As filed with the Securities and Exchange Commission on December 30, 1998
Registration No. 333-34537
File No. 811-08343
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM N-1A
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933
[X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 3 [X]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 4 [X]
(Check appropriate box or boxes)
-------------
Phoenix Investment Trust 97
(Exact Name of Registrant as Specified in Charter)
-------------
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices) (Zip Code)
(800) 243-1574
(Registrant's Telephone Number, including Area Code)
-------------
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)
-------------
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on December 31, 1998 pursuant to paragraph (b)
[ ] 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.
================================================================================
<PAGE>
PHOENIX INVESTMENT TRUST 97
Cross Reference Sheet Pursuant to Rule 404
PART A
<TABLE>
<CAPTION>
Item Number Form N-1A, Part A Prospectus Caption
- --------------------------------------------------------------- -------------------------------------------------------
<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
PART B
Item Number Form N-1A, Part B Statement of Additional Information Caption
- --------------------------------------------------------------- -------------------------------------------------------
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
Prospectus
December 31, 1998
Hollister(sm)
Phoenix-Hollister
Value Equity Fund
Phoenix-Hollister
Small Cap Value Fund
Phoenix-Hollister Value Equity Fund and
Phoenix-Hollister Small Cap Value Fund
are mutual fund that mainly invests in
common stocks of U.S. and foreign
companies with the investment
objective of capital appreciation.
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-Hollister
Value Equity Fund and Phoenix-Hollister
Small Cap Value Fund that you should
know before investing. Please read it
carefully and retain it for future
reference.
<PAGE>
Table of Contents
- -----------------------------------------
<TABLE>
<S> <C>
Phoenix-Hollister Small Cap Value Fund
Investment Risk and Return Summary ............. page 1
Fund Expenses .................................. page 3
Investment Strategies .......................... page 4
Risks Related to Investment Strategies ......... page 6
Management of the Fund ......................... page 9
Phoenix-Hollister Value Equity Fund
Investment Risk and Return Summary ............. page 10
Fund Expenses .................................. page 12
Investment Strategies .......................... page 13
Risks Related to Investment Strategies ......... page 15
Management of the Funds ......................... page 19
Pricing of Fund Shares .......................... page 20
Sales Charges ................................... page 21
Your Account .................................... page 24
How to Buy Shares ............................... page 25
How to Sell Shares .............................. page 26
Things You Should Know When Selling
Shares .......................................... page 26
Account Policies ................................ page 28
Investor Services ............................... page 29
Tax Status of Distributions ..................... page 29
Financial Highlights ............................ page 30
Additional Information .......................... page 32
</TABLE>
<PAGE>
Phoenix-Hollister Small Cap Value Fund
Investment Risk and Return Summary
- -----------------------------------------------------------------
Investment Objective
Phoenix-Hollister Small Cap Value Fund has an investment
objective to seek long-term capital appreciation. There is no
guarantee that the fund will achieve the objective.
Principal Investment Strategies
[arrow] The fund will invest primarily in common stocks and
securities convertible into common stocks issued by
companies with market capitalizations of between $100
million and $1 billion. Under normal circumstances the
fund will invest at least 65% of its total assets in
securities of issuers with market capitalizations of less
than $1 billion.
[arrow] The fund's adviser uses a quantitative value strategy
that chooses stocks that meet certain criteria relating
to price, dividend yield and the going concern value and
debt levels of the issuers. For the few hundred of the
approximately 5,000 that survive this screening the
adviser projects growth in earnings and dividends,
earnings momentum and relative undervaluation based on a
dividend discount model. The adviser develops target
prices and value ranges, and purchases the top-rated
stocks. With certain exceptions the adviser sells when a
stock's target price is reached, when the issuer or its
industry suffer negative changes or when there is a
change in the investment criteria that prompted the
initial purchase.
[arrow] The fund may invest in convertible securities.
Convertible securities investments will be limited to
those in one of the four highest rating categories of
convertible securities. These are commonly called
"investment grade".
[arrow] The fund may obtain fixed interest loans from a bank in
amounts up to one-third the value of its net assets and
invest the loan proceeds in other assets.
[arrow] The fund may engage in "securities lending" to increase
its investment returns.
[arrow] The fund may invest up to 30% of its assets in securities
of foreign (non-U.S.) issuers.
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
and to provide current income. Most of the fund's investments
will be in common stocks. 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. Dividend, interest and other
distributions can also decrease or be eliminated entirely.
Phoenix-Hollister Small Cap Value Fund 1
<PAGE>
This fund will invest primarily in securities issued by small
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 borrow money to purchase additional securities. If
the additional securities increase in value the net asset value
of the fund more quickly than would occur without borrowing. If
these securities decrease in value or do not increase enough to
cover interest and other borrowing costs the fund will suffer
greater losses than it would if no borrowing took place.
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.
Performance Tables
Performance Tables are not included for the Phoenix-Hollister
Small Cap Value Fund because the fund has not had annual returns
for at least one calendar year.
2 Phoenix-Hollister Small Cap Value Fund
<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%(b)
percentage of the lesser of the value 1% during the
redeemed or the amount invested) first 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 0.90% 0.90% 0.90%
Distribution and Service (12b-1) Fees (c) 0.25% 1.00% 1.00%
Other Expenses 1.97% 1.97% 1.97%
--------- ------------ -----------------
Total Annual Fund Operating Expenses (a) 3.12% 3.87% 3.87%
========= ============ =================
</TABLE>
----------------
(a) The fund's investment adviser has agreed to reimburse through
December 31, 1999 the Phoenix-Hollister Small Cap Value
Fund's expenses other than Management Fees and Distribution
and Service Fees to the extent that such expenses exceed
0.25% for each Class of Shares.
Actual Total Annual Fund Operating Expenses
after expense reimbursement are: 1.40% 2.15% 2.15%
(b) The maximum deferred sales charge is imposed on Class B
Shares redeemed during the first year; thereafter, it
decreases 1% annually to 2% during the fourth and fifth years
and to 0% after the fifth year.
(c) 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-Hollister Small Cap Value Fund 3
<PAGE>
<TABLE>
<CAPTION>
Class 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Class A $775 $1,392 $2,032 $3,742
Class B 789 1,381 1,990 3,935
Class C 489 1,181 1,990 4,096
</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 $775 $1,392 $2,032 $3,742
Class B 389 1,181 1,990 3,935
Class C 389 1,181 1,990 4,096
</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
Phoenix Small Cap Value Fund has an investment objective to seek
long-term capital appreciation. There is no guarantee that the
fund will achieve the objective.
Principal Investment Strategies
The fund invests in a diversified portfolio of common stocks and
securities convertible into common stocks of primarily domestic
(U.S.) companies with market capitalizations of between $100
million and $1 billion. Generally the fund will invest in
securities traded on the New York Stock Exchange, the American
Stock Exchange and in over-the-counter markets. The fund is
designed to invest in common stocks that meet the adviser's
quantitative standards that indicate above average financial
soundness and intrinsic value relative to price. Under normal
circumstances the fund will invest at least 65% of its total
assets in securities of issuers with capitalizations less than
$1 billion at the time of investment.
The adviser applies a security selection process that chooses
stocks that meet certain investment criteria relating to price,
dividend yield, going concern value and debt levels. The adviser
considers approximately 5,000 companies, but only a few hundred
meet one or more of the
4 Phoenix-Hollister Small Cap Value Fund
<PAGE>
adviser's criteria for selection. For those that do the adviser
projects growth in earnings and dividends, earnings momentum and
undervaluation based on a dividend discount model. From this
analysis the adviser develops target prices and value ranges and
selects the top-rated securities for purchase. 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. Generally the adviser sells a fund security when
its target price is reached, when the company or its industry
suffers negative changes, or when there is a significant change
in the investment criteria that prompted the adviser to purchase
the security. The adviser may choose to continue to hold a
security that it believes suitable for the fund's objectives
even if it no longer meets these criteria.
The fund may also invest in convertible securities. A
convertible security is a bond, debenture, note, preferred stock
or other security that may be converted into or exchanged for a
prescribed amount of common stock of the issuer at predetermined
time(s), price(s) or price formula. A convertible security
entitles the owner to receive interest paid or accrued on a debt
security or dividends paid on preferred stock until the security
matures or is converted to common stock. Convertible securities
have several unique investments characteristics, such as
o Higher yields than common stocks but lower yields than
comparable nonconvertible securities
o Typically less fluctuation in value than the "underlying"
common stock, that is, the common stock that the investor
receives if he converts
o 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 increase ownership of securities by borrowing from
banks at fixed interest rates and investing the proceeds in
stocks or other investments that are consistent with these
investment techniques. Purchasing additional securities with
borrowed funds can increase the net asset value of the fund more
quickly. Total borrowing cannot exceed 33% of the fund's net
assets, which means that after any borrowing the value of the
fund's assets (including the amount borrowed) must be at least
three times the total amount borrowed for investment purposes.
If the value of the fund's assets decreases so that the ratio
becomes less than three to one, the fund must reduce its
outstanding loan within three business days to bring the ratio
back to three to one.
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
Phoenix-Hollister Small Cap Value Fund 5
<PAGE>
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 30% of its total assets in securities
of foreign (non-U.S.) issuers.
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 U.S. government
securities and in money market instruments. When this happens
the fund may not achieve its 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 primary focus is long-term capital appreciation. The
adviser intends to invest fund assets so that your shares
increase in value and so that your shares earn current income
through dividends, interest or other current distributions.
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 general economic trends, industry trends, interest
rates and other economic factors. When companies owned by the
fund encounter negative conditions they may be unable to
continue to pay dividends or interest at expected levels.
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 will concentrate its investments in 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
6 Phoenix-Hollister Small Cap Value Fund
<PAGE>
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 illiquid (difficult to sell).
Leverage
If the fund borrows money to make additional investments it must
pay interest on the borrowed funds. The interest paid will
decrease the fund's net investment income. The adviser may
borrow funds to make additional investments expecting that those
investments will increase in value sufficient to cover borrowing
costs and produce additional gain for the fund. If those
investments decrease in value or do not increase in value
sufficient to cover borrowing costs the fund will suffer greater
losses than would take place if no borrowing took place. In
addition, because the fund must maintain a three to one ratio of
net assets to debt, in a declining market it may have to sell
securities under poor market conditions to maintain the required
ratio.
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.
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:
o differences in accounting, auditing and financial reporting
standards,
o generally higher commission rates on foreign portfolio
transactions,
o differences and inefficiencies in transaction settlement
systems,
o the possibility of expropriation or confiscatory taxation,
o adverse changes in investment or exchange control regulations,
o political instability, and
o 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.
Phoenix-Hollister Small Cap Value Fund 7
<PAGE>
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.
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:
o 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;
o 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;
o 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);
o currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as certain
interest rate indices); and
o potential tax consequences.
The adviser does not expect to invest in any securities that may
be adversely effected by the conversion to the Euro.
8 Phoenix-Hollister Small Cap Value Fund
<PAGE>
Impact of the Year 2000 Issue on Fund Investments
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
- ------------------------------------------
Please refer to "Management of the Funds" on page 19 for a
description of the adviser, management fees and the portfolio
manager.
Phoenix-Hollister Small Cap Value Fund 9
<PAGE>
Phoenix-Hollister Value Equity Fund
Investment Risk and Return Summary
- -----------------------------------------------------------------
Investment Objectives
Phoenix-Hollister Value Equity Fund has a primary investment
objective to seek long-term capital appreciation. The fund has a
secondary investment objective to seek current income. There is
no guarantee that the fund will achieve either objective.
Principal Investment Strategies
[arrow] The fund will invest primarily in common stocks. Under
normal circumstances the fund will invest at least 65% of
its total assets in common stocks.
[arrow] The fund's adviser uses a quantitative value strategy
that choose stocks that meet certain criteria relating to
price, dividend yield and the going concern value and
debt levels of the issuers. For the few hundred of the
approximately 2,500 that survive this screening the
adviser projects growth in earnings and dividends,
earnings momentum and relative undervaluation based on a
dividend discount model. The adviser develops target
prices and value ranges, and purchases the top-rated
stocks. With certain exceptions the adviser sells when a
stock's target price is reached, when the issuer or its
industry suffer negative changes or when there is a
change in the investment criteria that prompted the
initial purchase.
[arrow] The fund may invest in convertible securities.
Convertible securities investments will be limited to
those in one of the four highest rating categories of
convertible securities. These are commonly called
"investment grade".
[arrow] The fund may obtain fixed interest loans from a bank in
amounts up to one-third the value of its net assets and
invest the loan proceeds in other assets.
[arrow] The fund may engage in "securities lending" to increase
its investment returns.
[arrow] The fund may invest up to 30% of its assets in securities
of foreign (non-U.S.) issuers.
