $ 25,184,736
Reinvested dividends..... 72,124 1,366,039 -- --
Shares redeemed.......... (572,227) (11,573,383) (609,744) (9,947,519)
--------- ------------ ---------- ------------
Net increase............. 204,041 $ 4,064,798 957,667 $ 15,237,217
========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------
CLASS II
-----------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold................................................. 841,576 $ 17,099,316 777,065 $ 12,563,735
Reinvested dividends........................................ 28,191 533,653 -- --
Shares redeemed............................................. (224,662) (4,522,031) (275,945) (4,558,883)
---------- ------------ ---------- ------------
Net increase................................................ 645,105 $ 13,110,938 501,120 $ 8,004,852
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
MID-CAP GROWTH PORTFOLIO
--------------------------------------------------------------------------------
CLASS A CLASS B
----------------------------------------------------- ------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
------------------------- ------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.............. 3,942,691 $ 85,479,859 2,253,520 $ 37,907,454 1,038,210 $ 22,123,768
Reinvested dividends..... 242,595 4,397,870 87,640 1,288,306 417,359 7,395,601
Shares redeemed.......... (3,644,967) (78,982,006) (2,394,645) (40,438,565) (845,515) (17,852,401)
---------- ------------ ---------- ------------ --------- ------------
Net increase
(decrease).............. 540,319 $ 10,895,723 (53,485) $ (1,242,805) 610,054 $ 11,666,968
========== ============ ========== ============ ========= ============
<CAPTION>
MID-CAP GROWTH PORTFOLIO
-------------------------
CLASS B
-------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
-------------------------
SHARES AMOUNT
---------- ------------
<S> <C> <C>
Shares sold.............. 1,525,775 $ 25,350,060
Reinvested dividends..... 152,206 2,206,988
Shares redeemed.......... (1,782,873) (29,720,800)
---------- ------------
Net increase
(decrease).............. (104,892) $ (2,163,752)
========== ============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------
CLASS II
-----------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold................................................. 1,286,559 $ 27,322,308 1,398,691 $ 23,421,973
Reinvested dividends........................................ 70,909 1,257,930 17,899 259,890
Shares redeemed............................................. (589,861) (12,651,626) (1,322,303) (22,084,456)
---------- ------------ ---------- ------------
Net increase................................................ 767,607 $ 15,928,612 94,287 $ 1,597,407
========== ============ ========== ============
</TABLE>
88
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
------------------------------------------------------
CLASS A
------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold............. 5,545,038 $182,577,264 1,873,821 $ 43,092,613
Reinvested dividends.... 357,444 10,308,675 -- --
Shares redeemed......... (4,529,052) (147,881,704) (1,416,599) (32,954,142)
---------- ------------ ---------- ------------
Net increase............ 1,373,430 $ 45,004,235 457,222 $ 10,138,471
========== ============ ========== ============
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
-----------------------------------------------------
CLASS B
-----------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold............. 2,303,977 $ 75,001,611 1,874,991 $ 42,043,794
Reinvested dividends.... 575,071 16,205,493 -- --
Shares redeemed......... (1,174,949) (38,191,105) (991,014) (21,938,947)
---------- ------------ ---------- ------------
Net increase............ 1,704,099 $ 53,015,999 883,977 $ 20,104,847
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
CLASS II CLASS Z
----------------------------------------------------- ------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
------------------------- ------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.............. 2,105,072 $ 69,292,822 501,298 $ 11,537,832 95,589 $ 3,429,275
Reinvested dividends..... 98,653 2,779,056 -- -- 2,769 80,760
Shares redeemed.......... (846,194) (27,683,232) (160,336) (3,624,140) (19,894) (742,594)
---------- ------------ ---------- ------------ --------- ------------
Net increase............. 1,357,531 $ 44,388,646 340,962 $ 7,913,692 78,464 $ 2,767,441
========== ============ ========== ============ ========= ============
<CAPTION>
-------------------------
CLASS Z
-------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
-------------------------
SHARES AMOUNT
---------- ------------
<S> <C> <C>
Shares sold.............. 8,549 $ 197,777
Reinvested dividends..... -- --
Shares redeemed.......... (5,745) (135,199)
---------- ------------
Net increase............. 2,804 $ 62,578
========== ============
</TABLE>
<TABLE>
<CAPTION>
LARGE-CAP VALUE PORTFOLIO
-----------------------------------------------------
CLASS A
-----------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.............. 556,939 $ 8,129,946 536,741 $ 7,416,875
Reinvested dividends..... 24,508 329,881 5,994 75,283
Shares redeemed.......... (477,580) (6,819,039) (430,408) (5,856,941)
---------- ------------ ---------- ------------
Net increase
(decrease).............. 103,867 $ 1,640,788 112,327 $ 1,635,217
========== ============ ========== ============
<CAPTION>
LARGE-CAP VALUE PORTFOLIO
----------------------------------------------------
CLASS B
----------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.............. 768,185 $ 10,929,493 1,078,720 $ 14,841,980
Reinvested dividends..... 46,586 618,192 13,092 163,267
Shares redeemed.......... (861,484) (11,982,165) (1,076,085) (14,521,640)
--------- ------------ ---------- ------------
Net increase
(decrease).............. (46,713) $ (434,480) 15,727 $ 483,607
========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
CLASS II CLASS Z
----------------------------------------------------- ------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
------------------------- ------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.............. 827,329 $ 11,862,060 545,700 $ 7,541,736 41,436 $ 595,526
