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[LOGO] SunAmerica
The Retirement Specialist
[GRAPHIC]
EQUITY FUNDS
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1999 Semiannual Report Balanced Assets Fund
Blue Chip Growth Fund
Mid-Cap Growth Fund
Small Company Growth Fund
Growth and Income Fund
"Dogs" of Wall Street Fund
[LOGO] SunAmerica
Mutual Funds
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SunAmerica Equity Funds semiannual Report
From the SunAmerica Domestic Equity Investment Team
Donna Calder
Brian Clifford
Jeff Easter
Francis Gannon
Nancy Kelly
James Monaghan
Richard Murphy
Heather Rice
Dear Shareholders:
Overall, the six months ending March 31, 1999 were historic, as the
equity markets rebounded dramatically from a difficult third quarter
1998. And the SunAmerica Equity Funds as a whole provided investors with
remarkable gains during this extraordinary period. Most importantly,
five of the six funds outperformed their market benchmarks. The market
had bottomed out on October 8th, following Russian economic collapse,
weakened economies in Latin America, ongoing economic woes in Asia, and
the near collapse of a major leveraged hedge fund called Long Term
Capital Management. Fears of global recession, a liquidity crunch and
financial market instability prompted two successive, and surprising,
interest rate cuts of 0.25% each by the Federal Reserve Board on October
15th and November 17th, following the first of the series of cuts on
September 29th. This official easing of monetary policy provided an
enormous psychological boost that set the stage for the equity markets'
unexpectedly speedy rebound in the fourth quarter.
Then, in a stunning market reversal, the U.S. stock market roared back
with a vengeance. The S&P 500 Index rebounded to the 1100-point range,
up nearly 20% from its third quarter low of 957. The calendar year ended
with the strongest fourth quarter returns in twenty years for most major
U.S. large-cap equity indices. Declining interest rates and low
inflation had a particularly positive impact on growth stocks. Many
technology-related stocks saw staggering gains.
The equity markets continued to rally in the first quarter of 1999.
The Dow Jones Industrial Average reached a major milestone, closing
above the 10,000 mark for the first time on March 29th. Both the NASDAQ
and S&P 500 Indices also closed in record territory.
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Still, some market watchers continue to worry and are concerned that
the market remains incredibly narrow. For example, only eighteen stocks
accounted for 100% of the S&P 500's performance in the first quarter of
1999. Concerns over both foreign and domestic economies kept investor
preference toward large capitalization stocks. But despite these
conditions, the U.S. economy continued to expand in a favorable
environment of solid corporate earnings growth, low interest rates and
extraordinarily tame inflation.
Looking ahead, we believe that the favorable economic conditions of
the semi-annual period are likely to continue. We anticipate moderate
U.S. GDP growth in the range of 3% to 3.5%, low inflation of less than
2%, and a Federal Reserve Board on hold, as international pressures
remain. This excellent backdrop should propel the equity markets
forward. As we see more evidence of a global market recovery, the market
may also broaden. What is almost certain is that volatility will
continue.
We are pleased to report that five of the six SunAmerica Equity Funds
participated in the market rebound of the semi-annual period and
outperformed its respective benchmark. We respectfully present you with
a portfolio review for each on the following pages.
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SunAmerica Balanced Assets Fund
Performance
SunAmerica Balanced Assets Fund significantly outperformed its
category average for the semi-annual period and ranked in the top
10% of its peers for both its six-month and one-year performance
through the end of the first calendar quarter, according to Lipper
Analytical Services. Balanced Assets Class A returned 21.90% on a
cumulative basis compared to 12.36% for the Lipper category for the
six months ending March 31, 1999. Its benchmarks, the S&P 500 Index
and the Lehman Intermediate Government Index, returned 31.29% and -
0.03%, respectively, for the same period. (Returns do not reflect
the impact of sales charges.)
Your Fund's strong performance was primarily attributable to a
higher exposure to equities than the traditional balanced fund and
to a longer-than-Index duration in its fixed income allocation.
Specifically, the Fund had 68% of its assets invested in equities
on March 31st, as compared to about 55% held in a typical balanced
fund. Successful sector allocation overweightings in healthcare,
technology, telecommunications, and financial services stocks also
enhanced the Fund's performance during the semi-annual period.
SunAmerica Balanced Assets Fund (10-1-98 through 3-31-99)
[BAR CHART]
Blended Index
SunAmerica Lipper 55% S&P 500 Index
Balanced Balanced 45% Lehman Brothers
Assets Fund Category Intermediate Gov't Rent Index
----------- -------- -----------------------------
21.9% 12.4% 17.2%
<TABLE>
<CAPTION>
Return
Since
Inception
1 yr 3 yr 5 yr (9/24/93)
------ ------ ------ ---------
<S> <C> <C> <C> <C>
A Shares
At Net Asset Value..... 18.88% 19.66% 18.03% 15.76%
A Shares
With Maximum
Sales Charge........... 12.05% 17.32% 16.64% 14.52%
</TABLE>
Past performance is no guarantee of future
results.
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Portfolio Review
The Balanced Assets Fund seeks principal preservation and capital
appreciation by investing in a balanced portfolio of stocks and
bonds. It generally divides its assets between stocks of companies
with market capitalizations of over $1 billion and high-quality
bonds.
In the healthcare sector, top holdings included pharmaceuticals
(such as Pfizer, Merck, and Schering-Plough) and biotechnology
companies (such as Amgen and Biogen). Each of these stocks was a
consistent double-digit earner benefiting from the country's aging
population, a trend often called the "Graying of America.". Growth
from unit volume and new products, rather than from pricing, made
the drug companies particularly attractive investments.
Your Fund's holdings in the technology sector focused on personal
computer makers and on those companies supporting the computer,
including software, memory, and data storage companies, rather than
on Internet stocks. Within the telecommunications sector, our
emphasis was on equipment companies (such as Cisco, Lucent, and
Worldcom) and on those companies entering symbiotic relationships
with cable companies (such as Comcast, Media One, and AT&T).
The financial services sector was one of the hardest hit by the
third quarter equity market correction, and we took the opportunity
to add to our positions at that time. Based on the theme of
"Following the Strength of the Consumer," we focused on credit card
companies, such as Citicorp, Providian, and Capital One Financial,
and, in the first quarter of 1999, large money center banks that
had done well after significant merger and acquisition activity. We
increased the Fund's positions in Chase Manhattan Corp. and Wells
Fargo, which was bought by Norwest.
The Fund held a neutral weighting in consumer-oriented stocks,
where certain specialty vendors, such as Home Depot and the Gap,
remained attractive. We sold CVS during the first quarter, taking
profits in the drugstores' stock. Anticipating a continuation of a
healthy U.S. economy and a recovery in oil prices, we increased the
Fund's weightings in brokerage stocks and energy stocks,
respectively, to neutral positions. Merrill Lynch and Morgan
Stanley Dean Witter are examples of the former; Halliburton and
Schlumberger of the latter.
While the Fund did hold Georgia Pacific, as a whole we remained
underweight in the commodities sector, including copper, aluminum,
and paper, and in the utilities and real estate investment trust
(REIT) sectors.
On the fixed income side, your Fund's longer than-benchmark-
duration contributed to its performance, as we sought to take
advantage of the market rally prompted by the easing of
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monetary policy. After the Federal Reserve Board lowered the Fed
Funds rate by 0.25% on September 29th, it did so twice again--on
October 15th and November 17th. These moves improved investor
confidence after a turbulent third calendar quarter. But as
concerns over international turmoil lessened and investor demand
for the higher yields offered by other fixed income sectors
increased, the U.S. Treasury sector's performance suffered.
Overall, the 30-year Treasury bond yield moved up approximately
0.70% to 5.68% over the six month period. At the same time, the
Fund's investment-grade corporate bonds, which made up
approximately 11% of the portfolio, produced strong relative
performance, as investors looked favorably upon domestic and
international events.
Winners and Losers
As evidenced by the strong performance your Fund's, most of the
names in the portfolio did well. In addition to the many winners
mentioned in the Portfolio Review section, Gucci, the specialty
retail store, Wal-Mart, the department store, EMC Corp., a computer
data storage company, and Microsoft, the world's leading computer
software company, were also top performers.
Disappointments included Oakley, a sunglass and sneaker
manufacturer, and Philip Morris, the large conglomerate besieged by
the fall-out from the tobacco settlement. Both of these companies
produced only unrealized losses. The portfolio continues to hold
these names because we believe the fundamentals of both of these
companies remain favorable.
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SunAmerica Blue Chip Growth Fund
Performance
The SunAmerica Blue Chip Growth Fund outperformed both the S&P
500 Index and its peers for the six months ending March 31, 1999.
Blue Chip Growth Class A posted a cumulative return of 33.69%
compared to 26.97% for the Lipper category and 31.29% for the S&P
500 Index. (Returns do not reflect the impact of sales charges.)
The Fund also ranked in the top 8% of its peers for its six-month
performance through the end of the first calendar quarter,
according to Lipper Analytical Services.
Your Fund primarily benefited from significant overweighting in
the technology sector in general and the Internet in particular. We
also concentrated the portfolio's number of holdings from 85 names
one year ago down to 64 names on March 31, 1999 to capitalize on
the lack of market breadth.
SunAmerica Blue Chip Growth Fund (10-1-98 through 3-31-99)
[BAR CHART]
SunAmerica Lipper
Blue Chip Growth S&P 500
Growth Fund Category Index
----------- -------- -------
33.7% 27.0% 31.3%
<TABLE>
<CAPTION>
Return
Since
Inception
1 yr 3 yr 5 yr (9/24/93)
------ ------ ------ ---------
<S> <C> <C> <C> <C>
A Shares
At Net Asset Value..... 22.86% 24.61% 21.84% 18.67%
A Shares
With Maximum Sales
Charge................. 15.80% 22.18% 20.40% 17.39%
</TABLE>
Past performance is no guarantee of future
results.
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Portfolio Review
The Blue Chip Growth Fund seeks capital appreciation by investing
primarily in stocks of companies with large market capitalizations
of over $5 billion. Stocks will generally be comparable to those
included in the S&P 500 Index at the time of purchase and have
conducted operations for at least five years.
The "Demand for Technology and the Burgeoning Internet" continues
to be a strong trend, and your Fund focused on this sector with a
strong overweighting. The Fund did well during the semi-annual
period with its positions in Microsoft, EMC, IBM, Intel, and Cisco
Systems, to name just the major holdings in this sector. We also
bought Yahoo!, one of the primary Internet servicers, during this
period.
Telecommunications, where the Fund is also overweighted, helped
the Fund's strong performance as well. During this period, we
bought Nokia, which specializes in wireless communications, and
sold Frontier Corp. The Fund maintained its overweightings in
healthcare and financial services, increased its exposure to the
energy sector with names like Halliburton and Schlumberger, and
limited its exposure to cyclicals, with du Pont and Georgia
Pacific, our two primary holdings there.
Consistent with our approach of seeking high quality stocks, we
purchased Mattel. Not only do we believe that this company will
experience a turnaround on a fundamental basis, but, given its
licensing with George Lucas' production company for toys and other
promotional products, we also anticipate strong 1999 earnings based
on the already-begun hype for the new Star Wars movie.
We kept approximately a 10% holding in cash in this Fund, not as
a defensive move, but as "opportunity cash" available to initiate
or add to positions during times of market or specific stock
weakness.
Winners and Losers
In addition to those companies named above, top performers for
this Fund included General Electric, MCI WorldCom, Pfizer, AT&T,
Johnson & Johnson, and American Express.
We sold Oracle, for reasons specific to the computer software
company rather than the sector itself. Philip Morris produced
unrealized losses; we still believe that the fundamentals of the
company remain favorable despite its legal entanglements.
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SunAmerica Mid-Cap Growth Fund
Performance
The SunAmerica Mid-Cap Growth Fund outperformed both the S&P 400
MidCap Index and its peers for the six months ending March 31,
1999. Mid-Cap Growth Class A posted a cumulative return of 41.15%
compared to 22.59% for the Lipper category and 24.34% for the S&P
400 MidCap Index. The Fund even outpaced the S&P 500 Index's return
of 31.29% for the same period. (Returns do not reflect the impact
of sales charges.) These numbers ranked the Fund in the top 11% of
its peers for its six-month performance and in the top 10% of its
peers for its one-year performance through the end of the first
calendar quarter, according to Lipper Analytical Services. Such
strong performance is particularly notable during a period of both
significant market volatility and investor sentiment generally
favoring large-capitalization stocks.
Your Fund primarily benefited from its disciplined, top-down
strategy coupled with fundamental bottom-up research that seeks
growth-oriented companies with double-digit earnings. We did not
make any major shifts in our positions during this period. Rather,
we maintained overweightings in the growth sectors of technology
and healthcare and
SunAmerica Mid-Cap Growth Fund (10-1-98 through 3-31-99)
[BAR CHART]
SunAmerica Lipper
Mid-Cap Mid-Cap S&P 400
Growth Fund Category Index
----------- -------- -------
41.2% 22.6% 23.3%
<TABLE>
<CAPTION>
Return
Since
Inception
1 yr 3 yr 5 yr 10 yr (1/28/87)
----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C>
A Shares
At Net Asset Value..... 27.54% 20.62% 18.86% 15.20% 14.60%
A Shares
With Maximum Sales
Charge................. 20.21% 18.26% 17.46% 14.52% 12.91%
</TABLE>
Past performance is no guarantee of future
results.
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underweightings in the underperforming consumer cyclicals, basic
industries, and utilities sectors. Throughout the semi-annual
period, mid-cap companies exhibited strong earnings growth,
positive fundamentals, and attractive relative valuations. In fact,
mid-cap relative valuations as compared to large-cap stocks
remained at multi-decade lows.
Portfolio Review
The SunAmerica Mid-Cap Growth Fund seeks capital appreciation by
investing primarily in stocks of companies that generally have
market capitalizations of between $1 billion and $5 billion and
have been in operation for at least five years. It may also invest
in stocks issued by smaller companies that are believed to have
significant growth potential.
Sharp improvement in the Internet-related stocks was seen in the
fourth calendar quarter of 1998. These companies continued to show
strong growth, an Internet Initial Public Offering (IPO) market had
some success, and Internet-related commerce emerged as a real
factor during the holiday season. As 1999 began, many companies in
the technology arena continued to express upbeat outlooks. Thus,
with more than 30% of portfolio assets allocated to this area, the
Fund did quite well.
Your Fund was also overweighted in healthcare, particularly
pharmaceuticals and biotechnology companies that are benefiting not
only from the "Graying of America" in general but also from the
growth in managed care, long-term care, and the new phenomenon
created by direct consumer advertising of drugs in particular.
We maintained the Fund's market weightings in energy services,
increasing our positions slightly toward the end of the period, as
we saw fundamentals shifting, cheap valuations, and a sustained
rally in the price of oil. We also maintained the Fund's market
weighting in financial services.
Winners and Losers
Your portfolio's winners included Biogen and Genzyme in the
biotechnology area and EMC, CMG Information Services, Citrix
Systems, and America Online in the technology sector. We believe
that as Y2K concerns grow in the second half of 1999, information
technology expenditures on the part of major corporations will also
grow. As a result, not only do we believe that the Internet, data
storage, and other computer-related companies should continue to
flourish,
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but we also believe that our holdings in enterprise application
software companies should perform
well. Other winners for the period included Halliburton in energy
services and the retail Abercrombie and Fitch, which benefited from
strong consumer spending.
Of course, the Fund experienced disappointments, too. We sold
Litton Industries, a defense contractor, and a few regional banks
that simply were not performing. We also invested in some of the
energy stocks, like Diamond Offshore Drilling, Baker-Hughes, and
Global Industries, a bit early. These stocks flatlined, and thus
had a neutral impact on the portfolio during the semi-annual
period. The portfolio still holds these stocks and we anticipate
that as oil prices firm and the global economy begins to recover,
these companies will begin to perform.
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SunAmerica Small Company Growth Fund
Performance
SunAmerica Small Company Growth Fund had a very successful semi-
annual period, and benefited from the portfolio restructuring we
began in March of 1998. This work included reducing the number of
holdings and re-allocating assets to specific sectors. The
SunAmerica Small Company Growth Fund outperformed its benchmarks
and its peers for the six months ending March 31, 1999. Small
Company Growth Class A posted a cumulative return of 54.40%
compared to 13.17% for the Lipper category, 14.39% for the Russell
2000 Index, and 21.57% for the Russell 2000 Growth Index. The Fund
even outpaced the 52.93% return of the NASDAQ Industrials Index for
the same period. (Returns do not reflect the impact of sales
charges.) The Fund also ranked in the top 3% of its peers for its
one-year performance through the end of the first calendar quarter,
according to Lipper Analytical Services.
