[COVER PAGE]
June 30, 1997
PHOENIX
FUNDS
SEMIANNUAL REPORT
Phoenix Duff &
Phelps Institutional
Mutual Funds
o BALANCED PORTFOLIO
o MANAGED BOND PORTFOLIO
o GROWTH STOCK PORTFOLIO
o MONEY MARKET PORTFOLIO
o U.S. GOVERNMENT
SECURITIES PORTFOLIO
o ENHANCED RESERVES
PORTFOLIO
[LOGO] Phoenix
Duff & Phelps
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Balanced Portfolio ........................ 1
Managed Bond Portfolio ..................... 9
Growth Stock Portfolio ..................... 16
Money Market Portfolio ..................... 22
U.S. Government Securities Portfolio ...... 27
Enhanced Reserves Portfolio ............... 32
Notes to Financial Statements ............ 37
</TABLE>
<PAGE>
INSTITUTIONAL BALANCED PORTFOLIO
INVESTMENT ADVISER'S REPORT
For the six months ended June 30, 1997, Institutional Balanced Portfolio
posted double-digit gains. Class X shares provided a total return of 10.49% and
Class Y shares returned 10.36% compared with an average return of 10.21% for a
peer universe of 340 balanced funds, according to Lipper Analytical Services,
Inc. The Portfolio's benchmark posted a return of 12.43%.* All of these figures
assume reinvestment of dividends and are net of fees.
Despite a sharp sell-off from mid-March through mid-April, the market
continued to climb to record highs. As measured by the S&P 500 Stock Index, the
market returned an impressive 20.53% during this latest six-month period.**
From a historical perspective, this 1997 year-to-date return is the fourth
strongest first-half gain over the past 50 years. Blue-chip stocks continued to
outperform small- and mid-cap stocks. Health-care and finance stocks led the
market in terms of sector performance.
Interest rates appeared to be locked in a narrow trading range as
investors debated whether the robust economic growth reported in the first
quarter would serve as a catalyst for higher inflation. As measured by the
30-year Treasury bond, interest rates climbed as high as 7.17% in mid-April,
but finished the month of June yielding 6.79%--only 0.14% higher than at the
start of the reporting period.
As represented by the Lehman Brothers Aggregate Bond Index, the bond
market returned 3.09% over the last six months. Emerging-market and domestic
high-yield bonds were the best performers, with Treasury and investment-grade
corporate issues the laggards.
The Portfolio benefited from strong stock selection in the consumer
staples and financial sectors as well as the decision to increase our equity
exposure after the correction in mid-April. Individual stocks that produced
strong gains included General Electric, Eli Lilly, Colgate-Palmolive, Perkin
Elmer and Franklin Resources. The fixed-income segment also boosted results,
outperforming its benchmark, the Lehman Brothers Aggregate Bond Index.*** As
interest rates moved down, our purchase of zero-coupon Treasury bonds helped
performance. Negative contributors included the relative underperformance of
our technology and energy holdings, and to a lesser degree, some individual
stocks, notably U.S. Filter, Ascend, Amgen and Cardinal Health.
OUTLOOK
Although many blue-chip stocks have performed very strongly, we believe
there is still upside potential as investors remain focused on stability and
growth in earnings, global opportunities and liquidity. Given this outlook, we
continue to emphasize the financial, technology and health-care sectors.
We are maintaining a longer bond duration with the expectation that
interest rates will continue to move downward. In addition, we reduced our
exposure to emerging-market debt. While this sector has provided excellent
returns year-to-date, valuations are high historically. Besides these modest
adjustments, our fixed-income strategy of broad diversification and sector
rotation remains unchanged. At quarter-end, the bond segment had an average
"AA" credit quality and a duration of 6.9 years. As of June 30, 1997, the
Portfolio was 63% invested in equities and 37% fixed-income.
* The Balanced Benchmark is a composite index consisting of 55% S&P 500 Index,
35% Lehman Brothers Aggregate Bond Index and 10% 90-day Treasury bills.
** The S&P 500 is an unmanaged, commonly used measure of stock market total
return performance.
*** The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond market total return performance.
1
<PAGE>
Institutional Balanced Portfolio
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES--18.6%
U.S. Treasury Bonds--3.4%
U.S. Treasury Strip, P.O., 0%, '22 .. Aaa $6,600 $1,160,346
-----------
U.S. Treasury Notes--10.3%
U.S. Treasury Notes 6.375%, '99 ... Aaa 325 326,625
U.S. Treasury Notes 6.375%, '00 ... Aaa 500 501,875
U.S. Treasury Notes 6.625%, '01 ... Aaa 1,200 1,212,000
U.S. Treasury Notes 6.25%, '02 ...... Aaa 1,500 1,491,089
-----------
3,531,589
-----------
Agency Mortgage-Backed Securities--4.9%
GNMA 6.50%, '23-'26 ............... Aaa 1,759 1,690,328
-----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $6,328,907) ........................... 6,382,263
-----------
NON-CONVERTIBLE BONDS--10.2%
Asset-Backed Securities--0.8%
Fleetwood Credit Corp. 96-B, A
6.90%, '12 ........................ Aaa 168 169,411
Green Tree Financial Corp. 96-2,
M1 7.60%, '27 ..................... Aa 100 100,750
-----------
270,161
-----------
Non-Agency Mortgage-Backed Securities--9.1%
CS First Boston Mortgage
95-AEW1, B 7.182%, '27 ............ AA(d) 190 191,039
DLJ Mortgage Acceptance Corp.
96-CF1, A1B 144A 7.58%, '28
(c) .............................. Aaa 75 77,672
First Union Lehman Brothers
97-C1, B 7.43%, '29 ............... AA(d) 275 280,500
G.E. Capital Mortgage Services,
Inc. 96-8, M 7.25%, '26 ......... AA(d) 248 243,038
Nationslink Funding Corp. 96-1, B
7.69%, '05 ........................ AA(d) 250 259,453
Residential Asset Securitization
Trust 96-A8, A1 8%, '26 ......... AAA(d) 249 252,477
Residential Funding Mortgage I
96-S8, A-4 6.75%, '11 ............ AAA(d) 285 279,645
Residential Funding Mortgage I
96-S1, A11 7.10%, '26 ............ AAA 500 487,031
Residential Funding Mortgage I
96-S4, MI 7.25%, '26 ............ AA(d) 297 289,756
Resolution Trust Corp. 93-C1, B
8.75%, '24 ........................ Aa 200 199,652
Resolution Trust Corp. 95-C2, B
6.80%, '27 ........................ Aa 437 434,500
Structured Asset Securities Corp.
93-C1, B 6.60%, '24 ............... A 135 129,147
-----------
3,123,910
-----------
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
Truckers & Marine--0.3%
Teekay Shipping Corp. 8.32%,
'08 .............................. Ba $ 100 $ 101,250
-----------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $3,507,532)......... 3,495,321
-----------
FOREIGN GOVERNMENT SECURITIES--3.8%
Argentina--0.6%
Republic of Argentina Discount
L-GL Euro 6.875%, '23 (f) ......... B 120 103,875
Republic of Argentina Par L-GP
5.50%, '23 (f) .................. B 160 111,200
-----------
215,075
-----------
Brazil--0.6%
Republic of Brazil DCB-L Euro
6.938%, '12 (f) .................. B 120 99,150
Republic of Brazil Par Z-L Euro
5.25%, '24 (f) .................. B 150 102,000
-----------
201,150
-----------
Colombia--0.9%
Republic of Colombia 7.25%, '03 ..... Baa 300 291,954
-----------
Mexico--0.8%
United Mexican States 144A
7.875%, '01 (c) (f) ............... Baa 115 115,184
United Mexican States Discount B
Euro 6.836%, '19 (e) (f) ......... Ba 185 172,166
-----------
287,350
-----------
Poland--0.5%
Poland PDI Bearer 4%, '14 (f) ...... Baa 180 153,900
-----------
Venezuela--0.4%
Republic of Venezuela Discount
6.813%, '20 (e)(f) ............... Ba 170 150,450
-----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $1,247,428)............................. 1,299,879
-----------
FOREIGN NON-CONVERTIBLE BONDS--0.5%
Chile--0.5%
Compania Sud Amer Vapore
7.375%, '03 ..................... BBB(d) 30 29,512
Petropower I Funding Trust 144A
7.36%, '14 (c) .................. BBB(d) 150 142,757
-----------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $179,376) ............................. 172,269
-----------
</TABLE>
See Notes to Financial Statements
2
<PAGE>
Institutional Balanced Portfolio
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- ------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS--3.7%
California--1.2%
Long Beach Pension Obligation
Taxable 6.87%, '06 ......... Aaa $100 $ 99,060
San Bernardino County Obligation
Revenue Taxable 6.87%, '08 ... Aaa 50 48,911
San Bernardino County Obligation
Revenue Taxable 6.94%, '09 ... Aaa 135 132,446
Ventura County Pension Taxable
6.54%, '05 .................. Aaa 125 122,090
-----------
402,507
-----------
Florida--0.5%
University of Miami Exchangeable
Revenue Series A Taxable
7.65%, '20 .................. Aaa 180 179,550
-----------
Virginia--2.0%
Newport News Taxable Series B
7.05%, '25 .................. Aa 750 704,168
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $1,337,994) ..................... 1,286,225
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------
<S> <C> <C>
COMMON STOCKS--61.1%
Aerospace & Defense--0.9%
Sundstrand Corp. ............... 2,100 113,400
United Technologies Corp. ...... 2,500 207,500
-----------
320,900
-----------
Banks--3.5%
Citicorp ........................ 3,300 397,856
First Union Corp. ............... 400 37,000
Mellon Bank Corp. ............... 9,200 415,150
Nationsbank Corp. ............... 5,400 348,300
-----------
1,198,306
-----------
Beverages--1.2%
PepsiCo, Inc. (g) ............ 10,700 401,919
-----------
Chemical--0.3%
Monsanto Co. .................. 2,000 86,125
-----------
Chemical--Specialty--0.4%
Praxair, Inc. .................. 2,500 140,000
-----------
Computer Software & Services--2.3%
Adaptec, Inc. (b) ............... 900 31,275
HBO & Co. ..................... 4,500 309,938
Microsoft Corp. (b) ............ 3,500 442,312
-----------
783,525
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
Conglomerates--1.1%
Tyco International Ltd. ............... 5,200 $ 361,725
-----------
Cosmetics & Soaps--5.0%
Colgate-Palmolive Co. (g) ............ 9,500 619,875
Gillette Co. ........................... 8,200 776,950
Procter & Gamble Co. (g) ............ 2,300 324,875
-----------
1,721,700
-----------
Diversified Financial Services--2.6%
American Express Co. .................. 1,100 81,950
Franklin Resources, Inc. ............... 4,000 290,250
Merrill Lynch & Co., Inc. ............ 1,200 71,550
T. Rowe Price Associates (g) ......... 4,700 242,638
Washington Mutual, Inc. ............... 3,200 191,200
-----------
877,588
-----------
Electrical Equipment--2.5%
General Electric Co. .................. 10,200 666,825
Honeywell, Inc. ........................ 2,700 204,863
-----------
871,688
-----------
Electronics--4.1%
Altera Corp. (b) ..................... 2,000 101,000
Intel Corp. (g) ..................... 4,510 639,574
Perkin Elmer Corp. ..................... 6,400 509,200
Texas Instruments, Inc. ............... 1,900 159,719
-----------
1,409,493
-----------
Entertainment, Leisure & Gaming--0.9%
Time Warner, Inc. ..................... 2,500 120,625
Walt Disney Co. ........................ 2,300 184,575
-----------
305,200
-----------
Healthcare--Diversified--1.4%
Bristol-Myers Squibb Co. (g) ......... 6,000 486,000
-----------
Healthcare--Drugs--4.6%
Amgen, Inc. (b) ........................ 7,000 406,875
Eli Lilly & Co. (g) .................. 1,600 174,900
Merck & Co., Inc. ..................... 4,500 465,750
Pfizer, Inc. ........................... 4,400 525,800
-----------
1,573,325
-----------
Hospital Management & Services--0.9%
Columbia/HCA Healthcare Corp. ......... 8,300 326,294
-----------
Insurance--3.1%
Allstate Corp. ........................ 5,500 401,500
Hartford Financial Services Group, Inc. 4,000 331,000
SunAmerica, Inc. ..................... 6,700 326,625
-----------
1,059,125
-----------
</TABLE>
See Notes to Financial Statements
3
<PAGE>
Institutional Balanced Portfolio
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
Machinery--0.6%
Deere & Co. .............................. 3,500 $ 192,062
------------
Medical Products & Supplies--5.6%
Abbott Laboratories ........................ 4,500 300,375
Baxter International, Inc. ............... 8,000 418,000
Boston Scientific Corp. (b) ............... 7,941 487,875
Cardinal Health, Inc. ..................... 4,650 266,212
Johnson & Johnson ........................... 6,900 444,188
------------
1,916,650
------------
Natural Gas--0.4%
Columbia Gas System, Inc. .................. 2,400 156,600
------------
Office & Business Equipment--1.1%
International Business Machines Corp. (g) 4,100 369,769
------------
Oil--0.7%
Exxon Corp. ................................. 4,100 252,150
------------
Oil Service & Equipment--3.9%
Camco International, Inc. .................. 1,400 76,650
ENSCO International, Inc. (b) ............... 3,900 205,725
Halliburton Co. ........................... 3,600 285,300
Noble Drilling Corp. (b) .................. 8,300 187,269
Schlumberger Ltd. ........................... 3,100 387,500
Transocean Offshore, Inc. .................. 2,600 188,825
------------
1,331,269
------------
Paper & Forest Products--0.7%
Kimberly Clark Corp. ........................ 5,000 248,750
------------
Pollution Control--0.6%
U.S. Filter Corp. (b) ..................... 7,800 212,550
------------
Professional Services--0.6%
HFS, Inc. (b) .............................. 3,700 214,600
------------
Publishing, Broadcasting, Printing & Cable--1.2%
Gannett Co., Inc. ........................... 2,200 217,250
New York Times Co. Class A .................. 3,900 193,050
------------
410,300
------------
Real Estate--0.0%
Crescent Operating, Inc. (b) ............... 250 3,000
------------
REITS--0.6%
Crescent Real Estate Equities Co. ......... 2,500 79,375
Redwood Trust, Inc. ........................ 2,800 130,900
------------
210,275
------------
SHARES VALUE
-------- ------------
<S> <C> <C>
Retail--2.5%
Home Depot, Inc. ........................... 3,300 $ 227,494
Lowe's Companies, Inc. ..................... 5,150 191,193
Staples, Inc. (b) ........................... 18,750 435,938
------------
854,625
------------
Retail--Drugs--0.6%
CVS Corp. ................................. 4,100 210,125
------------
Retail--Food--0.5%
Safeway, Inc. (b) ........................... 4,000 184,500
------------
Telecommunications Equipment--2.9%
Ascend Communications, Inc. (b) ............ 9,150 360,281
Cisco Systems, Inc. (b) ..................... 2,700 181,238
Lucent Technologies, Inc. .................. 4,500 324,281
Motorola, Inc. ........................... 1,600 121,600
------------
987,400
------------
Textile & Apparel--0.5%
Nike, Inc. Class B ........................ 3,100 180,962
------------
Tobacco--1.2%
Philip Morris Companies, Inc. ............... 9,300 412,687
------------
Utility--Telephone--2.1%
Ameritech Corp. ........................... 1,900 129,081
Bell Atlantic Corp. ........................ 5,100 386,962
LCI International, Inc. (b) ............... 1,500 32,813
SBC Communications, Inc. .................. 2,800 173,250
------------
722,106
------------
TOTAL COMMON STOCKS
(Identified cost $18,614,117) ........................ 20,993,293
------------
FOREIGN COMMON STOCKS--1.9%
Electronics--0.9%
Philips Electronics NV ADR NY Registered
(Netherlands) ........................... 4,300 309,062
------------
Oil--0.6%
Royal Dutch Petroleum Co. ADR NY
Registered (Netherlands) .................. 3,600 195,750
------------
Pollution Control--0.4%
Philip Services Corp.(Canada) (b) ......... 10,000 158,750
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $542,602) ........................... 663,562
------------
TOTAL LONG-TERM INVESTMENTS--99.8%
(Identified cost $31,757,956) ........................ 34,292,812
------------
</TABLE>
See Notes to Financial Statements
4
<PAGE>
Institutional Balanced Portfolio
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- -------- --------------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--6.5%
Commercial Paper--6.2%
McKenna Triangle National
Corp. 6.25%, 7-1-97 ...... A-1+ $1,500 $ 1,500,000
McDonald's Corp. 5.90%,
7-3-97 .................. A-1+ 655 654,785
--------------
2,154,785
--------------
U.S. Treasury Bills--0.3%
U.S. Treasury Bills 4.90%, 7-17-97 ...... 100 99,735
--------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $2,254,568)..................... 2,254,520
--------------
TOTAL INVESTMENTS--106.3%
(Identified cost $34,012,524) .................. 36,547,332(a)
Cash and receivables, less liabilities--(6.3%) (2,175,203)
--------------
NET ASSETS--100.0% .............................. $34,372,129
==============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,975,082 and gross
depreciation of $446,503 for income tax purposes. At June 30, 1997, the
aggregate cost of securities for federal income tax purposes was
$34,018,753.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 1997,
these securities amounted to a value of $335,613 or 1.0% of net assets.
(d) As rated by Standard & Poor's, Fitch or Duff and Phelps.
(e) Rights incorporated as a unit.
(f) Variable or step coupon obligation; interest rate shown reflects the rate
currently in effect.
(g) Segregated as collateral.
