AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 2000
REGISTRATION NOS. 811-9140
33-80057
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 14
AND/OR
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 16
(CHECK APPROPRIATE BOX OR BOXES.)
----------
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
----------
101 MUNSON STREET, GREENFIELD, MA 01301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(800) 814-1897
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
----------
PAMELA S. SINOFSKY
ASSISTANT VICE PRESIDENT AND ASSISTANT COUNSEL
PHOENIX INVESTMENT PARTNERS, LTD.
56 PROSPECT STREET
HARTFORD, CONNECTICUT 06115
(NAME AND ADDRESS OF AGENT FOR SERVICE)
----------
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
|X| on October 31, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Phoenix Duff & Phelps Institutional Mutual Funds, a Delaware business trust
(the "Registrant") is the successor issuer to Phoenix Duff & Phelps
Institutional Mutual Funds, a Massachusetts business trust (the "Predecessor").
This Post-Effective Amendment has been filed for the purpose of adopting under
the Securities Act of 1933, the Securities Exchange Act of 1934 and the
Investment Company Act of 1940 the Registration Statement on Form N-1A (nos.
33-8057 and 811-9140) of the Predecessor pursuant to the provisions of Rule 414
under the Securities Act of 1933. In accordance with the provisions of paragraph
(d) of Rule 414, this Registration Statement also revises and sets forth
additional information arising in connection with Registrant's change of
domicile.
================================================================================
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
CROSS REFERENCE SHEET PURSUANT TO RULE 495(a)
UNDER THE SECURITIES ACT OF 1933
PART A
INFORMATION REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
<S>
<C>
ITEM NUMBER FORM N-1A, PART A PROSPECTUS CAPTION
----------------------------- ------------------
1. Front and Back Cover Pages............................... Cover Page, Back Cover Page
2. Risk/Return Summary Investments, Risks, Performance Investment Risk and Return Summary
3. Risk/Return Summary Fee Table............................ Fund Expenses
4. Investment Objectives, Principal Investment Strategies,
and Related Risks........................................ Investment Risk and Return Summary
5. Management's Discussion of Fund Performance.............. Performance Tables
6. Management, Organization, and Capital Structure.......... Management of the Portfolio
7. Shareholder Information.................................. Pricing of Portfolio Shares;
Purchase Options; Your Account;
How to Buy Shares; How to Sell
Shares; Things to Know When
Selling Shares; Account Policies;
Tax Status of Distributions
8. Distribution Arrangements................................ Purchase Options
9. Financial Highlights Information......................... Financial Highlights
</TABLE>
PART B
INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
<S> <C>
ITEM NUMBER FORM N-1A, PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
----------------------------- -------------------------------------------
10. Cover Page and Table of Contents......................... Cover Page, Table of Contents
11. Fund History............................................. The Fund
12. Description of the Fund and Its Investment Risks......... Investment Objectives and
Policies; Investment
Restrictions
13. Management of the Fund................................... Management of the Fund
14. Control Persons and Principal Holders of Securities...... Management of the Fund
15. Investment Advisory and Other Services................... Services of the Advisers; The
Distributor; Distribution Plans;
Other Information
16. Brokerage Allocation and Other Practices................. Portfolio Transactions and
Brokerage
17. Capital Stock and Other Securities...................... Other Information
18. Purchase, Redemption, and Pricing of Shares.............. Net Asset Value; How to Buy
Shares; Redemption of Shares;
Tax Sheltered Retirement
Plans; Investor Account Services
19. Taxation of the Fund..................................... Dividends, Distributions and Taxes
20. Underwriters............................................. The Distributor
21. Calculation of Performance Data.......................... Performance Information
22. Financial Statements..................................... Financial Statements
</TABLE>
PART C
INFORMATION REQUIRED TO BE INCLUDED IN PART C IS SET FORTH UNDER
THE APPROPRIATE ITEM, SO NUMBERED, IN PART C OF THIS REGISTRATION STATEMENT.
<PAGE>
Phoenix Investment Partners
Prospectus
October 31, 2000
Phoenix
Duff & Phelps
Institutional
Mutual Funds
Growth Stock Portfolio
Managed Bond Portfolio
Neither the Securities and Exchange
Commission nor any state securities
commission has approved or
disapproved of these securities or
determined if this prospectus is
truthful or complete. Any representation
to the contrary is a criminal offense.
This prospectus contains important
information that you should know
before investing in the Growth Stock
Portfolio and the Managed Bond
Portfolio. Please read it carefully and
retain it for future reference.
[Logo] PHOENIX
INVESTMENT PARTNERS
<PAGE>
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
Investment Risk and Return Summary......................... 1
Fund Expenses.............................................. 4
Management of the Portfolio................................ 5
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
Investment Risk and Return Summary......................... 8
Fund Expenses.............................................. 12
Management of the Portfolio................................ 13
Additional Investment Techniques................................ 15
Pricing of Portfolio Shares..................................... 17
Purchase Options................................................ 18
Your Account.................................................... 19
How to Buy Shares............................................... 19
How to Sell Shares.............................................. 20
Things You Should Know When Selling Shares...................... 20
Account Policies................................................ 21
Tax Status of Distributions..................................... 22
Financial Highlights............................................ 23
Additional Information.......................................... 27
[triangle] Phoenix
Duff & Phelps
Institutional
Mutual
Funds
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL
GROWTH STOCK PORTFOLIO
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix Duff & Phelps Institutional Growth Stock Portfolio has an investment
objective of long-term capital appreciation. There is no guarantee that the
portfolio will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] Under normal conditions, the portfolio invests at least 65% of its
total assets in any class or type of stock believed by the subadviser
to offer potential for capital appreciation over both the intermediate
and long term. Most of the portfolio's investments will be in common
stocks.
[arrow] The adviser manages the portfolio's investment program and general
operation of the portfolio and the subadviser manages the investments
of the portfolio.
[arrow] The subadviser's strategy involves investments in two types of growth
stocks: well-established companies that have long and proven track
records of financial success through full economic cycles and companies
that are growing rapidly and that the subadviser believes have the
potential to exceed earnings expectations. The former are generally
large, well-known companies that have established histories of
profitability and/or dividend payment. The latter are generally
mid-range capitalization companies with high growth potential. Using
statistical modeling and fundamental analysis, the subadviser evaluates
earnings strength, quality and sustainability, as well as stock
valuations and quality of company management.
Temporary Defensive Strategy: If the subadviser believes that market conditions
are not favorable to the portfolio's principal strategies, the portfolio may
invest in fixed income securities with or without warrants or conversion
features, and it may hold onto its cash or invest without limit in cash
equivalents. When this happens, the portfolio may not achieve its investment
objective.
Please see "Additional Investment Techniques" for other investment techniques of
the portfolio.
PRINCIPAL RISKS
If you invest in this portfolio, you risk that you may lose your investment.
GENERAL
The value of the portfolio's investments that supports your share value can
decrease as well as increase. If between the time you purchase shares and the
time you sell shares the value of the portfolio's investments decreases, you
will lose money.
Phoenix Duff & Phelps Institutional Growth Stock Portfolio 1
<PAGE>
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the portfolio invests
can be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
rise faster when markets rise and drop more sharply when markets fall.
SMALL AND MEDIUM CAPITALIZATIONS
Companies with smaller capitalizations are often companies with a limited
operating history or companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments. Such developments
can have a significant impact or negative effect on small and medium
capitalization companies and their stock performance and can make investment
returns highly volatile. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.
2 Phoenix Duff & Phelps Institutional Growth Stock Portfolio
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix Duff & Phelps Institutional Growth Stock Portfolio. The bar chart
shows changes in the portfolio's Class X Shares performance from year to year
over the past ten years.(1) The table shows how the portfolio's average annual
returns compare to those of a broad-based securities market index. 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 portfolio). The objectives, policies, guidelines and
restrictions of the separate account are materially equivalent to those of the
portfolio. The performance of the separate account has been restated to reflect
the deduction of fees and expenses applicable to the portfolio's Class X Shares
and Class Y Shares, respectively. The portfolio's past performance is not
necessarily an indication of how the portfolio will perform in the future.
[GRAPHIC OMITTED]
Calendar Year Annual Return (%)
1990 3.25
1991 40.58
1992 2.19
1993 10.04
1994 -0.90
1995 34.73
1996 11.34
1997 25.76
1998 31.20
1999 33.93
(1) During the 10-year period shown in the chart above, the highest return for a
quarter was 26.91% (quarter ending December 31, 1999) and the lowest return for
a quarter was -12.05% (quarter ending September 30, 1990). Year-to-date
performance (through September 30, 2000) was 1.17%.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/99) One Year Five Years Ten 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 Composite Stock Price Index(1) 21.14% 28.66% 18.25%
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Stock Composite Stock Price Index is an unmanaged, commonly used
measure of stock market total return performance.
Phoenix Duff & Phelps Institutional Growth Stock Portfolio 3
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the portfolio.
<TABLE>
<CAPTION>
CLASS X CLASS Y
SHARES SHARES
------ ------
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None None
Maximum Sales Charge (load) Imposed on Reinvested None None
Dividends
Redemption Fee None None
Exchange Fee None None
-------------------------------------
CLASS X CLASS Y
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.60% 0.60%
Distribution and Service (12b-1) Fees(b) None 0.25%
Other Expenses 0.35% 0.35%
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES(a) 0.95% 1.20%
==== ====
----------
</TABLE>
(a) The portfolio's investment adviser has agreed to reimburse or waive through
December 31, 2001, total operating expenses to the extent that such expenses
exceed 0.70% for Class X Shares and 0.95% for Class Y Shares. Actual Total
Annual Operating Expenses for the portfolio, after expense reimbursement, were
0.70% for Class X Shares and 0.95% for Class Y Shares.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the
portfolio with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the portfolio for the time
periods indicated and then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return each year
and that the portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
4 Phoenix Duff & Phelps Institutional Growth Stock Portfolio
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class X $97 $303 $525 $1,166
-----------------------------------------------------------------------------------------------------------------
Class Y $122 $381 $660 $1,455
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the table above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the portfolio's investment
adviser. Refer to the section "Management of the Portfolio" for information
about expense reimbursement.
MANAGEMENT OF THE PORTFOLIO
--------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
portfolio and is located at 56 Prospect Street, Hartford, Connecticut 06115.
Phoenix acts as the investment adviser for 14 fund companies totaling 37 mutual
funds, as subadviser to two fund companies totaling three mutual funds and as
adviser to institutional clients. As of December 31, 1999, Phoenix had $25.7
billion in assets under management. Phoenix has acted as an investment adviser
for over sixty years.
Seneca Capital Management LLC ("Seneca") is the investment subadviser to the
portfolio and is located at 909 Montgomery Street, San Francisco, California
94133. Seneca acts as subadviser to nine other mutual funds and acts as
investment adviser to institutions and individuals. As of December 31, 1999,
Seneca had $9.2 billion in assets under management. Seneca has been (with its
predecessor GMG/Seneca Capital Management LP ("GMG/Seneca")) an investment
adviser since 1989.
Subject to the direction of the portfolio's Board of Trustees, Phoenix is
responsible for managing the portfolio's investment program and the general
operations of the portfolio. Seneca, as subadviser, is responsible for the
day-to-day management of the portfolio's investments. Seneca manages each fund's
assets to conform with the investment policies as described in this prospectus.
The portfolio pays Phoenix a monthly investment management fee that is accrued
daily against the value of the portfolio's net assets at the following annual
rates:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
$1st billion $1+ billion
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.60% 0.55%
-----------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio 5
<PAGE>
Phoenix pays Seneca a subadvisory fee at the following rates:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Rate for First $67,800,000 Rate for Next $932,200,000 Rate for Excess over $1 Billion
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
0.10% 0.30% 0.275%
-----------------------------------------------------------------------------------------------------------
</TABLE>
The adviser has voluntarily agreed to assume total operating expenses of the
portfolio (excluding interest, taxes, brokerage fees, commissions and
extraordinary expenses) until December 31, 2001, to the extent that such
expenses exceed the following percentages of the average annual net asset values
of the portfolio:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Class X Shares Class Y Shares
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Stock Portfolio 0.70% 0.95%
-----------------------------------------------------------------------------------------------------------
</TABLE>
During the portfolio's last fiscal year, the portfolio paid total management
fees of $391,685. The ratio of management fees to average net assets for the
fiscal year ended December 31, 1999 was 0.60%.
PORTFOLIO MANAGEMENT
Investment and trading decisions for the portfolio are made by a team of
managers and analysts headed by Gail P. Seneca. The team leaders, which include
Ms. Seneca, Richard D. Little and Ronald K. Jacks, are primarily responsible for
the day-to-day decisions related to the portfolio.
Gail P. Seneca. Ms. Seneca has been the Chief Executive and Investment Officer
of Seneca or GMG/Seneca since November 1989. Ms. Seneca serves as Co-Manager of
the Phoenix-Seneca Growth Fund and Phoenix-Seneca Strategic Theme Fund of
Phoenix Strategic Equity Series Fund. She also serves as a team leader for each
of the Phoenix-Seneca Funds. From October 1987 until October 1989, Ms. Seneca
was Senior Vice President of the Asset Management Division of Wells Fargo Bank
and from October 1983 to September 1987, she was Investment Strategist and
Portfolio Manager for Chase Lincoln Bank, heading the fixed income division.
Richard D. Little. Mr. Little has been Director of Equities with Seneca or
GMG/Seneca since December 1989. Mr. Little serves as Co-Manager of the
Phoenix-Seneca Growth Fund and Phoenix-Seneca Strategic Theme Fund of Phoenix
Strategic Equity Series Fund. He also serves as Portfolio Manager for the
Phoenix-Seneca Mid Cap "EDGE"[SM] Fund of the Phoenix-Seneca Funds. Before
joining GMG/Seneca, Mr. Little held positions as an analyst, board member, and
regional manager with Smith Barney, NatWest Securities, and Montgomery
Securities.
6 Phoenix Duff & Phelps Institutional Growth Stock Portfolio
<PAGE>
Ronald K. Jacks. Mr. Jacks has been a Portfolio Manager with Seneca or
GMG/Seneca since July 1990. Mr. Jacks serves as Co-Manager of the Phoenix-Seneca
Growth Fund and Phoenix-Seneca Strategic Theme Fund of Phoenix Strategic Equity
Series Fund. He also serves as Portfolio Manager for the Phoenix-Seneca Mid Cap
"EDGE"[SM] Fund of the Phoenix-Seneca Funds. He was a Secretary of
Phoenix-Seneca Funds from February 1996 to February 1998 and was a Trustee of
Phoenix-Seneca Funds from February 1996 to June 1997.
Phoenix Duff & Phelps Institutional Growth Stock Portfolio 7
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL
MANAGED BOND PORTFOLIO
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix Duff & Phelps Institutional Managed Bond Portfolio has an investment
objective to generate a high level of current income and appreciation of capital
consistent with prudent investment risk. There is no guarantee that the
portfolio will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] Under normal circumstances, the portfolio invests at least 80% of its
total assets in bonds rated in the four highest rating categories at
the time of investment, or if unrated, are of comparable quality in the
adviser's opinion. The portfolio may invest in foreign securities.
[arrow] Securities are selected using a "sector rotation" approach. The adviser
seeks to adjust the portion of portfolio investment in various
"sectors," such as U.S. corporates, foreign corporates, U.S.
Governments and foreign governments, as well as asset-backed,
mortgage-backed and municipal bonds, and the selections within sectors
to obtain higher relative returns. The adviser selects those sectors
that it believes offer attractive values. Securities within sectors are
selected based on general economic and financial conditions and the
issuer's business, management, cash, assets, earnings and stability.
Securities selected for investment are those that the adviser believes
offer the best potential for total return based on risk-to-reward
tradeoff.
[arrow] Interest rate risk is managed by a duration neutral strategy. The
adviser attempts to maintain the duration of the portfolio at a level
similar to that of its benchmark, the Lehman Brothers Aggregate Bond
Index. Duration measures the interest rate sensitivity of a fixed
income security by assessing and weighting the present value of the
security's payment pattern. Generally, the longer the maturity the
greater the duration and therefore the greater effect interest rate
changes have on the price of the security. By maintaining the duration
of the portfolio at a level similar to that of the portfolio's
benchmark, the adviser believes that the portfolio's exposure to
interest rate risk is more consistent with its benchmark's risk profile
than that of a portfolio that attempts to predict future interest rate
changes. On September 30, 2000, the modified adjusted duration of the
Lehman Brothers Aggregate Bond Index was 4.83 years.
[arrow] Securities selected for portfolio investment may be of any maturity.
However, the adviser attempts to maintain a maturity composition
similar to that of its benchmark in an effort to maintain an interest
rate risk profile consistent with the benchmark. Maturity composition
refers to the percentage of securities within specific maturity ranges
as well as the aggregate weighted average portfolio maturity. On
September 30, 2000, the maturity of the Lehman Brother's Aggregate Bond
Index was 8.69 years.
8 Phoenix Duff & Phelps Institutional Managed Bond Portfolio
<PAGE>
[arrow] Securities are generally sold when the adviser believes the issue has
realized its value or to take advantage of attractive values in other
sectors.
Temporary Defensive Strategy: When in the opinion of the adviser, current cash
needs or market or economic conditions warrant, the portfolio may temporarily
retain cash or invest part or all of its assets in cash equivalents. When this
happens, the portfolio may not achieve its investment objective.
Please see "Additional Investment Techniques" for other investment techniques of
the portfolio.
PRINCIPAL RISKS
If you invest in this portfolio, you risk that you may lose your investment.
GENERAL
The value of your shares and the level of income you receive are subject to
risks associated with the types of securities selected for portfolio investment.
Neither the portfolio nor the adviser can assure you that a particular level of
income will consistently be achieved or that the value of the portfolio's
investments that supports your share value will increase. If the value of
portfolio investments decreases, your share value will decrease.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the portfolio invests
can be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, the lower a security's credit rating, the greater
chance that the issuer will be unable to make such payments when due. Credit
risk is determined at the date of investment. If after the date of purchase, the
rating declines, the portfolio is not obligated to sell the security.
FOREIGN INVESTING
Investments in non-U.S. companies involve additional risks and conditions
including differences in accounting standards, generally higher commission
rates, differences in transaction settlement systems, political instability, and
the possibility of confiscatory or expropriation taxes. Political and economic
uncertainty in foreign countries, as well as less public information about
foreign investments, may negatively impact the portfolio's investments.
Dividends and other income payable on foreign securities may also be subject to
foreign taxes. Some investments may be made in currencies other than U.S.
dollars that will fluctuate in value as a result of changes in the currency
exchange rate. Foreign markets and currencies may not perform as well as U.S.
markets.
Phoenix Duff & Phelps Institutional Managed Bond Portfolio 9
<PAGE>
Risks associated with foreign investments may be intensified in emerging market
countries, and such countries and companies doing business in such countries may
not have the same range of opportunities and have more obstacles to financial
success than their counterparts in developed nations.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the
portfolio may hold securities with longer maturities, the net asset value of the
portfolio may experience greater price fluctuations in response to changes in
interest rates than portfolios that hold only securities with short-term
maturities. Prices of longer-term securities are affected more by interest rate
changes than prices of shorter-term securities.
LONG-TERM MATURITIES
Fixed income securities with longer maturities may be subject to greater price
fluctuations due to interest rate, tax law and general market changes.
MORTGAGE-BACKED AND ASSET BACKED SECURITIES
Early payoffs on the underlying loans in mortgage-backed and asset-backed
securities may result in the portfolio receiving less income than originally
anticipated. The variability in prepayments will tend to limit price gains when
interest rates drop and exaggerate price declines when interest rates rise. In
the event of high prepayments, the portfolio may be required to invest the
proceeds at lower interest rates, causing the portfolio to earn less than if the
prepayments had not occurred.
MUNICIPAL SECURITIES
Principal and interest payments on municipal securities may not be guaranteed by
the issuing body and may be payable only from monies derived from a particular
source (so called "revenue bonds"). If the source does not perform as expected,
principal and income payments may not be made on time or at all. In addition,
the market for municipal securities is often thin and can be temporarily
affected by large purchases and sales, including those by the portfolio. General
conditions in the financial markets and the size of a particular offering may
also negatively affect municipal securities' returns.
U.S. GOVERNMENT SECURITIES
Obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities and backed by full faith and credit of the
United States only guarantee principal and interest will be timely paid to
holders of the securities. The entities do not guarantee that the value of
portfolio shares will increase.
10 Phoenix Duff & Phelps Institutional Managed Bond Portfolio
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix Duff & Phelps Institutional Managed Bond Portfolio. The bar chart
shows changes in the portfolio's Class X Shares performance from year to year
over the past ten years.(1) The table shows how the portfolio's average annual
returns compare to those of a broad-based securities market index. 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 portfolio). The objectives, policies, guidelines and
restrictions of the separate account are materially equivalent to those of the
portfolio. The performance of the separate account has been restated to reflect
the deduction of fees and expenses applicable to the portfolio's Class X Shares
and Class Y Shares, respectively. The portfolio's past performance is not
necessarily an indication of how the portfolio will perform in the future.
[GRAPHIC OMITTED]
Calendar Year Annual Return (%)
1990 3.71
1991 18.72
1992 8.90
1993 12.14
1994 -4.87
1995 19.97
1996 8.70
1997 9.75
1998 1.99
1999 1.47
(1) During the 10-year period shown in the chart above, the highest return for a
quarter was 8.54% (quarter ending June 30, 1995) and the lowest return for a
quarter was -3.18% (quarter ending March 31, 1994). Year-to-date performance
(through September 30, 2000) was 6.21%.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/99) One Year Five Years Ten 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(1) -0.83% 7.73% 7.70%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond market total return performance.
Phoenix Duff & Phelps Institutional Managed Bond Portfolio 11
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the portfolio.
<TABLE>
<CAPTION>
CLASS X CLASS Y
SHARES SHARES
------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None None
Maximum Sales Charge (load) Imposed on Reinvested None
Dividends None
Redemption Fee None None
Exchange Fee None None
--------------------------------------
CLASS X CLASS Y
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.45% 0.45%
Distribution and Service (12b-1) Fees(b) None 0.25%
Other Expenses 0.29% 0.29%
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES(a) 0.74% 0.99%
==== ====
----------
</TABLE>
(a) The portfolio's investment adviser has agreed to reimburse or waive through
December 31, 2001, total operating expenses to the extent that such expenses
exceed 0.55% for Class X Shares and 0.80% for Class Y Shares. Actual Total
Annual Operating Expenses for the portfolio, after expense reimbursement, are
0.55% for Class X Shares and 0.80% for Class Y Shares.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the
portfolio with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the portfolio for the time
periods indicated and then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return each year
and that the portfolio operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
12 Phoenix Duff & Phelps Institutional Managed Bond Portfolio
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class X $76 $237 $411 $918
-----------------------------------------------------------------------------------------------------------------
Class Y $101 $315 $547 $1,213
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the table above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the portfolio's investment
adviser. Refer to the section "Management of the Portfolio" for information
about expense reimbursement.
MANAGEMENT OF THE PORTFOLIO
--------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
portfolio and is located at 56 Prospect Street, Hartford, Connecticut 06115.
Phoenix acts as the investment adviser for 14 fund companies totaling 37 mutual
funds, as subadviser to two fund companies totaling three mutual funds and as
adviser to institutional clients. As of December 31, 1999, Phoenix had $25.7
billion in assets under management. Phoenix has acted as an investment adviser
for over sixty years.
Subject to the direction of the portfolio's Board of Trustees, Phoenix is
responsible for managing the portfolio's investment program and the day-to-day
management of the portfolio's investments. Phoenix manages the portfolio's
assets to conform with the investment policies as described in this prospectus.
The portfolio pays Phoenix a monthly investment management fee that is accrued
daily against the value of the portfolio's net assets at the following annual
rates:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
$1st billion $1+ billion
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Management Fee 0.45% 0.40%
------------------------------------------------------------------------------------------------------------
</TABLE>
The adviser has voluntarily agreed to assume total operating expenses of the
portfolio (excluding interest, taxes, brokerage fees, commissions and
extraordinary expenses) until December 31, 2001, to the extent that such
expenses exceed the following percentages of the average annual net asset values
of the portfolio:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Class X Shares Class Y Shares
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Managed Bond Portfolio 0.55% 0.80%
------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio 13
<PAGE>
During the portfolio's last fiscal year, the portfolio paid total management
fees of $480,907. The ratio of management fees to average net assets for the
fiscal year ended December 31, 1999 was 0.45%.
PORTFOLIO MANAGEMENT
James D. Wehr serves as Portfolio Manager of the portfolio and as such is
responsible for the day-to-day management of the portfolio's holdings. Mr. Wehr
is Senior Vice President, Fixed Income, of Phoenix; formerly he was Managing
Director, Fixed Income (1996-1998) and Vice President (1991-1996) of Phoenix.