This strong performance is particularly notable during a period
of both significant market volatility and investor sentiment
generally favoring large-capitalization stocks. While small-cap
stocks lagged the performance of their larger cap brethren, it is
well worth noting that small-cap growth stocks actually
outperformed mid-cap stocks for the semi-annual period.
We continued to seek out new and emerging industry trends, early
in their cycle, and identify the leading companies that will
benefit from those trends and change the existing landscape. We
also took advantage of the market bottom of early October to
initiate or add to positions at cheap multiples and attractive
prices. The Fund benefited most from its significant overweighting
in the technology sector, which did especially well during this
period.
Throughout the semi-annual period, the portfolio's small-cap
companies exhibited strong earnings growth, positive fundamentals,
and attractive relative valuations. In fact, the price/earnings
ratios of small-cap companies as compared to large-cap
price/earnings ratios were still at multi-decade lows at the end of
the quarter. We believe that the market will continue to broaden
and that small growth companies offer very compelling value.
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SunAmerica Small Company Growth Fund (10-1-98 through 3-31-99)
[BAR CHART]
SunAmerica Russell Lipper
Small Company NASDAQ 2000 Small-Cap
Growth Fund Industrials Index Category
------------- ----------- ------- ---------
54.4% 53.0% 14.4% 13.2%
<TABLE>
<CAPTION>
Return
Since
Inception
1 yr 3 yr 5 yr 10 yr (1/28/87)
----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C>
A Shares
At Net Asset Value..... 22.22% 15.02% 20.29% 15.60% 15.33%
A Shares
With Maximum Sales
Charge................. 15.19% 12.77% 18.87% 14.92% 14.77%
</TABLE>
Past performance is no guarantee of future
results.
Portfolio Review
The Small Company Growth Fund seeks capital appreciation by
investing primarily in equity securities of small, lesser-known or
emerging growth companies or industries. The Fund typically invests
about 65% of its assets in stocks with market capitalizations of
$250 million to $1 billion. In addition, 35% of assets may be
invested in special situations, that is, in companies of any size
from any industry that are undergoing positive change not reflected
in the underlying company's stock prices.
Within the technology sector, we focused on the Internet, where
we see explosive consumer usage growth as well as business to
business e-commerce as the next big growth trend. We not only owned
portals to the Internet, such as Yahoo! and America Online, but we
also owned companies that provide security for the Internet and
companies that enable the workings of the Internet, such as
suppliers of software infrastructure, data storage, and information
technology services. Examples include BroadVision Inc., Double
Click, Inc., Macromedia, Inc., and Micromuse, Inc.
Your Fund's second biggest weighting was the highly diversified
consumer cyclicals sector. Abercrombie & Fitch Co. was our single
largest position within this sector. The stock did well over the
semi-annual period, benefiting from a strong holiday season and
from a growing demographic of teenagers with discretionary spending
ability. Other holdings within this sector
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are Movado, Cinar Films, and NASCAR racing-associated companies,
such as Penske Motor Sports and Action Performance. We decreased
our holdings in the travel services industry dramatically, selling
our cruise line companies, including Carnival and Royal Caribbean.
Within your Fund's overweighted telecommunications sector, we
maintained holdings in several local exchange carriers, which have
been a challenging group, but which we still believe are a highly
attractive business, as they compete more effectively with the
regional Bell operating companies.
During the semi-annual period, we also established a 6% weighting
in energy services as a potential turn-around group. We purchased
companies such as BJ Services, Diamond Offshore Drilling, Friede
Goldman International, Offshore Logistics, Smith International, and
Transocean Offshore Drilling in the fourth calendar quarter of 1998
after oil prices fell. As commodity prices rebounded in the first
quarter of 1999, these stocks benefited Fund performance.
Winners and Losers
In addition to those mentioned above, winners for your Fund
included Sunglass Hut, the specialty retailer, and GST
Telecommunications. Virtually all of our Internet-related holdings
from the small to the large performed very well. Most of the larger
companies we invested in were in the technology sector, and this
strategy, meant to enhance the Fund's performance and counter
adverse effects of small company market volatility, was effective
during the semi-annual period. These stocks include Apple Computer
Inc., America Online Inc., and Yahoo! Inc. Other large-cap names in
the portfolio include Wal-Mart Stores, Smith International, and
Home Depot.
Even with your Fund's outstanding performance, it was not
completely immune to the small-cap market's volatility. There are a
few holdings in the Fund that showed a loss on paper, but we have
not realized these losses since we continue to hold the stocks. We
still believe in the underlying fundamentals of these small company
issues, including HA-LO, a promotional products company, Geltex, a
biotechnology company, and Travel Services International, which is
tied closely to the cruise line industry.
In the months ahead, we anticipate increasing weightings in the
retail and energy services sectors, which historically do well in
the spring and summer seasons. Although future periods of
volatility are expected, the companies in the Fund's portfolio
generally are experiencing strong fundamental growth in revenues
and earnings and are expressing upbeat outlooks for the remainder
of 1999.
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SunAmerica Growth and Income Fund
Performance
SunAmerica Growth and Income Fund outperformed its category
average and closely tracked its benchmark for the semi-annual
period. Growth and Income Class A returned 30.75% on a cumulative
basis compared to 19.56% for the Lipper category and 31.29% for the
S&P 500 Index for the six months ending March 31, 1999. (Returns do
not reflect the impact of sales charges.) The Fund Class A also
ranked in the top 10% of its peers for its one-year and three-year
performance through the end of the first calendar quarter,
according to Lipper Analytical Services.
Your Fund continued to benefit from the management team's
restructuring of the portfolio, as it reduced the number of names
even further from 86 at the end of September 1998 to 78 at March
31, 1999 in response to the market's narrowness. The Fund also
continued to benefit from "sector neutral" stock selection, whereby
a reduction in downside market exposure is sought through
investment across multiple sectors. A 2% weighting in longer-
duration U.S. Treasuries was added to the portfolio to provide
income and enhance the overall yield of the Fund.
SunAmerica Growth and Income Fund (10-1-98 through 3-31-99)
[BAR CHART]
Lipper
SunAmerica Growth and
Growth and Income S&P 500
Income Fund Category Index
----------- ---------- -------
30.8% 19.6% 31.3%
<TABLE>
<CAPTION>
Return
Since
Inception
1 yr 3 yr (7/1/94)
------ ------ ---------
<S> <C> <C> <C>
A Shares
At Net Asset Value.......... 18.44% 26.52% 26.06%
A Shares
With Maximum Sales Charge... 11.63% 24.05% 24.50%
</TABLE>
Past performance is no guarantee of future
results.
14
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Portfolio Review
The Growth and Income Fund seeks capital appreciation and current
income by investing primarily in dividend-paying common stocks. It
normally buys stocks of companies of any size, but will generally
look for stocks that pay dividends, offer the potential for capital
growth, and/or are believed to be undervalued in the market.
Emphasis in the Fund was on the financial services, healthcare,
technology and energy sectors. Top holdings included Microsoft,
EMC, General Electric, Pfizer, IBM, MCI WorldCom, Johnson &
Johnson, American Express, Intel, and Time Warner.
Fund performance also benefited from holdings in the media and
cable industry because of the convergence between media and
telecommunications. These companies include CBS, Liberty Media
Group, MediaOne, and Comcast. Your Fund also gained yield from its
slight overweighting in the utilities sector, with companies such
as Energy East, Enron, and Peco Energy.
The Fund is underweighted in the basic materials sector. We also
added DaimlerBenz to the portfolio after its merger with Chrysler,
and we added BancOne, as an attractive value play.
We kept approximately a 6% holding in cash in this Fund, not as a
defensive move, but as "opportunity cash" available to initiate or
add to positions during times of market or specific stock weakness.
Winners and Losers
In addition to the technology holdings in the portfolio, top
performers included Anheuser-Busch and Texas Instruments. Martin
Marietta Materials benefited from an increase in interstate and
intrastate infrastructure work. As expected, the portfolio did
contain some disappointments, but we continue to hold these issues
and they remain unrealized losses, such as Royal Dutch Petroleum.
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SunAmerica "Dogs" of Wall Street Fund
Performance
Value investing was out of favor during the semi-annual period,
with investor preference favoring growth-oriented stocks. There was
also extremely narrow performance concentration in the equity
markets. While the SunAmerica "Dogs" of Wall Street Fund
underperformed for this period, it is important to note that this
is a quantitative, "black box" model and analyzing the underlying
fundamentals of the stock market or individual stocks is not
considered a primary concern in the management of this Fund. We
continue to believe the "Dogs" of Wall Street strategy will bring
investors long-term rewards.
Another measure of the "Dogs" stocks is yield. The "Dogs"
currently pay dividends averaging approximately 2.5%, compared to
the 1.48% yield on the Dow. Many of the "Dogs" continue to sell at
attractively low price/earnings multiples.
Portfolio Review
The "Dogs" of Wall Street Fund seeks total return (capital
appreciation plus current income) through a passively managed
strategy resulting in a concentrated value approach to investing
that promotes consistent investing regardless of market conditions.
It is designed to provide a long-term growth component through
exposure to blue chip companies with proven track records.
Your Fund was rebalanced at the end of 1998 to reflect our "Dogs"
for 1999. A total of ten names were replaced in the portfolio, two
from the Dow Jones Industrial Average and eight from the highest
yielding stocks of the 400 largest industrial companies. Of the 30
stocks held in the portfolio, the largest holdings include General
Motors, Newell Rubbermaid, J.P. Morgan, Royal Dutch Petroleum,
Chevron, DuPont, Alltel, Caterpillar, Goodyear Tire & Rubber, and
Kellogg.
While overall market performance was narrow and value investing
continued to be a challenge, the breadth of the S&P 500 gradually
improved during the first quarter of 1999, as 53 of 113 S&P
industry groups beat the Index, which was 33% higher than in 1998.
We continue to believe that value names are an important component
of a well-diversified portfolio and that the fundamentals for many
of the companies in your Fund's portfolio are strong and improving.
The "Dogs" of Wall Street strategy potentially provides greater
diversification, increased return and reduced risk than the
traditional Dogs of the Dow model.
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SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- March 31, 1999 (unaudited)
<TABLE>
<CAPTION>
Balanced Blue Chip Mid-Cap Small Company Growth and "Dogs" of
Assets Growth Growth Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments securities,
at value*.............. $414,592,399 $131,125,103 $58,824,995 $210,485,103 $185,659,684 $137,862,905
Repurchase agreements
(cost equals market)... 8,906,000 14,780,000 7,285,000 38,019,000 10,123,000 --
Cash.................... 346 767 20,786 20,102 134 --
Receivable for
investments sold....... 4,329,559 1,148,526 -- 3,629,583 2,125,207 1,198,697
Interest and dividends
receivable............. 2,022,906 91,979 17,995 44,617 163,894 296,264
Receivable for shares of
beneficial
interest sold.......... 1,755,582 375,341 144,916 477,501 961,887 --
Prepaid expenses........ 10,057 32,018 5,778 7,489 161 15,223
Receivable from
investment adviser..... 1,113 17 4 8,621 12,556 33,304
Deferred organizational
expenses............... -- -- -- -- 64 31,782
------------ ------------ ----------- ------------ ------------ ------------
Total assets.......... 431,617,962 147,553,751 66,299,474 252,692,016 199,046,587 139,438,175
------------ ------------ ----------- ------------ ------------ ------------
LIABILITIES:
Payable for shares of
beneficial interest
redeemed............... 1,136,538 731,951 81,914 712,173 251,536 449,216
Payable for investments
purchased.............. 994,000 2,089,962 916,631 12,722,620 527,725 --
Accrued expenses........ 301,385 157,087 98,711 242,522 171,421 128,712
Investment advisory and
management
fees payable........... 267,945 90,770 39,929 144,118 122,870 41,296
Distribution and service
maintenance
fees payable........... 229,818 67,864 25,663 110,623 120,401 102,971
Dividends payable....... 39,804 -- -- -- -- --
Due to custodian........ -- -- -- -- -- 305,461
Written options at value
(proceeds $497,178 on
Small Company Growth).. -- -- -- 599,725 -- --
------------ ------------ ----------- ------------ ------------ ------------
Total liabilities..... 2,969,490 3,137,634 1,162,848 14,531,781 1,193,953 1,027,656
------------ ------------ ----------- ------------ ------------ ------------
Net assets.......... $428,648,472 $144,416,117 $65,136,626 $238,160,235 $197,852,634 $138,410,519
============ ============ =========== ============ ============ ============
NET ASSETS WERE COMPOSED
OF:
Shares of beneficial
interest, $.01 par
value.................. $ 212,234 $ 63,317 $ 30,746 $ 87,642 $ 123,428 $ 121,447
Paid-in capital......... 309,648,623 93,292,912 41,084,745 150,641,730 144,939,693 144,876,767
------------ ------------ ----------- ------------ ------------ ------------
309,860,857 93,356,229 41,115,491 150,729,372 145,063,121 144,998,214
Accumulated
undistributed net
investment income
(loss)................. (402,894) (321,754) (313,786) (1,027,307) (478,567) 83,469
Accumulated
undistributed net
realized gain on
investments, foreign
currency and other
assets and liabilities. 17,055,429 9,198,111 6,212,289 35,863,572 5,519,652 4,091,579
Net unrealized
appreciation
(depreciation) of
investments............ 102,135,080 42,183,531 18,122,632 52,697,145 47,748,428 (10,762,743)
Net unrealized
depreciation on written
options contracts...... -- -- -- (102,547) -- --
------------ ------------ ----------- ------------ ------------ ------------
Net assets............ $428,648,472 $144,416,117 $65,136,626 $238,160,235 $197,852,634 $138,410,519
============ ============ =========== ============ ============ ============
*Identified cost
Investment securities... $312,457,319 $88,941,572 $40,702,363 $157,787,958 $137,911,256 $148,625,648
============ ============ =========== ============ ============ ============
</TABLE>
See Notes to Financial Statements
18
<PAGE>
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- March 31, 1999 (unaudited) --
(continued)
<TABLE>
<CAPTION>
Balanced Blue Chip Mid-Cap Small Company Growth and "Dogs" of
Assets Growth Growth Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A (unlimited
shares authorized):
Net assets.............. $242,542,286 $97,771,739 $51,957,061 $152,543,243 $ 79,903,684 $26,266,335
Shares of beneficial
interest issued and
outstanding............ 12,001,248 4,218,986 2,426,654 5,521,557 4,932,404 2,300,942
Net asset value and
redemption price per
share.................. $ 20.21 $ 23.17 $ 21.41 $ 27.63 $ 16.20 $ 11.42
Maximum sales charge
(5.75% of offering
price)................. 1.23 1.41 1.31 1.69 0.99 0.69
------------ ----------- ----------- ------------ ------------ -----------
Maximum offering price
to public.............. $ 21.44 $ 24.58 $ 22.72 $ 29.31 $ 17.19 $ 12.11
