<PAGE> 1
SUNAMERICA SERIES TRUST
Supplement to the Prospectus dated April 20, 2000
The date of the Prospectus is hereby changed to December 29, 2000.
This supplement should be read in conjunction with the Trust's Prospectus dated
April 20, 2000. Capitalized terms used herein have the same meaning as in the
Prospectus.
Dated: December 29, 2000
<PAGE> 2
Effective July 5, 2000, the UTILITY PORTFOLIO was renamed the TELECOM UTILITY
PORTFOLIO. All references to such Portfolio in the Prospectus are hereby changed
accordingly.
PERFORMANCE INFORMATION
The following supplements the information accompanying the Risk/Return Bar
Charts under the "TRUST HIGHLIGHTS" section of the Prospectus.
The following is the year-to-date return information as of the most recent
calendar quarter ended September 30, 2000:
<TABLE>
<CAPTION>
PORTFOLIO RETURN
--------- ------
<S> <C>
Cash Management Portfolio.................................. 4.41%
Corporate Bond Portfolio................................... 3.96%
Global Bond Portfolio...................................... 5.00%
High-Yield Bond Portfolio.................................. -1.24%
Worldwide High Income Portfolio............................ 0.94%
SunAmerica Balanced Portfolio.............................. 0.41%
MFS Total Return Portfolio................................. 10.55%
Asset Allocation Portfolio................................. 2.74%
Telecom Utility Portfolio.................................. -0.56%
Growth-Income Portfolio.................................... 2.95%
Federated Value Portfolio.................................. 0.60%
Davis Venture Value Portfolio.............................. 8.29%
"Dogs" of Wall Street Portfolio............................ -10.04%
Alliance Growth Portfolio.................................. -3.70%
MFS Growth and Income Portfolio............................ 2.44%
Putnam Growth Portfolio.................................... -3.83%
Real Estate Portfolio...................................... 18.27%
Aggressive Growth Portfolio................................ 10.66%
International Growth and Income Portfolio.................. 3.71%
Global Equities Portfolio.................................. -6.06%
International Diversified Equities Portfolio............... -15.06%
Emerging Markets Portfolio................................. -24.26%
</TABLE>
2
<PAGE> 3
The following replaces the fee information under the "MANAGEMENT -- INVESTMENT
ADVISER AND MANAGER" section of the Prospectus:
For the fiscal year ended January 31, 2000, each Portfolio paid SAAMCo a fee
equal to the following percentage of average daily net assets:
<TABLE>
<CAPTION>
PORTFOLIO FEE
--------- ----
<S> <C>
Cash Management Portfolio................................... 0.49%
Corporate Bond Portfolio.................................... 0.62%
Global Bond Portfolio....................................... 0.69%
High-Yield Bond Portfolio................................... 0.62%
Worldwide High Income Portfolio............................. 1.00%
SunAmerica Balanced Portfolio............................... 0.62%
MFS Total Return Portfolio.................................. 0.66%
Asset Allocation Portfolio.................................. 0.58%
Telecom Utility Portfolio................................... 0.75%
Growth-Income Portfolio..................................... 0.53%
Federated Value Portfolio................................... 0.71%
Davis Venture Value Portfolio............................... 0.71%
"Dogs" of Wall Street Portfolio............................. 0.60%
Alliance Growth Portfolio................................... 0.60%
MFS Growth and Income Portfolio............................. 0.70%
Putnam Growth Portfolio..................................... 0.76%
Real Estate Portfolio....................................... 0.80%
Aggressive Growth Portfolio................................. 0.70%
International Growth and Income Portfolio................... 0.98%
Global Equities Portfolio................................... 0.72%
International Diversified Equities Portfolio................ 1.00%
Emerging Markets Portfolio.................................. 1.25%
</TABLE>
For the period April 1,1999 (commencement of operations) through January 31,
2000, the MFS MID-CAP GROWTH PORTFOLIO paid SAAMCo a fee equal to 0.75% of the
Portfolio's average daily net assets.
INFORMATION ABOUT THE SUBADVISERS
The following supplements the information under the "MANAGEMENT -- INFORMATION
ABOUT THE SUBADVISERS" section of the Prospectus:
BANC OF AMERICA CAPITAL MANAGEMENT, INC. (BACAP) is located at One Bank of
America Plaza, Charlotte, NC 28255. BACAP and its affiliates, dedicated to
providing responsible investment management and superior management and superior
service, manage money for foundations, universities, corporation, institutions
and individuals. SAAMCo has hired BCAP to serve as subadviser for the CASH
MANAGEMENT PORTFOLIO effective December 29, 2000.
3
<PAGE> 4
PORTFOLIO MANAGEMENT
The following replaces the information under the "MANAGEMENT -- PORTFOLIO
MANAGEMENT" section of the Prospectus with respect to the CASH MANAGEMENT,
CORPORATE BOND, GLOBAL BOND, TELECOM UTILITY and MFS TOTAL RETURN PORTFOLIOS.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Management BACAP - Taxable Money Market N/A
Management Team
-----------------------------------------------------------------------------------------------------------------
Corporate Bond Portfolio Federated - Joseph M. Balestrino Mr. Balestrino joined
Co-Portfolio Manager and Federated in 1986 as a
Senior Vice President Project Manager in the
Product Design
Department and became
an Assistant Vice
President and
Investment Analyst in
1991. He became a Vice
President and portfolio
manager in 1995 and a
Senior Vice President
in 1998.
- Mark E. Durbiano Mr. Durbiano joined
Co-Portfolio Manager Federated in 1982 as an
Senior Vice President Investment Analyst and
became a Vice President
and portfolio manager
in 1988. He has been a
Senior Vice President
since 1996.
- Christopher J. Smith Mr. Smith joined
Co-Portfolio Manager and Federated in 1995 as a
Vice President Portfolio Manager and
Vice President. Prior
to joining Federated,
he was an Assistant
Vice President at
Provident Life &
Accident Insurance
Company from 1987
through 1994.
-----------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Bond Portfolio GSAM-International - Stephen C. Fitzgerald Mr. Fitzgerald,
Senior Portfolio Manager Managing Director and
Chief Investment
Officer for
International Fixed
Income in the London
office since November
1998, joined
GSAM-International in
1992 as an Executive
Director and Portfolio
Manager.
- Andrew F. Wilson Mr. Wilson, a Managing
Senior Portfolio Manager Director and senior
portfolio manager for
international fixed
income in the London
office, joined
GSAM-International in
December 1995 as an
Executive Director and
portfolio manager.
-----------------------------------------------------------------------------------------------------------------
Telecom Utility Portfolio Federated - Adrian G. Davies Mr. Davies joined
Senior Investment Analyst Federated in August
and Portfolio Manager 1999 as an Investment
Analyst and was named
Senior Investment
Analyst/ Portfolio
Manager in August 2000.
Prior to joining
Federated, Mr. Davies
was an Investment
Analyst/ Manager with
Shenyin Wanguo
Securities (H.K.) Ltd.
from 1994 through 1997.
- John L. Nichol Mr. Nichol joined
Assistant Vice President Federated in September
and Senior Investment 2000 as an Assistant
Analyst Vice President/ Senior
Investment Analyst.
Prior to joining
Federated, Mr. Nichol
was a portfolio manager
for the Public
Employees Retirement
System of Ohio from
1992 through August
2000.
-----------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 6
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MFS Total Return Portfolio MFS - David M. Calabro Mr. Calabro joined MFS
Senior Vice President and in 1992 as a Vice
Portfolio Manager President and equity
analyst. He became a
portfolio manager in
1993 and was promoted
to Senior Vice
President in 1998.
- David S. Kennedy Mr. Kennedy, manager of
Senior Vice President and the Portfolio's fixed
Portfolio Manager income securities,
joined MFS in 2000 as a
Senior Vice President
and Portfolio Manager.
Prior to joining MFS,
Mr. Kennedy was a fixed
income portfolio
manager and research
analyst with Harbor
Capital Management
Company from 1994 to
2000.
- Constantinos G. Mokas Mr. Mokas, manager of
Vice President and the Portfolio's equity
Portfolio Manager portion, joined MFS in
1990 as a research
analyst. He was
promoted to Assistant
Vice President in 1994,
Vice President in 1996
and portfolio manager
in 1998.
- Lisa B. Nurme Ms. Nurme, a manager of
Senior Vice President and the Portfolio's equity
Portfolio Manager portion, became a
portfolio manager in
1995 and was promoted
to Senior Vice
President in 1998.
- Kenneth J. Enright Mr. Enright, a manager
Vice President and of the Portfolio's
Portfolio Manager equity portion, joined
MFS in 1986 as a
research analyst. He
became an Assistant
Vice President in 1987,
Vice President in 1988,
and portfolio manager
in 1993.
-----------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 7
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The following supplements the information under the "FINANCIAL HIGHLIGHTS"
section of the Prospectus:
The following Financial Highlights tables for each Portfolio are intended to
help you understand the Portfolios' financial performance for the past 5 years.
Certain information reflects financial results for a single Portfolio share. The
total returns in each table represent the rate that an investor would have
earned on an investment in the Portfolio (assuming reinvestment of all dividends
and distributions). This information, except for the six month period ended July
31, 2000, has been audited by PricewaterhouseCoopers LLP, whose report, along
with each Portfolio's financial statements, are included in the Trust's annual
report to shareholders, which is available upon request.
7
<PAGE> 8
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS(CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL
ASSET INVEST- NET REALIZED & FROM
VALUE MENT UNREALIZED GAIN INVEST-
PERIOD BEGINNING INCOME (LOSS) ON MENT
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Management Portfolio
11/30/95 $10.47 $0.56 $ 0.01 $ 0.57
11/30/96 10.70 0.53 (0.02) 0.51
11/30/97 10.76 0.53 0.01 0.54
11/30/98 10.74 0.54 (0.02) 0.52
1/31/99# 10.58 0.08 0.01 0.09
1/31/00 10.67 0.51 -- 0.51
7/31/00+ 10.94 0.31 0.01 0.32
Corporate Bond Portfolio
11/30/95 9.75 0.60 1.00 1.60
11/30/96 10.82 0.65 0.03 0.68
11/30/97 11.09 0.77 0.21 0.98
11/30/98 11.54 0.77 (0.02) 0.75
1/31/99# 11.83 0.12 0.04 0.16
1/31/00 11.99 0.81 (1.15) (0.34)
7/31/00+ 11.12 0.45 (0.16) 0.29
Global Bond Portfolio
11/30/95 9.83 0.60 0.97 1.57
11/30/96 11.02 0.59 0.54 1.13
11/30/97 11.40 0.52 0.38 0.90
11/30/98 11.51 0.49 0.78 1.27
1/31/99# 11.77 0.07 0.11 0.18
1/31/00 11.95 0.42 (0.66) (0.24)
7/31/00+ 10.83 0.24 0.19 0.43
High-Yield Bond Portfolio
11/30/95 10.32 1.11 0.12 1.23
11/30/96 10.53 0.98 0.48 1.46
11/30/97 11.04 1.04 0.48 1.52
11/30/98 11.82 1.14 (1.24) (0.10)
1/31/99# 10.98 0.18 (0.02) 0.16
1/31/00 11.14 1.09 (0.55) 0.54
7/31/00+ 10.54 0.57 (0.56) 0.01
Worldwide High Income Portfolio
11/30/95 9.95 1.10 0.47 1.57
11/30/96 11.42 1.25 1.60 2.85
11/30/97 13.35 0.98 0.68 1.66
11/30/98 13.20 1.07 (2.61) (1.54)
1/31/99# 10.31 0.16 (0.35) (0.19)
1/31/00 10.12 1.13 0.67 1.80
7/31/00+ 10.59 0.57 (0.33) 0.24
<CAPTION>
DIVIDENDS NET NET
DIVIDENDS FROM NET ASSET ASSETS
DECLARED FROM REALIZED VALUE END OF
PERIOD NET INVESTMENT GAIN ON END OF TOTAL PERIOD
ENDED INCOME INVESTMENTS PERIOD RETURN*** (000'S)
-------------------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash Management Portfolio
11/30/95 $ (0.34) $ -- $10.70 5.59% $ 90,731
11/30/96 (0.45) -- 10.76 4.92 91,247
11/30/97 (0.56) -- 10.74 5.22 156,119
11/30/98 (0.68) -- 10.58 5.05 223,640
1/31/99# -- -- 10.67 0.85 277,370
1/31/00 (0.24) -- 10.94 4.85 466,588
7/31/00+ -- -- 11.26 2.93 481,159
Corporate Bond Portfolio
11/30/95 (0.53) -- 10.82 17.01 29,475
11/30/96 (0.41) -- 11.09 6.51 37,207
11/30/97 (0.53) -- 11.54 9.26 62,272
11/30/98 (0.46) -- 11.83 6.61 143,561
1/31/99# -- -- 11.99 1.35 158,804
1/31/00 (0.53) -- 11.12 (2.75) 184,309
7/31/00+ -- -- 11.41 2.61 184,460
Global Bond Portfolio
11/30/95 (0.38) -- 11.02 16.40 59,759
11/30/96 (0.75) -- 11.40 10.94 68,221
11/30/97 (0.75) (0.04) 11.51 8.43 89,043
11/30/98 (0.79) (0.22) 11.77 11.75 115,428
1/31/99# -- -- 11.95 1.53 122,306
1/31/00 (0.47) (0.41) 10.83 (1.86) 127,145
7/31/00+ -- -- 11.26 3.97 129,086
High-Yield Bond Portfolio
11/30/95 (1.02) -- 10.53 12.64 82,174
11/30/96 (0.95) -- 11.04 14.86 113,229
11/30/97 (0.74) -- 11.82 14.53 195,639
11/30/98 (0.66) (0.08) 10.98 (1.26) 284,580
1/31/99# -- -- 11.14 1.46 293,037
1/31/00 (1.14) -- 10.54 5.09 310,032
7/31/00+ -- -- 10.55 0.09 300,329
Worldwide High Income Portfolio
11/30/95 (0.10) -- 11.42 16.02 21,515
11/30/96 (0.87) (0.05) 13.35 26.87 49,204
11/30/97 (0.90) (0.91) 13.20 14.17 125,224
11/30/98 (0.61) (0.74) 10.31 (13.74) 121,290
1/31/99# -- -- 10.12 (1.84) 116,977
1/31/00 (1.33) -- 10.59 19.22 124,404
7/31/00+ -- -- 10.83 2.27 121,275
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME TO
PERIOD AVERAGE NET AVERAGE NET PORTFOLIO
ENDED ASSETS ASSETS TURNOVER
-------------------------------------------------- ------------------------------------------
<S> <C> <C> <C>
Cash Management Portfolio
11/30/95 0.67% 5.32% --%
11/30/96 0.62 4.90 --
11/30/97 0.63 5.06 --
11/30/98 0.58 4.97 --
1/31/99# 0.62+ 5.02+ --
1/31/00 0.53 4.82 --
7/31/00+ 0.53+ 5.71+ --
Corporate Bond Portfolio
11/30/95 0.96++ 5.93++ 412
11/30/96 0.97 6.11 338
11/30/97 0.91 6.99 49
11/30/98 0.77 6.61 15
1/31/99# 0.80+ 6.16+ 4
1/31/00 0.71 7.05 37
7/31/00+ 0.69+ 8.02+ 19
Global Bond Portfolio
11/30/95 0.95 5.89 339
11/30/96 0.89 5.44 223
11/30/97 0.90 4.70 360
11/30/98 0.85 4.27 210
1/31/99# 0.97+ 3.65+ 30
1/31/00 0.84 3.68 189
7/31/00+ 0.81+@ 4.30+@ 104
High-Yield Bond Portfolio
11/30/95 0.80 10.80 174
11/30/96 0.77 9.41 107
11/30/97 0.75 9.26 243
11/30/98 0.69 9.75 128
1/31/99# 0.72+ 9.71+ 17
1/31/00 0.67 10.00 105
7/31/00+ 0.69+@ 10.76+@ 57
Worldwide High Income Portfolio
11/30/95 1.30 10.46 176
11/30/96 1.18 10.45 177
11/30/97 1.10 7.58 146
11/30/98 1.08@ 8.90@ 158
1/31/99# 1.11+@ 9.57+@ 12
1/31/00 1.12@ 10.68@ 116
7/31/00+ 1.10+@ 10.60+@ 73
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
@ Net of custody credits of 0.01%, 0.01%, 0.02%, and 0.01% for the periods
ending November 30, 1998, January 31, 1999, January 31, 2000, and July
31, 2000 respectively.