Mr. Wehr served as Portfolio Manager of the Phoenix Home Life Separate Account P
(predecessor to the Managed Bond Portfolio) from 1990 to 1996. He also served as
Portfolio Manager of Phoenix-Goodwin Tax-Exempt Bond Fund of the Phoenix
Multi-Portfolio Fund from 1988 to 1997 and of Phoenix-Goodwin California Tax
Exempt Bond Fund from 1993 to 1997.
14 Phoenix Duff & Phelps Institutional Managed Bond Portfolio
<PAGE>
ADDITIONAL INVESTMENT TECHNIQUES
--------------------------------------------------------------------------------
In addition to the Principal Investment Strategies and Principal Risks, Phoenix
Duff & Phelps Institutional Growth Stock Portfolio ("Growth Stock") and Phoenix
Duff & Phelps Institutional Managed Bond Portfolio ("Managed Bond") may engage
in the following investment techniques as indicated:
DERIVATIVES
The portfolios may write exchange-traded, covered call options and purchase put
and call options on securities and securities indices, and may enter into
futures contracts and related options. The portfolios may also enter into swap
agreements relating to interest rates and securities indices. The portfolios may
use these techniques to hedge against changes in interest rates, foreign
currency exchange rates, changes in securities prices or other factors affecting
the value of their investments, or as part of their overall investment
technique. If the adviser fails to correctly predict these changes, the
portfolios can lose money. Derivatives transactions may be less liquid than
other securities and the counterparty to such transactions may not perform as
expected. In addition, purchasing call or put options involves the risk that a
portfolio may lose the premium it paid plus transaction costs. Futures and
options involve market risk in excess of their value.
FOREIGN INVESTING
Growth Stock may invest in foreign securities. Foreign markets and currencies
may not perform as well as U.S. markets, and dividends and other income payable
on foreign securities may be subject to foreign taxes.
HIGH YIELD-HIGH RISK SECURITIES
Managed Bond may invest in high yield-high risk securities. High yield-high risk
securities (junk bonds) typically entail greater price volatility and principal
and interest rate risk. There is a greater chance that an issuer will not be
able to make principal and interest payments on time. Analysis of the
creditworthiness of issuers of high yield-high risk securities may be complex,
and as a result, it may be more difficult for the adviser to accurately predict
risk.
ILLIQUID SECURITIES
The portfolios may invest in illiquid securities. Illiquid securities may
include repurchase agreements with maturities of greater than seven days.
Illiquid and restricted securities may be difficult to sell or may be sold only
pursuant to certain legal restrictions. Difficulty in selling securities may
result in a loss to the portfolios or entail expenses not normally associated
with the sale of a security.
Phoenix Duff & Phelps Institutional Mutual Funds 15
<PAGE>
REPURCHASE AGREEMENTS
The portfolios may invest in repurchase agreements. Default or insolvency of the
other party presents risks to the portfolios.
SECURITIES LENDING
The portfolios may lend portfolio securities to increase its investment returns.
If the borrower is unwilling or unable to return the borrowed securities when
due, the portfolios can suffer losses.
SHORT-TERM INVESTMENTS
The portfolios may invest in short-term instruments, including instruments that
are not U.S. Government securities. Such short-term instruments are high grade
short-term securities such as commercial paper, drafts, municipal notes,
bankers' acceptances, and certificates of deposit.
UNRATED FIXED INCOME SECURITIES
The portfolios may invest in unrated securities. Unrated securities may not be
lower in quality than rated securities, but due to their perceived risk they may
not have as broad a market as rated securities. Analysis of unrated securities
is more complex than for rated securities, making it more difficult for the
adviser to accurately predict risk.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES
The portfolios may purchase securities on a when-issued or delayed-delivery
basis. The value of the security on settlement date may be more or less than the
price paid as a result of changes in interest rates and market conditions. If
the value on settlement date is less, the value of your shares may decline.
The portfolios may buy other types of securities or employ other portfolio
management techniques. Please refer to the Statement of Additional Information
for more detailed information about these and other investment techniques of the
portfolios.
16 Phoenix Duff & Phelps Institutional Mutual Funds
<PAGE>
PRICING OF PORTFOLIO SHARES
--------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
Each portfolio calculates a share price for each class of its shares. The share
price is based on the net assets of the portfolio and the number of outstanding
shares. In general, each portfolio calculates net asset value by:
o adding the values of all securities and other assets of the
portfolio,
o subtracting liabilities, and
o dividing the result by the total number of outstanding shares
of the portfolio.
Asset Value: Each portfolio's investments are valued at market value. If market
quotations are not available, a portfolio determines a "fair value" for an
investment according to rules and procedures approved by the Trustees. Foreign
and domestic debt securities (other than short-term investments) are valued on
the basis of broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to reflect the fair value
of such securities. Foreign and domestic equity securities are valued at the
last sale price or, if there has been no sale that day, at the last bid price,
generally. Short-term investments having a remaining maturity of sixty days or
less are valued at amortized cost, which the Trustees have determined
approximates market value.
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities are deducted from the assets of each class. Expenses and liabilities
that are not class specific (such as management fees) are allocated to each
class in proportion to each class' net assets, except where an alternative
allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of the
portfolio. The resulting amount for each class is then divided by the number of
shares outstanding of that class to produce each class' net asset value per
share.
The net asset value per share of each class of each portfolio is determined on
days when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time). A portfolio will not calculate
its net asset values per share on days when the NYSE is closed for trading. If
the portfolios hold securities that are traded on foreign exchanges that trade
on weekends or other holidays when the portfolios do not price their shares, the
net asset value of the portfolios' shares may change on days when shareholders
will not be able to purchase or redeem the portfolios' shares.
Phoenix Duff & Phelps Institutional Mutual Funds 17
<PAGE>
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the portfolios' authorized agents prior to the close
of regular trading on the NYSE (normally 4:00 PM eastern time) will be executed
based on that day's net asset value. Shares credited to your account from the
reinvestment of portfolio distributions will be in full and fractional shares
that are purchased at the closing net asset value on the next business day on
which the portfolios' net asset value is calculated following the dividend
record date.
PURCHASE OPTIONS
--------------------------------------------------------------------------------
The portfolios presently offer two classes of shares that have different minimum
investment requirements and distribution charges (see "Fund Expenses" previously
in this prospectus). For Class Y Shares, the portfolios have adopted a
distribution and service plan allowed under Rule 12b-1 of the Investment Company
Act of 1940 that authorizes the portfolios to pay distribution and service fees
for the sale of shares and for services provided to shareholders.
Because these fees are paid out of the portfolio's assets on an on-going basis,
over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.
Shares of the portfolios are offered primarily to institutional investors and
corporate, public, union and governmental pension plans.
To purchase Class X Shares, you must initially purchase shares whose net asset
value exceeds $5 million. To purchase Class Y Shares, you must initially
purchase shares whose net asset value exceeds $1 million.
The minimum initial investment requirements are waived for purchases by:
o institutional investors and corporate, public, union and
governmental pension plans which have been invested in certain
separate accounts of Phoenix Home Life Mutual Insurance Company as
of March 1, 1996;
o trust companies, bank trust departments, broker-dealers,
financial planners and investment advisers for portfolios over
which such entity charges an account management fee and which are
held in a fiduciary, agency, advisory, custodial or similar
capacity; and
o institutional investors and corporate, public, union and
governmental pension plans which are investing redemption proceeds
from the reorganization or merger of other investment companies.
The minimum subsequent investment for Class X and Class Y Shares is $100.
18 Phoenix Duff & Phelps Institutional Mutual Funds
<PAGE>
You will pay no sales charges at any time on Class X or Class Y Shares. There
are no distribution and service fees applicable to Class X Shares. Class Y
Shares are subject to a distribution and service fee of 0.25% annually.
The portfolios reserve the right to refuse a purchase order for any reason.
YOUR ACCOUNT
--------------------------------------------------------------------------------
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase, as well as all
phases of your investment program.
HOW TO BUY SHARES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
TO OPEN AN ACCOUNT
---------------------------------------------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimum investments or limitations on buying shares.
---------------------------------------------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it with a check payable to the
portfolio. Mail them to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301.
---------------------------------------------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 814-1897 for instructions.
---------------------------------------------------------------------------------------------------------------
By telephone exchange Call us at (800) 814-1897.
---------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix Duff & Phelps Institutional Mutual Funds 19
<PAGE>
HOW TO SELL SHARES
--------------------------------------------------------------------------------
You have the right to have the portfolios buy back shares at the net asset value
next determined after receipt of a redemption order by the portfolios' Transfer
Agent or an authorized agent. Subject to certain restrictions, shares may be
redeemed by telephone or in writing. In addition, shares may be sold through
securities dealers, brokers or agents who may charge customary commissions or
fees for their services. The portfolios do not charge any redemption fees.
Payment for shares redeemed is made within seven days; however, redemption
proceeds will not be disbursed until each check used for purchases of shares has
been cleared for payment by your bank, which may take up to 15 days after
receipt of the check.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
TO SELL SHARES
-----------------------------------------------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimums on redemptions of accounts.
-----------------------------------------------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share certificates (if you hold
certificate shares) to: State Street Bank, P.O. Box 8301, Boston,
MA 02266-8301. Be sure to include the registered owner's name,
portfolio and account number, number of shares or dollar value
you wish to sell.
-----------------------------------------------------------------------------------------------------------------
By telephone For sales up to $100,000, requests can be made by calling
(800) 814-1897.
-----------------------------------------------------------------------------------------------------------------
By telephone exchange Call us at (800) 814-1897.
-----------------------------------------------------------------------------------------------------------------
</TABLE>
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
--------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the portfolios. Each portfolio reserves the right to pay large
redemptions "in-kind" (in securities owned by the portfolio rather than in
cash). Large redemptions are those over $250,000 or 1% of the portfolios' net
assets. Additional documentation will be required for redemptions by
organizations, fiduciaries, or retirement plans, or if redemption is requested
by anyone but the shareholder(s) of record. Transfers between broker-dealer
"street" accounts are governed by the accepting broker-dealer. Questions
regarding this type of transfer should be directed to your financial advisor.
Redemption requests will not be honored until all required documents in proper
form have been received. To avoid delay in redemption or transfer, shareholders
having questions about specific requirements should contact the portfolios'
Transfer Agent at (800) 814-1897.
20 Phoenix Duff & Phelps Institutional Mutual Funds
<PAGE>
REDEMPTIONS BY MAIL
Send a clear letter of instructions including the name of the portfolio shares
to be sold and a properly executed stock power or any related instruction
transmittal specifying account number and the name of the shareholder exactly as
registered.
The signature on your request must be guaranteed by an eligible guarantor
institution as defined by the portfolios' Transfer Agent in accordance with its
signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
If you are selling shares held in a corporate or fiduciary account, please
contact the portfolios' Transfer Agent at (800) 814-1897.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
ACCOUNT POLICIES
--------------------------------------------------------------------------------
EXCHANGE PRIVILEGES
o You should read the prospectus of the fund into which you want
to exchange before deciding to make an exchange. You can obtain a
prospectus from your financial advisor or by calling us at (800)
814-1897.
o You may exchange shares for another portfolio in the same class
of shares; e.g., Class X for Class X. Exchange privileges may not
be available for all Phoenix Funds, and may be rejected or
suspended.
o Exchanges may be made by telephone (800) 814-1897 or by mail
(State Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
Phoenix Duff & Phelps Institutional Mutual Funds 21
<PAGE>
o The amount of the exchange must be equal to or greater than the
minimum initial investment required.
o The exchange of shares is treated as a sale and purchase for
federal income tax purposes.
o The portfolios reserve the right to refuse an exchange request
if in the portfolio's or adviser's opinion the exchange would
adversely affect the portfolio's ability to invest according to its
investment objectives and policies, the portfolio believes that a
pattern of exchanges coincides with a "market timing" strategy, or
the exchange would otherwise adversely affect the portfolio and its
shareholders.
o Because excessive trading can hurt portfolio performance and
harm other shareholders, the portfolios reserve the right to
temporarily or permanently end exchange privileges or reject an
order from anyone who appears to be attempting to time the market,
including investors who request more than one exchange in any
30-day period. The portfolios' underwriter has entered into
agreements with certain market timing firms permitting them to
exchange by telephone. These privileges are limited, and the
portfolios' distributor has the right to reject or suspend them.
TAX STATUS OF DISTRIBUTIONS
--------------------------------------------------------------------------------
Each portfolio plans to make distributions from net investment income at
intervals stated on the table below, and to distribute net realized capital
gains, if any, at least annually.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C>
PORTFOLIO DIVIDEND PAID
------------------------------------------------------------------------------------------------------------------
Growth Stock Portfolio Semiannually
------------------------------------------------------------------------------------------------------------------
Managed Bond Portfolio Semiannually
------------------------------------------------------------------------------------------------------------------
</TABLE>
Distributions of short-term capital gains and net investment income are taxable
to shareholders as ordinary income. Long-term capital gains, if any, distributed
to shareholders and which are designated by the portfolio as capital gain
distributions, are taxable to shareholders as long-term capital gain
distributions regardless of the length of time you have owned your shares.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Many investors, including most tax-qualified plan investors, may be eligible for
preferential federal income tax treatment on distributions received from the
portfolios and disposition of shares of the portfolios.
22 Phoenix Duff & Phelps Institutional Mutual Funds
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
These tables are intended to help you understand the portfolios' financial
performance for the past five years or since inception. Certain information
reflects financial results for a single portfolio share. The total returns in
the tables represent the rates that an investor would have earned or lost on an
investment in the portfolios (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
independent accountants, except as indicated. Their report, together with the
portfolios' financial statements, are included in the portfolios' most recent
Annual Report, which is available upon request.
<TABLE>
<CAPTION>
PHOENIX DUFF & PHELPS INSTITUTIONAL GROWTH STOCK PORTFOLIO
CLASS X
----------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEARS ENDED DECEMBER 31, 3/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $36.83 $37.82 $33.85 $47.42 $48.01
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income 0.05 0.08 0.05(6) 0.31(6) 0.34
Net realized and unrealized gain (loss) 0.13 11.65 9.88 10.60 4.89
---- ----- ---- ----- ----
TOTAL FROM INVESTMENT OPERATIONS 0.18 11.73 9.93 10.91 5.23
---- ----- ---- ----- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.04) (0.05) (0.15) (0.39) (0.30)
Dividends from net realized gains (1.87) (12.67) (5.81) (24.07)(3) (5.52)
In excess of net investment income -- -- -- (0.02) --
---- ----- ---- ----- ----
TOTAL DISTRIBUTIONS (1.91) (12.72) (5.96) (24.48) (5.82)
---- ----- ---- ----- ----
Change in net asset value (1.73) (0.99) 3.97 (13.57) (0.59)
---- ----- ---- ----- ----
NET ASSET VALUE, END OF PERIOD $35.10 $36.83 $37.82 $33.85 $47.42
====== ====== ====== ====== ======
Total return 0.54%(2) 33.93% 31.20% 25.76% 0.71%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $41,836 $41,436 $46,330 $44,350 $82,739
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.70%(1) 0.70% 0.70% 0.70% 0.70%(1)
Net investment income 0.30%(1) 0.17% 0.13% 0.64% 0.65%(1)
Portfolio turnover 57%(2) 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 1.05%, 0.95%,
1.00%, 0.87%, and 0.81% for the periods ended June 30, 2000, December 31, 1999,
1998, 1997, and 1996, respectively.
(5) 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.
(6) Computed using average shares outstanding.
Phoenix Duff & Phelps Institutional Mutual Funds 23
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PHOENIX DUFF & PHELPS INSTITUTIONAL GROWTH STOCK PORTFOLIO
CLASS Y
----------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEARS ENDED DECEMBER 31, 3/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $36.72 $37.79 $33.86 $47.43 $48.01
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income 0.02 (0.03) 0.04(6) 0.18(6) 0.18
Net realized and unrealized gain (loss) 0.12 11.63 9.88 10.59 4.95
---- ----- ---- ----- ----
TOTAL FROM INVESTMENT OPERATIONS 0.14 11.60 9.84 10.77 5.13
---- ----- ---- ----- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) -- (0.10) (0.31) (0.19)
Dividends from realized gains (1.87) (12.67) (5.81) (24.02)(3) (5.52)
In excess of net investment income -- -- -- (0.01) --
---- ----- ---- ----- ----
TOTAL DISTRIBUTIONS (1.90) (12.67) (5.91) (24.34) (5.71)
---- ----- ---- ----- ----
Change in net asset value (1.76) (1.07) 3.93 (13.57) (0.58)
---- ----- ---- ----- ----
NET ASSET VALUE, END OF PERIOD $34.96 $36.72 $37.79 $33.86 $47.43
====== ====== ====== ====== ======
Total return 0.42%(2) 33.60% 30.85% 25.46% 10.48%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $22,191 $21,845 $21,347 $17,631 $22,978
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.95%(1) 0.95% 0.95% 0.95% 0.95%(1)
Net investment income 0.05%(1) (0.09)% (0.11)% 0.39% 0.39%(1)
Portfolio turnover 57%(2) 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 1.30%, 1.20%,
1.25%, 1.12%, and 1.06% for the periods ended June 30, 2000, December 31, 1999,
1998, 1997, and 1996, respectively.
(5) 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.
(6) Computed using average shares outstanding.
24 Phoenix Duff & Phelps Institutional Mutual Funds
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PHOENIX DUFF & PHELPS INSTITUTIONAL MANAGED BOND PORTFOLIO
CLASS X
----------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEARS ENDED DECEMBER 31, 3/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $29.88 $31.47 $33.17 $33.98 $33.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income 1.13(4) 2.01 2.26(4) 2.37(4) 2.03(4)
Net realized and unrealized gain (loss) (0.32) (1.57) (1.58) 0.85 0.69
----- ----- ----- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 0.81 0.44 0.68 3.22 2.72
----- ----- ----- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (1.12) (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 (1.12) (2.03) (2.38) (4.03) (2.58)
----- ----- ----- ---- ----
Change in net asset value (0.31) (1.59) (1.70) (0.81) 0.14
----- ----- ----- ---- ----
NET ASSET VALUE, END OF PERIOD $29.57 $29.88 $31.47 $33.17 $33.98
====== ====== ====== ====== ======
Total return 2.73%(2) 1.47% 1.99% 9.75% 8.24%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $99,212 $100,044 $113,273 $72,747 $71,482
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 0.55%(1) 0.55% 0.55% 0.55% 0.55%(1)
Net investment income 7.52%(1) 6.54% 6.89% 6.92% 7.15%(1)
Portfolio turnover 38%(2) 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 0.77%, 0.74%,
0.77%, 0.77%, and 0.85% for the periods ended June 30, 2000, December 31, 1999,
1998, 1997, and 1996, respectively.
(4) Computed using average shares
outstanding.
Phoenix Duff & Phelps Institutional Mutual Funds 25
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX DUFF & PHELPS INSTITUTIONAL MANAGED BOND PORTFOLIO
<TABLE>
<CAPTION>
CLASS Y
--------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEARS ENDED DECEMBER 31, 3/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $29.89 $31.47 $33.18 $33.97 $33.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income 1.09(4) 1.96 2.18(4) 2.27(4) 1.98(4)
Net realized and unrealized gain (loss) (0.32) (1.59) (1.59) 0.88 0.66
----- ----- ----- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 0.77 0.37 0.59 3.15 2.64
----- ----- ----- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (1.08) (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 (1.08) (1.95) (2.30) (3.94) (2.51)
----- ----- ----- ---- ----
Change in net asset value (0.31) (1.58) (1.71) (0.79) 0.13
----- ----- ----- ---- ----
NET ASSET VALUE, END OF PERIOD $29.58 $29.89 $31.47 $33.18 $33.97
====== ====== ====== ====== ======
Total return 2.60%(2) 1.26% 1.72% 9.52% 7.98%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $6,125 $6,884 $7,491 $6,725 $7,010
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 0.08%(1) 0.80% 0.80% 0.80% 0.80%(1)
Net investment income 7.27%(1) 6.29% 6.63% 6.65% 6.91%(1)
Portfolio Turnover 38%(2) 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 1.02%, 0.99%,
1.02%, 1.02%, and 1.10% for the periods ended June 30, 2000, December 31, 1999,
1998, 1997, and 1996, respectively.
(4) Computed using average shares outstanding.
26 Phoenix Duff & Phelps Institutional Mutual Funds
<PAGE>
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The portfolios have filed a Statement of Additional Information about the
portfolios, dated October 31, 2000, with the Securities and Exchange Commission.
The Statement contains more detailed information about the portfolios. It is
incorporated into this prospectus by reference and is legally part of the
prospectus. You may obtain a free copy of the Statement:
o by writing to Phoenix Equity Planning Corporation, 100 Bright
Meadow Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
o by calling (800) 814-1897.
You may also obtain information about the portfolios from the Securities and
Exchange Commission:
o through its internet site (http://www.sec.gov),
o by visiting its Public Reference Room in Washington, DC,
o by writing to its Public Reference Section, Washington, DC
20549-0102 (a fee may be charged), or
o by electronic request at [email protected] (a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.
SHAREHOLDER REPORTS
The portfolios semiannually mail to shareholders detailed reports containing
information about each portfolio's investments. The portfolios' Annual Report
contains a detailed discussion of the market conditions and investment
strategies that significantly affected the portfolios' performance from January
1 through December 31. You may request a free copy of the portfolios' Annual and
Semiannual Reports:
o by writing to Phoenix Equity Planning Corporation, 100 Bright
Meadow Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200, or
o by calling (800) 814-1897.
CUSTOMER SERVICE: (800) 814-1897
MARKETING: (800) 814-1897
TELEPHONE ORDERS: (800) 814-1897
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
SEC File Nos. 33-80057 and 811-9140 [recycle logo] Printed on recycled paper
using soybean ink
Phoenix Duff & Phelps Institutional Mutual Funds 27
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield, CT 06083-2200
[LOGO] PHOENIX
INVESTMENT PARTNERS
For more information about
Phoenix mutual funds, please call
your financial representative or
contact us at 1-800-243-4361 or
www.phoenixinvestments.com.
PXP 3090 (10/00)
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
PHOENIX DUFF & PHELPS INSTITUTIONAL GROWTH STOCK PORTFOLIO
PHOENIX DUFF & PHELPS INSTITUTIONAL MANAGED BOND PORTFOLIO
101 Munson Street
Greenfield, Massachusetts 01301
(800) 814-1897
STATEMENT OF ADDITIONAL INFORMATION
October 31, 2000
This Statement of Additional Information is not a prospectus but expands upon
and supplements the information contained in the current Prospectus of the
Phoenix Duff & Phelps Institutional Mutual Funds (the "Fund"), dated October 31,
2000 and should be read in conjunction with it. A copy may be obtained by
calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
814-1897, or by writing to Equity Planning at 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, Connecticut 06083-2200.
TABLE OF CONTENTS
PAGE
The Fund .................................................................. 1
Investment Restrictions ................................................... 1
Investment Techniques and Risks ........................................... 2
Performance Information ................................................... 9
Performance Comparisons ................................................... 11
Portfolio Turnover ........................................................ 11
Services of the Adviser ................................................... 11
Brokerage Allocation ...................................................... 12
Determination of Net Asset Value .......................................... 13
How to Buy Shares ......................................................... 13
How to Redeem Shares....................................................... 15
Dividends, Distributions and Taxes ........................................ 16
The Distributor ........................................................... 17
Distribution Plan.......................................................... 18
Management of the Fund .................................................... 19
Compensation Table......................................................... 25
Additional Information .................................................... 26
Appendix .................................................................. 28
PXP3090B (10/00)
<PAGE>
THE FUND
Phoenix Duff & Phelps Institutional Mutual Funds (the "Fund") is an open-end
management investment company which was organized under Massachusetts law on
December 4, 1995 as a business trust. It was reorganized as a Delaware business
trust in October 2000. Prior to March 1, 1996, the Managed Bond and Growth Stock
Portfolios existed as the Managed Bond Account ("Separate Account P") and Growth
Stock Account ("Separate Account S"), respectively, separate investment accounts
of Phoenix Home Life Mutual Insurance Company pursuant to the insurance laws of
the State of New York and the laws of other states. The Fund's shares are
presently offered in two separate portfolios, each of which is described here.
Each portfolio generally operates as a separate fund with its own investment
objectives and policies designed to meet its specific investment goals.
The Fund's Prospectus describes the investment objectives of each of the
Portfolios and the principal strategies that each of the Portfolios will employ
in seeking to achieve its investment objective. Each Portfolio's investment
objectives is a fundamental policy of that Portfolio and may not be changed
without the vote of a majority of the outstanding voting securities of that
Portfolio. The following discussion describes the Portfolios' investment
policies and techniques and supplements the description of the Portfolios'
principal strategies in the Prospectus.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Fund with
respect to the each of the Portfolios. Except as otherwise stated, these
investment restrictions are "fundamental" policies. A "fundamental" policy is
defined in the 1940 Act to mean that the restriction cannot be changed without
the vote of a "majority of the outstanding voting securities" of the Portfolio.
