<PAGE>
SUNAMERICA MONEY MARKET FUND
SHAREHOLDER LETTER
August 21, 1998
Dear Shareholder:
The investment objective of the SunAmerica Money Market Fund is to seek a
high level of current income as is consistent with liquidity and stability of
capital. The Fund will seek to achieve its objective by investing in a
portfolio of high quality money market instruments. The portfolio is
structured according to our fundamental outlook of the economy and maintains a
high level of diversity in order to reduce investment risk.
For the six months ended June 30, 1998, the Fund's Class A shares posted a
total return of 2.23% and the SEC 7 day effective yield was 4.87%. Since the
Fund invests only in short-term obligations with a maturity of 13 months or
less, its performance generally tracks the short-term market levels.
After six quarters of rapid expansion, economic growth in the United States
appears to have slowed sharply in the second quarter of 1998. The Asian
economic crisis, now one year old, is dramatically hurting U.S. exports and
causing business inventories to increase at an unprecedented rate.
Manufacturing activity appears to be contracting, pressured by the decrease in
demand due to overseas turmoil. Finally, consumer price inflation remains very
low and commodity prices have fallen to their lowest level in over four years.
Against the backdrop of a slowdown in the economy and no signs of inflationary
pressures, we remain constructive towards the U.S. fixed income market.
Overseas developments will continue to dominate and overshadow domestic
economic news. Recent reports from Asia show the region sliding deeper into
recession with Japanese Gross Domestic Product falling at a dramatic 5.3%
annualized rate in the first quarter. This financial crisis has aided the U.S.
fixed income market as investors have moved money out of international and
commodities markets and into less volatile securities. It has been evident by
the events and volatility of the Asian markets over the past several weeks that
economic recovery and reform will not necessarily happen smoothly. Given our
expectation of a moderating U.S. economy and the current unrest in Asia, we
remain optimistic that the Federal Reserve will keep the fed funds rate steady
at 5.5% for the next few months. We will continue to search for the best
relative valued securities and will structure the portfolio to be flexible for
any changes in our economic outlook.
<TABLE>
<CAPTION>
U.S. ECONOMIC STATISTICS
RECENT REPORT PRIOR REPORT
- ----------------------------------------------------------
<S> <C> <C>
PURCHASING MANAGER'S REPORT 49.6 51.4
CONSTRUCTION SPENDING -1.5% 0.5%
PRODUCER PRICE INDEX -0.1% 0.2%
CONSUMER PRICE INDEX 0.1% 0.3%
RETAIL SALES 0.1% 1.2%
INDUSTRIAL PRODUCTION -0.6% 0.3%
</TABLE>
These numbers indicate a continuation of a non-inflationary environment and a
moderating U.S. economy.
/s/ John J. DiVito /s/ P. Christopher Leary
John DiVito P. Christopher Leary
Portfolio Manager Portfolio Manager
<PAGE>
SUNAMERICA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) RATE** MATURITY (NOTE 2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSET BACKED SECURITIES-
1.6%
Americredit Automobile
Receivable Trust......... $2,022 5.56% 4/05/99 $ 2,022,394
Capital Equipment
Receivable Trust......... 1,444 5.79 12/15/98 1,444,342
WFS Final Owner........... 6,597 5.62 2/20/99 6,597,130
-----------
TOTAL ASSET BACKED
SECURITIES
(amortized cost
$10,063,866)............ 10,063,866
-----------
CERTIFICATES OF DEPOSIT-
2.0%
ABN Amro Bank............. 5,000 5.65 3/22/99 4,998,632
Deutsche Bank AG.......... 8,000 5.66 3/03/99 7,997,427
-----------
TOTAL CERTIFICATES OF
DEPOSIT
(amortized cost
$12,996,059)............ 12,996,059
-----------
COMMERCIAL PAPER-60.3%
Allegheny University
Hospital................. 12,449 5.51 8/10/98 12,372,784
Atlantis One Funding
Corp..................... 21,998 5.50-5.53 7/14/98-7/20/98 21,943,122
Banco Bradesco SA......... 10,000 5.52 10/15/98 9,837,467
Banner Receivables Corp... 10,000 5.58 7/16/98 9,976,750
BBL North America, Inc.... 15,000 6.35 7/01/98 15,000,000
Bell South
Telecommunications, Inc.. 10,000 5.45 2/19/99 9,647,264
Corporate Asset Funding
Co....................... 10,000 5.52 8/28/98 9,911,067
Cosco Cayman Fund Co.
