As filed with the Securities and Exchange Commission on August 27, 1996
Registration No. 333-5039
File No. 811-7643
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. 1 [x]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 1 [x]
(Check appropriate box or boxes)
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Phoenix-Aberdeen Series Fund
(Exact Name of Registrant as Specified in Charter)
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101 Munson Street, Greenfield, Massachusetts
01301
(Address of Principal Executive Offices)
(Zip Code)
(800) 243-1574
(Registrant's Telephone Number, including Area Code)
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Philip R. McLoughlin
Vice Chairman and Chief Executive Officer
Phoenix Duff & Phelps Corporation
56 Prospect Street
Hartford, Connecticut 06115-0479
(name and address of Agent for Service)
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Approximate Date of Proposed Public Offering: It is proposed that this
filing will become effective on September 3, 1996.
The Registrant hereby amends this Registration Statement on such date(s)
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration Statement shall
become effective on such date that the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
Declaration Pursuant to Rule 24f-2: Registrant hereby registers an
indefinite number of shares of beneficial interest, $1 par value, under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940 for the Registrant's fiscal year ended March 31, 1997.
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<PAGE>
PHOENIX-ABERDEEN SERIES FUND
Cross Reference Sheet Pursuant to Rule 495
Under the Securities Act of 1933
PART A
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Form N-1A Item Prospectus Caption
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<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Fund Expenses
3. Financial Highlights Not Applicable
4. General Description of Registrant Cover Page, Introduction, Investment
Objectives and Policies, Investment
Techniques and Related Risks, Investment
Restrictions, and Additional Information
5. Management of the Fund Fund Expenses and Management of the Fund
6. Capital Stock and Other Securities Distribution Plans, How to Buy Shares,
Dividends, Distributions and Taxes, and
Additional Information
7. Purchase of Securities Being Offered Fund Expenses, Distribution Plans, How to
Buy Shares and Net Asset Value
8. Redemption or Repurchase Fund Expenses and How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
</TABLE>
PART B
<TABLE>
<CAPTION>
Form N-1A Item SAI Caption
- ----------------------------------------------------- ---------------------------------------------
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History The Fund
13. Investment Objective and Policies Investment Objectives and Policies and
Investment Restrictions
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Holders of Trustees and Officers
Securities
16. Investment Advisory and Other Services Services of the Adviser, Distribution Plans
and Other Information
17. Brokerage Allocation Portfolio Transactions and Brokerage
18. Capital Stock and Other Securities The Fund
19. Purchase, Redemption and Pricing of Net Asset Value, How to Buy Shares,
Securities Being Offered Exchange Privileges, Redemption of Shares,
and Dividends, Distributions and Taxes
20. Tax Status Dividends, Distributions and Taxes
21. Underwriters The Distributor
22. Calculation of Performance Data Performance Information
23. Financial Statements Not Applicable
</TABLE>
PART C
Information required to be included in Part C is set forth in under the
appropriate
Item, so numbered, in Part C of the Registration Statement.
<PAGE>
PHOENIX
ABERDEEN
PROSPECTUS
AUGUST 28, 1996
Phoenix Aberdeen Series Fund
[Logo] PHOENIX
DUFF & PHELPS
<PAGE>
PHOENIX-ABERDEEN SERIES FUND
101 Munson Street
Greenfield, MA 01301
PROSPECTUS
September 3, 1996
Phoenix-Aberdeen Series Fund (the "Fund") is an open- end management
investment company whose shares are offered in separate series. Each series
generally operates as a separate fund with its own investment objective and
policies designed to meet specific investment goals. There can be no
assurance that any series will achieve its investment objectives.
Phoenix-Aberdeen New Asia Fund (the "New Asia Series") seeks as its
investment objective long term capital appreciation. It is intended that this
Series will invest primarily in a diversified portfolio of equity securities
of issuers located in at least three different countries throughout Asia
other than Japan.
Phoenix-Aberdeen Global Small Cap Fund (the "Global Series") seeks as its
investment objective long-term capital appreciation. It is intended that this
Series will invest primarily in a globally diversified portfolio of equity
securities of small and medium sized companies.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. No dealer, salesperson or
other person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and, if given
or made, such other information or representations must not be relied upon as
having been authorized by the Fund, Adviser, or Distributor. This Prospectus
does not constitute an offer to sell or solicitation of an offer to buy any
of the securities offered hereby in any state in which, or to any person
whom, it is unlawful to make such offer. Neither the delivery of this
Prospectus nor any sale hereunder shall, under any circumstances, create any
implication that information herein is correct at any time subsequent to its
date. Investors should read and retain this Prospectus for future reference.
Additional information about the Fund is contained in the Statement of
Additional Information dated September 3, 1996 which has been filed with the
Securities and Exchange Commission and is available at no charge by calling
(800) 243- 4361 or by writing to Phoenix Equity Planning Corporation, at 100
Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut 06083-2200. The
Statement of Additional Information is incorporated herein by reference.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, credit union or affiliated entity and are not
federally insured or otherwise protected by the Federal Deposit Insurance
Corporation (FDIC), the Federal Reserve Board or any other agency and involve
investment risk including the possible loss of principal.
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LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMIS- SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS/EXCHANGES: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY) (800) 243-1926
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
INTRODUCTION 3
FUND EXPENSES 4
PERFORMANCE INFORMATION 5
INVESTMENT OBJECTIVES AND POLICIES 5
INVESTMENT TECHNIQUES AND RELATED RISKS 8
INVESTMENT RESTRICTIONS 10
MANAGEMENT OF THE FUND 11
DISTRIBUTION PLANS 12
HOW TO BUY SHARES 13
NET ASSET VALUE 19
HOW TO REDEEM SHARES 19
DIVIDENDS, DISTRIBUTIONS AND TAXES 20
ADDITIONAL INFORMATION 21
</TABLE>
2
<PAGE>
INTRODUCTION
This Prospectus describes the shares offered by and the operations of
Phoenix-Aberdeen Series Fund (the "Fund"). The Fund is an open-end management
investment company established as a business trust under the laws of the
Commonwealth of Massachusetts by an Agreement and Declaration of Fund dated
May 31, 1996 (the "Declaration of Trust"). The Declaration of Trust
authorizes the assets and shares of the Fund to be divided into series (the
"Series"). Each Series has a different investment objective and invests
primarily in certain types of securities, as described on the cover page of
this Prospectus, and is designed to meet different investment needs.
Investment Adviser
The Fund is managed by Phoenix-Aberdeen International Advisors, LLC (the
"Adviser"). The Adviser is a joint venture between PM Holdings, Inc., a
direct subsidiary of Phoenix Home Life Mutual Insurance Company ("Phoenix
Home Life"), and Aberdeen Fund Managers, Inc., a wholly-owned subsidiary of
Aberdeen Trust plc. The Adviser is entitled to a monthly management fee at an
annual rate of .85% of the average aggregate daily net asset values of the
New Asia Series and Global Series. See "Management of the Fund" for a
description of the Investment Advisory Agreement, management fees and the
Adviser's undertaking to reimburse the Fund for certain expenses.
Distributor and Distribution Plans
Phoenix Equity Planning Corporation ("Equity Planning" or "Distributor"),
serves as national distributor of the Fund's shares. See "Distribution Plans"
and the Statement of Additional Information. Equity Planning also acts as
financial agent of the Fund and as such receives a quarterly fee based on the
average of the aggregate daily net asset values of the Fund at an annual rate
of $300 per $1 million. Equity Planning also serves as the Fund's transfer
agent.
The Fund has adopted distribution plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, (the "1940 Act") for all classes
of each Series. Pursuant to the Class A distribution plan, amounts not
exceeding 0.25% annually of the average daily net assets of Class A Shares of
each Series may be reimbursed to Equity Planning to finance the distribution
of Class A Shares and for furnishing shareholder services. Pursuant to the
Class B distribution plan, amounts not exceeding 1.00% annually of the
average daily net assets of Class B Shares of each Series may be reimbursed
to Equity Planning to finance the distribution of Class B Shares and for
furnishing shareholder services. See "Distribution Plans".
Purchase of Shares
The Fund offers two classes of shares of each Series which may be purchased
at a price equal to their net asset value per share, plus a sales charge
which, at the election of the purchaser, may be imposed (i) at the time of
purchase ("Class A Shares") or (ii) on a contingent deferred basis ("Class B
Shares"). Completed applications for the purchase of shares should be mailed
to the Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box 8301,
Boston, MA 02266-8301.
Class A Shares are offered to the public at the next determined net asset
value after receipt of the order by State Street Bank and Trust Company, plus
a maximum sales charge of 4.75% of the offering price (4.99% of the amount
invested) on single purchases of less than $50,000. The sales charge for
Class A Shares is reduced on a graduated scale on single purchases of $50,000
or more and subject to other conditions stated below. See "How to Buy
Shares", "How to Obtain Reduced Sales Charges--Class A Shares" and "Net Asset
Value."
Class B Shares are offered to the public at the next determined net asset
value after receipt of an order by State Street Bank and Trust Company with
no sales charge. Class B Shares are subject to a sales charge if they are
redeemed within five years of purchase. See "How to Buy Shares" and "Deferred
Sales Charge Alternative--Class B Shares."
Shares of each class represent an identical interest in the investment
portfolio of that Series and have the same rights, except that Class B Shares
bear the cost of higher distribution fees and certain other expenses
resulting from the deferred sales charge arrangements, which cause Class B
Shares to have a higher expense ratio and to pay lower dividends than Class A
Shares. See "How to Buy Shares."
Minimum Initial and Subsequent Investments
The minimum initial investment is $500 ($25 if using the bank draft investing
program designated "Investo-Matic") and the minimum subsequent investment is
$25. Exceptions to the minimum and subsequent investment amounts for a Series
are available under specific circumstances. See "How to Buy Shares".
Redemption Price
Class A Shares may be redeemed at any time at the net asset value per share
next computed after receipt of a redemption request by Equity Planning, the
Fund's transfer agent. Class B shareholders redeeming shares within five
years of the date of purchase will normally be assessed a contingent deferred
sales charge. See "How to Redeem Shares".
Risk Factors
There can be no assurance that any Series will achieve its investment
objectives. The Adviser has been recently formed and has no prior operating
history. In addition, special risks may be presented by the particular types
of securities in which a Series may invest. As a result of a Series'
investment in securities of foreign issuers, and, in particular, issuers
located in specific areas of the globe, Series assets may be highly
susceptible to economic, political and currency changes affecting securities
of such issuers. The securities markets of emerging market countries in which
certain issuers may be located are substantially smaller, less developed,
less liquid, and more volatile than the securities markets of the United
States and other more developed countries. The risk factors relevant to
investment in each Series should be reviewed and are set forth in the
"Investment Objectives and Policies" and "Investment Techniques and Related
Risks" sections of this Prospectus and Statement of Additional Information.
3
<PAGE>
FUND EXPENSES
The following table illustrates all pro-forma expenses and fees that a
shareholder is expected to incur.
<TABLE>
<CAPTION>
New Asia Series Global Series
------------------------------- --------------------------------
Class A Class B Class A Class B
Shares Shares Shares Shares
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on
Purchases (as a percentage of
offering price) 4.75% None 4.75% None
Maximum Sales Load Imposed on
Reinvested Dividends None None None None
Deferred Sales Load (as a None 5% during None 5% during the
percentage of original purchase the first first year,
price or redemption proceeds, as year, decreasing 1%
applicable) decreasing annually to
1% annually 2% during the
to 2% during fourth and
the fourth fifth years;
and fifth dropping to
years; 0% after the
dropping to fifth year
0% after the
fifth year
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating
Expenses (a)
(as a percentage of average net
assets):
Management Fees 0.85% 0.85% 0.85% 0.85%
12b-1 Fees (b) 0.25% 1.00% 0.25% 1.00%
Other Operating Expenses (After
Reimbursement) 1.00% (c) 1.00% (c) 1.00% (d) 1.00% (d)
Total Fund Operating Expenses
(After Expense Reimbursement) 2.10% 2.85% 2.10% 2.85%
==== ==== ==== ====
</TABLE>
(a) As of the date of this Prospectus, neither Series had commenced
investment operations. The percentages indicated are estimates and actual
expenses may be more or less than amounts shown.
(b) "Rule 12b-1 Fees" represent an asset based sales charge that, for a
long-term shareholder, may be higher than the economic equivalent of the
maximum front-end sales charge permitted by the National Association of
Securities Dealers, Inc. ("NASD"). Rule 12b-1 Fees stated for Class B Shares
include a Service Fee. See "Distribution Plans."
(c) The Adviser has agreed to reimburse the New Asia Series' operating
expenses related to Class A Shares and Class B Shares for the amount, if any,
by which such other operating expenses for the fiscal year ended July 31,
1997 exceed 1.00% of average net assets of such Series. Other Operating
Expenses absent expense reimbursement are estimated to equal approximately
1.78% and 1.78%, respectively, of average net assets; Total Fund Operating
Expenses are estimated to be 2.88% and 3.63%, respectively, absent such
reimbursement.
(d) The Adviser has agreed to reimburse the Global Series' operating
expenses related to Class A Shares and Class B Shares for the amount, if any,
by which such other operating expenses for the fiscal year ended July 31,
1997 exceed 1.00% of average net assets of such Series. Other Operating
Expenses absent expense reimbursement are estimated to equal approximately
1.78% and 1.78%, respectively, of average net assets; Total Fund Operating
Expenses are estimated to be 2.88% and 3.63%, respectively, absent such
reimbursement.
<TABLE>
<CAPTION>
New Asia Series Global Series
---------------- -----------------
Example* 1 year 3 years 1 Year 3 Years
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<S> <C> <C> <C> <C>
An investor would pay the following expenses on a hypothetical
$1,000 investment assuming (i) a 5% annual return and (ii)
redemption at the end of each time period:
Class A Shares $68 $110 $68 $110
Class B Shares $79 $118 $79 $118
An investor would pay the following expenses on the same $1,000
investment assuming no redemption at the end of each time period:
Class A Shares $68 $110 $68 $110
Class B Shares $29 $ 88 $29 $ 88
</TABLE>
*The purpose of the table above is to help the investor understand the
various costs and expenses that the investor will bear directly or
indirectly. The example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown. For
additional information regarding various costs and expenses, see "Management
of the Fund," and "How to Buy Shares."
4
<PAGE>
PERFORMANCE INFORMATION
The Fund may, from time to time, include the performance history of any or
all of the Series in advertisements, sales literature or reports to current
or prospective shareholders. Both yield and total return are computed
separately for Class A Shares and Class B Shares of a Series in accordance
with formulas specified by the Securities and Exchange Commission. Yield and
total return are based on a Series' past performance only and are not an
indication of future performance. Performance information about each Series
is based on that Series' past performance only and is not an indication of
future performance. Performance information may be expressed as yield of any
Series or Class thereof, and as total return of any Series or Class thereof.
The yield of each Series will be computed by dividing the Series' net
investment income over a 30-day period by an average value of invested assets
(using the average number of shares entitled to receive dividends and the
maximum offering price per share at the end of the period), all in accordance
with applicable regulatory requirements. Such amount will be compounded for
six months and then annualized for a twelve- month period to derive the
Series' yield.
Standardized quotations of average annual total return for Class A and Class
B Shares of each Series will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in either Class A or
Class B Shares of each Series over a period of 1, 5, and 10 years (or up to
the life of the class of shares). Standardized total return quotations
reflect the deduction of a proportional share of each Class' expenses of each
Series (on an annual basis), deduction of the maximum initial sales load in
the case of Class A Shares or the maximum contingent deferred sales charge
applicable to a complete redemption of the investment in the case of Class B
Shares, and assume that all dividends and distributions on Class A and Class
B Shares are reinvested when paid. It is expected that the performance of
Class A Shares will be better than that of Class B Shares as a result of
lower distribution fees and certain incrementally lower expenses paid by
Class A Shares. The Fund may also quote supplementally a rate of total return
over different periods of time by means of aggregate, average, and
year-by-year or other types of total return figures.
The Fund may also advertise performance relative to certain performance
rankings and indices compiled by independent organizations. The Fund may
include the ranking of these performance figures relative to such figures for
groups of mutual funds having similar investment objectives as categorized by
ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc., and Morningstar,
Inc. Additionally, the Fund may compare a Series' performance results to
other investment or savings vehicles (such as certificates of deposit) and
may refer to results published in various publications such as Forbes,
Fortune, Money, Barron's, Investor's Business Daily, The Wall Street Journal,
The New York Times, USA Today, Registered Representative, Financial Planning,
Mutual Funds, Mutual Fund Market News, Financial Times, Investment Adviser,
Investment Week, Money Observer, The International Herald Tribune and other
newspapers and periodicals. The Fund may also refer to results broadcast on
television (such as CNBC and CNN) and on the radio, as well as electronically
(such as via the Internet). The Fund may from time to time illustrate the
benefits of tax deferral by comparing taxable investments to investments made
through tax-deferred retirement plans. The total return may also be used to
compare the performance of a Series with certain widely acknowledged outside
standards or indices for market performance, such as the Standard & Poor's
500 Stock Index ("S&P 500 Index"), Dow Jones Industrial Average, Europe
Australia Far East Index (EAFE), Consumer's Price Index, FT/S&P-Actuaries'
World Indicies (medium-small components) and Morgan Stanley Capital
International ("MSCI") Developed Market Indices.
Advertisements, sales literature and other communications may contain
information about the Fund or Adviser's current investment strategies and
management style. Current strategies and style may change to respond to a
changing market and economic conditions. From time to time, the Fund may
discuss specific portfolio holdings or industries in such communications. To
illustrate components of overall performance, the Fund may separate its
cumulative and average annual returns into income results and capital gains
or losses; or cite separately as a return figure the equity or bond portion
of a Series' portfolio; or compare a Series' equity or bond return figure to
well-known indices of market performance including but not limited to: the
S&P 500 Index, Dow Jones Industrial Average, First Boston High Yield Index,
MSCI Developed Market Indices, FT/S&P-Actuaries' World Indicies (medium-small
components) and Solomon Brothers Corporate and Government Bond Indices.
Performance information for a Series reflects only the performance of a
hypothetical investment in Class A or Class B Shares of a Series during the
particular time period on which the calculations are based. Performance
information should be considered in light of a particular Series' investment
objectives and policies, characteristics and qualities of the Series, and the
market conditions during the given time period, and should not be considered
as a representation of what may be achieved in the future. For a description
of the methods used to determine total return, see the Statement of
Additional Information.
The Fund's Annual Report, available upon request and without charge, will
contain a discussion of the performance of each Series and a comparison of
that performance to a securities market index.
INVESTMENT OBJECTIVES AND POLICIES
Each Series has a different investment objective and is designed to meet
different investment needs. The differences in objectives and policies among
the Series can be expected to affect the investment return of each Series and
the degree of market and financial risk to which each Series is subject. The
investment objective of each Series is a fundamental
5
<PAGE>
policy which may not be changed without the approval of a vote of a majority
of the outstanding shares of that Series. Since certain risks are inherent in
the ownership of any security, there can be no assurance that any Series will
achieve its investment objective. The investment policies of each Series will
also affect the rate of portfolio turnover. A high rate of portfolio turnover
generally involves correspondingly greater brokerage commissions, which are
paid directly by the Series. The rates for the New Asia and Global Series are
estimated to be 75% and 100%, respectively.
New Asia Series
The investment objective of the New Asia Series is to provide long term
capital appreciation. It is intended that this Series will achieve its
objective by investing under normal market conditions at least 65% of its
total assets in a diversified portfolio of common stocks, convertible
securities and preferred stocks of issuers organized and principally
operating (i.e., companies which derive a significant proportion (at least
50%) of their revenues or profits from goods produced or sold, investments
made, or services performed in such eponymous countries or which have at
least 50% of their assets situated in such countries) in countries throughout
Asia (excluding Japan) and whose principal securities are actively traded on
recognized stock exchanges of such countries. The Series does not intend to
invest in securities which are traded in markets in Japan or in countries
organized under the laws of Japan.
The Series will invest in countries having more established markets in
regions of Asian countries. The Asian countries to be represented in the
Series will ordinarily consist of three or more of the following countries:
China, Hong Kong, India, Indonesia, South Korea, Malaysia, Pakistan, the
Philippines, Singapore, Sri Lanka, Taiwan and Thailand. From time to time the
Series may invest in South Pacific nations such as Australia and New Zealand.
There is no requirement that the Series, at any given time, invest in any one
particular country or in all of the countries listed above or in any other
Asian countries or other developing markets that are open to foreign
investment. In determining the appropriate distribution of investments among
various countries and geographic regions, the Adviser ordinarily will
consider the following factors: prospects for relative economic growth among
Asian countries; expected levels of inflation; relative price levels of the
various capital markets; governmental policies influencing business
conditions; the outlook for currency relationships and the range of
individual investment opportunities available to the international investor.
Shareholders should be aware that the Series may make investments in
developing or emerging market countries, which involve exposure to economic
structures that are generally less diverse and mature than in the United
States, and to political systems which may be less stable. A developing
country can be considered to be a country which is in the initial stages of
its industrialization cycle. In the past, markets of developing countries
have been more volatile than the markets of developed countries; however,
such markets often have provided higher rates of return to investors.
In certain countries, investments may only be made by investing in other
investment companies that, in turn, are authorized to invest in the
securities that are issued in such countries. The Series may therefore invest
in the securities of other investment companies subject to the limitations
contained in the 1940 Act (see "Investment Restrictions" in the Statement of
Additional Information). Shareholders should recognize that a Series'
purchase of the securities of other investment companies (and closed-end
companies) results in the layering of expenses such that shareholders
indirectly bear a proportionate part of the expenses for such investment
companies including operating costs, and investment advisory and
administrative fees.
The Series may establish and maintain reserves of up to 100% of its assets
for temporary defensive purposes under abnormal market or economic
conditions. The Series reserves may be invested in domestic as well as
foreign short-term money market instruments including, but not limited to,
government obligations, certificates of deposit, bankers' acceptances, time
deposits, commercial paper, short-term corporate debt securities and
repurchase agreements. When the Series assets are held in cash or cash
equivalents, it is not investing in securities intended to meet the Series'
investment objective.
Risk Considerations
There are substantial and different risks involved which should be carefully
considered by any investor considering foreign investments. For example,
there is generally less publicly available information about foreign
countries than is available about companies in the United States. Foreign
companies are generally not subject to uniform audit and financial reporting
standards, practices and requirements comparable to those in the United
States.
Foreign securities involve currency risks. The U.S. dollar value of a
foreign security tends to decrease when the value of the dollar rises against
the foreign currency in which the security is denominated and tends to
increase when the value of the dollar falls against such currency.
Fluctuations in exchange rates may also affect the earning power and asset
value of the foreign entity issuing the security. Dividend and interest
payments may be returned to the country of origin, based on the exchange rate
at the time of disbursement, and restrictions on capital flows may be
imposed. Losses and other expenses may be incurred in converting between
various currencies in connection with purchases and sales of foreign
securities.
Foreign stock markets are generally not as developed or efficient as those
in United States. In most foreign markets volume and liquidity are less than
in the United States and, at times, volatility of price can be greater than
that in the United States. Fixed commissions on foreign stock exchanges are
generally higher than the negotiated commission on United States exchanges.
There is generally less government supervision and regulation of foreign
stock exchanges, brokers and companies than in the United States. There is
also the possibility of adverse changes in investment or exchange control
regulations, expropriation or confiscatory taxation, limitations on the
removal of funds or other assets, political or
6
<PAGE>
social instability, or diplomatic developments which could adversely affect
investments, assets or securities transactions of the Series in some foreign
countries. See "Foreign Securities" and Statement of Additional Information.
For many foreign securities, there are U.S. dollar- denominated American
Depository Receipts ("ADRs"), which are traded in the United States on
exchanges or over the counter and are sponsored and issued by domestic banks.
ADRs represent the right to receive securities for foreign issuers deposited
in a domestic bank or a correspondent bank. ADRs do not eliminate all the
risk inherent in investing in the securities for foreign issuers. However, by
investing in ADRs rather than directly in foreign issuers' stock, the Series
can avoid currency risks during the settlement period for either purchases or
sales. In general, there is a large, liquid market in the United States for
many ADRs. The information available for ADRs is subject to accounting,
auditing and financial reporting standards of the domestic market or exchange
on which they are traded, which standards are more uniform and more exacting
than those to which many foreign issuers may be subject. The Series may also
invest in ADRs which are not sponsored by domestic banks and present the
risks of foreign investments noted above. The Series may also invest in
European Depository Receipts ("EDRs"), which are receipts evidencing an
arrangement with a European bank similar to that for ADRs and are designed
for use in the European securities markets. EDRs are not necessarily
denominated in the currency of the underlying security.
The Series commenced operations on September 3, 1996 based upon an initial
capitalization of $3 million provided by Phoenix Home Life Mutual Insurance
Company. The ability of the Series to raise additional capital for investment
purposes may directly affect the spectrum of portfolio holdings and
performance.
Global Series
The investment objective of the Global Series is long-term capital
appreciation. It is intended that this Series will achieve its objective by
investing at least 65% of its total assets in a globally diversified
portfolio of equity securities of small and medium sized companies.
Companies are selected on the basis of the Adviser's assessment of their
long-term potential to grow rapidly through a variety of factors including
the expansion of existing product lines, introduction of new products,
geographic expansion, market share gains, improved operating efficiency,
unexploited themes, or acquisitions. The Adviser seeks those small to medium
companies which can show significant and sustained increases in earnings over
an extended period of time. It is presently intended that the total market
capitalization of companies considered for investment shall be approximately
US $750 million or less at the time of acquisition. A strong financial
structure and strong fundamental prospects will be sought, but given the
limited operating history of smaller companies, in certain situations some of
the above factors will not be available or remain to be proven. Full
development of these companies frequently takes time and, for this reason,
the Series should be considered as a long-term investment and not as a
vehicle for seeking short-term profits.
Under normal circumstances, business activities in a number of different
foreign countries will be represented in the Series' investments. Under
normal circumstances, at least 65% of the Series' net assets will be invested
in three different countries. The Series may, from time to time, have more
than 25% of its assets invested in any major industrial or developed country
which in the view of the Adviser poses no unique investment risk. The Series
may purchase securities of companies, wherever organized, which have their
principal activities and interests outside the United States. The Series may
also invest its reserves in domestic short-term money- market instruments. In
determining the appropriate distribution of investments among various
countries and geographic regions, the Adviser ordinarily will consider the
following factors: prospects for relative economic growth among foreign
countries; expected levels of inflation; relative price levels of the various
capital markets; governmental policies influencing business conditions; the
outlook for currency relationships and the range of individual investment
opportunities available to the international investor.
The Series may invest in stocks of all types and any variety of
industries. The Series will not concentrate its investments in specific
industries in amounts greater than 25% of its assets in any particular
"industry" without shareholder approval. During adverse economic or market
conditions, any part of the Series' assets may be held in cash or money
market instruments including U.S. Government obligations maturing within one
year from the date of purchase when the Adviser deems a temporary defensive
position to be prudent. When the Series' assets are held in cash or cash
equivalents, it is not investing in securities intended to meet the Series'
investment objective.
Risk Considerations
Many of the risks associated with investments in foreign issuers are
described above. Smaller capitalization companies are often companies with
limited operating history as a public company or companies within industries
which have recently emerged due to cultural, economic, regulatory or
technological developments. Given the limited operating history and rapidly
changing fundamental prospects, investment returns from smaller
capitalization companies are highly volatile. Smaller companies may at times
find their ability to raise capital impaired by their size or lack of
operating history. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume creating points in time when the securities are
illiquid.
Other factors influencing the performance and volatility of small
capitalization stocks include industry developments within major markets,
major economic trends and developments and general market movements in both
the equity and fixed income markets. Investment in equity securities of
foreign small capitalization companies may involve special risks,
particularly from political and economic developments abroad and differences
between foreign and U.S. regulatory systems. Foreign small capitalization
companies may be less liquid and their prices more volatile than comparable
domestic securities issuers.
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The Series commenced operations on September 3, 1996 based upon an initial
capitalization of $5 million provided by Phoenix Home Life Mutual Insurance
Company. The ability of the Series to raise additional capital for investment
purposes may directly affect the spectrum of portfolio holdings and
performance.
Additional discussion regarding risks involved in investing in each Series
are described in the "Investment Techniques and Related Risks" section below.
INVESTMENT TECHNIQUES AND RELATED RISKS
Foreign Securities. Each Series may purchase foreign securities, including
emerging market securities and those issued by foreign branches of U.S.
banks. The Fund may invest in a broad range of foreign securities including
equity, debt and convertible securities and foreign government securities. In
connection with investments in foreign securities, the Fund may enter into
forward foreign currency exchange contracts for the purpose of protecting
against losses resulting from fluctuations in exchange rates between the U.S.
dollar and a particular foreign currency denominating a security which the
Fund holds or intends to acquire. The Fund will not speculate in forward
foreign currency exchange contracts.
Investing in the securities of foreign companies involves special risks
and considerations not typically associated with investing in U.S. companies.
These include differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio
transactions, the possibility of expropriation or confiscatory taxation,
adverse changes in investment or exchange control regulations, political
instability which could affect U.S. investments in foreign countries,
difficulty in invoking legal process abroad and potential restrictions on the
flow of international capital. Additionally, dividends payable on foreign
securities may be subject to foreign taxes withheld prior to distribution.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Changes in
foreign exchange rates will affect the value of those securities which are
denominated or quoted in currencies other than the U.S. dollar. Many of the
foreign securities held by the Fund will not be registered with the
Securities and Exchange Commission and many of the issuers of foreign
securities will not be subject to the Commission's reporting requirements.
Accordingly, there may be less publicly available information about the
securities and about the foreign company or government issuing them than is
available about a domestic company or government entity. Moreover, individual
foreign economies may compare favorably or unfavorably with the United States
economy with respect to such factors as rate of growth, rate of inflation,
capital reinvestment, resource self-sufficiency and balance of payment
positions, and economic trends in foreign countries may be difficult to
assess.
Particular risks are posed by investments in third world countries or
so-called "emerging markets." These securities may be especially volatile
based on relative economic, political and market conditions present in these
countries. These and other relevant conditions vary widely between emerging
market countries. For instance, certain emerging market countries are either
comparatively undeveloped or are in the process of becoming developed and may
consequently be economically based on a relatively few or closely
interdependent industries. A high proportion of the shares of many emerging
market issuers may also be held by a limited number of large investors
trading significant blocks of securities. While the Fund will strive to be
sensitive to publicized reversals of economic conditions, political unrest
and adverse changes in trading status, unanticipated political and social
developments may affect the values of a Series' investments in such countries
and the availability of additional investments in such countries.
The Fund may use a foreign custodian in connection with its purchases of
foreign securities and may maintain cash and cash equivalents in the care of
a foreign custodian. The amount of cash or cash equivalents maintained in the
care of eligible foreign custodians will be limited to an amount reasonably
necessary to effect the Fund's foreign securities transactions. The use of a
foreign custodian invokes considerations which are not ordinarily associated
with domestic custodians. These considerations include the possibility of
expropriation, restricted access to books and records of the foreign
custodian, inability to recover assets that are lost while under the control
of the foreign custodian, and the impact of political, social or diplomatic
developments.
The Fund will calculate its net asset value and complete orders to
purchase, exchange or redeem shares only on a Monday-Friday basis (excluding
holidays on which the New York Stock Exchange is closed). Foreign securities
in which the Fund may invest may be primarily listed on foreign stock
exchanges which may trade on other days (such as Saturdays). As a result, the
net asset value of a Series' portfolio may be affected by such trading on
days when a shareholder has no access to the Fund. See "Net Asset Value".
Financial Futures and Related Options. Each Series may enter into
financial contracts and related options as a hedge against anticipated
changes in the market value of their portfolio securities or securities which
they intend to purchase or in the exchange rate of foreign currencies.
Hedging is the initiation of an offsetting position in the futures market
which is intended to minimize the risk associated with a position's
underlying securities in the cash market. Investment techniques related to
financial futures and options are summarized below and are described more
fully in the Statement of Additional Information.
Financial futures contracts consist of interest rate futures contracts,
foreign currency futures contracts and securities index futures contracts. An
interest rate futures contract obligates the seller of the contract to
deliver, and the purchaser to take delivery of, the interest rate securities
called for in the contract at a specified future time and at a specified
price. A foreign currency futures contract obligates the seller of the
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contract to deliver, the purchaser to take delivery of, the foreign currency
called for in the contract at a specified future time and at a specified
price. See "Foreign Currency Transactions". A securities index assigns
relative values to the securities included in the index, and the index
fluctuates with changes in the market values of the securities so included. A
securities index futures contract is a bilateral agreement pursuant to which
two parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the index value at the
close of the last trading day of the contract and the price at which the
futures contract is originally struck. An option on a financial futures
contract gives the purchaser the right to assume a position in the contract
(a long position if the option is a call and a short position if the option
is a put) at a specific exercise price at any time during the period of the
option.
Each Series may purchase and sell financial futures contracts which are
traded on a recognized exchange or board of trade and may purchase exchange-
or board-traded put and call options on financial futures contracts and may
enter into financial futures contracts on foreign currencies. A Series will
engage in transactions in financial futures contracts and related options
only for hedging purposes and not for speculation. In addition, a Series will
not purchase or sell any financial futures contract or related option if,
immediately thereafter, the sum of the cash or U.S. Treasury bills committed
with respect to the Series' existing futures and related options positions
and the premiums paid for related options would exceed 5% of the market value
of the Series' total assets. At the time of purchase of a futures contract or
a call option on a futures contract, an amount of cash, U. S. Government
securities or other appropriate high-grade debt obligations equal to the
market value of the futures contract minus the Series' initial margin deposit
with respect thereto, will be deposited in a segregated account with the
Fund's custodian bank to collateralize fully the position and thereby ensure
that it is not leveraged. The extent to which a Series may enter into
financial futures contracts and related options may also be limited by
requirements of the Internal Revenue Code for qualification as a regulated
investment company.