A majority of the outstanding voting securities is defined in the 1940 Act as
the lesser of (a) 67% or more of the voting securities present at a meeting if
the holders of more than 50% of the outstanding voting securities are present or
represented by proxy, or (b) more than 50% of the outstanding voting securities.
The Portfolio may not:
(1) With respect to 75% of its total assets, purchase securities of an issuer
(other than the U.S. Government, its agencies, instrumentalities or authorities
or repurchase agreements collateralized by U.S. Government securities and other
investment companies), if: (a) such purchase would, at the time, cause more than
5% of the Portfolio's total assets taken at market value to be invested in the
securities of such issuer; or (b) such purchase would, at the time, result in
more than 10% of the outstanding voting securities of such issuer being held by
the Portfolio.
(2) Purchase securities if, after giving effect to the purchase, more than
25% of its total assets would be invested in the securities of one or more
issuers conducting their principal business activities in the same industry
(excluding the U.S. Government, its agencies or instrumentalities).
(3) Borrow money, except (i) in amounts not to exceed one third of the value
of the Portfolio's total assets (including the amount borrowed) from banks, and
(ii) up to an additional 5% of its total assets from banks or other lenders for
temporary purposes. For purposes of this restriction, (a) investment techniques
such as margin purchases, short sales, forward commitments, and roll
transactions, (b) investments in instruments such as futures contracts, swaps,
and options and (c) short-term credits extended in connection with trade
clearance and settlement, shall not constitute borrowing.
(4) Issue "senior securities" in contravention of the 1940 Act. Activities
permitted by SEC exemptive orders or staff interpretations shall not be deemed
to be prohibited by this restriction.
(5) Underwrite the securities issued by other persons, except to the extent
that, in connection with the disposition of portfolio securities, the Portfolio
may be deemed to be an underwriter under applicable law.
(6) Purchase or sell real estate, except that the Portfolio may (i) acquire
or lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (iii) invest in mortgage-related
securities and other securities that are secured by real estate or interests
therein, (iv) hold and sell real estate acquired by the Portfolio as a result of
the ownership of securities.
(7) Purchase or sell commodities or commodity contracts, except the Portfolio
may purchase and sell derivatives (including, but not limited to, options,
futures contracts and options on futures contracts) whose value is tied to the
value of a financial index or a financial instrument or other asset (including,
but not limited to, securities indexes, interest rates, securities, currencies
and physical commodities).
(8) Make loans, except that the Portfolio may (i) lend portfolio securities,
(ii) enter into repurchase agreements, (iii) purchase all or a portion of an
issue of debt securities, bank loan participation interests, bank certificates
of deposit, bankers' acceptances,
1
<PAGE>
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities and (iv) participate in an interfund lending
program with other registered investment companies.
If any percentage restriction described above for the Portfolio is adhered to
at the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Portfolio's assets will not
constitute a violation of the restriction.
INVESTMENT TECHNIQUES AND RISKS
The Portfolios may utilize the following practices or techniques in pursuing
their investment objectives.
FINANCIAL FUTURES AND RELATED OPTIONS
Each Portfolio may use financial futures contracts and related options to
hedge against changes in the market value of its portfolio securities or
securities which it intends to purchase. Hedging is accomplished when an
investor takes a position in the futures market opposite to his cash market
position. There are two types of hedges--long (or buying) and short (or selling)
hedges. Historically, prices in the futures market have tended to move in
concert with cash market prices, and prices in the futures market have
maintained a fairly predictable relationship to prices in the cash market. Thus,
a decline in the market value of securities in a Portfolio's holdings may be
protected against to a considerable extent by gains realized on futures
contracts sales. Similarly, it is possible to protect against an increase in the
market price of securities which a Portfolio may wish to purchase in the future
by purchasing futures contracts.
A Portfolio may purchase or sell any financial futures contracts which are
traded on a recognized exchange or board of trade. Financial futures contracts
consist of interest rate futures contracts and securities index futures
contracts. A public market presently exists in interest rate futures contracts
covering long-term U.S. Treasury bonds, U.S. Treasury notes, three-month U.S.
Treasury bills and GNMA certificates. Securities index futures contracts are
currently traded with respect to the Standard & Poor's 500 Composite Stock Price
Index and such other broad-based stock market indices as the New York Stock
Exchange Composite Stock Index and the Value Line Composite Stock Price Index. A
clearing corporation associated with the exchange or board of trade on which a
financial futures contract trades assumes responsibility for the completion of
transactions and also guarantees that open futures contracts will be performed.
In contrast to the situation when a Portfolio purchases or sells a security,
no security is delivered or received by a Portfolio upon the purchase or sale of
a financial futures contract. Initially, a Portfolio will be required to deposit
in a segregated account with its custodian bank an amount of cash, U.S. Treasury
bills or liquid high grade debt obligations. This amount is known as initial
margin and is in the nature of a performance bond or good faith deposit on the
contract. The current initial margin deposit required per contract is
approximately 5% of the contract amount. Brokers may establish deposit
requirements higher than this minimum. Subsequent payments, called variation
margin, will be made to and from the account on a daily basis as the price of
the futures contract fluctuates. This process is known as marking to market.
The writer of an option on a futures contract is required to deposit margin
pursuant to requirements similar to those applicable to futures contracts. Upon
exercise of an option on a futures contract, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery. Closing out is
accomplished by effecting an offsetting transaction. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss. A Portfolio will pay commissions on financial
futures contracts and related options transactions. These commissions may be
higher than those which would apply to purchases and sales of securities
directly.
LIMITATIONS ON FUTURES CONTRACTS AND RELATED OPTIONS. A Portfolio may not
engage in transactions in financial futures contracts or related options for
speculative purposes but only as a hedge against anticipated changes in the
market value of its portfolio securities or securities which it intends to
purchase. A Portfolio may not purchase or sell financial futures contracts or
related options if, immediately thereafter, the sum of the amount of initial
margin deposits on a Portfolio's existing futures and related options positions
and the premiums paid for related options would exceed 2% of the market value of
a Portfolio's total assets after taking into account unrealized profits and
losses on any such contracts. At the time of purchase of a futures contract or a
call option on a futures contract, any asset, including equity securities and
non-investment grade debt so long as the asset is liquid, unencumbered and
marked to market daily equal to the market value of the futures contract minus a
Portfolio's initial margin
2
<PAGE>
deposit with respect thereto will be deposited in a pledged account with a
Portfolio's custodian bank to collateralize fully the position and thereby
ensure that it is not leveraged. The extent to which a Portfolio may enter into
financial futures contracts and related options also may be limited by the
requirements of the Internal Revenue Code for qualification as a regulated
investment company.
RISKS RELATING TO FUTURES CONTRACTS AND RELATED OPTIONS. Positions in futures
contracts and related options may be closed out only on an exchange which
provides a secondary market for such contracts or options. A Portfolio will
enter into an option or futures position only if there appears to be a liquid
secondary market. However, there can be no assurance that a liquid secondary
market will exist for any particular option or futures contract at any specific
time. Thus, it may not be possible to close out a futures or related option
position. In the case of a futures position, in the event of adverse price
movements a Portfolio would continue to be required to make daily margin
payments. In this situation, if a Portfolio has insufficient cash to meet daily
margin requirements it may have to sell portfolio securities at a time when it
may be disadvantageous to do so. In addition, a Portfolio may be required to
take or make delivery of the securities underlying the futures contracts it
holds. The inability to close out futures positions also could have an adverse
impact on a Portfolio's ability to hedge its portfolio effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse movement
in market prices, it can also preclude a hedger's opportunity to benefit from a
favorable market movement. In addition, investing in futures contracts and
options on futures contracts will cause a Portfolio to incur additional
brokerage commissions and may cause an increase in a Portfolio's portfolio
turnover rate.
The successful use of futures contracts and related options also depends on
the ability of the Adviser to forecast correctly the direction and extent of
market movements within a given time frame. To the extent market prices remain
stable during the period a futures contract or option is held by a Portfolio or
such prices move in a direction opposite to that anticipated, a Portfolio may
realize a loss on the hedging transaction which is not offset by an increase in
the value of its portfolio securities. As a result, a Portfolio's return for the
period may be less than if it had not engaged in the hedging transaction.
Utilization of futures contracts by a Portfolio involves the risk of
imperfect correlation in movements in the price of futures contracts and
movements in the price of the securities which are being hedged. If the price of
the futures contract moves more or less than the price of the securities being
hedged, a Portfolio will experience a gain or loss which will not be completely
offset by movements in the price of the securities. It is possible that, where a
Portfolio has sold futures contracts to hedge its portfolio against decline in
the market, the market may advance and the value of securities held in a
Portfolio's holdings may decline. If this occurred, a Portfolio would lose money
on the futures contract and would also experience a decline in value in its fund
securities. Where futures are purchased to hedge against a possible increase in
the prices of securities before a Portfolio is able to invest its cash (or cash
equivalents) in securities (or options) in an orderly fashion, it is possible
that the market may decline; if a Portfolio then determines not to invest in
securities (or options) at that time because of concern as to possible further
market decline or for other reasons, a Portfolio will realize a loss on the
futures that would not be offset by a reduction in the price of the securities
purchased.
The market prices of futures contracts may be affected if participants in the
futures market elect to close out their contracts through offsetting
transactions rather than to meet margin deposit requirements. In such case,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities rather than
to engage in closing transactions due to the resultant reduction in the
liquidity of the futures market. In addition, due to the fact that, from the
point of view of speculators, the deposit requirements in the futures markets
are less onerous than margin requirements in the cash market, increased
participation by speculators in the futures market could cause temporary price
distortions. Due to the possibility of price distortions in the futures market
and because of the imperfect correlation between movements in the prices of
securities and movements in the prices of futures contracts, a correct forecast
of market trends may still not result in a successful hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put or
call options on futures contracts involves less potential risk for a Portfolio
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to a Portfolio while the
purchase or sale of the futures contract would not have resulted in a loss, such
as when there is no movement in the price of the underlying securities. The loss
from investing in futures transactions is potentially unlimited.
FOREIGN SECURITIES
Each Portfolio may purchase foreign securities, including those issued by
foreign branches of U.S. banks. Investments in foreign securities, particularly
those of non-governmental issuers, involve considerations which are not
ordinarily associated with investing in domestic issues. These considerations
include changes in currency rates, currency exchange control regulations, the
possibility of expropriation, the unavailability of financial information, the
difficulty of interpreting financial information prepared under foreign
securities markets, the impact of political, social or diplomatic developments,
difficulties in invoking legal process abroad and the difficulty of assessing
economic trends in foreign countries.
3
<PAGE>
The Portfolio may use a foreign custodian or sub-custodian in connection with
its purchases of foreign securities and may maintain cash and cash equivalents
in the care of a foreign custodian. The amount of cash or cash equivalents
maintained in the care of eligible foreign custodians will be limited to an
amount reasonably necessary to effect the Portfolio's foreign securities
transactions. The use of a foreign custodian invokes considerations which are
not ordinarily associated with domestic custodians. These considerations include
the possibility of expropriations, restricted access to books and records of the
foreign custodian, inability to recover assets that are lost while under the
control of the foreign custodian, and the impact of political, social or
diplomatic developments.
LENDING PORTFOLIO SECURITIES
In order to increase its return on investments, each Portfolio may make loans
of its portfolio securities. Loans of portfolio securities will always be fully
collateralized at no less than 102% of the market value of the loaned securities
(as marked to market daily) and made only to borrowers considered to be
creditworthy. Lending portfolio securities involves a risk of delay in the
recovery of the loaned securities and possibly the loss of the collateral if the
borrower fails financially.
LOWER RATED FIXED INCOME SECURITIES
In the event that an issuer of securities held by a Portfolio experiences
difficulties in the timely payment of principal or interest and such issuer
seeks to restructure the terms of its borrowings, the Portfolio may incur
additional expenses and may determine to invest additional assets with respect
to such issuer or the project or projects to which the portfolio securities
relate. Further, the Portfolio may incur additional expenses to the extent that
it is required to seek recovery upon a default in the payment of interest or the
repayment of principal on its portfolio holdings, and the Portfolio may be
unable to obtain full recovery thereof.
To the extent there is no established secondary market for some of the medium
and lower grade income securities in which the Portfolio may invest, trading in
such securities may be relatively inactive. During periods of reduced market
liquidity or in the absence of readily available market quotations for medium
and lower grade income securities held in the Portfolio's holdings, the ability
of the Adviser to value the Portfolio's securities becomes more difficult and
the Adviser's use of judgment may play a greater role in the valuation of the
Portfolio's securities due to the reduced availability of reliable objective
data. Further, the Portfolio may have more difficulty selling such securities in
a timely manner and at their stated value than would be the case for securities
for which an established secondary market does exist.
Many medium and lower grade income securities are not listed for trading on
any national securities exchange, and many issuers of medium and lower grade
income securities choose not to have a rating assigned to their obligations by
any nationally recognized statistical rating organization. The amount of
information available about the financial condition of an issuer of unrated or
unlisted securities generally is not as extensive as that which is available
with respect to issuers of listed or rated securities. To the extent that the
Portfolio invests in unrated or unlisted medium and lower grade income
securities, the ability of the Adviser to evaluate the credit risk of such
securities may play a greater role in the ability of the Portfolio to achieve
its investment objective.
The Adviser seeks to minimize the risks involved in investing in medium and
lower grade income securities through portfolio diversification, careful
investment analysis, and attention to current developments and trends in the
economy and financial and credit markets. The Portfolio will rely on the
Adviser's judgment, analysis and experience in evaluating the creditworthiness
of an issue. In its analysis, the Adviser will take into consideration, among
other things, the issuer's financial resources, its sensitivity to economic
conditions and trends, its operating history, the quality of the issuer's
management and regulatory matters. Although the Adviser's internal business and
default risk analysis is independent of the credit ratings of S&P, Moody's or
D&P (or other nationally recognized statistical rating organization), the
Adviser may consider such ratings in evaluating income securities. Achievement
by the Portfolio of its investment objective will be more dependent on the
credit analysis of the Adviser than is the case for investment companies with
investment objectives similar to the Portfolio's that are more reliant on such
rating organizations in selecting portfolio securities.
MONEY MARKET INSTRUMENTS
CERTIFICATES OF DEPOSIT. Certificates of deposit are generally short-term,
interest-bearing negotiable certificates issued by banks or savings and loan
associations against funds deposited in the issuing institution.
TIME DEPOSITS. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which a
negotiable certificate is not received.
BANKERS' ACCEPTANCES. A bankers' acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction (to finance the import, export, transfer or storage of
goods). The borrower, as well as the bank, is liable for payment, and the bank
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity.
COMMERCIAL PAPER. Commercial paper refers to short-term, unsecured promissory
notes issued by corporations to finance short-term credit needs. Commercial
paper is usually sold on a discount basis and has a maturity at the time of
issuance not exceeding nine months.
4
<PAGE>
CORPORATE DEBT SECURITIES. Corporate debt securities with a remaining
maturity of less than one year tend to become extremely liquid and are traded as
money market securities.
U.S. GOVERNMENT OBLIGATIONS. Securities issued or guaranteed as to principal
and interest by the United States Government include a variety of Treasury
securities, which differ only in their interest rates, maturities, and times of
issuance. Treasury bills have maturities of one year or less. Treasury notes
have maturities of one to ten years, and Treasury bonds generally have
maturities of greater than ten years. Agencies of the United States Government
which issue or guarantee obligations include, among others, Export-Import Banks
of the United States, Farmers Home Administration, Federal Housing
Administration, Government National Mortgage Association, Maritime
Administration, Small Business Administration and The Tennessee Valley
Authority. Obligations of instrumentalities of the United States Government
include securities issued or guaranteed by, among others, the Federal National
Mortgage Association, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Banks for Cooperatives, and the
U.S. Postal Service. Some of these securities are supported by the full faith
and credit of the U.S. Government; others are supported by the right of the
issuer to borrow from the Treasury, while still others are supported only by the
credit of the instrumentality.
REPURCHASE AGREEMENTS. The repurchase price under the repurchase agreements
described in the prospectus generally equals the price paid by the Fund plus
interest negotiated on the basis of current short-term rates (which may be more
or less than the rate on the securities underlying the repurchase agreement).
Securities subject to repurchase agreements are held by the Portfolio's
custodian (or sub-custodian) or in the Federal Reserve/Treasury book-entry
system. Repurchase agreements are considered to be loans under the Investment
Company Act of 1940 as amended (the "1940 Act").
REVERSE REPURCHASE AGREEMENTS. At the time the Portfolio enters into a
reverse repurchase agreement (an agreement under which the Fund sells portfolio
securities and agrees to repurchase them at an agreed-upon date and price), it
will place in a segregated custodial account liquid assets such as U.S.
Government securities or other liquid high grade debt securities having a value
equal to or greater than the repurchase price (including accrued interest) and
will subsequently monitor the account to ensure that such value is maintained.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by the Portfolio may decline below the price of the securities
it is obligated to repurchase. Reverse repurchase agreements are considered to
be borrowings under the 1940 Act.
BANK OBLIGATIONS. For purposes of a Portfolio's investment policies with
respect to bank obligations, the assets of a bank or savings institution will be
deemed to include the assets of its domestic and foreign branches.
MORTGAGE-RELATED SECURITIES
The Managed Bond Portfolio may invest in mortgage-related securities,
including those representing an undivided ownership interest in a pool of
mortgages, such as certificates of the Government National Mortgage Association
("GNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"). These
certificates are in most cases pass-through instruments, through which the
holder receives a share of all interest and principal payments from the
mortgages underlying the certificate, net of certain fees. The average life of a
mortgage-related security varies with the underlying mortgage instruments, which
have maximum maturities of 40 years. The average life is likely to be
substantially less than the original maturity of the mortgage pools underlying
the securities as the result of prepayments, mortgage refinancings or
foreclosure. Mortgage prepayment rates are affected by various factors including
the level of interest rates, general economic conditions, the location and age
of the mortgage and other social and demographic conditions. Such prepayments
are passed through to the registered holder with the regular monthly payments of
principal and interest and have the effect of reducing future payments.
Government securities with nominal remaining maturities in excess of 3 1/2
years that have variable or floating interest rates or demand or put features
may nonetheless be deemed to have remaining maturities of 3 1/2 years or less so
as to be permissible investments for the Fund as follows: (a) a government
security with a variable or floating rate of interest will be deemed to have a
maturity equal to the period remaining until the next readjustment of the
interest rate; (b) a government security with a demand or put feature that
entitles the holder to receive the principal amount of the underlying security
at the time of or sometime after the holder gives notice of demand or exercise
of the put will be deemed to have a maturity equal to the period remaining until
the principal amount can be recovered through demand or exercise of the put; and
(c) a government security with both a variable or floating rate of interest as
described in clause (a) and a demand or put feature as described in clause (b)
will be deemed to have a maturity equal to the shorter of the period remaining
until the next readjustment of the interest rate or the period remaining until
the principal amount can be recovered through demand or exercise of the put.
Securities issued by Government National Mortgage Association ("GNMA") are,
and securities issued by Federal National Mortgage Association ("FNMA") include,
mortgage-backed securities representing part ownership of a pool of mortgage
loans. In the case of GNMA, the mortgages are insured by the Federal Housing
Administration or Farmers' Home Administration or guaranteed by the Veteran's
Administration. In the case of FNMA, the mortgages are not insured by an agency
of the U.S. Government.
The prices of mortgage-backed securities are inversely affected by changes in
interest rates and, therefore, are subject to the risk of market price
fluctuations. Mortgage-backed securities issued by GNMA and FNMA currently offer
yields which are higher than
5
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those available on other securities of the U.S. Government and its agencies and
instrumentalities, but may be less effective than these other securities as a
means of "locking in" attractive long-term interest rates. This is a result of
the need to reinvest prepayment of principal and the possibility of significant
unscheduled prepayments resulting from declines in mortgage interest rates. As a
result, these securities have less potential for capital appreciation during
periods of declining interest rates than other investments of comparable risk of
decline in value during periods of rising rates.
MUNICIPAL OBLIGATIONS
Municipal Obligations include debt obligations issued by or on behalf of
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities to
obtain funds for various public purposes, including the construction of a wide
range of public facilities, the refunding of outstanding obligations, the
payment of general operating expenses and the extension of loans to public
institutions and facilities.
The two principal classifications of Municipal Obligations consist of
"general obligation" and "revenue" issues. General obligation bonds are secured
by the issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest, and, accordingly, the capacity of the issuer of a
general obligation bond as to the timely payment of interest and the repayment
of principal when due is affected by the issuer's maintenance of its tax base.
Revenue bonds are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special tax or other specific revenue source; accordingly, the timely payment of
interest and the repayment of principal in accordance with the terms of such
bonds is a function of the economic viability of such facility or revenue
source. The Managed Bond Portfolio may include "moral obligation" issues, which
are normally issued by special purpose authorities. There are, of course,
variations in the quality of Municipal Obligations both within a particular
classification and between classifications, and the yields on Municipal
Obligations depend upon a variety of factors, including general money market
conditions, the financial condition of the issuer, general conditions of the
municipal bond market, the size of a particular offering, the maturity of the
obligation and the rating of the issue.
Certain types of Municipal Obligations (private activity bonds) are or have
been issued to obtain funds to provide privately operated housing facilities,
pollution control facilities, convention or trade show facilities, mass transit,
airport, port or parking facilities and certain local facilities for water
supply, gas, electricity or sewage or solid waste disposal. Private activity
bonds are also issued by privately held or publicly owned corporations in the
financing of commercial or industrial facilities. State and local governments
are authorized in most states to issue private activity bonds for such purposes
in order to encourage corporations to locate within their communities. The
principal and interest on these obligations may be payable from the general
revenues of the users of such facilities.
From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on Municipal Obligations. For example, under the federal tax
legislation enacted in 1986, interest on certain private activity bonds must be
included in an investor's alternative minimum taxable income, and corporate
investors must treat all tax-exempt interest as an item of tax preference.
Dividends paid by the Portfolio that are derived from interest of Municipal
Obligations would be taxable to the Portfolio shareholders for federal income
tax purposes.
INSURED MUNICIPAL OBLIGATIONS. Certain of the Municipal Obligations held by a
Portfolio may be insured as to the timely payment of principal and interest. The
insurance policies will usually be obtained by the issuer of the Municipal
Obligation at the time of its original issuance. In the event that the issuer
defaults on interest or principal payment, the insurer will be notified and will
be required to make payment to the bondholders. There is, however, no guarantee
that the insurer will meet its obligations. In addition, such insurance will not
protect against market fluctuations caused by changes in interest rates and
other factors.
OPTIONS
Options and the related risks are summarized below.
WRITING AND PURCHASING OPTIONS. Call options written by a Portfolio normally
will have expiration dates between three and nine months from the date written.
During the option period a Portfolio may be assigned an exercise notice by the
broker-dealer through which the call option was sold, requiring the Portfolio to
deliver the underlying security (or cash in the case of securities index calls)
against payment of the exercise price. This obligation is terminated upon the
expiration of the option period or at such earlier time as the Portfolio effects
a closing purchase transaction. A closing purchase transaction cannot be
effected with respect to an option once the Portfolio has received an exercise
notice.
The exercise price of a call option written by a Portfolio may be below,
equal to or above the current market value of the underlying security or
securities index at the time the option is written.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total dollar
value per contract of each point between the exercise price of the option and
the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.
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Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices, Computer/Business
Equipment Index, Major Market Index, Amex Market Value Index, Computer
Technology Index, Oil and Gas Index, NYSE Options Index, Gaming/Hotel Index,
Telephone Index, Transportation Index, Technology Index, and Gold/Silver Index.
A Portfolio may write call options and purchase call and put options on any
other indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a profit
on an outstanding call option written by a Fund, to prevent an underlying
security from being called, or to enable a Portfolio to write another call
option with either a different exercise price or expiration date or both. A
Portfolio may realize a net gain or loss from a closing purchase transaction,
depending upon whether the amount of the premium received on the call option is
more or less than the cost of effecting the closing purchase transaction. If a
call option written by a Portfolio expires unexercised, a Portfolio will realize
a gain in the amount of the premium on the option less the commission paid.
The option activities of a Portfolio may increase its Portfolio turnover rate
and the amount of brokerage commissions paid. A Fund will pay a commission each
time it purchases or sells a security in connection with the exercise of an
option. These commissions may be higher than those which would apply to
purchases and sales of securities directly.
LIMITATIONS ON OPTIONS. A Portfolio may write call options only if they are
covered and if they remain covered so long as a Portfolio is obligated as a
writer. If a Portfolio writes a call option on an individual security, a
Portfolio will own the underlying security at all times during the option
period. A Portfolio will write call options on indices only to hedge in an
economically appropriate way portfolio securities which are not otherwise hedged
with options or financial futures contracts. Call options on securities indices
written by a Portfolio will be "covered" by identifying the specific portfolio
securities being hedged.
