<PAGE>
JULY 31, 1999
Aberdeen
ANNUAL REPORT
- Phoenix-Aberdeen
New Asia Fund
- Phoenix-Aberdeen
Global Small
Cap Fund
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
[PHOTO]
We are pleased to provide this annual report for the Phoenix-Aberdeen New Asia
Fund and the Phoenix-Aberdeen Global Small Cap Fund for the 12 months ended July
31, 1999. This year has been a particularly volatile period for markets around
the world, and we realize that these dramatic up and down movements may have
caused you some concern. Perhaps the best way to deal with market fluctuations
is to keep in mind a few "basics of investing."
REMAIN FOCUSED ON YOUR LONG-TERM INVESTMENT STRATEGY. Redeeming an investment
when the market drops or a fund's share price falls can work against you over
time. You could miss out on opportunities for your investment to grow when the
market or the fund's share price begins to move up. And over time, that could
make a big difference in how successful you are in achieving your financial
goals.
DIVERSIFY YOUR PORTFOLIO. Spreading your investments among different asset
classes and investment styles helps reduces risk. If one type of investment
doesn't perform well over a certain time period, it may be offset by the good
results of another investment.
TAKE ADVANTAGE OF DOLLAR-COST AVERAGING. You can make market fluctuations work
to your advantage by investing a set amount of money at regular intervals. This
is called dollar-cost averaging, and it means that when prices are low you will
be buying more units and when prices are high, you'll buy less. Periodic
investment plans do not assure a profit or protect against a loss in declining
markets, and this type of plan involves continuous investments in securities
regardless of fluctuating price levels. Investors should consider their
financial ability to continue purchases through periods of low price levels.
Our mission is to help you achieve your long-term financial goals. We believe
that by remaining true to our investment discipline, we will continue to add
value for our shareholders over the long term. Of course, past performance is
not a guarantee of future results.
If you have any questions, please contact your financial advisor or call us at
1-800-243-1574 (option 0), between 8:00 a.m. and 6:00 p.m. Eastern Time, Monday
through Friday.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
JULY 31, 1999
----------------------------------------------------
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to investment
risks, including possible loss of the principal
invested.
----------------------------------------------------
1
<PAGE>
PHOENIX-ABERDEEN NEW ASIA FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The fund is appropriate for investors seeking long-term capital appreciation
by investing primarily in a diversified portfolio of equity securities in
countries throughout Asia but excluding Japan. The fund essentially focuses on
quality companies with strong management, solid growth prospects and attractive
relative valuations. Investors should note that foreign investments pose added
risks such as currency fluctuation, less public disclosure, as well as economic
and political risks.
Q: HOW DID THE FUND PERFORM DURING THIS VOLATILE MARKET ENVIRONMENT?
A: For the 12 months ended July 31, 1999, Class A shares returned 52.94% and
Class B shares returned 51.68% compared with a return of 56.74% for the Fund's
benchmark index, the Morgan Stanley Capital International (MSCI) All Country
(AC) Asia Pacific Free ex Japan Index(1). All performance figures assume
reinvestment of distributions and exclude the effect of sales charges.
Q: WHAT FACTORS MOST AFFECTED THE REGION?
A: A year ago it was difficult to forecast an Asian upturn with any confidence.
Markets were on the floor, and it was symptomatic that good quality stocks were
trading at a discount to the net cash on their balance sheets. However,
governments slowly accepted the necessity of re-structuring, strongly encouraged
by the IMF.
The policy mix has been similar across countries--a mixture of devaluation
followed by high interest rates to stabilize currencies and then government
spending to stimulate demand. At the same time, governments have addressed some
of the core micro-sector problems. The main one has been the accumulation of bad
loans, which was the result of poor bank regulation and inadequate competition.
Efforts have focused on forcing under-capitalized banks to close, merge, or
accept a measure of foreign ownership.
The shake-up of the banks has obviously had ramifications for indebted
customers--those carefree borrowers who once believed they could borrow in cheap
U.S. dollars and could ignore the currency risk. Some of the largest
corporations have accepted the need for business focus. In this sense, like
their Western counterparts, they have moved to sell off non-core activities.
However, there are no ready conclusions. Some have gone through the motions and
remain over-staffed, riddled with excess capacity and, importantly, still have
the same management in charge. These too-big-to-fail companies are usually those
with political connections. Small and medium-sized companies, by contrast, have
had to adapt as a matter of priority.
While it has been possible to make a fair guess as to which companies would
survive, continued contraction in economies through the late summer last year
meant earnings were precarious. Once currencies began to stabilize, however, it
was the region's exporters that benefited first. Many markets then leapt through
the third quarter as investors returned. Gains were somewhat flattened by the
bounce from the low base of markets.
(1) THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) ALL COUNTRY (AC) ASIA
PACIFIC EX JAPAN INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF TOTAL
RETURN PERFORMANCE FOR PACIFIC BASIN COUNTRIES, WITH THE EXCEPTION OF JAPAN.
THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
2
<PAGE>
PHOENIX-ABERDEEN NEW ASIA FUND (CONTINUED)
The past few months have witnessed a succession of upward revisions to
growth expectations. Signs of a revival in Japan's economy, coupled with
continued strong growth in the U.S., have been positive. Evidence that
restructuring is working has also been key. Anecdotal evidence suggests that
consumers are becoming more confident too. These factors, along with a weakening
outlook for Wall Street, have been sufficient to re-ignite foreign investment in
the region. Regional funds have reduced cash positions, while global asset
allocators have upped their Asia weightings. This new wave of buying has caused
markets to surge.
Most countries have benefited. Generally, investors have been drawn to
markets where restructuring has seen economies turn round fastest. Korea,
because of its sorry history of industrial relations and oligarchic
conglomerates, has been the main surprise. The government there has led reforms
that would have once appeared unthinkable. Banks were sold off to foreigners;
stakes released in key companies; and companies told to sell (or swap) assets.
The combination of government threat and bluff has rubbed off successfully on
corporate attitudes. At last, companies are paying more than lip service to
minority shareholders' interest and corporate governance. The management mantra
is no longer to be the biggest but to pay down debt and improve returns.
The Thai government has followed a similar hands-on program, although the
corporate landscape there is very different. Its main achievement was the
passage of a controversial bankruptcy and foreclosure law, which was the
centerpiece of reform commitments made to the IMF. However, the law, which gives
creditors more teeth by shortening the legal process for recovery of assets, has
needed a test case.
Some of the best value has been emerging in Singapore. Traditionally, the
island's relatively advanced economic development has often served to dull its
interest to investors, for faster growth has been available elsewhere. Now its
virtues--clean government, tight corporate regulation, and solvent banks--have
lent it an advantage. Moreover, the government has pushed forward deregulation
and is encouraging more competition. Local banks have been put on notice that
restrictions on foreign operators will be lifted. Share buy-backs are now
permitted. Local and foreign share tranches are being amalgamated. Restructuring
and shareholder value have thus become potent themes behind a sharp bounce in
earnings. In Indonesia, which had been wracked by religious and ethnic violence,
the government has managed to close 38 banks, took over seven more, and agreed
to bail out nine others. This has been the government's strongest step to
revitalize a financial system laid low by non-performing loans. Although this is
encouraging news, political uncertainty casts a huge shadow. The first free
parliamentary election in 44 years just took place this June. The absence of
violence was a good omen, but the real test is the presidential race--an
election to be forged by coalition deal-making rather than in up-country poll
booths. The market has stormed ahead.
Malaysia earned the opprobrium of the investment community after it imposed
capital controls last autumn. Yet the government, in spite of the bad press it
continues to receive, has moved to clean up its banking sector. The central bank
continues to push for a consolidation in the financial sector.
The Hong Kong exchange has behaved as though recovery were just around the
corner. Investors have been scrambling for Internet and telecom stocks that look
cheap compared with
3
<PAGE>
PHOENIX-ABERDEEN NEW ASIA FUND (CONTINUED)
international peers. Look at the underlying economy, though, and conditions
appear bleak. The currency peg has been an impediment to growth. Deprived of the
ability to maneuver exchange rates, the ex-colony has been battered by high
costs (and high real interest rates). Increasingly, it has become dependent on
the mainland for growth, but the combination there of price deflation and
mounting unemployment has presented Beijing with awkward policy choices.
Devaluation is the option that dare not speak its name. Although the threat has
been around for a year, it doesn't mean it has evaporated. In the meantime,
growth is slowing and fiscal stimulus, after the huge injections of the past
couple of years, becomes less feasible.
Q: WHAT CHANGES HAVE BEEN MADE TO THE PORTFOLIO?
A: We have been using market weakness across the region to buy or top-up
holdings, in some cases of companies we had long tracked but had always felt
were too expensive. Restructuring has obviously been a major theme. Some of our
stocks have attracted bids. Disagreement over valuations has limited the scope
for corporate activity.
Our country allocation saw us overweight Australia in the first half.
Companies there outside the resource sector have done well. Lack of exposure to
Asia has helped, but strong domestic growth has also underpinned rising share
prices. In recent months valuations have become a little too rich as investors
have crowded in, and we took profits. We maintain core holdings in financials
(like Commonwealth Bank of Australia and QBE Insurance) and retail and telecom
stocks where good management and the growth potential still exist.