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
and to provide current income. Most of the fund's investments
will be in common stocks. 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. Dividend, interest and other
distributions can also decrease or be eliminated entirely.
10 Phoenix-Hollister Value Equity Fund
<PAGE>
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 borrow money to purchase additional securities. If
the additional securities increase in value the net asset value
of the fund more quickly than would occur without borrowing. If
these securities decrease in value of do not increase enough to
cover interest and other borrowing costs the fund will suffer
greater losses than it would if no borrowing took place.
This fund may invest in financial futures contracts and options.
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.
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.
Performance Tables
Performance tables are not included for the Phoenix-Hollister
Value Equity Fund because the fund has not had annual returns
for at least one calendar year.
Phoenix-Hollister Value Equity Fund 11
<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 percentage None 5%(b) 1% during the
of the lesser of the value redeemed or the amount invested) first 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 (b) 1.96% 1.96% 1.96%
--------- ------------ -----------------
Total Annual Fund Operating Expenses (a) 2.96% 3.71% 3.71%
========= ============ =================
</TABLE>
----------------
(a) The fund's investment adviser has agreed to reimburse through
December 31, 1999 the Phoenix-Hollister Value Equity Fund's
expenses other than Management Fees and Distribution and
Service Fees to the extent that such expenses exceed 0.25% for
each Class of Shares.
Actual Total Annual Fund Operating Expenses
after expense reimbursement are: 1.25% 2.00% 2.00%
(b) The maximum deferred sales charge is imposed on Class B Shares
redeemed during the first year; thereafter, it decreases 1%
annually to 2% during the fourth and fifth years and to 0%
after the fifth year.
(c) 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:
12 Phoenix-Hollister Value Equity Fund
<PAGE>
<TABLE>
<CAPTION>
Class 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Class A $760 $1,347 $1,958 $3,599
Class B 773 1,335 1,916 3,795
Class C 473 1,135 1,916 3,958
</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 $760 $1,347 $1,958 $3,599
Class B 373 1,135 1,916 3,795
Class C 373 1,135 1,916 3,958
</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 Objectives
The fund has a primary investment objective to seek long-term
capital appreciation. The fund has a secondary investment
objective to seek current income. There is no guarantee that the
fund will achieve either objective.
Principal Investment Strategies
The fund invests in a diversified portfolio of securities of
primarily domestic (U.S.) companies. Generally the fund will
invest in securities traded on the New York Stock Exchange, the
American Stock Exchange and in over-the-counter markets. The
fund is designed to invest in common stocks that meet the
adviser's quantitative standards that indicate above average
financial soundness and intrinsic value relative to price. Under
normal circumstances the fund will invest at least 65% of its
total assets in common stocks.
The adviser applies a security selection process that chooses
stocks that meet certain investment criteria relating to price,
dividend yield, going concern value and debt levels. The adviser
considers approximately 2,500 companies, but only a few hundred
meet one or more of the adviser's criteria for selection. For
those that do the adviser projects growth in earnings and
Phoenix-Hollister Value Equity Fund 13
<PAGE>
dividends, earnings momentum and undervaluation based on a
dividend discount model. From this analysis the adviser develops
target prices and value ranges and selects the top-rated
securities for purchase. 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. Generally
the adviser sells a fund security when its target price is
reached, when the company or its industry suffers negative
changes, or when there is a significant change in the investment
criteria that prompted the adviser to purchase the security. The
adviser may choose to continue to hold a security that it
believes suitable for the fund's objectives even if it no longer
meets these criteria.
The fund may also invest in convertible securities. A
convertible security is a bond, debenture, note, preferred stock
or other security that may be converted into or exchanged for a
prescribed amount of common stock of the issuer at predetermined
time(s), price(s) or price formula. A convertible security
entitles the owner to receive interest paid or accrued on a debt
security or dividends paid on preferred stock until the security
matures or is converted to common stock. Convertible securities
have several unique investments characteristics, such as
o Higher yields than common stocks but lower yields than
comparable nonconvertible securities
o Typically less fluctuation in value than the "underlying"
common stock, that is, the common stock that the investor
receives if he converts
o 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 increase ownership of securities by borrowing from
banks at fixed interest rates and investing the proceeds in
stocks or other investments that are consistent with these
investment techniques. Purchasing additional securities with
borrowed funds can increase the net asset value of the fund more
quickly. Total borrowing cannot exceed 33% of the fund's net
assets, which means that after any borrowing the value of the
fund's assets (including the amount borrowed) must be at least
three times the total amount borrowed for investment purposes.
If the value of the fund's assets decreases so that the ratio
becomes less than three to one, the fund must reduce its
outstanding loan within three business days to bring the ratio
back to three to one.
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.
14 Phoenix-Hollister Value Equity Fund
<PAGE>
The fund may invest up to 30% of its total assets in securities
of foreign (non-U.S.) issuers.
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 U.S. government
securities and in money market instruments. When this happens
the fund may not achieve its 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 primary focus is long-term capital appreciation. Its
secondary objective is current income. The adviser intends to
invest fund assets so that your shares increase in value and so
that your shares earn current income through dividends, interest
or other current distributions. 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 general economic trends,
industry trends, interest rates and other economic factors. When
companies owned by the fund encounter negative conditions they
may be unable to continue to pay dividends or interest at
expected levels.
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
Phoenix-Hollister Value Equity Fund 15
<PAGE>
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.
Leverage
If the fund borrows money to make additional investments it must
pay interest on the borrowed funds. The interest paid will
decrease the fund's net investment income. The adviser may
borrow funds to make additional investments expecting that those
investments will increase in value sufficient to cover borrowing
costs and produce additional gain for the fund. If those
investments decrease in value or do not increase in value
sufficient to cover borrowing costs the fund will suffer greater
losses than would take place if no borrowing took place. In
addition, because the fund must maintain a three to one ratio of
net assets to debt, in a declining market it may have to sell
securities under poor market conditions to maintain the required
ratio.
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.
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:
o differences in accounting, auditing and financial reporting
standards,
o generally higher commission rates on foreign portfolio
transactions,
o differences and inefficiencies in transaction settlement
systems,
o the possibility of expropriation or confiscatory taxation,
o adverse changes in investment or exchange control regulations,
o political instability, and
o 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.
16 Phoenix-Hollister Value Equity Fund
<PAGE>
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.
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:
o 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;
o 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;
o 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);
o currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as certain
interest rate indices); and
o 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-Hollister Value Equity Fund 17
<PAGE>
Impact of the Year 2000 Issue on Fund Investments
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.
18 Phoenix-Hollister Value Equity Fund
<PAGE>
Management of The Funds
- -----------------------------------------------------
The Adviser
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment
adviser to the funds 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 additional
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 each fund's investment
program and the day-to-day management of each fund's portfolio.
Phoenix manages each fund's assets to conform with the
investment policies as described in this prospectus. Each 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>
Phoenix-Hollister Small Cap Value Fund 0.90% 0.85% 0.80%
Phoenix-Hollister Value Equity Fund 0.75% 0.70% 0.65%
</TABLE>
Phoenix has voluntarily agreed to assume total fund operating
expenses of each 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 the average annual net asset values for each
fund:
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
<S> <C> <C> <C>
Phoenix-Hollister Small Cap Value Fund 1.40% 2.15% 2.15%
Phoenix-Hollister Value Equity Fund 1.25 2.00 2.00
</TABLE>
During the fund's last fiscal year, the funds paid total
management fees of $269,984. The ratio of management fees to
average net assets for the fiscal year ended August 31, 1998,
for Phoenix-Hollister Small Cap Value Fund was 0.90% and for
Phoenix-Hollister Value Equity Fund was 0.75%. The total
advisory fees as listed in the table above are greater than that
for most mutual funds; however, the Trustees have determined
that they are comparable to fees charged by other mutual funds
whose investment objectives are similar to those of the funds.
Portfolio Management
Mr. Christian C. Bertelsen serves as Portfolio Manager of both
the Phoenix-Hollister Small Cap Value Fund and Phoenix-Hollister
Value Equity Fund, and as such is primarily responsible for the
day to day management of the funds' investments. Mr. Bertelsen
joined Phoenix Investment Counsel, Inc. in July 1997.
Previously, from 1996 to July 1997, Mr. Bertelsen was
Phoenix Investment Trust 97 19
<PAGE>
employed by Dreman Value Advisors where he served as chief
investment officer and portfolio manager of the Kemper-Dreman
Contrarian and Small Cap Value Funds. From 1993 to 1996, Mr.
Bertelsen was a Senior Vice President of Eagle Asset Management
where he managed private and institutional assets, as well as
the Heritage Value Equity Fund.
Impact of the Year 2000 Issue on Fund Operations
The Trustees have directed management to ensure that the systems
used by service providers (Phoenix and its 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 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 timely completed.
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:
o adding the values of all securities and other assets of the
fund,
o subtracting liabilities, and
o 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
20 Phoenix Investment Trust 97
<PAGE>
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.
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, except where an
alternative allocation can be more fairly made.
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. The 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
chrge permitted by the National Association of Securities
Dealers, Inc. ("NASD").
Phoenix Investment Trust 97 21
<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.
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").
22 Phoenix Investment Trust 97
<PAGE>
Sales Charge you may pay to purchase Class A Shares
<TABLE>
<CAPTION>
Sales Charge as
a percentage of
---------------------------
<S> <C> <C>
Amount of Net
Transaction Offering Amount
at Offering Price Price Invested
- --------------------------------- ------ ------
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
Year 1 2 3 4 5 6+
----------------------------------------------------------------
CDSC 5% 4% 3% 2% 2% 0%
Deferred Sales charge you may pay to sell Class C Shares
Year 1 2+
----------------------------------------------------------------
CDSC 1% 0%
Phoenix Investment Trust 97 23
<PAGE>
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:
[arrow] $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).
[arrow] 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.
[arrow] $500 for all other accounts.
Minimum additional investments:
[arrow] $25 for any account.
[arrow] 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.
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.
24 Phoenix Investment Trust 97
<PAGE>
Step 3.
Your next choice will be how you want to receive any dividends
and capital gain distributions. Your options are:
[arrow] Receive both dividends and capital gain distributions in
additional shares
[arrow] Receive dividends in cash and capital gain distributions
in additional shares
[arrow] 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.
Through the mail Complete a New Account Application and send it with a check
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).
By Investo-Matic Complete the appropriate section on the application and send it
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 Investment Trust 97 25
<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>
<CAPTION>
To Sell Shares
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
Through the mail Send a letter of instruction and any share certificates (if you
hold certificate shares) to: State Street Bank, P.O. Box 8301,
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.
By telephone For sales up to $50,000, requests can be made by calling
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
- ------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax
purposes) if you redeem shares of the fund. 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.
26 Phoenix Investment Trust 97
<PAGE>
Redemptions by Mail
[arrow] 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.
[arrow] 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 (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.
During times of drastic economic or market changes, telephone
redemptions may be difficult to make or temporarily suspended.
Phoenix Investment Trust 97 27
<PAGE>
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 or greater than
the minimum initial investment required.
o The exchange of shares is treated as a sale and purchase for
federal income tax purposes.
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.
28 Phoenix Investment Trust 97
<PAGE>
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 (800) 243-4361.
Investor Services
- ---------------------------------
Investo-Matic 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 Exchange allows you to automatically move money from
one Phoenix Fund to another on a monthly, quarterly, semiannual
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 Exchange 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.
Systematic Withdrawal Program 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
gain distributions, are taxable to shareholders as long-term
capital gain distributions regardless of the length of time you
have owned your shares.
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.
Phoenix Investment Trust 97 29
<PAGE>
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, which is
available upon request.
Phoenix-Hollister Small Cap Value Fund
<TABLE>
<CAPTION>
Class A Class B Class C
---------------------- ---------------------- ----------------------
From Inception From Inception From Inception
11/20/97 to 11/20/97 to 11/20/97 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
Net investment income (loss) (0.01)(4)(5) (0.08)(4)(5) (0.08)(4)(5)
Net realized and unrealized gain (loss) (1.85) (1.82) (1.82)
---------- ---------- ----------
Total from investment operations (1.86) (1.90) (1.90)
---------- ---------- ----------
Less distributions
Dividends from net investment income -- -- --
In excess of net investment income (0.03) (0.03) (0.03)
---------- ---------- ----------
Total distributions (0.03) (0.03) (0.03)
---------- ---------- ----------
Change in net asset value (1.89) (1.93) (1.93)
---------- ---------- ----------
Net asset value, end of period $ 8.11 $ 8.07 $ 8.07
========== ========== ==========
Total return(1) (18.64)%(3) (19.07)%(3) (19.09)%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 14,519 $ 5,922 $ 2,770
Ratio to average net assets of:
Operating expenses 1.40%(2) 2.15%(2) 2.15%(2)
Net investment income (loss) (0.14)%(2) (1.01)%(2) (0.98)%(2)
Portfolio turnover 105%(3) 105%(3) 105%(3)
</TABLE>
----------------
(1) Maximum sales charges are not reflected in the total return
calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by investment
adviser of $0.14, $0.14 and $0.14, respectively.
