<PAGE>
SunAmerica
The Retirement Specialist
EQUITY FUNDS
1999 Annual Report
Balanced Assets Fund
Blue Chip Growth Fund
Growth Opportunities Fund
Small Company Growth
Fund Growth and Income Fund
"Dogs" of Wall Street Fund
[LOGO]SunAmerican
Mutual Funds
<PAGE>
SunAmerica Equity Funds Annual Report
From the SunAmerica Domestic Equity Investment Team
Donna Calder
Brian Clifford
Jeff Easter
Francis Gannon
Soohwan Kim
Richard Murphy
Heather Rice
Dear Shareholders:
As the year draws to a close and Year 2000 approaches, the strength of
SunAmerica's equity team is clearly evident. The 12 months ending
September 30, 1999 produced dramatic returns for both the SunAmerica
Equity Funds and the market in general as five of the six funds
outperformed their peers. In difficult environment, the strong stock-
picking skills of SunAmerica's portfolio managers proved critical during
the success of the SunAmerica Equity Funds, that followed the market low
of October 8, 1998.
Market Review
During the 12 month period, volatility due to interest rate movements,
inflation fears and global economic recovery dominated the equity scene.
Moreover, the market remained incredibly narrow throughout the year.
Only four stocks accounted for more than half of the S&P 500's
performance in the first nine months of 1999. Eleven stocks accounted
for 100% of the performance, with all but three of the top eleven index
contributors being technology stocks. That said, the first half of the
year was markedly different from the second in most other respects.
During the first half, equities in general were strong. The stock
markets reacted favorably to three Federal Reserve Board easings in the
fall of 1998, interest rate cuts in a number of other countries, better
coordination of international monetary policy, receding concerns of a
global credit crunch, positive earnings reports, and an ongoing strong
U.S. economy with low inflation and healthy consumer spending. The Dow
Jones Industrial Average rose to new highs, passing the 10,000 milestone
and then the 11,000
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level quickly thereafter. Both the NASDAQ and S&P 500 Indices also
closed in record territory. Still, investors' preference for larger,
more liquid names remained. The market recovery was particularly
apparent in the sharp improvement of technology-related stocks.
In contrast, equities overall produced lackluster performance during
the second half of the Funds' fiscal year. The market broadened somewhat
after economic data showed that the worst of the global financial crisis
was apparently over. This improving environment and the low valuations
of value-oriented, small-cap and mid-cap stocks propelled the re-
emergence of these stocks during both April and May.
During this time, U.S. economic growth remained strong, but fear of
increasing inflation sparked two interest rate hikes. The Fed raised
rates a total of 0.50% in June and August to counter tight labor markets
and potential production shortages, higher global growth and commodity
prices, and high domestic consumption. These rate hikes and potential
Y2K concerns seemed to temper the U.S. equity markets for the second
half of the fiscal year. During these six months:
. The S&P 500 Index returned just 0.36%.
. The Russell 2000 Index returned 8.25%.
Market Outlook
Looking ahead, we maintain a positive outlook for the equity markets.
Volatility in the markets will no doubt continue. However, we anticipate
moderate U.S. GDP growth of 3% to 3.5% and low inflation of 2% to 2.5%.
At the same time, we believe the economy may slow early next year and we
will watch for:
. Wage Inflation. The labor markets are very tight, which could
increase wage pressures. However, we believe corporate
restructuring and the accompanying job insecurity continue to
discourage these pressures.
. Stronger Global Growth. Synchronized economic growth abroad may
create supply shortages and higher prices in the U.S. However, we
believe this is unlikely because the global markets have not fully
recovered yet. Also, we expect the Federal Reserve Board will
monitor inflation closely. In our opinion, any further tightening
by the Fed in the months ahead would be limited at most.
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. External Factors. Y2K preparedness and the upcoming election's
focus on healthcare, divided government, surplus spending, and tax
cuts may impact the U.S. equity markets.
Given these conditions, we intend to position your Funds' portfolios
to capitalize on the areas of strength we believe will emerge in the
first half of 2000.
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SunAmerica Balanced Assets Fund
Performance
SunAmerica Balanced Assets Fund significantly outperformed its
category average for the annual period and ranked in the top 10% of
its peers for both its one-year and three-year performance through
the end of the third calendar quarter, according to Lipper
Analytical Services. SunAmerica Balanced Assets Class A returned
22.11% compared to 12.56% for its Lipper peer category for the
twelve months ending September 30, 1999. Its benchmarks, the S&P
500 Index and the Lehman Intermediate Government Index, returned
27.80% and 0.63%, 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 neutral to the Index duration in its fixed income allocation.
Specifically, the Fund had 61.2% of its assets invested in equities
on September 30th, as compared to about 55% held in a typical
balanced fund. Successful sector allocation overweightings in
technology and energy stocks also enhanced performance during the
annual period.
SunAmerica Balanced Assets Fund
[BAR CHART]
SunAmerica Balanced Asset Fund* 22.11%
Lipper Balanced Catergory 12.56%
Blended Index 15.57%
Average Annual Returns
<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..... 22.11% 18.55% 17.35% 14.39%
A Shares
With Maximum
Sales Charge........... 15.09% 16.23% 15.96% 13.27%
</TABLE>
Past performance is no guarantee of future
results.
* Does not include sales charge.
4
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Portfolio Review
In the technology sector, strong stock selection was key, as
several of the Fund's top holdings were also the S&P 500 Index's
top performers. These included Cisco Systems, EMC, Intel, IBM,
Microsoft, Lucent Technologies and Texas Instruments. We continued
to focus in this sector on telecommunications-oriented companies
and on companies that support the build out of the Internet such as
those specializing in software, memory, and data storage. We also
increased our allocation to semiconductor companies in the third
calendar quarter, as we believe these engines driving personal
computers should continue to do well as the global economy
strengthens and as increased demand boosts unit growth.
Anticipating the recovery in oil prices, we overweighted the
Fund's allocation in energy stocks. When oil prices started to rise
in the spring of 1999, the portfolio benefited from its domestic
and international oil service and oil company holdings, such as
Schlumberger, Halliburton, Baker-Hughes, Royal Dutch, Texaco and
Mobil.
We reduced the Fund's allocation to the healthcare sector from an
overweighted to an underweighted position, as pharmaceuticals came
under significant pressure. We kept companies like Warner-Lambert
and Shering Plough with positive outlooks, but sold, at a profit,
others with less favorable prospects. We increased our
biotechnology positions, such as Amgen and Biogen, which performed
well.
We decreased the Fund's holdings in the financial services
sector, based on pure valuation analysis. In this sector, we
focused on credit card companies, such as Citicorp and Capital One
Financial; on super-regional banks, such as Summit Bancorp; and on
large money center banks and financial services companies that had
done well after significant merger and acquisition activity, such
as Chase Manhattan Corp., Wells Fargo, and Morgan Stanley Dean
Witter.
On the fixed income side, we maintained a conservative strategy.
First, we moved the Fund's duration from a longer-than-benchmark
position to a neutral duration when the Federal Reserve Board
shifted its bias in mid-May toward raising interest rates. This
benefited Fund performance. We also increased your Fund's
allocation to U.S. Government securities to take advantage of
higher yields. The 30-year Treasury bond yield, for example, moved
up more than 1.50% to 6.27% over the twelve month period. In
addition to Treasuries, the Fund remained invested in conservative,
high quality investment grade corporate bonds.
5
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Winners and Losers
Besides the many winners mentioned in the Portfolio Review
section, CBS, Liberty Media, American Express, Home Depot, Johnson
& Johnson, and General Electric were also top performers.
On the flip side, Philip Morris, the large conglomerate,
continued to be besieged by the fall-out from the non-favorable
tobacco settlement. We reduced the Fund's position in this stock.
Other challenged stocks were Oakley, a sunglass and sneaker
manufacturer, and First Union and BankAmerica in the financial
services sector. AT&T and MCI WorldCom were disappointments, but we
added to these holdings, as we continue to believe in these
companies' leadership positions within the telecommunications
sector. In fact, each of these stocks produced only unrealized
losses. The fund continues to hold these names because we believe
the fundamentals of each 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 twelve months ending September 30,
1999. SunAmerica Blue Chip Growth Class A posted a cumulative
return of 36.29% compared to 27.74% for its Lipper category and
27.80% for the S&P 500 Index. (Returns do not reflect the impact of
sales charges.) The Fund ranked in the top 7% of its peers for its
twelve-month performance through the end of the third calendar
quarter, according to Lipper Analytical Services.
[CHART]
SunAmerica Blue Chip Growth Fund (10-1-98 through 9-30-99)
SunAmerica Blue Chip Growth Fund* 36.29%
Lipper Large-Cap Core Category 27.74%
S&P 500 Index 27.80%
Average Annual Returns
<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..... 36.29% 23.95% 21.34% 17.35%
A Shares
With Maximum Sales
Charge................. 28.45% 21.53% 19.91% 16.20%
</TABLE>
Past performance is no guarantee of future
results.
* Does not include sales charge.
Portfolio Review
Your Fund primarily benefited from significantly overweighting
the technology and energy sectors and from concentrating the
portfolio's number of holdings to capitalize on the lack of market
breadth. As of September 30, 1999, the portfolio held 71 names.
Within your Fund's overweighted technology position, we
concentrated on growth-oriented Internet stocks such as Yahoo! and
Lycos. We also focused on the strong relationship between
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telecommunications and semiconductors, benefiting from such names
as Micron, Texas Instruments, Intel, Nokia and Motorola.
Anticipating the recovery in oil prices, we overweighted the
Fund's allocation in energy. When oil prices did start to rise in
the spring of 1999, the portfolio benefited from its domestic and
international oil service and oil company holdings, such as
Schlumberger, Halliburton, Baker-Hughes, Royal Dutch and Mobil.
We reduced the Fund's allocation to the healthcare sector from an
overweighted to an underweighted position, as pharmaceuticals came
under significant pressure. Within this sector, we focused on
biotechnology positions such as Amgen and Biogen, which performed
well. We also moved the Fund's portfolio from an overweighted to a
neutral weighted position in the financial services sector, based
on pure valuation analysis. The Fund benefited from its media
holdings, such as CBS, General Electric, and Time Warner, and
limited its exposure to cyclicals, with Alcoa and Georgia Pacific
our two primary holdings in this sector.
Consistent with our approach of seeking high quality stocks, we
purchased Best Buy and Tandy during the fiscal year. We believe
your Fund will benefit from the growing popularity of electronics
within the retailing sector, as innovations as DVD, DIVX, and
others become dominant trends in home entertainment.
We kept between 5% and 10% of the Fund's assets in cash to
opportunistically capitalize on periodic market imbalances or
specific stock weaknesses.
Winners and Losers
In addition to those companies named above, top performers for
this Fund included QUALCOMM, Clear Channel Communications, and
Comcast. We sold Mattel at a profit thanks to strong 1999 earnings
based largely on its licensing with George Lucas' production
company for Star Wars related toys and promotional products. JDS
Uniphase, a manufacturer of optical equipment for cable companies,
was a recent addition to your Fund's portfolio that performed
particularly well.
Merrill Lynch, The Gap, Georgia Pacific, Alcoa, and General
Motors were among the disappointments. However, these companies
produced unrealized losses, as we continue to hold each of these
names in the portfolio.
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SunAmerica Growth Opportunities Fund
The SunAmerica Growth Opportunities Fund (formerly SunAmerica
Mid-Cap Growth Fund) changed its name to more closely reflect:
. its capital appreciation objective
. the flexibility of the Fund to invest in companies with either
smaller or larger capitalizations that are believed to have
significant growth potential.
The Fund's policies and strategies, as well as its management team
remain the same.
Performance
The SunAmerica Growth Opportunities Fund outperformed both the
Russell Mid Cap Growth Index and its peers for the twelve months
ending September 30, 1999. SunAmerica Growth Opportunities Class A
posted a cumulative return of 52.42% compared to 41.88% for the
Lipper category and 37.21% for the Russell Mid Cap Growth Index.
The Fund even significantly outpaced the S&P 500 Index's return of
27.80% for the same period. (Returns do not reflect the impact of
sales charges.)
This strong performance is particularly notable during a period
of significant market volatility that generally favored the largest
stocks. That said, mid-cap stocks did outperform large-cap stocks
during the second six months of the period as the market broadened
a bit. Signs of strong domestic economic growth, positive prospects
for global recovery, and continued low inflation led some investors
to the mid-cap market.
For the fiscal year as a whole, growth stocks outperformed value
stocks, and so your Fund benefited significantly from its strong
growth bias as well as its outstanding sector positioning and stock
selection and some of the lowest mid-cap relative valuations in
decades.
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[CHART]
SunAmerica Growth Opportunities Fund (10-1-98 through 9-30-99)
SunAmerica Growth Opportunities Fund* 52.42%
Lipper Multi-Cap Core Category 41.88%
S&P 500 Index 27.80%
Average Annual Returns
<TABLE>
<CAPTION>
1 yr 3 yr 5 yr 10 yr
----- ----- ----- -----
<S> <C> <C> <C> <C>
A Shares
At Net Asset Value..... 52.42% 21.07% 21.00% 13.40%
A Shares
With Maximum Sales
Charge................. 43.66% 18.71% 19.57% 12.73%
</TABLE>
Past performance is no guarantee of future
results.
*Does not include sales charge.
Portfolio Review
Your Fund remained overweighted in the technology sector, but we
shifted from a focus on business-to-consumer Internet stocks during
the first half of the fiscal year to the telecommunications, semi-
conductor, capital equipment, and software sub-sectors during the
second half.
Within the healthcare sector, we moved from an overweight to an
underweight position in pharmaceuticals. Medicare reimbursement
issues on prescription drugs have put pricing pressure on these
stocks as has a slow pipeline of new drugs replacing the several
drugs whose patents will expire in the next few years. Instead, we
increased the portfolio's allocation to therapeutic and genomic
biotechnology companies. These companies include Biogen, Genzyme,
Human Genome Sciences, Millennium Pharmaceuticals, and Affymetrics,
each of which contributed positively to the Fund's performance. In
September 1999, we slightly reduced your Fund's biotechnology
holdings, at a profit, as certain fundamentals began to change.
We increased the Fund's positions in energy and oil services
early in the fiscal year due to attractive valuations and a
sustained rally in the price of oil. When oil prices firmed and
even increased during the spring and the global economy began to
recover in the second half of the annual period, these companies
began to perform. Portfolio holdings Marine Drilling, Global
Marine, Rowan, and Halliburton each performed well for the Fund.
10
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Winners and Losers
In addition to the many winners mentioned above, your portfolio's
strong performers in the technology sector included software
companies Citrix Systems and Siebel Systems, communications storage
area networking solutions provider Brocade, and semiconductor
company Atmel. We believe software companies will benefit from
increased capital investment ahead as companies redirect spending
from Y2K fixes to niche application software.
Of course, the Fund experienced a few disappointments, too. We
sold biotechnology company Liposome, whose stock was thwarted when
its major product did not get FDA approval as expected. We also
sold Watson Pharmaceutical, a generic pharmaceutical company whose
stock felt the same pressures the sector as a whole did. We
continue to hold Interliant, an applications service provider,
which did not perform well but whose fundamentals remain healthy.
11
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SunAmerica Small Company Growth Fund
Performance
The SunAmerica Small Company Growth Fund outperformed its
benchmarks and its Lipper peers for the twelve months ending
September 30, 1999. SunAmerica Small Company Growth Class A posted
a cumulative return of 52.92% compared to 19.16% for the Russell
2000 Index. (Returns do not reflect the impact of sales charges.)
This strong performance is particularly notable during a period
of significant market volatility. Although small cap stocks as a
whole lagged large-cap stocks for the 12 months, but growth-small-
cap stocks outperformed both large-cap and mid-cap stocks for the
period. In the second half of the Fund's fiscal year, the market
shifted and small cap stocks as whole were the best performing
U.S. equity sector during these latter six months. Growth-oriented
small-cap stocks continued to produce better returns than their
value counterparts.
