<PAGE>
January 31, 2000 PROSPECTUS
as supplemented April 3, 2000
SUNAMERICA EQUITY FUNDS
[SUNAMERICA LOGO APPEARS HERE]
SunAmerica Blue Chip Growth Fund
[SUNAMERICA LOGO APPEARS HERE]
SunAmerica Growth Opportunities Fund
SunAmerica New Century Fund
[SUNAMERICA LOGO APPEARS HERE]
SunAmerica Growth and Income Fund
[SUNAMERICA LOGO APPEARS HERE]
[SUNAMERICA LOGO APPEARS HERE]
SunAmerica Balanced Assets Fund
[SUNAMERICA LOGO APPEARS HERE]
SunAmerica "Dogs" of Wall Street Fund
The Securities and
Exchange Commission has
not approved or
disapproved these
securities or passed
upon the adequacy of
this prospectus. Any
representation to the
contrary is a criminal
offense.
[LOGO OF SUN AMERICA
MUTUAL FUNDS]
<PAGE>
Table of Contents
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<TABLE>
<S> <C>
FUND HIGHLIGHTS........................................ 2
FINANCIAL HIGHLIGHTS................................... 11
SHAREHOLDER ACCOUNT INFORMATION........................ 14
MORE INFORMATION ABOUT THE FUNDS....................... 22
Fund Investment Strategies........................... 22
Glossary............................................. 24
Investment Terminology.............................. 24
Risk Terminology.................................... 25
FUND MANAGEMENT........................................ 26
</TABLE>
[LOGO OF SUN AMERICA
MUTUAL FUNDS]
<PAGE>
Fund Highlights
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Q&A
Market
capitalization
represents the
total market
value of the
outstanding
securities of a
corporation. For
specific market
capitalization
ranges, see page
24.
When deemed
appropriate by
the Adviser, a
fund may engage
in active trading
when it
frequently trades
its portfolio
securities to
achieve its
investment goal.
The "growth" ori-
ented philosophy
to which the Blue
Chip Growth,
Growth Opportuni-
ties and New Cen-
tury Funds sub-
scribe and the
Growth and Income
Fund and Balanced
Assets Fund
partly sub-
scribe--that of
investing in se-
curities believed
to offer the po-
tential for capi-
tal apprecia-
tion--focuses on
securities which
are considered:
to have a histor-
ical record of
above-average
growth rate; to
have significant
growth potential;
to have above-av-
erage earnings
growth or value
or the ability to
sustain earnings
growth; to offer
proven or unusual
products or serv-
ices; or to oper-
ate in industries
experiencing in-
creasing demand.
The "value"
oriented
philosophy to
which the "Dogs"
of Wall Street
Fund subscribes
and the Growth
and Income Fund
partly
subscribes--that
of investing in
securities
believed to be
undervalued in
the market--
reflects a
contrarian
approach, in that
the potential for
superior relative
performance is
believed to be
highest when
stocks of
fundamentally
solid companies
are out of favor.
The selection
criteria is
usually
calculated to
identify stocks
of large, well
known companies
with solid
financial
strength and
generous dividend
yields that have
low price-
earnings ratios
and have
generally been
overlooked by the
market.
Conservation of
principal
is a goal which
aims to invest in
a manner that
tries to protect
the value of your
investment
against market
movements and
other economic
events.
"High-quality"
instruments
have a very
strong capacity
to pay interest
and repay
principal.
The following questions and answers are designed to give you an overview of the
Funds and to provide you information about their investment goals and principal
strategies. There can be no assurance that any Fund's investment goal will be
met or that the net return on an investment in a Fund will exceed what could
have been obtained through other investment or savings vehicles. More complete
investment information is provided in the chart, under "More Information About
the Funds," which is on page 22, and the glossary that follows on page 24.
Q:What are the Funds' investment goals, strategies and techniques?
A:
<TABLE>
<CAPTION>
Principal
Investment Investment Principal Investment
Fund Goal Strategy Techniques
<C> <C> <C> <S>
Blue Chip Growth Fund capital growth invests primarily by active
appreciation trading in common stocks
that demonstrate the
potential for capital
appreciation, issued by
large-cap companies
Growth Opportunities Fund capital growth invests primarily by active
appreciation trading in common stocks
that demonstrate the
potential for capital
appreciation, issued
generally by mid-cap
companies
New Century Fund* capital growth invests primarily in common
appreciation stocks that demonstrate the
potential for capital
appreciation, without
regard to market
capitalization
Growth and Income Fund capital growth and invests primarily by active
appreciation value trading in common stocks,
and issued by companies of any
current size, that pay dividends,
income demonstrate the potential
for capital appreciation
and/or are believed to be
undervalued in the market
Balanced Assets Fund conservation asset invests by active trading
of allocation partly in common stocks
principal and growth that demonstrate the
and potential for capital
capital appreciation issued by
appreciation companies with market
capitalizations of over
$1.5 billion, and partly in
high-quality bonds
"Dogs" of Wall Street Fund total return value employ a "buy and hold"
(including strategy with thirty high
capital dividend yielding common
appreciation stocks selected annually
and current from the Dow Jones
income) Industrial Average and the
broader market
</TABLE>
Additional Information About
"Dogs" of Wall Street Fund Techniques
The "Dogs" of Wall Street Fund annually selects thirty high dividend yield-
ing common stocks, consisting of (1) the ten highest yielding stocks in the
Dow Jones Industrial Average and (2) the twenty other highest yielding
stocks of the 400 largest industrial companies in the U.S. markets that
have market capitalizations of at least $1 billion and
2 * Formerly named the Small Company Growth Fund
<PAGE>
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have received one of the two highest rankings from an independently pub-
lished common stock ranking service on the basis of growth and stability of
earnings and dividends. The annual selection of the thirty stocks that meet
these criteria will take place no later than January 15, on the basis of
information as of the preceding December 31st. Immediately after the "Dogs"
of Wall Street Fund buys and sells stocks, it will hold an equal value of
each of the thirty stocks. In other words, the "Dogs" of Wall Street Fund
will invest 1/30 of its assets in each of the stocks that make up its port-
folio. Thereafter, when an investor purchases shares of the "Dogs" of Wall
Street Fund, the Adviser will invest the additional funds in the pre-se-
lected stocks based on each stock's respective percentage of the fund's as-
sets at the time.
The "Dogs" of Wall Street Fund employs a "buy and hold strategy." This
means that the stocks in the "Dogs" of Wall Street Fund's portfolio over
the course of the year will not change, even if there are adverse develop-
ments concerning a particular stock, an industry, the economy or the stock
market generally. However, due to purchases and redemptions of Fund shares
during the year and changes in the market value of the stocks held by the
"Dogs" of Wall Street Fund, it is likely that the weighting of the stocks
in the Fund's portfolio will fluctuate throughout the course of the year.
Additional Information About the
New Century Fund Techniques
The New Century Fund will invest in companies believed to offer rapid
growth opportunities and trends in "New Economy" sectors. These dynamic
economic sectors rapidly develop and evolve through, or as a result of,
technological advancement and innovation. Examples of the "New Economy"
sectors include telecommunications, computer systems and software,
internet, broadcasting, publishing, health care, pharmaceuticals, biotech-
nology, electronics, defense and data storage. The New Century Fund may
also invest in companies the manager believes will experience strong growth
in traditional economic sectors, such as retail services, apparel and tex-
tiles, leisure, banking, household products, and food, beverage and tobac-
co. The relative size of the Fund's investments in "New Economy" sectors
and traditional sectors will vary from time to time, and at times an above-
named industry may not be represented in the Fund's holdings.
Market Capitalization Ranges
Companies are determined to be large-cap companies, mid-cap companies, or
small-cap companies based upon the market capitalization ranges prescribed
by the Style Box categories designed by Morningstar, Inc. Morningstar, Inc.
may change the Style Box market capitalization ranges over time as market
conditions and broad market valuations vary. The Funds' market capitaliza-
tion ranges will change as the Morningstar categories vary. Currently,
these market capitalization ranges are as follows: $1.5 billion or less for
the Small-Cap category; between $1.5 billion and $9.5 billion for the Mid-
Cap category; and $9.5 billion or more for the Large-Cap category.
Q.What are the principal risks of investing in the Funds?
A: The following section describes the principal risks of each Fund, while the
chart on page 22 describes various additional risks.
Risks of Investing in Equity Securities
The Blue Chip Growth, Growth Opportunities, New Century, Growth and Income
and "Dogs" of Wall Street Funds invest primarily in equity securities. In
addition, the Balanced Assets Fund invests significantly in equity securi-
ties. As with any equity fund, the value of your investment in any of these
Funds may fluctuate in response to stock market movements. You should be
aware that the performance of different types of equity stocks may rise or
decline under varying market conditions--for example, "value" stocks may
perform well under circumstances in which "growth" stocks in general have
fallen. In addition, individual stocks selected for any of these Funds may
underperform the market generally.
3
<PAGE>
Fund Highlights
- --------------------------------------------------------------------------------
Additional Principal Risks
Shares of the Funds are not bank deposits and are not guaranteed or insured
by any bank, government entity or the Federal Deposit Insurance Corpora-
tion. As with any mutual fund, there is no guarantee that a Fund will be
able to achieve its investment goals. If the value of the assets of a Fund
goes down, you could lose money.
Additional Risks Specific to the Growth Opportunities Fund and the New
Century Fund
Stocks of smaller companies may be more volatile than, and not as readily
marketable as, those of larger companies. The Growth Opportunities Fund may
be riskier than the Blue Chip Growth Fund, and the Small Company Growth
Fund may be riskier than both the Growth Opportunities Fund and the Blue
Chip Growth Fund. Additionally, the New Century Fund and the Growth Oppor-
tunities Fund may at times significantly invest in technology companies.
