<PAGE>
-------------------
SunAmerica
-------------------
Money Market Fund
------------------------------
2000 Semiannual Report
------------------------------
[LOGO] SunAmerica
Mutual Funds
<PAGE>
[LOGO FOR SUN AMERICA]
August 15, 2000
Dear Shareholders:
For the six months ended June 30, 2000, the SunAmerica Money Market Fund
Class A shares returned 2.62%.* At the end of the semiannual period, the Fund's
Class A had an SEC 7-day effective yield of 5.88% and an SEC 7-day current
yield of 5.71%.
Concerns over Y2K proved to be unfounded as the new century rolled in without
a glitch. Thus, during the Fund's semi-annual period two major factors combined
to push yields on short-term money market securities significantly higher.
. The ongoing strength of the U.S. economy. Existing home sales in the U.S.
soared through the first half of 2000, as did durable goods orders and
retail sales. Consumer spending was strong, and unemployment reached its
lowest level in almost thirty years. At the same time, productivity
improvements and competitive pressures held prices steady, and inflation
remained benign. Nominal GDP, however, continued to surge, pushing the
first quarter growth rate to 5.5% and the year-over-year growth rate to
7%.
. The 1.00% increase in interest rates by the Federal Reserve Board. The Fed
continued to take a hard stance against inflation; particularly due to
extremely tight labor markets, and cautioning that enhanced productivity
could not be sustained indefinitely. Following its cumulative 0.75% rate
increase in 1999, the Fed raised interest rates by 0.25% on February 2 and
again on March 21. Stronger economic numbers in April led policymakers to
believe that inflation was accelerating and that the economy was not
slowing. This prompted the Fed to abandon its gradualist approach with a
0.50% rate increase on May 16.
At its June meeting, the Fed refrained from raising interest rates, as
early signs of a moderating U.S. economy emerged. However, the Fed
reiterated concerns that core inflation was rising and that the
utilization of the pool of available workers remained at an unusually high
level. It warned that signs of a slowdown in demand were "tentative and
preliminary." On June 30, 2000, the targeted federal funds rate stood at
6.50%, the highest level since early 1991.
We believe the next few months of economic data will be key. Unless the
inflation, consumption and employment data show more significant signs of
weakness, another move by the Federal Reserve Board should not be discounted.
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
June 30, 2000, the Fund's average weighted maturity stood at 44 days, slightly
less than the Donaghue Average.) We will also, of course, continue to search
for the best relatively valued securities.
/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 -- June 30, 2000 (unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment securities, at value (amortized cost $831,456,204)........ $831,456,204
Cash................................................................. 795,821
Receivables for fund shares sold..................................... 14,020,320
Interest receivable.................................................. 4,359,501
Prepaid expenses..................................................... 1,653
------------
Total assets....................................................... 850,633,499
------------
LIABILITIES:
Payable for fund shares repurchased.................................. 32,301,727
Dividends payable.................................................... 1,711,884
Accrued expenses..................................................... 376,641
Investment advisory and management fees payable...................... 341,694
Distribution and service maintenance fees payable.................... 129,977
------------
Total liabilities.................................................. 34,861,923
------------
