<PAGE>
Phoenix Investment Partners
ANNUAL REPORT
SEPTEMBER 30, 2000
SENECA
Phoenix-Seneca
Bond Fund
Phoenix-Seneca
Mid-Cap "EDGE"-SM-
Fund
Phoenix-Seneca
Real Estate
Securities Fund
PHOENIX
INVESTMENT PARTNERS
<PAGE>
MESSAGE FROM THE CHIEF INVESTMENT OFFICER
DEAR SHAREHOLDER:
[PHOTO]
After initial jubilation over the Federal Reserve's decision to pause in its
campaign of raising interest rates, the stock market fell victim to the "triple
Es:" earnings worries, euro weakness and the energy price shock. A stunningly
strong August led to a woefully weak September. By the end of your Funds' fiscal
year, most of the broad stock indices were in negative territory for the year.
Bonds outpaced stocks, and real estate outperformed both.
A difficult third quarter is familiar to seasoned investors. For the last
20 years, the third quarter has been relatively weak. This year, the seasonal
weakness was accompanied by serious fundamental concerns. The 50% rise in oil
prices, earnings warnings from many prominent companies and the dramatic
downdraft in the euro made for volatile trading sessions. The sour market mood
may suggest that a severe economic and profit downturn is imminent.
We read the fundamentals more optimistically. An economic slowdown is under
way, but we believe it is a pause in a long and durable business and profit
expansion, not a prelude to a deep recession. The economy and the markets are
resilient. They have already absorbed and survived some difficult hits. Going
forward, we see improvement. The release of Strategic Petroleum Reserve supplies
and increased Saudi production mean that the bulk of the oil price rise is
probably behind us. The recent strident central bank intervention laid a floor
for the euro, again suggesting that the worst is behind us on the currency
front. And while earnings warnings have been numerous, overall profit growth
remains solid. Near-term profit expectations have declined, but they are above
historical averages, largely on the basis of the strong and durable productivity
gains achieved by U.S. business. Continued profit growth coupled with ongoing
productivity benefits such as low inflation should translate into higher stock
prices this year and next, in our opinion.
The extraordinary string of 20%+ annual returns in the broad averages,
however, is over, in our view. More moderate and more normal market returns
should be expected. Because the economic landscape is rockier, company risks are
greater. In this environment, stock selection is critically important to return.
A focus on high quality business models, high quality management teams and
profitability is essential. Careful, fundamental research-based stock selection,
combined with risk-aware portfolio management, will help to produce
outperformance. This is the discipline we have always practiced at Seneca.
(CONTINUED ON PAGE 2)
------------------------------------------------------
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
------------------------------------------------------
1
<PAGE>
MESSAGE FROM THE CHIEF INVESTMENT OFFICER (CONTINUED)
Bond investing has been as challenging as stock investing thus far this year.
Bond prices have been buffeted by the crosscurrents of aggressive Fed
tightening, rising energy prices, the newfound budget surplus and the Treasury
buyback program. Treasuries have performed well, but other bond market sectors
have lagged. As a result, yields available on corporate and mortgage-backed
bonds are historically high. High-yield securities are particularly cheap. All
these non-Treasury sectors offer investors a rare opportunity to secure a
long-term income stream at a rate well above that available on Treasury debt.
Price performance this year in such securities has been relatively weak, but
over time, the ability to compound above-market income returns should produce
outperformance. This is Seneca's strategy, but, of course, past performance is
not a guarantee of future results.
On the following pages, your Funds' portfolio management teams review market
events of the past fiscal year and share their outlook for the near term. We
hope you find their comments informative. If you have any questions, please call
your financial advisor or contact us at 1-800-243-1574 or
www.phoenixinvestments.com.
Sincerely,
/s/ Gail P. Seneca
Gail P. Seneca
Founder & Chief Investment Officer
Seneca Capital Management LLC
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Phoenix-Seneca Bond Fund.................................................. 4
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund.................................... 16
Phoenix-Seneca Real Estate Securities Fund................................ 25
Notes to Financial Statements............................................. 33
</TABLE>
3
<PAGE>
PHOENIX-SENECA BOND FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM LEADER, CHARLES B. DICKE,
CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund seeks high total return from both current income and capital
appreciation.
Q: HOW DID THE FUND PERFORM OVER THE LAST 12 MONTHS?
A: The Fund had strong relative results for the fiscal year ended September 30,
2000. Class A shares rose 5.84%. Class B shares earned 5.06%, Class C shares
returned 5.12%, and Class X shares were up 6.17% for the 12 months. The Lehman
Aggregate Bond Index(1) returned 6.99% for the same period. All performance
figures assume reinvestment of distributions and exclude the effect of sales
charges.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET OVER THE LAST YEAR?
A: During the first three months of the Fund's fiscal year, bond yields rose
significantly.(2) Investors became concerned that a strengthening global economy
would cause inflation to accelerate and that central banks in Europe and the
U.S. Federal Reserve would raise rates to keep inflation in check. The best
performing sector for the quarter was high-yield corporate bonds, and the worst
performing sector was U.S. Treasuries.
Economic fundamentals were difficult for bond investors as we entered 2000.
Consumer spending continued at a rapid pace, and inflation crept higher.
Non-Treasury bonds fared poorly. But, long-term Treasury rates fell, producing
price gains for Treasury bond investors.
After raising rates twice during the first quarter of the year, the Fed once
again increased rates in mid-May as the economy continued to expand in the
second quarter. By June, there were indications that the Fed's tightening had
finally begun to exert pressure on the economy. There was a drop in construction
contracts and new-home sales, an increase in unemployment claims and a slowing
in personal consumption numbers. The bond market posted its best return of the
year in June as investors celebrated the more moderate economic reports.
Corporate bonds outperformed most other spread sectors, and high-yield bonds
also recovered as spreads tightened and demand rebounded.
As we moved into the final quarter of the Fund's fiscal year, bond markets
performed strongly, the best quarterly return for bonds in nearly two years.
Year to date through September 30, bonds significantly outperformed the equity
markets. The last time the Lehman Aggregate Bond Index outperformed the S&P 500
Index(3) was in 1990. Although the economy continued to expand in the third
quarter, a slowdown became increasingly evident. Slower economic readings and
weakening stocks led to strong results for bonds. Investors appeared
increasingly concerned that the economic slowdown could spiral into recession
due to the oil price spike and weakness of the euro.
(1) THE LEHMAN AGGREGATE BOND INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF
BROAD BOND MARKET TOTAL-RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR
DIRECT INVESTMENT.
(2) RISING RATES GENERALLY MEAN DECLINING PRICES FOR BONDS.
(3) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF BROAD STOCK
MARKET TOTAL-RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT
INVESTMENT.
4
<PAGE>
PHOENIX-SENECA BOND FUND (CONTINUED)
This fear of recession pushed interest rates lower and bond prices higher.
However, not all bonds benefited equally from the decline in rates. Those bond
market sectors with a corporate credit component performed relatively poorly,
and as a result, our performance suffered as well.
Q: WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A: If a soft landing in the economy develops, as is our expectation, the current
weakness in corporate bond pricing should reverse. The very wide yield spreads
for corporate bonds, both investment-grade and high-yield issues, that were in
evidence at the end of September would suggest imminent economic recession.
Unless a recession does, in fact, develop, we would expect those yield spreads
to contract. Until they do, we believe corporate bond investors are being paid
handsomely in current yield to wait.
OCTOBER 20, 2000
5
<PAGE>
Phoenix-Seneca Bond Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 9/30/00
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 9/30/00 DATE
------ ----------- -----------
<S> <C> <C> <C>
Class X Shares at NAV(2) 6.17% 7.53% 3/7/96
Class A Shares at NAV(2) 5.84 3.91 7/1/98
Class A Shares at POP(3) 0.81 1.69 7/1/98
Class B Shares at NAV(2) 5.06 3.10 7/1/98
Class B Shares with CDSC(4) 1.14 1.90 7/1/98
Class C Shares at NAV(2) 5.12 3.12 7/1/98
Class C Shares with CDSC(4) 5.12 3.12 7/1/98
Lehman Aggregate Bond Index(7) 6.99 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 6.32% for Class X (since 3/7/96) and 4.76% for
Class A, Class B and Class C (since 7/1/98).
(6) This chart illustrates NAV returns on Class X shares. Returns on Class A,
Class B and Class C shares will vary due to differing sales charges.
(7) The Lehman Aggregate Bond Index is an unmanaged, commonly used measure of
bond market total return performance. The index's performance does not
reflect sales charges.
All returns represent past performance which may not be indicative of
future performance.The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 9/30
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-SENECA BOND FUND LEHMAN AGGREGATE BOND INDEX(7)
CLASS X(6)
<S> <C> <C>
3/96 $10,000 $10,000
96 $10,413 $10,146
97 $11,586 $11,132
98 $12,679 $12,413
99 $13,124 $12,367
00 $13,934 $13,232
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
3/7/96 (inception of the Fund) in Class X shares and reflects no sales charge.
Performance assumes dividends and capital gains are reinvested. The performance
of other share classes will be greater or less than that shown based on
differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 9/30/00
As a percentage of long-term investments
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Corporate 61%
Agency Mortgage-Backed 12
Foreign Corporate 7
Non-Agency Mortgage-Backed 7
U.S. Government 5
Asset-Backed 3
Preferred Stocks 3
Other 2
</TABLE>
6
<PAGE>
Phoenix-Seneca Bond Fund
TEN LARGEST HOLDINGS AT SEPTEMBER 30, 2000 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. U.S. Government Securities 4.3%
U.S. TREASURY BONDS & NOTES
2. Sprint Spectrum L.P. 2.9%
CORPORATE BOND
3. Fannie Mae 7%, 1/1/30 2.8%
AGENCY MORTGAGE-BACKED SECURITY
4. Fox/Liberty Networks LLC 0%, 8/15/07 2.6%
CORPORATE BOND
5. Mark IV Industries, Inc. 2.4%
CORPORATE BOND
6. GMAC Commercial Mortgage Securities, Inc. 2.1%
NON-AGENCY MORTGAGE-BACKED SECURITY
7. Fannie Mae 7.50%, 3/1/30 2.1%
AGENCY MORTGAGE-BACKED SECURITY
8. Broadwing Communications, Inc. 2.0%
CORPORATE BOND
9. Freddie Mac 6%, 10/15/27 2.0%
AGENCY MORTGAGE-BACKED SECURITY
10. Seagate Technology, Inc. 7.45%, 3/1/37 1.9%
CORPORATE BOND
</TABLE>
INVESTMENTS AT SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--4.3%
U.S. TREASURY BONDS--2.4%
U.S. Treasury Bonds 8.875%, 2/15/19...... Aaa $ 750 $ 974,765
U.S. Treasury Bonds 5.25%, 2/15/29....... Aaa 300 269,437
-----------
1,244,202
-----------
U.S. TREASURY NOTES--1.9%
U.S. Treasury Inflationary Notes 3.625%,
1/15/08.................................. Aaa 525 547,857
U.S. Treasury Notes 6.50%, 2/15/10....... Aaa 450 468,563
-----------
1,016,420
-----------
-----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $2,263,601) 2,260,622
-----------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED
SECURITIES--13.4%
Fannie Mae 6.50%, 12/1/28................ Aaa 361 347,023
Fannie Mae 6.50%, 7/1/29................. Aaa 492 472,348
Fannie Mae 6.50%, 8/1/29................. Aaa 913 876,552
Fannie Mae 7%, 1/1/30.................... Aaa 1,469 1,440,029
Fannie Mae 7.50%, 3/1/30................. Aaa 1,079 1,077,325
Fannie Mae Strip I.O. 1.875%,
10/25/23(c).............................. Aaa 128 2,086
Fannie Mae TBA 7.50%, 10/15/30........... Aaa 1,000 997,813
Freddie Mac 8.75%, 12/15/20.............. Aaa 1 1,005
Freddie Mac 7%, 7/15/23.................. Aaa 825 748,117
Freddie Mac 6%, 10/15/27................. Aaa 1,125 1,049,558
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
GNMA 7%, 2/15/26......................... Aaa $ 16 $ 15,331
-----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $7,061,252) 7,027,187
-----------------------------------------------------------------------------
ASSET-BACKED SECURITIES--2.8%
Olympic Automobile Receivables Trust
96-B, CTFS 6.90%, 2/15/04................ Aaa 38 37,552
Olympic Automobile Receivables Trust
96-C, A5 7%, 3/15/04..................... Aaa 400 400,272
Olympic Automobile Receivables Trust
96-D, A5 6.25%, 11/15/04................. Aaa 1,000 997,375
-----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $1,442,168) 1,435,199
-----------------------------------------------------------------------------
CORPORATE BONDS--56.7%
AIR FREIGHT--0.9%
Federal Express Corp. Class A Series
98-1A 6.72%, 1/15/22..................... Aa 488 453,921
AIRLINES--1.8%
Alaska Airlines, Inc. Series A 9.50%,
4/12/10.................................. Baa 109 108,812
Alaska Airlines, Inc. Series D 9.50%,
4/12/12.................................. Baa 438 463,498
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Seneca Bond Fund
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
AIRLINES--CONTINUED
Delta Air Lines, Inc. Series B2 10.06%,
1/2/16................................... Baa $ 65 $ 75,004
United Airlines, Inc. Series 91-B 10.11%,
2/19/06.................................. Baa 16 17,388
United Airlines, Inc. Series 91-E 9.76%,
5/27/06.................................. Baa 82 85,906
United Airlines, Inc. Series 95-A1 9.02%,
4/19/12.................................. Baa 176 181,554
-----------
932,162
-----------
BANKS (MAJOR REGIONAL)--1.7%
First Republic Bancorp 7.75%,
9/15/12(d)............................... BB+ 300 252,703
Wells Fargo Capital I 7.96%, 12/15/26.... Aa 700 652,205
-----------
904,908
-----------
BANKS (MONEY CENTER)--0.7%
BankAmerica Corp. Institutional Series A
144A 8.07%, 12/31/26(b).................. Aa 400 379,199
BROADCASTING (TELEVISION, RADIO & CABLE)--6.3%
Adelphia Communications Corp. Series B
9.50%, 2/15/04........................... B 651 622,025
Charter Communications, Inc. 0%,
1/15/10(c)............................... B 500 292,500
Clear Channel Communications, Inc. 8%,
11/1/08.................................. Ba 500 506,250
Fox/Liberty Networks LLC 0%,
8/15/07(c)............................... Ba 1,580 1,346,950
Jones Intercable, Inc. 9.625%, 3/15/02... Baa 300 308,250
Turner Broadcasting System, Inc. 8.40%,
2/1/24................................... Baa 200 196,000
-----------
3,271,975
-----------
COMMUNICATIONS EQUIPMENT--0.9%
Crown Castle International Corp. 0%,
5/15/11(c)............................... B 700 456,750
COMPUTERS (PERIPHERALS)--4.6%
Seagate Technology, Inc. 7.37%, 3/1/07... Ba 650 658,676
Seagate Technology, Inc. 7.875%,
3/1/17................................... Ba 750 725,862
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
COMPUTERS (PERIPHERALS)--CONTINUED
Seagate Technology, Inc. 7.45%, 3/1/37... Ba $ 1,050 $ 1,014,776
-----------
2,399,314
-----------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)--0.1%
Finlay Fine Jewelry Corp. 8.375%,
5/1/08................................... Ba 40 37,000
ELECTRONICS (SEMICONDUCTORS)--1.0%
ON Semiconductor Corp. 12%, 8/1/09....... B 488 514,840
ENGINEERING & CONSTRUCTION--1.8%
Mastec, Inc. Series B 7.75%, 2/1/08...... Ba 1,000 955,000
ENTERTAINMENT--1.7%
Time Warner, Inc. 9.125%, 1/15/13........ Baa 65 72,485
Time Warner, Inc. 6.85%, 1/15/26......... Baa 620 614,868
United Artists Theatre Circuit, Inc.