Technology companies may react similarly to certain market pressures and
events. They may be significantly affected by short product cycles, aggres-
sive pricing of products and services, competition from new market en-
trants, and obsolescence of existing technology. As a result, the Portfo-
lio's returns may be considerably more volatile than a fund that does not
invest in technology companies.
Additional Risks Specific to the Balanced Assets Fund
As with any bond fund, the value of your investment in the Balanced Assets
Fund may go up or down in response to changes in interest rates or defaults
(or even the potential for future default) by bond issuers. As interest
rates rise, bond prices typically fall; and as interest rates fall, bond
prices typically rise. Movements in the bond market generally may affect
the Balanced Assets Fund's performance.
An issuer of securities held in the Balanced Assets Fund's portfolio may
not be able to honor its financial obligations, including its obligations
to the Balanced Assets Fund.
Additional Risks Specific to the "Dogs" of Wall Street Fund
The Fund will not deviate from its strategy (except to the extent necessary
to comply with federal tax laws). If the Fund is committed to a strategy
that is unsuccessful, the Fund will not meet its investment goal. Because
the Fund will not use certain techniques available to other mutual funds to
reduce stock market exposure, the Fund may be more susceptible to general
market declines than other mutual funds.
The Fund is organized as a "non-diversified" fund. As a non-diversified
fund, it can invest a larger portion of assets in the stock of a single
company than can some other mutual funds. By concentrating in a smaller
number of stocks, the Fund's risk is increased because the effect of each
stock on its performance is greater.
Q:How have the Funds performed historically?
A: The following Risk/Return Bar Charts and Tables illustrate the risks of in-
vesting in the Funds by showing changes in the Funds' performance from cal-
endar year to calendar year, and comparing the Funds' average annual returns
to those of an appropriate market index. Sales charges are not reflected in
the bar charts. If these amounts were reflected, returns would be less than
those shown. Of course, past performance is not necessarily an indication of
how a Fund will perform in the future.
4
<PAGE>
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BLUE CHIP GROWTH FUND (Class B)
During the 10-year period shown in
the bar chart, the highest return
for a quarter was 30.21% (quarter
ended 12/31/99) and the lowest
return for a quarter was -25.00%
(quarter ended 09/30/90).
[BAR CHART]
'90 '91 '92 '93 '94
------- ------- ------- ------- -------
-25.11% 29.84% 8.46% 19.39% -4.76%
'95 '96 '97 '98 '99
------- ------- ------- ------- -------
31.04% 9.67% 30.25% 27.36% 43.86%
<TABLE>
<CAPTION>
Average Annual Total Returns Return Since Inception*
(as of
the calendar year ended Past One Past Five Past Ten S&P 500(R) Russell 1000(R)
December 31, 1999) Year Years Years Fund Index Index
<S> <C> <C> <C> <C> <C> <C>
Blue Chip Growth
Fund** Class A 36.39% 27.28% N/A 20.52% 22.96% 22.28%
Class B 39.86% 27.80% 15.19% 14.81% 18.45% 18.11%
Class II N/A N/A N/A 31.66% 17.71% 18.33%
S&P 500(R) Index*** 21.04% 28.56% 18.21%
Russell 1000(R)
Index**** 20.91% 28.04% 18.13%
</TABLE>
* Inception Date - Class A: 10/08/93; Class B: 03/13/85; Class II: 02/02/99
** Includes sales charges.
*** The S&P 500(R) is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices.
****The Russell 1000(R) Index Measures the performance of the 1,000 largest
U.S. companies based on total market capitalization, which represents
approximately 89% of the total market capitalization of the Russell 3000
Index. As of the latest reconstitution, the average market capitalization was
approximately $9.9 billion; the median market capitalization was approximately
$3.7 billion. The smallest company in the index had an approximate market
capitalization of $1,404.7 million.
GROWTH OPPORTUNITIES FUND (Class A)
During the 10-year period shown in
the bar chart, the highest return
for a quarter was 55.18% (quarter
ended 12/31/99) and the lowest
return for a quarter was -23.52%
(quarter ended 09/30/90).
[BAR CHART]
'90 '91 '92 '93 '94
------- ------- ------- ------- -------
-14.95% 42.61% 12.45% 10.8% -4.79%
'95 '96 '97 '98 '99
------- ------- ------- ------- -------
35.05% 12.48% 13.68% 23.15% 89.03%
<TABLE>
<CAPTION>
Average Annual Total Returns Return Since Inception*
(as of the calendar year ended Past One Past Five Past Ten S&P 500(R) Russell Mid-Cap
December 31, 1999) Year Years Years Fund Index Index
<S> <C> <C> <C> <C> <C> <C>
Growth Opportunities
Fund** Class A 78.16% 30.53% 18.48% 17.79% 16.98% 17.00%
Class B 83.69% 30.97% N/A 22.00% 22.96% 22.05%
Class II N/A N/A N/A 67.81% 17.71% 51.88%
S&P 500(R) Index*** 21.04% 28.56% 18.21%
Russell Mid-Cap(TM)
Index**** 51.29% 28.02% 18.96%
</TABLE>
* Inception Date - Class A: 01/28/87; Class B: 10/04/93; Class II: 02/02/99
** Includes sales charges.
*** The S&P 500(R) is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices.
****The Russell Mid-Cap(TM) Index measures the performance of the 800 smallest
companies in the Russell 1000 Index, which represents approximately 35% of the
total market capitalization of the Russell 1000 Index. As of the latest
reconstitution, the average market capitalization was approximately $3.7
billion; the median market capitalization was approximately $2.9 billion. The
largest company in the index has an approximate market capitalization of $10.3
billion.
5
<PAGE>
Fund Highlights
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NEW CENTURY FUND (Class A)
During the 10-year period shown in
the bar chart, the highest return
for a quarter was 60.23% (quarter
ended 12/31/99) and the lowest
return for a quarter was -30.80%
(quarter ended 09/30/90).
[BAR CHART]
'90 '91 '92 '93 '94
------- ------- ------- ------- -------
-26.99% 54.85% 20.12% 13.89% 4.73%
'95 '96 '97 '98 '99
------- ------- ------- ------- -------
50.16% 14.92% 3.34% 12.71% 84.57%
<TABLE>
<CAPTION>
Return Since Inception*
Average Annual Total Returns Past One Past Five Past Ten Fund Russell 2000 Nasdaq
(as of the calendar year ended Year Years Years Growth Index Composite
December 31, 1999) Index
<S> <C> <C> <C> <C> <C> <C>
New Century
Fund** Class A 73.95% 28.45% 18.93% 17.99% 11.48% 19.85%
Class B 79.45% 29.02% N/A 22.38% 14.95% 30.72%
Class II 80.62% N/A N/A 47.20% 22.14% 61.59%
Russell 2000 Growth
Index*** 43.09% 18.99% 13.51%
Nasdaq Composite
Index**** 85.59% 40.17% 24.50%
*Inception Date: Class A: 01/28/87; Class B: 09/24/93; Class II: 02/02/98
**Includes sales charges.
***The Russell 2000(TM) Growth Index measures the performance of those Russell
2000 companies with higher price-to-book ratios and higher forecasted growth
values.
****The Nasdaq Composite Index is a market value weighted index composed of
over 5,000 domestic and non-U.S. based common stocks listed on the Nasdaq
Stock Market.
GROWTH AND INCOME FUND (Class B)
During the 5-year period shown in
the bar chart, the highest return
for a quarter was 23.48% (quarter
ended 12/31/99) and the lowest
return for a quarter was -11.06%
(quarter ended 09/30/98).
[BAR CHART]
'95 '96 '97 '98 '99
------- ------- ------- ------- -------
33.94% 26.33% 29.3% 22.63% 32.48%
<CAPTION>
Return Since Inception*
Average Annual Total Returns Past One Past Five Past Ten Fund S&P500(R)
(as of the calendar year ended Year Years Years Index
December 31, 1999)
<S> <C> <C> <C> <C> <C> <C>
Growth and Income
Fund** Class A 25.62% 28.04% N/A 25.63% 26.74%
Class B 28.48% 28.72% N/A 26.30% 26.74%
Class II 30.11% N/A N/A 26.71% 25.19%
S&P 500(R) Index*** 21.04% 28.56% 18.21%
</TABLE>
*Inception Date: Class A: 07/01/94; Class B: 07/06/94; Class II: 02/02/98
**Includes sales charges.
***The S&P 500(R) is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices.
6
<PAGE>
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BALANCED ASSETS FUND (Class B)
During the 10-year period shown in
the bar chart, the highest return
for a quarter was 15.40% (quarter
ended 12/31/99) and the lowest
return for a quarter was -13.61%
(quarter ended 09/30/90).
[BAR CHART]
'90 '91 '92 '93 '94
------- ------- ------- ------- -------
-2.34% 27.48% 5.45% 14.17% -2.57%
'95 '96 '97 '98 '99
------- ------- ------- ------- -------
26.95% 8.3% 23.37% 22.59% 20.93%
<TABLE>
<CAPTION>
Return Since Inception*
Average Annual Total Returns Lehman Brothers
(as of the calendar year ended Past One Past Five Past Ten Fund S&P 500(R) Aggregate Bond
December 31, 1999) Year Years Years Index Index
<S> <C> <C> <C> <C> <C> <C>
Balanced Assets Fund**
Class A 14.68% 19.57% N/A 15.27% 22.96% 5.65%
Class B 16.93% 20.06% 13.89% 13.69% 18.44% 9.10%
Class II N/A N/A N/A 13.94% 17.71% -1.66%
S&P 500(R) Index*** 21.04% 28.56% 18.21%
Lehman Brothers -0.82% 7.73% 7.70%
Aggregate Bond
Index****
</TABLE>
* Inception Date: Class A: 9/24/93; Class B: 1/29/85; Class II 02/02/99
** Includes sales charges.
*** The S&P 500(R) is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices.
**** The Lehman Brothers Aggregate Bond Index is composed of the Lehman
Government/Corporate Index and the Mortgage-Backed Securities Index and
includes treasury issues, agency issues, corporate bond issues and
mortgage backed securities. At December 31, 1996, 5727 issues were
included in the Aggregate Bond Index, representing approximately $4.7
trillion in market value, distributed as follows: 52% governments, 18.0%
corporates and 30% mortgage backed securities.
