<PAGE>
Phoenix Investment Partners
| ANNUAL REPORT
|
| August 31, 1999
|
|
|
-- Duff & Phelps Phoenix-Duff & Phelps
| Core Equity Fund
|
|
-- Oakhurst-SM- Phoenix-Oakhurst
Growth & Income
Fund
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDER:
[PHOTO]
We are pleased to provide this report for the Phoenix-Duff & Phelps Core
Equity Fund and the Phoenix-Oakhurst Growth & Income Fund for the 12 months
ended August 31, 1999. This was a volatile period for the stock market once
again, and perhaps the best way to deal with market fluctuations is to keep in
mind a few "basics for long-term investing."
REMAIN FOCUSED ON YOUR LONG-TERM INVESTMENT STRATEGY. Redeeming an investment
when the market drops or a fund's share price falls can work against you over
time. You could miss out on opportunities for your investment to grow when the
market or the fund's share price begins to move up. And over time, that could
make a big difference in how successful you are in achieving your financial
goals. Of course, past performance is not a guarantee of future results.
However, it is worth remembering that since 1940 the stock market has finished
every decade at a higher level than where it began.
DIVERSIFY YOUR PORTFOLIO. Spreading your investments among equity, bond and
money market funds helps reduce risk. If one type of investment doesn't perform
well over a certain time period, it may be offset by the good results of another
investment.
TAKE ADVANTAGE OF DOLLAR-COST AVERAGING. You can make market fluctuations work
to your advantage by investing a set amount of money at regular intervals. This
is called dollar-cost averaging, and it means that when prices are low you will
be buying more units and when prices are high, you'll buy fewer shares. Periodic
investment plans do not assure a profit or protect against a loss in declining
markets. This type of plan involves continuous investments in securities
regardless of fluctuating price levels. Investors should consider their
financial ability to continue purchases through periods of low price levels.
Our mission is to help you achieve your long-term financial goals. We believe
that by remaining true to our investment discipline, we will continue to add
value for our shareholders over the long term. Of course, past performance is
not a guarantee of future results. On the following pages, your fund managers
discuss their investment strategies and provide an overview of your fund's
performance over the last 12 months. We hope you find their comments
informative. If you have questions, please contact your financial advisor or
call us at 1-800-243-1574.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
AUGUST 31, 1999
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
1
<PAGE>
PHOENIX-DUFF & PHELPS CORE EQUITY FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, DIANE MUSTAIN
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The fund is designed for long-term investors seeking capital appreciation by
investing in a diversified portfolio of common stocks.
Q: HOW DID THE FUND PERFORM OVER THE LAST 12 MONTHS?
A: For the fiscal year ended August 31, 1999, Class A shares returned 26.12%,
Class B shares earned 25.16%, and Class C shares were up 25.13%. For the same
period, the S&P 500 Index(1) returned 39.88%. All performance figures assume
reinvestment of distributions and exclude the effect of sales charges.
Q: WHAT MARKET FACTORS AFFECTED PERFORMANCE, IN YOUR VIEW?
A: During 1998 and the first quarter of 1999, we witnessed a very narrow market,
dominated by large-capitalization, high P/E (price-to-earnings) stocks. This
held back the fund's performance, since our portfolio was more heavily invested
in value stocks as we consider ourselves a "relative value" manager. We had
shifted away from the high P/E growth stocks, given our belief that valuation
levels for these stocks was unsustainable, particularly in light of potentially
rising interest rates. Then in April, there was a market rotation to deeply
discounted cyclical stocks as economic news brightened. Because of our bias to
high quality stocks, we again did not participate in the market's strength.
Q: HOW IS THE PORTFOLIO POSITIONED CURRENTLY?
A: We are currently weighted at more than 60% value and less than 40% growth, as
measured by the P/E ratios of stocks in our portfolio. The portfolio is
overweighted in household products, food and drug retailers, and non-bank
financials. We had been underweighted in the technology and health-care sectors
relative to the S&P 500 Index. However, at the end of August, we purchased
Microsoft and Intel, reducing our underweighting in technology stocks.
Q: WHAT WAS YOUR RATIONALE IN ADDING THESE TWO STOCKS?
A: When looking at Microsoft's trailing 12-month price-to-earnings ratio, the
stock is trading near the low end of its range over the course of the last five
years. Historically, the company has exceeded current earnings estimates, and
with Windows 2000 coming out later this year and the success of Office 2000,
which was launched three months ago, we believe earnings estimates for fiscal
year 2000 will rise significantly. Also, we wanted to increase our
representation in the technology area as well as the overall capitalization
weighting of the portfolio, and Microsoft represents a remarkable 4.5% of the
S&P 500.
Similarly, the rationale for adding Intel to the portfolio ties into the
company's weighting in the S&P 500. It has the third largest market
capitalization, with a 2.5% weighting in the Index. We believe it is an
excellent technology issue compared with other, more volatile or smaller stocks
in the sector.
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
2
<PAGE>
PHOENIX-DUFF & PHELPS CORE EQUITY FUND (CONTINUED)
Q: WHAT OTHER STOCKS HAVE YOU PURCHASED?
A: As part of our effort to add more stocks in the top two capitalization
quartiles relative to the S&P 500, we sold some smaller capitalization stocks.
The proceeds were used to purchase Microsoft, Intel, General Electric and Eli
Lilly. As a result, at the end of August, approximately 31% of the portfolio
represented the top two quartiles in market capitalization.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: We believe that domestic economic growth is likely to remain strong, with
some signs of inflation beginning to appear. Also, international economies,
particularly Asia, which was suppressed in 1997 and 1998, appear to be
recovering nicely. Therefore, we believe that the Fed is likely to raise
interest rates once again this year as a pre-emptive move. We believe that your
fund is well-positioned to benefit from both a broader stock market as well as a
continued shift in the market to more value-oriented stocks.
SEPTEMBER 15, 1999
3
<PAGE>
Phoenix-Duff & Phelps Core Equity Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 8/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 8/31/99 DATE
------- ---------- ---------
<S> <C> <C> <C>
Class A Shares at NAV(2) 26.12% 12.20% 9/25/97
Class A Shares at POP(3) 20.13 9.42 9/25/97
Class B Shares at NAV(2) 25.16 11.36 9/25/97
Class B Shares with CDSC(4) 21.32 9.55 9/25/97
Class C Shares at NAV(2) 25.13 11.40 9/25/97
Class C Shares with CDSC(4) 25.13 11.40 9/25/97
S&P 500 Index(6) 39.88 20.68 9/25/97
</TABLE>
<TABLE>
<C> <S>
(1) Total returns are historical and include changes in share
price and the reinvestment of both dividends and capital
gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the
effect of any sales charge.
(3) "POP" (Public Offering Price) total returns include the
effect of the maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to
redemptions of certain classes of shares that do not have
a sales charge applied at the time of purchase. CDSC
charges for B shares decline from 5% to 0% over a five
year period. CDSC charges for C shares are 1% in the
first year and 0% thereafter.
(5) This chart illustrates POP returns on Class A shares and
CDSC returns for Class B and Class C shares since
inception.
(6) The S&P 500 Index is a measure of stock market total
return performance. The index's performance does not
reflect sales charges.
All returns represent past performance which may not be
indicative of future performance. The investment return
and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth
more or less than their original cost.
</TABLE>
GROWTH OF $10,000 PERIODS ENDING 8/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-DUFF & PHELPS PHOENIX-DUFF & PHELPS PHOENIX-DUFF & PHELPS S&P 500 INDEX(6)
CORE EQUITY FUND CLASS A(5) CORE EQUITY FUND CLASS B(5) CORE EQUITY FUND CLASS C(5)
<S> <C> <C> <C> <C>
9/97 $9,525.00 $10,000.00 $10,000.00 $10,000.00
98 $9,436.00 $9,839.00 $9,848.00 $10,283.00
99 $11,901.00 $11,930.00 $12,323.00 $14,384.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
9/25/97 (inception of the Fund) in Class A, Class B and Class C shares. The
total return for Class A shares reflects the maximum sales charge of 4.75% on
the initial investment. The total return for Class B shares reflects the CDSC
charges which decline from 5% to 0% over a five year period. The total return
for Class C shares reflects the CDSC charges which are 1% in the first year and
0% thereafter. Performance assumes dividends and capital gains are reinvested.
SECTOR WEIGHTINGS 8/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Financials 22%
Technology 18%
Consumer Staples 14%
Consumer Cyclicals 12%
Capital Goods 12%
Health-Care 8%
Energy 6%
Other 8%
</TABLE>
4
<PAGE>
Phoenix-Duff & Phelps Core Equity Fund
TEN LARGEST HOLDINGS AT AUGUST 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. MGIC Investment Corp. 3.9%
PROVIDES PRIVATE MORTGAGE INSURANCE
COVERAGE
2. Dayton Hudson Corp. 3.8%
GENERAL MERCHANDISE RETAILER
3. International Business Machines 3.5%
Corp.