Series 95-A 9.30%, 7/1/15................ Caa 319 195,983
-----------
883,336
-----------
FINANCIAL (DIVERSIFIED)--2.4%
Countrywide Capital I 8%, 12/15/26....... A 200 174,775
Dollar Financial Group, Inc. Series A
10.875%, 11/15/06........................ B 75 73,125
Market Hub Partners Finance, Inc. 8.25%,
3/1/08................................... Ba 750 763,125
Pinnacle Holdings, Inc. 0%, 3/15/08(c)... B 350 253,750
-----------
1,264,775
-----------
HEALTH CARE (HOSPITAL MANAGEMENT)--2.3%
Quorum Health Group, Inc. 8.75%,
11/1/05.................................. Ba 825 820,875
Universal Health Services, Inc. 8.75%,
8/15/05.................................. Ba 400 401,154
-----------
1,222,029
-----------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.1%
Dade International, Inc. Series B
11.125%, 5/1/06.......................... B 260 68,900
INVESTMENT BANKING/BROKERAGE--2.6%
Donaldson, Lufkin & Jenrette, Inc. 6.50%,
6/1/08................................... A 200 186,313
Lehman Brothers Holdings, Inc. Series F
7%, 5/15/03.............................. A 500 499,921
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix-Seneca Bond Fund
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
INVESTMENT BANKING/BROKERAGE--CONTINUED
Lehman Brothers Holdings, Inc. 8.80%,
3/1/15................................... A $ 80 $ 84,743
Socgen Real Estate LLC Series A 144A
7.64%, 12/29/49(b)(c).................... A 650 607,222
-----------
1,378,199
-----------
LODGING-HOTELS--1.1%
Hammons (John Q.) Hotels, Inc. 8.875%,
2/15/04.................................. B 530 506,150
Hammons (John Q.) Hotels, Inc. 9.75%,
10/1/05.................................. B 100 95,500
-----------
601,650
-----------
MACHINERY (DIVERSIFIED)--1.2%
Better Minerals & Aggregates Co. 13%,
9/15/09.................................. B 650 617,500
MANUFACTURING (DIVERSIFIED)--0.0%
Hawk Corp. 10.25%, 12/1/03............... Ba 10 9,450
MANUFACTURING (SPECIALIZED)--1.1%
Advanced Glassfiber Yarns LLC 9.875%,
1/15/09.................................. B 300 276,000
BGF Industries, Inc. Series B 10.25%,
1/15/09.................................. B 300 287,250
-----------
563,250
-----------
OIL & GAS (REFINING & MARKETING)--0.6%
El Paso Tenneco RACERS 97-C-1-2 144A
9.14%, 12/31/01(b)....................... Baa 300 296,625
PAPER & FOREST PRODUCTS--0.1%
Container Corporation of America Series A
11.25%, 5/1/04........................... B 40 40,400
PUBLISHING (NEWSPAPERS)--0.6%
Garden State Newspapers, Inc. Series B
8.75%, 10/1/09........................... B 325 303,875
RAILROADS--0.4%
Railworks Corp. 11.50%, 4/15/09.......... B 600 213,000
REITS--3.3%
ERP Operating L.P. 7.57%, 8/15/26........ A 170 168,210
Evans Withycomb Residential, Inc. 7.50%,
4/15/04.................................. A 100 99,182
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
REITS--CONTINUED
First Industrial L.P. 7.15%, 5/15/27..... Baa $ 500 $ 493,968
Security Capital Pacific Trust 7.375%,
10/15/06................................. Baa 100 96,416
Security Capital Pacific Trust 6.875%,
2/15/08.................................. Baa 5 4,807
Security Capital Pacific Trust 7.90%,
2/15/16.................................. Baa 200 182,760
Sovereign Real Estate Investment Trust
12%, 8/29/49............................. Ba 500 450,000
Washington Real Estate Investment Trust
7.125%, 8/13/03.......................... Baa 110 108,508
Weingarten Realty Investors Series A
6.88%, 6/25/27........................... A 150 141,690
-----------
1,745,541
-----------
RESTAURANTS--0.5%
Jack in the Box, Inc. Series B 9.75%,
11/1/03(d)............................... BB 250 251,250
RETAIL (DRUG STORES)--0.9%
Rite Aid Corp. 144A 5.50%, 12/15/00(b)... B 500 492,500
RETAIL (FOOD CHAINS)--1.4%
Smith's Food & Drug Centers, Inc. Series
94-A2 8.64%, 7/2/12(d)................... BBB- 92 92,982
Stater Brothers Holdings, Inc. 10.75%,
8/15/06.................................. B 750 637,500
-----------
730,482
-----------
RETAIL (GENERAL MERCHANDISE)--0.8%
K Mart Funding Corp. Series F 8.80%,
7/1/10................................... Baa 458 431,048
RETAIL (SPECIALTY)--1.0%
Buhrmann US, Inc. 12.25%, 11/1/09........ B 500 520,000
SAVINGS & LOAN COMPANIES--1.0%
Sovereign Bancorp 10.50% 11/15/06........ Ba 500 511,250
SERVICES (COMMERCIAL & CONSUMER)--2.6%
Coinmach Laundry Corp. Series D 11.75%,
11/15/05................................. B 255 256,275
Loomis Fargo & Co. 10%, 1/15/04.......... B 300 288,750
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix-Seneca Bond Fund
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
SERVICES (COMMERCIAL & CONSUMER)--CONTINUED
Protection One Alarm Monitoring, Inc.
7.375%, 8/15/05.......................... B $ 500 $ 353,750
SC International Services, Inc. Series B
9.25%, 9/1/07............................ B 190 186,200
United Rentals, Inc. Series B 9.50%,
6/1/08................................... B 250 230,000
Williams Scotsman, Inc. 9.875%, 6/1/07... B 50 43,750
-----------
1,358,725
-----------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--4.0%
Nextel Commmunications, Inc. 0%,
10/31/07(c).............................. B 700 551,250
Orion Network Systems, Inc. 0%,
1/15/07(c)............................... B 90 31,050
Sprint Spectrum L.P. 0%, 8/15/06(c)...... Baa 1,530 1,519,405
-----------
2,101,705
-----------
TELECOMMUNICATIONS (LONG DISTANCE)--1.5%
Level 3 Communications, Inc. 0%,
3/15/10(c)............................... B 1,000 540,000
Qwest Communications International Corp.
0%, 10/15/07(c).......................... Baa 275 240,625
-----------
780,625
-----------
TEXTILES (APPAREL)--1.5%
Levi Strauss & Co. 7%, 11/1/06........... Ba 1,000 785,000
WASTE MANAGEMENT--2.3%
Waste Management, Inc. 7%, 10/1/04....... Ba 500 477,724
Waste Management, Inc. 6.125%,
7/15/11(c)............................... Ba 750 734,986
-----------
1,212,710
-----------
WATER UTILITIES--1.9%
Marlin Water Trust 144A 7.09%,
12/15/01(b).............................. Baa 1,000 994,299
-----------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $31,158,471) 29,683,193
-----------------------------------------------------------------------------
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
NON-AGENCY MORTGAGE-BACKED
SECURITIES--6.1%
COMM Mortgage Trust 00-C1, A1 7.206%,
9/15/08(d)............................... AAA $ 725 $ 730,010
DLJ Commercial Mortgage Corp. 98-CG1, A1A
6.11%, 12/10/07(d)....................... AAA 858 832,983
GE Capital Mortgage Services, Inc. 94-21,
B1 6.50%, 8/25/09........................ A 26 25,201
GMAC Commercial Mortgage Securities, Inc.
98-C2, A2 6.42%, 8/15/08................. Aaa 1,178 1,120,968
Lehman ABS Corp. 94-C2, A 8.145%,
11/2/07(d)............................... BBB+ 62 53,671
Saxon Asset Securities Trust 00-1, AF3
7.755%, 10/25/20......................... Aaa 425 429,528
-----------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $3,213,677) 3,192,361
-----------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--6.3%
BERMUDA--0.6%
Global Crossing Holdings Ltd. 9.125%,
11/15/06................................. Ba 300 298,500
CANADA--1.8%
Imax Corp. 7.875%, 12/1/05............... Ba 170 155,550
Rogers Cantel, Inc. 9.375%, 6/1/08....... Baa 750 776,250
-----------
931,800
-----------
MEXICO--1.9%
Pemex Finance Ltd. 6.30%, 5/15/10........ Aaa 500 463,685
Pemex Finance Ltd. 9.15%, 11/15/18....... Baa 500 528,150
-----------
991,835
-----------
UNITED KINGDOM--2.0%
Abbey National PLC 7.35%, 10/29/49(c).... Aa 100 95,903
Credit Suisse Group 144A 7.90%,
5/29/49(b)(c)............................ A 350 332,425
Terra Nova (U.K.) Holdings 7.20%,
8/15/07.................................. Baa 250 239,456
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix-Seneca Bond Fund
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
UNITED KINGDOM--CONTINUED
Vodafone Airtouch PLC 144A 6.96%,
12/19/01(b)(c)........................... A $ 400 $ 400,406
-----------
1,068,190
-----------
-----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $3,351,631) 3,290,325
-----------------------------------------------------------------------------
CONVERTIBLE BONDS--2.4%
AUTO PARTS & EQUIPMENT--2.4%
Mark IV Industries, Inc. Cv. 4.75%,
11/1/04.................................. B 1,250 1,243,750
-----------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS
(IDENTIFIED COST $1,172,592) 1,243,750
-----------------------------------------------------------------------------
<CAPTION>
SHARES
-------
PREFERRED STOCKS--2.5%
<S> <C> <C> <C>
BANKS (MAJOR REGIONAL)--0.5%
First Republic Bancorp Series A Pfd. 144A
10.50%(b)................................ 3,000 267,375
TELEPHONE--2.0%
Broadwing Communications, Inc. 12.50%
Series B................................. 10,500 1,060,500
-----------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $1,450,375) 1,327,875
-----------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
------- -----------
CONVERTIBLE PREFERRED STOCKS--0.3%
<S> <C> <C> <C>
REITS--0.2%
Equity Office Properties Trust Series B
Cv. Pfd. 144A 5.25%(b)................... 2,000 $ 91,750
SERVICES (COMMERCIAL & CONSUMER)--0.1%
United Rentals, Inc. Trust I Cv. Pfd.