Ltd...................... 10,000 5.53 8/04/98 9,947,772
Daewoo International
Corp..................... 8,000 5.52 7/07/98 7,992,640
Eksportfinans AS.......... 10,500 5.46 7/06/98 10,492,038
Four Winds Funding Corp... 10,000 5.52 8/14/98 9,932,533
Grand Funding Corp........ 10,000 5.54 9/18/98 9,878,428
Greenwich Asset Funding,
Inc...................... 22,000 5.51-5.53 9/02/98-9/09/98 21,776,731
Island Finance Puerto
Rico, Inc................ 10,000 5.53 7/16/98 9,976,958
Kittyhawk Funding Corp.... 10,000 5.50 7/16/98 9,977,083
KZH Holding Corp.......... 29,521 5.47-5.55 7/23/98-9/29/98 29,237,640
Merrill Lynch & Co., Inc.. 28,000 5.51-5.53 7/28/98-8/21/98 27,820,360
Mitsubishi International
Corp..................... 12,000 5.56 9/02/98 11,883,240
Mitsui & Co. (USA) Inc.... 12,000 5.54 7/31/98 11,944,600
MPF Ltd................... 7,500 5.54 9/11/98 7,416,900
Pemex Capital, Inc........ 12,000 5.52 8/12/98 11,922,720
Petroleo Brasileiro SA.... 10,000 5.51 8/26/98 9,914,289
Plantation Pipe Line Co... 10,000 5.52 9/04/98 9,900,333
Sigma Finance Corp........ 20,000 5.51-5.52 8/07/98 19,886,636
Silver Tower US Funding
LLC...................... 12,000 5.52 8/17/98 11,913,520
Southland Corp............ 12,000 5.53 8/12/98 11,922,580
SRD Finance, Inc.......... 8,000 5.65 7/15/98 7,982,422
Thunder Bay Funding, Inc.. 7,000 5.56 7/20/98 6,979,459
Transportadora De Gas Del
Sur...................... 15,000 5.52 7/22/98 14,951,700
Westways Funding III Ltd.. 12,000 5.54 7/08/98 11,987,073
-----------
TOTAL COMMERCIAL PAPER
(amortized cost
$384,326,109)........... 384,326,109
-----------
</TABLE>
<PAGE>
SUNAMERICA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1998 (UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) RATE** MATURITY (NOTE 2)
- --------------------------------------------------------------------------------
GOVERNMENT AGENCIES--1.4%
<S> <C> <C> <C> <C> <C>
Agency for International
Development India+...... $ 2,000 5.58% 7/07/98 $ 2,001,771
Agency for International
Development Israel+..... 1,952 5.63 7/07/98 1,952,181
Agency for International
Development Panama+..... 4,677 5.92 7/07/98 4,704,053
------------
TOTAL GOVERNMENT AGENCIES
(amortized cost
$8,658,005)............ 8,658,005
------------
<CAPTION>
MEDIUM TERM NOTES--24.2%
<S> <C> <C> <C> <C> <C>
ABN Amro Bank............ 10,000 5.72 4/05/99 9,996,353
Bankers Trust Co.+....... 10,000 5.58 7/01/98 9,995,673
Bank of New York......... 10,000 5.45 2/12/99 9,980,348
Banque National de Paris. 10,000 5.71 3/30/99 9,997,144
Barnett Banks, Inc.+..... 9,000 5.81 12/28/98 9,008,855
Bear Stearns Cos., Inc.+. 9,000 5.64 8/11/98 9,000,000
FCC National Bank+....... 8,000 5.55 7/01/98 7,996,290
General Motors Acceptance
Corp.+.................. 11,000 5.82 8/12/98 11,006,704
General Motors Acceptance
Corp.................... 14,275 5.88-6.38 9/30/98-1/12/99 14,293,034
Goldman Sachs & Co.+..... 28,000 6.88 7/15/98-9/26/98 28,000,000
Kansallis-Osake-Pankki... 5,800 9.75 12/15/98 5,893,965
Morgan Stanley Group,
Inc.+................... 22,000 5.62-5.79 7/23/98-9/14/98 22,000,000
Sigma Finance Corp....... 7,000 5.71 3/24/99 6,995,756
------------
TOTAL MEDIUM TERM NOTES
(amortized cost
$154,164,122).......... 154,164,122
------------
<CAPTION>
TAXABLE MUNICIPAL MEDIUM
TERM NOTES--7.0%
<S> <C> <C> <C> <C> <C>
Courtyards Mackinaw LLC+. 6,000 5.66 7/02/98 6,000,000
Illinois Student Assis-
tance Corp.+............ 21,000 5.58-5.65 7/01/98 21,000,000
New Hampshire State In-
dustrial Development Au-
thority................. 10,000 5.64 8/21/98 10,000,000
Texas G.O.+.............. 7,415 5.61 7/01/98 7,415,000
------------
TOTAL TAXABLE MUNICIPAL
MEDIUM TERM NOTES
(amortized cost
$44,415,000)........... 44,415,000
------------
TOTAL INVESTMENT
SECURITIES
(amortized cost
$614,623,161).......... 614,623,161
