EUCLID MUTUAL FUNDS, DEFS14A, 1999-01-19

EUCLID MUTUAL FUNDS
DEFS14A, 1999-01-19

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>

EUCLID MUTUAL FUNDS

- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

------------------------------------------------------------------------
(5) Total fee paid:

------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement No.:

------------------------------------------------------------------------

(3) Filing Party:

------------------------------------------------------------------------

(4) Date Filed:
<PAGE> 2

EUCLID MUTUAL FUNDS

900 THIRD AVENUE, NEW YORK, NEW YORK 10022

January 19, 1999

DEAR FELLOW SHAREHOLDERS:

As you may be aware, the financial services industry has seen many mergers
and acquisitions over the last few years. A number of well-known organizations
have recently combined to build stronger companies with greater resources. These
same strategic objectives motivated the pending acquisition of Euclid Advisors
LLC and Zweig Securities Corp. by Phoenix Investment Partners, Ltd. ("Phoenix").
Phoenix is a 60% owned subsidiary of Phoenix Home Life Insurance Company. A
special meeting of Shareholders of Euclid Market Neutral Fund (the "Fund")
regarding the proposed acquisition is scheduled for February 25, 1999.

Attached are the Notice and Proxy Statement for the Special Meeting, which
describe a number of matters on which you, the Shareholders, are being asked to
vote (1) approval of a new investment management agreement; (2) election of
Trustees; and (3) ratification of the selection of independent public
accountants. THE FUND'S BOARD UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THESE
PROPOSALS.

The proposed acquisition offers the following opportunities for the Fund's
shareholders:

- Continuity of the Fund's objective, policies, investment style and
portfolio manager.

- No increase in fee rates payable by the Fund.

- Increased distribution capabilities.

- Business synergies between the two organizations, including increased
product diversification, global brand enhancement and broadened
geographic coverage.

YOUR VOTE IS IMPORTANT. PLEASE TAKE A MOMENT NOW TO SIGN AND RETURN YOUR
PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. If we do not hear from you
after a reasonable amount of time, you may receive a telephone call from our
proxy solicitor, Shareholder Communications Corporation, reminding you to vote
your shares. You may vote electronically or by touch-tone telephone. IF YOU HAVE
ANY QUESTIONS CONCERNING THE PROPOSALS TO BE CONSIDERED AT THE SPECIAL MEETING
ON FEBRUARY 25, 1999, PLEASE CONTACT SHAREHOLDER COMMUNICATIONS CORPORATION AT
1-800-401-3439. Thank you.

Sincerely,

EUGENE J. GLASER
Chairman and President
<PAGE> 3

EUCLID MUTUAL FUNDS

900 THIRD AVENUE, 31ST FLOOR
NEW YORK, NY 10022

------------------------

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 25, 1999 AND PROXY STATEMENT

------------------------

January 19, 1999

To the Shareholders:

You are invited to attend a special meeting of shareholders of the Euclid
Market Neutral Fund (the "Fund").

The meeting will be held at the offices of the Fund at 900 Third Avenue,
31st Floor, New York, NY on Thursday, February 25, 1999 at 10:30 a.m., for the
following purposes and to transact such other business as may properly come
before the meeting or any adjournment of the meeting:

1. To approve a new investment management agreement with Euclid Advisors
LLC on the same terms as the current agreement.

2. To elect Trustees.

3. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants for the current fiscal year.

The Board of Trustees has selected the close of business on January 7, 1999
as the record date for determination of shareholders of the Fund entitled to
notice of and to vote at the meeting.

By Order of the Board of Trustees

EUGENE J. GLASER
Chairman and President
<PAGE> 4

EUCLID MUTUAL FUNDS

------------------------

PROXY STATEMENT
FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 25, 1999

INTRODUCTION

This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Euclid Mutual Funds (the "Board") for voting
at the special meeting of shareholders of the Euclid Market Neutral Fund (the
"Fund") to be held at 10:30 a.m. (local time) on Thursday, February 25, 1999, at
the offices of the Fund at 900 Third Avenue, New York, NY 10022 and at any and
all adjournments thereof (the "Meeting"), for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders dated January 19, 1999.

Euclid Mutual Funds, an open-end, diversified management investment company
organized as a Delaware business trust (the "Trust"), is authorized to issue
shares of beneficial interest in separate series. The only series is the Fund,
which may issue shares in one or more classes. The Fund issues Class A, Class B,
Class C and Class I Shares. Each dollar of net asset value of the Fund as of the
record date is entitled to one vote on each matter submitted to a vote of the
shareholders at the Meeting, and fractional dollar amounts are entitled to
fractional votes. No shares have cumulative voting rights.

A copy of the Fund's 1998 annual report has been sent to all shareholders.
You may request an additional copy by writing to the Fund at 900 Third Avenue,
New York, NY 10022 or by calling 1-800-272-2700.

Each valid proxy will be voted in accordance with your instructions and as
the persons named in the proxy determine on such other business as may come
before the Meeting. If no instructions are given, the proxy will be voted FOR
approval of the new investment management agreement, FOR the nominees for
election as Trustees and FOR the selection of PricewaterhouseCoopers LLP as
independent accountants for the Fund. Shareholders who execute proxies may
revoke them at any time before they are voted, either by writing to the Fund or
in person at the Meeting. Proxies given by telephone or electronically
transmitted instruments may be counted if obtained pursuant to procedures
designed to verify that such instructions have been authorized.

The Board recommends an affirmative vote on all items set forth in this
proxy statement. This proxy statement was first mailed to shareholders on or
about January 19, 1999.

THE SHAREHOLDERS VOTE UPON THREE ITEMS

Approval of ITEM 1 requires the affirmative vote of a "majority of the
outstanding voting securities" of each Fund. As defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act"), the term
"majority of the outstanding voting securities" for the Fund means: the lesser
of (i) 67% or more of the voting securities of the Fund present at the meeting
if more than 50% of the outstanding shares of the Fund are present in person or
by proxy or (ii) more than 50% of the outstanding shares of the Fund. Election
of each Trustee, ITEM 2, requires a plurality of the votes of all shares of the
Fund. Approval of ITEM 3 requires the affirmative vote of more than 50% of the
votes cast at the meeting (either in person or by proxy). All Items are being
submitted for a vote by all classes of the Fund.

The Board has fixed the close of business on January 7, 1999 as the record
date (the "Record Date") for determining holders of the Funds' shares entitled
to notice of and to vote at the Meeting. Each shareholder will be entitled to
one vote for each dollar of total net asset value of the shareholder's Fund
shares and a fractional vote for each fractional dollar. At the close of
business on December 31, 1998, the Euclid Market Neutral Fund had 14,896,785
shares outstanding with a total dollar value of $164,050,492.

<PAGE> 5

THE REASON FOR THE MEETING

Euclid Advisors LLC (the "Adviser"), a wholly owned subsidiary of
Zweig/Glaser Advisers, is the investment manager for the Fund. Phoenix
Investment Partners, Ltd., a Delaware corporation ("Phoenix"), entered into an
agreement dated as of December 15, 1998 (the "Acquisition Agreement") with the
Adviser, Zweig/Glaser Advisers, Zweig Advisors Inc., Zweig Total Return
Advisors, Inc. and Zweig Securities Corp. (collectively, the "Zweig Group") and
the equityholders of the Zweig Group. Pursuant to the Acquisition Agreement, the
Zweig Group will be acquired by Phoenix (the "Acquisition").