PROVIDES ADVANCED INFORMATION TECHNOLOGIES
4. Medtronic, Inc. 3.2%
LEADING PRODUCER OF IMPLANTABLE CARDIAC
DEVICES
5. Duke Energy Corp. 3.1%
ENERGY AND ENERGY SERVICES PROVIDER
6. Fannie Mae 3.1%
PROVIDES RESIDENTIAL MORTGAGE FINANCING
7. Conoco, Inc. Class A 3.0%
INTERNATIONAL PETROLEUM COMPANY
8. General Electric Co. 3.0%
DIVERSIFIED MANUFACTURING AND FINANCIAL
SERVICES PROVIDER
9. Maytag Corp. 3.0%
MAKES, DISTRIBUTES AND SERVICES CONSUMER
APPLIANCES
10. Masco Corp. 3.0%
HOME IMPROVEMENT AND BUILDING PRODUCTS
MANUFACTURER
</TABLE>
INVESTMENTS AT AUGUST 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
COMMON STOCKS--98.8%
BANKS (MAJOR REGIONAL)--2.0%
Wells Fargo Co...................... 26,100 $ 1,039,106
BANKS (MONEY CENTER)--1.4%
Bank of America Corp................ 12,678 767,019
BUILDING MATERIALS--3.0%
Masco Corp.......................... 55,400 1,568,512
CHEMICALS--1.8%
Dow Chemical Co..................... 4,150 471,544
Praxair, Inc........................ 10,650 500,550
-----------
972,094
-----------
COMMUNICATIONS EQUIPMENT--1.4%
Lucent Technologies, Inc............ 12,000 768,750
COMPUTERS (HARDWARE)--5.9%
International Business Machines
Corp................................ 14,850 1,849,753
Sun Microsystems, Inc.(b)........... 16,300 1,295,850
-----------
3,145,603
-----------
COMPUTERS (NETWORKING)--2.2%
Cisco Systems, Inc.(b).............. 17,624 1,195,127
COMPUTERS (PERIPHERALS)--2.3%
EMC Corp.(b)........................ 20,500 1,230,000
COMPUTERS (SOFTWARE & SERVICES)--1.8%
Microsoft Corp.(b).................. 10,200 944,137
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
CONSUMER FINANCE--1.5%
Providian Financial Corp............ 10,000 $ 776,250
ELECTRIC COMPANIES--4.1%
Duke Energy Corp.................... 28,300 1,627,250
FPL Group, Inc...................... 10,600 572,400
-----------
2,199,650
-----------
ELECTRICAL EQUIPMENT--4.8%
Emerson Electric Co................. 15,200 951,900
General Electric Co................. 14,250 1,600,453
-----------
2,552,353
-----------
ELECTRONICS (SEMICONDUCTORS)--1.0%
Intel Corp.......................... 6,400 526,000
FINANCIAL (DIVERSIFIED)--5.8%
CIT Group, Inc. (The)............... 61,900 1,473,994
Fannie Mae.......................... 26,150 1,624,569
-----------
3,098,563
-----------
HEALTH CARE (DIVERSIFIED)--4.7%
Abbott Laboratories................. 11,500 498,812
American Home Products Corp......... 22,000 913,000
Warner-Lambert Co................... 16,300 1,079,875
-----------
2,491,687
-----------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.4%
Lilly (Eli) & Co.................... 3,000 223,875
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix-Duff & Phelps Core Equity Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--3.2%
Medtronic, Inc...................... 21,500 $ 1,682,375
HOUSEHOLD FURNISHINGS & APPLIANCES--3.0%
Maytag Corp......................... 25,450 1,593,806
HOUSEHOLD PRODUCTS (NON-DURABLE)--4.4%
Clorox Co. (The).................... 27,400 1,239,850
Procter & Gamble Co. (The).......... 11,100 1,101,675
-----------
2,341,525
-----------
INSURANCE (MULTI-LINE)--1.5%
Hartford Financial Services Group,
Inc. (The).......................... 17,400 790,612
INSURANCE (PROPERTY-CASUALTY)--5.5%
Allstate Corp. (The)................ 25,100 823,594
MGIC Investment Corp................ 47,800 2,076,312
-----------
2,899,906
-----------
INSURANCE BROKERS--1.8%
Marsh & McLennan Companies, Inc..... 13,250 964,766
MANUFACTURING (DIVERSIFIED)--4.5%
AlliedSignal, Inc................... 16,300 998,375
Tyco International Ltd.............. 13,900 1,408,244
-----------
2,406,619
-----------
OFFICE EQUIPMENT & SUPPLIES--2.5%
Pitney Bowes, Inc................... 22,250 1,312,750
OIL & GAS (EXPLORATION & PRODUCTION)--1.5%
Unocal Corp......................... 18,500 774,687
OIL (DOMESTIC INTEGRATED)--3.0%
Conoco, Inc. Class A................ 60,000 1,605,000
OIL (INTERNATIONAL INTEGRATED)--1.5%
Mobil Corp.......................... 7,650 783,169
PERSONAL CARE--1.8%
Avon Products, Inc.................. 21,300 934,538
RESTAURANTS--2.8%
McDonald's Corp..................... 35,500 1,468,813
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
RETAIL (DRUG STORES)--2.7%
CVS Corp............................ 34,200 $ 1,425,713
RETAIL (FOOD CHAINS)--1.9%
Albertson's, Inc.................... 21,150 1,013,878
RETAIL (GENERAL MERCHANDISE)--3.8%
Dayton Hudson Corp.................. 34,850 2,021,300
SAVINGS & LOAN COMPANIES--2.1%
Washington Mutual, Inc.............. 35,850 1,138,238
SERVICES (ADVERTISING/MARKETING)--2.6%
Omnicom Group, Inc.................. 18,000 1,356,750
SERVICES (DATA PROCESSING)--2.9%
First Data Corp..................... 34,800 1,531,200
TELEPHONE--1.7%
GTE Corp............................ 13,550 929,869
- ---------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $48,111,189) 52,474,240
- ---------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.8%
(IDENTIFIED COST $48,111,189) 52,474,240
- ---------------------------------------------------------------
SHORT-TERM OBLIGATIONS--0.9%
MONEY MARKET MUTUAL FUNDS--0.9%
State Street Global Advisors Seven
Seas Money Market Fund (4.91% seven
day effective yield)................ 474,493 474,493
- ---------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $474,493) 474,493
- ---------------------------------------------------------------
TOTAL INVESTMENTS--99.7%
(IDENTIFIED COST $48,585,682) 52,948,733(a)
Cash and receivables, less liabilities--0.3% 147,076
-----------
NET ASSETS--100.0% $53,095,809
===========
</TABLE>
<TABLE>
<S> <C>
(a) Federal Income Tax Information: Net unrealized appreciation
of investment securities is comprised of gross appreciation
of $7,246,821 and gross depreciation of $3,062,735 for
federal income tax purposes. At August 31, 1999, the
aggregate cost of securities for federal income tax purposes
was $48,764,647.
(b) Non-income producing.
