<PAGE>
SunAmerica
- ----------
Money Market Fund
----------------------
1999 Semiannual Report
----------------------
[LOGO OF SUNAMERICA MUTUAL FUNDS APPEARS HERE]
<PAGE>
SunAmerica Money Market Funds Annual Report
August 20, 1999
Dear Shareholder:
For the six months ended June 30, 1999, the Fund's Class A shares returned
1.94% compared to 2.09% for its Lipper category. For the one year ended June
30, 1999, the Fund's Class A posted a total return of 4.51%. This compares to a
4.52% return for its Lipper category. The SunAmerica Money Market Fund Class A
had a SEC 7-day effective yield of 4.28% and a SEC 7-day current yield of
4.19%, both as of June 30, 1999.
Overall, the six-month period ended June 30, 1999 was an after-shock from the
global financial crisis that had dominated the money markets throughout 1998.
As the financial markets began to settle down in the first quarter of 1999 and
foreign economies showed signs of recovery, market participants shifted their
focus from international turmoil back to the U.S. Economic data supported the
"New Era" theme of strong growth with little or no signs of inflation. During
the second quarter, the economy remained strong and the Federal Reserve Board
adopted a tightening bias, but remained in a non-action mode. Together, these
factors pushed yields on short-term money market securities significantly
higher.
Finally, as expected, concerns that a strong economy would rekindle inflation
led the Federal Reserve Board to raise the targeted federal funds rate by 0.25%
to 5.00% at its June 30th meeting. While there is still little evidence of
inflation, this tightening was intended to make sure a spiral of rising wages
and prices does not derail the economy.
June 1999 was the first time in over two years that the Federal Reserve Open
Market Committee voted to raise its target for the federal funds rate. Adopting
a tighter monetary policy with the absence of any significant signs of
inflation indicates that the Fed is pre-emptive and keeping "ahead of the
curve." The continued strength of the U.S. economy, along with the easing in
the global economic crisis following the Russian and Brazilian devaluations,
are the major factors behind the increase. Although strong productivity gains
have offset a tightening labor market, signs of slower economic growth are
needed to keep the Fed on hold.
Given this outlook, we may allow the weighted average maturity of the Fund to
roll down from the somewhat long benchmark position we maintained for most of
the semiannual period to a neutral position in the near term. This gives us
added flexibility to lock in the higher yields anticipated should the Fed raise
rates again.
We will also, of course, continue to search for the best relative valued
securities, as we seek a high level of current income as is consistent with
liquidity and stability of capital.
/s/ Brian H. Wiese
Brian H. Wiese
Portfolio Manager
1
<PAGE>
SunAmerica Money Market Fund
STATEMENT OF ASSETS AND LIABILITIES -- December 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investment securities, at value (amortized cost $779,028,489)........ $779,028,489
Cash................................................................. 1,252,655
Receivables for fund shares sold..................................... 15,345,904
Interest receivable.................................................. 3,832,995
Prepaid expenses..................................................... 206,579
------------
Total assets....................................................... 799,666,622
------------
LIABILITIES:
Payable for fund shares repurchased.................................. 10,469,498
Dividends payable.................................................... 1,208,169
Investment advisory and management fees payable...................... 316,546
Accrued expenses..................................................... 150,893
Distribution and service maintenance fees payable.................... 130,473
------------