Phoenix is a large, diversified financial services organization and is a
60% owned subsidiary of Phoenix Home Life Mutual Insurance Company. Through its
operating subsidiaries and affiliates, Phoenix provides a variety of investment
products and services to investors throughout the United States and abroad.
Phoenix provides management, administrative and distribution services for 54
mutual funds, as well as individual and institutional clients. As of December
31, 1998, Phoenix had over $53 billion in assets under management. The Phoenix
mutual funds are distributed through a network of broker-dealers, financial
planners and investment advisers. Phoenix is headquartered in Hartford,
Connecticut, and its common stock is listed on the New York Stock Exchange.

Consummation of the Acquisition would constitute an "assignment", as that
term is defined in the Investment Company Act, of the current investment
management agreement with Adviser. As required by the Investment Company Act,
the current investment management agreement provides for its automatic
termination in the event of its assignment. In anticipation of the acquisition
of the Adviser and in order to assure that the Adviser can continue to serve as
investment manager to the Fund, a new investment management agreement between
the Trust and the Adviser ("Management Agreement") is being proposed for
approval by shareholders of the Fund. Except for the effective dates, the new
Management Agreement is on the same terms as the current Management Agreement.
The new Management Agreement is attached hereto as Exhibit A.

After completion of the Acquisition, Phoenix may determine to cause some or
all of the following investment advisers, Zweig/Glaser Advisers, Euclid Advisors
LLC, Zweig Advisors Inc. and Zweig Total Return Advisors, Inc., to be merged or
otherwise combined into a single existing or newly-created wholly owned
subsidiary of Phoenix that is or would be a registered investment adviser.
Although such a merger or combination may involve a transfer of the Management
Agreement to such subsidiary, such a transfer would not involve a change in the
identity of the persons in control of the investment adviser to the Fund and,
therefore, should not constitute an "assignment" resulting in the automatic
termination of the Management Agreement. However, in order to avoid any
question, the approval by shareholders of the Fund of the Management Agreement
at the Meeting will also be deemed to constitute approval of the continuation of
the Management Agreement with any subsidiary of Phoenix that becomes the
successor to the Adviser.

ITEM 1. NEW INVESTMENT MANAGEMENT AGREEMENT

Except for the effective date, the terms of the new Management Agreement
are identical in all material aspects to those of the current Management
Agreement, which is dated April 16, 1998. The following is a summary of the
current and new Management Agreements with the Adviser.

The Adviser acts as investment adviser, conducts and maintains a continuous
review of the Fund's portfolio of securities and investments, and advises and
assists the Fund with respect to the selection, acquisition, holding and
disposal of securities. In so doing, the Adviser shall be guided by the
investment objectives and policies of the Fund as delineated and limited by the
Registration Statement on Form N-1A filed with the Securities and Exchange
Commission (the "SEC"), as amended from time to time, by policies adopted by the
Board and by the provisions of the Investment Company Act and the rules
promulgated thereunder, so that at all times the Fund shall be in compliance
with its policies and the provisions of the Investment Company Act.

In rendering investment management services to the Fund, the Adviser may
employ, retain or otherwise avail itself of the services or facilities of other
persons or organizations, for the purpose of providing statistical

2
<PAGE> 6

and other factual information, advice regarding economic factors and trends,
advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharging of its obligations as investment manager.

The Adviser is authorized to allocate brokerage and principal business to
firms that provide services or facilities or to cause the Fund to pay a member
of a securities exchange or any other securities broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange, broker or dealer would have charged
for effecting that transaction. Such allocation of brokerage is permissible if
the Adviser or such person determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services (as defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) provided by such member, broker or dealer, viewed in
terms of either that particular transaction or the Adviser or such member,
broker or dealer's overall responsibilities with respect to the accounts as to
which the Adviser or such member, broker or dealer exercises investment
discretion.

In addition, the Adviser keeps certain books and financial records of the
Fund and performs such other services as are reasonably incidental to the
foregoing duties. The Adviser assists in the computation of the net asset value
of the shares of the Fund and furnishes to the Fund and its distributor any
statements with respect to the net asset value of the shares of the Fund. The
Adviser also furnishes the Fund with office space reasonably suited to its
operations and with bookkeeping, internal accounting and administrative
services, and permits such of its officers and employees as may be elected as
Trustees or officers of the Fund to serve in the capacities to which they are
elected.

The Fund assumes and pays, or reimburses the Adviser for, all expenses
incurred in the operation of the Fund. The Fund bears the cost of and pays all
interest, taxes, fees and commissions of every kind, expenses of issue,
repurchase or redemption of shares, expenses of registering or qualifying shares
for sale, insurance, association membership dues, all charges of custodians
(including fees as custodian, escrow agent, for keeping books and performing
portfolio valuations), transfer agents, registrars, dividend disbursing agents,
independent auditors and legal counsel, expenses of preparing, printing and
distributing prospectuses and all proxy materials, reports and notices to
shareholders, expenses of distribution of shares in accordance with a plan
adopted pursuant to Rule 12b-1 under the Investment Company Act, out-of-pocket
expenses of the Trustees and fees of Trustees who are not "interested persons,"
and all other costs incident to the Trust's existence.

As compensation for management services, the Fund pays the Adviser, with
respect to the Class A, Class B, Class C and Class I shares of the Fund, a
monthly management fee at the annual rate of 1.50% of the average daily net
assets of the Fund.

The Adviser and its affiliates may execute brokerage transactions for the
Fund and charge brokerage commissions and make a profit from effecting those
transactions, provided such payments to the Adviser and its affiliates are
reviewed periodically by the Board as required by the Investment Company Act.

The Adviser is liable for its own acts and omissions caused by its willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by its reckless disregard of its obligations under the Management Agreement. The
Adviser shall not be liable for the acts and omissions of any agent employed by
it, nor for those of any bank, trust company, broker or other person with whom,
or into whose hands, any monies, shares of the Trust or securities and
investments may be deposited or come, pursuant to the provisions of the
Management Agreement. Subject to the first sentence of this paragraph, the
Adviser shall not be liable for any action taken or omitted on advice, obtained
in good faith, of counsel, provided such counsel is satisfactory to the Trust.

The Management Agreement may be terminated at any time, without the payment
of any penalty, upon sixty (60) days' written notice. The Management Agreement
automatically terminates in the event of its assignment.

Unless sooner terminated, the new Management Agreement continues in effect
for an initial term ending two years from the date of the consummation of the
Acquisition, and may continue thereafter from year to year if specifically
approved at least annually by vote of "a majority of the outstanding voting
securities" of the

3
<PAGE> 7

Fund, as defined under the Investment Company Act, or by the Board, and, in
either event, the vote of a majority of the Trustees who are not "interested
persons" cast in person at a meeting called for such purpose.

For the fiscal period ended October 31, 1998, the Fund paid investment
management fees to the Adviser in the amount of $883,943, before reimbursement
of $52,190 of the Fund's expenses by the Adviser, and the Fund paid brokerage
commissions to Zweig Securities Corp. and its affiliates in the amount of $825,
which represents 0.09% of the Fund's total brokerage commissions.

The Adviser has acted as investment manager for the Fund since it commenced
the public offering of its shares on May 1, 1998. The current Management
Agreement was approved by the initial shareholder of the Fund on April 22, 1998
and was approved by the Trustees on April 16, 1998.

INFORMATION CONCERNING PHOENIX

The following information concerning Phoenix and the Acquisition has been
provided to the Fund by Phoenix.