------------
<CAPTION>
REPURCHASE AGREEMENT--
1.5%
<S> <C> <C> <C> <C> <C>
Joint Repurchase Agree-
ment Account (Note 3)
(cost $9,296,000)....... 9,296 5.50 7/01/98 9,296,000
------------
<CAPTION>
TOTAL INVESTMENTS--
<S> <C> <C> <C> <C> <C>
(amortized cost
$623,919,161*)......... 98.0% 623,919,161
Other assets less liabil-
ities................... 2.0 12,915,821
----- ------------
NET ASSETS............... 100.0% $636,834,982
===== ============
</TABLE>
- --------
* At June 30, 1998 the cost of securities for Federal income tax purposes was
the same for book purposes
** Rates shown are rates in effect as of June 30, 1998
+ Variable rate security; maturity date reflects the next reset date
G.O.--General Obligation
PORTFOLIO BREAKDOWN AS A PERCENTAGE OF NET ASSETS (EXCLUDING REPURCHASE
AGREEMENT) BY INDUSTRY@
<TABLE>
<S> <C>
Finance 23.9%
Banking 15.8
Securities Holding Company 13.6
Receivable Company 13.5
</TABLE>
<TABLE>
<S> <C>
Industrial 9.5%
Municipalities 6.9
Leasing 4.0
Oil Services 3.1
</TABLE>
<TABLE>
<S> <C>
Medical 2.0%
Telecommunication 1.5
Gov't Agency 1.4
Distribution 1.3
----
96.5%
====
</TABLE>
@ As grouped by Moody's Investors Service Global Short Term Market Record
See Notes to Financial Statements
<PAGE>
SUNAMERICA MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investment securities, at value (amortized cost $623,919,161)....... $623,919,161
Cash................................................................ 2,090,024
Receivable for fund shares sold..................................... 24,086,429
Interest receivable................................................. 2,169,764
Prepaid expenses.................................................... 91,904
------------
Total assets....................................................... 652,357,282
------------
LIABILITIES:
Payable for fund shares repurchased................................. 13,814,608
Dividends payable................................................... 1,088,212
Accrued expenses.................................................... 261,897
Investment advisory and management fees payable..................... 254,196
Distribution and service maintenance fees payable................... 103,387
------------
Total liabilities.................................................. 15,522,300
------------
Net assets...................................................... $636,834,982
============
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001 par value (10 billion shares authorized)........ $ 636,826
Additional paid-in capital.......................................... 636,093,964
------------
636,730,790
Accumulated undistributed net investment income..................... 104,192
------------
Net assets...................................................... $636,834,982
============
CLASS A:
Net asset value ($592,108,338/592,099,158 shares outstanding)...... $1.00
=====
CLASS B:
Net asset value ($44,306,647/44,306,637 shares outstanding)........ $1.00
=====
CLASS C:
Net asset value ($419,997/419,758 shares outstanding).............. $1.00
=====
</TABLE>
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.............................................. $16,522,012
-----------
EXPENSES:
Investment advisory and management fees............... $1,446,146
Transfer agent and shareholder servicing fees and ex-
penses--Class A...................................... 711,185
Transfer agent and shareholder servicing fees and ex-
penses--Class B...................................... 44,375
Transfer agent and shareholder servicing fees and ex-
penses--Class C...................................... 5,430
Service maintenance fees--Class A..................... 411,516
Distribution and service maintenance fees--Class B.... 133,261
Distribution and service maintenance fees--Class C.... 2,614