Total liabilities.................................................. 12,275,579
------------
Net assets........................................................ $787,391,043
============
NET ASSETS WERE COMPOSED OF:
Common stock, $.001 par value (10 billion shares authorized)......... $ 787,380
Additional paid-in capital........................................... 786,498,032
------------
787,285,412
Accumulated undistributed net investment income...................... 105,631
------------
Net assets........................................................ $787,391,043
============
Class A:
Net asset value($735,948,058/735,937,388 shares outstanding)......... $ 1.00
============
Class B:
Net asset value($46,674,943/46,674,944 shares outstanding)........... $ 1.00
============
Class II:
Net asset value($4,768,042/4,767,843 shares outstanding)............. $ 1.00
============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
SunAmerica Money Market Fund
STATEMENT OF OPERATIONS -- For the year ended December 31, 1998
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.............................................. $19,382,304
-----------
EXPENSES:
Investment advisory and management fees............... $1,860,086
Transfer Agent and shareholder servicing fees and
expenses-Class A..................................... 927,100
Transfer Agent and shareholder servicing fees and
expenses-Class B..................................... 62,542
Transfer Agent and shareholder servicing fees and
expenses-Class II.................................... 5,410
Service maintenance fees-Class A...................... 536,227
Distribution and service maintenance fees-Class B..... 187,805
Distribution and service maintenance fees-Class II.... 17,472
Custodian fees and expenses........................... 73,669
Registration fees-Class A............................. 35,748
Registration fees-Class B............................. 4,173
Registration fees-Class II............................ 971
Directors' fees and expenses.......................... 10,376
Legal fees and expenses............................... 4,525
Insurance expense..................................... 3,124
Audit and tax consulting fees......................... 905
Miscellaneous expenses................................ 2,087
----------
3,732,220
-----------
Less: expense offset and reimbursement............... (64,186)
-----------
Net expenses......................................... 3,668,034
-----------
Net investment income.................................. 15,714,270
-----------
Increase in net assets resulting from operations....... $15,714,270
===========
</TABLE>
See Notes Financial Statements
3
<PAGE>
SunAmerica Money Market Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the six months
ended For the year
June 30, 1999 ended
(unaudited) December 31, 1998
------------------ -----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income.................... $ 15,714,270 $ 29,187,296
------------ ------------
Net increase in net assets resulting from
operations............................... 15,714,270 29,187,296
Dividends and distributions to
shareholders:
From net investment income (Class A)..... (14,948,232) (27,620,422)
From net investment income (Class B)..... (700,558) (1,562,707)
From net investment income (Class II).... (64,509) (37,151)
------------ ------------
Total dividends and distributions to
shareholders............................. (15,713,299) (29,220,280)
Increase in net assets from fund share
transactions (Note 5).................... 63,328,409 183,393,963
------------ ------------
Total increase in net assets.............. 63,329,380 183,360,979
Net Assets:
Beginning of year........................ 724,061,663 540,700,684
------------ ------------
End of period (including undistributed
net investment income of $105,631 and
$104,660 at June 30, 1999 and December
31, 1998, respectively)................. $787,391,043 $724,061,663
============ ============
</TABLE>
See Notes to Financial Statements
4
<PAGE>
