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[LOGO] SunAmerica
The Retirement Specialist
[GRAPHIC]
E Q U I T Y F U N D S
2000 Annual Report
Balanced Assets Fund
Blue Chip Growth Fund
New Century Fund
Growth and Income Fund
"Dogs" of Wall Street Fund
[LOGO]SunAmerica
Mutual Funds
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[LOGO OF SUNAMERICA]
From the SunAmerica Domestic Equity Investment Team
Donna Calder
Brian Clifford
Jeff Easter
Francis Gannon
Nancy Kelly
Soohwan Kim
James Monaghan
Richard Murphy
Chad Palumbo
Heather Rice
Dear Shareholders:
There was significant divergence in the performance of the major
equity indices from the first half of the annual period ended September
30, 2000 to the second, and volatility dominated the equity markets
throughout. Given this environment, we are extremely pleased to report
that all five of the actively managed SunAmerica Equity Funds
outperformed both their peers and their index benchmarks.*
Market Review
Robust economic growth drove the indices to double-digit returns in
the first half of the fiscal year, while slower GDP growth, the ripple
effects of six interest rate hikes by the Federal Reserve Board, and
higher oil prices led to flat to negative index returns in the second
half. Overall, growth outperformed value for the annual period.
Cumulative Returns*
<TABLE>
<S> <C> <C> <C>
10/1/99 - 3/31/00 4/1/00 - 9/30/00 10/1/99 - 9/30/00
S&P 500 Index 17.50% -3.60% 13.28%
Russell 3000
Growth Index 34.88% -8.40% 23.87%
S&P Midcap 400
Index 32.06% 8.45% 43.21%
</TABLE>
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* Past performance is no guarantee of future results.
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The fourth calendar quarter of 1999 experienced significant strength
in the equity markets, as domestic economic growth and corporate
earnings gains remained impressive with few signs of inflation. However,
equity market strength was relatively narrow and confined primarily to
the technology and telecommunications sectors across all
capitalizations.
The year 2000 began with weakness in the broad equity markets, as
investors looked toward a number of possible Federal Reserve Board
interest rate increases. The markets experienced the worst January since
1990 and the fourth worst since 1947. This trend continued in February,
with a sell off of such "Old Economy" sectors as manufacturing and other
cyclical industries. However the "New Economy" sectors--technology,
telecommunications and biotechnology--continued to do well. Market
volatility intensified in March amid valuation concerns in the
technology and biotechnology area. Sectors such as financials, energy,
and healthcare bounced back at this time.
The sell-off that began mid-March continued during the first half of
the second calendar quarter. The divergent sentiment toward "Old
Economy" vs. "New Economy" sectors continued. In addition, the near-
certain prospect of higher interest rates and the subsequent gradual
slowdown in economic growth, combined with a modest pickup in inflation,
negatively affected the broad U.S. equity markets. The S&P 500 Index
fell almost 10% from March 24 through May 23, and the NASDAQ Composite
lost approximately 40%. The large-cap stock market finally found its
footing in June when it seemed that the Fed could be induced to delay
additional interest rate hikes based on signs of a slowing economy.
Persistent concerns about rising energy prices, an appreciating
dollar, a slowing U.S. economy and how these factors would impact
company revenues and earnings caused volatility in stocks across all
market capitalizations through the end of the third quarter of 2000. In
fact, while September is historically the toughest month for the equity
market, this September was the worst for the NASDAQ Composite in its 29-
year history and for the Dow Jones Industrial Average since 1986. For
the first time since 1991, the S&P 500 Index ended the third quarter
with a negative year-to-date return.
Market Outlook
For several reasons, our long-term outlook for the equity markets is
generally favorable.
. Ongoing Economic Expansion. While economic growth is moderating,
the U.S. is in the tenth year of economic expansion, labor
productivity is still high, and inflationary pressures remain
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low. If we are correct that a sustained economic slowdown has
begun, then the Federal Reserve Board's monetary tightening cycle
is at or near an end.
. Solid Earnings Growth. We continue to expect strong company
profits and double-digit earnings growth for the years 2000 and
2001.
. Improved Currency Picture. The U.S. dollar climbed higher against
most major currencies over the annual period, pushing the euro to
all-time lows. However, late in the period, joint central bank
intervention seems to have arrested, though not reversed, the
euro's decline.
. Declining Oil Prices. While still high, oil prices have come down
from over $35 a barrel to $30.84 on September 29th, following
President Clinton's initiative in mid-September regarding the
release of 30 million barrels of oil from the Strategic Petroleum
Reserve.
. Reduction in Treasury Supply. For the full year 2000, the U.S.
Treasury is anticipated to buy back roughly $30 billion of its own
longer-dated issues with budget surplus monies. This should help
equity market valuations.
. Strong Merger and Acquisition Activity. The cash flow into and
within corporate America through mergers and acquisitions
continues to be a strong positive for the U.S. equity markets.
At the same time, we expect volatility and heavy sector rotation to
continue. The primary risks we see ahead include:
. High Energy Prices. While oil prices have come down, high energy
prices are noticeably diminishing consumer purchasing power and
slowing demand in the economy. A prolonged spike in the cost of
oil is bound to crimp U.S. economic growth.
. Election Year Uncertainty. Historically there is often a
"honeymoon rally" in the equity markets following Presidential
elections. However, campaign rhetoric and uncertainty surrounding
any new administration regarding the future of taxes, budget
surpluses, and other issues may increase volatility before the
election and even more so after November 7th.
. European Economic Growth. In Europe, inflationary concerns center
around the weak euro. Yet pricing pressures have been remarkably
dormant, and there seems to be ample spare capacity in both the
goods and labor markets. Still, we believe more tightening is
required by the European Central Bank over the next twelve months.
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. Earnings Disappointments. Not all companies will live up to
earnings expectations. Should larger companies disappoint, the
market may again temporarily stumble.
Given this outlook, we intend to focus your Funds' investments in
quality companies that we believe present high growth opportunities.
With this backdrop, we are pleased to present you with a portfolio
review of each of the SunAmerica Equity Funds on the following pages.
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SunAmerica Balanced Assets Fund
SunAmerica Balanced Assets Fund Class A outperformed its category
average for the annual period with a cumulative return of 15.69%
for the twelve months ended September 30, 2000, as compared to
11.31% for the Lipper Balanced Category./1/ The Fund's benchmark, a
blended index (55% S&P 500 Index; 45% Lehman Intermediate
Government Bond Index), returned 10.41% for the same period. (See
chart below. Returns do not reflect the impact of sales charges.)
SunAmerica Balanced Assets Fund (10-1-99 through 9-30-00)
[GRAPH]
Blended Index
SunAmerica Lipper 55% S&P 500 Index,
Balanced Balanced 45% Lehman Brothers
Assets Fund(2) Category(1) Intermediate Gov't Bond Index(3)
15.69% 11.31% 10.41%
Average Annual Returns
Return
Since
Inception
1 yr 3 yr 5 yr (9/24/93)
A Shares
At Net Asset Value 15.69% 15.59% 16.36% 14.57%
A Shares
With Maximum
Sales Charge 9.04% 13.33% 14.99% 13.61%
(1) Past performance is no guarantee of future results.
(2) Does not include sales charge.
(3) Index performance is hypothetical and is not indicative of any mutual fund
investment.
Portfolio Review
Your Fund's strong performance was primarily attributable to a
higher exposure to equities (73.0% as of 9/30/00) than the
traditional balanced fund and to a neutral-to-the-Index duration in
its fixed income allocation. Sector selections within the Fund's
equity position were also key.
Technology. We remained overweighted in the technology sector
throughout the annual period, although we did reduce the Fund's
weighting here in the second half, taking profits in some
semiconductor, internet, personal computer, and wireless companies.
We remained focused on the fiber optics sub-sector through such
companies as Corning and Juniper Networks.
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Energy. We increased the Fund's overweighting in the energy
sector, and select drilling and oil service stocks in particular,
because as oil prices have risen, demand for drilling equipment has
increased. Such companies as Exxon Mobil, Royal Dutch Petroleum,
Chevron, Schlumberger, Halliburton, Baker Hughes, and Transocean
Sedco Forex each positively contributed to the Fund's performance.
Financial Services. Neutrally weighted, we focused on large money
center banks, such as Citigroup and Chase Manhattan, and asset
management companies, such as Morgan Stanley Dean Witter and
Merrill Lynch. The Fund also benefited during the period from the
acquisition of PaineWebber Group, Inc. by UBS. We continued to hold
such regional bank names as Summit Bancorp, FleetBoston Financial
Corp., Bank of New York, and Mellon Financial Corp.
Healthcare. We slightly increased the Fund's allocation to the
healthcare sector, moving from an underweighted to a market-
weighted position. We focused on large-cap pharmaceuticals, such as
Merck, Johnson & Johnson, Pfizer, and Schering-Plough, and on
manufacturers, such as ALZA and Teva Pharmaceuticals, which have
benefited from the growing appeal of generic drugs. We also had
positions in the strongly performing biotechnology sub-sector,
through such companies as Amgen, Biogen, and Genentech.
Fixed Income. Staying true to our conservative strategy, we
maintained a neutral duration for most of the period, as the
Federal Reserve Board remained in a tightening mode. Also, we
invested primarily in U.S. Treasuries, which outperformed most
other fixed income sectors for the twelve months. The Fund held
smaller positions in high quality corporate bonds and U.S.
government agencies.
Winners and Losers
Cisco Systems, EMC, and General Electric were additional top
performers for the Fund. On the flip side, Lucent Technologies,
AT&T, and WorldCom, which we continue to hold due to favorable
fundamentals, and Alcoa were disappointments.
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SunAmerica Blue Chip Growth Fund
SunAmerica Blue Chip Growth Fund significantly outperformed both
the S&P 500 Index and its peers for the twelve months ended
September 30, 2000. Blue Chip Growth Class A posted a cumulative
return of 34.66% compared to 13.28% for the S&P 500 Index and
30.33% for the Lipper Large-Cap Growth Category./1/ (See chart
below. Returns do not reflect the impact of sales charges.)
SunAmerica Blue Chip Growth Fund (10-1-99 through 9-30-00)
[GRAPH]
SunAmerica Lipper
Blue Chip Large Cap Growth S&P 500
Growth Fund(2) Category(1) Index(3)
34.66% 30.33% 13.28%
Average Annual Returns
Return
Since
Inception
1 yr 3 yr 5 yr (9/24/93)
A Shares
At Net Asset Value 34.66% 24.48% 23.90% 19.68%
A Shares
With Maximum
Sales Charge 26.92% 22.04% 22.44% 18.67%
(1) Past performance is no guarantee of future results.
(2) Does not exclude sales charge.
(3) Index performance is hypothetical and is not indicative of any mutual
fund investment.
Portfolio Review
Your Fund benefited primarily from effective sector allocation
and from enhanced diversification across the sector spectrum
without increasing the portfolio's total number of holdings. At
September 30, 2000, the portfolio held 73 names.
Technology. We remained overweighted in the technology sector
throughout the annual period, but did reduce the Fund's weighting
here during the second half. We focused on select software
companies, such as BEA Systems and i2 Technologies, fiber optics
companies, such as CIENA, and satellite-based telecommunications
companies, such as General Motors.
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Capital Goods. We maintained the Fund's overweighting here,
focusing on companies benefiting from technology and
telecommunications improvements. For example, SPX Corp. is a
capital goods company in the portfolio that recently spun out to
the public its fiber optic business known as INRANGE Technologies.
Retail. Given the ongoing strong economy and healthy consumer
spending, we built a strong position within the retail sector
during the first half of the year. For most of the annual period,
the Fund benefited from its positions in Home Depot, Wal-Mart, and
sunglass manufacturer Oakley, Inc.
Other. We increased the Fund's weightings in energy, healthcare,
and financial services, as these sectors began to rebound toward
the end of the first calendar quarter. We also kept between 5% and
10% of the Fund's assets in cash to capitalize on periodic market
imbalances or specific stock weaknesses.
Winners and Losers
Other top performers included Integrated Device Technology,
Juniper Networks, Nortel Networks, Sun Microsystems, Tyco, Corning,
and General Electric. We also took profits in several companies
that had big gains in 1999, such as Yahoo!, QUALCOMM, and Nokia--
each of which we sold before their stocks declined.
Lucent Technologies, Microsoft and AT&T Liberty Media
disappointed, but we continue to hold these stocks, as each
continues to be a leader in its respective industry.
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SunAmerica Growth Opportunities Fund
SunAmerica Growth Opportunities Fund significantly outperformed
both the S&P 400 MidCap Index and its peers for the twelve months
ended September 30, 2000. SunAmerica Growth Opportunities Class A
posted a cumulative return of 102.04% compared to 43.21% for the
S&P 400 MidCap Index and 53.43% for the Lipper Multi-Cap Growth
Category./1/ (See chart below. Returns do not reflect the impact of
sales charges.)
Mid-capitalization growth stocks were the best performing U.S.
equity sector for the fiscal year, outperforming both their large-
cap and small-cap brethren. Furthermore, growth stocks outperformed
value stocks, and so your Fund benefited significantly from its
strong growth bias. Still, volatility dominated the mid-cap equity
market as well as the broader equity markets, making the Fund's
performance especially notable.
SunAmerica Growth Opportunities Fund (10-1-99 through 9-30-00)
[GRAPH]
SunAmerica Lipper
Growth Multi Cap S&P 400
Opportunities Growth Mid Cap
Fund(2) Category(1) Index(3)
102.04% 53.43% 43.21%
Average Annual Returns
1 yr 3 yr 5 yr 10 yr
A Shares
At Net Asset Value 102.04% 43.42% 32.27% 25.07%
A Shares
With Maximum
Sales Charge 90.42% 40.62% 30.72% 24.33%
(1) Past performance is no guarantee of future results.
(2) Does not include sales charge.
(3) Index performance is hypothetical and is not indicative of any mutual fund
investment.
Portfolio Review
Security selection was key to the Fund's outperformance. The Fund
overweighted the leading companies in the top performing
technology, energy and healthcare sectors. We
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maintained underweightings throughout the fiscal year in the poorly
performing consumer cyclicals, basic materials and retail sectors.
Investment decisions over the annual period continued to be made on
a security-by-security basis.
Technology. The Fund's overweighting in the technology sector
during the fourth quarter of 1999 was particularly significant
because the equity markets were bolstered primarily by a technology
sector-driven rally at the end of 1999. Within this sector, we
focused on the software, semiconductor capital equipment, internet
infrastructure, storage area networking and application service
provider sub-sectors during the first half of the year and added a
focus on the fiber optics and telecommunications sub-sectors in the
second. New names added to the portfolio during the period included
Newport Corp. and Zygo Corp., both of which were winners for the
Fund.
Energy. We recognized a fundamental shift in the energy industry
early in 2000, as a sustained rally in the price of oil began and
major oil producers planned to increase capital expenditures with a
focus on the business of oil exploration. We overweighted the
Fund's position in the energy sector in oil services and offshore
drillers, including contract drillers in the Gulf of Mexico. Fund
holdings Rowan, Halliburton and Baker Hughes each performed well.
We continue to believe that earnings growth strength, increased
utilization demand and attractive valuations will likely keep these
stocks moving upward.
Healthcare. During the first half of the fiscal year, we moved
almost entirely out of the pharmaceuticals portion of the
healthcare sector and increased the Fund's allocation to
biotechnology companies. Two very important facts portend greater
and faster developments in biotechnology. First, the number of drug
approvals is increasing. Second, an increasing number of biotech
companies are profitable. As a result, the capital markets are
financing the growth and development of an increasing number of new
biotech companies, which are successfully bringing products to
market at an unprecedented rate. Holdings in industry leaders such
as IDEC Pharmaceuticals and Genentech benefited Fund performance.
Disciplined sell criteria are as important as buy criteria. To
the benefit of the Fund, we began to reduce its overweightings in
technology and biotechnology at the end of March, just before these
sectors significantly sold off amidst valuation concerns and some
of the value-oriented cyclical sectors, such as energy, came into
favor.
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The Fund's focus remained on those companies that are leaders in
emerging sectors and are exhibiting high sustainable growth.
Typically, the Fund looks to own companies that are early in their
growth trajectory and are under-analyzed and under-owned because of
their mid-cap orientation.
Winners and Losers
Other strong performers included JNI Corp., BEA Systems and
Brocade Communication Systems in the technology sector, and Curagen
in the biotechnology sector, and Global Marine and Marine Drilling
in the energy sector.
As reflected in the Fund's performance, we are pleased to report
that there were few disappointments amongst the portfolio's
holdings. Citrix Systems, a computer software company, and
Interliant, an application service provider, performed below
expectations. Portfolio holdings are continually monitored in an
effort to screen for those positions that no longer fit the Fund's
strict investment criteria.
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SunAmerica New Century Fund
(formerly SunAmerica Small Company Growth Fund)
SunAmerica New Century Fund significantly outperformed its
benchmark and its peers for the twelve months ended September 30,
2000. SunAmerica New Century Fund Class A posted a cumulative
return of 72.74% compared to 23.87% for the Russell 3000 Growth
Index and 63.89% for the Lipper Mid-Cap Growth Category./1/ (See
chart below. Returns do not reflect the impact of sales charges.)
As indicated in the Fund's semiannual report, we changed the name
of the Fund (formerly known as Small Company Growth Fund) to the
SunAmerica New Century Fund, effective April 3, 2000. We believe
that the new name more accurately reflects our emphasis on the
companies and industries driving positive change in the 21st
century. The Fund's management team remains the same as do its
principal investment practices.
SunAmerica New Century Fund (10-1-99 through 9-30-00)
[GRAPH]
SunAmerica Lipper Russell
New Century Mid Cap 3000 Growth
Fund(2) Category(1) Index(3)
72.74% 63.89% 23.87%
Average Annual Returns
1 yr 3 yr 5 yr 10 yr
A Shares
At Net Asset Value 72.74% 25.62% 23.37% 25.36%
A Shares
With Maximum
Sales Charge 62.81% 23.16% 21.91% 24.61%
(1) Past performance is no guarantee of future results.
(2) Does not include sales charge.
(3) Index performance is hypothetical and is not indicative of any mutual fund
investment.
Portfolio Review
The Fund benefited most from its growth-oriented strategy and its
effective sector allocation.
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Technology and Telecommunications. While overweight the
technology and telecommunications sectors in the first half of the
annual period, we have since reduced the Fund's allocation here. We
significantly trimmed the Fund's positions in Internet content and
software companies, including BroadVision, Vignette, Art Technology
Group, and Critical Path, and we sold computer software company
Entrust Technologies. We focused on three main trends.
. The Race for Broadband on the Internet. We believe that three
emerging technologies--optical networking, core IP routing, and
broadband wireless transmission--have the promise to boost the
Internet's capacity, speed, reliability and flexibility. The
transition from copper to these new technologies is driving
explosive growth in fiber optics systems. The primary
beneficiaries of this trend include industry leaders and Fund
holdings Juniper Networks, Redback Networks, and Avanex.
. The Need for Better Networking and Data Storage. We expect
growth in data storage and storage networking to be explosive,
as business activity continues to move online and corporations
need to move, manage, access, back up, protect and store their
data. This will be accomplished with Storage Area Networks
(SANs) as well as caching technology, the two biggest growth
markets in storage. The Fund added Brocade (network switches),
VERITAS (network management software) and BEA Systems (e-
commerce infrastructure software) to its holdings. We believe
these companies, as well as the Fund holding Network Appliance,
Inc. (SANs and caching hardware), are and should continue to be
the primary beneficiaries of this trend.