To secure the obligation to deliver the underlying security, the writer of a
covered call option on an individual security is required to deposit the
underlying security or other assets in escrow with the broker in accordance with
clearing corporation and exchange rules. In the case of an index call option
written by a Portfolio, a Portfolio will be required to deposit qualified
securities. A "qualified security" is a security against which a Portfolio has
not written a call option and which has not been hedged by a Portfolio by the
sale of a financial futures contract. If at the close of business on any day the
market value of the qualified securities falls below 100% of the current index
value times the multiplier times the number of contracts, a Portfolio will
deposit an amount of cash or liquid assets equal in value to the difference. In
addition, when a Portfolio writes a call on an index which is "in-the-money" at
the time the call is written, a Portfolio will pledge with its custodian bank
any asset, including equity securities and non-investment grade debt so long as
the asset is liquid, unencumbered and marked to market daily equal in value to
the amount by which the call is "in-the-money" times the multiplier times the
number of contracts. Any amount pledged may be applied to a Portfolio's
obligation to segregate additional amounts in the event that the market value of
the qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts.
A Portfolio may sell a call option or a put option which it has previously
purchased prior to the purchase (in the case of a call) or the sale (in the case
of a put) of the underlying security. Any such sale of a call option or a put
option would result in a net gain or loss, depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid. In connection with a Portfolio qualifying as a regulated investment
company under the Internal Revenue Code, other restrictions on a Portfolio's
ability to enter into option transactions may apply from time to time.
RISKS RELATING TO OPTIONS. During the option period, the writer of a call
option has, in return for the premium received on the option, given up the
opportunity for capital appreciation above the exercise price should the market
price of the underlying security increase, but has retained the risk of loss
should the price of the underlying security decline. The writer has no control
over the time when it may be required to fulfill its obligation as a writer of
the option.
The risk of purchasing a call option or a put option is that a Portfolio may
lose the premium it paid plus transaction costs. If a Portfolio does not
exercise the option and is unable to close out the position prior to expiration
of the option, it will lose its entire investment.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although a Portfolio will
write and purchase options only when the Adviser believes that a liquid
secondary market will exist for options of the same series, there can be no
assurance that a liquid secondary market will exist for a particular option at a
particular time and that a Portfolio, if it so desires, can close out its
position by effecting a closing transaction. If the writer of a covered call
option is unable to effect a closing purchase transaction, it cannot sell the
underlying security until the option expires or the option is exercised.
Accordingly, a covered call writer may not be able to sell the underlying
security at a time when it might otherwise be advantageous to do so.
Possible reasons for the absence of a liquid secondary market on an exchange
include the following: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities; (iv) inadequacy of the facilities of
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<PAGE>
an exchange or the clearing corporation to handle trading volume; and (v) a
decision by one or more exchanges to discontinue the trading of options or
impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single investor
acting alone or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written on one or more
accounts or through one or more brokers). An exchange may order the liquidation
of positions found to be in violation of these limits and it may impose other
sanctions or restrictions. The Adviser believes that the position limits
established by the exchanges will not have any adverse impact upon a Portfolio
or all of the Portfolios, in the aggregate.
RISKS OF OPTIONS ON INDICES. Because the value of an index option depends
upon movements in the level of the index rather than movements in the price of a
particular security, whether a Portfolio will realize a gain or loss on the
purchase or sale of an option on an index depends upon movements in the level of
prices in the market generally or in an industry or market segment rather than
upon movements in the price of an individual security. Accordingly, successful
use by a Portfolio of options on indices will be subject to the Adviser's
ability to predict correctly movements in the direction of the market generally
or in the direction of a particular industry. This requires different skills and
techniques than predicting changes in the prices of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
securities included in the index. If this occurred, a Portfolio would not be
able to close out options which it had written or purchased and, if restrictions
on exercise were imposed, might be unable to exercise an option it purchased,
which would result in substantial losses to a Portfolio. However, it is the
Fund's policy to write or purchase options only on indices which include a
sufficient number of securities so that the likelihood of a trading halt in the
index is minimized.
Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance and,
unlike call writing on portfolio securities, cannot provide in advance for its
potential settlement obligation by holding the underlying securities.
Consequently, a Portfolio will write call options on indices only subject to the
limitations described above.
Price movements in securities in a Portfolio holdings will not correlate
perfectly with movements in the level of the index and, therefore, a Portfolio
bears the risk that the price of the securities held by the Portfolio may not
increase as much as the level of the index. In this event, the Portfolio would
bear a loss on the call which would not be completely offset by movements in the
prices of a Portfolio's portfolio securities. It is also possible that the index
may rise when the value of a Portfolio holdings securities does not. If this
occurred, the Portfolio would experience a loss on the call which would not be
offset by an increase in the value of its portfolio and might also experience a
loss in the market value of portfolio securities.
Unless a Portfolio has other liquid assets which are sufficient to satisfy
the exercise of a call on an index, a Portfolio will be required to liquidate
portfolio securities in order to satisfy the exercise. Because an exercise must
be settled within hours after receiving the notice of exercise, if a Portfolio
fails to anticipate an exercise, it may have to borrow from a bank pending
settlement of the sale of securities in its portfolio and pay interest on such
borrowing.
When a Portfolio has written a call on an index, there is also a risk that
the market may decline between the time a Portfolio has the call exercised
against it, at a price which is fixed as of the closing level of the index on
the date of exercise, and the time a Portfolio is able to sell securities in its
portfolio. As with options on portfolio securities, a Portfolio will not learn
that a call has been exercised until the day following the exercise date but,
unlike a call on a portfolio security where a Portfolio would be able to deliver
the underlying security in settlement, a Portfolio may have to sell part of its
portfolio securities in order to make settlement in cash, and the price of such
securities might decline before they could be sold.
If a Portfolio exercises a put option on an index which it has purchased
before final determination of the closing index value for that day, it runs the
risk that the level of the underlying index may change before closing. If this
change causes the exercised option to fall "out-of-the-money" a Portfolio will
be required to pay the difference between the closing index value and the
exercise price of the option (multiplied by the applicable multiplier) to the
assigned writer. Although a Portfolio may be able to minimize this risk by
withholding exercise instructions until just before the daily cutoff time or by
selling rather than exercising an option when the index level is close to the
exercise price, it may not be possible to eliminate this risk entirely because
the cutoff times for index options may be earlier than those fixed for other
types of options and may occur before definitive closing index values are
announced.
OTHER INVESTMENT COMPANIES
The Portfolios are authorized to invest in the securities of other investment
companies subject to the limitations contained in the 1940 Act. In certain
countries, investments by the Portfolio may only be made through investments in
other investment companies that, in turn, are authorized to invest in the
securities that are issued in such countries. Investors should recognize that
the Portfolio's purchase of the securities of such other investment companies
results in the layering of expenses such that investors indirectly bear a
proportionate part of the expenses for such investment companies including
operating costs, and investment advisory and administrative fees.
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<PAGE>
STAND-BY COMMITMENTS
Under a stand-by commitment, a dealer or bank agrees to purchase from the
Portfolio, at the Portfolio's option, specified Municipal Obligations at their
amortized cost value to the Portfolio plus accrued interest, if any. Stand-by
commitments may be sold, transferred or assigned by the Portfolio only with the
underlying Municipal Obligation. The Portfolio expects that stand-by commitments
will generally be available without the payment of any direct or indirect
consideration. However, if necessary or advisable, the Portfolio may pay for a
stand-by commitment either separately in cash or by paying a higher price for
Portfolio securities which are acquired subject to the commitment (thus reducing
the yield to maturity otherwise available for the same securities). Where the
Portfolio paid any consideration directly or indirectly for a stand-by
commitment, its cost would be reflected as unrealized depreciation for the
period during which the commitment was held by the Portfolio.
The Portfolio intends to enter into stand-by commitments only with dealers,
banks and broker-dealers which, in the Adviser's opinion, present minimal credit
risks. The Portfolio's reliance upon the credit of these dealers, banks and
broker-dealers will be secured by the value of the underlying Municipal
Obligations that are subject to the commitment. In evaluating the
creditworthiness of the issuer of a stand-by commitment, the Adviser will review
periodically the issuer's assets, liabilities, contingent claims and other
relevant financial information. The Portfolio would acquire stand-by commitments
solely to facilitate Portfolio liquidity and does not intend to exercise its
rights thereunder for trading purposes. Stand-by commitments acquired by the
Portfolio would be valued at zero in determining net asset value.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS
When a Portfolio agrees to purchase securities on a when-issued or
delayed-delivery basis, its custodian will set aside cash, U.S. Government
securities or other liquid high-grade debt obligations equal to the amount of
the purchase or the commitment in a separate account. Normally, the custodian
will set aside portfolio securities to meet this requirement. The market value
of the separate account will be monitored and if such market value declines, the
Portfolio will be required subsequently to place additional assets in the
separate account in order to ensure that the value of the account remains equal
to the amount of the Portfolio's commitments. Because a Portfolio will set aside
cash or liquid high-grade debt securities in the manner described, the
Portfolio's liquidity and ability to manage its fund might be affected in the
event its when-issued purchases or delayed-delivery commitments ever exceeded
25% of the value of its assets. In the case of a delayed delivery of the sale of
fund securities, the Fund's custodian will hold the portfolio securities
themselves in a segregated account while the commitment is outstanding.
A Portfolio will make commitments to purchase securities on a when-issued
basis or delayed delivery basis only with the intention of completing the
transaction and actually purchasing or selling the securities. If deemed
advisable as a matter of investment strategy, however, the Portfolio may dispose
of or renegotiate a commitment after it is entered into, and may sell securities
it has committed to purchase before those securities are delivered to the
Portfolio on the settlement date. In these cases the Portfolio may realize a
capital gain or loss. When a Portfolio engages in when-issued and delayed
delivery transactions, it relies on the other party to consummate the trade.
Failure of such party to do so may result in the Portfolio's incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.
The value of the securities underlying a when-issued purchase or a delayed
delivery to purchase securities, and any subsequent fluctuations in their value,
is taken into account when determining a Portfolio's net asset value starting on
the day a Fund agrees to purchase the securities. The Portfolio does not earn
interest on the securities it has committed to purchase until they are paid for
and delivered on the settlement date. When a Portfolio makes a delayed delivery
of the sale of securities it owns, the proceeds to be received upon settlement
are included in the Portfolio's assets, and fluctuations in the value of the
underlying securities are not reflected in the Portfolio's net asset value as
long as the commitment remains in effect.
PERFORMANCE INFORMATION
Performance information for each Portfolio may appear in advertisements,
sales literature, or reports to shareholders or prospective shareholders.
Performance information in advertisements and sales literature may be expressed
as yield and/or as total return of any Portfolio.
Quotations of yield for the Managed Bond Portfolio will be based on all
investment income per share earned during a particular 30-day period (including
dividends and interest), less expenses (including pro rata Portfolio expenses
and expenses applicable to each particular Portfolio) accrued during the period
("net investment income"), and are computed by dividing net investment income by
the value of a share of the Portfolio on the last day of the period, according
to the following formula:
YIELD = 2[((a-b)) + 1)(6) - 1]
--------
cd
where,
a = dividends and interest earned during the period by the Portfolio,
b = expenses accrued for the period (net of any reimbursements),
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends, and
d = the maximum offering price per share on the last day of the period.
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For the managed Bond Portfolio, the 30-day yield as of December 31, 1999 was
6.91% for Class X Shares and 6.65% for Class Y Shares.
Total return is a measure of the change in value of an investment in a
Portfolio over the period covered. The formula for total return used herein
includes four steps: (1) adding to the total number of shares purchased by a
hypothetical $1,000 investment in the Portfolio; (2) calculating the value of
the hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of shares of a Portfolio owned at the end of the
period by the net asset value on the last trading day of the period; (3)
assuming maximum sales charge deducted and reinvestment of all dividends at net
asset value and (4) dividing this account value for the hypothetical investor by
the initial $1,000 investment. Total return will be calculated for one year,
five years and ten years or the time period during which the registration
statement including the Portfolio was in effect if a Portfolio has not been in
existence for at least ten years.
Except as above stated, standardized quotations of average annual total
return for each class of shares of each Portfolio will be expressed in terms of
the average annual compounded rate of return of a hypothetical investment in
either Class X or Class Y Shares of each Portfolio over a period of one, five,
and ten years (or up to the life of the class of shares). Standardized total
return quotations reflect the deduction of a proportional share of each Class'
expenses of such Portfolio (on an annual basis), and assume that all dividends
and distributions are reinvested when paid. It is expected that the performance
of Class X Shares shall be better than that of Class Y Shares as a result of
lower distribution fees and certain incrementally lower expenses paid by Class X
Shares. Each Portfolio may also quote supplementally a rate of total return over
different periods of time by means of aggregate, average, and year-by-year or
other types of total return figures.
Performance information for each Portfolio (and each Class thereof) reflects
only the performance of a hypothetical investment in a Class X or Class Y of the
Portfolio during the particular time period in which the calculations are based.
Performance information is not an indication of future performance. Performance
information should be considered in light of a particular Portfolio's investment
objectives and policies, characteristics and qualities of the Portfolio, and the
market conditions during the given time period, and should not be considered as
a representation of what may be achieved in the future. Investment results will
vary from time to time and are not identical to the past portfolio investments
of those Portfolios which previously existed as separate accounts.
The manner in which total return will be calculated for public use is
described above. The following table contains total return figures involving the
Managed Bond and Growth Stock Portfolio based on each such Portfolio's past
performance as a separate investment account of Phoenix Home Life Mutual
Insurance Company, for periods before the Fund's registration statement became
effective (March 1, 1996). This performance data may be relevant as each such
separate account was managed, in all material respects, using substantially the
same investment objectives, policies and restrictions as those used by such
Portfolio. These separate investment accounts were not registered under the 1940
Act and therefore were not subject to certain investment restrictions that are
imposed by the 1940 Act. If these separate investment accounts had been
registered under the 1940 Act, the separate investment accounts' performance may
have been adversely affected. Standardized average annual total return of each
Class shall be calculated for the preceding one, five and ten year periods by
including the corresponding separate account's total return calculated in
accordance with formulas specified by the Securities and Exchange Commission.
The performance of the separate accounts has been restated to reflect the
deduction of the fees and expenses of the classes of the corresponding Portfolio
described in the Prospectus.
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
PERIODS ENDED
---------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
Growth Stock
Class X 33.93% 27.08% 18.28%
Class Y 33.60% 26.77% 17.99%
Managed Bond
Class X 1.47% 8.17% 7.80%
Class Y 1.26% 7.91% 7.53%
NOTE: Average annual total return assumes a hypothetical initial payment of
$1,000. At the end of each period, a total redemption is assumed. The ending
redeemable value is divided by the original investment to calculate total
return. Performance information for any Portfolio reflects only the performance
of a hypothetical investment in the Portfolio during the particular time period
on which the calculations are based. Performance information should be
considered in light of the investment objectives and policies, characteristics
and quality of the particular Portfolio, and the market conditions during the
given time period, and should not be considered as a representation of what may
be achieved in the future.
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PERFORMANCE COMPARISONS
Each Portfolio may, from time to time, include in advertisements containing
total return the ranking of those performance figures relative to such figures
for groups of mutual funds having similar investment objectives as categorized
by ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc. and rating services
such as Morningstar, Inc. Additionally, a Portfolio or Class of Portfolio may
compare its performance results to other investment or savings vehicles (such as
certificates of deposit) and may refer to results published in various
publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business
Week and Investor's Daily, Stanger's Mutual Fund Monitor, The Stanger Register,
Stanger's Investment Adviser, The Wall Street Journal, Pensions & Investments,
Institutional Investor, The New York Times, Consumer Reports, Registered
Representative, Financial Planning, Financial Services Weekly, Financial World,
U.S. News and World Report, Standard and Poor's The Outlook, and Personal
Investor. A Portfolio may, from time to time, illustrate the benefits of tax
deferral by comparing taxable investments to investments made through
tax-deferred retirement plans. The total return may also be used to compare the
performance of the Portfolio against certain widely acknowledged outside
standards or indices for stock and bond market performance, such as the Standard
& Poor's 500 Stock Index (the "S&P 500"), Dow Jones Industrial Average, Europe
Australia Far East Index (EAFE), Consumer Price Index, Lehman Brothers Aggregate
Bond Index, Lehman Brothers 1-3 year Government Bond Index, IBC Donoghue Money
Fund Report, Merrill Lynch 1-year Treasury Bill, Lehman Brothers Corporate Index
and T-Bond Index.
Advertisements, sales literature, and other communications may contain
information about the Adviser's current investment strategies and management
style. Current strategies and style may change to allow the Fund to respond
quickly to changing market and economic conditions. From time to time, the Fund
may include specific portfolio holdings or industries. To illustrate components
of overall performance, the Fund may separate its cumulative and average annual
returns into income and capital gains components; or cite separately as a return
figure the equity or bond portion of the Fund's portfolio; or compare the Fund's
equity or bond return figure to well-known indices of market performance,
including but not limited to: the S&P 500 Index, Dow Jones Industrial Average,
Lehman Brothers Aggregate Bond Index, Lehman Brothers 1-3 year Government Bond
Index, IBC Donoghue Money Fund Report, Merrill Lynch 1-year Treasury Bill, CS
First Boston High Yield Index and Salomon Brothers Corporate Bond and Government
Bond Indices.
PORTFOLIO TURNOVER
Each Portfolio has a different expected annual rate of fund turnover, which
is calculated by dividing the lesser of purchases or sales of portfolio
securities during the fiscal year by the monthly average of the value of the
Portfolio's securities (excluding from the computation all securities, including
options, with maturities at the time of acquisition of one year or less). A high
rate of portfolio turnover generally involves correspondingly greater brokerage
commission expenses, which must be borne directly by the Portfolio. Turnover
rates may vary greatly from year to year as well as within a particular year and
may also be affected by cash requirements for redemptions of each Portfolio's
shares and by requirements which enable the Fund to receive certain favorable
tax treatment. Historical turnover rates can be found under the heading
"Financial Highlights" in the Fund's prospectus.
SERVICES OF THE ADVISER
The offices of Phoenix Investment Counsel, Inc. ("PIC" or the "Adviser") are
located at 56 Prospect Street, Hartford, Connecticut 06115. All of the
outstanding stock of PIC is owned by Phoenix Equity Planning Corporation
("Equity Planning"), a subsidiary of Phoenix Investment Partners, Ltd. ("PXP").
PXP is an indirect, less than wholly-owned subsidiary of Phoenix Home Life
Mutual Insurance Company ("Phoenix Home Life") of Hartford, Connecticut. Phoenix
Home Life is a mutual insurance company engaged in the insurance and investment
businesses. Phoenix Home Life's principal place of business is located at One
American Row, Hartford, Connecticut.
The Adviser provides certain services and facilities required to carry on the
day-to-day operations of the Fund (for which it receives a management fee) other
than the costs of printing and mailing proxy materials, reports and notices to
shareholders; legal, auditing and accounting services; regulatory filing fees
and expenses of printing the Fund's registration statements; insurance expense;
association membership dues; brokerage fees; and taxes.
All costs and expenses (other than those specifically referred to as being
borne by the Adviser) incurred in the operation of the Fund are borne by the
Fund. Each Portfolio pays expenses incurred in its own operation and also pays a
portion of the Fund's general administration expenses allocated on the basis of
the asset size of the respective Portfolio, except where an allocation using an
alternative method can be more fairly made. Such expenses include, but shall not
be limited to, all expenses incurred in the operation of the Fund and any public
offering of its shares, including, among others, interest, taxes, brokerage fees
and commissions, fees of Trustees who are not employees of the Adviser or any of
its affiliates, expenses of Trustees' and shareholders' meetings, including the
cost of printing and mailing proxies, expenses of insurance premiums for
fidelity and other coverage, expenses of repurchase and redemption of shares,
expenses of issue and sale of shares (to the extent not borne by Equity Planning
under its agreement with the Fund), expenses of printing and mailing stock
certificates representing shares of the Fund, association membership dues,
charges of custodians, transfer agents, dividend disbursing agents and financial
agents, bookkeeping, auditing,
11
<PAGE>
and legal expenses. The Fund will also pay the fees and bear the expense of
registering and maintaining the registration of the Fund and its shares with the
Securities and Exchange Commission and registering or qualifying its shares
under state or other securities laws and the expense of preparing and mailing
prospectuses and reports to shareholders.
The investment advisory agreement provides that the Adviser shall not be
liable to the Fund or to any shareholder of the Fund for any error of judgment
or mistake of law or for any loss suffered by the Fund or by any shareholder of
the Fund in connection with the matters to which the investment advisory
agreement relates, except a loss resulting from willful misfeasance, bad faith,
gross negligence or reckless disregard on the part of the Adviser in the
performance of its duties thereunder.
As full compensation for the services and facilities furnished to the Fund,
the Adviser is entitled to a fee, payable monthly, as described in the
Prospectus. There is no assurance that the Fund will reach net asset levels high
enough to realize reductions in the rates of the advisory fees. Any reduction in
the rate of the advisory fee on all Portfolios will be prorated among the
Portfolios in proportion to their respective averages of the aggregate daily net
asset values for the period for which the fee had been paid.
The advisory agreements continue in force from year to year for each
Portfolio, provided that, with respect to each Portfolio, the agreement must be
approved at least annually by the Trustees or by vote of a majority of the
outstanding voting securities of the Portfolio. In addition, and in either
event, the terms of the agreement and any renewal thereof must be approved by
the vote of a majority of the Trustees who are not parties to the agreement or
interested persons (as that term is defined in the Investment Company Act of
1940) of any such party, cast in person at a meeting called for the purpose of
voting on such approval. The agreement will terminate automatically if assigned
and may be terminated at any time, without payment of any penalty, either by the
Fund or by the Adviser, on sixty (60) days written notice.
For the years ended December 31, 1997, 1998 and 1999, the Growth Stock
Portfolio paid management fees to PIC in the amounts of $515,459, $383,128 and
$391,685, respectively. For the years ended December 31, 1997, 1998 and 1999,
the Managed Bond Portfolio paid management fees to PIC in the amounts of
$352,253, $421,814 and $480,907, respectively.
The Fund, its Adviser and Subadviser, and Distributor have each adopted a
Code of Ethics pursuant to Rule 17-j1 under the Investment Company Act of 1940.
Personnel subject to the Codes of Ethics may purchase and sell securities for
their personal accounts, including securities that may be purchased, sold or
held by the Fund, subject to certain restrictions and conditions. Generally,
personal securities transactions are subject to preclearance procedures,
reporting requirements and holding period rules. The Codes also restrict
personal securities transactions in private placements, initial public offerings
and securities in which the Fund has a pending order.
BROKERAGE ALLOCATION
In effecting portfolio transactions for the Fund, the Adviser adheres to the
Fund's policy of seeking best execution and price, determined as described
below, except to the extent it is permitted to pay higher brokerage commissions
for "brokerage and research services" as defined herein. The Adviser may cause
the Fund to pay a broker an amount of commission for effecting a securities
transaction in excess of the amount of commission which another broker or dealer
would have charged for effecting the transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or that any
offset of direct expenses of a Portfolio yields the best net price. As provided
in Section 28(e) of the Securities Exchange Act of 1934, "brokerage and research
services" include giving advice as to the value of securities, the advisability
of investing in, purchasing or selling securities, and the availability of
securities; furnishing analyses and reports concerning issuers, industries,
economic factors and trends, portfolio strategy and the performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). Brokerage and research services
provided by brokers to the Fund or to the Adviser are considered to be in
addition to and not in lieu of services required to be performed by the Adviser
under its contract with the Fund and may benefit both the Fund and other clients
of the Adviser. Conversely, brokerage and research services provided by brokers
to other clients of the Adviser may benefit the Fund.
If the securities in which a particular Portfolio of the Fund invests are
traded primarily in the over-the-counter market, where possible the Portfolio
will deal directly with the dealers who make a market in the securities involved
unless better prices and execution are available elsewhere. Such dealers usually
act as principals for their own account. On occasion, securities may be
purchased directly from the issuer. Bonds and money market instruments are
generally traded on a net basis and do not normally involve either brokerage
commission or transfer taxes.
The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Fund (involving both price paid or received and any net
commissions and other costs paid), the efficiency with which the transaction is
effected, the ability to effect the transaction at all where a large block is
involved, the availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Such considerations are judgmental and are weighed by the Adviser in
determining the overall reasonableness of brokerage commissions paid by the
Fund. Some portfolio transactions are, subject to the Conduct Rules of the
National Association of Securities Dealers, Inc. and subject to obtaining best
prices and executions, effected through dealers (excluding Equity Planning) who
sell shares of the Fund.
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<PAGE>
The Fund has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Fund. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs share pro rata based on the
Fund's participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order is partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different form that specified in the
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets on
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.