SunAmerica Money Market Fund
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
- ------------------------ --------- ---------- ---------- ---------- ------ --------- -------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
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
12/31/98................ 1.000 0.047 0.047 (0.047) 1.000 4.80 687,801 0.95(3) 4.70
6/30/99(6)............. 1.000 0.021 0.021 (0.021) 1.000 4.51 735,948 0.95(3)(4) 4.18(4)
Class B
-------
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
12/31/98................ 1.000 0.039 0.039 (0.039) 1.000 3.96 34,828 1.75(3) 3.88
6/30/99(6)............. 1.000 0.017 0.017 (0.017) 1.000 3.66 46,675 1.73(4) 3.46(4)
Class II
--------
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)
12/31/98................ 1.000 0.039 0.039 (0.039) 1.000 3.94 1,433 1.75(5) 3.83
6/30/99(6)............. 1.000 0.017 0.017 (0.017) 1.000 3.65 4,768 1.75(4)(5) 3.82(4)
</TABLE>
- ------
(1) Total return is not annualized and 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 custody and transfer
agent expense credits as follows:
<TABLE>
<CAPTION>
12/31/96 12/31/97 12/31/98 6/30/99
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Class A.......... 0.03% 0.02% 0.03% 0.02%
Class B.......... 0.04% 0.02% 0.01% --
</TABLE>
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
12/31/97 12/31/98 6/30/99
-------- -------- -------
<S> <C> <C> <C>
Class II................... 4.74% 2.55% 0.38%
</TABLE>
(6) Unaudited
See Notes to Financial Statements
5
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 1998
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT-
2.8%
Deutsche Bank AG.......... $10,000 5.03% 1/07/00 $ 9,997,547
Societe Generale.......... 12,000 5.03 1/14/00 11,998,307
-----------
Total Certificates of
Deposit
(amortized cost
$21,995,854)............. 21,995,854
-----------
COMMERCIAL PAPER-42.0%
Allied Signal, Inc........ 10,000 5.25 2/28/00 9,647,083
American Home Products
Corp..................... 10,000 4.78 8/10/99 9,946,889
Apreco, Inc............... 20,000 5.10-5.15 9/16/99-9/17/99 19,779,334
AT&T Corp................. 15,000 5.18 7/06/99 14,989,208
Atlantis One Funding
Corp..................... 20,000 4.90-5.18 9/14/99-9/27/99 19,771,294
Banco Mercantile del Norte
SA....................... 10,000 4.79 7/23/99 9,970,728
BellSouth
Telecommunications, Inc.. 10,000 5.55 7/01/99 10,000,000
Cargill, Inc.............. 10,000 4.82 7/08/99 9,990,628
Dairy Investments Ltd..... 10,000 4.82 7/07/99 9,991,967
Delaware Funding Corp..... 30,000 4.81-5.15 7/12/99-9/14/99 29,852,625
Edison Asset
Securitization LLP....... 20,000 4.85 7/16/99-8/30/99 19,898,958
Falcon Asset
Securitization, Inc...... 20,000 5.15-5.21 8/12/99-8/16/99 19,873,411
Giro Funding Corp......... 7,000 4.80 7/12/99 6,989,733
Hershey Foods Corp........ 15,000 5.17 7/06/99 14,989,229
International
Securitization Corp...... 10,000 5.10 9/13/99 9,894,961
Ipalco Enterprises, Inc... 30,000 4.80-4.85 7/07/99-8/12/99 29,909,134
KZH Holding Corp.......... 10,000 4.86 7/06/99 9,993,250
Lucent Technologies, Inc.. 10,000 4.95 7/27/99 9,964,250
Moat Funding LLC.......... 10,000 5.15 9/13/99 9,894,139
Monsanto Co............... 20,800 4.82-4.86 8/11/99-8/23/99 20,669,164
Nike, Inc................. 5,000 5.60 7/01/99 5,000,000
R.O.S.E. Funding No. 1
Ltd...................... 10,000 4.81 7/12/99 9,985,303
Sigma Finance Corp........ 10,000 4.83 7/15/99 9,981,217
Southland Corp............ 10,000 4.84 7/09/99 9,989,244
-----------
Total Commercial Paper
(amortized cost
$330,971,749)............ 330,971,749
-----------
GOVERNMENT AGENCIES-2.1%
Agency for International
Development India+....... 1,000 5.34 7/06/99 1,000,069
Agency for International
Development Israel+...... 1,017 5.31 7/06/99 1,016,927
Agency for International
Development Panama+...... 4,402 5.21 7/06/99 4,425,848
Federal Home Loan Bank.... 10,000 5.12 5/17/00 10,000,000
-----------
Total Government Agencies
(amortized cost
$16,442,844)............. 16,442,844
-----------
</TABLE>
6
