UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21482
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SunAmerica Specialty Series
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside 5, 185 Hudson Street, Jersey City, NJ 07311
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(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management, LLC
Harborside 5,
185 Hudson Street,
Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
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Date of fiscal year end: October 31
------------------------
Date of reporting period: October 31, 2017
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Item 1. Reports to Stockholders
2017 ANNUAL REPORT
SunAmerica Specialty Series
High Watermark Fund
2020 High Watermark Fund
SunAmerica
Alternative Strategies Fund
Global Trends Fund
Focused Alpha Growth Fund
Focused Alpha Large-Cap Fund
Income Explorer Fund
Small-Cap Fund
[GRAPHIC]
[LOGO]
Table of Contents
MESSAGE FROM THE PRESIDENT.................................. 2
EXPENSE EXAMPLE............................................. 5
STATEMENT OF ASSETS AND LIABILITIES......................... 7
STATEMENT OF OPERATIONS..................................... 9
STATEMENT OF CHANGES IN NET ASSETS.......................... 11
FINANCIAL HIGHLIGHTS........................................ 13
PORTFOLIO OF INVESTMENTS.................................... 20
NOTES TO FINANCIAL STATEMENTS............................... 70
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..... 96
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT
AGREEMENTS AND SUBADVISORY AGREEMENTS....................... 97
TRUSTEE AND OFFICER INFORMATION............................. 103
SHAREHOLDER TAX INFORMATION................................. 106
COMPARISONS: FUNDS vs. INDICES.............................. 107
A Message from the President
Dear Shareholders:
We are pleased to present this annual update for the SunAmerica Specialty
Series, including AIG Commodity Strategy Fund, AIG Focused Alpha Large-Cap
Fund, AIG Focused Multi-Cap Growth Fund, AIG Global Trends Fund, AIG Income
Explorer Fund, AIG Small-Cap Fund and our newest offering, AIG ESG Dividend
Fund (the "Funds"), for the 12-month period ended October 31, 2017.
As we continued to seek to enhance our array of investment options, highlights
of the annual period included the launch, on December 16, 2016, of the AIG ESG
Dividend Fund, offering the opportunity to participate in socially conscious
investing that delivers total return potential. The Environmental, Social and
Governance ("ESG") strategy enables shareholders to make a positive social
impact on the world without sacrificing potential income and growth by
investing in companies that address factors ranging from controlling carbon
emissions to upholding fair labor practices to maintaining an independent board
chairman. Through the new AIG ESG Dividend Fund, our shareholders can benefit
from the skilled portfolio management team of SunAmerica Asset Management, LLC,
which has deep experience in both socially conscious and rules-based dividend
investing.
Effective February 28, 2017, SunAmerica Mutual Funds were rebranded as AIG
Funds, and each Fund's name was changed accordingly. SunAmerica Asset
Management, LLC, the investment adviser to each Fund, continues to serve as
investment adviser of the Funds and retains its current name. In addition,
there was no change in the Funds' investment goals or strategies, portfolio
managers or ticker symbols in connection with the rebranding. Effective the
same date, SunAmerica Focused Alpha Growth Fund was renamed AIG Focused
Multi-Cap Growth Fund.
From a broad perspective, the 12 months ended October 31, 2017, was a period
wherein global equity markets rallied and global fixed income markets and
commodities also delivered positive, albeit far more modest, returns, amidst a
backdrop of unexpected political events both in the U.S. and abroad, heightened
geopolitical risk and three Federal Reserve (the "Fed") interest rate increases.
Soon after the annual period began in November 2016, stocks rallied following
Donald Trump's unexpected victory in the U.S. presidential election. U.S.
equities markets and credit markets alike performed strongly during November
and December 2016 on expectations the then-incoming U.S. Administration would
reduce regulatory restrictions and increase fiscal stimulus, including
implementing tax reform and boosting infrastructure spending. However, emerging
markets equities fell on concerns about higher inflation, a stronger U.S.
dollar and trade protectionism rhetoric from then-candidate Trump. Global
sovereign bond prices, led by U.S. Treasuries, also declined on anticipation of
higher inflation. Commodities rallied, with energy registering the largest
advance.
For the first ten months of 2017, global equities generally maintained their
rally. A broad-based expansion of economic growth, supportive monetary policy,
benign inflation and strong corporate earnings growth helped drive equity
markets higher, despite European political uncertainty, growing doubts about
the new U.S. Administration's ability to implement its agenda and heightened
geopolitical risk, especially between the U.S. and North Korea. Market
participants seemed to breathe a sigh of relief in May 2017 after the
independent centrist candidate won the French presidential election by a wide
margin - a victory widely seen as supportive for the stability of the European
Union. In China, manufacturing and services data surprised on the upside, which
was seen as a positive sign for global economic growth. Emerging market
equities in particular rebounded strongly, drawing support from dissipated
concerns about the U.S. Administration, improving fundamentals, growing
economies, a weaker U.S. dollar and encouraging corporate earnings. Global
fixed income markets also generated positive, though significantly more muted,
returns, as elevated political uncertainty, escalating geopolitical tensions
and serial disappointments in inflation data helped contain the increase in
sovereign yields prompted by widespread, albeit gradual, central bank policy
normalization following long-standing loose monetary policies. The Fed, after
raising the targeted federal funds rate in December 2016 and again in March and
June 2017, began tapering its asset purchases in October 2017 and continued to
project another rate hike later in 2017. The European Central Bank similarly
announced in October 2017 that it would reduce its monthly asset purchases
beginning in January 2018. Strong growth and inflation data prompted the Bank
of Canada to surprise the markets with two consecutive rate hikes - the first
time it tightened monetary policy
2
A Message from the President -- (continued)
in seven years. The Bank of England signaled it was close to raising rates over
the coming months, despite uncertainty about the post-Brexit economic growth
outlook. Meanwhile, robust economic data and continued demand for
yield-producing assets supported credit markets. Commodities pulled back during
the first half of 2017, led by weakness in the energy sector, but then rallied
during the last four months of the annual period, led by regained strength in
the energy and industrial metals sectors, as a weaker U.S. dollar and
supply/demand imbalances drove prices higher.
During the annual period overall, U.S. equities and non-U.S. equities, as
measured by the S&P 500 Index/*/ and MSCI EAFE Index,/*/ respectively,
performed in line with each other, though emerging market equities outperformed
their developed market counterparts, as measured by the MSCI Emerging Markets
Index/*/ and MSCI World Index,/*/ respectively. Within the U.S. equity market,
small-cap stocks performed best, followed by large-cap stocks and then mid-cap
stocks. Growth stocks significantly outpaced value stocks across the
capitalization spectrum.
On the following pages, you will find the financial statements and portfolio
information for each of the Funds for the annual period ended October 31, 2017.
You will also find a comprehensive review of the portfolios' performance and
management strategies over the same annual period.
Thank you for being a part of the SunAmerica Specialty Series Funds. We value
your ongoing confidence in us and look forward to serving your investment needs
in the future.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
President & CEO
SunAmerica Asset Management, LLC
--------
Past performance is no guarantee of future results. Diversification and asset
allocation do not guarantee a profit nor protect against a loss.
* The S&P 500 Index is an unmanaged, weighted index of 500 large company stocks
that is widely-recognized as representative of the performance of the U.S.
stock market. The MSCI EAFE (Europe, Australasia, Far East) Index is a free
float-adjusted market capitalization index that is designed to measure the
equity market performance of 21 developed markets, excluding the US & Canada.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization
index that is designed to measure equity market performance of 23 emerging
markets. The MSCI World Index is a free float-adjusted market capitalization
weighted index that is designed to measure the equity market performance of 23
developed markets. Indices are not managed and an investor cannot invest
directly into an index.
The AIG Commodity Strategy Fund is not a complete investment program and should
not be an investor's sole investment because its performance is linked to the
performance of highly volatile commodities. Investors should consider buying
shares of the AIG Commodity Strategy Fund only as part of an overall portfolio
strategy that includes other asset classes, such as fixed income and equity
investments. Investors in the AIG Commodity Strategy Fund should be willing to
assume greater risks of potentially significant short-term share price
fluctuation because of the AIG Commodity Strategy Fund's investments in
commodity-linked derivative instruments.
The risks associated with the use of futures contracts by the AIG Commodity
Strategy Fund and the AIG Global Trends Fund include the risk that: (i) changes
in the price of a futures contract may not always track the changes in market
value of the underlying reference asset; (ii) trading restrictions or
limitations may be imposed by an exchange, and government regulations may
restrict trading in futures contracts; and (iii) if the Fund has insufficient
cash to meet margin requirements, the Fund may need to sell other investments,
including at disadvantageous times. Forwards are not exchange-traded and
therefore no clearinghouse or exchange stands ready to meet the obligations of
the contracts. Thus, the Fund faces the risk that its counterparties may not
perform their obligations. Investments that provide exposure to foreign markets
involve special risks, such as currency fluctuations, differing financial
reporting and regulatory standards, and economic and political instability.
These risks are highlighted when the issuer
3
A Message from the President -- (continued)
is in an emerging market. Fixed income securities and currency and fixed income
futures are subject to changes in their value when prevailing interest rates
change. Adverse changes in currency exchange rates (relative to the U.S.
dollar) may erode or reverse any potential gains from futures instruments that
are tied to foreign instruments or currencies. The Fund also has exposure to
the commodities markets, which may subject it to greater volatility than
investments in traditional securities. The AIG Global Trends Fund and the AIG
Commodity Strategy Fund expect to invest a significant portion of their assets
in repurchase agreements collateralized by the U.S. government and its
agencies, and may also invest in other high-quality, short-term securities
("money market instruments"). The primary purpose of the repurchase agreements
and other money market instruments held by the Funds will be to serve as
collateral for the futures instruments. The Funds' investments in repurchase
agreements involve certain risks involving the default or insolvency of the
seller and counterparty risk (i.e., the risk that the counterparty will not
perform its obligations). The Funds' returns are expected to be derived
principally from changes in the value of the assets underlying the futures
instruments held by the Funds. Active trading of each Fund's portfolio may
result in high portfolio turnover and correspondingly greater brokerage
commissions and other transaction costs, which will be borne directly by the
Funds and which will affect the Funds' performance. Active trading may also
result in increased tax liability for Fund shareholders. Investors should note
that the ability of the subadviser to successfully implement the Funds'
strategies, including the proprietary investment processes used by the
subadviser, will influence the performance of the Funds significantly.
Focused funds are less diversified than typical mutual funds; therefore, the
performance of each holding in a focused fund has a greater impact upon the
overall portfolio, which increases risk. Stocks of small-cap and mid-cap
companies are generally more volatile than and not as readily marketable as
those of larger companies, and may have fewer resources and a greater risk of
business failure than do large companies.
4
SunAmerica Specialty Series
EXPENSE EXAMPLE -- October 31, 2017 -- (unaudited)
Disclosure of Fund Expenses in Shareholder Reports
As a shareholder of a Fund (each a "Fund" and collectively, the "Funds") in the
SunAmerica Specialty Series (the "Trust"), you may incur two types of costs:
(1) transaction costs, including applicable sales charges (loads) on purchase
payments and contingent deferred sales charges and (2) ongoing costs, including
management fees; distribution and account maintenance fees; and other Fund
expenses. This Example is intended to help you understand your ongoing costs
(in dollars) of investing in the Funds and to compare these costs with the
ongoing costs of investing in other mutual funds. The Example is based on an
investment of $1,000 invested at May 1, 2017 and held until October 31, 2017.
Actual Expenses
The "Actual" section of the table provides information about your actual
account values and actual expenses. You may use the information in these
columns, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the column under the heading entitled "Expenses Paid
During the Six Months Ended October 31, 2017" to estimate the expenses you paid
on your account during this period. For shareholder accounts in classes other
than Class W, the "Expenses Paid During the Six Months Ended October 31, 2017"
column and the "Annualized Expense Ratio" column do not include small account
fees that may be charged if your account balance is below $500 ($250 for
retirement plan accounts). In addition, the "Expenses Paid During the Six
Months Ended October 31, 2017" column and the "Annualized Expense Ratio" column
do not include administrative or other fees that may apply to qualified
retirement plan accounts and accounts held through financial institutions. See
the Funds' prospectuses, your retirement plan document and/or materials from
your financial advisers for a full description of these fees. Had these fees
been included, the "Expenses Paid During the Six Months Ended October 31, 2017"
column would have been higher and the "Ending Account Value" column would have
been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an annual rate of return of 5% before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Funds and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds. For shareholder accounts in classes other than Class W, the
"Expenses Paid During the Six Months Ended October 31, 2017" column and the
"Annualized Expense Ratio" column do not include small account fees that may be
charged if your account balance is below $500 ($250 for retirement plan
accounts). In addition, the "Expenses Paid During the Six Months Ended October
31, 2017" column and the "Annualized Expense Ratio" column do not include
administrative or other fees that may apply to qualified retirement plan
accounts and accounts held through financial institutions. See the Funds'
prospectuses, your retirement plan document and/or materials from your
financial advisers for a full description of these fees. Had these fees been
included, the "Expenses Paid During the Six Months Ended October 31, 2017"
column would have been higher and the "Ending Account Value" column would have
been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges; small account
fees and administrative fees, if applicable, to your account. Please refer to
the Funds' prospectus, your retirement plan document and/or materials from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs and other fees were included, your costs would have been
higher.
5
SunAmerica Specialty Series
EXPENSE EXAMPLE -- October 31, 2017 -- (unaudited) (continued)
Actual Hypothetical
----------------------------------------------- ----------------------------------------------
Ending Account
Ending Account Expenses Paid Value Using a Expenses Paid
Beginning Value Using During the Beginning Hypothetical 5% During the
Account Value Actual Return at Six Months Ended Account Value Annual Return Six Months Ended
at May 1, October 31, October 31, at May 1, at October 31, October 31,
2017 2017 2017* 2017 2017 2017*
------------- ---------------- ---------------- ------------- --------------- ----------------
AIG Commodity Strategy
Fund@+
Class A#.................. $1,000.00 $1,031.84 $ 8.86 $1,000.00 $1,016.48 $ 8.79
Class C#.................. $1,000.00 $1,028.53 $12.17 $1,000.00 $1,013.21 $12.08
Class W#.................. $1,000.00 $1,032.86 $ 7.84 $1,000.00 $1,017.49 $ 7.78
AIG ESG Dividend Fund
Class A#.................. $1,000.00 $1,025.29 $ 6.38 $1,000.00 $1,018.90 $ 6.36
Class C#.................. $1,000.00 $1,022.11 $ 9.68 $1,000.00 $1,015.63 $ 9.65
Class W#.................. $1,000.00 $1,026.57 $ 5.36 $1,000.00 $1,019.91 $ 5.35
AIG Focused Alpha Large-Cap
Fund+
Class A................... $1,000.00 $1,162.90 $ 9.00 $1,000.00 $1,016.89 $ 8.39
Class C................... $1,000.00 $1,159.03 $12.46 $1,000.00 $1,013.66 $11.62
Class W#.................. $1,000.00 $1,163.72 $ 8.29 $1,000.00 $1,017.54 $ 7.73
AIG Focused Multi-Cap
Growth Fund+
Class A................... $1,000.00 $1,182.36 $ 9.13 $1,000.00 $1,016.84 $ 8.44
Class C................... $1,000.00 $1,177.82 $12.79 $1,000.00 $1,013.46 $11.82
Class W................... $1,000.00 $1,183.23 $ 8.14 $1,000.00 $1,017.74 $ 7.53
AIG Global Trends Fund@+
Class A#.................. $1,000.00 $1,061.83 $ 9.67 $1,000.00 $1,015.83 $ 9.45
Class C#.................. $1,000.00 $1,058.64 $13.02 $1,000.00 $1,012.55 $12.73
Class W#.................. $1,000.00 $1,063.35 $ 8.63 $1,000.00 $1,016.84 $ 8.44
AIG Income Explorer Fund+
Class A#.................. $1,000.00 $1,046.12 $ 8.87 $1,000.00 $1,016.53 $ 8.74
Class C#.................. $1,000.00 $1,042.82 $12.20 $1,000.00 $1,013.26 $12.03
Class W#.................. $1,000.00 $1,047.21 $ 7.84 $1,000.00 $1,017.54 $ 7.73
AIG Small-Cap Fund+
Class A#.................. $1,000.00 $1,108.02 $ 9.14 $1,000.00 $1,016.53 $ 8.74
Class C#.................. $1,000.00 $1,104.41 $12.57 $1,000.00 $1,013.26 $12.03
Class W#.................. $1,000.00 $1,108.94 $ 8.08 $1,000.00 $1,017.54 $ 7.73
----------
Annualized
Expense
Ratio*
----------
AIG Commodity Strategy
Fund@+
Class A#.................. 1.73%
Class C#.................. 2.38%
Class W#.................. 1.53%
AIG ESG Dividend Fund
Class A#.................. 1.25%
Class C#.................. 1.90%
Class W#.................. 1.05%
AIG Focused Alpha Large-Cap
Fund+
Class A................... 1.65%
Class C................... 2.29%
Class W#.................. 1.52%
AIG Focused Multi-Cap
Growth Fund+
Class A................... 1.66%
Class C................... 2.33%
Class W................... 1.48%
AIG Global Trends Fund@+
Class A#.................. 1.86%
Class C#.................. 2.51%
Class W#.................. 1.66%
AIG Income Explorer Fund+
Class A#.................. 1.72%
Class C#.................. 2.37%
Class W#.................. 1.52%
AIG Small-Cap Fund+
Class A#.................. 1.72%
Class C#.................. 2.37%
Class W#.................. 1.52%
--------
* Expenses are equal to each Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 184 days then divided
by 365 days (to reflect the one-half year period).
These ratios do not reflect transaction costs, including sales charges on
purchase payments, contingent deferred sales charges, small account fees and
administrative fees, if applicable to your account. Please refer to your
Prospectus, your retirement plan document and/or materials from your
financial adviser, for more information.
# During the stated period, the investment adviser either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Funds or
through recoupment provisions, recovered a portion of or all fees and
expenses waived or reimbursed in the previous two fiscal years. As a result,
if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended October 31,
2017" and the "Annualized Expense Ratio" would have been higher. If these
fees and expenses had not been recouped, the "Actual/Hypothetical Ending
Account Value" would have been higher and the "Actual/Hypothetical Expenses
Paid During the Six Months Ended October 31, 2017" and the "Annualized
Expense Ratio" would have been lower.
@ Consolidated (see Note 2)
+ See Note 1
6
SunAmerica Specialty Series
STATEMENT OF ASSETS AND LIABILITIES -- October 31, 2017
AIG AIG
AIG AIG Focused Focused AIG
Commodity ESG Alpha Multi-Cap Global
Strategy Dividend Large-Cap Growth Trends
Fund#+ Fund Fund+ Fund+ Fund#+
----------- ----------- ------------ ------------ -----------
ASSETS:
Investments at value (unaffiliated)*.......................... $ 7,488,512 $25,566,952 $656,685,203 $614,623,433 $ --
Repurchase agreements (cost approximates value)............... 29,780,000 -- -- -- 35,635,000
Cash.......................................................... 8,608 84,414 769 52 1,404
Foreign cash*................................................. -- -- -- -- --
Receivable for:
Shares of beneficial interest sold.......................... 5,037 2,030 619,832 1,479,021 1,450
Dividends and interest...................................... 1,510 44,427 84 140 1,020
Investments sold............................................ -- -- 5,416,975 6,242,417 --
Receipts on swap contracts.................................. 246,242 -- -- -- --
Other receivables............................................. -- -- 848,411 1,341,365 --
Prepaid expenses and other assets............................. 5,474 42 10,727 9,936 5,289
Cash collateral for futures contracts......................... 1,378,611 -- -- -- 1,004,817
Due from broker............................................... 706,421 -- -- -- --
Due from investment adviser for expense reimbursements/fee
waivers...................................................... 24,900 794 252 -- 21,226
Deferred offering costs....................................... -- 10,954 -- -- --
Variation margin on futures contracts......................... 146,971 -- -- -- 79,329
Unrealized appreciation on forward foreign currency contracts. -- -- -- -- 74,646
Unrealized appreciation on swap contracts..................... 579 -- -- -- --
----------- ----------- ------------ ------------ -----------
Total assets................................................ 39,792,865 25,709,613 663,582,253 623,696,364 36,824,181
----------- ----------- ------------ ------------ -----------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed...................... 23,800 172 711,962 542,547 1,050
Investments purchased....................................... -- -- 22,367,500 29,138,616 --
Investments purchased on an extended settlement basis....... -- -- -- -- --
Payments on swap contracts.................................. 2,282 -- -- -- --
Investment advisory and management fees..................... 33,495 16,497 541,431 490,821 35,476
Distribution and service maintenance fees................... 12,838 7,841 251,116 213,448 12,686
Transfer agent fees and expenses............................ 9,101 5,499 141,781 135,249 8,429
Trustees' fees and expenses................................. 65 28 851 723 60
Other accrued expenses...................................... 148,011 49,892 279,201 273,442 116,852
Call and put options written, at value@..................... 7,373 -- -- -- --
Unrealized depreciation on forward foreign currency contracts. -- -- -- -- 68,383
Unrealized depreciation on swap contracts..................... 5,981 -- -- -- --
Variation margin on futures contracts......................... 129,021 -- -- -- 8,250
----------- ----------- ------------ ------------ -----------
Total liabilities........................................... 371,967 79,929 24,293,842 30,794,846 251,186
----------- ----------- ------------ ------------ -----------
NET ASSETS.................................................... $39,420,898 $25,629,684 $639,288,411 $592,901,518 $36,572,995
=========== =========== ============ ============ ===========
AIG
Income AIG
Explorer Small-Cap
Fund+ Fund+
----------- -----------
ASSETS:
Investments at value (unaffiliated)*.......................... $44,218,666 $58,775,380
Repurchase agreements (cost approximates value)............... 110,000 670,000
Cash.......................................................... 1,608 1,103
Foreign cash*................................................. 22,528 --
Receivable for:
Shares of beneficial interest sold.......................... 144,847 80,208
Dividends and interest...................................... 229,800 18,004
Investments sold............................................ 34,819 380,805
Receipts on swap contracts.................................. -- --
Other receivables............................................. -- --
Prepaid expenses and other assets............................. 5,344 5,583
Cash collateral for futures contracts......................... -- --
Due from broker............................................... -- --
Due from investment adviser for expense reimbursements/fee
waivers...................................................... 19,915 17,547
Deferred offering costs....................................... -- --
Variation margin on futures contracts......................... -- --
Unrealized appreciation on forward foreign currency contracts. 4,162 --
Unrealized appreciation on swap contracts..................... -- --
----------- -----------
Total assets................................................ 44,791,689 59,948,630
----------- -----------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed...................... 11,348 19,138
Investments purchased....................................... 130,143 1,234,788
Investments purchased on an extended settlement basis....... 30,000 --
Payments on swap contracts.................................. -- --
Investment advisory and management fees..................... 37,971 48,850
Distribution and service maintenance fees................... 14,866 16,934
Transfer agent fees and expenses............................ 9,321 12,245
Trustees' fees and expenses................................. 37 80
Other accrued expenses...................................... 49,689 58,711
Call and put options written, at value@..................... -- --
Unrealized depreciation on forward foreign currency contracts. 2,209 --
Unrealized depreciation on swap contracts..................... -- --
Variation margin on futures contracts......................... -- --
----------- -----------
Total liabilities........................................... 285,584 1,390,746
----------- -----------
NET ASSETS.................................................... $44,506,105 $58,557,884
=========== ===========
--------
# Consolidated (see Note 2)
+ See Note 1
See Notes to Financial Statements
7
SunAmerica Specialty Series
STATEMENT OF ASSETS AND LIABILITIES -- October 31, 2017 -- (continued)
AIG AIG
AIG AIG Focused Focused AIG
Commodity ESG Alpha Multi-Cap Global
Strategy Dividend Large-Cap Growth Trends
Fund#+ Fund Fund+ Fund+ Fund#+
------------ ----------- ------------ ------------ -----------
NET ASSETS REPRESENTED BY:
Paid-in capital............................................... $135,290,941 $24,151,342 $414,604,456 $324,473,355 $37,836,357
Accumulated undistributed net investment income (loss)........ (12,187,285) 340,454 -- (3,625,078) (4,483,598)
Accumulated undistributed net realized gain (loss) on
investments, futures contracts, written options contracts,
swap contracts and foreign exchange transactions............. (83,769,463) 132,803 54,668,997 48,990,135 2,876,569
Unrealized appreciation (depreciation) on investments......... (177,570) 1,005,085 170,014,958 223,063,106 --
Unrealized appreciation (depreciation) on futures contracts,
written options and swap contracts........................... 264,275 -- -- -- 323,048
Unrealized foreign exchange gain (loss) on other assets and
liabilities.................................................. -- -- -- -- 20,619
------------ ----------- ------------ ------------ -----------
Net assets.................................................... $ 39,420,898 $25,629,684 $639,288,411 $592,901,518 $36,572,995
============ =========== ============ ============ ===========
*Cost
Investments (unaffiliated).................................. $ 7,666,082 $24,561,867 $486,670,245 $391,560,327 $ --
============ =========== ============ ============ ===========
Foreign cash................................................ -- $ -- $ -- $ -- $ --
============ =========== ============ ============ ===========
@Premiums received on options written......................... $ 6,293 $ -- $ -- $ -- $ --
============ =========== ============ ============ ===========
Class A (unlimited shares authorized):
Net assets.................................................... $ 35,014,624 $24,912,848 $505,795,571 $456,940,225 $31,859,987
Shares of beneficial interest issued and outstanding.......... 4,908,329 1,575,320 15,848,880 14,443,908 2,290,143
Net asset value and redemption price per share (excluding any
applicable contingent deferred sales charge)................. $ 7.13 $ 15.81 $ 31.91 $ 31.64 $ 13.91
Maximum sales charge (5.75% of offering price)................ 0.43 0.96 1.95 1.93 0.85
------------ ----------- ------------ ------------ -----------
Maximum offering price to public.............................. $ 7.56 $ 16.77 $ 33.86 $ 33.57 $ 14.76
============ =========== ============ ============ ===========
Class C (unlimited shares authorized):
Net assets.................................................... $ 2,755,178 $ 365,132 $118,150,950 $ 90,491,068 $ 3,720,004
Shares of beneficial interest issued and outstanding.......... 402,317 23,220 3,859,612 2,989,050 278,371
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge).. $ 6.85 $ 15.72 $ 30.61 $ 30.27 $ 13.36
============ =========== ============ ============ ===========
Class W (unlimited shares authorized):
Net assets.................................................... $ 1,651,096 $ 351,704 $ 15,341,890 $ 45,470,225 $ 993,004
Shares of beneficial interest issued and outstanding.......... 228,284 22,200 475,396 1,419,645 70,430
Net asset value, offering and redemption price per share...... $ 7.23 $ 15.84 $ 32.27 $ 32.03 $ 14.10
============ =========== ============ ============ ===========
AIG
Income AIG
Explorer Small-Cap
Fund+ Fund+
----------- -----------
NET ASSETS REPRESENTED BY:
Paid-in capital............................................... $43,240,850 $42,631,855
Accumulated undistributed net investment income (loss)........ 210,306 (3,642)
Accumulated undistributed net realized gain (loss) on
investments, futures contracts, written options contracts,
swap contracts and foreign exchange transactions............. 27,411 5,481,172
Unrealized appreciation (depreciation) on investments......... 1,025,483 10,448,499
Unrealized appreciation (depreciation) on futures contracts,
written options and swap contracts........................... -- --
Unrealized foreign exchange gain (loss) on other assets and
liabilities.................................................. 2,055 --
----------- -----------
Net assets.................................................... $44,506,105 $58,557,884
=========== ===========
*Cost
Investments (unaffiliated).................................. $43,193,183 $48,326,881
=========== ===========
Foreign cash................................................ $ 22,593 $ --
=========== ===========
@Premiums received on options written......................... $ -- $ --
=========== ===========
Class A (unlimited shares authorized):
Net assets.................................................... $31,624,794 $48,384,099
Shares of beneficial interest issued and outstanding.......... 2,000,021 2,382,304
Net asset value and redemption price per share (excluding any
applicable contingent deferred sales charge)................. $ 15.81 $ 20.31
Maximum sales charge (5.75% of offering price)................ 0.96 1.24
----------- -----------
Maximum offering price to public.............................. $ 16.77 $ 21.55
=========== ===========
Class C (unlimited shares authorized):
Net assets.................................................... $ 4,954,340 $ 1,943,673
Shares of beneficial interest issued and outstanding.......... 313,876 98,262
Net asset value, offering and redemption price per share
(excluding any applicable contingent deferred sales charge).. $ 15.78 $ 19.78
=========== ===========
Class W (unlimited shares authorized):
Net assets.................................................... $ 7,926,971 $ 8,230,112
Shares of beneficial interest issued and outstanding.......... 501,384 402,177
Net asset value, offering and redemption price per share...... $ 15.81 $ 20.46
=========== ===========
--------
# Consolidated (see Note 2)
+ See Note 1
See Notes to Financial Statements
8
SunAmerica Specialty Series
STATEMENT OF OPERATIONS -- For the period ended October 31, 2017
AIG AIG
AIG AIG Focused Focused AIG AIG
Commodity ESG Alpha Multi-Cap Global Income AIG
Strategy Dividend Large-Cap Growth Trends Explorer Small-Cap
Fund#+ Fund@ Fund+ Fund+ Fund#+ Fund+ Fund+
---------- --------- ----------- ----------- ---------- ---------- ----------
INVESTMENT INCOME:
Dividends (unaffiliated).................. $ -- $ 536,701 $ 8,061,511 $ 3,716,100 $ -- $1,618,015 $ 477,886
Interest (unaffiliated)................... 294,198 143 10,922 17,321 268,840 352,694 570
---------- --------- ----------- ----------- ---------- ---------- ----------
Total investment income*............... 294,198 536,844 8,072,433 3,733,421 268,840 1,970,709 478,456
---------- --------- ----------- ----------- ---------- ---------- ----------
EXPENSES:
Investment advisory and management fees.. 472,070 127,208 5,826,629 5,132,701 488,575 329,424 521,376
Distribution and account maintenance
fees:
Class A................................ 120,674 56,310 1,574,011 1,374,992 110,342 92,138 163,523
Class C................................ 30,633 1,300 1,113,933 838,699 40,416 41,935 13,039
Service fees:
Class W................................ 2,642 448 18,321 48,539 1,678 3,316 5,687
Transfer agent fees and expenses:
Class A................................ 80,580 38,216 1,095,326 981,943 74,382 60,298 107,251
Class C................................ 8,409 2,974 261,492 204,357 10,395 10,251 4,334
Class W................................ 4,775 2,972 27,850 70,634 3,289 5,608 9,192
Registration fees:
Class A................................ 25,939 1,049 23,072 23,219 12,952 19,497 17,816
Class C................................ 11,432 1,013 11,040 15,053 8,817 9,971 9,163
Class W................................ 11,266 1,005 11,133 13,410 9,361 8,349 8,892
Custodian and accounting fees............ 136,847 22,935 58,473 51,582 74,872 25,540 59,297
Reports to shareholders.................. 25,659 261 155,677 132,686 28,843 22,074 25,533
Audit and tax fees....................... 78,420 38,292 50,411 51,878 71,345 63,463 53,284
Legal fees............................... 31,404 12,354 50,731 45,394 25,536 15,899 17,623
Trustees' fees and expenses.............. 1,502 615 21,163 18,575 1,363 1,183 1,950
Deferred offering costs.................. -- 128,011 -- -- -- -- --
Interest expense......................... 2,033 -- 291 5,453 5,367 84 489
Other expenses........................... 35,053 11,971 25,869 24,719 34,381 26,546 47,415
---------- --------- ----------- ----------- ---------- ---------- ----------
Total expenses before fee waivers,
expense reimbursements, expense
recoupments and fees paid indirectly.. 1,079,338 446,934 10,325,422 9,033,834 1,001,914 735,576 1,065,864
Fees waived and expenses reimbursed
by investment advisor (Note 4)........ (382,519) (233,564) (1,600) -- (290,102) (145,720) (167,758)
Fees paid indirectly (See Note 9)...... -- -- (10,640) (16,229) -- -- --
---------- --------- ----------- ----------- ---------- ---------- ----------
Net expenses........................... 696,819 213,370 10,313,182 9,017,605 711,812 589,856 898,106
---------- --------- ----------- ----------- ---------- ---------- ----------
Net investment income (loss).............. (402,621) 323,474 (2,240,749) (5,284,184) (442,972) 1,380,853 (419,650)
---------- --------- ----------- ----------- ---------- ---------- ----------
--------
# Consolidated (see Note 2)
+ See Note 1
@ For the period December 16, 2016 (commencement of operations) to October 31,
2017.
See Notes to Financial Statements
9
SunAmerica Specialty Series
STATEMENT OF OPERATIONS -- For the period ended October 31, 2017 --
(continued)
AIG AIG
AIG AIG Focused Focused AIG
Commodity ESG Alpha Multi-Cap Global
Strategy Dividend Large-Cap Growth Trends
Fund#+ Fund@ Fund+ Fund+ Fund#+
--------- ---------- ------------ ------------ ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated)........................................ $(60,444) $ 132,803 $ 60,327,859 $ 51,767,743 $ --
Futures contracts................................................. 20,070 -- -- -- 3,285,521
Forward contracts................................................. -- -- -- -- 267,750
Swap contracts.................................................... 119,204 -- -- -- --
Written options contracts......................................... 14,031 -- -- -- --
Net realized foreign exchange gain (loss) on other assets and
liabilities......................................................... 55 -- 3,758 -- (10,892)
Net realized gain (loss) on disposal of investments, in violation of
investments restrictions (Note 4)................................... -- -- -- -- --
-------- ---------- ------------ ------------ ----------
Net realized gain (loss) on investments and foreign currencies....... 92,916 132,803 60,331,617 51,767,743 3,542,379
-------- ---------- ------------ ------------ ----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated)........................................ (17,939) 1,005,085 114,209,450 110,141,064 --
Futures contracts................................................. 695,601 -- -- -- 506,015
Forward contracts................................................. -- -- -- -- 42,815
Swap contracts.................................................... (5,402) -- -- -- --
Written options contracts......................................... 10,170 -- -- -- --
Change in net unrealized foreign exchange gain (loss) on other
assets and liabilities.............................................. -- -- -- 676 58,711
-------- ---------- ------------ ------------ ----------
Net unrealized gain (loss) on investments and foreign
currencies.......................................................... 682,430 1,005,085 114,209,450 110,141,740 607,541
-------- ---------- ------------ ------------ ----------
Net realized and unrealized gain (loss) on investments and foreign
currencies.......................................................... 775,346 1,137,888 174,541,067 161,909,483 4,149,920
-------- ---------- ------------ ------------ ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.......................................................... $372,725 $1,461,362 $172,300,318 $156,625,299 $3,706,948
======== ========== ============ ============ ==========
*Netof foreign withholding taxes on interest and dividends of........ $ -- $ -- $ 163,966 $ 11,111 $ --
======== ========== ============ ============ ==========
AIG
Income AIG
Explorer Small-Cap
Fund+ Fund+
---------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated)........................................ $1,390,476 $ 6,428,313
Futures contracts................................................. -- --
Forward contracts................................................. (18,638) --
Swap contracts.................................................... -- --
Written options contracts......................................... -- --
Net realized foreign exchange gain (loss) on other assets and
liabilities......................................................... 381 20
Net realized gain (loss) on disposal of investments, in violation of
investments restrictions (Note 4)................................... 11,304 --
---------- -----------
Net realized gain (loss) on investments and foreign currencies....... 1,383,523 6,428,333
---------- -----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated)........................................ 1,043,937 8,391,818
Futures contracts................................................. -- --
Forward contracts................................................. 1,953 --
Swap contracts.................................................... -- --
Written options contracts......................................... -- --
Change in net unrealized foreign exchange gain (loss) on other
assets and liabilities.............................................. (409) --
---------- -----------
Net unrealized gain (loss) on investments and foreign
currencies.......................................................... 1,045,481 8,391,818
---------- -----------
Net realized and unrealized gain (loss) on investments and foreign
currencies.......................................................... 2,429,004 14,820,151
---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.......................................................... $3,809,857 $14,400,501
========== ===========
*Netof foreign withholding taxes on interest and dividends of........ $ 31,767 $ 1,819
========== ===========
--------
# Consolidated (see Note 2)
+ See Note 1
@ For the period December 16, 2016 (commencement of operations) to October 31,
2017.
See Notes to Financial Statements
10
SunAmerica Specialty Series
STATEMENT OF CHANGES IN NET ASSETS
AIG Commodity AIG ESG
Strategy Fund#++ Dividend Fund
-------------------------- -------------
For the
period
December 16,
For the For the 2016@
year ended year ended through
October 31, October 31, October 31,
2017 2016 2017
------------ ------------ -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).................................................. $ (402,621) $ (600,635) $ 323,474
Net realized gain (loss) on investments and foreign currencies................ 92,916 (641,386) 132,803
Net unrealized gain (loss) on investments and foreign currencies.............. 682,430 (633,390) 1,005,085
------------ ------------ -----------
Net increase (decrease) in net assets resulting from operations................. 372,725 (1,875,411) 1,461,362
------------ ------------ -----------
Distributions to shareholders from:
Net investment income (Class A)............................................... -- -- --
Net investment income (Class C)............................................... -- -- --
Net investment income (Class W)............................................... -- -- --
Net realized gain on securities (Class A)..................................... -- -- --
Net realized gain on securities (Class C)..................................... -- -- --
Net realized gain on securities (Class W)..................................... -- -- --
------------ ------------ -----------
Total distributions to shareholders............................................. -- -- --
------------ ------------ -----------
Net increase (decrease) in net assets resulting from capital share transactions
(see Note 7)................................................................... (1,616,036) (1,182,824) 24,168,322
------------ ------------ -----------
Total increase (decrease) in net assets......................................... (1,243,311) (3,058,235) 25,629,684
NET ASSETS:
Beginning of period............................................................. 40,664,209 43,722,444 --
------------ ------------ -----------
End of period+.................................................................. $ 39,420,898 $ 40,664,209 $25,629,684
============ ============ ===========
+ Includes accumulated undistributed net investment income (loss)............... (12,187,285) $(11,930,018) $ 340,454
============ ============ ===========
AIG Focused Alpha
Large-Cap Fund++
---------------------------
For the For the
year ended year ended
October 31, October 31,
2017 2016
------------ -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).................................................. $ (2,240,749) $ (3,383,231)
Net realized gain (loss) on investments and foreign currencies................ 60,331,617 14,625,472
Net unrealized gain (loss) on investments and foreign currencies.............. 114,209,450 (20,033,569)
------------ -------------
Net increase (decrease) in net assets resulting from operations................. 172,300,318 (8,791,328)
------------ -------------
Distributions to shareholders from:
Net investment income (Class A)............................................... -- --
Net investment income (Class C)............................................... -- --
Net investment income (Class W)............................................... -- --
Net realized gain on securities (Class A)..................................... -- (47,456,936)
Net realized gain on securities (Class C)..................................... -- (12,349,233)
Net realized gain on securities (Class W)..................................... -- (1,214,309)
------------ -------------
Total distributions to shareholders............................................. -- (61,020,478)
------------ -------------
Net increase (decrease) in net assets resulting from capital share transactions
(see Note 7)................................................................... (60,788,856) (38,126,080)
------------ -------------
Total increase (decrease) in net assets......................................... 111,511,462 (107,937,886)
NET ASSETS:
Beginning of period............................................................. 527,776,949 635,714,835
------------ -------------
End of period+.................................................................. $639,288,411 $ 527,776,949
============ =============
+ Includes accumulated undistributed net investment income (loss)............... $ -- $ (2,828,993)
============ =============
# Consolidated (see Note 2)
@ Commencement of operations.
++ See Note 1
See Notes to Financial Statements
11
SunAmerica Specialty Series
STATEMENT OF CHANGES IN NET ASSETS -- (continued)
AIG Focused Multi-Cap AIG Global Trends AIG Income Explorer
Growth Fund++ Fund#++ Fund++
--------------------------- ------------------------ ------------------------
For the For the For the For the For the For the
year ended year ended year ended year ended year ended year ended
October 31, October 31, October 31, October 31, October 31, October 31,
2017 2016 2017 2016 2017 2016
------------ ------------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).................. $ (5,284,184) $ (6,100,223) $ (442,972) $ (680,984) $ 1,380,853 $ 1,134,520
Net realized gain (loss) on investments and
foreign currencies........................... 51,767,743 7,833,917 3,542,379 (540,453) 1,383,523 (453,831)
Net unrealized gain (loss) on investments
and foreign currencies....................... 110,141,740 (486,597) 607,541 (225,867) 1,045,481 1,606,841
------------ ------------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations................................ 156,625,299 1,247,097 3,706,948 (1,447,304) 3,809,857 2,287,530
------------ ------------- ----------- ----------- ----------- -----------
Distributions to shareholders from:
Net investment income (Class A)............... -- -- -- -- (994,077) (1,051,823)
Net investment income (Class C)............... -- -- -- -- (131,857) (115,078)
Net investment income (Class W)............... -- -- -- -- (90,675) (18,459)
Net realized gain on securities (Class A)..... (5,975,560) (52,919,947) -- (1,255,530) -- --
Net realized gain on securities (Class C)..... (1,357,932) (12,328,178) -- (290,908) -- --
Net realized gain on securities (Class W)..... (426,999) (4,912,153) -- (98,364) -- --
------------ ------------- ----------- ----------- ----------- -----------
Total distributions to shareholders............. (7,760,491) (70,160,278) -- (1,644,802) (1,216,609) (1,185,360)
------------ ------------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from capital share transactions
(see Note 7)................................... (37,654,310) (47,100,356) (5,466,547) (780,879) 15,906,209 1,322,644
------------ ------------- ----------- ----------- ----------- -----------
Total increase (decrease) in net assets......... 111,210,498 (116,013,537) (1,759,599) (3,872,985) 18,499,457 2,424,814
NET ASSETS:
Beginning of period............................. 481,691,020 597,704,557 38,332,594 42,205,579 26,006,648 23,581,834
------------ ------------- ----------- ----------- ----------- -----------
End of period+.................................. $592,901,518 $ 481,691,020 $36,572,995 $38,332,594 $44,506,105 $26,006,648
============ ============= =========== =========== =========== ===========
+ Includes accumulated undistributed net
investment income (loss)....................... $ (3,625,078) $ (5,280,094) (4,483,598) $(4,901,982) $ 210,306 $ (12,080)
============ ============= =========== =========== =========== ===========
AIG Small-Cap Fund++
------------------------
For the For the
year ended year ended
October 31, October 31,
2017 2016
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss).................. $ (419,650) $ (316,182)
Net realized gain (loss) on investments and
foreign currencies........................... 6,428,333 1,329,510
Net unrealized gain (loss) on investments
and foreign currencies....................... 8,391,818 1,123,238
----------- -----------
Net increase (decrease) in net assets resulting
from operations................................ 14,400,501 2,136,566
----------- -----------
Distributions to shareholders from:
Net investment income (Class A)............... -- --
Net investment income (Class C)............... -- --
Net investment income (Class W)............... -- --
Net realized gain on securities (Class A)..... (1,389,064) (3,889,649)
Net realized gain on securities (Class C)..... (29,030) (47,092)
Net realized gain on securities (Class W)..... (13,932) (24,229)
----------- -----------
Total distributions to shareholders............. (1,432,026) (3,960,970)
----------- -----------
Net increase (decrease) in net assets
resulting from capital share transactions
(see Note 7)................................... 1,698,979 (6,725,322)
----------- -----------
Total increase (decrease) in net assets......... 14,667,454 (8,549,726)
NET ASSETS:
Beginning of period............................. 43,890,430 52,440,156
----------- -----------
End of period+.................................. $58,557,884 $43,890,430
=========== ===========
+ Includes accumulated undistributed net
investment income (loss)....................... $ (3,642) $ (197,561)
=========== ===========
# Consolidated (see Note 2)
++ See Note 1
See Notes to Financial Statements
12
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets
Value Net realized Total from from net from Total Value end of
beginning investment and investment investment net realized Distri- end of Total period
Period Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------
AIG COMMODITY STRATEGY FUND#+
-----------------------------
Class A
-------
10/31/13 $8.72 $(0.08) $(0.75) $(0.83) $-- $-- $-- $7.89 (9.52)% $65,418
10/31/14 7.89 (0.07) (0.08) (0.15) -- -- -- 7.74 (1.90)(6) 45,829
10/31/15 7.74 (0.09) (0.25) (0.34) -- -- -- 7.40 (4.39) 35,472
10/31/16 7.40 (0.10) (0.22) (0.32) -- -- -- 7.08 (4.32) 35,228
10/31/17 7.08 (0.07) 0.12 0.05 -- -- -- 7.13 0.71 35,015
Class C
-------
10/31/13 $8.63 $(0.13) $(0.73) $(0.86) $-- $-- $-- $7.77 (9.97)%(5) $14,198
10/31/14 7.77 (0.13) (0.06) (0.19) -- -- -- 7.58 (2.45)(6) 9,153
10/31/15 7.58 (0.13) (0.25) (0.38) -- -- -- 7.20 (5.01) 5,272
10/31/16 7.20 (0.14) (0.22) (0.36) -- -- -- 6.84 (5.00) 3,478
10/31/17 6.84 (0.11) 0.12 0.01 -- -- -- 6.85 0.15 2,755
Class W
-------
10/31/13 $8.74 $(0.06) $(0.74) $(0.80) $-- $-- $-- $7.94 (9.15)%(5) $ 9,066
10/31/14 7.94 (0.06) (0.08) (0.14) -- -- -- 7.80 (1.76)(6) 9,977
10/31/15 7.80 (0.07) (0.26) (0.33) -- -- -- 7.47 (4.23) 2,979
10/31/16 7.47 (0.09) (0.21) (0.30) -- -- -- 7.17 (4.02) 1,958
10/31/17 7.17 (0.06) 0.12 0.06 -- -- -- 7.23 0.84 1,651
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets(3) net assets(3) Turnover
------------- ------------- ---------
1.72% (0.94)% 57%
1.72 (0.91) 16
1.72 (1.12) 54
1.72 (1.40) 50
1.73 (0.98) 49
2.30%(4) (1.52)% 57%
2.37 (1.56) 16
2.37 (1.77) 54
2.37 (2.06) 50
2.38 (1.65) 49
1.43%(4) (0.63)% 57%
1.52 (0.73) 16
1.52 (0.91) 54
1.52 (1.21) 50
1.53 (0.79) 49
--------
# Consolidated (see Note 2)
+ See Note 1
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements and expense reductions.
(3)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/13 10/31/14 10/31/15 10/31/16 10/31/17
-------- -------- -------- -------- --------
Commodity Strategy Fund Class A......... 0.42% 0.49% 0.82% 0.85% 0.92%
Commodity Strategy Fund Class C......... 0.53 0.59 0.92 1.21 1.25
Commodity Strategy Fund Class W......... 0.56 0.65 0.84 1.48 1.52
(4)Includes a reimbursement of expenses from a prior year of 0.07% and 0.09%
for Class C and Class W, respectively.
(5)The Fund's performance figure was increased by 0.11% and 0.23% for Class C
and Class W, respectively, for a reimbursement of expenses from a prior year.
(6)The Fund's performance figure was increased by 0.69% for Class A, Class C
and Class W, from a reimbursement by an affiliate.
See Notes to Financial Statements
13
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets
Value Net realized Total from from net from Total Value end of
beginning investment and investment investment net realized Distri- end of Total period
Period Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------
AIG ESG DIVIDEND FUND
---------------------
Class A
-------
12/16/16@-
10/31/17 $15.00 $0.25 $0.56 $0.81 $-- $-- $-- $15.81 5.40% $24,913
Class C
-------
12/16/16@-
10/31/17 $15.00 $0.16 $0.56 $0.72 $-- $-- $-- $15.72 4.80% $ 365
Class W
-------
12/16/16@-
10/31/17 $15.00 $0.28 $0.56 $0.84 $-- $-- $-- $15.84 5.60% $ 352
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets(3)(4) net assets(3)(4) Turnover
---------------- ---------------- ---------
1.25% 1.92% 18%
1.90% 1.22% 18%
1.05% 2.06% 18%
--------
@ Commencement of operations.
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements and expense reductions.
(3)Annualized.
(4)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/17(3)
-----------
ESG Dividend Fund Class A............... 1.25%
ESG Dividend Fund Class C............... 4.56
ESG Dividend Fund Class W............... 5.15
See Notes to Financial Statements
14
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset Net (both Distributions Distributions Asset Assets
Value investment realized Total from from net from net Total Value end of
beginning income and investment investment realized Distri- end of Total period
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
------------ --------- ---------- ----------- ---------- ------------- ------------- ------- ------ --------- --------
AIG FOCUSED ALPHA LARGE-CAP FUND#
---------------------------------
Class A
-------
10/31/13 $19.25 $(0.08) $ 6.06(4) $ 5.98 $-- $(0.86) $(0.86) $24.37 32.50% $521,938
10/31/14 24.37 (0.12) 4.47 4.35 -- (1.27) (1.27) 27.45 18.66 525,359
10/31/15 27.45 (0.11) 0.86 0.75 -- (1.64) (1.64) 26.56 2.98 495,598
10/31/16 26.56 (0.11) (0.14) (0.25) -- (2.61) (2.61) 23.70 (0.91) 413,090
10/31/17 23.70 (0.07) 8.28 8.21 -- -- -- 31.91 34.64 505,796
Class C
-------
10/31/13 $19.17 $(0.19) $ 5.99(4) $ 5.80 $-- $(0.86) $(0.86) $24.11 31.66% $118,963
10/31/14 24.11 (0.28) 4.40 4.12 -- (1.27) (1.27) 26.96 17.87 126,687
10/31/15 26.96 (0.28) 0.85 0.57 -- (1.64) (1.64) 25.89 2.33 123,641
10/31/16 25.89 (0.26) (0.14) (0.40) -- (2.61) (2.61) 22.88 (1.58) 106,319
10/31/17 22.88 (0.24) 7.97 7.73 -- -- -- 30.61 33.78 118,151
Class W
-------
10/31/13 $19.29 $(0.07) $ 6.12(4) $ 6.05 $-- $(0.86) $(0.86) $24.48 32.80% $ 2,490
10/31/14 24.48 (0.08) 4.48 4.40 -- (1.27) (1.27) 27.61 18.78 8,109
10/31/15 27.61 (0.08) 0.88 0.80 -- (1.64) (1.64) 26.77 3.15 16,475
10/31/16 26.77 (0.08) (0.15) (0.23) -- (2.61) (2.61) 23.93 (0.82) 8,368
10/31/17 23.93 (0.05) 8.39 8.34 -- -- -- 32.27 34.85 15,342
Ratio
of net
investment
Ratio of income
expenses (loss) to
to average average Portfolio
net assets(3) net assets(3) Turnover
------------- ------------- ---------
1.72%(6) (0.38)%(6) 124%(5)
1.66(6) (0.46)(6) 57
1.66 (0.43) 82
1.67 (0.47) 38
1.65 (0.26) 68
2.37%(6) (1.04)%(6) 124%(5)
2.32(6) (1.12)(6) 57
2.31 (1.08) 82
2.32 (1.12) 38
2.30 (0.91) 68
1.52%(6) (0.32)%(6) 124%(5)
1.52(6) (0.31)(6) 57
1.52(6) (0.29)(6) 82
1.52(6) (0.31)(6) 38
1.52(6) (0.18)(6) 68
--------
# See Note 1
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements and expense reductions.
(3)Excludes expense reductions. If expense reductions had been applied, the
ratio of expenses to average net assets would have been lower and the ratio
of net investment income (loss) to average net assets would have been higher
by the following:
10/31/13 10/31/14 10/31/15 10/31/16 10/31/17
-------- -------- -------- -------- --------
Focused Alpha Large-Cap Fund Class A 0.00% 0.00% 0.00% 0.00% 0.00%
Focused Alpha Large-Cap Fund
Class C............................ 0.00 0.00 0.00 0.00 0.00
Focused Alpha Large-Cap Fund
Class W............................ 0.00 0.00 0.00 0.00 0.00
(4)Includes the effect of a merger.
(5)Excludes purchases/sales due to fund merger.
(6)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/13 10/31/14 10/31/15 10/31/16 10/31/17
-------- -------- -------- -------- --------
Focused Alpha Large-Cap Fund
Class A...................... 0.00% (0.01)% -- % -- % -- %
Focused Alpha Large-Cap Fund
Class C...................... 0.03 (0.02) -- -- --
Focused Alpha Large-Cap Fund
Class W...................... 1.13 0.13 0.02 0.08 0.01
See Notes to Financial Statements
15
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset Net (both Distributions Distributions Asset Assets
Value investment realized Total from from net from net Total Value end of
beginning income and investment investment realized Distri- end of Total period
Period Ended of period (loss)(1) unrealized) operations income gains butions period Return(2) (000's)
------------ --------- ---------- ----------- ---------- ------------- ------------- ------- ------ --------- --------
AIG FOCUSED MULTI-CAP GROWTH FUND#
----------------------------------
Class A
-------
10/31/13 $21.52 $(0.19) $5.95(4) $5.76 $-- $(2.50) $(2.50) $24.78 30.45% $418,071
10/31/14 24.78 (0.28) 3.77 3.49 -- (1.05) (1.05) 27.22 14.70 462,483
10/31/15 27.22 (0.26) 0.73 0.47 -- (0.84) (0.84) 26.85 1.87 441,345
10/31/16 26.85 (0.25) 0.43 0.18 -- (3.27) (3.27) 23.76 0.75 369,683
10/31/17 23.76 (0.25) 8.52 8.27 -- (0.39) (0.39) 31.64 35.38 456,940
Class C
-------
10/31/13 $21.42 $(0.33) $5.91(4) $5.58 $-- $(2.50) $(2.50) $24.50 29.66% $ 72,132
10/31/14 24.50 (0.45) 3.71 3.26 -- (1.05) (1.05) 26.71 13.90 103,900
10/31/15 26.71 (0.43) 0.71 0.28 -- (0.84) (0.84) 26.15 1.17 99,519
10/31/16 26.15 (0.39) 0.41 0.02 -- (3.27) (3.27) 22.90 0.09 81,943
10/31/17 22.90 (0.41) 8.17 7.76 -- (0.39) (0.39) 30.27 34.47 90,491
Class W
-------
10/31/13 $21.55 $(0.18) $6.01(4) $5.83 $-- $(2.50) $(2.50) $24.88 30.76% $ 30,710
10/31/14 24.88 (0.24) 3.78 3.54 -- (1.05) (1.05) 27.37 14.85 54,920
10/31/15 27.37 (0.21) 0.73 0.52 -- (0.84) (0.84) 27.05 2.05 56,840
10/31/16 27.05 (0.21) 0.43 0.22 -- (3.27) (3.27) 24.00 0.91 30,065
10/31/17 24.00 (0.20) 8.62 8.42 -- (0.39) (0.39) 32.03 35.65 45,470
Ratio
of net
investment
Ratio of income
expenses (loss) to
to average average Portfolio
net assets(3) net assets(3) Turnover
------------- ------------- ---------
1.71%(6) (0.87)%(6) 107%(5)
1.65 (1.10) 65
1.67 (0.97) 103
1.68 (1.07) 29
1.66 (0.93) 66
2.37%(6) (1.58)%(6) 107%(5)
2.37(6) (1.82)(6) 65
2.33(6) (1.64)(6) 103
2.33 (1.72) 29
2.32 (1.59) 66
1.52%(6) (0.85)%(6) 107%(5)
1.50(6) (0.98)(6) 65
1.47 (0.78) 103
1.51 (0.86) 29
1.48 (0.75) 66
--------
# See Note 1
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements and expense reductions.
(3)Excludes expense reductions. If expense reductions had been applied, the
ratio of expenses to average net assets would have been lower and the ratio
of net investment income (loss) to average net assets would have been higher
by the following:
10/31/13 10/31/14 10/31/15 10/31/16 10/31/17
-------- -------- -------- -------- --------
Focused Multi-Cap Fund Class A..... 0.00% 0.00% 0.00% 0.00% 0.00%
Focused Multi-Cap Fund Class C..... 0.00 0.00 0.00 0.00 0.00
Focused Multi-Cap Fund Class W..... 0.00 0.00 0.00 0.00 0.00
(4)Includes the effect of a merger.
(5)Excludes purchases/sales due to fund merger.
(6)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/13 10/31/14 10/31/15
-------- -------- --------
Focused Multi-Cap Fund Class A..... (0.01)% -- % -- %
Focused Multi-Cap Fund Class C..... 0.03 (0.03) (0.00)
Focused Multi-Cap Fund Class W..... 0.01 (0.05) --
See Notes to Financial Statements
16
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets Ratio of
Value Net realized Total from from net from Total Value end of expenses
Period beginning investment and investment investment net realized Distri- end of Total period to average
Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets(3)
-------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ------- -------------
AIG GLOBAL TRENDS FUND#+
------------------------
Class A
-------
10/31/13 $14.47 $(0.27) $ 1.03 $ 0.76 $-- $ -- $ -- $15.23 5.25%(4)(6) $66,702 1.85%
10/31/14 15.23 (0.26) 0.06 (0.20) -- (1.49) (1.49) 13.54 (1.39) 35,293 1.86
10/31/15 13.54 (0.25) 0.44 0.19 -- (0.20) (0.20) 13.53 1.42 31,504 1.86
10/31/16 13.53 (0.20) (0.26) (0.46) -- (0.50) (0.50) 12.57 (3.42) 32,309 1.86
10/31/17 12.57 (0.15) 1.49 1.34 -- -- -- 13.91 10.66 31,860 1.86
Class C
-------
10/31/13 $14.39 $(0.37) $ 1.03 $ 0.66 $-- $ -- $ -- $15.05 4.59%(4) $23,535 2.48%(5)
10/31/14 15.05 (0.35) 0.07 (0.28) -- (1.49) (1.49) 13.28 (1.99) 11,428 2.51
10/31/15 13.28 (0.33) 0.43 0.10 -- (0.20) (0.20) 13.18 0.77 7,984 2.51
10/31/16 13.18 (0.29) (0.24) (0.53) -- (0.50) (0.50) 12.15 (4.06) 4,597 2.51
10/31/17 12.15 (0.23) 1.44 1.21 -- -- -- 13.36 9.96 3,720 2.51
Class W
-------
10/31/13 $14.49 $(0.24) $ 1.04 $ 0.80 $-- $ -- $ -- $15.29 5.52%(4)(6) $10,668 1.60%(5)
10/31/14 15.29 (0.23) 0.07 (0.16) -- (1.49) (1.49) 13.64 (1.09) 6,755 1.66
10/31/15 13.64 (0.23) 0.44 0.21 -- (0.20) (0.20) 13.65 1.56 2,717 1.66
10/31/16 13.65 (0.18) (0.26) (0.44) -- (0.50) (0.50) 12.71 (3.24) 1,427 1.66
10/31/17 12.71 (0.13) 1.52 1.39 -- -- -- 14.10 10.94 993 1.67
Ratio
of net
investment
income to
average Portfolio
net assets(3) Turnover
------------- ---------
(1.74)% 0%
(1.82) 0
(1.79) 0
(1.59) 0
(1.13) 0
(2.38)% 0%
(2.47) 0
(2.44) 0
(2.25) 0
(1.80) 0
(1.48)% 0%
(1.62) 0
(1.59) 0
(1.40) 0
(0.96) 0
--------
# Consolidated (see Note 2)
+ See Note 1
(1)Calculated based upon average shares outstanding.
(2)Total return does not reflect sales load, but does include expense
reimbursements and expense reductions.
(3)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/13 10/31/14 10/31/15 10/31/16 10/31/17
-------- -------- -------- -------- --------
Global Trends Fund Class A.............. 0.28% 0.47% 0.58% 0.58% 0.74%
Global Trends Fund Class C.............. 0.25 0.43 0.66 0.79 0.93
Global Trends Fund Class W.............. 0.26 0.47 0.84 1.22 1.59
(4)The Fund's performance figure was increased by 0.35% for Class A, Class C
and Class W, from a reimbursement by an affiliate.
(5)Includes a reimbursement of expenses from a prior year of 0.01% and 0.02%
for Class C and Class W, respectively.
(6)The Fund's performance figure was increased by 0.07% for Class A and Class W
for a reimbursement of expenses from a prior year.
