nvcsrs
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
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Investment Company Act file number |
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811-21805
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SunAmerica Focused Alpha Large-Cap Fund, Inc.
(Exact name of registrant as specified in charter)
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Harborside Financial Center, 3200 Plaza 5 Jersey City, NJ
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07311 |
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(Address of principal executive offices)
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(Zip code) |
John T. Genoy
Senior Vice President
SunAmerica Asset Management Corp.
Harborside Financial Center,
3200 Plaza 5
Jersey City, NJ 07311
(Name and address of agent for service)
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Registrants telephone number, including area code: |
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(201) 324-6414
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Date of fiscal year end: |
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December 31
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Date of reporting period: |
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June 30, 2011
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Item 1.
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Reports to Stockholders
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INFORMATION
REGARDING THE FUNDS DISTRIBUTION POLICY
The SunAmerica Focused Alpha Large-Cap Fund, Inc. (the
Fund) has established a dividend distribution policy
(the Distribution Policy) pursuant to which the Fund
makes a level dividend distribution each quarter to shareholders
of its common stock (after payment of interest on any
outstanding borrowings or dividends on any outstanding preferred
shares) at a rate that is based on a fixed amount per share as
determined by the Board of Directors of the Fund (the
Board), subject to adjustment in the fourth quarter,
as necessary, so that the Fund satisfies the minimum
distribution requirements of the Internal Revenue Code of 1986,
as amended (the Code). As of the most recent
quarterly dividend distribution paid on July 6, 2011, the
fixed amount of the quarterly dividend distribution was $0.05
per share. Pursuant to an exemptive order (the
Order) issued to the Fund by the Securities and
Exchange Commission (SEC) on February 3, 2009,
the Fund may distribute long-term capital gains more frequently
than the limits provided in Section 19(b) under the
Investment Company Act of 1940, as amended (the 1940
Act) and
Rule 19b-1
thereunder. Therefore, dividend distributions paid by the Fund
during the year may include net income, short-term capital
gains, long-term capital gains
and/or
return of capital. If the total distributions made in any
calendar year exceed investment company taxable income and net
capital gains, such excess distributed amount would be treated
as ordinary dividend income to the extent of the Funds
current and accumulated earnings and profits. Distributions in
excess of the earnings and profits would first be a tax-free
return of capital to the extent of the adjusted tax basis in the
shares. After such adjusted tax basis is reduced to zero, the
distribution would constitute capital gains (assuming the shares
are held as capital assets). A return of capital represents a
return of a shareholders investment in the Fund and should
not be confused with yield, income or
profit. Shareholders will receive a notice with each
dividend distribution, if required by Section 19(a) under
the 1940 Act, estimating the sources of such dividend
distribution and providing other information required by the
Order. Investors should not draw any conclusions about the
Funds investment performance from the amount of this
distribution or from the terms of the Distribution Policy.
The Board has the right to amend, suspend or terminate the
Distribution Policy at any time without prior notice to
shareholders. The Board might take such action, for example, if
the Distribution Policy had the effect of decreasing the
Funds assets to a level that was determined to be
detrimental to Fund shareholders. An amendment, suspension or
termination of the Distribution Policy could have a negative
effect on the Funds market price per share which, in turn
could create or widen a trading discount. Please see Note 2
to the financial statements included in this report for
additional information regarding the Distribution Policy.
The Fund is also subject to investment and market risk. An
economic downturn could have a material adverse effect on its
investments and could result in the Fund not achieving its
investment or distribution objectives, which may affect the
distribution. Please refer to the prospectus for a fuller
description of the Funds risks.
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June 30,
2011 |
SEMI-ANNUAL REPORT |
SUNAMERICA
FOCUSED ALPHA LARGE-CAP FUND, INC.
SunAmerica
Focused Alpha Large-Cap Fund (FGI)
Table
of Contents
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SHAREHOLDERS LETTER
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1
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STATEMENT OF ASSETS AND LIABILITIES
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3
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STATEMENT OF OPERATIONS
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4
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STATEMENT OF CHANGES IN NET ASSETS
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5
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FINANCIAL HIGHLIGHTS
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6
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PORTFOLIO OF INVESTMENTS
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7
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NOTES TO FINANCIAL STATEMENTS
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9
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APPROVAL OF INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND
SUBADVISORY AGREEMENTS
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14
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DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
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18
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RESULTS OF ANNUAL SHAREHOLDER MEETING
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19
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June 30,
2011 |
SEMI-ANNUAL REPORT |
Shareholders
Letter (unaudited)
Dear Shareholders:
We are pleased to present this semi-annual report for the
SunAmerica Focused Alpha Large-Cap Fund (the Fund)
covering a six-month period that was characterized by rather
high volatility and significant fluctuation in investor
sentiment but that overall saw U.S. equities continue their
positive momentum from 2010 and the Fund outperform its
benchmark index on a relative basis.
For the six months ended June 30, 2011, the Funds
total return based on net asset value (NAV) was 13.52%. The
Funds benchmark, the Russell
1000®
Index1,
returned 6.37% for the same period. The Funds total return
based on market price was 21.98% during the semi-annual period.
As of June 30, 2011, the Funds NAV was $19.85, and
its market price was $19.10.
Most of the gains generated by the U.S. equity market
during the semi-annual period can be attributed to the first
quarter of 2011 when improving trends in labor, housing,
manufacturing and consumer confidence pointed to a continuation
in the economic recovery. Federal Reserve Board (the
Fed) purchases of U.S. Treasury securities,
which commenced in the fourth quarter of 2010, injected
liquidity into the economy and reassured investors that monetary
policy would remain favorable, at least in the short term. A
positive trajectory in corporate earnings and cash flows and
strong merger and acquisition activity further supported
U.S. equity market performance. Indeed, despite great
exogenous shocks resulting from Middle East and North African
turmoil, a series of disasters in Japan, political debate over
collective bargaining rights in Wisconsin and the possible
repeal of health care reform in Washington D.C.,
U.S. equities rewarded investors with solid returns during
the first quarter of 2011.
The broad U.S. equity market experienced a much more
volatile second quarter, rising to a three-year high in April
before losing most of its early 2011 gains by mid-June and then
recovering somewhat in the very last week of the semi-annual
period. In early April, commodity prices declined and
expectations ran high for strong corporate profit growth.
However, while home construction rose modestly in May, housing
and employment remained key weak spots in the U.S. economy.
Also, concerns about Greeces debt crisis re-surfaced, the
U.S. Congress wrangled over the U.S. debt ceiling, the
Feds quantitative easing program was scheduled to expire
on June 30, 2011, the impact of Japans natural and
man-made disasters worked their way through the global supply
chain and deadly storms cut a wide swath of destruction across
the midwestern and southern United States. In turn, the
U.S. equity market lost ground. Toward the very end of
June, U.S. equities overall recovered from their May to
mid-June decline on the heels of better than expected
U.S. manufacturing activity, improved automobile sales and
a short-term resolution of the sovereign debt crisis in Greece.
Despite this volatility, all capitalization segments of the
U.S. equity market advanced during the semi-annual period.
Mid-cap stocks, as measured by the Russell
Midcap®
Index2,
performed best, followed by large-cap and then small-cap stocks,
as measured by the Russell
1000®
Index and the Russell
2000®
Index2,
respectively, which performed nearly in line with each other.
Growth-oriented stocks outpaced value-oriented stocks across the
capitalization spectrum. Within the Russell
1000®
Index, nine of the ten sectors increased on an absolute basis.
The best performing sectors in the Russell
1000®
Index on a relative basis were health care and energy. The
weakest performing sector was financials, which generated a
negative return, followed by information technology.
As you know, the Fund employs a multi-managed, focused approach,
bringing together two well-known equity managers, Marsico
Capital Management LLC (Marsico) and BlackRock
Investment Management (BlackRock) who each
contributes stock picks to the Funds portfolio. Marsico
emphasizes large-cap growth investing, while BlackRock favors a
large-cap value investment style. The Fund managers
combined stock picks, blending large growth and large value, are
designed to offer the potential for attractive returns over the
long term. It is important to remember that over time and by
design, blending the different investment styles of these two
proven managers is intended to help the Fund meet its investment
objective.
Also, on July 27, 2011, the Fund announced that its Board
of Directors had formally approved a proposal to reorganize the
Fund into a new open-end fund, subject to approval by
shareholders (the Reorganization). It is anticipated
that this new open-end fund will be managed by SunAmerica Asset
Management Corp. and subadvised by the current subadvisers of
the Fund. If approved by shareholders, the Reorganization is
expected to close in January 2012. Please see the Notes to the
Financial Statements included in this report for additional
information regarding the proposed Reorganization.
1
Shareholders
Letter (unaudited)
(continued)
Clearly, maintaining a long-term perspective is a basic tenet of
effective investing for both managers and investors at all
times. We continue to believe that equity investments are an
important component of a long-term diversified investment plan.