The names, addresses and principal occupations of the principal executive
officers of Phoenix, which is located at 56 Prospect Street, Hartford, CT 06115,
are as follows. The address of each individual, as it relates to his duties at
Phoenix, is the same as that of Phoenix.

<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- --------------------
<S> <C>
Philip R. McLoughlin.............. Chairman of the Board and Chief Executive Officer of Phoenix
since May 1997. Before that, Mr. McLoughlin was Vice
Chairman of the Board and Chief Executive Officer of
Phoenix. He has also been a Director of Phoenix Home Life
since February 1994 and has been employed by Phoenix Home
Life as Executive Vice President - Investment since December
1988. In addition, Mr. McLoughlin serves as President of
Phoenix Equity Planning Corporation ("PEPCO"), Chairman of
Phoenix Investment Counsel, Inc. and Chairman and Chief
Executive Officer of National Securities & Research
Corporation. He also is a member of the Board of Directors
of Duff & Phelps Utilities Tax-Free Income Inc. and Duff &
Phelps Utility and Corporate Bond Trust, Inc. Mr. McLoughlin
also serves as President and as a Director or Trustee of the
Phoenix Funds, Phoenix Duff & Phelps Institutional Mutual
Funds and Phoenix-Aberdeen Series Fund. He is also a
Director of PM Holdings, Phoenix Charter Oak Trust Company,
The World Trust, a Luxembourg closed-end fund, The Emerging
World Trust Fund, a Luxembourg closed-end fund, and of PXRE
Corporation, a publicly traded corporation, and of its
wholly owned subsidiary, PXRE Reinsurance Company.
Calvin J. Pedersen................ A member of the Board of Directors of Phoenix since 1992 and
President of Phoenix since July 1993. From January 1992 to
July 1993, Mr. Pedersen served as an Executive Vice
President of Phoenix. Mr. Pedersen was also an Executive
Vice President of Duff & Phelps, Inc., the former parent of
Phoenix's operating subsidiaries, from 1988 until its
dissolution in 1992. Mr. Pedersen is also President and
Chief Executive Officer of Duff &
</TABLE>

4
<PAGE> 8

<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- --------------------
<S> <C>
Phelps Utilities Income Inc., Duff & Phelps Utilities
Tax-Free Income Inc., and Duff & Phelps Utility and
Corporate Bond Trust Inc. and serves as a Director or
Trustee of the Phoenix Funds, Phoenix Duff & Phelps
Institutional Mutual Funds and Phoenix-Aberdeen Series Fund.
Michael E. Haylon................. Executive Vice President of Phoenix since November 1, 1995.
From February 1993 to November 1, 1995, Mr. Haylon was
Senior Vice President Securities Investments of Phoenix Home
Life. Mr. Haylon is also President of Phoenix Investment
Counsel, Inc., Executive Vice President of National
Securities & Research Corporation and Executive Vice
President of the Phoenix Funds, Phoenix Duff & Phelps
Institutional Mutual Funds and Phoenix-Aberdeen Series Fund.
Mr. Haylon also serves as a member of the Board of Directors
of Phoenix Investment Counsel, Inc., PEPCO and National
Securities & Research Corporation.
John F. Sharry.................... Executive Vice President of Phoenix since January 1998. From
1995 through 1997, Mr. Sharry was Managing Director, Retail,
Phoenix Equity Planning Corporation. Mr. Sharry is also
Executive Vice President of the Phoenix Funds and
Phoenix-Aberdeen Series Fund. Previously Mr. Sharry was
Managing Director and National Sales Manager of Putnam Funds
from December 1992 through 1994.
Thomas N. Steenburg............... Senior Vice President of Phoenix since January 1999. From
1995 through 1998, Mr. Steenburg was Vice President and
Counsel of Phoenix, and from 1991 through 1994, he was
Counsel to Phoenix Home Life Mutual Insurance Company. He is
Vice President and Counsel of PEPCO. Mr. Steenburg also
serves as General Counsel to Seneca Capital Management LLC
and to Roger Engemann & Associates, Inc., and as Executive
Vice President of Duff & Phelps Investment Management Co.
Mr. Steenburg serves as Secretary or Assistant Secretary to
each of the Phoenix Funds, Phoenix-Aberdeen Series Fund,
Phoenix Duff & Phelps Institutional Mutual Funds,
Phoenix-Seneca Funds, Phoenix-Engemann Funds, Duff & Phelps
Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc.
William R. Moyer.................. Senior Vice President and Chief Financial Officer of Phoenix
since 1995. Mr. Moyer is also the Chief Financial Officer
and a Senior Vice President of PEPCO, National Securities &
Research Corporation and Phoenix Investment Counsel, Inc. In
addition, Mr. Moyer also serves as Treasurer of National
Securities & Research Corporation and Phoenix Investment
Counsel, Inc. Mr. Moyer also is a Vice President of each of
the Phoenix Funds, the Phoenix-Aberdeen Series Fund and the
Phoenix Duff & Phelps Institutional Mutual Funds.
</TABLE>

INFORMATION CONCERNING THE ACQUISITION

The Adviser, Zweig/Glaser Advisers, Zweig Advisors Inc., Zweig Total Return
Advisors, Inc. and Zweig Securities Corp. (collectively, the "Zweig Group"), and
the equityholders of the Zweig Group entered into an Acquisition Agreement with
Phoenix dated as of December 15, 1998. The Acquisition Agreement provides that
the purchase price for the Zweig Group is to be $135 million, which is subject
to upward and downward price adjustments that could cause the present value (at
a 12% discount rate) of the ultimate purchase price as of the closing date to be
as much as $164 million.

The obligation of Phoenix to close the Acquisition is subject to various
conditions and requirements, including filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. Some conditions include obtaining approvals
by the Board and shareholders of the Fund. As a condition of Phoenix's
obligation to close

5
<PAGE> 9

the Acquisition, the Board has approved a new Management Agreement and a new
distribution agreement, and the shareholders shall have approved the new
Management Agreement.

The Board has approved a new distribution agreement with Phoenix Equity
Planning Corporation ("PEPCO"), 100 Bright Meadow Boulevard, P.O. Box 2200,
Enfield, CT 06083, a wholly owned subsidiary of Phoenix, that will become
effective with the closing of the Acquisition. The Investment Company Act
requires such approval because the Acquisition by Phoenix terminates the current
distribution agreement with Zweig Securities Corp. The new distribution
agreement is on the same terms as the current distribution agreement with Zweig
Securities Corp.

In addition, pursuant to the Acquisition Agreement, Eugene Glaser, Manager
and President, David Katzen, Executive Vice President, and Barry Mandinach,
Senior Vice President, have entered into three-year employment agreements,
effective upon the closing of the Acquisition, for the continuation of their
employment. The agreements each provide that the employee's responsibilities
shall be commensurate with his responsibilities prior to the closing and that he
may hold such other positions with the Adviser to which he may be elected or
appointed during the term of the agreement, subject to the employee's consent.
Each agreement also provides for both salary and annual incentive compensation,
certain benefits, confidentiality provisions, covenants not to compete and
severance payments. Upon the consummation of the Acquisition, Mr. Glaser will
sign a five-year noncompetition agreement.

As a condition to the completion of the Acquisition, the composition of the
Board of the Fund is to be reasonably acceptable to Phoenix. See "Investment
Company Act Considerations" below.

USE OF THE PHOENIX NAME

Phoenix and the Board have also agreed that after the Acquisition, the
Board would change the Trust's name from "Euclid Mutual Funds" to
"Phoenix-Euclid Funds" and change the name of the "Euclid Market Neutral Fund"
to "Phoenix-Euclid Market Neutral Fund." Pursuant to the Agreement and
Declaration of the Trust, the Board is authorized to make such name changes.

