<PAGE>
SEPTEMBER 30, 1996
SunAmerica
Equity Funds
[LOGO]
Annual Report
BALANCED ASSETS . BLUE CHIP GROWTH . MID-CAP GROWTH
SMALL COMPANY GROWTH . GLOBAL BALANCED . GROWTH AND INCOME
[LOGO]SunAmerica
Asset Management
<PAGE>
SUNAMERICA EQUITY FUNDS
SHAREHOLDER LETTER
DEAR SHAREHOLDER:
At the beginning of 1996 we predicted that the Dow Jones Average would reach
6,000 by year-end and we were already at that level in mid October. In this
low inflation, moderate growth environment, we focused on companies with solid
fundamentals, high earnings visibility and consistent double digit growth. We
have seen more than $175 billion come into the equity market thus far compared
with $130 billion in 1995. The rate of increase will clearly slow as year-end
approaches and we would not be surprised to see a 5-7% decline in equities as
the investment community adjusts these numbers down for corporate profits in
1997.
We remained quite diversified in the BALANCED ASSETS FUND with an emphasis
on the interest sensitive sectors of the market along with overweightings in
health care and technology. Our focus was on strong secular trends that
produced favorable earnings in almost any economic environment. The next
twelve months should again provide returns around the historical norm of 11%.
We will maintain our health care and technology positions as well as increase
positions in the energy sector.
Within the BLUE CHIP GROWTH FUND, we looked for companies that were leaders
in their industry and therefore increased market share globally without
sacrificing earnings momentum. The industries that best represented these
characteristics included health care, technology and certain segments of the
service sector including banks and insurance companies. We reduced our
weightings in consumer cyclicals and commodity cyclicals because we expect the
economy to show signs of slower growth before year-end. Going forward, we will
continue to increase our weighting in the interest sensitive sector as well as
maintain our positions in technology and energy.
Investing in companies where industry and secular trends are positive, the
MID-CAP GROWTH FUND was positioned in another secular trend, that of increased
drilling for energy. This was driven by increases in demand, decreases in
supply and lower unit costs for finding energy. In the technology area we
invested in networking, software and semiconductor companies, all of which
benefited from the secular trend of productivity improvement. One final trend
represented in our Fund was therapeutic health care--specifically late stage
biotech companies with products about to be launched commercially. Investment
here enabled shareholders to take advantage of trends in scientific products
and drug designs including those driven by molecular biology. We expect to
maintain investments in therapeutic health care, as many of these companies
are developing unique disease treatments, and with our aging population there
is a ready market for these products.
We have added to our positions of growth stocks in the SMALL COMPANY GROWTH
FUND over the past fiscal year, where earnings were driven by secular changes,
not cyclical or interest rate cycles. We favored technology in selective
markets--productivity-based software manufacturers like Rational Software
Corp., or Viasoft, Inc. or systems integration companies doing contract
software and hardware work. Telecom and network equipment markets were
favored, as the need for larger and upgraded networks in the corporation and
public carrier market continued to grow. We maintained positions in the oil
service sector because of several bullish secular trends which we identified
18 months ago--the increase in energy demand, the reduction in the unit costs
of finding energy due to technology advances in drilling and the need to
restore storage levels to traditional rates in the U.S. and worldwide.
Continuing into this fiscal year, we will maintain positions in the specialty
retail area from a number of secular trends, including the growth in selected
1
<PAGE>
SUNAMERICA EQUITY FUNDS
SHAREHOLDER LETTER
demographic groups such as teenagers, as well as the increasing capture of
share by name brands. In addition, we will maintain positions in various
outsourcing companies, serving many different industries, as this secular trend
continues to growth.
The GLOBAL BALANCED FUND as of September 30, 1996 was allocated: 48% to
foreign equities, 20.7% in foreign and U.S. bonds, and 17.1% in domestic
equities. The international portion of the Fund was dominated by Japanese
stocks, which we believed benefited from the current low interest rate
environment and an improving economy in Japan. The domestic equity portion of
the Fund focused on strong fundamental companies with consistent earnings that
will continue to outperform in any economic environment. The U.S. bond holdings
consisted of a small position in U.S. Treasury Notes, a reflection of our
belief that the domestic market offers lower real rates of return than many
European alternatives. Although, international equity markets continued to
underperform the domestic stock markets in the third quarter of 1996, we are
still convinced that international investments are particularly attractive at
this point in the global economic recovery and that they should represent a
significant portion of a well diversified portfolio.
The GROWTH AND INCOME FUND was ranked as the number one growth and income
fund in its category as tracked by Lipper Analytic Services for its fiscal
year. The Fund was broadly diversified with slight overweightings in health
care and selective industrial stocks and decreased positions in technology
helping investment performance. The Fund will continue its health care
positioning while maintaining a 10% cash, or cash equivalents, position as we
see a slowing economy for the remainder of the year and into 1997. We will
begin to increase some technology holdings and search for sectors and stocks
where earnings visibility and reasonable valuations are apparent.
It is our contention that the Wall Street community at large is still
overestimating corporate profits for 1997 given the current economic backdrop.
We would not be surprised to see a correction of 7-8% in the equities market as
the investment community comes to the realization that corporate profits will
not be as strong as expected in 1997. However, it is imperative to stay
invested and use these negative periods as buying opportunities. Interestingly,
in the past 70 years in the market--if you missed the top 180 biggest up days--
you also missed 95% of the compounded appreciation. This is not a period in
history when one should be out of equities--stay invested.
/s/Stanton J. Feeley /s/Audrey Snell /s/Gerard P.
Stanton J. Feeley Audrey Snell Gerard P.
Chief Investment Officer Portfolio Manager Sullivan
Portfolio Manager
2
<PAGE>
SUNAMERICA EQUITY FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 1996
<TABLE>
<CAPTION>
BALANCED BLUE CHIP MID-CAP SMALL COMPANY GLOBAL GROWTH AND
ASSETS GROWTH GROWTH GROWTH BALANCED INCOME
FUND FUND FUND FUND FUND FUND
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments securities,
at value (identified
cost $277,773,099;
$74,972,693;
$41,512,876;
$192,419,854;
$21,240,451 and
$28,517,818,
respectively)........... $294,588,658 $80,872,707 $52,121,375 $249,986,112 $23,007,462 $30,316,656
Short-term securities
(cost equals market).... -- -- -- -- 1,302,000 --
Repurchase agreements
(cost equals market).... 8,398,000 1,189,000 4,072,000 9,766,000 1,160,000 4,353,000
Cash..................... 916 954 106 984 5,746 43,371
Foreign cash (identified
cost $303,982).......... -- -- -- -- 301,859 --
Receivable for
investments sold........ 16,737,801 6,086,322 -- 11,679,582 145,472 214,693
Receivable for shares of
beneficial interest
sold.................... 536,009 224,618 83,333 1,231,552 55,202 811,954
Interest and dividends
receivable.............. 1,501,234 60,893 13,589 47,108 197,383 43,577
Prepaid expenses......... 14,818 33,144 6,646 11,998 1,116 973
Receivable from
investment adviser...... -- -- -- -- 6,635 18,817
Unrealized appreciation
of foreign currency
contracts............... -- -- -- -- 146,021 --
Deferred organizational
expenses................ -- -- -- -- 2,334 758
------------ ----------- ----------- ------------ ----------- -----------
Total assets........... 321,777,436 88,467,638 56,297,049 272,723,336 26,331,230 35,803,799
------------ ----------- ----------- ------------ ----------- -----------
LIABILITIES:
Payable for investments
purchased............... 2,411,915 46,000 455,000 5,519,101 72,694 722,860
Payable for shares of
beneficial interest
redeemed................ 511,772 48,834 44,412 373,908 2,870 11,987
Accrued expenses......... 186,061 83,710 54,487 141,863 58,126 30,297
Investment advisory and
management fees payable. 192,235 52,362 32,727 155,384 20,963 18,990
Distribution and service
maintenance fees
payable................. 179,614 43,245 22,133 126,612 15,754 15,130
Dividends payable........ 63,877 581 104 -- -- 2,514
Unrealized depreciation
of foreign currency
contracts............... -- -- -- -- 13,831 --
------------ ----------- ----------- ------------ ----------- -----------
Total liabilities...... 3,545,474 274,732 608,863 6,316,868 184,238 801,778
------------ ----------- ----------- ------------ ----------- -----------
Net assets........... $318,231,962 $88,192,906 $55,688,186 $266,406,468 $26,146,992 $35,002,021
============ =========== =========== ============ =========== ===========
NET ASSETS WERE COMPOSED
OF:
Shares of beneficial
interest, $.01 par
value................... $ 189,361 $ 50,474 $ 31,483 $ 110,890 $ 34,097 $ 33,461
Paid-in capital.......... 272,569,518 71,074,447 44,047,107 209,435,190 23,933,064 31,382,012
------------ ----------- ----------- ------------ ----------- -----------
272,758,879 71,124,921 44,078,590 209,546,080 23,967,161 31,415,473
Accumulated undistributed
net investment income
(loss).................. (18,577) -- -- -- 512,906 (2,516)
Accumulated undistributed
net realized gain (loss)
on investments, foreign
currency and other
assets and liabilities.. 28,676,101 11,167,971 1,001,097 (705,870) (229,373) 1,790,226
Net unrealized
appreciation of
investments............. 16,815,559 5,900,014 10,608,499 57,566,258 1,767,011 1,798,838
Net unrealized
appreciation of foreign
currency, other assets
and liabilities......... -- -- -- -- 129,287 --
------------ ----------- ----------- ------------ ----------- -----------
Net assets........... $318,231,962 $88,192,906 $55,688,186 $266,406,468 $26,146,992 $35,002,021
============ =========== =========== ============ =========== ===========
CLASS A (UNLIMITED SHARES
AUTHORIZED):
Net asset value and
redemption price per
share
($147,035,456/8,748,465;
$51,993,425/2,950,757;
$41,904,384/2,356,510;
$158,567,071/6,538,057;
$10,035,090/1,301,793
and
$21,099,017/2,015,981
net assets and shares of
beneficial interest
issued and outstanding,
respectively)........... $ 16.81 $ 17.62 $ 17.78 $ 24.25 $ 7.71 $ 10.47
Maximum sales charge
(5.75% of offering
price).................. 1.03 1.07 1.08 1.48 0.47 0.64
------------ ----------- ----------- ------------ ----------- -----------
Maximum offering price to
public.................. $ 17.84 $ 18.69 $ 18.86 $ 25.73 $ 8.18 $ 11.11
============ =========== =========== ============ =========== ===========
CLASS B (UNLIMITED SHARES
AUTHORIZED):
Net asset value, offering
and redemption price
(excluding any
applicable contingent
deferred sales charge)
per share
($171,196,506/10,187,608;
$36,199,481/2,096,657;
$13,783,802/791,770;
$107,839,397/4,550,952;
$16,111,902/2,107,949
and
$13,903,004/1,330,114
net assets and shares of
beneficial interest
issued and outstanding,
respectively)........... $ 16.80 $ 17.27 $ 17.41 $ 23.70 $ 7.64 $ 10.45
============ =========== =========== ============ =========== ===========
</TABLE>
See Notes to Financial Statements
3
<PAGE>
SUNAMERICA EQUITY FUNDS
STATEMENT OF OPERATIONS -- For the year ended September 30, 1996
<TABLE>
<CAPTION>
BALANCED BLUE CHIP MID-CAP SMALL COMPANY GLOBAL GROWTH AND
ASSETS GROWTH GROWTH GROWTH BALANCED INCOME
FUND FUND FUND FUND FUND FUND
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest (net of
withholding taxes of
$2,403 on Global
Balanced Fund)........ $ 6,647,500 $ 281,114 $ 293,829 $ 1,324,606 $ 436,750 $ 87,928
Dividends (net of
withholding taxes of
$32,895, $13,450,
$1,459, $3,296,
$32,882 and $854,
respectively)......... 2,928,724 919,680 166,238 366,438 285,671 214,138
----------- ----------- ---------- ----------- ---------- ----------
Total investment
income................ 9,576,224 1,200,794 460,067 1,691,044 722,421 302,066
----------- ----------- ---------- ----------- ---------- ----------
Expenses:
Investment advisory and
management fees....... 2,282,018 644,774 375,398 1,487,650 240,640 91,559
Distribution and
service maintenance
fees-Class A.......... 478,455 164,198 136,912 408,943 32,163 25,462
Distribution and
service maintenance
fees-Class B.......... 1,675,676 390,560 109,353 815,125 148,748 49,329
Transfer agent fees and
expenses-Class A...... 424,921 141,422 111,673 352,438 28,239 18,652
Transfer agent fees and
expenses-Class B...... 453,492 120,037 34,129 235,323 43,907 15,231
Custodian fees and
expenses.............. 140,540 82,285 68,740 111,265 188,610 50,281
Registration fees-Class
A..................... 20,989 7,423 11,199 29,818 5,888 7,257
Registration fees-Class
B..................... 9,105 5,996 6,873 14,911 6,906 6,374
Audit and tax
consulting fees....... 56,410 20,825 16,395 36,270 12,800 10,910
Trustees' fees and
expenses.............. 35,822 10,995 6,178 22,946 2,783 1,141
Printing expense....... 25,575 10,695 4,350 22,020 2,210 --
Insurance expense...... 6,055 1,716 1,092 3,511 550 123
Legal fees and
expenses.............. 4,890 790 -- 3,335 -- --
Interest expense....... 4,189 4,689 1,603 -- -- 248
Amortization of
organizational
expenses.............. -- -- -- -- 878 278
Miscellaneous expenses. 7,750 3,019 2,215 5,197 1,432 596
----------- ----------- ---------- ----------- ---------- ----------
Total expenses......... 5,625,887 1,609,424 886,110 3,548,752 715,754 277,441
Less: expenses
waived/reimbursed by
investment adviser.... -- -- (66) -- (101,710) (129,960)
----------- ----------- ---------- ----------- ---------- ----------
Net expenses........... 5,625,887 1,609,424 886,044 3,548,752 614,044 147,481
----------- ----------- ---------- ----------- ---------- ----------
Net investment income
(loss)................. 3,950,337 (408,630) (425,977) (1,857,708) 108,377 154,585
----------- ----------- ---------- ----------- ---------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on
investments............ 33,912,222 13,200,391 1,634,384 14,472 1,153,686 1,853,730
Net realized gain on
foreign currency and
other assets and
liabilities............ -- -- -- 36 797,602 2
Net change in unrealized
appreciation
(depreciation) of
investments............ (8,691,595) (2,296,867) 4,688,230 33,583,299 218,368 1,445,861
Net change in unrealized
appreciation
(depreciation) of
foreign currency and
other assets and
liabilities............ -- -- -- -- 83,360 --
----------- ----------- ---------- ----------- ---------- ----------
Net realized and
unrealized gain on
investments, foreign
currency and other
assets and liabilities. 25,220,627 10,903,524 6,322,614 33,597,807 2,253,016 3,299,593
----------- ----------- ---------- ----------- ---------- ----------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. $29,170,964 $10,494,894 $5,896,637 $31,740,099 $2,361,393 $3,454,178
=========== =========== ========== =========== ========== ==========
</TABLE>
See Notes to Financial Statements
4
<PAGE>
SUNAMERICA EQUITY FUNDS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BALANCED ASSETS FUND BLUE CHIP GROWTH FUND MID-CAP GROWTH FUND
---------------------------- --------------------------- ---------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995 1996 1995
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income
(loss)................ $ 3,950,337 $ 4,234,844 $ (408,630) $ (42,924) $ (425,977) $ (237,687)
Net realized gain on
investments........... 33,912,222 13,383,399 13,200,391 7,615,892 1,634,384 7,432,643
Net realized loss on
foreign currency,
other assets and
liabilities........... -- -- -- (10,667) -- --
Net change in
unrealized
appreciation
(depreciation) of
investments........... (8,691,595) 28,115,267 (2,296,867) 6,757,773 4,688,230 3,253,371
------------ ------------ ----------- ----------- ----------- -----------
Net increase in net
assets resulting from
operations............. 29,170,964 45,733,510 10,494,894 14,320,074 5,896,637 10,448,327
------------ ------------ ----------- ----------- ----------- -----------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income (Class A)...... (2,345,435) (1,892,197) -- -- -- (81,917)
From net investment
income (Class B)...... (1,868,201) (4,315,134) -- -- -- (10,723)
From net realized gains
on investments
(Class A)............. (7,282,221) (2,033,487) (4,646,750) (221,327) (4,337,142) --
From net realized gains
on investments
(Class B)............. (9,730,482) (7,043,145) (4,492,488) (5,263,567) (1,083,506) --
------------ ------------ ----------- ----------- ----------- -----------
Total dividends and
distributions to
shareholders........... (21,226,339) (15,283,963) (9,139,238) (5,484,894) (5,420,648) (92,640)
------------ ------------ ----------- ----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS (NOTE 8).. 28,256,172 18,827,961 4,897,454 (1,851,797) 7,954,560 (43,053)
------------ ------------ ----------- ----------- ----------- -----------
TOTAL INCREASE IN NET
ASSETS................. 36,200,797 49,277,508 6,253,110 6,983,383 8,430,549 10,312,634
NET ASSETS:
Beginning of period..... 282,031,165 232,753,657 81,939,796 74,956,413 47,257,637 36,945,003
------------ ------------ ----------- ----------- ----------- -----------
End of period [including
undistributed net
investment income
(loss) for September
30, 1996 and September
30,1995 of $(18,577),
$243,698; $0, $0; $0,
and $0, respectively].. $318,231,962 $282,031,165 $88,192,906 $81,939,796 $55,688,186 $47,257,637
============ ============ =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
5
<PAGE>
SUNAMERICA EQUITY FUNDS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND GLOBAL BALANCED FUND GROWTH AND INCOME FUND
---------------------------- --------------------------- ---------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income
(loss)................ $ (1,857,708) $ (587,404) $ 108,377 $ 305,478 $ 154,585 $ 183,673
Net realized gain
(loss) on investments. 14,472 31,433,571 1,153,686 (2,564,836) 1,853,730 346,652
Net realized gain on
foreign currency,
other assets and
liabilities........... 36 10,951 797,602 1,756,424 2 --
Net change in
unrealized
appreciation
(depreciation) of
investments........... 33,583,299 15,112,125 218,368 1,847,343 1,445,861 297,243
Net change in
unrealized
appreciation
(depreciation) of
foreign currency,
other assets and
liabilities........... -- -- 83,360 42,526 -- --
------------ ------------ ----------- ----------- ----------- ----------
Net increase in net
assets resulting from
operations............. 31,740,099 45,969,243 2,361,393 1,386,935 3,454,178 827,568
------------ ------------ ----------- ----------- ----------- ----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income (Class A)...... -- -- (478,740) (24,601) (123,623) (127,668)
From net investment
income (Class B)...... -- -- (693,095) (12,084) (58,296) (54,591)
From net realized gains
on investments
(Class A)............. (16,561,192) (985,792) -- (3,604) (175,889) (63,470)
From net realized gains
on investments
(Class B)............. (12,782,675) (1,122,738) -- (3,671) (127,334) (13,320)
------------ ------------ ----------- ----------- ----------- ----------
Total dividends and
distributions to
shareholders........... (29,343,867) (2,108,530) (1,171,835) (43,960) (485,142) (259,049)
------------ ------------ ----------- ----------- ----------- ----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS (NOTE 8).. 106,187,132 23,184,310 1,366,433 (4,383,749) 25,962,674 2,174,079
------------ ------------ ----------- ----------- ----------- ----------
TOTAL INCREASE
(DECREASE) IN NET
ASSETS................. 108,583,364 67,045,023 2,555,991 (3,040,774) 28,931,710 2,742,598
NET ASSETS:
Beginning of period..... 157,823,104 90,778,081 23,591,001 26,631,775 6,070,311 3,327,713
------------ ------------ ----------- ----------- ----------- ----------
End of period [including
undistributed net
investment income
(loss) for September
30, 1996 and September
30, 1995 $0, $0;
$512,906, $871,462;
$(2,516), and $2,915,
respectively].......... $266,406,468 $157,823,104 $26,146,992 $23,591,001 $35,002,021 $6,070,311
============ ============ =========== =========== =========== ==========
</TABLE>
See Notes to Financial Statements
6
<PAGE>
SUNAMERICA EQUITY FUNDS
FINANCIAL HIGHLIGHTS
BALANCED ASSETS FUND
- --------------------
<TABLE>
<CAPTION>
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/24/93-
9/30/93(3)..... $15.07 $ -- $ 0.06 $ 0.06 $ -- $ -- $ -- $15.13 0.40% $ 33,381
9/30/94......... 15.13 0.30 (0.23) 0.07 (0.28) (0.30) (0.58) 14.62 0.50 52,098
9/30/95......... 14.62 0.32 2.51 2.83 (0.45) (0.58) (1.03) 16.42 20.68 119,916
9/30/96......... 16.42 0.27 1.39 1.66 (0.28) (0.99) (1.27) 16.81 10.65 147,035
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- -------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
9/24/93-
9/30/93(3)..... 1.54%(4) 0.46%(4) 25% $ NA
9/30/94......... 1.58 2.00 141 NA
9/30/95......... 1.50 2.13 130 NA
9/30/96......... 1.52 1.63 187 0.0611
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/93(5)...... $15.63 $ 0.30 $ 2.63 $ 2.93 $(0.30) $(2.40) $(2.70) $15.86 20.29% $113,871
7/01/93-
9/30/93(5)..... 15.86 0.05 0.49 0.54 (0.06) (1.21) (1.27) 15.13 3.44 137,456
9/30/94......... 15.13 0.20 (0.23) (0.03) (0.18) (0.30) (0.48) 14.62 (0.14) 180,655
9/30/95......... 14.62 0.23 2.51 2.74 (0.36) (0.58) (0.94) 16.42 19.96 162,115
9/30/96......... 16.42 0.17 1.38 1.55 (0.18) (0.99) (1.17) 16.80 9.93 171,197
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- -------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
6/30/93(5)...... 1.91%(6) 1.94%(6) 251% $ NA
7/01/93-
9/30/93(5)..... 2.10(4)(6) 1.36(4)(6) 25 NA
9/30/94......... 2.21 1.36 141 NA
9/30/95......... 2.12 1.59 130 NA
9/30/96......... 2.12 1.03 187 0.0611
- --------------------------------------------------------------------------------
<CAPTION>
BLUE CHIP GROWTH FUND
- ---------------------
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/08/93-
9/30/94(3)..... $16.24 $ 0.09 (1) $(0.26) $(0.17) $ -- $(0.65) $(0.65) $15.42 (1.05)% $ 3,207
9/30/95......... 15.42 0.02 (1) 2.99 3.01 -- (1.09) (1.09) 17.34 21.29 42,407
9/30/96......... 17.34 (0.03)(1) 2.22 2.19 -- (1.91) (1.91) 17.62 13.88 51,993
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- -------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
10/08/93-
9/30/94(3)..... 1.64%(4)(6) 0.65%(4)(6) 170% $ NA
9/30/95......... 1.58(6) 0.11(6) 251 NA
9/30/96......... 1.57 (0.18) 269 0.0600
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/92(5)..... $12.53 $(0.13) $ 1.19 $ 1.06 $ -- $ -- $ -- $13.59 8.46% $ 83,237
1/01/93-
9/30/93(5)..... 13.59 (0.02)(1) 2.71 2.69 -- -- -- 16.28 19.79 79,774
9/30/94......... 16.28 (0.01)(1) (0.28) (0.29) -- (0.65) (0.65) 15.34 (1.81) 71,749
9/30/95......... 15.34 (0.01)(1) 2.89 2.88 -- (1.09) (1.09) 17.13 20.51 39,533
9/30/96......... 17.13 (0.14)(1) 2.19 2.05 -- (1.91) (1.91) 17.27 13.17 36,199
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- -------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
12/31/92(5)..... 2.53% (0.75)% 192% $ NA
1/01/93-
9/30/93(5)..... 2.46(4) (0.14)(4) 171 NA
9/30/94......... 2.28 (0.05) 170 NA
9/30/95......... 2.22 (0.09) 251 NA
9/30/96......... 2.23 (0.83) 269 0.0600
</TABLE>
- ------------
@ The average commission per share is derived by taking the agency commissions
paid on equity securities trades and dividing by the number of shares
purchased or sold.