"DOGS" OF WALL STREET (Class A)
During the 1-year period shown in
the bar chart, the highest return
for a quarter was 6.72% (quarter
ended 6/30/99) and the lowest
return for a quarter was -7.61%
(quarter ended 3/31/99).
[BAR CHART]
'99
-------
-7.43%
<TABLE>
<CAPTION>
Average Annual Total Return Since Inception*
Returns
(as of the calendar
year ended Past One Past Five Past Ten Fund S&P 500 Russell 1000
December 31, 1999) Year Years Year Index Value Index
<S> <C> <C> <C> <C> <C> <C>
"Dogs" of Wall Street
Fund** Class A -12.75% N/A N/A -8.39% 22.22% 7.44%
Class B -11.99% N/A N/A -8.10% 22.22% 7.44%
Class II -9.91% N/A N/A -6.71% 22.22% 7.44%
***S&P 500(R) Index 21.04% 28.56% 18.21%
***Russell 1000 Value
Index 7.35% 23.07% 15.60%
</TABLE>
* Inception Date: Class A: 06/08/98; Class B: 06/08/98; Class II: 06/08/98
** Includes sales charges.
*** The S&P 500(R) is the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized, unmanaged index of common stock prices.
**** The Russell 1000(R) Value Index measures the performance of those Russell
1000 companies with lower price-to-book ratios and lower forecasted growth
values.
7
<PAGE>
Fund Highlights
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Q:What are the Funds' expenses?
A:The following table describes the fees and expenses that you may pay if you
buy and hold shares of the Funds.
<TABLE>
<CAPTION>
Growth
Blue Chip Opportunities
Growth Fund Fund
----------- -------------
Class A Class B Class II Class A Class B Class II
------- ------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Shareholder Fees
(fees paid
directly from
your investment)
Maximum Sales
Charge (Load)
Imposed on
Purchases (as a
percentage of
offering
price)(/1/) 5.75% None 1.00% 5.75% None 1.00%
Maximum Deferred
Sales Charge
(Load) (as a
percentage of
amount
redeemed)(/2/) None 4.00% 1.00% None 4.00% 1.00%
Maximum Sales
Charge (Load)
Imposed on
Reinvested
Dividends None None None None None None
Redemption
Fee(/3/) None None None None None None
Exchange Fee None None None None None None
Maximum Account
Fee None None None None None None
Annual Fund
Operating
Expenses
(expenses that
are deducted
from Fund
assets)
Management Fees 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
Distribution
[and/or
Service] (12b-
1) Fees(/4/) 0.35% 1.00% 1.00% 0.35% 1.00% 1.00%
Other Expenses 0.39% 0.40% 9.16% 0.47% 0.57% 10.54%
Total Annual Fund
Operating
Expenses Before
Expense
Reimbursement 1.49% 2.15% 10.91% 1.57% 2.32% 12.29%
Expense
Reimbursement -- -- 8.74% -- -- 9.94%
Net Expenses 1.49% 2.15% 2.17%(/5/) 1.57% 2.32% 2.35%(/5/)
</TABLE>
(1) The front-end sales charge on Class A shares decreases with the size of the
purchase to 0% for purchases of $1 million or more.
(2) Purchases of Class A shares over $1 million will be subject to a contingent
deferred sales charge (CDSC) on redemptions made within two years of pur-
chase. The CDSC on Class B shares applies only if shares are redeemed
within six years of their purchase. The CDSC on Class II shares applies
only if shares are redeemed within eighteen months of their purchase. See
pages 14 and 15 for more information about the CDSCs.
(3) A $15.00 fee may be imposed on wire and overnight mail redemptions.
(4) Because these fees are paid out of a Fund's assets on an on-going basis,
over time these fees will increase the cost of your investment and may cost
you more than paying other types of sales charges.
8
<PAGE>
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<TABLE>
<CAPTION>
New Century Growth and Balanced "Dogs" of Wall
Fund Income Fund Assets Fund Street Fund
----------- ----------- ----------- --------------
Class A Class B Class II Class A Class B Class II Class A Class B Class II Class A Class B Class II
- ------- ------- -------- ------- ------- -------- ------- ------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5.75% None 1.00% 5.75% None 1.00% 5.75% None 1.00% 5.75% None 1.00%
None 4.00% 1.00% None 4.00% 1.00% None 4.00% 1.00% None 4.00% 1.00%
None None None None None None None None None None None None
None None None None None None None None None None None None
None None None None None None None None None None None None
None None None None None None None None None None None None
0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.35% 0.35% 0.35%
0.35% 1.00% 1.00% 0.35% 1.00% 1.00% 0.35% 1.00% 1.00% 0.35% 1.00% 1.00%
0.38% 0.37% 2.88% 0.38% 0.36% 0.84% 0.35% 0.31% 1.71% 0.48% 0.47% 0.44%
1.48% 2.12% 4.63% 1.48% 2.11% 2.59% 1.45% 2.06% 3.46% 1.18% 1.82% 1.79%
-- -- 2.48% -- -- 0.44% -- -- 1.41% 0.23% 0.22% 0.19%
1.48% 2.12% 2.15%(/5/) 1.48% 2.11% 2.15%(/5/) 1.45% 2.06% 2.05%(/5/) 0.95%(/5/) 1.60%(/5/) 1.60%(/5/)
</TABLE>
(5) The Board of Trustees, including a majority of the Independent Trustees,
approved the Investment Advisory and Management Agreement subject to the
net expense ratios set forth above. SunAmerica may not increase such ra-
tios, which are contractually required by agreement with the Board of
Trustees, without the approval of the Trustees, including a majority of the
Independent Trustees. The expense waivers and fee reimbursements will con-
tinue indefinitely, subject to termination by the Trustees, including a ma-
jority of the Independent Trustees.
9
<PAGE>
Fund Highlights
- --------------------------------------------------------------------------------
EXAMPLE
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
If you redeemed your investment at the end of the periods indicated:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Blue Chip Growth Fund
(Class A shares)............................... $718 $1,019 $1,341 $2,252
(Class B shares)*.............................. 618 973 1,354 2,237
(Class II shares).............................. 418 772 1,253 2,578
Growth Opportunities Fund
(Class A shares)............................... 726 1,042 1,381 2,335
(Class B shares)*.............................. 635 1,024 1,440 2,381
(Class II shares).............................. 436 826 1,343 2,759
New Century Fund
(Class A shares)............................... 716 1,016 1,336 2,242
(Class B shares)*.............................. 615 964 1,339 2,213
(Class II shares).............................. 416 766 1,243 2,558
Growth and Income Fund
(Class A shares)............................... 716 1,016 1,336 2,242
(Class B shares)*.............................. 614 961 1,334 2,206
(Class II shares).............................. 416 766 1,243 2,558
Balanced Assets Fund
(Class A shares)............................... 714 1,007 1,322 2,210
(Class B shares)*.............................. 609 946 1,308 2,161
(Class II shares).............................. 406 736 1,192 2,455
"Dogs" of Wall Street Fund
(Class A shares)............................... 666 860 1,070 1,674
(Class B shares)*.............................. 563 805 1,071 1,645
(Class II shares).............................. 361 600 962 1,981
If you did not redeem your shares:
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Blue Chip Growth Fund
(Class A shares)............................... $718 $1,019 $1,341 $2,252
(Class B shares)*.............................. 218 673 1,154 2,237
(Class II shares).............................. 318 772 1,253 2,578
Growth Opportunities Fund
(Class A shares)............................... 726 1,042 1,381 2,335
(Class B shares)*.............................. 235 724 1,240 2,381
(Class II shares).............................. 336 826 1,343 2,759
New Century Fund
(Class A shares)............................... 716 1,016 1,336 2,242
(Class B shares)*.............................. 215 664 1,139 2,213
(Class II shares).............................. 316 766 1,243 2,558
Growth and Income Fund
(Class A shares)............................... 716 1,016 1,336 2,242
(Class B shares)*.............................. 214 661 1,134 2,206
(Class II shares).............................. 316 766 1,243 2,558
Balanced Assets Fund
(Class A shares)............................... 714 1,007 1,322 2,210
(Class B shares)*.............................. 209 646 1,108 2,161
(Class II shares).............................. 306 736 1,192 2,455
"Dogs" of Wall Street Fund
(Class A shares)............................... 666 860 1,070 1,674
(Class B shares)*.............................. 163 505 871 1,645
(Class II shares).............................. 261 600 962 1,981
</TABLE>
* Class B shares generally convert to Class A shares approximately seven years
after purchase as described in the section entitled "Shareholder Account
Information" on page 14. Therefore, expense information for years 8, 9 and 10
is the same for both Class A and B shares.
10
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
The Financial Highlights table for each Fund is intended to
help you understand the Fund's financial performance for the
past 5 years. Certain information reflects financial results
for a single Fund share. The total returns in each table repre-
sent the rate that an investor would have earned (or lost) on
an investment in a Fund (assuming reinvestment of all dividends
and distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with each
Fund's financial statements, are incorporated by reference in
the Statement of Additional Information (SAI), which is avail-
able upon request.