+ Unaudited
++ During the below stated periods, the investment adviser waived a
portion of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio
of net investment income (loss) to average net assets would have been
as follows:
<TABLE>
<CAPTION>
EXPENSES
--------------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
--------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash Management.............. 0.67% 0.62% 0.63% 0.58% 0.62% 0.53% 0.53%
Corporate Bond............... 0.97 0.97 0.91 0.77 0.80 0.71 0.69
Global Bond.................. 0.95 0.89 0.90 0.85 0.97 0.84 0.81
High-Yield Bond.............. 0.80 0.77 0.75 0.69 0.72 0.67 0.69
Worldwide High Income........ 1.30 1.18 1.10 1.08 1.11 1.12 1.10
<CAPTION>
NET INVESTMENT INCOME (LOSS)
--------------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
--------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash Management.............. 5.32% 4.90% 5.06% 4.97% 5.02% 4.82% 5.71%
Corporate Bond............... 5.92 6.11 6.99 6.61 6.16 7.05 8.02
Global Bond.................. 5.89 5.44 4.70 4.27 3.65 3.68 4.30
High-Yield Bond.............. 10.80 9.41 9.26 9.75 9.71 10.00 10.76
Worldwide High Income........ 10.46 10.45 7.58 8.90 9.57 10.68 10.60
</TABLE>
8
<PAGE> 9
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS(CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL
ASSET INVEST- NET REALIZED & FROM
VALUE MENT UNREALIZED GAIN INVEST-
PERIOD BEGINNING INCOME (LOSS) ON MENT
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SunAmerica Balanced Portfolio
6/3/96-
11/30/96 $10.00 $0.10 $ 1.03 $ 1.13
11/30/97 11.13 0.23 2.15 2.38
11/30/98 13.45 0.30 2.33 2.63
1/31/99# 15.61 0.05 1.58 1.63
1/31/00 17.24 0.36 1.80 2.16
7/31/00+ 19.06 0.18 0.26 0.44
MFS Total Return Portfolio
11/30/95 9.96 0.34 2.23 2.57
11/30/96 12.48 0.34 1.31 1.65
11/30/97 13.63 0.37 1.39 1.76
11/30/98 14.75 0.36 1.56 1.92
1/31/99# 14.96 0.06 0.82 0.88
1/31/00 15.84 0.48 (0.38) 0.10
7/31/00+ 13.88 0.25 0.83 1.08
Asset Allocation Portfolio
11/30/95 10.32 0.42 2.24 2.66
11/30/96 12.74 0.48 2.00 2.48
11/30/97 14.52 0.44 2.55 2.99
11/30/98 16.21 0.48 0.08 0.56
1/31/99# 14.81 0.07 0.15 0.22
1/31/00 15.03 0.40 0.37 0.77
7/31/00+ 14.52 0.20 0.52 0.72
Telecom Utility Portfolio
6/3/96-
11/30/96 10.00 0.24 0.51 0.75
11/30/97 10.75 0.36 1.91 2.27
11/30/98 12.91 0.42 1.62 2.04
1/31/99# 14.46 0.08 0.03 0.11
1/31/00 14.57 0.48 0.23 0.71
7/31/00+ 14.42 0.19 (1.03) (0.84)
<CAPTION>
DIVIDENDS NET NET
DIVIDENDS FROM NET ASSET ASSETS
DECLARED FROM REALIZED VALUE END OF
PERIOD NET INVESTMENT GAIN ON END OF TOTAL PERIOD
ENDED INCOME INVESTMENTS PERIOD RETURN*** (000'S)
--------------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SunAmerica Balanced Portfolio
6/3/96-
11/30/96 $ -- $ -- $11.13 11.30% $ 10,224
11/30/97 (0.04) (0.02) 13.45 21.48 44,621
11/30/98 (0.11) (0.36) 15.61 19.81 149,242
1/31/99# -- -- 17.24 10.44 194,878
1/31/00 (0.12) (0.22) 19.06 12.76 509,054
7/31/00+ -- -- 19.50 2.31 586,483
MFS Total Return Portfolio
11/30/95 (0.05) -- 12.48 25.89 32,429
11/30/96 (0.19) (0.31) 13.63 13.75 70,021
11/30/97 (0.23) (0.41) 14.75 13.52 95,721
11/30/98 (0.31) (1.40) 14.96 13.54 131,440
1/31/99# -- -- 15.84 5.88 145,332
1/31/00 (0.29) (1.77) 13.88 0.29 208,919
7/31/00+ -- -- 14.96 7.78 233,156
Asset Allocation Portfolio
11/30/95 (0.20) (0.04) 12.74 26.10 199,836
11/30/96 (0.31) (0.39) 14.52 20.27 316,388
11/30/97 (0.40) (0.90) 16.21 21.97 526,585
11/30/98 (0.35) (1.61) 14.81 2.85 713,045
1/31/99# -- -- 15.03 1.49 724,516
1/31/00 (0.48) (0.80) 14.52 5.51 699,063
7/31/00+ -- -- 15.24 4.96 687,361
Telecom Utility Portfolio
6/3/96-
11/30/96 -- -- 10.75 7.50 6,299
11/30/97 (0.09) (0.02) 12.91 21.26 24,366
11/30/98 (0.16) (0.33) 14.46 15.98 68,049
1/31/99# -- -- 14.57 0.76 77,323
1/31/00 (0.24) (0.62) 14.42 5.01 120,159
7/31/00+ -- -- 13.58 (5.83) 115,086
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME TO
PERIOD AVERAGE NET AVERAGE NET PORTFOLIO
ENDED ASSETS ASSETS TURNOVER
--------------------------------------------- --------------------------------------
<S> <C> <C> <C>
SunAmerica Balanced Portfolio
6/3/96-
11/30/96 1.00%+++ 1.92%+++ 40%
11/30/97 1.00 1.82 143
11/30/98 0.78 2.10 111
1/31/99# 0.74+@ 1.73+@ 26
1/31/00 0.66 2.01 197
7/31/00+ 0.64+ 1.89+ 131
MFS Total Return Portfolio
11/30/95 0.98++ 3.08++ 153
11/30/96 0.84 2.74 194
11/30/97 0.82 2.63 271
11/30/98 0.77 2.43 106
1/31/99# 0.81+ 2.40+ 86
1/31/00 0.75@ 3.18@ 116
7/31/00+ 0.72+@ 3.53+@ 52
Asset Allocation Portfolio
11/30/95 0.81 3.62 207
11/30/96 0.74 3.66 200
11/30/97 0.68 2.88 176
11/30/98 0.64 3.15 156
1/31/99# 0.66+ 2.60+ 30
1/31/00 0.63 2.70 191
7/31/00+ 0.63+ 2.71+ 61
Telecom Utility Portfolio
6/3/96-
11/30/96 1.05+++ 4.41+++ 24
11/30/97 1.05++ 3.15++ 77
11/30/98 1.01 3.04 72
1/31/99# 0.93+ 3.02+ 12
1/31/00 0.84 3.31 121
7/31/00+ 0.83+@ 2.72+@ 56
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
@ Net of custody credits of 0.01%
+ Unaudited
++ During the below stated periods, the investment adviser waived a
portion of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio
of net investment income (loss) to average net assets would have been
as follows:
<TABLE>
<CAPTION>
EXPENSES
----------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------
SunAmerica Balanced....... --% 1.43% 1.00% 0.78% 0.74% 0.66% 0.64%
MFS Total Return.......... 1.11 0.84 0.82 0.77 0.81 0.75 0.72
Asset Allocation.......... 0.81 0.74 0.68 0.64 0.66 0.63 0.63
Telecom Utility........... -- 1.93 1.24 1.01 0.93 0.84 0.83
<CAPTION>
NET INVESTMENT INCOME (LOSS)
----------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------
SunAmerica Balanced....... --% 1.49% 1.82% 2.10% 1.73% 2.01% 1.89%
MFS Total Return.......... 2.95 2.74 2.63 2.43 2.40 3.18 3.53
Asset Allocation.......... 3.62 3.66 2.88 3.15 2.60 2.70 2.71
Telecom Utility........... -- 3.53 2.96 3.04 3.02 3.31 2.72
</TABLE>
9
<PAGE> 10
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS(CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS
ASSET INVEST- NET REALIZED & FROM DIVIDENDS FROM NET
VALUE MENT UNREALIZED GAIN INVEST- DECLARED FROM REALIZED
PERIOD BEGINNING INCOME (LOSS) ON MENT NET INVESTMENT GAIN ON
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth-Income Portfolio
11/30/95 10.33 0.17 3.31 3.48 (0.10) --
11/30/96 13.71 0.18 3.48 3.66 (0.12) (0.43)
11/30/97 16.82 0.17 4.69 4.86 (0.13) (0.73)
11/30/98 20.82 0.17 4.33 4.50 (0.13) (0.96)
1/31/99# 24.23 0.02 3.63 3.65 -- --
1/31/00 27.88 0.16 4.75 4.91 (0.15) (1.40)
7/31/00+ 31.24 0.07 1.81 1.88 -- --
Federated Value Portfolio
6/3/96-
11/30/96 10.00 0.07 1.01 1.08 -- --
11/30/97 11.08 0.13 2.72 2.85 (0.03) --
11/30/98 13.90 0.17 2.35 2.52 (0.06) (0.30)
1/31/99# 16.06 0.02 0.54 0.56 -- --
1/31/00 16.62 0.20 (0.14) 0.06 (0.12) (0.69)
7/31/00+ 15.87 0.16 (0.28) (0.12) -- --
Davis Venture Value Portfolio
11/30/95 9.78 0.17 3.55 3.72 (0.03) --
11/30/96 13.47 0.18 3.46 3.64 (0.09) (0.12)
11/30/97 16.90 0.19 4.73 4.92 (0.09) (0.26)
11/30/98 21.47 0.20 2.23 2.43 (0.12) (0.68)
1/31/99# 23.10 0.03 1.25 1.28 -- --
1/31/00 24.38 0.13 3.06 3.19 (0.20) (0.93)
7/31/00+ 26.44 0.05 1.91 1.96 -- --
"Dogs" of Wall Street Portfolio
4/1/98-
11/30/98 10.00 0.11 (0.30) (0.19) -- --
1/31/99# 9.81 0.02 (0.23) (0.21) -- --
1/31/00 9.60 0.21 (1.12) (0.91) (0.05) (0.26)
7/31/00+ 8.38 0.11 (0.63) (0.52) -- --
<CAPTION>
NET NET RATIO OF NET
ASSET ASSETS RATIO OF INVESTMENT
VALUE END OF EXPENSES TO INCOME TO
PERIOD END OF TOTAL PERIOD AVERAGE NET AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN*** (000'S) ASSETS ASSETS TURNOVER
-------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth-Income Portfolio
11/30/95 13.71 33.89 171,281 0.77 1.42 59
11/30/96 16.82 27.41 325,463 0.72 1.21 82
11/30/97 20.82 30.11 622,062 0.65 0.89 44
11/30/98 24.23 21.91 1,019,590 0.60 0.78 53
1/31/99# 27.88 15.06 1,206,113 0.60+ 0.55+ 16
1/31/00 31.24 18.37 1,828,340 0.56 0.56 43
7/31/00+ 33.12 6.02 2,035,720 0.56+ 0.41+ 20
Federated Value Portfolio
6/3/96-
11/30/96 11.08 10.80 12,460 1.05+++ 1.26+++ 30
11/30/97 13.90 25.75 59,024 1.03 1.03 46
11/30/98 16.06 18.22 145,900 0.83 1.13 51
1/31/99# 16.62 3.49 159,176 0.86+ 0.75+ 4
1/31/00 15.87 0.17 208,488 0.77 1.17 34
7/31/00+ 15.75 (0.76) 207,851 0.76+ 2.05+ 25
Davis Venture Value Portfolio
11/30/95 13.47 38.17 154,908 1.00++ 1.43++ 18
11/30/96 16.90 27.44 516,413 0.85 1.21 22
11/30/97 21.47 29.62 1,140,053 0.79 0.98 22
11/30/98 23.10 11.36 1,725,411 0.75 0.89 25
1/31/99# 24.38 5.54 1,840,354 0.77+ 0.86+ 5
1/31/00 26.44 13.42 2,303,994 0.74 0.51 23
7/31/00+ 28.40 7.41 2,557,943 0.75+ 0.39+ 19
"Dogs" of Wall Street Portfolio
4/1/98-
11/30/98 9.81 (1.90) 65,283 0.85+++ 2.04+++ --
1/31/99# 9.60 (2.14) 78,062 0.85+ 0.93+ 58
1/31/00 8.38 (10.02) 98,924 0.67 2.11 51
7/31/00+ 7.86 (6.21) 80,186 0.73+ 2.80+ --
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
+ Unaudited
++ During the below stated periods, the investment adviser waived a
portion of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio
of net investment income (loss) to average net assets would have been
as follows:
<TABLE>
<CAPTION>
EXPENSES
-----------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------
Growth-Income........... 0.77 0.72 0.65 0.60 0.60 0.56 0.56
Federated Value......... -- 1.57 1.03 0.83 0.86 0.77 0.76
Davis Venture Value..... 1.02 0.85 0.79 0.75 0.77 0.74 0.75
"Dogs" of Wall Street... -- -- -- 0.92 0.85 0.67 0.73
<CAPTION>
NET INVESTMENT INCOME (LOSS)
-----------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------
Growth-Income........... 1.42 1.21 0.89 0.78 0.56 0.56 0.41
Federated Value......... -- 0.74 1.03 1.13 0.75 1.17 2.05
Davis Venture Value..... 1.41 1.21 0.98 0.89 0.86 0.51 0.39
"Dogs" of Wall Street... -- -- -- 1.97 0.93 2.11 2.80
</TABLE>
10
<PAGE> 11
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS(CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS DIVIDENDS
ASSET INVEST- NET REALIZED FROM DECLARED FROM FROM NET
VALUE MENT & UNREALIZED INVEST- NET REALIZED
PERIOD BEGINNING INCOME GAIN (LOSS) ON MENT INVESTMENT GAIN ON
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Growth Portfolio
11/30/95 $10.64 $ 0.07 $ 5.08 $ 5.15 $ (0.03) $(0.13)
11/30/96 15.63 0.08 4.07 4.15 (0.04) (1.01)
11/30/97 18.73 0.16 4.76 4.92 (0.05) (1.04)
11/30/98 22.56 0.07 7.77 7.84 (0.06) (2.30)
1/31/99# 28.04 0.00 7.22 7.22 -- --
1/31/00 35.26 (0.04) 4.46 4.42 (0.05) (3.05)
7/31/00+ 36.58 (0.03) 2.45 2.42 -- --
MFS Growth and Income Portfolio
11/30/95 10.01 0.12 3.14 3.26 (0.13) --
11/30/96 13.14 0.11 2.16 2.27 (0.11) (0.91)
11/30/97 14.39 0.11 2.48 2.59 (0.10) (1.26)
11/30/98 15.62 0.02 2.61 2.63 (0.12) (2.76)
1/31/99# 15.37 0.01 1.60 1.61 -- --
1/31/00 16.98 0.10 0.11 0.21 (0.03) (3.81)
7/31/00+ 13.35 0.04 0.36 0.40 -- --
Putnam Growth Portfolio
11/30/95 10.05 (0.01) 3.09 3.08 (0.03) --
11/30/96 13.10 -- 2.61 2.61 -- --
11/30/97 15.71 0.03 3.93 3.96 -- (0.52)
11/30/98 19.15 0.01 4.15 4.16 (0.02) (3.08)
1/31/99# 20.21 (0.01) 3.33 3.32 -- --
1/31/00 23.53 (0.02) 3.76 3.74 (0.01) (0.78)
7/31/00+ 26.48 (0.02) 0.61 0.59 -- --
<CAPTION>
NET NET RATIO OF NET
ASSET ASSETS RATIO OF INVESTMENT
VALUE END OF EXPENSES TO INCOME TO
PERIOD END OF TOTAL PERIOD AVERAGE NET AVERAGE PORTFOLIO
ENDED PERIOD RETURN*** (000'S) ASSETS NET ASSETS TURNOVER
--------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Growth Portfolio
11/30/95 $15.63 48.91% $ 167,870 0.79% 0.51% 138%
11/30/96 18.73 28.05 381,367 0.71 0.51 121
11/30/97 22.56 27.80 704,533 0.65 0.37 110
11/30/98 28.04 35.92 1,396,140 0.58 0.27 90
1/31/99# 35.26 25.75 1,864,924 0.63+ (0.01)+ 11
1/31/00 36.58 14.09 2,875,413 0.63 (0.11) 77
7/31/00+ 39.00 6.62 3,181,338 0.64+ (0.14)+ 42
MFS Growth and Income Portfolio
11/30/95 13.14 32.92 149,910 0.76 1.01 229
11/30/96 14.39 18.40 186,368 0.74 0.82 164
11/30/97 15.62 19.78 218,496 0.73 0.77 217
11/30/98 15.37 17.82 238,298 0.70 0.17 105
1/31/99# 16.98 10.47 266,069 0.75+ 0.38+ 76
1/31/00 13.35 1.77 337,222 0.75 0.66 64
7/31/00+ 13.75 3.00 358,118 0.75+ 0.57+ 40
Putnam Growth Portfolio
11/30/95 13.10 30.66 115,276 0.93 (0.05) 52
11/30/96 15.71 19.92 160,073 0.90 (0.02) 63
11/30/97 19.15 26.01 234,726 0.91 0.18 125
11/30/98 20.21 22.56 398,863 0.86 0.09 75
1/31/99# 23.53 16.43 494,813 0.86+ (0.19)+ 10
1/31/00 26.48 16.51 783,896 0.80 (0.09) 76
7/31/00+ 27.07 2.23 846,559 0.78+ (0.17)+ 33
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
+ Unaudited
++ During the below stated periods, the investment adviser waived a portion
of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio of
net investment income (loss) to average net assets would have been as
follows:
<TABLE>
<CAPTION>
EXPENSES
----------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------
Alliance Growth................ 0.79% 0.71% 0.65% 0.58% 0.63% 0.63% 0.64%
MFS Growth and Income.......... 0.76 0.74 0.73 0.70 0.75 0.75 0.75
Putnam Growth.................. 0.93 0.90 0.91 0.86 0.86 0.80 0.78
<CAPTION>
NET INVESTMENT INCOME(LOSS)
-----------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------
Alliance Growth................ 0.51% 0.51% 0.37% 0.27% (0.01)% (0.11)% (0.14)%
MFS Growth and Income.......... 1.01 0.82 0.77 0.17 0.38 0.66 0.57
Putnam Growth.................. (0.05) (0.02) 0.18 0.09 (0.19) (0.09) (0.17)
</TABLE>
11
<PAGE> 12
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS(CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS DIVIDENDS NET
ASSET INVEST- NET REALIZED & FROM DECLARED FROM FROM NET ASSET
VALUE MENT UNREALIZED INVEST- NET REALIZED VALUE
PERIOD BEGINNING INCOME GAIN (LOSS) ON MENT INVESTMENT GAIN ON END OF
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS PERIOD
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Real Estate Portfolio
6/2/97-
11/30/97 $10.00 $ 0.16 $ 1.37 $ 1.53 $ -- $ -- $11.53
11/30/98 11.53 0.45 (1.93) (1.48) (0.16) (0.01) 9.88
1/31/99# 9.88 0.09 (0.36) (0.27) -- -- 9.61
1/31/00 9.61 0.39 (1.14) (0.75) (0.33) -- 8.53
7/31/00+ 8.53 0.22 1.70 1.92 -- -- 10.45
MFS Mid-Cap Growth Portfolio
4/1/99-
1/31/00 10.00 (0.01) 5.84 5.83 -- (0.23) 15.60
7/31/00+ 15.60 (0.01) 3.35 3.34 -- -- 18.94
Aggressive Growth Portfolio
6/3/96-
11/30/96 10.00 0.02 0.34 0.36 -- -- 10.36
11/30/97 10.36 0.01 1.40 1.41 (0.01) -- 11.76
11/30/98 11.76 0.04 0.52 0.56 -- -- 12.32
1/31/99# 12.32 -- 3.20 3.20 -- -- 15.52
1/31/00 15.52 -- 8.59 8.59 (0.03) (1.36) 22.72
7/31/00+ 22.72 0.01 0.68 0.69 -- -- 23.41
<CAPTION>
NET RATIO OF NET
ASSETS RATIO OF INVESTMENT
END OF EXPENSES TO INCOME TO
PERIOD TOTAL PERIOD AVERAGE NET AVERAGE NET PORTFOLIO
ENDED RETURN*** (000'S) ASSETS ASSETS TURNOVER
--------------------------------- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Real Estate Portfolio
6/2/97-
11/30/97 15.30% $ 29,565 1.25%+++ 3.25%+++ 7%
11/30/98 (13.04) 59,102 0.95 4.21 26
1/31/99# (2.73) 58,504 1.01+ 5.63+ 6
1/31/00 (8.03) 53,766 0.92 4.24 61
7/31/00+ 22.51 70,114 0.96+ 4.71+ 22
MFS Mid-Cap Growth Portfolio
4/1/99-
1/31/00 58.26 81,636 1.15+++@ (0.13)+++@ 108
7/31/00+ 21.41 242,748 0.82+ (0.11)+ 66
Aggressive Growth Portfolio
6/3/96-
11/30/96 3.60 35,124 1.05+++ 0.46+++ 47
11/30/97 13.62 103,603 0.90 (0.13) 221
11/30/98 4.76 133,183 0.83 0.32 268
1/31/99# 25.97 182,313 0.82+ 0.13+ 29
1/31/00 60.62 450,073 0.75 0.02 131
7/31/00+ 3.04 610,031 0.69+@ 0.10+@ 135
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
+ Unaudited
@ Net of custody credits of 0.02% and 0.01% for the periods ending January
31, 2000 and July 31, 2000, respectively.
++ During the below stated periods, the investment adviser waived a portion
of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio of
net investment income (loss) to average net assets would have been as
follows:
<TABLE>
<CAPTION>
EXPENSES NET INVESTMENT INCOME(LOSS)
-------------------------------------------- ---------------------------------------------
11/96 11/97 11/98 1/99+ 1/00 7/00+ 11/96 11/97 11/98 1/99+ 1/00 7/00+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------- ---------------------------------------------
Real Estate................... --% 1.36% 0.95% 1.01% 0.92% 0.96% --% 3.14% 4.21% 5.63% 4.24% 4.71%
MFS Mid-Cap Growth............ -- -- -- -- 1.17 0.82 -- -- -- -- (0.15) (0.11)
Aggressive Growth............. 1.09 0.90 0.83 0.82 0.75 0.69 0.42 (0.13) 0.32 0.13 0.02 0.10
</TABLE>
12
<PAGE> 13
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS(CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS DIVIDENDS
ASSET INVEST- NET REALIZED & FROM DECLARED FROM FROM NET
VALUE MENT UNREALIZED GAIN INVEST- NET REALIZED
PERIOD BEGINNING INCOME (LOSS) ON MENT INVESTMENT GAIN ON
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
International Growth and Income Portfolio
6/2/97-
11/30/97 $10.00 $ 0.03 $ 0.38 $ 0.41 $ -- $ --
11/30/98 10.41 0.13 0.86 0.99 (0.03) (0.06)
1/31/99# 11.31 -- 0.40 0.40 (0.02) (0.19)
1/31/00 11.50 0.15 1.97 2.12 (0.45) (0.89)
7/31/00+ 12.28 0.10 0.68 0.78 -- --
Global Equities Portfolio
11/30/95 11.67 0.12 1.64 1.76 (0.08) (0.29)
11/30/96 13.06 0.14 2.19 2.33 (0.14) (0.33)
11/30/97 14.92 0.09 1.79 1.88 (0.13) (0.69)
11/30/98 15.98 0.07 2.40 2.47 (0.19) (1.36)
1/31/99# 16.90 0.00 1.71 1.71 -- --
1/31/00 18.61 0.06 4.00 4.06 (0.21) (1.37)
7/31/00+ 21.09 (0.01) 0.68 0.67 -- --
International Diversified Equities Portfolio
11/30/95 9.78 0.07 0.38 0.45 (0.08) --
11/30/96 10.15 0.05 1.43 1.48 (0.26) --
11/30/97 11.37 0.09 0.28 0.37 (0.31) (0.10)
11/30/98 11.33 0.15 1.93 2.08 (0.40) (0.15)
1/31/99# 12.86 (0.01) 0.22 0.21 -- --
1/31/00 13.07 0.13 1.91 2.04 (0.21) (0.08)
7/31/00+ 14.82 0.09 (0.88) (0.79) -- --
Emerging Markets Portfolio
6/2/97-
11/30/97 10.00 0.06 (2.03) (1.97) -- --
11/30/98 8.03 0.04 (1.78) (1.74) (0.07) --
1/31/99# 6.22 0.01 -- 0.01 (0.01) --
1/31/00 6.22 (0.03) 4.81 4.78 -- --
7/31/00+ 11.00 (0.01) (1.72) (1.73) -- --
<CAPTION>
NET NET RATIO OF NET
ASSET ASSETS RATIO OF INVESTMENT
VALUE END OF EXPENSES TO INCOME TO
PERIOD END OF TOTAL PERIOD AVERAGE NET AVERAGE NET PORTFOLIO
ENDED PERIOD RETURN*** (000'S) ASSETS ASSETS TURNOVER
--------------------------------------------- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
International Growth and Income Portfolio
6/2/97-
11/30/97 $10.41 $ 4.10 $ 42,844 1.60%+++ 0.61%+++ 19%
11/30/98 11.31 9.58 128,344 1.46 1.12 51
1/31/99# 11.50 3.56 142,497 1.46+ (0.10) 10
1/31/00 12.28 17.99 253,962 1.21 1.16 75
7/31/00+ 13.06 6.35 310,015 1.15+ 1.49+ 34
Global Equities Portfolio
11/30/95 13.06 15.58 165,752 1.14 1.02 106
11/30/96 14.92 18.21 246,482 1.03 1.04 70
11/30/97 15.98 13.30 341,639 0.95 0.58 115
11/30/98 16.90 15.34 420,358 0.88 0.46 92
1/31/99# 18.61 10.12 463,138 0.86+ (0.04)+ 12
1/31/00 21.09 23.67 632,495 0.84 0.30 94
7/31/00+ 21.76 3.18 676,030 0.83+ (0.08)+ 47
International Diversified Equities Portfolio
11/30/95 10.15 4.63 48,961 1.70++ 0.76++ 52
11/30/96 11.37 14.85 157,008 1.59 0.47 53
11/30/97 11.33 3.52 248,927 1.35 0.82 56
11/30/98 12.86 18.33 354,174 1.26 1.18 40
1/31/99# 13.07 1.63 373,785 1.26+ (0.43)+ 7
1/31/00 14.82 15.85 464,988 1.22 0.95 65
7/31/00+ 14.03 (5.33) 423,483 1.21+ 1.22+ 48
Emerging Markets Portfolio
6/2/97-
11/30/97 8.03 (19.70) 19,979 1.90+++ 1.33+++ 49
11/30/98 6.22 (21.86) 31,685 1.90++ 0.61++ 96
1/31/99# 6.22 0.20 32,708 1.90+++ 0.60+++ 22
1/31/00 11.00 76.86 102,740 1.90@ (0.41)@ 145
7/31/00+ 9.27 (15.73) 102,478 1.58+ (0.15)+ 77
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
@ Net of custody credits of 0.01%.