We value your ongoing confidence in us and look forward to
serving your investment needs in the future.
Sincerely,
Peter A. Harbeck
President and CEO
SunAmerica Asset Management Corp.
Past performance is no guarantee of future results.
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1
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The Russell 1000 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 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 includes the largest 1,000
securities in the Russell 3000. Indices are not managed and an
investor cannot invest directly into an index.
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2
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The Russell Midcap Index measures the performance of the
800 smallest companies in the Russell 1000 Index, which
represent approximately 30% of the total market capitalization
of the Russell 1000 Index. The Russell 2000 Index
measures the performance of the 2,000 smallest companies in
the Russell 3000 Index, which represents approximately 8% of the
total market capitalization of the Russell 3000 Index.
Indices are not managed and an investor cannot invest directly
into an index.
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Investors should carefully consider the SunAmerica Focused Alpha
Large-Cap Funds investment objectives, strategies, risks,
charges and expenses before investing. The Fund should be
considered as only one element of a complete investment program.
The Funds equity exposure involves special risks. An
investment in this Fund should be considered speculative. There
is no assurance that the Fund will achieve its investment
objectives. The Fund is actively managed and its portfolio
composition will vary. Investing in the Fund is subject to
several risks, including: Non-Diversified Status Risk, Growth
and Value Stock Risk, Key Adviser Personnel Risk, Investment and
Market Risk, Issuer Risk, Foreign Securities Risk, Emerging
Markets Risk, Income Risk, Market Price of Shares Risk,
Management Risk, Anti-Takeover Provisions Risk and Portfolio
Turnover Risk. The price of shares of the Fund traded on the New
York Stock Exchange will fluctuate with market conditions and
may be worth more or less than their original offering price.
Shares of closed-end funds often trade at a discount to their
net asset value, but may also trade at a premium.
2
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
STATEMENT
OF ASSETS AND LIABILITIES June 30,
2011 (unaudited)
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ASSETS:
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Investments at value (unaffiliated)*
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$
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144,137,645
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Cash
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64,938
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Receivable for:
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Dividends and interest
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177,232
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Prepaid expenses and other assets
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3,872
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Total assets
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144,383,687
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LIABILITIES:
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Payable for:
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Investment advisory and management fees
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114,158
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Administration fees
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4,568
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Directors fees and expenses
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2,212
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Other accrued expenses
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509,802
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Total liabilities
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630,740
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Net Assets
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$
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143,752,947
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NET ASSETS REPRESENTED BY:
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Common stock, $0.001 par value (200,000,000 shares
authorized)
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$
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7,241
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Additional paid-in capital
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114,327,726
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114,334,967
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Accumulated undistributed net investment income (loss)
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(1,113,689
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)
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Accumulated undistributed net realized gain (loss) on investments
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6,089,967
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Unrealized appreciation (depreciation) on investments
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24,441,702
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Net Assets
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$
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143,752,947
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NET ASSET VALUE:
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Net assets
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$
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143,752,947
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Shares outstanding
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7,241,427
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Net asset value per share
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$
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19.85
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* Cost
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Investments (unaffiliated)
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$
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119,695,943
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See Notes to Financial Statements
3
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
STATEMENT
OF OPERATIONS For the six months ended
June 30, 2011 (unaudited)
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INVESTMENT INCOME:
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Dividends (unaffiliated)
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$
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601,737
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Interest (unaffiliated)
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|
187
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Total investment income
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|
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601,924
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EXPENSES:
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Investment advisory and management fees
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692,849
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Administration fees
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27,714
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Transfer agent fees and expenses
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|
11,577
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Custodian and accounting fees
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29,737
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Reports to shareholders
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|
32,572
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Audit and tax fees
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|
19,726
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Legal fees
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|
75,416
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Directors fees and expenses
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|
27,744
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Other expenses
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74,153
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Total expenses before custody credits
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991,488
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Custody credits earned on cash balances
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(18
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)
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Net expenses
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991,470
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Net investment income (loss)
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(389,546
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)
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
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Net realized gain (loss) on investments (unaffiliated)
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23,056,004
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Change in unrealized appreciation (depreciation) on investments
(unaffiliated)
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(5,507,041
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)
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Net realized and unrealized gain (loss) on investments
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17,548,963
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NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS
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|
$
|
17,159,417
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|
See Notes to Financial Statements
4
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
STATEMENT
OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
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For the
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|
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six months ended
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For the
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|
|
|
June 30, 2011
|
|
|
year ended
|
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|
(unaudited)
|
|
|
December 31, 2010
|
|
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INCREASE (DECREASE) IN NET ASSETS
|
|
|
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
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Net investment income (loss)
|
|
$
|
(389,546
|
)
|
|
$
|
600,487
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|
Net realized gain (loss) on investments
|
|
|
23,056,004
|
|
|
|
17,745,533
|
|
Net unrealized gain (loss) on investments
|
|
|
(5,507,041
|
)
|
|
|
8,089,538
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|
|
|
|
|
|
|
|
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Net increase (decrease) in net assets resulting from operations
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|
|
17,159,417
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|
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|
26,435,558
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|
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|
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|
|
Distributions to shareholders from:
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|
|
|
|
|
|
|
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Net investment income
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|
|
|
*
|
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|
(600,487
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)
|
Net realized gain on investments
|
|
|
(724,143
|
)*
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|
|
(1,209,870
|
)#
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Return of capital
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|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions to shareholders
|
|
|
(724,143
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)
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|
(1,810,357
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)
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Capital share transactions:
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Cost of 0 and 2,413,809 shares purchased through a
tender offer (Note 7)(1)
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(40,335,630
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)
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|
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|
|
|
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Total increase (decrease) in net assets
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16,435,274
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|
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(15,710,429
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)
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NET ASSETS:
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|
|
|
|
|
|
|
|
Beginning of period
|
|
|
127,317,673
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|
|
|
143,028,102
|
|
|
|
|
|
|
|
|
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End of period
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$
|
143,752,947
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|
|
$
|
127,317,673
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Includes accumulated undistributed net
investment income (loss)
|
|
$
|
(1,113,689
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
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Amounts for net investment income,
net realized gains on investments and return of capital are
estimated as of June 30, 2011 and are subject to
change and recharacterization at fiscal year end.
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|
#
|
|
The total distributions for the
calendar year exceeded investment company taxable income and net
capital gains and resulted in an excess distributed amount to be
treated as ordinary dividend income to the extent of the
Funds current and accumulated earnings and profits (see
Note 2).
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(1)
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Includes expenses associated with
the in-kind tender offer.
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See Notes to Financial Statements
5
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
FINANCIAL
HIGHLIGHTS
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|
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|
|
|
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|
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For the six
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
months ended
|
|
|
For the year
|
|
|
For the year
|
|
|
For the year
|
|
|
For the year
|
|
|
For the year
|
|
|
|
June 30, 2011
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
|
(unaudited)
|
|
|
December 31, 2010
|
|
|
December 31, 2009
|
|
|
December 31, 2008
|
|
|
December 31, 2007
|
|
|
December 31, 2006
|
|
|
Net Asset Value, Beginning of Period
|
|
$
|
17.58
|
|
|
$
|
14.81
|
|
|
$
|
12.39
|
|
|
$
|
21.16
|
|
|
$
|
20.21
|
|
|
$
|
19.06
|
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) @
|
|
|
(0.05
|
)
|
|
|
0.06
|
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
0.02
|
|
|
|
(0.00
|
)
|
Net realized and unrealized gain (loss) on investments
|
|
|
2.42
|
|
|
|
2.83
|
|
|
|
2.72
|
|
|
|
(7.58
|
)
|
|
|
3.39
|
|
|
|
2.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from investment operations
|
|
|
2.37
|
|
|
|
2.89
|
|
|
|
2.77
|
|
|
|
(7.52
|
)
|
|
|
3.41
|
|
|
|
2.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions From:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
*
|
|
|
(0.07
|
)
|
|
|
(0.05
|
)
|
|
|
(0.06
|
)
|
|
|
(0.02
|
)
|
|
|
(0.00
|
)
|
Net realized gains on investments
|
|
|
(0.10
|
)*
|
|
|
(0.13
|
)(5)
|
|
|
|
|
|
|
|
|
|
|
(1.38
|
)
|
|
|
(0.15
|
)
|
Return of capital
|
|
|
|
*
|
|
|
|
|
|
|
(0.30
|
)
|
|
|
(1.19
|
)
|
|
|
(1.06
|
)
|
|
|
(1.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
(0.10
|
)
|
|
|
(0.20
|
)
|
|
|
(0.35
|
)
|
|
|
(1.25
|
)
|
|
|
(2.46
|
)
|
|
|
(1.20
|
)
|
Capital Share Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAV accretion resulting from shares tendered
|
|
|
|
|
|
|
0.08
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, End of Period
|
|
$
|
19.85
|
|
|
$
|
17.58
|
|
|
$
|
14.81
|
|
|
$
|
12.39
|
|
|
$
|
21.16
|
|
|
$
|
20.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value Total Return #(1)
|
|
|
13.52
|
%
|
|
|
20.25
|
%
|
|
|
23.15
|
%
|
|
|
(36.95
|
)%
|
|
|
17.40
|
%
|
|
|
12.77
|
%(3)
|
Market Value, End of Period
|
|
$
|
19.10
|
|
|
$
|
15.74
|
|
|
$
|
13.67
|
|
|
$
|
10.33
|
|
|
$
|
18.84
|
|
|
$
|
18.40
|
|
Market Value Total Return #(2)
|
|
|
21.98
|
%
|
|
|
16.76
|
%
|
|
|
36.97
|
%
|
|
|
(40.12
|
)%
|
|
|
16.15
|
%
|
|
|
(1.53
|
)%
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets, end of period ($000s)
|
|
$
|
143,753
|
|
|
$
|
127,318
|
|
|
$
|
143,028
|
|
|
$
|
119,598
|
|
|
$
|
204,301
|
|
|
$
|
195,177
|
|
Ratio of expenses to average net assets
|
|
|
1.45
|
%(7)
|
|
|
1.42
|
%(4)
|
|
|
1.34
|
%
|
|
|
1.26
|
%(4)
|
|
|
1.21
|
%(4)
|
|
|
1.23
|
%(4)
|
Ratio of net investment income (loss) to average net assets
|
|
|
(0.57
|
)%(7)
|
|
|
0.42
|
%(4)
|
|
|
0.41
|
%
|
|
|
0.33
|
%(4)
|
|
|
0.11
|
%(4)
|
|
|
0.00
|
%(4)
|
Portfolio turnover rate
|
|
|
63
|
%
|
|
|
130
|
%
|
|
|
135
|
%
|
|
|
120
|
%
|
|
|
57
|
%
|
|
|
91
|
%
|
|
|
|
@
|
|
Calculated based upon average
shares outstanding
|
#
|
|
Total return is not annualized.