BLUE CHIP GROWTH FUND
<TABLE>
<CAPTION>
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)
- ------ --------- ----------- ----------- ---------- --------- ------- ------- --------- ------ ----------
Class A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
Class B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
Class II
--------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/02/99-
9/30/99(/3/)... $21.79 $(0.13) $0.77 $0.64 $ -- $ -- $ -- $22.43 2.94% $ 785
<CAPTION>
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
- ------ -------------- ----------------- ---------
<S> <C> <C> <C>
9/30/95......... 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
<CAPTION>
<S> <C> <C> <C>
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
<CAPTION>
<S> <C> <C> <C>
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>
- --------------------------------------------------------------------------------
GROWTH OPPORTUNITIES FUND
<TABLE>
<CAPTION>
Net
gain (loss)
Net on invest- Total Dividends Distri-
Net Asset invest- ments (both from from net butions Net Asset Net Assets
Value, ment realized invest- invest- from Total Value, end of
Period beginning income and ment ment capital distri- end of Total period
Ended of period (loss)(/1/) unrealized) operations income gains butions period Return(/2/) (000's)
- ------ --------- ----------- ----------- ---------- --------- ------- ------- --------- ----------- ----------
Class A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95......... $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
<CAPTION>
Class B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
Class II
--------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/02/99-
9/30/99(/4/)... $19.86 $(0.21) $2.23 $2.02 $ -- $ -- $ -- $21.88 10.17% $ 1,089
<CAPTION>
Ratio of net
investment
Ratio of income
expenses (loss)
Period to average to average Portfolio
Ended net assets net assets turnover
- ------ -------------- ----------------- ---------
<S> <C> <C> <C>
9/30/95......... 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
<CAPTION>
<S> <C> <C> <C>
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
<CAPTION>
<S> <C> <C> <C>
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>
11
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
NEW CENTURY FUND
<TABLE>
<CAPTION>
Net
gain (loss)
Net on invest- Total Dividends Distri-
Net Asset invest- ments (both from from net butions Net Asset Net Assets
Value, ment realized invest- invest- from Total Value, end of
Period beginning income and ment ment capital distri- end of Total period
Ended of period (loss)(/1/) unrealized) operations income gains butions period Return(/2/) (000's)
- ------ --------- ----------- ----------- ---------- --------- ------- ------- --------- ----------- ----------
Class A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95......... $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
<CAPTION>
Class B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95......... $16.70 $(0.16) $ 8.19 $ 8.03 $ -- $(0.41) $(0.41) $24.32 49.08% $ 63,313
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
<CAPTION>
Class II
---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
Ratio of net
investment
Ratio of income
expenses (loss)
Period to average to average Portfolio
Ended net assets net assets turnover
- ------ ------------------ --------------------- ---------
<S> <C> <C> <C>
9/30/95......... 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
<CAPTION>
<S> <C> <C> <C>
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
<CAPTION>
<S> <C> <C> <C>
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
</TABLE>
- ----
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Commencement of sales of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net as-
sets):
<TABLE>
<CAPTION>
9/30/98 9/30/99
------- -------
<S> <C> <C>
New Century Class II............................ 13.58% 2.48%
</TABLE>
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
Net
gain (loss)
Net on invest- Total Dividends Distri-
Net Asset invest- ments (both from from net butions Net Asset Net Assets
Value, ment realized invest- invest- from Total Value, end of
Period beginning income and ment ment capital distri- end of Total period
Ended of period (loss)(/1/) unrealized) operations income gains butions period Return(/2/) (000's)
- ------ --------- ----------- ----------- ---------- --------- ------- ------- --------- ----------- ----------
Class A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95......... $ 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
<CAPTION>
Class B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
Class II
---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
Ratio of net
investment
Ratio of income
expenses (loss)
Period to average to average Portfolio
Ended net assets net assets turnover
- ------ ---------------- --------------------- ---------
<S> <C> <C> <C>
9/30/95......... 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
<CAPTION>
<S> <C> <C> <C>
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
<CAPTION>
<S> <C> <C> <C>
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
</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 as-
sets):
<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%
</TABLE>
12
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BALANCED ASSETS FUND
<TABLE>
<CAPTION>
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period income(/1/) unrealized) operations income gains butions period Return(/2/) (000's)
- ------ --------- ----------- ----------- ---------- --------- ------- ------- --------- ----------- ----------
Class A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
Class B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
Class II
--------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
investment
Ratio of income
expenses (loss)
Period to average to average Portfolio
Ended net assets net assets turnover
- ------ ------------------ ------------------- ---------
<S> <C> <C> <C>
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
<CAPTION>
<S> <C> <C> <C>
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
<CAPTION>
<S> <C> <C> <C>
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 as-
sets):
<TABLE>
<CAPTION>
9/30/99
-------
<S> <C>
Balanced Assets Class II..................................... 1.41%
</TABLE>
"DOGS" OF WALL STREET FUND
<TABLE>
<CAPTION>
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period income(/1/) unrealized) operations income gains butions period Return(/2/) (000's)
- ------ --------- ----------- ----------- ---------- --------- ------- ------- --------- ----------- ----------
Class A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/08/98-
9/30/98(/3/)... $12.50 $0.07 $(1.51) $(1.44) $ -- $-- $ -- $11.06 (11.52)% $16,672
9/30/99......... 11.06 0.21 0.73 0.94 (0.13) -- (0.13) 11.87 8.47 26,403
<CAPTION>
Class B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/08/98-
9/30/98(/3/)... $12.50 $0.04 $(1.51) $(1.47) $ -- $-- $ -- $11.03 (11.76)% $19,734
9/30/99......... 11.03 0.14 0.72 0.86 (0.08) -- (0.08) 11.81 7.82 55,526
<CAPTION>
Class II
--------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/08/98-
9/30/98(/3/)... $12.50 $0.04 $(1.51) $(1.47) $ -- $-- $ -- $11.03 (11.76)% $20,108
9/30/99......... 11.03 0.14 0.72 0.86 (0.08) -- (0.08) 11.81 7.82 94,065
<CAPTION>
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>
6/08/98-
9/30/98(/3/)... 0.95%(/4/)(/5/) 1.78%(/4/)(/5/) 0%
9/30/99......... 0.95(/5/) 1.69(/5/) 35
<CAPTION>
<S> <C> <C> <C>
6/08/98-
9/30/98(/3/)... 1.60%(/4/)(/5/) 1.39%(/4/)(/5/) 0%
9/30/99......... 1.60(/5/) 1.08(/5/) 35
<CAPTION>
<S> <C> <C> <C>
6/08/98-
9/30/98(/3/)... 1.60%(/4/)(/5/) 1.45%(/4/)(/5/) 0%
9/30/99......... 1.60(/5/) 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 as-
sets):
<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>
13
<PAGE>
Shareholder Account Information
- --------------------------------------------------------------------------------
SELECTING A SHARE CLASS
Each Fund offers three classes of shares through this prospectus: Class A,
Class B and Class II shares.
Each class of shares has its own cost structure, so you can choose the one best
suited to your investment needs. Your broker or financial advisor can help you
determine which class is right for you.
Class A Class B Class II
Front-end sales No front-end Front-end sales
charges, as sales charge; all charge, as
described below. your money goes described below.
There are several to work for you
ways to reduce right away. Higher annual
these charges, Higher annual expenses than
also described expenses than Class A shares.
below. Class A shares.
Lower annual
expenses than
Class B or Class Deferred sales Deferred sales
II shares. charge on shares charge on shares
you sell within you sell within
six years of eighteen months
purchase, as of purchase, as
described below. described below.
No conversion to
Automatic Class A.
conversion to
Class A shares
approximately one
year after such
time that no CDSC
would be payable
upon redemption,
as described
below, thus
reducing future
annual expenses.
CALCULATION OF SALES CHARGES
Class A. Sales Charges are as follows:
<TABLE>
<CAPTION>
Concession to
Sales Charge Dealers
-------------------------------
% of % of Net % of
Offering Amount Offering
Your Investment Price Invested Price
-------------------------------
<S> <C> <C> <C>
Less than $50,000............................... 5.75% 6.10% 5.00%
$50,000 but less than $100,000.................. 4.75% 4.99% 4.00%
$100,000 but less than $250,000................. 3.75% 3.90% 3.00%
$250,000 but less than $500,000................. 3.00% 3.09% 2.25%
$500,000 but less than $1,000,000............... 2.10% 2.15% 1.35%
$1,000,000 or more.............................. None None 1.00%
</TABLE>
Investments of $1 million or more: Class A shares are available with no front-
end sales charge. However, a 1% CDSC is imposed on shares you sell within one
year of purchase and a 0.50% CDSC is charged on shares you sell after the first
year and within the second year after purchase.
Class B. Shares are offered at their net asset value per share, without any
initial sales charge. However, there is a CDSC on shares you sell within six
years of buying them. The longer the time between the purchase and the sale of
shares, the lower the rate of the CDSC:
Class B deferred charges:
<TABLE>
<CAPTION>
CDSC on shares being
Years after purchase sold
<S> <C>
1st or 2nd year 4.00%
3rd or 4th year 3.00%
5th year 2.00%
6th year 1.00%
7th year and thereafter None
</TABLE>
Class II. Sales Charges are as follows:
<TABLE>
<CAPTION>
Concession to
Sales Charge Dealers
---------------------------------------------------------------------------------------
% of % of Net % of
Offering Amount Offering
Price Invested Price
---------------------------------------------------------------------------------------
<S> <C> <C>
1.00% 1.01% 1.00%
</TABLE>
There is also a CDSC of 1% on shares you sell within 18 months after you buy
them.
Determination of CDSC: Each CDSC is based on the original purchase cost or the
current market value of the shares being sold, whichever is less. There is no
CDSC on shares you purchase through reinvestment of dividends. To keep your
CDSC as low as possible, each time you place a request to sell shares we will
first sell any shares in your account that are not subject to a CDSC. If there
are not enough of these shares available, we will sell shares that have the
lowest CDSC.
For purposes of the CDSC, we count all purchases you make during a calendar
month as having been made on the FIRST day of that month.
