As filed with the Securities and Exchange Commission on October 30, 1998
Registration No. 333-29043
File No. 811-8245
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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. [ ]
Post-Effective
Amendment No. 2 [X]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 6 [X]
(Check appropriate box or boxes)
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Phoenix Equity 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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Thomas N. Steenburg
Vice President, Counsel and Secretary
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115-0479
(name and address of Agent for Service)
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It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant
to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed effective amendment.
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<PAGE>
PHOENIX EQUITY SERIES FUND
Cross Reference Sheet Pursuant to Rule 404
PART A
Information Required in Prospectus
<TABLE>
<CAPTION>
Item Number Form N-1A, Part A Prospectus Caption
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<S> <C> <C>
1. Front and Back Cover Pages ............................... Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risks, Performance Investment Risk and Return Summary
3. Risk Return Summary: Fee Table ........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies, Investment Risk and Return Summary; Investment
and Related Risks ........................................ Strategies; Risks Related to Investment Strategies
5. Management's Discussion of Fund Performance .............. Performance Tables
6. Management, Organization, and Capital Structure .......... Management of the Fund
7. Shareholder Information .................................. Pricing of Fund Shares; Sales Charges; Your Account;
How to Buy Shares; How to Sell Shares; Things to
Know When Selling Shares; Account Policies; Investor
Services; Tax Status of Distributions
8. Distribution Arrangements ................................ Sales Charges
9. Financial Highlights Information ......................... Financial Highlights
</TABLE>
PART B
Information Required in Statement of Additional Information
<TABLE>
<CAPTION>
Item Number Form N-1A, Part B Statement of Additional Information Caption
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<S> <C> <C>
10. Cover Page and Table of Contents ............................. Cover Page, Table of Contents
11. Fund History ................................................. The Fund
12. Description of the Fund and Its Investment Risks ............. Investment Objectives and Policies; Investment
Restrictions
13. Management of the Fund ....................................... Management of the Trust
14. Control Persons and Principal Holders of Securities .......... Management of the Trust
15. Investment Advisory and Other Services ....................... Services of the Adviser; The Distributor; Distribution
Plans; Other Information
16. Brokerage Allocation and Other Practices ..................... Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities ........................... Other Information
18. Purchase, Redemption, and Pricing of Shares .................. Net Asset Value; How to Buy Shares; Investor Account
Services; Redemption of Shares; Tax Sheltered
Retirement Plans
19. Taxation of the Fund ......................................... Dividends, Distributions and Taxes
20. Underwriters ................................................. The Distributor
21. Calculation of Performance Data .............................. Performance Information
22. Financial Statements ......................................... Financial Statements
</TABLE>
<PAGE>
Phoenix Investment Partners
|
| December __, 1998
|
|
|
|
|
|
|------- Phoenix
Equity
Series
Fund
Prospectus
Neither the Securities and Exchange
Commission nor any state securities
commission has approved or disapproved
of these securities or determined
if this prospectus is truthful or
complete. Any representation to the
contrary is a criminal offense.
This Prospectus contains important
information about the Phoenix
Equity Series Fund that you
should know before investing. Please
read it carefully and retain it for
future reference.
[LOGO] PHOENIX
INVESTMENT PARTNERS, LTD.
<PAGE>
[sidebar text]
> Phoenix
Equity
Series
Fund
[end sidebar text]
Table of Content
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<TABLE>
<CAPTION>
Phoenix Core Equity Fund
------------------------
<S> <C>
Investment Risk and Return Summary ............. page 2
Fund Expenses .................................. page 5
Investment Strategies .......................... page 6
Risks Related to Investment Strategies ......... page 8
Management of the Fund ......................... page 12
Phoenix Growth and Income Fund
------------------------------
Investment Risk and Return Summary ............. page 16
Fund Expenses .................................. page 20
Investment Strategies .......................... page 21
Risks Related to Investment Strategies ......... page 24
Management of the Fund ......................... page 29
Pricing of Fund Shares .......................... page 32
Sales Charges ................................... page 33
Your Account .................................... page 36
How to Buy Shares ............................... page 37
How to Sell Shares .............................. page 37
Things to Know When Selling Shares .............. page 38
Account Policies ................................ page 40
Investor Services ............................... page 41
Tax Status ...................................... page 42
Financial Highlights ............................ page 43
Backup Withholding Information .................. page 45
Additional Information .......................... page 47
</TABLE>
<PAGE>
Phoenix Core Equity Fund
Investment Risk and Return Summary
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Investment Objective
Phoenix Core Equity Fund has an investment
objective of long-term capital appreciation through
investment in a diversified portfolio of common
stocks. Distributions of investment income, such as
dividends and interest, will not be a factor in the
selection of investments. There is no guarantee
that the fund will achieve the objective.
Principal Investment Strategies
> The fund will invest in equity securities,
primarily common stocks. Under normal
circumstances the fund will invest at least
65% of its total assets in equity securities.
> The fund's adviser uses a quality driven
strategy that selects securities of large,
primarily U.S. companies based on
predictability and consistency of earnings and
dividend growth and based on its determination
that the security's price is low relative to
the stock's historical valuation and the
company's future growth prospects.
> The fund may engage in "securities lending" to
increase its investment returns.
> The fund may invest up to 20% of its net
assets in financial futures contracts. The
fund intends to invest in these securities
primarily for "hedging" purposes to reduce the
risk of holding other, related investments.
The fund may invest up to 5% of its net assets
in these securities as an investment unrelated
to any hedging purpose.
> The fund may invest up to 10% of its assets in
securities of foreign (non-U.S.) issuers.
> For liquidity purposes the fund may invest up
to 10% of its assets in money market mutual
funds. The fund may invest in money market
funds advised by the fund's adviser or other
advisers controlled by the same persons who
control the fund's adviser.
> Temporary defensive strategy: if the adviser
believes that market conditions are not
favorable to the fund's principal strategies
the fund may invest without limit in high
quality
2 Phoenix Core Equity Fund
<PAGE>
money market instruments and repurchase
agreements. When this happens the fund may
not achieve its investment objective.
Principal Risks
If you invest in this fund you risk that you may
lose your investment.
The fund will seek to increase the value of your
shares by investing in securities the adviser
expects to increase in value. Most of the fund's
investments will be in common stocks and other
equity investments. Conditions affecting the
overall economy, specific industries or companies
in which the fund invests can be worse than
expected. As a result, the value of your shares may
decrease. Decreases in share value from day to day
will be "paper" losses unless you actually sell
your shares. If your financial circumstances are
likely to require you to sell your shares at any
particular time, rather than holding them
indefinitely, you run the risk that your sale of
shares will occur when share values have declined.
This fund may also invest in small companies as
well as larger companies. Smaller companies,
regardless of their location, may be affected to a
greater extent than larger companies by changes in
general economic conditions and conditions in
particular industries. Smaller companies may also
be relatively new and not have the same operating
history and "track record" as larger companies.
This could make future performance of smaller
companies more difficult to predict.
This fund may lend portfolio securities to
financial institutions to increase investment
return. If the borrower is unwilling or unable to
return the borrowed securities when due the fund
can suffer losses.
This fund may invest in financial futures
contracts. The adviser will make these investments
primarily to try to minimize the risk of other
investments it makes for the fund. These
investments may not protect the fund from losses,
and they may decrease overall return.
This fund may invest in companies in foreign
countries. Political and economic uncertainty as
well as relatively less public information about
investments may negatively impact the fund's
portfolio. Some investments may be made in
currencies other than U.S. dollars that will
fluctuate in value as a result of changes in the
currency exchange rate. Foreign markets and
currencies may not perform as well as U.S.
markets.
Phoenix Core Equity Fund 3
<PAGE>
Performance Tables
The table below shows how the fund's annual returns
for the life of the fund compare to those of a
broad-based securities market index. The fund's
past performance is not necessarily an indication
of how the fund will perform in the future.
<TABLE>
<CAPTION>
Annual Total Returns (1) One Year(2) Life of the Fund(3)
<S> <C> <C>
Class A Shares (0.11)% (5.65)%
Class B Shares (0.61)% (6.28)%
Class C Shares 3.65 % (2.49)%
S&P 500 Stock Index(4) 3.18 % 2.83%
</TABLE>
(1) The fund's annual returns in the table above reflect the deduction of the
maximum sales charge for an investment in the fund's Class A Shares and a full
redemption in the fund's Class B and C Shares.
(2) Since September 25, 1997.
(3) Period September 25, 1997 through August 31, 1998.
(4) The S&P 500 Stock Index is an unmanaged but commonly used measure of common
stock total return performance. The S&P 500's performance does not reflect sales
charges.
4 Phoenix Core Equity Fund
<PAGE>
Fund Expenses
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This table illustrates all fees and expenses that
you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from
your investment)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a None 5% during the first year, 1% during the
percentage of the lesser of the value redeemed or decreasing 1% annually first year
the amount invested) to 2% during the fourth
and fifth years;
decreasing to 0% after
the fifth year
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
------------------------------------------------------------
Class A Class B Class C
Shares Shares Shares
------- ------- -------
Annual Fund Operating Expenses (expenses
that are deducted from fund assets)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees (b) 0.25% 1.00% 1.00%
Other Expenses 1.95% 1.95% 1.95%
---- ---- ----
Total Annual Fund Operating Expenses
(before reimbursement)(a) 2.95% 3.70% 3.70%
==== ==== ====
</TABLE>
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(a) Actual Total Annual Fund Operating Expenses after expense reimbursement are:
Class A Shares 1.25%
Class B Shares 2.00%
Class C Shares 2.00%
(b) Distribution and Service Fees represent an asset based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
Example
This example is intended to help you compare the
cost of investing in the fund with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the
fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The
example also assumes that your investment has a 5%
return each year and that the fund's operating
expenses remain the same. In the case of Class B
Shares, it is assumed that your shares are
converted to Class A after eight years. Although
your actual costs may be higher or lower, based on
these assumptions your costs would be:
Phoenix Core Equity Fund 5
<PAGE>
<TABLE>
<CAPTION>
Class 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Class A $759 $1,344 $1,954 $3,590
Class B 772 1,332 1,911 3,786
Class C 472 1,332 1,911 3,950
</TABLE>
You would pay the following expenses if you did not
redeem your shares:
<TABLE>
<CAPTION>
Class 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Class A $759 $1,344 $1,954 $3,590
Class B 372 1,132 1,911 3,786
Class C 372 1,132 1,911 3,950
</TABLE>
Note: Your actual expenses would be lower than those shown in the tables above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the fund's investment adviser.
Refer to the section "Management of the Fund" for information about expense
reimbursement.
Investment Strategies
- --------------------------------------------------
Investment Objective
The fund has an investment objective of long-term
capital appreciation through investment in a
diversified portfolio of common stocks.
Distributions of investment income, such as
dividends and interest, will not be a factor in the
selection of investments. There is no guarantee
that the fund will achieve the objective. The
investment objective is a fundamental policy that
cannot be changed without shareholder approval.
Principal Investment Strategies
The fund invests in a diversified portfolio of
securities of primarily domestic (U.S.) companies.
The fund is designed to invest in equity
securities. Under normal circumstances the fund
intends to invest solely in equity securities and
will invest at least 65% of its total assets in
equity securities. Under normal circumstances the
fund will invest primarily in common stocks.
The adviser uses a quality driven strategy in
pursuit of the fund's investment objective. The
fund selects large companies (primarily
6 Phoenix Core Equity Fund
<PAGE>
from among the 1,000 largest companies traded in the
United States) based on predictability and
consistency of future earnings and dividend growth
and based on the adviser's view that the price is
low relative to the stock's historical valuation and
the company's future growth prospects. Portfolio
risk is controlled through diversification among
industries, sectors, and the number of holdings. The
adviser monitors holdings for fundamental change and
overvaluation to determine when to sell securities.
While the adviser's strategy tends to concentrate
its investment selections in larger issuers, the
fund may invest in securities of issuers of any
size.
The fund may lend portfolio securities to
broker-dealers and other financial institutions to
increase its investment returns. The total amount of
such lending can be as much as one-third of the
fund's total assets. When the fund lends securities
in this fashion the borrower returns the securities
at a pre-arranged time and pays some form of premium
or other fee for the transaction. The fund receives
all dividends and other distributions made with
respect to the loaned securities. All securities
loans are secured by other marketable securities.
The fund may invest up to 20% of its net assets
(fund assets less fund liabilities) in certain
"financial futures contracts". Financial futures
contracts consist of interest rate futures
contracts, foreign currency futures contracts, and
securities index futures contracts. These types of
securities permit an investor to "hedge" or minimize
the risk associated with owning certain other
securities. For example, the adviser can purchase
> An interest rate futures contract that is
likely to increase in value at a time when a
security the fund owns that is sensitive to
interest rate changes might decrease in value;
> A foreign currency futures contract that is
likely to increase in value at a time when a
security owned by the fund that directly or
indirectly is affected by currency exchanges
might decrease in value because the currency
exchange rate is less favorable; or
> A securities index futures contract that is
likely to increase in value at a time when
that securities market and securities traded
on that market might decrease in value.
The fund intends to invest in financial futures
contracts only for hedging purposes. However, the
fund can invest up to 5% of its net assets in
initial premiums for these futures contracts even
if they
Phoenix Core Equity Fund 7
<PAGE>
are not purchased for hedging purposes, that is,
they are purchased as an investment in their own
right. Please see the Statement of Additional
Information for more detailed information about
futures and options.
The fund may invest up to 10% of its total assets
in securities of foreign (non-U.S.) issuers.
For liquidity purposes the fund may also invest up
to 10% of its assets in one or more money market
funds, including a money market fund managed by the
adviser or another adviser controlled by the same
persons as the adviser.
Note: If the fund's adviser determines that market
conditions are not favorable to the types of
investments the adviser ordinarily intends to hold,
the fund may invest without limitation in any
combination of high quality money market securities
and repurchase agreements. In such instances, the
fund may not achieve its stated investment
objective.
Please refer to the Statement of Additional
Information for more detailed information about
these and other investment techniques.
- --------------------------------------------------------------------------
Risks Related to Investment Strategies
General
The fund's focus is long-term capital appreciation.
The adviser intends to invest fund assets so that
your shares increase in value. However, the value
of the fund's investments that support your share
value can decrease as well as increase. If between
the time you purchase shares and the time you sell
shares the value of the fund's investments
decreases you will lose money. The value of the
fund's investments can decrease for a number of
reasons. For example, changing economic conditions
may cause a decline in the value of many or even
most equity and fixed income investments.
Particular industries can face poor markets for
their products or services so that companies
engaged in those businesses do not do as well as
companies in other industries. Interest rate
changes may improve prospects for certain types of
businesses and they may worsen prospects for
others. To the extent that the fund's investments
are affected by general economic declines, declines
in industries, and interest rate changes that
negatively affect the companies in which the fund
invests, fund share values may decline. Share
values can also decline if the specific companies
selected for fund investment fail to perform as the
adviser expects, regardless of
8 Phoenix Core Equity Fund
<PAGE>
general economic trends, industry trends, interest
rates and other economic factors. Finally,
decreases in share value from day to day will be
"paper" losses unless you actually sell your
shares. If your financial circumstances are likely
to require you to sell your shares at any
particular time, rather than holding them
indefinitely, you run the risk that your sale of
shares will occur when share values have declined.
If between the time you purchase shares and the
time you sell shares the value of the fund's
investments decreases you will lose money.
In addition to these general risks of investing in
the fund, there are several specific risks of
investing in the fund that you should note.
Small Market Capitalization Investing
The fund may invest in some smaller companies.
Companies with small capitalization are often
companies with a limited operating history or
companies in industries that have recently emerged
due to cultural, economic, regulatory or
technological developments. Such developments can
have a significant positive or negative effect on
small capitalization companies and their stock
performance. Given the limited operating history
and rapidly changing fundamental prospects,
investment returns from smaller capitalization
companies can be highly volatile. Smaller companies
may 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
and may, at times, be difficult to sell.
Securities Lending
When the fund lends portfolio securities it runs
the risk that the borrower will be unable or
unwilling to return the securities and the agreed
fee or premium. The value of the collateral taken
as security for the securities loaned may decline
in value or may be difficult to convert to cash in
the event that the fund must rely on the collateral
to recover the value of its securities. In these
circumstances the fund will suffer losses.
Futures Contracts
The fund may invest in financial futures contracts.
The adviser intends to invest in such securities
primarily to hedge or reduce the risk of holding
other investments. If the prices for futures
contracts and prices in the cash market do not
correlate as expected or if the advisers
expectations about interest rate, exchange rate or
general market movements are incorrect, the fund's
returns may not be as
Phoenix Core Equity Fund 9
<PAGE>
high as they would be if the adviser did not invest
in these securities. There is also a risk that the
market for reselling financial futures contracts
may be limited or nonexistent. In these
circumstances the fund can lose money.
Foreign Investing
The fund may invest in non-U.S. companies.
Investing in the securities of non-U.S. 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,
> differences and inefficiencies in transaction
settlement systems,
> the possibility of expropriation or
confiscatory taxation,
> adverse changes in investment or exchange
control regulations,
> political instability, and
> potential restrictions on the flow of
international capital.
Political and economic uncertainty as well as
relatively less public information about
investments may negatively impact the fund's
portfolio.
Foreign securities often trade with less frequency
and volume than domestic securities and therefore
may exhibit greater price volatility. Additionally,
dividends and interest payable on foreign
securities may be subject to foreign taxes withheld
prior to receipt by the fund.
Many of the foreign securities held by the fund
will not be registered with, nor will the issuers
of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange
Commission. 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 differ favorably or unfavorably from
the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance
of payment positions.
10 Phoenix Core Equity Fund
<PAGE>
Foreign Currency
Portions of the fund's assets may be invested in
securities denominated in foreign currencies.
Changes in foreign exchange rates will affect the
value of those securities denominated or quoted in
currencies other than the U.S. dollar. The forces
of supply and demand in the foreign exchange
markets determine exchange rates and these forces
are in turn affected by a range of economic,
political, financial, governmental and other
factors. Exchange rate fluctuations can affect the
fund's net asset value (share price) and dividends
either positively or negatively depending upon
whether foreign currencies are appreciating or
depreciating in value relative to the U.S. dollar.
Exchange rates fluctuate over both the short and
long terms.
Effective January 1, 1999, eleven European
countries will begin converting from their
sovereign currency to the European Union common
currency called the "Euro." This conversion may
expose the fund to certain risks including the
reliability and timely reporting of pricing
information of the fund's portfolio holdings. In
addition, one or more of the following may
adversely affect specific securities in the fund's
portfolio:
> known trends or uncertainties related to the
Euro conversion that an issuer reasonably
expects will have a material impact on
revenues, expenses or income from its
operations;
> competitive implications of increased price
transparency of European Union markets
(including labor markets) resulting from
adoption of a common currency and issuers'
plans for pricing their own products and
services in the Euro;
> issuers' ability to make required information
technology updates on a timely basis, and
costs associated with the conversion
(including costs of dual currency operations
through January 1, 2002);
> currency exchange rate risk and derivatives
exposure (including the disappearance of price
sources, such as certain interest rate
indices); and
> potential tax consequences.
The adviser does not expect to invest in any
securities that may be adversely effected by the
conversion to the Euro.
Phoenix Core Equity Fund 11
<PAGE>
Mutual Fund Investing
The fund may invest in money market mutual funds
for liquidity purposes, including money market
funds managed by the adviser or other advisers
controlled by the same persons who control the
adviser. When the fund purchases shares of another
mutual fund the assets it invests in the other
mutual fund incur expenses of that mutual fund such
as operating costs, advisory fees, and
administrative fees. These expenses reduce the
return the fund receives. In effect, there is a
layering of expenses: to the extent the fund
invests in other mutual funds there are two sets of
operating costs, advisory fees and administrative
fees to be paid. If the fund invests in a money
market mutual fund managed by the adviser this can
mean that the adviser receives advisory fees twice
for managing essentially the same assets.
Impact of the Year 2000 Issue
The Year 2000 issue is the result of computer
programs being written using two rather than four
digits to define the applicable year. There is the
possibility that some or all of a company's
computer programs that have date-sensitive software
may recognize a date using "00" as the year 1900
rather than the year 2000. If a company whose
securities are held by the fund does not "fix" its
Year 2000 issue it is possible that its operations
and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000
compliant may hurt the financial performance and
market price of companies whose securities are held
by the fund.
Management of The Fund
- -----------------------------------------------------------
The Adviser
Duff & Phelps Investment Management Co. ("DPIM") is
the investment adviser to the fund and is located
at 55 East Monroe Street, Suite 3600, Chicago,
Illinois 60603. DPIM also acts as investment
adviser to eight other mutual funds and as adviser
to institutional clients. As of September 30, 1998,
DPIM had approximately $14.5 billion in assets
under management on a discretionary basis.
12 Phoenix Core Equity Fund
<PAGE>
Prior Investment Performance of DPIM
The following table sets forth composite
performance data relating to the historical
performance of substantially all of the
institutional private accounts managed by DPIM
investment professionals that have substantially
the same investment objectives, policies,
strategies and risks as the fund. The data is
provided to illustrate the past performance of the
DPIM in managing substantially similar accounts as
compared to the S&P 500. Investors should not
consider this performance data as an indication of
past or future performance of the fund or of the
DPIM.
The DPIM has calculated its composite performance
data in compliance with the Performance
Presentation Standards of the Association for
Investment Management and Research ("AIMR-
PPS[TM]"). AIMR has not been involved with the
preparation or review of this illustration. AIMR is
a non-profit membership and education organization
with more than 60,000 members worldwide that, among
other things, has formulated a set of performance
presentation standards for investment advisers.
These AIMR performance presentation standards are
intended to promote full and fair presentations by
investment advisers of their performance results
and ensure uniformity in reporting so that
performance results of investment advisers are
directly comparable.
AIMR composite performance figures are a quarterly
aggregate of monthly returns of a group of similar
accounts which are time weighted and asset
weighted. Quarterly and yearly composite returns
are the result of geometrically linking monthly and
quarterly returns, respectively. (Each composite
return figure is compounded by the successive
period's composite return).