|
*
|
|
Amounts for net investment income,
net realized gains on investments and return of capital are
estimated as of June 30, 2011 and are subject to change and
recharacterization at fiscal year end.
|
(1)
|
|
Based on the net asset value per
share. Dividends and distributions, if any, are assumed for
purposes of this calculation to be reinvested at NAV on the
ex-dividend date.
|
(2)
|
|
Based on market value per share.
Dividends and distributions, if any, are assumed for purposes of
this calculation to be reinvested at prices obtained under the
Funds dividend reinvestment plan.
|
(3)
|
|
The Funds performance figure
was increased by 0.11% from gains on the disposal of investments
in violation of investment restrictions.
|
(4)
|
|
Excludes expense reductions. If
expense reductions had been applied, the ratio of expenses and
net investment income to average net assets would have remained
the same.
|
(5)
|
|
The total distributions for the
calendar year exceeded investment company taxable income and net
capital gains and resulted in an excess distributed amount to be
treated as ordinary dividend income to the extent of the
Funds current and accumulated earnings and profits (see
Note 2).
|
(6)
|
|
See Note 7.
|
(7)
|
|
Annualized
|
See Notes to Financial Statements
6
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
PORTFOLIO PROFILE
June 30, 2011 (unaudited)
|
|
|
|
|
Industry Allocation*
|
|
|
|
|
Medical-HMO
|
|
|
9.2
|
%
|
Time Deposit
|
|
|
7.5
|
|
Engines-Internal Combustion
|
|
|
6.2
|
|
Computers
|
|
|
5.8
|
|
Retail-Restaurants
|
|
|
5.8
|
|
Enterprise Software/Service
|
|
|
5.5
|
|
Auction Houses/Art Dealers
|
|
|
5.1
|
|
Finance-Credit Card
|
|
|
5.0
|
|
Web Portals/ISP
|
|
|
4.8
|
|
Food-Retail
|
|
|
4.6
|
|
Casino Hotels
|
|
|
4.6
|
|
Oil Companies-Integrated
|
|
|
4.5
|
|
Medical-Wholesale Drug Distribution
|
|
|
4.4
|
|
Oil Refining & Marketing
|
|
|
4.4
|
|
E-Commerce/Services
|
|
|
4.3
|
|
Wireless Equipment
|
|
|
4.3
|
|
Cellular Telecom
|
|
|
4.1
|
|
Metal-Aluminum
|
|
|
4.1
|
|
Oil-Field Services
|
|
|
4.1
|
|
Applications Software
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
100.3
|
%
|
|
|
|
|
|
|
|
* |
Calculated as a percentage of net assets
|
7
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
PORTFOLIO OF
INVESTMENTS June 30, 2011
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
Security Description
|
|
Shares
|
|
|
(Note 2)
|
|
|
|
COMMON STOCK 92.8%
|
|
|
|
|
|
|
|
|
Applications Software 2.0%
|
|
|
|
|
Salesforce.com, Inc.
|
|
|
19,119
|
|
|
$
|
2,848,349
|
|
|
|
|
|
|
|
|
|
|
Auction House/Art Dealers 5.1%
|
|
|
|
|
Sothebys
|
|
|
167,455
|
|
|
|
7,284,292
|
|
|
|
|
|
|
|
|
|
|
Casino Hotels 4.6%
|
|
|
|
|
Wynn Resorts, Ltd.
|
|
|
45,936
|
|
|
|
6,593,653
|
|
|
|
|
|
|
|
|
|
|
Cellular Telecom 4.1%
|
|
|
|
|
Sprint Nextel Corp.
|
|
|
1,104,000
|
|
|
|
5,950,560
|
|
|
|
|
|
|
|
|
|
|
Computers 5.8%
|
|
|
|
|
Apple, Inc.
|
|
|
24,859
|
|
|
|
8,344,421
|
|
|
|
|
|
|
|
|
|
|
E-Commerce/Services 4.3%
|
|
|
|
|
priceline.com, Inc.
|
|
|
12,205
|
|
|
|
6,248,106
|
|
|
|
|
|
|
|
|
|
|
Engines-Internal Combustion 6.2%
|
|
|
|
|
Cummins, Inc.
|
|
|
85,770
|
|
|
|
8,876,337
|
|
|
|
|
|
|
|
|
|
|
Enterprise Software/Service 5.5%
|
|
|
|
|
Oracle Corp.
|
|
|
240,252
|
|
|
|
7,906,693
|
|
|
|
|
|
|
|
|
|
|
Finance-Credit Card 5.0%
|
|
|
|
|
Discover Financial Services
|
|
|
270,000
|
|
|
|
7,222,500
|
|
|
|
|
|
|
|
|
|
|
Food-Retail 4.6%
|
|
|
|
|
Kroger Co.
|
|
|
266,000
|
|
|
|
6,596,800
|
|
|
|
|
|
|
|
|
|
|
Medical-HMO 9.2%
|
|
|
|
|
Aetna, Inc.
|
|
|
144,000
|
|
|
|
6,348,960
|
|
UnitedHealth Group, Inc.
|
|
|
133,000
|
|
|
|
6,860,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,209,100
|
|
|
|
|
|
|
|
|
|
|
Medical-Wholesale Drug Distribution 4.4%
|
|
|
|
|
Cardinal Health, Inc.
|
|
|
140,000
|
|
|
|
6,358,800
|
|
|
|
|
|
|
|
|
|
|
Metal-Aluminum 4.1%
|
|
|
|
|
Alcoa, Inc.
|
|
|
372,000
|
|
|
|
5,899,920
|
|
|
|
|
|
|
|
|
|
|
Oil Companies-Integrated 4.5%
|
|
|
|
|
Marathon Oil Corp.
|
|
|
124,000
|
|
|
|
6,532,320
|
|
|
|
|
|
|
|
|
|
|
Oil Refining & Marketing 4.4%
|
|
|
|
|
Valero Energy Corp.
|
|
|
246,000
|
|
|
|
6,290,220
|
|
|
|
|
|
|
|
|
|
|
Oil-Field Services 4.1%
|
|
|
|
|
Halliburton Co.
|
|
|
115,549
|
|
|
|
5,892,999
|
|
|
|
|
|
|
|
|
|
|
Retail-Restaurants 5.8%
|
|
|
|
|
Starbucks Corp.
|
|
|
211,218
|
|
|
|
8,340,999
|
|
|
|
|
|
|
|
|
|
|
Web Portals/ISP 4.8%
|
|
|
|
|
Baidu, Inc. ADR
|
|
|
49,199
|
|
|
|
6,894,256
|
|
|
|
|
|
|
|
|
|
|
Wireless Equipment 4.3%
|
|
|
|
|
Motorola Solutions, Inc.
|
|
|
133,000
|
|
|
|
6,123,320
|
|
|
|
|
|
|
|
|
|
|
Total Long-Term Investment Securities
(cost $108,971,943)
|
|
|
133,413,645
|
|
|
|
|
|
|
SHORT-TERM INVESTMENT SECURITIES 7.5%
|
|
|
|
|
Time Deposit 7.5%
|
|
|
|
|
Euro Time Deposit with State Street
Bank and Trust Co.