Engaging in transactions in financial futures contracts involves certain
risks, such as the possibility of an imperfect correlation between futures
market prices and cash market prices and the possibility that the Adviser
could be incorrect in its expectations as to the direction or extent of
various interest rate movements or foreign currency exchange rates, in which
case a Series' return might have been greater had hedging not taken place.
There is also the risk that a liquid secondary market may not exist, and the
loss from investing in futures contracts is potentially unlimited because the
Series may be unable to close its position. The risk in purchasing an option
on a financial futures contract is that a Series will lose the premium it
paid. Also, there may be circumstances when the purchase of an option on a
financial futures contract would result in a loss to a Series while the
purchase or sale of the contract would not have resulted in a loss.
Foreign Currency Transactions. The value of the assets of a Series as
measured in United States dollars may be affected favorably or unfavorably by
changes in foreign currency exchange rates and exchange control regulations,
and each Series may incur costs in connection with conversions between
various currencies. Each Series will conduct its foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot rate prevailing
in the foreign currency exchange market, or through forward contracts to
purchase or sell foreign currencies. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed 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
(usually large commercial banks and their customers. At the time of the
purchase of a forward foreign currency exchange contract, an amount of cash,
U.S. Government securities or other appropriate high-grade debt obligations
equal to the market value of the contract, minus the Series' initial margin
deposit with respect thereto, will be deposited in a segregated account with
the Fund's custodian bank to collateralize fully the position and thereby
ensure that it is not leveraged.
When a Series enters into a contract for the purchase or sale of a
security denominated in a foreign currency, it may want to establish the
United States dollar cost or proceeds, as the case may be. By entering into a
forward contract in United States dollars for the purchase or sale of the
amount of foreign currency involved in the underlying security transaction, a
Series is able to protect itself against a possible loss between trade and
settlement dates resulting from an adverse change in the relationship between
the United States dollar and such foreign currency. However, this tends to
limit potential gains which might result from a positive change in such
currency relationships. A Series utilizing this investment technique may also
hedge its foreign currency exchange rate risk by engaging in currency
financial futures and options transactions.
When the Adviser believes that the currency of a particular foreign
country may suffer a substantial decline against the United States dollar, it
may enter into a forward contract to sell an amount of foreign currency
approximating the value of some or all of a Series' portfolio securities
denominated in such foreign currency. The forecasting of short-term currency
market movement is extremely difficult and whether such a short-term hedging
strategy will be successful is highly uncertain.
It is impossible to forecast with precision the market value of portfolio
securities at the expiration of a contract. Accordingly, it may be necessary
for a Series utilizing this investment technique to purchase additional
currency on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign currency the
Series is obligated to deliver when a decision is made to sell the security
and make delivery of the foreign currency in settlement of a forward
contract. Conversely, it may be necessary to sell on the spot market some of
the foreign
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currency received upon the sale of the portfolio security if its market value
exceeds the amount of foreign currency the Series is obligated to deliver.
If a Series utilizing this investment technique retains the portfolio
security and engages in an offsetting transaction, the Series will incur a
gain or a loss (as described below) to the extent that there has been
movement in forward contract prices. If a Series engages in an offsetting
transaction, it may subsequently enter into a new forward contract to sell
the foreign currency. Should forward prices decline during the period between
the Series' entering into a forward contract for the sale of a foreign
currency and the date it enters into an offsetting contract for the purchase
of the foreign currency, the Series would realize gains to the extent the
price of the currency it has agreed to sell exceeds the price of the currency
it has agreed to purchase. Should forward prices increase, the Series would
suffer a loss to the extent the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell. Although
such contracts tend to minimize the risk of loss due to a deadline in the
value of the hedged currency, they also tend to limit any potential gain
which might result should the value of such currency increase. A Series will
have to convert its holdings of foreign currencies into United States dollars
from time to time. Although foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the difference (the "spread")
between the prices at which they are buying and selling various currencies.
Repurchase Agreements. Each Series may invest in repurchase agreements,
either for temporary defensive purposes necessitated by adverse market
conditions or to generate income from its excess cash balances, provided that
no more than 15% of a Series' net assets may be invested in the aggregate in
repurchase agreements having maturities of more than seven days and in all
other illiquid securities. A repurchase agreement is an agreement under which
the Series acquires a money market instrument (generally a security issued by
the U.S. Government or an agency thereof, a banker's acceptance or a
certificate of deposit) from a commercial bank, a broker or a dealer, subject
to resale to the seller at an agreed upon price and date (normally the next
business day). The resale price reflects an agreed upon interest rate
effective for the period the instrument is held by the Series and is
unrelated to the interest rate on the underlying instrument. A repurchase
agreement acquired by a Series will always be fully collateralized by the
underlying instrument, which will be marked to market every business day. The
underlying instrument will be held for the Fund's account by the Fund's
custodian bank until repurchased. The use of repurchase agreements involves
certain risks such as default by or the insolvency of the other party to the
repurchase agreement. Repurchase agreements will be entered into only with
commercial banks, brokers and dealers considered by the Fund to be
creditworthy.
Lending Portfolio Securities. Each Series may lend its securities to
brokers, dealers and financial institutions provided that the market value of
the securities subject to any such loans does not exceed 25% of the value of
the total assets (taken at market value) of such Series; and receive, as
collateral, cash or cash equivalents which at all times while the loan is
outstanding, will be maintained in amounts equal to at least 102% of the
current market value of the loaned securities. Any cash collateral will be
invested in short-term securities. All fees or charges earned from securities
lending will inure to the benefit of the Series. A Series will have the right
to regain record ownership of loaned securities within six business days and
to exercise beneficial rights such as voting rights and subscription rights.
While a securities loan is outstanding, the Series will receive amounts equal
to any interest or other distributions with respect to the loaned securities.
Any agreement to lend securities shall provide that borrowers are obligated
to return the identical securities or their equivalent at termination of the
loan and, that the Series shall have the right to retain any collateral or
use the same to purchase equivalent securities should the borrower fail to
return securities as required. As with any extension of credit there are
risks of delay in recovery of the loaned securities and, in some cases, loss
of rights in the collateral should the borrower of the securities fail
financially. However, loans of portfolio securities will be made only to
firms considered by the Fund to be creditworthy and when the Adviser believes
the consideration to be earned justifies the attendant risks.
Warrants and Stock Rights. A Series may invest up to 5% of its net assets
in warrants or stock rights valued at the lower of cost or market, but no
more than 2% of its net assets may be invested in warrants or stock rights
not listed on the New York Stock Exchange or American Stock Exchange.
Illiquid Securities. Subject to limitations under governing law, a Series
may invest up to 15% of its net assets (taken at market value at the time of
the investment) in "illiquid securities." For this purpose, illiquid
securities include securities the disposition of which is subject to legal or
contractual restrictions on resale; certain restricted securities salable
among qualified institutional buyers without restriction pursuant to Rule
144A under the Securities Act of 1933 determined by the Adviser to be
illiquid under guidelines adopted by the Board of Trustees of the Fund.
Liquidity relates to the ability of a Series to sell a security in a timely
manner at a price which reflects the value of that security. Although it is
generally the Series' policy to hold securities until their maturity, the
relative illiquidity of some of the Series' portfo- lio securities may
adversely affect the ability of the Series to dispose of such securities in a
timely manner and at a fair price at times when it might be necessary or
advantageous for the Series to liquidate portfolio securities. The market for
less liquid securities tends to be more volatile than the market for more
liquid securities, and market values of relatively illiquid securities may be
more susceptible to change as a result of adverse publicity and investor
perceptions than are the market values of more liquid securities.
INVESTMENT RESTRICTIONS
The investment restrictions to which the Series are subject, together with
the investment objectives of each Series, are fundamental policies of each
Series which may not be changed
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without the approval of the Series' shareholders. A detailed description of
each Series' investment restrictions is contained in the Statement of
Additional Information.
MANAGEMENT OF THE FUND
The Fund is a mutual fund, technically known as an open- end, management
investment company. The Board of Trustees ("Trustees") supervises the
business affairs and investments of the Fund, which is managed on a daily
basis by the Fund's investment adviser. The Fund was organized as a
Massachusetts business trust on May 31, 1996. The Fund is a series fund
currently issuing two series of shares of beneficial interest. Two classes of
shares are offered by each Series.
The Adviser
The Fund's investment adviser is Phoenix-Aberdeen International Advisors, LLC
(the "Adviser"), which is Delaware limited liability company formed in 1996
and having a place of business located at One American Row, Hartford,
Connecticut 06102. The Adviser is jointly owned and managed by PM Holdings,
Inc., a direct subsidiary of Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life"), and Aberdeen Fund Managers, Inc., a wholly-owned
subsidiary of Aberdeen Trust plc. While many of the officers and directors of
the Adviser and Subadvisers have extensive experience as investment
professionals, due to its recent formation, the Adviser has no prior
operating history.
Phoenix Home Life was founded in 1851 and is currently in the business of
writing individual and group life and health insurance and annuities. Phoenix
Home Life's principal offices are located in Hartford, Connecticut. Its
affiliate, Phoenix Duff & Phelps Corporation ("PDP"), a New York Stock
Exchange traded company, provides various financial advisory services to
institutional investors, corporations and individuals through its operating
subsidiaries. As of December 31, 1995, Phoenix Duff & Phelps Corporation, and
its advisory subsidiaries, had approximately $35 billion in assets under
management.
Aberdeen Trust was founded in 1983 and through subsidiaries operating from
offices in Aberdeen, Scotland; London, England; Singapore and Fort
Lauderdale, Florida, provides investment management services to unit and
investment trusts, segregated pension funds and other institutional and
private portfolios. As of September 30, 1995, Aberdeen Trust, and its
advisory subsidiaries, had approximately $4 billion in assets under
management.
The Adviser continuously furnishes an investment program for each Series
and manages the investment and reinvestment of the assets of each Series
subject at all times to the supervision of the Trustees. The Adviser, at its
expense, furnishes to the Fund adequate office space and facilities and
certain administrative services, including the services of any member of its
staff who serves as an officer or trustee of the Fund. Based upon the diverse
range of portfolio holdings contemplated and the expertise available through
certain affiliates, the Adviser will engage Phoenix Investment Counsel, Inc.
("PIC") and Aberdeen Fund Managers, Inc. as sub-advisers. PIC is an indirect
subsidiary of PDP and its principal offices are located at 56 Prospect
Street, Hartford, Connecticut 06115. Aberdeen Fund Managers, Inc. is a direct
subsidiary of Aberdeen Trust plc, and co-owner of the Adviser. Its principal
offices are located at 1 Financial Plaza, Suite 2210, Nations Bank Tower,
Fort Lauderdale, Florida 33394.
As compensation for its services to each Series, the Adviser is entitled
to a fee, payable monthly, at an annual rate of 0.85% of the average daily
net assets of each Series. The Investment Advisory Agreement with the Fund
provides that the Adviser will reimburse the Fund for the amount, if any, by
which the total operating expenses of any Series (including the Adviser's
compensation, but excluding interest, taxes, brokerage fees and commissions
and extraordinary expenses) for any fiscal year exceed the level of expenses
which such Series is permitted to bear under the most restrictive expense
limitation (which has not been waived) imposed on mutual funds by any state
in which shares of the Series are then qualified for sale. For providing cash
management and other services to each Series, as needed, the Adviser pays a
monthly fee to PIC equivalent to 0.15% of the average aggregate daily net
asset value of each Series. For providing advisory services with respect to
Series' assets allocated from time to time by the Adviser, the Adviser pays a
fee to PIC equivalent to 0.40% of the average daily net asset value of the
assets of each Series so allocated. For implementing certain portfolio
transactions and providing research and other services to each Series, the
Adviser also pays a monthly subadvisory fee to Aberdeen Fund Managers, Inc.
equivalent to 0.40% of the average aggregate daily net asset value of the New
Asia Series and 0.40% of the average daily net asset value of such assets of
the Global Series allocated to it by the Adviser for management. For
implementing certain portfolio transactions, providing research and other
services to each Series with regard to investments in particular geographic
areas, the Aberdeen Fund Managers Inc. shall engage the services of its
affiliates Abtrust Fund Managers Ltd. and Abtrust Fund Managers (Singapore)
Limited for which such entities shall be paid a fee by Aberdeen Fund Managers
Inc. The total advisory fee of 0.85% of the average daily net assets of each
Series is greater than that for other types of mutual funds; however, the
Trustees have determined that it is similar to fees charged by other mutual
funds whose investments are similar to those of each Series.
The Portfolio Managers
New Asia Series
Mr. Hugh Young is the portfolio manager of the New Asia Series and as such is
primarily responsible for the day-to-day management of the portfolio. Mr.
Young has been employed as an investment director for Abtrust Fund Managers
(Singapore) Limited since 1988. From 1985 to 1988, Mr. Young was the Far East
investment director for Sentinel Funds Management Ltd. From 1984 to 1985, he
was investment manager with Fidelity International Ltd. From 1981 to 1984, he
served as investment analyst-overseas investment manager with MGM Assurance;
and from 1980 to 1981, he was an investment analyst with Beardsley Bishop
Escombe, Stockbrokers.
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Global Series
The Global Series is managed by an investment committee which is primarily
responsible for the day-to-day management of the portfolio.
The Financial Agent And Administrator
Phoenix Equity Planning Corporation ("Equity Planning") serves as financial
agent of the Fund and, as such, performs bookkeeping and pricing services and
certain other functions for the Fund. As compensation under a Financial Agent
Agreement, Equity Planning receives a quarterly fee based on the average of
the aggregate daily net asset values of the Fund at an annual rate of $300
per $1 million which is expected to equal approximately the cost to Equity
Planning of providing such services. PDP serves as administrator for the
Fund, and, as such, facilitates and provides administrative services for the
Fund. As compensation, under an Administration Agreement, PDP receives a fee,
computed daily and payable monthly, at the annual rate of 0.15% of the
average daily net assets of the Fund.
The Custodian And Transfer Agent
The custodian of the assets of the Fund is Brown Brothers Harriman & Co., 40
Water Street, Boston, Massachusetts 02109. The Fund has authorized the
custodian to appoint one or more subcustodians for the assets of the Fund
held outside the United States. The securities and other assets of each
Series of the Fund are held by the Custodian or any subcustodian(s) separate
from the securities and assets of each other series.
Pursuant to a Transfer Agency and Service Agreement with the Fund, Equity
Planning acts as transfer agent for the Fund (the "Transfer Agent") for which
it is paid $14.95 for each designated Class A shareholder account and $19.95
for each designated Class B shareholder account, plus out-of-pocket expenses,
subject to prescribed minimum charges. The Transfer Agent is authorized to
engage sub-agents to perform certain shareholder servicing functions from
time to time for which such agents shall be paid a fee by the Transfer Agent.
Brokerage Commissions
Although the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. prohibit its members from seeking orders for the execution of
investment company portfolio transactions on the basis of their sales of
investment company shares, under such Rules, sales of investment company
shares may be considered in selecting brokers to effect portfolio
transactions. Accordingly, some portfolio transactions are, subject to such
Rules and to obtaining best prices and executions, effected through dealers
(excluding Equity Planning) who sell shares of the Fund.
DISTRIBUTION PLANS
Equity Planning is the national distributor of the Fund's shares. Equity
Planning is an indirect, majority-owned subsidiary of Phoenix Home Life. The
offices of Equity Planning are located at 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, Connecticut 06083-2200. Philip R. McLoughlin is a Trustee
and President of the Fund and a director and officer of Equity Planning.
David R. Pepin, a director and officer of Equity Planning, is an officer of
the Fund. G. Jeffrey Bohne, James M. Dolan, William R. Moyer, William J.
Newman, Leonard J. Saltiel, Thomas N. Steenburg and Nancy G. Curtiss are
officers of the Fund and officers of Equity Planning.
Equity Planning and the Fund have entered into distribution agreements under
which Equity Planning has agreed to use its best efforts to find purchasers
for Fund shares sold subject to an initial sales charge and those sold
subject to a contingent deferred sales charge. The Fund has granted Equity
Planning the exclusive right to purchase from the Fund and resell, as agent,
shares needed to fill unconditional orders for Fund shares. Equity Planning
may sell Fund shares through its registered representatives or through
securities dealers with whom it has sales agreements. Equity Planning may
also sell Fund shares pursuant to sales agreements entered into with banks or
bank affiliated securities brokers who, acting as agent for their customers,
place orders for Fund shares with Equity Planning. Although the
Glass-Steagall Act prohibits banks and bank affiliates from engaging in the
business of underwriting, distributing or selling securities (including
mutual fund shares), banking regulators have not indicated that such
institutions are prohibited from purchasing mutual fund shares upon the order
and for the account of their customers. If, because of changes in law or
regulations, or because of new interpretations of existing law, it is
determined that agency transactions of banks or bank affiliated securities
brokers are not permitted under the Glass-Steagall Act, the Trustees will
consider what action, if any, is appropriate. It is not anticipated that
termination of sales agreements with banks or bank affiliated securities
brokers would result in a loss to their customers or a change in the net
asset value per share of a Series of the Fund.
The sale of Fund shares through a bank or a securities broker affiliated with
a bank is not expected to preclude the Fund from borrowing from such bank or
from availing itself of custodial or transfer agency services offered by such
bank.
The Fund has adopted separate distribution plans under Rule 12b-1 of the 1940
Act for each Series and each class of shares of the Fund (the plans for Class
A Shares of each Series are referred to as the "Class A Plans", the plans for
Class B Shares of each Series are referred to as the "Class B Plans" and
collectively the "Plans"). The Plans authorize a Series to reimburse Equity
Planning for expenses in connection with the sale and promotion of such
Series' shares and the furnishing of shareholder services. A 12b-1 fee paid
by one Series may be used to finance distribution of the Shares of another
Series based on the number of shareholder accounts within the Fund. Pursuant
to the Class A Plan, a Series is authorized to reimburse Equity Planning up
to 0.25% annually for the average daily net assets of Class A Shares of such
Series. Pursuant to the Class B Plans, a Series is authorized to reimburse
Equity Planning monthly for actual expenses of Equity Planning up to 1.00%
annually for the average daily net assets of Class B Shares of such Series.
Although under no contractual obligation to do so, the Fund intends to make
such payments to Equity Planning (i) as
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<PAGE>
commissions for shares of the Series sold, all or any part of which
commissions will be paid by Equity Planning upon receipt from the Fund to
others (who may be other dealers or registered representatives of Equity
Planning), (ii) to enable Equity Planning to pay to such others maintenance
or other fees in respect of the Series' shares sold by them and remaining
outstanding on the Fund's books during the period in respect of which the fee
is paid (the "Service Fee"); and (iii) to enable Equity Planning to pay to
bank affiliated securities brokers maintenance or other fees in respect of
shares of the Series purchased by their customers and remaining outstanding
on the Fund's books during the period in respect of which the fee is paid.
The portion of the above fees paid by the Fund to Equity Planning as "Service
Fees" shall not exceed 0.25% annually of the average daily net assets of the
class to which such fee relates. Payments, less the portion thereof paid by
Equity Planning to others, will be used by Equity Planning for its expenses
of distribution of shares of the Series. If expenses of distribution of
shares of a Series or a Class of a Series exceed payments and any sales
charges retained by Equity Planning, the Fund is not required to reimburse
Equity Planning for excess expenses.
Each Plan requires that at least quarterly the Trustees of the Fund review a
written report with respect to the amounts expended under each Plan and the
purposes for which such expenditures were made. While each Plan is in effect,
the selection and nomination of candidates for Trustees who are not
interested persons of the Fund shall be committed to the discretion of other
Trustees who are not interested persons.
The National Association of Securities Dealers, Inc. ("NASD") regards certain
distribution fees as asset-based sales charges subject to NASD sales load
limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution fees or amend either or both Plans.
HOW TO BUY SHARES
To purchase shares of any Series, the minimum initial investment is $500 and
the minimum subsequent investment is $25. However, both the minimum initial
and subsequent investment amounts are $25 for investments pursuant to the
"Investo-Matic" plan, a bank draft investing program administered by Equity
Planning, or pursuant to the Systematic Exchange privilege. Completed
applications for the purchase of shares should be mailed to: Phoenix Funds,
c/o State Street Bank and Trust Company, P.O. Box 8301, Boston, MA
02266-8301.
For investments in connection with a pension, profit sharing or other
employee benefit plan whether or not qualified under Section 401 of the
Internal Revenue Code, including any plan established under the Self Employed
Individuals Tax Retirement Act of 1962 (HR-10) or a program providing for the
concurrent purchase of insurance using a loan secured by shares, the minimum
initial and subsequent investment amounts for any Series are waived provided
that the monthly contribution for each participant is at least $25 per month
per participant. There is a minimum initial investment of $25 for an
individual retirement account (IRA).
In addition, there are no minimum initial and subsequent investment amounts
in connection with the dividends or other distributions from units of a
limited partnership sold by or through Equity Planning to an Individual
Retirement Account (IRA), or in connection with dividends or other
distributions by a Series under certain conditions, which have been directed
to any Series for investment. (See the Statement of Additional Information.)
The Fund offers combination purchase privileges, letters of intent,
accumulation plans, withdrawal plans and reinvestment and exchange
privileges. Certain privileges may not be available in connection with Class
B Shares. Under certain circumstances, shares of any other Phoenix Fund
(except shares of the Phoenix Series Fund: Money Market Series Class A Shares
and Phoenix Multi-Sector Short Term Bond Fund Class A Shares held less than 6
months), may be exchanged for shares of the same class on the basis of the
relative net asset values per share at the time of the exchange. Exchanges
are subject to the minimum initial investment requirement of the designated
Series, Fund, or Portfolio, except if made in connection with the Systematic
Exchange privilege. Class A shareholders may exchange shares held in book-
entry form for an equivalent number (value) of Class A Shares of any other
Phoenix Fund. On Class B Share exchanges, the contingent deferred sales
charge schedule of the original shares purchased continues to apply.
Alternative Sales Arrangements
The alternative purchase arrangement permits an investor to choose the method
of purchasing shares that is most beneficial given the amount of the
purchase, the length of time the investor expects to hold the shares, whether
the investor wishes to receive distributions in cash or to reinvest them in
additional shares of the Fund, and other circumstances. Investors should
consider whether, during the anticipated life of their investment in the
Fund, the accumulated continuing distribution service fee and contingent
deferred sales charges on Class B Shares prior to conversion would be less
than the initial sales charge and accumulated distribution fee on Class A
Shares purchased at the same time, and to what extent such differential would
be offset by the higher yield of Class A Shares. In this regard, Class A
Shares will normally be more beneficial to the investor who qualifies for
certain reduced initial sales charges. For this reason, the Equity Planning
intends to limit sales of Class B Shares sold to any shareholder to a maximum
total value of $250,000. Class B Shares sold to unallocated qualified
employer sponsored plans will be limited to a total value of $1,000,000.
Class B Shares sold to allocated qualified employer sponsored plans,
including 401(k) plans, will be limited to a maximum total value of $250,000
for each participant provided such plans utilize an approved participant
tracking system. In addition, Class B Shares will not be sold to any
qualified employee benefit plan, endowment fund or foundation if, on the date
of the initial investment, the plan, fund or foundation has assets of
$10,000,000 or more or at least 200 participant employees. Class B Shares
will also not be sold to investors who have reached the age of 85 because of
such persons' expected distribution requirements.
Class A Shares are subject to a lower distribution fee and, accordingly,
pay correspondingly higher dividends per share.
13
<PAGE>
However, because initial sales charges are deducted at the time of purchase,
Class A investors would not have all their funds invested initially and,
therefore, would initially own fewer shares. Investors not qualifying for
reduced initial sales charges who expect to maintain their investment for an
extended period of time might consider purchasing Class A Shares because the
accumulated continuing distribution charges on Class B Shares may exceed the
initial sales charge on Class A Shares during the life of the investment.
Again, however, such investors must weigh this consideration against the fact
that, because of such initial sales charge, not all their funds will be
invested initially. However, other investors might determine that it would be
more advantageous to purchase Class B Shares to have all their funds invested
initially, although remaining subject to higher continuing distribution
charges and, for a five-year period, being subject to a contingent deferred
sales charge.
Initial Sales Charge Alternative--class A Shares
The public offering price of Class A Shares is the net asset value plus a
sales charge, as set forth below. Offering prices become effective at the
close of the general trading session of the New York Stock Exchange. Orders
received by dealers prior to such time are confirmed at the offering price
effective at that time, provided the order is received by Equity Planning
prior to its close of business.
The sales charge varies with the size of the purchase and reduced charges
apply to the aggregate of purchases of the Fund made at one time by "any
person," which term includes an individual, an individual and his/her spouse
and their children under the age of 21, or a trustee or other fiduciary
purchasing shares for a single trust, estate or fiduciary account although
more than one beneficiary is involved.
Class A Shares of the Fund are offered to the public at the net asset
value next computed after the purchase order is received by State Street Bank
and Trust Company plus a maximum sales charge of 4.75% of the offering price
(4.99% of the amount invested) on single purchases of less than $50,000. The
sales charge is reduced on a graduated scale on single purchases of $50,000
or more as shown below.
<TABLE>
<CAPTION>
Dealer
Sales Charge Sales Charge Discount
as as as Percentage
Amount of Percentage Percentage of
Transaction of Offering of Amount Offering
at Offering Price Price Invested Price*
----------------- ------------ ------------ -------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under
$100,000 4.50 4.71 4.00
$100,000 but
under $250,000 3.50 3.63 3.00
$250,000 but
under $500,000 3.00 3.09 2.75
$500,000 but
under $1,000,000 2.00 2.04 1.75
$1,000,000 or
more None None None**
</TABLE>
*Equity Planning will sponsor sales contests, training and educational
meetings and provide to all qualifying dealers, from its own profits and
resources, additional compensation in the form of trips, merchandise or
expense reimbursement. Brokers or dealers other than Equity Planning may also
make customary additional charges for their services in effecting purchases,
if they notify the Fund of their intention to do so. Equity Planning shall
also pay service and retention fees, from its own profits and resources, to
qualified wholesalers in connection with the sale of shares of funds within
the Phoenix family of funds, as defined by the 1940 Act (collectively, the
"Phoenix Funds") (exclusive of Class A Shares of Phoenix Money Market Series)
by registered financial institutions and third party marketers.
**In connection with Class A Share purchases by an account held in the name
of a qualified employee benefit plan with at least 100 eligible employees,
Equity Planning may pay broker/ dealers, from its own resources, an amount
equal to 1% of the first $3 million of purchases, 0.50% on the next $3
million, plus 0.25% on the amount in excess of $6 million.
Equity Planning has agreed to pay broker/dealers with whom it has sales
agreements, additional dealer discounts or sales commissions in connection
with the aggregate purchases (net of redemptions) of any combination of Class
A Shares and Class B Shares of each Series, provided such purchases are made
between September 3, 1996 and December 31, 1996. These additional fees shall
be paid exclusively from Equity Planning's own profits and resources and do
not apply to the purchase of shares for which sales charges are not
applicable.
In connection with purchases of Class A Shares of $1,000,000 or more (or
subsequent purchases in any amount), excluding purchases by qualified
employee benefit plans as described above, Equity Planning may pay
broker/dealers, from its own profits and resources, a percentage of the net
asset value of any shares sold as set forth below:
<TABLE>
<CAPTION>
Purchase Amount Payment to Broker/Dealer
------------------------ ---------------------------
<S> <C>
$1,000,000-$3,000,000 1%
$3,000,001-$6,000,000 .50 of 1%
$6,000,001 or more .25 of 1%
</TABLE>
Equity Planning shall pay an additional dealer discount equal to 0.50% of
the purchase price on purchases of Class A Shares of a Series, provided such
purchases are made between September 3, 1996 and December 31, 1996.
If part or all of such an investment, including investments by qualified
employee benefit plans, is subsequently redeemed within one year of the
investment date, the broker/dealer will refund to Equity Planning any such
amounts paid with respect to the investment.
How To Obtain Reduced Sales Charges--class A Shares
Investors choosing the initial sales charge alternative under certain
circumstances may be entitled to pay reduced sales charges. The circumstances
under which such investors may pay reduced sales charges are described below.
Qualified Purchasers. No sales charge will be imposed on sales of shares
to (1) any Phoenix Fund trustee, director or officer; (2) any director or
officer, or any full-time employee or sales representative (who has acted as
such for at least 90
14
<PAGE>
days), of the Adviser, or of Equity Planning; (3) registered representatives
and employees of securities dealers with whom Equity Planning has sales
agreements; (4) any qualified retirement plan exclusively for persons
described above; (5) any officer, director or employee of a corporate
affiliate of the Adviser or Equity Planning; (6) any spouse, child, parent,
grandparent, brother or sister of any person named in (1), (2), (3) or (5)
above; (7) employee benefit plans for employees of the Adviser, Equity
Planning and/or their corporate affiliates; (8) any employee or agent who
retires from Phoenix Home Life, Equity Planning and/or their corporate
affiliates; (9) any account held in the name of a qualified employee benefit
plan, endowment fund or foundation if, on the date of the initial investment,
the plan, fund or foundation has assets of $10,000,000 or more or at least
100 eligible employees; (10) any person with a direct rollover transfer of
shares from an established Phoenix Fund qualified plan; (11) any Phoenix Home
Life separate account which funds group annuity contracts offered to
qualified employee benefit plans; (12) any state, county, city, department,
authority or similar agency prohibited by law from paying a sales charge;
(13) any fully matriculated student in any U.S. service academy; (14) any
unallocated account held by a third party administrator, registered
investment adviser, trust company, or bank trust department which exercises
discretionary authority and holds the account in a fiduciary, agency,
custodial or similar capacity, if in the aggregate such accounts held by such
entity equal or exceed $1,000,000; (15) any person who is investing
redemption proceeds from investment companies other than the Phoenix Funds
if, in connection with the purchases or redemption of the redeemed shares,
the investor paid a prior sales charge provided such investor supplies
verification that the redemption occurred within 90 days of the Phoenix Fund
purchase and that a sales charge was paid; (16) any accounts established by
financial institutions, broker/dealers or registered investment advisers that
charge an account management fee or transaction fee, provided such entity has
entered into an agreement for such program with Equity Planning; or (17) any
deferred compensation plan established for the benefit of any Phoenix Fund
trustee or director; provided that sales to persons listed in (1) through
(15) above are made upon the written assurance of the purchaser that the
purchase is made for investment purposes and that the shares so acquired will
not be resold except to the Fund.
Shares issued pursuant to the automatic reinvestment of income dividends
or capital gains distributions are not subject to any sales charges. The Fund
receives the entire net asset value of its Class A Shares sold to investors.
Equity Planning's commission is the sales charge shown above less any
applicable discount or commission "re-allowed" to selected dealers and
agents. Equity Planning will re-allow discounts to selected dealers and
agents in the amounts indicated in the table above. In this regard, Equity
Planning may elect to re- allow the entire sales charge to selected dealers
and agents for all sales with respect to which orders are placed with Equity
Planning. A selected dealer who receives re-allowance in excess of 90% of
such a sales charge may be deemed to be an "underwriter" under the Securities
Act of 1933.
Combination Purchase Privilege. Purchases, either singly or in any
combination, of shares of the Fund or shares of any other Phoenix Fund
(including Class B Shares but excluding Phoenix Money Market Fund Series), if
made at a single time by a single purchaser, will be combined for the purpose
of determining whether the total dollar amount of such purchases entitles the
purchaser to a reduced sales charge on any purchases of Class A Shares. Each
purchase of Class A Shares will then be made at the public offering price, as
described in the then current Prospectus relating to such shares, which at
the time of such purchase is applicable to a single transaction of the total
dollar amount of all such purchases. The term "single purchaser" includes an
individual, or an individual, his spouse and their children under the age of
majority purchasing for his or their own account (including an IRA account)
including his or their own trust, commonly known as a living trust; a trustee
or other fiduciary purchasing for a single trust, estate or single fiduciary
account, although more than one beneficiary is involved; multiple trusts or
403(b) plans for the same employer; multiple accounts (up to 200) under a
qualified employee benefit plan or administered by a third party
administrator; or trust companies, bank trust departments, registered
investment advisers, and similar entities placing orders or providing
administrative services with respect to funds over which they exercise
discretionary investment authority and which are held in a fiduciary, agency,
custodial or similar capacity, provided all shares are held in record in the
name, or nominee name, of the entity placing the order.
Letter of Intent. Class A Shares or shares of any other Phoenix Fund
(including Class B Shares but excluding Class A Shares of the Phoenix Money
Market Fund Series) may be purchased by a "single purchaser" (as defined
above) within a period of thirteen months pursuant to a Letter of Intent, in
the form provided by Equity Planning, stating the investor's intention to
invest in such shares during such period an amount which, together with the
value (at their maximum offering prices on the date of the Letter) of the
shares of the Fund or shares of any other Phoenix Fund then owned by such
investor, equals a specified dollar amount. Each purchase of shares made
pursuant to a Letter of Intent will be made at the public offering price, as
described in the then current Prospectus relating to such shares, which at
the time of purchase is applicable to a single transaction of the total
dollar amount specified in the Letter of Intent.
An investor's Letter of Intent is not a binding commitment of the investor
to purchase or a binding obligation of the Fund or Equity Planning to sell a
specified dollar amount of shares qualifying for a reduced sales charge.
Accordingly, out of his initial purchase (and subsequent purchases if
necessary), 5% of the dollar amount of purchases required to complete his
investment is held in escrow in the form of shares (valued at the purchase
price thereof) registered in the investor's name
15
<PAGE>
until he completes his investment, at which time escrowed shares are
deposited to his account. If the investor does not complete his investment
and does not within 20 days after written request by Equity Planning or his
dealer pay the difference between the sales charge on the dollar amount
specified in his Letter of Intent and the sales charge on the dollar amount
of actual purchases, the difference will be realized through the redemption
of an appropriate number of the escrowed shares and any remaining escrowed
shares will be deposited to his account.
Right of Accumulation. "Single purchasers" (as defined above) may also
qualify for reduced sales charges based on the combined value of purchases of
either class of shares of the Fund, or any other Phoenix Fund, made over
time. Reduced sales charges are offered to investors whose shares, in the
aggregate, are valued (i.e., the dollar amount of such purchases plus the
then current value (at the public offering price as described in the then
current prospectus relating to such shares) of shares of all Phoenix Funds
owned) in excess of the threshold amounts described in the section entitled
"Initial Sales Charge Alternative--Class A Shares". To use this option, the
investor must supply sufficient account information to Equity Planning to
permit verification that one or more purchases qualify for a reduced sales
charge.
