<PAGE>
SUNAMERICA MONEY MARKET FUND
SHAREHOLDER LETTER
February 10, 1998
Dear Shareholder:
The SunAmerica Money Market Fund's investment objective is to seek as high a
level of current income as is consistent with liquidity and stability of
capital by investing in high quality, short-term money market instruments.
For the year ended December 31, 1997, the Fund's Class A share's total
return was 4.82% and the Fund's SEC 30-day yield was 4.94%. 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.
The U.S. economy has continued to experience an almost nirvana like
combination of strong growth and little to no inflation. Over the recent
months, labor markets have grown increasingly tight with the unemployment rate
currently at 4.7%. However, average hourly earnings have remained in the same
3.6% to 4.1% range for over a year. Therefore, even though unemployment is at
a historic low, there is little evidence showing that this is causing a
significant amount of upward pressure on wages. Furthermore, any wage
increases have thus far been offset by commensurate gains in productivity.
While the employment data has consistently been robust, the Purchasing
Managers' report has indicated that slower growth may be on the way. The
export orders component has fallen sharply reflecting the financial crisis in
Asia and the strong U.S. dollar versus most major currencies. The prices paid
component has also dropped reflecting the collapse in commodity prices that
occurred toward the end of 1997. This suggests that the Producer Price Index
and the Consumer Price Index could be subject to a downward bias in the months
ahead. We believe that the impact of the financial crisis in Asia has yet to
be reflected in the U.S. economic data. We expect the domestic growth rate to
slow in 1998 to around 2.0% to 2.5% with the Federal Reserve holding short-
term rates steady at 5.50% over the next several months and possibly easing
monetary policy sometime in the second half of the year.
The Fund's strategy remains conservative. Given our expectation of a slowing
economy, we expect to maintain the average days to maturity of the Fund at a
level slightly longer than the Donaghue Average and will focus on securities
which we believe offer the greatest level of liquidity and credit quality.
/s/ John DiVito /s/ P. Christopher Leary
John DiVito P. Christopher Leary
Portfolio Manager Portfolio Manager
<PAGE>
SUNAMERICA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) RATE** MATURITY (NOTE 2)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSET BACKED
SECURITIES--1.5%
Americredit Automobile
Receivable Trust $ 3,916 5.66% 9/05/98 $ 3,916,489
Capital Equipment
Receivable Trust 4,574 5.79 12/15/98 4,574,324
--- ------------
TOTAL ASSET BACKED
SECURITIES
(amortized cost
$8,490,813) 8,490,813
--- ------------
BANKERS' ACCEPTANCE--
1.5%
Sanwa Bank Ltd.
(amortized cost
$8,182,110) 8,200 5.61 1/15/98 8,182,110
--- ------------
CERTIFICATES OF
DEPOSIT--10.2%
Deutsche Bank AG 10,000 6.21 4/20/98 10,010,813
Rabobank Nederland N.V. 13,000 6.07-6.20 3/26/98-4/09/98 12,999,745
Sanwa Bank Ltd. 12,000 5.72 1/20/98 12,000,170
Societe Generale
Institutional 20,000 5.77-6.35 4/15/98-10/09/98 19,989,171
--- ------------
TOTAL CERTIFICATES OF
DEPOSIT
(amortized cost
$54,999,899) 54,999,899
--- ------------
COMMERCIAL PAPER--50.3%
AC Aquisition Holding
Co. 10,000 5.60 2/17/98 9,926,889
Avnet, Inc. 7,000 5.70 2/13/98 6,952,342
Banco Bradesco 8,000 5.65 6/18/98 7,789,067
Banco Credito Nacional 8,000 5.55 2/03/98 7,959,300
Bavaria Global Corp. 12,000 5.60 1/15/98 11,973,867
BTM Capital Corp. 12,000 5.63 1/15/98 11,973,727
Certain Funding Corp. 22,000 5.66-5.70 2/09/98-2/12/98 21,859,010
Citation Capital Corp. 8,000 5.80 3/05/98 7,918,800
Cooperative Association
of Tractor Dealers,
Inc. 8,200 5.57 2/24/98 8,131,489
Demir Funding 12,000 5.57 1/12/98 11,979,577
First Data Corp. 9,000 5.55 2/18/98 8,933,400
Goldman Sachs Group L.P. 10,000 5.73 1/20/98 9,969,758
Gotham Funding Corp. 8,000 6.20 3/12/98 7,903,556
Greenwich Asset Funding,
Inc. 12,000 5.55 1/22/98 11,961,150
Guinness PLC 20,000 5.58-5.75 1/21/98-3/11/98 19,842,950
JLUS Funding Corp. 9,500 6.50 3/12/98 9,379,931
Mitsubishi Motors Corp. 12,000 5.58 1/20/98 11,964,660
Mitsui & Co. (USA), Inc. 9,000 6.00 2/20/98 8,925,000
Morgan (J.P.) Co., Inc. 10,000 5.57 1/30/98 9,955,131
National City Credit
Corp. 7,000 5.58 1/26/98 6,972,875
Orix America, Inc. 10,000 6.10 1/30/98 9,950,861
Rose Funding 10,000 5.65 2/06/98 9,943,500
SAFECO Credit Co., Inc. 7,000 5.62 1/15/98 6,984,701