See Notes to Financial Statements
5
<PAGE>
Institutional Balanced Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $34,012,524) $36,547,332
Receivables
Investment securities sold 155,551
Dividends and interest 132,691
Fund shares sold 19,611
Receivable from adviser 617
------------
Total assets 36,855,802
------------
Liabilities
Payables
Fund shares repurchased 2,291,890
Custodian 66,612
Investment securities purchased 47,072
Options written at value
(Premiums received $23,695) 24,219
Financial agent fee 5,918
Transfer agent fee 3,731
Distribution fee 1,754
Trustees' fee 779
Accrued expenses 41,698
------------
Total liabilities 2,483,673
------------
Net Assets $34,372,129
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $28,032,492
Undistributed net investment loss (3,108)
Accumulated net realized gain 3,808,461
Net unrealized appreciation 2,534,284
------------
Net Assets $34,372,129
============
Class X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $26,404,440) 1,392,065
Net asset value and offering price per share $18.97
Class Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $7,967,689) 419,727
Net asset value and offering price per share $18.98
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 604,989
Dividends 138,816
----------
Total investment income 743,805
----------
Expenses
Investment advisory fee 110,999
Distribution fee--Class Y 12,995
Financial agent fee 35,704
Transfer agent 26,760
Registration 23,498
Custodian 12,660
Professional 8,804
Trustees 6,788
Printing 3,069
Miscellaneous 5,478
----------
Total expenses 246,755
Less expenses borne by investment adviser (102,579)
----------
Net expenses 144,176
----------
Net investment income 599,629
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 3,912,036
Net realized gain on written options 1,179
Net change in unrealized appreciation (depreciation)
on investments (406,037)
Net change in unrealized appreciation (depreciation)
on written options (524)
----------
Net gain on investments 3,506,654
----------
Net increase in net assets resulting from
operations $4,106,283
==========
</TABLE>
See Notes to Financial Statements
6
<PAGE>
Institutional Balanced Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended From Inception
June 30, 1997 March 1, 1996 to
(Unaudited) December 31, 1996
--------------- ------------------
<S> <C> <C>
From Operations
Net investment income $ 599,629 $ 1,360,086
Net realized gain 3,913,215 3,730,688
Net change in unrealized appreciation (depreciation) (406,561) (413,816)
------------- -------------
Increase in net assets resulting from operations 4,106,283 4,676,958
------------- -------------
From Distributions to Shareholders
Net investment income--Class X (514,324) (1,072,486)
Net investment income--Class Y (130,123) (283,103)
Net realized gains--Class X (1,047,216) (1,923,139)
Net realized gains--Class Y (291,846) (583,212)
------------- -------------
Decrease in net assets from distributions to shareholders (1,983,509) (3,861,940)
------------- -------------
From Share Transactions
Class X
Proceeds from sales of shares (96,627 and 282,929 shares, respectively) 1,820,540 5,116,425
Net asset value of shares issued from reinvestment of distributions (81,628 and
152,545 shares, respectively) 1,561,537 2,779,558
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account L (0 and 2,524,966 shares, respectively) -- 45,200,432
Cost of shares repurchased (833,094 and 913,536 shares, respectively) (15,614,125) (16,577,547)
------------- -------------
Total (12,232,048) 36,518,868
------------- -------------
Class Y
Proceeds from sales of shares (34,668 and 123,668 shares, respectively) 650,534 2,267,577
Net asset value of shares issued from reinvestment of distributions (22,050 and
47,488 shares, respectively) 422,042 866,311
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account L (0 and 721,462 shares, respectively) -- 12,915,189
Cost of shares repurchased (298,771 and 230,838 shares, respectively) (5,748,063) (4,226,073)
------------- -------------
Total (4,675,487) 11,823,004
------------- -------------
Increase (decrease) in net assets from share transactions (16,907,535) 48,341,872
------------- -------------
Net increase (decrease) in net assets (14,784,761) 49,156,890
Net Assets
Beginning of period 49,156,890 0
------------- -------------
End of period (including undistributed net investment income (loss) of
($3,108) and $41,710, respectively) $ 34,372,129 $ 49,156,890
============= =============
</TABLE>
See Notes to Financial Statements
7
<PAGE>
Institutional Balanced Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class X Class Y
---------------------------------- ---------------------------------
Six Months Six Months
Ended From Inception Ended From Inception
6/30/97 3/1/96 to 6/30/97 3/1/96 to
(Unaudited) 12/31/96 (Unaudited) 12/31/96
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.15 $ 17.90 $ 18.15 $ 17.90
Income from investment operations
Net investment income 0.40(4) 0.51(4) 0.36(5) 0.46(5)
Net realized and unrealized gain 1.51 1.17 1.53 1.18
---------- --------- ---------- ---------
Total from investment operations 1.91 1.68 1.89 1.64
---------- --------- ---------- ---------
Less distributions
Dividends from net investment income (0.36) (0.49) (0.33) (0.45)
Distributions from net realized gains (0.73) (0.94) (0.73) (0.94)
---------- --------- ---------- ---------
Total distributions (1.09) (1.43) (1.06) (1.39)
---------- --------- ---------- ---------
Change in net asset value 0.82 0.25 0.83 0.25
---------- --------- ---------- ---------
Net asset value, end of period $ 18.97 $ 18.15 $ 18.98 $ 18.15
========== ========= ========== =========
Total return 10.49%(2) 9.43%(2) 10.36%(2) 9.20%(2)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 26,404 $ 37,147 $ 7,968 $ 12,010
Ratio to average net assets of:
Operating expenses 0.65%(1) 0.65%(1) 0.90%(1) 0.90%(1)
Net investment income 3.04%(1) 3.02%(1) 2.78%(1) 2.78%(1)
Portfolio turnover 97%(2) 209%(2) 97%(2) 209%(2)
Average commission rate paid(3) $ 0.0544 $ 0.0630 $ 0.0544 $ 0.0630
</TABLE>
(1) Annualized
(2) Not annualized
(3) A fund is required to disclose its average commission rate per share for
securities trades on which commissions are charged. This rate generally
does not reflect mark-ups, mark-downs, or spreads on shares traded on a
principal basis.
(4) Includes reimbursement of operating expenses by investment adviser of $0.05
and $0.06, respectively.
(5) Includes reimbursement of operating expenses by investment adviser of $0.05
and $0.06, respectively.
See Notes to Financial Statements
8
<PAGE>
INSTITUTIONAL MANAGED BOND PORTFOLIO
INVESTMENT ADVISER'S REPORT
For the six-month reporting period ended June 30, 1997, Class X shares
returned 3.84% and Class Y shares earned 3.77%, outperforming the benchmark,
the Lehman Brothers Aggregate Bond Index, which was up 3.09%.* All of these
figures assume reinvestment of dividends and are net of fees.
The second quarter bond market rebound more than erased first-quarter
losses. The Federal Reserve Board's 25-basis point preemptive tightening move
in March appears to have been just that -- as the Fed did not follow through
with additional rate increases at their May or July meetings. Both inflation
and the economy were well behaved, having settled once again into a more
moderate, sustainable pace.
Allocations to emerging-market, domestic high-yield, commercial
mortgage-backed securities and to a lesser extent, non-agency residential
mortgage-backed securities and taxable municipal issues all proved to be
positive contributors to performance. While we were rewarded by our continued
emphasis on the less traditional sectors of the fixed-income market, by
historical measures, the yield premium available from many of these sectors has
declined.
Accordingly, we have increased the Portfolio's exposure to Treasuries,
with target allocations up considerably since the beginning of the year. This
move to establish a higher quality portfolio posture will enable us to take
advantage of attractive yield spread opportunities as they arise.
OUTLOOK
As we move into the second half of the year, investor uncertainty remains
high. We are confident that our duration-neutral strategy will insulate the
Portfolio from the effects of a volatile interest rate environment, as we seek
out the best relative values in the market place.
Going forward, we intend to further reduce exposure to some of the more
credit-sensitive sectors, driven primarily by their high current valuations as
well as their strong relative year-to-date total returns. Emphasizing the most
undervalued bond market sectors will continue to be our primary means of adding
value for clients.
* The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond market total return performance.
9
<PAGE>
Institutional Managed Bond Portfolio
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES--12.6%
U.S. Treasury Bonds--1.3%
U.S. Treasury Bonds 6.625%, '07 ..... Aaa $1,035 $ 1,043,409
------------
Agency Mortgage-Backed Securities--11.3%
FHLMC 8.50%, '20 .................. Aaa 622 630,068
FHLMC 6.65%, '23 (f) ............... Aaa 1,890 1,849,176
FNMA 7%, '07 ........................ Aaa 913 899,283
FNMA 8.70%, '16 ..................... Aaa 330 337,987
FNMA ACES 7.27%, '17 ............... Aaa 1,500 1,517,344
FNMA 7.50%, '19 ..................... Aaa 1,840 1,828,610
FNMA 6.75%, '20 (f) ............... Aaa 1,920 1,892,851
------------
8,955,319
------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $9,750,993) ........................... 9,998,728
------------
NON-CONVERTIBLE BONDS--39.6%
Asset-Backed Securities--6.3%
Airplanes Pass Through Trust 1C
8.15%, '19 (f) .................. Baa 1,600 1,664,976
Continental Airlines 144A
7.522%, '01 (b) .................. Ba 1,000 1,000,000
FMAC Loan Receivables Trust
97-A, C 144A 7.90%, '11 (b) ...... A(c) 650 660,764
Green Tree Financial Corp. 95-8,
A2 6.15%, '26 ..................... Aaa 187 187,020
Green Tree Financial Corp. 97-4,
M1 7.22%, '28 ..................... Aa 1,500 1,483,125
------------
4,995,885
------------
Banks--1.8%
NationsBank Capital Trust III
6.366%, '27 (d) .................. A 1,450 1,411,965
------------
Non-Agency Mortgage-Backed Securities--29.6%
Chase Commercial Mortgage
Securities Corp. 96-2, A1
6.70%, '03 ..................... AAA(c) 118 117,253
Criimi Mae Trust I 96-C1, A2
144A 7.56%, '33 (b) ............... BBB(c) 1,475 1,471,773
Equitable Life 174, C1 144A
7.52%, '06 (b) .................. A 2,000 2,047,187
FFCA Secured Lending Corp.
97-1, A1B 144A 7.45%,
'11 (b) ........................... Aaa 1,400 1,411,375
G.E. Capital Mortgage Services,
Inc. 97-1, A14 7.50%, '27 (f) ... AAA(c) 1,720 1,717,850
General Electric 96-8, 2A5
7.50%, '26 ........................ AAA(c) 173 173,201
Kidder Peabody Acceptance Corp.
94-C2, D 7.18%, '05 (f) ......... BBB(c) 1,240 1,243,875
Lehman Structured Securities
Corp. 96-1, E1 7.995%, '26 ...... BBB(c) 1,203 1,232,586
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- -------------
<S> <C> <C> <C>
Non-Agency Mortgage-Backed Securities--(continued)
Merrill Lynch Mortgage, Inc.
95-C2, C 7.79%, '21 ............... A $1,250 $ 1,272,198
Morgan Stanley Capital Corp. I
96-WF1, C 144A 6.59%, '06
(b) .............................. A 200 192,000
Mortgage Capital Funding, Inc.
96-MC2, A3 7.008%, '06 ............ Aaa 715 714,106
Residential Accredit Loans, Inc.
96-QS4, AI10 7.90%, '26 ......... AAA(c) 900 917,437
Residential Asset Securitization
Trust 96-A8, A1 8%, '26 ......... AAA(c) 997 1,009,908
Residential Funding Mortgage
93-S25, M3 6.50%, '08 ............ BBB(c) 643 614,606
Resolution Trust Corp. 92-C3, B
9.05%, '23 ........................ AA(c) 153 155,979
Resolution Trust Corp. 92-C8, E
8.835%, '23 ..................... BB-(c) 1,976 2,004,365
Resolution Trust Corp. 93-C3, A4
6.55%, '24 ........................ Aaa 85 84,820
Resolution Trust Corp. 95-1, M2
7.50%, '28 ........................ Aa 1,414 1,424,570
Resolution Trust Corp. 95-2, M1
7.15%, '29 ........................ Aa 195 193,997
Ryland Mortgage Security Corp.
III 92-A, 1A 8.33%, '30 ......... A-(c) 638 632,770
Securitized Asset Sales, Inc. 95-A,
M 7.53%, '24 (f) .................. Aa 1,955 1,945,977
Structured Asset Securities Corp.
95-C1, D 7.375%, '24 (f) ......... BBB(c) 1,865 1,863,252
Structured Asset Securities Corp.
95-C4, D 7%, '26 .................. BBB(c) 1,000 977,187
------------
23,418,272
------------
Oil Service & Equipment--0.7%
Di Industries, Inc. 8.875%, '07 ... B 550 544,500
------------
Retail--Food Service--0.1%
ARA Services, Inc. 10.625%, '00 ... Baa 107 116,898
------------
Utility--Electric--1.1%
Louisiana Power & Lighting
10.30%, '05 ..................... Baa 849 875,175
------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $31,078,782) ........................... 31,362,695
------------
FOREIGN GOVERNMENT SECURITIES--17.4%
Argentina--4.8%
Republic of Argentina Discount
L-GL Euro 6.875%, '23 (d) ......... B 2,725 2,358,828
Republic of Argentina Par L-GP
5.50%, '23 (d) .................. B 2,070 1,438,650
------------
3,797,478
------------
</TABLE>
See Notes to Financial Statements
10
<PAGE>
Institutional Managed Bond Portfolio
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- -------------
<S> <C> <C> <C>
Brazil--1.6%
Republic of Brazil Discount Z-L
Euro 6.875%, '24 (d) .................. B $ 775 $ 653,906
Republic of Brazil Par Z-L Euro
5.25%, '24 (d) ........................ B 960 652,800
------------
1,306,706
------------
Croatia--2.1%
Croatia Series A 6.50%, '10 (d) ......... Baa 1,730 1,681,884
------------
Mexico--3.0%
United Mexican States 144A
7.875%, '01 (b) (d) ..................... Baa 525 525,840
United Mexican States Discount
Series C 6.82%, '19 (d) (e) ............ Ba 250 232,656
United Mexican States Euro D
6.813%, '19 (d) (e) ..................... Ba 725 674,703
United Mexican States Series A
Euro 6.25%, '19 (e) ..................... Ba 175 135,516
United Mexican States Series B
Euro 6.25%, '19 (e) .................. Ba 1,000 774,375
------------
2,343,090
------------
Panama--1.1%
Panama PDI 6.563%, '16 (d) ............... Ba 963 857,765
------------
Poland--1.2%
Poland Global Registered RSTA
3.25%, '24 (d) ........................ Baa 1,500 952,500
------------
Russia--1.6%
Russia Interest Notes WI (d) (g) ......... NR 1,700 1,300,500
------------
Venezuela--2.0%
Republic of Venezuela Discount
W-B 6.813%, '20 (d) (e) ............... Ba 1,015 898,275
Republic of Venezuela Discount
6.813%, '20 (d) (e) ..................... Ba 750 663,750
------------
1,562,025
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $12,764,781) ................................. 13,801,948
------------
FOREIGN NON-CONVERTIBLE BONDS--12.1%
Brazil--1.3%
Comp Energetica Sao Paul 144A
9.125%, '07 (b) (d) ..................... NR 500 485,625
TV Filme, Inc. 144A 12.875%, '04
(b) .................................... B 500 521,250
------------
1,006,875
------------
Chile--3.2%
Compania Sud Amer Vapore 144A
7.375%, '03 (b) ........................ BBB(c) 1,240 1,219,850
Petropower Funding 144A 7.36%,
'14 (b) (f) ........................... BBB(c) 1,400 1,332,394
------------
2,552,244
------------
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- -------------
<S> <C> <C> <C>
China--0.6%
Greater Beijing 144A 9.50%, '07
(b) .................................... Ba $ 450 $ 457,875
------------
Colombia--1.4%
Centragas 144A 10.65%, '10 (b) ............ BBB(c) 1,028 1,134,024
------------
Hong Kong--1.8%
Road King Infrastructure 144A
9.50%, '07 (b) ........................ NR 1,400 1,410,500
------------
Indonesia--1.2%
Asia Pulp & Paper Co. Yankee
144A 12%, '04 (b) (d) .................. B 900 918,000
------------
Mexico--0.4%
TFM SA de CV. 144A 0%, '09
(b) (d) ................................. B 500 288,125
------------
South Korea--1.8%
Hyundai Motor Co. 144A 7.60%,
'07 (b) ................................. NR 1,465 1,464,136
------------
Venezuela--0.4%
Petrozuata Finance, Inc. 144A
8.22%, '17 (b) ........................ Baa 325 330,525
------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $9,373,060) ................................. 9,562,304
------------
MUNICIPAL BONDS--13.2%
California--2.1%
Oakland Pension Sub Series A
Taxable 6.98%, '09 ..................... Aaa 400 395,876
Orange County Pension A Taxable
7.67%, '09 .............................. Aaa 1,200 1,246,476
------------
1,642,352
------------
Florida--1.9%
Palm Beach Waste Revenue
Project B Taxable 10.50%, '11 NR 920 630,973
University of Miami Exchangeable
Revenue Series A Taxable
7.40%, '11 .............................. Aaa 170 170,758
University of Miami Exchangeable
Revenue Series A Taxable
7.65%, '20 .............................. Aaa 725 723,188
------------
1,524,919
------------
Illinois--3.0%
Illinois Educational Facilities Authority
Revenue--Loyola University
Series A Taxable 7.84%, '25 ............ Aaa 2,425 2,400,459
------------
Pennsylvania--5.0%
Pennsylvania Economic
Development 6.75%, '07 .................. NR 1,840 1,897,850
Pennsylvania Economic
Development 9.50%, '12 .................. NR 2,760 2,070,000
------------
3,967,850
------------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
Institutional Managed Bond Portfolio
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- ------- ------------
<S> <C> <C> <C>
Virginia--1.2%
Newport News Taxable Series B
7.05%, '25 ............... Aa $970 $ 910,723
------------
TOTAL MUNICIPAL BONDS
(Identified cost $11,314,850) .................. 10,446,303
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------
<S> <C> <C>
PREFERRED STOCKS--4.8%
REITS--4.8%
Home Ownership Funding 2, Step-down
Pfd. 144A 13.338% (b) ............ 3,900 3,776,752
------------
TOTAL PREFERRED STOCKS
(Identified cost $3,817,525).................. 3,776,752
------------
TOTAL LONG-TERM INVESTMENTS--99.7%
(Identified cost $78,099,991) ............... 78,948,730
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- -------- ------------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--7.9%
Commercial Paper--7.9%
McKenna Triangle National
Corp. 6.25%, 7-1-97 ...... A-1+ $3,000 $ 3,000,000
McDonald's Corp. 5.90%,
7-3-97 .................. A-1+ 2,905 2,904,048
Southwestern Bell Telephone
Co. 5.50%, 7-7-97 ......... A-1+ 340 339,689
----------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $6,243,737) .................. 6,243,737
----------------
TOTAL INVESTMENTS--107.6%
(Identified cost $84,343,728) .................. 85,192,467(a)
Cash and receivables, less liabilities--(7.6%) (6,043,143)
----------------
NET ASSETS--100.0% .............................. $ 79,149,324
================
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,087,679 and gross
depreciation of $1,322,687 for income tax purposes. At June 30, 1997, the
aggregate cost of securities for federal income tax purposes was
$84,427,475.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30,
1997, these securities amounted to a value of $20,647,995 or 26.1% of net
assets.