0.01% due 07/01/11
(cost $10,724,000)
|
|
$
|
10,724,000
|
|
|
|
10,724,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS
(cost $119,695,943)(1)
|
|
|
100.3
|
%
|
|
|
144,137,645
|
|
Liabilities in excess of other assets
|
|
|
(0.3
|
)
|
|
|
(384,698
|
)
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
|
100.0
|
%
|
|
$
|
143,752,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-income producing security
|
(1)
|
|
See Note 6 for cost of
investments on a tax basis.
|
ADR American Depository
Receipt
The following is a summary of the inputs used to value the
Funds net assets as of June 30, 2011 (see
Note 2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
Unadjusted
|
|
|
Other
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
Quoted
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
|
|
|
Prices
|
|
|
Inputs
|
|
|
Inputs
|
|
|
Total
|
|
|
|
|
|
Long-Term Investment Securities:
|
Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auction House/Art Dealers
|
|
$
|
7,284,292
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
7,284,292
|
|
|
|
|
|
Computers
|
|
|
8,344,421
|
|
|
|
|
|
|
|
|
|
|
|
8,344,421
|
|
|
|
|
|
Engines-Internal Combustion
|
|
|
8,876,337
|
|
|
|
|
|
|
|
|
|
|
|
8,876,337
|
|
|
|
|
|
Enterprise Software/Service
|
|
|
7,906,693
|
|
|
|
|
|
|
|
|
|
|
|
7,906,693
|
|
|
|
|
|
Finance Credit Card
|
|
|
7,222,500
|
|
|
|
|
|
|
|
|
|
|
|
7,222,500
|
|
|
|
|
|
Medical-HMO
|
|
|
13,209,100
|
|
|
|
|
|
|
|
|
|
|
|
13,209,100
|
|
|
|
|
|
Retail-Restaurants
|
|
|
8,340,999
|
|
|
|
|
|
|
|
|
|
|
|
8,340,999
|
|
|
|
|
|
Other Industries*
|
|
|
72,229,303
|
|
|
|
|
|
|
|
|
|
|
|
72,229,303
|
|
|
|
|
|
Short-Term Investment Securities:
|
Time Deposit
|
|
|
|
|
|
|
10,724,000
|
|
|
|
|
|
|
|
10,724,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
133,413,645
|
|
|
$
|
10,724,000
|
|
|
$
|
|
|
|
$
|
144,137,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Sum of all other industries each of
which individually has an aggregate market value of less than 5%
of net assets. For a detailed presentation of common stocks by
industry classification, please refer to the Portfolio of
Investments.
|
See Notes to Financial Statements
8
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
NOTES
TO FINANCIAL STATEMENTS June 30,
2011 (unaudited)
|
|
Note 1.
|
Organization
of the Fund
|
SunAmerica Focused Alpha Large-Cap Fund, Inc. (the
Fund) is a non-diversified closed-end management
investment company. The Funds shares are traded on the New
York Stock Exchange (NYSE) under the ticker symbol
FGI. The Fund was organized as a Maryland corporation on
September 7, 2005 and is registered under the Investment
Company Act of 1940, as amended, (the 1940 Act). The
Fund sold 5,236 of its common stock shares (Shares)
on November 14, 2005 to SunAmerica Asset Management Corp.
(the Adviser or SunAmerica). Investment
operations commenced on December 28, 2005 upon settlement
of the sale of 9,650,000 Shares in the amount of $184,315,000
(net of underwriting fees and expenses of $8,685,000).
SunAmerica paid certain organizational expenses of the Fund and
the offering costs of the Fund to the extent they exceeded $.04
per share of the Funds common stock.
The Funds investment objective is to provide growth of
capital. The Fund seeks to pursue this objective by employing a
concentrated stock picking strategy in which the Fund, through
subadvisers selected by the Adviser, actively invests primarily
in a small number of equity securities (i.e. common stocks) of
large-capitalization companies and to a lesser extent in
equity-related securities (i.e., preferred stocks, convertible
securities, warrants and rights) of large-capitalization
companies primarily in the U.S. markets. Under normal market
conditions, the Fund will invest at least 80% of its net assets,
plus any borrowing for investment purposes, in
large-capitalization companies.
Indemnifications: The Funds organizational
documents provide current and former officers and directors with
a limited indemnification against liabilities arising out of the
performance of their duties to the Fund. In addition, pursuant
to Indemnification Agreements between the Fund and each of the
current directors who is not an interested person,
as defined in Section 2(a)(19) of the 1940 Act, of the Fund
(collectively, the Disinterested Directors), the
Fund provides the Disinterested Directors with a limited
indemnification against liabilities arising out of the
performance of their duties to the Fund, whether such
liabilities are asserted during or after their service as
directors. In addition, in the normal course of business the
Fund enters into contracts that contain the obligation to
indemnify others. The Funds maximum exposure under these
arrangements is unknown. Currently, however, the Fund expects
the risk of loss to be remote.
|
|
Note 2.
|
Significant
Accounting Policies
|
The preparation of financial statements in accordance with U.S.
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results
could differ from these estimates and those differences could be
significant. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of
its financial statements:
Security Valuation: Stocks are generally valued
based upon closing sales prices reported on recognized
securities exchanges on which the securities are principally
traded. 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 NYSE, securities
traded primarily on security exchanges outside the U.S. 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 securitys price is
available from more than one exchange, the Fund uses the
exchange that is the primary market for the security. However,
depending on the foreign market, closing prices may be up to 15
hours old when they are used to price the Funds shares,
and the Fund may determine that certain closing prices do not
reflect the fair value of the security. This determination will
be based on 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 the 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 of Directors (the
Board or the Directors) to reflect what
it believes to be the fair value of the securities as of the
close of regular trading on the NYSE. The Fund may also fair
value securities in other situations, for
9
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
NOTES
TO FINANCIAL STATEMENTS June 30,
2011 (unaudited) (continued)
example, when a particular foreign market is closed but the Fund
is open. For foreign equity securities, the Fund uses an outside
pricing service to provide it with closing market prices and
information used for adjusting those prices.
Short-term securities with 60 days or less to maturity are
amortized to maturity based on their cost to the Fund if
acquired within 60 days of maturity or, if already held by
the Fund on the 60th day, are amortized to maturity based on the
value determined on the 61st day.
Securities for which market quotations are not readily available
or if a development/significant event occurs that may
significantly impact the value of the security, then these
securities are valued, as determined pursuant to procedures
adopted in good faith by the Board. There is no single standard
for making fair value determinations, which may result in prices
that vary from those of other funds.
The various inputs that may be used to determine the value of
the Funds investments are summarized into three broad
levels listed below:
Level 1 Unadjusted quoted prices in active
markets for identical securities
Level 2 Other significant observable inputs
(includes 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, 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).
The inputs or methodology used for valuing securities are not
necessarily an indication of the risk associated with investing
in those securities.
The summary of the inputs used to value the Funds net
assets as of June 30, 2011 are reported on a schedule
following the Portfolio of Investments.
Repurchase Agreements: For repurchase agreements,
the Funds custodian takes possession of the collateral
pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark to market basis, 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, the Fund has the right
to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings
are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or
limited. At June 30, 2011, the Fund did not invest in any
repurchase agreements.
Securities Transactions, Investment Income, Expenses,
Dividends and Distributions to Shareholders: Security
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.
Dividend income is recorded on the ex-dividend date. Foreign
income and capital gains may be subject to foreign withholding
taxes and capital gains taxes at various rates. Under applicable
foreign law, a withholding of tax may be imposed on interest,
dividends, and capital gains at various rates. Interest earned
on cash balances held at the custodian are shown as custody
credits on the Statement of Operations.
The Fund has adopted a distribution policy (the
Distribution Policy) under which the Fund will pay
level quarterly dividend distributions, subject to an adjusting
dividend distribution in the fourth quarter as described below.