Associations. A group or association may be treated as a "single
purchaser" and qualify for reduced initial sales charges under the
Combination Privilege and Right of Accumulation if the group or association
(1) has been in existence for at least six months; (2) has a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge;
(3) facilitates solicitation of the membership by the investment dealer, thus
assisting in effecting economies of sales effort; and (4) is not a group
whose sole organizational nexus is that the members are credit card holders
of a company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
Deferred Sales Charge Alternative--class B Shares
Investors choosing the deferred sales charge alternative purchase Class B
Shares at net asset value per share without the imposition of a sales charge
at the time of purchase. The Class B Shares are subject to a sales charge if
redeemed within five years of purchase.
The contingent deferred sales charge will be imposed on most Class B Share
redemptions made within five years of purchase. The contingent deferred sales
charge alternative permits an investor to choose the method of purchasing
shares that is most beneficial given the amount of the purchase, the length
of time he or she expects to hold the shares and other circumstances. Each
class of shares pays ongoing distribution and service fees at an annual rate
(i) for Class A Shares, of up to .25% of the Series aggregate average daily
net assets attributable to the Class A Shares, and (ii) for Class B Shares,
of up to 1.00% of the Series aggregate average daily net assets attributable
to the Class B Shares. Investors should understand that the purpose and
function of the deferred sales charge and distribution and service fees with
respect to Class B Shares are the same as those of the initial sales charge
and distribution service fees with respect to Class A Shares.
The alternative purchase arrangement permits an investor to choose the
method of purchasing shares that is most beneficial given the amount of the
purchase, the length of time he or she expects to hold the shares, whether
the investor wishes to receive distributions in cash or to reinvest them in
additional shares of a Series, and other circumstances. Investors should
consider whether, during the anticipated term of their investment in a
Series, the accumulated continuing distribution and service fees and
contingent deferred sales charges on Class B Shares prior to conversion would
be more than the initial sales charge and accumulated distribution and
service fees on Class A Shares purchased at the same time. In this regard,
Class A Shares will normally be more beneficial to the investor who qualifies
for reduced initial sales charges or who maintains a large account size. For
this reason, Equity Planning intends to limit sales of Class B Shares sold to
any shareholder to a maximum total value of $250,000. Class B Shares sold to
unallocated qualified employer sponsored plans will be limited to a total
value of $1,000,000. Class B Shares sold to allocated qualified employer
sponsored plans, including 401(k) plans, will be limited to a total value of
$250,000 for each participant provided such plans utilize an approved
participant tracking system. In addition, Class B Shares will not be sold to
any qualified employee benefit plan, endowment fund or foundation if, on the
date of the initial investment, the plan, fund or foundation has assets of
$10,000,000 or more or at least 200 participant employees. Class B Shares
will also not be sold to investors who have reached the age of 85, because of
such persons' expected distribution requirements.
Class A Shares are subject to a lower distribution fee and, accordingly,
pay correspondingly higher dividends per share. However, because initial
sales charges are deducted at the time of purchase, such investors do not
have all their funds invested initially and, therefore, initially own fewer
shares. Investors not qualifying for reduced initial sales charges who expect
to maintain their investment for an extended period of time should consider
purchasing Class A Shares because the accumulated continuing distribution
charges on Class B Shares may exceed the initial sales charge on Class A
Shares during the term of the investment. An investor might determine,
however, that it would be more advantageous to purchase Class B Shares in
order that all of his or her funds be invested initially, although remaining
subject to higher continuing distribution charges and, for a five-year
period, being subject to a contingent deferred sales charge. For example,
based on current fees and expenses, an investor subject to a 4.75% initial
sales charge on Class A Shares would have to hold his investment
approximately 7 years for the Class B distribution fee to exceed the initial
sales charge plus the accumulated distribution fees of Class A Shares. In
this example, an investor intending to maintain his investment for more than
6 years might consider purchasing Class A Shares.
Proceeds from the contingent deferred sales charge are paid to Equity
Planning and are used to defray the expenses of
16
<PAGE>
Equity Planning in connection with the sale of the Class B Shares, such as
the payment of compensation to selected dealers and agents.
Contingent Deferred Sales Charge. Class B Shares redeemed within five
years of purchase will be subject to a contingent deferred sales charge at
the rates set forth below. The charge will be assessed on an amount equal to
the lesser of the current market value or the cost of the shares being
redeemed. Accordingly, no sales charge will be imposed on increases in net
asset value of shares above the initial purchase price. In addition, no
charge will be assessed on shares derived from the reinvestment of dividends
or capital gains distributions.
Equity Planning intends to pay investment dealers a sales commission of 4%
of the sale price of Class B Shares sold by such dealers, subject to future
amendment or termination. Equity Planning will retain all or a portion of the
continuing distribution fee assessed to Class B shareholders and will receive
the entire amount of the contingent deferred sales charge paid by
shareholders on the redemption of shares. These amounts will be used by
Equity Planning to finance the commission plus interest and related marketing
expenses.
Equity Planning shall pay an additional sales commission in connection
with the aggregate purchases (net of redemptions) of any combination of Class
A Shares and Class B Shares of a Series, provided such purchases are made
between September 3, 1996 and December 31, 1996.
The amount of the contingent deferred sales charge, if any, will vary
depending on the number of years from the time of payment for the Class B
Shares to the time of redemption of such shares. For the purpose of
determining the number of years from the time of any payment for the purchase
of shares, all payments made during a month will be aggregated and deemed to
have been made on the last day of the prior month.
<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge as
a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
---------------------- ---------------------
<S> <C>
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 2%
Sixth 0%
</TABLE>
In determining whether a contingent deferred sales charge is applicable to
a redemption, the calculation will be determined in a manner that minimizes
the rate being charged. Therefore, it will be assumed that any Class A Shares
are being redeemed first; any Class B Shares held for over five years or
acquired pursuant to reinvestment of dividends or distributions are redeemed
next, and any Class B Shares held longest during the five-year period are
redeemed next, unless the shareholder directs otherwise. The charge will not
be applied to dollar amounts representing an increase in the net asset value
since the time of purchase.
For example, assume an investor purchased 100 Class B Shares at $10 per
share (at a cost of $1,000) and in the second year after purchase, the net
asset value per share has increased to $12 and, during such time, the
investor has acquired 10 additional Class B Shares through dividend
reinvestment. If, at such time the investor makes his first redemption of 50
Class B Shares (proceeds of $600), 10 shares will not be subject to charge
because they were acquired through dividend reinvestment. With respect to the
remaining 40 shares, the charge is applied only to the original cost of $10
per share and not to the increase in net asset value of $2 per share.
Therefore, $400 of the $600 redemption proceeds will be charged at a rate of
4% (the applicable rate in the second year after purchase) or $16.00.
The contingent deferred sales charge is waived on redemptions of shares
(a) if redemption is made within one year of death (i) of the sole
shareholder on an individual account, (ii) of a joint tenant where the
surviving joint tenant is the deceased's spouse, or (iii) of the beneficiary
of a Uniform Gifts to Minors Act (UGMA), Uniform Transfers to Minors Act
(UTMA) or other custodial account; (b) if redemption is made within one year
of disability, as defined in Section 72(m)(7) of the Code; (c) in connection
with mandatory distributions upon reaching age 70-1/2 under any retirement
plan qualified under Sections 401, 408 or 403(b) of the Code or any
redemption resulting from the tax-free return of an excess contribution to an
IRA; (d) in connection with redemptions by 401(k) plans using an approved
participant tracking system for: participant hardships, death, disability or
normal retirement, and loans which are subsequently repaid; (e) in connection
with the exercise of certain exchange privileges among the Class B Shares of
a Series and Class B Shares of other Phoenix Funds; (f) in connection with
any direct rollover transfer of shares from an established Phoenix Fund
qualified plan into a Phoenix Fund IRA by participants terminating from the
qualified plan; and (g) in accordance with the terms specified under the
Systematic Withdrawal Program. If, upon the occurrence of a death as outlined
above, the account is transferred to an account registered in the name of the
deceased's estate, the contingent deferred sales charge will be waived on any
redemption from the estate account occurring within one year of the death. If
the Class B Shares are not redeemed within one year of the death, they will
remain subject to the applicable contingent deferred sales charge when
redeemed.
Class B Shares will automatically convert to Class A Shares of the same
Series based upon relative net asset values of each class after eight years
from the acquisition of the Class B Shares, and as a result, will thereafter
be subject to the lower distribution fee paid under the Class A distribution
plan. Such conversion will be on the basis of the relative net asset value of
the two classes without the imposition of any sales load, fee or other
charge. The purpose of the conversion feature is to relieve the holders of
Class B Shares that have been outstanding for a period of time sufficient for
Equity Planning to have been compensated for distribution expenses from most
of the burden of such distribution-related expenses.
17
<PAGE>
For purposes of conversion to Class A, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares
in a shareholder's fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) are converted to Class A Shares, an
equal pro rata portion of the Class B Shares in the sub-account will also be
converted to Class A Shares.
The conversion of Class B Shares to Class A Shares is subject to the
continuing availability of an opinion of counsel or a ruling of the Internal
Revenue Service ("IRS") to the effect that (i) the assessment of the higher
distribution fees and transfer agency costs with respect to Class B Shares
does not result in any dividends or distributions constituting "preferential
dividends" under the Code, and (ii) that the conversion of shares does not
constitute a taxable event under federal income tax law. The Fund has not
sought opinions of counsel as to these matters but has or shall apply to the
IRS for such a ruling. While a ruling similar to the one sought by the Fund
as to preferential dividends has been issued previously by the IRS with
respect to certain Phoenix Funds, complete assurance cannot be given when or
whether the Fund will receive a favorable ruling. While an adverse
determination by the IRS is not expected, the Fund may be required to
reassess the alternative purchase arrangement structure if the IRS does not
rule favorably. In addition, were the IRS not to rule favorably, the Fund
might make additional distributions if doing so would assist in complying
with the Fund's general practice of distributing sufficient income to reduce
or eliminate U.S. federal taxes. The conversion of Class B Shares to Class A
Shares may be suspended if such an opinion or ruling is no longer available.
In that event, no further conversions of Class B Shares would occur, and
shares might continue to be subject to the higher distribution fee for an
indefinite period which may extend beyond the period ending six years after
the end of the month in which affected Class B Shares were purchased.
Exchange Privileges
Shareholders may exchange Class A or Class B Shares held in book-entry form
for shares of the same class of other Phoenix Funds, provided the following
conditions are met: (1) the shares that will be acquired in the exchange (the
"Acquired Shares") are available for sale in the shareholder's state of
residence; (2) the Acquired Shares are the same class as the shares to be
surrendered (the "Exchanged Shares"); (3) the Acquired Shares will be
registered to the same shareholder account as the Exchanged Shares; (4) the
account value of the Fund whose shares are to be acquired must equal or
exceed the minimum initial investment amount required by that Phoenix Fund
after the exchange is implemented; and (5) if a shareholder has elected not
to utilize the Telephone Exchange Privilege (see below), a properly executed
exchange request must be received by Equity Planning. Exchange privileges are
not available for certain shareholders holding Class A Shares of Phoenix
Money Market Series and Class A Shares of the Phoenix Multi-Sector Short Term
Bond Fund held for less than 6 months.
Subject to the above requirements for an exchange, a shareholder or
his/her registered representative may, by telephone or written notice, elect
to have Class A or Class B Shares of the Fund exchanged for the same class of
shares of another Phoenix Fund automatically on a monthly, quarterly,
semi-annual or annual basis or may cancel the privilege ("Systematic
Exchange").
Shareholders who maintain an account balance in the Fund of at least
$5,000, or $2,000 for tax qualified retirement benefit plans (calculated on
the basis of the net asset value of the shares held in a single account), may
direct that shares of the Fund be automatically exchanged at predetermined
intervals for shares of the same class of another Phoenix Fund. If the
shareholder is participating in the Self Security program offered by Phoenix
Home Life, it is not necessary to maintain the above account balances in
order to use the Systematic Exchange privilege.
Such exchanges will be executed upon the close of business on the 10th of
a month and if the 10th falls on a holiday or weekend, then at the close of
business on the next succeeding business day. The minimum initial and
subsequent amount that may be exchanged under the Systematic Exchange is $25.
Systematic Exchange forms are available from Equity Planning.
Exchanges will be based upon each Fund's net asset value per share next
computed following receipt of a properly executed exchange request, without
sales charge. On Class B Share exchanges, the contingent deferred sales
charge schedule of the original shares purchased continues to apply.
The exchange of shares from one Phoenix Fund to another is treated as a
sale of the Exchanged Shares and a purchase of the Acquired Shares for
Federal income tax purposes. The shareholder may, therefore, realize a
taxable gain or loss. See "Dividends, Distributions and Taxes" for
information concerning the Federal income tax treatment of the disposition of
shares.
It is the policy of the Equity Planning to discourage and prevent frequent
trading by shareholders among the Fund and other Phoenix Funds in response to
market fluctuations. The Fund reserves the right to refuse exchange purchases
by any person or broker/dealer if, in the Fund's or Adviser's opinion, the
exchange would adversely affect the Fund's ability to invest effectively
according to its investment objective and policies, or otherwise adversely
affect the Fund and its shareholders. The Fund reserves the right to
terminate or modify its exchange privileges at any time upon giving prominent
notice to shareholders at least 60 days in advance.
Each Phoenix Fund has different investment objectives and policies.
Shareholders should, therefore, obtain and review the prospectus of the fund
into which the exchange is to be made before any exchange requests are made.
Telephone Exchanges
The Telephone Exchange Privilege is available only in States where shares
being acquired may be legally sold. Unless a shareholder elects in writing
not to participate in the
18
<PAGE>
Telephone Exchange Privilege, shares for which certificates have not been
issued may be exchanged by calling 800-367-5877 provided that the exchange is
made between accounts with identical registrations. Under the Telephone
Exchange Privilege, telephone exchange orders may also be entered on behalf
of the shareholder by his or her registered representative.
The Fund and the Transfer Agent will employ reasonable procedures to
confirm that telephone instructions are genuine. In addition to requiring
identical registrations on both accounts, the Transfer Agent will require
address verification and will record telephone instructions on tape. All
exchanges will be confirmed in writing to the shareholder. To the extent that
procedures reasonably designed to prevent unauthorized telephone exchanges
are not followed, the Fund and/or the Transfer Agent may be liable for
following telephone instructions for exchange transactions that prove to be
fraudulent. Broker/dealers other than Equity Planning have agreed to bear the
risk of any loss resulting from any unauthorized telephone exchange
instruction from the firm or its registered representatives. However, the
shareholder would bear the risk of loss resulting from instructions entered
by an unauthorized third party that the Fund and/or the Transfer Agent
reasonably believe to be genuine. The Telephone Exchange Privilege may be
modified or terminated at any time on 60 days' notice to shareholders. In
addition, during times of drastic economic or market changes, the Telephone
Exchange Privilege may be difficult to exercise or may be suspended
temporarily. In such event an exchange may be effected by following the
procedure outlined for tendering shares represented by certificate(s).
If a shareholder elects not to use the Telephone Exchange Privilege or if
the shares being exchanged are represented by a certificate or certificates,
in order to exchange shares the shareholder must submit a written request to
State Street Bank and Trust Company, P.O. Box 8301, Boston, MA 02266-8301. If
the shares are being exchanged between accounts that are not registered
identically, the signature on such request must be guaranteed by an eligible
guarantor institution as defined by the Transfer Agent in accordance with its
signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker dealers, credit union, national securities
exchanges, registered securities associations, clearing agencies and savings
associations. Any outstanding certificate or certificates for the tendered
shares must be duly endorsed and submitted.
NET ASSET VALUE
The net asset value per share of each class of shares of each Series of the
Fund is determined as of the close of regular trading of the New York Stock
Exchange (the "Exchange"), on days when the Exchange is open. The net asset
value per share of a Series is computed by dividing the aggregate values of
all securities and other assets of the Series, minus all liabilities and
expenses of the Series, by the number of outstanding shares of the Series.
The total liability allocated to a class of a Series, plus that class's
distribution fee and any other expenses allocated solely to that class, are
deducted from the proportionate interest of such class in the assets of the
Series, and the resulting amount for each class is divided by the number of
outstanding shares of that class to produce the net asset value per share.
A security listed or traded on an exchange is valued at its last sale price
on the exchange where it is principally traded. Lacking any sales on the
exchange where it is principally traded on the day of valuation prior to the
time as of which assets are valued, the security is valued at the last bid
price on that exchange. Short- term investments having a remaining maturity
of less than sixty days are valued at amortized cost when the Board of
Trustees has determined that amortized cost would equal fair market value.
All other securities for which over-the-counter market quotations are readily
available are valued at the last bid price. Other assets are valued at fair
market value as determined in good faith by the Board of Trustees.
Generally, trading in foreign securities, as well as trading in corporate
bonds, U.S. Government securities and money market instruments is
substantially completed each day at various times prior to the close of the
general trading session of the Exchange. The values of such securities used
in computing the net asset value of each Series are determined as of such
times. Occasionally, events affecting the value of securities may occur
between such times and the close of the general trading session which will
not be reflected in the computation of a Series net asset value. If events
occur which materially affect the value of such securities, the securities
will be valued at fair market value as determined in good faith by or under
the direction of the Board of Trustees or the Adviser acting at their
direction.
The value of securities for which market quotations are not readily available
is determined in good faith by the Trustees or the Adviser acting at their
direction, considering all relevant factors including but not limited to,
prices disseminated by pricing services (when such prices are believed to
reflect the fair value of such securities) and the value of any comparable
securities for which market quotations are readily available.
HOW TO REDEEM SHARES
Any holder of shares of any Series may require the Fund to redeem his shares
at any time at the net asset value per share next computed after receipt of a
redemption request in proper form by State Street Bank and Trust Company,
P.O. Box 8301, Boston, MA 02266-8301. The redemption request must contain the
name of the Series, the shareholder(s') account name(s) and number(s), the
number of shares to be redeemed and the signature(s) of the registered
shareholder(s). If the shares are registered in the names of individuals
singly, jointly or as custodian under the Uniform Gifts to Minors Act and the
proceeds of the redemption do not exceed $50,000 and are to be paid to the
registered owner(s) at the address of record, the signature(s) on the
redemption request need not be guaranteed. Otherwise, the signature(s) must
be guaranteed by an eligible guarantor institution as defined by the Transfer
Agent in accordance with its signature guarantee procedures. Currently such
procedures generally permit guarantees by banks, broker-dealers, credit
unions, national
19
<PAGE>
securities exchanges, registered securities associations, clearing agencies
and savings associations. When certificates for shares are in the possession
of the shareholder, they must be mailed or presented, duly endorsed in the
full name of the account, with a written request to Equity Planning that the
Fund redeem the shares, with the signature guaranteed, if required, as
described above. Signature(s) must also be guaranteed on any change of
address request submitted in conjunction with any redemption request.
In addition, each Series maintains a continuous offer to repurchase its
shares, and shareholders may normally sell their shares through securities
dealers, who may charge customary commissions for their services. Payment
will be made within seven days after receipt of the duly endorsed share
certificates or telephone request unless the repurchase or redemption request
relates to shares for which good payment has not yet been collected. For
shares purchased by check or via Invest-by-Phone service, collection of good
payment may take up to 15 days.
Due to the relatively high cost of maintaining small accounts, the Fund
reserves the right to redeem, at net asset value, the shares of any
shareholder whose account has a value, due to redemptions, of less than $200.
Before the Fund redeems these shares, the shareholder will be given notice
that the value of the shares in the account is less than the minimum amount
and will be allowed 30 days to make an additional investment in an amount
which will increase the value of the account to at least $200.
A shareholder should contact his/her broker/dealer if he/she wishes to
transfer shares from an existing broker/dealer street name account to a
street name account with another broker/ dealer. The Fund has no specific
procedures governing such account transfers.
Unless a shareholder elects in writing not to participate in the Telephone
Redemption Privilege, shares for which certificates have not been issued may
be redeemed by telephoning (800) 367- 5877 and telephone redemptions will
also be accepted on behalf of the shareholder from his or her registered
representative. The Fund and the Transfer Agent will employ reasonable
procedures to confirm that telephone instructions are genuine. Address and
bank account information will be verified, telephone redemption instructions
will be recorded on tape, and all redemptions will be confirmed in writing to
the shareholder. If there has been an address change within the past 60 days,
a telephone redemption will not be authorized. To the extent that procedures
reasonably designed to prevent unauthorized telephone redemptions are not
followed, the Fund and/or the Transfer Agent may be liable for following
telephone instructions for redemption transactions that prove to be
fraudulent. Broker/dealers other than Equity Planning have agreed to bear the
risk of any loss resulting from any unauthorized telephone redemption
instruction from the firm or its registered representatives. However, the
shareholder would bear the risk of loss resulting from instructions entered
by an unauthorized third party that the Fund and/or the Transfer Agent
reasonably believe to be genuine. The Telephone Redemption Privilege may be
modified or terminated at any time without prior notice to shareholders. In
addition, during times of drastic economic or market changes, the telephone
redemption privilege may be difficult to exercise and a shareholder should
submit a written redemption request, as described above.
If the amount of the redemption is $500 or more, the proceeds will be wired
to the shareholder's designated U.S. commercial bank account. If the amount
of the redemption is less than $500, the proceeds will be sent by check to
the address of record on the shareholder's account.
Telephone redemption requests must be received by Equity Planning by the
close of trading on the New York Stock Exchange on any day when Equity
Planning is open for business. Requests made after that time or on a day when
Equity Planning is not open for business cannot be accepted by Equity
Planning. The proceeds of a telephone redemption will normally be sent on the
first business day following receipt of the redemption request. However, with
respect to the telephone redemption of shares purchased by check, such
requests will only be effected after the Fund has assured itself that good
payment has been collected for the purchase of shares, which may take up to
15 days. This expedited redemption privilege is not available to HR-10, IRA
and 403(b)(7) Plans.
To the extent consistent with state and federal law, the Fund may make
payment of the redemption price either in cash or in kind. The Fund has
elected to pay in cash all requests for redemption by any shareholder of
record, but may limit such cash in respect to each shareholder during any 90
day period to the lesser of $250,000 or 1% of the net asset value of the Fund
at the beginning of such period. This election has been made pursuant to Rule
18f-1 under the Investment Company Act of 1940 and is irrevocable while the
Rule is in effect unless the Securities and Exchange Commission, by order,
permits its withdrawal. In case of a redemption in kind, securities delivered
in payment for shares would be valued at the same value assigned to them in
computing the net asset value per share of the Fund. A shareholder receiving
such securities would incur brokerage costs when he sold the securities. A
complete description of redemption procedures is contained in the Statement
of Additional Information.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Series intends to qualify annually as a regulated investment company
under the provisions of Subchapter M of the Internal Revenue Code, as amended
(the "Code") and to distribute annually to shareholders all or substantially
all of its net investment income and net realized capital gains, after
utilization of any capital loss carryovers. If each Series so qualifies, it
generally will not be subject to Federal income tax on the income it
distributes.
Each Series will distribute its net investment income to its shareholders on
a semi-annual basis and net realized capital gains, if any, to its
shareholders on an annual basis. Distributions, whether received by
shareholders in shares or in cash, will be
20
<PAGE>
taxable to them as income or capital gains. Distributions of net realized
long-term capital gains, if designated as such by a Series, are taxable to
shareholders as long-term capital gains, regardless of how long they have
owned shares in the Series. Shareholders who are not subject to tax on their
income will not be required to pay tax on amounts distributed to them.
Written notices will be sent to shareholders following the end of each
calendar year regarding the tax status of all distributions made during each
taxable year.
Each Series will be subject to a nondeductible 4% excise tax if it fails to
meet certain annual distribution requirements. In order to prevent imposition
of the excise tax, it may be necessary for each Series to make distributions
more frequently than described in the previous paragraph.
All dividends and distributions with respect to the shares of any class of
any Series will be payable in shares of such class of Series at net asset
value or, at the option of the shareholder, in cash. Any shareholder who
purchases shares of a Series prior to the close of business on the record
date for a dividend or distribution will be entitled to receive such dividend
or distribution. Dividends and distributions (whether received in shares or
in cash) are treated either as ordinary income or long- term capital gains
for Federal income tax purposes.
Investment income received by any Series from sources within foreign
countries may be subject to foreign income taxes withheld at the source. If a
Series should have more than 50% of the value of its assets invested in
securities of foreign corporations at the close of its taxable year, which is
the Fund's present intention, the Fund may elect to permit its shareholders
to take, either as a credit or a deduction, their proportionate share of the
foreign income taxes paid.
The foregoing is only a summary of some of the important tax considerations
generally affecting the Series and their shareholders. Shareholders should
consult competent tax advisers regarding specific tax situations.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS regulations, the Fund may be required to withhold 31% of all
reportable payments including any taxable dividends, capital gain
distributions or share redemption proceeds, for any account which does not
have a taxpayer identification number or social security number and certain
required certifications.
The Fund reserves the right to refuse to open an account for any person
failing to provide a taxpayer identification number along with the required
certifications.
The Fund sends to all shareholders, within 31 days after the end of the
calendar year, information which is required by the Internal Revenue Service
for preparing Federal income tax returns. Investors are urged to consult
their attorney or tax adviser regarding specific questions as to Federal,
foreign, state or local taxes.
ADDITIONAL INFORMATION
Description Of Shares
The Fund was established on May 31, 1996 as a Massachusetts business trust.
The capitalization of the Fund consists solely of an unlimited number of
shares of beneficial interest. The Fund currently offers shares in different
Series and different classes of those Series. Holders of shares of a Series
have equal rights with regard to voting, redemptions, dividends,
distributions, and liquidations with respect to that Series, except that
Class B Shares of any Series, which bear higher distribution fees and certain
incrementally higher expenses associated with the deferred sales arrangement,
pay correspondingly lower dividends per share than Class A Shares of the same
Series. Shareholders of all Series vote on the election of Trustees. On
matters affecting an individual Series (such as approval of an investment
advisory agreement or a change in fundamental investment policies) and on
matters affecting an individual class (such as approval of matters relating
to a Plan of Distribution for a particular class of shares), a separate vote
of that Series or class is required. Trustees will call a meeting when at
least 10% of the outstanding shares so request in writing. If the Trustees
fail to call a meeting after being so notified, the Shareholders may call the
meeting. The Trustees will assist the Shareholders by identifying other
shareholders or mailing communications, as required under Section 16(c) of
the Investment Company Act of 1940.
Shares are fully paid, nonassessable, redeemable and fully transferable
when they are issued. Shares do not have cumulative voting rights, preemptive
rights or subscription rights. The assets received by the Fund for the issue
or sale of shares of each Series, and any class thereof and all income,
earnings, profits and proceeds thereof, are allocated to such Series, and
Class, respectively, subject only to the rights of creditors, and constitute
the underlying assets of such Series or class. The underlying assets of each
Series are required to be segregated on the books of account, and are to be
charged with the expenses in respect to such Series and with a share of the
general expenses of the Fund. Any general expenses of the Fund not readily
identifiable as belonging to a particular Series or Class will be allocated
by or under the direction of the Trustees as they determine fair and
equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Fund may be personally liable
for debts or claims against the Fund. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Fund and that every written agreement, undertaking or
obligation made or issued by the Fund shall contain a provision to that
effect. The Declaration of Trust provides for indemnification out of the Fund
property for all losses and expenses of any shareholder held personally
liable for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability, which is
considered remote, is limited to circumstances in which the Fund itself would
be unable to meet its obligations.
Additional Inquiries
Inquiries and requests for the Statement of Additional Information, the
Annual Report to Shareholders and the Semi- Annual Report to Shareholders
should be directed to Equity Planning at (800) 243-4361 or 100 Bright Meadow
Boulevard, P.O. Box 2200, Enfield, Connecticut 06083-2200.
21
<PAGE>
Phoenix-Aberdeen Series Fund
PO Box 2200
Enfield CT 06083-2200
[Logo] PHOENIX
DUFF & PHELPS
<PAGE>
PHOENIX-ABERDEEN SERIES FUND
101 Munson Street, Greenfield, MA 01301
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 3, 1996
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix-Aberdeen Series Fund (the "Fund"), dated September 3, 1996, and
should be read in conjunction with it. The Fund's Prospectus may be obtained
by calling Phoenix Equity Planning Corporation ("Equity Planning" or the
"Distributor") at (800) 243-4361 or by writing to Equity Planning at 100
Bright Meadow Boulevard, P.O. Box 2200, Enfield, CT 06083-2200.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
THE FUND (21) 2
INVESTMENT OBJECTIVES AND POLICIES (5) 2
INVESTMENT RESTRICTIONS (10) 6
PERFORMANCE INFORMATION (5) 8
PORTFOLIO TRANSACTIONS AND BROKERAGE 8
SERVICES OF THE ADVISER (11) 9
SERVICES OF THE ADMINISTRATOR 10
NET ASSET VALUE (19) 11
HOW TO BUY SHARES (13) 11
EXCHANGE PRIVILEGES (18) 11
REDEMPTION OF SHARES (19) 12
DIVIDENDS, DISTRIBUTIONS AND TAXES (20( 12
TAX-SHELTERED RETIREMENT PLANS 14
THE DISTRIBUTOR (12) 14
DISTRIBUTION PLANS (12) 14
TRUSTEES AND OFFICERS 15
OTHER INFORMATION 23
</TABLE>
Numbers appearing in parentheses correspond to related disclosures in the
Fund's Prospectus.
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders/Exchanges: (800) 367-5877
Telecommunications Device (TTY)-(800) 243-1926
<PAGE>
THE FUND
Phoenix-Aberdeen Series Fund (the "Fund") is an open-end management
investment company established as a business trust under the laws of the
Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated
May 31, 1996 (the "Declaration of Trust"). The Declaration of Trust
authorizes the assets and shares of the Fund to be divided into series (the
"Series"). Each Series has a different investment objective, invests
primarily in certain types of securities, and is designed to meet different
investment needs. In many respects, each Series operates as if it were a
separate mutual fund. The Fund's Prospectus describes the investment
objectives of each Series. The following discussion supplements the
description of each Series' investment policies and investment techniques in
the Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Series are described in the
"Investment Objectives and Policies" section of the Prospectus. The following
discussion supplements the "Investment Techniques and Related Risks" section
of the Prospectus.
Financial Futures Contracts and Related Options
Each Series may use financial futures contracts and related options to hedge
against changes in the market value of their portfolio securities or
securities which they intend to purchase. A Series may use foreign currency
futures contracts to hedge against changes in the value of foreign
currencies. See "Foreign Currency Transactions" below. Hedging is
accomplished when an investor takes a position in the futures market opposite
to the investor's cash market position. There are two types of hedges-long
(or buying) and short (or selling) hedges. Historically, prices in the
futures market have tended to move in concert with (although in inverse
relation to) cash market prices, and prices in the futures market have
maintained a fairly predictable relationship to prices in the cash market.
Thus, a decline in the market value of securities or the value of foreign
currencies may be protected against to a considerable extent by gains
realized on futures contracts sales. Similarly, it is possible to protect
against an increase in the market price of securities which a Series
utilizing this investment technique may wish to purchase in the future by
purchasing futures contracts.
Each Series may purchase or sell any financial futures contracts which are
traded on a recognized exchange or board of trade and may purchase exchange-
or board-traded put and call options on financial futures contracts as a
hedge against anticipated changes in the market value of its portfolio
securities or securities which it intends to purchase. Financial futures
contracts consist of interest rate futures contracts, securities index
futures contracts and foreign currency futures contracts. A clearing
corporation associated with the exchange or board of trade on which a
financial futures contract trades assumes responsibility for the completion
of transactions and also guarantees that open futures contracts will be
performed.
In contrast to the situation in which a Series purchases or sells a
security, no security is delivered or received by a Series upon the purchase
or sale of a financial futures contract (although an obligation to deliver or
receive the underlying security in the future is created by such a contract).
Initially, when it enters into a financial futures contract, a Series
utilizing this investment technique will be required to deposit in a
segregated account with the Fund's custodian bank with respect to such Series
an amount of cash or U.S. Treasury bills. This amount is known as initial
margin and is in the nature of a performance bond or good faith deposit on
the contract. The current initial margin deposit required per contract is
approximately 5% of the contract amount. Brokers may establish deposit
requirements higher than this minimum, however, subsequent payments, called
variation margin, will be made to and from the account on a daily basis as
the price of the futures contract fluctuates. This process is known as
marking to market.
The writer of an option on a futures contract is required to deposit
margin pursuant to requirements similar to those applicable to futures
contracts. Upon exercise of an option on a futures contract, the delivery of
the futures position by the writer of the option to the holder of the option
will be accompanied by delivery of the accumulated balance in the writer's
margin account. This amount will be equal to the amount by which the market
price of the futures contract at the time of exercise exceeds, in the case of
a call, or is less than, in the case of a put, the exercise price of the
option on the futures contract.
Although financial futures contracts by their terms call for actual
delivery or acceptance of securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery.
Closing out is accomplished by effecting an offsetting transaction. A futures
contract sale is closed out by effecting a futures contract purchase for the
same aggregate amount of securities and the same delivery date. If the sale
price exceeds the offsetting purchase price, the seller immediately would be
paid the difference and would realize a gain. If the offsetting purchase
price exceeds the sale price, the seller immediately would pay the difference
and would realize a loss. Similarly, a futures contract purchase is closed
out by effecting a futures contract sale for the same securities and the same
delivery date. If the offsetting sale price exceeds the purchase price, the
purchaser would realize a gain, whereas if the purchase price exceeds the
offsetting sale price, the purchaser would realize a loss.
Any Series utilizing this investment technique will pay commissions on
financial futures contracts and related options transactions. These
commissions may be higher than those which would apply to purchases and sales
of securities directly, and will be in addition to those paid for direct
purchases and sales of securities.