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Pursuant to a reorganization of the SunAmerica Mutual Funds, the Equity
Funds fiscal year ends were changed to September 30
(6) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
6/30/93 9/30/93 9/30/94 9/30/95
------- ------- ------- -------
<S> <C> <C> <C> <C>
Balanced Assets Class B...................... .05% .04% -- --
Blue Chip Growth Class A..................... -- -- 1.66% .11%
</TABLE>
See Notes to Financial Statements
7
<PAGE>
SUNAMERICA EQUITY FUNDS
FINANCIAL HIGHLIGHTS
MID-CAP GROWTH FUND
<TABLE>
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(1) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/92(4)..... $13.30 $(0.07) $ 2.87 $ 2.80 $(0.02) $(0.44) $(0.46) $15.64 21.42% $30,024
12/01/92-
9/30/93(4)..... 15.64 (0.09)(2) 3.17 3.08 -- (0.69) (0.69) 18.03 20.42 34,918
9/30/94......... 18.03 0.04 (2) (1.64) (1.60) -- (2.65) (2.65) 13.78 (9.60) 32,906
9/30/95......... 13.78 (0.08)(2) 4.14 4.06 (0.04) -- (0.04) 17.80 29.51 37,714
9/30/96......... 17.80 (0.12)(2) 2.21 2.09 -- (2.11) (2.11) 17.78 12.92 41,904
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- -------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
11/30/92(4)..... 1.76% (0.46)% 98% $ NA
12/01/92-
9/30/93(4)..... 1.81(3) 1.18 (3) 231 NA
9/30/94......... 1.76 0.28 555 NA
9/30/95......... 1.66 (0.51) 392 NA
9/30/96......... 1.62 (0.69) 307 0.0603
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(1) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/04/93-
9/30/94(5)..... $18.12 $ 0.03 (2) $(1.80) $(1.77) $ -- $(2.65) $(2.65) $13.70 (10.56)% $ 4,039
9/30/95......... 13.70 (0.18)(2) 4.08 3.90 (0.02) -- (0.02) 17.58 28.55 9,544
9/30/96......... 17.58 (0.24)(2) 2.18 1.94 -- (2.11) (2.11) 17.41 12.16 13,784
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- -------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
10/04/93-
9/30/94(5)..... 2.43%(3)(6) 0.20%(3)(6) 555% $ NA
9/30/95......... 2.31(7) (0.17)(7) 392 NA
9/30/96......... 2.32 (1.43) 307 0.0603
- --------------------------------------------------------------------------------
SMALL COMPANY GROWTH FUND
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME(2) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(1) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/92(4)(8).. $13.88 $(0.12) $ 3.39 $3.27 $ -- $(0.69) $(0.69) $16.46 24.31% $32,056
12/01/92-
9/30/93(4)(8).. 16.46 (0.02) 4.07 4.05 -- (0.73) (0.73) 19.78 25.68 39,238
9/30/94......... 19.78 (0.10) (1.40) (1.50) -- (1.46) (1.46) 16.82 (7.74) 38,570
9/30/95......... 16.82 (0.04) 8.28 8.24 -- (0.41) (0.41) 24.65 50.00 89,510
9/30/96......... 24.65 (0.16) 4.29 4.13 -- (4.53) (4.53) 24.25 19.35 158,567
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- -------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
11/30/92(4)(8).. 1.90% (0.88)% 209% $ NA
12/01/92-
9/30/93(4)(8).. 1.83(3) (0.15)(3) 216 NA
9/30/94......... 1.67 (0.60) 411 NA
9/30/95......... 1.57 (0.22) 351 NA
9/30/96......... 1.53 (0.68) 240 0.0607
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME(2) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(1) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/24/93-
9/30/93(5)..... $19.66 $ -- $ 0.12 $ 0.12 $ -- $ -- $ -- $19.78 0.61% $38,898
9/30/94......... 19.78 (0.20) (1.42) (1.62) -- (1.46) (1.46) 16.70 (8.40) 52,208
9/30/95......... 16.70 (0.16) 8.19 8.03 -- (0.41) (0.41) 24.32 49.08 68,313
9/30/96......... 24.32 (0.29) 4.20 3.91 -- (4.53) (4.53) 23.70 18.60 107,839
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- -------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
9/24/93-
9/30/93(5)..... 2.34%(3) (1.70)%(3) 216% $ NA
9/30/94......... 2.31 (1.23) 411 NA
9/30/95......... 2.22 (0.84) 351 NA
9/30/96......... 2.16 (1.30) 240 0.0607
</TABLE>
- ------------
@ The average commission per share is derived by taking the agency commissions
paid on equity securities trades and dividing by the number of shares
purchased or sold.
(1) Total return is not annualized and does not reflect sales load
(2) Calculated based upon average shares outstanding
(3) Annualized
(4) Pursuant to a reorganization of the SunAmerica Mutual Funds, the Equity
Funds fiscal year ends were changed to September 30
(5) Commencement of sale of respective class of shares
(6) Net of expense reimbursement equivalent to .48% of average net assets for
the period ended 9/30/94
(7) Net of expense reimbursement equivalent to .17% of average net assets for
the year ended 9/30/95
(8) Restated to reflect a 0.984460367 for 1.00 stock split effective September
24, 1993
See Notes to Financial Statements
8
<PAGE>
SUNAMERICA EQUITY FUNDS
FINANCIAL HIGHLIGHTS
GLOBAL BALANCED FUND
<TABLE>
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/15/94-
9/30/94(3)..... $6.94 $0.02 $(0.05) $(0.03) $ -- $ -- $ -- $6.91 (0.43)% $13,100
9/30/95......... 6.91 0.10 0.36 0.46 (0.01) -- (0.01) 7.36 6.72 9,615
9/30/96......... 7.36 0.06 0.71 0.77 (0.42) -- (0.42) 7.71 11.00 10,035
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- ------------- -------------- --------- ----------
<S> <C> <C> <C> <C>
6/15/94-
9/30/94(3)..... 2.15%(4)(5) 0.93%(4)(5) 18% $ NA
9/30/95......... 2.15(5) 1.36(5) 169 NA
9/30/96......... 2.15(5) 0.84(5) 103 0.0074
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/16/94-
9/30/94(3)..... $6.94 $0.01 $(0.05) $(0.04) $ -- $ -- $ -- $6.90 (0.58)% $13,532
9/30/95......... 6.90 0.05 0.36 0.41 (0.01) -- (0.01) 7.30 5.91 13,976
9/30/96......... 7.30 0.02 0.70 0.72 (0.38) -- (0.38) 7.64 10.21 16,112
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- ------------- -------------- --------- ----------
<S> <C> <C> <C> <C>
6/16/94-
9/30/94(3)..... 2.80%(4)(5) 0.33%(4)(5) 18% $ NA
9/30/95......... 2.80(5) 0.75(5) 169 NA
9/30/96......... 2.80(5) 0.21(5) 103 0.0074
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUND
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/01/94-
9/30/94(3)..... $7.33 $0.07 $ 0.10 $ 0.17 $(0.06) $ -- $(0.06) $7.44 2.34% $ 3,098
9/30/95......... 7.44 0.32 1.08 1.40 (0.30) (0.15) (0.45) 8.39 19.53 3,532
9/30/96......... 8.39 0.14 2.50 2.64 (0.17) (0.39) (0.56) 10.47 32.59 21,099
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- ------------- -------------- --------- ----------
<S> <C> <C> <C> <C>
7/01/94-
9/30/94(3)..... 1.50%(4)(5) 3.48%(4)(5) 8% $ NA
9/30/95......... 0.46(5) 4.16(5) 230 NA
9/30/96......... 0.96(5) 1.52(5) 161 0.0600
<CAPTION>
NET
GAIN(LOSS)
ON INVEST- TOTAL DIVIDENDS DISTRI-
NET ASSET NET MENTS (BOTH FROM FROM NET BUTIONS NET ASSET NET ASSETS
VALUE, INVEST- REALIZED INVEST- INVEST- FROM TOTAL VALUE, END OF
PERIOD BEGINNING MENT AND MENT MENT CAPITAL DISTRI- END OF TOTAL PERIOD
ENDED OF PERIOD INCOME(1) UNREALIZED) OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN(2) (000'S)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
CLASS b
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/06/94-
9/30/94(3)..... $7.33 $0.05 $ 0.11 $ 0.16 $(0.05) $ -- $(0.05) $7.44 2.19% $ 229
9/30/95......... 7.44 0.35 1.03 1.38 (0.28) (0.15) (0.43) 8.39 19.19 2,538
9/30/96......... 8.39 0.08 2.50 2.58 (0.13) (0.39) (0.52) 10.45 31.75 13,903
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME AVERAGE
PERIOD TO AVERAGE TO AVERAGE PORTFOLIO COMMISSION
ENDED NET ASSETS NET ASSETS TURNOVER PER SHARE@
- ---------------- ------------- -------------- --------- ----------
<S> <C> <C> <C> <C>
7/06/94-
9/30/94(3)..... 2.15%(4)(5) 2.86%(4)(5) 8% $ NA
9/30/95......... 0.30(5) 4.48(5) 230 NA
9/30/96......... 1.58(5) 0.73(5) 161 0.0600
</TABLE>
- ------------
@ The average commission per share is derived by taking the agency commissions
paid on equity securities trades and dividing by the number of shares
purchased or sold.
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
9/30/94 9/30/95 9/30/96
------- ------- -------
<S> <C> <C> <C>
Global Balanced Class A.............................. 1.14% .40% .44%
Global Balanced Class B.............................. .93 .45 .41
Growth and Income Class A............................ 4.48 2.96 1.01
Growth and Income Class B............................ 20.35 5.07 1.14
</TABLE>
See Notes to Financial Statements
9
<PAGE>
SUNAMERICA BALANCED ASSETS FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -----------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--62.8%
AEROSPACE & MILITARY TECHNOLOGY--1.6%
Boeing Co............................................... 30,000 $ 2,835,000
Raytheon Co............................................. 40,000 2,225,000
-----------
5,060,000
-----------
APPAREL & TEXTILES--3.1%
Fila Holding SpA ADR(1)................................. 20,000 1,922,500
NIKE, Inc. Class B...................................... 25,000 3,037,500
Oakley, Inc.+........................................... 58,000 2,465,000
Reebok International Ltd. .............................. 35,000 1,216,250
Tommy Hilfiger Corp.+................................... 20,000 1,185,000
-----------
9,826,250
-----------
AUTOMOTIVE--0.9%
Ford Motor Co........................................... 40,000 1,250,000
Harley-Davidson, Inc. .................................. 35,000 1,505,000
-----------
2,755,000
-----------
BANKS--5.6%
Bank of Boston Corp..................................... 25,000 1,446,875
BankAmerica Corp........................................ 25,000 2,053,125
Chase Manhattan Corp.................................... 40,000 3,205,000
Citicorp................................................ 20,000 1,812,500
First Bank System, Inc.................................. 25,000 1,671,875
First Union Corp. ...................................... 35,000 2,336,250
Summit Bancorp.......................................... 130,000 5,167,500
-----------
17,693,125
-----------
BROADCASTING & MEDIA--0.3%
Comcast Corp. Class A+.................................. 50,000 768,750
Univision Communications, Inc. Class A+................. 2,000 67,000
-----------
835,750
-----------
BUSINESS SERVICES--0.2%
CUC International, Inc.+................................ 20,000 797,500
-----------
CHEMICALS--3.3%
Cabot Corp.............................................. 35,000 975,625
du Pont (E.I.) de Nemours & Co.......................... 20,000 1,765,000
Monsanto Co............................................. 55,000 2,007,500
Olin Corp. ............................................. 50,000 4,200,000
Union Carbide Corp...................................... 35,000 1,596,875
-----------
10,545,000
-----------
COMMUNICATION EQUIPMENT--2.6%
Ericsson (L.M.) Telephone Co., Class B ADR(1)........... 100,000 2,537,500
Nokia Corp. ADR(1)...................................... 40,000 1,770,000
Octel Communications Corp.+............................. 70,000 2,030,000
Tellabs, Inc.+.......................................... 30,000 2,118,750
-----------
8,456,250
-----------
</TABLE>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<TABLE>
<S> <C> <C>
COMPUTERS & BUSINESS EQUIPMENT--3.9%
American Pad & Paper Co.+................................. 111,000 $ 2,358,750
CellNet Data Systems, Inc.+............................... 20,000 315,000
Cisco Systems, Inc.+...................................... 25,000 1,551,563
Electronic Data Systems Corp.............................. 30,000 1,841,250
International Business Machines Corp. .................... 40,000 4,980,000
Sun Microsystems, Inc.+................................... 25,000 1,553,125
-----------
12,599,688
-----------
CONGLOMERATE--1.5%
General Electric Co....................................... 25,000 2,275,000
United Technologies Corp.................................. 20,000 2,402,500
-----------
4,677,500
-----------
DEPARTMENT STORES--1.3%
Penney (J.C.), Inc........................................ 30,000 1,623,750
Wal-Mart Stores, Inc. .................................... 100,000 2,637,500
-----------
4,261,250
-----------
ELECTRONICS--2.2%
Diebold, Inc.............................................. 40,000 2,335,000
Intel Corp................................................ 15,000 1,431,563
Lexmark International Group, Inc. Class A................. 50,000 1,018,750
Micron Technology, Inc.................................... 70,000 2,135,000
-----------
6,920,313
-----------
ENERGY SERVICES--2.5%
Mobil Corp. .............................................. 50,000 5,787,500
Royal Dutch Petroleum Co. ................................ 15,000 2,341,875
-----------
8,129,375
-----------
ENERGY SOURCES--1.0%
Burlington Resources, Inc. ............................... 30,000 1,331,250
Enron Corp................................................ 46,000 1,874,500
-----------
3,205,750
-----------
FINANCIAL SERVICES--4.1%
Alex Brown, Inc........................................... 30,000 1,736,250
Capital One Financial Corp. .............................. 70,000 2,100,000
Dean Witter, Discover & Co. .............................. 35,000 1,925,000
Federal National Mortgage Association..................... 60,000 2,092,500
Litchfield Financial Corp................................. 52,500 735,000
MBNA Corp................................................. 20,000 695,000
Morgan Stanley Group, Inc................................. 50,000 2,487,500
ReliaStar Financial Corp.................................. 25,000 1,187,500
-----------
12,958,750
-----------
FOOD, BEVERAGE & TOBACCO--1.9%
Dole Food, Inc............................................ 35,000 1,470,000
Philip Morris Cos., Inc................................... 30,000 2,692,500
Seagram Co., Ltd.......................................... 50,000 1,868,750
-----------
6,031,250
-----------
</TABLE>
10
<PAGE>
SUNAMERICA BALANCED ASSETS FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
HEALTH SERVICES--1.3%
Apria Healthcare Group, Inc.+............................. 30,000 $ 562,500
Beverly Enterprises, Inc.+................................ 75,000 815,625
MedPartners, Inc.+........................................ 60,500 1,376,375
NovaCare, Inc.+........................................... 150,000 1,406,250
------------
4,160,750
------------
HOUSEHOLD PRODUCTS--2.7%
Corning, Inc. ............................................ 40,000 1,560,000
Estee Lauder Cos., Inc. Class A........................... 30,000 1,346,250
Procter & Gamble Co....................................... 30,000 2,925,000
Warner-Lambert Co......................................... 40,000 2,640,000
------------
8,471,250
------------
INSURANCE--1.7%
Aetna, Inc................................................ 31,738 2,233,562
Allstate Corp............................................. 53,000 2,610,250
Lawyers Title Corp........................................ 25,000 531,250
------------
5,375,062
------------
LEISURE & TOURISM--4.5%
Callaway Golf Co.......................................... 35,000 1,194,375
Carnival Corp. Class A.................................... 47,000 1,457,000
Disney (Walt) Co.......................................... 35,000 2,218,125
HFS, Inc.+................................................ 30,500 2,039,687
Hilton Hotels Corp........................................ 80,000 2,270,000
MGM Grand, Inc.+.......................................... 65,000 2,746,250
Mirage Resorts, Inc.+..................................... 45,000 1,153,125
Sun International Hotels Ltd.+............................ 25,000 1,281,250
------------
14,359,812
------------
MEDICAL PRODUCTS--3.2%
Baxter International, Inc................................. 75,000 3,506,250
Imagyn Medical, Inc.+..................................... 45,000 483,750
Johnson & Johnson Co...................................... 40,000 2,050,000
Medtronic, Inc............................................ 30,000 1,923,750
Nitinol Medical Technologies, Inc.+....................... 10,000 112,500
Perkin-Elmer Corp......................................... 35,000 2,025,625
------------
10,101,875
------------
PHARMACEUTICALS--9.8%
Allergan, Inc............................................. 70,000 2,668,750
American Home Products Corp............................... 25,000 1,593,750
Bristol-Myers Squibb Co................................... 30,000 2,891,250
Chiron Corp.+............................................. 80,000 1,520,000
Genzyme Corp.+............................................ 40,000 1,020,000
Gilead Sciences, Inc.+.................................... 61,800 1,745,850
Glaxo Holdings PLC ADR(1)................................. 80,000 2,490,000
</TABLE>
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
PHARMACEUTICALS (CONTINUED)
Lilly (Eli) & Co................................ 60,000 $ 3,870,000
Merck & Co., Inc................................ 40,000 2,815,000
Neurex Corp.+................................... 65,000 1,243,125
Pfizer, Inc..................................... 60,000 4,747,500
Schering-Plough Corp............................ 40,000 2,460,000
Teva Pharmaceutical Industries Ltd. ADR(1)...... 40,000 1,855,000
Virus Research Institute, Inc.+................. 35,000 284,375
------------
31,204,600
------------
SOFTWARE--1.4%
Computer Associates International, Inc.+........ 20,000 1,195,000
Document Sciences Corp.+........................ 5,000 63,125
Microsoft Corp.+................................ 15,000 1,978,125
NETCOM On-Line Communications Services+......... 40,000 685,000
PSINet, Inc.+................................... 60,000 652,500
------------
4,573,750
------------
SPECIALTY RETAIL--0.7%
Melville Corp................................... 50,000 2,206,250
------------
TELECOMMUNICATIONS--1.5%
Advanced Fibre Communications+(2)............... 10,000 250,000
Andrew Corp.+................................... 30,000 1,496,250
AT&T Corp....................................... 25,000 1,306,250
Lucent Technologies, Inc........................ 35,000 1,605,625
------------
4,658,125
------------
TOTAL COMMON STOCK
(cost $182,931,590)............................. 199,864,225
------------
PREFERRED STOCK--0.0%
INSURANCE--0.0%
Aetna, Inc.