The Distribution Policy and the dividend distribution rate may
be terminated or modified at any time. The Fund intends to pay a
level quarterly amount in each of the first three quarters of
the calendar year and increase, if necessary, the amount payable
for the fourth quarter to an amount expected to satisfy the
minimum distribution requirements of the Internal Revenue Code
of 1986, as amended (the Code). Each quarter the
Board will review the amount of any potential dividend
distribution and the income, capital gains and capital
available. The Securities and Exchange Commission (the
SEC) issued an order to the Fund and SunAmerica
granting exemptive relief from section 19(b) of the 1940
Act and
rule 19b-1
thereunder, to permit
10
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
NOTES
TO FINANCIAL STATEMENTS June 30,
2011 (unaudited) (continued)
the Fund to make multiple long-term capital gains distributions
per year under the Distribution Policy. A portion of the
dividend distribution may be treated as ordinary income (derived
from short-term capital gains) and qualifying dividend income
for individuals. If the total distributions made in any calendar
year exceed investment company taxable income and net capital
gains, such excess distributed amounts would be treated as
ordinary dividend income to the extent of the Funds
current and accumulated earnings and profits. Distributions in
excess of the earnings and profits would first be a tax-free
return of capital to the extent of the adjusted tax basis in the
shares. After such adjusted tax basis is reduced to zero, the
distributions would constitute capital gains (assuming the
shares are held as capital assets). A return of capital
represents a return of a shareholders investment in the
Fund and should not be confused with yield,
income or profit. The final
determination of the source of all dividend distributions in
2011 will be made after year-end. The payment of dividend
distributions in accordance with the Distribution Policy may
result in a decrease in the Funds net assets. A decrease
in the Funds net assets may cause an increase in the
Funds annual operating expenses and a decrease in the
Funds market price per share to the extent the market
price correlates closely to the Funds net asset value per
share. The Distribution Policy may also negatively affect the
Funds investment activities to the extent that the Fund is
required to hold larger cash positions than it typically would
hold or to the extent that the Fund must liquidate securities
that it would not have sold, for the purpose of paying the
dividend distribution. The Distribution Policy may, under
certain circumstances, result in the amounts of taxable
distributions to exceed the levels required to be distributed
under the Code (i.e., to the extent the Fund has capital
losses in any taxable year, such losses may be carried forward
to reduce the amount of capital gains required to be distributed
in future years; if distributions in a year exceed the amount
minimally required to be distributed under the tax rules, such
excess will be taxable as ordinary income to the extent loss
carryforwards reduce the required amount of capital gains in
that year). The Funds Board has the right to amend,
suspend or terminate the Distribution Policy at any time. The
amendment, suspension or termination of the Dividend
Distribution Policy could have a negative effect on the
Funds market price per share. Shareholders of shares of
the Fund held in taxable accounts who receive a dividend
distribution (including shareholders who reinvest in shares of
the Fund pursuant to the Funds dividend reinvestment
policy) must adjust the cost basis to the extent that a dividend
distribution contains a nontaxable return of capital. Investors
should consult their tax adviser regarding federal, state and
local tax considerations that may be applicable in their
particular circumstances.
The Fund intends to comply with the requirements of the Code,
applicable to regulated investment companies and distribute all
of its taxable income, including any capital gains, to its
shareholders. Therefore, no federal tax provisions are required.
The Fund files U.S. federal and certain state income tax
returns. With few exceptions, the Fund is no longer subject to
U.S. federal and state examinations by tax authorities for
tax years ending before 2007.
|
|
Note 3.
|
Investment
Advisory and Management Agreement
|
Pursuant to its Investment Advisory and Management Agreement
(Advisory Agreement) with the Fund, SunAmerica
manages the affairs of the Fund, and selects, supervises and
compensates the subadvisers to manage the Funds assets.
SunAmerica monitors the compliance of the subadvisers with the
investment objective and related policies of the Fund, reviews
the performance of the subadvisers, and reports periodically on
such performance to the Directors. Pursuant to the Advisory
Agreement, the Fund will pay SunAmerica a monthly fee at the
annual rate of 1.00% of the average daily total assets of the
Fund.
SunAmerica has engaged Marsico Capital Management, LLC
(Marsico), an independently owned investment
management firm, and Blackrock Investment Management, LLC
(Blackrock), a wholly-owned subsidiary of Blackrock
Inc., as subadvisers to the Fund (the Subadvisers)
to manage the investment and reinvestment of the Funds
assets. Pursuant to the subadvisory agreements
(Subadvisory Agreements) among SunAmerica, the Fund
and Marsico and Blackrock, respectively, Marsico and Blackrock
select the investments made by the Fund. Marsico manages the
large-cap growth portion of the Fund and Blackrock manages the
large-cap value portion of the Fund. Pursuant to the Subadvisory
Agreements, SunAmerica and not the Fund, pays each of the
subadvisers a fee at the annual rate of 0.40% of the Funds
average daily total assets allocated to each subadviser.
SunAmerica serves as administrator to the Fund. Under the
Administrative Services Agreement, SunAmerica is responsible for
performing or supervising the performance by others of
administrative services in connection with the
11
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
NOTES
TO FINANCIAL STATEMENTS June 30,
2011 (unaudited) (continued)
operations of the Fund, subject to the supervision of the
Funds Board. SunAmerica will provide the Fund with
administrative services, regulatory reporting, all necessary
office space, equipment, personnel and facilities for handling
the affairs of the Fund. SunAmericas administrative
services include recordkeeping, supervising the activities of
the Funds custodian and transfer agent, providing
assistance in connection with the Directors and
shareholders meetings and other administrative services
necessary to conduct the Funds affairs. For its services
as administrator, SunAmerica is paid a monthly fee at the annual
rate of 0.04% of the Funds average daily total assets.
On September 22, 2008, American International Group, Inc.
(AIG), the ultimate parent of SunAmerica, entered
into a revolving credit facility (FRBNY Credit
Facility) with the Federal Reserve Bank of New York
(NY Fed). In connection with the FRBNY Credit
Facility, on March 4, 2009, AIG issued its Series C
Perpetual, Convertible, Participating Preferred Stock (the
Series C Preferred Stock) to the AIG Credit
Facility Trust, a trust established for the sole benefit of the
United States Treasury (the Trust). The
Series C Preferred Stock was entitled to approximately
77.8% of the voting power of AIGs outstanding stock.
On January 14, 2011, AIG completed a series of previously
announced integrated transactions (the
Recapitalization) to recapitalize AIG. In the
Recapitalization, AIG repaid the NY Fed approximately
$21 billion in cash, representing all amounts owing under
the FRBNY Credit Facility and the facility was terminated. Also
as part of the Recapitalization, (i) the Series C
Preferred Stock was exchanged for shares of AIG Common Stock,
which was then transferred to the U.S. Department of the
Treasury, and the Trust, which had previously held all shares of
the Series C Preferred Stock, was terminated, and,
(ii) AIGs Series E Preferred Shares and
Series F Preferred Shares were exchanged for shares of AIG
Common Stock and a new Series G Preferred Shares (which
functions as a $2 billion commitment to provide funding
that AIG will have the discretion and option to use). As a
result of the Recapitalization, the United States Treasury held
a majority of outstanding shares of AIG Common Stock.
|
|
Note 4.
|
Purchase and
Sales of Investment Securities
|
The cost of purchases and proceeds from sales and maturities of
long-term investments during the six months ended June 30,
2011 were as follows:
|
|
|
|
|
Purchases (excluding U.S. government securities)
|
|
$
|
85,942,854
|
|
Sales and maturities (excluding U.S. government securities)
|
|
|
97,479,416
|
|
Purchases of U.S. government securities
|
|
|
|
|
Sales and maturities of U.S. government securities
|
|
|
|
|
|
|
Note 5.
|
Transactions
with Affiliates
|
For the six months ended June 30, 2011, the Fund incurred
no brokerage commissions with an affiliated broker.
|
|
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 may differ from the amounts reflected
in the Statement of Assets and Liabilities due to temporary
book/tax differences such as wash sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31,
2010
|
|
Distributable Earnings
|
|
|
Tax Distributions
|
|
|
|
|
Long-Term
|
|
|
Unrealized
|
|
|
|
|
|
|
|
|
|
|
Ordinary
|
|
|
Gains/Capital
|
|
|
Appreciation
|
|
|
Ordinary
|
|
|
Long-Term
|
|
|
Return of
|
|
Income
|
|
|
and Other Losses
|
|
|
(Depreciation)
|
|
|
Income*
|
|
|
Capital Gains
|
|
|
Capital
|
|
|
$
|
|
|
|
$
|
(16,287,521
|
)
|
|
$
|
29,270,228
|
|
|
$
|
1,810,357
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
*
|
The total distributions for the
calendar year exceeded investment company taxable income and net
capital gains and resulted in an excess distributed amount to be
treated as ordinary dividend income to the extent of the
Funds current and accumulated earnings and profits (See
Note 2).
|
12
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
NOTES
TO FINANCIAL STATEMENTS June 30,
2011 (unaudited) (continued)
Capital Loss Carryforwards. At December 31,
2010, capital loss carryforwards available to offset future
recognized gains are $16,287,521 expiring in 2017.
The amounts of aggregate unrealized gain (loss) and the
cost of investment securities for federal tax purposes,
including short-term securities were as follows:
|
|
|
|
|
Cost (tax basis)
|
|
$
|
120,158,404
|
|
|
|
|
|
|
Appreciation
|
|
|
26,224,570
|
|
Depreciation
|
|
|
(2,245,329
|
)
|
|
|
|
|
|
Net unrealized appreciation (depreciation)
|
|
$
|
23,979,241
|
|
|
|
|
|
|
|
|
Note 7.
|
Capital Share
Transactions
|
The authorized capital stock of the Fund is 200,000,000 shares
of common stock, $0.001 par value.