INVESTMENT COMPANY ACT CONSIDERATIONS

Pursuant to Section 15 of the Investment Company Act, the current
Management Agreement between the Trust and the Adviser terminates automatically
upon its assignment, which is deemed to include any change of control of the
investment adviser. Section 15(a) of the Investment Company Act prohibits any
person from serving as an investment adviser to a registered investment company
except pursuant to a written contract that has been approved by the
shareholders. Therefore, in order that the Adviser is able to provide investment
advisory services to the Fund after the Acquisition, the shareholders must
approve a new Management Agreement.

The Acquisition Agreement specifically commits the Adviser and Phoenix to
comply with the requirements of Section 15(f) of the Investment Company Act,
which provides, in pertinent part, that the investment adviser, may receive an
amount or benefit in connection with a sale of the investment adviser which
results in an assignment of a fund's investment advisory contract if (i) for a
period of three years after the sale, at least 75% of the members of the board
of trustees of such fund are independent -- i.e., not "interested persons" (as
defined in the Investment Company Act) -- of the new or old investment adviser;
and (ii) for a two-year period, there is no "unfair burden" imposed on the
investment company as a result of the Acquisition. The term "unfair burden" is
defined in Section 15(f) to include any arrangement during the two-year period
after the Acquisition whereby the investment adviser, or any interested person
of any such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its shareholders (other
than fees for bona fide investment advisory or other services) or from any
person in connection with the purchase or sale of securities or other property
to, from or on behalf of the investment company (other than bona fide ordinary
compensation as principal underwriter for such investment company). In the
Acquisition Agreement, Phoenix has agreed that it would impose no unfair burden
on the Fund as a result of the Acquisition. Phoenix has agreed to indemnify and
hold the Zweig Group and its equityholders harmless from and against and in
respect of any and all losses or damages arising in connection with the
imposition of any

6
<PAGE> 10

unfair burden on the Fund that is caused by acts or conduct within the control
of Phoenix or its affiliates. Also, the Investment Company Act provides that the
nomination and selection of any new or additional independent Trustees is
committed exclusively to the current independent Trustees.

The new Management Agreement, if approved by the shareholders, will
commence at the closing of the Acquisition. The new Management Agreement will
remain in effect for an initial term of two years and will continue in effect
thereafter with respect to the Fund for successive periods if and so long as
such continuance is specifically approved annually by (a) the Board of Trustees
or (b) a majority vote of the Fund's shareholders, provided that, in either
event, the continuance also is approved by a majority of the Trustees who are
not "interested persons" by vote cast in person at a meeting called for the
purposes of voting on such approval.

As a condition to the completion of the Acquisition, the composition of the
Board of the Trust is to be reasonably acceptable to Phoenix. In order to comply
with Section 16(b) and Section 15(f)(1)(A) of the Investment Company Act, any
vacancy on the Board of an independent Trustee must be filled by a person who is
selected and proposed by a majority of the independent Trustees and elected by
the shareholders. However, a vacancy due to death, disqualification or bona fide
resignation can be filled by the Board pursuant to Section 16(a). Further, Rule
12b-1 requires that the selection and nomination of the independent Trustees are
committed to the discretion of the independent Trustees. At this Meeting, the
shareholders are being asked to vote on the election of Trustees. The current
Board includes two interested and four independent Trustees. Mr. David Katzen, a
current interested Trustee is not standing for re-election as a Trustee, in
order that the Board might comply with the requirements of Section 15(f)(1)(A)
of the Investment Company Act.

INFORMATION CONCERNING THE ADVISER

The Adviser is a wholly owned subsidiary of Zweig/Glaser Advisers, which is
controlled by Eugene J. Glaser and Dr. Martin E. Zweig. The address of the
Adviser and Zweig Securities Corp., the distributor for the Trust, is 900 Third
Avenue, New York, NY 10022. The names and principal occupations of the principal
executive officers of the Adviser, who are also executive officers and/or
Trustees of the Fund, are set forth below. The address of each, as it relates to
his or her duties with the Adviser or the Fund, is the same as that of the
Adviser.

<TABLE>
<CAPTION>
NAME POSITION WITH THE TRUST PRINCIPAL OCCUPATION
- ---- ----------------------- --------------------
<S> <C> <C>
Eugene J. Glaser...... Chairman, President, President, Euclid Advisors LLC and
CEO and Trustee Zweig/Glaser Advisers; President and
Director, Zweig Securities Corp.; Director,
The Zweig Fund, Inc. and The Zweig Total
Return Fund, Inc.; and Chairman, CEO and
Trustee, Zweig Series Trust
David Katzen.......... Executive Vice Executive Vice President, Euclid Advisors
President and Trustee LLC; Senior Vice President, Zweig/Glaser
Advisers; Vice President, Zweig Advisors
Inc.; and Senior Vice President, Zweig
Series Trust
Charles I. Leone...... First Vice President Treasurer and Assistant Secretary, Euclid
and Assistant Secretary Advisors LLC; First Vice President and Chief
Financial Officer, Zweig/Glaser Advisers;
First Vice President, Chief Financial
Officer and Assistant Secretary, Zweig
Securities Corp.; and First Vice President
and Assistant Secretary, Zweig Series Trust
Barry M. Mandinach.... First Vice President Senior Vice President, Euclid Advisors LLC
and Zweig/Glaser Advisers; Executive Vice
President, Zweig Securities Corp.; and First
Vice President, Zweig Series Trust
</TABLE>

7
<PAGE> 11

<TABLE>
<CAPTION>
NAME POSITION WITH THE TRUST PRINCIPAL OCCUPATION
- ---- ----------------------- --------------------
<S> <C> <C>
Alfred J. Ratcliffe... First Vice President, First Vice President, Zweig/Glaser Advisers;
Treasurer, Principal First Vice President, Treasurer, Principal
Accounting Officer and Accounting Officer and Assistant Secretary,
Assistant Secretary Zweig Series Trust; and former Vice
President, The Bank of New York
Marc Baltuch.......... Secretary First Vice President and Secretary, Euclid
Advisors LLC and Zweig/Glaser Advisers;
First Vice President, Chief Compliance
Officer, Secretary and Director, Zweig
Securities Corp.; Chief Compliance Officer
and Assistant Secretary, Zweig Advisors Inc.
and Zweig Total Return Advisors, Inc.;
President and Director, Watermark
Securities, Inc.; Assistant Secretary,
Gotham Advisors, Inc.; and Secretary, Zweig
Series Trust
Annemarie Gilly....... First Vice President First Vice President, Euclid Advisors LLC
and Zweig/Glaser Advisers, Zweig Securities
Corp., and Zweig Series Trust; Director, The
Zweig Fund, Inc. and The Zweig Total Return
Fund, Inc.
</TABLE>

Upon consummation of the Acquisition, it is anticipated that Philip R.
McLoughlin, Chairman and Chief Executive Officer of Phoenix, will become Chief
Executive Officer of the Adviser and Eugene J. Glaser will remain as President
of the Adviser.

BOARD OF TRUSTEES' CONSIDERATION

The Board met on December 16, 1998 and on January 12, 1999 to consider the
Acquisition and its anticipated effects upon the Adviser and the investment
management and other services provided to the Fund by the Adviser and its
affiliates. On January 12, 1999, the Board, including a majority of the Trustees
who are not parties to the Management Agreement or interested persons of any
such party, voted to approve the new Management Agreement and to recommend the
agreement to shareholders for their approval. If the Acquisition is not
completed, then the current Management Agreement will continue in effect.