Net assets........................................................ $815,771,576
============
NET ASSETS WERE COMPOSED OF:
Common stock, $.001 par value (10 billion shares authorized)......... $ 815,769
Additional paid-in capital........................................... 814,858,988
------------
815,674,757
Accumulated undistributed net investment income...................... 96,819
------------
Net assets........................................................ $815,771,576
============
Class A:
Net asset value($785,953,043/785,951,020 shares outstanding)......... $ 1.00
============
Class B:
Net asset value($24,056,464/24,056,383 shares outstanding)........... $ 1.00
============
Class II:
Net asset value($5,762,069/5,762,034 shares outstanding)............. $ 1.00
============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
SunAmerica Money Market Fund
STATEMENT OF OPERATIONS -- For the six months ended June 30, 2000
(unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................... $27,076,430
-----------
EXPENSES:
Investment advisory and management fees................ $2,127,100
Transfer Agent and shareholder servicing fees and
expenses-Class A...................................... 1,125,274
Transfer Agent and shareholder servicing fees and
expenses-Class B...................................... 51,648
Transfer Agent and shareholder servicing fees and
expenses-Class II..................................... 11,074
Service maintenance fees-Class A....................... 627,247
Distribution and service maintenance fees-Class B...... 156,971
Distribution and service maintenance fees-Class II..... 35,384
Custodian fees and expenses............................ 115,786
Registration fees-Class A.............................. 41,816
Registration fees-Class B.............................. 8,797
Registration fees-Class II............................. 5,356
Audit and tax consulting fees.......................... 31,536
Directors' fees and expenses........................... 28,921
Legal fees and expenses................................ 4,049
Insurance expense...................................... 1,016
Miscellaneous expenses................................. 3,188
----------
4,375,163
-----------
Expense offset and custody credits earned on cash
balances............................................. 17,228
-----------
Net expenses.......................................... 4,392,391
-----------
Net investment income................................... 22,684,039
-----------
Increase in net assets resulting from operations........ $22,684,039
===========
</TABLE>
See Notes to 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, 2000 ended
(unaudited) December 31, 1999
------------------ -----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income.................... $ 22,684,039 $ 34,993,448
------------- ------------
Net increase in net assets resulting from
operations............................... 22,684,039 34,993,448
Dividends and distributions to
shareholders:
From net investment income (Class A)..... (21,771,705) (33,192,291)
From net investment income (Class B)..... (769,998) (1,556,098)
From net investment income (Class II).... (171,971) (223,178)
------------- ------------
Total dividends and distributions to
shareholders............................. (22,713,674) (34,971,567)
Increase (decrease) in net assets from
fund share transactions (Note 5)......... (108,759,921) 200,477,588
------------- ------------
Total increase (decrease) in net assets... (108,789,556) 200,499,469
Net Assets:
Beginning of year........................ 924,561,132 724,061,663
------------- ------------
End of period (including undistributed
net investment income of $96,819 and
$126,541 at June 30, 2000 and December
31, 1999, respectively)................. $ 815,771,576 $924,561,132
============= ============
</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