(cost $146,757)................................. 2,247 163,750
------------
BONDS & NOTES--5.5%
AEROSPACE & MILITARY TECHNOLOGY--1.3%
Lockheed Martin Corp.
7.25% due 5/15/06............................... $ 4,000 4,000,880
------------
BANKS--0.6%
Chase Manhattan Corp.
7.88% due 8/01/04............................... 2,000 2,008,420
------------
</TABLE>
11
<PAGE>
SUNAMERICA BALANCED ASSETS FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
BONDS & NOTES (CONTINUED)
FINANCIAL SERVICES--3.6%
Bear Stearns Cos., Inc.
6.63% due 1/15/04................................. $ 5,000 $4,802,150
DLJ Mortgage Acceptance Corp.
7.35% due 9/18/03................................. 4,689 4,687,398
Donaldson Lufkin & Jenrette, Inc.
6.88% due 11/01/05................................ 2,000 1,911,640
----------
11,401,188
----------
TOTAL BONDS & NOTES
(cost $17,129,808)................................ 17,410,488
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--1.1%
6.50% due 9/01/10
(cost $3,549,898)................................. 3,631 3,531,720
----------
U.S. TREASURY NOTES--16.5%
5.75% due 10/31/97................................ 5,000 4,995,300
6.25% due 5/31/00................................. 5,000 4,978,100
6.75% due 5/31/99................................. 5,000 5,060,150
6.88% due 7/31/99-3/31/00......................... 13,000 13,197,620
7.25% due 2/15/98-8/15/04......................... 13,300 13,713,025
7.50% due 10/31/99................................ 6,000 6,194,040
9.25% due 8/15/98................................. 4,000 4,218,120
----------
TOTAL U.S. TREASURY NOTES
(cost $52,624,421)................................ 52,356,355
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
U.S. TREASURY BONDS--6.7%
6.75% due 8/15/26.............................. $ 10,000 $ 9,773,400
11.25% due 2/15/15............................. 8,000 11,488,720
-------------
TOTAL U.S. TREASURY BONDS
(cost $21,390,625)............................. 21,262,120
-------------
TOTAL INVESTMENT SECURITIES--92.6%
(cost $277,773,099)............................ 294,588,658
-------------
REPURCHASE AGREEMENT--2.6%
Joint Repurchase Agreement
Account (Note 3)
(cost $8,398,000).............................. 8,398 8,398,000
-------------
TOTAL INVESTMENTS--
(cost $286,171,099)............................ 95.2% 302,986,658
Other assets less liabilities................... 4.8 15,245,304
----- -------------
NET ASSETS-- 100.0% $318,231,962
===== =============
</TABLE>
- --------
+Non-income producing security
(1)ADR ("American Depositary Receipt")
(2)Fair valued security, see Note 2
See Notes to Financial Statements
12
<PAGE>
SUNAMERICA BLUE CHIP GROWTH FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--91.6%
AEROSPACE & MILITARY TECHNOLOGY--2.7%
Boeing Co.................................................. 10,000 $ 945,000
Raytheon Co................................................ 20,000 1,112,500
Remec, Inc.+............................................... 25,000 353,125
-----------
2,410,625
-----------
APPAREL & TEXTILES--4.6%
Fila Holding SpA ADR(1).................................... 5,000 480,625
NIKE, Inc.................................................. 10,000 1,215,000
Oakley, Inc.+.............................................. 35,000 1,487,500
Tommy Hilfiger Corp.+...................................... 15,000 888,750
-----------
4,071,875
-----------
AUTOMOTIVE--1.3%
Ford Motor Co. ............................................ 15,000 468,750
Harley-Davidson, Inc....................................... 15,000 645,000
-----------
1,113,750
-----------
BANKS--5.3%
BankAmerica Corp........................................... 5,000 410,625
Citicorp................................................... 10,000 906,250
First Union Corp........................................... 15,000 1,001,250
Standard Federal Bancorp................................... 25,000 1,143,750
Summit Bancorp............................................. 30,000 1,192,500
-----------
4,654,375
-----------
BROADCASTING & MEDIA--1.0%
Comcast Corp. Class A+..................................... 15,000 230,625
National Media Corp.+...................................... 40,000 595,000
Univision Communications, Inc.
Class A+.................................................. 2,000 67,000
-----------
892,625
-----------
BUSINESS SERVICES--0.4%
CUC International, Inc.+................................... 10,000 398,750
-----------
CHEMICALS--5.3%
Cabot Corp................................................. 15,000 418,125
du Pont (E.I.) de Nemours & Co............................. 5,000 441,250
Hercules, Inc.............................................. 10,000 547,500
Monsanto Co................................................ 20,000 730,000
Olin Corp. ................................................ 25,000 2,100,000
Union Carbide Corp......................................... 10,000 456,250
-----------
4,693,125
-----------
COMMUNICATION EQUIPMENT--4.1%
Ericsson (L.M.) Telephone Co., Class B ADR(1).............. 30,000 761,250
Nokia Corp. ADR(1)......................................... 20,000 885,000
Octel Communications Corp.+................................ 30,000 870,000
Tellabs, Inc.+............................................. 15,000 1,059,375
-----------
3,575,625
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
COMPUTERS & BUSINESS EQUIPMENT--9.0%
American Pad & Paper Co.+.................................. 50,000 $ 1,062,500
Cisco Systems, Inc.+....................................... 15,000 930,937
Electronic Data Systems Corp............................... 20,000 1,227,500
International Business Machines Corp....................... 10,000 1,245,000
Lexmark International Group, Inc.+......................... 25,000 509,375
Micron Technology, Inc..................................... 48,000 1,464,000
Storage Technology Corp.+.................................. 15,000 568,125
Sun Microsystems, Inc.+.................................... 15,000 931,875
-----------
7,939,312
-----------
CONGLOMERATE--2.4%
General Electric Co. ...................................... 10,000 910,000
United Technologies Corp. ................................. 10,000 1,201,250
-----------
2,111,250
-----------
CONSUMER GOODS--0.4%
Whitman Corp............................................... 15,000 346,875
-----------
DEPARTMENT STORES--1.8%
Penney (J.C.), Inc......................................... 15,000 811,875
Wal-Mart Stores, Inc....................................... 30,000 791,250
-----------
1,603,125
-----------
ELECTRONICS--1.9%
Diebold, Inc. ............................................. 20,000 1,167,500
Intel Corp................................................. 5,000 477,188
-----------
1,644,688
-----------
ENERGY SERVICES--2.8%
Mobil Corp................................................. 15,000 1,736,250
Royal Dutch Petroleum Co................................... 5,000 780,625
-----------
2,516,875
-----------
ENERGY SOURCES--0.5%
Burlington Resources, Inc. ................................ 10,000 443,750
-----------
ENTERTAINMENT PRODUCTS--1.2%
Callaway Golf Co........................................... 15,000 511,875
Toy Biz, Inc. Class A+..................................... 30,000 532,500
-----------
1,044,375
-----------
FINANCIAL SERVICES--4.2%
Alex Brown, Inc............................................ 10,000 578,750
Capital One Financial Corp................................. 20,000 600,000
Dean Witter, Discover & Co................................. 15,000 825,000
Federal National Mortgage Association...................... 10,000 348,750
MBNA Corp. ................................................ 10,000 347,500
Morgan Stanley Group, Inc. ................................ 10,000 497,500
ReliaStar Financial Corp................................... 10,000 475,000
-----------
3,672,500
-----------
</TABLE>
13
<PAGE>
SUNAMERICA BLUE CHIP GROWTH FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
FOOD, BEVERAGE & TOBACCO--2.9%
Dole Food, Inc............................................. 15,000 $ 630,000
Odwalla, Inc.+............................................. 25,000 443,750
Philip Morris Cos., Inc.................................... 10,000 897,500
Seagram Co., Ltd. ......................................... 15,000 560,625
-----------
2,531,875
-----------
HEALTH SERVICES--1.5%
Apria Healthcare Group, Inc.+.............................. 20,000 375,000
Beverly Enterprises, Inc.+................................. 25,000 271,875
Health Management Associates+.............................. 15,000 373,125
Healthsource, Inc.+........................................ 20,000 295,000
-----------
1,315,000
-----------
HOUSEHOLD PRODUCTS--3.0%
Corning, Inc. ............................................. 15,000 585,000
Estee Lauder Cos., Inc., Class A........................... 20,000 897,500
Procter & Gamble Co........................................ 5,000 487,500
Warner-Lambert Co.......................................... 10,000 660,000
-----------
2,630,000
-----------
INSURANCE--4.2%
Aetna, Inc................................................. 18,369 1,292,718
Allstate Corp.............................................. 20,000 985,000
Lawyers Title Corp. ....................................... 25,000 531,250
UICI+...................................................... 35,000 910,000
-----------
3,718,968
-----------
LEISURE & TOURISM--7.3%
Extended Stay America, Inc.+............................... 50,000 1,025,000
HFS, Inc.+................................................. 15,000 1,003,125
Hilton Hotels Corp......................................... 40,000 1,135,000
MGM Grand, Inc.+........................................... 45,000 1,901,250
Mirage Resorts, Inc.+...................................... 25,000 640,625
Sun International Hotels Ltd.+............................. 15,000 768,750
-----------
6,473,750
-----------
MEDICAL PRODUCTS--5.2%
Baxter International, Inc.................................. 25,000 1,168,750
Chiron Corp.+.............................................. 42,000 798,000
Johnson & Johnson Co....................................... 15,000 768,750
Medtronic, Inc............................................. 15,000 961,875
Perkin Elmer Corp.......................................... 15,000 868,125
-----------
4,565,500
-----------
PHARMACEUTICALS--12.8%
Allergan, Inc.............................................. 30,000 1,143,750
American Home Products Corp. .............................. 10,000 637,500
Bristol-Myers Squibb Co. .................................. 15,000 1,445,625
Gilead Sciences, Inc.+..................................... 18,200 514,150
Lilly (Eli) & Co. ......................................... 20,000 1,290,000
</TABLE>
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
PHARMACEUTICALS (CONTINUED)
Merck & Co., Inc................................... 15,000 $ 1,055,625
Neurex Corp.+...................................... 40,000 765,000
Pfizer, Inc........................................ 25,000 1,978,125
Schering-Plough Corp............................... 20,000 1,230,000
Teva Pharmaceutical Industries Ltd. ADR(1)......... 20,000 927,500
Virus Research Institute, Inc.+.................... 40,000 325,000
-----------
11,312,275
-----------
POLLUTION CONTROL--0.8%
Republic Industries, Inc.+......................... 25,000 725,000
-----------
SOFTWARE--2.1%
Computer Associates International, Inc............. 10,000 597,500
Microsoft Corp.+................................... 5,000 659,375
NETCOM On-Line Communications Services+............ 20,000 342,500
PSINet, Inc.+...................................... 20,000 217,500
-----------
1,816,875
-----------
SPECIALTY RETAIL--1.0%
Melville Corp. .................................... 20,000 882,500
-----------
TELECOMMUNICATIONS--1.9%
Andrew Corp.+...................................... 20,000 997,500
Lucent Technologies, Inc........................... 15,000 688,125
-----------
1,685,625
-----------
TOTAL COMMON STOCK
(cost $74,899,347)................................... 80,790,868
-----------
PREFERRED STOCK--0.1%
INSURANCE--0.1%
Aetna, Inc. Class C................................ 1,123 81,839
-----------
TOTAL INVESTMENT SECURITIES--91.7%
(cost $74,972,693)................................. 80,872,707
-----------
REPURCHASE AGREEMENT--1.3%
Joint Repurchase Agreement Account (Note 3)
(cost $1,189,000).................................. $1,189 1,189,000
-----------
TOTAL INVESTMENTS--
(cost $76,161,693)................................. 93.0% 82,061,707
Other assets less liabilities....................... 7.0 6,131,199
------ -----------
NET ASSETS-- 100.0% $88,192,906
====== ===========
</TABLE>
- --------
+ Non-income producing security
(1) ADR ("American Depositary Receipt")
See Notes to Financial Statements
14
<PAGE>
SUNAMERICA MID-CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -----------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--92.9%
AEROSPACE & MILITARY TECHNOLOGY--1.3%
Hexcel Corp.+............................................. 10,000 $ 193,750
REMEC, Inc.+.............................................. 37,000 522,625
----------
716,375
----------
APPAREL & TEXTILES--9.6%
Fila Holding SpA ADR(1)................................... 2,000 192,250
Gucci Group NV ADR(1)..................................... 10,000 725,000
Jones Apparel Group, Inc.+................................ 15,000 956,250
NIKE, Inc. ............................................... 6,000 729,000
Nine West Group, Inc.+.................................... 12,000 651,000
North Face, Inc.+......................................... 23,000 649,750
Pacific Sunwear of California+............................ 15,000 493,125
Reebok International Ltd. ................................ 15,000 521,250
Tommy Hilfiger Corp.+..................................... 7,000 414,750
----------
5,332,375
----------
BANKS--1.4%
Charter One Financial, Inc. .............................. 10,500 420,000
PNC Bank Corp. ........................................... 10,000 333,750
----------
753,750
----------
BUSINESS SERVICES--1.8%
Applied Graphics Technologies+............................ 20,100 298,988
Data Processing Resources Corp.+.......................... 14,200 312,400
TeleSpectrum Worldwide, Inc.+............................. 20,000 390,000
----------
1,001,388
----------
CHEMICALS--2.7%
Nalco Chemical Co. ....................................... 10,000 362,500
Praxair, Inc. ............................................ 15,000 645,000
Waters Corp.+............................................. 15,000 491,250
----------
1,498,750
----------
COMMUNICATION EQUIPMENT--2.9%
Cascade Communications Co.+............................... 6,000 489,000
Octel Communications Corp.+............................... 15,000 435,000
Tellabs, Inc.+............................................ 10,000 706,250
----------
1,630,250
----------
COMPUTERS & BUSINESS EQUIPMENT--9.8%
Amati Communications Corp.+............................... 10,000 220,000
Bay Networks, Inc.+....................................... 10,000 272,500
Cabletron Systems, Inc.+.................................. 5,000 341,875
CellNet Data Systems, Inc.+............................... 20,000 315,000
CIBER, Inc.+.............................................. 18,200 691,600
Cisco Systems, Inc.+...................................... 12,000 744,750
COMPAQ Computer Corp.+.................................... 7,000 448,875
Gateway 2000, Inc. ....................................... 7,000 335,125
HBO & Co. ................................................ 10,000 667,500
Micron Technology, Inc. .................................. 15,000 457,500
</TABLE>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<TABLE>
<S> <C> <C>
COMPUTERS & BUSINESS EQUIPMENT (CONTINUED)
Newbridge Networks Corp.+................................... 5,000 $ 318,750
Sun Microsystems, Inc.+..................................... 10,000 621,250
----------
5,434,725
----------
CONGLOMERATE--0.8%
Tyco International Ltd. .................................... 10,000 431,250
----------
DEPARTMENT STORES--0.6%
Woolworth Corp.+............................................ 15,000 309,375
----------
ELECTRONICS--4.7%
Analog Devices, Inc.+....................................... 10,000 271,250
Diebold, Inc. .............................................. 17,000 992,375
National Semiconductor Corp.+............................... 20,000 402,500
Telco Systems, Inc.+........................................ 10,000 190,000
VeriFone, Inc.+............................................. 10,000 447,500
Xilinx, Inc.+............................................... 10,000 340,000
----------
2,643,625
----------
ENERGY SERVICES--3.4%
Global Marine, Inc.+........................................ 25,000 393,750
Noble Drilling Corp.+....................................... 22,500 340,313
Rowan Cos., Inc.+........................................... 30,000 558,750
Transocean Offshore, Inc.................................... 10,000 612,500
----------
1,905,313
----------
ENERGY SOURCES--2.2%
Flores & Rucks, Inc.+....................................... 25,000 965,625
Parker & Parsley Petroleum Co. ............................. 10,000 261,250
----------
1,226,875
----------
ENTERTAINMENT PRODUCTS--0.6%
Callaway Golf Co............................................ 10,000 341,250
----------
FINANCIAL SERVICES--1.4%
Alex Brown, Inc. ........................................... 6,000 347,250
Associates First Capital Corp., Class A..................... 10,000 410,000
----------
757,250
----------
HOUSEHOLD PRODUCTS--1.0%
Blyth Industries, Inc.+..................................... 4,700 227,950
Corning, Inc. .............................................. 8,000 312,000
----------
539,950
----------
INSURANCE--2.7%
Allmerica Financial Corp. .................................. 10,000 325,000
Lawyers Title Corp. ........................................ 20,000 425,000
Maxicare Health Plans, Inc.+................................ 10,000 190,000
Progressive Corp. .......................................... 10,000 572,500
----------
1,512,500
----------
</TABLE>
15
<PAGE>
SUNAMERICA MID-CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
LEISURE & TOURISM--1.9%
HFS, Inc.+................................................. 3,800 $ 254,125
Sun International Hotels Ltd.+............................. 16,000 820,000
----------
1,074,125
----------
MACHINERY--3.2%
Allied Products Corp. ..................................... 15,000 375,000
Flanders Corp.+(2)(3)...................................... 100,000 900,000
Precision Castparts Corp. ................................. 10,000 485,000
----------
1,760,000
----------
MEDICAL PRODUCTS--2.6%
Boston Scientific Corp.+................................... 12,000 690,000
Cohr, Inc.+................................................ 20,000 555,000
Nitinol Medical Technologies, Inc.+........................ 5,000 56,250
Serologicals Corp.+........................................ 5,000 173,750
----------
1,475,000
----------
METALS & MINING--0.7%
Crown, Cork & Seal, Inc. .................................. 9,000 415,125
----------
PHARMACEUTICALS--7.0%
ABR Information Services, Inc.+............................ 10,000 720,000
Allergan, Inc. ............................................ 20,000 762,500
Centocor, Inc.+............................................ 10,000 355,000
Guilford Pharmaceuticals, Inc.+............................ 10,000 275,000
Ligand Pharmaceuticals, Inc.+.............................. 15,000 204,375
Neurex Corp.+.............................................. 25,000 478,125
Teva Pharmaceutical Industries Ltd. ADR(1)................. 23,500 1,089,812
----------
3,884,812
----------
POLLUTION CONTROL--4.2%
Culligan Water Technologies, Inc.+......................... 15,000 568,125
United States Filter Corporation........................... 5,000 170,625
United Waste Systems, Inc. ................................ 30,000 1,042,500
USA Waste Services, Inc.+.................................. 17,000 535,500
----------
2,316,750
----------
REAL ESTATE--0.3%
Green Tree Financial Corp. ................................ 5,000 196,250
----------
REAL ESTATE INVESTMENT TRUSTS--2.0%
Bay Apartment Communities, Inc. ........................... 15,000 427,500
Innkeepers USA Trust....................................... 25,000 281,250
Starwood Lodging Trust..................................... 10,000 418,750
----------
1,127,500
----------
RESTAURANTS--0.6%
Starbucks Corp.+........................................... 10,000 330,000
----------
SOFTWARE--8.5%
Baan Co. NV+............................................... 10,000 333,750
BDM International, Inc.+................................... 10,000 595,000
BMC Software, Inc.+........................................ 5,000 397,500
Cognos, Inc.+.............................................. 10,000 326,250
Computer Associates International, Inc. ................... 8,000 478,000
Innovus Corp.+............................................. 14,000 84,000
JDA Software Group, Inc.+.................................. 12,000 330,000
Microsoft Corp.+........................................... 4,000 527,500
</TABLE>
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
SOFTWARE (CONTINUED)
PeopleSoft, Inc.+................................. 5,000 $ 416,250
Rational Software Corp.+.......................... 10,000 341,250
RemedyTemp, Inc.+................................. 15,000 318,750
VIASOFT, Inc.+.................................... 14,000 588,000
-----------
4,736,250
-----------
SPECIALTY RETAIL--7.3%
Eagle Hardware And Groden+........................ 20,000 540,000
Global DirectMail Corp.+.......................... 20,000 955,000
Just For Feet, Inc.+.............................. 10,000 501,250
MacFrugals Bargains Closeouts+.................... 25,000 590,625
Melville Corp. ................................... 12,000 529,500
Saks Holdings Incorporated+....................... 10,000 350,000
Tiffany & Co. .................................... 15,000 600,000
-----------
4,066,375
-----------
TELECOMMUNICATIONS--6.5%
ACC Corp. ........................................ 4,500 212,625
Ascend Communications, Inc. ...................... 5,000 330,625
Lucent Technologies, Inc. ........................ 5,000 229,375
NICE Systems Ltd. ADR +(1)........................ 20,000 458,125
Pacific Gateway Exchange, Inc.+................... 22,000 649,000
PairGain Technologies, Inc.+...................... 6,300 492,187
Teleport Communications Group
Class A+......................................... 24,000 567,000
Westell Technologies, Inc. Class A+............... 16,000 708,000
-----------
3,646,937
-----------
UTILITIES--1.2%
El Paso Natural Gas Co. .......................... 15,000 660,000
-----------
TOTAL COMMON STOCK
(cost $41,236,289)................................ 51,724,125
-----------
WARRANTS--0.7%+
ELECTRONICS--0.7%
Intel Corp........................................ 7,000 397,250
-----------
TOTAL INVESTMENT SECURITIES--93.6%
(cost $41,512,876)................................ 52,121,375
-----------
REPURCHASE AGREEMENT--7.3%
Joint Repurchase Agreement
Account (Note 3)
(cost $4,072,000)................................. $4,072 4,072,000
-----------
TOTAL INVESTMENTS--
(cost $45,584,876)................................ 100.9% 56,193,375
Liabilities in excess of other assets.............. (0.9) (505,189)
------ -----------
NET ASSETS-- 100.0% $55,688,186
====== ===========
</TABLE>
- -------
+ Non-income producing security
(1) ADR ("American Depositary Receipts")
(2) Fair valued security, see Note 2
(3) At September 30, 1996 the Fund held a restricted security amounting to
1.62% of net assets. The Fund will not bear any costs, including those
involved in registration under the Securities Act of 1933, in the
connection with the disposition of the securities.