Custodian fees and expenses........................... 68,780
Registration fees--Class A............................ 27,434
Registration fees--Class B............................ 2,962
Registration fees--Class C............................ 8,290
Directors' fees and expenses.......................... 10,441
Legal fees and expenses............................... 4,525
Insurance expense..................................... 3,300
Audit and tax consulting fees......................... 905
Miscellaneous expenses................................ 4,693
----------
2,885,857
-----------
Less: expense offset and reimbursement................ (73,405)
-----------
Net expenses.......................................... 2,812,452
-----------
Net investment income................................. 13,709,560
-----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $13,709,560
===========
</TABLE>
See Notes to Financial Statements
<PAGE>
SUNAMERICA MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income................... $ 13,709,560 $ 23,424,418
------------ ------------
Net increase in net assets resulting
from operations........................ 13,709,560 23,424,418
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income (Class A).... (13,142,445) (22,107,661)
From net investment income (Class B).... (589,076) (1,279,869)
From net investment income (Class C).... (11,490) (4,562)
------------ ------------
Total dividends and distributions to
shareholders........................... (13,743,011) (23,392,092)
INCREASE IN NET ASSETS FROM FUND SHARE
TRANSACTIONS (NOTE 5)................... 96,167,749 112,855,857
------------ ------------
Total increase in net assets............ 96,134,298 112,888,183
NET ASSETS:
Beginning of year....................... 540,700,684 427,812,501
------------ ------------
End of period (including undistributed
net investment income of $104,192 and
$137,643 at June 30, 1998 and December
31, 1997, respectively)................ $636,834,982 $540,700,684
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NET NET NET RATIO OF
ASSET DIVIDENDS ASSET ASSETS RATIO OF NET INVESTMENT
VALUE NET TOTAL FROM FROM NET VALUE END OF EXPENSES INCOME TO
PERIOD BEGINNING INVESTMENT INVESTMENT INVESTMENT END OF TOTAL PERIOD TO AVERAGE AVERAGE
ENDED OF PERIOD INCOME OPERATIONS INCOME PERIOD RETURN(1) (000'S) NET ASSETS NET ASSETS
- --------------------------------------------------------------------------------
CLASS A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 $1.000 $0.034 $0.034 $(0.034) $1.000 3.47% $213,958 1.00% 3.43%
12/31/95 1.000 0.051 0.051 (0.051) 1.000 5.18 316,308 1.01(2) 5.04
12/31/96 1.000 0.045 0.045 (0.045) 1.000 4.61 398,698 1.00(3) 4.52
12/31/97 1.000 0.047 0.047 (0.047) 1.000 4.82 511,908 0.98(3) 4.73
6/30/98(6) 1.000 0.024 0.024 (0.024) 1.000 2.23 592,108 0.95(3)(4) 4.79(4)
<CAPTION>
CLASS B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 $1.000 $0.027 $0.027 $(0.027) $1.000 2.76% $ 98,398 1.69% 2.91%
12/31/95 1.000 0.044 0.044 (0.044) 1.000 4.49 51,799 1.78(2) 4.37
12/31/96 1.000 0.038 0.038 (0.038) 1.000 3.83 29,114 1.77(3) 3.76
12/31/97 1.000 0.040 0.040 (0.040) 1.000 4.03 28,391 1.74(3) 3.95
6/30/98(6) 1.000 0.020 0.020 (0.020) 1.000 1.85 44,307 1.75(3)(4) 3.98(4)
<CAPTION>
CLASS C
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/2/97-
12/31/97 $1.000 $0.010 $0.010 $(0.010) $1.000 1.00% $ 402 1.75%(4)(5) 4.01%(4)
6/30/98(6) 1.000 0.020 0.020 (0.020) 1.000 1.84 420 1.75(4)(5) 3.96(4)
</TABLE>
- --------
(1) Total return does not reflect sales load and is not annualized
(2) The expense ratio reflects the effect of a gross up of custody and transfer
agent expense credits for the year ended December 31, 1995 of 0.05% and
0.13% for Class A and Class B, respectively.
