<PAGE>
PHOENIX INVESTMENT PARTNERS
ANNUAL REPORT
DECEMBER 31, 1999
------ Phoenix Duff & Phelps
Institutional Mutual Funds
Growth Stock Portfolio
Managed by
Seneca Capital Management LLC
Managed Bond Portfolio
Managed by
Phoenix Investment Counsel, Inc.
[Logo] PHOENIX
INVESTMENT PARTNERS
<PAGE>
MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDER:
[PHOTO]
We are pleased to provide this annual report for the Growth Stock Portfolio
and the Managed Bond Portfolio for the 12 months ended December 31, 1999.
The final year of the decade culminated in worldwide millennial celebrations
and unprecedented stock market jubilation. All of the major U.S. stock indices
ended the year at new highs. The S&P 500 Index(1) returned 21%, marking a
consecutive run of five years of double-digit returns for the first time. We are
very pleased to report that our Growth Stock Portfolio significantly
outperformed the S&P 500.
In this amazing year, there were also important market weaknesses. The bond
market, as measured by the Lehman Brothers Aggregate Bond Index(2) produced a
negative total return, one of its worst periods in history. However, our Managed
Bond Portfolio outperformed the Index, achieving positive returns.
On the following pages, the portfolio management teams review market events
over the last year and discuss their investment strategy. We hope you find their
comments informative. If you have any questions, please contact a client service
representative at 1-800-814-1897.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
JANUARY 6, 2000
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE.
(2) THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF BOND MARKET TOTAL RETURN PERFORMANCE. THE INDICES ARE NOT
AVAILABLE FOR DIRECT INVESTMENT.
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
1
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL GROWTH STOCK PORTFOLIO
A DISCUSSION WITH THE PORTFOLIO'S MANAGEMENT TEAM
Q: WHAT IS THE PORTFOLIO'S INVESTMENT OBJECTIVE?
A: The Portfolio seeks long-term capital appreciation through investments in
common stocks.
Q: HOW DID THE PORTFOLIO PERFORM OVER THE LAST 12 MONTHS?
A: The Portfolio had very good results, outperforming its benchmark for the
12-month reporting period. Class X shares returned 33.93% and Class Y shares
returned 33.60% compared with a return of 21.14% for the S&P 500 Index(1). All
performance figures assume reinvestment of distributions and are net of sales
charges.
Q: WHAT FACTORS AFFECTED PERFORMANCE IN 1999?
A: Performance was helped by a combination of superior stock selection and
disciplined risk controls. The portfolio's emphasis on high quality companies
helped performance through the turbulent second quarter, when investors briefly
abandoned the highest P/E growth stocks in favor of lower-valued cyclical
companies. Our performance was not affected as negatively as most growth
managers, as our investment philosophy incorporates a strict valuation
discipline. Also, because our stock selection screening process uncovers
companies with rapidly accelerating earnings regardless of industry, the
portfolio was fairly diverse and was not caught up in the whipsaw of the sector
shift.
The disciplined risk-control aspect of our investment approach also
benefited the portfolio in the third quarter. While we lost approximately 2%,
the market declined 6%. Our valuation discipline, absent in the approach of many
growth managers, provided some mitigation to the overall negative sentiment.
Q: TECHNOLOGY WAS CLEARLY A BIG WINNER LAST YEAR. HOW IS THE PORTFOLIO
POSITIONED IN THIS SECTOR?
A: Technology was definitely the hands-down winning sector of the year. Our
portfolio was overweighted in this sector over the course of 1999. It is worth
noting that we did not own some of the top performers in the S&P 500 due to
valuation concerns; for example, we did not hold Yahoo! and QUALCOMM. Rather,
the portfolio emphasized communications technology companies that had earnings
growth rates substantially higher than the market, such as Motorola, Nokia and
Nortel Networks.
While many exciting growth stories will continue to come from the technology
sector and, therefore, the portfolio will probably remain overweighted in this
area, we will also continue to explore growth elsewhere. For example, consumer
staples is an area with some interesting growth stories and attractive
valuations, and oil services, which should see good growth due to improved
global GDP, may offer attractive opportunities.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: We believe interest rates will continue to rise in 2000 as the Federal
Reserve does battle with the economy, but this upward bias should end by
midyear, when we expect to see a concrete slowing of the economy. Thus, the
first part of the year will probably be difficult for both stocks and bonds.
Equities should fare better in the second half, with the S&P's return closer to
10%, rather than the 20% plus to which investors have become accustomed. With
little to no multiple expansion likely, stocks will have to trade on earnings,
which should come in somewhere between 8-12% for the S&P. We also expect the
bifurcation of growth and value stocks to persist, which will cause market
breadth to remain poor.
JANUARY 20, 2000
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
2
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 12/31/99
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
Class X Shares 33.93% 27.08% 18.28%
Class Y Shares 33.60 26.77 17.99
S&P 500 Index(3) 21.14 28.66 18.25
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) This chart illustrates returns on Class X shares for ten years. Returns on
Class Y Shares will vary due to differing inception dates and fees.
(3) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance.
Performance data is based on the Portfolio's past performance as a pooled
separate investment account of Phoenix Home Life Mutual Insurance Company
prior to March 1, 1996 (inception of the fund). Returns indicate past
performance which may not be indicative of future performance. Investment
return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost.
GROWTH OF $5,000,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(IN THOUSANDS) GROWTH STOCK S&P 500
PORTFOLIO CLASS X(2) INDEX(3)
<S> <C> <C>
89 $5,000,000 $5,000,000
90 $5,162,292 $4,840,276
91 $7,257,158 $6,318,672
92 $7,416,301 $6,804,623
93 $8,160,937 $7,485,092
94 $8,087,457 $7,584,122
95 $10,895,827 $10,428,720
96 $12,131,013 $12,853,155
97 $15,255,503 $17,142,972
98 $20,015,690 $22,072,688
99 $26,807,000 $26,738,000
</TABLE>
This chart assumes an initial gross investment of $5,000,000 made on 12/31/89
for Class X shares. The total return for Class X shares assumes reinvestment of
dividends and capital gains. Class Y share performance will be greater or less
than that shown based on differences in inception dates and fees.