<TABLE>
<CAPTION>
DATE OF UNIT VALUATION AS OF
DESCRIPTION ACQUISITION COST SEPTEMBER 30, 1996
- -------------- ----------- ----- ------------------
<S> <C> <C> <C>
Flanders Corp. 5/09/96 $5.00 $9.00
</TABLE>
See Notes to Financial Statements
16
<PAGE>
SUNAMERICA SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--93.3%
AEROSPACE & MILITARY TECHNOLOGY--1.5%
Hexcel Corp.+........................................... 30,000 $ 581,250
Nichols Research Corp.+................................. 40,000 1,190,000
REMEC, Inc.+............................................ 100,500 1,419,563
Rohr, Inc.+............................................. 40,000 785,000
------------
3,975,813
------------
APPAREL & TEXTILES--2.7%
Fila Holding SpA ADR(1)................................. 8,000 769,000
Gucci Group NV.......................................... 10,000 725,000
Jones Apparel Group, Inc.+.............................. 20,000 1,275,000
Nautica Enterprises, Inc.+.............................. 30,000 967,500
North Face, Inc.+....................................... 45,000 1,271,250
Pacific Sunwear of California+.......................... 62,500 2,054,687
------------
7,062,437
------------
BANKS--2.5%
First American Corp. (Tennessee)........................ 50,000 2,400,000
Long Island Bancorp, Inc................................ 55,000 1,588,125
PNC Bank Corp........................................... 39,500 1,318,313
Summit Bancorp.......................................... 31,500 1,252,125
------------
6,558,563
------------
BROADCASTING & MEDIA--2.4%
Mecklermedia Corp.+..................................... 115,600 2,080,800
National Media Corp.+................................... 70,700 1,051,663
Sinclair Broadcast Group, Inc. Class A+................. 40,800 1,626,900
United Video Satellite Group Class A+................... 80,000 1,620,000
Univision Communications, Inc. Class A+................. 3,000 100,500
------------
6,479,863
------------
BUSINESS SERVICES--5.9%
Abacus Direct Corp.+.................................... 6,500 136,500
Childrens Comprehensive
Services, Inc.+........................................ 90,000 1,597,500
Datamark Holdings, Inc.+................................ 96,774 1,185,481
Datamark Holdings, Inc.+(2)(3).......................... 193,549 1,887,103
International Network Services+......................... 33,000 1,159,125
Learning Tree International, Inc+....................... 12,500 462,500
Mecon, Inc.+............................................ 45,100 1,127,500
Paychex, Inc............................................ 25,000 1,450,000
ProSoft Development, Inc.+(2)(3)........................ 250,000 2,500,000
RTW, Inc.+.............................................. 48,000 1,386,000
SOS Staffing Services, Inc.+............................ 75,000 843,750
TeleSpectrum Worldwide, Inc.+........................... 80,000 1,560,000
Vincam Group, Inc.+..................................... 10,000 382,500
------------
15,677,959
------------
CHEMICALS--2.0%
Betz Laboratories, Inc.................................. 43,100 2,262,750
Nalco Chemical Co....................................... 87,000 3,153,750
------------
5,416,500
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
COMMUNICATION EQUIPMENT--3.3%
Cascade Communications Co.+............................... 28,000 $ 2,282,000
DSP Communications, Inc.+................................. 35,000 1,955,625
Octel Communications Corp.+............................... 40,000 1,160,000
Registry, Inc.+........................................... 50,500 1,919,000
Tellabs, Inc.+............................................ 20,000 1,412,500
------------
8,729,125
------------
COMPUTERS & BUSINESS EQUIPMENT--9.0%
3Com Corp.+............................................... 20,000 1,201,250
Amati Communications Corp.+............................... 40,000 880,000
Bay Networks, Inc.+....................................... 25,000 681,250
CellNet Data Systems, Inc.+............................... 20,000 315,000
Chips & Technologies, Inc.+............................... 90,000 1,226,250
CIBER, Inc.+.............................................. 69,300 2,633,400
Cisco Systems, Inc.+...................................... 32,000 1,986,000
Daisytek International Corp.+............................. 21,000 908,250
FORE Systems, Inc.+....................................... 20,000 827,500
HMT Technology Corp.+..................................... 45,000 978,750
ITI Technologies, Inc.+................................... 35,000 1,233,750
Lexmark International Group, Inc.+........................ 75,000 1,528,125
Linear Technology Corp.................................... 50,000 1,843,750
M-Systems Flash Disk Pioneers Ltd.+....................... 100,000 887,500
Micron Electronics, Inc.+................................. 50,000 1,031,250
Micron Technology, Inc.................................... 45,000 1,372,500
Newbridge Networks Corp.+................................. 20,000 1,275,000
Versant Object Technology Corp.+.......................... 60,000 1,425,000
Whittman-Hart, Inc.+...................................... 35,500 1,677,375
------------
23,911,900
------------
ELECTRICAL EQUIPMENT--0.2%
UCAR International, Inc.+................................. 15,000 607,500
------------
ELECTRONICS--5.7%
Altera Corp.+............................................. 10,000 506,250
Cymer, Inc.+.............................................. 25,000 443,750
Diebold, Inc.............................................. 59,000 3,444,125
DuPont Photomasks, Inc.+.................................. 40,000 1,120,000
ESS Technology, Inc.+..................................... 50,000 856,250
Micrel, Inc.+............................................. 30,000 712,500
Photronics, Inc.+......................................... 45,000 1,395,000
Sawtek, Inc.+............................................. 32,500 845,000
Supertex, Inc.+........................................... 80,000 1,450,000
Telco Systems, Inc.+...................................... 55,000 1,045,000
Uniphase Corp.+........................................... 35,000 1,478,750
Vitesse Semiconductor Corp.+.............................. 30,000 1,158,750
Xilinx, Inc.+............................................. 20,000 680,000
------------
15,135,375
------------
ENERGY SERVICES--3.6%
ENSCO International, Inc.+................................ 37,500 1,218,750
Falcon Drilling, Inc.+.................................... 60,000 1,560,000
Marine Drilling Co., Inc.+................................ 75,000 721,875
Noble Drilling Corp.+..................................... 132,500 2,004,062
Parallel Petroleum Corp.+................................. 90,000 455,625
</TABLE>
17
<PAGE>
SUNAMERICA SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
ENERGY SERVICES (CONTINUED)
Reading & Bates Corp.+.................................... 65,000 $ 1,763,125
Transocean Offshore, Inc. ................................ 30,000 1,837,500
-----------
9,560,937
-----------
ENERGY SOURCES--2.0%
Belco Oil & Gas Corp.+.................................... 15,500 414,625
Benton Oil & Gas Co. +.................................... 80,000 1,740,000
Flores & Rucks, Inc.+..................................... 40,000 1,545,000
Parker & Parsley Petroleum Co. ........................... 40,000 1,045,000
Pride Petroleum Services, Inc.+........................... 50,000 706,250
-----------
5,450,875
-----------
FOOD, BEVERAGE & TOBACCO--0.4%
Northland Cranberries, Inc. .............................. 55,000 935,000
-----------
HEALTH SERVICES--3.1%
Apache Medical Systems, Inc.+............................. 24,000 324,000
Applied Analytical Industries, Inc.+...................... 76,000 1,729,000
Health Images, Inc. ...................................... 100,000 1,337,500
NovaCare, Inc.+........................................... 175,000 1,640,625
OccuSystems, Inc.+........................................ 17,500 525,000
Pediatrix Medical Group+.................................. 30,000 1,503,750
Sunrise Assisted Living, Inc.+............................ 21,000 588,000
Veterinary Centers of America, Inc.+...................... 30,000 658,125
-----------
8,306,000
-----------
INSURANCE--1.8%
Allmerica Financial Corp.+................................ 15,000 487,500
Lawyers Title Corp. ...................................... 70,000 1,487,500
Maxicare Health Plans, Inc.+.............................. 40,000 760,000
Penn Treaty American Corp.+............................... 90,000 2,137,500
-----------
4,872,500
-----------
LEISURE & TOURISM--1.4%
Bally Entertainment Corp. ................................ 40,000 1,135,000
HFS, Inc.+................................................ 23,700 1,584,938
Studio Plus Hotels, Inc.+................................. 67,500 1,113,750
-----------
3,833,688
-----------
MACHINERY--3.0%
DT Industries Inc. ....................................... 45,000 1,518,750
Flanders Corp.+(2)(3)..................................... 500,000 4,500,000
Precision Castparts Corp. ................................ 40,000 1,940,000
-----------
7,958,750
-----------
MEDICAL PRODUCTS--4.0%
ADAC Laboratories......................................... 80,000 1,610,000
Cardiovascular Dynamics, Inc. ............................ 100,000 1,525,000
Cohr, Inc.+............................................... 70,000 1,942,500
Neurex Corp.+............................................. 127,500 2,438,437
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
MEDICAL PRODUCTS (CONTINUED)
Nitinol Medical Technologies, Inc.+........................ 5,000 $ 56,250
Serologicals Corp.+........................................ 90,000 3,127,500
-----------
10,699,687
-----------
METALS & MINING--1.1%
Diamond Offshore Drilling, Inc.+........................... 26,400 1,452,000
Mueller Industries, Inc.+.................................. 35,000 1,421,875
-----------
2,873,875
-----------
PHARMACEUTICALS--5.8%
ABR Information Services, Inc.+............................ 20,000 1,440,000
Agouron Pharmaceuticals, Inc.+............................. 17,000 741,625
Allergan Ligand Retinoid Theraputics, Inc.+(4)............. 75,000 2,193,750
DepoTech Corp.+............................................ 25,900 446,775
Guilford Pharmaceuticals, Inc.+............................ 65,000 1,787,500
Ligand Pharmaceuticals, Inc.+.............................. 85,000 1,158,125
M.I.M. Corp.+.............................................. 55,000 797,500
Medicis Pharmaceutical Corp. Class A+...................... 10,000 482,500
Millenium Pharmaceuticals, Inc.+........................... 4,000 73,000
Noven Pharmaceuticals, Inc.+............................... 75,000 946,875
PAREXAL International Corp.+............................... 30,000 1,890,000
Pharmaceutical Product Development, Inc.+.................. 36,500 985,500
Teva Pharmaceutical Industries Ltd. ADR(1)................. 57,500 2,666,562
-----------
15,609,712
-----------
POLLUTION CONTROL--0.9%
United Waste Systems, Inc.+................................ 35,000 1,216,250
USA Waste Services, Inc.+.................................. 34,000 1,071,000
-----------
2,287,250
-----------
REAL ESTATE INVESTMENT TRUSTS -- 1.3%
Bay Apartment Communities, Inc............................. 20,000 570,000
FelCor Suite Hotels, Inc................................... 40,000 1,290,000
Innkeepers USA Trust....................................... 95,000 1,068,750
Starwood Lodging Trust..................................... 10,000 418,750
-----------
3,347,500
-----------
SOFTWARE--15.7%
BDM International, Inc.+................................... 62,500 3,718,750
Black Box Corp.+........................................... 60,000 1,980,000
CCC Information Services Group, Inc.+...................... 12,500 262,500
Citrix Systems, Inc.+...................................... 26,500 1,358,125
Cognos, Inc.+.............................................. 59,800 1,950,975
Document Sciences Corp.+................................... 75,000 946,875
DST Systems, Inc.+......................................... 20,000 640,000
Finish Line, Inc. Class A+................................. 20,000 950,000
Forte Software, Inc.+...................................... 13,500 529,875
</TABLE>
18
<PAGE>
SUNAMERICA SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
SOFTWARE (CONTINUED)
Ikos Systems, Inc.+........................................ 30,000 $ 596,250
Innovus Corp.+............................................. 92,700 556,200
Innovus Corp.+(2)(3)....................................... 54,000 189,000
JDA Software Group, Inc.................................... 80,000 2,200,000
Legato Systems, Inc.+...................................... 35,000 1,662,500
National Data Corp......................................... 17,000 741,625
Pc Docs Group International, Inc.+......................... 66,000 891,000
PeopleSoft, Inc.+.......................................... 15,000 1,248,750
Rational Software Corp+.................................... 40,000 1,365,000
RemedyTemp, Inc. Class A+.................................. 62,000 1,317,500
Restrac, Inc.+............................................. 122,000 2,287,500
S3, Inc.+.................................................. 60,000 1,185,000
Saville Systems PLC ADR+(1)................................ 50,000 1,762,500
Segue Software, Inc.+...................................... 100,000 1,375,000
Spyglass, Inc.+............................................ 8,200 154,775
Sykes Enterprises, Inc.+................................... 70,650 3,408,862
Symantec Corp.+............................................ 45,000 489,375
Verilink Corp.+............................................ 105,100 2,574,950
Veritas Software Co.+...................................... 30,000 2,122,500
VIASOFT, Inc.+............................................. 60,000 2,520,000
Xionics Document Technologies+............................. 47,500 712,500
----------
41,697,887
----------
SPECIALTY RETAIL--3.2%
Central Garden & Pet Co.+.................................. 35,000 704,375
Gadzooks, Inc.+............................................ 52,500 1,824,375
Global DirectMail Corp.+................................... 30,000 1,432,500
Hot Topic, Inc.+........................................... 67,500 1,586,250
MacFrugals Bargains Closeouts+............................. 75,000 1,771,875
PETsMART, Inc.+............................................ 50,000 1,293,750
----------
8,613,125
----------
TELECOMMUNICATIONS--9.5%
ACC Corp.+................................................. 15,000 708,750
ACE*COMM Corp.+............................................ 100,000 1,200,000
ADC Telecommunications, Inc.+.............................. 20,000 1,280,000
Advanced Fibre Communications+(3).......................... 10,000 250,000
Ascend Communications, Inc.+............................... 10,000 661,250
Boston Communications Group+............................... 65,000 1,056,250
Davox Corp.+............................................... 40,000 1,510,000
Harmonic Lightwaves, Inc.+................................. 80,000 1,570,000
LCC International, Inc.+................................... 54,000 985,500
Nexus Telecommunication Systems Ltd........................ 100,000 450,000
NICE Systems Ltd. ADR+(1).................................. 72,500 1,660,703
Omnipoint Corp.+........................................... 25,000 728,125
Orckit Communications Ltd.+................................ 54,100 994,088
Pacific Gateway Exchange, Inc.+............................ 120,000 3,540,000
PairGain Technologies, Inc.+............................... 21,400 1,671,875
Retix+..................................................... 115,000 934,375
Teledata Communications, Inc.+............................. 85,000 1,561,875
Teleport Communications Group Class A+..................... 58,000 1,370,250
</TABLE>
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
TELECOMMUNICATIONS (CONTINUED)
Westell Technologies, Inc. Class A+........... 55,000 $ 2,433,750
Winstar Communications, Inc.+................. 50,000 831,250
------------
25,398,041
------------
TRANSPORTATION--1.3%
Eagle USA Airfreight, Inc. +.................. 40,000 1,040,000
Trico Marine Services, Inc.+.................. 80,000 2,440,000
------------
3,480,000
------------
TOTAL COMMON STOCK
(cost $191,441,211)........................... 248,479,862
------------
WARRANTS--0.5%+
ELECTRONICS--0.5%
Intel Corp.................................... 25,000 1,418,750
------------
TELECOMMUNICATIONS--0.0%
Nexus Telecommunication Systems Ltd. Class D.. 100,000 87,500
------------
TOTAL WARRANTS
(cost $978,643)................................. 1,506,250
------------
TOTAL INVESTMENT SECURITIES--93.8%
(cost $192,419,854)........................... 249,986,112
------------
REPURCHASE AGREEMENT--3.7%
Joint Repurchase Agreement
Account (Note 3)
(cost $9,766,000)............................ $9,766 9,766,000
------------
TOTAL INVESTMENTS--
(cost $202,185,854)........................... 97.5% 259,752,112
Other assets less liabilities.................. 2.5 6,654,356
----
------------
NET ASSETS-- 100.0% $266,406,468
===== ============
</TABLE>
- -------
+ Non-income producing security
(1) ADR ("American Depositary Receipt")
(2) At September 30, 1996 the Fund held restricted securities amounting to
2.5% of net assets. The Fund will not bear any costs, including those
involved in registration under the Securities Act of 1933, in the
connection with the disposition of the securities.