On September 13, 2010, the Fund announced its intention to
conduct an in-kind tender offer to acquire up to 25% of the
Funds outstanding shares at a price equal to 98.5% of the
Funds net asset value (NAV) per share in exchange for a
pro rata distribution of the Funds portfolio securities
(subject to certain exceptions, including paying cash in lieu of
fractional shares and paying cash in lieu of delivering any
odd lot of portfolio securities (i.e., fewer than
100 shares) to a participating shareholder). The in-kind
tender offer commenced on October 7, 2010 and expired at
5:00 p.m. Eastern time on November 18, 2010.
In accordance with the terms of the in-kind tender offer, the
Fund accepted 2,413,809 properly tendered shares, representing
25% of the Funds outstanding shares of common stock, at a
price per share of $16.64, which is equal to 98.5% of the
Funds net asset value per share as of the close of regular
trading on the New York Stock Exchange on November 19,
2010. The total value of the assets of the Fund distributed in
payment for such properly tendered shares accepted was
$40,165,782. Because the number of shares tendered exceeded 25%
of the Funds outstanding shares of common stock, the Fund
purchased tendered shares on a pro rata basis. Accordingly, on a
pro rata basis, approximately 33.3% of the shares properly
tendered by each participating shareholder were accepted for
payment. As a result of the
in-kind
tender offer, the Fund recorded net realized gains of $6,723,429
for financial statement purposes.
As of June 30, 2011 there were 7,241,427 shares issued
and outstanding.
On July 27, 2011 the Fund announced that the Board had
formally approved a proposal to reorganize the Fund into a new
open-end fund (the Acquiring Fund), subject to
approval by shareholders (the Reorganization). It is
anticipated that the Acquiring Fund will be managed by
SunAmerica and subadvised by Marsico and BlackRock. Pursuant to
the proposed Reorganization, all of the Funds assets and
liabilities will be transferred to the Acquiring Fund in
exchange for shares of the Acquiring Fund. If the Funds
shareholders approve the proposal, they will receive shares of
the Acquiring Fund with a value equal to the net asset value
(NAV) of their shares of the Funds common
stock on the closing date of the Reorganization, after which the
Fund will cease operations.
On or about December 19, 2011, the Fund expects to convene
a special meeting of the Funds shareholders. Shareholders
of record of the Fund on October 11, 2011 will be
entitled to notice of and to vote at the special meeting, and
will receive proxy materials describing the Reorganization in
greater detail. If approved by shareholders, the Reorganization
is expected to close in January 2012.
As a result of the Board of Directors approval of the
Reorganization of the Fund into an open-end fund, the Board
further determined to terminate the previously announced
conditional tender offers. These conditional tender offers were
scheduled to be made in 2011 and 2012, subject to the
condition that the Funds shares trade at a volume-weighted
average discount to NAV of more than 10% over a 12-week
measurement period commencing in the third quarter of
2011 and 2012, respectively.
13
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
APPROVAL
OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND
SUBADVISORY AGREEMENTS June 30,
2011 (unaudited)
The Board of the Fund, including the Directors who are not
interested persons, as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the 1940 Act), of the Fund, SunAmerica,
BlackRock or Marsico (the Disinterested Directors),
approved the continuation of the Advisory Agreement between the
Fund and SunAmerica for a one-year period ending June 30,
2012 at an in-person meeting held on June 14, 2011
(the Meeting). At the Meeting, the Board also
approved the continuation of the Subadvisory Agreements between
the Fund, SunAmerica and BlackRock and between the Fund,
SunAmerica and Marsico for a one-year period ending
June 30, 2012.
In accordance with Section 15(c) of the 1940 Act, the Board
requested and SunAmerica and BlackRock and Marsico, where
applicable, provided materials relating to the Boards
consideration of whether to approve the continuation of the
Advisory Agreement and Subadvisory Agreements. These materials
included (a) a summary of the services provided to the Fund
by SunAmerica and its affiliates, and by the Subadvisers;
(b) information independently compiled and prepared by
Lipper, Inc. (Lipper) on fees and expenses of the
Fund, and the investment performance of the Fund as compared
with a peer group of funds; (c) information on the
profitability of SunAmerica, and its affiliates, and a
discussion relating to indirect benefits; (d) a report on
economies of scale; (e) information on SunAmericas
and the Subadvisers risk management process; (f) a
discussion on general compliance policies and procedures;
(g) a summary of 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 Fund, as well as
current and projected staffing levels and compensation practices.
Nature, Extent and Quality of Services Provided by SunAmerica
and the Subadvisers. The Board, including the Disinterested
Directors, considered the nature, extent and quality of services
to be provided by SunAmerica and the Subadvisers. The Board
noted that the services include acting as investment manager and
adviser to the Fund, managing the affairs of the Fund, and
obtaining and evaluating economic, statistical and financial
information to formulate and implement the Funds
investment policies, or for providing oversight with respect to
the daily management of the portion of the Funds portfolio
managed by the Subadvisers. Additionally, the Board observed
that SunAmerica provides office space, bookkeeping, accounting,
clerical, secretarial and certain administrative services
(exclusive of, and in addition to, any such service provided by
any other party retained by the Fund) and has authorized its
officers and employees, if elected, to serve as officers or
trustees of the Fund without compensation. Finally, the Board
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, the Board
considered the quality of the administrative and non-investment
advisory services provided to the Fund pursuant to the Advisory
Agreement. The Board further observed that SunAmerica performs
or supervises the performance by others of other administrative
services in connection with the operation of the Fund pursuant
to the Administrative Services Agreement between SunAmerica and
the Fund (the Administrative Services Agreement).
In connection with the services provided by SunAmerica, the
Board analyzed the structure and duties of SunAmericas
fund administration, accounting, operations, legal and
compliance departments and concluded that they were adequate to
meet the needs of the Fund. The Board also reviewed the
personnel responsible for providing advisory services to the
Fund and other key personnel of SunAmerica, in addition to
current and projected staffing levels and compensation
practices. The Board concluded, based on their experience and
interaction with SunAmerica, that: (i) SunAmerica is able
to retain quality portfolio managers, analysts and other
personnel; (ii) SunAmerica exhibited a high level of
diligence and attention to detail in carrying out its advisory
and other responsibilities under the Advisory Agreement;
(iii) SunAmerica had been responsive to requests of the
Board; and (iv) SunAmerica had kept the Board apprised of
developments relating to the Fund and the industry in general.
The Board concluded that the nature and extent of services
provided under the Advisory Agreement were reasonable and
appropriate in relation to the management fee and that the
quality of services continues to be high.
The Board also considered SunAmericas reputation and
relationship with the Fund 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 SunAmericas
experience in providing management and investment advisory and
administrative services to advisory clients and noted that as of
March 31, 2011, SunAmerica managed, advised
and/or
administered approximately $45.3 billion in assets. The
Board also considered SunAmericas code of ethics and its
risk management process, and that it has developed internal
procedures, adopted by the Board, for monitoring compliance with
the investment
14
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
APPROVAL
OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND
SUBADVISORY AGREEMENTS June 30,
2011 (unaudited) (continued)
objectives, policies and restrictions of the Fund. Additionally,
the Board considered SunAmericas compliance and regulatory
history.
The Board also considered the nature, quality and extent of
services to be provided by the Subadvisers. The Board observed
that the Subadvisers are responsible for providing investment
management services, including investment research, advice and
supervision, and determining which securities will be purchased
or sold by the portion of the Funds assets they are
allocated to manage. The Board reviewed each Subadvisers
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 Fund in
addition to current and projected staffing levels and
compensation practices and concluded, based on its experience
with each Subadviser, that: (i) each Subadviser is able to
retain high quality portfolio managers and other investment
personnel; (ii) each Subadviser exhibited a high level of
diligence and attention to detail in carrying out its
responsibilities under the Subadvisory Agreements; and
(iii) each Subadviser had been responsive to requests of
the Board and of SunAmerica. The Board considered that each
Subadviser has developed internal policies and procedures for
monitoring compliance with the investment objectives, policies
and restrictions of the Fund. The Board also considered each
Subadvisers code of ethics, compliance and regulatory
history and risk management process. The Board noted that the
Subadvisers have not experienced any material regulatory or
compliance problems nor have they been involved in any material
litigation or administrative proceedings that would potentially
impact them from effectively serving as subadviser to the Fund.
The Board concluded that the nature and extent of services to be
provided by the Subadvisers under the Subadvisory Agreements
were reasonable and appropriate in relation to the subadvisory
fee and that the quality of services continues to be high.