SECTOR WEIGHTINGS 12/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 37%
Consumer Staples 13%
Financials 11%
Communication Services 10%
Health-Care 9%
Energy 6%
Basic Materials 5%
Other 9%
</TABLE>
3
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
TEN LARGEST HOLDINGS AT DECEMBER 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Microsoft Corp. 4.9%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
2. Nokia Oyj Sponsored ADR 4.8%
LEADING SUPPLIER OF DIGITAL MOBILE AND FIXED NETWORKS
3. Motorola, Inc. 4.8%
MAJOR ELECTRONIC EQUIPMENT PROVIDER
4. STMicroelectronics NV 4.3%
MANUFACTURES SEMICONDUCTOR INTEGRATED CIRCUITS AND DISCRETE DEVICES
5. Morgan Stanley Dean Witter & Co. 4.2%
PROVIDES A BROAD RANGE OF CREDIT AND INVESTMENT PRODUCTS TO
INDIVIDUALS
6. Nortel Networks Corp. 4.2%
TELECOMMUNICTIONS EQUIPMENT PROVIDER
7. Citigroup, Inc. 4.0%
DIVERSIFIED FINANCIAL SERVICES HOLDING COMPANY
8. AMFM, Inc. 3.9%
OWNS AND OPERATES 92 FM AND 33 AM RADIO STATIONS
9. General Electric Co. 3.9%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES PROVIDER
10. Cisco Systems, Inc. 3.6%
LEADING PRODUCER OF SWITCHES AND ROUTERS FOR INTERNETWORKING
</TABLE>
INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C> <C>
COMMON STOCKS--85.2%
ALUMINUM--2.6%
Alcoa, Inc.............................. 20,050 $ 1,664,150
BANKS (MAJOR REGIONAL)--2.9%
Mellon Financial Corp................... 54,000 1,839,375
BROADCASTING (TELEVISION, RADIO & CABLE)--6.4%
AMFM, Inc.(b)........................... 31,700 2,480,525
Charter Communications, Inc. Class
A(b).................................... 52,970 1,158,719
Infinity Broadcasting Corp. Class
A(b).................................... 11,250 407,109
-----------
4,046,353
-----------
CHEMICALS--2.8%
Dow Chemical Co. (The).................. 13,400 1,790,575
COMMUNICATIONS EQUIPMENT--8.0%
General Motors Corp. Class H(b)......... 21,650 2,078,400
Motorola, Inc........................... 20,460 3,012,735
-----------
5,091,135
-----------
COMPUTERS (HARDWARE)--3.3%
Sun Microsystems, Inc.(b)............... 27,020 2,092,361
COMPUTERS (NETWORKING)--3.6%
Cisco Systems, Inc.(b).................. 21,430 2,295,689
COMPUTERS (SOFTWARE & SERVICES)--4.9%
Microsoft Corp.(b)...................... 26,450 3,088,037
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C> <C>
ELECTRICAL EQUIPMENT--3.9%
General Electric Co..................... 15,820 $ 2,448,145
ELECTRONICS (INSTRUMENTATION)--1.5%
Agilent Technologies, Inc.(b)........... 12,540 969,499
ELECTRONICS (SEMICONDUCTORS)--2.0%
Intel Corp.............................. 15,570 1,281,606
FINANCIAL (DIVERSIFIED)--8.2%
Citigroup, Inc.......................... 45,085 2,505,035
Morgan Stanley Dean Witter & Co......... 18,710 2,670,852
-----------
5,175,887
-----------
FOODS--1.7%
General Mills, Inc...................... 30,800 1,101,100
HEALTH CARE (DIVERSIFIED)--5.8%
Bristol-Myers Squibb Co................. 28,500 1,829,344
Johnson & Johnson....................... 19,840 1,847,600
-----------
3,676,944
-----------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--2.8%
Merck & Co., Inc........................ 26,520 1,778,497
HOUSEHOLD PRODUCTS (NON-DURABLE)--4.2%
Clorox Co. (The)........................ 23,300 1,173,738
Procter & Gamble Co. (The).............. 13,340 1,461,564
-----------
2,635,302
-----------
</TABLE>
4 See Notes to Financial Statements
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C> <C>
OIL & GAS (DRILLING & EQUIPMENT)--3.2%
Halliburton Co.......................... 50,430 $ 2,029,808
OIL (INTERNATIONAL INTEGRATED)--2.6%
Texaco, Inc............................. 30,000 1,629,375
RETAIL (BUILDING SUPPLIES)--2.3%
Lowe's Companies, Inc................... 23,840 1,424,440
RETAIL (GENERAL MERCHANDISE)--2.9%
Wal-Mart Stores, Inc.................... 26,400 1,824,900
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--3.4%
Nextel Communications, Inc. Class
A(b).................................... 20,550 2,119,219
TELECOMMUNICATIONS (LONG DISTANCE)--3.0%
MCI WorldCom, Inc.(b)................... 35,937 1,906,907
TELEPHONE--3.2%
Bell Atlantic Corp...................... 32,470 1,998,934
- ------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $40,119,636) 53,908,238
- ------------------------------------------------------------------
FOREIGN COMMON STOCKS--13.2%
COMMUNICATIONS EQUIPMENT--8.9%
Nokia Oyj Sponsored ADR (Finland)....... 15,870 3,015,300
Nortel Networks Corp. (Canada).......... 26,280 2,654,280
-----------
5,669,580
-----------
ELECTRONICS (SEMICONDUCTORS)--4.3%
STMicroelectronics NV (Netherlands)..... 17,880 2,707,702
- ------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $3,846,266) 8,377,282
- ------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.4%
(IDENTIFIED COST $43,965,902) 62,285,520
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ --------------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--2.2%
COMMERCIAL PAPER--2.2%
Koch Industries, Inc. 7.50%,
1/3/00.............................. A-1+ $1,405 $ 1,404,415
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $1,404,415) 1,404,415
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.6%
(IDENTIFIED COST $45,370,317) 63,689,935(a)
Cash and receivables, less liabilities--(0.6%) (408,490)
--------------------
NET ASSETS--100.0% $ 63,281,445
====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $19,476,765 and gross
depreciation of $1,221,702 for federal income tax purposes. At December 31,
1999, the aggregate cost of securities for federal income tax purposes was
$45,434,872.
(b) Non-income producing.