<TABLE>
<CAPTION>
DATE OF UNIT VALUATION AS OF
DESCRIPTION ACQUISITION COST SEPTEMBER 30, 1996
----------- ----------- ------ ------------------
<S> <C> <C> <C>
Datamark Holdings, Inc. 4/01/96 $ 7.50 $ 9.75
ProSoft Development, Inc. 7/02/96 10.00 10.00
Flanders Corp. 5/09/96 5.00 9.00
Flanders Corp. 8/30/96 9.00 9.00
Innovus Corp. 3/21/95 3.50 3.50
</TABLE>
(3) Fair valued security, see Note 2
(4) Consists of stocks and warrants traded together as a unit
See Notes to Financial Statements
19
<PAGE>
SUNAMERICA GLOBAL BALANCED FUND
INVESTMENT PORTFOLIO -- September 30, 1996
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--65.1%
DOMESTIC EQUITY--17.1%
AEROSPACE & MILITARY TECHNOLOGY--0.8%
Boeing Co................................................... 1,000 $ 94,500
Raytheon Co................................................. 2,000 111,250
-----------
205,750
-----------
AUTOMOTIVE--0.3%
Ford Motor Co............................................... 2,500 78,125
-----------
BANKS--0.6%
Chase Manhattan Corp. ...................................... 1,000 80,125
Citicorp.................................................... 1,000 90,625
-----------
170,750
-----------
BROADCASTING & MEDIA--0.4%
Applied Graphics Technologies+.............................. 5,000 74,375
Chancellor Broadcasting Corp. Class A+...................... 1,000 41,500
-----------
115,875
-----------
BUSINESS SERVICES--0.3%
CUC International, Inc.+.................................... 2,000 79,750
-----------
CHEMICALS--1.7%
du Pont (E.I.) de Nemours & Co.............................. 1,000 88,250
Hercules, Inc............................................... 1,000 54,750
Olin Corp................................................... 1,000 84,000
Union Carbide Corp.......................................... 3,000 136,875
Waters Corp.+............................................... 2,500 81,875
-----------
445,750
-----------
COMMUNICATION EQUIPMENT--0.5%
Tellabs, Inc.+.............................................. 2,000 141,250
-----------
COMPUTERS & BUSINESS EQUIPMENT--0.4%
American Pad & Paper Co.+................................... 5,000 106,250
-----------
CONGLOMERATE--0.8%
AlliedSignal, Inc........................................... 2,000 131,750
General Electric Co......................................... 800 72,800
-----------
204,550
-----------
CONSTRUCTION & HOUSING--0.5%
Armstrong World Industries, Inc............................. 2,000 124,750
-----------
CONSTRUCTION MATERIALS--0.3%
Dal-Tile International, Inc.+............................... 5,000 81,875
-----------
ENERGY SERVICES--0.2%
Baker Hughes, Inc........................................... 2,000 60,750
-----------
ENERGY SOURCES--0.5%
Belco Oil & Gas Corp.+...................................... 1,000 26,750
Benton Oil & Gas Co.+....................................... 5,000 108,750
-----------
135,500
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
FINANCIAL SERVICES--0.7%
Associates First Capital Corp., Class A..................... 2,000 $ 82,000
Morgan Stanley Group, Inc................................... 2,000 99,500
-----------
181,500
-----------
FOOD, BEVERAGE & TOBACCO--0.5%
Consolidated Cigar Holdings, Inc. Class A+.................. 1,000 30,625
Philip Morris Cos., Inc..................................... 1,000 89,750
-----------
120,375
-----------
HEALTH SERVICES--0.2%
Paracelsus Healthcare Corp.+................................ 5,000 50,625
Urocor, Inc................................................. 1,000 12,625
-----------
63,250
-----------
HOUSEHOLD PRODUCTS--1.1%
Eastman Kodak Co............................................ 1,050 82,425
Warner-Lambert Co........................................... 3,000 198,000
-----------
280,425
-----------
INSURANCE--0.2%
Guarantee Life Cos., Inc.................................... 2,500 49,687
-----------
LEISURE & TOURISM--0.7%
Callaway Golf Co............................................ 2,000 68,250
Red Roof Inn's, Inc.+....................................... 1,000 13,625
Sun International Hotels Ltd.+.............................. 2,000 102,500
-----------
184,375
-----------
MACHINERY--0.3%
Allied Products Corp........................................ 3,000 75,000
-----------
MANUFACTURING--0.1%
Strategic Distribution, Inc................................. 5,000 25,313
-----------
MEDICAL PRODUCTS--1.3%
Johnson & Johnson Co........................................ 4,000 205,000
Medtronic, Inc.............................................. 2,000 128,250
-----------
333,250
-----------
PHARMACEUTICALS--3.2%
Allergan, Inc............................................... 3,000 114,375
Lilly (Eli) & Co............................................ 2,000 129,000
Merck & Co., Inc............................................ 2,000 140,750
Neurex Corp.+............................................... 5,000 95,625
Pfizer, Inc................................................. 1,200 94,950
Pharmaceutical Product Development, Inc.+................... 2,500 67,500
Schering-Plough Corp........................................ 3,200 196,800
-----------
839,000
-----------
</TABLE>
20
<PAGE>
SUNAMERICA GLOBAL BALANCED FUND
INVESTMENT PORTFOLIO -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
DOMESTIC EQUITY (CONTINUED)
POLLUTION CONTROL--0.2%
Allied Waste Industries, Inc.+.......... 5,000 $ 46,250
-----------
SOFTWARE--1.0%
Documentum, Inc.+....................... 2,000 63,500
Engineering Animation, Inc.+............ 1,000 24,000
Forte Software, Inc.+................... 500 19,625
Metromail Corp.+........................ 5,300 114,612
Sterling Commerce, Inc.+................ 1,000 29,500
-----------
251,237
-----------
SPECIALTY RETAIL--0.3%
Loehmanns, Inc.+........................ 2,500 67,031
-----------
TELECOMMUNICATIONS--0.0%
American Portable Telecom, Inc.+........ 700 7,088
-----------
TOTAL DOMESTIC EQUITY
(COST $3,388,580)......................... 4,474,706
-----------
FOREIGN EQUITY--48.0%
APPAREL & TEXTILES--0.5%
Adidas AG (Germany)..................... 1,450 131,904
Gerry Weber International AG+ (Germany). 130 5,194
-----------
137,098
-----------
AUTOMOTIVE--4.0%
Bridgestone Corp. (Japan)............... 10,000 180,107
Continental AG+ (Germany)............... 7,000 127,952
Honda Motor Co., Ltd. (Japan)........... 12,000 301,075
Mitsubishi Heavy Industrial Ltd.
(Japan)................................ 20,000 162,545
Nokian Tyres (Finland).................. 5,000 85,317
PT Selamat Sempurna alien+ (Indonesia).. 50,000 38,205
Toyota Motor Corp. (Japan).............. 6,000 153,226
-----------
1,048,427
-----------
BANKS--5.8%
Banca Pop Di Milano+ (Italy)............ 15,000 79,271
Banco Credito del Peru (Peru)........... 18,386 27,689
Banco Intercontinental Espanol+ (Spain). 700 80,635
Banco Santander-Chile ADR Series A (1)
(Chile)................................ 800 10,700
Banco Totta & Acores+ (Portugal)........ 2,500 43,688
Bangkok Bank PLC alien (Thailand)....... 1,900 24,804
Bank Of Tokyo-Mitsubishi (Japan)........ 12,600 274,355
CS Holding+ (Switzerland)............... 1,020 100,765
Development Bank of Singapore alien
(Singapore)............................ 3,000 36,856
HSBC Holdings PLC (Hong Kong)........... 6,000 111,341
Industrial Bank of Japan Ltd. (Japan)... 8,000 178,495
Krung Thai Bank PCL alien+ (Thailand)... 7,800 33,738
National Westminster Bank PLC
(United Kingdom)....................... 8,000 85,021
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
BANKS (CONTINUED)
Siam Commercial Bank Co., Ltd. alien (Thailand)............ 3,700 $ 44,811
Societe Generale (France).................................. 1,000 110,541
Toronto-Dominion Bank (Canada)............................. 2,500 50,749
Toyo Trust & Banking (Japan)............................... 25,000 228,495
-----------
1,521,954
-----------
BROADCASTING & MEDIA--0.1%
Singapore Press Holdings Ltd. alien (Singapore)............ 1,000 18,250
-----------
CHEMICALS--1.5%
Laporte PLC (United Kingdom)............................... 10,000 116,059
Sekisui Chemical Co., Ltd. (Japan)......................... 15,000 177,419
Toagosei Co., Ltd.+ (Japan)................................ 20,000 93,369
-----------
386,847
-----------
COMMUNICATION EQUIPMENT--0.7%
Ericsson (L.M.) Telephone Co., Class B ADR(1) (Sweden)..... 4,000 101,500
Nokia Corp. ADR(1)+ (Finland).............................. 2,000 88,500
-----------
190,000
-----------
COMPUTERS & BUSINESS EQUIPMENT-- 1.9%
Ricoh Co. (Japan).......................................... 15,000 153,226
Strafor Facom SA (France).................................. 1,200 95,224
Tokyo Electron Ltd. (Japan)................................ 5,000 144,713
Videologic Group PLC+ (United Kingdom)..................... 100,000 93,912
-----------
487,075
-----------
CONGLOMERATE--1.9%
Alusuisse-Lonza Holdings AG+ (Switzerland)................. 100 74,968
BTR PLC (United Kingdom)................................... 30,000 127,015
Eaux (cie Generale) (France)............................... 1,000 108,605
Lyonnaise des Eaux SA (France)............................. 500 44,720
Nissho Iwai Corp. (Japan).................................. 30,000 137,366
-----------
492,674
-----------
CONSTRUCTION & HOUSING--4.2%
Cheung Kong Infrastructure
(Hong Kong)............................................... 40,000 65,951
Glynwed International PLC
(United Kingdom).......................................... 25,000 144,193
Henry Walker Group Ltd. (Australia)........................ 46,492 93,852
Kajima Corp. (Japan)....................................... 20,000 184,588
Konecranes International Corp.+ (Finland).................. 9,000 250,044
Metacorp Bhd (Malaysia).................................... 29,000 83,307
Nishimatsu Construction (Japan)............................ 20,000 193,548
Pioneer International Ltd. (Australia)..................... 30,000 81,935
-----------
1,097,418
-----------
</TABLE>
21
<PAGE>
SUNAMERICA GLOBAL BALANCED FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
FOREIGN EQUITY (CONTINUED)
CONSTRUCTION MATERIALS--2.3%
Cemex SA, Class B+ (Mexico)................................ 6,000 $ 24,550
Grafton Group PLC (Ireland)................................ 10,000 109,079
Lion Land Bhd (Malaysia)................................... 64,000 68,688
Marley PLC (United Kingdom)................................ 60,000 122,554
Nippon Electric Glass Co., Ltd. (Japan).................... 5,000 81,541
PT Semen Gresik+ (Indonesia)............................... 4,000 11,881
Schneider SA (France)...................................... 4,000 188,172
-----------
606,465
-----------
ELECTRONICS--5.4%
Advantest Corp. (Japan).................................... 4,400 179,785
Canon, Inc. (Japan)........................................ 10,000 196,237
Electric & Eltek International Co., Ltd. (Singapore)....... 40,000 113,200
Fanuc Ltd. (Japan)......................................... 2,500 91,846
Hoganas AG (Sweden)........................................ 6,000 186,518
NEC Corp. (Japan).......................................... 15,000 176,075
Pressac Holdings PLC
(United Kingdom).......................................... 30,000 92,503
Rohm Co. (Japan)........................................... 3,000 188,978
Samsung Electronics Co., Ltd. GDR*(2) (Korea).............. 57 2,850
Samsung Electronics Co., Ltd. GDR*(2) (Korea).............. 391 9,677
Ushio, Inc. (Japan)........................................ 15,000 170,699
-----------
1,408,368
-----------
ENERGY SERVICES--0.5%
Suncor, Inc.+ (Canada)..................................... 900 23,952
Total SA, Series B (France)................................ 1,500 118,043
-----------
141,995
-----------
ENERGY SOURCES--0.2%
Crestar Energy, Inc.+ (Canada)............................. 600 11,563
Renaissance Energy Ltd.+ (Canada).......................... 600 17,598
Shell Canada Ltd. Class A (Canada)......................... 140 4,507
TransCanada Pipelines Ltd. (Canada)........................ 1,400 22,458
-----------
56,126
-----------
ENTERTAINMENT PRODUCTS--0.7%
Bluebird Toys PLC (United Kingdom)......................... 30,000 65,236
RBI Holdings Ltd. (Bermuda)................................ 800,000 104,487
-----------
169,723
-----------
FINANCIAL SERVICES--1.1%
Hutchison Whampoa Ltd. alien
(Hong Kong)............................................... 9,000 60,520
National Finance & Securities Co., Ltd. (Thailand)......... 10,000 34,210
Nomura Securities International, Inc. (Japan).............. 10,000 183,692
-----------
278,422
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
FOOD, BEVERAGE & TOBACCO--1.7%
Allied Domecq PLC
(United Kingdom)....... 10,000 $ 70,277
Heineken NV
(Netherlands).......... 500 91,230
Katokichi Co.+ (Japan).. 7,000 151,165
Seagram Ltd. (Canada)... 320 11,923
Vaux Group PLC (United
Kingdom)............... 30,000 122,554
---------
447,149
---------
FOREST PRODUCTS--1.0%
Fletcher Challenge Ltd.
Class A (Canada)....... 1,000 13,509
Maderas Y Sinteticos SA
ADR(1) (Chile)......... 1,900 26,838
New Oji Paper Co., Ltd.
(Japan)................ 15,000 113,575
Waddington (John) PLC
(United Kingdom)....... 25,000 101,737
West Fraser Timber Co.,
Ltd. (Canada).......... 400 10,278
---------
265,937
---------
INSURANCE--1.8%
Corporacion Mapfre SA+
(Spain)................ 1,600 77,833
Legal & General Group
PLC
(United Kingdom)....... 10,000 126,076
Riunione Adriatica de
Sicur+ (Italy)......... 8,800 86,801
Tokio Marine & Fire
Insurance Co., Ltd.
(Japan)................ 15,000 177,420
---------
468,130
---------
LEISURE & TOURISM--1.1%
Air Canada, Inc.+
(Canada)............... 1,800 6,475
Airtours PLC (United
Kingdom)............... 10,000 94,303
Manchester United PLC
(United Kingdom)....... 15,000 106,824
Stanley Leisure PLC
(United Kingdom)....... 20,000 74,190
---------
281,792
---------
MACHINERY--0.3%
Seino Transportation+
(Japan)................ 6,000 85,484
---------
MANUFACTURING--0.5%
Bombardier, Inc. Class B
(Canada)............... 1,100 15,667
Graystone (United
Kingdom)............... 500,000 107,607
Hanjaya Mandala
Sampoerna alien+
(Indonesia)............ 1,750 17,025
---------
140,299
---------
METALS & MINING--3.0%
Barrick Gold Corp.
(Canada)............... 690 17,249
Cameco Corp. (Canada)... 300 14,768
Clutha Ltd.+(4)
(Australia)............ 120,000 950
Cominco Ltd. (Canada)... 240 4,934
CRA Ltd. (Australia).... 5,375 80,846
Diamond Fields
International Ltd.+(4)
(Canada)............... 400 279
</TABLE>
22
<PAGE>
SUNAMERICA GLOBAL BALANCED FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
FOREIGN EQUITY (CONTINUED)
METALS & MINING (CONTINUED)
Inco Ltd. (Canada)................................ 322 $ 9,881
Inco Ltd., Class V (Canada)....................... 1,000 30,688
M.I.M. Holdings Ltd. (Australia).................. 50,000 60,956
Nippon Steel Corp. (Japan)........................ 40,000 124,014
SMH AG (Switzerland).............................. 100 67,240
Sumitomo Metal Mining Co., Ltd.
(Japan).......................................... 20,000 168,638
Western Mining Corp. Holdings Ltd. ADS+(3)
(Australia)...................................... 30,000 193,081
--------
773,524
--------
PHARMACEUTICALS--2.1%
Astra AB Series A+ (Sweden)....................... 1,600 67,605
Genset SP ADR+(1) (Finland)....................... 1,000 17,250
Glaxo Holdings PLC ADR(1)
(United Kingdom)................................. 1,000 31,125
Glaxo Wellcome PLC
(United Kingdom)................................. 5,000 78,377
Kissei Pharmaceutical Co. (Japan)................. 4,400 114,337
Roche Holdings AG+ (Switzerland).................. 14 103,004
Sankyo Co., Ltd. (Japan).......................... 5,000 127,688
--------
539,386
--------
REAL ESTATE COMPANIES--0.7%
Cheung Kong Holdings Ltd.
(Hong Kong)...................................... 8,000 61,554
FIL-Estate Land, Inc.+ (Philippines).............. 48,300 44,646
Sun Hung Kai Properties Ltd.
(Hong Kong)...................................... 8,000 85,090
--------
191,290
--------
SOFTWARE--0.6%
Getronics NV (Netherlands)........................ 6,388 161,873
--------
SPECIALTY RETAIL--1.1%
Aoki International Co., Ltd. (Japan).............. 5,000 96,774
Koninklijke Ahold NV (Netherlands)................ 3,600 203,679
--------
300,453
--------
TELECOMMUNICATIONS--2.2%
BCE, Inc. (Canada)................................ 800 34,212
Cable & Wireless PLC
(United Kingdom)................................. 10,000 70,199
Korea Mobile Telecommunications ADR+(1) (Korea)... 5,010 75,776
Nippon Telegraph & Telecommunications Corp.