144A 6.50%(b)............................ 2,000 69,000
-----------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $200,000) 160,750
-----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--94.8%
(IDENTIFIED COST $51,313,767) 49,621,262
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR
VALUE
(000)
-------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--3.8%
FEDERAL AGENCY SECURITIES--3.8%
Fannie Mae 6.20%, 10/2/00.................... $ 2,000 2,000,000
-------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $1,999,656) 2,000,000
-------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS--98.6%
(IDENTIFIED COST $53,313,423) 51,621,262(a)
Cash and receivables, less liabilities--1.4% 737,848
-----------
NET ASSETS--100.0% $52,359,110
===========
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $584,251 and gross
depreciation of $2,276,412 for federal income tax purposes. At September
30, 2000, the aggregate cost of securities for federal income tax purposes
was $53,313,423.
(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 September 30,
2000, these securities amounted to a value of $3,930,801 or 7.5% of net
assets.
(c) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(d) As rated by Standard & Poors, Fitch or Duff & Phelps.
See Notes to Financial Statements 11
<PAGE>
Phoenix-Seneca Bond Fund
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $53,313,423) $ 51,621,262
Cash 647,984
Receivables
Investment securities sold 1,073,240
Interest 730,707
Fund shares sold 12,656
Deferred organization expenses 2,840
Prepaid expenses 244
--------------
Total assets 54,088,933
--------------
LIABILITIES
Payables
Investment securities purchased 1,616,706
Fund shares repurchased 145
Distribution fee 15,395
Investment advisory fee 13,330
Transfer agent fee 12,910
Financial agent fee 6,875
Trustees' fee 1,800
Accrued expenses 62,662
--------------
Total liabilities 1,729,823
--------------
NET ASSETS $ 52,359,110
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 53,720,735
Undistributed net investment income 516,396
Accumulated net realized loss (185,860)
Net unrealized depreciation (1,692,161)
--------------
NET ASSETS $ 52,359,110
==============
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $39,981,411) 3,936,916
Net asset value and offering price per share $10.16
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $7,334,969) 725,734
Net asset value per share $10.11
Offering price per share $10.11/(1-4.75%) $10.61
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $3,086,106) 307,381
Net asset value and offering price per share $10.04
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,956,624) 194,592
Net asset value and offering price per share $10.06
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30,2000
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 3,679,949
Dividends 124,500
--------------
Total investment income 3,804,449
--------------
EXPENSES
Investment advisory fee 221,030
Distribution fee, Class A 11,344
Distribution fee, Class B 25,306
Distribution fee, Class C 13,642
Financial agent fee 77,436
Transfer agent 73,408
Registration 46,660
Professional 31,975
Printing 19,030
Custodian 18,073
Trustees 13,190
Amortization of deferred organization expenses 10,687
Miscellaneous 16,022
--------------
Total expenses 577,803
Less expenses borne by investment adviser (124,936)
Custodian fees paid indirectly (4,722)
--------------
Net expenses 448,145
--------------
NET INVESTMENT INCOME 3,356,304
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on securities (177,909)
Net change in unrealized appreciation (depreciation) on
investments (504,232)
--------------
NET LOSS ON INVESTMENTS (682,141)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,674,163
==============
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Phoenix-Seneca Bond Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
9/30/00 9/30/99
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 3,356,304 $ 2,136,536
Net realized gain (loss) (177,909) 286,567
Net change in unrealized appreciation
(depreciation) (504,232) (1,374,017)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,674,163 1,049,086
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (2,515,070) (1,783,876)
Net investment income, Class A (292,804) (62,282)
Net investment income, Class B (164,557) (41,217)
Net investment income, Class C (86,111) (19,340)
Net realized gains, Class X (234,671) (237,256)
Net realized gains, Class A (20,533) (6,691)
Net realized gains, Class B (18,242) (3,366)
Net realized gains, Class C (7,732) (4,337)
----------- -----------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (3,339,720) (2,158,365)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (713,599
and 936,038 shares, respectively) 7,223,007 9,870,220
Net asset value of shares issued from
reinvestment of distributions
(267,292 and 188,148 shares,
respectively) 2,688,008 1,984,360
Cost of shares repurchased (412,686
and 232,292 shares, respectively) (4,171,320) (2,442,507)
----------- -----------
Total 5,739,695 9,412,073
----------- -----------
CLASS A
Proceeds from sales of shares (565,362
and 302,053 shares, respectively) 5,655,310 3,154,123
Net asset value of shares issued from
reinvestment of distributions
(24,149 and 5,398 shares,
respectively) 241,471 56,422
Cost of shares repurchased (129,252
and 74,593 shares, respectively) (1,301,813) (783,486)
----------- -----------
Total 4,594,968 2,427,059
----------- -----------
CLASS B
Proceeds from sales of shares (205,347
and 167,067 shares, respectively) 2,071,941 1,753,608
Net asset value of shares issued from
reinvestment of distributions
(6,271 and 1,944 shares,
respectively) 62,389 20,300
Cost of shares repurchased (59,449 and
35,679 shares, respectively) (590,669) (375,271)
----------- -----------
Total 1,543,661 1,398,637
----------- -----------
CLASS C
Proceeds from sales of shares (174,940
and 50,510 shares, respectively) 1,761,161 529,791
Net asset value of shares issued from
reinvestment of distributions
(7,493 and 1,056 shares,
respectively) 74,661 11,082
Cost of shares repurchased (31,077 and
49,464 shares, respectively) (311,354) (522,992)
----------- -----------
Total 1,524,468 17,881
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS 13,402,792 13,255,650
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS 12,737,235 12,146,371
NET ASSETS
Beginning of period 39,621,875 27,475,504
----------- -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$516,396 AND 211,548, RESPECTIVELY] $52,359,110 $39,621,875
=========== ===========
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix-Seneca Bond Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS X
---------------------------------------------------------------------------
FROM
YEAR ENDED SEPTEMBER 30, INCEPTION
---------------------------------------------------------- 3/7/96 TO
2000 1999 1998 1997 9/30/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.35 $ 10.68 $ 10.47 $ 10.09 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.77(1) 0.69(1) 0.56 0.62 0.31
Net realized and unrealized gain (loss) (0.18) (0.31) 0.40 0.47 0.08
-------- -------- -------- -------- ------
TOTAL FROM INVESTMENT OPERATIONS 0.59 0.38 0.96 1.09 0.39
-------- -------- -------- -------- ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.71) (0.62) (0.57) (0.69) (0.30)
Dividends from net realized gains (0.07) (0.09) (0.18) (0.02) --
-------- -------- -------- -------- ------
TOTAL DISTRIBUTIONS (0.78) (0.71) (0.75) (0.71) (0.30)
-------- -------- -------- -------- ------
Change in net asset value (0.19) (0.33) 0.21 0.38 0.09
-------- -------- -------- -------- ------
NET ASSET VALUE, END OF PERIOD $ 10.16 $ 10.35 $ 10.68 $ 10.47 $10.09
======== ======== ======== ======== ======
Total return 6.17% 3.51% 9.44% 11.26% 4.02%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $39,981 $34,853 $26,455 $8,922 $3,927
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.90%(5)(8) 1.06%(5)(7) 1.66% 1.53%(5) 0.56%(3)(5)
Net investment income (loss) 7.67% 6.60% 5.92% 6.31% 7.54%(3)
Portfolio turnover 74% 95% 112% 99.68% 52.82%(4)
</TABLE>
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------
YEAR ENDED FROM
SEPTEMBER 30, INCEPTION
------------------------ 7/1/98 TO
2000 1999 9/30/98
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.29 $ 10.68 $ 10.79
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) 0.75 0.59 0.13
Net realized and unrealized gain (loss) (0.18) (0.33) (0.07)
-------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 0.57 0.26 0.06
-------- -------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.68) (0.56) (0.17)
Dividends from net realized gains (0.07) (0.09) --
-------- -------- -------
TOTAL DISTRIBUTIONS (0.75) (0.65) (0.17)
-------- -------- -------
Change in net asset value (0.18) (0.39) (0.11)
-------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 10.11 $ 10.29 $ 10.68
======== ======== =======
Total return(2) 5.84% 2.46% 0.53%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $7,335 $2,732 $348
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(6) 1.15%(8) 1.88%(7) 2.45%(3)
Net investment income (loss) 7.60% 5.80% 5.17%(3)
Portfolio turnover 74% 95% 112%(4)
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charge is not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.00%,
1.13%, 3.41% and 9.31% for the periods ended September 30, 2000, 1999, 1997
and 1996, respectively.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.81%,
4.08% and 8.99% for the periods ended September 30, 2000, 1999 and 1998,
respectively.
(7) For the periods ended September 30, 1999, the ratio of operating expenses
to average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(8) For the year ended September 30, 2000, the ratio of operating expenses to
average net assets includes the effect of expense offset for custodian
fees, if expense offsets were excluded, the ratio would have been 0.91% and
1.16% for Class X and Class A, respectively.
14 See Notes to Financial Statements
<PAGE>
Phoenix-Seneca Bond Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
---------------------------------------
YEAR ENDED FROM
SEPTEMBER 30, INCEPTION
--------------------- 7/1/98 TO
2000 1999 9/30/98
<S> <C> <C> <C>
Net asset value, beginning of period $10.27 $10.67 $10.79
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) 0.68 0.52 0.11
Net realized and unrealized gain (loss) (0.20) (0.33) (0.08)
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.48 0.19 0.03
------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.64) (0.50) (0.15)
Dividends from net realized gains (0.07) (0.09) --
------ ------ ------
TOTAL DISTRIBUTIONS (0.71) (0.59) (0.15)
------ ------ ------
Change in net asset value (0.23) (0.40) (0.12)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.04 $10.27 $10.67
====== ====== ======
Total return(2) 5.06% 1.67% 0.28%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,086 $1,593 $234
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 1.90%(8) 2.62%(7) 3.20%(3)
Net investment income (loss) 6.83% 5.09% 4.42%(3)
Portfolio turnover 74% 95% 112%(4)
</TABLE>
<TABLE>
<CAPTION>
CLASS C
---------------------------------------
YEAR ENDED FROM
SEPTEMBER 30, INCEPTION
--------------------- 7/1/98 TO
2000 1999 9/30/98
<S> <C> <C> <C>
Net asset value, beginning of period $10.27 $10.67 $10.79
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) 0.69 0.49 0.10
Net realized and unrealized gain (loss) (0.20) (0.30) (0.07)
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.49 0.19 0.03
------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.63) (0.50) (0.15)
Dividends from net realized gains (0.07) (0.09) --
------ ------ ------
TOTAL DISTRIBUTIONS (0.70) (0.59) (0.15)
------ ------ ------
Change in net asset value (0.21) (0.40) (0.12)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.06 $10.27 $10.67
====== ====== ======
Total return(2) 5.12% 1.66% 0.28%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,957 $444 $439
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(6) 1.90%(8) 2.91%(7) 3.20%(3)
Net investment income (loss) 6.88% 4.71% 4.27%(3)
Portfolio turnover 74% 95% 112%(4)
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charge is not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 3.08%,
5.67% and 15.79% for the periods ended September 30, 2000, 1999 and 1998,
respectively.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 4.08%,
9.50% and 11.22% for the periods ended September 30, 2000, 1999 and 1998,
respectively.