See Notes to Financial Statements
17
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets Ratio of
Value Net realized Total from from net from Total Value end of expenses
beginning investment and investment investment net realized Distri- end of Total period to average
Period Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets(4)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ------- -------------
AIG INCOME EXPLORER FUND+
-------------------------
Class A
-------
07/02/13@-
10/31/13 $15.00 $0.20 $ 0.55 $ 0.75 $(0.19) $ -- $(0.19) $15.56 5.03% $21,475 1.72%(3)
10/31/14 15.56 0.72 0.39 1.11 (0.71) -- (0.71) 15.96 7.28 23,620 1.72
10/31/15 15.96 0.70 (1.39) (0.69) (0.71) (0.64) (1.35) 13.92 (4.38) 20,062 1.72
10/31/16 13.92 0.62 0.60 1.22 (0.64) -- (0.64) 14.50 9.10 22,195 1.72
10/31/17 14.50 0.65 1.23 1.88 (0.57) -- (0.57) 15.81 13.21(5) 31,625 1.72
Class C
-------
07/02/13@-
10/31/13 $15.00 $0.17 $ 0.55 $ 0.72 $(0.16) $ -- $(0.16) $15.56 4.81% $ 190 2.37%(3)
10/31/14 15.56 0.52 0.49 1.01 (0.63) -- (0.63) 15.94 6.58 2,860 2.37
10/31/15 15.94 0.60 (1.38) (0.78) (0.62) (0.64) (1.26) 13.90 (5.00) 3,110 2.37
10/31/16 13.90 0.52 0.61 1.13 (0.55) -- (0.55) 14.48 8.42 3,307 2.37
10/31/17 14.48 0.55 1.22 1.77 (0.47) -- (0.47) 15.78 12.43(5) 4,954 2.37
Class W
-------
07/02/13@-
10/31/13 $15.00 $0.22 $ 0.54 $ 0.76 $(0.20) $ -- $(0.20) $15.56 5.10% $ 105 1.52%(3)
10/31/14 15.56 0.65 0.49 1.14 (0.74) -- (0.74) 15.96 7.51 502 1.52
10/31/15 15.96 0.73 (1.40) (0.67) (0.74) (0.64) (1.38) 13.91 (4.26) 410 1.52
10/31/16 13.91 0.63 0.63 1.26 (0.67) -- (0.67) 14.50 9.38 505 1.52
10/31/17 14.50 0.54 1.37 1.91 (0.60) -- (0.60) 15.81 13.44(5) 7,927 1.52
Ratio
of net
investment
income to
average Portfolio
net assets(4) Turnover
------------- ---------
4.22%(3) 13%
4.55 51
4.76 50
4.42 54
4.30 49
3.39%(3) 13%
3.53 51
4.11 50
3.75 54
3.65 49
4.36%(3) 13%
4.37 51
4.92 50
4.65 54
3.95 49
--------
@ Commencement of operations.
+ See Note 1
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements and expense reductions.
(3)Annualized.
(4)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/13(3) 10/31/14 10/31/15 10/31/16 10/31/17
----------- -------- -------- -------- --------
Income Explorer Fund Class A............ 3.80% 0.40% 0.42% 0.52% 0.40%
Income Explorer Fund Class C............ 44.66 0.82 0.75 0.97 0.56
Income Explorer Fund Class W............ 53.79 3.71 2.94 4.00 0.71
(5)The Portfolio's performance figure was increased by less than 0.01% from
gains on the disposal of investments in violation of investment restrictions.
See Notes to Financial Statements
18
SunAmerica Specialty Series
FINANCIAL HIGHLIGHTS -- (continued)
Net gain
(loss) on
Net investments Net Net
Asset (both Dividends Distributions Asset Assets Ratio of
Value Net realized Total from from net from Total Value end of expenses
beginning investment and investment investment net realized Distri- end of Total period to average
Period Ended of period income(1) unrealized) operations income gains butions period Return(2) (000's) net assets(4)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- ------- -------------
AIG SMALL-CAP FUND+
-------------------
Class A
-------
02/06/14@-
10/31/14 $15.00 $(0.08) $0.57 $0.49 $-- $ -- $ -- $15.49 3.27% $50,123 1.72%(3)
10/31/15 15.49 (0.13) 1.06 0.93 -- -- -- 16.42 6.00 51,789 1.72
10/31/16 16.42 (0.10) 0.75 0.65 -- (1.32) (1.32) 15.75 4.61 42,739 1.72
10/31/17 15.75 (0.14) 5.22 5.08 -- (0.52) (0.52) 20.31 32.76 48,384 1.72
Class C
-------
02/06/14@-
10/31/14 $15.00 $(0.15) $0.56 $0.41 $-- $ -- $ -- $15.41 2.73% $ 256 2.37%(3)
10/31/15 15.41 (0.23) 1.06 0.83 -- -- -- 16.24 5.39 541 2.37
10/31/16 16.24 (0.19) 0.72 0.53 -- (1.32) (1.32) 15.45 3.87 811 2.37
10/31/17 15.45 (0.26) 5.11 4.85 -- (0.52) (0.52) 19.78 31.89 1,944 2.37
Class W
-------
02/06/14@-
10/31/14 $15.00 $(0.06) $0.57 $0.51 $-- $ -- $ -- $15.51 3.40% $ 113 1.52%(3)
10/31/15 15.51 (0.10) 1.07 0.97 -- -- -- 16.48 6.25 110 1.52
10/31/16 16.48 (0.07) 0.75 0.68 -- (1.32) (1.32) 15.84 4.79 341 1.52
10/31/17 15.84 (0.12) 5.26 5.14 -- (0.52) (0.52) 20.46 32.96 8,230 1.52
Ratio
of net
investment
income to
average Portfolio
net assets(4) Turnover
------------- ---------
(0.76)%(3) 61%
(0.79) 88
(0.66) 67
(0.79) 65
(1.46)%(3) 61%
(1.47) 88
(1.33) 67
(1.48) 65
(0.57)%(3) 61%
(0.59) 88
(0.47) 67
(0.70) 65
--------
@ Commencement of operations.
+ See Note 1
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements and expense reductions.
(3)Annualized.
(4)Net of following expense reimbursements, waivers and (recoupments), if
applicable (based on average net assets):
10/31/14(3) 10/31/15 10/31/16 10/31/17
----------- -------- -------- --------
Small Cap Fund Class A.................. 0.26% 0.33% 0.26% 0.29%
Small Cap Fund Class C.................. 12.36 4.32 2.27 0.96
Small Cap Fund Class W.................. 18.46 13.86 5.01 0.50
See Notes to Financial Statements
19
SunAmerica Specialty Series -- AIG Commodity Strategy Fund#
CONSOLIDATED PORTFOLIO PROFILE -- October 31, 2017@ -- (unaudited)
Industry Allocation*
Repurchase Agreements............................................... 75.5%
U.S. Government Agencies............................................ 9.0
United States Treasury Notes........................................ 8.4
Investment Companies................................................ 1.1
Federal Farm Credit Bank............................................ 0.5
-----
Total Investments................................................... 94.5
Other assets less liabilities (including futures, options and swaps
contracts)......................................................... 5.5
-----
Net Assets.......................................................... 100.0%
=====
--------
* Calculated as a percentage of net assets
# See Note 1
Credit Quality+**
Aaa. 100.0%
=====
--------
@ Consolidated (See Note 2)
+ Source: Moody's
** Calculated as a percentage of total debt issues, excluding short-term
securities.
20
SunAmerica Specialty Series -- AIG Commodity Strategy Fund#
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2017@
Shares/
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 0.5%
Federal Farm Credit Bank FRS -- 0.5%
1.16% (1 USFREF + 0.00%)
due 08/08/2019 (cost $200,000).............. $ 200,000 $ 199,965
----------
U.S. GOVERNMENT TREASURIES -- 8.4%
United States Treasury Notes FRS -- 8.4%
1.18% (3 UTBMM + 0.05%)
due 10/31/2019.............................. 1,500,000 1,499,188
1.19% (3 UTBMM + 0.06%)
due 07/31/2019.............................. 200,000 200,070
1.20% (3 UTBMM + 0.07%)
due 04/30/2019.............................. 600,000 600,405
1.32% (3 UTBMM + 0.19%)
due 04/30/2018.............................. 1,000,000 1,001,131
----------
Total U.S. Government Treasuries
(cost $3,300,480)........................... 3,300,794
----------
COMMON STOCKS -- 1.1%
Investment Companies -- 1.1%
Uranium Participation Corp.+(1)
(cost $587,808)............................. 153,824 418,512
----------
OPTIONS - PURCHASED -- 0.0%
Exchange Traded Purchased Call Options(1)(4). 26 26,560
Over the Counter Purchased Put Options(1)(5). 4,489 0
----------
Total Options -- Purchased
(cost $35,231).............................. 26,560
----------
Total Long-Term Investment Securities
(cost $4,123,519)........................... 3,945,831
----------
SHORT-TERM INVESTMENT SECURITIES -- 9.0%
U.S. Government Agencies -- 9.0%
Federal Home Loan Bank.......................
1.06% due 12/04/2017........................ 650,000 649,381
1.08% due 11/09/2017........................ 300,000 299,933
1.12% due 12/01/2017........................ 600,000 599,480
1.16% due 01/12/2018........................ 500,000 498,880
1.16% due 01/24/2018........................ 300,000 299,216
1.16% due 01/26/2018........................ 1,199,000 1,195,791
----------
Total Short-Term Investment Securities
(cost $3,542,563)........................... 3,542,681
----------
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 75.5%
Bank of America Securities LLC Joint
Repurchase Agreement(2)................. $2,440,000 $ 2,440,000
Bank of America Securities LLC Joint
Repurchase Agreement(1)(2).............. 455,000 455,000
Barclays Capital, Inc. Joint Repurchase
Agreement(2)............................ 3,810,000 3,810,000
Barclays Capital, Inc. Joint Repurchase
Agreement(1)(2)......................... 715,000 715,000
BNP Paribas SA Joint Repurchase
Agreement(2)............................ 6,480,000 6,480,000
BNP Paribas SA Joint Repurchase
Agreement(1)(2)......................... 1,215,000 1,215,000
Deutsche Bank AG Joint Repurchase
Agreement(2)............................ 3,780,000 3,780,000
Deutsche Bank AG Joint Repurchase
Agreement(1)(2)......................... 710,000 710,000
RBS Securities, Inc. Joint Repurchase
Agreement(2)............................ 8,555,000 8,555,000
RBS Securities, Inc. Joint Repurchase
Agreement(1)(2)......................... 1,620,000 1,620,000
-----------
Total Repurchase Agreements
(cost $29,780,000)...................... 29,780,000
-----------
TOTAL INVESTMENTS
(cost $37,446,082)(3)................... 94.5% 37,268,512
Other assets less liabilities.............. 5.5 2,152,386
---------- -----------
NET ASSETS 100.0% $39,420,898
========== ===========
--------
# See Note 1
@ Consolidated (see Note 2)
+ Non-income producing security
(1)The security is owned by the AIG Commodity Strategy Cayman Fund, Ltd., which
is a wholly-owned subsidiary of the AIG Commodity Strategy Fund.
(2)See Note 3 for details of Joint Repurchase Agreements.
(3)See Note 6 for cost of investments on a tax basis.
FRS-- Floating Rate Security
The rates shown on FRS are the current interest rates at October 31, 2017 and
unless noted otherwise, the dates shown are the original maturity dates.
Index Legend
1 USFREF - 1 Month US Federal Funds Effective Rate (continuous series)
3 UTBMM - 3 Month US Treasury 3 Month Bill Money Market Yield
(4)Call Options - Purchased
Exchange Traded Purchased Call Options(a)
--------------------------------------------------------------------------------------------------------------------
Value at Unrealized
Expiration Strike No. of Notional Premiums October 31, Appreciation
Issue Counterparty Month Price Contracts Amount* Paid 2017 (Depreciation)
------------------ --------------------- ---------- --------- --------- -------- -------- ----------- --------------
Corn Futures Morgan Stanley & Co. Dec-17 $ 360.00 11 $190,163 $ 1,359 $ 550 $ (809)
Brent Oil Futures Morgan Stanley & Co. Mar-18 $ 63.00 9 547,740 11,250 13,860 2,610
Aluminium Futures Morgan Stanley & Co. Mar-18 $2,200.00 6 12,150 12,150 12,150 --
-- -------- ------- ------- ------
26 $750,053 $24,759 $26,560 $1,801
== ======== ======= ======= ======
--------
* Notional amount is calculated by multiplying the number of contracts by the
multiplier by the market value of the underlying security or index.
21
SunAmerica Specialty Series -- AIG Commodity Strategy Fund#
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2017@ --
(continued)
(5)Put Options - Purchased
Over the Counter Purchased Put
Options(a)
----------------------------------------------------------------------------------------------------------------------------------
Value at
Expiration Strike No. of Notional Premiums October 31,
Issue Counterparty Month Price Contracts Amount* Paid 2017
--------------------------- ---------------------------- ---------- ------- --------- -------- -------- -----------
Bloomberg Industrial Metals
Subindex Goldman Sachs International Nov-17 $109.00 4,489 $595,523 $10,472 $0
===== ======== ======= ==
Over the Counter Purchased Put
Options(a)
----------------------------------------------------------------------------------------------------------------------------------
Unrealized
Appreciation
Issue (Depreciation)
--------------------------- --------------
Bloomberg Industrial Metals
Subindex $(10,472)
========
--------
* Notional amount is calculated by multiplying the number of contracts by the
multiplier by the market value of the underlying security or index.
Exchange Traded Written Call Options(a)
-----------------------------------------------------------------------------------------------------------------
Value at Unrealized
Expiration Strike No. of Notional Premiums October 31, Appreciation
Issue Counterparty Month Price Contracts Amount** Received 2017 (Depreciation)
------------------ --------------------- ---------- ------ --------- -------- -------- ----------- --------------
Aluminium Futures Morgan Stanley & Co. Mar-18 $2,500 6 $ 12,150 $2,603* $2,603 $ 0
Brent Oil Futures Morgan Stanley & Co. Mar-18 67.00 9 547,740 3,690* 4,770 (1,080)
-- -------- ------ ------ -------
15 $559,890 $6,293 $7,373 $(1,080)
== ======== ====== ====== =======
--------
* Represents value at trade date
** Notional amount is calculated by multiplying the number of contracts by the
multiplier by the market value of the underlying security or index.
Futures Contracts(a)
------------------------------------------------------------------------------------------
Unrealized
Number of Notional Notional Appreciation
Contracts Type Description Expiration Month Basis* Value* (Depreciation)
--------- ----- -------------------- ---------------- ---------- ---------- --------------
11 Short Aluminum Futures December 2017 $ 520,871 $ 591,938 $ (71,067)
53 Long Aluminum Futures December 2017 2,718,038 2,852,063 134,025
10 Short Aluminum Futures December 2018 519,310 551,250 (31,940)
43 Long Brent Crude Futures November 2017 2,434,610 2,620,420 185,810
15 Long Brent Crude Futures December 2017 856,130 909,900 53,770
5 Short Brent Crude Futures October 2018 257,800 292,350 (34,550)
5 Short Brent Crude Futures October 2020 271,900 280,300 (8,400)
4 Long Cocoa Futures March 2018 84,700 83,560 (1,140)
15 Long Coffee Futures March 2018 743,513 723,375 (20,138)
14 Long Copper Futures December 2017 2,373,913 2,390,938 17,025
118 Long Corn Futures December 2017 2,243,025 2,039,925 (203,100)
11 Short Corn Futures July 2018 209,225 206,800 2,425
2 Long Cotton Futures March 2018 67,560 68,340 780
1 Long Gasoil Futures January 2018 52,750 54,675 1,925
13 Long Gasoline Futures December 2017 892,874 935,025 42,151
4 Short Gasoline Futures February 2018 258,048 289,968 (31,920)
9 Long Gold Futures December 2017 1,128,120 1,143,450 15,330
14 Long Heating Oil Futures December 2017 1,056,476 1,105,675 49,199
3 Long Lead Futures December 2017 176,685 180,675 3,990
6 Long Lean Hogs Futures December 2017 141,790 163,200 21,410
2 Long Natural Gas Futures December 2017 67,740 60,520 (7,220)
34 Long Natural Gas Futures January 2018 1,128,640 1,030,200 (98,440)
22 Long Natural Gas Futures March 2018 639,320 629,640 (9,680)
1 Short Natural Gas Futures December 2019 28,370 31,140 (2,770)
1 Short Natural Gas Futures January 2020 28,370 30,900 (2,530)
1 Short Natural Gas Futures February 2020 28,370 30,350 (1,980)
1 Short Natural Gas Futures March 2020 28,370 27,380 990
1 Short Natural Gas Futures April 2020 28,370 27,120 1,250
1 Short Natural Gas Futures May 2020 28,370 27,360 1,010
22
SunAmerica Specialty Series -- AIG Commodity Strategy Fund#
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2017@ --
(continued)
Futures Contracts(a)
-------------------------------------------------------------------------------------------
Unrealized
Number of Notional Notional Appreciation
Contracts Type Description Expiration Month Basis* Value* (Depreciation)
--------- ----- --------------------- ---------------- ---------- ---------- --------------
1 Short Natural Gas Futures June 2020 $ 28,370 $ 27,630 $ 740
1 Short Natural Gas Futures July 2020 28,370 27,750 620
1 Short Natural Gas Futures August 2020 28,370 27,750 620
1 Short Natural Gas Futures September 2020 28,370 28,010 360
1 Short Natural Gas Futures October 2020 28,370 28,690 (320)
1 Short Natural Gas Futures November 2020 28,370 30,190 (1,820)
15 Long Nickel Futures December 2017 1,038,088 1,104,975 66,887
13 Long Silver Futures December 2017 1,101,067 1,085,045 (16,022)
26 Long Soybean Futures January 2018 1,277,062 1,280,175 3,113
35 Long Soybean Meal Futures December 2017 1,044,830 1,091,300 46,470
32 Long Soybean Oil Futures December 2017 628,194 667,200 39,006
27 Long Sugar Futures February 2018 444,024 445,738 1,714
26 Long Sugar Futures April 2018 417,312 431,558 14,246
12 Long Wheat Futures December 2017 292,500 251,100 (41,400)
19 Long Wheat Futures December 2017 438,063 395,675 (42,388)
23 Long WTI Crude Futures January 2018 1,192,200 1,257,870 65,670
13 Long WTI Crude Futures November 2018 676,739 689,000 12,261
17 Long Zinc Futures December 2017 1,249,206 1,398,250 149,044
17 Short Zinc Futures December 2017 1,349,554 1,398,250 (48,696)
10 Long Zinc Futures March 2018 797,313 811,750 14,437
--------
$270,757
========
--------
* Notional basis refers to the contractual amount agreed upon at inception of
the open contract; notional value represents the current value of the open
contract.
Over the
Counter Total
Return Swap
Contracts(a)+
----------------------------------------------------------------------------------------------------------------------------------
Notional
Swap Amount Maturity Payments Received (Paid) by the Total Return Received or Paid by Upfront Premiums
Counterparty (000's) Date Portfolio/Frequency Portfolio/Frequency Paid/(Received)
------------- -------- ---------- ------------------------------- -------------------------------- ----------------
Goldman $ 244 11/29/2017 $17.11 per oz./At Maturity LBMA Silver Price/At Maturity $--
Sachs
International
Barclays 249 02/15/2018 (0.300)%/Monthly Bloomberg Soybean Meal --
Subindex/Monthly
Barclays 207 03/29/2018 (0.000)%/Monthly Bloomberg Industrial Metals --
Subindex/Monthly
Goldman 230 03/29/2018 (0.150)%/Monthly S&P GSCI Industrial Metals --
Sachs Excess Return Index/Monthly
International
JPMorgan 483 03/29/2018 (0.200)%/Monthly S&P GSCI Grains Index Excess --
Return/Monthly
JPMorgan 12,329 03/29/2018 (0.090)%/Monthly Bloomberg Commodity Index/ --
Monthly
JPMorgan 568 04/30/2018 (0.070)%/Monthly Bloomberg Silver Subindex/ --
Monthly
JPMorgan 929 06/07/2018 (0.090)%/Monthly Bloomberg Commodity Index/ --
Monthly
---
$--
===
Over the
Counter Total
Return Swap
Contracts(a)+
----------------------------------------------------------------------------------------------------------------------------------
Unrealized
Swap Appreciation/
Counterparty (Depreciation)
------------- --------------
Goldman $(5,981)
Sachs
International
Barclays --
Barclays --
Goldman --
Sachs
International
JPMorgan --
JPMorgan --
JPMorgan 579
JPMorgan --
-------
$(5,402)
=======
--------
(a)The security is owned by the AIG Commodity Strategy Cayman Fund, Ltd. which
is a wholly-owned subsidiary of the AIG Commodity Strategy Fund.
+ Illiquid security. At October 31, 2017, the aggregate value of these
securities was $(5,402), representing 0.0% of net assets.
GSCI-- Goldman Sachs Commodity Index
LMBA-- London Bullion Market Association
23
SunAmerica Specialty Series -- AIG Commodity Strategy Fund#
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2017@ --
(continued)
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2017 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
U.S. Government Agencies............ $ -- $ 199,965 $-- $ 199,965
U.S. Government Treasuries.......... -- 3,300,794 -- 3,300,794
Common Stocks....................... 418,512 -- -- 418,512
Options -- Purchased:
Exchange Traded Purchased Call
Options.......................... 26,560 -- -- 26,560
Over the Counter Purchased Put
Options.......................... -- 0 -- 0
Short-Term Investment Securities.... -- 3,542,681 -- 3,542,681
Repurchase Agreements............... -- 29,780,000 -- 29,780,000
-------- ----------- --- -----------
Total Investments at Value.......... $445,072 $36,823,440 $-- $37,268,512
======== =========== === ===========
Other Financial Instruments:+
Exchange Traded Written Call Options $ 0 $ -- $-- $ 0
Futures Contracts................... 946,278 -- -- 946,278
Over the Counter Total Return Swap
Contracts.......................... -- 579 -- 579
-------- ----------- --- -----------
Total Other Financial Instruments... $946,278 $ 579 $-- $ 946,857
======== =========== === ===========
LIABILITIES:
Other Financial Instruments:+
Exchange Traded Written Call Options $ 1,080 $ -- $-- $ 1,080
Futures Contracts................... 675,521 -- -- 675,521
Over the Counter Total Return Swap
Contracts.......................... -- 5,981 -- 5,981
-------- ----------- --- -----------
Total Other Financial Instruments... $676,601 $ 5,981 $-- $ 682,582
======== =========== === ===========
--------
# See Note 1
@ Consolidated (see Note 2)
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
+ Other financial instruments are derivative instruments not reflected in the
Consolidated Portfolio of Investments, such as futures, forward, swap and
written option contracts, which are valued at the unrealized appreciation
(depreciation) on the instrument.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
24
SunAmerica Specialty Series -- AIG ESG Dividend Fund
PORTFOLIO PROFILE -- October 31, 2017 -- (unaudited)
Industry Allocation*
Electronic Components-Semiconductors... 6.2%
Investment Management/Advisor Services. 5.9
Cosmetics & Toiletries................. 5.0
Transport-Services..................... 5.0
Consumer Products-Misc................. 4.9
Beverages-Non-alcoholic................ 4.8
Office Automation & Equipment.......... 4.7
Food-Misc./Diversified................. 4.5
Retail-Restaurants..................... 4.1
Insurance-Property/Casualty............ 3.6
Medical-Drugs.......................... 3.5
Computers.............................. 3.4
Engines-Internal Combustion............ 3.1
Retail-Consumer Electronics............ 2.8
Finance-Other Services................. 2.7
Toys................................... 2.7
Networking Products.................... 2.7
Auction Houses/Art Dealers............. 2.6
Computer Services...................... 2.6
Medical-Biomedical/Gene................ 2.4
Enterprise Software/Service............ 2.4
Publishing-Books....................... 2.4
Theaters............................... 2.3
Commercial Services-Finance............ 2.2
Retail-Mail Order...................... 2.2
Dental Supplies & Equipment............ 2.2
Electric-Integrated.................... 2.2
Telephone-Integrated................... 1.9
Retail-Computer Equipment.............. 1.8
Retail-Major Department Stores......... 1.7
Printing-Commercial.................... 1.3
-----
Total Investments...................... 99.8
Other assets less liabilities.......... 0.2
-----
Net Assets............................. 100.0%
=====
--------
* Calculated as a percentage of net assets
25
SunAmerica Specialty Series -- AIG ESG Dividend Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2017
Value
Security Description Shares (Note 3)
----------------------------------------------------------
COMMON STOCKS -- 99.8%
Auction Houses/Art Dealers -- 2.6%
KAR Auction Services, Inc............. 14,292 $ 676,440
----------
Beverages-Non-alcoholic -- 4.8%
Dr Pepper Snapple Group, Inc.......... 6,830 585,058
PepsiCo, Inc.......................... 5,870 647,050
----------
1,232,108
----------
Commercial Services-Finance -- 2.2%
Western Union Co...................... 28,939 574,729
----------
Computer Services -- 2.6%
International Business Machines Corp.. 4,288 660,609
----------
Computers -- 3.4%
HP, Inc............................... 39,826 858,250
----------
Consumer Products-Misc. -- 4.9%
Clorox Co............................. 5,239 662,891
Kimberly-Clark Corp................... 5,349 601,816
----------
1,264,707
----------
Cosmetics & Toiletries -- 5.0%
Colgate-Palmolive Co.................. 9,355 659,060
Procter & Gamble Co................... 7,297 630,023
----------
1,289,083
----------
Dental Supplies & Equipment -- 2.2%
Patterson Cos., Inc................... 15,307 566,359
----------
Electric-Integrated -- 2.2%
AES Corp.............................. 52,332 556,289
----------
Electronic Components-Semiconductors -- 6.2%
Intel Corp............................ 17,033 774,831
Texas Instruments, Inc................ 8,421 814,227
----------
1,589,058
----------
Engines-Internal Combustion -- 3.1%
Cummins, Inc.......................... 4,445 786,232
----------
Enterprise Software/Service -- 2.4%
CA, Inc............................... 18,872 611,075
----------
Finance-Other Services -- 2.7%
CME Group, Inc........................ 5,048 692,434
----------
Food-Misc./Diversified -- 4.5%
Campbell Soup Co...................... 13,738 650,769
General Mills, Inc.................... 9,847 511,256
----------
1,162,025
----------
Insurance-Property/Casualty -- 3.6%
First American Financial Corp......... 16,788 913,603
----------
Investment Management/Advisor Services -- 5.9%
Legg Mason, Inc....................... 19,914 760,317
T. Rowe Price Group, Inc.............. 8,149 757,042
----------
1,517,359
----------
Medical-Biomedical/Gene -- 2.4%
Gilead Sciences, Inc.................. 8,203 614,897
----------
Medical-Drugs -- 3.5%
AbbVie, Inc........................... 9,957 898,619
----------
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
Networking Products -- 2.7%
Cisco Systems, Inc................... 20,159 $ 688,430
-----------
Office Automation & Equipment -- 4.7%
Pitney Bowes, Inc.................... 39,772 546,467
Xerox Corp........................... 21,511 651,999
-----------
1,198,466
-----------
Printing-Commercial -- 1.3%
RR Donnelley & Sons Co............... 37,412 344,190
-----------
Publishing-Books -- 2.4%
John Wiley & Sons, Inc., Class A..... 11,028 602,680
-----------
Retail-Computer Equipment -- 1.8%
GameStop Corp., Class A.............. 24,385 455,756
-----------
Retail-Consumer Electronics -- 2.8%
Best Buy Co., Inc.................... 12,837 718,615
-----------
Retail-Mail Order -- 2.2%
Williams-Sonoma, Inc................. 11,028 569,045
-----------
Retail-Major Department Stores -- 1.7%
Nordstrom, Inc....................... 11,193 443,802
-----------
Retail-Restaurants -- 4.1%
Brinker International, Inc........... 12,070 370,791
Dunkin' Brands Group, Inc............ 11,547 682,081
-----------
1,052,872
-----------
Telephone-Integrated -- 1.9%
CenturyLink, Inc..................... 25,782 489,600
-----------
Theaters -- 2.3%
Cinemark Holdings, Inc............... 15,882 577,152
-----------
Toys -- 2.7%
Hasbro, Inc.......................... 7,461 690,814
-----------
Transport-Services -- 5.0%
C.H. Robinson Worldwide, Inc......... 8,312 652,741
United Parcel Service, Inc., Class B. 5,266 618,913
-----------
1,271,654
-----------
TOTAL INVESTMENTS
(cost $24,561,867)(1)............... 99.8% 25,566,952
Other assets less liabilities.......... 0.2 62,732
------ -----------
NET ASSETS 100.0% $25,629,684
====== ===========
--------
(1)See Note 6 for cost of investments on a tax basis.
26
SunAmerica Specialty Series -- AIG ESG Dividend Fund
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2017 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stocks.......... $25,566,952 $-- $-- $25,566,952
=========== === === ===========
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Investments
27
SunAmerica Specialty Series -- AIG Focused Alpha Large-Cap Fund#
PORTFOLIO PROFILE -- October 31, 2017 -- (unaudited)
Industry Allocation*
E-Commerce/Products................... 11.8%
Diversified Banking Institutions...... 7.2
Commercial Services-Finance........... 5.8
Medical-Drugs......................... 5.6
Banks-Super Regional.................. 5.5
Medical-HMO........................... 5.3
Finance-Credit Card................... 5.2
E-Services/Consulting................. 5.2
Internet Content-Entertainment........ 5.1
Electronic Components-Semiconductors.. 5.1
Electric-Integrated................... 5.1
Cable/Satellite TV.................... 5.1
Aerospace/Defense..................... 5.0
Oil Companies-Integrated.............. 4.9
Transport-Rail........................ 4.9
Medical-Biomedical/Gene............... 4.7
Coatings/Paint........................ 4.2
Time Deposits......................... 3.9
Applications Software................. 3.1
-----
Total Investments..................... 102.7
Liabilities in excess of other assets. (2.7)
-----
Net Assets............................ 100.0%
=====
--------
* Calculated as a percentage of net assets
# See Note 1
28
SunAmerica Specialty Series -- AIG Focused Alpha Large-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
COMMON STOCKS -- 98.8%
Aerospace/Defense -- 5.0%
Lockheed Martin Corp................... 103,095 $31,769,755
-----------
Applications Software -- 3.1%
salesforce.com, Inc.+.................. 194,669 19,922,425
-----------
Banks-Super Regional -- 5.5%
US Bancorp............................. 646,037 35,131,492
-----------
Cable/Satellite TV -- 5.1%
Comcast Corp., Class A................. 898,578 32,375,765
-----------
Coatings/Paint -- 4.2%
Sherwin-Williams Co.................... 68,132 26,922,360
-----------
Commercial Services-Finance -- 5.8%
PayPal Holdings, Inc.+................. 508,764 36,915,916
-----------
Diversified Banking Institutions -- 7.2%
Citigroup, Inc......................... 232,800 17,110,800
JPMorgan Chase & Co.................... 289,323 29,108,787
-----------
46,219,587
-----------
E-Commerce/Products -- 11.8%
Alibaba Group Holding, Ltd. ADR+....... 213,464 39,467,359
Amazon.com, Inc.+...................... 32,317 35,719,334
-----------
75,186,693
-----------
E-Services/Consulting -- 5.2%
CDW Corp............................... 472,124 33,048,680
-----------
Electric-Integrated -- 5.1%
FirstEnergy Corp....................... 992,400 32,699,580
-----------
Electronic Components-Semiconductors -- 5.1%
NVIDIA Corp............................ 158,880 32,857,973
-----------
Finance-Credit Card -- 5.2%
Visa, Inc., Class A.................... 302,511 33,270,160
-----------
Shares/
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------------------
Internet Content-Entertainment -- 5.1%
Facebook, Inc., Class A+...................... 182,565 $ 32,872,654
------------
Medical-Biomedical/Gene -- 4.7%
Gilead Sciences, Inc.......................... 401,091 30,065,781
------------
Medical-Drugs -- 5.6%
Pfizer, Inc................................... 1,027,100 36,010,126
------------
Medical-HMO -- 5.3%
UnitedHealth Group, Inc....................... 162,008 34,057,322
------------
Oil Companies-Integrated -- 4.9%
Suncor Energy, Inc............................ 916,176 31,113,337
------------
Transport-Rail -- 4.9%
Norfolk Southern Corp......................... 235,646 30,968,597
------------
Total Long-Term Investment Securities
(cost $461,393,245).......................... 631,408,203
------------
SHORT-TERM INVESTMENT SECURITIES -- 3.9%
Time Deposits -- 3.9%
Euro Time Deposit with State Street Bank and
Trust Co.
0.12% due 11/01/2017
(cost $25,277,000)........................... $25,277,000 25,277,000
------------
TOTAL INVESTMENTS
(cost $486,670,245)(1)....................... 102.7% 656,685,203
Liabilities in excess of other assets........... (2.7) (17,396,792)
----------- ------------
NET ASSETS 100.0% $639,288,411
=========== ============
--------
# See Note 1
+ Non-income producing security
(1)See Note 6 for cost of investments on a tax basis.
ADR -- American Depositary Receipt
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2017 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Common Stocks.................... $631,408,203 $ -- $-- $631,408,203
Short-Term Investment Securities. -- 25,277,000 -- 25,277,000
------------ ----------- --- ------------
Total Investments at Value....... $631,408,203 $25,277,000 $-- $656,685,203
============ =========== === ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
29
SunAmerica Specialty Series -- AIG Focused Multi-Cap Growth Fund#
PORTFOLIO PROFILE -- October 31, 2017 -- (unaudited)
Industry Allocation*
E-Commerce/Products..................... 15.9%
Commercial Services -- Finance.......... 7.8
Medical -- HMO.......................... 7.2
Time Deposits........................... 7.1
Internet Content -- Entertainment....... 7.0
Electronic Components -- Semiconductors. 7.0
Resorts/Theme Parks..................... 7.0
Finance -- Credit Card.................. 7.0
Aerospace/Defense....................... 6.7
Coatings/Paint.......................... 5.4
Applications Software................... 4.3
Auto -- Cars/Light Trucks............... 4.2
Hotels/Motels........................... 3.7
Insurance -- Property/Casualty.......... 2.5
Multimedia.............................. 2.2
Commercial Services..................... 2.1
Diagnostic Kits......................... 2.0
Professional Sports..................... 1.9
Finance -- Investment Banker/Broker..... 1.7
Enterprise Software/Service............. 0.5
Food -- Canned.......................... 0.5
-----
Total investments....................... 103.7
Liabilities in excess of other assets... (3.7)
-----
Net Assets.............................. 100.0%
=====
--------
* Calculated as a percentage of net assets
# See Note 1
30
SunAmerica Specialty Series -- AIG Focused Multi-Cap Growth Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017
Value
Security Description Shares (Note 3)
-------------------------------------------------------
COMMON STOCKS -- 96.6%
Aerospace/Defense -- 6.7%
Lockheed Martin Corp............. 128,322 $39,543,707
-----------
Applications Software -- 4.3%
salesforce.com, Inc.+............ 246,946 25,272,454
-----------
Auto-Cars/Light Trucks -- 4.2%
Tesla, Inc.+..................... 75,664 25,084,886
-----------
Coatings/Paint -- 5.4%
Sherwin-Williams Co.............. 80,164 31,676,805
-----------
Commercial Services -- 2.1%
CoStar Group, Inc.+.............. 42,461 12,557,841
-----------
Commercial Services-Finance -- 7.8%
PayPal Holdings, Inc.+........... 637,026 46,222,607
-----------
Diagnostic Kits -- 2.0%
IDEXX Laboratories, Inc.+........ 70,000 11,631,900
-----------
E-Commerce/Products -- 15.9%
Alibaba Group Holding, Ltd. ADR+. 267,181 49,399,095
Amazon.com, Inc.+................ 40,748 45,037,950
-----------
94,437,045
-----------
Electronic Components-Semiconductors -- 7.0%
NVIDIA Corp...................... 201,546 41,681,728
-----------
Enterprise Software/Service -- 0.5%
Benefitfocus, Inc.+.............. 99,066 2,714,408
-----------
Finance-Credit Card -- 7.0%
Visa, Inc., Class A.............. 378,775 41,657,674
-----------
Finance-Investment Banker/Broker -- 1.7%
Charles Schwab Corp.............. 229,000 10,268,360
-----------
Food-Canned -- 0.5%
TreeHouse Foods, Inc.+........... 40,000 2,655,200
-----------
Hotels/Motels -- 3.7%
Hyatt Hotels Corp., Class A+..... 350,000 21,931,000
-----------
Shares/
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------------------
Insurance-Property/Casualty -- 2.5%
Arch Capital Group, Ltd. +.................... 150,000 $ 14,946,000
------------
Internet Content-Entertainment -- 7.0%
Facebook, Inc., Class A+...................... 231,593 41,700,636
------------
Medical-HMO -- 7.2%
UnitedHealth Group, Inc....................... 202,634 42,597,719
------------
Multimedia -- 2.2%
FactSet Research Systems, Inc................. 68,000 12,911,160
------------
Professional Sports -- 1.9%
Manchester United PLC, Class A................ 635,023 11,398,663
------------
Resort/Theme Parks -- 7.0%
Vail Resorts, Inc............................. 182,000 41,681,640
------------
Total Long-Term Investment Securities
(cost $349,508,327).......................... 572,571,433
------------
SHORT-TERM INVESTMENT SECURITIES -- 7.1%
Time Deposits -- 7.1%
Euro Time Deposit with State Street Bank and
Trust Co.
0.12% due 11/01/2017
(cost $42,052,000)........................... $42,052,000 42,052,000
------------
TOTAL INVESTMENTS
(cost $391,560,327)(1)....................... 103.7% 614,623,433
Liabilities in excess of other assets........... (3.7) (21,721,915)
----------- ------------
NET ASSETS 100.0% $592,901,518
=========== ============
--------
+ Non-income producing security
# See Note 1
(1)See Note 6 for cost of investments on a tax basis.
ADR -- American Depositary Receipt
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2017 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Common Stocks.................... $572,571,433 $ -- $-- 572,571,433
Short-Term Investment Securities. -- 42,052,000 -- 42,052,000
------------ ----------- --- ------------
Total Investments at Value....... $572,571,433 $42,052,000 $-- $614,623,433
============ =========== === ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
31
SunAmerica Specialty Series -- AIG Global Trends Fund#
CONSOLIDATED PORTFOLIO PROFILE -- October 31, 2017@ -- (unaudited)
Industry Allocation*
Repurchase Agreements................................................ 97.4%
Other assets less liabilities (including futures and forward foreign
currency contracts)................................................. 2.6
----
Net Assets........................................................... 100%
====
--------
* Calculated as a percentage of net assets
@ Consolidated (see Note 2)
# See Note 1
32
SunAmerica Specialty Series -- AIG Global Trends Fund#
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2017@
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 97.4%
Bank of America Securities LLC Joint Repurchase
Agreement(1).................................... $2,755,000 $2,755,000
Bank of America Securities LLC Joint Repurchase
Agreement(1)(2)................................. 710,000 710,000
Barclays Capital, Inc. Joint Repurchase
Agreement(1).................................... 4,310,000 4,310,000
Barclays Capital, Inc. Joint Repurchase
Agreement(1)(2)................................. 1,110,000 1,110,000
BNP Paribas SA Joint Repurchase
Agreement(1).................................... 7,325,000 7,325,000
BNP Paribas SA Joint Repurchase
Agreement(1)(2)................................. 1,890,000 1,890,000
Deutsche Bank AG Joint Repurchase
Agreement(1).................................... 4,270,000 4,270,000
Deutsche Bank AG Joint Repurchase
Agreement(1)(2)................................. 1,100,000 1,100,000
Principal Value
Security Description Amount (Note 3)
----------------------------------------------------------------
RBS Securities, Inc. Joint Repurchase
Agreement(1).......................... $9,665,000 $ 9,665,000
RBS Securities, Inc. Joint Repurchase
Agreement(1)(2)....................... 2,500,000 2,500,000
-----------
Total Repurchase Agreements
(cost $35,635,000).................... 35,635,000
-----------
TOTAL INVESTMENTS
(cost $35,635,000)(3)................. 97.4% 35,635,000
Other assets less liabilities............ 2.6 937,995
---------- -----------
NET ASSETS 100.0% $36,572,995
========== ===========
--------
# See Note 1
@ Consolidated (see Note 2)
(1)See Note 3 for details of Joint Repurchase Agreements.
(2)The security is owned by the AIG Global Trends Cayman Fund Ltd. which is a
wholly-owned subsidiary of the AIG Global Trends Fund.
(3)See Note 6 for cost of investments on a tax basis.
Futures Contracts
----------------------------------------------------------------------------------------------
Unrealized
Number of Notional Notional Appreciation
Contracts Type Description Expiration Month Basis* Value* (Depreciation)
--------- ---- ---------------------- ---------------- ---------- ---------- --------------
30 Long Copper Future(a) December 2017 $2,231,225 $2,325,750 $ 94,525
49 Long KOSPI 200 Index December 2017 3,625,887 3,656,357 30,470
48 Long Russell 2000 E-Mini Index December 2017 3,595,190 3,606,480 11,290
29 Long S&P 500 E-Mini Index December 2017 3,688,912 3,730,415 41,503
46 Long WTI Crude Future(a) November 2017 2,356,220 2,501,480 145,260
--------
$323,048
========
--------
* Notional basis refers to the contractual amount agreed upon at inception of
the open contract; notional value represents the current value of the open
contract.
(a)The security is owned by the AIG Global Trends Cayman Fund, Ltd., which is a
wholly-owned subsidiary of the AIG Global Trends Fund.
33
SunAmerica Specialty Series -- AIG Global Trends Fund#
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2017@ --
(continued)
Forward Foreign Currency Contracts
-------------------------------------------------------------------------------------------------------------------
Delivery Unrealized Unrealized
Counterparty Contract to Deliver In Exchange For Date Appreciation Depreciation
------------------------------------------- ------------------- -------------- ---------- ------------ ------------
Bank of America, N.A. BRL 8,375,000 USD 2,610,126 11/03/2017 $49,982 $ --
USD 2,555,769 BRL 8,375,000 11/03/2017 4,375 --
------- --------
54,357 --
------- --------
Goldman Sachs International BRL 10,923,000 USD 3,359,329 11/03/2017 20,289 --
USD 3,407,417 BRL 10,923,000 11/03/2017 -- (68,377)
USD 919 BRL 3,000 12/04/2017 -- (6)
------- --------
20,289 (68,383)
------- --------
Net Unrealized Appreciation (Depreciation) $74,646 $(68,383)
======= ========
BRL -- Brazilian Real
USD -- United States Dollar
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2017 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Repurchase Agreements.............. $ -- $35,635,000 $-- $35,635,000
-------- ----------- --- -----------
Total Investments at Value......... $ -- $35,635,000 $-- $35,635,000
======== =========== === ===========
Other Financial Instruments:+
Futures Contracts.................. $323,048 $ -- $-- $ 323,048
Forward Foreign Currency Contracts. -- 74,646 -- 74,646
-------- ----------- --- -----------
Total Other Financial Instruments.. $323,048 $ 74,646 $-- $ 397,694
======== =========== === ===========
LIABILITIES:
Other Financial Instruments:+
Forward Foreign Currency Contracts. -- 68,383 -- 68,383
-------- ----------- --- -----------
Total Other Financial Instruments.. $ -- $ 68,383 $-- $ 68,383
======== =========== === ===========
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
+ Other financial instruments are derivative instruments not reflected in the
Portfolio of Investments, such as futures, forward, swap and written option
contracts, which are valued at the unrealized appreciation (depreciation) on
the instrument.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
34
SunAmerica Specialty Series -- AIG Income Explorer Fund#
PORTFOLIO PROFILE -- October 31, 2017 -- (unaudited)
Industry Allocation*
Domestic Fixed Income Investment Companies...... 23.6%
Domestic Equity Investment Companies............ 8.2
Diversified Banking Institutions................ 7.6
International Fixed Income Investment Companies. 6.9
Banks-Commercial................................ 4.8
Insurance-Life/Health........................... 3.2
Telephone-Integrated............................ 3.1
Electric-Integrated............................. 2.5
Real Estate Investment Trusts................... 2.2
Retail-Apparel/Shoe............................. 1.8
Insurance-Multi-line............................ 1.8
Banks-Super Regional............................ 1.7
Pipelines....................................... 1.5
Domestic Mixed Allocation Investment Companies.. 1.5
Food-Retail..................................... 1.4
Oil Refining & Marketing........................ 1.3
Time Deposits................................... 1.3
Building-Residential/Commercial................. 1.2
Exchange-Traded Funds........................... 1.2
Oil Companies-Integrated........................ 1.1
Retail-Regional Department Stores............... 1.0
Television...................................... 1.0
Electronic Components-Misc...................... 0.9
Insurance-Property/Casualty..................... 0.9
Telecom Services................................ 0.9
Petrochemicals.................................. 0.7
Finance-Other Services.......................... 0.7
Metal-Diversified............................... 0.7
Banks-Money Center.............................. 0.6
Real Estate Operations & Development............ 0.6
Distribution/Wholesale.......................... 0.6
Fisheries....................................... 0.6
Retail-Discount................................. 0.6
Sovereign Agency................................ 0.6
Networking Products............................. 0.6
Cellular Telecom................................ 0.6
Steel-Producers................................. 0.6
Water........................................... 0.6
Diversified Minerals............................ 0.5
Computer Services............................... 0.5
Retail-Jewelry.................................. 0.5
Chemicals-Diversified........................... 0.5
Computers-Memory Devices........................ 0.5
Transport-Services.............................. 0.5
Auto-Cars/Light Trucks.......................... 0.5
Electric-Generation............................. 0.5
Computers....................................... 0.5
Diversified Manufacturing Operations............ 0.5
Private Equity.................................. 0.5
Medical-Drugs................................... 0.4
Gas-Distribution................................ 0.4
Metal-Iron...................................... 0.4
Retail-Misc./Diversified........................ 0.4
Agricultural Operations......................... 0.3
Insurance-Mutual................................ 0.3
Repurchase Agreements........................... 0.2
Food-Dairy Products............................. 0.2
Insurance-Reinsurance........................... 0.2
Investment Management/Advisor Services.......... 0.2
Banks-Special Purpose........................... 0.2
Multimedia...................................... 0.1
Banks-Fiduciary............... 0.1%
-----
Total Investments............. 99.6
Other assets less liabilities. 0.4
-----
Net Assets.................... 100.0%
=====
--------
* Calculated as a percentage of net assets
# See Note 1
35
SunAmerica Specialty Series -- AIG Income Explorer Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017
Value
Security Description Shares (Note 3)
----------------------------------------------------------------------
COMMON STOCKS -- 26.3%
Auto-Cars/Light Trucks -- 0.5%
Subaru Corp........................................ 6,402 $218,908
--------
Building-Residential/Commercial -- 1.2%
Berkeley Group Holdings PLC........................ 5,476 272,081
Persimmon PLC...................................... 7,389 274,980
--------
547,061
--------
Cellular Telecom -- 0.6%
Turkcell Iletisim Hizmetleri AS.................... 67,405 251,777
--------
Chemicals-Diversified -- 0.5%
Petkim Petrokimya Holding AS....................... 127,977 224,003
--------
Computer Services -- 0.5%
International Business Machines Corp............... 1,510 232,631
--------
Computers -- 0.5%
Lenovo Group, Ltd.................................. 372,000 215,531
--------
Computers-Memory Devices -- 0.5%
Seagate Technology PLC............................. 5,986 221,302
--------
Distribution/Wholesale -- 0.6%
Rexel SA........................................... 14,570 260,094
--------
Electric-Generation -- 0.5%
Huaneng Power International, Inc................... 326,000 218,130
--------
Electric-Integrated -- 0.3%
Cia Energetica de Minas Gerais (Preference Shares). 81,200 191,874
--------
Electronic Components-Misc. -- 0.9%
Micro-Star International Co., Ltd.................. 92,000 224,208
Pegatron Corp...................................... 72,000 186,210
--------
410,418
--------
Finance-Other Services -- 0.5%
ASX, Ltd........................................... 5,602 231,439
--------
Fisheries -- 0.6%
Marine Harvest ASA................................. 13,119 256,180
--------
Food-Retail -- 1.4%
Casino Guichard Perrachon SA....................... 3,635 207,625
Distribuidora Internacional de Alimentacion SA..... 38,018 185,998
Wesfarmers, Ltd.................................... 7,402 236,802
--------
630,425
--------
Gas-Distribution -- 0.4%
Centrica PLC....................................... 86,281 194,581
--------
Insurance-Multi-line -- 0.5%
BB Seguridade Participacoes SA..................... 25,374 215,089
--------
Medical-Drugs -- 0.4%
GlaxoSmithKline PLC................................ 11,093 200,003
--------
Metal-Diversified -- 0.7%
MMC Norilsk Nickel PJSC ADR........................ 15,864 291,898
--------
Metal-Iron -- 0.4%
Fortescue Metals Group, Ltd........................ 54,456 193,385
--------
Networking Products -- 0.6%
Cisco Systems, Inc................................. 7,376 251,890
--------
Oil Companies-Integrated -- 1.1%
China Petroleum & Chemical Corp.................... 300,000 220,345
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Oil Companies-Integrated (continued)
Lukoil PJSC ADR............................ 4,794 $ 254,561
-----------
474,906
-----------
Oil Refining & Marketing -- 1.3%
S-Oil Corp................................. 2,516 288,576
Tupras Turkiye Petrol Rafinerileri AS...... 7,681 276,379
-----------
564,955
-----------
Petrochemicals -- 0.7%
Braskem SA, Class A (Preference Shares).... 19,200 307,313
-----------
Real Estate Operations & Development -- 0.6%
China Vanke Co., Ltd....................... 76,900 273,537
-----------
Retail-Apparel/Shoe -- 1.8%
Gap, Inc................................... 10,074 261,823
L Brands, Inc.............................. 5,205 224,023
Next PLC................................... 4,812 314,504
-----------
800,350
-----------
Retail-Discount -- 0.6%
Target Corp................................ 4,325 255,348
-----------
Retail-Jewelry -- 0.5%
Pandora A/S................................ 2,379 224,559
-----------
Retail-Misc./Diversified -- 0.4%
Woolworths Holdings, Ltd................... 48,399 192,894
-----------
Retail-Regional Department Stores -- 1.0%
Kohl's Corp................................ 5,853 244,421
Macy's, Inc................................ 10,248 192,253
-----------
436,674
-----------
Steel-Producers -- 0.6%
Eregli Demir ve Celik Fabrikalari TAS...... 107,233 251,578
-----------
Telecom Services -- 0.5%
HKT Trust & HKT, Ltd....................... 180,000 219,653
-----------
Telephone-Integrated -- 3.0%
AT&T, Inc.................................. 6,458 217,312
BT Group PLC............................... 58,646 202,749
CenturyLink, Inc........................... 10,409 197,667
Orange SA.................................. 14,043 230,402
Telefonica Brasil SA (Preference Shares)... 16,000 246,997
Verizon Communications, Inc................ 5,359 256,535
-----------
1,351,662
-----------
Television -- 1.0%
ITV PLC.................................... 100,808 220,246
ProSiebenSat.1 Media SE.................... 6,050 211,033
-----------
431,279
-----------
Transport-Services -- 0.5%
Royal Mail PLC............................. 44,231 219,943
-----------
Water -- 0.6%
Veolia Environnement SA.................... 10,534 249,582
-----------
Total Common Stocks
(cost $11,389,015)........................ 11,710,852
-----------
PREFERRED SECURITIES -- 8.7%
Agricultural Operations -- 0.3%
CHS, Inc.
Series 2
7.10%..................................... 1,250 34,588
36
SunAmerica Specialty Series -- AIG Income Explorer Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------
PREFERRED SECURITIES (continued)
Agricultural Operations (continued)
CHS, Inc.
Series 4
7.50%................................. 3,456 $ 99,014
--------
133,602
--------
Banks-Commercial -- 0.9%
BB&T Corp.
Series E
5.63%................................. 6,868 175,409
BB&T Corp.
5.85%................................. 1,174 30,101
CoBank ACB
Series F
6.25%*................................ 900 96,750
Regions Financial Corp.
Series B
6.38%................................. 1,391 39,435
TCF Financial Corp.
Series C
5.70%................................. 2,400 61,680
--------
403,375
--------
Banks-Special Purpose -- 0.2%
AgriBank FCB
6.88%................................. 750 83,063
--------
Banks-Super Regional -- 0.6%
Capital One Financial Corp.
Series H
6.00%................................. 3,125 83,219
Wells Fargo & Co.
Series Y
5.63%................................. 2,600 67,080
Wells Fargo & Co.
Series W
5.70%................................. 2,569 66,203
Wells Fargo & Co.
Series Q
5.85%................................. 1,975 53,799
--------
270,301
--------
Diversified Banking Institutions -- 1.4%
Bank of America Corp.
Series EE
6.00%................................. 1,563 41,310
Citigroup, Inc.
Series J
7.13%................................. 895 25,776
Citigroup, Inc.
Series S
6.30%................................. 3,583 96,992
GMAC Capital Trust I FRS
Series 2
7.10% (3ML+5.79%)..................... 8,000 210,080
JPMorgan Chase & Co.
Series Y
6.13%................................. 1,326 35,537
Morgan Stanley
Series K
5.85%................................. 2,825 76,275
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
Diversified Banking Institutions (continued)
Morgan Stanley
Series I
6.38%....................................... 3,093 $ 86,604
Morgan Stanley
Series F
6.88%....................................... 1,594 45,509
--------
618,083
--------
Electric-Integrated -- 0.4%
Integrys Holding, Inc.
6.00%....................................... 3,928 106,763
Southern Co.
6.25%....................................... 2,794 75,382
--------
182,145
--------
Food-Dairy Products -- 0.1%
Dairy Farmers of America, Inc.
7.88%*(4)................................... 500 53,109
--------
Insurance-Multi-line -- 0.1%
American Financial Group, Inc.
6.25%....................................... 1,053 27,641
--------
Insurance-Property/Casualty -- 0.4%
Arch Capital Group, Ltd.
Series E
5.25%....................................... 1,645 40,977
Hanover Insurance Group, Inc.
6.35%....................................... 2,322 59,141
WR Berkley Corp.
5.63%....................................... 1,024 25,580
WR Berkley Corp.
5.75%....................................... 1,875 49,312
--------
175,010
--------
Insurance-Reinsurance -- 0.2%
Axis Capital Holdings, Ltd.
Series E
5.50%....................................... 1,200 30,396
Reinsurance Group of America, Inc.
5.75%....................................... 1,100 30,580
Validus Holdings, Ltd.
Series B
5.80%....................................... 1,350 34,115
--------
95,091
--------
Investment Management/Advisor Services -- 0.2%
Ares Management LP
Series A
7.00%....................................... 3,300 88,506
--------
Pipelines -- 0.1%
NuStar Energy LP
Series B
7.63%....................................... 1,900 48,355
--------
Private Equity -- 0.5%
Carlyle Group LP
Series A
5.88%....................................... 4,075 103,057
KKR & Co. LP
Series B
6.50%....................................... 4,000 109,400
--------
212,457
--------
37
SunAmerica Specialty Series -- AIG Income Explorer Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------
PREFERRED SECURITIES (continued)
Real Estate Investment Trusts -- 2.2%
American Homes 4 Rent
Series C
5.50%(1).............................. 1,040 $ 29,505
American Homes 4 Rent
Series E
6.35%................................. 1,250 33,012
American Homes 4 Rent
Series D
6.50%................................. 3,250 87,230
Colony NorthStar, Inc.
Series J
7.13%................................. 3,000 76,410
Colony NorthStar, Inc.
Series E
8.75%................................. 2,572 69,444
DDR Corp.
Series A
6.38%................................. 1,825 46,428
DDR Corp.
Series J
6.50%................................. 1,000 25,230
Global Net Lease, Inc.
Series A
7.25%................................. 2,000 50,140
Monmouth Real Estate Investment Corp.
Series C
6.13%................................. 2,000 50,380
National Storage Affiliates Trust
Series A
6.00%................................. 4,000 100,920
Rexford Industrial Realty, Inc.
Series A
5.88%................................. 2,500 63,250
Sabra Health Care REIT, Inc.
Series A
7.13%................................. 2,500 64,000
Saul Centers, Inc.
Series C
6.88%................................. 820 20,820
Spirit Realty Capital, Inc.
Series A
6.00%................................. 1,925 47,432
Summit Hotel Properties, Inc.
Series B
7.88%................................. 1,300 33,462
Taubman Centers, Inc.
Series K
6.25%................................. 2,160 54,432
VEREIT, Inc.
Series F
6.70%................................. 5,351 136,825
--------
988,920
--------
Savings & Loans/Thrifts -- 0.0%
People's United Financial, Inc.
Series A
5.63%................................. 374 10,083
--------
Shares/
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------
Sovereign Agency -- 0.6%
Farm Credit Bank of Texas
6.75%*...................................... 1,200 $ 132,000
Farm Credit Bank of Texas
Series 1
10.00%*..................................... 100 122,000
----------
254,000
----------
Telecom Services -- 0.4%
Centaur Funding Corp.
Series B
9.08%*...................................... 100 115,507
Qwest Corp.
7.00%....................................... 2,409 61,068
----------
176,575
----------
Telephone-Integrated -- 0.1%
AT&T, Inc.
5.35%....................................... 2,500 62,600
----------
Total Preferred Securities
(cost $3,783,112)........................... 3,882,916
----------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 21.1%
Banks-Commercial -- 3.9%
Australia & New Zealand Banking Group, Ltd.
6.75% due 06/15/2026*(2).................... $200,000 229,780
Bank of Nova Scotia
4.65% due 10/12/2022(2)..................... 44,000 44,220
CoBank ACB
Series I
6.25% due 10/01/2026(2)..................... 123,000 135,150
DNB Bank ASA
6.50% due 03/26/2022(2)..................... 200,000 218,000
ING Groep NV
6.88% due 04/16/2022(2)..................... 200,000 222,867
Macquarie Bank, Ltd.
6.13% due 03/08/2027*(2).................... 200,000 210,300
Rabobank Nederland
11.00% due 06/30/2019*(2)................... 225,000 255,375
Skandinaviska Enskilda Banken AB
5.75% due 05/13/2020(2)..................... 200,000 209,000
Swedbank AB
6.00% due 03/17/2022(2)..................... 200,000 215,500
----------
1,740,192
----------
Banks-Fiduciary -- 0.1%
State Street Corp.
Series F
5.25% due 09/15/2020(2)..................... 50,000 52,688
----------
Banks-Money Center -- 0.6%
Dresdner Funding Trust I
8.15% due 06/30/2031*....................... 100,000 130,169
HSBC Capital Funding Dollar 1 LP
10.18% due 06/30/2030*(2)................... 95,000 151,821
----------
281,990
----------
Banks-Super Regional -- 1.1%
PNC Financial Services Group, Inc.
6.75% due 08/01/2021(2)..................... 125,000 140,625
U.S. Bancorp
Series J
5.30% due 04/15/2027(2)..................... 50,000 54,875
38
SunAmerica Specialty Series -- AIG Income Explorer Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------
PREFERRED SECURITIES/CAPITAL SECURITIES (continued)
Banks-Super Regional (continued)
Wells Fargo & Co.
Series U
5.88% due 06/15/2025(2)............... $135,000 $150,930
Wells Fargo & Co.
Series S
5.90% due 06/15/2024(2)............... 50,000 54,827
Wells Fargo Capital X
5.95% due 12/01/2036.................. 80,000 90,000
--------
491,257
--------
Diversified Banking Institutions -- 6.2%
Bank of America Corp.
Series AA
6.10% due 03/17/2025(2)............... 80,000 89,300
Bank of America Corp.
Series X
6.25% due 09/05/2024(2)............... 46,000 51,232
Bank of America Corp.
Series DD
6.30% due 03/10/2026(2)............... 135,000 153,803
Bank of America Corp.
Series Z
6.50% due 10/23/2024(2)............... 145,000 165,844
Citigroup, Inc.
Series R
6.13% due 11/15/2020(2)............... 125,000 134,062
Citigroup, Inc.
Series T
6.25% due 08/15/2026(2)............... 156,000 177,645
Credit Agricole SA
8.13% due 12/23/2025*(2).............. 200,000 240,735
Credit Suisse Group AG
7.13% due 07/29/2022(2)............... 200,000 219,000
Goldman Sachs Capital I
6.35% due 02/15/2034.................. 46,000 57,493
Goldman Sachs Group, Inc.
Series P
5.00% due 11/10/2022(2)............... 30,000 30,038
Goldman Sachs Group, Inc.