The Adviser may use its broker/dealer affiliates, or other firms that sell
shares of the Portfolios, to buy and sell securities for the Portfolios,
provided they have the execution capability and that their commission rates are
comparable to those of other unaffiliated broker/dealers. Directors of PXP
Securities Corp. or its affiliates receive indirect benefits from the Portfolios
as a result of its usual and customary brokerage commissions that PXP Securities
Corp. may receive for acting as broker to the Portfolios in the purchase and
sale of portfolio securities. The investment advisory agreement does not provide
for a reduction of the advisory fee by any portion of the brokerage fees
generated by portfolio transactions of the Portfolios that PXP Securities Corp.
may receive.
For the fiscal years ended December 31, 1997, 1998 and 1999, brokerage
commissions paid by the Trust on portfolio transactions totaled $425,169,
$193,136 and $166,770, respectively. In the fiscal years ended December 31,
1997, 1998 and 1999, no commissions were paid to affiliates for portfolio
transactions. Brokerage commissions of $29,579 paid during the fiscal year ended
December 31, 1999, were paid on the portfolio transactions aggregating
$5,957,342 executed by brokers who provided research and other statistical
information.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Portfolio is determined as of the close
of trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Fund does not price securities on
weekends or United States national holidays, the net asset value of a
Portfolio's foreign assets may be significantly affected on days when the
investor has no access to the Portfolio. The net asset value per share of a
Portfolio is determined by adding the values of all securities and other assets
of the Portfolio, subtracting liabilities, and dividing by the total number of
outstanding shares of the Portfolio. Assets and liabilities are determined in
accordance with generally accepted accounting principles and applicable rules
and regulations of the Securities and Exchange Commission. The total liability
allocated to a class, plus that class' distribution fee and any other expenses
allocated solely to that class, are deducted from the proportionate interest of
such class in the assets of the Portfolio, and the resulting amount of each is
divided by the number of shares of that class outstanding to produce the net
asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for any Portfolio which
invests in foreign securities contemporaneously with the determination of the
prices of the majority of the portfolio securities of such Portfolio. All assets
and liabilities initially expressed in foreign currency values will be converted
into United States dollar values at the mean between the bid and ask quotations
of such currencies against United States dollars as last quoted by any
recognized dealer. If an event were to occur after the value of an investment
was so established but before the net asset value per share was determined,
which was likely to materially change the net asset value, then the instrument
would be valued using fair value considerations by the Trustees or their
delegates. If at any time a Portfolio has investments where market quotations
are not readily available, such investments are valued at the fair value thereof
as determined in good faith by the Trustees although the actual calculations may
be made by persons acting pursuant to the direction of the Trustees.
HOW TO BUY SHARES
The Fund currently issues two classes of shares for each Portfolio. Class X
Shares are available to Plans (as hereafter defined) and institutional investors
which initially purchase Class X Shares of the Fund whose net asset value
exceeds $5 million. Class Y
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<PAGE>
Shares are offered to Plans and institutional investors which initially purchase
Class Y Shares of the Fund whose net asset value exceeds $1 million. "Plans" are
defined as corporate, public, union and governmental pension plans. Completed
applications for the purchase of shares should be mailed to Phoenix Duff &
Phelps Institutional Mutual Funds, c/o State Street Bank and Trust Company, P.O.
Box 8301, Boston, MA 02266-8301.
The minimum subsequent investment for each class is $100. Shares are sold at
the net asset value per share (as described below) next computed after a
completed application or purchase order is received by State Street Bank and
Trust Company together with good and sufficient funds therefor (certified
checks, federal funds wires, and automated clearing house transactions ("ACH")).
Completed orders received by State Street Bank and Trust Company or an
authorized agent on a business day prior to the close of trading of the New York
Stock Exchange (normally 4:00 PM eastern time) will be processed based on that
day's closing net asset value. Shares purchased will be recorded electronically
in book-entry form by the Transfer Agent. No share certificates are available.
Sales of shares may be made through broker-dealers, pension consultants or other
qualified financial agents/institutions.
The minimum initial investment amounts for the purchase of either class of
Fund shares shall be waived with respect to purchases by: (i) Plans and
institutional investors who have been invested in certain separate investment
accounts of Phoenix Home Life Mutual Insurance Company as of March 1, 1996; (ii)
trust companies, bank trust departments, broker-dealers financial planners and
investment advisers for funds over which such entity charges an account
management fee and which are held in a fiduciary, agency, advisory, custodial or
similar capacity; or (iii) Plans and institutional investors where the amounts
invested represent the redemption proceeds from the reorganization or merger of
other investment companies.
Equity Planning will retain all or a portion of the continuing distribution
fee assessed to Class Y shareholders to finance commissions and related
marketing expenses. Equity Planning intends to pay broker-dealers and exempt
financial institutions with whom it has a sales agreement a service fee of 0.25%
of the average daily net asset value of Class Y Shares sold by such
broker-dealers and exempt financial institutions, subject to future amendment or
termination. No trail fees are payable to broker-dealers or others in connection
with the purchase, sale or retention of Class X Shares.
Equity Planning may pay broker-dealers and financial institutions exempt from
registration pursuant to the Securities Exchange Act of 1934, as amended, and
related regulations ("exempt financial institutions"), from its own profits and
resources, a percentage of the net asset value of any shares sold as set forth
below:
<TABLE>
<CAPTION>
PAYMENT TO
PURCHASE AMOUNT BROKER-DEALER
--------------- -------------
<S> <C>
$0 to $5,000,000 0.50%
$5,000,001 to $10,000,000 0.25%
$10,000,001 or more 0.10%
</TABLE>
If part of any investment is subsequently redeemed within one year of the
investment date, the broker-dealer or exempt financial institution will refund
to Equity Planning any such amounts paid with respect to the investment. Equity
Planning will sponsor training and educational meetings and provide to all
qualifying agents, from its own profits and resources, additional compensation
in the form of trips, merchandise or expense reimbursement. Broker-dealers or
exempt financial institutions other than Equity Planning may also levy customary
additional charges to shareholders for their services in effecting transactions,
if they notify the Fund of their intention to do so.
EXCHANGE PRIVILEGES
Shareholders may exchange Class X or Class Y Shares held in book-entry form
for shares of the same class of another Portfolio of the Fund or any other
"Affiliated Phoenix Fund" provided the following conditions are met: (1) the
shares that will be acquired in the exchange (the "Acquired Shares") are
available for sale in the shareholder's principal place of business; (2) the
Acquired Shares are the same class as the shares to be surrendered (the
"Exchanged Shares"); (3) the Acquired Shares will be registered to the same
shareholder account as the Exchanged Shares; (4) the account value of the shares
to be acquired must equal or exceed the minimum initial or subsequent investment
amount, as applicable, after the exchange is implemented; and (5) the
shareholder is qualified to acquire Fund shares in accordance with the
limitations described in this Statement of Additional Information. An
"Affiliated Phoenix Fund" refers to the Phoenix-Engemann Funds, Phoenix-Seneca
Funds or any other mutual fund advised, subadvised or distributed by the
Adviser, Distributor or any of their corporate affiliates.
The Fund reserves the right to refuse exchange purchases by any person or
broker-dealer if, in the Fund's or Adviser's opinion, (a) the exchange would
adversely affect the Fund's ability to invest according to its investment
objectives and policies; (b) the Fund believes that a pattern of exchanges
coincides with a "market timing" strategy; or (c) otherwise adversely affect the
Fund and its shareholders. The Fund reserves the right to terminate or modify
its exchange privileges at any time upon giving written notice to shareholders
at least 60 days in advance. Shareholders are urged to review their constituent
documents and relevant requirements in order to verify pertinent limitations
imposed by retirement plan or group annuity contract exchange limits as well as
restrictions imposed by governing law.
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<PAGE>
MARKET TIMER RESTRICTIONS
Because excessive trading can hurt Fund performance and harm shareholders,
the Fund reserves the right to temporarily or permanently terminate exchange
privileges or reject any specific order from anyone whose transactions seem to
follow a timing pattern, including those who request more than one exchange out
of a fund within any 30-day period. The Distributor has entered into agreements
with certain market timer entities permitting them to exchange their clients'
shares by telephone. These privileges are limited under those agreements. The
Distributor has the right to reject or suspend these privileges upon reasonable
notice.
TELEPHONE EXCHANGE PRIVILEGES
Unless a shareholder elects in writing not to participate in the Telephone
Exchange Privilege, shares for which certificates have not been issued may be
exchanged by calling 800-814-1897 provided that the exchange is made between
accounts with identical registrations. Under the Telephone Exchange Privilege,
telephone exchange orders may also be entered on behalf of the shareholder by
his or her registered representative.
The Fund and the Transfer Agent will employ reasonable procedures to confirm
that telephone instructions are genuine. In addition to requiring identical
registrations on both accounts, the Transfer Agent will require address
verification and will record telephone instructions on tape. All exchanges will
be confirmed in writing to the shareholder. To the extent that procedures
reasonably designed to prevent unauthorized telephone exchanges are not
followed, the Fund and/or the Transfer Agent may be liable for following
telephone instructions for exchange transactions that prove to be fraudulent.
Broker/dealers other than Equity Planning have agreed to bear the risk of any
loss resulting from any unauthorized telephone exchange instruction from the
firm or its registered representatives. However, the shareholder would bear the
risk of loss resulting from instructions entered by an unauthorized third party
that the Fund and/or the Transfer Agent reasonably believe to be genuine. The
Telephone Exchange Privilege may be modified or terminated at any time on
60-days' notice to shareholders. In addition, during times of drastic economic
or market changes, the Telephone Exchange Privilege may be difficult to exercise
or may be suspended temporarily. The Telephone Exchange Privilege is available
only in states where shares being acquired may be legally sold.
If a shareholder elects not to use the Telephone Exchange Privilege or if the
shares being exchanged are represented by a certificate or certificates, in
order to exchange shares the shareholder must submit a written request to
Phoenix Duff & Phelps Institutional Mutual Funds, c/o State Street Bank and
Trust Company, P.O. Box 8301, Boston, MA 02266-8301. If the shares are being
exchanged between accounts that are not registered identically, the signature on
such request must be guaranteed by an eligible guarantor institution as defined
by the Transfer Agent in accordance with its signature guarantee procedures.
Currently, such procedures generally permit guarantees by banks, broker dealers,
credit union, national securities exchanges, registered securities associations,
clearing agencies and savings associations. Any outstanding certificate or
certificates for the tendered shares must be duly endorsed and submitted.
HOW TO REDEEM SHARES
Any holder of shares of any Portfolio may require the Fund to redeem its
shares at any time at the net asset value per share next computed after receipt
of a redemption request in proper written form by State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301, ATTN: Phoenix Duff & Phelps
Institutional Mutual Funds, or by an authorized agent. To be in proper form to
redeem shares, (1) the signature(s) of duly authorized representative(s) of the
shareholder must appear in the appropriate place upon the stock power; (2) the
stock power or any related instruction transmittal must specify the name and
account number of the shareholder exactly as registered; (3) the name of the
Portfolio; and (4) and all such signatures must be guaranteed by an eligible
guarantor institution as determined in accordance with the standards and
procedures established by the Transfer Agent. Currently, such procedures
generally permit guarantees by banks, broker-dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations. Signature(s) must also be guaranteed on any change of
address request submitted in conjunction with any redemption request. Additional
documentation may be required for redemptions by corporations, partnerships or
other organizations, or if redemption is requested by anyone other than the
shareholder(s) of record. Redemption requests will not be honored until all
required documents in proper form have been received.
In addition, each Portfolio maintains a continuous offer to repurchase its
shares, and shareholders may normally sell their shares through securities
dealers, brokers or agents who may charge customary commissions or fees for
their services. The redemption price in such case will be the price as of the
close of trading of the Exchange on that day, provided the order is received by
the dealer prior thereto, and is transmitted to the Distributor prior to the
close of its business. No charge is made by the Fund on redemptions, but shares
tendered through investment dealers may be subject to service charge by such
dealers. Payment for shares redeemed will be made within three days after
receipt of the duly endorsed share certificates (if issued) or written request;
provided, however, that redemption proceeds will not be disbursed until each
check used for purchase of shares has been cleared for payment by the investor's
bank which may take up to 15 days after receipt of the check.
TELEPHONE REDEMPTION PRIVILEGES
Unless a shareholder elects in writing not to participate in the Telephone
Redemption Privilege, shareholders may redeem shares valued at up to $100,000 by
calling (800) 814-1897. The Fund and the Transfer Agent will employ reasonable
procedures to
15
<PAGE>
confirm that telephone instructions are genuine. Address and bank account
information will be verified, telephone redemption instructions will be recorded
on tape, and all redemptions will be confirmed in writing to the shareholder. If
there has been an address change within the past 60 days, a telephone redemption
will not be authorized. To the extent that procedures reasonably designed to
prevent unauthorized telephone redemptions are not followed, the Fund and/or the
Transfer Agent may be liable for following telephone instructions for redemption
transactions that prove to be fraudulent. Broker-dealers other than Equity
Planning have agreed to bear the risk of any loss resulting from any
unauthorized telephone redemption instruction from the firm or its registered
representatives. However, the shareholder would bear the risk of loss resulting
from instructions entered by an unauthorized person or third party that the Fund
and/or the Transfer Agent reasonably believe to be genuine. The Telephone
Redemption Privilege may be modified or terminated at any time without prior
notice to shareholders. In addition, during times of drastic economic or market
changes, the Telephone Redemption Privilege may be difficult to exercise or may
be suspended temporarily and a shareholder should submit a written redemption
request, as described above.
If the amount of the redemption is $500 or more, the proceeds may be wired to
the shareholder's designated U.S. commercial bank account. If the amount of the
redemption is less than $500, the proceeds will be sent by check to the address
of record on the shareholder's account.
Telephone redemption orders received and accepted by Transfer Agent on any
day when Transfer Agent is open for business will be entered at the next
determined net asset value. However, telephone redemption orders received and
accepted by Transfer Agent after the close of trading hours on the Exchange will
be executed on the following business day. The proceeds of a telephone
redemption will normally be sent on the first business day following receipt of
the redemption request. However, with respect to the telephone redemption of
shares purchased by check, such requests will only be effected after the Fund
has assured itself that good payment has been collected for the purchase of
shares, which may take up to 15 days.
SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program (the "Program") allows shareholders to
periodically redeem a portion of their shares on predetermined monthly,
quarterly, semiannual or annual dates. In order to participate in the Program,
shareholders must provide written notice to the Transfer Agent specifying (a)
the frequency in which Program redemptions are to occur, (b) the routing in
which proceeds are to be directed into the shareholder's account, and (c) the
priority among Portfolios and classes of shares in which redemptions are to
occur.
Except as provided below, Program payments will be made on or about the 20th
day of the month during the frequency period selected by the shareholder.
Program payments may also be processed through Automated Clearing House (ACH) to
the shareholder's account on or about the 10th, 15th or 25th day of each month.
Participants may not redeem sums in any period in excess of the equivalent of 1%
of aggregate Portfolio holdings (at the net asset value on the date of
redemption) during each month. Program redemptions will only be effected after
the Fund has assured itself that good payment has been received for the purchase
of shares which are to be redeemed.
Class X shareholders participating in the Program must at all times own
shares of the Fund worth $100,000 or more in the aggregate as determined by the
then current net asset value per share. Class Y shareholders participating in
the Program must at all times own shares of the Fund worth $50,000 or more in
the aggregate as determined by the then current net asset value per share. A
shareholder's participation in the Program will also automatically terminate if
redemptions are made outside the Program.
REDEMPTION-IN-KIND
To the extent consistent with state and federal law, the Fund may make
payment of the redemption price either in cash or in kind. The Fund has elected
to pay in cash all requests for redemption by any shareholder of record, but may
limit such cash in respect to each shareholder during any 90-day period to the
lesser of $250,000 or 1% of the net asset value of the Fund at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the 1940
Act and is irrevocable while the Rule is in effect unless the Securities and
Exchange Commission, by order, permits its withdrawal. In case of a redemption
in kind, securities delivered in payment for shares would be valued at the same
value assigned to them in computing the net asset value per share of the Fund. A
shareholder receiving such securities would incur brokerage costs when it sold
the securities.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio is treated as a separate entity for federal income tax
purposes. Each Portfolio intends to elect to be treated as a regulated
investment company ("RIC") and qualify as such under Subchapter M of the
Internal Revenue Code (the "Code").
The Code sets forth numerous criteria which must be satisfied in order for
each Portfolio to qualify as a RIC. Each Portfolio must, among other things,
meet the following tests for each taxable year: (1) at least 90% of the
Portfolio's gross income must be derived from a) dividends, b) interest, c)
payments with respect to securities loans, d) gains from the sale or other
disposition of stocks or securities or foreign currencies, or e) other income
(including but not limited to gains from options, futures, or forward contracts)
derived by the Portfolio with respect to its business of investing in stocks,
securities or currencies; and (2) distribute annually at least 90% of its
investment company taxable income and net exempt-interest income.
16
<PAGE>
In addition to the gross income tests, to qualify as a RIC, each Portfolio
must also diversify its holdings so that, at the close of each quarter of its
taxable year, (1) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government securities, and other securities limited
generally with respect to any one issuer to not more than 5% of the total assets
of the Portfolio and not more than 10% of the outstanding voting securities of
such issuer, and (2) not more than 25% of the value of its total assets is
invested in the assets of any one issuer (other than U.S. Government
securities). If in any taxable year a Portfolio does not qualify as a RIC, all
of its net investment income and realized capital gains will be taxed at
corporate rates.
In each taxable year that a Portfolio qualifies as a RIC, it (but not its
shareholders) will be relieved of federal income tax on that portion of its net
investment income and net capital gains that are currently distributed (or
deemed distributed) to its shareholders. It is the policy of each Portfolio to
distribute all of its net investment income and net capital gains to its
shareholders in order to avoid any federal income tax liability. In addition,
each Portfolio intends to make timely distribution sufficient in amount to avoid
a nondeductible 4% excise tax. An excise tax will be imposed on each Portfolio
to the extent that it fails to distribute, with respect to each calendar year,
at least 98% of its net ordinary income for such calendar year and 98% of its
net capital gains as determined for the one year period ending December 31 of
such calendar year. In addition, an amount equal to the undistributed net
ordinary income and net capital gains from the previous calendar year must also
be distributed to avoid the excise tax.
The Fund is required to withhold for income taxes 31% of dividends,
distributions and redemption payments, if any of the following circumstances
exist: i) a shareholder fails to provide the Fund with a correct taxpayer
identification number (TIN); ii) the Fund is notified by the Internal Revenue
Service that the shareholder furnished an incorrect TIN; or iii) the Fund is
notified by the Internal Revenue Service that withholding is required because
the shareholder failed to report the receipt of dividends or interest from other
sources. Withholding may also be required for accounts with respect to which a
shareholder fails to certify that i) the TIN provided is correct and ii) the
shareholder is not subject to such withholding. However, withholding will not be
required from certain exempt entities nor those shareholders complying with the
procedures as set forth by the Internal Revenue Service. A shareholder is
required to provide the Fund with a correct TIN. The Fund in turn is required to
report correct taxpayer identification numbers when filing all tax forms with
the Internal Revenue Service. Should the IRS levy a penalty on a Fund for
reporting an incorrect TIN and that TIN was provided by the shareholder, the
Fund will pass the penalty onto the shareholder.
Dividends paid by a Portfolio from net investment income and net realized
short-term capital gains to a shareholder who is a nonresident alien individual,
a foreign fund or estate, a foreign corporation or a foreign partnership (a
foreign shareholder) will be subject to United States withholding tax at a rate
of 30% unless a reduced rate of withholding or a withholding exemption is
provided under applicable treaty law. Foreign shareholders are urged to consult
their own tax advisors concerning the applicability of the United States
withholding tax and any foreign taxes.
The discussion of "Tax Status of Distributions" in the Prospectus, in
conjunction with the foregoing, is a general and abbreviated summary of
applicable provisions of the Code and Treasury regulations now in effect as
currently interpreted by the courts and the Internal Revenue Service. The Code
and regulations, as well as the current interpretations thereof, may be changed
at any time by legislative, judicial, or administrative action. Shareholders are
urged to consult with their tax advisor regarding specific questions as to
federal, state, local or foreign taxes.
THE DISTRIBUTOR
Phoenix Equity Planning Corporation ("Equity Planning"), which has undertaken
to use its best efforts to find purchasers for shares of the Fund, serves as the
national distributor of the Fund's shares. Equity Planning is located at 100
Bright Meadow Boulevard, Enfield, Connecticut 06083-2200. Shares of each
Portfolio are offered on a continuous basis. Pursuant to an Underwriting
Agreement covering all classes of shares and distribution methods, the
Distributor will purchase shares of the Fund for resale to the public, either
directly or through securities dealers or agents, and is obligated to purchase
only those shares for which it has received purchase orders. Equity Planning may
also sell Fund shares pursuant to sales agreements entered into with
bank-affiliated securities brokers who, acting as agent for their customers,
place orders for Fund shares with Equity Planning. If, because of changes in law
or regulations, or because of new interpretations of existing law, it is
determined that agency transactions of bank-affiliated securities brokers are
not permitted, the Trustees will consider what action, if any, is appropriate.
It is not anticipated that termination of sales agreements with bank-affiliated
securities brokers would result in a loss to their customers or a change in the
net asset value per share of a Portfolio.
From its own resources or pursuant to the Plan, and subject to the dealers'
prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals, and
lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or dealers'
achievement of a sales target. The Distributor may, from time to time, reallow
the entire portion of the sales charge on Class A shares which it normally
retains to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass mailings.
17
<PAGE>
Philip R. McLoughlin, a Trustee and President of the Fund, is a director and
officer of Equity Planning. Michael E. Haylon, an officer of the Fund, is a
director of Equity Planning. William R. Moyer, a director and officer of Equity
Planning, is an officer of the Fund. G. Jeffrey Bohne, Nancy G. Curtiss and
Robert S. Dreissen, officers of the Fund, are officers of Equity Planning.
ADMINISTRATIVE SERVICES
Equity Planning also acts as administrative agent of the Portfolios and as
such performs administrative, bookkeeping and pricing functions for the
Portfolios. For its services, Equity Planning will be paid a fee equal to the
sum of (1) the documented cost of fund accounting and related services provided
by PFPC, Inc., as subagent, plus (2) the documented cost to Equity Planning to
provide financial reporting and tax services and to oversee the subagent's
performance. The current fee schedule of PFPC, Inc. is based upon the average of
the aggregate daily net asset values of the Portfolios, at the following
incremental annual rates.
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
Percentage rates are applied to the aggregate daily net asset values of the
Portfolios. PFPC, Inc. also charges minimum fees and additional fees for each
additional class of Fund shares. Equity Planning retains PFPC, Inc. as subagent
for each of the funds for which Equity Planning serves as administrative agent.
PFPC, Inc. agreed to a modified fee structure and waived certain charges.
Because PFPC, Inc.'s arrangement would have favored smaller funds over larger
funds, Equity Planning reallocates PFPC, Inc.'s overall asset-based charges
among all funds for which it serves as administrative agent on the basis of the
relative net assets of each fund. As a result, the PFPC, Inc. charges to the
Fund are expected to be slightly less than the amount that would be found
through direct application of the table illustrated above. For its services
during the Fund's fiscal year ended December 31, 1999, Equity Planning received
$206,684.
In addition, pursuant to an agreement between Equity Planning, the Fund's
Transfer Agent, and State Street Bank and Trust Company ("State Street"), State
Street has been appointed subagent to perform certain shareholder servicing
functions for the Fund. For performing such services State Street receives a
monthly fee from Equity Planning.
DISTRIBUTION PLAN
The Fund has adopted a distribution plan on behalf of its Class Y Shares
pursuant to Rule 12b-1 of the 1940 Act (the "Plan"). The Plan permits the Fund
to compensate the Distributor for expenses incurred in connection with
activities intended to promote the sale of shares of Class Y Shares of the Fund.
Pursuant to the Plan, the Fund shall pay the Distributor an amount equal to 25%
of the average daily net assets of the Class Y Shares for providing services to
Class Y shareholders, including assistance in connection with inquiries related
to shareholder accounts.
Equity Planning will retain all or a portion of the continuing distribution
fee assessed to Class Y shareholders to finance commissions and related
marketing expenses. Equity Planning intends to pay broker-dealers and exempt
financial institutions with whom it has a sales agreement a service fee of 0.25%
of the average daily net asset value of Class Y Shares sold by such
broker-dealers and exempt financial institutions, subject to future amendment or
termination.
In order to receive payments under the Plan, participants must meet such
qualifications to be established in the sole discretion of the Distributor, such
as services to the Fund's Class Y shareholders, or services providing the Fund
with more efficient methods of offering shares to coherent groups of clients,
members or prospects of a participant, or services permitting bulking of
purchases or sales, or transmission of such purchases or sales by computerized
tape or other electronic equipment, or other processing.