(7) For the periods ended September 30, 1999, the ratio of operating expenses
to average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(8) For the year ended September 30, 2000, the ratio of operating expenses to
average net assets includes the effect of expense offset for custodian
fees, if expense offsets were excluded, the ratio would have been 1.91%.
See Notes to Financial Statements 15
<PAGE>
PHOENIX-SENECA MID-CAP "EDGE"-SM- FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM, GAIL SENECA, PH.D., RICK
LITTLE, CFA AND RON JACKS, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund seeks long-term capital appreciation.
Q: HOW DID THE FUND PERFORM OVER THE LAST 12 MONTHS?
A: The fiscal year ended September 30, 2000, was a remarkable one for the Fund,
with Class A shares increasing 91.30%. Class B shares earned 89.49%, Class C
shares returned 89.54%, and Class X shares were up 91.81% for the 12 months. The
S&P MidCap 400 Index(1) rose 43.21% for the same period. Performance was
achieved in rapidly rising markets and may have resulted from participation in
initial public offerings (IPO's) and from a concentration in technology and
other sectors, which can lead to greater volatility. There is no assurance that
similar returns will be achieved in the future. All performance figures assume
reinvestment of distributions and exclude the effect of sales charges.
Q: WHAT MARKET FACTORS AFFECTED PERFORMANCE?
A: Last year's fourth quarter, which marked the beginning of the Fund's fiscal
year, saw tech stocks continuing to dominate the market. Issue selection within
the technology sector and our overweighting in that area contributed greatly to
our good results. In particular, some of our holdings of semiconductor
developers had exceptional returns. We also benefited from good issue selection
within the health-care, energy and consumer staples sectors.
The beginning of the year continued to see technology as the best performing
sector, with eight of the top 10 contributors to the S&P MidCap 400 Index's
first-quarter return being tech stocks. Our good stock selection within the
technology and telecommunications sectors continued to drive performance. During
the quarter, we trimmed back a majority of our outperformers due to their high
valuation levels.
The second quarter of the year was marked by extreme style shifts and sector
rotation. Investors began eyeing the Fed nervously and ended up punishing many
of the industries that had been the star performers. After a long period of
dominance, technology fell from favor. For example, the Nasdaq Index(2) returned
12.4% for the first three months of the year, but on March 31, was down nearly
12% from its high on March 10. Although the technology sector as a whole
produced negative results, our tech holdings outperformed the market. The best
performers in our portfolio during this time were the communications services
and health-care sectors. In addition, the portfolio's underweighted position in
consumer cyclicals and financial stocks also helped performance in the second
quarter.
The overall market was negative in the third quarter for the third year in a
row, but this year it was not the result of exogenous factors such as Sovereign
debt default or Y2K fears. This year's negative sentiment was attributable to
the combined effects of high energy prices, the economic
(1) THE S&P MIDCAP 400 INDEX IS A COMMONLY USED MEASURE OF MID-CAPITALIZATION
STOCK MARKET TOTAL-RETURN PERFORMANCE.
(2) THE NASDAQ INDEX IS A COMMONLY USED MEASURE OF TECHNOLOGY-ORIENTED STOCK
TOTAL-RETURN PERFORMANCE. THE INDICES ARE UNMANAGED AND NOT AVAILABLE FOR
DIRECT INVESTMENT.
16
<PAGE>
PHOENIX-SENECA MID-CAP "EDGE"-SM- FUND (CONTINUED)
slowdown and currency market concerns. Our portfolio, which focuses on
high-quality companies with accelerating earnings, was well-positioned to
withstand much of this concern. Strong stock selection was key in this difficult
quarter. Our portfolio highlights were three technology stocks: Extreme
Networks, Perkin-Elmer and Mercury Interactive. Each of these names was up
strongly, despite the downdraft in the broad technology sector. We also profited
from holdings in the energy and financial sectors, where Nabors Industries,
Santa Fe International, Capital One Financial and MGIC Investment Corp. produced
excellent results.
Q: WHAT IS YOUR NEAR-TERM OUTLOOK?
A: As we enter the new fiscal year, pessimism reigns in the markets. Nervous
investors are fleeing from companies at the slightest hint of disappointment.
Importantly, however, investors are not abandoning the markets. Instead, money
is rotating from sector to sector. Market breadth, as measured by the number of
stocks performing better than the index, has improved significantly. Investors
realize that the fundamental investment case for good financial market returns
remains intact. Economic strength is moderating, but remains solid. Inflation is
tame, despite the energy price spike. Corporate profit growth is continuing. The
Fed is on hold. Successful investors will be those who weather the current storm
with patience and a focus on companies with superior profit growth and
sustainable valuations.
The current negative sentiment will undoubtedly last a bit longer, as the
market frets about the effects of a weak economy. As seasoned investors, we have
survived such nervous periods before. We do not forecast an economic recession
and remain confident that even as the economy cools, we can continue to identify
strong candidates for investment.
The Fund's strong showing against virtually all indices is a result of our
focus on companies that exhibit earnings strength and the potential of future
earnings acceleration. We believe that the mid-cap area will continue to be a
fertile source of strong earnings combined with sensible valuations.
OCTOBER 9, 2000
17
<PAGE>
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 9/30/00
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 9/30/00 DATE
------ ----------- -----------
<S> <C> <C> <C>
Class X Shares at NAV(2) 91.81% 36.02% 3/8/96
Class A Shares at NAV(2) 91.30 35.49 3/8/96
Class A Shares at POP(3) 80.30 33.74 3/8/96
Class B Shares at NAV(2) 89.49 35.68 7/1/98
Class B Shares with CDSC(4) 85.49 34.77 7/1/98
Class C Shares at NAV(2) 89.54 35.66 7/1/98
Class C Shares with CDSC(4) 89.54 35.66 7/1/98
S&P 400 MidCap Index(7) 43.21 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 5.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 22.74% for Class X and Class A (since 3/8/96) and
20.24% for Class B and Class C (since 7/1/98).
(6) This chart illustrates NAV returns on Class X shares and POP returns on
Class A shares. Returns on Class B and Class C shares will vary due to
differing sales charges.
(7) The S&P 400 MidCap Index is an unmanaged, commonly used measure of mid-cap
stock total return performance. The index's performance does not reflect
sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 9/30
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-SENECA MID CAP PHOENIX-SENECA MID CAP
"EDGE" FUND "EDGE" FUND S&P MIDCAP 400 INDEX(7)
<S> <C> <C> <C>
Class X(6) Class A(6)
3/96 $10,000 $9,425 $10,000
96 $14,970 $14,072 $10,876
97 $16,676 $15,654 $15,129
98 $15,972 $14,912 $14,176
99 $21,246 $19,724 $17,790
00 $40,751 $37,733 $25,478
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
3/8/96 (inception of the Fund) in Class X and A shares. The total return for
Class X shares reflects no sales charge. The total return for Class A shares
reflects the maximum sales charge of 5.75% on the initial investment.
Performance assumes dividends and capital gains are reinvested. The performance
of other share classes will be greater or less than that shown based on
differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 9/30/00
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 39%
Energy 12
Health Care 12
Consumer Cyclicals 9
Financials 9
Consumer Staples 7
Other 7
Capital Goods 5
</TABLE>
18
<PAGE>
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
TEN LARGEST HOLDINGS AT SEPTEMBER 30, 2000 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Extreme Networks, Inc. 4.3%
LOCAL AREA NETWORK SWITCHING PROVIDER
2. Perkin-Elmer, Inc. 4.3%
MANUFACTURER OF ANAYTICAL INSTRUMENTS AND OPTICS
3. Mercury Interactive Corp. 4.3%
MANUFACTURES SOFTWARE TESTING PRODUCTS
4. Capital One Financial Corp. 4.0%
BANK CARD ISSUER
5. Tenet Healthcare Corp. 3.9%
OPERATES SPECIALTY AND GENERAL HOSPITALS
6. MGIC Investment Corp. 3.8%
PROVIDES PRIVATE MORTGAGE INSURANCE
7. Allergan, Inc. 3.5%
DEVELOPS OPHTHALMIC AND DETERMATOLGIC PRODUCTS
8. EchoStar Communications Corp. 3.4%
MANUFACTURES SATELLITE TV PRODUCTS
9. Forest Laboratories, Inc. 3.3%
PHARMACEUTICAL MANUFACTURER AND DISTRIBUTOR
10. SPX Corp. 3.3%
MANUFACTURES ENGINE PARTS
</TABLE>
INVESTMENTS AT SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
COMMON STOCKS--88.0%
BROADCASTING (TELEVISION, RADIO & CABLE)--3.4%
EchoStar Communications Corp.(b)........ 69,060 $ 3,642,915
COMMUNICATIONS EQUIPMENT--10.7%
Advanced Fibre Communications,
Inc.(b)................................. 87,200 3,302,700
McData Corp. Class B(b)................. 14,800 1,818,781
Scientific-Atlanta, Inc................. 46,960 2,987,830
Spectrasite Holdings, Inc.(b)........... 70,040 1,300,118
Tut Systems, Inc.(b).................... 23,780 2,052,511
------------
11,461,940
------------
COMPUTERS (HARDWARE)--4.5%
Copper Mountain Networks, Inc.(b)....... 6,250 234,375
Extreme Networks, Inc.(b)............... 40,280 4,612,060
------------
4,846,435
------------
COMPUTERS (SOFTWARE & SERVICES)--6.2%
Agile Software Corp.(b)................. 23,610 2,123,425
Mercury Interactive Corp.(b)............ 29,140 4,567,695
------------
6,691,120
------------
CONSUMER FINANCE--4.1%
Capital One Financial Corp.............. 61,990 4,343,174
ELECTRICAL EQUIPMENT--3.3%
SPX Corp.(b)............................ 25,050 3,555,534
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
ELECTRONICS (INSTRUMENTATION)--4.3%
PerkinElmer, Inc........................ 44,060 $ 4,598,763
ELECTRONICS (SEMICONDUCTORS)--4.1%
Fairchild Semiconductor Corp. Class
A(b).................................... 67,020 1,884,938
International Rectifier Corp.(b)........ 48,760 2,465,428
------------
4,350,366
------------
EQUIPMENT (SEMICONDUCTORS)--2.4%
Credence Systems Corp.(b)............... 84,780 2,543,400
FOODS--3.0%
Hershey Foods Corp...................... 59,430 3,216,649
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--6.8%
Allergan, Inc........................... 44,060 3,720,316
Forest Laboratories, Inc.(b)............ 31,190 3,577,103
------------
7,297,419
------------
HEALTH CARE (HOSPITAL MANAGEMENT)--3.9%
Tenet Healthcare Corp................... 115,910 4,216,226
INSURANCE (PROPERTY-CASUALTY)--3.8%
MGIC Investment Corp.................... 67,300 4,113,713
MANUFACTURING (SPECIALIZED)--1.3%
Avery Dennison Corp..................... 30,090 1,395,424
NATURAL GAS--3.1%
Dynegy, Inc. Class A.................... 58,060 3,309,420
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
OIL & GAS (DRILLING & EQUIPMENT)--8.3%
Nabors Industries, Inc.(b).............. 54,060 $ 2,832,744
Santa Fe International Corp............. 60,690 2,734,843
Weatherford International, Inc.(b)...... 76,170 3,275,310
------------
8,842,897
------------
OIL & GAS (REFINING & MARKETING)--2.5%
Valero Energy Corp...................... 76,690 2,698,529
RETAIL (SPECIALTY)--2.9%
Bed Bath & Beyond, Inc.(b).............. 128,180 3,126,390
SERVICES (COMMERCIAL & CONSUMER)--5.3%
Convergys Corp.(b)...................... 79,720 3,099,115
Crown Castle International Corp.(b)..... 84,180 2,614,841
------------
5,713,956
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--4.1%
Nextel Partners, Inc. Class A(b)........ 80,930 2,357,086
Powerwave Technologies, Inc.(b)......... 54,420 2,066,259
------------
4,423,345
------------
--------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $77,880,436) 94,387,615
--------------------------------------------------------------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--4.3%
COMMUNICATIONS EQUIPMENT--1.8%
NDS Group PLC ADR (United Kingdom)(b)... 24,250 $ 1,867,250
ELECTRONICS (SEMICONDUCTORS)--2.5%
Chartered Semiconductor Manufacturing
Ltd. ADR (Singapore)(b)................. 44,660 2,710,304
--------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $4,619,947) 4,577,554
--------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--92.3%
(IDENTIFIED COST $82,500,383) 98,965,169
--------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR
VALUE
(000)
--------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--11.5%
REPURCHASE AGREEMENT--11.5%
State Street Bank & Trust Co. repurchase
agreement, 4.25%, dated 9/29/00 due 10/2/00,
repurchase price $12,328,365 collateralized
by U.S. Treasury Bond 7.875%, 2/15/21,
market value $12,573,439.................... $12,324 12,324,000
--------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $12,324,000) 12,324,000
--------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS--103.8%
(IDENTIFIED COST $94,824,383) 111,289,169(a)
Cash and receivables, less liabilities--(3.8%) (4,025,757)
-------------
NET ASSETS--100.0% $ 107,263,412
=============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $21,837,927 and gross
depreciation of $5,467,320 for federal income tax purposes. At September
30, 2000 the aggregate cost of securities for federal income tax purposes
was $94,918,562.