We have stayed neutral in Hong Kong. The majority of our holdings do only a
small proportion of business locally--for instance, Johnson Electric, which
produces micro motors in Hong Kong and China, sells in U.S. dollars. Similarly,
Giordano, a leading regional retailer, has its manufacturing facility in China,
with over half of its sales outside of Hong Kong.
In north Asia, we were cautious as Korea recovered, though in Kookmin Bank
and Korea Telecom we have found holdings that match our investment criteria. The
recent rally has been liquidity-driven, and buying has been correspondingly
indiscriminate. As in Taiwan now, it may prove opportune to buy on the dips.
India provides an interesting side-play since its economy has marginal
correlation, and low interest rates are creating renewed investor interest.
Q: WHAT IS THE OUTLOOK FOR ASIAN MARKETS?
A: Asian economies appear to be recovering. Nearly every week brings a fresh
upgrade to growth expectations. Markets have seen these revisions as evidence
that company earnings will soon recover, but market rises have been
indiscriminate. Until a recent sell-off, Indonesia was up 70% on the calendar
year--even more if currency appreciation is taken into account.
Such rapid gains partly reflect the shrunken state of markets post-crisis,
in which the effect of relatively small in-flows of capital was immediate and
dramatic. Now that markets have gained some depth, progress will naturally be
less spectacular. That is not to say markets have become over-bought, but
clearly indices cannot continue to surge at the same rate.
We feel that Asia is probably on the threshold of a new bull phase that
could last for some
4
<PAGE>
PHOENIX-ABERDEEN NEW ASIA FUND (CONTINUED)
time. However, there are several preconditions to be met if markets are to
reward investors. Our major reservation is over the pace and sustainability of
recovery. Headline growth figures look good, but it is a legitimate concern that
governments may already be patting themselves on the back. Equity markets have
become a bellwether of success--falsely, because they discount expectations,
which can always change. Government support operations in some markets (like
Taiwan, Hong Kong and China) are anyway distorting.
The only excuse for market intervention is that it may allow investor
profits to be recycled into higher consumption. That would be good because
important indicators like retail sales are still flat. Yet it is an admission of
sorts that economies are not as healthy as they would seem. Indeed, much of the
structural adjustment that markets are now discounting remains to be tackled,
and it falls to governments to push through market opening. Overcapacity is
still rife, and it is a commonplace that some big corporations are hoping to
trade their way out of trouble. In addition, many companies have come to the
market on the back of recent jumps in shares in order to raise new money.
Investors have lapped up the various rights issues and initial public offerings.
Yet for every company with an acquisition policy, there is another that is
simply reshuffling financial assets. Given the dilution to earnings that new
money brings, choosing between these is a matter of importance. Our conviction
is that profits are becoming artificially flattered as last year's writedowns
drop out of year-over-year figures. Real bottom line profit growth is still
scarce. All these factors therefore make the timeframe of recovery open-ended.
Markets are also sensitive to external risks. In particular, rising U.S.
rates could put pressure on currencies, requiring Asian domestic rates to
follow. The yield on some sovereign debt, which acts as a lead indicator of
interest rate movements, has recently climbed even though domestic inflation
across the region is muted. The effect will make bonds (where capital is
guaranteed) more attractive relative to equities. Japan is also a problem area.
Officials there are privately admitting that more government spending will be
required to shift the embattled economy. This is a worry because demand is vital
for regional trade.
One or all of these issues could grow in magnitude. Equally, any trimming in
today's equity levels could signal a major buying opportunity, particularly if
global investors, many of whom have been too intoxicated by Wall Street, can be
persuaded of the case for re-weighting Asia. Local investors have meantime been
trading furiously; lately, profit-taking has left retail latecomers with a
bloody nose. Our view is that any correction in share prices will soon find
price support. Asia is significantly more solid than when we last reported. The
balance of risks has turned in investors' favor, in our view.
AUGUST 19, 1999
5
<PAGE>
PHOENIX-ABERDEEN NEW ASIA FUND
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 7/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 7/31/99 DATE
------- ----------- -----------
<S> <C> <C> <C>
Class A Shares at NAV(2) 52.94% (4.42)% 9/4/96
Class A Shares at POP(3) 45.67 (6.01) 9/4/96
Class B Shares at NAV(2) 51.68 (5.16) 9/4/96
Class B Shares with CDSC(4) 47.84 (6.07) 9/4/96
MSCI AC Asia Pacific Ex Japan
Index(6) 56.74 (3.42) 9/4/96
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period.
(5) This chart illustrates POP returns on Class A shares and CDSC returns for
Class B shares since inception.
(6) The MSCI AC (Morgan Stanley Capital International All Country) Asia Pacific
Ex (Excluding) Japan Index is an unmanaged, commonly used measure of stock
market performance in Asia and the Pacific Basin. The index's performance
does not reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 7/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ABERDEEN NEW ASIA FUND CLASS A (5) PHOENIX-ABERDEEN NEW ASIA FUND CLASS B (5)
<S> <C> <C>
9/4/96 9,525 10,000
7/31/97 10,000 10,437
7/31/98 5,462 5,652
7/31/99 8,353 8,336
<CAPTION>
MSCI AC ASIA PACIFIC EX JAPAN INDEX (6)
<S> <C>
9/4/96 10,000
7/31/97 11,200
7/31/98 5,767
7/31/99 9,039
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
9/4/96 (inception of the Fund) in Class A and Class B shares. The total return
for Class A shares reflects the maximum sales charge of 4.75% on the initial
investment. The total return for Class B shares reflects the CDSC charges which
decline from 5% to 0% over a five year period. Performance assumes dividends and
capital gains are reinvested.
COUNTRY WEIGHTINGS 7/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Hong Kong 22%
Australia 14%
South Korea 12%
Singapore 9%
India 8%
Philippines 8%
Thailand 6%
Other 21%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
Phoenix-Aberdeen New Asia Fund
TEN LARGEST EQUITY HOLDINGS AT JULY 31, 1999 (AS A PERCENTAGE OF TOTAL NET
ASSETS)
<TABLE>
<C> <S> <C>
1. Giordano International Ltd. 5.5%
HONG KONG MANUFACTURER AND RETAILER OF CASUAL APPAREL
2. Pohang Iron & Steel Co. Ltd. 5.0%
KOREAN STEEL PRODUCER FOR THE CONSTRUCTION AND SHIPPING INDUSTRIES
3. United Overseas Bank Ltd. 3.5%
PROVIDES A FULL RANGE OF COMMERCIAL BANKING AND FINANCIAL SERVICES
WITHIN SINGAPORE
4. Korea Telecom Corp. 3.4%
KOREAN TELECOMMUNICATIONS OPERATOR
5. QBE Insurance Group Ltd. 3.3%
REGIONAL INSURANCE COMPANY OPERATING FROM AUSTRALIA
6. BRL Hardy Ltd. 3.2%
OWNS AND OPERATES VINEYARDS IN AUSTRALIA
7. PT Indosat 2.9%
PROVIDES TELECOMMUNICATIONS SERVICES IN INDONESIA
8. Swire Pacific Ltd. Class B 2.9%
OPERATOR OF TRANSPORT AND TRADING SERVICES IN THE CHINA SEA REGION
9. HSBC Holdings PLC 2.8%
INTERNATIONAL BANKING ORGANIZATION WITH SIGNIFICANT OPERATIONS IN
ASIA
10. Robinson & Co. Ltd. 2.6%
SINGAPORE DEPARTMENT STORE OPERATOR
</TABLE>
INVESTMENTS AT JULY 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--98.3%
AUSTRALIA--13.8%
Australian Gas Light Co., Ltd. (Natural
Gas).................................... 40,000 $ 257,288
BRL Hardy Ltd. (Beverages
(Alcoholic))............................ 100,000 400,951
Commonwealth Bank of Australia (Banks
(Major Regional))....................... 13,000 204,759
Leighton Holdings Ltd. (Engineering &
Construction)........................... 60,000 228,346
Pacifica Group Ltd. (Auto Parts &
Equipment).............................. 50,000 220,392
QBE Insurance Group Ltd. (Insurance
(Property-Casualty)).................... 110,000 414,468
--------------
1,726,204
--------------
HONG KONG--21.5%
Axa China Region Ltd. (Insurance
(Life/Health)).......................... 400,000 265,413
CDL Hotels International Ltd.
(Lodging-Hotels)........................ 600,000 231,915
Giordano International Ltd. (Retail
(Specialty-Apparel)).................... 799,000 684,580
Hongkong Electric Holdings Ltd.
(Electric Companies).................... 55,000 173,968
Johnson Electric Holdings Ltd.