============ =========== =========== ============ ============ ===========
Class B (unlimited
shares authorized):
Net assets.............. $185,354,753 $46,495,534 $13,053,315 $ 83,965,406 $113,748,445 $46,175,902
Shares of beneficial
interest issued and
outstanding............ 9,184,932 2,105,998 641,773 3,182,195 7,146,116 4,052,854
Net asset value,
offering and redemption
price per share
(excluding any
applicable contingent
deferred sales charge). $ 20.18 $ 22.08 $ 20.34 $ 26.39 $ 15.92 $ 11.39
============ =========== =========== ============ ============ ===========
Class II (unlimited
shares authorized):
Net assets.............. $ 751,433 $ 148,844 $ 126,250 $ 685,903 $ 4,038,652 $65,968,282
Shares of beneficial
interest issued and
outstanding............ 37,209 6,741 6,206 26,011 253,971 5,790,808
Net asset value and
redemption price per
share (excluding any
applicable contigent
deferred sales charge). $ 20.20 $ 22.08 $ 20.34 $ 26.37 $ 15.90 $ 11.39
Maximum sales charge
(1.00% of offering
price)................. 0.20 0.22 0.21 0.27 0.16 0.12
------------ ----------- ----------- ------------ ------------ -----------
Maximum offering price
to public.............. $ 20.40 $ 22.30 $ 20.55 $ 26.64 $ 16.06 $ 11.51
============ =========== =========== ============ ============ ===========
Class Z (unlimited
shares authorized):
Net assets.............. -- -- -- $ 965,683 $ 161,853 --
Shares of beneficial
interest issued and
outstanding............ -- -- -- 34,395 9,932 --
Net asset value,
offering and redemption
price per share........ -- -- -- $ 28.08 $ 16.30 --
============ =========== =========== ============ ============ ===========
</TABLE>
See Notes to Financial Statements
19
<PAGE>
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the six months ended March 31, 1999 (unaudited)
<TABLE>
<CAPTION>
Balanced Blue Chip Mid-Cap Small Company Growth and "Dogs" of
Assets Growth Growth Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest................. $ 3,918,070 $ 168,191 $ 69,117 $ 543,951 $ 221,545 $ 21,529
Dividends................ 1,407,118 632,301 129,756 266,135 877,738 1,421,658
----------- ----------- ----------- ----------- ----------- -----------
Total investment income.. 5,325,188 800,492 198,873 810,086 1,099,283 1,443,187
----------- ----------- ----------- ----------- ----------- -----------
Expenses:
Investment advisory and
management fees......... 1,463,435 479,719 214,021 777,270 624,426 189,253
Distribution and service
maintenance fees--
Class A................. 377,442 150,549 78,275 228,987 119,679 42,756
Distribution and service
maintenance fees--
Class B................. 887,309 209,305 61,556 376,913 478,844 185,393
Distribution and service
maintenance fees--
Class II................ 499 181 161 1,424 11,141 233,170
Transfer agent fees and
expenses--Class A....... 309,779 113,860 59,175 201,295 95,039 30,669
Transfer agent fees and
expenses--Class B....... 212,028 57,410 18,077 112,710 124,142 46,539
Transfer agent fees and
expenses--Class II...... 174 64 56 1,146 2,779 58,489
Transfer agent fees and
expenses--Class Z....... -- -- -- 11,095 6,195 --
Custodian fees and
expenses................ 76,080 35,783 34,895 66,769 52,980 37,896
Registration fees--
Class A................. 2,000 21,241 11,252 -- 10,470 24,498
Registration fees--
Class B................. 3,000 10,332 6,174 -- 15,390 40,050
Registration fees--
Class II................ 1,050 18 16 11,668 11,141 45,218
Registration fees--
Class Z................. -- -- -- 8,550 22,669 --
Legal fees and expenses.. 23,570 4,945 1,945 11,820 8,410 6,140
Audit and tax consulting
fees.................... 13,545 13,685 13,615 13,265 13,545 17,535
Trustees' fees and
expenses................ 18,741 5,528 2,694 9,254 6,808 2,978
Printing expense......... 17,430 5,880 2,695 12,075 5,880 2,695
Insurance expense........ 2,300 646 379 1,789 360 23
Amortization of
organizational expenses. -- -- -- -- 138 3,878
Miscellaneous expenses... 2,932 1,500 1,184 2,011 1,627 2,063
----------- ----------- ----------- ----------- ----------- -----------
Total expenses........... 3,411,314 1,110,646 506,170 1,848,041 1,611,663 969,243
Less: expenses
reimbursed by
investment adviser...... (1,134) (26) (6) (31,769) (39,496) (183,395)
Less: custody credits
earned on cash
balances................ (13,745) (783) (455) (7,269) (270) (96)
Net expenses............. 3,396,435 1,109,837 505,709 1,809,003 1,571,897 785,752
----------- ----------- ----------- ----------- ----------- -----------
Net investment income
(loss)................... 1,928,753 (309,345) (306,836) (998,917) (472,614) 657,435
----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on
investments.............. 22,192,802 11,089,628 7,110,082 36,423,894 6,157,542 4,091,579
Net realized gain (loss)
on option contracts...... -- -- (692,815) 1,514,794 -- --
Net change in unrealized
appreciation/depreciation
on investments........... 52,387,916 25,534,407 13,399,421 54,219,526 37,211,416 (6,240,715)
Net change in unrealized
appreciation/depreciation
on written options
contracts................ -- -- -- (22,745) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net realized and
unrealized gain (loss) on
investments, foreign
currency and other assets
and liabilities.......... 74,580,718 36,624,035 19,816,688 92,135,469 43,368,958 (2,149,136)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS............... $76,509,471 $36,314,690 $19,509,852 $91,136,552 $42,896,344 $(1,491,701)
=========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
20
<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 six For the six For the six
months ended For the year months ended For the year months ended For the year
March 31, ended March 31, ended March 31, ended
1999 September 30, 1999 September 30, 1999 September 30,
(unaudited) 1998 (unaudited) 1998 (unaudited) 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss).................. $ 1,928,753 $ 4,648,757 $ (309,345) $ (483,571) $ (306,836) $ (493,615)
Net realized gain on
investments............. 22,192,802 24,425,420 11,089,628 7,610,662 7,110,082 5,342,697
Net realized gain (loss)
on option contracts..... -- -- -- -- (692,815) 182,906
Net realized gain on
foreign currency, other
assets and liabilities.. -- -- -- 6 -- 42
Net change in unrealized
appreciation/depreciation
on investments.......... 52,387,916 1,642,258 25,534,407 (1,920,853) 13,399,421 (6,869,735)
------------ ------------ ------------ ------------ ----------- -----------
Net increase (decrease) in
net assets resulting from
operations............... 76,509,471 30,716,435 36,314,690 5,206,244 19,509,852 (1,837,705)
------------ ------------ ------------ ------------ ----------- -----------
Dividends and
distributions to
shareholders:
From net investment
income (Class A)........ (1,516,008) (3,066,976) -- -- -- --
From net investment
income (Class B)........ (729,968) (1,812,490) -- -- -- --
From net investment
income (Class II)....... (614) -- -- -- -- --
From net investment
income (Class Z)........ -- (2,188) -- -- -- --
From net realized gains
on investments
(Class A)............... (15,505,431) (16,001,494) (5,748,308) (8,287,237) (2,767,478) (7,536,397)
From net realized gains
on investments
(Class B)............... (13,019,564) (16,263,710) (2,916,696) (4,747,751) (857,514) (2,258,592)
From net realized gains
on investments
(Class II).............. -- -- -- -- -- --
From net realized gains
on investments
(Class Z)............... -- (35,253) -- -- -- --
------------ ------------ ------------ ------------ ----------- -----------
Total dividends and
distributions to
shareholders............. (30,771,585) (37,182,111) (8,665,004) (13,034,988) (3,624,992) (9,794,989)
------------ ------------ ------------ ------------ ----------- -----------
Net increase in net assets
resulting from capital
share transactions (Note
6)....................... 27,316,420 19,370,777 8,124,716 11,025,071 787,839 266,590
------------ ------------ ------------ ------------ ----------- -----------
Total increase (decrease)
in net assets............ 73,054,306 12,905,101 35,774,402 3,196,327 16,672,699 (11,366,104)
NET ASSETS:
Beginning of period....... 355,594,166 342,689,065 108,641,715 105,445,388 48,463,927 59,830,031
------------ ------------ ------------ ------------ ----------- -----------
End of period [including
undistributed net
investment income (loss)
for March 31, 1999 and
September 30, 1998 of
($402,894), ($85,057);
($321,754), ($12,409);
($313,786), and ($6,950),
respectively]............ $428,648,472 $355,594,166 $144,416,117 $108,641,715 $65,136,626 $48,463,927
============ ============ ============ ============ =========== ===========
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS - (continued)
<TABLE>
<CAPTION>
Small Company Growth Fund Growth and Income Fund "Dogs" of Wall Street Fund
---------------------------- ---------------------------- -----------------------------
For the six For the six For the six For the period
months ended For the year months ended For the year months ended June 8, 1998*
March 31, ended March 31, ended March 31, through
1999 September 30, 1999 September 30, 1999 September 30,
(unaudited) 1998 (unaudited) 1998 (unaudited) 1998
------------- ------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss).................. $ (998,917) $ (2,522,639) $ (472,614) $ (311,435) $ 657,435 $ 176,127
Net realized gain on
investments............. 36,423,894 20,153,760 6,157,542 5,999,035 4,091,579 --
Net realized gain (loss)
on option contracts..... 1,514,794 (141,399) -- -- -- --
Net realized loss on
foreign currency, other
assets and liabilities.. -- -- -- (864,910) -- --
Net change in unrealized
appreciation/depreciation
of investments.......... 54,219,526 (82,111,504) 37,211,416 -- (6,240,715) (4,522,028)
Net change in unrealized
appreciation/depreciation
on written option
contracts............... (22,745) (79,802) -- -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease) in
net assets resulting from
operations............... 91,136,552 (64,701,584) 42,896,344 4,822,690 (1,491,701) (4,345,901)
------------ ------------ ------------ ------------ ------------ -----------
Dividends and
distributions to
shareholders:
From net investment
income (Class A)........ -- -- -- -- (259,531) --
From net investment
income (Class B)........ -- -- -- -- (251,352) --
From net investment
income (Class II)....... -- -- -- -- (297,568) --
From net investment
income (Class Z)........ -- -- -- -- -- --
From net realized gains
on investments
(Class A)............... (7,652,402) (15,001,692) (2,113,009) (5,129,665) -- --
From net realized gains
on investments
(Class B)............... (4,840,235) (10,065,127) (3,016,901) (6,103,333) -- --
From net realized gains
on investments
(Class II).............. (14,143) -- (66,215) -- -- --
From net realized gains
on investments
(Class Z)............... (43,230) (106,214) (3,872) -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Total dividends and
distributions to
shareholders............. (12,550,010) (25,173,033) (5,199,997) (11,232,998) (808,451) --
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease) in
net assets resulting from
capital share
transactions (Note 6).... (7,800,834) (53,359,166) 22,966,300 40,851,375 84,196,610 60,859,962
------------ ------------ ------------ ------------ ------------ -----------
Total increase (decrease)
in net assets............ 70,785,708 (143,233,783) 60,662,647 34,441,067 81,896,458 56,514,061
NET ASSETS:
Beginning of period....... 167,374,527 310,608,310 137,189,987 102,748,920 56,514,061 --
------------ ------------ ------------ ------------ ------------ -----------
End of period [including
undistributed net
investment income (loss)
for March 31, 1999 and
September 30, 1998 of
($1,027,307), ($28,365);
($478,567), ($5,954);
($83,469) and $234,485,
respectively]............ $238,160,235 $167,374,527 $197,852,634 $137,189,987 $138,410,519 $56,514,061
============ ============ ============ ============ ============ ===========
</TABLE>
*Commencement of Operations
See Notes to Financial Statements
22
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
BALANCED ASSETS 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(1) unrealized) operations income gains butions period Return(2) (000's)
- ---------------- --------- --------- ----------- ---------- --------- -------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
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
9/30/97......... 16.81 0.31 3.43 3.74 (0.31) (1.75) (2.06) 18.49 24.81 169,201
9/30/98......... 18.49 0.29 1.29 1.58 (0.30) (1.74) (2.04) 18.03 9.32 189,668
3/31/99(6)...... 18.03 0.12 3.67 3.79 (0.14) (1.47) (1.61) 20.21 21.90 242,542
Class B
-------
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
9/30/97......... 16.80 0.21 3.43 3.64 (0.21) (1.75) (1.96) 18.48 24.09 173,435
9/30/98......... 18.48 0.18 1.28 1.46 (0.19) (1.74) (1.93) 18.01 8.62 165,926
3/31/99(6)...... 18.01 0.19 3.53 3.72 (0.08) (1.47) (1.55) 20.18 21.53 185,355
Class II
--------
2/02/99-
3/31/99(3)(6)... $20.00 $0.10 $ 0.12 $ 0.22 $(0.02) $ -- $(0.02) $20.20 1.04 % $ 751
<CAPTION>
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
- ---------------- -------------- --------------- ---------
<S> <C> <C> <C>
9/30/94......... 1.58% 2.00% 141%
9/30/95......... 1.50 2.13 130
9/30/96......... 1.52 1.63 187
9/30/97......... 1.50 1.86 149
9/30/98......... 1.46 1.59 80
3/31/99(6)...... 1.46(4) 1.25(4) 47
9/30/94......... 2.21% 1.36% 141%
9/30/95......... 2.12 1.59 130
9/30/96......... 2.12 1.03 187
9/30/97......... 2.11 1.26 149
9/30/98......... 2.08 0.97 80
3/31/99(6)...... 2.06(4) 0.65(4) 47
2/02/99-
3/31/99(3)(6)... 2.05%(4)(5) 0.40%(4)(5) 47%
</TABLE>
- ----------
(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>
3/31/99
-------
<S> <C>
Balanced Assets Class II.................... 2.27%
</TABLE>
(6) Unaudited
See Notes to Financial Statements
23
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
<TABLE>
<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(1) unrealized) operations income gains butions period Return(2) (000's)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
10/08/93-
9/30/94(3)...... $16.24 $ 0.09 $(0.26) $(0.17) $ -- $(0.65) $(0.65) $15.42 (1.05)% $ 3,207
9/30/95......... 15.42 0.02 2.99 3.01 -- (1.09) (1.09) 17.34 21.29 42,407
9/30/96......... 17.34 (0.03) 2.22 2.19 -- (1.91) (1.91) 17.62 13.88 51,993
9/30/97......... 17.62 (0.02) 5.05 5.03 -- (2.43) (2.43) 20.22 32.96 67,812
9/30/98......... 20.22 (0.04) 0.91 0.87 -- (2.48) (2.48) 18.61 5.09 72,536
3/31/99(6)...... 18.61 (0.19) 6.22 6.03 -- (1.47) (1.47) 23.17 33.69 97,772
Class B
-------
9/30/94......... $16.28 $(0.01) $(0.28) $(0.29) $ -- $(0.65) $(0.65) $15.34 (1.81)% $71,749
9/30/95......... 15.34 (0.01) 2.89 2.88 -- (1.09) (1.09) 17.13 20.51 39,533
9/30/96......... 17.13 (0.14) 2.19 2.05 -- (1.91) (1.91) 17.27 13.17 36,199
9/30/97......... 17.27 (0.13) 4.90 4.77 -- (2.43) (2.43) 19.61 32.02 37,633
9/30/98......... 19.61 (0.16) 0.87 0.71 -- (2.48) (2.48) 17.84 4.36 36,106
3/31/99(6)...... 17.84 (0.31) 6.02 5.71 -- (1.47) (1.47) 22.08 33.34 46,496
Class II
--------
2/02/99-
3/31/99(3)(6)... $21.79 $(0.10) $ 0.39 $ 0.29 $ -- $ -- $ -- $22.08 1.33 % $ 149
<CAPTION>
BLUE CHIP GROWTH FUND
---------------------
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
- ---------------- -------------- ---------------- ---------
<S> <C> <C> <C>
Class A
-------
10/08/93-
9/30/94(3)...... 1.64%(4)(5) 0.65%(4)(5) 170%
9/30/95......... 1.58(5) 0.11(5) 251
9/30/96......... 1.57 (0.18) 269
9/30/97......... 1.54 (0.11) 211
9/30/98......... 1.52 (0.20) 90
3/31/99(6)...... 1.52(4) (0.27)(4) 47
Class B
-------
9/30/94......... 2.28% (0.05)% 170%
9/30/95......... 2.22 (0.09) 251
9/30/96......... 2.23 (0.83) 269
9/30/97......... 2.22 (0.77) 211
9/30/98......... 2.17 (0.86) 90
3/31/99(6)...... 2.18(4) (0.93)(4) 47
Class II
--------
2/02/99-
3/31/99(3)(6)... 2.17%(4)(5) (0.98)%(4)(5) 47%
</TABLE>
- ---------
(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 3/31/99
------- ------- -------
<S> <C> <C> <C>
Blue Chip Growth Class A.. 1.66% .11% --
Blue Chip Growth Class II. -- -- .14%
</TABLE>
(6) Unaudited
See Notes to Financial Statements
24
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS - (continued)
<TABLE>
<CAPTION>
MID-CAP GROWTH FUND
-------------------
Net
gain (loss)
Net on invest- Total Dividends Distri-
Net Asset invest- ments (both from from net butions Net Asset Net Assets