(b) Non-income producing.
20 See Notes to Financial Statements
<PAGE>
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Investment securities at value, exclusive of
repurchase agreement
(Identified cost $82,500,383) $98,965,169
Repurchase agreement at value
(Identified cost $12,324,000) 12,324,000
Cash 357
Receivables
Investment securities sold 1,386,366
Fund shares sold 1,083,847
Dividends and interest 4,882
Deferred organization expenses 2,840
Prepaid expenses 265
-----------
Total assets 113,767,726
-----------
LIABILITIES
Payables
Investment securities purchased 6,216,956
Fund shares repurchased 48,820
Distribution fee 92,526
Investment advisory fee 35,149
Transfer agent fee 14,192
Financial agent fee 9,765
Trustees' fee 1,800
Accrued expenses 85,106
-----------
Total liabilities 6,504,314
-----------
NET ASSETS 107,263,412
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $79,976,771
Accumulated net realized gain 10,821,855
Net unrealized appreciation 16,464,786
-----------
NET ASSETS $107,263,412
===========
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $23,016,228) 738,169
Net asset value and offering price per share $31.18
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $50,150,286) 1,631,163
Net asset value per share $30.75
Offering price per share $30.75/(1-5.75%) $32.63
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $15,878,587) 527,747
Net asset value and offering price per share $30.09
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $18,218,311) 605,687
Net asset value and offering price per share $30.08
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 211,528
Dividends 100,851
-----------
Total investment income 312,379
-----------
EXPENSES
Investment advisory fee 444,754
Distribution fee, Class A 62,047
Distribution fee, Class B 66,746
Distribution fee, Class C 73,929
Financial agent fee 86,261
Transfer agent 95,583
Registration 51,153
Printing 50,061
Professional 27,812
Custodian 14,464
Trustees 13,190
Amortization of deferred organization expenses 10,687
Miscellaneous 12,791
-----------
Total expenses 1,009,478
Less expenses borne by investment adviser (112,516)
-----------
Net expenses 896,962
-----------
NET INVESTMENT LOSS (584,583)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 11,930,154
Net change in unrealized appreciation (depreciation) on
investments 14,274,036
-----------
NET GAIN ON INVESTMENTS 26,204,190
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $25,619,607
===========
</TABLE>
See Notes to Financial Statements 21
<PAGE>
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
9/30/00 9/30/99
------------ -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (584,583) $ (275,816)
Net realized gain (loss) 11,930,154 2,299,388
Net change in unrealized appreciation
(depreciation) 14,274,036 2,415,950
------------ -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 25,619,607 4,439,522
------------ -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class X (1,167,783) (355,856)
Net realized gains, Class A (936,318) (166,088)
Net realized gains, Class B (259,770) (11,063)
Net realized gains, Class C (178,774) (9,446)
------------ -----------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (2,542,645) (542,453)
------------ -----------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (215,085
and 143,563 shares, respectively) 6,295,346 2,478,919
Net asset value of shares issued from
reinvestment of distributions
(53,135 and 21,703 shares,
respectively) 1,166,309 354,621
Cost of shares repurchased (128,414
and 214,035 shares, respectively) (3,156,577) (3,757,537)
------------ -----------
Total 4,305,078 (923,997)
------------ -----------
CLASS A
Proceeds from sales of shares
(1,409,154 and 228,931 shares,
respectively) 37,895,379 3,836,768
Net asset value of shares issued from
reinvestment of distributions
(38,209 and 10,097 shares,
respectively) 828,380 163,976
Cost of shares repurchased (183,022
and 138,776 shares, respectively) (4,980,455) (2,331,488)
------------ -----------
Total 33,743,304 1,669,256
------------ -----------
CLASS B
Proceeds from sales of shares (449,699
and 86,897 shares, respectively) 12,356,353 1,460,274
Net asset value of shares issued from
reinvestment of distributions
(7,356 and 684 shares, respectively) 157,058 11,062
Cost of shares repurchased (25,588 and
1,900 shares, respectively) (698,730) (31,603)
------------ -----------
Total 11,814,681 1,439,733
------------ -----------
CLASS C
Proceeds from sales of shares (561,111
and 49,078 shares, respectively) 14,900,356 821,159
Net asset value of shares issued from
reinvestment of distributions
(6,695 and 402 shares, respectively) 142,940 6,510
Cost of shares repurchased (18,146 and
991 shares, respectively) (467,593) (16,970)
------------ -----------
Total 14,575,703 810,699
------------ -----------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS 64,438,766 2,995,691
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS 87,515,728 6,892,760
NET ASSETS
Beginning of period 19,747,684 12,854,924
------------ -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$0 AND $0, RESPECTIVELY] $107,263,412 $19,747,684
============ ===========
</TABLE>
22 See Notes to Financial Statements
<PAGE>
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS X
-----------------------------------------------------------------
FROM
YEAR ENDED SEPTEMBER 30, INCEPTION
-------------------------------------------------- 3/8/96 TO
2000 1999 1998 1997 9/30/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.78 $ 13.81 $ 16.47 $ 14.97 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.19)(1) (0.21)(1) (0.23)(1) (0.17) 0.01
Net realized and unrealized gain (loss) 15.65 4.72 (0.58) 1.84 4.96
-------- -------- -------- -------- ------
TOTAL FROM INVESTMENT OPERATIONS 15.46 4.51 (0.81) 1.67 4.97
-------- -------- -------- -------- ------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- (0.07) --
Dividends from net realized gains (2.06) (0.54) (1.85) (0.10) --
-------- -------- -------- -------- ------
TOTAL DISTRIBUTIONS (2.06) (0.54) (1.85) (0.17) --
-------- -------- -------- -------- ------
Change in net asset value 13.40 3.97 (2.66) 1.50 4.97
-------- -------- -------- -------- ------
NET ASSET VALUE, END OF PERIOD $ 31.18 $ 17.78 $ 13.81 $ 16.47 $14.97
======== ======== ======== ======== ======
Total return 91.81% 33.02% (4.22)% 11.39% 49.70%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $23,016 $10,640 $8,940 $9,390 $7,428
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.27%(5) 1.96% 2.10%(5) 1.74%(5) 0.90%(3)(5)
Net investment income (loss) (0.72)% (1.27)% (1.49)% (0.97)% 0.27%(3)
Portfolio turnover 124% 192% 206% 283.60% 72.34%(4)
</TABLE>
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------
FROM
YEAR ENDED SEPTEMBER 30, INCEPTION
-------------------------------------------------- 3/8/96 TO
2000 1999 1998 1997 9/30/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.60 $ 13.75 $ 16.49 $ 14.94 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.24)(1) (0.31)(1) (0.30)(1) (0.25) (0.01)
Net realized and unrealized gain (loss) 15.45 4.70 (0.59) 1.90 4.95
-------- -------- -------- -------- ------
TOTAL FROM INVESTMENT OPERATIONS 15.21 4.39 (0.89) 1.65 4.94
-------- -------- -------- -------- ------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- -- --
Dividends from net realized gains (2.06) (0.54) (1.85) (0.10) --
-------- -------- -------- -------- ------
TOTAL DISTRIBUTIONS (2.06) (0.54) (1.85) (0.10) --
-------- -------- -------- -------- ------
Change in net asset value 13.15 3.85 (2.74) 1.55 4.94
-------- -------- -------- -------- ------
NET ASSET VALUE, END OF PERIOD $ 30.75 $ 17.60 $ 13.75 $ 16.49 $14.94
======== ======== ======== ======== ======
Total return(2) 91.30% 32.27% (4.74)% 11.25% 49.30%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $50,150 $6,457 $3,666 $2,419 $1,355
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.47%(6) 2.51% 2.70%(6) 2.37%(6) 1.55%(3)(6)
Net investment income (loss) (0.91)% (1.81)% (1.95)% (1.60)% (0.46)%(3)
Portfolio turnover 124% 192% 206% 283.60% 72.34%(4)
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charge is not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.43%,
2.38%, 2.77% and 5.73% for the periods ended September 30, 2000, 1998, 1997
and 1996, respectively.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.59%,
2.74%, 4.32% and 9.73% for the periods ended September 30, 2000, 1998, 1997
and 1996, respectively.
See Notes to Financial Statements 23
<PAGE>
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
----------------------------------------
YEAR ENDED FROM
SEPTEMBER 30, INCEPTION
---------------------- 7/1/98 TO
2000 1999 9/30/98
<S> <C> <C> <C>
Net asset value, beginning of period $ 17.41 $13.73 $17.15
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) (0.45) (0.47) (0.09)
Net realized and unrealized gain (loss) 15.19 4.69 (3.33)
------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS 14.74 4.22 (3.42)
------- ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- --
Dividends from net realized gains (2.06) (0.54) --
------- ------ ------
TOTAL DISTRIBUTIONS (2.06) (0.54) --
------- ------ ------
Change in net asset value 12.68 3.68 (3.42)
------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 30.09 $17.41 $13.73
======= ====== ======
Total return(2) 89.49% 31.05% (19.94)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $15,879 $1,676 $145
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 2.29% 3.45% 3.45%(3)
Net investment income (loss) (1.73)% (2.78)% (2.45)%(3)
Portfolio turnover 124% 192% 206%(4)
</TABLE>
<TABLE>
<CAPTION>
CLASS C
----------------------------------------
YEAR ENDED FROM
SEPTEMBER 30, INCEPTION
---------------------- 7/1/98 TO
2000 1999 9/30/98
<S> <C> <C> <C>
Net asset value, beginning of period $ 17.40 $13.72 $17.15
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) (0.45) (0.47) (0.09)
Net realized and unrealized gain (loss) 15.19 4.69 (3.34)
------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS 14.74 4.22 (3.43)
------- ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- --
Dividends from net realized gains (2.06) (0.54) --
------- ------ ------
TOTAL DISTRIBUTIONS (2.06) (0.54) --
------- ------ ------
Change in net asset value 12.68 3.68 (3.43)
------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 30.08 $17.40 $13.72
======= ====== ======
Total return(2) 89.54% 31.07% (20.00)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $18,218 $975 $103
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(6) 2.25% 3.45% 3.45%(3)
Net investment income (loss) (1.68)% (2.78)% (2.44)%(3)
Portfolio turnover 124% 192% 206%(4)
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charge is not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.70%,
6.33% and 20.80% for the periods ended September 30, 2000, 1999 and 1998,
respectively.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.65%,
9.03% and 21.14% for the periods ended September 30, 2000, 1999 and 1998,
respectively.
24 See Notes to Financial Statements
<PAGE>
PHOENIX-SENECA REAL ESTATE SECURITIES FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM LEADER, DAVID SHAPIRO
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund seeks high total return from both current income and long-term
capital appreciation.
Q: HOW DID THE FUND PERFORM OVER THE LAST 12 MONTHS?
A: The Fund performed very well for the fiscal year ended September 30, 2000.
Class A shares increased 27.40%, Class B shares earned 26.37%, Class C shares
returned 26.37%, and Class X shares rose 29.00% for the 12 months. For the same
period, the S&P 500 Index(1) was up 13.37%, and the Wilshire Real Estate
Securities Index(2) gained 21.89%. All performance figures assume reinvestment
of distributions and exclude the effect of sales charges.
Q: WHAT IS YOUR STRATEGY IN SELECTING INVESTMENTS?
A: Our strategy continues to focus on owning the preeminent companies in the
real estate and real estate finance sectors. Good management teams and strong
balance sheets are the characteristics we emphasize when selecting companies for
the portfolio. Additionally, we look for reasonable valuations relative to the
long-term growth rates of the companies in our portfolio.
