As filed with the Securities and Exchange Commission on February 27, 1997
Registration No. 2-14069
File No. 811-810
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 84 [x]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 32 [x]
(Check appropriate box or boxes.)
----------
Phoenix Series Fund
(Exact Name of Registrant as Specified in Charter)
----------
101 Munson Street, Greenfield, MA 01301
(Address of Principal Executive Offices) (Zip Code)
c/o Phoenix Equity Planning Corporation--Customer Service
(800) 243-1574
Registrant's Telephone Number
----------
Philip R. McLoughlin, Esq.
Vice Chairman and Chief Executive Officer
Phoenix Duff & Phelps Corporation
56 Prospect Street
Hartford, Connecticut 06115
(Name and Address of Agent for Service)
----------
It is proposed that this filing will become effective (check appropriate
box):
[ ] immediately upon filing pursuant to paragraph (b)
[X] on February 28, 1997 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Declaration Pursuant to Rule 24f-2
Registrant has registered an indefinite number of shares under the Securities
Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940.
Registrant filed the notice required by Rule 24f-2 with respect to the fiscal
year ended on October 31, 1996 on December 27, 1996.
<PAGE>
PHOENIX SERIES FUND
Cross Reference Sheet
Required by Rule 495
Under the Securities Act of 1933
PART A
Information Required in Prospectus
<TABLE>
<CAPTION>
Item Number Prospectus Caption
- ----------- ------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Introduction
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Introduction; Investment Objectives and Policies;
Additional Information
5. Management of the Fund Management of the Fund
6. Capital Stock and Other Securities Management of the Fund; Description of Shares;
Dividends, Distributions and Taxes
7. Purchase of Securities Being Offered How to Buy Shares; How to Redeem Shares;
Distribution Plans
8. Redemption or Repurchase How to Buy Shares; How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
</TABLE>
PART B
Information Required in Statement of Additional Information
<TABLE>
<CAPTION>
Item Number Statement of Additional Information
----------- -----------------------------------
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Cover Page
13. Investment Objectives and Policies Investment Policies; Investment Restrictions;
Portfolio Turnover
14. Management of the Registrant Management of the Trust
15. Control Persons and Principal Holders of Not Applicable
Securities
16. Investment Advisory and Other Services Management of the Trust; The Investment Adviser; The
Brokerage Allocation and Other Practices National Distributor and Distribution Plans; Financial
Statements
17. Brokerage Allocation and Other Practices Brokerage Allocation
18. Capital Stock and Other Securities Purchase of Shares; Alternative Purchase Arrangements;
Special Services; How to Redeem Shares
19. Purchase, Redemption and Pricing Determination of Net Asset Value; Purchase of Shares;
of Securities Being Offered Alternative Purchase Arrangements; Shareholder
Services; Special Services; How to Redeem Shares
20. Tax Status Dividends, Distributions and Taxes
21. Underwriter The Distributor and Distribution Plans
22. Calculation of Yield Quotations of Money Performance Information
Market Funds
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
[FRONT COVER]
P H O E N I X
FUNDS
Phoenix Series Fund
-- BALANCED FUND SERIES
-- CONVERTIBLE FUND SERIES
-- GROWTH FUND SERIES
-- AGGRESSIVE GROWTH FUND SERIES
-- HIGH YIELD FUND SERIES
-- MONEY MARKET FUND SERIES
-- U.S. GOVERNMENT SECURITIES FUND SERIES
PROSPECTUS
FEBRUARY 28, 1997
[LOGOTYPE] PHOENIX
DUFF & PHELPS
<PAGE>
PHOENIX SERIES FUND
101 Munson Street
Greenfield, MA 01301
PROSPECTUS
February 28, 1997
Phoenix Series Fund (the "Trust") is a diversified, open-end management
investment company whose shares are presently offered in seven series. Each
series generally operates as a separate fund with its own investment
objectives and policies designed to meet its specific investment goals. There
can be no assurance that any series will achieve its objectives.
Phoenix Balanced Fund Series ("Balanced Series") seeks as its investment
objectives reasonable income, long-term capital growth and conservation of
capital. It is intended that this Series will invest in common stocks and
fixed income securities, with emphasis on income-producing securities which
appear to have some potential for capital enhancement.
Phoenix Convertible Fund Series ("Convertible Series") seeks as its
investment objectives income and the potential for capital appreciation,
which objectives are to be considered as relatively equal. It is intended
that this Series will invest at least 65% of its total assets (exclusive of
cash and government securities) in debt securities and preferred stocks which
are convertible into, or carry the right to purchase, common stock or other
equity securities.
This Series may employ "leverage" by borrowing money and using such funds to
increase its investments in securities above the amounts otherwise possible.
Leverage may involve greater costs and risks than would otherwise be the
case. See the Statement of Additional Information.
Phoenix Growth Fund Series ("Growth Series") seeks as its investment
objective long-term appreciation of capital. Since income is not an
objective, any income generated by the investment of this Series' assets will
be incidental to its objective. It is intended that this Series will invest
primarily in the common stocks of companies believed by the Adviser to have
appreciation potential.
Phoenix Aggressive Growth Fund Series ("Aggressive Growth Series") seeks as
its investment objective appreciation of capital through the use of
aggressive investment techniques. It is intended that this Series will invest
primarily in domestic common stocks believed by management to have a
substantial potential for capital growth without being subject to
unreasonable risks. This Series may employ "leverage" by borrowing money and
using such funds to increase its investments in securities above the amounts
otherwise possible. Leverage may involve greater costs and risks than would
otherwise be the case. See the Statement of Additional Information.
================================================================================
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
CUSTOMER SERVICE--(800) 243-1574
MARKETING--(800) 243-4361
TELEPHONE ORDERS/EXCHANGES--(800) 367-5877
TELECOMMUNICATION DEVICE (TTY)--(800) 243-1926
<PAGE>
Phoenix High Yield Fund Series ("High Yield Series") seeks as its investment
objective high current income. Capital growth is a secondary objective which
will also be considered when consistent with the primary objective of high
current income. It is intended that this Series will invest primarily in a
diversified portfolio of high yield fixed income securities, commonly known
as junk bonds. In addition to other risks, these high yield, high risk bonds
are often subject to greater market fluctuations and risk of loss of income
and principal due to issuer default than are lower-yielding, higher-rated
bonds. The risks of investing in high yield, high risk bonds should be
carefully considered and are outlined on page 18.
Phoenix Money Market Fund Series ("Money Market Series") seeks as its
investment objective as high a level of current income as is consistent with
the preservation of capital and the maintenance of liquidity. It is intended
that this Series will invest primarily in a portfolio of high-quality money
market instruments generally maturing in less than one year. An investment in
the Money Market Series is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Series will be able to
maintain a stable net asset value of $1.00 per share.
Phoenix U.S. Government Securities Fund Series ("U.S. Government Securities
Series") seeks as its investment objective a high level of current income
consistent with safety of principal. This Series invests in securities which
are issued or guaranteed by the U.S. Government or its agencies and backed by
the full faith and credit of the U.S. Government and those supported by the
ability to borrow from the U.S. Treasury or by the credit of an agency or
otherwise supported by the U.S. Government.
All of the above Series, except the Money Market Series and the U.S.
Government Securities Series, may engage in limited securities and index
options transactions and enter into financial futures contracts and related
options for hedging purposes. See "Investment Techniques and Related Risks."
The Convertible Series and the High Yield Series may invest up to 100% and
65% respectively of their Portfolios in non- investment grade securities
(sometimes referred to as "junk bonds") which entail default and other risks
greater than those associated with higher rated securities. Investors should
carefully assess the risks associated with an investment in these Series. See
"Investment Objectives and Policies" and "Risk Factors."
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. No dealer, salesperson or
any other person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given
or made, such other information or representations must not be relied upon as
having been authorized by the Trust, Adviser or Distributor. This Prospectus
does not constitute an offer to sell or solicitation of an offer to buy any
of the securities offered hereby in any state in which, or to any person
whom, it is unlawful to make such offer. Neither the delivery of this
Prospectus nor any sale hereunder shall, under any circumstances, create any
implication that information herein is correct at any time subsequent to its
date. Investors should read and retain this Prospectus for future reference.
Additional information about the Trust is contained in the Statement of
Additional Information dated February 28, 1997 which has been filed with the
Securities and Exchange Commission (the "Commission") and is available upon
request at no charge by calling (800) 243-4361 or by writing to Phoenix
Equity Planning Corporation at 100 Bright Meadow Boulevard, P.O. Box 2200,
Enfield, Connecticut 06083-2200. The Statement of Additional Information is
incorporated herein by reference.
Shares of the Trust are not deposits or obligations of, or guaranteed or
endorsed by, any bank, credit union or affiliated entity and are not
federally insured or otherwise protected by the Federal Deposit Insurance
Corporation (FDIC), the Federal Reserve Board or any other agency and involve
investment risk, including possible loss of principal.
2
<PAGE>
TABLE OF CONTENTS
Page
---------
INTRODUCTION 4
FUND EXPENSES 5
FINANCIAL HIGHLIGHTS 8
PERFORMANCE INFORMATION 15
INVESTMENT OBJECTIVES AND POLICIES 16
Phoenix Balanced Fund Series 16
Phoenix Convertible Fund Series 16
Phoenix Growth Fund Series 17
Phoenix Aggressive Growth Fund Series 17
Phoenix High Yield Fund Series 18
Phoenix Money Market Fund Series 18
Phoenix U.S. Government Securities Fund Series 19
INVESTMENT TECHNIQUES AND RELATED RISKS 20
INVESTMENT RESTRICTIONS 23
MANAGEMENT OF THE FUND 23
DISTRIBUTION PLANS 25
HOW TO BUY SHARES 26
NET ASSET VALUE 32
HOW TO REDEEM SHARES 32
DIVIDENDS, DISTRIBUTIONS AND TAXES 34
ADDITIONAL INFORMATION 34
APPENDIX 35
3
<PAGE>
INTRODUCTION
This Prospectus describes the shares offered by and the operations of the
Phoenix Series Fund (the "Trust"). The Trust is a diversified, open-end
management investment company established as a business trust under the laws
of Massachusetts by an Agreement and Declaration of Trust dated April 7,
1958, as amended (the "Declaration of Trust"). The Declaration of Trust
authorizes the assets and shares of the Trust to be divided into series (the
"Series"). Each Series has a different investment objective and invests
primarily in certain types of securities, as described on the cover page of
this Prospectus, and is designed to meet different investment needs. In many
respects, each Series operates as if it were a separate mutual fund. The
Trustees have authority to issue an unlimited number of shares of beneficial
interest of one dollar par value of each Series.
The Investment Adviser
Phoenix Investment Counsel, Inc. (the "Adviser") is the investment adviser
to the Trust and its professional staff selects and supervises the
investments in each Series' portfolio. The Adviser is a subsidiary of Phoenix
Duff & Phelps Corporation and, prior to November 1, 1995, was an indirect
subsidiary of Phoenix Home Life Mutual Insurance Company. Under the terms of
the Investment Advisory Agreement, for its services to all Series of the
Trust, the Adviser is entitled to fees as set forth under the "Adviser." The
Adviser has agreed to reimburse the Trust for certain expenses as described
under "Management of the Fund."
Distributor and Distribution Plans
Phoenix Equity Planning Corporation ("Equity Planning" or "Distributor"),
serves as Distributor of the Trust's shares. See "Distribution Plans" and the
Statement of Additional Information. Equity Planning also acts as financial
agent and as such receives a fee. See "The Financial Agent." Equity Planning
also serves as the Trust's transfer agent. See "The Custodian and Transfer
Agent."
The Trust has adopted distribution plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act") for all classes
of all Series other than Class A Shares of the Money Market Series. Pursuant
to the distribution plan adopted for Class A Shares, the Trust shall
reimburse the Distributor up to a maximum annual rate of 0.25% of the Trust's
average daily Class A Share net assets of a Series for distribution
expenditures incurred in connection with the sale and promotion of Class A
Shares of a Series and for furnishing shareholder services. Pursuant to the
distribution plan adopted for Class B Shares, the Trust shall reimburse the
Distributor up to a maximum annual rate of 1.00% of the Trust's average daily
Class B Share net assets of a Series for distribution expenses incurred in
connection with the sale and promotion of Class B Shares of a Series and for
furnishing shareholder services. See "Distribution Plans."
Purchase of Shares
The Trust offers two classes of shares of each Series which may be purchased
at a price equal to their net asset value per share plus a sales charge
(except for Class A Shares of the Money Market Series) which, at the election
of the purchaser, may be imposed (i) at the time of purchase (the "Class A
Shares"), or (ii) on a contingent deferred basis (the "Class B Shares").
Completed applications for the purchase of shares should be mailed to the
Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box 8301,
Boston, MA 02266-8301.
Class A Shares (except the Money Market Series) are offered to the public at
the next determined net asset value after receipt of the order by State
Street Bank and Trust Company plus a maximum sales charge of 4.75% of the
offering price (4.99% of the amount invested) on single purchases of less
than $50,000. The sales charge for Class A Shares is reduced on a graduated
scale on single purchases of $50,000 or more and subject to other conditions
stated below. See "How to Buy Shares," "How to Obtain Reduced Sales
Charges--Class A Shares," and "Net Asset Value."
Class B Shares are offered to the public at the next determined net asset
value after receipt of an order by State Street Bank and Trust Company with
no sales charge. Class B Shares are subject to a sales charge if they are
redeemed within five years of purchase. See "How to Buy Shares" and "Deferred
Sales Charge Alternative--Class B Shares."
Shares of the Money Market Series are offered to the public at their
constant net asset value of $1.00 per share with no sales charge on Class A
Shares. There can be no assurance that the Money Market Series will be able
to maintain a stable net asset value of $1.00 per share.
Shares of each class represent an identical interest in the investment
portfolio of that Series and have the same rights except that Class B Shares
bear the cost of the higher distribution fees which cause the Class B Shares
to have a higher expense ratio and to receive lower dividends than Class A
Shares. See "How to Buy Shares."
Minimum Initial and Subsequent Investments
The minimum initial investment is $500 ($25 if using the bank draft
investing program designated "Investo-Matic") and the minimum subsequent
investment is $25. Exceptions to the minimum and subsequent investment
amounts are available under specific circumstances. See "How to Buy Shares."
Redemption Price
Class A Shares of a Series may be redeemed at any time at the net asset
value per share next computed after receipt of a redemption request by Equity
Planning, the Trust's transfer agent. Class B shareholders redeeming shares
within five years of the date of purchase will normally be assessed a
contingent deferred sales charge. See "How to Redeem Shares."
Risk Factors
There can be no assurance that any Series will achieve its investment
objectives. In addition, special risks may be presented by the particular
types of securities in which a Series may invest. For example, several Series
may invest in below
4
<PAGE>
investment grade securities. To the extent that a Series invests in
lower-rated securities (sometimes referred to as "junk bonds"), such an
investment is speculative and involves risks not typically associated with
investment in higher rated securities, including overall greater risk of
non-payment of interest and principal and potentially greater sensitivity to
general economic conditions and changes in interest rates. In addition,
investors should consider risks inherent in foreign debt securities, futures
and options. See "Investment Objectives and Policies."
FUND EXPENSES
The following tables illustrate all expenses and fees that a shareholder
will incur. The expenses and fees set forth in these tables are for the
fiscal year ended October 31, 1996.
<TABLE>
<CAPTION>
Class A Shares
- ----------------------------------------------------------------------------------------
Aggressive
Balanced Convertible Growth Growth
Series Series Series Series
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shareholder Transaction
Expenses
Maximum Sales Load Imposed on
Purchases (as a percentage of
offering price) 4.75% 4.75% 4.75% 4.75%
Maximum Sales Load Imposed on
Reinvested Dividends None None None None
Deferred Sales Load (as a
percentage of original
purchase price or redemption
proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(as a percentage
of average net assets)
Management Fees 0.52% 0.65% 0.66% 0.70%
12b-1 Fees (a) 0.25% 0.25% 0.25% 0.25%
Other Operating Expenses
(after reimbursement) 0.24% 0.27% 0.26% 0.25%
---- ---- ---- ----
Total Fund Operating Expenses 1.01% 1.17% 1.17% 1.20%
==== ==== ==== ====
</TABLE>
Class A Shares
- ----------------------------------------------------------------------------
U.S.
Money Government
High Yield Market Securities
Series Series Series
- ----------------------------------------------------------------------------
Shareholder Transaction
Expenses
Maximum Sales Load Imposed on
Purchases (as a percentage of
offering price) 4.75% None 4.75%
Maximum Sales Load Imposed on
Reinvested Dividends None None None
Deferred Sales Load (as a
percentage of original
purchase price or redemption
proceeds, as applicable) None None None
Redemption Fee None None None
Exchange Fee None None None
Annual Fund Operating Expenses
(as a percentage
of average net assets)
Management Fees 0.65% 0.40% 0.45%
12b-1 Fees (a) 0.25% None 0.25%
Other Operating Expenses
(after reimbursement) 0.27% 0.44%(b) 0.33%
---- ---- ----
Total Fund Operating Expenses 1.17% 0.84% 1.03%
==== ==== ====
(a) "Rule 12b-1 Fees" represent an asset-based sales charge that, for a
long-term shareholder, may be higher than the maximum front-end sales charge
permitted by the National Association of Securities Dealers, Inc. ("NASD").
(b) The Adviser has agreed to reimburse the Trust for the amount, if any, by
which the Money Market Series' operating expenses for any fiscal year
exceeded 0.85% of the average daily net assets of Class A Shares and 1.60% of
the average daily net assets of Class B Shares of the Series. There were no
expense reimbursements for the fiscal year ended October 31, 1996.
5
<PAGE>
<TABLE>
<CAPTION>
Class B Shares
- ----------------------------------------------------------------------------------------------------
Aggressive
Balanced Convertible Growth Growth
Series Series Series Series
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shareholder Transaction
Expenses
Maximum Sales Load Imposed
on Purchases (as a
percentage of offering
price) None None None None
Maximum Sales Load Imposed
on Reinvested Dividends None None None None
Deferred Sales Load (as a 5% during 5% during 5% during 5% during
percentage of original the first year, the first year, the first year, the first year,
purchase price or decreasing 1% decreasing 1% decreasing 1% decreasing 1%
redemption proceeds, as annually to 2% annually to 2% annually to 2% annually to 2%
applicable) during the during the during the during the
fourth fourth fourth fourth
and fifth and fifth and fifth and fifth
years, years, years, years,
dropping from dropping from dropping from dropping from
2% to 0% after 2% to 0% after 2% to 0% after 2% to 0% after
the fifth year the fifth year the fifth year the fifth year
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund
Operating Expenses
(as a percentage of
average net assets)
Management Fees 0.52% 0.65% 0.66% 0.70%
12b-1 Fees (a) 1.00% 1.00% 1.00% 1.00%
Other Operating Expenses
(after reimbursement) 0.24% 0.27% 0.26% 0.25%
---- ---- ---- ----
Total Fund Operating
Expenses 1.76% 1.92% 1.92% 1.95%
==== ==== ==== ====
</TABLE>
Class B Shares
- --------------------------------------------------------------------------------
U.S.
Money Government
High Yield Market Securities
Series Series Series
- --------------------------------------------------------------------------------
Shareholder Transaction
Expenses
Maximum Sales Load Imposed
on Purchases (as a
percentage of offering
price) None None None
Maximum Sales Load Imposed
on Reinvested Dividends None None None
Deferred Sales Load (as a 5% during 5% during 5% during
percentage of original the first year, the first year, the first year,
purchase price or decreasing 1% decreasing 1% decreasing 1%
redemption proceeds, as annually to 2% annually to 2% annually to 2%
applicable) during the during the during the
fourth fourth fourth
and fifth and fifth and fifth
years, years, years,
dropping from dropping from dropping from
2% to 0% after 2% to 0% after 2% to 0% after
the fifth year the fifth year the fifth year
Redemption Fee None None None
Exchange Fee None None None
Annual Fund
Operating Expenses
(as a percentage of
average net assets)
Management Fees 0.65% 0.40% 0.45%
12b-1 Fees (a) 1.00% 0.75% 1.00%
Other Operating Expenses
(after reimbursement) 0.27% 0.44%(b) 0.33%
---- ---- ----
Total Fund Operating
Expenses 1.92% 1.59% 1.78%
==== ==== ====
(a) "Rule 12b-1 Fees" represent an asset-based sales charge that, for a
long-term shareholder, may be higher than the maximum front-end sales charge
permitted by the National Association of Securities Dealers, Inc. ("NASD").
(b) The Adviser has agreed to reimburse the Trust for the amount, if any, by
which the Money Market Series' operating expenses for any fiscal year
exceeded 0.85% of the average daily net assets of Class A Shares and 1.60% of
the average daily net assets of Class B Shares of the Series. There were no
expense reimbursements for the fiscal year ended October 31, 1996.
<TABLE>
<CAPTION>
Cumulative Expenses
Paid for the Period
Example* 1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a
hypothetical $1,000 investment assuming (1) 5% annual
return and (2) redemption at the end of each time
period:
Balanced Series (Class A Shares) $57 $78 $101 $165
Balanced Series (Class B Shares) 68 85 115 188
Convertible Series (Class A Shares) 59 83 109 183
Convertible Series (Class B Shares) 69 90 124 205
Growth Series (Class A Shares) 59 83 109 183
Growth Series (Class B Shares) 69 90 124 205
Aggressive Growth Series (Class A Shares) 59 84 110 186
Aggressive Growth Series (Class B Shares) 70 91 125 208
High Yield Series (Class A Shares) 59 83 109 183
High Yield Series (Class B Shares) 69 90 124 205
Money Market Series (Class A Shares) 9 27 47 104
Money Market Series (Class B Shares) 66 80 107 169
U.S. Government Sec. Series (Class A Shares) 58 79 102 167
U.S. Government Sec. Series (Class B Shares) 68 86 116 190
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Cumulative Expenses
Paid for the Period
Example* 1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on the
same $1,000 investment assuming no redemption at the
end of each time period:
Balanced Series (Class A Shares) $57 $78 $101 $165
Balanced Series (Class B Shares) 18 55 95 188
Convertible Series (Class A Shares) 59 83 109 183
Convertible Series (Class B Shares) 19 60 104 205
Growth Series (Class A Shares) 59 83 109 183
Growth Series (Class B Shares) 19 60 104 205
Aggressive Growth Series (Class A Shares) 59 84 110 186
Aggressive Growth Series (Class B Shares) 20 61 105 208
High Yield Series (Class A Shares) 59 83 109 183
High Yield Series (Class B Shares) 19 60 104 205
Money Market Series (Class A Shares) 9 27 47 104
Money Market Series (Class B Shares) 16 50 87 169
U.S. Government Sec. Series (Class A Shares) 58 79 102 167
U.S. Government Sec. Series (Class B Shares) 18 56 96 190
</TABLE>
*The purpose of the tables above are to help the investor understand the
various costs and expenses that the investor will bear, directly or
indirectly. The Example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown. See
"Management of the Fund," "Distribution Plans" and "How to Buy Shares."
7
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables set forth certain financial information for the
respective fiscal years of the Trust. This financial information has been
audited by Price Waterhouse LLP, independent accountants. Their opinion and
the Trust's Financial Statements and notes thereto are incorporated by
reference in the Statement of Additional Information. The Statement of
Additional Information and the Trust's most recent Annual Report (containing
the report of Independent Accountants and additional information relating to
each Series' performance) are available at no charge upon request by calling
(800) 243-4361.
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED FUND SERIES
Class A
----------------------------------------------------------------------------------------
Year ended October 31,
----------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $17.04 $15.23 $16.64 $15.92 $16.05 $13.86 $13.91
Income from
investment
operations
Net investment
income 0.48 0.52 0.48 0.46 0.52 0.62 0.69
Net realized and
unrealized gain
(loss) 1.46 1.80 (1.01) 1.08 0.92 2.84 (0.04)
------ ------ ------ ------ ------ ------ ------
Total from
investment
operations 1.94 2.32 (0.53) 1.54 1.44 3.46 0.65
------ ------ ------ ------ ------ ------ ------
Less distributions
Dividends from net
investment income (0.49) (0.51) (0.49) (0.46) (0.54) (0.64) (0.67)
Dividends from net
realized gains (0.93) -- (0.39) (0.36) (1.03) (0.63) (0.03)
------ ------ ------ ------ ------ ------ ------
Total distributions (1.42) (0.51) (0.88) (0.82) (1.57) (1.27) (0.70)
------ ------ ------ ------ ------ ------ ------
Change in net asset
value 0.52 1.81 (1.41) 0.72 (0.13) 2.19 (0.05)
------ ------ ------ ------ ------ ------ ------
Net asset value, end
of period $17.56 $17.04 $15.23 $16.64 $15.92 $16.05 $13.86
====== ====== ====== ====== ====== ====== ======
Total return(1) 12.03% 15.52% -3.28% 9.92% 9.77% 26.26% 4.71%
Ratios/supplemental
data:
Net assets, end of
period (thousands) $1,897,306 $2,345,440 $2,601,808 $3,126,014 $2,146,726 $941,754 $472,642
Ratio to average net
assets of:
Operating expenses 1.01% 1.02% 0.96% 0.95% 0.98% 0.98% 0.85%
Net investment
income 2.74% 3.27% 3.03% 2.88% 3.55% 4.22% 4.91%
Portfolio turnover 191% 197% 159% 130% 136% 196% 181%
Average commission
rate paid(4) $0.0546 N/A N/A N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
BALANCED FUND SERIES
Class A Class B
-------------------------------------- --------------------------------------
Year ended From
Year Ended October 31, October 31, inception
-------------------------------------- ------------------------- 7/15/94 to
1989 1988 1987 1996 1995 10/31/94
---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $12.19 $13.53 $14.29 $17.01 $15.23 $15.27
Income from
investment
operations
Net investment
income 0.69 0.58 0.57 0.35 0.40 0.09
Net realized and
unrealized gain
(loss) 1.74 (0.33) 0.85 1.47 1.80 (0.04)
------ ------ ------ ------ ------ ------
Total from
investment
operations 2.43 0.25 1.42 1.82 2.20 0.05
------ ------ ------ ------ ------ ------
Less distributions
Dividends from net
investment income (0.71) (0.61) (0.59) (0.36) (0.42) (0.09)
Dividends from net
realized gains -- (0.98) (1.59) (0.93) -- --
------ ------ ------ ------ ------ ------
Total distributions (0.71) (1.59) (2.18) (1.29) (0.42) (0.09)
------ ------ ------ ------ ------ ------
Change in net asset
value 1.72 (1.34) (0.76) 0.53 1.78 (0.04)
------ ------ ------ ------ ------ ------
Net asset value, end
of period $13.91 $12.19 $13.53 $17.54 $17.01 $15.23
====== ====== ====== ====== ====== ======
Total return(1) 20.60% 2.14% 10.78% 11.24% 14.68% 0.34%(3)
Ratios/supplemental
data:
Net assets, end of
period (thousands) $446,970 $425,737 $368,695 $26,209 $16,971 $4,629
Ratio to average net
assets of:
Operating expenses 0.93% 0.80% 0.72% 1.76% 1.78% 1.65%(2)
Net investment
income 5.28% 4.87% 4.28% 1.96% 2.46% 2.36%(2)
Portfolio turnover 172% 226% 171% 191% 197% 159%
Average commission
rate paid(4) N/A N/A N/A $0.0546 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not reflect
mark-ups or spreads on shares traded on a principal basis.
8
<PAGE>
<TABLE>
<CAPTION>
CONVERTIBLE FUND SERIES
Class A
------------------------------------------------------------------------------------------
Year ended October 31,
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $18.23 $17.56 $19.34 $18.86 $18.36 $16.63 $17.13
Income from
investment
operations
Net investment
income 0.70(4) 0.87 0.78 0.68 0.77 0.87 0.91
Net realized and
unrealized gain
(loss) 1.68 1.04 (1.06) 1.53 1.54 1.75 (0.49)
------ ------ ------ ------ ------ ------ ------
Total from
investment
operations 2.38 1.91 (0.28) 2.21 2.31 2.62 0.42
------ ------ ------ ------ ------ ------ ------
Less distributions
Dividends from net
investment income (0.77) (1.05) (0.69) (0.73) (0.72) (0.89) (0.92)
Dividends from net
realized gains (0.58) (0.19) (0.81) (1.00) (1.09) -- --
------ ------ ------ ------ ------ ------ ------
Total distributions (1.35) (1.24) (1.50) (1.73) (1.81) (0.89) (0.92)
------ ------ ------ ------ ------ ------ ------
Change in net asset
value 1.03 0.67 (1.78) 0.48 0.50 1.73 (0.50)
------ ------ ------ ------ ------ ------ ------
Net asset value, end
of period $19.26 $18.23 $17.56 $19.34 $18.86 $18.36 $16.63
====== ====== ====== ====== ====== ====== ======
Total return(1) 13.55% 11.45% -1.48% 12.58% 13.77% 15.97% 2.35%
Ratios/supplemental
data:
Net assets, end of
period (thousands) $214,874 $219,384 $226,294 $252,072 $200,944 $169,288 $143,200
Ratio to average net
assets of:
Operating expenses 1.17% 1.18% 1.14% 1.15% 1.20% 1.14% 0.99%
Net investment
income 3.75% 4.78% 4.27% 3.70% 4.28% 4.84% 5.17%
Portfolio turnover 141% 79% 91% 94% 200% 284% 194%
Average commission
rate paid(5) $0.0619 N/A N/A N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE FUND SERIES
Class A Class B
-------------------------------------- --------------------------------------
Year ended From
Year ended October 31, October 31, inception
-------------------------------------- ------------------------- 7/15/94 to
1989 1988 1987 1996 1995 10/31/94
---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $15.55 $17.84 $19.10 $18.17 $17.55 $17.59
Income from
investment
operations
Net investment
income 0.95 0.86 0.92 0.55(4) 0.70(4) 0.15
Net realized and
unrealized gain
(loss) 1.58 (0.06) 0.78 1.68 1.07 (0.06)
------ ------ ------ ------ ------ ------
Total from
investment
operations 2.53 0.80 1.70 2.23 1.77 0.09
------ ------ ------ ------ ------ ------
Less distributions
Dividends from net
investment income (0.95) (0.84) (0.92) (0.62) (0.96) (0.13)
Dividends from net
realized gains -- (2.25) (2.04) (0.58) (0.19) --
------ ------ ------ ------ ------ ------
Total distributions (0.95) (3.09) (2.96) (1.20) (1.15) (0.13)
------ ------ ------ ------ ------ ------
Change in net asset
value 1.58 (2.29) (1.26) 1.03 0.62 (0.04)
------ ------ ------ ------ ------ ------
Net asset value, end
of period $17.13 $15.55 $17.84 $19.20 $18.17 $17.55
====== ====== ====== ====== ====== ======
Total return(1) 16.83% 4.90% 9.23% 12.72% 10.59% 0.49%(3)
Ratios/supplemental
data:
Net assets, end of
period (thousands) $156,279 $159,426 $154,716 $5,947 $3,715 $856
Ratio to average net
assets of:
Operating expenses 1.03% 0.83% 0.73% 1.92% 1.95% 1.83%(2)
Net investment
income 5.71% 5.51% 5.12% 2.95% 3.92% 3.29%(2)
Portfolio turnover 214% 213% 299% 141% 79% 91%
Average commission
rate paid(5) N/A N/A N/A $0.0619 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not reflect
mark-ups, mark-downs or spreads on shares traded on a principal basis.
9
<PAGE>
<TABLE>
<CAPTION>
GROWTH FUND SERIES
Class A
------------------------------------------------------------------------------------------
Year ended October 31,
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $24.92 $21.24 $21.53 $20.76 $22.60 $18.45 $18.76
Income from
investment
operations(5)
Net investment
income 0.20(4) 0.26 0.26 0.32 0.36 0.50 0.64
Net realized and
unrealized gain
(loss) 3.63 4.53 0.17 1.15 0.97 4.97 (0.05)
------ ------ ------ ------ ------ ------ ------
Total from
investment
operations 3.83 4.79 0.43 1.47 1.33 5.47 0.59
------ ------ ------ ------ ------ ------ ------
Less distributions
Dividends from net
investment income (0.25) (0.30) (0.24) (0.32) (0.45) (0.55) (0.62)
Dividends from net
realized gains (1.63) (0.81) (0.48) (0.38) (2.72) (0.77) (0.28)
------ ------ ------ ------ ------ ------ ------
Total distributions (1.88) (1.11) (0.72) (0.70) (3.17) (1.32) (0.90)
------ ------ ------ ------ ------ ------ ------
Change in net asset
value 1.95 3.68 (0.29) 0.77 (1.84) 4.15 (0.31)
------ ------ ------ ------ ------ ------ ------
Net asset value, end
of period $26.87 $24.92 $21.24 $21.53 $20.76 $22.60 $18.45
====== ====== ====== ====== ====== ====== ======
Total return(1) 16.34% 23.91% 2.06% 7.20% 6.95% 30.97% 3.05%
Ratios/supplemental
data:
Net assets, end of
period (thousands) $2,347,471 $2,300,251 $2,140,458 $2,563,442 $2,186,868 $1,251,565 $678,151
Ratio to average net
assets of:
Operating expenses 1.17% 1.20% 1.19% 1.18% 1.17% 1.15% 1.01%
Net investment
income 0.80% 0.92% 1.22% 1.55% 1.86% 2.49% 3.37%
Portfolio turnover 116% 109% 118% 176% 192% 227% 203%
Average commission
rate paid(6) $0.0534 N/A N/A N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
GROWTH FUND SERIES
Class A Class B
-------------------------------------- --------------------------------------
Year ended From
Year ended October 31, October 31, inception
-------------------------------------- ------------------------- 7/15/94 to
1989 1988 1987 1996 1995 10/31/94
---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $16.01 $17.96 $18.59 $24.74 $21.19 $20.48
Income from
investment
operations(5)
Net investment
income 0.67 0.39 0.36 0.00(4) 0.00(4) 0.01
Net realized and
unrealized gain
(loss) 2.68 0.72 1.37 3.61 4.60 0.70
------ ------ ------ ------ ------ ------
Total from
investment
operations 3.35 1.11 1.73 3.61 4.60 0.71
------ ------ ------ ------ ------ ------
Less distributions
Dividends from net
investment income (0.60) (0.51) (0.21) (0.09) (0.24) --
Dividends from net
realized gains -- (2.55) (2.15) (1.63) (0.81) --
------ ------ ------ ------ ------ ------
Total distributions (0.60) (3.06) (2.36) (1.72) (1.05) --
------ ------ ------ ------ ------ ------
Change in net asset
value 2.75 (1.95) (0.63) 1.89 3.55 0.71
------ ------ ------ ------ ------ ------
Net asset value, end
of period $18.76 $16.01 $17.96 $26.63 $24.74 $21.19
====== ====== ====== ====== ====== ======
Total return(1) 21.44% 6.99% 9.95% 15.48% 23.02% 3.47%(3)
Ratios/supplemental
data:
Net assets, end of
period (thousands) $680,498 $603,600 $528,962 $45,326 $20,111 $2,966
Ratio to average net
assets of:
Operating expenses 1.06% 0.85% 0.71% 1.93% 1.97% 1.87%(2)
Net investment
income 3.79% 2.48% 2.64% 0.01% 0.01% 0.32%(2)
Portfolio turnover 180% 221% 185% 116% 109% 118%
Average commission
rate paid(6) N/A N/A N/A $0.0534 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not reflect
mark-ups, mark-downs or spreads on shares traded on a principal basis.
10
<PAGE>
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND SERIES
Class A
------------------------------------------------------------------------------------------
Year ended October 31,
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $16.51 $13.33 $14.56 $13.56 $14.88 $10.77 $12.68
Income from
investment
operations(5)
Net investment
income (loss) (0.13)(4) 0.06(4) 0.27 0.22 0.23 0.23 0.17
Net realized and
unrealized gain
(loss) 2.64 4.21 (0.21) 1.62 0.59 4.05 (1.82)
------ ------ ------ ------ ------ ------ ------
Total from
investment
operations 2.51 4.27 0.06 1.84 0.82 4.28 (1.65)
------ ------ ------ ------ ------ ------ ------
Less distributions
Dividends from net
investment income (0.02) (0.19) (0.22) (0.23) (0.25) (0.17) (0.26)
Dividends from net
realized gains (2.16) (0.90) (1.07) (0.61) (1.50) -- --
Distributions in
excess of
accumulated
realized gains -- -- -- -- (0.39) -- --
------ ------ ------ ------ ------ ------ ------
Total distributions (2.18) (1.09) (1.29) (0.84) (2.14) (0.17) (0.26)
------ ------ ------ ------ ------ ------ ------
Change in net asset
value 0.33 3.18 (1.23) 1.00 (1.32) 4.11 (1.91)
------ ------ ------ ------ ------ ------ ------
Net asset value, end
of period $16.84 $16.51 $13.33 $14.56 $13.56 $14.88 $10.77
====== ====== ====== ====== ====== ====== ======
Total return(1) 17.43% 35.14% 0.37% 14.15% 7.11% 39.99% -13.27%
Ratios/supplemental
data:
Net assets, end of
period (thousands) $233,488 $180,288 $140,137 $143,035 $128,530 $125,942 $99,428
Ratio to average net
assets of:
Operating expenses 1.20% 1.29% 1.26% 1.17% 1.25% 1.20% 1.07%
Net investment
income (loss) (0.81)% 0.43% 1.97% 1.58% 1.70% 1.68% 1.37%
Portfolio turnover 401% 331% 306% 192% 251% 332% 407%
Average commission
rate paid(6) $0.0655 N/A N/A N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND SERIES
Class A Class B
-------------------------------------- --------------------------------------
Year ended From
Year ended October 31, October 31, inception
-------------------------------------- ------------------------- 7/21/94 to
1989 1988 1987 1996 1995 10/31/94
---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $11.09 $13.89 $14.91 $16.38 $13.31 $13.09
Income from
investment
operations(5)
Net investment
income (loss) 0.43 0.27 0.29 (0.25)(4) (0.12)(4) 0.02
Net realized and
unrealized gain
(loss) 1.58 0.26 1.47 2.60 4.26 0.20
------ ------ ------ ------ ------ ------
Total from
investment
operations 2.01 0.53 1.76 2.35 4.14 0.22
------ ------ ------ ------ ------ ------
Less distributions
Dividends from net
investment income (0.42) (0.33) (0.19) -- (0.17) --
Dividends from net
realized gains -- (3.00) (2.59) (2.16) (0.90) --
Distributions in
excess of
accumulated
realized gains -- -- -- -- -- --
------ ------ ------ ------ ------ ------
Total distributions (0.42) (3.33) (2.78) (2.16) (1.07) --
------ ------ ------ ------ ------ ------
Change in net asset
value 1.59 (2.80) (1.02) 0.19 3.07 0.22
------ ------ ------ ------ ------ ------
Net asset value, end
of period $12.68 $11.09 $13.89 $16.57 $16.38 $13.31
====== ====== ====== ====== ====== ======
Total return(1) 18.59% 4.52% 13.04% 16.52% 34.15% 1.68%(3)
Ratios/supplemental
data:
Net assets, end of
period (thousands) $130,290 $124,650 $115,236 $10,466 $2,393 $330
Ratio to average net
assets of:
Operating expenses 1.09% 0.84% 0.76% 1.95% 2.04% 1.81%(2)
Net investment
income (loss) 3.60% 2.39% 2.20% (1.57)% (0.83)% 1.45%(2)
Portfolio turnover 248% 278% 152% 401% 331% 306%
Average commission
rate paid(6) N/A N/A N/A $0.0655 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not reflect
mark-ups, mark-downs or spreads on shares traded on a principal basis.
11
<PAGE>
<TABLE>
<CAPTION>
HIGH YIELD FUND SERIES
Class A
------------------------------------------------------------------------------------------
Year ended October 31,
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.17 $8.11 $9.11 $8.14 $7.70 $6.72 $7.90
Income from
investment
operations
Net investment
income 0.78 0.80 0.76 0.74 0.77 0.74 0.81
Net realized and
unrealized gain
(loss) 0.46 0.04 (0.97) 0.97 0.44 0.98 (1.18)
----- ----- ----- ----- ----- ----- -----
Total from
investment
operations 1.24 0.84 (0.21) 1.71 1.21 1.72 (0.37)
----- ----- ----- ----- ----- ----- -----
Less distributions
Dividends from net
investment income (0.78) (0.78) (0.76) (0.74) (0.77) (0.74) (0.81)
Tax return of
capital -- -- (0.03) -- -- -- --
----- ----- ----- ----- ----- ----- -----
Total distributions (0.78) (0.78) (0.79) (0.74) (0.77) (0.74) (0.81)
----- ----- ----- ----- ----- ----- -----
Change in net asset
value 0.46 0.06 (1.00) 0.97 0.44 0.98 (1.18)
----- ----- ----- ----- ----- ----- -----
Net asset value, end
of period $8.63 $8.17 $8.11 $9.11 $8.14 $7.70 $6.72
===== ===== ===== ===== ===== ===== =====
Total return(1) 15.95% 11.19% -2.57% 21.87% 16.28% 26.77% -4.99%
Ratios/supplemental
data:
Net assets, end of
period
(thousands) $501,265 $507,855 $531,773 $182,333 $113,197 $91,664 $80,391
Ratio to average net
assets of:
Operating expenses 1.17% 1.21% 1.19% 1.04% 1.08% 1.08% 0.89%
Net investment
income 9.21% 10.01% 9.01% 8.46% 9.51% 10.12% 11.02%
Portfolio turnover 162% 147% 222% 157% 205% 326% 321%
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD FUND SERIES
Class A Class B
-------------------------------------- --------------------------------------
Year ended From
Year ended October 31, October 31, inception
-------------------------------------- ------------------------- 2/16/94 to
1989 1988 1987 1996 1995 10/31/94
---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.84 $8.42 $9.73 $8.19 $8.13 $9.38
Income from
investment
operations
Net investment
income 1.03 1.01 1.20 0.71 0.72 0.54
Net realized and
unrealized gain
(loss) (0.95) 0.42 (1.25) 0.45 0.07 (1.25)
----- ----- ----- ----- ----- -----
Total from
investment
operations 0.08 1.43 (0.05) 1.16 0.79 (0.71)
----- ----- ----- ----- ----- -----
Less distributions
Dividends from net
investment income (1.02) (1.01) (1.26) (0.72) (0.73) (0.52)
Tax return of
capital -- -- -- -- -- (0.02)
----- ----- ----- ----- ----- -----
Total distributions (1.02) (1.01) (1.26) (0.72) (0.73) (0.54)
----- ----- ----- ----- ----- -----
Change in net asset
value (0.94) 0.42 (1.31) 0.44 0.06 (1.25)
----- ----- ----- ----- ----- -----
Net asset value, end
of period $7.90 $8.84 $8.42 $8.63 $8.19 $8.13
===== ===== ===== ===== ===== =====
Total return(1) 0.64% 17.71% -2.29% 14.88% 10.44% -7.67%(3)
Ratios/supplemental
data:
Net assets, end of
period
(thousands) $133,887 $161,208 $137,951 $25,595 $12,331 $6,056
Ratio to average net
assets of:
Operating expenses 0.85% 0.76% 0.72% 1.92% 1.97% 1.80%(2)
Net investment
income 11.81% 11.45% 11.42% 8.47% 9.18% 9.12%(2)
Portfolio turnover 285% 217% 97% 162% 147% 222%
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
12
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND SERIES
Class A
------------------------------------------------------------------------------------------
Year ended October 31,
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from
investment
operations
Net investment
income 0.047 0.053 0.032 0.025(1) 0.035(1) 0.060 0.076
----- ----- ----- ----- ----- ----- -----
Total from
investment
operations 0.047 0.053 0.032 0.025 0.035 0.060 0.076
----- ----- ----- ----- ----- ----- -----
Less distributions
Dividends from net
investment income (0.047) (0.053) (0.032) (0.025) (0.035) (0.060) (0.076)
----- ----- ----- ----- ----- ----- -----
Total distributions (0.047) (0.053) (0.032) (0.025) (0.035) (0.060) (0.076)
----- ----- ----- ----- ----- ----- -----
Change in net asset
value -- -- -- -- -- -- --
----- ----- ----- ----- ----- ----- -----
Net asset value, end
of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== =====
Total return 4.67% 5.32% 3.20% 2.50% 3.50% 6.00% 7.60%
Ratios/supplemental
data:
Net assets, end of
period (thousands) $192,859 $193,534 $196,566 $170,334 $180,786 $168,573 $163,645
Ratio to average net
assets of:
Operating expenses 0.84% 0.71% 0.85% 0.85% 0.85% 0.82% 0.85%
Net investment
income 4.68% 5.31% 3.19% 2.53% 3.50% 6.01% 7.59%
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET FUND SERIES
Class A Class B
-------------------------------------- --------------------------------------
From
Year ended inception
Year ended October 31, October 31, 7/15/94 to
-------------------------------------- ------------------------- ------------
1989 1988 1987 1996 1995 10/31/94
---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from
investment
operations
Net investment
income 0.085(1) 0.067(1) 0.057(1) 0.039 0.046 0.007
----- ----- ----- ----- ----- -----
Total from
investment
operations 0.085 0.067 0.057 0.039 0.046 0.007
----- ----- ----- ----- ----- -----
Less distributions
Dividends from net
investment income (0.085) (0.067) (0.057) (0.039) (0.046) (0.007)
----- ----- ----- ----- ----- -----
Total distributions (0.085) (0.067) (0.057) (0.039) (0.046) (0.007)
----- ----- ----- ----- ----- -----
Change in net asset
value -- -- -- -- -- --
----- ----- ----- ----- ----- -----
Net asset value, end
of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
Total return 8.50% 6.70% 5.70% 3.93% 4.63% 0.70%(3)
Ratios/supplemental
data:
Net assets, end of
period (thousands) $149,968 $107,262 $92,481 $10,223 $8,506 $2,086
Ratio to average net
assets of:
Operating expenses 0.85% 0.85% 0.85% 1.59% 1.44% 1.60%(2)
Net investment
income 8.53% 6.71% 5.78% 3.92% 4.62% 3.46%(2)
</TABLE>
(1) Includes reimbursement of operating expenses by Adviser of $0.0001,
$0.001, $0.001, $0.001, and $0.002, respectively.
(2) Annualized.
(3) Not annualized.
13
<PAGE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES FUND SERIES
Class A
------------------------------------------------------------------------------------------
Year ended October 31,
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.60 $8.88 $9.87 $9.91 $9.65 $9.08 $9.28
Income from
investment
operations
Net investment
income 0.52 0.55 0.64 0.62(1) 0.65(1) 0.68(1) 0.71(1)
Net realized and
unrealized gain
(loss) (0.15) 0.72 (1.02) 0.34 0.26 0.57 (0.20)
----- ----- ----- ----- ----- ----- -----
Total from
investment
operations 0.37 1.27 (0.38) 0.96 0.91 1.25 0.51
----- ----- ----- ----- ----- ----- -----
Less distributions
Dividends from net
investment income (0.50) (0.55) (0.45) (0.62) (0.65) (0.68) (0.71)
Dividends from net
realized gains -- -- (0.02) (0.38) -- -- --
Tax return of
capital -- -- (0.14) -- -- -- --
----- ----- ----- ----- ----- ----- -----
Total distributions (0.50) (0.55) (0.61) (1.00) (0.65) (0.68) (0.71)
----- ----- ----- ----- ----- ----- -----
Change in net asset
value (0.13) 0.72 (0.99) (0.04) 0.26 0.57 (0.20)
----- ----- ----- ----- ----- ----- -----
Net asset value, end
of period $9.47 $9.60 $8.88 $9.87 $9.91 $9.65 $9.08
===== ===== ===== ===== ===== ===== =====
Total return(2) 4.05% 14.81% -3.98% 10.18% 9.74% 14.24% 5.82%
Ratios/supplemental
data:
Net assets, end of
period (thousands) $208,552 $235,879 $262,157 $57,072 $40,365 $22,123 $11,957
Ratio to average net
assets of:
Operating expenses 1.03% 0.99% 0.98% 0.75% 0.77% 0.97% 1.00%
Net investment
income 5.55% 6.01% 5.92% 6.19% 6.64% 7.20% 7.77%
Portfolio turnover 379% 178% 101% 264% 285% 130% 265%
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES FUND SERIES
Class B
--------------------------------------
From Year ended From
Year ended October 31, Inception October 31, inception
------------------------- 3/9/87 to ------------------------- 2/24/94 to
1989 1988 10/31/87 1996 1995 10/31/94
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.25 $9.14 $10.00 $9.58 $8.86 $9.61
Income from
investment
operations
Net investment
income 0.72 0.73(1) 0.40(1) 0.44 0.48 0.39
Net realized and
unrealized gain
(loss) 0.03 0.22 (0.97) (0.14) 0.72 (0.75)
----- ----- ------ ----- ----- -----
Total from
investment
operations 0.75 0.95 (0.57) 0.30 1.20 (0.36)
----- ----- ------ ----- ----- -----
Less distributions
Dividends from net
investment income (0.72) (0.84) (0.29) (0.43) (0.48) (0.30)
Dividends from net
realized gains -- -- -- -- -- --
Tax return of
capital -- -- -- -- -- (0.09)
----- ----- ------ ----- ----- -----
Total distributions (0.72) (0.84) (0.29) (0.43) (0.48) (0.39)
----- ----- ------ ----- ----- -----
Change in net asset
value 0.03 0.11 (0.86) (0.13) 0.72 (0.75)
----- ----- ------ ----- ----- -----
Net asset value, end
of period $9.28 $9.25 $ 9.14 $9.45 $9.58 $8.86
===== ===== ====== ===== ===== =====
Total return(2) 8.56% 10.92% -5.34%(4) 3.39% 13.82% -3.83%(4)
Ratios/supplemental
data:
Net assets, end of
period (thousands) $10,747 $8,980 $5,215 $4,875 $3,655 $1,238
Ratio to average net
assets of:
Operating expenses 1.00% 1.00% 1.00% 1.78% 1.73% 2.00%(3)
Net investment
income 7.93% 7.93% 4.51% 4.79% 5.23% 4.49%(3)
Portfolio turnover 297% 160% 26% 379% 178% 101%
</TABLE>
(1) Includes reimbursement of operating expenses by Adviser of $0.03, $0.04,
$0.01, $0.01, $0.08 and $0.07, respectively.
(2) Maximum sales load is not reflected in the total return calculation.
(3) Annualized.
(4) Not annualized.
14
<PAGE>
PERFORMANCE INFORMATION
The Trust may, from time to time, include the yield and total return history
of any or all of the Series in advertisements, sales literature or reports to
current or prospective shareholders. Both yield and total return figures are
computed separately for Class A and Class B shares in accordance with
formulas specified by the Securities and Exchange Commission. Yield and total
return are based on historical earnings of each Series and is not an
indication of future performance. Performance information may be expressed as
yield and effective yield of the Money Market Series, as yield of any other
Series or Class thereof, and as total return of any Series or Class thereof.
Current yield for the Money Market Series will be based on the income earned
by the Series over a given 7-day period (less a hypothetical charge
reflecting deductions for expenses taken during the period) and then
annualized, i.e., the income earned in the period is assumed to be earned
every seven days over a 52-week period and is stated in terms of an annual
percentage return on the investment. Effective yield is calculated similarly
but reflects the compounding effect of earnings on reinvested dividends.
The yield of each Series will be computed by dividing the Series' net
investment income over a 30-day period by an average value of invested assets
(using the average number of shares entitled to receive dividends and the
maximum offering price per share at the end of the period), all in accordance
with applicable regulatory requirements. Such amount will be compounded for
six months and then annualized for a twelve-month period to derive the
Series' yield for each class.
Standardized quotations of average annual total return for Class A and Class
B Shares of each Series will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in either Class A or
Class B Shares of each Series over a period of 1, 5, and 10 years (or up to
the life of the class of shares). Standardized total return quotations
reflect the deduction of a proportional share of each Class's expenses of
each Series (on an annual basis), deduction of the maximum initial sales load
in the case of Class A Shares and the maximum contingent deferred sales
charge applicable to a complete redemption of the investment in the case of
Class B Shares, and assume that all dividends and distributions on Class A
and Class B Shares are reinvested when paid. It is expected that the
performance of Class A Shares will be better than that of Class B Shares as a
result of lower distribution fees and certain incrementally lower expenses
paid by Class A Shares. The Trust may also quote supplementally a rate of
total return over different periods of time by means of aggregate, average,
and year-by-year or other types of total return figures. In addition, the
Trust may from time to time, publish material citing historical volatility
for Shares of the Trust.
The Trust may from time to time include in advertisements containing total
return and the ranking of these performance figures relative to such figures
for groups of mutual funds having similar investment objectives as
categorized by ranking services such as Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Weisenberger Financial Services, Inc., and
Morningstar, Inc. Additionally, the Trust may compare a Series' performance
results to other investment or savings vehicles (such as certificates of
deposit) and may refer to results published in various publications such as
Changing Times, Forbes, Fortune, Money, Barrons, Business Week and Investor's
Daily, Stanger's Mutual Fund Monitor, The Stanger Register, Stanger's
Investment Adviser, The Wall Street Journal, The New York Times, Consumer
Reports, Registered Representative, Financial Planning, Financial Services
Weekly, Financial World, U.S. News and World Report, Standard and Poors The
Outlook and Personal Investor. The Trust may from time to time illustrate the
benefits of tax deferral by comparing taxable investments to investments made
through tax-deferred retirement plans. The total return may also be used to
compare the performance of a Series with certain widely acknowledged outside
standards or indices for stock and bond market performance, such as the
Standard & Poor's 500 Stock Index (the "S&P 500"), Dow Jones Industrial
Average, Europe Australia Far East Index (EAFE), Consumer's Price Index,
Lehman Brothers Corporate Index and Lehman Brothers T-Bond Index. The S&P
500 is a commonly quoted measure of stock market performance and represents
common stocks of companies of varying sizes segmented across 90 different
industries which are listed on the New York Stock Exchange, the American
Stock Exchange and traded over the NASDAQ National Market System.
Advertisements, sales literature and other communications may contain
information about the Trust or Adviser's current investment strategies and
management style. Current strategies and style may change to respond to a
changing market and economic conditions. From time to time, the Trust may
discuss specific portfolio holdings or industries in such communications. To
illustrate components of overall performance, the Trust may separate its
cumulative and average annual returns into income results and capital gains
or losses; or cite separately as a return figure the equity or bond portion
of a Series' portfolio; or compare a Series' equity or bond return figure to
well-know indices of market performance including but not limited to: the S&P
500 Index, Dow Jones Industrial Average, CS First Boston High Yield Index and
Solomon Brothers Corporate and Government Bond Indices.
Performance information for a Series reflects only the performance of a
hypothetical investment in Class A or Class B Shares of that Series during
the particular time period on which the calculations are based. Performance
information should be considered in light of a particular Series' investment
objectives and policies, characteristics and qualities of the Series, and the
market conditions during the given time period, and should not be considered
as a representation of what may be achieved in the future. For a description
of the methods used to determine total return for each Series, see the
Statement of Additional Information.
The Trust's Annual Report, available upon request and without charge,
contains a discussion of the performance of each Series and a comparison of
that performance to a securities market index.