. The Approach of Personal Digital Appliances (PDAs). Advances in
wireless-access technology are also visible in the migration
from PCs to handheld devices, known as PDAs. Currently, we
believe these handheld Internet devices represent a largely
untapped market, but are poised to take off when the 3G global
wireless network standard is adopted.
Healthcare. We maintained the Fund's overweighting in
biotechnology, as an incredible amount of development is taking
place in this sub-sector, particularly in research into therapies
for cancer and inflammatory conditions. In addition, we
concentrated on genomics companies, which are enabling the
development of new therapies through the discovery, analysis and
expression of genes and proteins. We believe biotech is going to be
an exciting and profitable place to be invested over the next three
to five years. We also established a position during the period in
specialty pharmaceuticals through such companies as Biovail and
ALZA Corp. These
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specialty pharmaceuticals, which tend to have more consistent
revenues and earnings growth and more diversified product lines,
successfully served as a defensive play for the Fund in a highly
volatile market.
Energy. The oil services companies that we bought in December
1998 experienced their first turnarounds in quarterly earnings
during the first quarter of 2000 and performed well through
September 2000. The price of oil and gas rose due to growing
demand, declining inventories and low production. By the second
calendar quarter, we trimmed our oil services positions and
redeployed those assets into land drillers. We added to the Fund's
position in Nabors Industries and bought Apache and Devon Energy.
As oil prices continued to rise and drilling activity picked up,
these holdings contributed to Fund performance.
Other. In identifying industries that will drive change in the
future, we established a position in alternative power producers,
i.e. low cost producers of electric power generated from natural
gas. These companies are benefiting from an increasingly
deregulated utilities industry. We bought Calpine, Dynegy, and
Southern Energy for the Fund's portfolio.
Winners and Losers
Other winners for the Fund included CIENA, Myriad Genetics,
Network Appliance, and Talbots. There were, of course, also a few
disappointments. Biotechnology company Alkermes lagged in
performance, as did several of the satellite-based direct TV
stocks, which slowed down after huge subscriber growth earlier in
the year. These companies include Pegasus Communications and
EchoStar Communications. We continue to hold these stocks, as the
fundamentals of each continue to be strong, and we believe
subscriber growth will reaccelerate.
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SunAmerica Growth and Income Fund
SunAmerica Growth and Income Fund outperformed its category
average and its benchmark for the annual period. Growth and Income
Class A returned 27.64% on a cumulative basis compared to 13.28%
for the S&P 500 Index and 17.80% for the Lipper Large-Cap Core
Category for the twelve months ended September 30, 2000./1/ (See
chart below. Returns do not reflect the impact of sales charges.)
SunAmerica Growth and Income Fund (10-1-99 through 9-30-00)
[GRAPH]
SunAmerica Lipper
Growth and Large Cap Core S&P 500
Income Fund(2) Category(1) Index(3)
27.64% 17.80% 13.28%
Average Annual Returns
Return
Since
Inception
1 yr 3 yr 5 yr (7/1/94)
A Shares
At Net Asset Value 27.64% 20.86% 25.72% 24.04%
A Shares
With Maximum
Sales Charge 20.30% 18.50% 24.24% 22.87%
(1) Past performance is no guarantee of future results.
(2) Does not include sales charge.
(3) Index performance is hypothetical and is not indicative of any mutual fund
investment.
Portfolio Review
Your Fund benefited primarily from a strong "barbell approach" to
stock selection, which balances holdings between growth and value
sectors. It also benefited from a more highly invested and
diversified portfolio, which included a total of 87 names at the
end of the fiscal year. More specifically, the Fund was
overweighted on the growth side in the technology sector and on the
value side in the energy and utilities sectors. We also took
profits in some growth names that had performed well last year and
redeployed those assets into select names in various other value
sectors after they got hit by what we believe are temporary
setbacks in their stock prices. For example, we established
positions in Ford Motor Co. and Bristol-Myers Squibb during the
second
15
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half of the period, based on the premise that these companies may
soon rebound to their historical growth paths.
Growth Sectors. The Fund's largest weighting was in the
information technology sector. Top holdings included EMC Corp.,
Corning, Inc., Cisco Systems, Inc, Juniper Networks, Inc. and IBM
Corp. Fund performance continued to benefit from holdings in the
media and broadcasting industry, which did well with advertising
revenue from the Presidential election and the Olympics. We trimmed
the Fund's position in this sector however, selling CBS and Viacom
after their merger. We continued to hold such companies as Comcast
and Liberty Media.
Value Sectors. Within the overweighted energy sector, major oil
company Exxon Mobil was the Fund's largest holding and one of its
top performers. Natural gas companies also did well, including
Coastal Corp., which was acquired by El Paso Energy Corp., during
the period. In the utilities sector, Enron was one of the Fund's
top ten holdings and a top performer as well. Duke Energy, an
integrated energy company delivering both electricity and natural
gas to customers through the U.S. and abroad, also added yield to
the Fund's returns.
As was the case for all of SunAmerica's actively-managed large-
cap equity funds, the Growth and Income Fund benefited from
underweighted positions in the poorly performing basic materials
sector, including paper, chemicals and aluminum, and the consumer
durables sector.
Winners and Losers
Other winners for the Fund included General Electric and Tyco
International Ltd. The Fund's disappointments included Alcoa,
DuPont, Microsoft and Lucent Technologies.
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SunAmerica "Dogs" of Wall Street Fund
Value investing remained out of favor for the annual period
overall, with investors still favoring growth-oriented stocks. It
is important to note that this Fund is a passively managed,
quantitative "black box" model. Thus, analyzing the underlying
fundamentals of the stock market or individual stocks is not
considered a primary concern in the management of this Fund.
SunAmerica "Dogs" of Wall Street Fund Class A returned -14.09% on
a cumulative basis for the twelve months ended September 30, 2000.*
(Return does not reflect the impact of sales charges.) Many of the
"Dogs" continue to sell at attractively low price/earnings
multiples.
Portfolio Review
The Fund was impacted by the "Old Economy," economically-
sensitive stocks that it holds, such as Philip Morris, Sherwin-
Williams, and Hershey Foods. In addition to these three, the
largest holdings of the 30 stocks held in the portfolio as of
September 30, 2000 were American Home Products, J.P. Morgan & Co.,
Air Products & Chemicals, Emerson Electric, Raytheon Co., Exxon
Mobil, and SBC Communications. We continue to believe that these
solid companies stand to profit from continued sector rotation.
The periods of value outperformance during the fiscal year
reaffirm our belief that the Fund is an integral component of a
well-diversified portfolio. For example, when value investing was
in favor, such as during the third calendar quarter of 2000, and
the market broadened somewhat, the Fund did comparatively well,
producing a quarterly return on Class A shares of 3.09%, as
compared to -0.97% for the S&P 500 Index for the same quarter.
However, this was not enough to offset the dominating growth bias
of the fiscal year overall. At the end of 2000, the Fund will be
rebalanced to reflect our "Dogs" for the year 2001.
We believe our "Dogs" of Wall Street strategy offers greater
diversification than the traditional Dow 10 strategy as an
important risk-management tool and the potential for strong total
return through a combination of capital appreciation and dividend
income.
------
* Past performance is no guarantee of future results.
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SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2000
<TABLE>
<CAPTION>
Balanced Blue Chip Growth New Growth and "Dogs" of
Assets Growth Opportunities Century Income Wall Street
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------
ASSETS:
Investments securities,
at value*.............. $519,355,146 $207,580,661 $298,877,811 $367,317,786 $333,848,865 $ 52,755,736
Short-term securities*.. 19,933,911 -- -- -- -- --
Repurchase agreements
(cost equals market)... 4,227,000 31,983,000 105,277,000 23,957,000 14,282,000 1,528,000
Cash.................... 10,367 894 740 872 911 3,903
Receivable for
investments sold....... 14,265,557 937,553 6,682,717 18,657,097 1,749,475 --
Interest and dividends
receivable............. 2,060,247 92,092 57,864 33,987 157,275 133,623
Receivable for shares of
beneficial interest
sold................... 1,140,586 389,889 9,150,840 550,281 1,621,957 34,909
Prepaid expenses........ 6,989 2,129 2,126 3,438 3,858 17,990
Receivable from
investment adviser..... 2,128 343 -- -- 1,598 30,537
------------ ------------ ------------ ------------ ------------ ------------
Total assets........... 561,001,931 240,986,561 420,049,098 410,520,461 351,665,939 54,504,698
------------ ------------ ------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments
purchased.............. 35,555,117 11,028,561 35,238,002 15,475,506 6,444,431 --
Payable for shares of
beneficial interest
redeemed............... 480,863 220,025 4,310,876 4,798,339 443,128 254,164
Accrued expenses........ 331,937 172,158 158,751 251,144 189,962 129,667
Investment advisory and
management fees
payable................ 323,279 143,520 217,500 240,350 214,831 16,145
Distribution and service
maintenance fees
payable................ 268,394 108,803 187,046 183,912 217,013 41,221
Dividends payable....... 2,769 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities...... 36,962,359 11,673,067 40,112,175 20,949,251 7,509,365 441,197
------------ ------------ ------------ ------------ ------------ ------------
Net assets........... $524,039,572 $229,313,494 $379,936,923 $389,571,210 $344,156,574 $ 54,063,501
============ ============ ============ ============ ============ ============
NET ASSETS WERE COMPOSED
OF:
Shares of beneficial
interest, $.01 par
value.................. $ 250,230 $ 80,739 $ 96,271 $ 96,797 $ 175,199 $ 56,171
Paid-in capital......... 386,311,138 143,531,324 270,541,370 236,860,093 238,123,649 85,522,151
------------ ------------ ------------ ------------ ------------ ------------
386,561,368 143,612,063 270,637,641 236,956,890 238,298,848 85,578,322
Accumulated
undistributed net
investment income
(loss)................. (65,576) (19,678) (10,578) (41,065) (15,474) 484,913
Accumulated
undistributed net
realized gain (loss) on
investments, foreign
currency and other
assets and liabilities. 43,820,443 27,700,206 28,323,818 77,741,579 25,876,937 (19,560,072)
Net unrealized
appreciation
(depreciation) of
investments............ 93,723,337 58,020,903 80,986,042 74,913,806 79,996,263 (12,439,662)
------------ ------------ ------------ ------------ ------------ ------------
Net assets........... $524,039,572 $229,313,494 $379,936,923 $389,571,210 $344,156,574 $ 54,063,501
============ ============ ============ ============ ============ ============
*Identified cost
Investment securities... $425,631,809 $149,559,758 $217,891,769 $292,403,980 $253,852,602 $ 65,195,398
============ ============ ============ ============ ============ ============
Short-term securities... $ 19,933,911 -- -- -- -- --
============ ============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
18
<PAGE>
SunAmerica Equity Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
Balanced Blue Chip Growth New Growth and "Dogs" of
Assets Growth Opportunities Century Income Wall Street
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------
Class A (unlimited
shares authorized):
Net assets.............. $319,598,273 $152,788,583 $206,531,486 $253,359,285 $127,168,433 $ 8,731,858
Shares of beneficial
interest issued and
outstanding............ 15,249,939 5,264,369 5,062,754 6,159,207 6,358,281 902,973
Net asset value and
redemption price per
share.................. $ 20.96 $ 29.02 $ 40.79 $ 41.14 $ 20.00 $ 9.67
Maximum sales charge
(5.75% of offering
price)................. 1.28 1.77 2.49 2.51 1.22 0.59
------------ ------------ ------------ ------------ ------------ -----------
Maximum offering price
to public.............. $ 22.24 $ 30.79 $ 43.28 $ 43.65 $ 21.22 $ 10.26
============ ============ ============ ============ ============ ===========
Class B (unlimited
shares authorized):
Net assets.............. $174,935,612 $ 67,586,012 $108,083,387 $122,004,422 $176,395,005 $21,221,164
Shares of beneficial
interest issued and
outstanding............ 8,363,796 2,480,812 2,844,090 3,159,564 9,072,349 2,206,750
Net asset value,
offering and redemption
price per share
(excluding any
applicable contingent
deferred sales charge). $ 20.92 $ 27.24 $ 38.00 $ 38.61 $ 19.44 $ 9.62
============ ============ ============ ============ ============ ===========
Class II (unlimited
shares authorized):
Net assets.............. $ 29,505,687 $ 8,938,899 $ 65,322,050 $ 10,847,570 $ 39,986,124 $24,110,479
Shares of beneficial
interest issued and
outstanding............ 1,409,271 328,726 1,720,275 281,372 2,059,320 2,507,422
Net asset value and
redemption price per
share (excluding any
applicable contingent
deferred sales charge). $ 20.94 $ 27.19 $ 37.97 $ 38.55 $ 19.42 $ 9.62
Maximum sales charge
(1.00% of offering
price)................. 0.21 0.27 0.38 0.39 0.20 0.10
------------ ------------ ------------ ------------ ------------ -----------
Maximum offering price
to public.............. $ 21.15 $ 27.46 $ 38.35 $ 38.94 $ 19.62 $ 9.72
============ ============ ============ ============ ============ ===========
Class Z (unlimited
shares authorized):
Net assets.............. -- -- -- $ 3,359,933 $ 607,012 --
Shares of beneficial
interest issued and
outstanding............ -- -- -- 79,512 29,942 --
Net asset value,
offering and redemption
price per share........ -- -- -- $ 42.26 $ 20.27 --
============ ============ ============ ============ ============ ===========
</TABLE>
See Notes to Financial Statements
19
<PAGE>
SunAmerica Equity Funds
STATEMENT OF OPERATIONS -- For the year ended September 30, 2000
<TABLE>
<CAPTION>
Balanced Growth New "Dogs" of
Assets Blue Chip Opportunities Century Growth and Wall Street
Fund Growth Fund Fund Fund Income Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest................. $10,172,472 $ 901,896 $ 1,693,722 $ 2,037,169 $ 1,171,888 $ 26,327
Dividends*............... 2,265,831 1,005,037 261,011 181,823 1,805,566 3,095,268
----------- ----------- ----------- ------------ ----------- ------------
Total investment income.. 12,438,303 1,906,933 1,954,733 2,218,992 2,977,454 3,121,595
----------- ----------- ----------- ------------ ----------- ------------
Expenses:
Investment advisory and
management fees......... 3,730,199 1,525,968 1,512,865 2,670,121 2,217,243 349,698
Distribution and service
maintenance fees--Class
A....................... 1,040,454 474,450 436,037 801,745 389,836 53,469
Distribution and service
maintenance fees--Class
B....................... 1,913,526 632,467 545,668 1,187,778 1,582,043 344,479
Distribution and service
maintenance fees--Class
II...................... 192,600 46,588 226,033 75,980 257,171 501,127
Transfer agent fees and
expenses--Class A....... 816,002 338,803 302,651 585,445 289,152 43,956
Transfer agent fees and
expenses--Class B....... 480,795 164,441 136,384 300,419 389,780 92,217
Transfer agent fees and
expenses--Class II...... 43,742 10,998 53,397 17,762 65,479 129,102
Transfer agent fees and
expenses--Class Z....... -- -- -- 14,490 22,945 --
Custodian fees and
expenses................ 199,968 90,852 82,802 138,524 116,880 64,812
Registration fees--Class
A....................... 34,125 7,953 21,991 22,907 12,201 12,242
Registration fees--Class
B....................... 10,599 7,303 17,751 11,878 20,983 17,773
Registration fees--Class
II...................... 17,365 12,810 11,800 11,175 10,855 22,040
Registration fees--Class
Z....................... -- -- -- 9,540 9,440 --
Printing expense......... 65,950 23,170 26,955 45,280 30,130 60,890
Trustees' fees and
expenses................ 29,296 10,462 6,265 15,427 14,719 9,487
Audit and tax consulting
fees.................... 23,575 23,180 23,725 24,665 23,180 23,180
Legal fees and expenses.. 12,765 5,030 3,745 8,665 8,665 6,670
Insurance expense........ 445 213 202 170 300 122
Interest expense......... 300 118 138 1,732 178 49,399
Amortization of
organizational expenses. -- -- -- -- 71 7,704
Miscellaneous expenses... 2,858 2,408 1,907 2,893 2,110 2,905
----------- ----------- ----------- ------------ ----------- ------------
Total expenses........... 8,614,564 3,377,214 3,410,316 5,946,596 5,463,361 1,791,272
Less: expenses
reimbursed by
investment adviser...... (13,300) (7,812) (1,810) (25,076) (34,930) (289,004)
Less: custody credits
earned on cash
balances................ (2,093) (1,882) (7,477) (11,419) (4,095) (1,847)
Net expenses............. 8,599,171 3,367,520 3,401,029 5,910,101 5,424,336 1,500,421
----------- ----------- ----------- ------------ ----------- ------------
Net investment income
(loss)................... 3,839,132 (1,460,587) (1,446,296) (3,691,109) (2,446,882) 1,621,174
----------- ----------- ----------- ------------ ----------- ------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss)
on investments........... 47,996,208 36,261,830 31,403,585 135,794,617 29,269,333 (19,097,496)
Net realized gain on
written option contracts. -- -- -- 3,321,424 -- --
Net change in unrealized
appreciation/depreciation
on investments........... 16,444,532 18,688,966 63,937,296 31,776,411 36,137,773 (2,398,442)
Net change in unrealized
appreciation/depreciation
on written options
contracts................ -- -- -- (51,584) -- --
----------- ----------- ----------- ------------ ----------- ------------
Net realized and
unrealized gain (loss) on
investments, foreign
currency and other assets
and liabilities.......... 64,440,740 54,950,796 95,340,881 170,840,868 65,407,106 (21,495,938)
----------- ----------- ----------- ------------ ----------- ------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS............... $68,279,872 $53,490,209 $93,894,585 $167,149,759 $62,960,224 $(19,874,764)
=========== =========== =========== ============ =========== ============
*Net of foreign
withholding taxes on
dividends of............. $ 21,063 $ 12,433 $ -- $ -- $ 16,005 $ --
=========== =========== =========== ============ =========== ============
</TABLE>
See Notes to Financial Statements
20
<PAGE>
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Balanced Assets Fund Blue Chip Growth Fund Growth Opportunities Fund
---------------------------- ---------------------------- ----------------------------
For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended
September 30, September 30, September 30, September 30, September 30, September 30,
2000 1999 2000 1999 2000 1999
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income
(loss)................ $ 3,839,132 $ 4,137,921 $ (1,460,587) $ (616,539) $ (1,446,296) $ (690,342)
Net realized gain on
investments........... 47,996,208 45,107,763 36,261,830 16,716,125 31,403,585 13,791,846
Net realized loss on
written option
contracts............. -- -- -- -- -- (692,815)
Net change in
unrealized
appreciation/
depreciation on
investments........... 16,444,532 27,531,641 18,688,966 22,682,813 63,937,296 12,325,535
------------ ------------ ------------ ------------ ------------ -----------
Net increase in net
assets resulting from
operations............. 68,279,872 76,777,325 53,490,209 38,782,399 93,894,585 24,734,224
------------ ------------ ------------ ------------ ------------ -----------
Dividends and
distributions to
shareholders:
From net investment
income (Class A)...... (3,099,090) (3,094,302) -- -- -- --
From net investment
income (Class B)...... (812,093) (1,303,913) -- -- -- --
From net investment
income (Class II)..... (81,813) (22,613) -- -- -- --
From net realized gains
on investments (Class
A).................... (25,396,548) (15,505,431) (10,768,236) (5,748,308) (9,933,424) (2,767,478)
From net realized gains
on investments (Class
B).................... (17,220,916) (13,019,564) (5,467,719) (2,916,696) (3,520,332) (857,514)
From net realized gains
on investments (Class
II)................... (1,072,439) -- (139,008) -- (386,219) --
------------ ------------ ------------ ------------ ------------ -----------
Total dividends and
distributions to
shareholders........... (47,682,899) (32,945,823) (16,374,963) (8,665,004) (13,839,975) (3,624,992)
------------ ------------ ------------ ------------ ------------ -----------
Net increase in net
assets resulting from
capital share
transactions (Note 6).. 60,547,096 43,469,835 38,557,485 14,881,653 224,384,618 5,924,536
------------ ------------ ------------ ------------ ------------ -----------
Total increase in net
assets................. 81,144,069 87,301,337 75,672,731 44,999,048 304,439,228 27,033,768
NET ASSETS:
Beginning of period..... 442,895,503 355,594,166 153,640,763 108,641,715 75,497,695 48,463,927
------------ ------------ ------------ ------------ ------------ -----------
End of period .......... $524,039,572 $442,895,503 $229,313,494 $153,640,763 $379,936,923 $75,497,695