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 1998 -- (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MEDIUM TERM NOTES-40.7%
Aetna Services, Inc.+... $10,000 5.66% 11/29/99 $10,000,000
American Express Credit
Corp.+................. 20,000 4.95 7/01/99 20,000,000
Bear Stearns Cos.,
Inc.+.................. 10,000 5.12 1/20/00 10,005,508
Chase Manahattan Corp.+. 10,000 5.00 7/26/99 9,994,220
Citicorp.+.............. 10,000 5.14 9/17/99 10,000,000
Citicorp................ 6,000 5.40 10/20/99 6,007,725
Commerzbank AG.......... 10,000 5.31 3/01/00 9,998,714
FCC National Bank....... 10,000 5.44 2/23/00 9,997,811
First Bank of Sioux
Falls+................. 3,000 4.99 7/21/99 2,999,975
First National Bank of
Chicago................ 10,000 4.93 7/06/99 10,000,093
General Motors
Acceptance Corp.+...... 10,000 5.05 8/02/99 10,006,375
Goldman Sachs & Co.+.... 16,000 5.08-5.09 7/12/99-7/26/99 16,000,000
Goldman Sachs & Co...... 20,000 5.13 2/25/00 20,000,000
IBM Credit Corp......... 8,000 5.61 7/30/99 7,999,534
Liberty Lighthouse
Funding+............... 18,000 4.97-5.14 7/15/99-9/17/99 17,999,585
Merrill Lynch & Co.,
Inc.+.................. 17,000 5.06-5.11 7/01/99-8/23/99 16,995,528
Merrill Lynch & Co.,
Inc.................... 10,000 8.25 11/15/99 10,113,596
Morgan (J.P.) & Co.,
Inc.+.................. 10,000 4.90 7/06/99 9,998,270
Morgan Stanley Group,
Inc.+.................. 12,000 5.23 9/13/99 12,000,000
Northern Rock PLC+...... 10,000 5.12 9/14/99 10,000,000
Phillip Morris Cos.,
Inc.+.................. 22,000 6.15 9/15/99 22,092,445
Portland General
Electric Co............ 3,250 6.63 8/31/99 3,254,756
Rabobank Nederland NV... 10,000 5.32 3/03/00 9,996,760
7 World Trade Center
Finance+............... 10,000 5.25 9/01/99 10,000,000
Sigma Finance Corp...... 20,000 5.19-5.42 4/27/00-5/24/00 20,000,000
Sigma Finance Corp.+.... 5,000 5.66 7/01/99 5,000,000
Southtrust Bank+........ 10,000 4.95 7/01/99 9,995,012
Toronto Dominion+....... 10,000 4.84 7/13/99 9,999,135
-----------
Total Medium Term Notes
(amortized cost
$320,455,042).......... 320,455,042
-----------
TAXABLE MUNICIPAL MEDIUM
TERM NOTES-6.4%
California Pollution
Control Financing+..... 6,500 5.28 7/07/99 6,500,000
Courtyards Mackinaw
LLC+................... 5,355 5.11 7/01/99 5,355,000
Illinois Student
Assistance Corp.+...... 21,000 5.18-5.23 7/07/99 21,000,000
New Hampshire State
Industrial Development
Authority.............. 10,000 4.95 8/12/99 10,000,000
Texas G.O.+............. 7,415 5.21 7/07/99 7,415,000
-----------
Total Taxable Municipal
Medium Term Notes
(amortized cost
$50,270,000)........... 50,270,000
-----------
Total Investment
Securities
(amortized cost
$740,135,489).......... 740,135,489
-----------
</TABLE>
7
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 1998 -- (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT-4.9%
<S> <C> <C> <C> <C> <C>
Joint Repurchase Agreement
Account (Note 3)
(cost $38,893,000)......... $38,893 4.70% 7/01/99 $ 38,893,000
------------
TOTAL INVESTMENTS-
(amortized cost
$779,028,489*)............. 98.9% 779,028,489
Other assets less
liabilities................ 1.1% 8,362,554
----- ------------
NET ASSETS.................. 100.0% $787,391,043
===== ============
</TABLE>
* At June 30, 1999 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, 1999
+ 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@
Securities Holding Company 23.7% Finance 6.1%
Receivable Company 18.5 Utilities 4.2
Industrials 18.4 Gov't Agency 2.1
Banking 13.3 Leasing 1.3
----
Municipalities 6.4 94.0%
====
@ As grouped by Moody's Investors Service Global Short Term Market Record
See Notes to Financial Statements
8
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- June 30, 1999 (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 offers multiple classes of shares. The classes within the Fund are
presented in the Statement of Assets and Liabilities. The cost structure for
each class is as follows:
Class A shares-- Offered at the next determined net asset value per share.
