<PAGE>
Phoenix Investment Partners
AUGUST 31, 1999
Phoenix-Hollister
Small Cap Value Fund
Phoenix-Hollister
Value Equity Fund
Hollister-SM-
ANNUAL REPORT
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
DEAR SHAREHOLDER:
Surprises -- or departures -- from a "consensus forecast" are almost daily
events in an investment portfolio. Economic, political, and earnings surprises
determine future results. Last year and this year have been buffeted by
surprises: Asian, Russian, and Latin American turbulence; collapsed oil prices
followed by sudden reinflation; a deflationary boom in the United States and
deflationary busts elsewhere; higher interest rates, higher real estate prices,
and higher stock market averages; lower technology prices, lower unemployment,
and lower prices for most finished goods.
This chaotic seesaw has made investors confused and nervous, driving most to
want those very few, widely admired companies that are richly priced relative to
the market. This sentiment reflects both investor optimism and the pride of
owning "successful" stocks. As a result, there is more potential for price
declines in the face of bad news than for further appreciation in response to
unexpected good news.
Conversely, we feel that our portfolios should be dominated by companies that
are financially successful, but that are temporarily held in low esteem and
neglected by many investors. We feel these companies will respond more
positively to good news than bad news. As value investors, we view ourselves as
opportunists, poised to take advantage of any crisis as we did in the fall of
last year. Although we remain steadfastly optimistic about the future financial
weather, we believe we are prepared for any storms that the new millennium might
bring.
Sincerely,
/s/ Christian C. Bertelsen
Christian C. Bertelsen
MANAGING DIRECTOR
AUGUST 31, 1999
Mutual Funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
1
<PAGE>
PHOENIX-HOLLISTER SMALL CAP VALUE FUND
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 8/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 8/31/99 DATE
------- ---------- ---------
<S> <C> <C> <C>
Class A Shares at NAV(2) 40.90% 7.99% 11/20/97
Class A Shares at POP(3) 34.21 5.07 11/20/97
Class B Shares at NAV(2) 39.86 7.22 11/20/97
Class B Shares with CDSC(4) 36.02 5.16 11/20/97
Class C Shares at NAV(2) 39.86 7.20 11/20/97
Class C Shares with CDSC(4) 39.86 7.20 11/20/97
Russell 2000 Value Index(6) 14.09 (2.56) 11/20/97
</TABLE>
<TABLE>
<C> <S>
(1) Total returns are historical and include changes in share
price and the reinvestment of both dividends and capital
gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the
effect of any sales charge.
(3) "POP" (Public Offering Price) total returns include the
effect of the maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to
redemptions of certain classes of shares that do not have
a sales charge applied at the time of purchase. CDSC
charges for B shares decline from 5% to 0% over a five
year period. CDSC charges for C shares are 1% in the
first year and 0% thereafter.
(5) This chart illustrates POP returns on Class A shares and
CDSC returns for Class B and Class C shares since
inception.
(6) The Russell 2000 Value Index is a measure of
small-capitalization, value-oriented stock total return
performance. The index's performance does not reflect
sales charges.
All returns represent past performance which may not be
indicative of future performance. The investment return
and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth
more or less than their original cost.
</TABLE>
GROWTH OF $10,000 PERIODS ENDING 8/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-HOLLISTER SMALL CAP PHOENIX-HOLLISTER SMALL CAP PHOENIX-HOLLISTER SMALL CAP RUSSELL 2000 VALUE INDEX(6)
VALUE FUND CLASS A(5) VALUE FUND CLASS B(5) VALUE FUND CLASS C(5)
<S> <C> <C> <C> <C>
11/20/97 $9,525 $10,000 $10,000 $10,000
08/31/98 $7,750 $8,093 $8,091 $8,370
08/31/99 $10,919 $10,936 $11,316 $9,549
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
11/20/97 (inception of the Fund) in Class A, Class B and Class C shares. The
total return for Class A shares reflects the maximum sales charge of 4.75% on
the initial investment. The total return for Class B shares reflects the CDSC
charges which decline from 5% to 0% over a five year period. The total return
for Class C shares reflects the CDSC charges which are 1% in the first year and
0% thereafter. Performance assumes dividends and capital gains are reinvested.
SECTOR WEIGHTINGS 8/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 29%
Financials 23%
Health-Care 11%
Consumer Cyclicals 11%
Capital Goods 9%
Utilities 5%
Communication Services 3%
Other 9%
</TABLE>
2
<PAGE>
Phoenix-Hollister Small Cap Value Fund
TEN LARGEST HOLDINGS AT AUGUST 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Atmel Corp. 4.8%
LOGIC INTEGRATED CIRCUIT MANUFACTURER
2. Calpine Corp. 4.4%
INVOLVED IN THE SALE OF ELECTRICITY AND
OPERATES POWER GENERATION FACILITIES
3. Valassis Communications, Inc. 4.2%
PUBLISHER OF SALES PROMOTION MATERIALS
4. Amkor Technology, Inc. 3.9%
PROVIDES SEMICONDUCTOR PACKAGING AND TEST
SERVICES
5. Dallas Semiconductor Corp. 3.4%
MARKETS ELECTRONIC CHIPS AND CHIP-BASED
SUBSYSTEMS
6. SMART Modular Technologies, Inc. 3.4%
PROVIDES MODULAR PRODUCT SOLUTIONS
7. Network Access Solutions Corp. 3.3%
A DATA COMMUNICATIONS SERVICE PROVIDER
8. Horace Mann Educators Corp. 3.2%
PROVIDES LIFE INSURANCE PRODUCTS TO
EDUCATORS AND THEIR FAMILIES
9. Computer Network Technology Corp. 2.8%
MARKETS AND SUPPORTS A RANGE OF HARDWARE
AND SOFTWARE PRODUCTS FOR
BUSINESS-CRITICAL NETWORKS AND BUSINESS
APPLICATIONS.