+ Unaudited
++ During the below stated periods, the investment adviser waived a portion
of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the portfolios,
the ratio of expenses to average net assets and the ratio of net
investment income (loss) to average net assets would have been as
follows:
<TABLE>
<CAPTION>
EXPENSES
-----------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
-----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
International Growth and Income..... --% --% 2.02% 1.46% 1.46% 1.21% 1.15%
Global Equities..................... 1.14 1.03 0.95 0.88 0.86 0.84 0.83
International Diversified
Equities............................ 2.09 1.59 1.35 1.26 1.26 1.22 1.21
Emerging Markets.................... -- -- 2.60 2.01 2.29 1.90 1.58
<CAPTION>
NET INVESTMENT INCOME (LOSS)
-----------------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 7/00+
-----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
International Growth and Income..... --% --% 0.19% 1.12% (0.10)% 1.16% 1.49%
Global Equities..................... 1.02 1.04 0.58 0.46 (0.04) 0.30 (0.08)
International Diversified
Equities............................ 0.37 0.47 0.82 1.18 (0.43) 0.95 1.22
Emerging Markets.................... -- -- 0.63 0.50 0.21 (0.41) (0.15)
</TABLE>
13
<PAGE> 14
----------------------------------------------
PROSPECTUS
APRIL 20, 2000
----------------------------------------------
SUNAMERICA SERIES TRUST
-- Cash Management Portfolio
-- Corporate Bond Portfolio
-- Global Bond Portfolio
-- High-Yield Bond Portfolio
-- Worldwide High Income Portfolio
-- SunAmerica Balanced Portfolio
-- MFS Total Return Portfolio
-- Asset Allocation Portfolio
-- Utility Portfolio
-- Growth-Income Portfolio
-- Federated Value Portfolio
-- Davis Venture Value Portfolio
-- "Dogs" of Wall Street Portfolio
-- Alliance Growth Portfolio
-- MFS Growth and Income Portfolio
-- Putnam Growth Portfolio
-- Real Estate Portfolio
-- MFS Mid-Cap Growth Portfolio
-- Aggressive Growth Portfolio
-- International Growth and Income Portfolio
-- Global Equities Portfolio
-- International Diversified Equities Portfolio
-- Emerging Markets Portfolio
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR
PASSED UPON THE ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 15
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
TRUST HIGHLIGHTS............................................ 3
Q&A....................................................... 3
ACCOUNT INFORMATION......................................... 30
ADDITIONAL INFORMATION ABOUT THE "DOGS" OF WALL STREET
PORTFOLIO................................................. 31
Investment Strategy for the "Dogs" of Wall Street
Portfolio.............................................. 31
MORE INFORMATION ABOUT THE PORTFOLIOS....................... 31
Investment Strategies..................................... 31
GLOSSARY.................................................... 38
Investment Terminology.................................... 38
Risk Terminology.......................................... 41
MANAGEMENT.................................................. 44
Investment Adviser and Manager............................ 44
Information about the Subadvisers......................... 45
Portfolio Management...................................... 46
Custodian, Transfer and Dividend-Paying Agent............. 56
FINANCIAL HIGHLIGHTS........................................ 56
FOR MORE INFORMATION........................................ 62
</TABLE>
2
<PAGE> 16
Q&A
FIXED INCOME PORTFOLIOS typically seek to provide high current income
consistent with the preservation of capital by investing in fixed
income securities.
YIELD is the annual dollar income received on an investment expressed
as a percentage of the current or average price.
INCOME is interest payments from bonds or dividends from stocks.
TOTAL RETURN is a measure of performance which combines all elements
of return including income and capital gain or loss; it represents the
change in value of an investment over a given period expressed as a
percentage of the initial investment.
"HIGH QUALITY" INSTRUMENTS have a very strong capacity to pay interest
and repay principal; they reflect the issuers' high creditworthiness
and low risk of default.
--------------------------------------------------------------------
TRUST HIGHLIGHTS
--------------------------------------------------------------------
The following questions and answers are designed to give you an
overview of SunAmerica Series Trust (the "Trust") and to provide you
with information about twenty-three of the Trust's separate
investment series ("Portfolios") and their investment goals and
principal strategies. More complete investment information is
provided in the charts, under "More Information About the
Portfolios," which begin on page 32, and the glossary that follows
on page 38.
Q: WHAT ARE THE PORTFOLIOS' INVESTMENT GOALS AND PRINCIPAL INVESTMENT
STRATEGIES?
A: Each Portfolio operates as a separate mutual fund, with its own investment
goal and a principal strategy for pursuing it. A Portfolio's investment
goal may be changed without shareholder approval, but you will be notified
of any change. There can be no assurance that any Portfolio will meet its
investment goal or that the net return on an investment will exceed what
could have been obtained through other investment or savings vehicles.
FIXED INCOME PORTFOLIOS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT GOAL PRINCIPAL INVESTMENT STRATEGY
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Management high current yield while invests in a diversified selection
Portfolio preserving capital of money market instruments
----------------------------------------------------------------------------------------------
Corporate Bond high total return with invests primarily in investment
Portfolio only moderate price risk grade fixed income securities
----------------------------------------------------------------------------------------------
Global Bond Portfolio high total return, invests in high quality fixed
emphasizing current income securities of U.S. and
income and, to a lesser foreign issuers and transactions in
extent, capital foreign currencies
appreciation
----------------------------------------------------------------------------------------------
High-Yield Bond high current income and, invests primarily in intermediate
Portfolio secondarily, capital and long-term corporate
appreciation obligations, emphasizing
high-yield, high-risk fixed income
securities (junk bonds) with a
primary focus on "B" rated
high-yield bonds
----------------------------------------------------------------------------------------------
Worldwide High Income high current income and, invests primarily in high-yield,
Portfolio secondarily, capital high-risk fixed income securities
appreciation (junk bonds) of issuers located
throughout the world
----------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 17
BALANCED PORTFOLIOS typically try to balance three different
investment goals: capital appreciation, income and capital
preservation by investing in a mixture of stocks, bonds and money
market instruments.
ASSET ALLOCATION is a varying combination, depending on market
conditions and risk level, of stocks, bonds, money market instruments
and other assets.
CAPITAL APPRECIATION/GROWTH is an increase in the market value of
securities held.
A "VALUE" PHILOSOPHY -- that of investing in securities that are
believed to be undervalued in the market -- often reflects a
contrarian approach in that the potential for superior relative
performance is believed to be highest when fundamentally solid
companies are out of favor. The selection criteria is usually
calculated to identify stocks of companies with solid financial
strength and generous dividend yields that have low price-earnings
ratios and have generally been overlooked by the market, or companies
undervalued within an industry or market capitalization category.
BALANCED OR ASSET ALLOCATION PORTFOLIOS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT GOAL PRINCIPAL INVESTMENT STRATEGY
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SunAmerica Balanced conservation of maintains at all times a balanced
Portfolio principal portfolio of stocks and bonds, with
at least 25% invested in fixed
income securities
----------------------------------------------------------------------------------------------
MFS Total Return reasonable current invests primarily in common stocks
Portfolio income, long-term and fixed income securities, with
capital growth and an emphasis on income-producing
conservation of capital securities that appear to have some
potential for capital enhancement
----------------------------------------------------------------------------------------------
Asset Allocation high total return invests in a diversified portfolio
Portfolio (including income and that may include common stocks and
capital gains) other securities with common stock
consistent with long- characteristics, bonds and other
term preservation of intermediate and long-term fixed
capital income securities and money market
instruments
----------------------------------------------------------------------------------------------
Utility Portfolio high current income and invests primarily in equity and
moderate capital debt securities of utility
appreciation companies
----------------------------------------------------------------------------------------------
</TABLE>
EQUITY PORTFOLIOS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT GOAL PRINCIPAL INVESTMENT STRATEGY
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth-Income growth of capital and invests primarily in common stocks
Portfolio income or securities that demonstrate the
potential for appreciation and/or
dividends
----------------------------------------------------------------------------------------------
Federated Value growth of capital and invests primarily in the securities
Portfolio income of high quality companies
----------------------------------------------------------------------------------------------
Davis Venture Value growth of capital invests primarily in common stocks
Portfolio of companies with market
capitalizations of at least $5
billion
----------------------------------------------------------------------------------------------
"Dogs" of Wall Street total return (including invests in thirty high dividend
Portfolio capital appreciation and yielding common stocks selected
current income) annually from the Dow Jones
Industrial Average and the broader
market (see "Additional information
about the "Dogs" of Wall Street
Portfolio" for a detailed
description of the Portfolio's
Investment Strategy)
----------------------------------------------------------------------------------------------
Alliance Growth long-term growth of invests primarily in equity
Portfolio capital securities of a limited number of
large, carefully selected, high
quality U.S. companies that are
judged likely to achieve superior
earnings
----------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 18
A "GROWTH" PHILOSOPHY -- that of investing in securities believed to
offer the potential for capital appreciation -- focuses on securities
of companies that are considered to have a historical record of
above-average growth rate, significant growth potential, above-average
earnings growth or value, the ability to sustain earnings growth, or
that offer proven or unusual products or services, or operate in
industries experiencing increasing demand.
MARKET CAPITALIZATION represents the total market value of the
outstanding securities of a corporation.
INTERNATIONAL PORTFOLIOS typically seek capital appreciation by
investing significantly in securities traded in markets outside the
U.S.
AN "EMERGING MARKET" COUNTRY is generally a country with a low or
middle income economy or that is in the early stages of its
industrialization cycle.
EQUITY PORTFOLIOS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT GOAL PRINCIPAL INVESTMENT STRATEGY
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MFS Growth and Income reasonable current invests primarily in equity
Portfolio income and long-term securities
growth of capital and
income
----------------------------------------------------------------------------------------------
Putnam Growth long-term growth of invests primarily in common stocks
Portfolio capital or securities with common stock
characteristics that its Subadviser
believes have above-average growth
prospects
----------------------------------------------------------------------------------------------
Real Estate Portfolio total return through a invests primarily in securities of
combination of growth companies principally engaged in or
and income related to the real estate industry
or that own significant real estate
assets or that primarily invest in
real estate financial instruments
----------------------------------------------------------------------------------------------
MFS Mid-Cap Growth long-term growth of invests primarily in equity
Portfolio capital securities of medium-sized
companies that its Subadviser
believes have above-average growth
potential
----------------------------------------------------------------------------------------------
Aggressive Growth capital appreciation invests primarily in equity
Portfolio securities of high growth companies
including small and medium sized
growth companies with market
capitalizations of $1.5 billion to
$10 billion
----------------------------------------------------------------------------------------------
</TABLE>
INTERNATIONAL PORTFOLIOS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT GOAL PRINCIPAL INVESTMENT STRATEGY
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Growth growth of capital and, invests primarily in common stocks
and Income Portfolio secondarily, current traded on markets outside the U.S.
income
----------------------------------------------------------------------------------------------
Global Equities long-term growth of invests primarily in common stocks
Portfolio capital or securities with common stock
characteristics of U.S. and foreign
issuers that demonstrate the
potential for appreciation and
engages in transactions in foreign
currencies
----------------------------------------------------------------------------------------------
International long-term capital invests (in accordance with country
Diversified Equities appreciation and sector weightings determined by
Portfolio its Subadviser) in common stocks of
foreign issuers that, in the
aggregate, replicate broad country
and sector indices
----------------------------------------------------------------------------------------------
Emerging Markets long-term capital invests primarily in common stocks
Portfolio appreciation and other equity securities of
companies that its Subadviser
believes have above-average growth
prospects primarily in emerging
markets outside the U.S.
----------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 19
Q: WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE PORTFOLIOS?
A: The following section describes the principal risks of each Portfolio, while
the charts beginning on page 32 describe various additional risks.
Risks of Investing in Equity Securities
The GROWTH-INCOME, FEDERATED VALUE, DAVIS VENTURE VALUE, "DOGS" OF WALL
STREET, ALLIANCE GROWTH, MFS GROWTH AND INCOME, PUTNAM GROWTH, REAL ESTATE,
MFS MID-CAP GROWTH, AGGRESSIVE GROWTH, INTERNATIONAL GROWTH AND INCOME,
GLOBAL EQUITIES, INTERNATIONAL DIVERSIFIED EQUITIES and EMERGING MARKETS
PORTFOLIOS invest primarily in equity securities. In addition, the
SUNAMERICA BALANCED, MFS TOTAL RETURN, ASSET ALLOCATION and UTILITY
PORTFOLIOS invest significantly in equities. As with any equity fund, the
value of your investment in any of these Portfolios may fluctuate in
response to stock market movements. Growth stocks are historically volatile,
which will particularly affect the GROWTH-INCOME, ALLIANCE GROWTH, MFS
GROWTH AND INCOME, PUTNAM GROWTH, MFS MID-CAP GROWTH, AGGRESSIVE GROWTH and
INTERNATIONAL GROWTH AND INCOME PORTFOLIOS. You should be aware that the
performance of different types of equity stocks may rise or decline under
varying market conditions -- for example, "value" stocks may perform well
under circumstances in which "growth" stocks in general have fallen, or vice
versa. In addition, individual stocks selected for any of these Portfolios
may underperform the market generally.
Risks of Investing in Bonds
The CORPORATE BOND, GLOBAL BOND, HIGH-YIELD BOND, and WORLDWIDE HIGH INCOME
PORTFOLIOS invest primarily in bonds. In addition, the SUNAMERICA BALANCED,
MFS TOTAL RETURN, ASSET ALLOCATION and UTILITY PORTFOLIOS invest
significantly in bonds. As with any bond fund, the value of your investment
in these Portfolios may go up or down in response to changes in interest
rates or defaults (or even the potential for future default) by bond
issuers. To the extent a Portfolio is invested in the bond market, movements
in the bond market generally may affect its performance. In addition,
individual bonds selected for any of these Portfolios may underperform the
market generally.
Risks of Investing in Junk Bonds
The HIGH-YIELD BOND and WORLDWIDE HIGH INCOME PORTFOLIOS invest
predominantly in junk bonds, which are considered speculative. The CORPORATE
BOND, MFS TOTAL RETURN, ASSET ALLOCATION, REAL ESTATE and MFS MID-CAP GROWTH
PORTFOLIOS also invest significantly in junk bonds. While the Adviser and
Subadvisers each tries to diversify its portfolio and to engage in a credit
analysis of each junk bond issuer in which it invests, junk bonds carry a
substantial risk of default or changes in the issuer's creditworthiness, or
they may already be in default. A junk bond's market price may fluctuate
more than higher-quality securities and may decline significantly. In
addition, it may be more difficult for a Portfolio to dispose of junk bonds
or to determine their value. Junk bonds may contain redemption or call
provisions that, if exercised during a period of declining interest rates,
may force a Portfolio to replace the security with a lower yielding
security. If this occurs, it will result in a decreased return for you.
Risks of Investing in Money Market Securities
While an investment in the CASH MANAGEMENT PORTFOLIO should present the
least market risk of any of the Portfolios since it invests only in
high-quality short-term debt obligations (money market securities), you
should be aware that an investment in the CASH MANAGEMENT PORTFOLIO is
subject to the risk that the value of its investments may be subject to
changes in interest rates. The CASH MANAGEMENT PORTFOLIO does not seek to
maintain a stable net asset value of $1.00.
Risks of Investing Internationally
Except for the CASH MANAGEMENT PORTFOLIO, all of the Portfolios may invest
internationally, including in "emerging market" countries. While investing
internationally may reduce your risk by increasing the diversification of
your investment, the value of your investment may be affected by fluctuating
currency values, changing local and regional economic, political and social
conditions, and greater market volatility, and, in addition, foreign
securities may not be as liquid as domestic securities. These risks affect
all the Portfolios except for the CASH MANAGEMENT PORTFOLIO and are primary
risks of the
6
<PAGE> 20
GLOBAL BOND, WORLDWIDE HIGH INCOME, INTERNATIONAL GROWTH AND INCOME, GLOBAL
EQUITIES, INTERNATIONAL DIVERSIFIED EQUITIES and EMERGING MARKETS
PORTFOLIOS.
Risks of Investing in Smaller Companies
Stocks of smaller companies may be more volatile than, and not as liquid as,
those of larger companies. This will particularly affect the GROWTH-INCOME,
ALLIANCE GROWTH, PUTNAM GROWTH, AGGRESSIVE GROWTH, INTERNATIONAL GROWTH AND
INCOME and EMERGING MARKETS PORTFOLIOS.
Risks of a "Passively Managed" Strategy
The "DOGS" OF WALL STREET PORTFOLIO will not deviate from its strategy
(except to the extent necessary to comply with federal tax laws). Since the
Portfolio is committed to a strategy, if that strategy is unsuccessful, the
Portfolio will not meet its investment goal. Because the Portfolio will not
use certain techniques available to other mutual funds to reduce stock
market exposure, the Portfolio may be more susceptible to general market
declines than other Portfolios.
Risks of Investing in Utility Securities
The UTILITY PORTFOLIO invests primarily in equity and debt securities of
utility companies that produce, transmit, or distribute gas and electric
energy as well as those companies that provide communications facilities,
such as telephone and telegraph companies. Such utility securities entail
certain risks including: (i) utility companies' historic difficulty in
earning adequate returns on investment despite frequent rate increases; (ii)
restrictions on operations and increased costs and delays due to
governmental regulations; (iii) building or construction delays; (iv)
environmental regulations; (v) difficulty of the capital markets in
absorbing utility debt and equity securities; and (vi) difficulties in
obtaining fuel at reasonable prices.
To attempt to reduce these risks, the Subadviser will perform its own credit
analysis in addition to using recognized rating agencies and will obtain
information from other sources, including the issuer's management and other
investment analysts.
Risks of Investing in Real Estate Securities
The REAL ESTATE PORTFOLIO invests primarily in the real estate industry. A
Portfolio that invests primarily in the real estate industry is subject to
the risks associated with the direct ownership of real estate. The Portfolio
could also be subject to the risks of direct ownership as a result of a
default on a debt security it may own. These risks include declines in the
value of real estate, risks related to general and local economic
conditions, overbuilding and increased competition, increases in property
taxes and operating expenses, changes in zoning laws, casualty or
condemnation losses, fluctuations in rental income, changes in neighborhood
values, the appeal of properties to tenants and increases in interest rates.
If the Portfolio has rental income or income from the disposition of real
property, the receipt of such income may adversely affect its ability to
retain its tax status as a regulated investment company. Most of the
Portfolio's investments are, and likely will continue to be, interests in
Real Estate Investment Trusts (REITs).
Risks of Investing in "Non-Diversified" Portfolios
The GLOBAL BOND, WORLDWIDE HIGH INCOME, "DOGS" OF WALL STREET, MFS MID-CAP
GROWTH and INTERNATIONAL DIVERSIFIED EQUITIES PORTFOLIOS are organized as
"non-diversified" Portfolios. A non-diversified Portfolio can invest a
larger portion of assets in the securities of a single company than can some
other mutual funds. By concentrating in a smaller number of securities, a
Portfolio's risk is increased because the effect of each security on the
Portfolio's performance is greater.
Additional Principal Risks
Shares of the Portfolios are not bank deposits and are not guaranteed or
insured by any bank, government entity or the Federal Deposit Insurance
Corporation. As with any mutual fund, there is no guarantee that a Portfolio
will be able to achieve its investment goals. If the value of the assets of
a Portfolio goes down, you could lose money.
7
<PAGE> 21
Q: HOW HAVE THE PORTFOLIOS PERFORMED HISTORICALLY?
A: The following Risk/Return Bar Charts and Tables illustrate the risks of
investing in the Portfolios by showing changes in the Portfolios'
performance from calendar year to calendar year, and comparing the
Portfolios' average annual returns to those of an appropriate market index.
Fees and expenses incurred at the contract level are not reflected in the
bar charts and tables. If these amounts were reflected, returns would be
less than those shown. Of course, past performance is not necessarily an
indication of how a Portfolio will perform in the future. Performance
information for the MFS MID-CAP GROWTH PORTFOLIO is not shown because the
Portfolio has not been in existence for a full calendar year.
--------------------------------------------------------------------------------
CASH MANAGEMENT PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH MANAGEMENT PORTFOLIO
-------------------------
<S> <C>
1994 3.8
1995 5.48
1996 4.91
1997 5.22
1998 5.05
1999 4.87
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
1.36% (quarter ended 06/30/95) and the lowest return for a quarter was 0.64%
(quarter ended 03/31/94). For the most recent calendar quarter ended 03/31/00,
the return was 1.29%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE PAST FIVE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------
Cash Management Portfolio 4.87% 5.11% 4.57%
-----------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is February 9, 1993.
8
<PAGE> 22
--------------------------------------------------------------------------------
CORPORATE BOND PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1994 -3.19
---- -----
<S> <C>
1995 17.78
1996 4.49
1997 10.90
1998 6.05
1999 -1.85
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
5.94% (quarter ended 06/30/95) and the lowest return for a quarter was -2.89%
(quarter ended 03/31/94). For the most recent calendar quarter ended 03/31/00,
the return was 1.44%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE PAST FIVE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Corporate Bond Portfolio -1.85% 7.27% 5.40%
------------------------------------------------------------------------------------------------
Lipper Corporate BBB Rated Index(2) -1.60% 7.35% 5.48%
------------------------------------------------------------------------------------------------
Lehman Brothers Corporate Bond Index(3) -1.94% 8.18% 6.11%
------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Index(4) -0.81% 7.74% 5.84%
------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is July 1, 1993. The since inception
returns for the comparative indices are as of the inception date month end.
(2) The Lipper Corporate BBB Rated Index is an average of variable annuity
accounts that include at least 65% of assets in corporate and government
debt issues in the top four grades.
(3) The Lehman Brothers Corporate Bond Index includes all publicly issued,
fixed rate, nonconvertible investment grade, dollar-denominated,
SEC-registered corporate debt.
(4) The Lehman Brothers Aggregate Index combines several Lehman Brothers
fixed-income indices to give a broad view of the bond market -- 70%
reflects the Government/Corporate Bond Index, 29% reflects the
Mortgage-Backed Securities Index and 1% reflects the Asset-Backed
Securities Index.
9
<PAGE> 23
--------------------------------------------------------------------------------
GLOBAL BOND PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1994 -4.65
---- -----
<S> <C>
1995 17.64
1996 9.36
1997 10.03
1998 10.87
1999 8.09
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
5.66% (quarter ended 09/30/98) and the lowest return for a quarter was -3.97%
(quarter ended 03/31/94). For the most recent calendar quarter ended 03/31/00,
the return was 2.22%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE PAST FIVE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Global Bond Portfolio 8.09% 9.20% 6.99%
------------------------------------------------------------------------------------------------
J.P. Morgan Global Government Bond Index(2) 0.73% 9.77% 8.64%
------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is July 1, 1993. The since inception
return for the comparative index is as of the inception date month end.
(2) The J.P. Morgan Global Government Bond Index tracks the performance of
bonds throughout the world, including issues from Europe, Australia, the
Far East and the United States.
10
<PAGE> 24
--------------------------------------------------------------------------------
HIGH-YIELD BOND PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH-YIELD BOND PORTFOLIO
-------------------------
<S> <C>
1994 -5.52
1995 14.24
1996 14.57
1997 14.42
1998 -2.95
1999 6.50
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
7.38% (quarter ended 09/30/97) and the lowest return for a quarter was -8.40%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 0.95%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE PAST FIVE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
High-Yield Bond Portfolio 6.50% 9.13% 7.55%
------------------------------------------------------------------------------------------------
Merrill Lynch High-Yield Master Index(2) 1.55% 9.60% 9.07%
------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is February 9, 1993. The since inception
return for the comparative index is as of the inception date month end.