[CHART]
SunAmerica Small Company Growth Fund
(10-1-98 Through 9-30-99)
SunAmerica Small Company Growth Fund* 53.00%
Russel 2000 Index 19.16%
Lipper Mid-Cap Growth Category 27.02%
Average Annual Returns
<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..... 53.00% 11.51% 19.94% 13.31% 14.59%
A Shares
With Maximum Sales
Charge................. 44.21% 9.33% 18.53% 12.64% 14.06%
</TABLE>
Past performance is no guarantee of future results.
* Does not include sales charge.
12
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Portfolio Review
Your Fund benefited most from its significant overweighting in
the technology sector. These stocks include:
. Portals to the Internet, such as Yahoo! and America Online
. Companies that provide security for the Internet
. Companies that enable the workings of the Internet, such as
suppliers of software infrastructure, data storage and
security, customer and content management, and information
technology services. These stocks may included CMGI, Vignette,
Inktomi, RealNetworks, VeriSign, and Entrust Technologies.
Your Fund's second biggest weighting was in the energy and oil
services sector. Having bought such companies as BJ Services,
Diamond Offshore Drilling, Offshore Logistics, Smith International,
and Transocean Offshore in December 1998 as a turnaround group,
this sector performed just as anticipated. When oil prices
increased during the spring and the global economy began to recover
in the second half of the annual period, these companies performed
very well.
Several biotechnology companies also performed particularly well
during your Fund's fiscal year, and we added to the portfolio's
position here. Holdings include Alkermes, MedImmune, and a
relatively recent purchase, Myriad Genetics, which studies human
genomes for diagnosis and therapeutics. This company has produced a
breast cancer diagnostic test and, very recently, discovered the
gene related to diabetes.
Within your Fund's telecommunications sector, we pared back on
holdings in several competitive local exchange carriers (clecs),
which continued to be a challenging group, and moved more
significantly into digital subscriber line (DSL) companies. We
believe this alternative method for delivering increased bandwidth
to both homes and businesses is the next big growth trend. We
invested in such companies as Covad Communications Group, Rhythms
NetConnections, Copper Mountain Networks, and Carrier Access.
Consumer cyclical stocks performed well for the first eight
months of the fiscal year, but then disappointed in the last four.
We reduced the portfolio's weighting over the twelve months,
particularly in the education-oriented businesses, such as Sylvan
Learning Systems. We sold, at
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strong profits, Gucci and Penske Motor Sports, both of which
benefited from takeovers. We bought Action Performance in late fall
1998, and sold it early in the summer, as this NASCAR racing-
associated company is a very seasonal business.
Winners and Losers
In addition to those already mentioned, winners for your Fund
included all four of the Internet-related companies highlighted in
our last Shareholder Report, i.e. BroadVision Inc., DoubleClick,
Inc., Macromedia, Inc., and Micromuse, Inc. Several broadcasting
and cable companies also had a positive impact on Fund performance,
such as ValueVision International. Retailers Sunglass Hut,
Talbot's, Bally Total Fitness Holding, and Abercrombie & Fitch Co.
each performed well.
Even with your Fund's strong performance, it was not completely
immune to the small-cap market's volatility. The assisted living
sector did not perform as anticipated over the annual period. Two
of the leaders within the group which have been sold at losses are
Sunrise Assisted Living and Altera (formerly Alternative Living
Services). In both situations, the fundamentals deteriorated mid-
year.
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SunAmerica Growth and Income Fund
Performance
SunAmerica Growth and Income Fund outperformed its category
average and its benchmark for the annual period. SunAmerica Growth
and Income Class A returned 30.99% on a cumulative basis compared
to 27.74% for the Lipper category and 27.80% for the S&P 500 Index
for the twelve months ending September 30, 1999. (Returns do not
reflect the impact of sales charges.) The Growth and Income Fund
was named to The Winner's Circle of top performing funds by
Kiplinger's Personal Finance Magazine, 1999.*
Your Fund primarily benefited from a "barbell approach" to stock
selection, balancing the portfolio's holdings between growth and
value sectors. More specifically, the Fund was overweighted on the
growth side in the technology sector and on the value side in the
energy and financial services sectors. The Fund also benefited from
a focus on companies with histories of above-average dividend
yields and a record of increasing those dividends. We believe
growing dividends can lead to capital appreciation while helping to
contain risk. A 2.5% weighting in longer-duration U.S. Treasuries
added to the portfolio early in the fiscal year also provided
income and enhanced the overall yield of the Fund.
SunAmerica Growth and Income Fund (10-1-98 through 3-31-99)
[CHART]
SunAmerica Growth and Income Fund (10-1-98 through 9-30-99)
SunAmerica Growth and Income Fund* 30.99%
Lipper Large-Cap Core Category 27.74%
S&P 500 Index 27.80%
Average Annual Returns
<TABLE>
<CAPTION>
Return
Since
Inception
1 yr 5 yr (7/1/94)
------ ------ ---------
<S> <C> <C> <C>
A Shares
At Net Asset Value.......... 30.99% 24.07% 23.35%
A Shares
With Maximum Sales Charge... 23.46% 22.61% 21.96%
</TABLE>
Past performance is no guarantee of future
results.
* Does not include sales charge.
15
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Portfolio Review
Emphasis in the Fund was on the technology, financial services,
and energy sectors. Top holdings included Microsoft, EMC, General
Electric, IBM, MCI WorldCom, Johnson & Johnson, American Express,
Intel, Cisco Systems, and Citigroup.
Fund performance also benefited from holdings in the media and
broadcasting industry. We believe that as we approach the
celebration of the millennium and enter the year 2000, advertising
spending on the upcoming Presidential election, the Olympics, the
Y2K milestone, and the Internet will rise dramatically. Thus, those
companies positioned to create and distribute content and
advertising should benefit. These companies include Fund holdings
CBS, Liberty Media, Time Warner, Clear Channel Communications, and
Disney. Your Fund also gained yield from its exposure to the
utilities sector, with companies such as Energy East, Enron, and
Peco Energy.
We reduced your Fund's weighting in the healthcare sector,
focusing more on biotechnology companies than on pharmaceuticals,
which came under pressure during the year. The Fund remained
underweighted in the basic materials and consumer cyclicals
sectors.
We maintained between 5% and 10% of the Fund's assets in cash to
opportunistically capitalize on periodic market imbalances or
specific stock weaknesses.
Winners and Losers
Nine of your Fund's top ten holdings were among the top
contributors to the performance of the S&P 500 Index for the year
to date through September 30, 1999. Several of the broadcasting and
media companies also did well, including CBS, purchased by Viacom,
and Liberty Media. Recent additions to the Fund's portfolio--JDS
Uniphase, a manufacturer of optical equipment for cable companies,
and fast-food giant McDonald's--were winners, too.
The portfolio did contain some disappointments, some of which we
sold, such as pharmaceutical company American Home Products,
financial services company Associates First Capital and Daimler
Benz, the latter of which suffered slower-than-expected integration
with Chrysler and heightened competition from other American auto
companies. Other issues we continue to hold, and thus they remain
unrealized losses. These include AT&T and Philip Morris.
* Past performance is no guarantee of future results. Ranking
appeared in the January 1999 edition of Kiplinger's. The ranking,
created by Kiplinger's, ranked funds by 3-year annualized total
returns (12/31/95-12/31/98). Sixty funds were ranked in the growth
and income category, in which SunAmerica Growth and Income Fund
appeared. The ranking does not take into account sales charges.
16
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SunAmerica "Dogs" of Wall Street Fund
Performance
Value investing was out of favor during the annual period as a
whole, with investor preference for growth-oriented stocks. The
equity markets exhibited extremely narrow performance
concentration. 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.
SunAmerica "Dogs" of Wall Street Class A returned 8.47% on a
cumulative basis for the twelve months ending September 30, 1999.
(Return does not reflect the impact of sales charges.) Another
measure of the "Dogs" stocks is yield. And many of the "Dogs"
continue to sell at attractively low price/earnings multiples.
Portfolio Review
While overall market performance for the fiscal year was narrow
and value investing remained a challenge, we continue to believe
the "Dogs" of Wall Street strategy will bring investors long-term
rewards.
For example, the environment favored value stocks during the
second quarter of 1999. The market temporarily expanded nearly
seven-fold, as investor sentiment had sharply shifted from larger,
growth and technology-oriented names to smaller, value and more
economically cyclical stocks, following economic data that the
worst of the Asian financial crisis was apparently over.
During this time, large cap value stocks outperformed their
growth brethren for the first time in nearly one and a half years.
Stronger performance in value stocks could be attributed, in part,
to stronger performance in energy-related stocks, rebounding with
higher oil prices. The combination of positive corporate earnings
surprises, expectations of improving fundamentals, and valuations
for long-ignored economically-sensitive stocks served to propel
these value-oriented stocks during both April and May.
17
<PAGE>
As the global economy continues to expand, we believe the
performance of the "Dogs" holdings will improve. After all, the
fundamentals for many of the companies in your Fund's portfolio are
strong. At the end of 1999, the Fund will be rebalanced to reflect
our "Dogs" for the year 2000. We continue to believe that value
names are an important component of a well-diversified portfolio.
The "Dogs" of Wall Street strategy provides greater diversification
than the traditional Dow 10 strategy as a risk-management tool and
offers the potential for strong total return through a combination
of capital appreciation and dividend income.
18
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SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 1999
<TABLE>
<CAPTION>
Balanced Blue Chip Growth Small Company Growth and "Dogs" of
Assets Growth Opportunities Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments securities,
at value*.............. $420,233,546 $142,141,404 $70,171,320 $204,349,904 $200,778,639 $175,455,559
Repurchase agreements
(cost equals market)... 19,122,000 6,665,000 5,648,000 23,555,000 18,367,000 --
Cash.................... 98,998 18,480 3,085 596,716 88,562 --
Receivable for shares of
beneficial interest
sold................... 6,521,803 1,565,733 1,150,481 1,737,108 1,039,552 365,700
Interest and dividends
receivable............. 1,545,760 87,251 19,512 6,601 169,724 399,028
Receivable for
investments sold....... 580,483 3,567,767 568,809 8,100,539 3,720,189 401,268
Receivable from
investment adviser..... 7,826 993 929 3,659 2,828 30,006
Prepaid expenses........ 6,073 30,858 5,173 4,940 657 13,766
Deferred organizational
expenses............... -- -- -- -- -- 11,168
------------ ------------ ----------- ------------ ------------ ------------
Total assets.......... 448,116,489 154,077,486 77,567,309 238,354,467 224,167,151 176,676,495
------------ ------------ ----------- ------------ ------------ ------------
LIABILITIES:
Payable for investments
purchased.............. 4,190,037 -- 1,867,682 7,885,813 3,879,961 --
Accrued expenses........ 295,784 172,771 121,744 235,528 172,741 125,560
Investment advisory and
management fees
payable................ 273,144 95,504 46,259 143,124 136,993 52,483
Distribution and service
maintenance fees
payable................ 230,794 71,659 30,974 110,310 135,426 135,831
Payable for shares of
beneficial interest
redeemed............... 230,037 96,789 2,955 169,098 255,766 312,839
Dividends payable....... 1,190 -- -- -- -- --
Due to custodian........ -- -- -- -- -- 55,406
Written options, at
value (proceeds
$506,384 on Small
Company Growth)........ -- -- -- 454,800 -- --
------------ ------------ ----------- ------------ ------------ ------------
Total liabilities..... 5,220,986 436,723 2,069,614 8,998,673 4,580,887 682,119
------------ ------------ ----------- ------------ ------------ ------------
Net assets.......... $442,895,503 $153,640,763 $75,497,695 $229,355,794 $219,586,264 $175,994,376
============ ============ =========== ============ ============ ============
NET ASSETS WERE COMPOSED
OF:
Shares of beneficial
interest, $.01 par
value.................. $ 220,280 $ 66,164 $ 33,086 $ 85,226 $ 136,967 $ 148,902
Paid-in capital......... 325,793,992 100,047,002 46,219,937 145,730,990 167,161,877 180,695,477
------------ ------------ ----------- ------------ ------------ ------------
326,014,272 100,113,166 46,253,023 145,816,216 167,298,844 180,844,379
Accumulated
undistributed net
investment income
(loss)................. (54,391) (16,236) 3,237 (35,403) (10,695) 1,158,650
Accumulated
undistributed net
realized gain on
investments, foreign
currency and other
assets and liabilities. 39,656,817 14,211,896 12,192,689 40,386,002 8,439,625 4,032,567
Net unrealized
appreciation
(depreciation) of
investments............ 77,278,805 39,331,937 17,048,746 43,137,395 43,858,490 (10,041,220)
Unrealized appreciation
on written options
contracts.............. -- -- -- 51,584 -- --
------------ ------------ ----------- ------------ ------------ ------------
Net assets.......... $442,895,503 $153,640,763 $75,497,695 $229,355,794 $219,586,264 $175,994,376
============ ============ =========== ============ ============ ============
*Identified cost
Investment securities... $342,954,741 $102,809,467 $53,122,574 $161,212,509 $156,920,149 $185,496,779
============ ============ =========== ============ ============ ============
</TABLE>
See Notes to Financial Statements
19
<PAGE>
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 1999 -- (continued)
<TABLE>
<CAPTION>
Balanced Blue Chip Growth Small Company Growth and "Dogs" of
Assets Growth Opportunities Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A (unlimited
shares authorized):
Net assets.............. $256,467,320 $103,841,175 $57,879,984 $148,376,192 $ 86,523,560 $26,402,681
Shares of beneficial
interest issued and
outstanding............ 12,747,718 4,396,548 2,503,494 5,418,528 5,329,867 2,223,861
Net asset value and
redemption price per
share.................. $ 20.12 $ 23.62 $ 23.12 $ 27.38 $ 16.23 $ 11.87
Maximum sales charge
(5.75%
of offering price)..... 1.23 1.44 1.41 1.67 0.99 0.72
------------ ------------ ----------- ------------ ------------ -----------
Maximum offering price
to public.............. $ 21.35 $ 25.06 $ 24.53 $ 29.05 $ 17.22 $ 12.59
============ ============ =========== ============ ============ ===========
Class B (unlimited
shares authorized):
Net assets.............. $177,577,069 $ 49,015,094 $16,529,157 $ 77,331,234 $121,709,574 $55,526,065
Shares of beneficial
interest issued and
outstanding............ 8,840,175 2,184,838 755,401 2,966,675 7,652,656 4,701,210
Net asset value,
offering and redemption
price per share
(excluding any
applicable contingent
deferred sales charge). $ 20.09 $ 22.43 $ 21.88 $ 26.07 $ 15.90 $ 11.81
============ ============ =========== ============ ============ ===========
Class II (unlimited
shares authorized):
Net assets.............. $ 8,851,114 $ 784,494 $ 1,088,554 $ 2,598,335 $ 11,134,951 $94,065,630
Shares of beneficial
interest issued and
outstanding............ 440,082 34,975 49,743 99,748 700,869 7,965,124
Net asset value and
redemption price per
share (excluding any
applicable contigent
deferred sales charge). $ 20.11 $ 22.43 $ 21.88 $ 26.05 $ 15.89 $ 11.81
Maximum sales charge
(1.00% of offering
price)................. 0.20 0.23 0.22 0.26 0.16 0.12
------------ ------------ ----------- ------------ ------------ -----------
Maximum offering price
to public.............. $ 20.31 $ 22.66 $ 22.10 $ 26.31 $ 16.05 $ 11.93
============ ============ =========== ============ ============ ===========
Class Z (unlimited
shares authorized):
Net assets.............. -- -- -- $ 1,050,033 $ 218,179 --
Shares of beneficial
interest issued and
outstanding............ -- -- -- 37,637 13,324 --
Net asset value,
offering and redemption
price per share........ -- -- -- $ 27.90 $ 16.37 --
============ ============ =========== ============ ============ ===========
</TABLE>
See Notes to Financial Statements
20
<PAGE>
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the year ended September 30, 1999
<TABLE>
<CAPTION>
Balanced Blue Chip Growth Small Company Growth and "Dogs" of
Assets Growth Opportunities Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest................. $ 8,448,219 $ 502,672 $ 142,284 $ 1,069,317 $ 671,633 $ 43,054