Reinvested dividends..... 18,802 249,512 2,238 27,906 388 5,291
Shares redeemed.......... (334,155) (4,681,716) (244,591) (3,332,709) (2,498) (36,767)
---------- ------------ ---------- ------------ --------- ------------
Net increase............. 511,976 $ 7,429,856 303,347 $ 4,236,933 39,326 $ 564,050
========== ============ ========== ============ ========= ============
<CAPTION>
-------------------------
CLASS Z
-------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
-------------------------
SHARES AMOUNT
---------- ------------
<S> <C> <C>
Shares sold.............. 4,036 $ 55,588
Reinvested dividends..... 95 1,202
Shares redeemed.......... (3,535) (48,567)
---------- ------------
Net increase............. 596 $ 8,223
========== ============
</TABLE>
89
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE PORTFOLIO
-----------------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------------------------ --------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
-------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.......... 1,102,909 $ 18,735,808 776,261 $ 12,767,145 603,050 $ 9,938,468
Reinvested
dividends........... 154,190 2,470,123 -- -- 234,181 3,676,670
Shares redeemed...... (1,809,586) (30,432,940) (2,036,821) (33,086,307) (2,018,900) (32,978,283)
---------- ------------ ---------- ------------ ----------- ------------
Net (decrease)....... (552,487) $ (9,227,009) (1,260,560) $(20,319,162) (1,181,669) $(19,363,145)
========== ============ ========== ============ =========== ============
<CAPTION>
VALUE PORTFOLIO
--------------------------
CLASS B
--------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
--------------------------
SHARES AMOUNT
---------- -------------
<S> <C> <C>
Shares sold.......... 796,331 $ 12,955,414
Reinvested
dividends........... -- --
Shares redeemed...... (2,534,120) (40,681,427)
---------- ------------
Net (decrease)....... (1,737,789) $(27,726,013)
========== ============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
CLASS II CLASS Z
------------------------------------------------------ --------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
-------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.......... 381,927 $ 6,341,806 279,729 $ 4,561,264 24,322 $ 402,385
Reinvested
dividends........... 30,627 480,839 -- -- 209 3,372
Shares redeemed...... (351,968) (5,785,937) (524,232) (8,403,002) (9,275) (157,613)
---------- ------------ ---------- ------------ ----------- ------------
Net increase
(decrease).......... 60,586 $ 1,036,708 (244,503) $ (3,841,738) 15,256 $ 248,144
========== ============ ========== ============ =========== ============
<CAPTION>
--------------------------
CLASS Z
--------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
--------------------------
SHARES AMOUNT
---------- -------------
<S> <C> <C>
Shares sold.......... 8,388 $ 140,517
Reinvested
dividends........... -- --
Shares redeemed...... (10,723) (178,870)
---------- ------------
Net increase
(decrease).......... (2,335) $ (38,353)
========== ============
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP VALUE PORTFOLIO
-----------------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------------------------ --------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
-------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.......... 568,851 $ 7,368,683 705,389 $ 8,247,647 408,116 $ 5,138,586
Reinvested
dividends........... -- -- -- -- -- --
Shares redeemed...... (656,697) (8,296,523) (774,635) (8,912,260) (710,527) (8,765,164)
---------- ------------ ---------- ------------ ----------- ------------
Net (decrease)....... (87,846) $ (927,840) (69,246) $ (664,613) (302,411) $ (3,626,578)
========== ============ ========== ============ =========== ============
<CAPTION>
SMALL-CAP VALUE PORTFOLIO
--------------------------
CLASS B
--------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
--------------------------
SHARES AMOUNT
---------- -------------
<S> <C> <C>
Shares sold.......... 632,998 $ 7,307,720
Reinvested
dividends........... -- --
Shares redeemed...... (1,092,801) (12,274,195)
---------- ------------
Net (decrease)....... (459,803) $ (4,966,475)
========== ============
</TABLE>
<TABLE>
<CAPTION>
CLASS II CLASS Z
------------------------------------------------------ --------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
-----------------------------------------------------------------------------------
-------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.......... 487,782 $ 6,134,037 315,861 $ 3,656,054 25,521 $ 321,270
Reinvested
dividends........... -- -- -- -- -- --
Shares redeemed...... (220,774) (2,740,732) (245,438) (2,763,551) (3,377) (42,612)
---------- ------------ ---------- ------------ ----------- ------------
Net increase
(decrease).......... 267,008 $ 3,393,305 70,423 $ 892,503 22,144 $ 278,658
========== ============ ========== ============ =========== ============
<CAPTION>
CLASS Z
--------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
--------------------------
--------------------------
SHARES AMOUNT
---------- -------------
<S> <C> <C>
Shares sold.......... 8,751 $ 103,187
Reinvested
dividends........... -- --
Shares redeemed...... (15,186) (176,844)
---------- ------------
Net increase
(decrease).......... (6,435) $ (73,657)
========== ============
</TABLE>
90
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUS PORTFOLIO
-------------------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------------------------- ---------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
-------------------------- -------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.......... 18,005,084 $426,827,712 8,710,962 $145,884,519 19,471,011 $457,788,336
Reinvested
dividends........... 39,548 862,514 -- -- 61,872 1,335,219
Shares redeemed...... (8,171,245) (193,676,077) (2,248,697) (38,707,010) (3,457,019) (80,320,988)
---------- ------------ ---------- ------------ ----------- ------------
Net increase......... 9,873,387 $234,014,149 6,462,265 $107,177,509 16,075,864 $378,802,567
========== ============ ========== ============ =========== ============
