<PAGE>
- -----------
SunAmerica
- -----------
Money Market Fund
------------------
1999 Annual Report
------------------
[LOGO] SunAmerica
Mutual Funds
<PAGE>
SunAmerica Money Market Funds Annual Report
February 16, 2000
Dear Shareholders:
For the twelve months ending December 31, 1999, the SunAmerica Money Market
Fund Class A shares returned 4.44%.* At year-end, the Funds Class A had an SEC
7-day effective yield of 5.04% and an SEC 7-day current yield of 4.92%.
During the Fund's annual period, three major factors combined to push yields
on short-term money market securities significantly higher:
. The ongoing extraordinary performance of the U.S. economy. Rapid U.S.
economic growth, record equity market returns, benign inflation, and the
lowest unemployment rate in a generation powered the period's strong
consumer confidence and consumption.
. The actions of the Federal Reserve Board. The Fed took the position that
interest rate increases were needed to combat inflationary pressures. The
Fed believed that despite previous increases in productivity, tight labor
markets eventually would cause increases in labor costs and, ultimately,
consumer prices. Thus, the Federal Reserve Board raised interest rates by
0.25% three times--on June 30, August 24, and again on November 16--for a
year-end rate of 5.50%. These increases returned the rate to the level it
had been prior to the global economic crisis of 1998. If not for Y2K
concerns, a fourth move by the Fed would have been likely in December.
. The liquidity concerns surrounding Year 2000. Driven by Y2K-related
uncertainties, money market investors and issuers believed liquidity would
be scarce over year-end. As a result, issuers flooded the market with
securities early, thus driving yields still higher. As with most other Y2K
issues, however, these liquidity concerns did not materialize into
problems for the Fund and the money markets.
Looking ahead for the near term, we believe the U.S. economy still has
substantial momentum and that a tighter labor market will continue to boost
consumer confidence. Therefore, we also believe that the Federal Reserve Board
will raise interest rates further sometime in the first quarter of the year
2000, as it seeks to slow real economic growth to a more sustainable pace.
To prepare for this possibility, we intend to maintain a neutral to shorter-
than-benchmark average weighted maturity position over the near term. (As of
December 31, 1999, the Fund's average weighted maturity stood at 39 days,
slightly less than the Donoghue Average.) We will also, of course, continue to
search for the best relatively valued securities, and will structure the
portfolio to be flexible in order to accommodate any changes in our economic
outlook.
/s/ Brian H. Wiese
Brian H. Wiese
Portfolio Manager
* Return does not reflect sales charges.
1
<PAGE>
SunAmerica Money Market Fund
STATEMENT OF ASSETS AND LIABILITIES -- December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment securities, at value (amortized cost $904,928,649)...... $904,928,649
Cash............................................................... 332,368
Receivables for fund shares sold................................... 30,075,490
Interest receivable................................................ 6,059,686
Prepaid expenses................................................... 7,319
------------
Total assets..................................................... 941,403,512
------------
LIABILITIES:
Payable for fund shares repurchased................................ 15,851,401
Investment advisory and management fees payable.................... 367,010
Accrued expenses................................................... 382,894
Distribution and service maintenance fees payable.................. 141,341
Dividends payable.................................................. 99,734
------------
Total liabilities................................................ 16,842,380
------------
Net assets...................................................... $924,561,132
============
NET ASSETS WERE COMPOSED OF:
Common stock, $.001 par value (10 billion shares authorized)....... $ 924,529
Additional paid-in capital......................................... 923,510,062
------------
924,434,591
Accumulated undistributed net investment income.................... 126,541
------------
Net assets...................................................... $924,561,132
============