(c) As rated by Standard & Poor's, Fitch or Duff & Phelps.
(d) Variable or step obligation; interest rate shown reflects the rate
currently in effect.
(e) Rights incorporated as a unit.
(f) Segregated as collateral.
(g) When issued.
See Notes to Financial Statements
12
<PAGE>
Institutional Managed Bond Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $84,343,728) $85,192,467
Cash 673,411
Receivables
Interest and dividends 1,049,197
Investment securities sold 564,184
Fund shares sold 237
------------
Total assets 87,479,496
------------
Liabilities
Payables
Investment securities purchased 7,601,577
Fund shares repurchased 663,501
Investment advisory fee 15,943
Financial agent fee 6,740
Transfer agent fee 2,604
Distribution fee 1,170
Trustees' fee 507
Accrued expenses 38,130
------------
Total liabilities 8,330,172
------------
Net Assets $79,149,324
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $76,560,838
Undistributed net investment income 65,542
Accumulated net realized gain 1,674,205
Net unrealized appreciation 848,739
------------
Net Assets $79,149,324
============
Class X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $73,839,242) 2,174,011
Net asset value and offering price per share $33.96
Class Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $5,310,082) 156,293
Net asset value and offering price per share $33.98
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 2,745,477
Dividends 212,698
------------
Total investment income 2,958,175
------------
Expenses
Investment advisory fee 171,303
Distribution fee--Class Y 8,247
Financial agent fee 40,663
Registration 24,561
Transfer agent 23,926
Custodian 14,889
Professional 8,434
Trustees 6,416
Printing 2,555
Miscellaneous 4,236
------------
Total expenses 305,230
Less expenses borne by investment adviser (87,613)
------------
Net expenses 217,617
------------
Net investment income 2,740,558
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 1,671,484
Net realized change in unrealized appreciation (depreciation)
on investments (1,391,539)
------------
Net gain on investments 279,945
------------
Net increase in net assets resulting from
operations $ 3,020,503
============
</TABLE>
See Notes to Financial Statements
13
<PAGE>
Institutional Managed Bond Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended From Inception
June 30, 1997 March 1, 1996 to
(Unaudited) December 31, 1996
--------------- ------------------
<S> <C> <C>
From Operations
Net investment income $ 2,740,558 $ 4,094,124
Net realized gain 1,671,484 1,624,424
Net change in unrealized appreciation (depreciation) (1,391,539) (396,251)
------------- -------------
Increase in net assets resulting from operations 3,020,503 5,322,297
------------- -------------
From Distributions to Shareholders
Net investment income--Class X (2,535,689) (3,719,461)
Net investment income--Class Y (173,079) (374,664)
Net realized gains--Class X (278,926) (1,199,095)
Net realized gains--Class Y (19,936) (118,493)
In excess of net investment income--Class X -- (19,201)
In excess of net investment income--Class Y -- (1,934)
------------- -------------
Decrease in net assets from distributions to shareholders (3,007,630) (5,432,848)
------------- -------------
From Share Transactions
Class X
Proceeds from sales of shares (394,376 and 538,250 shares, respectively) 13,630,737 18,818,739
Net asset value of shares issued from reinvestment of distributions (80,207 and
123,928 shares, respectively) 2,736,679 4,187,321
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account P (0 and 1,774,264 shares, respectively) -- 60,037,092
Cost of shares repurchased (404,541 and 332,473 shares, respectively) (13,974,478) (11,414,976)
------------- -------------
Total 2,392,938 71,628,176
------------- -------------
Class Y
Proceeds from sales of shares (10,873 and 34,115 shares, respectively) 373,517 1,164,449
Net asset value of shares issued from reinvestment of distributions (5,654 and
14,700 shares, respectively) 193,013 495,088
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account P (0 and 196,803 shares, respectively) -- 6,659,369
Cost of shares repurchased (66,554 and 39,298 shares, respectively) (2,314,881) (1,344,667)
------------- -------------
Total (1,748,351) 6,974,239
------------- -------------
Increase in net assets from share transactions 644,587 78,602,415
------------- -------------
Net increase in net assets 657,460 78,491,864
Net Assets
Beginning of period 78,491,864 0
------------- -------------
End of period (including undistributed net investment income of
$65,542 and $33,752, respectively) $ 79,149,324 $ 78,491,864
============= =============
</TABLE>
See Notes to Financial Statements
14
<PAGE>
Institutional Managed Bond Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class X Class Y
----------------------------------------- -----------------------------------------
Six Months Six Months
Ended From Inception Ended From Inception
6/30/97 3/1/96 to 6/30/97 3/1/96 to
(Unaudited) 12/31/96 (Unaudited) 12/31/96
-------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 33.98 $ 33.84 $ 33.97 $ 33.84
Income from investment operations
Net investment income 1.21(3)(4) 2.03(3)(4) 1.17(3)(5) 1.98(3)(5)
Net realized and unrealized gain (loss) 0.10 0.69 0.12 0.66
---------- ---------- ---------- ----------
Total from investment operations 1.31 2.72 1.29 2.64
---------- ---------- ---------- ----------
Less distributions
Dividends from net investment income (1.20) (1.96) (1.15) (1.89)
Dividends from net realized gains (0.13) (0.61) (0.13) (0.61)
In excess of net investment income -- (0.01) -- (0.01)
---------- ---------- ---------- ----------
Total distributions (1.33) (2.58) (1.28) (2.51)
---------- ---------- ---------- ----------
Change in net asset value (0.02) 0.14 0.01 0.13
---------- ---------- ---------- ----------
Net asset value, end of period $ 33.96 $ 33.98 $ 33.98 $ 33.97
========== ========== ========== ==========
Total return 3.84%(2) 8.24%(2) 3.77%(2) 7.98%(2)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 73,839 $ 71,482 $ 5,310 $ 7,010
Ratio to average net assets of:
Operating expenses 0.55%(1) 0.55%(1) 0.80%(1) 0.80%(1)
Net investment income 7.23%(1) 7.15%(1) 6.89%(1) 6.91%(1)
Portfolio turnover 82%(2) 199%(2) 82%(2) 199%(2)
</TABLE>
(1) Annualized
(2) Not annualized
(3) Computed using average shares outstanding.
(4) Includes reimbursement of operating expenses by investment adviser of $0.04
and $0.09 per share, respectively.
(5) Includes reimbursement of operating expenses by investment adviser of $0.04
and $0.09 per share, respectively.
See Notes to Financial Statements
15
<PAGE>
INSTITUTIONAL GROWTH STOCK PORTFOLIO
INVESTMENT ADVISER'S REPORT
For the six months ended June 30, 1997, Class X shares returned 14.08% and
Class Y shares earned 13.95% compared with a return of 20.53% for the S&P 500
Stock Index.* All of these figures assume reinvestment of dividends and are net
of fees.
On April 1, the S&P 500 was barely 2% above the beginning of the year, and
was headed lower. But then signs of slowing economic growth appeared and the
market took off. The S&P 500 Stock Index ended the latest three-month period
with a 17.5% advance. While the market advance was broad, the 50 largest
capitalization stocks in the index continue to significantly outperform the
averages.
The price acceleration of these very large-capitalization stocks from
levels most felt were already expensive relative to the market, continued to
create a very difficult environment for active managers. Our performance during
the reporting period lagged the S&P 500 Stock Index, as did the results of the
vast majority of active managers. The S&P index funds were up 20.27%
year-to-date, while the average growth fund was up 14.28%, according to Lipper
Analytical Services, Inc.**
Our overweighted position in financial-service stocks has been a positive
contributor to performance all year. And, although our health-care holdings
slightly lagged the market, this was the top-performing sector and we were
significantly overweighted, which helped returns.
Performance was limited by our holdings in the technology and capital
goods sectors where our exposure was equal to the index, but the specific
holdings underperformed. Our underperformance came in large part from what we
didn't own -- top-performing very large-capitalization stocks such as Microsoft
and General Electric. Leading portfolio themes during the quarter included 21st
Century Medicine (Lilly, Elan and Guidant), and Deregulating Financial Services
(Travelers, American Express and Franklin Resources).
We reduced our exposure to energy, basic materials and capital goods,
using the proceeds to build up our position in technology and financial
services and increase our weightings in consumer staples and health-care.
OUTLOOK
We expect continued moderate economic growth, stable-to-lower interest
rates and continued low inflation. Despite concerns about the current level of
equity valuations, we believe this economic and market cycle can continue given
accommodative Federal Reserve monetary policy. In this environment we are
focusing on companies with the strongest earnings growth and the best earnings
visibility. Healthcare, financial services and technology remain our most
emphasized sectors.
* The S&P 500 Stock Index is an unmanaged, commonly used measure of total
return stock performance.
** The Lipper index fund universe includes a peer group of 68 funds, and the
growth stock fund universe includes a peer group of 840 funds, according to
Lipper Analytical Services, Inc.
16
<PAGE>
Institutional Growth Stock Portfolio
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
COMMON STOCKS--90.6%
Aerospace & Defense--1.5%
United Technologies Corp. .................. 13,900 $1,153,700
-----------
Banks--5.0%
BankAmerica Corp. ........................... 19,600 1,265,425
Citicorp .................................... 10,900 1,314,131
Mellon Bank Corp. ........................... 28,000 1,263,500
-----------
3,843,056
-----------
Beverages--1.6%
PepsiCo, Inc. .............................. 32,300 1,213,269
-----------
Chemical--1.7%
Monsanto Co. ................................. 31,000 1,334,938
-----------
Computer Software & Services--1.1%
HBO & Co. .................................... 11,800 812,725
-----------
Conglomerates--1.7%
Tyco International Ltd. ..................... 19,100 1,328,644
-----------
Cosmetics & Soaps--4.1%
Colgate-Palmolive Co. ........................ 15,000 978,750
Gillette Co. ................................. 14,380 1,362,505
Procter & Gamble Co. ........................ 5,900 833,375
-----------
3,174,630
-----------
Diversified Financial Services--8.9%
American Express Co. ........................ 14,500 1,080,250
Associates First Capital Corp. Class A ...... 19,900 1,104,450
Federal National Mortgage Assoc. ............ 27,900 1,217,137
Franklin Resources, Inc. ..................... 17,900 1,298,869
T. Rowe Price Associates ..................... 16,500 851,812
Travelers Group, Inc. ........................ 20,433 1,288,556
-----------
6,841,074
-----------
Diversified Miscellaneous--1.3%
Equifax, Inc. ................................. 26,700 992,906
-----------
Electronics--4.0%
Intel Corp. ................................. 8,500 1,205,406
Perkin Elmer Corp. ........................... 13,900 1,105,919
Xilinx, Inc. (b) ........................... 16,000 785,000
-----------
3,096,325
-----------
Entertainment, Leisure & Gaming--1.1%
Walt Disney Co. .............................. 10,100 810,525
-----------
Food--1.8%
Ralston-Ralston Purina Group ............... 16,300 1,339,656
-----------
Healthcare--Drugs--6.4%
Amgen, Inc. (b) .............................. 16,400 953,250
Eli Lilly & Co. .............................. 18,100 1,978,556
Merck & Co., Inc. ........................... 19,400 2,007,900
-----------
4,939,706
-----------
Hospital Management & Services--2.5%
Health Management Association, Inc.
Class A (b) .............................. 32,200 917,700
Tenet Healthcare Corp. (b) .................. 34,100 1,008,081
-----------
1,925,781
-----------
SHARES VALUE
-------- -----------
<S> <C> <C>
Insurance--3.8%
Aetna, Inc. ................................. 13,000 $1,330,875
Allstate Corp. .............................. 17,000 1,241,000
Hartford Life, Inc. Class A (b) ............ 9,000 337,500
-----------
2,909,375
-----------
Machinery--1.7%
Deere & Co. ................................. 23,500 1,289,563
-----------
Medical Products & Supplies--5.7%
Boston Scientific Corp. (b) .................. 15,500 952,281
Guidant Corp. .............................. 11,500 977,500
Johnson & Johnson ........................... 24,500 1,577,188
Medtronic, Inc. .............................. 11,000 891,000
-----------
4,397,969
-----------
Natural Gas--1.3%
Burlington Resources, Inc. .................. 23,000 1,014,875
-----------
Office & Business Equipment--5.7%
Compaq Computer Corp. (b) .................. 13,200 1,310,100
EMC Corp. (b) .............................. 20,400 795,600
Gateway 2000, Inc. (b) ..................... 31,600 1,025,025
International Business Machines Corp. ....... 13,900 1,253,606
-----------
4,384,331
-----------
Oil--1.3%
Valero Energy Corp. ........................ 26,400 957,000
-----------
Oil Service & Equipment--5.2%
BJ Services Co. (b) ........................ 12,200 654,225
Diamond Offshore Drilling, Inc. (b) ......... 8,100 632,813
Halliburton Co. .............................. 17,300 1,371,025
Schlumberger Ltd. ........................... 10,500 1,312,500
-----------
3,970,563
-----------
Paper & Forest Products--1.1%
Kimberly Clark Corp. ........................ 16,500 820,875
-----------
Pollution Control--0.9%
U.S. Filter Corp. (b) ........................ 26,300 716,675
-----------
Professional Services--2.2%
Federal Express Corp. (b) .................. 18,000 1,039,500
HFS, Inc. (b) .............................. 10,500 609,000
-----------
1,648,500
-----------
Publishing, Broadcasting, Printing & Cable--2.5%
Gannett Co., Inc. ........................... 9,600 948,000
New York Times Co. Class A .................. 19,800 980,100
-----------
1,928,100
-----------
Retail--5.6%
Borders Group, Inc. (b) ..................... 50,500 1,218,312
Costco Co., Inc. (b) ........................ 37,000 1,216,375
Home Depot, Inc. ........................... 15,600 1,075,425
Lowe's Companies, Inc. ..................... 21,700 805,613
-----------
4,315,725
-----------
Retail--Drug--1.6%
CVS Corp. .................................... 24,500 1,255,625
-----------
</TABLE>
See Notes to Financial Statements
17
<PAGE>
Institutional Growth Stock Portfolio
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
Telecommunications Equipment--3.3%
Cisco Systems, Inc. (b) ............... 18,600 $ 1,248,525
Motorola, Inc. ........................ 17,000 1,292,000
------------
2,540,525
------------
Tobacco--2.2%
Philip Morris Companies, Inc. ......... 38,800 1,721,750
------------
Utility--Telephone--3.8%
GTE Corp. .............................. 17,800 780,975
SBC Communications, Inc. ............... 13,600 841,500
Sprint Corp. ........................... 23,800 1,252,475
------------
2,874,950
------------
TOTAL COMMON STOCKS
(Identified cost $55,806,616) .................. 69,553,336
------------
FOREIGN COMMON STOCKS--6.9%
Cosmetics & Soaps--1.9%
Unilever NV (Netherlands) ............ 6,600 1,438,800
------------
Healthcare--Drugs--1.4%
Elan PLC Sponsored ADR (Ireland) (b) ... 25,000 1,131,250
------------
Oil Service & Equipment--1.7%
Elf Aquitane Sponsored ADR (France) ... 24,000 1,306,500
------------
Telecommunications Equipment--1.9%
Nokia Corp. Sponsored ADR (Finland) ... 19,500 1,438,125
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $4,299,222)..................... 5,314,675
------------
TOTAL LONG-TERM INVESTMENTS--97.5%
(Identified cost $60,105,838) .................. 74,868,011
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- -------- ------------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--6.5%
Commercial Paper--6.5%
McKenna Triangle National
Corp. 6.25%, 7-1-97 ...... A-1+ $2,300 $ 2,300,000
Preferred Receivables
Funding Corp. 5.57%,
7-1-97 .................. A-1 1,705 1,705,000
Southwestern Bell
Telephone Co. 6.15%,
7-1-97 .................. A-1+ 1,020 1,020,000
--------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $5,025,000) ..................... 5,025,000
--------------
TOTAL INVESTMENTS--104.0%
(Identified cost $65,130,838) .................. 79,893,011(a)
Cash and receivables, less liabilities--(4.0%) (3,084,012)
--------------
NET ASSETS--100.0% .............................. $ 76,808,999
==============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $15,261,177 and gross
depreciation of $571,563 for income tax purposes. At June 30, 1997, the
aggregate cost of securities for federal income tax purposes was
$65,203,397.
(b) Non-income producing.