============ ============ ============ ============ ============ ===========
Accumulated
undistributed net
investment
income (loss) ......... $ (65,576) $ (54,391) $ (19,678) $ (16,236) $ (10,578) $ 3,237
============ ============ ============ ============ ============ ===========
</TABLE>
See Notes to Financial Statements
21
<PAGE>
SunAmerica Equity Funds
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
<TABLE>
<CAPTION>
New Century Fund Growth and Income Fund "Dogs" of Wall Street Fund
---------------------------- ---------------------------- ----------------------------
For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended
September 30, September 30, September 30, September 30, September 30, September 30,
2000 1999 2000 1999 2000 1999
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
Operations:
Net investment income
(loss)................ $ (3,691,109) $ (2,311,148) $ (2,446,882) $ (956,530) $ 1,621,174 $ 1,721,754
Net realized gain
(loss) on investments. 135,794,617 43,250,459 29,269,333 10,029,304 (19,097,496) 4,032,567
Net realized gain on
written option
contracts............. 3,321,424 1,514,794 -- -- -- --
Net change in
unrealized
appreciation/
depreciation on
investments........... 31,776,411 44,659,776 36,137,773 33,321,477 (2,398,442) (5,519,192)
Net change in
unrealized
appreciation/
depreciation on
written option
contracts............. (51,584) 131,386 -- -- -- --
------------ ------------ ------------ ------------ ------------- ------------
Net increase (decrease)
in net assets resulting
from operations........ 167,149,759 87,245,267 62,960,224 42,394,251 (19,874,764) 235,129
------------ ------------ ------------ ------------ ------------- ------------
Dividends and
distributions to
shareholders:
From net investment
income (Class A)...... -- -- -- -- (433,645) (259,531)
From net investment
income (Class B)...... -- -- -- -- (693,083) (251,352)
From net investment
income (Class II)..... -- -- -- -- (1,123,302) (297,568)
From net realized gains
on investments (Class
A).................... (26,763,114) (7,652,402) (3,548,084) (2,113,009) (653,924) --
From net realized gains
on investments (Class
B).................... (15,625,190) (4,840,235) (5,231,237) (3,016,901) (1,482,830) --
From net realized gains
on investments (Class
II)................... (609,709) (14,143) (601,963) (66,215) (2,403,270) --
From net realized gains
on investments (Class
Z).................... (201,974) (43,230) (8,634) (3,872) -- --
------------ ------------ ------------ ------------ ------------- ------------
Total dividends and
distributions to
shareholders.......... (43,199,987) (12,550,010) (9,389,918) (5,199,997) (6,790,054) (808,451)
------------ ------------ ------------ ------------ ------------- ------------
Net increase (decrease)
in net assets resulting
from capital share
transactions (Note 6).. 36,265,644 (12,713,990) 71,000,004 45,202,023 (95,266,057) 120,053,637
------------ ------------ ------------ ------------ ------------- ------------
Total increase
(decrease) in net
assets................. 160,215,416 61,981,267 124,570,310 82,396,277 (121,930,875) 119,480,315
NET ASSETS:
Beginning of period.... 229,355,794 167,374,527 219,586,264 137,189,987 175,994,376 56,514,061
------------ ------------ ------------ ------------ ------------- ------------
End of period ......... $389,571,210 $229,355,794 $344,156,574 $219,586,264 $ 54,063,501 $175,994,376
============ ============ ============ ============ ============= ============
Accumulated
undistributed net
investment
income (loss) ........ $ (41,065) $ (35,403) $ (15,474) $ (10,695) $ 484,913 $ 1,158,650
============ ============ ============ ============ ============= ============
</TABLE>
See Notes to Financial Statements
22
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
--------------------
Net
gain
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
9/30/96......... $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
9/30/00......... 20.12 0.21 2.83 3.04 (0.22) (1.98) (2.20) 20.96 15.69 319,598
Class B
-------
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
9/30/00......... 20.09 0.08 2.82 2.90 (0.09) (1.98) (2.07) 20.92 14.98 174,936
Class II
--------
2/02/99-
9/30/99(3)...... $20.00 $0.08 $0.11 $0.19 $(0.08) $ -- $(0.08) $20.11 0.95% $ 8,851
9/30/00......... 20.11 0.08 2.82 2.90 (0.09) (1.98) (2.07) 20.94 14.95 29,506
<CAPTION>
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
---------------- -------------- --------------- ---------
<S> <C> <C> <C>
Class A
-------
9/30/96......... 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
9/30/00......... 1.44 1.01 259
Class B
-------
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
9/30/00......... 2.06 0.40 259
Class II
--------
2/02/99-
9/30/99(3)...... 2.05%(4)(5) 0.71%(4)(5) 123%
9/30/00......... 2.05(5) 0.38(5) 259
</TABLE>
----------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
9/30/99 9/30/00
------- -------
<S> <C> <C>
Balanced Assets Class II........... 1.41% 0.07%
</TABLE>
See Notes to Financial Statements
23
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
<TABLE>
<CAPTION>
BLUE CHIP GROWTH FUND
---------------------
Net gain
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period loss(1) unrealized) operations income gains butions period Return(2) (000's)
---------------- --------- ------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
9/30/96......... $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
9/30/00......... 23.62 (0.14) 8.00 7.86 -- (2.46) (2.46) 29.02 34.66 152,788
Class B
-------
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
9/30/00......... 22.43 (0.31) 7.58 7.27 -- (2.46) (2.46) 27.24 33.80 67,586
Class II
--------
2/02/99-
9/30/99(3)...... $21.79 $(0.13) $0.77 $0.64 $ -- $ -- $ -- $22.43 2.94% $ 785
9/30/00......... 22.43 (0.31) 7.53 7.22 -- (2.46) (2.46) 27.19 33.57 8,939
<CAPTION>
BLUE CHIP GROWTH FUND
---------------------
Ratio of net
Ratio of investment
expenses loss
Period to average to average Portfolio
Ended net assets net assets turnover
---------------- -------------- ---------------- ---------
<S> <C> <C> <C>
Class A
-------
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
9/30/00......... 1.43 (0.49) 75
Class B
-------
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
9/30/00......... 2.09 (1.16) 75
Class II
--------
2/02/99-
9/30/99(3)...... 2.17%(4)(5) (0.95)%(4)(5) 71%
9/30/00......... 2.17 (5) (1.17) (5) 75
</TABLE>
----------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
9/30/99 9/30/00
------- -------
<S> <C> <C>
Blue Chip Growth Class II.......... 8.74% 0.17%
</TABLE>
See Notes to Financial Statements
24
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND
-------------------------
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period loss(1) unrealized) operations income gains butions period Return(2) (000's)
---------------- --------- ------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
9/30/96......... $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
9/30/00......... 23.12 (0.17) 21.77 21.60 -- (3.93) (3.93) 40.79 102.04 206,531
Class B
-------
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
9/30/00......... 21.88 (0.37) 20.42 20.05 -- (3.93) (3.93) 38.00 100.58 108,083
Class II
--------
2/02/99-
9/30/99(3)..... $19.86 $(0.21) $ 2.23 $ 2.02 $-- $ -- $ -- $21.88 10.17% $ 1,089
9/30/00......... 21.88 (0.33) 20.35 20.02 -- (3.93) (3.93) 37.97 100.44 65,322
<CAPTION>
GROWTH OPPORTUNITIES FUND
-------------------------
Ratio of net
Ratio of investment
expenses loss
Period to average to average Portfolio
Ended net assets net assets turnover
---------------- -------------- ---------------- ---------
<S> <C> <C> <C>
Class A
-------
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
9/30/00......... 1.43 (0.49) 139
Class B
-------
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
9/30/00......... 2.10 (1.11) 139
Class II
--------
2/02/99-
9/30/99(3)..... 2.35%(4)(5) (1.74)%(4)(5) 220%
9/30/00......... 2.09 (5) (0.99) (5) 139
</TABLE>
----------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
9/30/99 9/30/00
------- -------
<S> <C> <C>
Growth Opportunities Class II.... 9.94% 0.01%
</TABLE>
See Notes to Financial Statements
25
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
<TABLE>
<CAPTION>
NEW CENTURY FUND
----------------
Net
gain (loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period loss(1) unrealized) operations income gains butions period Return(2) (000's)
---------------- --------- ------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
9/30/96......... $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
9/30/00......... 27.38 (0.31) 19.04 18.73 -- (4.97) (4.97) 41.14 72.74 253,359
Class B
-------
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
9/30/00......... 26.07 (0.53) 18.04 17.51 -- (4.97) (4.97) 38.61 71.59 122,004
Class II
--------
2/02/98-
9/30/98(3)...... $21.11 $(0.19) $(2.58) $(2.77) $-- $ -- $ -- $18.34 (13.12)% $ 168
9/30/99......... 18.34 (0.40) 9.51 9.11 -- (1.40) (1.40) 26.05 52.04 2,599
9/30/00......... 26.05 (0.54) 18.01 17.47 -- (4.97) (4.97) 38.55 71.48 10,848
Class Z
-------
10/07/96-
9/30/97(3)...... $24.61 $(0.15) $ 4.85 $ 4.70 $-- $(0.86) $(0.86) $28.45 19.78 % $ 948
9/30/98......... 28.45 (0.07) (6.65) (6.72) -- (2.40) (2.40) 19.33 (24.64) 565
9/30/99......... 19.33 (0.07) 10.04 9.97 -- (1.40) (1.40) 27.90 53.91 1,050
9/30/00......... 27.90 (0.09) 19.42 19.33 -- (4.97) (4.97) 42.26 73.63 3,360
<CAPTION>
NEW CENTURY FUND
----------------
Ratio of net
Ratio of investment
expenses loss
Period to average to average Portfolio
Ended net assets net assets turnover
---------------- ------------ -------------- ---------
<S> <C> <C> <C>
Class A
-------
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
9/30/00......... 1.42 (0.80) 227
Class B
-------
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
9/30/00......... 2.07 (1.46) 227
Class II
--------
2/02/98-
9/30/98(3)...... 2.15%(4)(5) (1.35)%(4)(5) 292%
9/30/99......... 2.15 (5) (1.60) (5) 177
9/30/00......... 2.14 (5) (1.47) (5) 227
Class Z
-------
10/07/96-
9/30/97(3)...... 1.07%(4)(5) (0.67)%(4)(5) 343%
9/30/98......... 1.01 (5) (0.30) (5) 292
9/30/99......... 0.93 (5) (0.28) (5) 177
9/30/00......... 0.91 (5) (0.24) (5) 227
</TABLE>
----------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
9/30/97 9/30/98 9/30/99 9/30/00
------- ------- ------- -------
<S> <C> <C> <C> <C>
New Century Class
II................. -- 13.58% 2.48% 0.05%
New Century Class Z. 2.19% 1.85 4.95 0.87
</TABLE>
See Notes to Financial Statements
26
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
----------------------
Net
gain(loss)
Net on invest- Total Dividends Distri-
Net Asset invest- ments (both from from net butions Net Asset Net Assets
Value, ment realized invest- invest- from Total Value, end of
Period beginning income and ment ment capital distri- end of Total period
Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
9/30/96......... $ 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
9/30/00......... 16.23 (0.08) 4.51 4.43 -- (0.66) (0.66) 20.00 27.64 127,168
Class B
-------
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
9/30/00......... 15.90 (0.20) 4.40 4.20 -- (0.66) (0.66) 19.44 26.74 176,395
Class II
--------
2/02/98-
9/30/98(3)...... $12.78 $(0.04) $(0.13) $(0.17) $ -- $ -- $ -- $12.61 (1.33)% $ 963
9/30/99......... 12.61 (0.12) 3.87 3.75 -- (0.47) (0.47) 15.89 30.25 11,135
9/30/00......... 15.89 (0.20) 4.39 4.19 -- (0.66) (0.66) 19.42 26.78 39,986
Class Z
-------
4/15/98-
9/30/98(3)...... $14.35 $ 0.04 $(1.55) $(1.51) $ -- $ -- $ -- $12.84 (10.52)% $ 93
9/30/99......... 12.84 0.07 3.93 4.00 -- (0.47) (0.47) 16.37 31.69 218
9/30/00......... 16.37 0.01 4.55 4.56 -- (0.66) (0.66) 20.27 28.29 607
<CAPTION>
GROWTH AND INCOME FUND
----------------------
Ratio of net
investment
Ratio of income
expenses (loss)
Period to average to average Portfolio
Ended net assets net assets turnover
---------------- ----------- ------------- ---------
<S> <C> <C> <C>
Class A
-------
9/30/96......... 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
9/30/00......... 1.44 (0.43) 61
Class B
-------
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
9/30/00......... 2.07 (1.07) 61
Class II
--------
2/02/98-
9/30/98(3)...... 2.15%(4)(5) (0.57)%(4)(5) 150%
9/30/99......... 2.15(5) (0.80)(5) 63
9/30/00......... 2.10(5) (1.10)(5) 61
Class Z
-------
4/15/98-
9/30/98(3)...... 0.93%(4)(5) 0.57%(4)(5) 150%
9/30/99......... 0.93(5) 0.43(5) 63
9/30/00......... 0.93(5) 0.07(5) 61
</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>
9/30/96 9/30/97 9/30/98 9/30/99 9/30/00
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Growth and Income Class
A...................... 1.01% 0.22% -- -- --
Growth and Income Class
B...................... 1.14 0.21 -- -- --
Growth and Income Class
II..................... -- -- 6.99% 0.44% 0.01%
Growth and Income Class
Z...................... -- -- 28.17 21.57 9.23
</TABLE>
See Notes to Financial Statements
27
<PAGE>
SunAmerica Equity Funds
FINANCIAL HIGHLIGHTS -- (continued)
<TABLE>
<CAPTION>
"DOGS" OF WALL STREET FUND
--------------------------
Net
gain(loss)
on invest- Total Dividends Distri-
Net Asset Net ments (both from from net butions Net Asset Net Assets
Value, invest- realized invest- invest- from Total Value, end of
Period beginning ment and ment ment capital distri- end of Total period
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
---------------- --------- --------- ----------- ---------- --------- ------- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
-------
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
9/30/00......... 11.87 0.23 (1.85) (1.62) (0.23) (0.35) (0.58) 9.67 (14.09) 8,732
Class B
-------
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
9/30/00......... 11.81 0.16 (1.84) (1.68) (0.16) (0.35) (0.51) 9.62 (14.62) 21,221
Class II
--------
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
9/30/00......... 11.81 0.16 (1.84) (1.68) (0.16) (0.35) (0.51) 9.62 (14.62) 24,110
<CAPTION>
"DOGS" OF WALL STREET FUND
--------------------------
Ratio of net
Ratio of investment
expenses income
Period to average to average Portfolio
Ended net assets net assets turnover
---------------- ----------- ------------ ---------
<S> <C> <C> <C>
Class A
-------
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
9/30/00......... 0.95(5) 2.20(5) 57
Class B
-------
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
9/30/00......... 1.60(5) 1.56(5) 57
Class II
--------
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
9/30/00......... 1.60(5) 1.50(5) 57
</TABLE>
----------
(1) Calculated based upon average shares outstanding
(2) Total return is not annualized and does not reflect sales load
(3) Commencement of sale of respective class of shares
(4) Annualized
(5) Net of the following expense reimbursements (based on average net assets):
<TABLE>
<CAPTION>
9/30/98 9/30/99 9/30/00
------- ------- -------
<S> <C> <C> <C>
"Dogs" of Wall Street
Class A............. 0.43% 0.23% 0.34%
"Dogs" of Wall Street
Class B............. 0.58 0.22 0.30
"Dogs" of Wall Street
Class II............ 0.50 0.19 0.27
</TABLE>
See Notes to Financial Statements
28
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
-------------------------------------------------------------------------------
COMMON STOCK--73.0%
Apparel & Textiles--0.2%
Oakley, Inc.+............................................ 70,000 $ 1,229,375
------------
Banks--2.9%
Bank of New York Co., Inc. .............................. 30,000 1,681,875
Chase Manhattan Corp. ................................... 127,500 5,888,906
FleetBoston Financial Corp. ............................. 90,000 3,510,000
Mellon Financial Corp. .................................. 45,000 2,086,875
Summit Bancorp. ......................................... 55,000 1,897,500
------------
15,065,156
------------
Broadcasting & Media--2.9%
AT&T Corp.-Liberty Media Corp., Class A+................. 200,000 3,600,000
Comcast Corp., Class A+.................................. 90,000 3,684,375
Pegasus Communications Corp.+............................ 50,800 2,454,275
Time Warner, Inc. ....................................... 67,400 5,274,050
------------
15,012,700
------------
Communication Equipment--6.3%
Cisco Systems, Inc.+..................................... 285,000 15,746,250
Juniper Networks, Inc.+.................................. 30,000 6,568,125
Lucent Technologies, Inc. ............................... 75,000 2,292,188
Nortel Networks Corp. ................................... 80,000 4,765,000
Palm, Inc.+.............................................. 70,000 3,705,625
------------
33,077,188
------------
Computers & Business Equipment--7.2%
Dell Computer Corp.+..................................... 60,000 1,848,750
EMC Corp.+............................................... 230,000 22,798,750
International Business Machines Corp. ................... 80,000 9,000,000
Sun Microsystems, Inc.+.................................. 35,000 4,086,250
------------
37,733,750
------------
Conglomerate--7.0%
General Electric Co. .................................... 410,000 23,651,875
Schlumberger Ltd. ....................................... 50,000 4,115,625
Tyco International Ltd. ................................. 170,500 8,844,687
------------
36,612,187
------------
Computer Software--1.5%
Microsoft Corp.+......................................... 130,000 7,840,625
------------
Electronics--3.7%
Emerson Electric Co. .................................... 65,000 4,355,000
Intel Corp. ............................................. 260,000 10,806,250
Texas Instruments, Inc. ................................. 90,000 4,246,875
------------
19,408,125
------------
Energy Services--2.1%
Baker Hughes, Inc. ...................................... 100,000 3,712,500
Halliburton Co. ......................................... 41,000 2,006,438
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Energy Services (continued)
Nabors Industries, Inc.+................................. 42,500 $ 2,227,000
Transocean Sedco Forex, Inc. ............................ 55,000 3,224,375
------------
11,170,313
------------
Energy Sources--6.2%
Apache Corp. ............................................ 100,000 5,912,500
Burlington Resources, Inc. .............................. 30,000 1,104,375
Chevron Corp. ........................................... 30,000 2,557,500
Devon Energy Corp. ...................................... 60,000 3,609,000
Exxon Mobil Corp. ....................................... 120,906 10,775,747
Kerr-Mcgee Corp. ........................................ 80,000 5,300,000
Royal Dutch Petroleum Co. GDR............................ 58,000 3,476,375
------------
32,735,497
------------
Financial Services--7.3%
American Express Co. .................................... 150,000 9,112,500
Capital One Financial Corp. ............................. 50,000 3,503,125
Citigroup, Inc. ......................................... 230,000 12,434,375
J.P Morgan & Co., Inc. .................................. 15,000 2,450,625
Merrill Lynch & Co., Inc. ............................... 50,000 3,300,000
Morgan Stanley Dean Witter & Co. ........................ 80,000 7,315,000
------------
38,115,625
------------
Insurance--0.6%
Chubb Corp. ............................................. 40,000 3,165,000
------------
Internet Software--3.1%
America Online, Inc.+.................................... 45,000 2,418,750
BEA Systems, Inc.+....................................... 80,000 6,230,000
i2 Technologies, Inc.+................................... 20,000 3,741,250
Oracle Corp.+............................................ 50,000 3,937,500
------------
16,327,500
------------
Machinery--0.8%
SPX Corp.+............................................... 28,800 4,087,800
------------
Medical Products--1.5%
Amgen, Inc.+............................................. 40,000 2,793,125
Johnson & Johnson Co. ................................... 55,000 5,166,563
------------
7,959,688
------------
Pharmaceuticals--7.0%
ALZA Corp.+.............................................. 85,000 7,352,500
Biogen, Inc.+............................................ 45,000 2,745,000
Genentech, Inc.+......................................... 35,000 6,499,062
Merck & Co., Inc. ....................................... 60,000 4,466,250
Pfizer, Inc. ............................................ 150,000 6,740,625
Schering-Plough Corp. ................................... 95,000 4,417,500
Teva Pharmaceutical Industries Ltd. ADR.................. 60,000 4,391,250
------------
36,612,187
------------
</TABLE>
29
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
Security Description (in thousands) (Note 2)
--------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (continued)
Retail Stores--3.2%
Home Depot, Inc. ................................. 100,000 $ 5,306,250
Tiffany & Co. .................................... 80,000 3,085,000
Wal-Mart Stores, Inc. ............................ 170,000 8,181,250
------------
16,572,500
------------
Telecommunications--7.5%
AT&T Corp. ....................................... 71,300 2,094,438
Corning, Inc. .................................... 48,800 14,493,600
General Motors Corp., Class H+.................... 225,000 8,365,500
JDS Uniphase Corp.+............................... 77,900 7,376,156
Sycamore Networks, Inc.+.......................... 40,000 4,320,000
WorldCom, Inc.+................................... 85,000 2,581,875
------------
39,231,569
------------
Utilities--2.0%
Enron Corp. ...................................... 100,000 8,762,500
PECO Energy Co. .................................. 30,000 1,816,875
------------
10,579,375
------------
Total Common Stock
(cost $286,563,565)............................... 382,536,160
------------
BONDS & NOTES--8.0%
Aerospace & Military Technology--0.8%
Lockheed Martin Corp.