All returns presented were calculated on a total
return basis and include all dividends, interest,
accrued income and realized and unrealized gains
and losses. All returns reflect the deduction of
the maximum advisory fee of 0.75% of assets under
management, brokerage commissions and execution
costs paid by the DPIM's institutional private
accounts, without provision for income taxes. Only
those institutional private accounts where the DPIM
exercised full discretionary investment authority
have been included in the composite performance
data. The institutional private accounts included
in the DPIM's composite performance data are not
subject to the same expenses and specific tax
restrictions applicable to regulated investment
companies, such as the Core Equity Fund, under
Subchapter M of the Internal Revenue Code and are
not subject to Investment Company Act of 1940
restrictions on investment
Phoenix Core Equity Fund 13
<PAGE>
limitations and diversification. Consequently, the
DPIM's investment results could have been adversely
affected had these regulations applied to the
institutional private accounts.
The SEC standardized formula (average annual total
return) is calculated net of portfolio fees and
expenses as well as investment commissions while
AIMR composites are net of portfolio expenses (for
DPIM this consists of brokerage and transaction
costs only) but gross of management fees (which are
variable by client). A composite return is the
aggregate total return of a group of similar
accounts while the SEC formula is applied to only
one account (mutual fund). The time weighting of
the composite differs from the SEC formula in that
the monthly total returns calculated for each
account within the composite are adjusted for cash
flows and income accruals by assuming that these
flows occur mid-month. Consequently, composite
performance is not overstated as a result of new
investments nor penalized by withdrawals. Mutual
funds, in contrast, calculate their net asset value
daily and no adjustments would therefore be
required when calculating total returns. For AIMR
composites, accounts are dollar weighted to reflect
the proportionate effect of account size on total
return within the composite.
The investment results covering the period from
January 1, 1993 through September 30, 1997 have
been audited for consistency with the AIMR
Performance Presentation Standards by an
independent third party (not AIMR). The investment
results presented below could be calculated using
different methods thereby producing different
results. The performance below reflects past
performance of the DPIM for periods ending
September 30, 1998 for similarly managed
institutional private accounts and is not
indicative of future results for the Phoenix Core
Equity Fund.
<TABLE>
<CAPTION>
- ----------------------------------------------------
Period Adviser's Composite S&P 500
------ ------------------- -------
<S> <C> <C>
One Year 2.05% 9.15%
- ----------------------------------------------------
Three Years 21.64% 22.73%
- ----------------------------------------------------
Five Years 17.63% 19.99%
- ----------------------------------------------------
Ten Years 15.92% 17.30%
- ----------------------------------------------------
</TABLE>
14 Phoenix Core Equity Fund
<PAGE>
The institutional private accounts whose composite
returns are shown above were managed by a team of
DPIM professionals. The fund similarly is managed
by a team headed by Diane Mustain. For performance
information relating to the fund, see "Performance
Tables" and "Financial Highlights".
Subject to the direction of the fund's Board of
Trustees, DPIM is responsible for managing the
fund's investment program and the day-to-day
management of the fund's portfolio. DPIM manages
the fund's assets to conform with the investment
policies as described in this prospectus. The fund
pays DPIM a monthly investment management fee that
is accrued daily against the value of the fund's
net assets at the following rates.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
1st billion $1+ billion through $2 billion $2+ billion
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.75% 0.70% 0.65%
- -----------------------------------------------------------------------------------------
</TABLE>
The adviser has voluntarily agreed to assume total
fund operating expenses of the fund excluding
interest, taxes, brokerage fees, commissions and
extraordinary expenses, until August 31, 1999, to
the extent that such expenses exceed the following
percentages of the average annual net asset values
for the fund:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Class A Class B Class C
Shares Shares Shares
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Phoenix Core Equity Fund 1.25% 2.00% 2.00%
- --------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid
total management fees of $128,133. The ratio of
management fees to average net assets for the fiscal
year ended August 31, 1998 was 0.75%. The total
advisory fee of 0.75% of the aggregate net assets of
the fund is greater than that for most mutual funds;
however, the Trustees have determined that it is
comparable to fees charged by other mutual funds
whose investment objectives are similar to those of
the fund.
Portfolio Management
Diane Mustain serves as lead Portfolio Manager and
as such is responsible for the day-to-day operation
of the Fund. As lead Portfolio Manager she manages
the team of investment professionals responsible for
the selection of portfolio securities for the equity
portfolio. Ms. Mustain is an Executive Vice
President of DPIM and serves as Vice Chairman of its
Equity Strategy Committee. In addition, since 1993
Ms. Mustain has been a Sector
Phoenix Core Equity Fund 15
<PAGE>
Manager responsible for the Defensive Sector of the
core equity portfolio. Ms. Mustain was Group Vice
President from 1992 to 1993 where she was
responsible for the selection of consumer stocks for
the equity research model portfolio and provided
analytical input to the Investment Management
Committee. Ms. Mustain joined Phoenix Investment
Partners, Ltd., then known as Duff & Phelps
Corporation, in 1981.
Phoenix Growth and Income Fund
Investment Risk and Return Summary
- -------------------------------------------------------------------------
Investment Objective
Phoenix Growth and Income Fund has an investment
objective of seeking dividend growth, current
income and capital appreciation by investing in
common stocks. The fund seeks a total return that
exceeds the total return of the Standard and Poor's
500 Composite Stock Price Index (the "S&P 500") and
a dividend yield that exceeds the S&P 500's
dividend yield. There is no guarantee that the fund
will achieve the objective.
Principal Investment Strategies
> The fund will invest in equity
securities, primarily common stocks.
Under normal circumstances the fund
will invest at least 65% of its total
assets in equity securities.
> Equity securities include preferred
stock, securities that can be converted
into common stock or preferred stock
("convertible securities"), and
warrants to purchase common stock or
preferred stock.
> The fund's adviser uses a quantitative
value strategy to pursue the fund's
investment objective. The strategy
concentrates on the 1,500 largest
companies traded in the United States.
This strategy seeks securities of
companies that are undervalued relative
to the market in general and that have
improving fundamentals.
> The fund will invest only in the four
highest rating categories of
convertible securities. These are
commonly called "investment grade".
16 Phoenix Growth and Income Fund
<PAGE>
> The fund may engage in "securities
lending" to increase its investment
returns.
> The may invest up to 20% of its assets
in securities of foreign (non-U.S.)
issuers. Under normal circumstances,
however, the fund will not invest more
than 10% of its assets in foreign
securities.
> The fund may invest up to 20% of its
net assets in financial futures
contracts, options and options on
financial futures contracts. The fund
intends to invest in these securities
primarily for "hedging" purposes to
reduce the risk of holding other,
related investments. The fund may
invest up to 5% of its net assets
in these securities as an investment
unrelated to any hedging purpose.
> For liquidity purposes the fund may
invest up to 10% of its assets in money
market mutual funds. The fund may
invest in money market funds advised by
the fund's adviser or other advisers
controlled by the same persons who
control the fund's adviser.
> The fund may invest up to 5% of its
assets in a special investment company
issuing Standard & Poor's Depositary
Receipts ("SPDRs").
> Temporary defensive strategy: if the
adviser or subadviser believes that
market conditions are not favorable to
the fund's principal strategies the
fund may invest without limit in U.S.
government securities and in money
market instruments. When this happens
the fund may not achieve its investment
objective.
Principal Risks
If you invest in this fund you risk that you may
lose your investment.
The fund seeks to outperform the S&P 500 in total
return and dividend yield. The S&P 500 total return
can be negative. When this happens, the fund may
outperform the S&P 500 but still have a negative
return. In that case the value of your shares would
likely decline rather than increase. The adviser
may also fail in its objective to outperform the
S&P 500. Most of the fund's investments will be in
common stocks and other equity investments.
Conditions affecting the overall economy, specific
industries or companies in which the fund invests
can be worse than expected. As a result, the value
of your shares may decrease.
Phoenix Growth and Income Fund 17
<PAGE>
Increases in interest rates affecting the global
economy, particular industries or specific companies
can cause fixed income investments that the fund may
own to decline in value. This, too, can cause your
share value to decrease. Decreases in share value
from day to day will be "paper" losses unless you
actually sell your shares. If your financial
circumstances are likely to require you to sell your
shares at any particular time, rather than holding
them indefinitely, you run the risk that your sale
of shares will occur when share values have
declined. The adviser intends to invest nearly all
of the fund's assets in common stocks and other
securities, rather than holding significant amounts
of cash and short term investments. This can
increase the fund's net asset value more quickly if
those investments increase in value. It can cause
the fund's net asset value to decrease more quickly
if those investments decrease in value.
This fund may also invest in small companies as well
as larger companies. Smaller companies, regardless
of their location, may be affected to a greater
extent than larger companies by changes in general
economic conditions and conditions in particular
industries. Smaller companies may also be relatively
new and not have the same operating history and
"track record" as larger companies. This could make
future performance of smaller companies more
difficult to predict.
This fund may lend portfolio securities to financial
institutions to increase investment return. If the
borrower is unwilling or unable to return the
borrowed securities when due the fund can suffer
losses.
This fund may invest in companies in foreign
countries. Political and economic uncertainty as
well as relatively less public information about
investments may negatively impact the fund's
portfolio. Some investments may be made in
currencies other than U.S. dollars that will
fluctuate in value as a result of changes in the
currency exchange rate. Foreign markets and
currencies may not perform as well as U.S. markets.
This fund may invest in financial futures contracts,
options and options and financial futures contracts.
The adviser will make these investments primarily to
try to minimize the risk of other investments it
makes for the fund. These investments may not
protect the fund from losses, they may decrease
overall return, and they could, in unusual
circumstances, expose the fund to losses that could
be unlimited.
18 Phoenix Growth and Income Fund
<PAGE>
This fund may invest in other investment companies
and mutual funds, including a special fund based on
the S&P 500. Assets invested in other investment
companies and mutual funds will incur fees similar
to the investment management, custodial and other
fees that this fund charges. You will in effect
incur a second set of fees on these fund
investments.
Performance Tables
The table below shows how the fund's annual returns
for the life of the fund compare to those of a
broad-based securities market index. The fund's
past performance is not necessarily an indication
of how the fund will perform in the future.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Annual Total Returns (1) One Year(2) Life of the Fund(3)
------------------------ ----------- -------------------
<S> <C> <C>
Class A Shares (0.20)% 0.38%
- ----------------------------------------------------------------------
Class B Shares (0.61)% (0.17)%
- ----------------------------------------------------------------------
Class C Shares 3.63% 3.68%
- ----------------------------------------------------------------------
S&P 500 Stock Index(4) 3.18% 2.83%
- ----------------------------------------------------------------------
</TABLE>
(1) The fund's annual returns in the table above reflect the deduction of the
maximum sales charge for an investment in the fund's Class A Shares and a full
redemption in the fund's Class B Shares.
(2) Since September 25, 1997.
(3) Period September 25, 1997 through August 31, 1998.
(4) The S&P 500 Stock Index is an unmanaged but commonly used measure of common
stock total return performance. The S&P 500's performance does not reflect sales
charges.
Phoenix Growth and Income Fund 19
<PAGE>
Fund Expenses
- ------------------------------------------
This table illustrates all fees and expenses that
you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from
your investment)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a None 5% during the first year, 1% during the
percentage of the lesser of the value redeemed or decreasing 1% annually first year
the amount invested) to 2% during the fourth
and fifth years;
decreasing to 0% after
the fifth year
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
----------------------------------------------------------
Class A Class B Class C
Shares Shares Shares
------- ------- -------
Annual Fund Operating Expenses (expenses
that are deducted from fund assets)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees (b) 0.25% 1.00% 1.00%
Other Expenses 0.88% 0.88% 0.88%
---- ---- ----
Total Annual Fund Operating Expenses
(before reimbursement)(a) 1.88% 2.63% 2.63%
==== ==== ====
</TABLE>
------------------
(a) Actual Total Annual Fund Operating Expenses after expense reimbursement are:
Class A Shares 1.25%
Class B Shares 2.00%
Class C Shares 2.00%
(b) Distribution and Service Fees represent an asset based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
Example
This example is intended to help you compare the
cost of investing in the fund with the cost of
investing in other mutual funds.
The example assumes that you invest $10,000 in the
fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The
example also assumes that your investment has a 5%
return each year and that the fund's operating
expenses remain the same. In the case of Class B
Shares, it is assumed that your shares are
converted to Class A after eight years. Although
your actual costs may be higher or lower, based on
these assumptions your costs would be:
20 Phoenix Growth and Income Fund
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Class 1 year 3 years 5 years 10 years
----- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $657 $1,038 $1,443 $2,571
- -----------------------------------------------------------
Class B 666 1,017 1,395 2,782
- -----------------------------------------------------------
Class C 366 817 1,395 2,964
- -----------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not
redeem your shares:
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Class 1 year 3 years 5 years 10 years
----- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $657 $1,038 $1,443 $2,571
- -----------------------------------------------------------
Class B 266 817 1,395 2,782
- -----------------------------------------------------------
Class C 266 817 1,395 2,964
- -----------------------------------------------------------
</TABLE>
Note: Your actual expenses would be lower than those shown in the tables above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the fund's investment adviser.
Refer to the section "Management of the Fund" for information about expense
reimbursement.
Investment Strategies
- ------------------------------------------------------
Investment Objective
The fund has an investment objective of seeking
dividend growth, current income and capital
appreciation by investing in common stocks. The
fund seeks a total return that exceeds the total
return of the S&P 500 and a dividend yield that
exceeds the S&P 500's dividend yield. There is no
guarantee that the fund will achieve the objective.
The investment objective is a fundamental policy
that cannot be changed without shareholder
approval.
Principal Investment Strategies
The fund invests in a diversified portfolio of
securities of primarily domestic (U.S.) companies.
The fund is designed to invest in equity
securities. Under normal circumstances
> the fund intends to invest solely in equity
securities and will invest at least 65% of its
total assets in equity securities
Phoenix Growth and Income Fund 21
<PAGE>
> the fund will invest primarily in common
stocks, and
> the fund intends to be "fully invested" and
will attempt to limit its holdings of cash and
short term investments to no more than 2% of
its assets
The adviser uses a quantitative value strategy to
pursue its investment objective. Quantitative value
involves selecting securities primarily from the
equity securities of the 1,500 largest companies
traded in the United States, based on market
capitalization. The adviser seeks a desired balance
of risk and return potential, including a targeted
yield exceeding the yield of the S&P 500. This
strategy seeks securities of companies that are
undervalued relative to the market in general and
that have improving fundamentals. While the
adviser's strategy tends to concentrate it
investment selections in larger issuers, the fund
may invest in securities of issuers of any size.
The fund may also invest in other equity securities
including preferred stocks, preferred stocks
convertible into common stocks, fixed income
securities convertible into common stocks, warrants
and rights to purchase common stock. Convertible
securities have several unique investments
characteristics, such as
> Higher yields than common stocks but lower
yields than comparable nonconvertible
securities
> Typically less fluctuation in value than the
"underlying" common stock, that is, the common
stock that the investor receives if he
converts
> The potential for capital appreciation if the
market price of the underlying common stock
increases
The fund will only invest in the four highest
rating categories of convertible securities,
commonly called "investment grade" securities. If
the fund purchases an investment grade security
that loses its investment grade rating the fund is
not required to sell the security. Ratings are
established by nationally recognized statistical
rating agencies. Please see the Statement of
Additional Information for a detailed list of
rating categories.
The fund may lend portfolio securities to
broker-dealers and other financial institutions to
increase its investment returns. The total amount
of such lending can be as much as one-third of the
fund's total assets. When the fund lends securities
in this fashion the borrower returns the securities
at a pre-arranged time and pays
22 Phoenix Growth and Income Fund
<PAGE>
some form of premium or other fee for the
transaction. The fund receives all dividends and
other distributions made with respect to the loaned
securities. All securities loans are secured by
other marketable securities.
The fund may invest up to 20% of its total assets
in securities of foreign (non-U.S.) issuers.
However, under normal circumstances the fund will
not invest more than 10% of its total assets in
securities of foreign issuers.
The fund may invest up to 20% of its net assets
(fund assets less fund liabilities) in certain
"financial futures contracts", "options", and
"options on financial futures contracts". Financial
futures contracts consist of interest rate futures
contracts, foreign currency futures contracts, and
securities index futures contracts. These types of
securities permit an investor to "hedge" or
minimize the risk associated with owning certain
other securities. For example, the adviser can
purchase
> An interest rate futures contract that is
likely to increase in value at a time when a
fixed income security the fund owns might
decrease in value;
> A foreign currency futures contract that is
likely to increase in value at a time when a
security owned by the fund that directly or
indirectly is affected by currency exchanges
might decrease in value because the currency
exchange rate is less favorable; or
> A securities index futures contract that is
likely to increase in value at a time when
that securities market and securities traded
on that market might decrease in value.
The fund intends to invest in financial futures
contracts, options and options on financial futures
contracts only for hedging purposes. However, the
fund can invest up to 5% of its net assets in
initial premiums for these futures contracts and
options even if they are not purchased for hedging
purposes, that is, they are purchased as an
investment in their own right. Please see the
Statement of Additional Information for more
detailed information about futures and options.
The fund may invest in Standard & Poor's Depositary
Receipts ("SPDRs"), shares of a unit investment
trust that is traded on the American Stock
Exchange. The fund may not invest more than 5%
Phoenix Growth and Income Fund 23
<PAGE>
of its assets in SPDRs. Each SPDR represents a
proportionate interest, in substantially the same
weighting, as the stocks that make up the Standard
& Poor's 500 Index ("S&P 500").
For liquidity purposes the fund may also invest up
to 10% of its assets in one or more money market
funds, including a money market fund managed by the
adviser or another adviser controlled by the same
persons as the adviser. No more than 5% of its
assets will be invested in any one money market
mutual fund. Investments in SPDRs count toward the
10% limitation.
Note: If the fund's adviser determines that market
conditions are not favorable to the types of
investments the adviser ordinarily intends to hold,
the fund may invest without limitation in any
combination of U.S. Government securities and money
market securities. In such instances, the fund may
not achieve its stated investment objective.
Please refer to the Statement of Additional
Information for more detailed information about
these and other investment techniques.
Risks Related to Investment Strategies
- --------------------------------------------------------------------------
General
The fund's focus is dividend growth, current income
and capital appreciation. The adviser intends to
invest fund assets so that the fund's total return
and dividend yield exceed average total return and
dividend yield for companies included in the S&P
500. In this sense the fund seeks to outperform the
S&P 500. The S&P 500 can have negative returns,
however. When that happens, the fund may outperform
the S&P 500 but still have negative returns. The
value of the fund's investments, as well as the
value of stocks included in the S&P 500, can
decrease for a number of reasons. For example,
changing economic conditions may cause a decline in
the value of many or even most equity and fixed
income investments. Particular industries can face
poor markets for their products or services so that
companies engaged in those businesses do not do as
well as companies in other industries. Interest
rate changes may improve prospects for certain
types of businesses and they may worsen prospects
for others. To the extent that the fund's
investments are affected by general economic
declines, declines in industries, and interest rate
changes that negatively affect the companies in
which the fund invests, fund share values may
decline. Share values can also decline, or can fail
to perform as well
24 Phoenix Growth and Income Fund
<PAGE>
as stocks included in the S&P 500 if the specific
companies the adviser selects for the fund fail to
perform as the adviser expects, regardless of
general economic trends, industry trends, interest
rates and other economic factors. Finally,
decreases in share value from day to day will be
"paper" losses unless you actually sell your
shares. If your financial circumstances are likely
to require you to sell your shares at any
particular time, rather than holding them
indefinitely, you run the risk that your sale of
shares will occur when share values have declined.
If between the time you purchase shares and the
time you sell shares the value of the fund's
investments decreases you will lose money.
The adviser intends to keep cash and short term
investments below 2% of the fund's assets under
normal circumstances. By keeping the fund's assets
"fully invested" the adviser intends to maximize
the fund's opportunity to increase its net asset
value. However, being "fully invested" in common
stocks and other securities the fund's net asset
value will decrease if the value of those
investments decreases.
In addition to these general risks of investing in
the fund, there are several specific risks of
investing in the fund that you should note.
Small Market Capitalization Investing
The fund may invest in some smaller companies.
Companies with small capitalization are often
companies with a limited operating history or
companies in industries that have recently emerged
due to cultural, economic, regulatory or
technological developments. Such developments can
have a significant positive or negative effect on
small capitalization companies and their stock
performance. Given the limited operating history
and rapidly changing fundamental prospects,
investment returns from smaller capitalization
companies can be highly volatile. Smaller companies
may 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
and may, at times, be difficult to sell.
Securities Lending
When the fund lends portfolio securities it runs
the risk that the borrower will be unable or
unwilling to return the securities and the agreed
fee or premium. The value of the collateral taken
as security for the securities loaned may decline
in value or may be difficult to convert to cash in
the event that the fund must rely on the collateral
to recover the value of its securities. In these
circumstances the fund will suffer losses.
Phoenix Growth and Income Fund 25
<PAGE>
Foreign Investing
The fund may invest in non-U.S. companies.
Investing in the securities of non-U.S. 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,
> differences and inefficiencies in transaction
settlement systems,
> the possibility of expropriation or
confiscatory taxation,
> adverse changes in investment or exchange
control regulations,
> political instability, and
> potential restrictions on the flow of
international capital.
Political and economic uncertainty as well as
relatively less public information about
investments may negatively impact the fund's
portfolio.
Foreign securities often trade with less frequency
and volume than domestic securities and therefore
may exhibit greater price volatility. Additionally,
dividends and interest payable on foreign
securities may be subject to foreign taxes withheld
prior to receipt by the fund.
Many of the foreign securities held by the fund
will not be registered with, nor will the issuers
of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange
Commission. 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 differ favorably or unfavorably from
the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance
of payment positions.
26 Phoenix Growth and Income Fund
<PAGE>
Foreign Currency
Portions of the fund's assets may be invested in
securities denominated in foreign currencies.