15
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
Each Series has a different investment objective and is designed to meet
different investment needs. The differences in objectives and policies among
the seven Series can be expected to affect the investment return of each
Series and the degree of market and financial risk to which each Series is
subject. The investment objective of each Series is a fundamental policy
which may not be changed without the approval of a vote of a majority of the
outstanding shares of that Series. Since certain risks are inherent in the
ownership of any security, there can be no assurance that any Series will
achieve its investment objective. The investment policies of each Series will
also affect the rate of portfolio turnover. A high rate of portfolio turnover
generally involves correspondingly greater brokerage commissions, which are
paid directly by the Series. The rate for each Series, except the Money
Market Series (which does not normally pay brokerage commissions), is
included under "Financial Highlights."
Phoenix Balanced Fund Series
The Balanced Series seeks as its investment objectives reasonable income,
long-term capital growth and conservation of capital. The Balanced Series
intends to invest based on combined considerations of risk, income, capital
enhancement and protection of capital value.
The Balanced Series may invest in any type or class of security. The
Balanced Series will invest at least 65% of the value of its total assets in
common stocks and fixed income senior securities; however, it may also invest
in securities convertible into common stocks. At least 25% of the value of
its assets will be invested in fixed income senior securities which are rated
within the four highest rating categories by recognized rating agencies
(i.e., AAA to BBB by Standard & Poor's Corporation, Aaa to Baa by Moody's
Investors Services, Inc. (Moody's)). Fixed-income securities which are rated
in these categories are sometimes referred to as "investment grade"
securities. See "Appendix" for a discussion of ratings.
The Series may also engage in certain options transactions and enter into
financial futures contracts and related options for hedging purposes and may
invest in deferred or zero coupon debt obligations. See "Investment
Techniques and Related Risks."
In implementing the investment objectives of this Series, management will
select securities believed to have potential for the production of current
income, with emphasis on securities that also have potential for capital
enhancement. For temporary defensive purposes when the Adviser believes that
adverse market conditions warrant, the Balanced Series may actively pursue a
policy of retaining cash or investing part or all of its assets in cash
equivalents, such as government securities and high grade commercial paper.
Risk Factors. The Series may invest up to 35% of its net assets, determined
at the time of investment, in high yield, high risk, non-investment grade
fixed income securities (commonly referred to as "junk bonds"). Securities
rated Baa by Moody's or BBB by S&P may have some speculative characteristics
and changes in economic conditions or other circumstances may affect the
ability to make principal and interest payments on these types of bonds. A
fixed income securities issue may have its ratings reduced below the minimum
permitted for purchase by the Series. In that event, the Adviser will
determine whether the Series should continue to hold such issue in its
portfolio. If, in the Adviser's opinion, market conditions warrant, the
Series may increase its position in lower or non-rated securities from time
to time. The lower rated and non-rated convertible securities are
predominantly speculative with respect to the issuer's capacity to repay
principal and pay interest. Investment in lower rated and non-rated
convertible fixed-income securities normally involves a greater degree of
market and credit risk than does investment in securities having higher
ratings. The price of these fixed income securities will generally move in
inverse proportion to interest rates. In addition, non-rated securities are
often less marketable than rated securities. To the extent that the Series
holds any lower rated or non-rated securities, it may be negatively affected
by adverse economic developments, increased volatility and lack of liquidity.
Phoenix Convertible Fund Series
The Convertible Series seeks as its investment objectives income and the
potential for capital appreciation, which objectives are to be considered as
relatively equal.
Under normal circumstances, this Series intends to invest at least 65% of
the value of its total assets in debt securities and preferred stocks which
are convertible into, or carry the right to purchase, common stock or other
equity securities ("Convertible Securities"). Convertible securities have
several unique investment characteristics such as (1) higher yields than
common stocks, but lower yields than comparable nonconvertible fixed income
securities, (2) a lesser degree of fluctuation in value than the underlying
stocks since they have fixed income characteristics, and (3) the potential
for capital appreciation if the market price of the underlying common stock
increases. A convertible security might be subject to redemption at the
option of the issuer at a price established in the convertible security's
governing instrument. If a convertible security held by the Trust is called
for redemption, the Trust might be required to permit the issuer to redeem
the security, convert it into the underlying common stock or sell it to a
third party.
If at any time the market value of the Convertible Series' investments in
common stocks, warrants and non-convertible securities exceeds 35% of the
market value of its total assets (exclusive of cash and government
securities), it will (except when a temporary defensive position is deemed
advisable) thereafter invest only in Convertible Securities until the 65%
standard is equaled or exceeded. The 65% standard may not be maintained at
all times because securities received upon conversion or exercise of warrants
and securities remaining upon the break-up of units or detachment of warrants
may be retained to permit orderly disposition or to establish long-term
holding periods for tax purposes. The Convertible Series may
16
<PAGE>
also invest up to 100% of the Series' total net assets in non-rated and
non-investment grade convertible securities.
The Convertible Series will invest its assets, without limit, in high-grade
senior securities or government securities or retain cash or cash equivalents
when a temporary defensive position is deemed advisable by the Adviser. In
seeking to achieve its objectives, the Adviser may utilize the Convertible
Series' ability to expand its investments through the permitted use of bank
borrowings (see "Leverage"). The Convertible Series may also engage in
certain options transactions and enter into financial futures contracts and
related options for hedging purposes and may invest in deferred or zero
coupon debt obligations. See "Investment Techniques and Related Risks."
Diversification is an important consideration in selecting the Convertible
Series' portfolio. However, more emphasis will be placed upon careful
selection of securities believed to have good potential for income and
appreciation than upon wide diversification.
Risk Factors. The convertible securities acquired by this Series are not
subject to any limitations as to ratings and may include high, medium, lower
and non-rated securities. Historically, the Convertible Series has emphasized
investments in investment grade convertible securities which are rated within
the four highest categories by recognized rating agencies, i.e., S&P and
Moody's. (See the Appendix for a discussion of the S&P and Moody's ratings.)
The Convertible Series may invest up to 100% of the Series' total net assets
in non-rated and non-investment grade convertible securities. Lower rated and
some non-rated convertible securities are predominantly speculative with
respect to the issuer's capacity to repay principal and pay interest.
Investment in lower rated and non-rated convertible fixed-income securities
normally involves a greater degree of investment and credit risk than does
investment in convertible securities having higher ratings. In addition, the
market for non-rated convertible securities is usually less broad than the
market for rated securities, which could affect their marketability. To the
extent that the Convertible Series holds any lower rated or non-rated
securities, it may be negatively affected by adverse economic developments,
increased volatility or lack of liquidity.
Phoenix Growth Fund Series
The Growth Series' investment objective is to seek long-term appreciation
of capital. Since income is not an objective, any income generated by the
investment of the Growth Series' assets will be incidental to its objective.
Under normal circumstances, the Growth Series will invest at least 65% of
the value of its total assets in the common stock of companies believed by
the Adviser to have appreciation potential. However, since no one class or
type of security at all times necessarily affords the greatest promise for
capital appreciation, the Growth Series may invest any amount or proportion
of its assets in any class or type of security believed by the Adviser to
offer potential for capital appreciation over both the intermediate and long
term. Normally, of course, its investment will consist largely of common
stocks selected for the promise they offer of appreciation of capital.
However, the Growth Series may also invest in preferred stocks, investment
grade bonds (Moody's rating Baa or higher), convertible preferred stocks and
convertible debentures if, in the judgment of the Adviser, the investment
would further its investment objective. The Growth Series may also engage in
certain options transactions and enter into financial futures contracts and
related options for hedging purposes. See "Investment Techniques and Related
Risks." Each security held will be monitored to determine whether it is
contributing to the basic objective of long-term appreciation of capital.
The Adviser believes that a portfolio of such securities provides the most
effective way to obtain capital appreciation, but when, for temporary
defensive purposes (as when market conditions for growth stocks are adverse),
other types of investments appear advantageous on the basis of combined
considerations of risk and the protection of capital values, investments may
be made in fixed income securities with or without warrants or conversion
features. In addition, for such temporary defensive purposes, the Growth
Series may pursue a policy of retaining cash or investing part or all of its
assets in cash equivalents.
Diversification is an important consideration in selecting the Growth
Series' portfolio. However, greater emphasis will be placed upon careful
selection of securities believed to have good potential for appreciation than
upon wide diversification.
To the extent that the Series holds bonds, it may be negatively affected by
adverse interest rate movements and credit quality. Generally, when interest
rates rise it may be expected that the value of bonds may decrease.
Phoenix Aggressive Growth Fund Series
Appreciation of capital through the use of aggressive investment techniques
is this Series' investment objective, and income will not generally be
considered in the selection of investments. In seeking to achieve this
objective, management may utilize the Series' ability to expand its
investments through the permitted use of bank borrowings (see "Leverage").
Under normal circumstances, the Aggressive Growth Series will invest at
least 65% of the value of its total assets in common and preferred stocks and
securities convertible into common stocks or other equity securities. Up to
10% of the Series' total net assets may be invested in foreign securities.
The Aggressive Growth Series may also invest in debt securities which, in
the judgment of the Adviser, offer opportunities for capital growth. However,
when a temporary defensive position is deemed advisable, the Series may,
without limit, invest in high-grade senior securities or U.S. Government
securities or retain cash or cash equivalents. The Series may also engage in
certain options transactions and enter into financial futures contracts and
related options for hedging purposes. See "Investment Techniques and Related
Risks."
17
<PAGE>
Since investments normally will consist primarily of securities believed by
the Adviser to have a substantial potential for capital growth, the assets of
the Aggressive Growth Series may be considered to be subject to greater risks
than those involved if the Series invested in securities that did not have
these growth characteristics. The Series is intended for investors who have
the financial ability and the investment experience to regard their shares as
a long-term investment involving risks commensurate with the possibility of
achieving substantial capital gains.
Phoenix High Yield Fund Series
The High Yield Series' primary objective is to seek high current income.
Under normal conditions, at least 80% of the value of the total assets of the
High Yield Series will be invested, consistent with its primary investment
objective, in fixed income securities including preferred stocks, convertible
securities, debt obligations, certificates of deposit, commercial paper,
bankers' acceptances, government obligations issued or guaranteed by federal,
state or municipal governments or their agencies or instrumentalities and
loan participations in secured and unsecured corporate loans. Capital growth
is a secondary objective which will also be considered when consistent with
the objective of high current income. The risks of investing in high yield
(high risk) fixed income securities are outlined below.
Higher yields are available ordinarily from securities in the lower rating
categories of recognized rating agencies (Baa or lower by Moody's or BBB or
lower by S&P, D&P, or Fitch) and from unrated securities of comparable
quality. The High Yield Series will not invest in securities in the lowest
rating categories (C for Moody's and D for S&P, D&P, or Fitch) unless
management believes that the financial condition of the issuer, or the
protections afforded to the particular securities, is stronger than would
otherwise be indicated by such low ratings. However, when the investment
objective of this Series can be met by investing in securities in higher
rating categories, such investments may be made. This Series may retain
securities when their ratings have changed.
The High Yield Series may also invest in non-publicly offered or
"restricted" debt securities, which the Adviser deems to be "liquid" pursuant
to standards approved by the Trust's Board of Trustees. The High Yield
Series' remaining assets may be invested in equity securities when such
investments are consistent with its primary investment objective or are
acquired as part of a unit consisting of a combination of fixed income
securities and equity securities. The High Yield Series may also engage in
certain options transactions and enter into financial futures contracts and
related options for hedging purposes and may invest in deferred or zero
coupon debt obligations. See "Investment Techniques and Related Risks."
When a more conservative investment strategy is necessary for temporary
defensive purposes, the High Yield Series may retain cash or invest part or
all of its assets in cash equivalents or in other fixed income securities
deemed by management to be consistent with a temporary defensive posture.
Risk Factors. While the High Yield Series' management will seek to minimize
risk through diversification and continual evaluation of current developments
in interest rates and economic conditions, the market prices of lower rated
securities generally fluctuate in response to changes in interest rates and
economic conditions more than those of higher rated securities. Using credit
ratings helps to evaluate the safety of principal and interest payments but
does not assess market risk. Fluctuations in the market value of portfolio
securities subsequent to acquisition by the High Yield Series will not
normally affect cash income from such securities but will be reflected in the
Series' net asset value. Additionally, with lower rated securities, there is
a greater possibility that an adverse change in the financial condition of
the issuer, particularly a highly leveraged issuer, may affect its ability to
make payments of income and principal and increase the expenses of the Series
seeking recovery from the issuer. Also, because the High Yield Series intends
to invest primarily in securities in the lower rating categories, the
achievement of its goals will be more dependent on the Adviser's ability than
would be the case if the High Yield Series were investing in securities in
the higher rating categories. Lower-rated securities may be thinly traded and
less liquid than higher rated securities and therefore harder to value and
more susceptible to adverse publicity concerning the issuer. Liquid
restricted securities are typically less marketable than publicly offered
debt securities.
Phoenix Money Market Fund Series
The investment objective of the Money Market Series is to seek as high a
level of current income as is consistent with the preservation of capital and
maintenance of liquidity by investing in a diversified portfolio of high
quality money market instruments maturing in 397 days or less.
The Money Market Series seeks to achieve this objective by investing
exclusively in the following instruments:
(a) obligations issued or guaranteed by the United States Government or its
agencies, authorities or instrumentalities;
(b) obligations issued by banks and savings and loan associations (such as
bankers' acceptances, certificates of deposit and time deposits, including
dollar-denominated obligations of foreign branches of U.S. banks and U.S.
branches of foreign banks) and dollar-denominated obligations unconditionally
guaranteed as to payment by banks or savings and loan associations, which at
the date of investment have capital surplus, and undivided profits in excess
of $100,000,000 as of the date of their most recently published financial
statements which obligations have been determined by the Board, or the
Adviser acting at its direction, to present minimal credit risk; and
obligations of other banks or savings and loan associations if such
obligations are insured by the Federal Deposit Insurance Corporation or the
Federal Savings and Loan Insurance Corporation;
(c) commercial paper which at the date of investment is rated A-1 by S&P
and/or P-1 by Moody's Investors Service, Inc., or, if not rated, is issued or
guaranteed by companies
18
<PAGE>
which at the date of investment have an outstanding debt issue rated AA or
higher by S&P or Aa or higher by Moody's;
(d) other corporate obligations maturing in one year or less which at the
date of investment are rated AA or higher by S&P or Aa or higher by Moody's;
and
(e) repurchase agreements with recognized securities dealers and banks with
respect to any of the foregoing obligations.
Generally, investments will be limited to securities rated in the two
highest short-term rating categories by at least two nationally recognized
statistical rating organizations, or by one such organization if only one has
rated the security, and comparable unrated securities. In addition, no more
than 5% of the Money Market Series' total assets will be invested in
securities of any one issuer or in securities not rated in the highest
short-term rating category. Moreover, no more than the greater of 1% of the
Money Market Series' total assets or $1 million will be invested in the
securities of any one issuer that are not in the highest short-term rating
category. Finally, in no event will investments in illiquid securities, time
deposits and/ or repurchase agreements maturing in more than seven days
exceed 10% of the Money Market Series' net assets taken at market value.
Obligations of foreign branches of U.S. banks are subject to somewhat
different risks than those of domestic banks. These risks include foreign
economic and political developments, foreign governmental restrictions which
may adversely affect payment of principal and interest on the obligations,
foreign withholding and other taxes on interest income, and difficulties in
obtaining and enforcing a judgment against a foreign branch of a domestic
bank. In addition, different risks may result from the fact that foreign
branches of U.S. banks and U.S. branches of foreign banks are not necessarily
subject to the regulatory requirements that apply to domestic banks.
Obligations of such branches will be purchased only when the Adviser believes
the risks are minimal.
The Money Market Series may not necessarily invest in money market
instruments paying the highest available yield at a particular time as a
result of considerations of liquidity and preservation of capital. Rather,
consistent with its investment objective, it will attempt to maximize yields
by engaging in portfolio trading and buying and selling portfolio investments
in anticipation of or in response to changing economic and money market
conditions and trends. These policies, as well as the relatively short
maturities of obligations to be purchased by the Money Market Series, may
result in frequent changes in its portfolio.
The value of the securities in the Money Market Series' portfolio can be
expected to vary inversely to the changes in prevailing interest rates. Thus,
if interest rates increase after a security was purchased, that security, if
sold, might be sold at less than cost. Conversely, if interest rates decline
after purchase, the security, if sold, might be sold at a profit. In either
instance, if the security were held to maturity, no gain or loss would
normally be realized as a result of these fluctuations. Substantial
redemptions of Money Market Series shares could require the sale of portfolio
investments at a time when a sale might not be desirable.
The average maturity of the Money Market Series' portfolio securities based
on their dollar value will not exceed 90 days.
Phoenix U.S. Government Securities Fund Series
The U.S. Government Securities Series seeks as its investment objective a
high level of current income consistent with safety of principal. This Series
intends to invest at least 65% of the value of its total assets in securities
which are issued or guaranteed by the U.S. Government or its agencies and
instrumentalities and backed by the full faith and credit of the United
States ("U.S. Government Securities"), those which are supported by the
ability to borrow from the U.S. Treasury or by the credit of an agency or
instrumentality and those otherwise supported by the U.S. Government. This
Series is authorized to invest up to 20% of the value of its net assets in
short-term instruments including bank certificates of deposit and time
deposits, bankers' acceptances and repurchase agreements. These instruments
are used for the investment of the Series' temporary cash balances.
U.S. Government Securities include (i) U.S. Treasury obligations which
differ only in their interest rates, maturities and times of issuance as
follows: U.S. Treasury bills (maturities of one year or less), U.S. Treasury
notes (maturities of one to ten years) and U.S. Treasury bonds (generally
maturities of greater than ten years); and (ii) obligations issued or
guaranteed by U.S. Government agencies and instrumentalities that are backed
by the full faith and credit of the United States; such as securities issued
by the Federal Housing Administration, the Government National Mortgage
Association ("GNMA"), the Department of Housing and Urban Development, the
Export-Import Bank, the General Services Administration and the Maritime
Administration and certain securities issued by the Farmers Home
Administration and the Small Business Administration.
Securities issued by the GNMA ("GNMA Certificates") differ in certain
respects from other U.S. Government securities, which normally provide for
periodic payment of interest in fixed amounts with principal payments at
maturity or specified call dates. GNMA Certificates are mortgage-backed
securities representing part ownership of a pool of mortgage loans. These
loans, issued by lenders such as mortgage bankers, commercial banks and
savings and loan associations, are either insured by the Federal Housing
Administration or guaranteed by the Veterans Administration. A "pool" or
group of such mortgages is assembled and, after being approved by GNMA, is
offered to investors through securities dealers. Once approved by GNMA, the
timely payment of interest and principal on each mortgage is guaranteed by
the full faith and credit of the United States. GNMA Certificates also differ
from other U.S. Government securities in that principal is paid back monthly
by the borrower over the term of the loan rather than returned in a lump sum
at maturity. GNMA Certificates are called "pass-
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through" securities because both interest and principal payments (including
prepayments) are passed through to the holder of the GNMA Certificate.
The U.S. Government Securities Series may invest in debt or mortgage-backed
securities issued by the Federal National Mortgage Association ("FNMA") and
by the Federal Home Loan Mortgage Corporation ("FHLMC"). FNMA is a federally
chartered, privately-owned corporation that issues mortgage pass-through
securities which are guaranteed as to payment of principal and interest by
FNMA. FHLMC is a corporate instrumentality of the United States and issues
participation certificates which represent an interest in mortgages from
FHLMC's portfolio. FHLMC guarantees the timely payment of interest and the
collection of principal. Securities guaranteed by FNMA and FHLMC are not
backed by the full faith and credit of the U.S. Government.
The U.S. Government Securities Series may also invest in collateralized
mortgage obligations ("CMOs") issued by U.S. Government agencies. These are
debt obligations collateralized by whole mortgage loans or by portfolios of
mortgage pass-through securities guaranteed by GNMA, FHLMC or FNMA. The U.S.
Government Securities Series may also invest in ownership interests in pools
of mortgage assets such as FNMA Guaranteed REMIC (real estate mortgage
investment conduits) Pass-through Certificates and FHLMC Multi-Class Mortgage
Participation Certificates. Mortgage pass-through and other mortgage-related
securities are subject to prepayment risk which may adversely affect yields.
Generally, prepayments will increase during a period of falling interest
rates.
Although the payment of interest and principal on a portfolio security may
be guaranteed by the U.S. Government or one of its agencies or
instrumentalities, the net asset value of shares of the U.S. Government
Securities Series will fluctuate in response to interest rate levels. In
general, when interest rates rise, prices of fixed income securities decline.
When interest rates decline, prices of fixed income securities rise.
Descriptions of the short-term money market instruments the U.S. Government
Securities Series may invest in are contained in the section "Phoenix Money
Market Fund Series." The quality ratings and maturity restrictions described
in that section also apply to the short-term investments of the U.S.
Government Securities Series.
INVESTMENT TECHNIQUES AND RELATED RISKS
In addition to the investment policies described above, the Trust may
utilize the following investment practices or techniques.
Repurchase Agreements
Each Series may invest in repurchase agreements. A repurchase agreement is a
transaction where a Series buys a security and the seller simultaneously
agrees to buy that same security back at a fixed price and agreed-upon date.
The Adviser reviews the creditworthiness of the other party to the agreement
and must find it satisfactory before engaging in a repurchase agreement.
Even though repurchase transactions usually do not impose market risks on
the purchasing Series, if the seller of the repurchase agreement defaults and
does not repurchase the underlying securities, the Series might incur a loss
if the value of the underlying securities declines, and disposition costs may
be incurred in connection with liquidating the underlying securities. In
addition, if bankruptcy proceedings are commenced regarding the seller,
realization upon the underlying securities may be delayed or limited, and a
loss may be incurred if the underlying securities decline in value. For more
information about repurchase agreements, see the Statement of Additional
Information.
Zero Coupon Bonds
The Balanced, Convertible and High Yield Series may invest in debt
obligations that do not make any interest payments for a specified period of
time prior to maturity or until maturity ("deferred coupon" or "zero coupon"
obligations). Even though interest is not actually paid on these instruments,
for tax purposes the Series that owns them is imputed with ordinary income.
This imputed income is paid out to shareholders as dividends. These
distributions must be made from the Series' cash assets or, if necessary,
from the proceeds of sales of portfolio securities. The Series will not be
able to purchase additional income producing securities with the cash used to
make such distributions and its current income ultimately may be reduced as a
result. The value of zero coupon obligations fluctuates more in response to
interest rate changes than does the value of debt obligations that make
current interest payments. See the Statement of Additional Information.
Securities and Index Options
All Series, except the Money Market Series and the U.S. Government
Securities Series, may write covered call options and purchase call and put
options. These instruments are referred to as "derivatives" as their value is
derived from the value of any underlying security or securities index.
Securities and index options and the related risks are summarized below and
are described in more detail in the Statement of Additional Information.
Writing (Selling) Call Options. The Balanced Series, Convertible Series,
Growth Series, High Yield Series and the Aggressive Growth Series may write
exchange-traded covered call options. A call option on a security gives the
purchaser of the option, in return for the premium paid to the writer
(seller), the right to buy the underlying security at the exercise price at
any time during the option period. Upon exercise by the purchaser, the writer
of a call option has the obligation to sell the underlying security at the
exercise price. A call option on a securities index is similar to a call
option on an individual security, except that the value of the option depends
on the weighted value of the group of securities comprising the index and all
settlements are made in cash. A call option may be
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terminated by the writer (seller) by entering into a closing purchase
transaction in which it purchases an option of the same series as the option
previously written. A call option is "covered" if a Series owns the
underlying security or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration held in a segregated account by its custodian) upon conversion
or exchange of other securities held in its portfolio. A call option written
by a Series is also covered if the Series holds on a share-for-share basis a
covering call on the same security as the call written where (i) the exercise
price of the covering call held is equal to or less than the exercise price
of the call written or greater than the exercise price of the call written if
the difference is maintained by any asset, including equity securities and
non-investment grade debt so long as the asset is liquid, unencumbered and
marked to market daily in a segregated account with its custodian, and (ii)
the covering call expires at the same time or after the call written.
The Trustees have limited the value of the total assets of a Series which
may be subject to call options to 50% of a Series' total assets. Management
presently intends to cease writing options if, and as long as, 25% of such
total assets are subject to outstanding options contracts, or if required
under regulations of state securities administrators. Call options on
securities indices will be written only to hedge in an economically
appropriate way portfolio securities which are not otherwise hedged with
options or financial futures contracts and will be "covered" by identifying
the specific portfolio securities being hedged.
A Series will write call options in order to obtain a return on its
investments from the premiums received and will retain the premiums whether
or not the options are exercised. Any decline in the market value of
portfolio securities will be offset to the extent of the premiums received
(net of transaction costs). If an option is exercised, the premium received
on the option will effectively increase the exercise price.
During the option period the writer of a call option has given up the
opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but has retained the risk
of loss should the price of the underlying security decline. Writing call
options also involves risks relating to the Series' ability to close out
options it has written.
Purchasing Call and Put Options. A call option is described above. A put
option on a security gives the purchaser of the option, in return for the
premium paid to the writer (seller), the right to sell the underlying
security at the exercise price at any time during the option period. Upon
exercise by the purchaser, the writer of a put option has the obligation to
purchase the underlying security at the exercise price. A put option on a
securities index is similar to a put option on an individual security, except
that the value of the option depends on the weighted value of the group of
securities comprising the index and all settlements are made in cash.
The Balanced Series, Convertible Series, Growth Series, High Yield Series
and the Aggressive Growth Series may invest up to 2% of its total assets in
exchange-traded call and put options on securities and securities indices for
the purpose of hedging against changes in the market value of its portfolio
securities. A Series will invest in call and put options whenever, in the
opinion of its Adviser, a hedging transaction is consistent with the
investment objectives of a Series. A Series may sell a call option or a put
option which it has previously purchased prior to the purchase (in the case
of a call) or the sale (in the case of a put) of the underlying security. Any
such sale would result in a net gain or loss depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid on the call or put which is sold.
Purchasing a call or a put option involves the risk that a Series may lose
the premium it paid plus transaction costs.
Warrants and Stock Rights
Warrants and stock rights are almost identical to call options in their
nature, use and effect except that they are issued by the issuer of the
underlying security rather than an option writer. A Series may invest up to
5% of its net assets in warrants or stock rights valued at the lower of cost
or market, but no more than 2% of its net assets may be invested in warrants
or stock rights not listed on the New York Stock Exchange or American Stock
Exchange.
Financial Futures and Related Options
All Series, except the Money Market Series and the U.S. Government
Securities Series, may enter into financial futures contracts and related
options. Financial futures contracts and related options and associated risks
are summarized below and are described in more detail in the Statement of
Additional Information.
Financial futures contracts consist of interest rate futures contracts and
securities index futures contracts. An interest rate futures contract
obligates the seller of the contract to deliver, and the purchaser to take
delivery of, the interest rate securities called for in the contract at a
specified future time and at a specified price. A stock index assigns
relative values to the common stocks included in the index, and the index
fluctuates with changes in the market values of the common stocks so
included. A stock index futures contract is a bilateral agreement pursuant to
which two parties agree to take or make delivery of an amount of cash equal
to a specified dollar amount times the difference between the stock index
value at the close of the last trading day of the contract and the price at
which the futures contract is originally struck. An option on a financial
futures contract gives the purchaser the right to assume a position in the
contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period
of the option.
A Series may purchase and sell financial futures contracts which are traded
on a recognized exchange or board of trade and may purchase exchange or
board-traded put and call
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options on financial futures contracts as a hedge against anticipated changes
in the market value of its portfolio securities or securities which it
intends to purchase. Hedging is the initiation of a position in the futures
market which is intended as a temporary substitute for the purchase or sale
of the underlying securities in the cash market.
A Series will engage in transactions in financial futures contracts and
related options only for hedging purposes and not for speculation. In
addition, a Series will not purchase or sell any financial futures contract
or related option if, immediately thereafter, the sum of the cash or U.S.
Treasury bills initially committed with respect to a Series' existing futures
and related options positions and the premiums paid for related options would
exceed 2% of the market value of the Series' total assets. At the time of
purchase of a futures contract or a call option on a futures contract, any
asset, including equity securities and non-investment grade debt so long as
the asset is liquid, unencumbered and marked to market daily, equal to the
market value of the futures contract minus the Series' initial margin deposit
with respect thereto will be deposited in a segregated account with the
Series' custodian bank to collateralize fully the position and thereby ensure
that it is not leveraged. The extent to which a Series may enter into
financial futures contracts and related options may also be limited by
requirements of the Internal Revenue Code for qualification as a regulated
investment company.
Engaging in transactions in financial futures contracts involves certain
risks, such as the possibility of an imperfect correlation between futures
market prices and cash market prices and the possibility that the Adviser
could be incorrect in its expectations as to the direction or extent of
various interest rate movements, in which case the Series' return might have
been greater had hedging not taken place. There is also the risk that a
liquid secondary market may not exist and the loss from investing in futures
contracts is potentially unlimited because the Series may be unable to close
its position. The risk in purchasing an option on a financial futures
contract is that a Series will lose the premium it paid. Also, there may be
circumstances when the purchase of an option on a financial futures contract
would result in a loss to a Series while the purchase or sale of the contract
would not have resulted in a loss. Futures and options may fail as hedging
techniques in cases where the price movements of the securities underlying
the options and futures do not follow the price movements of the portfolio
securities subject to the hedge. Losses relating to futures and options are
potentially unlimited.
Foreign Securities
Each of the Series, except the Money Market Series and the U.S. Government
Securities Series, may purchase foreign securities, including emerging market
securities and those issued by foreign branches of U.S. banks. Such
investment in foreign securities will be limited to 25% of the total net
asset value of the Balanced Series, Convertible Series and Growth Series. The
High Yield Series may invest up to 35% of its total net asset value in
foreign securities and the Aggressive Growth Series may invest up to 10% of
its total net asset value in foreign securities. The Trust may invest in a
broad range of foreign securities including equity, debt and convertible
securities and foreign government securities. In connection with investments
in foreign securities, the Trust may enter into forward foreign currency
exchange contracts for the purpose of protecting against losses resulting
from fluctuations in exchange rates between the U.S. dollar and a particular
foreign currency denominating a security which the Trust holds or intends to
acquire. The Trust will not speculate in forward foreign currency exchange
contracts.
Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies.
These include differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio
transactions, the possibility of expropriation or confiscatory taxation,
adverse changes in investment or exchange control regulations, political
instability which could affect U.S. investments in foreign countries,
difficulty in invoking legal process abroad and potential restrictions on the
flow of international capital. Additionally, dividends payable on foreign
securities may be subject to foreign taxes withheld prior to distribution.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Changes in
foreign exchange rates will affect the value of those securities which are
denominated or quoted in currencies other than the U.S. dollar. Many of the
foreign securities held by the Trust will not be registered with the
Securities and Exchange Commission and many of the issuers of foreign
securities will not be subject to the Commission's reporting requirements.
Accordingly, there may be less publicly available information about the
securities and about the foreign company or government issuing them than is
available about a domestic company or government entity. Moreover, individual
foreign economies may compare favorably or unfavorably with the United States
economy with respect to such factors as rate of growth, rate of inflation,
capital reinvestment, resource self-sufficiency and balance of payment
positions, and economic trends in foreign countries may be difficult to
assess.
Particular risks are posed by investments in third world countries or
so-called "emerging markets." These securities may be especially volatile
based on relative economic, political and market conditions present in these
countries. The economies of developing countries generally are heavily
dependent upon international trade and, accordingly, have been and may
continue to be adversely affected by trade barriers, exchange controls,
managed adjustments in relative currency values and other protectionist
measures imposed or negotiated by the countries with which they trade. These
economies also have been and may continue to be adversely affected by
economic conditions in the countries with which they trade. Certain emerging
market countries are either comparatively undeveloped or are in the process
of becoming developed and may consequently be economically based on a
relatively few or closely interdependent industries. A high proportion of the
shares of many emerging market issuers may
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also be held by a limited number of large investors trading significant
blocks of securities. While the Trust will strive to be sensitive to
publicized reversals of economic conditions, political unrest and adverse
changes in trading status, unanticipated political and social developments
may affect the values of a Series' investments in such countries and the
availability of additional investments in such countries.
The Trust may use a foreign custodian in connection with its purchases of
foreign securities and may maintain cash and cash equivalents in the care of
a foreign custodian. The amount of cash or cash equivalents maintained in the
care of eligible foreign custodians will be limited to an amount reasonably
necessary to effect the Trust's foreign securities transactions. The use of a
foreign custodian invokes considerations which are not ordinarily associated
with domestic custodians. These considerations include the possibility of
expropriation, restricted access to books and records of the foreign
custodian, inability to recover assets that are lost while under the control
of the foreign custodian, and the impact of political, social or diplomatic
developments.
The Trust will calculate its net asset value and complete orders to
purchase, exchange or redeem shares only on a Monday-Friday basis (excluding
holidays on which the New York Stock Exchange is closed). Foreign securities
in which the Trust may invest may be primarily listed on foreign stock
exchanges which may trade on other days (such as Saturdays). As a result, the
net asset value of the Trust's portfolio may be affected by such trading on
days when a shareholder has no access to the Trust.
Leverage
The Trust may from time to time increase the Convertible Series' or the
Aggressive Growth Series' ownership of securities holdings above the amounts
otherwise possible by borrowing from banks at fixed amounts of interest and
investing the borrowed funds. The Trust will borrow only from banks, and only
if immediately after such borrowing the value of the assets of a Series
(including the amount borrowed) less its liabilities (not including any
borrowings) is at least three times the amount of funds borrowed for
investment purposes. The effect of this provision is to permit the Trust to
borrow up to 25% of the total assets of a Series, including the proceeds of
any such borrowings. However, the amount of the borrowings will be dependent
upon the availability and cost of credit from time to time. If, due to market
fluctuations or other reasons, the value of such Series' assets computed as
provided above becomes less than three times the amount of the borrowings for
investment purposes, the Trust, within three business days, is required to
reduce bank debt to the extent necessary to meet the required 300% asset
coverage.
Interest on money borrowed will be an expense of the Series with respect to
which the borrowing has been made. Because such expense would not otherwise
be incurred, the net investment income of such Series is not expected to be
as high as it otherwise would be during periods when borrowings for
investment purposes are substantial.
Bank borrowings for investment purposes must be obtained on an unsecured
basis. Any such borrowing must also be made subject to an agreement by the
lender that any recourse is limited to the assets of the Series with respect
to which the borrowing has been made.
Any investment gains made with the additional monies borrowed in excess of
interest paid will cause the net asset value of a Series' shares to rise
faster than would otherwise be the case. On the other hand, if the investment
performance of the additional securities purchased fails to cover their cost
(including any interest paid on the monies borrowed) to the Series, the net
asset value of the Series will decrease faster than would otherwise be the
case.
INVESTMENT RESTRICTIONS
The Trust may not invest more than 25% of the assets of any one Series in
any one industry, except the Money Market Series may invest more than 25% of
its assets in the domestic banking industry and the U.S. Government
Securities Series will invest at least 80% of its net assets in securities
backed or supported by the U.S. Government. If the Trust loans the portfolio
securities of any Series, the market value of the securities loaned may not
exceed 25% of the market value of the total assets of such Series. The Trust
may borrow money for any Series only for temporary administrative purposes,
provided that any such borrowing does not exceed 10% of the market value of
the total assets of the Series. The Trust may also borrow for investment
purposes as described under "Leverage" above. In order to secure any such
borrowing, the Trust may pledge, mortgage or hypothecate up to 10% of the
market value of the assets of such Series. With the exception of the
Convertible Series and the Aggressive Growth Series, no Series may invest in
portfolio securities while the amount of borrowing of the Series exceeds 5%
of the total assets of such Series.
In addition to the investment restrictions described above, each Series'
investment program is subject to further restrictions which are described in
the Statement of Additional Information. The restrictions for each Series
described above are fundamental and may not be changed without shareholder
approval.
MANAGEMENT OF THE FUND
The Trust is a mutual fund known as an open-end, diversified investment
company. The Trustees of the Trust ("Trustees") are responsible for the
overall supervision of the Trust and perform the various duties imposed on
Trustees by the 1940 Act and the laws of the Commonwealth of Massachusetts.
The Adviser
The Trust's investment adviser is Phoenix Investment Counsel, Inc. (the
"Adviser"), which is located at 56 Prospect Street, Hartford, Connecticut
06115-0480. All of the outstanding stock of the Adviser is owned by Phoenix
Equity Planning Corporation ("Equity Planning"), a subsidiary of Phoenix Duff
& Phelps Corporation of Chicago, Illinois. Prior to November 1, 1995, the
Adviser and Equity Planning were
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indirect wholly-owned subsidiaries of Phoenix Home Life Mutual Insurance
Company ("Phoenix Home Life") of Hartford, Connecticut. Phoenix Home Life is
a majority shareholder of Phoenix Duff & Phelps Corporation. Phoenix Home
Life is in the business of writing ordinary and group life and health
insurance and annuities. Its principal offices are located at One American
Row, Hartford, Connecticut 06115. Phoenix Duff and Phelps Corporation is a
New York Stock Exchange traded company that provides various financial
advisory services to institutional investors, corporations and individuals
through operating subsidiaries. The Adviser also acts as the investment
adviser to other entities including Phoenix Multi-Portfolio Fund (all
portfolios other than the Real Estate Securities Portfolio), Phoenix
Strategic Allocation Fund, Inc., Phoenix Strategic Equity Series Fund
(Strategic Theme Fund and Small Cap Fund) and The Phoenix Edge Series Fund
(all Series other than the Real Estate Securities Series and Aberdeen New
Asia Series) and as subadviser to the Chubb America Fund, Inc., SunAmerica
Series Trust, and JNL Trust, among other investment advisory clients. As of
December 31, 1996, PIC had approximately $18.24 billion in assets under
management. The Adviser was originally organized in 1932 as John P. Chase,
Inc.
The shareholders of each Series approved the Investment Advisory Agreement
at a shareholder meeting held on November 22, 1993. The Investment Advisory
Agreement provides that for its services to all Series of the Trust the
Adviser is entitled to a fee, payable monthly, at the following annual rates:
SERIES 1st $1 Billion $1-2 Billion $2+ Billion
Growth Fund Series .70% .65% .60%
Aggressive Growth Fund
Series .70% .65% .60%
Convertible Fund Series .65% .60% .55%
High Yield Fund Series .65% .60% .55%
Balanced Fund Series .55% .50% .45%
U.S. Government
Securities Fund Series .45% .40% .35%
Money Market Fund Series .40% .35% .30%
For its services to all Series of the Trust during the fiscal year ended
October 31, 1996, the Adviser received a fee of $35,372,083. The Adviser has
agreed to assume expenses and reduce the advisory fee for the benefit of the
Money Market Series to the extent that operating expenses of that Series
exceed 0.85% for Class A Shares and 1.60% for Class B Shares of the average
daily net asset value of the Series.
The Portfolio Managers
Balanced Series
Mr. C. Edwin Riley, Jr. serves as Portfolio Manager of the Balanced Series
and as such is primarily responsible for the day-to-day management of the
Series' portfolio. Mr. Riley is also Portfolio Manager of the Balanced Series
of The Phoenix Edge Series Fund and Vice President. Mr. Riley is a Managing
Director, Equities, of Phoenix Investment Counsel, Inc. and National
Securities & Research Corporation. From 1988 to 1995, Mr. Riley also served
as Senior Vice President and Director of Equity Management for Nationsbank
Investment Management.
Convertible Series
Mr. John H. Hamlin has served as Portfolio Manager of the Convertible Series
since 1992 and as such, Mr. Hamlin is primarily responsible for the
day-to-day management of the Series' portfolio. Mr. Hamlin is also Portfolio
Manager of Phoenix Income and Growth Fund and Vice President. Mr. Hamlin is a
Portfolio Manager, Equities, of Phoenix Investment Counsel, Inc. and National
Securities & Research Corporation.
Growth Series
Mr. Van Harissis has served as Portfolio Manager of the Growth Series since
March 1996, and as such is primarily responsible for the day-to-day
management of the Series. Mr. Harissis is a Managing Director, Equities, of
Phoenix Investment Counsel, Inc. and National Securities & Research
Corporation. He was a Senior Portfolio Manager from June 1990, to August
1995, at Howe & Rusling, Inc.
Aggressive Growth Series
Mr. Michael K. Arends serves as Portfolio Manager of the Aggressive Growth
Series and as such is primarily responsible for the day to day management of
the Fund's investments. Mr. Arends has served in this capacity since January
1, 1995. Mr. Arends is also a Portfolio Manager of the Equity Opportunities
Fund and a Vice President of Phoenix Strategic Equity Series Fund. Mr. Arends
is a Managing Director, Equities, of Phoenix Investment Counsel, Inc. and
National Securities & Research Corporation. From 1989 to 1994, Mr. Arends
served as Co-Portfolio Manager for various Kemper Funds, the Kemper
Investment Portfolio-Growth Fund, Kemper Growth Fund and Kemper Retirement
Fund Series.
High Yield Series
Mr. Curtiss O. Barrows has served as Portfolio Manager of the High Yield
Series since 1985 and, as such, is primarily responsible for the day-to-day
management of the Series' portfolio. Mr. Barrows is Portfolio Manager of the
Multi-Sector Fixed Income Series of The Phoenix Edge Series Fund and Vice
President of Phoenix Multi-Portfolio Fund. Mr. Barrows is a Managing
Director, Fixed Income, of Phoenix Investment Counsel, Inc. and National
Securities & Research Corporation.
Money Market Series
Ms. Dorothy J. Skaret has served as the Portfolio Manager of the Money
Market Series since 1990 and as such, Ms. Skaret is primarily responsible for
the day-to-day management of the Series' portfolio. Ms. Skaret is also the
Portfolio Manager of the Money Market Series of The Phoenix Edge Series Fund,
and
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Vice President. She is also Vice President of Phoenix-Aberdeen Series Fund,
Phoenix Realty Securities, Inc. and Phoenix Duff & Phelps Institutional
Mutual Funds. Ms. Skaret is a Director, Money Market Trading, of Phoenix
Investment Counsel, Inc. and National Securities & Research Corporation.
U.S. Government Securities Series
Mr. Christopher J. Kelleher has served as the Portfolio Manager of the
Phoenix U.S. Government Securities Series since 1989 and as such, is
primarily responsible for the day-to-day management of the Series'
portfolio. He is also a Vice President of The Phoenix Edge Series Fund and
Phoenix Duff & Phelps Institutional Mutual Funds. Mr. Kelleher is a Managing
Director, Fixed Income, of Phoenix Investment Counsel, Inc. and National
Securities & Research Corporation.
The Financial Agent
Equity Planning also acts as financial agent of the Trust and, as such,
performs administrative, bookkeeping and pricing services and certain other
administrative functions for the Trust. As compensation, Equity Planning is
entitled to a fee, payable monthly and based upon (a) the average of the
aggregate daily net asset values of each Series of the Fund, at the following
incremental annual rates:
First $100 million .05%
$100 million to $300 million .04%
$300 million to $500 million .03%
Greater than $500 million .015%
(b) a minimum fee based on the predominant type of assets of the Series; and
(c) an annual fee of $12,000 together with an additional $12,000 for any
additional class of shares created in the future. For its services during the
Trust's fiscal year ended October 31, 1996, Equity Planning received
$1,789,755 or 0.03% of average net assets.
The Custodian and Transfer Agent
The custodian of the assets of the Trust is State Street Bank and Trust
Company, P.O. Box 351, Boston, Massachusetts, 02101. The Trust has authorized
the custodian to appoint one or more subcustodians for the assets of the
Trust held outside the United States. The securities and other assets of each
Series of the Trust are held by the custodian or any subcustodian separate
from the securities and assets of each other Series.
Pursuant to a Transfer Agent and Service Agreement with the Phoenix Funds,
Equity Planning acts as transfer agent for the Trust (the "Transfer Agent")
for which it is paid $19.25 for daily dividend accounts and $14.95 for
non-daily dividend shareholder accounts plus out-of-pocket expenses. The
Transfer Agent is authorized to engage sub-agents to perform certain
shareholder servicing functions from time to time for which such agents shall
be paid a fee by Equity Planning.
Brokerage Commissions
Although the Conduct Rules of the National Association of Securities
Dealers, Inc. prohibit its members from seeking orders for the execution of
investment company portfolio transactions on the basis of their sales of
investment company shares, under such Rules, sales of investment company
shares may be considered in selecting brokers to effect portfolio
transactions. Accordingly, some portfolio transactions are, subject to such
Rules and to obtaining best prices and executions, effected through dealers
(excluding Equity Planning) who sell shares of the Trust. The Adviser may
also select an affiliated broker-dealer to execute transactions for the
Trust, provided that the commissions, fees or other remuneration paid to such
affiliated broker is reasonable and fair as compared to that paid to
non-affiliated brokers for comparable transactions.
DISTRIBUTION PLANS
The offices of Equity Planning, the National Distributor of the Trust's
shares, are located at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield,
Connecticut 06083-2200. Philip R. McLoughlin is a Trustee and President of
the Trust and a director and officer of Equity Planning. David R. Pepin, a
director and officer of Equity Planning, is an officer of the Trust. Michael
E. Haylon, a director of Equity Planning, is an officer of the Trust. G.
Jeffrey Bohne, Nancy G. Curtiss, William E. Keen III, William R. Moyer,
Leonard J. Saltiel, and Thomas N. Steenburg are officers of the Trust and
officers of Equity Planning.
Equity Planning and the Trust have entered into distribution agreements
under which Equity Planning has agreed to use its best efforts to find
purchasers for Trust shares sold subject to an initial sales charge and those
sold subject to a contingent deferred sales charge. The Trust has granted
Equity Planning the exclusive right to purchase from the Trust and resell, as
principal, shares needed to fill unconditional orders for Trust shares.
Equity Planning may sell Trust shares through its registered representatives
or through securities dealers with whom it has sales agreements. Equity
Planning may also sell Trust shares pursuant to sales agreements entered into
with banks or bank affiliated securities brokers who, acting as agent for
their customers, place orders for Trust shares with Equity Planning. Although
the Glass-Steagall Act prohibits banks and bank affiliates from engaging in
the business of underwriting, distributing or selling securities (including
mutual fund shares), banking regulators have not indicated that such
institutions are prohibited from purchasing mutual fund shares upon the order
and for the account of their customers. If, because of changes in law or
regulations, or because of new interpretations of existing law, it is
determined that agency transactions of banks or bank affiliated securities
brokers are not permitted under the Glass-Steagall Act, the Trustees will
consider what action, if any, is appropriate. It is not anticipated that
termination of sales agreements with banks or bank affiliated securities
brokers would result in a loss to their customers or a change in the net
asset value per share of a Series of the Trust.
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The sale of Trust shares through a bank or a securities broker affiliated
with a bank is not expected to preclude the Trust from borrowing from such
bank or from availing itself of custodial or transfer agency services offered
by such bank.
The Trustees adopted a distribution plan on behalf of all Series of the
Trust, except the Money Market Series, on August 22, 1990, pursuant to Rule
12b-1 under the Investment Company Act of 1940. That distribution plan (the
"Plan") was approved by the shareholders of those Series on December 13,
1990. The Plan authorizes the payment by the Trust to Equity Planning of the
Trust's shares of an amount not exceeding 0.25% annually of the average daily
net assets of each Series for each year elapsed after the inception of the
Plan. Under a separate Class B plan adopted by the Trustees (including a
majority of the non-interested or independent trustees) on November 17, 1993,
and ratified by the initial sole shareholder of Class B shares, the Trust is
authorized to pay up to 1.00% annually of the average daily net assets of the
Series representing Class B Shares.
Although under no contractual obligation to do so, the Trust intends to make
such payments to Equity Planning (i) as commissions for shares of the Series
sold, all or any part of which commissions will be paid by Equity Planning
upon receipt from the Trust to others (who may be other dealers or registered
representatives of Equity Planning), (ii) to enable Equity Planning to pay to
such others maintenance or other fees in respect of the Series' shares sold
by them and remaining outstanding on the Trust's books during the period in
respect of which the fee is paid (the "Service Fee"); and (iii) to enable
Equity Planning to pay to bank affiliated securities brokers maintenance or
other fees in respect of shares of the Series purchased by their customers
and remaining outstanding on the Trust's books during the period in respect
of which the fee is paid. The portion of the above fees paid by the Trust to
Equity Planning as "Service Fees" shall not exceed 0.25% annually of the
average daily net assets of the class to which such fee relates. Payments
less the portion thereof paid by Equity Planning to others, will be used by
Equity Planning for its expenses of distribution of shares of the Series. If
expenses of distribution of shares of a Series or a Class of a Series exceed
payments and any sales charges retained by Equity Planning, the Trust is not
required to reimburse Equity Planning for excess expenses.
In order to receive payments under the Plan, participants must meet such
qualifications as are to be established in the sole discretion of the
Distributor, such as services to the Trust's shareholders; or services
providing the Trust with more efficient methods of offering shares to groups
of clients, members or prospects of a participant; or services permitting
bulking of purchases or sales, or transmissions of such purchases or sales by
computerized tape or other electronic equipment; or other batch processing.
For the fiscal year ended October 31, 1996, the Trust paid $14,191,236 under
the Class A Plan and $952,787 under the Class B Plan. The fees were used to
compensate unaffiliated broker-dealers for servicing shareholder's accounts,
compensating sales personnel and reimbursing the Distributor for commission
expenses and expenses related to preparation of the marketing material. On a
quarterly basis, the Trust's Trustees review a report on expenditures under
each Plan and the purposes for which expenditures were made. The Trustees
conduct an additional more extensive review annually in determining whether
each Plan will be continued. By its terms, continuation of each Plan from
year to year is contingent on annual approval by a majority of the Trust's
Trustees and by a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) and who have no direct or indirect financial
interest in the operation of either Plan or any related agreements (the "Plan
Trustees"). Each Plan provides that it may not be amended to increase
materially the costs which the Trust may bear without approval of the
applicable class of shareholders of the Trust and that other material
amendments must be approved by a majority of the Plan Trustees by vote cast
in person at a meeting called for the purpose of considering such amendments.
Each Plan further provides that while it is in effect, the selection and
nomination of Trustees who are not "interested persons" shall be committed to
the discretion of the Trustees who are not "interested persons." Each Plan
may be terminated at any time by vote of a majority of the Plan Trustees or a
majority of the applicable class of outstanding shares of the Trust.
The National Association of Securities Dealers ("NASD") regards certain
distribution fees as asset-based sales charges subject to NASD sales load
limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution fees or amend either or both Plans.
HOW TO BUY SHARES
The minimum initial purchase is $500, and the minimum subsequent investment
is $25. Both the minimum initial and subsequent investment amounts are $25
for investments pursuant to the "Investo-Matic" plan, a bank draft investing
program administered by Equity Planning, or pursuant to the Systematic
Exchange Privilege. (See Statement of Additional Information.) Completed
applications for the purchase of shares should be mailed to Phoenix Funds,
c/o State Street Bank and Trust Company, P.O. Box 8301, Boston, MA
02266-8301.
Each class of shares represents an interest in the same portfolio of
investments of the Series, has the same rights, and is identical to the other
in all respects, except that Class B Shares bear the expenses of the deferred
sales arrangement and any expenses (including the higher distribution
services fee and any incremental transfer agency costs) resulting from such
sales arrangement. Each class has exclusive voting rights with respect to
provisions of the Rule 12b-1 distribution plan pursuant to which its
distribution services fee is paid and each class has different exchange
privileges. Only the Class B Shares are subject to a conversion feature. The
net income attributable to Class B Shares and the dividends paid on Class B
Shares will be reduced by the amount of the higher distribution services fee
and incremental expenses associated with such distribution services fee;
likewise, the net asset
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value of the Class B Shares will be reduced by such amount to the extent the
Trust has undistributed net income.
Subsequent investments for the purchase of full and fractional shares in
amounts of $25 or more may be made through an investment dealer or by sending
a check to the Phoenix Funds, c/o State Street Bank and Trust Company, P.O.
Box 8301, Boston, MA 02266-8301. Share certificates representing any number
of full shares will be issued only on request, and subject to certain
conditions. A fee may be incurred by the shareholder for a lost or stolen
share certificate. Sales personnel of broker-dealers distributing the Series'
shares may receive differing compensation for selling Class A or Class B
Shares.
The Trust offers combination purchase privileges, letters of intent,
accumulation plans, withdrawal plans and reinvestment and exchange
privileges. (See the Statement of Additional Information.) Certain privileges
may not be available in connection with Class B Shares. Under certain
circumstances, shares of any Series (except shares of the Money Market Series
Class A Shares), or shares of any other Phoenix Fund, may be exchanged for
shares of the same class on the basis of the relative net asset values per
share at the time of the exchange. Exchanges from the Money Market Series
Class A will be exchanged for Class A Shares of any other Phoenix Fund on the
basis of the relative net asset values provided the shareholders' investment
was previously subject to a sales charge in another Phoenix Fund. Exchanges
are subject to the minimum initial investment requirement of the designated
Phoenix Fund except if made in connection with the Systematic Exchange
privilege. Shareholders may exchange shares held in book-entry form for an
equivalent number (value) of the same class of shares of any other Phoenix
Fund. On Class B share exchanges, the contingent deferred sales charge
schedule of the original shares purchased is not taken and continues to
apply.
Alternative Sales Arrangements
The alternative purchase arrangement permits an investor to choose the
method of purchasing shares that is most beneficial given the amount of the
purchase, the length of time the investor expects to hold the shares, whether
the investor wishes to receive distributions in cash or to reinvest them in
additional shares of the Trust, and other circumstances. Investors should
consider whether, during the anticipated life of their investment in the
Trust, the accumulated continuing distribution service fee and contingent
deferred sales charges on Class B Shares prior to conversion would be less
than the initial sales charge and accumulated distribution fee on Class A
Shares purchased at the same time, and to what extent such differential would
be offset by the higher yield of Class A Shares. In this regard, Class A
Shares will normally be more beneficial to the investor who qualifies for
certain reduced initial sales charges. For this reason, the Distributor
intends to limit sales of Class B Shares sold to any shareholder to a maximum
total value of $250,000. Class B Shares sold to unallocated qualified
employer sponsored plans will be limited to a total value of $1,000,000.
Class B Shares sold to allocated qualified employer sponsored plans,
including 401(k) plans, will be limited to a maximum total value of $250,000
for each participant. The Distributor reserves the right to decline the sale
of Class B Shares to allocated qualified employer sponsored plans not
utilizing an approved participant tracking system. In addition, Class B
Shares will not be sold to any qualified employee benefit plan, endowment
fund or foundation if, on the date of the initial investment, the plan, fund
or foundation has assets of $10,000,000 or more or at least 100 eligible
employees. Class B Shares will also not be sold to investors who have reached
the age of 85 because of such persons' expected distribution requirements.
Class A Shares are subject to a lower distribution services fee and,
accordingly, pay correspondingly higher dividends per share. However, because
initial sales charges are deducted at the time of purchase, such investors
would not have all their funds invested initially and, therefore, would
initially own fewer shares. Investors not qualifying for reduced initial
sales charges who expect to maintain their investment for an extended period
of time might consider purchasing Class A Shares because the accumulated
continuing distribution charges on Class B Shares may exceed the initial
sales charge on Class A Shares during the life of the investment. Again,
however, such investors must weigh this consideration against the fact that,
because of such initial sales charge, not all their funds will be invested
initially. However, other investors might determine that it would be more
advantageous to purchase Class B Shares to have all their funds invested
initially, although remaining subject to higher continuing distribution
charges and, for a five-year period, being subject to a contingent deferred
sales charge.