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix-Duff & Phelps Core Equity Fund
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $48,585,682) $52,948,733
Receivables
Investment securities sold 1,190,420
Dividends and interest 108,381
Receivable from adviser 50,183
Fund shares sold 38,929
Prepaid expenses 1,014
-----------
Total assets 54,337,660
-----------
LIABILITIES
Payables
Investment securities purchased 1,102,001
Fund shares repurchased 50,635
Distribution fee 19,225
Transfer agent fee 14,739
Trustees' fee 8,617
Financial agent fee 7,077
Accrued expenses 39,557
-----------
Total liabilities 1,241,851
-----------
NET ASSETS $53,095,809
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of
beneficial interest $47,885,539
Accumulated net realized gain 847,219
Net unrealized appreciation 4,363,051
-----------
NET ASSETS $53,095,809
===========
CLASS A
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $41,272,227) 3,336,601
Net asset value per share $12.37
Offering price per share
$12.37/(1-4.75%) $12.99
CLASS B
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $9,332,840) 764,695
Net asset value and offering price
per share $12.20
CLASS C
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $2,490,742) 204,015
Net asset value and offering price
per share $12.21
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 630,717
Interest 34,918
----------
Total investment income 665,635
----------
EXPENSES
Investment advisory fee 380,849
Distribution fee, Class A 96,917
Distribution fee, Class B 90,343
Distribution fee, Class C 29,617
Distribution fee, Class M 88
Financial agent fee 71,702
Transfer agent 42,764
Registration 31,039
Printing 20,608
Professional 17,483
Custodian 11,837
Trustees 11,812
Organizational 5,018
Miscellaneous 3,599
----------
Total expenses 813,676
Less expenses borne by investment
adviser (89,347)
----------
Net expenses 724,329
----------
NET INVESTMENT LOSS (58,694)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on securities 944,586
Net change in unrealized appreciation
(depreciation) on investments 8,988,251
----------
NET GAIN ON INVESTMENTS 9,932,837
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $9,874,143
==========
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Duff & Phelps Core Equity Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From
Inception
Year Ended 9/25/97 to
8/31/99 8/31/98
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (58,694) $ (35,084)
Net realized gain (loss) 944,586 299,408
Net change in unrealized appreciation (depreciation) 8,988,251 (4,625,200)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS 9,874,143 (4,360,876)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (261,214) --
Net realized gains, Class B (57,305) --
Net realized gains, Class C (20,502) --
In excess of net investment income, Class A -- (25,288)
In excess of net investment income, Class B -- (5,118)
In excess of net investment income, Class C -- (1,736)
In excess of net investment income, Class M -- (233)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (339,021) (32,375)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (1,335,911 and 2,412,970
shares, respectively) 15,137,826 26,993,822
Net asset value of shares issued from reinvestment of
distributions (21,036 and 2,335 shares, respectively) 253,063 23,837
Cost of shares repurchased (318,410 and 117,241 shares,
respectively) (3,902,092) (1,316,501)
----------- -----------
Total 11,488,797 25,701,158
----------- -----------
CLASS B
Proceeds from sales of shares (163,890 and 716,086 shares,
respectively) 1,900,577 8,046,048
Net asset value of shares issued from reinvestment of
distributions (1,664 and 166 shares, respectively) 19,857 1,696
Cost of shares repurchased (94,004 and 23,107 shares,
respectively) (1,146,586) (279,158)
----------- -----------
Total 773,848 7,768,586
----------- -----------
CLASS C
Proceeds from sales of shares (54,557 and 279,432 shares,
respectively) 630,490 3,172,538
Net asset value of shares issued from reinvestment of
distributions (317 and 85 shares, respectively) 3,792 865
Cost of shares repurchased (106,979 and 23,397 shares,
respectively) (1,323,676) (253,111)
----------- -----------
Total (689,394) 2,920,292
----------- -----------
CLASS M
Proceeds from sales of shares (0 and 10,123 shares,
respectively) -- 101,258
Net asset value of shares issued from reinvestment of
distributions (0 and 23 shares, respectively) -- 233
Cost of shares repurchased (10,032 and 114 shares,
respectively) (109,546) (1,294)
----------- -----------
Total (109,546) 100,197
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 11,463,705 36,490,233
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS 20,998,827 32,096,982
NET ASSETS
Beginning of period 32,096,982 0
----------- -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) OF $0 AND $10,231,
RESPECTIVELY] $53,095,809 $32,096,982
=========== ===========
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix-Duff & Phelps Core Equity Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------------------------- -------------------------- --------------------------
FROM FROM FROM
YEAR INCEPTION YEAR INCEPTION YEAR INCEPTION
ENDED 9/25/97 TO ENDED 9/25/97 TO ENDED 9/25/97 TO
8/31/99 8/31/98 8/31/99 8/31/98 8/31/99 8/31/98
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 9.87 $ 10.00 $ 9.81 $ 10.00 $ 9.82 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS(1)
Net investment income
(loss) 0.01(2)(3) --(2)(3) (0.08)(2)(4) (0.08)(2)(4) (0.08)(2)(5) (0.08)(2)(5)
Net realized and
unrealized gain (loss) 2.57 (0.09) 2.55 (0.08) 2.55 (0.07)
-------- -------- -------- -------- -------- --------
TOTAL FROM
INVESTMENT
OPERATIONS 2.58 (0.09) 2.47 (0.16) 2.47 (0.15)
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net
realized gains (0.08) -- (0.08) -- (0.08) --
In excess of net
investment income -- (0.04) -- (0.03) -- (0.03)
-------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.08) (0.04) (0.08) (0.03) (0.08) (0.03)
-------- -------- -------- -------- -------- --------
Change in net asset value 2.50 (0.13) 2.39 (0.19) 2.39 (0.18)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD $ 12.37 $ 9.87 $ 12.20 $ 9.81 $ 12.21 $9.82
======== ======== ======== ======== ======== ========
Total return(6) 26.12% (0.93)%(7) 25.16% (1.61)%(7) 25.13% (1.52)%(7)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $41,272 $22,683 $9,333 $6,801 $2,491 $2,514
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 1.25% 1.25%(8) 2.00% 2.00%(8) 2.00% 2.00%(8)
Net investment income
(loss) 0.06% 0.02%(8) (0.69)% (0.73)%(8) (0.70)% (0.73)%(8)
Portfolio turnover 82% 83%(7) 82% 83%(7) 82% 83%(7)
</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 $0.02
and $0.19, respectively.
(4) Includes reimbursement of operating expenses by investment adviser of $0.02
and $0.19, respectively.
(5) Includes reimbursement of operating expenses by investment adviser of $0.02
and $0.19, respectively.
(6) Maximum sales charges are not reflected in the total return calculation.
(7) Not annualized.
(8) Annualized.
See Notes to Financial Statements 9
<PAGE>
PHOENIX-OAKHURST GROWTH & INCOME FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, STEVE COLTON
Q: WHAT IS THE INVESTMENT OBJECTIVE OF THE PHOENIX-OAKHURST GROWTH & INCOME
FUND?
A: The Phoenix-Oakhurst Growth & Income Fund is appropriate for long-term
investors seeking dividend growth, current income and capital appreciation
through investments in common stocks.
Q: CAN YOU PROVIDE A BRIEF OVERVIEW OF THE MARKETS FOR THE LAST 12 MONTHS?
A: This was a very good year for stock investors. The markets have rebounded
dramatically from the depressed levels of last year when Russia defaulted on its
short-term debt and Long-Term Capital Management had to be bailed-out by a group
of large financial institutions. This resulted in a "liquidity crisis," which
caused the Federal Reserve to begin a series of three interest rate cuts. Since
that time, confidence has been restored, the economy has grown and corporate
earnings have increased beyond expectations.
Large capitalization stocks dominated small caps over the past year ended
August 31, 1999. The large-cap S&P 500 Index(1) returned 39.88% versus a 28.36%
return for the small-cap Russell 2000 Index(2). Portfolio managers have favored
large-cap stocks for their superior liquidity and strong earnings generated by
restructuring benefits and economies of scale.
In terms of style, growth stocks returned more than value-type companies.
The S&P Barra Growth Index(3) returned 44.76% versus a 34.11% return for the S&P
Barra Value Index(4). Strong returns in technology stocks have propelled the
growth index higher. Recently though, value companies have had a resurgence in
popularity as commodity prices have risen. The OPEC agreement to limit oil
production has resulted in a higher oil price. Also, rebounding Asian economies
and a strong domestic housing market have helped improve the earnings outlook
for companies in the metal/mining, paper/forest products and chemicals
industries.
Q: HOW DID THE PORTFOLIO PERFORM IN THIS ENVIRONMENT?
A: Class A shares returned 40.72%, Class B shares earned 39.72%, and Class C
shares were up 39.58% for the fiscal year ended August 31, 1999. The portfolio
beat the 39.88% return of the Standard & Poor's 500 and the 31.14% return of the
Lipper Growth & Income average for a peer universe of 853 funds. All performance
figures assume reinvestment of distributions and exclude the effect of sales
charges.
Several holdings in the technology sector helped the portfolio achieve its
strong results. In particular, Microsoft, Apple Computer and Hewlett Packard
were among our best performing stocks. Apple Computer was one of our favorite
companies during the year as it beat earnings estimates on strong sales of its
unique iMac personal computer. The outlook remains strong at Apple due to
popular new products like the G4
(1) THE S&P 500 INDEX IS AN UNMANAGED INDEX COMMONLY USED TO MEASURE LARGE-CAP
STOCK PERFORMANCE.
(2) THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX COMMONLY USED TO MEASURE
SMALL-CAP STOCK PERFORMANCE.
(3) THE S&P BARRA GROWTH INDEX IS AN UNMANAGED INDEX COMMONLY USED TO MEASURE
LARGE-CAP GROWTH STOCK PERFORMANCE.
(4) THE S&P BARRA VALUE INDEX IS AN UNMANAGED INDEX COMMONLY USED TO MEASURE
LARGE-CAP VALUE STOCK PERFORMANCE.
NONE OF THESE INDICES IS AVAILABLE FOR DIRECT INVESTMENT.
10
<PAGE>
PHOENIX-OAKHURST GROWTH & INCOME FUND (CONTINUED)
and iBook laptop PC. Stocks in the financial sector also had powerful returns.
Holdings like Chase Manhattan Bank and Morgan Stanley Dean Witter started the
year from depressed price levels caused by the liquidity crisis in the late
summer and early fall. The stocks did well as corporate loan activity remained
strong, underwriting activity was robust and there were a large number of
mergers and acquisitions.