Series L
5.70% due 05/10/2019(2)............... 95,000 98,087
HSBC Holdings PLC
6.88% due 06/01/2021(2)............... 200,000 220,750
JPMorgan Chase & Co.
Series CC
4.63% due 11/01/2022(2)............... 35,000 34,686
JPMorgan Chase & Co.
Series Z
5.30% due 05/01/2020(2)............... 65,000 68,341
JPMorgan Chase & Co.
Series X
6.10% due 10/01/2024(2)............... 50,000 55,750
JPMorgan Chase & Co.
Series S
6.75% due 02/01/2024(2)............... 200,000 229,250
Royal Bank of Scotland Group PLC
7.65% due 09/30/2031(2)............... 35,000 44,800
Royal Bank of Scotland Group PLC
8.63% due 08/15/2021(2)............... 200,000 226,480
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------------------
Diversified Banking Institutions (continued)
Societe Generale SA
7.88% due 12/18/2023*(2)........................... $200,000 $ 226,750
UBS Group AG
7.13% due 08/10/2021(2)............................ 200,000 219,500
----------
2,743,546
----------
Diversified Manufacturing Operations -- 0.5%
General Electric Co.
Series D
5.00% due 01/21/2021(2)............................ 206,000 215,012
----------
Diversified Minerals -- 0.5%
BHP Billiton Finance USA, Ltd.
6.75% due 10/19/2075*.............................. 200,000 235,500
----------
Electric-Integrated -- 1.8%
Electricite de France SA
5.25% due 01/29/2023*(2)........................... 100,000 104,125
Emera, Inc.
Series 16-A
6.75% due 06/15/2076............................... 253,000 289,710
Enel SpA
8.75% due 09/24/2073*.............................. 200,000 247,000
NextEra Energy Capital Holdings, Inc.
4.80% due 12/01/2077............................... 70,000 70,000
Southern Co.
Series B
5.50% due 03/15/2057............................... 50,000 53,191
----------
764,026
----------
Finance-Other Services -- 0.2%
National Rural Utilities Cooperative Finance Corp.
5.25% due 04/20/2046............................... 58,000 62,616
----------
Insurance-Life/Health -- 2.7%
Dai-ichi Life Insurance Co., Ltd.
5.10% due 10/28/2024*(2)........................... 200,000 211,500
Dai-ichi Life Insurance Co., Ltd.
7.25% due 07/25/2021*(2)........................... 100,000 113,750
Nippon Life Insurance Co.
4.70% due 01/20/2046*.............................. 200,000 209,250
Prudential Financial, Inc.
5.20% due 03/15/2044............................... 165,000 175,940
Prudential Financial, Inc.
5.38% due 05/15/2045............................... 50,000 53,790
Prudential Financial, Inc.
5.63% due 06/15/2043............................... 217,000 235,770
Sumitomo Life Insurance Co.
4.00% due 09/14/2077*.............................. 200,000 196,912
----------
1,196,912
----------
Insurance-Multi-line -- 1.2%
MetLife Capital Trust IV
7.88% due 12/15/2067*.............................. 100,000 134,750
MetLife, Inc.
Series C
5.25% due 06/15/2020(2)............................ 132,000 137,940
MetLife, Inc.
9.25% due 04/08/2068*.............................. 100,000 148,625
MetLife, Inc.
10.75% due 08/01/2069.............................. 33,000 55,110
39
SunAmerica Specialty Series -- AIG Income Explorer Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Shares/
Principal Value
Security Description Amount (Note 3)
-------------------------------------------------------------------
PREFERRED SECURITIES/CAPITAL SECURITIES (continued)
Insurance-Multi-line (continued)
Voya Financial, Inc.
5.65% due 05/15/2053........................ $ 64,000 $ 67,520
----------
543,945
----------
Insurance-Mutual -- 0.3%
Liberty Mutual Group, Inc.
7.80% due 03/15/2037*....................... 95,000 120,413
----------
Insurance-Property/Casualty -- 0.5%
QBE Insurance Group, Ltd.
6.75% due 12/02/2044........................ 200,000 226,750
----------
Multimedia -- 0.1%
Viacom, Inc.
5.88% due 02/28/2057........................ 60,000 59,415
----------
Pipelines -- 1.4%
Enbridge, Inc.
5.50% due 07/15/2077........................ 70,000 72,100
Enbridge, Inc.
Series 16-A
6.00% due 01/15/2077........................ 50,000 53,507
Enterprise Products Operating LLC
5.25% due 08/16/2077........................ 42,000 43,155
Plains All American Pipeline LP
Series B
6.13% due 11/15/2022(2)..................... 70,000 71,351
TransCanada Trust
5.30% due 03/15/2077........................ 90,000 93,645
TransCanada Trust
5.63% due 05/20/2075........................ 100,000 106,530
TransCanada Trust
Series 16-A
5.88% due 08/15/2076........................ 178,000 194,465
----------
634,753
----------
Total Preferred Securities/Capital Securities
(cost $8,903,060)........................... 9,369,015
----------
REGISTERED INVESTMENT COMPANIES -- 40.2%
Domestic Equity Investment Companies -- 8.2%
Eaton Vance Tax-Advantaged Dividend Income
Fund........................................ 34,063 767,099
Eaton Vance Tax-Managed Diversified Equity
Income Fund................................. 63,181 735,427
First Trust Energy Income and Growth Fund.... 12,912 294,910
Gabelli Dividend & Income Trust.............. 32,456 731,558
Gabelli Equity Trust, Inc.................... 53,375 330,391
John Hancock Tax-Advantaged Dividend Income
Fund........................................ 25,404 650,343
Tortoise Energy Infrastructure Corp.......... 4,933 128,751
----------
3,638,479
----------
Domestic Fixed Income Investment Companies -- 23.6%
AllianzGI Convertible & Income Fund.......... 77,614 551,836
AllianzGI Convertible & Income Fund II....... 94,219 588,869
BlackRock Corporate High Yield Fund, Inc..... 25,799 288,433
BlackRock Floating Rate Income Strategies
Fund, Inc................................... 7,717 110,430
BlackRock Limited Duration Income Trust...... 8,858 142,171
BlackRock MuniHoldings Investment Quality
Fund........................................ 3,793 56,743
Value
Security Description Shares (Note 3)
------------------------------------------------------------------------
Domestic Fixed Income Investment Companies (continued)
BlackRock Taxable Municipal Bond Trust.............. 4,710 $ 108,754
Calamos Convertible and High Income Fund............ 50,563 604,733
DoubleLine Income Solutions Fund.................... 27,192 569,129
Eaton Vance Limited Duration Income Fund............ 28,312 395,236
Eaton Vance Senior Floating-Rate Trust.............. 10,390 151,174
Eaton Vance Senior Income Trust..................... 35,741 234,461
Flaherty & Crumrine Preferred Securities Income
Fund, Inc.......................................... 8,358 174,849
Flaherty & Crumrine Total Return Fund, Inc.......... 11,517 245,542
Franklin Limited Duration Income Trust.............. 14,202 169,004
Guggenheim Taxable Municipal Managed Duration
Trust.............................................. 4,487 99,656
Invesco Dynamic Credit Opportunities Fund........... 35,211 418,659
John Hancock Preferred Income Fund.................. 18,555 405,427
MFS Multimarket Income Trust........................ 25,869 159,353
New America High Income Fund, Inc................... 36,390 356,622
Nuveen AMT-Free Quality Municipal Income Fund....... 8,914 120,963
Nuveen Credit Strategies Income Fund................ 74,728 623,979
Nuveen Floating Rate Income Fund.................... 7,183 83,538
Nuveen Floating Rate Income Opportunity Fund........ 10,848 124,210
Nuveen Mortgage Opportunity Term Fund............... 1,521 39,287
Nuveen Municipal Credit Income Fund................. 6,766 101,558
Nuveen Preferred Income Opportunities Fund.......... 54,819 577,792
Nuveen Short Duration Credit Opportunities Fund..... 11,835 207,941
PIMCO Corporate & Income Opportunity Fund........... 18,930 318,024
PIMCO Dynamic Credit and Mortgage Income
Fund............................................... 33,874 769,956
PIMCO High Income Fund.............................. 19,368 153,007
PIMCO Income Strategy Fund II....................... 52,760 564,004
Pioneer Floating Rate Trust......................... 17,501 210,537
Pioneer High Income Trust........................... 23,578 235,780
Wells Fargo Income Opportunities Fund............... 22,011 187,314
Western Asset Global Corporate Defined Opportunity
Fund, Inc.......................................... 9,009 163,063
Western Asset High Yield Defined Opportunity Fund,
Inc................................................ 11,510 177,945
-----------
10,489,979
-----------
Domestic Mixed Allocation Investment Companies -- 1.5%
Clough Global Opportunities Fund.................... 10,195 116,427
Flaherty & Crumrine Dynamic Preferred and Income
Fund, Inc.......................................... 21,673 563,823
-----------
680,250
-----------
International Fixed Income Investment Companies -- 6.9%
AllianceBernstein Global High Income Fund, Inc...... 16,394 212,302
First Trust Aberdeen Global Opportunity Income
Fund............................................... 6,938 80,342
Legg Mason BW Global Income Opportunities Fund,
Inc................................................ 27,541 358,033
Nuveen Preferred & Income Term Fund................. 17,549 441,708
PIMCO Dynamic Income Fund........................... 25,325 766,841
PIMCO Income Opportunity Fund....................... 26,207 690,554
Stone Harbor Emerging Markets Income Fund........... 3,534 59,089
Wells Fargo Multi-Sector Income Fund................ 21,301 277,978
Western Asset Global High Income Fund, Inc.......... 18,300 187,209
-----------
3,074,056
-----------
Total Registered Investment Companies
(cost $17,772,672)................................. 17,882,764
-----------
40
SunAmerica Specialty Series -- AIG Income Explorer Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Shares/
Principal Value
Security Description Amount (Note 3)
---------------------------------------------------------------------
EXCHANGE-TRADED FUNDS -- 1.2%
iShares MSCI ACWI ETF
(cost $521,565).............................. 7,678 $ 539,763
-----------
U.S. CORPORATE BONDS & NOTES -- 0.1%
Food-Dairy Products -- 0.1%
Land O' Lakes, Inc.
Junior Sub. Notes
7.25% due 04/04/2027*(2) (cost $50,000)...... $ 50,000 54,000
-----------
FOREIGN CORPORATE BONDS & NOTES -- 0.5%
Insurance-Life/Health -- 0.5%
Phoenix Group Holdings Notes
5.38% due 07/06/2027
(cost $209,759).............................. 200,000 210,782
-----------
RIGHTS -- 0.0%
Electric-Integrated -- 0.0%
Cia Energetica de Minas Gerais
Expires 11/27/2017
(Strike Price BRL 6.57) (cost $0)............ 12,900 4,574
-----------
Total Long-Term Investment Securities
(cost $42,629,183)........................... 43,654,666
-----------
SHORT-TERM INVESTMENT SECURITIES -- 1.3%
Time Deposits -- 1.3%
Euro Time Deposit with State Street Bank and
Trust Co.
0.12% due 11/01/2017
(cost $564,000).............................. 564,000 564,000
-----------
Principal Value
Security Description Amount (Note 3)
------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.2%
Agreement with Fixed Income Clearing Corp.,
bearing interest at 0.12%, dated 10/31/2017,
to be repurchased 11/01/2017 in the amount of
$110,000 and collateralized by $105,000 of
United States Treasury Bonds, bearing interest
at 3.38%, due 05/15/2044 and having an
approximate value of $116,853.
(cost $110,000)................................. $110,000 $ 110,000
-----------
TOTAL INVESTMENTS
(cost $43,303,183)(3)........................... 99.6% 44,328,666
Other assets less liabilities...................... 0.4 177,439
-------- -----------
NET ASSETS 100.0% $44,506,105
======== ===========
--------
# See Note 1
* Securities exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be sold in transactions exempt from registration,
normally to qualified institutional buyers. The Fund has no right to demand
registration of these securities. At October 31, 2017, the aggregate value
of these securities was $3,740,121 representing 8.4% of net assets. Unless
otherwise indicated, these securities are not considered to be illiquid.
(1)"Step-up" security where the rate increases ("steps-up") at a predetermined
rate. The rate reflected is as of October 31, 2017.
(2)Perpetual maturity - maturity date reflects the next call date.
(3)See Note 6 for cost of investments on a tax basis.
(4)Illiquid security. At October 31, 2017, the aggregate value of these
securities was $53,109 representing 0.1% of net assets.
ADR-- American Depositary Receipt
BRL-- Brazilian Real
FRS-- Floating Rate Security
The rates shown on FRS are the current interest rates at October 31, 2017 and
unless noted otherwise, the dates shown are the original maturity dates.
Index Legend
3 ML -- 3 Month USD LIBOR
Forward Foreign Currency Contracts
-------------------------------------------------------------------------------------------------------
Delivery Unrealized Unrealized
Counterparty Contract to Deliver In Exchange For Date Appreciation Depreciation
------------------------------ ------------------- --------------- ---------- ------------ ------------
Brown Brothers Harriman & Co. EUR 220,237 USD 260,705 11/02/2017 $4,162 $ --
USD 258,752 EUR 220,237 11/02/2017 -- (2,209)
------ -------
Net Unrealized Appreciation (Depreciation) $4,162 $(2,209)
====== =======
EUR -- Euro Currency
USD -- United States Dollar
41
SunAmerica Specialty Series -- AIG Income Explorer Fund#
CONSOLIDATED PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2017 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stocks........................... $11,710,852 $ -- $-- $11,710,852
Preferred Securities:
Banks-Commercial...................... 306,625 96,750 -- 403,375
Banks-Special Purpose................. -- 83,063 -- 83,063
Electric-Integrated................... 75,382 106,763 -- 182,145
Food-Dairy Products................... -- 53,109 -- 53,109
Sovereign Agency...................... -- 254,000 -- 254,000
Telecom Services...................... 61,068 115,507 -- 176,575
Other Industries...................... 2,730,649 -- -- 2,730,649
Preferred Securities/Capital Securities. -- 9,369,015 -- 9,369,015
Registered Investment Companies......... 17,882,764 -- -- 17,882,764
Exchange-Traded Funds................... 539,763 -- -- 539,763
U.S. Corporate Bonds & Notes............ -- 54,000 -- 54,000
Foreign Corporate Bonds & Notes......... -- 210,782 -- 210,782
Rights.................................. 4,574 -- -- 4,574
Short-Term Investment Securities........ -- 564,000 -- 564,000
Repurchase Agreements................... -- 110,000 -- 110,000
----------- ----------- --- -----------
Total Investments at Value.............. $33,311,677 $11,016,989 $-- $44,328,666
=========== =========== === ===========
Other Financial Instruments:+
Forward Foreign Currency Contracts...... $ -- $ 4,162 $-- $ 4,162
=========== =========== === ===========
LIABILITIES:
Other Financial Instruments:+
Forward Foreign Currency Contracts...... $ -- $ 2,209 $-- $ 2,209
=========== =========== === ===========
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
+ Other financial instruments are derivative instruments not reflected in the
Portfolio of Investments, such as futures, forward, swap and written option
contracts, which are valued at the unrealized appreciation (depreciation) on
the instrument.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no material transfers between Levels during the
reporting period.
See Notes to Financial Statements
42
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO PROFILE -- October 31, 2017 -- (unaudited)
Industry Allocation*
Banks-Commercial.......................... 6.6%
Medical-Biomedical/Gene................... 3.8
Real Estate Investment Trusts............. 3.6
Medical-Drugs............................. 3.2
Exchange-Traded Funds..................... 2.5
Electronic Components-Misc................ 2.2
Time Deposits............................. 2.1
Medical-Outpatient/Home Medical........... 1.9
Insurance-Property/Casualty............... 1.9
Retail-Restaurants........................ 1.7
Computer Software......................... 1.7
Diversified Manufacturing Operations...... 1.6
Medical Products.......................... 1.6
Semiconductor Equipment................... 1.6
Building-Mobile Home/Manufactured Housing. 1.5
Human Resources........................... 1.5
Telecom Services.......................... 1.5
Savings & Loans/Thrifts................... 1.4
Oil Companies-Exploration & Production.... 1.4
Food-Wholesale/Distribution............... 1.3
Chemicals-Specialty....................... 1.3
Consulting Services....................... 1.3
Therapeutics.............................. 1.3
Computer Services......................... 1.2
Auto/Truck Parts & Equipment-Replacement.. 1.2
Electronic Components-Semiconductors...... 1.2
Building & Construction Products-Misc..... 1.2
Hazardous Waste Disposal.................. 1.2
Repurchase Agreements..................... 1.1
Investment Management/Advisor Services.... 1.1
Wireless Equipment........................ 1.0
Commercial Services-Finance............... 0.9
Commercial Services....................... 0.9
Finance-Investment Banker/Broker.......... 0.9
Building-Heavy Construction............... 0.9
Transport-Truck........................... 0.9
Medical Information Systems............... 0.9
Enterprise Software/Service............... 0.9
Engineering/R&D Services.................. 0.8
Machinery-General Industrial.............. 0.8
Finance-Consumer Loans.................... 0.7
Real Estate Operations & Development...... 0.7
Metal Products-Distribution............... 0.7
Power Converter/Supply Equipment.......... 0.7
Advertising Agencies...................... 0.7
Metal Processors & Fabrication............ 0.7
Internet Connectivity Services............ 0.7
Internet Security......................... 0.7
Networking Products....................... 0.7
Electric-Integrated....................... 0.7
Industrial Automated/Robotic.............. 0.7
Veterinary Diagnostics.................... 0.7
Physical Therapy/Rehabilitation Centers... 0.6
Insurance-Life/Health..................... 0.6
Auto-Heavy Duty Trucks.................... 0.6
Diagnostic Kits........................... 0.6
Electronic Security Devices............... 0.6
Computers-Periphery Equipment............. 0.6
Retail-Home Furnishings................... 0.6
Oil-Field Services........................ 0.6
Data Processing/Management................... 0.6%
Building Products-Doors & Windows............ 0.6
MRI/Medical Diagnostic Imaging............... 0.6
Insurance Brokers............................ 0.5
Gas-Distribution............................. 0.5
Medical Laser Systems........................ 0.5
Funeral Services & Related Items............. 0.5
Web Portals/ISP.............................. 0.5
Applications Software........................ 0.4
Brewery...................................... 0.4
Medical Instruments.......................... 0.4
Transport-Services........................... 0.4
Aerospace/Defense-Equipment.................. 0.4
Auto/Truck Parts & Equipment-Original........ 0.4
Chemicals-Plastics........................... 0.4
Diagnostic Equipment......................... 0.4
E-Commerce/Services.......................... 0.4
Building-Residential/Commercial.............. 0.3
Distribution/Wholesale....................... 0.3
Food-Misc./Diversified....................... 0.3
Water Treatment Systems...................... 0.3
Retail-Apparel/Shoe.......................... 0.3
Medical-Generic Drugs........................ 0.3
Computers-Integrated Systems................. 0.3
Semiconductor Components-Integrated Circuits. 0.2
Financial Guarantee Insurance................ 0.2
Schools...................................... 0.2
Drug Delivery Systems........................ 0.2
Telecom Equipment-Fiber Optics............... 0.2
Rental Auto/Equipment........................ 0.2
Transport-Marine............................. 0.2
Printing-Commercial.......................... 0.2
Footwear & Related Apparel................... 0.2
Retail-Misc./Diversified..................... 0.2
Retail-Automobile............................ 0.2
Office Furnishings-Original.................. 0.2
Electronic Measurement Instruments........... 0.2
Water........................................ 0.2
Insurance-Reinsurance........................ 0.2
Patient Monitoring Equipment................. 0.2
Insurance-Multi-line......................... 0.2
Medical-HMO.................................. 0.2
Electronic Parts Distribution................ 0.2
Building & Construction-Misc................. 0.2
Steel-Producers.............................. 0.2
Instruments-Controls......................... 0.1
Finance-Mortgage Loan/Banker................. 0.1
Television................................... 0.1
Computers-Other.............................. 0.1
Hotels/Motels................................ 0.1
Electric Products-Misc....................... 0.1
Miscellaneous Manufacturing.................. 0.1
Aerospace/Defense............................ 0.1
Racetracks................................... 0.1
Energy-Alternate Sources..................... 0.1
Oil & Gas Drilling........................... 0.1
E-Commerce/Products.......................... 0.1
Retail-Discount.............................. 0.1
Consumer Products-Misc....................... 0.1
Airlines..................................... 0.1
Rubber/Plastic Products...................... 0.1
Independent Power Producers.................. 0.1
43
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO PROFILE -- October 31, 2017 -- (unaudited) (continued)
Industry Allocation* (continued)
Wire & Cable Products.................. 0.1%
Coal................................... 0.1
Chemicals-Diversified.................. 0.1
Telephone-Integrated................... 0.1
Computer Aided Design.................. 0.1
Oil Field Machinery & Equipment........ 0.1
Transactional Software................. 0.1
Internet Content-Information/News...... 0.1
Disposable Medical Products............ 0.1
Recreational Vehicles.................. 0.1
Casino Hotels.......................... 0.1
Paper & Related Products............... 0.1
Machine Tools & Related Products....... 0.1
Security Services...................... 0.1
Broadcast Services/Program............. 0.1
Internet Application Software.......... 0.1
Steel Pipe & Tube...................... 0.1
Lasers-System/Components............... 0.1
Medical-Hospitals...................... 0.1
Publishing-Newspapers.................. 0.1
Transport-Equipment & Leasing.......... 0.1
Web Hosting/Design..................... 0.1
Retail-Building Products............... 0.1
Internet Telephone..................... 0.1
Real Estate Management/Services........ 0.1
Casino Services........................ 0.1
Educational Software................... 0.1
Resorts/Theme Parks.................... 0.1
Non-Hazardous Waste Disposal........... 0.1
Building Products-Light Fixtures....... 0.1
Building Products-Wood................. 0.1
Telecommunication Equipment............ 0.1
Tobacco................................ 0.1
Diversified Minerals................... 0.1
Oil Refining & Marketing............... 0.1
Apparel Manufacturers.................. 0.1
Gambling (Non-Hotel)................... 0.1
Containers-Paper/Plastic............... 0.1
Publishing-Periodicals................. 0.1
Research & Development................. 0.1
Machinery-Pumps........................ 0.1
Health Care Cost Containment........... 0.1
Batteries/Battery Systems.............. 0.1
Poultry................................ 0.1
Home Furnishings....................... 0.1
Finance-Other Services................. 0.1
Firearms & Ammunition.................. 0.1
Transport-Air Freight.................. 0.1
Environmental Consulting & Engineering. 0.1
Steel-Specialty........................ 0.1
Medical Labs & Testing Services........ 0.1
Environmental Monitoring & Detection... 0.1
Private Equity......................... 0.1
Computer Data Security................. 0.1
Beverages-Non-alcoholic................ 0.1
Satellite Telecom...................... 0.1
Linen Supply & Related Items........... 0.1
Multimedia............................. 0.1
Medical-Nursing Homes.................. 0.1
Metal-Aluminum........................ 0.1%
Building-Maintenance & Services....... 0.1
Pipelines............................. 0.1
Machinery-Electrical.................. 0.1
Auction Houses/Art Dealers............ 0.1
Recreational Centers.................. 0.1
Building Products-Cement.............. 0.1
Communications Software............... 0.1
Quarrying............................. 0.1
-----
Total Investments..................... 101.5
Liabilities in excess of other assets. (1.5)
-----
Net Assets............................ 100.0%
=====
--------
* Calculated as a percentage of net assets
# See Note 1
44
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
COMMON STOCKS -- 95.8%
Advanced Materials -- 0.0%
Core Molding Technologies, Inc................ 88 $ 2,042
--------
Advertising Agencies -- 0.7%
MDC Partners, Inc., Class A+.................. 35,613 409,549
--------
Advertising Sales -- 0.0%
Clear Channel Outdoor Holdings, Inc., Class A. 428 1,626
Yext, Inc.+................................... 145 1,665
--------
3,291
--------
Aerospace/Defense -- 0.1%
AeroVironment, Inc.+.......................... 247 12,637
Cubic Corp.................................... 302 16,474
Esterline Technologies Corp.+................. 314 29,783
Kratos Defense & Security Solutions, Inc.+.... 858 10,330
National Presto Industries, Inc............... 59 6,897
--------
76,121
--------
Aerospace/Defense-Equipment -- 0.4%
AAR Corp...................................... 385 14,973
Aerojet Rocketdyne Holdings, Inc.+............ 828 26,148
Astronics Corp.+.............................. 257 8,841
Curtiss-Wright Corp........................... 530 62,673
Ducommun, Inc.+............................... 126 4,154
Kaman Corp.................................... 322 18,013
KLX, Inc.+.................................... 620 34,013
Moog, Inc., Class A+.......................... 382 33,524
Triumph Group, Inc............................ 585 18,164
--------
220,503
--------
Agricultural Biotech -- 0.0%
Calyxt, Inc.+................................. 95 1,946
--------
Agricultural Chemicals -- 0.0%
Intrepid Potash, Inc.+........................ 1,134 4,559
--------
Agricultural Operations -- 0.0%
Alico, Inc.................................... 37 1,217
Andersons, Inc................................ 323 12,097
Cadiz, Inc.+.................................. 250 3,313
Limoneira Co.................................. 143 3,339
Tejon Ranch Co.+.............................. 178 3,355
--------
23,321
--------
Airlines -- 0.1%
Allegiant Travel Co........................... 149 20,324
Hawaiian Holdings, Inc.+...................... 635 21,272
SkyWest, Inc.................................. 608 28,637
--------
70,233
--------
Apparel Manufacturers -- 0.1%
Columbia Sportswear Co........................ 350 21,833
Delta Apparel, Inc.+.......................... 83 1,737
Oxford Industries, Inc........................ 197 12,726
Sequential Brands Group, Inc.+................ 476 1,238
Superior Uniform Group, Inc................... 101 2,370
--------
39,904
--------
Appliances -- 0.0%
Hamilton Beach Brands Holding Co., Class A+... 98 3,800
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Appliances (continued)
iRobot Corp.+................................. 317 $ 21,299
--------
25,099
--------
Applications Software -- 0.4%
Appfolio, Inc., Class A+...................... 96 4,406
Bazaarvoice, Inc.+............................ 998 4,815
Brightcove, Inc.+............................. 406 3,248
Callidus Software, Inc.+...................... 772 19,570
Ebix, Inc..................................... 288 19,570
Five9, Inc.+.................................. 624 15,743
HubSpot, Inc.+................................ 403 34,880
MINDBODY, Inc., Class A+...................... 504 16,254
New Relic, Inc.+.............................. 351 18,017
Park City Group, Inc.+........................ 157 1,735
PDF Solutions, Inc.+.......................... 334 4,893
Progress Software Corp........................ 570 24,128
RealPage, Inc.+............................... 703 30,440
Twilio, Inc., Class A+........................ 745 23,803
Upland Software, Inc.+........................ 87 1,911
Verint Systems, Inc.+......................... 749 31,608
--------
255,021
--------
Athletic Equipment -- 0.0%
Clarus Corp.+................................. 246 1,796
Nautilus, Inc.+............................... 362 4,706
Vista Outdoor, Inc.+.......................... 685 14,323
--------
20,825
--------
Auction Houses/Art Dealers -- 0.1%
B. Riley Financial, Inc....................... 251 4,179
Sotheby's+.................................... 456 23,630
--------
27,809
--------
Audio/Video Products -- 0.0%
Daktronics, Inc............................... 425 4,365
Universal Electronics, Inc.+.................. 169 10,140
VOXX International Corp.+..................... 240 1,608
--------
16,113
--------
Auto Repair Centers -- 0.0%
Monro, Inc.................................... 380 18,753
--------
Auto-Heavy Duty Trucks -- 0.6%
Blue Bird Corp.+.............................. 16,185 334,220
Navistar International Corp.+................. 596 25,217
REV Group, Inc................................ 272 7,018
--------
366,455
--------
Auto-Truck Trailers -- 0.0%
Wabash National Corp.......................... 713 16,043
--------
Auto/Truck Parts & Equipment-Original -- 0.4%
American Axle & Manufacturing Holdings, Inc.+. 1,001 17,808
Cooper-Standard Holding, Inc.+................ 210 23,411
Dana, Inc..................................... 1,742 53,114
Gentherm, Inc.+............................... 439 14,706
Horizon Global Corp.+......................... 305 4,950
Meritor, Inc.+................................ 1,003 26,088
Miller Industries, Inc........................ 132 3,729
Modine Manufacturing Co.+..................... 592 12,462
45
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------------
COMMON STOCKS (continued)
Auto/Truck Parts & Equipment-Original (continued)
Spartan Motors, Inc..................... 409 $ 6,605
Superior Industries International, Inc.. 295 4,587
Tenneco, Inc............................ 639 37,132
Titan International, Inc................ 596 5,805
Tower International, Inc................ 237 7,205
--------
217,602
--------
Auto/Truck Parts & Equipment-Replacement -- 1.2%
Commercial Vehicle Group, Inc.+......... 37,640 305,637
Dorman Products, Inc.+.................. 328 22,668
Douglas Dynamics, Inc................... 8,744 366,810
Motorcar Parts of America, Inc.+........ 224 6,476
Standard Motor Products, Inc............ 258 11,267
--------
712,858
--------
B2B/E-Commerce -- 0.0%
ePlus, Inc.+............................ 157 15,009
TechTarget, Inc.+....................... 235 2,928
--------
17,937
--------
Banks-Commercial -- 6.6%
1st Source Corp......................... 193 9,903
Access National Corp.................... 178 5,180
ACNB Corp............................... 71 1,981
Allegiance Bancshares, Inc.+............ 137 5,370
American National Bankshares, Inc....... 98 3,837
Ameris Bancorp.......................... 435 20,836
Ames National Corp...................... 103 3,069
Arrow Financial Corp.................... 142 5,013
Atlantic Capital Bancshares, Inc.+...... 250 4,112
BancFirst Corp.......................... 202 11,039
Bancorp, Inc.+.......................... 589 4,953
BancorpSouth, Inc....................... 1,031 32,580
Bank of Commerce Holdings............... 185 2,220
Bank of Marin Bancorp................... 72 4,878
Bank of N.T. Butterfield & Son, Ltd..... 644 24,053
Bankwell Financial Group, Inc........... 72 2,635
Banner Corp............................. 395 22,641
Bar Harbor Bankshares................... 180 5,441
BCB Bancorp, Inc........................ 113 1,588
Blue Hills Bancorp, Inc................. 285 6,184
Bridge Bancorp, Inc..................... 226 8,023
Bryn Mawr Bank Corp..................... 8,194 359,307
C&F Financial Corp...................... 39 2,262
Cadence BanCorp+........................ 104 2,533
Camden National Corp.................... 183 7,900
Capital Bank Financial Corp., Class A... 348 14,129
Capital City Bank Group, Inc............ 132 3,255
Capstar Financial Holdings, Inc.+....... 103 2,080
Carolina Financial Corp................. 172 6,338
Cass Information Systems, Inc........... 130 8,385
Cathay General Bancorp, Class B......... 902 37,704
CenterState Banks, Inc.................. 646 17,209
Central Pacific Financial Corp.......... 357 11,110
Central Valley Community Bancorp........ 119 2,404
Century Bancorp, Inc., Class A.......... 35 2,973
Chemical Financial Corp................. 849 44,734
Chemung Financial Corp.................. 38 1,795
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
Banks-Commercial (continued)
Citizens & Northern Corp................... 141 $ 3,445
City Holding Co............................ 182 12,829
Civista Bancshares, Inc.................... 119 2,686
CNB Financial Corp......................... 177 5,089
CoBiz Financial, Inc....................... 456 9,321
Codorus Valley Bancorp, Inc................ 102 3,223
Columbia Banking System, Inc............... 697 30,326
Commerce Union Bancshares, Inc............. 83 2,005
Community Bank System, Inc................. 588 32,511
Community Financial Corp................... 47 1,702
Community Trust Bancorp, Inc............... 184 8,887
ConnectOne Bancorp, Inc.................... 362 9,720
County Bancorp, Inc........................ 56 1,829
Customers Bancorp, Inc.+................... 338 9,241
CVB Financial Corp......................... 1,240 29,586
DNB Financial Corp......................... 37 1,247
Eagle Bancorp, Inc.+....................... 378 25,194
Enterprise Bancorp, Inc.................... 113 4,079
Enterprise Financial Services Corp......... 270 11,772
Equity Bancshares, Inc., Class A+.......... 128 4,364
Evans Bancorp, Inc......................... 55 2,395
Farmers & Merchants Bancorp, Inc........... 186 6,886
Farmers Capital Bank Corp.................. 88 3,661
Farmers National Banc Corp................. 302 4,379
FB Financial Corp.+........................ 8,596 351,319
FCB Financial Holdings, Inc., Class A+..... 422 19,707
Fidelity Southern Corp..................... 260 5,702
Financial Institutions, Inc................ 166 5,445
First BanCorp+............................. 2,277 11,727
First BanCorp.............................. 311 11,414
First BanCorp, Inc......................... 122 3,808
First Bancshares, Inc...................... 102 3,254
First Busey Corp........................... 453 14,097
First Business Financial Services, Inc..... 98 2,179
First Citizens BancShares, Inc., Class A... 89 36,045
First Commonwealth Financial Corp.......... 1,159 16,875
First Community Bancshares, Inc............ 199 5,944
First Connecticut Bancorp, Inc............. 169 4,462
First Financial Bancorp.................... 738 20,147
First Financial Bankshares, Inc............ 760 34,694
First Financial Corp....................... 127 6,032
First Foundation, Inc.+.................... 22,838 422,731
First Guaranty Bancshares, Inc............. 47 1,254
First Internet Bancorp..................... 74 2,790
First Interstate BancSystem, Inc., Class A. 307 12,065
First Merchants Corp....................... 491 21,113
First Mid-Illinois Bancshares, Inc......... 120 4,632
First Midwest Bancorp, Inc................. 1,223 28,239
First Northwest Bancorp+................... 120 2,030
First of Long Island Corp.................. 280 8,834
FNB Bancorp................................ 63 2,177
Franklin Financial Network, Inc.+.......... 141 4,836
Fulton Financial Corp...................... 2,054 37,383
German American Bancorp, Inc............... 254 9,139
Glacier Bancorp, Inc....................... 921 34,961
Great Southern Bancorp, Inc................ 130 6,987
Great Western Bancorp, Inc................. 709 28,778
Green Bancorp, Inc.+....................... 255 5,648
Guaranty Bancorp........................... 281 7,994
46
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------------
COMMON STOCKS (continued)
Banks-Commercial (continued)
Guaranty Bancshares, Inc................ 24 $ 688
Hancock Holding Co...................... 1,010 49,237
Hanmi Financial Corp.................... 377 11,593
HarborOne Bancorp, Inc.+................ 155 3,024
Heartland Financial USA, Inc............ 294 14,479
Heritage Commerce Corp.................. 434 6,675
Heritage Financial Corp................. 352 10,736
Hilltop Holdings, Inc................... 898 21,157
Home BancShares, Inc.................... 1,886 42,397
HomeStreet, Inc.+....................... 287 8,337
Hope Bancorp, Inc....................... 1,554 28,671
Horizon Bancorp......................... 255 7,018
Howard Bancorp, Inc.+................... 105 2,195
IBERIABANK Corp......................... 606 44,692
Independent Bank Corp................... 319 23,000
Independent Bank Corp................... 243 5,467
International Bancshares Corp........... 656 26,634
Investar Holding Corp................... 98 2,274
Kearny Financial Corp................... 1,017 15,306
Lakeland Bancorp, Inc................... 537 11,035
Lakeland Financial Corp................. 289 13,953
LCNB Corp............................... 106 2,162
LegacyTexas Financial Group, Inc........ 566 22,578
Live Oak Bancshares, Inc................ 237 5,617
Macatawa Bank Corp...................... 311 3,122
MainSource Financial Group, Inc......... 296 11,156
MB Financial, Inc....................... 970 44,562
MBT Financial Corp...................... 213 2,247
Mercantile Bank Corp.................... 193 6,967
Middlefield Banc Corp................... 31 1,412
Midland States Bancorp, Inc............. 184 5,971
MidSouth Bancorp, Inc................... 106 1,389
MidWestOne Financial Group, Inc......... 134 4,718
National Bankshares, Inc................ 81 3,588
National Commerce Corp.+................ 126 5,134
NBT Bancorp, Inc........................ 511 19,490
Nicolet Bankshares, Inc.+............... 107 6,093
Northeast Bancorp....................... 87 2,240
Northrim BanCorp, Inc................... 81 2,633
Norwood Financial Corp.................. 69 2,061
OFG Bancorp............................. 518 4,610
Ohio Valley Banc Corp................... 49 1,744
Old Line Bancshares, Inc................ 102 3,075
Old National Bancorp.................... 1,609 29,284
Old Point Financial Corp................ 43 1,392
Old Second Bancorp, Inc................. 346 4,740
Opus Bank+.............................. 248 6,423
Orrstown Financial Services, Inc........ 89 2,270
Pacific Continental Corp................ 260 7,280
Pacific Mercantile Bancorp+............. 185 1,730
PacWest Bancorp......................... 0 5
Paragon Commercial Corp.+............... 50 2,879
Park National Corp...................... 160 17,566
Park Sterling Corp...................... 618 7,768
PCSB Financial Corp.+................... 217 4,062
Peapack Gladstone Financial Corp........ 201 6,973
Penns Woods Bancorp, Inc................ 55 2,663
People's Utah Bancorp................... 162 5,038
Peoples Bancorp of North Carolina, Inc.. 51 1,739
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Banks-Commercial (continued)
Peoples Bancorp, Inc........................ 197 $ 6,525
Peoples Financial Services Corp............. 82 3,718
Preferred Bank.............................. 6,171 380,936
Premier Financial Bancorp, Inc.............. 113 2,339
Provident Bancorp, Inc.+.................... 53 1,256
QCR Holdings, Inc........................... 145 6,924
Renasant Corp............................... 517 21,404
Republic Bancorp, Inc., Class A............. 115 4,522
Republic First Bancorp, Inc.+............... 583 5,393
S&T Bancorp, Inc............................ 412 16,847
Sandy Spring Bancorp, Inc................... 282 11,396
Seacoast Banking Corp. of Florida+.......... 479 11,874
ServisFirst Bancshares, Inc................. 554 22,720
Shore Bancshares, Inc....................... 150 2,469
Sierra Bancorp.............................. 147 3,890
Simmons First National Corp., Class A....... 445 25,662
SmartFinancial, Inc.+....................... 86 2,020
South State Corp............................ 346 31,157
Southern First Bancshares, Inc.+............ 78 3,007
Southern National Bancorp of Virginia, Inc.. 221 3,609
Southside Bancshares, Inc................... 332 11,756
State Bank Financial Corp................... 449 12,981
Stock Yards Bancorp, Inc.................... 261 9,853
Summit Financial Group, Inc................. 130 3,536
Sun Bancorp, Inc............................ 129 3,270
Sunshine Bancorp, Inc.+..................... 88 2,055
Texas Capital Bancshares, Inc.+............. 597 51,372
Tompkins Financial Corp..................... 175 15,246
Towne Bank.................................. 677 22,679
TriCo Bancshares............................ 245 10,148
TriState Capital Holdings, Inc.+............ 267 6,048
Triumph Bancorp, Inc.+...................... 184 5,704
TrustCo Bank Corp........................... 1,107 10,157
Trustmark Corp.............................. 808 26,616
Two River Bancorp........................... 86 1,668
UMB Financial Corp.......................... 542 39,853
Umpqua Holdings Corp........................ 2,653 54,280
Union Bankshares Corp....................... 517 17,842
United Bankshares, Inc...................... 1,198 43,068
United Community Banks, Inc................. 847 23,225
United Security Bancshares.................. 156 1,466
Unity Bancorp, Inc.......................... 92 1,817
Univest Corp. of Pennsylvania............... 311 9,112
Valley National Bancorp..................... 3,094 35,581
Veritex Holdings, Inc.+..................... 171 4,508
Washington Trust Bancorp, Inc............... 180 9,990
WashingtonFirst Bankshares, Inc............. 117 4,088
WesBanco, Inc............................... 504 20,362
West Bancorporation, Inc.................... 190 4,645
Westamerica Bancorporation.................. 305 17,760
Western New England Bancorp, Inc............ 331 3,492
Wintrust Financial Corp..................... 664 53,977
Xenith Bankshares, Inc.+.................... 61 1,951
----------
3,851,196
----------
Banks-Fiduciary -- 0.0%
Boston Private Financial Holdings, Inc...... 999 15,884
Parke Bancorp, Inc.......................... 69 1,487
Union Bankshares, Inc....................... 47 2,312
----------
19,683
----------
47
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCKS (continued)
Banks-Mortgage -- 0.0%
Walker & Dunlop, Inc.+....................... 332 $ 18,223
--------
Banks-Super Regional -- 0.0%
Independent Bank Group, Inc.................. 211 13,272
National Bank Holdings Corp., Class A........ 298 9,780
--------
23,052
--------
Batteries/Battery Systems -- 0.1%
EnerSys...................................... 523 36,281
--------
Beverages-Non-alcoholic -- 0.1%
Coca-Cola Bottling Co. Consolidated.......... 56 12,631
National Beverage Corp....................... 141 13,804
Primo Water Corp.+........................... 303 3,336
--------
29,771
--------
Beverages-Wine/Spirits -- 0.0%
MGP Ingredients, Inc......................... 155 10,534
--------
Bicycle Manufacturing -- 0.0%
Fox Factory Holding Corp.+................... 420 17,871
--------
Brewery -- 0.4%
Boston Beer Co., Inc., Class A+.............. 106 18,874
Craft Brew Alliance, Inc.+................... 152 2,774
New Age Beverages Corp.+..................... 98,530 230,560
--------
252,208
--------
Broadcast Services/Program -- 0.1%
Hemisphere Media Group, Inc.+................ 187 2,281
MSG Networks, Inc., Class A+................. 717 12,440
TiVo Corp.................................... 1,406 25,519
World Wrestling Entertainment, Inc., Class A. 458 12,151
--------
52,391
--------
Building & Construction Products-Misc. -- 1.2%
Armstrong Flooring, Inc.+.................... 279 4,129
Builders FirstSource, Inc.+.................. 1,159 20,885
Caesarstone, Ltd.+........................... 272 7,698
Forterra, Inc.+.............................. 224 1,111
Gibraltar Industries, Inc.+.................. 380 12,635
Louisiana-Pacific Corp.+..................... 1,742 47,348
NCI Building Systems, Inc.+.................. 479 7,640
Patrick Industries, Inc.+.................... 4,953 460,629
Ply Gem Holdings, Inc.+...................... 266 4,495
Quanex Building Products Corp................ 411 9,021
Simpson Manufacturing Co., Inc............... 494 27,536
Summit Materials, Inc., Class A+............. 1,282 40,255
Trex Co., Inc.+.............................. 354 38,745
--------
682,127
--------
Building & Construction-Misc. -- 0.2%
Aegion Corp.+................................ 398 9,269
American Woodmark Corp.+..................... 169 16,325
Comfort Systems USA, Inc..................... 441 19,536
Hill International, Inc.+.................... 409 2,168
IES Holdings, Inc.+.......................... 104 1,945
MYR Group, Inc.+............................. 191 6,091
TopBuild Corp.+.............................. 442 29,168
--------
84,502
--------
Value
Security Description Shares (Note 3)
--------------------------------------------------------
Building Products-Air & Heating -- 0.0%
AAON, Inc............................. 496 $ 17,360
--------
Building Products-Cement -- 0.1%
Continental Building Products, Inc.+.. 473 12,629
US Concrete, Inc.+.................... 182 14,233
--------
26,862
--------
Building Products-Doors & Windows -- 0.6%
Apogee Enterprises, Inc............... 339 16,180
Griffon Corp.......................... 351 7,915
JELD-WEN Holding, Inc.+............... 648 23,898
Masonite International Corp.+......... 356 23,888
PGT Innovations , Inc.+............... 18,355 258,806
--------
330,687
--------
Building Products-Light Fixtures -- 0.1%
Cree, Inc.+........................... 1,170 41,769
LSI Industries, Inc................... 290 2,016
--------
43,785
--------
Building Products-Wood -- 0.1%
Boise Cascade Co.+.................... 463 16,413
Universal Forest Products, Inc........ 240 27,096
--------
43,509
--------
Building-Heavy Construction -- 0.9%
Chicago Bridge & Iron Co. NV.......... 1,207 16,826
Dycom Industries, Inc.+............... 365 32,058
Granite Construction, Inc............. 475 30,253
Layne Christensen Co.+................ 216 2,853
MasTec, Inc.+......................... 797 34,709
Orion Group Holdings, Inc.+........... 324 2,333
Primoris Services Corp................ 472 13,343
Sterling Construction Co., Inc.+...... 21,259 379,473
Tutor Perini Corp.+................... 448 12,634
--------
524,482
--------
Building-Maintenance & Services -- 0.1%
ABM Industries, Inc................... 670 28,120
--------
Building-Mobile Home/Manufactured Housing -- 1.5%
Cavco Industries, Inc.+............... 2,202 345,494
Winnebago Industries, Inc............. 10,862 533,867
--------
879,361
--------
Building-Residential/Commercial -- 0.3%
AV Homes, Inc.+....................... 146 2,431
Beazer Homes USA, Inc.+............... 375 7,868
Century Communities, Inc.+............ 228 6,509
Green Brick Partners, Inc.+........... 276 2,995
Hovnanian Enterprises, Inc., Class A+. 1,480 3,582
Installed Building Products, Inc.+.... 258 17,983
KB Home............................... 1,005 27,567
LGI Homes, Inc.+...................... 207 12,488
M/I Homes, Inc.+...................... 286 9,552
MDC Holdings, Inc..................... 498 18,446
Meritage Homes Corp.+................. 461 22,451
New Home Co., Inc.+................... 148 1,721
PICO Holdings, Inc.+.................. 266 5,027
Taylor Morrison Home Corp., Class A+.. 840 20,286
TRI Pointe Group, Inc.+............... 1,778 31,453
48
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------
COMMON STOCKS (continued)
Building-Residential/Commercial (continued)
William Lyon Homes, Class A+...... 286 $ 7,936
--------
198,295
--------
Cable/Satellite TV -- 0.0%
Global Eagle Entertainment, Inc.+. 612 1,487
WideOpenWest, Inc.+............... 239 3,057
--------
4,544
--------
Capacitors -- 0.0%
KEMET Corp.+...................... 547 14,052
--------
Casino Hotels -- 0.1%
Boyd Gaming Corp.................. 995 29,084
Caesars Entertainment Corp.+...... 1,634 21,161
Century Casinos, Inc.+............ 253 2,087
Monarch Casino & Resort, Inc.+.... 130 5,799
--------
58,131
--------
Casino Services -- 0.1%
Eldorado Resorts, Inc.+........... 552 14,187
Scientific Games Corp., Class A+.. 637 30,321
--------
44,508
--------
Cellular Telecom -- 0.0%
ATN International, Inc............ 127 6,895
--------
Chemicals-Diversified -- 0.1%
Aceto Corp........................ 352 3,544
AdvanSix, Inc.+................... 359 16,611
Codexis, Inc.+.................... 488 3,001
Innophos Holdings, Inc............ 232 11,352
Innospec, Inc..................... 287 17,751
Koppers Holdings, Inc.+........... 247 11,992
--------
64,251
--------
Chemicals-Fibers -- 0.0%
Rayonier Advanced Materials, Inc.. 513 7,372
--------
Chemicals-Other -- 0.0%
American Vanguard Corp............ 344 7,740
--------
Chemicals-Plastics -- 0.4%
A. Schulman, Inc.................. 342 13,441
Landec Corp.+..................... 11,312 149,884
PolyOne Corp...................... 975 44,918
--------
208,243
--------
Chemicals-Specialty -- 1.3%
AgroFresh Solutions, Inc.+........ 264 1,558
Balchem Corp...................... 379 31,946
Calgon Carbon Corp................ 605 13,128
CSW Industrials, Inc.+............ 173 8,486
Ferro Corp.+...................... 1,003 23,891
GCP Applied Technologies, Inc.+... 859 25,126
H.B. Fuller Co.................... 604 34,349
Hawkins, Inc...................... 115 4,381
Ingevity Corp.+................... 509 36,256
KMG Chemicals, Inc................ 7,434 409,836
Kraton Corp.+..................... 359 17,602
Minerals Technologies, Inc........ 421 30,270
Oil-Dri Corp. of America.......... 60 2,521
Value
Security Description Shares (Note 3)
-------------------------------------------------------
Chemicals-Specialty (continued)
OMNOVA Solutions, Inc.+.............. 517 $ 5,713
Quaker Chemical Corp................. 156 24,230
Sensient Technologies Corp........... 530 40,306
Stepan Co............................ 239 19,087
Tronox, Ltd., Class A................ 1,010 26,735
Valhi, Inc........................... 303 1,318
--------
756,739
--------
Circuit Boards -- 0.0%
Park Electrochemical Corp............ 231 4,361
TTM Technologies, Inc.+.............. 1,107 17,469
--------
21,830
--------
Coal -- 0.1%
Arch Coal, Inc., Class A............. 262 20,022
Cloud Peak Energy, Inc.+............. 885 3,761
Hallador Energy Co................... 192 995
NACCO Industries, Inc., Class A...... 49 2,038
Peabody Energy Corp.+................ 739 22,828
Ramaco Resources, Inc.+.............. 73 428
SunCoke Energy, Inc.+................ 771 8,550
Warrior Met Coal, Inc................ 202 5,256
Westmoreland Coal Co.+............... 222 385
--------
64,263
--------
Coatings/Paint -- 0.0%
Kronos Worldwide, Inc................ 272 7,156
--------
Coffee -- 0.0%
Farmer Bros. Co.+.................... 104 3,531
--------
Commercial Services -- 0.9%
Acacia Research Corp.+............... 593 2,669
Care.com, Inc.+...................... 161 2,475
Collectors Universe, Inc............. 90 2,228
Emerald Expositions Events, Inc...... 188 4,379
Healthcare Services Group, Inc....... 853 45,115
HMS Holdings Corp.+.................. 1,004 19,317
Medifast, Inc........................ 6,596 411,590
National Research Corp., Class A..... 113 4,243
Nutrisystem, Inc..................... 356 17,782
Pendrell Corp.+...................... 143 927
RPX Corp.+........................... 541 7,044
ServiceSource International, Inc.+... 907 3,156
SP Plus Corp.+....................... 208 8,060
Team, Inc.+.......................... 350 4,305
Weight Watchers International, Inc.+. 335 15,048
--------
548,338
--------
Commercial Services-Finance -- 0.9%
Cardtronics PLC, Class A+............ 546 12,504
CBIZ, Inc.+.......................... 612 10,373
CPI Card Group, Inc.................. 245 265
Everi Holdings, Inc.+................ 763 6,325
EVERTEC, Inc......................... 724 10,860
Green Dot Corp., Class A+............ 547 30,971
LendingTree, Inc.+................... 76 20,372
Liberty Tax, Inc..................... 82 1,070
MoneyGram International, Inc.+....... 349 5,427
PRGX Global, Inc.+................... 56,917 429,723
49
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCKS (continued)
Commercial Services-Finance (continued)
Travelport Worldwide, Ltd................ 1,487 $ 23,331
--------
551,221
--------
Communications Software -- 0.1%
BroadSoft, Inc.+......................... 368 20,185
Digi International, Inc.+................ 317 3,297
pdvWireless, Inc.+....................... 113 3,226
--------
26,708
--------
Computer Aided Design -- 0.1%
Aspen Technology, Inc.+.................. 899 58,003
Exa Corp.+............................... 166 4,024
--------
62,027
--------
Computer Data Security -- 0.1%
Qualys, Inc.+............................ 376 19,891
Varonis Systems, Inc.+................... 229 9,984
--------
29,875
--------
Computer Graphics -- 0.0%
Monotype Imaging Holdings, Inc........... 498 11,479
--------
Computer Services -- 1.2%
Barracuda Networks, Inc.+................ 301 7,016
CACI International, Inc., Class A+....... 292 41,975
Carbonite, Inc.+......................... 16,895 383,516
Cogint, Inc.+............................ 242 1,101
Convergys Corp........................... 1,126 28,972
DMC Global, Inc.......................... 169 3,676
Engility Holdings, Inc.+................. 216 7,273
EPAM Systems, Inc.+...................... 589 53,687
ExlService Holdings, Inc.+............... 392 24,469
Insight Enterprises, Inc.+............... 427 19,236
KeyW Holding Corp.+...................... 577 4,356
MAXIMUS, Inc............................. 769 51,085
Presidio, Inc.+.......................... 228 3,374
Science Applications International Corp.. 525 38,504
SecureWorks Corp., Class A+.............. 97 972
StarTek, Inc.+........................... 122 1,457
Sykes Enterprises, Inc.+................. 470 13,602
Syntel, Inc.+............................ 396 9,251
TeleTech Holdings, Inc................... 166 6,914
Unisys Corp.+............................ 603 5,276
Virtusa Corp.+........................... 331 12,631
--------
718,343
--------
Computer Software -- 1.7%
Avid Technology, Inc.+................... 400 1,776
Blackbaud, Inc........................... 571 57,842
Box, Inc., Class A+...................... 941 20,655
Cloudera, Inc.+.......................... 167 2,527
CommerceHub, Inc., Series A+............. 164 3,662
CommerceHub, Inc., Series C+............. 348 7,423
Cornerstone OnDemand, Inc.+.............. 624 23,937
Envestnet, Inc.+......................... 516 27,554
j2 Global, Inc........................... 557 41,296
Planet Payment, Inc.+.................... 77,124 344,744
Simulations Plus, Inc.................... 26,674 434,786
Tintri, Inc.+............................ 123 476
Value
Security Description Shares (Note 3)
-----------------------------------------------------
Computer Software (continued)
Veritone, Inc.+.................... 30 $ 1,065
Workiva, Inc.+..................... 297 6,638
--------
974,381
--------
Computers -- 0.0%
Nutanix, Inc., Class A+............ 674 19,209
--------
Computers-Integrated Systems -- 0.3%
Agilysys, Inc.+.................... 184 2,258
Cray, Inc.+........................ 480 9,912
Diebold Nixdorf, Inc............... 905 17,467
Maxwell Technologies, Inc.+........ 432 2,082
Mercury Systems, Inc.+............. 561 28,314
MTS Systems Corp................... 201 10,462
NetScout Systems, Inc.+............ 1,026 29,138
Radisys Corp.+..................... 441 582
Silver Spring Networks, Inc.+...... 501 8,076
Super Micro Computer, Inc.+........ 467 9,293
USA Technologies, Inc.+............ 466 2,959
VeriFone Systems, Inc.+............ 1,334 25,453
--------
145,996
--------
Computers-Memory Devices -- 0.0%
Pure Storage, Inc., Class A+....... 1,115 18,319
Quantum Corp.+..................... 335 1,776
--------
20,095
--------
Computers-Other -- 0.1%
3D Systems Corp.+.................. 1,309 16,205
ExOne Co.+......................... 133 1,414
Lumentum Holdings, Inc.+........... 730 46,100
Stratasys, Ltd.+................... 599 13,489
--------
77,208
--------
Computers-Periphery Equipment -- 0.6%
Electronics For Imaging, Inc.+..... 555 17,127
Immersion Corp.+................... 349 2,820
Mitek Systems, Inc.+............... 37,211 331,178
--------
351,125
--------
Computers-Voice Recognition -- 0.0%
Vocera Communications, Inc.+....... 335 9,454
--------
Consulting Services -- 1.3%
Advisory Board Co.+................ 484 26,100
CRA International, Inc............. 7,874 332,755
Forrester Research, Inc............ 120 5,244
Franklin Covey Co.+................ 116 2,250
FTI Consulting, Inc.+.............. 493 21,076
Hackett Group, Inc................. 286 4,416
Huron Consulting Group, Inc.+...... 263 9,626
ICF International, Inc.+........... 215 11,545
Information Services Group, Inc.+.. 388 1,583
Navigant Consulting, Inc.+......... 565 9,780
Vectrus, Inc.+..................... 10,241 312,453
--------
736,828
--------
Consumer Products-Misc. -- 0.1%
Central Garden & Pet Co.+.......... 126 4,811
Central Garden & Pet Co., Class A+. 423 15,613
CSS Industries, Inc................ 107 3,208
50
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCKS (continued)
Consumer Products-Misc. (continued)
Helen of Troy, Ltd.+...................... 326 $ 30,285
WD-40 Co.................................. 165 18,290
--------
72,207
--------
Containers-Metal/Glass -- 0.0%
Greif, Inc., Class A...................... 306 16,992
Greif, Inc., Class B...................... 67 4,211
--------
21,203
--------
Containers-Paper/Plastic -- 0.1%
KapStone Paper and Packaging Corp......... 1,041 23,381
Multi-Color Corp.......................... 164 13,563
UFP Technologies, Inc.+................... 77 2,375
--------
39,319
--------
Cosmetics & Toiletries -- 0.0%
e.l.f Beauty, Inc.+....................... 248 5,255
Inter Parfums, Inc........................ 207 9,584
Revlon, Inc., Class A+.................... 141 3,173
--------
18,012
--------
Cruise Lines -- 0.0%
Lindblad Expeditions Holdings, Inc.+...... 240 2,573
--------
Data Processing/Management -- 0.6%
Acxiom Corp.+............................. 936 23,550
Amber Road, Inc.+......................... 26,223 195,623
CommVault Systems, Inc.+.................. 465 24,203
CSG Systems International, Inc............ 399 16,894
Fair Isaac Corp........................... 360 52,258
Pegasystems, Inc.......................... 439 25,594
--------
338,122
--------
Decision Support Software -- 0.0%
Castlight Health, Inc., Class B+.......... 766 2,949
QAD, Inc., Class A........................ 118 4,366
--------
7,315
--------
Diagnostic Equipment -- 0.4%
Accelerate Diagnostics, Inc.+............. 312 6,193
BioTelemetry, Inc.+....................... 5,753 167,125
GenMark Diagnostics, Inc.+................ 526 3,919
Genomic Health, Inc.+..................... 236 7,738
Oxford Immunotec Global PLC+.............. 271 3,583
Quotient, Ltd.+........................... 320 1,635
Repligen Corp.+........................... 446 16,591
--------
206,784
--------
Diagnostic Kits -- 0.6%
Meridian Bioscience, Inc.................. 499 7,460
OraSure Technologies, Inc.+............... 17,215 339,996
Quidel Corp.+............................. 332 13,596
--------
361,052
--------
Dialysis Centers -- 0.0%
American Renal Associates Holdings, Inc.+. 116 1,407
--------
Disposable Medical Products -- 0.1%
ICU Medical, Inc.+........................ 180 34,398
Merit Medical Systems, Inc.+.............. 583 22,183
Value
Security Description Shares (Note 3)
------------------------------------------------------
Disposable Medical Products (continued)
Utah Medical Products, Inc.......... 41 $ 3,092
--------
59,673
--------
Distribution/Wholesale -- 0.3%
Anixter International, Inc.+........ 348 23,908
Beacon Roofing Supply, Inc.+........ 800 44,328
Core-Mark Holding Co., Inc.......... 546 18,597
EnviroStar, Inc..................... 42 1,121
Essendant, Inc...................... 448 4,337
Fossil Group, Inc.+................. 511 4,027
G-III Apparel Group, Ltd.+.......... 519 13,151
H&E Equipment Services, Inc......... 377 12,418
Huttig Building Products, Inc.+..... 285 1,915
Nexeo Solutions, Inc.+.............. 315 2,328
ScanSource, Inc.+................... 297 12,756
SiteOne Landscape Supply, Inc.+..... 407 25,848
Systemax, Inc....................... 138 3,940
Titan Machinery, Inc.+.............. 222 3,306
Triton International, Ltd........... 520 20,748
Veritiv Corp.+...................... 138 4,437
--------
197,165
--------
Diversified Financial Services -- 0.0%
Ladder Capital Corp................. 845 11,357
--------
Diversified Manufacturing Operations -- 1.6%
Actuant Corp., Class A.............. 713 18,182
AZZ, Inc............................ 311 14,866
Barnes Group, Inc................... 602 39,184
Chase Corp.......................... 86 10,213
EnPro Industries, Inc............... 253 21,186
Fabrinet+........................... 435 16,173
Federal Signal Corp................. 707 15,094
GP Strategies Corp.+................ 10,723 311,503
Harsco Corp.+....................... 963 20,464
LSB Industries, Inc.+............... 260 1,963
Lydall, Inc.+....................... 7,440 430,032
NL Industries, Inc.+................ 100 1,300
Raven Industries, Inc............... 433 14,570
Standex International Corp.......... 151 15,636
Tredegar Corp....................... 309 5,979
--------
936,345
--------
Diversified Minerals -- 0.1%
Fairmount Santrol Holdings, Inc.+... 1,858 8,008
Smart Sand, Inc.+................... 262 1,884
United States Lime & Minerals, Inc.. 24 2,180
US Silica Holdings, Inc............. 978 29,839
--------
41,911
--------
Diversified Operations -- 0.0%
HRG Group, Inc.+.................... 1,424 23,097
--------
Diversified Operations/Commercial Services -- 0.0%
Viad Corp........................... 242 14,048
--------
Drug Delivery Systems -- 0.2%
Antares Pharma, Inc.+............... 1,720 3,130
Catalent, Inc.+..................... 1,507 64,183
Depomed, Inc.+...................... 683 3,306
Heron Therapeutics, Inc.+........... 544 8,350
51
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------
COMMON STOCKS (continued)
Drug Delivery Systems (continued)
Nektar Therapeutics+.............. 1,775 $ 42,760
Revance Therapeutics, Inc.+....... 269 6,994
--------
128,723
--------
E-Commerce/Products -- 0.1%
1-800-flowers.com, Inc., Class A+. 313 2,942
Chegg, Inc.+...................... 1,130 17,526
Etsy, Inc.+....................... 1,386 23,146
FTD Cos., Inc.+................... 202 2,182
Lands' End, Inc.+................. 159 1,733
Overstock.com, Inc.+.............. 201 9,226
Shutterfly, Inc.+................. 408 17,422
--------
74,177
--------
E-Commerce/Services -- 0.4%
Bankrate, Inc.+................... 566 7,867
Cars.com, Inc.+................... 862 20,533
Carvana Co.+...................... 181 2,567