<CAPTION>
FOCUS PORTFOLIO
--------------------------
CLASS B
--------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
--------------------------
SHARES AMOUNT
---------- -------------
<S> <C> <C>
Shares sold.......... 12,231,833 $205,304,812
Reinvested
dividends........... -- --
Shares redeemed...... (1,628,171) (27,561,380)
---------- ------------
Net increase......... 10,603,662 $177,743,432
========== ============
</TABLE>
<TABLE>
<CAPTION>
CLASS C CLASS II
-------------------------- --------------------------------------------------------
FOR THE PERIOD
MAY 22, 2000* FOR THE YEAR FOR THE YEAR
THROUGH ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------------------------------------------------------------------
-------------------------- -------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold............................... 296,208 $ 6,879,245 26,885,898 $633,273,683 12,102,392 $206,502,140
Reinvested dividends...................... -- -- 67,304 1,452,430 -- --
Shares redeemed........................... (3,551) (78,522) (3,164,874) (73,834,970) (1,192,191) (20,360,820)
---------- ------------ ---------- ------------ ----------- ------------
Net increase.............................. 292,657 $ 6,800,723 23,788,328 $560,891,143 10,910,201 $186,141,320
========== ============ ========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
CLASS Z
-------------------------------------------------------
FOR THE PERIOD
FOR THE YEAR JULY 7, 1999*
ENDED THROUGH
OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------------------------------------
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold................................................. 572,575 $ 13,739,145 148,210 $ 2,689,926
Reinvested dividends........................................ 699 15,284 -- --
Shares redeemed............................................. (124,899) (3,004,863) (17,328) (313,076)
---------- ------------ ---------- ------------
Net increase................................................ 448,375 $ 10,749,566 130,882 $ 2,376,850
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
FOCUSED TECHNET PORTFOLIO
-------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
-------------------------- -------------------------- ---------------------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
NOVEMBER 22, 2000+ NOVEMBER 22, 2000+ NOVEMBER 22, 2000+
THROUGH THROUGH THROUGH
OCTOBER 31, 2000 OCTOBER 31, 2000 OCTOBER 31, 2000
-------------------------- -------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.......... 7,326,454 $110,309,780 4,931,194 $ 76,421,481 40,826 $ 657,716
Reinvested
dividends........... -- -- -- -- -- --
Shares redeemed...... (1,568,216) (22,836,318) (400,798) (6,608,778) (83) (1,471)
---------- ------------ ---------- ------------ ----------- ------------
Net increase......... 5,758,238 $ 87,473,462 4,530,396 $ 69,812,703 40,743 $ 656,245
========== ============ ========== ============ =========== ============
<CAPTION>
FOCUSED TECHNET PORTFOLIO
--------------------------
CLASS II
--------------------------
FOR THE PERIOD
NOVEMBER 22, 2000+
THROUGH
OCTOBER 31, 2000
--------------------------
SHARES AMOUNT
---------- -------------
<S> <C> <C>
Shares sold.......... 5,819,616 $ 90,242,786
Reinvested
dividends........... -- --
Shares redeemed...... (255,305) (4,396,349)
---------- ------------
Net increase......... 5,564,311 $ 85,846,437
========== ============
</TABLE>
<TABLE>
<CAPTION>
--------------------------
CLASS Z
--------------------------
FOR THE PERIOD
OCTOBER 3, 2000+
THROUGH
OCTOBER 31, 2000
--------------------------
SHARES AMOUNT
---------- -------------
<S> <C> <C>
Shares sold................................................. 36,259 $ 593,958
Reinvested dividends -- --
Shares redeemed............................................. -- --
---------- ------------
Net increase................................................ 36,259 $ 593,958
========== ============
</TABLE>
* Inception of the class
+ Commencement of Operations
91
<PAGE>
STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED GROWTH AND INCOME PORTFOLIO
------------------------------------------------------
CLASS A
------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.......... 2,116,227 $ 43,520,419 1,462,757 $ 22,261,103
Reinvested
dividends........... 91,821 1,747,359 9,306 124,043
Shares redeemed...... (733,050) (14,997,895) (512,978) (7,527,895)
---------- ------------ ---------- ------------
Net increase......... 1,474,998 $ 30,269,883 959,085 $ 14,857,251
========== ============ ========== ============
<CAPTION>
FOCUSED GROWTH AND INCOME PORTFOLIO
-------------------------------------------------------
CLASS B
-------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Shares sold.......... 2,524,895 $ 50,860,112 1,480,395 $ 22,219,188
Reinvested
dividends........... 121,779 2,284,575 15,408 203,845
Shares redeemed...... (626,635) (12,724,654) (397,068) (5,800,382)
----------- ------------ ---------- ------------
Net increase......... 2,020,039 $ 40,420,033 1,098,735 $ 16,622,651
=========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------ --------------------------
CLASS II CLASS Z
------------------------------------------------------ --------------------------
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR OCTOBER 6, 2000*
ENDED ENDED THROUGH
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
-------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold................................. 2,977,189 $ 59,987,795 897,015 $ 13,510,938 7,584 $ 152,790
Reinvested dividends........................ 64,681 1,212,773 2,151 28,463 -- --
Shares redeemed............................. (313,196) (6,383,718) (166,400) (2,504,119) -- --
---------- ------------ ---------- ------------ ----------- ------------
Net increase................................ 2,728,674 $ 54,816,850 732,766 $ 11,035,282 7,584 $ 152,790
========== ============ ========== ============ =========== ============
</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
OCTOBER 31, 2000 OCTOBER 31, 2000 OCTOBER 31, 2000