Dividends (net of
withholding taxes of $0,
$11,229, $0, $1,377,
$8,172 and $3,242,
respectively)........... 2,898,842 1,279,051 264,867 393,277 1,899,955 3,778,540
----------- ----------- ----------- ----------- ----------- -----------
Total investment income.. 11,347,061 1,781,723 407,151 1,462,594 2,571,588 3,821,594
----------- ----------- ----------- ----------- ----------- -----------
Expenses:
Investment advisory and
management fees......... 3,113,448 1,053,472 474,791 1,658,862 1,424,693 497,184
Distribution and service
maintenance fees--Class
A....................... 824,262 330,715 173,250 494,047 268,818 93,816
Distribution and service
maintenance fees--Class
B....................... 1,823,284 457,293 135,817 780,353 1,085,415 469,277
Distribution and service
maintenance fees--Class
II...................... 19,720 2,433 2,237 10,992 44,417 683,971
Transfer agent fees and
expenses--Class A....... 667,637 247,670 125,980 396,559 205,639 69,343
Transfer agent fees and
expenses--Class B....... 454,351 122,606 37,688 211,095 271,588 119,074
Transfer agent fees and
expenses--Class II...... 14,634 4,728 5,233 9,199 10,537 168,063
Transfer agent fees and
expenses--Class Z....... -- -- -- 22,575 15,680 --
Custodian fees and
expenses................ 127,818 75,772 72,845 114,242 96,937 61,367
Registration fees--Class
A....................... 12,227 26,911 14,263 9,326 15,426 27,975
Registration fees--Class
B....................... 15,715 15,701 13,600 8,194 22,450 46,053
Registration fees--Class
II...................... 18,115 17,330 17,953 21,601 16,663 54,326
Registration fees--Class
Z....................... -- -- -- 22,340 20,140 --
Legal fees and expenses.. 53,990 19,755 15,175 29,330 25,895 20,385
Printing expense......... 38,410 11,892 4,970 22,075 15,140 38,315
Trustees' fees and
expenses................ 34,248 11,091 4,618 18,468 14,156 9,609
Audit and tax consulting
fees.................... 24,055 19,120 18,005 20,885 19,785 23,350
Insurance expense........ 4,485 1,257 740 3,489 708 47
Amortization of
organizational expenses. -- -- -- -- 7,735 10,862
Miscellaneous expenses... 6,295 2,964 5,550 4,160 3,235 5,212
----------- ----------- ----------- ----------- ----------- -----------
Total expenses........... 7,252,694 2,420,710 1,122,715 3,857,792 3,585,057 2,398,229
Less: expenses
reimbursed by
investment adviser...... (27,876) (21,276) (22,232) (71,393) (56,512) (298,272)
Less: custody credits
earned on cash
balances................ (15,678) (1,172) (2,990) (12,657) (427) (117)
Net expenses............. 7,209,140 2,398,262 1,097,493 3,773,742 3,528,118 2,099,840
----------- ----------- ----------- ----------- ----------- -----------
Net investment income
(loss)................... 4,137,921 (616,539) (690,342) (2,311,148) (956,530) 1,721,754
----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on
investments.............. 45,107,763 16,716,125 13,791,846 43,250,459 10,029,304 4,032,567
Net realized gain (loss)
on option contracts...... -- -- (692,815) 1,514,794 -- --
Net change in unrealized
appreciation/depreciation
on investments........... 27,531,641 22,682,813 12,325,535 44,659,776 33,321,477 (5,519,192)
Net change in unrealized
appreciation/depreciation
on written options
contracts................ -- -- -- 131,386 -- --
----------- ----------- ----------- ----------- ----------- -----------
Net realized and
unrealized gain (loss) on
investments, foreign
currency and other assets
and liabilities.......... 72,639,404 39,398,938 25,424,566 89,556,415 43,350,781 (1,486,625)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS............... $76,777,325 $38,782,399 $24,734,224 $87,245,267 $42,394,251 $ 235,129
=========== =========== =========== =========== =========== ===========
See Notes to Financial
Statements
</TABLE>
21
<PAGE>
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Balanced Assets Fund Blue Chip Growth Fund Growth Opportunities Fund
---------------------------- ---------------------------- ---------------------------
For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended
September 30, September 30, September 30, September 30, September 30, September 30,
1999 1998 1999 1998 1999 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss).................. $ 4,137,921 $ 4,648,757 $ (616,539) $ (483,571) $ (690,342) $ (493,615)
Net realized gain on
investments............. 45,107,763 24,425,420 16,716,125 7,610,662 13,791,846 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.......... 27,531,641 1,642,258 22,682,813 (1,920,853) 12,325,535 (6,869,735)
------------ ------------ ------------ ------------ ----------- ------------
Net increase (decrease) in
net assets resulting from
operations............... 76,777,325 30,716,435 38,782,399 5,206,244 24,734,224 (1,837,705)
------------ ------------ ------------ ------------ ----------- ------------
Dividends and
distributions to
shareholders:
From net investment
income (Class A)........ (3,094,302) (3,066,976) -- -- -- --
From net investment
income (Class B)........ (1,303,913) (1,812,490) -- -- -- --
From net investment
income (Class II)....... (22,613) -- -- -- -- --
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............. (32,945,823) (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)....................... 43,469,835 19,370,777 14,881,653 11,025,071 5,924,536 266,590
------------ ------------ ------------ ------------ ----------- ------------
Total increase (decrease)
in net assets............ 87,301,337 12,905,101 44,999,048 3,196,327 27,033,768 (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 September 30, 1999
and September 30, 1998 of
($54,391), ($85,057);
($16,236), ($12,409);
$3,237, and ($6,950),
respectively]............ $442,895,503 $355,594,166 $153,640,763 $108,641,715 $75,497,695 $ 48,463,927
============ ============ ============ ============ =========== ============
</TABLE>
See Notes to Financial Statements
22
<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 period
For the year For the year For the year For the year For the year June 8, 1998*
ended ended ended ended ended through
September 30, September 30, September 30, September 30, September 30, September 30,
1999 1998 1999 1998 1999 1998
------------- ------------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss).................. $ (2,311,148) $ (2,522,639) $ (956,530) $ (311,435) $ 1,721,754 $ 176,127
Net realized gain on
investments............. 43,250,459 20,153,760 10,029,304 5,999,035 4,032,567 --
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
on investments.......... 44,659,776 (82,111,504) 33,321,477 -- (5,519,192) (4,522,028)
Net change in unrealized
appreciation/depreciation
on written option
contracts............... 131,386 (79,802) -- -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease) in
net assets resulting from
operations............... 87,245,267 (64,701,584) 42,394,251 4,822,690 235,129 (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).... (12,713,990) (53,359,166) 45,202,023 40,851,375 120,053,637 60,859,962
------------ ------------ ------------ ------------ ------------ -----------
Total increase (decrease)
in net assets............ 61,981,267 (143,233,783) 82,396,277 34,441,067 119,480,315 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 September 30, 1999
and September 30, 1998 of
($35,403), ($28,365);
($10,695), ($5,954);
$1,158,650 and $234,485,
respectively]............ $229,355,794 $167,374,527 $219,586,264 $137,189,987 $175,994,376 $56,514,061
============ ============ ============ ============ ============ ===========
</TABLE>
*Commencement of Operations
See Notes to Financial Statements
23
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
--------------------
Net
gain
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
-------
9/30/95......... $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
9/30/99......... 18.03 0.25 3.57 3.82 (0.26) (1.47) (1.73) 20.12 22.11 256,467
Class B
-------
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
9/30/99......... 18.01 0.13 3.57 3.70 (0.15) (1.47) (1.62) 20.09 21.38 177,577
Class II
--------
2/02/99-
9/30/99(3)...... $20.00 $0.08 $0.11 $0.19 $(0.08) $ -- $(0.08) $20.11 0.95% $ 8,851
<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>
Class A
-------
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
9/30/99......... 1.45 1.26 123
Class B
-------
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
9/30/99......... 2.06 0.64 123
Class II
--------
2/02/99-
9/30/99(3)...... 2.05%(4)(5) 0.71%(4)(5) 123%
</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>
9/30/99
-------
<S> <C>
Balanced Assets Class II.................... 1.41%
</TABLE>
See Notes to Financial Statements
24
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
<TABLE>
<CAPTION>
BLUE CHIP GROWTH FUND
---------------------
Net gain
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
-------
9/30/95......... $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
9/30/99......... 18.61 (0.05) 6.53 6.48 -- (1.47) (1.47) 23.62 36.29 103,841
Class B
-------
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
9/30/99......... 17.84 (0.19) 6.25 6.06 -- (1.47) (1.47) 22.43 35.45 49,015
Class II
--------
2/02/99-
9/30/99(3)...... $21.79 $(0.13) $0.77 $0.64 $ -- $ -- $ -- $22.43 2.94% $ 785
<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
-------
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
9/30/99......... 1.49 (0.22) 71
Class B
-------
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
9/30/99......... 2.15 (0.89) 71
Class II
--------
2/02/99-
9/30/99(3)...... 2.17%(4)(5) (0.95)%(4)(5) 71%
</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>
9/30/95 9/30/99
------- -------
<S> <C> <C>
Blue Chip Growth Class A........... 0.11% --
Blue Chip Growth Class II.......... -- 8.74%
</TABLE>
See Notes to Financial Statements
25
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS - (continued)
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES 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
-------
9/30/95......... $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
9/30/99......... 16.22 (0.19) 8.26 8.07 -- (1.17) (1.17) 23.12 52.42 57,880
Class B
-------
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
9/30/99......... 15.52 (0.32) 7.85 7.53 -- (1.17) (1.17) 21.88 51.24 16,529
Class II
--------
2/02/99-
9/30/99(4)..... $19.86 $(0.21) $ 2.23 $ 2.02 $ -- $ -- $ -- $21.88 10.17 % $ 1,089
<CAPTION>
GROWTH OPPORTUNITIES 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
-------
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
9/30/99......... 1.57 (0.93) 220
Class B
-------
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
9/30/99......... 2.32 (1.67) 220
Class II
--------
2/02/99-
9/30/99(4)..... 2.35%(3)(5) (1.74)%(3)(5) 220%
</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>
9/30/95 9/30/99
------- -------
<S> <C> <C>
Growth Opportunities Class B..... 0.17% --
Growth Opportunities Class II.... -- 9.94%
</TABLE>
See Notes to Financial Statements
26
<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)
- ---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
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
9/30/99......... 19.10 (0.21) 9.89 9.68 -- (1.40) (1.40) 27.38 53.00 148,376
Class B
-------
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
9/30/99......... 18.34 (0.35) 9.48 9.13 -- (1.40) (1.40) 26.07 52.15 77,331
Class II
--------
2/02/98-
9/30/98(3)...... $21.11 $(0.19) $(2.58) $(2.77) $-- $ -- $ -- $18.34 (13.12)% $ 168
9/30/99......... 18.34 (0.40) 9.51 9.11 -- (1.40) (1.40) 26.05 52.04 2,599
Class Z
-------
10/07/96-
9/30/97(3)...... $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
9/30/99......... 19.33 (0.07) 10.04 9.97 -- (1.40) (1.40) 27.90 53.91 1,050
<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>
Class A
-------
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
9/30/99......... 1.48 (0.82) 177
Class B
-------
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
9/30/99......... 2.12 (1.46) 177
Class II
--------
2/02/98-
9/30/98(3)...... 2.15%(4)(5) (1.35)%(4)(5) 292%
9/30/99......... 2.15 (5) (1.60) (5) 177
Class Z
-------
10/07/96-
9/30/97(3)...... 1.07%(4)(5) (0.67)%(4)(5) 343%
9/30/98......... 1.01 (5) (0.30) (5) 292
9/30/99......... 0.93 (5) (0.28) (5) 177
</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>
9/30/97 9/30/98 9/30/99
------- ------- -------
<S> <C> <C> <C>
Small Company Growth Class
II.......................... -- 13.58% 2.48%
Small Company Growth Class Z. 2.19% 1.85 4.95
</TABLE>
See Notes to Financial Statements
27
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS - (continued)
<TABLE>
<CAPTION>
GROWTH AND INCOME 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
-------
9/30/95......... $ 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
9/30/99......... 12.80 (0.02) 3.92 3.90 -- (0.47) (0.47) 16.23 30.99 86,524
Class B
-------
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
9/30/99......... 12.62 (0.12) 3.87 3.75 -- (0.47) (0.47) 15.90 30.23 121,709
Class II
--------
2/02/98-
9/30/98(3)...... $12.78 $(0.04) $(0.13) $(0.17) $ -- $ -- $ -- $12.61 (1.33)% $ 963
9/30/99......... 12.61 (0.12) 3.87 3.75 -- (0.47) (0.47) 15.89 30.25 11,135
Class Z
-------
4/15/98-
9/30/98(3)...... $14.35 $ 0.04 $(1.55) $(1.51) $ -- $ -- $ -- $12.84 (10.52)% $ 93
9/30/99......... 12.84 0.07 3.93 4.00 -- (0.47) (0.47) 16.37 31.69 218
<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
-------
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
9/30/99......... 1.48 (0.13) 63
Class B
-------
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
9/30/99......... 2.11 (0.76) 63
Class II
--------
2/02/98-
9/30/98(3)...... 2.15%(4)(5) (0.57)%(4)(5) 150%
9/30/99......... 2.15(5) (0.80)(5) 63
Class Z
-------
4/15/98-
9/30/98(3)...... 0.93%(4)(5) 0.57%(4)(5) 150%
9/30/99......... 0.93(5) 0.43(5) 63
</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>
9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Growth and Income Class
A...................... 2.96% 1.01% 0.22% -- --
Growth and Income Class
B...................... 5.07 1.14 0.21 -- --
Growth and Income Class
II..................... -- -- -- 6.99% 0.44%
Growth and Income Class
Z...................... -- -- -- 28.17 21.57
</TABLE>
See Notes to Financial Statements
28
<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)
9/30/99......... 11.06 0.21 0.73 0.94 (0.13) -- (0.13) 11.87 8.47 26,403 0.95(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)
9/30/99......... 11.03 0.14 0.72 0.86 (0.08) -- (0.08) 11.81 7.82 55,526 1.60(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)
9/30/99......... 11.03 0.14 0.72 0.86 (0.08) -- (0.08) 11.81 7.82 94,065 1.60(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%
9/30/99......... 1.69(5) 35
Class B
-------
6/08/98-
9/30/98(3)...... 1.39%(4)(5) 0%
9/30/99......... 1.08(5) 35
Class II
--------
6/08/98-
9/30/98(3)...... 1.45%(4)(5) 0%
9/30/99......... 1.11(5) 35
</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 9/30/99
------- -------
<S> <C> <C>
"Dogs" of Wall Street Class A. 0.43% 0.23%
"Dogs" of Wall Street Class B. 0.58 0.22
"Dogs" of Wall Street Class
II........................... 0.50 0.19
</TABLE>
See Notes to Financial Statements
29
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -----------------------------------------------------------------------------
COMMON STOCK -- 61.2%
Aerospace & Military Technology -- 0.5%
United Technologies Corp............................... 40,000 $ 2,372,500
------------
Apparel & Textiles -- 0.2%
Oakley, Inc.+.......................................... 125,000 773,438
------------
Automotive -- 1.0%
Ford Motor Co.......................................... 36,600 1,836,863
General Motors Corp.................................... 39,000 2,454,562
------------
4,291,425
------------
Banks -- 4.0%
Bank of New York Co., Inc.............................. 50,000 1,671,875
BankAmerica Corp....................................... 35,400 1,971,337
Chase Manhattan Corp................................... 80,000 6,030,000
First Union Corp....................................... 17,500 622,344
Mellon Bank Corp....................................... 90,000 3,037,500
Summit Bancorp......................................... 140,000 4,541,250
------------
17,874,306
------------
Broadcasting & Media -- 5.4%
AT&T Corp.- Liberty Media Group+....................... 70,000 2,598,750
CBS Corp.+............................................. 90,000 4,162,500
Clear Channel Communications, Inc.+.................... 50,000 3,993,750
Comcast Corp., Class A+................................ 100,000 3,987,500
MediaOne Group, Inc.+.................................. 55,000 3,757,187
Time Warner, Inc....................................... 87,400 5,309,550
------------
23,809,237
------------
Chemicals -- 0.5%
du Pont (E.I.) de Nemours & Co......................... 40,000 2,435,000
------------
Communication Equipment -- 0.8%
Nokia Corp., Class A ADR............................... 35,000 3,143,438
QUALCOMM, Inc.+........................................ 2,000 378,375
------------
3,521,813
------------
Computers & Business Equipment -- 7.0%
Cisco Systems, Inc.+................................... 95,000 6,513,437
Dell Computer Corp.+................................... 100,000 4,181,250
EMC Corp.+............................................. 130,000 9,286,875
Hewlett-Packard Co..................................... 28,400 2,612,800
International Business Machines Corp................... 70,000 8,496,250