See Notes to Financial Statements
18
<PAGE>
Institutional Growth Stock Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $65,130,838) $79,893,011
Cash 7,166
Receivables
Investment securities sold 4,515,183
Dividends and interest 95,583
Fund shares sold 55,920
------------
Total assets 84,566,863
------------
Liabilities
Payables
Investment securities purchased 1,654,733
Fund shares repurchased 6,006,233
Investment advisory fee 41,334
Financial agent fee 5,096
Distribution fee 4,081
Transfer agent fee 3,010
Trustees' fee 779
Accrued expenses 42,598
------------
Total liabilities 7,757,864
------------
Net Assets $76,808,999
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $48,682,087
Undistributed net investment loss (108,996)
Accumulated net realized gain 13,473,735
Net unrealized appreciation 14,762,173
------------
Net Assets $76,808,999
============
Class X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $57,587,149) 1,275,203
Net asset value and offering price per share $45.16
Class Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $19,221,850) 425,520
Net asset value and offering price per share $45.17
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Dividends $ 520,268
Interest 169,682
------------
Total investment income 689,950
------------
Expenses
Investment advisory fee 283,141
Distribution fee--Class Y 27,575
Financial agent fee 30,745
Transfer agent 26,367
Registration 23,202
Custodian 11,068
Professional 7,466
Trustees 6,788
Printing 2,142
Miscellaneous 6,254
------------
Total expenses 424,748
Less expenses borne by investment adviser (66,842)
------------
Net expenses 357,906
------------
Net investment income 332,044
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 13,300,006
Net realized loss on foreign currency transactions (132)
Net change in unrealized appreciation (depreciation)
on investments (1,544,974)
------------
Net gain on investments 11,754,900
------------
Net increase in net assets resulting from
operations $12,086,944
============
</TABLE>
See Notes to Financial Statements
19
<PAGE>
Institutional Growth Stock Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended From Inception
June 30, 1997 March 1, 1996 to
(Unaudited) December 31, 1996
--------------- ------------------
<S> <C> <C>
From Operations
Net investment income $ 332,044 $ 930,570
Net realized gain 13,299,874 28,236,436
Net change in unrealized appreciation (depreciation) (1,544,974) (12,435,676)
------------- --------------
Increase in net assets resulting from operations 12,086,944 16,731,330
------------- --------------
From Distributions to Shareholders
Net investment income--Class X (410,294) (835,353)
Net investment income--Class Y (97,399) (86,185)
Net realized gains--Class X (10,155,575) (12,433,098)
Net realized gains--Class Y (3,084,783) (2,389,027)
------------- --------------
Decrease in net assets from distributions to shareholders (13,748,051) (15,743,663)
------------- --------------
From Share Transactions
Class X
Proceeds from sales of shares (83,541 and 200,121 shares, respectively) 4,143,930 9,732,878
Net asset value of shares issued from reinvestment of distributions (231,641 and
275,344 shares, respectively) 10,565,159 13,268,434
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account S (0 and 3,807,589 shares, respectively) -- 182,803,604
Cost of shares repurchased (784,747 and 2,538,286 shares, respectively) (38,434,352) (124,359,905)
------------- --------------
Total (23,725,263) 81,445,011
------------- --------------
Class Y
Proceeds from sales of shares (25,487 and 68,980 shares, respectively) 1,268,612 3,405,171
Net asset value of shares issued from reinvestment of distributions (69,754 and
51,358 shares, respectively) 3,182,172 2,475,206
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account S (0 and 493,631 shares, respectively) -- 23,699,396
Cost of shares repurchased (154,198 and 129,492 shares, respectively) (7,971,872) (6,295,994)
------------- --------------
Total (3,521,088) 23,283,779
------------- --------------
Increase (decrease) in net assets from share transactions (27,246,351) 104,728,790
------------- --------------
Net increase (decrease) in net assets (28,907,458) 105,716,457
Net Assets
Beginning of period 105,716,457 0
------------- --------------
End of period (including undistributed net investment income (loss) of
($108,996) and $66,653, respectively) $ 76,808,999 $ 105,716,457
============= ==============
</TABLE>
See Notes to Financial Statements
20
<PAGE>
Institutional Growth Stock Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class X Class Y
---------------------------------- ---------------------------------
Six Months Six Months
Ended From Inception Ended From Inception
6/30/97 3/1/96 to 6/30/97 3/1/96 to
(Unaudited) 12/31/96 (Unaudited) 12/31/96
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 47.42 $ 48.01 $ 47.43 $ 48.01
Income from investment operations(6)
Net investment income 0.26(4) 0.34(4) 0.18(5) 0.18(5)
Net realized and unrealized gain (loss) 6.51 4.89 6.51 4.95
---------- ---------- ---------- ----------
Total from investment operations 6.77 5.23 6.69 5.13
---------- ---------- ---------- ----------
Less distributions
Dividends from net investment income (0.35) (0.30) (0.27) (0.19)
Distributions from net realized gains (8.68) (5.52) (8.68) (5.52)
---------- ---------- ---------- ----------
Total distributions (9.03) (5.82) (8.95) (5.71)
---------- ---------- ---------- ----------
Change in net asset value (2.26) (0.59) (2.26) (0.58)
---------- ---------- ---------- ----------
Net asset value, end of period $ 45.16 $ 47.42 $ 45.17 $ 47.43
========== ========== ========== ==========
Total return 14.08%(2) 10.71%(2) 13.95%(2) 10.48%(2)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 57,587 $ 82,739 $ 19,222 $ 22,978
Ratio to average net assets of:
Operating expenses 0.70%(1) 0.70%(1) 0.95%(1) 0.95%(1)
Net investment income 0.76%(1) 0.65%(1) 0.52%(1) 0.39%(1)
Portfolio turnover 64%(2) 99%(2) 64%(2) 99%(2)
Average commission rate paid(3) $ 0.0522 $ 0.0543 $ 0.0522 $ 0.0543
</TABLE>
(1) Annualized
(2) Not annualized
(3) A fund is required to disclose its average commission rate per share for
securities trades on which commissions are charged. This rate generally
does not reflect mark-ups, mark-downs, or spreads on shares traded on a
principal basis.
(4) Includes reimbursement of operating expenses by investment adviser of $0.03
and $0.04, respectively.
(5) Includes reimbursement of operating expenses by investment adviser of $0.03
and $0.04, respectively.
(6) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from
anticipated results depending on the time of share purchases and
redemptions.
See Notes to Financial Statements
21
<PAGE>
INSTITUTIONAL MONEY MARKET PORTFOLIO
INVESTMENT ADVISER'S REPORT
As of June 30, 1997, the seven-day current yield was 5.24% for Class X
shares and 4.99% for Class Y shares. These results compare favorably with the
IBC Money Fund Average of 4.97% as reported by IBC's Money Fund Report.*
Current yield is a seven-day annualized yield computed by dividing the average
net income earned per share during the seven days preceding the date of
calculation by the average daily net asset value per share for the same period
multiplied by 365.
The fixed-income market experienced significant swings in interest rates
during the first half of 1997. The first quarter was dominated by strong
economic growth, strong payroll numbers and strong consumer confidence data.
The Federal Reserve's decision to tighten monetary policy in late March was
long-awaited and much debated. In the second quarter economic releases began to
support a slower growth scenario, while the inflation environment remained
contained. High cash levels in the short-term market and lack of new issues, as
well as the unlikelihood of a further Fed tightening of monetary policy, caused
interest rates to fall.
The Portfolio's average maturity was kept slightly shorter during the
first three months of the year as a defensive strategy. In the second quarter,
we gradually lengthened the average maturity to neutral so that the Portfolio
would be well-positioned should rates move in either direction. We continued to
emphasize high-quality commercial paper and variable-rate instruments to
enhance yield. The average credit quality remains A1/P1.
OUTLOOK
Looking forward, we continue to anticipate a volatile fixed-income market.
Recent economic data has supported a slowdown in activity, but many key areas
remain quite strong. Resurgence of economic activity, especially in consumer-
related segments, is likely to place the market on alert for higher interest
rates.
Our emphasis will continue to be credit quality, focusing on higher
yielding issues, such as commercial paper and variable-rate instruments. Given
the uncertainty in the market, we will maintain a neutral position and be
monitoring any movement in rates or shifts in yield spreads to identify
attractive trading opportunities.
* The IBC Money Fund Average is an average of "first tier" taxable
money-market funds as reported in IBC's Money Fund Report.
22
<PAGE>
Institutional Money Market Portfolio
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Face
Amount Interest Maturity
(000) Description Rate Date Value
- -------- ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
FEDERAL AGENCY SECURITIES--5.1%
500 Federal Home Loan Banks ...... 5.78% 01/28/98 500,000
-----------
Reset
Date
-------
FEDERAL AGENCY SECURITIES--VARIABLE--32.6% (b)
1,500 Student Loan Marketing
Assoc. (final maturity
11/24/97) ..................... 5.24 07/01/97 1,500,000
1,000 Student Loan Marketing
Assoc. (final maturity
02/22/99) ..................... 5.27 07/01/97 1,000,000
700 Federal National Mortgage
Assoc. (final maturity
12/14/98) ..................... 5.29 09/14/97 699,440
-----------
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE 3,199,440
-----------
</TABLE>
<TABLE>
<CAPTION>
Standard
& Poor's Maturity
Rating Date
----------- ----------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER--67.1%
435 Donnelly (R.R.) &
Sons Co. ............ A-1 6.25 07/01/97 435,000
275 AlliedSignal, Inc. .. A-1 5.55 07/07/97 274,746
235 AlliedSignal, Inc. .. A-1 5.56 07/07/97 234,782
385 Southwestern Bell
Telephone Co. ...... A-1+ 5.60 07/07/97 384,641
265 Du Pont (E.I.) de
Nemours & Co. ...... A-1+ 5.60 07/08/97 264,711
200 Goldman Sachs &
Co. ............... A-1+ 5.55 07/08/97 199,784
150 Preferred
Receivables
Funding Corp. ...... A-1 5.65 07/09/97 149,812
200 Coca-Cola Co. ...... A-1+ 5.55 07/10/97 199,722
225 Preferred
Receivables
Funding Corp. ...... A-1 5.57 07/14/97 224,547
</TABLE>
<TABLE>
<CAPTION>
Face Standard
Amount & Poor's Interest Maturity
(000) Description Rating Rate Date Value
- -------- --------------------- ---------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER--continued
250 Private Export
Funding Corp. ...... A-1+ 5.53% 07/14/97 $ 249,501
255 Private Export
Funding Corp. ...... A-1+ 5.56 07/14/97 254,488
500 Receivables Capital
Corp. ............... A-1+ 5.57 07/15/97 498,917
250 General Electric
Capital Corp. ...... A-1+ 5.55 07/22/97 250,000
300 Colgate-Palmolive
Co. ............... A-1 5.52 07/28/97 298,758
250 General Electric
Capital Corp. ...... A-1+ 5.55 07/31/97 248,844
250 Enterprise Funding
Corp. ............... A-1+ 5.71 08/20/97 248,017
295 Beta Finance, Inc. A-1+ 5.30 08/26/97 292,568
200 Schering Corp. ...... A-1+ 5.65 09/09/97 197,803
250 CXC, Inc. ......... A-1+ 5.60 09/10/97 247,239
200 Merrill Lynch &
Co., Inc. ......... A-1+ 5.70 09/17/97 197,530
250 Greenwich Funding
Corp. ............... A-1+ 5.60 09/22/97 246,772
250 Greenwich Funding
Corp. ............... A-1+ 5.65 09/22/97 246,743
250 Goldman Sachs &
Co. ............... A-1+ 5.61 10/09/97 246,104
250 Corporate
Receivables
Corp. ............... A-1 5.75 10/24/97 245,408
255 Enterprise Funding
Corp. ............... A-1+ 5.69 02/27/98 245,287
----------------
TOTAL COMMERCIAL PAPER .................................... 6,581,724
----------------
TOTAL INVESTMENTS--104.8%
(Identified cost $10,281,164) ............................. 10,281,164(a)
Cash and receivables, less liabilities--(4.8%) ........... (471,014)
----------------
NET ASSETS--100.0% ........................................ $ 9,810,150
================
</TABLE>
(a) Federal Income Tax Information: At June 30, 1997, the aggregate cost of
securities was the same for book and tax purposes.
(b) Variable rate demand notes. The interest rates shown reflect the rate
currently in effect.
See Notes to Financial Statements
23
<PAGE>
Institutional Money Market Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $10,281,164) $10,281,164
Cash 8,068
Receivables
Fund shares sold 53,440
Interest 29,669
Receivable from adviser 12,996
------------
Total assets 10,385,337
------------
Liabilities
Payables
Fund shares repurchased 525,513
Dividend distributions 8,739
Financial agent fee 3,865
Transfer agent fee 3,111
Trustees' fee 815
Distribution fee 291
Accrued expenses 32,853
------------
Total liabilities 575,187
------------
Net Assets $ 9,810,150
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 9,810,150
------------
Net Assets $ 9,810,150
============
Class X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $8,274,880) 8,274,880
Net asset value and offering price per share $1.00
Class Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,535,270) 1,535,270
Net asset value and offering price per share $1.00
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 346,277
----------
Total investment income 346,277
----------
Expenses
Investment advisory fee 15,782
Distribution fee--Class Y 2,137
Financial agent fee 23,307
Transfer agent 23,630
Registration 23,113
Trustees 7,023
Professional 6,579
Custodian 6,328
Printing 3,459
Miscellaneous 3,443
----------
Total expenses 114,801
Less expenses borne by investment adviser (90,569)
----------
Net expenses 24,232
----------
Net investment income 322,045
----------
Net increase in net assets resulting from
operations $ 322,045
==========
</TABLE>
See Notes to Financial Statements
24
<PAGE>
Institutional Money Market Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended From Inception
June 30, 1997 March 1, 1996 to
(Unaudited) December 31, 1996
--------------- ------------------
<S> <C> <C>
From Operations
Net investment income $ 322,045 $ 563,801
------------- -------------
Increase in net assets resulting from operations 322,045 563,801
------------- -------------
From Distributions to Shareholders
Net investment income--Class X (280,396) (454,271)
Net investment income--Class Y (41,649) (109,530)
------------- -------------
Decrease in net assets from distributions to shareholders (322,045) (563,801)
------------- -------------
From Share Transactions
Class X
Proceeds from sales of shares (5,361,102 and 17,010,234 shares, respectively) 5,361,102 17,010,234
Net asset value of shares issued from reinvestment of distributions
(273,649 and 438,107 shares, respectively) 273,649 438,107
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account G (0 and 8,106,057 shares, respectively) -- 8,106,057
Cost of shares repurchased (12,541,402 and 10,372,867 shares, respectively) (12,541,402) (10,372,867)
------------- -------------
Total (6,906,651) 15,181,531
------------- -------------
Class Y
Proceeds from sales of shares (481,561 and 2,849,561 shares, respectively) 481,561 2,849,561
Net asset value of shares issued from reinvestment of distributions
(41,668 and 105,240 shares, respectively) 41,668 105,240
Net asset value of shares issued in conjunction with conversion of PHL
Pooled Separate Account G (0 and 2,666,813 shares, respectively) -- 2,666,813
Cost of shares repurchased (1,117,613 and 3,491,960 shares, respectively) (1,117,613) (3,491,960)
------------- -------------
Total (594,384) 2,129,654
------------- -------------
Increase (decrease) in net assets from share transactions (7,501,035) 17,311,185
------------- -------------
Net increase (decrease) in net assets (7,501,035) 17,311,185
Net Assets
Beginning of period 17,311,185 0
------------- -------------
End of period $ 9,810,150 $ 17,311,185
============= =============
</TABLE>
See Notes to Financial Statements
25
<PAGE>
Institutional Money Market Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class X Class Y
---------------------------------- ---------------------------------
Six Months Six Months
Ended From Inception Ended From Inception
6/30/97 3/1/96 to 6/30/97 3/1/96 to
(Unaudited) 12/31/96 (Unaudited) 12/31/96
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.026(1) 0.043(1) 0.024(2) 0.040(2)
---------- ---------- ---------- ----------
Total from investment operations 0.026 0.043 0.024 0.040
---------- ---------- ---------- ----------
Less distributions
Dividends from net investment income (0.026) (0.043) (0.024) (0.040)
---------- ---------- ---------- ----------
Change in net asset value -- -- -- --
---------- ---------- ---------- ----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ==========
Total return 2.58%(4) 4.34%(4) 2.45%(4) 4.11%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 8,275 $ 15,182 $ 1,535 $ 2,130
Ratio to average net assets of:
Operating expenses 0.35%(3) 0.35%(3) 0.60%(3) 0.60%(3)
Net investment income 5.14%(3) 5.08%(3) 4.87%(3) 4.84%(3)
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of less
than $0.01.
(2) Includes reimbursement of operating expenses by investment adviser of less
than $0.01.
(3) Annualized
(4) Not annualized
See Notes to Financial Statements
26
<PAGE>
INSTITUTIONAL U.S. GOVERNMENT SECURITIES PORTFOLIO
INVESTMENT ADVISER'S REPORT
For the six-month reporting period, Class X shares provided a total return
of 2.89% and Class Y shares returned 2.72%, performing in line with its
benchmark, the Lehman Brothers 1-2.99 Year Government Bond Index, which earned
2.88%.* All performance figures assume reinvestment of dividends and are net of
fees.
Favorable market conditions prevailed during the last half of the
reporting period as market participants benefited from lower volatility and
solid fundamental credit conditions. Fixed-income investors were rewarded for
taking incremental credit risk as the credit-sensitive and mortgage sectors
were among the top performers.
As spreads between Treasuries and mortgages widened, we began adding to
our weighting in mortgage-backed securities, which contributed significantly to
performance. The Portfolio contains both premium and discount securities
because no single sector of the mortgage-backed securities market currently
appears most attractive. Our focus is on identifying issues that are
inefficiently priced and provide the highest yield.
OUTLOOK
The bond market is likely to remain quite volatile given the current
uncertainty over the strength of the economy and the outlook for inflation. We
will continue to monitor yield spreads between Treasuries and agency
mortgage-backed issues to determine the best value.
Duration will be kept equal to its benchmark to minimize interest rate
surprises. As always, we will continue to conservatively manage the Portfolio,
emphasizing those sectors that we believe possess the best risk/reward
potential.
* The Lehman Brothers 1-2.99 Year Government Bond Index is an unmanaged,
commonly used measure of total return performance of short-term government
securities.