Changes in foreign exchange rates will affect the
value of those securities denominated or quoted in
currencies other than the U.S. dollar. The forces
of supply and demand in the foreign exchange
markets determine exchange rates and these forces
are in turn affected by a range of economic,
political, financial, governmental and other
factors. Exchange rate fluctuations can affect the
fund's net asset value (share price) and dividends
either positively or negatively depending upon
whether foreign currencies are appreciating or
depreciating in value relative to the U.S. dollar.
Exchange rates fluctuate over both the short and
long terms.
Effective January 1, 1999, eleven European
countries will begin converting from their
sovereign currency to the European Union common
currency called the "Euro." This conversion may
expose the fund to certain risks including the
reliability and timely reporting of pricing
information of the fund's portfolio holdings. In
addition, one or more of the following may
adversely affect specific securities in the fund's
portfolio:
> known trends or uncertainties related to the
Euro conversion that an issuer reasonably
expects will have a material impact on
revenues, expenses or income from its
operations;
> competitive implications of increased price
transparency of European Union markets
(including labor markets) resulting from
adoption of a common currency and issuers'
plans for pricing their own products and
services in the Euro;
> issuers' ability to make required information
technology updates on a timely basis, and
costs associated with the conversion
(including costs of dual currency operations
through January 1, 2002);
> currency exchange rate risk and derivatives
exposure (including the disappearance of price
sources, such as certain interest rate
indices); and
> potential tax consequences.
The adviser does not expect to invest in any
securities that may be adversely effected by the
conversion to the Euro.
Phoenix Growth and Income Fund 27
<PAGE>
Future Contracts and Options
The fund may invest in financial futures contracts,
options, and options relating to financial futures
contracts. The adviser intends to invest in such
securities primarily to hedge or reduce the risk of
holding other investments. If the prices for
futures contracts and prices in the cash market do
not correlate as expected or if the advisers
expectations about interest rate, exchange rate or
general market movements are incorrect, the fund's
returns may not be as high as they would be if the
adviser did not invest in these securities. There
is also a risk that the market for reselling
financial futures contracts, options and options
relating to financial futures contracts may be
limited or nonexistent. The fund could incur
unlimited losses if it cannot liquidate certain
futures contracts and options positions. In some
market circumstances the fund can incur a loss
because it bought an option on a futures contract
at the same time that it would have realized a gain
by buying or selling the futures contract itself.
The adviser's decisions about the nature and timing
of futures contract and options transaction may
result in losses when other investors' decisions
about the same contracts and options result in
gains.
Mutual Fund Investing
The fund may invest in money market mutual funds
for liquidity purposes, including money market
funds managed by the adviser or someone controlled
by the same persons who control the adviser. When
the fund purchases shares of another mutual fund
the assets it invests in the other mutual fund
incur expenses such as operating costs, advisory
fees, and administrative fees. These expenses
reduce the return the fund receives. In effect,
there is a layering of expenses: to the extent the
fund invests in other mutual funds there are two
sets of operating costs, advisory fees and
administrative fees to be paid. If the fund invests
in a money market mutual fund managed by the
adviser this can mean that the adviser receives
advisory fees twice for managing essentially the
same assets.
SPDRs
The same types of events and circumstances
affecting stocks generally can affect the value of
SPDRs. General market conditions, conditions
affecting the S&P 500 stocks, governmental fiscal
or monetary and other factors may cause the S&P 500
stocks to decrease in value. If these stocks
decrease in value the SPDRs will also decrease.
SPDRs are not actively managed. This means that he
unit investment trust that issues SPDRs does not
buy or sell stocks comprising the S&P 500 in
reaction to market events or
28 Phoenix Growth and Income Fund
<PAGE>
occurrences affecting some or all of the component
stocks. Unless and until the composition of the S&P
500 itself changes, the value of SPDRs will be
based on the experience, positive or negative, of
its component stocks.
Impact of the Year 2000 Issue
The Year 2000 issue is the result of computer
programs being written using two rather than four
digits to define the applicable year. There is the
possibility that some or all of a company's
computer programs that have date-sensitive software
may recognize a date using "00" as the year 1900
rather than the year 2000. If a company whose
securities are held by the fund does not "fix" its
Year 2000 issue it is possible that its operations
and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000
compliant may hurt the financial performance and
market price of companies whose securities are held
by the fund.
Management of The Fund
- ----------------------------------------------------
The Adviser
Phoenix Investment Counsel, Inc. ("Phoenix") is the
investment adviser to the fund and is located at 56
Prospect Street, Hartford, CT 06115. Phoenix also
acts as the investment adviser for 14 other mutual
funds, as subadviser to three mutual funds and as
adviser to institutional clients. As of September
30, 1998, Phoenix had $21.3 billion in assets under
management. Phoenix has acted as an investment
adviser for over sixty years.
Subject to the direction of the fund's Board of
Trustees, Phoenix is responsible for managing the
fund's investment program and the day-to-day
management of the fund's portfolio. Phoenix manages
the fund's assets to conform with the investment
policies as described in this prospectus. The fund
pays Phoenix a monthly investment management fee
that is accrued daily against the value of the
fund's net assets at the following rates.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
1st billion $1+ billion through $2 billion $2+ billion
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.75% 0.70% 0.65%
- -----------------------------------------------------------------------------------------
</TABLE>
Phoenix Growth and Income Fund 29
<PAGE>
The adviser has voluntarily agreed to assume total
fund operating expenses of the fund excluding
interest, taxes, brokerage fees, commissions and
extraordinary expenses, until August 31, 1999, to
the extent that such expenses exceed the following
percentages of the average annual net asset values
for the fund:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Class A Class B Class C
Shares Shares Shares
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Phoenix Growth and Income
Fund 1.25% 2.00% 2.00%
- --------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid
total management fees of $355,855. The ratio of
management fees to average net assets for the fiscal
year ended August 31, 1998 was 0.75%. The total
advisory fee of 0.75% of the aggregate net assets of
the fund is greater than that for most mutual funds;
however, the Trustees have determined that it is
comparable to fees charged by other mutual funds
whose investment objectives are similar to those of
the fund.
Portfolio Management
Steven L. Colton serves as portfolio manager and as
such is primarily responsible for the day-to-day
operation of the fund. Mr. Colton joined Phoenix
Investment Partners, Ltd. in June 1997. Previously,
Mr. Colton was Portfolio Manager for the American
Century Income & Growth Fund ("ACIGF") from its
inception on December 17, 1990 through May 30,
1997. Dong Zhang serves as a member of the team
that manages Phoenix Growth and Income Fund. Mr.
Zhang also was a member of the portfolio management
team for ACIGF from June 1996 through June 4, 1997.
The ACIGF has substantially similar investment
objectives, policies and strategies as the Growth
and Income Fund. The cumulative total return for
ACIGF from its inception through March 31, 1997 was
190.73%. At March 31, 1997 that fund had $887.1
million in net assets. Average annual returns for
the one-year, three-year and five-year periods
ended March 31, 1997 and for the period from
inception through March 31, 1997, compared with the
performance of the Average Growth & Income Fund and
S&P 500 were:
30 Phoenix Growth and Income Fund
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Period (through Average Growth &
March 31, 1997) ACIGF Income Fund(a) S&P 500(b)
--------------- ----- ---------------- ----------
<S> <C> <C> <C>
One Year 19.56% 15.52% 19.94%
- --------------------------------------------------------------------------
Three Years 21.64% 17.84% 22.36%
- --------------------------------------------------------------------------
Five Years 16.41% 14.15% 16.46%
- --------------------------------------------------------------------------
Inception through
March 31, 1997 18.49% 15.75%(c) 17.54%
- --------------------------------------------------------------------------
</TABLE>
(a) The Average Growth & Income Fund is a Lipper Category of
funds that combine a growth of earnings orientation and an
income requirement for level and/or rising dividends. Lipper
Analytical Services, Inc. is an independent mutual fund service
that groups funds according to their investment objective.
(b) The S&P 500 is an unmanaged index of common stocks that is
considered to be generally representative of the United States
stock market. The index has been adjusted to reflect
reinvestment of dividends.
(c) For the period from 12/20/90 (the date nearest the fund's
inception for which data are available) to 3/31/97.
Historical performance is not indicative of future
performance. The ACIGF is a separate unrelated
fund, and its historical performance is not
indicative of the potential performance of the
Phoenix Growth and Income Fund. Share prices and
investment returns will fluctuate to reflect market
conditions, as well as changes in company-specific
fundamentals of securities held in the portfolio.
For performance information relating to the Phoenix
Growth and Income Fund, see "Performance Tables"
and "Financial Highlights".
Mr. Colton is a graduate of the University of
California, San Diego and Stanford University. Mr.
Colton was an investment professional with
American Century Companies from 1987 through May
30, 1997. Mr. Zhang received his Ph.D. in Physics
from Stanford University and joined American
Century Companies in 1993. Mr. Zhang served as
portfolio manager of the American Century
Companies prior to joining Phoenix Investment
Partners, Ltd. in June 1997.
Impact of the Year 2000 Issue
The Trustees have directed management to ensure
that the systems used by service providers
(Phoenix, DPIM and their affiliates) in support of
the funds' operations be assessed and brought into
Year 2000 compliance. Based upon preliminary
assessments, Phoenix has determined that it will be
required to modify or replace portions of its
software so that its computer systems will properly
utilize dates beyond December 31, 1999. Phoenix
management believes that the majority of these
systems are already Year 2000
Phoenix Growth and Income Fund 31
<PAGE>
compliant. Phoenix believes that with modifications
to existing software and conversions to new
software, the Year 2000 issue will be mitigated. It
is anticipated that such modifications and
conversions will be completed on a timely basis. It
is not known at this time if there could be a
material impact on the operations of Phoenix or its
affiliates or the fund if such modifications and
conversions are not completed timely.
Phoenix will utilize both internal and external
resources to reprogram, or replace, and test the
software for Year 2000 modifications. Certain
systems are already in the process of being
converted due to previous initiatives and it is
expected that all core systems will be remediated by
December 31, 1998 and tested by June 1999. The total
cost to become Year 2000 compliant is not an expense
of the fund and is not expected to have a material
impact on the operating results of Phoenix.
Pricing of Fund Shares
- ---------------------------------------------------
How is the Share Price determined?
The fund calculates a share price for each class of
its shares. The share price is based on the net
assets of the fund and the number of outstanding
shares. In general, the fund calculates net asset
value by:
> adding the values of all securities and other
assets of the fund,
> subtracting liabilities, and
> dividing by the total number of outstanding
shares of the fund.
Asset Value: The fund's investments are valued at
market value. If market quotations are not
available, the fund determines a "fair value" for
an investment according to rules and procedures
approved by the Trustees. Foreign and domestic debt
securities (other than short-term investments) are
valued on the basis of broker quotations or
valuations provided by a pricing service approved
by the Trustees when such prices are believed to
reflect the fair value of such securities. Foreign
and domestic equity securities are valued at the
last sale price or, if there has been no sale that
day, at the last bid price, generally. Short-term
investments having a remaining maturity of sixty
days or less are valued at amortized cost, which
the Trustees have determined approximates market
value.
32 Phoenix Equity Series Fund
<PAGE>
Liabilities: Class specific expenses, distribution
fees, service fees and other liabilities are
deducted from the assets of each class. Expenses
and liabilities that are not class specific (such
as management fees) are allocated to each class in
proportion to each class's net assets.
Net Asset Value: The liability allocated to a
class plus any other expenses are deducted from the
proportionate interest of such class in the assets
of the fund. The resulting amount for each class is
then divided by the number of shares outstanding of
that class to produce each class's net asset value
per share.
The net asset value per share of each class of the
fund is determined on days when the New York Stock
Exchange (the "NYSE") is open for trading as of the
close of trading (normally
4:00 PM eastern time). The fund will not calculate
its net asset values per share on days when the
NYSE is closed for trading. Trading of securities
held by the fund in foreign markets may negatively
or positively impact the value of such securities
on days when the fund neither trades securities nor
calculates its net asset values (i.e., weekends and
certain holidays).
At what price are shares purchased?
All investments received by the fund's authorized
agents prior to the close of regular trading on the
NYSE (normally 4:00 PM eastern time) will be
executed based on that day's net asset value.
Shares credited to your account from the
reinvestment of fund distributions will be in full
and fractional shares that are purchased at the
closing net asset value on the next business day on
which the fund's net asset value is calculated
following the dividend record date.
Sales Charges
- ------------------------------------------
What are the classes and how do they differ?
The fund presently offers three classes of shares
that have different sales and distribution charges
(see "Fund Expenses" previously in this
prospectus). The fund has adopted distribution and
service plans allowed under Rule 12b-1 of the
Investment Company Act of 1940 that authorize the
fund to pay distribution and service fees for the
sale of its shares and for services provided to
shareholders.
Phoenix Equity Series Fund 33
<PAGE>
What arrangement is best for you?
The different classes permit you to choose the
method of purchasing shares that is most beneficial
to you. In choosing a class, consider the amount of
your investment, the length of time you expect to
hold the shares, whether you decide to receive
distributions in cash or to reinvest them in
additional shares, and any other personal
circumstances. Depending upon these considerations,
the accumulated distribution and service fees and
contingent deferred sales charges of one class may
be more or less than the initial sales charge and
accumulated distribution and service fees of
another class of shares bought at the same time.
Because distribution and service fees are paid out
of the fund's assets on an ongoing basis, over time
these fees will increase the cost of your
investment and may cost you more than paying other
types of sales charges.
Class A Shares. If you purchase Class A Shares, you
will pay a sales charge at the time of purchase
equal to 4.75% of the offering price (4.99% of the
amount invested). The sales charge may be reduced
or waived under certain conditions. Class A Shares
are not subject to any charges by the fund when
redeemed. Class A Shares have lower distribution
and service fees (0.25%) and pay higher dividends
than any other class.
Class B Shares. If you purchase Class B Shares, you
will not pay a sales charge at the time of
purchase. If you sell your Class B Shares within
the first 5 years after they are purchased, you
will pay a sales charge of up to 5% of your shares'
value. See "Deferred Sales Charge
Alternative--Class B and C Shares" below. This
charge declines to 0% over a period of 5 years and
may be waived under certain conditions. Class B
shares have higher distribution and service fees
(1.00%) and pay lower dividends than Class A
Shares. Class B Shares automatically convert to
Class A Shares eight years after purchase.
Purchases of Class B Shares may be inappropriate
for any investor who may qualify for reduced sales
charges of Class A Shares and anyone who is over 85
years of age. The underwriter may decline purchases
in such situations.
Class C Shares. If you purchase Class C Shares, you
will not pay a sales charge at the time of
purchase. If you sell your Class C Shares within
the first year after they are purchased, you will
pay a sales charge of 1%. See "Deferred Sales
Charge Alternative--Class B and C Shares" below.
Class C Shares have the same distribution and
service fees (1.00%) and pay comparable dividends
as Class B Shares. Class C Shares do not convert to
any other class of shares of the fund.
34 Phoenix Equity Series Fund
<PAGE>
Initial Sales Charge Alternative--Class A Shares
The public offering price of Class A Shares is the
net asset value plus a sales charge that varies
depending on the size of your purchase (see "Class
A Shares--Reduced Sales Charges: Combination
Purchase Privilege" in the Statement of Additional
Information). Shares purchased based on the
automatic reinvestment of income dividends or
capital gains distributions are not subject to any
sales charges. The sales charge is divided between
your investment dealer and the fund's underwriter
(Phoenix Equity Planning Corporation or "PEPCO").
Sales Charge you may pay to purchase Class A Shares
<TABLE>
<CAPTION>
Sales Charge as
a percentage of
------------------------------
Amount of Net
Transaction Offering Amount
at Offering Price Price Invested
- --------------------------------- ------ ------
<S> <C> <C>
Under $50,000 4.75% 4.99%
$50,000 but under $100,000 4.50 4.71
$100,000 but under $250,000 3.50 3.63
$250,000 but under $500,000 3.00 3.09
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
</TABLE>
Deferred Sales Charge Alternative--
Class B and C Shares
Class B and C Shares are purchased without an
initial sales charge; however, shares sold within a
specified time period are subject to a declining
contingent deferred sales charge ("CDSC") at the
rates listed below. The sales charge will be
multiplied by the then current market value or the
initial cost of the shares being redeemed,
whichever is less. No sales charge will be imposed
on increases in net asset value or on shares
purchased through the reinvestment of income
dividends or capital gains distributions. To
minimize the sales charge, shares not subject to
any charge will be redeemed first, followed by
shares held the longest time. To calculate the
amount of shares owned and time period held, all
Class B Shares purchased in any month are
considered purchased on the last day of the
preceding month, and all Class C Shares are
considered purchased on the trade date.
Deferred Sales charge you may pay to sell Class B
Shares
<TABLE>
<CAPTION>
Year 1 2 3 4 5 6+
--------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CDSC 5% 4% 3% 2% 2% 0%
</TABLE>
Phoenix Equity Series Fund 35
<PAGE>
Deferred Sales charge you may pay to sell
Class C Shares
<TABLE>
<CAPTION>
Year 1 2+
--------------------------------------------------
<S> <C> <C> <C>
CDSC 1% 0%
</TABLE>
Your Account
- -----------------------------------------
Opening an Account
Your financial advisor can assist you with your
initial purchase as well as all phases of your
investment program. If you are opening an account
by yourself, please follow the instructions
outlined below.
Step 1.
Your first choice will be the initial amount you
intend to invest.
Minimum initial investments:
> $25 for individual retirement accounts, or
accounts that use the systematic exchange
privilege, or accounts that use the
Investo-Matic program (see below for more
information on the Investo-Matic program).
> There is no initial dollar requirement for
defined contribution plans, profit-sharing
plans, or employee benefit plans. There is
also no minimum for reinvesting dividends and
capital gains into another account.
> $500 for all other accounts.
Minimum additional investments:
> $25 for any account.
> There is no minimum for defined contribution
plans, profit-sharing plans, or employee
benefit plans. There is also no minimum for
reinvesting dividends and capital gains into
an existing account.
36 Phoenix Equity Series Fund
<PAGE>
Step 2.
Your second choice will be what class of shares to
buy. The fund offers three classes of shares for
individual investors. Each has different sales and
distribution charges. Because all future
investments in your account will be made in the
share class you choose when you open your account,
you should make your decision carefully. Your
financial advisor can help you pick the share class
that makes the most sense for your situation.
Step 3.
Your next choice will be how you want to receive
any dividends and capital gain distributions. Your
options are:
> Receive both dividends and capital gain
distributions in additional shares
> Receive dividends in cash and capital gain
distributions in additional shares
> Receive both dividends and capital gain
distributions in cash
No interest will be paid on uncashed distribution
checks.
How To Buy Shares
- ----------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
To Open An Account
- -------------------------------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
- -------------------------------------------------------------------------------------------------
Complete a New Account Application and send it with a check
Through the mail payable to the fund. Mail them to: State Street Bank, P.O. Box
8301, Boston, MA 02266-8301.
- -------------------------------------------------------------------------------------------------
By Federal Funds wire Call us at 1-800-243-1574 (press 1, then 0).
- -------------------------------------------------------------------------------------------------
Complete the appropriate section on the application and send it
By Investo-Matic with your initial investment payable to the fund. Mail them to:
State Street Bank, P.O. Box 8301, Boston, MA 02266-8301.
- -------------------------------------------------------------------------------------------------
By telephone exchange Call us at 1-800-243-1574 (press 1, then 0).
- -------------------------------------------------------------------------------------------------
</TABLE>
Phoenix Equity Series Fund 37
<PAGE>
How to Sell Shares
- -----------------------------------------------
You have the right to have the fund buy back shares
at the net asset value next determined after
receipt of a redemption order by the fund's
Transfer Agent or an authorized agent. In the case
of a Class B or C Share redemption, you will be
subject to the applicable deferred sales charge, if
any, for such shares. Subject to certain
restrictions, shares may be redeemed by telephone
or in writing. In
addition, shares may be sold through securities
dealers, brokers or agents who may charge customary
commissions or fees for their services. The fund
does not charge any redemption fees. Payment for
shares redeemed is made within seven days; however,
redemption proceeds will not be disbursed until
each check used for purchases of shares has been
cleared for payment by your bank, which may take up
to 15 days after receipt of the check.
<TABLE>
- -------------------------------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
- -------------------------------------------------------------------------------------------------
Send a letter of instruction and any share certificates (if you
hold certificate shares) to: State Street Bank, P.O. Box 8301,
Through the mail Boston, MA 02266-8301. Be sure to
include the registered owner's name, fund and
account number, number of shares or dollar
value you wish to sell.
- -------------------------------------------------------------------------------------------------
For sales up to $50,000, requests can be made by calling
By telephone 1-800-243-1574.
- -------------------------------------------------------------------------------------------------
By telephone exchange Call us at 1-800-243-1574 (press 1, then 0).
- -------------------------------------------------------------------------------------------------
</TABLE>
Things You Should Know When Selling Shares
- -------------------------------------------------------------------------------
The fund reserves the right to pay large
redemptions "in-kind" (in securities owned by the
fund rather than in cash). Large redemptions are
those over $250,000 or 1% of the fund's net assets.
Additional documentation will be required for
redemptions by organizations, fiduciaries, or
retirement plans, or if redemption is requested by
anyone but the shareholder(s) of record. Transfers
between broker-dealer "street" accounts are
governed by the accepting broker-dealer. Questions
regarding this type of transfer should be directed
to your financial advisor. Redemption requests will
not be honored until all required documents in
proper form have been received. To avoid delay in
redemption or transfer, shareholders having
questions about specific requirements should
contact the fund's Transfer Agent at (800)
243-1574.
38 Phoenix Equity Series Fund
<PAGE>
Redemptions by Mail
> Send a clear letter of instructions if all of
these apply:
o Your shares are registered individually,
jointly, or as custodian under the Uniform
Gifts to Minors Act or Uniform Transfers to
Minors Act.
o The proceeds do not exceed $50,000.
o The proceeds are payable to the registered
owner at the address on record.