The portfolio also benefited from a lower exposure to consumer non-cyclical
stocks than in the S&P 500. Our underweight position in Coca-Cola paid off as
the company suffered from disappointing earnings from weak sales and a
contamination scare in Europe. Consumer stocks tend to do well when there is a
scarcity of earnings growth. That is not the case now because there is
broad-based strength in the overall economy.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: After a strong 1998 and first half of 1999, we expect another year of
positive surprises for the U.S. economy. Improving Asian and European economies
should help domestic companies with overseas sales. The outlook for corporate
earnings has improved since the start of the year. It seems economists and
analysts were too pessimistic in their initial assumptions for the domestic
economy.
Recent observations show: manufacturing activity is improving, consumers
continue to spend and business investment remains strong. At this point, the
main concern on the minds of professional investors is that the economy is too
strong. The Fed has already raised interest rates twice since June. Last year at
this time deflation was a hot topic. Now, the fear is that rising wages and
commodity prices will ignite inflation and result in further Fed tightening. Add
to that Y2K worries, and it is no wonder the markets are volatile. In spite of
all the volatility, interest rates remain at reasonable levels, and the outlook
for corporate earnings is favorable.
SEPTEMBER 9, 1999
11
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 8/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 8/31/99 DATE
------- ---------- ---------
<S> <C> <C> <C>
Class A Shares at NAV(2) 40.72% 22.60% 9/25/97
Class A Shares at POP(3) 34.03 19.55 9/25/97
Class B Shares at NAV(2) 39.72 21.66 9/25/97
Class B Shares with CDSC(4) 35.88 20.00 9/25/97
Class C Shares at NAV(2) 39.58 21.65 9/25/97
Class C Shares with CDSC(4) 39.58 21.65 9/25/97
S&P 500 Index(6) 39.88 20.68 9/25/97
</TABLE>
<TABLE>
<C> <S>
(1) Total returns are historical and include changes in share
price and the reinvestment of both dividends and capital
gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the
effect of any sales charge.
(3) "POP" (Public Offering Price) total returns include the
effect of the maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to
redemptions of certain classes of shares that do not have
a sales charge applied at the time of purchase. CDSC
charges for B shares decline from 5% to 0% over a five
year period. CDSC charges for C shares are 1% in the
first year and 0% thereafter.
(5) This chart illustrates POP returns on Class A shares and
CDSC returns for Class B and Class C shares since
inception.
(6) The S&P 500 Index is a measure of stock market total
return performance. The index's performance does not
reflect sales charges.
All returns represent past performance which may not be
indicative of future performance. The investment return
and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth
more or less than their original cost.
</TABLE>
GROWTH OF $10,000 PERIODS ENDING 8/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-OAKHURST PHOENIX-OAKHURST PHOENIX-OAKHURST S&P 500 INDEX(6)
GROWTH & INCOME GROWTH & INCOME GROWTH & INCOME
FUND CLASS A(5) FUND CLASS B(5) FUND CLASS C(5)
<S> <C> <C> <C> <C>
Sep-97 $9,525.00 $10,000.00 $10,000.00 $10,000.00
98 $10,039.00 $10,459.00 $10,467.00 $10,283.00
99 $14,126.00 $14,228.00 $14,609.00 $14,384.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
9/25/97 (inception of the Fund) in Class A, Class B and Class C shares. The
total return for Class A shares reflects the maximum sales charge of 4.75% on
the initial investment. The total return for Class B shares reflects the CDSC
charges which decline from 5% to 0% over a five year period. The total return
for Class C shares reflects the CDSC charges which are 1% in the first year and
0% thereafter. Performance assumes dividends and capital gains are reinvested.
SECTOR WEIGHTINGS 8/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 23%
Financials 17%
Consumer Cyclicals 11%
Health-Care 10%
Consumer Staples 9%
Capital Goods 9%
Communication Service 7%
Other 14%
</TABLE>
12
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
TEN LARGEST HOLDINGS AT AUGUST 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Microsoft Corp. 4.2%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
2. Intel Corp. 2.7%
DESIGNS, DEVELOPS AND MARKETS ADVANCED
MICROCOMPUTER COMPONENTS
3. General Electric Co. 2.5%
DIVERSIFIED MANUFACTURING AND FINANCIAL
SERVICES PROVIDER
4. S&P 500 Depository Receipts 2.4%
LONG-TERM UNIT INVESTMENT TRUST
5. International Business Machines 2.3%
Corp.
PROVIDES ADVANCED INFORMATION TECHNOLOGIES
6. Citigroup, Inc. 2.3%
DIVERSIFIED FINANCIAL SERVICES HOLDING
COMPANY
7. Chase Manhattan Corp. (The) 2.2%
DOMESTIC AND INTERNATIONAL FINANCIAL
SERVICES PROVIDER
8. Ford Motor Co. 1.9%
MANUFACTURER OF CARS, VANS, TRUCKS
TRACTORS AND ACCESSORIES
9. Wal-Mart Stores, Inc. 1.7%
ONE OF THE LARGEST U.S. DISCOUNT RETAILERS
10. Bristol-Myers Squibb Co. 1.7%
COMPREHENSIVE HEALTH-CARE COMPANY
</TABLE>
INVESTMENTS AT AUGUST 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
COMMON STOCKS--95.1%
AEROSPACE/DEFENSE--2.3%
Boeing Co. (The)....................... 84,900 $ 3,847,031
Cordant Technologies, Inc.............. 11,400 471,675
General Dynamics Corp.................. 51,400 3,238,200
Goodrich (B.F.) Co. (The).............. 28,400 1,049,025
Northrop Grumman Corp.................. 2,300 166,750
------------
8,772,681
------------
AIRLINES--0.2%
Alaska Air Group, Inc.(b).............. 8,700 376,275
COMAIR Holdings, Inc................... 9,900 209,137
Delta Air Lines, Inc................... 5,400 274,387
------------
859,799
------------
ALUMINUM--0.3%
Alcoa, Inc............................. 20,000 1,291,250
AUTO PARTS & EQUIPMENT--0.2%
Arvin Industries, Inc.................. 8,200 293,150
Meritor Automotive, Inc................ 11,800 257,387
TRW, Inc............................... 2,100 114,450
------------
664,987
------------
AUTOMOBILES--3.0%
Ford Motor Co.......................... 139,600 7,276,650
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
AUTOMOBILES--CONTINUED
General Motors Corp.................... 62,500 $ 4,132,812
------------
11,409,462
------------
BANKS (MAJOR REGIONAL)--1.5%
Bank of New York Co., Inc. (The)....... 1,600 57,200
Bank One Corp.......................... 93,200 3,739,650
Fleet Financial Group, Inc............. 43,700 1,739,806
Mellon Bank Corp....................... 7,600 253,650
------------
5,790,306
------------
BANKS (MONEY CENTER)--4.9%
Bank of America Corp................... 51,300 3,103,650
Chase Manhattan Corp. (The)............ 98,300 8,226,481
First Union Corp....................... 50,300 2,087,450
Morgan (J.P.) & Co., Inc............... 39,900 5,154,581
------------
18,572,162
------------
BANKS (REGIONAL)--1.1%
City National Corp..................... 28,300 939,206
Cullen/Frost Bankers, Inc.............. 30,000 783,750
UnionBanCal Corp....................... 64,200 2,463,675
------------
4,186,631
------------
BEVERAGES (ALCOHOLIC)--0.7%
Anheuser-Busch Companies, Inc.......... 26,400 2,032,800
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
BEVERAGES (ALCOHOLIC)--CONTINUED
Coors (Adolph) Co. Class B............. 9,500 $ 542,094
------------
2,574,894
------------
BIOTECHNOLOGY--1.0%
Amgen, Inc.(b)......................... 33,800 2,811,737
IDEC Pharmaceuticals Corp.(b).......... 3,200 406,600
IDEXX Laboratories, Inc.(b)............ 8,700 147,900
Liposome Co., Inc. (The)(b)............ 17,600 347,050
------------
3,713,287
------------
BROADCASTING (TELEVISION, RADIO & CABLE)--0.3%
CBS Corp.(b)........................... 23,500 1,104,500
BUILDING MATERIALS--0.5%
Lafarge Corp........................... 24,000 660,000
Masco Corp............................. 27,300 772,931
Owens Corning.......................... 16,700 469,687
------------
1,902,618
------------
CHEMICALS--0.8%
Dow Chemical Co........................ 17,400 1,977,075
Geon Co. (The)......................... 10,400 310,700
Solutia, Inc........................... 31,500 630,000
------------
2,917,775
------------
CHEMICALS (SPECIALTY)--0.4%
Lubrizol Corp. (The)................... 22,600 573,475
W.R. Grace & Co.(b).................... 42,500 812,812
------------