-------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold................................. 5,249,740 $ 68,479,702 2,358,269 $ 32,618,822 5,059,920 $ 69,595,122
Reinvested dividends........................ -- -- -- -- -- --
Shares redeemed............................. (2,743,067) (35,569,174) (290,502) (4,053,127) (512,566) (7,030,051)
---------- ------------ ---------- ------------ ----------- ------------
Net increase................................ 2,506,673 $ 32,910,528 2,067,767 $ 28,565,695 4,547,354 $ 62,565,071
========== ============ ========== ============ =========== ============
</TABLE>
* Inception of the class
+ Commencement of Operations
92
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STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
------------------------------------------------------
CLASS A
------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold.......... 6,149,041 $ 96,185,547 4,614,050 $ 60,501,869
Reinvested
dividends........... -- -- 7,841 98,642
Shares redeemed...... (4,806,733) (76,536,241) (4,890,684) (64,497,428)
---------- ------------ ---------- ------------
Net increase
(decrease).......... 1,342,308 $ 19,649,306 (268,793) $ (3,896,917)
========== ============ ========== ============
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
-------------------------------------------------------
CLASS B
-------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Shares sold.......... 1,133,381 $ 18,369,928 718,626 $ 9,458,419
Reinvested
dividends........... -- -- 14,042 174,265
Shares redeemed...... (1,044,328) (16,623,900) (1,310,103) (17,143,968)
----------- ------------ ---------- ------------
Net increase
(decrease).......... 89,053 $ 1,746,028 (577,435) $ (7,511,284)
=========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
CLASS II CLASS Z
------------------------------------------------------ --------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000
-------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.......... 1,949,230 $ 31,458,903 795,257 $ 10,419,003 21,939 $ 387,378
Reinvested
dividends........... -- -- 2,040 25,318 -- --
Shares redeemed...... (1,339,455) (21,658,923) (621,680) (8,112,814) (1,439) (23,968)
---------- ------------ ---------- ------------ ----------- ------------
Net increase
(decrease).......... 609,775 $ 9,799,980 175,617 $ 2,331,507 20,500 $ 363,410
========== ============ ========== ============ =========== ============
<CAPTION>
--------------------------
CLASS Z
--------------------------
FOR THE YEAR
ENDED
OCTOBER 31, 1999
--------------------------
SHARES AMOUNT
---------- -------------
<S> <C> <C>
Shares sold.......... 2,994 $ 39,173
Reinvested
dividends........... 46 586
Shares redeemed...... (12,643) (167,116)
---------- ------------
Net increase
(decrease).......... (9,603) $ (127,357)
========== ============
</TABLE>
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 Director 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 October 31, 2000, Large-Cap Growth Portfolio, Mid-Cap
Growth Portfolio, Aggressive Growth Portfolio, Large-Cap Value Portfolio, Value
Portfolio, Small-Cap Value Portfolio, Focus Portfolio, Focused TechNet
Portfolio, Focused Growth and Income Portfolio, Focused Value Portfolio, and
International Equity Portfolio had accrued $ 4,268, $ 8,167, $14,140, $ 3,146, $
15,182, $ 3,153, $ 17,710 , $ 0, $3,505, $667, and $10,063, respectively, for
the Retirement Plan, which is included in accrued expenses on the Statement of
Assets and Liabilities, and as of October 31, 2000 expensed $1,905, $ 2,599,
$5,502, $ 1,161, $3,583, $ 958, $ 13,916, $ 0, $1,743, $1,893, and $2,973,
respectively, for the Retirement Plan, which is included in Directors' fees and
expenses on the Statement of Operations.
93
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STYLE SELECT SERIES LOGO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2000 -- (CONTINUED)
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 currently 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
annum for the daily unused portion of the $25,000,000 committed line of credit
which is included in miscellaneous expenses on the Statement of Operations.
Borrowings under the line of credit will commence when the Fund's cash shortfall
exceeds $100,000. The funds did not utilize the line of credit during the fiscal
year October 31, 2000.
NOTE 11. SUBSEQUENT EVENTS
Effective for purchases made on or after December 6, 2000, the maximum
contingent deferred sales charge on Class B shares will change from 4% to 5%. In
addition, Class B shares will convert to Class A shares eight years from the
date of purchase rather than seven years from the date of purchase.
Effective December 1, 2000, the sales of Class C shares in the Focus and Focused
TechNet portfolios were suspended and the existing Class C shares of each of the
portfolios were re-designated into Class II shares.
94
<PAGE>
STYLE SELECT SERIES LOGO
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF STYLE SELECT SERIES, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Large-Cap Growth Portfolio, Mid-Cap
Growth Portfolio, Aggressive Growth Portfolio, Large-Cap Value Portfolio, Value
Portfolio, Small-Cap Value Portfolio, Focus Portfolio, Focused TechNet
Portfolio, Focused Growth and Income Portfolio, Focused Value Portfolio, and
International Equity Portfolio (constituting the eleven portfolios of Style
Select Series, Inc., hereafter referred to as the "Fund") at October 31, 2000,
and the results of each of their operations, the changes in each of their net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
December 15, 2000
95
<PAGE>
STYLE SELECT SERIES LOGO
SHAREHOLDER TAX INFORMATION -- (UNAUDITED)
Certain tax information regarding the Style Select Series, Inc. is required to
be provided to shareholders based upon each Portfolio's income and distributions
for the taxable year ended October 31, 2000. The information and distributions
reported herein may differ from the information and distributions taxable to the
shareholders for the calendar year ending December 31, 2000. The information
necessary to complete your income tax returns will be included with your Form
1099-DIV which will be sent to you under a separate cover in January 2001.