------------
31,090,612
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Conglomerate -- 5.4%
General Electric Co...................................... 110,000 $ 13,041,875
Schlumberger Ltd......................................... 90,000 5,608,125
Tyco International Ltd................................... 50,000 5,162,500
------------
23,812,500
------------
Department Stores -- 1.0%
Wal-Mart Stores, Inc..................................... 90,000 4,280,625
------------
Electronics -- 5.7%
Intel Corp............................................... 90,000 6,688,125
Micron Technology, Inc.+................................. 50,000 3,328,125
Motorola, Inc............................................ 50,000 4,400,000
National Semiconductor Corp.+............................ 80,000 2,440,000
Texas Instruments, Inc................................... 100,000 8,225,000
------------
25,081,250
------------
Energy Services -- 1.5%
Baker Hughes, Inc........................................ 100,000 2,900,000
Halliburton Co........................................... 90,000 3,690,000
------------
6,590,000
------------
Energy Sources -- 2.5%
Chevron Corp............................................. 30,000 2,662,500
Mobil Corp............................................... 45,000 4,533,750
Royal Dutch Petroleum Co................................. 68,000 4,016,250
------------
11,212,500
------------
Financial Services -- 6.4%
American Express Co...................................... 50,000 6,731,250
Capital One Financial Corp............................... 115,000 4,485,000
Citigroup, Inc........................................... 133,050 5,854,200
Merrill Lynch & Co., Inc................................. 40,000 2,687,500
Morgan Stanley Dean Witter & Co.......................... 50,000 4,459,375
PaineWebber Group, Inc................................... 50,000 1,812,500
Wells Fargo Co........................................... 60,000 2,377,500
------------
28,407,325
------------
Food, Beverage & Tobacco -- 0.5%
Philip Morris Cos., Inc.................................. 60,000 2,051,250
------------
Forest Products -- 0.4%
Georgia-Pacific Group.................................... 50,000 2,025,000
------------
</TABLE>
30
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENT--September 30, 1999 (continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK (continued)
Household Products -- 0.9%
Warner-Lambert Co........................................ 62,400 $ 4,141,800
------------
Leisure & Tourism -- 0.1%
Carnival Corp., Class A.................................. 10,000 435,000
------------
Medical Products -- 2.2%
Amgen, Inc.+............................................. 50,000 4,075,000
Johnson & Johnson Co..................................... 60,000 5,512,500
------------
9,587,500
------------
Metals & Mining -- 1.0%
Alcoa, Inc............................................... 70,000 4,344,375
------------
Pharmaceuticals -- 3.2%
Biogen, Inc.+............................................ 50,000 3,940,625
Merck & Co., Inc......................................... 60,000 3,888,750
Pfizer, Inc.............................................. 105,000 3,773,437
Schering-Plough Corp..................................... 60,000 2,617,500
------------
14,220,312
------------
Software -- 3.1%
Microsoft Corp.+......................................... 150,000 13,584,375
------------
Specialty Retail -- 2.7%
Dayton Hudson Corp....................................... 45,000 2,702,813
Gap, Inc................................................. 95,000 3,040,000
Home Depot, Inc.......................................... 90,000 6,176,250
------------
11,919,063
------------
Telecommunications -- 4.0%
AT&T Corp................................................ 111,300 4,841,550
Lucent Technologies, Inc................................. 90,000 5,838,750
MCI WorldCom, Inc.+...................................... 100,000 7,187,500
------------
17,867,800
------------
Utilities -- 1.2%
Enron Corp............................................... 100,000 4,125,000
PECO Energy, Inc.+....................................... 30,000 1,125,000
------------
5,250,000
------------
Total Common Stock (cost $191,835,909).................... 270,979,006
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
BONDS & NOTES -- 9.5%
Aerospace & Military Technology -- 0.9%
Lockheed Martin Corp.
7.25% due 5/15/06.............................. $ 4,000 $ 3,934,800
------------
Automotive -- 1.1%
Chrysler Corp.
7.45% due 3/01/27.............................. 5,000 4,948,700
------------
Electronics -- 0.6%
Texas Instruments, Inc.
6.13% due 2/01/06.............................. 3,000 2,793,660
------------
Financial Services -- 5.8%
Bear Stearns Cos., Inc.
6.63% due 1/15/04.............................. 5,000 4,925,150
CS First Boston Mortgage Securities Corp.
6.48% due 5/17/08.............................. 5,000 4,770,200
Donaldson Lufkin & Jenrette, Inc.
6.88% due 11/01/05............................. 2,000 1,958,180
Ford Motor Credit Co.
8.00% due 6/15/02.............................. 5,000 5,164,850
Goldman Sachs Group-L.P.*
6.60% due 7/15/02.............................. 5,000 4,969,419
Morgan Stanley Dean Witter & Co.
6.88% due 3/01/07.............................. 4,000 3,936,440
------------
25,724,239
------------
Food, Beverage & Tobacco -- 1.1%
Hershey Foods Corp.
7.20% due 8/15/27.............................. 5,000 4,719,950
------------
Total Bonds & Notes (cost $42,891,894)........... 42,121,349
------------
U.S. GOVERNMENT AND AGENCIES -- 24.2%
Federal National Mortgage Association -- 2.6%
5.63% due 3/15/01............................... 5,000 4,978,100
5.75% due 4/15/03 - 2/15/08..................... 4,620 4,504,656
6.50% due 9/01/10............................... 1,943 1,913,337
------------
11,396,093
------------
</TABLE>
31
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999--(continued)
<TABLE>
<CAPTION>
Principal Amount Value
Security Description (in thousands) (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCIES (continued)
Overseas Private Investment Corp. -- 2.7%
6.99% due 1/15/09............................... $11,665 $ 11,787,832
------------
Small Business Administration -- 1.0%
6.30% due 6/01/18............................... 4,794 4,588,331
------------
U.S. Treasury Bonds -- 2.4%
6.13% due 8/15/29............................... 10,500 10,603,320
------------
U.S. Treasury Notes -- 15.5%
5.50% due 8/31/01............................... 31,000 30,922,500
6.00% due 8/15/04 - 8/15/09. 37,500 37,835,115
------------
68,757,615
------------
Total U.S. Government and Agencies
(cost $108,226,938)............................. 107,133,191
------------
Total Investment Securities -- 94.9%
(cost $342,954,741)............................. 420,233,546
------------
REPURCHASE AGREEMENT -- 4.3%
Joint Repurchase Agreement with
State Street Bank & Trust Co.
(Note 2)
(cost $19,122,000)............................. 19,122 19,122,000
------------
TOTAL INVESTMENTS --
(cost $362,076,741)............................. 99.2% 439,355,546
Other assets less liabilities.................... 0.8 3,539,957
------- ------------
NET ASSETS -- 100.0% $442,895,503
======= ============
</TABLE>
- ------
+ Non-income producing security
* Resale restricted to qualified institutional buyers ADR ("American Depository
Receipt")
See Notes to Financial Statements
32
<PAGE>
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 92.5%
Aerospace & Military Technology -- 0.6%
United Technologies Corp. ................................. 15,000 $ 889,688
-----------
Apparel & Textiles -- 0.4%
Oakley, Inc.+.............................................. 95,000 587,813
-----------
Automotive -- 0.9%
Ford Motor Co. ............................................ 15,000 752,813
General Motors Corp. ...................................... 10,000 629,375
-----------
1,382,188
-----------
Banks -- 4.9%
Bank of New York Co., Inc. ................................ 30,000 1,003,125
BankAmerica Corp. ......................................... 17,400 968,962
Chase Manhattan Corp. ..................................... 35,000 2,638,125
Mellon Bank Corp. ......................................... 50,000 1,687,500
Summit Bancorp. ........................................... 40,000 1,297,500
-----------
7,595,212
-----------
Broadcasting & Media -- 7.9%
AT&T Corp.-Liberty Media Group, Inc.+...................... 60,000 2,227,500
CBS Corp.+................................................. 40,000 1,850,000
Clear Channel Communications, Inc.+........................ 20,000 1,597,500
Comcast Corp., Class A+.................................... 50,000 1,993,750
MediaOne Group, Inc.+...................................... 30,000 2,049,375
Time Warner, Inc. ......................................... 40,000 2,430,000
-----------
12,148,125
-----------
Chemicals -- 0.4%
du Pont (E.I.) de Nemours & Co. ........................... 10,000 608,750
-----------
Communication Equipment -- 5.8%
JDS Uniphase Corp.+........................................ 15,000 1,707,187
Nokia Corp., Class A ADR................................... 30,000 2,694,375
P-Com, Inc.+............................................... 95,000 665,000
QUALCOMM, Inc.............................................. 20,000 3,783,750
-----------
8,850,312
-----------
Computers & Business Equipment -- 11.0%
Cisco Systems, Inc.+....................................... 50,000 3,428,125
Dell Computer Corp.+....................................... 50,000 2,090,625
EMC Corp.+................................................. 80,000 5,715,000
Hewlett-Packard Co. ....................................... 9,500 874,000
International Business Machines Corp. ..................... 40,000 4,855,000
-----------
16,962,750
-----------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Conglomerate -- 6.8%
General Electric Co. .................................... 45,000 $ 5,335,312
Schlumberger Ltd. ....................................... 50,000 3,115,625
Tyco International Ltd. ................................. 20,000 2,065,000
------------
10,515,937
------------
Department Stores -- 0.9%
Wal-Mart Stores, Inc. ................................... 30,000 1,426,875
------------
Electronics -- 9.1%
Conexant Systems, Inc.+.................................. 20,000 1,453,125
Intel Corp. ............................................. 45,000 3,344,062
Micron Technology, Inc.+................................. 30,000 1,996,875
Motorola, Inc. .......................................... 30,000 2,640,000
National Semiconductor Corp.+............................ 40,000 1,220,000
Texas Instruments, Inc. ................................. 40,000 3,290,000
------------
13,944,062
------------
Energy Services -- 1.7%
Baker Hughes, Inc. ...................................... 40,000 1,160,000
Halliburton Co. ......................................... 35,000 1,435,000
------------
2,595,000
------------
Energy Sources -- 3.7%
Chevron Corp. ........................................... 15,000 1,331,250
Mobil Corp. ............................................. 25,000 2,518,750
Royal Dutch Petroleum Co. ............................... 30,000 1,771,875
------------
5,621,875
------------
Financial Services -- 8.4%
American Express Co. .................................... 25,000 3,365,625
Capital One Financial Corp. ............................. 60,000 2,340,000
Citigroup, Inc. ......................................... 67,500 2,970,000
Merrill Lynch & Co., Inc. ............................... 20,000 1,343,750
Morgan Stanley Dean Witter & Co. ........................ 20,000 1,783,750
PaineWebber Group, Inc. ................................. 30,000 1,087,500
------------
12,890,625
------------
Forest Products -- 0.3%
Georgia-Pacific Group.................................... 12,500 506,250
------------
Household Products -- 1.5%
Warner-Lambert Co. ...................................... 35,000 2,323,125
------------
</TABLE>
33
<PAGE>
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999--(continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (continued)
Internet Content -- 2.1%
Lycos, Inc.+............................................. 30,000 $ 1,503,750
Yahoo!, Inc.+............................................ 10,000 1,795,000
------------
3,298,750
------------
Leisure & Tourism -- 0.9%
Carnival Corp, Class A................................... 30,000 1,305,000
------------
Machinery -- 1.0%
Applied Materials, Inc.+................................. 20,000 1,557,500
------------
Medical Products -- 3.3%
Amgen, Inc.+............................................. 25,000 2,037,500
Genzyme Molecular Oncology+.............................. 1 4
Johnson & Johnson Co..................................... 33,000 3,031,875
------------
5,069,379
------------
Metals & Mining -- 1.0%
Alcoa, Inc............................................... 25,000 1,551,563
------------
Pharmaceuticals -- 3.4%
Biogen, Inc.+............................................ 20,000 1,576,250
Merck & Co., Inc......................................... 20,000 1,296,250
Pfizer, Inc.............................................. 30,000 1,078,125
Schering-Plough Corp..................................... 30,000 1,308,750
------------
5,259,375
------------
Software -- 4.1%
Microsoft Corp.+......................................... 70,000 6,339,375
------------
Specialty Retail -- 5.2%
Best Buy Co., Inc........................................ 20,000 1,241,250
Dayton Hudson Corp....................................... 20,000 1,201,250
Gap, Inc................................................. 47,500 1,520,000
Home Depot, Inc.......................................... 35,000 2,401,875
Tandy Corp............................................... 30,000 1,550,625
------------
7,915,000
------------
</TABLE>
<TABLE>
<CAPTION>
Shares/
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
Telecommunications -- 5.4%
AT&T Corp....................................... 55,000 $ 2,392,500
Lucent Technologies, Inc........................ 40,000 2,595,000
MCI WorldCom, Inc.+............................. 45,000 3,234,375
------------
8,221,875
------------
Utilities -- 1.8%
Enron Corp...................................... 40,000 1,650,000
PECO Energy Co. ................................ 30,000 1,125,000
------------
2,775,000
------------
Total Investment Securities -- 92.5%
(cost $102,809,467)............................. 142,141,404
------------
REPURCHASE AGREEMENT -- 4.4%
Joint Repurchase Agreement with
State Street Bank & Trust Co. (Note 2)
(cost $6,665,000)............................... $6,665 6,665,000
------------
TOTAL INVESTMENTS -- (cost $109,474,467)........ 96.9% 148,806,404
Other assets less liabilities.................... 3.1 4,834,359
------- ------------
NET ASSETS -- 100.0% $153,640,763
======= ============
</TABLE>
- ------
+Non-income producing security
ADR ("American Depository Receipt")
See Notes to Financial Statements
34
<PAGE>
SunAmerica Mid-Cap Growth Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCK -- 92.4%
Apparel & Textiles -- 0.3%
Oakley, Inc.+............................................... 40,000 $ 247,500
-----------
Banks -- 0.9%
First Union Corp............................................ 20,000 711,250
-----------
Broadcasting & Media -- 6.4%
AT&T Corp.-Liberty Media Group, Inc.+....................... 30,000 1,113,750
CD Radio, Inc.+............................................. 22,500 573,750
Comcast Corp., Class A+..................................... 30,000 1,196,250
Outdoor Systems, Inc.+...................................... 25,000 893,750
SFX Entertainment, Inc., Class A+........................... 15,000 457,500
USA Networks, Inc.+......................................... 14,800 573,500
-----------
4,808,500
-----------
Business Services -- 2.3%
Bemis Co., Inc. ............................................ 20,000 677,500
MedQuist, Inc.+............................................. 10,000 334,375
Perficient, Inc. +.......................................... 21,000 178,500
Professional Detailing, Inc.+............................... 20,000 518,750
-----------
1,709,125
-----------
Communication Equipment -- 3.1%
Ancor Communications, Inc.+................................. 15,000 363,750
At Home Corp., Series A+.................................... 10,418 431,696
Foundry Networks, Inc.+..................................... 250 31,500
JDS Uniphase Corp.+......................................... 5,000 569,063
Optibase Ltd.+.............................................. 35,000 245,000
Western Wireless Corp., Class A+............................ 15,000 672,656
-----------
2,313,665
-----------
Computers & Business Equipment -- 5.4%
EMC Corp.+.................................................. 30,000 2,143,125
Gadzoox Networks, Inc.+..................................... 10,000 538,750
Network Appliance, Inc.+.................................... 20,000 1,432,500
-----------
4,114,375
-----------
Electronics -- 12.0%
Applied Micro Circuits Corp.+............................... 10,000 570,000
Atmel Corp.+................................................ 40,000 1,352,500
Conexant Systems, Inc.+..................................... 5,000 363,281
Electroglas, Inc.+.......................................... 20,000 467,500
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Electronics (continued)
Flextronics International Ltd.+............................. 10,000 $ 581,875
Intel Corp. ................................................ 5,000 371,562