Class A:
Net asset value ($881,223,354/881,191,761 shares outstanding)...... $ 1.00
============
Class B:
Net asset value ($35,102,538/35,102,539 shares outstanding)........ $ 1.00
============
Class II:
Net asset value ($8,235,240/8,235,054 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, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.............................................. $43,015,830
-----------
EXPENSES:
Investment advisory and management fees............... $3,948,616
Transfer Agent and shareholder servicing fees and
expenses-Class A..................................... 1,972,134
Transfer Agent and shareholder servicing fees and
expenses-Class B..................................... 132,117
Transfer Agent and shareholder servicing fees and
expenses-Class II.................................... 10,905
Service maintenance fees-Class A...................... 1,140,729
Distribution and service maintenance fees-Class B..... 396,861
Distribution and service maintenance fees-Class II.... 55,995
Custodian fees and expenses........................... 231,041
Registration fees-Class A............................. 76,049
Registration fees-Class B............................. 8,819
Registration fees-Class II............................ 3,111
Printing expenses..................................... 67,200
Directors' fees and expenses.......................... 20,926
Audit and tax consulting fees......................... 49,825
Insurance expense..................................... 5,037
Legal fees and expenses............................... 9,125
Miscellaneous expenses................................ 6,947
----------
8,135,437
-----------
Less: expense offset and custody credits earned on
cash balances....................................... (113,055)
-----------
Net expenses......................................... 8,022,382
-----------
Net investment income.................................. 34,993,448
-----------
Increase in net assets resulting from operations....... $34,993,448
===========
</TABLE>
See Notes to Financial Statements
3
<PAGE>
SunAmerica Money Market Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the year For the year
ended ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................... $ 34,993,448 $ 29,187,297
------------ ------------
Net increase in net assets resulting from
operations................................ 34,993,448 29,187,297
Dividends and distributions to
shareholders:
From net investment income (Class A)...... (33,192,291) (27,620,422)
From net investment income (Class B)...... (1,556,098) (1,562,707)
From net investment income (Class II)..... (223,178) (37,151)
------------ ------------
Total dividends and distributions to
shareholders.............................. (34,971,567) (29,220,280)
Increase in net assets from fund share
transactions (Note 5)..................... 200,477,588 183,393,962
------------ ------------
Total increase in net assets............... 200,499,469 183,360,979
Net Assets:
Beginning of year......................... 724,061,663 540,700,684
------------ ------------
End of period (including undistributed net
investment income of $126,541 and
$104,660 at December 31, 1999 and
December 31, 1998, respectively)......... $924,561,132 $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
-------
12/31/95................ $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(2) 4.52
12/31/97................ 1.000 0.047 0.047 (0.047) 1.000 4.82 511,908 0.98(2) 4.73
12/31/98................ 1.000 0.047 0.047 (0.047) 1.000 4.80 687,801 0.95(2) 4.70
12/31/99................ 1.000 0.044 0.044 (0.044) 1.000 4.44 881,223 0.95(2) 4.36
Class B
-------
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(2) 3.76
12/31/97................ 1.000 0.040 0.040 (0.040) 1.000 4.03 28,391 1.74(2) 3.95
12/31/98................ 1.000 0.039 0.039 (0.039) 1.000 3.96 34,828 1.75(2) 3.88
12/31/99................ 1.000 0.035 0.035 (0.035) 1.000 3.59 35,103 1.75(2) 3.53
Class II
--------
10/2/97-12/31/97........ $1.000 $0.010 $0.010 $(0.010) $1.000 1.00% $ 402 1.75%(3)(4) 4.01%(3)
12/31/98................ 1.000 0.039 0.039 (0.039) 1.000 3.94 1,433 1.75(4) 3.83
12/31/99................ 1.000 0.035 0.035 (0.035) 1.000 3.57 8,235 1.61 3.59
</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 as follows:
<TABLE>
<CAPTION>
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Class A......... 0.05% 0.03% 0.02% 0.03% 0.01%