> Send a clear letter of instructions with a
signature guarantee when any of these apply:
o You are selling more than $50,000 worth of
shares.
o The name or address on the account has changed
within the last 60 days.
o You want the proceeds to go to a different
name or address than on the account.
If you are selling shares held in a corporate or
fiduciary account, please contact the fund's
Transfer Agent at 1-800-243-1574.
The signature on your request must be guaranteed by
an eligible guarantor institution as defined by the
fund's Transfer Agent in accordance with its
signature guarantee procedures. Currently, such
procedures generally permit guarantees by banks,
broker dealers, credit unions, national securities
exchanges, registered securities associations,
clearing agencies and savings associations.
Selling Shares by Telephone
The Transfer Agent will use reasonable procedures
to confirm that telephone instructions are genuine.
Address and bank account information are verified,
redemption instructions are taped, and all
redemptions are confirmed in writing.
The individual investor bears the risk from
instructions given by an unauthorized third party
that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the
telephone redemption privilege at any time with 60
days notice to shareholders.
Phoenix Equity Series Fund 39
<PAGE>
During times of drastic economic or market changes,
telephone redemptions may be difficult to make or
temporarily suspended.
Account Policies
- ---------------------------------------------
Account Reinstatement Privilege
For 180 days after you sell your Class A, B, or C
Shares, you can purchase Class A Shares of any fund
at net asset value, with no sales charge, by
reinvesting all or part of your proceeds, but not
more. Send your written request to State Street
Bank, P.O. Box 8301, Boston, MA 02266-8301. You can
call us at 1-800-243-1574 for more information.
Please remember, a redemption and reinvestment are
considered to be a sale and purchase for
tax-reporting purposes. Class B shareholders who
have had the contingent deferred sales charge
waived because they are in the Systematic
Withdrawal Program are not eligible for this
reinstatement privilege.
Redemption of Small Accounts
Due to the high cost of maintaining small accounts,
if your account balance is less than $200, you may
receive a notice requesting you to bring the
balance up to $200 within 60 days. If you do not,
the shares in the account will be sold at net asset
value, and a check will be mailed to the address of
record.
Exchange Privileges
You should read the prospectus carefully before
deciding to make an exchange. You can obtain a
prospectus from your financial advisor or by
calling us at 1-800-243-4361 or accessing our Web
site at www.phoenixinvestments.com.
o You may exchange shares for another fund in the
same class of shares; e.g., Class A for Class
A.
o Exchanges may be made by phone (1-800-243-1574)
or by mail (State Street Bank, P.O. Box 8301,
Boston, MA 02266-8301).
o The amount of the exchange must be equal to the
minimum initial investment required.
40 Phoenix Equity Series Fund
<PAGE>
o Because excessive trading can hurt fund
performance and harm other shareholders, the
Fund reserves the right to temporarily or
permanently end exchange privileges or reject
an order from anyone who appears to be
attempting to time
the market, including investors who request
more than one exchange in any 30-day period.
The fund's underwriter has entered into
agreements with certain market timing firms
permitting them to exchange by telephone. These
privileges are limited, and the fund
distributor has the right to reject or suspend
them.
Dividends and Distributions
Unless you elect to receive distributions in cash,
dividends and capital gain distributions are paid
in additional shares. All distributions, cash or
additional shares, are subject to federal income
tax and may be subject to state, local and other
taxes.
Retirement Plans
Shares of the fund may be used as investments under
the following qualified prototype retirement plans:
traditional IRA, rollover IRA, SIMPLE IRA, Roth
IRA, 401(k) plans, profit-sharing, money purchase
plans, and 403(b) plans. For more information, call
1-800-243-4361.
Investor Services
- ----------------------------------------------
Investo-Maticr is a systematic investment plan that
allows you to have a specified amount automatically
deducted from your checking or savings account and
then deposited into your mutual fund account. Just
complete the Investo-Matic Section on the
application and include a voided check.
Systematic Exchanger allows you to automatically
move money from one Phoenix Fund to another on a
monthly, quarterly, semi-annual or annual basis.
Shares of one Phoenix Fund will be exchanged for
shares of the same class of another fund at the
interval you select. To sign up, just complete the
Systematic Exchange Section on the application.
Telephone Exchanger lets you exchange shares of one
fund for the same class of shares in another fund,
using our customer service telephone service. See
the Telephone Exchange Section on the application.
Phoenix Equity Series Fund 41
<PAGE>
Systematic Withdrawal Programr allows you to
periodically redeem a portion of your account on a
predetermined monthly, quarterly, semiannual, or
annual basis. Sufficient shares will be redeemed on
the 15th of the month at the closing net asset
value so that the
payment is made about the 20th of the month. The
program also provides for redemptions on or about
the 10th, 15th, or 25th with proceeds directed
through Automated Clearing House (ACH) to your
bank. The minimum withdrawal is $25.00, and minimum
account balance requirements continue. Shareholders
in the program must own fund shares worth at least
$5,000.
Tax Status of Distributions
- --------------------------------------------------------
The fund plans to make distributions from net
investment income semiannually, and to distribute
net realized capital gains, if any, at least
annually. Distributions of short-term capital gains
and net investment income are taxable to
shareholders as ordinary income. Long-term capital
gains, if any, distributed to shareholders and
which are designated by the fund as capital gains
distributions, are taxable to shareholders as
long-term capital gain distributions regardless of
the length of time you have owned your shares.
Financial Highlights
- -------------------------------------------------
These tables are intended to help you understand
the funds' financial performance since inception.
Certain information reflects financial results for
a single fund share. The total returns in the table
represent the rate that an investor would have
earned on an investment in the fund (assuming
reinvestment of all dividends and distributions).
This information has been audited by
PricewaterhouseCoopers LLP, independent
accountants. Their report, together with the funds'
financial statements, are included in the funds'
most recent Annual Report.
42 Phoenix Equity Series Fund
<PAGE>
Financial Highlights (continued)
- -------------------------------------------------------------
Phoenix Core Equity Fund
<TABLE>
<CAPTION>
Class A Class B Class C
-------------- ----------------- ---------------
From Inception From Inception From Inception
9/25/97 to 9/25/97 to 9/25/97 to
8/31/98 8/31/98 8/31/98
-------------- ----------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00
Income from investment operations(1)
Net investment income (loss) 0.00(2)(3) (0.08)(2)(3) (0.08)(2)(3)
Net realized and unrealized gain (loss) (0.09) (0.08) (0.07)
----------- --------- ------
Total from investment operations (0.09) (0.16) (0.15)
----------- --------- ------
Less distributions
Dividends from net realized gains -- -- --
In excess of net investment income (0.04) (0.03) (0.03)
----------- --------- ------
Total distributions (0.04) (0.03) (0.03)
----------- --------- ------
Change in net asset value (0.13) (0.19) (0.18)
----------- --------- ------
Net asset value, end of period $ 9.87 $ 9.81 $ 9.82
=========== ========= ======
Total return(4) (0.93)%(5) (1.61)%(5) (1.52)%(5)
Ratios/supplemental data:
Net assets, end of period (thousands) $22,683 $6,801 $2,514
Ratio to average net assets of:
Operating expenses 1.25%(6) 2.00%(6) 2.00%(6)
Net investment income (loss) 0.02%(6) ( 0.73)%(6) (0.73)%(6)
Portfolio turnover 83%(5) 83%(5) 83%(5)
</TABLE>
- ------------------
(1) Distributions are made in accordance with the Prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(2) Computed using average shares outstanding.
(3) Includes reimbursement of operating expenses by investment adviser of $0.19,
$0.19 and $0.19, respectively.
(4) Maximum sales charges are not reflected in the total return calculation.
(5) Not annualized.
(6) Annualized.
Phoenix Equity Series Fund 43
<PAGE>
Financial Highlights (continued)
- -------------------------------------------------------------
Phoenix Growth and Income Fund
<TABLE>
<CAPTION>
Class A Class B Class C
-------------- -------------- --------------
From Inception From Inception From Inception
9/25/97 to 9/25/97 to 9/25/97 to
8/31/98 8/31/98 8/31/98
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
Income from investment operations(1)
Net investment income (loss) 0.06(2)(3) (0.02)(2)(3) (0.02)(2)(3)
Net realized and unrealized gain (loss) 0.48 0.48 0.49
----------- ----------- -----------
Total from investment operations 0.54 0.46 0.47
----------- ----------- -----------
Less distributions
Dividends from net investment income (0.04) (0.03) (0.03)
Dividends from net realized gains (0.03) (0.03) (0.03)
----------- ----------- -----------
Total distributions (0.07) (0.06) (0.06)
----------- ----------- -----------
Change in net asset value 0.47 0.40 0.41
----------- ----------- -----------
Net asset value, end of period $ 10.47 $ 10.40 $ 10.41
=========== =========== ===========
Total return(4) 5.39%(5) 4.59%(5) 4.67%(5)
Ratios/supplemental data:
Net assets, end of period (thousands) $76,399 $31,902 $11,108
Ratio to average net assets of:
Operating expenses 1.25%(6) 2.00%(6) 2.00%(6)
Net investment income (loss) 0.57%(6) (0.19)%(6) (0.18)%(6)
Portfolio turnover 106%(5) 106%(5) 106%(5)
</TABLE>
- ------------------
(1) Distributions are made in accordance with the Prospectus;
however, class level per share income from investment operations may vary
from anticipated results depending on the timing of the share purchases and
redemptions.
(2) Computed using average shares outstanding.
(3) Includes reimbursement of operating expenses by investment adviser of $0.07,
$0.07, and $0.07, respectively.
(4) Maximum sales charges are not reflected in the total return calculation.
(5) Not annualized.
(6) Annualized.
44 Phoenix Equity Series Fund
<PAGE>
Additional Information
- ---------------------------------------------------
Statement of Additional Information
The fund has filed a Statement of Additional Information about the fund,
dated December , 1998 with the Securities and Exchange Commission. The
Statement contains more detailed information about the fund. It is
incorporated into this prospectus by reference and is legally part of the
prospectus. You may obtain a free copy of the Statement:
> by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
> by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and
Exchange Commission:
> through its internet site (http://www.sec.gov),
> by visiting its Public Reference Room in Washington, DC or
> by writing to its Public Reference Section, Washington, DC 20549-6009
(a fee may be charged).
Information about the operation of the Public Reference Room may be
obtained by calling (800) SEC-0330.
Shareholder Reports
The fund semiannually mails to its shareholders detailed reports containing
information about the fund's investments. The fund's Annual Report contains
a detailed discussion of the market conditions and investment strategies
that significantly affected the fund's performance from September 1 through
August 31. You may request a free copy of the fund's Annual and Semiannual
Reports:
> by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
> by calling (800) 243-4361.
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunication Device (TTY): (800) 243-1926r
SEC File Nos. 333-29043 & 811-8245
Printed on recycled paper using soybean ink
Phoenix Equity Series Fund 45
<PAGE>
Phoenix Equity Planning Corporation --------------
PO Box 2200 Bulk Rate Mail
Enfield, CT 06083-2200 U.S. Postage
PAID
Springfield, MA
Permit No. 444
---------------
[LOGO] PHOENIX
INVESTMENT PARTNERS, LTD.
PXP ??? (12/98)
<PAGE>
PHOENIX CORE EQUITY FUND
PHOENIX GROWTH AND INCOME
101 Munson Street
Greenfield, MA 01301
Statement of Additional Information
December , 1998
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current prospectus of the
Phoenix Equity Series Fund (the "Trust"), dated December , 1998, and should be
read in conjunction with it. The Trust's prospectus may be obtained by calling
Phoenix Equity Planning Corporation ("Equity Planning") 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 TRUST ................................................................. 1
INVESTMENT OBJECTIVES AND POLICIES ........................................ 1
INVESTMENT RESTRICTIONS ................................................... 1
PERFORMANCE INFORMATION ................................................... 8
PORTFOLIO TRANSACTIONS AND BROKERAGE ...................................... 9
THE INVESTMENT ADVISERS ................................................... 10
NET ASSET VALUE ........................................................... 11
HOW TO BUY SHARES ......................................................... 11
ALTERNATIVE PURCHASE ARRANGEMENTS ......................................... 11
INVESTOR ACCOUNT SERVICES ................................................. 14
HOW TO REDEEM SHARES ...................................................... 15
DIVIDENDS, DISTRIBUTIONS AND TAXES ........................................ 16
TAX SHELTERED RETIREMENT PLANS ............................................ 17
THE DISTRIBUTOR ........................................................... 17
DISTRIBUTION PLANS ........................................................ 18
MANAGEMENT OF THE TRUST ................................................... 19
OTHER INFORMATION ......................................................... 25
APPENDIX .................................................................. 27
</TABLE>
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunications Device (TTY)-(800) 243-1926
PXP 2005B (12/98)
<PAGE>
THE TRUST
Phoenix Equity Series Fund (the "Trust") is a diversified open-end
management investment company which was organized under Massachusetts law in
1997 as a business trust. The Trust presently comprises two series: the Phoenix
Core Equity Fund and Phoenix Growth and Income Fund, each a "Fund" and
collectively the "Funds."
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund is deemed to be a fundamental policy
which may not be changed without the approval of the holders of a majority of
the outstanding shares of each Fund. Investment restrictions described in this
Statement of Additional Information are fundamental policies of each Fund and
may not be changed without the approval of each Fund's shareholders.
Notwithstanding the foregoing, certain investment restrictions affect more than
one series of the Trust and therefore modifications may require the consent of
other shareholders. There is no assurance that any Fund will meet its investment
objective.
INVESTMENT RESTRICTIONS
Fundamental Policies
The following investment restrictions constitute fundamental policies of
each Fund which may be changed only upon approval by the holders of a majority
of the outstanding shares of each Fund's shareholders. The Funds may not:
(1) With respect to 75% of their total assets, purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. government
or its agencies or instrumentalities) if, as a result, more than 5% of its
total assets would be invested in securities of that issuer.
(2) Purchase the securities of any one issuer if immediately after such
purchase a Fund would hold more than 10% of the outstanding voting
securities of that issuer.
(3) Borrow money except from a bank as a temporary measure to satisfy
redemption requests or for extraordinary or emergency purposes and then
only in an amount not exceeding 331/3% of the market value of a Fund's
total assets, so that immediately after any such borrowing asset coverage
of at least 300% for all such borrowings exists. To secure any such
borrowing, the Funds may not mortgage, pledge, or hypothecate in excess of
331/3% of the value of their total assets. The Funds will not purchase any
security while borrowings representing more than 5% of their total assets
are outstanding.
(4) Act as an underwriter of securities issued by others.
(5) Purchase real estate, real estate mortgage loans, interests in real estate
limited partnerships, or interests in oil, gas or mineral exploration or
development programs or leases, provided that this limitation shall not
prohibit (i) the purchase of U.S. Government securities and other debt
securities secured by real estate or interests therein; (ii) the purchase
of marketable securities issued by companies or investment trusts that deal
in real estate or interests therein; or (iii) purchase of marketable
securities issued by companies or other entities or investment vehicles
that engage in businesses relating to the development, exploration, mining,
processing or distributing of oil, gas, or minerals.
(6) Engage in any short-selling operations (except by selling futures
contracts).
(7) Make loans to others, except for the lending of portfolio securities
pursuant to guidelines established by the Board of Trustees or in
connection with purchase of debt securities in accordance with a Fund's
investment objective and policies.
(8) Purchase warrants, valued at the lower of cost or market, in excess of 5%
of the value of a Fund's net assets. Included within that amount, but not
to exceed 2% of the value of a Fund's net assets, may be warrants which are
not listed on the New York or American Stock Exchanges. Warrants acquired
by the Funds at any time in units or attached to securities are not subject
to this restriction.
(9) Purchase securities on margin, except for such short-term credits as may be
necessary for the clearance of transactions, provided that the Funds may
make initial and variation margin payments in connection with purchases or
sales of futures contracts or options on futures contracts.
(10) Issue or sell any class of senior security as defined in the Investment
Company Act of 1940 except for notes or other evidences of indebtedness
permitted under investment restriction (3) and except to the extent that
notes evidencing temporary borrowings or the purchase of securities on a
when-issued or delayed delivery basis might be deemed such.
(11) Except in connection with a merger, consolidation, acquisition, or
reorganization, invest in the securities of other investment companies,
including investment companies advised by the Adviser, or any affiliates,
if, immediately after such purchase or acquisition, more than 10% of the
value of a Fund's total assets would be invested in such securities in the
aggregate, or more than 5% in any one such security.
1
<PAGE>
(12) Purchase or retain securities of any issuer if, to the knowledge of the
Funds' management, those officers and Trustees of the Funds and of its
adviser, who each own beneficially more than 0.50% of the outstanding
securities of such issuer, together own beneficially more than 5% of such
securities.
(13) Invest in securities of an issuer which, together with any predecessor, has
been in operation for less than three years if, as a result, more than 5%
of the total assets of a Fund would then be invested in such securities.
(14) Invest in the securities of any one issuer if, immediately after such
purchase, 25% or more of a Fund's total assets would be invested in the
securities of issuers having their principal business activities in the
same industry.
(15) Invest in securities which are not readily marketable or the disposition of
which is restricted under federal securities laws (collectively "illiquid
securities") if, as a result, more than 5% of a Fund's net assets would be
invested in illiquid securities.
If a percentage restriction on investment or utilization of assets as set
forth is adhered to at the time an investment is made, a later change in the
percentage resulting from a change in the values or costs of the Funds' assets
will not be considered a violation of the restriction with the exception of the
Fund's borrowing policy as described in restriction (3), above.
Investment Techniques
The Funds may utilize the following practices or techniques in pursuing its
investment objectives.
U.S. Government Securities. For liquidity purposes, each Fund may invest
in U.S. government securities, including bills, notes and bonds issued by the
U.S. Treasury and securities issued or guaranteed by agencies or
instrumentalities of the U.S. government. Some U.S. government securities are
supported by the direct full faith and credit pledge of the U.S. government;
others are supported by the right of the issuer to borrow from the U.S.
Treasury; others such as securities issued by the Federal National Mortgage
Association, are supported by the discretionary authority of the U.S.
government to purchase the agencies' obligations; and others are supported only
by the credit of the issuing or guaranteeing instrumentality. There is no
assurance that the U.S. government will provide financial support to an
instrumentality it sponsors when it is not obligated by law to do so.
Repurchase Agreements. Repurchase Agreements are agreements by which a Fund
purchases a security and obtains a simultaneous commitment from the seller (a
member bank of the Federal Reserve System or, to the extent permitted by the
Investment Company Act of 1940, a recognized securities dealer) that the seller
will repurchase the security at an agreed upon price and date. The resale price
is in excess of the purchase price and reflects an agreed upon market rate
unrelated to the coupon rate on the purchased security.
A repurchase transaction is usually accomplished either by crediting the
amount of securities purchased to the account of the custodian of the Fund
maintained in a central depository of book-entry system or by physical delivery
of the securities to the Fund's custodian in return for delivery of the purchase
price to the seller. Repurchase transactions are intended to be short-term
transactions with the seller repurchasing the securities, usually within seven
days.
Even though repurchase transactions usually do not impose market risks on
the purchasing Fund, if the seller of the repurchase agreement defaults and does
not repurchase the underlying securities, the Fund might incur a loss if the
value of the underlying securities declines, and disposition costs may be
incurred in connection with liquidating the underlying securities. In addition,
if bankruptcy proceedings are commenced regarding the seller, realization upon
the underlying securities may be delayed or limited, and a loss may be incurred
if the underlying securities decline in value.
Securities and Index Options. The Growth and Income Fund may write covered
call options and purchase call and put options. Options and the related risks
are summarized below.
Writing and Purchasing Options. Call options written by the Growth and
Income Fund normally will have expiration dates between three and nine months
from the date written. During the option period the Fund may be assigned an
exercise notice by the broker-dealer through which the call option was sold,
requiring the Fund to deliver the underlying security (or cash in the case of
securities index calls) against payment of the exercise price. This obligation
is terminated upon the expiration of the option period or at such earlier time
as the Fund effects a closing purchase transaction. A closing purchase
transaction cannot be effected with respect to an option once the Fund has
received an exercise notice.
The exercise price of a call option written by the Fund may be below, equal
to or above the current market value of the underlying security or securities
index at the time the option is written.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total dollar
value per contract of each point between the exercise price of the option and
the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices, Computer/Business
Equipment Index, Major Market Index, Amex Market Value Index, Computer
Technology Index, Oil
2
<PAGE>
and Gas Index, NYSE Options Index, Gaming/Hotel Index, Telephone Index,
Transportation Index, Technology Index, and Gold/ Silver Index. The Fund may
write call options and purchase call and put options on any other indices traded
on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a
profit on an outstanding call option written by the Fund to prevent an
underlying security from being called, or to enable the Fund to write another
call option with either a different exercise price or expiration date or both.
The Fund may realize a net gain or loss from a closing purchase transaction
depending upon whether the amount of the premium received on the call option is
more or less than the cost of effecting the closing purchase transaction. If a
call option written by the Fund expires unexercised, the Fund will realize a
gain in the amount of the premium on the option less the commission paid.
The option activities of the Fund may increase its portfolio turnover rate
and the amount of brokerage commissions paid. The Fund will pay a commission
each time it purchases or sells a security in connection with the exercise of an
option. These commissions may be higher than those which would apply to
purchases and sales of securities directly.
Limitations on Options. The Growth and Income Fund may write call options
only if they are covered and if they remain covered so long as the Fund is
obligated as a writer. If the Fund writes a call option on an individual
security, the Fund will own the underlying security at all times during the
option period. The Fund will write call options on indices only to hedge in an
economically appropriate way portfolio securities which are not otherwise hedged
with options or financial futures contracts. Call options on securities indices
written by the Fund will be "covered" by identifying the specific portfolio
securities being hedged.
To secure the obligation to deliver the underlying security, the writer of
a covered call option on an individual security is required to deposit the
underlying security or other assets in escrow with the broker in accordance with
clearing corporation and exchange rules. In the case of an index call option
written by the Fund, the Fund will be required to deposit qualified securities.