During the year ended October 31, 2000 the Portfolio's paid the following
dividends per share:
<TABLE>
<CAPTION>
NET SHORT- NET LONG-
NET TERM TERM
TOTAL INVESTMENT CAPITAL CAPITAL
DIVIDENDS INCOME GAINS GAINS
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Large-Cap Growth A.......................................... $0.55 $ -- $ -- $0.55
Large-Cap Growth B.......................................... 0.55 -- -- 0.55
Large-Cap Growth II......................................... 0.55 -- -- 0.55
Mid-Cap Growth A............................................ 2.17 -- 1.21 0.96
Mid-Cap Growth B............................................ 2.17 -- 1.21 0.96
Mid-Cap Growth II........................................... 2.17 -- 1.21 0.96
Aggressive Growth A......................................... 3.24 -- 0.44 2.80
Aggressive Growth B......................................... 3.24 -- 0.44 2.80
Aggressive Growth II........................................ 3.24 -- 0.44 2.80
Aggressive Growth Z......................................... 3.24 -- 0.44 2.80
Large-Cap Value A........................................... 0.32 -- 0.16 0.16
Large-Cap Value B........................................... 0.32 -- 0.16 0.16
Large-Cap Value II.......................................... 0.32 -- 0.16 0.16
Large-Cap Value Z........................................... 0.32 -- 0.16 0.16
Value A..................................................... 0.77 -- 0.01 0.76
Value B..................................................... 0.77 -- 0.01 0.76
Value II.................................................... 0.77 -- 0.01 0.76
Value Z..................................................... 0.77 -- 0.01 0.76
Small-Cap Value A........................................... -- -- -- --
Small-Cap Value B........................................... -- -- -- --
Small-Cap Value II.......................................... -- -- -- --
Small-Cap Value Z........................................... -- -- -- --
Focus A..................................................... 0.09 -- -- 0.09
Focus B..................................................... 0.09 -- -- 0.09
Focus C..................................................... -- -- -- --
Focus II.................................................... 0.09 -- -- 0.09
Focus Z..................................................... 0.09 -- -- 0.09
Focused TechNet A........................................... -- -- -- --
Focused TechNet B........................................... -- -- -- --
Focused TechNet C........................................... -- -- -- --
Focused TechNet II.......................................... -- -- -- --
Focused TechNet Z........................................... -- -- -- --
Focused Growth and Income A................................. 0.98 -- 0.62 0.36
Focused Growth and Income B................................. 0.98 -- 0.62 0.36
Focused Growth and Income II................................ 0.98 -- 0.62 0.36
Focused Growth and Income Z................................. -- -- -- --
Focused Value A............................................. -- -- -- --
Focused Value B............................................. -- -- -- --
Focused Value II............................................ -- -- -- --
International Equity A...................................... -- -- -- --
International Equity B...................................... -- -- -- --
International Equity II..................................... -- -- -- --
International Equity Z...................................... -- -- -- --
</TABLE>
For the year ended October 31, 2000, 4.12%, 10.07%, 7.86%, 100% and 97.31% of
the dividends paid from ordinary income by Mid-Cap Growth Portfolio, Aggressive
Group Portfolio, Focused Growth and Income Portfolio, Large-Cap Value Portfolio
and Value, respectively, qualified for the 70% dividends received deductions for
corporations.
96
<PAGE>
STYLE SELECT SERIES LOGO
COMPARISONS: PORTFOLIOS VS. THE INDEXES -- (UNAUDITED)
As required by the Securities and Exchange Commission, the following graphs
compare the performance of a $10,000 investment in each Style Select Series,
Inc. portfolio to the growth of a similar investment in an appropriate benchmark
index. Please note, the graphs represent the performance of the largest class of
shares. It is important to also note that the portfolios are professionally
managed mutual funds, while the indices are unmanaged and, in any case, are not
available for investment. The maximum sales charge for Class A is 5.75% of the
public offering price. The maximum contingent deferred sales charges ("CDSC")
for Class B, Class C and Class II are 4%, 1% and 1% respectively. Class B's CDSC
is reduced to 0% after six years; Class C and Class II's CDSC is reduced to 0%
after eighteen months. All classes bear ongoing 12b-1 distribution and service
fees.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
RUSSELL 1000 MORNINGSTAR LARGE-CAP LARGE-CAP GROWTH
INDEX GROWTH INDEX CLASS B
<S> <C> <C> <C>
10/97 $10,000 $10,000 $10,000
10/97 $9,630 $9,629 $9,432
4/98 $11,852 $11,557 $11,184
10/98 $12,003 $11,308 $10,898
4/99 $15,275 $14,535 $13,218
10/99 $15,656 $15,525 $14,387
4/00 $17,179 $18,955 $17,036
10/00 $15,634 $18,168 $15,616
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II
SEC SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE
TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL
LARGE-CAP GROWTH PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN
<S> <C> <C> <C> <C> <C> <C>
1 Year Return 11.38% 4.98% 10.63% 6.63% 10.70% 8.59%
Since Inception* 62.51% 15.04% 59.16% 15.77% 59.17% 16.11%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A, Class B and Class II: 10/15/97
LARGE-CAP GROWTH PORTFOLIO
All share classes of the Large-Cap Growth Portfolio outperformed the Russell
1000 Index for the fiscal year ended October 31, 2000 -- a fact worth noting in
a highly volatile period in the equity markets. Effective sector allocation and
strong stock picking were the primary factors that contributed to this
Portfolio's performance. Our managers maintained a focus on selecting highly
recognizable, quality companies with established track records. Looking ahead,
they will continue to try to identify those large companies showing the greatest
potential for above-average growth.