Value, ment realized invest- invest- from Total Value, end of
Period beginning income and ment ment capital distri- end of Total period
Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
- ---------------- --------- --------- ----------- ---------- --------- -------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
9/30/94......... $18.03 $ 0.04 $(1.64) $(1.60) $ -- $(2.65) $(2.65) $13.78 (9.60)% $32,906
9/30/95......... 13.78 (0.08) 4.14 4.06 (0.04) -- (0.04) 17.80 29.51 37,714
9/30/96......... 17.80 (0.12) 2.21 2.09 -- (2.11) (2.11) 17.78 12.92 41,904
9/30/97......... 17.78 (0.15) 3.83 3.68 -- (0.80) (0.80) 20.66 21.54 46,051
9/30/98......... 20.66 (0.13) (0.78) (0.91) -- (3.53) (3.53) 16.22 (4.20) 38,437
3/31/99(6)...... 16.22 (0.09) 6.45 6.36 -- (1.17) (1.17) 21.41 41.15 51,597
Class B
-------
10/04/93-
9/30/94(4)...... $18.12 $ 0.03 $(1.80) $(1.77) $ -- $(2.65) $(2.65) $13.70 (10.56)% $ 4,039
9/30/95......... 13.70 (0.18) 4.08 3.90 (0.02) -- (0.02) 17.58 28.55 9,544
9/30/96......... 17.58 (0.24) 2.18 1.94 -- (2.11) (2.11) 17.41 12.16 13,784
9/30/97......... 17.41 (0.28) 3.73 3.45 -- (0.80) (0.80) 20.06 20.65 13,779
9/30/98......... 20.06 (0.25) (0.76) (1.01) -- (3.53) (3.53) 15.52 (4.93) 10,027
3/31/99(6)...... 15.52 (0.15) 6.14 5.99 -- (1.17) (1.17) 20.34 40.60 13,053
Class II
--------
2/02/99-
3/31/99(4)(6)... $19.86 $(0.05) $0.53 $ 0.48 $ -- $ -- $ -- $20.34 2.42 % $ 126
<CAPTION>
MID-CAP GROWTH FUND
-------------------
Ratio of net
investment
Ratio of income
expenses (loss)
Period to average to average Portfolio
Ended net assets net assets turnover
- ---------------- -------------- ----------------- ---------
<S> <C> <C> <C>
9/30/94......... 1.76% 0.28% 555%
9/30/95......... 1.66 (0.51) 392
9/30/96......... 1.62 (0.69) 307
9/30/97......... 1.64 (0.84) 332
9/30/98......... 1.62 (0.75) 377
3/31/99(6)...... 1.61(3) (0.92)(3) 141
10/04/93-
9/30/94(4)...... 2.43%(3)(5) 0.20 %(3)(5) 555%
9/30/95......... 2.31(5) (0.17)(5) 392
9/30/96......... 2.32 (1.43) 307
9/30/97......... 2.35 (1.56) 332
9/30/98......... 2.33 (1.45) 377
3/31/99(6)...... 2.34(3) (1.64)(3) 141
2/02/99-
3/31/99(4)(6)... 2.35%(3)(5) (1.68)%(3)(5) 141%
</TABLE>
- ----------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Annualized
(4) Commencement of sale of respective class of shares
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
9/30/94 9/30/95 3/31/99
------- ------- -------
<S> <C> <C> <C>
Mid-Cap Growth Class B.. .48% .17% --
Mid-Cap Growth Class II. -- -- .04%
</TABLE>
(6) Unaudited
See Notes to Financial Statements
25
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND
-------------------------
Net
gain (loss)
Net on invest- Total Dividends Distri-
Net Asset invest- ments (both from from net butions Net Asset Net Assets
Value, ment realized invest- invest- from Total Value, end of
Period beginning income and ment ment capital distri- end of Total period
Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
Class A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/94......... $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
9/30/97......... 24.25 (0.30) 5.18 4.88 -- (0.86) (0.86) 28.27 20.84 185,241
9/30/98......... 28.27 (0.18) (6.59) (6.77) -- (2.40) (2.40) 19.10 (25.00) 105,243
3/31/99(6)...... 19.10 (0.08) 10.01 9.93 -- (1.40) (1.40) 27.63 54.40 152,543
<CAPTION>
Class B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
9/30/97......... 23.70 (0.44) 5.03 4.59 -- (0.86) (0.86) 27.43 20.08 124,450
9/30/98......... 27.43 (0.33) (6.36) (6.69) -- (2.40) (2.40) 18.34 (25.52) 61,398
3/31/99(6)...... 18.34 (0.15) 9.60 9.45 -- (1.40) (1.40) 26.39 54.02 83,965
<CAPTION>
Class II
--------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/2/98-
9/30/98(4)...... $21.11 $(0.19) $(2.58) $(2.77) $-- $ -- $ -- $18.34 (13.12)% $ 168
3/31/99(6)...... 18.34 (0.14) 9.57 9.43 -- (1.40) (1.40) 26.37 53.91 686
<CAPTION>
Class Z
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/07/96-
9/30/97(4)...... $24.61 $(0.15) $ 4.85 $ 4.70 $-- $(0.86) $(0.86) $28.45 19.78 % $ 948
9/30/98......... 28.45 (0.07) (6.65) (6.72) -- (2.40) (2.40) 19.33 (24.64) 565
3/31/99(6)...... 19.33 (0.02) 10.17 10.15 -- (1.40) (1.40) 28.08 54.90 966
<CAPTION>
SMALL COMPANY GROWTH FUND
-------------------------
Ratio of net
investment
Ratio of income
expenses (loss)
Period to average to average Portfolio
Ended net assets net assets turnover
- ---------------- -------------- --------------- ---------
<S> <C> <C> <C>
9/30/94......... 1.67% (0.60)% 411%
9/30/95......... 1.57 (0.22) 351
9/30/96......... 1.53 (0.68) 240
9/30/97......... 1.72 (1.27) 343
9/30/98......... 1.50 (0.79) 292
3/31/99(6)...... 1.51(3) (0.73)(3) 111
<CAPTION>
<S> <C> <C> <C>
9/30/94......... 2.31% (1.23)% 411%
9/30/95......... 2.22 (0.84) 351
9/30/96......... 2.16 (1.30) 240
9/30/97......... 2.34 (1.89) 343
9/30/98......... 2.14 (1.44) 292
3/31/99(6)...... 2.15(3) (1.38)(3) 111
<CAPTION>
<S> <C> <C> <C>
2/2/98-
9/30/98(4)...... 2.15%(3)(5) (1.35)%(3)(5) 292%
3/31/99(6)...... 2.15 (3)(5) (1.36) (3)(5) 111
<CAPTION>
<S> <C> <C> <C>
10/07/96-
9/30/97(4)...... 1.07%(3)(5) (0.67)%(3)(5) 343%
9/30/98......... 1.01 (5) (0.30) (5) 292
3/31/99(6)...... 0.93 (3)(5) (0.15) (3)(5) 111
</TABLE>
- ---------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Annualized
(4) Commencement of sale of respective class of shares
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
9/30/97 9/30/98 3/31/99
------- ------- -------
<S> <C> <C> <C>
Small Company Growth Class
II.......................... -- 13.58% 8.71%
Small Company Growth Class Z. 2.19% 1.85 5.13
</TABLE>
(6) Unaudited
See Notes to Financial Statements
26
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS - (continued)
<TABLE>
<CAPTION>
GROWTH AND INCOME 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(1) unrealized) operations income gains butions period Return(2) (000's)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
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
9/30/97......... 10.47 0.05 3.40 3.45 (0.03) (0.44) (0.47) 13.45 34.18 47,219
9/30/98......... 13.45 0.02 0.68 0.70 -- (1.35) (1.35) 12.80 5.53 57,129
3/31/99(6)...... 12.80 (0.01) 3.88 3.87 -- (0.47) (0.47) 16.20 30.75 79,904
Class B
-------
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
9/30/97......... 10.45 (0.03) 3.39 3.36 (0.01) (0.44) (0.45) 13.36 33.30 55,530
9/30/98......... 13.36 (0.07) 0.68 0.61 -- (1.35) (1.35) 12.62 4.84 79,004
3/31/99(6)...... 12.62 (0.06) 3.83 3.77 -- (0.47) (0.47) 15.92 30.39 113,748
<CAPTION>
GROWTH AND INCOME FUND
----------------------
Ratio of net
investment
Ratio of income
expenses (loss)
Period to average to average Portfolio
Ended net assets net assets turnover
- ---------------- ----------- ------------- ---------
<S> <C> <C> <C>
Class A
-------
7/01/94-
9/30/94(3)...... 1.50%(4)(5) 3.48%(4)(5) 8%
9/30/95......... 0.46(5) 4.16(5) 230
9/30/96......... 0.96(5) 1.52(5) 161
9/30/97......... 1.38(5) 0.45(5) 200
9/30/98......... 1.50 0.12 150
3/31/99(6)...... 1.52(4) (0.19)(4) 41
Class B
-------
7/06/94-
9/30/94(3)...... 2.15%(4)(5) 2.86%(4)(5) 8%
9/30/95......... 0.30(5) 4.48 (5) 230
9/30/96......... 1.58(5) 0.73 (5) 161
9/30/97......... 2.05(5) (0.27)(5) 200
9/30/98......... 2.13 (0.52) 150
3/31/99(6)...... 2.15(4) (0.83)(4) 41
Class II
--------
2/02/98-
9/30/98(3)...... $12.78 $(0.04) $(0.13) $(0.17) $ -- $ -- $ -- $12.61 (1.33)% $ 963
3/31/99(6)...... 12.61 (0.06) 3.82 3.76 -- (0.47) (0.47) 15.90 30.42 4,039
Class Z
-------
4/15/98-
9/30/98(3)...... $14.35 $ 0.04 $(1.55) $(1.51) $ -- $ -- $ -- $12.84 (10.52)% $ 93
3/31/99(6)...... 12.84 0.03 3.90 3.93 -- (0.47) (0.47) 16.30 31.13 162
Class II
--------
2/02/98-
9/30/98(3)...... 2.15%(4)(5) (0.57)%(4)(5) 150%
3/31/99(6)...... 2.15(4)(5) (0.86)(4)(5) 41
Class Z
-------
4/15/98-
9/30/98(3)...... 0.93%(4)(5) 0.57%(4)(5) 150%
3/31/99(6)...... 0.93(4)(5) 0.39(4)(5) 41
</TABLE>
- ------
(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 9/30/97 9/30/98 3/31/99
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Growth and
Income Class A. 4.48% 2.96% 1.01% .22% -- --
Growth and
Income Class B. 20.35 5.07 1.14 .21 -- --
Growth and
Income Class
II............. -- -- -- -- 6.99% 1.66%
Growth and
Income Class Z. -- -- -- -- 28.17 32.47
</TABLE>
(6) Unaudited
See Notes to Financial Statements
27
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS - (continued)
<TABLE>
<CAPTION>
"DOGS" OF WALL STREET FUND
--------------------------
Net
gain(loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets Ratio of
Value, invest- realized invest- invest- from Total Value, end of expenses
Period beginning ment and ment ment capital distri- end of Total period to average
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
6/08/98-
9/30/98(3)...... $12.50 $0.07 $(1.51) $(1.44) $ -- $ -- $ -- $11.06 (11.52)% $16,672 0.95%(4)(5)
3/31/99(6)...... 11.06 0.10 0.39 0.49 (0.13) -- (0.13) 11.42 4.35 26,266 0.95(4)(5)
Class B
-------
6/08/98-
9/30/98(3)...... $12.50 $0.04 $(1.51) $(1.47) $ -- $ -- $ -- $11.03 (11.76)% $19,734 1.60%(4)(5)
3/31/99(6)...... 11.03 0.06 0.38 0.44 (0.08) -- (0.08) 11.39 3.99 46,176 1.60(4)(5)
Class II
--------
6/08/98-
9/30/98(3)...... $12.50 $0.04 $(1.51) $(1.47) $ -- $ -- $ -- $11.03 (11.76)% $20,108 1.60%(4)(5)
3/31/99(6)...... 11.03 0.07 0.37 0.44 (0.08) -- (0.08) 11.39 3.99 65,968 1.60(4)(5)
<CAPTION>
"DOGS" OF WALL STREET FUND
--------------------------
Ratio of net
investment
income
Period to average Portfolio
Ended net assets turnover
- ---------------- ------------ ---------
<S> <C> <C>
Class A
-------
6/08/98-
9/30/98(3)...... 1.78%(4)(5) 0%
3/31/99(6)...... 1.67(4)(5) 45
Class B
-------
6/08/98-
9/30/98(3)...... 1.39%(4)(5) 0%
3/31/99(6)...... 1.06(4)(5) 45
Class II
--------
6/08/98-
9/30/98(3)...... 1.45%(4)(5) 0%
3/31/99(6)...... 1.10(4)(5) 45
</TABLE>
- ------
(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>
9/30/98 3/31/99
------- -------
<S> <C> <C>
"Dogs" of Wall Street Class A. .43% .34%
"Dogs" of Wall Street Class B. .58 .35
"Dogs" of Wall Street Class
II........................... .50 .33
</TABLE>
(6) Unaudited
See Notes to Financial Statements
28
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -----------------------------------------------------------------------------
COMMON STOCK -- 68.1%
Aerospace & Military Technology -- 1.3%
United Technologies Corp................................ 40,000 $ 5,417,500
-----------
Apparel & Textiles -- 0.2%
Oakley, Inc.+........................................... 125,000 867,188
-----------
Automotive -- 1.9%
Daimler Chrysler AG..................................... 30,000 2,574,375
Ford Motor Co........................................... 60,000 3,405,000
General Motors Corp..................................... 25,000 2,171,875
-----------
8,151,250
-----------
Banks -- 4.9%
Bank of New York Co., Inc............................... 50,000 1,796,875
Chase Manhattan Corp. .................................. 80,000 6,505,000
First Union Corp........................................ 75,000 4,007,812
Mellon Bank Corp........................................ 40,000 2,815,000
Summit Bancorp.......................................... 150,000 5,850,000
-----------
20,974,687
-----------
Broadcasting & Media -- 4.4%
CBS Corp.+.............................................. 90,000 3,684,375
Clear Channel Communications, Inc.+..................... 50,000 3,353,125
Comcast Corp., Class A+................................. 50,000 3,146,875
MediaOne Group, Inc.+................................... 35,000 2,222,500
Time Warner, Inc........................................ 92,400 6,566,175
-----------
18,973,050
-----------
Chemicals -- 0.5%
du Pont (E.I.) de Nemours & Co.......................... 40,000 2,322,500
-----------
Computers & Business Equipment -- 7.5%
Cisco Systems, Inc.+.................................... 52,500 5,752,031
Dell Computer Corp.+.................................... 140,000 5,722,500
EMC Corp.+.............................................. 70,000 8,942,500
Hewlett-Packard Co...................................... 45,000 3,051,563
International Business Machines Corp.................... 50,000 8,862,500
-----------
32,331,094
-----------
Conglomerate -- 3.7%
General Electric Co..................................... 120,000 13,275,000
Schlumberger Ltd........................................ 40,000 2,407,500
-----------
15,682,500
-----------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Department Stores -- 1.7%
Wal-Mart Stores, Inc...................................... 80,000 $ 7,375,000
-----------
Electronics -- 3.6%
Intel Corp................................................ 55,000 6,551,875
Motorola, Inc............................................. 38,000 2,783,500
Texas Instruments, Inc.................................... 60,000 5,955,000
-----------
15,290,375
-----------
Energy Services -- 0.4%
Halliburton Co............................................ 50,000 1,925,000
-----------
Energy Sources -- 2.8%
Chevron Corp.............................................. 40,000 3,537,500
Mobil Corp................................................ 55,000 4,840,000
Royal Dutch Petroleum Co.................................. 72,500 3,770,000
-----------
12,147,500
-----------
Entertainment Products -- 0.1%
Mattel, Inc............................................... 20,000 497,500
-----------
Financial Services -- 8.6%
American Express Co. ..................................... 50,000 5,875,000
Capital One Financial Corp................................ 35,000 5,285,000
Citigroup, Inc............................................ 88,700 5,665,712
Federal Home Loan Mortgage Corp........................... 27,000 1,542,375
Merrill Lynch & Co., Inc. ................................ 40,000 3,537,500
Morgan Stanley, Dean Witter & Co.......................... 50,000 4,996,875
PaineWebber Group, Inc.................................... 50,000 1,993,750
Providian Financial Corp.................................. 60,000 6,600,000
Wells Fargo Co............................................ 40,000 1,402,500
-----------
36,898,712
-----------
Food, Beverage & Tobacco -- 1.2%
Pepsi Bottling Group, Inc................................. 50,000 1,084,375
Philip Morris Cos., Inc................................... 120,000 4,222,500
-----------
5,306,875
-----------
Forest Products -- 0.7%
Georgia-Pacific Corp...................................... 41,000 3,044,250
-----------
Household Products -- 1.0%
Warner-Lambert Co......................................... 62,400 4,130,100
-----------
Leisure & Tourism -- 0.5%
Carnival Corp., Class A................................... 40,000 1,942,500
-----------
</TABLE>
29
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS--March 31, 1999 (unaudited)--(continued)
<TABLE>
<CAPTION>
Shares/
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK (continued)
Medical Products -- 3.2%
Amgen, Inc.+.................................... 470,000 $ 5,241,250
Genzyme Corp.+.................................. 40,000 2,017,500
Johnson & Johnson Co............................ 67,000 6,277,063
------------
13,535,813
------------
Pharmaceuticals -- 5.6%
Biogen, Inc.+................................... 40,000 4,572,500
Bristol-Myers Squibb Co......................... 30,000 1,929,375
Merck & Co., Inc................................ 80,000 6,415,000
Pfizer, Inc..................................... 55,000 7,631,250
Schering-Plough Corp............................ 60,000 3,318,750
------------
23,866,875
------------
Software -- 3.1%
Microsoft Corp.+................................ 150,000 13,443,750
------------
Specialty Retail -- 3.7%
Dayton Hudson Corp.............................. 45,000 2,998,125
Gap, Inc........................................ 97,500 6,562,969
Home Depot, Inc................................. 100,000 6,225,000
------------
15,786,094
------------
Telecommunications -- 5.3%
AT&T Corp....................................... 95,000 7,582,187
Lucent Technologies, Inc........................ 50,000 5,387,500
MCI WorldCom, Inc.+............................. 110,000 9,741,875
------------
22,711,562
------------
Transportation -- 0.5%
Burlington Northern Santa Fe Corp............... 60,000 1,972,500
------------
Utilities -- 1.7%
Enron Corp...................................... 80,000 5,140,000
PECO Energy Co.................................. 50,000 2,312,500
------------
7,452,500
------------
Total Common Stock
(cost $189,949,740)............................. 292,046,675
------------
BONDS & NOTES -- 10.8%
Aerospace & Military Technology -- 1.0%
Lockheed Martin Corp.