7.25% due 5/15/06................................ $ 4,000 3,967,800
------------
Automotive--0.9%
Daimler Chrysler Corp.
7.45% due 3/01/27................................ 5,000 4,748,500
------------
Electronics--0.5%
Texas Instruments, Inc.
6.13% due 2/01/06................................ 3,000 2,854,230
------------
Financial Services--4.9%
Bear Stearns Cos., Inc.
6.63% due 1/15/04................................ 5,000 4,927,700
CS First Boston Mortgage Securities Corp.
6.48% due 5/17/08................................ 5,000 4,802,644
Donaldson Lufkin & Jenrette, Inc. 6.88% due
11/01/05......................................... 2,000 1,963,660
Ford Motor Credit Co.
8.00% due 6/15/02................................ 5,000 5,071,000
Goldman Sachs Group LP*
6.60% due 7/15/02................................ 5,000 4,969,395
Morgan Stanley Group, Inc.
6.88% due 3/01/07................................ 4,000 3,930,720
------------
25,665,119
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
Food, Beverage & Tobacco--0.9%
Hershey Foods Corp.
7.20% due 8/15/27................................ $ 5,000 $ 4,654,950
------------
Total Bonds & Notes
(cost $42,891,894)................................ 41,890,599
------------
U.S. GOVERNMENT AND AGENCIES--18.1%
Federal National Mortgage Association--2.1%
5.63% due 3/15/01................................. 5,000 4,969,550
5.75% due 4/15/03-2/15/08......................... 4,620 4,497,106
6.50% due 9/01/10................................. 1,629 1,608,335
------------
11,074,991
------------
Overseas Private Investment Corp.--2.0%
6.99% due 1/15/09................................. 10,369 10,387,724
------------
Small Business Administration--0.8%
6.30% due 6/01/18................................. 4,472 4,268,587
------------
U.S Treasury Bonds--6.5%
6.13% due 8/15/29................................. 500 510,705
6.25% due 5/15/30................................. 32,000 33,630,080
------------
34,140,785
------------
U.S. Treasury Notes--6.7%
5.75% due 8/15/10................................. 5,000 4,979,700
6.13% due 8/31/02................................. 20,000 20,028,200
6.38% due 6/30/02................................. 10,000 10,048,400
------------
35,056,300
------------
Total U.S. Government & Agencies
(cost $96,176,350)................................ 94,928,387
------------
Total Investment Securities--99.1%
(cost $425,631,809)............................... 519,355,146
------------
SHORT-TERM INVESTMENTS--3.8%
Federal Home Loan Mortgage Discount Notes
6.44% due 10/03/00................................ 5,000 4,998,211
Federal National Mortgage Association Discount
Notes
6.43% due 10/25/00................................ 15,000 14,935,700
------------
Total Short-Term Investments
(cost $19,933,911)................................ 19,933,911
------------
</TABLE>
30
<PAGE>
SunAmerica Balanced Assets Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) (Note 2)
--------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS--0.8%
Joint Repurchase Agreement with PaineWebber Group,
Inc.
(Note 2)......................................... $3,000 $ 3,000,000
Joint Repurchase Agreement with State Street Bank
& Trust Co. (Note 2)............................. 1,227 1,227,000
------------
Total Repurchase Agreements
(cost $4,227,000)................................ 4,227,000
------------
TOTAL INVESTMENTS--
(cost $449,792,720).............................. 103.7% 543,516,057
Liabilities in excess of other assets............. (3.7) (19,476,485)
------ ------------
NET ASSETS-- 100.0% $524,039,572
====== ============
</TABLE>
------
+ Non-income producing security
* Resale restricted to qualified institutional buyers
ADR ("American Depository Receipt")
GDR ("Global Depository Receipt")
See Notes to Financial Statements
31
<PAGE>
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--90.5%
Apparel & Textiles--0.4%
Oakley, Inc.+............................................ 50,000 $ 878,125
------------
Banks--3.2%
Bank of New York Co., Inc. .............................. 30,000 1,681,875
Chase Manhattan Corp. ................................... 52,500 2,424,844
FleetBoston Financial Corp. ............................. 55,000 2,145,000
Mellon Financial Corp. .................................. 24,500 1,136,187
------------
7,387,906
------------
Broadcasting & Media--3.7%
AT&T Corp.-Liberty Media Corp., Class A+................. 120,000 2,160,000
Comcast Corp., Class A+.................................. 50,000 2,046,875
Pegasus Communications Corp.+............................ 25,000 1,207,813
Time Warner, Inc. ....................................... 40,000 3,130,000
------------
8,544,688
------------
Communication Equipment--8.5%
Cisco Systems, Inc.+..................................... 130,000 7,182,500
Juniper Networks, Inc.+.................................. 30,000 6,568,125
Lucent Technologies, Inc. ............................... 40,000 1,222,500
Nortel Networks Corp. ................................... 45,000 2,680,312
Palm, Inc.+.............................................. 35,000 1,852,813
------------
19,506,250
------------
Computers & Business Equipment--8.0%
Dell Computer Corp.+..................................... 50,000 1,540,625
EMC Corp.+............................................... 110,000 10,903,750
International Business Machines Corp. ................... 40,000 4,500,000
Sun Microsystems, Inc.+.................................. 12,400 1,447,700
------------
18,392,075
------------
Conglomerate--7.3%
General Electric Co. .................................... 180,000 10,383,750
Schlumberger Ltd. ....................................... 25,000 2,057,812
Tyco International Ltd. ................................. 80,000 4,150,000
------------
16,591,562
------------
Computer Software--1.3%
Microsoft Corp.+......................................... 50,000 3,015,625
------------
Electronics--7.9%
C-MAC Industries, Inc.+.................................. 45,400 2,610,500
Emerson Electric Co. .................................... 25,000 1,675,000
Flextronics International Ltd.+.......................... 30,000 2,463,750
Integrated Device Technology, Inc.+...................... 50,000 4,525,000
Intel Corp. ............................................. 120,000 4,987,500
Texas Instruments, Inc. ................................. 40,000 1,887,500
------------
18,149,250
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Energy Services--2.2%
Baker Hughes, Inc. ...................................... 40,000 $ 1,485,000
Halliburton Co. ......................................... 23,000 1,125,563
Nabors Industries, Inc.+................................. 25,000 1,310,000
Transocean Sedco Forex, Inc. ............................ 20,000 1,172,500
------------
5,093,063
------------
Energy Sources--6.2%
Apache Corp. ............................................ 40,000 2,365,000
Burlington Resources, Inc. .............................. 15,000 552,188
Chevron Corp. ........................................... 15,000 1,278,750
Devon Energy Corp. ...................................... 25,000 1,503,750
Exxon Mobil Corp. ....................................... 50,003 4,456,517
Kerr-Mcgee Corp. ........................................ 35,000 2,318,750
Royal Dutch Petroleum Co. GDR........................... 30,000 1,798,125
------------
14,273,080
------------
Financial Services--7.9%
American Express Co. .................................... 75,000 4,556,250
Capital One Financial Corp. ............................. 30,000 2,101,875
Citigroup, Inc. ......................................... 90,000 4,865,625
J.P Morgan & Co., Inc. .................................. 10,000 1,633,750
Merrill Lynch & Co., Inc. ............................... 20,000 1,320,000
Morgan Stanley Dean Witter & Co. ........................ 40,000 3,657,500
------------
18,135,000
------------
Insurance--0.7%
Chubb Corp. ............................................. 20,000 1,582,500
------------
Internet Software--5.0%
America Online, Inc.+.................................... 41,000 2,203,750
BEA Systems, Inc.+....................................... 54,600 4,251,975
i2 Technologies, Inc.+................................... 11,000 2,057,687
Oracle Corp.+............................................ 36,000 2,835,000
------------
11,348,412
------------
Machinery--1.0%
SPX Corp.+............................................... 15,600 2,214,225
------------
Medical Products--1.5%
Amgen, Inc.+............................................. 20,000 1,396,563
Johnson & Johnson Co. ................................... 22,000 2,066,625
------------
3,463,188
------------
Pharmaceuticals--7.3%
ALZA Corp.+.............................................. 35,000 3,027,500
Biogen, Inc.+............................................ 20,000 1,220,000
Genentech, Inc.+......................................... 20,000 3,713,750
Merck & Co., Inc. ....................................... 20,000 1,488,750
Pfizer, Inc. ............................................ 70,000 3,145,625
</TABLE>
32
<PAGE>
SunAmerica Blue Chip Growth Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
Security Description (in thousands) (Note 2)
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (continued)
Pharmaceuticals (continued)
Schering-Plough Corp. ........................... 51,000 $ 2,371,500
Teva Pharmaceutical Industries Ltd. ADR.......... 25,000 1,829,687
------------
16,796,812
------------
Retail Stores--3.2%
Home Depot, Inc. ................................ 40,000 2,122,500
Tiffany & Co. ................................... 39,400 1,519,363
Wal-Mart Stores, Inc. ........................... 75,000 3,609,375
------------
7,251,238
------------
Telecommunications--12.9%
AT&T Corp. ...................................... 25,000 734,375
CIENA Corp.+..................................... 50,000 6,140,625
Corning, Inc. ................................... 25,000 7,425,000
General Motors Corp., Class H+................... 160,000 5,948,800
JDS Uniphase Corp.+.............................. 50,000 4,734,375
Sycamore Networks, Inc.+ ........................ 25,000 2,700,000
TyCom Ltd.+...................................... 21,200 813,550
WorldCom, Inc.+.................................. 37,500 1,139,062
------------
29,635,787
------------
Utilities--2.3%
Enron Corp. ..................................... 40,000 3,505,000
PECO Energy Co. ................................. 30,000 1,816,875
------------
5,321,875
------------
Total Investment Securities--90.5%
(cost $149,559,758).............................. 207,580,661
------------
REPURCHASE AGREEMENTS--14.0%
Joint Repurchase Agreement with PaineWebber
Group, Inc. (Note 2)............................ $30,000 30,000,000
Joint Repurchase Agreement with State Street Bank
& Trust Co. (Note 2)............................ 1,983 1,983,000
------------
Total Repurchase Agreements
(cost $31,983,000)............................... 31,983,000
------------
TOTAL INVESTMENTS--
(cost $181,542,758).............................. 104.5% 239,563,661
Liabilities in excess of other assets............. (4.5) (10,250,167)
------- ------------
NET ASSETS-- 100.0% $229,313,494
======= ============
</TABLE>
------
+ Non-income producing security
ADR ("American Depository Receipt")
GDR ("Global Depository Receipt")
See Notes to Financial Statements
33
<PAGE>
SunAmerica Growth Opportunities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--78.7%
Apparel & Textiles--0.7%
Jones Apparel Group, Inc.+............................... 100,000 $ 2,650,000
------------
Communication Equipment--7.6%
Advanced Fibre Communications, Inc.+..................... 110,000 4,166,250
Aether Systems, Inc.+.................................... 38,700 4,082,850
Foundry Networks, Inc.+.................................. 45,000 3,012,188
JNI Corp.+............................................... 60,000 5,340,000
Juniper Networks, Inc.+.................................. 23,000 5,035,562
Lightpath Technologies, Inc.+............................ 80,000 3,800,000
ONI System Corp. ........................................ 40,000 3,452,500
OPNET Technologies, Inc.+................................ 500 18,250
------------
28,907,600
------------
Computers & Business Equipment--5.4%
Brocade Communications Systems, Inc.+.................... 30,000 7,080,000
EMC Corp.+............................................... 40,000 3,965,000
Network Appliance, Inc.+................................. 40,000 5,095,000
VERITAS Software Corp.+.................................. 30,000 4,260,000
------------
20,400,000
------------
Computer Software--2.0%
Adobe Systems, Inc. ..................................... 20,000 3,105,000
Futurelink Corp.+........................................ 82,000 251,125
Siebel Systems, Inc.+.................................... 40,000 4,452,500
------------
7,808,625
------------
Electronics--15.8%
Altera Corp.+............................................ 60,000 2,865,000
American Superconductor Corp.+........................... 30,000 1,474,687
Analog Devices, Inc.+.................................... 30,000 2,476,875
Applied Micro Circuits Corp.+............................ 20,000 4,141,250
Atmel Corp.+............................................. 160,000 2,430,000
Broadcom Corp., Class A+................................. 20,000 4,875,000
C-MAC Industries, Inc.+.................................. 40,000 2,300,000
Celestica, Inc.+......................................... 30,000 2,077,500
Flextronics International Ltd.+.......................... 40,000 3,285,000
GSI Lumonics, Inc.+...................................... 100,000 1,650,000
Integrated Device Technology, Inc.+...................... 20,000 1,810,000
International Rectifier Corp.+........................... 50,000 2,528,125
Lam Research Corp.+...................................... 90,000 1,884,375
LTX Corp.+............................................... 80,000 1,515,000
Newport Corp. ........................................... 30,000 4,777,969
PMC-Sierra, Inc.+........................................ 20,000 4,305,000
QLogic Corp.+............................................ 40,000 3,520,000
Sanmina Corp.+........................................... 30,000 2,808,750
Triquint Semiconductor, Inc.+............................ 50,000 1,821,875
Tvia, Inc.+.............................................. 183,600 3,293,325
Varian Semiconductor Equipment Associates, Inc.+......... 15,000 561,563
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Electronics (continued)
Vitesse Semiconductor Corp.+............................. 40,000 $ 3,557,500
------------
59,958,794
------------
Energy Services--7.0%
Baker Hughes, Inc. ...................................... 75,000 2,784,375
Diamond Offshore Drilling, Inc. ......................... 60,000 2,460,000
Global Marine, Inc.+..................................... 80,000 2,470,000
Halliburton Co. ......................................... 40,000 1,957,500
Marine Drilling Cos., Inc.+.............................. 85,000 2,427,813
Patterson Energy, Inc.+.................................. 80,000 2,750,000
R & B Falcon Corp.+...................................... 50,000 1,393,750
Rowan Cos., Inc.+........................................ 80,000 2,320,000
Smith International, Inc.+............................... 30,000 2,446,875
Transocean Sedco Forex, Inc. ............................ 70,000 4,103,750
Veritas DGC, Inc.+....................................... 50,000 1,446,875
------------
26,560,938
------------
Financial Services--3.9%
Eaton Vance Corp. ....................................... 70,000 3,570,000
Lehman Brothers Holdings, Inc. .......................... 30,000 4,432,500
Merrill Lynch & Co., Inc. ............................... 60,000 3,960,000
Morgan Stanley Dean Witter & Co. ........................ 30,000 2,743,125
------------
14,705,625
------------
Insurance--1.6%
ACE Ltd. ................................................ 22,000 863,500
AFLAC, Inc. ............................................. 80,000 5,125,000
------------
5,988,500
------------
Internet Content--1.3%
Check Point Software Ltd.+............................... 20,000 3,150,000
GoAmerica, Inc.+......................................... 159,400 1,409,694
Yahoo!, Inc.+............................................ 6,000 546,000
------------
5,105,694
------------
Internet Software--4.0%
BEA Systems, Inc.+....................................... 60,000 4,672,500
Commerce One, Inc.+...................................... 46,000 3,611,000
Entrade, Inc.+*#......................................... 45,000 154,406
Inktomi Corp.+........................................... 20,000 2,280,000
Interliant, Inc.+........................................ 40,000 320,000
Phone.com, Inc.+......................................... 30,000 3,408,750
ServiceWare Technologies, Inc.+.......................... 100,000 737,500
------------
15,184,156
------------
Machinery--1.8%
Kulicke & Soffa Industries, Inc.+........................ 110,000 1,464,375
Lone Star Technologies, Inc.+............................ 70,000 3,230,500
National Oilwell, Inc.+.................................. 65,000 2,031,250
------------
6,726,125
------------
</TABLE>
34
<PAGE>
SunAmerica Growth Opportunities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (continued)
Medical Products--5.8%
Affymetrix, Inc.+........................................ 28,000 $ 1,396,500
BioSource International, Inc.+........................... 100,000 3,100,000
Forest Laboratories, Inc.+............................... 13,500 1,548,281
Genzyme Corp.+........................................... 20,000 1,363,750
Genzyme Surgical Products.+.............................. 1,790 13,425
Medimmune, Inc.+......................................... 27,000 2,085,750
Millenium Pharmaceuticals, Inc.+......................... 30,000 4,381,875
PE Corp.--PE Biosystems Group+........................... 44,000 5,126,000
PE Corp.--Celera Genomics Group+......................... 30,000 2,988,750
------------
22,004,331
------------
Pharmaceuticals--11.6%
Biogen, Inc.+............................................ 25,000 1,525,000
Cell Therapeutics, Inc. ................................. 45,000 3,000,937
Charles River Laboratories International, Inc.+.......... 75,000 2,550,000
COR Therapeutics, Inc.+.................................. 60,000 3,738,750
Curagen Corp.+........................................... 88,000 4,688,750
CV Therapeutics, Inc.+................................... 48,000 3,733,500
Human Genome Sciences, Inc.+............................. 15,000 2,596,875
Immunex Corp.+........................................... 50,000 2,175,000
Maxim Pharmaceuticals, Inc.+............................. 42,000 2,551,500
Medarex, Inc.+........................................... 25,000 2,932,813
Merck & Co., Inc. ....................................... 45,000 3,349,687
Pfizer, Inc. ............................................ 113,750 5,111,641
Schering-Plough Corp. ................................... 65,000 3,022,500
Serono SA ADR+........................................... 100,000 3,025,000
------------
44,001,953
------------
Telecommunications--9.5%
Aspect Communications Corp.+............................. 100,000 2,062,500
CIENA Corp.+............................................. 40,000 4,912,500
Corning, Inc. ........................................... 30,000 8,910,000
Corvis Corp.+............................................ 50,000 3,052,345
EchoStar Communications Corp., Class A+.................. 120,000 6,330,000
JDS Uniphase Corp.+...................................... 42,000 3,976,875
New Focus, Inc.+......................................... 40,000 3,162,500
Sycamore Networks, Inc.+................................. 30,000 3,240,000
Vyyo, Inc.+.............................................. 20,000 600,000
------------
36,246,720
------------
Utilities--0.7%
Enron Corp. ............................................. 30,000 2,628,750
------------
Total Common Stock
(cost $217,891,769)...................................... 298,877,811
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
REPURCHASE AGREEMENTS--27.7%
Joint Repurchase Agreement with PaineWebber Group,
Inc.