Lam Research Corp.+......................................... 15,000 915,000
LTX Corp.+.................................................. 40,000 547,500
Micron Technology, Inc.+.................................... 5,000 332,813
MKS Instruments, Inc.+...................................... 30,000 667,500
PMC-Sierra, Inc.+........................................... 5,000 462,500
Proxim, Inc.+............................................... 15,000 690,000
TranSwitch Corp.+........................................... 10,000 570,000
Varian Semiconductor Equipment Associates, Inc.+............ 15,000 315,938
Vitesse Semiconductor Corp.+................................ 10,000 853,750
-----------
9,061,719
-----------
Energy Services -- 9.3%
Baker Hughes, Inc........................................... 30,000 870,000
Diamond Offshore Drilling, Inc.............................. 30,000 1,001,250
Global Industries Ltd.+..................................... 20,000 162,500
Global Marine, Inc.+........................................ 40,000 657,500
Halliburton Co.............................................. 20,000 820,000
Marine Drilling Cos., Inc.+................................. 30,000 474,375
Niagara Mohawk Holdings, Inc.+.............................. 30,000 463,125
Patterson Energy, Inc.+..................................... 70,000 1,063,125
Petroleum Geo-Services ASA+................................. 10,000 190,625
Rowan Cos., Inc.+........................................... 40,000 650,000
Weatherford International, Inc.+............................ 20,000 640,000
-----------
6,992,500
-----------
Energy Sources -- 1.6%
Vastar Resources, Inc....................................... 20,000 1,251,250
-----------
Financial Services -- 3.8%
Bear Stearns Cos., Inc...................................... 10,500 403,594
Capital One Financial Corp.................................. 25,000 975,000
Lehman Brothers Holdings, Inc............................... 15,000 874,687
PIMCO Advisors Holdings L.P................................. 20,000 630,000
-----------
2,883,281
-----------
Forest Products -- 0.6%
Georgia-Pacific Corp........................................ 20,000 457,500
-----------
Health Services -- 1.2%
Orthodontic Centers of America, Inc.+....................... 50,000 875,000
-----------
</TABLE>
35
<PAGE>
SunAmerica Mid-Cap Growth Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999--(continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCK (continued)
Household Products -- 0.4%
Warner-Lambert Co........................................... 5,000 $ 331,875
-----------
Housing -- 1.2%
USG Corp.................................................... 20,000 950,000
-----------
Internet Content -- 7.5%
America Online, Inc.+....................................... 13,000 1,352,000
CMG Information Services, Inc.+............................. 10,800 1,107,000
CyberSource Corp.+.......................................... 10,000 553,750
Interliant, Inc.+........................................... 80,000 955,000
Juno Online Services, Inc.+................................. 40,000 647,500
MindSpring Enterprises, Inc.+............................... 10,000 276,875
Portal Software, Inc.+...................................... 1,500 58,125
Scient Corp.+............................................... 200 12,800
Verio, Inc.+................................................ 20,000 620,000
ZipLink, Inc.+.............................................. 10,000 105,000
-----------
5,688,050
-----------
Leisure & Tourism -- 0.7%
Park Place Entertainment Corp.+............................. 40,000 500,000
-----------
Machinery -- 1.0%
Kulicke & Soffa Industries, Inc.+........................... 30,000 729,375
-----------
Medical Products -- 3.1%
Affymetrix, Inc.+........................................... 5,000 492,188
Genzyme Molecular, Inc...................................... 1 4
Genzyme Surgical Products+.................................. 1,790 10,069
Invitrogen Corp.+........................................... 20,300 682,587
MedImmune, Inc.+............................................ 5,000 498,281
Millenium Pharmaceuticals, Inc.+............................ 10,000 650,000
-----------
2,333,129
-----------
Metals & Mining -- 1.7%
Lone Star Technologies, Inc.+............................... 40,000 800,000
Maverick Tube Corp.+........................................ 30,000 498,750
-----------
1,298,750
-----------
Pharmaceuticals -- 4.6%
Biogen, Inc.+............................................... 15,000 1,182,187
DUSA Pharmaceuticals, Inc.+................................. 35,000 490,000
Gilead Sciences, Inc.+...................................... 5,000 320,938
Human Genome Sciences, Inc.+................................ 5,000 368,750
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Pharmaceuticals (continued)
Immunex Corp.+.............................................. 5,000 $ 216,875
Schering-Plough Corp........................................ 10,000 436,250
SuperGen, Inc.+............................................. 20,000 458,750
-----------
3,473,750
-----------
Software -- 14.2%
Adobe Systems, Inc.......................................... 10,000 1,135,000
BEA Systems, Inc.+.......................................... 20,000 706,250
Bluestone Software, Inc.+................................... 15,000 346,875
BMC Software, Inc.+......................................... 10,000 715,625
Citrix Systems, Inc.+....................................... 20,000 1,238,750
Harbinger Corp.+............................................ 50,000 843,750
Interspeed, Inc.+........................................... 42,000 740,250
Macromedia, Inc.+........................................... 20,000 817,500
Microsoft Corp.+............................................ 15,000 1,358,437
National Instruments Corp.+................................. 30,000 1,060,313
Novell, Inc.+............................................... 20,000 413,750
Peregrine Systems, Inc.+.................................... 15,000 611,250
Siebel Systems, Inc.+....................................... 10,000 666,250
SOFTWORKS, Inc.+............................................ 10,000 51,250
-----------
10,705,250
-----------
Specialty Retail -- 1.7%
Abercrombie & Fitch Co.+.................................... 20,000 681,250
Dayton Hudson Corp.......................................... 10,000 600,625
-----------
1,281,875
-----------
Telecommunications -- 9.4%
ANTEC Corp.+................................................ 20,000 1,062,500
AT&T Corp................................................... 18,271 794,789
CIENA Corp.+................................................ 20,000 730,000
Crown Castle International Corp.+........................... 20,000 374,375
EchoStar Communications Corp.,
Class A+................................................... 15,000 1,362,187
General Instrument Corp.+................................... 15,000 721,875
Harmonic, Inc.+............................................. 10,000 1,308,125
MCI WorldCom, Inc.+......................................... 10,000 718,750
-----------
7,072,601
-----------
Total Common Stock
(cost $52,690,334).......................................... 69,790,320
-----------
</TABLE>
36
<PAGE>
SunAmerica Mid-Cap Growth Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999--(continued)
<TABLE>
<CAPTION>
Contracts/
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
- --------------------------------------------------------------------------------
PUT OPTION -- 0.5%
Morgan Stanley High Tech
Index $1,250 exp. 10/99
(cost $432,240)................................. 80 $ 381,000
-----------
Total Investment Securities -- 92.9%
(cost $53,122,574)............................... 70,171,320
-----------
REPURCHASE AGREEMENT -- 7.5%
Joint Repurchase Agreement with State Street Bank
& Trust Co. (Note 2)
(cost $5,648,000)............................... $5,648 5,648,000
-----------
TOTAL INVESTMENTS -- (cost $58,770,574)........... 100.4% 75,819,320
Liabilities in excess of other assets............. (0.4) (321,625)
------- -----------
NET ASSETS -- 100.0% $75,497,695
======= ===========
</TABLE>
- ------
+Non-income producing security
See Notes to Financial Statements
37
<PAGE>
SunAmerica Small Company Growth Fund
PORTFOLIO OF INVESTMENT--September 30, 1999
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -----------------------------------------------------------------------------
COMMON STOCK -- 88.1%
Aerospace & Military Technology -- 1.0%
Heico Corp. ........................................... 124,300 $ 2,392,775
------------
Apparel & Textiles -- 0.4%
Oakley, Inc.+.......................................... 150,000 928,125
------------
Banks -- 0.2%
Hamilton Bancorp, Inc.+................................ 19,500 414,375
------------
Broadcasting & Media -- 7.2%
Cablevision Systems Corp., Class A+.................... 36,600 2,662,650
Cinar Films, Inc., Class B+............................ 108,400 3,279,100
Clear Channel Communications, Inc.+.................... 36,686 2,930,294
Comcast Corp., Class A+................................ 65,400 2,607,825
USA Networks, Inc.+.................................... 42,500 1,646,875
ValueVision International, Inc., Class A+.............. 67,000 1,742,000
Ziff-Davis, Inc.+...................................... 100,000 1,612,500
------------
16,481,244
------------
Business Services -- 5.6%
Amdocs, Ltd. .......................................... 41,300 867,300
AnswerThink Consulting Group+.......................... 95,000 914,375
CheckFree Holdings Corp.+.............................. 64,400 2,648,450
Entrust Technologies, Inc.+............................ 76,400 1,714,225
Mobile Mini, Inc.+..................................... 115,300 2,522,187
RCM Technologies, Inc.+................................ 48,700 523,525
The Kroll O'Gara Co.+.................................. 118,600 1,979,138
USWeb Corp.+........................................... 48,900 1,677,881
------------
12,847,081
------------
Communication Equipment -- 3.0%
AirGate PCS, Inc.+..................................... 34,400 855,700
At Home Corp., Series A+............................... 40,100 1,661,644
Carrier Access Corp.+.................................. 17,200 719,175
Foundry Networks, Inc.+................................ 5,750 724,500
IXnet, Inc.+........................................... 102,700 1,553,337
Redback Networks, Inc.+................................ 14,000 1,512,000
------------
7,026,356
------------
Computers & Business Equipment -- 1.9%
BrightStar Information Technology Group, Inc. ......... 25,000 82,813
Gadzoox Networks, Inc.+................................ 20,000 1,077,500
Network Appliance, Inc.+............................... 44,100 3,158,662
------------
4,318,975
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Education -- 0.8%
Career Education Corp.+.................................. 65,000 $ 1,885,000
------------
Electronics -- 6.0%
Lattice Semiconductor Corp.+............................. 125,200 3,716,875
Linear Technology Corp. ................................. 29,800 1,751,681
National Semiconductor Corp.+............................ 104,200 3,178,100
Powerwave Technologies, Inc.+............................ 60,000 2,893,125
Proxim, Inc.+............................................ 46,600 2,143,600
------------
13,683,381
------------
Energy Services -- 10.4%
BJ Services Co.+......................................... 137,000 4,358,312
Diamond Offshore Drilling, Inc. ......................... 76,600 2,556,525
Global Industries Ltd.+.................................. 68,200 554,125
Global Marine, Inc.+..................................... 83,400 1,370,888
Offshore Logistics, Inc. ................................ 158,600 1,635,563
Precision Drilling Corp.+................................ 142,400 3,301,900
Smith International, Inc.+............................... 98,300 3,981,150
Transocean Offshore, Inc. ............................... 90,600 2,774,625
Weatherford International, Inc.+......................... 101,300 3,241,600
------------
23,774,688
------------
Financial Services -- 1.4%
Morgan Stanley Dean Witter & Co. ........................ 24,700 2,202,932
Raymond James Financial, Inc. ........................... 47,100 939,056
------------
3,141,988
------------
Health Services -- 0.4%
Sunrise Assisted Living, Inc.+........................... 38,400 1,020,000
------------
Internet Content -- 21.9%
Allaire Corp.+........................................... 39,500 2,212,000
America Online, Inc.+.................................... 40,300 4,191,200
Beyond.com Corp. ........................................ 64,400 788,900
Clarent Corp.+........................................... 29,600 1,507,750
CMG Information Services, Inc.+.......................... 21,300 2,183,250
Covad Communications Group, Inc.+........................ 35,300 1,538,859
Critical Path, Inc.+..................................... 23,000 927,906
CyberSource Corp.+....................................... 39,200 2,170,700
DoubleClick, Inc.+*...................................... 19,400 2,311,025
Engage Technologies, Inc.+............................... 90,000 3,391,875
Inktomi Corp.+........................................... 25,000 3,000,781
Internap Network Services Corp.+......................... 12,000 535,500
Lycos, Inc.+............................................. 49,000 2,456,125
NetGravity, Inc.+........................................ 25,600 846,400
Netopia, Inc.+........................................... 43,200 1,722,600
NetZero, Inc.+........................................... 1,000 26,000
</TABLE>
38
<PAGE>
SunAmerica Small Company Growth Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999--(continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK (continued)
Internet Content (continued)
Phone.com., Inc.+........................................ 4,500 $ 681,750
Portal Software, Inc.+................................... 34,100 1,321,375
RealNetworks, Inc.+...................................... 21,500 2,248,094
Rhythms NetConnections, Inc.+............................ 29,500 1,017,750
Stamps.com, Inc.+........................................ 20,000 695,000
Ticketmaster Online-Citysearch, Inc.+.................... 67,400 1,630,238
VeriSign, Inc.+.......................................... 24,900 2,651,850
Vignette Corp.+.......................................... 43,100 3,900,550
Yahoo!, Inc.+............................................ 34,500 6,192,750
------------
50,150,228
------------
Leisure & Tourism -- 1.4%
Bally Total Fitness Holding Corp.+....................... 95,200 2,909,550
Steiner Leisure Ltd.+.................................... 9,500 237,500
------------
3,147,050
------------
Machinery -- 0.7%
Kulicke & Soffa Industries, Inc.+........................ 71,900 1,748,069
------------
Medical Products -- 4.9%
Affymetrix, Inc.+........................................ 24,600 2,421,562
Alkermes, Inc.+.......................................... 73,500 2,117,719
Genzyme Corp.+........................................... 30,000 1,351,875
Invitrogen Corp.+........................................ 26,100 877,613
MedImmune, Inc.+......................................... 24,700 2,461,509
Millenium Pharmaceuticals, Inc.+......................... 32,800 2,132,000
------------
11,362,278
------------
Pharmaceuticals -- 2.6%
Cephalon, Inc.+.......................................... 130,000 2,335,938
Myriad Genetics, Inc.+................................... 81,700 1,388,900
QLT PhotoTherapeutics, Inc.+............................. 30,700 2,346,631
------------
6,071,469
------------
Restaurants -- 0.7%
Outback Steakhouse, Inc.+................................ 60,000 1,528,125
------------
Software -- 8.7%
BroadVision, Inc.+....................................... 32,600 4,337,837
Clarify, Inc.+........................................... 82,700 4,160,844
E.piphany, Inc.+......................................... 18,400 897,000
Fundtech Ltd. ........................................... 65,000 1,450,313
Legato Systems, Inc.+.................................... 62,400 2,720,250
Macromedia, Inc.+........................................ 38,100 1,557,337
Micromuse, Inc.+......................................... 40,400 2,595,700
Red Hat, Inc.+........................................... 22,500 2,160,000
------------
19,879,281
------------
</TABLE>
<TABLE>
<CAPTION>
Shares/Contracts/
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
Specialty Retail -- 6.3%
Abercrombie & Fitch Co.+....................... 84,400 $ 2,874,875
Movado Group, Inc. ............................ 42,800 984,400
Sotheby's Holdings, Inc., Class A.............. 52,100 1,344,831
Sunglass Hut International, Inc.+.............. 258,200 2,727,238
Talbots, Inc. ................................. 90,200 4,053,362
Yankee Candle Co., Inc.+....................... 126,700 2,446,894
------------
14,431,600
------------
Telecommunications -- 1.7%
Copper Mountain Networks, Inc.+................ 9,100 797,388
DSET Corp.+.................................... 193,500 2,842,031
GST Telecommunications, Inc.+.................. 27,500 193,359
------------
3,832,778
------------
Transportation -- 0.9%
Oshkosh Truck Corp. ........................... 76,500 2,036,813
------------
Total Common Stock (cost $158,587,977).......... 202,101,679
------------
PUT OPTIONS -- 1.0%
DoubleClick, Inc. $110 exp. 11/99.............. 190 166,250
Morgan Stanley High Tech Index $1,220 exp.