30 Phoenix Investment Trust 97
<PAGE>
Financial Highlights (continued)
- -------------------------------------------------------
Phoenix-Hollister Value Equity Fund
<TABLE>
<CAPTION>
Class A Class B Class C
---------------------- ---------------------- ----------------------
From Inception From Inception From Inception
11/5/97 to 11/5/97 to 11/5/97 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
Net investment income (loss) 0.03 (4)(5) (0.04)(4)(5) (0.04)(4)(5)
Net realized and unrealized gain (loss) (1.07) (1.05) (1.05)
------------- ---------- ----------
Total from investment operations (1.04) (1.09) (1.09)
------------- ---------- ----------
Less distributions
Dividends from net investment income (0.01) (0.01) (0.01)
In excess of net investment income (0.01) (0.01) (0.01)
------------- ---------- ----------
Total distributions (0.02) (0.02) (0.02)
------------- ---------- ----------
Change in net asset value (1.06) (1.11) (1.11)
------------- ---------- ----------
Net asset value, end of period $ 8.94 $ 8.89 $ 8.89
============= ========== ==========
Total return(1) (10.28)%(3) (10.92)%(3) (10.86)%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 19,766 $ 5,291 $ 2,005
Ratio to average net assets of:
Operating expenses 1.25%(2) 2.00%(2) 2.00%(2)
Net investment income (loss) 0.31%(2) (0.45)%(2) (0.45)%(2)
Portfolio turnover 59%(3) 59%(3) 59%(3)
</TABLE>
----------------
(1) Maximum sales charges are not reflected in the total return
calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by investment
adviser of $0.15, $0.15 and $0.15, respectively.
Phoenix Investment Trust 97 31
<PAGE>
Additional Information
- -------------------------------------------------
Statement of Additional Information
The fund has filed a Statement of Additional Information about the fund,
dated December 31, 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:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright
Meadow Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and
Exchange Commission:
[arrow] through its internet site (http://www.sec.gov),
[arrow] by visiting its Public Reference Room in Washington, DC or
[arrow] 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:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright
Meadow Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunication Device (TTY): (800) 243-1926
SEC File Nos. 333-34537 & 811-08343
[recycle logo] Printed on recycled paper using soybean ink
32 Phoenix Investment Trust 97
<PAGE>
Phoenix Equity Planning Corporation
PO Box 2200
Enfield CT 06083-2200
[Phoenix Logo]
PXP 2053 (12/98)
<PAGE>
PHOENIX-HOLLISTER SMALL CAP VALUE FUND
PHOENIX-HOLLISTER VALUE EQUITY FUND
101 Munson Street
Greenfield, MA 01301
Statement of Additional Information
December 31, 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-Hollister Small Cap Value Fund and Phoenix-Hollister Value Equity Fund,
dated December 31, 1998 (the "Prospectus"), and should be read in conjunction
with it. The 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 .......... 8
THE INVESTMENT ADVISER ........................ 10
NET ASSET VALUE ............................... 10
HOW TO BUY SHARES ............................. 11
ALTERNATIVE PURCHASE ARRANGEMENTS ............. 11
INVESTOR ACCOUNT SERVICES ..................... 14
HOW TO REDEEM SHARES .......................... 15
DIVIDENDS, DISTRIBUTIONS AND TAXES ............ 15
TAX SHELTERED RETIREMENT PLANS ................ 16
THE DISTRIBUTOR ............................... 16
DISTRIBUTION PLANS ............................ 18
MANAGEMENT OF THE TRUST ....................... 19
OTHER INFORMATION ............................. 25
</TABLE>
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunications Device (TTY)-(800) 243-1926
PXP 2053B (12/98)
<PAGE>
THE TRUST
Phoenix Investment Trust 97 (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-Hollister Small Cap Value Fund and Phoenix-Hollister Value Equity 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 such Fund's shareholders. Each Fund may not:
(1) issue senior securities, as such term is defined in the Investment
Company Act of 1940, as amended, except as otherwise permitted under these
fundamental investment restrictions;
(2) make short sales of securities or purchase any securities on margin,
except for such short-term credits as are necessary for the clearance of
transactions; provided, however, the deposit or payment of an initial or
maintenance margin in connection with financial futures contracts or
related options transactions is not considered the purchase of a security
on margin;
(3) borrow money in excess of 25% of the value of its total assets
(including any borrowings). Any such borrowings shall be from banks subject
to an agreement by the lender that any recourse is limited to the value of
the assets of the Fund with respect to which the borrowing has been made.
Deposits in escrow in connection with the writing of covered call options
or in connection with the purchase or sale of financial futures contracts
and related options shall not be deemed to be a pledge or other
encumbrance;
(4) engage in the business of underwriting the securities of others;
(5) concentrate its investments in the securities of issuers all of which
conduct their principal business activities in the same industry provided
that this restriction shall not apply to obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities;
(6) make any investment in real estate, real estate mortgage loans and/or
commodities, except that the Fund may (a) purchase or sell readily
marketable securities which are secured by interests in real estate, or
issued by companies which deal in real estate including real estate
investment and mortgage investment trusts, and (b) engage in financial
futures contracts and related options transactions, provided that the sum
of the initial margin deposits on the Fund's futures and related options
positions and the premiums paid for related options do not exceed 5% of the
value of the Fund's net assets;
(7) make loans, except that the Fund may (a) invest up to 15% of its total
assets in repurchase agreements of a type regarded as "liquid" which are
fully collateralized as to principal and interest and which are entered
into only with commercial banks, brokers and dealers considered by the Fund
to be creditworthy and (b) loan its portfolio securities in amounts up to
one-third of the value of its total assets; and
(8) purchase securities which are not deemed liquid pursuant to procedures
adopted by the Board of Trustees if as a result of such purchase more than
15% of the Fund's net assets would be invested in the aggregate in such
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 Fund's assets
will not be considered violate of the restriction with the exception of the
Fund's policy on borrowing.
Investment Techniques
The Funds may utilize the following practices or techniques in pursuing
its investment objectives.
U.S. Government Securities. 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
1
<PAGE>
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. Each 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 Funds normally
will have expiration dates between three and nine months from the date written.
During the option period the Funds may be assigned an exercise notice by the
broker-dealer through which the call option was sold, requiring the Funds 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 a Fund effects a
closing purchase transaction. A closing purchase transaction cannot be effected
with respect to an option once a Fund has received an exercise notice.
The exercise price of a call option written by a 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 and Gas Index, NYSE Options Index, Gaming/Hotel Index,
Telephone Index, Transportation Index, Technology Index, and Gold/Silver
Index. Each 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 a Fund to prevent an underlying
security from being called, or to enable a 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 a Fund expires unexercised, the Fund will realize a gain in the
amount of the premium on the option less the commission paid.
Limitations on Options. Each 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. Each
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 a 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 a 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
2
<PAGE>
in value to the difference. In addition, when the Funds write a call on an
index which is "in-the-money" at the time the call is written, the Funds 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.
Each 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.
Each Fund may enter into futures contracts and options, provided that such
obligations represent no more than 50% 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. In connection with each
Fund qualifying as a regulated investment company under the Internal Revenue
Code, other restrictions on the Funds' 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 Funds 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.
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 each 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 Funds 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 Funds will write call options on indices only subject to the
limitations described above.
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Price movements in securities in the Funds' portfolios will not correlate
perfectly with movements in the level of the index and, therefore, the Funds
bear the risk that the price of the securities held by a 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 a 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 a 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 use
financial futures contracts and related options to hedge against changes in the
market value of its portfolio securities or securities which it 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 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 a 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.
The Funds 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
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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.
The Funds 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 options, provided that such obligations represent no
more than 50% 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.
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. Positions in futures contracts may be
closed out only on an exchange which provides a secondary market for such
contracts or options. Each Fund will enter into a 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 futures
contract at any specific time. Thus, it may not be possible to close out a
futures 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 movement. In addition, investing in 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 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 is held by the 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, the Fund's return for the
period may be less than if it had not engaged in the hedging transaction.
Utilization of futures contracts by the 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.
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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 25% of the total assets (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 30% of the total assets of each Fund.
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
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. These contracts will only
be used to facilitate settlements.
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 Funds
will not enter into forward contracts with a term longer than one year.
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Foreign Currency Options. A foreign currency option provides the option
buyer with the right to buy or sell a stated amount of foreign currency at the
exercise price at a specified date or during the option period. A call option
gives its owner the right, but not the obligation, to buy the currency, while a
put option gives its owner the right, but not the obligation, to sell the
currency. The option seller (writer) is obligated to fulfill the terms of the
option sold if it is exercised. However, either seller or buyer may close its
position during the option period for such options any time prior to
expiration.
A call rises in value if the underlying currency appreciates. Conversely,
a put rises in value if the underlying currency depreciates. While purchasing a
foreign currency option can protect a 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 a 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.
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 options, provided that such
obligations represent no more than 50% 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.
Illiquid Securities. Each Fund may invest up to 15% of its net assets in
securities that are not liquid. The Funds consider investments that the adviser
is not likely to be able to sell within seven days as not liquid. These
securities can include repurchase agreements with maturities of more than seven
days and private placements. Repurchase agreements are contracts under which
the fund will buy securities and simultaneously agree to resell them at a later
date for an agreed, higher price. Private placements are securities that are
not sold to investors through a public offering but instead are sold in direct,
private transactions. Illiquid securities may have a lower value than
comparable securities that have active markets for resale, and they can lose
their value more quickly under unfavorable conditions.
Investment Companies. Each Fund may invest up to 10% of its assets in
mutual funds. The Funds may invest in mutual funds advised by the fund's
adviser or other advisers controlled by the same persons who control the fund's
adviser. 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.
Standard & Poor's Depositary Receipts. Each Fund may invest up to 5% of
its assets in a special investment company issuing Standard & Poor's Depositary
Receipts ("SPDR"s). Each SPDR represents a proportionate interest, in
substantially the same weighting, as the stocks that make up the Standard &
Poor's 500 Index. The same types of events and circumstances affecting stocks
generally can affect the value of SPDRs.
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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
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-Hollister Small Cap Value Fund's annual total return since
inception November 20, 1997 through August 31, 1998 for Class A Shares was
(22.51)%, for Class B Shares was (23.10)% and for Class C Shares was (19.90)%.
Phoenix-Hollister Value Equity Fund's annual total return since inception
November 5, 1997 through August 31, 1998 for Class A Shares was (14.56)%, for
Class B Shares was (15.37)% and for Class C Shares was (11.75)%. 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.
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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 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 $106,252. Brokerage commissions of $23,173 were paid on
portfolio transactions aggregating $13,353,899 and executed by brokers who
provided research and other statistical and factual information.
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THE INVESTMENT ADVISER
The offices of Phoenix Investment Counsel, Inc. ("PIC" or the "Adviser")
are located at 56 Prospect Street, Hartford, Connecticut 06115-0480. PIC was
organized in 1932 as John P. Chase, Inc. All of the outstanding shares of PIC
are owned by Phoenix Equity Planning Corporation ("Equity Planning"), which
acts as Distributor and Financial Agent for the Trust. All of the outstanding
shares of Equity Planning are owned by 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").
Phoenix Investment Partners, Ltd., is the 10th Largest publicly traded
investment company in the nation, and has served investors for over 70 years.
It manages approximately $50 billion in assets through its investment partners:
Aberdeen Fund Managers, Inc. (Aberdeen) in Aberdeen London, Singapore and Fort
Lauderdale; Duff & Phelps Investment Management Co. (Duff & Phelps) in Chicago
and Cleveland; Roger Engermann & Associates, Inc. (Engermann) in Pasadena;
Seneca Capital Management LLC (Seneca) in San Francisco; and Phoenix Investment
Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions) in Hartford,
Sarasota, and Scotts Valley, CA, respectively.
Philip R. McLoughlin, a director and officer of the Trust, is also a
director of the Adviser. Michael E. Haylon, an officer of the Fund, is also a
director and officer of the Adviser. Christian C. Bertelsen, G. Jeffrey Bohne,
William E. Keen, III and William R. Moyer, officers of the Fund, are officers
of the Adviser.
The Adviser provides certain services and facilities required to carry on
the day-to-day operations of the Funds (for which it 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 Adviser) 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
Adviser or any of its 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 agreement provides that the Adviser 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 agreement relates, except a loss resulting from willful misfeasance,
bad faith, gross negligence or reckless disregard on the part of the Adviser in
the performance of its duties thereunder.
As full compensation for the services and facilities furnished to the
Funds, the Adviser is entitled to a fee, payable monthly, as described in the
prospectus. Total management fees for the fiscal year ended August 31, 1998
amounted to $269,984. 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 agreement continues 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 agreement 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.