(Note 2)......................................... $70,000 $ 70,000,000
Joint Repurchase Agreement with State Street Bank
& Trust Co. (Note 2)............................. 35,277 35,277,000
------------
Total Repurchase Agreements--
(cost $105,277,000)............................... 105,277,000
------------
TOTAL INVESTMENTS--
(cost $323,168,769)............................... 106.4% 404,154,811
Liabilities in excess of other assets.............. (6.4) (24,217,888)
------- ------------
NET ASSETS-- 100.0% $379,936,923
======= ============
</TABLE>
------
+ Non-income producing security
* Resale restricted to qualified institutional buyers
# Fair value security; See Note 2
ADR ("American Depository Receipt")
See Notes to Financial Statements
35
<PAGE>
SunAmerica New Century Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--94.2%
Broadcasting & Media--1.1%
Martha Stewart Living Omnimedia, Inc., Class A+......... 1,000 $ 26,250
Pegasus Communications Corp.+........................... 86,600 4,183,863
------------
4,210,113
------------
Business Services--4.4%
Amdocs Ltd.+............................................ 75,000 4,678,125
Mobile Mini, Inc.+...................................... 115,300 2,219,525
Paychex, Inc. .......................................... 120,000 6,300,000
Waste Connections, Inc.+................................ 89,200 2,285,750
Waste Management, Inc. ................................. 104,100 1,815,244
------------
17,298,644
------------
Communication Equipment--6.4%
Aether Systems, Inc.+................................... 31,000 3,270,500
Cosine Communications, Inc.+............................ 35,000 1,944,688
Juniper Networks, Inc.+................................. 39,200 8,582,350
Netro Corp.+............................................ 58,600 3,472,050
Palm, Inc.+............................................. 90,200 4,774,962
Turnstone Systems, Inc.+................................ 62,900 2,916,987
------------
24,961,537
------------
Computers & Business Equipment--9.3%
Brocade Communications Systems, Inc.+................... 37,800 8,920,800
Compaq Computer Corp. .................................. 90,300 2,490,474
Gateway, Inc. .......................................... 30,100 1,407,175
Network Appliance, Inc.+................................ 49,700 6,330,537
Redback Networks, Inc.+................................. 68,400 11,213,325
Sun Microsystems, Inc.+................................. 25,500 2,977,125
VERITAS Software Corp.+................................. 19,800 2,811,600
------------
36,151,036
------------
Computer Software--4.7%
Micromuse, Inc.+........................................ 31,200 6,269,250
Siebel Systems, Inc.+................................... 81,600 9,083,100
SpeechWorks International, Inc.+........................ 50,000 3,100,000
------------
18,452,350
------------
Education--0.9%
Career Education Corp.+................................. 80,000 3,560,000
------------
Electronics--5.3%
Bookham Technology PLC ADR+............................. 15,500 664,562
Broadcom Corp., Class A+................................ 46,800 11,407,500
Linear Technology Corp. ................................ 60,400 3,910,900
PMC-Sierra, Inc.+....................................... 20,700 4,455,675
------------
20,438,637
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Energy Services--13.3%
BJ Services Co.+......................................... 68,900 $ 4,211,512
Diamond Offshore Drilling, Inc. ......................... 76,600 3,140,600
Dynegy, Inc., Class A.................................... 59,600 3,397,200
El Paso Energy Corp. .................................... 74,900 4,615,712
Global Marine, Inc.+..................................... 129,200 3,989,050
Grant Prideco, Inc.+..................................... 105,000 2,303,438
Maverick Tube Corp.+..................................... 106,000 2,855,375
Nabors Industries, Inc.+................................. 81,300 4,260,120
Offshore Logistics, Inc. ................................ 129,900 2,321,963
Precision Drilling Corp.+................................ 96,200 3,427,125
R & B Falcon Corp.+...................................... 138,600 3,863,475
Smith International, Inc.+............................... 47,700 3,890,531
Southern Energy, Inc.+................................... 100,000 3,137,500
Transocean Sedco Forex, Inc. ............................ 45,300 2,655,713
Weatherford International, Inc.+......................... 85,300 3,667,900
------------
51,737,214
------------
Energy Sources--3.8%
Apache Corp. ............................................ 75,200 4,446,200
Calpine Corp.+........................................... 59,600 6,220,750
Devon Energy Corp. ...................................... 67,700 4,072,155
------------
14,739,105
------------
Household Products--0.8%
Yankee Candle, Inc.+..................................... 144,800 2,914,100
------------
Internet Content--2.0%
Check Point Software Ltd.+............................... 35,300 5,559,750
Critical Path, Inc.+..................................... 20,400 1,239,300
Yahoo!, Inc.+............................................ 11,000 1,001,000
------------
7,800,050
------------
Internet Software--14.7%
Ariba, Inc.+............................................. 64,500 9,240,633
Art Technology Group, Inc.+.............................. 42,100 3,988,975
BEA Systems, Inc.+....................................... 107,100 8,340,412
Blue Martini Software, Inc.+............................. 100 3,387
BroadVision, Inc.+....................................... 39,500 1,009,719
CheckFree Corp.+......................................... 20,100 842,002
Entrade, Inc.+*#......................................... 40,000 137,250
Eprise Corp.+............................................ 10,000 86,250
i2 Technologies, Inc.+................................... 54,600 10,213,612
Inktomi Corp.+........................................... 27,300 3,112,200
Macromedia, Inc.+........................................ 10,700 864,694
Oracle Corp.+............................................ 54,000 4,252,500
RealNetworks, Inc.+...................................... 65,800 2,615,550
Resonate, Inc.+.......................................... 1,000 39,500
VeriSign, Inc.+.......................................... 40,700 8,244,294
Vignette Corp.+.......................................... 17,400 519,825
WatchGuard Technologies, Inc. ........................... 60,400 3,624,000
------------
57,134,803
------------
</TABLE>
36
<PAGE>
SunAmerica New Century Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (continued)
Leisure & Tourism--0.9%
SkyWest, Inc............................................. 67,700 $ 3,469,625
------------
Medical Products--5.5%
Alkermes, Inc.+.......................................... 73,300 2,831,212
Lexicon Genetics, Inc.+.................................. 59,300 1,875,363
Medimmune, Inc.+......................................... 59,700 4,611,825
Millenium Pharmaceuticals, Inc.+......................... 49,200 7,186,275
Myriad Genetics, Inc.+................................... 59,000 5,074,000
------------
21,578,675
------------
Pharmaceuticals--8.7%
Abgenix, Inc.+........................................... 100,200 8,097,412
Allergan, Inc. .......................................... 32,400 2,735,775
ALZA Corp.+.............................................. 59,900 5,181,350
Biovail Corp.+........................................... 45,500 3,705,406
Cephalon, Inc.+.......................................... 68,300 3,312,550
Deltagen, Inc.+.......................................... 22,300 689,906
Elan Corp., ADR+......................................... 77,500 4,243,125
QLT PhotoTherapeutics, Inc.+............................. 70,900 5,025,038
Visible Genetics, Inc.+.................................. 24,800 1,001,300
------------
33,991,862
------------
Retail Stores--2.7%
Amazon.com, Inc.+........................................ 75,200 2,890,500
AnnTaylor Stores Corp.+.................................. 60,900 2,340,844
Talbots, Inc. ........................................... 33,000 2,186,250
Wal-Mart Stores, Inc. ................................... 67,400 3,243,625
------------
10,661,219
------------
Telecommunications--8.8%
Avanex Corp.+............................................ 36,800 3,962,900
CIENA Corp.+............................................. 64,000 7,860,000
EchoStar Communications Corp., Class A+.................. 41,300 2,178,575
Finistar Corp.+.......................................... 36,800 1,780,200
General Motors Corp., Class H+........................... 176,300 6,554,834
JDS Uniphase Corp.+...................................... 55,300 5,236,219
Sycamore Networks, Inc.+................................. 60,300 6,512,400
------------
34,085,128
------------
Transportation--0.9%
Oshkosh Truck Corp. ..................................... 76,500 2,964,375
RailWorks Corp.+......................................... 201,400 692,313
------------
3,656,688
------------
Total Common Stock
(cost $291,886,599)...................................... 366,840,786
------------
</TABLE>
<TABLE>
<CAPTION>
Contracts/
Principal
Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
PUT OPTION--0.1%+(1)
Network Appliance, Inc.
$125 exp. 11/00 (cost $517,381)................. 360 $ 477,000
------------
Total Investment Securities--94.3%
(cost $292,403,980).............................. 367,317,786
------------
REPURCHASE AGREEMENTS-- 6.1%
Joint Repurchase Agreement with PaineWebber
Group, Inc.
(Note 2)........................................ $20,000 20,000,000
Joint Repurchase Agreement with State Street Bank
& Trust Co. (Note 2)............................ 3,957 3,957,000
------------
Total Repurchase Agreements
(cost $23,957,000)............................... 23,957,000
------------
TOTAL INVESTMENTS--
(cost $316,360,980).............................. 100.4% 391,274,786
Liabilities in excess of other assets............. (0.4) (1,703,576)
------- ------------
NET ASSETS-- 100.0% $389,571,210
======= ============
</TABLE>
------
+ Non-income producing security
* Resale restricted to qualified institutional buyers
# Fair value security; See Note 2
(1) 1 option contract equals 100 shares
ADR ("American Depository Receipt")
See Notes to Financial Statements
37
<PAGE>
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS --September 30, 2000
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--97.0%
Automotive--0.7%
Ford Motor Co. .......................................... 100,000 $ 2,531,250
------------
Banks--2.9%
Bank of New York Co., Inc. .............................. 30,000 1,681,875
Chase Manhattan Corp. ................................... 67,500 3,117,656
FleetBoston Financial Corp. ............................. 80,000 3,120,000
Mellon Financial Corp. .................................. 30,000 1,391,250
Summit Bancorp. ......................................... 20,000 690,000
------------
10,000,781
------------
Broadcasting & Media--4.0%
AT&T Corp.-Liberty Media Corp., Class A+................. 220,000 3,960,000
Comcast Corp., Class A+.................................. 60,000 2,456,250
Pegasus Communications Corp. ............................ 41,800 2,019,463
Time Warner, Inc. ....................................... 50,000 3,912,500
USA Networks, Inc.+...................................... 70,000 1,535,625
------------
13,883,838
------------
Communication Equipment--7.4%
Cisco Systems, Inc.+..................................... 170,000 9,392,500
Juniper Networks, Inc.+.................................. 35,000 7,662,812
Lucent Technologies, Inc. ............................... 50,000 1,528,125
Nortel Networks Corp. ................................... 60,000 3,573,750
Palm, Inc.+.............................................. 60,000 3,176,250
------------
25,333,437
------------
Computers & Business Equipment--9.4%
Brocade Communications Systems, Inc.+.................... 10,000 2,360,000
Compaq Computer Corp. ................................... 80,000 2,206,400
Dell Computer Corp.+..................................... 69,600 2,144,550
EMC Corp.+............................................... 160,000 15,860,000
International Business Machines Corp. ................... 65,000 7,312,500
Sun Microsystems, Inc.+.................................. 20,000 2,335,000
------------
32,218,450
------------
Conglomerate--7.7%
General Electric Co. .................................... 270,000 15,575,625
Schlumberger Ltd. ....................................... 35,000 2,880,937
Tyco International Ltd. ................................. 155,000 8,040,625
------------
26,497,187
------------
Computer Software--1.4%
Microsoft Corp.+......................................... 80,000 4,825,000
------------
Electronics--6.5%
C-MAC Industries, Inc.+.................................. 40,000 2,300,000
Emerson Electric Co. .................................... 70,000 4,690,000
Flextronics International Ltd.+.......................... 40,000 3,285,000
Intel Corp. ............................................. 175,000 7,273,438
</TABLE>
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
<S> <C> <C>
Electronics (continued)
PMC-Sierra, Inc.+........................................ 10,000 $ 2,152,500
Texas Instruments, Inc. ................................. 54,800 2,585,875
------------
22,286,813
------------
Energy Services--3.7%
Baker Hughes, Inc. ...................................... 60,000 2,227,500
Halliburton Co. ......................................... 32,500 1,590,469
Nabors Industries, Inc.+................................. 33,200 1,739,680
R & B Falcon Corp.+...................................... 150,000 4,181,250
Transocean Sedco Forex, Inc. ............................ 50,000 2,931,250
------------
12,670,149
------------
Energy Sources--8.7%
Apache Corp. ............................................ 60,000 3,547,500
Burlington Resources, Inc. .............................. 20,000 736,250
Chevron Corp. ........................................... 15,000 1,278,750
Coastal Corp. ........................................... 80,000 5,930,000
Devon Energy Corp. ...................................... 60,000 3,609,000
Exxon Mobil Corp. ....................................... 96,604 8,609,831
Kerr-Mcgee Corp. ........................................ 60,000 3,975,000
Royal Dutch Petroleum Co. GDR............................ 40,000 2,397,500
------------
30,083,831
------------
Financial Services--7.9%
American Express Co. .................................... 75,000 4,556,250
Capital One Financial Corp. ............................. 35,000 2,452,188
Citigroup, Inc. ......................................... 134,066 7,247,943
J.P Morgan & Co., Inc. .................................. 14,000 2,287,250
Merrill Lynch & Co., Inc. ............................... 25,000 1,650,000
Morgan Stanley Dean Witter & Co. ........................ 60,000 5,486,250
Washington Mutual, Inc. ................................. 90,000 3,583,125
------------
27,263,006
------------
Food, Beverage & Tobacco--1.0%
Anheuser-Busch Cos., Inc. ............................... 80,000 3,385,000
------------
Internet Software--3.2%
America Online, inc.+.................................... 50,000 2,687,500
BEA Systems, Inc.+....................................... 55,000 4,283,125
Oracle Corp.+............................................ 50,000 3,937,500
------------
10,908,125
------------
Machinery--0.8%
SPX Corp.+............................................... 19,500 2,767,781
------------
Medical Products--3.6%
Amgen, Inc.+............................................. 40,000 2,793,125
Johnson & Johnson Co. ................................... 45,000 4,227,188
PerkinElmer, Inc. ....................................... 50,000 5,218,750
------------
12,239,063
------------
</TABLE>
38
<PAGE>
SunAmerica Growth and Income Fund
PORTFOLIO OF INVESTMENTS --September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
--------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (continued)
Pharmaceuticals--8.4%
ALZA Corp.+............................................... 55,000 $ 4,757,500
Biogen, Inc.+............................................. 30,000 1,830,000
Bristol-Myers Squibb Co. ................................. 50,000 2,856,250
Genentech, Inc.+.......................................... 30,000 5,570,625
Merck & Co., Inc. ........................................ 30,000 2,233,125
Pfizer, Inc. ............................................. 110,000 4,943,125
Schering-Plough Corp. .................................... 76,000 3,534,000
Teva Pharmaceutical Industries Ltd. ADR................... 45,000 3,293,437
------------
29,018,062
------------
Retail Stores--3.8%
Home Depot, Inc. ......................................... 60,000 3,183,750
Sears, Roebuck & Co. ..................................... 55,500 1,799,310
Tiffany & Co. ............................................ 78,600 3,031,013
Wal-Mart Stores, Inc. .................................... 105,000 5,053,125
------------
13,067,198
------------
Telecommunications--11.6%
AT&T Corp. ............................................... 30,000 881,250
CIENA Corp.+.............................................. 40,000 4,912,500
Corning, Inc. ............................................ 35,000 10,395,000
General Motors Corp., Class H+............................ 213,300 7,930,494
JDS Uniphase Corp.+....................................... 75,000 7,101,562
SBC Communications, Inc. ................................. 40,000 2,000,000
Sycamore Networks, Inc.+.................................. 20,000 2,160,000
TyCom Ltd.+............................................... 26,600 1,020,775
Verizon Communications.................................... 36,600 1,772,813
WorldCom, Inc.+........................................... 61,000 1,852,875
------------
40,027,269
------------
Utilities--4.3%
Duke Energy Corp. ........................................ 35,000 3,001,250
Energy East Corp. ........................................ 50,000 1,131,250
Enron Corp. .............................................. 85,000 7,448,125
NRG Energy, Inc.+......................................... 23,000 839,500
PECO Energy Co. .......................................... 40,000 2,422,500
------------
14,842,625
------------
Total Investment Securities--97.0% (cost $253,852,602)..... 333,848,865
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
REPURCHASE AGREEMENTS--4.2%
Joint Repurchase Agreement with PaineWebber Group,
Inc.