Standard Credit Card
Funding+ 5,000 5.99 3/23/98 4,999,056
Transportadora de Gas
Del Sur 10,000 5.62 1/22/98 9,967,217
Tribune Co. 18,000 5.60-5.72 2/13/98-2/20/98 17,867,044
--- ------------
TOTAL COMMERCIAL PAPER
(amortized cost
$271,984,858) 271,984,858
--- ------------
</TABLE>
<PAGE>
SUNAMERICA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS AT DECEMBER 31, 1997 -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) RATE** MATURITY (NOTE 2)
- --------------------------------------------------------------------------------
GOVERNMENT AGENCIES--
1.7%
<S> <C> <C> <C> <C> <C>
Agency for International
Development India+ $ 2,000 5.88% 1/06/98 $ 2,002,580
Agency for International
Development Israel+ 2,391 5.94 1/06/98 2,391,251
Agency for International
Development Panama+ 4,814 5.69 1/06/98 4,843,218
------------
TOTAL GOVERNMENT
AGENCIES
(amortized cost
$9,237,049) 9,237,049
------------
<CAPTION>
MEDIUM TERM NOTES--24.8%
<S> <C> <C> <C> <C> <C>
American Express Centu-
rion+ 5,000 5.94 1/09/98 5,000,000
Asset Backed Securities
Investments+ 11,000 5.74 1/20/98 11,000,000
Banque Nationale de
Paris 5,000 9.88 5/25/98 5,076,337
Barnett Banks, Inc.+ 9,000 6.03 3/30/98 9,017,759
Bear Stearns Cos., Inc.+ 20,500 5.72-6.18 1/02/98-2/10/98 20,503,630
Fleet Financial Group,
Inc.+ 11,000 6.04 3/30/98 11,001,719
General Electric Capital
Corp. 10,000 8.00 1/15/98 10,006,527
General Motors Accept-
ance Corp.+ 11,000 5.88 2/06/98 11,016,184
Heinz (H.J.) Co. 5,380 8.00 1/05/98 5,381,070
International Business
Machines Corp. 10,000 5.81 10/01/98 9,997,725
Kansallis-Osake-Pankki 5,800 9.75 12/15/98 5,995,807
Lehman Brothers Hold-
ings, Inc.+ 4,000 6.08 2/13/98 4,004,265
Morgan Stanley Group,
Inc.+ 10,000 6.01 3/10/98 10,012,865
Prudential Funding Corp. 10,000 5.84 10/14/98 9,991,218
Sigma Finance Corp. 6,000 6.28 4/24/98 6,000,000
------------
TOTAL MEDIUM TERM NOTES
(amortized cost
$134,005,106) 134,005,106
------------
<CAPTION>
TAXABLE MUNICIPAL MEDIUM
TERM NOTES--7.5%
<S> <C> <C> <C> <C> <C>
Illinois Student Assis-
tance Corp.+ 21,000 5.87-5.92 1/07/98 21,000,000
New Hampshire State In-
dustrial Development
Authority 12,000 5.825 3/11/98 12,000,000
Texas G.O.+ 7,415 5.90 1/07/98 7,415,000
------------
TOTAL TAXABLE MUNICIPAL
MEDIUM TERM NOTES
(amortized cost
$40,415,000) 40,415,000
------------
TOTAL INVESTMENT
SECURITIES
(amortized cost
$527,314,835) 527,314,835
------------
<CAPTION>
REPURCHASE AGREEMENTS--
1.5%
<S> <C> <C> <C> <C> <C>
Joint Repurchase Agree-
ment Account (Note 3)
(cost $7,912,000) 7,912 6.30 1/02/98 7,912,000
------------
<CAPTION>
TOTAL INVESTMENTS--
<S> <C> <C> <C> <C> <C>
(amortized cost
$535,226,835*) 99.0% 535,226,835
Other assets less lia-
bilities 1.0% 5,473,849
----- ------------
NET ASSETS 100.0% $540,700,684
===== ============
</TABLE>
- --------
* At December 31, 1997 the cost of securities for Federal income tax purposes
was the same for book purposes
** Rates shown are rates in effect as of December 31, 1997
+ 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 24.2%
Banking 22.6
Securities Holding Company 10.0
Receivable Company 8.8
</TABLE>
<TABLE>
<S> <C>
Municipalities 7.5%
Industrials 6.5
Leasing 6.4
Multimedia 3.3
</TABLE>
<TABLE>
<S> <C>
Electronics 3.1%
Data Processing 1.7
Multi-industry 1.7
Gov't Agency 1.7
----
97.5%
====
</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 DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investment securities, at value (amortized cost $535,226,835)....... $535,226,835
Receivable for fund shares sold..................................... 4,619,899
Interest receivable................................................. 3,993,106
Prepaid expenses.................................................... 107,360
------------
Total assets....................................................... 543,947,200
------------
LIABILITIES:
Payable for fund shares repurchased................................. 2,460,590
Dividends payable................................................... 82,960
Accrued expenses.................................................... 341,046
Due to custodian bank............................................... 41,276
Investment advisory and management fees payable..................... 232,300
Distribution and service maintenance fees payable................... 88,344
------------
Total liabilities.................................................. 3,246,516
------------
Net assets...................................................... $540,700,684
============