Investment Performance. The Board, including the
Disinterested Directors, also considered the investment
performance of SunAmerica and the Subadvisers with respect to
the Fund. In connection with its review, the Board received and
reviewed information regarding the investment performance of the
Fund as compared to the Funds peer group (Peer
Group) and peer universe (Peer Universe) as
independently determined by Lipper and to an appropriate index
or combination of indices. The Board was provided with a
description of the methodology used by Lipper to select the
funds in the Peer Groups and Peer Universes. The Board also
noted that it regularly reviews the performance of the Fund
throughout the year. The Board noted that, while it monitors
performance of the Fund closely, it generally attaches more
importance to performance over relatively long periods of time,
typically three to five years.
It was noted that performance information was for the periods
ended March 31, 2011. The Board also noted that it
regularly reviews the performance of the Fund throughout the
year.
The Board considered that the Funds performance was above
the median of its Performance Group/Universe for the one-,
three- and five- year periods. The Board noted that the Fund was
the highest-ranked fund in its Peer Group and second
highest-ranked fund in its Peer Universe for all periods ended
March 31, 2011. The Board concluded that the Funds
performance was satisfactory.
Consideration of the Management Fee and Subadvisory Fees and
the Cost of the Services and Profits to be Realized by
SunAmerica, the Subadvisers and their Affiliates from the
Relationship with the Fund. The Board, including the
Disinterested Directors, received and reviewed information
regarding the fees to be paid by the Fund to SunAmerica pursuant
to the Advisory Agreement 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 Fund.
To assist in analyzing the reasonableness of the management fee
for the Fund, the Board received reports independently prepared
by Lipper. The reports showed comparative fee information for
the Funds Peer Group
and/or Peer
Universe as determined by Lipper, including rankings within each
category. In considering the reasonableness of the management
fee to be paid by the 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 the Funds total operating
expenses, the Board compared the Funds net expense ratio
to those of other funds within its Peer Group and Peer Universe
as a guide to
15
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
APPROVAL
OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND
SUBADVISORY AGREEMENTS June 30,
2011 (unaudited) (continued)
help assess the reasonableness of the management fee for the
Fund. The Board acknowledged that it was difficult to make
precise comparisons with other funds in the Peer Group and Peer
Universe 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 Lipper
as a whole was useful in assessing whether SunAmerica was
providing services at a cost that was competitive with other,
similar funds. The Board did not consider services and fees paid
under investment advisory contracts that SunAmerica has with
other registered investment companies or other types of clients
with similar investment strategies to the Fund since SunAmerica
informed the Board that there were no such funds or accounts.
The Board considered that the Funds actual management fees
were slightly above the median of its Peer Group and Peer
Universe. The Board also considered that the Funds total
expenses were slightly above the median of its Peer Group and
slightly below the median of its Peer Universe. The Board took
into account managements discussions regarding the
Funds expenses.
The Board also received and reviewed information regarding the
fees paid by SunAmerica to each Subadviser pursuant to the
Subadvisory Agreements. To assist in analyzing the
reasonableness of the subadvisory fees, the Board received a
report prepared independently by Lipper. The report showed
comparative fee information of the Funds Peer Group that
the Directors used as a guide to help assess the reasonableness
of the subadvisory fees. The Directors noted that Peer Group
information as a whole was useful in assessing whether each
Subadviser was providing services at a cost that was competitive
with other similar funds. The Directors also considered that the
subadvisory fees are paid by SunAmerica out of its management
fee and not by the Fund, 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 out by SunAmerica and the amount
of the management fee which it retained.
The Board also considered fees received by the Subadvisers with
respect to other mutual funds and accounts with the similar
investment strategies to the Fund for which it serves as adviser
or subadviser, as applicable; however, the Board observed that
certain of the similarly managed funds or accounts identified by
Marsico were managed by Marsico in its capacity as investment
adviser and not as a subadviser. The Board then noted that the
subadvisory fees paid by SunAmerica to each Subadviser were
reasonable as compared to fees the Subadvisers receive for other
comparable mutual funds and accounts for which they serve as
adviser or subadviser.
The Board also considered SunAmericas profitability and
the benefits SunAmerica and its affiliates received from their
relationship with the Fund. The Board received and reviewed
financial statements relating to SunAmericas financial
condition and profitability with respect to the services it
provided the Fund and considered how profit margins could affect
SunAmericas 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 Fund on a Fund by Fund
basis.
The Board considered the profitability of SunAmerica under the
Advisory Agreement, and considered the profitability of
SunAmerica under the Administrative Services Agreement. The
Board further considered whether SunAmerica, the Subadvisers and
their affiliates received any indirect benefits or whether there
were any collateral or fall-out benefits that
SunAmerica and its affiliates may derive as a result of their
relationship with the Fund. 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 from the
Subadvisers and considered whether each Subadviser had the
financial resources necessary to attract and retain high quality
investment management personnel and to continue to provide the
high quality of services that it had provided to the Fund to
date.
The Board concluded that SunAmerica and the Subadvisers had the
financial resources necessary to perform their obligations under
the Advisory Agreement and Subadvisory Agreements and to
continue to provide the Fund 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.
16
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
APPROVAL
OF THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND
SUBADVISORY AGREEMENTS June 30,
2011 (unaudited) (continued)
Economies of Scale. The Board, including the
Disinterested Directors, considered whether the shareholders
would benefit from economies of scale and whether there was
potential for future realization of economies with respect to
the Fund. The Board considered that as a result of being part of
the SunAmerica fund complex, the Fund shares common resources
and may share certain expenses, and if the size of the complex
increases, the Fund could incur lower expenses than it otherwise
would achieve as a stand-alone entity. The Board also considered
the anticipated efficiencies in the processes of SunAmerica as
it adds labor and capital to expand the scale of operations. The
Board also noted that since the Fund was a closed-end fund, any
asset growth would generally be by virtue of an increase in net
asset value and not new subscriptions. 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 Agreement, including whether the implementation
of breakpoints would be appropriate in the future due to an
increase in asset size or otherwise.
The Board did not review specific information regarding whether
there have been economies of scale with respect to the
Subadvisers management of the Fund 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 Agreement.
Other Factors. In consideration of the Advisory Agreement
and Subadvisory Agreement, the Board also received information
regarding SunAmericas and the Subadvisers brokerage
and soft dollar practices. The Board considered that the
Subadvisers are responsible for decisions to buy and sell
securities for the portfolios they manage, 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 included information on brokerage
commissions and execution throughout the year and that
commissions paid had generally been reasonable and the quality
of brokerage execution had generally been high. 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 Advisory Agreement and the Subadvisory
Agreements, each for a one-year period ending June 30,
2012. Based upon their evaluation of all these factors in their
totality, the Board, including the Disinterested Directors, was
satisfied that the terms of the Advisory Agreement and
Subadvisory Agreements were fair and reasonable and in the best
interests of the Fund and the Funds shareholders. In
arriving at a decision to approve the Advisory Agreement and
Subadvisory Agreements, the Board did not identify any single
factor or group of factors as all-important or controlling, but
considered all factors together. The Disinterested Directors
were also assisted by the advice of independent counsel in
making this determination.
17
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
DIVIDEND
REINVESTMENT AND CASH PURCHASE
PLAN June 30,
2011 (unaudited)
The Fund has adopted a Dividend Reinvestment and Cash Purchase
Plan (the Plan), through which all net investment
income dividends and capital gains distributions are paid to
Common Stock Shareholders in the form of additional shares of
the Funds Common Stock (plus cash in lieu of any
fractional shares which otherwise would have been issuable),
unless a Common Stock Shareholder elects to receive cash as
provided below. In this way, a Common Stock Shareholder can
maintain an undiluted investment in the Fund and still allow the
Fund to pay out the required distributable income.
No action is required on the part of a registered Common Stock
Shareholder to receive a distribution in shares of Common Stock
of the Fund. A registered Common Stock Shareholder may elect to
receive an entire distribution in cash by notifying
Computershare Trust Company, N.A. (Computershare),
the Plan Agent and the Funds transfer agent and registrar,
in writing at P.O. Box 43078, Providence, RI 02940-3078, by
telephone at
1-800-426-5523
or through the Internet at www.computershare.com/investor so
that such notice is received by Computershare before the record
date for distributions to Common Stock Shareholders.
Computershare will set up an account for shares acquired through
the Plan for each Common Stock Shareholder who has not elected
to receive distributions in cash (Participant) and
hold such shares in non-certificated form.
Those Common Stock Shareholders whose shares are held by a
broker or other financial intermediary may receive distributions
in cash by notifying their broker or other financial
intermediary.