1,386,287
------------
COMMUNICATIONS EQUIPMENT--2.7%
ADC Telecommunications, Inc.(b)........ 10,500 389,156
Comverse Technology, Inc.(b)........... 14,700 1,146,600
General Instrument Corp.(b)............ 24,900 1,224,769
Lucent Technologies, Inc............... 78,600 5,035,312
Motorola, Inc.......................... 18,500 1,706,625
Tellabs, Inc.(b)....................... 9,200 547,975
------------
10,050,437
------------
COMPUTERS (HARDWARE)--6.1%
Adaptec, Inc.(b)....................... 23,700 924,300
Apple Computer, Inc.(b)................ 52,600 3,432,150
Dell Computer Corp.(b)................. 55,500 2,709,094
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
COMPUTERS (HARDWARE)--CONTINUED
Electronics for Imaging, Inc.(b)....... 5,900 $ 345,887
Gateway, Inc.(b)....................... 400 38,775
Hewlett-Packard Co..................... 49,800 5,247,675
International Business Machines
Corp................................... 71,100 8,856,394
NCR Corp.(b)........................... 16,100 704,375
Sun Microsystems, Inc.(b).............. 9,600 763,200
------------
23,021,850
------------
COMPUTERS (NETWORKING)--1.3%
3Com Corp.(b).......................... 7,300 181,131
Cisco Systems, Inc.(b)................. 68,900 4,672,281
------------
4,853,412
------------
COMPUTERS (PERIPHERALS)--0.3%
EMC Corp.(b)........................... 18,600 1,116,000
COMPUTERS (SOFTWARE & SERVICES)--6.8%
Adobe Systems, Inc..................... 1,900 189,287
America Online, Inc.(b)................ 40,300 3,679,894
BMC Software, Inc.(b).................. 10,400 559,650
Citrix Systems, Inc.(b)................ 3,500 199,500
Computer Associates International,
Inc.................................... 7,700 435,050
Compuware Corp.(b)..................... 25,200 760,725
Legato Systems, Inc.(b)................ 6,600 284,212
Microsoft Corp.(b)..................... 173,100 16,022,569
Novell, Inc.(b)........................ 10,800 255,825
Oracle Corp.(b)........................ 32,500 1,186,250
Sterling Software, Inc.(b)............. 10,100 203,262
Synopsys, Inc.(b)...................... 4,300 240,531
USWeb Corp.(b)......................... 9,100 177,450
Unisys Corp.(b)........................ 33,600 1,444,800
------------
25,639,005
------------
CONSTRUCTION (CEMENT & AGGREGATES)--0.2%
Centex Construction Products, Inc...... 7,400 284,437
Southdown, Inc......................... 9,800 494,900
------------
779,337
------------
CONSUMER FINANCE--0.3%
Countrywide Credit Industries, Inc..... 21,000 674,625
Providian Financial Corp............... 4,700 364,837
------------
1,039,462
------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
CONTAINERS (METAL & GLASS)--0.0%
Ball Corp.............................. 3,000 $ 134,812
DISTRIBUTORS (FOOD & HEALTH)--0.6%
AmeriSource Health Corp. Class A(b).... 35,700 921,506
Andrx Corp.(b)......................... 4,100 294,687
Patterson Dental Co.(b)................ 8,200 336,200
SUPERVALU, INC......................... 38,800 873,000
------------
2,425,393
------------
ELECTRIC COMPANIES--4.7%
Central & South West Corp.............. 30,800 696,850
Dominion Resources, Inc................ 18,600 860,250
Duke Energy Corp....................... 27,700 1,592,750
Edison International................... 34,300 870,362
Energy East Corp....................... 85,200 2,130,000
GPU, Inc............................... 29,300 999,862
LG&E Energy Corp....................... 16,300 374,900
Minnesota Power, Inc................... 49,400 879,937
New Century Energies, Inc.............. 24,800 895,900
Northern States Power Co............... 37,200 876,525
PG&E Corp.............................. 11,400 345,562
Puget Sound Energy, Inc................ 27,400 649,037
Texas Utilities Co..................... 89,400 3,615,112
Unicom Corp............................ 16,800 648,900
UtiliCorp United, Inc.................. 104,800 2,430,050
------------
17,865,997
------------
ELECTRICAL EQUIPMENT--2.8%
General Electric Co.................... 85,500 9,602,719
Rockwell International Corp............ 14,600 863,225
------------
10,465,944
------------
ELECTRONICS (SEMICONDUCTORS)--3.6%
Integrated Device Technology,
Inc.(b)................................ 24,700 481,650
Intel Corp............................. 126,200 10,372,062
Texas Instruments, Inc................. 34,600 2,839,362
------------
13,693,074
------------
ENGINEERING & CONSTRUCTION--0.0%
McDermott International, Inc........... 2,200 49,637
ENTERTAINMENT--0.8%
Time Warner, Inc....................... 15,600 925,275
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
ENTERTAINMENT--CONTINUED
Viacom, Inc. Class B(b)................ 50,100 $ 2,107,331
------------
3,032,606
------------
EQUIPMENT (SEMICONDUCTOR)--0.4%
Applied Materials, Inc.(b)............. 12,400 881,175
LAM Research Corp.(b).................. 3,800 214,463
Teradyne, Inc.(b)...................... 4,500 306,281
------------
1,401,919
------------
FINANCIAL (DIVERSIFIED)--5.2%
Ambac Financial Group, Inc............. 19,000 1,003,438
American Express Co.................... 3,000 412,500
Citigroup, Inc......................... 197,100 8,758,631
Fannie Mae............................. 57,700 3,584,613
Freddie Mac............................ 36,100 1,859,150
Morgan Stanley Dean Witter & Co........ 45,800 3,930,213
------------
19,548,545
------------
FOODS--1.3%
ConAgra, Inc........................... 1,700 41,650
Earthgrains Co. (The).................. 33,500 808,188
General Mills, Inc..................... 9,600 804,000
Hormel Foods Corp...................... 32,600 1,312,150
Quaker Oats Co. (The).................. 32,000 2,138,000
------------
5,103,988
------------
FOOTWEAR--0.0%
NIKE, Inc. Class B..................... 1,900 87,875
HARDWARE & TOOLS--0.1%
Black & Decker Corp. (The)............. 10,300 542,038
HEALTH CARE (DIVERSIFIED)--4.0%
Abbott Laboratories.................... 10,800 468,450
American Home Products Corp............ 12,000 498,000
Bristol-Myers Squibb Co................ 91,600 6,446,350
Johnson & Johnson...................... 43,300 4,427,425
Mallinckrodt, Inc...................... 12,600 403,988
Warner-Lambert Co...................... 42,600 2,822,250
------------
15,066,463
------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--3.8%
Forest Laboratories, Inc.(b)........... 8,000 387,500
Lilly (Eli) & Co....................... 57,500 4,290,938
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--CONTINUED
Merck & Co., Inc....................... 33,100 $ 2,223,906
Pfizer, Inc............................ 56,700 2,140,425
Pharmacia & Upjohn, Inc................ 49,100 2,565,475
Schering-Plough Corp................... 49,600 2,607,100
------------
14,215,344
------------
HEALTH CARE (GENERIC AND OTHER)--0.0%
Jones Pharma, Inc...................... 4,200 113,663
HEALTH CARE (MANAGED CARE)--0.8%
Aetna, Inc............................. 11,000 855,250
Oxford Health Plans, Inc.(b)........... 25,000 387,500
PacifiCare Health Systems, Inc.(b)..... 13,300 798,000
Trigon Healthcare, Inc.(b)............. 17,500 635,469
Wellpoint Health Networks, Inc.(b)..... 6,100 444,538
------------
3,120,757
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.1%
Baxter International, Inc.............. 7,900 529,794
HEALTH CARE (SPECIALIZED SERVICES)--0.1%
Apria Healthcare Group, Inc.(b)........ 10,800 182,250
Quintiles Transnational Corp.(b)....... 3,500 125,344
------------
307,594
------------
HOMEBUILDING--0.3%
Centex Corp............................ 13,100 368,438
Horton (D.R.), Inc..................... 8,500 123,781
Kaufman and Broad Home Corp............ 2,900 59,269
Lennar Corp............................ 6,500 123,500
Pulte Corp............................. 12,600 291,375
------------
966,363
------------
HOUSEHOLD FURNISHINGS & APPLIANCES--0.2%
Whirlpool Corp......................... 11,100 784,631
HOUSEHOLD PRODUCTS (NON-DURABLE)--2.4%
Church & Dwight Co., Inc............... 27,400 1,274,100
Clorox Co. (The)....................... 3,800 171,950
Kimberly-Clark Corp.................... 55,400 3,154,338
Procter & Gamble Co. (The)............. 44,900 4,456,325
------------
9,056,713
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
HOUSEWARES--0.3%
Tupperware Corp........................ 54,000 $ 1,218,375
INSURANCE (LIFE/HEALTH)--0.9%
Lincoln National Corp.................. 71,400 3,346,875
INSURANCE (MULTI-LINE)--0.3%
Hartford Financial Services Group, Inc.