10. C-Cube Microsystems, Inc. 2.7%
A MARKET LEADER IN DIGITAL VIDEO
COMPRESSION
</TABLE>
INVESTMENTS AT AUGUST 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C> <C>
COMMON STOCKS--92.7%
BANKS (REGIONAL)--2.4%
Cullen/Frost Bankers, Inc............. 40,000 $ 1,045,000
BIOTECHNOLOGY--2.5%
Cell Genesys, Inc.(b)................. 120,000 1,065,000
CHEMICALS (SPECIALTY)--1.0%
Fuller (H.B.) Co...................... 7,000 421,750
COMMUNICATIONS EQUIPMENT--7.8%
C-Cube Microsystems, Inc.(b).......... 42,000 1,168,125
General Instrument Corp.(b)........... 18,000 885,375
L-3 Communications Holdings,
Inc.(b)............................... 15,000 595,312
ViaSat, Inc.(b)....................... 47,000 696,187
----------------
3,344,999
----------------
COMPUTERS (HARDWARE)--2.8%
Computer Network Technology
Corp.(b).............................. 75,000 1,185,937
COMPUTERS (SOFTWARE & SERVICES)--0.6%
Network Associates, Inc.(b)........... 15,000 253,125
CONSTRUCTION (CEMENT & AGGREGATES)--1.3%
Texas Industries, Inc................. 18,000 576,000
ELECTRICAL EQUIPMENT--4.0%
Black Box Corp.(b).................... 25,000 1,146,875
Littelfuse, Inc.(b)................... 28,000 556,500
----------------
1,703,375
----------------
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C> <C>
ELECTRONICS (SEMICONDUCTORS)--15.5%
Amkor Technology, Inc.(b)............. 96,000 $ 1,692,000
Atmel Corp.(b)........................ 52,000 2,044,250
Dallas Semiconductor Corp............. 29,000 1,464,500
SMART Modular Technologies, Inc.(b)... 70,000 1,456,875
----------------
6,657,625
----------------
ENGINEERING & CONSTRUCTION--3.4%
Dycom Industries, Inc.(b)............. 30,000 926,250
MasTec, Inc.(b)....................... 19,000 530,812
----------------
1,457,062
----------------
HEALTH CARE (GENERIC AND OTHER)--2.6%
Dura Pharmaceuticals, Inc.(b)......... 85,000 1,131,562
HEALTH CARE (MANAGED CARE)--2.1%
Trigon Healthcare, Inc.(b)............ 25,000 907,812
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--3.5%
Cooper Companies, Inc. (The).......... 35,000 837,813
Eclipse Surgical Technologies, Inc.
(b)................................... 45,000 646,875
----------------
1,484,688
----------------
HOMEBUILDING--1.8%
Lennar Corp........................... 40,000 760,000
INSURANCE (PROPERTY-CASUALTY)--9.2%
Commerce Group, Inc. (The)............ 20,000 445,000
Frontier Insurance Group, Inc......... 60,000 727,500
Horace Mann Educators Corp............ 45,000 1,355,625
Radian Group, Inc..................... 15,000 694,688
RenaissanceRe Holdings Ltd............ 11,000 397,375
</TABLE>
See Notes to Financial Statements 3
<PAGE>
Phoenix-Hollister Small Cap Value Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C> <C>
INSURANCE (PROPERTY-CASUALTY)--CONTINUED
Selective Insurance Group, Inc........ 17,000 $ 302,813
----------------
3,923,001
----------------
MANUFACTURING (DIVERSIFIED)--1.6%
Furon Co.............................. 43,000 688,000
OIL & GAS (DRILLING & EQUIPMENT)--0.5%
Gulf Island Fabrication, Inc.(b)...... 18,000 231,750
POWER PRODUCERS (INDEPENDENT)--4.4%
Calpine Corp.(b)...................... 21,000 1,903,125
REITS--7.1%
Health Care REIT, Inc................. 31,000 623,875
Hospitality Properties Trust.......... 21,000 564,375
LaSalle Hotel Properties.............. 60,000 866,250
RFS Hotel Investors, Inc.............. 37,000 423,188
Sunstone Hotel Investors, Inc......... 61,000 549,000
----------------
3,026,688
----------------
RESTAURANTS--0.9%
Lone Star Steakhouse & Saloon,
Inc.(b)............................... 49,000 373,625
RETAIL (SPECIALTY)--2.4%
Claire's Stores, Inc.................. 55,000 1,034,688
RETAIL (SPECIALTY-APPAREL)--3.4%
Men's Wearhouse, Inc. (The)(b)........ 25,000 515,625
Talbots, Inc. (The)................... 30,000 928,125
----------------
1,443,750
----------------
SAVINGS & LOAN COMPANIES--1.4%
Bank United Corp. Class A............. 18,000 617,625
SERVICES (COMMERCIAL & CONSUMER)--3.0%
Crown Castle International Corp.(b)... 35,000 529,375
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C> <C>
SERVICES (COMMERCIAL & CONSUMER)--CONTINUED
Wackenhut Corp. (The) Class A......... 31,000 $ 749,813
----------------
1,279,188
----------------
SPECIALTY PRINTING--4.2%
Valassis Communications, Inc.(b)...... 41,000 1,793,750
TELEPHONE--3.3%
Network Access Solutions Corp.(b)..... 100,000 1,425,000
- -----------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $36,082,913) 39,734,125
- -----------------------------------------------------------------------
FOREIGN COMMON STOCKS--2.0%
COMMUNICATIONS EQUIPMENT--2.0%
Gilat Satellite Networks Ltd.