(Note 2)......................................... $10,000 $ 10,000,000
Joint Repurchase Agreement with State Street Bank
& Trust Co. (Note 2)............................. 4,282 4,282,000
------------
Total Repurchase Agreements
(cost $14,282,000)............................... 14,282,000
------------
TOTAL INVESTMENTS--
(cost $268,134,602).............................. 101.2% 348,130,865
Liabilities in excess of other assets............. (1.2) (3,974,291)
------- ------------
NET ASSETS-- 100.0% $344,156,574
======= ============
</TABLE>
------
+ Non-income producing security
ADR ("American Depository Receipt")
GDR ("Global Depository Receipt")
See Notes to Financial Statements
39
<PAGE>
SunAmerica "Dogs" of Wall Street Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2000
<TABLE>
<CAPTION>
Value
Security Description Shares (Note 2)
-----------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK--97.6%
Aerospace & Military Technology--3.9%
Raytheon Co., Class B................................... 74,839 $ 2,128,234
-----------
Apparel & Textiles--3.0%
V.F. Corp. ............................................. 66,593 1,644,015
-----------
Automotive--8.6%
Cooper Tire & Rubber Co. ............................... 133,192 1,340,245
General Motors Corp. ................................... 26,975 1,753,375
Genuine Parts Co. ...................................... 81,220 1,548,256
-----------
4,641,876
-----------
Business Services--6.7%
Bemis Co., Inc. ........................................ 58,532 1,880,341
Pitney Bowes, Inc. ..................................... 43,591 1,719,120
-----------
3,599,461
-----------
Chemicals--6.6%
Air Products & Chemicals, Inc. ......................... 63,755 2,295,180
du Pont (E.I.) de Nemours & Co. ........................ 30,513 1,264,382
-----------
3,559,562
-----------
Conglomerate--4.8%
Honeywell International, Inc. .......................... 35,674 1,270,886
National Service Industries, Inc. ...................... 68,035 1,330,935
-----------
2,601,821
-----------
Electronics--4.2%
Emerson Electric Co. ................................... 33,541 2,247,247
-----------
Energy Sources--3.9%
Exxon Mobil Corp. ...................................... 23,435 2,088,644
-----------
Entertainment Products--2.3%
Eastman Kodak Co. ...................................... 30,964 1,265,654
-----------
Financial Services--4.6%
J.P Morgan & Co., Inc. ................................. 15,262 2,493,429
-----------
Food, Beverage & Tobacco--15.3%
ConAgra, Inc. .......................................... 91,640 1,838,527
Hershey Foods Corp. .................................... 39,734 2,150,603
Philip Morris Cos., Inc. ............................... 83,821 2,467,481
UST, Inc. .............................................. 79,373 1,815,657
-----------
8,272,268
-----------
Household Products--8.5%
International Flavors & Fragrances, Inc. ............... 54,570 995,902
Newell Rubbermaid, Inc. ................................ 65,620 1,496,956
Sherwin-Williams Co. ................................... 97,922 2,093,083
-----------
4,585,941
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
Security Description (in thousands) (Note 2)
<S> <C> <C>
Machinery--2.7%
Caterpillar, Inc. ................................. $ 43,836 $ 1,479,465
-----------
Metals & Mining--3.6%
Minnesota Mining & Manufacturing Co. .............. 21,105 1,923,193
-----------
Pharmaceuticals--5.2%
American Home Products Corp. ...................... 50,049 2,830,897
-----------
Retail Stores--7.5%
Albertsons, Inc. .................................. 61,151 1,284,171
American Greetings Corp., Class A ................. 84,271 1,474,742
May Department Stores Co. ......................... 63,244 1,296,502
-----------
4,055,415
-----------
Telecommunications--3.6%
SBC Communications, Inc. .......................... 38,656 1,932,800
-----------
Transportation--2.6%
Norfolk Southern Corp. ............................ 96,124 1,405,814
-----------
Total Investment Securities--97.6%
(cost $65,195,398)................................. 52,755,736
-----------
REPURCHASE AGREEMENT--2.8%
Joint Repurchase Agreement
with State Street Bank & Trust Co.
(Note 2)
(cost $1,528,000)................................. $ 1,528 1,528,000
-----------
TOTAL INVESTMENTS--
(cost $66,723,398)................................. 100.4% 54,283,736
Liabilities in excess of other assets............... (0.4) (220,235)
-------- -----------
NET ASSETS-- 100.0% $54,063,501
======== ===========
</TABLE>
See Notes to Financial Statements
40
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000
Note 1. Organization
SunAmerica Equity Funds is an open-end diversified management investment
company organized as a Massachusetts business trust (the "Trust" or "Equity
Funds") on June 16, 1986. It currently consists of six different investment
funds (each, a "Fund" and collectively, the "Funds"). Each Fund is a
separate series of the Trust with a distinct investment objective and/or
strategy. Each Fund is advised and/or managed by SunAmerica Asset Management
Corp. (the "Adviser" or "SAAMCo"), an indirect wholly-owned subsidiary of
American International Group, Inc. An investor may invest in one or more of
the following Funds: SunAmerica Balanced Assets Fund ("Balanced Assets
Fund"), SunAmerica Blue Chip Growth Fund ("Blue Chip Growth Fund"),
SunAmerica Growth Opportunities Fund ("Growth Opportunities Fund"), formerly
SunAmerica Mid-Cap Growth Fund, SunAmerica New Century Fund ("New Century
Fund"), formerly SunAmerica Small Company Growth Fund, SunAmerica Growth and
Income Fund ("Growth and Income Fund") and SunAmerica "Dogs" of Wall Street
Fund (" "Dogs" of Wall Street Fund"). Effective April 3, 2000, the Small
Company Growth Fund changed its name to the New Century Fund. The investment
objective of the New Century Fund changed to investing primarily in equity
securities without regard to market capitalization. The Funds are considered
to be separate entities for financial and tax reporting purposes. The
investment objective for each of the Funds is as follows:
Balanced Assets seeks conservation of principal and capital appreciation by
maintaining a balanced portfolio of stocks and bonds.
Blue Chip Growth seeks capital appreciation by investing primarily in equity
securities of companies with large market capitalizations.
Growth Opportunities seeks capital appreciation by investing primarily in
equity securities of medium-sized companies.
New Century seeks capital appreciation by investing primarily in equity
securities without regard to market capitalization.
Growth and Income seeks capital appreciation and current income by investing
primarily in common stocks.
"Dogs" of Wall Street seeks total return (including capital appreciation and
current income) through a passively managed strategy involving the annual
selection of thirty high dividend yielding common stocks from the Dow
Jones Industrial Average and the broader market.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statement of Assets and Liabilities. The cost structure
for each class is as follows:
Class A shares-- Offered at net asset value per share plus an initial sales
charge. Any purchases of Class A shares in excess of
$1,000,000 will be subject to a contingent deferred sales
charge on redemptions made within two years of purchase.
Class B shares-- Offered at net asset value per share without an initial
sales charge, although a declining contingent deferred
sales charge may be imposed on redemptions made within six
years of purchase. Class B shares will convert
automatically to Class A
41
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
shares on the first business day of the month after seven years
from the issuance of such shares and at such time will be
subject to the lower distribution fee applicable to Class A
shares.
Class II shares-- Offered at net asset value per share plus an initial
sales charge. Certain redemptions made within the first
18 months of the date of purchase are subject to a
contingent deferred sales charge.
Class Z shares-- Offered at net asset value per share exclusively for sale
to employees participating in the SunAmerica profit
sharing and retirement plan.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions. Class A, Class B and Class II shares each make
distribution and account maintenance and service fee payments under the
distribution plans pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Act"), except that Class B and Class II shares are subject to
higher distribution fee rates. There are no distribution or service fee
payments applicable to Class Z.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates.
The following is a summary of the significant accounting policies followed
by the Funds in the preparation of their financial statements:
Security Valuations: Securities that are actively traded in the over-the-
counter market, including listed securities for which the primary market is
believed by the Adviser to be over-the-counter, are valued at the quoted bid
price provided by principal market makers. Securities listed on the New York
Stock Exchange ("NYSE") or other national securities exchanges, are valued
on the basis of the last sale price on the exchange on which they are
primarily traded. If there is no sale on that day, then securities are
valued at the closing bid price on the NYSE or other primary exchange for
that day. However, if the last sale price on the NYSE is different than the
last sale price on any other exchange, the NYSE price is used. Securities
that are traded on foreign exchanges are ordinarily valued at the last
quoted sales price available before the time when the assets are valued. If
a security's price is available from more than one foreign exchange, a Fund
uses the exchange that is the primary market for the security. Options
traded on national securities exchanges are valued as of the close of the
exchange on which they are traded. Futures and options traded on commodities
exchanges are valued at their last sale price as of the close of such
exchange. The Funds may make use of a pricing service in the determination
of their net asset values. Securities for which market quotations are not
readily available and other assets are valued at fair value as determined
pursuant to procedures adopted in good faith by the Trustees. Short-term
investments which mature in less than 60 days are valued at amortized
42
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
cost, if their original maturity was 60 days or less, or by amortizing their
value on the 61st day prior to maturity, if their original term to maturity
exceeded 60 days.
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, transfer uninvested cash balances into a single joint
account, the daily aggregate balance of which is invested in one or more
repurchase agreements collateralized by U.S. Treasury or federal agency
obligations. The Funds' custodian takes possession of the collateral pledged
for investments in repurchase agreements. The underlying collateral is
valued daily on a mark to market basis to ensure that the value, including
accrued interest, is at least equal to the repurchase price. In the event of
default of the obligation to repurchase, a Fund has the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligation. If
the seller defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited.
As of September 30, 2000, Balanced Assets Fund, Blue Chip Growth Fund,
Growth Opportunities Fund, New Century Fund and Growth and Income Fund had a
1.5%, 15.0%, 35.0%, 10.0% and 5.0% undivided interest, respectively, which
represented $3,000,000, $30,000,000, $70,000,000, $20,000,000 and
$10,000,000 respectively, in principal amount in a joint repurchase
agreement with PaineWebber Group, Inc. As of such date, the repurchase
agreement in the joint account and the collateral therefore were as follows:
PaineWebber Group, Inc. Repurchase Agreement 6.40% dated 9/29/00, in the
principal amount of $200,000,000 repurchase price $200,106,667 due 10/02/00,
collaterized by $100,000,000 U.S. Treasury Bond 13.875% due 5/15/11,
$32,000,000 U.S. Treasury Bond 7.50% due 11/15/16, $25,030,000 U.S. Treasury
Note 5.50% due 7/31/01, approximate aggregate collateral value $204,340,631.
As of September 30, 2000, Balanced Assets Fund, Blue Chip Growth Fund,
Growth Opportunities Fund, New Century Fund, Growth and Income Fund and
"Dogs" of Wall Street Fund had a 0.8%, 1.3%, 22.3%, 2.5%, 2.7% and 1.0%
undivided interest, respectively, which represented $1,227,000, $1,983,000,
$35,277,000, $3,957,000, $4,282,000, and $1,528,000 respectively, in
principal amount in a joint repurchase agreement with State Street Bank &
Trust Co. As of such date, the repurchase agreement in the joint account and
the collateral therefore were as follows:
State Street Bank & Trust Co. Repurchase Agreement 6.35% dated 9/29/00, in
the principal amount of $158,414,000 repurchase price $158,497,827 due
10/02/00, collaterized by $166,435,000 U.S. Treasury Bill 6.58% due 3/22/01,
approximate aggregate collateral value $161,608,385.
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: As customary in the mutual fund industry,
securities transactions are recorded on a trade date basis. Realized gains
and losses on sales of investments are calculated on the identified cost
basis. Interest income is recorded on the accrual basis; dividend income is
recorded on the ex-dividend
43
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
date. Funds investing in foreign securities may be subject to taxes imposed
by countries in which they invest. Such taxes are generally based on either
income or gains earned or repatriated. The Equity Funds, except for the
Growth and Income Fund, do not amortize premiums or accrete discounts except
for original issue discounts and on interest only securities for which
amortization is required for federal income tax purposes.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses, is allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of the dividend-eligible shares, as appropriate) of each class of shares at
the beginning of the day (after adjusting for the current capital shares
activity of the respective class).
Expenses common to all Funds, not directly related to individual Funds, are
allocated among the Equity Funds based upon their relative net asset value
or other appropriate methods. Expenses incurred in connection with the
organization of the "Dogs" of Wall Street Fund are being amortized on a
straight line basis by the Fund over a period not to exceed 60 months from
the date the Fund commenced operations.
The Funds issue and redeem their shares, invest in securities and distribute
dividends from net investment income and net realized gains which are paid
in cash or are reinvested at the discretion of shareholders. These
activities are reported in the Statement of Changes in Net Assets.
Dividends from net investment income, if any, are paid annually, except for
Balanced Assets Fund and Growth and Income Fund, which pay quarterly.
Capital gain distributions, if any, are paid at least annually.
The Funds record dividends and distributions to their shareholders on the
ex-dividend date. The amount of dividends and distributions from net
investment income and net realized capital gains are determined and
presented in accordance with federal income tax regulations, which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net
investment income/loss, net realized gain/loss, and net assets are not
affected.
For the fiscal year ended September 30, 2000, the following
reclassifications arising from book/tax differences were primarily the
result of reclassifications due to net operating losses.
<TABLE>
<CAPTION>
Accumulated Accumulated
Undistributed Undistributed Paid
Net Realized Net Investment In
Gain/Loss Income/Loss Capital
------------- -------------- -----------
<S> <C> <C> <C>
Balanced Assets Fund.............. $ (142,679) $ 142,679 $ --
Blue Chip Growth Fund............. (6,398,557) 1,457,145 4,941,412
Growth Opportunities Fund......... (1,432,481) 1,432,481 --
New Century Fund.................. (58,560,477) 3,685,447 54,875,030
Growth and Income Fund............ (2,442,103) 2,442,103 --
"Dogs" of Wall Street Fund........ 44,881 (44,881) --
</TABLE>
44
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies are translated into U.S. dollars at the mean of the quoted bid
and asked prices of such currencies against the U.S. dollar.
The Funds do not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at fiscal year-end. Similarly, the Funds do
not isolate the effect of changes in foreign exchange rates from the changes
in the market prices of portfolio securities sold during the year.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities include foreign exchange gains and losses from currency
gains or losses between the trade and settlement dates of securities
transactions, the difference between the amounts of interest, dividends and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid and changes in the unrealized
foreign exchange gains and losses relating to other assets and liabilities
arising as a result of changes in the exchange rate.
Options: An option is a contract conveying a right to buy or sell a
financial instrument at a specified price during a stipulated period. The
premium paid by a Fund for the purchase of a call or a put option is
included in the Fund's Statement of Assets and Liabilities as an investment
and subsequently marked to market to reflect the current market value of the
option. When a Fund writes a call or a put option, an amount equal to the
premium received by the Fund is included in the Fund's Statement of Assets
and Liabilities as a liability and is subsequently marked to market to
reflect the current market value of the option written. If an option which
the Fund has written either expires on its stipulated expiration date, or if
the Fund enters into a closing purchase transaction, the Fund realizes a
gain (or loss if the cost of a closing purchase transaction exceeds the
premium received when the option was written) without regard to any
unrealized gain or loss on the underlying security, and the liability
related to such options is extinguished. If a call option which the Fund has
written is exercised, the Fund realizes a capital gain or loss from the sale
of the underlying security and the proceeds from such sale are increased by
the premium originally received. If a put option which the Fund has written
is exercised, the amount of the premium originally received reduces the cost
of the security which the Fund purchased upon exercise of the option.
During the fiscal year ended September 30, 2000, transactions in written
option contracts were as follows:
<TABLE>
<CAPTION>
New Century Fund
----------------------
Contracts Amount
--------- ------------
<S> <C> <C>
Written option contracts as of 9/30/99............... (398) $ (506,384)
Options written during the period.................... (6,665) (14,778,048)
Written options closed during the period............. 7,063 11,963,008
Net realized gain on written options closed.......... -- 3,321,424
------ ------------
Written option contracts as of 9/30/00............... -- $ --
====== ============
</TABLE>
45
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
Note 3. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with SAAMCo. Under the Agreement, SAAMCo
provides continuous supervision of a Fund's portfolio and administers its
corporate affairs, subject to general review by the Trustees. In connection
therewith, SAAMCo furnishes the Funds with office facilities, maintains
certain of the Funds' books and records, and pays the salaries and expenses
of all personnel, including officers of the Funds who are employees of
SAAMCo and its affiliates. The investment advisory and management fee paid
to SAAMCo with respect to each Fund is computed daily and payable monthly,
at an annual rate of .75% of a Fund's average daily net assets up to $350
million, .70% of the next $350 million, and .65% thereafter, except for the
"Dogs" of Wall Street Fund, which pays at an annual rate of .35% of the
Fund's average daily net assets. For the year ended September 30, 2000,
SAAMCo earned fees in the amounts stated on the Statement of Operations.
For the fiscal year ended September 30, 2000, SAAMCo has agreed to reimburse
expenses as follows:
<TABLE>
<S> <C>
Balanced Assets Class II................................ $ 13,300
Blue Chip Growth Class II .............................. 7,812
Growth Opportunities Class II........................... 1,810
New Century Class II.................................... 3,580
New Century Class Z..................................... 21,496
Growth and Income Class II.............................. 2,950
Growth and Income Class Z............................... 31,980
"Dogs" of Wall Street Class A........................... 52,356
"Dogs" of Wall Street Class B........................... 102,011
"Dogs" of Wall Street Class II.......................... 134,637
</TABLE>
The Trust, on behalf of each Fund, has a Distribution Agreement with
SunAmerica Capital Services, Inc. ("SACS"), an affiliate of the Adviser.
Each Fund has adopted a Distribution Plan (the "Plan") in accordance with
the provisions of Rule 12b-1 under the 1940 Act. Rule 12b-1 permits an
investment company directly or indirectly to pay expenses associated with
the distribution of its shares ("distribution expenses") in accordance with
a plan adopted by the investment company's board of trustees and approved by
its shareholders. Pursuant to such rule, the Trustees and the shareholders
of each class of shares of each Fund have adopted Distribution Plans
hereinafter referred to as the "Class A Plan", "Class B Plan" and "Class II
Plan". In adopting the Distribution Plans, the Trustees determined that
there was a reasonable likelihood that each such Plan would benefit the Fund
and the shareholders of the respective class. The sales charge and
distribution fees of a particular class will not be used to subsidize the
sale of shares of any other class.
Under the Class A Plan, Class B Plan and Class II Plan, the Distributor
receives payments from a Fund at an annual rate of up to 0.10%, 0.75% and
0.75%, respectively, of average daily net assets of such Fund's Class to
compensate the Distributor and certain securities firms for providing sales
and
46
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be reimbursed out of such
distribution fees include fees paid to broker-dealers that have sold Fund
shares, commissions and other expenses such as those incurred for sales
literature, prospectus printing and distribution and compensation to
wholesalers. It is possible that in any given year the amount paid to the
Distributor under each Class' Plan may exceed the Distributor's distribution
costs as described above. The Distribution Plans provide that each class of
shares of each Fund may also pay the Distributor an account maintenance and
service fee up to an annual rate of 0.25% of the aggregate average daily net
assets of such class of shares for payments to broker-dealers for providing
continuing account maintenance. Accordingly, for the fiscal year ended
September 30, 2000, SACS received fees (see Statement of Operations) based
upon the aforementioned rates.