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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.
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 Funds,
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 0.25% of the Funds' 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.
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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 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
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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 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
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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. 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.
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
14
<PAGE>
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.
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.
Account Reinstatement 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 and
conditions attached to this privilege.
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
15
<PAGE>
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.
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 Fund are offered in connection with the following retirement
plans or programs: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA, 401(k),
Profit-Sharing, 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., serves as distributor for the Funds. As
such, the Distributor conducts
16
<PAGE>
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.
For the fiscal year ended August 31, 1998, purchasers of shares of the
Funds paid aggregate sales charges of $282,725, of which the Distributor
received net commissions of $39,280 for its services, the balance being paid to
dealers.
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 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.
17
<PAGE>
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
$119,428.
DISTRIBUTION PLANS
The Trust has adopted separate 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 $156,191 of which the Distributor received $100,907, W.S.
Griffith & Co., an affiliate, received $4,567 and unaffiliated broker-dealers
received $50,717. The Rule 12b-1 payments were used for (1) compensation to
dealers $550,146, (2) compensation to sales personnel $676,175, (3) advertising
$343,161, (4) service costs $82,134, (5) printing and mailing of prospectuses to
other than current shareholders $26,148 and (6) other $139,027. 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 $669,365 (equal to 1.33% 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 provide that while they are in effect, the selection and nomination of
Trustees who are not "interested persons" shall be committed
18
<PAGE>
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, Inc. (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
suspend distribution fees or amend the Plans.
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 (64) 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).
E. Virgil Conway (69) Trustee Chairman, Metropolitan Transportation Authority (1992-
9 Rittenhouse Road present). Trustee/Director, Consolidated Edison Company
Bronxville, NY 10708 of 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 (69) 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.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- ---------------------------- ---------------- -----------------------------------------------------------------
<S> <C> <C>
*Francis E. Jeffries (68) 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 Inc. (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,
Evergreen Liquid Trust, Evergreen 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).
*Philip R. McLoughlin (52) 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).
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- -------------------------- ---------------- ---------------------------------------------------------------
<S> <C> <C>
Everett L. Morris (70) 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 (52) 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) 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).
*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. (70) 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
Insurance Company (1972-1998), Director/Trustee, the
National Affiliated Investment Companies (until 1993).
Richard E. Segerson (52) 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). Director/Trustee,
the National Affiliated Investment Companies (1984-1993).
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- ----------------------------- ---------------- ------------------------------------------------------------------
<S> <C> <C>
Lowell P. Weicker, Jr. (67) 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).
Christian C. Bertelsen (55) Vice Managing Director, Value Equities, Phoenix Investment
President Counsel, Inc. (1997-present). Senior Vice President and Chief
Investment Officer, Zurich Kemper (1996-1997). Vice
President and Portfolio Manager, Zurich Kemper Small Cap
Fund and Zurich Kemper Contrarian Fund (1996-1997).
Senior Vice President, Eagle Asset Management (1993-1996).
Vice President and Portfolio Manager, Heritage Value Fund
and Golden Select Variable Annuity Value Trust (1995-1996).
William E. Keen, III (35) Vice Assistant Vice President (1996-present), Director of Mutual
100 Bright Meadow Blvd. President Fund Compliance (1995-1996), Phoenix Equity Planning
P.O. Box 2200 Corporation (1996-present). Vice President, Phoenix Funds,
Enfield, CT 06083-2200 Phoenix Duff & Phelps Institutional Mutual Funds and
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 (54) 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-
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- ------------------------- ---------------- ----------------------------------------------------------------
<S> <C> <C>
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).
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).
Nancy G. Curtiss (46) 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 (51) 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.
For services rendered to the Fund for the fiscal year ended August 31,
1998, the Trustees received aggregate remuneration of $23,203. For services on
the Boards of Directors/Trustees of the Phoenix Funds, each Trustee who is not
a full-time employee of the Adviser or any of its affiliates currently receives
a retainer at the annual rate of $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.
23
<PAGE>
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 $1,982 None None $59,750
E. Virgil Conway+ $2,651 for any for any $78,000
Harry Dalzell-Payne+ $2,363 Trustee Trustee $70,500
Francis E. Jeffries $2,029 $60,000
Leroy Keith, Jr. $2,099 $62,250
Philip R. McLoughlin+ $ 0 $ 0
Everett L. Morris+ $2,293 $69,000
James M. Oates+ $2,293 $68,250
Calvin Pedersen $ 0 $ 0
Herbert Roth, Jr.+ $2,721 $80,500
Richard E. Segerson $2,386 $70,750
Lowell P. Weicker, Jr. $2,386 $70,000
</TABLE>
*This compensation (and the earnings thereon) paid to Messrs. Jeffries and
Roth, 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 $122,231.42,
$131,172.55 and $145,070.99, 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.
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are
members of the Executive Committee.
At December 14, 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 December 14, 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>
Small Cap Value Fund
Phoenix Home Life Class A 471,505.506 24.10%
56 Prospect St.
Hartford, CT 06103-2818
MLPF&S For The Sole Class B 86,526.696 10.81%
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 103,026.214 26.93%
Benefit of its Customers
ATTN: Fund Administration
4800 Deer Lake Dr. E 3rd Fl
Jacksonville, FL 32246-6484
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Name of Shareholder Class Number of Shares Percent of Class
- ---------------------------- --------- ------------------ -----------------
<S> <C> <C> <C>
Phoenix Value Equity Fund
Phoenix Home Life Class A 1,313,244.657 59.29%
56 Prospect St.
Hartford, CT 06103-2818
MLPF&S For The Sole Class B 62,136.583 9.71%
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 46,947.927 18.61%
Benefit of its Customers
ATTN: Fund Administration
4800 Deer Lake Dr. E 3rd Fl
Jacksonville, FL 32246-6484
John M. Crosby Class C 13,631.407 5.40%
Michelle L. Crosby JTROS
27409 Diane Marie Circle
Santa Clara, CA 91350-1733
</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 at least 10% of the outstanding shares so
request in writing. If the Trustees fail to call a meeting after being so
notified, the Shareholders may call the meeting. The Trustees will assist the
Shareholders by identifying other shareholders or mailing communications, as
required under Section 16(c) of the Investment Company Act of 1940.
Shares are fully paid, nonassessable, redeemable and fully transferable
when they are issued. Shares do not have cumulative voting rights, preemptive
rights or subscription rights. The assets received by the 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 itself would be unable to meet
its obligations.
25
<PAGE>
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 Blvd., P.O. Box 2200, Enfield, CT
06083-2250, 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 ends 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>
PHOENIX VALUE EQUITY FUND
- - ------------------------------------------------------
INVESTMENTS AT AUGUST 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C> <C>
COMMON STOCKS -- 87.4%
AEROSPACE/DEFENSE -- 3.7%
Boeing Co. ...................... 22,000 $ 680,625
Sundstrand Corp. ................ 7,000 318,937
------------
999,562
------------
AIR FREIGHT -- 0.6%
FDX Corp. (b).................... 3,000 150,187
------------
AUTOMOBILES -- 0.4%
Chrysler Corp. .................. 2,500 111,562
------------
BANKS (MAJOR REGIONAL) -- 3.2%
Fleet Financial Group, Inc. ..... 5,400 354,037
PNC Bank Corp. .................. 4,600 197,800
Wells Fargo & Co. ............... 1,150 324,156
------------
875,993
------------
BANKS (MONEY CENTER) -- 9.0%
BankAmerica Corp. ............... 6,500 416,406
Bankers Trust Corp. ............. 5,000 371,562
Chase Manhattan Corp. ........... 11,500 609,500
Citicorp......................... 5,000 540,625
Morgan (J.P.) & Co., Inc. ....... 2,300 213,900
NationsBank Corp. ............... 5,000 285,000
------------
2,436,993
------------
BEVERAGES (ALCOHOLIC) -- 1.5%
Anheuser-Busch Companies,
Inc. .......................... 9,000 415,125
------------
CHEMICALS -- 0.4%
Praxair, Inc. ................... 3,000 107,625
------------
COMMUNICATIONS EQUIPMENT -- 1.6%
Motorola, Inc. .................. 10,000 430,625
------------
COMPUTERS (HARDWARE) -- 1.2%
Sun Microsystems, Inc. (b)....... 8,000 317,000
------------
ELECTRICAL EQUIPMENT -- 2.8%
Honeywell, Inc. ................. 12,000 750,000
------------
ELECTRONICS (DEFENSE) -- 1.4%
Raytheon Co. Class B............. 8,400 383,250
------------
FINANCIAL (DIVERSIFIED) -- 10.8%
American Express Co. ............ 7,000 546,000
Fannie Mae....................... 15,000 852,187
Freddie Mac...................... 19,000 750,500
SLM Holding Corp. ............... 22,000 789,250
------------
2,937,937
------------
FOOTWEAR -- 0.8%
Nike, Inc. Class B............... 6,000 208,125
------------
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C> <C>
GAMING, LOTTERY & PARIMUTUEL COMPANIES -- 0.4%
Mirage Resorts, Inc. (b)......... 7,000 $ 104,125
------------
HEALTH CARE (DIVERSIFIED) -- 1.6%
Johnson & Johnson................ 6,300 434,700
------------
HEALTH CARE (DRUGS - MAJOR PHARMACEUTICALS) -- 3.5%
Lilly (Eli) & Co. ............... 5,500 360,250
Pfizer, Inc. .................... 3,000 279,000
Pharmacia & Upjohn, Inc. ........ 7,500 311,719
------------
950,969
------------
HEALTH CARE (MANAGED CARE) -- 2.0%
Foundation Health Systems, Inc.
(b)............................ 20,000 223,750
Humana, Inc. (b)................. 25,000 325,000
------------
548,750
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) -- 0.9%
Baxter International, Inc. ...... 4,500 239,625
------------
HEALTH CARE (SPECIALIZED SERVICES) -- 0.9%
ALZA Corp. (b)................... 7,000 252,000
------------
HOUSEHOLD PRODUCTS (NON-DURABLES) -- 1.2%
Procter & Gamble Co. ............ 4,100 313,650
------------
HOUSEWARES -- 0.5%
Fortune Brands, Inc. ............ 5,000 137,813
------------
INSURANCE (MULTI-LINE) -- 6.2%
American International Group,
Inc. .......................... 10,500 811,781
CIGNA Corp. ..................... 9,000 523,688
Travelers Group, Inc. ........... 8,000 355,000
------------
1,690,469
------------
INSURANCE (PROPERTY-CASUALTY) -- 6.0%
Ace Ltd. ........................ 1,000 29,000
Allstate Corp. .................. 4,000 150,000
Chicago Title Corp. ............. 16,000 563,000
General Re Corp. ................ 3,200 664,000
Travelers Property Casualty Corp.
Class A........................ 7,000 230,563
------------
1,636,563
------------
INVESTMENT BANKING/BROKERAGE -- 1.9%
Bear Stearns Companies, Inc.