See Notes to Financial Statements
5
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $45,370,317) $ 63,689,935
Cash 3,366
Receivables
Dividends and interest 31,725
Fund shares sold 20,195
Prepaid expenses 1,011
--------------
Total assets 63,746,232
--------------
LIABILITIES
Payables
Investment securities purchased 356,935
Investment advisory fee 33,643
Transfer agent fee 8,323
Financial agent fee 8,162
Distribution fee 4,407
Trustees' fee 1,188
Accrued expenses 52,129
--------------
Total liabilities 464,787
--------------
NET ASSETS $ 63,281,445
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 41,775,181
Undistributed net investment income 19,087
Accumulated net realized gain 3,167,559
Net unrealized appreciation 18,319,618
--------------
NET ASSETS $ 63,281,445
==============
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $41,436,442) 1,124,934
Net asset value and offering price per share $36.83
CLASS Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $21,845,003) 594,833
Net asset value and offering price per share $36.72
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 487,240
Interest 78,275
-------------
Total investment income 565,515
-------------
EXPENSES
Investment advisory fee 391,685
Distribution fee, Class Y 50,204
Financial agent fee 87,537
Professional 35,866
Transfer agent 35,773
Trustees 19,913
Custodian 17,377
Printing 13,698
Registration 7,201
Miscellaneous 9,890
-------------
Total expenses 669,144
Less expenses borne by investment adviser (161,973)
-------------
Net expenses 507,171
-------------
NET INVESTMENT INCOME 58,344
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 17,061,177
Net change in unrealized appreciation (depreciation) on
investments 1,963,468
-------------
NET GAIN ON INVESTMENTS 19,024,645
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 19,082,989
=============
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 58,344 $ 38,130
Net realized gain (loss) 17,061,177 8,875,871
Net change in unrealized appreciation
(depreciation) 1,963,468 8,732,664
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 19,082,989 17,646,665
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (39,257) (30,177)
Net investment income, Class Y -- (7,953)
Net realized gains, Class X (11,735,478) (7,279,351)
Net realized gains, Class Y (5,991,827) (3,125,369)
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (17,766,562) (10,442,850)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (43,182
and 447,453 shares, respectively) 1,703,697 15,187,022
Net asset value of shares issued from
reinvestment of distributions
(328,868 and 204,764 shares,
respectively) 11,774,581 7,309,523
Cost of shares redeemed (472,062 and
737,633 shares, respectively) (19,926,904) (25,502,110)
------------ ------------
Total (6,448,626) (3,005,565)
------------ ------------
CLASS Y
Proceeds from sales of shares (23,824
and 42,715 shares, respectively) 935,225 1,441,580
Net asset value of shares issued from
reinvestment of distributions
(168,015 and 85,930 shares,
respectively) 5,991,813 3,069,279
Cost of shares redeemed (161,837 and
84,508 shares, respectively) (6,189,832) (3,014,143)
------------ ------------
Total 737,206 1,496,716
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (5,711,420) (1,508,849)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (4,394,993) 5,694,966
------------ ------------
NET ASSETS
Beginning of period 67,676,438 61,981,472
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$19,087 AND $0, RESPECTIVELY] $ 63,281,445 $ 67,676,438
============ ============
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS X
------------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
--------------------------------------- 3/1/96 TO
1999 1998 1997 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 37.82 $ 33.85 $ 47.42 $ 48.01
INCOME FROM INVESTMENT OPERATIONS(6)
Net investment income (loss) 0.08 0.05(7) 0.31(7) 0.34
Net realized and unrealized gain (loss) 11.65 9.88 10.60 4.89
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 11.73 9.93 10.91 5.23
--------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.05) (0.15) (0.39) (0.30)
Dividends from net realized gains (12.67) (5.81) (24.07)(3) (5.52)
In excess of net investment income -- -- (0.02) --
--------- --------- --------- ---------
TOTAL DISTRIBUTIONS (12.72) (5.96) (24.48) (5.82)
--------- --------- --------- ---------
Change in net asset value (0.99) 3.97 (13.57) (0.59)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 36.83 $ 37.82 $ 33.85 $ 47.42
========= ========= ========= =========
Total return 33.93% 31.20% 25.76% 10.71%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $41,436 $46,330 $44,350 $82,739
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.70% 0.70% 0.70% 0.70%(1)
Net investment income 0.17% 0.13% 0.64% 0.65%(1)
Portfolio turnover 136% 115% 148% 99%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS Y
------------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
--------------------------------------- 3/1/96 TO
1999 1998 1997 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 37.79 $ 33.86 $ 47.43 $ 48.01
INCOME FROM INVESTMENT OPERATIONS(6)
Net investment income (loss) (0.03) (0.04)(7) 0.18(7) 0.18
Net realized and unrealized gain (loss) 11.63 9.88 10.59 4.95
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 11.60 9.84 10.77 5.13
--------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.10) (0.31) (0.19)
Dividends from net realized gains (12.67) (5.81) (24.02)(3) (5.52)
In excess of net investment income -- -- (0.01) --
--------- --------- --------- ---------
TOTAL DISTRIBUTIONS (12.67) (5.91) (24.34) (5.71)
--------- --------- --------- ---------
Change in net asset value (1.07) 3.93 (13.57) (0.58)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 36.72 $ 37.79 $ 33.86 $ 47.43
========= ========= ========= =========
Total return 33.60 % 30.85 % 25.46% 10.48%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $21,845 $21,347 $17,631 $22,978
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 0.95 % 0.95 % 0.95% 0.95%(1)
Net investment income (loss) (0.09)% (0.11)% 0.39% 0.39%(1)
Portfolio turnover 136 % 115 % 148% 99%(2)
</TABLE>
(1) Annualized.
(2) Not annualized.
(3) Includes amounts distributed as income and redesignated for tax purposes.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 0.95%,
1.00%, 0.87%, and 0.81% for the periods ended December 31, 1999, 1998, 1997,
and 1996, respectively.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.20%,
1.25%, 1.12%, and 1.06% for the periods ended December 31, 1999, 1998, 1997,
and 1996, 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 timing of share purchases and redemptions.
(7) Computed using average shares outstanding.
8 See Notes to Financial Statements
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MANAGED BOND PORTFOLIO
A DISCUSSION WITH THE PORTFOLIO'S MANAGEMENT TEAM
Q: WHAT IS THE PORTFOLIO'S INVESTMENT OBJECTIVE?
A: The Managed Bond Portfolio is appropriate for investors seeking long-term
capital appreciation through investments in fixed-income securities, including
foreign and high-yield debt issues. Investors should note that foreign investing
involves added risks, such as currency fluctuations, less public disclosure, and
economic and political risks.
Q: HOW DID THE PORTFOLIO PERFORM IN 1999?
A: For the 12 months ended December 31, 1999, Class X shares returned 1.47% and
Class Y shares returned 1.26% compared with a return of (0.83)% for the Lehman
Brothers Aggregate Bond Index(1). All performance figures assume reinvestment of
distributions and are net of fees.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT LAST YEAR?
A: The last year of the millennium proved to be a difficult year for the bond
market, with interest rates trending higher, as the Federal Reserve completed a
reversal of the three rate cuts it had injected into the financial markets in
1998. These three rate hikes eroded the value of most bonds, with Treasury
securities taking the worst hit. Against the backdrop of a strong U.S. economy,
the Federal Reserve attempted to navigate a tightrope, keeping inflation in
check while allowing the economy to grow. The Fed's tight monetary policy put
upward pressure on interest rates all year long, with the yield on the 30-year
Treasury bond finishing the year at 6.48%, up 138 basis points from year-end
1998.
We are pleased with our 1999 calendar year results, which were achieved as
we took full advantage of the significant opportunities available in the
non-core sectors in 1999. In a dramatic reversal of the 1998 "flight to
quality," Treasury securities proved to be the worst performing sector in 1999.
At the start of 1999, we had allocated 10% of the portfolio to both emerging
markets and domestic high-yield bonds. Both sectors performed well in 1999.
Within the domestic high-yield area, we emphasized the telecommunications
industry, purchasing companies such as Quest, Voicestream, and Williams
Communications. The telecommunications industry was one of the best performing
industries in the high-yield market for 1999. Within emerging markets, we
emphasized countries with solid economic fundamentals, higher credit quality,
and good liquidity. We avoided lower credit quality countries with poor
fundamentals like Ecuador, which ultimately defaulted on its bonds in 1999.
In addition, at the start of the year, approximately 7% of the portfolio was
allocated to tax-exempt municipal bonds because we expected them to outperform
taxable alternatives on a total-return basis, which they did. By August we
closed out of our tax-exempt position as our profit objective had been achieved.
Additionally, our large allocation to both taxable municipal bonds and
commercial mortgage-backed securities contributed strongly to performance
throughout the year.
Q: WHAT SECTORS LOOK ATTRACTIVE TO YOU?
A: Fundamentally, we believe the prospects for many emerging countries and their
bonds are
(1) THE LEHMAN BROTHERS AGGREGATE INDEX IS AN UNMANAGED, COMMONLY USED MEASURE
OF BROAD BOND MARKET TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE
FOR DIRECT INVESTMENT.