(Japan).......................................... 12 88,172
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
TELECOMMUNICATIONS (CONTINUED)
Northern Telecom Ltd (Canada)............... 300 $ 17,289
P.T. Indonesian Satellite Corp. ADR+(1)
(Indonesia)................................ 1,000 33,000
STET non-convertible+ (Italy)............... 30,000 81,142
Telecomunic Brasileiras SA+ (Brazil)........ 1,000,000 65,028
Telus Corp. (Canada)........................ 1,140 15,693
Vodafone Group PLC ADR(1)
(United Kingdom)........................... 2,500 85,313
-----------
565,824
-----------
TELEPHONE--0.1%
Telefonos de Mexico SA ADR+(1) (Mexico)..... 750 24,094
-----------
UTILITIES--1.0%
Cogeneration PLC alien+ (Thailand).......... 15,000 46,596
CPT Telefonica de Peru+ (Peru).............. 9,000 20,331
Electricity Generating PLC alien+
(Thailand)................................. 10,000 31,458
Veba AG (Germany)........................... 3,300 172,683
-----------
271,068
-----------
TOTAL FOREIGN EQUITY
(COST $11,972,003).......................... 12,557,145
-----------
TOTAL COMMON STOCK
(COST $15,360,583).......................... 17,031,851
-----------
PREFERRED STOCK--1.5%
APPAREL & TEXTILES--0.4%
Gerry Weber International AG non-voting
(Germany).................................. 2,730 109,064
-----------
ENERGY SOURCES--0.2%
Cemig Cia Energy MG (Brazil)................ 1,650,000 49,285
-----------
HOUSEHOLD PRODUCTS--0.4%
Friedrich Grohe AG non-voting (Germany)..... 400 109,896
-----------
METALS & MINING--0.0%
Inco Ltd. Series E (Canada)................. 36 1,845
-----------
SPECIALTY RETAIL--0.5%
Hornbach Holding AG non-voting (Germany).... 1,600 115,266
-----------
TOTAL PREFERRED STOCK
(COST $398,100)............................. 385,356
-----------
RIGHTS--0.1%+
BANKS--0.0%
Industrial Bank of Japan Ltd.(4) (Japan).... 640 7,398
-----------
CHEMICALS--0.1%
Tessenderlo Chemie (Belgium)................ 290 10,238
-----------
TOTAL RIGHTS
(COST $10,385).............................. 17,636
-----------
</TABLE>
23
<PAGE>
SUNAMERICA GLOBAL BALANCED FUND
INVESTMENT PORTFOLIO--SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL AMOUNT
(DENOMINATED IN
LOCAL CURRENCY) VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
WARRANTS--0.6%+
BANKS--0.6%
Affin Holdings Bhd (11/99)....................... 112,000 $ 100,989
Credit Lyonnais (4/97)........................... 1,000,000 62,072
-----------
TOTAL WARRANTS
(COST $148,517).................................. 163,061
-----------
FOREIGN BONDS--14.2%
Commonwealth of Australia
7.50% due 7/15/05................................ 100 78,079
Federal Republic of Germany
5.88% due 5/15/00................................ 300 204,905
6.75% due 7/15/04................................ 300 206,988
7.13% due 12/20/02............................... 300 212,686
7.38% due 1/03/05................................ 500 356,638
Government of Canada
7.50% due 9/01/00 Series A81..................... 200 154,247
Government of France
7.00% due 11/12/99............................... 700 145,177
Government of Spain
10.00% due 2/28/05............................... 10,000 87,944
Japan Development Bank
6.50% due 9/20/01................................ 20,000 216,622
Kingdom of Belgium
6.50% due 3/31/05................................ 4,000 130,916
Kingdom of Denmark
9.00% due 11/15/00............................... 1,000 192,705
Kingdom of Sweden
10.25% due 5/05/03............................... 1,500 263,208
13.00% due 6/15/01............................... 1,500 282,520
Republic of Ireland
8.00% due 10/18/00............................... 100 170,115
Republic of Italy
10.50% due 11/01/00.............................. 400,000 285,075
Treuhandanstalt (Germany)
6.13% due 6/25/98................................ 100 68,236
United Kingdom Treasury
8.50% due 12/07/05............................... 300 497,143
9.00% due 3/03/00................................ 100 166,742
-----------
TOTAL FOREIGN BONDS
(cost $3,658,883)................................ 3,719,946
-----------
U.S. TREASURY NOTES--6.5%
5.25% due 1/31/01................................ $ 100 95,812
6.13% due 9/30/00................................ 150 148,453
6.38% due 3/31/01................................ 200 199,468
6.50% due 8/15/05................................ 500 493,595
7.88% due 11/15/04............................... 700 752,284
-----------
TOTAL U.S. TREASURY NOTES
(COST $1,663,983)................................ 1,689,612
-----------
TOTAL INVESTMENT SECURITIES--88.0%
(COST $21,240,451)............................... 23,007,462
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
SHORT-TERM SECURITIES--5.0%
Cayman Island Time Deposit 4.50% due 10/01/96
(cost $1,302,000)................................ $1,302 $ 1,302,000
-----------
REPURCHASE AGREEMENT--4.4%
Joint Repurchase Agreement Account (Note 3)
(cost $1,160,000)................................ 1,160 1,160,000
-----------
TOTAL INVESTMENTS--
(COST $23,702,451)................................ 97.4% 25,469,462
Other assets less liabilities...................... 2.6 677,530
------ -----------
NET ASSETS-- 100.0% $26,146,992
====== ===========
</TABLE>
- -------
+ Non-income producing security
* Resale restricted to qualified institutional buyers
(1) ADR ("American Depositary Receipt")
(2) GDR ("Global Depositary Receipt")
(3) ADS ("American Depositary Shares")
(4) Fair valued security, see Note 2
Allocation of net assets by
currency as of September 30,
1996:
U.S. Dollar 35.3%
Japanese Yen 20.3
British Pound 9.4
Deutsche Mark 7.0
French Franc 3.1
Swedish Krona 3.1
Australian
Dollar 2.3
Hong Kong
Dollar 2.1
Italian Lira 2.0
Canadian
Dollar 1.9
Netherland
Guilder 1.7
Swiss Franc 1.3
Finnish
Markka 1.3
Irish Punt 1.1
Malaysian
Ringgit 1.1
Spanish
Peseta 0.9
Thailand Baht 0.8
Danish Kroner 0.7
Belgian Franc 0.5
Brazilian
Real 0.4
Indonesian
Rupiah 0.3
Singapore
Dollar 0.2
Peruvian New
Sol 0.2
Philippines
Peso 0.2
Portuguese
Escudo 0.2
---
97.4%
====
See Notes to Financial Statements
24
<PAGE>
SUNAMERICA GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--86.5%
AEROSPACE & MILITARY TECHNOLOGY--1.0%
Boeing Co. ............................................... 2,500 $ 236,250
Raytheon Co. ............................................. 2,000 111,250
-----------
347,500
-----------
APPAREL & TEXTILES--0.9%
Guess, Inc.+.............................................. 10,000 133,750
Warnaco Group, Inc. Class A.............................. 7,000 166,250
-----------
300,000
-----------
AUTOMOTIVE--1.1%
Ford Motor Co. ........................................... 7,000 218,750
Harley-Davidson, Inc. .................................... 4,000 172,000
-----------
390,750
-----------
BANKS--2.3%
Chase Manhattan Corp. .................................... 3,000 240,375
First Union Corp. ........................................ 5,000 333,750
Mellon Bank Corp. ........................................ 4,000 237,000
-----------
811,125
-----------
BROADCASTING & MEDIA--0.2%
Comcast Corp.+............................................ 5,000 76,875
-----------
BUSINESS SERVICES--1.4%
Ecolab, Inc. ............................................. 7,000 236,250
Service Corp. International............................... 8,000 242,000
-----------
478,250
-----------
CHEMICALS--7.4%
Cabot Corp. .............................................. 9,000 250,875
du Pont (E.I.) de Nemours & Co. .......................... 3,000 264,750
Hanna (M.A). Co. ......................................... 17,000 388,875
Hercules, Inc. ........................................... 11,000 602,250
Intertape Polymer Group, Inc. ............................ 8,500 190,187
Nalco Chemical Co. ....................................... 4,000 145,000
Olin Corp. ............................................... 3,500 294,000
Waters Corp.+............................................. 14,000 458,500
-----------
2,594,437
-----------
COMMUNICATION EQUIPMENT--1.9%
Motorola, Inc. ........................................... 2,500 129,063
Nokia Corp. ADR(1)........................................ 7,000 309,750
Tellabs, Inc.+............................................ 2,000 141,250
U.S. Robotics Corp.+...................................... 1,000 64,625
-----------
644,688
-----------
COMPUTERS & BUSINESS EQUIPMENT--2.8%
American Pad & Paper Co.+................................. 12,000 255,000
Cisco Systems, Inc.+...................................... 4,500 279,281
Honeywell, Inc. .......................................... 4,000 252,500
Micron Technology, Inc. .................................. 6,000 183,000
-----------
969,781
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
CONGLOMERATE--4.7%
AlliedSignal, Inc. ......................................... 4,500 $ 296,437
General Electric Co. ....................................... 7,000 637,000
ITT Industries, Inc. ....................................... 15,000 361,875
United Technologies Corp. .................................. 3,000 360,375
-----------
1,655,687
-----------
CONSTRUCTION & HOUSING--2.2%
Armstrong World Industries, Inc. ........................... 4,000 249,500
Potash Corp. of Saskatchewan, Inc. ......................... 7,000 511,875
-----------
761,375
-----------
CONSTRUCTION MATERIALS--1.6%
Dal-Tile International, Inc.+............................... 33,000 540,375
-----------
CONSUMER GOODS--0.6%
Whitman Corp. .............................................. 9,000 208,125
-----------
DEPARTMENT STORES--1.7%
Federated Department Stores, Inc.+.......................... 8,500 284,750
Penney (J.C.), Inc. ........................................ 1,000 54,125
Wal-Mart Stores, Inc. ...................................... 10,000 263,750
-----------
602,625
-----------
ELECTRICAL EQUIPMENT--0.6%
Cooper Industries, Inc. .................................... 5,000 216,250
-----------
ELECTRONICS--1.7%
Emerson Electric Co. ....................................... 2,000 180,250
Intel Corp. ................................................ 3,000 286,312
Texas Instruments, Inc. .................................... 2,500 137,813
-----------
604,375
-----------
ENERGY SERVICES--2.8%
Amoco Corp. ................................................ 2,000 141,000
Chevron Corp. .............................................. 2,500 156,563
Mobil Corp. ................................................ 4,000 463,000
Transocean Offshore, Inc. .................................. 3,500 214,375
-----------
974,938
-----------
ENERGY SOURCES--3.1%
Benton Oil & Gas Co.+....................................... 5,000 108,750
Burlington Resources, Inc. ................................. 2,000 88,750
Enron Corp. ................................................ 4,000 163,000
Noble Affiliates, Inc. ..................................... 2,000 84,500
Panhandle Eastern Corp. .................................... 12,000 415,500
Parker & Parsley Petroleum Co. ............................. 5,000 130,625
Union Texas Petroleum Holdings, Inc. ....................... 5,000 108,125
-----------
1,099,250
-----------
ENTERTAINMENT PRODUCTS--1.3%
Mattel, Inc. ............................................... 11,000 284,625
Toy Biz, Inc. Class A+...................................... 10,000 177,500
-----------
462,125
-----------
</TABLE>
25
<PAGE>
SUNAMERICA GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
FINANCIAL SERVICES--3.6%
Advanta Corp.+.............................................. 7,500 $ 345,000
Associates First Capital Corp., Class A..................... 10,500 430,500
Federal National Mortgage Association....................... 13,500 470,812
-----------
1,246,312
-----------
FOOD, BEVERAGE & TOBACCO--5.6%
Dole Food, Inc. ............................................ 18,000 756,000
Heinz (H.J.) Co. ........................................... 6,000 202,500
PepsiCo, Inc. .............................................. 5,000 141,250
Philip Morris Cos., Inc. ................................... 8,000 718,000
Seagram Co., Ltd. .......................................... 4,000 149,500
-----------
1,967,250
-----------
FOREST PRODUCTS--2.8%
Boise Cascade Corp. ........................................ 5,000 170,000
Fort Howard Corp.+.......................................... 11,000 268,125
Kimberly-Clark Corp. ....................................... 5,500 484,688
Willamette Industries, Inc. ................................ 1,000 65,500
-----------
988,313
-----------
HEALTH SERVICES--4.4%
Apria Healthcare Group, Inc.+............................... 15,000 281,250
Columbia/HCA Healthcare Corp. .............................. 9,000 511,875
OrNda Healthcorp+........................................... 16,000 438,000
Paracelsus Healthcare Corp.+................................ 28,000 283,500
Physician Corp. of America+................................. 3,000 36,375
-----------
1,551,000
-----------
HOUSEHOLD PRODUCTS--2.7%
Corning, Inc. .............................................. 10,500 409,500
Eastman Kodak Co. .......................................... 2,000 157,000
Procter & Gamble Co. ....................................... 4,000 390,000
-----------
956,500
-----------
INSURANCE--1.3%
Aetna, Inc. ................................................ 2,000 140,750
ITT Corp+................................................... 2,000 87,250
UICI+....................................................... 8,000 208,000
-----------
436,000
-----------
LEISURE & TOURISM--1.8%
Carnival Corp. Class A...................................... 11,000 341,000
Red Roof Inn's, Inc.+....................................... 12,000 163,500
Sun International Hotels Ltd.+.............................. 2,500 128,125
-----------
632,625
-----------
MACHINERY--0.4%
Case Corp. ................................................. 3,000 146,250
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
<S> <C> <C>
MEDICAL PRODUCTS--4.0%
Baxter International, Inc. ................................. 20,000 $ 935,000
CNS, Inc.+.................................................. 16,000 284,000
Sola International, Inc.+................................... 5,000 186,250
-----------
1,405,250
-----------
METALS & MINING--3.4%
Aluminum Co. of America..................................... 1,000 59,000
Crown, Cork & Seal, Inc. ................................... 18,000 830,250
Santa Fe Pacific Gold Corp. ................................ 10,000 125,000
Wolverine Tube, Inc.+....................................... 4,000 172,000
-----------
1,186,250
-----------
PHARMACEUTICALS--4.0%
Bristol-Myers Squibb Co. ................................... 3,000 289,125
Chiron Corp.+............................................... 14,000 266,000
Lilly (Eli) & Co. .......................................... 2,000 129,000
Merck & Co., Inc. .......................................... 8,000 563,000
Teva Pharmaceutical Industries
Ltd. ADR(1)................................................ 3,000 139,125
-----------
1,386,250
-----------
REAL ESTATE INVESTMENT TRUSTS--2.4%
Crescent Real Estate Equities............................... 10,000 411,250
Patriot American Hospitality, Inc........................... 4,000 134,500
Reckson Associates Realty Corp. ............................ 8,000 297,000
-----------
842,750
-----------
SOFTWARE--4.6%
Fiserv, Inc.+............................................... 7,000 267,750
Metromail Corp.+............................................ 7,000 151,375
Microsoft Corp.+............................................ 4,000 527,500
Oracle Systems Corp.+....................................... 3,000 127,687
Reynolds & Reynolds Co. Class A............................. 15,000 391,875
Sterling Software, Inc.+.................................... 2,000 152,750
-----------
1,618,937
-----------
SPECIALTY RETAIL--0.6%
Mail Boxes Etc.+............................................ 5,000 113,125
Zale Corp.+................................................. 5,000 109,375
-----------
222,500
-----------
TELECOMMUNICATIONS--1.9%
AT&T Corp. ................................................. 4,000 209,000
Frontier Corp. ............................................. 4,000 106,500
Lucent Technologies, Inc. .................................. 5,000 229,375
NYNEX Corp. ................................................ 3,000 130,500
-----------
675,375
-----------
</TABLE>
26
<PAGE>
SUNAMERICA GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
- ---------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
TELEPHONE--1.5%
Ameritech Corp. ................................... 3,000 $ 157,875
Bell Atlantic Corp. ............................... 1,500 89,813
GTE Corp. ......................................... 7,000 269,500
-----------
517,188
-----------
TRANSPORTATION--0.5%
Canadian National Railway Co. ..................... 8,000 164,000
-----------
UTILITIES--1.7%
Baltimore Gas & Electric Co. ...................... 5,000 130,625
GPU, Inc. ......................................... 5,000 153,750
MAPCO, Inc. ....................................... 5,000 298,125
-----------
582,500
-----------
TOTAL COMMON STOCK
(cost $28,466,914)................................. 30,263,781
-----------
BONDS & NOTES--0.1%
FOREST PRODUCTS--0.1%
Stone Container Corp.
11.88% due 12/01/98
(cost $50,904).................................... $ 50 52,875
-----------
TOTAL INVESTMENT SECURITIES--86.6%
(cost $28,517,818)................................. 30,316,656
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) (NOTE 2)
<S> <C> <C>
REPURCHASE AGREEMENT--12.5%
Joint Repurchase Agreement
Account (Note 3)
(cost $4,353,000)................................ $4,353 $ 4,353,000
-----------
TOTAL INVESTMENTS--
(cost $32,870,818)............................... 99.1% 34,669,656
Other assets less liabilities..................... 0.9 332,365
------ -----------
NET ASSETS-- 100.0% $35,002,021
====== ===========
</TABLE>
- --------
+ Non-income producing security
(1) ADR ("American Depositary Receipt")
See Notes to Financial Statements
27
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996
Note 1. Organization
SunAmerica Equity Funds is an open-end diversified management investment
company organized as a Massachusetts business trust (the "Trust" or "Equity
Funds") on June 16, 1986. It currently consists of six different investment
funds (each, a "Fund" and collectively, the "Funds"). Each Fund is a
separate series of the Trust with a distinct investment objective and/or
strategy. Each Fund is advised and/or managed by SunAmerica Asset
Management Corp. (the "Adviser" or "SAAMCo"). An investor may invest in one
or more of the following Funds: SunAmerica Balanced Assets Fund ("Balanced
Assets Fund"), SunAmerica Blue Chip Growth Fund ("Blue Chip Growth Fund"),
SunAmerica Mid-Cap Growth Fund ("Mid-Cap Growth Fund"), SunAmerica Small
Company Growth Fund ("Small Company Growth Fund"), SunAmerica Global
Balanced Fund ("Global Balanced Fund") and SunAmerica Growth and Income
Fund ("Growth and Income Fund"). The Funds are considered to be separate
entities for financial and tax reporting purposes. The investment objective
for each of the Funds is as follows:
Balanced Assets seeks to conserve principal by maintaining at all times a
balanced portfolio of stocks and bonds.
Blue Chip Growth seeks capital appreciation by investing primarily in
equity securities of companies with large market capitalizations.
Mid-Cap Growth seeks capital appreciation by investing primarily in equity
securities of medium-sized companies.
Small Company Growth seeks capital appreciation by investing primarily in
equity securities of small capitalization growth companies.
Global Balanced seeks capital appreciation while conserving principal by
maintaining at all times a balanced portfolio of domestic and foreign
stocks and bonds.
Growth and Income seeks capital appreciation and current income by
investing primarily in common stocks.
Each Fund currently offers two classes of shares. Class A shares are
offered at net asset value per share plus an initial sales charge. Class B
shares are offered without an initial sales charge, although a declining
contingent sales charge may be imposed on redemptions made within six years
of purchase. Additionally, any purchases of Class A shares in excess of
$1,000,000 will be subject to a contingent deferred sales charge on
redemptions made within one year of purchase. Class B shares of each Fund
will convert automatically to Class A shares on the first business day of
the month after seven years from the issuance of such Class B shares and at
such time will be subject to the lower distribution fee applicable to Class
A shares. Each class of shares bears the same voting, dividend, liquidation
and other rights and conditions and each makes 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 "1940 Act"),
except that Class B shares are subject to higher distribution fee rates.
Note 2. Significant Accounting Policies
The following is a summary of the significant accounting policies followed
by the Funds in the preparation of their financial statements:
SECURITY VALUATIONS: Securities that are actively traded in the over-the-
counter market, including listed securities for which the primary market is
believed by the Adviser to be over-the-counter, are
28
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
valued at the quoted bid price provided by principal market makers.
Securities listed on the New York Stock Exchange ("NYSE") or other national
securities exchanges, are valued on the basis of the last sale price on the
exchange on which they are primarily traded. If there is no sale on that
day, then securities are valued at the closing bid price on the NYSE or
other primary exchange for that day. However, if the last sale price on the
NYSE is different than the last sale price on any other exchange, the NYSE
price is used. Securities that are traded on foreign exchanges are
ordinarily valued at the last quoted sales price available before the time
when the assets are valued. If a security's price is available from more
than one foreign exchange, a Fund uses the exchange that is the primary
market for the security. Values of portfolio securities primarily traded on
foreign exchanges are already translated into U.S. dollars when received
from a quotation service. Options traded on national securities exchanges
are valued as of the close of the exchange on which they are traded.
Futures and options traded on commodities exchanges are valued at their
last sale price as of the close of such exchange. The Funds may make use of
a pricing service in the determination of their net asset values.
Securities for which market quotations are not readily available and other
assets are valued at fair value as determined pursuant to procedures
adopted in good faith by the Trustees. Short-term investments which mature
in less than 60 days are valued at amortized cost, if their original
maturity was 60 days or less, or by amortizing their value on the 61st day
prior to maturity, if their original term to maturity exceeded 60 days.
