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Sunamerica Income Funds – ‘N-CSR’ for 3/31/21

On:  Tuesday, 6/8/21, at 1:49pm ET   ·   Effective:  6/8/21   ·   For:  3/31/21   ·   Accession #:  1193125-21-185224   ·   File #:  811-04708

Previous ‘N-CSR’:  ‘N-CSR’ on 6/8/20 for 3/31/20   ·   Latest ‘N-CSR’:  This Filing   ·   2 References:   By:  Touchstone Strategic Trust – ‘497’ on 9/9/22 By:  Touchstone Strategic Trust – ‘485BPOS’ on 7/28/21 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 6/08/21  Sunamerica Income Funds           N-CSR       3/31/21    4:4.9M                                   Donnelley … Solutions/FA
          → AIG Flexible Credit Fund ⇒ Class A (SHNAX) — Class C (SHNCX) — Class W (SHNWX)
          → AIG Strategic Bond Fund ⇒ Class A (SDIAX) — Class B (SDIBX) — Class C (NAICX) — Class W (SDIWX)
          → AIG U.S. Government Securities Fund ⇒ Class A (SGTAX) — Class C (NASBX)

Document/Exhibit                   Description                      Pages   Size 

 1: N-CSR       Sunamerica Income Funds N-CSR                       HTML   3.22M 
 2: EX-99.406   Code of Ethics                                      HTML     34K 
 4: EX-99.906 CERT  Certifications Pursuant to Section 906 of the   HTML      6K 
                Sarbanes-Oxley Act                                               
 3: EX-99.CERT  Certification Pursuant to Section 302 of the        HTML     12K 
                Sarbanes-Oxley Act                                               

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-04708

SunAmerica Income Funds

(Exact name of registrant as specified in charter)

Harborside 5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311

(Address of principal executive offices) (Zip code)

John T. Genoy

Senior Vice President

SunAmerica Asset Management, LLC

Harborside 5,

185 Hudson Street, Suite 3300,

Jersey City, NJ 07311

(Name and address of agent for service)

Registrant’s telephone number, including area code: (201) 324-6414

Date of fiscal year end: March 31

Date of reporting period: March 31, 2021

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Item 1. Reports to Stockholders

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ANNUAL REPORT 2021

SUNAMERICA

Income Funds

aig.com/funds

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Shareholder Letter — (unaudited)

Dear Shareholders,

All of us at AIG and SunAmerica Asset Management, along with our Fund subadvisers, hope this annual report finds you and yours safe and well during these persistently challenging times.

As the COVID-19 pandemic continues to evolve, know that we remain focused on serving our Fund shareholders. As such, we are pleased to present this annual update for the SunAmerica Income Funds (the “Income Funds”) for the 12-month period ended March 31, 2021. From a broad perspective, it was a period wherein fixed income market performance was primarily driven by economic growth expectations, monetary and fiscal stimulus measures, and geopolitical events, including efforts to stem the COVID-19 pandemic. For the annual period overall, the Bloomberg Barclays U.S. Aggregate Bond Index^*, a broad measure of the U.S. fixed income market, returned 0.71%.

In the second quarter of 2020, when the annual period began, global fixed income sectors generated positive returns. Political tensions were a focal point, with U.S.-China disputes reigniting, a wave of racial justice protests engulfing the U.S., and Brexit^** uncertainty increasing. Global government bond yields were largely range-bound near record lows across most developed markets, supported by extremely accommodative central bank purchase programs and amplified policy responses to the pandemic and its impact on the economy and the financial markets. For example, the U.S. Federal Reserve (the “Fed”) announced a trillion-dollar lending program, which included high yield bonds. The European Central Bank (“ECB”) announced more generous terms for its targeted longer-term refinancing operations. The Bank of England (“BOE”) announced an extension of the U.K. government’s overdraft facility and increased its bond purchases. All that said, global government bond yield curves, or maturity spectrums, steepened^‡, as short-term yields declined in the U.S. and the U.K. In fact, U.K. government bond yields dipped into negative territory after the BOE indicated negative rates could form part of a range of actions it might take should downside risks materialize. Most non-government bond sectors outperformed U.S. Treasuries and other sovereign bonds during the second calendar quarter. Fixed income credit sectors — both investment grade and high yield — performed especially strongly, as countries began to gradually emerge from lockdowns, vaccine developments progressed and asset purchases by the Fed commenced through its credit facilities. Emerging markets debt was also a particularly strong sector during the quarter, as emerging market central banks rapidly cut policy rates, with some banks also initiating unconventional policies, including forms of quantitative easing.

Global government bond yields ended the third quarter of 2020 mixed. Yield curves steepened, led by increases in yields on longer-term maturities in the U.S., Canada and the U.K., while most other government bond yields generally drifted lower. (Remember, there is an inverse relationship between bond prices and yield movements, so that bond prices rise when yields decrease and vice versa.) The Fed extended its emergency liquidity provisions through the end of 2020 and unveiled a new inflation policy framework that will allow inflation to modestly exceed 2% without a hawkish^†† policy response. This low-for-longer and inflation tolerance policy stance by the Fed prompted the sell-off in longer-dated securities, while strong demand for U.S. Treasuries as a “safe haven” kept short-to intermediate-term yields low. The U.K.’s yield curve steepened, reflecting the backdrop of Brexit risks, disappointing economic data and rapidly rising estimates of British government borrowing needs. In contrast, Australian and Italian yields were among the major decliners. Among non-government bond sectors, performance was mixed. Credit sectors performed well, supported by expansionary fiscal policies, purchase programs by the Fed and the ECB, and strong demand, even as corporate issuance set records for the calendar year. Emerging markets debt also posted relatively strong returns. Some securitized sectors, including mortgage-backed securities, were comparatively weaker.