9
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MANAGED BOND PORTFOLIO (CONTINUED)
bright. We expect the marketplace to continue to focus on these countries'
robust economic growth, improving fiscal deficits, and broadening investor base.
The domestic high-yield market rebounded nicely in 1999, but we believe there is
still more upside. The issuance of new CBO's (collateralized bond obligations)
is keeping demand for these securities high. We will continue to exploit
opportunities in the fledgling European high-yield marketplace, as we did in
1999.
Another area of opportunity in 2000, which we are monitoring, is the
lower-rated tranches of commercial mortgage-backed securities, which may become
ERISA eligible in 2000. This is an area where we have much expertise, having
owned these types of securities for several years in many of our non-ERISA
portfolios.
Investors should keep in mind that high-yield fixed-income securities
generally are subject to greater market fluctuations and risk of loss of income
and principal than are investments in lower-yielding fixed-income securities.
The variability of prepayments on commercial mortgage-backed securities will
tend to limit price gains when interest rates drop and exaggerate price declines
when interest rates rise.
Within the fixed-income markets, we believe one of the most important
developments is the emergence of new broad-based indices, such as the Lehman
Brothers Universal Index. This Universal Index expands the current Lehman
Brothers Aggregate Index to include domestic high-yield issues, emerging-market
bonds, 144A securities, and commercial mortgage-backed securities. This should
generate more interest and demand in these sectors, many of which we currently
emphasize in our portfolio.
Q: WHAT IS YOUR OUTLOOK FOR THE BOND MARKET?
A: Looking ahead to the year 2000, our outlook for the bond market remains
positive, as we believe that yield spreads on many of the non-Treasury sectors
are likely to tighten further from their current levels. Additionally, real bond
yields (Treasury yields less inflation) are high compared to historical
averages, indicating that bonds as an asset class are attractive. While we feel
the market could be soft in the first quarter of 2000, driven by fears of more
tightening by the Federal Reserve, our longer-term outlook is very positive.
Currently the bond market is offering investors attractive risk-adjusted
yields as compensation for taking risk. We are confident that we have properly
positioned your portfolio to benefit from these favorable market conditions.
Looking ahead, we will continue to follow our investment strategy of investing
in those sectors of the bond market that offer the best relative value.
JANUARY 20, 2000
10
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 12/31/99
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
Class X Shares 1.47% 8.17% 7.80%
Class Y Shares 1.26 7.91 7.53
Lehman Brothers Aggregate Bond Index(3) (0.83) 7.73 7.70
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) This chart illustrates returns on Class X shares for ten years. Returns on
Class Y Shares will vary due to differing inception dates and fees.
(3) The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond market total return performance.
Performance data is based on the Portfolio's past performance as a pooled
separate investment account of Phoenix Home Life Mutual Insurance Company
prior to March 1, 1996 (inception of the fund). Returns indicate past
performance which may not be indicative of future performance. Investment
return and net asset value will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
GROWTH OF $5,000,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(IN THOUSANDS) MANAGED BOND LEHMAN BROTHERS
PORTFOLIO CLASS X(2) AGGREGATE BOND INDEX(3)
<S> <C> <C>
89 5,000,000 5,000,000
90 5,185,579 5,447,978
91 6,156,151 6,319,810
92 6,703,896 6,787,506
93 7,517,606 7,449,336
94 7,151,601 7,232,083
95 8,579,666 8,568,487
96 9,325,716 8,879,552
97 10,234,613 9,736,671
98 10,438,696 10,582,477
99 10,593,000 10,495,000
</TABLE>
This chart assumes an initial gross investment of $5,000,000 made on 12/31/89
for Class X shares. The total return for Class X shares assumes reinvestment of
dividends and capital gains. Class Y share performance will be greater or less
than that shown based on differences in inception dates and fees.
SECTOR WEIGHTINGS 12/31/99
As a percentage of bond holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Non Agency Mortgage-Backed 25%
Municipal 18%
Agency Mortgage-Backed 17%
Asset-Backed 13%
Foreign Government 9%
Corporate 9%
Foreign Corporate 5%
Agency Non Mortgage-Backed 4%
</TABLE>
11
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
TEN LARGEST HOLDINGS AT DECEMBER 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. GNMA 7%, 7/1/29 3.7%
AGENCY MORTGAGE-BACKED SECURITY
2. Fannie Mae 6.50%, 8/15/04 3.4%
AGENCY MORTGAGE-BACKED SECURITY
3. GNMA 6.50%, 1/1/30 3.1%
AGENCY MORTGAGE-BACKED SECURITY
4. GNMA 6%, 12/1/28 3.0%
AGENCY MORTGAGE-BACKED SECURITY
5. Residential Accredit Loans, Inc. 7.75%, 11/25/29 2.4%
NON-AGENCY MORTGAGE-BACKED SECURITY
6. Commercial Mortgage Asset Trust 1.9%
NON-AGENCY MORTGAGE-BACKED SECURITY
7. Freddie Mac 6.65%, 6/15/23 1.9%
AGENCY MORTGAGE-BACKED SECURITY
8. GNMA 7%, 7/1/29 1.8%
AGENCY MORTGAGE-BACKED SECURITY
9. Structured Asset Securities Corp. 95-C1, D 7.375%, 9/25/24 1.7%
NON-AGENCY MORTGAGE-BACKED SECURITY
10. Illinois Educational Facilities Authority-Loyola University 1.7%
Revenue Taxable Series A 7.84%, 7/1/24
MUNICIPAL BOND
</TABLE>
INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
AGENCY MORTGAGE-BACKED SECURITIES--16.3%
Fannie Mae 6.75%, 6/25/20............... Aaa $ 281 $ 279,825
Freddie Mac 6.65%, 6/15/23.............. Aaa 2,050 1,994,016
GNMA 6.50%, 6/1/26...................... Aaa 799 750,436
GNMA 6%, 12/1/28........................ Aaa 3,468 3,155,928
GNMA 6.50%, 5/1/29...................... Aaa 1,354 1,270,666
GNMA 7%, 7/1/29......................... Aaa 1,976 1,908,332
GNMA 7%, 7/1/29......................... Aaa 4,080 3,940,668
GNMA 7%, 7/15/29........................ Aaa 907 875,684
GNMA 6.50%, 1/1/30(e)................... Aaa 3,500 3,288,906
- -----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $17,969,756) 17,464,461
- -----------------------------------------------------------------------------
AGENCY NON MORTGAGE-BACKED
SECURITIES--3.4%
Fannie Mae 6.50%, 8/15/04(f)............ Aaa 3,675 3,630,152
- -----------------------------------------------------------------------------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $3,669,329) 3,630,152
- -----------------------------------------------------------------------------
MUNICIPAL BONDS--17.7%