(Manufacturing (Diversified))........... 65,000 269,665
Li & Fung Ltd. (Distributors (Food &
Health))................................ 110,000 307,544
Pacific Century Insurance Holdings
(Insurance (Property-Casualty))(b)...... 270,000 201,766
Smartone Telecommunications
(Telecommunications
(Cellular/Wireless)).................... 60,000 199,833
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
HONG KONG--CONTINUED
Swire Pacific Ltd. Class B
(Manufacturing (Diversified))........... 500,000 $ 363,977
--------------
2,698,661
--------------
INDIA--8.3%
BSES Ltd. GDR (Electric Companies)...... 22,000 272,250
ICICI Ltd. Sponsored GDR (Financial
(Diversified)).......................... 25,000 265,625
Mahanagar Telephone Nigam Ltd. Sponsored
GDR (Telecommunications (Long
Distance)).............................. 28,000 296,100
Ranbaxy Laboratories Ltd. GDR (Health
Care (Drugs-Major Pharmaceuticals))..... 10,000 210,000
--------------
1,043,975
--------------
INDONESIA--2.9%
PT Indosat (Telecommunications (Long
Distance)).............................. 220,000 366,812
MALAYSIA--5.5%
Carlsberg Brewery Malaysia Berhad
(Beverages (Alcoholic))(c).............. 75,000 191,943
Malaysian Oxygen Berhad (Chemicals
(Specialty))(c)......................... 95,000 191,351
Sime UEP Properties Berhad (Financial
(Diversified))(c)....................... 271,000 312,100
--------------
695,394
--------------
</TABLE>
See Notes to Financial Statements
7
<PAGE>
Phoenix-Aberdeen New Asia Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
NEW ZEALAND--2.4%
Telecom Corporation of New Zealand Ltd.
(Telephone)............................. 65,000 $ 294,032
PHILIPPINES--7.7%
Ayala Land, Inc. (Financial
(Diversified)).......................... 850,000 242,864
Bank of The Philippine Islands (Banks
(Major Regional))....................... 80,000 241,046
La Tondena Distillers, Inc. (Beverages
(Alcoholic))............................ 225,000 254,228
Philippine Long Distance Telephone Co.
Sponsored ADR (Telecommunications (Long
Distance)).............................. 8,000 233,500
--------------
971,638
--------------
SINGAPORE--9.0%
Clipsal Industries (Holdings) Ltd.
(Electrical Equipment).................. 150,000 214,500
Robinson & Co. Ltd. (Retail (Department
Stores))................................ 100,000 320,804
Singapore Press Holdings Ltd.
(Publishing (Newspapers))............... 9,000 159,333
United Overseas Bank Ltd. (Banks (Major
Regional)).............................. 60,000 438,432
--------------
1,133,069
--------------
SOUTH KOREA--12.2%
Kookmin Bank (Banks (Major Regional))... 20,000 302,460
Korea Telecom Corp. (Telephone)......... 6,000 421,284
Pohang Iron & Steel Co. Ltd. (Iron &
Steel).................................. 5,000 624,116
Seoul City Gas Co. Ltd. (Natural Gas)... 6,000 181,975
--------------
1,529,835
--------------
SRI LANKA--2.6%
John Keells Holdings Ltd. (Beverages
(Alcoholic))............................ 60,000 159,345
National Development Bank Ltd. (Banks
(Major Regional))....................... 100,000 170,527
--------------
329,872
--------------
TAIWAN--1.5%
Standard Foods Taiwan Ltd. GDR
(Foods)(b).............................. 30,864 189,814
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
THAILAND--6.3%
BEC World Public Co. Ltd.
(Entertainment)......................... 35,000 $ 205,086
Hana Microelectronics Public Co., Ltd.
(Electronics (Component
Distributors))(b)....................... 49,100 142,534
Phatra Insurance Public Co. Ltd. Foreign
(Insurance (Property-Casualty))......... 73,700 179,278
Ruam Pattana Fund II (Financial
(Diversified))(b)....................... 1,500,000 262,069
--------------
788,967
--------------
UNITED KINGDOM--4.6%
HSBC Holdings PLC (Financial
(Diversified)).......................... 30,000 353,670
Rowe Evans Investments Group PLC
(Agricultural Products)................. 200,000 218,701
--------------
572,371
--------------
- ---------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $12,784,747) 12,340,644
- ---------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.3%
(IDENTIFIED COST $12,784,747) 12,340,644
- ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ -----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--1.6%
COMMERCIAL PAPER--1.6%
General Re Corp. 5.15%, 8/2/99.......... A-1+ $ 200 199,971
- -------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $199,971) 199,971
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.9%
(IDENTIFIED COST $12,984,718) 12,540,615(a)
Cash and receivables, less liabilities--0.1% 7,847
--------------
NET ASSETS--100.0% $ 12,548,462
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $2,230,961 and gross
depreciation of $2,732,402 for federal income tax purposes. At July 31,
1999, the aggregate cost of securities for federal income tax purposes was
$13,042,056.
(b) Non-income producing.
(c) Security valued at fair value as determined in good faith by or under the
direction of the Trustees.
See Notes to Financial Statements
8
<PAGE>
Phoenix-Aberdeen New Asia Fund
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
Agricultural Products................... 1.7%
Auto Parts & Equipment.................. 1.8
Banks (Major Regional).................. 11.0
Beverages (Alcoholic)................... 8.1
Chemicals (Specialty)................... 1.6
Distributors (Food & Health)............ 2.5
Electric Companies...................... 3.6
Electrical Equipment.................... 1.7
Electronics (Component Distributors).... 1.2
Engineering & Construction.............. 1.9
Entertainment........................... 1.7
Financial (Diversified)................. 11.6
Foods................................... 1.5
Health Care (Drugs-Major
Pharmaceuticals)...................... 1.7
Insurance (Life/Health)................. 2.2
Insurance (Property-Casualty)........... 6.4
Iron & Steel............................ 5.1
Lodging-Hotels.......................... 1.9
Manufacturing (Diversified)............. 5.1
Natural Gas............................. 3.6
Publishing (Newspapers)................. 1.3
Retail (Department Stores).............. 2.6
Retail (Specialty-Apparel).............. 5.5
Telecommunications
(Cellular/Wireless)................... 1.6
Telecommunications (Long Distance)...... 7.3
Telephone............................... 5.8
------
100.0%
------
------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix-Aberdeen New Asia Fund
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $12,984,718) $ 12,540,615
Cash 1,868
Foreign currency at value
(Identified cost $32,156) 34,640
Receivables
Dividends and interest 36,952
Receivable from adviser 15,888
Fund shares sold 4,901
Prepaid expenses 203
--------------
Total assets 12,635,067
--------------
LIABILITIES
Payables
Transfer agent fee 10,563
Financial agent fee 7,252
Trustees' fee 6,557
Distribution fee 5,043
Administration fee 1,654
Accrued expenses 55,536
--------------
Total liabilities 86,605
--------------
NET ASSETS $ 12,548,462
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 16,460,366
Distributions in excess of net investment income (49,284)
Accumulated net realized loss (3,420,991)
Net unrealized depreciation (441,629)
--------------
NET ASSETS $ 12,548,462
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $9,067,515) 1,102,404
Net asset value per share $8.23
Offering price per share $8.23/(1-4.75%) $8.64
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $3,480,947) 428,272
Net asset value and offering price per share $8.13
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 308,190
Interest 16,688
Foreign taxes withheld (14,067)
-----------
Total investment income 310,811
-----------
EXPENSES
Investment advisory fee 84,293
Distribution fee, Class A 17,630
Distribution fee, Class B 28,648
Financial agent fee 34,355
Transfer agent 55,099
Custodian 37,298
Professional 31,957
Printing 16,485
Administration fee 14,812
Trustees 14,272
Registration 1,943
Miscellaneous 2,077
-----------
Total expenses 338,869
Less expenses borne by investment adviser (109,130)
-----------
Net expenses 229,739
-----------
NET INVESTMENT INCOME 81,072
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (619,521)
Net realized gain on foreign currency transactions 2,144
Net change in unrealized appreciation (depreciation) on investments 4,769,904
Net change in unrealized appreciation (depreciation) on foreign
currency and foreign currency transactions 3,242
-----------
NET GAIN ON INVESTMENTS 4,155,769
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 4,236,841
-----------
-----------
</TABLE>
See Notes to Financial Statements
10
<PAGE>
Phoenix-Aberdeen New Asia Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
7/31/99 7/31/98
------------ -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 81,072 $ 84,661
Net realized gain (loss) (617,377) (2,539,602)
Net change in unrealized appreciation
(depreciation) 4,773,146 (5,878,425)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,236,841 (8,333,366)
------------ -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (7,556) (119,514)
Net investment income, Class B (1,990) (43,580)
In excess of net investment income,
Class A (65,904) (239,479)
In excess of net investment income,
Class B (17,358) (87,326)
------------ -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (92,808) (489,899)
------------ -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(1,223,989 and 568,922 shares,
respectively) 8,368,949 3,994,745
Net asset value of shares issued from
reinvestment of distributions
(11,699 and
54,456 shares, respectively) 71,364 341,985
Cost of shares repurchased (1,299,843
and 735,511 shares, respectively) (8,708,720) (5,284,710)
------------ -------------
Total (268,407) (947,980)
------------ -------------
CLASS B
Proceeds from sales of shares (81,037
and 146,419 shares, respectively) 538,924 1,054,677
Net asset value of shares issued from
reinvestment of distributions (2,871
and
18,909 shares, respectively) 17,372 118,368
Cost of shares repurchased (165,810