2
<PAGE>
Limitations On Futures Contracts and Related Options
Any Series utilizing this investment technique may not engage in transactions
in financial futures contracts or related options for speculative purposes
but only as a hedge against anticipated changes in the market value of
portfolio securities or securities which it intends to purchase or foreign
currencies. A Series utilizing this investment technique may not purchase or
sell financial futures contracts or related options if, immediately
thereafter, the sum of the amount of initial margin deposits on the Series'
existing futures and related options positions and the premiums paid for
related options would exceed 5% of the market value of the Series' total
assets. At the time of purchase of a futures contract or a call option on a
futures contract, an amount of cash, U.S. Government securities or other
appropriate high-grade debt obligations equal to the market value of the
futures contract minus the Series' initial margin deposit with respect
thereto will be deposited in a segregated account with the Fund's custodian
bank with respect to such Series to collateralize fully the position and
thereby ensure that it is not leveraged.
The extent to which a Series may enter into financial futures contracts
and related options also may be limited by the requirements of the Internal
Revenue Code of 1986 for qualification as a regulated investment company. See
"Taxes".
Risks Relating to Futures Contracts and Related Options
Positions in futures contracts and related options may be closed out on an
exchange if the exchange provides a secondary market for such contracts or
options. A Series utilizing this investment technique will enter into a
futures or futures related option position only if there appears to be a
liquid secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular option or futures contract at
any specific time. Thus, it may not be possible to close out a futures or
related option position. In the case of a futures position, in the event of
adverse price movements the Series would continue to be required to make
daily margin payments. In this situation, if the Series has insufficient cash
to meet daily margin requirements, it may have to sell portfolio securities
to meet its margin obligations at a time when it may be disadvantageous to do
so. ln addition, the Series may be required to take or make delivery of the
securities underlying the futures contracts it holds. The inability to close
out futures positions also could have an adverse impact on the Series'
ability to hedge its positions effectively.
There are several risks in connection with the use of futures contracts as
a hedging device. While hedging can provide protection against an adverse
movement in market prices, it can also limit a hedger's opportunity to
benefit fully from favorable market movement. In addition, investing in
futures contracts and options on futures contracts will cause a Series to
incur additional brokerage commissions and may cause an increase in a Series'
turnover rate.
The successful use of futures contracts and related options depends on the
ability of the Adviser to forecast correctly the direction and extent of
market movements, interest rates and other market factors within a given time
frame. To the extent market prices remain stable during the period a futures
contract or option is held by a Series or such prices move in a direction
opposite to that anticipated, the Series may realize a loss on the hedging
transaction which is not offset by an increase in the value of its portfolio
securities. Options and futures may also fail as a hedging technique in cases
where the movements of the securities underlying the options and futures do
not follow the price movements of the portfolio securities subject to the
hedge. As a result, the Series's total return for the period may be less than
if it had not engaged in the hedging transaction.
Utilization of futures or options contracts by a Series involves the risk
of imperfect correlation in movements in the price of futures contracts and
movements in the price of the securities or currencies which are being
hedged. If the price of the futures contract moves more or less than the
price of the securities or currency being hedged, the Series will experience
a gain or loss which will not be completely offset by movements in the price
of the securities or currency. It is possible that, where a Series has sold
futures contracts to hedge against decline in the market, the market may
advance and the value of securities held in the Series or the currencies in
which its foreign securities are denominated may decline. If this occurred,
the Series would lose a potentially unlimited amount of money on the futures
contract and would also experience a decline in value in its portfolio
securities. Where futures are purchased to hedge against a possible increase
in the prices of securities or foreign currencies before the Series is able
to invest its cash (or cash equivalents) in securities (or options) in an
orderly fashion, it is possible that the market may decline; if the Series
then determines not to invest in securities (or options) at that time because
of concern as to possible further market decline or for other reasons, the
Series will realize a loss on the futures that would not be offset by a
reduction in the price of the securities purchased.
The market prices of futures contracts may be affected if participants in
the futures market elect to close out their contracts through offsetting
transactions rather than to meet margin deposit requirements. In such cases,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities or
currencies rather than to engage in closing transactions because such action
would reduce the liquidity of the futures market. In addition, because, from
the point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the underlying
securities market, increased participation by speculators in the futures
market could cause temporary price distortions. Because of the possibility of
price distortions in the futures market and of the imperfect correlation
between movements in the prices of securities or foreign currencies and
movements in the prices of futures contracts, a correct forecast of market
trends may still not result in a successful hedging transaction.
3
<PAGE>
Repurchase Agreements
Repurchase agreements, as described in the Fund's Prospectus, will be entered
into only with commercial banks, brokers and dealers considered by the Fund
to be credit-worthy. The Trustees of the Fund will monitor each Series'
repurchase agreement transactions periodically and, with the Fund's
investment adviser will consider standards which the Fund's investment
adviser will use in reviewing the creditworthiness of any party to a
repurchase agreement with a Series. No more than an aggregate of 15% of a
Series' net assets, at the time of investment, will be invested in repurchase
agreements having maturities longer than seven days and other investments
subject to legal or contractual restrictions on resale, or for which there
are not readily available market quotations.
The use of repurchase agreements involves certain risks. For example, if
the seller under a repurchase agreement defaults on its obligation to
repurchase the underlying instrument at a time when the value of the
instrument has declined, a Series may incur a loss upon its disposition. If
the seller becomes insolvent and subject to liquidation or reorganization
under bankruptcy or other laws, a bankruptcy court may determine that the
underlying instrument is collateral for a loan by the Series and therefore is
subject to sale by the trustee in bankruptcy. Finally, it is possible that
the Series may not be able to substantiate its interest in the underlying
instrument. While the Trustees of the Fund acknowledge these risks, it is
expected that they can be controlled through careful structuring of
repurchase agreement transactions to meet requirements for treatment as a
purchase and sale under the bankruptcy laws and through monitoring procedures
designed to assure the creditworthiness of counter-parties to such
transactions.
Lending Portfolio Securities
Each Series may lend portfolio securities to broker-dealers and other
financial institutions in amounts up to 25% of the market or other fair value
for its total assets provided that such loans are callable at any time by the
Series utilizing this investment technique and are at all times secured by
collateral held by the Series at least equal to 102% of the market value
determined daily of the loaned securities. The Series utilizing this
investment technique will continue to receive any income on the loaned
securities and at the same time will earn interest on cash collateral (which
will be invested in short-term debt obligations) or a securities lending fee
in the case of collateral in the form of U.S. Government securities. A loan
may be terminated at any time by either the Series or the borrower. Upon
termination of a loan the borrower will be required to return the securities
to the Series and any gain or loss in the market price during the period of
the loan would accrue to the Series. If the borrower fails to maintain the
requisite amount of collateral the loan will automatically terminate and the
Series may use the collateral to replace the loaned securities while holding
the borrower liable for any excess of the replacement cost over the amount of
the collateral.
When voting or consent rights which accompany loaned securities pass to
the borrower the Series will follow the policy of calling the loan in whole
or in part as may be appropriate in order to exercise such rights if the
matters involved would have a material effect on the Series' investment in
the securities which are the subject of the loan. The Series may pay
reasonable finders administrative and custodial fees in connection with loans
of its portfolio securities.
As with any extension of credit there are risks of delay in recovery of
the loaned securities and in some cases loss of rights in the collateral
should the borrower of the securities fail financially. However loans of
portfolio securities will be made only to firms considered by the Fund to be
creditworthy and when the Adviser believes the consideration to be earned
justifies the attendant risks.
Foreign Currency Transactions
Each Series may engage in foreign currency transactions. A forward foreign
currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date which may be any fixed 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 (usually large commercial banks) and their customers. No Series
intends to enter into forward contracts if it would have more than 15% of the
value of its total assets committed to such contracts on a regular or
continuous basis. No Series will enter into such forward contracts or
maintain a net exposure in such contracts where it would be obligated to
deliver an amount of foreign currency in excess of the value of its portfolio
securities and other assets denominated in that currency. The Fund's
custodian banks will segregate cash or liquid high quality debt securities in
an amount not less than the value of a Series' total assets committed to
forward foreign currency exchange contracts entered into for the purchase of
a foreign currency. If the value of the securities segregated declines
additional cash or securities will be added so that the segregated amount is
not less than the amount of the Series' commitments with respect to such
contracts. Generally, a Series will not enter into forward contracts with
terms longer than one year.
Foreign Currency Options. A foreign currency option provides the option
buyer with the right to buy or sell a stated amount of foreign currency at
the exercise price at a specified date or during the option period. A call
option gives its owner the right, but not the obligation, to buy the
currency, while a put option gives its owner the right, but not the
obligation, to sell the currency. The option seller (writer) is obligated to
fulfill the terms of the option sold if it is exercised. However, either
seller or buyer may close its position during the option period for such
options any time prior to expiration.
A call rises in value if the underlying currency appreciates. Conversely,
a put rises in value if the underlying currency depreciates. While purchasing
a foreign currency option can protect a Series utilizing this technique
against an adverse movement
4
<PAGE>
in the value of a foreign currency, it does not limit the gain which might
result from a favorable movement in the value of such currency. For example,
if a Series were holding securities denominated in an appreciating foreign
currency and had purchased a foreign currency put to hedge against a decline
in the value of the currency, it would not have to exercise its put.
Similarly, if a Series had entered into a contract to purchase a security
denominated in a foreign currency and had purchased a foreign currency call
to hedge against a rise in the value of the currency but instead the currency
had depreciated in value between the date of purchase and the settlement
date, the Series would not have to exercise its call but could acquire in the
spot market the amount of foreign currency needed for settlement.
Foreign Currency Futures Transactions. Each Series may use foreign
currency futures contracts and options on such futures contracts. Through the
purchase or sale of such contracts, a Series may be able to achieve many of
the same objectives attainable through the use of foreign currency forward
contracts, but more effectively and possibly at a lower cost. Unlike forward
foreign currency exchange contracts, foreign currency futures contracts and
options on foreign currency futures contracts are standardized as to amount
and delivery period and are traded on boards of trade and commodities
exchanges. It is anticipated that such contracts may provide greater
liquidity and lower cost than forward foreign currency exchange contracts.
Regulatory Restrictions. To the extent required to comply with Securities
and Exchange Commission Release No. IC-10666, when purchasing a futures
contract or writing a put option, each Series will maintain in a segregated
account cash or liquid high- grade debt securities equal to the value of such
contracts. To the extent required to comply with Commodity Futures Trading
Commission Regulation 4.5 and thereby avoid "commodity pool operator" status,
a Series will not enter into a futures contract or purchase an option thereon
if immediately thereafter the initial margin deposits for futures contracts
(including foreign currency and all other futures contracts) held by the
Series plus premiums paid by it for open options on futures would exceed 5%
of the Series' total assets. No Series will engage in transactions in
financial futures contracts or options thereon for speculation, but only to
attempt to hedge against changes in market conditions affecting the values of
securities which the Series holds or intends to purchase. When futures
contracts or options thereon are purchased to protect against a price
increase on securities intended to be purchased later, it is anticipated that
at least 75% of such intended purchases will be completed. When other futures
contracts or options thereon are purchased, the underlying value of such
contracts will at all times not exceed the sum of: (1) accrued profit on such
contracts held by the broker; (2) cash or high quality money market
instruments set aside in an identifiable manner; and (3) cash proceeds from
investments due in 30 days.
Emerging Market Securities. Each Series may invest in countries or regions
with relatively low gross national product per capita compared to the world's
major economies, and in countries or regions with the potential for rapid
economic growth (emerging markets). Emerging markets will include any
country: (i) having an "emerging stock market" as defined by the
International Finance Corporation; (ii) with low-to-middle-income economies
according to the International Bank for Reconstruction and Development (the
"World Bank"); (iii) listed in World Bank publications as developing; or (iv)
determined by the Adviser to be an emerging market as defined above. Each
Series may also invest in securities of: (i) companies the principal
securities trading market for which is an emerging market country; (ii)
companies organized under the laws of, and with a principal office in, an
emerging market country, or (iii) companies whose principal activities are
located in emerging market countries.
The risks of investing in foreign securities may be intensified in the
case of investments in emerging markets. Securities of many issuers in
emerging markets may be less liquid and more volatile than securities of
comparable domestic issuers. Emerging markets also have different clearance
and settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when a portion of the assets of
a Series is uninvested and no return is earned thereon. The inability of a
Series to make intended security purchases due to settlement problems could
cause a Series to miss attractive investment opportunities. Inability to
dispose of portfolio securities due to settlement problems could result
either in losses to the Fund due to subsequent declines in value of the
portfolio securities or, if the Series has entered into a contract to sell
the security, in possible liability to the purchaser. Securities prices in
emerging markets can be significantly more volatile than in the more
developed nations of the world, reflecting the greater uncertainties of
investing in less established markets and economies. In particular, countries
with emerging markets may have relatively unstable governments, present the
risk of nationalization of businesses, restrictions on foreign ownership, or
prohibitions of repatriation of assets, and may have less protection of
property rights than more developed countries. The economies of countries
with emerging markets may be predominantly based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions, and
may suffer from extreme and volatile debt burdens or inflation rates. Local
securities markets may trade a small number of securities and may be unable
to respond effectively to increases in trading volume, potentially making
prompt liquidation of substantial holdings difficult or impossible at times.
Securities of issuers located in countries with emerging markets may have
limited marketability and may be subject to more abrupt or erratic price
movements.
Certain emerging markets may require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if a deterioration occurs in an
emerging market's balance of payments or for other reasons, a country could
impose temporary restrictions on foreign capital remittances. A Series could
be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation of capital, as well as by the
application
5
<PAGE>
to the Series any restrictions on investments. Investments in certain foreign
emerging market debt obligations may be restricted or controlled to varying
degrees. These restrictions or controls may at times preclude investment in
certain foreign emerging market debt obligations and increase the expenses of
a Series.
Investing in Small Cap Issuers. Under normal market conditions, the Global
Series expects to invest at least 65% of its total assets in equity
securities of small and medium capitalization companies. Market
capitalizations of such issuers are determined at the time of purchase. While
the issuers in which the Series will primarily invest may offer greater
opportunities for capital appreciation than larger capitalization issuers,
investments in smaller companies may have limited product lines, markets or
financial resources, or they may be dependent on a limited management group.
Full development of these companies takes time and, for this reason, the
Series should be considered as a long-term investment and not as a vehicle
for seeking short-term profits, nor should an investment in the Series be
considered a complete investment program. In addition, many small company
stocks trade less frequently and in smaller volume, and may be subject to
more abrubt or erratic price movements than stocks of large companies. The
securities of small companies may also be more sensitive to market changes
than the securities of large companies. These factors may result in
above-average fluctuations in the net asset value of the Series' shares. The
Series is not an appropriate investment for individual investors requiring
safety of principal or a predictable return of income from their investment.
Additional Risk Factors. As a result of its investments in foreign
securities, each Series may receive interest or dividend payments, or the
proceeds of the sale or redemption of such securities, in the foreign
currencies in which such securities are denominated. In that event, a Series
may convert such currencies into dollars at the then current exchange rate.
Under certain circumstances, however, such as where the Adviser believes that
the applicable rate is unfavorable at the time the currencies are received or
the Adviser anticipates, for any other reason, that the exchange rate will
improve, a Series may hold such currencies for an indefinite period of time.
In addition, a Series may be required to receive delivery of the foreign
currency underlying forward foreign currency contracts it has entered into.
This could occur, for example, if an option written by the Fund is exercised
or the Fund is unable to close out a forward contract. A Series may hold
foreign currency in anticipation of purchasing foreign securities. A Series
may also elect to take delivery of the currencies underlying options or
forward contracts if, in the judgment of the Adviser, it is in the best
interest of the Series to do so. In such instances as well, the Series may
convert the foreign currencies to dollars at the then current exchange rate,
or may hold such currencies for an indefinite period of time.
While the holding of currencies will permit a Series to take advantage of
favorable movements in the applicable exchange rate, it also exposes the
Series to risk of loss if such rates move in a direction adverse to the
Series' position. Such losses could reduce any profits or increase any losses
sustained by the Series from the sale or redemption of securities, and could
reduce the dollar value of interest or dividend payments received. ln
addition, the holding of currencies could adversely affect the Series' profit
or loss on currency options or forward contracts, as well as its hedging
strategies.
INVESTMENT RESTRICTIONS
The Fund's fundamental policies as they affect any Series cannot be
changed without the approval vote of a majority of the outstanding shares of
such Series, which is the lesser of (i) 67% or more of the voting securities
of such Series present at a meeting if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by
proxy or (ii) more than 50% of the outstanding voting securities of such
Series. A proposed change in fundamental policy or investment objective will
be deemed to have been effectively acted upon with respect to any Series if a
majority of the outstanding voting securities of that Series votes for the
approval of the proposal as provided above, notwithstanding (1) that such
matter has not been approved by a majority of the outstanding securities of
any other Series affected by such matter and (2) that such matter has not
been approved by a majority of the outstanding voting securities of the Fund.
The following investment restrictions are fundamental policies of the Fund
with respect to all Series and may not be changed except as described above.
The Fund may not:
1. Purchase for any Series securities of any issuer, other than
obligations issued or guaranteed as to principal and interest by the
United States Government or its agencies or instrumentalities, if
immediately thereafter (i) more than 5% of such Series' total assets
(taken at market value) would be invested in the securities of such issuer
or (ii) more than 10% of the outstanding securities of any class of such
issuer would be held by such Series or by all Series of the Fund in the
aggregate.
2. Act as securities underwriter except as it technically may be deemed to
be an underwriter under the Securities Act of 1933 in selling a portfolio
security.
3. Purchase securities on margin, but it may obtain short-term credit as
may be necessary for the clearance of purchases and sales of securities.
4. Make short sales of securities or maintain a short position unless
against-the-box or unless at the time of sale the Series owns an equal
amount of such securities.
6
<PAGE>
5. Make cash loans, except that the Fund may (i) purchase bonds, notes,
debentures or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not, and (ii)
enter into repurchase agreements, provided that no more than 15% of any
Series' net assets (taken at market value) may be subject to repurchase
agreements maturing in more than seven days.
6. Make securities loans, except that the Fund may make loans of the
portfolio securities of any Series, provided that the market value of the
securities subject to any such loans does not exceed 25% of the value of
the total assets (taken at market value) of such Series.
7. Make investments in real estate (including real estate limited
partnerships) or commodities or commodity contracts, although (i) the Fund
may purchase securities of issuers which deal in real estate or
commodities and may purchase securities which are secured by interests in
real estate, specifically, securities issued by real estate investment
trusts and (ii) any Series may engage in transactions in financial futures
contracts and related options, provided that the sum of the initial margin
deposits on such Series' existing futures positions and the premiums paid
for related options would not exceed in the aggregate 5% of such Series'
total assets.
8. Invest in oil, gas or other mineral leases or exploration or
development programs, although the Fund may purchase securities of issuers
which engage in whole or in part in such activities.
9. Invest in puts, calls, straddles and any combination thereof, except
that any Series may (i) write (sell) exchange-traded covered call options
on portfolio securities and on securities indices and engage in related
closing purchase transactions and (ii) invest up to 2% of its total assets
in exchange-traded call and put options on securities and securities
indices.
10. Purchase securities of companies for the purpose of exercising
management or control.
11. Participate in a joint or joint and several trading account in
securities.
12. Purchase or retain securities of any issuer if any officer or Trustee
of the Fund, or officer or director of its investment adviser, owns
beneficially more than 1/2 of 1% of the outstanding securities or shares,
or both, of such issuer and all such persons owning more than 1/2 of 1% of
such securities or shares together own beneficially more than 5% of such
securities or shares.
13. Borrow money, except that the Fund may (i) borrow money for any Series
for temporary administrative purposes provided that any such borrowing
does not exceed 10% of the value of the total assets (taken at market
value) of such Series and (ii) borrow money for any Series for investment
purposes, provided that any such borrowing for investment purposes with
respect to any such Series is (a) authorized by the Trustees prior to any
public distribution of the shares of such Series or is authorized by the
shareholders of such Series thereafter, (b) is limited to 33 1/3% of the
value of the total assets (taken at market value) of such Series, and (c)
is subject to an agreement by the lender that any recourse is limited to
the assets of that Series with respect to which the borrowing has been
made. No Series may invest in portfolio securities while the amount of
borrowing of the Series exceeds 5% of the total assets of such Series.
Borrowing for investment purposes has not been authorized for any Series
whose shares are offered by the Fund.
14. Pledge, mortgage or hypothecate the assets of any Series to an extent
greater than 10% of the total assets (taken at market value) of such
Series to secure borrowings made pursuant to the provisions of item 13
above.
15. Issue senior securities, as defined in the 1940 Act, provided,
however, that such Series may secure borrowings made pursuant to the
provisions of item 13 above; and provided, further, that such Series'
obligations under interest-rate swaps, reverse repurchase agreements, when
issued, delayed-delivery and forward-commitment transactions and similar
transactions are not treated as senior securities if covering assets are
appropriately segregated; such Series may not pledge its assets other than
to secure such issuances of senior securities or such borrowings or in
connection with hedging transactions, short sales, when- issued and
forward-commitment transactions and similar investment strategies; for
purposes of this restriction, the term "total assets" includes the
proceeds of senior securities issued but is reduced by any liabilities and
indebtedness not constituting senior securities or excluded from treatment
as senior securities by this restriction.
16. Purchase securities of other investment companies, except that a
Series may make such purchase (a) in the open market involving no
commission or profit to a sponsor or dealer (other than customary broker's
commissions), provided that immediately thereafter (i) not more than 10%
of the Series' total assets would be invested in such securities and (ii)
not more than 3% of the stock of another investment company would be owned
by the Series, or (b) as part of a merger, consolidation, or acquisition
of assets.
17. Invest in amounts greater than 25% of a Series assets in a particular
"industry".
The Fund may purchase illiquid securities, including repurchase agreements
providing for settlement more than seven days after notice and restricted
securities (securities that must be registered with the Securities and
Exchange Commission before they can be sold to the public) deemed to be
illiquid, but such securities will not constitute more than 15% of each
Series' net assets.
7
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The Board of Trustees, or the Adviser acting at its direction, values these
securities, taking into consideration quotations available from
broker-dealers and pricing services and other information deemed relevant.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage beyond the specified limit resulting
from a change in values of portfolio securities or amount of net assets shall
not be considered a violation of the restrictions.
For purposes of establishing industry classifications for the Global Small
Cap Series, the Adviser utilizes the William O'Neil & Co., Inc. Industry
Group Index. The William O'Neil & Co., Inc. Industry Group Index presently
comprises 197 industry classifications. Classifications are determined based
on the following broad sectors: Basic Material, Energy, Capital Equipment,
Technology, Consumer Cyclical, Retail, Consumer Staple, Health Care,
Transportation, Financial, and Utilities. Sectors are then divided into
industry groups based upon income sources and other economically relevant
criteria as determined by O'Neil & Co., Inc.
PERFORMANCE INFORMATION
Each Series may, from time to time, include performance information in
advertisements or reports to shareholders or prospective investors.
Performance information in advertisements and sales literature may be
expressed as yield on a class of shares of a Series and as total return for a
class of shares such Series.
Standardized quotations of average annual total return for a class of
shares of a Series will be expressed in terms of the average annual
compounded rate of return for a hypothetical investment over periods of 1, 5
and 10 years (or up to the life of the class of shares), calculated for each
class separately pursuant to the following formula: P(1+T)n = ERV (where P =
a hypothetical initial payment of $1,000, T = the average annual total
return, n = the number of years, and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of such class's
expenses (on an annual basis), deduction of the maximum initial sales load in
the case of Class A Shares and the maximum contingent deferred sales charge
applicable to a complete redemption of the investment in the case of Class B
Shares, and assume that all dividends and distributions on such class are
reinvested when paid.
Quotations of yield for a class of shares of a Series will be based on all
investment income per share earned during a particular 30-day period
(including dividends and interest), less expenses accrued during the period
("net investment income"), and is computed by dividing net investment income
by the value of a share on the last day of the period according to the
following formula:
a - b
Yield=2 [(----- + 1)6-1]
c x d
<TABLE>
<CAPTION>
<S> <C> <C>
Where a = dividends and interest earned during the period by such Series,
b = expenses accrued for the period (net of any reimbursements),
the average daily number of shares outstanding during the period that were entitled to
c = receive dividends, and
d = the maximum offering price per share on the last day of the period.
</TABLE>
A Series also may quote annual, average annual and annualized total return
and aggregate total return performance data, for each class of shares of such
Series, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted below. Such
data will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate
rate of return calculations.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser places orders for the purchase and sale of securities,
supervises their execution and negotiates brokerage commissions on behalf of
the Fund. It is the practice of the Adviser to seek the best prices and best
execution of orders and to negotiate brokerage commissions which in the
Adviser's opinion are reasonable in relation to the value of the brokerage
services provided by the executing broker. Brokers who have executed orders
for the Fund are asked to quote a fair commission for their services. If the
execution is satisfactory and if the requested rate approximates rates
currently being quoted by the other brokers selected by the Adviser, the rate
is deemed by the Adviser to be reasonable. Brokers may ask for higher rates
of commission if all or a portion of the securities involved in the
transaction are positioned by the broker, if the broker believes it has
brought the Fund an unusually favorable trading opportunity, or if the broker
regards its research services as being of exceptional value, and payment of
such commissions is authorized by the Adviser after the transaction has been
consummated. If the Adviser more than occasionally differs with the broker's
appraisal of opportunity or value, the broker would not be selected to
execute trades in the future. The Adviser believes that the Fund benefits
with a securities industry comprised of many diverse firms and that the
long-term interest of shareholders of the Fund is best served by its
brokerage policies which include paying a fair commission rather than seeking
to exploit its leverage to force the lowest possible commission rate. The
primary factors considered in determining the firms to which brokerage orders
are given are the Adviser's appraisal of the firm's ability to execute the
order in the desired manner, the value of research services provided by the
firm, and the firm's attitude toward and interest in mutual funds in general
including
8
<PAGE>
the sale of mutual funds managed and sponsored by the Adviser. The Adviser
does not offer or promise to any broker an amount or percentage of brokerage
commissions as an inducement or reward for the sale of shares of the Fund.
Over-the-counter purchases and sales are transacted directly with principal
market-makers except in those circumstances where in the opinion of the
Adviser better prices and execution are available elsewhere.
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm,
with broadest coverage generally from the large full-line firms. Smaller
firms in general tend to provide information and interpretations on a smaller
scale, frequently with a regional emphasis. ln addition, several firms
monitor federal, state, local and foreign political developments; many of the
brokers also provide access to outside consultants. The outside research
assistance is particularly useful to the Adviser's staff since the brokers as
a group tend to monitor a broader universe of securities and other matters
than the Adviser's staff can follow. In addition, it provides the Adviser
with a diverse perspective on financial markets. Research and investment
information is provided by these and other brokers at no cost to the Adviser
and is available for the benefit of other accounts advised by the Adviser and
its affiliates and not all of this information will be used in connection
with the Fund. While this information may be useful in varying degrees and
may tend to reduce the Adviser's expenses, it is not possible to estimate its
value and in the opinion of the Adviser it does not reduce the Adviser's
expenses in a determinable amount. The extent to which the Adviser makes use
of statistical, research and other services furnished by brokers is
considered by the Adviser in the allocation of brokerage business but there
is no formula by which such business is allocated. The Adviser does so in
accordance with its judgment of the best interest of the Fund and its
shareholders.
Purchases and sales of fixed-income securities will usually be principal
transactions. Such securities often will be purchased or sold from or to
dealers serving as market makers for the securities at a net price. The Fund
will also purchase such securities in underwritten offerings and will, on
occasion, purchase securities directly from the issuer. Generally,
fixed-income securities are traded on a net basis and do not involve
brokerage commissions. The cost of executing fixed-income securities
transactions consists primarily of dealer spreads and underwriting
commissions.
In purchasing and selling fixed-income securities, it is the policy of the
Fund to obtain the best results taking into account the dealer's general
execution and operational facilities, the type of transaction involved and
other factors, such as the dealer's risk in positioning the securities
involved. While the Adviser generally seeks reasonably competitive spreads or
commissions, the Fund will not necessarily pay the lowest spread or
commission available.
The Fund may, in circumstances in which two or more dealers are in a
position to offer comparable results, give preference to a dealer which has
provided statistical or other research services to the Fund. By allocating
transactions in this manner, the Adviser is able to supplement its research
and analysis with the views and information of other securities firms.
SERVICES OF THE ADVISER
The Fund's investment adviser is Phoenix-Aberdeen International Advisors,
LLC (the "Adviser"), which is Delaware limited liability company formed in
1996 and having a place of business located at One American Row, Hartford,
Connecticut 06102. The Adviser is jointly owned and managed by PM Holdings,
Inc., a direct subsidiary of Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life"), and Aberdeen Fund Managers, Inc., a wholly-owned
subsidiary of Aberdeen Trust plc. Based upon the diverse range of portfolio
holdings contemplated and the expertise available through certain affiliates,
the Adviser will engage Phoenix Investment Counsel, Inc. ("PIC") and Aberdeen
Fund Managers, Inc. as sub-advisers.
Phoenix Home Life was founded in 1851 and is currently in the business of
writing individual and group life and health insurance and annuities. The
principal office of Phoenix Home Life is located at One American Row,
Hartford, Connecticut, 06115. Its affiliate, Phoenix Duff & Phelps
Corporation ("PDP"), a New York Stock Exchange traded company, provides
various financial advisory services to institutional investors, corporations
and individuals through its operating subsidiaries. As of December 31, 1995,
Phoenix Duff & Phelps corporation, and its advisory subsidiaries, had
approximately $35 billion in assets under management. PIC is an indirect
subsidiary of PDP and its principal offices are located at 56 Prospect
Street, Hartford, Connecticut 06115.
Aberdeen Trust was founded in 1983 and through subsidiaries operated from
offices in Aberdeen, Scotland; London, England; Singapore and Fort
Lauderdale, Florida, provides investment management services to unit and
investment trusts, segregated pension funds and other institutional and
private portfolios. As of September 30, 1995, Aberdeen Trust, and its
advisory subsidiaries, had approximately $4 billion in assets under
management.
The investment advisory agreements provide that the Fund will bear all
costs and expenses (other than those specifically referred to as being borne
by the Adviser) incurred in the operation of the Fund. Such expenses include,
but shall not be limited to, all expenses incurred in any public offering of
its shares, including among others, interest, taxes, brokerage fees and
commissions, fees of Trustees who are not full-time employees of the Adviser
or any of its affiliates, expenses of Trustee' and shareholder's meetings
including the cost of printing and mailing proxies, expenses of insurance
premiums for fidelity and other coverages, expenses of
9
<PAGE>
repurchases and redemption of shares, expenses of issue and sale of shares
(to the extent not borne by its national distributor under its agreement with
the Fund), expenses of printing and mailing stock certificates representing
shares of the Fund, association membership dues, charges of custodians,
transfer agents, dividend disbursing agents and financial agents,
bookkeeping, auditing and legal expenses. The Fund will also pay the fees and
bear the expense of registering and maintaining the registration of the Fund
and its shares with the Securities and Exchange Commission and registering or
qualifying its shares under state or other securities laws and the expense of
preparing and mailing prospectus and reports to shareholders. If authorized
by the Trustees, the Fund will also pay for extraordinary expenses and
expenses of a non-recurring nature which may include, but not be limited to
the reasonable and proportionate cost of any reorganization or acquisition of
assets and the cost of legal proceedings to which the Fund is a party.
The Adviser continuously furnishes an investment program for each Series
and manages the investment and reinvestment of the assets of each Series
subject at all times to the supervision of the Trustees. The Adviser, at its
expense, furnishes to the Fund adequate office space and facilities and
certain administrative services, including the services of any member of its
staff who serves as an officer of the Fund.
As compensation for its services to each Series, the Adviser is entitled
to a fee, payable monthly, at an annual rate of 0.85% of the Series' average
daily net assets. For providing cash management and other services to each
Series, as needed, the Adviser pays a monthly fee to PIC equivalent to 0.15%
of the average aggregate daily net asset value of each Series. For providing
advisory services with respect to Series' assets allocated from time to time
by the Adviser, the Adviser pays a fee to PIC equivalent to 0.40% of the
average daily net asset value of the assets of each Series so allocated. For
implementing certain portfolio transactions and providing research and other
services to each Series, the Adviser also pays a monthly subadvisory fee to
Aberdeen Fund Managers, Inc. equivalent to 0.40% of the average aggregate
daily net asset value of The New Asia Series and 0.40% of the average daily
net asset value of such assets of the Global Series allocated to it by the
Adviser for management.
The Investment Advisory Agreement with the Fund provides that the Adviser
will reimburse the Fund for the amount, if any, by which the total operating
expenses of any Series (including the Adviser's compensation, but excluding
interest, taxes, brokerage fees and commissions and extraordinary expenses)
for any fiscal year exceed the level of expenses which such Series is
permitted to bear under the most restrictive expense limitation (which has
not been waived) imposed on mutual funds by any state in which shares of the
Series are then qualified for sale.
The investment advisory agreements also provide that each adviser shall
not be liable to the Fund or any shareholder of the Fund for any error of
judgment or mistake of law or for any loss suffered by the Fund or by any
shareholder of the Fund in connection with the matters to which the agreement
relates, except a loss resulting from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of such adviser in the
performance of its duties thereunder.
The Investment Advisory Agreement and the Investment Subadvisory Agreement
were approved by the Trustees of the Fund on August 21, 1996. Provided it has
been approved by a vote of the majority of the outstanding shares of a Series
of the Fund which is subject to its terms and conditions, each investment
advisory agreement continues from year to year with respect to such Series so
long as (1) such continuance is approved at least annually by the Trustees or
by a vote of the majority of the outstanding shares of such Series and (2)
the terms and any renewal of the agreement with respect to such Series have
been approved by the vote of a majority of the Trustees who are not parties
to the agreement or interested persons, as that term is defined in the
Investment Company Act of 1940, of the Fund or the relevant adviser, cast in
person at a meeting called for the purpose of voting on such approval. On
sixty days' written notice and without penalty the agreement may be
terminated as to the Fund or as to a Series by the Trustees or by the
relevant adviser and may be terminated as to a Series by a vote of the
majority of the outstanding share of such Series. Each agreement
automatically terminates upon its assignment (within the meaning of the
Investment Company Act). The Investment Advisory Agreement between the Fund
and PAIA provides that upon its termination, or at the request of the
adviser, the Fund will eliminate all references to "Phoenix" and/or
"Phoenix-Aberdeen" from its name, and will not thereafter transact business
in the a name using the word "Phoenix" or "Phoenix-Aberdeen".