ALABAMA--1.2%
Jefferson County Alabama Sewer Revenue
Bonds Series A 5.125%, 2/1/29........... Aaa 1,490 1,277,675
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
CALIFORNIA--5.4%
Alameda Corridor Transportation
Authority Revenue Taxable Series C
6.50%, 10/1/19.......................... Aaa $ 1,000 $ 857,500
Alameda Corridor Transportation
Authority Revenue Taxable Series C
6.60%, 10/1/29.......................... Aaa 635 536,575
Fresno County Pension Obligation Revenue
Taxable 6.21%, 8/15/06.................. Aaa 1,400 1,310,750
Oakland Pension Obligation Revenue
Taxable Series A 6.98%, 12/15/09........ Aaa 400 383,000
Orange County Pension Obligation Revenue
Taxable Series A 7.21%, 9/1/07.......... Aaa 300 295,500
Orange County Pension Obligation Revenue
Taxable Series A 7.62%, 9/1/08.......... Aaa 300 301,500
Orange County Pension Obligation Revenue
Taxable Series A 7.67%, 9/1/09.......... Aaa 1,200 1,206,000
Ventura County Pension Obligation
Taxable 6.54%, 11/1/05.................. Aaa 1,000 961,250
------------
5,852,075
------------
COLORADO--1.7%
Denver City and County School District
01 Pension Taxable 6.76%, 12/15/07...... Aaa 1,900 1,816,875
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
CONNECTICUT--1.6%
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 144A 6.91%,
9/1/12(b)............................... Aaa $ 1,100 $ 1,038,125
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 144A 6.57%,
9/1/13(b)............................... Aaa 715 649,756
------------
1,687,881
------------
FLORIDA--1.8%
Palm Beach County Solid Waste Industrial
Development Project B Revenue Taxable
10.50%, 1/1/11(g)(h)(i)................. NR 480 96,000
Tampa Solid Waste System Revenue Taxable
Series A 6.43%, 10/1/08................. Aaa 930 850,950
University of Miami Exchangeable Revenue
Taxable Series A 7.40%, 4/1/11(d)....... Aaa 210 201,863
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20(d)....... Aaa 825 774,469
------------
1,923,282
------------
ILLINOIS--2.7%
Illinois Educational Facilities
Authority-Loyola University Revenue
Series A 5.70%, 7/1/24.................. Aaa 1,075 1,019,906
Illinois Educational Facilities
Authority-Loyola University Revenue
Taxable Series A 7.84%, 7/1/24.......... Aaa 1,925 1,838,375
------------
2,858,281
------------
MASSACHUSETTS--0.8%
Massachusetts State Port Authority
Revenue Taxable Series C 6%, 7/1/01..... Aa 870 859,125
NEW YORK--1.5%
New York State General Obligation
Series H 5%, 3/15/29.................... Aaa 1,490 1,229,250
New York State Taxable Series D 6.75%,
6/15/09................................. A 400 375,000
------------
1,604,250
------------
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
PENNSYLVANIA--0.8%
Philadelphia Authority For Industrial
Development Pension Funding Retirement
Systems Revenue Taxable Series A 5.79%,
4/15/09................................. Aaa $ 1,000 $ 881,250
TEXAS--0.2%
Dallas-Fort Worth International Airport
Facilities Improvement Revenue Taxable
6.45%, 11/1/08.......................... Aaa 200 187,200
- -----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $20,415,510) 18,947,894
- -----------------------------------------------------------------------------
ASSET-BACKED SECURITIES--13.1%
AESOP Funding II LLC 98-1, A 6.14%,
5/20/06(b).............................. Aaa 1,385 1,321,942
American Express Credit Account Master
Trust 99-2, A 5.95%, 12/15/06........... Aaa 975 936,305
Capita Equipment Receivables Trust 97-1,
B 6.45%, 8/15/02........................ Aa 600 591,654
Citibank Credit Card Master Trust I
98-3, A 5.80%, 2/7/05................... Aaa 1,500 1,452,750
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29.................. Baa 1,576 1,423,571
Countrywide Funding Corp. 99-3, AF5
7.73%, 9/25/27.......................... Aaa 1,625 1,613,815
First USA Credit Card Master Trust 96-6,
A 6.61%, 7/10/06........................ AAA 1,400 1,400,219
Honda Auto Lease Trust 99-A, A5 6.65%,
7/15/05................................. Aaa 650 645,531
LB Commercial Conduit Mortgage Trust
99-C2, A2 7.325%, 9/15/09............... Aaa 1,670 1,645,472
Newcourt Equipment Trust Securities
99-1, A4 7.18%, 10/20/05................ Aaa 1,020 1,015,856
Premier Auto Trust 97-3, B 6.52%,
1/6/03.................................. A 850 846,183
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
Team Fleet Financing Corp. 98-3A, C 144A
6.63%, 10/25/04(b)(c)................... BBB $ 1,150 $ 1,071,656
- -----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $14,275,473) 13,964,954
- -----------------------------------------------------------------------------
CORPORATE BONDS--9.2%
AEROSPACE/DEFENSE--0.7%
BE Aerospace, Inc. 9.50%, 11/1/08....... B 740 695,600
AIRLINES--0.7%
Continental Airlines, Inc. 7.461%,
4/1/15 ................................. Aa 823 790,115
BROADCASTING (TELEVISION, RADIO & CABLE)--1.0%
CSC Holdings, Inc. 7.625%, 7/15/18...... Ba 600 558,000
United Pan-Europe Communications NV 144A
10.875%, 8/1/09(b)...................... B 540 550,125
------------
1,108,125
------------
COMMUNICATIONS EQUIPMENT--0.9%
Metromedia Fiber Network, Inc. Series B
10%, 11/15/08........................... B 350 359,625
Williams Communications 10.70%,
10/1/07................................. B 575 606,625
------------
966,250
------------
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--0.5%
Mohegan Tribal Gaming 8.125%, 1/1/06 .. Ba 250 245,625
Mohegan Tribal Gaming 8.75%, 1/1/09..... Ba 250 249,375
------------
495,000
------------
HEALTH CARE (GENERIC AND OTHER)--0.4%
ICN Pharmaceutical Inc. 144A 8.75%,
11/15/08(b)............................. Ba 505 469,019
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.5%
Boston Scientific Corp. 6.625%,
3/15/05 ................................ Baa 560 516,600
HOMEBUILDING--0.5%
Lennar Corp. 7.625%, 3/1/09............. Ba 580 519,100
INSURANCE (PROPERTY-CASUALTY)--0.5%
HSB Capital I Series B 7.09%,
7/15/27(c)(d)........................... BBB 550 522,302
SERVICES (COMMERCIAL & CONSUMER)--0.1%
ARA Services, Inc. 10.625%, 8/1/00...... Baa 53 54,590
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.7%
Voicestream Wireless Holding 144A
10.375%, 11/15/09(b).................... B $ 745 $ 767,350
TELECOMMUNICATIONS (LONG DISTANCE)--2.0%
Global Crossing Holdings Ltd 9.125%,
11/15/06................................ Ba 505 501,212
FirstCom Corp. 14%, 10/27/07............ NR 1,030 1,143,300
Qwest Communications International, Inc.
Series B 7.50%, 11/1/08................. Ba 500 486,875
------------
2,131,387
------------
TEXTILES (HOME FURNISHINGS)--0.3%
Westpoint Stevens, Inc. 7.875%,
6/15/05................................. Ba 400 368,000
WASTE MANAGEMENT--0.4%
Allied Waste North America, Inc.