The independent Trustees retain their own counsel on a regular basis to
assist them in evaluating various matters, including the matters discussed in
this proxy statement. The Board believes each of the items set forth in this
proxy statement, including the new Management Agreement, is in the best
interests of the Fund and its shareholders.

In making its recommendation to the shareholders of the Fund, the Board
exercised its independent judgment based on a careful review of the proposed
changes and potential benefits. The Trustees' considerations are described
below. The Trustees' approval and recommendation that shareholders approve the
new Management Agreement is based on various considerations, including the
following:

- Portfolio Management Continuity -- No change in the portfolio management
or portfolio manager of the Fund is expected to result from the
Acquisition.

- Administrative Services -- The administrative services and management
functions for the Fund initially will continue to be performed by the
same personnel. Phoenix has represented that at least the present level
and quality of services for the Fund and the shareholders will be
maintained after the Acquisition.

- Fees -- The fee rates payable by the Fund under the new Management
Agreement will be the same rates as payable by the Fund under the current
Management Agreement.

- Increased Distribution Capabilities -- PEPCO will undertake the
distribution of the Fund through its existing relationships with
broker-dealers, financial planners and investment advisers. The PEPCO
marketing and sales organization is significantly larger and more
extensive than the marketing and sales

8
<PAGE> 12

organization of Zweig Securities Corp., which currently has responsibility for
distribution of the shares of the Fund. The Trustees believe that the potential
growth in size of the Fund that will likely result from these expanded selling
relationships would benefit the Fund and its shareholders. Further, as the
Fund grows, its expense ratio can be expected to decline.

- Benefits from Phoenix Relationship -- Although the Adviser will act
independently of Phoenix in providing investment management services to
the Fund, the experience of Phoenix in managing investment companies may
provide an additional resource of information for the Adviser in
performing its investment management and administration functions.
Moreover, the Adviser expects, over time, to shift certain administrative
functions to Phoenix as part of its larger mutual fund administrative
activities. Phoenix assured the Trustees that the Fund will share the
benefit of any resulting efficiencies.

During its review and deliberations, the Board evaluated the potential
benefits, detriments and costs to the Fund and its shareholders of the proposed
Acquisition. The Board received information regarding the new Management
Agreement. The Board received information from Phoenix regarding its management,
history, qualifications and other relevant information, including portfolio
transaction practices. Representatives of Phoenix made presentations and
responded to questions by the Board.

The Board also considered the qualifications and capabilities of the
Adviser to continue to serve as the investment manager for the Fund. In this
regard, the Board considered that senior executive officers of the Adviser have
agreed to continue their employment with the Adviser.

The Adviser's new parent company, Phoenix, through its predecessors, has
been engaged in the investment management business since 1932. Phoenix has
extensive experience managing investment companies. As of December 31, 1998,
Phoenix had over $53 billion in assets under management, including $19.3 billion
in institutional accounts, $3.5 billion in closed-end investment companies,
$10.2 billion in open-end investment companies, $11.3 billion in other managed
account programs, and $8.8 billion in the Phoenix Home Life general account.

In evaluating the Acquisition, including the new Management Agreement with
the Adviser, the Board determined that the Fund's shareholders would likely
benefit from the expected retention and the continued availability of the
management expertise of the Adviser, including its portfolio manager.
Specifically, the Board deemed it beneficial that Messrs. Glaser, Katzen and
Mandinach have signed employment contracts, and that Mr. Glaser will continue as
Chairman, President, Chief Executive Officer and a Trustee of the Fund.

In addition, the Board had extensive discussions with representatives of
Phoenix regarding continuity of management functions and the level and quality
of services affecting the Fund, and considered the representations by Phoenix of
its intention to maintain the continuity of management functions and the current
level and quality of services obtained by the Fund after the Acquisition. The
Board deemed it beneficial to shareholders for the Fund to be affiliated with
the Phoenix organization for several reasons, including the greater financial
strength of the sponsoring entity and Phoenix's larger technological
infrastructure. Moreover, with the proposed change in the ownership of the
investment manager, the Fund's shareholders would gain access to a broader array
of investment products. The Board also considered the fact that potential
benefits from the larger Phoenix organization were being obtained with the
expected retention of the current portfolio manager for the Fund, thereby
causing no significant changes in the portfolio management of the Fund.

The Board determined that the proposed Management Agreement was beneficial
and in the best interests of the Fund in that the contractual rates for
investment management fees would be the same as the current fees. The Board
considered the nature and quality of service to be provided, and the performance
of the funds managed by Phoenix.

The Adviser and Phoenix assured the Board that they intend to comply with
Section 15(f) of the Investment Company Act. As discussed above, Section 15(f)
provides a safe harbor for an investment manager to an investment company or any
of its affiliated persons to receive payments in connection with a

9
<PAGE> 13

change in control of the investment adviser so long as certain conditions are
met. These conditions include that no "unfair burden" be imposed on the Fund for
a period of two years. The Adviser and Phoenix informed the Board that they are
not aware of any express or implied term, condition, arrangement or
understanding that would impose an "unfair burden" on the Fund as a result of
the Acquisition. Phoenix agreed that it and its affiliates will take no action
that would have the effect of imposing an "unfair burden" on the Fund as a
result of the Acquisition.

Based upon an evaluation of the relevant information presented to them, and
in light of its fiduciary duties under federal and state law, the Board,
including all the independent Trustees of the Fund, determined that the
transactions contemplated by the Acquisition, including the new Management
Agreement, are advisable and in the best interests of the Fund and its
shareholders. The Board recommends the approval of Item 1 by the shareholders.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NEW MANAGEMENT
AGREEMENT.

ITEM 2. ELECTION OF TRUSTEES

The Board currently consists of six individuals. Eugene J. Glaser and
David Katzen are the only Trustees who are affiliated with the Adviser or Zweig
Securities Corp. David Katzen is not standing for re-election as a Trustee as
discussed under "Investment Company Act Considerations". At a Board meeting held
on January 12, 1999, all of the following five individuals were nominated by the
Board, including the independent Trustees, for election by the shareholders as
Trustees of the Trust.

The following table shows certain information regarding the Trustees who
are standing for election including their age, principal occupation or
employment during the past five years and other public memberships. The table
also shows the year in which each nominee was elected to the Board.