14
<PAGE>
- --------------------------------------------------------------------------------
SALES CHARGE REDUCTIONS AND WAIVERS
Waivers for Certain Investors. Various individuals and institutions may pur-
chase Class A shares without front-end sales charges, including:
. financial planners, institutions, broker-dealer representatives or regis-
tered investment advisers utilizing Fund shares in fee-based investment
products under an agreement with the Distributor (this waiver may also ap-
ply to front-end sales charges of Class II shares)
. participants in certain retirement plans that meet applicable conditions,
as described in the Statement of Additional Information
. Fund Trustees and other individuals, and their families, who are affili-
ated with the Funds or any Fund distributed by SunAmerica Capital Servic-
es, Inc.
. selling brokers and their employees and sales representatives and their
families
. participants in "Net Asset Value Transfer Program"
We will generally waive the CDSC for Class B or Class II shares in the follow-
ing cases:
. within one year of the shareholder's death or becoming disabled
. taxable distributions or loans to participants made by qualified retire-
ment plans or retirement accounts (not including rollovers) for which
SunAmerica Fund Services, Inc. serves as a fiduciary
. Trustees and other individuals, and their families, who are affiliated
with any Fund or any Fund distributed by SunAmerica Capital Services, Inc.
. to make payments through the Systematic Withdrawal Plan (subject to cer-
tain conditions)
. participants in "Net Asset Value Transfer Program"
Reducing your Class A sales charges. There are several special purchase plans
that allow you to combine multiple purchases of Class A shares of SunAmerica
Mutual Funds to take advantage of the breakpoints in the sales charge schedule.
For information about the "Rights of Accumulation," "Letter of Intent," "Com-
bined Purchase Privilege," and "Reduced Sales Charges for Group Purchases,"
contact your broker or financial advisor, or consult the Statement of Addi-
tional Information.
To utilize: if you think you may be eligible for a sales charge reduction or
CDSC waiver, contact your broker or financial advisor.
Reinstatement privilege. If you sell shares of a Fund, within one year after
the sale you may invest some or all of the proceeds of the sale in the same
share class of the same Fund without a sales charge. A shareholder may use the
reinstatement privilege only one time after selling such shares. If you paid a
CDSC when you sold your shares, we will credit your account with the dollar
amount of the CDSC at the time of sale. All accounts involved must be regis-
tered in the same name(s).
DISTRIBUTION AND SERVICE (12b-1) FEES
Each class of shares of each Fund has its own 12b-1 plan that provides for dis-
tribution and account maintenance and service fees (payable to the Distributor)
based on a percentage of average daily net assets, as follows:
<TABLE>
<CAPTION>
Account
Maintenance
and
Class Distribution Fee Service Fee
<S> <C> <C>
A 0.10% 0.25%
B 0.75% 0.25%
II 0.75% 0.25%
</TABLE>
Because 12b-1 fees are paid out of the Fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
OPENING AN ACCOUNT
1. Read this prospectus carefully.
2. Determine how much you want to invest. The minimum initial investments for
the Funds are as follows:
.non-retirement account: $500
.retirement account: $250
.dollar cost averaging: $500 to open; you must invest at least $25 a month
The minimum subsequent investments for the Funds are as follows:
.non-retirement account: $100
.retirement account: $25
3. Complete the appropriate parts of the Account Application, carefully follow-
ing the instructions. If you have questions, please contact your broker or
financial advisor or call Shareholder/Dealer Services at 1-800-858-8850, ex-
tension 5125.
4. Complete the appropriate parts of the Supplemental Account Application. By
applying for additional investor services now, you can avoid the delay and
inconvenience of having to submit an additional application if you want to
add services later.
5. Make your initial investment using the chart on the next page. You can ini-
tiate any purchase, exchange or sale of shares through your broker or finan-
cial advisor.
15
<PAGE>
Shareholder Account Information
- --------------------------------------------------------------------------------
BUYING SHARES
Opening an account Adding to an account
By check
................................................................................
Make out a check for the Make out a check for the
investment amount, payable investment amount payable
to the specific Fund or to the specific Fund or
SunAmerica Funds. SunAmerica Funds.
Include the stub from your
Fund statement or a note
Deliver the check and your specifying the Fund name,
completed Account your share class, your
Application (and account number and the
Supplemental Account name(s) in which the
Application, if account is registered.
applicable) to your broker
or financial advisor, or
mail them to:
Indicate the Fund and
account number in the memo
section of your check.
SunAmerica Fund Services, Inc.
Mutual Fund Operations, 3rd Floor Deliver the check and your
The SunAmerica Center note to your broker or
financial advisor, or mail
them to
733 Third Avenue
New York, New York 10017-3204. Non-Retirement Accounts:
SunAmerica Fund Services,
Inc.
c/o NFDS
P.O. Box 419373
Kansas City, Missouri
64141-6373
Retirement Accounts:
SunAmerica Fund Services,
Inc.
Mutual Fund Operations, 3rd
Floor
The SunAmerica Center
733 Third Avenue
New York, New York 10017-
3204
By wire
................................................................................
Instruct your bank to wire
Deliver your completed the amount of your invest-
application to your broker ment to:
or financial advisor or
fax it to SunAmerica Fund
Services, Inc. at 212-551-
5585.
State Street Bank & Trust
Company
Boston, MA
ABA #0110-00028
Obtain your account number DDA # 99029712
by referring to your
statement or by calling
your broker or financial
advisor or
Shareholder/Dealer Serv-
ices at 1-800-858-8850,
ext. 5125.
Specify the Fund name, your
share class, your Fund num-
ber, account number and the
name(s) in which the account
is registered. Your bank may
charge a fee to wire funds.
Instruct your bank to wire
the amount of your invest-
ment to:
State Street Bank & Trust Company
Boston, MA
ABA #0110-00028
DDA # 99029712
Specify the Fund name, your
choice of share class, your
new Fund number and account
number and the name(s) in
which the account is regis-
tered. Your bank may charge a
fee to wire funds.
To open or add to an account using dollar cost averaging, see "Additional In-
vestor Services."
16
<PAGE>
- --------------------------------------------------------------------------------
SELLING SHARES
How Requirements
Through Your Broker or Financial Advisor
................................................................................
Accounts of any type. Call your broker or
Sales of any amount. financial advisor to place
your order to sell shares.
By mail
................................................................................
Accounts of any type. Write a letter of
Include all signatures and instruction indicating the
any additional documents Fund name, your share
that may be required (see class, your account
next page). number, the name(s) in
which the account is
Mail the materials to: registered and the dollar
value or number of shares
you wish to sell.
Sales of $100,000 or more
SunAmerica Fund Services, require the letter of
Inc. instruction to have a
Mutual Fund Operations, 3rd signature guarantee.
Floor A check will normally be
mailed on the next
The SunAmerica Center business day to the
733 Third Avenue name(s) and address in
New York, New York 10017- which the account is
3204 registered, or otherwise
according to your letter
of instruction.
By phone
................................................................................
Most accounts. Call Shareholder/Dealer
Sales of less than Services at 1-800-858-
$100,000. 8850, extension 5125
between 8:30 a.m. and 7:00
p.m. (Eastern time) on
most business days. State
the Fund name, the name of
the person requesting the
redemption, your share
class, your account
number, the name(s) in
which the account is
registered and the dollar
value or number of shares
you wish to sell.
A check will be mailed to
the name(s) and address in
which the account is reg-
istered, or to a different
address indicated in a
written authorization pre-
viously provided to the
Fund by the shareholder(s)
on the account.
By wire
................................................................................
Request by mail to sell Proceeds will normally be
any amount (accounts of wired on the next business
any type). day. A $15 fee will be
deducted from your
Request by phone to sell account.
less than $100,000.
To sell shares through a systematic withdrawal plan, see "Additional Investor
Services."
17
<PAGE>
Shareholder Account Information
- --------------------------------------------------------------------------------
Selling shares in writing. In certain circumstances, you will need to make your
request to sell shares in writing. Corporations, executors, administrators,
trustees or guardians may need to include additional items with a request to
sell shares. You may also need to include a signature guarantee, which protects
you against fraudulent orders. You will need a signature guarantee if:
your address of record has changed within the past 30 days
you are selling shares worth $100,000 or more
you are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s)
You can generally obtain a signature guarantee from the following sources:
a broker or securities dealer
a federal savings, cooperative or other type of bank
a savings and loan or other thrift institution
a credit union
a securities exchange or clearing agency
A notary public CANNOT provide a signature guarantee.
TRANSACTION POLICIES
Valuation of shares. The net asset value per share (NAV) for each Fund and
class is determined each business day at the close of regular trading on the
New York Stock Exchange (generally 4:00 p.m., Eastern time) by dividing the net
assets of each class by the number of its shares outstanding. Investments for
which market quotations are readily available are valued at their price as of
the close of regular trading on the New York Stock Exchange for the day. All
other securities and assets are valued at fair value following procedures ap-
proved by the Trustees.
Buy and sell prices. When you buy shares, you pay the NAV plus any applicable
sales charges, as described earlier. When you sell shares, you receive the NAV
minus any applicable CDSCs.
Execution of requests. Each Fund is open on those days when the New York Stock
Exchange is open for regular trading. We execute buy and sell requests at the
next NAV to be calculated after the Fund receives your request in good order.
If the Fund or the Distributor receives your order before a Fund's close of
business (generally 4:00 p.m., Eastern time), you will receive that day's clos-
ing price. If the Fund or the Distributor receives your order after that time,
you will receive the next business day's closing price. If you place your order
through a broker or financial advisor, you should make sure the order is trans-
mitted to the Fund before the Fund's close of business. The Fund and the Dis-
tributor reserve the right to reject any order to buy shares.