Global government bond yields ended the fourth quarter of 2020 mixed. Yield curves in the dollar-bloc economies, including the U.S., Australia, Canada and New Zealand, steepened, while yields in the U.K. and Germany drifted lower. Global central banks maintained highly accommodative policy stances, with the Fed providing assurance it would continue to acquire assets for the foreseeable future, and the ECB extending its Pandemic Emergency Purchase Programme through at least March 2022. Credit spreads remained mostly

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range-bound in October but then rallied sharply in November and December, as positive news flow on COVID-19 vaccine development and distribution, a positive supply/demand backdrop and the passage of additional U.S. fiscal stimulus provided confidence around a stronger economic recovery in 2021.

In the first quarter of 2021, government bond yields moved sharply higher. U.S. Treasuries registered their worst quarterly return since 1980, driven by vaccine rollout progress, unprecedented fiscal stimulus and the Fed’s commitment to not preemptively hike rates in response to any transitory rise in inflation during the economic rebound. In turn, the U.S. Treasury yield curve steepened rapidly, which spilled over to other major markets, including the dollar-bloc economies. Chinese sovereign bonds represented the lone market among the 20 largest global debt markets to see yields decrease during the quarter. Most non-government bond sectors continued to outperform government bonds, with vaccine distribution gathering pace across developed markets and major central banks committing to maintain accommodative policies.

For the annual period overall, the U.S. Treasury yield curve steepened, as yields on shorter-term maturities fell and yields on intermediate- and longer-term maturities rose. The yield on the bellwether 10-year U.S. Treasury rose approximately 104 basis points^† to end the annual period at 1.74%. Amongst non-U.S. Treasury sectors, high yield corporate bonds and sovereign emerging markets debt outperformed U.S. Treasuries most for the annual period as a whole, followed by investment grade corporate bonds. To a lesser extent, commercial mortgage-backed securities, asset-backed securities, mortgage-backed securities and agency securities also outpaced U.S. Treasuries.

On the following pages, you will find financial statements and portfolio information for each of the Income Funds during the annual period ended March 31, 2021.

We thank you for being a part of AIG Funds. We value your ongoing confidence in us and look forward to serving your investment needs in the future. As always, if you have any questions regarding your investments, please contact your financial professional or get in touch with us directly at 800-858-8850 or at our website, www.aig.com/funds.

Sincerely,

The SunAmerica Income Funds Investment Professionals

Past performance is no guarantee of future results.

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SunAmerica Income Funds

EXPENSE EXAMPLE — March 31, 2021 — (unaudited)

Disclosure of Portfolio Expenses in Shareholder Reports

As a shareholder of a fund (each, a “Fund” and collectively the “Funds”) in the SunAmerica Income Funds (the “Trust”), you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges and (2) ongoing costs, including management fees, distribution and service fees and other Fund expenses. The example set forth below is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at October 1, 2020 and held until March 31, 2021.

Actual Expenses

The “Actual” section of the table provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the column under the heading entitled “Expenses Paid During the Six Months Ended March 31, 2021” to estimate the expenses you paid on your account during this period. The “Expenses Paid During the Six Months Ended March 31, 2021” column and the “Annualized Expense Ratio” column do not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the “Expenses Paid During the Six Months Ended March 31, 2021” column and the “Annualized Expense Ratio” column do not include administrative fees that may apply to qualified retirement plan accounts. See the Funds’ prospectuses, your retirement plan document and/or materials from your financial adviser for a full description of these fees. Had these fees been included, the “Expenses Paid During the Six Months Ended March 31, 2021” column would have been higher and the “Ending Account Value” column would have been lower.

Hypothetical Example for Comparison Purposes

The “Hypothetical” section of the table provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an annual rate of return of 5% before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The “Expenses Paid During the Six Months Ended March 31, 2021” column and the “Annualized Expense Ratio” column do not include small account fees that may be charged if your account balance is below $500 ($250 for retirement plan accounts). In addition, the “Expenses Paid During the Six Months Ended March 31, 2021” column and the “Annualized Expense Ratio” column do not include administrative fees that may apply to qualified retirement plan accounts and accounts held through financial institutions. See the Funds’ prospectuses, your retirement plan document and/or materials from your financial adviser for a full description of these fees. Had these fees been included, the “Expenses Paid During the Six Months Ended March 31, 2021” column would have been higher and the “Ending Account Value” column would have been lower.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, including sales charges on purchase payments, contingent deferred sales charges, small account fees and administrative fees, if applicable to your account. Please refer to the Funds’ prospectus, your retirement plan document and/or material from your financial adviser, for more information. Therefore, the “Hypothetical” example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs and other fees were included, your costs would have been higher.

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SunAmerica Income Funds

EXPENSE EXAMPLE — March 31, 2021 — (unaudited) (continued)

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SunAmerica Income Funds

STATEMENTS OF ASSETS AND LIABILITIES — March 31, 2021

See Notes to Financial Statements

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SunAmerica Income Funds

STATEMENTS OF ASSETS AND LIABILITIES — March 31, 2021 — (continued)

See Notes to Financial Statements

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SunAmerica Income Funds

STATEMENTS OF OPERATIONS — For the Year Ended March 31, 2021

See Notes to Financial Statements

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SunAmerica Income Funds

STATEMENTS OF CHANGES IN NET ASSETS

See Notes to Financial Statements

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SunAmerica Income Funds

FINANCIAL HIGHLIGHTS