Series B 7.875%, 1/1/09................. Ba 505 448,188
- -----------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $9,968,645) 9,851,626
- -----------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--24.8%
CS First Boston Mortgage Securities
Corp. 97-SPCE C 144A 7.077%,
2/20/07(b)(c)........................... A 1,450 1,388,828
CS First Boston Mortgage Securities
Corp. 98-C2, A1 5.96%, 12/15/07......... Aaa 643 609,047
CS First Boston Mortgage Securities
Corp. 99-C1, A2 7.29%, 9/15/09.......... Aaa 1,115 1,096,533
Chase Commercial Mortgage Securities
Corp. 00-S1 7.25%, 2/25/30(e)........... Aaa 1,650 1,581,164
Commercial Mortgage Asset Trust 99-C1 D
7.35%, 10/17/13(f)...................... Baa 2,400 2,058,750
Countrywide Home Loans 99-11, A16 7.25%,
11/15/29(c)............................. AAA 1,905 1,817,787
Criimi Mae Trust I 96-C1, A2 144A 7.56%,
6/30/33(b)(c)........................... BBB 1,475 1,395,027
DLJ Commercial Mortgage Corp. 99-CG1,
A1B 6.46%, 1/10/09...................... Aaa 1,250 1,164,063
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
G.E. Capital Mortgage Services, Inc.
96-8, 2A5 7.50%, 5/25/26(c)............. AAA $ 264 $ 256,975
General Growth Properties 97-1, C2 144A
6.806%, 11/15/07(b)..................... A 1,700 1,599,037
Nationslink Funding Corp. 99-2, A2C
7.229%, 10/20/08(c)..................... AAA 1,000 978,008
Norwest Asset Securities Corp. 99-5, B2
6.25%, 3/25/14(c)....................... A 1,739 1,584,290
Norwest Asset Securities Corp. 99-10, B2
6.25%, 4/25/14(c)....................... A 1,163 1,058,531
Residential Accredit Loans, Inc. 96-QS4,
AI10 7.90%, 8/25/26(c).................. AAA 900 893,531
Residential Accredit Loans, Inc.
99-QS14, A5 7.75%, 11/25/29(c).......... AAA 2,622 2,547,847
Residential Funding Mortgage Securities
I 93-S25, M3 6.50%, 7/25/08(c).......... BBB+ 530 505,220
Residential Funding Mortgage Securities
I 96-S20, A7 7.75%, 9/25/26(c)(f)....... AAA 320 318,700
Residential Funding Mortgage Securities
I 98-S2, A4 7%, 1/25/28(c).............. AAA 383 360,186
Resolution Trust Corp. 92-C3, B 9.05%,
8/25/23(c).............................. AA 39 38,995
Ryland Mortgage Securities Corp. III
92-A, 1A 8.259%, 3/29/30(c)(d).......... A- 395 394,209
SASCO Floating Rate Commercial Mortgage
98-C3A, H 144A 7.031%, 4/25/03(b)(d).... Ba 1,250 1,144,531
Structured Asset Securities Corp. 95-C1,
D 7.375%, 9/25/24(c).................... BBB 1,865 1,850,736
Structured Asset Securities Corp. 95-C4,
D 7%, 6/25/26(c)........................ AA 1,000 992,352
Vanderbilt Mortgage Finance 1999-C, 1A3
7.385%, 11/07/20........................ Aaa 850 843,891
- -----------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $27,185,239) 26,478,238
- -----------------------------------------------------------------------------
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
FOREIGN GOVERNMENT SECURITIES--9.0%
BULGARIA--0.5%
Republic of Bulgaria FLIRB Bearer
Series A 2.75%, 7/28/12(d).............. B $ 770 $ 556,325
COLOMBIA--1.0%
Republic of Colombia 10.875%, 3/9/04.... Ba 995 1,022,362
COSTA RICA--1.0%
Republic of Costa Rica 144A 9.335%,
5/15/09(b).............................. Ba 1,080 1,098,900
CROATIA--0.9%
Croatia Series B 6.456%, 7/31/06(d)..... Baa 623 574,826
Croatia Series A 6.456%, 7/31/10(d)..... Baa 510 436,050
------------
1,010,876
------------
MEXICO--1.8%
United Mexican States Global Bond
11.375%, 9/15/16........................ Ba 360 408,600
United Mexican States Global Bond
11.50%, 5/15/26......................... Ba 1,240 1,483,350
------------
1,891,950
------------
PANAMA--1.0%
Republic of Panama 9.375%, 4/1/29....... Ba 1,140 1,087,275
PHILIPPINES--1.9%
Republic of Philippines 8.875%,
4/15/08................................. Ba 956 938,075
Republic of Philippines 9.875%,
1/15/19................................. Ba 1,050 1,040,813
------------
1,978,888
------------
POLAND--0.9%
Poland Bearer PDI 6%, 10/27/14(d)....... Baa 1,080 958,500
- -----------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $9,278,194) 9,605,076
- -----------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--5.1%
CHILE--1.5%
Compania Sud Americana de Vapores 144A
7.375%, 12/8/03(b)(c)................... BBB 175 168,635
Empresa Nacional de Electricidad SA
8.5%, 4/1/09............................ Baa 175 173,469
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
CHILE--CONTINUED
Petropower I Funding Trust 144A 7.36%,
2/15/14(b)(c)........................... BBB $ 1,339 $ 1,191,406
------------
1,533,510
------------
LUXEMBOURG--0.5%
Polska Telefonia Cyfrowa International
Finance II SA 144A 11.25%, 12/1/09(b)... B 540 556,200
MEXICO--2.1%
Banco Nacional de Mexico SA US$
Remittance Master Trust 144A 7.57%,
12/31/00(b)(c).......................... BBB+ 841 837,903
Nuevo Grupo Iusacell SA 144A 14.25%,
12/16/06(b)............................. B 570 594,225
Pemex Finance Ltd. 9.69%, 8/15/09....... Baa 770 793,100
------------
2,225,228
------------
VENEZUELA--1.0%
PDVSA Finance Ltd. 6.80%, 11/15/08...... A 1,350 1,103,963
- -----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $5,727,021) 5,418,901
- -----------------------------------------------------------------------------
<CAPTION>
SHARES
-------
PREFERRED STOCKS--0.7%
<S> <C> <C> <C>
REITS--0.7%
Home Ownership Funding 2, Step-down Pfd.
144A 13.338%(b)(d)...................... 900 724,372
- -----------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $747,125) 724,372
- -----------------------------------------------------------------------------
COMMON STOCKS--0.9%
PAPER & FOREST PRODUCTS--0.0%
Northampton Pulp LLC(g)(i).............. 1,955 $ 26,881
TELECOMMUNICATIONS (LONG DISTANCE)--0.9%
FirstCom Corp.(g)....................... 26,025 956,419
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $298,877) 983,300
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--100.2%
(IDENTIFIED COST $109,535,169) 107,068,974
- -----------------------------------------------------------------------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ -------
SHORT-TERM OBLIGATIONS--9.1%
<S> <C> <C> <C>
COMMERCIAL PAPER--9.1%
Donnelley (R.R.) & Sons Co. 5%, 1/3/00.. A-1 $ 3,880 3,878,922
Koch Industries, Inc. 7.50%, 1/3/00..... A-1+ 2,195 2,194,085
Ciesco L.P. 5.50%, 1/14/00.............. A-1+ 3,705 3,697,642
- -----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $9,770,649) 9,770,649
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--109.3%
(IDENTIFIED COST $119,305,818) 116,839,623(a)
Cash and receivables, less liabilities--(9.3%) (9,912,053)
------------
NET ASSETS--100.0% $106,927,570
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $1,504,261 and gross
depreciation of $4,199,221 for federal income tax purposes. At December 31,
1999, the aggregate cost of securities for federal income tax purposes was
$119,534,583.