Class B......... 0.13% 0.04% 0.02% 0.01% --
</TABLE>
(3) Annualized
(4) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
12/31/97 12/31/98
-------- --------
<S> <C> <C>
Class II............................ 4.74% 2.55%
</TABLE>
See Notes to Financial Statements
5
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT-
4.5%
Commerzbank AG........... $10,000 5.31% 3/01/00 $ 9,999,684
Deutsche Bank AG......... 10,000 5.03 1/07/00 9,999,922
Rabobank Nederland NV.... 10,000 5.32 3/03/00 9,999,183
Societe Generale......... 12,000 5.03 1/14/00 11,999,888
------------
Total Certificates of
Deposit
(amortized cost
$41,998,677)............ 41,998,677
------------
COMMERCIAL PAPER-57.6%
Abbey National North
America................. 15,000 6.18 1/10/00 14,976,825
Aegon Funding Corp. ..... 10,000 5.75 1/25/00 9,961,667
Alliant Energy Corp. .... 10,000 5.88 2/08/00 9,937,933
Allied Signal, Inc....... 10,000 5.25 2/28/00 9,915,417
Apreco, Inc.............. 30,000 5.97-6.12 1/27/00-2/15/00 29,814,467
Atlantis One Funding
Corp. .................. 20,000 5.80-5.90 1/25/00-1/28/00 19,917,167
Barton Capital Corp...... 10,000 6.15 1/14/00 9,977,792
Bear Stearns Cos., Inc... 20,000 5.99-6.43 1/12/00-1/27/00 19,935,258
British
Telecommunications PLC.. 10,000 5.95 1/24/00 9,961,986
Cargill, Inc. ........... 10,000 6.70 1/14/00 9,975,806
Chase Manhattan Corp..... 10,000 5.67 2/07/00 9,941,725
Compass Securitization
LLC..................... 10,000 6.30 1/12/00 9,980,750
Dean Foods Co. .......... 10,000 5.94 1/18/00 9,971,950
Delaware Funding Corp. .. 20,000 5.83-6.07 1/26/00-2/24/00 19,870,397
Diageo Capital PLC....... 10,000 5.64 1/25/00 9,962,400
Donnelley (R.R.) & Sons
Co...................... 10,000 5.94 1/24/00 9,962,050
DuPont (E.I.) de Nemours
& Co.................... 10,000 5.55 2/11/00 9,936,792
Edison Asset
Securitization LLP...... 20,000 5.85 1/31/00-2/29/00 19,855,375
Estee Lauder Cos., Inc... 10,000 5.77 2/18/00 9,923,133
Falcon Asset
Securitization, Inc..... 20,000 6.30-6.62 1/07/00-1/21/00 19,952,722
Govco., Inc.............. 30,000 5.87-5.95 1/27/00-2/10/00 29,837,442
ING America Insurance
Holdings, Inc. ......... 10,000 5.83 2/17/00 9,923,886
Ipalco Enterprises, Inc.. 10,000 5.93 1/20/00 9,968,703
Irish Permanent Treasury
PLC..................... 20,000 5.90-6.00 2/04/00-2/10/00 19,877,611
Kitty Hawk Funding
Corp. .................. 30,000 5.44-5.86 1/21/00-2/15/00 29,829,080
Moat Funding LLC......... 10,000 5.95 2/23/00 9,912,403
National Rural Utilities. 10,000 5.78 2/11/00 9,934,172
Park Avenue Receivables
Corp.+.................. 10,000 6.20 1/22/00 10,000,000
Perry IV Funding Corp.... 10,000 5.90 1/18/00 9,972,139
Preferred Receivables
Funding Corp. .......... 10,000 5.97 1/13/00 9,980,100
Riverwoods Funding
Corp. .................. 10,000 6.00 1/10/00 9,985,000
Rockwell International
Corp. .................. 10,000 5.73 2/01/00 9,950,658
7-Eleven, Inc............ 30,000 5.93-5.95 2/22/00-3/03/00 29,722,978
Silver Tower US Funding
LLC..................... 30,000 5.90-6.09 2/07/00-3/03/00 29,745,141
Surrey Funding Corp...... 10,000 6.15 1/28/00 9,953,875
</TABLE>
6
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 1999 -- (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER-
(continued)
Weyerhaeuser Co. ........ $10,000 6.34% 2/01/00 $ 10,000,000
Windmill Funding Corp. .. 10,000 5.87 1/28/00 9,955,975
------------
Total Commercial Paper
(amortized cost
$532,280,775)........... 532,280,775
------------
GOVERNMENT AGENCIES-2.7%
Agency for International
Development Israel+..... 519 6.03 1/01/00 519,105
Agency for International
Development Panama+..... 4,265 5.46 1/04/00 4,286,810
Federal Home Loan Bank... 20,000 5.12-6.04 5/17/00-9/01/00 20,000,000
------------
Total Government Agencies
(amortized cost
$24,805,915)............ 24,805,915
------------
MEDIUM TERM NOTES-23.8%
Albertson's, Inc.+....... 10,000 6.44 1/14/00 9,994,644
American Express Credit
Corp.+.................. 20,000 5.70 1/03/00 20,000,000
American Home Products
Corp.+.................. 10,000 6.55 1/23/00 9,998,641
AT&T Corp.+.............. 10,000 6.14 1/13/00 9,997,880
BankAmerica Corp.+....... 10,000 5.75 1/03/00 10,000,000
Bear Stearns Cos., Inc.+. 10,000 6.56 1/20/00 10,000,515
Chase Manhattan Corp.+... 10,000 6.39 1/28/00 9,997,453
FCC National Bank........ 10,000 5.44 2/23/00 9,999,511
General Motors Acceptance
Corp.+.................. 10,000 6.24 2/02/00 10,000,944
Goldman Sachs & Co. ..... 20,000 5.31 2/25/00 20,000,000