and 272,894 shares, respectively) (991,898) (2,064,578)
------------ -------------
Total (435,602) (891,533)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (704,009) (1,839,513)
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS 3,440,024 (10,662,778)
NET ASSETS
Beginning of period 9,108,438 19,771,216
------------ -------------
END OF PERIOD [INCLUDING DISTRIBUTIONS
IN EXCESS OF NET INVESTMENT INCOME
OF ($49,284) AND ($71,526),
RESPECTIVELY] $ 12,548,462 $ 9,108,438
------------ -------------
------------ -------------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
Phoenix-Aberdeen New Asia Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------
FROM
YEAR ENDED JULY 31, INCEPTION
--------------------------- 9/4/96 TO
1999 1998 7/31/97
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period $ 5.45 $ 10.44 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.07(4)(5) 0.06(4)(5) 0.09(4)(5)(7)
Net realized and unrealized gain
(loss) 2.78 (4.75) 0.41
--- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.85 (4.69) 0.50
--- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.01) (0.10) (0.06)
In excess of net investment income (0.06) (0.20) --
--- ----- -----
TOTAL DISTRIBUTIONS (0.07) (0.30) (0.06)
--- ----- -----
Change in net asset value 2.78 (4.99) 0.44
--- ----- -----
NET ASSET VALUE, END OF PERIOD $ 8.23 $ 5.45 $ 10.44
--- ----- -----
--- ----- -----
Total return(1) 52.94% (45.29)% 4.98%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $9,068 $6,352 $13,355
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.10% 2.10% 2.10%(2)
Net investment income 1.03% 0.89% 0.95%(2)
Portfolio turnover 38% 44% 9%(3)
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------
FROM
YEAR ENDED JULY 31, INCEPTION
--------------------------- 9/4/96 TO
1999 1998 7/31/97
---------- ---------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 5.40 $ 10.39 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.02(4)(6) 0.01(4)(6) 0.01(4)(6)(7)
Net realized and unrealized gain
(loss) 2.75 (4.73) 0.43
----- ---------- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.77 (4.72) 0.44
----- ---------- -----
LESS DISTRIBUTIONS
Dividends from net investment
income -- (0.09) (0.05)
In excess of net investment income (0.04) (0.18) --
----- ---------- -----
TOTAL DISTRIBUTIONS (0.04) (0.27) (0.05)
----- ---------- -----
Change in net asset value 2.73 (4.99) 0.39
----- ---------- -----
NET ASSET VALUE, END OF PERIOD $ 8.13 $ 5.40 $ 10.39
----- ---------- -----
----- ---------- -----
Total return(1) 51.68% (45.83)% 4.37%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $3,481 $2,756 $6,416
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.85% 2.85% 2.85%(2)
Net investment income 0.30% 0.18% 0.06%(2)
Portfolio turnover 38% 44% 9%(3)
</TABLE>
(1) Maximum sales charges are not reflected in the total calculation.
(2) Annualized
(3) Not annualized
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by investment adviser of
$0.07, $0.10 and $0.15, respectively.
(6) Includes reimbursement of operating expenses by investment adviser of
$0.07, $0.10 and $0.15, respectively.
(7) 1997 distributions were made in accordance with the prospectus; however,
class level per share income from investment operations may vary from
anticipated results depending on the timing of share purchases and
redemptions.
See Notes to Financial Statements
12
<PAGE>
PHOENIX-ABERDEEN GLOBAL SMALL CAP FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The fund is appropriate for investors seeking long-term capital appreciation
by investing primarily in a globally diversified portfolio of equity securities
of small and medium-sized companies. A healthy financial structure and solid
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. Investors should note that foreign investments
pose added risks such as currency fluctuation, less public disclosure, as well
as economic and political risks. Small company investing also involves added
risks, including greater price volatility, less liquidity, and increased
competitive threat.
Q: HOW DID THE FUND PERFORM DURING THIS VOLATILE MARKET ENVIRONMENT?
A: For the 12 months ended July 31, 1999, Class A shares returned 5.99% and
Class B shares returned 5.22% compared with a return of 14.20% for the fund's
benchmark, the FT/S&P--Actuaries World Index of Medium/Small Companies(1). All
performance figures assume reinvestment of distributions and exclude the effect
of sales charges.
Q: WHAT FACTORS MOST AFFECTED PERFORMANCE?
A: After years of underperformance, we finally saw a rally in the first half of
1999 in small-cap stocks throughout the world. Asia staged a healthy recovery
after a long period of disappointment, and Japan's stock market also turned
upwards as did its currency. However, in Continental Europe and the United
Kingdom where the fund is heavily weighted, the returns have been lessened by
the weakness of the euro and the pound against the dollar.
Q: WHICH AREAS OF THE PORTFOLIO PERFORMED WELL AND WHICH PERFORMED POORLY DURING
THE PERIOD?
A: In the United States our technology holdings benefited from the prolonged
surge in share prices in that sector. Black Box, Dallas Semiconductor, and
General Instruments all performed above average, while profits were taken in
Emulex after it had more than doubled in price. However, outside the technology
area, the overall performance for U.S. smaller companies in the portfolio was
lackluster. In the UK substantial gains were made and profits taken from our
holdings in stockbroker Charles Stanley and software company Gresham Computing.
These gains were partly offset by disappointing returns from sporting goods
retailer JJB Sports and Rolfe & Nolan, a computer services company. A similar
mixed pattern was seen in Europe where companies, such as VA Technologies of
Austria and BE Semiconductor of the Netherlands, performed well, but recovery
has been slow to come in other areas, as evidenced by the disappointing returns
from France and Germany. In Japan, our relatively few holdings have made good
headway, particularly FCC and Shinmei Electric. The brightest spot has been Asia
where holdings, such as Giordano of Hong Kong, have made spectacular progress.
(1) THE FT/S&P -- ACTUARIES WORLD INDEX IS AN UNMANAGED, COMMONLY USED BROAD
MARKET INDEX, COVERING COUNTRIES IN THE PACIFIC BASIN, EUROPE AND THE
AMERICAN MARKETS. THE MEDIUM/SMALL COMPONENT CONSISTS OF MEDIUM- TO
SMALL-CAPITALIZATION COMPANIES IN THE WORLD INDEX. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
13
<PAGE>
PHOENIX-ABERDEEN GLOBAL SMALL CAP FUND (CONTINUED)
Q: WHAT IS THE OUTLOOK FOR WORLDWIDE MARKETS AND IN PARTICULAR FOR SMALLER
COMPANIES?
A: The major surprise for financial markets over the first half of the year was
the much stronger-than-anticipated performance of the global economy. With U.S.
domestic demand booming, the Asian demand cycle shaping up as a classic `V' and
virtually the rest of the world experiencing upgrades to growth forecasts, the
global economy is generally expected to expand by around 2 1/2% - 3% both this
year and next. The main reason why 2000 will not show that much of an
improvement over the current year can be ascribed to Y2K spending borrowing from
next year's growth.
Unsurprisingly, with the much improved economic background, market concerns
have shifted, with risks of inflation replacing the worries of deflation. While
a cyclical upturn in prices is expected through next year, as PPI inflation
reasserts itself, core inflation pressures should remain subdued.
Although global growth prospects have improved considerably, risks have not
entirely disappeared. Asia's two largest economies, Japan and China, remain
beset with severe structural problems, while U.S. financial imbalances continue
to grow.
Financial markets have reacted typically to the "growth surprises," with
bond yields rising sharply and industrial/cyclical economies and stocks
recovering strongly from their battering since the Asian crisis erupted in
mid-1997.
In the immediate future, there is little reason to expect any major changes
to these general trends. The Fed's message accompanying the recent 25 basis
point hike in the Fed funds rate to 5.00% was interpreted by the financial
markets as inferring that there would be no aggressive tightening of policy. If
correct, bond markets are unlikely to rally any further from their current
levels, and, indeed, pressure on bonds is likely to build without evidence of
slowing domestic demand. Even so, enthusiasm on Wall Street could be extended
with hopes of good profit growth, further merger and acquisition activity and a
Fed chairman seemingly well disposed toward equity investors, who is expected to
deliver only a modest tightening of monetary policy. In much of the rest of the
world, the need for a more restrictive stance is some way off, and monetary
policy is either loose or still loosening. Overall, such monetary conditions
(allied to recovering economies) present a propitious background for most equity
markets and for further outperformance by economically sensitive stocks, but a
continuing testing time for bonds. There remains the risk that the financial
markets underestimate the extent to which the Fed needs to raise rates, causing
further bond weakness at a time of already very extended U.S. valuations. Given
the close correlation of most leading equity markets, all world markets would be
vulnerable to a U.S. setback of any substance.
In Europe, a German recovery is now under way, which should be the catalyst
for improved relative performance from regional stock markets and the currency.
While UK valuations are no longer cheap, the technical position remains highly
supportive and investment bankers' powers of persuasion have shown few signs of
waning in UK boardrooms.
In the Far East, Japan's longer-term prospects will benefit from the growing
acceptance of the new business model based on profitability, but near-term
economic worries remain. Asia Pacific (ex Hong Kong) is much less vulnerable to
U.S.