(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 qualified institutional buyers. At December 31,
1999, these securities amounted to a value of $16,567,037 or 15.5% of net
assets.
(c) As rated by Standard & Poor's, Fitch or Duff & Phelps.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) When issued.
(f) All or a portion segregated as collateral.
(g) Non-income producing.
(h) Security in default.
(i) Security valued at fair value as determined in good faith by or under the
direction of the Trustees.
16
See Notes to Financial Statements
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $119,305,818) $ 116,839,623
Cash 3,885
Receivables
Interest and dividends 1,495,787
Investment securities sold 262,177
Fund shares sold 66,796
Other receivables 11,070
Prepaid expenses 1,792
--------------
Total assets 118,681,130
--------------
LIABILITIES
Payables
Investment securities purchased 6,310,390
Fund shares repurchased 5,282,972
Investment advisory fee 39,424
Financial agent fee 10,919
Transfer agent fee 8,719
Distribution fee 1,453
Accrued expenses 99,683
--------------
Total liabilities 11,753,560
--------------
NET ASSETS $ 106,927,570
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 116,888,755
Distribution in excess of net investment income (60,179)
Accumulated net realized loss (7,434,811)
Net unrealized depreciation (2,466,195)
--------------
NET ASSETS $ 106,927,570
==============
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $100,043,889) 3,347,974
Net asset value and offering price per share $29.88
CLASS Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $6,883,681) 230,338
Net asset value and offering price per share $29.89
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 7,514,533
Dividends 66,114
-------------
Total investment income 7,580,647
-------------
EXPENSES
Investment advisory fee 480,907
Distribution fee, Class Y 16,934
Financial agent fee 119,147
Professional 48,204
Transfer agent 42,642
Custodian 23,606
Trustees 19,913
Registration 16,035
Printing 10,259
Miscellaneous 33,462
-------------
Total expenses 811,109
Less expenses borne by investment adviser (206,400)
-------------
Net expenses 604,709
-------------
NET INVESTMENT INCOME 6,975,938
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (5,051,850)
Net change in unrealized appreciation (depreciation) on
investments (400,998)
-------------
NET LOSS ON INVESTMENTS (5,452,848)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,523,090
=============
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 6,975,938 $ 6,442,234
Net realized gain (loss) (5,051,850) (1,443,742)
Net change in unrealized appreciation
(depreciation) (400,998) (3,362,834)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,523,090 1,635,658
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (6,552,804) (5,993,836)
Net investment income, Class Y (423,134) (448,398)
In excess of net investment income,
Class X (89,248) (454,210)
In excess of net investment income,
Class Y (5,763) (33,979)
In excess of net realized gains,
Class X -- (405,385)
In excess of net realized gains,
Class Y -- (30,538)
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (7,070,949) (7,366,346)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (643,317
and 2,186,315 shares, respectively) 19,772,610 72,030,204
Net asset value of shares issued from
reinvestment of distributions
(180,452 and 205,651 shares,
respectively) 5,414,358 6,625,855
Cost of shares repurchased (1,075,587
and 985,246 shares, respectively) (33,215,963) (32,787,919)
------------ ------------
Total (8,028,995) 45,868,140
------------ ------------
CLASS Y
Proceeds from sales of shares (41,659
and 38,785 shares, respectively) 1,278,403 1,270,163
Net asset value of shares issued from
reinvestment of distributions
(14,291 and 15,744 shares,
respectively) 428,895 507,803
Cost of shares repurchased (63,654 and
19,173 shares, respectively) (1,967,205) (623,115)
------------ ------------
Total (259,907) 1,154,851
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (8,288,902) 47,022,991
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (13,836,761) 41,292,303
NET ASSETS
Beginning of period 120,764,331 79,472,028
------------ ------------
END OF PERIOD [INCLUDING DISTRIBUTION
IN EXCESS OF NET INVESTMENT
INCOME OF ($60,179) AND $0,
RESPECTIVELY] $106,927,570 $120,764,331
============ ============
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS X
------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------------------- 3/1/96 TO
1999 1998 1997 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 31.47 $ 33.17 $ 33.98 $ 33.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 2.01 2.26(5) 2.37(5) 2.03(5)
Net realized and unrealized gain (loss) (1.57) (1.58) 0.85 0.69
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.44 0.68 3.22 2.72
--------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (2.00) (2.09) (2.42) (1.96)
Dividends from net realized gains -- -- (1.43) (0.61)
In excess of net investment income (0.03) (0.16) (0.18) (0.01)
In excess of accumulated net realized gains -- (0.13) -- --
--------- --------- --------- ---------
TOTAL DISTRIBUTIONS (2.03) (2.38) (4.03) (2.58)
--------- --------- --------- ---------
Change in net asset value (1.59) (1.70) (0.81) 0.14
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 29.88 $ 31.47 $ 33.17 $ 33.98
========= ========= ========= =========
Total return 1.47% 1.99% 9.75% 8.24%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $100,044 $113,273 $72,747 $71,482
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 0.55% 0.55% 0.55% 0.55%(1)
Net investment income 6.54% 6.89% 6.92% 7.15%(1)
Portfolio turnover 142% 105% 176% 199%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS Y
------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------------------- 3/1/96 TO
1999 1998 1997 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 31.47 $ 33.18 $ 33.97 $ 33.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 1.96 2.18(5) 2.27(5) 1.98(5)
Net realized and unrealized gain (loss) (1.59) (1.59) 0.88 0.66
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.37 0.59 3.15 2.64
--------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (1.92) (2.02) (2.33) (1.89)
Dividends from net realized gains -- -- (1.43) (0.61)
In excess of net investment income (0.03) (0.15) (0.18) (0.01)
In excess of accumulated net realized gains -- (0.13) -- --
--------- --------- --------- ---------
TOTAL DISTRIBUTIONS (1.95) (2.30) (3.94) (2.51)
--------- --------- --------- ---------
Change in net asset value (1.58) (1.71) (0.79) 0.13
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 29.89 $ 31.47 $ 33.18 $ 33.97
========= ========= ========= =========
Total return 1.26% 1.72% 9.52% 7.98%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $6,884 $7,491 $6,725 $7,010
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.80% 0.80% 0.80% 0.80%(1)
Net investment income 6.29% 6.63% 6.65% 6.91%(1)
Portfolio turnover 142% 105% 176% 199%(2)
</TABLE>
(1) Annualized.
(2) Not annualized.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 0.74%,
0.77%, 0.77%, and 0.85% for the periods ended December 31, 1999, 1998, 1997,
and 1996, respectively.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 0.99%,
1.02%, 1.02%, and 1.10% for the periods ended December 31, 1999, 1998, 1997,
and 1996, respectively.
(5) Computed using average shares outstanding.