Initial Sales Charge Alternative--Class A Shares
The public offering price of Class A Shares (other than the Money Market
Series) is the net asset value plus a sales charge, as set forth below.
Offering prices become effective at the close of the general trading session
of the New York Stock Exchange. Orders received by dealers prior to such time
are confirmed at the offering price effective at that time, provided the
order is received by State Street Bank and Trust Company prior to its close
of business.
The sales charge varies with the size of the purchase and reduced charges
apply to the aggregate of purchases of the Trust made at one time by "any
person," which term includes an individual, an individual and his/her spouse
and their children under the age of 21, or a trustee or other fiduciary
purchasing shares for a single trust, estate or fiduciary account although
more than one beneficiary is involved.
Class A Shares of the Trust (other than the Money Market Series) are offered
to the public at the net asset value next computed after the purchase order
is received by State Street Bank and Trust Company plus a maximum sales
charge of 4.75% of the offering price (4.99% of the amount invested) on
single purchases of less than $50,000. The sales charge is reduced on a
graduated scale on single purchases of $50,000 or more as shown below.
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Sales Charge Sales Charge Dealer Discount
Amount of as Percentage as Percentage or Agency Fee
Transaction of Offering of Amount as Percentage of
at Offering Price Price Invested Offering Price*
- -------------------- --------------- --------------- ----------------
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but
under $100,000 4.50 4.71 4.00
$100,000 but
under $250,000 3.50 3.63 3.00
$250,000 but
under $500,000 3.00 3.09 2.75
$500,000 but
under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None**
*Equity Planning shall sponsor sales contests, training and educational
meetings and provide to all qualifying dealers, from its own profits and
resources, additional compensation in the form of trips, merchandise or
expense reimbursement. Brokers or dealers other than Equity Planning may also
make customary additional charges for their services in effecting purchases,
if they notify the Trust of their intention to do so. Equity Planning shall
also pay service and retention fees, from its own profits and resources, to
qualified wholesalers in connection with the sale of shares of Phoenix Funds
(exclusive of Class A Shares of Phoenix Money Market Series) by registered
financial institutions and related third party marketers.
**In connection with Class A Share purchases (or subsequent purchases in any
amount) by an account held in the name of a qualified employee benefit plan
with at least 100 eligible employees, and new Class A Share purchases of $10
million or more by existing accounts held in the name of such plans, Equity
Planning may pay broker/dealers, from its own resources, an amount equal to
1% on the first $3 million of purchases, 0.50% on the next $3 million, plus
0.25% on the amount in excess of $6 million.
In connection with Class A Share purchases of $1,000,000 or more (or
subsequent purchases in any amount), including purchases of shares of the
Money Market Series, and excluding purchases by qualified employee benefit
plans as described above Equity Planning may pay broker-dealers, from its own
profits and resources, a percentage of the net asset value of any shares sold
(excluding Money Market Series shares) as set forth below:
Purchase Amount Payment to Broker/Dealer
--------------------------- ------------------------------
$1,000,000--$3,000,000 1%
$3,000,001--$6,000,000 .50 of 1%
$6,000,001 or more .25 of 1%
If part or all of such an investment, including investments by qualified
employee benefit plans, is subsequently redeemed within one year of the
investment date, the broker/dealer will refund to Equity Planning any such
amounts paid with respect to the investment.
Shares of the Money Market Series are offered to the public at their
constant net asset value of $1.00 per share with no sales charge on the Class
A Shares. See the Statement of Additional Information.
How To Obtain Reduced Sales Charges--Class A Shares
Investors choosing the initial sales charge alternative under certain
circumstances may be entitled to pay reduced sales charges. The circumstances
under which such investors may pay reduced sales charges are described below.
Qualified Purchasers. No sales charge will be imposed on sales of shares to
(1) any Phoenix Fund trustee, director or officer; (2) any director or
officer, or any full-time employee or sales representative (who has acted as
such for at least 90 days), of the Adviser, or of Equity Planning; (3)
registered representatives and employees of securities dealers with whom
Equity Planning has sales agreements; (4) any qualified retirement plan
exclusively for persons described above; (5) any officer, director or
employee of a corporate affiliate of the Adviser or Equity Planning; (6) any
spouse, child, parent, grandparent, brother or sister of any person named in
(1), (2), (3) or (5) above; (7) employee benefit plans for employees of the
Adviser, Equity Planning and/or their corporate affiliates; (8) any employee
or agent who retires from Phoenix Home Life or Equity Planning; (9) any
account held in the name of a qualified employee benefit plan, endowment fund
or foundation if, on the date of the initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 100 eligible
employees; (10) any person with a direct rollover transfer of shares from an
established Phoenix Fund qualified plan; (11) any Phoenix Home Life separate
account which funds group annuity contracts offered to qualified employee
benefit plans; (12) any state, county, city, department, authority or similar
agency prohibited by law from paying a sales charge; (13) any fully
matriculated student in any U.S. service academy; (14) any unallocated
account held by a third party administrator, registered investment adviser,
trust company, or bank trust department which exercises discretionary
authority and holds the account in a fiduciary, agency, custodial or similar
capacity, if in the aggregate such accounts held by such entity equal or
exceed $1,000,000; or (15) any person who is investing redemption proceeds
from investment companies other than the Phoenix Funds if, in connection with
the purchases or redemption of the redeemed shares, the investor paid a prior
sales charge provided such investor supplies verification that the redemption
occurred within 90 days of the Phoenix Fund purchase and that a sales charge
was paid; provided that sales to persons listed in (1) through (15) above are
made upon the written assurance of the purchaser that the purchase is made
for investment purposes and that the shares so acquired will not be resold
except to the Fund.
In addition, Class A shares purchased by the following investors are not
subject to any Class A sales charge: (1) investment advisors and financial
planners who charge an advisory, consulting or other fee for their services
and buy shares for their own accounts or the accounts of their clients, and
(2) retirement plans and deferred compensation plans and trusts used to fund
those plans (including, for example, plans qualified or created under
sections 401(a), 403(b) or 457 of the Internal Revenue Code), and "rabbi
trusts" that buy shares for their own accounts, in each case if those
purchases are made through a broker or agent or other financial intermediary
that
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<PAGE>
has made special arrangements with the Distributor for those purchases; (3)
clients of such investment advisors or financial planners who buy shares for
their own accounts may also purchase shares without sales charge but only if
their accounts are linked to a master account of their investment advisor or
financial planner on the books and records of the broker, agent or financial
intermediary with which the Distributor has made such special arrangements
(each of these investors may be charged a fee by the broker, agent or
financial intermediary for purchasing shares).
Shares issued pursuant to the automatic reinvestment of income dividends or
capital gains distributions are not subject to any sales charges. The Trust
receives the entire net asset value of its Class A Shares sold to investors.
The Distributor's commission is the sales charge shown above less any
applicable discount or commission "re-allowed" to selected dealers and
agents. The Distributor will re-allow discounts to selected dealers and
agents in the amounts indicated in the table above. In this regard, the
Distributor may elect to re-allow the entire sales charge to selected
dealers and agents for all sales with respect to which orders are placed with
the Distributor. A selected dealer who receives re-allowance in excess of 90%
of such a sales charge may be deemed to be an "underwriter" under the
Securities Act of 1933.
Combination Purchase Privilege. Purchases, either singly or in any
combination, of shares of the Trust or shares of any other Phoenix Fund
(including Class B Shares but excluding Class A shares of the Money Market
Fund Series), if made at a single time by a single purchaser, will be
combined for the purpose of determining whether the total dollar amount of
such purchases entitles the purchaser to a reduced sales charge on any
purchases of Class A Shares. Each purchase of Class A Shares will then be
made at the public offering price, as described in the then current
Prospectus relating to such shares, which at the time of such purchase is
applicable to a single transaction of the total dollar amount of all such
purchases. The term "single purchaser" includes an individual, or an
individual, his spouse and their children under the age of majority
purchasing for his or their own account (including an IRA account) including
his or their own trust, commonly known as a living trust; a trustee or other
fiduciary purchasing for a single trust, estate or single fiduciary account,
although more than one beneficiary is involved; multiple trusts or 403(b)
plans for the same employer; multiple accounts (up to 200) under a qualified
employee benefit plan or administered by a third party administrator; or
trust companies, bank trust departments, registered investment advisers, and
similar entities placing orders or providing administrative services with
respect to funds over which they exercise discretionary investment authority
and which are held in a fiduciary, agency, custodial or similar capacity,
provided all shares are held in record in the name, or nominee name, of the
entity placing the order.
Letter of Intent. Class A Shares or shares of any other Phoenix Fund
(including Class B Shares but excluding Class A Shares of the Money Market
Fund Series) may be purchased by a "single purchaser" (as defined above)
within a period of thirteen months pursuant to a Letter of Intent, in the
form provided by Equity Planning, stating the investor's intention to invest
in such shares during such period an amount which, together with the value
(at their maximum offering prices on the date of the Letter) of the shares of
the Class A Shares of the Trust or the Class A or Class B Shares of any other
Phoenix Fund then owned by such investor, equals a specified dollar amount.
Each purchase of shares made pursuant to a Letter of Intent will be made at
the public offering price, as described in the then current Prospectus
relating to such shares, which at the time of purchase is applicable to a
single transaction of the total dollar amount specified in the Letter of
Intent.
An investor's Letter of Intent is not a binding commitment of the investor
to purchase or a binding obligation of the Trust or Equity Planning to sell a
specified dollar amount of shares qualifying for a reduced sales charge.
Accordingly, out of his initial purchase (and subsequent purchases if
necessary), 5% of the dollar amount of purchases required to complete his
investment is held in escrow in the form of shares (valued at the purchase
price thereof) registered in the investor's name until he completes his
investment, at which time escrowed shares are deposited to his account. If
the investor does not complete his investment and does not within 20 days
after written request by Equity Planning or his dealer pay the difference
between the sales charge on the dollar amount specified in his Letter of
Intent and the sales charge on the dollar amount of actual purchases, the
difference will be realized through the redemption of an appropriate number
of the escrowed shares and any remaining escrowed shares will be deposited to
his account.
Right of Accumulation. "Single purchasers" (as defined above) may also
qualify for reduced sales charges based on the combined value of purchases of
either class of shares of the Trust, or any other Phoenix Fund, made over
time. Reduced sales charges are offered to investors whose shares, in the
aggregate, are valued (i.e., the dollar amount of such purchases plus the
then current value (at the public offering price as described in the then
current prospectus relating to such shares) of shares of all Phoenix Funds
owned) in excess of the threshold amounts described in the section entitled
"Initial Sales Charge Alternative--Class A Shares". To use this option, the
investor must supply sufficient account information to Equity Planning to
permit verification that one or more purchases qualify for a reduced sales
charge.
Associations. A group or association may be treated as a "single purchaser"
and qualify for reduced initial sales charges under the Combination Privilege
and Right of Accumulation if the group or association (1) has been in
existence for at least six months; (2) has a legitimate purpose other than to
purchase mutual fund shares at a reduced sales charge; (3) facilitates
solicitation of the membership by the investment dealer, thus assisting in
effecting economies of sales effort; and (4) is not a group whose sole
organizational nexus is that the members are credit card holders of a
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
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<PAGE>
Deferred Sales Charge Alternative--Class B Shares
Investors choosing the deferred sales charge alternative purchase Class B
Shares at net asset value per share without the imposition of a sales charge
at the time of purchase. The Class B Shares are being sold without an initial
sales charge but are subject to a sales charge if redeemed within five years
of purchase.
Proceeds from the contingent deferred sales charge are paid to Equity
Planning and are used in whole or in part by Equity Planning to defray the
expenses related to providing distribution-related services to the Trust in
connection with the sale of the Class B Shares, such as the payment of
compensation to selected dealers and agents for selling Class B Shares. The
combination of the contingent deferred sales charge and the distribution fee
facilitates the ability of the Trust to sell the Class B Shares without a
sales charge being deducted at the time of purchase.
Contingent Deferred Sales Charge. Class B Shares redeemed within five years
of purchase will be subject to a contingent deferred sales charge at the
rates set forth below charged as a percentage of the dollar amount subject
thereto. The charge will be assessed on an amount equal to the lesser of the
current market value or the cost of the shares being redeemed. Accordingly,
no sales charge will be imposed on increases in net asset value of shares
above the initial purchase price. In addition, no charge will be assessed on
shares derived from the reinvestment of dividends or capital gains
distributions.
Equity Planning intends to pay investment dealers a sales commission of 4%
of the sale price of Class B Shares sold by such dealers, subject to future
amendment or termination. Equity Planning will retain all or a portion of the
continuing distribution fee assessed to Class B shareholders and will receive
the entire amount of the contingent deferred sales charge paid by
shareholders on the redemption of shares to finance the commission plus
interest and related marketing expenses.
The amount of the contingent deferred sales charge, if any, will vary
depending on the number of years from the time of payment for the Class B
Shares to the time of redemption of such shares. Solely for the purpose of
determining the number of years from the time of any payment for the purchase
of shares, all payments made during a month will be aggregated and deemed to
have been made on the last day of the previous month.
Contingent Deferred
Sales Charge as
a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
- ------------------- -----------------
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 2%
Sixth 0%
In determining whether a contingent deferred sales charge is applicable to a
redemption, it will be assumed that any Class A Shares are being redeemed
first, Class B Shares held for over five years or acquired pursuant to
reinvestment of dividends or distributions are redeemed next. Any Class B
Shares held longest during the five-year period are redeemed next unless the
shareholder directs otherwise. The charge will not be applied to dollar
amounts representing an increase in the net asset value since the time of
purchase.
To provide an example, assume in 1990, an investor purchased 100 Class B
Shares. In 1993, the investor purchased another 100 Class B Shares at $12 per
share. In 1995, the investor purchased 100 Class A Shares. Assume that in
1996, the investor owns 225 Class B Shares (15 Class B Shares resulting from
dividend reinvestment and distributions upon the Class B Shares purchased in
1990 and 10 Class B Shares resulting from dividend reinvestment and
distributions upon the Class B Shares purchased in 1993) as well as 100 Class
A Shares. If the investor wished to then redeem 300 shares and had not
specified a preference in redeeming shares: first, 100 Class A Shares would
be redeemed without charge. Second, 115 Class B Shares purchased in 1990
(including 15 shares issued as a result of dividend reinvestment and
distributions) would be redeemed next without charge. Finally, 85 Class B
Shares purchased in 1993 would be redeemed resulting in a deferred sales
charge of $27 [75 shares (85 shares minus 10 shares resulting from dividend
reinvestment) x $12 (original price or current NAV if less than original) x
3% (applicable rate in the third year after purchase)].
The contingent deferred sales charge is waived on redemptions of shares (a)
if redemption is made within one year of death (i) of the sole shareholder on
an individual account, (ii) of a joint tenant where the surviving joint
tenant is the deceased's spouse, or (iii) of the beneficiary of a Uniform
Gifts to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other
custodial account; (b) if redemption is made within one year of disability,
as defined in Section 72(m)(7) of the Code; (c) in connection with mandatory
distributions upon reaching age 70-1/2 under any retirement plan qualified
under Sections 401, 408 or 403(b) of the Code or any redemption resulting
from the tax-free return of an excess contribution to an IRA; (d) in
connection with redemptions by 401(k) plans using an approved participant
tracking system for: participant hardships, death, disability or normal
retirement, and loans which are subsequently repaid; (e) in connection with
the exercise of certain exchange privileges among the Class B Shares of a
Series and Class B Shares of other Phoenix Funds; (f) in connection with any
direct rollover transfer of shares from an established Phoenix Fund qualified
plan into a Phoenix Fund IRA by participants terminating from the qualified
plan; and (g) in accordance with the terms specified under the Systematic
Withdrawal Program. If, upon the occurrence of a death as outlined above, the
account is transferred to an account registered in the name of the deceased's
estate, the contingent deferred sales charge will be waived on any redemption
from the estate account occurring within one year
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<PAGE>
of the death. If the Class B Shares are not redeemed within one year of the
death, they will remain subject to the applicable contingent deferred sales
charge when redeemed.
Class B Shares will automatically convert to Class A Shares of the same
Series without a sales charge at the relative net asset values of each class
after eight years from the acquisition of the Class B Shares, and as a
result, will thereafter be subject to the lower distribution fee paid under
the Class A Plan. Such conversion will be on the basis of the relative net
asset value of the two classes without the imposition of any sales load, fee
or other charge. The purpose of the conversion feature is to relieve the
holders of Class B Shares that have been outstanding for a period of time
sufficient for the Distributor to have been compensated for
distribution-related expenses from the burden of such distribution-related
expenses.
For purposes of conversion to Class A, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares
in a shareholder's fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Trust account
(other than those in the sub-account) are converted to Class A Shares, an
equal pro rata portion of the Class B Shares in the sub-account will also be
converted to Class A Shares.
The conversion of Class B Shares to Class A Shares is subject to the
continuing availability of an opinion of counsel or a ruling of the Internal
Revenue Service ("IRS") to the effect that (i) the assessment of the higher
distribution fees and transfer agency costs with respect to Class B Shares
does not result in any dividends or distributions constituting "preferential
dividends" under the Code, and (ii) that the conversion of shares does not
constitute a taxable event under federal income tax law. The conversion of
Class B Shares to Class A Shares may be suspended if such an opinion or
ruling is no longer available. In that event, no further conversions of Class
B Shares would occur, and shares might continue to be subject to the higher
distribution fee for an indefinite period which may extend beyond the period
ending eight years after the end of the month in which affected Class B
Shares were purchased. If the Trust were unable to obtain such assurances
with respect to the assessment of distribution fees and transfer agent costs
relative to the Class B Shares, it might make additional distributions if
doing so would assist in complying with the Trust's general practice of
distributing sufficient income to reduce or eliminate U.S. federal taxes.
Exchange Privileges
Shareholders may exchange Class A or Class B Shares (except for Class A
shares of the Money Market Series) held in book-entry form for shares of the
same class of other Phoenix Funds, provided the following conditions are met:
(1) the shares that will be acquired in the exchange (the "Acquired Shares")
are available for sale in the shareholder's state of residence; (2) the
Acquired Shares are the same class as the shares to be surrendered (the
"Exchanged Shares"); (3) the Acquired Shares will be registered to the same
shareholder account as the Exchanged Shares; (4) the account value of the
Fund whose shares are to be acquired must equal or exceed the minimum initial
investment amount required by that Phoenix Fund after the exchange is
implemented; and (5) if a shareholder has elected not to utilize the
Telephone Exchange Privilege (see below), a properly executed exchange
request must be received by State Street Bank and Trust Company. Exchanges
from the Money Market Series Class A will be exchanged for Class A Shares of
any other Phoenix Fund on the basis of the relative net asset values provided
the shareholders' investment was previously subject to a sales charge in
another Phoenix Fund.
Subject to the above requirements for an exchange, a shareholder or his/her
registered representative may, by telephone or written notice, elect to have
Class A or Class B Shares of the Trust exchanged for the same class of shares
of another Phoenix Fund automatically on a monthly, quarterly, semi-annual or
annual basis or may cancel the privilege ("Systematic Exchange").
Shareholders who maintain an account balance in the Trust of at least
$5,000, or $2,000 for tax qualified retirement benefit plans (calculated on
the basis of the net asset value of the shares held in a single account), may
direct that shares of the Trust be automatically exchanged at predetermined
intervals for shares of the same class of another Phoenix Fund. If the
shareholder is participating in the Self Security program offered by Phoenix
Home Life, it is not necessary to maintain the above account balances in
order to use the Systematic Exchange privilege.
Such exchanges will be executed upon the close of business on the 10th of a
month and if the 10th falls on a holiday or weekend, then at the close of
business on the next succeeding business day. The minimum initial and
subsequent amount that may be exchanged under the Systematic Exchange is $25.
Systematic Exchange forms are available from Equity Planning.
Exchanges will be based upon each Series' net asset value per share next
computed following receipt of a properly executed exchange request, without
sales charge. Money Market Series Class A Shares exchanged for Class A Shares
of any other Phoenix Fund will be purchased at that fund's public offering
price (net asset value plus the applicable sales charge), unless the then
equivalent share value being exchanged out of the Money Market Series was
previously subject to a sales charge in another Phoenix Fund. On Class B
Share exchanges, the contingent deferred sales charge schedule of the
original shares purchased continues to apply.
The exchange of shares from one Phoenix Fund to another is treated as a sale
of the Exchanged Shares and a purchase of the Acquired Shares for Federal
income tax purposes. The shareholder may, therefore, realize a taxable gain
or loss. See "Dividends, Distributions and Taxes" for information concerning
the Federal income tax treatment of the disposition of shares.
Because excessive trading can hurt fund performance and harm shareholders,
the Trust reserves the right to temporarily or permanently terminate exchange
privileges or reject any
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specific order for any dealer, shareholder or person whose transactions seem
to follow a timing pattern, including those who request more than one
exchange out of a fund within any 30 day period. The Distributor has entered
into agreements with certain dealers and investment advisors permitting them
to exchange their clients' shares by telephone. These privileges are limited
under those agreements and the Distributor has the right to reject or suspend
those privileges. The Trust reserves the right to terminate or modify its
exchange privileges at any time upon giving prominent notice to shareholders
at least 60 days in advance.
Each Phoenix Fund has different investment objectives and policies.
Shareholders should, therefore, obtain and review the prospectus of the fund
into which the exchange is to be made before any exchange requests are made.
Telephone Exchanges
Telephone Exchange Privileges are available only in States where shares to
be acquired may be legally sold. Unless a shareholder elects in writing not
to participate in the Telephone Exchange Privilege, shares for which
certificates have not been issued may be exchanged by calling (800) 243-1574
provided that the exchange is made between accounts with identical
registrations. Under the Telephone Exchange Privilege, telephone exchange
orders may also be entered on behalf of the shareholder by his or her
registered representative.
The Trust and the Transfer Agent will employ reasonable procedures to
confirm that telephone instructions are genuine. In addition to requiring
identical registrations on both accounts, the Transfer Agent will require
address verification and will record telephone instructions on tape. All
exchanges will be confirmed in writing to the shareholder. To the extent that
procedures reasonably designed to prevent unauthorized telephone exchanges
are not followed, the Trust and/or the Transfer Agent may be liable for
following telephone instructions for exchange transactions that prove to be
fraudulent. Broker/dealers other than Equity Planning have agreed to bear the
risk of any loss resulting from any unauthorized telephone exchange
instruction from the firm or its registered representatives. However, the
shareholder would bear the risk of loss resulting from instructions entered
by an unauthorized third party that the Trust and/or the Transfer Agent
reasonably believe to be genuine. The Telephone Exchange Privilege may be
modified or terminated at any time on 60 days' notice to shareholders. In
addition, during times of drastic economic or market changes, the Telephone
Exchange Privilege may be difficult to exercise or may be suspended
temporarily. In such event an exchange may be effected by following the
procedure outlined for tendering shares represented by certificate(s).
If a shareholder elects not to use the Telephone Exchange Privilege or if
the shares being exchanged are represented by a certificate or certificates,
in order to exchange shares the shareholder must submit a written request to
Phoenix Funds c/o State Street Bank and Trust Company, P.O. Box 8301, Boston,
MA 02266-8301. If the shares are being exchanged between accounts that are
not registered identically, the signature on such request must be guaranteed
by an eligible guarantor institution as defined by the Transfer Agent in
accordance with its signature guarantee procedures. Currently, such
procedures generally permit guarantees by banks, broker dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations. Any outstanding certificate or
certificates for the tendered shares must be duly endorsed and submitted.
Purchase and withdrawal plans and reinvestment and exchange privileges are
described more fully in the Statement of Additional Information. For further
information, call Equity Planning at (800) 243-1574.
NET ASSET VALUE
The net asset value per share of each Series is determined as of the close
of regular trading of the New York Stock Exchange (the "Exchange") on days
when the Exchange is open for trading. The net asset value per share of a
Series is determined by adding the values of all securities and other assets
of the Series, subtracting liabilities, and dividing by the total number of
outstanding shares of the Series. The total liability allocated to a class,
plus that class's distribution fee and any other expenses allocated solely to
that class, are deducted from the proportionate interest of such class in the
assets of the Series, and the resulting amount of each is divided by the
number of shares of that class outstanding to produce the net asset value per
share.
The Series' investments are valued at market value or, where market
quotations are not available, at fair value as determined in good faith by
the Trustees or their delegates. The assets of the Money Market Series are
valued on an amortized cost basis absent extraordinary or unusual market
conditions. Foreign and domestic debt securities (other than short-term
investments) are valued on the basis of broker quotations or valuations
provided by a pricing service approved by the Trustees when such prices are
believed to reflect the fair value of such securities. Foreign and domestic
equity securities are valued at the last sale price or, if there has been no
sale that day, at the last bid price, generally. Short term investments
having a remaining maturity of less than sixty-one days are valued at
amortized cost, which the Trustees have determined approximates market. For
further information about security valuations, see the Statement of
Additional Information.
HOW TO REDEEM SHARES
Any holder of shares of any Series may require the Trust to redeem his
shares at any time at the net asset value per share next computed after
receipt of a redemption request in proper form by Phoenix Funds c/o State
Street Bank and Trust Company, P.O. Box 8301, Boston, MA 02266-8301 (see "Net
Asset Value"). In the case of Class B Share redemptions, investors will be
subject to the applicable deferred sales charge, if any, for such shares (see
"Deferred Sales Charge Alternative--Class B Shares"). In addition, each
Series
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<PAGE>
maintains a continuous offer to repurchase its shares, and shareholders may
normally sell their shares through securities dealers, brokers, or agents,
who may charge customary commissions or fees for their services. Payment will
be made within seven days after receipt of the duly endorsed share
certificates or telephone request unless the repurchase or redemption request
relates to shares for which good payment has not yet been collected. For
shares purchased by check or via Invest-by-Phone service, collection of good
payment may take up to 15 days.
The Trustees reserve the right, upon 30 days' written notice, to redeem an
account in any Series if the total net asset value of the shares in such
account falls below $200, and the shareholder, upon such notice, fails to add
sufficient funds to his account to maintain a net asset value of $200 or
more.
If no certificate has been issued, the shareholder may redeem shares by
sending a written request directly to Phoenix Funds, c/o State Street Bank
and Trust Company, P.O. Box 8301, Boston, MA 02266-8301. The redemption
request must contain the name of the Series, the shareholder(s') account
name(s) and number(s), the number of shares to be redeemed and the
signature(s) of the registered shareholder(s). If the shares are registered
in the names of individuals singly, jointly or as custodian under the Uniform
Gifts to Minors Act or Uniform Transfers to Minors Act and the proceeds of
the redemption do not exceed $50,000 and are to be paid to the registered
owner(s) at the address of record, the signature(s) on the redemption request
need not be guaranteed. Otherwise, the signature(s) must be guaranteed by an
eligible guarantor institution as defined by the Transfer Agent in accordance
with its signature guarantee procedures. Currently such procedures generally
permit guarantees by banks, broker-dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations. When certificates for shares are in the possession
of the shareholder, they must be mailed or presented, duly endorsed in the
full name of the account, with a written request to Equity Planning that the
Trust redeem the shares, with the signature guaranteed, if required, as
described above. In addition, shareholders of the Money Market Series, U.S.
Government Securities Series and High Yield Series may elect to redeem shares
held in any Open Account by check. Signature(s) must also be guaranteed on
any change of address request submitted in conjunction with any redemption
request.
Additional documentation may be required for redemptions by corporations,
partnerships or other organizations, executors, administrators, trustees,
custodians, guardians, or from IRA's or other retirement plans, or if
redemption is requested by anyone but the shareholder(s) of record. To avoid
delay in redemption or transfer, shareholders having questions about specific
requirements should contact the Fund at (800) 243-1574. Redemption requests
will not be honored until all required documents in proper form have been
received.
To the extent consistent with state and federal law, the Trust may make
payment of the redemption price either in cash or in kind. The Trust has
elected to pay in cash all requests for redemption by any shareholder of
record, but may limit such cash in respect to each shareholder during any 90
day period to the lesser of $250,000 or 1% of the net asset value of the
Trust at the beginning of such period. This election has been made pursuant
to Rule 18f-1 under the 1940 Act and is irrevocable while the Rule is in
effect unless the Securities and Exchange Commission, by order, permits its
withdrawal. In case of a redemption in kind, securities delivered in payment
for shares would be valued at the same value assigned to them in computing
the net asset value per share of the Trust. A shareholder receiving such
securities would incur brokerage costs when he sold the securities. A
complete description of redemption procedures is contained in the Statement
of Additional Information.
Telephone Redemptions
Unless a shareholder elects in writing not to participate in the Telephone
Redemption Privilege, shares for which certificates have not been issued may
be redeemed by telephoning (800) 243-1574 and telephone redemptions will also
be accepted on behalf of the shareholder from his or her registered
representative. The Trust and the Transfer Agent will employ reasonable
procedures to confirm that telephone instructions are genuine. Address and
bank account information will be verified, telephone redemption instructions
will be recorded on tape, and all redemptions will be confirmed in writing to
the shareholder. If there has been an address change within the past 60 days,
a telephone redemption will not be authorized. To the extent that procedures
reasonably designed to prevent unauthorized telephone redemptions are not
followed, the Trust and/or the Transfer Agent may be liable for following
telephone instructions for redemption transactions that prove to be
fraudulent. Broker/dealers other than Equity Planning have agreed to bear the
risk of any loss resulting from any unauthorized telephone redemption
instruction from the firm or its registered representatives. However, the
shareholder would bear the risk of loss resulting from instructions entered
by an unauthorized third party that the Trust and/or the Transfer Agent
reasonably believe to be genuine. The Telephone Redemption Privilege may be
modified or terminated at any time without prior notice to shareholders. In
addition, during times of drastic economic or market changes, the telephone
redemption privilege may be difficult to exercise or may be suspended
temporarily and a shareholder should submit a written redemption request, as
described above.
If the amount of the redemption is $500 or more, the proceeds will be wired
to the shareholder's designated U.S. commercial bank account. If the amount
of the redemption is less than $500, the proceeds will be sent by check to
the address of record on the shareholder's account.
Telephone redemption orders received and accepted by Equity Planning, on any
day when Equity Planning is open for business, will be entered at the next
determined net asset value. However, telephone redemption orders received and
accepted by Equity Planning after the close of trading hours on the Exchange
will be executed on the following business
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<PAGE>
day. The proceeds of a telephone redemption will normally be sent on the
first business day following receipt of the redemption request. However, with
respect to the telephone redemption of shares purchased by check, such
requests will only be effected after the Trust has assured itself that good
payment has been collected for the purchase of shares, which may take up to
15 days. This expedited redemption privilege is not available to HR-10, IRA
and 403(b)(7) Plans.
DIVIDENDS, DISTRIBUTIONS AND TAXES
All dividends and distributions with respect to the shares of any class of
any Series will be payable in shares of such class of Series at net asset
value or, at the option of the shareholder, in cash. Any shareholder who
purchases shares of a Series prior to the close of business on the record
date for a dividend or distribution will be entitled to receive such dividend
or distribution. Dividends and distributions (whether received in shares or
in cash) are treated either as ordinary income or long-term capital gains
for Federal income tax purposes.
Any shareholder with an account in any one Series equal to at least $5,000
(or $2,000 in a tax-qualified account) may direct that dividends and
distributions from that account be invested in a single account of one other
Series or in a single account of any other Phoenix Fund. Any such investment
will be made at net asset value and will not be subject to a minimum initial
or subsequent investment amount.
The Balanced Series and the Convertible Series each will distribute its net
investment income to its shareholders on a quarterly basis and net realized
capital gains, if any, to its shareholders on an annual basis.
The Growth Series and the Aggressive Growth Series each will distribute its
net investment income semi-annually and net realized capital gains, if any,
at least annually.
The High Yield Series, and the U.S. Government Securities Series each will
distribute its net investment income to its shareholders on a monthly basis
and net realized capital gains, if any, to its shareholders on an annual
basis.
The net income of the Money Market Series will be declared as dividends
daily. Dividends will be invested or distributed in cash monthly. The net
income of the Money Market Series for Saturdays, Sundays and other days on
which the New York Stock Exchange is closed will be declared as dividends on
the next business day. Each Series is treated as a separate entity for
Federal income tax purposes. Each Series intends to qualify and elect to be
taxed as a "regulated investment company" under the provisions of Subchapter
M of the Internal Revenue Code, as amended (the "Code") and the Trustees
believe that each Series so qualified for the last taxable year. Because each
Series intends to distribute all of its net investment income and net capital
gains to shareholders in accordance with the timing requirements imposed by
the Code, it is not expected that the Series will be required to pay any
federal income or excise taxes.
Distributions, whether received by shareholders in shares or in cash, will
be taxable to them as income or capital gains. Distributions of net realized
long-term capital gains, if designated as such by a Series, are taxable to
shareholders as long-term capital gains, regardless of how long they have
owned shares in the Series. Shareholders who are not subject to tax on their
income will not be required to pay tax on amounts distributed to them.
Written notices will be sent to shareholders following the end of each
calendar year regarding the tax status of all distributions made during each
taxable year.
The foregoing is only a summary of some of the important tax considerations
generally affecting the Series and their shareholders. Shareholders should
consult competent tax advisers regarding specific tax situations.
ADDITIONAL INFORMATION
Organization of the Trust
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
Series and different classes of those Series. Holders of shares of a Series
have equal rights with regard to voting, redemptions, dividends,
distributions, and liquidations with respect to that Series, except that
Class B Shares of any Series, which bear higher distribution fees and,
certain incrementally higher expenses associated with the deferred sales
arrangement, pay correspondingly lower dividends per share than Class A
Shares of the same Series. Shareholders of all Series vote on the election of
Trustees. On matters affecting an individual Series (such as approval of an
investment advisory agreement or a change in fundamental investment policies)
and on matters affecting an individual class (such as approval of matters
relating to a Plan of Distribution for a particular class of shares), a
separate vote of that Series or Class is required. Regular shareholder
meetings are held every third calendar year for the purpose of electing the
Trustees. In addition, the Trustees will call a meeting when at least 10% of
the outstanding shares so request in writing. If the Trustees fail to call a
meeting after being so notified, the Shareholders may call the meeting. The
Trustees will assist the Shareholders by identifying other shareholders or
mailing communications, as required under Section 16(c) of the 1940 Act.
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive
rights or subscription rights. The assets received by the Trust for the issue
or sale of shares of each Series, and any class thereof and all income,
earnings, profits and proceeds thereof, are allocated to such Series, and
Class, respectively, subject only to the rights of creditors, and constitute
the underlying assets of such Series or class. The underlying assets of each
Series are required to be segregated on the books of account, and are to be
charged with the expenses in respect to such Series and with a share of the
general expenses of the Trust. Any general expenses of the Trust not readily
identifiable as belonging to a particular Series or class will be allocated
by or under the direction of the Trustees as they determine fair and
equitable.
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Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable
for debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust and that every written agreement, undertaking or
obligation made or issued by the Trust shall contain a provision to that
effect. The Declaration of Trust provides for indemnification out of the
Trust property for all losses and expenses of any shareholder held personally
liable for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability, which is
considered remote, is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
Additional Inquiries
Inquiries and requests for the Statement of Additional Information, the
Annual Report to Shareholders and the Semi-Annual Report to Shareholders
should be directed to Equity Planning at (800) 243-4361 or 100 Bright Meadow
Boulevard, P.O. Box 2200, Enfield, Connecticut 06083-2200.
APPENDIX
A-1 and P-1 Commercial Paper Ratings
The Money Market Series will only invest in commercial paper which at the
date of investment is rated A-1 by Standard & Poor's Corporation or P-1 by
Moody's Investors Services, Inc., or, if not rated, is issued or guaranteed
by companies which at the date of investment have an outstanding debt issue
rated AA or higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P") has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and
cash flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has a
strong position within the industry. The reliability and quality of
management are unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Services, Inc. ("Moody's"). Among the factors considered by Moody's
in assigning ratings are the following: (1) evaluation of the management of
the issuer; (2) economic evaluation of the issuer's industry or industries
and an appraisal of speculative-type risks which may be inherent in certain
areas; (3) evaluation of the issuer's products in relation to competition and
customer acceptance; (4) liquidity; (5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten years; (7) financial strength of a
parent company and the relationship which exists with the issuer; and (8)
recognition by the management of obligations which may be present or may
arise as a result of public interest questions and preparations to meet such
obligations.
Moody's Investors Service, Inc., Corporate Bond Ratings
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment characteristics
and in fact have speculative characteristics as well.
Ba--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca--Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Standard and Poor's Corporation's Corporate Bond Ratings
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
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A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
category than for bonds in the A category.
BB-B-CCC-CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
D--Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
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BACKUP WITHHOLDING INFORMATION
Step 1. Please make sure that the social security number or taxpayer
identification number (TIN) which appears on the Application complies
with the following guidelines:
<TABLE>
<CAPTION>
Account Type Give Social Security Number or Tax Identification Number of:
- -------------------------------------------------------------------------------------------------------
<S> <C>
Individual Individual
- -------------------------------------------------------------------------------------------------------
Joint (or Joint Tenant) Owner who will be paying tax
- -------------------------------------------------------------------------------------------------------
Uniform Gifts to Minors Minor
- -------------------------------------------------------------------------------------------------------
Legal Guardian Ward, Minor or Incompetent
- -------------------------------------------------------------------------------------------------------
Sole Proprietor Owner of Business (also provide owner's name)
- -------------------------------------------------------------------------------------------------------
Trust, Estate, Pension Plan Trust Trust, Estate, Pension Plan Trust (not personal TIN of fiduciary)
- -------------------------------------------------------------------------------------------------------
Corporation, Partnership,
- -------------------------------------------------------------------------------------------------------
Other Organization Corporation, Partnership, Other Organization
- -------------------------------------------------------------------------------------------------------
Broker/Nominee Broker/Nominee
- -------------------------------------------------------------------------------------------------------
</TABLE>
Step 2. If you do not have a TIN, you must obtain Form SS-5 (Application for
Social Security Number) or Form SS-4 (Application for Employer
Identification Number) from your local Social Security or IRS office
and apply for one. Write "Applied For" in the space on the
application.
Step 3. If you are one of the entities listed below, you are exempt from
backup withholding.
(bullet) A corporation
(bullet) Financial institution
(bullet) Section 501(a) exempt organization (IRA, Corporate
Retirement Plan, 403(b), Keogh)
(bullet) United States or any agency or instrumentality thereof
(bullet) A State, the District of Columbia, a possession of the
United States, or any subdivision or instrumentality thereof
(bullet) International organization or any agency or instrumentality
thereof
(bullet) Registered dealer in securities or commodities registered in
the U.S. or a possession of the U.S.
(bullet) Real estate investment trust
(bullet) Common trust fund operated by a bank under section 584(a)
(bullet) An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1)
(bullet) Regulated Investment Company
If you are in doubt as to whether you are exempt, please contact the Internal
Revenue Service.
Step 4. IRS Penalties--If you do not supply us with your TIN, you will be
subject to an IRS $50 penalty unless your failure is due to
reasonable cause and not willful neglect. If you fail to report
interest, dividend or patronage dividend income on your federal
income tax return, you will be treated as negligent and subject to an
IRS 5% penalty tax on any resulting underpayment of tax unless there
is clear and convincing evidence to the contrary. If you falsify
information on this form or make any other false statement resulting
in no backup withholding on an account which should be subject to a
backup withholding, you may be subject to an IRS $500 penalty and
certain criminal penalties including fines and imprisonment.
This Prospectus sets forth concisely the information about the Phoenix Series
Fund (the "Trust") which you should know before investing. Please read it
carefully and retain it for future reference.
The Trust has filed with the Securities and Exchange Commission a Statement
of Additional Information, dated February 28, 1997. The Statement contains
more detailed information about the Trust and is incorporated into this
Prospectus by reference. You may obtain a free copy of the Statement by
writing the Trust c/o Phoenix Equity Planning Corporation, 100 Bright Meadow,
P.O. Box 2200, Enfield, Connecticut 06083-2200.
Financial information relating to the Trust is contained in the Annual Report
to Shareholders for the year ended October 31, 1996 and is incorporated into
the Statement of Additional Information by reference.
[recycle logo] Printed on recycled paper using soybean ink
<PAGE>
[BACK COVER]
Phoenix Series Fund | BULK RATE MAIL |
PO Box 2200 | U.S. POSTAGE |
Enfield CT 06083-2200 | PAID |
| SPRINGFIELD, MA |
| PERMIT NO. 444 |
[LOGOTYPE] PHOENIX
DUFF & PHELPS
PDP 393 (2/97)
<PAGE>
PHOENIX SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
Statement of Additional Information
February 28, 1997
This Statement of Additional Information is not the Prospectus but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Series Fund (the "Trust"), dated February 28, 1997 and should be read
in conjunction with it. The Trust's Prospectus may be obtained by calling
Phoenix Equity Planning Corporation ("Equity Planning") at (800) 243-4361, or
by writing to Phoenix Funds c/o State Street Bank and Trust Company, P.O. Box
8301, Boston, MA 02266-8301.
TABLE OF CONTENTS*
PAGE
INVESTMENT POLICIES (17) 1
INVESTMENT RESTRICTIONS 7
PERFORMANCE INFORMATION 8
PERFORMANCE COMPARISONS 10
PORTFOLIO TURNOVER 10
PORTFOLIO TRANSACTIONS AND BROKERAGE 10
THE INVESTMENT ADVISER (25) 11
NET ASSET VALUE (33) 13
PURCHASE OF SHARES (28) 13
Alternative Purchase Arrangements 14
Purchases of Shares of the Money Market Series 15
SHAREHOLDER SERVICES 15
HOW TO REDEEM SHARES (34) 17
DIVIDENDS, DISTRIBUTIONS AND TAXES (35) 19
THE DISTRIBUTOR AND DISTRIBUTION PLANS (26) 20
MANAGEMENT OF THE TRUST (25) 22
OTHER INFORMATION 29
* Numbers in parenthesis are cross-references to related sections
of the Prospectus.
Customer Service: (800) 243-1574
Sales Information: (800) 243-4361
Telephone Orders/Exchanges: (800) 367-5877
Telecommunication Device TTY: (800) 243-1926
PDP427B (2/97)
<PAGE>
INVESTMENT POLICIES
The investment objectives and policies of each Series are described in the
"Investment Objectives and Policies" section of the Prospectus. The following
specific policies supplement the information contained in that section of the
Prospectus.
Money Market Instruments. Certain money market instruments used extensively
by the Money Market Fund Series are described below. They may also be used by
the other Series except U.S. Government Securities Fund Series to a very
limited extent (to invest otherwise idle cash) or on a temporary basis (for
defensive purposes).
Repurchase Agreements. Repurchase Agreements are agreements by which a
Series purchases a security and obtains a simultaneous commitment from the
seller (a member bank of the Federal Reserve System or, to the extent
permitted by the Investment Company Act of 1940, a recognized securities
dealer) that the seller will repurchase the security at an agreed upon price
and date. The resale price is in excess of the purchase price and reflects an
agreed upon market rate unrelated to the coupon rate on the purchased
security.
A repurchase transaction is usually accomplished either by crediting the
amount of securities purchased to the account of the custodian of the Trust
maintained in a central depository of book-entry system or by physical
delivery of the securities to the Trust's custodian in return for delivery of
the purchase price to the seller. Repurchase transactions are intended to be
short-term transactions with the seller repurchasing the securities, usually
within seven days.
Even though repurchase transactions usually do not impose market risks on
the purchasing Series, if the seller of the repurchase agreement defaults and
does not repurchase the underlying securities, the Series might incur a loss
if the value of the underlying securities declines, and disposition costs may
be incurred in connection with liquidating the underlying securities. In
addition, if bankruptcy proceedings are commenced regarding the seller,
realization upon the underlying securities may be delayed or limited, and a
loss may be incurred if the underlying securities decline in value.
Certificates of Deposit. Certificates of deposit are generally short-term,
interest-bearing negotiable certificates issued by banks or savings and loan
associations against funds deposited in the issuing institution.
Time Deposits. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which
a negotiable certificate is not received.
Banker's Acceptances. A bankers' acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction (to finance the import, export, transfer or storage of
goods). The borrower, as well as the bank, is liable for payment, and the
bank unconditionally guarantees to pay the draft at its face amount on the
maturity date. Most acceptances have maturities of six months or less and are
traded in secondary markets prior to maturity.
Commercial Paper. Commercial paper refers to short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount basis and has a maturity at
the time of issuance not exceeding nine months.
Corporate Debt Securities. Corporate debt securities with a remaining
maturity of less than one year tend to become extremely liquid and are traded
as money market securities.
U.S. Government Obligations. Securities issued or guaranteed as to principal
and interest by the United States Government include a variety of Treasury
securities, which differ only in their interest rates, maturities, and times
of issuance. Treasury bills have maturities of one year or less. Treasury
notes have maturities of one to ten years, and Treasury bonds generally have
maturities of greater than ten years.
Agencies of the United States Government which issue or guarantee
obligations include, among others, Export-Import Banks of the United States,
Farmers Home Administration, Federal Housing Administration, Government
National Mortgage Association, Maritime Administration, Small Business
Administration and The Tennessee Valley Authority. Obligations of
instrumentalities of the United States Government include securities issued
or guaranteed by, among others, the Federal National Mortgage Association,
Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal
Intermediate Credit Banks, Banks for Cooperatives, and the U.S. Postal
Service. Some of these securities are supported by the full faith and credit
of the U.S. Government; others are supported by the right of the issuer to
borrow from the Treasury, while still others are supported only by the credit
of the instrumentality. The U.S. Government Securities Series will invest
primarily in securities which are supported by the full faith and credit of
the U.S. Government.
Securities and Index Options. All Series, except the Money Market Series and
U.S. Government Securities Series, may write covered call options and
purchase call and put options. Options and the related risks are summarized
below.
Writing and Purchasing Options. The exercise price of a call option written
by a Series may be below, equal to or above the current market value of the
underlying security or securities index at the time the option is written.
Call options written by a Series normally will have expiration dates between
three and nine months from the date written. During the option period a
Series
1
<PAGE>
may be assigned an exercise notice by the broker-dealer through which the
call option was sold, requiring the Series to deliver the underlying security
(or cash in the case of securities index calls) against payment of the
exercise price. This obligation is terminated upon the expiration of the
option period or at such earlier time as the Series effects a closing
purchase transaction. A closing purchase transaction cannot be effected with
respect to an option once the Series has received an exercise notice.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total
dollar value per contract of each point between the exercise price of the
option and the current level of the underlying index. A multiplier of 100
means that a one-point difference will yield $100. Options on different
indices may have different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices,
Computer/Business Equipment Index, Major Market Index, Amex Market Value
Index, Computer Technology Index, Oil and Gas Index, NYSE Options Index,
Gaming/Hotel Index, Telephone Index, Transportation Index, Technology Index,
and Gold/ Silver Index. A Series may write call options and purchase call and
put options on any other indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a
profit on an outstanding call option written by a Series, to prevent an
underlying security from being called, or to enable a Series to write another
call option with either a different exercise price or expiration date or
both. A Series may realize a net gain or loss from a closing purchase
transaction, depending upon whether the amount of the premium received on the
call option is more or less than the cost of effecting the closing purchase
transaction. If a call option written by a Series expires unexercised, a
Series will realize a gain in the amount of the premium on the option less
the commission paid.
The option activities of a Series may increase its portfolio turnover rate
and the amount of brokerage commissions paid. A Series will pay a commission
each time it purchases or sells a security in connection with the exercise of
an option. These commissions may be higher than those which would apply to
purchases and sales of securities directly.
Limitations on Options. A Series may write call options only if they are
covered and if they remain covered so long as a Series is obligated as a
writer. If a Series writes a call option on an individual security, a Series
will own the underlying security at all times during the option period. A
Series will write call options on indices only to hedge in an economically
appropriate way portfolio securities which are not otherwise hedged with
options or financial futures contracts. Call options on securities indices
written by a Series will be "covered" by identifying the specific portfolio
securities being hedged.
To secure the obligation to deliver the underlying security, the writer of a
covered call option on an individual security is required to deposit the
underlying security or other assets in escrow with the broker in accordance
with clearing corporation and exchange rules. In the case of an index call
option written by a Series, a Series will be required to deposit qualified
securities. A "qualified security" is a security against which a Series has
not written a call option and which has not been hedged by a Series by the
sale of a financial futures contract. If at the close of business on any day
the market value of the qualified securities falls below 100% of the current
index value times the multiplier times the number of contracts, a Series will
deposit an amount of cash or liquid assets equal in value to the difference.
In addition, when a Series writes a call on an index which is "in-the-money"
at the time the call is written, a Series will segregate with its custodian
bank cash or liquid assets equal in value to the amount by which the call is
"in-the-money" times the multiplier times the number of contracts. Any amount
segregated may be applied to a Series' obligation to segregate additional
amounts in the event that the market value of the qualified securities falls
below 100% of the current index value times the multiplier times the number
of contracts.
A Series may invest up to 2% of its total assets in exchange-traded call and
put options. A Series may sell a call option or a put option which it has
previously purchased prior to the purchase (in the case of a call) or the
sale (in the case of a put) of the underlying security. Any such sale of a
call option or a put option would result in a net gain or loss, depending on
whether the amount received on the sale is more or less than the premium and
other transaction costs paid.
In connection with a Series qualifying as a regulated investment company
under the Internal Revenue Code, other restrictions on a Series' ability to
enter into option transactions may apply from time to time. See "Dividends,
Distributions and Taxes."
Risks Relating to Options. During the option period, the writer of a call
option has, in return for the premium received on the option, given up the
opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but has retained the risk
of loss should the price of the underlying security decline. The writer has
no control over the time when it may be required to fulfill its obligation as
a writer of the option.
The risk of purchasing a call option or a put option is that a Series may
lose the premium it paid plus transaction costs. If a Series does not
exercise the option and is unable to close out the position prior to
expiration of the option, it will lose its entire investment.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although a Series will
write and purchase options only when the Adviser believes that a liquid
secondary market will exist for
2
<PAGE>
options of the same series, there can be no assurance that a liquid secondary
market will exist for a particular option at a particular time and that a
Series, if it so desires, can close out its position by effecting a closing
transaction. If the writer of a covered call option is unable to effect a
closing purchase transaction, it cannot sell the underlying security until
the option expires or the option is exercised. Accordingly, a covered call
writer may not be able to sell the underlying security at a time when it
might otherwise be advantageous to do so.
Possible reasons for the absence of a liquid secondary market on an exchange
include the following: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading
halts, suspensions or other restrictions imposed with respect to particular
classes or series of options or underlying securities; (iv) inadequacy of the
facilities of an exchange or the clearing corporation to handle trading
volume; and (v) a decision by one or more exchanges to discontinue the
trading of options or impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single
investor acting alone or in concert with others (regardless of whether such
options are written on the same or different exchanges or are held or written
on one or more accounts or through one or more brokers). An exchange may
order the liquidation of positions found to be in violation of these limits
and it may impose other sanctions or restrictions. The Adviser believes that
the position limits established by the exchanges will not have any adverse
impact upon a Series or all of the Series, in the aggregate.
Risks of Options on Indices. Because the value of an index option depends
upon movements in the level of the index rather than movements in the price
of a particular security, whether a Series will realize a gain or loss on the
purchase or sale of an option on an index depends upon movements in the level
of prices in the market generally or in an industry or market segment rather
than upon movements in the price of an individual security. Accordingly,
successful use by a Series of options on indices will be subject to the
Adviser's ability to predict correctly movements in the direction of the
market generally or in the direction of a particular industry. This requires
different skills and techniques than predicting changes in the prices of
individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number
of securities included in the index. If this occurred, a Series would not be
able to close out options which it had written or purchased and, if
restrictions on exercise were imposed, might be unable to exercise an option
it purchased, which would result in substantial losses to a Series. However,
it is the Trust's policy to write or purchase options only on indices which
include a sufficient number of securities so that the likelihood of a trading
halt in the index is minimized.
Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance
and, unlike call writing on portfolio securities, cannot provide in advance
for its potential settlement obligation by holding the underlying securities.
Consequently, a Series will write call options on indices only subject to the
limitations described above.
Price movements in securities in a Series' portfolio will not correlate
perfectly with movements in the level of the index and, therefore, a Series
bears the risk that the price of the securities held by the Series may not
increase as much as the level of the index. In this event, the Series would
bear a loss on the call which would not be completely offset by movements in
the prices of a Series' portfolio securities. It is also possible that the
index may rise when the value of a Series' portfolio securities does not. If
this occurred, the Series would experience a loss on the call which would not
be offset by an increase in the value of its portfolio and might also
experience a loss in the market value of portfolio securities.
Unless a Series has other liquid assets which are sufficient to satisfy the
exercise of a call on an index, a Series will be required to liquidate
portfolio securities in order to satisfy the exercise. Because an exercise
must be settled within hours after receiving the notice of exercise, if a
Series fails to anticipate an exercise, it may have to borrow from a bank (in
an amount not exceeding 10% of a Series' total assets) pending settlement of
the sale of securities in its portfolio and pay interest on such borrowing.
When a Series has written a call on an index, there is also a risk that the
market may decline between the time a Series has the call exercised against
it, at a price which is fixed as of the closing level of the index on the
date of exercise, and the time a Series is able to sell securities in its
portfolio. As with options on portfolio securities, a Series will not learn
that a call has been exercised until the day following the exercise date but,
unlike a call on a portfolio security where a Series would be able to deliver
the underlying security in settlement, a Series may have to sell part of its
portfolio securities in order to make settlement in cash, and the price of
such securities might decline before they could be sold.
If a Series exercises a put option on an index which it has purchased before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If this
change causes the exercised option to fall "out-of-the-money" a Series will
be required to pay the difference between the closing index value and the
exercise price of the option (multiplied by the applicable multiplier) to the
assigned writer. Although a Series may be able to minimize this risk by
withholding exercise instructions until just before the daily cutoff time or
by selling rather than exercising an option
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<PAGE>
when the index level is close to the exercise price, it may not be possible
to eliminate this risk entirely because the cutoff times for index options
may be earlier than those fixed for other types of options and may occur
before definitive closing index values are announced.
Financial Futures Contracts and Related Options. All Series except the Money
Market Series and the U.S. Government Securities Series may use financial
futures contracts and related options to hedge against changes in the market
value of its portfolio securities or securities which it intends to purchase.
Hedging is accomplished when an investor takes a position in the futures
market opposite to his cash market position. There are two types of hedges,
long (or buying) and short (or selling) hedges. Historically, prices in the
futures market have tended to move in concert with cash market prices, and
prices in the futures market have maintained a fairly predictable
relationship to prices in the cash market. Thus, a decline in the market
value of securities in a Series' portfolio may be protected against to a
considerable extent by gains realized on futures contracts sales. Similarly,
it is possible to protect against an increase in the market price of
securities which a Series may wish to purchase in the future by purchasing
futures contracts.
A Series may purchase or sell any financial futures contracts which are
traded on a recognized exchange or board of trade. Financial futures
contracts consist of interest rate futures contracts and securities index
futures contracts. A public market presently exists in interest rate futures
contracts covering long-term U.S. Treasury bonds, U.S. Treasury notes,
three-month U.S. Treasury bills and GNMA certificates. Securities index
futures contracts are currently traded with respect to the Standard & Poor's
500 Composite Stock Price Index and such other broad-based stock market
indices as the New York Stock Exchange Composite Stock Index and the Value
Line Composite Stock Price Index. A clearing corporation associated with the
exchange or board of trade on which a financial futures contract trades
assumes responsibility for the completion of transactions and also guarantees
that open futures contracts will be performed.