27
<PAGE>
Institutional U.S. Government Securities Portfolio
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- -------- -------------------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES--91.0%
U.S. Treasury Notes--41.6%
U.S. Treasury Notes 5.875%, '98 ..................... AAA $ 250 $ 249,688
U.S. Treasury Notes 5.875%, '99 ..................... AAA 500 498,825
U.S. Treasury Notes 6%, '99 ........................ AAA 1,500 1,497,480
U.S. Treasury Notes 6.25%, '02 ..................... AAA 750 745,544
U.S. Treasury Notes 6.50%, '06 ..................... AAA 500 497,555
---------------
3,489,092
---------------
Agency Mortgage-Backed Securities--49.4%
FHLMC 4.75%, '11 .................................... AAA 31 30,830
FNMA 5.75%, '02 .................................... AAA 129 128,364
FNMA 5.25%, '13 .................................... AAA 2,000 1,987,620
FNMA 5.50%, '14 .................................... AAA 2,000 1,990,680
---------------
4,137,494
---------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $7,611,793) ............................................. 7,626,586
---------------
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- -------- -------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--5.4%
Chicago Public Building Taxable
7%, '07 (b) ....................................... AAA $ 450 $ 454,712
---------------
TOTAL MUNICIPAL BONDS
(Identified cost $447,770) ............................................... 454,712
---------------
TOTAL LONG-TERM INVESTMENTS--96.4%
(Identified cost $8,059,563) ............................................ 8,081,298
---------------
SHORT-TERM OBLIGATIONS--7.0%
Federal Agency Securities--7.0%
Student Loan Marketing Assoc. 6%, 7-1-97 ........................ 585 585,000
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $585,000) ....................................... 585,000
---------------
TOTAL INVESTMENTS--103.4%
(Identified cost $8,644,563) .................................... 8,666,298(a)
Cash and receivables, less liabilities--(3.4%) ...... (283,229)
---------------
NET ASSETS--100.0% ....................................................... $ 8,383,069
===============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $30,736 and gross
depreciation of $9,001 for income tax purposes. At June 30, 1997, the
aggregate cost of securities for federal income tax purposes was
$8,644,563.
(b) These municipal bonds are fully defeased by U.S. Government Treasury
Obligations.
See Notes to Financial Statements
28
<PAGE>
Institutional U.S. Government Securities Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $8,644,563) $8,666,298
Receivables
Interest 53,908
Receivable from adviser 2,926
Fund shares sold 34
-----------
Total assets 8,723,166
-----------
Liabilities
Payables
Custodian 2,101
Fund shares repurchased 297,370
Financial agent fee 6,740
Transfer agent fee 3,541
Distribution fee 977
Trustees' fee 561
Accrued expenses 28,807
-----------
Total liabilities 340,097
-----------
Net Assets $8,383,069
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $8,565,312
Undistributed net investment income 825
Accumulated net realized loss (204,803)
Net unrealized appreciation 21,735
-----------
Net Assets $8,383,069
===========
Class X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $3,595,956) 272,315
Net asset value and offering price per share $13.21
Class Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $4,787,113) 362,827
Net asset value and offering price per share $13.19
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 225,311
----------
Total investment income 225,311
----------
Expenses
Investment advisory fee 12,031
Distribution fee--Class Y 4,632
Financial agent fee 40,663
Registration 21,754
Transfer agent 21,114
Professional 7,859
Trustees 6,670
Printing 3,440
Custodian 1,351
Miscellaneous 1,133
----------
Total expenses 120,647
Less expenses borne by investment adviser (99,974)
----------
Net expenses 20,673
----------
Net investment income 204,638
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 37,804
Net change in unrealized appreciation (depreciation)
on investments (8,859)
----------
Net gain on investments 28,945
----------
Net increase in net assets resulting from
operations $ 233,583
==========
</TABLE>
See Notes to Financial Statements
29
<PAGE>
Institutional U.S. Government Securities Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended From Inception
June 30, 1997 March 1, 1996 to
(Unaudited) December 31, 1996
--------------- ------------------
<S> <C> <C>
From Operations
Net investment income $ 204,638 $ 467,991
Net realized gain (loss) 37,804 (236,317)
Net change in unrealized appreciation (depreciation) (8,859) 193,233
------------ ------------
Increase in net assets resulting from operations 233,583 424,907
------------ ------------
From Distributions to Shareholders
Net investment income--Class X (94,826) (297,193)
Net investment income--Class Y (108,987) (170,798)
In excess of net investment income--Class X -- (33,911)
In excess of net investment income--Class Y -- (19,488)
------------ ------------
Decrease in net assets from distributions to shareholders (203,813) (521,390)
------------ ------------
From Share Transactions
Class X
Proceeds from sales of shares (17,882 and 68,722 shares, respectively) 237,210 922,793
Net asset value of shares issued from reinvestment of distributions (7,178 and
21,717 shares, respectively) 94,825 285,465
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account U (0 and 826,222 shares, respectively) -- 11,033,355
Cost of shares repurchased (112,708 and 556,698 shares, respectively) (1,495,113) (7,465,688)
------------ ------------
Total (1,163,078) 4,775,925
------------ ------------
Class Y
Proceeds from sales of shares (133,458 and 199,852 shares, respectively) 1,770,334 2,672,950
Net asset value of shares issued from reinvestment of distributions (8,257 and
14,474 shares, respectively) 108,985 190,283
Net asset value of shares issued in conjunction with conversion of PHL Pooled
Separate Account U (0 and 150,065 shares, respectively) -- 2,003,966
Cost of shares repurchased (51,182 and 92,097 shares, respectively) (675,403) (1,234,180)
------------ ------------
Total 1,203,916 3,633,019
------------ ------------
Increase in net assets from share transactions 40,838 8,408,944
------------ ------------
Net increase in net assets 70,608 8,312,461
Net Assets
Beginning of period 8,312,461 0
------------ ------------
End of period (including undistributed net investment income of
$825 and $0, respectively) $ 8,383,069 $ 8,312,461
============ ============
</TABLE>
See Notes to Financial Statements
30
<PAGE>
Institutional U.S. Government Securities Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class X Class Y
----------------------------------------- -----------------------------------------
Six Months Six Months
Ended From Inception Ended From Inception
6/30/97 3/1/96 to 6/30/97 3/1/96 to
(Unaudited) 12/31/96 (Unaudited) 12/31/96
-------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.15 $ 13.35 $ 13.14 $ 13.35
Income from investment operations(6)
Net investment income 0.35(3)(4) 0.62(3)(4) 0.31(3)(5) 0.59(3)(5)
Net realized and unrealized gain (loss) 0.03 0.02 0.05 0.01
---------- ---------- ---------- ----------
Total from investment operations 0.38 0.64 0.36 0.60
---------- ---------- ---------- ----------
Less distributions
Dividends from net investment income (0.32) (0.75) (0.31) (0.73)
In excess of net investment income -- (0.09) -- (0.08)
---------- ---------- ---------- ----------
Total distributions (0.32) (0.84) (0.31) (0.81)
---------- ---------- ---------- ----------
Change in net asset value 0.06 (0.20) 0.05 (0.21)
---------- ---------- ---------- ----------
Net asset value, end of period $ 13.21 $ 13.15 $ 13.19 $ 13.14
========== ========== ========== ==========
Total return 2.89%(2) 4.86%(2) 2.72%(2) 4.56%(2)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 3,596 $ 4,734 $ 4,787 $ 3,578
Ratio to average net assets of:
Operating expenses 0.40%(1) 0.40%(1) 0.65%(1) 0.65%(1)
Net investment income 5.20%(1) 5.58%(1) 4.99%(1) 5.32%(1)
Portfolio turnover 92%(2) 175%(2) 92%(2) 175%(2)
</TABLE>
(1) Annualized
(2) Not annualized
(3) Computed using average shares outstanding.
(4) Includes reimbursement of operating expenses by investment adviser of $0.16
and $0.19, respectively.
(5) Includes reimbursement of operating expenses by investment adviser of $0.16
and $0.19, respectively.
(6) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from
anticipated results depending on the time of share purchases and
redemptions.
See Notes to Financial Statements
31
<PAGE>
INSTITUTIONAL ENHANCED RESERVES PORTFOLIO
INVESTMENT ADVISER'S REPORT
For the six months ended June 30, Class X shares provided a total return
of 2.87% and Class Y shares returned 2.74%, slightly lagging the benchmark, the
Merrill Lynch 1-Year Treasury Bill Index, which earned 2.94%.* All performance
figures assume reinvestment of dividends and are net of fees.
The first quarter was dominated by strong economic growth, strong payroll
numbers and strong consumer confidence data. Interest rates increased across
the maturity spectrum in anticipation of a vigilant Fed dampening the threat of
rampant inflation. The interest rate pendulum shifted in the second quarter as
economic releases began to support a slower growth scenario with continued low
inflation numbers, sending interest rates lower and prices higher.
Despite the recent rally, the short-term yield curve, as measured by the
spread between the three-month Treasury bill and the two-year Treasury note,
steepened from 68 to 89 basis points in the first half. Even with the
Portfolio's slightly shorter duration, the shift in the yield curve plus our
overweighting in floating-rate issues, which had mixed results, limited
performance. Asset-backed securities performed well, which helped performance
as did our overweighting in high-quality, short-term corporate issues.
OUTLOOK
Looking forward, we continue to anticipate a volatile fixed-income market.
Recent economic data has supported a slowdown in activity, but many key areas
remain quite strong. The market has removed the premium embedded for a further
Federal Reserve tightening of monetary policy, making interest rate levels
appear low.
Resurgence of economic activity, especially in consumer-related segments,
is likely to place the market on alert for higher interest rates. Therefore, we
intend to maintain a duration slightly shorter than the benchmark. We will
continue to emphasize issues with strong relative value versus Treasuries to
enhance portfolio yield.
* The Merrill Lynch 1-Year Treasury Bill Index is an unmanaged, commonly used
measure of short-term government bond total return performance.
32
<PAGE>
Institutional Enhanced Reserves Portfolio
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES--15.3%
Agency Mortgage-Backed Securities--15.3%
FNMA 6.50%, '04 ........................... Aaa $4,950 4,891,219
FNMA 7.822%, '20 (b) ..................... Aaa 1,400 1,471,198
FNMA 8%, '26 .............................. Aaa 4,887 5,005,474
------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $11,337,126) ................................... 11,367,891
------------
NON-CONVERTIBLE BONDS--81.7%
Asset-Backed Securities--61.9%
Amresco 97-2, A9 5.898%, '27
(b) .................................... Aaa 2,000 1,999,688
Case Equipment Loan Trust
94-C, A2 8.10%, '01 ..................... Aaa 2,403 2,436,362
CIT RV Trust 96-A, A 5.40%,
'11 .................................... Aaa 1,873 1,847,218
Citibank Credit Card Master
Trust I 96-6, A 5.933%,
'08 (b) ................................. Aaa 2,000 2,000,600
Contimortgage Home Equity
Loan Trust 97-3, A10
5.898%, '28 (b) ........................ Aaa 2,000 1,999,375
Discover Card Master Trust
96-4, A 6.063%, '13 (b) .................. Aaa 2,500 2,549,175
First Chicago Master Trust 93-F,
5.988%, '00 (b) ........................ Aaa 2,000 2,006,760
First Plus Home Loan 96-2, A1
6.80%, '05 .............................. Aaa 3,189 3,195,781
Fleetwood Credit Corp. 93-A, A
6%, '08 ................................. Aaa 2,109 2,098,410
Ford Credit Grantor Trust 95-A,
A 5.90%, '00 ........................... Aaa 1,103 1,106,362
Green Tree Financial Corp.
96-8, A2 6.55%, '27 ..................... Aaa 3,000 3,014,070
Green Tree Home Improvement
96-A, A1 5.70%, '26 ..................... Aaa 695 695,842
Green Tree Home Improvement
97-A, 5.878%, '27 (b) .................. AAA(c) 2,835 2,831,488
Household Affinity Credit Card
Master 97-1, A 5.788%,
'04 (b) ................................. AAA(c) 2,500 2,498,500
Household Consumer Loan 96-2,
A2, 6.008%, '06 (b) ..................... Aa 3,000 3,005,400
MBNA Master Credit Card 94-B,
A 5.684%, '02 (b) ........................ Aaa 2,500 2,508,025
Student Loan Marketing Assoc.
97-A1, 5.53%, '05 (b) .................. Aaa 3,000 2,996,250
</TABLE>
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- --------------------
<S> <C> <C> <C>
Asset-Backed Securities--continued
Student Loan Marketing Assoc.
97-2, A1 5.576%, '05 (b) ......... Aaa $1,450 $ 1,446,375
The Money Store Home Equity
Trust 96-C, A1 6.70%, '08 ......... Aaa 1,877 1,880,092
The Money Store Home Equity
Trust 95-A, A7 6.27%, '25 (b) Aaa 2,273 2,285,548
Western Financial Grantor 95-2,
A1 7.10%, '00 ..................... Aaa 1,521 1,539,837
----------------
45,941,158
----------------
Banks--6.6%
Chase Capital II 6.359%,
'27 (b) ........................... Aa 2,500 2,437,575
Northern Trust Capital 6.336%,
'27 (b) ........................... A 2,500 2,463,900
----------------
4,901,475
----------------
Broker-Dealers--3.4%
Morgan Stanley Group MTNC
5.851%, '98 (b) .................. A 2,500 2,500,000
----------------
Diversified Financial Services--3.4%
General Motors Acceptance
Corp. 5.977%, '02 (b) ............ A 2,500 2,495,300
----------------
Non-Agency Mortgage-Backed Securities--3.6%
Independent National Mortgage
Corp. 96-E, A2 6.93%, '26 ......... Aaa 2,702 2,685,395
----------------
Retail--2.8%
Sears Roebuck Co. 8.45%, '98 ...... A 2,000 2,058,548
----------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $60,548,398) .............................. 60,581,876
----------------
TOTAL LONG-TERM INVESTMENTS--97.0%
(Identified cost $71,885,524) .............................. 71,949,767
----------------
SHORT-TERM OBLIGATIONS--2.5%
Repurchase Agreement-2.5%
State Street Repurchase Agreement 5.15%
dated 6/30/97 due 7/1/97, repurchase
price $1,854,265, collateralized by U.S.
Treasury Note 6%, 5/31/98, market value
$1,893,064.................................... 1,854 1,854,000
----------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,854,000) .............................. 1,854,000
----------------
TOTAL INVESTMENTS--99.5%
(Identified cost $73,739,524) .............................. 73,803,767(a)
Cash and receivables, less liabilities--0.5% ............ 351,998
----------------
NET ASSETS--100.0% .......................................... $ 74,155,765
================
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $156,314 and gross
depreciation of $92,071 for income tax purposes. At June 30, 1997, the
aggregate cost of securities for income tax purposes was $73,739,524.
(b) Variable or step coupon; interest rate shown reflects the rate currently in
effect.
(c) As rated by Standard & Poor's.
See Notes to Financial Statements
33
<PAGE>
Institutional Enhanced Reserves Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $73,739,524) $ 73,803,767
Cash 68,850
Receivables
Interest 409,906
------------
Total assets 74,282,523
------------
Liabilities
Payables
Dividend distributions 74,621
Financial agent fee 9,835
Investment advisory fee 4,688
Transfer agent fee 3,295
Trustees' fee 1,110
Distribution fee 656
Accrued expenses 32,553
------------
Total liabilities 126,758
------------
Net Assets $ 74,155,765
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 74,496,669
Undistributed net investment income 13,193
Accumulated net realized loss (418,340)
Net unrealized appreciation 64,243
------------
Net Assets $ 74,155,765
============
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $72,174,989) 7,258,389
Net asset value and offering price per share $9.94
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,980,776) 199,272
Net asset value and offering price per share $9.94
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 3,181,135
-----------
Total investment income 3,181,135
-----------
Expenses
Investment advisory fee 122,816
Distribution fee--Class Y 2,481
Financial agent fee 40,663
Registration 25,040
Transfer agent 16,799
Professional 11,181
Custodian 7,058
Trustees 5,145
Printing 3,405
Miscellaneous 136
-----------
Total expenses 234,724
Less expenses borne by investment adviser (58,253)
-----------
Net expenses 176,471
-----------
Net investment income 3,004,664
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss on securities (20,387)
Net change in unrealized appreciation (depreciation)
on investments (155,789)
-----------
Net loss on investments (176,176)
-----------
Net increase in net assets resulting from
operations $ 2,828,488
===========
</TABLE>
See Notes to Financial Statements
34
<PAGE>
Institutional Enhanced Reserves Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended From Inception
June 30, 1997 July 19, 1996 to
(Unaudited) December 31, 1996
---------------- ------------------
<S> <C> <C>
From Operations
Net investment income $ 3,004,664 $ 3,138,403
Net realized loss (20,387) (212,416)
Net change in unrealized appreciation (depreciation) (155,789) 278,680
-------------- --------------
Increase in net assets resulting from operations 2,828,488 3,204,667
-------------- --------------
From Distributions to Shareholders
Net investment income--Class X (2,948,573) (3,113,690)
Net investment income--Class Y (56,091) (7,637)
-------------- --------------
Decrease in net assets from distributions to shareholders (3,004,664) (3,121,327)
-------------- --------------
From Share Transactions
Class X
Proceeds from sales of shares (14,620,505 and 18,754,392 shares, respectively) 145,347,082 186,663,642
Net asset value of shares issued from reinvestment of distributions (294,305 and 291,631
shares, respectively) 2,924,717 2,902,589
Net asset value of shares issued in conjunction with the acquisition of Duff & Phelps
Enhanced Reserves Fund (0 and 13,730,413 shares, respectively) -- 136,554,593
Cost of shares repurchased (19,915,383 and 20,517,474 shares, respectively) (197,932,388) (204,195,925)
-------------- --------------
Total (49,660,589) 121,924,899
-------------- --------------
Class Y
Proceeds from sales of shares (58,551 and 150,567 shares, respectively) 581,997 1,500,150
Net asset value of shares issued from reinvestment of distributions (4,332 and 585
shares, respectively) 43,042 5,827
Cost of shares repurchased (14,763 and 0 shares, respectively) (146,725) --
-------------- --------------
Total 478,314 1,505,977
-------------- --------------
Increase (decrease) in net assets from share transactions (49,182,275) 123,430,876
-------------- --------------
Net increase (decrease) in net assets (49,358,451) 123,514,216
Net Assets
Beginning of period 123,514,216 0
-------------- --------------
End of period (including undistributed net investment income of $13,193 and
$13,193, respectively) $ 74,155,765 $ 123,514,216
============== ==============
</TABLE>
See Notes to Financial Statements
35
<PAGE>
Institutional Enhanced Reserves Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class X Class Y
---------------------------------- ---------------------------------
Six Months Six Months
Ended From Inception Ended From Inception
6/30/97 7/19/96 to 6/30/97 11/1/96 to
(Unaudited) 12/31/96 (Unaudited) 12/31/96
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.95 $ 9.95 $ 9.95 $ 9.97
Income from investment operations(5)
Net investment income 0.29(3) 0.26(3) 0.28(4) 0.09(4)
Net realized and unrealized gain (loss) (0.01) -- (0.01) (0.02)
--------- --------- --------- ---------
Total from investment operations 0.28 0.26 0.27 0.07
--------- --------- --------- ---------
Less distributions
Dividends from net investment income (0.29) (0.26) (0.28) (0.09)
Distributions from net realized gains -- -- -- --
--------- --------- --------- ---------
Total distributions (0.29) (0.26) (0.28) (0.09)
--------- --------- --------- ---------
Change in net asset value (0.01) -- (0.01) (0.02)
--------- --------- --------- ---------
Net asset value, end of period $ 9.94 $ 9.95 $ 9.94 $ 9.95
========= ========= ========= =========
Total return 2.87%(2) 2.57%(2) 2.74%(2) 0.71%(2)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 72,175 $ 122,010 $ 1,981 $ 1,504
Ratio to average net assets of:
Operating expenses 0.34%(1) 0.34%(1) 0.59%(1) 0.59%(1)
Net investment income 5.88%(1) 5.68%(1) 5.65%(1) 5.58%(1)
Portfolio turnover 70%(2) 122%(2) 70%(2) 122%(2)
</TABLE>
(1) Annualized
(2) Not annualized
(3) Includes reimbursement of operating expenses by investment adviser of $0.01
and less than $0.01, respectively.