14
<PAGE>
PHOENIX-ABERDEEN GLOBAL SMALL CAP FUND (CONTINUED)
developments with the freeing of most local currencies, and while Latin America
is more exposed, debt spreads are already pricing in
considerable risk.
With the U.S. tightening monetary policy, prospects outside the U.S. appear
more favorable. Liquidity should continue to drive Far Eastern and emerging
markets forward, while Europe remains our favored area. Investors are finally
recognizing the value in smaller companies worldwide, and we anticipate that
this trend will continue in the near future.
AUGUST 19, 1999
15
<PAGE>
PHOENIX-ABERDEEN GLOBAL SMALL CAP FUND
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 7/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 7/31/99 DATE
------ ----------- -----------
<S> <C> <C> <C>
Class A Shares at NAV(2) 5.99% 6.36% 9/4/96
Class A Shares at POP(3) 0.95 4.59 9/4/96
Class B Shares at NAV(2) 5.22 5.56 9/4/96
Class B Shares with CDSC(4) 1.46 4.67 9/4/96
FT/S&P - Actuaries World Index
Medium/Small Component(7) 14.20 11.66 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period.
(5) Index information from 9/30/96 to 7/31/99.
(6) This chart illustrates POP returns on Class A shares and CDSC returns for
Class B shares since inception.
(7) The FT/S&P - Actuaries World Index Medium/Small Component is an unmanaged,
broad-based measure of global small stock market total return performance.
The index's performance does not reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 7/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ABERDEEN GLOBAL SMALL PHOENIX-ABERDEEN GLOBAL SMALL FT/S&P - ACTUARIES WORLD INDEX
CAP FUND CLASS A (6) CAP FUND CLASS B (6) MEDIUM/SMALL COMPONENT (7)
<S> <C> <C> <C>
09/04/96 9,525 10,000 10,000
07/31/97 10,554 11,000 11,725
07/31/98 10,750 11,123 11,969
07/31/99 11,394 11,419 13,668
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
9/4/96 (inception of the Fund) in Class A and Class B shares. The total return
for Class A shares reflects the maximum sales charge of 4.75% on the initial
investment. The total return for Class B shares reflects the CDSC charges which
decline from 5% to 0% over a five year period. Performance assumes dividends and
capital gains are reinvested.
COUNTRY WEIGHTINGS 7/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
United States 39%
United Kingdom 11%
Japan 6%
Spain 6%
Finland 5%
Norway 4%
Germany 4%
Other 25%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
Phoenix-Aberdeen Global Small Cap Fund
TEN LARGEST HOLDINGS AT JULY 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Giordano International Ltd. 2.8%
HONG KONG MANUFACTURER AND RETAILER OF CASUAL APPAREL
2. Charles Stanley Group PLC 2.6%
OFFERS STOCKBROKING AND INVESTMENT MANAGEMENT SERVICES IN THE UK
3. FCC Company Ltd. 2.6%
JAPANESE MAKER OF MOTORCYCLE CLUTCHES FOR HONDA AND SUZUKI
4. Gresham Computing PLC 2.5%
DEVELOPS AND SELLS COMPUTER SOFTWARE IN THE UK
5. Wilmington Group PLC 2.1%
UK PUBLISHER OF PERIODICALS AND REPORTS
6. Kawasumi Laboratories, Inc. 1.9%
JAPANESE MANUFACTURER OF MEDICAL EQUIPMENT
7. NH Hoteles SA 1.7%
SPANISH LEISURE COMPANY WITH INTERESTS IN THE HOTEL AND WINE
SECTORS
8. KM Europa Metal AG 1.6%
MANUFACTURES AND MARKETS COPPER PRODUCTS IN GERMANY
9. Calpine Corporation 1.6%
US POWER GENERATING COMPANY
10. Rolfe & Nolan PLC 1.6%
COMPUTER SERVICES OPERATOR IN THE UK
</TABLE>
INVESTMENTS AT JULY 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
COMMON STOCKS--37.9%
UNITED STATES--37.9%
Amkor Technology, Inc. (Electronics
(Semiconductors))(b).................... 22,000 $ 338,250
Atmel Corp. (Electronics
(Semiconductors))(b).................... 9,000 268,312
Autodesk, Inc. (Computers (Software &
Services)).............................. 5,000 132,500
Bank United Corp. Class A (Savings &
Loan Companies)......................... 4,000 154,000
Black Box Corp. (Electrical
Equipment)(b)........................... 5,800 294,350
C-Cube Microsystems, Inc.
(Communications Equipment)(b)........... 7,000 227,937
Calpine Corp. (Power Producers
(Independent))(b)....................... 5,000 375,938
Cell Genesys, Inc. (Biotechnology)(b)... 28,000 157,500
Charter One Financial, Inc. (Savings &
Loan Companies)......................... 7,000 181,125
Claire's Stores, Inc. (Retail
(Specialty))............................ 11,000 261,250
Commerce Group, Inc. (The) (Insurance
(Property-Casualty)).................... 2,000 51,000
Computer Network (Computers
(Hardware))(b).......................... 12,000 173,250
Crown Castle International Corp.
(Services (Commercial & Consumer))(b)... 10,300 216,944
Cullen/Frost Bankers, Inc. (Banks
(Regional))............................. 7,000 179,812
Dallas Semiconductor Corp. (Electronics
(Semiconductors))....................... 7,000 356,562
Diebold, Inc. (Manufacturing
(Specialized)).......................... 3,500 98,875
Dura Pharmaceuticals, Inc. (Health Care
(Generic and Other))(b)................. 18,000 187,875
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
UNITED STATES--CONTINUED
Eclipse Surgical (Health Care (Medical
Products & Supplies))(b)................ 21,000 $ 287,437
Enhance Financial Services Group
(Insurance (Property-Casualty))......... 2,000 41,500
Fortunecity.Com, Inc. (Computers
(Software & Services))(b)............... 9,000 133,413
Fremont General Corp. (Insurance
(Property-Casualty)).................... 12,000 204,000
Frontier Insurance Group, Inc.
(Insurance (Property-Casualty))......... 7,000 102,813
Fruit of the Loom, Inc. Class A
(Textiles (Apparel))(b)................. 11,000 87,313
Fuller (H.B.) Co. (Chemicals
(Specialty))............................ 1,000 69,500
Furon Co. (Manufacturing
(Diversified)).......................... 10,000 168,750
General Instrument Corp. (Communications
Equipment)(b)........................... 6,000 272,250
Gulf Island Fabrication, Inc. (Oil & Gas
(Drilling & Equipment))(b).............. 7,000 84,000
Health Care REIT, Inc. (REITS).......... 7,500 165,000
Horace Mann Educators Corp. (Insurance
(Property-Casualty)).................... 10,000 251,875
Hospitality Properties Trust (REITS).... 3,000 81,750
LaSalle Hotel Properties (REITS)........ 16,000 239,000
Lennar Corp. (Homebuilding)............. 6,000 117,375
Ligand Pharmaceuticals, Inc. Class B
(Health Care (Drugs-Major
Pharmaceuticals))(b).................... 14,000 141,750
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Phoenix-Aberdeen Global Small Cap Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
UNITED STATES--CONTINUED
Littelfuse, Inc. (Electrical
Equipment)(b)........................... 4,000 $ 79,000
Men's Wearhouse (The) (Retail
(Specialty-Apparel))(b)................. 6,000 149,250
Metris Companies, Inc. (Consumer
Finance)................................ 1,600 62,900
Network Access Solutions Corp.
(Telephone)(b).......................... 21,000 287,438
Network Associates, Inc. (Computers
(Software & Services))(b)............... 6,500 113,750
New Century Financial Corp. (Financial
(Diversified))(b)....................... 6,000 111,000
RFS Hotel Investors, Inc. (REITS)....... 14,000 176,750
Rush Enterprises, Inc. (Retail
(Specialty))(b)......................... 6,000 111,000
SMART Modular Technologies, Inc.
(Electronics (Semiconductors))(b)....... 15,000 279,375
Sunstone Hotel Investors, Inc.