6/30/00(5)............. 1.000 0.024 0.024 (0.024) 1.000 4.91 785,953 0.96(3) 5.27(3)
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
6/30/00(5)............. 1.000 0.020 0.020 (0.020) 1.000 4.07 24,056 1.78(3) 4.45(3)
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
6/30/00(5)............. 1.000 0.020 0.020 (0.020) 1.000 4.05 5,762 1.72(3) 4.42(3)
</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 reimbursement (based on average net assets):
<TABLE>
<CAPTION>
12/31/97 12/31/98
-------- --------
<S> <C> <C>
Class II............................ 4.74% 2.55%
</TABLE>
(5) Unaudited
See Notes to Financial Statements
5
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT-
4.9%
Canadian Imperial
Holdings, Inc.......... $10,000 6.67% 2/12/01 $ 9,997,066
Citibank Canada......... 10,000 6.16 7/20/00 9,999,956
Commerzbank AG.......... 10,000 6.60 2/01/01 9,997,203
Deutsche Bank AG........ 10,000 6.52 1/16/01 9,997,928
------------
Total Certificates of
Deposit
(amortized cost
$39,992,153)........... 39,992,153
------------
COMMERCIAL PAPER-54.0%
Abbey National North
America................ 10,000 6.11 11/09/00 9,777,664
American Greetings
Corp................... 10,000 6.57 8/28/00 9,894,150
Apreco, Inc............. 20,000 6.59 7/10/00-7/11/00 19,965,220
Asset Securitization
Corp................... 10,000 6.58 9/08/00 9,873,883
Atlantis One Funding
Corp................... 10,000 6.57 7/06/00 9,990,875
Bank One Financial
Corp................... 10,000 6.60 7/07/00 9,989,001
Bear Stearns Cos., Inc.. 10,000 6.05 10/06/00 9,836,986
Becton Dickinson & Co... 10,000 6.54 7/07/00 9,989,100
British Aerospace PLC... 10,000 6.53 8/18/00 9,912,933
British
Telecommunications PLC. 10,000 6.17-6.19 11/17/00-12/08/00 19,486,658
Coca-Cola Co............ 10,000 6.54 7/10/00 9,983,650
Cooper River Funding,
Inc.................... 10,000 6.63 7/06/00 9,990,792
Edison Asset
Securitization LLP..... 10,000 6.57 7/10/00 9,983,575
Edison International.... 11,000 6.70 7/10/00 10,981,575
Emerson Electric Co..... 10,000 6.50 7/05/00 9,992,778
Falcon Asset
Securitization, Inc.... 10,000 6.58 7/05/00 9,992,687
Four Winds Funding
Corp................... 10,000 6.52 7/07/00 9,989,134
Gap, Inc................ 10,000 6.55 8/21/00 9,907,208
General Dynamics Corp... 20,000 6.15-6.25 11/22/00-12/18/00 19,458,861
General Electric Capital
Corp................... 10,000 6.67 7/07/00 9,988,882
General Motors Corp..... 10,000 6.68 7/07/00 9,988,867
Goldman Sachs & Co...... 20,000 6.58 7/05/00-8/18/00 19,904,956
Govco., Inc............. 10,000 6.57 8/22/00 9,905,100
Grand Funding Corp...... 10,000 6.75 7/05/00 9,992,500
Honeywell International. 10,000 6.53 7/05/00 9,992,743
National Rural Utilities
Cooperative Finance
Corp................... 10,000 6.65 7/14/00 9,975,987
Oil Insurance Ltd....... 20,000 6.53-6.80 7/05/00 19,985,188
Perry II Funding Corp... 20,000 6.62 8/08/00-8/16/00 19,845,534
Preferred Receivables
Funding Corp........... 10,790 6.58 7/06/00 10,780,139
Procter & Gamble Co..... 10,000 6.53 7/11/00 9,981,860
Riverwoods Funding
Corp................... 10,000 6.75 7/07/00 9,988,750
Silver Tower US Funding
LLC.................... 32,000 6.17-6.34 11/03/00-12/29/00 31,165,405
UBS Finance, Inc........ 10,000 6.75 7/05/00 9,992,500
Wal-Mart Stores, Inc.... 10,000 6.53 8/29/00 9,892,979
Westways Funding V Ltd.. 10,000 6.63 7/11/00 9,981,584
Windmill Funding Corp... 10,000 6.59 8/23/00 9,902,981
------------
Total Commercial Paper
(amortized cost
$440,262,685).......... 440,262,685
------------
</TABLE>
6
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2000 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GOVERNMENT AGENCIES-1.7%
Agency for International
Development Panama+..... $ 4,127 7.01% 7/05/00 $ 4,147,827
Federal Home Loan Bank... 10,000 6.04 9/01/00 10,000,000
------------
Total Government Agencies
(amortized cost
$14,147,827)............ 14,147,827
------------
MEDIUM TERM NOTES-33.8%
Albertson's, Inc.+....... 10,000 6.63 7/14/00 9,999,643