(2) The Merrill Lynch High-Yield Master Index includes publicly placed,
nonconvertible, coupon-bearing U.S. domestic debt with a maturity of at
least one year. Par amounts of all issues at the beginning and ending of
each reporting period must be at least $10,000. Issues included in the
index must have a rating that is less than investment grade but not in
default.
11
<PAGE> 25
--------------------------------------------------------------------------------
WORLDWIDE HIGH INCOME PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE HIGH INCOME PORTFOLIO
-------------------------------
<S> <C>
1995 -20.97
1996 25.32
1997 15.54
1998 -17.07
1999 19.31
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
12.07% (quarter ended 06/30/95) and the lowest return for a quarter was -24.35%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 2.44%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE PAST FIVE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------
Worldwide High Income Portfolio 19.31% 11.62% 10.74%
--------------------------------------------------------------------------------------------------
First Boston High Yield Bond Index(2) 3.28% 9.07% 8.72%
--------------------------------------------------------------------------------------------------
J.P. Morgan EMBI Plus(3) 21.59% 16.54% 14.62%
--------------------------------------------------------------------------------------------------
Blended Index(4) 6.88% 12.31% 11.26%
--------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is October 28, 1994. The since inception
returns for the comparative indices are as of the inception date month end.
(2) The First Boston High Yield Bond Index is a trader-priced portfolio
constructed to mirror the public high-yield debt market. Securities in the
index are rated B or lower.
(3) The J.P. Morgan Emerging Markets Bond Index (EMBI) Plus is a
market-weighted index composed of all Brady Bonds outstanding; it includes
Argentina, Brazil, Mexico, Nigeria, the Philippines, and Venezuela.
(4) The Blended Index combines 50% of the First Boston High Yield Index and 50%
of the J.P. Morgan Emerging Markets Bond Index Plus.
12
<PAGE> 26
--------------------------------------------------------------------------------
SUNAMERICA BALANCED PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUN AMERICA BALANCED PORTFOLIO
------------------------------
<S> <C>
1997 24.48
1998 24.61
1999 21.40
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
15.55% (quarter ended 12/31/98) and the lowest return for a quarter was -5.24%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 4.23%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR INCEPTION(1)
<S> <C> <C>
-----------------------------------------------------------------------------------------
SunAmerica Balanced Portfolio 21.40% 22.67%
-----------------------------------------------------------------------------------------
S&P 500(R)(2) 21.03% 26.60%
-----------------------------------------------------------------------------------------
Lehman Brothers Aggregate Index(3) -0.81% 6.60%
-----------------------------------------------------------------------------------------
Blended Index(4) 11.54% 17.41%
-----------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is June 3, 1996. The since inception
returns for the comparative indices are as of the inception date month end.
(2) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the index will reflect
changes in larger companies more heavily than those in smaller companies.
(3) The Lehman Brothers Aggregate Index combines several Lehman Brothers
fixed-income indices to give a broad view of the bond market -- 70%
reflects the Government/Corporate Bond Index, 29% reflects the
Mortgage-Backed Securities Index and 1% reflects the Asset-Backed
Securities Index.
(4) The Blended Index consists of 55% S&P 500(R) Index, 35% Lehman Brothers
Aggregate Index, and 10% Treasury Bills. Treasury Bills are short-term
securities with maturities of one-year or less issued by the U.S.
Government.
13
<PAGE> 27
--------------------------------------------------------------------------------
MFS TOTAL RETURN PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
--------------------------
<S> <C>
1995 27.64
1996 9.94
1997 16.90
1998 19.53
1999 2.88
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
13.55% (quarter ended 12/31/98) and the lowest return for a quarter was -4.95%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 1.68%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE PAST FIVE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
----------------------------------------------------------------------------------
MFS Total Return Portfolio(2) 2.88% 15.07% 14.46%
-------------------------------------------------------------------------------------------------
S&P 500(R)(3) 21.03% 28.56% 26.90%
-------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Index(4) -0.81% 7.74% 7.56%
-------------------------------------------------------------------------------------------------
Blended Index(5) 11.54% 18.77% 17.84%
-------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is October 28, 1994. The since inception
returns for the comparative indices are as of the inception date month end.
(2) Prior to January 1, 1999, the MFS Total Return Portfolio was named the
Balanced Phoenix Investment Counsel Portfolio.
(3) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market weighted, the index will reflect
changes in larger companies more heavily than those in smaller companies.
(4) The Lehman Brothers Aggregate Index combines several Lehman Brothers
fixed-income indices to give a broad view of the bond market -- 70%
reflects the Government/Corporate Bond Index, 29% reflects the
Mortgage-Backed Securities Index and 1% reflects the Asset-Backed
Securities Index.
(5) The Blended Index consists of 35% Lehman Brothers Aggregate Index, 55% S&P
500 Index, and 10% Treasury Bills. Treasury Bills are short-term securities
with maturities of one-year or less issued by the U.S. Government.
14
<PAGE> 28
--------------------------------------------------------------------------------
ASSET ALLOCATION PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION PORTFOLIO
--------------------------
<S> <C>
1994 -0.26
1995 26.29
1996 18.95
1997 21.81
1998 3.32
1999 9.44
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
11.05% (quarter ended 06/30/97) and the lowest return for a quarter was -8.76%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 2.20%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE PAST FIVE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Asset Allocation Portfolio 9.44% 15.65% 12.77%
------------------------------------------------------------------------------------------------
S&P 500(R)(2) 21.03% 28.56% 21.76%
------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Index(3) -0.81% 7.74% 5.84%
------------------------------------------------------------------------------------------------
Blended Index(4) 12.00% 20.09% 15.37%
------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is July 1, 1993. The since inception
returns for the comparative indices are as of the inception date month end.
(2) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the index will reflect
changes in larger companies more heavily than those in smaller companies.
(3) The Lehman Brothers Aggregate Index combines several Lehman Brothers
fixed-income indices to give a broad view of the bond market--70% reflects
the Government/Corporate Bond Index, 29% reflects the Mortgage-Backed
Securities Index and 1% reflects the Asset-Backed Securities Index.
(4) The Blended Index consists of 40% Lehman Brothers Aggregate Index and 60%
S&P 500 Index.
15
<PAGE> 29
--------------------------------------------------------------------------------
UTILITY PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TELECOM UTILITY PORTFOLIO
-------------------------
<S> <C>
1997 25.73
1998 14.04
1999 1.78
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
12.85% (quarter ended 12/31/97) and the lowest return for a quarter was -6.67%
(quarter ended 03/31/99). For the most recent calendar quarter ended 03/31/00,
the return was 5.15%.
--------------------------------------------------------------------------------
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR INCEPTION(1)
<S> <C> <C>
-----------------------------------------------------------------------------------------
Telecom Utility Portfolio 1.78% 13.93%
-----------------------------------------------------------------------------------------
S&P 500(R)(2) 21.03% 26.60%
-----------------------------------------------------------------------------------------
Blended Index(3) 21.41% 28.64%
-----------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is June 3, 1996. The since inception
returns for the comparative indices are as of the inception date month end.
(2) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the index will reflect
changes in larger companies more heavily than those in smaller companies.
(3) The Blended Index is comprised of 35% S&P Utility Index and 65% for the S&P
Communications Service Index, on a market capitalization weighted basis.
The S&P Utility Index is presently comprised of 40 stocks from the electric
and natural gas industries. The S&P Communications Service Index is
comprised of the companies listed in the telecommunications sectors of the
S&P 400, 500, and 600. Created in July of 1996, the S&P Communications
Service Index includes cellular and wireless service providers including
pagers, long distance providers and the telephone group companies (local
service providers).
16
<PAGE> 30
--------------------------------------------------------------------------------
GROWTH-INCOME PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH-INCOME PORTFOLIO
-----------------------
<S> <C>
1994 -2.61
1995 34.10
1996 24.06
1997 33.91
1998 30.74
1999 30.04
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
28.51% (quarter ended 12/31/98) and the lowest return for a quarter was -14.39%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 4.88%.
--------------------------------------------------------------------------------
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE PAST FIVE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Growth-Income Portfolio 30.04% 30.52% 22.22%
------------------------------------------------------------------------------------------------
S&P 500(R)(2) 21.03% 28.56% 21.37%
------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is February 9, 1993. The since inception
return for the comparative index is as of the inception date month end.
(2) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the Index will reflect
changes in larger companies more heavily than those in smaller companies.
17
<PAGE> 31
--------------------------------------------------------------------------------
FEDERATED VALUE PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERATED VALUE PORTFOLIO
-------------------------
<S> <C>
1997 31.43
1998 17.96
1999 6.19
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
16.10% (quarter ended 12/31/98) and the lowest return for a quarter was -11.49%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was -2.23%.
--------------------------------------------------------------------------------
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR PAST ONE RETURN SINCE
ENDED DECEMBER 31, 1999) YEAR INCEPTION(1)
<S> <C> <C>
--------------------------------------------------------------------------------------
Federated Value Portfolio 6.19% 17.52%
--------------------------------------------------------------------------------------
S&P 500(R)(2) 21.03% 26.60%
--------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is June 3, 1996. The since inception
return for the comparative index is as of the inception date month end.
(2) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the index will reflect
changes in larger companies more heavily than those in smaller companies.
18
<PAGE> 32
--------------------------------------------------------------------------------
DAVIS VENTURE VALUE PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DAVIS VENTURE VALUE PORTFOLIO
-----------------------------
<S> <C>
1995 37.45
1996 24.76
1997 34.32
1998 13.73
1999 16.11
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
21.07% (quarter ended 12/31/98) and the lowest return for a quarter was -14.87%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 9.85%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED PAST ONE PAST FIVE RETURN SINCE
DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------
Davis Venture Value Portfolio(2) 16.11% 24.92% 23.75%
----------------------------------------------------------------------------------------------------
S&P 500(R)(3) 21.03% 28.56% 26.90%
----------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is October 28, 1994. The since inception
return for the comparative index is as of the inception date month end.
(2) Prior to April 10, 2000, the Davis Venture Value Portfolio was named the
Venture Value Portfolio.
(3) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the index will reflect
changes in larger companies more heavily than those in smaller companies.
19
<PAGE> 33
---------------------------------------------------------------------------
"DOGS" OF WALL STREET PORTFOLIO
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
DOGS OF WALL STREET PORTFOLIO
-----------------------------
<S> <C>
1999 -7.08
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
15.56% (quarter ended 06/30/99) and the lowest return for a quarter was -9.92%
(quarter ended 09/30/99). For the most recent calendar quarter ended 03/31/00,
the return was -9.60%.
--------------------------------------------------------------------------------
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE PAST ONE RETURN SINCE
CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR INCEPTION(1)
<S> <C> <C>
-----------------------------------------------------------------------------------------
"Dogs" of Wall Street Portfolio -7.08% -4.64%
-----------------------------------------------------------------------------------------
S&P 500(R)(2) 21.03% 20.50%
-----------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is April 1, 1998. The since inception
return for the comparative index is as of the inception date month end.
(2) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the Index will reflect
changes in larger companies more heavily than those of smaller companies.
20
<PAGE> 34
--------------------------------------------------------------------------------
ALLIANCE GROWTH PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
1994 -2.16
1995 43.79
1996 29.11
1997 31.43
1998 52.23
1999 33.07
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
32.57% (quarter ended 12/31/98) and the lowest return for a quarter was -12.54%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 7.01%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED DECEMBER PAST ONE PAST FIVE RETURN SINCE
31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 33.07% 37.66% 27.69%
------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(2) 33.16% 32.41% 23.75%
-------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is February 9, 1993. The since inception
return for the comparative index is as of the inception date month end.
(2) The Russell 1000 Growth Index consists of stocks with a
greater-than-average growth orientation. Companies in this index tend to
exhibit higher price-to-book and price-earnings ratios, lower dividend
yields and higher forecasted growth values.
21
<PAGE> 35
--------------------------------------------------------------------------------
MFS GROWTH AND INCOME PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1994 -8.01
---- -----
<S> <C>
1995 32.10
1996 15.99
1997 23.22
1998 29.28
1999 5.93
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
22.03% (quarter ended 12/31/98) and the lowest return for a quarter was -8.93%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 2.01%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED DECEMBER PAST ONE PAST FIVE RETURN SINCE
31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
MFS Growth and Income Portfolio(2) 5.93% 20.92% 15.05%
------------------------------------------------------------------------------------------------------------
S&P 500(R)(3) 21.03% 28.56% 21.37%
-------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is February 9, 1993. The since inception
return for the comparative index is as of the inception date month end.
(2) Prior to January 1, 1999 the MFS Growth and Income Portfolio was named the
Growth Phoenix Investment Counsel Portfolio.
(3) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the index will reflect
changes in larger companies more heavily than those in smaller companies.
22
<PAGE> 36
--------------------------------------------------------------------------------
PUTNAM GROWTH PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
1994 -1.57
1995 24.75
1996 20.37
1997 32.48
1998 34.76
1999 29.71
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
25.28% (quarter ended 12/31/98) and the lowest return for a quarter was -12.26%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 2.98%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED DECEMBER PAST ONE PAST FIVE RETURN SINCE
31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
Putnam Growth Portfolio(2) 29.71% 28.31% 20.01%
------------------------------------------------------------------------------------------------------------
S&P 500(R)(3) 21.03% 28.56% 21.37%
------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(4) 33.16% 32.41% 23.75%
-------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is February 9, 1993. The since inception
returns for the comparative indices are as of the inception date month end.
(2) Prior to April 7, 1997, the Putnam Growth Portfolio was known as the
Provident Growth Portfolio, managed by Provident Investment Counsel.
(3) The S&P 500(R) Index tracks the performance of 500 stocks representing a
sampling of the largest foreign and domestic stocks traded publicly in the
United States. Because it is market-weighted, the index will reflect
changes in larger companies more heavily than those in smaller companies.
(4) The Russell 1000 Growth Index consists of stocks with a
greater-than-average growth orientation. Companies in this index tend to
exhibit higher price-to-book and price-earnings ratios, lower dividend
yields and higher forecasted growth values.
23
<PAGE> 37
--------------------------------------------------------------------------------
REAL ESTATE PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
1998 -14.11
1999 -7.42
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
11.98% (quarter ended 06/30/99) and the lowest return for a quarter was -11.07%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 1.25%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAST ONE RETURN SINCE
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR INCEPTION(1)
<S> <C> <C>
----------------------------------------------------------------------------------------------------------
Real Estate Portfolio -7.42% -2.92%
----------------------------------------------------------------------------------------------------------
Morgan Stanley REIT Index(2) -4.54% -2.30%
----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is June 2, 1997. The since inception
return for the comparative index is as of the inception date month end.
(2) The Morgan Stanley Real Estate Investment Trust (REIT) Index is a
capitalization-weighted index with dividends reinvested of mostly actively
traded real estate investment trusts and is designed to be a measure of
real estate equity performance. The index was developed with a base value
of 200 as of December 31, 1994.
24
<PAGE> 38
--------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
1997 12.35
1998 17.43
1999 84.66
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
53.68% (quarter ended 12/31/99) and the lowest return for a quarter was -17.31%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 8.30%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAST ONE RETURN SINCE
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR INCEPTION(1)
<S> <C> <C>
----------------------------------------------------------------------------------------------------------
Aggressive Growth Portfolio 84.66% 30.10%
----------------------------------------------------------------------------------------------------------
Russell 2000 Index(2) 21.25% 11.15%
----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is June 3, 1996. The since inception
return for the comparative index is as of the inception date month end.
(2) The Russell 2000 Index is comprised of the smallest 2000 companies in the
Russell 3000 Index, representing approximately 11% of the Russell 3000
total market capitalization. The Index was developed with a base value of
$135,000 as of December 31, 1986.
25
<PAGE> 39
--------------------------------------------------------------------------------
INTERNATIONAL GROWTH AND INCOME PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
1998 10.83
1999 24.18
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
14.81% (quarter ended 12/31/98) and the lowest return for a quarter was -17.57%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 2.87%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAST ONE RETURN SINCE
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR INCEPTION(1)
<S> <C> <C>
----------------------------------------------------------------------------------------------------------
International Growth and Income Portfolio 24.18% 15.87%
----------------------------------------------------------------------------------------------------------
MSCI EAFE Index(2) 27.31% 16.44%
----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is June 2, 1997. The since inception
return for the comparative index is as of the inception date month end.
(2) The Morgan Stanley Capital International (MSCI) Europe, Australia, and Far
East (EAFE) Index represents the foreign stocks of 20 developed market
countries in Europe, Australia and the Far East.
26
<PAGE> 40
--------------------------------------------------------------------------------
GLOBAL EQUITIES PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL EQUITIES PORTFOLIO
-------------------------
<S> <C>
1994 -0.30
1995 19.16
1996 14.18
1997 15.06
1998 22.86
1999 30.94
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
25.50% (quarter ended 12/31/98) and the lowest return for a quarter was -18.20%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 7.94%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED DECEMBER PAST ONE PAST FIVE RETURN SINCE
31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
Global Equities Portfolio 30.94% 20.29% 16.99%
------------------------------------------------------------------------------------------------------------
MSCI World Index(2) 25.34% 20.25% 18.39%
-------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is February 9, 1993. The since inception
return for the comparative index is as of the inception date month end.
(2) The Morgan Stanley Capital International (MSCI) World Index measures the
performance of companies representative of the market structure of 22
developed market countries in North America, Europe and Asia/Pacific
regions.
27
<PAGE> 41
--------------------------------------------------------------------------------
INTERNATIONAL DIVERSIFIED EQUITIES PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL DIVERSIFIED EQUITIES PORTFOLIO
--------------------------------------------
<S> <C>
1995 10.34
1996 9.31
1997 6.37
1998 18.53
1999 24.59
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
15.91% (quarter ended 03/31/98) and the lowest return for a quarter was -12.33%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was -3.69%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED PAST ONE PAST FIVE RETURN SINCE
DECEMBER 31, 1999) YEAR YEARS INCEPTION(1)
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------
International Diversified Equities Portfolio 24.59% 13.63% 12.38%
-----------------------------------------------------------------------------------
MSCI EAFE Index(2) 27.31% 13.15% 11.75%
----------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is October 28, 1994. The since inception
return for the comparative index is as of the inception date month end.
(2) The Morgan Stanley Capital International (MSCI) Europe, Australia, and Far
East (EAFE) Index represents the foreign stocks of 20 developed market
countries in Europe, Australia and the Far East.
28
<PAGE> 42
--------------------------------------------------------------------------------
EMERGING MARKETS PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 -24.27
---- ------
<S> <C>
1999 77.45
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
38.80% (quarter ended 12/31/99) and the lowest return for a quarter was -22.17%
(quarter ended 09/30/98). For the most recent calendar quarter ended 03/31/00,
the return was 1.62%.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAST ONE RETURN SINCE
AVERAGE ANNUAL TOTAL RETURNS (AS OF THE CALENDAR YEAR ENDED DECEMBER 31, 1999) YEAR INCEPTION(1)
<S> <C> <C>
----------------------------------------------------------------------------------------------------------
Emerging Markets Portfolio 77.45% 4.52%
----------------------------------------------------------------------------------------------------------
MSCI Emerging Markets Free Index(2) 66.42% -0.66%
----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for the Portfolio is June 2, 1997. The since inception
return for the comparative index is as of the inception date month end.
(2) The Morgan Stanley Capital International (MSCI) Emerging Markets--Free
Index measures the performance of companies representative of the market
structure of 25 emerging market countries in Europe, Latin America, and the
Pacific Basin. The MSCI EMF Index excludes closed markets and those shares
in otherwise free markets which are not purchasable by foreigners.
29
<PAGE> 43
--------------------------------------------------------------------------------
ACCOUNT INFORMATION
--------------------------------------------------------------------------------
Shares of the Portfolios are not offered directly to the public. Instead, shares
are currently issued and redeemed only in connection with investments in and
payments under variable annuity contracts and variable life insurance policies
(Variable Contracts) of Anchor National Life Insurance Company, First SunAmerica
Life Insurance Company, AIG Life Insurance Company and American International
Life Assurance Company of New York (Life Companies), each of which is affiliated
with the Trust's investment adviser and manager, SunAmerica Asset Management
Corp. (SAAMCo). All shares of the Trust are owned by "Separate Accounts" of the
Life Companies. So if you would like to invest in a Portfolio, you must purchase
a Variable Contract from one of the Life Companies. You should be aware that the
contracts involve fees and expenses that are not described in this Prospectus,
and that the contracts also may involve certain restrictions and limitations.
Certain Portfolios may not be available in connection with a particular
contract. You will find information about purchasing a Variable Contract and the
Portfolios available to you in the prospectus that offers the contracts, which
accompanies this Prospectus.
TRANSACTION POLICIES
VALUATION OF SHARES The net asset value per share (NAV) for each Portfolio is
determined each business day at the close of regular trading on the New York
Stock Exchange (generally 4:00 p.m., Eastern time) by dividing its net assets by
the number of its shares outstanding. Investments for which market quotations
are readily available are valued at market. All other securities and assets are
valued at "fair value" following procedures approved by the Trustees.
Certain of the Portfolios may invest to a large extent in securities that are
primarily listed on foreign exchanges that trade on weekends or other days when
the Trust does not price its shares. As a result, the value of these Portfolios'
shares may change on days when the Trust is not open for purchases or
redemptions.
BUY AND SELL PRICES The Separate Accounts buy and sell shares of a Portfolio at
NAV, without any sales or other charges.
EXECUTION OF REQUESTS The Trust is open on those days when the New York Stock
Exchange is open for regular trading. Buy and sell requests are executed at the
next NAV to be calculated after the request is accepted by the Trust. If the
order is received by the Trust before the Trust's close of business (generally
4:00 p.m., Eastern time), the order will receive that day's closing price. If
the order is received after that time, it will receive the next business day's
closing price.
During periods of extreme volatility or market crisis, a Portfolio may
temporarily suspend the processing of sell requests, or may postpone payment of
proceeds for up to seven business days or longer, as allowed by federal
securities laws.
DIVIDEND POLICIES AND TAXES
DISTRIBUTIONS Each Portfolio annually declares and distributes substantially all
of its net investment income in the form of dividends and capital gains
distributions.
DISTRIBUTION REINVESTMENT The dividends and distributions will be reinvested
automatically in additional shares of the same Portfolio on which they were
paid.
TAXABILITY OF A PORTFOLIO Each Portfolio intends to continue to qualify as a
regulated investment company under the Internal Revenue Code of 1986, as
amended. As long as each Portfolio is qualified as a regulated investment
company, it will not be subject to federal income tax on the earnings that it
distributes to its shareholders.