(Israel)(b)........................... 18,000 848,250
- -----------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $1,018,432) 848,250
- -----------------------------------------------------------------------
UNIT INVESTMENT TRUSTS--2.5%
AMEX Financial Select Sector
Depository Receipts................... 14,000 330,969
Diamonds Trust, Series I.............. 7,000 756,875
- -----------------------------------------------------------------------
TOTAL UNIT INVESTMENT TRUSTS
(IDENTIFIED COST $1,107,984) 1,087,844
- -----------------------------------------------------------------------
TOTAL INVESTMENTS--97.2%
(IDENTIFIED COST $38,209,329) 41,670,219(a)
Cash and receivables, less liabilities--2.8% 1,215,485
----------------
NET ASSETS--100.0% $ 42,885,704
================
</TABLE>
<TABLE>
<S> <C>
(a) Federal Income Tax Information: Net unrealized appreciation
of investment securities is comprised of gross appreciation
of $5,558,332 and gross depreciation of $2,221,257 for
federal income tax purposes. At August 31, 1999, the
aggregate cost of securities for federal income tax purposes
was $38,333,144.
(b) Non-income producing.
</TABLE>
4 See Notes to Financial Statements
<PAGE>
Phoenix-Hollister Small Cap Value Fund
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $38,209,329) $41,670,219
Cash 38,010
Receivables
Investment securities sold 2,111,564
Fund shares sold 54,659
Dividends and interest 22,825
Prepaid expenses 621
-----------
Total assets 43,897,898
-----------
LIABILITIES
Payables
Investment securities purchased 780,186
Fund shares repurchased 19,391
Investment advisory fee 98,718
Distribution fee 19,063
Transfer agent fee 17,867
Trustees' fee 8,617
Financial agent fee 6,185
Accrued expenses 62,167
-----------
Total liabilities 1,012,194
-----------
NET ASSETS $42,885,704
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of
beneficial interest $39,329,797
Accumulated net realized gain 95,017
Net unrealized appreciation 3,460,890
-----------
NET ASSETS $42,885,704
===========
CLASS A
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $26,926,466) 2,360,383
Net asset value per share $11.41
Offering price per share
$11.41/(1-4.75%) $11.98
CLASS B
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $9,493,760) 842,647
Net asset value and offering price
per share $11.27
CLASS C
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $6,465,478) 573,841
Net asset value and offering price
per share $11.27
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 479,080
Interest 36,035
Foreign taxes withheld (480)
-----------
Total investment income 514,635
-----------
EXPENSES
Investment advisory fee 304,049
Distribution fee, Class A 52,948
Distribution fee, Class B 79,934
Distribution fee, Class C 45,972
Distribution fee, Class M 35
Financial agent fee 57,911
Transfer agent 73,221
Printing 21,973
Professional 18,982
Registration 18,554
Organizational 17,418
Trustees 16,458
Custodian 13,030
Miscellaneous 5,192
-----------
Total expenses 725,677
Less expenses borne by
investment adviser (158,287)
-----------
Net expenses 567,390
-----------
NET INVESTMENT LOSS (52,755)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on securities 192,893
Net change in unrealized
appreciation (depreciation) on
investments 10,201,578
-----------
NET GAIN ON INVESTMENTS 10,394,471
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $10,341,716
===========
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix-Hollister Small Cap Value Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From
Inception
Year Ended 11/20/97 to
8/31/99 8/31/98
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (52,755) $ (66,488)
Net realized gain (loss) 192,893 12,932
Net change in unrealized appreciation (depreciation) 10,201,578 (6,740,688)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS 10,341,716 (6,794,244)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (29,557) --
Net realized gains, Class B (11,989) --
Net realized gains, Class C (5,756) --
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 (47,302) (32,458)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (1,080,990 and 2,003,648
shares, respectively) 11,142,835 20,830,478
Net asset value of shares issued from reinvestment of
distributions (2,728 and 2,693 shares, respectively) 27,226 26,901
Cost of shares repurchased (513,966 and 215,710 shares,
respectively) (5,211,308) (2,249,618)
----------- -----------
Total 5,958,753 18,607,761
----------- -----------
CLASS B
Proceeds from sales of shares (328,886 and 779,154 shares,
respectively) 3,326,336 8,252,028
Net asset value of shares issued from reinvestment of
distributions (1,052 and 224 shares, respectively) 10,468 2,235
Cost of shares repurchased (221,287 and 45,382 shares,
respectively) (2,235,715) (463,815)
----------- -----------
Total 1,101,089 7,790,448