On a quarterly basis, the Trustees of the Fund review a report on
expenditures under the Plan and the purposes for which expenditures were made.
The Trustees conduct an additional, more extensive review annually in
determining whether the Plan will be continued. By its terms, continuation of
the Plan from year to year is contingent on annual approval by a majority of the
Trustees of the Fund and by a majority of the Trustees who are not "interested
persons" (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of the Plans or any related agreements (the
"Plan Trustees"). The Plan provides that it may not be amended to increase
materially the costs which the Fund may bear pursuant to the Plan without
approval of the Class Y shareholders of the Fund and that other material
amendments to the Plan must be approved by a majority of the Plan Trustees by
vote cast in person at a meeting called for the purpose of considering such
amendments. The Plan further provides that while it is in effect, the selection
and nomination of Trustees who are not "interested persons" shall be committed
to the discretion of the Trustees who are not "interested persons." The Plan may
be terminated at any time by vote of a majority of the Plan Trustees or a
majority of the outstanding Class Y Shares of the Fund.
For the fiscal year ended December 31, 1999, the Fund paid Rule 12b-1 Fees in
the amount of $67,138, of which Equity Planning received $909, W.S. Griffith &
Co., Inc., an affiliate, received $60,596 and unaffiliated broker-dealers
received $5,634.
18
<PAGE>
Distributor expenses under the Plans consisted of: (1) compensation to dealers,
$66,230; (2) compensation to sales and shareholder services personnel, $179,128;
(3) advertising costs, $169,709; (4) printing and mailing prospectuses to other
than current shareholders, $3,178; (5) service costs, $28,936; and (6) other
expenses, $60,796. No interested persons of the Fund and no Trustee who is not
an interested person of the Fund, as that term is defined in the Investment
Company Act of 1940, had any direct or indirect financial interest in the
operation of the Plan.
MANAGEMENT OF THE FUND
The Fund is an open-end, diversified investment company known as a mutual
fund. The Board of Trustees supervises the business affairs and investments of
the Fund, which is managed on a daily basis by each Portfolio's investment
adviser.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Fund and their principal
occupations for at least the last five years are set forth below. Unless
otherwise noted, the address of each executive officer and Trustee is 56
Prospect Street, Hartford, Connecticut 06115-0480.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE TRUST DURING PAST 5 YEARS
--------------------- -------------- -------------------
<S> <C> <C>
Robert Chesek (66) Trustee Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff &
Wethersfield, CT 06109 Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present).
E. Virgil Conway (71) Trustee Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Freddie Mac
Mortgage Securities Fund (Advisory Director) (1990-present),
Centennial Insurance Company (1974-present), Josiah Macy, Jr.,
Foundation (1975-present), The Harlem Youth Development
Foundation (1987-present) (Chairman, 1998-present), Accuhealth
(1994-present), Trism, Inc. (1994-present), Realty Foundation of
New York (1972-present), New York Housing Partnership Development
Corp. (Chairman) (1981-present) and Academy of Political Science
(Vice Chairman) (1985-present). Director/Trustee, Phoenix Funds
(1993-present). Trustee, Phoenix-Aberdeen Series Fund, Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present). Director, Duff & Phelps
Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present). Member, Audit Committee
of the City of New York (1981-1996). Advisory Director, Blackrock
Fannie Mae Mortgage Securities Fund (1989-1996) and Fund
Directions (1993-1998).
William W. Crawford (72) Trustee Representative (1994-1995), Senior Executive (1994-1995),
3029 Wynfield Mews Lane President and Chief Operating Officer (1988-1993), Hilliard,
Louisville, KY 40206 Lyons, Inc. (broker/dealer). Trustee, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Funds (2000-present). Director, Duff & Phelps Utilities Tax-Free
Income Inc. (1995-present), Duff & Phelps Utility and Corporate
Bond Trust Inc. (1995-present).
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE TRUST DURING PAST 5 YEARS
--------------------- -------------- -------------------
<S> <C> <C>
Harry Dalzell-Payne (70) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee, Phoenix-
The Flat Aberdeen Series Fund and Phoenix Duff & Phelps Institutional
Elmore Court Mutual Funds (1996-present). Trustee, Phoenix-Seneca Funds
Elmore, GLOS GL2 6NT, UK (1999-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Director, Farragut Mortgage Co., Inc.
(1991-1994). Formerly a Major General of the British Army.
William N. Georgeson (73) Trustee Trustee, Phoenix Duff & Phelps Institutional Mutual Funds
575 Glenwood Road (1996-present) and Phoenix-Seneca Funds (2000-present). Director,
Lake Forest, IL 60045 Duff & Phelps Utility and Corporate Bond Trust Inc.
(1994-present) and Duff & Phelps Utilities Tax-Free Income Inc.
(1993-present).
*Francis E. Jeffries (70) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee, Phoenix-
8477 Bay Colony Dr. Aberdeen Series Fund, Phoenix Duff & Phelps Institutional Mutual
#902 Funds (1996-present) and Phoenix-Seneca Funds (2000-present).
Naples, FL 34108 Director, Duff & Phelps Utilities Income Inc. (1987-present),
Duff & Phelps Utilities Tax-Free Income Inc. (1991-present) and
Duff & Phelps Utility and Corporate Bond Trust Inc.
(1993-present). Director, The Empire District Electric Company
(1984-present). Director (1989-1997), Chairman of the Board
(1993-1997), President (1989-1993), and Chief Executive Officer
(1989-1995), Phoenix Investment Partners, Ltd.
Leroy Keith, Jr. (61) Trustee Chairman (1995-present) and Chief Executive Officer (1995-1999),
Chairman Carson Products Company. Director/Trustee, Phoenix Funds
Carson Products Company (1980-present). Trustee, Phoenix-Aberdeen Series Fund, Phoenix
64 Ross Road Duff & Phelps Institutional Mutual Funds (1996-present) and
Savannah, GA 30750 Phoenix-Seneca Funds (2000-present). Director, Equifax Corp.
(1991-present) and Evergreen International Fund, Inc.
(1989-present). Trustee, Evergreen Liquid Trust, Evergreen Tax
Exempt Trust, Evergreen Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE TRUST DURING PAST 5 YEARS
--------------------- -------------- -------------------
<S> <C> <C>
*Philip R. McLoughlin (53) Trustee and Chairman (1997-present), Director (1995-present), Vice Chairman
President (1995-1997) and Chief Executive Officer (1995-1997), Phoenix
Investment Partners, Ltd. Director (1994-present) and Executive
Vice President, Investments (1988-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President, Phoenix
Funds (1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Trustee, Phoenix-Seneca Funds (1999-present).
Director, Duff & Phelps Utilities Tax-Free Income Inc.
(1995-present) and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1995-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990-present), Phoenix Equity
Planning Corporation. Chairman and Chief Executive Officer,
Phoenix/Zweig Advisers, LLC (1999-present). Director, PXRE
Corporation (Delaware) (1985-present) and World Trust Fund
(1991-present). Director and Executive Vice President, Phoenix
Life and Annuity Company (1996-present). Director and Executive
Vice President, PHL Variable Insurance Company (1995-present).
Director, Phoenix Charter Oak Trust Company (1996-present).
Director and Vice President, PM Holdings, Inc. (1985-present).
Director, PHL Associates, Inc. (1995-present). Director
(1992-present) and President (1992-1994), W.S. Griffith & Co.,
Inc.
Eileen A. Moran (46) Trustee President and Chief Executive Officer, PSEG Resources Inc.
23 Woodland Drive (1990-present). Trustee, Phoenix Duff & Phelps Institutional
East Windsor, NJ 08520 Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present).
Everett L. Morris (72) Trustee Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/Trustee, Phoenix Funds (1995-present). Trustee, Duff &
Colts Neck, NJ 07722 Phelps Mutual Funds (1994-present). Trustee, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1991-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1993-present).
*James M. Oates (54) Trustee Chairman, IBEX Capital Markets, Inc. (formerly IBEX Capital
Managing Director Markets LLC) (1997-present). Managing Director, Wydown Group
The Wydown Group (1994-present). Director, Phoenix Investment Partners, Ltd.
IBEX Capital Markets, Inc. (1995-present). Director/Trustee, Phoenix Funds (1987-present).
60 State Street Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Boston, MA 02109 Funds (2000-present). Director, AIB Govett Funds (1991-present).
Investors Financial Service Corporation (1995-present), Investors
Bank & Trust Corporation (1995-present), Plymouth Rubber Co.
(1995-present), Stifel Financial (1996-present), Command Systems,
Inc. (1998-present) and Connecticut River Bancorp (1998-present)
and Endowment for Health (1999-present). Member, Chief Executives
Organization (1996-present). Vice Chairman, Massachusetts
Housing-Partnership (1998-2000). Director, Blue Cross and Blue
Shield of New Hampshire (1994-1999).
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE TRUST DURING PAST 5 YEARS
--------------------- -------------- -------------------
<S> <C> <C>
Richard A. Pavia (70) Trustee Vice Chairman, Forest Preserve District, Cook County President
7145 North Ionia Advisory Council (1997-present). Special Consultant, K&D
Chicago, IL 60646 Facilities Resource Corp. (1995-present). Trustee, Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present). Director, Duff & Phelps
Utilities Tax-Free Income Inc. (1991-present), and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1992-present). Director
(1981-1997), Chairman and Chief Executive Officer (1989-1994),
Speer Financial, Inc.
*Hebert Roth, Jr. (71) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee, Phoenix-
134 Lake Street Aberdeen Series Fund, Phoenix Duff & Phelps Institutional Mutual
P.O. Box 909 Funds (1996-present) and Phoenix-Seneca Funds (2000-present).
Sherborn, MA 01770 Director, Boston Edison Company (1978-present). Landauer, Inc.
(medical services) (1970-present), Tech Ops./Sevcon, Inc.
(electronic controllers) (1987-present), and Mark IV Industries
(diversified manufacturer) (1985-present), Member, Directors
Advisory Council, Phoenix Home Life Mutual Insurance Company
(1998-present). Director, Phoenix Home Life Mutual Insurance
Company (1972-1998).
Richard E. Segerson (54) Trustee Managing Director, Northway Management Company (1998-present).
102 Valley Road Director/Trustee, Phoenix Funds, (1993-present). Trustee,
New Canaan, CT 06840 Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Managing Director, Mullin Associates (1993-1998).
Lowell P. Weicker, Jr. (69) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Greenwich, CT 06830 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Funds (2000-present). Director, UST Inc. (1995-present), HPSC
Inc. (1995-present), Compuware (1996-present) and Burroughs
Wellcome Fund (1996-present). Visiting Professor, University of
Virginia (1997-present). Director, Duty Free International
(1997). Chairman, Dresing, Lierman, Weicker (1995-1996). Governor
of the State of Connecticut (1991-1995).
Michael E. Haylon (42) Executive Vice Director and Executive Vice President--Investments. Phoenix Vice
President Investment Partners, Ltd. (1995-present). Executive Vice
President (1997-present), Vice President (1996-1997), Phoenix
Duff & Phelps Institutional Mutual Funds. Director
(1994-present), President (1995-present), Executive Vice
President (1994-1995), Vice President (1991-1994), Phoenix
Investment Counsel, Inc. Director, Phoenix Equity Planning
Corporation (1995-present). Executive Vice President, Phoenix
Funds (1993-present), Phoenix-Aberdeen Series Fund (1996-present)
and Phoenix-Seneca Funds (2000-present). Senior Vice President,
Securities Investments, Phoenix Home Life Mutual Insurance
Company (1993-1995).
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE TRUST DURING PAST 5 YEARS
--------------------- -------------- -------------------
<S> <C> <C>
Gail P. Seneca (47) Senior Vice Managing Director, Equities, Phoenix Investment Counsel, Inc.
909 Montgomery St. President (1998-present). President (1996-present) and Trustee (1996-2000),
San Francisco, CA 94133 Phoenix-Seneca Funds. Managing Member, GMG/Seneca Capital
Management LLC (1996-present). Chief Investment Officer and
managing general partner (1989-present), GMG/Seneca Capital
Management, L.P. Senior Vice President, The Phoenix Edge
Series Fund (1998-present), Phoenix Multi-Portfolio Fund
(1998-present), Phoenix Duff & Phelps Institutional Mutual
Funds (1999-present) and Phoenix Strategic Equity Series
Fund (1998-present).
James D. Wehr (43) Senior Vice Senior Vice President (1998-present), Managing Director, Fixed
President Income, (1996-present), Vice President (1991-1996), Phoenix
Investment Counsel, Inc. Senior Vice President (1997-present),
Vice President (1988-1997), Phoenix Multi-Portfolio Fund; Senior
Vice President (1997-present), Vice President (1990-1997),
Phoenix Series Fund; Senior Vice President (1997-present), Vice
President (1991-1997), The Phoenix Edge Series Fund; Senior Vice
President (1997-present), Vice President (1993-1997),
Phoenix-Goodwin California Tax Exempt Bond Fund; Senior Vice
President (1997-present), Vice President (1996-1997), Phoenix
Duff & Phelps Institutional Mutual Funds; and Senior Vice
President, Phoenix-Goodwin Multi-Sector Short Term Bond Fund,
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Phoenix-Oakhurst
Income & Growth Fund and Phoenix-Oakhurst Strategic Allocation
Fund, Inc. (1997-present). Senior Vice President and Chief
Investment Officer, Duff & Phelps Utilities Tax Free Income Inc.
(1997-present). Managing Director, Public Fixed Income, Phoenix
Home Life Insurance Company (1991-1995).
Robert S. Driessen (53) Vice President Vice President, Compliance, Phoenix Investment Partners, Ltd.
and Assistant (since 1999). Vice President, Phoenix Funds, Phoenix-Aberdeen
Secretary Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds and
Phoenix-Seneca Funds (2000-present). Compliance Officer
(2000-present), Associate Compliance Officer (1999-2000), PXP
Securities Corporation. Vice President, Risk Management Liaison,
Bank of America (1996-1999). Vice President, Securities
Compliance, The Prudential Insurance Company of America
(1993-1996). Branch Chief/Financial Analyst, Securities and
Exchange Commission, Division of Investment Management
(1972-1993).
Ronald K. Jacks (35) Senior Vice Managing Director, Equities, Phoenix Investment Counsel, Inc.
909 Montgomery St. President (1998-present). Secretary (1996-present) and Trustee
San Francisco. CA 94133 (1996-1997), Phoenix-Seneca Funds. Portfolio Manager, Seneca
Capital Management LLC (1996-present). Portfolio Manager,
GMG/Seneca Capital Management, L.P. (1990-present). Vice
President, The Phoenix Edge Series Fund (1998-present), Phoenix
Multi-Portfolio Fund (1998-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1999-present) and Phoenix Strategic
Equity Series Fund (1998-present).
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION
NAME, ADDRESS AND AGE WITH THE TRUST DURING PAST 5 YEARS
--------------------- -------------- -------------------
<S> <C> <C>
Richard D. Little (52) Vice President Managing Director, Equities, Phoenix Investment Counsel, Inc. and
909 Montgomery St. National Securities & Research Corporation (1998-present). Vice
San Francisco, CA 94133 President, Phoenix-Seneca Funds (1996-present). General Partner
and Director of Equities, GMG/Seneca Capital Management, L.P.
(1989-present). Director of Equities, Seneca Capital Management
LLC (1996-present). Vice President, The Phoenix Edge Series Fund
(1998-present), Phoenix Multi-Portfolio Fund (1998-present),
Phoenix Duff & Phelps Institutional Mutual Funds (1999-present)
and Phoenix Strategic Equity Series Fund (1998-present).
William R. Moyer (56) Vice President Executive Vice President and Chief Financial Officer
100 Bright Meadow Blvd. (1999-present), Senior Vice President (1995-1999), Phoenix
P.O. Box 2200 Investment Partners, Ltd. Director (1998-present), Senior Vice
Enfield, CT 06083-2200 President, (1990-present), Chief Financial Officer
(1996-present), Finance (until 1996) and Treasurer
(1994-1996 and 1998-present), Phoenix Equity Planning
Corporation. Director (1998-present), Senior Vice President
(1990-present), Chief Financial Officer (1996-present) and
Treasurer (1994-present), Phoenix Investment Counsel, Inc.
Vice President and Chief Financial Officer, Duff & Phelps
Investment Management Co. Vice President, Phoenix Funds
(1990-present), Phoenix-Aberdeen Series Fund and Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present).
Executive Vice President, Phoenix-Seneca Funds
(2000-present). Vice President, Investment Products Finance,
Phoenix Home Life Mutual Insurance Company (1990-1995).
Nancy G. Curtiss (47) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present), Phoenix-Aberdeen Series Fund
(1996-present) and Seneca Funds (2000-present). Second Vice
President and Treasurer, Fund Accounting, Phoenix Home Life
Mutual Insurance Company (1994-1995), Various positions with
Phoenix Home Life Insurance Company (1987-1994).
G. Jeffrey Bohne (52) Secretary Senior Vice President, Mutual Fund Customer Service
101 Munson Street (1999-present), Vice President, Mutual Fund Customer Service
Greenfield, MA 01301 (1996-1999), Vice President, Transfer Agent Operations
(1993-1996), Phoenix Equity Planning Corporation.
Secretary/Clerk, Phoenix Funds (1993-present), Phoenix-Aberdeen
Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Seneca Funds (2000-present). Vice
President and General Manager, Phoenix Home Life Mutual Insurance
Co. (1993-present).
</TABLE>
*Trustees identified with an asterisk are considered to be interested persons
of the Fund (within the meaning of the Investment Company Act of 1940, as
amended) because of their affiliation with Phoenix Investment Counsel, Inc.,
or Phoenix Equity Planning Corporation.
For services rendered to the Fund during the period ended December 31, 1999,
the Trustees received an aggregate of $92,500 from the Fund as Trustees' fees.
Each Trustee who is not a full-time employee of the Adviser or any of its
affiliates currently receives a retainer at the annual rate of $3,000 and $500
per meeting. Each Trustee who serves on a Committee receives a fee of $250 for
each meeting attended. The function of the Executive Committee is to serve as a
contract review, compliance review and performance review delegate of the full
Board of Trustees. Officers and employees of the Adviser who are interested
persons are compensated for their services by the Adviser and receive no
compensation from the Fund.
For the Fund last fiscal year, the Trustees received the following
compensation:
24
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
TOTAL
COMPENSATION
PENSION OR FROM FUND AND
AGGREGATE RETIREMENT BENEFITS ESTIMATED FUND COMPLEX
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS (37 FUNDS)
NAME FROM FUND OF FUND EXPENSES UPON RETIREMENT PAID TO TRUSTEES
---- --------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Robert Chesek $6,000 None None $ 98,750
E. Virgil Conway+ $8,250 None None $ 118,250
William W. Crawford $6,000* None None $ 41,000
Harry Dalzell-Payne+ $7,250 None None $ 95,000
William N. Georgeson $6,250 None None $ 43,750
Francis E. Jeffries $6,000* None None $ 108,000
Leroy Keith, Jr. $6,000 None None $ 63,750
Philip R. McLoughlin+ $ 0 None None $ 0
Eileen A. Moran $6,250 None None $ 41,250
Everett L. Morris+ $7,750* None None $ 100,250
James M. Oates+ $7,250 None None $ 72,250
Richard A. Pavia $7,000* None None $ 42,000
Herbert Roth, Jr.+ $5,250 None None $ 59,250
Richard E. Segerson $7,000* None None $ 72,000
Lowell P. Weicker, Jr. $6,250 None None $ 68,750
----------
</TABLE>
*This compensation (and the earnings thereon) was deferred pursuant to the
Directors' Deferred Compensation Plan. At September 30, 2000, the total
amount of deferred compensation (including interest and other accumulation
earned on the original amounts deferred) accrued for Messrs. Crawford,
Jeffries, Morris, Pavia, Roth and Segerson was $26,038.79, $547,732.52,
$210,498.92, $26,129.91, $178,770.56, and $129,978.47, respectively. At
present, by agreement among the Fund, the Distributor and the electing
director, director fees that are deferred are paid by the Fund to the
Distributor. The liability for the deferred compensation obligation appears
only as a liability of the Distributor.
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are members
of the Executive Committee.
On October 17, 2000, the trustees and officers as a group owned less than
1% of the then outstanding shares of the Fund.
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of October 18, 2000 with
respect to each person who owns of record or is known by the Fund to own of
record or beneficially own 5% or more of any class of the Fund's equity
securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER PORTFOLIO AND CLASS PERCENTAGE OF THE CLASS NUMBER OF SHARES
------------------- ------------------- ----------------------- ----------------
<S> <C> <C> <C>
Carol J. Matteson TTEE Growth Stock Class Y 8.53% 54,513.143
Mount IDA College Retirement Plan
777 Dedham Street
Newton Centre, MA 02459-3323
N. Charles Tomas TTEE Growth Stock Class Y 43.31% 276,650.675
Christian Methodist Episcopal
Church Ret Plan & Trust
P.O. Box 74
Memphis, TN 38101-0074
Howard Miller Clock Co. TTEE Growth Stock Class X 27.33% 323,554.081
Howard Miller/Hekman Defined
Benefit Pension Plan
860 E Main Avenue
Zeeland, MI 49464-1300
KCB Services & Company Growth Stock Class Y 37.92% 242,217.370
FOB St. Joseph Hospital Managed Bond Class Y 37.81% 76,732.601
C/O Quads Trust Company
P.O. Box 4310
Frederick, MD 21705-4310
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER PORTFOLIO AND CLASS PERCENTAGE OF THE CLASS NUMBER OF SHARES
------------------- ------------------- ----------------------- ----------------
<S> <C> <C> <C>
KCB Services & Company Growth Stock Class X 9.45% 111,858.974
FBO Elizabeth Carbide Die Co., Inc.
C/O Quads Trust Company
P.O. Box 4310
Frederick, MD 21705-4310
KCB Services & Company Growth Stock Class X 5.97% 70,668.754
Grand Haven Brass Foundry Division of
JSJ Corp. Bargaining Empl. Pension Pl.
C/O Quads Trust Company
P.O. Box 4310
Frederick, MD 21705-4310
Kenneth H. Huntoon Growth Stock Class X 5.52% 65,327.814
Deborah A. Schoultz
James M. Aiken TTEES
Fibre-Metal Products Co. PSP
P.O. Box 248
Concordville, PA 19221-0248
Joseph L. Romain Growth Stock Class X 8.32% 98,494.719
Nancy G. Atkinson TTEE
Romain Management Investment &
Insurance Inc. Target Ben Pen Plan
18141 West 13 Mile Road Ste. A-2
Southfield, MI 48076-1113
Bernhard Klingenberg Growth Stock Class X 5.10% 60,410.946
Ronald J. Steenken TTEEs
Willett Hoffmann & Associates
Pension Plan
809 East 2nd Street
Dixon, IL 61021-3275
Charles Quimby Eric K. Whinston TTES Managed Bond Class X 8.78% 335,192.824
Re-Solve Stie Tr Fund
C/O Mintz Levin Cohn Ferris Glovsky
& Popeo PC Attn: Michael P. Last
One Financial Center
Boston, MA 02111-2621
Sharon P. Saganey TTEE Managed Bond Class X 28.23% 1,078,130.654
Painters & Allied Trades District
Counsel No. 35
Defined Benefit Plan
25 Colgate Road, Ste. 204
Roslindale, MA 02131-1123
Glenn D. Shaffer TTEE Managed Bond Class X 6.82% 260,271.065
Plumbers & Pipefitters Local
Union No. 9 Pension Fund
I E Shaffer & Co
P.O. Box 1028, 830 Bear Tavern Road
West Trenton, NJ 08628-0230
Glenn D. Shaffer TTEE Managed Bond Class X 7.74% 295,601.362
Plumbers Local No. 24 Pension Plan
830 Bear Tavern Road
West Trenton, NJ 08628-0230
26
<PAGE>
Phoenix Charter Oak Trust Co. Managed Bond Class X 6.06% 231,606.939
38 Prospect Street
Hartford, CT 06103-2814
John F. McLellan TTEE Managed Bond Class X 9.22% 351,982.349
Plymouth County Contributory
Retirement System
11 South Russell Street
Plymouth, MA 02360-3909
N. Charles Thomas TTEE Managed Bond Class Y 56.38% 117,406.090
Christian Methodist Episcopal
Church Ret. Plan & Trust
P.O. Box 74
Memphis, TN 38101-0074
</TABLE>
ADDITIONAL INFORMATION
CAPITAL STOCK
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
portfolios and different classes of those portfolios. Holders of shares of a
portfolio have equal rights with regard to voting, redemptions, dividends,
distributions, and liquidations with respect to that portfolio. Shareholders of
all portfolios vote on the election of Trustees. On matters affecting an
individual portfolio (such as approval of an investment advisory agreement or a
change in fundamental investment policies) and on matters affecting an
individual class (such as approval of matters relating to a
Plan of Distribution for a particular class of shares), a separate vote of that
portfolio or Class is required. The Trust does not hold regular meetings of
shareholders. The Trustees will call a meeting when at least 10% of the
outstanding shares so request in writing. If the Trustees fail to call a meeting
after being so notified, the Shareholders may call the meeting. The Trustees
will assist the Shareholders by identifying other shareholders or mailing
communications, as required under Section 16(c) of the 1940 Act.