97
<PAGE>
STYLE SELECT SERIES LOGO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
RUSSELL MID-CAP MORNINGSTAR MID-CAP MID-CAP GROWTH
GROWTH INDEX GROWTH INDEX CLASS B
<S> <C> <C> <C>
11/96 $10,000 $10,000 $10,000
11/96 $10,168 $10,188 $10,072
4/97 $9,870 $9,404 $8,792
10/97 $11,966 $11,648 $10,904
4/98 $13,899 $13,386 $13,000
10/98 $12,257 $11,612 $11,536
4/99 $15,614 $14,983 $14,005
10/99 $16,874 $17,140 $14,873
4/00 $23,890 $23,909 $19,671
10/00 $23,399 $25,834 $19,830
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II
SEC SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE
TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL
MID-CAP GROWTH PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN
<S> <C> <C> <C> <C> <C> <C>
1 Year Return 36.16% 28.33% 35.35% 31.35% 35.31% 32.95%
Since Inception* 106.48% 18.37% 101.30% 18.93% 111.08% 22.34%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A and Class B: 11/19/96; Class II: 3/06/97
MID-CAP GROWTH PORTFOLIO
Mid-capitalization stocks were the best performing U.S. equity sector for the
fiscal year, outperforming both their large-cap and small-cap brethren. Still,
volatility dominated the mid-cap equity market as well as the broader equity
markets, making the Portfolio's performance especially notable. All share
classes of the Mid-Cap Growth Portfolio closely tracked the performance of the
Russell Mid-Cap Growth Index and outperformed their Lipper category average for
the twelve months ended October 31, 2000. Strong stock and sector selection was
the primary driver of Portfolio performance. In the months ahead, we intend to
continue to look for companies with stable or improving business fundamentals
and attractive returns on capital.
98
<PAGE>
STYLE SELECT SERIES LOGO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
MORNINGSTAR AGGRESSIVE
RUSSELL 2500 AGGRESSIVE GROWTH
GROWTH INDEX GROWTH INDEX CLASS B
<S> <C> <C> <C>
11/96 $10,000 $10,000 $10,000
11/96 $10,183 $10,165 $10,104
4/97 $9,457 $9,376 $9,984
10/97 $11,969 $11,723 $12,640
4/98 $13,171 $13,179 $14,564
10/98 $10,985 $11,041 $13,130
4/99 $13,783 $14,319 $19,215
10/99 $15,094 $16,447 $20,642
4/00 $20,836 $22,888 $28,567
10/00 $22,609 $22,492 $26,937
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II CLASS Z
SEC SEC SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE
AGGRESSIVE GROWTH TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL
PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year Return 32.77% 25.13% 31.95% 27.95% 32.01% 29.69% 33.55% 33.55%
Since Inception* 179.60% 27.82% 172.37% 28.53% 154.46% 28.76% 92.51% 28.92%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A and Class B: 11/19/96; Class II: 3/06/97;
Class Z: 4/03/98
AGGRESSIVE GROWTH PORTFOLIO
The Aggressive Growth Portfolio aggressively seeks quality companies that the
managers believe are poised for long-term, sustainable growth. While these
companies are generally small and medium-sized, our managers also have the
flexibility to invest a small portion in larger stocks or to keep a stock in the
Portfolio as it grows beyond the mid-cap market size. As you can see in the
chart above, the Portfolio's Class B shares have outperformed both the benchmark
and Morningstar objective average for the period since the Portfolio's
inception. For the twelve months ended October 31, 2000, all share classes of
the Portfolio outperformed both its benchmark index and its Morningstar
objective average. Effective sector allocation was particularly key to the
Portfolio's success during this period.
99
<PAGE>
STYLE SELECT SERIES LOGO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
MORNINGSTAR LARGE-CAP
RUSSELL 1000 LARGE-CAP VALUE
INDEX INDEX CLASS B
<S> <C> <C> <C>
10/97 $10,000 $10,000 $10,000
10/97 $9,721 $9,635 $9,488
4/98 $11,742 $11,241 $10,968
10/98 $11,162 $10,481 $10,011
4/99 $13,374 $12,292 $11,740
10/99 $12,985 $11,820 $11,168
4/00 $12,857 $12,071 $11,878
10/00 $13,702 $12,714 $12,378
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II CLASS Z
SEC SEC SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE
LARGE-CAP VALUE TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL
PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year Return 14.36% 7.78% 13.52% 9.52% 13.59% 11.46% 15.02% 15.02%
Since Inception* 29.41% 6.74% 26.78% 7.26% 26.86% 7.77% 18.50% 6.90%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A, Class B and Class II: 10/15/97; Class Z:
4/16/98
LARGE-CAP VALUE PORTFOLIO
For the twelve months ended October 31, 2000, all share classes of the Large-Cap
Value Portfolio outperformed its Morningstar and Lipper peers and the Russell
1000 Index. The Portfolio's strong performance during this period was primarily
attributable to successful stock selection and discipline to its value-oriented
strategy, regardless of tremendously fluctuating market conditions. The
Portfolio managers continue to seek out stocks of high quality, healthy,
well-managed companies that may be undergoing temporary setbacks in their stock
prices but are expected to rebound to their historical growth paths.
100
<PAGE>
STYLE SELECT SERIES LOGO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
RUSSELL MID-CAP MORNINGSTAR MID-CAP VALUE
VALUE INDEX VALUE INDEX CLASS B
<S> <C> <C> <C>
11/96 $10,000 $10,000 $10,000
11/96 $10,147 $10,305 $10,232
4/97 $10,535 $10,674 $10,800
10/97 $12,649 $12,656 $12,800
4/98 $14,486 $14,494 $14,474
10/98 $12,399 $12,406 $12,298
4/99 $14,027 $14,174 $14,092
10/99 $13,107 $13,492 $13,710
4/00 $13,398 $14,460 $14,540
10/00 $14,661 $15,733 $13,778
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II CLASS Z
SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE CUMULATIVE
TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL SEC AVERAGE TRADITIONAL SEC AVERAGE
VALUE PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ ANNUAL RETURN RETURN+ ANNUAL RETURN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year Return 10.73% 4.37% 10.00% 6.00% 9.93% 7.83% 11.25% 11.25%
Since Inception* 54.62% 10.01% 50.80% 10.40% 38.93% 9.11% 7.14% 2.71%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A and Class B: 11/19/96; Class II: 3/06/97;
Class Z: 4/03/98
VALUE PORTFOLIO
All share classes of the Value Portfolio outperformed its Morningstar and Lipper
category averages for the twelve months ended October 31, 2000. Such performance
is particularly impressive given the bifurcated nature of the U.S. equity market
over the fiscal period. The first four months were dominated by growth stocks.