(REITS)................................. 20,000 182,500
Talbots, Inc. (The) (Retail
(Specialty-Apparel)).................... 7,000 246,313
Texas Industries, Inc. (Construction
(Cement & Aggregates)).................. 4,000 141,000
Trigon Healthcare, Inc. (Health Care
(Managed Care))(b)...................... 6,000 209,250
Valassis Communications, Inc. (Specialty
Printing)(b)............................ 8,000 298,000
ViaSat, Inc. (Communications
Equipment)(b)........................... 8,000 128,000
Washington Federal, Inc. (Savings & Loan
Companies).............................. 6,000 148,125
--------------
8,826,857
--------------
- ---------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $8,106,412) 8,826,857
- ---------------------------------------------------------------------------------
FOREIGN COMMON STOCKS--60.4%
ARGENTINA--0.3%
Banco Galicia y Buenos Aires SA (Banks
(Money Center))......................... 5,000 81,250
AUSTRALIA--2.7%
BRL Hardy Ltd. (Beverages
(Alcoholic))............................ 75,000 300,713
Pacifica Group Ltd. (Auto Parts &
Equipment).............................. 75,000 330,588
--------------
631,301
--------------
AUSTRIA--1.2%
VA Technologie AG (Engineering &
Construction)........................... 2,800 273,611
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
BRAZIL--0.3%
CIA Paranaense de Energia Copel
Sponsored ADR (Electric Companies)...... 10,000 $ 68,125
CHILE--0.3%
Distribucion y Servicio SA (Retail (Food
Chains))................................ 4,500 75,375
FINLAND--4.7%
Finnlines Oy (Shipping)................. 7,000 191,048
Rapala Normark Corp. (Machinery
(Diversified))(b)....................... 48,000 359,620
Sampo Insurance Co. Ltd. Class A
(Insurance (Property-Casualty))......... 5,250 152,557
Stora Enso Oyj (Paper & Forest
Products)............................... 24,000 301,824
Teleste Oyj (Telecommunications (Long
Distance))(b)........................... 9,500 83,884
--------------
1,088,933
--------------
FRANCE--2.4%
Altran Technologies SA (Engineering &
Construction)........................... 1,000 244,135
Picogiga (Chemicals (Specialty))(b)..... 4,710 73,096
Societe Industrielle D'Aviations
Latecoere SA (Aerospace/Defense)........ 2,310 241,058
--------------
558,289
--------------
GERMANY--3.7%
Apcoa Parking AG (Services
(Employment))........................... 3,000 232,790
Bewag AG (Electric Companies)........... 11,040 174,287
KM Europa Metal AG (Metal
Fabricators)............................ 7,080 378,885
LOESCH Umweltschutz AG (Services
(Commercial & Consumer))(b)............. 11,568 76,763
--------------
862,725
--------------
HONG KONG--3.1%
Giordano International Ltd. (Retail
(Specialty-Apparel)).................... 751,000 643,453
Magician Industries Holdings Ltd.
(Housewares)............................ 1,500,000 74,406
--------------
717,859
--------------
INDIA--0.9%
ICICI Ltd. Sponsored GDR (Financial
(Diversified)).......................... 20,000 212,500
INDONESIA--1.3%
PT Sari Husada (Foods)(b)............... 275,333 140,943
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Phoenix-Aberdeen Global Small Cap Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
INDONESIA--CONTINUED
PT Tigaraksa Satria (Distributors (Food
& Health)).............................. 350,000 $ 153,570
--------------
294,513
--------------
IRELAND--0.8%
IFG Group PLC (Financial
(Diversified)).......................... 183,300 180,491
ISRAEL--1.9%
Gilat Satellite Networks Ltd.
(Telecommunications
(Cellular/Wireless))(b)................. 4,000 211,000
Koor Industries Ltd. (Manufacturing
(Diversified)).......................... 2,200 229,540
--------------
440,540
--------------
ITALY--1.6%
Banca di Roma (Banks (Major
Regional)).............................. 123,000 160,214
Banca Popolare di Bergamo Credito
Varesino SPA (Banks (Major Regional))... 10,130 203,875
--------------
364,089
--------------
JAPAN--5.6%
FCC Co. Ltd. (Auto Parts & Equipment)... 35,000 597,761
Kawasumi Laboratories, Inc. (Health Care
(Medical Products & Supplies)).......... 29,000 432,619
Nishio Rent All Co. (Financial
(Diversified)).......................... 5,900 64,778
Shinmei Electric (Electrical
Equipment).............................. 12,000 207,038
--------------
1,302,196
--------------
MEXICO--0.8%
Corporacion Interamericana de
Entretenimiento SA Class B
(Entertainment)(b)...................... 45,000 118,828
Industrias CH SA Class B (Iron &
Steel)(b)............................... 21,400 58,788
--------------
177,616
--------------
NETHERLANDS--1.8%
BE Semiconductor Industries NV
(Equipment (Semiconductor))(b).......... 31,250 329,451
ICT Automatisering NV (Electronics
(Component Distributors))............... 4,050 99,265
--------------
428,716
--------------
NORWAY--4.3%
NetCom ASA (Telephone)(b)............... 10,750 352,016
Petroleum-Geo Services (Oil & Gas
(Drilling & Equipment))(b).............. 17,800 363,439
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
NORWAY--CONTINUED
Tomra Systems ASA (Machinery
(Diversified)).......................... 7,840 $ 282,399
--------------
997,854
--------------
PORTUGAL--0.9%
BPI-SGPS SA Registered Shares (Banks
(Major Regional))....................... 10,002 208,750
SINGAPORE--1.9%
Industrial & Commercial Bank Ltd. (Banks
(Major Regional))....................... 78,000 189,061
Robinson & Co. Ltd. (Retail (Department
Stores))................................ 80,000 256,643
--------------
445,704
--------------
SPAIN--5.5%
Adolfo Dominguez (Textiles (Home
Furnishings))(b)........................ 5,700 70,463
Befesa Medio Ambiente SA (Waste
Management)(b).......................... 10,865 138,731
Catalana Occidente SA (Insurance
(Property-Casualty))(b)................. 10,510 232,738
NH Hoteles SA (Beverages
(Alcoholic))(b)......................... 30,485 404,587
Red Electrica de Espana (Electric
Companies)(b)........................... 20,000 166,538
Superdiplo SA (Retail (Specialty))(b)... 12,700 263,700
--------------
1,276,757
--------------
SRI LANKA--0.5%
John Keells Holdings Ltd. (Beverages
(Alcoholic))............................ 48,000 127,476
SWEDEN--2.7%
Artimplant AB Class B (Health Care
(Medical Products & Supplies))(b)....... 32,000 156,102
Haldex AB (Machinery (Diversified))..... 18,000 221,714
Ortivus AB Class B (Health Care (Medical
Products & Supplies))(b)................ 47,300 242,276
--------------
620,092
--------------
TAIWAN--0.6%
Standard Foods Taiwan Ltd. GDR
(Foods)(b).............................. 24,687 151,825
UNITED KINGDOM--10.6%
Access Plus PLC (Services (Commercial &
Consumer)).............................. 85,000 344,252
Charles Stanley Group PLC (Investment
Banking/ Brokerage)..................... 55,600 605,738
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Phoenix-Aberdeen Global Small Cap Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C> <C>
UNITED KINGDOM--CONTINUED
Gresham Computing PLC (Electronics
(Component Distributors))............... 371,500 $ 583,779
ILP Group PLC (Containers (Metal &
Glass))(b).............................. 260,000 92,665
Rolfe & Nolan PLC (Services (Data
Processing))............................ 100,000 368,553
Wilmington Group PLC (Publishing)....... 108,000 483,767
--------------
2,478,754
--------------
- ---------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $14,536,225) 14,065,341
- ---------------------------------------------------------------------------------
UNIT INVESTMENT TRUSTS--0.8%
FINANCIAL (DIVERSIFIED)--0.8%
AMEX Financial Select Sector Depository
Receipts................................ 7,500 183,750
- ---------------------------------------------------------------------------------
TOTAL UNIT INVESTMENT TRUSTS
(IDENTIFIED COST $178,927) 183,750
- ---------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--99.1%
(IDENTIFIED COST $22,821,564) 23,075,948
- ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ -----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--1.6%
COMMERCIAL PAPER--1.6%
General Re Corp. 5.15%, 8/2/99.......... A-1+ $ 375 374,946
- -------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $374,946) 374,946
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.7%
(IDENTIFIED COST $23,196,510) 23,450,894(a)
Cash and receivables, less liabilities--(0.7%) (151,899)
--------------
NET ASSETS--100.0% $ 23,298,995
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $3,336,338 and gross
depreciation of $3,151,813 for federal income tax purposes. At July 31,
1999, the aggregate cost of securities for federal income tax purposes was
$23,266,369.
(b) Non-income producing.