REPURCHASE AGREEMENTS: The Funds, along with other affiliated registered
investment companies, 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 Funds' custodian takes possession of the collateral
pledged for investments in repurchase agreements. The underlying collateral
is valued daily on a mark to market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In
the event of default of the obligation to repurchase, a 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.
OPTIONS: The premium paid by a Fund for the purchase of a call or a put
option is included in the Fund's Statement of Assets and Liabilities as an
investment and subsequently marked to market to reflect the current market
value of the option. When a Fund writes a call or a put option, an amount
equal to the premium received by the Fund is included in the Fund's
Statement of Assets and Liabilities as a liability and is subsequently
marked to market to reflect the current market value of the option written.
If an option which the Fund has written either expires on its stipulated
expiration date, or if the Fund enters into a closing purchase transaction,
the Fund realizes a gain (or loss if the cost of a closing purchase
transaction exceeds the premium received when the option was written)
without regard to any unrealized gain or loss on the underlying security,
and the liability related to such option is extinguished. If a call option
which the Fund has written is exercised, the Fund realizes a capital gain
or loss from the sale of the underlying security and the proceeds from such
sale are increased by the premium originally received. If a put option
which the Fund has written is exercised, the amount of the premium
originally received reduces the cost basis of the security which the Fund
purchased upon exercise of the option.
29
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
SECURITIES TRANSACTIONS, INVESTMENT INCOME, DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS: Securities transactions are recorded on the first business
day following the trade date. Realized gains and losses on sales of
investments are calculated on the identified cost basis. Interest income is
recorded on the accrual basis; dividend income is recorded on the ex-
dividend date. Funds investing in foreign securities may be subject to
taxes imposed by countries in which it invests. Such taxes are generally
based on either income or gains earned or repatriated. The Fund accrues
such taxes when the related income is earned. The Equity Funds, except for
the Global Balanced Fund and the Growth and Income Fund, do not amortize
premiums or accrue discounts except for original issue discounts and on
interest only securities for which amortization is required for federal
income tax purposes.
Net investment income, other than class specific expenses and realized and
unrealized gains and losses, is allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of the dividend-eligible shares, as appropriate) 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, if any, are paid semiannually, except
for Balanced Assets Fund and Growth and Income Fund, which pay quarterly,
and Global Balanced Fund, which pays annually. Capital gain distributions,
if any, are paid annually.
INVESTMENT SECURITIES LOANED: During the year ended September 30, 1996,
Balanced Assets Fund, Mid-Cap Growth Fund and Small Company Growth Fund
participated in securities lending with qualified brokers. In lending
portfolio securities to brokers the Funds receive cash as collateral
against the loaned securities, which must be maintained at not less than
102% of the market value of the loaned securities during the period of the
loan. To the extent income is earned on the cash collateral invested, it is
recorded as interest income. As with other extensions of credit, should the
borrower of the securities fail financially, the Funds may bear the risk of
delay in recovery or may be subject to replacing the loaned securities by
purchasing them with the cash collateral held, which may be less than 100%
of the market value of such securities at the time of replacement.
FOREIGN CURRENCY TRANSACTION: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into
U.S. dollars at published rates on the following basis:
(i) market value of investment securities, other assets and
liabilities--at the closing rate of exchange.
(ii) purchases and sales of investment securities, income and expenses--
at the rate of exchange prevailing on the respective dates of such
transactions.
Assets and liabilities denominated in foreign currencies and commitments
under forward foreign currency contracts are translated into U.S. dollars
at the mean of the quoted bid and asked prices of such currencies against
the U.S. dollar.
The Fund does not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in
the market prices of securities held at fiscal year-end. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
year.
30
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities include foreign exchange gains and losses from currency
gains or losses between the trade and settlement dates of securities
transactions, the difference between the amounts of interest, dividends and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid and changes in the unrealized
foreign exchange gains and losses relating to other assets and liabilities
arising as a result of changes in the exchange rate.
FEDERAL INCOME TAXES: It is the Funds' policy to meet the requirements of
the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies and to distribute all of their taxable net income to
their shareholders. Therefore, no federal income tax or excise tax
provisions are required.
ORGANIZATIONAL EXPENSES: Costs incurred by SAAMCo in connection with the
organization of Global Balanced Fund and Growth and Income Fund amounted to
$4,347 and $1,383, respectively. These costs are being amortized on a
straight line basis by the Funds over a period not to exceed 60 months from
the date the Funds commenced operations.
EXPENSES: Expenses common to all Funds, not directly related to individual
Funds, are allocated among the Equity Funds based upon their relative net
asset values.
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.
STATEMENT OF POSITION 93-2: As required by Statement of Position 93-2,
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies,
permanent book-tax differences relating to shareholder distributions have
been reclassified in the Statement of Assets and Liabilities. Net
investment income/loss, net realized gain/loss, and net assets are not
affected. The following table discloses the current year reclassifications
between paid in capital, accumulated undistributed net investment
income/loss and accumulated undistributed net realized gain/loss on
investments.
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED
UNDISTRIBUTED UNDISTRIBUTED PAID
NET REALIZED NET INVESTMENT IN
GAIN/LOSS INCOME/LOSS CAPITAL
------------- -------------- -----------
<S> <C> <C> <C>
Balanced Assets Fund............... $ (1,024) $ 1,024 $ --
Blue Chip Growth Fund.............. (408,630) 408,630 --
Mid-Cap Growth Fund................ (399,630) 425,977 (26,347)
Small Company Growth Fund.......... -- 1,857,708 (1,857,708)
Global Balanced Fund............... (704,902) 704,902 --
Growth and Income Fund............. (21,903) 21,903 --
</TABLE>
31
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
Note 3. Joint Repurchase Agreement Account
As of September 30, 1996, Balanced Assets Fund, Blue Chip Growth Fund, Mid-
Cap Growth Fund, Small Company Growth Fund, Global Balanced Fund and Growth
and Income Fund had a 6.4%, 0.9%, 3.1%, 7.4%, 0.9% and 3.3% undivided
interest, respectively, which represented $8,398,000, $1,189,000,
$4,072,000, $9,766,000, $1,160,000 and $4,353,000, respectively, in
principal amount in a joint repurchase agreement with Yamaichi
International, Inc. As of such date, the repurchase agreement in the joint
account and the collateral therefore were as follows:
Yamaichi International, Inc. Repurchase Agreement, 5.65% dated 9/30/96, in
the principal amount of $132,158,000 repurchase price $132,178,741 due
10/01/96 collateralized by $33,325,000 U.S. Treasury Bond 6.25% due
8/15/23, $37,500,000 U.S. Treasury Note 6.875% due 3/31/00, $20,370,000
U.S. Treasury Note 6.125% due 5/15/98, $32,910,000 U.S. Treasury Note 6.00%
due 8/31/97, and $12,410,000 U.S. Treasury Note 5.75% due 9/30/97,
approximate aggregate value $136,584,546.
Note 4. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each 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 a Fund's portfolio and administers its corporate
affairs, subject to general review by the Trustees. In connection
therewith, SAAMCo furnishes the Funds 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 Funds who are employees of
SAAMCo and its affiliates. The investment advisory and management fee to
SAAMCo with respect to each Fund (other than the Global Balanced Fund) is
computed daily and payable monthly, at an annual rate of .75% of a Fund's
average daily net assets up to $350 million, .70% of the next $350 million,
and .65% thereafter. The Global Balanced Fund pays the Adviser a fee,
payable monthly, computed daily at the annual rate of 1.00% on the first
$350 million of the Fund's average daily net assets, .90% on the next $350
million of net assets and .85% on net assets over $700 million. For the
year ended September 30, 1996, SAAMCo earned fees in the amounts stated on
the Statement of Operations, of which SAAMCo agreed to voluntarily waive
$98,765 and $91,558 on the Global Balanced Fund and Growth and Income Fund,
respectively. In addition to the aforementioned, SAAMCo, on behalf of
SunAmerica Global Balanced Fund, entered into Sub-Advisory Agreements with
AIG Asset Management, Inc. ("AIGAM") and Goldman Sachs Asset Management
International ("GSAM") under which AIGAM and GSAM act as sub-advisers. As
of April 23, 1996, GSAM resigned their role as sub-adviser. Pursuant to the
Agreement with the Trust SAAMCo assumed portfolio management
responsibilities for the component previously sub-advised by GSAM.
SAAMCo pays AIGAM a monthly fee with respect to those net assets of the
Global Balanced Fund actually managed by AIGAM computed based on average
daily net assets at the following annual rates: .50% on the first $50
million of such assets, .40% of the next $100 million of such assets, .30%
on the next $150 million of such assets, and .25% of such assets in excess
of $300 million. Also, from the investment advisory fee the Adviser paid
GSAM a monthly fee with respect to those net assets of the Global Balanced
Fund actually managed by GSAM computed based on average daily net assets,
32
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
at the following annual rates: .40% on the first $50 million of such
assets, .30% on the next $100 million of such assets, .25% on the next $100
million of such assets, and .20% of such assets in excess of $250 million.
For the year ended September 30, 1996, SAAMCo paid AIGAM fees of $66,942
and for the period October 1, 1995 through April 23, 1996 paid GSAM fees of
$14,483.
SAAMCo agreed that it would refund or rebate its management fees to each of
the Funds to the extent that the Fund's expenses (including the fees of
SAAMCo and amortization of organizational expenses, but excluding interest,
taxes, brokerage commissions, distribution fees and other extraordinary
expenses) exceed the most restrictive expense limitation imposed by states
where the Fund's shares are sold. The most restrictive expense limitation
was believed to be 2 1/2% of the first $30 million of the Fund's average
daily net assets, 2% of the next $70 million of average net assets and 1
1/2% of such net assets in excess of $100 million.
For the year ended September 30, 1996, SAAMCo has agreed to voluntarily
reimburse expenses of $66 on Mid-Cap Growth Fund Class B, $2,945 on Global
Balanced Fund Class A and, $18,080 and $17,057 on Growth and Income Fund
(Class A, Class B), respectively, related to both class specific and fund
level expenses excluding management fees and distribution and service
maintenance fees which are stated separately in the Notes.
The Trust, on behalf of each Fund, has a Distribution Agreement with
SunAmerica Capital Services, Inc. ("SACS"), an indirect wholly owned
subsidiary of SunAmerica Inc. Each Fund has adopted a Distribution Plan
(the "Plan") in accordance with the provisions of Rule 12b-1 under the 1940
Act. Rule 12b-1 under the Act 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 trustees and approved by its shareholders.
Pursuant to such rule, the Trustees and the shareholders of each class of
shares of each Fund have adopted Distribution Plans hereinafter referred to
as the "Class A Plan" and the "Class B Plan." In adopting the Class A Plan
and the Class B Plan, the Trustees determined that there was a reasonable
likelihood that each such Plan would benefit the Trust and the shareholders
of the respective class. The sales charge and distribution fees of a
particular class will not be used to subsidize the sale of shares of any
other class.
Under the Class A Plan and Class B Plan, the Distributor receives payments
from a Fund at an annual rate of up to 0.10% and 0.75%, respectively, of
average daily net assets of such Fund's Class A and Class B 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 A Plan or Class B Plan may exceed the
Distributor's distribution costs as described above. The Distribution Plans
provide that each class of shares of each Fund may also pay the Distributor
an account maintenance and service fee up to an annual rate of 0.25% of the
aggregate average daily net assets of such class of shares for payments to
broker-dealers for providing continuing account maintenance. Accordingly,
for the year ended September 30, 1996, SACS received fees (see Statement of
Operations) based upon the aforementioned rates, (of which $3,265 was
waived on Growth and Income Fund).
33
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
SACS receives sales charges on each Fund's Class A shares, portions of
which are reallowed to affiliated broker-dealers and non-affiliated broker-
dealers. SACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of each
Fund's Class B shares. SACS has advised the Funds that for the year ended
September 30, 1996 the proceeds received from Class A sales (and paid out
to affiliated and non-affiliated broker-dealers) and Class B redemptions
are as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------------------- -------------------
SALES AFFILIATED NON-AFFILIATED CONTINGENT DEFERRED
CHARGES BROKER-DEALERS BROKER-DEALERS SALES CHARGES
---------- -------------- -------------- -------------------
<S> <C> <C> <C> <C>
Balanced Assets Fund.... $1,139,306 $ 830,997 $132,907 $303,405
Blue Chip Growth Fund... 84,051 48,653 23,355 37,223
Mid-Cap Growth Fund..... 185,300 125,403 31,855 15,696
Small Company Growth
Fund................... 2,007,194 1,156,919 568,659 118,032
Global Balanced Fund.... 96,613 60,930 22,339 45,769
Growth and Income Fund.. 384,542 188,254 140,834 1,820
</TABLE>
The Trust 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 Funds' transfer agent in connection with the
services that it offers to the shareholders of the Funds. The Service
Agreement permits the Funds to reimburse SAFS for costs incurred in
providing such services which is approved annually by the Trustees. For the
year ended September 30, 1996, the Funds incurred the following expenses to
reimburse SAFS pursuant to the terms of the Service Agreement.
<TABLE>
<CAPTION>
PAYABLE AT
SEPTEMBER 30,
EXPENSE 1996
----------------- ---------------
CLASS A CLASS B CLASS A CLASS B
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Balanced Assets Fund...................... $300,743 $368,649 $25,959 $30,429
Blue Chip Growth Fund..................... 103,210 85,923 8,993 6,366
Mid-Cap Growth Fund....................... 86,059 24,058 7,278 2,322
Small Company Growth Fund................. 257,049 179,827 27,269 18,310
Global Balanced Fund...................... 20,216 32,724 1,763 2,849
Growth and Income Fund.................... 16,005 10,853 3,449 2,122
</TABLE>
34
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
Note 5. Purchases and Sales of Investment Securities
The aggregate cost of purchases and proceeds from sales and maturities of
investments (excluding U.S. Government securities and short-term
investments) during the year ended September 30, 1996 were as follows:
<TABLE>
<CAPTION>
BALANCED BLUE CHIP MID-CAP SMALL COMPANY GLOBAL GROWTH AND
ASSETS GROWTH GROWTH GROWTH BALANCED INCOME
FUND FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Aggregate purchases..... $470,062,644 $219,833,010 $146,077,784 $518,886,339 $20,776,926 $41,022,581
============ ============ ============ ============ =========== ===========
Aggregate sales......... $481,037,139 $222,057,848 $134,646,378 $404,167,995 $21,191,381 $18,134,966
============ ============ ============ ============ =========== ===========
</TABLE>
Note 6. Portfolio Securities (Tax Basis)
The cost of securities and the aggregate gross unrealized appreciation and
depreciation of securities for federal income tax purposes at September 30,
1996 were as follows:
<TABLE>
<CAPTION>
BALANCED BLUE CHIP MID-CAP SMALL COMPANY GLOBAL GROWTH AND
ASSETS GROWTH GROWTH GROWTH BALANCED INCOME
FUND FUND FUND FUND FUND FUND
------------ ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Cost (tax basis)........ $286,714,065 $76,704,287 $45,886,063 $204,188,516 $23,714,810 $32,870,818
============ =========== =========== ============ =========== ===========
Appreciation............ $ 20,942,612 $ 7,779,818 $10,645,466 $ 57,614,727 $ 2,614,967 $ 2,188,075
Depreciation............ (4,670,019) (2,422,398) (338,154) (2,051,181) (860,315) (389,237)
------------ ----------- ----------- ------------ ----------- -----------
Unrealized appreciation/
depreciation--net...... $ 16,272,593 $ 5,357,420 $10,307,312 $ 55,563,546 $ 1,754,652 $ 1,798,838
============ =========== =========== ============ =========== ===========
</TABLE>
At September 30, 1996, Global Balanced Fund had net capital loss
carryforwards of $217,014 which are available to the extent provided in
regulations to offset future capital gains of which $17,364 will expire in
2003 and $199,650 will expire in 2004. To the extent that these
carryforwards are used to offset future capital gains, it is probable that
the gains so offset will not be distributed.
35
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
Note 7. Open Forward Currency Contracts
At September 30, 1996, the Global Balanced Fund engaged in the trading of
forward foreign currency exchange contracts ("forward contracts") in order
to hedge against changes in future foreign exchange rates and enhance
return. Forward contracts involve elements of market risk in excess of the
amount reflected in the Statement of Assets and Liabilities. The Fund bears
the risk of an unfavorable change in the foreign exchange rate underlying
the forward contract. Global Balanced Fund held the following forward
currency contracts at September 30, 1996:
<TABLE>
<CAPTION>
GROSS
CONTRACT IN DELIVERY UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION
---------------------- ------------------------- -------- ------------
<S> <C> <C> <C> <C> <C>
BEF 3,467,742 USD 114,142 12/05/96 $ 3,359
DEM 2,044,653 USD 1,386,337 12/04/96 41,553
DEM 2,000,000 USD 1,332,001 12/12/96 15,828
DKK 1,109,003 USD 194,201 10/22/96 4,697
ESP 10,484,525 USD 81,576 10/15/96 30
FRF 782,303 USD 156,102 10/23/96 4,458
JPY 59,315,200 USD 544,176 10/17/96 11,322
JPY 300,000,000 USD 2,781,125 12/12/96 64,720
*USD 172,143 IEP 107,348 10/1/96 54
--------
146,021
--------
<CAPTION>
GROSS
UNREALIZED
DEPRECIATION
------------
<S> <C> <C> <C> <C> <C>
AUD 94,642 USD 74,247 10/30/96 $ (583)
CAD 216,167 USD 158,051 11/12/96 (930)
GBP 420,664 USD 652,282 11/14/96 (5,805)
IEP 107,348 USD 172,106 12/02/96 (38)
ITL 421,970,840 USD 273,138 10/15/96 (3,548)
SEK 3,074,685 USD 462,567 11/15/96 (1,757)
*IEP 107,348 USD 171,026 10/01/96 (1,170)
--------
(13,831)
--------
Net Appreciation....................................... $132,190
========
</TABLE>
*Represents open forward foreign currency contracts and offsetting open
forward foreign currency contracts that do not have additional market risk
but have continued counterparty settlement risk.
AUD--Australian Dollar ESP--Spanish Peseta ITL--Italian Lira
BEF--Belgian Franc FRF--French Franc JPY--Japanese Yen
CAD--Canadian Dollar GBP--Great Britain Pound SEK--Swedish Krona
DEM--Deutsche Mark IEP--Irish Punt USD--United States
DKK--Danish Kroner Dollar
36
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
Note 8. Capital Share Transactions
At September 30, 1996, the Adviser and SACS in the aggregate, owned 843,915
Class A shares of the Growth and Income Fund representing 25.24% of the
Fund's net assets.