See Notes to Financial Statements 19
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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. Two Portfolios are offered for sale: Growth Stock Portfolio and Managed
Bond Portfolio.
Each Portfolio has distinct investment objectives. The Growth Stock Portfolio
seeks long-term appreciation of capital. The Managed Bond Portfolio seeks to
generate a high level of current income and capital appreciation.
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 accounting principles
generally accepted in the United States 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.
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, but does accrete 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 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.
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 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
20
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 (CONTINUED)
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.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
The Advisers to the Fund is Phoenix Investment Counsel, Inc. ("PIC"). PIC is
an indirect, majority-owned subsidiary of Phoenix Home Life Mutual Insurance
Company ("PHL"). As compensation for its services to the Fund, the Adviser is
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 $1+
Portfolio Billion Billion
- --------- -------- --------
<S> <C> <C>
Growth Stock Portfolio..................... 0.60% 0.55%
Managed Bond Portfolio..................... 0.45% 0.40%
</TABLE>
The Adviser has voluntarily agreed to assume total fund operating expenses of
each Portfolio, excluding interest, taxes, brokerage fees, commissions and
extraordinary expenses until the dates indicated below, to the extent that such
expenses exceed the following percentages of average annual net assets:
<TABLE>
<CAPTION>
Class X Class Y Dates
-------- -------- ----------------------
<S> <C> <C> <C>
Growth Stock Portfolio... 0.70% 0.95% December 31, 2001
Managed Bond Portfolio... 0.55% 0.80% December 31, 2001
</TABLE>
Seneca Capital Management LLC ("Seneca") became the subadviser to the Growth
Stock Portfolio effective August 6, 1999. For its services, Seneca is paid a fee
by PIC ranging from 0.10% to 0.275% of the average daily net assets of the
Growth Stock Portfolio. A majority of the equity interests of Seneca are owned
by Phoenix Investment Partners Ltd. ("PXP"), an indirect majority-owned
subsidiary of PHL.
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 year ended
December 31,
21
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 (CONTINUED)
1999, $908 was retained by the Distributor, $5,634 was paid out to unaffiliated
participants, and $60,596 was paid to W.S. Griffith, an indirect subsidiary of
PHL.
As Financial Agent of the Fund, PEPCO receives a financial agent fee equal to
the sum of (1) the documented cost of fund accounting and related services
provided by PFPC, Inc. (subagent to PEPCO), plus (2) the documented cost to
PEPCO to provide financial reporting, tax services and oversight of the
subagent's performance. The current fee schedule of PFPC, Inc. ranges from
0.085% to 0.0125% of the average daily net asset values of the Fund. Certain
minimum fees and fee waivers may apply.
PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the year ended December 31, 1999, transfer
agent fees were $78,415 of which PEPCO retained $71 which is net of fees paid to
State Street.
At December 31, 1999, PHL and affiliates held Portfolio shares which
aggregated the following:
<TABLE>
<CAPTION>
Aggregate
Net Asset
Shares Value
-------- ---------
<S> <C> <C>
Growth Stock Portfolio-Class X........... 7 $ 258
Growth Stock Portfolio-Class Y........... 6,599 242,315
Managed Bond Portfolio-Class X........... 4 120
Managed Bond Portfolio-Class Y........... 4,075 121,802
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended December 31, 1999
(excluding U.S. Government and agency securities and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
-------------- --------------
<S> <C> <C>
Growth Stock Portfolio.............. $ 86,823,447 $110,373,549
Managed Bond Portfolio.............. 116,064,737 103,188,805
</TABLE>
Purchases and sales of U.S. Government and agency securities during the year
ended December 31, 1999, aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
Managed Bond Portfolio............... $30,091,613 $45,739,011
</TABLE>
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market price of these
investments and the income they generate, as well as a Portfolio's ability to
repatriate such amounts.
5. OTHER
As of December 31, 1999, the Portfolios had shareholders who each individually
owned more than 10% of shares outstanding, none of whom are affiliated with PHL
or PXP as follows. In addition, affiliate holdings are presented in the table
located within Note 2.
<TABLE>
<CAPTION>
Number of % of Total
Shareholders Net Assets
------------ ----------
<S> <C> <C>
Growth Stock Portfolio................ 3 45.3%
</TABLE>
6. CAPITAL LOSS CARRYOVERS
The Managed Bond Portfolio has capital loss carryover of $6,473,513, expiring
in 2007 which may be used to offset future capital gains.
Under current tax law, capital loss realized after October 31 may be deferred
and treated as occurring on the first day of the following tax year. For the
calendar year ended December 31, 1999, the Managed Bond Portfolio elected to
defer losses occurring between November 1, 1999 and December 31, 1999 in the
amount of $893,129.
7. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Portfolios have recorded
several reclassifications in the capital accounts. These reclassifications have
no impact on the net asset value of the Portfolio and are designed generally to
present undistributed income and realized gains on a tax basis which is
considered to be more informative to the shareholder. As of December 31, 1999,
the Portfolios recorded the following reclassifications to increase (decrease)
the accounts listed below:
<TABLE>
<CAPTION>
Undistributed Accumulated Capital paid in
net investment net realized on shares of
income (loss) gain (loss) beneficial interest
-------------- ------------ -------------------
<S> <C> <C> <C>
Managed Bond
Portfolio.......... 34,832 (148,531) 113,699
</TABLE>
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended December 31, 1999, the following Portfolio
distributed long-term capital gain dividends as follows:
<TABLE>
<S> <C>
Growth Stock Portfolio................... $11,320,623
</TABLE>
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.
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Trustees and Shareholders of
Phoenix Duff & Phelps Institutional Mutual Funds
In our opinion, the accompanying statements of assets and liabilities,
including the schedule of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Growth Stock Portfolio and Managed Bond Portfolio (constituting the Phoenix
Duff & Phelps Institutional Mutual Funds, hereafter referred to as the "Fund")
at December 31, 1999, the results of each of their operations for the year then
ended, the changes in each of their net assets for the two years in the period
then ended and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 11, 2000
23
<PAGE>
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
A special meeting of Shareholders of the Growth Stock Portfolio of
Phoenix-Duff & Phelps Institutional Funds was held on August 6, 1999 to approve
the following matter:
1. Approval of a subadvisory agreement with Seneca Capital Management LLC
On the record date for this meeting there were 1,668,987 shares outstanding and
75.80% of the shares outstanding and entitled to vote were present by proxy.
NUMBER OF VOTES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- --------- ---------
<S> <C> <C> <C>
1. Approval of subadvisory agreement 879,701 101,954 283,419
</TABLE>
24
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
101 Munson Street
Greenfield, Massachusetts 01301
TRUSTEES
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
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
William R. Moyer, Executive Vice President
Gail P. Seneca, Senior Vice President
James D. Wehr, Senior Vice President
Robert S. Driessen, Vice President
Marvin E. Flewellen, Vice President
Ron K. Jacks, Vice President
Michael Kearney, Vice President
Richard D. Little, Vice President
Diane L. Mustain, Vice President
Christopher Saner, Vice President
Michael Schatt, Vice President
Andrew Szabo, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
INVESTMENT ADVISERS
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
The Chase Manhattan Bank
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachussetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
www.phoenixinvestments.com
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PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield CT 06083-2200
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 092 (2/00)