(The).................................. 13,900 631,581
Loews Corp............................. 8,000 628,000
------------
1,259,581
------------
INSURANCE BROKERS--1.2%
Gallagher (Arthur J.) & Co............. 24,400 1,332,850
Marsh & McLennan Companies, Inc........ 44,400 3,232,875
------------
4,565,725
------------
INVESTMENT BANKING/BROKERAGE--1.4%
Bear Stearns Companies, Inc. (The)..... 3,500 145,688
Edwards (A.G.), Inc.................... 2,900 72,863
Equitable Companies, Inc. (The)........ 17,000 1,049,750
Lehman Brothers Holdings, Inc.......... 17,500 940,625
Merrill Lynch & Co., Inc............... 28,000 2,089,500
Schwab (Charles) Corp. (The)........... 20,800 821,600
------------
5,120,026
------------
LEISURE TIME (PRODUCTS)--0.3%
Hasbro, Inc............................ 41,100 1,004,381
LODGING-HOTELS--0.0%
Carnival Corp.......................... 2,800 125,125
MACHINERY (DIVERSIFIED)--0.7%
Ingersoll-Rand Co...................... 15,500 986,188
Manitowoc Co., Inc. (The).............. 4,800 177,900
Mettler-Toledo International,
Inc.(b)................................ 27,800 740,175
Tecumseh Products Co. Class A.......... 16,100 917,700
------------
2,821,963
------------
MANUFACTURING (DIVERSIFIED)--2.0%
AlliedSignal, Inc...................... 12,000 735,000
ITT Industries, Inc.................... 3,900 131,869
National Service Industries, Inc....... 8,600 275,200
Pentair, Inc........................... 9,100 414,050
Premark International, Inc............. 40,600 1,349,950
Tyco International Ltd................. 32,300 3,272,394
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
MANUFACTURING (DIVERSIFIED)--CONTINUED
United Technologies Corp............... 20,000 $ 1,322,500
------------
7,500,963
------------
MANUFACTURING (SPECIALIZED)--0.3%
Brady Corp. Class A.................... 15,200 456,000
Briggs & Stratton Corp................. 4,000 243,500
York International Corp................ 10,900 448,263
------------
1,147,763
------------
NATURAL GAS--0.4%
Equitable Resources,Inc................ 34,300 1,260,525
MDU Resources Group, Inc............... 10,900 256,150
------------
1,516,675
------------
OIL & GAS (EXPLORATION & PRODUCTION)--0.8%
Anadarko Petroleum Corp................ 37,600 1,278,400
Apache Corp............................ 38,200 1,738,100
------------
3,016,500
------------
OIL (DOMESTIC INTEGRATED)--0.7%
Atlantic Richfield Co.................. 29,800 2,620,538
OIL (INTERNATIONAL INTEGRATED)--1.7%
Chevron Corp........................... 20,000 1,845,000
Exxon Corp............................. 44,800 3,533,600
Texaco, Inc............................ 15,800 1,003,300
------------
6,381,900
------------
PAPER & FOREST PRODUCTS--0.8%
Georgia-Pacific Group.................. 19,400 802,675
International Paper Co................. 12,800 602,400
Louisiana-Pacific Corp................. 64,700 1,196,950
Weyerhaeuser Co........................ 4,800 270,000
------------
2,872,025
------------
PHOTOGRAPHY/IMAGING--0.5%
Eastman Kodak Co....................... 24,000 1,762,500
PUBLISHING (NEWSPAPERS)--0.4%
Knight-Ridder, Inc..................... 23,800 1,283,713
Times Mirror Co. (The) Class A......... 5,200 300,300
------------
1,584,013
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
RAILROADS--0.5%
Union Pacific Corp..................... 35,600 $ 1,733,275
RESTAURANTS--0.3%
Bob Evans Farms, Inc................... 15,800 321,925
Darden Restaurants, Inc................ 25,300 395,313
Tricon Global Restaurants, Inc.(b)..... 15,300 621,563
------------
1,338,801
------------
RETAIL (BUILDING SUPPLIES)--0.8%
Home Depot, Inc. (The)................. 44,000 2,689,500
Lowe's Companies, Inc.................. 8,700 393,675
------------
3,083,175
------------
RETAIL (COMPUTERS & ELECTRONICS)--0.3%
Best Buy Co., Inc.(b).................. 14,600 1,025,650
RETAIL (DEPARTMENT STORES)--0.1%
Federated Department Stores, Inc.(b)... 7,000 322,000
RETAIL (DISCOUNTERS)--0.1%
Family Dollar Stores, Inc.............. 7,600 149,625
Ross Stores, Inc....................... 7,000 291,375
------------
441,000
------------
RETAIL (DRUG STORES)--0.1%
Longs Drug Stores Corp................. 7,400 232,638
RETAIL (GENERAL MERCHANDISE)--2.2%
Dayton Hudson Corp..................... 2,600 150,800
Kmart Corp.(b)......................... 20,800 261,300
Sears, Roebuck & Co.................... 32,000 1,200,000
Wal-Mart Stores, Inc................... 147,400 6,531,663
------------
8,143,763
------------
RETAIL (SPECIALTY)--0.2%
Claire's Stores, Inc................... 17,800 334,863
Toys 'R' Us, Inc.(b)................... 4,000 55,250
Zale Corp.(b).......................... 10,300 357,281
------------
747,394
------------
RETAIL (SPECIALTY-APPAREL)--0.7%
Abercrombie & Fitch Co. Class A(b)..... 4,800 167,400
AnnTaylor Stores Corp.(b).............. 9,900 327,938
Gap, Inc. (The)........................ 24,900 974,213
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
RETAIL (SPECIALTY-APPAREL)--CONTINUED
TJX Companies, Inc. (The).............. 45,800 $ 1,322,475
------------
2,792,026
------------
SAVINGS & LOAN COMPANIES--0.0%
GreenPoint Financial Corp.............. 5,100 131,963
SERVICES (ADVERTISING/MARKETING)--0.2%
Omnicom Group, Inc..................... 5,600 422,100
Wink Communications, Inc.(b)........... 4,000 164,000
------------
586,100
------------
SERVICES (COMMERCIAL & CONSUMER)--1.2%
H&R Block, Inc......................... 39,800 2,213,875
Hertz Corp. (The) Class A.............. 8,100 326,531
Navigant Consulting, Inc.(b)........... 14,600 640,575
Ogden Corp............................. 53,200 1,210,300
------------
4,391,281
------------
SERVICES (COMPUTER SYSTEMS)--0.1%
CSG Systems International, Inc.(b)..... 7,300 164,706
SunGard Data Systems, Inc.(b).......... 8,000 200,000
------------
364,706
------------
SERVICES (DATA PROCESSING)--0.6%
Concord EFS, Inc.(b)................... 12,300 456,638
Paychex, Inc........................... 58,500 1,722,094
------------
2,178,732
------------
SPECIALTY PRINTING--0.6%
Deluxe Corp............................ 66,400 2,261,750
TELECOMMUNICATIONS (LONG DISTANCE)--2.3%
AT&T Corp.............................. 117,150 5,271,750
MCI WorldCom, Inc.(b).................. 47,200 3,575,400
------------
8,847,150
------------
TELEPHONE--4.4%
Ameritech Corp......................... 33,800 2,133,625
Bell Atlantic Corp..................... 47,500 2,909,375
BellSouth Corp......................... 95,000 4,298,750
GTE Corp............................... 25,300 1,736,213
SBC Communications, Inc................ 105,300 5,054,400
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
TELEPHONE--CONTINUED
U S WEST, Inc.......................... 9,300 $ 485,925
------------
16,618,288
------------
TEXTILES (APPAREL)--0.4%
Jones Apparel Group, Inc.(b)........... 21,100 547,281
Tommy Hilfiger Corp.(b)................ 26,400 895,950
------------
1,443,231
------------
TOBACCO--0.8%
Philip Morris Companies, Inc........... 86,100 3,223,369
TRUCKS & PARTS--0.4%
PACCAR, Inc............................ 25,900 1,427,738
- ----------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $321,218,192) 359,358,250
- ----------------------------------------------------------------
FOREIGN COMMON STOCKS--2.2%
COMMUNICATIONS EQUIPMENT--0.2%
Nortel Networks Corp. (Canada)......... 20,800 854,100
FOODS--0.5%
Unilever NV NY Registered Shares
(Netherlands).......................... 28,900 1,990,487
GOLD & PRECIOUS METALS MINING--0.1%
Placer Dome, Inc. (Canada)............. 18,800 195,050
OIL (INTERNATIONAL INTEGRATED)--1.4%
BP Amoco PLC Sponsored ADR (United
Kingdom)............................... 5,500 616,688
Royal Dutch Petroleum Co. NY Registered
Shares (Netherlands)................... 71,600 4,430,250
------------
5,046,938
------------
- ----------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $7,360,954) 8,086,575
- ----------------------------------------------------------------
UNIT INVESTMENT TRUSTS--2.4%
S&P 500 Depository Receipts............ 68,900 9,099,106
- ----------------------------------------------------------------
TOTAL UNIT INVESTMENT TRUSTS
(IDENTIFIED COST $8,285,995) 9,099,106
- ----------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--99.7%
(IDENTIFIED COST $336,865,141) 376,543,931
- ----------------------------------------------------------------
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- ------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--0.1%
COMMERCIAL PAPER--0.1%
Koch Industries, Inc. 5.58%,
9/1/99............................ A-1+ 417 $ 417,000
- -------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $417,000) 417,000
- -------------------------------------------------------------------------
TOTAL INVESTMENTS--99.8%
(IDENTIFIED COST $337,282,141) 376,960,931(a)
Cash and receivables, less liabilities--0.2% 934,383
------------
NET ASSETS--100.0% $377,895,314
============
</TABLE>
<TABLE>
<S> <C>
(a) Federal Income Tax Information: Net unrealized appreciation
of investment securities is comprised of gross appreciation
of $50,734,281 and gross depreciation of $11,435,687 for
federal income tax purposes. At August 31, 1999, the
aggregate cost of securities for federal income tax purposes
was $337,662,337.