In contrast to the situation when a Series purchases or sells a security, no
security is delivered or received by a Series upon the purchase or sale of a
financial futures contract. Initially, a Series will be required to deposit
in a segregated account with its custodian bank any asset, including equity
securities and non-investment grade debt so long as the asset is liquid,
unencumbered and marked to market daily. This amount is known as initial
margin and is in the nature of a performance bond or good faith deposit on
the contract. The current initial margin deposit required per contract is
approximately 5% of the contract amount. Brokers may establish deposit
requirements higher than this minimum. Subsequent payments, called variation
margin, will be made to and from the account on a daily basis as the price of
the futures contract fluctuates. This process is known as marking to market.
The writer of an option on a futures contract is required to deposit margin
pursuant to requirements similar to those applicable to futures contracts.
Upon exercise of an option on a futures contract, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call,
or is less than, in the case of a put, the exercise price of the option on
the futures contract.
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out
before the settlement date without the making or taking of delivery. Closing
out is accomplished by effecting an offsetting transaction. A futures
contract sale is closed out by effecting a futures contract purchase for the
same aggregate amount of securities and the same delivery date. If the sale
price exceeds the offsetting purchase price, the seller immediately would be
paid the difference and would realize a gain. If the offsetting purchase
price exceeds the sale price, the seller immediately would pay the difference
and would realize a loss. Similarly, a futures contract purchase is closed
out by effecting a futures contract sale for the same securities and the same
delivery date. If the offsetting sale price exceeds the purchase price, the
purchaser would realize a gain, whereas if the purchase price exceeds the
offsetting sale price, the purchaser would realize a loss.
A Series will pay commissions on financial futures contracts and related
options transactions. These commissions may be higher than those which would
apply to purchases and sales of securities directly.
Limitations on Futures Contracts and Related Options. A Series may not
engage in transactions in financial futures contracts or related options for
speculative purposes but only as a hedge against anticipated changes in the
market value of its portfolio securities or securities which it intends to
purchase. A Series may not purchase or sell financial futures contracts or
related options if, immediately thereafter, the sum of the amount of initial
margin deposits on a Series' existing futures and related options positions
and the premiums paid for related options would exceed 2% of the market value
of a Series' total assets after taking into account unrealized profits and
losses on any such contracts. At the time of purchase of a futures contract
or a call option on a futures contract, any asset, including equity
securities and non-investment grade debt so long as the asset is liquid,
unencumbered and marked to market daily, equal to the market value of the
futures contract minus a Series' initial margin deposit with respect thereto
will be deposited in a segregated account with a Series' custodian bank to
collateralize fully the position and thereby ensure that it is not leveraged.
The extent to which a Series may enter into financial futures contracts and
related options also may be limited by the requirements of the Internal
Revenue Code of 1954 for qualification as a regulated investment company. See
"Dividends, Distributions and Taxes."
4
<PAGE>
Risks Relating to Futures Contracts and Related Options. Positions in
futures contracts and related options may be closed out only on an exchange
which provides a secondary market for such contracts or options. A Series
will enter into an option or futures position only if there appears to be a
liquid secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular option or futures contract at
any specific time. Thus, it may not be possible to close out a futures or
related option position. In the case of a futures position, in the event of
adverse price movements a Series would continue to be required to make daily
margin payments. In this situation, if a Series has insufficient cash to meet
daily margin requirements it may have to sell portfolio securities at a time
when it may be disadvantageous to do so. In addition, a Series may be
required to take or make delivery of the securities underlying the futures
contracts it holds. The inability to close out futures positions also could
have an adverse impact on a Series' ability to hedge its portfolio
effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse
movement in market prices, it can also preclude a hedger's opportunity to
benefit from a favorable market movement. In addition, investing in futures
contracts and options on futures contracts will cause a Series to incur
additional brokerage commissions and may cause an increase in a Series'
portfolio turnover rate.
The successful use of futures contracts and related options also depends on
the ability of the Adviser to forecast correctly the direction and extent of
market movements within a given time frame. To the extent market prices
remain stable during the period a futures contract or option is held by a
Series or such prices move in a direction opposite to that anticipated, a
Series may realize a loss on the hedging transaction which is not offset by
an increase in the value of its portfolio securities. As a result, a Series'
return for the period may be less than if it had not engaged in the hedging
transaction.
Utilization of futures contracts by a Series involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in
the price of the securities which are being hedged. If the price of the
futures contract moves more or less than the price of the securities being
hedged, a Series will experience a gain or loss which will not be completely
offset by movements in the price of the securities. It is possible that,
where a Series has sold futures contracts to hedge its portfolio against
decline in the market, the market may advance and the value of securities
held in a Series' portfolio may decline. If this occurred, a Series would
lose money on the futures contract and would also experience a decline in
value in its portfolio securities. Where futures are purchased to hedge
against a possible increase in the prices of securities before a Series is
able to invest its cash (or cash equivalents) in securities (or options) in
an orderly fashion, it is possible that the market may decline; if a Series
then determines not to invest in securities (or options) at that time because
of concern as to possible further market decline or for other reasons, a
Series will realize a loss on the futures that would not be offset by a
reduction in the price of the securities purchased.
The market prices of futures contracts may be affected if participants in
the futures market elect to close out their contracts through off-setting
transactions rather than to meet margin deposit requirements. In such case,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities rather
than to engage in closing transactions due to the resultant reduction in the
liquidity of the futures market. In addition, due to the fact that, from the
point of view of speculators, the deposit requirements in the futures markets
are less onerous than margin requirements in the cash market, increased
participation by speculators in the futures market could cause temporary
price distortions. Due to the possibility of price distortions in the futures
market and because of the imperfect correlation between movements in the
prices of securities and movements in the prices of futures contracts, a
correct forecast of market trends may still not result in a successful
hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put
or call options on futures contracts involves less potential risk for a
Series because the maximum amount at risk is the premium paid for the options
plus transaction costs. However, there may be circumstances when the purchase
of an option on a futures contract would result in a loss to a Series while
the purchase or sale of the futures contract would not have resulted in a
loss, such as when there is no movement in the price of the underlying
securities.
Leverage. The Trust may from time to time increase the Convertible Series'
ownership or the Aggressive Growth Series' ownership of securities holdings
above the amounts otherwise possible by borrowing from banks at fixed amounts
of interest and investing the borrowed funds. The Trust will borrow only from
banks, and only if immediately after such borrowing the value of the assets
of a Series (including the amount borrowed) less its liabilities (not
including any borrowings) is at least three times the amount of funds
borrowed for investment purposes. The effect of this provision is to permit
the Trust to borrow up to 25% of the total assets of a Series, including the
proceeds of any such borrowings. However, the amount of the borrowings will
be dependent upon the availability and cost of credit from time to time. If,
due to market fluctuations or other reasons, the value of such Series' assets
computed as provided above becomes at any time less than three times the
amount of the borrowings for investment purposes, the Trust, within three
business days, is required to reduce bank debt to the extent necessary to
meet the required 300% asset coverage.
Interest on money borrowed will be an expense of the Series with respect to
which the borrowing has been made. Because such expense would not otherwise
be incurred, the net investment income of such Series is not expected to be
as high as it otherwise would be during periods when borrowings for
investment purposes are substantial.
5
<PAGE>
Bank borrowings for investment purposes must be obtained on an unsecured
basis. Any such borrowing must also be made subject to an agreement by the
lender that any recourse is limited to the assets of the Series with respect
to which the borrowing has been made.
Any investment gains made with the additional monies borrowed in excess of
interest paid will cause the net asset value of a Series' shares to rise
faster than would otherwise be the case. On the other hand, if the investment
performance of the additional securities purchased fails to cover their cost
(including any interest paid on the monies borrowed) to the Series, the net
asset value of the Series will decrease faster than would otherwise be the
case.
Foreign Securities. Each of the Series, except the Money Market Series and
the U.S. Government Securities Series may purchase foreign securities,
including those issued by foreign branches of U.S. banks. In any event, such
investments in foreign securities will be limited to 25% of the total net
asset value of the Balanced Series, Convertible Series and Growth Series. The
Aggressive Growth Series may invest up to 10% of its total net asset value in
foreign securities and the High Yield Series may invest up to 35% of its
total net asset value in foreign securities. Investments in foreign
securities, particularly those of non-governmental issuers, involve
considerations which are not ordinarily associated with investing in domestic
issues. These considerations include changes in currency rates, currency
exchange control regulations, the possibility of expropriation, the
unavailability of financial information, the difficulty of interpreting
financial information prepared under foreign securities markets, the impact
of political, social or diplomatic developments, difficulties in invoking
legal process abroad and the difficulty of assessing economic trends in
foreign countries.
The Trust may use a foreign custodian in connection with its purchases of
foreign securities and may maintain cash and cash equivalents in the care of
a foreign custodian. The amount of cash or cash equivalents maintained in the
care of eligible foreign custodians will be limited to an amount reasonably
necessary to effect the Trust's foreign securities transactions. The use of a
foreign custodian invokes considerations which are not ordinarily associated
with domestic custodians. These considerations include the possibility of
expropriations, restricted access to books and records of the foreign
custodian, inability to recover assets that are lost while under the control
of the foreign custodian, and the impact of political, social or diplomatic
developments.
Mortgage-Backed Securities. Securities issued by Government National
Mortgage Association ("GNMA") are, and securities issued by Federal National
Mortgage Association ("FNMA") include, mortgage-backed securities
representing part ownership of a pool of mortgage loans.
In the case of GNMA, the mortgages are insured by the Federal Housing
Administration or Farmers' Home Administration or guaranteed by the Veteran's
Administration. In the case of FNMA, the mortgages are not insured by an
agency of the U.S. Government.
The prices of mortgage-backed securities are inversely affected by changes
in interest rates and, therefore, are subject to the risk of market price
fluctuations. Mortgage-backed securities issued by GNMA and FNMA currently
offer yields which are higher than those available on other securities of the
U.S. Government and its agencies and instrumentalities, but may be less
effective than these other securities as a means of "locking in" attractive
long-term interest rates. This is a result of the need to reinvest prepayment
of principal and the possibility of significant unscheduled prepayments
resulting from declines in mortgage interest rates. As a result, these
securities have less potential for capital appreciation during periods of
declining interest rates than other investments of comparable risk of decline
in value during periods of rising rates.
Lower Rated Convertible Securities. Convertible securities which are not
rated in the four highest categories, in which the Convertible Series may
invest, are predominantly speculative with respect to the issuer's capacity
to repay principal and interest and may include issues on which the issuer
defaults.
Nonpublicly Offered Debt Securities. The High Yield Series may invest up to
15% of the value of its total assets in debt securities that cannot be sold
in the public market without first being registered with the Securities and
Exchange Commission but which the Adviser deems to be "liquid."
Deferred Coupon Debt Securities. The High Yield Series may invest in debt
obligations that do not make any interest payments for a specified period of
time prior to maturity ("deferred coupon" obligations). Because the deferred
coupon bonds do not make interest payments for a certain period of time, they
are purchased by the Series at a deep discount and their value fluctuates
more in response to interest rate changes than does the value of debt
obligations that make current interest payments. The degree of fluctuation
with interest rate changes is greater when the deferred period is longer.
Therefore, there is a risk that the value of the Series shares may decline
more as a result of an increase in interest rates than would be the case if
the Series did not invest in deferred coupon bonds.
Lending Portfolio Securities. In order to increase its return on
investments, the Trust may make loans of the portfolio securities of any
Series, as long as the market value of the loaned securities does not exceed
25% of the value of that Series' total assets. Loans of portfolio securities
will always be fully collateralized at no less than 100% of the market value
of the loaned securities (as marked to market daily) and made only to
borrowers considered to be creditworthy. Lending portfolio securities
involves a risk of delay in the recovery of the loaned securities and
possibly the loss of the collateral if the borrower fails financially.
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Loan Participations. The High Yield Series may invest up to 5% of its net
assets, determined at the time of investment, in loan participations. A loan
participation agreement involves the purchase of a share of a loan made by a
bank to a company in return for a corresponding share of the borrower's
principal and interest payments. Loan participations of the type in which the
Series may invest include interests in both secured and unsecured corporate
loans. In the event that a corporate borrower failed to pay its scheduled
interest or principal payments on participations held by the Series, the
market value of the affected participation would decline, resulting in a loss
of value of such investment to the Series. Accordingly, such participations
are speculative and may result in the income level and net assets of the
Series being reduced. Moreover, loan participation agreements generally limit
the right of a participant to resell its interest in the loan to a third
party and, as a result, loan participations will be deemed by the Trust to be
illiquid investments.
INVESTMENT RESTRICTIONS
The Trust's fundamental policies as they affect any Series cannot be changed
without the approval vote of a majority of the outstanding shares of such
Series, which is the lesser of (i) 67% or more of the voting securities of
such Series present at a meeting if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by
proxy or (ii) more than 50% of the outstanding voting securities of such
Series. A proposed change in fundamental policy or investment objective will
be deemed to have been effectively acted upon with respect to any Series if a
majority of the outstanding voting securities of that Series votes for the
approval of the proposal as provided above, notwithstanding (1) that such
matter has not been approved by a majority of the outstanding securities of
any other Series affected by such matter and (2) that such matter has not
been approved by a majority of the outstanding voting securities of the
Trust.
The following investment restrictions are fundamental policies of the Trust
with respect to all Series and may not be changed except as described above.
The Trust may not:
1. Purchase for any Series securities of any issuer, other than obligations
issued or guaranteed as to principal and interest by the United States
Government or its agencies or instrumentalities, if immediately thereafter
(i) more than 5% of such Series' total assets (taken at market value) would
be invested in the securities of such issuer or (ii) more than 10% of the
outstanding securities of any class of such issuer would be held by such
Series or by all Series of the Trust in the aggregate.
2. Concentrate the portfolio investments of any Series in any one industry.
To comply with this restriction, no security may be purchased for a Series if
such purchase would cause the value of the aggregate investment of such
Series in any one industry to exceed 25% of that Series' total assets (taken
at market value). However, the Money Market Series may invest more than 25%
of its assets in the domestic banking industry.
3. Act as securities underwriter except as it technically may be deemed to
be an underwriter under the Securities Act of 1933 in selling a portfolio
security.
4. Purchase securities on margin, but it may obtain short-term credit as may
be necessary for the clearance of purchases and sales of securities.
5. Make short sales of securities or maintain a short position.
6. Make cash loans, except that the Trust may (i) purchase bonds, notes,
debentures or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not, and (ii) enter
into repurchase agreements, provided that no more than 10% of any Series' net
assets (taken at market value) may be subject to repurchase agreements
maturing in more than seven days.
7. Make securities loans, except that the Trust may make loans of the
portfolio securities of any Series, provided that the market value of the
securities subject to any such loans does not exceed 25% of the value of the
total assets (taken at market value) of such Series.
8. Make investments in real estate or commodities or commodity contracts,
although (i) the Trust may purchase securities of issuers which deal in real
estate or commodities and may purchase securities which are secured by
interests in real estate, specifically, securities issued by real estate
investment trusts and (ii) any Series (excluding the Money Market Series and
the U.S. Government Securities Series) may engage in transactions in
financial futures contracts and related options, provided that the sum of the
initial margin deposits on such Series' existing futures positions and the
premiums paid for related options would not exceed in the aggregate 2% of
such Series' total assets.
9. Invest in oil, gas or other mineral exploration or development programs,
although the Trust may purchase securities of issuers which engage in whole
or in part in such activities.
10. Invest in puts, calls, straddles and any combination thereof, except
that any Series (excluding the Money Market Series and the U.S. Government
Securities Series) may (i) write (sell) exchange-traded covered call options
on portfolio securities and
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on securities indices and engage in related closing purchase transactions and
(ii) invest up to 2% of its total assets in exchange-traded call and put
options on securities and securities indices.
11. Purchase securities of companies for the purpose of exercising
management or control.
12. Participate in a joint or joint and several trading account in
securities.
13. Purchase securities of any other investment company except in the open
market at customary brokers' commission rates or as a part of a plan of
merger or consolidation.
14. Purchase for any Series securities of any issuer which together with
predecessors has a record of less than three years' continuous operation, if
as a result more than 5% of the total net assets (taken at market value) of
such Series would then be invested in such securities.
15. Purchase or retain securities of any issuer if any officer or Trustee of
the Trust, or officer or director of its investment adviser, owns
beneficially more than 1/2 of 1% of the outstanding securities or shares, or
both, of such issuer and all such persons owning more than 1/2 of 1% of such
securities or shares together own beneficially more than 5% of such
securities or shares.
16. Borrow money, except that the Trust may (i) borrow money for any Series
for temporary administrative purposes provided that any such borrowing does
not exceed 10% of the value of the total assets (taken at market value) of
such Series and (ii) borrow money for any Series for investment purposes,
provided that any such borrowing for investment purposes with respect to any
such Series is (a) authorized by the Trustees prior to any public
distribution of the shares of such Series or is authorized by the
shareholders of such Series thereafter, (b) is limited to 25% of the value of
the total assets (taken at market value and including any borrowings) of such
Series, and (c) is subject to an agreement by the lender that any recourse is
limited to the assets of that Series with respect to which the borrowing has
been made. With the exception of the Convertible Series and the Aggressive
Growth Series, no Series may invest in portfolio securities while the amount
of borrowing of the Series exceeds 5% of the total assets of such Series.
Borrowing for investment purposes has not been authorized for any Series
(except the Convertible Series and the Aggressive Growth Series) whose shares
are offered by the Trust.
17. Pledge, mortgage or hypothecate the assets of any Series to an extent
greater than 10% of the total assets (taken at market value) of such Series
to secure borrowings made pursuant to the provisions of item 16 above.
18. Issue senior securities as defined in the Investment Company Act of
1940, except to the extent that it is permissible to (a) borrow monthly from
banks pursuant to the Trust's investment restrictions regarding the borrowing
of money, and (b) enter into transactions involving forward foreign currency
contracts, foreign currency contracts and options thereon, as described in
the Trust's Prospectus and this Statement of Additional Information.
The Trust may purchase illiquid securities including repurchase agreements
providing for settlement more than seven days after notice and restricted
securities (securities that must be registered with the Securities and
Exchange Commission before they can be sold to the public) deemed to be
illiquid provided such securities will not constitute more than 15% (or 10%
in the case of the Money Market Series) of each Series' net assets. The Board
of Trustees, or the Adviser acting at its direction, values these securities,
taking into consideration quotations available from broker-dealers and
pricing services and other information deemed relevant.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from
a change in values of portfolio securities or amount of net assets shall not
be considered a violation of the restrictions.
PERFORMANCE INFORMATION
Performance information for each Series (and Class of Series) may appear in
advertisements, sales literature, or reports to shareholders or prospective
shareholders. Performance information in advertisements and sales literature
may be expressed as yield and effective yield of the Money Market Series, as
yield of the other Series offered, or any Class of such Series, and as total
return of any Series or Class thereof. Current yield for the Money Market
Series will be based on the change in the value of a hypothetical investment
(exclusive of capital changes) over a particular 7-day period, less a
hypothetical charge reflecting deductions for expenses during the period (the
"base period"), and stated as a percentage of the investment at the start of
the base period (the "base period return"). The base period return is then
annualized by multiplying by 365/7, with the resulting yield figure carried
to at least the nearest hundredth of one percent. "Effective yield" for the
Money Market Series (and each Class of such Series) assumes that all
dividends received during an annual period have been reinvested. Calculation
of "effective yield" begins with the same "base period return" used in the
calculation of yield, which is then annualized to reflect weekly compounding
pursuant to the following formula:
Effective Yield = [(Base Period Return) + 1) 365/7] -1
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For the 7-day period ending October 31, 1996, the yield of the Class A
Shares of the Money Market Series was 4.54% and the effective yield of the
Class A Shares of this Series was 4.64%.
Quotations of yield for the High Yield, Convertible, U.S. Government
Securities and Balanced Series will be based on all investment income per
share earned during a particular 30-day period (including dividends and
interest), less expenses (including pro rata Trust expenses and expenses
applicable to each particular Series or Class of a Series) accrued during the
period ("net investment income"), and are computed by dividing net investment
income by the value of a share of the Series or Class on the last day of the
period, according to the following formula:
YIELD = 2[((a-b))+ 1)6 -1]
---
cd
where a = dividends and interest earned during the period by the Series.
b = expenses accrued for the period (net of any reimbursements),
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends, and
d = the maximum offering price per share on the last day of the
period.
For the period ended October 31, 1996, the yield of the Class A Shares of
the Series were as follows: 8.12% for the High Yield Series; 3.30% for the
Convertible Series; 4.97% for the U.S. Government Securities Series; and
2.15% for the Balanced Series. For the same period, the yield of the Class B
Shares of the Series were as follows: High Yield 7.78%; Convertible 2.72%;
U.S. Government 4.47%; and Balanced 1.52%.
As summarized in the Prospectus under the heading "Performance History",
total return is a measure of the change in value of an investment in a
Series, or Class thereof, over the period covered. The formula for total
return used herein includes four steps: (1) adding to the total number of
shares purchased by a hypothetical $1,000 investment in the Series or a Class
of Series; (2) calculating the value of the hypothetical initial investment
of $1,000 as of the end of the period by multiplying the total number of
shares of a class owned at the end of the period by the net asset value on
the last trading day of the period; (3) assuming maximum sales charge
deducted and reinvestment of all dividends at net asset value and (4)
dividing this account value for the hypothetical investor by the initial
$1,000 investment. Total return will be calculated for one year, five years
and ten years or the time period during which the registration statement
including the Series was in effect if a Series has not been in existence for
at least ten years.
The manner in which total return will be calculated for public use is
described above. The following table summarizes the calculation of total
return for each Series, where applicable, through October 31, 1996.
AVERAGE ANNUAL TOTAL RETURN AS OF OCTOBER 31, 1996
PERIODS ENDED
-------------------------------------
10 YEAR OR
SERIES 1 YEAR 5 YEAR SINCE INCEPTION*
- --------------------------------------- -------- -------- -----------------
BALANCED (CLASS A) 6.71% 7.54% 10.00%
BALANCED (CLASS B) 6.24% N/A 10.18%
CONVERTIBLE (CLASS A) 8.15% 8.74% 9.23%
CONVERTIBLE (CLASS B) 7.72% N/A 9.14%
GROWTH (CLASS A) 10.82% 9.94% 11.97%
GROWTH (CLASS B) 10.48% N/A 17.18%
AGGRESSIVE GROWTH (CLASS A) 11.87% 13.16% 12.18%
AGGRESSIVE GROWTH (CLASS B) 11.52% N/A 21.39%
HIGH YIELD (CLASS A) 10.41% 11.33% 9.09%
HIGH YIELD (CLASS B) 9.88% N/A 5.10%
U.S. GOVERNMENT SECURITIES (CLASS A) -0.90% 5.86% 6.40%
U.S. GOVERNMENT SECURITIES (CLASS B) -1.55% N/A 3.70%
* Since inception, July 15, 1994 for Class B Balanced, Convertible and
Growth; July 21, 1994 for Class B Aggressive Growth; February 16, 1994 for
Class B High Yield; and February 24, 1994 for U.S. Government Class B.
NOTE: Average annual total return assumes a hypothetical initial payment of
$1,000. At the end of each period, a total redemption is assumed. The
ending redeemable value is divided by the original investment to
calculate total return.
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Performance information for any Series or Class reflects only the
performance of a hypothetical investment in the Series or Class during the
particular time period on which the calculations are based. Performance
information should be considered in light of the investment objectives and
policies, characteristics and quality of the particular Series, and the
market conditions during the given time period, and should not be considered
as a representation of what may be achieved in the future.
PERFORMANCE COMPARISONS
Each Series or Class of Series may from time to time include in
advertisements containing total return the ranking of those performance
figures relative to such figures for groups of mutual funds having similar
investment objectives as categorized by ranking services such as Lipper
Analytical Services, Inc., CDA Investment Technologies, Inc., Weisenberger
Financial Services, Inc. and rating services such as Morningstar, Inc.
Additionally, a Series or Class of Series may compare its performance results
to other investment or savings vehicles (such as certificates of deposit) and
may refer to results published in various publications such as Changing
Times, Forbes, Fortune, Money, Barrons, Business Week and Investor's Daily,
Stanger's Mutual Fund Monitor, The Stanger Register, Stanger's Investment
Adviser, The Wall Street Journal, The New York Times, Consumer Reports,
Registered Representative, Financial Planning, Financial Services Weekly,
Financial World, U.S. News and World Report, Standard and Poors The Outlook,
and Personal Investor. A Series may, from time to time, illustrate the
benefits of tax deferral by comparing taxable investments to investments made
through tax-deferred retirement plans. The total return may also be used to
compare the performance of the Series or the Class of Series against certain
widely acknowledged outside standards or indices for stock and bond market
performance, such as the Standard & Poor's 500 Stock Index (the "S&P 500"),
Dow Jones Industrial Average, Europe Australia Far East Index (EAFE),
Consumer Price Index, Lehman Brothers Corporate Index and Lehman Brothers
T-Bond Index. The S&P 500 is a commonly quoted measure of stock market
performance and represents common stocks of companies of varying sizes
segmented across 90 different industries which are listed on the New York
Stock Exchange, the American Stock Exchange and traded over the NASDAQ
National Market System.
Advertisements, sales literature, and other communications may contain
information about the Adviser's current investment strategies and management
style. Current strategies and style may change to allow the Trust to respond
quickly to changing market and economic conditions. From time to time the
Trust may include specific portfolio holdings or industries. To illustrate
components of overall performance, the Trust may separate its cumulative and
average annual returns into income and capital gains components; or cite
separately as a return figure the equity or bond portion of the Trust's
portfolio; or compare the Trust's equity or bond return figure to well-known
indices of market performance, including but not limited to: the S&P 500
Index, Dow Jones Industrial Average, CS First Boston High Yield Index and
Salomon Brothers Corporate Bond and Government Bond Indices.
PORTFOLIO TURNOVER
Each Series has a different expected annual rate of portfolio turnover,
which is calculated by dividing the lesser of purchases or sales of portfolio
securities during the fiscal year by the monthly average of the value of the
Series' securities (excluding from the computation all securities, including
options, with maturities at the time of acquisition of one year or less). A
high rate of portfolio turnover generally involves correspondingly greater
brokerage commission expenses, which must be borne directly by the Series.
Turnover rates may vary greatly from year to year as well as within a
particular year and may also be affected by cash requirements for redemptions
of each Series' shares and by requirements which enable the Trust to receive
certain favorable tax treatment (see "Taxes"). Historical annual rates of
portfolio turnover for all Series except the Money Market Series (which for
this purpose does not calculate a portfolio turnover rate) are set forth in
the prospectus, a copy of which must precede or accompany this Statement of
Additional Information.
Balanced Series
In the fiscal years ended October 31, 1995 and October 31, 1996, the
turnover rates for the equity portion of the Balanced Series were 226% and
170%, respectively. The turnover rates for the fixed income securities were
155% and 229%, respectively for the same periods.
PORTFOLIO TRANSACTIONS AND BROKERAGE
In effecting portfolio transactions for the Trust, the Adviser adheres to
the Trust's policy of seeking best execution and price, determined as
described below, except to the extent it is permitted to pay higher brokerage
commissions for "brokerage and research services" as defined herein. The
Adviser may cause the Trust to pay a broker an amount of commission for
effecting a securities transaction in excess of the amount of commission
which another broker or dealer would have charged for effecting the
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or that any offset of direct
expenses of a Series yields the best net price. As provided in Section 28(e)
of the Securities Exchange Act of 1934, "brokerage and research services"
include giving advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities; furnishing analyses and reports concerning issuers, industries,
economic factors and trends, portfolio strategy and the performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Brokerage and
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research services provided by brokers to the Trust or to the Adviser are
considered to be in addition to and not in lieu of services required to be
performed by the Adviser under its contract with the Trust and may benefit
both the Trust and other clients of the Adviser. Conversely, brokerage and
research services provided by brokers to other clients of the Adviser may
benefit the Trust.
If the securities in which a particular Series of the Trust invests are
traded primarily in the over-the-counter market, where possible the Series
will deal directly with the dealers who make a market in the securities
involved unless better prices and execution are available elsewhere. Such
dealers usually act as principals for their own account. On occasion,
securities may be purchased directly from the issuer. Bonds and money market
instruments are generally traded on a net basis and do not normally involve
either brokerage commission or transfer taxes. In addition, transactions
effected on foreign securities exchanges which do not permit the negotiation
of brokerage commissions and where the Adviser would, under the
circumstances, seek to obtain best price and execution on orders for the
Trust.
The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Trust (involving both price paid or received and any net
commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block
is involved, the availability of the broker to stand ready to execute
possibly difficult transactions in the future and the financial strength and
stability of the broker. Such considerations are judgmental and are weighed
by the Adviser in determining the overall reasonableness of brokerage
commissions paid by the Trust. Some portfolio transactions are, subject to
the Conduct Rules of the National Association of Securities Dealers, Inc. and
subject to obtaining best prices and executions, effected through dealers
(excluding Equity Planning) who sell shares of the Trust.
The Trust has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to
lower commission costs on a per-share and per-dollar basis. According to the
bunching procedures, the Adviser shall aggregate transactions unless it
believes in its sole discretion that such aggregation is consistent with its
duty to seek best execution (which shall include the duty to seek best price)
for the Trust. No advisory account of the Adviser is to be favored over any
other account and each account that participates in an aggregated order is
expected to participate at the average share price for all transactions of
the Adviser in that security on a given business day, with all transaction
costs shared pro rata based on the Trust's participation in the transaction.
If the aggregated order is filled in its entirety, it shall be allocated
among the Adviser's accounts in accordance with the allocation order, and if
the order is partially filled, it shall be allocated pro rata based on the
allocation order. Notwithstanding the foregoing, the order may be allocated
on a basis different from that specified in the allocation order if all
accounts of the Adviser whose orders are allocated receive fair and equitable
treatment and the reason for such different allocation is explained in
writing and is approved in writing by the Adviser's compliance officer as
soon as practicable after the opening of the markets on the trading day
following the day on which the order is executed. If an aggregated order is
partially filled and allocated on a basis different from that specified in
the allocation order, no account that is benefited by such different
allocation may intentionally and knowingly effect any purchase or sale for a
reasonable period following the execution of the aggregated order that would
result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled.
The Trustees will annually review these procedures or as frequently as shall
appear appropriate.
For the fiscal years ended October 31, 1994, 1995 and 1996, brokerage
commissions paid by the Trust on portfolio transactions totaled $10,376,253,
$10,324,000, and $9,322,374 respectively. Brokerage commissions of $7,051,413
paid during the fiscal year ended October 31, 1996, were paid on portfolio
transactions aggregating $6,333,148 executed by brokers who provided research
and other statistical and factual information. None of such commissions was
paid to a broker who was an affiliated person of the Trust or an affiliated
person of such a person or, to the knowledge of the Trust, to a broker an
affiliated person of which was an affiliated person of the Trust, its adviser
or its national distributor.
THE INVESTMENT ADVISER
The offices of the Adviser, Phoenix Investment Counsel, Inc., are located at
56 Prospect Street, Hartford, Connecticut 06115. Philip R. McLoughlin, a
Trustee and officer of the Trust, is a director of the Adviser. All other
executive officers of the Trust are officers of the Adviser.
All of the outstanding stock of the Adviser is owned by Phoenix Equity
Planning Corporation ("Equity Planning"), an indirect subsidiary of Phoenix
Duff & Phelps Corporation. Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life") owns a controlling interest in Phoenix Duff & Phelps
Corporation. Phoenix Home Life is in the business of writing ordinary and
group life and health insurance and annuities. It was founded in 1851 and at
December 31, 1996, had total assets of approximately $111.6 billion and
insurance in force of approximately $11.7 billion. Equity Planning, the
Distributor of the Trust's shares, also performs bookkeeping, pricing, and
administrative services for the Trust. (See "The Distributor and Distribution
Plans"). Equity Planning is registered as a broker-dealer in fifty states.
The principal office of Phoenix Home Life is located at One American Row,
Hartford, Connecticut 06115. The principal office of Equity Planning is
located at 100 Bright Meadow Blvd., P.O. Box 2200, Enfield, Connecticut
06083-2200.
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All costs and expenses (other than those specifically referred to as being
borne by the Adviser) incurred in the operation of the Trust are borne by the
Trust. Each Series pays expenses incurred in its own operation and also pays
a portion of the Fund's general administration expenses allocated on the
basis of the asset size of the respective Series, except where allocation of
direct expenses to each Series or an alternative allocation method can be
more fairly made. Such expenses include, but shall not be limited to, all
expenses incurred in the operation of the Trust and any public offering of
its shares, including, among others, interest, taxes, brokerage fees and
commissions, fees of Trustees who are not employees of the Adviser or any of
its affiliates, expenses of Trustees' and shareholders' meetings, including
the cost of printing and mailing proxies, expenses of insurance premiums for
fidelity and other coverage, expenses of repurchase and redemption of shares,
expenses of issue and sale of shares (to the extent not borne by Equity
Planning under its agreement with the Trust), expenses of printing and
mailing stock certificates representing shares of the Trust, association
membership dues, charges of custodians, transfer agents, dividend disbursing
agents and financial agents, bookkeeping, auditing, and legal expenses. The
Trust will also pay the fees and bear the expense of registering and
maintaining the registration of the Trust and its shares with the Securities
and Exchange Commission and registering or qualifying its shares under state
or other securities laws and the expense of preparing and mailing
prospectuses and reports to shareholders.
The investment advisory agreement provides that the Adviser shall not be
liable to the Trust or to any shareholder of the Trust for any error of
judgment or mistake of law or for any loss suffered by the Trust or by any
shareholder of the Trust in connection with the matters to which the
investment advisory agreement relates, except a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the Adviser in the performance of its duties thereunder.
As full compensation for the services and facilities furnished to the Trust,
the Adviser is entitled to a fee, payable monthly, as described in the
Prospectus. There is no assurance that the Trust will reach net asset levels
high enough to realize reductions in the rates of the advisory fees. Any
reduction in the rate of the advisory fee on all Series will be prorated
among the Series in proportion to their respective averages of the aggregate
daily net asset values for the period for which the fee had been paid.
The Adviser has agreed to reimburse the Trust for the amount, if any, by
which the total operating and management expenses of any Series (including
the Adviser's compensation, but excluding interest, taxes, brokerage fees and
commissions and extraordinary expenses) for any fiscal year exceed the level
of expenses which such Series is permitted to bear under the most restrictive
expense limitation imposed on mutual funds by any state in which shares of
such Series are then qualified for sale. Present expense limitations, to the
knowledge of the Trust, require that the Adviser reimburse the Trust, to the
extent of the compensation received by it from the Trust, for the amount, if
any, by which total operating and management expenses (excluding interest,
taxes, brokerage fees and commissions and extraordinary expenses) of any
Series in any fiscal year exceed 2.5% of the first $30,000,000, 2% of the
next $70,000,000 and 1.5% of any excess over $100,000,000 of such Series'
average net asset value for such fiscal year. In the event legislation were
to be adopted in each state so as to eliminate this restriction, the Fund
would take such action necessary to eliminate this expense limitation.
The Adviser has agreed to assume expenses and reduce the advisory fee for
the benefit of the Money Market Series to the extent that operating expenses
(excluding interest, taxes, brokerage fees and commissions and extraordinary
expenses) exceed 0.85% and 1.60% of average daily net asset values for Class
A Shares and Class B Shares respectively. Such reimbursement will be made
monthly.
The agreement continues in force from year to year for all Series, provided
that, with respect to each Series, the agreement must be approved at least
annually by the Trustees or by vote of a majority of the outstanding voting
securities of the Series. In addition, and in either event, the terms of the
agreement and any renewal thereof must be approved by the vote of a majority
of the Trustees who are not parties to the agreement or interested persons
(as that term is defined in the Investment Company Act of 1940) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The agreement will terminate automatically if assigned and may be
terminated at any time, without payment of any penalty, either by the Trust
or by the Adviser, on sixty (60) days written notice. The investment advisory
agreement provides that upon termination of the agreement, or at the request
of the Adviser, the Trust will eliminate all reference to Phoenix from its
name, and will not thereafter transact business in a name using the word
Phoenix.
For services to the Trust during the fiscal years ended October 31, 1994,
1995, and 1996, the Adviser received fees of $37,915,913, $34,684,220 and
$35,372,083 respectively under the investment advisory agreements in effect.
Of these totals, the Adviser received fees from each Series as follows:
1994 1995 1996
-------------- -------------- --------------
Growth Series $15,246,456 $14,508,081 $15,914,996
Aggressive Growth Series 987,859 1,052,902 1,537,430
High Yield Series 3,641,735 3,336,889 3,366,120
U.S. Government Series 1,222,555 1,137,873 1,016,243
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1994 1995 1996
-------------- -------------- --------------
Convertible Series 1,564,334 1,438,064 1,444,901
Balanced Series 14,505,771 12,384,575 11,281,357
Money Market Series 747,203 825,836 811,036
For the fiscal years ended October 31, 1994, 1995 and 1996, the Adviser was
not reimbursed for any expenses incurred in providing services which would
otherwise have been provided at the expense of the Trust.
NET ASSET VALUE
The net asset value per share of each Series is determined as of the close
of regular trading of the New York Stock Exchange (the "Exchange") on days
when the Exchange is open for trading. The Exchange will be closed on the
following observed national holidays: New Year's Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Since the Fund does not price securities on weekends or United
States national holidays, the net asset value of a Series' foreign assets may
be significantly affected on days when the investor has no access to the
Fund. The net asset value per share of a Series is determined by adding the
values of all securities and other assets of the Series, subtracting
liabilities, and dividing by the total number of outstanding shares of the
Series. Assets and liabilities are determined in accordance with generally
accepted accounting principles and applicable rules and regulations of the
Securities and Exchange Commission. The total liability allocated to a class,
plus that class's distribution fee and any other expenses allocated solely to
that class, are deducted from the proportionate interest of such class in the
assets of the Series, and the resulting amount of each is divided by the
number of shares of that class outstanding to produce the net asset value per
share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world,
the calculation of net asset value may not take place for any Series which
invests in foreign securities contemporaneously with the determination of the
prices of the majority of the portfolio securities of such Series. All assets
and liabilities initially expressed in foreign currency values will be
converted into United States dollar values at the mean between the bid and
ask quotations of such currencies against United States dollars as last
quoted by any recognized dealer. If an event were to occur after the value of
an investment was so established but before the net asset value per share was
determined, which was likely to materially change the net asset value, then
the instrument would be valued using fair value considerations by the
Trustees or their delegates. If at any time a Series has investments where
market quotations are not readily available, such investments are valued at
the fair value thereof as determined in good faith by the Trustees although
the actual calculations may be made by persons acting pursuant to the
direction of the Trustees.
Money Market Series
The assets of the Money Market Series are valued on the basis of amortized
cost absent extraordinary or unusual market conditions. Under the amortized
cost method of valuation, securities are valued at cost on the date of
purchase. Thereafter the value of a security is increased or decreased
incrementally each day so that at maturity any purchase discount or premium
is fully amortized and the value of the security is equal to its principal
amount. Due to fluctuations in interest rates, the amortized cost value of
the Money Market Series securities may at times be more or less than their
market value. By using amortized cost valuation, the Money Market Series
seeks to maintain a constant net asset value of $1.00 per share despite minor
shifts in the market value of its portfolio securities.
The yield on a shareholder's investment may be more or less than that which
would be recognized if the Series' net asset value per share was not constant
and was permitted to fluctuate with the market value of the Series' portfolio
securities. However, as a result of the following procedures, it is believed
that any difference will normally be minimal. The deviation is monitored
periodically by comparing the Series net asset value per share as determined
by using available market quotations with its net asset value per share as
determined through the use of the amortized cost method of valuation. The
Adviser makes such comparisons at least weekly and will advise the Trustees
promptly in the event of any significant deviation. If the deviation exceeds
1/2 of 1%, the Trustees will consider what action, if any, should be
initiated to provide fair valuation of the Series' portfolio securities and
prevent material dilution or other unfair results to shareholders. Such
action may include redemption of shares in kind, selling portfolio securities
prior to maturity, withholding dividends or utilizing a net asset value per
share as determined by using available market quotations. Furthermore, the
assets of the Series will not be invested in any security with a maturity of
greater than 397 days, and the average weighted maturity of its portfolio
will not exceed 90 days. Portfolio investments will be limited to U.S.
dollar-denominated securities which present minimal credit risks and are of
high quality as determined either by a major rating service or, if not rated,
by the Trustees.
PURCHASE OF SHARES
Shares may be purchased from investment dealers having sales agreements with
the Distributor at the public offering price (the net asset value next
computed following receipt by State Street Bank and Trust Company of a
purchase application in proper form, plus the applicable sales charge). The
minimum initial purchase is $500 ($25 if using the bank draft program
designated "Investo-Matic"), and the minimum subsequent investment is $25.
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Alternative Purchase Arrangements
Each Series is authorized to offer two classes of shares. Shares may be
purchased from investment dealers at a price equal to their net asset value
per share, plus a sales charge which, at the election of the purchaser, may
be imposed either (i) at the time of the purchase (the "initial sales charge
alternative"), or (ii) on a contingent deferred basis (the "deferred sales
charge alternative").
Class A Shares
An investor who pays an initial sales charge or purchases at net asset value
acquires Class A shares. Class A shares are subject to an ongoing
distribution fee at an annual rate of up to 0.25% of the Series' aggregate
average daily net assets attributable to Class A shares. Certain purchases of
Class A shares qualify for reduced initial sales charges. See the Trust's
current Prospectus for additional information.
Class B Shares
An investor who elects the deferred sales charge alternative acquires Class
B shares. Class B shares do not incur a sales charge when they are purchased,
but are subject to a sales charge if they are redeemed within six years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions.
Class B shares are subject to an ongoing distribution fee at an annual rate
of up to 1.00% of the Series' aggregate average daily net assets attributable
to Class B shares. Class B shares permit the investor's payment to be
invested in full from the time the investment is made. The higher ongoing
distribution fee paid by Class B shares will cause such shares to have a
higher expense ratio and to pay lower dividends than those related to Class A
shares. Class B shares will automatically convert to Class A shares eight
years after the end of the calendar month in which the shareholder's order to
purchase was accepted. The purpose of the conversion feature is to eliminate
the higher distribution fee after the National Distributor has been
compensated for distribution expenses related to the Class B shares. See
"Conversion Feature" below.
The alternative purchase arrangement permits an investor to choose the
method of purchasing shares that is more beneficial given such factors as the
amount of the purchase, the length of time the investor expects to hold the
shares, and whether the investor wishes to receive distributions in cash or
to reinvest them in additional shares. Investors should consider whether,
during the anticipated term of their investment in the Series, the
accumulated continuing distribution fees and contingent deferred sale charges
on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the
same time, and the extent to which such differential would be offset by the
lower expenses attributable to Class A shares.
Class A shares are subject to a lower distribution fee and, accordingly, pay
correspondingly higher dividends. However, because initial sales charges are
deducted at the time of purchase, Class A investors do not have all their
funds invested initially and initially own fewer shares. Investors not
qualifying for reduced initial sales charges who expect to maintain their
investment for an extended period of time should consider purchasing Class A
shares because the accumulated continuing distribution charges on Class B
shares may exceed the initial sales charge on Class A shares during the term
of the investment. However, such investors must weigh this consideration
against the fact that, because of the initial Class A sales charges, not all
of their funds will be invested initially.
The distribution expenses incurred by the Distributor in connection with the
sale of the shares will be paid, in the case of Class A shares, from the
proceeds of the initial sales charge and the ongoing distribution fees and,
in the case of Class B shares, from the proceeds of the ongoing distribution
fees and the contingent deferred sales charge imposed upon redemptions within
six years of purchase. Sales personnel of broker-dealers distributing a
Series shares may receive differing compensation for selling Class A or Class
B shares. The purpose and function of the contingent deferred sales charge
and ongoing distribution fees with respect to the Class B shares are the same
as those of the initial sale charge and ongoing distribution fees with
respect to the Class A shares.
Dividends paid by the Series with respect to Class A and Class B shares will
be calculated in the same manner, at the same time and on the same day,
except that the higher distribution fees and any incremental transfer agency
costs relating to Class B shares will be borne exclusively by that Class and
will result in a lower dividend.
The Trustees of the Trust have determined that no conflict of interest will
exist between the Class A and Class B shares. The Trustees shall, pursuant to
their fiduciary duties under the Investment Company Act of 1940 and state
law, monitor the question of Class A and Class B shares and seek to ensure
that no such conflict arises.
Conversion Feature
Class B shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period
ending eight years after the end of the month in which the shares were
purchased. At the end of this period, Class B shares will automatically
convert to Class A shares and will no longer be subject to the higher
distribution fees. Such conversion will be on the basis of the relative net
asset value of the two classes without the imposition of any sales load, fee
or
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other charge. The purpose of the conversion feature is to eliminate the
higher distribution fee after the Distributor has been compensated for
distribution expenses related to the Class B shares.
For purposes of conversion to Class A, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B shares
will be considered to be held in a separate sub-account. Each time any Class
B shares in the shareholder's account (other than those in the sub-account)
convert to Class A, an equal pro rata portion of the Class B shares in the
sub-account will also convert to Class A.
Purchases of Shares of the Money Market Series
The minimum initial investment and the minimum subsequent investment for
purchase of shares of the Money Market Series is set forth in the Prospectus.
Shares of the Money Market Series are sold through registered representatives
of Equity Planning or through brokers or dealers with whom Equity Planning
has sales agreements. (See "Distribution Plans"). There is no sales charge on
Class A shares of the Money Market Series. Class B shares of the Series are
subject to applicable contingent deferred sales charges. Initial purchases of
shares may also be made by mail by completing an application and mailing it
directly to Phoenix Funds c/o State Street Bank and Trust Company, P.O. Box
8301, Boston, MA 02266-8301. Subsequent purchases should be sent to State
Street Bank and Trust Company. An investment is accepted when funds are
credited to the purchaser. Investments are credited not later than the second
business day after receipt by the Trust of checks drawn on U.S. banks payable
in U.S. funds. Shares purchased begin earning dividends the day after funds
are credited. Certified checks are not necessary.
Immediate Investment
In order to obtain immediate investment of funds, initial and subsequent
purchases of shares of any Series may also be made by wiring Federal Funds
directly pursuant to the following instructions. (Federal Funds are monies
held in a bank account with a Federal Reserve Bank.)
1. For initial investments, telephone the Trust at (800) 367-5877. Certain
information will be requested from you regarding the account, and an account
number will be assigned.
2. Once an account has been assigned, direct your bank to wire the Federal
Funds to Equity Planning, attention of the appropriate Series of the Phoenix
Series Fund. Your bank must include the account number and the name(s) in
which your account is registered in its wire and also request a telephone
advice. Your bank may charge you a fee for transmitting funds by wire.
Payment in Federal Funds must be received by 4:00 p.m. for an order to be
accepted on that day. If payment is received after that time, the order will
not be accepted until the next business day. You should bear in mind that
wire transfers may take two or more hours to complete.
Promptly after an initial purchase by wire, the investor should complete an
Account Application and mail it to Equity Planning.
SHAREHOLDER SERVICES
Any shareholder desiring investment assistance or a further explanation of
any Series or service may call Equity Planning at (800) 243-1574.
Open Account. As a convenience to shareholders, all shares of a Series of
the Trust registered in a shareholder's name are automatically credited to an
Open Account maintained for the shareholder on the books of the Trust by its
transfer agent, Equity Planning. An Open Account offers the shareholder ready
access to the following options and services:
Tax Reports. Shortly after the end of each calendar year each shareholder
will receive information as to the Federal tax status of dividends and any
capital gain distribution paid by the Trust with respect to the applicable
Series during the year.
Safekeeping of Shares. All shares of a Series of the Trust acquired by the
shareholder will be credited to his Open Account and share certificates will
not be issued unless requested. In any event share certificates will not be
issued with respect to the Money Market Series. In no event will certificates
representing fractional shares be issued. Certificates previously acquired
may be surrendered to the transfer agent and will be canceled. The shares
represented thereby will continue to be credited to the Open Account of the
shareholder.
Investing by Mail. An Open Account provides a simple and convenient way of
setting up a flexible investment program for the accumulation of shares of
any Series. At any time the shareholder may send to the Transfer Agent a
check, payable to the order of the Series to be acquired, in the amount of at
least the minimum subsequent investment for the particular Series being
purchased (giving the full name or names of his account) to be used to
purchase additional shares for his Open Account at the applicable offering
price next determined after the check is received.
Bank Draft Investing Program (Investo-Matic Plan). By completing the
Investo-Matic Section of the New Account Application, a shareholder may
authorize the bank named in the form to draw $25 or more from his personal
checking account to be used to purchase additional shares for his Open
Account. The amount the shareholder designates will be made available, in
form payable to the order of Equity Planning, by the bank on the date the
bank draws on his/her account and will be used
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to purchase shares at the applicable offering price. The shareholder or his
or her registered representative may, by telephone or written notice, cancel
or change the dollar amount being invested pursuant to the Investo-Matic Plan
unless the shareholder has notified the Trust or Transfer Agent that his or
her registered representative shall not have this authority.
Distribution Option. Each Series currently declares all income dividends and
all capital gain distributions, if any, payable in shares of the Series at
net asset value or, at the option of the shareholder, in cash. (The Money
Market Series will normally make no capital gain distributions, since its
investments will generally be made in securities which do not generate
capital gains.) By exercising the distribution option, a shareholder may
elect to: (1) receive both dividends and capital gain distributions in
additional shares or (2) receive dividends in cash and capital gain
distributions in additional shares or (3) receive both dividends and capital
gain distributions in cash. If a shareholder elects to receive dividends
and/or distributions in cash and the check cannot be delivered or remains
uncashed by the shareholder due to an invalid address, then the dividend
and/or distribution will be reinvested after the Transfer Agent has been
informed that the proceeds are undeliverable. Additional shares will be
purchased for the shareholder's account at the then current net asset value.
Shareholders who maintain an account balance in a Series of at least $5,000,
or $2,000 for tax qualified retirement benefit plans, (calculated on the
basis of the net asset value of the shares held in a single account) may
direct that any dividends and distributions paid with respect to shares in
that account be automatically reinvested in a single account of one of the
other Phoenix Funds at net asset value. Shareholders should obtain a current
prospectus and consider the objectives and policies of each Series or Fund
carefully before directing dividends and distributions to another Series or
Fund. Reinvestment direction forms and prospectuses are available from Equity
Planning. An alternate payee section has been incorporated into the
application allowing distributions to be mailed to a second payee and/or
address. Dividends and capital gain distributions received in shares are
taxable to the shareholder and credited to the shareholder's Open Account in
full and fractional shares computed at the closing net asset value on the
next business day after the record date. A distribution option may be changed
at any time by notifying Customer Service by telephone at (800) 243-1574 or
by sending a written letter signed by the registered owner(s) of the account.
Requests for directing distributions to someone other than the shareholder
must be made in writing with all signatures guaranteed. To be effective with
respect to a particular dividend or distribution, notification of the new
distribution option must be received by the transfer agent at least three
days prior to the record date of such dividend or distribution. If all shares
in the shareholder's account are repurchased or redeemed or transferred
between the record date and the payment date of a dividend or distribution,
he will receive cash for the dividend or distribution regardless of the
distribution option selected.
Systematic Withdrawal Program
The Systematic Withdrawal Program allows shareholders to periodically redeem
a portion of their shares on a predetermined monthly or quarterly, semiannual
or annual basis. The designated payment is made on or about the 20th day of
the month. Shares are tendered for redemption by the Transfer Agent, as agent
for the shareowner, on or about the 15th of the month at the closing net
asset value on the date of redemption. The Systematic Withdrawal Program also
provides for redemptions to be tendered on or about the 10th, 15th or 25th of
the month with proceeds to be directed through Automated Clearing House (ACH)
to the shareholder's bank account. In addition to the limitations stated
below, withdrawals may not be less than $25 and minimum account balance
requirements shall continue to apply.
Class A shareholders participating in the Systematic Withdrawal Program must
own shares of the Trust worth $5,000 or more, as determined by the
then-current net asset value per share.
To participate in the Systematic Withdrawal Program, Class B shareholders
must initially own shares of the Trust worth $5,000 or more and elect to have
all dividends reinvested in additional Class B Shares of the Trust. Through
the Program, Class B shareholders may withdraw up to 1% of their aggregate
net investments (purchases at initial value to date net of non-Program
redemptions) each month or up to 3% of their aggregate net investments each
quarter. Class B Share withdrawals in accordance with the Systematic
Withdrawal Program will be exempt from otherwise applicable contingent
deferred sales charges.
The purchase of shares while participating in the withdrawal program will
ordinarily be disadvantageous to the Class A Share investor since a sales
charge will be paid by the investor on the purchase of Class A Shares at the
same time other shares are being redeemed. For this reason, investors in
Class A Shares may not participate in an automatic investment program while
participating in the Systematic Withdrawal Program.
Class B shareholders redeeming more shares than the percentage permitted
under the Program shall be subject to any applicable contingent deferred
sales charge on all shares redeemed. Accordingly, the purchase of Class B
Shares will generally not be suitable for an investor who anticipates
withdrawing sums in excess of the above limits.
Reinstatement Privilege
The reinvestment privilege allows an investor who has redeemed shares of any
Series (other than the Money Market Series) or shares of any other Phoenix
Fund, and who has not previously exercised the privilege as to that Series or
Fund, to apply the proceeds of the redemption to the purchase at net asset
value (without sales charge) of Class A of shares. Information concerning the
privilege will be forwarded to the investor with redemption proceeds. A
written request for this privilege must be received by the Distributor within
180 days following the date of redemption of the investor's Series shares
accompanied by the payment
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for the shares (not in excess of the redemption value). Reinvestment is at
the net asset value per share of the designated Series or Fund next
determined after timely receipt by Equity Planning of a reinvestment order
and payment. When a loss is realized on the redemption of Series shares by an
investor who reacquires shares of the same Series within a 30 day time
period, under the so-called "wash sale" provisions of present Federal tax
laws, the investor will be unable to recognize some or all of the loss
(depending upon the percentage of the proceeds of the redemption reinvested)
until the reacquired shares are redeemed or otherwise disposed of. A gain
realized on such a redemption, however, is recognized at the time of
redemption. The reinvestment privilege does not apply to the proceeds of the
redemption of shares of the Money Market Series or to Class B shareholders
who have had the contingent deferred sales charge waived through
participation in the Systematic Withdrawal Program.
Tax-Sheltered Retirement Plans
Shares of the Trust are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, Profit-Sharing and
Money Purchase Pension Plans which can be adopted by self-employed persons
("Keogh") and by corporations, and 403(b) Retirement Plans. Write or call
Equity Planning (800) 243-4361 for further information about the plans.
Invest-by-Phone
This expedited investment service allows a shareholder to make an investment
in an account by requesting a transfer of funds from the balance of their
bank account. Once a request is phoned in, Equity Planning will initiate the
transaction by wiring a request for monies to the shareholder's commercial
bank, savings bank or credit union via Automated Clearing House (ACH). The
shareholder's bank, which must be an ACH member, will in turn forward the
monies to Equity Planning for credit to the shareholder's account. ACH is a
computer based clearing and settlement operation established for the exchange
of electronic transactions among participating depository institutions.