(The).......................... 4,000 147,750
Merrill Lynch & Co., Inc. ....... 5,600 369,600
------------
517,350
------------
MACHINERY (DIVERSIFIED) -- 0.8%
Caterpillar, Inc. ............... 5,100 215,156
------------
MANUFACTURING (DIVERSIFIED) -- 2.7%
AlliedSignal, Inc. .............. 11,100 380,869
Illinois Tool Works, Inc. ....... 5,000 242,188
</TABLE>
See Notes to Financial Statements 3
<PAGE>
PHOENIX VALUE EQUITY FUND
- - ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C> <C>
MANUFACTURING (DIVERSIFIED)--CONTINUED
United Technologies Corp. ....... 1,500 $ 108,844
------------
731,901
------------
MANUFACTURING (SPECIALIZED) -- 1.6%
Diebold, Inc. ................... 20,000 437,500
------------
OFFICE EQUIPMENT & SUPPLIES -- 1.8%
Pitney Bowes, Inc. .............. 10,000 496,250
------------
PHOTOGRAPHY/IMAGING -- 1.5%
Eastman Kodak Co. ............... 2,000 156,250
Xerox Corp. ..................... 3,000 263,438
------------
419,688
------------
RAILROADS -- 0.9%
GATX Corp. ...................... 3,200 105,600
Union Pacific Corp. ............. 3,500 139,344
------------
244,944
------------
RESTAURANTS -- 3.3%
McDonald's Corp. ................ 16,000 897,000
------------
RETAIL (DEPARTMENT STORES) -- 0.3%
May Department Stores Co. ....... 1,500 84,375
------------
RETAIL (FOOD CHAINS) -- 1.2%
Albertson's, Inc. ............... 6,500 328,656
------------
RETAIL (GENERAL MERCHANDISE) -- 2.3%
Dayton Hudson Corp. ............. 17,200 619,200
------------
SERVICES (DATA PROCESSING) -- 1.2%
First Data Corp. ................ 16,000 331,000
------------
TELECOMMUNICATIONS (LONG DISTANCE) -- 0.5%
WorldCom, Inc. (b)............... 3,000 122,813
------------
TELEPHONE -- 4.3%
BellSouth Corp. ................. 5,200 356,525
GTE Corp. ....................... 10,000 500,000
SBC Communications, Inc. ........ 8,500 323,000
------------
1,179,525
------------
TOBACCO -- 2.5%
Philip Morris Companies, Inc. ... 16,000 665,000
------------
TOTAL COMMON STOCKS
(Identified cost $28,071,899).................................................... 23,723,006
------------
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS -- 7.5%
CHEMICALS (DIVERSIFIED) -- 1.0%
Hoechst AG Sponsored ADR
(Germany)...................... 7,000 $ 276,938
------------
FOODS -- 4.7%
Nestle SA Sponsored ADR
(Switzerland).................. 5,500 509,941
Unilever NV NY Registered Shares
(Netherlands).................. 12,000 760,500
------------
1,270,441
------------
HOUSEHOLD FURN. & APPLIANCES -- 0.7%
Royal Philips Electronics NV NY
Registered Shares
(Netherlands).................. 3,000 179,813
------------
MANUFACTURING (DIVERSIFIED) -- 0.6%
Siemens AG Sponsored ADR
(Germany)...................... 2,500 162,318
------------
TELEPHONE -- 0.5%
Telecomunicacoes Brasileiras SA
Sponsored ADR (Brazil)......... 2,000 143,625
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $2,336,327)..................................................... 2,033,135
------------
UNIT INVESTMENT TRUSTS -- 4.2%
S&P 500 Depository Receipts...... 12,000 1,148,250
------------
TOTAL UNIT INVESTMENT TRUSTS
(Identified cost $1,342,142)..................................................... 1,148,250
------------
TOTAL LONG-TERM INVESTMENTS -- 99.1%
(Identified cost $31,750,368).................................................... 26,904,391
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
------------ --------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS -- 0.4%
COMMERCIAL PAPER -- 0.4%
Goldman Sachs
5.83%, 9/1/98.............................................................. A-1+ $110 110,000
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $110,000)........................................................................... 110,000
---------------
TOTAL INVESTMENTS -- 99.5%
(Identified cost $31,860,368)........................................................................ 27,014,391(a)
Cash and receivables, less liabilities -- 0.5%....................................................... 136,913
---------------
NET ASSETS--100.0%..................................................................................... $ 27,151,304
---------------
---------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $471,375 and gross
depreciation of $5,334,625 for federal income tax purposes. At August 31,
1998, the aggregate cost of securities for federal income tax purposes was
$31,877,641.
(b) Non-income producing.
4 See Notes to Financial Statements
<PAGE>
Phoenix Value Equity Fund
- - ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $31,860,368) $ 27,014,391
Cash 4,476
Receivables
Investment securities sold 230,894
Dividends and interest 38,863
Fund shares sold 25,725
Prepaid expenses 13,715
-------------
Total assets 27,328,064
-------------
LIABILITIES
Payables
Fund shares repurchased 50,595
Distribution fee 11,853
Trustees' fee 9,888
Transfer agent fee 6,200
Financial agent fee 5,843
Investment advisory fee 5,407
Accrued expenses 86,974
-------------
Total liabilities 176,760
-------------
NET ASSETS $ 27,151,304
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 32,507,139
Undistributed net investment income 69,817
Accumulated net realized loss (579,675)
Net unrealized depreciation (4,845,977)
-------------
NET ASSETS $ 27,151,304
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $19,765,877) 2,210,098
Net asset value per share $8.94
Offering price per share $8.94/(1-4.75%) $9.39
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $5,291,195) 595,100
Net asset value and offering price per share $8.89
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,004,713) 225,379
Net asset value and offering price per share $8.89
CLASS M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $89,519) 10,024
Net asset value per share $8.93
Offering price per share $8.93/(1-3.50%) $9.25
</TABLE>
STATEMENT OF OPERATIONS
FROM INCEPTION NOVEMBER 5, 1997
TO AUGUST 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 242,395
Interest 18,496
Foreign taxes withheld (2,634)
------------
Total investment income 258,257
------------
EXPENSES
Investment advisory fee 124,124
Distribution fee--Class A 29,194
Distribution fee--Class B 34,420
Distribution fee--Class C 13,320
Distribution fee--Class M 491
Financial agent fee 61,919
Registration 103,373
Transfer agent 63,114
Custodian 19,068
Printing 18,828
Professional 18,603
Trustees 17,645
Miscellaneous 21,039
------------
Total expenses 525,138
Less expenses borne by investment adviser (282,208)
------------
Net expenses 242,930
------------
NET INVESTMENT INCOME 15,327
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (579,675)
Net change in unrealized appreciation (depreciation) on
investments (4,845,977)
------------
NET LOSS ON INVESTMENTS (5,425,652)
------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ (5,410,325)
------------
------------
</TABLE>
See Notes to Financial Statements 5
<PAGE>
PHOENIX VALUE EQUITY FUND
- - ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FROM INCEPTION
NOVEMBER 5, 1997 TO
AUGUST 31, 1998
--------------------
<S> <C>
FROM OPERATIONS
Net investment income $ 15,327
Net realized loss (579,675)
Net change in unrealized appreciation (depreciation) (4,845,977)
--------------------
DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (5,410,325)
--------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (11,186)
Net investment income--Class B (2,802)
Net investment income--Class C (1,239)
Net investment income--Class M (100)
In excess of net investment income--Class A (6,975)
In excess of net investment income--Class B (1,747)
In excess of net investment income--Class C (773)
In excess of net investment income--Class M (61)
--------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (24,883)
--------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,356,722 shares) 25,504,049
Net asset value of shares issued from reinvestment of distributions (1,823 shares) 18,045
Cost of shares repurchased (148,447 shares) (1,615,279)
--------------------
Total 23,906,815
--------------------
CLASS B
Proceeds from sales of shares (621,551 shares) 6,514,113
Net asset value of shares issued from reinvestment of distributions (370 shares) 3,662
Cost of shares repurchased (26,821 shares) (296,436)
--------------------
Total 6,221,339
--------------------
CLASS C
Proceeds from sales of shares (260,718 shares) 2,734,842
Net asset value of shares issued from reinvestment of distributions (108 shares) 1,073
Cost of shares repurchased (35,447 shares) (375,236)
--------------------
Total 2,360,679
--------------------
CLASS M
Proceeds from sales of shares (12,175 shares) 122,245
Net asset value of shares issued from reinvestment of distributions (16 shares) 161
Cost of shares repurchased (2,167 shares) (24,727)
--------------------
Total 97,679
--------------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 32,586,512
--------------------
NET INCREASE IN NET ASSETS 27,151,304
NET ASSETS
Beginning of period 0
--------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $69,817) $ 27,151,304
--------------------
--------------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix Value Equity Fund
- - ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS M
-------------- -------------- -------------- --------------
FROM INCEPTION FROM INCEPTION FROM INCEPTION FROM INCEPTION
11/5/97 TO 11/5/97 TO 11/5/97 TO 11/5/97 TO
8/31/98 8/31/98 8/31/98 8/31/98
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.03(4)(5) (0.04)(4)(5) (0.04)(4)(5) 0.01(4)(5)
Net realized and unrealized gain
(loss) (1.07) (1.05) (1.05) (1.07)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (1.04) (1.09) (1.09) (1.06)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.01) (0.01) (0.01) (0.01)
In excess of net investment income (0.01) (0.01) (0.01) --
------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.02) (0.02) (0.02) (0.01)
------ ------ ------ ------
Change in net asset value (1.06) (1.11) (1.11) (1.07)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 8.94 $ 8.89 $ 8.89 $ 8.93
------ ------ ------ ------
------ ------ ------ ------
Total return(1) (10.28)%(3) (10.92)%(3) (10.86)%(3) (10.47)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $19,766 $5,291 $2,005 $90
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.25%(2) 2.00%(2) 2.00%(2) 1.50%(2)
Net investment income (loss) 0.31%(2) (0.45)%(2) (0.45)%(2) 0.15%(2)
Portfolio turnover 59%(3) 59%(3) 59%(3) 59%(3)
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by investment adviser of $0.15,
$0.15, $0.15 and $0.15, respectively.
See Notes to Financial Statements 7
<PAGE>
Phoenix Small Cap Value Fund
- -------------------------------------------------------
INVESTMENTS AT AUGUST 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
COMMON STOCKS -- 95.0%
AEROSPACE/DEFENSE -- 0.3%
Gulfstream Aerospace Corp. (b)... 2,000 $ 70,250
------------
AIRLINES -- 0.8%
America West Holdings Corp.
(b)............................ 10,000 194,375
------------
BANKS (MAJOR REGIONAL) -- 5.6%
Bank Plus Corp. ................. 27,000 205,875
Charter One Financial, Inc. ..... 20,000 460,000
FirstMerit Corp. ................ 4,400 97,350
St. Paul Bancorp., Inc. ......... 9,000 155,250
Washington Federal, Inc. ........ 17,000 384,625
------------
1,303,100
------------
BIOTECHNOLOGY -- 1.0%
ICOS Corp. (b)................... 15,000 223,125
------------
BROADCASTING (TELEVISION, RADIO & CABLE) -- 3.0%
Jones Intercable, Inc. (b)....... 15,000 345,000
Westwood One, Inc. (b)........... 18,000 347,625
------------
692,625
------------
BUILDING MATERIALS -- 6.8%
Lennar Corp. .................... 29,100 527,437
Toll Brothers, Inc. (b).......... 25,500 651,844
Webb (Del E.) Corp. ............. 20,000 393,750
------------
1,573,031
------------
CHEMICALS (SPECIALTY) -- 1.8%
Fuller (H.B.) Co. ............... 9,000 427,500
------------
COMPUTERS (PERIPHERALS) -- 0.4%
At Home Corp. (b)................ 3,300 94,050
------------
COMPUTERS (SOFTWARE & SERVICES) -- 7.0%
Black Box Corp. (b).............. 5,600 128,100
Concurrent Computer Corp. (b).... 78,000 156,000
Fremont General Corp. ........... 19,000 812,250
PeopleSoft, Inc. (b)............. 12,300 345,937
Walker Interactive Systems (b)... 30,000 180,000
------------
1,622,287
------------
CONSUMER FINANCE -- 1.8%
New Century Financial Corp.
(b)............................ 46,000 425,500
------------
CONTAINERS & PACKAGING (PAPER) -- 0.4%
Shorewood Packaging Corp. (b).... 7,500 97,500
------------
ELECTRONICS (COMPONENT DISTRIBUTORS) -- 2.5%
AFC Cable Systems, Inc. (b)...... 7,000 162,094
CHS Electronics, Inc. (b)........ 34,000 429,250
------------
591,344
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
ELECTRONICS (INSTRUMENTATION) -- 1.8%
Dallas Semiconductor Corp. ...... 15,000 $ 405,937
------------
ENTERTAINMENT -- 0.8%
AMC Entertainment Inc. (b)....... 14,500 184,875
------------
EQUIPMENT (SEMICONDUCTORS) -- 1.1%
Broadcom Corp. (b)............... 5,000 256,250
------------
FINANCIAL (DIVERSIFIED) -- 1.4%
Finet Holdings Corp. (b)......... 12,000 11,250
Jefferies Group, Inc. ........... 5,000 142,812
Southern Pacific Funding Corp.