ChannelAdvisor Corp.+............. 303 3,409
Groupon, Inc.+.................... 4,068 19,404
GrubHub, Inc.+.................... 1,029 62,790
Leaf Group, Ltd.+................. 142 1,001
Ominto, Inc.+..................... 170 542
Quotient Technology, Inc.+........ 882 13,803
Stamps.com, Inc.+................. 190 42,636
Trade Desk, Inc., Class A+........ 281 18,524
TrueCar, Inc.+.................... 821 13,284
--------
206,360
--------
E-Marketing/Info -- 0.0%
Liquidity Services, Inc.+......... 307 1,750
New Media Investment Group, Inc... 612 9,774
QuinStreet, Inc.+................. 438 3,898
Rubicon Project, Inc.+............ 531 1,890
--------
17,312
--------
E-Services/Consulting -- 0.0%
Perficient, Inc.+................. 411 7,994
--------
Educational Software -- 0.1%
2U, Inc.+......................... 524 33,342
Instructure, Inc.+................ 255 8,874
Rosetta Stone, Inc.+.............. 203 2,065
--------
44,281
--------
Electric Products-Misc. -- 0.1%
Graham Corp....................... 114 2,197
Littelfuse, Inc................... 270 56,430
Novanta, Inc.+.................... 384 18,163
--------
76,790
--------
Electric-Distribution -- 0.0%
Genie Energy, Ltd., Class B....... 162 927
Spark Energy, Inc., Class A....... 138 1,932
Unitil Corp....................... 166 8,632
--------
11,491
--------
Electric-Generation -- 0.0%
Atlantic Power Corp.+............. 1,372 3,361
--------
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
Electric-Integrated -- 0.7%
ALLETE, Inc................................ 613 $ 48,029
Ameresco, Inc., Class A+................... 224 1,725
Avista Corp................................ 771 40,277
Black Hills Corp........................... 641 41,832
El Paso Electric Co........................ 484 27,830
IDACORP, Inc............................... 605 55,678
MGE Energy, Inc............................ 419 27,675
NorthWestern Corp.......................... 583 34,560
Otter Tail Corp............................ 471 21,643
PNM Resources, Inc......................... 956 41,490
Portland General Electric Co............... 1,072 51,177
----------
391,916
----------
Electronic Components-Misc. -- 2.2%
AVX Corp................................... 552 10,400
Bel Fuse, Inc., Class B.................... 11,851 383,380
Benchmark Electronics, Inc.+............... 599 18,539
CTS Corp................................... 383 10,418
Kimball Electronics, Inc.+................. 318 6,996
Knowles Corp.+............................. 1,056 17,487
Methode Electronics, Inc................... 429 20,120
Microvision, Inc.+......................... 817 1,806
NVE Corp................................... 4,066 345,935
OSI Systems, Inc.+......................... 208 18,383
Plexus Corp.+.............................. 402 24,695
Rogers Corp.+.............................. 216 32,849
Sanmina Corp.+............................. 884 28,929
Sparton Corp.+............................. 115 2,678
Stoneridge, Inc.+.......................... 322 7,322
Vishay Intertechnology, Inc................ 1,613 35,889
Vishay Precision Group, Inc.+.............. 122 2,995
ZAGG, Inc.+................................ 20,846 326,240
----------
1,295,061
----------
Electronic Components-Semiconductors -- 1.2%
Alpha & Omega Semiconductor, Ltd........... 224 4,128
Ambarella, Inc.+........................... 389 21,955
Amkor Technology, Inc.+.................... 1,220 14,115
AXT, Inc.+................................. 446 4,148
CEVA, Inc.+................................ 7,770 375,291
Diodes, Inc.+.............................. 457 15,693
DSP Group, Inc.+........................... 262 3,511
EMCORE Corp.+.............................. 323 2,665
GSI Technology, Inc.+...................... 171 1,183
Impinj, Inc.+.............................. 216 7,374
Inphi Corp.+............................... 503 20,613
IXYS Corp.+................................ 300 7,410
Kopin Corp.+............................... 737 2,587
Lattice Semiconductor Corp.+............... 1,470 8,599
MACOM Technology Solutions Holdings, Inc.+. 486 19,868
Monolithic Power Systems, Inc.............. 478 58,158
Pixelworks, Inc.+.......................... 341 1,906
Rambus, Inc.+.............................. 1,328 19,535
Semtech Corp.+............................. 777 31,896
Silicon Laboratories, Inc.+................ 503 47,735
SMART Global Holdings, Inc.+............... 240 7,529
Synaptics, Inc.+........................... 413 15,331
Xperi Corp................................. 586 13,478
----------
704,708
----------
52
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
-------------------------------------------------------
COMMON STOCKS (continued)
Electronic Measurement Instruments -- 0.2%
Badger Meter, Inc.................... 336 $ 14,717
CyberOptics Corp.+................... 82 1,181
ESCO Technologies, Inc............... 305 17,675
FARO Technologies, Inc.+............. 198 10,256
Fitbit, Inc., Class A+............... 2,092 12,845
Itron, Inc.+......................... 409 31,963
Mesa Laboratories, Inc............... 38 6,059
--------
94,696
--------
Electronic Parts Distribution -- 0.2%
SYNNEX Corp.......................... 347 46,803
Tech Data Corp.+..................... 420 38,964
--------
85,767
--------
Electronic Security Devices -- 0.6%
Napco Security Technologies, Inc.+... 35,392 359,229
--------
Energy-Alternate Sources -- 0.1%
Clean Energy Fuels Corp.+............ 1,635 3,842
FutureFuel Corp...................... 300 4,554
Green Plains, Inc.................... 454 8,353
Pacific Ethanol, Inc.+............... 492 2,362
Pattern Energy Group, Inc............ 843 19,448
Plug Power, Inc.+.................... 2,676 7,627
Renewable Energy Group, Inc.+........ 456 5,518
REX American Resources Corp.+........ 70 6,173
Sunrun, Inc.+........................ 1,018 5,843
TerraForm Global, Inc., Class A+..... 1,069 5,211
TerraForm Power, Inc., Class A....... 151 2,028
TPI Composites, Inc.+................ 128 3,206
Vivint Solar, Inc.+.................. 312 1,170
--------
75,335
--------
Engineering/R&D Services -- 0.8%
Argan, Inc........................... 174 11,963
EMCOR Group, Inc..................... 706 56,840
Exponent, Inc........................ 307 22,672
KBR, Inc............................. 1,665 32,684
Mistras Group, Inc.+................. 207 4,349
NV5 Global, Inc.+.................... 5,909 343,313
VSE Corp............................. 103 5,057
--------
476,878
--------
Engines-Internal Combustion -- 0.0%
Briggs & Stratton Corp............... 500 12,600
--------
Enterprise Software/Service -- 0.9%
Actua Corp.+......................... 366 5,655
Alteryx, Inc., Class A+.............. 106 2,395
American Software, Inc., Class A..... 22,848 283,544
Apptio, Inc., Class A+............... 213 5,165
Benefitfocus, Inc.+.................. 190 5,206
Blackline, Inc.+..................... 186 6,607
Coupa Software, Inc.+................ 357 12,406
Donnelley Financial Solutions, Inc.+. 397 8,535
Everbridge, Inc.+.................... 203 5,408
Evolent Health, Inc., Class A+....... 624 10,140
Hortonworks, Inc.+................... 573 9,460
LivePerson, Inc.+.................... 649 9,118
Majesco+............................. 67 400
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
Enterprise Software/Service (continued)
ManTech International Corp., Class A......... 309 $ 14,341
MicroStrategy, Inc., Class A+................ 114 15,078
MobileIron, Inc.+............................ 657 2,529
Model N, Inc.+............................... 279 4,059
MuleSoft, Inc., Class A+..................... 292 6,830
Omnicell, Inc.+.............................. 440 21,912
Paycom Software, Inc.+....................... 590 48,498
PROS Holdings, Inc.+......................... 315 7,116
SPS Commerce, Inc.+.......................... 202 9,930
--------
494,332
--------
Entertainment Software -- 0.0%
Glu Mobile, Inc.+............................ 1,243 4,984
--------
Environmental Consulting & Engineering -- 0.1%
Tetra Tech, Inc.............................. 685 33,736
--------
Environmental Monitoring & Detection -- 0.1%
MSA Safety, Inc.............................. 399 31,721
--------
Finance-Commercial -- 0.0%
Hannon Armstrong Sustainable Infrastructure
Capital, Inc................................ 592 14,243
NewStar Financial, Inc....................... 369 4,531
On Deck Capital, Inc.+....................... 591 2,914
--------
21,688
--------
Finance-Consumer Loans -- 0.7%
Elevate Credit, Inc.+........................ 173 1,355
Encore Capital Group, Inc.+.................. 287 13,331
Enova International, Inc.+................... 23,396 347,431
LendingClub Corp.+........................... 3,809 21,673
Nelnet, Inc., Class A........................ 239 13,991
Ocwen Financial Corp.+....................... 1,267 4,422
PRA Group, Inc.+............................. 550 15,345
Regional Management Corp.+................... 122 3,012
World Acceptance Corp.+...................... 70 6,125
--------
426,685
--------
Finance-Credit Card -- 0.0%
Blackhawk Network Holdings, Inc.+............ 655 22,237
--------
Finance-Investment Banker/Broker -- 0.9%
Cowen, Inc.+................................. 18,560 278,400
Diamond Hill Investment Group, Inc........... 38 8,053
Evercore, Inc., Class A...................... 463 37,086
GAIN Capital Holdings, Inc................... 433 3,196
Greenhill & Co., Inc......................... 328 6,003
Houlihan Lokey, Inc.......................... 296 12,323
INTL. FCStone, Inc.+......................... 181 7,513
Investment Technology Group, Inc............. 394 9,247
Ladenburg Thalmann Financial Services, Inc... 28,988 88,703
Moelis & Co., Class A........................ 371 15,860
Oppenheimer Holdings, Inc., Class A.......... 117 2,545
Piper Jaffray Cos............................ 172 12,573
PJT Partners, Inc., Class A.................. 217 8,376
Stifel Financial Corp........................ 798 42,318
Virtu Financial, Inc., Class A............... 295 4,174
--------
536,370
--------
Finance-Leasing Companies -- 0.0%
Aircastle, Ltd............................... 570 13,258
53
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
COMMON STOCKS (continued)
Finance-Leasing Companies (continued)
California First National Bancorp........... 26 $ 400
Marlin Business Services Corp............... 105 2,300
--------
15,958
--------
Finance-Mortgage Loan/Banker -- 0.1%
Arlington Asset Investment Corp., Class A... 277 3,177
Ellie Mae, Inc.+............................ 405 36,430
Federal Agricultural Mtg. Corp., Class C.... 106 7,869
FNFV Group+................................. 755 13,024
Impac Mortgage Holdings, Inc.+.............. 127 1,664
Nationstar Mtg. Holdings, Inc.+............. 350 6,814
PennyMac Financial Services, Inc., Class A+. 190 3,610
PHH Corp.+.................................. 632 8,349
TPG RE Finance Trust, Inc................... 26 508
--------
81,445
--------
Finance-Other Services -- 0.1%
R1 RCM, Inc.+............................... 1,201 4,564
WageWorks, Inc.+............................ 471 30,026
--------
34,590
--------
Financial Guarantee Insurance -- 0.2%
MBIA, Inc.+................................. 1,501 10,882
MGIC Investment Corp.+...................... 4,435 63,421
NMI Holdings, Inc., Class A+................ 683 9,938
Radian Group, Inc........................... 2,596 54,412
--------
138,653
--------
Firearms & Ammunition -- 0.1%
American Outdoor Brands Corp.+.............. 673 9,644
Axon Enterprise, Inc.+...................... 624 14,333
Sturm Ruger & Co., Inc...................... 205 10,158
--------
34,135
--------
Food-Canned -- 0.0%
Bob Evans Farms, Inc........................ 237 18,294
Seneca Foods Corp., Class A+................ 83 2,988
--------
21,282
--------
Food-Confectionery -- 0.0%
Amplify Snack Brands, Inc.+................. 396 2,530
Hostess Brands, Inc.+....................... 958 11,046
Tootsie Roll Industries, Inc................ 203 7,227
--------
20,803
--------
Food-Dairy Products -- 0.0%
Dean Foods Co............................... 1,089 10,618
Lifeway Foods, Inc.+........................ 56 563
--------
11,181
--------
Food-Misc./Diversified -- 0.3%
B&G Foods, Inc.............................. 787 25,027
Cal-Maine Foods, Inc.+...................... 372 16,740
Darling Ingredients, Inc.+.................. 1,966 35,879
J&J Snack Foods Corp........................ 180 23,971
John B. Sanfilippo & Son, Inc............... 103 6,062
Lancaster Colony Corp....................... 225 28,174
Snyder's-Lance, Inc......................... 1,031 38,796
--------
174,649
--------
Value
Security Description Shares (Note 3)
--------------------------------------------------------
Food-Retail -- 0.0%
Ingles Markets, Inc., Class A......... 169 $ 3,938
Smart & Final Stores, Inc.+........... 271 1,626
SUPERVALU, Inc.+...................... 459 7,477
Village Super Market, Inc., Class A... 93 2,231
Weis Markets, Inc..................... 115 4,465
--------
19,737
--------
Food-Wholesale/Distribution -- 1.3%
Calavo Growers, Inc................... 4,817 355,013
Chefs' Warehouse, Inc.+............... 17,349 346,113
Fresh Del Monte Produce, Inc.......... 396 17,626
Performance Food Group Co.+........... 1,009 28,555
SpartanNash Co........................ 450 11,047
United Natural Foods, Inc.+........... 607 23,533
--------
781,887
--------
Footwear & Related Apparel -- 0.2%
Crocs, Inc.+.......................... 886 9,037
Deckers Outdoor Corp.+................ 379 25,863
Iconix Brand Group, Inc.+............. 599 982
Steven Madden, Ltd.+.................. 708 27,612
Weyco Group, Inc...................... 76 2,067
Wolverine World Wide, Inc............. 1,130 30,849
--------
96,410
--------
Forestry -- 0.0%
Deltic Timber Corp.................... 131 12,132
--------
Funeral Services & Related Items -- 0.5%
Carriage Services, Inc................ 10,244 265,319
Matthews International Corp., Class A. 375 23,569
--------
288,888
--------
Gambling (Non-Hotel) -- 0.1%
Golden Entertainment, Inc.+........... 126 3,362
Pinnacle Entertainment, Inc.+......... 634 16,401
Red Rock Resorts, Inc., Class A....... 814 20,049
--------
39,812
--------
Gas-Distribution -- 0.5%
Chesapeake Utilities Corp............. 189 15,224
New Jersey Resources Corp............. 1,030 45,784
Northwest Natural Gas Co.............. 340 22,559
ONE Gas, Inc.......................... 625 48,112
RGC Resources, Inc.................... 80 2,327
South Jersey Industries, Inc.......... 956 32,475
Southwest Gas Holdings, Inc........... 569 46,880
Spire, Inc............................ 566 44,686
WGL Holdings, Inc..................... 614 52,620
--------
310,667
--------
Gold Mining -- 0.0%
Gold Resource Corp.................... 628 2,280
Klondex Mines, Ltd.+.................. 2,107 6,089
--------
8,369
--------
Golf -- 0.0%
Acushnet Holdings Corp................ 277 5,116
Callaway Golf Co...................... 1,120 16,161
Drive Shack, Inc...................... 744 2,716
--------
23,993
--------
54
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------
COMMON STOCKS (continued)
Hazardous Waste Disposal -- 1.2%
Heritage-Crystal Clean, Inc.+............ 23,992 $469,044
Sharps Compliance Corp.+................. 46,451 192,307
US Ecology, Inc.......................... 262 12,458
--------
673,809
--------
Health Care Cost Containment -- 0.1%
CorVel Corp.+............................ 113 6,780
HealthEquity, Inc.+...................... 597 29,981
--------
36,761
--------
Heart Monitors -- 0.0%
FONAR Corp.+............................. 73 2,329
--------
Home Furnishings -- 0.1%
Ethan Allen Interiors, Inc............... 298 8,865
Flexsteel Industries, Inc................ 91 4,575
Hooker Furniture Corp.................... 136 6,446
Sleep Number Corp.+...................... 492 15,990
--------
35,876
--------
Hotels/Motels -- 0.1%
Belmond, Ltd., Class A+.................. 1,072 14,097
ILG, Inc................................. 1,274 37,799
La Quinta Holdings, Inc.+................ 977 17,215
Marcus Corp.............................. 224 6,082
Red Lion Hotels Corp.+................... 198 1,742
--------
76,935
--------
Housewares -- 0.0%
Libbey, Inc.............................. 263 1,799
Lifetime Brands, Inc..................... 117 2,182
--------
3,981
--------
Human Resources -- 1.5%
AMN Healthcare Services, Inc.+........... 565 24,803
Barrett Business Services, Inc........... 85 5,167
BG Staffing, Inc......................... 83 1,401
Cross Country Healthcare, Inc.+.......... 23,791 324,747
Heidrick & Struggles International, Inc.. 220 5,467
Insperity, Inc........................... 219 20,783
Kelly Services, Inc., Class A............ 366 9,629
Kforce, Inc.............................. 281 5,887
Korn/Ferry International................. 613 25,642
On Assignment, Inc.+..................... 608 37,222
Paylocity Holding Corp.+................. 311 16,611
Resources Connection, Inc................ 343 5,402
TriNet Group, Inc.+...................... 490 17,013
TrueBlue, Inc.+.......................... 503 13,631
Willdan Group, Inc.+..................... 11,794 354,528
--------
867,933
--------
Identification Systems -- 0.0%
Brady Corp., Class A..................... 556 21,156
--------
Import/Export -- 0.0%
Castle Brands, Inc.+..................... 1,039 1,236
--------
Independent Power Producers -- 0.1%
Dynegy, Inc.+............................ 1,324 16,484
NRG Yield, Inc., Class A................. 418 7,670
NRG Yield, Inc., Class C................. 763 14,192
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
Independent Power Producers (continued)
Ormat Technologies, Inc...................... 475 $ 30,842
--------
69,188
--------
Industrial Audio & Video Products -- 0.0%
Akoustis Technologies, Inc.+................. 104 633
GoPro, Inc., Class A+........................ 1,280 13,350
Iteris, Inc.+................................ 282 1,949
--------
15,932
--------
Industrial Automated/Robotic -- 0.7%
Hurco Cos., Inc.............................. 73 3,267
Ichor Holdings, Ltd.+........................ 12,274 382,826
--------
386,093
--------
Instruments-Controls -- 0.1%
Allied Motion Technologies, Inc.............. 79 2,244
Control4 Corp.+.............................. 292 8,599
Watts Water Technologies, Inc., Class A...... 333 22,444
Woodward, Inc................................ 638 49,337
--------
82,624
--------
Instruments-Scientific -- 0.0%
Fluidigm Corp.+.............................. 352 2,042
--------
Insurance Brokers -- 0.5%
Crawford & Co., Class B...................... 26,341 310,297
eHealth, Inc.+............................... 186 4,721
--------
315,018
--------
Insurance-Life/Health -- 0.6%
American Equity Investment Life Holding Co... 1,037 30,602
CNO Financial Group, Inc..................... 1,995 47,820
FBL Financial Group, Inc., Class A........... 119 9,204
Fidelity & Guaranty Life..................... 137 4,261
Health Insurance Innovations, Inc., Class A+. 9,924 213,366
Independence Holding Co...................... 82 2,226
National Western Life Group, Inc., Class A... 27 9,655
Primerica, Inc............................... 546 48,321
Trupanion, Inc.+............................. 269 7,575
--------
373,030
--------
Insurance-Multi-line -- 0.2%
Citizens, Inc.+.............................. 558 4,230
Genworth Financial, Inc., Class A+........... 6,022 19,933
Horace Mann Educators Corp................... 490 21,462
Kemper Corp.................................. 475 30,447
United Fire Group, Inc....................... 257 11,845
--------
87,917
--------
Insurance-Property/Casualty -- 1.9%
Ambac Financial Group, Inc.+................. 544 8,856
AMERISAFE, Inc............................... 229 14,816
AmTrust Financial Services, Inc.+............ 1,021 12,824
Atlas Financial Holdings, Inc................ 126 2,489
Baldwin & Lyons, Inc., Class B............... 112 2,570
Donegal Group, Inc., Class A................. 106 1,817
EMC Insurance Group, Inc..................... 105 3,093
Employers Holdings, Inc...................... 381 18,174
Enstar Group, Ltd.+.......................... 135 30,753
Federated National Holding Co................ 151 2,316
Global Indemnity, Ltd.+...................... 99 4,155
Hallmark Financial Services, Inc.+........... 162 1,878
55
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCKS (continued)
Insurance-Property/Casualty (continued)
HCI Group, Inc.......................... 95 $ 3,559
Heritage Insurance Holdings, Inc........ 311 4,988
Infinity Property & Casualty Corp....... 129 12,171
Investors Title Co...................... 18 3,415
James River Group Holdings, Ltd......... 265 11,215
Kingstone Cos., Inc..................... 24,751 400,966
Kinsale Capital Group, Inc.............. 9,198 399,009
National General Holdings Corp.......... 588 11,866
Navigators Group, Inc................... 247 14,326
NI Holdings, Inc.+...................... 123 2,200
RLI Corp................................ 462 27,300
Safety Insurance Group, Inc............. 175 14,385
Selective Insurance Group, Inc.......... 689 41,064
State Auto Financial Corp............... 190 4,872
Stewart Information Services Corp....... 252 9,561
Third Point Reinsurance, Ltd.+.......... 920 15,364
Tiptree, Inc............................ 294 1,955
United Insurance Holdings Corp.......... 204 3,211
Universal Insurance Holdings, Inc....... 380 9,063
----------
1,094,231
----------
Insurance-Reinsurance -- 0.2%
Argo Group International Holdings, Ltd.. 347 21,843
Blue Capital Reinsurance Holdings, Ltd.. 71 941
Essent Group, Ltd.+..................... 960 40,915
Greenlight Capital Re, Ltd., Class A+... 361 7,960
Maiden Holdings, Ltd.................... 859 7,087
State National Cos., Inc................ 353 7,420
WMIH Corp.+............................. 2,318 1,924
----------
88,090
----------
Internet Application Software -- 0.1%
Okta, Inc.+............................. 133 3,846
RealNetworks, Inc.+..................... 291 1,374
Tucows, Inc., Class A+.................. 108 6,313
VirnetX Holding Corp.+.................. 608 3,131
Zendesk, Inc.+.......................... 1,164 36,084
----------
50,748
----------
Internet Connectivity Services -- 0.7%
Boingo Wireless, Inc.+.................. 435 10,170
Cogent Communications Holdings, Inc..... 7,139 384,792
Internap Corp.+......................... 957 4,450
----------
399,412
----------
Internet Content-Entertainment -- 0.0%
Limelight Networks, Inc.+............... 891 4,410
Shutterstock, Inc.+..................... 222 8,656
----------
13,066
----------
Internet Content-Information/News -- 0.1%
DHI Group, Inc.+........................ 581 1,278
HealthStream, Inc.+..................... 309 7,558
Reis, Inc............................... 109 1,989
XO Group, Inc.+......................... 295 5,888
Yelp, Inc.+............................. 930 43,450
----------
60,163
----------
Internet Gambling -- 0.0%
Inspired Entertainment, Inc.+........... 47 538
----------
Value
Security Description Shares (Note 3)
--------------------------------------------------------------------
Internet Security -- 0.7%
Corindus Vascular Robotics, Inc.+................. 1,004 $ 1,144
Imperva, Inc.+.................................... 401 17,123
Proofpoint, Inc.+................................. 514 47,499
Rapid7, Inc.+..................................... 250 4,520
VASCO Data Security International, Inc.+.......... 363 4,937
Zix Corp.+........................................ 66,831 324,130
--------
399,353
--------
Internet Telephone -- 0.1%
8x8, Inc.+........................................ 1,057 14,111
RingCentral, Inc., Class A+....................... 748 31,528
--------
45,639
--------
Investment Management/Advisor Services -- 1.1%
Altisource Portfolio Solutions SA................. 135 3,488
Artisan Partners Asset Management, Inc., Class A.. 533 18,335
Associated Capital Group, Inc., Class A........... 60 2,226
Cohen & Steers, Inc............................... 256 11,134
Financial Engines, Inc............................ 701 25,306
GAMCO Investors, Inc., Class A.................... 54 1,564
Hamilton Lane, Inc., Class A...................... 165 4,536
Medley Management, Inc., Class A.................. 65 367
OM Asset Management PLC........................... 891 13,615
Pzena Investment Management, Inc., Class A........ 11,043 130,308
Silvercrest Asset Management Group, Inc., Class A. 24,366 397,166
Virtus Investment Partners, Inc................... 80 9,312
Waddell & Reed Financial, Inc., Class A........... 973 18,185
Westwood Holdings Group, Inc...................... 97 6,295
WisdomTree Investments, Inc....................... 1,381 15,315
--------
657,152
--------
Lasers-System/Components -- 0.1%
Applied Optoelectronics, Inc.+.................... 220 8,963
Electro Scientific Industries, Inc.+.............. 378 6,763
II-VI, Inc.+...................................... 727 32,860
--------
48,586
--------
Leisure Products -- 0.0%
Escalade, Inc..................................... 127 1,568
Johnson Outdoors, Inc., Class A................... 58 4,362
Marine Products Corp.............................. 94 1,351
--------
7,281
--------
Lighting Products & Systems -- 0.0%
Revolution Lighting Technologies, Inc.+........... 148 823
--------
Linen Supply & Related Items -- 0.1%
UniFirst Corp..................................... 183 28,823
--------
Machine Tools & Related Products -- 0.1%
Hardinge, Inc..................................... 138 2,283
Kennametal, Inc................................... 962 41,991
Milacron Holdings Corp.+.......................... 644 11,560
--------
55,834
--------
Machinery-Construction & Mining -- 0.0%
Astec Industries, Inc............................. 255 13,247
Hyster-Yale Materials Handling, Inc............... 124 9,733
--------
22,980
--------
Machinery-Electrical -- 0.1%
Babcock & Wilcox Enterprises, Inc.+............... 586 2,567
56
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------
COMMON STOCKS (continued)
Machinery-Electrical (continued)
Franklin Electric Co., Inc............. 555 $ 25,252
--------
27,819
--------
Machinery-Farming -- 0.0%
Alamo Group, Inc....................... 114 12,027
Lindsay Corp........................... 126 11,537
--------
23,564
--------
Machinery-General Industrial -- 0.8%
Albany International Corp., Class A.... 344 20,760
Altra Industrial Motion Corp........... 343 16,430
Applied Industrial Technologies, Inc... 459 29,215
Chart Industries, Inc.+................ 367 15,965
DXP Enterprises, Inc.+................. 189 6,061
Gencor Industries, Inc.+............... 97 1,756
Intevac, Inc.+......................... 233 1,957
Kadant, Inc............................ 2,800 318,080
Manitowoc Co., Inc.+................... 1,527 14,537
Tennant Co............................. 211 14,633
Twin Disc, Inc.+....................... 102 2,178
--------
441,572
--------
Machinery-Material Handling -- 0.0%
Columbus McKinnon Corp................. 232 9,178
--------
Machinery-Pumps -- 0.1%
Gorman-Rupp Co......................... 211 6,748
NN, Inc................................ 324 9,574
SPX FLOW, Inc.+........................ 496 20,450
--------
36,772
--------
Marine Services -- 0.0%
Great Lakes Dredge & Dock Corp.+....... 680 3,468
SEACOR Marine Holdings, Inc.+.......... 194 2,745
--------
6,213
--------
Medical Imaging Systems -- 0.0%
Analogic Corp.......................... 150 12,045
Lantheus Holdings, Inc.+............... 312 6,209
--------
18,254
--------
Medical Information Systems -- 0.9%
Allscripts Healthcare Solutions, Inc.+. 2,176 29,333
Computer Programs & Systems, Inc....... 134 4,040
Cotiviti Holdings, Inc.+............... 439 15,435
Inovalon Holdings, Inc., Class A+...... 751 12,579
Medidata Solutions, Inc.+.............. 675 50,780
NantHealth, Inc.+...................... 214 781
Quality Systems, Inc.+................. 626 8,808
Tabula Rasa HealthCare, Inc.+.......... 13,412 387,339
--------
509,095
--------
Medical Instruments -- 0.4%
Abaxis, Inc............................ 263 12,729
AngioDynamics, Inc.+................... 437 7,416
AtriCure, Inc.+........................ 380 8,147
Cardiovascular Systems, Inc.+.......... 382 9,195
CONMED Corp............................ 329 17,180
CryoLife, Inc.+........................ 385 7,488
Endologix, Inc.+....................... 985 5,221
Entellus Medical, Inc.+................ 145 2,455
Value
Security Description Shares (Note 3)
-------------------------------------------------------
Medical Instruments (continued)
Halyard Health, Inc.+................ 560 $ 23,604
Integra LifeSciences Holdings Corp.+. 738 34,524
iRhythm Technologies, Inc.+.......... 165 8,407
LivaNova PLC+........................ 581 42,936
Natus Medical, Inc.+................. 388 16,451
NuVasive, Inc.+...................... 608 34,492
Obalon Therapeutics, Inc.+........... 103 868
--------
231,113
--------
Medical Labs & Testing Services -- 0.1%
Invitae Corp.+....................... 466 3,933
Medpace Holdings, Inc.+.............. 88 3,298
Natera, Inc.+........................ 376 4,132
Teladoc, Inc.+....................... 644 21,284
--------
32,647
--------
Medical Laser Systems -- 0.5%
Cutera, Inc.+........................ 7,693 302,335
--------
Medical Products -- 1.6%
Accuray, Inc.+....................... 975 4,631
Atrion Corp.......................... 17 11,180
AxoGen, Inc.+........................ 327 6,720
Cantel Medical Corp.................. 435 42,665
Cerus Corp.+......................... 1,235 3,544
ConforMIS, Inc.+..................... 480 1,699
Exactech, Inc.+...................... 128 5,357
Glaukos Corp.+....................... 343 12,111
Globus Medical, Inc., Class A+....... 845 26,930
Haemonetics Corp.+................... 628 29,868
Integer Holdings Corp.+.............. 371 18,031
Intersect ENT, Inc.+................. 311 9,221
Invacare Corp........................ 381 5,905
K2M Group Holdings, Inc.+............ 486 9,569
LeMaitre Vascular, Inc............... 178 5,698
Luminex Corp......................... 488 10,419
MiMedx Group, Inc.+.................. 1,239 15,711
NanoString Technologies, Inc.+....... 212 2,112
Nevro Corp.+......................... 332 29,077
Novocure, Ltd.+...................... 691 14,926
NxStage Medical, Inc.+............... 778 20,967
Orthofix International NV+........... 7,406 397,924
Penumbra, Inc.+...................... 351 35,293
Pulse Biosciences, Inc.+............. 109 2,639
Rockwell Medical, Inc.+.............. 574 3,478
Sientra, Inc.+....................... 171 2,507
Surmodics, Inc.+..................... 156 4,641
Tactile Systems Technology, Inc.+.... 5,819 166,947
Viveve Medical, Inc.+................ 179 977
Wright Medical Group NV+............. 1,252 32,815
--------
933,562
--------
Medical-Biomedical/Gene -- 3.8%
Abeona Therapeutics, Inc.+........... 290 5,206
Acceleron Pharma, Inc.+.............. 384 14,976
Achillion Pharmaceuticals, Inc.+..... 1,401 5,632
Acorda Therapeutics, Inc.+........... 519 13,792
Aduro Biotech, Inc.+................. 487 3,872
Advaxis, Inc.+....................... 437 1,486
Agenus, Inc.+........................ 885 3,239
Aileron Therapeutics, Inc.+.......... 54 650
Alder Biopharmaceuticals, Inc.+...... 751 8,449
57
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
COMMON STOCKS (continued)
Medical-Biomedical/Gene (continued)
AMAG Pharmaceuticals, Inc.+................ 420 $ 6,594
AnaptysBio, Inc.+.......................... 143 9,442
Anavex Life Sciences Corp.+................ 438 1,848
ANI Pharmaceuticals, Inc.+................. 7,576 440,014
Aratana Therapeutics, Inc.+................ 40,106 229,807
Ardelyx, Inc.+............................. 400 2,140
Arena Pharmaceuticals, Inc.+............... 467 13,090
Assembly Biosciences, Inc.+................ 168 4,958
Asterias Biotherapeutics, Inc.+............ 323 808
Atara Biotherapeutics, Inc.+............... 305 4,331
Athersys, Inc.+............................ 1,223 2,250
Audentes Therapeutics, Inc.+............... 183 4,866
Axovant Sciences, Ltd.+.................... 358 1,876
Bellicum Pharmaceuticals, Inc.+............ 325 3,062
BioCryst Pharmaceuticals, Inc.+............ 959 4,316
Biohaven Pharmaceutical Holding Co., Ltd.+. 120 3,607
BioTime, Inc.+............................. 906 2,174
Bluebird Bio, Inc.+........................ 537 74,697
Blueprint Medicines Corp.+................. 465 30,885
Cambrex Corp.+............................. 389 16,824
Cascadian Therapeutics, Inc.+.............. 410 1,882
Celldex Therapeutics, Inc.+................ 1,449 3,536
ChemoCentryx, Inc.+........................ 292 1,918
Clearside Biomedical, Inc.+................ 248 1,766
Corium International, Inc.+................ 238 2,399
Corvus Pharmaceuticals, Inc.+.............. 101 1,372
Curis, Inc.+............................... 1,388 2,193
Cytokinetics, Inc.+........................ 497 6,784
CytomX Therapeutics, Inc.+................. 348 6,960
Dermira, Inc.+............................. 456 12,207
Dynavax Technologies Corp.+................ 721 15,862
Edge Therapeutics, Inc.+................... 238 2,585
Editas Medicine, Inc.+..................... 405 10,044
Emergent BioSolutions, Inc.+............... 401 16,437
Enzo Biochem, Inc.+........................ 493 4,856
Epizyme, Inc.+............................. 494 8,250
Esperion Therapeutics, Inc.+............... 202 9,239
Exact Sciences Corp.+...................... 1,394 76,656
Fate Therapeutics, Inc.+................... 456 2,175
FibroGen, Inc.+............................ 792 44,233
Five Prime Therapeutics, Inc.+............. 325 14,579
Fortress Biotech, Inc.+.................... 394 1,474
Foundation Medicine, Inc.+................. 172 7,740
Genocea Biosciences, Inc.+................. 343 398
Geron Corp.+............................... 1,780 4,005
Halozyme Therapeutics, Inc.+............... 1,415 25,088
Idera Pharmaceuticals, Inc.+............... 1,293 2,017
ImmunoGen, Inc.+........................... 1,008 5,846
Immunomedics, Inc.+........................ 1,224 13,121
Innoviva, Inc.+............................ 909 11,126
Inovio Pharmaceuticals, Inc.+.............. 965 5,626
Insmed, Inc.+.............................. 880 23,769
Intellia Therapeutics, Inc.+............... 170 5,290
Iovance Biotherapeutics, Inc.+............. 633 4,922
Karyopharm Therapeutics, Inc.+............. 405 4,135
Kura Oncology, Inc.+....................... 171 2,548
Lexicon Pharmaceuticals, Inc.+............. 516 5,258
Ligand Pharmaceuticals, Inc.+.............. 245 35,611
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
Medical-Biomedical/Gene (continued)
Loxo Oncology, Inc.+..................... 271 $ 23,349
MacroGenics, Inc.+....................... 398 7,876
Matinas BioPharma Holdings, Inc.+........ 632 708
Medicines Co.+........................... 826 23,739
Merrimack Pharmaceuticals, Inc........... 153 1,796
Momenta Pharmaceuticals, Inc.+........... 879 12,394
Myriad Genetics, Inc.+................... 769 26,361
NantKwest, Inc.+......................... 366 1,691
NeoGenomics, Inc.+....................... 36,665 317,886
NewLink Genetics Corp.+.................. 262 2,452
Novavax, Inc.+........................... 3,371 3,674
Novelion Therapeutics, Inc.+............. 181 854
Nymox Pharmaceutical Corp.+.............. 341 1,214
Omeros Corp.+............................ 499 7,864
Oncocyte Corp.+.......................... 43 260
Organovo Holdings, Inc.+................. 1,180 1,876
Otonomy, Inc.+........................... 338 1,006
Ovid therapeutics, Inc.+................. 60 389
Pacific Biosciences of California, Inc.+. 1,228 5,194
Paratek Pharmaceuticals, Inc.+........... 10,502 224,743
PDL BioPharma, Inc.+..................... 1,904 5,636
Pieris Pharmaceuticals, Inc.+............ 411 2,076
Prothena Corp. PLC+...................... 460 26,703
PTC Therapeutics, Inc.+.................. 475 8,902
Puma Biotechnology, Inc.+................ 344 43,791
REGENXBIO, Inc.+......................... 329 9,854
Retrophin, Inc.+......................... 458 11,390
Rigel Pharmaceuticals, Inc.+............. 1,480 5,550
RTI Surgical, Inc.+...................... 654 2,943
Sage Therapeutics, Inc.+................. 414 26,198
Sangamo Therapeutics, Inc.+.............. 983 12,189
Selecta Biosciences, Inc.+............... 140 2,971
Seres Therapeutics, Inc.+................ 245 2,460
Sienna Biopharmaceuticals, Inc.+......... 61 1,196
Spark Therapeutics, Inc.+................ 320 25,888
Spectrum Pharmaceuticals, Inc.+.......... 932 18,258
Stemline Therapeutics, Inc.+............. 270 3,686
Strongbridge Biopharma PLC+.............. 262 1,572
Syndax Pharmaceuticals, Inc.+............ 106 1,185
Theravance Biopharma, Inc................ 500 14,430
Tobira Therapeutics, Inc. CVR+(1)(2)..... 104 0
Tocagen, Inc.+........................... 101 1,118
Ultragenyx Pharmaceutical, Inc.+......... 474 21,847
VBI Vaccines, Inc.+...................... 260 894
Veracyte, Inc.+.......................... 284 2,428
Versartis, Inc.+......................... 390 702
WaVe Life Sciences, Ltd.+................ 142 3,273
XBiotech, Inc.+.......................... 231 984
ZIOPHARM Oncology, Inc.+................. 1,573 7,330
----------
2,249,578
----------
Medical-Drugs -- 3.2%
Achaogen, Inc.+.......................... 347 4,414
Aclaris Therapeutics, Inc.+.............. 6,321 159,352
Adamas Pharmaceuticals, Inc.+............ 175 4,316
Aerie Pharmaceuticals, Inc.+............. 389 24,021
Aimmune Therapeutics, Inc.+.............. 421 12,238
Akcea Therapeutics, Inc.+................ 179 3,279
Amicus Therapeutics, Inc.+............... 1,959 27,896
58
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------
COMMON STOCKS (continued)
Medical-Drugs (continued)
Array BioPharma, Inc.+.................. 2,066 $ 21,590
Athenex, Inc.+.......................... 83 1,389
BioSpecifics Technologies Corp.+........ 6,833 312,746
Catalyst Pharmaceuticals, Inc.+......... 857 2,451
Cempra, Inc.+........................... 574 1,320
Chimerix, Inc.+......................... 558 2,745
Clovis Oncology, Inc.+.................. 518 39,042
Coherus Biosciences, Inc.+.............. 459 5,164
Collegium Pharmaceutical, Inc.+......... 271 2,799
Conatus Pharmaceuticals, Inc.+.......... 306 1,405
Corbus Pharmaceuticals Holdings, Inc.+.. 530 3,763
Corcept Therapeutics, Inc.+............. 1,091 21,482
Durata Therapeutics , Inc. CVR+(1)(2)... 228 0
Durect Corp.+........................... 1,642 1,309
Eagle Pharmaceuticals, Inc.+............ 99 5,321
Enanta Pharmaceuticals, Inc.+........... 186 9,239
Global Blood Therapeutics, Inc.+........ 442 17,592
Horizon Pharma PLC+..................... 1,955 26,510
Ignyta, Inc.+........................... 598 9,209
Immune Design Corp.+.................... 204 1,010
Insys Therapeutics, Inc.+............... 288 1,483
Intra-Cellular Therapies, Inc.+......... 404 6,298
Ironwood Pharmaceuticals, Inc.+......... 1,612 24,793
Jounce Therapeutics, Inc.+.............. 172 2,408
Kala Pharmaceuticals, Inc.+............. 95 1,526
Keryx Biopharmaceuticals, Inc.+......... 979 6,344
Lannett Co., Inc.+...................... 337 6,706
Madrigal Pharmaceuticals, Inc.+......... 48 2,400
MediciNova, Inc.+....................... 392 2,787
Minerva Neurosciences, Inc.+............ 301 1,896
Miragen Therapeutics, Inc.+............. 151 1,250
MyoKardia, Inc.+........................ 228 8,767
Neos Therapeutics, Inc.+................ 231 2,402
Ocular Therapeutix, Inc.+............... 270 1,555
Pacira Pharmaceuticals, Inc.+........... 470 15,063
PharMerica Corp.+....................... 357 10,460
PRA Health Sciences, Inc.+.............. 584 47,555
Prestige Brands Holdings, Inc.+......... 638 29,922
Progenics Pharmaceuticals, Inc.+........ 55,314 342,394
Protagonist Therapeutics, Inc.+......... 112 1,677
Ra Pharmaceuticals, Inc.+............... 141 1,853
Radius Health, Inc.+.................... 446 14,321
Reata Pharmaceuticals, Inc., Class A+... 135 4,088
Sucampo Pharmaceuticals, Inc., Class A+. 31,389 313,890
Supernus Pharmaceuticals, Inc.+......... 567 23,587
Synergy Pharmaceuticals, Inc.+.......... 2,715 7,412
Syros Pharmaceuticals, Inc.+............ 150 2,580
Tetraphase Pharmaceuticals, Inc.+....... 605 3,636
TG Therapeutics, Inc.+.................. 581 4,735
TherapeuticsMD, Inc.+................... 1,869 8,822
Trevena, Inc.+.......................... 656 984
Vanda Pharmaceuticals, Inc.+............ 14,467 227,132
Voyager Therapeutics, Inc.+............. 174 3,664
vTv Therapeutics, Inc., Class A+........ 85 537
Zogenix, Inc.+.......................... 377 14,138
Zynerba Pharmaceuticals, Inc.+.......... 137 1,343
----------
1,872,010
----------
Value
Security Description Shares (Note 3)
---------------------------------------------------------
Medical-Generic Drugs -- 0.3%
Amphastar Pharmaceuticals, Inc.+..... 5,616 $ 101,481
Avexis, Inc.+........................ 294 30,726
Dova Pharmaceuticals, Inc.+.......... 62 1,554
Impax Laboratories, Inc.+............ 879 15,954
Teligent, Inc.+...................... 492 2,794
----------
152,509
----------
Medical-HMO -- 0.2%
Magellan Health, Inc.+............... 285 24,311
Molina Healthcare, Inc.+............. 527 35,746
Tivity Health, Inc.+................. 437 20,211
Triple-S Management Corp., Class B+.. 280 6,723
----------
86,991
----------
Medical-Hospitals -- 0.1%
Community Health Systems, Inc.+...... 1,139 6,720
Select Medical Holdings Corp.+....... 1,286 24,627
Surgery Partners, Inc.+.............. 226 2,090
Tenet Healthcare Corp.+.............. 974 13,909
----------
47,346
----------
Medical-Nursing Homes -- 0.1%
Ensign Group, Inc.................... 577 13,317
Genesis Healthcare, Inc.+............ 446 436
Kindred Healthcare, Inc.............. 1,005 6,080
National HealthCare Corp............. 134 8,576
----------
28,409
----------
Medical-Outpatient/Home Medical -- 1.9%
Addus HomeCare Corp.+................ 10,875 391,500
Almost Family, Inc.+................. 153 6,770
Amedisys, Inc.+...................... 341 16,406
Chemed Corp.......................... 188 42,005
Civitas Solutions, Inc.+............. 12,788 238,496
LHC Group, Inc.+..................... 6,210 414,890
Providence Service Corp.+............ 137 7,617
----------
1,117,684
----------
Medical-Wholesale Drug Distribution -- 0.0%
Owens & Minor, Inc................... 728 17,887
----------
Metal Processors & Fabrication -- 0.7%
Ampco-Pittsburgh Corp................ 104 1,721
CIRCOR International, Inc............ 198 8,702
Global Brass & Copper Holdings, Inc.. 260 9,100
Haynes International, Inc............ 149 5,316
LB Foster Co., Class A+.............. 100 2,490
Mueller Industries, Inc.............. 682 23,700
Park-Ohio Holdings Corp.............. 106 4,998
RBC Bearings, Inc.+.................. 277 34,298
Rexnord Corp.+....................... 1,247 31,824
Sun Hydraulics Corp.................. 4,929 283,565
----------
405,714
----------
Metal Products-Distribution -- 0.7%
Lawson Products, Inc.+............... 15,391 387,084
Olympic Steel, Inc................... 110 2,077
Worthington Industries, Inc.......... 539 24,524
----------
413,685
----------
Metal Products-Fasteners -- 0.0%
Eastern Co........................... 67 1,936
59
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------------------
COMMON STOCKS (continued)
Metal Products-Fasteners (continued)
TriMas Corp.+..................................... 545 $ 14,470
--------
16,406
--------
Metal-Aluminum -- 0.1%
Century Aluminum Co.+............................. 597 8,358
Kaiser Aluminum Corp.............................. 201 19,935
--------
28,293
--------
Metal-Diversified -- 0.0%
Ferroglobe Representation & Warranty Trust+(1)(2). 777 0
--------
Metal-Iron -- 0.0%
Cleveland-Cliffs, Inc.+........................... 3,569 21,271
--------
Miscellaneous Manufacturing -- 0.1%
American Railcar Industries, Inc.................. 87 3,463
FreightCar America, Inc........................... 145 2,714
Hillenbrand, Inc.................................. 758 29,979
John Bean Technologies Corp....................... 376 40,194
--------
76,350
--------
Motion Pictures & Services -- 0.0%
Eros International PLC+........................... 326 3,993
IMAX Corp.+....................................... 691 16,757
--------
20,750
--------
MRI/Medical Diagnostic Imaging -- 0.6%
RadNet, Inc.+..................................... 29,400 321,930
--------
Multimedia -- 0.1%
E.W. Scripps Co., Class A+........................ 693 12,017
Entravision Communications Corp., Class A......... 793 4,123
Liberty Media Corp.-Liberty Braves, Series A+..... 119 2,794
Liberty Media Corp.-Liberty Braves, Series C+..... 411 9,704
Media General, Inc. CVR+(1)(2).................... 1,299 0
--------
28,638
--------
Networking Products -- 0.7%
A10 Networks, Inc.+............................... 587 4,291
Calix, Inc.+...................................... 514 2,827
Extreme Networks, Inc.+........................... 1,307 15,684
Gigamon, Inc.+.................................... 433 16,670
Infinera Corp.+................................... 1,734 14,514
NeoPhotonics Corp.+............................... 387 2,016
NETGEAR, Inc.+.................................... 386 18,007
Silicom, Ltd...................................... 4,497 320,591
--------
394,600
--------
Night Clubs -- 0.0%
RCI Hospitality Holdings, Inc..................... 109 3,003
--------
Non-Ferrous Metals -- 0.0%
Materion Corp..................................... 239 12,273
Uranium Energy Corp.+............................. 1,634 1,732
--------
14,005
--------
Non-Hazardous Waste Disposal -- 0.1%
Advanced Disposal Services, Inc.+................. 510 12,709
Casella Waste Systems, Inc., Class A+............. 468 8,639
Covanta Holding Corp.............................. 1,404 22,605
--------
43,953
--------
Value
Security Description Shares (Note 3)
--------------------------------------------------------
Office Automation & Equipment -- 0.0%
Eastman Kodak Co.+................... 198 $ 1,059
--------
Office Furnishings-Original -- 0.2%
CompX International, Inc............. 20 297
Herman Miller, Inc................... 715 24,024
HNI Corp............................. 529 18,103
Interface, Inc....................... 745 16,986
Kimball International, Inc., Class B. 437 8,377
Knoll, Inc........................... 579 12,286
Steelcase, Inc., Class A............. 1,026 14,928
--------
95,001
--------
Office Supplies & Forms -- 0.0%
ACCO Brands Corp.+................... 1,295 16,900
--------
Oil & Gas Drilling -- 0.1%
Diamond Offshore Drilling, Inc.+..... 775 12,966
Ensco PLC, Class A................... 5,120 27,597
Noble Corp. PLC+..................... 2,925 12,168
Parker Drilling Co.+................. 1,608 1,688
Rowan Cos. PLC, Class A+............. 1,397 20,019
--------
74,438
--------
Oil Companies-Exploration & Production -- 1.4%
Abraxas Petroleum Corp.+............. 235,712 502,067
Approach Resources, Inc.+............ 515 1,200
Bill Barrett Corp.+.................. 904 4,457
Bonanza Creek Energy, Inc.+.......... 243 8,221
California Resources Corp.+.......... 511 5,636
Callon Petroleum Co.+................ 2,414 26,771
Carrizo Oil & Gas, Inc.+............. 921 16,292
Contango Oil & Gas Co.+.............. 283 1,129
Denbury Resources, Inc.+............. 4,761 5,856
Earthstone Energy, Inc., Class A+.... 231 1,859
Eclipse Resources Corp.+............. 1,046 2,322
Energy XXI Gulf Coast, Inc.+......... 354 3,027
EP Energy Corp., Class A+............ 461 1,245
Evolution Petroleum Corp............. 303 2,242
Gastar Exploration, Inc.+............ 2,090 1,714
Halcon Resources Corp.+.............. 1,532 10,081
Isramco, Inc.+....................... 9 1,022
Jagged Peak Energy, Inc.+............ 676 9,390
Jones Energy, Inc., Class A+......... 546 699
Lilis Energy, Inc.+.................. 512 2,550
Matador Resources Co.+............... 1,075 28,541
Midstates Petroleum Co., Inc.+....... 134 2,043
Oasis Petroleum, Inc.+............... 2,819 26,639
Panhandle Oil and Gas, Inc., Class A. 188 4,540
PDC Energy, Inc.+.................... 792 40,337
Penn Virginia Corp.+................. 171 6,664
Resolute Energy Corp.+............... 260 7,808
Ring Energy, Inc.+................... 543 6,956
Rosehill Resources, Inc.+............ 30 292
Sanchez Energy Corp.+................ 849 3,676
SandRidge Energy, Inc.+.............. 418 7,846
SilverBow Resources, Inc.+........... 83 1,867
SRC Energy, Inc.+.................... 2,406 22,953
Stone Energy Corp.+.................. 234 6,884
Ultra Petroleum Corp.+............... 2,337 18,556
Unit Corp.+.......................... 620 11,606
W&T Offshore, Inc.+.................. 1,123 3,515
60
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
------------------------------------------------------------------
COMMON STOCKS (continued)
Oil Companies-Exploration & Production (continued)
WildHorse Resource Development Corp.+........... 240 $ 3,122
--------
811,625
--------
Oil Field Machinery & Equipment -- 0.1%
Dril-Quip, Inc.+................................ 454 19,114
Exterran Corp.+................................. 385 12,424
Flotek Industries, Inc.+........................ 662 3,257
Forum Energy Technologies, Inc.+................ 826 11,894
Gulf Island Fabrication, Inc.................... 164 2,157
Natural Gas Services Group, Inc.+............... 148 4,114
Thermon Group Holdings, Inc.+................... 386 8,303
--------
61,263
--------
Oil Refining & Marketing -- 0.1%
Adams Resources & Energy, Inc................... 26 1,117
CVR Energy, Inc................................. 189 5,188
Delek US Holdings, Inc.......................... 932 24,279
Par Pacific Holdings, Inc.+..................... 381 7,997
Trecora Resources+.............................. 235 2,855
--------
41,436
--------
Oil-Field Services -- 0.6%
Archrock, Inc................................... 837 10,044
Basic Energy Services, Inc.+.................... 208 3,923
Bristow Group, Inc.............................. 388 3,663
C&J Energy Services, Inc.+...................... 556 15,840
CARBO Ceramics, Inc.+........................... 275 2,277
Era Group, Inc.+................................ 236 2,539
Frank's International NV........................ 597 3,946
Helix Energy Solutions Group, Inc.+............. 1,684 11,485
Independence Contract Drilling, Inc.+........... 410 1,328
Keane Group, Inc.+.............................. 372 5,744
Key Energy Services, Inc.+...................... 124 1,319
Mammoth Energy Services, Inc.+.................. 96 1,894
Matrix Service Co.+............................. 314 4,427
McDermott International, Inc.+.................. 3,392 22,455
MRC Global, Inc.+............................... 1,070 18,350
NCS Multistage Holdings, Inc.+.................. 132 2,875
Newpark Resources, Inc.+........................ 1,046 9,152
NOW, Inc.+...................................... 1,282 16,051
Oil States International, Inc.+................. 615 14,176
PHI, Inc.+...................................... 140 1,637
Pioneer Energy Services Corp.+.................. 912 1,733
ProPetro Holding Corp.+......................... 302 4,599
SEACOR Holdings, Inc.+.......................... 194 9,157
Select Energy Services, Inc., Class A+.......... 110 1,791
Solaris Oilfield Infrastructure, Inc., Class A+. 9,341 149,082
Superior Energy Services, Inc.+................. 1,824 16,088
Tesco Corp.+.................................... 556 2,141
TETRA Technologies, Inc.+....................... 1,371 3,894
Willbros Group, Inc.+........................... 525 1,607
--------
343,217
--------
Optical Recognition Equipment -- 0.0%
Digimarc Corp.+................................. 119 4,248
--------
Optical Supplies -- 0.0%
STAAR Surgical Co.+............................. 490 6,493
--------
Value
Security Description Shares (Note 3)
---------------------------------------------------------
Paper & Related Products -- 0.1%
Clearwater Paper Corp.+................ 194 $ 8,953
Neenah Paper, Inc...................... 199 17,273
Orchids Paper Products Co.............. 108 1,327
P.H. Glatfelter Co..................... 520 10,899
Schweitzer-Mauduit International, Inc.. 365 15,414
Verso Corp., Class A+.................. 404 2,832
--------
56,698
--------
Patient Monitoring Equipment -- 0.2%
Insulet Corp.+......................... 696 40,932
Masimo Corp.+.......................... 537 47,127
--------
88,059
--------
Pharmacy Services -- 0.0%
BioScrip, Inc.+........................ 1,391 3,519
Diplomat Pharmacy, Inc.+............... 572 12,041
--------
15,560
--------
Physical Therapy/Rehabilitation Centers -- 0.6%
AAC Holdings, Inc.+.................... 137 1,085
HealthSouth Corp....................... 1,164 53,707
U.S. Physical Therapy, Inc............. 4,732 321,539
--------
376,331
--------
Pipelines -- 0.1%
SemGroup Corp., Class A................ 795 20,710
Tellurian, Inc.+....................... 664 7,151
--------
27,861
--------
Pollution Control -- 0.0%
Advanced Emissions Solutions, Inc...... 252 3,026
CECO Environmental Corp................ 357 3,131
Hudson Technologies, Inc.+............. 439 2,599
--------
8,756
--------
Poultry -- 0.1%
Sanderson Farms, Inc................... 241 36,046
--------
Power Converter/Supply Equipment -- 0.7%
Advanced Energy Industries, Inc.+...... 476 40,327
Energous Corp.+........................ 225 2,207
Generac Holdings, Inc.+................ 737 38,390
Powell Industries, Inc................. 106 3,072
SPX Corp.+............................. 510 14,938
SunPower Corp.+........................ 716 5,098
Vicor Corp.+........................... 14,189 305,773
--------
409,805
--------
Precious Metals -- 0.0%
Coeur Mining, Inc.+.................... 2,169 16,463
--------
Printing-Commercial -- 0.2%
ARC Document Solutions, Inc.+.......... 479 2,117
Cimpress NV+........................... 299 32,633
Deluxe Corp............................ 581 40,467
Ennis, Inc............................. 300 6,045
LSC Communications, Inc................ 400 6,472
Quad/Graphics, Inc..................... 376 8,569
RR Donnelley & Sons Co................. 840 7,728
--------
104,031
--------
61
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
--------------------------------------------------------------
COMMON STOCKS (continued)
Private Equity -- 0.1%
Fifth Street Asset Management, Inc.......... 85 $ 349
Granite Point Mtg. Trust, Inc............... 78 1,447
Kennedy-Wilson Holdings, Inc................ 1,450 28,202
-------
29,998
-------
Publishing-Books -- 0.0%
Houghton Mifflin Harcourt Co.+.............. 1,239 12,266
Scholastic Corp............................. 339 12,523
-------
24,789
-------
Publishing-Newspapers -- 0.1%
Daily Journal Corp.+........................ 13 $ 3,017
Gannett Co., Inc............................ 1,369 11,910
New York Times Co., Class A................. 1,504 28,727
tronc, Inc.+................................ 234 3,460
-------
47,114
-------
Publishing-Periodicals -- 0.1%
Meredith Corp............................... 474 25,122
Time, Inc................................... 1,199 13,908
Value Line, Inc............................. 13 233
-------
39,263
-------
Quarrying -- 0.1%
Compass Minerals International, Inc......... 406 26,634
-------
Racetracks -- 0.1%
Churchill Downs, Inc........................ 162 33,785
Empire Resorts, Inc.+....................... 41 914
International Speedway Corp., Class A....... 299 11,616
Penn National Gaming, Inc.+................. 1,015 26,482
Speedway Motorsports, Inc................... 139 2,773
-------
75,570
-------
Radio -- 0.0%
Beasley Broadcast Group, Inc., Class A...... 58 548
Entercom Communications Corp., Class A...... 335 3,702
Saga Communications, Inc., Class A.......... 45 1,969
Salem Media Group, Inc...................... 139 889
Townsquare Media, Inc., Class A+............ 105 1,096
-------
8,204
-------
Real Estate Investment Trusts -- 3.6%
Acadia Realty Trust......................... 1,006 28,319
AG Mtg. Investment Trust, Inc............... 330 6,207
Agree Realty Corp........................... 324 15,322
Alexander's, Inc............................ 26 10,686
Altisource Residential Corp................. 594 6,338
American Assets Trust, Inc.................. 484 18,774
Anworth Mtg. Asset Corp..................... 1,135 6,345
Apollo Commercial Real Estate Finance, Inc.. 1,229 22,208
Ares Commercial Real Estate Corp............ 321 4,167
Armada Hoffler Properties, Inc.............. 535 7,634
ARMOUR Residential REIT, Inc................ 484 12,124
Ashford Hospitality Prime, Inc.............. 318 3,091
Ashford Hospitality Trust, Inc.............. 921 6,475
Bluerock Residential Growth REIT, Inc....... 275 3,105
Capstead Mtg. Corp.......................... 1,142 10,072
CareTrust REIT, Inc......................... 863 16,311
CatchMark Timber Trust, Inc., Class A....... 464 5,939
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
Real Estate Investment Trusts (continued)
CBL & Associates Properties, Inc............... 2,019 $15,829
Cedar Realty Trust, Inc........................ 989 5,380
Chatham Lodging Trust.......................... 453 9,853
Cherry Hill Mtg. Investment Corp............... 140 2,549
Chesapeake Lodging Trust....................... 709 19,781
City Office REIT, Inc.......................... 354 4,616
Clipper Realty, Inc............................ 179 1,946
CorEnergy Infrastructure Trust, Inc............ 142 5,123
Cousins Properties, Inc........................ 5,008 45,172
CYS Investments, Inc........................... 1,814 14,512
DiamondRock Hospitality Co..................... 2,396 26,021
Dynex Capital, Inc............................. 553 3,871
Easterly Government Properties, Inc............ 445 8,953
EastGroup Properties, Inc...................... 398 36,055
Education Realty Trust, Inc.................... 881 30,747
Ellington Residential Mortgage REIT............ 100 1,338
First Industrial Realty Trust, Inc............. 1,394 43,047
Four Corners Property Trust, Inc............... 725 17,893
Franklin Street Properties Corp................ 1,252 12,520
GEO Group, Inc................................. 1,466 38,043
Getty Realty Corp.............................. 358 10,171
Gladstone Commercial Corp...................... 298 6,455
Global Medical REIT, Inc....................... 177 1,497
Global Net Lease, Inc.......................... 802 17,323
Government Properties Income Trust............. 1,132 20,568
Gramercy Property Trust........................ 1,812 53,816
Great Ajax Corp................................ 188 2,660
Healthcare Realty Trust, Inc................... 1,448 46,684
Hersha Hospitality Trust....................... 465 8,226
Independence Realty Trust, Inc................. 831 8,435
InfraREIT, Inc.+............................... 508 11,379
Invesco Mtg. Capital, Inc...................... 1,347 23,195
Investors Real Estate Trust.................... 1,460 8,541
iStar, Inc.+................................... 834 9,758
Jernigan Capital, Inc.......................... 111 2,278
Kite Realty Group Trust........................ 992 18,541
KKR Real Estate Finance Trust, Inc............. 124 2,507
LaSalle Hotel Properties....................... 1,363 38,450
Lexington Realty Trust......................... 2,595 26,261
LTC Properties, Inc............................ 471 21,906
Mack-Cali Realty Corp.......................... 1,085 24,706
MedEquities Realty Trust, Inc.................. 343 3,986
Monmouth Real Estate Investment Corp........... 831 14,160
MTGE Investment Corp........................... 548 9,919
National Health Investors, Inc................. 476 36,266
National Storage Affiliates Trust.............. 531 13,164
New Senior Investment Group, Inc............... 983 8,788
New York Mortgage Trust, Inc................... 1,335 8,050
NexPoint Residential Trust, Inc................ 207 4,916
NorthStar Realty Europe Corp................... 652 8,782
One Liberty Properties, Inc.................... 172 4,168
Orchid Island Capital, Inc..................... 510 5,080
Owens Realty Mortgage, Inc..................... 120 2,155
Pebblebrook Hotel Trust........................ 825 29,420
Pennsylvania Real Estate Investment Trust...... 820 7,970
PennyMac Mortgage Investment Trust............. 790 12,687
Physicians Realty Trust........................ 2,088 36,289
Potlatch Corp.................................. 485 25,123
Preferred Apartment Communities, Inc., Class A. 366 7,265
62
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------------
COMMON STOCKS (continued)
Real Estate Investment Trusts (continued)
PS Business Parks, Inc..................... 237 $ 31,362
QTS Realty Trust, Inc., Class A............ 563 32,570
Quality Care Properties, Inc.+............. 1,132 17,920
RAIT Financial Trust....................... 1,100 589
Ramco-Gershenson Properties Trust.......... 941 11,885
Redwood Trust, Inc......................... 917 14,406
Resource Capital Corp...................... 361 3,704
Retail Opportunity Investments Corp........ 1,297 23,320
Rexford Industrial Realty, Inc............. 830 24,643
RLJ Lodging Trust.......................... 2,031 43,992
Ryman Hospitality Properties, Inc.......... 530 35,049
Sabra Health Care REIT, Inc................ 2,096 41,752
Saul Centers, Inc.......................... 133 8,129
Select Income REIT......................... 759 18,337
Seritage Growth Properties, Class A........ 301 12,380
STAG Industrial, Inc....................... 1,070 29,211
Starwood Waypoint Homes.................... 1,517 55,082
Summit Hotel Properties, Inc............... 1,225 19,367
Sunstone Hotel Investors, Inc.............. 2,645 43,166
Sutherland Asset Management Corp........... 203 3,177
Terreno Realty Corp........................ 587 21,555
Tier REIT, Inc............................. 571 11,175
UMH Properties, Inc........................ 22,216 331,907
Universal Health Realty Income Trust....... 152 11,128
Urban Edge Properties...................... 1,170 27,448
Urstadt Biddle Properties, Inc., Class A... 354 7,692
Washington Prime Group, Inc................ 2,234 17,492
Washington Real Estate Investment Trust.... 925 29,776
Western Asset Mortgage Capital Corp........ 489 4,924
Whitestone REIT............................ 441 5,892
Xenia Hotels & Resorts, Inc................ 1,289 28,049
----------
2,094,990
----------
Real Estate Management/Services -- 0.1%
Farmland Partners, Inc..................... 382 3,190
Griffin Industrial Realty, Inc............. 8 297
HFF, Inc., Class A......................... 440 19,298
Marcus & Millichap, Inc.+.................. 192 5,457
RE/MAX Holdings, Inc., Class A............. 213 14,164
Redfin Corp.+.............................. 128 3,013
----------
45,419
----------
Real Estate Operations & Development -- 0.7%
Alexander & Baldwin, Inc................... 560 25,334
Community Healthcare Trust, Inc............ 207 5,678
Consolidated-Tomoka Land Co................ 47 2,751
Forestar Group, Inc.+...................... 126 2,243
FRP Holdings, Inc.+........................ 78 3,459
Maui Land & Pineapple Co., Inc.+........... 80 1,276
RMR Group, Inc., Class A................... 6,984 366,311