<TABLE>
<CAPTION>
POSITION WITH THE
NAME, ADDRESS AND AGE EUCLID MUTUAL FUNDS FIVE-YEAR BUSINESS EXPERIENCE
- --------------------- ------------------- -----------------------------
<S> <C> <C>
James Balog Trustee since 1998 Retired; Trustee of Zweig Series Trust;
2205 N. Southwinds Blvd. Director and Member of the Audit,
Vero Beach, FL 32963 Investment, Stock Option and Compensation
(70) Committees of Transatlantic Holdings, Inc.
(reinsurance); Director and Member of the
Audit Committee of Elan, Plc
(pharmaceuticals); Director and Member of
the Executive and Investment & Credit
Committees of Great West Life and Annuity
Insurance Company; and Member of the
Technical Advisory Board of Galen Partners
(health care). Former Director, Chairman of
the Audit Committee and Member of the
Executive Committee of A.L. Pharma, Inc.
(health care); Chairman of 1838 Investment
Advisers, L.P. and Chairman of Lambert
Brussels Capital Corporation (investments).
Claire B. Benenson Trustee since 1998 Consultant on Financial Conferences; Trustee
870 U.N. Plaza of Zweig Series Trust; Director of The
New York, NY 10017 Burnham Fund, Inc. Former Director of
(79) Financial Conferences and Chairman,
Department of Business and Financial
Affairs, The New School for Social Research;
and Former Director of The Zweig Cash Fund
Inc. and Simms Global Fund.
</TABLE>

10
<PAGE> 14

<TABLE>
<CAPTION>
POSITION WITH THE
NAME, ADDRESS AND AGE EUCLID MUTUAL FUNDS FIVE-YEAR BUSINESS EXPERIENCE
- --------------------- ------------------- -----------------------------
<S> <C> <C>
S. Leland Dill Trustee since 1998 Retired; Director of Coutts International
5070 North Ocean Dr. (USA) (private banking); Trustee of BT
Singer Island, FL 33404 Portfolios, BT Investment Fund and Zweig
(68) Series Trust. Former partner of KPMG Peat
Marwick. Former Director of The Zweig Cash
Fund Inc., Coutts Trust Holdings Limited,
Coutts Group and Vintners International
Company, Inc. (winery).
Eugene J. Glaser* Chairman and Chief President of the Adviser and Zweig/Glaser
900 Third Avenue Executive Officer Advisers; President and Director of the
New York, NY 10022 Trustee since 1998 Zweig Securities Corp.; Director of The
(58) Zweig Fund, Inc. and The Zweig Total Return
Fund, Inc.; Chairman, President, Chief
Executive Officer and Trustee of Zweig
Series Trust; Former Director of The Zweig
Cash Fund Inc.
Donald B. Romans Trustee since 1998 President of Romans & Company (private
233 East Wacker Dr. investors and financial consultants);
Chicago, IL 60601 Chairman, Merlin Corp.; Director of The
(67) Burnham Fund, Inc.; and Trustee of Zweig
Series Trust. Former Consultant to and
Executive Vice President and Chief Financial
Officer of Bally Manufacturing Corporation,
and Former Director of The Zweig Cash Fund,
Inc.
</TABLE>

- ---------------
* "Interested Person" as defined under the Investment Company Act.

The following table shows the number of shares held beneficially at
December 31, 1998 in the Fund by each Trustee:

<TABLE>
<CAPTION>
CLAIRE BENENSON JAMES BALOG S. LELAND DILL EUGENE GLASER DONALD ROMANS
- --------------- ----------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
-- 4,525 -- 139,488* --
</TABLE>

- ---------------

* Does not include 123,416 shares held by the Zweig Employee Profit Sharing Plan
for which Mr. Glaser is co-trustee.

As of December 31, 1998, the Trustees and officers of the Trust including
shares held for the Zweig Employee Profit Sharing Plan, as a group, owned
beneficially less than 2.1% of the Fund. As of December 31, 1998, Merrill Lynch,
Pierce, Fenner & Smith, for the sole benefit of its customers, owned of record
2,025,340 shares or 13.6% of the outstanding shares of the Fund.

11
<PAGE> 15

The Board of Trustees met four times during the calendar year ended
December 31, 1998. Each Trustee attended all of the meetings of the Board. The
Board does not have any committees. The table below shows, for each Trustee, the
total compensation, including reimbursement of expenses paid or accrued by the
Zweig Series Trust and the Euclid Mutual Funds, during the year ended December
31, 1998.

<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
AND EXPENSE REIMBURSEMENT TOTAL
----------------------------------------- COMPENSATION
NAME AND POSITION EUCLID MUTUAL FUNDS ZWEIG SERIES TRUST PAID TO THE TRUSTEES
- ----------------- ------------------- ------------------ --------------------
<S> <C> <C> <C>
James Balog............................. $5,500 $18,000 $23,500
Trustee
Claire B. Benenson...................... $5,500 $18,000 $23,500
Trustee
S. Leland Dill.......................... $5,514 $19,400 $24,914
Trustee
Eugene J. Glaser*....................... $ 0 $ 0 $ 0
Chairman, Chief Executive Officer
and Trustee
Donald B. Romans........................ $5,546 $19,567 $25,113
Trustee
</TABLE>

- ---------------
* "Interested Person" as defined in the Investment Company Act.

Those Trustees and officers of the Fund who are affiliated with the Adviser
or Zweig Securities Corp., the distributor of the Fund, are not separately
compensated for their services as Trustees or officers of the Trust. The Trust
currently pays each of its independent Trustees a fee of $2,500 per year, plus
$750 per meeting attended ($500 per phone meeting), and reimburses their
expenses for attendance at meetings. For the year ended December 31, 1998, the
fees and expenses of disinterested Trustees, as a group, were $22,060 from the
Euclid Mutual Funds and $74,967 from the Zweig Series Trust.

Trustees may be removed from office at any meeting of shareholders by a
vote of two-thirds of the outstanding shares of the Trust. Except as set forth
above and as required by the Investment Company Act, the Trustees shall continue
to hold office and may appoint their successors.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF ALL
NOMINEES AS TRUSTEES.

ITEM 3. TO RATIFY THE SELECTION OF INDEPENDENT ACCOUNTANTS

At the Board meeting held on December 16, 1998, PricewaterhouseCoopers LLP,
1177 Avenue of the Americas, New York, NY 10036, was selected as independent
accountants for the Trust by a vote of the non-interested Trustees for the 1999
fiscal year to certify the financial statements of the Trust. As required by the
Investment Company Act, the vote of the Board is subject to the right of the
Fund, by vote of a majority of its outstanding voting securities at any meeting
called for the purpose of voting on such action, to terminate such employment
without penalty. PricewaterhouseCoopers LLP has advised the Board that it has no
direct or material indirect ownership interest in the Fund.

PricewaterhouseCoopers LLP served as the independent auditors for the Fund
during the most recent fiscal year. Services performed by PricewaterhouseCoopers
LLP during such time have included (i) the audit of annual financial statements
and limited review of unaudited semiannual financial statements; (ii) assistance
and consultation in connection with filings with the SEC; and (iii) the
preparation of federal income tax returns filed on behalf of the Fund. In
recommending the continuation and selection of the Fund's accountants, the Board
reviewed the nature and scope of the services to be provided (including
non-audit services) and whether the performance of such services would affect
the accountants' independence. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Meeting, will be given the opportunity to make a
statement if they so desire and are expected to be available to respond to
appropriate questions.

12
<PAGE> 16

The ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Fund requires the affirmative vote of a majority
of votes cast at the Meeting by shareholders.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF INDEPENDENT ACCOUNTANTS.

OTHER INFORMATION

SHAREHOLDER MEETING COSTS

The cost of preparing, printing and mailing the enclosed proxy,
accompanying notice and proxy statement and all other costs in connection with
solicitation of proxies related to the required approvals will be paid by the
Adviser and Phoenix, including any additional solicitation made by letter,
telephone or telegraph. In addition to solicitation by mail, certain officers
and representatives of the Fund, officers and employees of the Adviser and
Phoenix and certain financial services firms and their representatives, who will
receive no extra compensation for their services, may solicit proxies by
telephone, telegram or personally. The Adviser and Phoenix have retained
Shareholder Communications Corporation, 17 State Street, New York, NY 10004, to
solicit proxies on behalf of the Board, the fee for which will be borne by the
Adviser and Phoenix.