10/99......................................... 208 717,600
S & P 500 Index $1,300 exp. 10/99.............. 204 563,550
S & P 500 Index $1,275 exp. 11/99.............. 206 800,825
------------
Total Put Options
(cost $2,624,532).............................. 2,248,225
------------
Total Investment Securities -- 89.1% (cost
$161,212,509).................................. 204,349,904
------------
REPURCHASE AGREEMENT -- 10.3%
Joint Repurchase Agreement with State Street
Bank & Trust Co. (Note 2)
(cost $23,555,000)............................ $23,555 23,555,000
------------
TOTAL INVESTMENTS --
(cost $184,767,509)............................ 99.4% 227,904,904
Total written options........................... (0.2) (454,800)
Other assets less liabilities................... 0.8 1,905,690
------- ------------
NET ASSETS -- 100.0% $229,355,794
======= ============
</TABLE>
- ------
+Non-income producing security.
* The security or a portion thereof has been segregated as collateral for the
written option contracts.
39
<PAGE>
SunAmerica Small Company Growth Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999--(continued)
Open Covered Written Options
<TABLE>
<CAPTION>
Expiration Strike
Options Contracts Date Price Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DoubleClick, Inc. (call)................. 190 11/99 $ 115 $(304,000)
Morgan Stanley High Tech Index (put)..... 208 10/99 1,100 (150,080)
---------
Total Open Covered Written Options
(proceeds $506,384)................................................. $(454,800)
=========
</TABLE>
- ------
See Notes to Financial Statements
40
<PAGE>
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -----------------------------------------------------------------------------
COMMON STOCK -- 89.9%
Automotive -- 0.9%
Ford Motor Co. ......................................... 20,000 $ 1,003,750
General Motors Corp. ................................... 15,000 944,063
-----------
1,947,813
-----------
Banks -- 4.7%
Bank of New York Co., Inc. ............................. 30,000 1,003,125
BankAmerica Corp. ...................................... 20,400 1,136,025
Chase Manhattan Corp. .................................. 45,000 3,391,875
Firstar Corp. .......................................... 40,000 1,025,000
First Union Corp. ...................................... 17,500 622,344
Mellon Bank Corp. ...................................... 60,000 2,025,000
Summit Bancorp. ........................................ 30,000 973,125
-----------
10,176,494
-----------
Broadcasting & Media -- 8.4%
AT&T Corp.-Liberty Media Group+......................... 110,000 4,083,750
CBS Corp.+.............................................. 45,300 2,095,125
Clear Channel Communications, Inc.+..................... 35,000 2,795,625
Comcast Corp., Class A+................................. 60,000 2,392,500
Disney (Walt) Co. ...................................... 25,000 646,875
MediaOne Group, Inc.+................................... 50,000 3,415,625
Time Warner, Inc. ...................................... 50,000 3,037,500
-----------
18,467,000
-----------
Chemicals -- 0.6%
du Pont (E.I.) de Nemours & Co. ........................ 20,000 1,217,500
-----------
Communication Equipment -- 2.8%
JDS Uniphase Corp.+..................................... 20,000 2,276,250
Nokia Corp., Class A ADR................................ 30,000 2,694,375
QUALCOMM, Inc.+......................................... 6,000 1,135,125
-----------
6,105,750
-----------
Computers & Business Equipment -- 9.8%
Cisco Systems, Inc.+.................................... 60,000 4,113,750
Dell Computer Corp.+.................................... 60,000 2,508,750
EMC Corp.+.............................................. 100,000 7,143,750
Hewlett-Packard Co. .................................... 12,600 1,159,200
Honeywell, Inc. ........................................ 15,000 1,669,687
International Business Machines Corp. .................. 40,000 4,855,000
-----------
21,450,137
-----------
Conglomerate -- 6.9%
General Electric Co. ................................... 65,000 7,706,562
Schlumberger Ltd. ...................................... 60,000 3,738,750
Tyco International Ltd. ................................ 35,000 3,613,750
-----------
15,059,062
-----------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Department Stores -- 0.9%
Wal-Mart Stores, Inc. .................................... 40,000 $ 1,902,500
-----------
Electronics -- 8.6%
Conexant Systems, Inc. ................................... 30,900 2,245,078
Intel Corp. .............................................. 65,000 4,830,313
Micron Technology, Inc.+.................................. 40,000 2,662,500
Motorola, Inc. ........................................... 40,000 3,520,000
National Semiconductor Corp.+............................. 50,000 1,525,000
Texas Instruments, Inc. .................................. 50,000 4,112,500
-----------
18,895,391
-----------
Energy Services -- 1.7%
Baker Hughes, Inc. ....................................... 60,000 1,740,000
Halliburton Co. .......................................... 50,000 2,050,000
-----------
3,790,000
-----------
Energy Sources -- 5.1%
Chevron Corp. ............................................ 15,000 1,331,250
Coastal Corp. ............................................ 60,000 2,456,250
Exxon Corp. .............................................. 27,000 2,050,312
Mobil Corp. .............................................. 30,000 3,022,500
Royal Dutch Petroleum Co. ................................ 40,000 2,362,500
-----------
11,222,812
-----------
Financial Services -- 8.2%
American Express Co. ..................................... 35,000 4,711,875
Capital One Financial Corp. .............................. 70,000 2,730,000
Citigroup, Inc. .......................................... 80,550 3,544,200
Federal National Mortgage Association..................... 35,000 2,194,062
Merrill Lynch & Co., Inc. ................................ 25,000 1,679,688
Morgan Stanley Dean Witter & Co. ......................... 30,000 2,675,625
Wells Fargo Co. .......................................... 10,000 396,250
-----------
17,931,700
-----------
Food, Beverage & Tobacco -- 1.8%
Anheuser-Busch Cos., Inc. ................................ 40,000 2,802,500
Philip Morris Cos., Inc. ................................. 35,000 1,196,563
-----------
3,999,063
-----------
Forest Products -- 0.5%
Georgia-Pacific Group..................................... 30,000 1,215,000
-----------
Household Products -- 1.2%
Warner-Lambert Co......................................... 40,000 2,655,000
-----------
Internet Content -- 1.1%
Lycos, Inc.+.............................................. 50,000 2,506,250
-----------
</TABLE>
41
<PAGE>
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999--(continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK (continued)
Leisure & Tourism -- 0.6%
Carnival Corp. ........................................... 30,000 $ 1,305,000
-----------
Medical Products -- 3.1%
Amgen, Inc.+.............................................. 35,000 2,852,500
Genzyme Molecular Oncology+............................... 1 4
Johnson & Johnson Co. .................................... 44,000 4,042,500
-----------
6,895,004
-----------
Metals & Mining -- 1.0%
Alcoa, Inc. .............................................. 35,000 2,172,188
-----------
Pharmaceuticals -- 4.0%
Abbott Laboratories, Inc. ................................ 45,000 1,653,750
Biogen, Inc.+............................................. 30,000 2,364,375
Merck & Co., Inc. ........................................ 30,000 1,944,375
Pfizer, Inc. ............................................. 45,000 1,617,188
Schering-Plough Corp. .................................... 30,000 1,308,750
-----------
8,888,438
-----------
Restaurants -- 1.4%
McDonald's Corp. ......................................... 70,000 3,010,000
-----------
Software -- 3.7%
Microsoft Corp.+.......................................... 90,000 8,150,625
-----------
Specialty Retail -- 4.3%
Best Buy Co., Inc. ....................................... 30,000 1,861,875
Dayton Hudson Corp. ...................................... 15,000 900,937
Gap, Inc. ................................................ 62,500 2,000,000
Home Depot, Inc. ......................................... 40,000 2,745,000
Tandy Corp. .............................................. 40,000 2,067,500
-----------
9,575,312
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares/
Principal Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
Telecommunications -- 6.3%
AT&T Corp. ..................................... 60,000 $ 2,610,000
GTE Corp. ...................................... 30,000 2,306,250
Lucent Technologies, Inc. ...................... 50,000 3,243,750
MCI WorldCom, Inc.+............................. 50,000 3,593,750
SBC Communications, Inc. ....................... 40,000 2,042,500
------------
13,796,250
------------
Utilities -- 2.3%
Energy East Corp. .............................. 50,000 1,187,500
Enron Corp. .................................... 60,000 2,475,000
PECO Energy, Inc.+.............................. 40,000 1,500,000
------------
5,162,500
------------
Total Common Stock
(cost $153,370,386)............................. 197,496,789
------------
U.S. TREASURY BONDS -- 1.5%
5.25% due 2/15/29
(cost $3,549,763)............................... $ 3,750 3,281,850
------------
Total Investment Securities -- 91.4%
(cost $156,920,149)............................. 200,778,639
------------
REPURCHASE AGREEMENT -- 8.4%
Joint Repurchase Agreement with State Street
Bank & Trust Co. (Note 2) (cost $18,367,000)... 18,367 18,367,000
------------
TOTAL INVESTMENTS --
(cost $175,287,149)............................. 99.8% 219,145,639
Other assets less liabilities.................... 0.2 440,625
------- ------------
NET ASSETS -- 100.0% $219,586,264
======= ============
</TABLE>
- ------
+ Non-income producing security
ADR ("American Depository Receipt")
See Notes to Financial Statements
42
<PAGE>
SunAmerica "Dogs" of Wall Street Fund
PORTFOLIO OF INVESTMENTS--September 30, 1999
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCK -- 99.7%
Automotive -- 12.3%
Cooper Tire & Rubber Co.................................. 311,147 $ 5,483,966
General Motors Corp. .................................... 84,503 5,318,408
Genuine Parts Co. ....................................... 186,440 4,952,312
Goodyear Tire & Rubber Co. .............................. 122,664 5,903,205
------------
21,657,891
------------
Business Services -- 3.2%
Bemis Co., Inc. ......................................... 166,039 5,624,571
------------
Chemicals -- 12.4%
Air Products & Chemicals, Inc. .......................... 160,371 4,660,782
du Pont (E.I.) de Nemours & Co. ......................... 111,187 6,768,509
Nalco Chemical Co. ...................................... 206,771 10,441,935
------------
21,871,226
------------
Conglomerate -- 3.0%
National Service Industries, Inc. ....................... 166,883 5,256,815
------------
Department Stores -- 3.2%
May Department Stores Co. ............................... 153,299 5,585,832
------------
Electronics -- 3.6%
Emerson Electric Co. .................................... 100,224 6,332,904
------------
Energy Sources -- 8.0%
Chevron Corp. ........................................... 73,209 6,497,299
Royal Dutch Petroleum Co. ............................... 127,092 7,506,371
------------
14,003,670
------------
Entertainment Products -- 3.7%
Eastman Kodak Co. ....................................... 85,750 6,468,766
------------
Financial Services -- 3.7%
J.P. Morgan & Co., Inc. ................................. 57,464 6,565,262
------------
Food, Beverage & Tobacco -- 19.7%
Bestfoods................................................ 113,230 5,491,655
ConAgra, Inc. ........................................... 192,638 4,346,395
H.J. Heinz & Co. ........................................ 108,378 4,660,254
Kellogg Co. ............................................. 180,635 6,762,523
Philip Morris Cos., Inc. ................................ 113,100 3,866,606
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Food, Beverage & Tobacco (continued)
UST, Inc. .............................................. 179,652 $ 5,423,245
Winn-Dixie Stores, Inc. ................................ 136,789 4,060,923
------------
34,611,601
------------
Forest Products -- 3.8%
International Paper Co. ................................ 140,898 6,771,910
------------
Household Products -- 2.7%
International Flavors & Fragrances, Inc. ............... 140,289 4,839,971
------------
Housing -- 2.4%
Newell Rubbermaid, Inc. ................................ 150,047 4,285,717
------------
Machinery -- 4.2%
Caterpillar, Inc. ...................................... 134,921 7,395,357
------------
Metals & Mining -- 4.6%
Minnesota Mining & Manufacturing Co. ................... 84,219 8,090,288
------------
Specialty Retail -- 2.3%
American Greetings Corp., Class A....................... 153,864 3,961,998
------------
Telecommunications -- 4.1%
Alltel Corp. ........................................... 103,161 7,259,955
------------
Transportation -- 2.8%
Norfolk Southern Corp. ................................. 198,850 4,871,825
------------
Total Investment Securities -- 99.7%
(cost $185,496,779)..................................... 175,455,559
------------
TOTAL INVESTMENTS --
(cost $185,496,779)..................................... 99.7% 175,455,559
Other assets less liabilities............................ 0.3 538,817
------- ------------
NET ASSETS -- 100.0% $175,994,376
======= ============
</TABLE>
See Notes to Financial Statements
43
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS--September 30, 1999
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 indirect wholly-owned subsidiary of
American International Group, Inc. 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 Growth Opportunities Fund ("Growth Opportunities Fund"), formerly
SunAmerica 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.
Growth Opportunities 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.
44
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (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
45
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (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 September 30, 1999, Balanced Assets Fund, Blue Chip Growth Fund,
Growth Opportunities Fund, Small Company Growth Fund and Growth and Income
Fund had a 6.6%, 2.3%, 2.0%, 8.1% and 6.3% undivided interest, respectively,
which represented $19,122,000, $6,665,000, $5,648,000, $23,555,000 and
$18,367,000, 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 5.05% dated 9/30/99, in
the principal amount of $289,284,000 repurchase price $289,324,580 due
10/01/99, collaterized by $25,755,000 U.S. Treasury Note 4.50% due 9/30/00,
$50,500,000 U.S. Treasury Note 6.375% due 3/31/01, $25,510,000 U.S. Treasury
Note 4.625% due 12/31/00, $49,710,000 U.S. Treasury Note 5.75% due 10/31/00,
$75,315,000 U.S. Treasury Note 6.125% due 7/31/00, $40,090,000 U.S. Treasury
Note 3.875% due 1/15/09, $45,000 U.S. Treasury Bond 7.25% due 5/15/16,
approximate aggregate collateral value $295,517,691.
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. Expenses incurred in connection with the
organization of the "Dogs" of Wall Street Fund 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.
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.
46
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (continued)
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.