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001 par value (10 billion shares authorized)........ $ 540,658
Additional paid-in capital.......................................... 540,022,383
------------
540,563,041
Accumulated undistributed net investment income..................... 137,643
------------
Net assets...................................................... $540,700,684
============
CLASS A:
Net asset value ($511,907,624/511,867,242 shares outstanding)...... $1.00
=====
CLASS B:
Net asset value ($28,391,365/28,388,937 shares outstanding)........ $1.00
=====
CLASS C:
Net asset value ($401,695/401,625 shares outstanding).............. $1.00
=====
</TABLE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.............................................. $28,439,661
-----------
EXPENSES:
Investment advisory and management fees............... $2,497,734
Transfer agent and shareholder servicing fees and ex-
penses--Class A...................................... 1,202,611
Transfer agent and shareholder servicing fees and ex-
penses--Class B...................................... 87,261
Transfer agent and shareholder servicing fees and ex-
penses--Class C...................................... 2,760
Service maintenance fees--Class A..................... 700,579
Distribution and service maintenance fees--Class B.... 291,409
Distribution and service maintenance fees--Class C.... 1,023
Custodian fees and expenses........................... 134,250
Registration fees--Class A............................ 86,636
Registration fees--Class B............................ 6,476
Registration fees--Class C............................ 2,982
Directors' fees and expenses.......................... 75,605
Audit and tax consulting fees......................... 28,145
Printing expense...................................... 20,220
Insurance expense..................................... 5,518
Legal fees and expenses............................... 5,475
Miscellaneous expenses................................ 7,757
----------
5,156,441
Less: expense offset and reimbursement................ (141,198)
-----------
Net expenses.......................................... 5,015,243
-----------
Net investment income................................. 23,424,418
-----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $23,424,418
===========
</TABLE>
See Notes to Financial Statements
<PAGE>
SUNAMERICA MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
-----------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income..................... $ 23,424,418 $ 17,081,743
------------ ------------
Net increase in net assets resulting from
operations............................... 23,424,418 17,081,743
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income (Class A)...... (22,107,661) (15,491,408)
From net investment income (Class B)...... (1,279,869) (1,583,636)
From net investment income (Class C)...... (4,562) --
------------ ------------
Total dividends and distributions to
shareholders............................. (23,392,092) (17,075,044)
INCREASE IN NET ASSETS FROM FUND SHARE
TRANSACTIONS (NOTE 5)..................... 112,855,857 59,699,130
------------ ------------
Total increase in net assets.............. 112,888,183 59,705,829
NET ASSETS:
Beginning of year......................... 427,812,501 368,106,672
------------ ------------
End of period (including undistributed net
investment income of $137,643 and
$105,317 at December 31, 1997 and
December 31, 1996, respectively)......... $540,700,684 $427,812,501
============ ============
</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>
12/31/93 $1.000 $0.023 $0.023 $(0.023) $1.000 2.32% $189,160 1.16% 2.30%
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
<CAPTION>
CLASS B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/24/93-
12/31/93 $1.000 $0.004 $0.004 $(0.004) $1.000 0.44%(4) $41,915 1.69%(5) 1.69%(5)
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
<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%(4) $402 1.75%(6) 4.01%
</TABLE>
- --------
(1) Total return does not reflect sales load
(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
-------- --------
<S> <C> <C>
Class A......... 0.03% 0.02%
Class B......... 0.04% 0.02%
</TABLE>
(4) Total return is not annualized
(5) Annualized
(6) Net of 4.474% expense reimbursement (based on average net assets)
See Notes to Financial Statements
<PAGE>
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1997
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--DECEMBER 31, 1997--(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:
EXPIRATION
------------------------------------------------------------
2002 2003 2004
------ ------- -------
$5,123 $11,725 $15,660
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 December 31, 1997, the Fund had a 5.92% undivided interest, which
represented $7,912,000 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, 6.30% dated 12/31/97, in the
principal amount of $133,556,000 repurchase price $133,602,745 due 1/2/98
collateralized by $100,200,000 U.S. Treasury Notes 6.25% due 3/31/99 and
$33,356,000 U.S. Treasury Notes 4.75% due 10/31/98, approximate aggregate
value $137,737,768.
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 year ended December 31, 1997, SAAMCO reimbursed $5,383 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 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".
<PAGE>
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1997--(CONTINUED)
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
year ended December 31, 1997, SACS earned fees of $993,011 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 year ended December 31, 1997, SACS informed the Fund
that it received approximately $169,724 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 year ended December 31, 1997
the Fund (Class A, Class B and Class C) incurred expenses of $1,098,999 to
reimburse SAFS pursuant to the terms of the Service Agreement. Of this
amount, $102,208 was payable to SAFS at December 31, 1997.
NOTE 5. CAPITAL SHARE TRANSACTIONS
Transactions in shares of each class, all at $1.00 per share, for the year
ended December 31, 1997 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
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997
-------------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold............. 2,362,300,860 1,460,788,582 116,212,070 122,015,372 2,571,799
Reinvested dividends.... 21,803,390 15,326,870 1,087,163 1,346,953 3,398
Shares redeemed......... (2,270,925,578) (1,393,731,702) (118,023,672) (146,046,945) (2,173,572)
-------------- -------------- ------------ ------------ ----------
Net increase (decrease). 113,178,672 82,383,750 (724,439) (22,684,620) 401,625
============== ============== ============ ============ ==========
</TABLE>
<PAGE>
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1997--(CONTINUED)
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
December 31, 1997, the Fund had accrued $48,287 for the Retirement Plan,
which is included in accrued expenses on the Statement of Assets and
Liabilities and for the year ended December 31, 1997, expensed $17,926 for
the Retirement Plan, which is included in Directors' fees and expenses on
the Statement of Operations.
<PAGE>
SUNAMERICA MONEY MARKET FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of SunAmerica Money Market Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio 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 SunAmerica Money Market Fund (the
"Fund") at December 31, 1997, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
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 generally accepted auditing standards 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 December 31, 1997 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York
February 13, 1998
<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
Abbe P. Stein, Assistant Secretary New York, NY 10017-3204
CUSTODIAN AND TRANSFER AGENT
State Street Bank & Trust Company
P.O. Box 419572
Kansas City, MO 64141-6572
- -------------------------------------------------------------------------------
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<TABLE>
<CAPTION>
CLASS
-----------
A B C
EQUITY FUNDS --- --- ---
<S> <C> <C> <C>
Balanced Assets 51 551
Blue Chip Growth 522 22
Mid-Cap Growth 71 571
Small Company
Growth 36 536 836
Growth and
Income 24 524 824
</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
SERIES --- --- ---
<S> <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
</TABLE>
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<PAGE>
December 31, 1997
SunAmerica
Money Market
Fund
Annual
Report
LOGO SunAmerica
800.858.8850
SunAmerica Money Market Fund
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
1-800-858-8850
This report is submitted solely for the general information of shareholders of
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setting forth details of the Fund, which must precede or accompany this report.
Sponsored by:
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