To establish this service, please complete an Invest-by-Phone Application
and attach a voided check if applicable. Upon Equity Planning's acceptance of
the authorization form (usually within two weeks) shareholders may call toll
free (800) 367-5877 prior to 3:00 p.m. (New York time) to place their
purchase request. Instructions as to the account number and amount to be
invested must be communicated to Equity Planning. Equity Planning will then
contact the shareholder's bank via ACH with appropriate instructions. The
purchase is normally credited to the shareholder's account the day following
receipt of the verbal instructions. This service may also be used to request
redemption of shares of the Money Market Series, the proceeds of which are
transferred to the shareholder's bank the second day following receipt of the
verbal request. The Trust may delay the mailing of a check for redemption
proceeds of Trust shares purchased with a check or via Invest-by-Phone
service until the Trust has assured itself that good payment has been
collected for the purchase of the shares, which may take up to 15 days.
Phoenix Series Fund and Equity Planning reserve the right to modify or
terminate the Invest-by-Phone service for any reason or to institute charges
for maintaining an Invest-by-Phone account.
HOW TO REDEEM SHARES
Any holder of shares of any Series may require the Trust to redeem his
shares at any time. In addition each Series maintains a continuous offer to
repurchase its shares, and shareholders may normally sell their shares
through securities dealers, who may charge customary commissions for their
services.
The redemption price will be the net asset value next computed after receipt
by Equity Planning, of the share certificates, duly endorsed in the full name
of the account, or, in the case of Open Accounts, a proper request duly
executed in the full name of the account. The Trustees do not presently
intend to make a redemption charge and shareholders will be given reasonable
notice of any change in this intention. However, Class B shares are subject
to a contingent deferred sales charge upon a redemption of shares within six
years of the date of purchase.
The signature must be guaranteed by an eligible guarantor institution as
defined by the Transfer Agent in accordance with its signature guarantee
procedures. Currently such procedures generally permit guarantees by banks,
broker/dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations. A
signature notarized by a notary public is not acceptable. No signature
guarantee will be required, however, in the case of shares tendered for
redemption if (a) the shares are registered in the names of individuals
singly, jointly or as custodian under the Uniform Gifts to Minors Act or
Uniform Transfers to Minors Act and (b) the proceeds of the redemption do not
exceed $50,000 and are to be paid to the registered owner(s) at the address
of record. Signatures must also be guaranteed on any change of address
request submitted in conjunction with a redemption request.
Payment for shares repurchased or redeemed will be made within seven days
after receipt of the duly endorsed share certificates, duly executed request
if required, or telephone request if appropriate and a proper signature
guarantee, if necessary. However, if the Trust is requested to redeem or
repurchase shares for which it has not yet received good payment, the mailing
of a check for the proceeds of the redemption or repurchase may be delayed
until the Trust assures itself that good payment has been collected. With
respect to shares purchased by check or via Invest-by-Phone service, payment
of redemption proceeds will only be made after the Trust has assured itself
that good payment has been collected for the purchase of shares, which may
take up to 15 days. Although the payment may be delayed, the redemption price
or repurchase price will be determined in the manner described herein.
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At the discretion of the Trustees, the Trust may, to the extent consistent
with state and Federal law, make payment for shares of a particular Series
repurchased or redeemed in whole or in part in securities or other assets of
such Series taken at current values. The Trust has elected to pay in cash all
requests for redemption by any shareholder of record, but may limit such cash
in respect to each shareholder during any 90 day period to the lesser of
$250,000 or 1% of the net asset value of the Trust at the beginning of such
period. Should payment be made in securities, the shareholder may incur
brokerage costs in converting such securities to cash. The Trust has elected
to pay in cash all requests for redemption as described in the prospectus.
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended
and payment therefor postponed during periods when the New York Stock
Exchange is closed, other than customary weekend and holiday closings, or if
permitted by rules of the Securities and Exchange Commission, during periods
when trading on the New York Stock Exchange is restricted or during any
emergency which makes it impracticable for the Fund to dispose of its
securities or to determine fairly the value of its net assets during any
other period permitted by order of the Securities and Exchange Commission.
Furthermore, the Transfer Agent will not mail redemption proceeds until
checks received for shares purchased have cleared, which may take up to 15
days after receipt of the check. Redemptions by Class B shareholders will be
subject to the applicable deferred sales charge, if any. See the Fund's
current Prospectus for more information.
A shareholder may receive more or less than he paid for his shares,
depending on the net asset value of the shares at the time they are
repurchased or redeemed.
Repurchases and redemptions may be made in the following manner:
By Mail. When shares are held in an Open Account, the shareholder may redeem
them by making written request, executed in the full name of the account,
directly to Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box
8301, Boston, MA 02266-8301. However, when certificates for shares are in the
possession of the shareholder, they must be mailed or presented, duly
endorsed in the full name of the account, with a written request to Equity
Planning that the Trust redeem the shares.
By Telephone. Unless a shareholder elects in writing not to participate in
the Telephone Redemption Privilege, shares for which certificates have not
been issued may be redeemed by calling (800) 367-5877 and telephone
redemptions will also be accepted on behalf of the shareholder from his or
her registered representative as described in the Prospectus. Address and
bank account information will be verified, telephone redemption instructions
will be recorded on tape, and all redemptions will be confirmed in writing to
the shareholder. If there has been an address change within the past 60 days,
a telephone redemption will not be authorized. The Trust and the Transfer
Agent will employ reasonable procedures to confirm that telephone
instructions are genuine. To the extent that procedures reasonable designed
to prevent unauthorized telephone redemptions are not followed, the Trust
and/or the Transfer Agent may be liable for following telephone instructions
for redemption transactions that prove to be fraudulent. Broker/ dealers
other than Equity Planning have agreed to bear the risk of any loss resulting
from any unauthorized telephone redemption instruction from the firm or its
registered representatives. However, the shareholder would bear the risk of
loss resulting from instructions entered by an unauthorized third party that
the Trust and/or the Transfer Agent reasonably believe to be genuine.
If the amount of the redemption is $500 or more, the proceeds will be wired
to the designated commercial bank account in the United States. If the amount
of the redemption is less than $500, the proceeds will be sent by mail to the
address of record on the shareholder's account.
With respect to the telephone redemption of shares purchased by check, such
redemption requests will only be effected after the Trust has assured itself
that good payment has been collected for the purchase of shares, which may
take up to 15 days after receipt of the check. See the Trust's current
Prospectus for more information. This expedited redemption privilege is not
available to HR-10, IRA and 403(b)(7) Plans. In addition to the Telephone
Redemption Privilege, a shareholder may also redeem by telephone through the
"Invest-by-Phone" service.
Repurchases. The Trust also maintains a continuous offer to repurchase its
shares and shareholders may normally sell their shares through securities
dealers, who may charge customary commissions for their services. Unless made
in connection with an exchange of shares, a request for repurchase must be
placed with a broker or dealer and communicated by the broker or dealer to
Equity Planning. The repurchase price will be the net asset value next
determined after receipt by Equity Planning of the request, except that a
repurchase order placed through a broker or dealer before the close of
trading on the New York Stock Exchange on any day will be executed at the net
asset value determined as of such close provided the broker or dealer
communicates the order to Equity Planning prior to its close of business
(normally 4:00 P.M. New York City time) on such day and subsequently confirms
the order to Equity Planning in writing, time-stamping his confirmation with
the time of the broker or dealer's receipt of the order. It is the
responsibility of brokers or dealers to communicate such orders, and they may
be liable to investors for failing to do so. Brokers or dealers may make
customary charges for their services in effecting repurchases.
The offer to repurchase may be suspended at any time. A shareholder who has
submitted a repurchase request must also submit his share certificates, duly
endorsed in the full name of the account, or, in the case of an Open Account,
Equity Planning may require a proper request, duly executed in the full name
of the account, in which case the signature must be guaranteed as discussed
above.
18
<PAGE>
By Check (U.S. Government Securities Series, High Yield Series and Money
Market Series Only). Any shareholder of these Series may elect to redeem
shares held in his Open Account by check. Checks will be sent to an investor
upon receipt by Equity Planning of a completed application and signature card
(attached to the application). If the signature card accompanies an
individual's initial account application, the signature guarantee section of
the form may be disregarded. However, the Trust reserves the right to require
that all signatures be guaranteed prior to the establishment of a check
writing service account. When an authorization form is submitted after
receipt of the initial account application, all signatures must be guaranteed
regardless of account value.
Checks may be drawn payable to any person in an amount of not less than
$500, provided that immediately after the payment of the redemption proceeds
the balance in the shareholder's Open Account is $500 or more.
When a check is presented to Equity Planning for payment, a sufficient
number of full and fractional shares in the shareholder's Open Account will
be redeemed to cover the amount of the check. The number of shares to be
redeemed will be determined on the date the check is received by the Transfer
Agent. Presently there is no charge to the shareholder for the check writing
service, but this may be changed or modified in the future upon two weeks
written notice to shareholders. Checks drawn from Class B accounts are
subject to the applicable deferred sales charge, if any.
The checkwriting procedure for redemption enables a shareholder to receive
income accruing on the shares to be redeemed until such time as the check is
presented to Equity Planning for payment. Inasmuch as canceled checks are
returned to shareholders monthly, no confirmation statement is issued at the
time of redemption.
Shareholders utilizing withdrawal checks will be subject to Equity
Planning's rules governing checking accounts. A shareholder should make sure
that there are sufficient shares in his Open Account to cover the amount of
any check drawn. If insufficient shares are in the account and the check is
presented to Equity Planning on a banking day on which the Series does not
redeem shares (for example, a day on which the New York Stock Exchange is
closed), or if the check is presented against redemption proceeds of an
investment made by check which has not been in the account for at least
fifteen calendar days, the check may be returned marked "Non-sufficient
Funds" and no shares will be redeemed. A shareholder may not close his
account by a withdrawal check because the exact value of the account will not
be known until after the check is received by Equity Planning.
DIVIDENDS, DISTRIBUTIONS AND TAXES
As stated in the Prospectus, it will be the policy of the Trust and of each
Series that each comply with provisions of the Internal Revenue Code
relieving investment companies which distribute substantially all of their
net income from Federal income tax on the amounts distributed.
The Federal tax laws also impose a four percent nondeductible excise tax on
each regulated investment company with respect to an amount, if any, by which
such company does not meet distribution requirements specified in such tax
laws. The Trust intends that each Series will comply with such distribution
requirements and thus does not expect to incur the four percent nondeductible
excise tax.
As stated in the Prospectus, the Trust believes that each of its Series will
be treated as a single entity. Prior to November 1, 1986, the Trust was
treated as a single entity.
To qualify for treatment as a "regulated investment company," each Series
must, among other things, derive in each taxable year at least 90 percent of
its gross income from dividends, interest, payments with respect to
securities loans, and gains from the sale or other disposition of stock or
securities or foreign currencies (subject to the authority of the Secretary
of the Treasury to exclude foreign currency gains which are not ancillary to
the Series' principal business of investing in stock or securities or options
and futures with respect to such stock or securities), or other income
(including but not limited to gains from options, futures, or forward
contracts) derived with respect to its investing in such stock, securities,
or currencies. In addition, to qualify for treatment as a "regulated
investment company," each Series must derive less than 30 percent of its
gross income in each taxable year from gains (without deduction for losses)
from the sale or other disposition of securities held for less than three
months. Accordingly, the Trust may be restricted in the selling of securities
which have been held less than three months, in the writing of options on
securities into which convertible securities are convertible, in the writing
of options on securities which have been held for six months or less, in the
writing of options which expire in less than three months and in purchasing
options to terminate options written within the preceding three months.
Income dividends and short-term capital gains distributions, whether
received in shares or in cash, are treated by shareholders as ordinary income
for Federal income tax purposes. Prior to January 1, 1987, income dividends
were eligible for the dividends received exclusion of $100 ($200 for a joint
return) available to individuals and the 85% dividends received deduction
available to corporate shareholders, subject, in either case, to reduction,
for various reasons, including the fact that dividends received from domestic
corporations in any year were less than 95% of the distributing Series' gross
income, in the case of individual distributees, or 100% of the distributing
Series' gross income, in the case of corporate distributees. Any income
dividends received after December 31, 1987 do not qualify for dividend
exclusion on an individual tax return but corporate shareholders are eligible
19
<PAGE>
for a 70% dividends received deduction (80% in the case of a 20% shareholder)
subject to a reduction for various reasons including the fact that dividends
received from domestic corporations in any year are less than 100% of the
distributing Series' gross income. Gross income includes the excess of net
short-term capital gains over net long-term capital losses.
Distributions which are designated by the Trust as long-term capital gains,
whether received in shares or in cash, are taxable to shareholders as
long-term capital gains (regardless of how long such person has been a
shareholder) and are not eligible for the dividends received exclusion. Any
loss from the sale of shares held for six months or less will be treated as
long-term capital loss to the extent of any capital gain distributions paid
with respect to such shares.
Individuals are entitled to deduct "miscellaneous itemized deductions"
specified in the Code only to the extent they exceed two percent of the
individuals' "adjusted gross income." Effective January 1, 1988, included
within the miscellaneous itemized deductions subject to the two percent
"floor" are indirect deductions through certain pass-through entities such as
the Series. The Secretary of the Treasury is authorized to prescribe
regulations relating to the manner in which the floor will be applied with
respect to indirect deductions and to the manner in which pass-through
entities such as the Series will report such amounts to the individual
shareholders. Individual shareholders are advised that, pursuant to these
rules, they may be required to report as income amounts in excess of actual
distributions made to them.
The Trust is required to withhold for income taxes, 31% of dividends,
distributions and redemption payments, if any of the following circumstances
exist: i) a shareholder fails to provide the Trust with a correct taxpayer
identification number ("TIN"); ii) the Trust is notified by the Internal
Revenue Service that the shareholder furnished an incorrect TIN; or iii) the
Trust is notified by the Internal Revenue Service that withholding is
required because the shareholder failed to report the receipt of dividends or
interest from other sources. Withholding may also be required for accounts
with respect to which a shareholder fails to certify that i) the TIN provided
is correct and ii) the shareholder is not subject to such withholding.
However, withholding will not be required from certain exempt entities nor
those shareholders complying with the procedures as set forth by the Internal
Revenue Service. A shareholder is required to provide the Trust with a
correct TIN. The Trust in turn is required to report correct taxpayer
identification numbers when filing all tax forms with the Internal Revenue
Service. Should the IRS levy a penalty on the Trust for reporting an
incorrect TIN and that TIN was provided by the shareholder, the Trust will
pass the penalty onto the shareholder.
Dividends paid by a Series from net investment income and net realized
short-term capital gains to a shareholder who is a nonresident alien
individual, a foreign trust or estate, a foreign corporation or a foreign
partnership (a "foreign shareholder") will be subject to United States
withholding tax at a rate of 30% unless a reduced rate of withholding or a
withholding exemption is provided under applicable treaty law. Foreign
shareholders are urged to consult their own tax advisors concerning the
applicability of the United States withholding tax and any foreign taxes.
The discussion of "Taxes" in the Prospectus, in conjunction with the
foregoing, is a general and abbreviated summary of applicable provisions of
the Code and Treasury regulations now in effect as currently interpreted by
the courts and the Internal Revenue Service. The Code and these Regulations,
as well as the current interpretations thereof, may be changed at any time by
legislative, judicial, or administrative action.
Shareholders ordinarily will also be subject to state income taxes on the
dividends and distributions they receive from each Series. Shareholders are
urged to consult counsel or other competent tax advisers regarding specific
questions as to Federal, state or local taxes.
THE DISTRIBUTOR AND DISTRIBUTION PLANS
Phoenix Equity Planning Corporation ("Equity Planning"), which has
undertaken to use its best efforts to find purchasers for shares of the
Trust, serves as the national distributor of the Trust's shares. Shares of
each Series are offered on a continuous basis. Pursuant to distribution
agreements for each class of shares or distribution method, the Distributor
will purchase shares of the Fund for resale to the public, either directly or
through securities dealers or agents, and is obligated to purchase only those
shares for which it has received purchase orders. Equity Planning may also
sell Trust shares pursuant to sales agreements entered into with
bank-affiliated securities brokers who, acting as agent for their customers,
place orders for Trust shares with Equity Planning. Although the
Glass-Steagall Act prohibits banks and bank affiliates from engaging in the
business of underwriting, distributing or selling securities (including
mutual fund shares), banking regulators have not indicated that such
institutions are prohibited from purchasing mutual fund shares upon the order
and for the account of their customers. In addition, state securities laws on
this issue may differ from the interpretations of federal law and banks and
financial institutions may be required to register as dealers pursuant to
state law. If, because of changes in law or regulations, or because of new
interpretations of existing law, it is determined that agency transactions of
bank-affiliated securities brokers are not permitted, the Trustees will
consider what action, if any, is appropriate. It is not anticipated that
termination of sales agreements with bank-affiliated securities brokers would
result in a loss to their customers or a change in the net asset value per
share of a Series.
For the fiscal years ended October 31, 1994, 1995, and 1996, Equity
Planning's gross commissions on sales of Trust shares totaled $4,578,450,
$6,774,491 and $6,512,356 respectively. Of these gross selling commissions,
$1,780,450, $856,873 and $912,483 respectively, were allowed to Equity
Planning as dealer.
20
<PAGE>
Equity Planning also acts as administrative agent of the Fund and as such
performs administrative, bookkeeping and pricing functions for the Fund. As
compensation for such services, effective as of January 1, 1997, Equity
Planning is entitled to a fee, payable monthly and based upon the average of
the aggregate daily net asset values of each Series, at the following
incremental annual rates:
First $100 million .05% plus a minimum fee
$100 million to $300 million .04%
$300 million to $500 million .03%
Greater than $500 million .015%
A minimum fee applies to each Series as follows:
Money Market Fund $35,000
Aggressive Growth Fund $50,000
Growth Fund $50,000
Balanced Fund $60,000
Convertible Fund $60,000
High Yield Fund $70,000
U.S. Government Securities Fund $70,000
In addition, Equity Planning is paid $12,000 for each class of shares of
each Series beyond one. Until December 31, 1996, Equity Planning's fee for
these services was based on an annual rate of 0.03% of the Fund's aggregate
daily net asset value. For its services during the Fund's fiscal year ended
October 31, 1996, Equity Planning received $1,789,755.
Distribution Plans
To permit the use of assets of a Series to encourage activities primarily
intended to result in the sale of shares of that Series, the Trust has
adopted a distribution plan for all Series (except the Money Market Series)
which offer shares sold subject to an initial sales charge and a distribution
plan for all Series which offer shares sold subject to a contingent deferred
sales load (each a "Plan" and collectively the "Plans") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Plan for shares sold
subject to an initial sales charge was adopted on August 22, 1990 by the
Board of Trustees of the Trust, including a majority of the Trustees who are
not interested persons of the Trust and who have no direct or indirect
financial interest in the Plan or any agreement related thereto (the "Rule
12b-1 Trustees"). It was approved by the shareholders of the Series on
December 13, 1990. The Plan for Class B shares, including the Rule 12b-1
Trustees, was adopted by the Board of Trustees on November 17, 1993.
The Class A and Class B Plans authorize the payment by the Trust to the
Distributor of a Series' shares of amounts not exceeding 0.25% and 1.00%
annually, respectively, of the Series' average daily net assets for each year
lapsed after the inception of the Plan. Although under no contractual
obligation to do so, the Trust intends to make such payments to the National
Distributor (i) as commissions for shares sold, all or any part of which
commissions will be paid by the National Distributor, upon receipt from the
Trust, to others who may be other dealers or registered representatives of
the Distributor, (ii) to enable the Distributor to pay to such others
maintenance or other fees in respect of a Series' shares sold by them and
remaining outstanding on the Trust's books during the period in respect of
which the fee is paid and (iii) to enable the Distributor to pay to
bank-affiliated securities brokers maintenance or other fees in respect of a
Series' shares purchased by their customers and remaining outstanding on the
Trust's books during the period in respect of which the fee is paid;
provided, however, that payments under (ii) and (iii) are subject to limits
of 0.25% and 1.00% annually of the average daily net assets of the Class A or
Class B shares respectively to which the payments relate. Payments, less the
portion thereof paid by the Distributor to others, may be used by the
Distributor for its expenses of distribution of a Series' shares. If expenses
of distribution of a Series' shares exceed payments and any sales charges
retained by the Distributor, the Trust is not required to reimburse the
Distributor for excess expenses; if payments and any sales charges retained
by the Distributor exceed expenses of distribution of a Series' shares, the
Distributor may realize a profit.
Each Plan requires that at least quarterly the Trustees of the Trust review
a written report with respect to the amounts expended under the Plan and the
purposes for which such expenditures were made. While each Plan is in effect,
the Trust will be required to commit the selection and nomination of
candidates for Trustees who are not interested persons of the Trust to the
discretion of other Trustees who are not interested persons. Each Plan
continues in effect from year to year only provided such continuance is
approved annually in advance by votes of the majority of both (a) the Board
of Trustees of the Trust and (b) the Rule 12b-1 Trustees, cast in person at a
meeting called for the purpose of voting on the Plan and any agreements
related to each Plan. No interested person of the Trust and no Trustee who is
not an interested person of the Trust, as that term is defined in the
Investment Company Act of 1940, has any direct or indirect financial interest
in the operation of the Plans.
The Trust's expenditures under the Plan totaled $15,144,023 for the fiscal
year ended October 31, 1996. The 12b-1 payments were used for (1)
compensating dealers $14,678,729, (2) compensating sales and service
personnel $330,238, and (3) compensating the underwriter for marketing
material $135,057.
21
<PAGE>
MANAGEMENT OF THE TRUST
The trustees and executive officers of the Trust and their principal
occupations for at least the last five years are set forth below. Unless
otherwise noted, the address of each executive officer and trustee is 56
Prospect Street, Hartford, Connecticut 06115-0480. On February 20, 1996, the
shareholders elected to fix the number of trustees at fourteen and to elect
Francis E. Jeffries, Everett L. Morris and Calvin J. Pedersen to fill the
vacancies caused by the increase. The trustees and executive officers are
listed below.
<TABLE>
<CAPTION>
Position(s) with Principal Occupation(s)
Name, Address and Age the Fund During Past Five Years
- --------------------------- ------------------- ----------------------------------------------------------------
<S> <C> <C>
C. Duane Blinn (69) Trustee Partner in the law firm of Day, Berry & Howard.
Day, Berry & Howard Director/Trustee, Phoenix Funds (1980-present). Trustee
City Place Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Hartford, CT 06103 Institutional Mutual Funds (1996-present). Director/Trustee,
the National Affiliated Investment Companies (until 1993).
Robert Chesek (62) Trustee Trustee/Director, Phoenix Funds (1981-present) and Chairman
49 Old Post Road (1989-1994). Trustee, Phoenix-Aberdeen Series Fund and Phoenix
Wethersfield, CT 06109 Duff & Phelps Institutional Mutual Funds (1996-present).
Director/Trustee, the National Affiliated Investment Companies
(until 1993). Vice President, Common Stock, Phoenix Home Life
Mutual Insurance Company (1980-1994).
E. Virgil Conway (67) Trustee Chairman (1992-present), Metropolitan Transportation Authority.
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Fund for Fannie
Mae Mortgage Securities (Advisory Director) (1990-present),
Centennial Insurance Company (1974-present), Josiah Macy, Jr.,
Foundation (1975-present), and The Harlem Youth Development
Foundation (1987-present). Chairman, Audit Committee of the City
of New York (1981-1996). Director/Trustee, the National
Affiliated Investment Companies (until 1993). Director/Trustee,
Phoenix Funds (1993-present). Trustee, Phoenix-Aberdeen Series
Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free
Income Inc. and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1995-present). Director, Accuhealth (1994-present), Trism,
Inc. (1994-present), and Realty Foundation of New York
(1972-present). Chairman, New York Housing Partnership
Development Corp. (1981-present), and Blackrock Fannie Mae
Mortgage Securities Fund (Advisory Director) (1989-1996) and
Advisory Director, Fund Directions (1993-present). Chairman,
Financial Accounting Standards Advisory Council (1992-1995).
Harry Dalzell-Payne (67) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Apartment 29G Institutional Mutual Funds (1996-present). Director, Duff &
New York, NY 10016 Phelps Utilities Tax-Free Income Inc. and Duff & Phelps Utility
and Corporate Bond Trust Inc. (1995-present). Director, Farragut
Mortgage Co., Inc. (1991-1994).Director/Trustee, the National
Affiliated Investment Companies (1983-1993). Formerly a Major
General of the British Army.
22
<PAGE>
Position(s) with Principal Occupation(s)
Name, Address and Age the Fund During Past Five Years
- --------------------------- ------------------- ----------------------------------------------------------------
*Francis E. Jeffries (66) Trustee Director and Chairman of the Board, Phoenix Duff & Phelps
6585 Nicholas Blvd. Corporation (1995-present). Director/Trustee, Phoenix Funds
Apt. 1601 (1995-present). Trustee, Phoenix-Aberdeen Series Fund and
Naples, FL 33963 Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Director, Duff & Phelps Utilities Income Fund (1987-present),
Duff & Phelps Utilities Electric Company (1984-present).
Director (1989-1995), Chairman of the Board (1993-1995),
President (1989-1993), and Chief Executive Officer (1989-1995),
Duff & Phelps Corporation.
Leroy Keith, Jr. (58) Trustee Chairman and Chief Executive Officer, Carson Products Company
64 Ross Road (1995-present). Director/Trustee, Phoenix Funds (1980-present).
Savannah, GA 31405 Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director Equifax
Corp. (1991-present) and Keystone International Fund, Inc.
(1989-present). Trustee, Keystone Liquid Trust, Keystone Tax
Exempt Trust, Keystone Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust. Director/Trustee, the National
Affiliated Investment Companies (until 1993). Director, Blue
Cross/Blue Shield (1989-1993) and First Union Bank of Georgia
(1989-1993). President, Morehouse College (1987-1994). Chairman
and Chief Executive Officer, Keith Ventures (1994-1995).
*Philip R. McLoughlin (50) Trustee and Director, Vice Chairman and Chief Executive Officer, Phoenix
President Duff & Phelps Corporation (1995-present). Director
(1994-present) and Executive Vice President, Investments,
Phoenix Home Life Mutual Insurance Company (1988-present).
Director/Trustee and President, Phoenix Funds (1989-present).
Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Duff &
Phelps Utilities Tax-Free Income Inc. (1995-present) and Duff &
Phelps Utility and Corporate Bond Trust Inc. (1995-present),
Director (1983-present) and Chairman (1995-present), Phoenix
Investment Counsel, Inc. Director (1984-present) and President
(1990-present), Phoenix Equity Planning Corporation. Director,
Phoenix Realty Group, Inc. (1994-present), Phoenix Realty
Advisors, Inc. (1987-present), Phoenix Realty Investors, Inc.
(1994-present), Phoenix Realty Securities, Inc. (1994-present),
PXRE Corporation (Delaware) (1985-present), and World Trust Fund
(1991-present). Director and Executive Vice President, Phoenix
Life and Annuity Company (1996-present), Director and Executive
Vice President, PHL Variable Insurance Company (1995-present),
and Director, Phoenix Charter Oak Trust Company (1996-present).
Director/ Trustee, the National Affiliated Investment Companies
(until 1993). Director (1994-present), Chairman (1996-present)
and Chief Executive Officer (1995-1996), National Securities &
Research Corporation, and Director and President, Phoenix
Securities Group, Inc. (1993-1995). Director (1992-present) and
President (1992-1994) W.S. Griffith & Co., Inc. and Director
(1992-1995) and President (1992-1994), Townsend Financial
Advisers, Inc. Director and Vice President, PM Holdings, Inc.
(1985-present).
23
<PAGE>
Position(s) with Principal Occupation(s)
Name, Address and Age the Fund During Past Five Years
- --------------------------- ------------------- ----------------------------------------------------------------
Everett L. Morris (68) Trustee Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/ Trustee, Phoenix Funds (1995-present). Trustee, Duff &
Colts Neck, NJ 07722 Phelps Mutual Funds (1994-present). Trustee, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free
Income Inc. (1991-present), Incorporated (1989-1993). Senior
Executive Vice President and Chief Financial Officer, Public
Service Electric and Gas Company (1986-1992). Director, First
Fidelity Bank, N.A., N.J. (1984-1991).
James M. Oates (50) Trustee Managing Director, The Wydown Group (1994-present). Chairman,
60 State Street IBEX Capital Markets LLC (1997-present). Director Phoenix Duff &
Suite 950 Phelps Corporation (1995-present). Director/Trustee, Phoenix
Boston, MA 02109 Funds Chairman, IBEX Capital Markets LLC (1987-present).
Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Govett
Worldwide Opportunity Funds, Inc. (1991-present), Blue Cross &
Blue Shield of New Hampshire (1994-present), Stifel Financial
(1996-present), Investors Bank and Trust Corporation
(1995-present), Investors Financial Services Corporation
(1995-present) and Plymouth Rubber Co. (1995-present). Member,
Chief Executives Organization (1996-present). Director/Trustee,
the National Affiliated Investment Companies (until 1993).
Director (1984-1994), President (1984-1994) and Chief Executive
Officer (1986-1994).
*Calvin J. Pedersen (55) Trustee Director and President, Phoenix Duff & Phelps Corporation (1995-
55 East Monroe Street present). Director/Trustee, Phoenix Funds (1984-present).
Suite 3600 Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Chicago, IL 60603 Institutional Mutual Funds (1996-present). President and Chief
Executive Officer Duff & Phelps Utilities Tax-Free Income Inc.
(1995-present), Duff & Phelps Utilities Income Fund. (since
inception), and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1995-present). Director (1986-1995), President (1993-1995)
and Executive Vice President (1992-1993), Duff & Phelps
Corporation.
Philip R. Reynolds (69) Trustee Director/Trustee, Phoenix Funds (1984-present). Trustee,
43 Montclair Drive Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
West Hartford, CT 06107 Institutional Mutual Funds (1996-present). Director, Vestaur
Securities, Inc. (1972-present). Trustee and Treasurer, J.
Walton Bissell Foundation Inc. (1988-present). Director/Trustee,
the National Affiliated Investment Companies (until 1993).
Herbert Roth, Jr. (68) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
P.O. Box 909 Institutional Mutual Funds (1996-present). Director, Boston
Sherborn, MA 01770 Edison Company Company (1972-present), Landauer, Inc. (medical
services) (1970-present), Tech Ops./Sevcon, Inc. (electronic
controllers) (1987-present), Key Energy Group (oil rig service)
(1988-1994), and Mark IV Industries (diversified manufacturer)
(1985-present). Director/ Trustee, the National Affiliated
Investment Companies (until 1993).
Richard E. Segerson (51) Trustee Director/Trustee, Phoenix Funds, (1993-present). Trustee,
102 Valley Road Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
New Canaan, CT 06840 Institutional Mutual Funds (1996-present). Managing Director,
Mullin Associates (1993-present). Vice President and General
Manager, Coates & Clark, Inc. (previously Tootal American, Inc.)
(1991-1993). Director/ Trustee, the National Affiliated
Investment Companies (1984-1993).
24
<PAGE>
Position(s) with Principal Occupation(s)
Name, Address and Age the Fund During Past Five Years
- --------------------------- ------------------- ----------------------------------------------------------------
Lowell P. Weicker, Jr. (65) Trustee Trustee/Director, the Phoenix Funds (1995-present). Trustee,
Dresing Lierman Weicker Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
6931 Arlington Road Institutional Mutual Weicker (1995-present). Director, UST Inc.
Suite 501 (1995-present) and HPSC Inc. (1995-present). Chairman, Dresing,
Bethesda, MD 20814 Lierman, Weicker (1995-present). Director, Duty Free
International (1997-present). Former Governor of the State of
Connecticut (1991-1995). Director, UST, Inc. (1995-present).
Michael E. Haylon (39) Executive Director and Executive Vice President-Investments, Phoenix Duff
Vice President & Phelps Corporation (1995-present). Senior Vice President,
Securities Investments, Phoenix Home Life Mutual Insurance
Company (1993-1995). Executive Vice President, the Phoenix
Funds (1995-present), Phoenix-Aberdeen Series Fund
(1996-present), and Vice President, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director
(1994-present), President (1995-present), and Executive Vice
President (1994-1995), Phoenix Investment Counsel, Inc. Director
(1994-present), President (1996-present) and Executive Vice
President (1994-1996), National Securities & Research
Corporation. Director, Phoenix Equity Planning Corporation
(1995-present). Various other positions with Phoenix Home Life
Insurance Company (1990-1993).
David R. Pepin (54) Executive Executive Vice President, Phoenix Funds, Phoenix-Aberdeen Series
Vice President Fund and Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present). Director, Phoenix Investment Counsel, Inc., National
Securities & Research Corporation and Phoenix Equity Planning
Corporation (1996-present). Executive Vice President, Mutual
Fund Sales and Operations, Phoenix Equity Planning Corporation
(1996-present). Managing Director, Phoenix-Aberdeen
International Advisors, LLC (1996-present). Executive Vice
President (1996-present) and Director (1997-present), Phoenix
Duff & Phelps Corporation. Vice President, Phoenix Home Life
Mutual Insurance Company (1994-1995). Vice Corporation
(1980-1994).
William J. Newman (57) Executive Executive Vice President (1995-present) and Chief Investment
Vice President Strategist (1996-present), Phoenix Investment Counsel, Inc.
Senior Vice President (1995-1996), Executive Vice President and
Chief Investment Strategist (1996-present), National Securities
& Research Corporation. Senior Vice President, Phoenix Equity
Planning Corporation (1995-1996). Vice President, Common Stock
and Chief Investment Strategist, Phoenix Home Life Insurance
Company (April, 1995-November, 1995). Senior Vice President,
Phoenix Strategic Equity Series Fund (1996-present), The Phoenix
Edge Series Fund (1996-present), Phoenix Multi-Portfolio Fund
(1995-present), Phoenix Income and Growth Fund (1996-present),
Phoenix Series Fund (1995-present), Phoenix Strategic
Allocation Fund, Inc. (1996-present), Phoenix Worldwide
Opportunities Fund (1996-present), Phoenix Duff & Phelps
Institutional Funds (1996-present), and Phoenix-Aberdeen Series
Fund (1996-present). Chief Investment Strategist, Kidder,
Peabody Co., Inc. (1993-1994). Managing Director, Equities,
Bankers Trust Company (1991-1993).
25
<PAGE>
Position(s) with Principal Occupation(s)
Name, Address and Age the Fund During Past Five Years
- --------------------------- ------------------- ----------------------------------------------------------------
Michael K. Arends (43) Vice President Managing Director, Equities (1996-present), Vice President
(1994-1996), Phoenix Investment Counsel, Inc. Managing
Director, Equities (1996-present), Vice President (1994-1995),
National Securities & Research Corporation. Vice President,
Phoenix Series Fund (1994-present) and Phoenix Strategic Equity
Series Fund (1994-present). Portfolio Manger, Phoenix Home Life
Insurance Company (1994-1995). Various positions with Kemper
Financial Services (1989-1994).
Curtiss O. Barrows (45) Vice President Managing Director, Fixed Income (1996-present), Vice President
(1991-1996), Phoenix Investment Counsel, Inc. Managing Director,
Fixed Income (1996-present), Vice President (1993-1996),
National Securities & Research Corporation. Vice President,
Phoenix Series Fund (1985-present), The Phoenix Edge Series Fund
(1986-present) and Phoenix Multi-Portfolio Fund (1995-present).
Portfolio Manger, Public Bonds, Phoenix Home Life Insurance
Company (1991-1995). Various positions with Phoenix Home Life
Mutual Insurance Company (1985-1995).
Mary E. Canning (40) Vice President Managing Director, Investment Strategist (1996-present), Vice
President (1991-1996), Phoenix Investment Counsel, Inc. Managing
Director & Investment Strategist, Equities (1996-present),
National Securities & Research Corporation. Vice President,
Phoenix Series Fund (1987-present), The Phoenix Edge Series Fund
(1987-present) and Phoenix Strategic Allocation Fund, Inc.
(1996-present). Associate Portfolio Manager, Common Stock,
Phoenix Home Life Insurance Company (1991-1995). Various
positions with Phoenix Home Life Mutual Insurance Company
(1982-1989).
John M. Hamlin (38) Vice President Portfolio Manager, Equities (1996-present), Vice President
(1995-1996), Phoenix Investment Counsel, Inc. Portfolio
Manager, Equities (1996-present), Investment Officer
(1993-1996), National Securities & Research Corporation. Vice
President, Phoenix Income and Growth Fund (1993-present) and
Phoenix Series Fund (1994-present). Portfolio Manager, Common
Stock, Phoenix Home Life Insurance Company (1989-1995).
Van Harissis (36) Vice President Managing Director, Equities, (1996-present), Vice President
(May,1996-September, 1996) Phoenix Investment Counsel, Inc.
Managing Director, Equities (1996-present), National Securities
& Research Corporation. Vice President, Phoenix Series Fund
(1996-present). Portfolio Manager, Phoenix Home Life Mutual
Insurance Company (August, 1995-November, 1995). Senior
Portfolio Manager, Howe & Rusling, Inc.
William E, Keen III (33) Vice President Assistant Vice President, Phoenix Equity Planning Corporation
100 Bright Meadow Blvd. (1996-present). Vice President, Phoenix Funds, Phoenix-Aberdeen
PO Box 2200 Series Fund, and Phoenix Duff & Phelps Institutional Mutual
Enfield, CT 06083-2200 Funds (1996-present). Assistant Vice President, US Affinity
Funds, US Affinity Investments LP, (1994-1995). Manager, Fund
Administration, SEI Corporation ( 1991-1994).
26
<PAGE>
Position(s) with Principal Occupation(s)
Name, Address and Age the Fund During Past Five Years
- --------------------------- ------------------- ----------------------------------------------------------------
Christopher J. Kelleher Vice President Managing Director, Fixed Income (1996-present), Vice President
(41) (1991-1996), Phoenix Investment Counsel, Inc. Managing Director,
Fixed Income (1996-present), Vice President (1993-1996),
National Securities & Research Corporation. Vice President,
Phoenix Series Fund (1989-present), The Phoenix Edge Series Fund
(1989-present) and Phoenix Duff & Phelps Institutional Mutual
Funds. (1996-present). Portfolio Manager, Public Bonds, Phoenix
Home Life Insurance Company (1991-1995). Various positions with
Phoenix Home Life Mutual Insurance
William R. Moyer (52) Vice President Senior Vice President and Chief Financial Officer, Phoenix Duff
100 Bright Meadow Blvd. & Phelps Corporation (1995-present). Vice President, Investment
PO Box 2200 Products Finance, Phoenix Home Life Mutual Insurance Company
Enfield, CT 06083-2200 (1990-1995). Senior Vice President (1990-present), Chief
Financial Officer (1996-present), Finance (until 1996) and
Treasurer (1994-1996), Phoenix Equity Planning Corporation.
Senior Vice President (1990-present), Chief Financial Officer
(1996-present), Finance (until 1996) and Treasurer
(1994-present), Phoenix Investment Counsel, Inc. Senior Vice
President (1994-present), Chief Financial Officer
(1996-present), Finance (until 1996), and Treasurer
(1994-present), National Securities & Research Corporation. Vice
President, Phoenix Funds (1990-present) and Phoenix-Aberdeen
Series Fund (1996-present). Vice President, the National
Affiliated Companies (until 1993). Senior Vice President,
Finance, Phoenix Securities Group, Inc. (1993-present). Senior
Vice President and Chief Financial Officer (1993-1995) and
Treasurer (1994-1995) W.S. Griffith & Co., Inc. and Townsend
Financial Advisers, Inc.
C. Edwin Riley, Jr. (43) Vice President Managing Director, Equities (1996-present), Vice President
(1995-1996) Phoenix Investment Counsel, Inc. Managing Director,
Equities (1996-present), National Securities & Research
Corporation. Vice President, The Phoenix Edge Series Fund
(1995-present), Phoenix Strategic Allocation Fund, Inc.
(1995-1996) and Phoenix Series Fund (1996-present). Portfolio
Manager, Phoenix Home Life Mutual Insurance Company (August,
1995-November, 1995). Director of Equity Management,
NationsBanc.
Amy L. Robinson (41) Vice President Managing Director, Equities Trading (1996-present), Vice
President (1992-1996), Phoenix Investment Counsel, Inc. Managing
Director, Equities Trading (1996-present), Vice President
(1993-1996), National Securities & Research Corporation. Vice
President, The Phoenix Edge Series Fund (1989-present) and
Phoenix Series Fund (1989-present). Managing Director,
Securities Administration, Phoenix Home Life Mutual Insurance
Company (1994-1995). Various positions with Phoenix Home Life
Mutual Insurance Company (1979-1994).
Leonard J. Saltiel (43) Vice President Managing Director, Operations and Service (1996-present), Senior
100 Bright Meadow Blvd. Vice President, (1994-1996), Phoenix Equity Planning
PO Box 2200 Corporation. Phoenix Funds Vice President, (1994-present),
Enfield, CT 06083-2200 Phoenix Duff & Phelps Fund (1996-present), and National
Securities & Research Corporation (1994-1996). Vice President,
Investment Operations, Phoenix Home Life Mutual Insurance
Company. Various positions with Phoenix Home Life Mutual
Insurance Company (1987-1994).
27
<PAGE>
Position(s) with Principal Occupation(s)
Name, Address and Age the Fund During Past Five Years
- --------------------------- ------------------- ----------------------------------------------------------------
Dorothy J. Skaret (44) Vice President Director, Money Market Trading (1996-present), Vice President
(1991-1996), Phoenix Investment Counsel Inc. Director, Money
Market Trading (1996-present), Vice President (1993-1996),
National Securities & Research Corporation. Vice President,
Phoenix Series Fund (1990-present), The Phoenix Edge Series Fund
(1990-present), Phoenix-Aberdeen Series Fund (1996-present),
Phoenix Realty Securities, Inc. (1995-present), and Phoenix Duff
& Phelps Institutional Mutual Funds (1996-present). Director,
Public Fixed Income, Phoenix Home Life Mutual Insurance Company
(1991-1995). Various positions with Phoenix Home Life Mutual
Insurance Company (1986-1991).
James D. Wehr (39) Vice President Managing Director, Fixed Income (1996-present), Vice President
(1991-1996), Phoenix Investment Counsel, Inc. Managing Director,
Fixed Income (1996-present), Vice President (1993-1996),
National Securities & Research Corporation. Vice President,
Phoenix Multi-Portfolio Fund (1988-present), Phoenix Series Fund
(1990-present), The Phoenix Edge Series Fund (1991-present),
Phoenix California Tax Exempt Bonds, Inc. (1993-present) and
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Managing Director, Public Fixed Income, Phoenix Home Life
Insurance Company (1991-1995). Various positions with Phoenix
Home Life Mutual Insurance Company (1981-1991).
Nancy G. Curtiss (44) Treasurer Treasurer (1996-present), Vice President, Fund Accounting
(1994-1996), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix-Aberdeen Series Fund
(1996-present), and Phoenix Duff & Phelps Institutional Mutual
Funds (1996-present). Second Vice President and Treasurer, Fund
Accounting, Phoenix Home Life Mutual Insurance Company
(1994-1995). Various positions with Phoenix Home Life Mutual
Insurance Company (1987-1994).
G. Jeffrey Bohne (49) Secretary Vice President, Mutual Fund Customer Service, Phoenix Equity
101 Munson Street Planning Corporation (1996-present). Vice President, Transfer
Greenfield, MA 01301 Agent Operations, Phoenix Equity Planning Corporation
(1993-1996). Clerk, Phoenix Investment Counsel, Inc.
(1995-present). Secretary, the Phoenix Funds (1993-present), and
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Clerk and Secretary, Phoenix-Aberdeen Series Fund
(1996-present). Vice President and General Manager, Phoenix Home
Life Mutual Insurance Company (1993-present). Assistant Vice
President, Phoenix Home Life Mutual Insurance Company
(1992-1993).
</TABLE>
*Trustees identified with an asterisk are considered to be interested persons
of the Trust (within the meaning of the Investment Company Act of 1940, as
amended) because of their affiliation with Phoenix Investment Counsel, Inc.,
or Phoenix Equity Planning Corporation or Phoenix Duff & Phelps Corporation.
At October 31, 1996, the Trustees and officers as a group owned less than 1%
of the then outstanding shares of the Trust.
For purposes hereof, "National Affiliated Investment Companies" refers to
those mutual funds advised by National Securities & Research Corporation.
For services rendered to the Trust during the fiscal year ended October 31,
1996, the Trustees received an aggregate of $127,468 from the Trust as
Trustees' fees. For his services on the Boards of the Phoenix Funds, each
Trustee who is not a full-time employee of the Adviser or any of its
affiliates currently receives a retainer at the annual rate of $40,000 and
$2,500 per joint meeting of the Boards. Each Trustee who serves on the Audit
Committee receives a retainer at the annual rate of $2,000 and $2,000 per
joint Audit Committee meeting attended. Each Trustee who serves on the
Nominating Committee receives a retainer at the annual rate of $1,000 and
$1,000 per joint Nominating Committee meeting attended. Each Trustee who
serves on the Executive Committee and who is not an interested person of the
Trust receives a retainer at the annual rate of $1,000 and $1,000 per joint
Executive Committee meeting attended. Trustee fee costs are allocated equally
to each of the Series and the Funds within the Phoenix Funds complex. The
foregoing fees do not include reimbursement of expenses incurred in
connection with meeting attendance. Officers are compensated for their
services by the Adviser and receive no compensation from the Trust.
28
<PAGE>
For the Fund's last fiscal year ending October 31, 1996, the Trustees
received the following compensation:
<TABLE>
<CAPTION>
Total
Compensation
Pension or From Fund and
Aggregate Retirement Benefits Estimated Fund Complex
Compensation Accrued as Part Annual Benefits (11 Funds)
Name From Fund of Fund Expenses Upon Retirement Paid to Trustees
- ------------------------ -------------- ------------------- ---------------- -----------------
<S> <C> <C> <C> <C>
C. Duane Blinn $11,635* $53,750
Robert Chesek 10,933 50,750
E. Virgil Conway 13,018 60,000
Harry Dalzell-Payne 10,933 51,000
Francis E. Jeffries 0 0
Leroy Keith, Jr. 10,933 None None 50,750
Philip R. McLoughlin 0 for any for any 0
Everett L. Morris 7,700* Trustee Trustee 37,000
James M. Oates 12,555 57,750
Calvin J. Pedersen 0 0
Philip R. Reynolds 10,933 50,750
Herbert Roth, Jr. 13,720 63,000
Richard E. Segerson 12,555 58,000
Lowell P. Weicker, Jr. 12,555 57,750
</TABLE>
*This compensation (and the earnings thereon) was deferred pursuant to the
Trustees' Deferred Compensation Plan.
OTHER INFORMATION
Financial Statements
Financial information relating to the Trust is contained in the Annual
Report to Shareholders for the year ended October 31, 1996 and is available
by calling Equity Planning at (800) 243-4361, or by writing to Equity
Planning at 100 Bright Meadow Blvd., P.O. Box 2200, Enfield, Connecticut
06083-2200. The Annual Report is incorporated into this Statement of
Additional Information by reference. A copy of the Annual Report must precede
or accompany this Statement of Additional Information.
Independent Accountants
Price Waterhouse LLP with principal offices at 160 Federal Street, Boston,
MA 02110, has been selected independent accountants for the Fund. Price
Waterhouse LLP audits the Trust's annual financial statements and expresses
an opinion thereon.
29
<PAGE>
[FRONT COVER]
OCTOBER 31, 1996
Phoenix
Series Fund
Annual Report
Balanced Fund Series
Convertible Fund Series
Growth Fund Series
Aggressive Growth Fund Series
High Yield Fund Series
U.S. Government Securities Fund Series
Money Market Fund Series
[LOGOTYPE] PHOENIX
DUFF & PHELPS
PHOENIX
ANNUAL REPORT
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Chairman's
Message
Dear Shareholders:
We are pleased to provide this consolidated report for the Phoenix Series
Fund, covering the twelve months ended October 31, 1996.
In addition to the summary of economic and market activity outlined below,
this report includes portfolio commentary and a complete list of investments for
each Phoenix Series Fund.
The Economy and the Markets
Over this latest reporting period, the financial markets remained volatile
as Wall Street debated whether the U.S. economy was growing too fast. While a
robust economy may be good for corporate profits, it can also serve as a
catalyst for higher inflation. Although economic activity has clearly
accelerated since year-end 1995 and labor markets are currently very tight, we
have yet to see any conclusive evidence of broad price increases as measured by
the Consumer Price Index (CPI) and Producer Price Index (PPI). Based on the
Federal Reserve's continued reluctance to raise short-term rates and the bond
market's strong rally since mid-September, it would appear that some of the
inflation fears plaguing the financial markets have dissipated.
Despite increasing interest rates and waning corporate earnings momentum
during 1996, U.S. stock prices forged higher, fueled by unprecedented cash
inflows into equity mutual funds and continued corporate share buybacks. As
measured by the Standard & Poor's 500 Composite Index, the U.S. stock market
posted an impressive total return of 24.20% over this twelve month period.
Although this remarkable rally dates back to December 1994, the past year has
been one of tremendous rotation among various sectors of the stock market--a
manifestation of increasing investor uncertainty over the direction of interest
rates and the economy.
After a disappointing first half of 1996, the bond market began showing
signs of renewed strength as concerns over inflation diminished. During this
latest reporting cycle, interest rates fluctuated dramatically, as nervous
investors pushed the yield on the bell weather 30-year Treasury bond as high as
7.19% and as low as 5.95%. Despite all the market gyrations, the "long bond"
finished the fiscal reporting period at 6.64%--only 0.35% higher than where it
stood one year ago. Relative to the stellar gains of 1995, the bond market, as
measured by the Lehman Brothers Aggregate Bond Index, posted only a modest
return of 5.85% over the last twelve months.
Outlook
As we move closer to 1997, we are encouraged to see that much of the
pessimism that has afflicted the bond market this year appears to have subsided.
Although concerns over inflation are still present, the latest reports suggest
that we could see more moderate economic growth going forward. If this outlook
is correct, it will not only be a welcome relief for fixed-income investors, but
will also add further confidence to an already bullish stock market. Since we
view the U.S. equity market as being mature and late-cycle, we continue to
believe that stock selection will be critical and that growth-oriented companies
should provide market leadership in this type of investment environment.
On behalf of the Phoenix Funds, I want to thank you for investing with us.
We look forward to continuing to serve your investment needs.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin, Chairman
<PAGE>
Table of Contents
Page
Equity Funds
The Balanced Fund Series 1
The Convertible Fund Series 10
The Growth Fund Series 18
The Aggressive Growth Fund Series 26
Fixed Income Funds
The High Yield Fund Series 33
The U.S. Government Securities Fund Series 41
The Money Market Fund Series 47
Notes to Financial Statements 53
Fund Features and General Information 58
<PAGE>
- -------------------------------------------------------------------------------
BALANCED FUND SERIES
- -------------------------------------------------------------------------------
INVESTMENT ADVISER'S REPORT
Aided by the long bull market in U.S. stocks, Phoenix Balanced Fund posted
double-digit gains during this fiscal reporting period. For the twelve months
ended October 31, 1996, Class A shares provided a total return of 12.03% and
Class B shares returned 11.24%. Despite these solid results, the Fund trailed
its composite benchmark, which returned 15.64% over the same period.* All of
these figures assume reinvestment of any distributions, but exclude the
effect of sales charges.
The Fund's results over this latest reporting cycle were held back
primarily because of the relative underperformance of our consumer cyclical,
health care and consumer staples stocks. Positive contributors to performance
included excellent stock selection within the energy and basic materials
sectors as well as a modest overweighting within the strongly performing
capital goods group. Additionally, the portfolio's fixed-income segment
continued to significantly outperform its benchmark, the Lehman Brothers
Aggregate Bond Index, throughout this reporting period.
Moving ahead, we have positioned the equity portion of the Fund for a less
robust economic climate and slower earnings growth. In this type of
environment, "true-growth" companies have historically provided superior
returns relative to "value" stocks. More specifically, our strategy
emphasizes high-quality, large-cap growth stocks and focuses on such
compelling investment themes as 21st Century Medicine (health care), Hybrid
Network (technology) and Deregulating Financial Services (financial
services). In terms of our fixed-income allocation, we continue to utilize
our sector rotation approach with a strong emphasis on U.S. treasuries and
mortgage-backed securities. As of October 31, 1996, the Fund's asset
allocation mix was 55% equity, 38% fixed income and 7% cash equivalents.
*The Balanced Benchmark is calculated by Frank Russell Company based on
the performance of the following indexes: 55% S&P 500, 35% Lehman Brothers
Aggregate Bond Index and 10% U.S. Treasury Bills.
INVESTOR PROFILE
The Balanced Fund is best suited for an investor seeking to supplement
current income while maintaining the potential for future growth and the
conservation of capital.
1
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund Series
- --------------------------------------------------------------------------------
[LINE CHART]
Phoenix
Balanced Balanced
Benchmark Fund --
S&P 500* Index** Class A
-------- ----- -------
1986 10000 10000 9525
1987 10641 10619 10551
1988 12183 11982 10776
1989 15377 14310 12996
1990 14221 14152 13608
1991 18985 17599 17181
1992 20875 19265 18859
1993 23986 21705 20730
1994 24929 21981 20050
1995 31514 26478 23161
1996 39140 30619 25949
[/LINE CHART]
<TABLE>
<CAPTION>
Average Annual Total Returns for the Periods Ending 10/31/96 From Inception
7/15/94 to
1 Year 5 Years 10 Years 10/31/96
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A with 4.75% sales charge 6.71% 7.54% 10.00% --
- --------------------------------------------------------------------------------
Class A at net asset value 12.03% 8.60% 10.54% --
- --------------------------------------------------------------------------------
Class B with CDSC 7.24% -- -- 10.18%
- --------------------------------------------------------------------------------
Class B at net asset value 11.24% -- -- 11.33%
- --------------------------------------------------------------------------------
Balanced Benchmark** 15.64% 11.71% 11.84% 24.21%***
- --------------------------------------------------------------------------------
S&P 500 Index* 24.20% 15.57% 14.62% 16.73%
- --------------------------------------------------------------------------------
</TABLE>
This chart assumes an initial investment of $10,000 made on 10/31/86 for Class A
shares. The total return for Class A shares reflects the maximum sales charge of
4.75% on the initial investment and assumes reinvestment of dividends and
capital gains. Class B share performance will be greater or less than that shown
based on differences in inception date, fees and sales charges. The total return
(since inception 7/15/94) for Class B shares reflects the 5% contingent deferred
sales charge (CDSC), which is applicable on all shares redeemed during the 1st
year after purchase and 4% for all shares redeemed during the 2nd year after
purchase (scaled down to 3%-3rd year, 2%-4th and 5th year and 0% thereafter).
Returns indicate past performance, which is not predictive of future
performance. Investment return and net asset value will fluctuate so that your
shares, when redeemed, may be worth more or less than the original cost.
*The S&P 500 Stock Index is an unmanaged but commonly used measure of stock
total return performance. The S&P 500 performance does not reflect sales
charges.
**The Balanced Benchmark is calculated based upon the performance of the
following indexes: 55% S&P 500/35% Lehman Brothers' Aggregate Bond Index/10%
U.S. Treasury Bills and is produced by Frank Russell Company. The index's
performance does not reflect sales charges.