7.25% due 5/15/06.............................. $ 4,000 4,177,440
------------
Automotive -- 1.2%
Chrysler Corp.
7.45% due 3/01/27.............................. 5,000 5,392,700
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
Banks -- 0.5%
Chase Manhattan Corp.
7.88% due 8/01/04.............................. $ 2,000 $ 2,017,860
------------
Electronics -- 0.7%
Texas Instruments, Inc.
6.13% due 2/01/06.............................. 3,000 2,926,200
------------
Financial Services -- 6.2%
Bear Stearns Cos., Inc.
6.63% due 1/15/04.............................. 5,000 5,074,050
CS First Boston Mortgage Securities Corp.
6.48% due 5/17/08.............................. 5,000 4,999,900
Donaldson, Lufkin & Jenrette, Inc.
6.88% due 11/01/05............................. 2,000 2,020,420
Ford Motor Credit Co.
8.00% due 6/15/02.............................. 5,000 5,311,300
Goldman Sachs Group-L. P.*
6.60% due 7/15/02.............................. 5,000 5,090,350
Morgan Stanley, Dean Witter, Discover & Co.
6.88% due 3/01/07.............................. 4,000 4,116,360
------------
26,612,380
------------
Food, Beverage & Tobacco -- 1.2%
Hershey Foods Corp.
7.20% due 8/15/27.............................. 5,000 5,292,850
------------
Total Bonds & Notes
(cost $44,866,514).............................. 46,419,430
------------
U.S. GOVERNMENT AND AGENCIES -- 17.8%
Federal National Mortgage Association -- 2.8%
5.63% due 3/15/01............................... 5,000 5,038,300
5.75% due 4/15/03--2/15/08...................... 4,620 4,644,846
6.50% due 9/01/10............................... 2,217 2,240,945
------------
11,924,091
------------
Overseas Private Investment Corp. -- 2.8%
6.99% due 1/15/09............................... 11,665 12,029,065
------------
Small Business Administration -- 1.1%
6.30% due 6/01/18............................... 4,874 4,877,497
------------
U.S. Treasury Bonds -- 1.3%
5.25% due 11/15/28.............................. 5,900 5,502,694
------------
</TABLE>
30
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
- ----------------------------------------------------
U.S. GOVERNMENT AND AGENCIES (continued)
U.S. Treasury Notes -- 9.8%
4.25% due 11/15/03............................. $ 3,000 $ 2,887,980
4.63% due 11/30/00............................. 25,250 25,096,227
4.75% due 2/15/04-11/15/08..................... 10,000 9,761,260
5.63% due 5/15/01.............................. 4,000 4,047,480
------------
41,792,947
------------
Total U.S. Government and Agencies
(cost $77,641,065)............................. 76,126,294
------------
Total Investment Securities -- 96.7%
(cost $312,457,319)............................ 414,592,399
------------
REPURCHASE AGREEMENT -- 2.1%
Joint Repurchase Agreement with State Street
Bank & Trust Co. (Note 2) (cost $8,906,000)... 8,906 8,906,000
------------
TOTAL INVESTMENTS --
(cost $321,363,319)............................ 98.8% 423,498,399
Other assets less liabilities................... 1.2 5,150,073
------- ------------
NET ASSETS --................................... 100.0% $428,648,472
======= ============
</TABLE>
- ------
+ Non-income producing security.
* Resale restricted to qualified institutional buyers
See Notes to Financial Statements
31
<PAGE>
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK -- 90.8%
Aerospace & Military Technology -- 1.4%
United Technologies Corp. ................................ 15,000 $ 2,031,563
-----------
Apparel & Textiles -- 0.4%
Oakley, Inc.+............................................. 95,000 659,063
-----------
Automotive -- 3.2%
Daimler Chrysler AG....................................... 15,000 1,287,187
Ford Motor Co. ........................................... 40,000 2,270,000
General Motors Corp. ..................................... 12,000 1,042,500
-----------
4,599,687
-----------
Banks -- 4.8%
Bank of New York Co., Inc. ............................... 30,000 1,078,125
Chase Manhattan Corp. .................................... 35,000 2,845,937
Mellon Bank Corp. ........................................ 20,000 1,407,500
Summit Bancorp. .......................................... 40,000 1,560,000
-----------
6,891,562
-----------
Broadcasting & Media -- 6.4%
CBS Corp.+................................................ 40,000 1,637,500
Clear Channel Communications, Inc.+....................... 20,000 1,341,250
Comcast Corp., Class A+................................... 25,000 1,573,437
MediaOne Group, Inc. +.................................... 30,000 1,905,000
Time Warner, Inc. ........................................ 40,000 2,842,500
-----------
9,299,687
-----------
Chemicals -- 0.4%
du Pont (E.I.) de Nemours & Co. .......................... 10,000 580,625
-----------
Communication Equipment -- 1.1%
Nokia Corp., Class A ADR.................................. 10,000 1,598,100
-----------
Computers & Business Equipment -- 11.5%
Cisco Systems, Inc. +..................................... 30,000 3,286,875
Dell Computer Corp.+...................................... 60,000 2,452,500
EMC Corp.+................................................ 40,000 5,110,000
Hewlett-Packard Co. ...................................... 20,000 1,356,250
International Business Machines Corp. .................... 25,000 4,431,250
-----------
16,636,875
-----------
Conglomerate -- 3.9%
General Electric Co. ..................................... 40,000 4,425,000
Schlumberger Ltd. ........................................ 20,000 1,203,750
-----------
5,628,750
-----------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Department Stores -- 1.3%
Wal-Mart Stores, Inc. .................................... 20,000 $ 1,843,750
-----------
Electronics -- 5.5%
Intel Corp. .............................................. 30,000 3,573,750
Motorola, Inc. ........................................... 25,000 1,831,250
Texas Instruments, Inc. .................................. 25,000 2,481,250
-----------
7,886,250
-----------
Energy Services -- 0.5%
Halliburton Co. .......................................... 20,000 770,000
-----------
Energy Sources -- 3.2%
Chevron Corp. ............................................ 15,000 1,326,562
Mobil Corp. .............................................. 25,000 2,200,000
Royal Dutch Petroleum Co. ................................ 20,000 1,040,000
-----------
4,566,562
-----------
Entertainment Products -- 0.1%
Mattel, Inc. ............................................. 5,000 124,375
-----------
Financial Services -- 10.3%
American Express Co. ..................................... 25,000 2,937,500
Capital One Financial Corp. .............................. 20,000 3,020,000
Citigroup, Inc. .......................................... 45,000 2,874,375
Federal Home Loan Mortgage Corp. ......................... 20,000 1,142,500
Merrill Lynch & Co., Inc. ................................ 20,000 1,768,750
Morgan Stanley, Dean Witter & Co. ........................ 20,000 1,998,750
PaineWebber Group, Inc. .................................. 30,000 1,196,250
-----------
14,938,125
-----------
Food, Beverage & Tobacco -- 1.6%
Pepsi Bottling Group, Inc................................. 25,000 542,188
Philip Morris Cos., Inc. ................................. 50,000 1,759,375
-----------
2,301,563
-----------
Forest Products -- 0.8%
Georgia-Pacific Corp. .................................... 15,000 1,113,750
-----------
Household Products -- 1.6%
Warner-Lambert Co. ....................................... 35,000 2,316,563
-----------
Leisure & Tourism -- 1.3%
Carnival Corp., Class A .................................. 40,000 1,942,500
-----------
</TABLE>
32
<PAGE>
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK (continued)
Medical Products -- 4.5%
Amgen, Inc.+............................................. 35,000 $ 2,620,625
Genzyme Corp.+........................................... 15,000 756,563
Genzyme Molecular Oncology+.............................. 1 3
Johnson & Johnson Co. ................................... 33,000 3,091,687
------------
6,468,878
------------
Pharmaceuticals -- 7.4%
Biogen, Inc.+............................................ 12,500 1,428,906
Bristol-Myers Squibb Co. ................................ 20,000 1,286,250
Merck & Co., Inc. ....................................... 35,000 2,806,563
Pfizer, Inc. ............................................ 25,000 3,468,750
Schering-Plough Corp. ................................... 30,000 1,659,375
------------
10,649,844
------------
Software -- 5.5%
Microsoft Corp.+......................................... 60,000 5,377,500
Yahoo!, Inc. ............................................ 15,000 2,525,625
------------
7,903,125
------------
Specialty Retail -- 4.5%
Dayton Hudson Corp. ..................................... 20,000 1,332,500
Gap, Inc. ............................................... 45,000 3,029,062
Home Depot, Inc. ........................................ 35,000 2,178,750
------------
6,540,312
------------
Telecommunications -- 6.6%
AT&T Corp. .............................................. 42,500 3,392,031
Lucent Technologies, Inc. ............................... 20,000 2,155,000
MCI WorldCom, Inc.+...................................... 45,000 3,985,313
------------
9,532,344
------------
Transportation -- 0.7%
Burlington Northern Santa Fe Corp. ...................... 30,000 986,250
------------
Utilities -- 2.3%
Enron Corp. ............................................. 30,000 1,927,500
PECO Energy Co. ......................................... 30,000 1,387,500
------------
3,315,000
------------
Total Investment Securities -- 90.8%
(cost $88,941,572)....................................... 131,125,103
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
REPURCHASE AGREEMENT -- 10.2%
Joint Repurchase Agreement with State Street
Bank & Trust Co. (Note 2)
(cost $14,780,000)............................. $14,780 $ 14,780,000
------------
TOTAL INVESTMENTS --
(cost $103,721,572)............................ 101.0% 145,905,103
Liabilities in excess of other assets........... (1.0) (1,488,986)
------- ------------
NET ASSETS --................................... 100.0% $144,416,117
======= ============
</TABLE>
- ------
+ Non-income producing security
ADR ("American Depository Receipt")
See Notes to Financial Statements
33
<PAGE>
SunAmerica Mid-Cap Growth Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK -- 90.3%
Banks -- 3.1%
Compass Bancshares, Inc. ................................. 15,000 $ 517,500
Imperial Bancorp.......................................... 20,000 342,500
National Commerce Bancorp................................. 15,000 342,188
North Fork Bancorp., Inc. ................................ 40,000 845,000
-----------
2,047,188
-----------
Broadcasting & Media -- 8.7%
AT&T Corp.- Liberty Media Group+.......................... 20,000 1,052,500
Comcast Corp, Class A+.................................... 15,000 944,062
Outdoor Systems, Inc.+.................................... 25,000 750,000
SFX Entertainment, Inc., Class A+......................... 10,000 645,625
USA Networks, Inc.+....................................... 14,800 530,025
Ziff-Davis, Inc.+......................................... 80,000 1,720,000
-----------
5,642,212
-----------
Business Services -- 7.2%
CMG Information Services, Inc.+........................... 5,400 988,538
Corporate Executive Board Co.+............................ 1,000 26,375
Paychex, Inc. ............................................ 7,500 355,781
Professional Detailing, Inc.+............................. 20,000 523,750
USWeb Corp. +............................................. 40,000 1,650,000
Valley Media, Inc.+ ...................................... 50,000 1,137,500
-----------
4,681,944
-----------
Computers & Business Equipment-- 7.2%
EMC Corp.+................................................ 20,000 2,555,000
Micron Technology, Inc.+ ................................. 5,000 241,250
Network Appliance, Inc. +................................. 20,000 1,012,500
Quantum Corp.+............................................ 15,000 270,000
Seagate Technology, Inc.+................................. 20,000 591,250
-----------
4,670,000
-----------
Electronics -- 3.9%
Flextronics International Ltd.+........................... 10,000 510,000
Intel Corp. .............................................. 5,000 595,625
Lam Research Corp.+....................................... 15,000 435,000
MKS Instruments, Inc.+ ................................... 30,000 401,250
Raytheon Co., Class B..................................... 10,000 586,250
-----------
2,528,125
-----------
Energy Services -- 3.4%
Baker Hughes, Inc. ....................................... 30,000 729,375
Diamond Offshore Drilling, Inc. .......................... 10,000 316,250
Global Industries Ltd.+................................... 10,000 101,250
Halliburton Co. .......................................... 10,000 385,000
Niagara Mohawk Holdings, Inc. +........................... 30,000 403,125
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Energy Services (continued)
Weatherford International, Inc.+ ......................... 10,000 $ 261,250
-----------
2,196,250
-----------
Energy Sources -- 1.3%
Exxon Corp. .............................................. 5,000 352,813
Vastar Resources, Inc. ................................... 10,000 477,500
-----------
830,313
-----------
Financial Services -- 6.2%
Bear Stearns Cos., Inc. .................................. 10,500 469,219
Capital One Financial Corp. .............................. 5,000 755,000
Federal Home Loan Mortgage Corp. ......................... 10,000 571,250
GreenPoint Financial Corp. ............................... 20,000 695,000
Knight/Trimark Group, Inc. +.............................. 10,000 670,000
Lehman Brothers Holdings, Inc. ........................... 15,000 896,250
-----------
4,056,719
-----------
Health Services -- 0.5%
MedQuist, Inc. +.......................................... 10,000 300,000
-----------
Household Products -- 1.0%
Warner-Lambert Co. ....................................... 10,000 661,875
-----------
Insurance -- 1.2%
AFLAC, Inc. .............................................. 15,000 816,563
-----------
Leisure & Tourism -- 0.5%
Ticketmaster Online CitySearch + ......................... 10,800 363,150
-----------
Medical Products -- 5.7%
Amgen, Inc.+.............................................. 10,000 748,750
Bard (C.R.), Inc. ........................................ 10,000 504,375
Chiron Corp.+............................................. 15,000 329,062
Covance, Inc.+............................................ 10,000 250,625
Genzyme Molecular Oncology +.............................. 1 3
Genzyme Corp.+............................................ 15,000 756,562
Invitrogen Corp.+ ........................................ 20,300 261,363
Millenium Pharmaceuticals, Inc. .......................... 20,000 625,000
Zonagen, Inc.+............................................ 10,000 215,000
-----------
3,690,740
-----------
Pharmaceuticals -- 8.3%
American Home Products Corp. ............................. 11,000 717,750
Biogen, Inc.+............................................. 2,500 285,781
Gilead Sciences, Inc.+.................................... 15,000 682,500
Medicis Pharmaceutical Corp., Class A+.................... 10,000 300,000
Merck & Co., Inc. ........................................ 10,000 801,875
Pharmacia & Upjohn, Inc. ................................. 17,000 1,060,375
Schering-Plough Corp. .................................... 20,000 1,106,250
Watson Pharmaceuticals, Inc.+............................. 10,000 441,250
-----------
5,395,781
-----------
</TABLE>
34
<PAGE>
SunAmerica Mid-Cap Growth Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCK (continued)
Restaurants -- 0.8%
Darden Restaurants, Inc. .................................. 25,000 $ 515,625
------------
Software -- 18.0%
America Online, Inc. +..................................... 25,000 3,650,000
Catapult Communications Corp.+............................. 5,000 69,375
CheckFree Holdings Corp.+.................................. 10,000 425,625
Citrix Systems, Inc. +..................................... 20,000 762,500
Excite, Inc.+.............................................. 10,000 1,400,000
Intraware, Inc.+........................................... 5,000 200,312
Macromedia, Inc.+.......................................... 20,000 906,250
Microsoft Corp.+........................................... 20,000 1,792,500
Novell, Inc.+.............................................. 40,000 1,007,500
Siebel Systems, Inc.+...................................... 30,000 1,425,000
Spyglass, Inc.+............................................ 10,000 90,000
------------
11,729,062
------------
Specialty Retail -- 3.5%
Abercrombie & Fitch Co.+................................... 10,000 920,000
CVS Corp. ................................................. 15,000 712,500
Dayton Hudson Corp. ....................................... 10,000 666,250
RoweCom, Inc. +............................................ 100 4,362
------------
2,303,112
------------
Telecommunications -- 8.2%
AT&T Corp. ................................................ 15,514 1,238,211
CIENA Corp.+............................................... 20,000 450,000
EchoStar Communications Corp.,
Class A+.................................................. 15,000 1,224,375
Intermedia Communications, Inc.+........................... 25,000 665,625
MCI WorldCom, Inc.+........................................ 20,000 1,771,250
------------
5,349,461
------------
Transportation -- 0.5%
Airborne Freight Corp. .................................... 10,000 311,250
------------
Utilities -- 1.1%
Montana Power Co. ......................................... 10,000 735,625
------------
Total Investment Securities -- 90.3%
(cost $40,702,363)......................................... 58,824,995
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
REPURCHASE AGREEMENT -- 11.2%
Joint Repurchase Agreement with State Street
Bank & Trust Co. (Note 2)
(cost $7,285,000).............................. $ 7,285 $ 7,285,000
------------
TOTAL INVESTMENTS --
(cost $47,987,363)............................. 101.5% 66,109,995
Liabilities in excess of other assets........... (1.5) (973,369)
------- ------------
NET ASSETS --................................... 100.0% $ 65,136,626
======= ============
</TABLE>
- ------
+Non-income producing security
See Notes to Financial Statements
35
<PAGE>
SunAmerica Small Company Growth Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK -- 88.1%
Aerospace & Military Technology-- 0.9%
Heico Corp., Class A...................................... 98,500 $ 2,105,438
-----------
Apparel & Textiles -- 1.6%
Gerber Childrenswear, Inc.+............................... 50,900 321,306
Gucci Group NV+........................................... 29,300 2,358,650
Oakley, Inc.+............................................. 150,000 1,040,625
-----------