Computershare will set up an account for shares acquired
pursuant to the Plan for Participants who have not so elected to
receive dividends and distributions in cash. The shares of
Common Stock will be acquired by the Plan Agent for the
Participants accounts, depending upon the circumstances
described below, either (i) through receipt of additional
unissued but authorized shares of Common Stock from the Fund
(Additional Common Stock) or (ii) by purchase
of outstanding shares of Common Stock on the open market on the
NYSE or elsewhere. If on the payment date for a dividend or
distribution, the net asset value per share of Common Stock is
equal to or less than the market price per share of Common Stock
plus estimated per share fees (which include any brokerage
commissions Computershare is required to pay), Computershare
shall receive Additional Common Stock, including fractions, from
the Fund for each Participants account. The number of
shares of Additional Common Stock to be credited shall be
determined by dividing the dollar amount of the dividend or
distribution by the greater of (i) the net asset value per
share of Common Stock on the payment date, or (ii) 95% of
the market price per share of the Common Stock on the payment
date. If the net asset value per share of Common Stock exceeds
the market price plus estimated per share fees on the payment
date for a dividend or distribution, Computershare (or a
broker-dealer selected by Computershare) shall endeavor to apply
the amount of such dividend or distribution on each
Participants shares of Common Stock to purchase shares of
Common Stock on the open market. Such purchases will be made on
or shortly after the payment date for such dividend or
distribution but in no event will purchases be made on or after
the ex-dividend date for the next dividend or distribution. The
weighted average price (including per share fees) of all shares
of Common Stock purchased by Computershare shall be the price
per share of Common Stock allocable to each Participant. If,
before Computershare has completed its purchases, the market
price plus estimated brokerage commissions exceeds the net asset
value of the shares of Common Stock as of the payment date, the
purchase price paid by Computershare may exceed the net asset
value of the Common Stock, resulting in the acquisition of fewer
shares of Common Stock than if such dividend or distribution had
been paid in shares of Common Stock issued by the Fund.
Participants should note that they will not be able to instruct
Computershare to purchase shares of Common Stock at a specific
time or at a specific price.
There is no charge to Common Stock Shareholders for receiving
their distributions in the form of additional shares of the
Funds Common Stock. Computershares fees for handling
distributions in stock are paid by the Fund. There are no
brokerage charges with respect to shares issued directly by the
Fund as a result of distributions payable in stock. For shares
purchased in the open market Participants will be charged a per
share fee of $0.03. If a Participant elects by written,
telephone or Internet notice to Computershare to have
Computershare sell part or all of the shares held by
Computershare in the Participants account and remit the
proceeds to the Participant, Computershare is authorized to
deduct a $2.50 transaction fee plus a $0.15 per share fee from
the proceeds. All per share fees include any brokerage
commissions Computershare is required to pay.
Common Stock Shareholders who receive distributions in the form
of stock are subject to the same Federal, state and local tax
consequences as are Common Stock Shareholders who elect to
receive their distributions in cash. A Common Stock
Shareholders basis for determining gain or loss upon the
sale of stock received in a distribution from the Fund will be
equal to the total dollar amount of the distribution paid to the
Common Stock Shareholder in the form of additional shares.
18
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
RESULTS
OF ANNUAL SHAREHOLDER MEETING June 30,
2011 (unaudited)
The Annual Meeting of the Shareholders of the Fund was held on
May 19, 2011. At this meeting, Richard W. Grant, Stephen J.
Gutman and Peter A. Harbeck were elected by shareholders to
serve as the Class III Directors of the Fund for three-year
terms, which expire at the annual meeting of shareholders to be
held in 2014 and until their respective successors are duly
elected and qualify.
The voting results of the meeting to elect Messrs. Grant,
Gutman and Harbeck to the Board were as follows:
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For
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Withheld
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Richard W. Grant
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4,764,354
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2,311,016
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Stephen J. Gutman
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4,762,778
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2,312,592
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Peter A. Harbeck
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4,763,754
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2,311,616
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|
The terms of office of Dr. Judith L. Craven and William J.
Shea (Class II, term expiring 2013), and William F. Devin
(Class I, term expiring 2012) continued after the
meeting.
19
SunAmerica
Focused Alpha Large-Cap Fund, Inc.
ADDITIONAL
INFORMATION (unaudited)
During the period, there were no material changes to the
Funds investment objective or policies or to the
Funds articles of incorporation or by-laws that were not
approved by the shareholders or in the principal risk factors
associated with investment in the Fund. There have been no
changes in the persons who are primarily responsible for the
day-to-day
management of the Funds assets.
20
Harborside
Financial Center
3200 Plaza 5
Jersey City, NJ 07311-4992
Directors
Richard
W. Grant
Peter
A. Harbeck
Dr.
Judith L. Craven
William
F. Devin
Stephen
J. Gutman
William
J. Shea
Officers
John T.
Genoy, President and
Chief Executive Officer
Donna
M. Handel, Treasurer
James
Nichols, Vice President
Katherine
Stoner, Chief Compliance
Officer
Gregory
N. Bressler, Chief Legal Officer and
Secretary
Gregory
R. Kingston, Vice President and Assistant Treasurer
Nori
L. Gabert, Vice President and Assistant Secretary
Kathleen
Fuentes, Assistant Secretary
John
E. McLean, Assistant Secretary
John
E. Smith Jr., Assistant Treasurer
Investment Adviser
SunAmerica
Asset Management Corp.
Harborside
Financial Center
3200
Plaza 5
Jersey
City, NJ 07311-4992
Custodian
State
Street Bank and Trust Company
P.O.
Box 5607
Boston,
MA 02110
Transfer Agent
Computershare
Trust Company, N.A.
P.O.
Box 43078
Providence,
RI 02940-3078
VOTING
PROXIES ON FUND PORTFOLIO SECURITIES
A
description of the policies and procedures that the Fund uses to
determine how to vote proxies related to securities held in the
Funds portfolio, which is available in the Funds
Form N-CSR, may be obtained without charge upon request, by
calling
(800) 858-8850.
This information is also available from the EDGAR database on
the U.S. Securities and Exchange Commissions website
at http://www.sec.gov.
DISCLOSURE OF QUARTERLY
PORTFOLIO HOLDINGS
The
Fund is required to file its complete schedule of portfolio
holdings with the U.S. Securities and Exchange Commission for
its first and third fiscal quarters on Form N-Q. The
Funds
Forms N-Q
are available on the U.S. Securities and Exchange
Commissions website at
http://www.sec.gov. You can also review and obtain copies of
Form N-Q
at the U.S. Securities and Exchange Commissions
Public Reference Room in Washington, DC (information on the
operation of the Public Reference Room may be obtained by
calling
1-800-SEC-0330).
PROXY
VOTING RECORD ON FUND PORTFOLIO SECURITIES
Information
regarding how the Fund voted proxies related to securities held
in the Funds portfolio during the most recent twelve month
period ended June 30, is available, once filed with the
U.S. Securities and Exchange Commission without charge, upon
request, by calling (800) 858-8850 or on the U.S.
Securities and Exchange Commissions website at
http://www.sec.gov.
This
report is submitted solely for the general information of
shareholders of the Fund.
The
accompanying report has not been audited by independent
accountants and accordingly no opinion has been expressed
thereon.
21
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Item 2.
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Code of Ethics. |
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Not applicable. |
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Item 3.
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Audit Committee Financial Expert. |
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Not applicable. |
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Item 4.
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Principal Accountant Fees and Services. |
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Not applicable. |
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Item 5.
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Audit Committee of Listed Registrants. |
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Not applicable. |
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Item 6.
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Investments. |
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Included in Item 1 to the Form. |
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Item 7.
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Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. |
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Not applicable. |
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Item 8.
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Portfolio Managers of Closed-End Management Investment Companies. |
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Not applicable. |
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Item 9.
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Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. |
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None. |
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Item 10.
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Submission of Matters to a Vote of Security Holders. |
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There were no material changes to the procedures by which shareholders
may recommend nominees to the registrants Board of Directors 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 22(b)(15)) of Schedule 14A (17 CFR
240.14a-101), or this Item 10. |
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Item 11.
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Controls and Procedures. |
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(a)
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An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrants management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrants
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 registrants management, including the
President and Treasurer, concluded that the registrants disclosure
controls and procedures are effective. |
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(b)
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There was no change in the registrants 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
registrants last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting. |
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Item 12.
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Exhibits. |
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(a)
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(1) Not applicable. |
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(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. |
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(3) Not applicable. |
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(b)
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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. |
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(c)
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A copy of the registrants
notices to shareholders pursuant to Section 19 of the Investment
Company Act of 1940 and Rule 19a-1 thereunder that accompanied
distributions paid on March 30, 2011 and July 6, 2011 are attached
hereto, as required by the terms of the registrants exemptive
order granted on February 3, 2009. |
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.
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SunAmerica Focused Alpha Large-Cap Fund, Inc.
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By: |
/s/ John T. Genoy
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John T. Genoy |
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President |
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Date:
September 7, 2011
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.
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By: |
/s/ John T. Genoy
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John T. Genoy |
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President |
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Date:
September 7, 2011
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By: |
/s/ Donna M. Handel
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Donna M. Handel |
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Treasurer |
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Date:
September 7, 2011