During periods of extreme volatility or market crisis, a Fund may temporarily
suspend the processing of sell requests, or may postpone payment of proceeds
for up to three business days or longer, as allowed by federal securities laws.
Each Fund may invest in securities that are primarily listed on foreign ex-
changes that trade on weekends or other days when the Fund does not price its
shares. As a result, the value of a Fund's shares may change on days when you
will not be able to purchase or redeem your shares.
If the Fund determines that it would be detrimental to the best interests of
the remaining shareholders of the Fund to make payment of redemption proceeds
wholly or partly in cash, the Fund may pay the redemption price by a distribu-
tion in kind of securities from the Fund in lieu of cash. However, the Fund has
made an election that requires it to pay a certain portion of redemption pro-
ceeds in cash.
At various times, a Fund may be requested to redeem shares for which it has not
yet received good payment. A Fund may delay or cause to be delayed the mailing
of a redemption check until such time as good payment (e.g., cash or certified
check drawn on a United States bank) has been collected for the purchase of
such shares, which will not exceed 15 days.
Telephone transactions. For your protection, telephone requests are recorded in
order to verify their accuracy. In addition, Shareholder/Dealer Services will
take measures to verify the identity of the caller, such as asking for name,
account number, social security or other taxpayer ID number and other relevant
information. If appropriate measures are not taken, the Fund is responsible for
any losses that may occur to any account due to an unauthorized telephone call.
Also for your protection, telephone transactions are not permitted on accounts
whose names or addresses have changed within the past 30 days. At times of peak
activity, it may be difficult to place requests by phone. During these times,
consider sending your request in writing.
Exchanges. You may exchange shares of a Fund for shares of the same class of
any other fund distributed by SunAmerica Capital Services, Inc. Before making
an exchange, you should review a copy of the prospectus of the fund into which
you would like to exchange. All exchanges are subject to applicable minimum in-
vestment requirements. A Systematic Exchange Program is described under "Addi-
tional Investor Services."
If you exchange shares that were purchased subject to a CDSC, the CDSC will
continue to apply following the exchange. In determining the CDSC applicable to
shares being sold after an exchange, we will take into account the length of
time you held those shares prior to the exchange.
To protect the interests of other shareholders, we may cancel the exchange
privileges of any investors that, in the opinion of the Fund, are using market
timing strategies or making excessive exchanges. A Fund may change or cancel
its exchange privilege at any time, upon 60 days' written notice to its share-
holders. A Fund may also refuse any exchange order.
18
<PAGE>
- --------------------------------------------------------------------------------
Certificated shares. Most shares are electronically recorded. If you wish to
have certificates for your shares, please call Shareholder/Dealer Services at
1-800-858-8850, extension 5125 for further information. You may sell or ex-
change certificated shares only by returning the certificates to the Funds,
along with a letter of instruction and a signature guarantee. The Funds do not
issue certificates for fractional shares.
Multi-party checks. The Fund may agree to accept a "multi-party check" in pay-
ment for Fund shares. This is a check made payable to the investor by another
party and then endorsed over to the Fund by the investor. If you use a multi-
party check to purchase shares, you may experience processing delays. In addi-
tion, the Fund is not responsible for verifying the authenticity of any en-
dorsement and assumes no liability for any losses resulting from a fraudulent
endorsement.
ADDITIONAL INVESTOR SERVICES
To select one or more of these additional services, complete the relevant
part(s) of the Supplemental Account Application. To add a service to an exist-
ing account, contact your broker or financial advisor, or call
Shareholder/Dealer Services at 1-800-858-8850, extension 5125.
Dollar Cost Averaging lets you make regular investments from your bank account
to the Fund or any other fund of your choice distributed by SunAmerica Capital
Services, Inc. You determine the frequency and amount of your investments, and
you can terminate your participation at any time.
Systematic Withdrawal Plan may be used for routine bill payment or periodic
withdrawals from your account. To use:
Make sure you have at least $5,000 worth of shares in your account.
Make sure you are not planning to invest more money in this account (buying
shares during a period when you are also selling shares of the same Fund is
not advantageous to you, because of sales charges).
Specify the payee(s) and amount(s). The payee may be yourself or any other
party (which may require a signature guarantee), and there is no limit to
the number of payees you may have, as long as they are all on the same pay-
ment schedule. Each withdrawal must be at least $50.
Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
Make sure your dividends and capital gains are being reinvested.
You cannot elect the systematic withdrawal plan if you have requested certifi-
cates for your shares.
Systematic Exchange Program may be used to exchange shares of a Fund periodi-
cally for the same class of shares of one or more other funds distributed by
SunAmerica Capital Services, Inc. To use:
Specify the Fund(s) from which you would like money withdrawn and into
which you would like money invested.
Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
Specify the amount(s). Each exchange must be worth at least $50.
Accounts must be registered identically; otherwise a signature guarantee
will be required.
Asset Protection Plan (optional) Anchor National Life Insurance Company offers
an Asset Protection Plan to certain investors in the Funds. The benefits of
this optional coverage payable at death will be related to the amounts paid to
purchase Fund shares and to the value of the Fund shares held for the benefit
of the insured persons. However, to the extent the purchased shares are re-
deemed prior to death, coverage with respect to these shares will terminate.
Purchasers of the Asset Protection Plan are required to authorize periodic re-
demptions of Fund shares to pay the premiums for this coverage. These redemp-
tions will not be subject to CDSCs but will have the same tax consequences as
any other Fund redemptions.
The Asset Protection Plan will be available to eligible persons who enroll for
the coverage within a limited time period after shares in any Fund are
initially purchased or transferred. In addition, coverage cannot be made
available unless Anchor National knows for whose benefit shares are purchased.
For instance, coverage cannot be made available for shares registered in the
name of your broker unless the broker provides Anchor National with information
regarding the beneficial owners of the shares. In addition, coverage is
available only to shares purchased on behalf of natural persons between 21 and
75 years of age; coverage is not available with respect to shares purchased for
a retirement account. Other restrictions on the coverage apply. This coverage
may not be available in all states and may be subject to additional
restrictions or limitations. Purchasers of shares should also make themselves
familiar with the impact on the Asset Protection Plan coverage of purchasing
additional shares, reinvestment of dividends and capital gains distributions
and redemptions.
Anchor National is a SunAmerica company.
Please call 1-800-858-8850, extension 5660 for more information, including the
cost of the Asset Protection Plan option.
19
<PAGE>
Shareholder Account Information
- --------------------------------------------------------------------------------
Retirement plans. SunAmerica Mutual Funds offer a range of qualified retirement
plans, including IRAs, Roth IRAs, Simple IRAs, SEPs, SARSEPs, 401(k) plans,
403(b) plans and other pension, educational and profit-sharing plans. Using
these plans, you can invest in any fund distributed by SunAmerica Capital Serv-
ices, Inc. with a low minimum investment of $250 or, for some group plans, no
minimum investment at all. To find out more, call Retirement Plans at 1-800-
858-8850, extension 5134.
DIVIDEND, DISTRIBUTION AND ACCOUNT POLICIES
Account statements. In general, you will receive account statements as follows:
after every transaction that affects your account balance (except a divi-
dend reinvestment or automatic purchase from or automatic redemption to
your bank account)
after any changes of name or address of the registered owner(s)
in all other circumstances, annually
Every year you should also receive, if applicable, a Form 1099 tax information
statement, mailed by January 31.
Dividends. The Funds generally distribute most or all of their net earnings in
the form of dividends. Income dividends, if any, are paid quarterly by the
Growth and Income Fund and Balanced Assets Fund, and annually by the other
Funds. Capital gains distributions, if any, are paid at least annually by the
Funds.
Dividend Reinvestments. Your dividends and distributions, if any, will be auto-
matically reinvested in additional shares of the same Fund and share class on
which they were paid. Alternatively, dividends and distributions may be rein-
vested in any fund distributed by SunAmerica Capital Services, Inc. or paid in
cash (if more than $10). You will need to complete the relevant part of the Ac-
count Application to elect one of these other options. For existing accounts,
contact your broker or financial advisor or call Shareholder/Dealer Services at
1-800-858-8850, extension 5125 to change dividend and distribution payment op-
tions.
Taxability of dividends. As long as each Fund meets the requirements for being
a tax-qualified regulated investment company, which each Fund intends to do, it
pays no federal income tax on the earnings it distributes to shareholders.
Consequently, dividends you receive from the Fund, whether reinvested or taken
as cash, are generally considered taxable. Distributions of the Fund's long-
term capital gains are taxable as capital gains; dividends from other sources
are generally taxable as ordinary income.
Some dividends paid in January, which were declared in a previous quarter, will
be taxable as if they had been paid the previous December. Corporations may be
entitled to take a dividends-received deduction for a portion of certain divi-
dends they receive.
The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify tax liability with your
tax professional.
"Buying into a Dividend." You should note that if you purchase shares just be-
fore a distribution, you will be taxed for that distribution like other share-
holders, even though that distribution represents simply a return of part of
your investment. You may wish to defer your purchase until after the record
date for the distribution, so as to avoid this tax impact.
Taxability of transactions. Any time you sell or exchange shares, it is consid-
ered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions. If you hold Class B shares, you will not have a taxable event
when they convert into Class A shares.
Other Tax Considerations. If you are neither a lawful permanent resident nor a
citizen of the U.S. or if you are a foreign entity, ordinary income dividends
paid to you (which include distributions of net short-term capital gains) will
generally be subject to a 30% U.S. withholding tax, unless a lower treaty rate
applies.
By law, each Fund must withhold 31% of your distributions and proceeds if you
have not provided a taxpayer identification number or social security number.
This section summarizes some of the consequences under current federal tax law
of an investment in a Fund. It is not a substitute for professional tax advice.
Consult your tax advisor about the potential tax consequences of an investment
in a Fund under all applicable laws.