St. Joe Co.+............................... 577 10,271
Stratus Properties, Inc.................... 71 2,112
Transcontinental Realty Investors, Inc.+... 20 594
Trinity Place Holdings, Inc.+.............. 217 1,562
----------
421,591
----------
Recreational Centers -- 0.1%
Planet Fitness, Inc., Class A.............. 1,009 26,880
----------
Value
Security Description Shares (Note 3)
--------------------------------------------------------
Recreational Vehicles -- 0.1%
Camping World Holdings, Inc., Class A. 280 $ 11,766
LCI Industries........................ 290 35,902
Malibu Boats, Inc., Class A+.......... 216 6,739
MCBC Holdings, Inc.+.................. 220 5,031
--------
59,438
--------
Recycling -- 0.0%
Aqua Metals, Inc.+.................... 199 792
--------
Rental Auto/Equipment -- 0.2%
Aaron's, Inc.......................... 759 27,931
Avis Budget Group, Inc.+.............. 897 37,001
CAI International, Inc.+.............. 185 6,849
Herc Holdings, Inc.+.................. 290 14,053
Hertz Global Holdings, Inc.+.......... 655 16,290
McGrath RentCorp...................... 281 12,561
Rent-A-Center, Inc.................... 513 5,099
Textainer Group Holdings, Ltd.+....... 325 6,354
--------
126,138
--------
Research & Development -- 0.1%
INC Research Holdings, Inc., Class A+. 654 37,376
--------
Resorts/Theme Parks -- 0.1%
Marriott Vacations Worldwide Corp..... 263 34,616
SeaWorld Entertainment, Inc.+......... 820 9,414
--------
44,030
--------
Respiratory Products -- 0.0%
Inogen, Inc.+......................... 204 20,182
--------
Retail-Apparel/Shoe -- 0.3%
Abercrombie & Fitch Co., Class A...... 818 10,986
American Eagle Outfitters, Inc........ 1,943 25,298
Ascena Retail Group, Inc.+............ 2,066 4,008
Boot Barn Holdings, Inc.+............. 147 1,210
Buckle, Inc........................... 344 5,659
Caleres, Inc.......................... 504 13,774
Cato Corp., Class A................... 289 3,717
Chico's FAS, Inc...................... 1,540 12,305
Children's Place, Inc................. 207 22,522
DSW, Inc., Class A.................... 787 15,071
Duluth Holdings, Inc., Class B+....... 115 2,376
Express, Inc.+........................ 924 6,255
Finish Line, Inc., Class A............ 476 4,412
Francesca's Holdings Corp.+........... 442 2,860
Genesco, Inc.+........................ 229 5,610
Guess?, Inc........................... 718 11,639
J. Jill, Inc.+........................ 141 720
Shoe Carnival, Inc.................... 139 2,609
Tailored Brands, Inc.................. 588 9,085
Tilly's, Inc., Class A................ 155 1,846
Vera Bradley, Inc.+................... 241 1,735
Winmark Corp.......................... 28 3,661
--------
167,358
--------
Retail-Appliances -- 0.0%
Conn's, Inc.+......................... 220 6,765
--------
Retail-Automobile -- 0.2%
America's Car-Mart, Inc.+............. 90 3,856
63
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------
COMMON STOCKS (continued)
Retail-Automobile (continued)
Asbury Automotive Group, Inc.+......... 224 $ 13,754
Group 1 Automotive, Inc................ 245 19,250
Lithia Motors, Inc., Class A........... 279 31,577
Rush Enterprises, Inc., Class A+....... 356 18,078
Rush Enterprises, Inc., Class B+....... 64 3,046
Sonic Automotive, Inc., Class A........ 319 6,332
--------
95,893
--------
Retail-Bookstores -- 0.0%
Barnes & Noble Education, Inc.+........ 458 2,496
Barnes & Noble, Inc.................... 712 4,984
--------
7,480
--------
Retail-Building Products -- 0.1%
At Home Group, Inc.+................... 61 1,250
BMC Stock Holdings, Inc.+.............. 784 16,817
Foundation Building Materials, Inc.+... 155 2,085
GMS, Inc.+............................. 326 11,100
Lumber Liquidators Holdings, Inc.+..... 337 10,373
Tile Shop Holdings, Inc................ 472 4,036
--------
45,661
--------
Retail-Computer Equipment -- 0.0%
PC Connection, Inc..................... 139 3,753
PCM, Inc.+............................. 120 1,686
--------
5,439
--------
Retail-Discount -- 0.1%
Big Lots, Inc.......................... 538 27,605
Citi Trends, Inc....................... 173 3,764
Fred's, Inc., Class A.................. 431 1,901
HSN, Inc............................... 386 14,552
Ollie's Bargain Outlet Holdings, Inc.+. 570 25,451
--------
73,273
--------
Retail-Hair Salons -- 0.0%
Regis Corp.+........................... 426 6,360
--------
Retail-Home Furnishings -- 0.6%
Bassett Furniture Industries, Inc...... 7,617 295,540
Haverty Furniture Cos., Inc............ 225 5,366
Kirkland's, Inc.+...................... 183 2,141
La-Z-Boy, Inc.......................... 578 15,577
Pier 1 Imports, Inc.................... 969 4,031
RH+.................................... 238 21,401
--------
344,056
--------
Retail-Jewelry -- 0.0%
Movado Group, Inc...................... 182 5,041
--------
Retail-Leisure Products -- 0.0%
MarineMax, Inc.+....................... 301 5,584
Party City Holdco, Inc.+............... 329 3,668
--------
9,252
--------
Retail-Major Department Stores -- 0.0%
J.C. Penney Co., Inc.+................. 3,715 10,402
Sears Holdings Corp.+.................. 142 782
--------
11,184
--------
Value
Security Description Shares (Note 3)
------------------------------------------------------------
Retail-Misc./Diversified -- 0.2%
Container Store Group, Inc.+............ 192 $ 693
FirstCash, Inc.......................... 568 36,267
Five Below, Inc.+....................... 647 35,746
Gaia, Inc.+............................. 105 1,276
PriceSmart, Inc......................... 265 22,207
----------
96,189
----------
Retail-Office Supplies -- 0.0%
Office Depot, Inc....................... 6,134 19,015
----------
Retail-Pawn Shops -- 0.0%
EZCORP, Inc., Class A+.................. 598 6,130
----------
Retail-Pet Food & Supplies -- 0.0%
Freshpet, Inc.+......................... 293 4,556
PetIQ, Inc.+............................ 83 1,997
PetMed Express, Inc..................... 237 8,380
----------
14,933
----------
Retail-Regional Department Stores -- 0.0%
Dillard's, Inc., Class A................ 181 9,195
----------
Retail-Restaurants -- 1.7%
Biglari Holdings, Inc.+................. 12 4,289
BJ's Restaurants, Inc.+................. 252 7,988
Bloomin' Brands, Inc.................... 1,097 19,505
Bojangles', Inc.+....................... 208 2,548
Brinker International, Inc.............. 589 18,094
Buffalo Wild Wings, Inc.+............... 183 21,631
Carrols Restaurant Group, Inc.+......... 413 4,646
Cheesecake Factory, Inc................. 538 24,070
Chuy's Holdings, Inc.+.................. 199 4,477
Cracker Barrel Old Country Store, Inc... 230 35,910
Dave & Buster's Entertainment, Inc.+.... 504 24,293
Del Frisco's Restaurant Group, Inc.+.... 262 3,642
Del Taco Restaurants, Inc.+............. 395 5,013
Denny's Corp.+.......................... 28,401 371,201
DineEquity, Inc......................... 206 9,808
El Pollo Loco Holdings, Inc.+........... 243 2,794
Fiesta Restaurant Group, Inc.+.......... 309 5,114
Fogo De Chao, Inc.+..................... 113 1,249
Habit Restaurants, Inc., Class A+....... 242 2,977
J Alexander's Holdings, Inc.+........... 154 1,617
Jack in the Box, Inc.................... 348 36,021
Nathan's Famous, Inc.+.................. 34 2,757
Noodles & Co.+.......................... 140 609
Papa John's International, Inc.......... 326 22,184
Potbelly Corp.+......................... 274 3,302
Red Robin Gourmet Burgers, Inc.+........ 154 10,534
Ruby Tuesday, Inc.+..................... 709 1,680
Ruth's Hospitality Group, Inc........... 13,099 276,389
Shake Shack, Inc., Class A+............. 263 9,983
Sonic Corp.............................. 492 12,497
Texas Roadhouse, Inc.................... 802 40,108
Wingstop, Inc........................... 348 11,787
Zoe's Kitchen, Inc.+.................... 229 2,812
----------
1,001,529
----------
Retail-Sporting Goods -- 0.0%
Big 5 Sporting Goods Corp............... 252 1,600
Hibbett Sports, Inc.+................... 255 3,264
64
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
COMMON STOCKS (continued)
Retail-Sporting Goods (continued)
Sportsman's Warehouse Holdings, Inc.+......... 433 $ 1,775
Zumiez, Inc.+................................. 221 3,901
--------
10,540
--------
Retail-Toy Stores -- 0.0%
Build-A-Bear Workshop, Inc.+.................. 163 1,271
--------
Retail-Vitamins & Nutrition Supplements -- 0.0%
GNC Holdings, Inc., Class A................... 812 5,554
Vitamin Shoppe, Inc.+......................... 256 1,178
--------
6,732
--------
Retirement/Aged Care -- 0.0%
Capital Senior Living Corp.+.................. 294 3,910
--------
Rubber-Tires -- 0.0%
Cooper Tire & Rubber Co....................... 636 20,861
--------
Rubber/Plastic Products -- 0.1%
Myers Industries, Inc......................... 277 5,983
Proto Labs, Inc.+............................. 297 25,913
Trinseo SA.................................... 532 37,772
--------
69,668
--------
Satellite Telecom -- 0.1%
Globalstar, Inc.+............................. 5,319 8,564
Intelsat SA+.................................. 434 1,888
Iridium Communications, Inc.+................. 1,004 12,048
Loral Space & Communications, Inc.+........... 154 7,261
--------
29,761
--------
Savings & Loans/Thrifts -- 1.4%
Banc of California, Inc....................... 521 10,967
Bank Mutual Corp.............................. 508 5,372
BankFinancial Corp............................ 173 2,740
Bear State Financial, Inc..................... 248 2,545
Beneficial Bancorp, Inc....................... 829 13,679
Berkshire Hills Bancorp, Inc.................. 459 17,580
BofI Holding, Inc.+........................... 718 19,314
Brookline Bancorp, Inc........................ 899 13,845
BSB Bancorp, Inc.+............................ 100 2,990
Capitol Federal Financial, Inc................ 1,539 21,223
Charter Financial Corp........................ 147 2,818
Clifton Bancorp, Inc.......................... 245 4,172
Community Bankers Trust Corp.+................ 257 2,223
Dime Community Bancshares, Inc................ 379 8,357
Entegra Financial Corp.+...................... 76 2,071
ESSA Bancorp, Inc............................. 106 1,714
First Defiance Financial Corp................. 119 6,450
First Financial Northwest, Inc................ 99 1,646
Flagstar Bancorp, Inc.+....................... 255 9,529
Flushing Financial Corp....................... 333 9,983
Greene County Bancorp, Inc.................... 36 1,076
Hingham Institution for Savings............... 16 3,115
Home Bancorp, Inc............................. 70 2,999
HomeTrust Bancshares, Inc.+................... 200 5,250
Investors Bancorp, Inc........................ 3,106 42,708
Malvern Bancorp, Inc.+........................ 77 2,079
Meridian Bancorp, Inc......................... 573 11,288
Meta Financial Group, Inc..................... 4,018 350,571
Value
Security Description Shares (Note 3)
---------------------------------------------------------------------
Savings & Loans/Thrifts (continued)
MutualFirst Financial, Inc......................... 73 $ 2,825
Northfield Bancorp, Inc............................ 515 8,786
Northwest Bancshares, Inc.......................... 1,134 19,131
OceanFirst Financial Corp.......................... 377 10,462
Oconee Federal Financial Corp...................... 15 450
Oritani Financial Corp............................. 474 8,034
Pacific Premier Bancorp, Inc.+..................... 469 18,948
Provident Financial Holdings, Inc.................. 74 1,430
Provident Financial Services, Inc.................. 739 20,101
Prudential Bancorp, Inc............................ 97 1,770
Riverview Bancorp, Inc............................. 230 2,042
SI Financial Group, Inc............................ 134 2,010
Southern Missouri Bancorp, Inc..................... 70 2,585
Sterling Bancorp................................... 2,553 63,953
Territorial Bancorp, Inc........................... 92 2,906
Timberland Bancorp, Inc............................ 75 2,273
United Community Financial Corp.................... 587 5,418
United Financial Bancorp, Inc...................... 606 11,096
Washington Federal, Inc............................ 1,037 36,088
Waterstone Financial, Inc.......................... 306 5,875
WSFS Financial Corp................................ 362 17,991
--------
822,478
--------
Schools -- 0.2%
Adtalem Global Education, Inc...................... 745 27,528
American Public Education, Inc.+................... 189 3,780
Bridgepoint Education, Inc.+....................... 221 2,139
Cambium Learning Group, Inc.+...................... 166 1,016
Capella Education Co............................... 138 11,240
Career Education Corp.+............................ 810 8,651
Grand Canyon Education, Inc.+...................... 562 50,304
K12, Inc.+......................................... 408 6,618
Laureate Education, Inc., Class A+................. 426 5,696
Strayer Education, Inc............................. 127 11,904
--------
128,876
--------
Security Services -- 0.1%
Alarm.com Holdings, Inc.+.......................... 243 11,343
Ascent Capital Group, Inc., Class A+............... 132 1,485
Brink's Co......................................... 549 41,779
--------
54,607
--------
Seismic Data Collection -- 0.0%
Geospace Technologies Corp.+....................... 157 2,358
--------
Semiconductor Components-Integrated Circuits -- 0.2%
Cirrus Logic, Inc.+................................ 773 43,288
Integrated Device Technology, Inc.+................ 1,605 49,867
MaxLinear, Inc.+................................... 721 17,643
Power Integrations, Inc............................ 344 27,640
Sigma Designs, Inc.+............................... 449 2,717
--------
141,155
--------
Semiconductor Equipment -- 1.6%
Amtech Systems, Inc.+.............................. 22,520 327,891
Axcelis Technologies, Inc.+........................ 360 11,844
Brooks Automation, Inc............................. 824 28,337
Cabot Microelectronics Corp........................ 298 28,808
Cohu, Inc.......................................... 322 8,308
Entegris, Inc...................................... 1,702 55,740
65
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
-----------------------------------------------------------------
COMMON STOCKS (continued)
Semiconductor Equipment (continued)
FormFactor, Inc.+............................... 18,753 $341,305
MKS Instruments, Inc............................ 646 70,188
Nanometrics, Inc.+.............................. 288 8,142
Photronics, Inc.+............................... 801 7,770
Rudolph Technologies, Inc.+..................... 374 10,378
Ultra Clean Holdings, Inc.+..................... 394 10,055
Veeco Instruments, Inc.+........................ 565 10,198
Xcerra Corp.+................................... 641 6,314
--------
925,278
--------
Silver Mining -- 0.0%
Hecla Mining Co................................. 4,721 22,283
--------
Specified Purpose Acquisitions -- 0.0%
Wins Finance Holdings, Inc.+(1)(2).............. 15 0
--------
Steel Pipe & Tube -- 0.1%
Advanced Drainage Systems, Inc.................. 423 8,270
Atkore International Group, Inc.+............... 393 7,589
Mueller Water Products, Inc., Class A........... 1,846 22,041
Northwest Pipe Co.+............................. 114 2,079
Omega Flex, Inc................................. 35 2,257
TimkenSteel Corp.+.............................. 475 6,650
--------
48,886
--------
Steel-Producers -- 0.2%
AK Steel Holding Corp.+......................... 3,778 17,341
Carpenter Technology Corp....................... 555 27,633
Commercial Metals Co............................ 1,385 26,980
Ryerson Holding Corp.+.......................... 192 1,690
Schnitzer Steel Industries, Inc., Class A....... 317 9,336
Shiloh Industries, Inc.+........................ 104 965
--------
83,945
--------
Steel-Specialty -- 0.1%
Allegheny Technologies, Inc.+................... 1,302 32,784
--------
Storage/Warehousing -- 0.0%
Mobile Mini, Inc................................ 526 17,411
Wesco Aircraft Holdings, Inc.+.................. 668 6,045
--------
23,456
--------
SupraNational Banks -- 0.0%
Banco Latinoamericano de Comercio Exterior SA,
Class E........................................ 363 10,175
--------
Telecom Equipment-Fiber Optics -- 0.2%
Acacia Communications, Inc.+.................... 221 9,351
Ciena Corp.+.................................... 1,690 35,946
Clearfield, Inc.+............................... 139 1,904
Finisar Corp.+.................................. 1,336 31,449
Harmonic, Inc.+................................. 950 3,515
KVH Industries, Inc.+........................... 186 2,148
Oclaro, Inc.+................................... 1,984 16,408
Viavi Solutions, Inc.+.......................... 2,742 25,446
--------
126,167
--------
Telecom Services -- 1.5%
Consolidated Communications Holdings, Inc....... 783 15,010
GTT Communications, Inc.+....................... 12,560 457,812
Hawaiian Telcom Holdco, Inc.+................... 72 2,171
Value
Security Description Shares (Note 3)
---------------------------------------------------------------------
Telecom Services (continued)
HC2 Holdings, Inc.+................................ 488 $ 2,650
Lumos Networks Corp.+.............................. 263 4,723
Ooma, Inc.+........................................ 203 2,132
ORBCOMM, Inc.+..................................... 784 8,867
RigNet, Inc.+...................................... 158 2,757
Spok Holdings, Inc................................. 244 4,136
Straight Path Communications, Inc., Class B+....... 117 21,237
Vonage Holdings Corp.+............................. 42,072 342,045
--------
863,540
--------
Telecommunication Equipment -- 0.1%
ADTRAN, Inc........................................ 582 12,280
Comtech Telecommunications Corp.................... 275 5,915
Plantronics, Inc................................... 399 18,099
Preformed Line Products Co......................... 37 2,631
Sonus Networks, Inc.+.............................. 568 4,431
--------
43,356
--------
Telephone-Integrated -- 0.1%
Cincinnati Bell, Inc.+............................. 503 9,607
Frontier Communications Corp....................... 942 11,408
General Communication, Inc., Class A+.............. 319 13,044
IDT Corp., Class B................................. 208 2,741
Shenandoah Telecommunications Co................... 556 21,128
Windstream Holdings, Inc........................... 2,283 4,292
--------
62,220
--------
Television -- 0.1%
Central European Media Enterprises, Ltd., Class A+. 987 4,540
Gray Television, Inc.+............................. 767 11,942
Nexstar Media Group, Inc., Class A................. 544 34,707
Sinclair Broadcast Group, Inc., Class A............ 865 27,421
--------
78,610
--------
Textile-Apparel -- 0.0%
Perry Ellis International, Inc.+................... 153 3,564
Unifi, Inc.+....................................... 184 7,001
--------
10,565
--------
Textile-Products -- 0.0%
Culp, Inc.......................................... 130 4,121
--------
Theaters -- 0.0%
AMC Entertainment Holdings, Inc., Class A.......... 661 9,188
National CineMedia, Inc............................ 741 4,987
Reading International, Inc., Class A+.............. 202 3,161
--------
17,336
--------
Therapeutics -- 1.3%
Akebia Therapeutics, Inc.+......................... 531 9,638
Anika Therapeutics, Inc.+.......................... 172 9,396
Calithera Biosciences, Inc.+....................... 367 5,909
Cara Therapeutics, Inc.+........................... 320 4,013
Concert Pharmaceuticals, Inc.+..................... 215 3,666
Dyax Corp. CVR+(1)(2).............................. 1,907 6,015
Flexion Therapeutics, Inc.+........................ 12,752 280,671
G1 Therapeutics, Inc.+............................. 93 2,197
La Jolla Pharmaceutical Co.+....................... 209 7,181
Mersana Therapeutics, Inc.+........................ 57 927
Portola Pharmaceuticals, Inc.+..................... 654 32,314
Recro Pharma, Inc.+................................ 37,817 326,361
66
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
-------------------------------------------------------------
COMMON STOCKS (continued)
Therapeutics (continued)
Sarepta Therapeutics, Inc.+................ 708 $ 34,911
Xencor, Inc.+.............................. 456 9,020
--------
732,219
--------
Tobacco -- 0.1%
Turning Point Brands, Inc.+................ 60 1,050
Universal Corp............................. 296 16,976
Vector Group, Ltd.......................... 1,176 24,437
--------
42,463
--------
Transactional Software -- 0.1%
ACI Worldwide, Inc.+....................... 1,396 33,616
Bottomline Technologies de, Inc.+.......... 476 15,498
InnerWorkings, Inc.+....................... 542 5,897
Synchronoss Technologies, Inc.+............ 511 5,790
--------
60,801
--------
Transport-Air Freight -- 0.1%
Air Transport Services Group, Inc.+........ 697 16,867
Atlas Air Worldwide Holdings, Inc.+........ 279 17,117
--------
33,984
--------
Transport-Equipment & Leasing -- 0.1%
GATX Corp.................................. 468 27,804
Greenbrier Cos., Inc....................... 328 17,121
Willis Lease Finance Corp.+................ 41 1,029
--------
45,954
--------
Transport-Marine -- 0.2%
Ardmore Shipping Corp.+.................... 336 2,789
Costamare, Inc............................. 438 2,720
DHT Holdings, Inc.......................... 924 3,640
Dorian LPG, Ltd.+.......................... 226 1,616
Eagle Bulk Shipping, Inc.+................. 460 2,162
Frontline, Ltd............................. 922 5,615
GasLog, Ltd................................ 489 8,435
Genco Shipping & Trading, Ltd.+............ 92 1,105
Gener8 Maritime, Inc.+..................... 565 2,605
Golar LNG, Ltd............................. 1,151 24,321
International Seaways, Inc.+............... 352 7,089
Navios Maritime Acquisition Corp........... 988 1,235
Navios Maritime Holdings, Inc.+............ 1,075 1,956
Nordic American Tankers, Ltd............... 1,197 5,315
Overseas Shipholding Group, Inc., Class A+. 542 1,284
Safe Bulkers, Inc.+........................ 576 2,045
Scorpio Bulkers, Inc.+..................... 703 5,624
Scorpio Tankers, Inc....................... 2,503 8,911
Ship Finance International, Ltd............ 717 10,683
Teekay Corp................................ 647 5,241
Teekay Tankers, Ltd., Class A.............. 1,461 2,162
--------
106,553
--------
Transport-Services -- 0.4%
Echo Global Logistics, Inc.+............... 330 7,937
Hub Group, Inc., Class A+.................. 391 16,930
Matson, Inc................................ 513 13,969
Radiant Logistics, Inc.+................... 37,705 184,000
--------
222,836
--------
Value
Security Description Shares (Note 3)
----------------------------------------------------------------
Transport-Truck -- 0.9%
ArcBest Corp.................................. 310 $ 10,106
Covenant Transportation Group, Inc., Class A+. 142 4,217
Daseke, Inc.+................................. 24,415 337,660
Forward Air Corp.............................. 360 20,679
Heartland Express, Inc........................ 566 12,073
Knight-Swift Transportation Holdings, Inc.+... 1,503 62,299
Marten Transport, Ltd......................... 466 9,157
Roadrunner Transportation Systems, Inc.+...... 366 3,221
Saia, Inc.+................................... 303 19,634
Schneider National, Inc., Class B............. 390 10,214
Universal Logistics Holdings, Inc............. 100 2,160
Werner Enterprises, Inc....................... 571 20,356
YRC Worldwide, Inc.+.......................... 396 5,334
--------
517,110
--------
Travel Services -- 0.0%
Liberty TripAdvisor Holdings, Inc., Class A+.. 870 9,396
--------
Venture Capital -- 0.0%
Safeguard Scientifics, Inc.+.................. 243 3,426
--------
Veterinary Diagnostics -- 0.7%
Heska Corp.+.................................. 3,471 338,422
Kindred Biosciences, Inc.+.................... 252 1,877
Neogen Corp.+................................. 444 35,609
Phibro Animal Health Corp., Class A........... 227 8,547
--------
384,455
--------
Vitamins & Nutrition Products -- 0.0%
Natural Grocers by Vitamin Cottage, Inc.+..... 108 530
Natural Health Trends Corp.................... 88 1,695
Nature's Sunshine Products, Inc............... 129 1,277
Omega Protein Corp............................ 264 5,782
USANA Health Sciences, Inc.+.................. 139 9,132
--------
18,416
--------
Water -- 0.2%
American States Water Co...................... 435 23,381
Artesian Resources Corp., Class A............. 94 3,818
California Water Service Group................ 575 24,150
Connecticut Water Service, Inc................ 132 8,187
Consolidated Water Co., Ltd................... 175 2,152
Global Water Resources, Inc................... 121 1,139
Middlesex Water Co............................ 190 8,261
SJW Group..................................... 196 11,625
York Water Co................................. 154 5,421
--------
88,134
--------
Water Treatment Systems -- 0.3%
AquaVenture Holdings, Ltd.+................... 139 1,692
Energy Recovery, Inc.+........................ 434 3,346
Pure Cycle Corp.+............................. 21,605 164,198
--------
169,236
--------
Web Hosting/Design -- 0.1%
Endurance International Group Holdings, Inc.+. 695 5,699
NIC, Inc...................................... 768 13,056
Q2 Holdings, Inc.+............................ 375 15,956
Web.com Group, Inc.+.......................... 460 11,086
--------
45,797
--------
67
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
Value
Security Description Shares (Note 3)
---------------------------------------------------------
COMMON STOCKS (continued)
Web Portals/ISP -- 0.5%
Blucora, Inc.+...................... 13,020 $ 282,534
Meet Group, Inc.+................... 802 2,719
-----------
285,253
-----------
Wire & Cable Products -- 0.1%
Belden, Inc......................... 504 40,275
Encore Wire Corp.................... 243 10,971
General Cable Corp.................. 590 12,360
Insteel Industries, Inc............. 218 5,570
-----------
69,176
-----------
Wireless Equipment -- 1.0%
Aerohive Networks, Inc.+............ 376 1,489
CalAmp Corp.+....................... 22,099 502,310
Gogo, Inc.+......................... 683 6,789
InterDigital, Inc................... 415 30,440
Quantenna Communications, Inc.+..... 253 3,919
Telenav, Inc.+...................... 366 2,361
Ubiquiti Networks, Inc.+............ 277 17,224
ViaSat, Inc.+....................... 638 41,534
-----------
606,066
-----------
X-Ray Equipment -- 0.0%
Varex Imaging Corp.+................ 451 15,501
ViewRay, Inc.+...................... 350 2,411
-----------
17,912
-----------
Total Common Stocks
(cost $45,670,864)................. 56,082,731
-----------
EXCHANGE-TRADED FUNDS -- 2.5%
iShares Russell 2000 ETF............ 5,014 748,390
Vanguard Russell 2000 ETF........... 5,700 683,259
-----------
Total Exchange-Traded Funds
(cost $1,395,017).................. 1,431,649
-----------
Total Long-Term Investment Securities
(cost $47,065,881)................. 57,514,380
-----------
Principal Value
Security Description Amount (Note 3)
--------------------------------------------------------------------------
SHORT-TERM INVESTMENT SECURITIES -- 2.1%
Time Deposits -- 2.1%
Euro Time Deposit with State Street Bank and
Trust Co.
0.12% due 11/01/2017
(cost $1,261,000).............................. $1,261,000 $ 1,261,000
-----------
REPURCHASE AGREEMENTS -- 1.1%
Agreement with Fixed Income Clearing Corp.,
bearing interest at 0.12%, dated 10/31/2017,
to be repurchased 11/01/2017 in the amount
of $670,002 and collateralized by $615,000 of
United States Treasury Bonds, bearing
interest at 3.38%, due 05/15/2044 and having
an approximate value of $684,423
(cost $670,000)................................ 670,000 670,000
-----------
TOTAL INVESTMENTS
(cost $48,996,881)(3).......................... 101.5% 59,445,380
Liabilities in excess of other assets............. (1.5) (887,496)
---------- -----------
NET ASSETS 100.0% $58,557,884
========== ===========
--------
# See Note 1
+ Non-income producing security
(1)Security classified as Level 3 (see Note 3)
(2)Illiquid security. At October 31, 2017, the aggregate value of these
securities was $6,015 representing 0.0% of net assets.
(3)See Note 6 for cost of investments on a tax basis.
CVR -- Contingent Value Rights
68
SunAmerica Specialty Series -- AIG Small-Cap Fund#
PORTFOLIO OF INVESTMENTS -- October 31, 2017 -- (continued)
The following is a summary of the inputs used to value the Fund's net assets as
of October 31, 2017 (see Note 3):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- -----------
ASSETS:
Investments at Value:*
Common Stocks:........................
Medical-Biomedical/Gene.............. $ 2,249,578 $ -- $ 0 $ 2,249,578
Medical-Drugs........................ 1,872,010 -- 0 1,872,010
Metal-Diversified.................... -- -- 0 0
Multimedia........................... 28,638 -- 0 28,638
Specified Purpose Acquisitions....... -- -- 0 0
Therapeutics......................... 726,204 -- 6,015 732,219
Other Industries..................... 51,200,286 -- -- 51,200,286
Exchange-Traded Funds................. 1,431,649 -- -- 1,431,649
Short-Term Investments Securities..... -- 1,261,000 -- 1,261,000
Repurchase Agreements................. -- 670,000 -- 670,000
----------- ---------- ------ -----------
Total Investments at Value............ $57,508,365 $1,931,000 $6,015 $59,445,380
=========== ========== ====== ===========
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no material transfers between Levels during the
reporting period.
At the beginning and end of the reporting period, Level 3 investments in
securities were not considered a material portion of the Fund.
See Notes to Financial Statements
69
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017
Note 1. Organization
SunAmerica Specialty Series (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company and is organized as a Delaware Statutory Trust. The Trust
consists of seven different investment funds (each a "Fund" and
collectively, the "Funds") as of October 31, 2017. Each Fund is managed by
SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"). An
investor may invest in one or more of the following Funds: AIG Commodity
Strategy Fund (the "Commodity Strategy Fund"), AIG ESG Dividend Fund (the
"ESG Dividend Fund"), AIG Focused Alpha Large-Cap Fund (the "Focused Alpha
Large-Cap Fund"), AIG Focused Multi-Cap Growth Fund (the "Focused Multi-Cap
Growth Fund"), AIG Global Trends Fund (the "Global Trends Fund"), AIG Income
Explorer Fund (the "Income Explorer Fund") and AIG Small-Cap Fund ("the
Small-Cap Fund").
Effective February 28, 2017, the names of the SunAmerica Commodity Strategy
Fund, SunAmerica Focused Alpha Large-Cap Fund, SunAmerica Focused Alpha
Growth Fund, SunAmerica Global Trends Fund, SunAmerica Income Explorer Fund
and SunAmerica Small-Cap Fund changed to AIG Commodity Strategy Fund, AIG
Focused Alpha Large-Cap Fund, AIG Focused Multi-Cap Growth Fund, AIG Global
Trends Fund, AIG Income Explorer Fund and AIG Small-Cap Fund, respectively.
The Funds are considered to be separate entities for financial and tax
reporting purposes. The investment objective and principal investment
techniques for each Fund are as follows:
The Commodity Strategy Fund seeks to provide long-term total return through
a strategy that is designed to provide diversified exposure to the
commodities markets. The Fund seeks to achieve its investment goal by
investing its assets in a combination of commodity-linked derivative
instruments and fixed income securities.
The ESG Dividend Fund seeks to provide total return including capital
appreciation and current income, employing a "buy and hold" strategy with up
to forty dividend yielding equity securities selected annually from the
Russell 1000(R) Index that meet the Fund's ESG standards.
The Focused Alpha Large-Cap Fund seeks to provide growth of capital through
active trading of equity securities to achieve a blend of growth companies,
value companies and companies that have elements of growth and value, issued
by large-cap companies. Under normal market conditions, the Fund will invest
at least 80% of its net assets, plus any borrowing for investment purposes,
in large-cap companies.
The Focused Multi-Cap Growth Fund seeks to provide growth of capital through
active trading of equity securities of large, small and mid-cap companies.
The Global Trends Fund seeks to provide capital appreciation by utilizing an
actively managed, rules based investment process to allocate assets across a
diversified, broad-based spectrum of asset classes, including the global
equity and fixed income markets, currencies and commodities.
The Income Explorer Fund seeks to provide high current income with a
secondary objective of capital appreciation primarily by strategically
allocating its assets among a preferred securities strategy, closed-end fund
strategy and global dividend equity strategy. Through this combination of
investments, the Fund expects to gain exposure to a broad range of
income-producing investments, including both fixed income and equity
securities.
The Small-Cap Fund seeks to provide long-term growth of capital by
strategically allocating its assets between a small-cap index strategy and a
micro-cap growth strategy.
Each Fund, except for the Focused Alpha Large-Cap Fund and Focused Multi-Cap
Growth Fund, is a "diversified" Fund within the meaning of the 1940 Act.
70
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Each Fund offers multiple classes of shares of beneficial interest. The
classes within each Fund are presented in the Statement of Assets and
Liabilities. The cost structure for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, any purchases of Class A shares in excess of
$1,000,000 will be purchased at net asset value but will be subject to a
contingent deferred sales charge on redemptions made within two years of
purchase.
Class C shares are offered at net asset value and may be subject to a
contingent deferred sales charge on redemptions made within 12 months of
purchase.
Class W shares are offered at net asset value per share. The class is
offered exclusively through advisory fee-based programs sponsored by certain
financial intermediaries and other programs.
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions, except as may otherwise be provided in the Funds'
registration statement. Class A and Class C shares make distribution and
account maintenance fee payments under a distribution plan pursuant to Rule
12b-1 under the 1940 Act, with Class C shares being subject to higher
distribution fee rates. Class W shares have not adopted 12b-1 Plans and make
no payments thereunder, however, Class W shares pay a service fee to the
Funds' distributor for administrative and shareholder services.
Indemnifications: The Trust's organizational documents provide current and
former officers and trustees with a limited indemnification against
liabilities arising out of the performance of their duties to the Trust. In
addition, pursuant to Indemnification Agreements between the Trust and each
of the current trustees who is not an "interested person," as defined in
Section 2(a)(19) of the 1940 Act, of the Trust (collectively, the
"Disinterested Trustees"), the Trust provides the Disinterested Trustees
with a limited indemnification against liabilities arising out of the
performance of their duties to the Trust, whether such liabilities are
asserted during or after their service as trustees. In addition, in the
normal course of business the Trust enters into contracts that contain the
obligation to indemnify others. The Trust's maximum exposure under these
arrangements is unknown. Currently, however, the Trust expects the risk of
loss to be remote.
Note 2. Basis for consolidation for the SunAmerica Commodity Strategy Cayman
Fund Ltd. and SunAmerica Global Trends Cayman Fund Ltd.
The AIG Commodity Strategy Cayman Fund Ltd. (the "Commodity Strategy
Subsidiary"), a Cayman Islands exempted company, was incorporated on
October 20, 2008, and is a wholly-owned subsidiary of the Commodity Strategy
Fund. The Commodity Strategy Subsidiary commenced operations on May 22, 2009
and was organized as a wholly-owned subsidiary of the Commodity Strategy
Fund in order to effect certain investments on behalf of the Commodity
Strategy Fund consistent with the investment objectives and policies in the
Commodity Strategy Fund's prospectus and statement of additional
information. With respect to its investments, the Commodity Strategy
Subsidiary will generally be subject to the same fundamental,
non-fundamental and certain other investment restrictions as the Commodity
Strategy Fund; however, the Commodity Strategy Subsidiary (unlike the
Commodity Strategy Fund) may invest without limitation in commodity-linked
swap agreements and other commodity-linked derivative instruments that may
otherwise be limited if purchased by the Commodity Strategy Fund due to
federal tax requirements relating to qualifying income. The Commodity
Strategy Fund and Commodity Strategy Subsidiary may test for compliance with
certain investment restrictions on a consolidated basis, except that with
respect to its investment in certain securities that may involve leverage,
the Commodity Strategy Subsidiary will comply with asset segregation or
"earmarking" requirements to the same extent as the Commodity Strategy Fund.
The Commodity Strategy Fund may invest up to 25% of its assets in the
Commodity Strategy Subsidiary. As of October 31, 2017, net assets of the
Commodity Strategy Fund were $39,420,898, of which approximately $7,404,947,
or approximately 18.8%, represented the Commodity Strategy Fund's ownership
of all issued shares and voting rights of the Commodity Strategy Subsidiary.
The AIG Global Trends Cayman Fund Ltd. (the "Global Trends Subsidiary"), a
Cayman Islands exempted company, was incorporated on March 17, 2011, and is
a wholly-owned subsidiary of the Global Trends Fund. The Global Trends
Subsidiary commenced operations on June 17, 2011 and was organized as a
wholly-owned subsidiary of the Global Trends Fund in order to effect certain
investments on behalf of the Global Trends Fund consistent with the
investment objectives and policies in the
71
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Global Trends Fund's prospectus and statement of additional information.
With respect to its investments, the Global Trends Subsidiary will generally
be subject to the same fundamental, non-fundamental and certain other
investment restrictions as the Global Trends Fund; however, the Global
Trends Subsidiary (unlike the Global Trends Fund) may invest without
limitation in commodity-linked instruments that may otherwise be limited if
purchased by the Global Trends Fund due to federal tax requirements relating
to qualifying income. The Global Trends Fund and Global Trends Subsidiary
may test for compliance with certain investment restrictions on a
consolidated basis, except that with respect to its investment in certain
securities that may involve leverage, the Global Trends Subsidiary will
comply with asset segregation or "earmarking" requirements to the same
extent as the Global Trends Fund. The Global Trends Fund may invest up to
25% of its assets in the Global Trends Subsidiary. As of October 31, 2017,
net assets of the Global Trends Fund were $36,572,995, of which
approximately $7,503,250, or approximately 20.5%, represented the Global
Trends Fund's ownership of all issued shares and voting rights of the Global
Trends Subsidiary.
Note 3. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those
estimates and those differences could be significant. The following is a
summary of significant accounting policies consistently followed by the
Trust in the preparation of its financial statements:
Security Valuation: In accordance with the authoritative guidance on fair
value measurements and disclosures under GAAP, the Funds disclose the fair
value of their investments in a hierarchy that prioritizes the inputs to
valuation techniques used to measure the fair value. In accordance with
GAAP, fair value is defined as the price that the Funds would receive upon
selling an asset or transferring a liability in a timely transaction to an
independent third party in the principal or most advantageous market. GAAP
establishes a three-tier hierarchy to provide more transparency around the
inputs used to measure fair value and to establish classification of fair
value measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk. Inputs may be observable or
unobservable. Observable inputs are inputs that reflect the assumptions
market participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the reporting
entity. Unobservable inputs are inputs that reflect the reporting entity's
own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
referenced indices, quoted prices in inactive markets, adjusted quoted
prices in active markets, adjusted quoted prices
on foreign equity securities that were adjusted in accordance with pricing
procedures approved by the Board of Trustees (the "Board") , etc.)
Level 3 -- Significant unobservable inputs (includes inputs that reflect the
Funds' own assumptions about the assumptions market participants would use
in pricing the security, developed based on the best information available
under the circumstances)
Changes in valuation techniques may result in transfers in or out of an
investment's assigned Level within the hierarchy. The methodology used for
valuing investments is not necessarily an indication of the risk associated
with investing in those investments and the determination of the
significance of a particular input to the fair value measurement in its
entirety requires judgment and consideration of factors specific to each
security.
The availability of observable inputs can vary from security to security and
is affected by a wide variety of factors, including, for example, the type
of security, whether the security is recently issued and not yet established
in the marketplace, the liquidity of markets, and other characteristics
particular to the security. To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree
of judgment exercised in determining fair value is greatest for instruments
categorized in Level 3.
The summary of the Funds' assets and liabilities classified in the fair
value hierarchy as of October 31, 2017 is reported on a schedule following
each Fund's Portfolio of Investments.
72
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, the
Funds use the exchange that is the primary market for the security. Such
securities are generally categorized as Level 1. However, depending on the
foreign market, closing prices may be up to 15 hours old when they are used
to price a Fund's shares, and a Fund may determine that certain closing
prices do not reflect the fair value of the security. This determination
will be based on the review of a number of factors, including developments
in foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign
securities and baskets of foreign securities. If a Fund determines that
closing prices do not reflect the fair value of the securities, the Fund
will adjust the previous closing prices in accordance with pricing
procedures approved by the Board to reflect what it believes to be the fair
value of the securities as of the close of regular trading on the NYSE. The
Funds may also fair value securities in other situations, for example, when
a particular foreign market is closed but a Fund is open. For foreign equity
securities and foreign equity futures contracts, the Funds use an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices, and when so adjusted, such securities and
futures are generally categorized as Level 2.
Bonds, debentures and other debt securities are valued at evaluated bid
prices obtained for the day of valuation from a Board-approved pricing
service and are generally categorized as Level 2. The pricing services may
use valuation models or matrix pricing which considers information with
respect to comparable bond and note transactions, quotations from bond
dealers, or by reference to other securities that are considered comparable
in such characteristics as rating, interest rate, maturity date, option
adjusted spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, the securities may be priced at the mean of
two independent quotes obtained from brokers.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the last sales price or official closing price as of the close of the
customary trading session on the exchange where the security is principally
traded. Investments in registered investment companies are generally
categorized as Level 1.
Futures contracts traded on national securities exchanges are valued at the
quoted daily settlement price established by the exchange on which they
trade reported by a Board-approved pricing service, and are generally
categorized as Level 1. Option contracts traded on national securities
exchanges are valued at the mean of the last bid and ask price reported by a
Board-approved pricing service as of the close of the exchange on which they
are traded, and are generally categorized as Level 1.
Option contracts traded in the over-the-counter ("OTC") market are valued at
the mid valuation provided by a Board-approved pricing service, and are
generally categorized as Level 2. Swap contracts traded on national
securities exchanges are valued at the closing price of the exchange on
which they are traded or if a closing price of the exchange is not
available, the swap will be valued using a mid valuation provided by a
Board-approved pricing service, and are generally categorized as Level 2.
Swap contracts traded over the counter are valued at a mid valuation
provided by a Board-approved pricing service, and are generally categorized
as Level 2. Forward foreign currency contracts ("forward contracts") are
valued at the 4:00 p.m. Eastern Time forward rate and are generally
categorized as Level 2.
Other securities are valued on the basis of last sale or bid price (if a
last sale price is not available) which is, in the opinion of the Adviser,
the broadest and most representative market, that may be either a securities
exchange or OTC market, and are generally categorized as Level 1 or Level 2.
73
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
The Board is responsible for the share valuation process and has adopted
policies and procedures (the "PRC Procedures") for valuing the securities
and other assets held by the Funds, including procedures for the fair
valuation of securities and other assets for which market quotations are not
readily available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the Trust's
fair valuation procedures. Securities for which market quotations are not
readily available or the values of which may be significantly impacted by
the occurrence of developments or significant events are generally
categorized as Level 3. There is no single standard for making fair value
determinations, which may result in prices that vary from those of other
funds.
Derivative Instruments:
Futures: During the period, the Commodity Strategy Fund entered into futures
transactions for investment purposes in order to provide exposure to
commodities. The Global Trends Fund entered into futures transactions for
investment purposes in order to provide exposure to U.S. and non-U.S. equity
markets, U.S. and non-U.S. fixed income and commodities markets.
A futures contract is an agreement between two parties to buy and sell a
financial instrument at a set price on a future date. Upon entering into a
futures transaction, a Fund will be required to segregate an initial margin
payment of cash or other liquid securities with the futures commission
merchant (the "broker"). Subsequent payments are made or received by a Fund
as a result of changes in the value of the contract and/or changes in the
value of the initial margin requirement. Such receipts or payments are
recorded in the Statements of Assets and Liabilities as variation margin for
changes in the value of the contract and cash collateral for futures
contracts for the changes in the value of the initial margin requirement.
When a contract is closed, a Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened
and the value at the time it was closed.
The primary risk to a Fund of entering into futures contracts is market
risk. Market risk is the risk that there will be an unfavorable change in
the interest rate, value or currency rate of the underlying security or
securities. Futures contracts involve, to varying degrees, risk of loss in
excess of the variation margin. There may also be trading restrictions or
limitations imposed by an exchange, and government regulations may restrict
trading in futures contracts. While a Fund will generally only purchase
exchange-traded futures, due to market conditions, there may not always be a
liquid secondary market for a futures contract and, as a result, the Fund
may be unable to close out its futures contracts at a time which is
advantageous. In addition, if a Fund has insufficient cash to meet margin
requirements, the Fund may need to sell other investments, including at
disadvantageous times. There is generally minimal counterparty credit risk
to a Fund since exchange-traded futures contracts are centrally cleared.
Futures contracts outstanding at the end of the period, if any, are reported
on a schedule following each Fund's Portfolio of Investments.
Forward Foreign Currency Contracts: During the period, the Global Trends
Fund and the Income Explorer Fund used forward contracts for investment
purposes in order to gain currency exposure.
A forward contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the forward rate and the cumulative change in
market value is recorded by a Fund as unrealized appreciation or
depreciation. On the settlement date, a Fund records either realized gains
or losses equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
For federal income tax purposes, the Income Explorer Fund has made an
election to treat gains and losses from forward foreign currency contracts
as capital gains and losses.
Risks to a Fund of entering into forward contracts include counterparty
risk, market risk and illiquidity risk. Counterparty risk arises upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts. If the counterparty defaults, a Fund's
loss will generally consist of the net amount of contractual payments that
the Fund has not yet received though the Fund's maximum exposure due to
counterparty risk could extend to the notional amount of the contract.
Market risk is the risk that the value of the forward contract will
depreciate due to unfavorable changes in the exchange rates.
74
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
These contracts may involve market risk in excess of the unrealized
appreciation or depreciation reported on the Statement of Assets and
Liabilities. Illiquidity risk arises because the secondary market for
forwards may have less liquidity relative to markets for other securities.
Currency transactions are also subject to risks different from those of
other portfolio transactions. Because currency control is of great
importance to the issuing governments and influences economic planning and
policy, purchases and sales of currency and related instruments can be
adversely affected by government exchange controls, limitations or
restrictions on repatriation of currency, and manipulations or exchange
restrictions imposed by governments.
Forward foreign currency contracts outstanding at the end of the period, if
any, are reported on a schedule following each Fund's Portfolio of
Investments.
Options: During the period, the Commodity Strategy Fund used options
contracts to provide exposure to commodities.
An option is a contract conveying a right to buy or sell a financial
instrument at a specified price during a stipulated period. When a Fund
writes a call or a put option, it receives a premium which is equal to the
current market value of the option written. The premiums on written options
are recorded as a liability on the Statement of Assets and Liabilities. If a
Fund purchases a call or a put option, it pays a premium which reflects the
current market value of the option and which is included on the Fund's
Statement of Assets and Liabilities as an investment. The option position is
marked to market daily and its value fluctuates based upon the value of the
underlying financial instrument, time to expiration, cost of borrowing
funds, and volatility of the value of the underlying financial instrument.
If an option which a Fund has written either expires on its stipulated
expiration date, or if the Fund enters into a closing purchase transaction,
the Fund realizes a gain (or loss if the cost of a closing purchase
transaction exceeds the premium received when the option was written)
without regard to any unrealized gain or loss on the underlying security,
and the liability related to such options is extinguished. If a call option
which a Fund has written is exercised, the Fund realizes a gain or loss from
the sale of the underlying security and the proceeds from such sale are
increased by the premium originally received. If a put option which a Fund
has written is exercised, the amount of the premium originally received
reduces the cost of the security which the Fund purchased upon exercise of
the option. Options may be traded on a national securities exchange or in
the OTC market.
Risks to the Funds of entering into option contracts include counterparty
risk, market risk and, with respect to OTC options, illiquidity risk.
Counterparty risk arises from the potential inability of counterparties to
meet the terms of their contracts. If the counterparty defaults, the Fund's
loss will consist of the net amount of contractual payments that the Fund
has not yet received. Market risk is the risk that there will be an
unfavorable change in the value of the underlying securities. There is also
the risk a Fund may not be able to enter into a closing transaction because
of an illiquid market. In addition, unlisted options are not traded on an
exchange and may not be as actively traded as listed options, making the
valuation of such securities more difficult. An unlisted option also entails
a greater risk that the party on the other side of the option transaction
may default, which would make it impossible to close out an unlisted option
position in some cases, and profits related to the transaction lost thereby.
Option contracts outstanding at the end of the period, if any, are reported
on a schedule following each Fund's Portfolio of Investments.
Swap Contracts: Certain Funds may enter into credit default, interest rate
and/or total return swap contracts. Swap contracts are privately negotiated
in the OTC market and may be entered into as a bilateral contract or a
centrally cleared contract ("centrally cleared swaps"). In a centrally
cleared swap, immediately following execution of the swap contract, the swap
contract is novated to a central counterparty (the "CCP") and a Fund faces
the CCP through a broker. Upon entering into a centrally cleared swap, a
Fund is required to deposit initial margin with the broker in the form of
cash or securities in an amount that varies depending on the size and risk
profile of the particular swap. Securities deposited as initial margin are
designated on the Portfolio of Investments and cash deposited is recorded on
the Statement of Assets and Liabilities as cash collateral for centrally
cleared swap contracts. Unlike a bilateral swap contract, for centrally
cleared swaps, a Fund has no credit exposure to the counterparty as the CCP
stands between the Fund and the counterparty. Swaps are marked-to-market
daily and the changes in value are recorded as an unrealized gain (loss).
The daily change in valuation of swap contracts, if any, is recorded as
unrealized appreciation (depreciation) on swap contracts. When the swap is
terminated, a Fund will record a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction
and the Fund's basis in the contract, if any. Generally, the basis of the
contracts is the premium received or paid. Upfront payments and receipts on
swap contracts are amortized on a daily basis. Net periodic payments made or
received by a Fund are included as part of realized gain (loss).
75
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Total Return Swaps: During the period, the Commodity Strategy Fund used
total return swaps, including swaps on futures, for investment purposes in
order to provide exposure to commodities.
Total return swaps give a Fund the right to receive the appreciation in the
value of a specified security, index or other instrument in return for a fee
paid to the counterparty, which will typically be an agreed upon interest
rate. If the underlying asset in a total return swap declines in value over
the term of the swap, a Fund may also be required to pay the dollar value of
that decline to the counterparty.
The Fund will generally enter into total return swaps only on a net basis,
which means that the two payment streams are netted against each other, with
the Fund receiving or paying, as the case may be, only the net amount of the
two payments. Payments may be made at the conclusion of a total return swap
contract or periodically during its term. Total return swaps normally do not
involve the delivery of securities or other underlying assets. Accordingly,
the risk of loss with respect to total return swaps is normally limited to
the net amount of payments that the Fund is contractually obligated to make.
If the counterparty to a total return swap defaults, the Fund's risk of loss
consists of the net discounted amount of payments that the Fund is
contractually entitled to receive, if any.
Total return swap contracts outstanding at the end of the period, if any,
are reported on a schedule following the Fund's Portfolio of Investments.
Risks of Entering into Swap Agreements: Risks to a Fund of entering into
credit default swaps, total return swaps and interest rate swaps, include
credit risk, market risk, counterparty risk, liquidity risk and
documentation risk. By entering into swap agreements, a Fund may be exposed
to risk of potential loss due to unfavorable changes in interest rates, the
price of the underlying security or index, or the underlying referenced
asset's perceived or actual credit, that the counterparty may default on its
obligation to perform or the possibility that there is no liquid market for
these agreements. There is also the risk that the parties may disagree as to
the meaning of contractual terms in the swap agreement. In addition, to the
extent that a subadviser does not accurately analyze and predict the
underlying economic factors influencing the value of the swap, a Fund may
suffer a loss.
Risks of Commodity-Linked Derivatives: Commodity-linked derivatives are
derivative instruments, the value of which is primarily linked to the price
movement of a commodity, commodity index or commodity futures or option
contract. The commodity-linked derivative instruments in which certain of
the Funds invest have substantial risks, including risk of loss of a
significant portion of their principal value. Commodity-linked derivative
instruments may be more volatile and less liquid than the underlying
instruments and their value will be affected by the performance of the
commodity markets, as well as economic and other regulatory or political
developments, overall market movements and other factors. Typically, the
return of the commodity-linked swaps will be based on some multiple of the
performance of an index. The multiple (or leverage) will magnify the
positive and negative return the Fund earns from these swaps as compared to
the index.
Master Agreements: Certain Funds that hold derivative instruments and other
financial instruments may be a party to ISDA (International Swap and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern such
instruments. Master Agreements may contain provisions regarding, among other
things, the parties' general obligations, representations, agreements,
collateral requirements, events of default and early termination. Collateral
can be in the form of cash or securities as agreed to by a Fund and
applicable counterparty. Collateral requirements are generally determined
based on a Fund's net position with each counterparty. Master Agreements may
also include certain provisions that require a Fund to post additional
collateral upon the occurrence of certain events, such as when a Fund's net
assets fall below a specified level. In addition, Master Agreements
typically specify certain standard termination events, such as failure of a
party to pay or deliver, credit support defaults and other events of
default. Termination events applicable to a Fund may also occur upon a
decline in a Fund's net assets below a specified level over a certain period
of time. Additional termination events applicable to counterparties may
occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments outstanding pursuant to a particular Master Agreement,
including the payment of any losses and costs resulting from such early
termination, as reasonably determined by the terminating party. Any decision
by one or more of a Fund's counterparties to elect early termination could
cause a Fund to accelerate the payment of liabilities, which settlement
amounts could be in excess of the amount of assets that
76
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
are already posted as collateral. Typically, the Master Agreement will
permit a single net payment in the event of default. Note, however, that
bankruptcy or insolvency laws of a particular jurisdiction may impose
restrictions on or prohibitions against the right of offset in bankruptcy,
insolvency or other events. As a result, the early termination with respect
to derivative instruments subject to Master Agreements that are in a net
liability position could be material to a Fund's financial statements. The
Funds do not offset derivative assets and derivative liabilities that are
subject to netting arrangements in the Statement of Assets and Liabilities.
The following tables represent the value of derivatives held as of October
31, 2017, by their primary underlying risk exposure and the respective
location on the Statement of Assets and Liabilities and the effect of
derivatives on the Statement of Operations for the year ended October 31,
2017. The derivative contracts held during the period are not accounted for
as hedging instruments under GAAP. For a detailed presentation of
derivatives held as of October 31, 2017, please refer to a schedule
following each Fund's Portfolio of Investments.