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. shares do not have cumulative voting rights, preemptive rights
or subscription rights. The assets received by the Trust for the issue or sale
of shares of each portfolio, and any class thereof and all income, earnings,
profits and proceeds thereof, are allocated to such portfolio, and class,
respectively, subject only to the rights of creditors, and constitute the
underlying assets of such portfolio or class. The underlying assets of each
portfolio are required to be segregated on the books of account, and are to be
charged with the expenses in respect to such portfolio and with a share of the
general expenses of the Trust. Any general expenses of the Trust not readily
identifiable as belonging to a particular portfolio or class will be allocated
by or under the direction of the Trustees as they determine fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust. the Declaration of Trust provides for indemnification
out of the Trust property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability, which
is considered remote, is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
Prior to March 1, 1996, the Managed Bond and Growth Stock Portfolios existed
as the Managed Bond Account (Separate Account P) and Growth Stock Account
(Separate Account S), respectively, separate investment accounts of Phoenix Home
Life, pursuant to the insurance laws of the State of New York and the laws of
other states. Each separate account was maintained for the purpose of investing
amounts allocated thereto by Phoenix Home Life under certain group annuity
contracts issued by Phoenix Home Life in connection with pension or
profit-sharing plans which meet the requirements of Section 401(a) of the
Internal Revenue Code of 1986, as amended. The separate accounts were not
investment companies pursuant to the 1940 Act. On October 16, 1995, the Board of
Directors of Phoenix Home Life approved the conversion of each such separate
account into a corresponding of the Portfolio. As of March 1, 1996, the net
assets of each separate account were transferred into the corresponding
Portfolio of the Fund in exchange for shares of that Portfolio which were
credited to each contractholder in accordance with the value of that
contractholder's separate account units as of the close of business on such
date. Each separate account was then terminated.
FINANCIAL STATEMENTS
The Financial Statements for the periods ended December 31, 1999 and June 30,
2000 appearing in the Fund's 1999 Annual Report and June 2000 Semiannual Report
to Shareholders are incorporated herein by reference.
27
<PAGE>
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110,
has been selected as the independent accountants for the Fund.
PricewaterhouseCoopers LLP audits the Fund's annual financial statements and
expresses an opinion thereon.
REPORT TO SHAREHOLDERS
The fiscal year of the Fund ends on December 31. The Fund will send to its
shareholders at least semiannually reports showing the securities of the Fund's
funds and other information.
CUSTODIAN AND TRANSFER AGENT
Chase Manhattan Bank, N.A., 1 Chase Manhattan Plaza, Floor 3B, New York, NY
10081, serves as custodian for the assets of the Managed Bond and Growth Stock
Portfolios.
Equity Planning acts as Transfer Agent for the Fund.
28
<PAGE>
APPENDIX
MOODY'S INVESTORS SERVICE, INC., CORPORATE BOND RATINGS
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they Comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca--Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
STANDARD AND POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB-B-CCC-CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
D--Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
FITCH INVESTOR SERVICES, INC.
AAA--Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
29
<PAGE>
AA--Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA". Because bonds rated in the
"AAA" and "AA" categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated "F-1+."
A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB--Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore
impair timely payment. The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with higher ratings.
BB--Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified which could
assist the obligor in satisfying its debt service requirements.
B--Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.
CCC--Bonds have certain identifiable characteristics which, if not remedied,
may lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C--Bonds are in imminent default in payment of interest or principal.
DDD, DD, and D--Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. "DDD"
represents the highest potential for recovery on these bonds, and "D" represents
the lowest potential for recovery.
Plus (+) Minus (-)--Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs however, are not used in the "DDD", "DD", or "D" categories.
Duff & Phelps Credit Rating Co. Rating Scale--Duff & Phelps (not affiliated
with the Fund or DPIM) offers ratings for short-term and long-term debt,
preferred stock, structured financings, and insurer's claims paying ability. D&P
ratings are specific to credit quality, i.e., the likelihood of timely payment
for principal, interest, and in the case of a preferred stock rating, preferred
stock dividends. The insurance company claims paying ability ratings reflect an
insurer's ability to meet its claims obligations.
LONG-TERM RATINGS
AAA Highest Quality
AA+, AA, AA- High Quality
A+, A, A- Good Quality
BBB+, BBB, BBB- Satisfactory Quality
(investment grade)
BB+, B, B- Non-Investment Grade
B+, B, B- Non-Investment Grade
CCC Speculative
30
<PAGE>
PHOENIX-DUFF & PHELPS INSTITUTIONAL GROWTH STOCK PORTFOLIO
INVESTMENTS AT JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C> <C>
COMMON STOCKS--88.8%
ALUMINUM--2.5%
Alcoa, Inc.............................. 56,010 $ 1,624,290
BANKS (MAJOR REGIONAL)--3.2%
Mellon Financial Corp................... 56,900 2,073,294
BEVERAGES (NON-ALCOHOLIC)--3.6%
Coca-Cola Co. (The)..................... 40,580 2,330,814
BROADCASTING (TELEVISION, RADIO & CABLE)--4.1%
AMFM, Inc.(b)........................... 38,140 2,631,660
CHEMICALS--2.3%
Praxair, Inc............................ 38,440 1,439,097
COMMUNICATIONS EQUIPMENT--10.8%
Corning, Inc............................ 11,460 3,092,767
General Motors Corp. Class H(b)......... 24,220 2,125,305
Scientific-Atlanta, Inc................. 22,770 1,696,365
-----------
6,914,437
-----------
COMPUTERS (HARDWARE)--4.3%
International Business Machines Corp.... 7,790 853,492
Sun Microsystems, Inc.(b)............... 20,600 1,873,313
-----------
2,726,805
-----------
COMPUTERS (NETWORKING)--2.0%
Cisco Systems, Inc.(b).................. 19,620 1,247,096
ELECTRICAL EQUIPMENT--4.2%
General Electric Co..................... 50,880 2,696,640
ELECTRONICS (SEMICONDUCTORS)--3.3%
Intel Corp.............................. 15,670 2,094,883
ENTERTAINMENT--2.6%
Walt Disney Co. (The)................... 42,070 1,632,842
EQUIPMENT (SEMICONDUCTORS)--3.2%
Applied Materials, Inc.(b).............. 22,880 2,073,500
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C> <C>
FINANCIAL (DIVERSIFIED)--8.0%
American Express Co..................... 16,770 $ 874,136
Citigroup, Inc.......................... 38,425 2,315,106
Morgan Stanley Dean Witter & Co......... 23,180 1,929,735
-----------
5,118,977
-----------
HEALTH CARE (DIVERSIFIED)--3.5%
Johnson & Johnson....................... 21,640 2,204,575
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--6.5%
Merck & Co., Inc........................ 32,790 2,512,534
Pfizer, Inc............................. 34,610 1,661,280
-----------
4,173,814
-----------
HEALTH CARE (HOSPITAL MANAGEMENT)--2.5%
HCA-The Healthcare Co................... 52,350 1,590,131
HOUSEHOLD PRODUCTS (NON-DURABLE)--2.7%
Clorox Co. (The)........................ 38,970 1,746,343
NATURAL GAS--2.9%
El Paso Energy Corp..................... 36,880 1,878,575
OIL & GAS (DRILLING & EQUIPMENT)--6.1%
Diamond Offshore Drilling, Inc.......... 41,710 1,465,064
Halliburton Co.......................... 51,680 2,438,650
-----------
3,903,714
-----------
RETAIL (BUILDING SUPPLIES)--3.4%
Lowe's Cos., Inc........................ 53,100 2,180,419
RETAIL (GENERAL MERCHANDISE)--3.4%
Wal-Mart Stores, Inc.................... 38,230 2,203,004
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--3.7%
Nextel Communications, Inc. Class
A(b).................................... 38,900 2,380,194
- -------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $45,458,024) 56,865,104
- -------------------------------------------------------------------
</TABLE>
2 See Notes to Financial Statements
<PAGE>
Phoenix-Duff & Phelps Institutional Growth Stock Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--10.4%
COMMUNICATIONS EQUIPMENT--6.4%
Nokia Oyj Sponsored ADR (Finland)....... 28,730 $ 1,434,704
Nortel Networks Corp. (Canada).......... 39,040 2,664,480
-----------
4,099,184
-----------
ELECTRONICS (SEMICONDUCTORS)--4.0%
STMicroelectronics NV (Netherlands)..... 39,720 2,549,528
- -------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $2,815,581) 6,648,712
- -------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--99.2%
(IDENTIFIED COST $48,273,605) 63,513,816
- -------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
--------- -------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--1.5%
COMMERCIAL PAPER--1.5%
Koch Industries, Inc. 6.89%,
7/3/00.............................. A-1+ $ 980 979,625
- ---------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $979,625) 979,625
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS--100.7%
(IDENTIFIED COST $49,253,230) 64,493,441(a)
Cash and receivables, less liabilities--(0.7%) (466,308)
-----------
NET ASSETS--100.0% $64,027,133
===========
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $16,710,082 and gross
depreciation of $1,636,187 for federal income tax purposes. At June 30,
2000, the aggregate cost of securities for federal income tax purpose was
$49,419,546.
(b) Non-income producing.
See Notes to Financial Statements 3
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $49,253,230) $ 64,493,441
Cash 4,903
Receivables
Fund shares sold 92,964
Dividends and interest 27,040
Prepaid expenses 674
--------------
Total assets 64,619,022
--------------
LIABILITIES
Payables
Investment securities purchased 521,471
Investment advisory fee 12,553
Financial agent fee 7,705
Transfer agent fee 6,668
Distribution fee 4,488
Trustees' fee 1,188
Accrued expenses 37,816
--------------
Total liabilities 591,889
--------------
NET ASSETS $ 64,027,133
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 45,348,648
Undistributed net investment income 26,865
Accumulated net realized gain 3,411,409
Net unrealized appreciation 15,240,211
--------------
NET ASSETS $ 64,027,133
==============
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $41,836,129) 1,191,876
Net asset value and offering price per share $35.10
CLASS Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $22,191,004) 634,781
Net asset value and offering price per share $34.96
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 248,963
Interest 62,647
Foreign taxes withheld (1,716)
--------------
Total investment income 309,894
--------------
EXPENSES
Investment advisory fee 186,307
Distribution fee, Class Y 26,786
Financial agent fee 45,581
Registration 20,803
Transfer agent 19,700
Professional 15,934
Custodian 13,159
Trustees 9,972
Printing 6,004
Miscellaneous 7,946
--------------
Total expenses 352,192
Less expenses borne by investment adviser (108,040)
--------------
Net expenses 244,152
--------------
NET INVESTMENT INCOME 65,742
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 3,474,389
Net change in unrealized appreciation (depreciation) on
investments (3,079,407)
--------------
NET GAIN ON INVESTMENTS 394,982
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 460,724
==============
</TABLE>
4 See Notes to Financial Statements
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
6/30/00 Year Ended
(Unaudited) 12/31/99
----------- ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 65,742 $ 58,344
Net realized gain (loss) 3,474,389 17,061,177
Net change in unrealized appreciation
(depreciation) (3,079,407) 1,963,468
----------- ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 460,724 19,082,989
----------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (42,919) (39,257)
Net investment income, Class Y (15,045) --
Net realized gains, Class X (2,107,538) (11,735,478)
Net realized gains, Class Y (1,123,001) (5,991,827)
----------- ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (3,288,503) (17,766,562)
----------- ------------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (64,563
and 43,182 shares, respectively) 2,198,371 1,703,697
Net asset value of shares issued from
reinvestment of distributions
(62,022 and 328,868 shares,
respectively) 2,150,311 11,774,581
Cost of shares redeemed (59,643 and
472,062 shares, respectively) (2,159,894) (19,926,904)
----------- ------------
Total 2,188,788 (6,448,626)
----------- ------------
CLASS Y
Proceeds from sales of shares (15,217
and 23,824 shares, respectively) 547,714 935,225
Net asset value of shares issued from
reinvestment of distributions
(32,958 and 168,015 shares,
respectively) 1,138,044 5,991,813
Cost of shares redeemed (8,227 and
161,837 shares, respectively) (301,079) (6,189,832)
----------- ------------
Total 1,384,679 737,206
----------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS 3,573,467 (5,711,420)
----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS 745,688 (4,394,993)
----------- ------------
NET ASSETS
Beginning of period 63,281,445 67,676,438
----------- ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$26,865 AND $19,087, RESPECTIVELY] $64,027,133 $ 63,281,445
=========== ============
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix Duff & Phelps Institutional Growth Stock Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS X
------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED DECEMBER 31, INCEPTION
6/30/00 ---------------------------------------- 3/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 36.83 $ 37.82 $ 33.85 $ 47.42 $ 48.01
INCOME FROM INVESTMENT
OPERATIONS(6)
Net investment income (loss) .05 0.08 0.05(7) 0.31(7) 0.34
Net realized and unrealized gain
(loss) .13 11.65 9.88 10.60 4.89
------- -------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS .18 11.73 9.93 10.91 5.23
------- -------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment
income (.04) (0.05) (0.15) (0.39) (0.30)
Dividends from net realized gains (1.87) (12.67) (5.81) (24.07)(3) (5.52)
In excess of net investment
income -- -- -- (0.02) --
------- -------- ------- ------- -------
TOTAL DISTRIBUTIONS (1.91) (12.72) (5.96) (24.48) (5.82)
------- -------- ------- ------- -------
Change in net asset value (1.73) (0.99) 3.97 (13.57) (0.59)
------- -------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 35.10 $ 36.83 $ 37.82 $ 33.85 $ 47.42
======= ======== ======= ======= =======
Total return 0.54%(2) 33.93% 31.20% 25.76% 10.71%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $41,836 $41,436 $46,330 $44,350 $82,739
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.70%(1) 0.70% 0.70% 0.70% 0.70%(1)
Net investment income 0.30%(1) 0.17% 0.13% 0.64% 0.65%(1)
Portfolio turnover 57%(2) 136% 115% 148% 99%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS Y
------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED DECEMBER 31, INCEPTION
6/30/00 ---------------------------------------- 3/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 36.72 $ 37.79 $ 33.86 $ 47.43 $ 48.01
INCOME FROM INVESTMENT
OPERATIONS(6)
Net investment income (loss) 0.02 (0.03) (0.04)(7) 0.18(7) 0.18
Net realized and unrealized gain
(loss) 0.12 11.63 9.88 10.59 4.95
------- -------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 0.14 11.60 9.84 10.77 5.13
------- -------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.03) -- (0.10) (0.31) (0.19)
Dividends from net realized gains (1.87) (12.67) (5.81) (24.02)(3) (5.52)
In excess of net investment
income -- -- -- (0.01) --
------- -------- ------- ------- -------
TOTAL DISTRIBUTIONS (1.90) (12.67) (5.91) (24.34) (5.71)
------- -------- ------- ------- -------
Change in net asset value (1.76) (1.07) 3.93 (13.57) (0.58)
------- -------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 34.96 $ 36.72 $ 37.79 $ 33.86 $ 47.43
======= ======== ======= ======= =======
Total return 0.42%(2) 33.60% 30.85% 25.46% 10.48%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $22,191 $21,845 $21,347 $17,631 $22,978
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 0.95%(1) 0.95% 0.95% 0.95% 0.95%(1)
Net investment income (loss) 0.05%(1) (0.09)% (0.11)% 0.39% 0.39%(1)
Portfolio turnover 57%(2) 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 1.05%,
0.95%, 1.00%, 0.87%, and 0.81% for the periods ended June 30, 2000,
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 1.30%,
1.20%, 1.25%, 1.12%, and 1.06% for the periods ended June 30, 2000,
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.
6 See Notes to Financial Statements
<PAGE>
PHOENIX-DUFF & PHELPS INSTITUTIONAL MANAGED BOND PORTFOLIO
INVESTMENTS AT JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
AGENCY MORTGAGE-BACKED SECURITIES--16.4%
Fannie Mae 6.75%, 3/25/20................ Aaa $ 144 $ 143,398
Fannie Mae TBA 6%, 7/15/30............... Aaa 6,265 5,728,559
Freddie Mac 6.65%, 6/15/23............... Aaa 2,050 1,997,520
GNMA 6.50%, 3/15/29...................... Aaa 1,476 1,401,536
GNMA 6.50%, 4/15/29...................... Aaa 1,346 1,277,091
GNMA 7%, 7/15/29(e)...................... Aaa 4,945 4,808,564
GNMA 7%, 8/15/29......................... Aaa 1,942 1,888,759
- --------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $17,345,942) 17,245,427
- --------------------------------------------------------------------------
MUNICIPAL BONDS--14.9%
CALIFORNIA--5.4%
Alameda Corridor Transportation Authority
Revenue Taxable Series C 6.50%, 10/1/19.. Aaa 1,000 875,220
Alameda Corridor Transportation Authority
Revenue Taxable Series C 6.60%, 10/1/29.. Aaa 635 544,125
Fresno County Pension Obligation Revenue
Taxable 6.21%, 8/15/06................... Aaa 1,400 1,313,060
Long Beach Pension Obligation Taxable
7.09%, 9/1/09............................ Aaa 1,475 1,428,729
Oakland Pension Obligation Revenue
Taxable Series A 6.95%, 12/15/08......... Aaa 200 192,578
Oakland Pension Obligation Revenue
Taxable Series A 6.98%, 12/15/09......... Aaa 400 384,296
Ventura County Pension Obligation Taxable
6.54%, 11/1/05........................... Aaa 1,000 960,530
------------
5,698,538
------------
COLORADO--1.7%
Denver City and County School District 01
Pension Taxable 6.76%, 12/15/07(e)....... Aaa 1,900 1,819,174
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
CONNECTICUT--1.6%
Mashantucket Western Pequot Tribe Revenue
Taxable Series A 6.91%, 9/1/12........... Aaa 1,100 1,046,771
Mashantucket Western Pequot Tribe Revenue
Taxable Series A 144A 6.57%, 9/1/13(b)... Aaa $ 715 $ 655,326
------------
1,702,097
------------
FLORIDA--1.8%
Tampa Solid Waste System Revenue Taxable
Series A 6.43%, 10/1/08.................. Aaa 930 858,604
University of Miami Exchangeable Revenue
Taxable Series A 7.40%, 4/1/11(d)........ Aaa 210 203,257
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20(d)........ Aaa 825 788,857
------------
1,850,718
------------
ILLINOIS--1.8%
Illinois Educational Facilities
Authority-Loyola University Revenue
Taxable Series A 7.84%, 7/1/24(e)........ Aaa 1,925 1,869,541
MASSACHUSETTS--0.8%
Massachusetts State Port Authority
Revenue Taxable Series C 6%, 7/1/01...... Aa 870 860,630
NEW JERSEY--0.4%
New Jersey Sports & Exposition Authority
State Contract Taxable Series B 7.375%,
3/1/13................................... Aaa 470 461,751
NEW YORK--0.4%
New York State Taxable Series D 6.75%,
6/15/09.................................. A 400 376,456
PENNSYLVANIA--0.8%
Philadelphia Authority For Industrial
Development Pension Funding Retirement
Systems Revenue Taxable Series A 5.79%,
4/15/09.................................. Aaa 1,000 887,090
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Duff & Phelps Institutional Managed Bond Portfolio
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
TEXAS--0.2%
Dallas-Fort Worth International Airport
Facilities Improvement Revenue Taxable
6.45%, 11/1/08........................... Aaa $ 200 $ 186,530
- --------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $16,600,790) 15,712,525
- --------------------------------------------------------------------------
ASSET-BACKED SECURITIES--4.9%
American Express Credit Account Master
Trust 99-2, A 5.95%, 12/15/06............ Aaa 975 933,258
Capita Equipment Receivables Trust 97-1,
B 6.45%, 8/15/02......................... Aa 600 591,844
Countrywide Asset-Backed Certificates
99-3, AF5 7.73%, 9/25/27................. Aaa 1,625 1,621,219
First USA Credit Card Master Trust 96-6,
A 6.775%, 7/10/06........................ Aaa 100 100,031
Premier Auto Trust 97-3, B 6.52%,
1/6/03................................... A 850 843,013
Team Fleet Financing Corp. 98-3A, C
6.63%, 10/25/04.......................... BBB(c) 1,150 1,074,531
- --------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $5,225,912) 5,163,896
- --------------------------------------------------------------------------
CORPORATE BONDS--11.6%
AIRLINES--1.6%
America West Airlines Series AMBC 144A
8.057%, 7/2/20(b)........................ Aaa 585 585,000
Northwest Airlines Corp. Series 2000-1
Class G 8.072%, 4/1/21................... Aaa 1,065 1,081,177
------------
1,666,177
------------
BROADCASTING (TELEVISION, RADIO & CABLE)--1.0%
Adelphia Communications Corp. Series B
8.375%, 2/1/08........................... B 590 521,412
Charter Communications Holdings LLC 10%,
4/1/09................................... B 560 540,400
------------
1,061,812
------------
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
COMMUNICATIONS EQUIPMENT--1.9%
Crown Castle International Corp. 10.375%,
5/15/11.................................. B $ 825 $ 508,406
Metromedia Fiber Network, Inc. Series B
10%, 11/15/08............................ B 350 346,500
Spectrasite Holdings, Inc. 144A 10.75%,
3/15/00(b)............................... B 530 531,325
Williams Communications 10.70%,
10/1/07.................................. B 575 573,563
------------
1,959,794
------------
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--1.4%
Mohegan Tribal Gaming 8.125%, 1/1/06..... Ba 250 238,750
Mohegan Tribal Gaming 8.75%, 1/1/09...... Ba 250 238,750
Park Place Entertainment Corp. 7.875%
12/15/05................................. Ba 530 499,525
Station Casinos, Inc. 144A W.I. 9.875%,
7/1/10(b)................................ B 520 522,600
------------
1,499,625
------------
HEALTH CARE (GENERIC AND OTHER)--0.5%
ICN Pharmaceutical Inc. 144A 8.75%,
11/15/08(b).............................. Ba 505 499,950
HOMEBUILDING--0.3%
Lennar Corp. 7.625%, 3/1/09.............. Ba 385 336,394
INSURANCE (PROPERTY-CASUALTY)--0.5%
HSB Capital I Series B 7.19%, 7/15/27.... BBB(c) 550 508,895
SERVICES (COMMERCIAL & CONSUMER)--1.0%
ARA Services, Inc. 10.625%, 8/1/00....... Baa 53 53,066
Service Corp. International 6%,
12/15/05................................. Ba 880 475,200
United Rentals, Inc. Series B 9.25%,
1/15/09.................................. B 575 521,813
------------
1,050,079
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.7%
Voicestream Wireless Holdings 10.375%,
11/15/09................................. B 745 774,800
TELECOMMUNICATIONS (LONG DISTANCE)--1.6%
Interamericas Communications Corp. 14%,
10/27/07................................. NR 1,030 1,163,900
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix-Duff & Phelps Institutional Managed Bond Portfolio
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)--CONTINUED
Nextlink Communications, Inc. 10.75%,
11/15/08................................. B $ 560 $ 554,400
------------
1,718,300
------------
TEXTILES (HOME FURNISHINGS)--0.6%
Westpoint Stevens, Inc. 7.875%,
6/15/05.................................. B 735 617,400
WASTE MANAGEMENT--0.5%
Browning-Ferris Industries 7.40%,
9/15/35.................................. Ba 770 546,700
- --------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $12,281,837) 12,239,926
- --------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--26.4%
CS First Boston Mortgage Securities Corp.
97-SPCE C 7.077%, 2/20/07................ A+(c) 1,450 1,400,609
CS First Boston Mortgage Securities Corp.
98-C2, A1 5.96%, 12/15/07................ Aaa 623 594,551
CS First Boston Mortgage Securities Corp.
99-C1, A2 7.29%, 9/15/09................. Aaa 1,115 1,098,972
Chase Mortgage Finance Corp. 00-S1, A7
7.25%, 2/25/30........................... Aaa 1,550 1,468,141
Commercial Mortgage Asset Trust 99-C1 D
7.35%, 10/17/13.......................... Baa 2,400 2,140,500
Countrywide Home Loans 99-11, A16 7.25%,
11/15/29................................. AAA(c) 1,905 1,839,516
Criimi Mae Trust I 96-C1, A2 7.56%,
6/30/33.................................. BBB(c) 1,475 1,395,719
DLJ Commercial Mortgage Corp. 99-CG1, A1B
6.46%, 1/10/09........................... Aaa 1,250 1,160,351
G.E. Capital Mortgage Services, Inc.