20
See Notes to Financial Statements
<PAGE>
Phoenix-Aberdeen Global Small Cap Fund
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
Aerospace/Defense....................... 1.0%
Auto Parts & Equipment.................. 4.0
Banks (Major Regional).................. 3.3
Banks (Money Center).................... 0.4
Banks (Regional)........................ 0.8
Beverages (Alcoholic)................... 3.6
Biotechnology........................... 0.7
Chemicals (Specialty)................... 0.6
Communications Equipment................ 2.7
Computers (Hardware).................... 0.8
Computers (Software & Services)......... 1.6
Construction (Cement & Aggregates)...... 0.6
Consumer Finance........................ 0.3
Containers (Metal & Glass).............. 0.4
Distributors (Food & Health)............ 0.7
Electric Companies...................... 1.8
Electrical Equipment.................... 2.5
Electronics (Component Distributors).... 3.0
Electronics (Semiconductors)............ 5.4
Engineering & Construction.............. 2.2
Entertainment........................... 0.5
Equipment (Semiconductor)............... 1.4
Financial (Diversified)................. 3.3
Foods................................... 1.3
Health Care (Drugs-Major
Pharmaceuticals)...................... 0.6
Health Care (Generic And Other)......... 0.8
Health Care (Managed Care).............. 0.9
Health Care (Medical Products &
Supplies)............................. 4.8
Homebuilding............................ 0.5
Housewares.............................. 0.3
Insurance (Property-Casualty)........... 4.5%
Investment Banking/Brokerage............ 2.6
Iron & Steel............................ 0.3
Machinery (Diversified)................. 3.7
Manufacturing (Diversified)............. 1.7
Manufacturing (Specialized)............. 0.4
Metal Fabricators....................... 1.6
Oil & Gas (Drilling & Equipment)........ 1.9
Paper & Forest Products................. 1.3
Power Producers (Independent)........... 1.6
Publishing.............................. 2.1
Reits................................... 3.7
Retail (Department Stores).............. 1.1
Retail (Food Chains).................... 0.3
Retail (Specialty)...................... 2.8
Retail (Specialty-Apparel).............. 4.5
Savings & Loan Companies................ 2.1
Services (Commercial & Consumer)........ 2.8
Services (Data Processing).............. 1.6
Services (Employment)................... 1.0
Shipping................................ 0.8
Specialty Printing...................... 1.3
Telecommunications
(Cellular/Wireless)................... 0.9
Telecommunications (Long Distance)...... 0.4
Telephone............................... 2.8
Textiles (Apparel)...................... 0.4
Textiles (Home Furnishings)............. 0.3
Waste Management........................ 0.7
-------
100.0%
-------
-------
</TABLE>
See Notes to Financial Statements 21
<PAGE>
PHOENIX-ABERDEEN GLOBAL SMALL CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $23,196,510) $ 23,450,894
Cash 5,274
Foreign currency at value
(Identified cost $184) 192
Receivables
Investment securities sold 216,472
Dividends and interest 30,548
Fund shares sold 12,052
Tax reclaim 5,069
Prepaid expenses 543
-------------
Total assets 23,721,044
-------------
LIABILITIES
Payables
Investment securities purchased 237,635
Fund shares repurchased 47,825
Investment advisory fee 17,324
Transfer agent fee 15,084
Distribution fee 10,632
Financial agent fee 8,109
Trustees' fee 6,557
Administration fee 3,007
Accrued expenses 75,876
-------------
Total liabilities 422,049
-------------
NET ASSETS $ 23,298,995
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 24,095,333
Distributions in excess of net investment income (56,055)
Accumulated net realized loss (994,534)
Net unrealized appreciation 254,251
-------------
NET ASSETS $ 23,298,995
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $14,625,913) 1,468,779
Net asset value per share $9.96
Offering price per share $9.96/(1-4.75%) $10.46
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $8,673,082) 888,096
Net asset value and offering price per share $9.77
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 368,291
Interest 21,788
Foreign taxes withheld (20,068)
-----------
Total investment income 370,011
-----------
EXPENSES
Investment advisory fee 202,386
Distribution fee, Class A 36,420
Distribution fee, Class B 92,421
Financial agent fee 49,573
Transfer agent 73,581
Custodian 57,869
Administration fee 35,715
Professional 35,180
Printing 16,612
Trustees 14,272
Registration 4,264
Miscellaneous 13,218
-----------
Total expenses 631,511
Less expenses borne by investment adviser (62,182)
-----------
Net expenses 569,329
-----------
NET INVESTMENT LOSS (199,318)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (943,423)
Net realized gain on foreign currency transactions 2,658
Net change in unrealized appreciation (depreciation) on investments 1,798,460
Net change in unrealized appreciation (depreciation) on foreign
currency and foreign currency transactions 555
-----------
NET GAIN ON INVESTMENTS 858,250
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 658,932
-----------
-----------
</TABLE>
See Notes to Financial Statements
22
<PAGE>
Phoenix-Aberdeen Global Small Cap Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
7/31/99 7/31/98
------------ -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (199,318) $ (345,457)
Net realized gain (loss) (940,765) 6,452,088
Net change in unrealized appreciation
(depreciation) 1,799,015 (5,764,395)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 658,932 342,236
------------ -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (435,832) (1,634,436)
Net realized gains, Class B (289,554) (1,345,539)
In excess of net realized gains, Class
A (595,185) --
In excess of net realized gains, Class
B (395,424) --
In excess of net investment income,
Class A -- (267,897)
In excess of net investment income,
Class B -- (154,696)
------------ -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (1,715,995) (3,402,568)
------------ -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (543,132
and 303,616 shares, respectively) 5,038,303 3,167,670
Net asset value of shares issued from
reinvestment of distributions
(119,451 and
202,252 shares, respectively) 992,705 1,806,110
Cost of shares repurchased (953,295
and 900,403 shares, respectively) (8,709,664) (9,370,519)
------------ -------------
Total (2,678,656) (4,396,739)
------------ -------------
CLASS B
Proceeds from sales of shares (83,960
and 162,943 shares, respectively) 738,926 1,661,922
Net asset value of shares issued from
reinvestment of distributions
(75,170 and
138,880 shares, respectively) 615,640 1,231,865
Cost of shares repurchased (483,883
and 693,656 shares, respectively) (4,224,626) (7,063,874)
------------ -------------
Total (2,870,060) (4,170,087)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (5,548,716) (8,566,826)
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS (6,605,779) (11,627,158)
NET ASSETS
Beginning of period 29,904,774 41,531,932
------------ -------------
END OF PERIOD [INCLUDING DISTRIBUTIONS
IN EXCESS OF NET INVESTMENT INCOME
OF ($56,055) AND ($163,858),
RESPECTIVELY] $ 23,298,995 $ 29,904,774
------------ -------------
------------ -------------
</TABLE>
See Notes to Financial Statements
23
<PAGE>
Phoenix-Aberdeen Global Small Cap Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------
FROM
YEAR ENDED JULY 31, INCEPTION
----------------------------- 9/4/96 TO
1999 1998 7/31/97
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.11 $ 11.08 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.04)(4)(5) (0.07)(4)(5) (0.03)(4)(5)
Net realized and unrealized gain
(loss) 0.52 0.14 1.11
----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.48 0.07 1.08
----- ----- -----
LESS DISTRIBUTIONS
Dividends from net realized gains (0.27) (0.89) --
In excess of net realized gains (0.36) -- --
In excess of net investment income -- (0.15) --
----- ----- -----
TOTAL DISTRIBUTIONS (0.63) (1.04) --
----- ----- -----
Change in net asset value (0.15) (0.97) 1.08
----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.96 $ 10.11 $ 11.08
----- ----- -----
----- ----- -----
Total return(1) 5.99% 1.86% 10.80%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $14,626 $17,781 $23,874
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.10% 2.10% 2.10%(2)
Net investment income (loss) (0.50)% (0.65)% (0.32)%(2)
Portfolio turnover 81% 212% 162%(3)
</TABLE>
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------
FROM
YEAR ENDED JULY 31, INCEPTION
----------------------------- 9/4/96 TO
1999 1998 7/31/97
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 11.00 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.11)(4)(6) (0.14)(4)(6) (0.10)(4)(6)
Net realized and unrealized gain
(loss) 0.51 0.14 1.10
----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.40 -- 1.00
----- ----- -----
LESS DISTRIBUTIONS
Dividends from net realized gains (0.27) (0.89) --
In excess of net realized gains (0.36) -- --
In excess of net investment income -- (0.11) --
----- ----- -----
TOTAL DISTRIBUTIONS (0.63) (1.00) --
----- ----- -----
Change in net asset value (0.23) (1.00) 1.00
----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.77 $ 10.00 $ 11.00
----- ----- -----
----- ----- -----
Total return(1) 5.22% 1.12% 10.00%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $8,673 $12,123 $17,658
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.85% 2.85% 2.85%(2)
Net investment income (loss) (1.26)% (1.40)% (1.07)%(2)
Portfolio turnover 81% 212% 162%(3)
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by investment adviser of $0.02,
$0.03 and $0.05, respectively.
(6) Includes reimbursement of operating expenses by investment adviser of $0.02,
$0.03 and $0.05, respectively.
See Notes to Financial Statements
24
<PAGE>
PHOENIX-ABERDEEN SERIES FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
The Phoenix-Aberdeen Series Fund (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company whose shares
are offered in two separate Series. Each Series has distinct investment
objectives.
The New Asia Fund seeks as its investment objective long-term capital
appreciation through investing in equity securities of issuers located in at
least three different countries throughout Asia other than Japan. The Global
Small Cap Fund seeks as its investment objective long-term capital appreciation
through investing in a globally diversified portfolio of equity securities of
small and medium sized companies.
Each Series offers both Class A and Class B shares. Class A shares are sold
with a front-end sales charge of up to 4.75%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Both classes of shares have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan. Income and
expenses of each Series are borne pro rata by the holders of both classes of
shares, except that each class bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities in determining value. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at fair value as determined
in good faith by or under the direction of the Trustees.
B. SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date or, in the case of certain foreign securities,
as soon as the Trust is notified. Interest income is recorded on the accrual
basis. Realized gains and losses are determined on the identified cost basis.