SERVICES OF THE ADMINISTRATOR
Phoenix Duff & Phelps Corporation (the "Administrator") serves as
administrator for the Fund. Under the terms of the Administration Agreement,
the Administrator will assist in maintaining office facilities, furnish
clerical services, office supplies and stationery, prepare and file tax
returns of the Fund, monitor the Funds expenses accruals and pay all expenses
upon proper authorization from the Fund, monitor the Fund's status as a
regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, monitor and make recommendations concerning fidelity bond coverage,
monitor compliance with the policies and limitations of the Fund as set forth
in the Fund's governing documents, supervise the external audit and tax
return preparation by the Fund's auditor, and prepare and/or coordinate all
materials for the Board of Trustees' meetings. As compensation, the
Administrator receives a fee, computed daily and payable monthly, at the
annual rate of 0.15% of the average daily net assets of the Fund.
10
<PAGE>
The Agreement continues in effect from year to year provided such
continuance is specifically approved at least annually by the Fund's Board of
Trustees including a majority of the trustees who are not interested persons
or by a vote of a majority of the outstanding voting securities of the Fund.
The Agreement automatically terminates upon its assignment and may be
terminated by the either party at any time upon not less than 60 days'
written notice.
NET ASSET VALUE
The net asset value per share of each class of shares of each Series will
be determined at the close of the general trading session of the New York
Stock Exchange (the "Exchange") on each business day the Exchange is open for
regular trading. The net asset value per share of each class of shares of
each Series is computed by dividing the value of such Series' securities,
plus any cash and other assets (including dividends and interest accrued but
not collected) less all liabilities (including accrued expenses) attributable
to such class, by the number of shares of the class outstanding. See the
Fund's current Prospectus for more information.
HOW TO BUY SHARES
Shares may be purchased from the Distributor or from investment dealers
having sales agreements with the Distributor at the public offering price
(the net asset value next computed following receipt by State Street Bank and
Trust Company of a purchase application in proper form, plus the applicable
sales charge). The minimum initial purchase is $500 ($25 if using the bank
draft investing program designated "Investo-Matic") and the minimum
subsequent investment is $25. In the case of employee payroll deductions
plans, organized group plans and other benefit programs or arrangements
offered by certain dealers, the minimum initial investment may be fixed from
time to time at such lesser amounts as the Adviser in its sole discretion may
determine, and may in certain cases be waived from time to time by the
Adviser, in its sole discretion. See the Fund's current Prospectus for more
information.
EXCHANGE PRIVILEGES
Subject to limitations, shareholders may exchange Class A Shares or Class
B Shares held in book-entry form for shares of the same class of other
Phoenix Funds (as defined in the Fund's current Prospectus), provided the
following conditions are met: (1) the shares that will be acquired in the
exchange (the "Acquired Shares") are available for sale in the shareholder's
state of residence; (2) the Acquired Shares are the same class as the shares
to be surrendered (the "Exchanged Shares"); (3) the Acquired Shares will be
registered to the same shareholder account as the Exchanged Shares; (4) the
account value of the Fund whose shares are to be acquired must equal or
exceed the minimum initial investment amount required by that Fund after the
exchange is implemented; and (5) if a shareholder has elected not to utilize
the Telephone Exchange Privilege (see below), a properly executed exchange
request must be received by Equity Planning.
Subject to the above requirements for an exchange, a shareholder or
his/her registered representative may, by telephone or written notice, elect
to have Class A Shares or Class B Shares of the Fund exchanged for the same
class of shares of another Phoenix Fund automatically on a monthly,
quarterly, semiannual or annual basis or may cancel the privilege
("Systematic Exchange").
Shareholders who maintain an account balance in the Fund of at least
$5,000 or $2,000 for tax qualified retirement benefit plans (calculated on
the basis of the net asset value of the shares held in a single account) may
direct that shares of the Fund be automatically exchanged at predetermined
intervals for shares of the same class of another Phoenix Fund. If the
shareholder is participating in the Self Security Program offered by Phoenix
Home Life Mutual Insurance Company, it is not necessary to maintain the above
account balances in order to use the Systematic Exchange Privilege.
Such exchanges will be executed upon the close of business on the 10th of
a month and if the 10th falls on a holiday or weekend, then at the close of
business on the next succeeding business day. The minimum initial and
subsequent amount that may be exchanged under the Systematic Exchange
Privilege is $25. Systematic Exchange Privilege forms are available from
Equity Planning. Exchanges will be based upon each Fund's net asset value per
share next computed following receipt of a properly executed exchange
request, without sales charge. On Class B Share exchanges, the contingent
deferred sales charge schedule of the original shares purchased continues to
apply.
The exchange of shares from one fund to another is treated as sale of the
Exchanged Shares and a purchase of the Acquired Shares for Federal income tax
purposes. The shareholder may, therefore, realize a taxable gain or loss. See
"Dividends, Distributions and Taxes" in the Prospectus for information
concerning the Federal income tax treatment of a disposition of shares. It is
the policy of the Adviser to discourage and prevent frequent trading by
shareholders among the Fund and other Phoenix Funds in response to market
fluctuations. The Fund reserves the right to terminate or modify its exchange
privileges at any time upon giving prominent notice to shareholders at least
60 days in advance.
Each Phoenix Fund has different investment objectives and policies.
Shareholders should, therefore, obtain and review the prospectus of the fund
into which the exchange is to be made before any exchange requests are made.
11
<PAGE>
REDEMPTION OF SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended
and payment therefor postponed during periods when the Exchange is closed,
other than a customary weekend and holiday closing, or, if permitted by rules
of the Securities and Exchange Commission, during periods when trading on the
Exchange is restricted or during any emergency which makes it impracticable
for the Fund to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the
Securities and Exchange Commission for the protection of investors.
Furthermore, the Transfer Agent will not mail redemption proceeds until
checks received for shares purchased have cleared, which may take up to 15
days, but payment will be forwarded immediately upon demand. See the Fund's
current Prospectus for further information.
Redemptions by holders of Class B Shares will be subject to the applicable
deferred sales charge, if any.
Each shareholder account in the Fund which has been in existence for at
least one year and has a value of less than $200 may be redeemed upon the
giving of not less than 60 days' written notice to the shareholder mailed to
the address of record. During the 60-day period the shareholder has the right
to add to the account to bring its value to $200 or more. See the Fund's
current Prospectus for more information.
Telephone Redemption
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Fund's current Prospectus for
additional information.
Reinvestment Privilege
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinstatement of their investment at net
asset value. See the Fund's current Prospectus for more information and
conditions attached to the privilege.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to remain qualified as a regulated investment company
under certain provisions of the Code. Under such provisions, the Fund will
not be subject to Federal income tax on such part of its ordinary income and
net realized capital gains which it distributes to shareholders provided it
meets certain distribution requirements. To qualify for treatment as a
regulated investment company, the Fund generally must, among other things,
(a) derive in each taxable year at least 90% of its gross income from
dividends, interest payments with respect to security loans and gains from
the sale or disposition of stock or securities and certain other items, (b)
derive less than 30% of its gross income each taxable year as gains (without
deduction for losses) from the sale or other disposition of securities held
for less than three months and (c) diversify its holdings so that, at the end
of each quarter of the taxable year (i) at least 50% of the market value of
the Fund's assets are represented by cash, U.S. Government securities,
securities of other regulated investment companies and other securities, with
such other securities of any one issuer limited for purposes of this
calculation to an amount not greater than 5% of the Fund's total assets and
10% of the outstanding voting securities of any one issuer and (ii) not more
than 25% of the value of its total assets is invested in the securities of
any one issuer (other than U.S. Government securities or the securities of
other regulated investment companies). If, in any taxable year, the Fund does
not qualify as a regulated investment company all of its taxable income will
be taxed to the Fund at corporate rates.
It is the Fund's policy to distribute to its shareholders at least 98% of
net investment taxable income due to the Code imposing a 4% nondeductible
excise tax on a regulated investment company, such as the Fund, if it does
not distribute to its shareholders during the calendar year an amount equal
to 98% of its net ordinary income, with certain adjustments, plus 98% of the
Fund's net capital gains for the 12-month period ending on March 31 of such
calendar year. In addition, an amount equal to any undistributed investment
company taxable income or capital gain net income from the previous reporting
year must also be distributed to avoid the excise tax. The excise tax is
imposed on the amount by which the regulated investment company does not meet
the foregoing distribution requirements. If the Fund has taxable income that
would be subject to the excise tax, the Fund intends to distribute such
income so as to avoid payment of the excise tax.
Under another provision of the Code, any dividend declared by the Fund to
shareholders of record in October, November or December of any year will be
deemed to have been received by, and will be taxable to shareholders as of
December 31, provided that the dividend is actually paid by the Fund in
January of the following year.
Under certain circumstances, the sales charge incurred in acquiring shares
of the Fund may not be taken into account in determining the gain or loss on
the disposition of those shares. This rule applies where shares of the Fund
are disposed of within 90 days after the date on which they were acquired and
new shares of a regulated investment company are acquired without a sales
charge or at a reduced sales charge. In that case, the gain or loss realized
on the disposition will be determined by excluding the charge incurred in
acquiring those shares. This exclusion applies to the extent that the
otherwise applicable sales charge with respect to the newly acquired shares
is reduced as a result of the shareholder having incurred a sales charge
initially. The portion of the sales charge affected by this rule will be
treated as a sales charge paid for the new shares.
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<PAGE>
Distributions by the Fund reduce the net asset value of the Fund's shares.
Should a distribution reduce the net asset value of a share below a
shareholder's cost for the share, such a distribution nevertheless generally
would be taxable to the shareholder as ordinary income or long-term capital
gain, even though, from an investment standpoint, it may constitute a partial
return of capital. In particular, investors should be careful to consider the
tax implications of buying shares just prior to a distribution by the Fund.
The price of shares purchased at that time may include the amount of the
forthcoming distribution, but the distribution generally would be taxable to
them.
Some shareholders may be subject to withholding of Federal income tax on
dividends and redemption payments from the Fund backup withholding at the
rate of 31%. Corporate shareholders and certain other shareholders specified
in the Code generally are exempt from such backup withholding. Generally,
shareholders subject to backup withholding will be (i) those for whom a
certified taxpayer identification number is not on file with the Fund, (ii)
those about whom notification has been received (either by the shareholder or
the Fund) from the IRS that they are subject to backup withholding or (iii)
those who, to the Fund's knowledge, have furnished an incorrect taxpayer
identification number. Generally, to avoid backup withholding, an investor
must, at the time an account is opened, certify under penalties of perjury
that the taxpayer identification number furnished is correct and that he or
she is not subject to backup withholding.
The Fund may invest in certain debt securities that are originally issued
or acquired at a discount. Special rules apply under the Code to the
recognition of income with respect to such debt securities. Under the special
rules, the Fund may recognize income for tax purposes without a corresponding
current receipt of cash. In addition, gain on a disposition of a debt
security subject to the special rules may be treated wholly or partially as
ordinary income, not capital gain.
The Fund intends to accrue dividend income for Federal income tax purposes
in accordance with the rules applicable to regulated investment companies. In
some cases, these rules may have the effect of accelerating (in comparison to
other recipients of the dividend) the time at which the dividend is taken
into account by the Fund as taxable income.
Transactions in options on stock indexes are subject to the Code rules of
section 1256. Pursuant to these rules, such options, whether sold by the Fund
during a taxable year or held by the Fund at the close of its taxable year,
will be treated as if sold for their market value. Generally, 60% of any net
gain or loss recognized on the deemed sale, as well as 60% of the gain or
loss with respect to any actual termination (including expiration), will be
treated as long-term capital gain or loss and the remaining 40% will be
treated as short-term capital gain or loss.
In order to qualify under Part I of Subchapter M, the Fund may be
restricted from certain activities, including (i) writing of options on
securities which have been held less than three months, (ii) writing of
options which expire in less than three months, and (iii) effecting closing
purchase transactions with respect to options which have been written less
than three months prior to such transactions.
The Fund may be subject to tax on dividend or interest income received
from securities of non-U.S. issuers withheld by a foreign country at the
source. The United States has entered into tax treaties with many foreign
countries which entitle the Fund to a reduced rate of tax or exemption from
tax on income. It is impossible to determine the effective rate of foreign
tax in advance since the amount of the Fund's assets to be invested within
various countries is not known. The Fund intends to operate so as to qualify
for treaty tax benefits where applicable. To the extent that the Fund is
liable for foreign income taxes withheld at the source, the Fund may operate
so as to meet the requirements of the Code to "pass through" to the Fund's
shareholders tax benefits attributable to foreign income taxes paid by the
Fund. If more than 50% of the value of the Fund's total assets at the close
of its taxable year is comprised of securities issued by foreign
corporations, the Fund may elect with the IRS to "pass through" to the Fund's
shareholders the amount of foreign income taxes paid by the Fund. Pursuant to
this election, shareholders will be required to (i) include in gross income,
even though not actually received, their respective pro rata share of foreign
taxes paid by the Fund; (ii) treat their pro rata share of foreign taxes as
paid by them; (iii) either deduct their pro rata share of foreign taxes in
computing their taxable income, or use such share as foreign tax credit
against U.S. income tax (but not both). No deduction for foreign taxes may be
claimed by a non-corporate shareholder who does not itemize deductions. The
Fund may meet the requirements to "pass through" to its shareholders foreign
income taxes paid, but there can be no assurance that the Fund will be able
to do so. Each shareholder will be notified within 60 days after the close of
each taxable year of the Fund if the foreign taxes paid by the Fund will
"pass through" for that year, and, if so, the amount of each shareholder's
pro rata share (by country) of (i) the foreign taxes paid and (ii) the Fund's
gross income from foreign sources. Shareholders who are not liable for
Federal income taxes will not be affected by such "pass through" of foreign
tax credits.
If the Fund invests in stocks of certain passive foreign investment
companies, the Fund may be subject to U.S. Federal income taxation on a
portion of the "excess distribution" with respect to, or gain from, the
disposition of such stock. The tax would be determined by allocating such
distribution or gain ratably to each day of the Fund's holding period for the
stock. The distribution or gain so allocated to any taxable year of the
excess distribution or disposition would be taxed to the Fund at the highest
ordinary income rate in effect for such year, and the tax would be further
increased by an interest charge to reflect the value of the tax deferral
deemed to have resulted from ownership of foreign company's stock. Any amount
of distribution or gain allocated to the taxable year of the distribution or
disposition would be included in the Fund's investment company taxable income
and, accordingly, would not be taxable to the Fund to the extent distributed
by the Fund as a dividend to its shareholder.
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<PAGE>
The foregoing is a general summary of the applicable provisions of the
Code and Treasury Regulations presently in effect. For the complete
provisions, reference should be made to the pertinent Code sections and the
Treasury Regulations promulgated thereunder. The Code and these Treasury
Regulations are subject to change by legislative or administrative action
either prospectively or retroactively. Distributions and the transactions
referred to above may be subject to state and local income tax, and the
treatment thereof may differ from the Federal tax treatment discussed herein.
Shareholders are advised to consult with their tax advisor or attorney.
TAX-SHELTERED RETIREMENT PLANS
Shares of the Fund and other Phoenix Funds may be offered in connection
with employer-sponsored 401(k) plans. Adviser and its affiliates may provide
administrative services to these plans and to their participants, in addition
to the services that Adviser and its affiliates provide to the Phoenix Funds,
and receive compensation therefor. For information on the terms and
conditions applicable to employee participation in such plans, including
information on applicable plan administrative charges and expenses,
prospective investors should consult the plan documentation and employee
enrollment information which is available from participating employers.
THE DISTRIBUTOR
Pursuant to a Distribution Agreement with the Fund, Phoenix Equity
Planning Corporation (the "Distributor"), a direct wholly- owned subsidiary
of Phoenix Duff & Phelps Corporation and an affiliate of Adviser, serves as
distributor for the Fund. The address of the Distributor is P.O. Box 2200,
100 Bright Meadow Blvd., Enfield, Connecticut 06083-2200. As such, the
Distributor conducts a continuous offering pursuant to a "best efforts"
arrangement requiring the Distributor to take and pay for only such
securities as may be sold to the public. The fees are used to compensate
sales and services person for selling shares of the Fund and for providing
services to shareholders. In addition, the fees are used to compensate the
Distributor for sales and promotional activities.
The Distribution Agreement may be terminated at any time on not more than
60 days' written notice, without payment of a penalty, by the Distributor, by
vote of a majority of the outstanding voting securities of the Fund, or by
vote of a majority of the Trustees of the Fund who are not "interested
persons" of the Fund and who have no direct or indirect financial interest in
the operation of the Distribution Plan or in any related agreements. The
Distribution Agreement will terminate automatically in the event of its
assignment.
Dealers with whom the Distributor has entered into sales agreements
receive sales charges in accordance with the commission table set forth in
the Prospectus. The Distributor may from time to time pay, from its own
resources or pursuant to the Plans of Distribution described below, a bonus
or other incentive to dealers (other than the Distributor) which employ a
registered representative who sells a minimum dollar amount of the shares of
the Fund during a specific period of time. Such bonus or other incentive may
take the form of payment for travel expenses, including lodging, incurred in
connection with trips taken by qualifying registered representatives and
members of their families to places within or without the United States or
other bonuses such as gift certificates or the cash equivalent of such
bonuses. The Distributor may, from time to time, reallow the entire portion
of the sales charge which it normally retains to individual selling dealers.
However, such additional reallowance generally will be made only when the
selling dealer commits to substantial marketing support such as internal
wholesaling through dedicated personnel, internal communications and mass
mailings.
DISTRIBUTION PLANS
The Fund has adopted separate distribution plans under Rule 12b-1 of the
1940 Act for each class of shares of the Fund (the "Class A Plan," the "Class
B Plan," and collectively the "Plans"). The Plans permit the Fund to
reimburse the Distributor for expenses incurred in connection with activities
intended to promote the sale of shares of each class of shares of the Fund.
Pursuant to the Class A Plan, each Series may reimburse the Distributor
for actual expenses of the Distributor up to 25% of the average daily net
assets of the Class A Shares for such Series. Under the Class B Plan, each
Series may reimburse the Distributor monthly for actual expense of the
Distributor up to 1.00% of the average daily net assets of the Class B Shares
of such Series. Expenditures under the Plans shall consist of: (i)
commissions to sales personnel for selling shares of the Fund: (ii)
compensation, sales incentives and payments to sales, marketing and service
personnel; (iii) payments to broker-dealers and other financial institutions
which have entered into agreements with the Distributor in the form of the
Dealer Agreement for Phoenix Funds for services rendered in connection with
the sale and distribution of shares of the Fund; (iv) payment of expenses
incurred in sales and promotional activities, including advertising
expenditures related to the Fund; (v) the costs of preparing and distributing
promotional materials; (vi) the cost of printing the Fund's Prospectus and
Statement of Additional Information for distribution to potential investors;
and (vii) such other similar services that the Trustees of the Fund
determines are reasonably calculated to result in the sale of shares of the
Fund; provided, however, a portion of such amount paid to the Distributor,
which portion shall be equal to or less than 0.25% annually of the average
daily net assets of the Fund's shares may be paid for reimbursing the costs
of providing services to the shareholders, including assistance in connection
with inquiries related to shareholder accounts (the "Service Fee").
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In order to receive payments under the Plans, participants must meet such
qualifications to be established in the sole discretion of the Distributor,
such as services to the Fund's shareholders; or services providing the Fund
with more efficient methods of offering shares to coherent groups of clients,
members or prospects of a participant; or services permitting bulking of
purchases or sales, or transmission of such purchases or sales by
computerized tape or other electronic equipment; or other processing.
On a quarterly basis, the Trustees of the Fund review a report on
expenditures under the Plans and the purposes for which expenditures were
made. The Trustees conduct an additional, more extensive review annually in
determining whether the Plans will be continued. By its terms, continuation
of the Plans from year to year is contingent on annual approval by a majority
of the Trustees of the Fund and by a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of the Plans or any related
agreements (the "Plan Trustees"). The Plans provide that they may not be
amended to increase materially the costs which the Fund may bear pursuant to
the Plans without approval of the shareholders of the Fund and that other
material amendments to the Plans must be approved by a majority of the Plan
Trustees by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plans further provides that while it is in
effect, the selection and nomination of Trustees who are not "interested
persons" shall be committed to the discretion of the Trustees who are not
"interested persons." The Plans may be terminated at any time by vote of a
majority of the Plan Trustees or a majority of the outstanding shares of the
Fund.
TRUSTEES AND OFFICERS
The following table sets forth information concerning the Trustees and
executive officers of the Fund, including their principal occupations during
the past five years. Unless otherwise noted, the address of each Trustee and
executive officer is One American Row, Hartford, Connecticut 06115.
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
----------------------------- --------------- -----------------------------------------------------------
<S> <C> <C>
C. Duane Blinn (68) Trustee Partner in the law firm of Day, Berry & Howard.
Day, Berry & Howard Director/Trustee, Phoenix Funds (1980-present). Trustee,
CityPlace Phoenix Duff & Phelps Institutional Mutual Funds
Hartford, CT 06103 (1996-present). Director/Trustee, the National Affiliated
Investment Companies (until 1993).
Robert Chesek (62) Trustee Trustee/Director, Phoenix Funds (1981-present) and
49 Old Post Road Chairman (1989-1994). Director/Trustee, the National
Wethersfield, CT 06109 Affiliated Investment Companies (until 1993). Vice
President, Common Stock, Phoenix Home Life Mutual
Insurance Company (1980-1994). Trustee, Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present).
15
<PAGE>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
----------------------------- --------------- -----------------------------------------------------------
E. Virgil Conway (67) Trustee Trustee/Director, Consolidated Edison Company of New York,
9 Rittenhouse Road Inc. (1970-present), Pace University (1978-present),
Bronxville, NY 10708 Atlantic Mutual Insurance Company (1974-present), HRE
Properties (1989-present), Greater New York Councils, Boy
Scouts of America (1985-present), Union Pacific Corp.
(1978-present), Blackrock Fund for Fannie Mae Mortgage
Securities (Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr.,
Foundation (1995-present), and The Harlem Youth
Development Foundation (1987-present). Chairman,
Metropolitan Transportation Authority (1992-present).
Chairman, Audit Committee of the City of New York
(1981-present). Director/Trustee, the National Affiliated
Investment Companies (until 1993). Director/Trustee,
Phoenix Funds (1993-present). Trustee, Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present).
Director, Duff & Phelps Utilities Tax-Free Income Inc. and
Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Director, Accuhealth (1994-present),
Trism, Inc. (1994-present), Realty Foundation of New York
(1972-present) and Chairman, New York Housing Partnership
Development Corp. (1981-present). Advisory Director, Fund
Directions (1993-present).
Harry Dalzell-Payne (67) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee,
330 East 39th Street Phoenix Duff & Phelps Institutional Mutual Funds (1996 to
Apartment 29G present). Director, Farragut Mortgage Co., Inc.
New York, NY 10022 (1991-1994). Director/Trustee, the National Affiliated
Investment Companies (1983-1993). Formerly a Major General
of the British Army.
*Francis E. Jeffries (65) Trustee Director and Chairman of the Board, Phoenix Duff & Phelps
Phoenix Duff & Phelps Corporation (1995-present). Director/Trustee, Phoenix
Corporation Funds (1995-present). Trustee, Phoenix Duff & Phelps
55 East Monroe Street Institutional Mutual Funds (1996-present). Director, Duff
Suite 3600 & Phelps Utilities Income Fund (1987- present), Duff &
Chicago, IL 60603 Phelps Utilities Tax-Free Income Inc. (1991-present), Duff
& Phelps Utility and Corporate Bond Trust Inc.
(1993-present) and The Empire District Electric Company
(1984-present). Director (1989-1995), Chairman of the
Board (1993-1995), President (1989-1993), and Chief
Executive Officer (1989-1995), Duff & Phelps Corporation.
16
<PAGE>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
----------------------------- --------------- -----------------------------------------------------------
Leroy Keith, Jr. (57) Trustee Chairman and Chief Executive Officer, Carson Products
Chairman and Chief Executive Company (1995-present). Director/Trustee, Phoenix Funds
Officer (1980-present). Trustee, Phoenix Duff & Phelps
Carson Products Company Institutional Mutual Funds (1996-present). Director,
64 Ross Road Equifax Corp. (1991-present), and Keystone International
Savannah, GA 30750 Fund, Inc. (1989-present). Trustee, Keystone Liquid Trust,
Keystone Tax Exempt Trust, Keystone Tax Free Fund, Master
Reserves Tax Free Trust, and Master Reserves Trust.
Director/Trustee, the National Affiliated Investment
Companies (until 1993). Director, Blue Cross/Blue Shield
(1989-1993) and First Union Bank of Georgia (1989-1993).
President, Morehouse College (1987-1994). Chairman and
Chief Executive Officer, Keith Ventures (1992-1995)
*Philip R. McLoughlin (49) Trustee and Director, Vice Chairman and Chief Executive Officer,
One American Row President Phoenix Duff & Phelps Corporation (1995-present). Director
Hartford, CT 06102 (1994-present) and Executive Vice President, Investments
(1987-present), Phoenix Home Life Mutual Insurance
Company. Director/Trustee and President, Phoenix Funds
(1989-present). Trustee, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director
(1983-present) and Chairman (1995-present), Phoenix
Investment Counsel, Inc. Director (1984- present) and
President (1990-present), Phoenix Equity Planning
Corporation. Director, Phoenix Realty Group, Inc.
(1994-present), Phoenix Realty Advisors, Inc.
(1987-present), Phoenix Realty Investors, Inc. (1994-
present), Phoenix Realty Securities, Inc. (1994-present),
Phoenix Founders, Inc. (1981-present), PXRE Corporation
(Delaware) (1985-present), Phoenix Re Corporation (New
York) (1985-1992), World Trust Fund (1991-present).
Director/Trustee, the National Affiliated Investment
Companies (until 1993). Director, Chairman and Chief
Executive Officer, National Securities & Research
Corporation (1993-present) and Director and President,
Phoenix Securities Group, Inc. (1993- present). Director
(1992-present) and President, W.S. Griffith & Co., Inc.
(1992-1994) and Director (1992- present) and President
(1992-1994) Townsend Financial Advisers, Inc. (1992-1994).
Director and Vice President, PM Holdings, Inc.
(1985-present).
17
<PAGE>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
----------------------------- --------------- -----------------------------------------------------------
Everett L. Morris (68) Trustee Vice President, W.H. Reaves and Company (1993- present).
164 Laird Road Director/Trustee, Phoenix Funds (1995- present). Trustee,
Colts Neck, NJ 07722 Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present), and Trustee, Duff & Phelps Mutual Funds
(1994- present). Director, Duff & Phelps Utilities
Tax-Free Income Inc. (1991-present), Duff & Phelps Utility
and Corporate Bond Trust Inc. (1993-present), and Public
Service Enterprise Group, Incorporated (1986-1993).
President and Chief Operating Officer, Enterprise
Diversified Holdings Incorporated (1989- 1993). Senior
Executive Vice President and Chief Financial Officer,
Public Service Electric and Gas Company (1986-1992).
Director, First Fidelity Bank, N.A., N.J. (1984-1991).
James M. Oates (50) Trustee Director, Phoenix Duff & Phelps Corporation (1995-
Managing Director present). Director/Trustee, Phoenix Funds (1987- present).
The Wydown Group Trustee, Phoenix Duff & Phelps Institutional Mutual Funds
50 Congress Street (1996-present). Director, Govett Worldwide Opportunity
Suite 1000 Funds, Inc. (1991- present), Blue Cross and Blue Shield of
Boston, MA 02109 New Hampshire (1994-present), Investors Financial Services
Corporation (1995-present), Investors Bank & Trust
Corporation (1995-present) and Plymouth Rubber Co.
(1995-present). Director/Trustee, the National Affiliated
Investment Companies (until 1993). Director and President
(1984-1994) and Chief Executive Officer (1986-1994),
Neworld Bank.
*Calvin J. Pedersen (54) Trustee Director and President, Phoenix Duff & Phelps Corporation
Phoenix Duff & Phelps (1995-present). Director/Trustee, Phoenix Funds
Corporation (1995-present). Trustee, Phoenix Duff & Phelps
55 East Monroe Street Institutional Mutual Funds (1996-present). President and
Suite 3600 Chief Executive Officer, Duff & Phelps Utilities Tax-Free
Chicago, IL 60603 Income Inc. (1995-present), Duff & Phelps Utilities Income
Fund (1995-present), and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present). Trustee,
Chairman and Chief Executive Officer, Phoenix Duff &
Phelps Mutual Funds (since inception). Director
(1986-1995), President (1993-1995) and Executive Vice
President (1992-1993), Duff & Phelps Corporation.
Philip R. Reynolds (69) Trustee Director/Trustee, Phoenix Funds (1984-present). Director,
43 Montclair Drive Vestaur Securities, Inc. (1972-present). Trustee and
West Hartford, CT 06107 Treasurer, J. Walton Bissell Foundation, Inc.
(1988-present). Director/Trustee, the National Affiliated
Investment Companies (until 1993).
18
<PAGE>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
----------------------------- --------------- -----------------------------------------------------------
Herbert Roth, Jr. (67) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix Duff & Phelps Institutional Mutual Funds
P.O. Box 909 (1996-present). Director, Boston Edison Company
Sherborn, MA 01770 (1978-present), Phoenix Home Life Mutual Insurance Company
(1972-present), Landauer, Inc. (medical services)
(1970-present), Tech Ops./Sevcon, Inc. (electronic
controllers) (1987-present), Key Energy Group (oil rig
service) (1988-1993), and Mark IV Industries (diversified
manufacturer) (1985- present). Director/Trustee, the
National Affiliated Investment Companies (until 1993).
Richard E. Segerson (50) Trustee Director/Trustee, Phoenix Funds, (1993-present). Trustee,
102 Valley Road Phoenix Duff & Phelps Institutional Mutual Funds
New Canaan, CT 06840 (1996-present). Managing Director, Mullin Associates
(1993-present). Vice President and General Manager, Coats
& Clark, Inc. (previously Tootal American, Inc.)
(1991-1993). Director/Trustee, the National Affiliated
Investment Companies (1984-1993).
Lowell P. Weicker, Jr. (65) Trustee Trustee/Director, the Phoenix Funds (1995-present).
Dresing Lierman Weicker Trustee, Phoenix Duff & Phelps Institutional Mutual Funds
6931 Arlington Road (1996-present). Chairman, Dresing, Lierman, Weicker
Suite 501 (1995-present). Director, UST Inc. (1995- present) and
Bethesda, MD 20814 HPSC Inc. (1995-present). Governor of the State of
Connecticut (1991-1995). President and Chief Executive
Officer, Research! America (1989-1990).
Michael E. Haylon (38) Executive Vice Executive Vice President--Investments, Phoenix Duff &
President Phelps Corporation (1995-present). Executive Vice
President, Phoenix Funds (1993-present). Director
(1994-present) and President (1995- present), Executive
Vice President (1994-1995), Vice President (1991-1994),
Phoenix Investment Counsel, Inc. Director and Executive
Vice President (1994- present), Vice President
(1993-1994), National Securities & Research Corporation.
Director, Phoenix Equity Planning Corporation
(1995-present). Vice President, Phoenix Duff & Phelps
Institutional Mutual Funds. Senior Vice President,
Securities Investments, Phoenix Home Life Mutual Insurance
Company (1993-1995). Various other positions with Phoenix
Home Life Mutual Insurance Company (1990-1993).
David R. Pepin (52) Executive Vice Executive Vice President, Phoenix Funds (1996- present).
President Executive Vice President and General Manager, Mutual Fund
Marketing and Operations, Phoenix Duff & Phelps
Corporation (1995-present). Managing Director,
Phoenix-Aberdeen International Advisors, LLC
(1996-present). Director and Executive Vice President,
Phoenix Investment Counsel, Inc. and Phoenix Equity
Planning Corp. (1996-present). Various positions with
Phoenix Home Life Mutual Insurance Company (1994-1995).
Vice President and General Manager, Finance and Health,
Digital Equipment Corporation (1980-1994).
19
<PAGE>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
----------------------------- --------------- -----------------------------------------------------------
Christopher D. Fishwick Senior Vice Director, Aberdeen Trust plc (1991-present), Abtrust Fund
Abtrust Fund Managers LTD President Managers Limited (1991-present), Abtrust Lloyd's Insurance
99 Charterhouse Street Trust plc, Abtrust High Income Trust plc (1994-present),
London EC1M 6AB The Smaller Companies Investment Trust plc (1991-present)
England and The Taverners Trust plc.
Peter Hames Senior Vice Director, Abtrust Fund Manager (Singapore) Limited.
Abtrust Fund Managers LTD President European Fund Manager (1990-1992) and Far East Investment
88A Circular Road Director (1992-present), Abtrust Fund Managers Limited.
Singapore 049439
Gawaine Lewis Senior Vice Director, Abtrust Fund Managers Limited (1994- present).
Abtrust Fund Managers LTD President Portfolio Manager, CIM Fund Managers (1991-1994).
1 Financial Plaza
Ft. Lauderdale, FL 33394
Philip Mottram Senior Vice Director, Abtrust Fund Managers Limited. Director,
Abtrust Fund Managers LTD President European Investments, Liberty Life (1991-1995). Manager,
10 Queen's Terrace Liberty Life Global Special Situations Fund. (1991-1995).
Aberdeen AB10 1QG
Scotland
William J. Newman (57) Senior Vice Executive Vice President, Phoenix Investment Counsel, Inc.