96-8, 2A5 7.50%, 5/25/26................. AAA(c) 262 256,661
General Growth Properties 97-1, C2
6.806%, 11/15/07......................... A 1,700 1,589,500
LB Commercial Conduit Mortgage Trust
99-C2, A2 7.325%, 9/15/09................ Aaa 1,670 1,646,776
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
Nationslink Funding Corp. 99-2, A2C
7.229%, 10/20/08......................... AAA(c) $ 1,000 $ 981,250
Norwest Asset Securities Corp. 99-5, B2
6.25%, 3/25/14........................... A(c) 1,700 1,583,927
Norwest Asset Securities Corp. 99-10, B2
6.25%, 4/25/14........................... A(c) 1,138 1,059,493
Residential Accredit Loans, Inc. 96-QS4,
AI10 7.90%, 8/25/26...................... AAA(c) 900 890,437
Residential Accredit Loans, Inc. 99-QS14,
A5 7.75%, 11/25/29....................... AAA(c) 2,622 2,593,732
Residential Funding Mortgage Securities I
93-S25, M3 6.50%, 7/25/08................ BBB+(c) 503 482,723
Residential Funding Mortgage Securities I
96-S20, A7 7.75%, 9/25/26................ AAA(c) 316 313,760
Residential Funding Mortgage Securities I
98-S2, A4 7%, 1/25/28.................... AAA(c) 380 358,436
Ryland Mortgage Securities Corp. III
92-A, 1A 8.257%, 3/29/30................. A-(c) 331 329,369
Structured Asset Securities Corp. 98-C3A,
H 7.201%, 4/25/03........................ Baa(d) 1,525 1,491,326
Structured Asset Securities Corp. 95-C1,
D 7.375%, 9/25/24........................ A+(c) 1,865 1,858,771
Structured Asset Securities Corp. 95-C4,
D 7%, 6/25/26............................ AA(c) 448 445,709
Vanderbilt Mortgage Finance 99-C, 1A3
7.385%, 1/7/20........................... Aaa 850 835,922
- --------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $28,283,997) 27,816,151
- --------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--10.0%
BULGARIA--1.6%
Republic of Bulgaria FLIRB Bearer Series
A 2.75%, 7/28/12(d)...................... B 2,250 1,657,968
CROATIA--1.5%
Croatia Series B 7.0625%, 7/31/06(d)..... Baa 609 575,462
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix-Duff & Phelps Institutional Managed Bond Portfolio
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
CROATIA--CONTINUED
Croatia Series A 7.0625%, 7/31/10(d)..... Baa $ 1,045 $ 956,383
------------
1,531,845
------------
MEXICO--3.8%
United Mexican States 11.375%, 9/15/16... Baa 1,295 1,484,070
United Mexican States 11.50%, 5/15/26.... Baa 2,115 2,551,219
------------
4,035,289
------------
PANAMA--0.6%
Republic of Panama 9.375%, 4/1/29........ Ba 620 597,060
PHILIPPINES--1.6%
Republic of Philippines 9.875%,
1/15/19.................................. Ba 2,080 1,705,600
POLAND--0.9%
Poland Bearer PDI 6%, 10/27/14(d)........ Baa 1,080 963,900
- --------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $10,508,573) 10,491,662
- --------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--9.2%
BERMUDA--0.5%
Global Crossing Holding Ltd. 9.125%
11/15/06................................. Ba 505 486,062
CHILE--1.4%
Compania Sud Americana de Vapores 144A
7.375%, 12/8/03(b)....................... BBB(c) 175 169,340
Empresa Nacional de Electricidad SA
8.50%, 4/1/09............................ Baa 175 170,801
Petropower I Funding Trust 144A 7.36%,
2/15/14(b)............................... BBB(c) 1,308 1,143,376
------------
1,483,517
------------
LUXEMBOURG--0.5%
PTC International Finance II SA 11.25%,
12/1/09.................................. B 540 549,450
MEXICO--2.7%
Banco Nacional de Mexico SA US$
Remittance Master Trust 144A 7.57%,
12/31/00(b).............................. A-(c) 461 459,248
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------- ------------
<S> <C> <C> <C>
MEXICO--CONTINUED
Grupo Industrial Durango 12.625%,
8/1/03................................... B $ 520 $ 522,600
Grupo Iusacell SA de CV 14.25%, 12/1/06.. B 965 1,010,838
Pemex Finance Ltd. 9.69%, 8/15/09........ Baa 770 824,786
------------
2,817,472
------------
NETHERLANDS--2.1%
Deutsche Telekom International Finance BV
W.I. 8%, 6/15/10......................... Aa 1,700 1,713,746
United Pan-Europe Communications NV
10.875, 11/1/07.......................... B 540 488,700
------------
2,202,446
------------
POLAND--0.5%
TPSA Finance BV 144A 7.75%, 12/10/08(b).. Baa 610 573,400
VENEZUELA--1.5%
PDVSA Finance Ltd. Tranche H 9.375%,
11/15/07................................. Baa 140 136,878
PDVSA Finance Ltd. Series 1998-IC 6.80%,
11/15/08................................. Baa 1,350 1,120,095
PDVSA Finance Ltd. Tranche I 9.75%,
2/15/10.................................. Baa 355 347,389
------------
1,604,362
------------
- --------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $9,984,767) 9,716,709
- --------------------------------------------------------------------------
<CAPTION>
SHARES
-------
PREFERRED STOCKS--0.7%
<S> <C> <C> <C>
AGENCY NON MORTGAGE-BACKED SECURITIES--0.7%
Home Ownership Funding 2, Step-down Pfd.
144A 13.338%(b)(d)....................... 900 700,254
- --------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $720,161) 700,254
- --------------------------------------------------------------------------
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix-Duff & Phelps Institutional Managed Bond Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C> <C>
COMMON STOCKS--0.3%
PAPER & FOREST PRODUCTS--0.0%
Northampton Pulp LLC(g).................. 1,955 $ 26,881
TELECOMMUNICATIONS (LONG DISTANCE)--0.3%
FirstCom Corp.(f)........................ 17,625 265,477
- --------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $261,917) 292,358
- --------------------------------------------------------------------
MUTUAL FUNDS--4.9%
Dreyfus Municipal Income Fund, Inc....... 37,800 285,862
Dreyfus Strategic Municipal Fund, Inc.... 71,800 574,400
Munienhanced Fund, Inc................... 8,600 83,044
Munivest Fund II, Inc.................... 46,700 535,591
Muniyield Fund, Inc...................... 43,000 532,125
Muniyield Insured Fund, Inc.............. 54,800 681,575
Muniyield New York Insured Fund, Inc..... 30,412 345,936
Nuveen Insured Municipal Opportunity
Fund, Inc................................ 60,000 780,000
Nuveen Municipal Value Fund, Inc......... 95,000 801,563
Nuveen Performance Plus Municipal Fund,
Inc...................................... 44,000 530,750
- --------------------------------------------------------------------
TOTAL MUTUAL FUNDS
(IDENTIFIED COST $4,946,533) 5,150,846
- --------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--99.3%
(IDENTIFIED COST $106,160,429) 104,529,754
- --------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- ------- ------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--0.5%
COMMERCIAL PAPER--0.5%
Koch Industries, Inc. 6.89%, 7/3/00..... A-1+ $ 550 $ 549,789
- --------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $549,789) 549,789
- --------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS--99.8%
(IDENTIFIED COST $106,710,218) 105,079,543(a)
Cash and receivables, less liabilities--0.2% 257,755
------------
NET ASSETS--100.0% $105,337,298
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $1,231,514 and gross
depreciation of $3,022,785 for federal income tax purposes. At June 30,
2000, the aggregate cost of securities for federal income tax purposes was
$106,870,814.
(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, 2000,
these securities amounted to a value of $5,839,819 or 5.5% 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) All or a portion segregated as collateral.
(f) Non-income producing.
(g) Security valued at fair value as determined in good faith by or under the
direction of the Trustees.
See Notes to Financial Statements 11
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $106,710,218) $ 105,079,543
Receivables
Investment securities sold 10,138,704
Interest and dividends 1,273,415
Fund shares sold 6,638
Other receivables 169
Prepaid expenses 1,193
--------------
Total assets 116,499,662
--------------
LIABILITIES
Payables
Custodian 32,450
Investment securities purchased 11,030,560
Investment advisory fee 18,562
Financial agent fee 11,283
Transfer agent fee 10,552
Distribution fee 1,262
Accrued expenses 57,695
--------------
Total liabilities 11,162,364
--------------
NET ASSETS $ 105,337,298
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 116,311,259
Undistributed net investment income 52,168
Accumulated net realized loss (9,395,454)
Net unrealized depreciation (1,630,675)
--------------
NET ASSETS $ 105,337,298
==============
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $99,211,772) 3,355,223
Net asset value and offering price per share $29.57
CLASS Y
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $6,125,526) 207,109
Net asset value and offering price per share $29.58
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 4,104,252
Dividends 177,393
--------------
Total investment income 4,281,645
--------------
EXPENSES
Investment advisory fee 238,159
Distribution fee, Class Y 8,061
Financial agent fee 65,033
Professional 22,126
Transfer agent 20,717
Registration 15,976
Custodian 11,577
Trustees 9,972
Printing 5,493
Miscellaneous 18,499
--------------
Total expenses 415,613
Less expenses borne by investment adviser (116,468)
--------------
Net expenses 299,145
--------------
NET INVESTMENT INCOME 3,982,500
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (1,960,643)
Net change in unrealized appreciation (depreciation) on
investments 835,520
--------------
NET LOSS ON INVESTMENTS (1,125,123)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,857,377
==============
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
6/30/00 Year Ended
(Unaudited) 12/31/99
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 3,982,500 $ 6,975,938
Net realized gain (loss) (1,960,643) (5,051,850)
Net change in unrealized appreciation
(depreciation) 835,520 (400,998)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,857,377 1,523,090
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (3,650,609) (6,552,804)
Net investment income, Class Y (219,544) (423,134)
In excess of net investment income,
Class X -- (89,248)
In excess of net investment income,
Class Y -- (5,763)
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (3,870,153) (7,070,949)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (67,549
and 643,317 shares, respectively) 2,032,926 19,772,610
Net asset value of shares issued from
reinvestment of distributions
(96,739 and 180,452 shares,
respectively) 2,845,536 5,414,358
Cost of shares repurchased (157,039
and 1,075,587 shares, respectively) (4,756,401) (33,215,963)
------------ ------------
Total 122,061 (8,028,995)
------------ ------------
CLASS Y
Proceeds from sales of shares (18,178
and 41,659 shares, respectively) 548,523 1,278,403
Net asset value of shares issued from
reinvestment of distributions
(7,465 and 14,291 shares,
respectively) 219,542 428,895
Cost of shares repurchased (48,872 and
63,654 shares, respectively) (1,467,622) (1,967,205)
------------ ------------
Total (699,557) (259,907)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (577,496) (8,288,902)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (1,590,272) (13,836,761)
------------ ------------
NET ASSETS
Beginning of period 106,927,570 120,764,331
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$52,168 AND DISTRIBUTION IN EXCESS
OF NET INVESTMENT INCOME OF
($60,179), RESPECTIVELY] $105,337,298 $106,927,570
============ ============
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix Duff & Phelps Institutional Managed Bond Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS X
-------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED DECEMBER 31, INCEPTION
6/30/00 ----------------------------------------- 3/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 29.88 $ 31.47 $ 33.17 $ 33.98 $ 33.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 1.13(5) 2.01 2.26(5) 2.37(5) 2.03(5)
Net realized and unrealized gain
(loss) (0.32) (1.57) (1.58) 0.85 0.69
------- -------- -------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 0.81 0.44 0.68 3.22 2.72
------- -------- -------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment
income (1.12) (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 (1.12) (2.03) (2.38) (4.03) (2.58)
------- -------- -------- ------- -------
Change in net asset value (0.31) (1.59) (1.70) (0.81) 0.14
------- -------- -------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 29.57 $ 29.88 $ 31.47 $ 33.17 $ 33.98
======= ======== ======== ======= =======
Total return 2.73%(2) 1.47% 1.99% 9.75% 8.24%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $99,212 $100,044 $113,273 $72,747 $71,482
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 0.55%(1) 0.55% 0.55% 0.55% 0.55%(1)
Net investment income 7.52%(1) 6.54% 6.89% 6.92% 7.15%(1)
Portfolio turnover 38%(2) 142% 105% 176% 199%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS Y
------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED DECEMBER 31, INCEPTION
6/30/00 ---------------------------------------- 3/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 29.89 $ 31.47 $ 33.18 $ 33.97 $ 33.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 1.09(5) 1.96 2.18(5) 2.27(5) 1.98(5)
Net realized and unrealized gain
(loss) (0.32) (1.59) (1.59) 0.88 0.66
------- -------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 0.77 0.37 0.59 3.15 2.64
------- -------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment
income (1.08) (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 (1.08) (1.95) (2.30) (3.94) (2.51)
------- -------- ------- ------- -------
Change in net asset value (0.31) (1.58) (1.71) (0.79) 0.13
------- -------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 29.58 $ 29.89 $ 31.47 $ 33.18 $ 33.97
======= ======== ======= ======= =======
Total return 2.60%(2) 1.26% 1.72% 9.52% 7.98%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $6,125 $6,884 $7,491 $6,725 $7,010
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.80%(1) 0.80% 0.80% 0.80% 0.80%(1)
Net investment income 7.27%(1) 6.29% 6.63% 6.65% 6.91%(1)
Portfolio turnover 38%(2) 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 0.77%,
0.74%, 0.77%, 0.77%, and 0.85% for the periods ended June 30, 2000,
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 1.02%,
0.99%, 1.02%, 1.02%, and 1.10% for the periods ended June 30, 2000,
December 31, 1999, 1998, 1997, and 1996, respectively.
(5) Computed using average shares outstanding.
14 See Notes to Financial Statements
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 (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 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
15
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 (UNAUDITED) (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 six months
ended June 30,
16
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 (UNAUDITED) (CONTINUED)
2000, $587 was retained by the Distributor, $1,023 was paid out to unaffiliated
participants, and $33,237 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 six months ended June 30, 2000, transfer
agent fees were $40,417 of which PEPCO retained $28 which is net of fees paid to
State Street.
At June 30, 2000, 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 $ 246
Growth Stock Portfolio-Class Y.......... 6,960 243,322
Managed Bond Portfolio-Class X.......... 4 118
Managed Bond Portfolio-Class Y.......... 4,225 124,933
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the six months ended June 30, 2000
(excluding U.S. Government and agency securities and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
-------------- --------------
<S> <C> <C>
Growth Stock Portfolio.................. $35,799,388 $34,862,709
Managed Bond Portfolio.................. 33,599,693 34,684,632
</TABLE>
Purchases and sales of U.S. Government and agency securities during the six
months ended June 30, 2000, aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
-------------- --------------
<S> <C> <C>
Managed Bond Portfolio.................. $5,677,932 $6,167,728
</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 June 30, 2000, 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 45.8%
</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.
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.
17
<PAGE>
PHOENIX DUFF & PHELPS INSTITUTIONAL GROWTH STOCK PORTFOLIO
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
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>
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
PART C -- OTHER INFORMATION
ITEM 23. EXHIBITS
a.* Agreement and Declaration of Trust of the Registrant, dated
August 17, 2000, filed via Edgar herewith.
b.* Bylaws of the Registrant filed via Edgar herewith.
c. Reference is made to Registrant's Agreement and Declaration of
Trust. See Exhibit a.
d.1. Investment Advisory Agreement between Registrant and Duff &
Phelps Investment Management Co. ("DPIM") adding Enhanced
Reserves Portfolio, filed via Edgar as Exhibit (5)(a) with
Pre-Effective Amendment No. 1 on February 2, 1996 and
incorporated herein by reference.
d.2. Investment Advisory Agreement between Registrant and Phoenix
Investment Counsel, Inc. ("PIC"), filed via Edgar as
Exhibit (5)(b) with Pre-Effective Amendment No. 1 on
February 2, 1996 and incorporated herein by reference.
e.1. Underwriting Agreement between Registrant and Phoenix Equity
Planning Corporation, filed via Edgar as Exhibit (6)(a) with
Post-Effective Amendment No. 9 on April 28, 1998 and
incorporated herein by reference.
e.2. Form of Sales Agreement between Phoenix Equity Planning
Corporation and dealers, filed via Edgar as Exhibit (6)(b)
with Post-Effective Amendment No. 1 on March 1, 1996 and
incorporated herein by reference.
f. None
g.1. Custodian Agreement between Registrant and State Street Bank
and Trust Company, filed via Edgar as Exhibit (8)(a) with
Post-Effective Amendment No. 6 on September 30, 1997 and
incorporated herein by reference.
g.2. Custodian Agreement between Registrant and The Chase Manhattan
Bank, N.A., filed via Edgar as Exhibit (8)(b) with
Pre-Effective Amendment No. 2 on February 28, 1996 and
incorporated herein by reference.
h.1. Financial Agent Agreement between Registrant and Phoenix
Equity Planning Corporation dated December 11, 1996, filed via
Edgar as Exhibit (9)(a) with Post-Effective Amendment No. 5 on
April 28, 1997 and incorporated herein by reference.
h.2. Transfer Agent Agreement between Registrant and Phoenix Equity
Planning Corporation, filed via Edgar as Exhibit (9)(b) with
Pre-Effective Amendment No. 2 on February 28, 1996 and
incorporated herein by reference.
h.3. First Amendment to Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation effective
February 27, 1998, filed via Edgar as Exhibit (9)(d) with
Post-Effective Amendment No. 9 on April 28, 1998 and
incorporated herein by reference.
i.* Opinion of Counsel, filed via Edgar herewith.
j.* Consent of Independent Accountants filed via Edgar herewith.
k. None
l. Initial Capitalization Agreement, filed via Edgar as
Exhibit (13) with Pre-Effective Amendment No. 1 on
February 2, 1996 and incorporated herein by reference.
m.1. Amended and Restated Rule 12b-1 Distribution Plan for Class Y
Shares, filed via Edgar as Exhibit (15) with Post-Effective
Amendment No. 6 on September 30, 1997 and incorporated herein
by reference.
n. Financial Data Schedules.
o. Amended and Restated Rule 18f-3 Dual Distribution Plan filed
via Edgar as Exhibit (18) with Post-Effective Amendment No. 5
on April 28, 1997 and incorporated herein by reference.
p. Codes of Ethics of the Fund, Adviser, Subadviser and
Distributor filed via Edgar with Post-Effective Amendment No.
13 on August 9, 2000 and incorporated herein by reference.
q.1. Power of Attorney for Mr. Roth filed via Edgar as Exhibit p
with Post-Effective Amendment No. 10 on February 26, 1999 and
incorporated herein by reference.
q.2. Powers of Attorney for each of the other Trustees filed via
Edgar with Post-Effective Amendment No. 13 on August 9, 2000
and incorporated herein by reference.
--------
*filed herewith
C-1
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
As of the date hereof, to the best knowledge of the Registrant, no person
is directly or indirectly controlled by or under common control with the Fund.
ITEM 25. INDEMNIFICATION.
The Agreement and Declaration of Trust dated August 17, 2000 and the
By-Laws of the Registrant provide that no trustee or officer will be indemnified
against any liability to which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties. The Management Agreement, Underwriting
Agreement, Custody Agreement and Transfer Agency Agreement each provides that
the Trust will indemnify the other party (or parties, as the case may be) to the
agreement for certain losses.
Insofar as indemnification for liability arising under the Securities Act
of 1933, as amended (the "Act"), may be available to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See "Management of the Portfolio" in the Prospectus and "Services of the
Adviser" in the Statement of Additional Information for information regarding
the business of the Advisers. For information as to the business, profession,
vocation or employment of a substantial nature of directors and officers of the
Advisers, reference is made to the Advisers' current Form ADV (SEC File Nos.
801-5995 (PIC) and 801-14813 (DPIM)) filed under the Investment Advisers Act of
1940, incorporated herein by reference.
ITEM 27. PRINCIPAL UNDERWRITER.
(a) Equity Planning also serves as the principal underwriter for the following
other registrants:
Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities
Fund, Phoenix-Engemann Funds, Phoenix Equity Series Fund, Phoenix-Euclid
Funds, Phoenix-Goodwin California Tax Exempt Bond Fund, Phoenix Investment
Trust 97, Phoenix Multi-Portfolio Fund, Phoenix Multi-Series Trust,
Phoenix-Oakhurst Income & Growth Fund, Phoenix-Oakhurst Strategic
Allocation Fund, Phoenix-Seneca Funds, Phoenix Series Fund, Phoenix
Strategic Equity Series Fund, Phoenix-Zwieg Trust, Phoenix Home Life
Variable Universal Life Account, Phoenix Home Life Variable Accumulation
Account, PHL Variable Accumulation Account, Phoenix Life and Annuity
Variable Universal Life Account and PHL Variable Separate Account MVAI.
C-2
<PAGE>
(b) The directors and executive officers of Phoenix Equity Planning
Corporation, the distributor for Registrant, are as follows:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
BUSINESS ADDRESS WITH DISTRIBUTOR REGISTRANT
------------ ------------- -----------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and Chairman Trustee and President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Executive Vice Vice President
56 Prospect Street President, Chief Financial
P.O. Box 150480 Officer and Treasurer
Hartford, CT 06115-0480
John F. Sharry President, None
56 Prospect Street Retail Division
P.O. Box 150480
Hartford, CT 06115-0480
Barry Mandinach Executive Vice President, None
900 Third Avenue Chief Marketing Officer,
New York, NY 10022 Retail Division
Robert Tousingnant Executive Vice President, None
56 Prospect Street Chief Sales Officer,
P.O. Box 150480 Retail Division
Hartford, CT 06115-0480
G. Jeffrey Bohne Senior Vice President, Mutual Fund Secretary
101 Munson Street Customer Service
P.O. Box 810
Greenfield, MA 01302-0810
Nancy G. Curtiss Vice President and Treasurer, Treasurer
56 Prospect Street Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
Robert S. Driessen Vice President, Compliance Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Jacqueline M. Porter Assistant Vice President, Assistant Treasurer
56 Prospect St. Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation were received by any principal underwriter who is not an
affiliated person of the Registrant or an affiliated person of such
affiliated person, directly or indirectly, from the Registrant during the
Registrant's last fiscal year.
C-3
<PAGE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
thereunder will be maintained at the offices of the Registrant located at 101
Munson Street, P.O. Box 810, Greenfield, MA 01302-0810, or its investment
adviser, Phoenix Investment Counsel, Inc., 56 Prospect Street, Hartford, CT
06115, or the custodian, The Chase Manhattan Bank, N.A., 1 Chase Manhattan
Plaza, Floor 3B, New York, NY 10081. All such accounts, books and other
documents required to be maintained by the principal underwriter will be
maintained at Phoenix Equity Planning Corporation, 100 Bright Meadow Boulevard,
Enfield, Connecticut 06083.
ITEM 29. MANAGEMENT SERVICES.
None.
ITEM 30. UNDERTAKINGS.
Not applicable.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Fund certifies that it meets all of the requirements for
effectiveness of this registration statement under rule 485(b) under the
Securities Act and has duly caused this amendment to the registration statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Hartford, and State of Connecticut on the 30th day of October, 2000.
PHOENIX DUFF & PHELPS
INSTITUTIONAL MUTUAL FUNDS
ATTEST: /S/ PAMELA S. SINOFSKY BY: /S/ PHILIP R. MCLOUGHLIN
---------------------- ----------------------
PAMELA S. SINOFSKY PHILIP R. MCLOUGHLIN,
ASSISTANT SECRETARY PRESIDENT
Pursuant to the requirements of the Securities Act, this amendment to the
registration statement has been signed below by the following persons in the
capacities indicated, on this 30th day of October, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Trustee
----------------------------------------------------
Robert Chesek*
Trustee
----------------------------------------------------
E. Virgil Conway*
Trustee
----------------------------------------------------
William W. Crawford*
/s/ Nancy G. Curtiss Treasurer (principal financial
---------------------------------------------------- and accounting officer)
Nancy G. Curtiss
Trustee
----------------------------------------------------
Harry Dalzell-Payne*
Trustee
----------------------------------------------------
William N. Georgeson*
Trustee
----------------------------------------------------
Francis E. Jeffries*
Trustee
----------------------------------------------------
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin Trustee and President
----------------------------------------------------
Philip R. McLoughlin
Trustee
----------------------------------------------------
Eileen A. Moran*
Trustee
----------------------------------------------------
Everett L. Morris*
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Trustee
----------------------------------------------------
James M. Oates*
Trustee
----------------------------------------------------
Richard A. Pavia*
Trustee
----------------------------------------------------
Herbert Roth, Jr.*
Trustee
----------------------------------------------------
Richard E. Segerson*
Trustee
----------------------------------------------------
Lowell P. Weicker, Jr.*
</TABLE>
*By /s/ Philip R. McLoughlin
------------------------
*Philip R. McLoughlin, Attorney-in-fact pursuant to powers of attorney.
S-2