3,720,581
-----------
Automotive -- 0.2%
Autobytel.com, Inc.+...................................... 11,400 477,375
-----------
Banks -- 0.5%
Hamilton Bancorp, Inc.+................................... 47,000 1,216,125
-----------
Broadcasting & Media -- 8.1%
Cablevision Systems Corp, Class A+........................ 36,600 2,712,975
Cinar Films, Inc., Class B+............................... 108,400 2,493,200
Clear Channel Communications, Inc.+....................... 40,700 2,729,444
Comcast Corp, Class A+.................................... 36,200 2,278,337
Infinity Broadcasting Corp., Class A+..................... 23,500 605,125
Jacor Communications, Inc.+............................... 31,700 2,409,200
USA Networks, Inc.+....................................... 42,500 1,522,031
Ziff-Davis, Inc.+......................................... 22,800 820,800
Ziff-Davis, Inc.+......................................... 171,000 3,676,500
-----------
19,247,612
-----------
Business Services -- 14.2%
AnswerThink Consulting Group+............................. 85,000 2,380,000
Cambridge Technology Partners, Inc.+...................... 100,000 1,387,500
CMG Information Services, Inc.+........................... 15,000 2,745,937
DoubleClick, Inc.+........................................ 12,400 2,257,575
Entrust Technologies, Inc.+............................... 102,700 3,466,125
HA-LO Industries, Inc.+................................... 82,800 1,019,475
Mac-Gray Corp.+........................................... 97,000 891,188
META Group, Inc.+......................................... 37,800 581,175
Network Solutions, Inc.+.................................. 24,400 2,580,300
Paychex, Inc. ............................................ 26,000 1,233,375
RCM Technologies, Inc.+................................... 125,800 1,383,800
Snyder Communications, Inc.+.............................. 52,000 1,449,500
The Kroll-O'Gara Co.+..................................... 133,600 3,623,900
USWeb Corp.+.............................................. 105,000 4,331,250
VeriSign, Inc.+........................................... 22,200 3,418,800
VerticalNet, Inc.+ ....................................... 9,700 1,007,588
-----------
33,757,488
-----------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Communication Equipment -- 1.3%
At Home Corp., Series A+.................................. 16,600 $ 2,614,500
AVT Corp.+................................................ 25,000 596,875
-----------
3,211,375
-----------
Computers & Business Equipment-- 1.0%
Brightstar Information+................................... 25,000 96,875
Network Appliance, Inc.+.................................. 44,100 2,232,563
-----------
2,329,438
-----------
Education -- 2.1%
Caliber Learning Network, Inc.+........................... 23,600 94,400
Career Education Corp.+................................... 50,000 1,731,250
ITT Educational Services, Inc.+........................... 52,500 1,972,031
Sylvan Learning Systems, Inc.+............................ 49,000 1,341,375
-----------
5,139,056
-----------
Energy Services -- 6.4%
BJ Services Co.+.......................................... 122,000 2,859,375
Diamond Offshore Drilling, Inc. .......................... 68,400 2,163,150
Friede Goldman International, Inc.+....................... 90,100 1,441,600
Niagara Mohawk Holdings, Inc.............................. 100,000 1,343,750
Offshore Logistics, Inc. ................................. 124,500 1,447,313
Smith International, Inc.+................................ 70,800 2,832,000
Transocean Offshore, Inc. ................................ 40,400 1,164,025
Weatherford International, Inc.+.......................... 76,700 2,003,787
-----------
15,255,000
-----------
Financial Services -- 2.6%
Hibernia Corp., Class A................................... 44,000 577,500
Morgan Stanley, Dean Witter & Co. ........................ 27,500 2,748,281
Multex.com, Inc.+......................................... 29,700 1,856,250
Raymond James Financial, Inc. ............................ 57,100 1,127,725
-----------
6,309,756
-----------
Health Services -- 3.1%
Alternative Living Services, Inc.+........................ 115,000 2,300,000
HealthCare Financial Partners, Inc.+...................... 48,600 1,269,675
MedQuist, Inc.+........................................... 40,000 1,200,000
Sunrise Assisted Living, Inc.+............................ 59,000 2,688,188
-----------
7,457,863
-----------
Housing -- 1.2%
D.R. Horton, Inc. ........................................ 68,800 1,152,400
Mohawk Industries, Inc.+.................................. 46,600 1,398,000
Restoration Hardware, Inc.+............................... 13,300 292,600
-----------
2,843,000
-----------
</TABLE>
36
<PAGE>
SunAmerica Small Company Growth Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (continued)
Leisure & Tourism -- 2.0%
Penske Motorsports, Inc.+.................................. 24,500 $ 863,625
Steiner Leisure Ltd.+...................................... 48,600 1,494,450
Ticketmaster Online CitySearch+............................ 54,500 1,832,563
Travel Services International, Inc.+....................... 50,600 531,300
----------
4,721,938
----------
Medical Products -- 2.7%
Alkermes, Inc.+............................................ 71,500 1,948,375
Invitrogen Corp. +......................................... 97,900 1,260,463
MedImmune, Inc.+........................................... 53,400 3,160,612
----------
6,369,450
----------
Pharmaceuticals -- 1.4%
GelTex Pharmaceuticals, Inc.+.............................. 75,000 1,054,688
Sepracor, Inc.+............................................ 19,700 2,211,325
----------
3,266,013
----------
Pollution Control -- 0.6%
Allied Waste Industries, Inc.+............................. 99,000 1,429,313
----------
Restaurants -- 0.8%
Outback Steakhouse, Inc.+.................................. 60,000 1,965,000
----------
Software -- 20.1%
Allaire Corp.+............................................. 30,000 2,040,000
America Online, Inc.+...................................... 45,800 6,686,800
Beyond.com Corp.+.......................................... 39,000 1,044,881
BroadVision, Inc.+......................................... 64,000 3,824,000
Critical Path, Inc.+....................................... 15,900 1,224,300
Excite, Inc.+.............................................. 19,800 2,772,000
Fundtech Ltd.+............................................. 75,000 2,259,375
Infoseek Corp.+............................................ 24,900 1,842,600
Inktomi Corp.+............................................. 36,800 3,155,600
Legato Systems, Inc.+...................................... 49,900 2,576,087
Lycos, Inc.+............................................... 13,700 1,179,056
Macromedia, Inc.+.......................................... 25,100 1,137,344
Micromuse, Inc.+........................................... 76,100 3,500,600
NetGravity, Inc.+.......................................... 55,600 2,300,450
ONYX Software Corp.+....................................... 23,200 907,700
RealNetworks, Inc.+........................................ 19,000 2,321,562
Spyglass, Inc.+............................................ 100,000 900,000
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Software (continued)
Vignette Corp.+........................................... 33,000 $ 2,483,250
Yahoo!, Inc.+*............................................ 34,500 5,808,937
-----------
47,964,542
-----------
Specialty Retail -- 7.0%
Abercrombie & Fitch Co.+.................................. 48,600 4,471,200
Action Performance Cos., Inc.+............................ 124,500 3,750,563
Claire's Stores, Inc. .................................... 34,000 1,022,040
Home Depot, Inc. ......................................... 27,000 1,680,750
Krause's Furniture, Inc.+................................. 150,100 272,056
Movado Group, Inc. ....................................... 42,800 1,070,000
Priceline.com, Inc.+...................................... 1,500 124,313
Sotheby's Holdings, Inc. ................................. 62,100 2,010,487
Sunglass Hut International, Inc.+......................... 210,000 2,205,000
-----------
16,606,409
-----------
Telecommunications -- 8.1%
Covad Communications Group, Inc.+......................... 20,000 1,315,000
DSET Corp.+............................................... 243,500 2,830,687
EchoStar Communications Corp., Class A+................... 19,000 1,550,875
Frontier Corp. ........................................... 53,500 2,775,313
GST Telecommunications, Inc.+............................. 355,400 3,887,187
ICG Communications, Inc.+................................. 30,500 610,000
Intermedia Communications, Inc.+.......................... 70,800 1,885,050
Qwest Communications International, Inc.+................. 44,800 3,229,800
Saville Systems PLC ADR+.................................. 96,100 1,177,225
-----------
19,261,137
-----------
Telephone -- 1.0%
Century Telephone Enterprises, Inc. ...................... 35,100 2,465,775
-----------
Transportation -- 1.2%
Oshkosh Truck Corp. ...................................... 85,000 2,762,500
-----------
Total Common Stock
(cost $156,571,509)....................................... 209,882,184
-----------
</TABLE>
37
<PAGE>
SunAmerica Small Company Growth Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Contracts/
Principal
Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
- ---------------------------------------------------
OPTIONS -- 0.2%
Put Options -- 0.0%
America Online, Inc. exp. 4/99................... $ 456 $ 62,700
------------
Call Options -- 0.2%
Compaq Computer Corp. exp. 4/99.................. 1,607 150,656
Microsoft Corp. exp. 5/99........................ 230 365,125
Utility Index exp. 4/99.......................... 230 24,438
------------
540,219
------------
Total Options
(cost $1,216,449)................................ 602,919
------------
Total Investment Securities -- 88.3%
(cost $157,787,958).............................. 210,485,103
------------
REPURCHASE AGREEMENT -- 16.0%
Joint Repurchase Agreement with State Street Bank
& Trust Co. (Note 2) (cost $38,019,000)......... $38,019 38,019,000
------------
TOTAL INVESTMENTS --
(cost $195,806,958).............................. 104.3% 248,504,103
Total written call options........................ (0.3) (599,725)
Liabilities in excess of other assets............. (4.0) (9,744,143)
------- ------------
NET ASSETS --..................................... 100.0% $238,160,235
======= ============
</TABLE>
- ------
+ Non-income producing security
* The security or a portion thereof has been segregated as collateral for
the written option contracts.
ADR ("American Depository Receipt")
Open Covered Written Call Options
<TABLE>
<CAPTION>
Expiration Strike
Call Options Contracts Date Price Value
------------ --------- ---------- ------ --------
<S> <C> <C> <C> <C>
Yahoo!, Inc................................ 298 4/99 $155 $599,725
--------
Total Open Covered Written Call Options
(proceeds $497,178)................................................... $599,725
========
</TABLE>
See Notes to Financial Statements
38
<PAGE>
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -----------------------------------------------------------------------------
COMMON STOCK -- 92.1%
Automotive -- 2.3%
DaimlerChrysler AG...................................... 15,000 $ 1,287,188
Ford Motor Co. ......................................... 40,000 2,270,000
General Motors Corp. ................................... 12,000 1,042,500
-----------
4,599,688
-----------
Banks -- 4.3%
Bank of New York Co., Inc. ............................. 30,000 1,078,125
Chase Manhattan Corp. .................................. 32,000 2,602,000
First Union Corp. ...................................... 35,000 1,870,312
Mellon Bank Corp. ...................................... 25,000 1,759,375
Summit Bancorp.......................................... 30,000 1,170,000
-----------
8,479,812
-----------
Broadcasting & Media -- 6.1%
CBS Corp.+.............................................. 45,300 1,854,469
Clear Channel Communications, Inc.+..................... 25,000 1,676,562
Comcast Corp, Class A+.................................. 30,000 1,888,125
MediaOne Group, Inc.+................................... 50,000 3,175,000
Time Warner, Inc. ...................................... 50,000 3,553,125
-----------
12,147,281
-----------
Chemicals -- 0.6%
du Pont (E.I.) de Nemours & Co. ........................ 20,000 1,161,250
-----------
Computers & Business Equipment -- 10.0%
Cisco Systems, Inc.+.................................... 30,000 3,286,875
Dell Computer Corp.+.................................... 70,000 2,861,250
EMC Corp.+.............................................. 50,000 6,387,500
Hewlett-Packard Co. .................................... 23,500 1,593,594
Honeywell, Inc. ........................................ 15,000 1,137,187
International Business Machines
Corp. ................................................. 25,000 4,431,250
-----------
19,697,656
-----------
Conglomerate -- 4.8%
General Electric Co. ................................... 55,000 6,084,375
Schlumberger Ltd. ...................................... 20,000 1,203,750
Tyco International Ltd. ................................ 30,000 2,152,500
-----------
9,440,625
-----------
Department Stores -- 1.4%
Wal-Mart Stores, Inc. .................................. 30,000 2,765,625
-----------
Electronics -- 4.6%
Intel Corp. ............................................ 30,000 3,573,750
Motorola, Inc. ......................................... 35,000 2,563,750
Texas Instruments, Inc. ................................ 30,000 2,977,500
-----------
9,115,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Energy Services -- 0.4%
Halliburton Co. .......................................... 20,500 $ 789,250
-----------
Energy Sources -- 3.8%
Chevron Corp. ............................................ 15,000 1,326,563
Exxon Corp. .............................................. 27,000 1,905,187
Mobil Corp. .............................................. 30,000 2,640,000
Royal Dutch Petroleum Co.................................. 30,000 1,560,000
-----------
7,431,750
-----------
Entertainment Products -- 0.4%
Mattel, Inc. ............................................. 35,000 870,625
-----------
Financial Services -- 11.8%
American Express Co. ..................................... 35,000 4,112,500
Associates First Capital Corp., Class A................... 30,000 1,350,000
Capital One Financial Corp. .............................. 20,000 3,020,000
Citigroup, Inc. .......................................... 53,700 3,430,087
Federal Home Loan Mortgage Corp. ......................... 30,000 1,713,750
Federal National Mortgage Association..................... 35,000 2,423,750
Household International, Inc. ............................ 45,000 2,053,125
Merrill Lynch & Co., Inc. ................................ 25,000 2,210,938
Morgan Stanley, Dean Witter & Co. ........................ 30,000 2,998,125
-----------
23,312,275
-----------
Food, Beverage & Tobacco -- 3.1%
Anheuser-Busch Cos., Inc. ................................ 40,000 3,047,500
Pepsi Bottling Group, Inc. ............................... 26,000 563,875
Philip Morris Cos, Inc. .................................. 70,000 2,463,125
-----------
6,074,500
-----------
Forest Products -- 0.8%
Georgia-Pacific Corp. .................................... 20,000 1,485,000
-----------
Household Products -- 1.3%
Warner-Lambert Co. ....................................... 40,000 2,647,500
-----------
Insurance -- 0.6%
The Hartford Financial Services
Group, Inc. ............................................. 20,000 1,136,250
-----------
Leisure & Tourism -- 1.0%
Carnival Corp, Class A.................................... 40,000 1,942,500
-----------
Medical Products -- 4.9%
Amgen, Inc.+.............................................. 45,000 3,369,375
Bard (C.R.), Inc. ........................................ 30,000 1,513,125
Genzyme Corp.+............................................ 15,000 756,562
Genzyme Molecular Oncology+............................... 1 3
Johnson & Johnson Co. .................................... 44,000 4,122,250
-----------
9,761,315
-----------
</TABLE>
39
<PAGE>
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK (continued)
Metals & Mining -- 0.7%
Martin Marietta Materials, Inc. ......................... 25,000 $ 1,426,563
------------
Pharmaceuticals -- 10.3%
Abbott Laboratories, Inc.+............................... 45,000 2,106,563
American Home Products Corp. ............................ 40,000 2,610,000
Biogen, Inc.+............................................ 20,000 2,286,250
Bristol-Myers Squibb Co. ................................ 20,000 1,286,250
Merck & Co., Inc. ....................................... 40,000 3,207,500
Pfizer, Inc. ............................................ 33,400 4,634,250
Pharmacia & Upjohn, Inc. ................................ 42,300 2,638,462
Schering-Plough Corp. ................................... 30,000 1,659,375
------------
20,428,650
------------
Restaurants -- 1.6%
McDonald's Corp. ........................................ 70,000 3,171,875
------------
Software -- 3.6%
Microsoft Corp.+......................................... 80,000 7,170,000
------------
Specialty Retail -- 3.3%
Dayton Hudson Corp. ..................................... 15,000 999,375
Gap, Inc. ............................................... 45,000 3,029,063
Home Depot, Inc. ........................................ 40,000 2,490,000
------------
6,518,438
------------
Telecommunications -- 6.7%
AT&T Corp. .............................................. 42,500 3,392,031
GTE Corp. ............................................... 30,000 1,815,000
Lucent Technologies, Inc. ............................... 20,000 2,155,000
MCI WorldCom, Inc.+...................................... 50,000 4,428,125
SBC Communications, Inc. ................................ 30,000 1,413,750
------------
13,203,906
------------
Transportation -- 0.6%
Burlington Northern, Inc. ............................... 39,000 1,282,125
------------
Utilities -- 3.1%
Energy East Corp. ....................................... 25,000 1,314,063
Enron Corp. ............................................. 45,000 2,891,250
PECO Energy Co. ......................................... 40,000 1,850,000
------------
6,055,313
------------
Total Common Stock
(cost $134,362,840)...................................... 182,114,772
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
U.S. TREASURY BONDS -- 1.8%
5.25% due 2/15/29
(cost $3,548,416).............................. $ 3,750 $ 3,544,912
------------
Total Investment Securities -- 93.9%
(cost $137,911,256)............................. 185,659,684
------------
REPURCHASE AGREEMENT -- 5.1%
Joint Repurchase Agreement with
State Street Bank & Trust Co.