ANNUAL REPORTS

A copy of the Fund's annual report for the fiscal year ended October 31,
1998 has been sent to all shareholders of record. You may obtain an additional
copy without charge upon request by writing to the Fund at 900 Third Avenue, New
York, NY 10022 or by calling 1-800-272-2700.

PROPOSALS OF SHAREHOLDERS

Under Delaware law, the Trust is not required to hold an annual shareholder
meeting, but it will hold special meetings as required or deemed desirable, or
upon request by holders of 10% of the shares. Since the Fund does not hold
regular meetings of shareholders, the anticipated date of the next special
shareholder meeting cannot be provided. If an annual meeting is called, any
shareholder who wishes to submit a proposal for consideration at the meeting
should submit the proposal promptly to the Secretary of the Trust. Any proposal
to be considered for submission to shareholders must comply with Rule 14a-8
under the Securities Exchange Act of 1934.

In tallying shareholder votes, abstentions (i.e., shares for which a proxy
is presented, but which abstains from voting on one or more matters) and "broker
non-votes" (i.e., shares held by brokers or nominees for which proxies are
presented but as to which (i) instructions have not been received from the
beneficial owners or persons entitled to vote and (ii) the broker or nominee
does not have discretionary voting power on a particular matter because it is a
non-routine matter) will be counted for purposes of determining whether a quorum
is present for the conduct of business at the Meeting. Broker non-votes do not
constitute votes for or against any proposal, do not constitute an abstention,
and will be disregarded in determining votes cast. Broker non-votes are not
likely to be relevant to this meeting because all three items to be voted upon
by the shareholders involve matters that are considered routine and within the
discretion of brokers to vote if no customer instructions are received.

Proxies given by telephone or electronically transmitted instruments may be
counted if obtained pursuant to procedures designed to verify that such
instructions have been authorized. In order to vote by internet or by touch-tone
telephone, you need the 12-digit Control Number found on your proxy card. To
vote by internet, go to www.proxyvote.com, enter your 12-digit Control Number
and follow the simple instructions at the web site. To vote by touch-tone
telephone, call 1-800-690-6903, enter your 12-digit Control Number and follow
the simple instructions.

13
<PAGE> 17

OTHER MATTERS TO COME BEFORE THE MEETING

The Board is not aware of any matters that will be presented for action at
the Meeting other than the matters set forth herein. Should any other matters
requiring a vote of shareholders arise, the proxy in the accompanying form will
confer upon the person or persons entitled to vote the shares represented by
such proxy the discretionary authority to vote matters in accordance with their
best judgment.

By Order of the Board of Trustees

EUGENE J. GLASER,

Chairman and President

January 19, 1999

PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.

14
<PAGE> 18

EXHIBIT A

EUCLID MUTUAL FUNDS
MANAGEMENT AGREEMENT

March , 1999

EUCLID ADVISORS LLC
900 Third Avenue
New York, New York 10022-4728

Gentlemen:

Euclid Mutual Funds, a Delaware business trust (the "Trust"), is an
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers shares of one series,
Euclid Market Neutral Fund, with four classes of shares, designated as Class A,
Class B, Class C and Class I shares. In the future the Trust may authorize and
issue other series and other classes of shares.

Each series of the Trust invests and reinvests its assets in a portfolio of
securities and investments. The Trust hereby engages you to act as its
investment manager for each series of the Trust authorized now or in the future
subject to the terms and conditions of this Agreement.

SECTION 1. Investment Management Services.

You shall use your staff and other facilities to conduct and maintain a
continuous review of each series' portfolio of securities and investments, and
shall advise and assist each series of the Trust with respect to the selection,
acquisition, holding and disposal of securities and investments. In so doing,
you shall be guided by the investment objectives and policies of each series as
delineated and limited in documents filed with the Securities and Exchange
Commission (the "SEC"), as amended from time to time, by policies adopted by the
Board of Trustees of the Trust (the "Board") and by the provisions of the 1940
Act and the rules promulgated thereunder, so that at all times the Trust shall
be in compliance with its policies and the provisions of the 1940 Act. The Trust
agrees to supply you with copies of all such documents and to notify you of any
changes in its investment objectives, policies and restrictions.

In rendering services to the Trust pursuant to this Agreement, you may
employ, retain or otherwise avail yourself of the services or facilities of
other persons or organizations for the purpose of providing you or the Trust
with such statistical and other factual information, such advice regarding
economic factors and trends, such advice as to occasional transactions in
specific securities, or such other information, advice or assistance as you may
deem necessary, appropriate or convenient for the discharge of your obligations
under this Agreement or otherwise helpful to the Trust or in the discharge of
your overall responsibilities with respect to the other accounts which you or
your affiliates serve as investment manager.

You and any person performing executive, administrative or trading
functions for the Trust, whose services were made available to the Trust by you,
are specifically authorized to allocate brokerage and principal business to
firms that provide such services or facilities or to cause the Trust to pay a
member of a securities exchange or any other securities broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange or broker or dealer would
have charged for effecting that transaction if you or such person determine in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services (as such services are defined in Section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"))
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or your or such person's overall responsibilities with
respect to the accounts as to which you or such person exercises investment
discretion.

A-1
<PAGE> 19

SECTION 2. Resumes and Reports, etc.

You shall maintain a record of all the investments and securities which
comprise the portfolios of each series of the Trust and shall furnish to the
Board, at its regularly scheduled meetings and at such other times as the Board
may reasonably request, a resume of the portfolios and report on all matters
pertaining to your services as investment manager. In addition, you shall
furnish the Trust with such statistical information reasonably available to you
as the Board shall reasonably request.

SECTION 3. Additional Services to Be Furnished.

You shall maintain the books and financial records of the Trust and shall
perform such other services as are reasonably incidental to the foregoing duties
including supervising the Trust Custodian's recordkeeping. You shall assist in
the computation of the net asset value of the shares of each class of each
series of the Trust (in accordance with the Trust's Prospectus and the
instructions of the Board) and shall furnish to the Trust and its distributor
any statements with respect to the net asset value of each class of each series
of the Trust and the net asset value per share of each class of each series of
the Trust at such times, and in such forms, as the Trust may prescribe. You
shall also furnish the Trust with office space reasonably suited to its
operations and with bookkeeping, internal accounting and administrative
services, and shall permit such of your directors, officers and employees as may
be elected as Trustees or officers of the Trust to serve in the capacities to
which they are elected. All services to be furnished by you under this Agreement
may be furnished through directors, officers or employees of you or your
affiliates.

In acting under this Agreement, you shall be an independent contractor and
shall not be an agent of the Trust. The investment policies, the administration
of its business and affairs and all other acts of the Trust are and shall at all
times be subject to the approval and direction of the Board.

SECTION 4. Multiple Capacities.

Nothing in this Agreement shall be deemed to prohibit you or your
affiliates from acting, and being separately compensated for acting, in one or
more capacities on behalf of the Trust including, but not limited to, the
capacities of broker or distributor. The Trust understands that you and your
affiliates may act as investment manager or in other capacities on behalf of
other investment companies and customers. While information and recommendations
you supply to the Trust shall in your judgment be appropriate under the
circumstances and in light of the investment objectives and policies of the
Trust, they may be different from the information and recommendations you supply
to other investment companies and customers. You shall give the Trust equitable
treatment under the circumstances in supplying information, recommendations and
any other services requested of you but you shall not be required to give
preferential treatment to the Trust as compared with the treatment given to any
other investment company or customer. Whenever you shall act in multiple
capacities on behalf of the Trust, you shall maintain the appropriate separate
accounts and records for each such capacity. All information and advice supplied
by you to the Trust hereunder shall be for its own use exclusively.