(4) Includes reimbursement of operating expenses by investment adviser of $0.01
and less than $0.01, respectively.
See Notes to Financial Statements
36
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Duff & Phelps Institutional Mutual Funds (the "Fund") is organized
as a Massachusetts business trust and is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. To date, seven Portfolios are offered for sale: Balanced
Portfolio, Managed Bond Portfolio, Growth Stock Portfolio, Money Market
Portfolio, U.S. Government Securities Portfolio, Enhanced Reserves Portfolio,
and Real Estate Equity Securities Portfolio. The Real Estate Equity Securities
Portfolio is reported separately from these financial statements.
Each Portfolio has distinct investment objectives. The Balanced Portfolio
seeks to provide reasonable income, long-term capital growth and conservation of
capital. The Managed Bond Portfolio seeks to generate a high level of current
income and capital appreciation. The Growth Stock Portfolio seeks long-term
appreciation of capital. The Money Market Portfolio seeks to provide as high a
level of current income consistent with capital preservation and liquidity. The
U.S. Government Securities Portfolio seeks a high level of current income by
investing in U.S. Government guaranteed or backed securities. The Enhanced
Reserves Portfolio seeks to provide high current income consistent with
preservation of capital.
Each Portfolio offers both Class X and Class Y shares. Both classes of
shares have identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that Class Y bears distribution expenses and
has exclusive voting rights with respect to its distribution plan. Income and
expenses of each Portfolio are borne pro rata by the holders of both classes of
shares, except that Class X bears no distribution expenses.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. Security valuation:
Equity securities are valued at the last sale price, or if there had been
no sale that day, at the last bid price. Debt securities are valued on the
basis of broker quotations or valuations provided by a pricing service which
utilizes information with respect to recent sales, market transactions in
comparable securities, quotations from dealers, and various relationships
between securities in determining value. Short-term investments having a
remaining maturity of 60 days or less are valued at amortized cost which
approximates market. All other securities and assets are valued at their fair
value as determined in good faith by or under the direction of the Trustees.
The Money Market Portfolio uses the amortized cost method of security
valuation which, in the opinion of the Trustees, represents the fair value of
the particular security. The Trustees monitor the deviations between the
classes' net asset value per share as determined by using available market
quotations and its amortized cost per share. If the deviation exceeds 1/2 of
1%, the Board of Trustees will consider what action, if any, should be
initiated to provide a fair valuation. This valuation procedure allows each
class of the Portfolio to maintain a constant net asset value of $1 per share.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date or, in the case of certain foreign securities,
as soon as the Portfolio is notified. Interest income is recorded on the
accrual basis. The Fund does not amortize premiums except for the Money Market
Portfolio and Enhanced Reserves Portfolio, but does amortize discounts using
the effective interest method. Realized gains and losses are determined on the
identified cost basis.
C. Income taxes:
Each of the Portfolios is treated as a separate taxable entity. It is the
policy of each Portfolio in the Fund to comply with the requirements of the
Internal Revenue Code (the "Code"), applicable to regulated investment
companies, and to distribute substantially all of its taxable income to its
shareholders. In addition, each Portfolio intends to distribute an amount
sufficient to avoid imposition of any excise tax under Section 4982 of the
Code. Therefore, no provision for federal income taxes or excise taxes has been
made.
D. Distributions to shareholders:
Distributions are recorded by each Portfolio on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends,
non-deductible expenses, foreign currency gain/loss, partnerships, and losses
deferred due to wash sales and excise tax regulations. Permanent book and tax
basis differences relating to shareholder distributions will result in
reclassifications to paid in capital.
37
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited) (Continued)
E. Foreign currency translation:
Foreign securities, other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at
the trade date. The gain or loss resulting from a change in currency exchange
rates between the trade and settlement dates of a portfolio transaction is
treated as a gain or loss on foreign currency. Likewise, the gain or loss
resulting from a change in currency exchange rates between the date income is
accrued and paid is treated as a gain or loss on foreign currency. The Fund
does not separate that portion of the results of operations arising from
changes in exchange rates and that portion arising from changes in the market
prices of securities.
F. Forward currency contracts:
Each of the Portfolios, except U.S. Government Securities Portfolio and
Money Market Portfolio, may enter into forward currency contracts in
conjunction with the planned purchase or sale of foreign denominated securities
in order to hedge the U.S. dollar cost or proceeds. Forward currency contracts
involve, to varying degrees, elements of market risk in excess of the amount
recognized in the statement of assets and liabilities. Risks arise from the
possible movements in foreign exchange rates or if the counterparty does not
perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in
market value is recorded by each Portfolio as an unrealized gain (or loss).
When the contract is closed or offset, the Portfolio records a realized gain
(or loss) equal to the change in the value of the contract when it was opened
and the value at the time it was closed or offset.
G. Futures contracts:
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. A Portfolio may enter into financial
futures contracts as a hedge against anticipated changes in the market value of
their portfolio securities. Upon entering into a futures contract the Portfolio
is required to pledge to the broker an amount of cash and/or securities equal
to the "initial margin" requirements of the futures exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as variation margin
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The potential risk to a Portfolio is that the
change in value of the futures contract may not correspond to the change in
value of the hedged instruments.
H. Options:
Each Portfolio may write covered options or purchase options contracts for
the purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.
Each Portfolio will realize a gain or loss upon the expiration or closing
of the option transaction. Gains and losses on written options are reported
separately in the Statement of Operations. When a written option is exercised,
the proceeds on sales or amounts paid are adjusted by the amount of premium
received. Options written are reported as a liability in the Statement of
Assets and Liabilities and subsequently marked-to-market to reflect the current
value of the option. The risk associated with written options is that the
change in value of options contracts may not correspond to the change in value
of the hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, or if a liquid secondary market does not
exist for the contracts.
Each Portfolio may purchase options which are included in the Portfolio's
Schedule of Investments and subsequently marked-to-market to reflect the
current value of the option. When a purchased option is exercised, the cost of
the security is adjusted by the amount of premium paid. The risk associated
with purchased options is limited to the premium paid.
I. Expenses:
Expenses incurred by the Fund with respect to any two or more Portfolios
are allocated in proportion to the net assets of each Portfolio, except where
allocation of direct expense to each Portfolio or an alternative allocation
method can be more fairly made.
J. When-Issued and delayed delivery transactions:
Each Portfolio may engage in when-issued or delayed delivery transactions.
The Portfolios record when-issued securities on the trade date and maintain
collateral for the securities purchased. Securities purchased on a when-issued
or delayed delivery basis begin earning interest on the settlement date.
38
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited) (Continued)
NOTE 2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Advisers, Phoenix
Investment Counsel, Inc. ("PIC"), an indirect majority-owned subsidiary of
Phoenix Home Life Mutual Insurance Company ("PHL") and Duff & Phelps Management
Co. ("DPM"), a subsidiary of Phoenix Duff & Phelps Corporation, are entitled to
a fee based upon the following annual rates as a percentage of the average
daily net assets of each separate Portfolio:
<TABLE>
<CAPTION>
1st $1+
Portfolio Adviser $1 Billion Billion
- ------------------------------- --------- ------------ --------
<S> <C> <C> <C>
Balanced Portfolio ......... PIC 0.55% 0.50%
Managed Bond Portfolio ...... PIC 0.45% 0.40%
Growth Stock Portfolio ...... PIC 0.60% 0.55%
Money Market Portfolio ...... PIC 0.25% 0.20%
U.S. Government Securities
Portfolio .................. PIC 0.30% 0.25%
Enhanced Reserves Portfolio DPM 0.24% 0.19%
</TABLE>
PIC has voluntarily agreed to assume total fund operating expenses of each
Portfolio it advises, excluding interest, taxes, brokerage fees, commissions
and extraordinary expenses until December 31, 2001, to the extent that such
expenses exceed the following percentages of average annual net assets:
<TABLE>
<CAPTION>
Class X Class Y
--------- --------
<S> <C> <C>
Balanced Portfolio ......... 0.65% 0.90%
Managed Bond Portfolio ...... 0.55% 0.80%
Growth Stock Portfolio ...... 0.70% 0.95%
Money Market Portfolio ...... 0.35% 0.60%
U.S. Government
Securities Portfolio ...... 0.40% 0.65%
</TABLE>
DPM has voluntarily agreed to reimburse or waive total fund operating
expenses of the Enhanced Reserves Portfolio, excluding interest, taxes,
brokerage fees, commissions and extraordinary expenses until December 31, 1997,
to the extent that such expenses exceed 0.34% and 0.59%, respectively, of the
average annual net assets of Class X and Y, respectively.
Phoenix Equity Planning Corporation ("PEPCO"), an indirect majority-owned
subsidiary of PHL, serves as the national distributor of the Fund's shares.
Each Portfolio pays PEPCO a distribution fee of an annual rate of 0.25% for
Class Y shares applied to the average daily net assets of that class. The
distributor has advised the Portfolio that of the total amount expensed for the
six months ended June 30, 1997, $12,126 was earned by the Distributor, $11,379
was earned by unaffiliated participants, and $34,562 was paid to W.S. Griffith,
an indirect subsidiary of PHL.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.03% of the average
daily net assets of each Portfolio through December 31, 1996, and starting on
January 1, 1997, at an annual rate of 0.05% of average daily net assets up to
$100 million, 0.04% of average daily net assets of $100 million to $300
million, 0.03% of average daily net assets of $300 million through $500
million, and 0.015% of average daily net assets greater than $500 million; a
minimum fee may apply. PEPCO serves as the Fund's Transfer Agent with State
Street Bank and Trust Company as sub-transfer agent. For the six months ended
June 30, 1997, transfer agent fees were $138,596 of which PEPCO retained $148
which is net of fees paid to State Street.
At June 30, 1997, PHL and affiliates held Portfolio shares which
aggregated the following:
<TABLE>
<CAPTION>
Aggregate
Net Asset
Shares Value
----------- ------------
<S> <C> <C>
Balanced Portfolio-Class X ......... 169,482 $ 3,215,074
Balanced Portfolio-Class Y ......... 6,350 120,523
Managed Bond Portfolio-Class X ...... 1,826,413 62,024,985
Managed Bond Portfolio-Class Y ...... 3,298 112,066
Growth Stock Portfolio-Class X ...... 3 135
Growth Stock Portfolio-Class Y ...... 2,787 125,889
Money Market Portfolio-Class X ...... 106 106
Money Market Portfolio-Class Y ...... 106,582 106,582
U.S. Government Securities Portfolio-
Class X ........................... 8 106
U.S. Government Securities Portfolio-
Class Y ........................... 8,142 107,393
</TABLE>
NOTE 3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the six months ended June 30,
1997 (excluding U.S. Government and agency securities and short-term
securities) aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
------------- ------------
<S> <C> <C>
Balanced Portfolio ...... $26,569,201 $41,494,398
Managed Bond Portfolio ... 49,397,535 37,193,661
Growth Stock Portfolio ... 57,054,523 95,780,102
Enhanced Reserves
Portfolio ............... 39,281,496 54,872,283
</TABLE>
Purchases and sales of U.S. Government and agency securities during the
six months ended June 30, 1997, aggregated the following:
39
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited) (Continued)
<TABLE>
<CAPTION>
Purchases Sales
------------- ------------
<S> <C> <C>
Balanced Portfolio ...... $ 9,072,734 $ 8,889,043
Managed Bond Portfolio ... 20,880,997 22,625,227
U.S. Government
Securities Portfolio ... 7,743,766 6,944,333
Enhanced Reserves
Portfolio ............... 23,587,852 32,241,950
</TABLE>
At June 30, 1997, the Balanced Portfolio had outstanding written options
as follows:
<TABLE>
<CAPTION>
Shares
Subject Expiration Exercise Market
Call Options to Call Date Price Value
- -------------------------- --------- ------------ ---------- --------
<S> <C> <C> <C> <C>
Bristol-Myers Squibb Co. 1,600 7/97 $ 80.00 $ 5,200
Colgate-Palmolive Co. ... 4,000 7/97 70.00 250
Eli Lilly & Co. ......... 1,600 7/97 105.00 9,400
Intel Corp. ............ 700 7/97 90.00 44
International Business
Machines Corp. ...... 1,800 7/97 90.00 5,400
PepsiCo, Inc. ......... 5,600 7/97 40.00 1,400
Procter & Gamble Co. ... 1,200 7/97 150.00 525
T. Rowe Price Associates 2,000 7/97 55.00 2,000
--------
$24,219
========
</TABLE>
Written option activity for the six months ended June 30, 1997 aggregated
the following:
<TABLE>
<CAPTION>
Balanced Portfolio Call Options
- ------------------------------- --------------------------
Number of Amount
Options of Premiums
----------- ------------
<S> <C> <C>
Options outstanding at
December 31, 1996 ......... -- $ --
Options written ............... 193 26,471
Options canceled in closing
purchase transactions ...... (8) (2,776)
Options expired ............... -- --
Options exercised ............ -- --
----- ---------
Options outstanding at
June 30, 1997 ............... 185 $ 23,695
===== =========
</TABLE>
NOTE 4. MERGERS
The Fund commenced operations on March 1, 1996, other than the Enhanced
Reserves Portfolio which became available for sale on July 19, 1996 following
the tax-free reorganization of the Duff & Phelps Enhanced Reserves Fund with
the Phoenix Duff & Phelps Institutional Enhanced Reserves Portfolio.
Prior to March 1, 1996, the Portfolios, other than Enhanced Reserves
Portfolio, existed as separate accounts of Phoenix Home Life Mutual Insurance
Company ("PHL"). Upon commencement of operations, the net assets of each
separate account were transferred into the corresponding Portfolio of the Fund
in a tax-free exchange for an equal number of shares of that Portfolio, other
than the Money Market Portfolio which issued 33,828 shares for each unit of the
separate account. The number of shares and dollars issued are listed in each
Portfolio's Statement of Changes in Net Assets.
The net assets of each Portfolio before and after the reorganization are
as follows:
<TABLE>
<CAPTION>
Before After
---------- -------------
<S> <C> <C>
Balanced Portfolio ......... $100,100 $ 58,215,721
Managed Bond Portfolio ... 100,100 66,796,561
Growth Stock Portfolio ... 100,100 206,603,100
Money Market Portfolio ... 100,100 10,872,970
U.S. Government
Securities Portfolio ... 100,100 13,137,421
Enhanced Reserves
Portfolio ............... -- 136,554,593
</TABLE>
NOTE 5. CAPITAL LOSS CARRYOVERS
At June 30, 1997, the Portfolios had available for federal income tax
purposes unused capital losses as follows:
<TABLE>
<CAPTION>
Expiring in
2003 2004
---------- ---------
<S> <C> <C>
U.S. Government
Securities Portfolio ... $ -- $235,004
Enhanced Reserves
Portfolio ............... 189,419 128,718
</TABLE>
For the Enhanced Reserves Portfolio, capital loss carryovers include
$189,419 acquired in connection with the merger of the Duff & Phelps Enhanced
Reserves Fund.
NOTE 6. OTHER
As of June 30, 1997, the Portfolios had shareholders who each individually
owned more than 10% of shares outstanding, none of whom are affiliated with PHL
or PDP as follows. In addition, affiliate holdings are presented in the table
located within Note 2.
<TABLE>
<CAPTION>
Number of % of Total
shareholders shares outstanding
-------------- -------------------
<S> <C> <C>
Balanced Portfolio ...... 1 19.3%
Managed Bond Portfolio ... 2 26.9%
Growth Stock Portfolio 3 39.6%
Money Market Portfolio ... 3 61.4%
U.S. Government
Securities Portfolio ... 3 46.0%
Enhanced Reserves
Portfolio ............ 3 58.0%
</TABLE>
40
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
C. Duane Blinn
Robert Chesek
E. Virgil Conway
William W. Crawford
Harry Dalzell-Payne
William N. Georgeson
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Eileen A. Moran
Everett L. Morris
James M. Oates
Richard A. Pavia
Calvin J. Pedersen
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
William J. Newman, Senior Vice President
James D. Wehr, Senior Vice President
Marvin E. Flewellen, Vice President
William E. Keen, III, Vice President/Assistant Secretary
Christopher J. Kelleher, Vice President
Thomas S. Melvin, Jr., Vice President
William R. Moyer, Vice President
Scott C. Noble, Vice President
C. Edwin Riley, Vice President
Barbara Rubin, Vice President
Leonard J. Saltiel, Vice President
Julie L. Sapia, Vice President
Michael Schatt, Vice President
Dorothy J. Skaret, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Advisers
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
Duff & Phelps Investment Management Co.
(Enhanced Reserves Portfolio)
55 East Monroe Street
Suite 3800
Chicago, Illinois 60603
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Custodians
The Chase Manhattan Bank
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
State Street Bank and Trust Company
(Enhanced Reserves Portfolio)
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective Prospectus which includes information
concerning the Fund's record and other pertinent information.