(Note 2)
(cost $10,123,000).............................. 10,123 10,123,000
------------
TOTAL INVESTMENTS --
(cost $148,034,256)............................. 99.0% 195,782,684
Other assets less liabilities.................... 1.0 2,069,950
------- ------------
NET ASSETS --.................................... 100.0% $197,852,634
======= ============
</TABLE>
- ------
+ Non-income producing security
See Notes to Financial Statements
40
<PAGE>
SunAmerica "Dogs" of Wall Street Fund
PORTFOLIO OF INVESTMENTS -- March 31, 1999 (unaudited)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK -- 99.6%
Automotive -- 14.3%
Cooper Tire & Rubber Co. ................................ 250,645 $ 4,605,602
General Motors Corp. .................................... 68,078 5,914,276
Genuine Parts Co. ....................................... 150,192 4,327,407
Goodyear Tire & Rubber Co. .............................. 98,818 4,922,372
------------
19,769,657
------------
Business Services -- 3.0%
Bemis Co., Inc. ......................................... 133,758 4,154,858
------------
Chemicals -- 10.1%
Air Products & Chemicals, Inc. .......................... 129,191 4,424,792
du Pont (E.I.) de Nemours & Co. ......................... 89,573 5,200,832
Nalco Chemical Co. ...................................... 166,568 4,424,463
------------
14,050,087
------------
Conglomerate -- 3.3%
National Service Industries, Inc. ....................... 134,438 4,579,294
------------
Department Stores -- 3.5%
May Department Stores Co. ............................... 123,498 4,831,840
------------
Electronics -- 3.1%
Emerson Electric Co. .................................... 80,741 4,274,227
------------
Energy Sources -- 7.6%
Chevron Corp. ........................................... 58,979 5,215,955
Royal Dutch Petroleum Co................................. 102,385 5,324,020
------------
10,539,975
------------
Entertainment Products -- 3.2%
Eastman Kodak Co. ....................................... 69,084 4,412,740
------------
Financial Services -- 4.1%
J.P. Morgan & Co., Inc. ................................. 46,297 5,711,892
------------
Food, Beverage & Tobacco -- 20.5%
Bestfoods................................................ 91,217 4,287,199
ConAgra, Inc. ........................................... 155,182 3,966,840
H.J. Heinz & Co. ........................................ 87,310 4,136,311
Kellogg Co. ............................................. 145,517 4,920,294
Philip Morris Cos., Inc. ................................ 91,113 3,206,039
UST, Inc. ............................................... 144,722 3,780,862
Winn Dixie Stores, Inc. ................................. 110,195 4,118,538
------------
28,416,083
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Forest Products -- 3.5%
International Paper Co. ................................ 113,505 $ 4,788,492
------------
Household Products -- 3.1%
International Flavors & Fragrances, Inc. ............... 113,016 4,245,163
------------
Housing -- 4.1%
Newell Rubbermaid, Inc. ................................ 120,874 5,741,515
------------
Machinery -- 3.6%
Caterpillar, Inc. ...................................... 108,689 4,992,901
------------
Metals & Mining -- 3.5%
Minnesota Mining & Manufacturing Co. ................... 67,849 4,800,317
------------
Specialty Retail -- 2.3%
American Greetings Corp., Class A....................... 123,950 3,145,231
------------
Telecommunications -- 3.7%
Alltel Corp. ........................................... 83,105 5,183,674
------------
Transportation -- 3.1%
Norfolk Southern Corp. ................................. 160,188 4,224,959
------------
Total Investment Securities -- 99.6%
(cost $148,625,648)..................................... 137,862,905
------------
TOTAL INVESTMENTS --
(cost $148,625,648)..................................... 99.6% 137,862,905
Other assets less liabilities............................ 0.4 547,614
------- ------------
NET ASSETS --............................................ 100.0% $138,410,519
======= ============
</TABLE>
See Notes to Financial Statements
41
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited)
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 Growth and
Income Fund ("Growth and Income Fund") and SunAmerica "Dogs" of Wall Street
Fund (" "Dogs" of Wall Street 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 conservation of principal and capital appreciation by
maintaining 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.
Growth and Income seeks capital appreciation and current income by investing
primarily in common stocks.
"Dogs" of Wall Street seeks total return (including capital appreciation and
current income) through a passively managed strategy involving the annual
selection of thirty high dividend yielding common stocks from the Dow Jones
Industrial Average and the broader market.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statement of Assets and Liabilities. The cost structure
for each class is as follows:
Class A shares-- Offered at net asset value per share plus an initial
sales charge. 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-- Offered at net asset value per share without an initial
sales charge, although a declining contingent deferred
sales charge may be imposed on redemptions made within
six years of purchase. Class B shares will convert
automatically to Class A shares on the first business day
of the month after seven years from the issuance of such
shares and at such time will be subject to the lower
distribution fee applicable to Class A shares.
Class II shares-- Offered at net asset value per share plus an initial
sales charge. Certain redemptions made within the first
18 months of the date of purchase are subject to a
contingent deferred sales charge.
42
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
Class Z shares-- Offered at net asset value per share exclusively for sale
to employees participating in the SunAmerica profit
sharing and retirement plan.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions. Class A, Class B and Class II shares each make
distribution and account maintenance and service fee payments under the
distribution plans pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Act"), except that Class B and Class II shares are subject to
higher distribution fee rates. There are no distribution or service fee
payments applicable to Class Z.
Note 2. Significant Accounting Policies
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.
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 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. 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
43
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
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.
As of March 31, 1999, Balanced Assets Fund, Blue Chip Growth Fund, Mid-Cap
Growth Fund, Small Company Growth Fund and Growth and Income Fund had a
3.7%, 6.1%, 3.0%, 15.8%, and 4.2% undivided interest, respectively, which
represented $8,906,000, $14,780,000, $7,285,000, $38,019,000 and
$10,123,000, respectively, in principal amount in a joint repurchase
agreement with State Street Bank & Trust Co. As of such date, the repurchase
agreement in the joint account and the collateral therefor were as follows:
State Street Bank & Trust Co. Repurchase Agreement 4.82% dated 3/31/99, in
the principal amount of $240,396,000 repurchase price $240,428,186 due
4/01/99 collateralized by $34,340,00 U.S. Treasury Bonds 7.50% due 11/15/16,
$17,710,000 U.S. Treasury Bonds 12.75% due 11/15/10, $24,910,000 U.S.
Treasury Note 5.50% due 5/31/00, $49,820,000 U.S. Treasury Note 5.63% due
11/30/99, $50,000,000 U.S. Treasury Note 6.00% due 8/15/000, $49,760,000
U.S. Treasury Note 6.34% due 5/15/99, approximate aggregate collateral value
$245,219,238.
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: As customary in the mutual fund industry,
securities transactions are recorded on a trade date basis. 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 they invest. Such taxes
are generally based on either income or gains earned or repatriated. The
Equity Funds, except for the Growth and Income Fund, do not amortize
premiums or accrete 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).
Expenses common to all Funds, not directly related to individual Funds, are
allocated among the Equity Funds based upon their relative net asset value
or other appropriate methods.
The Funds issue and redeem their shares, invest in securities and distribute
dividends from net investment income and net realized gains which are paid
in cash or are reinvested at the discretion of shareholders. These
activities are reported in the Statement of Changes in Net Assets.
Dividends from net investment income, if any, are paid annually, except for
Balanced Assets Fund and Growth and Income Fund, which pay quarterly.
Capital gain distributions, if any, are paid at least annually.
44
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
The Funds record dividends and distributions to their shareholders on the
ex-dividend date. The amount of dividends and distributions from net
investment income and net realized capital gains are determined and
presented in accordance with federal income tax regulations, which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net
investment income/loss, net realized gain/loss, and net assets are not
affected.
For the fiscal year ended September 30, 1998, the following
reclassifications arising from book/tax differences were primarily the
result of reclassifications due to net operating losses.
<TABLE>
<CAPTION>
Accumulated Accumulated
Undistributed Undistributed Paid
Net Realized Net Investment In
Gain/Loss Income/Loss Capital
------------- -------------- --------
<S> <C> <C> <C>
Balanced Assets Fund................. $ (56,125) $ 56,125 $ --
Blue Chip Growth Fund................ (479,700) 479,700 --
Mid-Cap Growth Fund.................. (489,325) 491,476 (2,151)
Small Company Growth Fund............ (2,505,817) 2,512,573 (6,756)
Growth and Income Fund............... (298,630) 307,625 (8,995)
"Dogs" of Wall Street Fund........... -- 58,358 (58,358)
</TABLE>
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies 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 Funds do 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 Funds do
not isolate the effect of changes in foreign exchange rates from the changes
in the market prices of portfolio securities sold during the year.
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.
Options: An option is a contract conveying a right to buy or sell a
financial instrument at a specified price during a stipulated period. 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
45
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
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 options 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
of the security which the Fund purchased upon exercise of the option.
During the six months ended March 31, 1999, transactions in written option
contracts were as follows:
<TABLE>
<CAPTION>
Small Company
Growth Fund
---------------------
Contracts Amount
--------- -----------
<S> <C> <C>
Written option contracts as of 9/30/98............. (902) $ (649,698)
Options written during the period.................. (1,835) (2,889,713)
Written options assigned during the period......... 322 160,029
Written options closed during the period........... 2,117 1,988,181
Net realized gain on written options closed........ -- 894,023
------ -----------
Written option contracts as of 3/31/99............. (298) $ (497,178)
====== ===========
</TABLE>
Organizational Expenses: Expenses incurred by SAAMCo in connection with the
organization of new Funds or new classes of shares are being amortized on a
straight line basis by the Fund over a period not to exceed 60 months from
the date the Fund commenced operations.
Note 3. 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. 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 Funds' 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 paid
to SAAMCo with respect to each 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, except for the
"Dogs" of Wall Street Fund, which pays at an annual rate of .35% of the
Fund's average daily net assets. For the six months ended March 31, 1999,
SAAMCo earned fees in the amounts stated on the Statement of Operations.
46
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
For the six months ended March 31, 1999, SAAMCo has agreed to reimburse
expenses as follows:
<TABLE>
<S> <C>
Balanced Assets Class II................................. $ 1,134
Blue Chip Growth Class II ............................... 26
Mid-Cap Growth Class II.................................. 6
Small Company Growth Class II............................ 12,402
Small Company Growth Class Z............................. 19,367
Growth and Income Class II............................... 18,536
Growth and Income Class Z................................ 20,960
"Dogs" of Wall Street Class A............................ 41,480
"Dogs" of Wall Street Class B............................ 65,312
"Dogs" of Wall Street Class II........................... 76,603
</TABLE>
The Trust, on behalf of each Fund, has a Distribution Agreement with
SunAmerica Capital Services, Inc. ("SACS"). 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 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", "Class B Plan" and "Class II Plan". In adopting the
Distribution Plans, 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, Class B Plan and Class II Plan, the Distributor
receives payments from a Fund at an annual rate of up to 0.10%, 0.75% and
0.75%, respectively, of average daily net assets of such Fund's Class 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 each Class' 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 six months ended March
31, 1999, SACS received fees (see Statement of Operations) based upon the
aforementioned rates.
SACS receives sales charges on each Fund's Class A and Class II 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
47
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
of each Fund's Class B and Class II shares. SACS has advised the Funds that
for the six months ended March 31, 1999 the proceeds received from sales
(and paid out to affiliated and non-affiliated broker-dealers) and
redemptions are as follows:
<TABLE>
<CAPTION>
Class A Class B
-------------------------------------- -------------
Contingent
Sales Affiliated Non-affiliated Deferred
Charges Broker-dealers Broker-dealers Sales Charges
-------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Balanced Assets Fund.... $726,486 $548,181 $ 86,094 $ 75,280
Blue Chip Growth Fund... 132,506 58,449 57,001 37,481
Mid-Cap Growth Fund..... 32,344 19,639 9,004 4,627
Small Company Growth
Fund................... 155,709 90,644 43,371 139,221
Growth and Income Fund.. 337,027 181,409 111,389 107,449
"Dogs" of Wall Street
Fund................... 849,068 91,624 655,411 48,783
<CAPTION>
Class II Class II
-------------------------------------- -------------
Contingent
Sales Affiliated Non-affiliated Deferred
Charges Broker-dealers Broker-dealers Sales Charges
-------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Balanced Assets Fund.... $ 5,406 $ 5,406 $ -- $ --
Blue Chip Growth Fund... 346 346 -- --
Mid-Cap Growth Fund..... 214 214 -- --
Small Company Growth
Fund................... 4,765 2,661 2,104 20
Growth and Income Fund.. 22,255 9,717 12,538 1,291
"Dogs" of Wall Street
Fund................... 880,870 205,747 675,123 17,777
</TABLE>
The Trust has entered into a Service Agreement with SunAmerica Fund
Services, Inc. ("SAFS"). 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, which permits the Funds to compensate SAFS for
services rendered based upon an annual rate of 0.22% of average daily net
assets, is approved annually by the Trustees. For the six months ended March
31, 1999, the Funds incurred the following expenses which are included in
transfer agent fees in the Statement of Operations to compensate SAFS
pursuant to the terms of the Service Agreement.