(b) Non-income producing.
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $337,282,141) $376,960,931
Receivables
Fund shares sold 2,673,326
Investment securities sold 1,313,295
Dividends and interest 516,936
Prepaid expenses 3,647
------------
Total assets 381,468,135
------------
LIABILITIES
Payables
Custodian 1,258
Investment securities purchased 2,826,340
Fund shares repurchased 286,471
Investment advisory fee 28,176
Distribution fee 184,324
Transfer agent fee 88,101
Financial agent fee 23,567
Trustees' fee 8,617
Accrued expenses 125,967
------------
Total liabilities 3,572,821
------------
NET ASSETS $377,895,314
============
NET ASSETS CONSIST OF:
Capital paid in on shares of
beneficial interest $333,040,276
Undistributed net investment income 285,388
Accumulated net realized gain 4,890,860
Net unrealized appreciation 39,678,790
------------
NET ASSETS $377,895,314
============
CLASS A
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $209,209,934) 14,321,273
Net asset value per share $14.61
Offering price per share
$14.61/(1-4.75%) $15.34
CLASS B
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $109,461,034) 7,586,927
Net asset value and offering price
per share $14.43
CLASS C
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $59,224,346) 4,103,625
Net asset value and offering price
per share $14.43
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 4,154,856
Interest 76,500
Foreign taxes withheld (30,385)
-----------
Total investment income 4,200,971
-----------
EXPENSES
Investment advisory fee 1,916,291
Distribution fee, Class A 367,258
Distribution fee, Class B 733,750
Distribution fee, Class C 352,004
Distribution fee, Class M 109
Financial agent fee 213,608
Transfer agent 396,480
Registration 81,996
Printing 45,241
Custodian 43,979
Professional 20,101
Trustees 16,574
Miscellaneous 19,351
-----------
Total expenses 4,206,742
Less expenses borne by investment adviser (286,857)
Custodian fees paid indirectly (1,202)
-----------
Net expenses 3,918,683
-----------
NET INVESTMENT INCOME 282,288
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 4,805,840
Net realized gain on written options 175,253
Net change in unrealized appreciation
(depreciation) on investments 56,853,081
-----------
NET GAIN ON INVESTMENTS 61,834,174
-----------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $62,116,462
===========
</TABLE>
20 See Notes to Financial Statements
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From
Year Inception
Ended 9/25/97 to
8/31/99 8/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 282,288 $ 149,153
Net realized gain (loss) 4,981,093 1,300,955
Net change in unrealized appreciation (depreciation) 56,853,081 (17,174,291)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS 62,116,462 (15,724,183)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (178,877) (42,177)
Net investment income, Class B -- (8,886)
Net investment income, Class C -- (2,045)
Net investment income, Class M -- (666)
Net realized gains, Class A (815,230) (28,476)
Net realized gains, Class B (384,053) (7,740)
Net realized gains, Class C (153,155) (1,972)
Net realized gains, Class M -- (562)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (1,531,315) (92,524)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (9,742,443 and 7,752,380
shares, respectively) 132,907,595 91,918,012
Net asset value of shares issued from reinvestment of
distributions (67,491 and 6,829 shares, respectively) 889,551 69,035
Cost of shares repurchased (2,786,606 and 461,264 shares,
respectively) (37,852,057) (5,511,853)
------------ ------------
Total 95,945,089 86,475,194
------------ ------------
CLASS B
Proceeds from sales of shares (5,216,234 and 3,273,232
shares, respectively) 70,319,755 38,849,933
Net asset value of shares issued from reinvestment of
distributions (25,028 and 1,596 shares, respectively) 327,525 16,121
Cost of shares repurchased (721,133 and 208,030 shares,
respectively) (9,785,374) (2,497,896)
------------ ------------
Total 60,861,906 36,368,158
------------ ------------
CLASS C
Proceeds from sales of shares (3,277,763 and 1,126,262
shares, respectively) 44,490,555 13,154,434
Net asset value of shares issued from reinvestment of
distributions (10,341 and 382 shares, respectively) 135,365 3,862
Cost of shares repurchased (252,075 and 59,048 shares,
respectively) (3,514,530) (700,659)
------------ ------------
Total 41,111,390 12,457,637
------------ ------------
CLASS M
Proceeds from sales of shares (0 and 52,446 shares,
respectively) -- 542,477
Net asset value of shares issued from reinvestment of
distributions (0 and 121 shares, respectively) -- 1,227
Cost of shares repurchased (11,751 and 40,816 shares,
respectively) (140,889) (495,315)
------------ ------------
Total (140,889) 48,389
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 197,777,496 135,349,378
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 258,362,643 119,532,671
NET ASSETS
Beginning of period 119,532,671 0
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) OF $285,388 AND $176,925, RESPECTIVELY] $377,895,314 $119,532,671
============ ============
</TABLE>
See Notes to Financial Statements 21
<PAGE>
Phoenix-Oakhurst Growth & Income Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------- ------------------------- -------------------------
FROM FROM FROM
YEAR INCEPTION YEAR INCEPTION YEAR INCEPTION
ENDED 9/25/97 TO ENDED 9/25/97 TO ENDED 9/25/97 TO
8/31/99 8/31/98 8/31/99 8/31/98 8/31/99 8/31/98
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 10.47 $ 10.00 $ 10.40 $ 10.00 $ 10.41 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS(1)
Net investment income (loss) 0.06(2)(3) 0.06(2)(3) (0.04)(2)(4) (0.02)(2)(4) (0.04)(2)(5) (0.02)(2)(5)
Net realized and unrealized
gain (loss) 4.19 0.48 4.16 0.48 4.15 0.49
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 4.25 0.54 4.12 0.46 4.11 0.47
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income (0.02) (0.04) -- (0.03) -- (0.03)
Dividends from net realized
gains (0.09) (0.03) (0.09) (0.03) (0.09) (0.03)
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (0.11) (0.07) (0.09) (0.06) (0.09) (0.06)
------- ------- ------- ------- ------- -------
Change in net asset value 4.14 0.47 4.03 0.40 4.02 0.41
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 14.61 $ 10.47 $ 14.43 $ 10.40 $ 14.43 $ 10.41
======= ======= ======= ======= ======= =======
Total return(6) 40.72% 5.39%(7) 39.72% 4.59%(7) 39.58% 4.67%(7)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $209,210 $76,399 $109,461 $31,902 $59,224 $11,108
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 1.22%(9) 1.25%(8) 1.96%(9) 2.00%(8) 1.96%(9) 2.00%(8)
Net investment income (loss) 0.43% 0.57%(8) (0.32)% (0.19)%(8) (0.33)% (0.18)%(8)
Portfolio turnover 71% 106%(7) 71% 106%(7) 71% 106%(7)
</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 $0.01
and $0.07, respectively.
(4) Includes reimbursement of operating expenses by investment adviser of $0.01
and $0.07, respectively.
(5) Includes reimbursement of operating expenses by investment adviser of $0.01
and $0.07, respectively.
(6) Maximum sales charges are not reflected in the total return calculation.
(7) Not annualized.
(8) Annualized.
(9) For the year ended August 31,1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
22 See Notes to Financial Statements
<PAGE>
PHOENIX EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
The Phoenix Equity Series Fund (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company whose shares
are offered in two separate Series, each a "Fund". Each Fund has distinct
investment objectives.
Phoenix-Duff & Phelps Core Equity Fund seeks long-term capital appreciation by
investing in a diversified portfolio of common stocks. Phoenix-Oakhurst
Growth & Income Fund seeks dividend growth, current income and capital
appreciation by investing in common stocks.
Each Fund offers Class A, Class B and Class C shares. Class M shares have been
closed. Class A shares are sold with a front-end sales charge of up to 4.75%.
Class B shares are sold with a contingent deferred sales charge which declines
from 5% to zero depending on the period of time the shares are held. Class C
shares are sold with a 1% contingent deferred sales charge if redeemed within
one year of purchase. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that each
class bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. Income and expenses of each Fund are borne pro
rata by the holders of all classes of shares, except that each class bears
distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities in determining value. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at fair value as determined
in good faith by or under the direction of the Trustees.
B. SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date or, in the case of certain foreign securities, as soon as the Fund is
notified. The Trust does not amortize premiums but does accrete discounts using
the effective interest method. Realized gains and losses are determined on the
identified cost basis.
C. INCOME TAXES:
Each Fund is treated as a separate taxable entity. It is the policy of each
Fund in the Trust to comply with the requirements of the Internal Revenue Code
(the "Code"), applicable to regulated investment companies, and to distribute
all of its taxable income to its shareholders. In addition, each Fund intends to
distribute an amount sufficient to avoid imposition of any excise tax under
Section 4982 of the Code. Therefore, no provision for federal income taxes or
excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, foreign
currency gain/loss, partnerships, operating losses and losses deferred due to
wash sales and excise tax regulations. Permanent book and tax basis differences
relating to shareholder distributions will result in reclassifications to paid
in capital.
E. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Trust does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
F. FORWARD CURRENCY CONTRACTS:
Each Fund may enter into forward currency contracts in conjunction with the
planned purchase or sale of foreign denominated securities in order to hedge the
U.S. dollar cost or proceeds. Forward currency contracts involve, to varying
degrees, elements of market risk in excess of the amount recognized in the
statement of assets and
23
<PAGE>
PHOENIX EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999 (CONTINUED)
liabilities. Risks arise from the possible movements in foreign exchange rates
or if the counterparty does not perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in market
value is recorded by each Fund as an unrealized gain (or loss). When the
contract is closed or offset with the same counterparty, the Fund records a
realized gain (or loss) equal to the change in the value of the contract when it
was opened and the value at the time it was closed or offset.
G. OPTIONS:
Each Fund may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.
Each Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked-to-market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
Each Fund may purchase options which are included in the Funds' Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
H. EXPENSES:
Expenses incurred by the Trust with respect to more than one Fund are
allocated in proportion to the net assets of each Fund, except where allocation
of direct expense to each Fund or an alternative allocation method can be more
fairly made.
I. REPURCHASE AGREEMENTS:
A repurchase agreement is a transaction where a Fund acquires a security for
cash and obtains a simultaneous commitment from the seller to repurchase the
security at an agreed upon price and date. Each Fund, through its custodian,
takes possession of securities collateralizing the repurchase agreement. The
collateral is marked-to-market daily to ensure that the market value of the
underlying assets remains sufficient to protect the Fund in the event of default
by the seller. If the seller defaults and the value of the collateral declines,
or, if the seller enters insolvency proceedings, realization of collateral may
be delayed or limited.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
The advisers to the Trust are Duff & Phelps Investment Management Co. ("DPIM")
and Phoenix Investment Counsel, Inc. ("PIC"). DPIM is a subsidiary of Phoenix
Investment Partners Ltd., which is an indirect, majority-owned subsidiary of
Phoenix Home Life Mutual Insurance Company ("PHL"). PIC is an indirect,
majority-owned subsidiary of PHL. As compensation for their services to the
Trust, the Advisers are entitled to a fee based upon the following annual rates
as a percentage of the average daily net assets of each separate Fund:
<TABLE>
<CAPTION>
1st $1-2 $2+
Fund Adviser $1 Billion Billion Billion
- ---- -------- ---------- -------- --------
<S> <C> <C> <C> <C>
Core Equity Fund.......... DPIM 0.75% 0.70% 0.65%
Growth & Income Fund...... PIC 0.75% 0.70% 0.65%
</TABLE>
The Advisers have voluntarily agreed to assume total fund operating expenses
of each respective Fund, excluding interest, taxes, brokerage fees, commissions
and extraordinary expenses until December 31, 1999, to the extent that such
expenses exceed the following percentages of average annual net assets:
<TABLE>
<CAPTION>
Class A Class B Class C
- ------- -------- --------
<S> <C> <C>
1.25% 2.00% 2.00%
</TABLE>
Phoenix Equity Planning Corporation ("PEPCO"), an indirect, majority-owned
subsidiary of PHL, serves as the national distributor of the Trust's shares.
PEPCO has advised the Trust that it retained net selling commissions of $127,483
for Class A shares, and deferred sales charges of $163,057 for Class B shares
and $18,624 for Class C shares for the year ended August 31, 1999. In addition,
each Fund pays PEPCO a distribution fee at an annual rate of 0.25% for Class A
shares, 1.00% for Class B shares and 1.00% for Class C shares applied to the
average daily net assets of the Fund. The Distributor has advised the Trust that
of the total amount expensed for the year ended August 31, 1999, $1,233,624 was
retained by the Distributor, $374,105 was paid to unaffiliated participants, and
$62,357 was paid to W.S. Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Trust, PEPCO receives a financial agent fee equal to
the sum of (1) the documented cost of fund accounting
24
<PAGE>
PHOENIX EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999 (CONTINUED)
and related services provided by PFPC Inc. (subagent to PEPCO), plus (2) the
documented cost to PEPCO to provide financial reporting, tax services and
oversight of the subagent's performance. The current fee schedule of PFPC Inc.
ranges from 0.085% to 0.0125% of the average daily net asset values of each
Fund. Certain minimum fees and fee waivers may apply.
PEPCO serves as the Trust's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the year ended August 31, 1999, transfer
agent fees were $439,244 of which PEPCO retained $144,295 which is net of the
fees paid to State Street.
At August 31, 1999, PHL and affiliates held Trust shares which aggregated the
following:
<TABLE>
<CAPTION>
Aggregate Net
Shares Asset Value
--------- -------------
<S> <C> <C>
Core Equity Fund-Class A............ 1,467,238 $18,149,738
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended August 31, 1999
(excluding U.S. Government and agency securities and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
Core Equity Fund.................... $ 51,539,127 $ 40,584,750
Growth & Income Fund................ 375,755,149 178,955,663
</TABLE>
There were no purchases or sales of long-term U.S. Government and agency
securities during the year ended August 31, 1999.
Written option activity for the year ended August 31, 1999, for Growth &
Income Fund aggregated the following:
<TABLE>
<CAPTION>
Call Options
---------------------
Number of Amount of
Options Premium
--------- ---------
<S> <C> <C>
Options outstanding at August 31,
1998................................ -- $ --
Options written....................... 1,687 277,026
Options canceled in closing purchase
transactions........................ (345) (42,932)
Options expired....................... (872) (169,656)
Options exercised..................... (470) (64,438)
----- ---------
Options outstanding at August 31,
1999................................ -- $ --
===== =========
</TABLE>
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a Fund's ability to
repatriate such amounts.
5. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Funds have recorded
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of each of the series and are designed generally
to present undistributed income and realized gains on a tax basis which is
considered to be more informative to the shareholder. As of August 31, 1999,
each Fund recorded the following reclassifications to increase (decrease) the
accounts listed below:
<TABLE>
<CAPTION>
Capital paid
Undistributed Accumulated in on shares
net investment net realized of beneficial
income gain (loss) interest
-------------- ------------ -------------
<S> <C> <C> <C>
Core Equity Fund..... $48,463 $(57,754) $9,291
Growth & Income
Fund............... 5,052 -- (5,052)
</TABLE>
This report is not authorized for distribution to prospective investors in the
Phoenix Equity Series Fund unless preceded or accompanied by an effecive
Prospectus which includes information concerning the sales charge, the Fund's
record and other pertinent information.
25
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Trustees and Shareholders of
Phoenix Equity Series Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments (except for bond ratings), and the
related statements of operations and of changes in net assets, and the financial
highlights present fairly, in all material respects, the financial position of
the Phoenix-Duff & Phelps Core Equity Fund and the Phoenix-Oakhurst Growth &
Income Fund (constituting the Phoenix Equity Series Fund, hereinafter referred
to as the "Fund") at August 31, 1999, the results of each of their operations,
the changes in each of their net assets and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
August 31, 1999 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
October 8, 1999
26
<PAGE>
PHOENIX EQUITY SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
TRUSTEES
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
John F. Sharry, Executive Vice President
Steven L. Colton, Vice President
Robert S. Driessen, Vice President
William R. Moyer, Vice President
Diane L. Mustain, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Clerk and Secretary
INVESTMENT ADVISERS
Duff & Phelps Investment Management Co.
(Phoenix-Duff & Phelps Core Equity Fund)
55 East Monroe Street
Suite 3800
Chicago, Illinois 60603
Phoenix Investment Counsel, Inc.
(Phoenix-Oakhurst Growth & Income Fund)
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
<TABLE>
<S> <C>
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574
(option 0)
Investment Strategy Hotline 1-800-243-4361
(option 2)
Marketing Department 1-800-243-4361
(option 3)
Text Telephone 1-800-243-1926
</TABLE>
World Wide Web address:
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION PRSRT STD
PO Box 2200 U.S. Postage
Enfield CT 06083-2200 P A I D
Springfield, MA
Permit No. 444
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 213 (10/99)