A "qualified security" is a security against which the Fund has not written a
call option and which has not been hedged by the Fund by the sale of a financial
futures contract. If at the close of business on any day the market value of the
qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts, the Fund will deposit any asset,
including equity securities and non-investment grade debt so long as the asset
is liquid, unencumbered and marked to market daily, equal in value to the
difference. In addition, when the Fund writes a call on an index which is
"in-the-money" at the time the call is written, the Fund will pledge with its
custodian bank any asset, including equity securities and non-investment grade
debt so long as the asset is liquid, unencumbered and marked to market daily,
equal in value to the amount by which the call is "in-the-money" times the
multiplier times the number of contracts. Any amount pledged may be applied to
the Fund's obligation to pledge additional amounts in the event that the market
value of the qualified securities falls below 100% of the current index value
times the multiplier times the number of contracts.
The Fund may sell a call option or a put option which it has previously
purchased prior to the purchase (in the case of a call) or the sale (in the case
of a put) of the underlying security. Any such sale of a call option or a put
option would result in a net gain or loss, depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid.
The Growth and Income Fund will engage in options provided that such
obligations represent no more than 20% of the Fund's net assets. Under the
Commodity Exchange Act, a Fund may enter into futures and options transactions
for hedging purposes without regard to the percentage of assets committed to
initial margin and option premiums and for other than hedging purposes provided
that assets committed to initial margin and option premiums do not exceed 5% of
the Fund's net assets. To the extent required by law, the Fund will set aside
cash and appropriate liquid assets in a pledged account to cover its obligations
related to futures contracts and options. In connection with the Fund qualifying
as a regulated investment company under the Internal Revenue Code, other
restrictions on the Fund's ability to enter into option transactions may apply
from time to time. See "Dividends, Distributions and Taxes."
Risks Relating to Options. During the option period, the writer of a call
option has, in return for the premium received on the option, given up the
opportunity for capital appreciation above the exercise price should the market
price of the underlying security increase, but has retained the risk of loss
should the price of the underlying security decline. The writer has no control
over the time when it may be required to fulfill its obligation as a writer of
the option.
The risk of purchasing a call option or a put option is that the Fund may
lose the premium it paid plus transaction costs. If the Fund does not exercise
the option and is unable to close out the position prior to expiration of the
option, it will lose its entire investment.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although the Fund will write
and purchase options only when the Adviser believes that a liquid secondary
market will exist for options of the same series, there can be no assurance that
a liquid secondary market will exist for a particular option at a particular
time and that the Fund, if it so desires, can close out its position by
effecting a closing transaction. If the writer of a covered call option is
unable to effect a closing purchase transaction, it cannot sell the underlying
security until the option expires or the option is exercised. Accordingly, a
covered call writer may not be able to sell the underlying security at a time
when it might otherwise be advantageous to do so.
3
<PAGE>
Possible reasons for the absence of a liquid secondary market on an
exchange include: (i) insufficient trading interest in certain options; (ii)
restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities; (iv) inadequacy of the facilities of
an exchange or the clearing corporation to handle trading volume; and (v) a
decision by one or more exchanges to discontinue the trading of options or
impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single investor
acting alone or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written on one or more
accounts or through one or more brokers). An exchange may order the liquidation
of positions found to be in violation of these limits and it may impose other
sanctions or restrictions.
Risks of Options on Indices. Because the value of an index option depends
upon movements in the level of the index rather than movements in the price of a
particular security, whether the Fund will realize a gain or loss on the
purchase or sale of an option on an index depends upon movements in the level of
prices in the market generally or in an industry or market segment rather than
upon movements in the price of an individual security. Accordingly, successful
use by the Fund of options on indices will be subject to the Adviser's ability
to predict correctly movements in the direction of the market generally or in
the direction of a particular industry. This requires different skills and
techniques than predicting changes in the prices of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
securities included in the index. If this occurred, the Fund would not be able
to close out options which it had written or purchased and, if restrictions on
exercise were imposed, might be unable to exercise an option it purchased, which
would result in substantial losses to the Fund. However, it is the Trust's
policy to write or purchase options only on indices which include a sufficient
number of securities so that the likelihood of a trading halt in the index is
minimized.
Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance and,
unlike call writing on portfolio securities, cannot provide in advance for its
potential settlement obligation by holding the underlying securities.
Consequently, the Fund will write call options on indices only subject to the
limitations described above.
Price movements in securities in the Fund's portfolio will not correlate
perfectly with movements in the level of the index and, therefore, the Fund
bears the risk that the price of the securities held by the Fund may not
increase as much as the level of the index. In this event, the Fund would bear a
loss on the call which would not be completely offset by movements in the prices
of the Fund's portfolio securities. It is also possible that the index may rise
when the value of the Fund's portfolio securities does not. If this occurred,
the Fund would experience a loss on the call which would not be offset by an
increase in the value of its portfolio and might also experience a loss in the
market value of portfolio securities.
Unless the Fund has other liquid assets which are sufficient to satisfy the
exercise of a call on an index, the Fund will be required to liquidate portfolio
securities in order to satisfy the exercise. Because an exercise must be settled
within hours after receiving the notice of exercise, if the Fund fails to
anticipate an exercise, to the extent permissible, it may have to borrow from a
bank pending settlement of the sale of securities in its portfolio and pay
interest on such borrowing.
When the Fund has written a call on an index, there is also a risk that the
market may decline between the time the Fund has the call exercised against it,
at a price which is fixed as of the closing level of the index on the date of
exercise, and the time the Fund is able to sell securities in its portfolio. As
with options on portfolio securities, the Fund will not learn that a call has
been exercised until the day following the exercise date but, unlike a call on a
portfolio security where the Fund would be able to deliver the underlying
security in settlement, the Fund may have to sell part of its portfolio
securities in order to make settlement in cash, and the price of such securities
might decline before they could be sold.
If the Fund exercises a put option on an index which it has purchased
before final determination of the closing index value for that day, it runs the
risk that the level of the underlying index may change before closing. If this
change causes the exercised option to fall "out-of-the-money" the Fund will be
required to pay the difference between the closing index value and the exercise
price of the option (multiplied by the applicable multiplier) to the assigned
writer. Although the Fund may be able to minimize this risk by withholding
exercise instructions until just before the daily cutoff time or by selling
rather than exercising an option when the index level is close to the exercise
price, it may not be possible to eliminate this risk entirely because the cutoff
times for index options may be earlier than those fixed for other types of
options and may occur before definitive closing index values are announced.
Financial Futures Contracts and Related Options. Each Fund may enter into
financial futures contracts and the Growth and Income Fund may also invest in
related options. Financial Futures and related options may be used to hedge
against changes in the market value of a Fund's portfolio securities or
securities which a Fund intends to purchase. Hedging is accomplished when an
investor takes a position in the futures market opposite to his cash market
position. There are two types of hedges--long (or buying) and short (or selling)
hedges. Historically, prices in the futures market have tended to move in
concert with cash market
4
<PAGE>
prices, and prices in the futures market have maintained a fairly predictable
relationship to prices in the cash market. Thus, a decline in the market value
of securities in the Fund's portfolio 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 the Fund
may wish to purchase in the future by purchasing futures contracts.
Each Fund may purchase or sell any financial futures contracts which are
traded on a recognized exchange or board of trade. Financial futures contracts
consist of interest rate futures contracts and securities index futures
contracts. A public market presently exists in interest rate futures contracts
covering long-term U.S. Treasury bonds, U.S. Treasury notes, three-month U.S.
Treasury bills and GNMA certificates. Securities index futures contracts are
currently traded with respect to the Standard & Poor's 500 Composite Stock Price
Index and such other broad-based stock market indices as the New York Stock
Exchange Composite Stock Index and the Value Line Composite Stock Price Index. A
clearing corporation associated with the exchange or board of trade on which a
financial futures contract trades assumes responsibility for the completion of
transactions and also guarantees that open futures contracts will be performed.
In contrast to the situation when a Fund purchases or sells a security, no
security is delivered or received by the Fund upon the purchase or sale of a
financial futures contract. Initially, the Fund will be required to deposit in a
pledged account with its custodian bank any asset, including equity securities
and non-investment grade debt so long as the asset is liquid, unencumbered and
marked to market daily. This amount is known as initial margin and is in the
nature of a performance bond or good faith deposit on the contract. The current
initial margin deposit required per contract is approximately 5% of the contract
amount. Brokers may establish deposit requirements higher than this minimum.
Subsequent payments, called variation margin, will be made to and from the
account on a daily basis as the price of the futures contract fluctuates. This
process is known as marking to market.
The writer of an option on a futures contract is required to deposit margin
pursuant to requirements similar to those applicable to futures contracts. Upon
exercise of an option on a futures contract, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Although financial futures contracts by their terms call for actual
delivery or acceptance of securities, in most cases the contracts are closed out
before the settlement date without the making or taking of delivery. Closing out
is accomplished by effecting an offsetting transaction. A futures contract sale
is closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss.
Each Fund will pay commissions on financial futures contracts and related
options transactions. These commissions may be higher than those which would
apply to purchases and sales of securities directly.
Limitations on Futures Contracts and Related Options. Each Fund may enter
into futures contracts and the Growth and Income Fund may also enter into
options on futures contracts, provided that such obligations represent no more
than 20% of the Fund's net assets. Under the Commodity Exchange Act, a Fund may
enter into futures and options transactions for hedging purposes without regard
to the percentage of assets committed to initial margin and option premiums and
for other than hedging purposes provided that assets committed to initial margin
and option premiums do not exceed 5% of the Fund's net assets. To the extent
required by law, each Fund will set aside cash and appropriate liquid assets in
a pledged account to cover its obligations related to futures contracts and
options.
The extent to which the Funds may enter into financial futures contracts
and related options also may be limited by the requirements of the Internal
Revenue Code for qualifications as a regulated investment company. See
"Dividends, Distributions and Taxes."
Risks Relating to Futures Contracts and Related Options. Positions in
futures contracts and related options may be closed out only on an exchange
which provides a secondary market for such contracts or options. Each Fund will
enter into an option or futures position only if there appears to be a liquid
secondary market. However, there can be no assurance that a liquid secondary
market will exist for any particular option or futures contract at any specific
time. Thus, it may not be possible to close out a futures or related option
position. In the case of a futures position, in the event of adverse price
movements each Fund would continue to be required to make daily margin payments.
In this situation, if each Fund has insufficient cash to meet daily margin
requirements it may have to sell portfolio securities at a time when it may be
disadvantageous to do so. In addition, each Fund 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 Fund's ability to hedge its portfolio effectively.
There are several risks in connection with the use of futures contracts as
a hedging device. While hedging can provide protection against an adverse
movement in market prices, it can also preclude a hedger's opportunity to
benefit from a favorable market
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movement. In addition, investing in futures contracts and options on futures
contracts will cause the Fund to incur additional brokerage commissions and may
cause an increase in the Fund's portfolio turnover rate.
The successful use of futures contracts and related options also depends on
the ability of the Adviser to forecast correctly the direction and extent of
market movements within a given time frame. To the extent market prices remain
stable during the period a futures contract or option is held by a Fund or such
prices move in a direction opposite to that anticipated, the Fund may realize a
potential unlimited loss on the hedging transaction which is not offset by an
increase in the value of its portfolio securities. As a result, a Fund's return
for the period may be less than if it had not engaged in the hedging
transaction.
Utilization of futures contracts by a Fund involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in the
price of the securities which are being hedged. If the price of the futures
contract moves more or less than the price of the securities being hedged, the
Fund will experience a gain or loss which will not be completely offset by
movements in the price of the securities. It is possible that, where the Fund
has sold futures contracts to hedge its portfolio against decline in the market,
the market may advance and the value of securities held in the Fund's portfolio
may decline. If this occurred, the Fund would lose 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 before the Fund 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 Fund 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 Fund 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 also elect to close out their contracts through off-setting
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 rather than
to engage in closing transactions due to the resultant reduction in the
liquidity of the futures market. In addition, due to the fact that, from the
point of view of speculators, the deposit requirements in the futures markets
are less onerous than margin requirements in the cash market, increased
participation by speculators in the futures market could cause temporary price
distortions. Due to the possibility of price distortions in the futures market
and because of the imperfect correlation between movements in the prices of
securities and movements in the prices of futures contracts, a correct forecast
of market trends may still not result in a successful hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put
or call options on futures contracts involves less potential risk for the Fund
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to the Fund while the
purchase or sale of the futures contract would not have resulted in a loss, such
as when there is no movement in the price of the underlying securities.
Leverage. Each Fund may borrow for temporary, extraordinary or emergency
purposes. Each Fund will borrow only from banks, and only if immediately after
such borrowing the value of the assets of the Fund (including the amount
borrowed) less its liabilities (not including any borrowings) is at least three
times the amount of funds borrowed. The effect of this provision is to permit
the Fund to borrow up to 331/3% of the total assets (not including any
borrowings) of the Fund. If, due to market fluctuations or other reasons, the
value of the Fund's assets computed as provided above becomes at any time less
than three times the amount of the borrowings, the Fund, within three business
days, is required to reduce bank debt to the extent necessary to meet the
required 300% asset coverage.
Interest on money borrowed will be an expense of the Fund with respect to
which the borrowing has been made. Because such expense would not otherwise be
incurred, the net investment income of the Fund is not expected to be as high as
it otherwise would be during periods when borrowings for investment purposes are
substantial. Bank borrowings must be obtained on an unsecured basis. Any such
borrowing must also be made subject to an agreement by the lender that any
recourse is limited to the assets of the Fund with respect to which the
borrowing has been made.
Foreign Securities. Each Fund may purchase foreign securities, including
those issued by foreign branches of U.S. banks. In any event, such investments
in foreign securities will be limited to 10% of the total assets of the Core
Equity Fund. The Growth and Income Fund will not invest more than 20% of its
total assets in foreign securities; however, under normal circumstances, no more
than 10% of its total assets will be invested in foreign securities. Investments
in foreign securities, particularly those of non-governmental issuers, involve
considerations which are not ordinarily associated with investing in domestic
issues. These considerations include changes in currency rates, currency
exchange control regulations, the possibility of expropriation, the
unavailability of financial information, the difficulty of interpreting
financial information prepared under foreign securities markets, the impact of
political, social or diplomatic developments, difficulties in invoking legal
process abroad and the difficulty of assessing economic trends in foreign
countries.
The Funds 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 Funds' foreign securities transactions. The use of a
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foreign custodian invokes considerations which are not ordinarily associated
with domestic custodians. These considerations include the possibility of
expropriations, restricted access to books and records of the foreign custodian,
inability to recover assets that are lost while under the control of the foreign
custodian, and the impact of political, social or diplomatic developments.
Although the Funds may buy securities of foreign issuers in foreign
markets, most of their foreign securities investments are made by purchasing
American Depositary Receipts (ADRs), "ordinary shares," or "New York Shares."
The Funds may invest in foreign-currency-denominated securities that trade in
foreign markets if the Adviser believes that such investments will be
advantageous to the Funds.
ADRs are dollar-denominated receipts representing interests in the
securities of a foreign issuer. They are issued by U.S. banks and traded on
exchanges or over the counter in the United States. Ordinary shares are shares
of foreign issuers that are traded abroad and on a U.S. exchange. New York
shares are shares that a foreign issuer has allocated for trading in the United
States. ADRs, ordinary shares, and New York shares all may be purchased with and
sold for U.S. dollars, which protects the Fund from the foreign settlement risks
described below.
Lending Portfolio Securities. In order to increase its return on
investments, each Fund may make loans of its portfolio securities, as long as
the market value of the loaned securities does not exceed one-third of the value
of the Fund's total assets. Loans of portfolio securities will always be fully
collateralized by cash or securities issued or guaranteed by the U.S. Government
and marked to market daily, at no less than 100% of the market value of the
loaned securities (as marked to market daily) and made only to borrowers
considered by the Adviser to be creditworthy. Lending portfolio securities
involves a risk of delay in the recovery of the loaned securities and possibly
the loss of the collateral if the borrower fails financially.
Forward Foreign Currency Exchange Contracts. 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 ("Term") 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.
Each Fund does not intend to enter into such forward contracts if it would
have more than 5% of the value of its net assets committed to the initial margin
and option premiums on such contracts on a regular or continuous basis. A Fund
will not 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 Adviser believes that it is important to have the
flexibility to enter into such forward contracts when it determines that to do
so is in the best interests of the Fund. The Funds' custodian bank will pledge
any asset, including equity securities and non-investment grade debt so long as
the asset is liquid, unencumbered and marked to market daily, in an amount not
less than the value of the Fund's total assets committed to forward foreign
currency exchange contracts entered into for the purchase of a foreign currency.
If the value of the securities pledged declines, additional cash or securities
will be added so that the pledged amount is not less than the amount of the
Fund's commitments with respect to such contracts. Generally, the Fund does not
enter into forward contracts with a term 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 the Fund against an adverse movement 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 Fund 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 the Fund 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 Fund 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 Fund may use foreign currency
futures contracts and options on such futures contracts. Through the purchase or
sale of such contracts, a Fund 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.
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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 Fund will maintain in a pledged account any asset,
including equity securities and non-investment grade debt so long as the asset
is liquid, unencumbered and marked to market daily, equal to the value of such
contracts.
Each Fund may enter into futures contracts and the Growth and Income Fund
may also engage in options or options on futures contracts, provided that such
obligations represent no more than 20% of a Fund's net assets. Under the
Commodity Exchange Act, a Fund may enter into futures and options transactions
for hedging purposes without regard to the percentage of assets committed to
initial margin and option premiums and for other than hedging purposes provided
that assets committed to initial margin and option premiums do not exceed 5% of
a Fund's net assets. To the extent required by law, the Funds will set aside
cash and appropriate liquid assets in a pledged account to cover its obligations
related to futures contracts and options.
Derivative Investments. In order to hedge various portfolio positions,
including to hedge against price movements in markets in which the Funds
anticipate increasing their exposure, the Funds may invest in certain
instruments which may be characterized as derivative investments. These
investments include various types of interest rate transactions, options and
futures. Such investments also may consist of indexed securities. Other of such
investments have no express quantitative limitations, although they may be made
solely for hedging purposes, not for speculation, and may in some cases be
limited as to the type of counter-party permitted. Interest rate transactions
involve the risk of an imperfect correlation between the index used in the
hedging transactions and that pertaining to the securities which are the subject
of such transactions. Similarly, utilization of options and futures transactions
involves the risk of imperfect correlation in movements in the price of options
and futures and movements in the price of the securities or interest rates which
are the subject of the hedge. Investments in indexed securities, including
inverse securities, subject the Funds to the risks associated with changes in
the particular indices, which may include reduced or eliminated interest
payments and losses of invested principal.
PERFORMANCE INFORMATION
The Funds may, from time to time, include total return in advertisements,
sales literature or reports to shareholders or prospective investors.
Performance information in advertisements and sales literature may be expressed
as yield of a class or Fund and as total return of any Class or Fund.
Standardized quotations of average annual total return for each Class of
Shares of a Fund will be expressed in terms of the average annual compounded
rate of return for a hypothetical investment in either Class A, Class B or Class
C Shares of a Fund over periods of 1, 5 and 10 years or up to the life of the
class of shares of a Fund, 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 each 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 and C Shares, and assume that all dividends
and distributions are reinvested when paid.
The Funds may from time to time include in advertisements containing total
return the ranking of those performance figures relative to such figures for
groups of mutual funds having similar investment objectives as categorized by
ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc.
Additionally, the Funds may compare performance results to other investment or
savings vehicles (such as certificates of deposit) and may refer to results
published in various publications such as Changing Times, Forbes, Fortune,
Money, Barrons, Business Week, Investor's Daily, Stanger's Mutual Fund Monitor,
The Stanger Register, Stanger's Investment Adviser, The Wall Street Journal, The
New York Times, Consumer Reports, Registered Representative, Financial Planning,
Financial Services Weekly, Financial World, U.S. News and World Report, Standard
& Poor's The Outlook, and Personal Investor. The Funds may from time to time
illustrate the benefits of tax deferral by comparing taxable investments to
investments made through tax-deferred retirement plans. The total return may
also be used to compare the performance of the Funds against certain widely
acknowledged outside standards or indices for stock and bond market performance,
such as the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"),
Russell 1000 Value Index, Russell 2000 Value Index, Dow Jones Industrial
Average, Europe Australia Far East Index (EAFE), Consumer's Price Index, Lehman
Brothers Corporate Index and Lehman Brothers T-Bond Index.
Advertisements, sales literature and other communications may contain
information about the Funds and Adviser's current investment strategies and
management style. Current strategies and style may change to allow the Funds to
respond quickly to changing market and economic conditions. From time to time
the Funds may include specific portfolio holdings or industries in such
communications. To illustrate components of overall performance, the Funds may
separate its cumulative and average annual returns into income and capital gains
components.
Phoenix Core Equity Fund's average annual total return since inception
September 25, 1997 through August 31, 1998 for Class A Shares was %, for Class B
Shares was % and for Class C Shares was %. Phoenix Growth and Income Fund's
average annual total return since inception September 25, 1997 through August
31, 1998 for Class A Shares was %, for Class B Shares
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was % and for Class C Shares was %. Performance information reflects only the
performance of a hypothetical investment in each class during the particular
time period on which the calculations are based. Performance information should
be considered in light of each Fund's investment objectives and policies,
characteristics and quality of the portfolio, and the market condition during
the given time period, and should not be considered as a representation of what
may be achieved in the future.
The Funds may also compute aggregate cumulative total return for specified
periods based on a hypothetical Class A, Class B or Class C account with an
assumed initial investment of $10,000. The aggregate total return is determined
by dividing the net asset value of this account at the end of the specified
period by the value of the initial investment and is expressed as a percentage.
Calculation of aggregate total return reflects payment of the Class A Shares'
maximum sales charge of 4.75% and assumes reinvestment of all income dividends
and capital gain distributions during the period.