SACS receives sales charges on each Fund's Class A and Class II shares,
portions of which are reallowed to affiliated broker-dealers and non-
affiliated broker-dealers. SACS also receives the proceeds of contingent
deferred sales charges paid by investors in connection with certain
redemptions of each Fund's Class B and Class II shares. SACS has advised the
Funds that for the fiscal year ended September 30, 2000 the proceeds
received from sales (and paid out to affiliated and non-affiliated broker-
dealers) and redemptions are as follows:
<TABLE>
<CAPTION>
Class A Class B
---------------------------------------- -------------
Contingent
Sales Affiliated Non-affiliated Deferred
Charges Broker-dealers Broker-dealers Sales Charges
---------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Balanced Assets Fund.... $1,504,245 $ 983,164 $ 294,986 $218,036
Blue Chip Growth Fund... 530,793 240,986 209,830 143,698
Growth Opportunities
Fund................... 3,012,938 1,050,511 1,263,202 71,244
New Century Fund........ 594,627 274,439 231,848 141,830
Growth and Income Fund.. 916,828 424,933 346,699 309,488
"Dogs" of Wall Street
Fund................... 61,109 15,955 36,380 420,958
<CAPTION>
Class II
------------------------------------------------------
Contingent
Sales Affiliated Non-affiliated Deferred
Charges Broker-dealers Broker-dealers Sales Charges
---------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Balanced Assets Fund.... $ 208,886 $ 101,338 $ 107,548 $ 9,911
Blue Chip Growth Fund... 75,365 34,484 40,881 5,505
Growth Opportunities
Fund................... 538,146 217,295 320,851 12,345
New Century Fund........ 60,690 25,714 34,976 7,402
Growth and Income Fund.. 253,683 71,421 182,262 10,895
"Dogs" of Wall Street
Fund................... 48,911 3,735 45,176 128,314
</TABLE>
The Trust has entered into a Service Agreement with SunAmerica Fund
Services, Inc. ("SAFS"), an affiliate of the Adviser. Under the Service
Agreement, SAFS performs certain shareholder account functions by assisting
the Funds' transfer agent in connection with the services that it offers to
the shareholders of the Funds. The Service Agreement, which permits the
Funds to compensate SAFS for services rendered based upon an annual rate of
0.22% of average daily net assets, is approved
47
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
annually by the Trustees. For the fiscal year ended September 30, 2000, the
Funds incurred the following expenses which are included in transfer agent
fees in the Statement of Operations to compensate SAFS pursuant to the terms
of the Service Agreement.
<TABLE>
<CAPTION>
Payable at
Expense September 30, 2000
------------------------- ------------------------
Class
Class A Class B II Class A Class B Class II
-------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Balanced Assets Fund..... $654,000 $420,976 $42,372 $58,537 $33,240 $ 5,320
Blue Chip Growth Fund.... 298,225 139,143 10,249 27,942 12,552 1,605
Growth Opportunities
Fund.................... 274,081 120,057 49,727 34,971 18,268 10,642
New Century Fund......... 503,954 261,311 16,716 46,122 22,379 1,939
Growth and Income Fund... 245,040 348,050 56,578 23,377 32,425 7,136
"Dogs" of Wall Street
Fund.................... 33,609 75,785 110,246 1,664 3,926 4,559
</TABLE>
Note 4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the fiscal year ended September 30, 2000 were as follows:
<TABLE>
<CAPTION>
Balanced Blue Chip Growth New Growth and "Dogs" of
Assets Growth Opportunities Century Income Wall Street
Fund Fund Fund Fund Fund Fund
-------------- ------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Purchases (excluding
U.S. government
securities)............ $ 250,215,945 $151,322,097 $376,914,979 $721,764,151 $236,907,044 $ 56,617,795
Sales (excluding U.S.
government securities). 213,558,420 140,833,306 241,941,115 732,676,123 165,209,751 157,821,682
Purchases of U.S.
government securities.. 1,032,135,322 -- -- -- -- --
Sales of U.S. government
securities............. 1,032,169,843 -- -- -- 3,370,313 --
</TABLE>
Note 5. Portfolio Securities
Each Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute all of its
taxable income, including any net realized gain on investments, to its
shareholders. Therefore, no federal tax provision is required.
48
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for tax purposes, including short-term securities, were as
follows:
<TABLE>
<CAPTION>
Balanced Blue Chip Growth New Growth and "Dogs" of
Assets Growth Opportunities Century Income Wall Street
Fund Fund Fund Fund Fund Fund
------------ ------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Cost (tax basis)........ $450,305,421 $181,758,357 $323,903,198 $318,119,033 $268,369,130 $ 70,405,863
============ ============ ============ ============ ============ ============
Appreciation............ $105,685,569 $ 62,063,997 $ 87,918,783 $ 89,134,881 $ 87,720,426 $ 2,513,398
Depreciation............ (12,474,933) (4,258,693) (7,667,170) (15,979,128) (7,958,691) (18,635,525)
------------ ------------ ------------ ------------ ------------ ------------
Net unrealized
appreciation
(depreciation)......... $ 93,210,636 $ 57,805,304 $ 80,251,613 $ 73,155,753 $ 79,761,735 $(16,122,127)
============ ============ ============ ============ ============ ============
</TABLE>
Capital losses incurred after October 31 ("Post October") within the taxable
year are deemed to arise on the 1st business day of the Fund's next taxable
year. SunAmerica "Dogs" of Wall Street Fund incurred and elected to defer net
capital losses of $15,877,607 during the fiscal year 2000. To the extent that
these losses are used to offset future capital gains, it is likely that the
gain so offset will not be distributed to shareholders.
Note 6. Capital Share Transactions
Transactions in capital shares of each class of each fund were as follows:
<TABLE>
<CAPTION>
Balanced Assets Fund
------------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- --------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------------ ------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 3,784,389 $ 79,182,443 3,741,527 $ 74,343,358 2,481,201 $ 52,114,650 2,870,181 $ 57,135,480
Reinvested
dividends...... 1,361,609 27,322,581 968,048 17,924,078 862,156 17,223,999 745,946 13,710,236
Shares redeemed. (2,643,777) (55,433,547) (2,480,966) (49,258,207) (3,819,736) (79,999,248) (3,987,318) (79,355,310)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease)..... 2,502,221 $ 51,071,477 2,228,609 $ 43,009,229 (476,379) $(10,660,599) (371,191) $ (8,509,594)
========== ============ ========== ============ ========== ============ ========== ============
<CAPTION>
Balanced Assets Fund
--------------------------------------------------
Class II
--------------------------------------------------
For the period
For the February 2, 1999*
year ended through
September 30, 2000 September 30, 1999
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,109,453 $ 23,150,050 476,801 $ 9,535,732
Reinvested
dividends...... 55,318 1,108,241 1,076 21,568
Shares redeemed. (195,582) (4,122,073) (28,795) (587,100)
---------- ------------ ---------- ------------
Net increase.... 969,189 $ 20,136,218 449,082 $ 8,970,200
========== ============ ========== ============
</TABLE>
* Inception of the class
49
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
Blue Chip Growth Fund
-------------------------------------------------------------------------------------------------------
Class A Class B
--------------------------------------------------- --------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------------- ------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 2,604,394 $ 71,699,491 1,395,707 $ 31,876,762 1,178,541 $ 30,844,260 1,093,294 $ 23,531,927
Reinvested
dividends...... 421,021 10,819,619 280,737 5,589,485 203,217 4,917,877 143,947 2,734,989
Shares redeemed. (2,157,594) (59,150,189) (1,177,480) (26,698,827) (1,085,784) (28,359,546) (1,075,965) (22,939,437)
---------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
Net increase.... 867,821 $ 23,368,921 498,964 $ 10,767,420 295,974 $ 7,402,591 161,276 $ 3,327,479
========== ============= ========== ============ ========== ============ ========== ============
<CAPTION>
Blue Chip Growth Fund
---------------------------------------------------
Class II
---------------------------------------------------
For the period
For the February 2, 1999*
year ended through
September 30, 2000 September 30, 1999
------------------------- ------------------------
Shares Amount Shares Amount
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 332,740 $ 8,827,664 36,737 $ 827,690
Reinvested
dividends...... 5,558 134,326 -- --
Shares redeemed. (44,547) (1,176,017) (1,762) (40,936)
---------- ------------- ---------- ------------
Net increase.... 293,751 $ 7,785,973 34,975 $ 786,754
========== ============= ========== ============
<CAPTION>
Growth Opportunities Fund
-------------------------------------------------------------------------------------------------------
Class A Class B
--------------------------------------------------- --------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------------- ------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 6,175,659 $ 228,535,425 647,573 $ 14,130,770 2,539,778 $ 87,710,402 446,721 $ 8,713,279
Reinvested
dividends...... 355,214 9,628,251 160,377 2,716,783 113,982 2,896,368 50,619 816,509
Shares redeemed. (3,971,613) (144,886,906) (674,346) (14,174,781) (565,071) (18,719,929) (388,091) (7,334,459)
---------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
Net increase.... 2,559,260 $ 93,276,770 133,604 $ 2,672,772 2,088,689 $ 71,886,841 109,249 $ 2,195,329
========== ============= ========== ============ ========== ============ ========== ============
<CAPTION>
Growth Opportunities Fund
---------------------------------------------------
Class II
---------------------------------------------------
For the period
For the February 2, 1999*
year ended through
September 30, 2000 September 30, 1999
------------------------- ------------------------
Shares Amount Shares Amount
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,826,764 $ 64,796,750 52,670 $ 1,119,971
Reinvested
dividends...... 14,436 366,537 -- --
Shares redeemed. (170,668) (5,942,280) (2,927) (63,536)
---------- ------------- ---------- ------------
Net increase.... 1,670,532 $ 59,221,007 49,743 $ 1,056,435
========== ============= ========== ============
</TABLE>
* Inception of the class
50
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
New Century Fund
----------------------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------------- ------------------------- -------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ---------- ------------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 5,808,586 $ 228,462,186 7,435,823 $ 180,133,194 1,340,050 $ 47,141,826 1,827,575 $ 44,195,336
Reinvested
dividends...... 779,680 25,877,653 356,879 7,419,565 471,886 14,779,478 233,735 4,648,997
Shares redeemed. (5,847,587) (230,217,187) (7,884,868) (192,885,231) (1,619,047) (58,252,215) (2,442,035) (58,751,232)
---------- ------------- ---------- ------------- ----------- ------------- ---------- ------------
Net increase
(decrease)..... 740,679 $ 24,122,652 (92,166) $ (5,332,472) 192,889 $ 3,669,089 (380,725) $ (9,906,899)
========== ============= ========== ============= =========== ============= ========== ============
<CAPTION>
New Century Fund
----------------------------------------------------------------------------------------------------------
Class II Class Z
---------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------------- ------------------------- -------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ---------- ------------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 218,306 $ 8,111,647 153,773 $ 3,914,562 54,251 $ 2,235,047 17,600 $ 456,470
Reinvested
dividends...... 14,960 467,940 703 13,966 5,922 201,099 2,049 43,229
Shares redeemed. (51,642) (1,828,188) (63,916) (1,601,062) (18,298) (713,642) (11,228) (301,784)
---------- ------------- ---------- ------------- ----------- ------------- ---------- ------------
Net increase.... 181,624 $ 6,751,399 90,560 $ 2,327,466 41,875 $ 1,722,504 8,421 $ 197,915
========== ============= ========== ============= =========== ============= ========== ============
<CAPTION>
Growth and Income Fund
----------------------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------------- ------------------------- -------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ---------- ------------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 2,150,863 $ 41,098,767 1,879,078 $ 29,780,045 2,851,584 $ 52,793,572 2,833,246 $ 43,697,682
Reinvested
dividends...... 188,660 3,398,214 144,275 2,042,900 268,527 4,726,103 201,016 2,802,174
Shares redeemed. (1,311,109) (24,974,669) (1,157,268) (18,117,327) (1,700,418) (31,674,956) (1,640,931) (24,970,652)
---------- ------------- ---------- ------------- ----------- ------------- ---------- ------------
Net increase ... 1,028,414 $ 19,522,312 866,085 $ 13,705,618 1,419,693 $ 25,844,719 1,393,331 $ 21,529,204
========== ============= ========== ============= =========== ============= ========== ============
<CAPTION>
Growth and Income Fund
----------------------------------------------------------------------------------------------------------
Class II Class Z
---------------------------------------------------- ----------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------------- ------------------------- -------------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------- ---------- ------------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 1,527,021 $ 28,518,565 670,592 $ 10,609,786 19,097 $ 374,762 6,141 $ 99,370
Reinvested
dividends...... 32,102 564,359 4,148 57,767 475 8,634 272 3,872
Shares redeemed. (200,672) (3,778,939) (50,279) (796,972) (2,954) (54,408) (365) (6,622)
---------- ------------- ---------- ------------- ----------- ------------- ---------- ------------
Net increase ... 1,358,451 $ 25,303,985 624,461 $ 9,870,581 16,618 $ 328,988 6,048 $ 96,620
========== ============= ========== ============= =========== ============= ========== ============
</TABLE>
51
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
<TABLE>
<CAPTION>
"Dogs" of Wall Street Fund
-----------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------- -------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------------------ ------------------------ ------------------------ -----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 304,260 $ 3,141,369 1,864,365 $ 22,888,071 404,039 $ 4,231,344 3,764,882 $ 46,144,668
Reinvested
dividends...... 85,040 915,027 18,802 224,876 163,824 1,762,751 16,481 197,111
Shares redeemed. (1,710,188) (17,866,011) (1,166,882) (14,371,053) (3,062,323) (31,440,572) (868,522) (10,701,512)
---------- ------------ ---------- ------------ ---------- ------------ --------- ------------
Net increase
(decrease)..... (1,320,888) $(13,809,615) 716,285 $ 8,741,894 (2,494,460) $(25,446,477) 2,912,841 $ 35,640,267
========== ============ ========== ============ ========== ============ ========= ============
<CAPTION>
"Dogs" of Wall Street Fund
--------------------------------------------------
Class II
--------------------------------------------------
For the For the
year ended year ended
September 30, 2000 September 30, 1999
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..... 373,413 $ 4,070,168 7,015,914 $ 86,489,034
Reinvested
dividends...... 305,152 3,283,432 23,624 282,539
Shares redeemed. (6,136,267) (63,363,565) (897,323) (11,100,097)
---------- ------------ ---------- ------------
Net increase
(decrease)..... (5,457,702) $(56,009,965) 6,142,215 $ 75,671,476
========== ============ ========== ============
</TABLE>
Note 7. Commitments and Contingencies
The SunAmerica Family of Mutual Funds has established committed and
uncommitted lines of credit with State Street Bank and Trust Company, the
Funds' custodian. Interest is currently payable at the Federal Funds Rate
plus 50 basis points on the committed line and Federal Funds Rate plus 100
basis points on the uncommitted line of credit. There is also a commitment
fee of 8 basis points per annum on the daily unused portion of the committed
line of credit. Borrowings under the line of credit will commence when the
respective Fund's cash shortfall exceeds $100,000. During the year ended
September 30, 2000, the New Century Fund and the "Dogs" of Wall Street Fund
had borrowings outstanding for 4 and 181 days, respectively, under the line
of credit and incurred $1,522 and $49,360, respectively, in interest charges
related to these borrowings. The New Century Fund and "Dogs" of Wall Street
Fund average amount of debt under the line of credit for the days utilized
was $2,111,118 and $1,527,349, respectively, at a weighted average interest
of 6.39% and 6.52%, respectively. The Funds did not have any outstanding
borrowings at September 30, 2000.
Note 8. Trustees Retirement Plan
The Trustees (and Directors) of the SunAmerica Family of Mutual Funds have
adopted the SunAmerica Disinterested Trustees' and Directors' Retirement
Plan (the "Retirement Plan") effective January 1, 1993 for the unaffiliated
Trustees. The Retirement Plan provides generally that if an unaffiliated
Trustee
52
<PAGE>
SunAmerica Equity Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2000 -- (continued)
who has at least 10 years of consecutive service as a Disinterested Trustee
of any of the SunAmerica mutual funds (an "Eligible Trustee") retires after
reaching age 60 but before age 70 or dies while a Trustee, such person will
be eligible to receive a retirement or death benefit from each SunAmerica
mutual fund with respect to which he or she is an Eligible Trustee. As of
each birthday, prior to the 70th birthday, but in no event for a period
greater than 10 years, each Eligible Trustee will be credited with an amount
equal to 50% of his or her regular fees (excluding committee fees) for
services as a Disinterested Trustee of each SunAmerica mutual fund for the
calendar year in which such birthday occurs. In addition, an amount equal to
8.5% of any amounts credited under the preceding clause during prior years,
is added to each Eligible Trustee's account until such Eligible Trustee
reaches his or her 70th birthday. An Eligible Trustee may receive any
benefits payable under the Retirement Plan, at his or her election, either
in one lump sum or in up to fifteen annual installments. As of September 30,
2000, Balanced Assets Fund, Blue Chip Growth Fund, Growth Opportunities
Fund, New Century Fund, Growth and Income Fund and "Dogs" of Wall Street
Fund had accrued $62,808, $19,677, $10,578, $41,065, $15,474 and $5,726,
respectively, for the Retirement Plan, which is included in accrued expenses
on the Statement of Assets and Liabilities, and for the year ended September
30, 2000 expensed $9,606, $3,442, $1,815, $5,662, $4,779 and $2,982
respectively, for the Retirement Plan, which is included in Trustees' fees
and expenses on the Statement of Operations. Any undistributed amounts shall
continue to accrue interest at 8.5%.
Note 9. Change of Independent Accountant
On August 23-24, 2000, the Board of Trustees of the Fund approved a change
of the Funds' independent auditors to Ernst & Young LLP.
53
<PAGE>
SunAmerica Equity Funds
REPORT OF INDEPENDENT ACCOUNTANTS
Shareholders and Trustees
SunAmerica Equity Funds
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the SunAmerica Equity Funds,
comprised of the SunAmerica Balanced Assets Fund, SunAmerica Blue Chip Growth
Fund, SunAmerica Growth Opportunities Fund, SunAmerica New Century Fund,
SunAmerica Growth and Income Fund, and SunAmerica "Dogs" of Wall Street Fund
(collectively the "Funds"), as of September 30, 2000, and the related
statements of operations and changes in net assets and financial highlights for
the year then ended. These financial statements and financial highlights are
the responsibility of the Funds' management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits. The statement of changes in net assets for the year ended September 30,
1999 and financial highlights for the year then ended and the periods presented
prior thereto were audited by other auditors, whose report dated November 10,
1999 expressed an unqualified opinion on those financial statements and
financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of September 30, 2000, by correspondence
with the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
SunAmerica Equity Funds as of September 30, 2000, and the results of their
operations, changes in their net assets and financial highlights for the year
then ended, in conformity with accounting principles generally accepted in the
United States.
/s/ Ernst & Young LLP
New York, New York
November 15, 2000
54
<PAGE>
SunAmerica Equity Funds (unaudited)
SHAREHOLDER TAX FUNDS INFORMATION
Certain tax information regarding the SunAmerica Equity Funds is required to be
provided to shareholders based upon each Fund's income and distributions for
the taxable year ended September 30, 2000. The information and distributions
reported herein may differ from the information and distributions taxable to
the shareholders for the calendar year ending December 31, 2000. The
information necessary to complete your income tax returns will be included with
your Form 1099-DIV which will be sent to you under separate cover in January
2001.
During the year ended September 30, 2000 the Funds paid the following
dividends:
<TABLE>
<CAPTION>
Net
long-term
capital
gains
-----------
<S> <C>
Balanced Assets Fund............................................... $38,891,265
Blue Chip Growth Fund.............................................. 17,258,991
Growth Opportunities Fund.......................................... 1,890,000
New Century Fund................................................... 27,513,486
Growth and Income Fund............................................. 8,390,000
"Dogs" of Wall Street Fund......................................... 137,587
</TABLE>
For the year ended September 30, 2000, 38.85%, 44.57%, 2.33%, 0.88%, 93.74% and
66.91% of the dividends paid from ordinary income by Balanced Assets Fund, Blue
Chip Growth Fund, Growth Opportunities Fund, New Century Fund, Growth and
Income Fund and "Dogs" of Wall Street Fund respectively, qualified for the 70%
dividends received deductions for corporations.