Q: WHAT DOMESTIC EVENTS HAD A MAJOR IMPACT ON HOW YOU HAVE POSITIONED THE
PORTFOLIO?
A: Rising interest rates for much of the past year resulted in a return to
"value" investing, with real estate being a major beneficiary. Our philosophy
has been to emphasize real estate investments in those parts of the country with
strong job growth, particularly the Southeast, Southwest and West in recent
periods. In addition, we look for constrained development, such as in city
centers like Boston, New York, San Francisco and Los Angeles.
Q: WHAT FACTORS LED TO THE FUND'S STRONG PERFORMANCE RELATIVE TO ITS BENCHMARKS?
A: The Fund continued to outperform its benchmarks by concentrating portfolio
holdings in high quality companies with an emphasis on the apartment,
office/industrial and finance sectors. The Fund's return was also helped by the
announced buyout of Urban Shopping Centers and the liquidation of Pacific Gulf
Properties. We continued to maintain our core holdings in Equity Office
Properties, Equity Residential Properties and Essex Property Trust. New holdings
in the portfolio included Fannie Mae, Freddie Mac and Countrywide Credit.
Q: WHAT IS YOUR OUTLOOK FOR THE SHORT TERM?
A: With market volatility likely to continue through the presidential election,
we are focusing our attention on companies with low multiples and reasonable
growth rates.
OCTOBER 23, 2000
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF BROAD STOCK
MARKET TOTAL-RETURN PERFORMANCE.
(2) THE WILSHIRE REAL ESTATE SECURITIES INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF REAL ESTATE TOTAL-RETURN PERFORMANCE. THE INDICES ARE NOT
AVAILABLE FOR DIRECT INVESTMENT.
25
<PAGE>
Phoenix-Seneca Real Estate Securities Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 9/30/00
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 9/30/00 DATE
------ ----------- ---------
<S> <C> <C> <C>
Class X Shares at NAV(2) 29.00% 9.30% 3/12/96
Class A Shares at NAV(2) 27.40 8.03 3/12/96
Class A Shares at POP(3) 20.07 6.64 3/12/96
Class B Shares at NAV(2) 26.37 0.75 7/1/98
Class B Shares with CDSC(4) 22.37 (0.49) 7/1/98
Class C Shares at NAV(2) 26.37 0.75 7/1/98
Class C Shares with CDSC(4) 26.37 0.75 7/1/98
Wilshire REIT Index(7) 21.89 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 5.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 10.56% for Class X and Class A (since 3/29/96) and
1.65% for Class B and Class C (since 6/30/98).
(6) This chart illustrates NAV returns on Class X shares and POP returns on
Class A shares. Returns on Class B and Class C shares will vary due to
differing sales charges.
(7) The Wilshire REIT Index is an unmanaged, commonly used measure of real
estate equity market total return performance. The index's performance does
not reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 9/30
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-SENECA PHOENIX-SENECA
REAL ESTATE FUND REAL ESTATE FUND WILSHIRE REIT INDEX(7)
CLASS X(6) CLASS A(6)
<S> <C> <C> <C>
3/96 $10,000 $9,425 $10,000
96 $11,261 $10,557 $11,111
97 $15,252 $14,203 $15,800
98 $12,456 $11,430 $13,538
99 $11,626 $10,519 $12,897
00 $14,998 $13,402 $15,720
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
3/12/96 (inception of the Fund) in Class X and A shares. The total return for
Class X shares reflects no sales charge. The total return for Class A shares
reflects the maximum sales charge of 5.75% on the initial investment.
Performance assumes dividends and capital gains are reinvested. The performance
of other share classes will be greater or less than that shown based on
differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 9/30/00
As a percentage of real estate holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Office 30%
Apartments 22
Regional Malls 14
Diversified 13
Manufactured Home 11
Lodging/Resorts 4
Mortgage Backed 4
Other 2
</TABLE>
26
<PAGE>
Phoenix-Seneca Real Estate Securities Fund
TEN LARGEST HOLDINGS AT SEPTEMBER 30, 2000 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Mack-Cali Realty Corp. 6.0%
OFFICE REIT
2. Essex Property Trust, Inc. 5.2%
APARTMENT REIT
3. Equity Office Properties Trust 5.0%
OFFICE REIT
4. Macerich Co. (The) 4.9%
REGIONAL MALL REIT
5. Equity Residential Properties Trust 4.9%
APARTMENT REIT
6. Reckson Associates Realty Corp. 4.9%
Series A Cv. Pfd. 7.625%
MIXED REIT
7. iStar Financial, Inc. 4.8%
DIVERSIFIED REIT
8. Glenborough Realty Trust, Inc. 4.6%
Series A Cv. Pfd. 7.75%
DIVERSIFIED REIT
9. Simon Property Group, Inc. 4.5%
REGIONAL MALL REIT
10. Manufactured Home Communities, Inc. 4.4%
MANUFACTURED HOMES REIT
</TABLE>
INVESTMENTS AT SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C> <C>
COMMON STOCKS--72.7%
REAL ESTATE INVESTMENT TRUSTS--58.9%
DIVERSIFIED--4.8%
iStar Financial, Inc.................... 40,200 $ 901,987
INDUSTRIAL/OFFICE--19.0%
INDUSTRIAL--0.9%
Bedford Property Investors, Inc......... 5,000 101,562
First Industrial Realty Trust, Inc...... 2,400 73,800
-----------
175,362
-----------
MIXED--0.5%
Reckson Associates Realty Corp.......... 3,600 91,800
OFFICE--17.6%
Arden Realty, Inc....................... 19,000 509,438
Equity Office Properties Trust.......... 30,445 945,698
Mack-Cali Realty Corp................... 40,100 1,130,319
Spieker Properties, Inc................. 12,500 719,531
-----------
3,304,986
-----------
-------------------------------------------------------------------
TOTAL INDUSTRIAL/ OFFICE 3,572,148
-------------------------------------------------------------------
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C> <C>
RESIDENTIAL--24.8%
APARTMENTS--16.6%
Archstone Communities Trust............. 27,996 $ 687,652
Avalonbay Communities, Inc.............. 10,750 512,641
Equity Residential Properties Trust..... 19,200 921,600
Essex Property Trust, Inc............... 17,750 982,906
-----------
3,104,799
-----------
MANUFACTURED HOMES--8.2%
Chateau Communities, Inc................ 26,400 707,850
Manufactured Home Communities, Inc...... 33,200 830,000
-----------
1,537,850
-----------
-------------------------------------------------------------------
TOTAL RESIDENTIAL 4,642,649
-------------------------------------------------------------------
RETAIL--10.3%
REGIONAL MALLS--10.3%
General Growth Properties, Inc.......... 5,000 160,938
Macerich Co. (The)...................... 43,400 922,250
Simon Property Group, Inc............... 36,115 846,445
-----------
1,929,633
-----------
-------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(IDENTIFIED COST $10,147,099) 11,046,417
-------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Phoenix-Seneca Real Estate Securities Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C> <C>
REAL ESTATE OPERATING COMPANIES--5.9%
DIVERSIFIED--2.6%
Northstar Capital Investment
Corp.(b)(c)............................. 35,000 $ 494,375
LODGING/RESORTS--3.3%
Starwood Hotels & Resorts Worldwide,
Inc..................................... 20,000 625,000
-------------------------------------------------------------------
TOTAL REAL ESTATE OPERATING COMPANIES
(IDENTIFIED COST $1,353,075) 1,119,375
-------------------------------------------------------------------
FINANCIAL (DIVERSIFIED)--0.0%
Freddie Mac
(Identified Cost $3,920)................ 90 4,866
TELECOMMUNICATIONS (LONG DISTANCE)--4.2%
Allied Riser Communications Corp.(b)
(Identified Cost $844,766).............. 118,000 781,750
TOBACCO--3.7%
Philip Morris Cos., Inc.
(Identified Cost $670,451).............. 23,400 688,837
-------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $13,019,311) 13,641,245
-------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS--9.5%
REAL ESTATE INVESTMENT TRUSTS--9.5%
DIVERSIFIED--4.6%
Glenborough Realty Trust, Inc. Series A
Cv. Pfd. 7.75%.......................... 50,950 866,150
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C> <C>
INDUSTRIAL/OFFICE--4.9%
MIXED--4.9%
Reckson Associates Realty Corp. Series A
Cv. Pfd. 7.625%......................... 39,000 $ 911,625
-------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(IDENTIFIED COST $1,864,227) 1,777,775
-------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $1,864,227) 1,777,775
-------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR
VALUE
(000)
--------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--20.1%
REPURCHASE AGREEMENT--20.1%
State Street Bank & Trust Co. repurchase
agreement, 4.25%, dated 9/29/00 due 10/2/00,
repurchase price $3,784,340 collateralized
by U.S. Treasury Bond 7.875%, 2/15/21,
market value $3,863,618..................... $ 3,783 3,783,000
-------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $3,783,000) 3,783,000
-------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS--102.3%
(IDENTIFIED COST $18,666,538) 19,202,020(a)
Cash and receivables, less liabilities--(2.3%) (435,256)
-------------
NET ASSETS--100.0% $ 18,766,764
=============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,566,989 and gross
depreciation of $1,045,699 for federal income tax purposes. At
September 30, 2000, the aggregate cost of securities for federal income tax
purposes was $18,680,730.
(b) Non-income producing.
(c) Private placement. Security valued at fair value as determined in good
faith by or under the direction of the Trustees.