American Express Credit
Corp.+.................. 10,000 6.61 7/24/00 9,998,512
American Honda Finance
Corp.+.................. 10,000 6.62 7/10/00 10,000,000
AT&T Corp.+.............. 20,000 6.24-6.57 7/08/00-7/13/00 19,997,926
BankAmerica Corp.+....... 20,000 6.65-6.67 7/03/00 20,000,000
Bank One Corp.+.......... 10,000 6.65 8/04/00 10,004,441
Bayerische Landesbank
Girozentrale............ 10,000 6.58 7/03/00 9,996,813
Bear Stearns Cos., Inc.+. 20,000 6.68-6.74 7/03/00-7/10/00 20,000,000
CC USA, Inc.+............ 10,000 6.77 8/23/00 9,999,000
DaimlerChrysler North
America Holdings+....... 10,000 6.69 8/22/00 9,995,723
FCC National Bank+....... 10,000 6.42 7/31/00 10,001,935
First Union Corp.+....... 10,000 6.67 8/16/00 10,000,000
Fleet Boston Corp.+...... 10,000 6.04 9/13/00 9,994,935
General Motors Acceptance
Corp.+.................. 21,000 6.53-6.96 7/10/00-8/23/00 21,027,114
Goldman Sachs & Co.+..... 8,000 6.94 7/17/00 8,000,000
Merrill Lynch & Co.,
Inc.+................... 35,000 6.24-6.94 7/18/00-9/05/00 35,033,889
Morgan (J.P.) & Co.,
Inc.+................... 10,000 6.61 7/06/00 9,999,977
Morgan Stanley Group,
Inc.+................... 12,000 6.90 9/12/00 12,000,000
Republic National Bank of
New York................ 10,000 5.55 7/17/00 9,996,631
SBC Communications,
Inc.+................... 10,000 6.33 8/01/00 10,000,000
Sigma Finance Corp.+..... 10,000 6.80 8/25/00 10,000,000
------------
Total Medium Term Notes
(amortized cost
$276,046,539)........... 276,046,539
------------
TAXABLE MUNICIPAL MEDIUM
TERM NOTES-4.9%
California Pollution
Control Financing+...... 6,500 6.66 7/05/00 6,500,000
Courtyards Mackinaw LLC+. 5,170 6.73 7/06/00 5,170,000
Illinois Student
Assistance Corp.+....... 21,000 6.66-6.68 7/05/00 21,000,000
Texas G.O.+.............. 7,415 6.66 7/05/00 7,415,000
------------
Total Taxable Municipal
Medium Term Notes
(amortized cost
$40,085,000)............ 40,085,000
------------
Total Investment
Securities
(amortized cost
$810,534,204)........... 810,534,204
------------
</TABLE>
7
<PAGE>
SunAmerica Money Market Fund
PORTFOLIO OF INVESTMENTS -- June 30, 2000 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) Rate** Maturity (Note 2)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-2.6%
<S> <C> <C> <C> <C> <C>
Joint Repurchase Agreement
Account (Note 3)
(cost $10,922,000)....... $10,922 6.15% 7/03/00 $ 10,922,000
Joint Repurchase Agreement
Account (Note 3)
(cost $10,000,000)....... 10,000 6.30 7/03/00 10,000,000
------------
Total Repurchase
Agreements
(cost $20,922,000)....... 20,922,000
------------
TOTAL INVESTMENTS-
(amortized cost
$831,456,204*)........... 101.9% 831,456,204
Liabilities in excess of
other assets............. (1.9)% (15,684,628)
----- ------------
NET ASSETS................ 100.0% $815,771,576
===== ============
</TABLE>
* At June 30, 2000 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, 2000
+ 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>
Securities
Holding Company 17.7%
Banking 15.9
Finance 15.9
Receivable
Company 14.9
Industrials 13.4
</TABLE>
<TABLE>
<S> <C>
Telecommunications 6.1%
Leasing 5.0
Municipalities 4.9
Utilities 3.8
Gov't Agency 1.7
----
99.3%
====
</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 -- June 30, 2000 (unaudited)
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 -- June 30, 2000 (unaudited) -- (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 -- June 30, 2000 (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 $669 of such
capital losses.
Note 3. Joint Repurchase Agreement Account
As of June 30, 2000, the Fund had a 10.00% undivided interest, which
represented $10,000,000 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% date 6/30/00, in an aggregate
principal amount of $100,000,000, repurchase price $100,052,500 due 7/03/00
collateralized by $50,000,000 U.S. Treasury Strip 6.25% due 8/15/23,
$33,000,000 U.S. Treasury Strip 6.63% due 5/15/07, and $14,505,000 U.S.