President (1995-present). Senior Vice President, National Securities
& Research Corporation (1995- present), Phoenix Equity
Planning Corporation (1995-present), Phoenix Strategic
Equity Series Fund (1996-present), The Phoenix Edge Series
Fund (1995-present), Phoenix Multi-Portfolio Fund (1995-
present), Phoenix Income and Growth Fund (1996- present),
Phoenix Series Fund (1996-present), Phoenix Total Return
Fund, Inc. (1996-present) and Phoenix Worldwide
Opportunities Fund (1996- present). Vice President, Common
Stock and Chief Investment Strategist, Phoenix Home Life
Mutual Insurance Company (April, 1995-November, 1995).
Chief Investment Strategist, Kidder, Peabody Co., Inc.
(1993-1994). Managing Director, Equities, Bankers Trust
Company (1991-1993). Managing Director, Equities, McKay
Shield (1988-1990).
Hugh Young Senior Vice Far East Investment Director, Abtrust Fund Managers
Abtrust Fund Managers LTD President Limited (1988-present). Managing Director, Abtrust Fund
88A Circular Road Managers (Singapore) Limited (1992- present). Director,
Singapore 049439 Abtrust Asian Smaller Companies Investment Trust plc
(1995-present), Abtrust New Dawn Investment Trust plc
(1989-present), Abtrust New Thai Investment Trust plc
(1989-present), Abtrust Emerging Asia Investment Trust
Limited (1990-present), JF Philippine Fund Inc. and Apollo
Tiger.
20
<PAGE>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
----------------------------- --------------- -----------------------------------------------------------
James M. Dolan (46) Vice President Vice President and Compliance Officer (1994-present), and
100 Bright Meadow Blvd. Assistant Secretary (1981-present), Phoenix Equity
P. O. Box 2200 Planning Corporation. Vice President, Phoenix Funds
Enfield, CT 06083-2200 (1989-present) and Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Vice President (1991-
present), Assistant Clerk and Assistant Secretary
(1982-present), Phoenix Investment Counsel, Inc., Vice
President and Chief Compliance Officer (1994-present),
Phoenix Realty Advisors, Inc. and Chief Compliance Officer
(1995-present), Phoenix Realty Securities, Inc. Assistant
Vice President (1993-1994), Vice President and Compliance
Officer, Assistant Secretary, National Securities &
Research Corporation (1994-present). Vice President, the
National Affiliated Investment Companies (until 1993).
Various other positions with Phoenix Equity Planning
Corporation (1978-1994).
William R. Moyer (52) Vice President Senior Vice President and Chief Financial Officer, Phoenix
100 Bright Meadow Blvd. Duff & Phelps Corporation (1995-present). Senior Vice
P. O. Box 2200 President, Finance (1990-present), Phoenix Equity Planning
Enfield, CT 06083-2200 Corporation and Treasurer (1994-present), and Phoenix
Investment Counsel, Inc. Vice President, Phoenix Funds
(1990-present). Senior Vice President, Finance, PHL Mutual
Funds Holdings, Inc. (1993-present), National Securities &
Research Corporation (1993-present). Senior Vice President
and Chief Financial Officer, W. S. Griffith & Co., Inc.
(1992-present) and Townsend Financial Advisers, Inc.
(1993-present). Vice President, the National Affiliated
Investment Companies (until 1993). Senior Manager, Price
Waterhouse (1983- 1990). Vice President, Investment
Products Finance, Phoenix Home Life Mutual Insurance
Company (1990-1995).
Leonard J. Saltiel (42) Vice President Senior Vice President, Phoenix Equity Planning Corporation
(1994-present). Vice President, Phoenix Funds
(1994-present), National Securities & Research Corporation
(1994-present), and Phoenix Duff & Phelps Institutional
Mutual Funds (1996- present). Vice President, Investment
Operations, Phoenix Home Life Mutual Insurance Company
(1994-1995). Various positions with Home Life Insurance
Company and Phoenix Home Life Mutual Insurance Company
(1987-1994).
G. Jeffrey Bohne (48) Secretary Vice President and General Manager, Phoenix Home Life
101 Munson St. Mutual Insurance Company (1993-present). Vice President,
Greenfield, MA 03101 Transfer Agent Operations, Phoenix Equity Planning
Corporation (1993-present). Secretary, the Phoenix Funds,
(1993-present). Vice President, Home Life Insurance
Company (1984-1992).
21
<PAGE>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
----------------------------- --------------- -----------------------------------------------------------
Nancy G. Curtiss (43) Treasurer Treasurer, Phoenix Funds (1994-present) and Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present). Vice
President, Fund Accounting, Phoenix Equity Planning
Corporation (1994-present). Second Vice President and
Treasurer, Fund Accounts, Phoenix Home Life Mutual
Insurance Company (1994-1995). Various positions with
Phoenix Home Life Mutual Insurance Company (1987-1994).
</TABLE>
*Indicates that the Trustee is an "interested person" of the Fund within the
meaning of the definition set forth in Section 2(a)(19) of the 1940 Act.
For services on the Board of Trustees of the Fund, each Trustee who is not
a full-time employee of the Adviser or any of its affiliates currently
receives a retainer at the annual rate of $36,000 and a fee of $2,000 per
joint meeting of the Boards. Each Trustee who serves on the Audit Committee
receives a retainer at the annual rate of $2,000 and a fee of $2,000 per
joint Audit Committee meeting attended. Each Trustee who serves on the
Nominating Committee receives an annual retainer at the annual rate of $1,000
and a fee of $1,000 per joint Nominating Committee meeting attended. Each
Trustee who serves on the Executive Committee and who is not an interested
person of the Fund receives a retainer at the annual rate of $1,000 and
$1,000 per joint Executive Committee meeting attended. Costs are allocated
equally to each of the series of the Phoenix Funds within the Phoenix Fund
complex (which includes the Fund). The foregoing does not include the
reimbursement of expenses incurred in connection with meeting attendance.
Officers and interested Trustees of the Fund are compensated for their
services by the Adviser and receive no compensation from the Fund.
For the Fund's upcoming fiscal year, the Trustees will receive approximately
the following compensation:
<TABLE>
<CAPTION>
Total
Compensation
Pension or Estimated From Fund and
Retirement Annual Fund Complex
Aggregate Benefits Benefits (10 Funds)
Compensation Accrued as Part Upon Paid to
Name From Fund of Fund Expenses Retirement Trustees
--------------------- ----------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
C. Duane Blinn $1,700 $ 61,500
Robert Chesek $1,500 $ 56,500
E. Virgil Conway $1,750 $104,500
Harry Dalzell-Payne $1,500 $ 98,500
Francis E. Jeffries -- --
Leroy Keith, Jr. $1,500 $ 56,500
Philip R. McLoughlin -- --
Everett L. Morris $1,400 $ 93,500
James M. Oates $1,700 $ 61,500
Calvin J. Pedersen -- --
Philip R. Reynolds $1,500 $ 56,500
Herbert Roth, Jr. $1,850 $ 67,500
Richard E. Segerson $1,700 $ 61,500
Lowell P. Weicker,
Jr. $1,700 $ 61,500
</TABLE>
On September 3, 1996, the Trustees and officers of the Fund beneficially
owned less than 1% of the outstanding shares of the Fund.
22
<PAGE>
OTHER INFORMATION
Independent Accountants
Price Waterhouse LLP has been selected as the independent accountants for the
Fund. Price Waterhouse LLP audits the Fund's annual financial statements and
expresses an opinion thereon.
Custodian and Transfer Agent
Brown Brothers Harriman & Co. serves as custodian of the Fund's assets (the
"Custodian"); Equity Planning acts as Transfer Agent for the Fund (the
"Transfer Agent").
Report to Shareholders
The fiscal year of the Fund ends on July 31. The Fund will send financial
statements to its shareholders at least semiannually. An annual report
containing financial statements audited by the Fund's independent accountants
will be sent to shareholders each year.
Financial Statements
The financial statement for the Fund as of September [], 1996 is incorporated
herein by reference. The financial information relating to the Fund is
available by calling Equity Planning at (800) 243-4361, or by writing to
Equity Planning at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield,
Connecticut 06083-2200.
23
<PAGE>
PHOENIX ABERDEEN SERIES FUND
PART C--OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements:
No financial statements have been included for the Fund.
(b) Exhibits:
<TABLE>
<CAPTION>
<S> <C>
1.1 Declaration of Trust of the Registrant filed via Edgar with the
Registration Statement on June 24, 1996 and incorporated herein by
reference
1.2* Amendment to Declaration of Trust filed via Edgar herewith
2. None
3. None
4. Reference is made to Article IV, Section 4.1 of Registrant's
Declaration of Trust referred to in Exhibit 1.1
5.1 Investment Advisory Agreement between Registrant and Phoenix-Aberdeen
International Advisors, LLC filed via Edgar with the Registration
Statement on June 24, 1996 and incorporated herein by reference
5.2* Sub-Investment Advisory Agreement between Phoenix-Aberdeen
International Advisors, LLC and Phoenix Investment Counsel, Inc. filed
via Edgar herewith
5.3* Sub-Investment Advisory Agreement between Phoenix-Aberdeen
International Advisors, LLC and Aberdeen Fund Managers, Inc. filed via
Edgar herewith
6. Distribution Agreement between Registrant and Phoenix Equity Planning
Corporation filed via Edgar with the Registration Statement on June 24,
1996 and incorporated herein by reference
7. None
8.* Custodian Agreement between Registrant and Brown Brothers Harriman &
Co. filed via Edgar herewith
9.1 Financial Agent Agreement between Registrant and Phoenix Equity
Planning Corporation filed via Edgar with the Registration Statement on
June 24, 1996 and incorporated herein by reference
9.2* Administration Agreement between Registrant and Phoenix Duff & Phelps
Corporation filed via Edgar herewith
9.3 Transfer Agency and Service Agreement between Registrant and Phoenix
Equity Planning Corporation filed via Edgar with the Registration
Statement on June 24, 1996 and incorporated herein by reference
9.4 Sub-Transfer Agent Agreement between Phoenix Equity Planning
Corporation and State Street Bank & Trust Company
10. Opinion of Counsel
11. Consent of Accountants
12. None
13.* Initial Capitalization Agreement filed via Edgar herewith
14. None
15. Rule 12b-1 Distribution Plans filed via Edgar with the Registration
Statement on June 24, 1996 and incorporated herein by reference
16. Schedule for Computation of Performance Quotations
17. Not yet applicable.
18.* Rule 18f-3 Dual Distribution Plan filed via Edgar herewith
19.* Powers of Attorney filed via Edgar herewith
</TABLE>
*Filed herewith
Item 25. Persons Controlled by or under Common Control With Registrant.
As of the date hereof, to the best knowledge of the Registrant, no person is
directly or indirectly controlled by or under common control with the
Registrant.
Item 26. Number of Holders of Securities.
As of August 31, 1996:
<TABLE>
<CAPTION>
Number of
Title of Class Record-holders
-------------------------- -----------------
<S> <C>
New Asia Series
Class A Shares 0
Class B Shares 0
Global Small Cap Series
Class A Shares 0
Class B Shares 0
</TABLE>
C-1
<PAGE>
Item 27. Indemnification.
Please see Article V of the Registrant's Declaration of Trust (incorporated
herein by reference). Registrant's trustees and officers are covered by an
Errors and Omissions Policy. The Investment Advisory Agreement between the
Registrant and its Adviser provides in relevant part that, in the absence of
willful malfeasance, bad faith, gross negligence or reckless disregard of the
obligations or duties under the Investment Advisory Agreement on the part of
the Adviser, the Adviser shall not be liable to the Registrant or to any
shareholder for any act or omission in the course of or connected in any way
with rendering services or for any losses that may be sustained in the
purchase, holding or sale of any security.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, directors, officers and controlling
persons of the Registrant and the investment advisers and distributor
pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a trustee, director, officer, or controlling
person of the Registrant and the principal underwriter in connection with the
successful defense or any action, suit or proceeding) is asserted against the
Registrant by such trustee, director, officer or controlling person or the
Distributor in connection with the shares being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Item 28. Business and Other Connections of Investment Adviser.
See "Management of the Fund" in the Prospectus for information regarding the
business of the Adviser. For information as to the business, profession,
vocation or employment of a substantial nature of directors and officers of
the Adviser, reference is made to the Adviser's current Form ADV (SEC File
Nos. 801-52167) filed under the Investment Advisers Act of 1940, incorporated
herein by reference.
Item 29. Principal Underwriter.
(a) The sole principal underwriter for the Registrant is Phoenix Equity
Planning Corporation.
(b) The directors and executive officers of Phoenix Equity Planning
Corporation, the distributor for Registrant, are as follows:
<TABLE>
<CAPTION>
Name and Position and Offices Position and Offices
Principal Address with Underwriter with Registrant
------------------------- -------------------------- ---------------------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and President Trustee and President
One American Row
Hartford, CT 06115
David R. Pepin Director and Executive None
56 Prospect Street Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Leonard J. Saltiel Senior Vice President Vice President
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
William R. Moyer Senior Vice President, Vice President
100 Bright Meadow Blvd. Finance, and Treasurer
P.O. Box 2200
Enfield, CT 06083-2200
William J. Newman Senior Vice President Senior Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
C-2
<PAGE>
Name and Position and Offices Position and Offices
Principal Address with Underwriter with Registrant
------------------------- -------------------------- ---------------------------
G. Jeffrey Bohne Vice President, Secretary
101 Munson Street Transfer Agent Operations
Greenfield, MA 01301
Nancy G. Curtiss Vice President, Treasurer
56 Prospect Street Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
Maris Lambergs Vice President, National None
100 Bright Meadow Blvd. Sales Manager
P.O. Box 2200
Enfield, CT 06083-2200
James M. Dolan Vice President and Vice President
100 Bright Meadow Blvd. Compliance Officer;
P.O. Box 2200 Assistant Secretary
Enfield, CT 06083-2200
Elizabeth R. Sadowinski Vice President, Field and Assistant Secretary
100 Bright Meadow Blvd. Investor Services
Enfield, CT 06083-2200
Eugene A. Charon Controller None
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
Thomas N. Steenburg Secretary Assistant Secretary
</TABLE>
One American Row
Hartford, CT 06115
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by each principal underwriter who is not an
affiliated person of the Registrant or an affiliated person of such
affiliated person, directly or indirectly, from the Registrant during the
Registrant's last fiscal year.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules thereunder will be maintained at the offices of the Registrant located
at 56 Prospect Street, Hartford, CT 06115, or its investment adviser,
Phoenix-Aberdeen International Advisors, LLC, One American Row, Hartford, CT
06102, or the custodian, Brown Brothers Harriman & Co., 40 Water
Street,Boston, MA 02109. All such accounts, books and other documents
required to be maintained by the principal underwriter will be maintained at
Phoenix Equity Planning Corporation, 100 Bright Meadow Boulevard, Enfield,
Connecticut 06083.
Item 31. Management Services.
None.
Item 32. Undertakings.
(a) Not applicable.
(b) Registrant undertakes to file a post-effective amendment using
financial statements, which need not be certified, within four to six
months from the effective date of the Registrant's Registration
Statement with respect to the Fund.
(c) Registrant undertakes to furnish to each person to whom a prospectus
is delivered a copy of the Registrant's latest annual report to
shareholders upon request and without charge if the information called
for by Item 5A of Form N-1A is contained in such annual report.
(d) Registrant undertakes to provide the information specified pursuant to
Regulation S-K, Item 512 (Reg. S.229.512), as applicable, the terms of
which are incorporated herein by reference.
(e) Registrant undertakes to call a special meeting of shareholders for
the purpose of voting upon the question of removal of a trustee or
trustees and to assist in communications with other shareholders, as
required by Section 16(c) of the 1940 Act, if requested to do so by
holders of at least 10% of a Portfolio's outstanding shares.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to the Registration Statment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Hartford and State of Connecticut
on the 26th day of August, 1996.
PHOENIX-ABERDEEN SERIES FUND
ATTEST: /s/ Richard J. Wirth By: /s/ Philip R. McLoughlin
------------------------- --------------------------
Richard J. Wirth Philip R. McLoughlin
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons
in the capacities indicated, on this 26th day of August, 1996.
<TABLE>
<CAPTION>
Signature Title
------------------------- ------------------------
<S> <C>
Trustee
- ----------------------------
C. Duane Blinn*
Trustee
- ----------------------------
Robert Chesek*
Trustee
- ----------------------------
E. Virgil Conway*
Treasurer (principal
- ---------------------------- financial and
Nancy G. Curtiss* accounting officer)
Trustee
- ----------------------------
Harry Dalzell-Payne*
Trustee
- ----------------------------
Frances E. Jeffries
Trustee
- ----------------------------
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin President and Director
- ----------------------------
Philip R. McLoughlin
Trustee
- ----------------------------
Everett L. Morris
Trustee
- ----------------------------
James M. Oates*
Trustee
- ----------------------------
Calvin J. Pedersen
Trustee
- ----------------------------
Philip R. Reynolds*
Trustee
- ----------------------------
Herbert Roth, Jr.*
Trustee
- ----------------------------
Richard E. Segerson*
Trustee
- ----------------------------
Lowell P. Weicker, Jr.*
</TABLE>
*By: /s/ Philip R. McLoughlin
----------------------------
*Philip R. McLoughlin pursuant to powers of attorney filed herewith.
S-1(c)
PHOENIX-ABERDEEN SERIES FUND
Certificate of Amendment to Declaration of Trust
The undersigned, being all of the Trustees of Phoenix-Aberdeen Series
Fund, a Massachusetts business trust organized under a Declaration of Trust
dated May 31, 1996, acting pursuant to ARTICLE VI Section 6.3 of said
Declaration of Trust for the purpose of changing the name of the
Phoenix-Aberdeen Asian Fund to "Phoenix-Aberdeen New Asia Fund," hereby amend
said Declaration of Trust, effective upon filing of this Certificate of
Amendment in the office of the Secretary of State of the Commonwealth of
Massachusetts, by deleting the first paragraph of Section 3.2 of ARTICLE III
thereof and by inserting in lieu of such paragraph the following paragraph:
"Without limiting the authority of the Trustees set forth in Section 3.1
to establish and designate any further Series, the following two Series
are hereby established and designated: 'Phoenix-Aberdeen New Asia Fund'
and 'Phoenix-Aberdeen Global Small Cap Fund'."
WITNESS our hands this ___ day of _________, 1996.
- --------------------------------- ---------------------------------
Thomas N. Steenburg Richard J. Wirth
c:\wpdoc\aberdeen\000.002
<PAGE>
PHOENIX-ABERDEEN SERIES FUND
SUBADVISORY AGREEMENT
September , 1996
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115
RE: Subadvisory Agreement
Gentlemen:
Phoenix-Aberdeen Series Fund (the "Fund") is a diversified open-end investment
company of the series type registered under the Investment Company Act of 1940
(the "Act"), and is subject to the rules and regulations promulgated thereunder.
The shares of the Fund are offered or may be offered in several series,
including the Phoenix- Aberdeen New Asia Fund and the Phoenix-Aberdeen Global
Small Cap Fund (collectively sometime hereafter referred to as the "Series").
Phoenix-Aberdeen International Advisors, LLC (the "Adviser") evaluates and
recommends series advisers for the Series and is responsible for the day-to-day
management of the Series.
1. Employment as a Subadviser. The Adviser, being duly authorized, hereby
employs Phoenix Investment Counsel, Inc. (the "Subadviser"):
(a)(i) as a discretionary series adviser to manage, upon notification
from the Adviser from time to time, cash, cash equivalents and
short-term investments for each Series upon the terms and conditions
hereafter set forth.
(a)(ii) to furnish officers and other personnel necessary to conduct
the Fund's operations, including specifically but without limitation,
compliance procedures, and to pay the compensation and expenses of
Trustees who are also full-time employees of the Subadviser or any of
its affiliates;
(a)(iii) to prepare and file (A) required filings with the Securities
and Exchange Commission and state securities administrators, including
but not limited to posteffective amendments to the registration
statement of the Fund, annual and
<PAGE>
2
semi-annual reports and all required notices, (B) required filings with
appropriate authorities in the state of organization of the Fund, (C)
proxy statements and other required reports to shareholders of the
Fund, and (D) revisions and updates of the Fund's prospectus;
(a)(iv) generally to provide continuing sponsorship support as the
Fund may direct or require; and
(b) as a discretionary series adviser to invest and reinvest to invest
and reinvest such other assets of such Series as the Adviser shall from
time to time specify (hereafter sometimes called the "Delegated
Assets"), on the terms and conditions set forth herein.
The services of the Subadviser hereunder are not to be deemed
exclusive; the Subadviser may render services to others and engage in
other activities which do not conflict in any material manner in the
Subadviser's performance hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a discretionary series adviser of the Series
and agrees to use its best professional judgment to make investment
decisions for the Series in accordance with the provisions of this
Agreement and as set forth in Schedule D attached hereto and made a
part hereof.
3. Services of Subadviser. In providing management services to the
Series, the Subadviser shall be subject to the investment objectives,
policies and restrictions of the Fund as they apply to the Series and
as set forth in the Fund's then current Prospectus and Statement of
Additional Information (as the same may be modified from time to time
and provided to the Subadviser by Adviser), and to the investment
restrictions set forth in the Act and the Rules thereunder, to the
supervision and control of the Trustees of the Fund (the "Trustees"),
and to instructions from the Adviser. The Subadviser shall not, without
the Fund's prior approval, effect any transactions which would cause
the Series at the time of the transaction to be out of compliance with
any of such restrictions or policies.
4. Transaction Procedures. All series transactions for the Series will
be consummated by payment to, or delivery by, the Custodian(s) from
time to time designated by the Fund (the "Custodian"), or such
depositories or agents as may be designated by the Custodian in
writing, of all cash and/or securities due to or from the Series. The
Subadviser shall not have possession or custody of such cash and/or
securities or any responsibility or liability with respect to such
custody. The Subadviser
<PAGE>
3
shall advise the Custodian and confirm in writing to the Fund all
investment orders for the Series placed by it with brokers and dealers
at the time and in the manner set forth in Schedule A hereto (as
amended from time to time). The Fund shall issue to the Custodian such
instructions as may be appropriate in connection with the settlement of
any transaction initiated by the Subadviser. The Fund shall be
responsible for all custodial arrangements and the payment of all
custodial charges and fees, and, upon giving proper instructions to the
Custodian, the Subadviser shall have no responsibility or liability
with respect to custodial arrangements or the act, omissions or other
conduct of the Custodian.
5. Allocation of Brokerage. The Subadviser shall have authority and
discretion to select brokers and dealers to execute Series transactions
initiated by the Subadviser, and to select the markets on or in which
the transactions will be executed.
A. In placing orders for the sale and purchase of Series securities for
the Fund, the Subadviser's primary responsibility shall be to seek the
best execution of orders at the most favorable prices. However, this
responsibility shall not obligate the Subadviser to solicit competitive
bids for each transaction or to seek the lowest available commission
cost to the Fund, so long as the Subadviser reasonably believes that
the broker or dealer selected by it can be expected to obtain a "best
execution" market price on the particular transaction and determines in
good faith that the commission cost is reasonable in relation to the
value of the brokerage and research services (as defined in Section
28(e)(3) of the Securities Exchange Act of 1934) provided by such
broker or dealer to the Subadviser, viewed in terms of either that
particular transaction or of the Subadviser's overall responsibilities
with respect to its clients, including the Fund, as to which the
Subadviser exercises investment discretion, notwithstanding that the
Fund may not be the direct or exclusive beneficiary of any such
services or that another broker may be willing to charge the Fund a
lower commission on the particular transaction.
B. Subject to the requirements of paragraph A above, the Adviser shall
have the right to require that transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the Adviser and the
Subadviser, shall be executed by brokers and dealers that provide
brokerage or research services to the Fund or that will be of value to
the Fund in the management of its assets, which services and
relationship may, but need not, be of direct benefit to the Series. In
addition, subject to paragraph A above and the applicable Rules of Fair
Practice of the National Association of Securities Dealers, Inc., the
Fund shall have the right to
<PAGE>
4
request that series transactions be executed by brokers and dealers by
or through whom sales of shares of the Fund are made.
C. The Subadviser shall not execute any Series transactions for the
Series with a broker or dealer that is an "affiliated person" (as
defined in the Act) of the Fund, the Subadviser or the Adviser without
the prior written approval of the Fund. The Fund will provide the
Subadviser with a list of brokers and dealers that are "affiliated
persons" of the Fund or Adviser.
6. Proxies. The Fund, or the Adviser as its authorized agent, will vote
all proxies solicited by or with respect to the issuers of securities
in which assets of the Series may be invested. At the request of the
Fund, the Subadviser shall provide the Fund with its recommendations as
to the voting of particular proxies.
7. Fees for Services. The compensation of the Subadviser for its services
under this Agreement shall be calculated and paid by the Adviser in
accordance with the attached Schedule C. Pursuant to the Investment
Advisory Agreement between the Fund and the Adviser, the Adviser is
solely responsible for the payment of fees to the Subadviser.
8. Limitation of Liability. The Subadviser shall not be liable for any
action taken, omitted or suffered to be taken by it in its best
professional judgment, in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement, or in accordance with specific directions or
instructions from the Fund, provided, however, that such acts or
omissions shall not have constituted a breach of the investment
objectives, policies and restrictions applicable to the Series and that
such acts or omissions shall not have resulted from the Subadviser's
willful misfeasance, bad faith or gross negligence, a violation of the
standard of care established by and applicable to the Subadviser in its
actions under this Agreement or a breach of its duty or of its
obligations hereunder (provided, however, that the foregoing shall not
be construed to protect the Subadviser from liability under the Act).
9. Confidentiality. Subject to the duty of the Subadviser and the Fund
to comply with applicable law, including any demand of any regulatory
or taxing authority having jurisdiction, the parties hereto shall treat
as confidential all information pertaining to the Series and the
actions of the Subadviser and the Fund in respect thereof.
<PAGE>
5
10. Assignment. This Agreement shall terminate automatically in the event
of its assignment, as that term is defined in Section 2(a)(4) of the
Act. The Subadviser shall notify the Fund in writing sufficiently in
advance of any proposed change of control, as defined in Section
2(a)(9) of the Act, as will enable the Fund to consider whether an
assignment as defined in Section 2(a)(4) of the Act will occur, and to
take the steps necessary to enter into a new contract with the
Subadviser.
11. Representations, Warranties and Agreements of the Subadviser. The
Subadviser represents, warrants and agrees that:
A. It is registered as an "Investment Adviser" under the
Investment Advisers Act of 1940 ("Advisers Act").
B. It will maintain, keep current and preserve on behalf of
the Fund, in the manner required or permitted by the Act and
the Rules thereunder, the records identified in Schedule B (as
Schedule B may be amended from time to time). The Subadviser
agrees that such records are the property of the Fund, and
will be surrendered to the Fund or to Adviser as agent of the
Fund promptly upon request of either.
C. It has or shall adopt a written code of ethics complying
with the requirements of Rule 17j-l under the Act and will
provide the Fund and Adviser with a copy of the code of ethics
and evidence of its adoption. Subadviser acknowledges receipt
of the written code of ethics adopted by and on behalf of the
Phoenix-Aberdeen Series Fund (the "Code of Ethics"). Within 10
days of the end of each calendar quarter while this Agreement
is in effect, a duly authorized compliance officer of the
Subadviser shall certify to the Fund and to Adviser that the
Subadviser has complied with the requirements of Rule 17j-l
during the previous calendar quarter and that there has been
no violation of its code of ethics, or the Code of Ethics, or
if such a violation has occurred, that appropriate action was
taken in response to such violation. The Subadviser shall
permit the Fund and Adviser to examine the reports required to
be made by the Subadviser under Rule 17j-l(c)(1) and this
subparagraph.
D. Reference is hereby made to the Declaration of Trust dated
May 31, 1996, establishing the Fund, a copy of which has been
filed with the Secretary of the Commonwealth of Massachusetts
and elsewhere as required by law, and to any and all
amendments thereto so filed with the
<PAGE>
6
Secretary of the Commonwealth of Massachusetts and elsewhere
as required by law, and to any and all amendments thereto so
filed or hereafter filed. The name Phoenix-Aberdeen Series
Fund refers to the Trustees under said Declaration of Trust,
as Trustees and not personally, and no Trustee, shareholder,
officer, agent or employee of the Fund shall be held to any
personal liability in connection with the affairs of the Fund;
only the trust estate under said Declaration of Trust is
liable. Without limiting the generality of the foregoing,
neither the Subadviser nor any of its officers, directors,
partners, shareholders or employees shall, under any
circumstances, have recourse or cause or willingly permit
recourse to be had directly or indirectly to any personal,
statutory, or other liability of any shareholder, Trustee,
officer, agent or employee of the Fund or of any successor of
the Fund, whether such liability now exists or is hereafter
incurred for claims against the trust estate.
12. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Subadviser, the Adviser and the Fund, which
amendment, other than amendments to Schedules A, B, and D, is subject
to the approval of the Trustees and the Shareholders of the Fund as and
to the extent required by the Act.
13. Effective Date; Term. This Agreement shall become effective on the
date set forth on the first page of this Agreement, and shall continue
in effect until the first meeting of the shareholders of the Series,
and, if its renewal is approved at that meeting in the manner required
by the Act, shall continue in effect thereafter only so long as its
continuance has been specifically approved at least annually by the
Trustees in accordance with Section 15(a) of the Investment Company
Act, and by the majority vote of the disinterested Trustees in
accordance with the requirements of Section 15(c) thereof.
14. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or
otherwise upon thirty (30) days' written notice to the other parties,
but any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other parties.
15. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the Commonwealth of Massachusetts.
<PAGE>
7
16. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement shall not be affected thereby, and each and
every term and condition of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
PHOENIX-ABERDEEN SERIES FUND
By:
-------------------------------
Philip R. McLoughlin
President
PHOENIX ABERDEEN INTERNATIONAL
ADVISORS, LLC
By:
---------------------------------
David R. Pepin
Managing Director
By:
---------------------------------
Martin J. Gilbert
Managing Director
ACCEPTED:
PHOENIX INVESTMENT COUNSEL, INC.
By: _________________________________
Michael E. Haylon
President
SCHEDULES: A. Operational Procedures
B. Record Keeping Requirements
C. Fee Schedule
D. Subadviser Functions
201pic.101
<PAGE>
SCHEDULE A
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to Brown Brothers Harriman & Co. (the "Custodian"),
the custodian for the Fund.
The Subadviser must furnish the Custodian with daily information as to executed
trades, or, if no trades are executed, with a report to that effect, no later
than 5 p.m. (Eastern Standard time) on the day of the trade (confirmation
received from broker). The necessary information can be sent via facsimile
machine to the Custodian. Information provided to the Custodian shall include
the following:
1. Purchase or sale;
2. Security name;
3. CUSIP number (if applicable);
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement agent;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Exchange where trade was executed; and
14. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Fund, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Fund. Delivery instructions are as specified by the Custodian. The
Custodian will supply the Subadviser daily with a cash availability report. This
will normally be done by telex so that the Subadviser will know the amount
available for investment purposes.
<PAGE>
SCHEDULE B
RECORDS TO BE MAINTAINED BY THE SUBADVISER
1. (Rule 31a-1(b)(5)) A record of each brokerage order, and all other
series purchases and sales, given by the Subadviser on behalf of the
Fund for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications or
cancellations thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase and
sale of series securities to named brokers or dealers was effected, and
the division of brokerage commissions or other compensation on such
purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers
to:
(a) The Fund,
(b) The Adviser (Phoenix-Aberdeen International Advisors,
LLC)
(c) The Subadviser, and
(d) Any person other than the foregoing.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at such
allocation of purchase and sale orders and such division of
brokerage commissions or other compensation.
D. The name of the person responsible for making the determination
of such allocation and such division of brokerage commissions or
other compensation.
3. (Rule 31a-(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing
the purchase
<PAGE>
or sale of series securities. Where an authorization is made by a
committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part
of this record: any memorandum, recommendation or instruction
supporting or authorizing the purchase or sale of series securities and
such other information as is appropriate to support the authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are
required to be maintained by registered investment advisers by rule
adopted under Section 204 of the Investment Advisers Act of 1940, to
the extent such records are necessary or appropriate to record the
Subadviser's transactions for the Fund.
- --------------------------------------
*Such information might include: current financial information, annual and
quarterly reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal reports
or subadviser review.
<PAGE>
SCHEDULE C
SUBADVISORY FEE
(a) For services provided to the Fund pursuant to paragraph 1(a)
hereof, the Adviser will pay to the Subadviser, on or before the 10th day of
each month, a fee, payable in arrears, at the annual rate of 0.15% of the
average daily net asset values of the Fund, including each of its Series. The
fees shall be prorated for any month during which this agreement is in effect
for only a portion of the month. In computing the fee to be paid to the
Subadviser, the net asset value of the Fund and each Series shall be valued as
set forth in the then current registration statement of the Fund.
(b) For services provided to the Fund pursuant to paragraph 1(b), the
Adviser will pay to the Subadviser, on or before the 10th day of each month, a
fee, payable in arrears, at the annual rate of 0.40% of the average daily net
asset values of the Delegated Assets in such prior month. The fees shall be
prorated for any month during which this agreement is in effect for only a
portion of the month. In computing the fee to be paid to the Subadviser, the net
asset value of the Delegated Assets shall be valued as set forth in the then
current registration statement of the Fund.