The Funds also may quote annual, average annual and annualized total return
and aggregate total return performance data, for each class of shares of the
Funds, 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
Funds. It is the practice of the Adviser to seek the best prices and 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 Funds 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 Funds 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 Funds benefit with a securities industry comprised of many and
diverse firms and that the long-term interest of shareholders of the Funds is
best served by 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 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
Funds. 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. In 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 Funds. 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 Funds and shareholders.
A high rate of portfolio turnover involves a correspondingly higher amount
of brokerage commissions and other costs which must be borne directly by the
Funds and indirectly by shareholders.
The Funds have adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty
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to seek best execution (which shall include the duty to seek best price) for the
Funds. No advisory account of the Adviser is to be favored over any other
account and each account that participates in an aggregated order is expected to
participate at the average share price for all transactions of the Adviser in
that security on a given business day, with all transaction costs shared pro
rata based on the Funds' participation in the transaction. If the aggregated
order is filled in its entirety, it shall be allocated among the Adviser's
accounts in accordance with the allocation order, and if the order is partially
filled, it shall be allocated pro rata based on the allocation order.
Notwithstanding the foregoing, the order may be allocated on a basis different
from that specified in the allocation order if all accounts of the Adviser whose
orders are allocated receive fair and equitable treatment and the reason for
such different allocation is explained in writing and is approved in writing by
the Adviser's compliance officer as soon as practicable after the opening of the
markets on the trading day following the day on which the order is executed. If
an aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.
During the fiscal year ended August 31, 1998, brokerage commissions paid by
the Funds totaled $ . Brokerage commissions of $ were paid on
portfolio transactions aggregating $ and executed by brokers who provided
research and other statistical and factual information.
THE INVESTMENT ADVISERS
The offices of Phoenix Investment Counsel, Inc., ("PIC") are located at 56
Prospect Street, Hartford, Connecticut 06115-0480. PIC was organized in 1932 as
John P. Chase, Inc. The offices of Duff & Phelps Investment Management Co., Inc.
("DPIM") are located at 55 East Monroe Street, Suite 3600, Chicago, Illinois
60603. All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("Equity Planning"), a subsidiary of Phoenix Investment Partners,
Ltd. DPIM is also a subsidiary of Phoenix Investment Partners, Ltd. (previously
known as Phoenix Duff & Phelps Corporation). A majority of the outstanding
shares of Phoenix Investment Partners, Ltd. are owned by PM Holdings, Inc.
("Holdings"), a wholly-owned subsidiary of Phoenix Home Life Mutual Insurance
Company ("Phoenix Home Life") of Hartford, Connecticut. Phoenix Home Life is in
the business of writing ordinary and group life and health insurance and
annuities. Equity Planning, a mutual fund distributor, acts as the national
distributor of the Trust's shares and as Financial Agent of the Trust. The
principal office of Phoenix Home Life is located at One American Row, Hartford,
Connecticut, 06115. The principal office of Equity Planning is located at 100
Bright Meadow Boulevard, Enfield, Connecticut, 06082.
Philip R. McLoughlin, a director and officer of the Trust, is also a
director of PIC. Michael E. Haylon, an officer of the Trust, is also a director
and officer of PIC. Christian C. Bertelsen, Jeffrey Bohne, William E. Keen, III
and William R. Moyer, officers of the Trust, are officers of PIC.
The Advisers provide certain services and facilities required to carry on
the day-to-day operations of the Funds (for which each receives management fees)
other than the costs of printing and mailing proxy materials, reports and
notices to shareholders; legal, auditing and accounting services; regulatory
filing fees and expenses of printing the Funds' registration statement (but the
Distributor purchases such copies of the Funds' prospectuses and reports and
communications to shareholders as it may require for sales purposes); insurance
expense; association membership dues; brokerage fees; and taxes.
All costs and expenses (other than those specifically referred to as being
borne by the Advisers) incurred in the operation of the Funds are borne by the
Funds. Each Fund pays expenses incurred in its own operation and also pays a
portion of the Trust's general administration expenses allocated on the basis of
the asset size of the respective Fund, except where an allocation using an
alternative method can be more fairly made. Such expenses include, but shall not
be limited to, all expenses incurred in the operation of the Funds and any
public offering of its shares, including, among others, interest, taxes,
brokerage fees and commissions, fees of Trustees who are not employees of the
Advisers or any of their affiliates, expenses of Trustees' and shareholders'
meetings, including the cost of printing and mailing proxies, expenses of
insurance premiums for fidelity and other coverage, expenses of repurchase and
redemption of shares, expenses of issue and sale of shares (to the extent not
borne by Equity Planning under its agreement with the Funds), association
membership dues, charges of custodians, transfer agents, dividend disbursing
agents and financial agents, bookkeeping, auditing, and legal expenses. The
Funds will also pay the fees and bear the expense of registering and maintaining
the registration of the Trust and its shares with the Securities and Exchange
Commission and registering or qualifying its shares under state or other
securities laws and the expense of preparing and mailing prospectuses and
reports to shareholders.
The investment advisory agreements provide that the Advisers shall not be
liable to the Funds or to any shareholder of the Funds for any error of judgment
or mistake of law or for any loss suffered by the Funds or by any shareholder of
the Funds in connection with the matters to which the investment advisory
agreements relate, except a loss resulting from willful misfeasance, bad faith,
gross negligence or reckless disregard on the part of the Advisers in the
performance of their duties thereunder.
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As full compensation for the services and facilities furnished to the
Funds, the Advisers are entitled to a fee, payable monthly, as described in the
prospectus. Total management fees for the fiscal year ended August 31, 1998
amounted to $ . There is no assurance that the Funds will reach net asset
levels high enough to realize reductions in the rates of the advisory fees. Any
reduction in the rate of the advisory fee on each Fund will be in proportion to
the averages of the aggregate daily net asset values for each class of shares
for the period for which the fee had been paid.
The advisory agreements continue in force from year to year for each Fund,
provided that, with respect to each Fund, the agreement must be approved at
least annually by the Trustees or by vote of a majority of the outstanding
voting securities of each Fund. In addition, and in either event, the terms of
the agreement and any renewal thereof must be approved by the vote of a majority
of the Trustees who are not parties to the agreement or interested persons (as
that term is defined in the Investment Company Act of 1940) of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
The agreements will terminate automatically if assigned and may be terminated at
any time, without payment of any penalty, either by the Trust or by the Adviser,
on sixty (60) days written notice.
NET ASSET VALUE
The net asset value per share of each Fund is determined as of the close of
trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Funds do not price securities on
weekends or United States national holidays, the net asset value of a Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Funds. The net asset value per share of a Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the Fund.
Assets and liabilities are determined in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission. The total liability allocated to a class, plus that class'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
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for any Fund which invests in
foreign securities contemporaneously with the determination of the prices of the
majority of the portfolio securities of such Fund. All assets and liabilities
initially expressed in foreign currency values will be converted into United
States dollar values at the mean between the bid and ask quotations of such
currencies against United States dollars as last quoted by any recognized
dealer. If an event were to occur after the value of an investment was so
established but before the net asset value per share was determined, which was
likely to materially change the net asset value, then the instrument would be
valued using fair value considerations by the Trustees or their delegates. If at
any time a Fund has investments where market quotations are not readily
available, such investments are valued at the fair value thereof as determined
in good faith by the Trustees although the actual calculations may be made by
persons acting pursuant to the direction of the Trustees.
HOW TO BUY SHARES
The 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 Distributor, or pursuant to the
Systematic Exchange privilege or for an individual retirement account (IRA). In
addition, there are no subsequent investment minimum amounts in connection with
the reinvestment of dividend or capital gain distributions. 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.
The Funds have authorized one or more brokers to accept on their behalf
purchase and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Funds' behalf.
The Funds will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers 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 either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the "deferred
sales charge alternative"). Orders received by dealers prior to the close of
trading on the New York Stock Exchange are confirmed at the offering price
effective at that time, provided the order is received by the Distributor prior
to its close of business.
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The alternative purchase arrangements permit an investor to choose the
method of purchasing shares that is more 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 Funds, and other circumstances. Investors should
consider whether, during the anticipated life of their investment in the Trust,
the accumulated continuing distribution plan fees and contingent deferred sales
charges on Class B or C Shares would be less than the initial sales charge and
accumulated distribution plan fees on Class A Shares purchased at the same time.
Dividends paid by the Funds, if any, with respect to each Class of Shares
will be calculated in the same manner at the same time on the same day, except
that fees such as higher distribution plan fees and any incremental transfer
agency costs relating to each Class of Shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
Class A Shares
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed. Class A
Shares are subject to an ongoing distribution services fee at an annual rate of
up to 0.25% of the Fund's aggregate average daily net assets attributable to the
Class A Shares. In addition, certain purchases of Class A Shares qualify for
reduced initial sales charges. See the Funds' current Prospectus for additional
information.
Class B Shares
Class B Shares do not incur a sales charge when they are purchased, but
they are subject to a sales charge if they are redeemed within five years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions. See the Funds' current Prospectus for additional
information.
Class B Shares are subject to an ongoing distribution services fee at an
annual rate of up to 1.00% of the Fund's aggregate average daily net assets
attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment is
made. The higher ongoing distribution plan fees paid by Class B Shares will
cause such shares to have a higher expense ratio and to pay lower dividends, to
the extent any dividends are paid, than those related to Class A Shares. Class B
Shares will automatically convert to Class A Shares eight years after the end of
the calendar month in which the shareholder's order to purchase was accepted, in
the circumstances and subject to the qualifications described in the Funds'
Prospectus. The purpose of the conversion feature is to relieve the holders of
the Class B Shares that have been outstanding for a period of time sufficient
for the adviser and the Distributor to have been compensated for distribution
expenses related to the Class B Shares from most of the burden of such
distribution related expenses.
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were issued. At the
end of this period, Class B Shares will automatically convert to Class A Shares
and will no longer be subject to the higher distribution plan fees. 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.
For purposes of conversion to Class A Shares, Shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Trust account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Trust account
(other than those in the sub-account) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the sub-account will also convert to
Class A Shares.
Class C Shares
Class C Shares are purchased without an initial sales charge but are
subject to a deferred sales charge if redeemed within one year of purchase. The
deferred sales charge may be waived in connection with certain qualifying
redemptions. Shares issued in conjunction with the automatic reinvestment of
income distributions and capital gain distributions are not subject to any sales
charges. Class C Shares are subject to an ongoing distribution services fee of
up to 1.00% of the Funds' aggregate average daily net assets attributable to
Class C Shares. See the Funds' current Prospectus for more information.
Class A Shares -- Reduced Sales Charges
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 trustee, director or officer of the Phoenix Funds, Phoenix-Engemann
Funds, Phoenix-Seneca Funds or other mutual funds advised, subadvised or
distributed by the Adviser, Distributor or any of their corporate affiliates (an
"Affiliated Phoenix Fund"); (2) any director or officer, or any full-time
employee or sales representative (who has acted as such for at least 90 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 Mutual Insurance
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Company or Equity Planning; (9) any account held in the name of a qualified
employee benefit plan, endowment fund or foundation if, on the date of 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 Affiliated 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,
instrumentality, department, authority or agency prohibited by law from paying a
sales charge; (13) any fully matriculated student in a U.S. service academy;
(14) any unallocated accounts 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 Affiliated 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 Affiliated Phoenix Fund purchase and that a sales
charge was paid; or (16) any deferred compensation plan established for the
benefit of any Affiliated Phoenix Fund trustee or director; provided that sales
made to persons listed in (1) through (16) 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.
In addition, Class A shares purchased by the following investors are not
subject to any Class A sales charge: (1) investment advisers and financial
planners who charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients, and (2)
retirement plans and deferred compensation plans and trusts used to fund those
plans (including, for example, plans qualified or created under sections 401(a),
403(b) or 457 of the Internal Revenue Code), and "rabbi trusts" that buy shares
for their own accounts, in each case if those purchases are made through a
broker or agent or other financial intermediary that has made special
arrangements with the Distributor for those purchases; (3) clients of such
investment advisers or financial planners who buy shares for their own accounts
may also purchase shares without sales charge but only if their accounts are
linked to a master account of their investment adviser or financial planner on
the books and records of the broker, agent or financial intermediary with which
the Distributor has made such special arrangements (each of these investors may
be charged a fee by the broker, agent or financial intermediary for purchasing
shares).
Combination Purchase Privilege. Purchases, either singly or in any
combination, of shares of the Fund or shares of any other Affiliated Phoenix
Fund, (including Class B Shares and excluding Money Market Fund Series Class A
Shares) 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 such 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 Affiliated Phoenix
Fund (including Class B Shares and excluding Money Market Fund Series Class A
Shares) 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 Class A Shares of the Fund or
Class A or Class B Shares of any other Affiliated 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 an initial purchase (and subsequent purchases if necessary),
5% of the dollar amount of purchases required to complete his investment (valued
at the purchase price thereof) is held in escrow in the form of shares
registered in the investor's name until completion of the investment, at which
time escrowed shares are deposited to the investor's account. If the investor
does not complete the investment and does not within 20 days after written
request by Equity Planning or the 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 Affiliated Phoenix Fund, made
over time. Reduced sales charges
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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 Affiliated 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 information as to account registrations and account numbers to permit
verification that one or more of the purchases qualifies 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 Purchase
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) gives its
endorsements or authorization to the investment program to facilitate
solicitation of the membership by the investment dealer, thus 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.
Class B and C Shares -- Waiver of Sales Charges
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 Class B
or Class C Shares of the Fund and Class B or Class C Shares of other Affiliated
Phoenix Funds; (f) in connection with any direct rollover transfer of shares
from an established Affiliated Phoenix Fund qualified plan into a Affiliated
Phoenix Fund IRA by participants terminating from the qualifying 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 Class B Shares and be subject to
the applicable contingent deferred sales charge when redeemed.
Automatic Conversion of Class B Shares
Class B Shares of the Fund will automatically convert to Class A Shares
without a sales charge at the relative net asset values of each of the classes
after eight years from the acquisition of the Class B Shares, and as a result,
will thereafter be subject to the lower distribution and services fee under the
Class A 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 the
Distributor to have been compensated for distribution related expenses from the
burden of such distribution related expenses.
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 from the Internal
Revenue Service ("IRS") to the effect: (i) that the conversion of shares does
not constitute a taxable event under federal income tax law; and (ii) the
assessment of higher distribution and services fees and transfer agency costs
with respect to Class B Shares does not result in dividends or distributions
constituting "preferential dividends" under the Code. 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 conversion of Class B Shares would
occur, and shares might continue to be subject to the higher distribution and
services fee for an indefinite period which may extend beyond the period ending
eight (8) years after the end of the month in which affected Class B Shares were
purchased. If the Fund were unable to obtain such assurances with respect to the
assessment of distribution and services fees and transfer agent costs relative
to the Class B Shares it 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.
INVESTOR ACCOUNT SERVICES
The Funds offer accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished over
the phone. Inquiries regarding policies and procedures relating to shareholder
account services should be directed to Shareholder Services at (800) 243-1574.
Exchanges. Under certain circumstances, shares of any Phoenix Fund may be
exchanged for shares of the same Class of another Phoenix Fund or any other
Affiliated Phoenix Fund on the basis of the relative net asset values per share
at the time of the exchange.
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Exchanges are subject to the minimum initial investment requirement of the
designated Fund, Series, or Portfolio, except if made in connection with the
Systematic Exchange privilege. Shareholders may exchange shares held in
book-entry form for an equivalent number (value) of the same class of shares of
any other Affiliated Phoenix Fund, if currently offered. On exchanges with share
classes that carry a contingent deferred sales charge, the CDSC schedule of the
original shares purchased continues to apply. The exchange of shares is treated
as a sale and purchase for federal income tax purposes (see also "Dividends,
Distributions and Taxes").
Systematic Exchanges. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Affiliated Phoenix Fund automatically on a
monthly, quarterly, semi-annual or annual basis or may cancel this privilege at
any time. If you maintain an account balance 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), you may direct that shares be
automatically exchanged at predetermined intervals for shares of the same class
of another Affiliated Phoenix Fund. This requirement does not apply to Phoenix
"Self Security" program participants. Systematic exchanges will be executed upon
the close of business on the 10th day of each month or the next succeeding
business day. Systematic exchange forms are available from the Distributor.
Exchanges will be based upon each Fund's net asset value per share next computed
after the close of business on the 10th day of each month (or next succeeding
business day), without sales charge. On Class B and C Share exchanges, the CDSC
schedule of the original shares purchased continues to apply.
Dividend Reinvestment Across Accounts. If you maintain an account balance
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), you may direct that any dividends and distributions paid with respect
to shares in that account be automatically reinvested in a single account of one
of the other Phoenix Fund or any other Affiliated Phoenix Fund at net asset
value. You should obtain a current prospectus and consider the objectives and
policies of each Fund carefully before directing dividends and distributions to
another Fund. Reinvestment election forms and prospectuses are available from
Equity Planning. Distributions may also be mailed to a second payee and/or
address. Requests for directing distributions to an alternate payee must be made
in writing with a signature guarantee of the registered owner(s). To be
effective with respect to a particular dividend or distribution, notification of
the new distribution option must be received by the Transfer Agent at least
three days prior to the record date of such dividend or distribution. If all
shares in your account are repurchased or redeemed or transferred between the
record date and the payment date of a dividend or distribution, you will receive
cash for the dividend or distribution regardless of the distribution option
selected.
HOW TO REDEEM 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 New York Stock Exchange is
closed, other than customary weekend and holiday closings, 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 or more. See the
Funds' current Prospectus for further information. Redemptions by Class B and C
shareholders will be subject to the applicable deferred sales charge, if any.
The Funds have authorized one or more brokers to accept on their behalf
purchase and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Funds' behalf.
The Funds will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
Redemption of Small Accounts
Each shareholder account in the Funds 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 30 days written notice to the shareholder mailed to the address
of record. During the 30-day period the shareholder has the right to add to the
account to bring its value to $200 or more.
By Mail
Shareholders may redeem shares by making written request, executed in the
full name of the account, directly to Phoenix Funds, c/o State Street Bank and
Trust Company, P.O. Box 8301, Boston, MA 02266-8301. However, 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 Trust redeem the shares. See the Funds' current
Prospectus for more information.
Telephone Redemptions
Shareholders may redeem up to $50,000 worth of their shares by telephone.
See the Funds' current Prospectus for additional information.
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Redemption in Kind
To the extent consistent with state and federal law, the Funds may make
payment of the redemption price either in cash or in kind. However, the Funds
have elected to pay in cash all requests for redemption by any shareholder of
record, limited 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 the withdrawal
thereof. In case of a redemption in kind, securities delivered in payment for
shares would be readily marketable and 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 selling the securities.
Reinvestment Privilege
Shareholders who may have overlooked features of their investment at the
time they redeemed have a privilege of reinvestment of their investment at net
asset value. See the Funds' current prospectus for more information.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund is treated as a separate entity for federal income tax purposes.
Each Fund intends to elect to be treated as a regulated investment company
("RIC") and qualify annually as such under certain provisions of the Internal
Revenue Code (the "Code"). Under such provisions, each 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, each Fund must, among other things, derive in each taxable year at
least 90% of its gross income from dividends, interest and gains from the sale
or other disposition of securities. If in any taxable year each Fund does not
qualify as a regulated investment company, all of its taxable income will be
taxed at corporate rates.
The Code imposes a 4% nondeductible excise tax on a regulated investment
company if it does not distribute to its shareholders during the calendar year
an amount equal to 98% of the Fund's net ordinary income, with certain
adjustments, for such calendar year, plus 98% of each Fund' net capital gains
for the 12-month period ending on October 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 calendar 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 each Fund has taxable income that would be subject to the
excise tax, each 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 each Fund to
shareholders of record in October, November and December of any year will be
deemed to have been received by, and will be taxable to shareholders as of
December 31 of such year, provided that the dividend is actually paid by each
Fund before February 1, of the following year.
The Funds' policy is to distribute to its shareholders substantially all
investment company taxable income as defined in the Code and any net realized
capital gains for each year and consistent therewith to meet the distribution
requirements of Part I of subchapter M of the Code. The Funds intend to meet the
other requirements of Part I of subchapter M, including the requirements with
respect to diversification of assets and sources of income, so that the Funds
will pay no taxes on net investment income and net realized capital gains
distributed to shareholders.
Under certain circumstances, the sales charge incurred in acquiring shares
of the Funds 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 Funds 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 from the tax basis of the shares
disposed of all or a portion of the sales 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.
Distributions by the Funds reduce the net asset value of the Funds' shares.
Should a distribution reduce the net asset value of a share below a
shareholder's cost for the shares, 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 a 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.
Transactions in options on stock indices are subject to the Code rules of
section 1256. Pursuant to these rules, such options, whether sold by the Funds
during a taxable year or held by the Funds at the close of its taxable year,
will be treated as if sold for their market value, with 40% of any resulting
gain or loss treated as short-term and 60% long-term.
16
<PAGE>
A high portfolio turnover rate may result in the realization of larger
amounts of short-term gains, which are taxable to shareholders as ordinary
income.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS Regulations, the Funds may be required to withhold 31% of
all reportable payments including any taxable dividends, capital gains
distributions or share redemption proceeds, for an account which does not have a
taxpayer identification number or social security number and certain required
certifications. The Funds reserve the right to refuse to open an account for any
person failing to provide a taxpayer identification number along with the
required certifications.
The Funds will furnish shareholders, within 31 days after the end of the
calendar year, with information which is required by the Internal Revenue
Service for preparing income tax returns. Investors are urged to consult their
attorney or tax adviser regarding specific questions as to federal, foreign,
state or local taxes.
TAX SHELTERED RETIREMENT PLANS
Shares of the Trust are offered in connection with the following retirement
plans or programs: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA, 401(k),
Profit-Sharing and Money Purchase Pension Plans and 403(b) Retirement Programs.
Write or call Equity Planning (800) 243-4361 for further information
about the plans.