(b)............................ 22,000 178,750
------------
332,812
------------
HEALTH CARE (LONG TERM CARE) -- 0.5%
Sun Healthcare Group, Inc. (b)... 12,000 105,000
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) -- 2.2%
Alaris Medical, Inc. (b)......... 95,000 326,562
Cell Genesys, Inc. (b)........... 46,000 192,625
------------
519,187
------------
HOMEBUILDING -- 1.9%
D. R. Horton, Inc. .............. 9,000 144,000
NVR, Inc. ....................... 9,000 293,062
------------
437,062
------------
HOUSEHOLD FURN. & APPLIANCES -- 0.4%
Furniture Brands International,
Inc. (b)....................... 4,500 100,687
------------
INSURANCE (MULTI-LINE) -- 6.3%
Ambac Financial Group, Inc. ..... 10,000 471,875
Everest Reinsurance Holdings,
Inc. .......................... 1,000 35,000
Horace Mann Educators Corp. ..... 28,000 780,500
NAC Re Corp. .................... 1,000 47,188
RenaissanceRe Holdings Ltd. ..... 3,000 125,625
------------
1,460,188
------------
INSURANCE (PROPERTY-CASUALTY) -- 8.8%
Chartwell Re Corp. .............. 13,200 347,325
Commerce Group, Inc. ............ 22,000 577,500
Executive Risk, Inc. ............ 2,000 72,000
LandAmerica Financial Group,
Inc. .......................... 16,000 795,000
Selective Insurance Group, Inc
(b)............................ 15,000 266,719
------------
2,058,544
------------
IRON & STEEL -- 1.4%
Quanex Corp. .................... 15,000 326,250
------------
</TABLE>
10 See Notes to Financial Statements
<PAGE>
PHOENIX SMALL CAP VALUE FUND
- - ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
MACHINERY (DIVERSIFIED) -- 2.8%
Blount International, Inc. Class
A.............................. 20,500 $ 486,875
Stewart & Stevenson Services,
Inc. .......................... 13,000 169,813
------------
656,688
------------
MANUFACTURING (DIVERSIFIED) -- 2.8%
Furon Co. ....................... 32,500 534,219
Trinity Industries, Inc. ........ 4,000 121,000
------------
655,219
------------
MANUFACTURING (SPECIALIZED) -- 1.0%
Fleetwood Enterprises, Inc. ..... 7,000 234,063
------------
METALS MINING -- 1.5%
AK Steel Holding Corp. .......... 9,000 124,875
Titanium Metals Corp. (b)........ 20,000 230,000
------------
354,875
------------
RAILROADS -- 2.2%
Railtex, Inc. (b)................ 36,900 516,600
------------
REITS -- 0.7%
Hospitality Properties Trust..... 6,000 165,000
------------
RETAIL (BUILDING SUPPLIES) -- 4.1%
Homebase, Inc. (b)............... 46,000 281,750
Sherwin-Williams Co. ............ 28,000 668,500
------------
950,250
------------
RETAIL (GENERAL MERCHANDISE) -- 1.0%
Heilig-Meyers Co. ............... 21,000 238,875
------------
RETAIL (SPECIALTY) -- 4.6%
Claire's Stores, Inc. ........... 46,000 690,000
Talbots, Inc. (The) (b).......... 18,000 379,125
------------
1,069,125
------------
SAVINGS & LOAN COMPANIES -- 0.9%
Bank United Corp. ............... 6,000 199,500
------------
SERVICES (ADVERTISING/MARKETING) -- 0.8%
Catalina Marketing Corp. (b)..... 4,000 168,250
Purchase Point Media Corp. (b)... 5,000 20,000
------------
188,250
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
SERVICES (COMMERCIAL/CONSUMER) -- 1.4%
Wackenhut Corp. Class A.......... 17,500 $ 332,500
------------
SPECIALTY PRINTING -- 4.3%
Valassis Communications, Inc.
(b)............................ 20,000 596,250
World Color Press, Inc. (b)...... 14,500 407,813
------------
1,004,063
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS) -- 6.1%
Applied Cellular Technology, Inc.
(b)............................ 28,500 51,656
Crown Castle International
Corp. ......................... 10,000 81,250
Iridium World Communications Ltd.
(b)............................ 8,000 264,000
L-3 Communications Holdings, Inc.
(b)............................ 15,500 513,438
Scientific Atlanta, Inc. ........ 29,100 514,706
------------
1,425,050
------------
TEXTILES (APPAREL) -- 2.8%
Supreme International Corp.
(b)............................ 33,000 387,750
Tandy Brand Accessories, Inc.
(b)............................ 19,700 262,872
------------
650,622
------------
TOTAL COMMON STOCKS
(Identified cost $28,591,278).................................................... 22,142,159
------------
FOREIGN COMMON STOCKS -- 1.0%
FINANCIAL (DIVERSIFIED) -- 1.0%
London Pacific Group Ltd.
Sponsored ADR.................. 20,000 227,500
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $298,610)....................................................... 227,500
------------
UNIT INVESTMENT TRUSTS -- 4.1%
S&P 500 Depositary Receipts...... 10,000 956,875
------------
TOTAL UNIT INVESTMENT TRUSTS
(Identified cost $1,177,334)..................................................... 956,875
------------
TOTAL INVESTMENTS --100.1%
(Identified cost $30,067,222).................................................... 23,326,534(a)
Cash and receivables, less liabilities--(0.1%)................................... (28,775)
------------
NET ASSETS--100.0%................................................................. $ 23,297,759
------------
------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $453,284 and gross
depreciation of $7,252,120 for federal income tax purposes. At August 31,
1998, the aggregate cost of securities for federal income tax purposes was
$30,125,370.
(b) Non-income producing.
See Notes to Financial Statements 11
<PAGE>
Phoenix Small Cap Value Fund
- - ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $30,067,222) $ 23,326,534
Cash 290,607
Receivables
Fund shares sold 69,304
Receivable from adviser 6,748
Dividends and interest 18,353
Prepaid expenses 17,365
-------------
Total assets 23,728,911
-------------
LIABILITIES
Payables
Investment securities purchased 149,475
Fund shares repurchased 157,954
Distribution fee 12,491
Transfer agent fee 6,044
Financial agent fee 5,075
Trustees' fee 4,500
Accrued expenses 95,613
-------------
Total liabilities 431,152
-------------
NET ASSETS $ 23,297,759
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 30,051,480
Accumulated net realized loss (13,033)
Net unrealized depreciation (6,740,688)
-------------
NET ASSETS $ 23,297,759
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $14,518,616) 1,790,631
Net asset value per share $8.11
Offering price per share $8.11/(1-4.75%) $8.51
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $5,921,541) 733,996
Net asset value and offering price per share $8.07
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,769,772) 343,328
Net asset value and offering price per share $8.07
CLASS M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $87,830) 10,849
Net asset value per share $8.10
Offering price per share $8.10/(1-3.50%) $8.39
</TABLE>
STATEMENT OF OPERATIONS
FROM INCEPTION NOVEMBER 20, 1997
TO AUGUST 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 164,726
Interest 33,948
------------
Total investment income 198,674
------------
EXPENSES
Investment advisory fee 145,860
Distribution fee--Class A 27,599
Distribution fee--Class B 34,110
Distribution fee--Class C 16,544
Distribution fee--Class M 513
Financial agent fee 57,509
Registration 98,739
Transfer agent 64,660
Custodian 19,266
Printing 17,794
Professional 17,581
Trustees 15,963
Miscellaneous 28,473
------------
Total expenses 544,611
Less expenses borne by investment adviser (279,449)
------------
Net expenses 265,162
------------
NET INVESTMENT LOSS (66,488)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 12,932
Net change in unrealized appreciation (depreciation) on
investments (6,740,688)
------------
NET LOSS ON INVESTMENTS (6,727,756)
------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ (6,794,244)
------------
------------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
PHOENIX SMALL CAP VALUE FUND
- - ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FROM INCEPTION
NOVEMBER 20, 1997 TO
AUGUST 31, 1998
---------------------
<S> <C>
FROM OPERATIONS
Net investment loss $ (66,488)
Net realized gain 12,932
Net change in unrealized appreciation (depreciation) (6,740,688)
---------------------
DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (6,794,244)
---------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
In excess of net investment income--Class A (27,475)
In excess of net investment income--Class B (2,932)
In excess of net investment income--Class C (1,800)
In excess of net investment income--Class M (251)
---------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (32,458)
---------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,003,648 shares) 20,830,478
Net asset value of shares issued from reinvestment of distributions (2,693 shares) 26,901
Cost of shares repurchased (215,710 shares) (2,249,618)
---------------------
Total 18,607,761
---------------------
CLASS B
Proceeds from sales of shares (779,154 shares) 8,252,028
Net asset value of shares issued from reinvestment of distributions (224 shares) 2,235
Cost of shares repurchased (45,382 shares) (463,815)
---------------------
Total 7,790,448
---------------------
CLASS C
Proceeds from sales of shares (381,563 shares) 4,020,977
Net asset value of shares issued from reinvestment of distributions (102 shares) 1,015
Cost of shares repurchased (38,337 shares) (402,328)
---------------------
Total 3,619,664
---------------------
CLASS M
Proceeds from sales of shares (14,556 shares) 146,910
Net asset value of shares issued from reinvestment of distributions (25 shares) 250
Cost of shares repurchased (3,732 shares) (40,572)
---------------------
Total 106,588
---------------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 30,124,461
---------------------
NET INCREASE IN NET ASSETS 23,297,759
NET ASSETS
Beginning of period 0
---------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0) $ 23,297,759
---------------------
---------------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix Small Cap Value Fund
- - ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS M
-------------- -------------- -------------- --------------
FROM INCEPTION FROM INCEPTION FROM INCEPTION FROM INCEPTION
11/20/97 TO 11/20/97 TO 11/20/97 TO 11/20/97 TO
8/31/98 8/31/98 8/31/98 8/31/98
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.01)(4)(5) (0.08)(4)(5) (0.08)(4)(5) (0.03)(4)(5)
Net realized and unrealized gain
(loss) (1.85) (1.82) (1.82) (1.84)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (1.86) (1.90) (1.90) (1.87)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- --
In excess of net investment income (0.03) (0.03) (0.03) (0.03)
------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.03) (0.03) (0.03) (0.03)
------ ------ ------ ------
Change in net asset value (1.89) (1.93) (1.93) (1.90)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 8.11 $ 8.07 $ 8.07 $ 8.10
------ ------ ------ ------
------ ------ ------ ------
Total return(1) (18.64)%(3) (19.07)%(3) (19.09)%(3) (18.80)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $14,519 $5,922 $2,770 $88
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.40%(2) 2.15%(2) 2.15%(2) 1.65%(2)
Net investment income (loss) (0.14)%(2) (1.01)%(2) (0.98)%(2) (0.30)%(2)
Portfolio turnover 105%(3) 105%(3) 105%(3) 105%(3)
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by invetsment adviser of $0.14,
$0.14, $0.14 and $0.14, respectively.
14 See Notes to Financial Statements
<PAGE>
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
The Phoenix Investment Trust 97 (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 Value Equity Fund's primary investment objective is to seek long-term
capital appreciation and its secondary objective is to seek current income by
investing in a diversified portfolio of common stocks.
Phoenix Small Cap Value Fund seeks long-term capital appreciation.
Each Fund offers Class A, Class B and Class C shares. Class M shares have been
closed to new investors. Class A shares are sold with the 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. Class M shares are sold with a front-end
sales charge of up to 3.50%. 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. 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. 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 and tax-exempt 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 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,
15
<PAGE>
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998 (CONTINUED)
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. 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.
H. 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
As compensation for its services to the Trust, the Adviser, Phoenix Investment
Counsel, Inc., an indirect majority-owned subsidiary of Phoenix Home Life Mutual
Insurance Company ("PHL"), is 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 $1-2 $2+
FUND BILLION BILLION BILLION
- - ---------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Value Equity Fund................. 0.75% 0.70% 0.65%
Small Cap Value Fund.............. 0.90% 0.85% 0.80%
</TABLE>
The Adviser has voluntarily agreed to assume total operating expenses of each
Fund excluding interest, taxes, brokerage fees, commissions and extraordinary
expenses, until August 31, 1998, to the extent that such expenses exceed the
following percentages of the average annual net asset values for each Fund:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS M
SHARES SHARES SHARES SHARES
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Value Equity Fund..... 1.25% 2.00% 2.00% 1.50%
Small Cap Value
Fund................ 1.40% 2.15% 2.15% 1.65%
</TABLE>
As Distributor of the Trust's shares, Phoenix Equity Planning Corp. ("PEPCO"),
an indirect majority-owned subsidiary of PHL, has advised the Trust that it
retained net selling commissions of $29,279 for Class A shares and $354 for
Class M shares, and deferred sales charges of $5,771 for Class B shares and
$3,876 for Class C shares for the period ended August 31, 1998. 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, 1.00% for Class C shares and 0.50% for Class M
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 period ended August
31, 1998, $100,907 was earned by the Distributor, $50,717 was paid to
unaffiliated participants, and $4,567 was paid to W.S. Griffith, an indirect
subsidiary of PHL.
As Financial Agent of each Fund, PEPCO received a fee for bookkeeping,
administration and pricing services through May 31, 1998, at an annual rate of
0.005% of average daily net assets up to $100 million, 0.04% of average daily
net assets of $100 million to $300 million, 0.03% of average daily net assets of
$300 million through $500 million, and 0.015% of average daily net assets
greater than $500 million; a minimum fee applied. Effective June 1, 1998, PEPCO
receives a financial agent fee equal to the sum of (1) the documented cost of
fund accounting and related services provided by PFPC Inc. (subagent to PEPCO),
plus (2) the documented cost to PEPCO to provide financial reporting, tax
services and oversight of subagent's performance. The current fee schedule of
PFPC Inc. ranges from 0.085% to 0.0125% of the average daily net asset values of
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 period ended August 31, 1998, transfer
agent fees were $127,774 of which PEPCO retained $141 which is net of the fees
paid to State Street.