----------- -----------
CLASS C
Proceeds from sales of shares (338,260 and 381,563 shares,
respectively) 3,417,996 4,020,977
Net asset value of shares issued from reinvestment of
distributions (397 and 102 shares, respectively) 3,935 1,015
Cost of shares repurchased (108,144 and 38,337 shares,
respectively) (1,092,574) (402,328)
----------- -----------
Total 2,329,357 3,619,664
----------- -----------
CLASS M
Proceeds from sales of shares (0 and 14,556 shares,
respectively) -- 146,910
Net asset value of shares issued from reinvestment of
distributions (0 and 25 shares, respectively) -- 250
Cost of shares repurchased (10,849 and 3,732 shares,
respectively) (95,668) (40,572)
----------- -----------
Total (95,668) 106,588
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 9,293,531 30,124,461
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS 19,587,945 23,297,759
NET ASSETS
Beginning of period 23,297,759 0
----------- -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) OF $0 AND $0,
RESPECTIVELY] $42,885,704 $23,297,759
=========== ===========
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix-Hollister Small Cap Value Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------------------------- -------------------------- --------------------------
FROM FROM FROM
YEAR INCEPTION YEAR INCEPTION YEAR INCEPTION
ENDED 11/20/97 TO ENDED 11/20/97 TO ENDED 11/20/97 TO
8/31/99 8/31/98 8/31/99 8/31/98 8/31/99 8/31/98
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $8.11 $10.00 $8.07 $10.00 $8.07 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) 0.01(1)(2) (0.01)(1)(2) (0.06)(1)(3) (0.08)(1)(3) (0.06)(1)(4) (0.08)(1)(4)
Net realized and unrealized
gain (loss) 3.31 (1.85) 3.28 (1.82) 3.28 (1.82)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 3.32 (1.86) 3.22 (1.90) 3.22 (1.90)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net realized
gains (0.02) -- (0.02) -- (0.02) --
In excess of net investment
income -- (0.03) -- (0.03) -- (0.03)
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (0.02) (0.03) (0.02) (0.03) (0.02) (0.03)
------- ------- ------- ------- ------- -------
Change in net asset value 3.30 (1.89) 3.20 (1.93) 3.20 (1.93)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $11.41 $8.11 $11.27 $8.07 $11.27 $8.07
======= ======= ======= ======= ======= =======
Total return(5) 40.90% (18.64)%(6) 39.86% (19.07)%(6) 39.86% (19.09)%(6)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $26,926 $14,519 $9,494 $5,922 $6,465 $2,770
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 1.40% 1.40%(7) 2.15% 2.15%(7) 2.15% 2.15%(7)
Net investment income (loss) 0.15% (0.14)%(7) (0.60)% (1.01)%(7) (0.60)% (0.98)%(7)
Portfolio turnover 203% 105%(6) 203% 105%(6) 203% 105%(6)
</TABLE>
(1) Computed using average shares outstanding.
(2) Includes reimbursement of operating expenses by investment adviser of $0.06
and $0.14, respectively.
(3) Includes reimbursement of operating expenses by investment adviser of $0.06
and $0.14, respectively.
(4) Includes reimbursement of operating expenses by investment adviser of $0.06
and $0.14, respectively.
(5) Maximum sales charges are not reflected in the total return calculation.
(6) Not annualized.
(7) Annualized.
See Notes to Financial Statements 7
<PAGE>
PHOENIX-HOLLISTER VALUE EQUITY FUND
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 8/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 8/31/99 DATE
------- ---------- ---------
<S> <C> <C> <C>
Class A Shares at NAV(2) 35.89% 11.49% 11/5/97
Class A Shares at POP(3) 29.44 8.55 11/5/97
Class B Shares at NAV(2) 35.05 10.68 11/5/97
Class B Shares with CDSC(4) 31.21 8.73 11/5/97
Class C Shares at NAV(2) 34.91 10.66 11/5/97
Class C Shares with CDSC(4) 34.91 10.66 11/5/97
S&P 500 Index(6) 39.88 22.26 11/5/97
</TABLE>
<TABLE>
<C> <S>
(1) Total returns are historical and include changes in share
price and the reinvestment of both dividends and capital
gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the
effect of any sales charge.
(3) "POP" (Public Offering Price) total returns include the
effect of the maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to
redemptions of certain classes of shares that do not have
a sales charge applied at the time of purchase. CDSC
charges for B shares decline from 5% to 0% over a five
year period. CDSC charges for C shares are 1% in the
first year and 0% thereafter.
(5) This chart illustrates POP returns on Class A shares and
CDSC returns for Class B and Class C shares since
inception.
(6) The S&P 500 Index is a measure of stock market total
return performance. The index's performance does not
reflect sales charges.
All returns represent past performance which may not be
indicative of future performance. The investment return
and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth
more or less than their original cost.