SECTION 5. Payment of Expenses.

You shall assume and pay all of your own costs and expenses under this
Agreement. The Trust shall assume and pay, or reimburse you for, all expenses
incurred in the operation of the Trust (to the extent not specifically allocated
to you hereunder) and, in particular but without limitation, the Trust shall
bear the cost of and pay all interest, taxes, fees and commissions of every
kind, expenses of issue, repurchase or redemption of shares, expenses of
registering or qualifying shares for sale, insurance, association membership
dues, all charges of custodians (including fees as custodian, escrow agent, for
keeping books and performing portfolio valuations), transfer agents, registrars,
dividend disbursing agents, independent auditors and legal counsel, expenses of
preparing, printing and distributing prospectuses and all proxy materials,
reports and notices to shareholders, expenses of distribution of shares in
accordance with a plan adopted pursuant to Rule 12b-1 under the 1940 Act,
out-of-pocket expenses of trustees and fees of trustees who are not "interested
persons", and all other costs incident to the Trust's existence.

A-2
<PAGE> 20

SECTION 6. Compensation for Services.

Each series of the Trust will pay to you monthly, a management fee
determined daily at the rate set forth below times its net assets.

Euclid Market Neutral Fund 1/365 (1/366 for Leap Years) of 1.50%.

Notwithstanding the foregoing, nothing shall preclude you or your
affiliates from executing brokerage transactions for the Trust, charging the
Trust brokerage commissions therefor and deriving profit therefrom, provided
such payments to you by the Trust are reviewed in connection with each annual
continuation of this Agreement required by the 1940 Act and Section 9 below.

SECTION 7. Liability of the Investment Manager, etc.

You shall be liable for your own acts and omissions caused by your willful
misfeasance, bad faith or gross negligence in the performance of your duties or
by your reckless disregard of your obligations under this Agreement, and nothing
in this Agreement shall protect you against any such liability to the Trust or
its security holders. You shall not be liable for the acts and omissions of any
agent employed by you, nor for those of any bank, trust company, broker or other
person with whom, or into whose hands, any monies, shares of the Trust or
securities and investments may be deposited or come, pursuant to the provisions
of this Agreement. You shall not be liable for any defect in title of any
property acquired, nor for any loss unless it shall occur through your own
willful default. Subject to the first sentence of this section, you shall not be
liable for any action taken or omitted on advice, obtained in good faith, of
counsel, provided such counsel is satisfactory to the Trust.

SECTION 8. Termination of Agreement, Assignment, etc.

This Agreement may be terminated at any time, without the payment of any
penalty, upon sixty (60) days' written notice by the terminating party to the
other party, by you or by the Trust, acting pursuant to a resolution adopted by
its Board or by a vote of shareholders in accordance with the requirements of
the 1940 Act. This Agreement shall automatically terminate in the event of its
assignment. Termination shall not affect rights of the parties which have
accrued prior thereto.

SECTION 9. Duration of Agreement.

Unless sooner terminated, this Agreement shall continue in effect for two
years, and thereafter until terminated, provided that the continuation of this
Agreement and the terms thereof are specifically approved annually in accordance
with the requirements of the 1940 Act by a majority of the Trustees, including a
majority of the Trustees who are not "interested persons" of you or of the
Trust, cast in person at a meeting called for the purpose of voting on such
approval.

SECTION 10. Definitions.

The terms "assignment" and "interested person" when used in this Agreement
shall have the meanings given such terms in the 1940 Act and the rules and
regulations thereunder.

SECTION 11. Obligation of the Trust.

The Trust's Agreement and Declaration of Trust is on file with the
Secretary of the State of Delaware and notice is hereby given that this
Agreement is made and executed on behalf of the Trust, and not by the Trustees
or officers of the Trust individually, and the obligations of or arising out of
this Agreement are not binding upon the Trustees, officers or shareholders of
the Trust individually but are binding only upon the assets and property of one
or more classes or series of the Trust.

SECTION 12. Concerning Applicable Provisions of Law, etc.

This Agreement shall be subject to all applicable provisions of law,
including, without limitation, the applicable provisions of the 1940 Act, and,
to the extent that any provisions in this Agreement contained conflict with any
such applicable provisions of law, the latter shall control.

A-3
<PAGE> 21

SECTION 13. Counterparts.

This Agreement may be executed by any one or more of the parties in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.

SECTION 14. Effective Date.

This Agreement shall be effective upon the closing of the acquisition of
the Adviser by Phoenix Investment Partners, Ltd., and after its initial approval
by the Board of Trustees and shareholders in accordance with the 1940 Act.

Very truly yours,

EUCLID MUTUAL FUNDS

By:
--------------------------------------
Name:
Title:

Attest:
--------------------------------------

Accepted and agreed to this ____ day of __________, 1999.

EUCLID ADVISORS LLC

By:
- ----------------------------------------------------
Name:
Title:

Attest:

- -------------------------------------------------

A-4
<PAGE> 22

EUCLID MUTUAL FUNDS, 900 THIRD AVENUE, NEW YORK, NY 10022

EUCLID MUTUAL FUNDS
SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 25, 1999

PROXY SOLICITED ON BEHALF OF BOARD OF TRUSTEES

The undersigned shareholder of the EUCLID MARKET NEUTRAL FUND - [A, B,
C or I] hereby appoints EUGENE J. GLASER, CHARLES I. LEONE and DAVID KATZEN, and
each of them, with full power of substitution and revocation, as proxies to
represent the undersigned at the Special Meeting of Shareholders of the Fund to
be held at the offices of Euclid Mutual Funds, located at 900 Third Avenue, New
York, New York, on February 25, 1999 at 10:30 A.M., and at any and all
adjournments thereof, and thereat to vote all shares of the Fund which the
undersigned would be entitled to vote, with all powers the undersigned would
possess if personally present in accordance with the instructions on the proxy.

When this proxy is properly executed, the shares represented hereby
will be voted as specified. If no specification is made, this proxy will be
voted for approval of all matters listed on this proxy and in the discretion of
the proxies with respect to all other matters which may properly come before the
meeting and any adjournments thereof. The undersigned acknowledges receipt of
the accompanying notice of special meeting and proxy statement.

Please sign exactly as name or names appear on this proxy. If stock is held
jointly, each holder should sign. If signing as attorney, trustee, executor,
administrator, custodian, guardian or corporate officer, please give full title.

Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope, or by
telephone or via the Internet in accordance with instruction contained in the
box on the left [shown below].

* To vote by mail, sign below exactly as your name appears above and return the
Card in the envelope provided
* To vote by touch-tone phone, call 1-800-690-6903

* To vote by Internet, use website www.proxyvote.com

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

EUCLID MARKET NEUTRAL FUND [A, B, C or I]

VOTE ON TRUSTEES

2. 1)Claire B. Benenson, 2)James Balog, 3)S. Leland Dill,
4)Eugene J. Glaser and 5)Donald B. Romans

FOR WITHHOLD FOR ALL To withhold authority to vote,
ALL ALL EXCEPT mark "For All Except" and write the number on
the line below
[ ] [ ] [ ]
---------------------------

<TABLE>
<CAPTION>
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. To approve a new Management Agreement. [ ] [ ] [ ]

3. To ratify the selection of PricewaterhouseCoopers LLP as independent accountants. [ ] [ ] [ ]
</TABLE>

In their discretion, on such other matters as may properly come before the
meeting and any adjournments thereof.

__________________________________ ___________________
Signature Date