THE DISTRIBUTOR
Pursuant to an Underwriting Agreement with the Funds, Phoenix Equity
Planning Corporation (the "Distributor"), an indirect wholly-owned subsidiary of
Phoenix Investment Partners, Ltd. and an affiliate of DPIM, serves as
distributor for the Funds. 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 address
of the Distributor is 100 Bright Meadow Blvd., P.O. Box 2200, Enfield,
Connecticut 06083-2200.
The Underwriting 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 Funds, or by vote
of a majority of the Funds' Trustees who are not "interested persons" of the
Funds and who have no direct or indirect financial interest in the operation of
the Distribution Plan or in any related agreements. The Underwriting Agreement
will terminate automatically in the event of its assignment.
Dealers with whom the Distributor has entered into sales agreements receive
a discount or commission as set forth below.
<TABLE>
<CAPTION>
Dealer Discount
Sales Charge Sales Charge or Agency Fee
Amount of Transaction as Percentage as Percentage as Percentage of
at Offering Price of Offering Price of Amount Invested Offering 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>
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares and a sales commission of 1% of the sale price of
Class C Shares sold by such dealers. Your broker, dealer or investment adviser
may also charge you additional commissions or fees for their services in selling
shares to you provided they notify the Distributor of their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Funds and/or for providing other shareholder services. Depending on the nature
of the services, these fees may be paid either from the Funds through
distribution fees, service fees or transfer agent fees or in some cases, the
Distributor may pay certain fees from its own profits and resources. From its
own profits and resources, the Distributor does intend to: (a) sponsor sales
contests, training and educational meetings and provide additional compensation
to qualifying dealers in the form of trips, merchandise or expense
reimbursements; (b) from time to time pay special incentive and retention fees
to qualified wholesalers, registered financial institutions and third party
marketers; (c) pay broker/dealers an amount equal to 1% of the first $3 million
of Class A Share purchases by an account held in the name of a qualified
employee benefit plan with at least 100 eligible employees, 0.50% on the next $3
million, plus 0.25% on the amount in excess of $6 million; and (d) excluding
purchases as described in (c) above, pay broker/dealers an amount equal to 1% of
the amount of Class A Shares sold above $1 million but under $3 million, 0.50%
on the next $3 million, plus 0.25% on the amount in excess of $6 million. If
part or all of such investment, including investments by qualified employee
benefit plans, is subsequently redeemed within one year of the investment date,
the broker-dealer will refund to the Distributor such amounts paid with
17
<PAGE>
respect to the investment. In addition, the Distributor may pay the entire
applicable sales charge on purchases of Class A Shares to selected dealers and
agents. Any dealer who receives more than 90% of a sales charge may be deemed to
be an "underwriter" under the Securities Act of 1933.
Administrative Services
Equity Planning also acts as administrative agent of the Funds and as such
performs administrative, bookkeeping and pricing functions for the Funds. For
its services, Equity Planning will be paid a fee equal to the sum of (1) the
documented cost of fund accounting and related services provided by PFPC, Inc.,
as subagent, plus (2) the documented cost to Equity Planning to provide
financial reporting and tax services and to oversee the subagent's performance.
The current fee schedule of PFPC, Inc. is based upon the average of the
aggregate daily net asset values of the Funds, at the following incremental
annual rates.
<TABLE>
<S> <C>
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
</TABLE>
Percentage rates are applied to the aggregate daily net asset values of the
Funds. PFPC, Inc. also charges minimum fees and additional fees for each
additional class of fund shares. Equity Planning retains PFPC, Inc. as subagent
for each of the funds for which Equity Planning serves as administrative agent.
PFPC, Inc. agreed to a modified fee structure and waived certain charges.
Because PFPC, Inc.'s arrangement would have favored smaller funds over larger
funds, Equity Planning reallocates PFPC, Inc.'s overall asset-based charges
among all funds for which it serves as administrative agent on the basis of the
relative net assets of each fund. As a result, the PFPC, Inc. charges to the
Fund are expected to be slightly less than the amount that would be found
through direct application of the table illustrated above. For its services
during the Fund's fiscal year ended August 31, 1998, Equity Planning received
$ .
DISTRIBUTION PLANS
The Trust has adopted separate amended and restated distribution plans
under Rule 12b-1 of the 1940 Act for each class of shares of each series of the
Trust (the "Class A Plan," the "Class B Plan," the "Class C Plan," and
collectively the "Plans"). The Plans permit the Funds 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 Funds.
Pursuant to the Plans, the Funds will pay the Distributor 0.25% of the
average daily net assets of the Funds for providing services to shareholders
including assistance with inquiries related to shareholder accounts (the
"Service Fee"). Pursuant to the Plans, the Funds may reimburse the Distributor
monthly for actual expenses of the Distributor up to 0.75% of the average daily
net assets of the Funds' Class B and of Class C Shares. Expenditures under the
Plans shall consist of: (i) commissions to sales personnel for selling shares of
the Funds (including underwriting fees and financing expenses incurred in
connection with the payment of commissions); (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 Funds; (iv) payment of expenses incurred in sales and promotional
activities, including advertising expenditures related to the Funds; (v) the
costs of preparing and distributing promotional materials; (vi) the cost of
printing the Funds' Prospectuses and Statements of Additional Information for
distribution to potential investors; and (vii) such other similar services that
the Trustees of the Funds determine are reasonably calculated to result in the
sale of shares of the Funds.
From the Service Fee the Distributor expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Fund shares which are re-allowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor.
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 Funds' shareholders; or services providing the Funds 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.
For the fiscal year ended August 31, 1998 the Funds paid Rule 12b-1 Fees in
the amount of $ of which the Distributor received $ , W.S. Griffith
& Co., an affiliate, received $ and unaffiliated broker-dealers received
$ . The Rule 12b-1 payments were used for (1) compensation to dealers
($ ), (2) compensation to sales personnel ($ ),
18
<PAGE>
(3) advertising ($ ), (4) service costs ($ ), (5) printing and
mailing of prospectuses to other than current shareholders ($ ) and
(6) other ($ ). The Distributor's expenses from selling and servicing
Class B Shares may be more than the payments received from contingent deferred
sales charges collected on redeemed shares and from the Fund under the Class B
Plan. Those expenses may be carried over and paid in future years. At August 31,
1998, the end of the last Plan year, the Distributor had incurred unreimbursed
expenses under the Class B Plan of $ (equal to % of the Fund's net
assets) which have been carried over into the present Class B Plan year.
The fee received by the Distributor under the early years of the Plans is
not likely to reimburse the Distributor for the total distribution expenses it
will actually incur as a result of the Funds having fewer assets and the
Distributor incurring greater promotional expenses during the start-up phase. If
the Plans are terminated in accordance with their terms, the obligations of the
Funds to make payments to the Distributor pursuant to the Plans will cease and
the Funds will not be required to make any payments past the date on which each
Plan terminates.
On a quarterly basis, the Funds' Trustees 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 Funds' Trustees 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 Funds may bear pursuant to the Plans without approval of the
shareholders of the Funds 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 Funds. The Trustees have concluded that there is a reasonable
likelihood that the Plans will benefit the Fund and all classes of shareholders.
The National Association of Securities Dealers (the "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
amend the Plan.
MANAGEMENT OF THE TRUST
The Trustees of the Trust are responsible for the overall supervision of
the operations of the Trust and perform the various duties imposed on Trustees
by the 1940 Act and Massachusetts business trust law.
Trustees and Officers
The Trustees and Officers of the Trust and their business affiliations for
the past five years are set forth below and, unless otherwise noted, the address
of each executive officer and Trustee is 56 Prospect Street, Hartford,
Connecticut, 06115-0480.
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- ------------------------ ---------------- ------------------------------------------------------------
<S> <C> <C>
Robert Chesek (63) Trustee Trustee/Director (1981-present) and Chairman (1989-1994),
49 Old Post Road Phoenix Funds. Trustee, Phoenix-Aberdeen Series Fund and
Wethersfield, CT 06109 Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present). Vice President, Common Stock, Phoenix Home Life
Mutual Insurance Company (1980-1994). Director/Trustee, the
National Affiliated Investment Companies (until 1993).
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- --------------------------- ---------------- ----------------------------------------------------------------
<S> <C> <C>
E. Virgil Conway (68) Trustee Chairman, Metropolitan Transportation Authority (1992-
9 Rittenhouse Road present). Trustee/Director, Consolidated Edison Company of
Bronxville, NY 10708 New York, Inc. (1970-present), Pace University (1978-
present), Atlantic Mutual Insurance Company (1974-present),
HRE Properties (1989-present), Greater New York Councils,
Boy Scouts of America (1985-present), Union Pacific Corp.
(1978-present), Blackrock Freddie Mac Mortgage Securities
Fund (Advisory Director) (1990-present), Centennial Insurance
Company (1974-present), Josiah Macy, Jr., Foundation (1975-
present), The Harlem Youth Development Foundation (1987-
present), Accuhealth (1994-present), Trism, Inc. (1994-
present), Realty Foundation of New York (1972-present), New
York Housing Partnership Development Corp. (Chairman)
(1981-present) and Fund Directions (Advisory Director)
(1993-present). Director/Trustee, Phoenix Funds (1993-
present). Trustee, Phoenix-Aberdeen Series Fund and 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). Chairman, Audit Committee of the City of New York
(1981-1996). Advisory Director, Blackrock Fannie Mae
Mortgage Securities Fund (1989-1996). Chairman, Financial
Accounting Standards Advisory Council (1992-1995).
Director/Trustee, the National Affiliated Investment Companies
(until 1993).
Harry Dalzell-Payne (68) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Apartment 29G Institutional Mutual Funds (1996-present). Director, Duff &
New York, NY 10016 Phelps Utilities Tax-Free Income Inc. and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present). Director,
Farragut Mortgage Co., Inc. (1991-1994). Director/Trustee, the
National Affiliated Investment Companies (1983-1993).
Formerly a Major General of the British Army.
*Francis E. Jeffries (67) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
6585 Nicholas Blvd. Phoenix-Aberdeen Series Inc. and Phoenix Duff & Phelps
Apt. 1601 Institutional Mutual Funds (1996-present). Director, Duff &
Naples, FL 33963 Phelps Utilities Income Fund (1987-present), Duff & Phelps
Utilities Tax-Free Income Inc. (1991-present) and Duff &
Phelps Utility and Corporate Bond Trust Inc. (1993-present).
Director, The Empire District Electric Company (1984-
present). Director (1989-1997), Chairman of the Board (1993-
1997), President (1989-1993), and Chief Executive Officer
(1989-1995), Phoenix Investment Partners, Ltd.
Leroy Keith, Jr. (59) Trustee Chairman and Chief Executive Officer, Carson Products
Chairman and Chief Company (1995-present). Director/Trustee, Phoenix Funds
Executive Officer (1980-present). Trustee, Phoenix-Aberdeen Series Fund and
Carson Product Company Phoenix Duff & Phelps Institutional Mutual Funds (1996-
64 Ross Road present). Director, Equifax Corp. (1991-present) and
Savannah, GA 30750 Evergreen International Fund, Inc. (1989-present). Trustee,
Evergreem Liquid Trust, Evergreem Tax Exempt Trust,
Evergreen Tax Free Fund, Master Reserves Tax Free Trust,
and Master Reserves Trust. President, Morehouse College
(1987-1994). Chairman and Chief Executive Officer, Keith
Ventures (1992-1994). Director/Trustee, the National Affiliated
Investment Companies (until 1993).
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- ---------------------------- ---------------- -----------------------------------------------------------------
<S> <C> <C>
*Philip R. McLoughlin (51) Trustee and Chairman (1997-present), Director (1995-present), Vice
President Chairman (1995-1997) and Chief Executive Officer (1995-
present), Phoenix Investment Partners, Ltd. Director (1994-
present) and Executive Vice President, Investments (1988-
present), Phoenix Home Life Mutual Insurance Company.
Director/Trustee and President, Phoenix Funds (1989-present).
Trustee and President, Phoenix-Aberdeen Series Fund and
Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present). Director, Duff & Phelps Utilities Tax-Free Income Inc.
(1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990- present), Phoenix Equity
Planning Corporation. Director (1993-present), Chairman (1993-
present) and Chief Executive Officer (1993-1995), National
Securities & Research 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), PXRE Corporation
(Delaware) (1985-present), and World Trust Fund (1991-present).
Director and Executive Vice President, Phoenix Life and Annuity
Company (1996-present). Director and Executive Vice President,
PHL Variable Insurance Company (1995-present). Director,
Phoenix Charter Oak Trust Company (1996-present). Director
and Vice President, PM Holdings, Inc. (1985-present). Director
and President, Phoenix Securities Group, Inc. (1993-1995).
Director (1992-present) and President (1992-1994), W.S. Griffith
& Co., Inc. Director, PHL Associates, Inc. (1995-present).
Director/Trustee, the National Affiliated Investment Companies
(until 1993).
**Everett L. Morris (69) 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-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Duff &
Phelps Utilities Tax-Free Income Inc. (1991-present) and Duff
& Phelps Utility and Corporate Bond Trust Inc. (1993-present).
*James M. Oates (51) Trustee Chairman, IBEX Capital Markets LLC (1997-present).
Managing Director Managing Director, Wydown Group (1994-present). Director,
The Wydown Group Phoenix Investment Partners, Ltd. (1995-present). Director/
IBEX Capital Markets LLC Trustee, Phoenix Funds (1987-present). Trustee, Phoenix-
60 State Street Aberdeen Series Fund and Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present). Director, AIB
Boston, MA 02109 Govett Funds (1991-present), Blue Cross and Blue Shield of
New Hampshire (1994-present), Investors Financial Service
Corporation (1995-present), Investors Bank & Trust
Corporation (1995-present), Plymouth Rubber Co. (1995-
present) and Stifel Financial (1996-present) and Command
Systems, Inc. (1998-present). Vice Chairman, Massachusetts
Housing Partnership (1998-present). Member, Chief
Executives Organization (1996-present). Director (1984-1994),
President (1984-1994) and Chief Executive Officer (1986-
1994), Neworld Bank. Director/Trustee, the National Affiliated
Investment Companies (until 1993).
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- ----------------------------- ---------------- ---------------------------------------------------------------
<S> <C> <C>
*Calvin J. Pedersen (56) Trustee Director (1986-present), President (1993-present) and
Phoenix Duff & Phelps Executive Vice President (1992-1993), Phoenix Investment
Corporation Partners, Ltd. Director/Trustee, Phoenix Funds (1995-present).
55 East Monroe Street Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff &
Suite 3600 Phelps Institutional Mutual Funds (1996-present). President
Chicago, IL 60603 and Chief Executive Officer, Duff & Phelps Utilities Tax-Free
Income Inc. (1995-present), Duff & Phelps Utilities Income
Inc. (1994-present) and Duff & Phelps Utility and Corporate
Bond Trust Inc. (1995-present).
**Herbert Roth, Jr. (69) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
P.O. Box 909 Institutional Mutual Funds (1996-present). Director, Boston
Sherborn, MA 01770 Edison Company (1978-present), Landauer, Inc. (medical
services) (1970-present), Tech Ops./Sevcon, Inc. (electronic
controllers) (1987-present), and Mark IV Industries
(diversified manufacturer) (1985-present). Member, Directors
Advisory Council, Phoenix Home Life Mutual Insurance
Company (1998-present). Director, Key Energy Group (oil rig
service) (1988-1994) and Phoenix Home Life Mutual and
Insurance Company (1972-1998). Director/Trustee, the
National Affiliated Investment Companies (until 1993).
Richard E. Segerson (52) Trustee Managing Director, Mullin Associates (1993-present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-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. (67) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Greenwich, CT 06830 Institutional Mutual Funds (1996-present). Director, UST Inc.
(1995-present), Burroughs Wellcome Fund (1996-present),
HPSC Inc. (1995-present), Duty Free International, Inc.
(1997-1998) and Compuware (1996-present). Visiting
Professor, University of Virginia (1997-present). Chairman,
Dresing, Lierman, Weicker (1995-1996). Governor of the State
of Connecticut (1991-1995).
Michael E. Haylon (40) Executive Director and Executive Vice President--Investments, Phoenix
Vice Investment Partners, Ltd. (1995-present). Executive Vice
President President, Phoenix Funds (1993-present) and Phoenix-
Aberdeen Series Fund (1996-present). Executive Vice
President (1997-present), Vice President (1996-1997),
Phoenix Duff & Phelps Institutional Mutual Funds. Director
(1994-present), President (1995-present), Executive Vice
President (1994-1995), Vice President (1991-1994), Phoenix
Investment Counsel, Inc. Director (1994-present), President
(1996-present), Executive Vice President (1994-1996), Vice
President (1993-1994), National Securities & Research
Corporation. Director, Phoenix Equity Planning Corporation
(1995-present). 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).
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- --------------------------- ---------------- ---------------------------------------------------------------
<S> <C> <C>
Steven L. Colton (39) Vice Managing Director, Value Equities, Phoenix Investment
President Counsel, Inc. (1997-present) and Managing Director, Value
Equities, National Securities & Research Corporation (1998-
present). Vice President, The Phoenix Edge Series Fund and
Phoenix Series Fund (1997-present). Vice President/Senior
Portfolio Manager, American Century Investment Management
(1987-1997). Portfolio Manager, American Century/Benham
Income & Growth Fund (1990-1997). Portfolio Manager,
American Century/Benham Equity Growth Fund (1991-1996).
Portfolio Manager, American Century/Benham Utilities Income
Fund (1993-1997).
William E. Keen, III (34) Vice Assistant Vice President, Phoenix Equity Planning
100 Bright Meadow Blvd. President Corporation (1996-present). Vice President, Phoenix Funds,
P.O. Box 2200 Phoenix Duff & Phelps Institutional Mutual Funds and
Enfield, CT 06083-2200 Phoenix-Aberdeen Series Fund (1996-present). Assistant Vice
President, USAffinity Investments LP (1994-1995). Treasurer
and Secretary, USAffinity Funds (1994-1995). Manager, Fund
Administration, SEI Corporation (1991-1994).
William R. Moyer (53) Vice Senior Vice President and Chief Financial Officer, Phoenix
100 Bright Meadow Blvd. President Investment Partners, Ltd. (1995-present). Director (1998-
P.O. Box 2200 present), Senior Vice President, Finance (1990-present), Chief
Enfield, CT 06083-2200 Financial Officer (1996-present), and Treasurer (1994-1996
and 1998-present), Phoenix Equity Planning Corporation.
Director (1998-present), Senior Vice President (1990-present),
Chief Financial Officer (1996-present) and Treasurer (1994-
present), Phoenix Investment Counsel, Inc. Director (1998-
present), Senior Vice President, Finance (1993-present), Chief
Financial Officer (1996-present), and Treasurer (1994-
present), National Securities & Research Corporation. Senior
Vice President and Chief Financial Officer, Duff & Phelps
Investment Management Co. (1996-present). Vice President,
Phoenix Funds (1990-present), Phoenix-Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-
Aberdeen Series Fund (1996-present). Senior Vice President
and Chief Financial Officer, W. S. Griffith & Co., Inc. (1992-
1995) and Townsend Financial Advisers, Inc. (1993-1995).
Vice President, the National Affiliated Investment Companies
(until 1993). Vice President, Investment Products Finance,
Phoenix Home Life Mutual Insurance Company (1990-1995).
Diane L. Mustain (38) Vice Executive Vice President (1996-present), Senior Vice
President President (1995-1996), Vice President (1993-1995), Duff &
Phelps Investment Management Co.
Leonard J. Saltiel (44) Vice Managing Director, Operations and Service (1996-present),
President Senior Vice President (1994-1996), Phoenix Equity Planning
Corporation. Vice President, Phoenix Funds (1994-present),
Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present) and Phoenix-Aberdeen Series Fund (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).
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- ----------------------- ---------------- ----------------------------------------------------------------
<S> <C> <C>
Nancy G. Curtiss (45) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1995-present) and Phoenix-Aberdeen
Series Fund (1996-present). Second Vice President and
Treasurer, Fund Accounting, Phoenix Home Life Mutual
Insurance Company (1994-1995). Various positions with Phoenix
Home Life Insurance Company (1987-1994).
G. Jeffrey Bohne (50) Secretary Vice President and General Manager, Phoenix Home Life
101 Munson Street Mutual Insurance Co. (1993-present). Vice President, Transfer
Greenfield, MA 01301 Agent Operations (1993-1996), Vice President, Mutual Fund
Customer Service (1996-present), Phoenix Equity Planning
Corporation. Secretary/Clerk, Phoenix Funds (1993-present).
Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present) and Phoenix-Aberdeen Series Fund (1996-present).
Vice President, Home Life of New York Insurance Company
( 1984-1992).
</TABLE>
- -----------
*Indicates that the Trustee is an "interested person" of the Trust within the
meaning of the definition set forth in Section 2(a)(19) of the Investment
Company Act of 1940.
**Pursuant to the retirement policy of the Phoenix Funds, Messrs. Morris and
Roth will retire from the Board of Trustees effective January 1, 1999.
For services on the Boards of Directors/Trustees of the Phoenix Funds, each
Trustee who is not a full-time employee of the Advisers or any of its affiliates
currently receives a retainer at the annual rate of $40,000 and a fee of $2,500
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 a 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 $2,000 and $2,000 per joint Executive Committee
meeting attended. The function of the Executive Committee is to serve as a
contract review, compliance review and performance review delegate of the full
Board of Trustees. Trustee costs are allocated equally to each of the Series and
Funds within the Fund complex. The foregoing fees do not include the
reimbursement of expenses incurred in connection with meeting attendance.
Officers and employees of the Adviser who are interested persons are compensated
by the Adviser and receive no compensation from the Fund.