Class B shares-- Offered at the next determined net asset value per share,
although a declining contingent deferred sales charge
("CDSC") 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 are no longer subject to a
distribution fee.
Class II shares-- Offered at the next determined net asset value per share.
Certain redemptions made within the first year of the date
of purchase are subject to a contingent deferred sales
charge.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions. Class A, Class B, and Class II shares each make
distribution and account maintenance and service fee payments under the
distribution plans pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Act"), except that Class B shares and Class II 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
9
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- June 30, 1999 (unaudited) -- (continued)
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.
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.
At December 31, 1998, the Fund had a capital loss carryforward available of
$40,283 which will expire as follows:
<TABLE>
<CAPTION>
Expiration
--------------------------------------------------------------------------------------
2002 2003 2004 2005
------ ------- ------- ------
<S> <C> <C> <C>
$5,123 $11,725 $15,660 $7,775
</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.
10
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- June 30, 1999 (unaudited) -- (continued)
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 $770 of such
capital losses.
Note 3. Joint Repurchase Agreement Account
As of June 30, 1999, the Fund had a 16.25% undivided interest, which
represented $38,893,000 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:
State Street Bank & Trust Co. Repurchase Agreement, 4.70% date 6/30/99, in
the principal amount of $239,307,000, repurchase price $239,338,243 due
7/1/99 collateralized by $152,205,000 U.S. Treasury Bonds 12.00% due
8/15/13, $25,195,000 U.S. Treasury Notes 6.25% due 2/15/07, and $955,000
U.S. Treasury Notes 5.63% due 12/31/99, approximate aggregate value
$245,064,987.
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 agreed to waive fees or reimburse expenses, if necessary, to keep
annual operating expenses at or below 1.75% for Class II Shares. For the six
months ended June 30, 1999 SAAMCO reimbursed $8,198 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
11
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- December 31, 1998 -- (continued)
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 II Plan". In adopting the Class A
Plan, the Class B Plan and the Class II 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 II shares will not be used
to subsidize the sale of Class A shares.
Under the Class B Plan and the Class II 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 II 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 II 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, 1999, SACS earned fees of
$741,504 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 II shares. For the six months ended June 30, 1999, SACS informed the
Fund that it received approximately $160,479 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,
1999 the Fund (Class A, Class B and Class II) incurred expenses of $836,645
to reimburse SAFS pursuant to the terms of the Service Agreement. Of this
amount, $142,701 was payable to SAFS at June 30, 1999.
12
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- December 31, 1998 -- (continued)
Note 5. Capital Share Transactions
Transactions in shares of each class, all at $1.00 per share, for the six
months ended June 30, 1999 and for the prior year were as follows:
<TABLE>
<CAPTION>
Money Market Fund
---------------------------------------------------------------------------------------------
Class A Class B Class II
------------------------------- ----------------------------- -----------------------------
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 30,1999 December 31, June 30,1999 December 31, June 30,1999 December 31,
(unaudited) 1998 (unaudited) 1998 (unaudited) 1998
---------------- -------------- ---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold........... 1,811,801,261 3,164,014,503 77,301,315 119,850,351 19,594,975 14,608,130
Reinvested dividends.. 13,725,957 27,236,164 567,248 1,348,769 47,915 28,248
Shares redeemed....... (1,777,381,017) (3,015,326,722) (66,021,315) (114,760,361) (16,307,930) (13,605,120)
-------------- -------------- ----------- ------------ ----------- -----------
Net increase.......... 48,146,201 175,923,945 11,847,248 6,438,759 3,334,960 1,031,258
============== ============== =========== ============ =========== ===========
</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, 1999, the Fund had accrued $79,756 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, 1999 expensed $10,376 for the Retirement
Plan, which is included in Directors' fees and expenses on the Statement of
Operations.