Asset Derivatives
-----------------------------------------------------------------------------------------------
Interest Foreign
Rate Equity Exchange
Contracts Contracts Commodity Contracts Contracts
--------------- --------------- ----------------------------------------- ------------
Foreign
Futures Futures Futures Options Swap Exchange
Fund Contracts(1)(8) Contracts(1)(8) Contracts(1)(8) Purchased(2) Contracts(6) Contracts(3) Total
---- --------------- --------------- --------------- ------------ ------------ ------------ --------
Commodity Strategy#. $-- $ -- $146,971 $26,560 $ 579 $ -- $174,110
Global Trends#...... -- 68,749 10,580 -- -- 74,646 153,975
Income Explorer..... -- -- -- -- -- 4,162 4,162
Liability Derivatives
-----------------------------------------------------------------------------------------------
Interest Foreign
Rate Equity Exchange
Contracts Contracts Commodity Contracts Contracts
--------------- --------------- ----------------------------------------- ------------
Foreign
Futures Futures Futures Options Swap Exchange
Fund Contracts(1)(8) Contracts(1)(8) Contracts(1)(8) Written(4) Contracts(7) Contracts(5) Total
---- --------------- --------------- --------------- ------------ ------------ ------------ --------
Commodity Strategy#. $-- $ -- $129,021 $ 7,373 $5,981 $ -- $142,375
Global Trends#...... -- 8,250 -- -- -- 68,383 76,633
Income Explorer..... -- -- -- -- -- 2,209 2,209
--------
Statement of Assets and Liabilities Location:
(1)Variation margin on futures contracts
(2)Investments, at value
(3)Unrealized appreciation on forward foreign currency contracts
(4)Call and put options written, at value
(5)Unrealized depreciation on forward foreign currency contracts
(6)Unrealized appreciation on swap contracts
(7)Unrealized depreciation on swap contracts
(8)The variation margin on futures contracts is included in the cumulative
unrealized appreciation (depreciation) as reported on each Fund's Portfolio
of Investments in the following amounts:
Cumulative
Unrealized
Appreciation
Fund (Depreciation)
---- --------------
Commodity Strategy#. $270,757
Global Trends#...... 323,048
--------
# Consolidated (see Note 2)
77
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Realized Gain (Loss) on Derivatives Recognized in Statement of Operations
----------------------------------------------------------------------------------------------------
Interest Foreign
Rate Equity Exchange
Contracts Contracts Commodity Contracts Contracts
------------- ------------- ---------------------------------------- ------------- ----------
Foreign
Futures Futures Futures Swap Exchange
Fund Contracts (1) Contracts (1) Contracts (1) Options* Contracts (2) Contracts (3) Total
---- ------------- ------------- ------------- -------- ------------- ------------- ----------
Commodity Strategy#. $ -- $ -- $ 20,070 $(51,198) $119,204 $ -- $ 88,076
Global Trends#...... (127,121) 3,991,569 (578,927) -- -- 267,750 3,553,271
Income Explorer..... -- -- -- -- -- (18,638) (18,638)
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Statement of Operations
----------------------------------------------------------------------------------------------------
Interest Foreign
Rate Equity Exchange
Contracts Contracts Commodity Contracts Contracts
------------- ------------- ---------------------------------------- ------------- ----------
Foreign
Futures Futures Futures Swap Exchange
Fund Contracts (4) Contracts (4) Contracts (4) Options* Contracts (5) Contracts (6) Total
---- ------------- ------------- ------------- -------- ------------- ------------- ----------
Commodity Strategy#. -- -- 695,601 13,129 (5,402) -- 703,328
Global Trends#...... (7,377) 91,539 421,853 -- -- 42,815 548,830
Income Explorer..... -- -- -- -- -- 1,953 1,953
--------
* Includes amounts relating to purchased and written options as follows:
Change in Unrealized
Realized Gain (Loss) on Appreciation (Depreciation) on
Derivatives Recognized in Derivatives Recognized in
Statement of Operations Statement of Operations
------------------------- ------------------------------
Commodity Contracts Commodity Contracts
------------------------- ------------------------------
Options Options Options Options
Purchased (7) Written (8) Purchased (9) Written (10)
------------- ----------- ------------- ------------
Commodity Strategy#. $(65,229) $14,031 $2,959 $10,170
--------
Statement of Operations Location:
(1)Net realized gain (loss) on futures contracts
(2)Net realized gain (loss) on swap contracts
(3)Net realized gain (loss) on forward contracts
(4)Change in unrealized appreciation (depreciation) on futures contracts
(5)Change in unrealized appreciation (depreciation) on swap contracts
(6)Change in unrealized appreciation (depreciation) on forward contracts
(7)Net realized gain (loss) on investments
(8)Net realized gain (loss) on written options contracts
(9)Change in unrealized appreciation (depreciation) on investments
(10)Change in unrealized appreciation (depreciation) on written options
contracts
# Consolidated (see Note 2)
The following table represents the average monthly balances of derivatives
held during the period ended October 31, 2017.
Average Amount Outstanding During the Period
--------------------------------------------------------------------------------------------------
Foreign Purchased Call Purchased Put Written Call Written Put
Futures Exchange Options Options Total Return Option Option
Fund Contracts(2) Contracts(2) Contracts(1) Contracts(1) Swap Contracts(1) Contracts(1) Contracts(1)
---- ------------ ------------ -------------- ------------- ----------------- ------------ ------------
Commodity Strategy#. $34,148,170 $ -- $26,125 $3,952 $15,055,931 $5,766 $22,790
Global Trends#...... 28,644,303 14,955,204 -- -- -- -- --
Income Explorer..... -- 357,009 -- -- -- -- --
--------
(1)Amounts represent values in US dollars.
(2)Amounts represent notional amounts in US dollars.
# Consolidated (see Note 2)
78
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
The following tables set forth the Funds' derivative assets and liabilities
by counterparty, net of amount available for offset under Master Agreements
and net of related collateral pledged/(received) as of October 31, 2017. The
repurchase agreements held by the Funds as of October 31, 2017 are subject
to Master Agreements but are not included in the following tables. See the
Portfolio of Investments and Notes to the Financial Statements for more
information about the Funds' holdings in repurchase agreements.
AIG Commodity Strategy Fund#
-----------------------------------------------------------------------------------------------------
Derivative Assets(1) Derivative Liabilities(1)
------------------------------------- -----------------------------------
Forward Forward Net
Foreign Foreign Derivative Collateral
Currency Options Currency Options Assets Pledged/
Counterparty Contracts OTC Swaps Purchased Total Contracts OTC Swaps Written Total (Liabilities) (Received)(2)
------------ --------- --------- --------- ------- --------- --------- ------- ------- ------------- -------------
Goldman Sachs
International........ $ -- $ -- $ 0 $ 0 $ -- $5,981 $-- $ 5,981 $ (5,981) $--
JPMorgan.............. -- 579 -- 579 -- -- -- -- 579 --
-------- ---- ---- ------- ------- ------ --- ------- -------- ---
Total................. $ -- $579 $ 0 $ 579 $ -- $5,981 $-- $ 5,981 $ (5,402) $--
========= ========= ========= ======= ========= ========= ======= ======= ============= =============
AIG Global Trends Fund#
-----------------------------------------------------------------------------------------------------
Derivative Assets(1) Derivative Liabilities(1)
------------------------------------- -----------------------------------
Forward Forward Net
Foreign Foreign Derivative Collateral
Currency Options Currency Options Assets Pledged/
Counterparty Contracts OTC Swaps Purchased Total Contracts OTC Swaps Written Total (Liabilities) (Received)(2)
------------ --------- --------- --------- ------- --------- --------- ------- ------- ------------- -------------
Bank of America, N.A.. $54,357 $ -- $-- $54,357 $ -- $ -- $-- $ -- $ 54,357 $--
Goldman Sachs
International........ 20,289 -- -- 20,289 68,383 -- -- 68,383 (48,094) --
-----------------------------------------------------------------------------------------------------
Total................. $74,646 $ -- $ -- $74,646 $68,383 $ -- $-- $68,383 $ 6,263 $--
=====================================================================================================
AIG Income Explorer Fund
-----------------------------------------------------------------------------------------------------
Derivative Assets(1) Derivative Liabilities(1)
------------------------------------- -----------------------------------
Forward Forward Net
Foreign Foreign Derivative Collateral
Currency Options Currency Options Assets Pledged/
Counterparty Contracts OTC Swaps Purchased Total Contracts OTC Swaps Written Total (Liabilities) (Received)(2)
------------ --------- --------- --------- ------- --------- --------- ------- ------- ------------- -------------
Brown Brothers
Harriman & Co........ $ 4,162 $ -- $ -- $ 4,162 $ 2,209 $ -- $-- $ 2,209 $ 1,953 $--
=====================================================================================================
---------
Net
Counterparty Amount(3)
------------ ---------
Goldman Sachs
International........ $ (5,981)
JPMorgan.............. 579
--------
Total................. $ (5,402)
=========
---------
Net
Counterparty Amount(3)
------------ ---------
Bank of America, N.A.. $ 54,357
Goldman Sachs
International........ (48,094)
---------
Total................. $ 6,263
=========
---------
Net
Counterparty Amount(3)
------------ ---------
Brown Brothers
Harriman & Co........ $ 1,953
=========
--------
(1)Gross amounts of recognized assets and liabilities not offset in the
Statement of Assets and Liabilities.
(2)For each respective counterparty, collateral pledged or (received) is
limited to an amount not to exceed 100% of the derivative asset/liability in
the table above.
(3)Net amount represents the net amount due (to)/from counterparty in the event
of a default based on the contractual set-- off rights under the agreement.
# Consolidated (see Note 2)
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from the Securities and Exchange Commission ("SEC"), may
transfer uninvested cash balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. In a
repurchase agreement, the seller of a security agrees to repurchase the
security at a mutually agreed-upon time and price, which reflects the
effective rate of return for the term of the agreement. For repurchase
agreements and joint repurchase agreements, the Funds' custodian takes
possession of the collateral pledged for investments in such repurchase
agreements ("repo" or collectively "repos"). The underlying collateral is
valued daily on a mark to market basis, plus accrued interest to ensure that
the value, at the time the agreement is entered into, is equal to at least
102% of the repurchase price, including accrued interest. In the event of
default of the obligation to repurchase, a Fund has the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligation. If
the seller defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by a Fund may be delayed or limited.
79
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
As of October 31, 2017, the following Funds held an undivided interest in
the joint repurchase agreement with Bank of America Securities LLC:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 7.63% $2,440,000
Commodity Strategy Subsidiary. 1.42 455,000
Global Trends................. 8.61 2,755,000
Global Trends Subsidiary...... 2.22 710,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Bank of America Securities LLC, dated October 31, 2017, bearing interest at
a rate of 1.04% per annum, with a principal amount of $32,000,000, a
repurchase price of $32,000,924, and a maturity date of November 1, 2017.
The repurchase agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 2.25% 01/31/2024 $32,490,700 $32,856,938
As of October 31, 2017, the following Funds held an undivided interest in
the joint repurchase agreement with Barclays Capital, Inc:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 7.62% $3,810,000
Commodity Strategy Subsidiary. 1.43 715,000
Global Trends................. 8.62 4,310,000
Global Trends Subsidiary...... 2.22 1,110,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Barclays Capital, Inc., dated October 31, 2017, bearing interest at a rate
of 1.04% per annum, with a principal amount of $50,000,000, a repurchase
price of $50,001,444, and a maturity date of November 1, 2017. The
repurchase agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 2.00% 11/30/2022 $50,621,000 $50,993,601
As of October 31, 2017, the following Funds held an undivided interest in
the joint repurchase agreement with BNP Paribas SA:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 7.62% $6,480,000
Commodity Strategy Subsidiary. 1.43 1,215,000
Global Trends................. 8.62 7,325,000
Global Trends Subsidiary...... 2.22 1,890,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
BNP Paribas SA, dated October 31, 2017, bearing interest at a rate of 1.03%
per annum, with a principal amount of $85,000,000, a repurchase price of
$85,002,432, and a maturity date of November 1, 2017. The repurchase
agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 2.13% 05/15/2025 $86,843,300 $86,871,090
80
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
As of October 31, 2017, the following Funds held an undivided interest in
the joint repurchase agreement with Deutsche Bank AG:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 7.63% $3,780,000
Commodity Strategy Subsidiary. 1.43 710,000
Global Trends................. 8.61 4,270,000
Global Trends Subsidiary...... 2.22 1,100,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
Deutsche Bank AG, dated October 31, 2017, bearing interest at a rate of
1.04% per annum, with a principal amount of $49,570,000, a repurchase price
of $49,571,432, and a maturity date of November 1, 2017. The repurchase
agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ----------- -----------
U.S. Treasury Notes. 3.63% 02/15/2020 $48,054,000 $50,583,563
As of October 31, 2017, the following Funds held an undivided interest in
the joint repurchase agreement with RBS Securities, Inc.:
Percentage Principal
Fund Ownership Amount
---- ---------- ----------
Commodity Strategy............ 7.64% $8,555,000
Commodity Strategy Subsidiary. 1.45 1,620,000
Global Trends................. 8.63 9,665,000
Global Trends Subsidiary...... 2.23 2,500,000
As of such date, the repurchase agreement in that joint account and the
collateral thereof were as follows:
RBS Securities, Inc., dated October 31, 2017, bearing interest at a rate of
1.02% per annum, with a principal amount of $112,000,000, a repurchase price
of $112,003,173, and a maturity date of November 1, 2017. The repurchase
agreement is collateralized by the following:
Interest Maturity Principal
Type of Collateral Rate Date Amount Value
------------------ -------- ---------- ------------ ------------
U.S. Treasury Notes. 2.00% 11/15/2026 $116,470,000 $114,229,417
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Securities transactions are recorded on a
trade date basis. Realized gains and losses on sales of investments are
calculated on the identified cost basis.
Interest income is accrued daily from settlement date except when collection
is not expected. For financial statement purposes, the Funds amortize all
premiums and accrete all discounts on fixed income securities. Dividend
income is recorded on the ex-dividend date except for certain dividends from
foreign securities, which are recorded as soon as the Trust is informed
after the ex-dividend date.
Securities purchased or sold on a when-issued or forward commitment basis
are included in investments purchased/sold on an extended settlement basis
in the Statement of Assets and Liabilities.
Distributions received from Real Estate Investment Trusts ("REIT")
investments are recharacterized based on information provided by the REIT
into the following categories: ordinary income, long-term and short-term
capital gains and return of capital. If information is not available on a
timely basis from the REIT, the recharacterization will be based on
available information which may include the previous year's allocation. If
new or additional information becomes available from the REIT
81
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
at a later date, a recharacterization will be made in the following year.
The amount recharacterized as ordinary income is recorded as dividend income
and the amount recharacterized as capital gain is recorded as realized gain
in the Statement of Operations. The amount recharacterized as return of
capital is recorded as a reduction to the cost of investments in the
Statement of Assets and Liabilities. These recharacterizations are reflected
in the accompanying financial statements.
Expenses common to all Funds are allocated among the Funds based on relative
net assets or other appropriate methods. In all other respects, expenses are
charged to each Fund as incurred on a specific identification basis.
Net investment income, other than class specific expenses, and realized and
unrealized gains and losses are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares (or the value
of dividend-eligible shares, as appropriate) of each class of shares at the
beginning of the day (after adjusting for the current capital share activity
of the respective class).
Dividends from net investment income, if any, are normally paid monthly for
the Income Explorer Fund. All other Funds pay annually. Each of the Funds
reserves the right to declare and pay dividends less frequently than
disclosed above, provided that the net realized capital gains and the net
investment income, if any, are paid at least annually. The Funds record
dividends and distributions to their shareholders on the ex-dividend date.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the capital accounts at fiscal year end based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net assets
are not affected by these reclassifications.
Each Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income, including any net capital gains on investments, to its
shareholders. Each Fund also intends to distribute sufficient net investment
income and net capital gains, if any, so that each Fund will not be subject
to excise tax on undistributed income and gains. Therefore, no federal
income tax or excise tax provision is required.
Each Fund recognizes the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed each Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2014 -2016 or expected to be taken in each Funds' 2017 tax return. The Funds
are not aware of any tax provisions for which it is reasonably possible that
the total amounts of unrecognized tax benefits will change materially in the
next twelve months. The Funds file U.S. federal and certain state income tax
returns. With few exceptions, the Funds are no longer subject to U.S.
federal and state tax examinations by tax authorities for tax returns ending
before 2014.
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars based on the exchange rate of such currencies
against U.S. dollars on the date of valuation.
The Funds do not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at the end of the period. Similarly, the
Funds do not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
period.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities located in the Statements of Operations include realized
foreign exchange gains and losses from currency gains or losses between the
trade and the settlement dates of securities transactions, the difference
between the amounts of interest, dividends and foreign withholding taxes
recorded on the Funds' books and the U.S. dollar equivalent amounts actually
received or paid and changes in the unrealized foreign exchange gains and
losses relating to the other assets and liabilities arising as a result of
changes in the exchange rates and realized gains and losses on forward
foreign currency contracts.
82
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Organization and Offering Costs: Organization costs incurred in connection
with the commencement of the AIG ESG Dividend Fund are expensed, while
offering costs are reflected as "Deferred offering costs" in the Statement
of Assets and Liabilities of the Fund, and amortized over a 12-month period.
New Accounting Pronouncement: In October 2016, the SEC adopted amendments to
rules under the 1940 Act ("final rules") intended to modernize the reporting
and disclosure of information by registered investment companies. The final
rules amend Regulation S-X and require funds to provide standardized,
enhanced derivative disclosure in fund financial statements in a format
designed for individual investors. The amendments to Regulation S-X also
update the disclosures for other investments and investments in and advances
to affiliates and amend the rules regarding the general form and content of
fund financial statements. The compliance date for the amendments to
Regulation S-X was August 1, 2017. All required changes have been made in
accordance with Regulation S-X.
Note 4. Investment Advisory and Management Agreements, Distribution and Service
Agreements
The Trust, on behalf of each Fund, has entered into Investment Advisory and
Management Agreements (the "Agreements") with SunAmerica. Under the
Agreements, SunAmerica provides continuous supervision of each Fund's
portfolio and administrative affairs, subject to general review by the
Board. In connection therewith, SunAmerica furnishes the Funds with office
facilities, maintains certain of the Funds' books and records, pays the
salaries and expenses of all personnel, including officers of the Funds who
are employees of SunAmerica and its affiliates and oversees the performance
of services provided to the Funds by third parties. Pursuant to the
Agreements, the Funds pay SunAmerica a management fee at an annual rate
based on average daily net assets, which is computed daily and payable
monthly, as follows:
Fund Percentage
---- ----------
Commodity Strategy....... 1.00%
ESG Dividend............. 0.75
Focused Alpha Large-Cap.. 1.00
Focused Multi-Cap Growth. 1.00
Global Trends............ 1.10
Income Explorer.......... 1.00
Small-Cap................ 1.00
The Commodity Strategy Subsidiary has entered into a separate contract with
SunAmerica whereby SunAmerica provides investment advisory and other
services to the Commodity Strategy Subsidiary. In consideration of these
services, the Commodity Strategy Subsidiary pays SunAmerica a management fee
at the annual rate of 1.00% of average daily net assets of the Commodity
Strategy Subsidiary. SunAmerica has contractually agreed to waive the
management fee it receives from the Commodity Strategy Fund in an amount
equal to the management fee paid by the Commodity Strategy Subsidiary to
SunAmerica (the "Commodity Strategy Subsidiary management fee waiver"). This
waiver may not be terminated by SunAmerica, and will remain in effect for as
long as SunAmerica's contract with the Commodity Strategy Subsidiary is in
place. For the year ended October 31, 2017, the amount of advisory fees
waived was $77,652.
The Global Trends Subsidiary has entered into a separate contract with
SunAmerica whereby SunAmerica provides investment advisory and other
services to the Global Trends Subsidiary. In consideration of these
services, the Global Trends Subsidiary pays SunAmerica a management fee at
the annual rate of 1.10% of average daily net assets of the Global Trends
Subsidiary. SunAmerica has contractually agreed to waive the management fee
it receives from the Global Trends Fund in an amount equal to the management
fee paid by the Global Trends Subsidiary to SunAmerica (the "Global Trends
Subsidiary management fee waiver"). This waiver may not be terminated by
SunAmerica, and will remain in effect for as long as SunAmerica's contract
with the Global Trends Subsidiary is in place. For the year ended October
31, 2017, the amount of advisory fees waived was $82,817.
Pursuant to the Subadvisory Agreement between SunAmerica and Wellington
Management Company LLP ("Wellington") (the "Commodity Strategy Subadvisory
Agreement"), SunAmerica has delegated portfolio management responsibilities
of the Commodity Strategy Fund to Wellington and pays Wellington a
subadvisory fee at an annual rate of 0.40% of the average daily net assets
of the Fund. Pursuant to a Subadvisory Agreement between SunAmerica and
Wellington with respect to the
83
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Commodity Strategy Subsidiary, SunAmerica has delegated portfolio management
responsibilities of the Commodity Strategy Subsidiary to Wellington and pays
Wellington a subadvisory fee at an annual rate of 0.40% of average daily net
assets of the Commodity Strategy Subsidiary. Payments to Wellington for its
services are made by SunAmerica, not by the Fund. Wellington has
contractually agreed to waive the subadvisory fee it receives with respect
to the Commodity Strategy Fund in an amount equal to the subadvisory fee
paid by SunAmerica to Wellington with respect to the Commodity Strategy
Subsidiary. This waiver may not be terminated by Wellington and will remain
in effect for as long as the contract with the Commodity Strategy Subsidiary
is in place.
Pursuant to the Subadvisory Agreement between SunAmerica and Marisco and the
Subadvisory Agreement between SunAmerica and Blackrock Investment
Management, LLC ("Blackrock"), SunAmerica has delegated portfolio management
responsibilities of the Focused Alpha Large-Cap Fund to Marisco and
Blackrock. SunAmerica pays Marisco and Blackrock a fee equal to a percentage
of the average daily total assets of the Fund allocated to each Subadviser.
For the year ended October 31, 2017, SunAmerica paid Marisco and Blackrock
at an aggregate annual rate of 0.40% of the Fund's average daily total net
assets. Marsico is responsible for managing the large-cap growth portion of
the Fund and Blackrock is responsible for managing the large-cap value
portion of the Fund. Each Subadviser is paid by SunAmerica and not the Fund.
Pursuant to the Subadvisory Agreement between SunAmerica and Marisco Capital
Management, LLC ("Marisco"), and the Subadvisory Agreement between
SunAmerica and BAMCO, Inc. ("BAMCO"), SunAmerica has delegated portfolio
management responsibilities of the Focused Multi-Cap Growth Fund to Marisco
and BAMCO. SunAmerica pays Marisco and BAMCO a fee equal to a percentage of
the average daily total assets of the Fund allocated to each Subadviser. For
the year ended October 31, 2017, SunAmerica paid Marisco and BAMCO at an
aggregate annual rate of 0.46% of the Fund's average daily total net assets.
Marsico is responsible for managing the large-cap portion of the Fund and
BAMCO is responsible for managing the small- and mid-cap portion of the
Fund. Each subadviser is paid by SunAmerica and not the Fund.
Pursuant to the Subadvisory Agreement between SunAmerica and Wellington (the
"Global Trends Subadvisory Agreement"), SunAmerica has delegated portfolio
management responsibilities of Global Trends Fund to Wellington and pays
Wellington a subadvisory fee at an annual rate of 0.45% of the average daily
net assets of the Fund on the first $1 billion and 0.40% thereafter.
Pursuant to a Subadvisory Agreement between SunAmerica and Wellington with
respect to the Global Trends Subsidiary, SunAmerica has delegated portfolio
management responsibilities of the Global Trends Subsidiary to Wellington
and pays Wellington a subadvisory fee at an annual rate of 0.45% of average
daily net assets of the Global Trends Subsidiary on the first $1 billion and
0.40% thereafter. Payments to Wellington for its services are made by
SunAmerica, not by the Fund. Wellington has contractually agreed to waive
the subadvisory fee it receives with respect to the Global Trends Fund in an
amount equal to the subadvisory fee paid by SunAmerica to Wellington with
respect to the Global Trends Subsidiary. This waiver may not be terminated
by Wellington and will remain in effect for as long as Wellington's contract
with the Global Trends Subsidiary is in place.
Pursuant to the subadvisory agreement between SunAmerica and Cohen & Steers
Capital Management, Inc. ("Cohen & Steers"), SunAmerica has delegated a
portion of portfolio management responsibilities of the Income Explorer Fund
to Cohen & Steers. For its services under the Subadvisory Agreement, Cohen &
Steers will receive a subadvisory fee at an annual rate of 0.40% of the
average daily net assets on the first $200 million, 0.35% on the next $200
million and 0.30% thereafter of the portion of the Fund that it manages.
Cohen and Steers is paid by SunAmerica and not by the Fund.
Pursuant to the Subadvisory Agreement between SunAmerica and Cadence Capital
Management, LLC ("Cadence"), SunAmerica has delegated a portion of portfolio
management responsibilities of the Small-Cap Fund to Cadence. Cadence is
responsible for managing the micro-cap growth portion of the Fund. For its
services under the Subadvisory Agreement, Cadence will receive a subadvisory
fee at an annual rate of 0.50% of the average daily net assets of the
portion of the Fund that it manages. Cadence is paid by SunAmerica and not
by the Fund.
SunAmerica has contractually agreed to waive fees and/or reimburse expenses
to the extent necessary to cap the Funds' annual Fund operating expense at
the following percentages of each Class's average daily net assets. For the
purposes of waived fee and/or reimbursed expense calculations, annual Fund
operating expenses shall not include extraordinary expenses (i.e., expenses
that are unusual in nature and/or infrequent in occurrence, such as
litigation), or acquired fund fees and expenses brokerage
84
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
commissions and other transactional expenses relating to the purchase and
sale of portfolio securities, interest, taxes and governmental fees, and
other expenses not incurred in the ordinary course of a Fund's business. The
contractual expense fee waivers and expense reimbursements will continue in
effect indefinitely, unless terminated by the Trustees, including a majority
of the Disinterested Trustees.
Fund Percentage
---- ----------
Commodity Strategy Class A#................................. 1.72%
Commodity Strategy Class C#................................. 2.37
Commodity Strategy Class W#................................. 1.52
ESG Dividend Class A........................................ 1.25
ESG Dividend Class C........................................ 1.90
ESG Dividend Class W........................................ 1.05
Focused Alpha Large-Cap Class A............................. 1.72
Focused Alpha Large-Cap Class C............................. 2.37
Focused Alpha Large-Cap Class W............................. 1.52
Focused Multi-Cap Growth Class A............................ 1.72
Focused Multi-Cap Growth Class C............................ 2.37
Focused Multi-Cap Growth Class W............................ 1.52
Global Trends Class A#...................................... 1.85
Global Trends Class C#...................................... 2.50
Global Trends Class W#...................................... 1.65
Income Explorer Class A..................................... 1.72
Income Explorer Class C..................................... 2.37
Income Explorer Class W..................................... 1.52
Small-Cap Class A........................................... 1.72
Small-Cap Class C........................................... 2.37
Small-Cap Class W........................................... 1.52
--------
# Consolidated (see Note 2)
Any contractual waivers and/or reimbursements made by SunAmerica with
respect to a Fund, with the exception of the Subsidiary management fee
waivers, are subject to recoupment from the Funds within two years after the
occurrence of any such waivers and/or reimbursements, provided that the
Funds are able to effect such payment to SunAmerica and remain in compliance
with the expense limitations in effect at the time the waivers and/or
reimbursements were made.
For the year ended October 31, 2017, pursuant to the contractual expense
limitations referred above, SunAmerica has waived or reimbursed expenses as
follows:
Other
Expenses
Fund Reimbursed
---- ----------
Commodity Strategy#....... $162,994
ESG Dividend.............. 189,689
Focused Alpha Large-Cap... --
Focused Multi-Cap Growth.. --
Global Trends#............ 88,819
Income Explorer........... 32,449
Small-Cap................. 13,643
Class
Specific
Expenses
Fund Reimbursed
---- ----------
Commodity Strategy Class A#....... $106,001
Commodity Strategy Class C#....... 19,833
Commodity Strategy Class W#....... 16,039
ESG Dividend Class A.............. 32,879
ESG Dividend Class C.............. 2,285
--------
# Consolidated (see Note 2)
85
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Class
Specific
Expenses
Fund Reimbursed
---- ----------
ESG Dividend Class W...... $ 3,986
Focused Alpha Large-Cap
Class A.................. --
Focused Alpha Large-Cap
Class C.................. --
Focused Alpha Large-Cap
Class W.................. 2,075
Focused Multi-Cap Growth
Class A.................. --
Focused Multi-Cap Growth
Class C.................. --
Focused Multi-Cap Growth
Class W.................. --
Global Trends Class A#.... 86,609
Global Trends Class C#.... 19,209
Global Trends Class W#.... 12,648
Income Explorer Class A... 79,698
Income Explorer Class C... 19,631
Income Explorer Class W... 13,942
Small-Cap Class A......... 121,298
Small-Cap Class C......... 12,792
Small-Cap Class W......... 18,118
For the year ended October 31, 2017, the amounts recouped by SunAmerica are
as follows:
Other
Expenses
Fund Recouped
---- --------
Commodity Strategy#........ $--
ESG Dividend............... --
Focused Alpha Large-Cap.... --
Focused Multi-Cap Growth... --
Global Trends#............. --
Income Explorer............ --
Small-Cap.................. --
Class Specific
Expenses
Fund Recouped
---- --------------
Commodity Strategy Class A#......... $ --
Commodity Strategy Class C#......... --
Commodity Strategy Class W#......... --
ESG Dividend Class A................ 263
ESG Dividend Class C................ --
ESG Dividend Class W................ --
Focused Alpha Large-Cap Class A..... --
Focused Alpha Large-Cap Class C..... --
Focused Alpha Large-Cap Class W..... 475
Focused Multi-Cap Growth Class A.... --
Focused Multi-Cap Growth Class C.... --
Focused Multi-Cap Growth Class W.... --
Global Trends Class A#.............. --
Global Trends Class C#.............. --
Global Trends Class W#.............. --
Income Explorer Class A............. --
Income Explorer Class C............. --
Income Explorer Class W............. --
Small-Cap Class A................... --
Small-Cap Class C................... --
Small-Cap Class W................... --
--------
# Consolidated (see Note 2)
86
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
At October 31, 2017, expenses previously waived and/or reimbursed by
SunAmerica that are subject to recoupment and expire during the time periods
indicated are as follows:
Other expenses Reimbursed
-------------------------
October 31, October 31,
Fund 2018 2019
---- ----------- -----------
Commodity Strategy#....... $149,957 $162,994
ESG Dividend.............. -- 189,689
Focused Alpha Large-Cap... -- --
Focused Multi-Cap Growth.. -- --
Global Trends#............ 22,366 88,819
Income Explorer........... 56,703 32,449
Small-Cap................. 12,417 13,643
Class Specific Expenses Reimbursed
----------------------------------
October 31, October 31,
Fund 2018 2019
---- ----------- -----------
Commodity Strategy Class A#....... $102,005 $106,001
Commodity Strategy Class C#....... 24,496 19,833
Commodity Strategy Class W#....... 19,379 16,039
ESG Dividend Class A.............. -- 32,616
ESG Dividend Class C.............. -- 2,285
ESG Dividend Class W.............. -- 3,986
Focused Alpha Large-Cap Class A... -- --
Focused Alpha Large-Cap Class C... -- --
Focused Alpha Large-Cap Class W... 12,013 2,075
Focused Multi-Cap Growth Class A.. -- --
Focused Multi-Cap Growth Class C.. -- --
Focused Multi-Cap Growth Class W.. -- --
Global Trends Class A#............ 91,951 86,609
Global Trends Class C#............ 30,337 19,209
Global Trends Class W#............ 18,580 12,648
Income Explorer Class A........... 69,616 79,698
Income Explorer Class C........... 21,422 19,631
Income Explorer Class W........... 14,961 13,942
Small-Cap Class A................. 108,535 121,298
Small-Cap Class C................. 15,918 12,792
Small-Cap Class W................. 14,648 18,118
--------
# Consolidated (see Note 2)
The Trust, on behalf of each Fund, has a Distribution Agreement with AIG
Capital Services, Inc. ("ACS" or the "Distributor"), an affiliate of the
Adviser. Each Fund has adopted a Distribution Plan on behalf of its Class A
shares and Class C shares (each a "Plan" and collectively, the "Plans") in
accordance with the provisions of Rule 12b-1 under the 1940 Act, hereinafter
referred to as the "Class A Plan" and the "Class C Plan." In adopting the
Plans, the Trustees determined that there was a reasonable likelihood that
each such Plan would benefit the Fund and the shareholders of the respective
class. The sales charge and distribution fees of a particular class will not
be used to subsidize the sale of shares of any other class.
Under the Class A Plan and Class C Plan, the Distributor receives payments
from a Fund at an annual rate of 0.10% and 0.75%, respectively, of average
daily net assets of such Fund's Class to compensate the Distributor and
certain securities firms for providing sales and promotional activities for
distributing that class of shares. The distribution costs for which the
Distributor may be compensated include fees paid to broker-dealers that have
sold Fund shares, commissions and other expenses such as those incurred for
sales literature, prospectus printing and distribution and compensation to
wholesalers. It is possible that in any given year, the amount paid to the
Distributor under each Plan may exceed the Distributor's distribution costs
as described above. For the year ended October 31, 2017, ACS waived fees in
the amount of $4,988 and $1,907 for the Class A shares of ESG Dividend Fund
and Small-Cap Fund, respectively. The Plans further provide that the Class A
and Class C shares of each Fund shall pay the Distributor an account
maintenance fee up to an annual rate of 0.25% of the average daily net
assets of such class of
87
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
shares for payments to broker-dealers for providing account maintenance
activities. For the year ended October 31, 2017, ACS received fees based
upon the aforementioned rates (see Statement of Operations).
The Trust, on behalf of each fund, has entered into an Administrative and
Shareholder Services Agreement with ACS, pursuant to which ACS is paid an
annual fee of 0.15% of average daily net assets of Class W shares as
compensation for providing administrative and shareholder services to Class
W shareholders. For the year ended October 31, 2017, ACS earned fees based
upon the aforementioned rates (see Statement of Operations).
ACS receives sales charges on each Fund's Class A shares, portions of which
are reallocated to affiliated broker-dealers and nonaffiliated
broker-dealers. ACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of each
Fund's Class A and Class C shares. ACS has advised the Funds that for the
year ended October 31, 2017, the proceeds received from sales (and paid out
to affiliated and non-affiliated broker-dealers) and redemptions are as
follows:
Class A Class C
---------------------------------------------------- -------------
Contingent Contingent
Sales Affiliated Non-affiliated Deferred Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges
---- -------- -------------- -------------- ------------- -------------
Commodity Strategy....... $ 9,652 $ 1,953 $ 6,352 $ -- $ 59
ESG Dividend............. 6,888 1,518 4,306 -- --
Focused Alpha Large-Cap.. 285,395 48,826 194,643 289 2,193
Focused Multi-Cap Growth. 571,991 138,731 346,675 11,278 3,128
Global Trends............ 8,634 1,544 5,728 -- 223
Income Explorer.......... 90,530 8,582 66,812 -- 666
Small-Cap................ 44,902 9,611 28,743 -- 54
The Trust has entered into a Service Agreement with AIG Fund Services, Inc.
("AFS"), an affiliate of the Adviser. Under the Service Agreement, AFS
performs certain shareholder account functions by assisting the Funds'
transfer agent, State Street Bank and Trust Company in connection with the
services that it offers to the shareholders of the Funds. Pursuant to the
Service Agreement, the Funds pay a fee to AFS for services rendered based
upon an annual rate of 0.22% of daily net assets. For the year ended October
31, 2017, the Funds incurred the following expenses which are included in
transfer agent fees payable in the Statement of Assets and Liabilities and
in transfer agent fees and expenses in the Statement of Operations to
compensate AFS pursuant to the terms of the Service Agreement.
Payable at
Fund Expenses October 31, 2017
---- -------- ----------------
Commodity Strategy Class A....... $ 75,577 $ 6,476
Commodity Strategy Class C....... 6,739 512
Commodity Strategy Class W....... 3,874 306
ESG Dividend Class A............. 35,684 4,705
ESG Dividend Class C............. 662 69
ESG Dividend Class W............. 658 66
Focused Alpha Large-Cap Class A.. 997,939 93,835
Focused Alpha Large-Cap Class C.. 246,558 21,896
Focused Alpha Large-Cap Class W.. 26,870 3,384
Focused Multi-Cap Growth Class A. 865,962 83,035
Focused Multi-Cap Growth Class C. 184,578 16,653
Focused Multi-Cap Growth Class W. 71,191 8,293
Global Trends Class A............ 69,445 5,929
Global Trends Class C............ 8,868 688
Global Trends Class W............ 2,461 188
Income Explorer Class A.......... 57,980 5,889
Income Explorer Class C.......... 9,317 988
Income Explorer Class W.......... 4,863 1,477
Small-Cap Class A................ 102,813 9,073
Small-Cap Class C................ 2,995 352
Small-Cap Class W................ 8,342 1,322
88
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
At October 31, 2017, SunAmerica Series, Inc. AIG Active Allocation Fund and
AIG Multi-Asset Allocation Fund ("Strategy Funds"), an affiliate of the
Adviser owned 5% or more of the outstanding shares of the following Funds:
Holder
------------------------------
AIG Active AIG Multi-Asset
Fund Allocation Fund Allocation Fund
---- --------------- ---------------
Commodity Strategy...... 6.72% 65.95%
ESG Dividend............ 20.34 74.52
Global Trends........... 28.36 36.05
Income Explorer......... 6.86 29.57
Small-Cap............... 15.27 49.80
The Strategy Portfolios do not invest in the underlying funds for the
purpose of exercising management or control; however, investments by these
Portfolios within the set limits across their asset allocations may
represent a significant portion of net assets of the underlying funds.
On July 19, 2017, the Income Explorer Fund purchased 6,314 shares of Doosan
Bobcat, a non-high dividend yielding equity security, causing the Fund to be
underweighted in high dividend yielding equity securities. On August 3,
2017, 6,314 shares of Doosan Bobcat were sold and 31,934 shares of
Distribuidora Internacional de Alimentacion SA, a high dividend yielding
equity security, were purchased, resulting in a gain of $11,304 to the Fund.
Note 5. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the year ended October 31, 2017 were as follows:
Purchases Sales
of portfolio of portfolio
securities securities Purchases Sales
(excluding U.S. (excluding U.S. of U.S. of U.S.
government government government government
Fund securities securities securities securities
---- --------------- --------------- ---------- ----------
Commodity Strategy............ $ 33,305 $ 157,183 $2,300,170 $2,550,000
ESG Dividend.................. 27,883,124 3,454,060 -- --
Focused Alpha Large-Cap....... 386,591,216 430,350,527 -- --
Focused Multi-Cap Growth...... 323,274,733 358,358,653 -- --
Income Explorer............... 32,162,601 15,483,170 -- --
Small-Cap..................... 34,449,519 33,558,351 -- --
Note 6. Federal Income Taxes
The following details the tax basis distributions as well as the components
of distributable earnings. The tax basis components of distributable
earnings differ from the amounts reflected in the Statement of Assets and
Liabilities by temporary book/tax differences primarily due to taxable
income from a wholly-owned foreign subsidiary, amortization of
organizational costs, late year ordinary loss deferral, partnership
investments, investments in passive foreign investment companies, wash sales
and derivative transactions.
Distributable Earnings Tax Distributions
----------------------------------------- ------------------------
For the year ended October 31, 2017
-------------------------------------------------------------------
Long-term Unrealized
Ordinary Gains/Capital Appreciation Ordinary Long-Term
Fund Income Loss Carryover (Depreciation)* Income Capital Gains
---- ----------- -------------- --------------- ---------- -------------
Commodity Strategy#...... $ 67,022 $(83,767,852) $ (7,510,922) $ -- $ --
ESG Dividend............. 483,800 -- 994,542 -- --
Focused Alpha Large-Cap.. 13,732,012 40,936,982 170,014,958 -- --
Focused Multi-Cap Growth. -- 49,277,342 222,775,900 -- 7,760,491
Global Trends#........... 1,891,091 1,038,271 (16,659,627) -- --
Income Explorer.......... 205,882 21,333 1,038,045 1,216,609 --
Small-Cap................ 1,864,286 3,928,373 10,133,372 -- 1,432,026
--------
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
# Consolidated (see Note 2)
89
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Tax Distributions
For the year ended
October 31, 2016
------------------------
Ordinary Long-Term
Fund Income Capital Gains
---- ---------- -------------
Commodity Strategy#...... $ -- $ --
ESG Dividend............. -- --
Focused Alpha Large-Cap.. 76 61,020,402
Focused Multi-Cap Growth. -- 70,160,278
Global Trends#........... 900,316 744,486
Income Explorer.......... 1,185,360 --
Small-Cap................ 1,750,124 2,210,846
--------
# Consolidated (see Note 2)
As of October 31, 2017, for Federal income tax purposes, the Funds indicated
below have capital loss carryforwards, which expire in the year indicated,
which are available to offset future capital gains, if any:
Unlimited+
-----------------------
Fund ST LT
---- ----------- -----------
Commodity Strategy#...... $51,868,140 $31,899,712
ESG Dividend............. -- --
Focused Alpha Large-Cap.. -- --
Focused Multi-cap Growth. -- --
Global Trends#........... -- --
Income Explorer.......... -- --
Small-Cap................ -- --
The Funds indicated below utilized capital loss carryforwards which offset
net realized taxable gains in the period ended October 31, 2017.
Capital Loss
Carryforward
------------
Fund Utilized
---- ------------
Commodity Strategy....... $ --
ESG Dividend............. --
Focused Alpha Large-Cap.. --
Focused Multi-Cap Growth. --
Global Trends............ 520,791
Income Explorer.......... 1,336,201
Small-Cap................ --
Under the current tax law, late year ordinary losses may be deferred and
treated as occurring on the first day of the following year. For the fiscal
year ended October 31, 2017 the Funds elected to defer late year ordinary
losses as follows:
Deferred Late Year
Fund Ordinary Loss
---- ------------------
Commodity Strategy#...... $ --
ESG Dividend............. --
Focused Alpha Large-Cap.. --
Focused Multi-Cap Growth. 3,625,080
Global Trends#........... --
Income Explorer.......... --
Small-Cap................ --
--------
# Consolidated (see Note 2)
90
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
For the period ended October 31, 2017, the reclassifications arising from
book/tax differences resulted in increases (decreases) that were due to
deconsolidation adjustments of the wholly owned foreign subsidiaries,
derivative transactions, net investment losses, expiration of capital loss
carryovers, treatment of foreign currency, and nondeductible expenses to the
components of net assets as follows:
Accumulated Accumulated
Undistributed Undistributed Net
Net Investment Realized Gain
Fund Income (Loss) (Loss) Capital Paid-in
---- -------------- ----------------- ---------------
Commodity Strategy....... $ 145,354 $ (92,916) $ (52,438)
ESG Dividend............. 16,980 -- (16,980)
Focused Alpha Large-Cap.. 5,069,744 (5,069,744) --
Focused Multi-Cap Growth. 6,939,200 (2,600,182) (4,339,018)
Global Trends............ 861,356 (165,657) (695,699)
Income Explorer.......... 58,142 (36,655) (21,487)
Small-Cap................ 613,569 (619,489) 5,920
At October 31, 2017, the amounts of aggregate unrealized gain (loss) and the
cost of investment securities for federal tax purposes, including short-term
securities and repurchase agreements and derivatives, were as follows:
Aggregate Aggregate Net
Unrealized Unrealized Unrealized Cost of
Fund Gain Loss Gain/(Loss) Investments
---- ------------ ------------ ------------ ------------
Commodity Strategy#...... $ 6,399,761 $(13,997,388) $ (7,597,627) $ 47,111,014
ESG Dividend............. 2,057,967 (1,063,425) 994,542 24,572,410
Focused Alpha Large-Cap.. 170,735,579 (720,621) 170,014,958 486,670,245
Focused Multi-Cap Growth. 223,737,530 (961,630) 222,775,900 391,847,533
Global Trends#........... 99,218 (17,012,986) (16,913,768) 52,772,487
Income Explorer.......... 1,042,878 (4,934) 1,037,944 43,290,722
Small-Cap................ 13,444,427 (3,311,055) 10,133,372 49,312,008
--------
# Consolidated (see Note 2)
Note 7. Capital Share Transactions
Transactions in capital shares of each class of each Fund were as follows:
Commodity Strategy Fund#
------------------------------------------------------------------------------------------
Class A Class A Class C Class C
--------------------- ----------------------- ------------------- ---------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, 2017 October 31, 2016 October 31, 2017 October 31, 2016
--------------------- ----------------------- ------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ----------- ---------- ----------- -------- --------- -------- -----------
Shares sold.............. 798,053 $ 5,527,159 1,263,406 $ 8,608,279 21,234 $ 146,454 34,645 $ 234,345
Reinvested shares........ -- -- -- -- -- -- -- --
Shares redeemed.......... (864,608) (6,104,961) (1,082,731) (7,486,184) (127,255) (865,569) (258,933) (1,694,699)
-------- ----------- ---------- ----------- -------- --------- -------- -----------
Net increase (decrease).. (66,555) $ (577,802) 180,675 $ 1,122,095 (106,021) $(719,115) (224,288) $(1,460,354)
======== =========== ========== =========== ======== ========= ======== ===========
Commodity Strategy Fund#
----------------------------------------------
Class W Class W
--------------------- -----------------------
For the For the
year ended year ended
October 31, 2017 October 31, 2016
--------------------- -----------------------
Shares Amount Shares Amount
-------- ----------- ---------- -----------
Shares sold.............. 58,362 $ 421,222 23,153 $ 163,640
Reinvested shares........ -- -- -- --
Shares redeemed.......... (103,302) (740,341) (148,641) (1,008,205)
-------- ----------- ---------- -----------
Net increase (decrease).. (44,940) $ (319,119) (125,488) $ (844,565)
======== =========== ========== ===========
--------
# Consolidated (see Note 2)
91
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
ESG Dividend Fund
--------------------------------------------------------------------------
Class A Class C Class W
------------------------ ------------------------ ----------------------
For the period For the period For the period
December 16, 2016* December 16, 2016* December 16, 2016*
through October 31, 2017 through October 31, 2017 through October 31, 2017
------------------------ ------------------------ ----------------------
Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ------------
Shares sold.............. 1,749,813 $ 26,182,337 23,220 $ 348,420 22,200 $ 333,000
Reinvested shares........ -- -- -- -- -- --
Shares redeemed.......... (174,493) (2,695,435) -- -- -- --
---------- ------------ ---------- ------------ -------- ------------
Net increase (decrease).. 1,575,320 $ 23,486,902 23,220 $ 348,420 22,200 $ 333,000
========== ============ ========== ============ ======== ============
Focused Alpha Large-Cap Fund
----------------------------------------------------------------------------------------------------
Class A Class A Class C Class C
------------------------ ------------------------ ---------------------- ------------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, 2017 October 31, 2016 October 31, 2017 October 31, 2016
------------------------ ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Shares sold.............. 680,493 $ 19,302,610 486,699 $ 11,404,218 126,659 $ 3,346,850 506,858 $ 11,619,901
Reinvested shares........ -- -- 1,903,274 45,031,465 -- -- 489,357 11,245,418
Shares redeemed.......... (2,263,757) (62,692,386) (3,614,768) (85,487,107) (914,267) (24,137,139) (1,124,710) (25,357,353)
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Net increase (decrease).. (1,583,264) $(43,389,776) (1,224,795) $(29,051,424) (787,608) $(20,790,289) (128,495) $ (2,492,034)
========== ============ ========== ============ ======== ============ ========== ============
Focused Alpha Large-Cap Fund
--------------------------------------------------
Class W Class W
------------------------ ------------------------
For the For the
year ended year ended
October 31, 2017 October 31, 2016
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares sold......... 518,493 $ 15,170,238 159,265 $ 3,833,852
Reinvested shares... -- -- 29,899 713,684
Shares redeemed..... (392,738) (11,779,029) (455,051) (11,130,158)
---------- ------------ ---------- ------------
Net increase
(decrease)......... 125,755 $ 3,391,209 (265,887) $ (6,582,622)
========== ============ ========== ============
Focused Multi-Cap Growth Fund
----------------------------------------------------------------------------------------------------
Class A Class A Class C Class C
------------------------ ------------------------ ---------------------- ------------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, 2017 October 31, 2016 October 31, 2017 October 31, 2016
------------------------ ------------------------ ---------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ --------- ------------ ---------- ------------
Shares sold......... 1,149,529 $ 31,579,237 1,232,427 $ 29,290,493 285,454 $ 7,249,635 516,440 $ 11,840,485
Reinvested shares... 235,190 5,564,598 2,086,686 49,266,736 53,273 1,213,029 475,574 10,885,887
Shares redeemed..... (2,502,152) (65,479,951) (4,195,361) (99,022,490) (928,163) (23,644,057) (1,219,293) (27,678,703)
---------- ------------ ---------- ------------ -------- ------------ ---------- ------------
Net increase
(decrease)......... (1,117,433) $(28,336,116) (876,248) $(20,465,261) (589,436) $(15,181,393) (227,279) $ (4,952,331)
========== ============ ========== ============ ======== ============ ========== ============
--------
* Commencement of operations
92
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Focused Multi-Cap Growth Fund
------------------------------------------------
Class W Class W
---------------------- ------------------------
For the For the
year ended year ended
October 31, 2017 October 31, 2016
---------------------- ------------------------
Shares Amount Shares Amount
-------- ------------ ---------- ------------
Shares sold........ 761,790 $ 21,457,555 525,775 $ 12,630,675
Reinvested shares.. 13,418 320,814 152,156 3,624,366
Shares redeemed.... (608,199) (15,915,170) (1,526,634) (37,937,805)
-------- ------------ ---------- ------------
Net increase
(decrease)........ 167,009 $ 5,863,199 (848,703) $(21,682,764)
======== ============ ========== ============
Global Trends Fund#
----------------------------------------------------------------------------------------------
Class A Class A Class C Class C
---------------------- ------------------------ --------------------- ---------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, 2017 October 31, 2016 October 31, 2017 October 31, 2016
---------------------- ------------------------ --------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ ---------- ------------ --------- ----------- --------- -----------
Shares sold........ 125,820 $ 1,680,909 770,048 $ 9,942,473 10,249 $ 134,558 15,127 $ 188,968
Reinvested shares.. -- -- 95,097 1,208,678 -- -- 16,873 208,378
Shares redeemed.... (405,965) (5,340,002) (622,590) (7,990,020) (110,159) (1,392,078) (259,284) (3,220,524)
-------- ------------ ---------- ------------ -------- ----------- -------- -----------
Net increase
(decrease)........ (280,145) $ (3,659,093) 242,555 $ 3,161,131 (99,910) $(1,257,520) (227,284) $(2,823,178)
======== ============ ========== ============ ======== =========== ======== ===========
Global Trends Fund#
-----------------------------------------
Class W Class W
------------------ ---------------------
For the For the
year ended year ended
October 31, 2017 October 31, 2016
------------------ ---------------------
Shares Amount Shares Amount
------- --------- -------- -----------
Shares sold........ 3,324 $ 44,460 15,149 $ 199,420
Reinvested shares.. -- -- 4,075 52,287
Shares redeemed.... (45,118) (594,394) (106,010) (1,370,539)
------- --------- -------- -----------
Net increase
(decrease)........ (41,794) $(549,934) (86,786) $(1,118,832)
======= ========= ======== ===========
Income Explorer Fund
----------------------------------------------------------------------------------------
Class A Class A Class C Class C
---------------------- --------------------- --------------------- ------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, 2017 October 31, 2016 October 31, 2017 October 31, 2016
---------------------- --------------------- --------------------- ------------------
Shares Amount Shares Amount Shares Amount Shares Amount
--------- ----------- -------- ----------- -------- ----------- ------- ---------
Shares sold........... 1,003,506 $15,384,847 503,527 $ 7,054,246 177,564 $ 2,734,798 67,108 $ 945,878
Reinvested shares..... 64,190 980,769 74,157 1,027,579 8,247 125,782 7,725 107,087
Shares redeemed....... (598,076) (9,090,962) (488,980) (6,940,453) (100,354) (1,560,643) (70,253) (954,105)
--------- ----------- -------- ----------- -------- ----------- ------- ---------
Net
increase (decrease).. 469,620 $ 7,274,654 88,704 $ 1,141,372 85,457 $ 1,299,937 4,580 $ 98,860
========= =========== ======== =========== ======== =========== ======= =========
--------
# Consolidated (see Note 2)
93
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Income Explorer Fund
------------------------------------------------
Class W Class W
---------------------- ------------------------
For the For the
year ended year ended
October 31, 2017 October 31, 2016
---------------------- ------------------------
Shares Amount Shares Amount
-------- ------------ ---------- ------------
Shares sold........ 486,896 $ 7,654,707 31,020 $ 439,514
Reinvested shares.. 5,667 88,419 1,330 18,290
Shares redeemed.... (25,994) (411,508) (27,001) (375,392)
-------- ------------ ---------- ------------
Net increase
(decrease)........ 466,569 $ 7,331,618 5,349 $ 82,412
======== ============ ========== ============
Small-Cap Fund
--------------------------------------------------------------------------------------------
Class A Class A Class C Class C
---------------------- ------------------------ ----------------- -----------------------
For the For the For the For the
year ended year ended year ended year ended
October 31, 2017 October 31, 2016 October 31, 2017 October 31, 2016
---------------------- ------------------------ ----------------- -----------------------
Shares Amount Shares Amount Shares Amount Shares Amount
-------- ------------ ---------- ------------ ------ --------- ---------- -----------
Shares sold........ 290,584 $ 5,244,799 485,067 $ 7,249,490 53,327 $ 950,781 21,542 $ 314,461
Reinvested shares.. 78,873 1,384,213 265,839 3,878,586 1,667 28,657 3,219 46,350
Shares redeemed.... (700,332) (12,743,109) (1,191,408) (18,372,908) (9,225) (165,173) (5,601) (82,323)
-------- ------------ ---------- ------------ ------ --------- ---------- -----------
Net increase
(decrease)........ (330,875) $ (6,114,097) (440,502) $ (7,244,832) 45,769 $ 814,265 19,160 $ 278,488
======== ============ ========== ============ ====== ========= ========== ===========
Small-Cap Fund
---------------------------------------
Class W Class W
------------------- ------------------
For the For the
year ended year ended
October 31, 2017 October 31, 2016
------------------- ------------------
Shares Amount Shares Amount
------- ---------- -------- ---------
Shares sold........ 413,473 $7,614,236 13,180 $ 216,560
Reinvested shares.. 789 13,932 1,654 24,229
Shares redeemed.... (33,586) (629,357) -- 233
------- ---------- -------- ---------
Net increase
(decrease)........ 380,676 $6,998,811 14,834 $ 241,022
======= ========== ======== =========
Note 8. Line of Credit
The Trust, along with certain other funds managed by the Adviser and
exclusive of the Commodity Strategy Fund and Global Trends Fund, has access
to a $75 million committed unsecured line of credit and a $50 million
uncommitted unsecured line of credit. The Commodity Strategy Fund and Global
Trends Fund have access to a $10 million committed secured line of credit.
The committed and uncommitted lines of credit are renewable on an annual
basis with State Street Bank and Trust Company ("State Street"), the Trust's
custodian. Interest is currently payable on the committed lines of credit at
the higher of the Federal Funds Rate (but not less than zero) plus 125 basis
points or the One-Month London Interbank Offered Rate (but not less than
zero) plus 125 basis points and State Street's discretionary bid rate on the
uncommitted line of credit. There is also a commitment fee of 25 basis
points per annum on the daily unused portion of the committed line of credit
and an upfront fee of $25,000 on the uncommitted line of credit. Borrowings
under the line of credit will commence when the respective Fund's cash
shortfall exceeds $100,000. For the year ended October 31, 2017, the
following Funds had borrowings:
Average Weighted
Days Interest Debt Average
Fund Outstanding Charges Utilized Interest
---- ----------- -------- -------- --------
Focused Multi-Cap Growth. 135 $5,453 $721,868 2.07%
Focused Alpha Large-Cap.. 11 291 417,533 2.21
Income Explorer.......... 4 84 305,879 2.48
Small-Cap................ 30 489 252,380 2.38
At October 31, 2017, none of the Funds had outstanding borrowings.
94
SunAmerica Specialty Series
NOTES TO FINANCIAL STATEMENTS -- October 31, 2017 -- (continued)
Note 9. Expense Reductions
Through expense offset arrangements resulting from broker commission
recapture, a portion of the expenses of certain Funds have been reduced. For
the year ended October 31, 2017, the amount of expense reductions received
by each Fund used to offset non-affiliated expenses are reflected as Fees
paid indirectly in the Statement of Operations.
Note 10. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the SEC, the Funds are permitted
to participate in an interfund lending program among investment companies
advised by SunAmerica or an affiliate. The interfund lending program allows
the participating Funds to borrow money from and lend money to each other
for temporary or emergency purposes. An interfund loan will be made under
this facility only if the participating Funds receive a more favorable
interest rate than would otherwise be available from a typical bank for a
comparable transaction.
For the year ended October 31, 2017, none of the Funds participated in this
program.
Note 11. Investment Concentration
Each Fund may invest in obligations issued by agencies and instrumentalities
of the U.S. Government that may vary in the level of support they receive
from the government. The government may choose not to provide financial
support to government sponsored agencies or instrumentalities if it is not
legally obligated to do so, and if the issuer defaults, a fund holding
securities of such issuer might not be able to recover its investment from
the U.S. Government. As a result of the Commodity Strategy Funds'
concentration in such investments, these funds may be subject to risks
associated with U.S. Government agencies or instrumentalities.
The Commodity Strategy Fund's exposure to the commodities markets may
subject the Fund to greater volatility than investments in traditional
securities. The value of commodity-linked derivative instruments may be
affected by changes in overall market movements, commodity index volatility,
changes in interest rates, or sectors affecting a particular industry or
commodity, such as drought, floods, weather, livestock disease, embargoes,
tariffs and international economic, political and regulatory developments.
Note 12. Security Transactions with Affiliated Portfolios
The Funds are permitted to transfer securities by purchasing from and/or
selling to other affiliated funds under certain conditions approved by the
Board of Trustees. The affiliated funds involved in such transactions must
have a common investment adviser or investment advisers which are affiliated
persons of each other, common Trustees, and/or common officers in compliance
with Rule 17a-7 of the 1940 Act. Pursuant to the Act, such a transaction
must be either a purchase or a sale, for no consideration other than cash
payment against prompt delivery of the security at the current market price.
No brokerage commission or fee (except for customary transfer fees), or
other remuneration is paid in connection with such transactions. For the
year ended October 31, 2017, no Funds engaged in security transactions with
affiliated Funds.