30
<PAGE> 44
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT THE "DOGS" OF WALL STREET PORTFOLIO
--------------------------------------------------------------------------------
INVESTMENT STRATEGY FOR THE "DOGS" OF WALL STREET PORTFOLIO
The "DOGS" OF WALL STREET PORTFOLIO employs a passively managed "buy and hold"
strategy that annually selects the following 30 stocks: (1) the 10 highest
yielding common stocks in the Dow Jones Industrial Average and (2) the 20 other
highest yielding stocks of the 400 largest industrial companies in the U.S.
markets that have capitalizations of at least $1 billion and have received one
of the two highest rankings from an independently published common stock ranking
service on the basis of growth and stability of earnings and dividends. The
stocks in the Portfolio will not change over the course of the year, even if
there are adverse developments concerning a particular stock, an industry, the
economy or the stock market generally. The annual selection of the thirty stocks
that meet these criteria takes place no later than January 15th, on the basis of
information as of the preceding December 31st. Immediately after the Portfolio
buys and sells stocks, it will hold an equal value of each of the thirty stocks.
In other words, the Portfolio will invest 1/30 of its assets in each of the
stocks that make up its portfolio. Thereafter, when an investor purchases shares
of the Portfolio, the Adviser invests the additional funds in the selected
stocks based on each stock's respective percentage of the Portfolio's assets.
Due to purchases and redemptions of Portfolio shares during the year and changes
in the market value of the stocks held by the Portfolio, it is likely that the
weightings of the stocks in the Portfolio will fluctuate throughout the course
of the year. This may result in the Portfolio investing more than 25% of its
assets in the securities of issuers in the same industry, to the extent such
investments are selected according to the Portfolio's stock selection criteria.
--------------------------------------------------------------------------------
MORE INFORMATION ABOUT THE PORTFOLIOS
--------------------------------------------------------------------------------
INVESTMENT STRATEGIES
Each Portfolio has its own investment goal and principal strategy for pursuing
it as described in the charts beginning on page 3. The charts below summarize
information about each Portfolio's investments. We have included a glossary to
define the investment and risk terminology used in the charts throughout this
Prospectus. Unless otherwise indicated, investment restrictions, including
percentage limitations, apply at the time of purchase.
31
<PAGE> 45
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
FIXED INCOME PORTFOLIOS
-----------------------------------------------------------------------------------------------------------------------------
CASH HIGH-YIELD WORLDWIDE HIGH
MANAGEMENT CORPORATE BOND GLOBAL BOND BOND INCOME
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
What are the - Fixed income - Fixed income - Fixed income - Fixed income - Foreign
Portfolio's securities: securities: securities: securities: securities:
principal - U.S. treasury - corporate - U.S. and - junk bonds - emerging
investments? bills bonds non- U.S. - convertible market
- agency discount - investment grade government bonds government
notes fixed income securities - preferred stocks securities
- commercial paper securities - investment grade - zero coupon and - emerging market
- corporate debt - junk bonds corporate bonds deferred corporate debt
instruments (up to 35%) - mortgage and interest bonds instruments
- Short-term - U.S. government asset-backed - Eurobonds
investments securities securities - Brady bonds
- Short-term - Junk bonds
investments
- Currency
transactions
- Foreign
securities
-----------------------------------------------------------------------------------------------------------------------------
In what other types N/A - Fixed income - Options and - Equity - Currency
of investments may securities: futures securities: transactions
the Portfolio - preferred - Forward - convertible - Illiquid
significantly securities commitments securities securities (up to
invest? - zero coupon, - Mortgage and - warrants 15%)
deferred interest-rate - Fixed income - Borrowing for
interest and PIK swaps securities: temporary or
bonds - Hybrid - U.S. emergency
(up to 35%) instruments government purposes
- Foreign - Deferred securities (up to 33 1/3%)
securities interest bonds - investment grade
- When-issued and - Inverse floaters bonds
delayed delivery - Illiquid - Foreign
transactions securities (up to securities
- Illiquid 15%) - PIK bonds
securities (up to - Pass-through - Short-term
15%) securities investments
- Pass-through - Borrowing for
securities temporary or
- Convertible emergency
securities purposes
(up to 33 1/3%)
-----------------------------------------------------------------------------------------------------------------------------
What other types of N/A - Short-term - Mortgage dollar - Borrowing for - Hybrid
investments may the investments rolls temporary or instruments
Portfolio use as - Defensive - Zero coupon, emergency - Options and
part of efficient investments deferred purposes Futures
portfolio - Options and interest and PIK (up to 33 1/3%) - Forward
management or to futures bonds - Illiquid commitments
enhance return? (up to 10%) - Firm commitments securities (up to
- Borrowing for and when-issued 15%)
temporary or or delayed -- - Loan
emergency delivery participations
purposes transactions - Short sales
(up to 33 1/3%) - Forward - Rights
- Securities commitments
lending (up to - Loan
33 1/3%) participations
- Securities
lending (up to
33 1/3%)
- Interest rate
swaps, caps,
floors and
collars
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE> 46
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
FIXED INCOME PORTFOLIOS
-----------------------------------------------------------------------------------------------------------------------------
CASH HIGH-YIELD WORLDWIDE HIGH
MANAGEMENT CORPORATE BOND GLOBAL BOND BOND INCOME
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
What risks normally - Interest rate - Credit quality - Interest rate - Credit quality - Foreign exposure
affect the fluctuations - Interest rate fluctuations - Interest rate - Credit quality
Portfolio? - Security fluctuations - Credit quality fluctuations - Illiquidity
selection - Market - Currency - Security - Securities
volatility volatility selection selections
- Small and medium - Derivatives - Market - Market
sized companies - Market volatility volatility
- Security volatility - Currency
selection - Non-diversified volatility
status - Non-diversified
- Foreign exposure status
- Hedging
- Security
selection
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
BALANCED OR ASSET ALLOCATION PORTFOLIOS
----------------------------------------------------------------------------------------------------------------------
SUNAMERICA
BALANCED MFS TOTAL RETURN ASSET ALLOCATION UTILITY
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
What are the - Equity securities: - Equity securities - Equity securities: - Equity securities:
Portfolio's - common stocks (at least 40%, but not - common stocks - mid-cap stocks
principal - Fixed income more than 75%): - convertible - large-cap stocks
investments? securities: - common stocks securities - small-cap stocks
- U.S. government - convertible - warrants - REITs
securities securities - rights
- corporate debt - rights - Fixed income
instruments - Fixed income securities:
securities (at least - U.S. government
25%): securities
- U.S. government - investment grade
securities corporate bonds
- pass-through - preferred stocks
securities - junk bonds (up to
- corporate debt 25% of fixed income
instruments investments)
- preferred stocks - senior securities
- Loan participations - pass-through
- Equity swaps securities
- Emerging markets - REITs
- Registered
investment companies
- Foreign securities
- Hybrid Instruments:
- WEBs and SPDRs
- Illiquid securities
(up to 15%)
----------------------------------------------------------------------------------------------------------------------
</TABLE>
33
<PAGE> 47
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
BALANCED OR ASSET ALLOCATION PORTFOLIOS
----------------------------------------------------------------------------------------------------------------------
SUNAMERICA
BALANCED MFS TOTAL RETURN ASSET ALLOCATION UTILITY
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
In what other types - Equity securities: - Foreign securities: - Equity securities: - Equity securities:
of investments may - small-cap stocks (up to 20%): - small-cap stocks - convertible
the Portfolio (up to 20%) - Brady bonds - convertible securities
significantly - Short-term - depositary receipts securities - Fixed income
invest? investments - fixed income - Foreign securities: securities:
(up to 10%) securities (U.S. - ADRs, GDRs and EDRs - Corporate bonds
- Defensive dollar denominated) - emerging markets - investment grade
investments - Junk bonds - Equity swaps fixed income
- Foreign securities (up to 20%) - Hybrid securities securities
- Illiquid securities - Securities lending - Currency - preferred stocks
(up to 15%) (up to 33 1/3%) transactions
- Futures
- Forward commitments
- Mortgage dollar
rolls
- Deferred interest
bonds
----------------------------------------------------------------------------------------------------------------------
What other types of - Options and futures - Municipal bonds - Options and futures - Short-term
investments may the - Currency - Warrants - Short-term investments
Portfolio use as transactions - Zero-coupon, investments - Defensive
part of efficient - Borrowing for deferred interest and - Firm commitment investments
portfolio management temporary or PIK bonds when agreements - Options and futures
or to enhance emergency purposes issued and - When issued and - Borrowing for
return? (up to 33 1/3%) delayed-delivery delayed-delivery temporary or
- Securities lending transactions transactions emergency purposes
(up to 33 1/3%) - Hybrid instruments - Zero coupon bonds (up to 33 1/3%)
- Inverse floaters - Interest rate swaps, - Securities lending
- Options and futures caps, floors and (up to 33 1/3%)
- Currency collars
transactions - Securities lending
- Forward commitments (up to 33 1/3%)
- Registered - Loan participations
investment companies - Defensive
- Short-term investments
investments - Borrowing for
- Defensive temporary or emergency
investments purposes (up to
- Borrowing for 33 1/3%)
temporary or
emergency purposes
(up to 33 1/3%)
----------------------------------------------------------------------------------------------------------------------
What risks normally - Market volatility - Security selection - Market volatility - Market volatility
affect the - Interest rate - Market volatility - Securities selection - Utility industry
Portfolio? fluctuations - Foreign exposure - Interest rate
- Credit quality - Interest rate fluctuations
- Currency volatility fluctuations - Credit quality
- Foreign exposure - Illiquidity - Currency volatility
- Derivatives - Credit quality - Foreign exposure
- Hedging - Active trading - Derivatives
- Prepayment - Hedging
----------------------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE> 48
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------
<CAPTION>
EQUITY PORTFOLIOS
-------------------------------------------------------------------------------------------------------------------------
DAVIS VENTURE "DOGS" OF WALL
GROWTH-INCOME FEDERATED VALUE VALUE STREET ALLIANCE GROWTH
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
What are the - Equity - Equity - Equity - Equity - Equity
Portfolio's Securities: securities: securities: securities: securities:
principal - large-cap stocks - large-cap stocks - large-cap stocks - large-cap stocks - large-cap
investments? - mid-cap stocks stocks
-------------------------------------------------------------------------------------------------------------------------
In what other types - Foreign - Equity - Mid-cap stocks N/A - Foreign
of investments may securities (up to securities: - Foreign securities
the Portfolio 25%) - mid-cap stocks securities (up to 25%)
significantly - Foreign
invest? securities:
- ADRs
-------------------------------------------------------------------------------------------------------------------------
What other types of - Short-term - Short-term - Short-term - Short-term - Short-term
investments may the investments investments investments investments investments
Portfolio use as - Defensive - Defensive - Defensive - Defensive - Defensive
part of efficient investments investments investments investments investments
portfolio - Borrowing for - Options and - U.S. government - Borrowing for - Borrowing for
management or to temporary or futures securities temporary or temporary or
enhance return? emergency - Borrowing for emergency emergency
purposes (up to temporary or purposes purposes
33 1/3%) emergency (up to 33 1/3%) (up to 33 1/3%)
- Options and purposes (up to - Options and - Options and
futures 33 1/3%) futures futures
- Securities
lending
(up to 33 1/3%)
-------------------------------------------------------------------------------------------------------------------------
What risks normally - Market - Market - Market - Market - Market
affect the volatility volatility volatility volatility volatility
Portfolio? - Securities - Securities - Securities - Securities - Securities
selection selection selection selection selection
- Active trading - Non-diversified - Active trading
- Growth stocks status - Growth stocks
- Illiquidity
- Passively
managed strategy
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
35
<PAGE> 49
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIOS
-----------------------------------------------------------------------------------------------------------------------------
MFS GROWTH AND MFS MID-CAP AGGRESSIVE
INCOME PUTNAM GROWTH REAL ESTATE GROWTH GROWTH
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
What are the - Equity - Equity - Equity - Equity - Equity
Portfolio's securities securities securities: securities (at securities:
principal (at least 65%): - mid-cap stocks least 65%): - small-cap stocks
investments? - common stocks - small-cap stocks - common stocks - mid-cap stocks
- convertible - Fixed income - mid-cap stocks - convertible
securities securities: - convertible securities
- Fixed income - preferred stocks securities - warrants
securities: - REITs - Fixed income - Defensive
- preferred stocks securities: investments
- Foreign - preferred stocks - Options and
securities: - Foreign futures
- depositary securities:
receipts - depositary
receipts
-----------------------------------------------------------------------------------------------------------------------------
In what other types - Foreign N/A - Convertible - Foreign N/A
of investments may securities stocks securities (up to
the Portfolio (up to 20%) - Foreign 20%)
significantly - Securities securities - junk bonds
invest? lending - Junk bonds (up to 10%)
(up to 33 1/3%) (up to 5%) - Securities
- Corporate bonds lending (up to
30%)
-----------------------------------------------------------------------------------------------------------------------------
What other types of - Pass-through - Short-term - Short-term - Warrants - Borrowing for
investments may the securities investments investments - Corporate debt temporary or
Portfolio use as - Warrants - Currency - Defensive instruments emergency
part of efficient - Zero-coupon, transactions investments - U.S. government purposes
portfolio deferred - Defensive - U.S. government securities (up to 33 1/3%)
management or to interest and PIK investments securities - Zero-coupon, - Illiquid
enhance return? bonds - Borrowing for deferred securities (up to
- Short sales temporary or interest and PIK 33 1/3%)
- when issued and emergency bonds - Short-term
delayed-delivery purposes - Short sales Investments
transactions - Options and - When issued and
- Futures futures delayed-delivery
- Currency - Warrants transactions
transactions - Hybrid - Options and
- Forward instruments futures
commitments - Currency
- Registered transactions
investment - Forward
companies commitments
- Illiquid - Registered
securities investment
(up to 15%) companies
- Short-term - Illiquid
investments securities (up to
- Defensive 15%)
investments - Short-term
- Borrowing for investments
temporary or - Defensive
emergency investments
purposes (up to - Borrowing for
33 1/3%) temporary or
- Rights emergency purposes
- Emerging markets (up to 33 1/3%)
- Rights
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE> 50
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIOS
-------------------------------------------------------------------------------------------------------------------------
MFS GROWTH AND MFS MID-CAP AGGRESSIVE
INCOME PUTNAM GROWTH REAL ESTATE GROWTH GROWTH
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
What risks normally - Market - Market - Market - Market - Market
affect the volatility volatility volatility volatility volatility
Portfolio? - Securities - Securities - Securities - Securities - Securities
selection selection selection selection selection
- Medium sized - Growth stocks - Real estate - medium sized - Illiquidity
companies industry companies - Interest rate
- Growth stocks - Small and medium - Foreign exposure fluctuations
sized companies - Emerging markets - Small and medium
- Growth stocks sized companies
- Active trading - Credit quality
- Non-diversified - Derivatives
status - Hedging
- Emerging markets
- Active trading
- Growth stocks
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
INTERNATIONAL PORTFOLIOS
----------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INTERNATIONAL
GROWTH AND INCOME GLOBAL EQUITIES DIVERSIFIED EQUITIES EMERGING MARKETS
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
What are the - Equity securities: - Equity securities: - Equity securities - Equity securities:
Portfolio's - large-cap stocks - large-cap stocks - Foreign securities - small-cap stocks
principal (foreign) - mid-cap stocks - mid-cap stocks
investments? - Foreign securities - Foreign securities - Foreign securities
----------------------------------------------------------------------------------------------------------------------
In what other types - Equity securities: N/A - Equity securities: - Hybrid instruments
of investments may - mid-cap stocks - convertible - Equity swaps
the Portfolio (foreign) securities
significantly - Foreign securities: - Warrants
invest? - emerging markets - Rights
- Fixed income
securities:
- U.S. government
securities
- preferred stocks
----------------------------------------------------------------------------------------------------------------------
What other types of - Equity securities: - Short-term - Short-term N/A
investments may the - small-cap stocks investments investments
Portfolio use as (foreign) - Currency - Defensive
part of efficient - large-cap stocks transactions investments
portfolio management (U.S.) - Defensive - Currency
or to enhance - Currency investments transactions
return? transactions - Borrowing for - Illiquid securities
- Short-term temporary or emergency (up to 15%)
investments purposes (up to - Options and futures
33 1/3%) - Forward commitments
- Options and futures - Registered
investment companies
- Firm commitment
agreements
- Securities lending
(up to 33 1/3%)
----------------------------------------------------------------------------------------------------------------------
What risks normally - Currency volatility - Market volatility - Market volatility - Currency volatility
affect the - Foreign exposure - Securities selection - Foreign exposure - Foreign exposure
Portfolio? - Market volatility - Active trading - Non-diversified - Emerging markets
- Securities selection - Currency volatility status - Growth stocks
- Hedging - Foreign exposure - Emerging markets - Market volatility
- Growth stocks - Growth stocks - Securities selection
- Currency volatility
- Sector risk
----------------------------------------------------------------------------------------------------------------------
</TABLE>
37
<PAGE> 51
--------------------------------------------------------------------------------
GLOSSARY
--------------------------------------------------------------------------------
INVESTMENT TERMINOLOGY
BORROWING FOR TEMPORARY OR EMERGENCY PURPOSES involves the borrowing of cash or
securities by a Portfolio in limited circumstances, including to meet
redemptions. Borrowing will cost a Portfolio interest expense and other fees.
Borrowing may exaggerate changes in a Portfolio's net asset value and the cost
may reduce a Portfolio's return.
CURRENCY TRANSACTIONS include the purchase and sale of currencies to facilitate
the settlement of securities transactions and forward currency contracts, which
are used to hedge against changes in currency exchange rates.
DEFENSIVE INVESTMENTS include high quality fixed income securities, repurchase
agreements and other money market instruments. A Portfolio will make temporary
defensive investments in response to adverse market, economic, political or
other conditions. When a Portfolio takes a defensive position, it may miss out
on investment opportunities that could have resulted from investing in
accordance with its principal investment strategy. As a result, a Portfolio may
not achieve its investment goal.
EQUITY SECURITIES, such as COMMON STOCKS, represent shares of equity ownership
in a corporation. Common stocks may or may not receive dividend payments.
Certain securities have common stock characteristics, including certain
convertible securities such as CONVERTIBLE PREFERRED STOCK, CONVERTIBLE BONDS,
WARRANTS and RIGHTS, and may be classified as equity securities. Investments in
equity securities and securities with equity characteristics include:
- LARGE-CAP STOCKS are common stocks of large companies that generally have
market capitalizations of over $9.5 billion, although there may be some
overlap among capitalization categories. Market capitalization categories
may change based on market conditions or changes in market capitalization
classifications as defined by agencies such as Standard & Poor's (S&P),
the Frank Russell Company (Russell), Morningstar, Inc. (Morningstar) or
Lipper, Inc. (Lipper).
- MID-CAP STOCKS are common stocks of medium sized companies that generally
have market capitalizations ranging from $1.5 billion to $9.5 billion,
although there may be some overlap among capitalization categories.
Market capitalization categories may change based on market conditions or
changes in market capitalization classifications as defined by agencies
such as S&P, Russell, Morningstar or Lipper. With respect to the MFS
MID-CAP GROWTH PORTFOLIO, the Subadviser will consider companies with
market capitalizations equaling or exceeding $250 million but not
exceeding the top range of the Russell MidCap(TM) Growth Index to be
medium sized companies.
- SMALL-CAP STOCKS are common stocks of small companies that generally have
market capitalizations of $1.5 billion or less, although there may be
some overlap among capitalization categories. Market capitalization
categories may change based on market conditions or changes in market
capitalization classifications as defined by agencies such as S&P,
Russell, Morningstar, or Lipper.
- CONVERTIBLE SECURITIES are securities (such as bonds or preferred stocks)
that may be converted into common stock of the same or a different
company.
- WARRANTS are rights to buy common stock of a company at a specified price
during the life of the warrant.
- RIGHTS represent a preemptive right of stockholders to purchase
additional shares of a stock at the time of a new issuance before the
stock is offered to the general public.
EQUITY SWAPS are exchanges of the total return on a stock for the total return
on another asset, usually a diversified equity or fixed income index.
FIRM COMMITMENT AGREEMENTS and WHEN-ISSUED or DELAYED-DELIVERY TRANSACTIONS call
for the purchase or sale of securities at an agreed-upon price on a specified
future date. At the time of delivery of the securities, the value may be more or
less than the purchase price.
38
<PAGE> 52
FIXED INCOME SECURITIES are broadly classified as securities that provide for
periodic payment, typically interest or dividend payments, to the holder of the
security at a stated rate. Most fixed income securities, such as bonds,
represent indebtedness of the issuer and provide for repayment of principal at a
stated time in the future. Others do not provide for repayment of a principal
amount. The issuer of a SENIOR FIXED INCOME SECURITY is obligated to make
payments on this security ahead of other payments to security holders.
Investments in fixed income securities include:
- U.S. GOVERNMENT SECURITIES are issued or guaranteed by the U.S.
government, its agencies and instrumentalities. Some U.S. government
securities are issued or unconditionally guaranteed by the U.S. Treasury.
They are of the highest possible credit quality. While these securities
are subject to variations in market value due to fluctuations in interest
rates, they will be paid in full if held to maturity. Other U.S.
government securities are neither direct obligations of, nor guaranteed
by, the U.S. Treasury. However, they involve federal sponsorship in one
way or another. For example, some are backed by specific types of
collateral; some are supported by the issuer's right to borrow from the
Treasury; some are supported by the discretionary authority of the
Treasury to purchase certain obligations of the issuer; and others are
supported only by the credit of the issuing government agency or
instrumentality.
- CORPORATE DEBT INSTRUMENTS (BONDS, NOTES AND DEBENTURES) are securities
representing a debt of a corporation. The issuer is obligated to repay a
principal amount of indebtedness at a stated time in the future and in
most cases to make periodic payments of interest at a stated rate.
- An INVESTMENT GRADE FIXED INCOME SECURITY is rated in one of the top four
rating categories by a debt rating agency (or is considered of comparable
quality by the Adviser or Subadviser). The two best-known debt rating
agencies are S&P and Moody's Investors Service, Inc.( Moody's).
INVESTMENT GRADE refers to any security rated "BBB" or above by S&P or
"Baa" or above by Moody's.
- A JUNK BOND is a high yield, high risk bond that does not meet the credit
quality standards of an investment grade security.
- PASS-THROUGH SECURITIES involve various debt obligations that are backed
by a pool of mortgages or other assets. Principal and interest payments
made on the underlying asset pools are typically passed through to
investors. Types of pass-through securities include mortgage-backed
securities, collateralized mortgage obligations, commercial
mortgage-backed securities, and asset-backed securities.