13
<PAGE>
SunAmerica Money Market Fund
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.-7:00 p.m.
(Eastern time).
Here's How it Works
All you need is:
* A Touch-Tone Telephone
* Your account number
* Your Personal Identification number "PIN"
(the last four digits of your Social Security number, a tax identification
number or a number chosen by you)
* Your Fund Code
<TABLE>
<CAPTION>
CLASS CLASS CLASS
----------- ----------- -----------
A B II A B II A B II
EQUITY FUNDS --- --- --- INCOME FUNDS --- --- --- STYLE SELECT SERIES --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balanced Assets 51 551 731 U.S. Government Securities 70 570 N/A Aggressive Growth 701 711 771
Blue Chip Growth 522 22 820 Federal Securities 534 34 N/A Mid-Cap Growth 702 712 772
Mid-Cap Growth 71 571 821 Diversified Income 580 80 N/A Value 704 714 774
Small Company Growth 36 536 836 High Income 28 228 828 International Equity 703 713 773
Growth and Income 24 524 824 Tax Exempt Insured 33 533 N/A Small-Cap Value 705 715 775
"Dogs" of Wall Street 720 730 740 Money Market 35 535 735 Large-Cap Value 706 716 776
Focused Growth and Income 708 728 778
Large-Cap Growth 709 719 779
Focus 722 732 742
Press the following Touch-Tone Button(s)
to make your selection: ------------------------------------------------------
2-1 Account Balances and Recent Transactions
------------------------------------------------
[1]--Fund Prices and Dividend Information 2-2 Fund Prices and Dividend Information on
------------------------------------------------ Funds You Own
------------------------------------------------
[2]--To Work with Funds You Own ------------ 2-3 To Process an Exchange
------------------------------------------------
------------------------------------------------ 2-4 To Change your Personal Identification Number
[3]--Order Statements and Checkbooks ------------------------------------------------------
------------------------------------------------
------------------------------------------------ . Press 0 at anytime during this recording to be transferred to a service
[4]--Fund Objectives and Fund Literature Information representative Monday - Friday, 8:30 am to 7:00 pm, EST.
------------------------------------------------
------------------------------------------------ . To return to the main or previous menu press "*".
[5]--Mailing and Wiring Instructions
------------------------------------------------ . When working with a list of funds, you may touch "9" to fast forward to
------------------------------------------------ the next fund or "7" to go back to the previous fund.
[6]--Year-End Information and Duplicate Tax Forms
------------------------------------------------
</TABLE>
14
<PAGE>
Trustees
S. James Coppersmith
Samuel M. Eisenstat
Stephen J. Gutman
Peter A. Harbeck
Peter McMillan III
Sebastiano Sterpa
Officers
Peter A. Harbeck, President
Brian Wiese, Vice President
Robert M. Zakem, Secretary
Peter C. Sutton, Treasurer
John T. Genoy, Assistant Treasurer
Donna M. Handel, Assistant Treasurer
Cheryl L. Hawthorne, Assistant Treasurer
Abbe P. Stein, Assistant Secretary
Peter E. Pisapia, Assistant Secretary
Investment Adviser
SunAmerica Asset Management Corp.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Distributor
SunAmerica Capital Services, Inc.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Shareholder Servicing Agent
SunAmerica Fund Services, Inc.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Custodian and Transfer Agent
State Street Bank and Trust Company
P.O. Box 419572
Kansas City, MO 64141-6572
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 OF SUNAMERICA MUTUAL FUNDS APPEARS HERE]
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
- ----------------
Bulk Rate
U.S. Postage
PAID
Kansas City, MO
Permit No. 2891
- ----------------