(3) The expense ratio reflects the effect of a gross up of transfer agent
expense credits as follows:
<TABLE>
<CAPTION>
12/31/96 12/31/97 6/30/98
-------- -------- -------
<S> <C> <C> <C>
Class A......... 0.03% 0.02% 0.03%
Class B......... 0.04% 0.02% 0.03%
</TABLE>
(4) Annualized
(5) Net of expense reimbursement (based on average net assets):
<TABLE>
<CAPTION>
12/31/97 6/30/98
-------- -------
<S> <C> <C>
Class C......... 4.74% 4.41%
</TABLE>
(6) Unaudited
See Notes to Financial Statements
<PAGE>
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--JUNE 30, 1998 (UNAUDITED)
NOTE 1. ORGANIZATION
SunAmerica Money Market Fund (the "Fund") is an open-end diversified
management investment company organized as a Maryland Corporation.
The Fund currently offers Class A shares, Class B shares and Class C shares.
The offering price is the next determined net asset value per share. For
Class B shares, a declining contingent deferred sales charge ("CDSC") is
imposed on certain redemptions made within six years. Class B shares of the
Fund convert automatically to Class A shares on the first business day of
the month seven years after the issuance of such Class B shares and at such
time are no longer subject to a distribution fee. Class C shares may be
subject to a contingent deferred sales charge on redemptions made within one
year of purchase. Each class of shares bears the same voting, dividend,
liquidation and other rights and conditions and each makes account
maintenance and service fee payments under a distribution plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") except
that Class B shares and Class C shares are subject to distribution fees.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed
by the Fund in the preparation of its financial statements:
SECURITY VALUATIONS: Portfolio securities are valued at amortized cost,
which approximates market value. The amortized cost method involves valuing
a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium.
REPURCHASE AGREEMENTS: The Fund, 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 Fund's custodian takes possession of the collateral pledged
for investments in repurchase agreements. The underlying collateral is
valued daily on a mark to market basis to ensure that the value, including
accrued interest, is at least equal to the repurchase price. In the event of
default of the obligation to repurchase, the Fund has the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligation. If
the seller defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited.
SECURITIES TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS TO
SHAREHOLDERS: Securities transactions are recorded as of the trade date.
Interest income, including the accretion of discount and amortization of
premium, is accrued daily. Realized gains and losses on sales of investments
are calculated on the identified cost basis.
Net investment income other than class specific expenses, and realized and
unrealized gains and losses are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares of each
class of shares at the beginning of the day (after adjusting for the current
capital shares activity of the respective class).
Dividends from net investment income are declared daily and paid monthly.
USE OF ESTIMATES IN FINANCIAL STATEMENT PREPARATION: 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.
<PAGE>
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--JUNE 30, 1998 (UNAUDITED)--(CONTINUED)
FEDERAL INCOME TAXES: It is the Fund's policy to meet the requirements of
the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies and to distribute all of its taxable net income to its
shareholders. Therefore, no federal income or excise tax provisions are
required.
During the year ended December 31, 1997, the Fund utilized $769 of capital
loss carryforwards. At December 31, 1997, the Fund had a capital loss
carryforward available of $32,508 which will expire as follows:
<TABLE>
<CAPTION>
EXPIRATION
--------------------------------------------------------------------------------------
2002 2003 2004
------ ------- -------
<S> <C> <C>
$5,123 $11,725 $15,660
</TABLE>
To the extent that these capital loss carryforwards are utilized to offset
future net realized gains on securities transactions, the gain, so offset
will not be distributed to the shareholders, to the extent provided by the
regulations.
Capital losses incurred after October 31 within the Fund's fiscal year are
deemed to arise on the first business day of the following fiscal year for
tax purposes. The Fund has incurred and will elect to defer $1,994 of such
capital losses.
NOTE 3. JOINT REPURCHASE AGREEMENT ACCOUNT
As of June 30, 1998, the Fund had a 7.6% undivided interest, which
represented $9,296,000 in principal amount, in a repurchase agreement in a
joint account with other SunAmerica managed funds. As of such date, the
repurchase agreement in the joint account and the collateral therefore was
as follows:
PaineWebber, Inc. Repurchase Agreement, 5.50% dated 6/30/98, in the
principal amount of $122,592,000 repurchase price $122,610,729 due 7/1/98
collateralized by $31,000,000 U.S. Treasury Notes 5.50% due 3/31/00,
$50,000,000 U.S. Treasury Notes 4.75% due 10/31/98 and $44,850,000 U.S.
Treasury Bill 5.05% due 2/4/99, approximate aggregate value $125,152,321.