55
<PAGE>
SunAmerica Equity Funds
COMPARISONS: PORTFOLIOS vs. INDEXES
As required by the Securities and Exchange Commission, the following graphs
compare the performance of a $10,000 investment in the SunAmerica Equity Funds'
portfolios to a similar investment in an index. Please note that "inception" as
used herein reflects the date a Fund commenced operations without regard to
when a second class of shares was introduced. It is important to note that the
SunAmerica Equity Funds are professionally managed mutual funds while the
indices are not available for investment and are unmanaged. The comparison is
shown for illustrative purposes only. The graphs present the performance of the
class of that particular Fund which has been in existence the longest. The
performance of the other classes will vary based upon the difference in sales
charges and fees assessed to shareholders of that class.
Balanced Assets Fund
[GRAPH]
<TABLE>
<CAPTION>
Balanced Assets Class B S&P 500 (dividends reinvested) Lehman Bros. Int Gov't Index Lehman Bros. Aggregate Bond Index
----------------------- ------------------------------ ---------------------------- ---------------------------------
<S> <C> <C> <C> <C>
9/90 10,000 10,000 10,000 10,000
6/91 12,125 12,451 10,843 10,976
6/92 13,034 14,121 12,236 12,517
6/93 15,679 16,045 13,465 13,992
9/93 16,219 16,459 13,768 14,357
9/94 16,195 17,067 13,562 13,894
9/95 19,428 22,146 15,002 15,848
9/96 21,358 26,647 15,767 16,625
9/97 26,503 37,429 17,002 18,239
9/98 28,787 40,817 18,806 20,338
9/99 39,940 52,164 18,924 20,263
9/00 40,173 59,091 20,107 21,679
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Class A Class B Class II
-----------------------------------------------------------------------
SEC SEC SEC
Balanced Cumulative Average Cumulative Average Cumulative Average
Assets Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year Return 15.69% 9.04% 14.98% 10.98% 14.95% 12.81%
--------------------------------------------------------------------------------------
5 Year Return 113.30% 14.99% 106.78% 15.41% N/A N/A
--------------------------------------------------------------------------------------
10 Year Return N/A N/A 300.49% 14.88% N/A N/A
--------------------------------------------------------------------------------------
Since Inception* 159.74% 13.61% 578.57% 13.00% 16.05% 8.71%
--------------------------------------------------------------------------------------
</TABLE>
+ Traditional returns do not include sales load.
* Inception Date - Class A: 9/24/93; Class B: 1/29/85; Class II: 2/02/99
1 Ranking does not include sales charge and is based on total return
Fund charged its fiscal year end from June 30 as of September 24, 1993.
For the 12 month period ending September 30, 2000, SunAmerica Balanced Assets
Class B returned 10.98%, compared to 13.28% for the A&P 500 Index, 6.25% for
the Lehman Bros. Int. Gov't. Index and 6.99% for the Lehman Bros. Aggregated
Bond Index. (Past performance is quarantee of future results.)
This fiscal year was characterized by
tremendous volatility in both the
equity and fixed income markets, as
the monetary policy of the Federal
Reserve Board and the pace of U.S.
economic growth dominated financial
headlines. Overall, each of the major
equity indices ended the annual
period with double digit returns.
Bond returns were generally strong as
well, though more modest in
comparison. In such an environment,
the Balanced Assets Fund's higher
exposure to equities than the
traditional balanced fund led to its
outperformance of the Lehman
Intermediate Government Index and the
Lehman Aggregate Bond Index. All
share classes of your Fund also
outperformed the group average for
the twelve months ended September 30,
2000 and ranked in the top 25% among
its peers for its one-year, three-
year, five-year and ten-year
performance through the end of the
third calendar quarter (as tracked by
Lipper Analytical Services)/1/. Of
course, due to its fixed income
component, it underperformed the
S&P 500 Index, which is an unmanaged
index and not available as an
investment. However, the Fund's
neutral-to-the Index duration in its
high quality fixed income allocation
helped cushion the portfolio during
these uncertain times.
56
<PAGE>
SunAmerica Equity Funds
COMPARISONS: PORTFOLIOS vs. INDEXES -- (continued)
Blue Chip Growth Fund
[CHART]
<TABLE>
<CAPTION>
Blue Chip Growth Class B S&P 500 (dividends reinvested) Russell 1000 Index
------------------------ ------------------------------ ------------------
<S> <C> <C> <C>
9/90 10,000 10,000 10,000
12/90 10,086 10,896 10,954
12/91 13,096 14,217 14,572
12/92 14,204 15,299 15,889
9/93 17,016 16,459 17,203
9/94 16,708 17,067 17,637
9/95 20,135 22,146 22,926
9/96 22,787 26,647 27,445
9/97 30,084 37,429 38,223
9/98 31,395 40,817 41,036
9/99 42,525 52,164 52,103
9/00 56,898 59,091 61,383
</TABLE>
The Blue Chip Growth Fund significantly outperformed both the S&P 500 Index and
the Russell 1000 Index for the fiscal year, and all share classes ranked in the
top third of its Lipper category average/1/, primarily because of strong sector
positioning. Your Fund was overweighted in the technology sector throughout the
annual period, but we did reduce the Fund's weighting there during the second
half. The Fund also benefited from increased weightings in energy, healthcare,
and financial services, as these sectors began to rebound toward the end of the
first calendar quarter. We continue to believe the U.S.' moderate growth, low
inflationary environment is a favorable backdrop for blue chip companies.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Class A Class B Class II
-----------------------------------------------------------------------
SEC SEC SEC
Blue Chip Cumulative Average Cumulative Average Cumulative Average
Growth Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year Return 34.66% 26.92% 33.80% 29.80% 33.57% 31.23%
--------------------------------------------------------------------------------------
5 Year Return 192.02% 22.44% 182.58% 22.92% N/A N/A
--------------------------------------------------------------------------------------
10 Year Return N/A N/A 470.49 19.02% N/A N/A
--------------------------------------------------------------------------------------
Since Inception* 250.47% 18.67% 693.59% 14.25% 37.49% 20.37%
--------------------------------------------------------------------------------------
</TABLE>
+ Traditional returns do not include sales load.
* Inception Date - Class A: 10/08/93; Class B: 3/13/85; Class II: 2/02/99
1 Ranking does not include sales charges and is based on total return.
Fund changed its fiscal year end from December 31 to September 30 as of
September 24, 1993.
For the 12 month period ending September 30, 2000, SunAmerica "Blue Chip
Growth Class B returned 29.80%, compared to 13.28% for the S&P 500 Index and
17.81% for the Russell 1000 Index. (Past performance is no guarantee of future
results.)
57
<PAGE>
SunAmerica Equity Funds
COMPARISON: PORTFOLIOS vs. INDEXES -- (continued)
Growth Opportunities Fund
[CHART]
<TABLE>
<CAPTION>
Growth Opportunities Class A S&P 500 (dividends reinvested) Russell Mid Cap Growth Index Russell Mid Cap Index
---------------------------- ------------------------------ ---------------------------- ---------------------
<S> <C> <C> <C> <C>
9/90 9,425 10,000 10,000 10,000
11/90 9,830 10,601 10,863 10,617
11/91 12,899 12,757 16,174 14,092
11/92 15,651 15,114 17,667 17,754
9/93 18,846 16,459 21,241 20,570
9/94 17,038 17,067 21,757 20,910
9/95 22,066 22,146 28,212 26,574
9/96 24,918 26,647 32,819 30,837
9/97 30,286 37,429 42,550 41,648
9/98 29,014 40,817 38,559 39,145
9/99 44,223 52,164 52,907 46,759
9/00 89,349 59,091 84,847 61,544
</TABLE>
The Growth Opportunities Fund outperformed the S&P 500 Index, the S&P MidCap
400 Index, the Russell Midcap Growth Index and the Russell Midcap Index for the
twelve months ended September 30, 2000. Your Fund Class A also ranked in the
top decile among its peers for its one-year, three-year and five-year
performance through the end of the third calendar quarter (as tracked by Lipper
Analytical Services)/1/. Your Fund outperformed primarily because of its strong
growth bias. The Fund also benefited from outstanding sector positioning and
stock selection, focusing on companies producing double-digit top line and
bottom line growth rates trading at attractive valuations. We maintained
overweightings in the technology, energy, and healthcare sectors. While past
performance does not guarantee future results, mid-capitalization growth stocks
were the best performing U.S. equity sector for the fiscal year.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
Class A Class B Class II
-------------------------------------------------------------------------
SEC SEC SEC
Growth Cumulative Average Cumulative Average Cumulative Average
Opportunities Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year Return 102.04% 90.42% 100.58% 96.58% 100.44% 97.43%
----------------------------------------------------------------------------------------
5 Year Return 304.92% 30.72% 290.27% 31.17% N/A N/A
----------------------------------------------------------------------------------------
10 Year Return 836.54% 24.33% N/A N/A N/A N/A
----------------------------------------------------------------------------------------
Since Inception* 1,046.19% 19.01% 348.71% 23.93% 120.83% 60.05%
----------------------------------------------------------------------------------------
</TABLE>
+ Traditional returns do not include sales load.
* Inception Date - Class A: 01/28/87; Class B: 10/04/93; Class II: 2/02/99
1 Ranking does not include sales charge and is based on total return
Fund changed its fiscal year end from November 30 to September 30, as of
September 24, 1993.
For the 12 month period ending September 30, 2000, SunAmerica Growth
Opportunities Class A returned 90.42%, compared to 13.28% for the A&P 500
Index, 60.37% for the Russell Mid Cap Growth Index and 31.62% for the Russell
Mid Cap Index. (Past performance is no quarantee of future results.)
58
<PAGE>
SunAmerica Equity Funds
COMPARISON: PORTFOLIOS vs. INDEXES -- (continued)
NEW CENTURY FUND
[CHART]
NASDAQ
NEW CENTURY FUND RUSSELL 2000 COMPOSITE RUSSELL 2000 RUSSELL 3000
DATE CLASS A INDEX INDEX GROWTH INDEX GROWTH INDEX
9/90 9,425 10,000 10,000 10,000 10,000
11/90 9,915 9,929 10,422 10,307 10,604
11/91 15,086 13,734 15,207 14,900 13,136
11/92 18,751 16,650 18,946 17,126 15,742
9/93 23,548 19,689 22,140 19,436 17,449
9/94 21,726 19,945 22,185 19,607 17,896
9/95 32,588 24,171 30,291 25,132 23,141
9/96 38,893 27,388 35,613 28,302 27,542
9/97 46,998 36,429 48,929 34,910 38,193
9/98 35,247 29,544 49,164 26,242 39,965
9/99 53,929 35,204 79,709 34,805 50,484
9/00 93,189 43,517 106,603 45,128 59,667
The New Century Fund significantly outperformed the Russell 2000 Index, the
Russell 2000 Growth Index, the Russell 3000 Growth Index and the NASDAQ
Composite Index for the fiscal year. The Fund Class A also ranked in the top
third of its Lipper category average for the twelve months ended September 30,
2000/1/, primarily because of its growth-oriented strategy, its effective
sector allocation, and its emphasis on companies believed to be the leaders,
suppliers, and/or beneficiaries of trends in "New Economy" sectors.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Class A Class B Class II Class Z
-----------------------------------------------------------------------------------------------
SEC SEC SEC SEC
New Cumulative Average Cumulative Average Cumulative Average Cumulative Average
Century Traditional Annual Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return Return+ Return
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year Return 72.74% 62.81% 71.59% 67.59% 71.48% 68.76% 73.63% 73.63%
--------------------------------------------------------------------------------------------------------------
5 Year Return 185.75% 21.91% 176.93% 22.42% N/A N/A N/A N/A
--------------------------------------------------------------------------------------------------------------
10 Year Return 858.12% 24.68% N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------------------------------------------
Since Inception* 870.68% 17.57% 280.48% 20.97% 126.51% 35.47% 141.32% 24.75%
--------------------------------------------------------------------------------------------------------------
</TABLE>
+ Traditional returns do not include sales load.
* Inception Date - Class A: 1/28/87; Class B: 9/24/93; Class II: 2/02/98'
Class Z: 10/07/96
1 Ranking does not include sales charge and is based on total return/
Fund changed its fiscal year end from November 30 to September 30 as of
September 24, 1993.
For the 12 month period ending September 30, 2000, SunAmerica New Century
Class A returned 62.81%, compared to 23.61% for the Russell 2000 Index, 29.66%
for the Russell 2000 Growth Index, 33.74% for the NASDAQ Composite Index and
18.19% for the Russell 3000 Growth Index. (Past performance is no quarantee of
future results.)
59
<PAGE>
SunAmerica Equity Funds
COMPARISON: PORTFOLIOS vs. INDEXES -- (continued)
Growth and Income Fund
[GRAPH]
<TABLE>
<CAPTION>
Growth and Income Class A Growth and Income Class B S&P 500 (dividends reinvested)
------------------------- ----------------- --------------------------------------
<S> <C> <C> <C>
7/94 9,425 10,000 10,000
9/94 9,645 10,219 10,156
9/95 11,529 12,179 13,178
9/96 15,286 16,046 15,856
9/97 20,511 21,405 22,272
9/98 21,646 22,441 24,288
9/99 28,355 29,224 31,040
9/00 36,215 37,063 35,162
</TABLE>
The Growth and Income Fund notably outperformed both the S&P 500 Index and the
Lipper Large Cap Core Category for the twelve months ended September 30, 2000.
All Fund share classes also ranked in the top 15% among the Fund's peers for
one-year and three-year performance and in the top 2% for the Fund's five-year
performance through the end of the third calendar quarter (as tracked by Lipper
Analytical Services)/1/. Your Fund primarily benefited from a "barbell"
approach to stock selection, balancing the portfolio's holdings between growth
sectors, such as technology, and value sectors, such as energy and utilities.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Class A Class B Class II Class Z
-----------------------------------------------------------------------------------------------
SEC SEC SEC SEC
Growth and Cumulative Average Cumulative Average Cumulative Average Cumulative Average
Income Traditional Annual Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return Return+ Return
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year Return 27.64% 20.30% 26.74% 22.74% 26.78% 24.51% 28.29% 28.29%
--------------------------------------------------------------------------------------------------------------
5 Year Return 214.12% 24.24% 204.31% 24.76% N/A N/A N/A N/A
--------------------------------------------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------------------------------------------
Since Inception* 284.24% 22.87% 270.63% 23.31% 62.94% 19.69% 51.17% 18.29%
--------------------------------------------------------------------------------------------------------------
</TABLE>
+ Traditional returns do not include sales load.
* Inception Date - Class A: 7/01/94; Class B: 7/06/94; Class II: 2/02/98;
Class Z: 4/15/98
1 Ranking does not include sales charge and is based on total return.
For the 12 month period ending September 30, 2000, SunAmerica Growth and
Income Class B returned 22.74%, compared to 13.28% for the S&P 500 Index.
(Past performance is no quarantee of future results.)
60
<PAGE>
SunAmerica Equity Funds
COMPARISON: PORTFOLIOS vs. INDEXES -- (continued)
"Dogs" of Wall Street Fund
[GRAPH]
<TABLE>
<CAPTION>
"Dogs" of Wall "Dogs" of Wall "Dogs" of Wall S&P 500 Index Wilshire Large Cap Russell
Street Class A Class B Street Class II Street (dividends reinvested) Value Index 1000 Value Index
-------------- -------------- ---------------- ---------------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
6/8/98 9,425 10,000 9,900 10,000 10,000 10,000
6/98 9,199 9,752 9,654 10,170 10,049 9,941
9/98 8,339 8,824 8,736 9,158 8,735 8,790
12/98 9,418 9,957 9,857 11,109 10,241 10,249
3/99 9,702 9,176 9,084 11,662 10,337 10,396
6/99 10,051 10,585 10,480 12,484 11,543 11,568
9/99 9,045 9,514 9,419 11,704 10,383 10,434
12/99 8,718 9,161 9,069 13,445 11,087 11,001
3/00 7,827 8,207 8,125 13,754 11,068 11,054
6/00 7,537 7,894 8,091 13,388 10,456 10,535
9/00 7,770 7,878 8,041 13,259 11,326 11,363
</TABLE>
The "Dogs" of the Dow strategy offers a contrarian strategy in the current
market environment. While growth investing was preferred over value investing
during the Fund's annual period, the market is cyclical, and sectors that have
fallen out of favor historically have returned to favor and provided solid
returns. A glimpse of this was seen with the transition to value during the
third calendar quarter of 2000, when the "Dogs" of Wall Street Fund
outperformed the S&P 500 Index. We continue to believe that, over the long
term, every "Dog" will have its day.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Class A Class B Class II
-----------------------------------------------------------------------
SEC SEC SEC
"Dogs" of Cumulative Average Cumulative Average Cumulative Average
Wall Street Traditional Annual Traditional Annual Traditional Annual
Fund Return+ Return Return+ Return Return+ Return
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year Return -14.09% -19.03% -14.62% -18.62% -14.62% -16.48%
--------------------------------------------------------------------------------------
5 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------------------
Since Inception* -17.55% -10.32% -18.77% -10.06% -18.77% -8.98%
--------------------------------------------------------------------------------------
</TABLE>
+ Traditional returns do not include sales load.
* Inception Date - Class A: 6/08/98; Class B: 6/08/98; Class II: 6/08/98
For the 12 month period ending September 30, 2000, SunAmerica "Dogs" of Wall
Street Class A returned -19.03%, Class B returned -18.62%, Class II returned
-16.48%, compared to 13.28% for the S&P 500 Index, 8.32% for the Wilshire
Large Cap Value Index and 7.86% for the Russell 1000 Value Index. (Past
performance is no guarantee of future results.)
61
<PAGE>
[LOGO]SunAmerica
Mutual Funds
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Trustees
S. James Coppersmith
Samuel M. Eisenstat
Stephen J. Gutman
Peter A. Harbeck
Sebastiano Sterpa
Officers
Peter A. Harbeck, President
Donna Calder, Vice President
Brian Clifford, Vice President
Francis D. Gannon, Vice President
Nancy Kelly, Vice President
J. Steven Neamtz, Vice President
Robert M. Zakem, Secretary
Peter C. Sutton, Treasurer
Peter E. Pisapia, Assistant Secretary
Abbe P. Stein, Assistant Secretary
Laura E. Filippone, Assistant Treasurer
Donna M. Handel, Assistant Treasurer
Cheryl L. Hawthorne, Assistant Treasurer
Investment Adviser
SunAmerica Asset Management Corp.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Distributor
SunAmerica Capital Services, Inc.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Shareholder Servicing Agent
SunAmerica Fund Services, Inc.
The SunAmerica Center
733 Third Avenue
New York, NY 10017-3204
Custodian and Transfer Agent
State Street Bank and Trust Company
P.O. Box 419572
Kansas City, MO 64141-6572
This report is submitted solely for the general information of shareholders of
the Fund. Distribution of this report to persons other than shareholders of the
Fund is authorized only in connection with a currently effective prospectus,
setting forth details of the Fund, which must precede or accompany this report.
Distributed by:
SunAmerica Capital Services, Inc.
[LOGO OF AIG] Member of American International Group, Inc.
INSAN-9/00