C. INCOME TAXES:
Each of the Series is treated as a separate taxable entity. It is the policy
of each Series in the Trust to comply with the requirements of the Internal
Revenue Code (the "Code") applicable to regulated investment companies, and to
distribute all of its taxable and tax-exempt income to its shareholders. In
addition, each Series intends to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Code. Therefore, no
provision for federal income taxes or excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Series on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, foreign
currency gain/loss, Passive Foreign Investment Companies, partnerships,
operating losses and losses deferred due to wash sales and excise tax
regulations. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
E. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Trust does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
F. FORWARD CURRENCY CONTRACTS:
Each Series may enter into forward currency contracts in conjunction with the
planned purchase or sale of foreign denominated securities in order to hedge the
U.S. dollar cost or proceeds. Forward currency contracts involve, to varying
degrees, elements of market risk in excess of the amount recognized in the
statement of assets and liabilities. Risks arise from the possible movements in
foreign exchange rates or if the counterparty does not perform under the
contract.
25
<PAGE>
PHOENIX-ABERDEEN SERIES FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1999 (CONTINUED)
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in market
value is recorded by each Series as an unrealized gain (or loss). When the
contract is closed or offset with the same counterparty, the Series records a
realized gain (or loss) equal to the change in the value of the contract when it
was opened and the value at the time it was closed or offset.
G. EXPENSES:
Expenses incurred by the Trust with respect to more than one Series are
allocated in proportion to the net assets of each Series, except where
allocation of direct expense to each Series or an alternative allocation method
can be more fairly made.
H. REPURCHASE AGREEMENTS:
A repurchase agreement is a transaction where a Series acquires a security for
cash and obtains a simultaneous commitment from the seller to repurchase the
security at an agreed upon price and date. The Series, through its custodian,
takes possession of securities collateralizing the repurchase agreement. The
collateral is marked-to-market daily to ensure that the market value of the
underlying assets remains sufficient to protect the Series in the event of
default by the seller. If the seller defaults and the value of the collateral
declines, or, if the seller enters insolvency proceedings, realization of
collateral may be delayed or limited.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
Phoenix-Aberdeen International Advisors, LLC ("PAIA" or the "Adviser") serves
as the investment adviser to the Trust. PAIA is a joint venture between PM
Holdings, Inc., a direct subsidiary of Phoenix Home Life Mutual Insurance
Company ("PHL"), and Aberdeen Fund Managers, Inc. ("Aberdeen"), a wholly-owned
subsidiary of Aberdeen Asset Management PLC (previously known as Aberdeen Trust
PLC).
PAIA is entitled to a fee at an annual rate of 0.85% of the average daily net
assets of each Series. Pursuant to sub-advisory agreements, the Adviser
delegates certain investment decisions and functions to other entities. Phoenix
Investment Counsel, Inc. ("PIC"), an indirect, majority-owned subsidiary of PHL,
receives a fee at an annual rate of 0.15% of the average aggregate daily net
assets of each Series from PAIA for providing cash management and other
services, as needed. In addition, PAIA allocates certain assets of the Global
Small Cap Series for management by PIC. PAIA pays a sub-advisory fee to PIC at
an annual rate of 0.40% of the average daily net assets of the Global Small Cap
Series so allocated. PAIA also pays a sub-advisory fee to Aberdeen at an annual
rate of 0.40% of the average net assets of the New Asia Series and 0.40% of the
average net assets of the Global Small Cap Series allocated to Aberdeen by the
Adviser for management.
The Adviser has agreed to reimburse the New Asia Series and the Global Small
Cap Series to the extent that other operating expenses (excluding advisory fees,
distribution fees, interest, taxes, brokerage fees and commissions and
extraordinary expenses) exceed 1.00% of the average daily net assets for Class A
and Class B shares for each Series.
Phoenix Equity Planning Corporation ("PEPCO" or the "Distributor"), an
indirect majority-owned subsidiary of PHL, which serves as the national
distributor of the Trust's shares, has advised the Trust that it retained net
selling commissions of $3,008 for Class A shares and deferred sales charges of
$89,663 for Class B shares for the year ended July 31, 1999. In addition, each
Series pays PEPCO a distribution fee at an annual rate of 0.25% for Class A
shares and 1.00% for Class B shares applied to the average daily net assets of
each Series. The Distributor has advised the Trust that of the total amount
expensed for the year ended July 31, 1999, $122,370 was retained by the
Distributor, $44,591 was paid out to unaffiliated participants and $8,158 was
paid to W.S. Griffith, an indirect subsidiary of PHL.
As Financial Agent to the Trust, PEPCO receives a financial agent fee equal to
the sum of (1) the documented cost of fund accounting and related services
provided by PFPC Inc. (subagent to PEPCO), plus (2) the documented cost to PEPCO
to provide financial reporting, tax services and oversight of subagent's
performance. The current fee schedule of PFPC Inc. ranges from 0.085% to 0.0125%
of the average daily net asset values of the Trust. Certain minimums and waivers
may apply. As Administrator for the Trust, Phoenix Investment Partners Ltd., an
indirect, majority-owned subsidiary of PHL, receives a fee at an annual rate of
0.15% of the average daily net assets of each Series for administrative
services.
PEPCO serves as the Trust's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the year ended July 31, 1999, transfer agent
fees were $128,680 of which PEPCO retained $9,161 which is net of fees paid to
State Street.
At July 31, 1999, PHL and its affiliates held Trust shares which aggregated
the following:
<TABLE>
<CAPTION>
Aggregate
Net Asset
Shares Value
--------- ------------
<S> <C> <C>
New Asia Fund, Class A............................ 309,003 $2,543,095
Global Small Cap Fund, Class A.................... 588,481 5,861,271
</TABLE>
26
<PAGE>
PHOENIX-ABERDEEN SERIES FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1999 (CONTINUED)
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended July 31, 1999
(excluding U.S. Government and agency securities, short-term securities, and
forward currency contracts) aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
------------- -------------
<S> <C> <C>
New Asia Fund..................................... $ 3,697,605 $ 4,173,702
Global Small Cap Fund............................. 19,153,033 26,653,639
</TABLE>
There were no purchases or sales of long-term U.S. Government and agency
securities during the year ended July 31, 1999.
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a Series' ability to
repatriate such amounts.
5. CAPITAL LOSS CARRYOVERS
At July 31, 1999, the New Asia Fund had a capital loss carryover of $100,079,
expiring in 2006 and $3,177,949 expiring in 2007, and the Global Small Cap Fund
had a capital loss carryover of $725,764 expiring in 2007. These may be used to
offset future capital gains.
Under current tax law, foreign currency and capital losses realized after
October 31 may be deferred and treated as occurring on the first day of the
following fiscal year. For the year ended July 31, 1999, the following foreign
currency and capital losses were deferred:
<TABLE>
<CAPTION>
Foreign
Currency Capital
-------- ----------
<S> <C> <C>
New Asia Fund............................................. $ -- $ 134,909
Global Small Cap Fund..................................... 1,226 253,741
</TABLE>
For the year ended July 31, 1999, prior year losses deferred were utilized as
follows: New Asia Fund $2,689,202 of capital and $13,207 of currency and Global
Small Cap Fund $27,411 of capital.
6. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Series have recorded several
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of the Series and are designed generally to
present undistributed income and realized gains on a tax basis which is
considered to be more informative to the shareholder. As of July 31, 1999, the
Series recorded the following reclassifications to increase (decrease) the
accounts listed below:
<TABLE>
<CAPTION>
Capital paid
Accumulated in on shares
Undistributed net of
net investment realized beneficial
income (loss) gain (loss) interest
-------------- ----------- ------------
<S> <C> <C> <C>
New Asia Fund......................... $ 33,978 $ (14,333) $(19,645)
Global Small Cap Fund................. 307,121 (3,926) (303,195)
</TABLE>
This report is not authorized for distribution to prospective investors in the
Phoenix-Aberdeen Series Fund unless preceded or accompanied by an effective
prospectus which includes information concerning the sales charge, the Fund's
record and other pertinent information.
27
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Trustees and Shareholders of
Phoenix-Aberdeen Series Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedules of investments (except for bond ratings), and the
related statements of operations and of changes in net assets, and the financial
highlights present fairly, in all material respects, the financial position of
the New Asia Series and the Global Small Cap Series (constituting the
Phoenix-Aberdeen Series, hereinafter referred to as the "Trust") at July 31,
1999, the results of each of their operations for the year then ended, the
changes in each of their net assets for each of the two years in the period then
ended and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at July
31, 1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 10, 1999
28
<PAGE>
PHOENIX-ABERDEEN SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
TRUSTEES
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis F. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
John F. Sharry, Executive Vice President
Chong Yoon Chou, Senior Vice President
Christopher D. Fishwick, Senior Vice President
Vivek Gandhi, Senior Vice President
Peter Hames, Senior Vice President
Gawaine Lewis, Senior Vice President
Hugh Young, Senior Vice President
Shahreza Yusof, Senior Vice President
Christian C. Bertelsen, Vice President
Robert S. Driessen, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Julie L. Sapia, Vice President
Nancy G. Curtiss, Treasurer
C. Jeffrey Bohne, Clerk and Secretary
INVESTMENT ADVISER
Phoenix-Aberdeen International Advisors, LLC
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
World Wide Web Address:
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
------------------
PHOENIX EQUITY PLANNING CORPORATION PRSRT STD
PO Box 2200 U.S. Postage
Enfield CT 06083-2200 PAID
Springfield, MA
Permit No. 444
------------------
[LOGO]PHOENIX
INVESTMENT PARTNERS
PXP 190 (9/99)