95
SunAmerica Specialty Series
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of SunAmerica Specialty Series and Shareholders of the
AIG Commodity Strategy Fund, AIG ESG Dividend Fund, AIG Focused Alpha Large-Cap
Fund, AIG Focused Multi-Cap Growth Fund, AIG Global Trends Fund, AIG Income
Explorer Fund and AIG Small-Cap Fund
In our opinion, the (i) accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of each of the AIG
Focused Alpha Large-Cap Fund (formerly SunAmerica Focused Alpha Large-Cap Fund)
and AIG Focused Multi-Cap Growth Fund (formerly SunAmerica Focused Alpha Growth
Fund) as of October 31, 2017, the results of each of their operations for the
year then ended, the changes in each of their net assets for each of the two
years in the period then ended and the financial highlights for each of the
five years in the period then ended, (ii) accompanying statement of assets and
liabilities, including the portfolio of investments, and the related statements
of operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the AIG ESG
Dividend Fund as of October 31, 2017, the results of its operations, the
changes in its net assets and the financial highlights for the period from
December 16, 2016 (commencement of operations) through October 31, 2017, (iii)
accompanying statement of assets and liabilities, including the portfolio of
investments, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of the AIG Income Explorer Fund (formerly SunAmerica
Income Explorer Fund) as of October 31, 2017, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the four years
in the period ended October 31, 2017 and for the period from July 2, 2013
(commencement of operations) through October 31, 2013, (iv) accompanying
statement of assets and liabilities, including the portfolio of investments,
and the related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the financial
position of the AIG Small-Cap Fund (formerly SunAmerica Small-Cap Fund) as of
October 31, 2017, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the three years in the period ended
October 31, 2017 and for the period from February 6, 2014 (commencement of
operations) through October 31, 2014, and (v) accompanying consolidated
statements of assets and liabilities, including the consolidated portfolios of
investments, and the related consolidated statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the AIG Commodity Strategy
Fund (formerly SunAmerica Commodity Strategy Fund) and AIG Global Trends Fund
(formerly SunAmerica Global Trends Fund) and each of their subsidiaries as of
October 31, 2017, the results of each of their operations for the year then
ended, the changes in each of their net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in
the period then ended (seven funds constituting SunAmerica Specialty Series,
hereafter referred to as the "Trust") in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Trust's management. Our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities as of October 31, 2017 by correspondence with the
custodian, brokers, and the application of alternative auditing procedures
where securities purchased had not been received, provide a reasonable basis
for our opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
December 28, 2017
96
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2017 -- (unaudited)
Approval of the Investment Advisory and Management Agreements and Subadvisory
Agreements
The Board of Trustees (the "Board," the members of which are referred to as
"Trustees") of SunAmerica Specialty Series (the "Trust"), including the
Trustees who are not "interested persons," as defined in Section 2(a)(19) of
the Investment Company Act of 1940, as amended (the "1940 Act") (the
"Independent Trustees"), of the Trust or its separate series (each, a "Fund,"
and collectively, the "Funds"), SunAmerica Asset Management, LLC
("SunAmerica"), Wellington Management Company LLP ("Wellington"), BAMCO, Inc.
("BAMCO"), Marsico Capital Management LLC ("Marsico"), BlackRock Investment
Management LLC ("BlackRock"), Cohen and Steers Capital Management, Inc. ("Cohen
and Steers"), Cadence Capital Management, LLC ("Cadence") or Trajectory Asset
Management LLC ("Trajectory," and together with Wellington, BAMCO, Marsico,
BlackRock, Cohen and Steers and Cadence, the "Subadvisers"), approved the
continuation of the Investment Advisory and Management Agreements between the
Trust, on behalf of each of the Funds and SunAmerica (the "Advisory
Agreements"), each for a one-year period ending June 30, 2018 at an in-person
meeting held on June 6-7, 2017 (the "Meeting"). The Trust currently consists of
the following seven separate Funds: 2020 High Watermark Fund (the "2020 Fund"),
the AIG Global Trends Fund (the "Global Trends Fund"), the AIG Commodity
Strategy Fund (the "Commodity Strategy Fund"), the AIG Focused Multi-Cap Growth
Fund (the "Multi-Cap Growth Fund"), the AIG Focused Alpha Large-Cap Fund (the
"Alpha Large-Cap Fund"), the AIG Income Explorer Fund (the "Income Explorer
Fund"), and the AIG Small-Cap Fund (the "Small-Cap Fund").
At the Meeting, the Board, including the Independent Trustees, also approved
the continuation of the Subadvisory Agreement among SunAmerica, Trajectory and
the Trust with respect to the 2020 Fund, the Subadvisory Agreement between
SunAmerica and Wellington with respect to the Global Trends Fund and Commodity
Strategy Fund, the Subadvisory Agreement between SunAmerica and Marsico with
respect to each of the Multi-Cap Growth Fund and Alpha Large-Cap Fund, the
Subadvisory Agreement between SunAmerica and BAMCO with respect to the
Multi-Cap Growth Fund, the Subadvisory Agreement between SunAmerica and
BlackRock with respect to the Alpha Large-Cap Fund, the Subadvisory Agreement
between SunAmerica and Cohen and Steers with respect to the Income Explorer
Fund, each for a one-year period ending June 30, 2018 (the "Subadvisory
Agreements," and together with the Advisory Agreements, the "Agreements")./1/
In accordance with Section 15(c) of the 1940 Act, the Board requested, and
SunAmerica and the Subadvisers provided, materials relating to the Board's
consideration of whether to approve the continuation of the Advisory Agreements
and Subadvisory Agreements. These materials included, among other things: (a) a
summary of the services provided to the Funds by SunAmerica and its affiliates,
and by the Subadvisers; (b) information independently compiled and prepared by
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent third-party
provider of mutual fund data, on fees and expenses of the Funds, and the
investment performance of the Funds as compared with a peer group of funds,
along with fee and performance data with respect to the Funds and any other
mutual funds or other accounts advised or subadvised by SunAmerica or the
Subadvisers with similar investment objectives and/or strategies, as
applicable; (c) information on the profitability of SunAmerica and its
affiliates, and a discussion relating to indirect benefits; (d) information
relating to economies of scale; (e) information about SunAmerica's general
compliance policies and procedures and the services it provides in connection
with its oversight of subadvisers; (f) information on SunAmerica's and the
Subadvisers' risk management processes; (g) information regarding brokerage and
soft dollar practices; and (h) information about the key personnel of
SunAmerica and its affiliates, and the Subadvisers, that are involved in the
investment management, administration, compliance and risk management
activities with respect to the Funds, as well as current and projected staffing
levels and compensation practices.
In determining whether to approve the continuation of the Advisory Agreements
and Subadvisory Agreements, the Board, including the Independent Trustees,
considered at the Meeting, and from time to time, as appropriate, factors that
it deemed relevant, including the following information:
Nature, Extent and Quality of Services Provided by SunAmerica and the
Subadvisers. The Board, including the Independent Trustees, considered the
nature, extent and quality of services provided by SunAmerica. The Board noted
that the services include acting as investment manager and adviser to the
Funds, managing the daily business affairs of the Funds, and obtaining and
evaluating economic, statistical and financial information to formulate and
implement investment policies. Additionally, the Board observed that SunAmerica
provides office space, bookkeeping, accounting, legal, and compliance, clerical
and administrative services and
--------
/1/ At an in-person meeting of the Board of Trustees held on June 7-8, 2016,
the Board approved a new Subadvisory Agreement between SunAmerica, on
behalf of the Small-Cap Fund, and Cadence for an initial term ending on
June 30, 2018. Therefore, the Board did not consider the Subadvisory
Agreement with respect to the Small-Cap Fund at the Meeting.
97
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2017 -- (unaudited) (continued)
has authorized its officers and employees, if elected, to serve as officers or
trustees of the Trust without compensation. The Board also noted that
SunAmerica is responsible for monitoring and reviewing the activities of
affiliated and unaffiliated third-party service providers, including the
Subadvisers. In addition to the quality of the advisory services provided by
SunAmerica, the Board considered the quality of the administrative and other
services provided by SunAmerica to the Funds pursuant to the Advisory
Agreements.
In connection with the services provided by SunAmerica, the Board analyzed the
structure and duties of SunAmerica's fund administration, accounting,
operations, legal and compliance departments and concluded that they were
adequate to meet the needs of the Funds. The Board also reviewed the personnel
responsible for providing advisory services to the Funds and other key
personnel of SunAmerica, in addition to current and projected staffing levels
and compensation practices. The Board concluded, based on its experience and
interaction with SunAmerica, that: (i) SunAmerica would continue to be able to
retain quality investment and other personnel; (ii) SunAmerica has exhibited a
high level of diligence and attention to detail in carrying out its advisory
and other responsibilities under the Advisory Agreements; (iii) SunAmerica has
been responsive to requests of the Board; and (iv) SunAmerica has kept the
Board apprised of developments relating to the Funds and the industry in
general. The Board concluded that the nature and extent of services provided
under the Advisory Agreements were reasonable and appropriate in relation to
the management fee and that the quality of services continues to be high.
The Board also considered SunAmerica's reputation and relationship with the
Funds and considered the benefit to shareholders of investing in funds that are
part of a family of funds offering a variety of types of mutual funds and
shareholder services. The Board considered SunAmerica's experience in providing
management and investment advisory and administrative services to advisory
clients and noted that as of March 31, 2017, SunAmerica managed, advised and/or
administered approximately $83.9 billion in assets. In addition, the Board
considered SunAmerica's code of ethics and its commitment to compliance
generally and with respect to its management and administration of the Funds.
The Board also considered SunAmerica's risk management processes. The Board
further observed that SunAmerica has developed internal procedures for
monitoring compliance with the investment objectives, policies and restrictions
of the Funds as set forth in the Funds' prospectuses. The Board also reviewed
SunAmerica's compliance and regulatory history and noted that there were no
material legal, regulatory or compliance issues that would potentially impact
SunAmerica in effectively serving as the investment adviser to the Funds.
The Board also considered the nature, extent and quality of services provided
by each Subadviser to the applicable Funds. The Board observed that the
Subadvisers are responsible for providing day-to-day investment management
services, including investment research, advice and supervision, and
determining which securities will be purchased or sold by the Fund that each
Subadviser manages, subject to the oversight and review of SunAmerica. The
Board reviewed each Subadviser's history, structure, size, visibility and
resources, which are needed to attract and retain highly qualified investment
professionals. The Board reviewed the personnel that are responsible for
providing subadvisory services to the Funds and other key personnel of the
Subadvisers, in addition to current and projected staffing levels and
compensation practices, and concluded, based on its experience with each
Subadviser, that each Subadviser: (i) has been able to retain high quality
portfolio managers and other investment personnel; (ii) has exhibited a high
level of diligence and attention to detail in carrying out its responsibilities
under the applicable Subadvisory Agreement; and (iii) has been responsive to
requests of the Board and of SunAmerica. In addition, the Board considered each
Subadviser's code of ethics and risk management processes. The Board further
observed that each Subadviser has developed internal policies and procedures
for monitoring compliance with the investment objectives, policies and
restrictions of the Funds as set forth in the Funds' prospectuses. The Board
also reviewed each Subadviser's compliance and regulatory history and noted
that there were no material legal, regulatory or compliance issues that would
potentially impact the Subadvisers in effectively serving as subadvisers to the
Funds. The Board concluded that the nature and extent of services provided by
the Subadvisers under the Subadvisory Agreements were reasonable and
appropriate in relation to the subadvisory fees and that the quality of
services continues to be high.
Investment Performance. The Board, including the Independent Trustees, also
considered the investment performance of SunAmerica and the Subadvisers with
respect to the Funds. In connection with its review, the Board received and
reviewed information regarding the investment performance of the Funds as
compared to each Fund's peer universe ("Peer Universe") and/or peer group
("Peer Group") as independently determined by Broadridge and to an appropriate
index or combination of indices. The Board was provided with a description of
the methodology used by Broadridge to select the funds in the Peer Groups and
Peer Universes.
98
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2017 -- (unaudited) (continued)
The Board noted that performance information was for the periods ended
March 31, 2017. The Board also noted that it regularly reviews the performance
of the Funds throughout the year. The Board further noted that, while it
monitors performance of the Funds closely, it generally attaches more
importance to performance over relatively long periods of time, typically three
to five years.
2020 Fund. The Board considered that the 2020 Fund's performance was below the
medians of its Peer Group and Peer Universe for the one-, three- and five-year
periods. The Board further considered that the Fund underperformed its
Broadridge Index for the one-, three- and five-year periods. The Board also
considered that the 2020 Fund has certain restrictions on its investment
techniques in connection with the Master Agreement that backs the payment
undertaking on the Fund and that, due to these restrictions, the Fund's fixed
income exposures were significantly higher than those of the funds in the Peer
Universe, which can cause the Fund's relative ranking within the Peer Universe
to change significantly from period to period. The Board therefore acknowledged
the inherent limitations in comparing the 2020 Fund to its Peer Universe,
noting that while the Fund generally tailors its portfolio's risk level over
time in a manner similar to ordinary target date funds, the Fund also seeks to
preserve principal and investment gains at the Fund's protected maturity date
and is therefore subject to restrictions in the Master Agreement that backs the
payment undertaking. In view of the above considerations, the Board concluded
that the Fund's performance was satisfactory.
Commodity Strategy Fund. The Board considered that the Fund's performance was
below the medians of its Peer Group and Peer Universe for the one-year period.
The Board also considered that the Fund underperformed its Broadridge Index for
the one-year period. The Board noted management's discussion of the Fund's
performance and the fact that Wellington had begun managing the Fund as of
September 2015 under the Fund's new name and investment strategies. The Board
also considered management's close monitoring of the Fund, and concluded that
the Fund's performance was being addressed.
Global Trends Fund. The Board considered that the Fund's performance was below
the medians of its Peer Group and Peer Universe for the one-, three- and
five-year periods. The Board also considered that the Fund underperformed its
Broadridge Index for the one-, three- and five-year periods. The Board noted
the inherent limitations in comparing this Fund to its Peer Group and Peer
Universe. In particular, the Board noted that the Peer Group and Peer Universe
for the Fund consisted primarily of funds in the "flexible portfolio" category
due to the relative lack of funds that share the Fund's unique investment
strategies. The Board noted that Wellington, the Fund's subadviser replaced the
portfolio manager for the Fund, effective April 2016. The Board then noted
management's discussion of the Fund's performance, including management's
continued monitoring and review of the Fund, and concluded that the Fund's
performance was being addressed.
Multi-Cap Growth Fund. The Board considered that the Fund's performance was
below its Peer Group median for the one-year period and above its Peer Group
median for the three- and five-year periods. The Board further considered that
the Fund's performance was below the median of its Peer Universe for the one-,
three- and five-year periods. The Board also noted that the Fund underperformed
its Broadridge Index for the one-, three- and five-year periods. The Board
noted management's discussion of the Fund's performance, including management's
continued monitoring and review of the Fund. The Board concluded that the
Fund's performance was being addressed.
Alpha Large-Cap Fund. The Board considered that the Fund's performance was
above the median of its Peer Group for the one-year period, below the median of
its Peer Group for the three- year period and equal to the median of its Peer
Group for the five-year period. The Board also considered that the Fund's
performance was above the median of its Peer Universe for the one-and five-year
periods and below the median of its Peer Universe for the three-year period.
The Board further noted that the Fund underperformed its Broadridge Index for
the one- and three-year periods and outperformed its Broadridge Index for the
five-year period. The Board noted the recently improved performance of the Fund
and management's continued monitoring and review of the Fund. The Board
concluded that the Fund's performance was being addressed.
Income Explorer Fund. The Board noted that the Fund's performance was above the
medians of its Peer Group and Peer Universe for the one- and three-year
periods. The Board further noted that the Fund outperformed its Broadridge
Index for the one- and three-year periods. The Board concluded that the Fund's
performance was satisfactory.
Small-Cap Fund. The Board noted that the Fund's performance was above the
medians of its Peer Group and Peer Universe for the one- and three-year
periods. The Board further noted that the Fund outperformed its Broadridge
Index for the one- and three-year periods. The Board concluded that the Fund's
performance was satisfactory.
99
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2017 -- (unaudited) (continued)
Consideration of the Management Fees and Subadvisory Fees and the Cost of the
Services and Profits to be Realized by SunAmerica and the Subadvisers and their
Affiliates from the Relationship with the Funds. The Board, including the
Independent Trustees, received and reviewed information regarding the fees to
be paid by the Funds to SunAmerica pursuant to the Advisory Agreements and the
fees paid by SunAmerica to the Subadvisers pursuant to the Subadvisory
Agreements. The Board examined this information in order to determine the
reasonableness of the fees in light of the nature and quality of services to be
provided and any potential additional benefits to be received by SunAmerica,
the Subadvisers or their affiliates in connection with providing such services
to the Funds.
To assist in analyzing the reasonableness of the management fee for each of the
Funds, the Board received reports independently prepared by Broadridge. The
reports showed comparative fee information for each Fund's Peer Group and/or
Peer Universe as determined by Broadridge, including rankings within each
category. In considering the reasonableness of the management fee to be paid by
each Fund to SunAmerica, the Board reviewed a number of expense comparisons,
including: (i) contractual and actual management fees; and (ii) actual total
operating expenses. In considering each Fund's total operating expenses, the
Board analyzed the level of fee waivers and expense reimbursements and the net
expense caps contractually agreed upon by SunAmerica with respect to the Funds,
as applicable. The Board also considered the voluntary fee waivers and/or
expense reimbursements being made by SunAmerica with respect to the 2020 Fund
in order to prevent an Early Closure Condition from occurring. The Board
further considered that, unlike the funds in the Peer Group and Peer Universe,
the fee waivers and/or reimbursements being made by SunAmerica with respect to
the Funds are only reflected in the total expenses category of the Broadridge
reports, rather than also being reflected as specific management fee waivers in
the actual management fees category of the Broadridge reports. As a result, the
Board took into account that the actual management fees presented by Broadridge
for the funds in the applicable Peer Groups and Peer Universes may appear lower
on a relative basis. The Board also considered the various expense components
of the Funds and compared each Fund's net expense ratio (taking into account
the contractual fee caps) to those of other funds within its Peer Group and/or
Peer Universe as a guide to help assess the reasonableness of the management
fee for the Funds. The Board acknowledged that it was difficult to make precise
comparisons with other funds in the Peer Groups and Peer Universes since the
exact nature of services provided under the various fund agreements is often
not apparent. The Board noted, however, that the comparative fee information
provided by Broadridge as a whole was useful in assessing whether SunAmerica
was providing services at a cost that was competitive with other, similar funds.
The Board also considered the management fees received by SunAmerica with
respect to other mutual funds and accounts with similar investment strategies
to the Funds, to the extent applicable. The Board noted, however, that the
mutual funds identified as similar to the Funds are sold only in the variable
annuity market and, accordingly, are in different Broadridge classifications,
with a peer groups consisting of funds underlying variable insurance products.
The Board also received and reviewed information regarding the fees paid by
SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. To assist
in analyzing the reasonableness of the subadvisory fees, the Board received a
report prepared independently by Broadridge. The report showed comparative fee
information of each Fund's Peer Group and/or Peer Universe that the Trustees
used as a guide to help assess the reasonableness of the subadvisory fees. The
Trustees noted that Peer Group and/or Peer Universe information as a whole was
useful in assessing whether the Subadvisers were providing services at a cost
that was competitive with other similar funds. The Trustees also considered
that the subadvisory fees are paid by SunAmerica out of its management fees and
not by the Funds, and that subadvisory fees may vary widely within a Peer Group
for various reasons, including market pricing demands, existing relationships,
experience and success, and individual client needs. The Board further
considered the amount of subadvisory fees paid by SunAmerica and the amount of
the management fees which it retained and determined that these amounts were
reasonable in light of the services performed by SunAmerica and the
Subadvisers, respectively.
The Board also considered fees received by the Subadvisers with respect to
other mutual funds and accounts with similar investment strategies to the Funds
for which they serve as adviser or subadviser, as applicable. The Board
observed that the similar accounts identified by Wellington were institutional
separate accounts, and Wellington highlighted certain differences between these
separate accounts and the Commodity Strategy Fund, including that these
separate accounts are subject to different investment limitations and
restrictions and do not experience daily cash flows in a manner similar to the
Fund. The Board then noted that the subadvisory fees paid by SunAmerica to the
Subadvisers were reasonable as compared to fees the applicable Subadvisers
receive for other comparable accounts for which they serve as adviser or
subadviser.
100
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2017 -- (unaudited) (continued)
In connection with its renewal of the Subadvisory Agreement with respect to the
2020 Fund, the Board was also asked to approve the continuation of an
arrangement whereby SunAmerica agrees to pay a minimum annual fee to Trajectory
(the "Minimum Fee Arrangement"). The Minimum Fee Arrangement was initially
approved by the Board at its August 29, 2006 meeting, and continues in effect
for successive annual periods ending October 31, upon mutual agreement of
SunAmerica and Trajectory, and subject to approval by the Board, including a
majority of the Independent Trustees. The Minimum Fee Arrangement, which is
reflected in the Subadvisory Agreement, provides that SunAmerica pay Trajectory
a minimum fee equal to 0.20% of the 2020 Fund's average daily net assets,
accrued daily and payable monthly. Effective as of October 1, 2014 until
October 31, 2015, SunAmerica agreed to pay Trajectory a minimum annual fee
equal to the greater of 0.20% of the Fund's average daily net assets, accrued
daily and payable monthly, or $38,500 per month. This amendment also provides
that the minimum fee would continue in effect for successive annual periods
ending October 31, upon mutual agreement of SunAmerica and Trajectory, and
subject to approval by the Board, including a majority of the Independent
Trustees. The Board noted that the Minimum Fee Arrangement provides for a
reasonable allocation of fees among SunAmerica and Trajectory and would result
in SunAmerica retaining less of the management fees. The Board further noted
that the Minimum Fee Arrangement did not modify the services provided under the
Subadvisory Agreement nor did it impact the fee payable by the Funds pursuant
to the Advisory Agreement. The Board, including a majority of the Independent
Trustees, approved the continuation of the Minimum Fee Arrangement for a
one-year period ending October 31, 2018.
2020 Fund. The Board considered that the 2020 Fund's actual management fees
were above the medians of its Peer Group and Peer Universe. The Board also
considered that the 2020 Fund's total expenses were above the medians of its
Peer Group and Peer Universe. The Board noted management's discussion regarding
the Funds' expenses, including the limited size of the Peer Group and Peer
Universe.
Commodity Strategy Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
Global Trends Fund. The Board considered that the Fund's actual management fees
were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
Multi-Cap Growth Fund. The Board considered that the Fund's actual management
fees were above the medians for its Peer Group and Peer Universe. The Board
also considered that the Fund's total expenses were above the medians of its
Peer Group and Peer Universe. The Board noted management's discussion regarding
the Fund's expenses.
Alpha Large-Cap Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
Income Explorer Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
Small-Cap Fund. The Board considered that the Fund's actual management fees
were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted management's discussion regarding the
Fund's expenses.
Profitability. The Board also considered SunAmerica's profitability and the
benefits SunAmerica and its affiliates received from their relationship with
the Funds. The Board received and reviewed financial statements relating to
SunAmerica's financial condition and profitability with respect to the services
it provided the Funds and considered how profit margins could affect
SunAmerica's ability to attract and retain high quality investment
professionals and other key personnel. The Board was also provided with a
profitability analysis that detailed the revenues earned and the expenses
incurred by SunAmerica and its affiliates that provide services to the Funds on
a Fund by Fund basis. In particular, the Board considered the contractual fee
waivers and/or expense reimbursements agreed to by SunAmerica, and also
considered the voluntary waivers and/or expense reimbursements being made by
SunAmerica in connection with the 2020 Fund.
101
SunAmerica Specialty Series
APPROVAL OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS AND
SUBADVISORY AGREEMENTS -- October 31, 2017 -- (unaudited) (continued)
The Board considered the profitability of SunAmerica under the Advisory
Agreements, including the amount of management fees it retained after payment
to the Subadvisers, and considered the profitability of SunAmerica's affiliates
under the Rule 12b-1 Plans, Service Agreements and Administrative and
Shareholder Services Agreement. Additionally, the Board considered whether
SunAmerica, the Subadvisers and their affiliates received any indirect benefits
from the relationship with the Funds. Specifically, the Board observed that AIG
Federal Savings Bank, an affiliate of SunAmerica serves as custodian with
respect to certain shareholder retirement accounts that are administered by
SunAmerica and receives a fee payable by the qualifying shareholders. The Board
further considered whether there were any collateral or "fall-out" benefits
that SunAmerica and its affiliates may derive as a result of their relationship
with the Funds. The Board noted that SunAmerica believes that any such benefits
are de minimis and do not impact the reasonableness of the management fees.
The Board also reviewed financial statements and/or other information from the
Subadvisers and their affiliates and considered whether the Subadvisers had the
financial resources necessary to attract and retain high quality investment
management personnel and to provide a high quality of services.
The Board concluded that SunAmerica and the Subadvisers had the financial
resources necessary to perform their obligations under the Agreements and to
continue to provide the Funds with the high quality services that they had
provided in the past. The Board also concluded that the management fee and
subadvisory fees were reasonable in light of the factors discussed above.
Economies of Scale. The Board, including the Independent Trustees, considered
whether the shareholders would benefit from economies of scale and whether
there was potential for future realization of economies with respect to the
Funds. The Board considered that as a result of being part of the SunAmerica
fund complex, the Funds share common resources and may share certain expenses,
and if the size of the complex increases, each Fund could incur lower expenses
than they otherwise would achieve as stand-alone entities. The Board further
noted that SunAmerica has agreed to contractually cap the total annual
operating expenses of each class of the Funds, at certain levels. The Board
observed that those expense caps benefited shareholders by limiting total fees
even in the absence of breakpoints or economies of scale. The Board concluded
that the Funds' management fee structure was reasonable and that it would
continue to review fees in connection with the renewal of the Advisory
Agreements, including whether the implementation of breakpoints would be
appropriate in the future due to an increase in asset size or otherwise.
The Board noted that the Subadvisory Agreements with respect to certain of the
Funds included breakpoints, but did not review specific information regarding
whether there have been economies of scale with respect to the Subadvisers'
management of the Funds because it regards that information as less relevant at
the subadviser level. Rather, the Board considered information regarding
economies of scale in the context of the renewal of the Advisory Agreements and
concluded that the management fee structure, including the amount of management
fees retained by SunAmerica, was reasonable in light of the factors discussed
above.
Other Factors. In consideration of the Agreements, the Board also received
information regarding SunAmerica's and the Subadvisers' brokerage and soft
dollar practices. The Board considered that SunAmerica and the Subadvisers are
responsible for decisions to buy and sell securities for the applicable Funds,
selection of broker-dealers and negotiation of commission rates. The Board
noted that it receives reports from SunAmerica and from an independent third
party that include information on brokerage commissions and execution
throughout the year. The Board also considered the benefits SunAmerica and the
Subadvisers derive from their soft dollar arrangements, including arrangements
under which brokers provide brokerage and/or research services to SunAmerica
and/or the Subadvisers in return for allocating brokerage.
Conclusion. After a full and complete discussion, the Board approved the
Agreements, each for a one-year period ending June 30, 2018. Based upon their
evaluation of all these factors in their totality, the Board, including the
Independent Trustees, was satisfied that the terms of the Agreements, were fair
and reasonable and in the best interests of the Funds and the Funds'
shareholders. In arriving at a decision to approve the Agreements, the Board
did not identify any single factor or group of factors as all-important or
controlling, but considered all factors together, and each Independent Trustee
may have attributed different weights to different factors. The Independent
Trustees were also assisted by the advice of independent legal counsel in
making this determination.
102
SunAmerica Specialty Series
TRUSTEE AND OFFICER INFORMATION -- October 31, 2017 -- (unaudited)
The following table contains basic information regarding the Trustees and
Officers that oversee operations of the Funds and other investment companies
within the Fund complex.
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Age* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
----------------------- ---------- -------------- ----------------------------- ------------- -------------------------------
Disinterested Trustees
Dr. Judith L. Craven Trustee 2001-present Retired. 77 Director, Sysco Corp. (1996
Age: 72 to present); Director, Luby's,
Inc. (1998 to present).
William F. Devin Trustee 2001-present Retired. 77 None
Age: 78
Richard W. Grant Trustee 2011-present Retired. 28 None
Age: 72 Chairman
of the
Board
Stephen J. Gutman Trustee 1985-present Vice President and Associate 28 None
Age: 74 Broker, Corcoran Group (real
estate) (2002 to present);
President, SJG Marketing
Inc. (2009 to present).
Interested Trustee
Peter A. Harbeck(3) Trustee 1995-present President, CEO and Director, 152 None
Age: 63 SunAmerica. (1995 to
present); Director, AIG
Capital Services, Inc.
("ACS") (1993 to present).
103
SunAmerica Specialty Series
TRUSTEE AND OFFICER INFORMATION -- October 31, 2017 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Age* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
-------------------- ------------ -------------- ----------------------------- ------------- -------------------
Officers
John T. Genoy President 2007-present Chief Financial Officer, N/A N/A
Age: 48 SunAmerica (2002 to
present); Senior Vice
President, SunAmerica (2003
to present); Chief Operating
Officer, SunAmerica (2006
to present).
Gregory N. Bressler Secretary 2005-present Senior Vice President and N/A N/A
Age: 50 General Counsel,
SunAmerica (2005 to
present).
Kathleen Fuentes Chief Legal 2013-present Vice President and Deputy N/A N/A
Age: 48 Officer and General Counsel,
Assistant SunAmerica (2006 to
Secretary present)
James Nichols Vice 2006-present Director, President and CEO, N/A N/A
Age: 51 President ACS (2006 to present);
Senior Vice President,
SunAmerica (2002 to
present).
Kara Murphy Vice 2014-present Director of Research, N/A N/A
Age: 44 President SunAmerica (2007 to 2013);
Chief Investment Officer,
SunAmerica (2013 to
present).
Gregory R. Kingston Treasurer 2014-present Vice President and Head of N/A N/A
Age: 51 Mutual Fund Administration,
SunAmerica (2014 to
present).
Shawn Parry Vice 2014-present Vice President (2014 to N/A N/A
Age: 45 President present); Assistant Vice
and President, SunAmerica
Assistant (2005 to 2014)
Treasurer
Donna McManus Vice 2014-present Vice President, SunAmerica, N/A N/A
Age: 56 President (2014 to present), Managing
and Director, BNY Mellon
Assistant (2009-2014).
Treasurer
104
SunAmerica Specialty Series
TRUSTEE AND OFFICER INFORMATION -- October 31, 2017 -- (unaudited)
(continued)
Number of
Position Term of Portfolios in
Name, Held With Office and Fund Complex
Address and SunAmerica Length of Principal Occupations Overseen by Other Directorships
Age* Complex Time Served(4) During Past 5 Years Trustee(1) Held by Trustee(2)
--------------------- ----------- -------------- ------------------------------ ------------- -------------------
Christopher C. Joe Chief 2017 to Chief Compliance Officer, N/A N/A
Age: 47 Compliance Present AIG Funds, Anchor Series
Officer Trust, Seasons Series Trust,
SunAmerica Series Trust,
VALIC Company I and
VALIC Company II (2017-
Present); Chief Compliance
Officer, VALIC Retirement
Services Company (2017-
Present); Chief Compliance
Officer, Invesco PowerShares
(2012-2017); Chief
Compliance Officer, Invesco
Investment Advisers, LLC
(2010-2013); U.S.
Compliance Director,
Invesco Ltd. (2006-2014);
Deputy Chief Compliance
Officer, Invesco Advisers,
LLC (2014-2015).
Matthew J. Hackethal Anti-Money 2006-present Acting Chief Compliance N/A N/A
Age: 45 Laundering Officer (2016 to 2017); Chief
Compliance Compliance Officer,
Officer SunAmerica (2006 to
present) and Vice President,
SunAmerica (2011-Present).
--------
* The business address for each Trustee is the Harborside 5, 185 Hudson
Street, Suite 3300, Jersey City, NJ 07311-4992.
(1) The "Fund Complex" means two or more registered investment companies that
hold themselves out to investors as related companies for purposes of
investment services or have a common investment adviser or an investment
adviser that is an affiliated person of the Adviser. The "Fund Complex"
includes the Trust (7 funds), SunAmerica Money Market Funds Inc. (1 fund),
SunAmerica Equity Funds (2 funds), SunAmerica Income Funds (3 funds),
SunAmerica Series, Inc. (6 portfolios), Anchor Series Trust (8 portfolios),
SunAmerica Senior Floating Rate Fund, Inc. (1 fund), SunAmerica Series
Trust (55 portfolios), VALIC Company I (34 portfolios), VALIC Company II
(15 funds), Seasons Series Trust (20 portfolios).
(2) Directorships of companies required to report to the SEC under the
Securities Exchange Act of 1934 (i.e., "public companies") or other
investment companies registered under the 1940 Act.
(3) Interested Trustee, as defined within the 1940 Act, because he is an
officer and a director of the Adviser and a director of the principal
underwriter of the Trust.
(4) Trustees serve until their successors are duly elected and qualified. Each
officer will hold office for an indefinite term, until the date he or she
resigns or retires or until his/her successor is duly elected and qualifies.
Additional information concerning the Trustees is contained in the Statement of
Additional Information which is available, without charge, by calling (800)
858-8850.
105
SunAmerica Specialty Series
SHAREHOLDER TAX INFORMATION -- October 31, 2017 -- (unaudited)
Certain tax information regarding SunAmerica Specialty Series is required to be
provided to shareholders based upon each Fund's income and distributions for
the taxable period ended October 31, 2017. The information and distributions
reported herein may differ from the information and distributions taxable to
the shareholders for the calendar year end December 31, 2017. The information
necessary to complete your income tax returns will be included with your Form
1099-DIV to be received under separate cover in early 2018.
During the period ended October 31, 2017, the Funds paid the following
long-term capital gains along with the percentage of ordinary income dividends
that qualified for the 70% dividends received deductions for corporations.
Qualifying % for the
Net Long-Term 70% Dividends
Fund Capital Gains Received Deduction
---- ------------- --------------------
AIG Commodity Strategy....... $ -- --%
AIG ESG Dividend............. -- --
AIG Focused Alpha Large-Cap.. -- --
AIG Focused Multi-Cap Growth. 7,760,491 --
AIG Global Trends............ -- --
AIG Income Explorer.......... -- 9.54
AIG Small-Cap................ 1,432,026 --
For the year ended October 31, 2017, certain dividends paid by the following
Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs
and Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid
during the fiscal year, the following represents the maximum amount that may be
considered qualified dividend income:
Fund Amount
---- ----------
AIG Commodity Strategy....... $ --
AIG ESG Dividend............. --
AIG Focused Alpha Large-Cap.. --
AIG Focused Multi-Cap Growth. --
AIG Global Trends............ --
AIG Income Explorer.......... 1,216,609
AIG Small-Cap................ --
106
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited)
As required by the Securities and Exchange Commission, the graphs on the
following pages compare the performance of a $10,000 investment in the
SunAmerica Specialty Series' Funds to a similar investment in an index or
indices. Please note that "inception," as used herein, reflects the date on
which a specific class of shares commenced operations. It is important to note
that the SunAmerica Specialty Series' Funds are professionally managed mutual
funds, while the indices are not available for investment and are unmanaged.
The comparison is shown for illustrative purposes only. The graphs present the
performance of the largest class of that particular Fund. The performance of
the other classes will vary based upon the difference in sales charges and fees
assessed to shareholders of that class.
107
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Commodity Strategy Fund
For the annual period ended October 31, 2017, Class A shares of the AIG
Commodity Strategy Fund returned 0.71% (before maximum sales charge),
underperforming the Fund's benchmark, the Bloomberg Commodity Index,/*/ which
returned 2.35% for the same period. To compare, the S&P 500 Index,/*/ a
broad-based equity market index, returned 23.63% for the same period.
The Fund seeks to provide long-term total return through a strategy that is
designed to provide diversified exposure to the commodities markets by
investing its assets in a combination of commodity-linked derivative
instruments and fixed income securities. A portion of the Fund's assets are
managed pursuant to an index strategy designed to track, before fees and
expenses, the performance of the Bloomberg Commodity Index (the "Index"), and a
portion of the Fund's assets are managed pursuant to an active strategy
designed to outperform the Index. The Fund does not invest directly in
commodities.
The annual period was one of mixed results for commodities. The energy sector
rallied following the November 2016 OPEC meeting, where a production cut was
announced to begin January 1, 2017 - the first cut in eight years. By the end
of the annual period, production cuts, combined with robust global oil demand,
resulted in an oil deficit. In turn, crude oil breached the $50 per barrel
mark. Conversely, natural gas lagged as warmer winter months - including the
warmest February since 1970 - lowered demand for heat. After multiple
hurricanes impaired the southeastern U.S., natural gas demand took another hit,
and prices fell to the lowest level since 2011. The agriculture and livestock
sector was the weakest performer. Lean hog and live cattle herds entered 2017
at fairly elevated levels, but cheap feed prices continued to push numbers
higher. Sugar, the weakest performing commodity, moved lower on expectations of
decreased demand from India. Wheat also fell due to adverse weather conditions
in the U.S., and the U.S. Department of Agriculture raised its forecast for
wheat inventories during the third quarter of 2017. Industrial metals overall
was the strongest performing sector due to healthy levels of Chinese demand and
limited supply growth. Copper and zinc were the best-performing metals.
Broadly, base metal inventories were at their lowest point since 2008.
Virtually all metals rallied to end the annual period on the back of resilient
Chinese demand and supply-side reform in China, which aims to remove excess
capacity from the industry. Precious metals were weaker, as U.S. interest rate
hikes served as a headwind for both gold and silver. Toward the end of the
annual period, heightened geopolitical tensions, specifically between the U.S.
and North Korea, helped counter the impact from higher interest rates.
Security selection detracted from the Fund's relative results during the annual
period, particularly within live cattle and sugar. Exposure to uranium, an
out-of-benchmark allocation, also detracted. Partially offsetting these
detractors was effective security selection within natural gas and wheat, which
contributed positively. Commodity contract selection contributed positively to
the Fund's relative results, especially in gasoline and crude oil, driven by
positioning along the oil future curve and favoring Brent oil over West Texas
Intermediate oil. Sector allocation also boosted the Fund's relative
performance, due primarily to its overweight to industrial metals and its
underweight to agriculture and livestock. An underweight allocation to precious
metals and an overweight to energy dampened relative results.
--------
Past performance is no guarantee of future results. Diversification does not
guarantee a profit or protect against a loss.
* The Bloomberg Commodity Index is a broadly diversified commodity price
index made up of 22 exchange-traded futures on physical commodities weighted to
account for economic significance and market liquidity. The S&P 500 Index is an
unmanaged, weighted index of 500 large company stocks that is widely recognized
as representative of the performance of the U.S. stock market. Indices are not
managed and an investor cannot invest directly in an index.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be a part of current portfolio
construction.
108
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in AIG Commodity Strategy Fund Class A shares
would be valued at $7,264. The same amount invested in securities mirroring the
performance of the Bloomberg Commodity Index and the S&P 500 Index would be
valued at $6,675 and $32,378, respectively.
[CHART]
SunAmerica
Commodity Bloomberg
Date Strategy Class A# Commodity Index++ S&P 500 Index@
-------- ------------------- ----------------- --------------
11/4/2008 9,425 10,000 10,000
11/30/2008 9,133 9,349 9,306
12/31/2008 8,935 8,930 9,405
1/31/2009 8,586 8,450 8,612
2/28/2009 8,294 8,076 7,695
3/31/2009 8,558 8,367 8,369
4/30/2009 8,718 8,428 9,170
5/31/2009 9,293 9,524 9,683
6/30/2009 9,284 9,343 9,702
7/31/2009 9,406 9,645 10,436
8/31/2009 9,425 9,588 10,813
9/30/2009 9,510 9,739 11,217
10/31/2009 9,632 10,059 11,008
11/30/2009 9,802 10,412 11,668
12/31/2009 9,771 10,619 11,894
1/31/2010 9,544 9,846 11,466
2/28/2010 9,705 10,211 11,821
3/31/2010 9,828 10,084 12,535
4/30/2010 9,942 10,280 12,733
5/31/2010 9,488 9,569 11,716
6/30/2010 9,478 9,599 11,102
7/31/2010 9,601 10,249 11,880
8/31/2010 9,478 9,989 11,344
9/30/2010 9,733 10,714 12,356
10/31/2010 9,942 11,248 12,827
11/30/2010 9,875 11,208 12,828
12/31/2010 10,223 12,406 13,686
1/31/2011 10,457 12,530 14,010
2/28/2011 10,535 12,695 14,490
3/31/2011 10,672 12,958 14,496
4/30/2011 10,837 13,406 14,925
5/31/2011 10,457 12,723 14,756
6/30/2011 10,106 12,086 14,510
7/31/2011 10,291 12,444 14,215
8/31/2011 11,237 12,568 13,443
9/30/2011 11,452 10,716 12,498
10/31/2011 10,457 11,426 13,864
11/30/2011 10,525 11,172 13,833
12/31/2011 10,270 10,753 13,975
1/31/2012 9,587 11,019 14,601
2/29/2012 9,557 11,317 15,233
3/31/2012 9,200 10,849 15,734
4/30/2012 9,180 10,803 15,635
5/31/2012 9,618 9,816 14,695
6/30/2012 9,241 10,355 15,301
7/31/2012 9,292 11,025 15,513
8/31/2012 9,261 11,168 15,863
9/30/2012 9,047 11,359 16,273
10/31/2012 8,884 10,919 15,972
11/30/2012 8,792 10,925 16,065
12/31/2012 8,670 10,640 16,211
1/31/2013 8,650 10,895 17,051
2/28/2013 8,507 10,450 17,283
3/31/2013 8,568 10,520 17,931
4/30/2013 8,263 10,226 18,276
5/31/2013 8,140 9,997 18,704
6/30/2013 8,110 9,526 18,453
7/31/2013 8,212 9,655 19,391
8/31/2013 8,303 9,984 18,830
9/30/2013 8,079 9,729 19,420
10/31/2013 8,018 9,585 20,313
11/30/2013 7,988 9,509 20,932
12/31/2013 8,100 9,626 21,462
1/31/2014 8,059 9,655 20,720
2/28/2014 8,232 10,257 21,668
3/31/2014 8,191 10,299 21,850
4/30/2014 8,303 10,550 22,011
5/31/2014 8,365 10,247 22,528
6/30/2014 8,487 10,308 22,994
7/31/2014 8,232 9,794 22,676
8/31/2014 8,252 9,692 23,584
9/30/2014 7,967 9,089 23,253
10/31/2014 7,886 9,015 23,821
11/30/2014 7,784 8,649 24,461
12/31/2014 7,641 7,989 24,400
1/31/2015 7,600 7,722 23,667
2/28/2015 7,733 7,921 25,028
3/31/2015 7,662 7,514 24,632
4/30/2015 7,672 7,945 24,868
5/31/2015 7,682 7,731 25,188
6/30/2015 7,682 7,864 24,700
7/31/2015 7,600 7,029 25,218
8/31/2015 7,539 6,965 23,696
9/30/2015 7,529 6,727 23,110
10/31/2015 7,539 6,697 25,059
11/30/2015 6,948 6,211 25,134
12/31/2015 6,673 6,019 24,737
1/31/2016 6,520 5,918 23,510
2/29/2016 6,449 5,822 23,478
3/31/2016 6,714 6,044 25,071
4/30/2016 7,305 6,559 25,168
5/31/2016 7,234 6,546 25,620
6/30/2016 7,509 6,817 25,686
7/31/2016 7,173 6,468 26,633
8/31/2016 7,060 6,354 26,671
9/30/2016 7,305 6,553 26,676
10/31/2016 7,213 6,521 26,189
11/30/2016 7,356 6,608 27,159
12/31/2016 7,488 6,728 27,696
1/31/2017 7,478 6,737 28,221
2/28/2017 7,478 6,751 29,342
3/31/2017 7,213 6,571 29,376
4/30/2017 7,040 6,472 29,678
5/31/2017 6,908 6,386 30,095
6/30/2017 6,908 6,374 30,283
7/31/2017 7,091 6,518 30,906
8/31/2017 7,132 6,544 31,001
9/30/2017 7,122 6,535 31,640
10/31/2017 7,264 6,675 32,378
Class A Class C Class W
------------------ ------------------ ------------------
AIG Average Average Average
Commodity Annual Cumulative Annual Cumulative Annual Cumulative
Strategy Fund# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return -5.06% 0.71% -0.85% 0.15% 0.84% 0.84%
--------------------------------------------------------------------------
5 Year Return -5.07% -18.23% -4.51% -20.63% -3.72% -17.28%
--------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
Since Inception* -3.49% -22.93% -3.46% -27.13% -2.64% -21.35%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 11/04/08; Class C: 11/04/08; Class W: 11/04/08
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the 12 month period ended October 31, 2017, the AIG Commodity Strategy Fund
Class A returned -5.06%, compared to 2.35% for the Bloomberg Commodity Index
and 23.63% for the S&P 500 Index. (The performance data and graph do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
++ The Bloomberg Commodity Index is a broadly diversified commodity price index
made up of 22 exchange-traded futures on physical commodities weighted to
account for economic significance and market liquidity.
@ The S&P 500 Index is an unmanaged, weighted index of 500 large company stocks
that is widely recognized as representative of the performance of the U.S.
stock market.
Indices are not managed and an investor cannot invest directly into an index.
109
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG ESG Dividend Fund
Since the inception of the Fund on December 16, 2016, through October 31, 2017
(the "reporting period"), Class A shares of the AIG ESG Dividend Fund returned
5.40% (before maximum sales charge), underperforming its benchmark, the Russell
1000(R) Value Index (the "Russell 1000 Value"),/*/ which returned 7.87% for the
same reporting period.
The Fund seeks to provide total return (including capital appreciation and
current income) through a "buy and hold" strategy based on value and
Environmental, Social and Governance (ESG) investing. The Fund uses a
disciplined, proprietary rules-based screening process to identify companies
that meet the Fund's ESG standards. Companies must not generate significant
revenues from certain types of businesses that include weapons, alcohol,
tobacco, gambling and nuclear energy. Companies must not have a poor track
record in how they interact with employees, customers, the environment and the
society in which they do business. After identifying companies from the Russell
1000 Index/*/ that meet the Fund's ESG standards, the Fund then selects up to
40 dividend yielding stocks using selection criteria that will generally
include dividend yield as well as a combination of factors that relate to
profitability, valuation and ESG criteria.
During the reporting period, the Fund underperformed its benchmark primarily
because of overweight exposures to and security selection in the Consumer
Discretionary and Industrials sectors, which each lagged the Russell 1000 Value
during the reporting period. Having an underweight allocation to and security
selection within the Utilities sector, which significantly outpaced the Russell
1000 Value during the reporting period, also hurt. Having an underweight to the
strongly performing Financials sector further detracted from results. Partially
offsetting these detractors was the beneficial effect of having no exposure to
Energy, which was the second-weakest-performing sector in the Russell 1000
Value during the reporting period, generating a negative absolute return.
Having an overweight to Information Technology, which outpaced the Russell 1000
Value during the reporting period, and effective stock selection in Financials
also contributed positively to relative results. An underweight to Health Care
added value, though these gains were mostly offset by weak stock selection in
the sector.
The primary individual stock detractors from the Fund's relative results during
the reporting period were commercial printing and information services provider
RR Donnelley & Sons, restaurant operator Brinker International, Inc., specialty
electronic game and personal computer entertainment software retailer GameStop,
Corp., fashion retailer Nordstrom, Inc., and consumer foods manufacturer
General Mills, Inc. The individual stocks that contributed most to the Fund's
relative results during the reporting period included pharmaceutical products
researcher and developer AbbVie, Inc., insurance company First American
Financial Corp., technology hardware provider HP, Inc., semiconductor company
Texas Instruments, Inc., and transportation equipment manufacturer Cummins,
Inc. Further, not owning industrial and financials conglomerate General
Electric Co. and telecommunication services giant AT&T, Inc., proved
beneficial, as both companies' shares experienced double-digit declines during
the reporting period.
--------
Past performance is no guarantee of future results.
* The Russell 1000 Value Index is a market-capitalization weighted index of
those firms in the Russell 1000 Index with lower price-to-book ratios and lower
forecasted growth values. The Russell 1000 Index is a comprehensive large-cap
index measuring the performance of the largest 1,000 U.S. incorporated
companies. Indices are not managed and an investor cannot invest directly into
an index.
The Fund employs a Disciplined Strategy and will not deviate from its strategy
(except to the extent necessary to comply with federal tax laws or other
applicable laws). If the Fund is committed to a strategy that is unsuccessful,
the Fund will not meet its investment goal. Because the Fund will not use
certain techniques available to other mutual funds to reduce stock market
exposure, the Fund may be more susceptible to general market declines than
other mutual funds. ESG screening limits the availability of investment
opportunities for the Fund. If the Fund changes its ESG standards or a company
stops meeting the Fund's ESG standards, the Fund may sell the affected
investments even if this means the Fund loses money. The performance of the
Fund may be subject to greater fluctuation since its strategy involves holding
a limited number of securities.
The Fund's holdings are subject to change. Accordingly, securities listed may
or may not be a part of current portfolio construction.
110
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in AIG ESG Dividend Fund Class A shares would
be valued at $9,931. The same amount invested in securities mirroring the
performance of the Russell 1000(R) Value Index would be valued at $10,787.
[CHART]
Date AIG ESG Dividend Fund Class A# Russell 1000/R/ Value++
-------- ------------------------------ -----------------------
12/15/2016 9,422 10,000
12/31/2016 9,227 9,923
1/31/2017 9,315 9,994
2/28/2017 9,648 10,353
3/31/2017 9,655 10,248
4/30/2017 9,686 10,228
5/31/2017 9,642 10,218
6/30/2017 9,755 10,385
7/31/2017 9,818 10,523
8/31/2017 9,598 10,401
9/30/2017 9,918 10,709
10/31/2017 9,931 10,787
Class A Class C Class W
------------------ ------------------ ------------------
Average Average Average
AIG ESG Annual Cumulative Annual Cumulative Annual Cumulative
Dividend Fund# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
5 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
Since Inception* N/A 5.40% N/A 4.80% N/A 5.60%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 12/16/16; Class C: 12/16/16; Class W: 12/16/16
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the period December 16, 2016 through October 31, 2017, the AIG ESG Dividend
Fund Class A returned 5.40% (cumulative return excludes sales load), compared
to 7.87% for the Russell 1000 Value Index. (The performance data and graph do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
++ The Russell 1000 Value Index is a market-capitalization weighted index of
those firms in the Russell 1000 Index with lower price-to-book ratios and
lower forecasted growth values.
Indices are not managed and an investor cannot invest directly into an index.
111
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Focused Alpha Large-Cap Fund
For the annual period ended October 31, 2017, Class A shares of the AIG Focused
Alpha Large-Cap Fund returned 34.64% (before maximum sales charge). The Fund
outperformed its benchmark, the Russell 1000(R) Index,/*/ which returned 23.67%
for the same period.
The AIG Focused Alpha Large-Cap Fund brings together Marsico Capital Management
LLC ("Marsico") and BlackRock Investment Management ("BlackRock"), well-known
equity managers who each contribute stock picks to the Fund's portfolio.
Marsico emphasizes large-cap growth investing, while BlackRock favors a
large-cap value investment style. The Fund managers' combined stock picks,
blending different investment styles, are designed to offer the potential for
attractive returns over the long term.
Below, Tom Marsico, portfolio manager at Marsico Capital Management, discusses
Marsico's portion of the Fund's performance during the annual period. Marsico
manages the large-cap growth portion of the Fund's portfolio.
Our portion of the Fund outperformed the Russell 1000(R) Index during the
annual period due primarily to stock selection.
More specifically, within our portion of the Fund, stock selection in the
Information Technology and Consumer Discretionary sectors contributed
positively. Within Information Technology, the Fund's positions in China-based
retail conglomerate Alibaba Group Holdings, Ltd., semiconductor chipmaker
NVIDIA Corp. and payments company PayPal Holdings, Inc. were notable
contributors. In Consumer Discretionary, the Fund held only one position by the
end of the annual period, namely retail holding Amazon.com, Inc. Amazon.com,
Inc. saw its shares rise significantly during the annual period, and it was a
meaningful positive contributor to the Fund's performance. Our portion of the
Fund exited its other Consumer Discretionary positions during the annual period
as it became clear to us that Amazon.com, Inc. is disrupting several industries
and gaining market share across multiple areas. We chose to concentrate the
Fund's investments with the franchise we felt most able to benefit from the
shift in consumer habits, i.e., away from brick and mortar and toward
e-commerce. Also, a position in home improvement retailer Home Depot, Inc.,
whose stock saw a double-digit gain, contributed positively to relative results.
Elsewhere, several other positions performed well during the annual period,
boosting our portion of the Fund's relative results. These included social
media company Facebook, Inc.; hospital operator UnitedHealth Group, Inc.; and
aerospace and defense company Lockheed Martin Corp.
Such positive contributors were partially offset by stock selection in the
Financials and Health Care sectors, which hampered relative results. In
Financials, diversified financial services company Wells Fargo & Co.
experienced a single-digit share price decline during the annual period. In
Health Care, a position in Pharmaceuticals, Biotechnology & Life Sciences
industry holding Celgene Corp. disappointed most, as its shares saw a
double-digit decline during the annual period.
Sector allocation overall is not a consideration in our portfolio construction
but rather a residual of our stock selection process. Nevertheless, sector
allocation contributed positively to our portion of the Fund's relative results
during the annual period. Throughout the annual period, we increased our
portion of the Fund's already overweight allocation to Information Technology.
This shift proved prudent, as Information Technology was the strongest
performing sector in the Russell 1000(R) Index during the annual period. Also,
our portion of the Fund benefited from a lack of exposure to Consumer Staples,
Energy, Real Estate and Telecommunication Services, as each was among the
weakest performing sectors of the Russell 1000(R) Index during the annual
period. Conversely, having an underweight to Financials, which significantly
outperformed the Russell 1000(R) Index during the annual period, detracted from
relative results. Having an allocation to cash during an annual period when the
Russell 1000(R) Index rallied further dampened results.
112
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Below, Todd Burnside, portfolio manager at BlackRock Investment Management,
discusses BlackRock's portion of the Fund's performance during the annual
period. BlackRock manages the large-cap value portion of the Fund's portfolio.
Our portion of the Fund outperformed the Russell 1000(R) Index, the Fund's
benchmark, during the annual period, due primarily to stock selection. Given
the focused nature of our portion of the Fund, sector allocation is not
particularly relevant to our strategy, though it did contribute positively to
relative results during the annual period.
Stock selection in Financials and Consumer Discretionary contributed most
positively to our portion of the Fund's results, especially in the Banks and
Hotels, Restaurants and Leisure industries, respectively. Money-center banks
JPMorgan Chase & Co. and Bank of America, Corp. were the largest contributors
within Financials. These stocks strongly outperformed the Russell 1000(R)
Index, particularly following the U.S. presidential election, as investors
positioned for improving conditions driven by expectations of higher economic
growth, inflation, corporate tax reform and interest rates. Within Consumer
Discretionary, cruise operator Carnival Corp. was a notable contributor. Its
stock outperformed the Russell 1000(R) Index as ongoing favorable supply/demand
dynamics in the developed cruise markets and a disciplined and rational
competitive environment drove improvement in pricing power and returns on
invested capital.
Elsewhere, having no exposure to select traditionally defensive sectors, namely
Consumer Staples, Real Estate and Telecommunication Services, proved
advantageous for our portion of the Fund, as these sectors significantly lagged
the Russell 1000(R) Index during the annual period. Also benefiting relative
results during the annual period was Utilities, where an overweight to and
selection within the electric utilities segment added value.
Conversely, the primary detractor from our portion of the Fund's relative
performance was Health Care due to weakness in the Pharmaceuticals industry.
Teva Pharmaceutical Industries, Ltd. was the largest individual detractor in
both the sector and in our portion of the Fund overall during the annual
period. The company faced numerous negative developments that undermined our
conviction in our original investment thesis. For example, its generics
segments remained challenged by a slowing pace of approvals and broad price
pressures, while the company's main brand product, Copaxone, lost its patent
protection and thus was likely to see generic competition in the coming
quarters. We believed Teva Pharmaceutical Industries' Ltd. valuation remained
attractive, but ongoing management turnover and high leverage were of
significant concern to us given the backdrop of deteriorating fundamentals.
Therefore, we exited our portion of the Fund's position in Teva Pharmaceutical
Industries.
In other sectors, having an underweight to Information Technology leader Apple,
Inc. weighed on our portion of the Fund's relative returns as did its position
in Canadian integrated energy company Suncor Energy, Inc. Having an allocation
to cash during an annual period when the Russell 1000(R) Index rallied further
dampened relative results.
--------
Past performance is no guarantee of future results.
* The Russell 1000(R) Index offers investors access to the extensive large-cap
segment of the U.S. equity universe representing approximately 92% of the U.S.
market. The Russell 1000(R) is constructed to provide a comprehensive and
unbiased barometer for the large-cap segment and is completely reconstituted
annually to ensure new and growing equities are reflected. The Russell 1000(R)
includes the largest 1,000 securities in the Russell 3000(R) Index. Indices are
not managed and an investor cannot invest directly into an index.
Because focused mutual funds are less diversified than typical mutual funds,
the performance of each holding in a focused fund has a greater impact upon the
overall portfolio, which increases risk.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be part of current portfolio
construction.
113
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in the AIG Focused Alpha Large-Cap
Fund Class A shares would be valued at $21,363. The same amount invested in
securities mirroring the performance of the Russell 1000(R) Index would be
valued at $20,818.
[CHART]
Focused Alpha Large-Cap Fund
Date Class A# Russell 1000/R/ Index@
----------- ------------------------------- -----------------------
10/31/2007 9,424 10,000
11/30/2007 9,163 9,574
12/31/2007 9,268 9,511
1/31/2008 8,511 8,941
2/29/2008 8,318 8,668
3/31/2008 8,116 8,609
4/30/2008 8,580 9,046
5/31/2008 8,843 9,212
6/30/2008 8,276 8,446
7/31/2008 8,176 8,348
8/31/2008 8,085 8,463
9/30/2008 7,262 7,657
10/31/2008 6,204 6,320
11/30/2008 5,685 5,842
12/31/2008 5,844 5,935
1/31/2009 5,575 5,451
2/28/2009 5,028 4,887
3/31/2009 5,278 5,315
4/30/2009 5,624 5,853
5/31/2009 5,984 6,177
6/30/2009 5,897 6,192
7/31/2009 6,394 6,664
8/31/2009 6,520 6,906
9/30/2009 6,819 7,187
10/31/2009 6,625 7,028
11/30/2009 7,076 7,442
12/31/2009 7,197 7,623
1/31/2010 6,920 7,349
2/28/2010 7,129 7,591
3/31/2010 7,527 8,057
4/30/2010 7,542 8,206
5/31/2010 6,893 7,556
6/30/2010 6,394 7,135
7/31/2010 6,913 7,631
8/31/2010 6,707 7,290
9/30/2010 7,613 7,960
10/31/2010 8,099 8,269
11/30/2010 8,276 8,296
12/31/2010 8,654 8,850
1/31/2011 8,832 9,063
2/28/2011 9,289 9,378
3/31/2011 9,730 9,402
4/30/2011 10,154 9,685
5/31/2011 9,912 9,581
6/30/2011 9,824 9,414
7/31/2011 9,785 9,210
8/31/2011 9,042 8,679
9/30/2011 7,951 8,032
10/31/2011 8,765 8,932
11/30/2011 8,507 8,908
12/31/2011 8,530 8,983
1/31/2012 9,126 9,421
2/29/2012 9,739 9,834
3/31/2012 10,294 10,142
4/30/2012 10,078 10,083
5/31/2012 9,353 9,463
6/30/2012 9,589 9,826
7/31/2012 9,728 9,942
8/31/2012 9,965 10,184
9/30/2012 10,191 10,446
10/31/2012 9,903 10,269
11/30/2012 10,011 10,351
12/31/2012 9,982 10,458
1/31/2013 10,461 11,025
2/28/2013 10,688 11,173
3/31/2013 11,274 11,605
4/30/2013 11,528 11,814
5/31/2013 11,958 12,077
6/30/2013 11,700 11,913
7/31/2013 12,190 12,550
8/31/2013 11,899 12,204
9/30/2013 12,373 12,629
10/31/2013 13,121 13,185
11/30/2013 13,687 13,555
12/31/2013 14,083 13,921
1/31/2014 13,896 13,476
2/28/2014 14,628 14,116
3/31/2014 14,094 14,206
4/30/2014 13,754 14,273
5/31/2014 14,316 14,601
6/30/2014 14,435 14,933
7/31/2014 14,605 14,691
8/31/2014 15,234 15,298
9/30/2014 15,121 15,030
10/31/2014 15,569 15,398
11/30/2014 15,915 15,801
12/31/2014 16,027 15,764
1/31/2015 15,454 15,331
2/28/2015 16,335 16,217
3/31/2015 16,148 16,015
4/30/2015 15,973 16,128
5/31/2015 16,305 16,339
6/30/2015 16,275 16,033
7/31/2015 16,546 16,342
8/31/2015 15,629 15,359
9/30/2015 15,128 14,938
10/31/2015 16,033 16,147
11/30/2015 15,955 16,200
12/31/2015 15,719 15,908
1/31/2016 14,874 15,052
2/29/2016 14,653 15,047
3/31/2016 15,471 16,095
4/30/2016 15,317 16,183
5/31/2016 15,692 16,466
6/30/2016 15,411 16,503
7/31/2016 15,940 17,132
8/31/2016 16,081 17,155
9/30/2016 16,182 17,168
10/31/2016 15,880 16,834
11/30/2016 16,631 17,497
12/31/2016 16,651 17,826
1/31/2017 17,180 18,184
2/28/2017 17,891 18,888
3/31/2017 17,851 18,900
4/30/2017 18,394 19,100
5/31/2017 18,769 19,344
6/30/2017 19,205 19,479
7/31/2017 19,962 19,865
8/31/2017 20,599 19,927
9/30/2017 20,907 20,351
10/31/2017 21,363 20,818
Class A Class C Class W
------------------ ------------------ ------------------
AIG Average Average Average
Focused Alpha Annual Cumulative Annual Cumulative Annual Cumulative
Large-Cap Fund# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 26.88% 34.64% 32.78% 33.78% 34.85% 34.85%
--------------------------------------------------------------------------
5 Year Return 15.25% 115.72% 15.87% 108.83% 16.80% 117.36%
--------------------------------------------------------------------------
10 Year Return 7.89% 126.69% N/A N/A N/A N/A
--------------------------------------------------------------------------
Since Inception* 9.31% 204.53% 15.31% 127.59% 16.24% 138.36%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 12/27/05; Class C: 01/24/12; Class W: 01/24/12
# For the purpose of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and the CDSC with respect to the Class C
shares has been deducted as applicable.