At August 31, 1998, PHL and its affiliates held shares of the Trust which
aggregated the following:
<TABLE>
<CAPTION>
AGGREGATE
NET ASSET
SHARES VALUE
------------ ------------
<S> <C> <C>
Value Equity Fund-Class A........... 1,313,245 $ 11,740,410
Value Equity Fund-Class B........... 10,020 89,078
Value Equity Fund-Class C........... 10,016 89,042
Value Equity Fund-Class M........... 10,014 89,425
Small Cap Value Fund-Class A........ 471,506 3,823,914
Small Cap Value Fund-Class B........ 10,029 80,934
Small Cap Value Fund-Class C........ 10,026 80,910
Small Cap Value Fund-Class M........ 10,025 81,203
</TABLE>
16
<PAGE>
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998 (CONTINUED)
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the period ended August 31, 1998
(excluding U.S. Government and agency securities, and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Value Equity Fund.................... $ 44,430,205 $ 12,102,273
Small Cap Value Fund................. 51,096,620 21,042,107
</TABLE>
There were no purchases or sales of long-term U.S. Government and agency
securities during the period ended August 31, 1998.
4. MARKET 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. CAPITAL LOSS CARRYOVERS
Under current tax law, capital losses realized after October 31, 1997 may be
deferred and treated as occuring on the first day of the following fiscal year.
For the year ended August 31, 1998, the Value Equity Fund deferred capital
losses of $562,402.
6. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Funds have recorded
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of each of the Funds and are designed generally to
present undistributed income and realized gains on a tax basis which is
considered to be more informative to the shareholder. As of August 31, 1998, the
Funds recorded the following reclassifications to increase (decrease) the
accounts listed beow:
<TABLE>
<CAPTION>
UNDISTRIBUTED CAPITAL PAID
NET ACCUMULATED IN ON SHARES
INVESTMENT NET REALIZED OF BENEFICIAL
INCOME GAIN (LOSS) INTEREST
------------- ------------ -------------
<S> <C> <C> <C>
Value Equity
Fund........... 79,373 -- (79,373)
Small Cap Value
Fund........... 98,946 (25,965) (72,981)
</TABLE>
This report is not authorized for distribution to prospective investors in the
Phoenix Investment Trust 97 unless preceded or accompanied by an effective
Prospectus which includes information concerning the sales charge, the Fund's
record and other pertinent information.
17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- - ------------------------------------------------------
[LOGO]
To the Trustees and Shareholders of
Phoenix Investment Trust 97
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
Phoenix Value Equity Fund and Phoenix Small Cap Value Fund (constituting The
Phoenix Investment Trust 97, hereinafter referred to as the "Trust") at August
31, 1998, the results of each of their operations, the changes in each of their
net assets and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 1998 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
October 14, 1998
18
<PAGE>
PHOENIX INVESTMENT TRUST 97
PART C--OTHER INFORMATION
Item 23. Exhibits
<TABLE>
<S> <C>
a.1 Declaration of Trust of the Registrant previously filed as Exhibit 1.1 via EDGAR with Pre-Effective
Amendment No. 1 on November 3, 1997 and incorporated by reference.
a.2* Amendment to Declaration of Trust changing names of series to "Phoenix-Hollister Small Cap Value Fund"
and "Phoenix-Hollister Value Equity Fund" filed via EDGAR herewith.
b. None.
c.1 Reference is hereby made to Article IV of Registrant's Declaration of Trust.
d.1 Investment Advisory Agreement between Registrant and Phoenix Investment Counsel, Inc. filed as Exhibit
5.1 via EDGAR with Pre-Effective Amendment No. 1 on November 3, 1997 and incorporated by reference.
e.1 Underwriting Agreement between Registrant and Phoenix Equity Planning Corporation ("Equity Planning")
dated November 19, 1997 filed as Exhibit 6.1 via EDGAR with Post-Effective Amendment No. 1 on May
15, 1998 and incorporated 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 15, 1998 and incorporated 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 15, 1998 and incorporated by reference.
e.4 Form of Financial Institution Sales Contract for the Phoenix Family of Funds filed as Exhibit 6.4 via
EDGAR with Post-Effective Amendment No. 1 on May 15, 1998 and incorporated 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. 1 on November 3, 1997 and
incorporated by reference.
h.1 Transfer Agency and Service Agreement between Registrant and Equity Planning filed as Exhibit 9.1 via
EDGAR with Pre-Effective Amendment No. 1 on November 3, 1997 and incorporated 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 15, 1998 and
incorporated 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 15, 1998 and incorporated by reference.
h.4 First Amendment to the Amended and Restated Financial 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 15, 1998 and incorporated 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 with Post-Effective
Amendment No. 2 on October 30, 1998 and incorporated herein by reference.
i. Opinion of Counsel as to legality of the shares filed as Exhibit 10 via EDGAR with Pre-Effective
Amendment No. 1 on November 3, 1997 and incorporated by reference.
j.* Consent of Independent Accountant.
k. Not applicable.
l. Initial Capital Agreement filed as Exhibit 13 via EDGAR with Pre-Effective Amendment No. 1 on
November 3, 1997 and incorporated by reference.
m.1 Distribution Plan for Class A Shares filed as Exhibit 15.1 via EDGAR with Pre-Effective Amendment
No. 1 on November 3, 1997 and incorporated by reference.
m.2 Distribution Plan for Class B Shares filed as Exhibit 15.2 via EDGAR with Pre-Effective Amendment No.
1 on November 3, 1997 and incorporated by reference.
m.3 Distribution Plan for Class C Shares filed as Exhibit 15.3 via EDGAR with Pre-Effective Amendment No.
1 on November 3, 1997 and incorporated by reference.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
n.* Financial Data Schedules, reflected on EDGAR as exhibit 27.
o.1 Amended and Restated Plan pursuant to Rule 18f-3 effective November 5, 1997 filed as Exhibit 18 via
EDGAR with Post-Effective Amendment No. 1 on May 15, 1998 and incorporated by reference.
o.2 First Amendment to Amended and Restated Plan Pursuant to Rule 18f-3 effective August 26, 1998 filed
via EDGAR with Post-Effective Amendment No. 2 on October 30, 1998 and incorporated herein by
reference.
p.1* Powers of Attorney for Messrs. Chesek, Conway, Dalzell-Payne, Jeffries, Keith, Morris, Oates, Pedersen,
Roth, Segerson and Weicker and Ms. Curtiss filed via EDGAR herewith.
</TABLE>
- ---------
*Filed herewith.
Item 24. Persons Controlled by or Under Common Control With Registrant
No person is controlled by, or under common control, with the Registrant.
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 Agreement
between the Registrant and its Adviser 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 Agreement
on the part of the Adviser, the Adviser shall not be liable to the Registrant
or to any shareholder for any act or omission in the course of or connected in
any way with rendering services or for any losses that may be sustained in the
purchase, holding or sale of any security.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, directors, officers and controlling
persons of the Registrant and the investment adviser 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
Adviser" 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 Adviser, reference is made to the Adviser's
current Form ADV (SEC File No. 801-5995) filed under the Investment Advisers
Act of 1940, incorporated herein by reference.
Item 27. Principal Distributor
(a) Equity Planning also serves as the principal underwriter for the following
other registrants:
Phoenix-Aberdeen Series Fund, Phoenix California Tax Exempt Bonds, Inc.,
Phoenix Duff & Phelps Institutional Mutual Funds, Phoenix-Engemann Funds,
Phoenix Equity Series Fund, Phoenix Income and Growth Fund, 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, Inc., Phoenix Strategic Equity
Series Fund, Phoenix Worldwide Opportunities Fund, Phoenix Home Life
Variable Universal Life Account, Phoenix Home Life Variable Accumulation
Account, PHL Variable Accumulation Account, Phoenix Life and Annuity
Variable Universal Life Account and PHL Variable Separate Account MVAI.
(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
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Distributor with Registrant
- -------------------------- ------------------------------- -------------------------
<S> <C> <C>
Philip R. McLoughlin Director, Chairman and Trustee and President
56 Prospect Street President
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Senior Vice Vice President
100 Bright Meadow Blvd. President, Chief Financial
P.O. Box 2200 Officer and Treasurer
Enfield, CT 06083-2200
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, Clerk and
101 Munson Street Mutual Fund Secretary
P.O. Box 810 Customer Service and Clerk
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 Clerk and
56 Prospect Street Counsel and Secretary Assistant 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.
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, Massachusetts 01302, or its investment
adviser, 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this registration statement under Rule 485(b)
of the Securities Act and has duly caused this amendment to its 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 December,
1998.
PHOENIX INVESTMENT TRUST 97
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 December, 1998.
<TABLE>
<CAPTION>
Signature Title
- ------------------------------------------- ---------------------------------
<S> <C>
Trustee
- ----------------------------
Robert Chesek**
Trustee
- ----------------------------
E. Virgil Conway*
/s/ Nancy G. Curtiss Treasurer (Principal Financial
- ---------------------------- and Accounting Officer)
Nancy G. Curtiss
Trustee
- ----------------------------
Harry Dalzell-Payne*
Trustee
- ----------------------------
Francis E. Jeffries**
Trustee
- ----------------------------
Leroy Keith, Jr.**
/s/ Philip R. McLoughlin President and Trustee (Principal
- ---------------------------- Executive Officer)
Philip R. McLoughlin*
Trustee
- ----------------------------
Everett L. Morris*
Trustee
- ----------------------------
James M. Oates*
Trustee
- ----------------------------
Calvin J. Pedersen**
Trustee
- ----------------------------
Herbert Roth, Jr.*
Trustee
- ----------------------------
Richard E. Segerson*
Trustee
- ----------------------------
Lowell P. Weicker, Jr.**
By /s/ Philip R. McLoughlin
- ----------------------------
*Philip R. McLoughlin pursuant to powers
filed herewith.
</TABLE>
S-1
PHOENIX INVESTMENT TRUST 97
Certificate of Amendment to Declaration of Trust
The undersigned, individually as Trustee of Phoenix Investment Trust 97, a
Massachusetts business trust organized under a Declaration of Trust dated August
25, 1997 (the "Trust"), and as attorney-in-fact for each of the other Trustees
of the Trust pursuant to a certain Delegation and Power of Attorney dated August
26, 1998, executed by each of such Trustees, a copy of which is attached hereto,
do hereby certify that at a duly held meeting of the Board of Trustees, at which
a quorum was present, the Board of Trustees acting pursuant to Article III,
Section 3.1 and acting pursuant to Article VI, Section 6.3 of said Declaration
of Trust for the purpose of abolishing the class of shares designated as "Class
M Shares" and for the further purpose of amending the names of the "Phoenix
Small Cap Value Fund" and "Phoenix Value Equity Fund" voted to amend said Trust
effective on December 31, 1998, as follows:
1. Section 3.3(a) of Article III is hereby amended and restated to read as
follows:
"(a) Without in any manner limiting the rights of the Trustees set forth in the
immediately preceding paragraph, the Trustees hereby divide the Shares of
each of the Series described in Section 3.2, above, as amended, into three
Classes. The Classes of each such respective Series, so established, shall
be designated as "Class A Shares", "Class B Shares", and "Class C Shares".
The following preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption shall pertain to all Shares in each of the
foregoing Classes:
(1) The assets belonging to each Class shall be invested in the same
investment portfolio as the applicable Series.
(2) The dividends and distributions of investment income and capital gains
with respect to each Class shall be in such amounts as may be declared
from time to time by the Trustees, and the dividends and distributions
of each Class of a Series may vary from dividends and distributions of
investment income and capital gains with respect to the other Classes
of that Series to reflect differing allocations of the expenses of the
Trust between the holders of the Classes of such Series and any
resultant differences between the net asset value per share of each
Class of such Series, to such extent and for such purposes as the
Trustees may deem appropriate. The allocation of investment income or
capital gains and expenses and liabilities of the Trust among the
Classes of each Series between shares of each Class of such Series
shall be determined by the Trustees in a manner that is consistent
with Rule 18f-3 of the Investment Company Act.
(3) The holders of shares of each Class of a Series shall have (i)
exclusive voting rights with respect to provisions of any distribution
plan adopted by the Trust pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (a "Plan") applicable to the respective Class of a
<PAGE>
particular Series, and (ii) no voting rights with respect to
provisions of any Plan applicable to any other Class of that Series,
any other Series, or with regard to any other matter submitted to a
vote of shareholders which does not affect holders of that respective
Class of such Series.