Goldman Sachs & Co.+..... 16,000 6.18-6.31 1/14/00-1/26/00 16,000,000
Morgan (J.P.) & Co.,
Inc.+................... 10,000 6.43 1/10/00 9,999,128
Morgan Stanley Group,
Inc.+................... 12,000 6.22 2/14/00 12,000,000
Northern Rock PLC+....... 10,000 5.50 3/15/00 10,000,000
Philip Morris Cos.,
Inc.+................... 22,000 6.15 3/15/00 22,026,515
Sigma Finance Corp. ..... 20,000 5.19-5.42 4/27/00-5/24/00 20,000,000
Southtrust Bank+......... 10,000 5.75 1/03/00 9,998,051
------------
Total Medium Term Notes
(amortized cost
$220,013,282)........... 220,013,282
------------
TAXABLE MUNICIPAL MEDIUM
TERM NOTES-5.4%
California Pollution
Control Financing+...... 6,500 6.48 1/05/00 6,500,000
Courtyards Mackinaw LLC+. 5,355 6.77 1/06/00 5,355,000
Illinois Student
Assistance Corp.+....... 21,000 6.50 1/05/00 21,000,000
New Hampshire State
Industrial Development
Authority............... 10,000 5.91 1/11/00 10,000,000
Texas G.O.+.............. 7,415 6.48 1/06/00 7,415,000
------------
Total Taxable Municipal
Medium Term Notes
(amortized cost
$50,270,000)............ 50,270,000
------------
Total Investment
Securities
(amortized cost
$869,368,649)........... 869,368,649
------------
</TABLE>
7
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- December 31, 1999 -- (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REPURCHASE AGREEMENTS-3.9%
Joint Repurchase Agreement
Account (Note 3)
(cost $35,560,000)......... $35,560 3.00% 1/03/00 $ 35,560,000
------------
TOTAL INVESTMENTS-
(amortized cost
$904,928,649*)............. 97.9% 904,928,649
Other assets less
liabilities................ 2.1% 19,632,483
----- ------------
NET ASSETS.................. 100.0% $924,561,132
===== ============
</TABLE>
* At December 31, 1999 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, 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@
<TABLE>
<S> <C>
Receivable
Company 21.5%
Finance 17.2
Industrials 16.4
Banking 14.8
Securities
Holding Company 8.4
Municipalities 5.4
</TABLE>
<TABLE>
<S> <C>
Retail 3.2%
Gov't Agency 2.7
Telecommunications 2.2
Leasing 1.1
Utilities 1.1
----
94.0%
====
</TABLE>
@ 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 -- December 31, 1999
Note 1. Organization
SunAmerica Money Market Fund (the "Fund") is an open-end diversified
management investment company organized as a Maryland Corporation. The
investment objective of the Fund is to seek as high a level of current
income as is consistent with liquidity and stability of capital through
investment primarily in high quality money market instruments. The Fund is
managed by SunAmerica Asset Management Corp. ("SAAMCo"), an indirect wholly-
owned subsidiary of American International Group, Inc.
The Fund currently offers three 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 18 months 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
9
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- December 31, 1999--(continued)
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.
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, 1999, the Fund had a capital loss carryforward available of
$39,546 which will expire as follows:
<TABLE>
<CAPTION>
Expiration
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
2002 2003 2004 2006
------ ------- ------- ------
$4,386 $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. The Fund utilized a capital loss carryforward of $737 to offset
the Fund's net taxable gains realized and recognized in the year ended
December 31, 1999.
10
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- December 31, 1999--(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 $669 of such
capital losses.
Note 3. Joint Repurchase Agreement Account
As of December 31, 1999, the Fund had a 29.50% undivided interest, which
represented $35,560,000 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, 3.00% date 12/31/99 in
an aggregate principal amount of $120,533,000, repurchase price $120,563,133
due 1/03/00 collateralized by $50,000,000 U.S. Treasury Notes 6.50% due
8/31/01, $25,000,000 U.S. Treasury Notes 6.88% due 3/31/00, 25,000,000 U.S.
Treasury Notes 7.25% due 5/15/04 and $20,533,000 U.S. Treasury Notes 5.50%
due 3/31/03, approximate aggregate value $122,950,794.
Note 4. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Fund has an Investment Advisory and Management Agreement (the
"Agreement") with 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.