- PREFERRED STOCKS receive dividends at a specified rate and have
preference over common stock in the payment of dividends and the
liquidation of assets.
- ZERO-COUPON BONDS, DEFERRED INTEREST BONDS AND PIK BONDS. Zero coupon and
deferred interest bonds are debt obligations issued or purchased at a
significant discount from face value. A step-coupon bond is one in which
a change in interest rate is fixed contractually in advance.
Payable-in-kind ("PIK bonds") are debt obligations that provide that the
issuer thereof may, at its option, pay interest on such bonds in cash or
in the form of additional debt obligations.
FOREIGN SECURITIES are issued by companies located outside of the United States,
including emerging markets. Foreign securities may include foreign corporate and
government bonds, foreign equity securities, foreign investment companies,
passive foreign investment companies (PFICs), American Depositary Receipts
(ADRs) or other similar securities that represent interests in foreign equity
securities, such as European Depositary Receipts (EDRs) and Global Depositary
Receipts (GDRs). An EMERGING MARKET country is generally one with a low or
middle income or economy or that is in the early stages of its industrialization
cycle. For fixed income investments, an emerging market includes those where the
sovereign credit rating is below investment grade. Emerging market countries may
change over time depending on market and economic conditions and the list of
emerging market countries may vary by Adviser or Subadviser.
FORWARD COMMITMENTS are commitments to purchase or sell securities at a future
date. A Portfolio purchasing a forward commitment assumes the risk of any
decline in value of the securities beginning on
39
<PAGE> 53
the date of the agreement. Similarly, a Portfolio selling such securities does
not participate in further gains or losses on the date of the agreement.
HYBRID INSTRUMENTS, such as INDEXED (i.e., Standard and Poor's Depositary
Receipts and World Equity Benchmark Shares) and STRUCTURED SECURITIES, can
combine the characteristics of securities, futures, and options. For example,
the principal amount, redemption, or conversion terms of a security could be
related to the market price of some commodity, currency, or securities index.
Such securities may bear interest or pay dividends at below market (or even
relatively nominal) rates. Under certain conditions, the redemption value of
such an investment could be zero.
ILLIQUID/RESTRICTED SECURITIES are subject to legal or contractual restrictions
that may make them difficult to sell. A security that cannot easily be sold
within seven days will generally be considered illiquid. Certain restricted
securities (such as Rule 144A securities) are not generally considered illiquid
because of their established trading market.
INTEREST RATE SWAPS, CAPS, FLOORS AND COLLARS. Interest rate swaps involve the
exchange by a Portfolio with another party of their respective commitments to
pay or receive interest, such as an exchange of fixed-rate payments for floating
rate payments. The purchase of an interest rate cap entitles the purchaser, to
the extent that a specified index exceeds a predetermined interest rate, to
receive payment of interest on a notional principal amount from the party
selling such interest rate cap. The purchase of an interest rate floor entitles
the purchaser, to the extent that a specified index falls below a predetermined
interest rate, to receive payments of interest on a notional principal amount
from the party selling the interest rate floor. An interest rate collar is the
combination of a cap and a floor that preserves a certain return within a
predetermined range of interest rates.
INVERSE FLOATERS are leveraged inverse floating rate debt instruments. The
interest rate on an inverse floater resets in the opposite direction from the
market rate of interest to which the inverse floater is indexed. An inverse
floater may be considered to be leveraged to the extent that its interest rate
varies by a magnitude that exceeds the magnitude of the change in the index rate
of interest. The higher degree of leverage inherent in inverse floaters is
associated with greater volatility in their market values. Accordingly, the
duration of an inverse floater may exceed its stated final maturity. Certain
inverse floaters may be deemed to be illiquid securities for purposes of a
Portfolio's 15% limitation on investments in such securities.
LOAN PARTICIPATIONS are investments in which a Portfolio acquires some or all of
the interest of a bank or other lending institution in a loan to a corporate
borrower. The highly leveraged nature of many such loans may make such loans
especially vulnerable to adverse changes in economic or market conditions. As a
result, a Portfolio may be unable to sell such investments at an opportune time
or may have to resell them at less than fair market value.
OPTIONS AND FUTURES are contracts involving the right to receive or the
obligation to deliver assets or money depending on the performance of one or
more underlying assets or a market or economic index. An option gives its owner
the right, but not the obligation, to buy ("call") or sell ("put") a specified
amount of a security at a specified price within in a specified time period. A
futures contract is an exchange-traded legal contract to buy or sell a standard
quantity and quality of a commodity, financial instrument, index, etc. at a
specified future date and price.
REGISTERED INVESTMENT COMPANIES are investments by a Portfolio in other
investment companies which are registered in accordance with the federal
securities laws.
REITS (real estate investment trusts) are trusts that invest primarily in
commercial real estate or real estate related loans. The value of an interest in
a REIT may be affected by the value and the cash flows of the properties owned
or the quality of the mortgages held by the trust.
ROLL TRANSACTIONS involve the sale of mortgage or other asset-backed securities
("roll securities") with the commitment to purchase substantially similar (same
type, coupon and maturity) but not identical securities on a specified future
date.
40
<PAGE> 54
SECURITIES LENDING involves a loan of securities by a Portfolio in exchange for
cash or collateral. A Portfolio earns interest on the loan while retaining
ownership of the security.
SHORT SALES: A short sale involves the selling of a security which the
Portfolio does not own in anticipation of a decline in the market value of the
security. In such transactions the Portfolio borrows the security for delivery
to the buyer and must eventually replace the borrowed security for return to the
lender. The Portfolio bears the risk that price at the time of replacement may
be greater than the price at which the security was sold.
SHORT-TERM INVESTMENTS include money market securities such as short-term U.S.
government obligations, repurchase agreements, commercial paper, bankers'
acceptances and certificates of deposit. These securities provide a Portfolio
with sufficient liquidity to meet redemptions and cover expenses.
RISK TERMINOLOGY
ACTIVE TRADING: A strategy used whereby the Portfolio may engage in frequent
trading of portfolio securities to achieve its investment goal. Active trading
may result in high portfolio turnover and correspondingly greater brokerage
commissions and other transaction costs, which will be borne directly by a
Portfolio. In addition, because a Portfolio may sell a security without regard
to how long it has held the security, active trading may have tax consequences
for certain shareholders, involving a possible increase in short-term capital
gains or losses. During periods of increased market volatility, active trading
may be more pronounced. In the "Financial Highlights" section we provide each
Portfolio's portfolio turnover rate for each of the last five fiscal years.
CREDIT QUALITY: The creditworthiness of the issuer is always a factor in
analyzing fixed income securities. An issuer with a lower credit rating will be
more likely than a higher rated issuer to default or otherwise become unable to
honor its financial obligations. This type of issuer will typically issue JUNK
BONDS. In addition to the risk of default, junk bonds may be more volatile, less
liquid, more difficult to value and more susceptible to adverse economic
conditions or investor perceptions than other bonds.
CURRENCY VOLATILITY: The value of a Portfolio's foreign investments may
fluctuate due to changes in currency rates. A decline in the value of foreign
currencies relative to the U.S. dollar generally can be expected to depress the
value of the Portfolio's non-U.S. dollar denominated securities.
DERIVATIVES: A derivative is any financial instrument whose value is based on,
and determined by, another security, index or benchmark (i.e., stock options,
futures, caps, floors, etc.). In recent years, derivative securities have become
increasingly important in the field of finance. Futures and options are now
actively traded on many different exchanges. Forward contracts, swaps, and many
different types of options are regularly traded outside of exchanges by
financial institutions in what are termed "over the counter" markets. Other more
specialized derivative securities often form part of a bond or stock issue. To
the extent a contract is used to hedge another position in the portfolio, the
Portfolio will be exposed to the risks associated with hedging as describe in
this glossary. To the extent an option or futures contract is used to enhance
return, rather than as a hedge, a Portfolio will be directly exposed to the
risks of the contract. Gains or losses from non-hedging positions may be
substantially greater than the cost of the position.
FOREIGN EXPOSURE: Investors in foreign countries are subject to a number of
risks. A principal risk is that fluctuations in the exchange rates between the
U.S. dollar and foreign currencies may negatively affect an investment. In
addition, there may be less publicly available information about a foreign
company and it may not be subject to the same uniform accounting, auditing and
financial reporting standards as U.S. companies. Foreign governments may not
regulate securities markets and companies to the same degree as in the U.S.
Foreign investments will also be affected by local political or economic
developments and governmental actions. Consequently, foreign securities may be
less liquid, more volatile and more difficult to price than U.S. securities.
These risks are heightened when an issuer is in an EMERGING MARKET.
Historically, the markets of EMERGING MARKET countries have been more volatile
than more developed markets; however, such markets can provide higher rates of
return to investors.
41
<PAGE> 55
GROWTH STOCKS: Growth stocks can be volatile for several reasons. Since the
issuers usually reinvest a high portion of earnings in their own business,
growth stocks may lack the comfortable dividend yield associated with value
stocks that can cushion total return in a bear market. Also, growth stocks
normally carry a higher price/earnings ratio than many other stocks.
Consequently, if earnings expectations are not met, the market price of growth
stocks will often go down more than other stocks. However, the market frequently
rewards growth stocks with price increases when expectations are met or
exceeded.
HEDGING: Hedging is a strategy in which a Portfolio uses a derivative security
to reduce certain risk characteristics of an underlying security or portfolio of
securities. While hedging strategies can be very useful and inexpensive ways of
reducing risk, they are sometimes ineffective due to unexpected changes in the
market. Hedging also involves the risk that changes in the value of the
derivative will not match those of the instruments being hedged as expected, in
which case any losses on the instruments being hedged may not be reduced.
ILLIQUIDITY: There may not be a market for certain securities making it
difficult or impossible to sell at the time and the price that the seller would
like.
INTEREST RATE FLUCTUATIONS: The volatility of fixed income securities is due
principally to changes in interest rates. The market value of bonds and other
fixed income securities usually tends to vary inversely with the level of
interest rates. As interest rates rise the value of such securities typically
falls, and as interest rates fall, the value of such securities typically rise.
Longer-term and lower coupon bonds tend to be more sensitive to changes in
interest rates.
MARKET VOLATILITY: The stock and/or bond markets as a whole could go up or down
(sometimes dramatically). This could affect the value of the securities in a
Portfolio's portfolio.
NON-DIVERSIFIED STATUS: Portfolios registered as "non-diversified" investment
companies can invest a larger portion of their assets in the stock of a single
company than can diversified investment companies, and thus they can concentrate
in a smaller number of securities. A non-diversified investment company's risk
may increase because the effect of each security on the Portfolio's performance
is greater.
PASSIVELY MANAGED STRATEGY: A Portfolio following a passively managed strategy
will not deviate from its investment strategy. In the case of "Dogs" of Wall
Street Portfolio, this entails buying and holding thirty stocks selected through
objective selection criteria (except to the extent necessary to comply with
applicable federal tax laws). In other cases, it may involve a passively managed
strategy utilized to achieve investment results that correspond to a particular
market index. Such a Portfolio will not sell stocks in its portfolio and buy
different stocks over the course of a year, even if there are adverse
developments concerning a particular stock, company or industry. There can be no
assurance that the strategy will be successful.
PREPAYMENT: Prepayment risk is the possibility that the principal of the loans
underlying mortgage-backed or other pass-through securities may be prepaid at
any time. As a general rule, prepayments increase during a period of falling
interest rates and decrease during a period of rising interest rates. As a
result of prepayments, in periods of declining interest rates a Portfolio may be
required to reinvest its assets in securities with lower interest rates. In
periods of increasing interest rates, prepayments generally may decline, with
the effect that the securities subject to prepayment risk held by a Portfolio
may exhibit price characteristics of longer-term debt securities.
REAL ESTATE INDUSTRY: Risks include declines in the value of real estate, risks
related to general and local economic conditions, overbuilding and increased
competition, increases in property taxes and operating expenses, changes in
zoning laws, casualty or condemnation losses, fluctuations in rental income,
changes in neighborhood values, the appeal of properties to tenants and
increases in interest rates. If the Portfolio has rental income or income from
the disposition of real property, the receipt of such income may adversely
affect its ability to retain its tax status as a regulated investment company.
In addition, REITs are dependent upon management skill, may not be diversified
and are subject to project financing risks. Such trusts are also subject to
heavy cash flow dependency, defaults by borrowers, self-liquidation and the
possibility of failing to qualify for tax-free pass-through of income under the
Internal Revenue Code of 1986, as amended, and to maintain exemption from
registration under the 1940 Act.
42
<PAGE> 56
SECURITIES SELECTION: A strategy used by a Portfolio, or securities selected by
its portfolio manager, may fail to produce the intended return.
SMALL AND MEDIUM SIZED COMPANIES: Companies with smaller market capitalizations
(particularly under $1.5 billion) tend to be at early stages of development with
limited product lines, market access for products, financial resources, access
to new capital, or depth in management. Consequently, the securities of smaller
companies may not be as readily marketable and may be subject to more abrupt or
erratic market movements. Securities of medium sized companies are also usually
more volatile and entail greater risks than securities of large companies.
UTILITY INDUSTRY: Risks include (i) utility companies' difficulty in earning
adequate returns on investment despite frequent rate increases; (ii)
restrictions on operations and increased costs and delays due to governmental
regulations; (iii) building or construction delays; (iv) environmental
regulations; (v) difficulty of the capital markets in absorbing utility debt and
equity securities; and (vi) difficulties in obtaining fuel at reasonable prices.
43
<PAGE> 57
--------------------------------------------------------------------------------
MANAGEMENT
--------------------------------------------------------------------------------
INVESTMENT ADVISER AND MANAGER
SunAmerica Asset Management Corp. (SAAMCo) serves as investment adviser and
manager for all the Portfolios of the Trust. SAAMCo selects the Subadvisers for
Portfolios, manages the investments for certain Portfolios, provides various
administrative services and supervises the daily business affairs of each
Portfolio.
SAAMCo has received an exemptive order from the Securities and Exchange
Commission that permits SAAMCo, subject to certain conditions, to enter into
agreements relating to the Trust with Subadvisers approved by the Board of
Trustees without obtaining shareholder approval. The exemptive order also
permits SAAMCo, subject to the approval of the Board but without shareholder
approval, to employ new Subadvisers for new or existing Portfolios, change the
terms of particular agreements with Subadvisers or continue the employment of
existing Subadvisers after events that would otherwise cause an automatic
termination of a subadvisory agreement. Shareholders will be notified of any
Subadviser changes. SAAMCo does not presently rely on this exemptive order with
respect to the Trust. Shareholders of a Portfolio have the right to terminate an
agreement with a Subadviser for that Portfolio at any time by a vote of the
majority of the outstanding voting securities of such Portfolio.
SAAMCo, located at The SunAmerica Center, 733 Third Avenue, New York, New York,
10017, is a corporation organized under the laws of the state of Delaware. In
addition to serving as investment adviser and manager of the Trust, SAAMCo
serves as adviser, manager and/or administrator for Anchor Pathway Fund, Anchor
Series Trust, Brazos Mutual Funds, Seasons Series Trust, SunAmerica Style Select
Series, Inc., SunAmerica Equity Funds, SunAmerica Income Funds, SunAmerica Money
Market Funds, Inc. and SunAmerica Strategic Investment Series, Inc.
For the fiscal year ended January 31, 2000, each Portfolio paid SAAMCo a fee
equal to the following percentage of average daily net assets:
<TABLE>
<CAPTION>
PORTFOLIO FEE
--------- ---
<S> <C>
Cash Management Portfolio.................... 0.49%
Corporate Bond Portfolio..................... 0.62%
Global Bond Portfolio........................ 0.69%
High-Yield Bond Portfolio.................... 0.62%
Worldwide High Income Portfolio.............. 1.00%
SunAmerica Balanced Portfolio................ 0.62%
MFS Total Return Portfolio................... 0.66%
Asset Allocation Portfolio................... 0.58%
Utility Portfolio............................ 0.75%
Growth-Income Portfolio...................... 0.53%
Federated Value Portfolio.................... 0.71%
Davis Venture Value Portfolio................ 0.71%
"Dogs" of Wall Street Portfolio.............. 0.60%
Alliance Growth Portfolio.................... 0.60%
MFS Growth and Income Portfolio.............. 0.70%
Putnam Growth Portfolio...................... 0.76%
Real Estate Portfolio........................ 0.80%
MFS Mid-Cap Growth Portfolio................. 0.75%
Aggressive Growth Portfolio.................. 0.70%
</TABLE>
44
<PAGE> 58
<TABLE>
<CAPTION>
PORTFOLIO FEE
--------- ---
<S> <C>
International Growth and Income Portfolio.... 0.98%
Global Equities Portfolio.................... 0.72%
International Diversified Equities
Portfolio.................................. 1.00%
Emerging Markets Portfolio................... 1.25%
</TABLE>
INFORMATION ABOUT THE SUBADVISERS
ALLIANCE CAPITAL MANAGEMENT L.P. (Alliance) is a Delaware limited partnership
with principal offices at 1345 Avenue of the Americas, New York, New York 10105.
Alliance is a major international investment manager whose clients primarily are
major corporate employee benefit funds, investment companies, foundations,
endowment funds and public employee retirement systems. Alliance serves as
investment manager of employee benefit fund assets for 31 of the Fortune 100
companies.
DAVIS SELECTED ADVISERS, L.P. (Davis Selected) is located at 2949 East Elvira
Road, Suite 101, Tucson, AZ 85706. Davis Selected provides advisory services to
other investment companies. The Subadvisory Agreement with Davis Selected
provides that Davis Selected may delegate any of its responsibilities under the
agreement to one of its affiliates, including Davis Selected Advisers -- NY,
Inc., a wholly-owned subsidiary; however Davis Selected remains ultimately
responsible (subject to supervision by SAAMCo) for the assets of the Portfolios
allocated to it.
FEDERATED INVESTMENT COUNSELING (Federated) is located at Federated Investors
Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779. Federated and
its affiliate companies serves as investment adviser to a number of investment
companies and private accounts.
GOLDMAN SACHS ASSET MANAGEMENT (GSAM), an affiliate of Goldman, Sachs & Co.
(Goldman Sachs), is located at 32 Old Slip, New York, NY 10005. Goldman Sachs
registered as an investment adviser in 1981. GSAM serves a wide range of clients
including private and public pension funds, endowments, foundations, banks,
thrifts, insurance companies, corporations, and private investors and family
groups. The asset management services are divided into the following areas:
institutional fixed income investment management; global currency management;
institutional equity investment management; fund management; money market mutual
fund management and administration; and private asset management.
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL (GSAM-International), an affiliate
of Goldman Sachs, is located at Procession House, 55 Ludgate Hill, London
EC4M7JW, England. GSAM-International has been a member of the Investment
Management Regulatory Organization Limited, a United Kingdom self-regulatory
organization, since 1990 and a registered investment adviser since 1991. In
performing their subadvisory services, GSAM and GSAM-International, while
remaining ultimately responsible for the management of the Portfolio, are able
to draw upon the research and expertise of their affiliate offices, for
portfolio decisions and management with respect to certain portfolio securities.
MASSACHUSETTS FINANCIAL SERVICES COMPANY (MFS) is America's oldest mutual fund
organization and, with its predecessor organizations, has a history of money
management dating from 1924 and the founding of the first mutual fund in the
United States. MFS is located at 500 Boylston Street, Boston, Massachusetts,
02116.
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT, D/B/A MORGAN STANLEY ASSET
MANAGEMENT (MSAM) offers investment management and fiduciary services to taxable
and tax-exempt funds and institutions, international organizations and
individuals investing in U.S. and international equity and fixed income
securities. MSAM is located at 1221 Avenue of the Americas, New York, New York
10020.
PUTNAM INVESTMENT MANAGEMENT, INC. (Putnam), is a Massachusetts corporation with
principal offices at One Post Office Square, Boston, Massachusetts. Putnam has
been managing mutual funds since 1937 and serves as investment adviser to the
funds in the Putnam Family.
SAAMCo compensated the various Subadvisers out of the advisory fees that it
received from the respective Portfolios. SAAMCo may terminate any agreement with
another Subadviser without shareholder approval.
45
<PAGE> 59
PORTFOLIO MANAGEMENT
The primary investment manager(s) and/or management team(s) for each portfolio
is set forth in the following table.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Management Portfolio SAAMCo - Fixed Income Investment The Fixed Income
Team Investment Team has
been responsible for
the management of this
portfolio since its
inception in 1993.
----------------------------------------------------------------------------------------------------------------
Corporate Bond Portfolio Federated - Joseph M. Balestrino Mr. Balestrino joined
Co-Portfolio Manager and Federated in 1986 as a
Senior Vice President Project Manager in the
Product Design
Department and became
an Assistant Vice
President and
Investment Analyst in
1991. He became a Vice
President and
portfolio manager in
1995 and a Senior Vice
President in 1998.
- Mark E. Durbiano Mr. Durbiano joined
Co-Portfolio Manager Federated in 1982 as
Senior Vice President an Investment Analyst
and became a Vice
President and
portfolio manager in
1988. He has been a
Senior Vice President
since 1996.
----------------------------------------------------------------------------------------------------------------
Global Bond Portfolio GSAM-International - Stephen C. Fitzgerald Mr. Fitzgerald,
Senior Portfolio Manager Managing Director and
Chief Investment
Officer for
International Fixed
Income in the London
office since November
1998, joined GSAM
International in 1992
as an Executive
Director and Portfolio
Manager.
----------------------------------------------------------------------------------------------------------------
</TABLE>
46
<PAGE> 60
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- Andrew F. Wilson Mr. Wilson, a Managing
Senior Portfolio Manager Director and senior
portfolio manager for
international fixed
income in the London
office, joined GSAM
International in
December 1995 as an
Executive Director and
portfolio manager.
- Kevin Zhao Mr. Zhao joined GSAM-
Executive Director International in
and Senior December 1994. From
Portfolio Manager 1993 to 1994 he was a
proprietary trader for
Goldman Sachs where he
traded global bonds,
currencies, equities
and various derivative
products.
----------------------------------------------------------------------------------------------------------------
High-Yield Bond Portfolio SAAMCo - John W. Risner Mr. Risner joined
Vice President and SAAMCo in 1997 as a
Portfolio Manager Vice President and
portfolio manager.
Prior to joining
SAAMCo, he served as
Senior Portfolio
Manager of the Value
Line Aggressive Income
Trust and the Value
Line Convertible Fund
from 1992 to 1997.