NOTE 4. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT, DISTRIBUTION AGREEMENT
AND SERVICE AGREEMENT
The Fund has an Investment Advisory and Management Agreement (the
"Agreement") with SunAmerica Asset Management Corp. ("SAAMCo"), an indirect
wholly owned subsidiary of SunAmerica Inc. Under the Agreement, SAAMCo
provides continuous supervision of the Fund's portfolio and administers its
corporate affairs, subject to general review by the Directors. In connection
therewith, SAAMCo furnishes the Fund with office facilities, maintains
certain of the Fund's books and records, and pays the salaries and expenses
of all personnel, including officers of the Fund who are employees of SAAMCo
and its affiliates. The investment advisory and management fee to SAAMCo is
computed daily and payable monthly, at an annual rate of .50% on the first
$600 million of the Fund's daily net assets, .45% on the next $900 million
of net assets and .40% on net assets over $1.5 billion.
SunAmerica has voluntarily agreed to waive fees or reimburse expenses, if
necessary, to keep annual operating expenses at or below 1.75% for Class C
Shares. For the six months ended June 30, 1998, SAAMCO reimbursed $12,795 of
expenses.
The Fund has a Distribution Agreement with SunAmerica Capital Services, Inc.
("SACS" or the "Distributor"), an indirect wholly owned subsidiary of
SunAmerica Inc. The Fund has adopted a Distribution
<PAGE>
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--JUNE 30, 1998 (UNAUDITED)--(CONTINUED)
Plan (the "Plan") in accordance with the provisions of Rule 12b-1 under the
1940 Act. Rule 12b-1 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 and approved by its shareholders. Pursuant to such rule,
the Directors and the shareholders of each class of shares of the Fund have
adopted Distribution Plans hereinafter referred to as the "Class A Plan,"
the "Class B Plan" and the "Class C Plan". In adopting the Class A Plan, the
Class B Plan and the Class C Plan, 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 the Class B shares and Class C shares will not be used to subsidize the
sale of Class A shares.
Under the Class B Plan and the Class C Plan the Distributor receives
payments from the Fund at the annual rate of up to 0.75% of the average
daily net assets of the Fund's Class B and Class C shares, to compensate the
Distributor and certain securities firms for providing sales and promotional
activities for distributing that class of shares. The distribution costs for
which the Distributor may be 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 the Class B
and Class C Plan may exceed the Distributor's distribution costs as
described above. The Class A Plan does not provide for a distribution fee.
The Distribution Plans provide that each class of shares of the Fund may
also pay the Distributor an account maintenance and service fee of up to an
annual rate of 0.15% of the aggregate average daily net assets of such class
of shares for payments to broker-dealers for providing continuing account
maintenance. In this regard, some payments are used to compensate broker-
dealers with account maintenance and service fees in an amount up to 0.15%
per year of the assets maintained in the Fund by their customers. For the
six months ended June 30, 1998, SACS earned fees of $547,391 from the Fund.
SACS also receives the proceeds of contingent deferred sales charges paid by
investors in connection with certain redemptions of the Fund's Class B and
Class C shares. For the six months ended June 30, 1998, SACS informed the
Fund that it received approximately $65,891 in contingent deferred sales
charges.
The Fund 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 Fund's transfer agent in connection with the services that
it offers to the shareholders of the Fund. The Service Agreement permits the
Fund to reimburse SAFS for costs incurred in providing such services which
is approved annually by the Directors. For the six months ended June 30,
1998 the Fund (Class A, Class B and Class C) incurred expenses of $636,771
to reimburse SAFS pursuant to the terms of the Service Agreement. Of this
amount, $112,220 was payable to SAFS at June 30, 1998.
<PAGE>
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--JUNE 30, 1998 (UNAUDITED)
NOTE 5. CAPITAL SHARE TRANSACTIONS
Transactions in shares of each class, all at $1.00 per share, for the six
months ended June 30, 1998 and for the prior year were as follows:
<TABLE>
<CAPTION>
MONEY MARKET FUND
---------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------- ----------------------------- ----------------------------- -------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
---------------- -------------- ---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold...... 1,599,861,248 2,362,300,860 55,031,097 116,212,070 4,491,729 2,571,799
Reinvested
dividends....... 12,047,010 21,803,390 468,127 1,087,163 8,300 3,398
Shares redeemed.. (1,531,676,342) (2,270,925,578) (39,581,524) (118,023,672) (4,481,896) (2,173,572)
-------------- -------------- ----------- ------------ ---------- ----------
Net increase
(decrease)...... 80,231,916 113,178,672 15,917,700 (724,439) 18,133 401,625
============== ============== =========== ============ ========== ==========
</TABLE>
NOTE 6. 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 an unaffiliated
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 benefits payable under the Retirement Plan, at his or her election,
either in one lump sum or in up to fifteen annual installments. As of June
30, 1998, the Fund had accrued $58,729 for the Retirement Plan, which is
included in accrued expenses on the Statement of Assets and Liabilities and
for the six months ended June 30, 1998 expensed $10,441 for the Retirement
Plan, which is included in Directors' fees and expenses on the Statement of
Operations.