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
11
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- December 31, 1999 -- (continued)
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 year ended December 31, 1999, SACS earned fees of
$1,593,585 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 year ended December 31, 1999, SACS informed the
Fund that it received approximately $323,364 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, based
upon an annual rate of 0.22% of average daily net assets, which is approved
annually by the Directors. For the year ended December 31, 1999 the Fund
(Class A, Class B and Class II) incurred expenses of $1,783,768 to reimburse
SAFS pursuant to the terms of the Service Agreement. Of this amount,
$166,970 was payable to SAFS at December 31, 1999.
12
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- December 31, 1999 -- (continued)
Note 5. Capital Share Transactions
Transactions in shares of each class, all at $1.00 per share, for the year
ended December 31, 1999 and for the prior year were as follows:
<TABLE>
<CAPTION>
Class A Class B Class II
------------------------------ -------------------------- --------------------------
For the For the For the For the For the For the
year ended year ended year ended year ended year ended year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 1998
-------------- -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold........... 3,651,366,704 3,164,014,503 157,679,926 119,850,351 50,008,997 14,608,130
Reinvested dividends.. 32,757,587 27,236,164 1,355,772 1,348,769 186,156 28,248
Shares redeemed....... (3,490,723,717) (3,015,326,722) (158,760,855) (114,760,361) (43,392,982) (13,605,120)
-------------- -------------- ------------ ------------ ----------- -----------
Net increase.......... 193,400,574 175,923,945 274,843 6,438,759 6,802,171 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
December 31, 1999, the Fund had accrued $90,304 for the Retirement Plan,
which is included in accrued expenses on the Statement of Assets and
Liabilities and for the year ended December 31, 1999 expensed $20,926 for
the Retirement Plan, which is included in Directors' fees and expenses on
the Statement of Operations.
13
<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, 1999, 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, 1999 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
February 16, 2000
14
<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
-----------
A B II
EQUITY FUNDS --- --- ---
<S> <C> <C> <C>
Balanced Assets 51 551 731
Blue Chip Growth 522 22 820
Growth
Opportunities 71 571 821
Small Company
Growth 36 536 836
Growth and
Income 24 524 824
"Dogs" of Wall
Street 720 730 740
</TABLE>
<TABLE>
<CAPTION>
CLASS
-----------
A B II
INCOME FUNDS --- --- ---
<S> <C> <C> <C>
U.S. Government
Securities 70 570 770
Federal
Securities 534 34 734
Diversified
Income 580 80 780
High Income 28 228 828
Tax Exempt
Insured 33 533 733
Money Market 35 535 735
</TABLE>
<TABLE>
<CAPTION>
CLASS
-----------
STYLE SELECT A B II
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
Focused Growth
and Income 708 728 778
Large-Cap Growth 709 719 779
Focus 722 732 742
Focused Value 37 537 737
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Trustees Investment Adviser This report is submitted solely for the
S. James Coppersmith SunAmerica Asset Management Corp. general information of shareholders of
Samuel M. Eisenstat The SunAmerica Center the Fund. Distribution of this report to
Stephen J. Gutman 733 Third Avenue persons other than shareholders of the
Peter A. Harbeck New York, NY 10017-3204 Fund is authorized only in connection
Sebastiano Sterpa with a currently effective propectus,
Distributor setting forth details of the Fund, which
Officers SunAmerica Capital Services, Inc. must precede or accompany this report.
Peter A. Harbeck, President The SunAmerica Center
Brian Wiese, Vice President 733 Third Avenue
Robert M. Zakem, Secretary New York, 10017-3204
Peter C. Sutton, Treasurer
Laura E. Filippone, Assistant Treasurer Shareholder Servicing Agent
John T. Genoy, Assistant Treasurer SunAmerica Fund Services, Inc.
Donna M. Handel, Assistant Treasurer The SunAmerica Center
Cheryl L. Hawthorne, Assistant Treasurer 733 Third Avenue
Abbe P. Stein, Assistant Secretary New York, NY 10017-3204
Peter E. Pisapia, Assistant Secretary
Custodian and Transfer Agent
State Street and Trust Company
P.O. Box 419572
Kansas City, MO 64141-6572
-----------------------
[LOGO] SunAmerica PRSRT STD
Mutual Funds U.S POSTAGE
PAID
The SunAmerica Center LANCASTER, PA
733 Third Avenue PERMIT NO. 1793
New York, NY 10017-3204 -----------------------
</TABLE>
Distributed by:
SunAmerica Capital Services, Inc.
AIG Member of American International Group, Inc.
MM ANN - 12/99