<PAGE>
SCHEDULE D
SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the
Series's assets, the Subadviser shall provide, at its own expense:
(a) An investment program for the Series consistent with its
investment objectives based upon the development, review and
adjustment of buy/sell strategies approved from time to time
by the Board of Trustees and Adviser;
(b) Implementation of the investment program for the Series based
upon the foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the
Adviser, with respect to: i) compliance with the Code of Ethics
and the Subadviser's code of ethics; ii) compliance with
procedures adopted from time to time by the Trustees of the Fund
relative to securities eligible for resale under Rule 144A under
the Securities Act of 1933, as amended; iii) diversification of
Series assets in accordance with the then prevailing prospectus
and statement of additional information pertaining to the Series
and governing laws; iv) compliance with governing restrictions
relating to the fair valuation of securities for which market
quotations are not readily available or considered "illiquid" for
the purposes of complying with the Series's limitation on
acquisition of illiquid securities; v) any and all other reports
reasonably requested in accordance with or described in this
Agreement; and, vi) the implementation of the Series's investment
program, including, without limitation, analysis of Series
performance;
(d) Attendance by appropriate representatives of the Subadviser at
meetings requested by the Adviser or Trustees at such time(s) and
location(s) as reasonably requested by the Adviser or Trustees;
and
(e) Participation, overall assistance and support in marketing the
Series, including, without limitation, meetings with pension
fund representatives, broker/dealers who have a sales
agreement with Phoenix Equity Planning Corporation, and other
parties requested by the Adviser.
c:\wpdocs\aberdeen\200\201pic.101
<PAGE>
PHOENIX-ABERDEEN SERIES FUND
SUBADVISORY AGREEMENT
September , 1996
Aberdeen Fund Managers, Inc.
1 Financial Plaza, Suite 2210
NationsBank Tower
Fort Lauderdale, Florida 33394
RE: Subadvisory Agreement
Gentlemen:
Phoenix-Aberdeen Series Fund (the "Fund") is a diversified open-end investment
company of the series type registered under the Investment Company Act of 1940
(the "Act"), and is subject to the rules and regulations promulgated thereunder.
The shares of the Fund are offered or may be offered in several series,
including the Phoenix- Aberdeen New Asia Fund and the Phoenix-Aberdeen Global
Small Cap Fund (collectively sometime hereafter referred to as the "Series").
Phoenix-Aberdeen International Advisors, LLC (the "Adviser") evaluates and
recommends series advisers for the Series and is responsible for the day-to-day
management of the Series.
1. Employment as a Subadviser. The Adviser, being duly authorized, hereby
employs Aberdeen Fund Managers, Inc. (the "Subadviser") as a
discretionary series adviser to invest and reinvest the assets of the
Series, or, in the case of Phoenix- Aberdeen Global Small Cap Fund,
such assets of such Series as the Adviser shall from time to time
specify (hereafter sometimes called the "Delegated Assets"), on the
terms and conditions set forth herein. The services of the Subadviser
hereunder are not to be deemed exclusive; the Subadviser may render
services to others and engage in other activities which do not conflict
in any material manner in the Subadviser's performance hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a discretionary series adviser of the Series
and agrees to use its best professional judgment to make investment
decisions for the Series in
<PAGE>
2
accordance with the provisions of this Agreement and as set forth in
Schedule D attached hereto and made a part hereof.
3. Services of Subadviser. In providing management services to the
Series, the Subadviser shall be subject to the investment objectives,
policies and restrictions of the Fund as they apply to the Series and
as set forth in the Fund's then current Prospectus and Statement of
Additional Information (as the same may be modified from time to time
and provided to the Subadviser by Adviser), and to the investment
restrictions set forth in the Act and the Rules thereunder, to the
supervision and control of the Trustees of the Fund (the "Trustees"),
and to instructions from the Adviser. The Subadviser shall not, without
the Fund's prior approval, effect any transactions which would cause
the Series at the time of the transaction to be out of compliance with
any of such restrictions or policies.
4. Transaction Procedures. All series transactions for the Series will
be consummated by payment to, or delivery by, the Custodian(s) from
time to time designated by the Fund (the "Custodian"), or such
depositories or agents as may be designated by the Custodian in
writing, of all cash and/or securities due to or from the Series. The
Subadviser shall not have possession or custody of such cash and/or
securities or any responsibility or liability with respect to such
custody. The Subadviser shall advise the Custodian and confirm in
writing to the Fund all investment orders for the Series placed by it
with brokers and dealers at the time and in the manner set forth in
Schedule A hereto (as amended from time to time). The Fund shall issue
to the Custodian such instructions as may be appropriate in connection
with the settlement of any transaction initiated by the Subadviser. The
Fund shall be responsible for all custodial arrangements and the
payment of all custodial charges and fees, and, upon giving proper
instructions to the Custodian, the Subadviser shall have no
responsibility or liability with respect to custodial arrangements or
the act, omissions or other conduct of the Custodian.
5. Allocation of Brokerage. The Subadviser shall have authority and
discretion to select brokers and dealers to execute Series transactions
initiated by the Subadviser, and to select the markets on or in which
the transactions will be executed.
A. In placing orders for the sale and purchase of Series securities for
the Fund, the Subadviser's primary responsibility shall be to seek the
best execution of orders at the most favorable prices. However, this
responsibility shall not obligate the Subadviser to solicit competitive
bids for each transaction or to seek the lowest available commission
cost to the Fund, so long as the Subadviser
<PAGE>
3
reasonably believes that the broker or dealer selected by it can be
expected to obtain a "best execution" market price on the particular
transaction and determines in good faith that the commission cost is
reasonable in relation to the value of the brokerage and research
services (as defined in Section 28(e)(3) of the Securities Exchange Act
of 1934) provided by such broker or dealer to the Subadviser, viewed in
terms of either that particular transaction or of the Subadviser's
overall responsibilities with respect to its clients, including the
Fund, as to which the Subadviser exercises investment discretion,
notwithstanding that the Fund may not be the direct or exclusive
beneficiary of any such services or that another broker may be willing
to charge the Fund a lower commission on the particular transaction.
B. Subject to the requirements of paragraph A above, the Adviser shall
have the right to require that transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the Adviser and the
Subadviser, shall be executed by brokers and dealers that provide
brokerage or research services to the Fund or that will be of value to
the Fund in the management of its assets, which services and
relationship may, but need not, be of direct benefit to the Series. In
addition, subject to paragraph A above and the applicable Rules of Fair
Practice of the National Association of Securities Dealers, Inc., the
Fund shall have the right to request that series transactions be
executed by brokers and dealers by or through whom sales of shares of
the Fund are made.
C. The Subadviser shall not execute any Series transactions for the
Series with a broker or dealer that is an "affiliated person" (as
defined in the Act) of the Fund, the Subadviser or the Adviser without
the prior written approval of the Fund. The Fund will provide the
Subadviser with a list of brokers and dealers that are "affiliated
persons" of the Fund or Adviser.
6. Proxies. The Fund, or the Adviser as its authorized agent, will vote
all proxies solicited by or with respect to the issuers of securities
in which assets of the Series may be invested. At the request of the
Fund, the Subadviser shall provide the Fund with its recommendations as
to the voting of particular proxies.
7. Fees for Services. The compensation of the Subadviser for its services
under this Agreement shall be calculated and paid by the Adviser in
accordance with the attached Schedule C. Pursuant to the Investment
Advisory Agreement between the Fund and the Adviser, the Adviser is
solely responsible for the payment of fees to the Subadviser.
<PAGE>
4
8. Limitation of Liability. The Subadviser shall not be liable for any
action taken, omitted or suffered to be taken by it in its best
professional judgment, in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement, or in accordance with specific directions or
instructions from the Fund, provided, however, that such acts or
omissions shall not have constituted a breach of the investment
objectives, policies and restrictions applicable to the Series and that
such acts or omissions shall not have resulted from the Subadviser's
willful misfeasance, bad faith or gross negligence, a violation of the
standard of care established by and applicable to the Subadviser in its
actions under this Agreement or a breach of its duty or of its
obligations hereunder (provided, however, that the foregoing shall not
be construed to protect the Subadviser from liability under the Act).
9. Confidentiality. Subject to the duty of the Subadviser and the Fund
to comply with applicable law, including any demand of any regulatory
or taxing authority having jurisdiction, the parties hereto shall treat
as confidential all information pertaining to the Series and the
actions of the Subadviser and the Fund in respect thereof.
10. Assignment. This Agreement shall terminate automatically in the event
of its assignment, as that term is defined in Section 2(a)(4) of the
Act. The Subadviser shall notify the Fund in writing sufficiently in
advance of any proposed change of control, as defined in Section
2(a)(9) of the Act, as will enable the Fund to consider whether an
assignment as defined in Section 2(a)(4) of the Act will occur, and to
take the steps necessary to enter into a new contract with the
Subadviser.
11. Representations, Warranties and Agreements of the Subadviser. The
Subadviser represents, warrants and agrees that:
A. It is registered as an "Investment Adviser" under the
Investment Advisers Act of 1940 ("Advisers Act").
B. It will maintain, keep current and preserve on behalf of
the Fund, in the manner required or permitted by the Act and
the Rules thereunder, the records identified in Schedule B (as
Schedule B may be amended from time to time). The Subadviser
agrees that such records are the property of the Fund, and
will be surrendered to the Fund or to Adviser as agent of the
Fund promptly upon request of either.
<PAGE>
5
C. It has or shall adopt a written code of ethics complying
with the requirements of Rule 17j-l under the Act and will
provide the Fund and Adviser with a copy of the code of ethics
and evidence of its adoption. Subadviser acknowledges receipt
of the written code of ethics adopted by and on behalf of the
Phoenix-Aberdeen Series Fund (the "Code of Ethics"). Within 10
days of the end of each calendar quarter while this Agreement
is in effect, a duly authorized compliance officer of the
Subadviser shall certify to the Fund and to Adviser that the
Subadviser has complied with the requirements of Rule 17j-l
during the previous calendar quarter and that there has been
no violation of its code of ethics, or the Code of Ethics, or
if such a violation has occurred, that appropriate action was
taken in response to such violation. The Subadviser shall
permit the Fund and Adviser to examine the reports required to
be made by the Subadviser under Rule 17j-l(c)(1) and this
subparagraph.
D. Upon request, the Subadviser will promptly supply the Fund
and Adviser, or such other person as Adviser shall direct,
with any information concerning the Subadviser and its
stockholders, employees and affiliates which the Fund may
reasonably require in connection with reports to the Fund's
Board of Trustees or the preparation of its registration
statement, proxy material, reports and other documents
required to be filed under the Act, the Securities Act of
1933, or under applicable securities laws.
E. Reference is hereby made to the Declaration of Trust dated
May 31, 1996, establishing the Fund, a copy of which has been
filed with the Secretary of the Commonwealth of Massachusetts
and elsewhere as required by law, and to any and all
amendments thereto so filed with the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by
law, and to any and all amendments thereto so filed or
hereafter filed. The name Phoenix-Aberdeen Series Fund refers
to the Trustees under said Declaration of Trust, as Trustees
and not personally, and no Trustee, shareholder, officer,
agent or employee of the Fund shall be held to any personal
liability in connection with the affairs of the Fund; only the
trust estate under said Declaration of Trust is liable.
Without limiting the generality of the foregoing, neither the
Subadviser nor any of its officers, directors, partners,
shareholders or employees shall, under any circumstances, have
recourse or cause or willingly permit recourse to be had
directly or indirectly to any personal, statutory, or other
liability of any shareholder, Trustee, officer, agent or
employee of the Fund or of any
<PAGE>
6
successor of the Fund, whether such liability now exists or is
hereafter incurred for claims against the trust estate.
12. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Subadviser, the Adviser and the Fund, which
amendment, other than amendments to Schedules A, B, and D, is subject
to the approval of the Trustees and the Shareholders of the Fund as and
to the extent required by the Act.
13. Effective Date; Term. This Agreement shall become effective on the
date set forth on the first page of this Agreement, and shall continue
in effect until the first meeting of the shareholders of the Series,
and, if its renewal is approved at that meeting in the manner required
by the Act, shall continue in effect thereafter only so long as its
continuance has been specifically approved at least annually by the
Trustees in accordance with Section 15(a) of the Investment Company
Act, and by the majority vote of the disinterested Trustees in
accordance with the requirements of Section 15(c) thereof.
14. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or
otherwise upon thirty (30) days' written notice to the other parties,
but any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other parties.
15. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the Commonwealth of Massachusetts.
<PAGE>
7
16. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement shall not be affected thereby, and each and
every term and condition of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
PHOENIX-ABERDEEN SERIES FUND
By:
-------------------------------
Philip R. McLoughlin
President
PHOENIX ABERDEEN INTERNATIONAL
ADVISORS, LLC
By:
--------------------------------
David R. Pepin
Managing Director
By:
---------------------------------
Martin J. Gilbert
Managing Director
ACCEPTED:
ABERDEEN FUND MANAGERS, INC.
By: _________________________________
Title:
SCHEDULES: A. Operational Procedures
B. Record Keeping Requirements
C. Fee Schedule
D. Subadviser Functions
201.afm.101
<PAGE>
SCHEDULE A
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to Brown Brothers Harriman & Co. (the "Custodian"),
the custodian for the Fund.
The Subadviser must furnish the Custodian with daily information as to executed
trades, or, if no trades are executed, with a report to that effect, no later
than 5 p.m. (Eastern Standard time) on the day of the trade (confirmation
received from broker). The necessary information can be sent via facsimile
machine to the Custodian. Information provided to the Custodian shall include
the following:
1. Purchase or sale;
2. Security name;
3. CUSIP number (if applicable);
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement agent;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Exchange where trade was executed; and
14. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Fund, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Fund. Delivery instructions are as specified by the Custodian. The
Custodian will supply the Subadviser daily with a cash availability report. This
will normally be done by telex so that the Subadviser will know the amount
available for investment purposes.
<PAGE>
SCHEDULE B
RECORDS TO BE MAINTAINED BY THE SUBADVISER
1. (Rule 31a-1(b)(5)) A record of each brokerage order, and all other
series purchases and sales, given by the Subadviser on behalf of the
Fund for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications or
cancellations thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase and
sale of series securities to named brokers or dealers was effected, and
the division of brokerage commissions or other compensation on such
purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers
to:
(a) The Fund,
(b) The Adviser (Phoenix-Aberdeen International Advisors,
LLC)
(c) The Subadviser, and
(d) Any person other than the foregoing.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
C. Shall describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage
commissions or other compensation.
D. The name of the person responsible for making the determination of
such allocation and such division of brokerage commissions or other
compensation.
3. (Rule 31a-(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase
<PAGE>
or sale of series securities. Where an authorization is made by a
committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part
of this record: any memorandum, recommendation or instruction
supporting or authorizing the purchase or sale of series securities and
such other information as is appropriate to support the authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are
required to be maintained by registered investment advisers by rule
adopted under Section 204 of the Investment Advisers Act of 1940, to
the extent such records are necessary or appropriate to record the
Subadviser's transactions for the Fund.
- --------------------------------------
*Such information might include: current financial information, annual and
quarterly reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal reports
or subadviser review.
<PAGE>
SCHEDULE C
SUBADVISORY FEE
(a) For services provided to Phoenix-Aberdeen New Asia Fund (the "New
Asia Series"), the Adviser will pay to the Subadviser, on or before the 10th day
of each month, a fee, payable in arrears, at the annual rate of 0.40% of the
average daily net asset values of the New Asia Series. The fees shall be
prorated for any month during which this agreement is in effect for only a
portion of the month. In computing the fee to be paid to the Subadviser, the net
asset value of the New Asia Series shall be valued as set forth in the then
current registration statement of the Fund.
(b) For services provided to Phoenix-Aberdeen Global Small Cap Fund
(the "Small Cap Series"), the Adviser will pay to the Subadviser, on or before
the 10th day of each month, a fee, payable in arrears, at the annual rate of
0.40% of the average daily net asset values of the Delegated Assets in such
prior month. The fees shall be prorated for any month during which this
agreement is in effect for only a portion of the month. In computing the fee to
be paid to the Subadviser, the net asset value of the Delegated Assets shall be
valued as set forth in the then current registration statement of the Fund.
<PAGE>
SCHEDULE D
SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the
Series's assets, the Subadviser shall provide, at its own expense:
(a) An investment program for the Series consistent with its
investment objectives based upon the development, review and
adjustment of buy/sell strategies approved from time to time
by the Board of Trustees and Adviser;
(b) Implementation of the investment program for the Series based upon the
foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the Adviser,
with respect to: i) compliance with the Code of Ethics and the
Subadviser's code of ethics; ii) compliance with procedures adopted
from time to time by the Trustees of the Fund relative to securities
eligible for resale under Rule 144A under the Securities Act of 1933,
as amended; iii) diversification of Series assets in accordance with
the then prevailing prospectus and statement of additional information
pertaining to the Series and governing laws; iv) compliance with
governing restrictions relating to the fair valuation of securities
for which market quotations are not readily available or considered
"illiquid" for the purposes of complying with the Series's limitation
on acquisition of illiquid securities; v) any and all other reports
reasonably requested in accordance with or described in this
Agreement; and, vi) the implementation of the Series's investment
program, including, without limitation, analysis of Series
performance;
(d) Attendance by appropriate representatives of the Subadviser at
meetings requested by the Adviser or Trustees at such time(s) and
location(s) as reasonably requested by the Adviser or Trustees; and
(e) Participation, overall assistance and support in marketing the
Series, including, without limitation, meetings with pension
fund representatives, broker/dealers who have a sales
agreement with Phoenix Equity Planning Corporation, and other
parties requested by the Adviser.
c:\wpdocs\aberdeen\200\201afm.101
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
THE PHOENIX-ABERDEEN SERIES FUND
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. Employment of Custodian 1
2. Powers and Duties of the Custodian with respect to Property of the Fund
held by the Custodian 1
2.1 Safekeeping 2
2.2 Manner of Holding Securities 2
2.3 Registration 2
2.4 Purchases 2
2.5 Exchanges 4
2.6 Sales of Securities 4
2.7 Depositary Receipts 5
2.8 Exercise of Rights; Tender Offers 6
2.9 Stock Dividends, Rights, Etc. 6
2.10 Options 6
2.11 Borrowings 8
2.12 Demand Deposit Bank Accounts 8
2.13 Interest Bearing Call or Time Deposits 9
2.14 Futures Contracts 10
2.15 Foreign Exchange Transactions 12
2.16 Stock Loans 13
2.17 Collections 13
2.18 Dividends, Distributions and Redemptions 14
2.19 Proxies, Notices, Etc. 15
2.20 Nondiscretionary Details 15
2.21 Bills 16
2.22 Deposit of Fund Assets in Securities Systems 16
2.23 Other Transfers 18
2.24 Investment Limitations 19
2.25 Custodian Advances 19
2.26 Restricted Securities 21
2.27 Proper Instructions 22
2.28 Segregated Account 23
3. Powers and Duties of the Custodian with Respect to the Appointment of
Subcustodians 24
4. Assistance by the Custodian as to Certain Matters 28
5. Powers and Duties of the Custodian with Respect to its Role as
Recordkeeping Agent 29
5.1 Records 29
5.2 Accounts 29
5.3 Access to Records 29
<PAGE>
-2-
6. Standard of Care and Related Matters 29
6.1 Liability of the Custodian with
Respect to Proper Instructions;
Evidence of Authority; Etc. 30
6.2 Liability of the Custodian with
Respect to Use of Securities Systems
and Foreign Depositories 31
6.3 Standard of Care; Liability;
Indemnification 31
6.4 Reimbursement of Disbursements, Etc. 33
6.5 Security for Obligations to Custodian 33
6.6 Appointment of Agents 34
6.7 Powers of Attorney 34
7. Compensation of the Custodian 35
8. Termination; Successor Custodian 35
9. Amendment 36
10. Governing Law 36
11. Notices 36
12. Binding Effect 37
13. Counterparts 37
14. Miscellaneous 37
</TABLE>
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this __ day of ________, 1996, between THE PHOENIX-ABERDEEN
SERIES FUND (the "Fund") and each of the series listed on Appendix B hereto, as
the same may be amended from time to time (each a "Fund" and collectively the
"Funds") and Brown Brothers Harriman & Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the Fund
held by the Custodian: Except for securities and funds held by any Subcustodians
appointed pursuant to the provisions of Section 3 hereof or held by any Foreign
Depositories (as said term is defined in Section 3) utilized by a
<PAGE>
Subcustodian, the Custodian shall have and perform the following powers and
duties:
2.1 Safekeeping - To keep safely the securities and other assets of the
Fund that have been delivered to the Custodian and, on behalf of the Fund, from
time to time to receive delivery of securities for safekeeping.
2.2 Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form, or (2) in book-entry form by a
Securities System (as said term is defined in Section 2.22) or a Foreign
Depository.
2.3 Registration - To hold registered securities of the Fund, with or
without any indication of fiduciary capacity, provided that securities are held
in an account of the Custodian containing only assets of the Fund or only assets
held as fiduciary or custodian for customers.
2.4 Purchases - Upon receipt of Proper Instructions, as defined in Section
2.27, insofar as funds are available for the purpose, to pay for and receive
securities purchased for the account of the Fund, payment being made only upon
receipt of the securities (1) by the Custodian, or (2) by a clearing corporation
of a national securities exchange of which the Custodian is a member, or (3) by
a Securities System or a Foreign Depository. However, (i) in the case of
repurchase agreements entered into by the Fund, the Custodian (as well as an
Agent) may release funds to a Securities system, a Foreign Depository or a
Subcustodian
- 2 -
<PAGE>
prior to the receipt of advice from the Securities System, Foreign Depository or
Subcustodian that the securities underlying such repurchase agreement have been
transferred by book entry into the Account (as defined in Section 2.22) of the
Custodian (or such Agent) maintained with such Securities System or to the
Foreign Depository or Subcustodian, so long as such payment instructions to the
Securities System, Foreign Depository or Subcustodian include a requirement that
delivery is only against payment for securities, (ii) in the case of foreign
exchange contracts, options, time deposits, call account deposits, currency
deposits, and other deposits, contracts or options pursuant to Sections 2.10,
2.12, 2.13, 2.14 and 2.15, the Custodian may make payment therefor without
receiving an instrument evidencing said deposit, contract or option so long as
such payment instructions detail specific securities to be acquired, and (iii)
in the case of securities as to which payment for the security and receipt of
the instrument evidencing the security are under generally accepted trade
practice or the terms of the instrument representing the security expected to
take place in different locations or through separate parties, such as
commercial paper which is indexed to foreign currency exchange rates,
derivatives and similar securities, the Custodian may make payment for such
securities prior to receipt thereof in accordance with such generally accepted
trade practice or the terms of the instrument representing such security.
Except as specifically permitted in this Agreement or as
- 3 -
<PAGE>
authorized or permitted in Proper Instructions, in any and every case where
payment for purchase of domestic securities for the Fund is made by the
Custodian in advance of receipt of the securities, the Custodian shall be liable
to the Fund for such securities to the same extent as if the securities had been
received by the Custodian.
2.5 Exchanges - Upon receipt of proper instructions, to exchange securities
held by it for the account of the Fund for other securities in connection with
any reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities and to deposit any such securities in accordance with the terms of
any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into an account as permitted in Section
2.3, and may surrender securities for a different number of certificates or
instruments representing the same number of shares or same principal amount of
indebtedness, provided the securities to be issued are to be delivered to the
Custodian.
2.6 Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Custodian with a clearing corporation of a national
- 4 -
<PAGE>
securities exchange of which the Custodian is a member, or (3) by credit to the
account of the Custodian or an Agent of the Custodian with a Securities System
or a Foreign Depository; provided, however, that (i) in the case of delivery of
physical certificates or instruments representing securities, the Custodian may
make delivery to the broker buying the securities, against receipt therefor, for
examination in accordance with "street delivery" custom, provided that the
payment therefor is to be made to the Custodian (which payment may be made by a
broker's check) or that such securities are to be returned to the Custodian, and
(ii) in the case of securities referred to in clause (iii) of the last sentence
of Section 2.4, the Custodian may make settlement, including with respect to the
form of payment, in accordance with generally accepted trade practice relating
to such securities or the terms of the instrument representing said security.
2.7 Depositary Receipts - Upon receipt of proper instructions, to instruct
a Subcustodian or an Agent to surrender securities to the depositary used by an
issuer of American Depositary Receipts or International Depositary Receipts
(hereinafter collectively referred to as "ADRs") for such securities against a
written receipt therefor adequately describing such securities and written
evidence satisfactory to the Subcustodian or Agent that the depositary has
acknowledged receipt of instructions to issue with respect to such securities
ADRs in the name of the Custodian, or a nominee of the Custodian,
- 5 -
<PAGE>
for delivery to the Custodian in Boston, Massachusetts, or at such other place
as the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
2.8 Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
2.9 Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
2.10 Options - Upon receipt of proper instructions or upon receipt of
instructions given pursuant to any agreement relating to an option or as
otherwise provided in any such agreement to
- 6 -
<PAGE>
(i) receive and retain, to the extent provided to the Custodian, confirmations
or other documents evidencing the purchase, sale or writing of an option of any
type on or in respect of a security, securities index or similar form of
property by the Fund; (ii) deposit and maintain in a segregated account, either
physically or by book-entry in a Securities System or Foreign Depository or with
a broker, dealer or other entity, securities, cash or other assets in connection
with options transactions entered into by the Fund; (iii) transfer securities,
cash or other assets to a Securities System, Foreign Depository, broker, dealer
or other entity, as margin (including variation margin) or other security for
the Fund's obligations in respect of any option; and (iv) pay, release and/or
transfer such securities, cash or other assets in accordance with a notice or
other communication evidencing the expiration, termination or exercise of or
default under any such option furnished by The Options Clearing Corporation, by
the securities or options exchange on which such option is traded or by such
broker, dealer or other entity as may be responsible for handling such options
transaction or have authority to give such notice or communication. The
Custodian shall not be responsible for the sufficiency of assets held in any
segregated account established in compliance with applicable margin maintenance
requirements or the performance of the other terms of any agreement relating to
an option. Notwithstanding the foregoing, options on futures contracts and
options to purchase and sell foreign currencies shall be governed by Sections
2.14 and 2.15.
- 7 -
<PAGE>
2.11 Borrowings - Upon receipt of proper instructions, to deliver
securities of the Fund to lenders or their agents as collateral for borrowings
effected by the Fund, provided that such borrowed money is payable to or upon
the Custodian's order as Custodian for the Fund.
2.12 Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund, subject only to draft or order by the
Custodian, and to hold in such account or accounts as a deposit accepted on the
Custodian's books cash, including foreign currency, received for the account of
the Fund other than cash held as deposits with Banking Institutions in
accordance with the following paragraph. The responsibilities of the Custodian
for cash, including foreign currency, of the Fund accepted on the Custodian's
books as a deposit shall be that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open and
operate an additional account(s) in such other banks or trust companies as may
be designated by the Fund in such instructions (any such bank or trust company
so designated by the Fund being referred to hereafter as a "Banking
Institution"), and may deposit cash, including foreign currency, of the Fund in
such account or accounts, provided that such account(s) (hereinafter
collectively referred to as "demand deposit bank accounts") shall be in the name
of the Custodian or a nominee of the Custodian for the account of the Fund or
for the account of the Custodian's customers generally and shall be subject only
to the Custodian's
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draft or order; provided that any such demand deposit bank account shall contain
only assets held by the Custodian as a fiduciary or custodian for the Fund
and/or other customers and that the records of the Custodian shall indicate at
all times the Fund and/or other customers for which such funds are held in such
account and the respective interests therein. Such demand deposit accounts may
be opened with Banking Institutions in the United States and in other countries
and may be denominated in either U. S. Dollars or other currencies as the Fund
may determine. The records for each such account will be maintained by the
Custodian but the deposits in any such account shall not constitute a deposit
liability of the Custodian. All such deposits, including with Subcustodians,
shall be deemed to be portfolio securities of the Fund and accordingly the
responsibility of the Custodian therefor shall be the same as and no greater
than the Custodian's responsibility in respect of other portfolio securities of
the Fund. The authorization by the Fund to appoint a Subcustodian as such shall
also constitute a proper instruction to open a demand deposit bank account
subject to the provisions of this paragraph with such Subcustodian.
2.13 Interest Bearing Call or Time Deposits - To place interest bearing
fixed term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine, in the name of the Custodian or a nominee of the
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<PAGE>
Custodian for the account of the Fund or the account of the Custodian's
customers generally and subject only to the Custodian's draft or order; provided
that any such deposit shall be held in an account containing only assets held by
the Custodian as a fiduciary or custodian for the Fund and/or other customers
and that the records of the Custodian shall indicate at all times the Fund
and/or other customers for which such funds are held in such account and the
respective interests therein. Deposits may be denominated in U. S. Dollars or
other currencies and need not be evidenced by the issuance or delivery of a
certificate to the Custodian, provided that the Custodian shall include in its
records with respect to the assets of the Fund appropriate notation as to the
amount and currency of each such deposit, the accepting Banking Institution and
other appropriate details, and shall retain such forms of advice or receipt
evidencing the deposit, if any, as may be forwarded to the Custodian by the
Banking Institution. Funds, other than those accepted on the Custodian's books
as a deposit, but including those placed with Subcustodians, shall be deemed
portfolio securities of the Fund and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank accounts placed with
other banks, as described in the second paragraph of Section 2.12 of this
Agreement. The responsibility of the Custodian for funds accepted on the
Custodian's books as a deposit shall be that of a U. S. bank for a similar
deposit.
2.14 Futures Contracts - Upon receipt of proper
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instructions or upon receipt of instructions given pursuant to any agreement
relating to a futures contract or an option thereon or as otherwise provided in
any such agreement, to (i) receive and retain, to the extent provided to the
Custodian, confirmations or other documents evidencing the purchase or sale of a
futures contract or an option on a futures contract by the Fund; (ii) deposit
and maintain in a segregated account, either physically or by book-entry in a
Securities System or Foreign Depository, for the benefit of any futures
commission merchant, or pay to such futures commission merchant, securities,
cash or other assets designated by the Fund as initial, maintenance or variation
"margin" deposits intended to secure the Fund's performance of its obligations
under any futures contract purchased or sold or any option on a futures contract
written, purchased or sold by the Fund, in accordance with the provisions of any
agreement relating thereto or the rules of the Commodity Futures Trading
Commission and/or any contract market or any similar organization on which such
contract or option is traded; and (iii) pay, release and/or transfer securities,
cash or other assets into or out of such margin accounts only in accordance with
any such agreement or rules. The Custodian shall not be responsible for the
sufficiency of assets held in any segregated account established in compliance
with applicable margin maintenance requirements or the performance of the other
terms of any agreement relating to a futures contract or an option thereon.
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<PAGE>
2.15 Foreign Exchange Transactions - Pursuant to proper instructions, to
settle foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for the account of the
Fund with such currency brokers or Banking Institutions, including
Subcustodians, as the Fund may direct pursuant to proper instructions. The
Custodian shall be responsible for the transmission of cash and instructions to
and from the currency broker or Banking Institution with which the contract or
option is made, the safekeeping of all certificates and other documents and
agreements evidencing or relating to such foreign exchange transactions as the
Custodian may receive and the maintenance of proper records as set forth in
Section 5.1. In connection with such transactions, as to which Proper
Instructions have been sent, the Custodian is authorized to make free outgoing
payments of cash in the form of U. S. Dollars or foreign currency without
receiving confirmation of a foreign exchange contract or option or confirmation
that the countervalue currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or received. The
Fund accepts full responsibility for its use of third-party foreign exchange
dealers and for execution of said foreign exchange contracts and options and
understands that the Fund shall be responsible for any and all costs and
interest charges which may be incurred by the Fund or the Custodian as a result
of the failure or delay of third parties to deliver foreign exchange.
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<PAGE>
Alternatively, such transactions may be undertaken by the Custodian as
principal, if instructed by the Fund.
Foreign exchange contracts and options, other than those executed with the
Custodian as principal, but including those executed with Subcustodians, shall
be deemed to be portfolio securities of the Fund and the responsibility of the
Custodian therefor shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund. The
responsibility of the Custodian with respect to foreign exchange contracts and
options executed with the Custodian as principal shall be that of a U. S. bank
with respect to a similar contract or option.
2.16 Stock Loans - Upon receipt of proper instructions, to deliver
securities of the Fund, in connection with loans of securities by the Fund, to
the borrower thereof prior to receipt of the collateral, if any, for such
borrowing, provided that for stock loans secured by cash collateral the
Custodian's instructions to any Securities System holding such securities
require that the Securities System may deliver the securities to the borrower
thereof only upon receipt of the collateral for such borrowing.
2.17 Collections - (i) To collect and receive all income, payments of
principal and other payments with respect to the securities held hereunder, and
in connection therewith to deliver the certificates or other instruments
representing the securities to the issuer thereof or its agent when securities
are called,
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<PAGE>
redeemed, retired or otherwise become payable; provided, that the payment is to
be made in such form and manner and at such time, which may be after delivery by
the Custodian of the instrument representing the security, as is in accordance
with the terms of the instrument representing the security, or such proper
instructions as the Custodian may receive, or governmental regulations, the
rules of Securities Systems, Foreign Depositories or other U.S. or foreign
securities depositories and clearing agencies or, with respect to securities
referred to in clause (iii) of the last sentence of Section 2.4, in accordance
with generally accepted trade practice; (ii) to execute ownership and other
certificates and affidavits for all federal and state tax purposes in connection
with receipt of income, principal or other payments with respect to securities
of the Fund or in connection with transfer of securities; and (iii) pursuant to
proper instructions to take such other actions with respect to collection or
receipt of funds or transfer of securities which involve an investment decision.
2.18 Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or
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securities, insofar as available, for the payment of dividends or other
distributions to Fund shareholders. Upon receipt of proper instructions from the
Fund, or upon receipt of instructions from the Shareholder Servicing Agent
(given by such person or persons and in such manner on behalf of the Shareholder
Servicing Agent as the Fund shall have authorized), the Custodian shall release
funds or securities, insofar as available, to the Shareholder Servicing Agent or
as such Agent shall otherwise instruct for payment to Fund shareholders who have
delivered to such Agent a request for repurchase or redemption of their shares
of the Fund.
2.19 Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all
forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions, to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by proper instructions.