41
<PAGE>
[BACK COVER]
----------------
Phoenix Duff & Phelps Institutional Mutual Funds BULK RATE MAIL
PO Box 2200 U.S. POSTAGE
Enfield CT 06083-2200 PAID
SPRINGFIELD, MA
PERMIT NO. 444
----------------
[LOGO] PHOENIX
DUFF & PHELPS
PDP 091 (8/97)
<PAGE>
[LOGO] PHOENIX
DUFF & PHELPS
PHOENIX DUFF & PHELPS
INSTITUTIONAL MUTUAL FUNDS
REAL ESTATE EQUITY SECURITIES PORTFOLIO
SEMIANNUAL REPORT
JUNE 30, 1997
<PAGE>
REAL ESTATE EQUITY SECURITIES PORTFOLIO
INVESTMENT ADVISER'S REPORT
Since the Portfolio's inception on May 1, 1997, both Class X and Class
Y shares generated total returns of 6.40% compared with the NAREIT Equity Total
Return Index* return of 7.93%. All performance figures assume reinvestment of
dividends and are net of fees.
Our investment strategy is to emphasize market sectors with strong
underlying fundamentals and prospects for growth in excess of market averages as
well as sectors that are significantly undervalued on a risk-adjusted basis. The
Portfolio benefited from its significant overweighting in hotel and office
REITs.
Real estate securities experienced a minor correction in the beginning
of the year, then recovered slightly over the last two months. Performance was
impacted by several factors. First, there was a tremendous volume of
capital-raising activity, which put downward pressure on prices. In addition, a
rise in interest rates resulted in dividend yields that, other than for two
brief periods in 1991 and 1994, were below 10-year Treasury yields for the first
time since 1989. On a weighted average basis, REIT total return dropped 2.06%
from year-end through April, and then experienced a modest recovery in May and
June. The recovery was, in part, supported by very strong operational
performance. First-quarter growth in funds from operation (FFO) was well above
industry analyst expectations, and second-quarter results are also expected to
be better-than-projected.
OUTLOOK
The outlook for REITs for the remainder of 1997 remains very strong for
a number of reasons. First, the underlying real estate market continues to
evidence stability, with construction levels in most markets trailing expected
demand growth. Second, funds from operations multiples -- comparable to a P/E
ratio for non-REITs -- are in line with historic levels and well below the
broader market P/E ratios. Third, dividend yields, albeit below pre-1996 levels,
are higher than at year-end 1996 and provide a very attractive benefit relative
to the broader market. As of June 30, 1997, the average dividend yield for REITs
was 6.06% compared with a yield of only 1.87% for the S&P 500 Index. Finally,
both individual and institutional investor demand is expected to continue to
expand. We intend to maintain the Portfolio's emphasis on mixed
office/industrial and hotel REITs, which we believe have good upside potential,
and remain underweighted in the retail sector.
* The NAREIT Equity Total Return Index is a market-weighted total return of all
tax-qualified REITs listed on the New York Stock Exchange, American Stock
Exchange and the NASDAQ National Market System.
1
<PAGE>
Real Estate Equity Securities Portfolio
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
---------- ----------
<S> <C> <C> <C>
COMMON STOCKS 98.8%
REAL ESTATE INVESTMENT TRUSTS 98.5%
COMMERCIAL 42.7%
Office/Industrial 42.7%
Arden Realty Group, Inc. 15,500 $ 403,000
Boston Properties, Inc. 1,000 27,500
CenterPoint Properties Corp. 13,400 425,450
Crescent Real Estate Equities Co. 25,000 793,750
First Industrial Realty Trust, Inc. 18,500 541,125
Great Lakes REIT, Inc. 20,000 328,750
Highwoods Properties, Inc. 18,900 604,800
Reckson Associates Realty Corp. 21,000 483,000
TriNet Corporate Realty Trust, Inc. 15,100 499,244
Weeks Corp. 16,300 509,375
------------
4,615,994
------------
DIVERSIFIED 0.9%
Colonial Properties Trust 3,300 96,938
------------
HEALTH CARE 4.5%
Nationwide Health Properties, Inc. 22,200 488,400
------------
HOTELS 17.3%
Patriot American Hospitality, Inc. 29,300 747,150
Starwood Lodging Trust 18,500 789,719
Sunstone Hotel Investors, Inc. 22,600 327,700
------------
1,864,569
------------
RESIDENTIAL 15.3%
Apartments 15.3%
Bay Apartment Communities, Inc. 12,700 469,900
Equity Residential Properties Trust 13,700 650,750
Essex Property Trust, Inc. 16,500 530,062
------------
1,650,712
------------
RETAIL 17.8%
Community/Neighborhood 8.1%
Developers Diversified Realty Corp. 12,000 480,000
Vornado Realty Trust 5,500 396,688
------------
876,688
------------
Factory Outlet 2.0%
Chelsea G.C.A. Realty, Inc. 5,700 216,600
------------
Regional Malls 7.7%
The Macerich Company 14,800 410,700
Urban Shopping Centers, Inc. 13,300 423,937
------------
834,637
------------
TOTAL RETAIL 1,927,925
------------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(Identified cost $10,130,723) 10,644,538
------------
</TABLE>
See Notes to Financial Statements
2
<PAGE>
Real Estate Equity Securities Portfolio
- --------------------------------------------------------------------------------
INVESTMENTS AT JUNE 30, 1997 (Continued)
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C> <C>
REAL ESTATE OPERATING COMPANIES 0.3%
Office/Industrial 0.3%
Crescent Operating, Inc. (b) 2,500 $ 30,000
------------
TOTAL REAL ESTATE OPERATING COMPANIES
(Identified cost $43,125)
30,000
------------
TOTAL COMMON STOCKS
(Identified cost $10,173,848)
10,674,538
------------
TOTAL INVESTMENTS 98.8%
(Identified cost $10,173,848)
10,674,538 (a)
Cash and receivables, less liabilities 1.2%
131,133
------------
NET ASSETS 100.0% $10,805,671
============
</TABLE>
(a) Federal income tax information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $558,279 and gross
depreciation of $57,589 for federal income tax purposes. At June 30, 1997,
the aggregate cost of securities for federal income tax purposes was
$10,173,848.
(b) Non-income producing
See Notes to Financial Statements
3
<PAGE>
Real Estate Equity Securities Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $10,173,848) $10,674,538
Cash 72,761
Receivables
Investment securities sold 98,297
Dividends 86,083
Receivable from adviser 17,417
Prepaid expenses 53,475
------------
Total assets 11,002,571
------------
Liabilities
Payables
Investment securities purchased 171,128
Financial agent fee 6,740
Transfer agent fee 3,393
Administration fee 2,415
Trustees' fee 1,296
Distribution fee 21
Accrued expenses 11,907
------------
Total liabilities 196,900
------------
Net Assets $10,805,671
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $10,155,743
Undistributed net investment income 141,231
Accumulated net realized gain 8,007
Net unrealized appreciation 500,690
------------
Net Assets $10,805,671
============
Class X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $10,699,142) 1,005,559
Net asset value and offering price per share $10.64
Class Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $106,529) 10,015
Net asset value and offering price per share $10.64
</TABLE>
See Notes to Financial Statements
4
<PAGE>
Real Estate Equity Securities Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FROM INCEPTION MAY 1, 1997
TO JUNE 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Dividends $146,882
Interest 8,952
------------
Total investment income 155,834
------------
Expenses
Investment advisory fee 8,090
Distribution fee - Class Y 41
Financial agent fee 13,704
Administration fee 2,415
Registration 10,660
Transfer agent 7,417
Professional 4,592
Printing 4,106
Custodian 1,989
Trustees 1,296
Miscellaneous 819
------------
Total expenses 55,129
Less expenses borne by investment adviser (40,526)
------------
Net expenses 14,603
------------
Net investment income 141,231
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 8,007
Net change in unrealized appreciation (depreciation) on
investments 500,690
------------
Net gain on investments 508,697
------------
Net increase in net assets resulting from operations $649,928
============
</TABLE>
See Notes to Financial Statements
5
<PAGE>
Real Estate Equity Securities Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
May 1, 1997 to
June 30, 1997
(Unaudited)
----------------
<S> <C>
From Operations
Net investment income $ 141,231
Net realized gain 8,007
Net change in unrealized appreciation (depreciation) 500,690
------------
Increase in net assets resulting from operations 649,928
------------
From Distributions to Shareholders
Net investment income - Class X -
Net investment income - Class Y -
------------
Decrease in net assets from distributions
to shareholders -
------------
From Share Transactions
Class X
Proceeds from sales of shares (1,005,559 shares) 10,055,594
Net asset value of shares issued from reinvestment of
distributions (0 shares) -
Cost of shares repurchased (0 shares) -
------------
Total 10,055,594
------------
Class Y
Proceeds from sales of shares (10,015 shares) 100,149
Net asset value of shares issued from reinvestment of
distributions (0 shares) -
Cost of shares repurchased (0 shares) -
------------
Total 100,149
------------
Increase in net assets from share transactions 10,155,743
------------
Net increase in net assets 10,805,671
Net Assets
Beginning of period 0
------------
End of period (including undistributed net investment
income of $141,231) $10,805,671
============
</TABLE>
See Notes to Financial Statements
6
<PAGE>
Real Estate Equity Securities Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class X Class Y
-------------- --------------
From Inception From Inception
5/1/97 to 5/1/97 to
6/30/97 6/30/97
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Net asset value, beginning of period $10.00 $10.00
Income from investment operations
Net investment income 0.14 (1) 0.14 (1)
Net realized and unrealized gain 0.50 0.50
------------ ------------
Total from investment operations 0.64 0.64
------------ ------------
Less distributions
Dividends from net investment income - -
Dividends from net realized gains - -
------------ ------------
Total distributions - -
------------ ------------
Change in net asset value 0.64 0.64
------------ ------------
Net asset value, end of period $10.64 $10.64
============ ============
Total return 6.40% (3) 6.40% (3)
Ratios/supplemental data:
Net assets, end of period (thousands) $10,699 $107
Ratio to average net assets of:
Operating expenses 0.90% (2) 1.15% (2)
Net investment income 8.73% (2) 8.26% (2)
Portfolio turnover 2% (3) 2% (3)
Average commission rate paid $0.0500 (4) $0.0500 (4)
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of $0.04
and $0.04, respectively, computed using average shares outstanding.
(2) Annualized
(3) Not annualized
(4) A fund is required to disclose its average commission rate per share for
securities trades on which commissions are charged. This rate generally
does not reflect mark-ups, mark-downs or spreads on shares traded on a
principal basis.
See Notes to Financial Statements
7
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
REAL ESTATE EQUITY SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Duff & Phelps Institutional Mutual Funds (the "Fund") is
organized as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. Seven Portfolios are presently offered for sale: Balanced Portfolio,
Managed Bond Portfolio, Growth Stock Portfolio, Money Market Portfolio, U.S.
Government Securities Portfolio, Enhanced Reserves Portfolio and Real Estate
Equity Securities Portfolio. This report only covers the Real Estate Equity
Securities Portfolio (the "Portfolio"). The Portfolio's investment objective is
capital appreciation and income with approximately equal emphasis through
investing, under normal circumstances, primarily in marketable securities of
publicly-traded real estate investment trusts (REITS) and companies that invest
in, operate, develop and/or manage real estate located in the United States.
The Portfolio offers both Class X and Class Y shares. Both classes of
shares have identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that Class Y bears distribution expenses and
has exclusive voting rights with respect to its distribution plan. Income and
expenses of the Portfolio are borne pro rata by the holders of both classes of
shares, except that Class X bears no distribution expenses.
The following is a summary of significant accounting policies
consistently followed by the Portfolio in the preparation of its financial
statements. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets, liabilities, revenues and
expenses. Actual results could differ from those estimates.
A. Security valuation:
Equity securities are valued at the last sale price, or if there has
been no sale that day, at the last bid price. Short-term investments having a
remaining maturity of 60 days or less are valued at amortized cost which
approximates market.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. The Portfolio does not amortize premiums but does amortize discounts
using the effective interest method. Realized gains or losses are determined on
the identified cost basis.
C. Income taxes:
The Portfolio is treated as a separate taxable entity. It is the policy
of the Portfolio to comply with the requirements of the Internal Revenue Code
(the "Code"), applicable to regulated investment companies, and to distribute
substantially all of its taxable income to its shareholders. In addition, the
Portfolio intends to distribute an amount sufficient to avoid imposition of any
excise tax under Section 4982 of the Code. Therefore, no provision for federal
income taxes or excise taxes has been made.
D. Distributions to shareholders:
Distributions are recorded by the Portfolio on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, non-deductible
expenses, foreign currency gain/loss, partnerships and losses deferred due to
wash sales and excise tax regulations. Permanent book and tax basis differences
relating to shareholder distributions will result in reclassifications to paid
in capital.
8
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
REAL ESTATE EQUITY SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited) (Continued)
E. Expenses:
Expenses incurred by the Fund with respect to any two or more
Portfolios are allocated in proportion to the net assets of each Portfolio,
except where allocation of direct expense to each Portfolio or an alternative
allocation method can be more fairly made.
F. Repurchase agreements:
A repurchase agreement is a transaction where a Portfolio acquires a
security for cash and obtains a simultaneous commitment from the seller to
repurchase the security at an agreed upon price and date. The Portfolio, through
its custodian, takes possession of securities collateralizing the repurchase
agreement. The collateral is marked to market daily to ensure that the market
value of the underlying assets remains sufficient to protect the Portfolio in
the event of default by the seller. If the seller defaults and the value of the
collateral declines or, if the seller enters insolvency proceedings, realization
of collateral may be delayed or limited.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Portfolio, the Adviser, Phoenix
Realty Securities, Inc., an indirect wholly-owned subsidiary of Phoenix Home
Life Mutual Insurance Company ("PHL"), is entitled to a fee based on an annual
rate of 0.50% of the average daily net assets of the Portfolio. The Adviser has
agreed to reimburse the Portfolio to the extent that total expenses exceed 0.90%
and 1.15% of the average daily net assets of Class A and Class B, respectively.
Phoenix Equity Planning Corporation ("PEPCO"), an indirect
majority-owned subsidiary of PHL, serves as the national distributor of the
Fund's shares. The Portfolio pays PEPCO a distribution fee of an annual rate of
0.25% for Class Y shares applied to the average daily net assets of that class.
As Financial Agent to the Portfolio, PEPCO receives a fee for
bookkeeping and pricing services at an annual rate of 0.05% of average daily net
assets up to $100 million, 0.04% of average daily net assets from $100 million
through $300 million, 0.03% of average daily net assets from $300 million
through $500 million and 0.015% of average daily net assets greater than $500
million; a minimum fee may apply.
Duff & Phelps Investment Management Co. ("DPM") serves as administrator
for the Portfolio, and as such, facilitates and provides administrative
services. DPM is a subsidiary of Phoenix Duff & Phelps Corporation, which is an
indirect less than wholly-owned subsidiary of PHL. As compensation, under an
Administration Agreement, DPM receives a fee at the annual rate of 0.15% of the
average daily net assets of the Portfolio.
PEPCO serves as the Portfolio's Transfer Agent with State Street Bank
and Trust Company as sub-transfer agent. For the period ended June 30, 1997,
transfer agent fees were $7,417 which were all paid to State Street.
As of June 30, 1997, PHL owned 490,000 Class X shares with a value of
$5,213,600 and 10,000 Class Y shares with a value of $106,400. The PHL Employee
Defined Benefit Pension Plan owned 515,545 Class X shares with a value of
$5,485,394.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the period ended June 30,
1997, were $10,353,760 and $187,919, respectively. There were no purchases or
sales of U.S. Government and agency securities.
9
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL REAL ESTATE EQUITY SECURITIES PORTFOLIO
101 Munson Street
Greenfield, Massachusetts 01301
Trustees Investment Adviser
C. Duane Blinn Phoenix Realty Securities, Inc.
Robert Chesek 38 Prospect Street
E. Virgil Conway Hartford, Connecticut 06115-0479
William W. Crawford
Harry Dalzell-Payne Principal Underwriter
William N. Georgeson Phoenix Equity Planning Corporation
Francis E. Jeffries 100 Bright Meadow Boulevard
Leroy Keith, Jr. P. O. Box 2200
Philip R. McLoughlin Enfield, Connecticut 06083-2200
Eileen A. Moran
Everett L. Morris Custodian
James M. Oates State Street Bank and Trust Company
Richard A. Pavia P. O. Box 351
Calvin J. Pedersen Boston, Massachusetts 02101
Philip R. Reynolds
Herbert Roth, Jr. Transfer Agent
Richard E. Segerson Phoenix Equity Planning Corporation
Lowell P. Weicker, Jr. 100 Bright Meadow Boulevard
P. O. Box 2200
Enfield, Connecticut 06083-2200
Officers
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
William J. Newman, Senior Vice President
James D. Wehr, Senior Vice President
Marvin E. Flewellen, Vice President
William E. Keen, III, Vice President/Assistant Secretary
Christopher J. Kelleher, Vice President
Thomas S. Melvin, Jr., Vice President
William R. Moyer, Vice President
Scott C. Noble, Vice President
C. Edwin Riley, Vice President
Barbara Rubin, Vice President
Leonard J. Saltiel, Vice President
Julie L. Sapia, Vice President
Michael Schatt, Vice President
Dorothy J. Skaret, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
This report is not authorized for distribution to prospective investors in the
Phoenix Duff & Phelps Institutional Real Estate Equity Securities Portfolio
unless preceded or accompanied by an effective Prospectus which includes
information concerning the Portfolio's record and other pertinent information.