</TABLE>
GROWTH OF $10,000 PERIODS ENDING 8/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-HOLLISTER PHOENIX-HOLLISTER PHOENIX-HOLLISTER S&P 500 INDEX(6)
VALUE EQUITY FUND CLASS A(5) VALUE EQUITY FUND CLASS B(5) VALUE EQUITY FUND CLASS C(5)
<S> <C> <C> <C> <C>
11/04/97 $9,525.00 $10,000.00 $10,000.00 $10,000.00
08/31/98 $8,546.00 $8,908.00 $8,914.00 $10,310.00
08/31/99 $11,613.00 $11,647.00 $12,027.00 $14,421.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
11/5/97 (inception of the Fund) in Class A, Class B and Class C shares. The
total return for Class A shares reflects the maximum sales charge of 4.75% on
the initial investment. The total return for Class B shares reflects the CDSC
charges which decline from 5% to 0% over a five year period. The total return
for Class C shares reflects the CDSC charges which are 1% in the first year and
0% thereafter. Performance assumes dividends and capital gains are reinvested.
SECTOR WEIGHTINGS 8/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Capital Goods 26%
Technology 25%
Financials 25%
Consumer Staples 8%
Communication Services 7%
Basic Materials 4%
Consumer Cyclicals 3%
Other 2%
</TABLE>
8
<PAGE>
Phoenix-Hollister Value Equity Fund
TEN LARGEST HOLDINGS AT AUGUST 31, 1999 (AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<C> <S> <C>
1. Honeywell, Inc. 5.1%
SUPPLIES PRODUCTS, SYSTEMS AND SERVICES TO
CONSERVE ENERGY
2. Corning, Inc. 4.0%
PRODUCES OPTICAL FIBER AND CABLE,
SPECIALIZED GLASS PRODUCTS,
AND TV GLASS PANELS
3. Alcatel SA ADR (France) 3.6%
COMMUNICATIONS, TRANSPORTATION AND ENERGY
INFRASTRUCTURES SUPPLIER
4. SLM Holding Corp. 3.4%
PROVIDES FUNDING AND SERVICING SUPPORT FOR
HIGHER EDUCATION LOANS
5. Chase Manhattan Corp. (The) 3.4%
DOMESTIC AND INTERNATIONAL FINANCIAL
SERVICES PROVIDER
6. Citigroup, Inc. 3.2%
DIVERSIFIED FINANCIAL SERVICES HOLDING
COMPANY
7. Eaton Corp. 3.2%
GLOBAL MANUFACTURER OF HIGHLY ENGINEERED
PRODUCTS
8. American International Group, Inc. 3.2%
INTERNATIONAL INSURANCE AND FINANCIAL
SERVICES PROVIDER
9. SAP AG Sponsored ADR 3.0%
PROVIDES BUSINESS APPLICATIONS SOFTWARE
AND CONSULTING SERVICES
10. Xerox Corp. 2.9%
DOCUMENT-RELATED BUSINESS SOLUTIONS,
PRODUCTS AND SERVICES PROVIDER
</TABLE>
INVESTMENTS AT AUGUST 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C> <C>
COMMON STOCKS--81.0%
AUTO PARTS & EQUIPMENT--2.8%
Delphi Automotive Systems Corp.......... 82,500 $ 1,546,875
BANKS (MONEY CENTER)--8.3%
Bank of America Corp.................... 20,000 1,210,000
Chase Manhattan Corp. (The)............. 22,000 1,841,125
Morgan (J.P.) & Co., Inc................ 11,500 1,485,656
----------------
4,536,781
----------------
BEVERAGES (ALCOHOLIC)--2.8%
Anheuser-Busch Companies, Inc........... 20,000 1,540,000
BROADCASTING (TELEVISION, RADIO & CABLE)--2.2%
MediaOne Group, Inc.(b)................. 18,000 1,183,500
CHEMICALS--0.9%
Praxair, Inc............................ 10,000 470,000
CHEMICALS (DIVERSIFIED)--2.8%
Monsanto Co............................. 38,000 1,560,375
COMMUNICATIONS EQUIPMENT--2.8%
CIENA Corp.(b).......................... 44,000 1,545,500
COMPUTERS (NETWORKING)--1.4%
3Com Corp.(b)........................... 30,000 744,375
COMPUTERS (SOFTWARE & SERVICES)--3.5%
Computer Associates International,
Inc..................................... 22,000 1,243,000
Healtheon Corp.(b)...................... 20,000 676,250
----------------
1,919,250
----------------
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C> <C>
ELECTRICAL EQUIPMENT--5.1%
Honeywell, Inc.......................... 24,800 $ 2,814,800
ENGINEERING & CONSTRUCTION--2.3%
Dycom Industries, Inc.(b)............... 40,000 1,235,000
ENTERTAINMENT--2.6%
Royal Caribbean Cruises Ltd............. 30,000 1,404,375
FINANCIAL (DIVERSIFIED)--8.7%
Citigroup, Inc.......................... 40,000 1,777,500
Fannie Mae.............................. 18,000 1,118,250
SLM Holding Corp........................ 42,000 1,855,875
----------------
4,751,625
----------------
INSURANCE (MULTI-LINE)--5.8%
American International Group, Inc....... 19,000 1,761,063
CIGNA Corp.............................. 16,000 1,437,000
----------------
3,198,063
----------------
MACHINERY (DIVERSIFIED)--2.2%
Caterpillar, Inc........................ 21,000 1,189,125
MANUFACTURING (DIVERSIFIED)--9.2%
Corning, Inc............................ 33,000 2,194,500
Eaton Corp.............................. 18,000 1,764,000
Illinois Tool Works, Inc................ 14,000 1,091,125
----------------
5,049,625
----------------
MANUFACTURING (SPECIALIZED)--2.4%
Diebold, Inc............................ 50,000 1,331,250
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix-Hollister Value Equity Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C> <C>
OFFICE EQUIPMENT & SUPPLIES--2.5%
Pitney Bowes, Inc....................... 23,000 $ 1,357,000
OIL (INTERNATIONAL INTEGRATED)--0.7%
Exxon Corp.............................. 5,000 394,375