***Index information from 7/31/94 to 10/31/96.
2
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund Series
- --------------------------------------------------------------------------------
INVESTMENTS AT OCTOBER 31, 1996
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- ---------------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES--23.2%
U.S. Treasury Notes--13.7%
U.S. Treasury Notes 4.75%, '98 AAA $ 30,000 $ 29,492,700
U.S. Treasury Notes 6.375%, '99 AAA 50,000 50,630,000
U.S. Treasury Notes 6.875%, '00 AAA 61,000 62,660,420
U.S. Treasury Notes 6.25%, '01 AAA 120,000 120,806,040
-----------
263,589,160
-----------
U.S. Treasury Bonds--5.4%
U.S. Treasury Bonds 6.50%, '06 AAA 102,505 103,530,050
-----------
Agency Mortgage-Backed Securities--4.1%
GNMA 6.50%, '23-'26 AAA 82,268 79,097,342
-----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $445,202,047) 446,216,552
-----------
NON-CONVERTIBLE BONDS--8.3%
Asset-Backed Securities--1.1%
Airplanes Pass Through Trust 1D 10.875%, '19 BB 2,050 2,224,250
Fleetwood Credit Corp. 96-B, A 6.90%, '12 AAA 4,027 4,088,579
Green Tree Financial Corp. 96-2, M1 7.60%, '27 AA- 7,150 7,125,422
Green Tree Financial Corp. 96-4, M1 7.75%, '27 AA- 3,475 3,558,400
Green Tree Financial Corp. 96-4, A6 7.40%, '27 AAA 4,500 4,561,172
-----------
21,557,823
-----------
Non-Agency Mortgage-Backed Securities--6.7%
CS First Boston Mtg. 95-AE1, B 7.182%, '27
AA- 6,260 6,236,525
DLJ Mortgage Corp. 96-CF1, A1B 144A 7.58%, '28 (c) AAA 4,975 5,142,906
G.E. Capital Mortgage Service 96-8, M 7.25%, '26 AA 4,186 4,096,883
Lehman Commercial Conduit 95-C2, B 7.184%, '05 AA 6,442 6,462,401
Merrill Lynch Mortgage, Inc. 95-C2, B 7.53%, '21 AA(d) 3,277 3,335,459
Merrill Lynch Mortgage, Inc. 95-C3, B 7.149%, '25 AA 7,500 7,422,656
Merrill Lynch Mortgage, Inc. 96-C1, B 7.42%, '28 AA 7,080 7,148,587
Nationslink Funding Corp. 96-1, B 7.69%, '05 AA 5,907 6,045,426
Prudential Home Mortgage Securities 93-L, 2B3 144A 6.641%, '23
(c) A(d) 5,000 4,678,125
Residential Asset Securitization Trust 96-A8, C2 8%, '26 AAA 4,497 4,572,887
Residential Funding Mortgage 96-S8, A4 6.75%, '11 AAA 2,787 2,739,822
Non-Agency Mortgage-Backed Securities--continued
Residential Funding Mortgage 96-S1, A11 7.10%, '26 AAA $ 7,000 $ 6,698,125
Residential Funding Mortgage 96-S4, M1 7.25%, '26 AA 5,691 5,537,803
Resolution Trust Corp. 93-C1, B 8.75%, '24 AA(d) 5,675 5,822,195
Resolution Trust Corp. 95-C1, B 6.90%, '27 AA(d) 6,900 6,805,125
Resolution Trust Corp. 95-C2, B 6.80%, '27 AA(d) 14,381 13,981,425
Resolution Trust Corp. 95-2, M2 7.009%, '29 AA(d) 4,965 4,959,018
Securitized Asset Sales 93-J, 2B 6.808%, '23 A(d) 7,290 6,804,736
Structured Asset Securities Corp. 95-C1, C 7.375%, '24 A 10,151 10,065,351
Structured Asset Securities Corp. 95-C4, B 7%, '26 AA 5,000 4,892,188
Structured Asset Securities Corp. 96-CFL, C 6.525%, '28 A 5,460 5,291,081
-----------
128,738,724
-----------
Paper & Forest Products--0.2%
Buckeye Cellulose Corp. 9.25%, '08 BB- 4,185 4,237,312
-----------
Publishing, Broadcasting, Printing & Cable--0.1%
Rogers Communications, Inc. 9.125%, '06 BB- 1,000 945,000
-----------
Truckers & Marine--0.1%
Teekay Shipping Corp. 8.32%, '08 BB 1,675 1,628,938
-----------
Utility--Gas--0.1%
Petropower Funding 144A 7.36%, '14 (c) BBB 2,900 2,782,492
-----------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $159,703,819) 159,890,289
-----------
FOREIGN GOVERNMENT SECURITIES--3.0%
Argentina--0.5%
Republic of Argentina Discount L-GL Euro 6.438%, '23 (f) BB- 9,500 6,893,437
Republic of Argentina Par L-GP 5.25%, '23 (f) BB- 5,750 3,424,844
-----------
10,318,281
-----------
Brazil--0.6%
Republic of Brazil Discount Series ZL Euro 6.50%, '24 (f) B+ 8,500 6,268,750
Republic of Brazil Par Z-L Euro 4.25%, '24 (f) B(d) 9,000 5,400,000
-----------
11,668,750
-----------
See Notes to Financial Statements
3
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund Series
- --------------------------------------------------------------------------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- ---------------
Colombia--0.7%
Republic of Colombia 7.25%, '03 BBB- $ 8,950 $ 8,612,496
Republic of Colombia Euro
9%, '97 BBB- 5,000 5,053,800
-------------
13,666,296
-------------
Mexico--0.7%
United Mexican Discount B Euro 6.391%, '19 (e) (f) BB 8,500 6,991,250
United Mexican States Series B Euro 6.25%, '19 (e) BB 3,500 2,454,375
United Mexican States 144A 7.688%, '01 (c) (f) BAA(d) 4,235 4,236,270
-------------
13,681,895
-------------
Panama--0.5%
Panama IRB 144A 3.50%, '14 (c) (f) NR 7,000 4,620,000
Panama PDI 144A 6.75%, '16 (c) (f) NR 6,000 4,462,500
-------------
9,082,500
-------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $54,110,016) 58,417,722
-------------
FOREIGN NON-CONVERTIBLE BONDS--0.4%
Indonesia--0.2%
Asia Pulp & Paper Co. Yankee 11.75%, '05 BB 3,545 3,682,369
-------------
Sweden--0.2%
Astra Overseas Financial 144A 8.75%, '03 (c) NR 4,100 4,100,000
-------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $7,584,277) 7,782,369
-------------
MUNICIPAL BONDS--2.5%
California--1.5%
Kern County Pension Obligation Taxable 7.26%, '14 AAA 6,830 6,771,399
Long Beach Pension Obligation Taxable 6.87%, '06 AAA 3,090 3,070,966
Orange County Pension Series A Taxable 7.62%, '08 AAA 9,310 9,706,140
San Bernardino County Obligation Revenue Taxable 6.87%, '08 AAA 1,480 1,462,003
San Bernardino County Obligation Revenue Taxable 6.94%, '09 AAA 4,035 4,000,743
Ventura County Pension Taxable 6.58%, '06 AAA 3,560 3,459,786
-------------
28,471,037
-------------
Florida--0.9%
Dade County Educational Facs Authority 5.75%, '20 AAA 975 983,063
Florida--continued
Miami Beach Special Obligation Taxable 8.60%, '21 AAA $ 11,675 $12,686,522
University Miami Exchange Revenue A 7.65%, '20 AAA 3,460 3,458,789
-------------
17,128,374
-------------
Virginia--0.1%
Newport News Taxable Series B 7.05%, '25 AA- 1,500 1,427,415
-------------
TOTAL MUNICIPAL BONDS
(Identified cost $47,081,108) 47,026,826
-------------
CONVERTIBLE BONDS--0.5%
Retail--0.5%
Staples, Inc. Subordinate Debenture Convertible 144A 4.50%, '00
(c) B+ 10,000 10,400,000
-------------
TOTAL CONVERTIBLE BONDS
(Identified cost $10,000,000) 10,400,000
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------
<S> <C> <C>
COMMON STOCKS--53.2%
Aerospace & Defense--1.6%
Boeing Co. 200,100 19,084,537
United Technologies Corp. 92,500 11,909,375
-----------
30,993,912
-----------
Auto & Truck Parts--0.6%
Lear Corp. (b) 300,600 11,122,200
-----------
Banks--2.7%
BankAmerica Corp. 88,000 8,052,000
Chase Manhattan Corp. 262,200 22,483,650
Citicorp 221,600 21,938,400
-----------
52,474,050
-----------
Beverages--1.6%
Coca-Cola Co. 375,000 18,937,500
PepsiCo, Inc. 374,500 11,094,562
-----------
30,032,062
-----------
Chemical--1.7%
Du Pont (E.I.) de Nemours & Co. 75,000 6,956,250
Monsanto Co. 650,000 25,756,250
-----------
32,712,500
-----------
Computer Software & Services--3.4%
Computer Associates International, Inc. 350,000 20,693,750
First Data Corp. 266,700 21,269,325
Netscape Communications Corp. (b) 285,300 12,624,525
Oracle Corp. (b) 250,000 10,578,125
-----------
65,165,725
-----------
Conglomerates--0.7%
AlliedSignal, Inc. 200,000 13,100,000
-----------
Cosmetics & Soaps--1.5%
Colgate Palmolive Co. 10,600 975,200
Gillette Co. 250,000 18,687,500
Procter & Gamble Co. 100,000 9,900,000
-----------
29,562,700
-----------
</TABLE>
See Notes to Financial Statements
4
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ----------------
<S> <C> <C>
Diversified Financial Services--3.2%
Conseco, Inc. 200,000 $ 10,700,000
Donaldson Lufkin & Jenrette 150,000 4,818,750
First USA, Inc. 300,000 17,250,000
MBNA Corp. 170,000 6,417,500
Travelers Group, Inc. 401,200 21,765,100
-------------
60,951,350
Electrical Equipment--2.9% -------------
General Electric Co. 400,000 38,700,000
Honeywell, Inc. 175,000 10,871,875
Westinghouse Electric Corp. 380,000 6,507,500
-------------
56,079,375
Electronics--2.5% -------------
Intel Corp. 434,000 47,685,750
-------------
Food--0.4%
Campbell Soup Co. 100,000 8,000,000
-------------
Healthcare--Diversified--0.5%
Bristol-Myers Squibb Co. 90,000 9,517,500
-------------
Healthcare--Drugs--2.6%
Amgen, Inc. (b) 125,000 7,664,063
Merck & Co., Inc. 287,200 21,288,700
Pfizer, Inc. 265,000 21,928,750
-------------
50,881,513
Hospital Management & Services--1.0% -------------
Columbia/HCA Healthcare Corp. 525,000 18,768,750
-------------
Insurance--2.4%
Allstate Corp. 400,000 22,450,000
American International Group, Inc. 194,400 21,116,700
TIG Holdings, Inc. 100,000 2,887,500
-------------
46,454,200
Lodging & Restaurants--1.3% -------------
Hilton Hotels Corp. 300,000 9,112,500
Marriott International, Inc. 280,000 15,925,000
-------------
25,037,500
-------------
Machinery--0.8%
Dover Corp. 299,000 15,361,125
-------------
Medical Products & Supplies--2.1%
Abbott Laboratories 100,000 5,062,500
Johnson & Johnson 214,300 10,554,275
Medtronic, Inc. 374,900 24,134,188
-------------
39,750,963
-------------
Natural Gas--1.5%
Anadarko Petroleum Corp. 175,000 11,134,375
Columbia Gas System, Inc. 85,000 5,163,750
Consolidated Natural Gas Co. 150,000 7,968,750
PanEnergy Corp. 140,000 5,390,000
-------------
29,656,875
-------------
Office & Business Equipment--3.2%
International Business Machines Corp. 194,100 25,038,900
Sun Microsystems, Inc. (b) 380,000 23,180,000
Xerox Corp. 300,000 13,912,500
-------------
62,131,400
-------------
Oil--1.0%
Chevron Corp. 300,000 19,725,000
-------------
Oil Service & Equipment--3.7%
Baker Hughes, Inc. 366,600 $ 13,060,125
ENSCO International, Inc. (b) 432,900 18,722,925
Halliburton Co. 132,700 7,514,137
Schlumberger Ltd. 100,000 9,912,500
Tidewater, Inc. 244,700 10,705,625
Transocean Offshore, Inc. 175,000 11,068,750
-------------
70,984,062
-------------
Polution Control--0.2%
U.S.A. Waste Services, Inc. (b) 100,000 3,200,000
-------------
Professional Services--2.1%
CellNet Data Systems (b) 91,500 1,338,188
Corrections Corporations of America (b) 357,100 9,284,600
HFS, Inc. (b) 251,800 18,444,350
Marsh & McLennan Cos., Inc. 100,000 10,412,500
-------------
39,479,638
-------------
Retail--3.5%
Federated Department Stores, Inc. (b) 300,000 9,900,000
Home Depot, Inc. 320,000 17,520,000
Lowe's Companies, Inc. 125,000 5,046,875
Melville Corp. 450,000 16,762,500
Petsmart, Inc. (b) 635,900 17,169,300
-------------
66,398,675
-------------
Retail--Food--1.2%
Safeway, Inc. (b) 529,100 22,685,162
-------------
Telecommunications Equipment--2.1%
Cisco Systems, Inc. (b) 450,000 27,843,750
Newbridge Networks Corp. (b) 422,100 13,348,913
-------------
41,192,663
Textile & Apparel--1.2% -------------
Nike, Inc. Class B 400,000 23,550,000
-------------
TOTAL COMMON STOCKS
(Identified cost $905,663,332) 1,022,654,650
-------------
FOREIGN COMMON STOCKS--1.5%
Oil--1.5%
British Petroleum PLC ADR (United Kingdom) 75,000 9,646,875
Royal Dutch Petroleum Co. ADR NY Reg.
(Netherlands) 120,000 19,845,000
-------------
29,491,875
TOTAL FOREIGN COMMON STOCKS -------------
(Identified cost $28,187,373) 29,491,875
-------------
TOTAL LONG-TERM INVESTMENTS--92.6%
(Identified cost $1,657,531,972) 1,781,880,283
-------------
</TABLE>
See Notes to Financial Statements
5
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -----------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--8.0%
Commercial Paper--6.8%
CXC, Inc. 5.70%, 11-1-96 A-1+ $ 6,180 $ 6,180,000
Amoco Co. 5.20%, 11-6-96 A-1+ 1,165 1,164,159
Shell Oil Co. 5.20%, 11-6-96 A-1+ 1,185 1,184,144
Coca-Cola Co. 5.18%, 11-7-96 A-1+ 13,145 13,133,651
Corporate Receivables Corp. 5.23%, 11-7-96 A-1 25,000 24,978,208
Gannett Co. 5.23%, 11-7-96 A-1 5,000 4,995,642
Southwestern Bell Telephone Co. 5.37%, 11-14-96 A-1+ 930 928,021
Beta Finance, Inc. 5.50%, 11-15-96 A-1+ 1,990 1,985,744
Preferred Receivables Funding Corp. 5.26%,
11-19-96 A-1 18,575 18,526,148
McKenna Triangle National Corp. 5.25%, 12-5-96 A-1+ 13,085 13,020,120
Private Export Funding Corp. 5.45%, 12-5-96 A-1+ 5,000 4,973,951
Exxon Imperial U.S., Inc. 5.23%, 12-11-96 A-1+ 12,500 12,427,361
Cargill, Inc. 5.37%, 12-12-96 A-1+ 4,280 4,253,824
Minnesota Mining & Manufacturing Co. 5.21%,
12-20-96 A-1+ 16,826 16,698,012
Private Export Funding Corp. 5.30%, 1-28-97 A-1+ 5,000 4,934,500
Beta Finance, Inc. 5.38%, 2-25-97 A-1+ 2,000 1,965,560
-------------
131,349,045
-------------
Federal Agency Securities--1.2%
Federal National Mortgage Assoc. 5.26%, 11-18-96 $ 2,500 $ 2,493,398
Federal National Mortgage Assoc. 5.25%, 11-27-96 2,620 2,609,806
Federal National Mortgage Assoc. 5.63%, 12-19-96 5,000 5,002,088
Federal Home Loan Banks 5.28%, 3-27-97 5,000 4,893,850
Federal Farm Credit Bank 5.40%, 4-1-97 3,000 3,001,530
Federal Farm Credit Bank 5.64%, 11-3-97(f) 5,000 5,003,700
-------------
23,004,372
-------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $154,352,109) 154,353,417
-------------
TOTAL INVESTMENTS--100.6%
(Identified cost $1,811,884,081) 1,936,233,700(a)
Cash and receivables, less liabilities--(0.6%) (12,719,060)
-------------
NET ASSETS--100.0% $1,923,514,640
=============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $147,116,372 and gross
depreciation of $24,101,011 for income tax purposes. At October 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$1,813,218,339.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1996, these securities amounted to a value of $40,422,293 or 2.1% of net
assets.
(d) As rated by Moody's, Fitch or Duff and Phelps.
(e) Mexico Value Recovery Euro Rights incorporated as a unit.
(f) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
ADR--American Depository Receipt
See Notes to Financial Statements
6
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value
(Identified cost $1,811,884,081) $1,936,233,700
Short-term investments held as collateral for loaned
securities 48,955,252
Cash 54,100
Receivables
Investment securities sold 8,618,448
Fund shares sold 274,704
Dividends and interest 7,051,474
---------------
Total assets 2,001,187,678
---------------
Liabilities
Payables
Collateral on securities loaned 48,955,252
Investment securities purchased 19,274,697
Fund shares repurchased 7,168,538
Investment advisory fee 830,593
Transfer agent fee 690,689
Distribution fee 430,011
Financial agent fee 49,608
Trustees' fee 11,502
Accrued expenses 262,148
---------------
Total liabilities 77,673,038
---------------
Net Assets $1,923,514,640
===============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $1,599,486,131
Undistributed net investment income 4,825,975
Accumulated net realized gain 194,852,915
Net unrealized appreciation 124,349,619
---------------
Net Assets $1,923,514,640
===============
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,897,305,528) 108,037,856
Net asset value per share $17.56
Offering price per share
$17.56/(1-4.75%) $18.44
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $26,209,112) 1,494,605
Net asset value and offering price per share $17.54
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends $ 16,952,843
Interest 63,756,623
Security lending 794,362
------------
Total investment income 81,503,828
------------
Expenses
Investment advisory fee 11,281,357
Distribution fee--Class A 5,381,611
Distribution fee--Class B 223,213
Financial agent fee 652,490
Transfer agent 3,692,149
Printing 475,575
Custodian 199,667
Professional 72,566
Registration 47,619
Trustees 19,434
Miscellaneous 18,408
------------
Total expenses 22,064,089
------------
Net investment income 59,439,739
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 195,766,827
Net realized loss on foreign currency transactions (300)
Net change in unrealized appreciation (depreciation) on
investments (9,808,717)
------------
Net gain on investments 185,957,810
------------
Net increase in net assets resulting from operations $245,397,549
============
</TABLE>
See Notes to Financial Statements
7
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
----------------- -----------------
<S> <C> <C>
From Operations
Net investment income $59,439,739 $79,057,337
Net realized gain 195,766,527 145,666,021
Net change in unrealized appreciation (depreciation) (9,808,717) 118,762,724
----------- -----------
Increase in net assets resulting from operations 245,397,549 343,486,082
----------- -----------
From Distributions to Shareholders
Net investment income--Class A (62,440,078) (77,388,590)
Net investment income--Class B (463,570) (288,920)
Net realized gains--Class A (124,234,079) --
Net realized gains--Class B (996,128) --
----------- -----------
Decrease in net assets from distributions to shareholders (188,133,855) (77,677,510)
----------- -----------
From Share Transactions
Class A
Proceeds from sales of shares (8,800,790 and 12,302,449 shares,
respectively) 149,289,059 194,015,940
Net asset value of shares issued from reinvestment of
distributions
(10,383,411 and 4,436,794 shares, respectively) 172,128,352 70,169,584
Cost of shares repurchased (48,762,578 and 49,930,419 shares,
respectively) (825,995,436) (784,885,316)
----------- -----------
Total (504,578,025) (520,699,792)
----------- -----------
Class B
Proceeds from sales of shares (616,550 and 769,217 shares,
respectively) 10,464,882 12,085,660
Net asset value of shares issued from reinvestment of
distributions
(80,135 and 16,234, respectively) 1,326,954 261,080
Cost of shares repurchased (199,574 and 91,818 shares,
respectively) (3,374,422) (1,481,587)
----------- -----------
Total 8,417,414 10,865,153
----------- -----------
Decrease in net assets from share transactions (496,160,611) (509,834,639)
----------- -----------
Net decrease in net assets (438,896,917) (244,026,067)
Net Assets
Beginning of period 2,362,411,557 2,606,437,624
----------- -----------
End of period (including undistributed net investment income of
$4,825,975 and $8,469,986, respectively) $1,923,514,640 $2,362,411,557
=========== ===========
</TABLE>
See Notes to Financial Statements
8
<PAGE>
- --------------------------------------------------------------------------------
Balanced Fund Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------------
Year Ended October 31,
1996 1995 1994 1993 1992
---------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.04 $15.23 $16.64 $15.92 $16.05
Income from investment operations
Net investment income 0.48 0.52 0.48 0.46 0.52
Net realized and unrealized gain (loss) 1.46 1.80 (1.01) 1.08 0.92
------- ------- ------- ------- -------
Total from investment operations 1.94 2.32 (0.53) 1.54 1.44
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income (0.49) (0.51) (0.49) (0.46) (0.54)
Dividends from net realized gains (0.93) -- (0.39) (0.36) (1.03)
------- ------- ------- ------- -------
Total distributions (1.42) (0.51) (0.88) (0.82) (1.57)
------- ------- ------- ------- -------
Change in net asset value 0.52 1.81 (1.41) 0.72 (0.13)
------- ------- ------- ------- -------
Net asset value, end of period $17.56 $17.04 $15.23 $16.64 $15.92
======= ======= ======= ======= =======
Total return(1) 12.03% 15.52% -3.28% 9.92% 9.77%
Ratios/supplemental data:
Net assets, end of period (thousands) $1,897,306 $2,345,440 $2,601,808 $3,126,014 $2,146,726
Ratio to average net assets of:
Operating expenses 1.01% 1.02% 0.96% 0.95% 0.98%
Net investment income 2.74% 3.27% 3.03% 2.88% 3.55%
Portfolio turnover 191% 197% 159% 130% 136%
Average commission rate paid(4) $0.0546 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class B
-----------------------------------
From
Inception
Year Ended October 31, 7/15/94 to
1996 1995 10/31/94
----------- --------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period $17.01 $15.23 $15.27
Income from investment operations
Net investment income 0.35 0.40 0.09
Net realized and unrealized gain (loss) 1.47 1.80 (0.04)
------- ------- -------
Total from investment operations 1.82 2.20 0.05
------- ------- -------
Less distributions
Dividends from net investment income (0.36) (0.42) (0.09)
Dividends from net realized gains (0.93) -- --
------- ------- -------
Total distributions (1.29) (0.42) (0.09)
------- ------- -------
Change in net asset value 0.53 1.78 (0.04)
------- ------- -------
Net asset value, end of period $17.54 $17.01 $15.23
======= ======= =======
Total return(1) 11.24% 14.68% 0.34%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $26,209 $16,971 $4,629
Ratio to average net assets of:
Operating expenses 1.76% 1.78% 1.65%(2)
Net investment income 1.96% 2.46% 2.36%(2)
Portfolio turnover 191% 197% 159%
Average commission rate paid(4) $0.0546 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized
(3) Not annualized
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, or spreads on shares traded on a principal basis.
See Notes to Financial Statements
9
<PAGE>
- --------------------------------------------------------------------------------
CONVERTIBLE FUND SERIES
- --------------------------------------------------------------------------------
INVESTMENT ADVISER'S REPORT
Supported by the strong performance in the convertible securities market,
Phoenix Convertible Fund posted double-digit gains over this latest reporting
period. For the twelve months ended October 31, 1996, the Fund's Class A
shares provided a total return of 13.55% and Class B shares returned 12.72%.
Despite these solid one-year results, the Fund lagged the CS First Boston
Convertible Securities Index, which earned 16.11% for the same period*. All
of these figures assume reinvestment of any distributions, but exclude the
effect of sales charges.
Over this latest reporting cycle, the Fund's typically conservative
investment profile held back its overall results in this rapidly rising
market. To a lesser degree, the portfolio's exposure to the media industry
during the earlier part of the year also hindered returns. Positive
contributors to performance included our strong stock selection in both the
energy and technology sectors. Some of the Fund's biggest individual gainers
for the period included U.S. Surgical, Perkin-Elmer, California Energy and
Intel.
Moving ahead, we continue to find attractive growth areas in this extended
bull market. The Fund has currently focused its attention on such investment
themes as 21st Century Medicine (health care), Clean Energy Demand (energy)
and Deregulating Media (consumer cyclical). As always, we remain committed to
our goal of attaining upside participation in rising equity markets, while
providing some measure of protection against downside volatility. As of
October 31, 1996, the Fund's asset allocation mix was 71% convertible
securities, 26% common stock and 3% cash equivalents.
*The CS First Boston Convertible Securities Index is an unmanaged but
commonly used index that tracks the returns of approximately 300 convertible
bonds and preferred stocks rated "B-" or better by Standard & Poor's.
INVESTOR PROFILE
The Convertible Fund is best suited for an investor seeking to supplement
current income while maintaining the potential for growth.
10
<PAGE>
- --------------------------------------------------------------------------------
Convertible Fund Series
- --------------------------------------------------------------------------------
[LINE CHART]
First Boston
Convertible Convertible
Securities Fund --
S&P 500* Index** Class A
1986 10000 10000 9525
1987 10641 9830 10405
1988 12183 11266 10915
1989 15377 12679 12753
1990 14221 11217 13052
1991 18985 15020 15136
1992 20875 17343 17220
1993 23986 21600 19387
1994 24929 21215 19100
1995 31514 24496 21288
1996 39140 28441 24172
[/LINE CHART]
Average Annual Total Returns for the Periods Ending 10/31/96
<TABLE>
<CAPTION>
From Inception
7/15/94 to
1 Year 5 Years 10 Years 10/31/96
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A with 4.75% sales charge 8.15% 8.74% 9.23% --
- --------------------------------------------------------------------------------------------
Class A at net asset value 13.55% 9.81% 9.76% --
- --------------------------------------------------------------------------------------------
Class B with CDSC 8.72% -- -- 9.14%
- --------------------------------------------------------------------------------------------
Class B at net asset value 12.72% -- -- 10.29%
- --------------------------------------------------------------------------------------------
First Boston Convertible Securities Index** 16.11% 13.62% 11.02% 14.39%***
- --------------------------------------------------------------------------------------------
S&P 500 Index* 24.20% 15.57% 14.62% 24.21%
- --------------------------------------------------------------------------------------------
</TABLE>
This chart assumes an initial investment of $10,000 made on 10/31/86 for Class A
shares. The total return for Class A shares reflects the maximum sales charge of
4.75% on the initial investment and assumes reinvestment of dividends and
capital gains. Class B share performance will be greater or less than that shown
based on differences in inception date, fees and sales charges. The total return
(from inception 7/15/94) for Class B shares reflects the 5% contingent deferred
sales charge (CDSC), which is applicable on all shares redeemed during the 1st
year after purchase and 4% for all shares redeemed during the 2nd year after
purchase (scaled down to 3%-3rd year, 2%-4th and 5th year and 0% thereafter).
Returns indicate past performance, which is not predictive of future
performance. Investment return and net asset value will fluctuate so that your
shares, when redeemed, may be worth more or less than the original cost.
*The S&P 500 Index is an unmanaged but commonly used measure of stock total
return performance. The S&P 500 performance does not reflect sales charges.
**The First Boston Convertible Securities Index is an unmanaged but commonly
used index that tracks the returns of 250 to 300 convertible bonds and
preferreds rated B- or better by Standard and Poor's. The index's performance
does not reflect sales charges.
***Index information from 7/31/94 to 10/31/96.
11
<PAGE>
- --------------------------------------------------------------------------------
Convertible Fund Series
- --------------------------------------------------------------------------------
INVESTMENTS AT OCTOBER 31, 1996
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------------- ---------------
<S> <C> <C> <C>
CONVERTIBLE BONDS--57.1%
Advertising--1.5%
Interpublic Group Euro. Cv. 3.75%, '02 NR $ 2,000 $ 2,197,500
Interpublic Group Cv. 144A 3.75%, '02 (c) NR 1,000 1,098,750
------------
3,296,250
------------
Auto & Truck Parts--0.5%
Pep Boys Cv. 0%, '11 BBB- 2,000 1,112,500
------------
Banks--1.3%
Mitsubishi Bank Global Cv. 3%, '02 A+ 2,500 2,753,125
------------
Electrical Equipment--0.7%
General Signal Corp. Cv. 5.75%, '02 A- 500 552,500
Plasma & Materials Technology Cv. 7.125%, '01 NR 1,000 1,005,000
------------
1,557,500
------------
Electronics--0.5%
Altera Corp. Cv. 144A 5.75%, '02 (c) B 400 551,000
Analog Devices Cv. 3.50%, '00 BBB 500 580,625
------------
1,131,625
------------
Entertainment, Leisure & Gaming--8.5%
Comcast Corp. Cv. 3.375%,
'05 (e) BB- 5,000 4,318,750
Comcast Corp. Cv. 1.125%, '07 BB- 10,700 4,908,625
Time Warner, Inc., Hasbro Cv. 0%, '12 BBB- 3,000 1,110,000
Turner Broadcasting Cv. 144A 0%, '07 (c) BB- 4,000 1,905,000
Turner Warner, Inc. Cv. 0%, '13 BBB- 15,500 6,568,125
------------
18,810,500
------------
Food--2.3%
Grand Metropolitan PLC Cv. 144A 6.50%, '00 (c) A+ 4,250 4,988,438
------------
Healthcare--Diversified--6.3%
Roche Holdings, Inc. Cv. 144A 0%, '10 (c) NR 24,000 10,680,000
Sandoz Capital BVI Ltd. Cv. 144A 2%, '02 (c) NR 3,000 3,300,000
------------
13,980,000
------------
Healthcare--Drugs--2.3%
Alza Corp. Cv. 5%, '06 BBB- 2,000 1,905,000
Chiron Corp. Cv. 144A 1.90%, '00 (c) BBB+ 3,500 3,220,000
------------
5,125,000
------------
Insurance--2.1%
Chubb Corp. Cv. 6%, '98 AA $ 4,000 $ 4,675,000
------------
Lodging & Restaurants--0.4%
Marriott International, Inc. Cv. 144A 0%, '11 (c) NR 1,500 858,750
------------
Medical Products & Supplies--0.4%
Uromed Corp. Cv. 144A 6%,
'03 (c) NR 1,000 972,500
------------
Metals & Mining--1.5%
Agnico Eagle Mines Cv. 3.50%, '04 B+ 1,000 896,250
Coeur D'Alene Euro Cv. 6%, '02 B- 1,000 881,250
Inco Limited Cv. 7.75%, '16 BBB- 1,500 1,578,750
------------
3,356,250
------------
Natural Gas--2.7%
Apache Corp. Cv. 144A 6%,
'02 (c) BBB- 2,000 2,525,000
Consolidated Natural Gas Co. Cv. 7.25%, '15 A+ 3,250 3,485,625
------------
6,010,625
------------
Office & Business Equipment--0.6%
Conner Peripherals Cv. 6.50%, '02 BB+ 1,000 1,237,500
------------
Oil--0.5%
Pennzoil Co. Series US Cv. 4.75%, '03 BBB 1,000 1,169,900
------------
Oil Service & Equipment--1.7%
Baker Hughes, Inc. Cv. 0%, '08 A- 2,000 1,487,500
Nabors Industries, Inc. Cv. 5%, '06 BBB- 1,000 1,103,750
Pride Pete Services, Inc. Cv. 6.25%, '06 B- 750 1,155,000
------------
3,746,250
------------
Pollution Control--5.9%
Chemical Waste Management, Inc. Cv. 0%, '10 A 15,000 6,618,750
Molten Metal Technology Cv. 144A 5.50%, '06 (c) NR 2,750 1,925,000
WMX Technologies, Inc. Cv. 2%, '05 A 4,750 4,524,375
------------
13,068,125
------------
Publishing, Broadcasting, Printing & Cable--0.9%
Hollinger Lyons Cv. 0%, '13 BB- 6,000 2,062,500
------------
Retail--3.1%
Federated Department Stores, Inc. Cv. 5%, '03 BB- 1,000 1,120,000
Home Depot, Inc. Cv. 3.25%, '01 A+ 3,375 3,391,875
See Notes to Financial Statements
12
<PAGE>
- --------------------------------------------------------------------------------
Convertible Fund Series
- --------------------------------------------------------------------------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------------- ---------------
Retail--continued
Saks Holdings, Inc. Cv. 5.50%, '06 B $ 1,250 $ 1,303,125
The Sports Authority, Inc. 144A Cv. 5.25%, '01
(c) B 1,000 992,500
------------
6,807,500
------------
Retail--Drug--4.9%
Rite Aid Corp. Cv. 0%, '06 BBB 19,000 10,711,250
------------
Retail--Food--0.5%
Food Lion, Inc. Cv. 144A 5%, '03 (c) Aaa(d) 1,000 1,125,000
------------
Telecommunications Equipment--1.2%
BBN Corp. Cv. 6%, '12 Baa(d) 2,850 2,650,500
------------
Truckers & Marine--1.2%
Seacor Holdings, Inc. Cv. 144A 5.375%, '06 (c) BB+ 2,500 2,575,000
------------
Utility--Telephone--5.6%
U.S. West, Inc. Euro Cv. 0%, '11 BBB 35,000 12,425,000
------------
TOTAL CONVERTIBLE BONDS
(Identified cost $123,176,663) 126,206,588
------------
FOREIGN CONVERTIBLE BONDS--1.1%
Banks--0.6%
Sumitomo Bank International Cv. 0.75%, '01
(Japan) Aa(d) 128,000(f) 1,232,282
------------
Insurance--0.5%
Republic of Italy Cv. 5%, '01 Aaa(d) 1,000 1,005,000
------------
TOTAL FOREIGN CONVERTIBLE BONDS
(Identified cost $2,175,174) 2,237,282
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS--12.6%
Banks--0.5%
H.F. Ahmanson & Co. Cv. Pfd. 6% 16,000 1,082,000
---------
Chemical--1.0%
Merrill Lynch, IGL (STRYPES) Cv. Pfd. 55,000 2,158,750
---------
Computer Software & Services--0.5%
Vanstar Financial Trust 144A Cv. Pfd. 6.75% (c) 20,000 1,035,000
---------
Containers--1.0%
Crown Cork & Seal 4.50% 50,000 2,325,000
---------
Electrical Equipment--1.0%
Westinghouse Electric Corp. Cv. Pfd. 144A $1.30
(c) 150,000 2,306,250
---------
Entertainment, Leisure & Gaming--0.8%
Tyco Toys, Inc. Cv. Pfd. $0.4125 250,000 1,656,250
---------
Medical Products & Supplies--0.5%
U.S. Surgical Corp. Cv. Pfd. $2.20 Series A 30,000 1,200,000
---------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------- --------------
<S> <C> <C>
Metals & Mining--0.8%
Coeur D'Alene Cv. Pfd. 7% 35,000 $ 581,875
Freeport-McMoRan Copper Cv. Pfd. 7%, '02
(e) 40,000 1,090,000
------------
1,671,875
------------
Oil--3.9%
Chieftain International, Inc. Cv. Pfd. 40,500 1,209,937
Noram Financing Cv. Pfd. 13,000 828,750
Occidental Petroleum Corp. Cv. Pfd. 144A
$3.875 (c) 60,000 3,502,500
Parker & Parsley CAP LLC 144A (c) 20,000 1,135,000
Valero Energy Corp. Cv. Pfd. $3.125, '49 37,900 2,008,700
------------
8,684,887
------------
Oil Service & Equipment--0.6%
Noble Drilling Corp. Cv. Pfd. 29,000 1,355,750
------------
Publishing, Broadcasting, Printing & Cable--1.1%
American Radio Cv. Pfd. 144A 7% (c) 25,000 1,212,500
Merrill Lynch, Cox (STRYPES) Cv. Pfd. 6% 60,000 1,162,500
------------
2,375,000
------------
Telecommunications Equipment--0.5%
Global Star Telecom Cv. Pfd. 144A 6.50% (c) 16,000 752,000
TCI Pacific Communications Cv. Pfd. 5%, '06 5,000 415,000
------------
1,167,000
------------
Utility--Electric--0.4%
California Energy Capital Trust Cv. Pfd.
144A 6.25% (c) 15,000 877,500
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $25,182,936) 27,895,262
------------
COMMON STOCKS--24.9%
Airlines--1.5%
AMR Corp. (b) 40,400 3,393,600
------------
Autos & Trucks--1.1%
United Auto Group, Inc. (b) 71,300 2,450,937
------------
Computer Software & Services--1.0%
Microsoft Corp. (b) 8,500 1,166,625
Oracle Corp. (b) 25,200 1,066,275
------------
2,232,900
------------
Diversified Financial Services--0.7%
First USA, Inc. 26,600 1,529,500
------------
Diversified Miscellaneous--0.5%
Pioneer Hi Bred International, Inc. 16,100 1,080,712
------------
Electronic Equipment--0.8%
General Electric Co. 18,100 1,751,175
------------
Electronics--2.6%
Intel Corp. 14,400 1,582,200
Perkin Elmer Corp. 78,700 4,220,288
------------
5,802,488
------------
See Notes to Financial Statements
13
<PAGE>
- --------------------------------------------------------------------------------
Convertible Fund Series
- --------------------------------------------------------------------------------
SHARES VALUE
--------- --------------
Insurance--2.3%
Allstate Corp. 31,400 $ 1,762,325
American International Group, Inc. 15,300 1,661,963
Chubb Corp. 32,800 1,640,000
------------
5,064,288
------------
Lodging & Restaurants--1.4%
Sun International Hotels Ltd. (b) 65,200 3,080,700
------------
Medical Products & Supplies--0.5%
Guidant Corp. 25,100 1,157,737
------------
Natural Gas--3.6%
Columbia Gas System, Inc. 10,100 613,575
Consolidated Natural Gas Co. 16,100 855,312
Enron Corp. 27,400 1,274,100
KN Energy, Inc. 13,200 493,350
New Jersey Resources Corp. 8,100 223,763
Pacific Enterprises 35,500 1,091,625
PanEnergy Corp. 38,900 1,497,650
Questar Corp. 13,200 475,200
Tejas Gas Corp. (b) 13,200 536,250
Williams Companies, Inc. 16,100 841,225
------------
7,902,050
------------
Oil--5.5%
Atlantic Richfield Co. 26,200 3,471,500
Chevron Corp. 18,500 1,216,375
KCS Energy, Inc. 18,600 802,125
NGC Corp. 74,000 1,332,000
Noble Affiliates, Inc. 122,783 5,341,058
------------
12,163,058
------------
Oil Service & Equipment--2.2%
ENSCO International, Inc. (b) 28,000 1,211,000
Halliburton Co. 11,200 634,200
Pool Energy Services Co. (b) 30,000 442,500
Schlumberger Ltd. 7,000 693,875
Tidewater, Inc. 26,000 1,137,500
Weatherford Enterra, Inc. (b) 22,100 640,900
------------
4,759,975
------------
Telecommunications Equipment--0.5%
Cisco Systems, Inc. (b) 17,300 1,070,438
------------
Utility--Electric--0.6%
Calenergy, Inc. (b) 44,444 $ 1,288,889
------------
Utility--Gas--0.1%
MCN Corp. 9,100 250,250
------------
TOTAL COMMON STOCKS
(Identified cost $50,386,315) 54,978,697
------------
FOREIGN COMMON STOCKS--1.0%
Oil--1.0%
Royal Dutch Petroleum Co. ADR NY Reg.
(Netherlands) 13,000 2,149,875
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $2,139,448) 2,149,875
------------
TOTAL LONG-TERM INVESTMENTS--96.7%
(Identified cost $203,060,536) 213,467,704
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ --------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--5.2%
Commercial Paper--2.3%
CXC, Inc. 5.70%, 11-1-96 A-1+ $1,370 1,370,000
Potomac Electric Power 5.22%,
11-7-96 A-1 3,735 3,731,751
--------------
5,101,751
--------------
Federal Agency Securities--2.9%
Federal National Mortgage
Assoc. 5.17%, 11-5-96 3,385 3,383,055
Federal National Mortgage
Assoc. 5.18%, 11-5-96 3,090 3,088,222
--------------
6,471,277
--------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $11,573,028) 11,573,028
--------------
TOTAL INVESTMENTS--101.9%
(Identified cost $214,633,564) 225,040,732(a)
Cash and receivables, less liabilities--(1.9%) (4,220,043)
--------------
NET ASSETS--100.0% $220,820,689
==============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $15,266,089 and gross
depreciation of $4,850,882 for income tax purposes. At October 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$214,625,525.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1996, these securities amounted to a value of $47,537,688 or 21.5% of net
assets.
(d) As rated by Moody's, Fitch or Duff & Phelps.
(e) Variable or step coupon; interest rate shown reflects the rate currently
in effect.
(f) Par value represents Japanese Yen.
ADR -- American Depository Receipt
See Notes to Financial Statements
14
<PAGE>
- --------------------------------------------------------------------------------
Convertible Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value
(Identified cost $214,633,564) $225,040,732
Short-term investments held as collateral for loaned
securities 6,226,300
Cash 8,390
Receivables
Dividends and interest 1,046,668
Fund shares sold 29,140
------------
Total assets 232,351,230
------------
Liabilities
Payables
Collateral on securities loaned 6,226,300
Investment securities purchased 4,788,400
Fund shares repurchased 172,152
Investment advisory fee 122,357
Transfer agent fee 81,618
Distribution fee 50,870
Trustees' fee 11,476
Financial agent fee 5,647
Accrued expenses 71,721
------------
Total liabilities 11,530,541
------------
Net Assets $220,820,689
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $196,114,533
Undistributed net investment income 657,595
Accumulated net realized gain 13,641,393
Net unrealized appreciation 10,407,168
------------
Net Assets $220,820,689
============
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $214,873,926) 11,156,269
Net asset value per share $19.26
Offering price per share
$19.26/(1-4.75%) $20.22
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $5,946,763) 309,692
Net asset value and offering price per share $19.20
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends $ 2,001,333
Interest 8,882,782
Security lending 68,362
-----------
Total investment income 10,952,477
-----------
Expenses
Investment advisory fee 1,444,901
Distribution fee--Class A 543,092
Distribution fee--Class B 50,553
Financial agent fee 66,688
Transfer agent 361,719
Printing 53,684
Custodian 37,547
Professional 33,520
Registration 31,947
Trustees 20,352
Miscellaneous 4,779
-----------
Total expenses 2,648,782
-----------
Net investment income 8,303,695
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 13,764,508
Net change in unrealized appreciation (depreciation) on
investments 6,532,321
-----------
Net gain on investments 20,296,829
-----------
Net increase in net assets resulting from operations $28,600,524
===========
</TABLE>
See Notes to Financial Statements
15
<PAGE>
- --------------------------------------------------------------------------------
Convertible Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
----------------- -----------------
<S> <C> <C>
From Operations
Net investment income $8,303,695 $10,546,200
Net realized gain 13,764,508 6,913,139
Net change in unrealized appreciation (depreciation) 6,532,321 6,261,043
----------- -----------
Increase in net assets resulting from operations 28,600,524 23,720,382
----------- -----------
From Distributions to Shareholders
Net investment income--Class A (8,803,953) (12,970,385)
Net investment income--Class B (164,704) (119,217)
Net realized gains--Class A (6,839,551) (2,391,510)
Net realized gains--Class B (129,752) (12,867)
----------- -----------
Decrease in net assets from distributions to shareholders (15,937,960) (15,493,979)
----------- -----------
From Share Transactions
Class A
Proceeds from sales of shares (906,746 and 1,382,175
shares, respectively) 16,946,702 24,342,158
Net asset value of shares issued from reinvestment of
distributions (703,569 and 722,912 shares, respectively) 12,908,037 12,522,376
Cost of shares repurchased (2,489,652 and 2,957,778
shares, respectively) (46,749,267) (51,872,715)
----------- -----------
Total (16,894,528) (15,008,181)
----------- -----------
Class B
Proceeds from sales of shares (125,709 and 158,935 shares,
respectively) 2,344,422 2,790,598
Net asset value of shares issued from reinvestment of
distributions (11,529 and
6,511 shares, respectively) 211,321 114,320
Cost of shares repurchased (31,996 and 9,767 shares,
respectively) (602,797) (173,872)
----------- -----------
Total 1,952,946 2,731,046
----------- -----------
Decrease in net assets from share transactions (14,941,582) (12,277,135)
----------- -----------
Net decrease in net assets (2,279,018) (4,050,732)
Net Assets
Beginning of period 223,099,707 227,150,439
----------- -----------
End of period (including undistributed net investment
income of $657,595 and $1,322,557, respectively) $220,820,689 $223,099,707
=========== ===========
</TABLE>
See Notes to Financial Statements
16
<PAGE>
- --------------------------------------------------------------------------------
Convertible Fund Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------
Year Ended October 31,
1996 1995 1994 1993 1992
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $18.23 $17.56 $19.34 $18.86 $18.36
Income from investment operations
Net investment income 0.70(4) 0.87 0.78 0.68 0.77
Net realized and unrealized gain (loss) 1.68 1.04 (1.06) 1.53 1.54
------- ------- ------- ------- -------
Total from investment operations 2.38 1.91 (0.28) 2.21 2.31
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income (0.77) (1.05) (0.69) (0.73) (0.72)
Dividends from net realized gains (0.58) (0.19) (0.81) (1.00) (1.09)
------- ------- ------- ------- -------
Total distributions (1.35) (1.24) (1.50) (1.73) (1.81)
------- ------- ------- ------- -------
Change in net asset value 1.03 0.67 (1.78) 0.48 0.50
------- ------- ------- ------- -------
Net asset value, end of period $19.26 $18.23 $17.56 $19.34 $18.86
======= ======= ======= ======= =======
Total return(1) 13.55% 11.45% -1.48% 12.58% 13.77%
Ratios/supplemental data:
Net assets, end of period (thousands) $219,384 $226,294 $252,072 $200,944
$214,874
Ratio to average net assets of:
Operating expenses 1.17% 1.18% 1.14% 1.15% 1.20%
Net investment income 3.75% 4.78% 4.27% 3.70% 4.28%
Portfolio turnover 141% 79% 91% 94% 200%
Average commission rate paid(5) $0.0619 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class B
---------------------------------
From
Inception
Year Ended October 31, 7/15/94 to
1996 1995 10/31/94
--------- --------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period $18.17 $17.55 $17.59
Income from investment operations
Net investment income 0.55(4) 0.70(4) 0.15
Net realized and unrealized gain (loss) 1.68 1.07 (0.06)
------- ------- -------
Total from investment operations 2.23 1.77 0.09
------- ------- -------
Less distributions
Dividends from net investment income (0.62) (0.96) (0.13)
Dividends from net realized gains (0.58) (0.19) --
------- ------- -------
Total distributions (1.20) (1.15) (0.13)
------- ------- -------
Change in net asset value 1.03 0.62 (0.04)
------- ------- -------
Net asset value, end of period $19.20 $18.17 $17.55
======= ======= =======
Total return(1) 12.72% 10.59% 0.49%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $5,947 $3,715 $856
Ratio to average net assets of:
Operating expenses 1.92% 1.95% 1.83%(2)
Net investment income 2.95% 3.92% 3.29%(2)
Portfolio turnover 141% 79% 91%
Average commission rate paid(5) $0.0619 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized
(3) Not annualized
(4) Computed using average shares outstanding.
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
17
<PAGE>
- --------------------------------------------------------------------------------
GROWTH FUND SERIES
- --------------------------------------------------------------------------------
INVESTMENT ADVISER'S REPORT
With the stock market continuing its remarkable rally dating back to
December 1994, the Phoenix Growth Fund posted strong results over this latest
reporting cycle. For the twelve months ended October 31, 1996, the Fund's Class
A shares returned 16.34% and Class B shares returned 15.48%. In spite of these
solid gains, the Fund lagged the Standard & Poor's 500 Composite Index, an
unmanaged, commonly used measure of stock market performance, which returned
24.20%. All of these figures assume reinvestment of any distributions, but
exclude the effect of sales charges.
We have viewed the stock market as in the late stages of a cyclical
upswing. Since October 1990, stocks have moved higher virtually without a major
interruption. The excellent returns have bred an environment of complacency and
high expectations that has pushed investors further out on the risk spectrum.
During the second quarter of 1996, we witnessed a tremendous influx of money
into aggressive growth and smaller company funds that showcased this speculative
impulse. The correction of July 1996 cleansed the excesses in this area of the
market. Since July, the focus has shifted to larger company outperformance.
Investors have poured money into very large companies believed to provide steady
growth characteristics and ample liquidity. This more recent tactic has pushed
market indices (such as S&P 500 and the Dow Jones Industrials) higher, while
broader measures of stock performance have lagged.
In retrospect, the Fund's performance was held back by a more guarded
stance toward the stock market. Our approach met with good results through
August 1996, and especially in the difficult market environment during July.
But, the dramatic rebound in equity prices during the last two months of the
fiscal year was the primary reason for lagging the S&P 500 Index. Positive
contributors to performance during the year included our excellent stock
selection in both the energy and basic materials sectors as well as the Fund's
overweighting in the strongly performing capital goods group. Specific areas
which hindered our relative performance included weakness in some of our
technology holdings as well the Fund's modest underweighting in the financial
sector.
Looking ahead, we continue to feel that the energy sector is in a
long-term, secular upswing and will provide excellent returns. Health care and
selected areas of technology will continue to exhibit excellent growth. Also, we
continue to increase commitments to companies that are internationally focused
and will be beneficiaries of developing country demand (including larger,
foreign-based multinational corporations). Since we feel that the U.S. economy
is in the mature stage of the growth cycle, the challenge ahead will be to
identify companies that can continue to grow earnings despite a slower growth
economic scenario, and that sell at relatively attractive prices to their growth
rates.
Finally, we remind shareholders that, despite recent experience, markets
move in both directions. Our investment goal is to outperform over a market
cycle. That means taking measures to protect against potentially adverse market
environments. We feel that this is a period when the quest to make money in the
stock market should be balanced with the instinct to protect capital--especially
at a time when the level of complacency among investors is high. In this spirit,
we continue to be well invested in stocks (with moderate cash reserves), but
reinforce the fact that we remain true to the conservative growth objective of
the Fund.
INVESTOR PROFILE
The Growth Fund is best suited for an investor seeking the potential for
long-term growth through investments in quality common stocks. At times, the
Fund may invest in stocks of non-U.S. companies. Investors should note that
foreign investments pose added risks, such as currency fluctuations, less public
information, and, political and economic uncertainty.
18
<PAGE>
- --------------------------------------------------------------------------------
Growth Fund Series
- --------------------------------------------------------------------------------
[LINE CHART]
Growth Fund
S&P 500* -- Class A
-------- ----------
1986 10000 9525
1987 10641 10471
1988 12183 11203
1989 15377 13604
1990 14221 14019
1991 18985 18362
1992 20875 19637
1993 23986 21051
1994 24929 21485
1995 31514 26622
1996 39140 30973
[/LINE CHART]
<TABLE>
<CAPTION>
Average Annual Total Returns for the Periods Ending 10/31/96 From Inception
7/15/94 to
1 Year 5 Years 10 Years 10/31/96
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A with 4.75% sales charge 10.82% 9.94% 11.97% --
---------------------------------------------------------------------------------
Class A at net asset value 16.34% 11.02% 12.52% --
---------------------------------------------------------------------------------
Class B with CDSC 11.48% -- -- 17.18%
---------------------------------------------------------------------------------
Class B at net asset value 15.48% -- -- 18.23%
---------------------------------------------------------------------------------
S&P 500 Index* 24.20% 15.57% 14.62% 24.21%
---------------------------------------------------------------------------------
</TABLE>
This chart assumes an initial gross investment of $10,000 made on 10/31/86 for
Class A shares. The total return for Class A shares reflects the maximum sales
charge of 4.75% on the initial investment and assumes reinvestment of dividends
and capital gains. Class B share performance will be greater or less than that
shown based on differences in inception dates, fees and sales charges. The total
return (since inception 7/15/94) for Class B shares reflects the 5% contingent
deferred sales charge (CDSC), which is applicable on all shares redeemed during
the 1st year after purchase and 4% for all shares redeemed during the 2nd year
after purchase (scaled down to 3%--3rd year; 2%--4th and 5th year and 0%
thereafter). Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
*The S&P 500 Index is an unmanaged but commonly used measure of common stock
total return performance. The S&P 500's performance does not reflect sales
charges.
19
<PAGE>
- --------------------------------------------------------------------------------
Growth Fund Series
- --------------------------------------------------------------------------------
INVESTMENTS AT OCTOBER 31, 1996
<TABLE>
<CAPTION>
SHARES VALUE
------------ ---------------
<S> <C> <C>
COMMON STOCKS--80.4%
Aerospace & Defense--6.9%
Boeing Company 500,000 $ 47,687,500
General Motors Corp. Class H 500,000 26,687,500
Lockheed Martin Corp. 600,000 53,775,000
Raytheon Co. 730,000 35,952,500
---------
164,102,500
Banks--2.3% ---------
Bankers Trust New York Corp. 300,000 25,350,000
Citicorp 300,000 29,700,000
---------
55,050,000
Beverages--1.1% ---------
Seagram Ltd. 700,000 26,512,500
---------
Chemical--4.1%
IMC Global, Inc. 850,000 31,875,000
Monsanto Co. 1,700,000 67,362,500
---------
99,237,500
Computer Software & Services--2.4% ---------
First Data Corp. 250,000 19,937,500
Informix Corp. (b) 600,000 13,312,500
Microsoft Corp. (b) 30,600 4,199,850
Oracle Corp. (b) 500,000 21,156,250
---------
58,606,100
Conglomerates--0.8% ---------
ITT Corp. (b) 440,000 18,480,000
---------
Cosmetics & Soaps--1.6%
Gillette Co. 500,000 37,375,000
---------
Diversified Financial Services--2.8%
American Express Co. 600,000 28,200,000
Federal National Mortgage Association 1,000,000 39,125,000
---------
67,325,000
Diversified Miscellaneous--3.3% ---------
CUC International, Inc. (b) 1,350,000 33,075,000
Equifax, Inc. 1,532,100 45,579,975
---------
78,654,975
Electrical Equipment--1.6% ---------
Raychem Corp. 500,000 39,062,500
---------
Electronics--1.5%
Intel Corp. 75,000 8,240,625
Perkin Elmer Corp. 500,000 26,812,500
---------
Entertainment, Leisure & Gaming--1.2% 35,053,125
---------
Carnival Corp. Class A 966,800 29,124,850
---------
Food--1.2%
Ralston-Purina Group 450,000 29,756,250
---------
Healthcare-Diversified--0.9%
Mallinckrodt, Inc. 500,000 21,750,000
---------
Healthcare-Drugs--2.1%
Amgen, Inc. (b) 400,000 24,525,000
Pharmacia & Upjohn, Inc. 700,000 25,200,000
---------
49,725,000
Hospital Management & Services--2.6% ---------
Columbia/HCA Healthcare Corp.