2.20 Nondiscretionary Details - Without the necessity of express
authorization from the Fund, (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Fund held by the
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<PAGE>
Custodian except as otherwise directed from time to time by the Directors or
Trustees of the Fund, and (2) to make payments to itself or others for minor
expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
2.21 Bills - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements and
other obligations of the Fund (including but not limited to interest charges,
taxes, management fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
2.22 Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) the Participants Trust Company, (iii) any book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, Subpart B of 31
CFR Part 350, or the book-entry regulations of federal agencies substantially in
the form of Subpart O, or (iv) any other domestic clearing agency registered
with the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and whose use the
Fund has previously approved in writing (each of the foregoing being referred to
in this Agreement as a "Securities System"). Utilization of a Securities System
shall be in accordance with applicable Federal Reserve Board and Securities
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<PAGE>
and Exchange Commission rules and regulations, if any, and subject to the
following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian (provided that
any such agent shall be qualified to act as a custodian of the Fund pursuant to
the Investment Company Act of 1940 and the rules and regulations thereunder), in
a Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not include any assets of the Custodian or Agent other than assets held as a
fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of the
Fund upon (i) receipt of advice from the Securities System that such securities
have been transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and transfer for the account of
the Fund. The Custodian shall transfer securities sold for the account of the
Fund upon (i) receipt of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the
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Securities System of transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian or an Agent as
referred to above, and be provided to the Fund at its request. The Custodian
shall furnish the Fund confirmation of each transfer to or from the account of
the Fund in the form of a written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the use
of any such Securities System on behalf of the Fund as promptly as practicable.
2.23 Other Transfers - To deliver securities, funds and other property of
the Fund to a Subcustodian or another custodian as necessary to effect
transactions authorized by proper instructions and upon receipt of proper
instructions, to deliver securities, funds and other property of the Fund to a
Subcustodian or another custodian of the Fund; and, upon receipt
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<PAGE>
of proper instructions, to make such other disposition of securities, funds or
other property of the Fund in a manner other than or for purposes other than as
enumerated elsewhere in this Agreement, provided that the instructions relating
to such disposition shall state the amount of securities to be delivered and the
name of the person or persons to whom delivery is to be made.
2.24 Investment Limitations - In performing its duties generally, and more
particularly in connection with the purchase, sale and exchange of securities
made by or for the Fund, the Custodian may assume unless and until notified in
writing to the contrary that proper instructions received by it are not in
conflict with or in any way contrary to any provisions of the Fund's Declaration
of Trust or Certificate of Incorporation or By-Laws (or comparable documents) or
votes or proceedings of the shareholders or Trustees or Directors of the Fund.
The Custodian shall in no event be liable to the Fund and shall be indemnified
by the Fund for any violation which occurs in the course of carrying out
instructions given by the Fund of any investment limitations to which the Fund
is subject or other limitations with respect to the Fund's powers to make
expenditures, encumber securities, borrow or take similar actions affecting the
Fund.
2.25 Custodian Advances - In the event that the Custodian is directed by
proper instructions to make any payment or transfer of funds on behalf of the
Fund for which there would be, at the close of business on the date of such
payment or
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<PAGE>
transfer, insufficient funds held by the Custodian on behalf of the Fund, the
Custodian may, in its discretion without further proper instructions, provide an
advance ("Advance") to the Fund in an amount sufficient to allow the completion
of the transaction by reason of which such payment or transfer of funds is to be
made. In addition, in the event the Custodian is directed by proper instructions
to make any payment or transfer of funds on behalf of the Fund as to which it is
subsequently determined that the Fund has overdrawn its cash account with the
Custodian as of the close of business on the date of such payment or transfer,
said overdraft shall constitute an Advance. Any Advance shall be payable on
demand by Custodian, unless otherwise agreed by the Fund and the Custodian, and
shall accrue interest from the date of the Advance to the date of payment by the
Fund at a rate agreed upon from time to time by the Custodian and the Fund. It
is understood that any transaction in respect of which the Custodian shall have
made an Advance, including but not limited to a foreign exchange contract or
transaction in respect of which the Custodian is not acting as a principal, is
for the account of and at the risk of the Fund, and not, by reason of such
Advance, deemed to be a transaction undertaken by the Custodian for its own
account and risk. The Custodian and the Fund acknowledge that the purpose of
Advances is to finance temporarily the purchase or sale of securities for prompt
delivery in accordance with the settlement terms of such transactions or to meet
emergency expenses not reasonably foreseeable by the Fund.
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2.26 Restricted Securities - In the case of a "restricted security", the
Fund shall have the responsibility to provide to or obtain for the Custodian,
the issuer of the security or other appropriate third party any necessary
documentation, including without limitation, legal opinions or consents, and to
take any necessary actions required in connection with the registration of
restricted securities in the manner provided in Section 2.3 upon acquisition
thereof by the Fund or required in connection with any sale or other disposition
thereof by the Fund. Upon acquisition and until so registered, the Custodian
shall have no duty to service such restricted securities, including without
limitation, the receipt and collection of cash and stock dividends, rights and
other items of like nature, nor shall the Custodian have responsibility for the
inability of the Fund to exercise in a timely manner any right in respect of any
restricted security or to take any action in a timely manner in respect of any
other type of corporate action relating to a restricted security. Similarly, the
Custodian shall not have responsibility for the inability of the Fund to sell or
otherwise transfer in a timely manner any restricted security in the absence of
any such documentation or action to be provided, obtained or taken by the Fund.
At such time as the Custodian shall receive any restricted security, regardless
of when it shall be registered as aforesaid, the Fund shall also deliver to the
Custodian a term sheet summarizing those rights, restrictions or other matters
of which the Custodian should have
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knowledge, such as exercise periods, expiration dates and payment dates, in
order to assist the Custodian in servicing such securities. As used herein, the
term "restricted security" shall mean a security which is subject to
restrictions on transfer, whether by reason of contractual restrictions or
federal, state or foreign securities or similar laws, or a security which has
special rights or contractual features which do not apply to publicly-traded
shares of, or comparable interests representing, such security.
2.27 Proper Instructions - Proper instructions shall mean a tested telex
from the Fund or a written request, direction, instruction or certification
signed or initialled on behalf of the Fund by one or more person or persons as
the Board of Trustees or Directors of the Fund shall have from time to time
authorized, provided, however, that no such instructions directing the delivery
of securities or the payment of funds to an authorized signatory of the Fund
shall be signed by such person. Those persons authorized to give proper
instructions may be identified by the Board of Trustees or Directors by name,
title or position and will include at least one officer empowered by the Board
to name other individuals who are authorized to give proper instructions on
behalf of the Fund. Telephonic or other oral instructions or instructions given
by facsimile transmission may be given by any one of the above persons and will
be considered proper instructions if the Custodian reasonably believes them to
have been given by a person authorized to give
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<PAGE>
such instructions with respect to the transaction involved. Oral instructions
will be confirmed by tested telex or in writing in the manner set forth above
but the lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions. The Fund authorizes the
Custodian to tape record any and all telephonic or other oral instructions given
to the Custodian by or on behalf of the Fund (including any of its officers,
Directors, Trustees, employees or agents or any investment manager or adviser or
person or entity with similar reponsibilities which is authorized to give proper
instructions on behalf of the Fund to the Custodian). Proper instructions may
relate to specific transactions or to types or classes of transactions, and may
be in the form of standing instructions.
Proper instructions may include communications effected directly between
electro-mechanical or electronic devices or systems, in addition to tested
telex, provided that the Fund and the Custodian agree to the use of such device
or system.
2.28 Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2.22 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of
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1934 and a member of the National Association of Securities Dealers, Inc. (or
any futures commission merchant registered under the Commodity Exchange Act)
relating to compliance with the rules of the Options Clearing Corporation and of
any registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Fund, (ii) for purposes of segregating cash or securities in
connection with options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies, and (iv) as mutually
agreed from time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment of
Subcustodians: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in writing (1) the
appointment of each Subcustodian and the subcustodian agreement to be entered
into between such Subcustodian and the Custodian, and (2) if the Subcustodian is
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organized under the laws of a country other than the United States, the country
or countries in which the Subcustodian is authorized to hold securities, cash
and other property of the Fund. The Fund hereby further authorizes and instructs
the Custodian and any Subcustodian to utilize such securities depositories
located outside the United States which are approved in writing by the Fund to
hold securities, cash and other property of the Fund (a "Foreign Depository").
Upon such approval by the Fund, the Custodian is authorized on behalf of the
Fund to notify each Subcustodian of its appointment as such.
Those Subcustodians, and the countries where and the Foreign Depositories
through which they or the Custodian may hold securities, cash and other property
of the Fund which the Fund has approved to date are set forth on Appendix A
hereto. Such Appendix shall be amended from time to time as Subcustodians,
and/or countries and/or Foreign Depositories are changed, added or deleted. The
Fund shall be responsible for informing the Custodian sufficiently in advance of
a proposed investment which is to be held in a country not listed on Appendix A,
in order that there shall be sufficient time for the Fund to give the approval
required by the preceding paragraph and for the Custodian to put the appropriate
arrangements in place with such Subcustodian, including negotiation of a
subcustodian agreement and submission of such subcustodian agreement to the Fund
for approval.
If the Fund shall have invested in a security to be held in
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a country before the foregoing procedures have been completed, such security
shall be held by such agent as the Custodian may appoint. In any event, the
Custodian shall be liable to the Fund for the actions of such agent if and only
to the extent the Custodian shall have recovered from such agent for any damages
caused the Fund by such agent. At the request of the Fund, Custodian agrees to
remove any securities held on behalf of the Fund by such agent, if practical, to
an approved Subcustodian. Under such circumstances the Custodian will collect
income and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a Foreign Depository or foreign clearing
agency) or by a Foreign Depository or foreign clearing agency utilized by the
Custodian, notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of Foreign Depositories and foreign clearing agencies, or generally
accepted trade practice in the applicable local market.
With respect to the securities and funds held by a Subcustodian, either
directly or indirectly (including by a Foreign Depository or a foreign clearing
agency), including demand and interest bearing deposits, currencies or other
deposits and foreign exchange contracts as referred to in
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Sections 2.12, 2.13, 2.14 and 2.15, the Custodian shall be liable to the Fund if
and only to the extent that such Subcustodian is liable to the Custodian and the
Custodian recovers under the applicable subcustodian agreement. The Custodian
shall nevertheless be liable to the Fund for its own negligence in transmitting
to any such Subcustodian any instructions received by it from the Fund and for
its own negligence in connection with the delivery of any securities or funds
held by it to any such Subcustodian.
In the event that any Subcustodian appointed pursuant to the provisions of
this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
The Custodian will not amend any subcustodian agreement or
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<PAGE>
agree to change or permit any changes thereunder except upon the prior written
approval of the Fund.
The Custodian may, at any time in its discretion upon notification to the
Fund, terminate any Subcustodian of the Fund in accordance with the termination
provisions under the applicable Subcustodian Agreement, and at the written
request of the Fund, the Custodian will terminate any Subcustodian in accordance
with the termination provisions under the applicable Subcustodian Agreement.
If necessary or desirable, the Custodian may appoint another subcustodian
to replace a Subcustodian terminated pursuant to the foregoing provisions of
this Section 3, such appointment to be made upon approval of the successor
subcustodian by the Fund's Board of Directors or Trustees in accordance with the
provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under the
indemnification provisions of any subcustodian agreement, the Custodian shall
promptly give written notice to the Fund of such claim. No more than thirty days
after written notice to the Fund of the Custodian's intention to make such
payment, the Fund will reimburse the Custodian the amount of such payment except
in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may
assist generally in the preparation of reports to Fund shareholders and others,
audits of accounts, and other ministerial matters of like nature.
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5. Powers and Duties of the Custodian with Respect to its Role as
Recordkeeping Agent: The Custodian shall have and perform the following duties
with respect to recordkeeping:
5.1 Records - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-1 and 31a-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian.
5.2 Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by proper instructions.
5.3 Access to Records - The books and records maintained by the Custodian
pursuant to Sections 5.1 and 5.2 shall at all times during the Custodian's
regular business hours be open to inspection and audit by officers of, attorneys
for and auditors employed by the Fund and by employees and agents of the
Securities and Exchange Commission, provided that all such individuals shall
observe all security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as may be reasonably imposed by the Custodian.
6. Standard of Care and Related Matters:
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6.1 Liability of the Custodian with Respect to Proper Instructions;
Evidence of Authority, Etc. - The Custodian shall not be liable for any action
taken or omitted in reliance upon proper instructions believed by it to be
genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement.
The Custodian shall be entitled to receive and act upon advice of (i)
counsel regularly retained by the Custodian in
- 30 -
<PAGE>
respect of Custodian matters, or (ii) at the expense of the Fund, and upon the
Fund's approval, (x) counsel for the Fund, or (y) such other counsel as the Fund
and the Custodian may agree upon, with respect to all matters, and the Custodian
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
6.2 Liability of the Custodian with Respect to Use of Securities Systems
and Foreign Depositories - With respect to the portfolio securities, cash and
other property of the Fund held by a Securities System or by a Foreign
Depository utilized by the Custodian or any Subcustodian, the Custodian shall be
liable to the Fund only for any loss or damage to the Fund resulting from use of
the Securities System or Foreign Depository if caused by any negligence,
misfeasance or misconduct of the Custodian or any of its Agents (as said term is
defined in Section 6.6) or of any of its or its Agents' employees or from any
failure of the Custodian or any such Agent to enforce effectively such rights as
it may have against the Securities System or Foreign Depository. At the election
of the Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the Securities System, Foreign
Depository or any other person which the Custodian may have as a consequence of
any such loss or damage to the Fund if and to the extent that the Fund has not
been made whole for any such loss or damage.
6.3 Standard of Care; Liability; Indemnification - The Custodian shall be
held only to the exercise of reasonable care
- 31 -
<PAGE>
and diligence in carrying out the provisions of this Agreement, provided that
the Custodian shall not thereby be required to take any action which is in
contravention of any applicable law, rule or regulation or any order or judgment
of any court of competent jurisdiction.
The Fund agrees to indemnify and hold harmless the Custodian and its
nominees from all claims and liabilities (including counsel fees) incurred or
assessed against it or its nominees in connection with the performance of this
Agreement, except such as may arise from its or its nominee's breach of the
relevant standard of conduct set forth in this Agreement. Without limiting the
foregoing indemnification obligation of the Fund, the Fund agrees to indemnify
the Custodian and any nominee in whose name portfolio securities or other
property of the Fund is registered against any liability the Custodian or such
nominee may incur by reason of taxes assessed to the Custodian or such nominee
or other costs, liability or expense incurred by the Custodian or such nominee
resulting directly or indirectly from the fact that portfolio securities or
other property of the Fund is registered in the name of the Custodian or such
nominee.
In no event shall the Custodian incur liability under this Agreement if the
Custodian or any Subcustodian, Securities System, Foreign Depository, Banking
Institution or any agent or entity utilized by any of them is prevented,
forbidden or delayed from performing, or omits to perform, any act or thing
which this Agreement provides shall be performed or omitted to be performed,
- 32 -
<PAGE>
by reason of (i) any Sovereign Risk or (ii) any provision of any present or
future law or regulation or order of the United States of America or any state
thereof, or of any foreign country or political subdivision thereof, or of any
securities depository or clearing agency which operates a central system for
handling of securities or equivalent book-entries in a country or which operates
a transnational system for the central handling of securities or equivalent
book-entries, or (iii) any provision of any order or judgment of any court of
competent jurisdiction. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
6.4 Reimbursement of Disbursements, Etc. - The Custodian shall be entitled
to receive reimbursement from the Fund on demand, in the manner provided in
Section 7, for its cash disbursements, expenses and charges (including the fees
and expenses of any Subcustodian or any Agent) in connection with this
Agreement, but excluding salaries and usual overhead expenses.
6.5 Security for Obligations to Custodian - If the
- 33 -
<PAGE>
Custodian or any nominee thereof shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement (collectively a "Liability"), except such as may arise from
its or such nominee's breach of the relevant standard of conduct set forth in
this Agreement, or if the Custodian shall make any Advance to the Fund, then in
such event any property at any time held for the account of the Fund by the
Custodian or a Subcustodian shall be security for such Liability or for such
Advance and the interest thereon, and if the Fund shall fail to pay such Advance
or interest when due or shall fail to reimburse or indemnify the Custodian
promptly in respect of a Liability, the Custodian shall be entitled to utilize
available cash and to dispose of the Fund's property, including securities, to
the extent necessary to obtain repayment, reimbursement or indemnification.
6.6 Appointment of Agents - The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
as its agent (an "Agent") to carry out such of the provisions of this Agreement
as the Custodian may from time to time direct, provided, however, that the
appointment of such Agent (other than an Agent appointed pursuant to the third
paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this Agreement.
6.7 Powers of Attorney - Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or
- 34 -
<PAGE>
other instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their respective
obligations under this Agreement or any applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 6.4,
shall be billed to the Fund and be paid in cash to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in full
force and effect until terminated by either party by an instrument in writing
delivered or mailed, postage prepaid, to the other party, such termination to
take effect not sooner than seventy five (75) days after the date of such
delivery or mailing. In the event of termination the Custodian shall be entitled
to receive prior to delivery of the securities, funds and other property held by
it all accrued fees and unreimbursed expenses the payment of which is
contemplated by Sections 6.4 and 7, and all Advances and Liabilities, upon
receipt by the Fund of a statement setting forth such fees, expenses, Advances
and Liabilities.
In the event of the appointment of a successor custodian, it is agreed that
the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate
- 35 -
<PAGE>
with the Fund in execution of documents and performance of other actions
necessary or desirable in order to substitute the successor custodian for the
Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and the
Fund may agree in writing from time to time on such provisions interpretative of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. No interpretative or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This Agreement is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or
- 36 -
<PAGE>
mailed postage prepaid to the Fund addressed to the Fund at - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - or to
such other address as the Fund may have designated to the Custodian in writing,
or to the Custodian at 40 Water Street, Boston, Massachusetts 02109, Attention:
Manager, Securities Department, or to such other address as the Custodian may
have designated to the Fund in writing, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure to
the benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
14. Miscellaneous: It is expressly agreed that the obligations of the Fund
hereunder, shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust personally, but bind only
the Trust property as provided in the Declaration of Trust on file with the
Secretary of the Commonwealth of Massachusetts.
- 37 -
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
THE PHOENIX-ABERDEEN BROWN BROTHERS HARRIMAN & CO.
SERIES FUND
By__________________________________ per pro_____________________________
- 38 -
<PAGE>
APPENDIX "B"
TO
CUSTODIAN AGREEMENT
BETWEEN
PHOENIX-ABERDEEN SERIES FUND and BROWN BROTHERS HARRIMAN & CO.
Dated as of_______________________________
The following is a list of Funds for which the Custodian shall serve under a
Custodian Agreement dated as of _________________________, 1996 (the
"Agreement"):
PHOENIX-ABERDEEN NEW ASIA FUND
PHOENIX-ABERDEEN GLOBAL SMALL CAP FUND
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be
executed in its name and on behalf of each such Fund.
PHOENIX-ABERDEEN SERIES FUND BROWN BROTHERS HARRIMAN & CO.
________________________________ ______________________________________
Name: Name:
Title: Title:
<PAGE>
ADMINISTRATION AGREEMENT
AGREEMENT made effective the _______ day of September, 1996, by and
between PHOENIX-ABERDEEN SERIES FUND, a Massachusetts business trust with an
office in Greenfield, Massachusetts, (the "Trust") and PHOENIX DUFF & PHELPS
CORPORATION, a Delaware corporation with an office and principal place of
business in Hartford, Connecticut (the "Administrator").
WITNESSETH:
WHEREAS, the Trust is an open-end, diversified management company duly
registered under the Investment Company Act of 1940, as amended; and
WHEREAS, the Trust requires certain administrative services to be
performed on an ongoing basis and the Administrator is in a position to provide
such services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein the parties hereto agree as follows:
1. Appointment.
Trust hereby engages and appoints Administrator and Administrator
hereby accepts such appointment to perform the services hereafter set forth.
2. Services.
Subject to the direction and control of the Board of Trustees of the
Trust, Administrator shall (a) assist in maintaining office facilities (which
may be in the offices of Administrator or an affiliate but shall be in such
location as Administrator and Trust shall reasonably determine; (b) furnish
clerical services, office supplies and stationery; (c) prepare and file tax
returns of the Trust; (d) monitor the Trust's expense accruals and pay all
expenses upon proper authorization from the Trust; (e) monitor the Trust's
status as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended from time to time; (f) monitor and make
recommendations concerning fidelity bond coverage for the Trust; (g) monitor
compliance with the policies and limitations of the Trust as set forth in the
Trust's Prospectus, Statement of Additional Information, and Declaration of
Trust, provided, however, that the Trust's investment adviser shall remain
responsible for such compliance responsibilities; (h) supervise the external
audit and tax return preparation by the Trust's auditor; and (i) prepare and/or
coordinate all material for the Board of Trustees meetings. In providing
<PAGE>
such services Administrator shall be responsible for all compensation and
expenses of employees, agents and consultants employed or retained for such
purpose, but in no event shall Administrator be responsible for compensation or
expenses of the Trust's investment adviser, transfer agent, distributor, or
financial agent.
3. Compensation. In consideration of the services provided hereunder the Trust
shall pay Administrator a fee, computed daily and payable monthly, at the annual
rate of .15% of the average daily net assets of the Trust, including all series
thereof.
4. Proprietary and Confidential Information. Administrator agrees on behalf of
itself and its employees, agents and consultants to treat confidentially and as
proprietary information of the Trust all records and other information relating
to such Trust (and to its shareholders) and not to use such records and
information for any purpose other than performance of services hereunder without
the prior written consent of the Trust.
5. Limitation of Liability. Administrator shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the matters to which this Agreement applies, except for such loss as
results from willful malfeasanace, bad faith or gross negligence on
Administrator's part in the performance of its duties under this Agreement.
Administrator shall look only to the assets of the Trust for satisfaction of the
Trust's obligations under this Agreement, and neither the Trust's shareholders
nor the Trustees, nor any of the Trust's officers, employees, agents or
consultants, whether past, present or future, shall be personally liable
therefor or for any liability under this Agreement. This Agreement has been made
by, and on behalf of, the Trust, and the obligations of the Trust under this
Agreement are not binding upon the Trustees, shareholders or officers,
employees, agents or consultants of the Trust, but are binding only upon the
assets and property of the Trust.
6. Non-Recourse. Reference is hereby made to the Declaration of Trust dated May
31, 1996, a copy of which has been filed with the Secretary of the Commonwealth
of Massachusetts and elsewhere as required by law, and to any and all amendments
thereto so filed. The name Phoenix-Aberdeen Series Fund refers to the Trustees
under said Declaration of Trust, as Trustees and not personally, and no Trustee,
shareholder, officer, agent or employee of the Trust shall be held to any
personal liability in connection with the affairs of the Trust; only the trust
estate under said Declaration of Trust is liable. Without limiting the
generality of the foregoing, neither the Administrator nor any of its officers,
directors, partners, shareholders or employees shall, under any circumstances,
have recourse or cause or willingly permit recourse to be had directly or
indirectly to any personal, statutory, or other liability of any shareholder,
Trustee, officer, agent or employee of the Trust or of any successor of the
Trust, whether such liability now exists or is hereafter incurred for claims
against the trust estate.
7. Duration and Termination. This Agreement shall become effective as of the
date
<PAGE>
hereof and shall continue in effect from year to year thereafter unless sooner
terminated as hereinafter provided, provided such continuance is specifically
approved at least annually by the Trust's Board of Trustees including a majority
of the Trust's trustees who are not interested persons (as defined in the
Investment Company Act of 1940, as amended) or by vote of a majority of the
outstanding voting securities of the Trust. This Agreement shall automatically
terminate upon its assignment and may be terminated by the Trust at any time
upon not less than sixty (60) days written notice to Administrator. This
Agreement shall be terminable by Administrator at any time upon not less than
sixty (60) day's written notice to the Trust (which notice may be waived by the
Trust).
8. Governing Law. This Agreement shall be governed by and construed according
to the laws of the State of Connecticut without reference to its rules regarding
choice or conflict of laws.
IN WITNESS WHEREOF, the parties have hereunto caused these presents to
be executed as of the day and year first above written.
PHOENIX-ABERDEEN SERIES TRUST
By:__________________________________
PHOENIX DUFF & PHELPS CORPORATION
By:___________________________________
c:\wpdocs\aberdeen\admin.pab
<PAGE>
INITIAL CAPITAL AGREEMENT
May 31, 1996
Phoenix-Aberdeen Series Fund
101 Munson Street
Greenfield, Massachusetts 01301
Dear Sirs:
Phoenix-Aberdeen Series Fund (the "Trust") proposes to issue and sell
shares of beneficial interest of its Series (the "Shares") pursuant to a
registration statement on Form N-1A (the "Registration Statement") filed with
the Securities and Exchange Commission. The undersigned hereby offers to
purchase such number of Shares contemporaneous with the effective date of the
Registration Statement (or such earlier date as may be agreed upon) required in
order to provide the Trust with a net worth of at least $100,000 as required by
Section 14 of the Investment Company Act of 1940, as amended.
The undersigned represents and warrants to the Trust that the Shares
are being acquired by us for investment and not with a view to the resale or
further distribution thereof and that we have no present intention to redeem the
Shares.
Please confirm that the foregoing correctly sets forth our agreement
with the Trust.
Very truly yours,
Phoenix Home Life Mutual Insurance Company
By: _________________________________
David W. Searfoss
Executive Vice President
Confirmed, as of the date first above mentioned.
Phoenix-Aberdeen Series Fund
By: ____________________________
Philip R. McLoughlin
President
c:\wpdocs\aberdeen\200\260.000
PHOENIX-ABERDEEN SERIES FUND
(the "Fund")
PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended ("1940 Act"), this Plan describes the multi-class system for the Fund,
including the separate classes of shares' arrangements for distribution, the
method for allocating expenses to those classes and any related conversion or
exchange privileges applicable to these classes.
Upon the effective date of this Plan, the Fund shall offer multiple
classes of shares, as described herein, pursuant to Rule 18f-3 and this Plan.
2. The Multi-Class Structure
The portfolios of the Fund listed on Schedule A hereto shall offer two
classes of shares, Class A and Class B ("Multi-Class Portfolios"). Shares of the
Multi-Class Portfolios shall represent an equal pro rata interest in the
respective Multi-Class Portfolio and, generally, shall have identical voting,
dividend, liquidation, and other rights, preferences, powers, restrictions,
limitations, qualifications and terms and conditions, except that: (a) each
class shall have a different designation; (b) each class shall bear any Class
Expenses, as defined by Section B, below; (c) each class shall have exclusive
voting rights on any matter submitted to shareholders that relates solely to its
distribution arrangement; and (d) each class shall have separate voting rights
on any matter submitted to shareholders in which the interests of one class
differ from the interests of any other class. In addition, Class A and Class B
shares shall have the features described in Sections a, b, c and d, below.
a. Distribution Plans
The Fund has adopted Distribution Plans pursuant to Rule 12b-1 with
respect to each Multi- Class Portfolio, containing substantially the following
terms:
i. Class A shares of each Multi-Class Portfolio shall
reimburse Phoenix Equity Planning Corporation (the "Distributor") for costs and
expenses incurred in connection with distribution and marketing of shares
thereof, as provided in the Class A Distribution Plan and any supplements
thereto, subject to an annual limit of 0.25% of the average daily net assets of
a Multi- Class Portfolio's Class A shares.
ii. Class B shares of each Multi-Class Portfolio shall
reimburse the Distributor for costs and expenses incurred in connection with
distribution and marketing of shares thereof, as
<PAGE>
- 2 -
provided in the Class B Distribution Plan and any supplements thereto, subject
to an annual limit of 1.00% of the average daily net assets of a Multi-Class
Portfolio's Class B shares.
b. Allocation of Income and Expenses
i. General.
The gross income, realized and unrealized capital gains and
losses and expenses (other than Class Expenses, as defined below) of each
Multi-Class Portfolio shall be allocated to each class on the basis of its net
asset value relative to the net asset value of the Multi-Class Portfolio.
Expenses to be so allocated include expenses of the Fund that are not
attributable to a particular Multi-Class Portfolio or class of a Multi-Class
Portfolio but are allocated to a Multi-Class Portfolio ("Fund Expenses") and
expenses of a particular Multi-Class Portfolio that are not attributable to a
particular class of that Multi-Class Portfolio ("Portfolio Expenses"). Fund
Expenses include, but are not limited to, trustees' fees, insurance costs and
certain legal fees. Portfolio Expenses include, but are not limited to, certain
state registration fees, custodial fees, advisory fees and other expenses
relating to the management of the Multi-Class Portfolio's assets.
ii. Class Expenses.
Expenses attributable to a particular class ("Class Expenses")
shall be limited to: (1) transfer agency fees; (2) stationery, printing,
postage, and delivery expenses relating to preparing and distributing
shareholder reports, prospectuses, and proxy statements; (3) state Blue Sky
registration fees; (4) SEC registration fees; (5) expenses of administrative
personnel and services to the extent related to another category of
class-specific expenses; (6) trustees' fees and expenses; (7) accounting
expenses, auditors' fees, litigation expenses, and legal fees and expenses; and
(8) expenses incurred in connection with shareholder meetings. Expenses
described in subsection (a) of this paragraph must be allocated to the class for
which they are incurred. All other expenses described in this paragraph may be
allocated as Class Expenses, if the Fund's President and Treasurer have
determined, subject to Board approval or ratification, which of such categories
of expenses will be treated as Class Expenses, consistent with applicable legal
principles under the 1940 Act and the Internal Revenue Code of 1986, as amended
("Code"). The difference between the Class Expenses allocated to each share of a
class during a year and the Class Expenses allocated to each share of any other
class during such year shall at all times be less than .50% of the average daily
net asset value of the class of shares with the smallest average net asset
value. The afore-described description of Class Expenses and any amendment
thereto shall be subject to the continuing availability of an opinion of counsel
or a ruling from the Internal Revenue Service to the effect that any such
allocation of expenses or the assessment of higher distribution fees and
transfer agency costs on any class of shares does not result in any dividends or
distributions constituting "preferential dividends" under the Code.
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense or Portfolio Expense as applicable, and in the
<PAGE>
- 3 -
event a Fund Expense or Portfolio Expense becomes allocable as a Class Expense,
it shall be so allocated, subject to compliance with Rule 18f-3 and Board
approval or ratification.
The initial determination of expenses that will be allocated
as Class Expenses and any subsequent changes thereto as set forth in this Plan
shall be reviewed by the Board of Trustees and approved by such Board and by a
majority of the Trustees who are not "interested persons" of the Fund, as
defined in the 1940 Act ("Independent Trustees")
iii. Waivers or Reimbursements of Expenses
Expenses may be waived or reimbursed by the Fund's investment
adviser(s), its principal underwriters, or any other provider of services to a
Multi-Class Portfolio without the prior approval of the Board of Trustees.
c. Exchange Privileges
Shareholders of a Multi-Class Portfolio may exchange shares of a
particular class for shares of the same class in another Multi-Class Portfolio,
at the relative net asset values of the respective shares to be exchanged and
with no sales charge, provided the shares to be acquired in the exchange are, as
may be necessary, qualified for sale in the shareholder's state of residence and
subject to the applicable requirements, if any, as to minimum amount.
d. Conversion Feature
Class B Shares of a Multi-Class Portfolio will automatically convert to
Class A Shares of that portfolio, without sales charge, at the relative net
asset values of each such classes, not later than eight years from the
acquisition of the Class B Shares. The conversion of Class B Shares to Class A
Shares is subject to the continuing availability of an opinion of counsel or a
ruling from the Internal Revenue Service to the effect that the conversion of
shares does not constitute a taxable event under federal income tax law.
3. Board Review
a. Initial Approval
The Board of Trustees, including the Independent Trustees, at
a meeting held on August , 1996, initially approved the Plan based on a
determination that the Plan, including the expense allocation, is in the best
interests of each class and Multi-Class Portfolio individually and of the Fund.
<PAGE>
- 4 -
b. Approval of Amendments
The Plan may not be amended materially unless the Board of
Trustees, the Independent Trustees, have found that the proposed amendment,
including any proposed related expense allocation, is in the best interests of
each class and Multi-Class Portfolio individually and of the Fund.
c. Periodic Review
The Board shall review reports of expense allocations and such
other information as they request at such times, or pursuant to such schedule,
as they may determine consistent with applicable legal requirements.
4. Contracts
Any agreement related to the Multi-Class System shall require the
parties thereto to furnish to the Board of Trustees, upon their request, such
information as is reasonably necessary to permit the Trustees to evaluate the
Plan or any proposed amendment.
5. Effective Date
The Plan, having been reviewed and approved by the Board of Trustees
and the Independent Trustees, shall take effect as of September , 1996.
6. Amendments
The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in Section 3(b) of this
Plan.
<PAGE>
SCHEDULE A
PHOENIX-ABERDEEN SERIES FUND
NEW ASIA SERIES
GLOBAL SMALL CAP SERIES
c:\wpdocs\aberdeen\200\280.000
POWER OF ATTORNEY
I, the undersigned officer of Phoenix-Aberdeen Series Fund, hereby
constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg, or either
of them as my true and lawful attorneys and agents with full power to sign for
me in the capacity indicated below, any or all Registration Statements or
amendments thereto filed with the Securities and Exchange Commission under the
Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix- Aberdeen Series Fund, and hereby ratify and confirm my signature as it
may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Nancy G. Curtiss
- --------------- ------------------------------
Nancy G. Curtiss, Treasurer
Principal Financial and Accounting Officer
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/E. Virgil Conway
- --------------- ------------------------------
E. Virgil Conway, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Harry Danzell-Payne
- --------------- ------------------------------
Harry Dalzell-Payne, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Leroy Keith, Jr.
- --------------- ------------------------------
Leroy Keith, Jr., Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/James M. Oates
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James M. Oates, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Philip R. Reynolds
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Philip R. Reynolds, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Herbert Roth, Jr.
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Herbert Roth, Jr.,Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Richard E. Segerson
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Richard E. Segerson, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/C. Duane Blinn
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C. Duane Blinn, Esq.,Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Robert Chesek
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Robert Chesek, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Lowell P. Weicker
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Lowell P. Weicker, Jr.,Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Everett L. Morris
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Everett L. Morris, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Francis E. Jefferies
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Francis E. Jeffries, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix-Aberdeen
Series Fund, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix-Aberdeen Series Fund, and hereby ratify
and confirm my signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
August 21, 1996 /s/Calvin J. Pedersen
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Calvin J. Pedersen, Trustee