28 See Notes to Financial Statements
<PAGE>
Phoenix-Seneca Real Estate Securities Fund
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Investment securities at value, exclusive of repurchase
agreements (Identified cost $14,883,538) $15,419,020
Repurchase agreements at value
(Identified cost $3,783,000) 3,783,000
Cash 345
Receivables
Dividends and interest 125,240
Deferred organization expenses 2,840
Prepaid expenses 315
-----------
Total assets 19,330,760
-----------
LIABILITIES
Payables
Investment securities purchased 473,946
Fund shares repurchased 13,848
Investment advisory fee 13,085
Transfer agent fee 12,352
Financial agent fee 4,306
Distribution fee 2,264
Trustees' fee 1,800
Accrued expenses 42,395
-----------
Total liabilities 563,996
-----------
NET ASSETS $18,766,764
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $20,689,030
Accumulated net realized loss (2,457,748)
Net unrealized appreciation 535,482
-----------
NET ASSETS $18,766,764
===========
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $16,713,125) 1,405,902
Net asset value and offering price per share $11.89
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,437,209) 123,158
Net asset value per share $11.67
Offering price per share $11.67/(1-5.75%) $12.38
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $286,953) 24,609
Net asset value and offering price per share $11.66
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $329,477) 28,262
Net asset value and offering price per share $11.66
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 833,530
Interest 55,901
-----------
Total investment income 889,431
-----------
EXPENSES
Investment advisory fee 147,176
Distribution fee, Class A 2,650
Distribution fee, Class B 1,985
Distribution fee, Class C 2,330
Financial agent fee 55,998
Transfer agent 72,933
Registration 29,155
Professional 26,138
Trustees 13,190
Printing 10,900
Amortization of deferred organization expenses 10,687
Custodian 5,410
Miscellaneous 11,688
-----------
Total expenses 390,240
Less expenses borne by investment adviser (59,039)
-----------
Net expenses 331,201
-----------
NET INVESTMENT INCOME 558,230
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (1,794,018)
Net change in unrealized appreciation (depreciation) on
investments 5,626,649
-----------
NET GAIN ON INVESTMENTS 3,832,631
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,390,861
===========
</TABLE>
See Notes to Financial Statements 29
<PAGE>
Phoenix-Seneca Real Estate Securities Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
9/30/00 9/30/99
----------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 558,230 $ 940,282
Net realized gain (loss) (1,794,018) (655,001)
Net change in unrealized appreciation
(depreciation) 5,626,649 (1,715,439)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,390,861 (1,430,158)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (729,733) (837,674)
Net investment income, Class A (39,774) (38,060)
Net investment income, Class B (4,505) (4,962)
Net investment income, Class C (6,833) (3,646)
Net realized gains, Class X -- (499,713)
Net realized gains, Class A -- (30,097)
Net realized gains, Class B -- (4,310)
Net realized gains, Class C -- (2,368)
In excess of net investment income,
Class X (23,313) --
In excess of net investment income,
Class A (1,271) --
In excess of net investment income,
Class B (144) --
In excess of net investment income,
Class C (218) --
----------- -----------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (805,791) (1,420,830)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (57,569
and 210,923 shares, respectively) 568,135 2,123,311
Net asset value of shares issued from
reinvestment of distributions
(77,067 and 132,293 shares,
respectively) 737,936 1,320,535
Cost of shares repurchased (518,701
and 515,264 shares, respectively) (5,199,801) (5,249,668)
----------- -----------
Total (3,893,730) (1,805,822)
----------- -----------
CLASS A
Proceeds from sales of shares (70,000
and 21,611 shares, respectively) 713,131 225,249
Net asset value of shares issued from
reinvestment of distributions
(4,054 and 6,494 shares,
respectively) 37,795 64,196
Cost of shares repurchased (47,145 and
55,264 shares, respectively) (460,947) (559,210)
----------- -----------
Total 289,979 (269,765)
----------- -----------
CLASS B
Proceeds from sales of shares (13,355
and 11,520 shares, respectively) 133,190 120,191
Net asset value of shares issued from
reinvestment of distributions
(492 and 933 shares, respectively) 4,648 9,271
Cost of shares repurchased (9,914 and
0 shares, respectively) (91,088) --
----------- -----------
Total 46,750 129,462
----------- -----------
CLASS C
Proceeds from sales of shares (7,999
and 12,513 shares, respectively) 85,428 124,671
Net asset value of shares issued from
reinvestment of distributions
(687 and 589 shares, respectively) 6,383 5,859
Cost of shares repurchased (1,379 and
125 shares, respectively) (15,139) (1,280)
----------- -----------
Total 76,672 129,250
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (3,480,329) (1,816,875)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS 104,741 (4,667,863)
NET ASSETS
Beginning of period 18,662,023 23,329,886
----------- -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME
(LOSS) OF $0 AND $223,188,
RESPECTIVELY] $18,766,764 $18,662,023
=========== ===========
</TABLE>
30 See Notes to Financial Statements
<PAGE>
Phoenix-Seneca Real Estate Securities Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS X
------------------------------------------------------------------
FROM
YEAR ENDED SEPTEMBER 30, INCEPTION
-------------------------------------------------- 3/12/96 TO
2000 1999 1998 1997 9/30/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.69 $ 11.11 $ 14.71 $ 11.10 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.34(1) 0.47(1) 0.54 0.13 0.13
Net realized and unrealized gain (loss) 2.35 (1.20) (3.10) 3.77 1.10
-------- -------- -------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 2.69 (0.73) (2.56) 3.90 1.23
-------- -------- -------- -------- -------
LESS DISTRIBUTIONS
Dividends from net investment income (0.47) (0.44) (0.46) (0.28) (0.13)
Dividends from net realized gains -- (0.25) (0.58) (0.01) --
In excess of net investment income (0.02) -- -- -- --
-------- -------- -------- -------- -------
TOTAL DISTRIBUTIONS (0.49) (0.69) (1.04) (0.29) (0.13)
-------- -------- -------- -------- -------
Change in net asset value 2.20 (1.42) (3.60) 3.61 1.10
-------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 11.89 $ 9.69 $ 11.11 $ 14.71 $ 11.10
======== ======== ======== ======== =======
Total return 29.00% (6.66)% (18.33)% 35.44% 12.39%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $16,713 $17,346 $21,794 $28,193 $1,073
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.79% 1.66% 1.47% 1.99%(5) 1.00%(3)(5)
Net investment income (loss) 3.35% 4.50% 4.14% 2.38% 4.39%(3)
Portfolio turnover 65% 5% 53% 75.68% 30.70%(4)
</TABLE>
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------
FROM
YEAR ENDED SEPTEMBER 30, INCEPTION
---------------------------------------------------- 3/12/96 TO
2000 1999 1998 1997 9/30/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.54 $ 11.00 $ 14.68 $ 11.08 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.21(1) 0.32(1) 0.35 0.03 0.13
Net realized and unrealized gain (loss) 2.30 (1.19) (3.08) 3.78 1.08
-------- -------- -------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 2.51 (0.87) (2.73) 3.81 1.21
-------- -------- -------- -------- -------
LESS DISTRIBUTIONS
Dividends from net investment income (0.37) (0.34) (0.37) (0.20) (0.13)
Dividends from net realized gains -- (0.25) (0.58) (0.01) --
In excess of net investment income (0.01) -- -- -- --
-------- -------- -------- -------- -------
TOTAL DISTRIBUTIONS (0.38) (0.59) (0.95) (0.21) (0.13)
-------- -------- -------- -------- -------
Change in net asset value 2.13 (1.46) (3.68) 3.60 1.08
-------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 11.67 $ 9.54 $ 11.00 $ 14.68 $ 11.08
======== ======== ======== ======== =======
Total return(2) 27.40% (7.97)% (19.52)% 34.54% 12.22%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,437 $919 $1,357 $3,176 $222
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 3.05%(6) 3.05%(6) 2.76% 2.91%(6) 1.65%(3)(6)
Net investment income (loss) 2.11% 3.13% 2.45% 1.37% 4.61%(3)
Portfolio turnover 65% 5% 53% 75.68% 30.70%(4)
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charge is not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.99% and
53.04% for the periods ended September 30, 1997 and 1996, respectively.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 4.28%,
4.27%, 3.79% and 73.01% for the periods ended September 30, 2000, 1999,
1997 and 1996, respectively.
See Notes to Financial Statements 31
<PAGE>
Phoenix-Seneca Real Estate Securities Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
---------------------------------------
YEAR ENDED FROM
SEPTEMBER 30, INCEPTION
--------------------- 7/1/98 TO
2000 1999 9/30/98
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.55 $11.01 $12.58
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.12(1) 0.29(1) 0.07
Net realized and unrealized gain 2.31 (1.22) (1.58)
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.43 (0.93) (1.51)
------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.31) (0.28) (0.06)
Dividends from net realized gains -- (0.25) --
In excess of net investment income (0.01) -- --
------ ------ ------
TOTAL DISTRIBUTIONS (0.32) (0.53) (0.06)
------ ------ ------
Change in net asset value 2.11 (1.46) (1.57)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.66 $ 9.55 $11.01
====== ====== ======
Total return(2) 26.37% (8.59)% (11.97)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $287 $197 $91
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 3.80% 3.80% 3.80%(3)
Net investment income (loss) 1.19% 2.79% 2.50%(3)
Portfolio turnover 65% 5% 53%(4)
</TABLE>
<TABLE>
<CAPTION>
CLASS C
---------------------------------------
YEAR ENDED FROM
SEPTEMBER 30, INCEPTION
--------------------- 7/1/98 TO
2000 1999 9/30/98
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.55 $11.01 $12.58
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.14(1) 0.29(1) 0.07
Net realized and unrealized gain 2.29 (1.22) (1.58)
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.43 (0.93) (1.51)
------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.31) (0.28) (0.06)
Dividends from net realized gains -- (0.25) --
In excess of net investment income (0.01) -- --
------ ------ ------
TOTAL DISTRIBUTIONS (0.32) (0.53) (0.06)
------ ------ ------
Change in net asset value 2.11 (1.46) (1.57)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.66 $ 9.55 $11.01
====== ====== ======
Total return(2) 26.37% (8.58)% (11.97)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $329 $200 $88
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(6) 3.80% 3.80% 3.80%(3)
Net investment income (loss) 1.36% 2.80% 2.44%(3)
Portfolio turnover 65% 5% 53%(4)
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charge is not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 15.48%,
18.50% and 22.08% for the periods ended September 30, 2000, 1999 and 1998,
respectively.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 13.58%,
19.95% and 22.93% for the periods ended September 30, 2000, 1999 and 1998,
respectively.
32 See Notes to Financial Statements
<PAGE>
PHOENIX-SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
The Phoenix-Seneca Funds (the "Trust") is organized as a Delaware business
trust and is registered under the Investment Company Act of 1940, as amended, as
an open end management investment company. Shares of the Trust are divided into
three series, each a "Fund" and collectively the "Funds" as follows:
Phoenix-Seneca Bond Fund, Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund and
Phoenix-Seneca Real Estate Securities Fund. Each Fund has distinct investment
objectives. Bond Fund seeks to generate a high level of current income and
capital appreciation. Mid-Cap "EDGE"-SM- Fund seeks to achieve long-term capital
appreciation by investing primarily in a diversified portfolio of equity
securities of companies with market capitalizations between $500 million and $5
billion. Real Estate Securities Fund seeks to emphasize capital appreciation and
income equally by investing primarily in marketable securities of
publicly-traded real estate investment trusts (REITS) and companies that invest
in, operate, develop and/or manage real estate located in the United States.
Each Fund offers Class X (formerly Seneca Institutional), Class A (formerly
Seneca Administrative), Class B and Class C shares. Class X shares are sold
without a sales charge. Class A shares of Bond Fund are sold with a front-end
sales charge of up to 4.75%. Effective April 3, 2000 Class A shares of Mid-Cap
"EDGE" Fund and Real Estate Securities Fund are sold with a front-end sales
charge of up to 5.75%. Prior to that date, the rate was 4.75%. Class B shares
are sold with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Class C shares are sold
with a 1% contingent deferred sales charge if redeemed within one year of
purchase. All classes of shares have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that Class A, Class B and
Class C shares bear distribution expenses and have exclusive voting rights with
respect to their distribution plans. Investment income and realized and
unrealized gains/losses are allocated among the classes on the basis of net
assets of each class.
The following is a summary of significant accounting policies consistently
followed by the Trust 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 mean between the most recent high bid and the most recent
low asked quotations. 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 Fund is notified. Interest income is recorded on the accrual
basis. The Trust amortizes premiums and discounts using the effective interest
method. Realized gains and losses are determined on the identified cost basis.
C. INCOME TAXES:
Each Fund is treated as a separate taxable entity. It is the policy of each
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 Fund 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 Fund 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, market
discount, organization costs, expiring capital loss carryforwards, foreign
currency gain/loss, partnerships, operating losses 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 and 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 Trust does not
33
<PAGE>
PHOENIX-SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 (CONTINUED)
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 Fund may enter into forward currency contracts in conjunction with the
planned purchase or sale of foreign denominated securities in order to hedge the
U.S. dollar cost or proceeds. Forward currency contracts involve, to varying
degrees, elements of market risk in excess of the amount recognized in the
statement of assets and liabilities. Risks arise from the possible movements in
foreign exchange rates or if the counterparty does not perform under the
contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in market
value is recorded by each Fund as an unrealized gain (or loss). When the
contract is closed or offset with the same counterparty, the Fund 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. OPTIONS:
Each Fund 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 Fund 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 Fund may purchase options which are included in the Funds' 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.
H. ORGANIZATION EXPENSE:
In 1996, the Trust incurred organizational expenses which are amortized on a
straight line basis over a period of sixty months from the commencement of
operations. If any of the initial shares are redeemed before the end of the
amortization period, the proceeds of the redemption will be reduced by the pro
rata share of unamortized organization expenses.
I. EXPENSES:
Trust expenses not directly attributable to a specific Fund are allocated
evenly among all funds. Fund expenses that are not related to the distribution
of shares of a particular class or to services provided specifically to a
particular class are allocated among the classes on the basis of relative
average daily net assets of each class. Expenses that relate to the distribution
of shares or services provided to a particular class are allocated to that
class.
J. REPURCHASE AGREEMENTS:
A repurchase agreement is a transaction where a Fund acquires a security for
cash and obtains a simultaneous commitment from the seller to repurchase the
security at an agreed upon price and date. Each Fund, through its custodian,
takes possession of securities collateralizing the repurchase agreement. The
collateral is marked-to-market daily to ensure that the market value of the
underlying assets remains sufficient to protect the Fund in the event of default
by the seller. If the seller defaults and the value of the collateral declines,
or if the seller enters insolvency proceedings, realization of collateral may be
delayed or limited.
K. WHEN-ISSUED AND DELAYED TRANSACTIONS:
Each Fund may engage in when-issued or delayed delivery transactions. Each
Fund records when-issued securities on the trade date and maintains collateral
for the securities purchased. Securities purchased on when-issued or delayed
delivery basis begin earning interest on the settlement date.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
Phoenix Investment Counsel, Inc, ("PIC" or the "Adviser") serves as investment
adviser to the Phoenix-Seneca Funds and Seneca Capital Management LLC ("Seneca"
or the "Subadviser") serves as investment subadviser. All of the outstanding
stock of PIC and a majority of the equity interests of Seneca are owned by
Phoenix Investment Partners Ltd. ("PXP"), an indirect, majority-owned subsidiary
of Phoenix Home Life Mutual Insurance Company ("PHL"). As compensation for
services
34
<PAGE>
PHOENIX-SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 (CONTINUED)
to the Trust, the adviser receives a fee based upon the following annual rates
as a percentage of the average daily net assets of each Fund:
<TABLE>
<CAPTION>
Adviser
Fee
-------
<S> <C>
Bond Fund............................... 0.50%
Mid-Cap "EDGE"-SM- Fund................. 0.80%
Real Estate Securities Fund............. 0.85%
</TABLE>
The Adviser pays the Subadviser a fee equal to one half of the Adviser fee.