<PAGE>
SUNAMERICA MONEY MARKET FUND
TRUSTEES INVESTMENT MANAGER AND ADMINISTRATOR
S. James Coppersmith SunAmerica Asset Management Corp.
Samuel M. Eisenstat The SunAmerica Center
Stephen J. Gutman 733 Third Avenue
Peter A. Harbeck New York, NY 10017-3204
Peter McMillan III
Sebastiano Sterpa DISTRIBUTOR
SunAmerica Capital Services, Inc.
OFFICERS The SunAmerica Center
Peter A. Harbeck, President 733 Third Avenue
Nancy Kelly, Vice President New York, NY 10017-3204
P. Christopher Leary, Vice President
Robert M. Zakem, Secretary SHAREHOLDER SERVICING AGENT
Peter C. Sutton, Treasurer SunAmerica Fund Services, Inc.
John T. Genoy, Assistant Treasurer The SunAmerica Center
Donna M. Handel, Assistant Treasurer 733 Third Avenue
Cheryl L. Hawthorne, Assistant Treasurer New York, NY 10017-3204
Abbe P. Stein, Assistant Secretary
CUSTODIAN AND TRANSFER AGENT
State Street Bank & Trust Company
P.O. Box 419572
Kansas City, MO 64141-6572
- -------------------------------------------------------------------------------
FASTFACTS . . . AVAILABLE FOR YOUR CONVENIENCE
The easy and convenient way to obtain the most current information on your
mutual funds. By calling our toll free number, 1-800-654-4760, you can receive
mutual fund information 24 hours a day. If you require any additional
information, please call us at 1-800-858-8850 Monday-Friday 8:30 a.m.-6:00
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All you need is:
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(the last four digits of your Social Security number, a tax identification
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<TABLE>
<CAPTION>
CLASS
---------------
A B C II
EQUITY FUNDS --- --- --- ---
<S> <C> <C> <C> <C>
Balanced Assets 51 551
Blue Chip Growth 522 22
Mid-Cap Growth 71 571
Small Company
Growth 36 536 736
Growth and
Income 24 524 824
"Dogs" of Wall
Street 720 730 740
</TABLE>
<TABLE>
<CAPTION>
CLASS
-----------
A B C
INCOME FUNDS --- --- ---
<S> <C> <C> <C>
U.S. Government
Securities 70 570
Federal
Securities 534 34
Diversified
Income 580 80
High Income 28 228 828
Tax Exempt
Insured 33 533
Money Market 35 535 735
</TABLE>
<TABLE>
<CAPTION>
CLASS
---------------
STYLE SELECT A B C II
SERIES --- --- --- ---
<S> <C> <C> <C> <C>
Aggressive
Growth 701 711 771
Mid-Cap Growth 702 712 772
Value 704 714 774
International
Equity 703 713 773
Small-Cap Value 705 715 775
Large-Cap Value 706 716 776
Large-Cap Blend 708 728 778
Large-Cap Growth 709 719 779
Focus 722 732 742
</TABLE>
Press the following Touch-Tone Button(s) to make your selection:
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. Press 0 at anytime during this recording to be transferred to a service
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<PAGE>
- ----------------------------- --------------------
SUNAMERICA MONEY MARKET FUND BULK RATE
THE SUNAMERICA CENTER U.S. POSTAGE
733 THIRD AVENUE PAID
NEW YORK, NY 10017-3204 Kansas City, MO
1-800-858-8850 PERMIT NO. 2891
- ----------------------------- ---------------------
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.
SPONSORED BY:
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ASSET MANAGEMENT
MMANN
JUNE 30, 1998
SUNAMERICA
MONEY MARKET
FUND
SEMIANNUAL
REPORT
[LOGO] SUNAMERICA
ASSET MANAGEMENT
800.858.8850