PHOTOGRAPHY/IMAGING--2.9%
Xerox Corp.............................. 33,600 1,604,400
RAILROADS--0.9%
Union Pacific Corp...................... 10,000 486,875
SERVICES (DATA PROCESSING)--1.6%
First Data Corp......................... 20,000 880,000
TELECOMMUNICATIONS (LONG DISTANCE)--2.2%
AT&T Corp............................... 27,000 1,215,000
TELEPHONE--4.4%
BellSouth Corp.......................... 27,000 1,221,750
GTE Corp................................ 17,000 1,166,625
----------------
2,388,375
----------------
- -------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $40,774,132) 44,346,544
- -------------------------------------------------------------------------
FOREIGN COMMON STOCKS--11.3%
COMMUNICATIONS EQUIPMENT--8.3%
Alcatel SA ADR (France)................. 63,000 1,949,062
Newbridge Networks Corp. (Canada)(b).... 41,000 1,124,937
Telefonaktiebolaget LM Ericsson
Sponsored ADR (Sweden).................. 45,000 1,465,313
----------------
4,539,312
----------------
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)--3.0%
SAP AG Sponsored ADR (Germany).......... 50,000 $ 1,650,000
- -------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $5,667,039) 6,189,312
- -------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--92.3%
(IDENTIFIED COST $46,441,171) 50,535,856
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
----------- --------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--0.5%
COMMERCIAL PAPER--0.5%
Koch Industries, Inc. 5.52%,
9/1/99......................... A-1+ $285 285,000
- --------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $285,000) 285,000
- --------------------------------------------------------------------------
TOTAL INVESTMENTS--92.8%
(IDENTIFIED COST $46,726,171) 50,820,856(a)
Cash and receivables, less liabilities--7.2% 3,970,384
----------------
NET ASSETS--100.0% $ 54,791,240
================
</TABLE>
<TABLE>
<S> <C>
(a) Federal Income Tax Information: Net unrealized appreciation
of investment securities is comprised of gross appreciation
of $5,746,517 and gross depreciation of $1,740,723 for
federal income tax purposes. At August 31, 1999, the
aggregate cost of securities for federal income tax purposes
was $46,815,062.
(b) Non-income producing.
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix-Hollister Value Equity Fund
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $46,726,171) $50,820,856
Cash 188,813
Receivables
Investment securities sold 4,696,360
Fund shares sold 104,660
Dividends and interest 58,236
Prepaid expenses 688
-----------
Total assets 55,869,613
-----------
LIABILITIES
Payables
Investment securities purchased 826,998
Fund shares repurchased 9,630
Investment advisory fee 123,631
Distribution fee 30,053
Transfer agent fee 12,300
Trustees' fee 8,617
Financial agent fee 7,015
Accrued expenses 60,129
-----------
Total liabilities 1,078,373
-----------
NET ASSETS $54,791,240
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of
beneficial interest $51,189,350
Accumulated net realized loss (492,795)
Net unrealized appreciation 4,094,685
-----------
NET ASSETS $54,791,240
===========
CLASS A
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $26,974,253) 2,226,738
Net asset value per share $12.11
Offering price per share
$12.11/(1-4.75%) $12.71
CLASS B
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $24,709,291) 2,059,944
Net asset value and offering price
per share $12.00
CLASS C
Shares of beneficial interest
outstanding, $1 par value,
unlimited authorization
(Net Assets $3,107,696) 258,908
Net asset value and offering price
per share $12.00
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 599,766
Interest 7,025
Foreign taxes withheld (9,251)
----------
Total investment income 597,540
----------
EXPENSES
Investment advisory fee 323,222
Distribution fee, Class A 65,123
Distribution fee, Class B 141,449
Distribution fee, Class C 28,862
Distribution fee, Class M 42
Financial agent fee 65,155
Transfer agent 68,419
Registration 24,388
Professional 20,406
Trustees 20,080
Custodian 14,986
Organizational 13,715
Printing 10,047
Miscellaneous 7,440
----------
Total expenses 803,334
Less expenses borne by investment
adviser (137,203)
----------
Net expenses 666,131
----------
NET INVESTMENT LOSS (68,591)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on securities 87,678
Net change in unrealized appreciation
(depreciation) on investments 8,940,662
----------
NET GAIN ON INVESTMENTS 9,028,340
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $8,959,749
==========
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Phoenix-Hollister Value Equity Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From
Inception
Year Ended 11/5/97 to
8/31/99 8/31/98
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (68,591) $ 15,327
Net realized gain (loss) 87,678 (579,675)