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, 1999, 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.................. $ (313,573) $ 313,573 $ --
Blue Chip Growth Fund................. (612,712) 612,712 --
Growth Opportunities Fund............. (700,529) 700,529 --
Small Company Growth Fund............. (2,304,110) 2,304,110 --
Growth and Income Fund................ (951,789) 951,789 --
"Dogs" of Wall Street Fund............ -- 10,862 (10,862)
</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.
47
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (continued)
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
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 fiscal year ended September 30, 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................. (7,471) (13,314,469)
Written options assigned during the period........ 322 160,029
Written options closed during the period.......... 7,653 11,738,319
Net realized gain on written options closed....... -- 1,559,435
------ ------------
Written option contracts as of 9/30/99............ (398) $ (506,384)
====== ============
</TABLE>
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 fiscal year ended September 30,
1999, SAAMCo earned fees in the amounts stated on the Statement of
Operations.
48
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (continued)
For the fiscal year ended September 30, 1999, SAAMCo has agreed to reimburse
expenses as follows:
<TABLE>
<S> <C>
Balanced Assets Class II................................ $ 27,876
Blue Chip Growth Class II .............................. 21,276
Growth Opportunities Class II........................... 22,232
Small Company Growth Class II........................... 27,286
Small Company Growth Class Z............................ 44,107
Growth and Income Class II.............................. 19,635
Growth and Income Class Z............................... 36,877
"Dogs" of Wall Street Class A........................... 62,815
"Dogs" of Wall Street Class B........................... 103,645
"Dogs" of Wall Street Class II.......................... 131,812
</TABLE>
The Trust, on behalf of each Fund, has a Distribution Agreement with
SunAmerica Capital Services, Inc. ("SACS"), an affiliate of the Adviser.
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 Fund
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 fiscal year ended
September 30, 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
49
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (continued)
of each Fund's Class B and Class II shares. SACS has advised the Funds that
for the fiscal year ended September 30, 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.... $1,479,533 $1,036,681 $253,564 $178,476
Blue Chip Growth Fund... 298,085 139,528 119,176 86,111
Growth Opportunities
Fund................... 130,444 69,410 43,815 10,075
Small Company Growth
Fund................... 390,768 198,821 140,202 221,333
Growth and Income Fund.. 730,023 379,034 252,049 223,383
"Dogs" of Wall Street
Fund................... 1,180,588 163,406 876,005 180,715
<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.... $ 110,708 $ 38,363 $ 72,345 $ 1,443
Blue Chip Growth Fund... 6,906 3,335 3,571 1,481
Growth Opportunities
Fund................... 8,863 6,906 1,957 942
Small Company Growth
Fund................... 33,111 10,190 22,921 358
Growth and Income Fund.. 112,774 31,990 80,784 8,210
"Dogs" of Wall Street
Fund................... 1,298,256 61,658 1,236,598 60,921
</TABLE>
The Trust has entered into a Service Agreement with SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Adviser. 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 fiscal year ended September 30, 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 September 30, 1999
-------------------------- ------------------------
Class A Class B Class II Class A Class B Class II
-------- -------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Balanced Assets Fund.... $518,107 $401,122 $ 4,339 $47,003 $32,875 $ 1,449
Blue Chip Growth Fund... 207,879 100,604 535 18,845 9,036 133
Growth Opportunities
Fund................... 108,900 29,879 492 10,393 3,012 165
Small Company Growth
Fund................... 310,544 171,678 2,418 26,957 14,306 528
Growth and Income Fund.. 168,970 238,791 9,772 15,925 22,419 1,801
"Dogs" of Wall Street
Fund................... 58,970 103,241 150,474 5,039 10,471 17,649
</TABLE>
50
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (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 year ended September 30, 1999 were as follows:
<TABLE>
<CAPTION>
Balanced Blue Chip Growth Small Company Growth and "Dogs" of
Assets Growth Opportunities Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
------------ ----------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Purchases (excluding
U.S. government
securities)............ $167,037,611 $95,962,442 $133,296,935 $352,915,206 $142,163,964 $169,662,818
Sales (excluding U.S.
government securities). 195,302,527 90,996,318 136,784,817 370,290,438 111,862,292 47,738,928
Purchases of U.S.
government securities.. 352,566,348 1,178,583 585,435 -- 3,548,242 --
Sales of U.S. government
securities............. 295,090,054 1,022,984 529,382 -- -- --
</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 tax purposes, including short-term securities, were as
follows:
<TABLE>
<CAPTION>
Balanced Blue Chip Growth Small Company Growth and "Dogs" of
Assets Growth Opportunities Growth Income Wall Street
Fund Fund Fund Fund Fund Fund
------------ ------------ ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Cost (tax basis)........ $363,122,113 $110,240,132 $58,852,587 $185,444,017 $176,156,072 $185,763,332
============ ============ =========== ============ ============ ============
Appreciation............ $ 83,713,707 $ 40,287,801 $19,055,459 $ 53,442,491 $ 46,509,046 $ 9,188,900
Depreciation............ (7,480,274) (1,721,529) (2,088,726) (10,981,604) (3,519,479) (19,496,673)
------------ ------------ ----------- ------------ ------------ ------------
Net unrealized
appreciation
(depreciation)......... $ 76,233,433 $ 38,566,272 $16,966,733 $ 42,460,887 $ 42,989,567 $(10,307,773)
============ ============ =========== ============ ============ ============
</TABLE>
51
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (continued)
Note 6. Capital Share Transactions
Transactions in capital shares of each class of each fund were as follows:
<TABLE>
<CAPTION>
Balanced Assets Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------- --------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
-------------------------- ------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------------ ------------- ---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 3,741,527 $ 74,343,358 2,254,719 $ 41,748,177 2,870,181 $ 57,135,480 1,661,113 $ 30,769,547
Reinvested
dividends...... 968,048 17,924,078 1,076,384 18,447,868 745,946 13,710,236 1,020,631 17,400,232
Shares redeemed. (2,480,966) (49,258,207) (1,961,244) (36,288,098) (3,987,318) (79,355,310) (2,853,943) (52,660,559)
----------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease)..... 2,228,609 $ 43,009,229 1,369,859 $ 23,907,947 (371,191) $ (8,509,594) (172,199) $ (4,490,780)
=========== ============= ========== ============ ========== ============ ========== ============
<CAPTION>
Balanced Assets Fund
--------------------------
Class II
--------------------------
For the period
February 2, 1999* through
September 30, 1999
-------------------------
Shares Amount
------------ -------------
<S> <C> <C>
Shares sold..... 476,801 $9,535,732
Reinvested
dividends...... 1,076 21,568
Shares redeemed. (28,795) (587,100)
----------- -------------
Net increase.... 449,082 $8,970,200
=========== =============
</TABLE>
* Inception of the class
52
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (continued)
<TABLE>
<CAPTION>
Blue Chip Growth Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
----------------------------------------------------- -------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
--------------------------- ------------------------ ----------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------------ ------------- ---------- ------------ ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,395,707 $ 31,876,762 735,069 $ 14,494,612 1,093,294 $23,531,927 845,608 $ 16,159,070
Reinvested
dividends...... 280,737 5,589,485 464,861 8,130,414 143,947 2,734,989 270,094 4,553,792
Shares redeemed. (1,177,480) (26,698,827) (656,032) (13,020,484) (1,075,965) (22,939,437) (1,011,200) (19,292,333)
------------ ------------- ---------- ------------ ---------- ----------- ---------- ------------
Net increase.... 498,964 $ 10,767,420 543,898 $ 9,604,542 161,276 $ 3,327,479 104,502 $ 1,420,529
============ ============= ========== ============ ========== =========== ========== ============
<CAPTION>
Blue Chip Growth Fund
---------------------------
Class II
---------------------------
For the period
February 2, 1999* through
September 30, 1999
---------------------------
Shares Amount
------------ -------------
<S> <C> <C>
Shares sold..... 36,737 $ 827,690
Reinvested
dividends...... -- --
Shares redeemed. (1,762) (40,936)
------------ -------------
Net increase.... 34,975 $ 786,754
============ =============
<CAPTION>
Growth Opportunities Fund
--------------------------------------------------------------------------------------------------------
Class A Class B
----------------------------------------------------- -------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
--------------------------- ------------------------ ----------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------------ ------------- ---------- ------------ ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 647,573 $ 14,130,770 1,824,307 $ 32,027,068 446,721 $ 8,713,279 141,012 $ 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. (674,346) (14,174,781) (2,146,098) (38,180,050) (388,091) (7,334,459) (322,783) (5,561,595)
------------ ------------- ---------- ------------ ---------- ----------- ---------- ------------
Net increase
(decrease)..... 133,604 $ 2,672,772 141,257 $ 1,260,424 109,249 $ 2,195,329 (40,644) $ (993,834)
============ ============= ========== ============ ========== =========== ========== ============
<CAPTION>
Mid-Cap Growth Fund
---------------------------
Class II
---------------------------
For the Period
February 2, 1999* through
September 30, 1999
---------------------------
Shares Amount
------------ -------------
<S> <C> <C>
Shares sold..... 52,670 $ 1,119,971
Reinvested
dividends...... -- --
Shares redeemed. (2,927) (63,536)
------------ -------------
Net increase.... 49,743 $ 1,056,435
============ =============
</TABLE>
* Inception of the class
53
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (continued)
<TABLE>
<CAPTION>
Small Company Growth Fund
---------------------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------- ---------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
------------------------ -------------------------- ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 7,435,823 $180,133,194 8,331,031 $ 192,281,985 1,827,575 $ 44,195,336 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. (7,884,868) (192,885,231) (10,040,494) (233,026,673) (2,442,035) (58,751,232) (3,358,273) (75,980,708)
---------- ------------ ----------- ------------- ---------- ------------- ---------- ------------
Net increase
(decrease)..... (92,166) $ (5,332,472) (1,041,970) $ (26,173,321) (380,725) $ (9,906,899) (1,189,877) $(27,347,950)
========== ============ =========== ============= ========== ============= ========== ============
<CAPTION>
Small Company Growth Fund
---------------------------------------------------------------------------------------------------------
Class II Class Z
---------------------------------------------------- ---------------------------------------------------
For the For the period For the For the
year ended February 2, 1998* through year ended year ended
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
------------------------ -------------------------- ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 153,773 $ 3,914,562 9,190 $ 203,790 17,600 $ 456,470 27,354 $ 655,620
Reinvested
dividends...... 703 13,966 -- -- 2,049 43,229 4,828 106,220
Shares redeemed. (63,916) (1,601,062) (2) (40) (11,228) (301,784) (36,314) (803,485)
---------- ------------ ----------- ------------- ---------- ------------- ---------- ------------
Net increase (decrease). 90,560 $ 2,327,466 9,188 $ 203,750 8,421 $ 197,915 (4,132) $ (41,645)
========== ============ =========== ============= ========== ============= ========== ============
<CAPTION>
Growth and Income Fund
---------------------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------- ---------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
------------------------ -------------------------- ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,879,078 $ 29,780,045 1,912,402 $ 25,967,840 2,833,246 $ 43,697,682 3,176,130 $ 42,351,160
Reinvested
dividends...... 144,275 2,042,900 403,557 5,004,107 201,016 2,802,174 459,379 5,645,769
Shares redeemed. (1,157,268) (18,117,327) (1,363,478) (18,739,155) (1,640,931) (24,970,652) (1,533,431) (20,501,966)
---------- ------------ ----------- ------------- ---------- ------------- ---------- ------------
Net increase.... 866,085 $ 13,705,618 952,481 $ 12,232,792 1,393,331 $ 21,529,204 2,102,078 $ 27,494,963
========== ============ =========== ============= ========== ============= ========== ============
<CAPTION>
Growth and Income Fund
---------------------------------------------------------------------------------------------------------
Class II Class Z
---------------------------------------------------- ---------------------------------------------------
For the For the period For the For the period
year ended February 2, 1998* through year ended April 15, 1998* through
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
------------------------ -------------------------- ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 670,592 $10,609,786 95,450 $ 1,274,778 6,141 $ 99,370 7,288 $ 101,080
Reinvested
dividends...... 4,148 57,767 -- -- 272 3,872 -- --
Shares redeemed. (50,279) (796,972) (19,042) (252,084) (365) (6,622) (12) (154)
---------- ------------ ----------- ------------- ---------- ------------- ---------- ------------
Net increase.... 624,461 $ 9,870,581 76,408 $ 1,022,694 6,048 $ 96,620 7,276 $ 100,926
========== ============ =========== ============= ========== ============= ========== ============
</TABLE>
* Inception of the class
54
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (continued)
<TABLE>
<CAPTION>
"Dogs" of Wall Street Fund
---------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- -----------------------------------------------
For the For the period For the For the period
year ended June 8, 1998* through year ended June 8, 1998* through
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
------------------------- ------------------------ ------------------------ ----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ---------- ------------ --------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 1,864,365 $ 22,888,071 3,596,931 $ 43,876,855 3,764,882 $ 46,144,,668 1,811,906 $21,338,291
Reinvested
dividends.......... 18,802 224,876 -- -- 16,481 197,111 -- --
Shares redeemed..... (1,166,882) (14,371,053) (2,089,355) (25,427,269) (868,522) (10,701,512) (23,537) (272,423)
---------- ------------- ---------- ------------ --------- ------------- --------- -----------
Net increase........ 716,285 $ 8,741,894 1,507,576 $ 18,449,586 2,912,841 $ 35,640,267 1,788,369 $21,065,868
========== ============= ========== ============ ========= ============= ========= ===========
<CAPTION>
"Dogs" of Wall Street Fund
--------------------------------------------------
Class II
--------------------------------------------------
For the For the period
year ended June 8, 1998* through
September 30, 1999 September 30, 1998
------------------------- ------------------------
Shares Amount Shares Amount
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold......... 7,015,914 $ 86,489,034 1,874,062 $ 21,947,206
Reinvested
dividends.......... 23,624 282,539 -- --
Shares redeemed..... (897,323) (11,100,097) (51,153) (602,698)
---------- ------------- ---------- ------------
Net increase........ 6,142,215 $ 75,671,476 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
55
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 1999 -- (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
September 30, 1999, Balanced Assets Fund, Blue Chip Growth Fund, Growth
Opportunities Fund, Small Company Growth Fund, Growth and Income Fund and
"Dogs" of Wall Street Fund had accrued $53,202, $16,235, $8,763, $35,403,
$10,695 and $2,744, respectively, for the Retirement Plan, which is included
in accrued expenses on the Statement of Assets and Liabilities, and for the
fiscal year ended September 30, 1999 expensed $12,118, $3,826, $1,813,
$7,038, $4,741 and $2,744, respectively, for the Retirement Plan, which is
included in Trustees' fees and expenses on the Statement of Operations.
56
<PAGE>
SunAmerica Equity Funds
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of SunAmerica Equity Funds
In our opinion, the accompanying statement of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of SunAmerica Balanced Assets Fund,
SunAmerica Blue Chip Growth Fund, SunAmerica Growth Opportunities Fund
(formerly SunAmerica Mid-Cap Growth Fund), SunAmerica Small Company Growth
Fund, SunAmerica Growth and Income Fund and SunAmerica "Dogs" of Wall Street
Fund (constituting SunAmerica Equity Funds, hereafter referred to as the
"Fund") at September 30, 1999, the results of each of their operations for the
period then ended and the changes in each of their net assets and the financial
highlights for each of the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statements presentation. We believe that
our audits, which included confirmation of securities at September 30, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
November 10, 1999
57
<PAGE>
SunAmerica Equity Funds
SHAREHOLDER TAX INFORMATION
Certain tax information regarding the SunAmerica Equity Funds is required to be
provided to shareholders based upon each Fund's income and distributions for
the taxable year ended September 30, 1999. The information and distributions
reported herein may differ from the information and distributions taxable to
the shareholders for the calendar year ending December 31, 1999. The
information necessary to complete your income tax returns will be included with
your Form 1099-DIV which will be sent to you under separate cover in January
2000.