Small accounts. If you draw down an account so that its total value is less
than $500 ($250 for retirement plan accounts), you may be asked to purchase
more shares within 60 days. If you do not take action, the Fund may close out
your account and mail you the proceeds. Alternatively, you may be charged a
$2.00 monthly charge to maintain your account. Your account will not be closed
if its drop in value is due to Fund performance or the effects of sales
charges.
20
<PAGE>
- --------------------------------------------------------------------------------
(THIS PAGE INTENTIONALLY LEFT BLANK)
21
<PAGE>
More Information About the Funds
- --------------------------------------------------------------------------------
FUND INVESTMENT
STRATEGIES
Each Fund has
its own
investment
goal and a
strategy for
pursuing it.
The chart
summarizes
information
about each
Fund's
investment
approach.
Following
this chart is
a glossary
that further
describes the
investment
and risk
terminology
that we use.
Please review
the glossary
in
conjunction
with this
chart.
<TABLE>
<CAPTION>
Blue Chip Growth
Growth Opportunities
<S> <C> <C>
What is the Fund's Capital appreciation Capital appreciation
investment goal?
- --------------------------------------------------------------------------------------
What investment strategies growth growth
does the Fund use to
implement its principal
investment strategies?
- --------------------------------------------------------------------------------------
What are the Fund's . active trading of . active trading of stocks
principal investment stocks of large-cap of mid-cap companies that
techniques? companies that offer offer the potential for
the potential for capital appreciation
capital appreciation
- --------------------------------------------------------------------------------------
What other types of . Foreign securities .Small-cap stocks
securities may the Fund .Large-cap stocks
significantly invest?
- --------------------------------------------------------------------------------------
In what type of securities .short-term . Short-term investments
may the Fund normally invest investments (up to 10%)
as part of efficient (up to 10%) .Defensive investments
portfolio management or for .Defensive instruments .Options and futures
return enhancement purposes? .Foreign securities .Special situations
.Options and futures
.Special situations
- --------------------------------------------------------------------------------------
What risks normally may .Stock market . Stock market volatility
affect the Fund? volatility .Securities selection
.Securities selection .Small market capitalization
.Small market . Technology company
capitalization .Derivatives
.Foreign securities .Hedging
.Derivatives
.Hedging
.Emerging markets
</TABLE>
22
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth and Balanced "Dogs" of
New Century Income Assets Wall Street
<S> <C> <C> <C>
Capital appreciation Capital appreciation and Conservation of principal Total return (including
current income and capital appreciation capital appreciation and
current income)
- -------------------------------------------------------------------------------------------------------------------
growth growth and value asset allocation and growth and value
growth
- -------------------------------------------------------------------------------------------------------------------
. active trading of .active trading of stocks .active trading of stocks . employ a "buy and hold"
stocks that that strategy with thirty high
that offer the pay dividends offer the potential for dividend yielding common
potential . active trading of capital stocks selected annually
for capital stocks that appreciation from the Dow Jones
appreciation without offer the potential for .purchase high-quality Industrial Average and the
regard to market capital bonds broader market
capitalization appreciation
.active trading of stocks
that
are believed to be
undervalued
- -------------------------------------------------------------------------------------------------------------------
. None . Small-cap stocks .Small-cap stocks . None
.Foreign securities .Foreign securities
.Investment grade fixed .Junk bonds (up to 15%)
income securities
- -------------------------------------------------------------------------------------------------------------------
. Short-term investments .Short-term investments .Short-term investments . Annual rebalancing
(up to 10%) (up to 10%) (up to 10%) . Cash flow management
. Defensive investments .Defensive instruments .Defensive investments . Short-term investments
. Options and futures .Options and futures .Options and futures
. Special situations .Special situations .Special situations
- -------------------------------------------------------------------------------------------------------------------
. Stock market . Stock market volatility . Stock market volatility . Stock market volatility
volatility . Securities selection . Securities selection . Disciplined strategy
. Securities selection . Small market . Small market . Non-diversification
. Small market capitalization capitalization
capitalization . Foreign securities . Foreign securities
. Technology company . Derivatives . Derivatives
. Derivatives . Hedging . Hedging
. Hedging . Interest rate . Interest rate
fluctuations fluctuations
. Credit quality . Credit quality
. Emerging markets . Emerging markets
</TABLE>
23
<PAGE>
More Information About the Funds
- --------------------------------------------------------------------------------
GLOSSARY
Large-cap
companies and
Mid-cap com-
panies gener-
ally have a
substantial
record of op-
erations
(i.e., in
business for
at least five
years) and
are listed
for trading
on the New
York Stock
Exchange or
another na-
tional or in-
ternational
stock ex-
change or, in
some cases,
are traded
over the
counter.
Small-cap
companies
generally
will be com-
panies that
have been in
business for
a shorter pe-
riod of time.
The two best-
known debt
rating agen-
cies are
Standard &
Poor's Rating
Services, a
Division of
The McGraw-
Hill Compa-
nies, Inc.
and Moody's
Investors
Service, Inc.
"Investment
grade" refers
to any secu-
rity rated
"BBB" or
above by
Standard &
Poor's or
"Baa" or
above by
Moody's.
INVESTMENT TERMINOLOGY
Capital appreciation is growth of the value of an investment.
Conservation of principal means investing in a manner that tries to protect the
value of an investment against market movements and other economic events.
Active trading means that a Fund may engage in frequent trading of portfolio
securities to achieve its investment goal. In addition, because a Fund may sell
a security without regard to how long it has held the security, active trading
may have tax consequences for certain shareholders, involving a possible in-
crease in short-term capital gains or losses. Active trading may result in high
portfolio turnover and correspondingly greater brokerage commissions and other
transaction costs, which will be borne directly by a Fund. During periods of
increased market volatility, active trading may be more pronounced.
Asset allocation means investing in a manner that divides investments among
different classes of assets, such as stocks and bonds.
Large-cap companies are those with market caps within the Morningstar, Inc.
Large-Cap category, as described on page 3. Currently, this range is $9.5 bil-
lion or higher.
Mid-cap companies are those with markets caps within the Morningstar, Inc. Mid-
Cap category, as described on page 3. Currently, this range is between $1.5
billion and 9.5 billion.
Small-cap companies are those with market caps within the Morningstar, Inc.
Small-Cap category, as described on page 3. Currently, this range is $1.5 bil-
lion or less.
Fixed income securities provide consistent interest or dividend payments. They
include corporate bonds, notes, debentures, preferred stocks, convertible secu-
rities, U.S. government securities and mortgage-backed and asset-backed securi-
ties. The issuer of a senior fixed income security is obligated to make pay-
ments on this security ahead of other payments to security holders. An invest-
ment grade fixed income security is rated in one of the top four ratings cate-
gories by a debt rating agency (or is considered of comparable quality by the
Adviser).
A "junk bond" is a high yield, high risk bond that does not meet the credit
quality standards of investment grade securities.
Short-term investments include money market securities such as short-term U.S.
government obligations, commercial paper, bankers' acceptances and certificates
of deposit. These securities provide a Fund with sufficient liquidity to meet
redemptions and cover expenses.
Defensive investments include high quality fixed income securities and money
market instruments. A Fund will make temporary defensive investments in re-
sponse to adverse market, economic, political or other conditions. When a Fund
takes a defensive position, it may miss out on investment opportunities that
could have resulted from investing in accordance with its principal investment
strategy. As a result, a Fund may not achieve its investment goal.
Foreign securities are issued by companies located outside of the United States
including emerging markets. Foreign securities may include American Depositary
Receipts (ADRs) or other similar securities that convert into foreign securi-
ties, such as European Depository Receipts (EDRs) and Global Depository Re-
ceipts (GDRs).
A derivative instrument is a contract, such as an option or a future, whose
value is based on the performance of an underlying asset.
Options and futures are contracts involving the right to receive or obligation
to deliver assets or money depending on the performance of one or more under-
lying assets or a market or economic index.
Annual rebalancing No later than January 15 of each year, the Adviser will
rebalance the Fund's holdings to create equal weightings among the thirty
stocks selected on the basis of the criteria applied as of the preceding Decem-
ber 31st. The Adviser will implement the rebalancing by purchasing new stocks
that meet the selection criteria, selling stocks that no longer meet the selec-
tion criteria, and adjusting its ownership of stocks that continue to meet the
criteria in order to achieve the proper weightings of each of the thirty
stocks.
A special situation arises when, in the opinion of the Adviser, the securities
of a particular issuer will be recognized and appreciated in value due to a
specific development with respect to that issuer. Developments creating a spe-
cial situation might include, among others, a new product or process, a techno-
logical breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security. Invest-
ments in special situations may carry an additional risk of loss in the event
that the anticipated development does not occur or does not attract the ex-
pected attention.
24
<PAGE>
- --------------------------------------------------------------------------------
Cash flow management Because the "Dogs" of Wall Street Fund will be at all
times fully invested in the stocks selected using the criteria described above,
the Fund will use the following policies to manage cash that it receives from
the sale of its shares. As the Fund's shares are sold during the year, new cash
received by the Fund will first be used to the extent necessary to meet redemp-
tion requests. The balance of any such cash will be invested weekly (or more
frequently as the Adviser deems necessary) in the thirty stocks selected for
the Fund. The Fund will purchase the stocks as of its most recent rebalancing
in proportion to the current weightings of such stocks in the Fund's portfolio
and without any intention to rebalance the Fund's holdings on an interim basis.
To the extent redemptions exceed available cash, the Fund will generally meet
redemption requests by selling stocks on a pro rata basis (subject to rounding
and the avoidance of odd lots), based on the current weightings of such stocks
in the Fund's portfolio and without any intention to rebalance the Fund's hold-
ings on an interim basis.
RISK TERMINOLOGY
Market volatility: The stock and/or bond markets as a whole could go up or down
(sometimes dramatically). This could affect the value of the securities in a
Fund's portfolio.