For the Funds' last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
Total
Compensation
Pension or From Fund and
Aggregate Retirement Benefits Estimated Fund Complex
Compensation Accrued as Part Annual Benefits (14 Funds)
Name From Fund of Fund Expenses Upon Retirement Paid to Trustees
- ------------------------ -------------- --------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Robert Chesek $ None None $
E. Virgil Conway+ $ for any for any $
Harry Dalzell-Payne+ $ Trustee Trustee $
Francis E. Jeffries $ $
Leroy Keith, Jr. $ $
Philip R. McLoughlin+ $ $
Everett L. Morris+ $ $
James M. Oates+ $ $
Calvin Pedersen $ $
Herbert Roth, Jr.+ $ $
Richard E. Segerson $ $
Lowell P. Weicker, Jr. $ $
</TABLE>
*This compensation (and the earnings thereon) will be deferred pursuant to the
Directors' Deferred Compensation Plan. At October 1, 1998, the total amount of
deferred compensation (including interest and other accumulation earned on the
original amounts deferred) accrued for Messrs. Jeffries, Morris and Roth was
$ , $ and $ , respectively. At present, by agreement among
the Trust, the Distributor and the electing director, director fees that are
deferred are paid by the Trust to the Distributor. The liability for the
deferred compensation obligation appears only as a liability of the
Distributor.
24
<PAGE>
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are members
of the Executive Committee.
At October 26, 1998, the Trustees and Officers as a group owned less than 1% of
the outstanding shares of the Trust.
Principal Shareholders
The following table sets forth information as of October 26, 1998 with
respect to each person who owns of record or is known by the Funds to own of
record or beneficially own 5% or more of any class of each Fund's equity
securities.
<TABLE>
<CAPTION>
Name of Shareholder Class Number of Shares Percent of Class
- ------------------------------ --------- ------------------ -----------------
<S> <C> <C> <C>
Core Equity Fund
Phoenix Home Life Class A 1,458,027.138 61.41%
56 Prospect St.
Hartford, CT 06103-2818
TTEES of Phoenix Savings & Class A 137,227.104 5.78%
Investment Plan (PDP)
100 Bright Meadow Blvd.
PO Box 1900
Enfield, CT 06083-1900
MLPF&S For The Sole Class B 489,761.199 66.52%
Benefit of its Customers
ATTN: Fund Administration
4800 Deer Lake Dr. E 3rd Fl
Jacksonville, FL 32246-6484
MLPF&S For The Sole Class C 220,310.365 82.10%
Benefit of its Customers
ATTN: Fund Administration
4800 Deer Lake Dr. E 3rd Fl
Jacksonville, FL 32246-6484
Donaldson Lufkin Jenrette Class C 14,590.347 5.44%
Securities Corporation Inc.
PO Box 2052
Jersey City, NJ 07303-2052
Phoenix Growth & Income Fund
Phoenix Home Life Class A 473,114.738 5.76%
56 Prospect St.
Hartford, CT 06103-2818
MLPF&S For The Sole Class B 344,945.984 9.67%
Benefit of its Customers
ATTN: Fund Administration
4800 Deer Lake Dr. E 3rd Fl
Jacksonville, FL 32246-6484
MLPF&S For The Sole Class C 110,111.692 8.15%
Benefit of its Customers
ATTN: Fund Administration
4800 Deer Lake Dr. E 3rd Fl
Jacksonville, FL 32246-6484
</TABLE>
OTHER INFORMATION
Capital Stock
The capitalization of the Trust consists solely of an unlimited number of shares
of beneficial interest. The Trust currently offers shares in different Funds and
different classes of those Funds. Holders of shares of a Fund have equal rights
with regard to voting, redemptions, dividends, distributions, and liquidations
with respect to that Fund, except that Class B and C Shares of any Fund, which
bear higher distribution plan 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 Fund. Shareholders of all
Funds vote on the election of Trustees. On matters affecting an individual Fund
(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 Fund or class is required. Trustees will call a
meeting when
25
<PAGE>
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 of 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 Funds for the issue or sale
of shares of each Fund, and any class thereof and all income, earnings, profits
and proceeds thereof, are allocated to such Fund, and class, respectively,
subject only to the rights of creditors, and constitute the underlying assets of
such Fund or class. The underlying assets of each Fund are required to be
segregated on the books of account, and are to be charged with the expenses in
respect to such Fund and with a share of the general expenses of the Trust. Any
general expenses of the Trust not readily identifiable as belonging to a
particular Fund or class will be allocated by or under the direction of the
Trustees as they determine fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust and that every written agreement, undertaking or
obligation made or issued by the Trust shall contain a provision to that effect.
The Declaration of Trust provides for indemnification out of the Trust property
for all losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability, which is considered remote, is limited
to circumstances in which the Trust would be unable to meet its obligations.
Independent Accountants
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110 has been
selected as the independent accountants for the Funds. PricewaterhouseCoopers
LLP audits the Funds' annual financial statements and expresses an opinion
thereon.
Custodian and Transfer Agent
State Street Bank and Trust Company ("State Street"), P.O. Box 351, Boston,
MA 02101, serves as custodian of the Funds' assets (the "Custodian"). Equity
Planning, 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, CT 06083-2200,
acts as Transfer Agent for the Funds (the "Transfer Agent"). As compensation,
Equity Planning receives a fee equivalent to $14.95 for each designated
shareholder account, plus out-of-pocket expenses. Transfer Agent fees are also
utilized to offset costs and fees paid to subtransfer agents employed by Equity
Planning. State Street Bank and Trust Company serves as a subtransfer agent
pursuant to a Subtransfer Agency Agreement.
Report to Shareholders
The fiscal year of the Funds end on August 31. The Funds will send
financial statements to shareholders at least semi-annually. An annual report,
containing financial statements audited by independent accountants, will be sent
to shareholders each year.
Financial Statements
The Financial Statements for the Fund's fiscal year ended August 31, 1998,
appearing in the Fund's 1998 Annual Report to Shareholders, are incorporated
herein by reference.
26
<PAGE>
APPENDIX
Moody's Investors Service, Inc. Corporate Bond Ratings
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa Group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca--Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Standard & Poor's Corporation's Corporate Bond Ratings
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB-B-CCC-CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
D--Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
27
<PAGE>
PHOENIX EQUITY SERIES FUND
PART C--OTHER INFORMATION
Item 23. Exhibits
<TABLE>
<S> <C>
a.1 Declaration of Trust of the Registrant filed as Exhibit 1.1 via EDGAR with Pre-Effective Amendment No. 1
on August 22, 1997 and incorporated herein by reference.
b. None.
c. Reference is hereby made to Article IV of Registrant's Declaration of Trust.
d.1 Investment Advisory Agreement between Registrant and Duff & Phelps Investment Management Co., Inc. dated
September 25, 1997 filed as Exhibit 5.1 via EDGAR with Pre-Effective Amendment No. 3 on September 25, 1997
and incorporated herein by reference.
d.2 Investment Advisory Agreement between Registrant and Phoenix Investment Counsel, Inc. dated September 25,
1997 filed as Exhibit 5.2 via EDGAR with Pre-Effective Amendment No. 3 on September 25, 1997 and
incorporated herein by reference.
e.1 Underwriting Agreement between Registrant and Phoenix Equity Planning Corporation dated November 19, 1997
filed as Exhibit 6.1 via EDGAR with Post-Effective Amendment No. 1 on May 20, 1998 and incorporated herein
by reference.
e.2 Form of Sales Agreement between Phoenix Equity Planning Corporation and dealers filed as Exhibit 6.2 via
EDGAR with Post-Effective Amendment No. 1 on May 20, 1998 and incorporated herein by reference.
e.3 Form of Supplement to Phoenix Family of Funds Sales Agreement filed as Exhibit 6.3 via EDGAR with
Post-Effective Amendment No. 1 on May 20, 1998 and incorporated herein by reference.
e.4 Form of Financial Institution Sales Contract for the Phoenix Family of Funds filed via EDGAR with Post-
Effective Amendment No. 1 on May 20, 1998 and incorporated herein by reference.
f. None.
g.1 Master Custodian Contract between Registrant and State Street Bank and Trust Company dated May 1, 1997 filed
as Exhibit 8.1 via EDGAR with Pre-Effective Amendment No. 3 on September 25, 1997 and incorporated herein by
reference.
h.1 Transfer Agency and Service Agreement between Registrant and Equity Planning Corporation filed as Exhibit
9.1 via EDGAR with Pre-Effective Amendment No. 1 on August 22, 1997 and incorporated herein by reference.
h.2 Sub-Transfer Agency Agreement between Registrant and Phoenix Equity Planning Corporation dated June 1, 1994
filed as Exhibit 9.2 via EDGAR with Post-Effective Amendment No. 1 on May 20, 1998 and incorporated herein
by reference.
h.3 Amended and Restated Financial Agent Agreement between Registrant and Phoenix Equity Planning Corporation
dated November 19, 1997 filed as Exhibit 9.3 via EDGAR with Post-Effective Amendment No. 1 on May 20, 1998
and incorporated herein by reference.
h.4 First Amendment to the Amended and Restated Financial Agent Agreement between Registrant and Phoenix Equity
Planning Corporation effective as of February 27, 1998 filed as Exhibit 9.4 via EDGAR with Post-Effective
Amendment No. 1 on May 20, 1998 and incorporated herein by reference.
h.5* Second Amendment to Amended and Restated Financial Agent Agreement between Registrant and Phoenix Equity
Planning Corporation dated July 31, 1998 filed via EDGAR herewith.
i. Opinion of Counsel as to legality of the shares filed as Exhibit 10 via EDGAR with Pre-Effective Amendment
No. 2 on September 23, 1997 and incorporated herein by reference.
j. Consent of Independent Accountant. [To be filed by amendment.]
k. Not applicable.
l. Initial Capital Agreement filed as Exhibit 13 via EDGAR with Pre-Effective Amendment No. 2 on September 23,
1997 and incorporated herein by reference.
m.1 Amended and Restated Distribution Plan for Class A Shares filed as Exhibit 15.1 via EDGAR with Post-
Effective Amendment No. 1 on May 20, 1998 and incorporated herein by reference.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
m.2 Amended and Restated Distribution Plan for Class B Shares filed as Exhibit 15.2 via EDGAR with Post-
Effective Amendment No. 1 on May 20, 1998 and incorporated herein by reference.
m.3 Amended and Restated Distribution Plan for Class C Shares filed as Exhibit 15.3 via EDGAR with Post-
Effective Amendment No. 1 on May 20, 1998 and incorporated herein by reference.
n. Financial Data Schedules, reflected on EDGAR as exhibit 27. [To be filed by amendment.]
o.1 Amended and Restated Plan pursuant to Rule 18f-3 filed as Exhibit 18 via EDGAR with Post-Effective
Amendment No. 1 on May 20, 1998 and incorporated herein by reference.
o.2* First Amendment to Amended and Restated Plan pursuant to Rule 18f-3
effective August 26, 1998 filed via EDGAR herewith.
p.1 Powers of Attorney for Messrs. Conway, Curtiss, Dalzell-Payne, Morris, Oates and Roth filed via EDGAR
with Pre-Effective Amendment No. 1 on August 22, 1997 and incorporated herein by reference.
p.2 Powers of Attorney for Messrs. Chesek, Jeffries, Keith, Pedersen, Segerson and Weicker filed via EDGAR
with Pre-Effective Amendment No. 2 on September 23, 1997 and incorporated herein by reference.
</TABLE>
- -----------
*Filed Herewith.
Item 24. Persons Controlled by or Under Common Control With the Fund
No person is controlled by, or under common control, with the Fund.
Item 25. 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 Agreements between the
Registrant and its Advisers provide 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 Agreements 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 26. Business and Other Connections of Investment Adviser
See "Management of the Funds" in the Prospectus and "The Investment
Advisers" and "Management of the Trust" in the Statement of Additional
Information which is included in this Post-Effective Amendment. For information
as to the business, profession, vocation or employment of a substantial nature
of directors and officers of the Advisers, reference is made to the Advisers'
current Form ADV (SEC File Nos. 801-14813 (DPIM) and 801-5995 (PIC)) filed under
the Investment Advisers Act of 1940, and incorporated herein by reference.
Item 27. Principal Underwriter
(a) Equity Planning also serves as the principal underwriter for the following
other investment companies:
Phoenix-Aberdeen Series Fund, Phoenix California Tax Exempt Bonds, Inc.,
Phoenix Duff & Phelps Institutional Mutual Funds, Phoenix-Engemann Funds,
Phoenix Income and Growth Fund, Phoenix Investment Trust 97, Phoenix
Multi-Portfolio Fund, Phoenix Multi-Sector Fixed Income Fund, Inc., Phoenix
Multi-Sector Short Term Bond Fund, Phoenix-Seneca Funds, Phoenix Series
Fund, Phoenix Strategic Allocation Fund, Phoenix Strategic Equity Series
Fund, Phoenix Worldwide Opportunities Fund, Phoenix Home Life Variable
Accumulation Account, Phoenix Home Life Variable Universal Life Account,
Phoenix Life and Annuity Variable Universal Life Account, PHL Variable
Accumulation Account and PHL Variable Separate Account MVA1.
C-2
<PAGE>
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Distributor 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
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Vice President
100 Bright Meadow Blvd. Senior Vice President,
P.O. Box 2200 Chief Financial Officer
Enfield, CT 06083-2200 and Treasurer
John F. Sharry Executive Vice President, Executive Vice President
56 Prospect Street Retail Distribution
P.O. Box 150480
Hartford, CT 06115-0480
Leonard J. Saltiel Managing Director, Vice President
56 Prospect Street Operations and Service
P.O. Box 150480
Hartford, CT 06115-0480
G. Jeffrey Bohne Vice President, Secretary
101 Munson Street Mutual Fund
P.O. Box 810 Customer Service
Greenfield, MA 01302-0810
Nancy G. Curtiss Vice President and Treasurer, Treasurer
56 Prospect Street Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
Thomas N. Steenburg Vice President, Assistant Secretary
56 Prospect Street Counsel and Secretary
P.O. Box 150480
Hartford, CT 06115-0480
William E. Keen, III Assistant Vice President, Vice President
100 Bright Meadow Blvd. Mutual Fund Regulation
P.O. Box 2200
Enfield, CT 06083-2200
Jacqueline M. Porter Assistant Vice President, Assistant Treasurer
56 Prospect Street Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an affiliated
person of the Registrant or an affiliated person of such affiliated person,
directly or indirectly, from the Registrant during the Registrant's last fiscal
year.
C-3
<PAGE>
Item 28. Location of Accounts and Records
All accounts, books and other documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
thereunder will be maintained at the offices of the Registrant located at 101
Munson Street, P.O. Box 810, Greenfield, MA 01302-0810, or its investment
advisers, Duff & Phelps Investment Management Co., Inc., 55 East Monroe Street,
Suite 3600, Chicago, Illinois 60603 and Phoenix Investment Counsel, Inc., 56
Prospect Street, Hartford, Connecticut 06115, or the custodian, State Street
Bank and Trust Company, 1 Heritage Drive, P2N, North Quincy, MA 02171. All such
accounts, books and other documents required to be maintained by the principal
underwriter will be maintained at Phoenix Equity Planning Corporation, 100
Bright Meadow Boulevard, Enfield, Connecticut 06083.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
C-4
<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 statement to be signed on its behalf by the undersigned, duly
authorized, in the City of Hartford, and State of Connecticut on the 30th day of
October, 1998.
PHOENIX EQUITY SERIES FUND
ATTEST: /s/ Thomas N. Steenburg By: /s/ Philip R. McLoughlin
------------------------------- -----------------------------------
Thomas N. Steenburg 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 person in
the capacity indicated, on this 30th day of October, 1998.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
- ----------------------------------
Robert Chesek* Trustee
- ----------------------------------
E. Virgil Conway* Trustee
/s/ Nancy G. Curtiss
- ---------------------------------- Treasurer (Principal Financial and Accounting
Nancy G. Curtiss Officer)
- ----------------------------------
Harry Dalzell-Payne* Trustee
- ----------------------------------
Francis E. Jeffries* Trustee
- ----------------------------------
Leroy Keith, Jr.* Trustee
/s/ Philip R. McLoughlin
- ----------------------------------
Philip R. McLoughlin President and Trustee (Principal Executive Officer)
- ----------------------------------
Everett L. Morris* Trustee
- ----------------------------------
James M. Oates* Trustee
- ----------------------------------
Calvin J. Pedersen** Trustee
- ----------------------------------
Herbert Roth, Jr.* Trustee
- ----------------------------------
Richard E. Segerson* Trustee
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------
Lowell P. Weicker, Jr.* Trustee
<S> <C>
By /s/ Philip R. McLoughlin
-------------------------------
</TABLE>
* Philip R. McLoughlin pursuant to powers of attorney filed previously.
S-2
Exhibit 99.Bh.5
SECOND AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
<PAGE>
SECOND AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 1st day of June, 1998 amends that
certain Amended and Restated Financial Agent Agreement dated November 19, 1997,
as amended March 23, 1998, by and among the following parties (the "Agreement")
as hereinbelow provided.
W I T N E S S E T H:
WHEREAS, the parties hereto wish to amend Schedule A of the Agreement to
reflect the recently approved fee structure:
NOW, THEREFORE, in consideration of the foregoing premise, Schedule A is
hereby replaced with the Schedule A attached hereto and made a part hereof.
Except as hereinabove provided, the Agreement shall be and remain unmodified and
in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their duly authorized officers on this 31st day of July, 1998.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX EQUITY SERIES FUND
PHOENIX INCOME AND GROWTH FUND
PHOENIX INVESTMENT TRUST 97
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By: /s/ Michael E. Haylon
------------------------------
Michael E. Haylon
Executive Vice President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Philip R. McLoughlin
------------------------------
Philip R. McLoughlin
President
<PAGE>
Schedule A
Revised Fee Schedule
Fee Information For Services as Financial Agent
For its services hereunder Financial Agent shall be paid a fee equal to the sum
of (1) the documented cost of fund accounting and related services provided by
PFPC, Inc., as subagent, to Financial Agent, plus (2) the documented cost to
Financial Agent to provide financial reporting and tax services and oversight
of subagent's performance.
The current PFPC fees are attached hereto and made a part hereof.
<PAGE>
PFPC Fee Schedule
<TABLE>
<CAPTION>
Assets Under Management Fees
---------------------------------------------------------
<S> <C>
$0 - $200,000,000 0.0850%
---------------------------------------------------------
$200 - $400,000,000 0.0500%
---------------------------------------------------------
$400 - $600,000,000 0.0300%
---------------------------------------------------------
$600 - $800,000,000 0.0200%
---------------------------------------------------------
$800 - $1,000,000,000 0.0150%
---------------------------------------------------------
greater than $1,000,000,000 0.0125%
---------------------------------------------------------
Minimum Fund Fee $84,000
---------------------------------------------------------
Additional Class $12,000
---------------------------------------------------------
</TABLE>
Existing Portfolios:
- --------------------
Asset Based Fees less than $50MM WAIVED
Class Fees - WAIVED
Minimum Fund Fees - WAIVED
New Portfolios (First Year):
- ----------------------------
Asset Based Fees less than $50MM - 50% WAIVED
Class Fees less than $25MM per Class - WAIVED
Minimum Fund Fees - WAIVED
New Portfolios (There After):
- -----------------------------
Asset Based Fees less than $50MM - 25% WAIVED
Class Fees less than $25MM per Class - 50% WAIVED
Minimum Fund Fees less than $50MM - 50% WAIVED
Minimum Fund Fees $50-100MM - 25% WAIVED
Variable Unit Investment Trust Valuation and Reporting
- ------------------------------------------------------
$1,500 per Unit Investment Trust
Exhibit 99.Bo.2
FIRST AMENDMENT TO THE AMENDED AND RESTATED PLAN PURSUANT TO RULE 18f-3
<PAGE>
PHOENIX FUNDS
(the "Funds")
FIRST AMENDMENT TO THE
AMENDED AND RESTATED PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
That certain Amended and Restated Plan Pursuant to Rule 18f-3 under the
Investment Company Act of 1940 duly adopted by the Board of Directors/Trustees
of the Funds on November 19, 1997, is hereby amended as follows:
The Board of Directors/Trustees has granted authority for the following
additional Funds to issue Class C Shares:
Phoenix Income and Growth Fund
Phoenix Multi-Portfolio Fund: Phoenix International Fund
Phoenix Worldwide Opportunities Fund
Accordingly, Schedule A is amended as attached hereto.
This Amendment was approved by the Board of Directors/Trustees at a
meeting held on August 26, 1998.
/s/ Thomas N. Steenburg
---------------------------
Assistant Secretary
<PAGE>
SCHEDULE A
----------
<TABLE>
<CAPTION>
Class A Class B Class C Class M
------- ------- ------- -------
<S> <C> <C> <C> <C>
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC. X X -- --
PHOENIX EQUITY SERIES FUND:
PHOENIX CORE EQUITY FUND X X X X
PHOENIX GROWTH AND INCOME FUND X X X X
PHOENIX INCOME AND GROWTH FUND X X X --
PHOENIX INVESTMENT TRUST 97:
PHOENIX SMALL CAP VALUE FUND X X X X
PHOENIX VALUE EQUITY FUND X X X X
PHOENIX MULTI-PORTFOLIO FUND:
EMERGING MARKETS BOND PORTFOLIO X X X X
INTERNATIONAL PORTFOLIO X X X --
MID CAP PORTFOLIO X X -- --
REAL ESTATE SECURITIES PORTFOLIO X X -- --
STRATEGIC INCOME PORTFOLIO X X X X
TAX-EXEMPT BOND PORTFOLIO X X -- --
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC. X X X X
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND X X X --
PHOENIX SERIES FUND:
AGGRESSIVE GROWTH FUND SERIES X X -- --
BALANCED FUND SERIES X X -- --
CONVERTIBLE FUND SERIES X X -- --
GROWTH FUND SERIES X X -- --
HIGH YIELD FUND SERIES X X X X
MONEY MARKET FUND SERIES X X X X
U.S. GOVERNMENT SECURITIES FUND X X -- --
SERIES
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND:
EQUITY OPPORTUNITIES FUND X X -- --
MICRO CAP FUND X X -- --
SMALL CAP FUND X X -- --
STRATEGIC THEME FUND X X X X
PHOENIX STRATEGIC ALLOCATION FUND, INC. X X -- --
PHOENIX WORLDWIDE OPPORTUNITIES FUND X X X --
</TABLE>