Net change in unrealized appreciation (depreciation) 8,940,662 (4,845,977)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS 8,959,749 (5,410,325)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (61,486) (11,186)
Net investment income, Class B (2,136) (2,802)
Net investment income, Class C (982) (1,239)
Net investment income, Class M -- (100)
In excess of net investment income, Class A (49,116) (6,975)
In excess of net investment income, Class B (1,706) (1,747)
In excess of net investment income, Class C (784) (773)
In excess of net investment income, Class M -- (61)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (116,210) (24,883)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (511,993 and 2,356,722
shares, respectively) 6,168,646 25,504,049
Net asset value of shares issued from reinvestment of
distributions (9,487 and 1,823 shares, respectively) 110,073 18,045
Cost of shares repurchased (504,840 and 148,447 shares,
respectively) (6,064,609) (1,615,279)
----------- -----------
Total 214,110 23,906,815
----------- -----------
CLASS B
Proceeds from sales of shares (1,603,387 and 621,551
shares, respectively) 20,006,209 6,514,113
Net asset value of shares issued from reinvestment of
distributions (298 and 370 shares, respectively) 3,446 3,662
Cost of shares repurchased (138,841 and 26,821 shares,
respectively) (1,652,638) (296,436)
----------- -----------
Total 18,357,017 6,221,339
----------- -----------
CLASS C
Proceeds from sales of shares (87,709 and 260,718 shares,
respectively) 985,203 2,734,842
Net asset value of shares issued from reinvestment of
distributions (122 and 108 shares, respectively) 1,405 1,073
Cost of shares repurchased (54,302 and 35,447 shares,
respectively) (656,192) (375,236)
----------- -----------
Total 330,416 2,360,679
----------- -----------
CLASS M
Proceeds from sales of shares (0 and 12,175 shares,
respectively) -- 122,245
Net asset value of shares issued from reinvestment of
distributions (0 and 16 shares, respectively) -- 161
Cost of shares repurchased (10,024 and 2,167 shares,
respectively) (105,146) (24,727)
----------- -----------
Total (105,146) 97,679
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 18,796,397 32,586,512
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS 27,639,936 27,151,304
NET ASSETS
Beginning of period 27,151,304 0
----------- -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) OF $0 AND $69,817,
RESPECTIVELY] $54,791,240 $27,151,304
=========== ===========
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Phoenix-Hollister Value Equity Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------- ------------------------- -------------------------
FROM FROM FROM
YEAR INCEPTION YEAR INCEPTION YEAR INCEPTION
ENDED 11/5/97 TO ENDED 11/5/97 TO ENDED 11/5/97 TO
8/31/99 8/31/98 8/31/99 8/31/98 8/31/99 8/31/98
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $8.94 $10.00 $8.89 $10.00 $8.89 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) 0.02(1)(2) 0.03(1)(2) (0.07)(1)(3) (0.04)(1)(3) (0.07)(1)(4) (0.04)(1)(4)
Net realized and unrealized
gain (loss) 3.20 (1.07) 3.19 (1.05) 3.19 (1.05)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 3.22 (1.04) 3.12 (1.09) 3.12 (1.09)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income (0.03) (0.01) (0.01) (0.01) (0.01) (0.01)
In excess of net investment
income (0.02) (0.01) -- (0.01) -- (0.01)
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (0.05) (0.02) (0.01) (0.02) (0.01) (0.02)
------- ------- ------- ------- ------- -------
Change in net asset value 3.17 (1.06) 3.11 (1.11) 3.11 (1.11)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $12.11 $8.94 $12.00 $8.89 $12.00 $8.89
======= ======= ======= ======= ======= =======
Total return(5) 35.89% (10.28)%(6) 35.05% (10.92)%(6) 34.91% (10.86)%(6)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $26,974 $19,766 $24,709 $5,291 $3,108 $2,005
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 1.25% 1.25%(7) 2.00% 2.00%(7) 2.00% 2.00%(7)
Net investment income (loss) 0.14% 0.31%(7) (0.62)% (0.45)%(7) (0.60)% (0.45)%(7)
Portfolio turnover 192% 59%(6) 192% 59%(6) 192% 59%(6)
</TABLE>
(1) Computed using average shares outstanding.
(2) Includes reimbursement of operating expenses by investment adviser of $0.04
and $0.15, respectively.
(3) Includes reimbursement of operating expenses by investment adviser of $0.03
and $0.15, respectively.
(4) Includes reimbursement of operating expenses by investment adviser of $0.04
and $0.15, respectively.
(5) Maximum sales charges are not reflected in the total return calculation.
(6) Not annualized.
(7) Annualized.
See Notes to Financial Statements 13
<PAGE>
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
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-Hollister Small Cap Value Fund seeks long-term capital appreciation.
Phoenix-Hollister 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.