1,050,000 $ 37,537,500
MedPartners, Inc. (b) 1,161,600 24,538,800
---------
62,076,300
Insurance--4.0% ---------
Allstate Corp.
600,000 33,675,000
American International Group, Inc. 350,000 38,018,750
General Re Corp. 170,000 25,032,500
---------
96,726,250
Lodging & Restaurants--2.6% ---------
Hilton Hotels Corp. 800,000 24,300,000
Marriott International, Inc. 650,000 36,968,750
---------
61,268,750
Machinery--1.9% ---------
Deere & Co. 1,100,000 45,925,000
Medical Products & Supplies--4.8% ---------
Allegiance Corp. (b) 200,000 3,750,000
Baxter International, Inc. 1,000,000 41,625,000
Johnson & Johnson 1,000,000 49,250,000
Medtronic, Inc. 300,000 19,312,500
---------
Miscellaneous--0.2% 113,937,500
---------
Sabre Group Holdings, Inc. Class A (b) 155,900 4,754,950
---------
Natural Gas--3.6%
Anadarko Petroleum Corp. 230,000 14,633,750
Apache Corp. 1,100,000 39,050,000
Burlington Resources, Inc. 400,000 20,150,000
Enron Oil & Gas Co. 500,000 12,875,000
---------
Office & Business Equipment--0.9% 86,708,750
---------
Xerox Corp. 450,000 20,868,750
---------
Oil--1.1%
Amoco Corp. 345,000 26,133,750
Oil Service & Equipment--10.4% ---------
Diamond Offshore Drilling (b) 619,000 37,681,625
Dresser Industries, Inc. 500,000 16,437,500
ENSCO International, Inc. (b) 600,000 25,950,000
Halliburton Co. 1,014,000 57,417,750
Schlumberger Ltd. 500,000 49,562,500
Tidewater, Inc. 707,400 30,948,750
Transocean Offshore, Inc. 368,000 23,276,000
Varco International, Inc. (b) 400,000 7,900,000
---------
249,174,125
Paper & Forest Products--1.2% ---------
Kimberly-Clark Corp. 300,000 27,975,000
---------
Pollution Control--2.3%
WMX Technologies, Inc. 1,600,000 55,000,000
---------
</TABLE>
See Notes to Financial Statements
20
<PAGE>
- --------------------------------------------------------------------------------
Growth Fund Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------ ---------------
<S> <C> <C>
Professional Services--1.6%
ADT Ltd. (b) 900,000 $ 17,775,000
Marsh & McLennan Cos., Inc. 200,000 20,825,000
-------------
38,600,000
-------------
Rails--0.9%
Burlington Northern, Inc. 275,000 22,653,125
-------------
Retail--4.4%
Footstar, Inc. (b) 345,480 7,600,560
Home Depot, Inc. 500,000 27,375,000
Melville Corp. 1,200,000 44,700,000
Price/Costco, Inc. (b) 1,300,000 25,837,500
-------------
105,513,060
-------------
Retail--Food--1.5%
American Stores Co. 850,000 35,168,750
-------------
Telecommunications Equipment--2.4%
Cisco Systems, Inc. (b) 450,000 27,843,750
General Instrument Corp. (b) 900,000 18,112,500
Lucent Technologies, Inc. 226,858 10,662,326
-------------
56,618,576
-------------
Truckers & Marine--0.2%
Avondale Industries, Inc. (b) 365,000 5,976,875
-------------
TOTAL COMMON STOCKS
(Identified cost $1,632,463,766) 1,924,894,811
-------------
FOREIGN COMMON STOCKS--8.4%
Chemical--1.5%
Potash Corp. of Saskatchewan, Inc. (Canada) 500,000 35,437,500
-------------
Cosmetics & Soaps--1.8%
Unilever NV (Netherlands) 275,000 42,040,625
-------------
Healthcare-Drugs--3.1%
Astra AB Series A (Sweden) 805,000 37,038,050
SmithKline Beecham PLC ADR
(United Kingdom) 600,000 37,575,000
-------------
74,613,050
-------------
Oil Service & Equipment--1.2%
Elf Aquitane Sponsored ADR (France) 700,000 28,087,500
-------------
Rails--0.8%
Canadian Pacific Ltd. (Canada) 785,000 19,821,250
-------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $157,372,145) 199,999,925
-------------
TOTAL LONG-TERM INVESTMENTS--88.8%
(Identified cost $1,789,835,911) 2,124,894,736
-------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- --------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--11.9%
Commercial Paper--8.9%
Corporate Receivables Corp. 5.70%, 11-1-96 A-1 $ 4,980 $ 4,980,000
Preferred Receivables Funding Corp. 5.40%, 11-4-96 A-1 4,344 4,342,045
BellSouth Telecommunications, Inc. 5.22%, 11-5-96 A-1+ 1,965 1,963,860
Preferred Receivables Funding Corp. 5.40%, 11-5-96 A-1 6,900 6,894,729
Kimberly-Clark Corp. 5.27%, 11-8-96 A-1+ 13,745 13,730,915
Abbott Laboratories 5.20%, 11-12-96 A-1+ 4,600 4,592,691
Coca-Cola Co. 5.20%, 11-12-96 A-1+ 10,440 10,423,412
Preferred Receivables Funding Corp. 5.27%,
11-12-96 A-1 2,000 1,996,779
AlliedSignal, Inc. 5.24%, 11-13-96 A-1 5,785 5,774,896
Ameritech Capital Funding Corp. 5.27%, 11-18-96 A-1+ 3,010 3,001,802
McDonald's Corp. 5.21%, 11-19-96 A-1+ 7,890 7,869,447
BellSouth Telecommunications, Inc. 5.36%, 11-19-96 A-1+ 8,260 8,236,201
Minnesota Mining & Manufacturing Co. 5.37%,
11-20-96 A-1+ 8,855 8,827,999
Vermont American Corp. 5.22%, 11-21-96 A-1+ 4,440 4,427,124
Albertson's, Inc. 5.23%, 11-22-96 A-1 10,160 10,129,004
Minnesota Mining & Manufacturing Co. 5.22%,
11-22-96 A-1+ 100 99,696
General Electric Capital Corp. 5.24%, 11-26-96 A-1+ 10,000 10,000,000
Heinz (H.J.) Co. 5.24%, 12-2-96 A-1 3,880 3,862,493
International Lease Finance Corp. 5.28%, 12-2-96 A-1 10,000 9,954,533
Shell Oil Co. 5.22%, 12-2-96 A-1+ 9,650 9,606,623
Cargill, Inc. 5.27%, 12-3-96 A-1+ 10,440 10,388,377
Preferred Receivables Funding Corp. 5.25%, 12-3-96 A-1 900 895,800
Preferred Receivables Funding Corp. 5.45%, 12-3-96 A-1 3,170 3,154,343
McKenna Triangle National Corp. 5.25%, 12-5-96 A-1+ 9,220 9,174,283
Private Export Funding Corp. 5.45%, 12-5-96 A-1+ 1,530 1,522,029
Southwestern Bell Telephone Co. 5.24%, 12-5-96 A-1+ 15,000 14,925,766
See Notes to Financial Statements
21
<PAGE>
- --------------------------------------------------------------------------------
Growth Fund Series
- --------------------------------------------------------------------------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- --------------
Commercial Paper--continued
Beta Finance, Inc. 5.48%, 12-6-96 A-1+ $ 6,800 $ 6,704,447
International Lease Finance Corp. 5.28%, 12-6-96 A-1 14,615 14,535,388
Procter & Gamble Co. 5.38%, 12-10-96 A-1+ 4,285 4,260,048
Coca-Cola Co. 5.20%, 12-13-96 A-1+ 3,610 3,586,690
Kellogg Co. 5.25%, 12-13-96 A-1+ 425 422,397
Procter & Gamble Co. 5.22%, 12-18-96 A-1+ 610 605,690
Beta Finance, Inc. 5.35%, 4-4-97 A-1+ 11,000 10,746,670
-------------
211,636,177
-------------
Federal Agency Securities--1.3%
Student Loan Marketing Assn. 5.53%, 11-1-96 12,700 12,700,000
Federal Home Loan Banks 5.16%,
11-8-96 7,000 6,992,977
Federal Farm Credit Bank 5.14%,
11-20-96 12,140 12,107,067
-------------
31,800,044
-------------
</TABLE>
<TABLE>
<CAPTION>
PAR
VALUE
(000) VALUE
--------- --------------
<S> <C> <C>
U.S. Treasury Bills--1.7%
U.S. Treasury Bills 4.85%, 11-14-96 $31,675 $ 31,619,525
U.S. Treasury Bills 4.86%, 2-6-97 5,000 4,931,650
U.S. Treasury Bills 4.90%, 2-6-97 5,000 4,931,650
------------
41,482,825
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $284,999,811) 284,919,046
------------
TOTAL INVESTMENTS--100.7%
(Identified cost $2,074,835,722) 2,409,813,782(a)
Cash and receivables, less liabilities--(0.7%) (17,016,942)
------------
NET ASSETS--100.0% $2,392,796,840
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $369,505,144 and gross
depreciation of $34,674,515 for income tax purposes. At October 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$2,074,983,153.
(b) Non-income producing.
ADR--American Depository Receipt
See Notes to Financial Statements
22
<PAGE>
- --------------------------------------------------------------------------------
Growth Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $2,074,835,722) $2,409,813,782
Short-term investments held as collateral for loaned
securities 9,081,798
Cash 914
Receivables
Investment securities sold 2,892,616
Fund shares sold 1,721,169
Dividends and interest 1,664,140
-------------
Total assets 2,425,174,419
-------------
Liabilities
Payables
Investment securities purchased 15,107,903
Collateral on securities loaned 9,081,798
Fund shares repurchased 5,184,798
Investment advisory fee 1,303,330
Transfer agent fee 747,518
Distribution fee 540,089
Financial agent fee 61,414
Trustees' fee 11,212
Accrued expenses 339,517
-------------
Total liabilities 32,377,579
-------------
Net Assets $2,392,796,840
=============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $1,649,890,053
Undistributed net investment income 4,797,802
Accumulated net realized gain 403,130,925
Net unrealized appreciation 334,978,060
-------------
Net Assets $2,392,796,840
=============
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,347,470,584) 87,356,082
Net asset value per share $26.87
Offering price per share
$26.87/(1-4.75%) $28.21
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $45,326,256) 1,702,044
Net asset value and offering price per share $26.63
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<S> <C>
Investment Income
Dividends $29,430,202
Interest 17,786,591
Security lending 81,367
-------------
Total investment income 47,298,160
-------------
Expenses
Investment advisory fee 15,914,996
Distribution fee--Class A 5,925,509
Distribution fee--Class B 322,959
Financial agent fee 720,750
Transfer agent 4,346,850
Printing 696,479
Custodian 225,245
Professional 63,857
Registration 56,365
Trustees 19,479
Miscellaneous 13,106
-------------
Total expenses 28,305,595
-------------
Net investment income 18,992,565
-------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 403,222,187
Net realized loss on foreign currency (200,388)
Net change in unrealized appreciation (depreciation) on
investments (60,960,282)
-------------
Net gain on investments 342,061,517
-------------
Net increase in net assets resulting from operations $361,054,082
=============
</TABLE>
See Notes to Financial Statements
23
<PAGE>
- --------------------------------------------------------------------------------
Growth Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
---------------- -----------------
<S> <C> <C>
From Operations
Net investment income $18,992,565 $19,910,168
Net realized gain 403,021,799 155,621,706
Net change in unrealized appreciation (depreciation) (60,960,282) 290,325,083
------------- -------------
Increase in net assets resulting from operations 361,054,082 465,856,957
------------- -------------
From Distributions to Shareholders
Net investment income--Class A (22,644,345) (29,146,274)
Net investment income--Class B (98,685) (70,729)
Net realized gains--Class A (149,324,628) (80,021,516)
Net realized gains--Class B (1,479,427) (163,754)
------------- -------------
Decrease in net assets from distributions to shareholders (173,547,085) (109,402,273)
------------- -------------
From Share Transactions
Class A
Proceeds from sales of shares (9,835,907 and 11,080,464 shares,
respectively) 250,496,105 244,386,687
Net asset value of shares issued from reinvestment of
distributions
(6,641,514 and 5,065,877 shares, respectively) 158,927,977 100,757,525
Cost of shares repurchased (21,426,723 and 24,592,373 shares,
respectively) (546,897,194) (539,504,775)
------------- -------------
Total (137,473,112) (194,360,563)
------------- -------------
Class B
Proceeds from sales of shares (1,000,869 and 726,554 shares,
respectively) 25,339,947 16,077,649
Net asset value of shares issued from reinvestment of
distributions
(59,359 and 10,621 shares, respectively) 1,409,232 212,004
Cost of shares repurchased (171,122 and 64,169 shares,
respectively) (4,348,366) (1,445,729)
------------- -------------
Total 22,400,813 14,843,924
------------- -------------
Decrease in net assets from share transactions (115,072,299) (179,516,639)
------------- -------------
Net increase in net assets 72,434,698 176,938,045
Net Assets
Beginning of period 2,320,362,142 2,143,424,097
------------- -------------
End of period (including undistributed net investment income of
$4,797,802 and $8,762,468, respectively) $2,392,796,840 $2,320,362,142
============= =============
</TABLE>
See Notes to Financial Statements
24
<PAGE>
- --------------------------------------------------------------------------------
Growth Fund Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------------
Year Ended October 31,
1996 1995 1994 1993 1992
---------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $24.92 $21.24 $21.53 $20.76 $22.60
Income from investment operations(5)
Net investment income 0.20(4) 0.26 0.26 0.32 0.36
Net realized and unrealized gain 3.63 4.53 0.17 1.15 0.97
-------- -------- -------- -------- --------
Total from investment operations 3.83 4.79 0.43 1.47 1.33
-------- -------- -------- -------- --------
Less distributions
Dividends from net investment income (0.25) (0.30) (0.24) (0.32) (0.45)
Dividends from net realized gains (1.63) (0.81) (0.48) (0.38) (2.72)
-------- -------- -------- -------- --------
Total distributions (1.88) (1.11) (0.72) (0.70) (3.17)
-------- -------- -------- -------- --------
Change in net asset value 1.95 3.68 (0.29) 0.77 (1.84)
-------- -------- -------- -------- --------
Net asset value, end of period $26.87 $24.92 $21.24 $21.53 $20.76
======== ======== ======== ======== ========
Total return(1) 16.34% 23.91% 2.06% 7.20% 6.95%
Ratios/supplemental data:
Net assets, end of period (thousands) $2,347,471 $2,300,251 $2,140,458 $2,563,442 $2,186,868
Ratio to average net assets of:
Operating expenses 1.17% 1.20% 1.19% 1.18% 1.17%
Net investment income 0.80% 0.92% 1.22% 1.55% 1.86%
Portfolio turnover 116% 109% 118% 176% 192%
Average commission rate paid(6) $0.0534 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class B
---------------------------------
From
Year Ended October 31, Inception
7/15/94 to
1996 1995 10/31/94
--------- --------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period $24.74 $21.19 $20.48
Income from investment operations(5)
Net investment income --(4) --(4) 0.01
Net realized and unrealized gain 3.61 4.60 0.70
-------- -------- --------
Total from investment operations 3.61 4.60 0.71
-------- -------- --------
Less distributions
Dividends from net investment income (0.09) (0.24) --
Dividends from net realized gains (1.63) (0.81) --
-------- -------- --------
Total distributions (1.72) (1.05) --
-------- -------- --------
Change in net asset value 1.89 3.55 0.71
-------- -------- --------
Net asset value, end of period $26.63 $24.74 $21.19
======== ======== ========
Total return(1) 15.48% 23.02% 3.47%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $45,326 $20,111 $2,966
Ratio to average net assets of:
Operating expenses 1.93% 1.97% 1.87%(2)
Net investment income 0.01% 0.01% 0.32%(2)
Portfolio turnover 116% 109% 118%
Average commission rate paid(6) $0.0534 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized
(3) Not annualized
(4) Computed using average shares outstanding.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from
anticipated results depending on the time of share purchases and
redemptions.
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
25
<PAGE>
- --------------------------------------------------------------------------------
AGGRESSIVE GROWTH FUND SERIES
- --------------------------------------------------------------------------------
INVESTMENT ADVISER'S REPORT
The continued rally in the U.S. stock market helped the Aggressive Growth
Fund post strong double-digit returns over this latest reporting period. For the
twelve months ended October 31, 1996, Class A shares provided a total return of
17.43% and Class B shares returned 16.52%. Although these results were
impressive on an absolute basis, they did lag behind Standard & Poor's 500
Composite Stock Index, an unmanaged, commonly used measure of stock performance,
which returned 24.20% over the same period. All of these figures assume
reinvestment of any distributions, but exclude the effect of sales charges.
Over the last twelve months, the Fund continued to focus on high-growth
companies with strong thematic appeal. With this objective, we found a number of
compelling investment opportunities within the energy sector which provided
outstanding results throughout the reporting period. Aided by a surprisingly
robust U.S. economy during the first half of 1996, the Fund's substantial
exposure to economically-sensitive stocks also boosted results. Negative
contributors to Fund performance during this period included the portfolio's
relative underweighting in the solidly performing financial and capital goods
sectors. Severe profit-taking in some of our technology and health care holdings
during the July selloff also hindered returns.
Moving forward, we are forecasting a more moderate economic climate and
slower earnings growth for the overall stock market. Since we firmly believe
that stock performance tracks earnings growth in the long-run, the main thrust
of our research continues to be on finding young growth companies that can turn
into tomorrow's market leaders. Investment themes that we believe can provide
above-average growth potential in this environment include Software Solutions
(technology), Energy Technology (energy) and 21st Century Medicine (health
care). As of October 31, 1996, the Fund's asset allocation mix was 96% equity
and 4% cash equivalents.
INVESTOR PROFILE
The Aggressive Growth Fund is best suited for an investor who desires an
aggressively managed portfolio designed for maximum appreciation of capital with
little or no current income.
26
<PAGE>
- --------------------------------------------------------------------------------
Aggressive Growth Fund Series
- --------------------------------------------------------------------------------
[LINE CHART]
Aggressive
Growth Fund
S&P 500* -- Class A
-------- ----------
1986 10000 9525
1987 10641 10769
1988 12183 11256
1989 15377 13349
1990 14221 11577
1991 18985 16206
1992 20875 17359
1993 23986 19815
1994 24929 19889
1995 31514 26878
1996 39140 31563
[/LINE CHART]
Average Annual Total Returns for the Periods Ending 10/31/96
From Inception
7/21/94 to
1 Year 5 Years 10 Years 10/31/96
- --------------------------------------------------------------------------------
Class A with 4.75% sales charge 11.87% 13.16% 12.18% --
- --------------------------------------------------------------------------------
Class A at net asset value 17.43% 14.26% 12.72% --
- --------------------------------------------------------------------------------
Class B with CDSC 12.52% -- -- 21.39%
- --------------------------------------------------------------------------------
Class B at net asset value 16.52% -- -- 22.42%
- --------------------------------------------------------------------------------
S&P 500 Index* 24.20% 15.57% 14.62% 24.61%
- --------------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 10/31/86 for
Class A shares. The total return for Class A shares reflects the maximum sales
charge of 4.75% on the initial investment and assumes reinvestment of dividends
and capital gains. Class B share performance will be greater or less than that
shown based on differences in inception dates, fees and sales charges. The total
return (since inception 7/21/94) for Class B shares reflects the 5% contingent
deferred sales charge (CDSC), which is applicable on all shares redeemed during
the 1st year after purchase and 4% for all shares redeemed during the 2nd year
after purchase (scaled down to 3%-3rd year, 2%-4th and 5th year and 0%
thereafter). Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
*The S&P 500 Index is an unmanaged but commonly used measure of stock total
return performance. The S&P 500's performance does not reflect sales charges.
27
<PAGE>
- --------------------------------------------------------------------------------
Aggressive Growth Fund Series
- --------------------------------------------------------------------------------
INVESTMENTS AT OCTOBER 31, 1996
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C>
COMMON STOCKS--91.1%
Advertising--2.5%
Outdoor Systems, Inc. (b) 65,000 $ 2,908,750
Snyder Communications, Inc. (b) 50,000 975,000
Universal Outdoor Holdings, Inc. (b) 75,000 2,203,125
-----------
6,086,875
-----------
Aerospace & Defense--0.2%
Triumph Group, Inc. (b) 28,600 643,500
-----------
Computer Software & Services--24.3%
Amati Communications Corp. (b) 100,000 1,725,000
Brooktrout Technology, Inc. (b) 100,000 3,225,000
Chips & Technologies, Inc. (b) 302,400 6,010,200
Cognos, Inc. (b) 75,000 2,353,125
Electronics Arts, Inc. Class A (b) 135,000 5,062,500
Forte Software, Inc. (b) 50,000 1,887,500
Inso Corp. (b) 50,000 2,462,500
McAfee Associates, Inc. (b) 105,000 4,777,500
Network Appliance, Inc. (b) 35,000 1,225,000
Object Design, Inc. (b) 120,000 1,372,500
PairGain Technologies, Inc. (b) 70,000 4,821,250
Parametric Technology Corp. (b) 112,500 5,498,437
Rational Software Corp. (b) 75,000 2,878,125
Remedy Corp. (b) 130,000 6,337,500
Security Dynamics Technologies, Inc. (b) 20,000 1,625,000
Verilink Corp. (b) 35,000 1,260,000
Veritas Software Corp. (b) 90,000 4,545,000
Videoserver, Inc. (b) 50,000 2,368,750
-----------
59,434,887
-----------
Diversified Financial Services--5.4%
Concord EFS, Inc. (b) 135,000 3,915,000
Conseco, Inc. 100,000 5,350,000
Money Store, Inc. 150,000 3,862,500
-----------
13,127,500
-----------
Diversified Miscellaneous--2.4%
Central Garden & Pet Company (b) 250,000 5,906,250
-----------
Electrical Equipment--2.0%
Jabil Circuit, Inc. (b) 200,000 4,800,000
-----------
Electronics--5.9%
3Com Corp. (b) 90,000 6,086,250
S3, Inc. (b) 200,000 3,775,000
Sawtek, Inc. (b) 150,000 4,537,500
-----------
14,398,750
-----------
Healthcare--Drugs--2.0%
Agouron Pharmaceuticals, Inc. (b) 50,000 2,862,500
Amylin Pharmaceuticals, Inc. (b) 175,000 1,968,750
-----------
4,831,250
-----------
Household Furnishings & Appliances--1.6%
Ethan Allen Interiors, Inc. 110,000 3,932,500
-----------
Lodging & Restaurants--1.7%
Starbucks Corp. (b) 125,000 $ 4,062,500
-----------
Medical Products & Supplies--1.8%
Idexx Laboratories, Inc. (b) 50,000 1,962,500
U.S. Surgical Corp. 60,000 2,512,500
-----------
4,475,000
-----------
Office & Business Equipment--2.0%
Compaq Computer Corp. (b) 50,000 3,481,250
Splash Technology Holdings, Inc. (b) 100,000 1,375,000
-----------
4,856,250
-----------
Oil Service & Equipment--16.6%
Diamond Offshore Drilling (b) 110,000 6,696,250
ENSCO International, Inc. (b) 125,000 5,406,250
Falcon Drilling Company, Inc. (b) 175,000 6,190,625
Marine Drilling Company, Inc. (b) 200,000 2,775,000
Pride Petroleum Services, Inc. (b) 200,000 3,500,000
Schlumberger Ltd. 75,000 7,434,375
Smith International, Inc. (b) 125,000 4,750,000
Transocean Offshore, Inc. 60,000 3,795,000
-----------
40,547,500
-----------
Professional Services--1.8%
HFS, Inc. (b) 60,000 4,395,000
-----------
Publishing, Broadcasting, Printing & Cable--6.5%
American Radio Systems Corp. Class A (b) 50,000 1,525,000
Chancellor Broadcasting Class A (b) 50,000 1,612,500
Consolidated Graphics, Inc. (b) 84,800 3,074,000
Evergreen Media Corp. Class A (b) 149,999 4,049,973
Heftel Broadcasting Corp. Class A (b) 50,000 1,812,500
Telemundo Group, Inc. Class A (b) 50,000 1,387,500
Univision Communications, Inc. Class A (b) 70,000 2,362,500
-----------
15,823,973
-----------
Retail--1.8%
Eagle Hardware & Garden, Inc. (b) 150,000 4,293,750
-----------
Retail--Drug--1.8%
Jones Medical Industries, Inc. 100,000 4,350,000
-----------
Textile & Apparel--2.6%
Nike, Inc. Class B 50,000 2,943,750
Pacific Sunwear of California (b) 150,000 3,337,500
-----------
6,281,250
-----------
Telecommunications Equipment--6.9%
ADC Telecommunications, Inc. (b) 50,000 3,418,750
Andrew Corp. (b) 25,000 1,218,750
Cisco Systems, Inc. (b) 15,000 928,125
Digital Microwave Corp. (b) 150,000 3,431,250
Natural Microsystems Corp. (b) 60,000 3,195,000
Pacific Gateway Exchange, Inc. (b) 50,000 1,550,000
Stanford Telecommunications, Inc. (b) 17,600 501,600
U.S. Robotics Corp. (b) 40,000 2,515,000
-----------
16,758,475
-----------
</TABLE>
See Notes to Financial Statements
28
<PAGE>
- --------------------------------------------------------------------------------
Aggressive Growth Fund Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- --------------
<S> <C> <C>
Utility--Telephone--1.3%
ACC Corp. (b) 75,000 $ 3,187,500
------------
TOTAL COMMON STOCKS
(Identified cost $200,926,461) 222,192,710
------------
WARRANTS--4.5%
Chemical--0.9%
BJ Services Co. Warrants (b) 100,000 2,112,500
------------
Electronics--3.6%
Intel Corp. Warrants (b) 125,000 8,861,325
------------
TOTAL WARRANTS
(Identified cost $8,524,147) 10,973,825
------------
TOTAL LONG-TERM INVESTMENTS--95.6%
(Identified cost $209,450,608) 233,166,535
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ---------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--0.9%
Commercial Paper--0.9%
Corporate Receivables Corp. 5.70%, 11-1-96 A-1 $ 480 $ 480,000
AlliedSignal, Inc. 5.26%, 11-4-96 A-1 1,650 1,649,277
-------------
2,129,277
-------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $2,129,277) 2,129,277
-------------
TOTAL INVESTMENTS--96.5%
(Identified cost $211,579,885) 235,295,812(a)
Cash and receivables, less liabilities--3.5% 8,658,419
-------------
NET ASSETS--100.0% $243,954,231
=============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $28,431,958 and gross
depreciation of $5,165,009 for income tax purposes. At October 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$212,028,863.
(b) Non-income producing.
See Notes to Financial Statements
29
<PAGE>
- --------------------------------------------------------------------------------
Aggressive Growth Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $211,579,885) $235,295,812
Short-term investments held as collateral for loaned
securities 11,123,400
Cash 1,790,497
Receivables
Investment securities sold 10,932,765
Fund shares sold 7,238,750
-------------
Total assets 266,381,224
-------------
Liabilities
Payables
Collateral on securities loaned 11,123,400
Investment securities purchased 10,779,853
Fund shares repurchased 184,605
Investment advisory fee 142,682
Distribution fee 59,198
Transfer agent fee 51,231
Trustees' fee 11,245
Financial agent fee 6,282
Accrued expenses 68,497
-------------
Total liabilities 22,426,993
-------------
Net Assets $243,954,231
=============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $185,675,889
Accumulated net realized gain 34,562,415
Net unrealized appreciation 23,715,927
-------------
Net Assets $243,954,231
=============
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $233,487,799) 13,863,607
Net asset value per share $16.84
Offering price per share
$16.84/(1-4.75%) $17.68
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $10,466,432) 631,461
Net asset value and offering price per share $16.57
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<S> <C>
Investment Income
Dividends $195,895
Interest 500,090
Security lending 159,276
-----------
Total investment income 855,261
-----------
Expenses
Investment advisory fee 1,537,430
Distribution fee--Class A 533,170
Distribution fee--Class B 63,649
Financial agent fee 65,890
Transfer agent 302,803
Printing 49,306
Professional 37,723
Custodian 37,123
Registration 26,278
Trustees 20,644
Miscellaneous 2,607
-----------
Total expenses 2,676,623
-----------
Net investment loss (1,821,362)
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 40,305,515
Net realized loss on purchased options (1,265,699)
Net change in unrealized appreciation (depreciation) on
investments (4,196,804)
-----------
Net gain on investments 34,843,012
-----------
Net increase in net assets resulting from operations $33,021,650
===========
</TABLE>
See Notes to Financial Statements
30
<PAGE>
- --------------------------------------------------------------------------------
Aggressive Growth Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
----------------- -----------------
<S> <C> <C>
From Operations
Net investment income (loss) $(1,821,362) $625,864
Net realized gain 39,039,816 22,388,865
Net change in unrealized appreciation
(depreciation) (4,196,804) 23,926,580
------------ ------------
Increase in net assets resulting from operations 33,021,650 46,941,309
------------ ------------
From Distributions to Shareholders
Net investment income--Class A (230,621) (1,906,874)
Net investment income--Class B -- (6,562)
Net realized gains--Class A (24,390,155) (9,109,368)
Net realized gains--Class B (370,937) (33,032)
------------ ------------
Decrease in net assets from distributions to
shareholders (24,991,713) (11,055,836)
------------ ------------
From Share Transactions
Class A
Proceeds from sales of shares (20,593,244 and
4,239,236 shares, respectively) 339,736,195 62,165,020
Net asset value of shares issued from
reinvestment of distributions
(1,566,906 and 857,273 shares, respectively) 22,579,121 10,298,375
Cost of shares repurchased (19,216,354 and
4,688,495 shares, respectively) (316,940,541) (67,901,061)
------------ ------------
Total 45,374,775 4,562,334
------------ ------------
Class B
Proceeds from sales of shares (739,574 and
152,973 shares, respectively) 12,090,017 2,285,062
Net asset value of shares issued from
reinvestment of distributions
(23,041 and 3,215 shares, respectively) 329,024 38,454
Cost of shares repurchased (277,273 and 34,861
shares, respectively) (4,550,009) (558,289)
------------ ------------
Total 7,869,032 1,765,227
------------ ------------
Increase in net assets from share transactions 53,243,807 6,327,561
------------ ------------
Net increase in net assets 61,273,744 42,213,034
Net Assets
Beginning of period 182,680,487 140,467,453
------------ ------------
End of period (including undistributed net
investment income of $0 and $230,621,
respectively) $243,954,231 $182,680,487
============ ============
</TABLE>
See Notes to Financial Statements
31
<PAGE>
- --------------------------------------------------------------------------------
Aggressive Growth Fund Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------
Year Ended October 31,
1996 1995 1994 1993 1992
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.51 $13.33 $14.56 $13.56 $14.88
Income from investment operations(5)
Net investment income (loss) (0.13)(4) 0.06(4) 0.27 0.22 0.23
Net realized and unrealized gain (loss) 2.64 4.21 (0.21) 1.62 0.59
-------- -------- -------- -------- --------
Total from investment operations 2.51 4.27 0.06 1.84 0.82
-------- -------- -------- -------- --------
Less distributions
Dividends from net investment income (0.02) (0.19) (0.22) (0.23) (0.25)
Dividends from net realized gains (2.16) (0.90) (1.07) (0.61) (1.50)
Distributions in excess of accumulated realized gains -- -- -- -- (0.39)
-------- -------- -------- -------- --------
Total distributions (2.18) (1.09) (1.29) (0.84) (2.14)
-------- -------- -------- -------- --------
Change in net asset value 0.33 3.18 (1.23) 1.00 (1.32)
-------- -------- -------- -------- --------
Net asset value, end of period $16.84 $16.51 $13.33 $14.56 $13.56
======== ======== ======== ======== ========
Total return(1) 17.43% 35.14% 0.37% 14.15% 7.11%
Ratios/supplemental data:
Net assets, end of period (thousands) $233,488 $180,288 $140,137 $143,035 $128,530
Ratio to average net assets of:
Operating expenses 1.20% 1.29% 1.26% 1.17% 1.25%
Net investment income (loss) (0.81%) 0.43% 1.97% 1.58% 1.70%
Portfolio turnover 401% 331% 306% 192% 251%
Average commission rate paid(6) $0.0655 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class B
--------------------------------------
From
Inception
Year Ended October 31, 7/21/94 to
1996 1995 10/31/94
------------ ------------ ------------
<S> <C> <C> <C>
Net asset value, beginning of period $16.38 $13.31 $13.09
Income from investment operations(5)
Net investment income (loss) (0.25)(4) (0.12)(4) 0.02
Net realized and unrealized gain 2.60 4.26 0.20
-------- -------- --------
Total from investment operations 2.35 4.14 0.22
-------- -------- --------
Less distributions
Dividends from net investment income -- (0.17) --
Dividends from net realized gains (2.16) (0.90) --
-------- -------- --------
Total distributions (2.16) (1.07) --
-------- -------- --------
Change in net asset value 0.19 3.07 0.22
-------- -------- --------
Net asset value, end of period $16.57 $16.38 $13.31
======== ======== ========
Total return(1) 16.52% 34.15% 1.68%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $10,466 $2,393 $330
Ratio to average net assets of:
Operating expenses 1.95% 2.04% 1.81%(2)
Net investment income (loss) (1.57%) (0.83%) 1.45%(2)
Portfolio turnover 401% 331% 306%
Average commission rate paid(6) $0.0655 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized
(3) Not annualized
(4) Computed using average shares outstanding.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from
anticipated results depending on the timing of share purchases and
redemptions.
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
32
<PAGE>
- --------------------------------------------------------------------------------
HIGH YIELD FUND SERIES
- --------------------------------------------------------------------------------
INVESTMENT ADVISER'S REPORT
Phoenix High Yield Fund posted impressive results over this latest fiscal
reporting period. For the twelve months ended October 31, 1996, the Fund's Class
A shares provided a total return of 15.95% and Class B shares returned 14.88%.
These results compare very favorably with the market, as measured by the CS
First Boston High Yield Index, which returned 10.47% over this same period.* All
of these results assume reinvestment of any distributions, but exclude the
effect of sales charges.
During this reporting cycle, the most significant factor contributing to
the Fund's strong performance was our sizable allocation to emerging markets
securities. This group not only outperformed all other sectors in the
fixed-income universe, but also outdistanced a bullish U.S. equity market. Over
the last twelve months, our research in this area has led us to a number of
rewarding investment opportunities in such countries as Poland, Russia, Mexico
and Argentina. Besides emerging markets, the Fund also benefited from its U.S.
high-yield exposure. Our strategy of focusing on non-cyclical industries worked
well and we are particularly pleased with the solid performance from our energy
and media holdings.
Given our outlook for slower economic growth in the U.S., the Fund's
investment strategy will emphasize defensive industries such as oil and gas,
health care and food and beverage. When opportunities present themselves, we
will also continue to invest in good credits from such out of favor industries
as cable television and pulp and paper. Lastly, despite the extended rally in
emerging markets bonds, we still remain bullish on this sector. Currently, we
are finding attractive valuations in such countries as Croatia and Venezuela as
well as from select corporate issues found in Mexico and Central Europe.
*The CS First Boston High Yield Index is an unmanaged, but commonly used
index that tracks returns of all new publicly offered debt of more than $75
million rated below "BBB" or "BBB/BB+."
INVESTOR PROFILE
The High Yield Fund is best suited for risk-tolerant investors seeking a
long-term investment to provide for high current income. High-yield fixed-income
securities generally are subject to greater market fluctuations and risk of loss
of income and principal than are investments in low-yielding fixed-income
securities. Foreign investing involves special risks, such as currency
fluctuation, less public disclosure as well as economic and political risks.
33
<PAGE>
- --------------------------------------------------------------------------------
High Yield Fund Series
- --------------------------------------------------------------------------------
[LINE CHART]
CS First Boston High Yield
High Yield Fund --
Index* Class A
------ -------
1986 10000 9525
1987 9977 9302
1988 11990 10949
1989 12170 11020
1990 11088 10470
1991 16091 13273
1992 18568 15433
1993 22103 18810
1994 22468 18327
1995 25893 20377
1996 28604 23628
[/LINE CHART]
Average Annual Total Returns for Periods Ending 10/31/96 From Inception
2/16/94 to
1 Year 5 Years 10 Years 10/31/96
- --------------------------------------------------------------------------------
Class A with 4.75% sales charge 10.41% 11.33% 9.09% --
- --------------------------------------------------------------------------------
Class A at net asset value 15.95% 12.41% 9.63% --
- --------------------------------------------------------------------------------
Class B with CDSC 10.88% -- -- 5.10%
- --------------------------------------------------------------------------------
Class B at net asset value 14.88% -- -- 6.04%
- --------------------------------------------------------------------------------
First Boston High Yield Index* 10.47% 12.19% 11.08% 8.32%**
- --------------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 10/31/86 for
Class A shares. The total return for Class A shares reflects the maximum sales
charge of 4.75% on the initial investment and assumes reinvestment of dividends
and capital gains. Class B share performance will be greater or less than that
shown based on differences in inception dates, fees and sales charges. The total
return (since inception 2/16/94) for Class B shares reflects the 5% contingent
deferred sales charge (CDSC), which is applicable on all shares redeemed during
the 1st year after purchase and 4% for all shares redeemed during the 2nd year
after purchase (scaled down to 3%--3rd year; 2%--4th and 5th year and 0%
thereafter). Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
*The CS First Boston High Yield Index is an unmanaged but commonly used index
that tracks the returns of all new publicly offered debt of more than $75
million rated below BBB or BBB/BB+. The index's performance does not reflect
sales charges.
**Index information from 2/28/94 to 10/31/96.
34
<PAGE>
- --------------------------------------------------------------------------------
High Yield Fund Series
- --------------------------------------------------------------------------------
INVESTMENTS AT OCTOBER 31, 1996
<TABLE>
<CAPTION>
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- ---------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--1.1%
U.S. Treasury Notes--1.1%
U.S. Treasury Notes WI 5.875%, '99 (g) Aaa $ 5,750 $ 5,747,700
------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $5,736,775) 5,747,700
------------
NON-CONVERTIBLE BONDS--62.6%
Advertising--1.9%
Outdoor Systems, Inc. 9.375%, '06 B 6,000 5,970,000
Universal Outdoor, Inc. 9.75%, '06 B 4,000 3,960,000
------------
9,930,000
------------
Asset-Backed Securities--1.4%
Airplanes Pass Through Trust 1D 10.875%, '19 Ba 7,000 7,595,000
------------
Chemical--1.9%
General Chemical 9.25%, '03 B 7,300 7,446,000
ISP Holdings, Inc. 9%, '03 Ba 2,500 2,518,750
------------
9,964,750
------------
Containers--4.3%
Owens-Illinois, Inc. 11%, '03 Ba 11,000 12,113,750
Portola Packaging, Inc. 10.75%, '05 B 10,000 10,450,000
------------
22,563,750
------------
Food & Beverages--2.2%
Canandaigua Wine 144A 8.75%, '03 (b) B 5,000 4,762,500
International Home Foods, Inc. 144A 10.375%,
'06 (b) B 7,000 7,070,000
------------
11,832,500
------------
Hospital Management & Services--4.7%
Healthsouth Rehabilitation 9.50%, '01 Ba 2,625 2,795,625
Tenet Healthcare Corp. 10.125%, '05 Ba 20,250 22,275,000
------------
25,070,625
------------
Industrial--1.1%
AAF-McQuay, Inc. 8.875%, '03 B 5,750 5,699,687
------------
Non-Agency Mortgage-Backed Securities--6.8%
Chase Mortgage Finance Corp. Private 93-2, B8
6.95%, '24 (i) BB(c) 4,323 3,534,866
DLJ Mortgage Acceptance Corp. 94-MF4, B2 144A
8.50%, '01 (b) BB(c) 3,000 2,723,438
Fund America Structured Trust 96-1, A 144A 0%, '26
(b) Baa 3,000 2,163,750
Non-Agency Mortgage-Backed Securities--continued
Merrill Lynch Mortgage 94-M1, E 144A 8.23%, '22 (b) Ba $ 4,000 $ 3,491,875
Prudential Home Mortgage Security Corp. 95-F, B1
144A 6.625%, '24 (b) Ba 1,329 1,048,206
Resolution Trust Corp. 95-2, B2 7%, '29 (h) Baa 5,672 5,551,689
Resolution Trust Corp. 95-2, C1 7.45%, '29 (h) Baa 3,212 3,187,243
Ryland Mortgage Security Corp. III 92-A, 1C 8.33%,
'30 BB(c) 1,000 768,750
Salomon Brothers Mortgage VII 95 C1 144A 6.801%,
'08 (b) B 9,201 6,935,159
SML, Inc. 94-C1, B2 10.30%, '99 (h) BB(c) 5,000 4,879,688
Structured Asset Securities Corp. 96-CFL, F 7.75%,
'28 BB(c) 1,600 1,423,000
------------
35,707,664
------------
Oil & Gas--5.5%
Benton Oil & Gas Co. 11.625%, '03 (h) NR 4,350 4,774,125
Flores & Rucks, Inc. 9.75%, '06 (h) B 8,000 8,220,000
Forcenergy, Inc. 9.50%, '06 B 2,000 2,027,500
Nuevo Energy Co. 9.50%, '06 B 13,500 13,905,000
------------
28,926,625
------------
Oil Service & Equipment--4.2%
NS Group, Inc. 13.50%, '03 B 10,500 10,539,375
Noble Drilling Corp. 9.125%, '06 Ba 10,800 11,421,000
------------
21,960,375
------------
Paper & Forest Products--4.0%
Buckeye Cellulose Corp. 9.25%, '08 Ba 5,500 5,568,750
SD Warren Co. Series B 12%, '04 B 4,250 4,590,000
Stone Container Corp. 11.875%, '98 B 10,500 11,116,875
------------
21,275,625
------------
Publishing, Broadcasting, Printing & Cable--12.5%
Comcast Corp. 9.375%, '05 B 6,000 6,000,000
Comcast Corp. 9.50%, '08 B 1,350 1,343,250
Comcast Corp. 10.625%, '12 B 5,000 5,318,750
Continental Cablevision 9.50%, '13 Ba 5,700 6,412,500
Frontiervision 11%, '06 B 7,000 6,965,000
Galaxy Telecom 12.375%, '05 B 8,000 8,380,000
Granite Broadcasting Corp. 10.375%, '05 B 7,000 7,105,000
See Notes to Financial Statements
35
<PAGE>
- --------------------------------------------------------------------------------
High Yield Fund Series
- --------------------------------------------------------------------------------
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- ---------------
Publishing, Broadcasting, Printing & Cable--continued
Poland Communications, Inc. 144A 9.875%, '03 (b) B $ 7,400 $ 7,400,000
SCI Television 11%, '05 B 15,800 16,886,250
------------
65,810,750
------------
Retail--1.9%
Eyecare Centers of America 12%, '03 (h) B 6,500 6,955,000
Scotty's Inc. Series A 11.25%, '15 (h) NR 3,200 2,968,000
------------
9,923,000
------------
Telecommunications--4.3%
Commnet Cellular 11.25%, '05 Caa 4,000 4,225,000
Sprint Spectrum L.P. 11%, '06 B 8,100 8,221,500
USA Mobile Communications 14%, '04 B 3,500 3,920,000
Viatel, Inc. 0%, '05 (e) B 3,500 2,170,000
Western Wireless 144A 10.50%, '07 (b) B 4,000 4,010,000
------------
22,546,500
------------
Truckers & Marine--1.2%
Viking Star Shipping 9.625%, '03 Ba 6,000 6,195,000
------------
Utility--Electric--4.7%
AES Corp. 9.75%, '00 Ba 8,000 8,280,000
California Energy 9.875%, '03 Ba 5,000 5,231,250
California Energy 0%, '04 (e) Ba 11,000 11,330,000
------------
24,841,250
------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $320,628,967) 329,843,101
------------
FOREIGN NON-CONVERTIBLE BONDS--19.3%
Argentina--3.1%
Bridas Corp. 12.50%, '99 B 11,500 12,103,750
Transportadora de Gas del Sur 10.25%, '01 B 4,000 4,110,000
------------
16,213,750
------------
Bermuda--1.0%
Sea Containers Ltd. 10.50%, '03 Ba 5,000 5,087,500
------------
Canada--5.3%
Call-Net Enterprises 0%,
'04 (e) B 12,000 9,330,000
Groupe Videotron Ltee 10.625%, '05 Ba 4,000 4,380,000
Gulf Canada Resources 9.625%, '05 Ba 7,000 7,402,500
Videotron Ltd. 10.25%, '02 Ba 6,500 7,003,750
------------
28,116,250
------------
Colombia--2.7%
Comunicacion Celular SA 0%, '03 (e) B 7,500 4,725,000
Occidente Y Caribe Celular 144A 0%, '04 (b) (e) B 19,085 9,542,500
------------
14,267,500
------------
Mexico--3.9%
Aerovias De Mexico Euro. 144A 9.75%, '00 (b) NR $ 1,150 $ 1,086,750
Aerovias De Mexico SA 9.75%, '00 NR 2,350 2,220,750
Coca-Cola Femsa 8.95%,
'06 Ba 2,000 2,008,750
Grupo Televisa SA 0%,
'08 (e) Ba 5,600 3,458,000
Ispat Mexicana SA Euro 10.375%, '01 NR 12,000 12,030,000
------------
20,804,250
------------
Philippines--0.8%
Subic Power Corp. 144A 9.50%, '08 (b) NR 3,879 4,044,181
------------
United Kingdom--2.5%
Comcast UK Cable 0%,
'07 (e) B 7,500 4,875,000
Diamond Cable Comm. Co. 0%, '04 (e) B 1,150 914,250
Videotron PLC 0%,
'04 (e) B 9,000 7,290,000
------------
13,079,250
------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $97,882,856) 101,612,681
------------
FOREIGN CONVERTIBLE BONDS--0.5%
Mexico--0.5%
Consorcio Grupo Dina Cv. 8%, '04 (e) CCC(c) 1,500 930,000
Empresas ICA Sociedad Euro Cv. 5%, '04 (e) B 2,500 1,712,500
------------
2,642,500
------------
TOTAL FOREIGN CONVERTIBLE BONDS
(Identified cost $2,703,528) 2,642,500
------------
FOREIGN GOVERNMENT SECURITIES--12.4%
Croatia--2.1%
Croatia Series A 6.688%,
'10 (e) NR 12,000 11,100,000
------------
Dominican Republic--0.3%
Dominican Republic 6.438%, '24 (e) NR 2,500 1,887,500
------------
Mexico--0.7%
United Mexican States Discount A 6.453%,
'19 (e) (f) Ba 4,500 3,701,250
------------
Morocco--1.6%
Morocco R&C Agreement Series A 6.438%, '09 (e) NR 10,800 8,572,500
------------
Panama--2.8%
Panama PDI 144A PIK interest capitalization 6.75%,
'16 (b) NR 19,500 14,503,125
------------
Peru--1.5%
Peru FLIRB WI 3.25%, '49 (e) (g) NR 4,000 2,210,000
Peru PDI WI 4%, '49 (e) (g) NR 9,000 5,433,750
------------
7,643,750
------------
See Notes to Financial Statements
36
<PAGE>
- --------------------------------------------------------------------------------
High Yield Fund Series
- --------------------------------------------------------------------------------
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- ---------------
Venezuela--3.4%
Banco Central Venezuela NMB B-NP 6.625%, '05 (e) Ba $ 1,000 $ 820,625
Banco Central Venezuela NMB B-P 6.625%, '05 (e) Ba 5,000 4,103,125
Republic of Venezuela Series A NMB 6.75%, '05 (e) Ba 7,000 5,744,375
Venezuela-FLIRB A Euro 6.625%, '07 (e) Ba 5,000 4,159,375
Venezuela FLIRB B 6.50%, '07 (e) Ba 4,000 3,327,500
------------
18,155,000
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $58,834,372) 65,563,125
------------
SHARES
---------
PREFERRED STOCKS--0.7%
Paper & Forest Products--0.7%
SD Warren Co. Pfd. PIK 144A Series B (b) 115,000 3,645,225
------------
TOTAL PREFERRED STOCKS
(Identified cost $2,421,900) 3,645,225
------------
CONVERTIBLE PREFERRED STOCKS--0.3%
Publishing, Broadcasting, Printing & Cable--0.3%
Granite Broadcasting Corp. Cv. Pfd 30,000 1,800,000
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $2,025,000) 1,800,000
------------
COMMON STOCKS--0.3%
Publishing, Broadcasting, Printing & Cable--0.0%
Sullivan Holdings, Inc. Class C (d) 76 0
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------ -------------
<S> <C> <C>
Telecommunications Equipment--0.3%
Viatel, Inc. (d) 126,350 $ 1,516,200
-----------
TOTAL COMMON STOCKS
(Identified cost $850,646) 1,516,200
-----------
WARRANTS--0.2%
Comunicacion Celular Warrants 144A (b) (d) 7,500 525,000
Eye Care Centers of America Warrants (d) 6,500 32,500
SD Warren Warrants
144A (b) (d) 115,000 345,000
-----------
902,500
-----------
TOTAL WARRANTS
(Identified cost $1,093,100) 902,500
-----------
TOTAL LONG-TERM INVESTMENTS--97.4%
(Identified cost $492,177,144) 513,273,032
-----------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ ------------ ---------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--2.3%
Commercial Paper--0.8%
Corporate Asset Funding Co., Inc. 5.60%, 11-1-96 A-1+ $4,500 4,500,000
------------
Federal Agency Securities--1.5%
Federal Home Loan Banks 5.53%, 11-1-96 7,720 7,720,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $12,220,000) 12,220,000
------------
TOTAL INVESTMENTS--99.7%
(Identified cost $504,397,144) 525,493,032(a)
Cash and receivables, less liabilities--0.3% 1,366,704
------------
NET ASSETS--100.0% $526,859,736
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $24,805,409 and gross
depreciation of $3,704,015 for income tax purposes. At October 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$504,391,638. At October 31, 1996, the Fund had capital loss
carryforwards for tax purposes aggregating $304,541,724 which may be used
to offset future capital gains. Of this amount, $223,463,597 was acquired
in connection with the merger of National Bond Fund into the Fund which
expire as follows: $177,036,784 through 1997; and, $46,426,813 through
1998. The Fund has additional capital loss carryforwards of $81,078,127
which expire as follows: $20,045,739 through 1998; $14,103,053 through
2002; and, $46,929,335 through 2003.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1996, these securities amounted to a value of $73,296,709 or 13.9% of net
assets.
(c) As rated by Standard & Poor's, Duff & Phelps or Fitch.
(d) Non-income producing.
(e) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(f) Mexico Value Recovery Euro Rights incorporated as a unit.
(g) When issued.
(h) Segregated as collateral.
(i) Private placement; acquisition cost $3,912,520, acquisition date 8/30/93.
The Fund will bear any costs, including those involved in registration
under the Securities Act of 1933, in connection with the disposition of
such securities.
See Notes to Financial Statements
37
<PAGE>
- --------------------------------------------------------------------------------
High Yield Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $504,397,144) $525,493,032
Cash 1,280
Receivables
Investment securities sold 22,307,277
Fund shares sold 1,298,933
Dividends and interest 9,958,403
------------
Total assets 559,058,925
------------
Liabilities
Payables
Investment securities purchased 31,112,245
Fund shares repurchased 348,080
Investment advisory fee 280,970
Transfer agent fee 184,081
Distribution fee 128,633
Financial agent fee 12,968
Trustees' fee 11,288
Accrued expenses 120,924
------------
Total liabilities 32,199,189
------------
Net Assets $526,859,736
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $584,843,221
Undistributed net investment income 2,038,026
Accumulated net realized loss (81,117,399)
Net unrealized appreciation 21,095,888
------------
Net Assets $526,859,736
============
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $501,264,973) 58,077,669
Net asset value per share $8.63
Offering price per share
$8.63/(1-4.75%) $9.06
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $25,594,763) 2,964,497
Net asset value and offering price per share $8.63
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<S> <C>
Investment Income
Interest $52,270,502
Dividends 1,589,287
Security lending 71,573
------------
Total investment income 53,931,362
------------
Expenses
Investment advisory fee 3,366,120
Distribution fee--Class A 1,254,146
Distribution fee--Class B 181,101
Financial agent fee 155,359
Transfer agent 936,760
Printing 121,237
Custodian 75,495
Professional 54,551
Registration 35,927
Trustees 19,101
Miscellaneous 12,480
------------
Total expenses 6,212,277
------------
Net investment income 47,719,085
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 26,433,066
Net change in unrealized appreciation (depreciation) on
investments 2,635,081
------------
Net gain on investments 29,068,147
------------
Net increase in net assets resulting from operations $76,787,232
============
</TABLE>
See Notes to Financial Statements
38
<PAGE>
- --------------------------------------------------------------------------------
High Yield Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
---------------- -----------------
<S> <C> <C>
From Operations
Net investment income $47,719,085 $51,288,841
Net realized gain (loss) 26,433,066 (45,170,764)
Net change in unrealized appreciation
(depreciation) 2,635,081 47,776,602
------------ ------------
Increase in net assets resulting from operations 76,787,232 53,894,679
------------ ------------
From Distributions to Shareholders
Net investment income--Class A (46,688,677) (49,483,730)
Net investment income--Class B (1,579,272) (817,976)
------------ ------------
Decrease in net assets from distributions to
shareholders (48,267,949) (50,301,706)
------------ ------------
From Share Transactions
Class A
Proceeds from sales of shares (8,790,783 and
9,926,312 shares, respectively) 73,572,017 78,513,605
Net asset value of shares issued from
reinvestment of distributions (2,806,249 and
3,110,460 shares, respectively) 23,385,527 24,479,580
Cost of shares repurchased (15,647,656 and
16,450,118 shares, respectively) (131,021,265) (130,311,090)
------------ ------------
Total (34,063,721) (27,317,905)
------------ ------------
Class B
Proceeds from sales of shares (1,998,410 and
915,297 shares, respectively) 16,749,310 7,282,409
Net asset value of shares issued from
reinvestment of distributions (76,435 and 36,805
shares, respectively) 639,323 292,115
Cost of shares repurchased (616,763 and 190,541
shares, respectively) (5,170,475) (1,491,768)
------------ ------------
Total 12,218,158 6,082,756
------------ ------------
Decrease in net assets from share transactions (21,845,563) (21,235,149)
------------ ------------
Net increase (decrease) in net assets 6,673,720 (17,642,176)
Net Assets
Beginning of period 520,186,016 537,828,192
------------ ------------
End of period (including undistributed net
investment income of $2,038,026 and $2,426,413,
respectively) $526,859,736 $520,186,016
============ ============
</TABLE>
See Notes to Financial Statements
39
<PAGE>
- --------------------------------------------------------------------------------
High Yield Fund Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------
Year Ended October 31,
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.17 $8.11 $9.11 $8.14 $7.70
Income from investment operations
Net investment income 0.78 0.80 0.76 0.74 0.77
Net realized and unrealized gain (loss) 0.46 0.04 (0.97) 0.97 0.44
------- ------- ------- ------- -------
Total from investment operations 1.24 0.84 (0.21) 1.71 1.21
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income (0.78) (0.78) (0.76) (0.74) (0.77)
Tax return of capital -- -- (0.03) -- --
------- ------- ------- ------- -------
Total distributions (0.78) (0.78) (0.79) (0.74) (0.77)
------- ------- ------- ------- -------
Change in net asset value 0.46 0.06 (1.00) 0.97 0.44
------- ------- ------- ------- -------
Net asset value, end of period $8.63 $8.17 $8.11 $9.11 $8.14
======= ======= ======= ======= =======
Total return(1) 15.95% 11.19% -2.57% 21.87% 16.28%
Ratios/supplemental data:
Net assets end of period (thousands) $501,265 $507,855 $531,773 $182,333 $113,197
Ratio to average net assets of:
Operating expenses 1.17% 1.21% 1.19% 1.04% 1.08%
Net investment income 9.21% 10.01% 9.01% 8.46% 9.51%
Portfolio turnover 162% 147% 222% 157% 205%
</TABLE>
<TABLE>
<CAPTION>
Class B
---------------------------------
From
Year Ended October Inception
31, 2/16/94 to
1996 1995 10/31/94
--------- --------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period $8.19 $8.13 $9.38
Income from investment operations
Net investment income 0.71 0.72 0.54
Net realized and unrealized gain (loss) 0.45 0.07 (1.25)
------- ------- -------
Total from investment operations 1.16 0.79 (0.71)
------- ------- -------
Less distributions
Dividends from net investment income (0.72) (0.73) (0.52)
Tax return of capital -- -- (0.02)
------- ------- -------
Total distributions (0.72) (0.73) (0.54)
------- ------- -------
Change in net asset value 0.44 0.06 (1.25)
------- ------- -------
Net asset value, end of period $8.63 $8.19 $8.13
======= ======= =======
Total return(1) 14.88% 10.44% -7.67%(3)
Ratios/supplemental data:
Net assets end of period (thousands) $25,595 $12,331 $6,056
Ratio to average net assets of:
Operating expenses 1.92% 1.97% 1.80%(2)
Net investment income 8.47% 9.18% 9.12%(2)
Portfolio turnover 162% 147% 222%
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized
(3) Not annualized
See Notes to Financial Statements
40
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES FUND SERIES
- --------------------------------------------------------------------------------
INVESTMENT ADVISER'S REPORT
With interest rates rising for most of this fiscal reporting period, it has
been a difficult market environment for bond investors. For the twelve months
ended October 31, 1996, the U.S. Government Securities Fund's Class A shares
provided a total return of 4.05% and Class B shares returned 3.39%. These
results modestly lagged the Lehman Brothers Government Bond Index. This commonly
used, unmanaged index of non-mortgaged U.S. government securities returned 5.12%
over the same period. All of these figures assume reinvestment of any
distributions, but exclude the effect of sales charges.