Treasury Strip 7.50% due 11/15/16 approximate aggregate value $102,137,158.
As of June 30, 2000, the Fund had a 2.81% undivided interest, which
represented $10,922,000 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, 6.15% dated 6/30/00, in
the principal amount of $388,672,000, repurchase price $388,871,194 due
7/03/00 collateralized by $123,950,000 U.S. Treasury Notes 6.63% due
7/31/01, $98,440,000 U.S. Treasury Notes 7.75% due 2/15/01, $75,945,000 U.S.
Treasury Notes 4.50% due 1/31/01, $25,035,000 U.S. Treasury Notes 8.50% due
11/15/00, $25,125,000 U.S. Treasury Notes 5.25% due 1/31/01, $24,580,000
U.S. Treasury Notes 6.88% due 5/15/06, and $13,650,000 U.S. Treasury Notes
6.50% due 2/28/02, approximate aggregrate value $396,493,225.
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.
11
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- June 30, 2000 (unaudited) -- (continued)
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 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, 2000, SACS earned fees of
$819,603 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, 2000, SACS informed the
Fund that it received approximately $172,968 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
12
<PAGE>
SunAmerica Money Market Fund
NOTES TO FINANCIAL STATEMENTS -- June 30, 2000 (unaudited) -- (continued)
average daily net assets, which is approved annually by the Directors. For
the six months ended June 30, 2000 the Fund (Class A, Class B and Class II)
incurred expenses of $966,983 to reimburse SAFS pursuant to the terms of the
Service Agreement. Of this amount, $155,028 was payable to SAFS at June 30,
2000.
Note 5. Capital Share Transactions
Transactions in shares of each class, all at $1.00 per share, for the six
months ended June 30, 2000 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
six months ended year ended six months ended year ended six months ended year ended
June 30, 2000 December 31, June 30, 2000 December 31, June 30, 2000 December 31,
(unaudited) 1999 (unaudited) 1999 (unaudited) 1999
---------------- -------------- ---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold........... 2,471,224,901 3,651,366,704 78,226,708 157,679,926 39,734,304 50,008,997
Reinvested dividends.. 19,855,980 32,757,587 595,960 1,355,772 123,028 186,156
Shares redeemed....... (2,586,321,622) (3,490,723,717) (89,868,827) (158,760,855) (42,330,353) (43,392,982)
-------------- -------------- ----------- ------------ ----------- -----------
Net increase
(decrease)........... (95,240,741) 193,400,574 (11,046,159) 274,843 (2,473,021) 6,802,171
============== ============== =========== ============ =========== ===========
</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, 2000, the Fund had accrued $98,403 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, 2000 expensed $8,099 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
-----------
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
New Century 36 536 836
Growth and
Income 24 524 824
"Dogs" of Wall
Street 720 730 740
BioTech/Health
30 64 164 864
Tax Managed
Equity 729 739 749
</TABLE>
<TABLE>
<CAPTION>
CLASS
-----------
A B II
INCOME FUNDS --- --- ---
<S> <C> <C> <C>
U.S. Government
Securities 70 570 770
GNMA 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
Focused TechNet 346 546 746
</TABLE>
14
<PAGE>
Trustees
S. James Coppersmith
Samuel M. Eisenstat
Stephen J. Gutman
Peter A. Harbeck
Sebastiano Sterpa
Officers
Peter A. Harbeck, President
Brian Wiese, Vice President
Robert M. Zakem, Secretary
Peter C. Sutton, Treasurer
Laurie Filippone, Assistant 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] SunAmerica ---------------
Mutual Funds PRSRT STD
U.S. POSTAGE
The SunAmerica Center PAID
733 Third Avenue SunAmerica
New York, NY 10017-3204 ---------------
Distributed by:
SunAmerica Capital Services, Inc.
[LOGO OF AIG] Member of American International Group, Inc.
MMSAN