----------------------------------------------------------------------------------------------------------------
Worldwide High Income MSAM - Robert Angevine Mr. Angevine is a
Portfolio Principal and Principal of MSAM and
Co-Portfolio Manager a portfolio manager of
MSAM's high-yield
investments. He joined
the firm in 1988 as a
portfolio manager.
- Gordon W. Loery Mr. Loery has been a
Co-Portfolio Manager Principal and
portfolio manager of
MSAM since 1996. Mr.
Loery joined MSAM in
1990 as a fixed income
analyst.
----------------------------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE> 61
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- Stephen F. Esser Mr. Esser is a
Managing Director and Managing Director of
Co-Portfolio MSAM and has been a
Manager portfolio manager with
MSAM's affiliate
Miller Anderson &
Sherrerd, LLP since
1988.
- Abigail McKenna Ms. McKenna is a
Principal and Principal and
Co-Portfolio Manager portfolio manager of
MSAM. She was a Senior
Portfolio Manager at
MetLife Investment
Management Corp. from
1995 to 1996 and a
Limited Partner at
Weiss Peck & Greer
from 1991 to 1995. Ms.
McKenna joined MSAM in
1996.
----------------------------------------------------------------------------------------------------------------
SunAmerica Balanced SAAMCo - Francis D. Gannon Mr. Gannon has been a
Portfolio Senior Vice President and portfolio manager with
Portfolio Manager SAAMCo since 1996. He
joined SAAMCo in 1993
as an equity analyst.
----------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio MFS - David M. Calabro Mr. Calabro joined MFS
Senior Vice President and in 1992 as a Vice
Portfolio Manager President and equity
analyst. He became a
portfolio manager in
1993 and was promoted
to Senior Vice
President in 1998.
- Geoffrey L. Kurinsky Mr. Kurinsky, the
Senior Vice President and manager of the
Portfolio Manager Portfolio's fixed
income securities,
joined MFS in 1987 as
a research analyst. He
became a Vice
President and
portfolio manager in
1989. In 1993, he was
promoted to Senior
Vice President.
----------------------------------------------------------------------------------------------------------------
</TABLE>
48
<PAGE> 62
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- Constantinos G. Mokas Mr. Mokas, manager of
Vice President and the Portfolio's
Portfolio Manager convertible
securities, joined MFS
in 1990 as a research
analyst. He was
promoted to Assistant
Vice President in
1994, Vice President
in 1996 and portfolio
manager in 1998.
- Lisa B. Nurme Ms. Nurme, a manager
Senior Vice President and of the Portfolio's
Portfolio Manager common stock
investments, became a
portfolio manager in
1995 and was promoted
to Senior Vice
President in 1998.
- Kenneth J. Enright Mr. Enright, a manager
Vice President and of the Portfolio's
Portfolio Manager common stock portion,
joined MFS in 1986 as
a research analyst. He
became an Assistant
Vice President in
1987, Vice President
in 1988, and portfolio
manager in 1993.
----------------------------------------------------------------------------------------------------------------
Asset Allocation Portfolio GSAM - Eileen Rominger Ms. Rominger joined
Managing Director GSAM as a senior
and Senior Portfolio portfolio manager in
Manager 1999. From 1981 to
(value portion) 1999 she was employed
at Oppenheimer
Capital, most recently
as a senior portfolio
manager.
- George D. Adler Mr. Adler joined GSAM
Vice President and Senior in 1997 as a portfolio
Portfolio Manager manager. From 1990 to
(equity portion) 1997, he was a
portfolio manager at
Liberty Investment
Management, Inc.
("Liberty").
- Robert G. Collins Mr. Collins joined
Vice President and Senior GSAM in 1997 as a
Portfolio Manager portfolio manager.
(equity portion) From 1991 to 1997, he
was a portfolio
manager at Liberty.
----------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE> 63
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- Herbert E. Ehlers Mr. Ehlers joined GSAM
Managing Director and in 1997 as a senior
Senior Portfolio Manager portfolio manager and
(equity portion) Chief Investment
Officer of the Growth
Equity Team. From 1994
to 1997, he was the
Chief Investment
Officer and Chairman
at Liberty. He was a
portfolio manager and
president at Liberty's
predecessor firm,
Eagle Asset Management
("Eagle"), from 1984
to 1994.
- Gregory H. Ekizian Mr. Ekizian joined
Vice President and Senior GSAM in 1997 as a
Portfolio Manager portfolio manager and
(equity portion) Co-Chair of the Growth
Equity Investment
Committee in 1997.
From 1990 to 1997, he
was a portfolio
manager at Liberty and
its predecessor firm,
Eagle.
- David G. Shell Mr. Shell joined GSAM
Vice President and Senior in 1997 as a Vice
Portfolio Manager President and
(equity portion) portfolio manager.
From 1987 to 1997, he
was a portfolio
manager at Liberty and
its predecessor firm,
Eagle.
- Ernest C. Segundo, Jr. Mr. Segundo joined
Vice President and Senior GSAM in 1997 as a
Portfolio Manager portfolio manager.
(equity portion) From 1992 to 1997, he
was a portfolio
manager at Liberty.
- Jonathan A. Beinner Mr. Beinner has been
Managing Director and Managing Director of
Co-Head U.S. Fixed Income GSAM's U.S. Fixed
(fixed income portion) Income Department
since 1997. He joined
the Fixed Income Group
in 1990 as an
associate portfolio
manager.
----------------------------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE> 64
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- C. Richard Lucy Mr. Lucy has been Co-
Managing Director (fixed Managing Director of
income portion) and Co-Head GSAM's Fixed Income
U.S. Fixed Income Department since 1997.
He joined the Fixed
Income Group in 1992
as a Vice President
and portfolio manager.
----------------------------------------------------------------------------------------------------------------
Utility Portfolio Federated - Linda A. Duessel Ms. Duessel joined
Co-Portfolio Manager and Federated in 1991 as
Senior Vice President an Investment Analyst
and Assistant Vice
President. She became
a Vice President and
portfolio manager in
1995, and a Senior
Vice President in
2000.
- Steven J. Lehman Mr. Lehman joined
Co-Portfolio Manager and Federated in 1997 as a
Vice President Vice President and
portfolio manager.
From 1985 to 1997, he
served as a portfolio
manager and Vice
President at First
Chicago NBD.
----------------------------------------------------------------------------------------------------------------
Growth-Income Portfolio Alliance - Michael R. Baldwin Mr. Baldwin joined the
Portfolio Manager and company in 1989 as a
Senior Vice President research analyst. He
became a portfolio
manager in 1991 and
was promoted to Senior
Vice President and
Associate Director of
Research in 1996.
----------------------------------------------------------------------------------------------------------------
Federated Value Portfolio Federated - Arthur J. Barry Mr. Barry joined
Co-Portfolio Manager and Federated in 1994 as
Vice President an Investment Analyst
and was promoted to an
Assistant Vice
President and
portfolio manager in
April 1997. He was
then promoted to Vice
President in 1998.
----------------------------------------------------------------------------------------------------------------
</TABLE>
51
<PAGE> 65
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- Michael P. Donnelly Mr. Donnelly joined
Co-Portfolio Manager and Federated in 1989 as
Senior Vice President an Investment Analyst.
He served as an
Assistant Vice
President of an
affiliate of Federated
from 1992 to 1994, a
Vice President from
1994 to 1999, and a
Senior Vice President
since 1999.
----------------------------------------------------------------------------------------------------------------
Davis Venture Value Davis Selected - Christopher C. Davis Mr. Davis has been
Portfolio Portfolio Manager employed by Davis
Selected since 1989 as
a research analyst,
assistant portfolio
manager, co-portfolio
manager, and portfolio
manager.
- Kenneth C. Feinberg Mr. Feinberg has been
Portfolio Manager employed by Davis
Selected since 1994 as
a research analyst,
assistant portfolio
manager, and portfolio
manager.
----------------------------------------------------------------------------------------------------------------
"Dogs" of Wall Street SAAMCo - Francis D. Gannon See above.
Portfolio Senior Vice President and
Portfolio Manager
----------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio Alliance - James G. Reilly Mr. Reilly joined the
Executive Vice President company in 1984 as a
and Portfolio Manager research analyst. He
became a portfolio
manager in 1993 and
was promoted to an
Executive Vice
President in 1999.
----------------------------------------------------------------------------------------------------------------
</TABLE>
52
<PAGE> 66
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MFS Growth and Income MFS - John D. Laupheimer, Jr. Mr. Laupheimer joined
Portfolio Senior Vice President and MFS in 1981 as a
Portfolio Manager research analyst. He
became an Investment
Officer in 1988,
Assistant Vice
President in 1984,
Vice President in
1986, portfolio
manager in 1987,
Senior Vice President
in 1995 and Director
of Equity Research in
1999.
- Mitchell D. Dynan Mr. Dynan joined MFS
Senior Vice President and in 1986 as a research
Portfolio Manager analyst. He became an
Assistant Vice
President in 1987,
Vice President in
1988, portfolio
manager in 1995 and
Senior Vice President
in 1999.
----------------------------------------------------------------------------------------------------------------
Putnam Growth Portfolio Putnam - C. Beth Cotner Ms. Cotner joined the
Managing Director and company in 1995 as
Chief Investment Officer Senior Vice President
and Senior Portfolio
Manager. Prior to that
time, she was an
Executive Vice
President of Kemper
Financial Services
from 1984 to 1995.
- Richard England Mr. England joined the
Senior Vice President and company in 1992 as a
Senior Portfolio Manager Global Equity Analyst.
In 1994, he was
promoted to Associate
Director of Research
and then joined the
Growth Equity Team in
1996 as a Senior
Portfolio Manager.
- Manuel H. Weiss Mr. Weiss joined the
Senior Vice President and company in 1987 as a
Senior Portfolio Manager portfolio manager to
head the quantitative
effort in the
development of the
Core Growth Equity
product.
----------------------------------------------------------------------------------------------------------------
</TABLE>
53
<PAGE> 67
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- David J. Santos Mr. Santos joined the
Senior Vice President and company in 1986 as a
Portfolio Manager Pricing Operations
Manager and moved to
the investment
management side in
1991. He became a
portfolio manager in
1992.
----------------------------------------------------------------------------------------------------------------
Real Estate Portfolio Davis Selected - Andrew A. Davis Mr. Davis has been
Portfolio Manager employed by Davis
Selected since 1994 as
a research analyst,
assistant portfolio
manager, co-portfolio
manager and portfolio
manager.
----------------------------------------------------------------------------------------------------------------
MFS Mid-Cap Growth MFS - Mark Regan Mr. Regan joined MFS
Portfolio Senior Vice President and as a research analyst
Portfolio Manager in 1989. He was named
investment officer in
1990, Assistant Vice
President in 1991,
Vice President in
1992, portfolio
manager in 1998 and
Senior Vice President
in 1999.
- David E. Sette-Ducati Mr. Sette-Ducati
Vice President and joined MFS in 1995 as
Portfolio Manager a research analyst. He
became an Investment
Officer in 1997, Vice
President in 1999, and
portfolio manager in
February 2000.
----------------------------------------------------------------------------------------------------------------
Aggressive Growth Portfolio SAAMCo - Donna M. Calder Ms. Calder joined the
Vice President and firm in 1998 as a Vice
Portfolio Manager President and
portfolio manager.
Prior to joining
SAAMCo, she was the
founder and General
Partner of Manhattan
Capital Partners, L.P.
from 1991 to 1995.
----------------------------------------------------------------------------------------------------------------
</TABLE>
54
<PAGE> 68
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Growth and Putnam - Deborah F. Kuenstner Ms. Kuenster joined
Income Portfolio Chief Investment Officer Putnam as a Senior
and Managing Director Vice President and
Senior Portfolio
Manager in March 1997.
Ms. Kuenstner was
Senior Portfolio
Manager at Dupont
Pension Fund
Management from 1989
to 1997.
- George W. Stairs Mr. Stairs joined
Senior Vice President and Putnam as a Global
Portfolio Manager Equity research
analyst in 1994. In
1997, he became a
Senior Vice President
and Portfolio Manager.
Mr. Stairs was an
Associate at Value
Quest Ltd. from 1992
to 1994.
----------------------------------------------------------------------------------------------------------------
Global Equities Portfolio Alliance - Stephen Beinhacker Mr. Beinhacker joined
Portfolio Manager, the company in 1992 as
Director and Senior Vice Director of
President International
Quantitative Stock
Analysis and portfolio
manager. He was
promoted to Senior
Vice President in
1998.
----------------------------------------------------------------------------------------------------------------
International Diversified MSAM - Barton Biggs Mr. Biggs has been a
Equities Portfolio Chairman, Chief Chairman and a
Investment Officer and Director of MSAM since
Co-Portfolio Manager 1980 and a Managing
Director of Morgan
Stanley & Co.
Incorporated since
1975.
- Ann Thivierge Ms. Thivierge joined
Managing Director and MSAM in 1986 and is
Co-Portfolio Manager currently a Managing
Director.
----------------------------------------------------------------------------------------------------------------
</TABLE>
55
<PAGE> 69
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME AND TITLE OF EXPERIENCE
ADVISER/ PORTFOLIO MANAGER (AND/
SUBADVISER OR MANAGEMENT TEAM)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Emerging Markets Portfolio Putnam - Thomas R. Haslett Mr. Haslett joined
Managing Director, Chief Putnam as Managing
Investment Officer and Co- Director, Chief
Portfolio Manager Investment Officer and
portfolio manager in
1996. He was a
Managing Director of
Montgomery Asset
Management, Ltd. from
1992 to 1996.
- J. Peter Grant Mr. Grant joined
Senior Vice President and Putnam in 1973 as a
Co-Portfolio Manager Vice President and
research analyst. He
became a portfolio
manager in 1974 and a
Senior Vice President
in 1997.
----------------------------------------------------------------------------------------------------------------
</TABLE>
CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT
State Street Bank and Trust Company, Boston, Massachusetts, acts as Custodian of
the Trust's assets as well as Transfer and Dividend Paying Agent and in so doing
performs certain bookkeeping, data processing and administrative services.
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The following Financial Highlights tables for each Portfolio is intended to help
you understand the Portfolios' financial performance for the past 5 years.
Certain information reflects financial results for a single Portfolio share. The
total returns in each table represent the rate that an investor would have
earned on an investment in the Portfolio (assuming reinvestment of all dividends
and distributions). This information has been audited by PricewaterhouseCoopers
LLP, whose report, along with each Portfolio's financial statements, are
included in the Trust's annual report to shareholders, which is available upon
request.
56
<PAGE> 70
---------------------
SUNAMERICA SERIES TRUST
FINANCIAL HIGHLIGHTS*
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS DIVIDENDS NET NET
ASSET INVEST- NET REALIZED FROM DECLARED FROM FROM NET ASSET ASSETS
VALUE MENT & UNREALIZED INVEST- NET REALIZED VALUE END OF
PERIOD BEGINNING INCOME GAIN (LOSS) ON MENT INVESTMENT GAIN ON END OF TOTAL PERIOD
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS PERIOD RETURN*** (000'S)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash Management Portfolio
11/30/95 $10.47 $0.56 $ 0.01 $ 0.57 $(0.34) $ -- $10.70 5.59% $ 90,731
11/30/96 10.70 0.53 (0.02) 0.51 (0.45) -- 10.76 4.92 91,247
11/30/97 10.76 0.53 0.01 0.54 (0.56) -- 10.74 5.22 156,119
11/30/98 10.74 0.54 (0.02) 0.52 (0.68) -- 10.58 5.05 223,640
1/31/99# 10.58 0.08 0.01 0.09 -- -- 10.67 0.85 277,370
1/31/00 10.67 0.51 -- 0.51 (0.24) -- 10.94 4.85 466,588
Corporate Bond Portfolio
11/30/95 9.75 0.60 1.00 1.60 (0.53) -- 10.82 17.01 29,475
11/30/96 10.82 0.65 0.03 0.68 (0.41) -- 11.09 6.51 37,207
11/30/97 11.09 0.77 0.21 0.98 (0.53) -- 11.54 9.26 62,272
11/30/98 11.54 0.77 (0.02) 0.75 (0.46) -- 11.83 6.61 143,561
1/31/99# 11.83 0.12 0.04 0.16 -- -- 11.99 1.35 158,804
1/31/00 11.99 0.81 (1.15) (0.34) (0.53) -- 11.12 (2.75) 184,309
Global Bond Portfolio
11/30/95 9.83 0.60 0.97 1.57 (0.38) -- 11.02 16.40 59,759
11/30/96 11.02 0.59 0.54 1.13 (0.75) -- 11.40 10.94 68,221
11/30/97 11.40 0.52 0.38 0.90 (0.75) (0.04) 11.51 8.43 89,043
11/30/98 11.51 0.49 0.78 1.27 (0.79) (0.22) 11.77 11.75 115,428
1/31/99# 11.77 0.07 0.11 0.18 -- -- 11.95 1.53 122,306
1/31/00 11.95 0.42 (0.66) (0.24) (0.47) (0.41) 10.83 (1.86) 127,145
High-Yield Bond Portfolio
11/30/95 10.32 1.11 0.12 1.23 (1.02) -- 10.53 12.64 82,174
11/30/96 10.53 0.98 0.48 1.46 (0.95) -- 11.04 14.86 113,229
11/30/97 11.04 1.04 0.48 1.52 (0.74) -- 11.82 14.53 195,639
11/30/98 11.82 1.14 (1.24) (0.10) (0.66) (0.08) 10.98 (1.26) 284,580
1/31/99# 10.98 0.18 (0.02) 0.16 -- -- 11.14 1.46 293,037
1/31/00 11.14 1.09 (0.55) 0.54 (1.14) -- 10.54 5.09 310,032
Worldwide High Income Portfolio
11/30/95 9.95 1.10 0.47 1.57 (0.10) -- 11.42 16.02 21,515
11/30/96 11.42 1.25 1.60 2.85 (0.87) (0.05) 13.35 26.87 49,204
11/30/97 13.35 0.98 0.68 1.66 (0.90) (0.91) 13.20 14.17 125,224
11/30/98 13.20 1.07 (2.61) (1.54) (0.61) (0.74) 10.31 (13.74) 121,290
1/31/99# 10.31 0.16 (0.35) (0.19) -- -- 10.12 (1.84) 116,977
1/31/00 10.12 1.13 0.67 1.80 (1.33) -- 10.59 19.22 124,404
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME TO
PERIOD AVERAGE NET AVERAGE PORTFOLIO
ENDED ASSETS NET ASSETS TURNOVER
---------- --------------------------------------
<S> <C> <C> <C>
11/30/95 0.67% 5.32% --%
11/30/96 0.62 4.90 --
11/30/97 0.63 5.06 --
11/30/98 0.58 4.97 --
1/31/99 0.62+ 5.02+ --
1/31/00 0.53 4.82 --
11/30/95 0.96++ 5.93++ 412
11/30/96 0.97 6.11 338
11/30/97 0.91 6.99 49
11/30/98 0.77 6.61 15
1/31/99 0.80+ 6.16+ 4
1/31/00 0.71 7.05 37
11/30/95 0.95 5.89 339
11/30/96 0.89 5.44 223
11/30/97 0.90 4.70 360
11/30/98 0.85 4.27 210
1/31/99 0.97+ 3.65+ 30
1/31/00 0.84 3.68 189
11/30/95 0.80 10.80 174
11/30/96 0.77 9.41 107
11/30/97 0.75 9.26 243
11/30/98 0.69 9.75 128
1/31/99 0.72+ 9.71+ 17
1/31/00 0.67 10.00 105
11/30/95 1.30 10.46 176
11/30/96 1.18 10.45 177
11/30/97 1.10 7.58 146
11/30/98 1.08@ 8.90 158
1/31/99 1.11+@ 9.57+@ 12
1/31/00 1.12@ 10.68@ 116
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
@ Net of custody credits of 0.01%, 0.01% and 0.02%, for the periods ending
November 30, 1998, January 31, 1999 and January 31, 2000, respectively.