(4) (i) Each Class B Share, other than a share purchased through the
automatic reinvestment of a dividend or a distribution with respect to
Class B Shares, shall be converted automatically, and without any
action or choice on the part of the holder thereof, into Class A
Shares on the date that is the first business day following the month
in which the eighth anniversary date of the date of issuance of the
Class B Share falls (the "Conversion Date"). With respect to Class B
Shares issued in an exchange or Series of exchanges for shares of
beneficial interest or common stock, as the case may be, of another
investment company or Class or Series thereof registered under the
Investment Company Act of 1940 pursuant to an exchange privilege
granted by the Trust, the date of issuance of the Class B Shares for
purposes of the immediately preceding sentence shall be the date of
issuance of the original shares of beneficial interest or common
stock, as the case may be.
(ii) Each Class B Share acquired through the automatic reinvestment of
a dividend or a distribution with respect to Class B Shares shall be
segregated in a separate sub-account. Each time any Class B Shares in
shareholder's Fund account (other than those described in the
aforedescribed applicable sub-account) convert to Class A Shares of
the same Series, an equal pro rata portion of the Class B Shares then
in the sub-account will also convert to Class A Shares of the same
Series without any action or choice on the part of the holder thereof.
The portion will be determined by the ratio that the shareholder's
Class B shares converting to Class A Shares bears to the shareholder's
total Class B Shares not acquired through dividends and distributions.
(iii) The conversion of Class B Shares to Class A Shares is subject to
the continuing availability of an opinion of counsel or a ruling of
the Internal Revenue Service that payment of different dividends on
Class A and Class B Shares does not result in the Trust's dividends or
distributions constituting "preferential dividends" under the Internal
Revenue Code of 1986, as amended, and that the conversion of shares
does not constitute a taxable event under federal income tax law.
(iv) The number of Class A Shares into which a share of Class B Shares
is converted pursuant to paragraphs (a)(4)(i) and (a)(4)(ii) hereof
shall equal the number (including for this purpose fractions of a
share) obtained by dividing the net asset value per share of the Class
B Shares (for purposes of sales and redemptions thereof on the
Conversion Date) by the net asset value per share of the Class A
Shares of the same Series (for purposes of sales and redemptions
thereof on the Conversion Date).
(v) On the Conversion Date, the Class B Shares converted into shares
of Class A Shares will cease to accrue dividends and will not longer
be deemed outstanding and the rights of the holders thereof (except
the right to receive (i) the number of Class A Shares of the same
Series into which the Class B Shares have been converted and (ii)
declared but unpaid dividends to the Conversion Date) will cease.
Certificates representing Class A Shares resulting from the conversion
need not be issued until certificates representing Class B Shares
converted, if such certificates have been issued, have been received
by the Trust or its agent duly endorsed for transfer.
(5) The net asset value of a Share shall reflect all indebtedness,
expenses and liabilities attributable to each applicable Class within
each respective Series. The net asset value of a
<PAGE>
Share shall be determined by dividing the net asset value of each
applicable Class of a particular Series by the number of Shares of
that Class outstanding within the Series. Notwithstanding the
foregoing, Shares of each Class shall represent an equal proportionate
interest in the assets belonging to the applicable Class within that
Series, subject to the liabilities of that particular Class. Shares of
each Class shall also represent an interest in the assets belonging to
such Series which shall be proportionate to the relative aggregate net
asset value of such Class relative to the aggregate net asset value of
the other Classes within said Series, subject to the liabilities of
that particular Series.
2. The first paragraph of Section 3.2 of Article III is hereby amended and
restated as follows:
"Without limiting the authority of the Trustees set forth in Section 3.1 to
establish and designate any further Series, the following two Series are
hereby established and designated: "Phoenix-Hollister Small Cap Value Fund"
and "Phoenix-Hollister Value Equity Fund." Shares of each Series
established and designated in this Section 3.2 and any Shares of any
further Series that may from time to time be established and designated by
the Trustees shall (unless the Trustees otherwise determine with respect to
some further Series at the time of establishing and designating the same)
have the following relative rights and preferences, subject to Article III,
Section 3.3, as amended, below:"
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of November, 1998.
/s/ Philip R. McLoughlin
-----------------------------------------
Philip R. McLoughlin, individually and as
attorney-in-fact for Robert Chesek, E. Virgil
Conway, Harry Dalzell-Payne, Francis E. Jefferies,
Leroy Keith, Jr., Everett L. Morris, James M.
Oates, Calvin J. Pedersen, Herbert Roth, Jr.,
Richard E. Segerson, and Lowell P. Weicker, Jr.
<PAGE>
DELEGATION AND POWER OF ATTORNEY
PHOENIX-ABERDEEN SERIES FUND
THE PHOENIX EDGE SERIES FUND
PHOENIX EQUITY SERIES FUND
PHOENIX INCOME AND GROWTH FUND
PHOENIX INVESTMENT TRUST 97
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
The undersigned, being all of the Trustees of Phoenix-Aberdeen Series, The
Phoenix Edge Series Fund, Phoenix Equity Series Fund, Phoenix Income and Growth
Fund, Phoenix Investment Trust 97, Phoenix Multi-Portfolio Fund, Phoenix
Multi-Sector Short Term Bond Fund, Phoenix Series Fund, Phoenix Strategic Equity
Series Fund, and Phoenix Worldwide Opportunities Fund (sometimes hereafter
collectively the "Funds"), other than Philip R. McLoughlin, do hereby declare,
delegate and certify as follows:
1. Pursuant to Section 2.2 of that certain Declaration of Trust dated
August 25, 1997 establishing Phoenix Investment Trust 97, pursuant to
Section 2.2 of that certain Agreement and Declaration of Trust dated
May 30, 1997, establishing Phoenix Equity Series Fund. Pursuant to
Section 2.2 of that certain Agreement and Declaration of Trust dated
May 31, 1996, as amended, establishing Phoenix-Aberdeen Series Fund,
pursuant to Section 2.2 of that certain Agreement and Declaration of
Trust dated February 18, 1986, as amended, establishing The Big Edge
Series Fund, now know as the Phoenix Edge Series Fund, pursuant to
Section 2.2 of that certain Declaration of Trust of Phoenix-Chase
Series Fund, as amended and restated July 28, 1980, as further
amended, now known as Phoenix Series Fund, and Section 2.2 of that
certain Agreement and Declaration of Trust dated October 15, 1987, as
amended, establishing the Phoenix Multi-Portfolio Fund, the
undersigned, and each of them, hereby appoints PHILIP R. MCLOUGHLIN,
his agent and attorney-in-fact for a period of one (1) year from the
date hereof, to execute any and all instruments including specifically
but without limitation amendments of either of said trust instruments
and appointments of trustee(s), provided that such action as evidenced
by such instrument shall have been adopted by requisite vote of the
Trustees and, where necessary, the Shareholders of such funds, such
vote or votes to be conclusively presumed by the execution of such
instrument by such attorney-in-fact.
2. Pursuant to Section 3.6 of that certain Declaration of Trust dated
June 25, 1986, as amended, establishing National Total Income Fund,
now known as Phoenix Income and Growth Fund, pursuant to Section 3.6
of that certain
<PAGE>
DELEGATION AND POWER OF ATTORNEY
August 26, 1998
Declaration of Trust dated June 25, 1986, as amended, establishing
National Stock Fund, now known as Phoenix Strategic Equity Series
Fund, and pursuant to Section 2.5 of that certain Declaration of Trust
dated February 20, 1992, as amended, establishing National Short-Term
Income Series, now known as Phoenix Multi-Sector Short Term Bond Fund,
and pursuant to Section 2.5 of that certain Declaration of Trust of
National Worldwide Opportunities Fund dated November 4, 1991, as
amended, now know as Phoenix Worldwide Opportunities Fund, the
undersigned, and each of them, hereby delegates to and appoints PHILIP
R. MCLOUGHLIN, his agent and attorney-in-fact for a period of one (1)
year from the date hereof, to execute any and all instruments,
including specifically but without limitation amendments of each and
every said trust instrument and appointments of trustee(s), provided
that such action as evidenced by such instrument shall have been
adopted by requisite vote of the Trustees and, where necessary, the
Shareholders of such funds, such vote or votes to be conclusively
presumed by the execution of such instrument by such attorney-in-fact.
3. The undersigned Trustees, and each of them, hereby further declare
that a photostatic, xerographic or other similar copy of this original
instrument shall be as effective as the original, and that, as to any
such amendment of any of the aforementioned trust agreements or
declarations, such copy shall be filed with such instrument of
amendment in the records of the Office of the Secretary of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, we have hereunto subscribed this Delegation and Power of
Attorney this 26th day of August, 1998.
/s/ Robert Chesek /s/ James M. Oates
- -------------------------- --------------------------------
Robert Chesek James M. Oates
/s/ E. Virgil Conway /s/ Calvin J. Pedersen
- -------------------------- --------------------------------
E. Virgil Conway Calvin J. Pedersen
/s/ Harry Dalzell-Payne /s/ Herbert Roth, Jr.
- -------------------------- --------------------------------
Harry Dalzell-Payne Herbert Roth, Jr.
/s/ Francis E. Jeffries /s/ Richard E. Segerson
- -------------------------- --------------------------------
Francis E. Jeffries Richard E. Segerson
/s/ Leroy Keith, Jr. /s/ Lowell P. Weicker, Jr.
- -------------------------- --------------------------------
Leroy Keith, Jr. Lowell P. Weicker, Jr.
/s/ Everett L. Morris
- --------------------------
Everett L. Morris
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 3 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated October 14, 1998, relating to the financial
statements and the financial highlights appearing in the August 31, 1998 Annual
Report to Shareholders of the Phoenix Investment Trust 97, which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights' in the Prospectus
and under the heading "Other Information -- Independent Accountants" in the
Statement of Additional Information.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 30, 1998
POWER OF ATTORNEY
I, the undersigned officer of the below-named mutual funds, hereby
constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg, or either
of them as my true and lawful attorneys and agents with full power to sign for
me in the capacity indicated below, any or all Registration Statements or
amendments thereto filed with the Securities and Exchange Commission under the
Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
each of said mutual funds, and hereby ratify and confirm my signature as it may
be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Nancy G. Curtiss
---------------------------------------
Nancy G. Curtiss, Treasurer
Principal Financial and Accounting Officer
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ E. Virgil Conway
---------------------------------------
E. Virgil Conway, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Harry Dalzell-Payne
---------------------------------------
Harry Dalzell-Payne, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Leroy Keith, Jr.
---------------------------------------
Leroy Keith, Jr., Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ James M. Oates
---------------------------------------
James M. Oates, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Herbert Roth, Jr.
---------------------------------------
Herbert Roth, Jr., Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Richard E. Segerson
---------------------------------------
Richard E. Segerson, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Robert Chesek
---------------------------------------
Robert Chesek, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Lowell P. Weicker, Jr.
---------------------------------------
Lowell P. Weicker, Jr., Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Everett L. Morris
---------------------------------------
Everett L. Morris, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Francis E. Jeffries
---------------------------------------
Francis E. Jeffries, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of the below-named
mutual funds, hereby constitute and appoint Philip R. McLoughlin and Thomas N.
Steenburg, or either of them as my true and lawful attorneys and agents with
full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to each of said mutual funds, and hereby ratify and
confirm my signature as it may be signed by said attorneys and agents.
Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
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
I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.
I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
August 27, 1998 /s/ Calvin J. Pedersen
---------------------------------------
Calvin J. Pedersen, Trustee
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001045018
<NAME> PHOENIX INVESTMENT TRUST 97
<SERIES>
<NUMBER> 011
<NAME> PHOENIX VALUE EQUITY FUND - CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> NOV-05-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 31860
<INVESTMENTS-AT-VALUE> 27014
<RECEIVABLES> 296
<ASSETS-OTHER> 18
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27328
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 177
<TOTAL-LIABILITIES> 177
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32507
<SHARES-COMMON-STOCK> 2210
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 70
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (580)
<ACCUM-APPREC-OR-DEPREC> (4846)
<NET-ASSETS> 27151
<DIVIDEND-INCOME> 240
<INTEREST-INCOME> 18
<OTHER-INCOME> 0
<EXPENSES-NET> (243)
<NET-INVESTMENT-INCOME> 15
<REALIZED-GAINS-CURRENT> (580)
<APPREC-INCREASE-CURRENT> (4846)
<NET-CHANGE-FROM-OPS> (5411)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (18)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2357
<NUMBER-OF-SHARES-REDEEMED> (149)
<SHARES-REINVESTED> 2
<NET-CHANGE-IN-ASSETS> 19766
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 124
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 525
<AVERAGE-NET-ASSETS> 20136
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> (1.07)
<PER-SHARE-DIVIDEND> (.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.94
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001045018
<NAME> PHOENIX INVESTMENT TRUST 97
<SERIES>
<NUMBER> 012
<NAME> PHOENIX VALUE EQUITY FUND - CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> NOV-05-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 31860
<INVESTMENTS-AT-VALUE> 27014
<RECEIVABLES> 296
<ASSETS-OTHER> 18
<OTHER-ITEMS-ASSETS> 0
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