For the 12 month period ended October 31, 2017, the AIG Focused Alpha Large-Cap
Class A returned 26.88%, compared to 23.67% for the Russell 1000(R) Index. (The
performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of the Fund
Shares.)
The Fund acquired the assets and assumed the liabilities of the SunAmerica
Focused Alpha Large-Cap Fund, Inc. (the "Predecessor Fund"), a closed-end
investment company also advised by SunAmerica, in a reorganization that
occurred on January 23, 2012 (the "Reorganization"). Prior to the
Reorganization, the Fund had no operating history and the performance
information in the graph and the table reflects the performance of the
Predecessor Fund through the Reorganization. The Predecessor Fund may have
performed differently if it were an open-end fund since closed-end funds are
generally not subject to the cash flow fluctuations of an open-end fund. The
performance figures above for the period prior to the Reorganization were
calculated using the actual operating expenses of the Predecessor Fund, which
were lower than those of the Fund. If the Fund's higher operating expenses were
applied to the performance for the period prior to the Reorganization, the
performance would have been lower.
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum sales charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
@ The Russell 1000(R) Index offers investors access to the extensive large-cap
segment of the U.S. equity universe representing approximately 92% of the
U.S. market. The Russell 1000(R) is constructed to provide a comprehensive
and unbiased barometer for the large-cap segment and is completely
reconstructed annually to ensure new and growing equities are reflected. The
Russell 1000(R) includes the largest 1,000 securities in the Russell 3000(R)
Index. Indices are not managed and an investor cannot invest directly into an
index.
114
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Focused Multi-Cap Growth Fund
For the annual period ended October 31, 2017, Class A shares of the AIG Focused
Multi-Cap Growth Fund returned 35.38% (before maximum sales charge). The Fund
outperformed its benchmark, the Russell 3000(R) Growth Index,/*/ which returned
29.80% for the same period.
The AIG Focused Multi-Cap Growth Fund brings together Marsico Capital
Management LLC ("Marsico") and BAMCO Inc. ("BAMCO"), well-known equity managers
who each contribute stock picks to the Fund's portfolio. Marsico emphasizes
large-cap growth investing, while BAMCO focuses on small/mid-cap growth
opportunities. The Fund managers' combined stock picks, blending different
investment styles, are designed to offer the potential for attractive returns
over the long term.
Below, Tom Marsico, portfolio manager at Marsico Capital Management, discusses
Marsico's portion of the Fund's performance during the annual period. Marsico
manages the large-cap growth portion of the Fund's portfolio.
Our portion of the Fund outperformed the Russell 3000(R) Growth Index during
the annual period due primarily to stock selection.
Strong stock selection in the Information Technology and Consumer Discretionary
sectors contributed positively. Within Information Technology, the Fund's
positions in China-based retail conglomerate Alibaba Group Holdings,
semiconductor chipmaker NVIDIA and payments company PayPal Holdings were
notable contributors. In Consumer Discretionary, the Fund held only one
position by the end of the annual period, namely retail holding Amazon.com.
Amazon.com saw its shares rise significantly during the annual period, and it
was a meaningful positive contributor to the Fund's performance. Our portion of
the Fund exited its other Consumer Discretionary positions during the annual
period as it became clear to us that Amazon.com is disrupting several
industries and gaining market share across multiple areas. We chose to
concentrate the Fund's investments with the franchise we felt most able to
benefit from the shift in consumer habits, i.e., away from brick and mortar and
toward e-commerce. Also, a position in home improvement retailer Home Depot,
whose stock saw a double-digit gain, contributed positively to relative results.
Elsewhere, several positions performed well during the annual period, boosting
our portion of the Fund's relative results. These included social media company
Facebook and hospital operator UnitedHealth Group.
Such positive contributors were partially offset by stock selection in the
Health Care and Financials sectors, which hampered relative results. In Health
Care, a position in Pharmaceuticals, Biotechnology & Life Sciences industry
holding Celgene disappointed most, as its shares saw a double-digit decline
during the annual period. In Financials, diversified financial services company
Wells Fargo & Co. experienced a single-digit share price decline during the
annual period.
Sector allocation overall is not a consideration in our portfolio construction
but rather a residual of our stock selection process. Nevertheless, sector
allocation contributed positively to our portion of the Fund's relative results
during the annual period. Throughout the annual period, we increased our
portion of the Fund's already overweight allocation to Information Technology.
This shift proved prudent, as Information Technology was the strongest
performing sector in the Russell 3000(R) Growth Index during the annual period.
Also, our portion of the Fund benefited from a lack of exposure to Consumer
Staples, Energy, Real Estate and Telecommunication Services, as each was among
the weakest performing sectors of the Russell 3000(R) Growth Index during the
annual period. Conversely, having an underweight to Financials, which
significantly outperformed the Russell 3000(R) Growth Index during the annual
period, detracted from relative results. Having an allocation to cash during an
annual period when the Russell 3000(R) Growth Index rallied further dampened
results.
115
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Below, Ron Baron, portfolio manager at BAMCO, Inc., discusses BAMCO's portion
of the Fund's performance during the annual period. BAMCO manages the
small/mid-cap portion of the Fund's portfolio.
Our portion of the Fund produced double-digit gains during the annual period
that closely tracked the return of the Russell 3000(R) Growth Index on a
relative basis.
Sector allocation detracted from our portion of the Fund's performance, driven
by a significantly overweight exposure to the lagging Consumer Discretionary
sector and an underweight exposure to the strongly performing Information
Technology sector. In particular, our portion of the Fund's lack of exposure to
Apple and to semiconductor stocks, which rose substantially, hampered relative
performance. Partially offsetting these detractors were the positive
contributions made by an underweighted exposure to the underperforming Consumer
Staples sector as well as an overweighted exposure to the outperforming
Financials sector through sizable positions in Arch Capital Group, FactSet
Research Systems and Charles Schwab. All that said, at BAMCO, we construct our
portion of the Fund from the bottom up, one stock at a time. Each stock is
included in the portfolio if it meets our rigorous investment criteria. To help
manage risk, we are aware of our sector and security weights, but we do not
include a holding to achieve a target sector allocation or to approximate an
index. Exposure to any given sector is purely a result of our stock selection
process.
Stock selection added value during the annual period primarily due to the
outperformance of investments within the Consumer Discretionary and Health Care
sectors. Strength in Consumer Discretionary was mostly attributable to the
strong performance of Tesla, a maker of fully electric vehicles, solar products
and energy storage solutions, and Vail Resorts, a ski resort operator. Tesla's
stock price rose sharply following the launch of its GigaFactory, one of the
world's largest manufacturing facilities, which may potentially drive
significant cost reduction. Vail Resorts' share price increased on reports of a
strong end to the ski season and increases in season pass sales for the coming
year. The Fund's only investment in Health Care, veterinary diagnostic provider
IDEXX Laboratories, boosted relative results.
These positive contributors were somewhat offset by the underperformance of our
portion of the Fund's Financials, Consumer Staples and Industrials investments.
Within Consumer Staples, the Fund's only holding in the sector, TreeHouse
Foods, weighed on relative results. Shares of TreeHouse Foods, a manufacturer
and supplier of private label foods, declined after the company experienced a
modest drop in organic sales. Negative stock selection in Financials was due to
an investment in financial information provider FactSet Research Systems. Its
shares lagged as a deceleration in annual subscription value growth combined
with a reduction in industry spending pressured its performance. Within
Industrials, shares of data and analytics provider Verisk Analytics detracted
from relative results. Its stock declined after an anticipated acceleration in
insurance organic growth failed to materialize.
--------
Past performance is no guarantee of future results.
* The Russell 3000(R) Growth Index measures the performance of those Russell
3000(R) Index companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 3000(R) Index consists of the 3,000 largest U.S.
companies based on total market capitalization. Indices are not managed and an
investor cannot invest directly into an index.
Because focused mutual funds are less diversified than typical mutual funds,
the performance of each holding in a focused fund has a greater impact upon the
overall portfolio, which increases risk. Stocks of small-cap and mid-cap
companies are generally more volatile than and not as readily marketable as
those of larger companies, and may have fewer resources and a greater risk of
business failure than do large companies.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be part of current portfolio
construction.
116
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Over the past ten years, $10,000 invested in the AIG Focused Multi-Cap Growth
Fund Class A shares would be valued at $22,006. The same amount invested in
securities mirroring the performance of the Russell 3000(R) Growth Index would
be valued at $23,794.
[CHART]
Focused Multi-Cap Russell 3000/R/
Date Growth Fund Class A# Index@
---------- ---------------------- ---------------
10/31/2007 9,425 10,000
11/30/2007 9,184 9,605
12/31/2007 8,968 9,578
1/31/2008 8,248 8,820
2/29/2008 7,715 8,634
3/31/2008 7,527 8,582
4/30/2008 8,075 9,032
5/31/2008 8,310 9,377
6/30/2008 7,782 8,711
7/31/2008 7,542 8,573
8/31/2008 7,773 8,674
9/30/2008 6,813 7,672
10/31/2008 5,832 6,296
11/30/2008 5,257 5,776
12/31/2008 5,285 5,896
1/31/2009 5,036 5,600
2/28/2009 4,663 5,167
3/31/2009 4,941 5,628
4/30/2009 5,537 6,190
5/31/2009 5,786 6,492
6/30/2009 5,687 6,575
7/31/2009 6,238 7,045
8/31/2009 6,366 7,185
9/30/2009 6,729 7,503
10/31/2009 6,559 7,369
11/30/2009 6,871 7,806
12/31/2009 7,108 8,077
1/31/2010 6,819 7,724
2/28/2010 7,075 7,995
3/31/2010 7,602 8,471
4/30/2010 7,797 8,585
5/31/2010 7,235 7,937
6/30/2010 6,815 7,492
7/31/2010 7,364 8,023
8/31/2010 7,092 7,631
9/30/2010 8,077 8,465
10/31/2010 8,471 8,866
11/30/2010 8,777 8,992
12/31/2010 9,396 9,502
1/31/2011 9,516 9,719
2/28/2011 9,987 10,058
3/31/2011 10,523 10,101
4/30/2011 10,938 10,441
5/31/2011 10,475 10,320
6/30/2011 10,457 10,165
7/31/2011 10,553 10,038
8/31/2011 9,916 9,482
9/30/2011 8,754 8,752
10/31/2011 9,665 9,745
11/30/2011 9,316 9,740
12/31/2011 9,206 9,709
1/31/2012 9,808 10,301
2/29/2012 10,405 10,781
3/31/2012 10,937 11,125
4/30/2012 10,967 11,095
5/31/2012 10,222 10,378
6/30/2012 10,385 10,678
7/31/2012 10,607 10,796
8/31/2012 10,691 11,094
9/30/2012 10,888 11,320
10/31/2012 10,612 10,988
11/30/2012 10,720 11,165
12/31/2012 10,536 11,186
1/31/2013 11,117 11,685
2/28/2013 11,301 11,828
3/31/2013 11,865 12,284
4/30/2013 12,128 12,519
5/31/2013 12,463 12,782
6/30/2013 12,239 12,554
7/31/2013 12,703 13,242
8/31/2013 12,502 13,013
9/30/2013 13,245 13,619
10/31/2013 13,843 14,192
11/30/2013 14,094 14,607
12/31/2013 14,302 15,015
1/31/2014 14,296 14,600
2/28/2014 15,124 15,348
3/31/2014 14,442 15,175
4/30/2014 14,115 15,113
5/31/2014 14,704 15,559
6/30/2014 15,101 15,912
7/31/2014 15,067 15,611
8/31/2014 15,709 16,338
9/30/2014 15,539 16,053
10/31/2014 15,878 16,518
11/30/2014 16,012 17,010
12/31/2014 15,873 16,883
1/31/2015 15,632 16,615
2/28/2015 16,217 17,729
3/31/2015 16,235 17,566
4/30/2015 15,909 17,607
5/31/2015 16,307 17,885
6/30/2015 16,506 17,613
7/31/2015 16,759 18,167
8/31/2015 15,699 17,042
9/30/2015 15,349 16,568
10/31/2015 16,175 17,958
11/30/2015 16,223 18,053
12/31/2015 16,009 17,743
1/31/2016 15,220 16,683
2/29/2016 15,254 16,668
3/31/2016 16,057 17,802
4/30/2016 15,803 17,664
5/31/2016 16,105 18,017
6/30/2016 15,954 17,945
7/31/2016 16,612 18,816
8/31/2016 16,797 18,745
9/30/2016 16,852 18,828
10/31/2016 16,297 18,331
11/30/2016 16,255 18,820
12/31/2016 16,226 19,055
1/31/2017 17,090 19,671
2/28/2017 17,613 20,463
3/31/2017 18,011 20,700
4/30/2017 18,659 21,166
5/31/2017 19,175 21,662
6/30/2017 19,531 21,663
7/31/2017 20,298 22,208
8/31/2017 20,932 22,581
9/30/2017 21,281 22,947
10/31/2017 22,006 23,794
Class A Class C Class W
------------------ ------------------ ------------------
AIG Average Average Average
Focused Multi-Cap Annual Cumulative Annual Cumulative Annual Cumulative
Growth# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 27.59% 35.38% 33.47% 34.47% 35.65% 35.65%
---------------------------------------------------------------------------
5 Year Return 14.35% 107.37% 14.95% 100.70% 15.92% 109.32%
---------------------------------------------------------------------------
10 Year Return 8.21% 133.48% N/A N/A N/A N/A
---------------------------------------------------------------------------
Since Inception* 10.00% 241.61% 14.48% 118.34% 15.44% 129.09%
---------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 07/28/05; Class C: 01/24/12; Class W: 01/24/12
# For the purpose of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and the CDSC with respect to the Class C
shares has been deducted as applicable.
For the 12 month period ended October 31, 2017, the AIG Focused Multi-Cap
Growth Class A returned 27.59%, compared to 29.80% for the Russell 3000(R)
Growth Index. (The performance data and graph do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
the Fund Shares.)
The Fund acquired the assets and assumed the liabilities of the SunAmerica
Focused Alpha Growth Fund, Inc. (the "Predecessor Fund"), a closed-end
investment company also advised by SunAmerica, in a reorganization that
occurred on January 23, 2012 (the "Reorganization"). Prior to the
Reorganization, the Fund had no operating history and the performance
information in the graph and the table reflects the performance of the
Predecessor Fund through the Reorganization. The Predecessor Fund may have
performed differently if it were an open-end fund since closed-end funds are
generally not subject to the cash flow fluctuations of an open-end fund. The
performance figures above for the period prior to the Reorganization were
calculated using the actual operating expenses of the Predecessor Fund, which
were lower than those of the Fund. If the Fund's higher operating expenses were
applied to the performance for the period prior to the Reorganization, the
performance would have been lower.
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum sales charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
@ The Russell 3000(R) Growth Index measures the performance of those Russell
3000(R) Index companies with higher price-to-book ratios and higher
forecasted growth values. The Russell 3000(R) Index consists of the 3,000
largest U.S. companies based on total market capitalization. Indices are not
managed and an investor cannot invest directly into an index.
117
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Global Trends Fund
For the annual period ended October 31, 2017, Class A shares of the AIG Global
Trends Fund returned 10.66% (before maximum sales charge). The Fund
underperformed a blended benchmark composed of 50% MSCI ACWI (Net)/*/ and 50%
Citigroup World Government Bond Index (hedged)./*/ The blended benchmark
returned 11.26% for the same period. Individually, the MSCI ACWI (Net), a
broad-based equity market index, returned 23.20% for the 12 months ended
October 31, 2017, and the Citigroup World Government Bond Index (hedged), a
broad-based government bond index, returned 0.36% for the same annual period.
The Fund is subadvised by Wellington Management Company LLP and its investment
strategy involves investing in futures instruments that provide exposure to ten
asset classes, including asset classes within the global equity and fixed
income markets, commodities and currencies. The portfolio management team
utilizes rules-based indicators and technical analysis to allocate and adjust
the Fund's exposure to these ten asset classes depending on the positive or
negative signals identified for each. The Fund's exposure to each of these ten
asset classes will generally be between 0% and 20% of the value of the Fund's
net assets. Accordingly, the Fund's investment exposure to an asset class will
fluctuate during the annual period depending on these signals.
The Fund is designed to offer diversification and reduce volatility by
adjusting its exposure to the various asset classes in which it invests. During
the annual period, the main detractors were positions in sugar, corn and
silver, partially offset by positions in U.S. large-cap equities, Japanese
equities and emerging market equities, which contributed positively.
Fixed income positioning detracted from absolute performance during the annual
period. The model's largest average weight was its allocation to German bunds,
which detracted, as the model mis-timed its initial investment into the
securities and was not able to make up negative performance. Positioning in
30-year U.S. Treasuries also detracted, hurt by a sharp jump in yields in
November 2016 in anticipation of the December 2016 U.S. interest rate hike.
Commodities were mixed. The two largest detractors were sugar and corn, both of
which experienced volatility, which the model was unable to capture
effectively. Copper contributed positively, as the model was able to take
advantage of its volatility, specifically in response to strike threats at
Chile's Escondida mine, the world's largest open-pit copper mine, and as
positive economic data from China created a stable uptrend in the market.
Within developed market equities, all five models in the Fund's opportunity set
posted positive returns during the annual period. During the first half of
2017, the model's positioning in U.S. small-caps detracted, as the "animal
spirits" around the new U.S. Administration dissipated. Later, a positive
economic outlook for the U.S., along with the potential for tax reform and
regulatory easing, reversed this trend, and U.S. small-caps performed well.
Within U.S. large-cap stocks, the model was able to identify the steady
uptrend, and the Fund remained heavily invested throughout. German and U.K.
equities were more challenging given increased volatility. Still, the model was
able to take full advantage during spans of upward trends and returned positive
absolute performance in both countries. In Japan, positive economic data led to
a sustained uptrend. The only months in which the model returned negative
performance were January and February 2017 when the U.S. announced a surprise
exit from the Trans-Pacific Partnership, which rattled Japanese equity markets.
Emerging market equities, specifically Hong Kong and South Korea, were also
additive to absolute performance.
118
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
The Fund had almost no exposure to currencies during the annual period, with
the exception of opportunistic positions in the Brazilian real, which
contributed positively, as the model captured some of the real's appreciation
following easing of political turmoil and stabilization in oil prices and
China's economic growth trajectory.
--------
Past performance is no guarantee of future results. Diversification does not
guarantee a profit or protect against a loss.
* The MSCI ACWI (All Country World Index) (Net) is a free float-adjusted market
capitalization-weighted index designed to measure the equity market performance
of developed and emerging markets. It consists of 46 country indices comprising
23 developed and 23 emerging market country indices. Net total return indices
reinvest dividends after the deduction of withholding taxes, using (for
international indices) a tax rate applicable to non-resident institutional
investors who do not benefit from double taxation treaties. The Citigroup World
Government Bond Index (WGBI) (hedged) is a market capitalization-weighted bond
index consisting of the government bond markets of 23 developed countries.
Country eligibility in the WGBI is determined by market size, credit and
barriers-to-entry requirement criteria. The index includes all fixed-rate bonds
with a remaining maturity of one year or longer and with amounts outstanding of
at least the equivalent of US$25 million. Indices are not managed and an
investor cannot invest directly in an index.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be a part of current portfolio
construction.
119
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in the AIG Global Trends Fund Class A shares
would be valued at $10,419. The same amount invested in securities mirroring
the performance of the Blended Benchmark (MSCI ACWI (Net) (50%) and the
Citigroup World Government Bond Index (WGBI) (hedged) (50%)); the MSCI ACWI
(Net) and the Citigroup WGBI (hedged) would be valued at $14,946, $17,147 and
$12,666, respectively.
[CHART]
Blended Benchmark
(MSCI All Country
World Index (net)
SunAmerica (50%) and Citigroup Citigroup World
Global World Government Government Bond
Trends Fund Bond Index (WGBI) MSCI ACWI Index (WGBI)
Date Class A# (hedged)(50%)) (net)@ (hedged)++
----------- ------------- --------------------- ----------- ----------------
6/15/2011 9,422 10,000 10,000 10,000
6/30/2011 9,485 10,159 10,347 9,970
7/31/2011 9,655 10,122 10,178 10,060
8/31/2011 9,585 9,846 9,435 10,247
9/30/2011 9,460 9,435 8,544 10,359
10/31/2011 9,705 9,904 9,459 10,280
11/30/2011 9,516 9,742 9,176 10,250
12/31/2011 9,344 9,816 9,158 10,427
1/31/2012 9,645 10,135 9,690 10,498
2/29/2012 9,920 10,399 10,178 10,516
3/31/2012 9,830 10,420 10,246 10,489
4/30/2012 9,817 10,391 10,128 10,552
5/31/2012 9,414 9,995 9,220 10,693
6/30/2012 9,369 10,223 9,676 10,653
7/31/2012 9,325 10,345 9,808 10,761
8/31/2012 9,408 10,463 10,021 10,772
9/30/2012 9,433 10,644 10,337 10,807
10/31/2012 9,261 10,615 10,268 10,818
11/30/2012 9,325 10,721 10,399 10,896
12/31/2012 9,427 10,842 10,635 10,896
1/31/2013 9,549 11,067 11,125 10,847
2/28/2013 9,440 11,098 11,123 10,909
3/31/2013 9,561 11,240 11,326 10,989
4/30/2013 9,645 11,460 11,650 11,105
5/31/2013 9,600 11,359 11,618 10,939
6/30/2013 9,536 11,136 11,278 10,829
7/31/2013 9,664 11,420 11,818 10,863
8/31/2013 9,523 11,285 11,572 10,833
9/30/2013 9,645 11,616 12,170 10,909
10/31/2013 9,741 11,898 12,659 11,001
11/30/2013 9,798 11,979 12,838 10,995
12/31/2013 9,917 12,042 13,060 10,920
1/31/2014 9,654 11,892 12,537 11,084
2/28/2014 9,832 12,203 13,143 11,129
3/31/2014 9,711 12,240 13,201 11,148
4/30/2014 9,527 12,335 13,327 11,214
5/31/2014 9,633 12,515 13,611 11,304
6/30/2014 9,669 12,659 13,867 11,350
7/31/2014 9,527 12,607 13,699 11,396
8/31/2014 9,583 12,830 14,001 11,546
9/30/2014 9,512 12,610 13,547 11,524
10/31/2014 9,619 12,696 13,643 11,601
11/30/2014 9,768 12,875 13,871 11,734
12/31/2014 9,619 12,805 13,603 11,833
1/31/2015 9,770 12,835 13,391 12,073
2/28/2015 9,972 13,144 14,136 11,983
3/31/2015 9,922 13,092 13,917 12,074
4/30/2015 9,886 13,232 14,321 11,981
5/31/2015 9,943 13,182 14,302 11,906
6/30/2015 9,821 12,941 13,965 11,752
7/31/2015 9,741 13,080 14,087 11,902
8/31/2015 9,691 12,621 13,121 11,881
9/30/2015 9,626 12,443 12,646 11,977
10/31/2015 9,749 12,948 13,638 12,009
11/30/2015 9,756 12,898 13,525 12,015
12/31/2015 9,400 12,766 13,282 11,986
1/31/2016 9,378 12,510 12,481 12,229
2/29/2016 9,363 12,544 12,395 12,380
3/31/2016 9,528 13,042 13,313 12,444
4/30/2016 9,498 13,126 13,510 12,422
5/31/2016 9,528 13,174 13,527 12,496
6/30/2016 9,745 13,289 13,445 12,791
7/31/2016 9,722 13,599 14,024 12,837
8/31/2016 9,617 13,600 14,071 12,795
9/30/2016 9,573 13,638 14,158 12,787
10/31/2016 9,415 13,433 13,917 12,621
11/30/2016 9,460 13,372 14,023 12,411
12/31/2016 9,670 13,530 14,326 12,436
1/31/2017 9,662 13,664 14,718 12,342
2/28/2017 9,775 13,916 15,131 12,450
3/31/2017 9,872 13,993 15,316 12,436
4/30/2017 9,812 14,148 15,554 12,518
5/31/2017 9,940 14,341 15,898 12,583
6/30/2017 9,917 14,347 15,970 12,536
7/31/2017 10,059 14,562 16,417 12,562
8/31/2017 10,142 14,664 16,479 12,690
9/30/2017 10,179 14,759 16,798 12,609
10/31/2017 10,419 14,946 17,147 12,666
Class A Class C Class W
------------------ ------------------ ------------------
Average Average Average
AIG Global Annual Cumulative Annual Cumulative Annual Cumulative
Trends Fund# Return Return+ Return Return+ Return Return+
----------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 4.27% 10.66% 8.96% 9.96% 10.94% 10.94%
--------------------------------------------------------------------------
5 Year Return 1.18% 12.51% 1.73% 8.97% 2.62% 13.79%
--------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
Since Inception* 0.65% 10.58% 0.94% 6.12% 1.81% 12.11%
--------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 06/15/11; Class C: 06/15/11; Class W: 06/15/11
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the 12 month period ended October 31, 2017, the AIG Global Trends Fund
Class A returned 4.27%, compared to 11.26% for the Blended Benchmark [MSCI ACWI
(Net) (50%) and the Citigroup World Government Bond Index (WGBI) (hedged)
(50%)], 23.20% for the MSCI ACWI (Net) and 0.36% for the Citigroup WGBI
(hedged). (The performance data and graph do not reflect the deduction of taxes
that a shareholder would pay on Fund distributions or the redemption of Fund
shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum sales charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
@ The MSCI ACWI (All Country World Index) (Net) is a free float-adjusted
market capitalization weighted index designed to measure the equity market
performance of developed and emerging markets. It consists of 46 country
indices comprising 23 developed and 23 emerging market country indices. Net
total return indices reinvest dividends after the deduction of withholding
taxes, using (for international indices) a tax rate applicable to
non-resident institutional investors who do not benefit from double taxation
treaties.
++ The Citigroup WGBI (World Government Bond Index) (hedged) is a market
capitalization-weighted bond index consisting of the government bond markets
of 23 developed countries. Country eligibility in the WGBI is determined by
market size, credit and barriers-to-entry requirement criteria. The Index
includes all fixed-rate bonds with a remaining maturity of one year or
longer and with amounts outstanding of at least the equivalent of US$25
million.
Indices are not managed and an investor cannot invest directly into an index.
120
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Income Explorer Fund
For the annual period ended October 31, 2017, Class A shares of the AIG Income
Explorer Fund returned 13.21% (before maximum sales charge). The Fund modestly
lagged a blended benchmark composed of 60% MSCI World Index (Net)/*/ and 40%
Bloomberg Barclays U.S. Aggregate Bond Index./*/ The blended benchmark returned
13.57% for the same period. The Fund outperformed the Bloomberg Barclays U.S.
Aggregate Bond Index, a broad-based fixed income market index, which returned
0.90%, but underperformed the broad-based global equity market index, the MSCI
World Index (Net), which returned 22.77%, for the same annual period.
The Fund seeks to achieve its investment objective of high current income and,
secondarily, capital appreciation by strategically allocating its assets among
a preferred securities strategy, closed-end fund strategy and global dividend
equity strategy. Through this combination of investments, the portfolio
management teams expect to gain exposure to a broad range of income-producing
investments, including both fixed income and equity securities.
The Fund brings together SunAmerica Asset Management, LLC ("SunAmerica") and
Cohen & Steers Capital Management, Inc. ("Cohen & Steers"). SunAmerica, the
Fund's investment adviser, is responsible for determining the allocation among
the different sleeves of the Fund and for managing the global dividend equity
strategy sleeve. Cohen & Steers manages the preferred securities and closed-end
fund sleeves of the Fund.
Below, Timothy Pettee, lead portfolio manager of the Fund and SunAmerica's
Chief Investment Strategist, discusses SunAmerica's portion of the Fund's
performance during the annual period. SunAmerica manages the global dividend
equity strategy sleeve of the Fund.
Our portion of the Fund underperformed the MSCI World Index during the annual
period. Individual stock selection as well as sector and country allocation
overall detracted.
From a sector perspective, stock selection in Health Care, Information
Technology and Consumer Discretionary detracted. Having an underweighted
allocation to and weak stock selection in Financials, which was among the
best-performing sectors in the MSCI World Index during the annual period, also
hurt. Having an overweight in Telecommunication Services, which lagged the MSCI
World Index during the annual period, further dampened relative results. Only
partially offsetting these detractors was effective security selection in
Energy, Industrials, Real Estate and Consumer Staples, which contributed
positively. Having an oveweighted allocation to Materials, which outpaced the
MSCI World Index during the annual period, and an underweighted exposure to
Consumer Staples, which underperformed the MSCI World Index during the annual
period, also helped.
Regionally, positioning decisions in Hong Kong, South Africa and Israel
detracted the most from relative results. Security selection among German,
Spanish and Japanese equities also negatively impacted results. Conversely,
stock selection in the U.K. contributed positively to our portion of the Fund's
performance as did positioning in the U.S. and Turkey. Having an underweighted
allocation to and strong security selection in Switzerland also added value.
Among individual holdings, notable laggards included U.S. department store
retailer Macy's, Inc., Israel-based global pharmaceuticals company Teva
Pharmaceuticals Industries, U.S. telecommunication services provider
CenturyLink, Inc., automobile manufacturer Subaru Corp. and technology hardware
manufacturer Lenovo Group Ltd. Positions in U.K. residential housing units
121
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
builder Persimmon PLC, U.S. technology hardware provider Western Digital,
Turkish petroleum refiner Tupras Turkiye Petrol Rafinerileri AS, U.K. property
development company Berkeley Group Holdings PLC and petroleum product refinery
HollyFrontier Corp. were among the top positive contributors to our portion of
the Fund's relative performance during the annual period.
Below, Doug Bond and William Scapell, portfolio managers at Cohen & Steers,
discuss Cohen & Steers' portions of the Fund's performance during the annual
period. Mr. Bond and Mr. Scapell of Cohen & Steers manage the closed-end fund
and preferred securities sleeves of the Fund, respectively.
Closed-End Fund Sleeve: Closed-end funds overall posted strong returns during
the annual period amid improvements in the global economy and generally low
inflation, which created favorable conditions for most global equity and fixed
income markets. Still, market conditions favored equity closed-end funds more
than fixed income closed-end funds. In that context, the performance of our
portion of the Fund relative to the Morningstar All Taxable Fixed Income
Index,+ an index that tracks the weighted average market price of closed-end
funds that invest in taxable fixed income securities, was helped significantly
by its out-of-Index allocation to equity strategy closed-end funds. Equity
closed-end funds, as a group, generated a positive total return that
outperformed the Index.
Within our portion of the Fund's allocation to fixed income strategy closed-end
funds, an overweight in multi-sector fixed income closed-end funds helped
relative performance. Our portion of the Fund's underweight to investment grade
bonds, via closed-end funds, also contributed positively to relative
performance, as the sector lagged the Morningstar All Taxable Fixed Income
Index during the annual period. Conversely, its lack of exposure to convertible
security closed-end funds, which outpaced the Morningstar All Taxable Fixed
Income Index during the annual period, detracted.
Security selection contributed most positively to our portion of the Fund's
relative return in the multi-sector fixed income closed-end funds category,
followed by security selection in the investment grade bond closed-end funds
category. On the other hand, security selection in the preferred securities
closed-end funds category detracted from relative results.
Preferred Securities Sleeve: Improvements in the global economy combined with
generally low inflation created favorable conditions for fixed income sectors
during the annual period. In this environment, more credit-sensitive fixed
income sectors - such as preferred securities and high yield bonds -
outperformed higher quality issues, such as U.S. Treasury notes, amid a
tightening in credit spreads. Preferred securities issued by banks, which
account for the majority of the preferred securities market, posted broad
gains. U.S. and European banks alike enjoyed strong earnings growth, benefiting
from higher net interest margins as well as improved trading and investment
banking income. Meanwhile, capital levels continued to build, both organically
and via equity offerings, contributing to stronger credit fundamentals.
Contingent capital securities, a relatively new and evolving source of Tier 1
capital issued primarily by European banks, also experienced strong gains
during the annual period. Demand for the above-average income these securities
offer remained strong, easily absorbing new supply.
The broad rise in financial markets aided the preferred securities portion of
the Fund's performance in absolute terms, as nearly all segments of the
preferred securities market advanced during the annual period. Relative to a
blended index - 50% BofA Merrill Lynch Capital Securities Index++ and 50% BofA
Merrill Lynch Fixed Rate Preferred Securities Index++ - which tracks various
aspects of the preferred securities market, our portion of the Fund benefited
from favorable security selection in the banking, insurance, utilities and
finance segments of the market. From an individual security perspective, the
top positive contributors were issues from Royal Bank of Scotland PLC and
Credit Agricole SA, whose issues each saw double-digit gains during the annual
period.
122
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Detracting from our portion of the Fund's relative performance was security
selection in the pipeline and real estate segments of the market. Individual
securities that hindered relative results most included an underweight in
natural resources company BHP Billiton Finance USA, Ltd., whose issue rose
significantly as commodity prices began to broadly recover. Also detracting
from relative performance was not owning an issue from banking firm HSBC
Holdings PLC, which rose substantially during the annual period.
--------
Past performance is no guarantee of future results. Diversification does not
guarantee a profit or protect against a loss.
* The MSCI World Index (Net) is a free float-adjusted market
capitalization-weighted index that is designed to measure the equity market
performance of developed markets. It consists of the following 23 developed
market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United
Kingdom and the United States. Net total return indices reinvest dividends
after the deduction of withholding taxes, using (for international indices) a
tax rate applicable to non-resident institutional investors who do not benefit
from double taxation treaties. The Bloomberg Barclays U.S. Aggregate Bond Index
represents securities that are U.S. domestic, taxable and dollar denominated.
The index covers components for government and corporate securities, mortgage
pass-through securities and asset-backed securities.
+ The Morningstar All Taxable Fixed Income Index is a weighted average of the
market price of closed-end funds that invest in taxable fixed-income securities.
++ The BofA Merrill Lynch Capital Securities Index is a sub-set of the BofA
Merrill Lynch U.S. Corporate Index including all fixed-to-floating rate,
perpetual callable and callable securities. The BofA Merrill Lynch U.S.
Corporate Index tracks the performance of U.S. dollar-denominated
investment-grade corporate debt publicly issued in the U.S. domestic market.
Qualifying securities must be rated investment-grade (based on an average of
Moody's, S&P and Fitch) and must have an investment grade-rated country of risk
(based on an average of Moody's, S&P and Fitch foreign-currency long-term
sovereign debt ratings). The BofA Merrill Lynch Fixed Rate Preferred Securities
Index tracks the performance of fixed-rate U.S. dollar-denominated preferred
securities issued in the U.S. domestic market. Qualifying securities must be
rated investment grade (based on an average of Moody's, S&P and Fitch) and must
have an investment grade-rated country of risk (based on an average of Moody's,
S&P and Fitch foreign-currency long-term sovereign debt ratings).
Indices are not managed and an investor cannot invest directly in an index.
The Fund is actively managed and its holdings are subject to change.
Accordingly, securities listed may or may not be a part of current portfolio
construction.
123
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in AIG Income Explorer Fund Class A shares
would be valued at $12,538. The same amount invested in securities mirroring
the performance of the Blended Benchmark [MSCI World Index (Net) (60%) and
Bloomberg Barclays U.S. Aggregate Bond Index (40%)], the MSCI World Index (Net)
and the Bloomberg Barclays U.S. Aggregate Bond Index would be valued at
$13,661, $15,328 and $11,329, respectively.
[CHART]
Blended
Benchmark
(MSCI World Index
SunAmerica (net)(60%)
Income and Barclays Barclays US
Explorer US Aggregate MSCI World Aggregate
Date Fund Class A# Bond Index (40%) Index (net)++ Bond Index@
---------- --------------- ----------------- --------------- --------------
7/1/2013 9,422 10,000 10,000 10,000
7/31/2013 9,555 10,271 10,447 10,008
8/31/2013 9,355 10,119 10,225 9,956
9/30/2013 9,629 10,461 10,736 10,051
10/31/2013 9,896 10,741 11,157 10,132
11/30/2013 9,824 10,839 11,355 10,094
12/31/2013 9,951 10,952 11,595 10,037
1/31/2014 9,887 10,774 11,166 10,185
2/28/2014 10,205 11,120 11,725 10,239
3/31/2014 10,336 11,122 11,742 10,222
4/30/2014 10,604 11,228 11,862 10,308
5/31/2014 10,744 11,412 12,095 10,426
6/30/2014 10,933 11,537 12,312 10,431
7/31/2014 10,755 11,414 12,115 10,405
8/31/2014 10,970 11,616 12,382 10,520
9/30/2014 10,600 11,395 12,046 10,448
10/31/2014 10,617 11,484 12,124 10,551
11/30/2014 10,665 11,655 12,367 10,626
12/31/2014 10,384 11,546 12,167 10,636
1/31/2015 10,400 11,518 11,947 10,859
2/28/2015 10,663 11,879 12,647 10,757
3/31/2015 10,535 11,790 12,449 10,807
4/30/2015 10,792 11,939 12,741 10,768
5/31/2015 10,658 11,952 12,785 10,742
6/30/2015 10,386 11,733 12,488 10,625
7/31/2015 10,262 11,892 12,712 10,699
8/31/2015 9,926 11,413 11,871 10,683
9/30/2015 9,694 11,191 11,433 10,755
10/31/2015 10,151 11,724 12,339 10,757
11/30/2015 10,000 11,677 12,277 10,729
12/31/2015 9,898 11,539 12,061 10,694
1/31/2016 9,663 11,188 11,340 10,841
2/29/2016 9,643 11,170 11,255 10,918
3/31/2016 10,231 11,666 12,019 11,018
4/30/2016 10,471 11,794 12,209 11,061
5/31/2016 10,407 11,835 12,278 11,064
6/30/2016 10,607 11,841 12,140 11,262
7/31/2016 11,049 12,171 12,653 11,334
8/31/2016 11,156 12,171 12,664 11,321
9/30/2016 11,160 12,207 12,731 11,314
10/31/2016 11,075 12,028 12,485 11,227
11/30/2016 10,914 12,018 12,664 10,962
12/31/2016 11,127 12,197 12,967 10,977
1/31/2017 11,460 12,384 13,280 10,999
2/28/2017 11,656 12,623 13,649 11,073
3/31/2017 11,731 12,701 13,794 11,067
4/30/2017 11,985 12,853 13,998 11,152
5/31/2017 12,121 13,056 14,294 11,238
6/30/2017 12,226 13,081 14,349 11,227
7/31/2017 12,505 13,291 14,693 11,275
8/31/2017 12,406 13,350 14,714 11,376
9/30/2017 12,563 13,504 15,044 11,322
10/31/2017 12,538 13,661 15,328 11,329
Class A Class C Class W
------------------ ------------------ ------------------
Average Average Average
AIG Annual Cumulative Annual Cumulative Annual Cumulative
Income Explorer Fund# Return Return+ Return Return+ Return Return+
--------------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 6.73% 13.21% 11.43% 12.43% 13.44% 13.44%
-------------------------------------------------------------------------------
5 Year Return N/A N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------
Since Inception* 5.36% 33.07% 6.12% 29.36% 7.03% 34.22%
-------------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 07/02/13; Class C: 07/02/13; Class I: 07/02/13
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the 12 month period ended October 31, 2017, the AIG Income Explorer Fund
Class A returned 6.73%, compared to 13.57% for the Blended Benchmark [MSCI
World Index (Net) (60%) and the Bloomberg Barclays US Aggregate Bond Index
(40%)], 22.77% for the MSCI World Index (Net) and 0.90% for the Bloomberg
Barclays US Aggregate Bond Index. (The performance data and graph do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
++ The MSCI World Index (Net) is a free float-adjusted market capitalization
weighted index that is designed to measure the equity market performance of
developed markets consisting of 23 developed market country indexes:
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong
Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United
States. Net total return indices reinvest dividends after the deduction of
withholding taxes, using (for international indices) a tax rate applicable
to non-resident institutional investors who do not benefit from double
taxation treaties.
@ The Bloomberg Barclays U.S. Aggregate Bond Index represents securities that
are U.S. domestic, taxable and dollar denominated. The index covers
components for government and corporate securities, mortgage pass-through
securities and asset-backed securities.
Indices are not managed and an investor cannot invest directly into an index.
124
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
AIG Small-Cap Fund
For the annual period ended October 31, 2017, Class A shares of the AIG
Small-Cap Fund returned 32.76% (before maximum sales charge). The Fund
outperformed its benchmark, the Russell 2000(R) Index,/*/ which returned 27.85%
for the same period.
The Fund seeks to achieve its investment objective of long-term growth of
capital primarily by strategically allocating its assets between a small-cap
index strategy and an actively-managed micro-cap growth strategy. The small-cap
index strategy provides broad exposure to small-cap stocks by tracking the
Russell 2000(R) Index, and the micro-cap strategy is actively managed to
enhance alpha potential relative to the Russell Microcap(R) Index./**/
SunAmerica Asset Management, LLC ("SunAmerica") is the Fund's investment
adviser, managing the overall asset allocations and the index strategy. Cadence
Capital Management, LLC ("Cadence") is the portfolio manager of the micro-cap
growth strategy. The Fund will generally allocate approximately 40-60% of its
assets to each strategy.
Below, Timothy Campion, lead portfolio manager of the Fund and Senior Vice
President at SunAmerica, discusses SunAmerica's portion of the Fund's
performance during the annual period. SunAmerica manages the small-cap index
sleeve of the Fund.
Our portion of the Fund tracked the return of the Russell 2000(R) Index during
the annual period. While U.S. small-cap stocks outperformed all other
capitalization segments of the U.S. equity market during the annual period, as
measured by the Russell indices, there was still great dispersion among the
performance of the sectors of the Russell 2000(R) Index during the annual
period. Health Care, Information Technology and Industrials were the best
relative performers in terms of total return, each sector posting robust
double-digit positive returns. Conversely, Energy was the only sector in the
Russell 2000(R) Index to post a negative return during the annual period.
Consumer Staples was another notable laggard, posting only a modestly positive
return during the annual period.
Among individual holdings, positions in clinical-stage biopharmaceutical
company Kite Pharma, Inc., semiconductor manufacturer Advanced Micro Devices,
Inc., medical equipment developer Exact Sciences Corp., performance chemicals
manufacturer Chemours Co., and biotechnological products and services provider
Bluebird Bio, Inc. were the top positive contributors to the Russell 2000(R)
Index and to our portion of the Fund's relative performance during the annual
period. Notable laggards included beauty products company Avon Products, Inc.,
cash machine provider Cardtronics PLC, industrial minerals producer U.S. Silica
Holdings, Inc., oral drug delivery technology developer Depomed, Inc. and
telecommunications services provider Windstream Holdings, Inc.
Each sector and stock in the Russell 2000(R) Index was represented in our
portion of the Fund with approximately the same weighting as in the Index and
therefore had a similar effect.
Below, Michael Skillman, portfolio manager, managing director and Chief
Executive Officer at Cadence, discusses Cadence's portion of the Fund's
performance during the annual period. Cadence manages the micro-cap sleeve of
the Fund.
Our portion of the Fund outperformed the return of the Russell 2000(R) Index
during the annual period. Strong stock selection drove the positive relative
performance.
The Health Care sector was the leading driver of our portion of the Fund's
relative outperformance, due primarily to strong stock selection within the
Health Care Equipment & Services industry group. Orasure Technologies, Inc., a
diagnostic test manufacturer, saw its share price more than double during the
annual period due to rising overseas sales of its HIV and Hepatitis C tests as
well as growth in its consumer genetic tests. Such gains were partially offset
by positioning in the Pharmaceuticals, Biotechnology & Life Sciences industry
group, which detracted. Our portion of the Fund had no exposure to larger
market cap companies within this industry group, which performed particularly
well during the annual period, as we focus on micro-cap companies. Still, a
position in Supernus Pharmaceuticals, Inc. experienced a more than doubling of
its share price during the annual period based on growth in several of its
drugs as well as progress in its product pipeline.
125
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Industrials was another positive contributor to our portion of the Fund's
results, owing to strong stock selection in the Capital Goods industry group.
Stock selection in the Consumer Discretionary sector also contributed
positively to our portion of the Fund's relative performance. Two
housing-related companies performed especially well, benefiting from
company-specific drivers as well as industry tailwinds. Financials boosted our
portion of the Fund's relative results as well, attributable mostly to
effective stock selection in the Insurance industry group. State National Cos.
saw its shares increase significantly upon the announcement that it would be
acquired for a premium by Markel.
Partially offsetting these positive contributors was our portion of the Fund's
relative underperformance in Materials, which was the leading detractor from
results due primarily to weak stock selection. Having an underweight to
Materials, which outperformed the Russell 2000(R) Index during the annual
period, also hurt, albeit to a lesser extent. A position in Flotek Industries,
Inc. particularly disappointed, with its shares declining during the annual
period as questions emerged regarding the efficacy of its key chemical product
used in oil drilling.
Stock selection in Consumer Staples also detracted from our portion of the
Fund's relative results. A position in Lifeway Foods, Inc. a kefir producer,
was one of two food and beverage companies in which our portion of the Fund
held positions that saw their share prices decline during the annual period.
Lifeway Foods posted disappointing sales results despite expanded distribution
to capitalize on its increased production capacity. Price discounting, which
hurt its margins, also dampened the company's financial results. Shares of
Orchids Paper Products Co., a private label tissue manufacturer, also declined
during the annual period. Its shares fell on investor concerns about customer
concentration as well as on a shortfall in cash flow due to a timing mismatch
between capital spending to increase production and a ramp up in new contracts.
--------
Past performance is no guarantee of future results. Diversification does not
guarantee a profit or protect against a loss.
* The Russell 2000(R) Index measures the performance of approximately 2,000
small-cap companies in the Russell 3000(R) Index, which is made up of 3,000 of
the biggest U.S. stocks. The Russell 2000(R) Index serves as a benchmark for
small-cap stocks in the United States. The weighted average market
capitalization for companies in the Russell 2000(R) Index is about US$1.3
billion.
** The Russell Microcap(R) Index is a capitalization weighted index of 2,000
small-cap and micro-cap stocks that captures the smallest 1,000 companies in
the Russell 2000(R) Index, plus 1,000 smaller U.S.-based listed stocks. The
Russell Microcap(R) Index is recalculated annually to prevent growing stocks
from distorting index performance, and to include new entrants. It represents
just 3% of the overall U.S. equity market by capitalization.
Indices are not managed and an investor cannot invest directly in an index.
A portion of the Fund is actively managed and its holdings are subject to
change. Accordingly, securities listed may or may not be a part of current
portfolio construction.
126
SunAmerica Specialty Series
COMPARISONS: FUNDS vs. INDICES -- (unaudited) (continued)
Since inception, $10,000 invested in AIG Small-Cap Fund Class A shares would be
valued at $14,325. The same amount invested in securities mirroring the
performance of the Russell(R) 2000 Index would be valued at $14,472.
[CHART]
Date SunAmerica Small-Cap Fund Class A# Russell 2000/R/ Index@
----------- ---------------------------------- ----------------------
2/5/2014 9,422 10,000
2/28/2014 9,981 10,827
3/31/2014 9,881 10,753
4/30/2014 9,384 10,336
5/31/2014 9,410 10,419
6/30/2014 9,893 10,973
7/31/2014 9,209 10,309
8/31/2014 9,692 10,820
9/30/2014 9,127 10,166
10/31/2014 9,730 10,836
11/30/2014 9,698 10,846
12/31/2014 10,107 11,155
1/31/2015 9,824 10,796
2/28/2015 10,327 11,437
3/31/2015 10,660 11,636
4/30/2015 10,402 11,339
5/31/2015 10,565 11,598
6/30/2015 10,798 11,685
7/31/2015 10,791 11,549
8/31/2015 10,188 10,824
9/30/2015 9,742 10,293
10/31/2015 10,314 10,872
11/30/2015 10,578 11,226
12/31/2015 10,091 10,662
1/31/2016 9,242 9,725
2/29/2016 9,112 9,724
3/31/2016 9,783 10,501
4/30/2016 10,030 10,665
5/31/2016 10,311 10,906
6/30/2016 10,379 10,899
7/31/2016 11,064 11,549
8/31/2016 11,146 11,754
9/30/2016 11,393 11,885
10/31/2016 10,790 11,320
11/30/2016 11,962 12,582
12/31/2016 12,308 12,934
1/31/2017 12,287 12,985
2/28/2017 12,548 13,236
3/31/2017 12,682 13,253
4/30/2017 12,929 13,399
5/31/2017 12,597 13,126
6/30/2017 13,020 13,580
7/31/2017 13,133 13,681
8/31/2017 13,302 13,507
9/30/2017 14,219 14,350
10/31/2017 14,325 14,472
Class A Class C Class W
------------------ ------------------ ------------------
Average Average Average
Annual Cumulative Annual Cumulative Annual Cumulative
AIG Small-Cap Fund# Return Return+ Return Return+ Return Return+
------------------- ------- ---------- ------- ---------- ------- ----------
1 Year Return 25.13% 32.76% 30.89% 31.89% 32.96% 32.96%
-----------------------------------------------------------------------------
5 Year Return N/A N/A N/A N/A N/A N/A
-----------------------------------------------------------------------------
10 Year Return N/A N/A N/A N/A N/A N/A
-----------------------------------------------------------------------------
Since Inception* 10.10% 52.04% 11.13% 48.32% 12.08% 53.08%
-----------------------------------------------------------------------------
+ Cumulative returns do not include sales load. If sales load had been
included, the return would be lower.
* Inception Date - Class A: 02/06/14; Class C: 02/06/14; Class W: 02/06/14
# For the purposes of the graph, it has been assumed that the maximum sales
charge of 5.75% of offering price was deducted from the initial $10,000
investment in the Fund. For purposes of the table, it has been assumed that
the maximum sales charge with respect to the Class A shares was deducted from
the initial investment in the Fund and that the CDSC with respect to the
Class C shares has been deducted as applicable.
For the 12 month period ended October 31, 2017, the AIG Small-Cap Fund Class A
returned 25.13%, compared to 27.85% for the Russell(R) 2000 Index. (The
performance data and graph do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.)
--------
Performance data quoted represents past performance and is no guarantee of
future results. Maximum Sales Charge: Class A: 5.75%, Class C: 1.00% CDSC. The
Fund's daily net asset values are not guaranteed and shares are not insured by
the FDIC, the Federal Reserve Board or any other agency. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be higher or lower than the original cost. Current
performance may be higher or lower than that shown. Performance as of the most
recent month end is available at www.aig.com/funds.
@ The Russell 2000(R) Index measures the performance of approximately 2,000
small-cap companies in the Russell 3000(R) Index, which is made up of 3,000
of the biggest U.S. stocks. The Russell 2000(R) Index serves as a benchmark
for small-cap stocks in the United States. The weighted average market
capitalization for companies in the Russell 2000(R) Index is about US$1.3
billion. Indices are not managed and an investor cannot invest directly into
an index.
127
[LOGO]
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Directors/Trustees VOTING PROXIES ON FUND PORTFOLIO DELIVERY OF SHAREHOLDER DOCUMENTS
Richard W. Grant SECURITIES The Funds have adopted a policy that
Peter A. Harbeck A description of the policies and proce- allows them to send only one copy of a
Dr. Judith L. Craven dures that the Trust uses to determine Fund's prospectus, proxy material,
William F. Devin how to vote proxies related to securities annual report and semi-annual report
Stephen J. Gutman held in a Fund's portfolio, which is (the "shareholder documents") to
Officers available in the Trust's Statement of shareholders with multiple accounts
John T. Genoy, President and Chief Additional Information, may be ob- residing at the same "household." This
Executive Officer tained without charge upon request, by practice is called householding and
Kara Murphy, Vice President calling (800) 858-8850. The in- reduces Fund expenses, which benefits
James Nichols, Vice President formation is also available from the you and other shareholders. Unless the
Gregory N. Bressler, Secretary EDGAR database on the U.S. Secu- Funds receive instructions to the con-
Christopher C. Joe, Chief Compliance rities and Exchange Commission's trary, you will only receive one copy of
Officer website at http://www.sec.gov. the shareholder documents. The Funds
Gregory R. Kingston, Treasurer PROXY VOTING RECORD ON FUND will continue to household the share-
Shawn Parry, Vice President and PORTFOLIO SECURITIES holder documents indefinitely, until we
Assistant Treasurer Information regarding how the Trust are instructed otherwise. If you do not
Donna McManus, Vice President and voted proxies related to securities held wish to participate in householding
Assistant Treasurer in the Funds during the most recent please contact Shareholder Services at
Kathleen Fuentes, Chief Legal Officer twelve month period ended June 30 is (800) 858-8850 ext. 6010 or send a
and Assistant Secretary available, once filed with the U.S. written request with your name, the
Matthew J. Hackethal, Anti-Money Securities and Exchange Commission, name of your fund(s) and your account
Laundering Compliance Officer without charge, upon request, by call- number(s) to AIG Funds c/o BFDS,
Investment Adviser ing (800) 858-8850 or on the U.S. P.O. Box 219186, Kansas City MO,
SunAmerica Asset Management, LLC Securities and Exchange Commission 64121-9186. We will resume in-
Harborside 5 website at http://www.sec.gov. dividual mailings for your account
185 Hudson Street, Suite 3300 DISCLOSURE OF QUARTERLY PORTFOLIO within thirty (30) days of receipt of
Jersey City, NJ 07311 HOLDINGS your request.
Distributor The Trust is required to file its com- This report is submitted solely for the
AIG Capital Services, Inc. plete schedule of portfolio holdings general information of shareholders of
Harborside 5 with the U.S. Securities and Exchange the Funds. Distribution of this report
185 Hudson Street, Suite 3300 Commission for its first and third fiscal to persons other than shareholders of
Jersey City, NJ 07311 quarters on Form N-Q. The Trust's the Funds is authorized only in con-
Shareholder Servicing Agent Forms N-Q are available on the U.S. nection with a currently effective pro-
AIG Fund Services, Inc. Securities and Exchange Commission spectus, setting forth details of the
Harborside 5 website at http://www.sec.gov. You can Funds, which must precede or accom-
185 Hudson Street, Suite 3300 also review and obtain copies of the pany this report.
Jersey City, NJ 07311 Forms N-Q at the U.S. Securities and
Custodian and Transfer Agent Exchange Commission Public Refer-
State Street Bank and Trust Company ence Room in Washington DC
One Lincoln Street (information on the operation of the
Boston, MA 02111 Public Reference Room may be ob-
tained by calling 1-800-SEC-0330).
[GRAPHIC]
GO PAPERLESS!!
DID YOU KNOW THAT YOU HAVE THE OPTION TO
RECEIVE YOUR SHAREHOLDER REPORTS ONLINE?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
IT'S QUICK -- Fund documents will be received faster than via traditional mail.
IT'S CONVENIENT -- Elimination of bulky documents from personal files.
IT'S COST EFFECTIVE -- Reduction of your Fund's printing and mailing costs.
TO SIGN UP FOR ELECTRONIC DELIVERY, FOLLOW
THESE SIMPLE STEPS:
1 GO TO WWW.AIG.COM/FUNDS
2 CLICK ON THE LINK TO "GO PAPERLESS!!"
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.aig.com/funds at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
[GRAPHIC]
For information on receiving this report online, see inside back cover.
AIG Funds are advised by SunAmerica Asset Management, LLC (SAAMCo) and
distributed by AIG Capital Services, Inc. (ACS), Member FINRA. Harborside 5,
185 Hudson Street, Suite 3300, Jersey City, NJ 07311, 800-858-8850. SAAMCo and
ACS are members of American International Group, Inc. (AIG).
Investors should carefully consider a Fund's investment objectives, risks,
charges and expenses before investing. The prospectus, containing this and
other important information, can be obtained from your financial adviser, the
AIG Funds Sales Desk at 800-858-8850, ext. 6003, or at aig.com/funds. Read the
prospectus carefully before investing.
HWANN-10/17
Item 2. Code of Ethics
SunAmerica Specialty Series ("the registrant") has adopted a Code of
Ethics applicable to its Principal Executive and Principal Accounting
Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002.
During the fiscal year ended 2017, there were no reportable waivers or
implicit waivers to a provision of the Code of Ethics that applies to
the registrant's Principal Executive and Principal Accounting
Officers. During the fiscal year ended October 31, 2017, however,
there were reportable amendments to the Code that apply to the Covered
Officers, and that relate to one or more of the items set forth in
paragraph (b) of Item 2 of Form N-CSR. In particular, the Code has
been amended to provide an enhanced description of the Covered
Officers' responsibilities, which include a responsibility to observe
the ethical principles contained in the Code.
Item 3. Audit Committee Financial Expert.
Currently, the registrant does not have an Audit Committee member who
possesses all of the attributes required to be an "audit committee
financial expert," as defined in instruction 2(b) of Item 3 of Form
N-CSR. However, the Board of Trustees believes that the members of the
Audit Committee have substantial experience relating to the review of
financial statements and the operations of audit committees.
Accordingly, the Board believes that the members are qualified to
evaluate the registrant's financial statements, supervise the
registrant's preparation of its financial statements, and oversee the
work of the registrant's independent auditors.
Item 4. Principal Accountant Fees and Services.
(a)--(d) Aggregate fees billed to the registrant for the last two
fiscal years for professional services rendered by the registrant's
principal accountants were as follows:
2016 2017
(a) Audit Fees............................. $251,382 $275,088
(b) Audit-Related Fees..................... $ 0 $ 0
(c) Tax Fees............................... $ 0 $ 0
(d) All Other Fees......................... $ 0 $ 0
Audit Fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
principal accountant in connection with statutory and regulatory
filings.
Aggregate fees billed to the investment adviser and Adviser Affiliates
(as defined below in Item 4(e)) that are required to be pre-approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X for
the last two fiscal years for services rendered by the registrant's
principal accountant were as follows:
2016 2017
(b) Audit-Related Fees.................... $ 0 $ 0
(c) Tax Fees.............................. $ 0 $ 0
(d) All Other Fees........................ $ 0 $ 0
(e) (1) The registrant's audit committee pre-approves all audit services
provided by the registrant's principal accountant for the registrant
and all non-audit services provided by the registrant's principal
accountant for the registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the
investment adviser ("Adviser Affiliates") that provides ongoing
services to the registrant, if the engagement by the investment
adviser or Adviser Affiliate relates directly to the operations and
financial reporting of the registrant. The audit committee has not
presently established any pre-approval policies and procedures that
permit the pre-approval of the above services other than by the full
audit committee. Certain de minimis exceptions are allowed for
non-audit services in accordance with Rule 2-01(c)(7)(i)(C) of
Regulation S-X as set forth in the registrant's audit committee
charter.
(2) No services included in (b)-(d) above in connection with fees
billed to the registrant or the investment adviser or Adviser
Affiliates were approved pursuant to paragraph (c)(7)(i)(C) of Rule
2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the
preceding fiscal year by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser,
and Adviser Affiliates that provide ongoing services to the registrant
for 2016 and 2017 were $0 and $0, respectively.
(h) Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees that were
implemented after the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15)) of Schedule 14A (17 CFR
240.14a - 101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined under Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the
registrant's last fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management
Investment Companies.
Not applicable.
Item 13. Exhibits.
(a) (1) Code of Ethics applicable to its Principal Executive and Principle
Accounting Officers pursuant to Section 406 of the Sarbanes-Oxley Act
of 2002 attached hereto as Exhibit 99.406. Code of Ethics.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the
Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Specialty Series
By: /s/ John T. Genoy
--------------------------
John T. Genoy
President
Date: January 8, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
--------------------------
John T. Genoy
President
Date: January 8, 2018
By: /s/ Gregory R. Kingston
--------------------------
Gregory R. Kingston
Treasurer
Date: January 8, 2018