During the year ended September 30, 1999 the Funds paid the following dividends
per share:
<TABLE>
<CAPTION>
Net Net
Net short-term long-term
Total Investment capital capital
dividends income gains* gains
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Balanced Assets Class A............... $1.73 $.26 $.42 $1.05
Balanced Assets Class B............... 1.62 .15 .42 1.05
Balanced Assets Class II.............. .08 .08 -- --
Blue Chip Growth Class A.............. 1.47 -- .44 1.03
Blue Chip Growth Class B.............. 1.47 -- .44 1.03
Blue Chip Growth Class II............. -- -- -- --
Growth Opportunities Class A.......... 1.17 -- .67 .50
Growth Opportunities Class B.......... 1.17 -- .67 .50
Growth Opportunities Class II......... -- -- -- --
Small Company Growth Class A.......... 1.40 -- .06 1.34
Small Company Growth Class B.......... 1.40 -- .06 1.34
Small Company Growth Class II......... 1.40 -- .06 1.34
Small Company Growth Class Z.......... 1.40 -- .06 1.34
Growth and Income Class A............. .47 -- .22 .25
Growth and Income Class B............. .47 -- .22 .25
Growth and Income Class II............ .47 -- .22 .25
Growth and Income Class Z............. .47 -- .22 .25
"Dogs" of Wall Street Class A......... .13 .13 -- --
"Dogs" of Wall Street Class B......... .08 .08 -- --
"Dogs" of Wall Street Class II........ .08 .08 -- --
</TABLE>
- ------
* Short-term capital gains are treated as ordinary income for tax purposes.
For the year ended September 30, 1999, 23.49%, 45.84%, 8.32%, 9.86%, 56.42% and
64.80% of the dividends paid from ordinary income by Balanced Assets Fund, Blue
Chip Growth Fund, Growth Opportunities Fund, Small Company Growth Fund, Growth
and Income Fund and "Dogs" of Wall Street Fund respectively, qualified for the
70% dividends received deductions for corporations.
58
<PAGE>
SunAmerica Equity Funds
COMPARISONS: PORTFOLIOS vs. INDEXES
As required by the Securities and Exchange Commission, the following graphs
compare the performance of a $10,000 investment in the SunAmerica Equity Funds'
portfolios to a similar investment in an index. Please note that "inception" as
used herein reflects the date a Fund commenced operations without regard to
when a second class of shares was introduced. It is important to note that the
SunAmerica Equity Funds are professionally managed mutual funds while the
indices are not available for investment and are unmanaged. The comparison is
shown for illustrative purposes only. The graphs present the performance of the
class of that particular Fund which has been in existence the longest. The
performance of the other classes will vary based upon the difference in sales
charges and fees assessed to shareholders of that class.
This fiscal year was characterized by
a volatile roller coaster of interest
rates, inflationary pressures, and
economic growth both in the U.S. and
abroad. The result, overall, was
record highs for the equity markets
and disappointing returns for the bond
markets. In such an environment, the
Balanced Assets Fund's higher exposure
to equities than the traditional
balanced fund led to its
outperformance of the Lehman
Intermediate Government Index. Your
Fund also outperformed its group
average for the twelve months ending
September 30, 1999 and ranked in the
top decile among its peers for both
its one-year and three-year
performance through the end of the
third calendar quarter (tracked by
Lipper Analytical Services). Of
course, due to its fixed income
component, it underperformed the S&P
500 Index, which is an unmanaged index
and not available as an investment.
However, the Fund's neutral to the
Index duration in its high quality
fixed income allocation helped cushion
the portfolio during these uncertain
times.
[GRAPH]
Balanced Assets S&P 500 Lehman Bros.
Class B (dividends reinvested) Int Gov't Index
9/89 10,000 10,000 10,000
6/90 10,678 10,479 10,703
6/91 11,093 11,254 11,830
6/92 11,924 12,764 13,350
6/93 14,344 14,503 14,691
9/93 14,838 14,877 15,022
9/94 14,816 15,427 14,796
9/95 17,774 20,018 16,367
9/96 19,540 24,086 17,203
9/97 24,248 33,832 18,550
9/98 26,337 36,894 20,518
9/99 32,133 47,151 20,647
Class A Class B Class II
SEC SEC SEC
Balanced Cumulative Average Cumulative Average Cumulative Average
Assets Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
1 Year Return 22.11% 15.09% 21.38% 17.38% N/A N/A
5 Year Return 122.50% 15.96% 115.59% 16.39% N/A N/A
10 Year Return N/A N/A 221.33% 12.38% N/A N/A
Since Inception* 124.50% 13.27% 490.18% 12.87% 0.95% N/A
+ Traditional returns do not include sales load.
* Inception Date - Class A: 9/24/93; Class B; 1/29/85; Class II: 2/02/99
Fund changed its fiscal year end from June 30, as of September 24, 1993.
For the 12 month period ending September 30, 1999, Sun America Balanced Assets
Class B return 21.38%, compared to 27.80% for the S&P 500 Index and 0.63% for
the Lehman Bros. Int. Gov't Index.
(Past performance is no guarantee of future results.)
59
<PAGE>
SunAmerica Equity Funds
COMPARISONS: PORTFOLIOS vs. INDEXES -- (continued)
[CHART]
Blue Chip Growth Class B S&P 500 (dividends reinvested)
9/89 10,000 10,000
12/89 9,203 10,165
12/90 6,892 9,849
12/91 8,949 12,850
12/92 9,706 13,829
9/93 11,627 14,877
9/94 11,417 15,427
9/95 13,759 20,018
9/96 15,570 24,086
9/97 20,551 33,832
9/98 21,452 36,894
9/99 29,057 47,151
The Blue Chip Growth Fund significantly outperformed the S&P 500 Index for the
fiscal year and it ranked in the top decile of its Lipper category average,
primarily because of strong sector positioning and stock selection. Your Fund
was overweighted in the technology sector, which as of September 30, 1999
constituted 25% of the market capitalization of the S&P 500 Index, up from 8%
just ten years ago. All but three of the top eleven Index contributors were
technology stocks, and your Fund was invested in all but one of those top-
performing stocks. The Fund also benefited from its overweighting in the energy
sector, which rose as oil prices did in the spring of 1999. While past
performance does not guarantee future results, blue chip stocks continued to
outperform other stocks in this highly volatile market.
Class A Class B Class II
SEC SEC SEC
Blue Chip Cumulative Average Cumulative Average Cumulative Average
Growth Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
1 Year Return 36.39% 28.45% 35.45% 31.45% N/A N/A
5 Year Return 163.04% 19.91% 154.52% 20.35% N/A N/A
10 Year Return N/A N/A 190.57% 11.26% N/A N/A
Since Inception* 160.26% 16.20% 493.11% 13.01% 2.94% N/A
+ Traditional returns do not include sales load.
* Inception Date - Class A; 10/08/93; Class B 3/13/85; Class II: 2/02/99
Fund changed its fiscal year end from December 31 to September4 30 as of
September 24, 1993.
For the 12 month period ending September 30, 1999, SunAmerica Blue Chip Growth
Class B returned 35.45%, compared to 27.80% for the S&P 500 Index. (Past
performance is not guarantee of future results.)
60
<PAGE>
SunAmerica Equity Funds
COMPARISONS: PORTFOLIOS vs. INDEXES--(continued)
[CHART]
Growth Opportunities S&P 500 Russell Mid Cap
Class A (dividends reinvested) Growth Index
9/89 9,425 10,000 10,000
11/89 8,941 9,926
11/90 7,366 9,582 8,402
11/91 9,658 11,531 12,510
11/92 11,727 13,661 13,664
9/93 14,122 14,877 16,429
9/94 12,767 15,427 16,828
9/95 16,534 20,018 21,821
9/96 18,671 24,086 25,384
9/97 22,693 33,832 32,910
9/98 21,740 36,894 29,823
9/99 33,137 47,151 40,921
The Growth Opportunities Fund outperformed the Russell Mid Cap Growth Index,
the S&P 500 Index, and its peers for the twelve months ending September 30,
1999. Although mid-cap stocks in general lagged their larger cap brethren for
the fiscal year, your Fund outperformed primarily because of its strong growth
bias. The Fund also benefited from outstanding sector positioning and stock
selection, focusing on companies producing double-digit top line and bottom
line growth rates trading at attractive valuations. We maintained an
overweighting in the technology sector, reduced the portfolio's weighting in
healthcare, but overweighted biotechnology stocks within this sector, and
invested in the energy sector early, before oil prices rose in the spring of
1999.
Class A Class B Class II
SEC SEC
Growth Cumulative Average Cumulative Average Cumulative Average
Opportunities Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
1 Year Return 52.42% 43.66% 51.24% 47.24% N/A N/A
5 Year Return 159.37% 19.57% 150.12% 19.93% N/A N/A
10 Year Return 251.58% 12.73% N/A N/A N/A N/A
Since Inception* 467.31% 12.96% 123.71% 14.258 10.17% N/A
+ Traditional returns do not include sales load
* Inception Date - Class A; 01/28/87; Class B; 10/04/93; Class II; 2/02/99
Fund changed its fiscal year end from November 30 to September 30 as of
September 24, 1993.
For the 12 month period ending September 30, 1999, SunAmerica Growth
Opportunities Class A returned 52.42%, compared to 27.80% for the S&P 500
Index and 37.21% for the Russell Mid Cap Growth Index. (Past performance is no
guarantee of future results.)
61
<PAGE>
SunAmerica Equity Funds
COMPARISON: PORTFOLIOS vs. INDEXES--(continued)
[CHART]
Small Company NASDAQ Russell 2000 Index
Growth Class A Industrials Index
9/89 9,425 10,000 10,000
11/89 8,709 9,776 9,416
11/90 6,047 8,549 7,139
11/91 9,194 12,946 9,875
11/92 11,428 15,471 11,971
9/93 14,351 17,127 14,163
9/94 13,240 17,070 14,340
9/95 19,860 23,312 17,379
9/96 23,702 26,306 19,692
9/97 28,642 32,662 26,193
9/98 21,480 24,601 21,242
9/99 32,866 38,508 25,312
The Small Company Growth Fund significantly outperformed the Russell 2000 Index
and its Lipper category average during the fiscal year. The Fund benefited most
from its significant overweightings in the technology, energy, and
biotechnology sectors.
Class A Class B Class II
Small SEC SEC SEC
Company Cumulative Average Cumulative Average Cumulative Average
Growth Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
1 Year Return 53.00% 44.21% 52.15% 48.15% 52.04% 49.52%
5 Year Return 148.22% 18.53% 140.60% 19.00% N/A N/A
10 Year Return 248.77% 12.64% N/A N/A N/A N/A
Since Inception* 461.92% 14.06% 121.74% 14.15% 32.09% 17.57%
Class Z
Small SEC
Company Cumulative Average
Growth Traditional Annual
Fund Return+ Return
1 Year Return 53.91% 53.91%
5 Year Return N/A N/A
10 Year Return N/A N/A
Since Inception* 38.99% 11.68%
+Traditional returns do not include sales load.
*Inception Date - Class A: 1/28/87; Class B: 9/24/93; Class II: 2/02/98;
Class Z: 10/07/96
Fund changed its fiscal year end from December 31 to September 30 as of
September 24, 1993
For the 12 month period ending September 30, 1999, SunAmerica Small Company
Growth Class A returned 53.00% compared to 19.16% for the Russell 2000 Index.
(Past performance is no guarantee to future results.)
62
<PAGE>
SunAmerica Equity Funds
COMPARISON: PORTFOLIOS vs. INDEXES--(continued)
[GRAPH]
Growth and Income Growth and Income S&P 500
Class A Class B (dividends reinvested)
7/94 9,425 10,000 10,000
9/94 9,645 10,219 10,489
9/95 11,529 12,179 13,610
9/96 15,286 16,046 16,377
9/97 20,511 21,405 23,003
9/98 21,646 22,441 25,085
9/99 28,355 29,125 32,058
The Growth and Income Fund notably outperformed both the S&P 500 Index and its
Lipper category average for the twelve months ending September 30, 1999. Your
Fund primarily benefited from a "barbell approach" to stock selection,
balancing the portfolio's holdings between growth sectors, such as technology,
and value sectors, such as energy and financial services. The Fund also
benefited from a focus on dividend- paying companies. A 2.5% weighting in
longer-duration U.S. Treasuries added to the portfolio early in the fiscal year
also provided income and enhanced the overall yield of the Fund.
<TABLE>
<CAPTION>
Class A Class B Class II Class Z
SEC SEC SEC SEC
Growth and Cumulative Average Cumulative Average Cumulative Average Cumulative Average
Income Traditional Annual Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return Return+ Return
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year Return 30.99% 23.46% 30.23% 26.23% 30.25% 27.95% 31.69% 31.69%
5 Year Return 193.97% 22.61% 185.99% 23.21% N/A N/A N/A N/A
10 Year Return N/A N/A N/A N/A N/A N/A N/A N/A
Since Inception 200.85% 21.96% 192.24% 22.65% 28.52% 15.64% 17.84% 11.90%
</TABLE>
+ Traditional returns do not include sales load.
* Inception Date -
Class A; 7/01/94; Class B; 7/06/94; Class II: 2/02/98; Class
Z; 4/15/98
For the 12 month period ending September 30, 1999, SunAmerica Growth and
Income Class B returned 30.23%, compared to 27.80% for the S&P 500 Index.
(Past performance is no guarantee of future results.)
63
<PAGE>
SunAmerica Equity Funds
COMPARISON: PORTFOLIOS vs. INDEXES--(continued)
[GRAPH]
Dogs of Dogs of Dogs of S&P 500 Wilshire
Wall Street Wall Street Wall Street Index Large Cap
Class A Class B Class II (dividends Value Index
reinvested)
6/8/98 9,425 10,000 9,900 10,000 10,000
6/98 9,199 9,752 9,654 10,170 10,049
9/98 8,339 8,824 8,736 9,158 8,926
12/98 9,418 9,957 9,857 11,109 10,157
3/99 8,702 9,176 9,084 11,662 10,155
6/99 10,051 10,585 10,480 12,484 10,951
9/99 9,045 9,133 9,325 11,704 9,414
The "Dogs" of the Dow strategy offers a contrarian strategy in the current
market environment. While growth investing was preferred over value investing
during the Fund's annual period, the market is cyclical, and sectors that have
fallen out of favor historically have returned to favor and provided solid
returns. A glimpse of this was seen with the transition to value during the
second calendar quarter of 1999. The "Dogs" of Wall Street Fund posted
impressive quarterly performance, ranking in the top 5% of its category,
according to Lipper Analytics. We continue to believe that, over the long term,
every "Dog" will have its day.
Class A Class B Class II
SEC SEC SEC
"Dogs of Cumulative Average Cumulative Average Cumulative Average
Wall Street Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
1 Year Return 8.47% 2.23% 7.82% 3.82% 7.82% 5.74%
5 Year Return N/A N/A N/A N/A N/A N/A
Since Inception* -4.03% -7.36% -4.86% -6.82% -4.86% -5.23%
+Traditional returns do not include sales load.
*Inception Date - Class A: 6/08/98; Class B: 6/08/98; Class II: 6/08/98
For the 12 month period ending September 30, 1999, SunAmerica "Dogs of Wall
Street Class A returned 8.47%, Class B returned 7.82%, and Class II returned
7.82% compated to 27.80% for the S&P 500 Index and 5.47% for the Wilshire Large
Cap Value Index. (Past performance is no guarantee to future results.)
64
<PAGE>
---------------
[LOGO] SunAmerica Bulk Rate
Mutual Funds U.S. Postage
PAID
The SunAmerica Center Kansas City, MO
733 Third Avenue Permit No. 2891
New York, NY 10017-3204 ---------------
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.
Distributed by: SunAmerica Capital Services, Inc.
AIG Member of American International Group, Inc.