The next eight months experienced a run in value stocks. Strong stock selection
bolstered Portfolio performance. So, too, did maintaining a diversified
portfolio. Although it is too soon to know if the resurgence in value-oriented
investing is sustainable, our managers remain committed to their disciplined,
value investment strategies.
101
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
RUSSELL 2000 VALUE MORNINGSTAR SMALL-CAP VALUE SMALL-CAP VALUE
INDEX INDEX CLASS B
<S> <C> <C> <C>
Beg Inv $10,000 $10,000 $10,000
10/97 $9,728 $9,698 $9,704
4/98 $11,072 $10,810 $10,784
10/98 $8,980 $8,449 $8,598
4/99 $9,444 $8,964 $9,286
10/99 $9,111 $8,853 $9,238
4/00 $9,859 $9,866 $10,175
10/00 $10,687 $10,637 $10,627
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II CLASS Z
SMALL-CAP CUMULATIVE CUMULATIVE CUMULATIVE CUMULATIVE
VALUE TRADITIONAL SEC AVERAGE TRADITIONAL SEC AVERAGE TRADITIONAL SEC AVERAGE TRADITIONAL
PORTFOLIO RETURN+ ANNUAL RETURN RETURN+ ANNUAL RETURN RETURN+ ANNUAL RETURN RETURN+
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year
Return 18.97% 12.21% 18.28% 14.28% 18.27% 16.09% 19.68%
Since
Inception* 11.46% 1.66% 9.27% 2.96% 9.35% 2.64% 3.64%
<S> <C>
SMALL-CAP
VALUE SEC AVERAGE
PORTFOLIO ANNUAL RETURN
1 Year
Return 19.76%
Since
Inception* 1.43%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A, Class B and Class II: 10/15/97; Class Z:
4/03/98
SMALL-CAP VALUE PORTFOLIO
For the fiscal year ended October 31, 2000, all share classes of the Small-Cap
Value Portfolio outperformed the Russell 2000 Value Index. Individual stock
selection drove Portfolio performance most. Sector positioning helped as well.
As you can see in the chart above, the Portfolio's Class B shares have also
closely tracked both the benchmark index and its Morningstar category average
over the long term. Although future periods of volatility are anticipated, we
believe there continues to be opportunities to find small- cap stocks that will
enable us to provide value-added performance.
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DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
S&P 500 MORNINGSTAR LARGE-CAP FOCUS
INDEX GROWTH INDEX CLASS B
<S> <C> <C> <C>
6/98 $10,000 $10,000 $10,000
6/98 $10,406 $10,589 $10,056
10/98 $10,133 $10,011 $10,048
4/99 $12,395 $12,864 $13,400
10/99 $12,735 $13,741 $15,240
4/00 $13,652 $16,770 $19,259
10/00 $13,513 $16,400 $16,585
</TABLE>
<TABLE>
CLASS A CLASS B CLASS C CLASS II CLASS Z
SEC SEC SEC SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE
TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL
FOCUS PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year Return 12.23% 5.78% 11.45% 7.45% N/A N/A 11.45% 9.34% 12.67 12.67
Since Inception* 72.66% 22.52% 69.85% 23.81% -1.26% N/A 69.85% 24.21% 19.43% 14.42%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A, Class B and Class II: 6/08/98; Class Z:
7/07/99
FOCUS PORTFOLIO
The first multi-managed focused fund on Wall Street, the Focus Portfolio
continued to generate superior results even during a difficult investment
environment such as that of the past fiscal year. All share classes of the
Portfolio outperformed its benchmark, the S&P 500 Index, and its Lipper category
average for the twelve months ended October 31, 2000. As you can see in the
chart above, the Portfolio's Class B shares have also outperformed both the
benchmark and its Morningstar category average over the longer term. We believe
that the Portfolio's focused approach -- investing in no more than 30 stocks --
and its respected investment advisers are two key catalysts of this performance.
103
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
S&P 500 MORNINGSTAR LARGE- FOCUSED GROWTH AND
INDUSTRIAL INDEX CAP BLEND INDEX INCOME CLASS B
<S> <C> <C> <C>
10/97 $10,000 $10,000 $10,000
10/97 $9,666 $9,657 $9,568
4/98 $11,840 $11,478 $11,160
10/98 $11,791 $11,011 $10,375
4/99 $14,422 $13,425 $12,321
10/99 $14,818 $13,793 $13,717
4/00 $15,885 $15,085 $17,010
10/00 $15,723 $14,975 $16,019
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II
SEC SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE
FOCUSED GROWTH AND INCOME TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL
PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN
<S> <C> <C> <C> <C> <C> <C>
1 Year Return 19.88% 12.98% 19.03% 15.03% 19.04% 17.07%
Since Inception* 66.60% 15.98% 63.28% 16.76% 63.20% 16.85%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A, Class B and Class II: 10/15/97
FOCUSED GROWTH AND INCOME PORTFOLIO
Primarily due to effective individual stock selection within a focused structure
of a maximum of 60 stocks, all share classes of the Focused Growth and Income
Portfolio ranked in the top 15% of its Lipper category average for the fiscal
year. All share classes also outperformed the Portfolio's Morningstar peers and
the S&P 500 Index for the twelve months ended October 31, 2000. As you can see
in the chart above, the Portfolio's Class B shares have also outperformed both
the benchmark and its Morningstar category average over the longer term. Looking
ahead, we expect that volatility in the stock market will continue. Therefore,
we believe the importance of good stock selection -- rather than general sector
or industry allocation -- will increase even further as the new millennium
progresses.