Securities selection: A strategy used by a Fund, or securities selected by its
portfolio manager, may fail to produce the intended return.
Small market capitalization: Companies with smaller market capitalizations
(particularly under $1 billion) tend to be at early stages of development with
limited product lines, market access for products, financial resources, access
to new capital, or depth in management. It may be difficult to obtain reliable
information and financial data about these companies. Consequently, the securi-
ties of smaller companies may not be as readily marketable and may be subject
to more abrupt or erratic market movements.
Foreign exposure: Investors in foreign countries are subject to a number of
risks. A principal risk is that fluctuations in the exchange rates between the
U.S. dollar and foreign currencies may negatively affect an investment. In ad-
dition, there may be less publicly available information about a foreign com-
pany and it may not be subject to the same uniform accounting, auditing and fi-
nancial reporting standards as U.S. companies. Foreign governments may not reg-
ulate securities markets and companies to the same degree as the U.S. govern-
ment. Foreign investments will also be affected by local political or economic
developments and governmental actions. Consequently, foreign securities may be
less liquid, more volatile and more difficult to price than U.S. securities.
These risks are heightened when the issuer is in an emerging market.
Interest rate fluctuations: Volatility of the bond market is due principally to
changes in interest rates. As interest rates rise, bond prices typically fall;
and as interest rates fall, bond prices typically rise. Longer-term and lower
coupon bonds tend to be more sensitive to changes in interest rates.
Credit quality: The creditworthiness of the issuer is always a factor in ana-
lyzing fixed income securities. An issuer with a lower credit rating will be
more likely than a higher rated issuer to default or otherwise become unable to
honor its financial obligations. This type of issuer will typically issue junk
bonds. In addition to the risk of default, junk bonds may be more volatile,
less liquid, more difficult to value and more susceptible to adverse economic
conditions or investor perceptions than other bonds.
Derivatives: Derivatives are subject to general risks relating to heightened
sensitivity to market volatility, interest rate fluctuations, illiquidity and
creditworthiness of the counterparty to the derivatives transactions.
Hedging: Hedging is a strategy in which the Adviser uses a derivative security
in an effort to reduce certain risk characteristics of an underlying security
or portfolio of securities. While hedging strategies can be very useful and in-
expensive ways of reducing risk, they are sometimes ineffective due to unex-
pected changes in the market. Moreover, while hedging can reduce or eliminate
losses, it can also reduce or eliminate gains.
Technology companies: The industries in which technology companies may be found
can be significantly affected by short product cycles, aggressive pricing of
products and service, competition from new market entrants, worldwide scien-
tific and technological developments and changes in governmental regulation and
policies.
Emerging market: An emerging market country is one that the World Bank, the In-
ternational Finance Corporation or the United Nations or its authorities has
determined to have a low or middle income economy. Historical experience indi-
cates that the markets of emerging market countries have been more volatile
than more developed markets; however, such markets can provide higher rates of
return to investors.
Disciplined strategy: The "Dogs" of Wall Street Fund will not deviate from its
passively managed strategy, which entails buying and holding thirty stocks se-
lected through objective selection criteria (except to the extent necessary to
comply with federal tax laws applicable to the Fund). The Fund will not sell
stocks in its portfolio and buy different stocks over the course of a year,
even if there are adverse developments concerning a particular stock, company
or industry. There can be no assurance that the strategy will be successful.
Non-diversification: The "Dogs" of Wall Street Fund will hold only thirty
stocks in its portfolio. This means that its performance can be affected more
by a decline in the market price of one stock than would be the case if the
Fund had a more diversified portfolio.
25
<PAGE>
Fund Management
- --------------------------------------------------------------------------------
ADVISER. SunAmerica Asset Management Corp., which was organized in 1982 under
the laws of Delaware, selects and manages the investments, provides various ad-
ministrative services, and supervises the daily business affairs of each Fund.
In addition to managing the Funds, the Adviser serves as adviser, manager
and/or administrator for Anchor Pathway Fund, Anchor Series Trust, SunAmerica
Style Select Series, Inc. Seasons Series Trust, SunAmerica Income Funds,
SunAmerica Money Market Funds, Inc., SunAmerica Series Trust, SunAmerica Stra-
tegic Investment Series, Inc. and Brazos Mutual Funds. The Adviser managed, ad-
vised or administered assets in excess of $27 billion as of December 31, 1999.
For the fiscal year ended September 30, 1999, each Fund paid the Adviser a fee
equal to the following percentage of average daily net assets:
<TABLE>
<CAPTION>
Fund Fee
---- ---
<S> <C>
SunAmerica Blue Chip Growth 0.75%
SunAmerica Growth Opportunities 0.75%
SunAmerica New Century 0.75%
SunAmerica Growth and Income 0.75%
SunAmerica Balanced Assets 0.75%
SunAmerica "Dogs" of Wall Street 0.35%
</TABLE>
The Domestic Equity Investment Team is responsible for the portfolio management
of each of the Funds. Also, the Fixed Income Investment Team is responsible for
the portfolio management of a portion of the Balanced Assets Fund and assists
the portfolio management of each Fund. Together, the teams consist of sixteen
portfolio managers, research analysts and traders. Francis D. Gannon has super-
visory responsibility over the "Dogs" of Wall Street Fund. Mr. Gannon, a Senior
Vice President, has been with the Adviser since 1993.
The Adviser's investment discipline is based on fundamental research of earn-
ings, revenues and market opportunities. Investment decisions are based upon a
company's underlying fundamentals and strategic position, in light of industry
and market outlook. The Adviser makes buy and sell decisions consistent with
the investment goals and strategies of each fund.
DISTRIBUTOR. SunAmerica Capital Services, Inc. distributes each Fund's shares.
The Distributor, a SunAmerica company, receives the initial and deferred sales
charges, all or a portion of which may be re-allowed to other broker-dealers.
In addition, the Distributor receives fees under each Fund's 12b-1 plans.
The Distributor, at its expense, may from time to time provide additional com-
pensation to broker-dealers (including in some instances, affiliates of the
Distributor) in connection with sales of shares of a Fund. This compensation
may include (i) full re-allowance of the front-end sales charge on Class A
shares; (ii) additional compensation with respect to the sale of Class A, Class
B or Class II shares; or (iii) financial assistance to broker-dealers in con-
nection with conferences, sales or training programs for their employees, semi-
nars for the public, advertising campaigns regarding one or more of the Funds,
and/or other broker-dealer sponsored special events. In some instances, this
compensation will be made available only to certain broker-dealers whose repre-
sentatives have sold a significant number of shares of the Fund. Compensation
may also include payment for travel expenses, including lodging, incurred in
connection with trips taken by invited registered representatives for meetings
or seminars of a business nature. In addition, the following types of non-cash
compensation may be offered through sales contests: (i) travel mileage on major
air carriers; (ii) tickets for entertainment events (such as concerts or sport-
ing events); or (iii) merchandise (such as clothing, trophies, clocks, pens or
other electronic equipment). Broker-dealers may not use sales of the Fund's
shares to qualify for this compensation to the extent receipt of such compensa-
tion may be prohibited by applicable law or the rules of any self-regulatory
agency, such as the National Association of Securities Dealers. Dealers who re-
ceive bonuses or other incentives may be deemed to be underwriters under the
Securities Act of 1933.
ADMINISTRATOR. SunAmerica Fund Services, Inc. assists the Funds' transfer agent
in providing shareholder services. The Administrator, a SunAmerica company, is
paid a monthly fee by each Fund for its services at the annual rate of 0.22% of
average daily net assets. This fee represents the full cost of providing share-
holder and transfer agency services to the Trust.
The Adviser, Distributor and Administrator are all located in The SunAmerica
Center, 733 Third Avenue, New York, New York 10017.
YEAR 2000. The Fund's management has recognized the importance of the Year 2000
("Y2K") Issue and since 1998 has designated it as a top priority to which man-
agement has committed significant resources. The Fund made a successful transi-
tion into the new millennium without any Y2K related problems. The Fund's man-
agement will continue to monitor the Y2K Issue and although there can be no as-
surances that the Fund or the companies in which the Fund invests will avoid
being negatively impacted, we do not anticipate that the Fund will experience
any material negative impact as a result of the Y2K Issue.
26
<PAGE>
For More Information
- --------------------------------------------------------------------------------
The following documents contain more information about the Funds and are avail-
able free of charge upon request:
Annual and Semi-annual Reports. Contain financial statements, performance
data and information on portfolio holdings. The annual reports also contain
a written analysis of market conditions and investment strategies that sig-
nificantly affected a Fund's performance during the applicable period.
Statement of Additional Information (SAI). Contains additional information
about the Funds' policies, investment restrictions and business structure.
This prospectus incorporates the SAI by reference.
You may obtain copies of these documents or ask questions about the Funds by
contacting:
SunAmerica Fund Services, Inc.
Mutual Fund Operations
The SunAmerica Center
733 Third Avenue
New York, New York 10017-3204
1-800-858-8850, extension 5125
or
by calling your broker or financial advisor.
Information about the Funds (including the SAI) can be reviewed and copied at
the Public Reference Room of the Securities and Exchange Commission, Washing-
ton, D.C. Call (800) SEC-0330 for information on the operation of the Public
Reference Room. Information about the Funds is also available on the Securities
and Exchange Commission's web-site at http://www.sec.gov and copies may be ob-
tained upon payment of a duplicating fee by writing the Public Reference Sec-
tion of the Securities and Exchange Commission, Washington, D.C. 20549-6009.
You should rely only on the information contained in this prospectus. No one is
authorized to provide you with any different information.
[LOGO OF SUN AMERICA
MUTUAL FUNDS]
DISTRIBUTOR: SunAmerica Capital Services
INVESTMENT COMPANY ACT
File No. 811-4801