Each Fund offers Class A, Class B and Class C shares. Class M shares have been
closed. 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. 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 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
14
<PAGE>
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999 (CONTINUED)
directly between currency traders and their customers. The contract is
marked-to-market daily and the change in market value is recorded by each Fund
as an unrealized gain (or loss). When the contract is closed or offset with the
same counterparty, the Fund records a realized gain (or loss) equal to the
change in the value of the contract when it was opened and the value at the time
it was closed or offset.
G. OPTIONS:
Each Fund may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.
Each Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked-to-market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
Each Fund may purchase options which are included in the Funds' Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
H. EXPENSES:
Expenses incurred by the Trust with respect to more than one Fund are
allocated in proportion to the net assets of each Fund, except where allocation
of direct expense to each Fund or an alternative allocation method can be more
fairly made.
I. REPURCHASE AGREEMENTS:
A repurchase agreement is a transaction where a Fund acquires a security for
cash and obtains a simultaneous commitment from the seller to repurchase the
security at an agreed upon price and date. Each Fund, through its custodian,
takes possession of securities collateralizing the repurchase agreement. The
collateral is marked-to-market daily to ensure that the market value of the
underlying assets remains sufficient to protect the Fund in the event of default
by the seller. If the seller defaults and the value of the collateral declines,
or, if the seller enters insolvency proceedings, realization of collateral may
be delayed or limited.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
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>
Small Cap Value Fund............... 0.90% 0.85% 0.80%
Value Equity Fund.................. 0.75% 0.70% 0.65%
</TABLE>
The Adviser has voluntarily agreed to assume total 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>
Small Cap Value Fund.............. 1.40% 2.15% 2.15%
Value Equity Fund................. 1.25% 2.00% 2.00%
</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 $16,008 for Class A shares, and deferred
sales charges of $53,653 for Class B shares and $5,974 for Class C shares for
the year ended August 31, 1999. In addition, each Fund pays PEPCO a distribution
fee at an annual rate of 0.25% for Class A shares, 1.00% for Class B shares and
1.00% for Class C shares applied to the average daily net assets of the Fund.
The Distributor has advised the Trust that of the total amount expensed for the
year ended August 31, 1999, $319,335 was retained by the Distributor, $88,196
was paid to unaffiliated participants, and $6,834 was paid to W.S. Griffith, an
indirect subsidiary of PHL.
As Financial Agent of each Fund, 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 year ended August 31, 1999, transfer
agent fees were $141,640 of which PEPCO retained $8,079 which is net of the fees
paid to State Street.
15
<PAGE>
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999 (CONTINUED)
At August 31, 1999, PHL and its affiliates held shares of the Trust which
aggregated the following:
<TABLE>
<CAPTION>
Aggregate Net
Shares Asset Value
--------- -------------
<S> <C> <C>
Small Cap Value Fund, Class A....... 472,213 $ 5,387,956
Value Equity Fund, Class A.......... 1,161,425 14,064,855
Value Equity Fund, Class B.......... 1,381,952 16,583,430
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended August 31, 1999
(excluding U.S. Government and agency securities, and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
Small Cap Value Fund................. $75,326,118 $67,368,420
Value Equity Fund.................... 95,787,856 81,183,929
</TABLE>
There were no purchases or sales of long-term U.S. Government and agency
securities during the year ended August 31, 1999.
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a Fund's ability to
repatriate such amounts.
5. CAPITAL LOSS CARRYOVERS
At August 31, 1999, the Value Equity Fund had a capital loss carryover of
$403,905, expiring in 2007, which may be used to offset future capital gains.
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal year.
For the year ended August 31, 1999, the Small Cap Value Fund deferred capital
losses of $1,016,461 and the Value Equity Fund utilized capital losses deferred
in the prior year in the amount of $678,812.
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, 1999, the
Funds recorded the following reclassifications to increase (decrease) the
accounts listed below:
<TABLE>
<CAPTION>
Capital paid
Undistributed Accumulated in on shares
net investment net realized of benefical
income gain (loss) interest
-------------- ------------ ------------
<S> <C> <C> <C>
Small Cap Value
Fund.................. $ 52,755 $ (37,541) $ (15,214)
Value Equity Fund..... 114,984 (798) (114,186)
</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.
16
<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
the Phoenix-Hollister Small Cap Value Fund and the Phoenix-Hollister Value
Equity Fund (constituting the Phoenix Investment Trust 97, hereinafter referred
to as the "Trust") at August 31, 1999, the results of each of their operations,
the changes in each of their net assets and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the 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, 1999 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
October 8, 1999
17
<PAGE>
PHOENIX INVESTMENT TRUST 97
101 Munson Street
Greenfield, Massachusetts 01301
TRUSTEES
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
John F. Sharry, Executive Vice President
Robert S. Driessen, Vice President
Christian C. Bertelsen, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Clerk and Secretary
INVESTMENT ADVISER
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
<TABLE>
<S> <C>
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574
(option 0)
Investment Strategy Hotline 1-800-243-4361
(option 2)
Marketing Department 1-800-243-4361
(option 3)
Text Telephone 1-800-243-1926
</TABLE>
World Wide Web address:
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
PRSRT STD
U.S. Postage
P A I D
Springfield, MA
Permit No. 444
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield CT 06083-2200
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 215 (10/99)