10
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 017
<NAME> PDP INSTITUTIONAL BALANCED PORTFOLIO CL X
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 34013
<INVESTMENTS-AT-VALUE> 36547
<RECEIVABLES> 309
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36856
<PAYABLE-FOR-SECURITIES> 47
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2437
<TOTAL-LIABILITIES> 2484
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28033
<SHARES-COMMON-STOCK> 1392
<SHARES-COMMON-PRIOR> 2047
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (3)
<ACCUMULATED-NET-GAINS> 3808
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2534
<NET-ASSETS> 34372
<DIVIDEND-INCOME> 139
<INTEREST-INCOME> 605
<OTHER-INCOME> 0
<EXPENSES-NET> (144)
<NET-INVESTMENT-INCOME> 600
<REALIZED-GAINS-CURRENT> 3913
<APPREC-INCREASE-CURRENT> (407)
<NET-CHANGE-FROM-OPS> 4106
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (514)
<DISTRIBUTIONS-OF-GAINS> (1047)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 97
<NUMBER-OF-SHARES-REDEEMED> (833)
<SHARES-REINVESTED> 82
<NET-CHANGE-IN-ASSETS> (10742)
<ACCUMULATED-NII-PRIOR> 42
<ACCUMULATED-GAINS-PRIOR> 1234
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 247
<AVERAGE-NET-ASSETS> 40698
<PER-SHARE-NAV-BEGIN> 18.15
<PER-SHARE-NII> 0.40
<PER-SHARE-GAIN-APPREC> 1.51
<PER-SHARE-DIVIDEND> (0.36)
<PER-SHARE-DISTRIBUTIONS> (0.73)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.97
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 018
<NAME> PDP INSTITUTIONAL BALANCED PORTFOLIO CL Y
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 34013
<INVESTMENTS-AT-VALUE> 36547
<RECEIVABLES> 309
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36856
<PAYABLE-FOR-SECURITIES> 47
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2437
<TOTAL-LIABILITIES> 2484
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28033
<SHARES-COMMON-STOCK> 420
<SHARES-COMMON-PRIOR> 662
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (3)
<ACCUMULATED-NET-GAINS> 3808
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2534
<NET-ASSETS> 34372
<DIVIDEND-INCOME> 139
<INTEREST-INCOME> 605
<OTHER-INCOME> 0
<EXPENSES-NET> (144)
<NET-INVESTMENT-INCOME> 600
<REALIZED-GAINS-CURRENT> 3913
<APPREC-INCREASE-CURRENT> (407)
<NET-CHANGE-FROM-OPS> 4106
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (130)
<DISTRIBUTIONS-OF-GAINS> (292)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 35
<NUMBER-OF-SHARES-REDEEMED> (299)
<SHARES-REINVESTED> 22
<NET-CHANGE-IN-ASSETS> (4042)
<ACCUMULATED-NII-PRIOR> 42
<ACCUMULATED-GAINS-PRIOR> 1234
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 247
<AVERAGE-NET-ASSETS> 40698
<PER-SHARE-NAV-BEGIN> 18.15
<PER-SHARE-NII> 0.36
<PER-SHARE-GAIN-APPREC> 1.53
<PER-SHARE-DIVIDEND> (0.33)
<PER-SHARE-DISTRIBUTIONS> (0.73)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.98
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 027
<NAME> PDP INSTITUTIONAL MANAGED BOND PORTFOLIO CL X
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 84344
<INVESTMENTS-AT-VALUE> 85192
<RECEIVABLES> 1614
<ASSETS-OTHER> 673
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 87479
<PAYABLE-FOR-SECURITIES> 7602
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 728
<TOTAL-LIABILITIES> 8330
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 76561
<SHARES-COMMON-STOCK> 2174
<SHARES-COMMON-PRIOR> 2104
<ACCUMULATED-NII-CURRENT> 65
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1674
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 849
<NET-ASSETS> 79149
<DIVIDEND-INCOME> 213
<INTEREST-INCOME> 2745
<OTHER-INCOME> 0
<EXPENSES-NET> (217)
<NET-INVESTMENT-INCOME> 2741
<REALIZED-GAINS-CURRENT> 1672
<APPREC-INCREASE-CURRENT> (1392)
<NET-CHANGE-FROM-OPS> 3021
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2536)
<DISTRIBUTIONS-OF-GAINS> (279)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 394
<NUMBER-OF-SHARES-REDEEMED> (405)
<SHARES-REINVESTED> 80
<NET-CHANGE-IN-ASSETS> 2357
<ACCUMULATED-NII-PRIOR> 34
<ACCUMULATED-GAINS-PRIOR> 302
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 171
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 305
<AVERAGE-NET-ASSETS> 76765
<PER-SHARE-NAV-BEGIN> 33.98
<PER-SHARE-NII> 1.21
<PER-SHARE-GAIN-APPREC> 0.10
<PER-SHARE-DIVIDEND> (1.20)
<PER-SHARE-DISTRIBUTIONS> (0.13)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 33.96
<EXPENSE-RATIO> 0.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 028
<NAME> PDP INSTITUTIONAL MANAGED BOND PORTFOLIO CL Y
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 84344
<INVESTMENTS-AT-VALUE> 85192
<RECEIVABLES> 1614
<ASSETS-OTHER> 673
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 87479
<PAYABLE-FOR-SECURITIES> 7602
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 728
<TOTAL-LIABILITIES> 8330
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 76561
<SHARES-COMMON-STOCK> 156
<SHARES-COMMON-PRIOR> 206
<ACCUMULATED-NII-CURRENT> 65
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1674
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 849
<NET-ASSETS> 79149
<DIVIDEND-INCOME> 213
<INTEREST-INCOME> 2745
<OTHER-INCOME> 0
<EXPENSES-NET> (217)
<NET-INVESTMENT-INCOME> 2741
<REALIZED-GAINS-CURRENT> 1672
<APPREC-INCREASE-CURRENT> (1392)
<NET-CHANGE-FROM-OPS> 3021
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (173)
<DISTRIBUTIONS-OF-GAINS> (20)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11
<NUMBER-OF-SHARES-REDEEMED> (67)
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> (1699)
<ACCUMULATED-NII-PRIOR> 34
<ACCUMULATED-GAINS-PRIOR> 302
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 171
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 305
<AVERAGE-NET-ASSETS> 76765
<PER-SHARE-NAV-BEGIN> 33.97
<PER-SHARE-NII> 1.17
<PER-SHARE-GAIN-APPREC> 0.12
<PER-SHARE-DIVIDEND> (1.15)
<PER-SHARE-DISTRIBUTIONS> (0.13)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 33.98
<EXPENSE-RATIO> 0.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 037
<NAME> PDP INSTITUTIONAL GROWTH STOCK PORTFOLIO CL X
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 65131
<INVESTMENTS-AT-VALUE> 79893
<RECEIVABLES> 4667
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84567
<PAYABLE-FOR-SECURITIES> 1655
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6103
<TOTAL-LIABILITIES> 7758
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 48682
<SHARES-COMMON-STOCK> 1275
<SHARES-COMMON-PRIOR> 1745
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (109)
<ACCUMULATED-NET-GAINS> 13474
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14762
<NET-ASSETS> 76809
<DIVIDEND-INCOME> 520
<INTEREST-INCOME> 170
<OTHER-INCOME> 0
<EXPENSES-NET> (358)
<NET-INVESTMENT-INCOME> 332
<REALIZED-GAINS-CURRENT> 13300
<APPREC-INCREASE-CURRENT> (1545)
<NET-CHANGE-FROM-OPS> 12087
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (410)
<DISTRIBUTIONS-OF-GAINS> (10156)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 84
<NUMBER-OF-SHARES-REDEEMED> (785)
<SHARES-REINVESTED> 232
<NET-CHANGE-IN-ASSETS> (25152)
<ACCUMULATED-NII-PRIOR> 67
<ACCUMULATED-GAINS-PRIOR> 13414
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 425
<AVERAGE-NET-ASSETS> 95162
<PER-SHARE-NAV-BEGIN> 47.42
<PER-SHARE-NII> 0.26
<PER-SHARE-GAIN-APPREC> 6.51
<PER-SHARE-DIVIDEND> (0.35)
<PER-SHARE-DISTRIBUTIONS> (8.68)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 45.16
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 038
<NAME> PDP INSTITUTIONAL GROWTH STOCK PORTFOLIO CL Y
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 65131
<INVESTMENTS-AT-VALUE> 79893
<RECEIVABLES> 4667
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84567
<PAYABLE-FOR-SECURITIES> 1655
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6103
<TOTAL-LIABILITIES> 7758
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 48682
<SHARES-COMMON-STOCK> 426
<SHARES-COMMON-PRIOR> 484
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (109)
<ACCUMULATED-NET-GAINS> 13474
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14762
<NET-ASSETS> 76809
<DIVIDEND-INCOME> 520
<INTEREST-INCOME> 170
<OTHER-INCOME> 0
<EXPENSES-NET> (358)
<NET-INVESTMENT-INCOME> 332
<REALIZED-GAINS-CURRENT> 13300
<APPREC-INCREASE-CURRENT> (1545)
<NET-CHANGE-FROM-OPS> 12087
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (97)
<DISTRIBUTIONS-OF-GAINS> (3085)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25
<NUMBER-OF-SHARES-REDEEMED> (154)
<SHARES-REINVESTED> 70
<NET-CHANGE-IN-ASSETS> (3756)
<ACCUMULATED-NII-PRIOR> 67
<ACCUMULATED-GAINS-PRIOR> 13414
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 425
<AVERAGE-NET-ASSETS> 95162
<PER-SHARE-NAV-BEGIN> 47.43
<PER-SHARE-NII> 0.18
<PER-SHARE-GAIN-APPREC> 6.51
<PER-SHARE-DIVIDEND> (0.27)
<PER-SHARE-DISTRIBUTIONS> (8.68)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 45.17
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 047
<NAME> PDP INSTITUTIONAL MONEY MARKET PORTFOLIO CL X
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 10281
<INVESTMENTS-AT-VALUE> 10281
<RECEIVABLES> 96
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10385
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 575
<TOTAL-LIABILITIES> 575
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9810
<SHARES-COMMON-STOCK> 8275
<SHARES-COMMON-PRIOR> 15182
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 9810
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 346
<OTHER-INCOME> 0
<EXPENSES-NET> (24)
<NET-INVESTMENT-INCOME> 322
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 322
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (280)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5361
<NUMBER-OF-SHARES-REDEEMED> (12541)
<SHARES-REINVESTED> 274
<NET-CHANGE-IN-ASSETS> (6907)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 115
<AVERAGE-NET-ASSETS> 12730
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.026
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.026)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 048
<NAME> PDP INSTITUTIONAL MONEY MARKET PORTFOLIO CL Y
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 10281
<INVESTMENTS-AT-VALUE> 10281
<RECEIVABLES> 96
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10385
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 575
<TOTAL-LIABILITIES> 575
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9810
<SHARES-COMMON-STOCK> 1535
<SHARES-COMMON-PRIOR> 2130
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 9810
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 346
<OTHER-INCOME> 0
<EXPENSES-NET> (24)
<NET-INVESTMENT-INCOME> 322
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 322
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (42)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 482
<NUMBER-OF-SHARES-REDEEMED> (1118)
<SHARES-REINVESTED> 42
<NET-CHANGE-IN-ASSETS> (594)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 115
<AVERAGE-NET-ASSETS> 12730
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.024
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.024)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 057
<NAME> PDP INSTITUTIONAL U.S. GOVERNMENT PORTFOLIO CL X
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 8645
<INVESTMENTS-AT-VALUE> 8666
<RECEIVABLES> 57
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8723
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 340
<TOTAL-LIABILITIES> 340
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8565
<SHARES-COMMON-STOCK> 272
<SHARES-COMMON-PRIOR> 360
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (205)
<ACCUM-APPREC-OR-DEPREC> 22
<NET-ASSETS> 8383
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 225
<OTHER-INCOME> 0
<EXPENSES-NET> (20)
<NET-INVESTMENT-INCOME> 205
<REALIZED-GAINS-CURRENT> 38
<APPREC-INCREASE-CURRENT> (9)
<NET-CHANGE-FROM-OPS> 234
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (95)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18
<NUMBER-OF-SHARES-REDEEMED> (113)
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> (1138)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (243)
<GROSS-ADVISORY-FEES> 12
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 120
<AVERAGE-NET-ASSETS> 8087
<PER-SHARE-NAV-BEGIN> 13.15
<PER-SHARE-NII> 0.35
<PER-SHARE-GAIN-APPREC> 0.03
<PER-SHARE-DIVIDEND> (0.32)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.21
<EXPENSE-RATIO> 0.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 058
<NAME> PDP INSTITUTIONAL U.S. GOVERNMENT PORTFOLIO CL Y
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 8645
<INVESTMENTS-AT-VALUE> 8666
<RECEIVABLES> 57
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8723
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 340
<TOTAL-LIABILITIES> 340
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8565
<SHARES-COMMON-STOCK> 363
<SHARES-COMMON-PRIOR> 272
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (205)
<ACCUM-APPREC-OR-DEPREC> 22
<NET-ASSETS> 8383
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 225
<OTHER-INCOME> 0
<EXPENSES-NET> (20)
<NET-INVESTMENT-INCOME> 205
<REALIZED-GAINS-CURRENT> 38
<APPREC-INCREASE-CURRENT> (9)
<NET-CHANGE-FROM-OPS> 234
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (109)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 133
<NUMBER-OF-SHARES-REDEEMED> (51)
<SHARES-REINVESTED> 8
<NET-CHANGE-IN-ASSETS> 1209
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (243)
<GROSS-ADVISORY-FEES> 12
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 120
<AVERAGE-NET-ASSETS> 8087
<PER-SHARE-NAV-BEGIN> 13.14
<PER-SHARE-NII> 0.31
<PER-SHARE-GAIN-APPREC> 0.05
<PER-SHARE-DIVIDEND> (0.31)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.19
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 067
<NAME> PDP INSTITUTIONAL ENHANCED RESERVES PORTFOLIO CL X
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 73740
<INVESTMENTS-AT-VALUE> 73804
<RECEIVABLES> 410
<ASSETS-OTHER> 69
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74283
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 127
<TOTAL-LIABILITIES> 127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74497
<SHARES-COMMON-STOCK> 7258
<SHARES-COMMON-PRIOR> 12259
<ACCUMULATED-NII-CURRENT> 13
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (418)
<ACCUM-APPREC-OR-DEPREC> 64
<NET-ASSETS> 74156
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3181
<OTHER-INCOME> 0
<EXPENSES-NET> (176)
<NET-INVESTMENT-INCOME> 3005
<REALIZED-GAINS-CURRENT> (20)
<APPREC-INCREASE-CURRENT> (156)
<NET-CHANGE-FROM-OPS> 2829
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2949)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14621
<NUMBER-OF-SHARES-REDEEMED> (19915)
<SHARES-REINVESTED> 294
<NET-CHANGE-IN-ASSETS> (49835)
<ACCUMULATED-NII-PRIOR> 13
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (398)
<GROSS-ADVISORY-FEES> 123
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 234
<AVERAGE-NET-ASSETS> 103195
<PER-SHARE-NAV-BEGIN> 9.95
<PER-SHARE-NII> 0.29
<PER-SHARE-GAIN-APPREC> (0.01)
<PER-SHARE-DIVIDEND> (0.29)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.94
<EXPENSE-RATIO> 0.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 068
<NAME> PDP INSTITUTIONAL ENHANCED RESERVES PORTFOLIO CL Y
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 73740
<INVESTMENTS-AT-VALUE> 73804
<RECEIVABLES> 410
<ASSETS-OTHER> 69
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74283
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 127
<TOTAL-LIABILITIES> 127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74497
<SHARES-COMMON-STOCK> 199
<SHARES-COMMON-PRIOR> 151
<ACCUMULATED-NII-CURRENT> 13
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (418)
<ACCUM-APPREC-OR-DEPREC> 64
<NET-ASSETS> 74156
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3181
<OTHER-INCOME> 0
<EXPENSES-NET> (176)
<NET-INVESTMENT-INCOME> 3005
<REALIZED-GAINS-CURRENT> (20)
<APPREC-INCREASE-CURRENT> (156)
<NET-CHANGE-FROM-OPS> 2829
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (56)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 59
<NUMBER-OF-SHARES-REDEEMED> (15)
<SHARES-REINVESTED> 4
<NET-CHANGE-IN-ASSETS> 477
<ACCUMULATED-NII-PRIOR> 13
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (398)
<GROSS-ADVISORY-FEES> 123
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 234
<AVERAGE-NET-ASSETS> 103195
<PER-SHARE-NAV-BEGIN> 9.95
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> (0.01)
<PER-SHARE-DIVIDEND> (0.28)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.94
<EXPENSE-RATIO> 0.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 077
<NAME> PDP INSTITUTIONAL REAL ESTATE EQUITY SEC. PORTFOLIO CL X
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAY-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 10174
<INVESTMENTS-AT-VALUE> 10675
<RECEIVABLES> 202
<ASSETS-OTHER> 126
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11003
<PAYABLE-FOR-SECURITIES> 171
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26
<TOTAL-LIABILITIES> 197
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10156
<SHARES-COMMON-STOCK> 1006
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 141
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 501
<NET-ASSETS> 10806
<DIVIDEND-INCOME> 147
<INTEREST-INCOME> 9
<OTHER-INCOME> 0
<EXPENSES-NET> (15)
<NET-INVESTMENT-INCOME> 141
<REALIZED-GAINS-CURRENT> 8
<APPREC-INCREASE-CURRENT> 501
<NET-CHANGE-FROM-OPS> 650
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1006
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 10699
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 55
<AVERAGE-NET-ASSETS> 9681
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.14
<PER-SHARE-GAIN-APPREC> 0.50
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.64
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 078
<NAME> PDP INSTITUTIONAL REAL ESTATE EQUITY SEC. PORTFOLIO CL Y
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAY-01-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 10174
<INVESTMENTS-AT-VALUE> 10675
<RECEIVABLES> 202
<ASSETS-OTHER> 126
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11003
<PAYABLE-FOR-SECURITIES> 171
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26
<TOTAL-LIABILITIES> 197
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10156
<SHARES-COMMON-STOCK> 10
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 141
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 501
<NET-ASSETS> 10806
<DIVIDEND-INCOME> 147
<INTEREST-INCOME> 9
<OTHER-INCOME> 0
<EXPENSES-NET> (15)
<NET-INVESTMENT-INCOME> 141
<REALIZED-GAINS-CURRENT> 8
<APPREC-INCREASE-CURRENT> 501
<NET-CHANGE-FROM-OPS> 650
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 107
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 55
<AVERAGE-NET-ASSETS> 9681
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.14
<PER-SHARE-GAIN-APPREC> 0.50
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.64
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