Phoenix Equity Planning Corporation ("PEPCO"), a direct subsidiary of PXP,
serves as Administrator of the Trust. 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. For the year ended September 30, 2000, financial agent fees were
$219,695, of which PEPCO received $124,440. The current fee schedule of PFPC
Inc. ranges from 0.085% to 0.0125% of the average daily net asset values of the
Trust. Certain minimum fees and fee waivers may apply.
The Adviser voluntarily agreed to waive or reimburse each Fund's operating
expenses until January 31, 2001, to the extent that such expenses exceed the
following percentages of average annual net assets:
<TABLE>
<CAPTION>
Class X Class A Class B Class C
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Bond Fund............................... 0.90% 1.15% 1.90% 1.90%
Mid-Cap "EDGE"-SM- Fund................. 1.15% 1.40% 2.15% 2.15%
Real Estate Securities Fund............. 2.35% 3.05% 3.80% 3.80%
</TABLE>
Prior to January 28, 2000, the Adviser voluntarily agreed to waive or
reimburse the Mid-Cap "EDGE"-SM- Fund's operating expenses until January 31,
2001 to the extent that such expenses exceeded the following percentages of
average annual net assets: 2.10% for Class X, 2.70% for Class A and 3.45% for
Class B and Class C.
PEPCO serves as the national distributor of the Trust's shares and has advised
the Trust that it retained net selling commissions of $31,444 for Class A shares
for the year ended September 30, 2000. Deferred sales charges retained by PEPCO
for the year ended September 30, 2000 were $25,990 for Class B shares and $2,063
for Class C shares. In addition, each Fund pays PEPCO a distribution fee at an
annual rate of 0.25% for Class A shares and 1.00% for Class B and C shares
applied to the average daily net assets of each Fund. The distributor has
advised the Trust that of the total amount expensed for the year ended
September 30, 2000, $198,932 was retained by the Distributor, $56,486 was paid
out to unaffiliated Participants and $4,561 was paid to W.S. Griffith, an
indirect subsidiary of PHL.
PEPCO serves as the Trust's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the year ended September 30, 2000, transfer
agent fees were $241,924 of which PEPCO retained $1,088 which is net of fees
paid to State Street.
At September 30, 2000, PHL and affiliates held Phoenix-Seneca Fund shares
which aggregated the following:
<TABLE>
<CAPTION>
Aggregate
Net Asset
Shares Value
---------- -----------
<S> <C> <C>
Bond Fund--Class X...................... 1,616,138 $16,419,962
Bond Fund--Class A...................... 10,794 109,127
Bond Fund--Class B...................... 10,679 107,217
Bond Fund--Class C...................... 10,663 107,270
Mid-Cap "EDGE"-SM- Fund--Class B........ 6,646 199,978
Mid-Cap "EDGE"-SM- Fund--Class C........ 6,646 199,912
Real Estate Securities Fund--Class B.... 8,680 101,209
Real Estate Securities Fund--Class C.... 8,680 101,209
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended September 30, 2000
(excluding U.S. Government and agency securities and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
-------------- --------------
<S> <C> <C>
Bond Fund............................... $ 23,612,744 $16,299,747
Mid-Cap "EDGE"-SM- Fund................. 118,461,516 64,470,501
Real Estate Securities Fund............. 10,479,192 16,993,696
</TABLE>
Purchases and sales of long-term U.S. Government and agency securities during
the year ended September 30, 2000, aggregated $18,152,582 and $15,401,103,
respectively, for the Bond Fund.
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 prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
High yield-high risk securities 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
35
<PAGE>
PHOENIX-SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 (CONTINUED)
time. Analysis of the creditworthiness of issuers of high yield securities may
be complex, and as a result, it may be more difficult for the subadviser to
accurately predict risk.
5. OTHER
As of September 30, 2000, the Funds had shareholders who each individually
owned more than 10% of total net assets, 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>
Real Estate Securities Fund............. 2 39.7%
</TABLE>
6. CAPITAL LOSS CARRYOVERS
At September 30, 2000, the following funds have capital loss carryovers which
may be used to offset future capital gains.
<TABLE>
<CAPTION>
Real Estate
Expiration Date Bond Fund Securities Fund
--------------- --------- ---------------
<S> <C> <C>
2008.................................... $314 $1,109,072
2007.................................... -- 24,701
</TABLE>
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal year.
For the year ended September 30, 2000, the Bond Fund and the Real Estate
Securities Fund deferred capital losses of $185,546 and $1,309,782,
respectively.
For the year ended September 30, 2000, the Real Estate Securities Fund
utilized prior year capital losses deferred of $639,028.
7. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Funds have recorded
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of each of the Funds 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 September 30, 2000,
the Funds recorded the following reclassifications to increase (decrease) the
accounts listed below:
<TABLE>
<CAPTION>
Capital paid
Undistributed Accumulated in on shares
net investment net realized of beneficial
income gain (loss) interest
-------------- ------------ -------------
<S> <C> <C> <C>
Bond Fund............................... $ 7,086 $ (7,951) $ 865
Mid-Cap "EDGE"-SM- Fund................. 584,583 (585,486) 903
Real Estate Securities Fund............. 24,373 -- (24,373)
</TABLE>
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended September 30, 2000, the Funds distributed long-term
capital gain dividends as follows:
<TABLE>
<S> <C>
Bond Fund............................... $ 59,059
Mid-Cap "EDGE"-SM- Fund................. 968,619
</TABLE>
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective Prospectus which includes information
concerning the sales charge, the Trust's record and other pertinent information.
36
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Trustees and Shareholders of
Phoenix-Seneca Funds:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, 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 Phoenix-Seneca Bond Fund,
Phoenix-Seneca Mid-Cap "EDGE" Fund and Phoenix-Seneca Real Estate Securities
Fund (constituting Phoenix-Seneca Funds, hereinafter referred to as the "Fund")
at September 30, 2000, and 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 the three years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America. 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 of America, 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 September 30, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The financial highlights of the Funds, formerly Seneca Funds, for
the period ended September 30, 1996 and the year ended September 30, 1997 were
audited by other independent accountants whose report dated November 5, 1997
expressed an unqualified opinion on those statements.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
November 14, 2000
37
<PAGE>
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
A special meeting of Shareholders of the Phoenix-Seneca Funds was held on
September 14, 2000 to approve the following matters:
1. Amend the fundamental investment restrictions regarding diversification
(Phoenix-Seneca Bond Fund and Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund
only).
2. Amend the fundamental investment restriction regarding industry
concentration (Phoenix-Seneca Bond Fund and Phoenix-Seneca Mid-Cap
"EDGE"(SM) Fund only).
3. Amend the fundamental investment restriction for each of the Funds
regarding borrowing.
4. Amend the fundamental investment restriction for each of the Funds
regarding the issuance of senior securities.
5. Amend the fundamental investment restriction for each of the Funds
regarding underwriting.
6. Amend the fundamental investment restriction for each of the Funds
regarding investing in real estate.
7. Amend the fundamental investment restriction for each of the Funds
regarding commodities.
8. Amend the fundamental investment restriction for each of the Funds
regarding lending.
9. Amend the fundamental investment restriction for each of the Funds
regarding the purchase of securities on margin.
10. Approve a new rule 12b-1 Distribution Plan for Class B Shares.
11. Approve a new rule 12b-1 Distribution Plan for Class C Shares.
On the record date for this meeting, the shares outstanding and percentage of
the shares outstanding and entitled to vote that were present by proxy were as
follows:
<TABLE>
<CAPTION>
CLASS OF SHARES SHARES OUTSTANDING PERCENTAGE PRESENT BY PROXY
--------------- ------------------ ---------------------------
<S> <C> <C>
Phoenix-Seneca Bond Fund 48,049,788 77.01%
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund 80,749,858 67.40%
Phoenix-Seneca Funds 146,073,092 70.08%
Phoenix-Seneca Bond Fund Class B 2,535,684 54.94%
Phoenix-Seneca Bond Fund Class C 1,607,228 75.53%
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
Class B 10,746,866 88.27%
Phoenix-Seneca Mid-Cap "EDGE"-SM- Fund
Class C 12,933,186 86.42%
Phoenix-Seneca Real Estate Securities
Fund Class B 263,347 73.12%
Phoenix-Seneca Real Estate Securities
Fund Class C 281,316 58.09%
</TABLE>
38
<PAGE>
NUMBER OF VOTES
<TABLE>
<CAPTION>
DELIVERED
FOR AGAINST ABSTAIN NOT VOTED
---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
1. Amend the fundamental investment
restrictions regarding diversification
(Bond Fund and Mid-Cap "EDGE"-SM- Fund
only). 76,256,039 369,280 1,185,968 13,616,700
2. Amend the fundamental investment
restriction regarding industry
concentration (Bond Fund and Mid-Cap
"EDGE"-SM- Fund only). 76,175,993 437,170 1,198,124 13,616,700
3. Amend the fundamental investment
restriction for each of the Funds
regarding borrowing. 86,350,324 834,405 1,470,258 13,717,433
4. Amend the fundamental investment
restriction for each of the Funds
regarding the issuance of senior
securities. 86,905,850 602,675 1,146,462 13,717,433
5. Amend the fundamental investment
restriction for each of the Funds
regarding underwriting. 86,976,528 589,607 1,088,852 13,717,433
6. Amend the fundamental investment
restriction for each of the Funds
regarding investing in real estate. 86,906,512 626,763 1,121,712 13,717,433
7. Amend the fundamental investment
restriction for each of the Funds
regarding commodities. 86,374,048 1,018,602 1,262,337 13,717,433
8. Amend the fundamental investment
restriction for each of the Funds
regarding lending. 86,704,848 772,009 1,178,130 13,717,433
9. Amend the fundamental investment
restriction for each of the Funds
regarding the purchase of securities on
margin. 85,885,195 1,491,381 1,278,411 13,717,433
10. Approve a new Rule 12b-1 Distribution
Plan for Class B Shares.
Phoenix-Seneca Bond Fund Class B 1,327,265 10,239 55,533 N/A
Phoenix-Seneca Mid-Cap "EDGE"-SM-
Fund Class B 9,031,357 309,816 145,045 N/A
Phoenix-Seneca Real Estate Securities
Fund Class B 174,632 9,692 8,237 N/A
11. Approve a new Rule 12b-1 Distribution
Plan for Class C Shares.
Phoenix-Seneca Bond Fund Class C 1,213,891 0 0 N/A
Phoenix-Seneca Mid-Cap "EDGE"-SM-
Fund Class C 10,923,125 5,068 248,913 N/A
Phoenix-Seneca Real Estate Securities
Fund Class C 152,084 0 11,328 N/A
</TABLE>
39
<PAGE>
PHOENIX-SENECA FUNDS
909 Montgomery Street
San Francisco, California 94133
TRUSTEES AND OFFICERS
Robert Chesek, Trustee
E. Virgil Conway, Trustee
William W. Crawford, Trustee
Harry Dalzell-Payne, Trustee
William N. Georgeson, Trustee
Francis E. Jeffries, Trustee
Leroy Keith, Jr., Trustee
Eileen A. Moran, Trustee
Everett L. Morris, Trustee
James M. Oates, Trustee
Richard A. Pavia, Trustee
Herbert Roth, Jr., Trustee
Richard E. Segerson, Trustee
Lowell P. Weicker, Jr., Trustee
Philip R. McLoughlin, Chairman and Trustee
Gail P. Seneca, President
Thomas N. Steenburg, Secretary
Sandra J. Monticelli, Treasurer
INVESTMENT ADVISER
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
SUBADVISER
Seneca Capital Management LLC
909 Montgomery Street
San Francisco, California 94133
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
State Street Bank and Trust Company
P. O. Box 351
Boston, Massachusetts 02101
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
www.phoenixinvestments.com
<PAGE>
Phoenix Equity Planning Corporation
PO Box 2200
Enfield CT 06083-2200
PHOENIX
INVESTMENT PARTNERS
PRSRT STD
U.S. Postage
PAID
Andrew
Associates
PXP 1140 (11/00)