104
<PAGE>
STYLE SELECT SERIES LOGO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
RUSSELL 1000 RUSSELL 3000 FOCUSED VALUE
VALUE INDEX VALUE INDEX CLASS B
<S> <C> <C> <C>
11/99 $10,000 $10,000 $10,000
11/99 $9,992 $9,993 $10,224
1/00 $9,713 $9,734 $10,280
4/00 $9,971 $10,022 $11,064
7/00 $9,736 $9,834 $11,456
10/00 $10,626 $10,697 $12,528
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II
SEC SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE
TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL
FOCUSED VALUE PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN
<S> <C> <C> <C> <C> <C> <C>
1 Year Return 30.08% 22.60% 29.28% 25.28% 29.28% 26.99%
Since Inception* 30.08% 10.73% 29.28% 11.93% 29.28% 12.69%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A, Class B and Class II: 11/01/99
FOCUSED VALUE PORTFOLIO
The Focused Value Portfolio was introduced to investors on November 1, 1999. As
you can see in the chart above, the Portfolio's Class B outperformed both the
Russell 1000 Value Index and the Russell 3000 Value Index for the period from
inception through October 31, 2000. Our managers will continue to seek long-term
growth of capital by investing in a limited number of equity securities that
they believe are undervalued in the market, without regard to market
capitalization.
105
<PAGE>
STYLE SELECT SERIES LOGO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DOLLARS (THOUSANDS)
<TABLE>
<CAPTION>
MORNINGSTAR FOREIGN INTERNATIONAL EQUITY
MSCI EAFE USD INDEX STOCK INDEX CLASS B
<S> <C> <C> <C>
11/96 $10,000 $10,000 $10,000
11/96 $10,160 $10,205 $10,056
4/97 $11,355 $11,825 $9,952
10/97 $10,249 $10,785 $9,904
4/98 $11,848 $12,522 $11,150
10/98 $11,269 $11,113 $9,838
4/99 $12,996 $12,888 $10,867
10/99 $13,872 $14,153 $11,440
4/00 $14,805 $16,414 $13,069
10/00 $13,472 $14,763 $11,214
</TABLE>
<TABLE>
CLASS A CLASS B CLASS II CLASS Z
SEC SEC SEC SEC
CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE CUMULATIVE AVERAGE
INTERNATIONAL EQUITY TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL TRADITIONAL ANNUAL
PORTFOLIO RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN RETURN+ RETURN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year Return 1.26% -4.56% 0.64% -3.36% 0.64% -1.36% 1.87% 1.87%
Since Inception* 18.14% 2.76% 15.14% 2.94% 14.31% 3.44% 6.25% 2.39%
</TABLE>
+ Traditional returns do not reflect sales load.
* Inception date for Class A and Class B: 11/19/96; Class II: 3/06/97;
Class Z: 4/06/98
INTERNATIONAL EQUITY PORTFOLIO
This past fiscal year was a challenging one for international equity managers.
Lingering concerns that stock valuations had become stretched while economic
fundamentals were weakening led investors to flee European, Japanese, Asian and
emerging equities markets during much of the period. A series of interest rate
increases in the U.S. and Europe, as well as Japan's first rate hike in a
decade, further clouded investor sentiment. Still, all share classes of the
International Equity Portfolio outperformed the MSCI EAFE Index for the twelve
months ended October 31, 2000. With a long-term perspective, our managers remain
constructive on the overseas markets, as demographics and public policy are
favorable for continued and expanding equity ownership by investors throughout
the world.
106
<PAGE>
Multi-Managed Mutual Funds
FOCUS PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] FRED ALGER MANAGEMENT, INC.
[LOGO] Jennison Associates
[LOGO] MARSICO Capital Management LLP
FOCUSED GROWTH AND INCOME PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] MARSICO Capital Management LLP
[LOGO] Sun America Asset Management
FOCUSED TECHNET PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] VAN WAGONER FUNDS
[LOGO] Dresdner RCM Global Funds
[LOGO] Sun America Asset Management
FOCUSED VALUE PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] AMERICAN CENTURY
[LOGO] Thornburg Investment Management
[LOGO] THIRD AVENUE FUNDS
LARGE-CAP GROWTH PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] JANUS
[LOGO] Jennison Associates
[LOGO] Sun America Asset Management
MID-CAP GROWTH PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] MILLER ANDERSON & SHERRERD, LLP
[LOGO] T. Rowe Price
[LOGO] Sun America Asset Management
AGGRESSIVE GROWTH PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] JANUS
[LOGO] Sun America Asset Management
[LOGO] WARBURG PINCUS
LARGE-CAP VALUE PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] DAVIS SELECTED ADVISERS
[LOGO] Thornburg Investment Management
[LOGO] WELLINGTON MANAGEMENT
VALUE PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] AMERICAN CENTURY
[LOGO] DAVIS SELECTED ADVISERS
[LOGO] NEUBERGER BERMAN
SMALL-CAP VALUE PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] BERGER
[LOGO] LAZARD
[LOGO] THIRD AVENUE FUNDS
INTERNATIONAL EQUITY PORTFOLIO
--------------------------------------------------------------------------------
[LOGO] Bankers Trust
[LOGO] T. Rowe Price International, Inc.
SunAmerica Capital Services, Inc.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
800-858-8850, x5660
AIG Member of American International Group, Inc.
www.sunamericafunds.com
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] SunAmerica
Mutual Funds