<TABLE>
<CAPTION>
Payable at
Expense March 31, 1999
-------------------------- ------------------------
Class A Class B Class II Class A Class B Class II
-------- -------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Balanced Assets Fund.... $237,249 $195,208 $ 110 $44,586 $34,869 $ 86
Blue Chip Growth Fund... 94,631 46,047 40 17,994 8,609 24
Mid-Cap Growth Fund..... 49,202 13,542 35 9,335 2,359 20
Small Company Growth
Fund................... 143,935 82,921 313 27,335 14,667 104
Growth and Income Fund.. 75,226 105,346 2,458 14,652 20,724 636
"Dogs" of Wall Street
Fund................... 26,875 40,786 51,297 5,083 8,740 12,134
</TABLE>
48
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
Note 4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the six months ended March 31, 1999 were as follows:
<TABLE>
<CAPTION>
Balanced Blue Chip Mid-Cap Small Company Growth and "Dogs" of
Assets Growth Growth Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
------------ ----------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Purchases (excluding
U.S. government
securities)............ $104,809,403 $56,308,056 $76,388,823 $208,355,991 $65,649,769 $129,868,009
Sales (excluding U.S.
government securities). 99,654,996 60,605,985 85,501,414 216,923,602 81,485,769 44,874,262
Purchases of U.S.
government securities.. 92,111,702 1,178,583 585,435 -- -- --
Sales of U.S. government
securities............. 75,988,337 -- -- -- 3,548,242 --
</TABLE>
Note 5. Portfolio Securities
Each Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute all of its
taxable income, including any net realized gain on investments, to its
shareholders. Therefore, no federal tax provision is required.
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for book purposes, including short-term securities, were as
follows:
<TABLE>
<CAPTION>
Balanced Blue Chip Mid-Cap Small Company Growth and "Dogs" of
Assets Growth Growth Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
------------ ------------ ----------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Cost.................... $321,363,319 $103,721,572 $47,987,363 $195,806,958 $148,034,256 $148,625,648
============ ============ =========== ============ ============ ============
Appreciation............ $105,319,643 $ 43,207,092 $19,184,675 $ 63,813,263 $ 48,712,620 $ 4,148,032
Depreciation............ (3,184,563) (1,023,561) (1,062,043) (11,116,118) (964,192) (14,910,775)
------------ ------------ ----------- ------------ ------------ ------------
Net unrealized
appreciation
(depreciation)......... $102,135,080 $ 42,183,531 $18,122,632 $ 52,697,145 $ 47,748,428 $(10,762,743)
============ ============ =========== ============ ============ ============
</TABLE>
49
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
Note 6. Capital Share Transactions
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
six months ended For the six months ended For the
March 31, 1999 year ended March 31, 1999 year ended
(unaudited) September 30, 1998 (unaudited) September 30, 1998
---------------------------- ------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------------- -------------- ---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,928,252 $ 37,290,441 2,254,719 $ 41,748,177 1,285,660 $ 24,863,975 1,661,113 $ 30,769,547
Reinvested
dividends...... 893,996 16,429,699 1,076,384 18,447,868 718,863 13,165,117 1,020,631 17,400,232
Shares redeemed. (1,340,109) (25,912,830) (1,961,244) (36,288,098) (2,030,957) (39,262,861) (2,853,943) (52,660,559)
------------ -------------- ---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease)..... 1,482,139 $ 27,807,310 1,369,859 $ 23,907,947 (26,434) $ (1,233,769) (172,199) $ (4,490,780)
============ ============== ========== ============ ========== ============ ========== ============
<CAPTION>
Balanced Assets Fund
----------------------------
Class II
----------------------------
For the period
February 2, 1999* through
March 31, 1999 (unaudited)
--------------------------
Shares Amount
------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 37,195 $ 742,696
Reinvested
dividends...... 29 596
Shares redeemed. (15) (413)
------------ --------------
Net increase.... 37,209 $ 742,879
============ ==============
</TABLE>
* Inception of the class
50
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Blue Chip Growth Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
------------------------------------------------------ ------------------------------------------------
For the For the
six months ended For the six months ended For the
March 31, 1999 year ended March 31, 1999 year ended
(unaudited) September 30, 1998 (unaudited) September 30, 1998
---------------------------- ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------------------------- ---------- ------------ -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 582,883 $ 12,428,695 735,069 $ 14,494,612 553,542 $ 11,309,735 845,608 $ 16,159,070
Reinvested
dividends...... 280,738 5,589,485 464,861 8,130,414 143,947 2,734,989 270,094 4,553,792
Shares redeemed. (542,219) (11,536,894) (656,032) (13,020,484) (615,053) (12,548,199) (1,011,200) (19,292,333)
----------- --------------- ---------- ------------ -------- ------------ ---------- ------------
Net increase.... 321,402 $ 6,481,286 543,898 $ 9,604,542 82,436 $ 1,496,525 104,502 $ 1,420,529
=========== =============== ========== ============ ======== ============ ========== ============
<CAPTION>
Blue Chip Growth Fund
----------------------------
Class II
----------------------------
For the period
February 2, 1999* through
March 31, 1999 (unaudited)
----------------------------
Shares Amount
----------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 6,815 $ 148,448
Reinvested
dividends...... -- --
Shares redeemed. (74) (1,543)
----------- ---------------
Net increase.... 6,741 $ 146,905
=========== ===============
<CAPTION>
Mid-Cap Growth Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
------------------------------------------------------ ------------------------------------------------
For the For the
six months ended For the six months ended For the
March 31, 1999 year ended March 31, 1999 year ended
(unaudited) September 30, 1998 (unaudited) September 30, 1998
---------------------------- ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------------------------- ---------- ------------ -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 174,234 $ 3,305,868 1,824,307 $ 32,027,068 213,669 $ 3,781,218 141,012 $ 2,392,690
Reinvested
dividends...... 160,377 2,716,783 463,048 7,413,406 50,619 816,509 141,127 2,175,071
Shares redeemed. (277,847) (5,143,220) (2,146,098) (38,180,050) (268,667) (4,812,918) (322,783) (5,561,595)
----------- --------------- ---------- ------------ -------- ------------ ---------- ------------
Net increase
(decrease)..... 56,764 $ 879,431 141,257 $ 1,260,424 (4,379) $ (215,191) (40,644) $ (993,834)
=========== =============== ========== ============ ======== ============ ========== ============
<CAPTION>
Mid-Cap Growth Fund
----------------------------
Class II
----------------------------
For the Period
February 2, 1999* through
March 31, 1999 (unaudited)
----------------------------
Shares Amount
----------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 6,206 $ 122,764
Reinvested
dividends...... -- --
Shares redeemed. -- --
----------- ---------------
Net increase.... 6,206 $ 122,764
=========== ===============
</TABLE>
* Inception of the class
51
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
Small Company Growth Fund
---------------------------------------------------------------------------------------------------------
Class A Class B
----------------------------------------------------- --------------------------------------------------
For the For the
six months ended For the six months ended For the
March 31, 1999 year ended March 31, 1999 year ended
(unaudited) September 30, 1998 (unaudited) September 30, 1998
------------------------- -------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 5,770,653 $ 134,184,616 8,331,031 $ 192,281,985 913,099 $ 19,323,085 1,709,037 $ 38,946,749
Reinvested
dividends...... 356,879 7,419,565 667,493 14,571,367 233,735 4,648,997 459,359 9,686,009
Shares redeemed. (6,116,669) (144,610,409) (10,040,494) (233,026,673) (1,312,039) (29,296,738) (3,358,273) (75,980,708)
---------- ------------- ----------- ------------- ---------- ------------ ---------- ------------
Net increase
(decrease)..... 10,863 $ (3,006,228) (1,041,970) $ (26,173,321) (165,205) $ (5,324,656) (1,189,877) $(27,347,950)
========== ============= =========== ============= ========== ============ ========== ============
<CAPTION>
Small Company Growth Fund
---------------------------------------------------------------------------------------------------------
Class II Class Z
----------------------------------------------------- --------------------------------------------------
For the For the
six months ended For the period six months ended For the
March 31, 1999 February 2, 1998* through March 31, 1999 year ended
(unaudited) September 30, 1998 (unaudited) September 30, 1998
------------------------- -------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 55,180 $ 1,354,570 9,190 $ 203,790 8,201 $ 189,679 27,354 $ 655,620
Reinvested
dividends...... 702 13,966 -- -- 2,048 43,230 4,828 106,220
Shares redeemed. (39,059) (952,839) (2) (40) (5,070) (118,556) (36,314) (803,485)
---------- ------------- ----------- ------------- ---------- ------------ ---------- ------------
Net increase (decrease). 16,823 $ 415,697 9,188 $ 203,750 5,179 $ 114,353 (4,132) $ (41,645)
========== ============= =========== ============= ========== ============ ========== ============
<CAPTION>
Growth and Income Fund
---------------------------------------------------------------------------------------------------------
Class A Class B
----------------------------------------------------- --------------------------------------------------
For the For the
six months ended For the six months ended For the
March 31, 1999 year ended March 31, 1999 year ended
(unaudited) September 30, 1998 (unaudited) September 30, 1998
------------------------- -------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 896,734 $ 13,414,152 1,912,402 $ 25,967,840 1,591,823 $ 23,514,551 3,176,130 $ 42,351,160
Reinvested
dividends...... 144,275 2,042,901 403,557 5,004,107 201,016 2,802,174 459,379 5,645,769
Shares redeemed. (572,387) (8,364,300) (1,363,478) (18,739,155) (906,048) (13,067,292) (1,533,431) (20,501,966)
---------- ------------- ----------- ------------- ---------- ------------ ---------- ------------
Net increase.... 468,622 $ 7,092,753 952,481 $ 12,232,792 886,791 $ 13,249,433 2,102,078 $ 27,494,963
========== ============= =========== ============= ========== ============ ========== ============
<CAPTION>
Growth and Income Fund
---------------------------------------------------------------------------------------------------------
Class II Class Z
----------------------------------------------------- --------------------------------------------------
For the For the
six months ended For the period six months ended For the period
March 31, 1999 February 2, 1998* through March 31, 1999 April 15, 1998* through
(unaudited) September 30, 1998 (unaudited) September 30, 1998
------------------------- -------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 194,402 $ 2,844,299 95,450 $ 1,274,778 2,713 $ 40,204 7,288 $ 101,080
Reinvested
dividends...... 4,148 57,768 -- -- 272 3,871 -- --
Shares redeemed. (20,987) (316,935) (19,042) (252,084) (329) (5,093) (12) (154)
---------- ------------- ----------- ------------- ---------- ------------ ---------- ------------
Net increase.... 177,563 $ 2,585,132 76,408 $ 1,022,694 2,656 $ 38,982 7,276 $ 100,926
========== ============= =========== ============= ========== ============ ========== ============
</TABLE>
* Inception of the class
52
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
<TABLE>
<CAPTION>
"Dogs" of Wall Street Fund
------------------------------------------------------------------------------------------------
Class A Class B
------------------------------------------------ ----------------------------------------------
For the For the
six months ended For the period six months ended For the period
March 31, 1999 June 8, 1998* through March 31, 1999 June 8, 1998* through
(unaudited) September 30, 1998 (unaudited) September 30, 1998
---------------------- ------------------------ ---------------------- ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
--------- ----------- ---------- ------------ --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold............. 1,318,414 $15,820,881 3,596,931 $ 43,876,855 2,576,852 $30,851,720 1,811,906 $21,338,291
Reinvested dividends.... 18,802 224,876 -- -- 16,481 197,112 -- --
Shares redeemed......... (543,850) (6,485,568) (2,089,355) (25,427,269) (328,848) (3,903,079) (23,537) (272,423)
--------- ----------- ---------- ------------ --------- ----------- --------- -----------
Net increase............ 793,366 $ 9,560,189 1,507,576 $ 18,449,586 2,264,485 $27,145,753 1,788,369 $21,065,868
========= =========== ========== ============ ========= =========== ========= ===========
<CAPTION>
"Dogs" of Wall Street Fund
------------------------------------------------
Class II
------------------------------------------------
For the
six months ended For the period
March 31, 1999 June 8, 1998* through
(unaudited) September 30, 1998
---------------------- ------------------------
Shares Amount Shares Amount
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold............. 4,246,907 $50,799,897 1,874,062 $ 21,947,206
Reinvested dividends.... 23,624 282,539 -- --
Shares redeemed......... (302,632) (3,591,768) (51,153) (602,698)
--------- ----------- ---------- ------------
Net increase............ 3,967,899 $47,490,668 1,822,909 $ 21,344,508
========= =========== ========== ============
</TABLE>
* Inception of the class
Note 7. Commitments and Contingencies
The SunAmerica family of mutual funds may borrow up to $100,000,000 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 8. 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
53
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- March 31, 1999 (unaudited) -- (continued)
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 March
31, 1999, Balanced Assets Fund, Blue Chip Growth Fund, Mid-Cap Growth Fund,
Small Company Growth Fund, Growth and Income Fund and "Dogs" of Wall Street
Fund had accrued $47,295, $14,332, $7,894, $32,299, $8,247 and $1,194,
respectively, for the Retirement Plan, which is included in accrued expenses
on the Statement of Assets and Liabilities, and for the six months ended
March 31, 1999 expensed $6,211, $1,923, $944, $3,934, $2,293 and $1,194,
respectively, for the Retirement Plan, which is included in Trustees' fees
and expenses on the Statement of Operations.
54
<PAGE>
SunAmerica Equity Funds
SHAREHOLDER INFORMATION (unaudited)
Supplemental Proxy Information: A Special Meeting of the Shareholders of the
SunAmerica Equity Funds was held on December 30, 1998. Each of the applicable
Funds voted in favor of adopting the following proposals, therefore, the
results are aggregated for the Funds unless otherwise specified.
1. Election of Directors:
<TABLE>
<CAPTION>
Votes in Votes
Favor of Abstained
---------- ---------
<S> <C> <C>
S. James Coppersmith....................... 29,354,252 1,628,156
Samuel M. Eisenstat........................ 29,362,022 1,620,386
Stephen J. Gutman.......................... 29,371,506 1,610,902
Peter A. Harbeck........................... 29,372,383 1,610,025
Sebastiano Sterpa.......................... 29,375,385 1,607,023
</TABLE>
2. To approve a new investment advisory and management agreement between
SunAmerica Equity Funds on behalf of each separate investment portfolio
thereof, and SunAmerica Asset Management Corp. ("SAAMCo") the terms of which
are identical in all material respects to the existing investment advisory and
management agreement.
<TABLE>
<CAPTION>
Votes in Votes Votes
Favor of Against Abstained
---------- ------- ---------
<S> <C> <C>
28,785,418 419,802 1,777,181
</TABLE>
3. To approve changing the fundamental investment restriction relating to:
(a) short sales of securities;
<TABLE>
<CAPTION>
Votes in Votes Votes
Favor of Against Abstained
---------- --------- ---------
<S> <C> <C>
22,508,411 1,299,359 2,119,152
</TABLE>
(b) the ability to engage in borrowing transactions; and
<TABLE>
<CAPTION>
Votes in Votes Votes
Favor of Against Abstained
---------- --------- ---------
<S> <C> <C>
22,417,405 1,357,442 2,152,079
</TABLE>
(c) the ability to engage in lending transactions.
<TABLE>
<CAPTION>
Votes in Votes Votes
Favor of Against Abstained
---------- --------- ---------
<S> <C> <C>
22,619,147 1,227,284 2,080,492
</TABLE>
4. To ratify the selection of independent accountants.
<TABLE>
<CAPTION>
Votes in Votes Votes
Favor of Against Abstained
---------- ------- ---------
<S> <C> <C>
28,815,529 372,842 1,794,030
</TABLE>
55
<PAGE>
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<PAGE>
[LOGO] SunAmerica ---------------
Mutual Funs BULK RATE
U.S. POSTAGE
The SunAmerica Center PAID
733 Third Avenue Kansas City, MO
New York, NY 10017-3204 Permit No. 2891
---------------
Trustees
S. James Coppersmith
Samuel M. Eisenstat
Stephen J. Gutman
Peter A. Harbeck
Sebastiano Sterpa
Officers
Peter A. Harbeck, President
Donna Calder, Vice President
Brian Clifford, Vice President
Francis D. Gannon, Vice President
Nancy Kelly, Vice President
Robert M. Zakem, Secretary
Peter C. Sutton, Treasurer
Peter E. Pisapia, Assistant Secretary
Abbe P. Stein, Assistant Secretary
John T. Genoy, Assistant Treasurer
Donna M. Handel, Assistant Treasurer
Cheryl L. Hawthorne, Assistant Treasurer
Investment Adviser
SunAmerica Asset Management Corp.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Distributor
SunAmerica Capital Services, Inc.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Shareholder Servicing Agent
SunAmerica Fund Services, Inc.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Custodian and Transfer Agent
State Street Bank and Trust Company
P.O. Box 419572
Kansas City, MO 64141-6572
This report is submitted solely for the general information of shareholders of
the Fund. Distribution of this report to persons other than shareholders of the
Fund is authorized only in connection with a currently effective prospectus,
setting forth details of the Fund, which must precede or accompany this report.
The accompanying report has not been examined by independent accountants and
accordingly no opinion has been expressed thereon.
Mutual Fund Shares offered by:
SunAmerica Capital Services, Inc.
EQANN