++ During the below stated periods, the investment adviser waived a
portion of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio
of net investment income (loss) to average net assets would have been
as follows:
<TABLE>
<CAPTION>
EXPENSES NET INVESTMENT INCOME (LOSS)
--------------------------------------------- ---------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 11/95 11/96 11/97 11/98 1/99+ 1/00
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------- ---------------------------------------------
Cash Management....... 0.67% 0.62% 0.63% 0.58% 0.62% 0.53% 5.32% 4.90% 5.06% 4.97% 5.02% 4.82%
Corporate Bond........ 0.97 0.97 0.91 0.77 0.80 0.71 5.92 6.11 6.99 6.61 6.16 7.05
Global Bond........... 0.95 0.89 0.90 0.85 0.97 0.84 5.89 5.44 4.70 4.27 3.65 3.68
High-Yield Bond....... 0.80 0.77 0.75 0.69 0.72 0.67 10.80 9.41 9.26 9.75 9.71 10.00
Worldwide High
Income.............. 1.30 1.18 1.10 1.08 1.11 1.12 10.46 10.45 7.58 8.90 9.57 10.68
</TABLE>
57
<PAGE> 71
---------------------
SUNAMERICA SERIES TRUST
FINANCIAL HIGHLIGHTS* (continued)
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS DIVIDENDS NET NET
ASSET INVEST- NET REALIZED FROM DECLARED FROM FROM NET ASSET ASSETS
VALUE MENT & UNREALIZED INVEST- NET REALIZED VALUE END OF
PERIOD BEGINNING INCOME GAIN (LOSS) ON MENT INVESTMENT GAIN ON END OF TOTAL PERIOD
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS PERIOD RETURN*** (000'S)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SunAmerica Balanced Portfolio
6/3/96-
11/30/96 $10.00 $0.10 $ 1.03 $ 1.13 $ -- $ -- $11.13 11.30% $ 10,224
11/30/97 11.13 0.23 2.15 2.38 (0.04) (0.02) 13.45 21.48 44,621
11/30/98 13.45 0.30 2.33 2.63 (0.11) (0.36) 15.61 19.81 149,242
1/31/99# 15.61 0.05 1.58 1.63 -- -- 17.24 10.44 194,878
1/31/00 17.24 0.36 1.80 2.16 (0.12) (0.22) 19.06 12.76 509,054
MFS Total Return Portfolio
11/30/95 9.96 0.34 2.23 2.57 (0.05) -- 12.48 25.89 32,429
11/30/96 12.48 0.34 1.31 1.65 (0.19) (0.31) 13.63 13.75 70,021
11/30/97 13.63 0.37 1.39 1.76 (0.23) (0.41) 14.75 13.52 95,721
11/30/98 14.75 0.36 1.56 1.92 (0.31) (1.40) 14.96 13.54 131,440
1/31/99# 14.96 0.06 0.82 0.88 -- -- 15.84 5.88 145,332
1/31/00 15.84 0.48 (0.38) 0.10 (0.29) (1.77) 13.88 0.29 208,919
Asset Allocation Portfolio
11/30/95 10.32 0.42 2.24 2.66 (0.20) (0.04) 12.74 26.10 199,836
11/30/96 12.74 0.48 2.00 2.48 (0.31) (0.39) 14.52 20.27 316,388
11/30/97 14.52 0.44 2.55 2.99 (0.40) (0.90) 16.21 21.97 526,585
11/30/98 16.21 0.48 0.08 0.56 (0.35) (1.61) 14.81 2.85 713,045
1/31/99# 14.81 0.07 0.15 0.22 -- -- 15.03 1.49 724,516
1/31/00 15.03 0.40 0.37 0.77 (0.48) (0.80) 14.52 5.51 699,063
Utility Portfolio
6/3/96-
11/30/96 10.00 0.24 0.51 0.75 -- -- 10.75 7.50 6,299
11/30/97 10.75 0.36 1.91 2.27 (0.09) (0.02) 12.91 21.26 24,366
11/30/98 12.91 0.42 1.62 2.04 (0.16) (0.33) 14.46 15.98 68,049
1/31/99# 14.46 0.08 0.03 0.11 -- -- 14.57 0.76 77,323
1/31/00 14.57 0.48 0.23 0.71 (0.24) (0.62) 14.42 5.01 120,159
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME TO
PERIOD AVERAGE NET AVERAGE PORTFOLIO
ENDED ASSETS NET ASSETS TURNOVER
---------- --------------------------------------
<S> <C> <C> <C>
6/3/96
11/30/96 1.00%+++ 1.92%+++ 40%
11/30/97 1.00 1.82 143
11/30/98 0.78 2.10 111
1/31/99 0.74+@ 1.73+@ 26
1/31/00 0.66 2.01 197
11/30/95 0.98++ 3.08++ 153
11/30/96 0.84 2.74 194
11/30/97 0.82 2.63 271
11/30/98 0.77 2.43 106
1/31/99 0.81+ 2.40+ 86
1/31/00 0.75@ 3.18@ 116
11/30/95 0.81 3.62 207
11/30/96 0.74 3.66 200
11/30/97 0.68 2.88 176
11/30/98 0.64 3.15 156
1/31/99 0.66+ 2.60+ 30
1/31/00 0.63 2.70 191
6/3/96
11/30/96 1.05+++ 4.41+++ 24
11/30/97 1.05++ 3.15++ 77
11/30/98 1.01 3.04 72
1/31/99 0.93+ 3.02+ 12
1/31/00 0.84 3.31 121
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
@ Net of custody credits of 0.01%
++ During the below stated periods, the investment adviser waived a
portion of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio
of net investment income (loss) to average net assets would have been
as follows:
<TABLE>
<CAPTION>
EXPENSES NET INVESTMENT INCOME (LOSS)
-------------------------------------------- ---------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 11/95 11/96 11/97 11/98 1/99+ 1/00
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------- ---------------------------------------------
SunAmerica Balanced.... --% 1.43% 1.00% 0.78% 0.74% 0.66% --% 1.49% 1.82% 2.10% 1.73% 2.01%
MFS Total Return....... 1.11 0.84 0.82 0.77 0.81 0.75 2.95 2.74 2.63 2.43 2.40 3.18
Asset Allocation....... 0.81 0.74 0.68 0.64 0.66 0.63 3.62 3.66 2.88 3.15 2.60 2.70
Utility................ -- 1.93 1.24 1.01 0.93 0.84 -- 3.53 2.96 3.04 3.02 3.31
</TABLE>
58
<PAGE> 72
---------------------
SUNAMERICA SERIES TRUST
FINANCIAL HIGHLIGHTS* (continued)
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS DIVIDENDS NET
ASSET INVEST- NET REALIZED FROM DECLARED FROM FROM NET ASSET
VALUE MENT & UNREALIZED INVEST- NET REALIZED VALUE
PERIOD BEGINNING INCOME GAIN (LOSS) ON MENT INVESTMENT GAIN ON END OF TOTAL
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS PERIOD RETURN***
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth-Income Portfolio
11/30/95 $10.33 $0.17 $ 3.31 $ 3.48 $(0.10) $ -- $13.71 33.89
11/30/96 13.71 0.18 3.48 3.66 (0.12) (0.43) 16.82 27.41
11/30/97 16.82 0.17 4.69 4.86 (0.13) (0.73) 20.82 30.11
11/30/98 20.82 0.17 4.33 4.50 (0.13) (0.96) 24.23 21.91
1/31/99# 24.23 0.02 3.63 3.65 -- -- 27.88 15.06
1/31/00 27.88 0.16 4.75 4.91 (0.15) (1.40) 31.24 18.37
Federated Value Portfolio
6/3/96-
11/30/96 10.00 0.07 1.01 1.08 -- -- 11.08 10.80
11/30/97 11.08 0.13 2.72 2.85 (0.03) -- 13.90 25.75
11/30/98 13.90 0.17 2.35 2.52 (0.06) (0.30) 16.06 18.22
1/31/99# 16.06 0.02 0.54 0.56 -- -- 16.62 3.49
1/31/00 16.62 0.20 (0.14) 0.06 (0.12) (0.69) 15.87 0.17
Davis Venture Value Portfolio
11/30/95 9.78 0.17 3.55 3.72 (0.03) -- 13.47 38.17
11/30/96 13.47 0.18 3.46 3.64 (0.09) (0.12) 16.90 27.44
11/30/97 16.90 0.19 4.73 4.92 (0.09) (0.26) 21.47 29.62
11/30/98 21.47 0.20 2.23 2.43 (0.12) (0.68) 23.10 11.36
1/31/99# 23.10 0.03 1.25 1.28 -- -- 24.38 5.54
1/31/00 24.38 0.13 3.06 3.19 (0.20) (0.93) 26.44 13.42
"Dogs" of Wall Street Portfolio
4/1/98-
11/30/98 10.00 0.11 (0.30) (0.19) -- -- 9.81 (1.90)
1/31/99# 9.81 0.02 (0.23) (0.21) -- -- 9.60 (2.14)
1/31/00 9.60 0.21 (1.12) (0.91) (0.05) (0.26) 8.38 (10.02)
<CAPTION>
NET RATIO OF NET
ASSETS RATIO OF INVESTMENT
END OF EXPENSES TO INCOME TO
PERIOD PERIOD AVERAGE NET AVERAGE PORTFOLIO
ENDED (000'S) ASSETS NET ASSETS TURNOVER
---------- ---------------------------------------------------
<S> <C> <C> <C> <C>
11/30/95 $ 171,281 0.77% 1.42% 59%
11/30/96 325,463 0.72 1.21 82
11/30/97 622,062 0.65 0.89 44
11/30/98 1,019,590 0.60 0.78 53
1/31/99# 1,206,113 0.60+ 0.55+ 16
1/31/00 1,828,340 0.56 0.56 43
6/3/96-
11/30/96 12,460 1.05+++ 1.26+++ 30
11/30/97 59,024 1.03 1.03 46
11/30/98 145,900 0.83 1.13 51
1/31/99# 159,176 0.86+ 0.75+ 4
1/31/00 208,488 0.77 1.17 34
11/30/95 154,908 1.00++ 1.43++ 18
11/30/96 516,413 0.85 1.21 22
11/30/97 1,140,053 0.79 0.98 22
11/30/98 1,725,411 0.75 0.89 25
1/31/99# 1,840,354 0.77+ 0.86+ 5
1/31/00 2,303,994 0.74 0.51 23
4/1/98-
11/30/98 65,283 0.85+++ 2.04+++ --
1/31/99# 78,062 0.85+ 0.93+ 58
1/31/00 98,924 0.67 2.11 51
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
++ During the below stated periods, the investment adviser waived a
portion of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio
of net investment income (loss) to average net assets would have been
as follows:
<TABLE>
<CAPTION>
EXPENSES NET INVESTMENT INCOME (LOSS)
--------------------------------------------- ---------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 11/95 11/96 11/97 11/98 1/99+ 1/00
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------- ---------------------------------------------
Growth-Income......... 0.77% 0.72% 0.65% 0.60% 0.60% 0.56% 1.42% 1.21% 0.89% 0.78% 0.55% 0.56%
Federated Value....... -- 1.57 1.03 0.83 0.86 0.77 -- 0.74 1.03 1.13 0.75 1.17
Davis Venture Value... 1.02 0.85 0.79 0.75 0.77 0.74 1.41 1.21 0.98 0.89 0.86 0.51
"Dogs" of Wall
Street................ -- -- -- 0.92 0.85 0.67 -- -- -- 1.97 0.93 2.11
</TABLE>
59
<PAGE> 73
---------------------
SUNAMERICA SERIES TRUST
FINANCIAL HIGHLIGHTS* (continued)
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS DIVIDENDS NET
ASSET INVEST- NET REALIZED FROM DECLARED FROM FROM NET ASSET
VALUE MENT & UNREALIZED INVEST- NET REALIZED VALUE
PERIOD BEGINNING INCOME GAIN (LOSS) ON MENT INVESTMENT GAIN ON END OF TOTAL
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS PERIOD RETURN***
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Growth Portfolio
11/30/95 $10.64 $ 0.07 $ 5.08 $ 5.15 $(0.03) $(0.13) $15.63 48.91%
11/30/96 15.63 0.08 4.07 4.15 (0.04) (1.01) 18.73 28.05
11/30/97 18.73 0.16 4.76 4.92 (0.05) (1.04) 22.56 27.80
11/30/98 22.56 0.07 7.77 7.84 (0.06) (2.30) 28.04 35.92
1/31/99# 28.04 0.00 7.22 7.22 -- -- 35.26 25.75
1/31/00 35.26 (0.04) 4.46 4.42 (0.05) (3.05) 36.58 14.09
MFS Growth and Income Portfolio
11/30/95 10.01 0.12 3.14 3.26 (0.13) -- 13.14 32.92
11/30/96 13.14 0.11 2.16 2.27 (0.11) (0.91) 14.39 18.40
11/30/97 14.39 0.11 2.48 2.59 (0.10) (1.26) 15.62 19.78
11/30/98 15.62 0.02 2.61 2.63 (0.12) (2.76) 15.37 17.82
1/31/99# 15.37 0.01 1.60 1.61 -- -- 16.98 10.47
1/31/00 16.98 0.10 0.11 0.21 (0.03) (3.81) 13.35 1.77
Putnam Growth Portfolio
11/30/95 10.05 (0.01) 3.09 3.08 (0.03) -- 13.10 30.66
11/30/96 13.10 -- 2.61 2.61 -- -- 15.71 19.92
11/30/97 15.71 0.03 3.93 3.96 -- (0.52) 19.15 26.01
11/30/98 19.15 0.01 4.15 4.16 (0.02) (3.08) 20.21 22.56
1/31/99# 20.21 (0.01) 3.33 3.32 -- -- 23.53 16.43
1/31/00 23.53 (0.02) 3.76 3.74 (0.01) (0.78) 26.48 16.51
Real Estate Portfolio
6/2/97-
11/30/97 10.00 0.16 1.37 1.53 -- -- 11.53 15.30
11/30/98 11.53 0.45 (1.93) (1.48) (0.16) (0.01) 9.88 (13.04)
1/31/99# 9.88 0.09 (0.36) (0.27) -- -- 9.61 (2.73)
1/31/00 9.61 0.39 (1.14) (0.75) (0.33) -- 8.53 (8.03)
<CAPTION>
NET RATIO OF NET
ASSETS RATIO OF INVESTMENT
END OF EXPENSES TO INCOME TO
PERIOD PERIOD AVERAGE NET AVERAGE PORTFOLIO
ENDED (000'S) ASSETS NET ASSETS TURNOVER
---------- ---------------------------------------------------
<S> <C> <C> <C> <C>
11/30/95 $ 167,870 0.79% 0.51% 138%
11/30/96 381,367 0.71 0.51 121
11/30/97 704,533 0.65 0.37 110
11/30/98 1,396,140 0.58 0.27 90
1/31/99# 1,864,924 0.63+ (0.01)+ 11
1/31/00 2,875,413 0.63 (0.11) 77
11/30/95 149,910 0.76 1.01 229
11/30/96 186,368 0.74 0.82 164
11/30/97 218,496 0.73 0.77 217
11/30/98 238,298 0.70 0.17 105
1/31/99# 266,069 0.75+ 0.38+ 76
1/31/00 337,222 0.75 0.66 64
11/30/95 115,276 0.93 (0.05) 52
11/30/96 160,073 0.90 (0.02) 63
11/30/97 234,726 0.91 0.18 125
11/30/98 398,863 0.86 0.09 75
1/31/99# 494,813 0.86+ (0.19)+ 10
1/31/00 783,896 0.80 (0.09) 76
6/2/97-
11/30/97 29,565 1.25+++ 3.25+++ 7
11/30/98 59,102 0.95 4.21 26
1/31/99# 58,504 1.01+ 5.63+ 6
1/31/00 53,766 0.92 4.24 61
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
++ During the below stated periods, the investment adviser waived a portion
of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio of
net investment income (loss) to average net assets would have been as
follows:
<TABLE>
<CAPTION>
EXPENSES NET INVESTMENT INCOME (LOSS)
--------------------------------------------- ---------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 11/95 11/96 11/97 11/98 1/99+ 1/00
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------- ---------------------------------------------
Alliance Growth....... 0.79% 0.71% 0.65% 0.58% 0.63% 0.63% 0.51% 0.51% 0.37% 0.27% (0.01)% (0.11)%
MFS Growth and
Income................ 0.76 0.74 0.73 0.70 0.75 0.75 1.01 0.82 0.77 0.17 0.38 0.66
Putnam Growth......... 0.93 0.90 0.91 0.86 0.86 0.80 (0.05) (0.02) 0.18 0.09 (0.19) (0.09)
Real Estate........... -- -- 1.36 0.95 1.01 0.92 -- -- 3.14 4.21 5.63 4.24
</TABLE>
60
<PAGE> 74
---------------------
SUNAMERICA SERIES TRUST
FINANCIAL HIGHLIGHTS* (continued)
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET TOTAL DIVIDENDS DIVIDENDS NET
ASSET INVEST- NET REALIZED FROM DECLARED FROM FROM NET ASSET
VALUE MENT & UNREALIZED INVEST- NET REALIZED VALUE
PERIOD BEGINNING INCOME GAIN (LOSS) ON MENT INVESTMENT GAIN ON END OF TOTAL
ENDED OF PERIOD (LOSS)** INVESTMENTS OPERATIONS INCOME INVESTMENTS PERIOD RETURN***
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MFS Mid-Cap Growth Portfolio
4/1/99-
1/31/00 $10.00 $(0.01) $ 5.84 $ 5.83 $ -- $(0.23) $15.60 58.26%
Aggressive Growth Portfolio
6/3/96-
11/30/96 10.00 0.02 0.34 0.36 -- -- 10.36 3.60
11/30/97 10.36 0.01 1.40 1.41 (0.01) -- 11.76 13.62
11/30/98 11.76 0.04 0.52 0.56 -- -- 12.32 4.76
1/31/99# 12.32 -- 3.20 3.20 -- -- 15.52 25.97
1/31/00 15.52 -- 8.59 8.59 (0.03) (1.36) 22.72 60.62
International Growth and Income Portfolio
6/2/97-
11/30/97 10.00 0.03 0.38 0.41 -- -- 10.41 4.10
11/30/98 10.41 0.13 0.86 0.99 (0.03) (0.06) 11.31 9.58
1/31/99# 11.31 -- 0.40 0.40 (0.02) (0.19) 11.50 3.56
1/31/00 11.50 0.15 1.97 2.12 (0.45) (0.89) 12.28 17.99
Global Equities Portfolio
11/30/95 11.67 0.12 1.64 1.76 (0.08) (0.29) 13.06 15.58
11/30/96 13.06 0.14 2.19 2.33 (0.14) (0.33) 14.92 18.21
11/30/97 14.92 0.09 1.79 1.88 (0.13) (0.69) 15.98 13.30
11/30/98 15.98 0.07 2.40 2.47 (0.19) (1.36) 16.90 15.34
1/31/99# 16.90 0.00 1.71 1.71 -- -- 18.61 10.12
1/31/00 18.61 0.06 4.00 4.06 (0.21) (1.37) 21.09 23.67
International Diversified Equities Portfolio
11/30/95 9.78 0.07 0.38 0.45 (0.08) -- 10.15 4.63
11/30/96 10.15 0.05 1.43 1.48 (0.26) -- 11.37 14.85
11/30/97 11.37 0.09 0.28 0.37 (0.31) (0.10) 11.33 3.52
11/30/98 11.33 0.15 1.93 2.08 (0.40) (0.15) 12.86 18.33
1/31/99# 12.86 (0.01) 0.22 0.21 -- -- 13.07 1.63
1/31/00 13.07 0.13 1.91 2.04 (0.21) (0.08) 14.82 15.85
Emerging Markets Portfolio
6/2/97-
11/30/97 10.00 0.06 (2.03) (1.97) -- -- 8.03 (19.70)
11/30/98 8.03 0.04 (1.78) (1.74) (0.07) -- 6.22 (21.86)
1/31/99# 6.22 0.01 -- 0.01 (0.01) -- 6.22 0.20
1/31/00 6.22 (0.03) 4.81 4.78 -- -- 11.00 76.86
<CAPTION>
NET RATIO OF NET
ASSETS RATIO OF INVESTMENT
END OF EXPENSES TO INCOME TO
PERIOD PERIOD AVERAGE NET AVERAGE PORTFOLIO
ENDED (000'S) ASSETS NET ASSETS TURNOVER
---------- -------------------------------------------------
<S> <C> <C> <C> <C>
4/1/99-
1/31/00 $ 81,636 1.15%+++@ (0.13)%+++@ 108%
6/3/96-
11/30/96 35,124 1.05+++ 0.46+++ 47
11/30/97 103,603 0.90 (0.13) 221
11/30/98 133,183 0.83 0.32 268
1/31/99# 182,313 0.82+ 0.13+ 29
1/31/00 450,073 0.75 0.02 131
6/2/97-
11/30/97 42,844 1.60+++ 0.61+++ 19
11/30/98 128,344 1.46 1.12 51
1/31/99# 142,497 1.46+ (0.10) 10
1/31/00 253,962 1.21 1.16 75
11/30/95 165,752 1.14 1.02 106
11/30/96 246,482 1.03 1.04 70
11/30/97 341,639 0.95 0.58 115
11/30/98 420,358 0.88 0.46 92
1/31/99# 463,138 0.86+ (0.04)+ 12
1/31/00 632,495 0.84 0.30 94
11/30/95 48,961 1.70++ 0.76++ 52
11/30/96 157,008 1.59 0.47 53
11/30/97 248,927 1.35 0.82 56
11/30/98 354,174 1.26 1.18 40
1/31/99# 373,785 1.26+ (0.43)+ 7
1/31/00 464,988 1.22 0.95 65
6/2/97-
11/30/97 19,979 1.90+++ 1.33+++ 49
11/30/98 31,685 1.90++ 0.61++ 96
1/31/99# 32,708 1.90+++ 0.60+++ 22
1/31/00 102,740 1.90@ (0.41)@ 145
</TABLE>
---------------
* Calculated based upon average shares outstanding
** After fee waivers and expense reimbursements by the investment adviser
*** Does not reflect expenses that apply to the separate accounts of the
insurance companies. If such expenses had been included, total return
would have been lower for each period presented.
# The Portfolio changed its fiscal year ended from November 30 to January
31.
+ Annualized
@ Net of custody credits of 0.02% and 0.01% on the MFS Mid-Cap Growth and
Emerging Markets Portfolios, respectively.
++ During the below stated periods, the investment adviser waived a portion
of or all fees and assumed a portion of or all expenses for the
portfolios. If all fees and expenses had been incurred by the
portfolios, the ratio of expenses to average net assets and the ratio of
net investment income (loss) to average net assets would have been as
follows:
<TABLE>
<CAPTION>
EXPENSES NET INVESTMENT INCOME (LOSS)
--------------------------------------------- ---------------------------------------------
11/95 11/96 11/97 11/98 1/99+ 1/00 11/95 11/96 11/97 11/98 1/99+ 1/00
--------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MFS Mid-Cap Growth............ --% --% --% --% --% 1.17% --% --% --% --% --% (0.15)%
Aggressive Growth............. -- 1.09 0.90 0.83 0.82 0.75 -- 0.42 (0.13) 0.32 0.13 0.02
International Growth and
Income........................ -- -- 2.02 1.46 1.46 1.21 -- -- 0.19 1.12 (0.10) 1.16
Global Equities............... 1.14 1.03 0.95 0.88 0.86 0.84 1.02 1.04 0.58 0.46 (0.04) 0.30
International Diversified
Equities...................... 2.09 1.59 1.35 1.26 1.26 1.22 0.37 0.47 0.82 1.18 (0.43) 0.95
Emerging Markets.............. -- -- 2.60 2.01 2.29 1.90 -- -- 0.63 0.50 0.21 (0.41)
</TABLE>
61
<PAGE> 75
--------------------------------------------------------------------------------
FOR MORE INFORMATION
--------------------------------------------------------------------------------
The following documents contain more information about the Portfolios and are
available free of charge upon request:
ANNUAL/SEMI-ANNUAL REPORTS. Contain financial statements, performance
data and information on portfolio holdings. The annual report also
contains a written analysis of market conditions and investment
strategies that significantly affected a Portfolio's performance for the
most recently completed fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI). Contains additional
information about the Portfolios' policies, investment restrictions and
business structure. This prospectus incorporates the SAI by reference.
You may obtain copies of these documents or ask questions about the Portfolios
at no charge by calling (800) 445-7862 or by writing the Trust at P.O. Box
54299, Los Angeles, California 90054-0299.
Information about the Portfolios (including the SAI) can be reviewed and copied
at the Public Reference Room of the Securities and Exchange Commission,
Washington, D.C. Call (800) SEC-0330 for information on the operation of the
Public Reference Room. Information about the Portfolios is also available on the
Securities and Exchange Commission's web-site at http://www.sec.gov and copies
may be obtained upon payment of a duplicating fee by electronic request at the
following e-mail address: [email protected], or by writing the Public Reference
Section of the Securities and Exchange Commission, Washington, D.C. 20549-6009.
You should rely only on the information contained in this prospectus. No one is
authorized to provide you with any different information.
INVESTMENT COMPANY ACT
- File No. 811-7238
62