Transactions in capital shares of each class of each series were as
follows:
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
--------------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- ----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------------ ------------------------ ------------------------ --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 3,119,474 $ 50,864,950 4,667,503 $ 71,426,588 3,055,442 $ 49,865,609 3,071,975 $ 45,998,809
Reinvested
dividends...... 583,832 9,290,744 265,763 3,756,343 690,103 10,949,550 769,696 10,686,782
Shares redeemed. (2,257,335) (36,956,739) (1,193,984) (17,782,121) (3,430,716) (55,757,942) (6,322,402) (95,258,440)
---------- ------------ ---------- ------------ ---------- ------------ ----------- -------------
Net increase
(decrease)..... 1,445,971 $ 23,198,955 3,739,282 $ 57,400,810 314,829 $ 5,057,217 (2,480,731) $ (38,572,849)
========== ============ ========== ============ ========== ============ =========== =============
<CAPTION>
BLUE CHIP GROWTH FUND
--------------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- ----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------------ ------------------------ ------------------------ --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 753,893 $ 12,709,149 2,404,163 $ 37,806,801 3,214,655 $ 53,717,531 8,964,323 $ 134,971,138
Reinvested
dividends...... 285,095 4,507,347 14,956 207,075 277,108 4,315,647 372,862 5,128,338
Shares redeemed. (533,503) (8,978,653) (181,804) (2,884,125) (3,702,537) (61,373,567) (11,706,255) (177,081,024)
---------- ------------ ---------- ------------ ---------- ------------ ----------- -------------
Net increase
(decrease)..... 505,485 $ 8,237,843 2,237,315 $ 35,129,751 (210,774) $ (3,340,389) (2,369,070) $ (36,981,548)
========== ============ ========== ============ ========== ============ =========== =============
<CAPTION>
MID-CAP GROWTH FUND
--------------------------------------------------------------------------------------------------------
CLASS A CLASS B
-------------------------------------------------- ----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------------ ------------------------ ------------------------ --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 585,749 $ 10,047,757 247,141 $ 3,926,322 1,569,285 $ 26,612,848 4,235,563 $ 62,818,790
Reinvested
dividends...... 262,450 4,236,039 5,781 79,602 66,071 1,049,943 1,748 24,200
Shares redeemed. (609,879) (10,404,579) (521,946) (7,755,976) (1,386,338) (23,587,448) (3,989,374) (59,135,991)
---------- ------------ ---------- ------------ ---------- ------------ ----------- -------------
Net increase
(decrease)..... 238,320 $ 3,879,217 (269,024) $ (3,750,052) 249,018 $ 4,075,343 247,937 $ 3,706,999
========== ============ ========== ============ ========== ============ =========== =============
</TABLE>
37
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND
-----------------------------------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------------------- -----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------------- ------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 6,607,402 $ 153,907,782 6,544,632 $ 130,462,164 6,285,098 $ 144,713,218 9,886,153 $ 196,092,402
Reinvested
dividends...... 725,288 15,398,224 54,753 964,756 543,295 11,327,669 62,016 1,085,149
Shares redeemed. (4,425,505) (102,867,176) (5,262,148) (102,586,803) (5,086,621) (116,292,585) (10,265,178) (202,833,358)
---------- ------------- ---------- ------------- ---------- ------------- ----------- -------------
Net increase
(decrease)..... 2,907,185 $ 66,438,830 1,337,237 $ 28,840,117 1,741,772 $ 39,748,302 (317,009) $ (5,655,807)
========== ============= ========== ============= ========== ============= =========== =============
<CAPTION>
GLOBAL BALANCED FUND
-----------------------------------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------------------- -----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------------- ------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 419,512 $ 3,129,820 750,764 $ 5,173,301 771,725 $ 5,700,564 1,150,637 $ 7,847,490
Reinvested
dividends...... 63,292 449,372 4,067 27,252 93,522 662,149 2,161 14,461
Shares redeemed. (488,115) (3,602,549) (1,342,777) (9,319,908) (672,645) (4,972,923) (1,199,716) (8,126,345)
---------- ------------- ---------- ------------- ---------- ------------- ----------- -------------
Net increase
(decrease)..... (5,311) $ (23,357) (587,946) $ (4,119,355) 192,602 $ 1,389,790 (46,918) $ (264,394)
========== ============= ========== ============= ========== ============= =========== =============
<CAPTION>
GROWTH AND INCOME FUND
-----------------------------------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------------------- -----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------------- ------------------------- ------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,608,366 $ 15,926,962 542,589 $ 4,112,191 1,180,720 $ 11,686,226 301,384 $ 2,380,132
Reinvested
dividends...... 32,680 297,897 25,040 190,918 19,593 176,116 7,758 61,110
Shares redeemed. (46,202) (441,023) (562,875) (4,274,466) (172,820) (1,683,504) (37,348) (295,806)
---------- ------------- ---------- ------------- ---------- ------------- ----------- -------------
Net increase.... 1,594,844 $ 15,783,836 4,754 $ 28,643 1,027,493 $ 10,178,838 271,794 $ 2,145,436
========== ============= ========== ============= ========== ============= =========== =============
</TABLE>
38
<PAGE>
SUNAMERICA EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS -- September 30, 1996 -- (continued)
Note 9. Commitments and Contingencies
The SunAmerica family of mutual funds may borrow up to $75,000,000 under an
uncommitted line of credit with State Street Bank and Trust Company, the
Funds' custodian, with interest payable at the Federal Funds rate plus 100
basis points. Borrowings under the line of credit will commence when the
respective Fund's cash shortfall exceeds $100,000.
Note 10. Trustees Retirement Plan
The Trustees (and Directors) 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
Trustees. The Retirement Plan provides generally that if an unaffiliated
Trustee who has at least 10 years of consecutive service as a Disinterested
Trustee of any of the SunAmerica mutual funds (an "Eligible Trustee")
retires after reaching age 60 but before age 70 or dies while a Trustee,
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
Trustee. As of each birthday, prior to the 70th birthday, but in no event
for a period greater than 10 years, each Eligible Trustee will be credited
with an amount equal to 50% of his or her regular fees (excluding committee
fees) for services as a Disinterested Trustee 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 Trustee's account until such
Eligible Trustee reaches his or her 70th birthday. An Eligible Trustee may
receive any 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 September 30, 1996, Balanced Assets Fund, Blue Chip Growth Fund, Mid-
Cap Growth Fund, Small Company Growth Fund, Global Balanced Fund and Growth
and Income Fund had accrued $15,032, $4,872, $2,539, $7,974, $1,258 and
$298, respectively, for the Retirement Plan, which is included in accrued
expenses on the Statement of Assets and Liabilities, and for the year ended
September 30, 1996 expensed $9,912, $3,005, $1,653, $5,731, $822 and $240,
respectively, for the Retirement Plan, which is included in Trustees' fees
and expenses on the Statement of Operations.
Note 11. Subsequent Event
On October 1, 1996 Balanced Assets Fund and Small Company Growth Fund
offered Class Z shares exclusively for sale to employees participating in
the SunAmerica profit sharing and retirement plan.
39
<PAGE>
SUNAMERICA EQUITY FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of SunAmerica Equity Funds
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios 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 Balanced
Assets Fund, SunAmerica Blue Chip Growth Fund, SunAmerica Mid-Cap Growth Fund,
SunAmerica Small Company Growth Fund, SunAmerica Global Balanced Fund and
SunAmerica Growth and Income Fund (constituting SunAmerica Equity Funds,
hereafter referred to as the "Fund") at September 30, 1996, the results of each
of their operations for the year then ended, the changes in each of their net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods presented, 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 September 30, 1996 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
November 15, 1996
40
<PAGE>
SUNAMERICA EQUITY FUNDS
SHAREHOLDER TAX INFORMATION (unaudited)
Certain tax information regarding the SunAmerica Equity Funds is required to
be provided to shareholders based upon each Fund's income and distributions
for the taxable year ended September 30, 1996. The information and
distributions reported herein may differ from the information and
distributions taxable to the shareholders for the calendar year ending
December 31, 1996. The information necessary to complete your income tax
returns will be included with your Form 1099-DIV which will be sent to you
under separate cover in January 1997.
During the year ended September 30, 1996 the Funds paid the following
dividends per share:
<TABLE>
<CAPTION>
TOTAL ORDINARY NET SHORT-TERM NET LONG-TERM
DIVIDENDS INCOME CAPITAL GAINS CAPITAL GAINS
--------- -------- --------------- ---------------
<S> <C> <C> <C> <C>
Balanced Assets Class A..... $1.27 $.28 $ .73 $.26
Balanced Assets Class B..... 1.17 .18 .73 .26
Blue Chip Growth Class A.... 1.91 -- 1.39 .52
Blue Chip Growth Class B.... 1.91 -- 1.39 .52
Mid-Cap Growth Class A...... 2.11 -- 1.52 .59
Mid-Cap Growth Class B...... 2.11 -- 1.52 .59
Small Company Growth Class
A.......................... 4.53 -- 4.43 .10
Small Company Growth Class
B.......................... 4.53 -- 4.43 .10
Global Balanced Class A..... .42 .42 -- --
Global Balanced Class B..... .38 .38 -- --
Growth and Income Class A... .56 .17 .39 --
Growth and Income Class B... .52 .13 .39 --
</TABLE>
For the year ended September 30, 1996, 19.44%, 17.42%, 3.87%, 28.30% and
14.43% of the dividends paid from ordinary income by Balanced Assets Fund,
Blue Chip Growth Fund, Mid-Cap Growth Fund, Global Balanced Fund and Growth
and Income Fund respectively, qualified for the 70% dividends received
deductions for corporations.
41
<PAGE>
SUNAMERICA EQUITY FUNDS
COMPARISONS: PORTFOLIOS VS. INDEXES
As required by the Securities and Exchange Commission, the following graphs
compare the performance of a $10,000 investment in the SunAmerica Equity Funds'
portfolios to a similar investment in an index. Please note that "inception" as
used herein reflects the date a Fund commenced operations without regard to
when a second class of shares was introduced. It is important to note that the
SunAmerica Equity Funds are professionally managed mutual funds while the
indices are not available for investment and are unmanaged. The comparison is
shown for illustrative purposes only. The graphs present the performance of the
class of that particular Fund which has been in existence the longest. The
performance of the other class will vary based upon the difference in sales
charges and fees assessed to shareholders of that class. The maximum sales
charge for Class A is 5.75% of the public offering price. The maximum
contingent deferred sales charge for Class B is 4% and is reduced to 0% after
six years. Both Class A and Class B bear ongoing 12b-1 distribution and service
fees. Each index has been chosen by the particular portfolio's manager as an
appropriate comparison and is accompanied by a brief discussion from the
portfolio manager about why the portfolio performed the way it did relative to
the index.
[GRAPH APPEARS HERE]
Balanced Assets Fund
Class A Class B
------------------------ ------------------------
SEC SEC
Balanced Average Cumulative Average Cumulative
Assets Annual Traditional Annual Traditional
Fund Return Return+ Return Return+
- --------------- ------- ----------- ------- -----------
1 Year Return 4.29% 10.65% 5.93% 9.93%
5 Year Return N/A N/A 10.01% 63.12%
Since Inception 8.23% 34.74% 11.62% 260.76%
+ Traditional returns do not include sales load.
The SunAmerica Balanced Assets Fund offers a conservative approach to stock
investing. The Fund seeks to conserve principal by maintaining at all times a
balanced portfolio of stocks and bonds. The Fund will traditionally underperform
a pure stock portfolio due to its fixed income component. Over the course of the
past year, the Fund has underperformed the S&P 500 due to our conservative
stance toward the market. Our strategy going forward will be to overweight the
Fund with large, liquid names with consistent earnings, focusing on the
technology, health care, interest sensitive and energy sectors.
Balanced Assets- S&P 500 Lehman Bros.
Class B (dividends reinvested) Int Gov't Index
---------------- ---------------------- ---------------
9/86 10,000 10,000 10,000
6/87 11,752 13,449 10,283
6/88 11,577 12,534 11,056
6/89 12,529 15,110 12,171
6/90 14,144 17,601 13,112
6/91 14,693 18,903 14,492
6/92 15,794 21,439 16,354
6/93 18,999 24,360 17,996
9/93 19,653 24,989 18,401
9/94 19,625 25,912 18,125
9/95 23,543 33,623 20,050
9/96 29,067 40,457 21,073
*Fund changed its fiscal year end from June 30 as of September 24, 1993.
42
<PAGE>
SUNAMERICA EQUITY FUNDS
COMPARISONS: PORTFOLIOS VS. INDEXES -- (continued)
[GRAPH APPEARS HERE]
Blue Chip Growth Fund
Class A Class B
-------------------- ---------------------
SEC SEC
Blue Chip Average Cumulative Average Cumulative
Growth Annual Traditional Annual Traditional
Fund Return Return+ Return Return+
- --------------- ------- ----------- ------- -----------
1 Year Return 7.33% 13.88% 9.17% 13.17%
5 Year Return N/A N/A 12.86% 85.08%
Since Inception 8.86% 36.67% 10.53% 217.82%
+ Traditional returns do not include sales load.
The SunAmerica Blue Chip Growth Fund seeks capital appreciation by investing
primarily in equity securities of companies with large market capitalizations.
During the past year, the Blue Chip Growth Fund has lagged behind the S&P 500
due to our more conservative stance and the over diversification of the Fund.
Our strategy going forward is to concentrate the Fund on sectors that will
outperform. To that end, we have overweighted the Fund in interest sensitive,
health care and technology names into the Fund's next fiscal year.
Blue Growth Class B S&P 500 (dividends reinvested)
------------------- ------------------------------
9/86 10,000 10,000
12/86 10,451 10,558
12/87 9,678 11,119
12/88 12,506 12,965
12/89 14,101 17,073
12/90 10,560 16,543
12/91 13,711 21,584
12/92 14,872 23,228
9/93 17,816 24,989
9/94 17,493 25,912
9/95 21,082 33,623
9/96 23,858 40,457
*Fund changed its fiscal year end from December 31 to September 30 as of
September 24, 1993.
[GRAPH APPEARS HERE]
Mid-Cap Growth Fund
Class A Class B
---------------------- ---------------------
SEC SEC
Mid-Cap Average Cumulative Average Cumulative
Growth Annual Traditional Annual Traditional
Fund Return Return+ Return Return+
- --------------- ------- ----------- ------- -----------
1 Year Return 6.43% 12.92% 8.16% 12.16%
5 Year Return 11.68% 84.31% N/A N/A
Since Inception 12.08% 219.65% 8.03% 28.96%
+ Traditional returns do not include sales load.
The SunAmerica Mid-Cap Growth Fund seeks capital appreciation by investing
primarily in the equity securities of medium-sized companies with market
capitalizations of $1 billion to approximately $5 billion. The Fund took
advantage of the strong advance of the equity markets and performed in line with
the S&P 500. The Fund performance was mainly due to select investments in high
growth industries such as, technology, health care and energy.
S&P 500 (dividends reinvested) Mid-Cap Growth Class A
------------------------------ ----------------------
1/87 10,000 10,000
11/87 8,301 8,839
11/88 10,236 11,224
11/89 13,393 15,308
11/90 12,929 12,610
11/91 15,558 16,535
11/92 18,432 20,077
9/93 20,073 24,177
9/94 20,814 21,873
9/95 27,008 26,679
9/96 32,498 30,127
*Fund changed its fiscal year end from November 30 to September 30 as of
September 24, 1993.
43
<PAGE>
SUNAMERICA EQUITY FUNDS
COMPARISONS: PORTFOLIOS VS. INDEXES -- (continued)
[GRAPH APPEARS HERE]
Small Company Growth Fund
Class A Class B
------------------------- ---------------------
Small SEC SEC
Company Average Cumulative Average Cumulative
Growth Annual Traditional Annual Traditional
Fund Return Return+ Return Return+
- --------------- ------- ----------- ------- -----------
1 Year Return 12.48% 19.35% 14.60% 18.60%
5 Year Return 18.63% 149.32% N/A N/A
Since Inception 14.87% 305.25% 16.83% 62.95%
+ Traditional returns do not include sales load.
The SunAmerica Small Company Growth Fund seeks to realize capital appreciation
by investing in equity securities of small capitalization growth companies. The
Fund performed well during its fiscal year, ranking among the top third of the
small company growth funds as tracked by Lipper Analytical Services. The Fund's
performance has been successful mainly due to additional positions in growth
stocks where earnings were driven by secular changes. We will continue our
selective investments in health care, and maintain positions in various
outsourcing companies and in the oil service sector, into the next fiscal
year.
NASDAQ Industrials Small Company Growth Class A
------------------ ----------------------------
1/87 10,000 10,000
11/87 6,855 7,313
11/88 8,195 11,503
11/89 10,021 14,886
11/90 8,763 10,334
11/91 13,270 15,714
11/92 15,859 19,533
9/93 17,556 24,549
9/94 17,498 22,638
9/95 23,897 32,003
9/96 26,965 38,195
*Fund changed its fiscal year end from November 30 to September 30 as of
September 24, 1993.
[GRAPH APPEARS HERE]
Global Balanced Fund
Class A Class B
------------------- --------------------
SEC SEC
Global Average Cumulative Average Cumulative
Balanced Annual Traditional Annual Traditional
Fund Return Return+ Return Return+
- --------------- ------- ----------- ------- -----------
1 Year Return 4.62% 11.00% 6.21% 10.21%
5 Year Return N/A N/A N/A N/A
Since Inception 4.82% 17.96% 5.50% 16.05%
+ Traditional returns do not include sales load.
The SunAmerica Global Balanced Fund seeks capital appreciation while conserving
principal by maintaining at all times a balanced portfolio of domestic and
foreign stocks and bonds. The Fund has underperformed during the past year due
to its overweighting in the Japanese markets and its conservative stance toward
the domestic markets. Going forward, we continue to believe Japan will benefit
from its current low interest rate environment and improving economy. The
domestic equity and fixed income portion should perform well given the current
economic outlook in the U.S.
<TABLE>
<CAPTION>
JP Morgan Global MCSI EAFE World S&P 500 (dividends Global Balanced Global Balanced
Gov't Bond Index reinvested) Class A Class B
---------------- --------------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C> <C>
6/94 10,000 10,000 10,000 10,000 10,000
9/94 10,239 10,160 10,232 9,384 9,542
9/95 11,872 10,780 13,277 10,015 10,130
9/96 12,473 12,309 15,975 11,117 11,305
</TABLE>
44
<PAGE>
SUNAMERICA EQUITY FUNDS
COMPARISONS: PORTFOLIOS VS. INDEXES -- (continued)
[GRAPH APPEARS HERE]
Growth and Income Fund
Class A Class B
------------------------ ---------------------
SEC SEC
Growth Average Cumulative Average Cumulative
and Income Annual Traditional Annual Traditional
Fund Return Return+ Return Return+
- ---------------- ------- ----------- ------- -----------
1 Year Return 24.97% 32.59% 27.75% 31.75%
5 Year Return N/A N/A N/A N/A
Since Inception 20.76% 62.19% 22.52% 60.46%
+ Traditional returns do not include sales load.
The SunAmerica Growth and Income Fund invests in common stocks, which offer
potential for capital appreciation, current income or both. As we positioned the
portfolio in attractive health care, industrial and technology issues early in
the year, the Fund returned 32.59% for its fiscal year, ranking it the #1 growth
and income fund as ranked by Lipper Analytical Services. Currently we are
broadly diversified in primarily large capitalization stocks and are building
positions in areas where we see good earnings visibility and reasonable
valuations.
S&P 500 (dividends Growth & Income Growth & Income
reinvested) Class A Class B
------------------ --------------- ---------------
7/94 10,000 10,000 10,000
9/94 10,489 9,645 9,819
9/95 13,610 11,529 11,779
9/96 16,377 15,286 15,746
45
<PAGE>
TRUSTEES INVESTMENT ADVISER
S. James Coppersmith SunAmerica Asset Management Corp.
Samuel M. Eisenstat The SunAmerica Center
Stephen J. Gutman 733 Third Avenue
Peter A. Harbeck New York, NY 10017-3204
Peter McMillan III
Sebastiano Sterpa SUB-ADVISER
AIG Asset Management, Inc. 70 Pine
OFFICERS Street New York, NY 10270
Peter A. Harbeck, President
Stanton J. Feeley, Executive Vice President DISTRIBUTOR
Nancy Kelly, Vice President SunAmerica Capital Services, Inc.
Audrey L. Snell, Vice President The SunAmerica Center
Gerard P. Sullivan, Vice President 733 Third Avenue
Robert M. Zakem, Secretary New York, NY 10017-3204
Peter C. Sutton, Treasurer
Donna M. Handel, Assistant Treasurer SHAREHOLDER SERVICING AGENT
John T. Genoy, Assistant Treasurer SunAmerica Fund Services, Inc.
Hilary R. Kastleman, Assistant Secretary The SunAmerica Center
Abbe P. Stein, Assistant Secretary 733 Third Avenue
New York, NY 10017-3204
CUSTODIAN AND TRANSFER AGENT
State Street Bank & Trust Company
P.O. Box 419572
Kansas City, MO 64141-6572
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BULK RATE
SUNAMERICA EQUITY FUNDS U.S. POSTAGE
THE SUNAMERICA CENTER PAID
733 THIRD AVENUE Kansas City,
NEW YORK, NY 10017-3204 MO
1-800-858-8850 PERMIT NO.
3657
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.
SPONSORED BY:
[LOGO]SUN AMERICA
ASSET MANAGEMENT
EFANN