During the first six months of this reporting period, the Fund was
significantly overweighted in mortgage-backed securities. As this sector
performed well and their yield advantage concurrently declined, we began taking
profits in this area. More specifically, we gradually decreased our
mortgage-backed exposure from its high of 68% to its current portfolio weighting
of 10%. We believe the modest yield advantage which mortgage-backed securities
currently provide is not adequate compensation for the prepayment risk inherent
in these securities.
Looking ahead, our outlook for the bond market over the near term is fairly
optimistic, given the current environment of moderate economic growth and benign
inflation. We will continue to overweight U.S. Treasuries until the yield
advantage offered by mortgage-backed securities is adequate compensation for
their assumed risk. As always, we will continue to conservatively manage the
Fund, emphasizing those U.S. government securities that we believe offer the
best value in this segment of the market.
INVESTOR PROFILE
The U.S. Government Securities Fund is well suited for investors seeking a
high level of current income consistent with safety of principal.
41
<PAGE>
- --------------------------------------------------------------------------------
U.S. Government Securities Fund Series
- --------------------------------------------------------------------------------
[LINE CHART]
Lehman Brothers U.S. Government
Government Securities
Bond Index* Fund -- Class A
3/9/87 10000 9525
1987 9874 9013
1988 10834 9997
1989 12138 10852
1990 12859 11484
1991 14736 13119
1992 16256 14398
1993 18392 15864
1994 17571 15232
1995 20272 17488
1996 21309 18198
[/LINE CHART]
Average Annual Total Returns for Periods Ending 10/31/96
From From
Inception Inception
3/9/87 to 2/24/94 to
1 Year 5 Years 10/31/96 10/31/96
- --------------------------------------------------------------------------------
Class A with 4.75% sales charge -0.90% 5.86% 6.40% --
- --------------------------------------------------------------------------------
Class A at net asset value 4.05% 6.89% 6.94% --
- --------------------------------------------------------------------------------
Class B with CDSC -0.56% -- -- 3.70%
- --------------------------------------------------------------------------------
Class B at net asset value 3.39% -- -- 4.73%
- --------------------------------------------------------------------------------
Lehman Brothers Government Bond Index* 5.12% 7.66% 8.13%** 6.25%***
- --------------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 3/9/87 for
Class A shares. The total return for Class A shares reflects the maximum sales
charge of 4.75% on the initial investment and assumes reinvestment of dividends
and capital gains. Class B share performance will be greater or less than that
shown based on differences in inception dates, fees and sales charges. The total
return (from inception 2/24/94) for Class B shares reflects the 5% contingent
deferred sales charge (CDSC), which is applicable on all shares redeemed during
the 1st year after purchase and 4% for all shares redeemed during the 2nd year
after purchase (scaled down to 3%--3rd year; 2%--4th and 5th year and 0%
thereafter). Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
*The Lehman Brothers Government Bond Index is an unmanaged but commonly used
measure of non-mortgaged government securities performance. The index's
performance does not reflect sales charges.
**Index information from 2/28/87 to 10/31/96.
***Index information from 2/28/94 to 10/31/96.
42
<PAGE>
- --------------------------------------------------------------------------------
U.S. Government Securities Fund Series
- --------------------------------------------------------------------------------
INVESTMENTS AT OCTOBER 31, 1996
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- ---------------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES--86.8%
U.S. Treasury Bonds--20.4%
U.S. Treasury Bonds 7.125%, '23 AAA $15,000 $ 15,695,100
U.S. Treasury Bonds 6.875%, '25 AAA 11,000 11,249,920
U.S. Treasury Bonds 6%,
'26 AAA 1,500 1,369,217
U.S. Treasury Bonds 6.75%, '26 AAA 15,000 15,162,300
------------
43,476,537
------------
U.S. Treasury Notes--56.4%
U.S. Treasury Notes 5.375%, '97 AAA 15,000 14,970,450
U.S. Treasury Notes 6.50%, '97 AAA 10,000 10,079,700
U.S. Treasury Notes 5.875%, '98 AAA 30,000 30,075,000
U.S. Treasury Notes WI 5.875%, '99 (b) AAA 13,000 12,994,800
U.S. Treasury Notes 6.25%, '01 AAA 34,000 34,228,378
U.S. Treasury Notes 6.50%, '06 AAA 18,000 18,180,000
------------
120,528,328
------------
Agency Mortgage-Backed Securities--10.0%
FHLMC 9.30%, '05 AAA 285 286,488
FHLMC 6.75%, '19 AAA 1,500 1,499,415
FNMA 10%, '04 AAA 3,983 4,281,581
FNMA 8.70%, '16 AAA 1,068 1,100,400
FNMA 6.65%, '17 AAA 1,500 1,489,978
Agency Mortgage-Backed Securities--continued
FNMA 6.50%, '18 AAA $ 1,500 $ 1,482,329
FNMA 8.50%, '19 AAA 2,221 2,230,416
FNMA 6.75%, '19-'22 AAA 8,442 8,237,412
GNMA 8.50%, '01-'22 AAA 543 566,821
GNMA 8%, '05-'06 AAA 174 179,327
------------
21,354,167
------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $185,532,667) 185,359,032
------------
MUNICIPAL BONDS (c)--2.9%
Chicago Public Building Taxable 6.25%, '99 AAA 2,000 2,006,160
Chicago Public Building Taxable 6.65%, '01 AAA 1,000 1,010,010
Chicago Public Building Taxable 7%, '06 AAA 2,000 2,047,680
Chicago Public Building Taxable 7%, '07 AAA 1,050 1,069,404
------------
TOTAL MUNICIPAL BONDS
(Identified cost $6,037,186) 6,133,254
------------
SHORT-TERM OBLIGATIONS--16.0%
Federal Agency Securities--16.0%
Student Loan Marketing Assoc.
5.53%, 11-1-96 34,135 34,135,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $34,135,000) 34,135,000
------------
TOTAL INVESTMENTS--105.7%
(Identified cost $225,704,853) 225,627,286(a)
Cash and receivables, less liabilities--(5.7%) (12,199,893)
------------
NET ASSETS--100.0% $213,427,393
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $1,609,889 and gross
depreciation of $1,688,121 for income tax purposes. At October 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$225,705,518. At October 31, 1996, the Fund had capital loss
carryforwards for tax purposes aggregating $26,857,569 which may be used
to offset future capital gains. Of this amount $15,739,163 was acquired
in connection with the merger of National Federal Securities Trust Fund
into the Fund which expires as follows: $13,922,859 through 1997; and
$1,816,304 through 1998. The availability of these capital loss
carryforwards to offset future capital gains is subject to an annual
limitation determined under the Internal Revenue Code of 1986, as
amended. The Fund has additional capital loss carryforwards of
$11,118,406 which expire as follows: $8,684,579 through 2002; and
$2,433,827 through 2004.
(b) When issued.
(c) These Series 1996 bonds are fully defeased by U.S. Government Treasury
Obligations.
See Notes to Financial Statements
43
<PAGE>
- --------------------------------------------------------------------------------
U.S. Government Securities Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $225,704,853) $225,627,286
Cash 6,874
Receivables
Fund shares sold 85,484
Interest 1,384,574
-----------
Total assets 227,104,218
-----------
Liabilities
Payables
Investment securities purchased 12,975,300
Fund shares repurchased 383,629
Transfer agent fee 96,050
Investment advisory fee 81,314
Distribution fee 48,256
Trustees' fee 11,211
Financial agent fee 5,421
Accrued expenses 75,644
-----------
Total liabilities 13,676,825
-----------
Net Assets $213,427,393
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $224,359,908
Undistributed net investment income 264,123
Accumulated net realized loss (11,119,071)
Net unrealized depreciation (77,567)
-----------
Net Assets $213,427,393
===========
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $208,552,088) 22,017,731
Net asset value per share $9.47
Offering price per share
$9.47/(1-4.75%) $9.94
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $4,875,305) 515,906
Net asset value and offering price per share $9.45
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Interest $14,755,247
Security lending 99,724
------------
Total investment income 14,854,971
------------
Expenses
Investment advisory fee 1,016,243
Distribution fee--Class A 553,708
Distribution fee--Class B 43,484
Financial agent fee 67,750
Transfer agent 493,839
Printing 56,039
Professional 37,938
Custodian 31,354
Registration 27,335
Trustees 20,808
Miscellaneous 4,393
------------
Total expenses 2,352,891
------------
Net investment income 12,502,080
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss on securities (2,717,827)
Net change in unrealized appreciation (depreciation) on
investments (904,425)
------------
Net loss on investments (3,622,252)
------------
Net increase in net assets resulting from operations $8,879,828
============
</TABLE>
See Notes to Financial Statements
44
<PAGE>
- --------------------------------------------------------------------------------
U.S. Government Securities Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
---------------- -----------------
<S> <C> <C>
From Operations
Net investment income $12,502,080 $ 15,179,991
Net realized gain (loss) (2,717,827) 4,645,956
Net change in unrealized appreciation
(depreciation) (904,425) 15,291,582
------------ ------------
Increase in net assets resulting from operations 8,879,828 35,117,529
------------ ------------
From Distributions to Shareholders
Net investment income--Class A (11,752,701) (14,898,311)
Net investment income--Class B (201,921) (135,148)
Distributions in excess of net investment
income--Class A -- (124,677)
Distributions in excess of net investment
income--Class B -- (1,132)
------------ ------------
Decrease in net assets from distributions to
shareholders (11,954,622) (15,159,268)
------------ ------------
From Share Transactions
Class A
Proceeds from sales of shares (3,190,243 and
1,623,549 shares, respectively) 30,366,623 14,794,526
Net asset value of shares issued from reinvestment
of distributions (680,397 and 853,155 shares,
respectively) 6,412,886 7,809,721
Cost of shares repurchased (6,419,884 and 7,434,464
shares, respectively) (61,087,957) (68,623,281)
------------ ------------
Total (24,308,448) (46,019,034)
------------ ------------
Class B
Proceeds from sales of shares (241,903 and 351,124
shares, respectively) 2,287,444 3,208,563
Net asset value of shares issued from reinvestment
of distributions (11,893 and 6,855 shares,
respectively) 111,576 63,105
Cost of shares repurchased (119,425 and 116,132
shares, respectively) (1,122,209) (1,072,281)
------------ ------------
Total 1,276,811 2,199,387
------------ ------------
Decrease in net assets from share transactions (23,031,637) (43,819,647)
------------ ------------
Net decrease in net assets (26,106,431) (23,861,386)
Net Assets
Beginning of period 239,533,824 263,395,210
------------ ------------
End of period (including undistributed net
investment income of $264,123 and $0,
respectively) $213,427,393 $239,533,824
============ ============
</TABLE>
See Notes to Financial Statements
45
<PAGE>
- --------------------------------------------------------------------------------
U.S. Government Securities Fund Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------
Year Ended October 31,
1996 1995 1994 1993 1992
------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.60 $8.88 $9.87 $9.91 $9.65
Income from investment operations
Net investment income 0.52 0.55 0.64 0.62(1) 0.65(1)
Net realized and unrealized gain (loss) (0.15) 0.72 (1.02) 0.34 0.26
------- ------- ------- ------- -------
Total from investment operations 0.37 1.27 (0.38) 0.96 0.91
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income (0.50) (0.55) (0.45) (0.62) (0.65)
Dividends from net realized gains -- -- (0.02) (0.38) --
Tax return of capital -- -- (0.14) -- --
------- ------- ------- ------- -------
Total distributions (0.50) (0.55) (0.61) (1.00) (0.65)
------- ------- ------- ------- -------
Change in net asset value (0.13) 0.72 (0.99) (0.04) 0.26
------- ------- ------- ------- -------
Net asset value, end of period $9.47 $9.60 $8.88 $9.87 $9.91
======= ======= ======= ======= =======
Total return(2) 4.05% 14.81% -3.98% 10.18% 9.74%
Ratios/supplemental data:
Net assets, end of period (thousands) $235,879
$208,552 $262,157 $57,072 $40,365
Ratio to average net assets of:
Operating expenses 1.03% 0.99% 0.98% 0.75% 0.77%
Net investment income 5.55% 6.01% 5.92% 6.19% 6.64%
Portfolio turnover 379% 178% 101% 264% 285%
</TABLE>
<TABLE>
<CAPTION>
Class B
--------------------------------
From
Year Ended October Inception
31, 2/24/94 to
1996 1995 10/31/94
-------- -------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.58 $8.86 $9.61
Income from investment operations
Net investment income 0.44 0.48 0.39
Net realized and unrealized gain (loss) (0.14) 0.72 (0.75)
------- ------- -------
Total from investment operations 0.30 1.20 (0.36)
------- ------- -------
Less distributions
Dividends from net investment income (0.43) (0.48) (0.30)
Dividends from net realized gains -- -- --
Tax return of capital -- -- (0.09)
------- ------- -------
Total distributions (0.43) (0.48) (0.39)
------- ------- -------
Change in net asset value (0.13) 0.72 (0.75)
------- ------- -------
Net asset value, end of period $9.45 $9.58 $8.86
======= ======= =======
Total return(2) 3.39% 13.82% -3.83%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $4,875 $3,655 $1,238
Ratio to average net assets of:
Operating expenses 1.78% 1.73% 2.00%(3)
Net investment income 4.79% 5.23% 4.49%(3)
Portfolio turnover 379% 178% 101%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.03 and $0.04 respectively.
(2) Maximum sales load is not reflected in the total return calculation.
(3) Annualized
(4) Not annualized
See Notes to Financial Statements
46
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUND SERIES
- --------------------------------------------------------------------------------
INVESTMENT ADVISER'S REPORT
Over the last twelve months, Phoenix Money Market Fund continued to produce
solid results for its shareholders. As of October 31, 1996, the current yield on
the Fund's Class A and B shares were 4.52% and 4.23%, respectively, as compared
with the 4.75% average yield of taxable money market funds reported by IBC
Donoghue's Money Fund Report. The current yield is a seven-day annualized yield
computed by dividing the average net income earned per share during the
seven-day period preceding the date of calculation by the average daily net
asset value per share for the same period, with the resulting figure multiplied
by 365.
Shifting market opinion over the direction of the U.S. economy was
responsible for much of the volatility in short-term interest rates during this
latest twelve-month reporting period. During December and January, the Federal
Reserve cut the Fed Funds Rate in an effort to stimulate what was believed to be
a sluggish economy. Although it was widely anticipated that the Fed would have
to lower rates again, a surprisingly strong February employment report provided
conflicting evidence about the economy's condition. As more information became
available, it became evident that the economy had grown robustly over the first
half of 1996. During this period, interest rates were pushed higher as the
financial markets had to consider the threat of future inflation.
By late summer, the consensus view on Wall Street shifted once again as
signs of more moderate economic growth became increasingly more apparent and
concerns over inflation declined. These signs of a slower economy allowed
interest rates to fall for the remainder of the reporting period. In the end,
despite all these market gyrations over the last twelve months, the yield on the
90-Day Treasury Bill declined only 33 basis points, from 5.47% to 5.14%.
Looking ahead, the Fund continues to focus on high quality assets as
represented by the portfolio's average credit quality of A1/P1 as of October 31,
1996. In terms of our asset allocation strategy, we are currently emphasizing
top-tier commercial paper, variable-rate instruments and U.S. Government
obligations. As always, we remain committed to carefully monitoring the
short-term markets for attractive investment opportunities.
INVESTOR PROFILE
Investors seeking high current income with high liquidity are best suited
for this Fund. Phoenix Money Market Fund is neither insured nor guaranteed by
the U.S. government, and there can be no assurance the Fund will be able to
maintain a stable net asset value of $1.00 per share.
Monthly Yield Comparison
[LINE CHART]
IBC Donoghue
Money Fund Money Market
Report* Fund -- Class A
------- ---------------
11/95 5.17 5.04
12/95 5.15 5.06
1/96 5.03 4.87
2/96 4.8 4.52
3/96 4.49 4.49
4/96 4.68 4.54
5/96 4.67 4.47
6/96 4.7 4.46
7/96 4.73 4.55
8/96 4.74 4.58
9/96 4.75 4.64
10/96 4.75 4.64
[/LINE CHART]
The above graph covers the period from October 31, 1995 to October 31, 1996. The
results are not indicative of the rate of return which may be realized from an
investment made in the Money Market Fund today. The Money Market Fund Series is
neither insured nor guaranteed by the U.S. Government, and there can be no
assurance that the Fund will be able to maintain a stable Net Asset Value at
$1.00 per share.
*Average monthly yield of taxable Money Market Funds as reported by IBC
Donoghue's Money Fund Report.
47
<PAGE>
- --------------------------------------------------------------------------------
Money Market Fund Series
- --------------------------------------------------------------------------------
INVESTMENTS AT OCTOBER 31, 1996
<TABLE>
<CAPTION>
Face
Amount Interest Maturity
(000) Description Rate Date Value
- ---------- -------------------------------- --------- ----------- -------------
<S> <C> <C>
U.S. TREASURY BILLS--0.6%
$ 1,255 U.S. Treasury Bills 4.80% 02/06/97 $1,241,576
-----------
TOTAL U.S. TREASURY BILLS 1,241,576
-----------
U.S. TREASURY NOTES--3.4%
7,000 U.S. Treasury Notes 6.88 02/28/97 7,038,834
-----------
TOTAL U.S. TREASURY NOTES 7,038,834
-----------
FEDERAL AGENCY SECURITIES--3.7%
3,500 Federal Home Loan Banks 5.27 02/28/97 3,500,000
4,000 Federal Home Loan Banks 5.40 03/20/97 3,998,162
-----------
TOTAL FEDERAL AGENCY SECURITIES 7,498,162
-----------
FEDERAL AGENCY SECURITIES--VARIABLE--19.7% (b)
</TABLE>
<TABLE>
<CAPTION>
Reset
Date
-----------
<S> <C> <C>
3,500 Federal Farm Credit Bank (final maturity
02/24/97) 5.51 11/01/96 3,499,626
10,500 Federal Farm Credit Bank (final maturity
07/24/00) 5.54 11/01/96 10,504,414
3,500 Student Loan Marketing Association (final
maturity 11/10/98) 5.37 11/01/96 3,496,256
1,000 Student Loan Marketing Association (final
maturity 10/14/97) 5.35 11/05/96 997,812
1,000 Student Loan Marketing Association (final
maturity 11/24/97) 5.35 11/05/96 1,000,000
2,000 Student Loan Marketing Association (final
maturity 02/22/99) 5.38 11/05/96 2,000,000
3,000 Student Loan Marketing Association (final
maturity 03/07/01) 5.44 11/05/96 3,000,000
3,500 Student Loan Marketing Association (final
maturity 10/30/97) 5.53 11/05/96 3,501,922
4,000 Federal Home Loan Banks (final maturity
01/14/97) 5.70 11/07/96 4,000,000
5,000 Student Loan Marketing Association (final
maturity 02/08/99) 5.39 11/08/96 5,000,000
3,000 Federal National Mortgage Association (final
maturity 12/14/98) 5.53 12/14/96 2,996,510
-----------
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE 39,996,540
-----------
</TABLE>
<TABLE>
<CAPTION>
Standard
Face & Poor's
Amount Rating Interest Maturity
(000) Description (Unaudited) Rate Date Value
- ---------- -------------------------------- ---------- -------------------- -------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER--81.6%
$ 9,535 CXC, Inc. A-1+ 5.70% 11/01/96 $9,535,000
1,318 Preferred Receivables Funding
Corp. A-1 5.25 11/01/96 1,318,000
4,505 Albertson's, Inc. A-1 5.23 11/04/96 4,503,038
1,500 Beta Finance, Inc. A-1+ 5.35 11/04/96 1,499,331
3,572 Merrill Lynch & Co., Inc. A-1+ 5.45 11/04/96 3,570,378
1,435 Preferred Receivables Funding
Corp. A-1 5.25 11/04/96 1,434,372
2,000 AlliedSignal, Inc. A-1 5.37 11/04/96 1,998,807
1,000 Receivables Capital Corp. A-1 5.31 11/06/96 999,262
5,500 Kimberly-Clark Corp. A-1+ 5.27 11/08/96 5,494,364
2,440 Abbott Laboratories A-1+ 5.20 11/12/96 2,436,123
2,865 Coca-Cola Co. A-1+ 5.20 11/12/96 2,860,448
4,125 Kellogg Co. A-1+ 5.23 11/12/96 4,118,408
6,160 AlliedSignal, Inc. A-1 5.24 11/14/96 6,146,252
6,185 Goldman Sachs & Co. A-1+ 5.30 11/14/96 6,173,163
500 Gannett Co. A-1 5.27 11/15/96 498,975
7,390 Shell Oil Co. A-1+ 5.20 11/15/96 7,375,056
4,000 Ameritech Capital Funding Corp. A-1+ 5.27 11/18/96 3,990,046
2,955 Goldman Sachs & Co. A-1+ 5.28 11/19/96 2,947,199
6,550 McDonald's Corp. A-1+ 5.21 11/19/96 6,532,937
1,090 Minnesota Mining & Manufacturing
Co. A-1+ 5.22 11/20/96 1,086,997
7,910 Minnesota Mining & Manufacturing
Co. A-1+ 5.37 11/20/96 7,887,002
5,500 General Electric Capital Corp. A-1+ 5.25 11/21/96 5,500,000
985 Corporate Asset Funding Co., Inc. A-1+ 5.25 11/22/96 981,983
1,721 Receivables Capital Corp. A-1 5.26 11/22/96 1,715,649
500 General Electric Capital Corp. A-1+ 5.28 11/25/96 498,240
4,000 Preferred Receivables Funding
Corp. A-1 5.29 11/25/96 3,985,893
1,415 Greenwich Funding Corp. A-1+ 5.27 11/27/96 1,409,614
3,750 Albertson's, Inc. A-1 5.24 12/03/96 3,732,533
775 Preferred Receivables Funding
Corp. A-1 5.27 12/03/96 771,370
See Notes to Financial Statements
48
<PAGE>
- --------------------------------------------------------------------------------
Money Market Fund Series
- --------------------------------------------------------------------------------
Standard
Face & Poor's
Amount Rating Interest Maturity
(000) Description (Unaudited) Rate Date Value
- ---------- -------------------------------- ---------- --------- ----------- -------------
COMMERCIAL PAPER--continued
$830 Preferred Receivables Funding
Corp. A-1 5.45% 12/03/96 $825,979
4,005 First Deposit Funding Trust A-1 5.50 12/04/96 3,984,808
1,300 AlliedSignal, Inc. A-1 5.25 12/05/96 1,293,554
1,865 McKenna Triangle National Corp. A-1+ 5.25 12/05/96 1,855,753
8,400 Private Export Funding Corp. A-1+ 5.45 12/05/96 8,356,763
4,450 Receivables Capital Corp. A-1 5.28 12/05/96 4,427,809
4,040 BellSouth Telecommunications A-1+ 5.23 12/06/96 4,019,458
3,615 International Lease Finance A-1 5.27 12/06/96 3,596,478
7,500 Coca-Cola Co. A-1+ 5.20 12/13/96 7,454,500
208 Kellogg Co. A-1+ 5.25 12/13/96 206,726
2,670 Greenwich Funding Corp. A-1+ 5.26 12/16/96 2,652,445
COMMERCIAL PAPER--continued
$5,460 Warner-Lambert Co. A-1+ 5.25% 12/16/96 $5,424,169
7,190 Procter & Gamble Co. A-1+ 5.22 12/18/96 7,141,000
4,275 Southwestern Bell Telephone Co. A-1+ 5.23 12/19/96 4,245,189
5,000 General RE Corp. A-1+ 5.25 12/24/96 4,961,354
1,105 Preferred Receivables Funding
Corp. A-1 5.27 12/26/96 1,096,103
3,216 First Deposit Funding Trust A-1 5.34 01/30/97 3,173,066
-----------
TOTAL COMMERCIAL PAPER 165,715,594
-----------
MEDIUM-TERM NOTES--2.0%
4,000 Beta Finance, Inc. 5.80 08/14/97 4,000,000
-----------
TOTAL MEDIUM-TERM NOTES 4,000,000
-----------
TOTAL INVESTMENTS--111.0%
(Identified cost $225,490,706) 225,490,706(a)
Cash and receivables, less liabilities--(11.0%) (22,408,762)
-----------
NET ASSETS--100.0% $203,081,944
===========
</TABLE>
(a) Federal Income Tax Information: At October 31, 1996, the aggregate cost
of securities was the same for book and tax purposes.
(b) Variable rate demand note. The interest rates shown reflect the rate
currently in effect.
See Notes to Financial Statements
49
<PAGE>
- --------------------------------------------------------------------------------
Money Market Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $225,490,706) $225,490,706
Cash 100,250
Receivables
Fund shares sold 677,809
Interest 543,556
-----------
Total assets 226,812,321
-----------
Liabilities
Payables
Fund shares repurchased 23,347,427
Dividend distributions 162,599
Investment advisory fee 73,308
Transfer agent fee 67,374
Trustees' fee 11,289
Distribution fee 6,128
Financial agent fee 5,331
Accrued expenses 56,921
-----------
Total liabilities 23,730,377
-----------
Net Assets $203,081,944
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $203,081,944
-----------
Net Assets $203,081,944
===========
Class A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $192,859,407) 192,859,407
Net asset value and offering price per share $1.00
Class B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $10,222,537) 10,222,537
Net asset value and offering price per share $1.00
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Interest $11,194,770
Security lending 1,145
-----------
Total investment income 11,195,915
-----------
Expenses
Investment advisory fee 811,036
Distribution fee--Class B 67,828
Financial agent fee 60,828
Transfer agent fee 611,435
Printing 76,670
Registration 54,703
Custodian 37,798
Professional 35,713
Trustees 20,797
Miscellaneous 470
-----------
Total expenses 1,777,278
-----------
Net investment income $9,418,637
===========
</TABLE>
See Notes to Financial Statements
50
<PAGE>
- --------------------------------------------------------------------------------
Money Market Fund Series
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
----------------- -----------------
<S> <C> <C>
From Operations
Net investment income $9,418,637 $10,911,215
------------ ------------
From Distributions to Shareholders
Net investment income--Class A (9,064,115) (10,599,772)
Net investment income--Class B (354,522) (311,443)
------------ ------------
Decrease in net assets from distributions to
shareholders (9,418,637) (10,911,215)
------------ ------------
From Share Transactions
Class A
Proceeds from sales of shares (1,212,801,272 and
591,523,801 shares, respectively) 1,212,801,272 591,523,801
Net asset value of shares issued from
reinvestment of distributions (8,374,618 and
9,841,714 shares, respectively) 8,374,618 9,841,714
Cost of shares repurchased (1,221,850,524 and
604,397,117 shares, respectively) (1,221,850,524) (604,397,117)
------------ ------------
Total (674,634) (3,031,602)
------------ ------------
Class B
Proceeds from sales of shares (16,991,839 and
16,688,133 shares, respectively) 16,991,839 16,688,133
Net asset value of shares issued from
reinvestment of distributions (281,654 and
248,387 shares, respectively) 281,654 248,387
Cost of shares repurchased (15,556,837 and
10,516,662 shares, respectively) (15,556,837) (10,516,662)
------------ ------------
Total 1,716,656 6,419,858
------------ ------------
Increase in net assets from share transactions 1,042,022 3,388,256
------------ ------------
Net increase in net assets 1,042,022 3,388,256
Net Assets
Beginning of period 202,039,922 198,651,666
------------ ------------
End of period $203,081,944 $202,039,922
============ ============
</TABLE>
See Notes to Financial Statements
51
<PAGE>
- --------------------------------------------------------------------------------
Money Market Fund Series
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------
Year Ended October 31,
1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations
Net investment income 0.047 0.053 0.032 0.025(1) 0.035(1)
------- ------- ------- ------- -------
Total from investment operations 0.047 0.053 0.032 0.025 0.035
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income (0.047) (0.053) (0.032) (0.025) (0.035)
------- ------- ------- ------- -------
Change in net asset value -- -- -- -- --
------- ------- ------- ------- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total return 4.67% 5.32% 3.20% 2.50% 3.50%
Ratios/supplemental data:
Net assets, end of period (thousands) $192,859 $193,534 $196,566 $170,334 $180,786
Ratio to average net assets of:
Operating expenses 0.84% 0.71% 0.85% 0.85% 0.85%
Net investment income 4.68% 5.31% 3.19% 2.53% 3.50%
</TABLE>
<TABLE>
<CAPTION>
Class B
---------------------------------
From
Inception
Year Ended October 31, 7/15/94 to
1996 1995 10/31/94
--------- --------- ------------
<S> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00
Income from investment operations
Net investment income 0.039 0.046 0.007
------- ------- -------
Total from investment operations 0.039 0.046 0.007
------- ------- -------
Less distributions
Dividends from net investment income (0.039) (0.046) (0.007)
------- ------- -------
Change in net asset value -- -- --
------- ------- -------
Net asset value, end of period $1.00 $1.00 $1.00
======= ======= =======
Total return 3.93% 4.63% 0.70%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $10,223 $8,506 $2,086
Ratio to average net assets of:
Operating expenses 1.59% 1.44% 1.60%(2)
Net investment income 3.92% 4.62% 3.46%(2)
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.0001 and $0.001, respectively.
(2) Annualized
(3) Not annualized
See Notes to Financial Statements
52
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1996
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Series Fund (the "Trust") is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management investment company. Each Series has
distinct investment objectives. The Balanced Fund Series seeks to provide
reasonable income, long-term capital growth and conservation of capital. The
Convertible Fund Series seeks as its investment objectives income and the
potential for capital appreciation; these objectives are to be considered as
relatively equal. The Growth Fund Series seeks long-term appreciation of
capital. The Aggressive Growth Fund Series (formerly the U.S. Stock Fund
Series) seeks appreciation of capital through the use of aggressive
investment techniques. The High Yield Fund Series seeks to provide high
current income. The U.S. Government Securities Fund Series seeks a high level
of current income by investing in U.S. Government guaranteed or backed
securities. The Money Market Fund Series seeks to provide as high a level of
current income consistent with capital preservation and liquidity.
Each Series offers both Class A and Class B shares. Class A shares are
sold with a front-end sales charge of up to 4.75%. Class B shares are sold
with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Both 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 Series are borne pro rata by the holders of
both classes of shares, except that each class bears distribution expenses
unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues and
expenses. Actual results could differ from those estimates.
A. Security valuation:
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis
of broker quotations or valuations provided by a pricing service which
utilizes information with respect to recent sales, market transactions in
comparable securities, quotations from dealers, and various relationships
between securities in determining value. Short-term investments having a
remaining maturity of 60 days or less are valued at amortized cost which
approximates market. All other securities and assets are valued at their fair
value as determined in good faith by or under the direction of the Trustees.
The Money Market Fund Series uses the amortized cost method of security
valuation which, in the opinion of the Trustees, represents the fair value of
the particular security. The Trustees monitor the deviations between the
classes' net asset value per share as determined by using available market
quotations and its amortized cost per share. If the deviation exceeds 1/2 of
1%, the Board of Trustees will consider what action, if any, should be
initiated to provide a fair valuation. This valuation procedure allows each
class of the Series to maintain a constant net asset value of $1 per share.
The assets of the Series will not be invested in any security with a maturity
of greater than 397 days, and the average weighted maturity of its portfolio
will not exceed 90 days.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date or, in the case of certain foreign
securities, as soon as the Series is notified. Interest income is recorded on
the accrual basis. The Trust does not amortize premiums except for the Money
Market Fund Series, but does amortize discounts using the effective interest
method. Realized gains and losses are determined on the identified cost
basis.
C. Income taxes:
Each of the Series is treated as a separate taxable entity. It is the policy
of each Series in the Trust to comply with the requirements of the Internal
Revenue Code (the Code), applicable to regulated investment companies, and to
distribute substantially all of its taxable income to its shareholders. In
addition, each Series 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 Series 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, expiring
capital loss carryforwards, foreign currency gain/loss, partnerships, 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.
53
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1996 (Continued)
E. Foreign currency translation:
Foreign securities, 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 of the Series, except U.S. Government Securities Fund Series and Money
Market Fund Series, may enter into forward currency contracts in conjunction
with the planned purchase or sale of foreign denominated securities in order
to hedge the U.S. dollar cost or proceeds. Forward currency contracts
involve, to varying degrees, elements of market risk in excess of the amount
recognized in the statement of assets and liabilities. Risks arise from the
possible movements in foreign exchange rates or if the counterparty does not
perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are traded directly between currency traders
and their customers. The contract is marked-to-market daily and the change in
market value is recorded by each Series as an unrealized gain (or loss). When
the contract is closed, the Series 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.
G. Futures contracts:
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. A Series may enter into financial
futures contracts as a hedge against anticipated changes in the market value
of their portfolio securities. Upon entering into a futures contract the
Series is required to pledge to the broker an amount of cash and/or
securities equal to the "initial margin" requirements of the futures exchange
on which the contract is traded. Pursuant to the contract, the Series agrees
to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
variation margin and are recorded by the Series as unrealized gains or
losses. When the contract is closed, the Series records a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed. The potential risk to a
Series is that the change in value of the futures contract may not correspond
to the change in value of the hedged instruments.
H. Security lending:
The Trust loans securities to qualified brokers through an agreement with
State Street Bank & Trust (the Custodian). Under the terms of the agreement,
the Trust receives collateral with a market value not less than 100% of the
market value of loaned securities. Collateral is adjusted daily in connection
with changes in the market value of securities on loan. Collateral consists
of cash, securities issued or guaranteed by the U.S. Government or its
agencies and the sovereign debt of foreign countries. Interest earned on the
collateral and premiums paid by the borrower are recorded as income by the
Trust net of fees charged by the Custodian for its services in connection
with this securities lending program. Lending portfolio securities involves a
risk of delay in the recovery of the loaned securities or in the foreclosure
on collateral. At October 31, 1996, the Trust had the following amounts of
security loans:
<TABLE>
<CAPTION>
Value of
Value of Securities
Collateral on Loan
-------------- --------------
<S> <C> <C>
Balanced Fund Series $48,955,252 $46,601,326
Convertible Fund Series 6,226,300 5,861,788
Growth Fund Series 9,081,798 8,752,225
Aggressive Growth Fund Series 11,123,400 10,521,025
</TABLE>
I. Expenses:
Expenses incurred by the Trust with respect to any two or more Series are
allocated in proportion to the net assets of each Series, except where
allocation of direct expense to each Series or an alternative allocation
method can be more fairly made.
J. Options:
Each Series may purchase put or call options on securities and securities
indices and foreign currencies for the purpose of hedging against changes in
the market value of the underlying securities or foreign currencies. The
Series pays a premium which is included in the Series' Schedule of
Investments and subsequently marked to market to reflect the current value of
the option. The risk associated with purchasing put and call options is
limited to the premium paid.
54
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1996 (Continued)
K. When-Issued and Delayed Delivery Transactions:
Each Series may engage in when-issued or delayed delivery transactions. The
Series record when-issued securities on the trade date and maintain
collateral for the securities purchased. Securities purchased on a when-
issued or delayed delivery basis begin earning interest on the settlement
date.
NOTE 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 Series:
<TABLE>
<CAPTION>
1st $1-2 $2+
Series $1 Billion Billion Billion
- ----------------------------------------- ------------- --------- ----------
<S> <C> <C> <C>
Growth Fund Series 0.70% 0.65% 0.60%
Aggressive Growth Fund Series 0.70% 0.65% 0.60%
Convertible Fund Series 0.65% 0.60% 0.55%
High Yield Fund Series 0.65% 0.60% 0.55%
Balanced Fund Series 0.55% 0.50% 0.45%
U.S. Government Securities Fund Series 0.45% 0.40% 0.35%
Money Market Fund Series 0.40% 0.35% 0.30%
</TABLE>
The Adviser has agreed to assume expenses and reduce the advisory fee for
the benefit of the Money Market Fund Series to the extent that total expenses
(excluding interest, taxes, brokerage fees and commissions and extraordinary
expenses) exceed 0.85% for Class A shares and 1.60% for Class B shares of the
average of the aggregate daily net asset value.
Phoenix Equity Planning Corporation (PEPCO), an indirect majority-owned
subsidiary of PHL, which serves as the national distributor of the Trust's
shares, has advised the Fund that it retained selling commissions of $691,327
for Class A shares and deferred sales charges of $221,156 for Class B shares,
for the year ended October 31, 1996. In addition, each Series except the
Money Market Fund Series pays PEPCO a distribution fee of an annual rate of
0.25% for Class A shares and 1.00% for Class B shares applied to the average
daily net assets of each Series; the distribution fee for the Money Market
Fund Series is 0% and 0.75% for Class A and Class B, respectively. The
distributor has advised the Series that of the total amount expensed for the
year ended October 31, 1996, $2,527,185 was earned by the Distributor and
$12,616,838 was earned by unaffiliated participants.
As Financial Agent to the Trust and to each Series, PEPCO receives a fee
at an annual rate of 0.03% of the average daily net assets for bookkeeping,
administrative and pricing services. PEPCO serves as the Funds' Transfer
Agent with State Street Bank and Trust Company as sub- transfer agent. For
the year ended October 31, 1996, transfer agent fees were $10,745,555 of
which PEPCO retained $3,890,559 which is net of fees paid to State Street.
At October 31, 1996, PHL and affiliates held Phoenix Series Fund shares
which aggregated the following:
<TABLE>
<CAPTION>
Aggregate
Net Asset
Shares Value
------------- -------------
<S> <C> <C>
High Yield Fund Series Class A 362 $ 3,122
Aggressive Growth Fund Series
Class B 9,692 160,685
Money Market Fund Series Class A 10,622,054 10,622,054
U.S. Government Securities Fund
Series Class A 282 2,673
</TABLE>
NOTE 3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended October 31, 1996
(excluding U.S. Government and Agency securities and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
--------------- ---------------
<S> <C> <C>
Balanced Fund Series $2,394,146,110 $2,614,915,287
Convertible Fund Series 290,043,437 286,658,132
Growth Fund Series 2,403,162,847 2,697,422,595
Aggressive Growth Fund Series 865,015,594 842,042,215
High Yield Fund Series 554,894,266 583,153,492
U.S. Government Securities Fund Series 6,037,330 --
</TABLE>
Purchases and sales of U.S. Government and Agency securities during the
year ended October 31, 1996, aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
--------------- ---------------
<S> <C> <C>
Balanced Fund Series $1,266,498,878 $1,548,778,844
Convertible Fund Series -- --
Growth Fund Series -- --
Aggressive Growth Fund Series -- --
High Yield Fund Series 270,059,637 274,754,781
U.S. Government Securities Fund Series 796,734,826 836,454,917
</TABLE>
55
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1996 (Continued)
NOTE 4. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Series of the Fund have
recorded several reclassifications in the capital accounts. These
reclassifications have no impact on the net asset value of the Series and are
designed generally to present undistributed income and realized gains on a
tax basis which is considered to be more informative to the shareholder. As
of October 31, 1996, the Series recorded the following reclassifications to
increase (decrease) the accounts listed below:
<TABLE>
<CAPTION>
Capital paid
Undistributed Accumulated in on shares
net investment net realized of beneficial
income (loss) gains (losses) interest
---------------- --------------- ---------------
<S> <C> <C> <C>
Balanced Fund Series $ (180,102) $ 251,293 $ (71,191)
Growth Fund Series (214,201) 118,510 95,691
Aggressive Growth Fund Series 1,821,362 (1,821,397) 35
High Yield Fund Series 160,477 (23,971,504) 23,811,027
U.S. Government Securities Fund
Series (283,335) 283,335 --
</TABLE>
NOTE 5. CAPITAL LOSS CARRYOVERS
For the year ended October 31, 1996, the High Yield Series was able to
utilize losses deferred in the prior year against current year capital gains
in the amount of $26,087,927.
TAX INFORMATION NOTICE (Unaudited)
For the fiscal year ended October 31, 1996, the following Series distributed
long-term capital gains dividends as follows:
<TABLE>
<CAPTION>
<S> <C>
Balanced Fund Series $ 21,375,501
Convertible Fund Series 2,232,990
Growth Fund Series 105,434,273
Aggressive Growth Fund Series 1,742,840
</TABLE>
For federal income tax purposes, 8.5%, 9.5% and 24.6% of the ordinary
income dividends paid by the Balanced Fund Series, the Convertible Fund
Series and the Growth Fund Series, respectively, qualify for the dividends
received deduction for corporate shareholders.
56
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGOTYPE] Price Waterhouse LLP [LOGO]
To the Shareholders and Trustees of
Phoenix Series Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Balanced Fund Series, the Convertible Fund Series, the Growth Fund Series,
the Aggressive Growth Fund Series (formerly the U.S. Stock Fund Series), the
High Yield Fund Series, the U.S. Government Securities Fund Series and the Money
Market Fund Series (constituting the Phoenix Series Fund, hereinafter referred
to as the "Fund") at October 31, 1996, the results of each of their operations
for the year then ended, the changes in each of their net assets for each of the
two years in the period then ended and the financial highlights for each of the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 1996 by correspondence with the custodian and brokers, and the application
of alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Boston, Massachusetts
December 13, 1996
57
<PAGE>
WHAT IS THE PHOENIX SERIES FUND?
Phoenix Series Fund is your investment for a lifetime! Consisting of seven
individual portfolios, each with a separate investment objective, the Series
Fund is a mutual fund designed to provide you with convenience and flexibility
in making your investment decisions. As your personal financial needs change,
you can easily redirect your investment to a more suitable portfolio within the
Series Fund.
WHO MANAGES MY FUND?
Phoenix Investment Counsel, Inc. provides skilled and professional
management services, including investment selection and portfolio supervision.
WHY ARE THERE SEVEN FUNDS?
We have designed seven separate funds, each with different investment
objectives, in order to meet a variety of investment goals.
Phoenix Balanced Fund Series seeks as its investment objectives reasonable
income, long-term capital growth and conservation of capital.
Phoenix Convertible Fund Series seeks as its investment objectives income
and the potential for capital appreciation; these objectives are to be
considered relatively equal.
Phoenix Growth Fund Series seeks as its investment objective long-term
appreciation of capital. Since income is not an objective, any income generated
by the investment of this Series' assets will be incidental to its objective.
Phoenix High Yield Fund Series seeks as its investment objective high
current income. Capital growth is a secondary objective which will also be
considered when consistent with the primary objective of high current income.
Phoenix Money Market Fund Series seeks as its investment objective as high
a level of current income as is consistent with the preservation of capital and
the maintenance of liquidity.
Phoenix Aggressive Growth Fund Series seeks as its investment objective
appreciation of capital through the use of aggressive investment techniques.
Phoenix U.S. Government Securities Fund Series seeks as its investment
objective a high level of current income consistent with safety of principal.
WHAT IF MY FINANCIAL NEEDS CHANGE?
Just call us. At your request, the value of shares in any account can be
exchanged toward the purchase of shares of any other fund within the Series Fund
by using the Exchange Privilege.
HOW DOES THE EXCHANGE PRIVILEGE WORK?
Our Exchange Privilege offers the flexibility needed to assure the most
suitable portfolio throughout your lifetime. At any time you may redirect some
or all of your present holdings into another fund in the Series Fund which
better serves your needs. Just call us with the details. We'll process the
exchange free of charge. The toll-free number to call with your exchange request
is 800-367-5877. The exchange privilege may be modified or terminated, as noted
in the prospectus.
HOW DO I MAKE ADDITIONAL INVESTMENTS?
Send your check directly to State Street Bank and Trust Company, P.O. Box
8301, Boston, MA 02266-8301. Please include either the bottom section of your
confirmation statement or a simple letter of instruction.
CAN I MAKE AUTOMATIC MONTHLY INVESTMENTS?
You may authorize automatic monthly investments for as little as $25 to be
made directly from your personal checking account. An application is available
from the Series Fund.
CAN I ESTABLISH AN INDIVIDUAL RETIREMENT ACCOUNT (IRA) WITH PHOENIX SERIES
FUND?
Yes! The Phoenix Series Fund is an appropriate investment vehicle for
qualified retirement plans including IRAs, Keoghs, Pension and Profit Sharing
Plans.
HOW DO I ESTABLISH AN IRA?
Just call us. We'll send you our EASY IRA KIT which includes an IRA
application and other required documents.
HOW MUCH CAN I INVEST INTO AN IRA?
Individuals may invest up to $2,000 or 100% of earned income, whichever is
less. If you have an unemployed spouse, the maximum contribution could increase
to $2,250. Please refer to the Phoenix EASY IRA KIT for clarification.
WHAT ARE THE TAX ADVANTAGES OF ESTABLISHING AN IRA?
Individuals who meet the deductibility requirements may deduct their yearly
IRA contributions from their taxable income, and thus, pay less tax.
Additionally, the account's earnings still accumulate tax-free until you
withdraw your money at retirement.
WHO CAN ANSWER MY QUESTIONS?
Most questions can be answered by our Customer Service Department. We are
equipped with computer terminals which allow quick and easy access to
information on your account. In most cases, your questions can be answered by
calling us toll-free at 800-243-1574.
58
<PAGE>
PHOENIX SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
C. Duane Blinn
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
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
David R. Pepin, Executive Vice President
William J. Newman, Senior Vice President
Michael K. Arends, Vice President
Curtiss O. Barrows, Vice President
Mary E. Canning, Vice President
John M. Hamlin, Vice President
Van Harissis, Vice President
Christopher J. Kelleher, Vice President
William R. Moyer, Vice President
C. Edwin Riley, Jr., Vice President
Amy L. Robinson, Vice President
Leonard J. Saltiel, Vice President
Dorothy J. Skaret, Vice President
James D. Wehr, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, 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
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, CT 06083-2200
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Legal Counsel
Jorden, Burt, Berenson & Johnson LLP
Suite 400 East
1025 Thomas Jefferson Street, N.W.
Washington, D.C. 20007-0805
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
This report is not authorized for distribution to prospective investors in
the Phoenix Series Fund unless preceded or accompanied by an effective
Prospectus which includes information concerning the sales charge, Fund's record
and other pertinent information.
<PAGE>
Phoenix Series Fund [POSTAGE]
P.O. Box 2200 Bulk Rate Mail
Enfield, CT 06083-2200 U.S. Postage
PAID
Springfield, MA
Permit No. 444
[LOGOTYPE] PHOENIX
DUFF & PHELPS
[DALBAR LOGO]
PDP 394 (12/96)
<PAGE>
PHOENIX SERIES FUND
PART C--OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements.*
Condensed Financial Information and Financial Statements are included in
the Annual Report to Shareholders for the year ended October 31, 1996,
incorporated by reference in Part B of the Registration Statement.
(b) Exhibits
<TABLE>
<S> <C>
1.1 Agreement and Declaration of Trust, as amended, previously filed and filed herewith via EDGAR and
incorporated herein by reference.
1.2 Amendments dated May 25, 1994 and August 24, 1994 to Agreement and Declaration of Trust, as
amended, filed with Post-Effective Amendment No. 82 on March 1, 1995 and filed herewith via EDGAR
and incorporated herein by reference.
1.3 Amendment dated November 15, 1995 to Agreement and Declaration of Trust, as amended, filed via
EDGAR with Post-Effective Amendment No. 83 on February 28, 1996 and incorporated herein by
reference.
1.4 Amendment dated May 22, 1996 to Agreement and Declaration of Trust, as amended, filed herewith
via EDGAR.
4. Reference is made to Article IV of the Registrant's Declaration of Trust, as amended, and filed
with the Registration Statement referred to in Exhibit 1.1.
5. Investment Advisory Agreement between the Registrant and Phoenix Investment Counsel, Inc. dated
January 1, 1994 covering the Phoenix Balanced Fund Series, Phoenix Convertible Fund Series,
Phoenix Growth Fund Series, Phoenix High Yield Fund Series, Phoenix Money Market Fund Series,
Phoenix Stock Fund Series and Phoenix U.S. Government Securities Fund Series, filed with
Post-Effective Amendment No. 82 on March 1, 1995 and filed herewith via EDGAR and incorporated
herein by reference.
6.1 Distribution Agreement for Class A shares between the Registrant and Phoenix Equity Planning
Corporation, filed with Post-Effective Amendment No. 82 on March 1, 1995 and filed herewith via
EDGAR and incorporated herein by reference.
6.2 Distribution Agreement for Class B shares between the Registrant and Phoenix Equity Planning
Corporation, filed with Post-Effective Amendment No. 82 on March 1, 1995 and filed herewith via
EDGAR and incorporated herein by reference.
8.2 Amendment to Custodian Agreement between Registrant and State Street Bank and Trust Company dated
October 24, 1991, filed with Post-Effective Amendment No. 82 on March 1, 1995 and filed herewith
via EDGAR and incorporated herein by reference.
8.3 Amendment to Custodian Agreement between Registrant and State Street Bank and Trust Company dated
October 17, 1996, and filed herewith via EDGAR.
9.1 Transfer Agency and Service Agreement between Registrant and Phoenix Equity Planning Corporation
dated June 1, 1994, filed with Post-Effective Amendment No. 82 on March 1, 1995 and filed
herewith via EDGAR and incorporated herein by reference.
9.2 Financial Agent Agreement between Registrant and Phoenix Equity Planning Corporation dated May
25, 1994, filed with Post-Effective Amendment No. 82 on March 1, 1995 and filed herewith via
EDGAR and incorporated herein by reference.
9.3 Financial Agent Agreement between Registrant and Phoenix Equity Planning Corporation dated
December 11, 1996 and filed herewith via EDGAR.
9.4 First Amendment to Financial Agent Agreement between Registrant and Phoenix Equity Planning Corporation
dated February 26, 1997 and filed herewith via EDGAR.
10 Opinion of Counsel as to legality of the shares, filed with Post-Effective Amendment No. 82 on
March 1, 1995, and filed herewith via EDGAR and incorporated by reference.
11 Written Consent of Price Waterhouse filed herewith.
15.1 Class A Shares Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940,
filed with Post-Effective Amendment No. 82 on March 1, 1995, and filed herewith via EDGAR and
incorporated herein by reference.
C-1
<PAGE>
15.2 Class B Shares Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940,
filed with Post-Effective Amendment No. 82 on March 1, 1995, and filed herewith via EDGAR and
incorporated herein by reference.
16 Schedule for Computation of Performance Quotations filed with Post-Effective Amendment No. 82 on
March 1, 1995 and filed herewith via EDGAR and incorporated herein by reference
18.1 Rule 18f-3 Dual Distribution Plan effective March 15, 1996, filed via EDGAR with Post-Effective
Amendment No. 83 on February 28, 1996 and incorporated herein by reference.
18.2 Rule 18f-3 Dual Distribution Plan effective November 1, 1995, filed herewith via EDGAR.
18.3 Rule 18f-3 Dual Distribution Plan effective November 1, 1996, filed herewith via EDGAR.
19. Powers of Attorney, filed herewith.
27. Financial Data Schedule filed herewith and reflected on EDGAR as Exhibit 27.
</TABLE>
Item 25. Persons Controlled By or Under Common Control With Registrant
None.
Item 26. Number of Holders of Securities
<TABLE>
<CAPTION>
Number of Shareholder Accounts
Title of Class as of December 31, 1996
- -------------------------------------------------- -------------------------------
<S> <C>
Phoenix Balanced Fund Series
Class A shares/Class B shares 121,570/2,375
Phoenix Convertible Fund Series
Class A shares/Class B shares 10,998/366
Phoenix Growth Fund Series
Class A shares/Class B shares 159,618/4,862
Phoenix High Yield Fund Series
Class A shares/Class B shares 33,047/1,059
Phoenix Money Market Fund Series
Class A shares/Class B shares 13,175/794
Phoenix Aggressive Growth Fund Series
Class A shares/Class B shares 13,573/1,495
Phoenix U.S. Government Securities Fund Series
Class A shares/Class B shares 14,295/312
</TABLE>
Item 27. Indemnification
Incorporated herein by reference is Post-Effective Amendment No. 53 to
Registrant's Registration Statement (No. 2-14069) under the Securities Act of
1933.
Item 28. Business and Other Connections of Investment Adviser
The Trust's investment adviser is Phoenix Investment Counsel, Inc. (the
"Adviser"), which is located at 56 Prospect Street, Hartford, Connecticut
06115-0480. The Adviser also serves as the investment adviser to other
investment companies: The Phoenix Edge Series Fund (all Series other than the
Real Estate Securities Series), Phoenix Multi-Portfolio Fund (all portfolio
other than the Real Estate Securities Portfolio), Phoenix Strategic Equity
Series Fund (Strategic Theme Fund and Small Cap Fund), and Phoenix Strategic
Allocation Fund, Inc.; and as subadviser to Chubb America Fund, Inc., JNL
Series Trust, and SunAmerica Series Trust. These investment companies have
investment objectives similar to those of one or more Series of the Trust.
Set forth below is a list of each executive officer and director of Phoenix
Investment Counsel, Inc., indicating each business, profession, vocation, or
employment of a substantial nature in which each person has been engaged at
any time during the past two fiscal years, for his own account or in the
capacity of director, officer, partner, or trustee.
C-2
<PAGE>
<TABLE>
<CAPTION>
Name and Position with
Phoenix Investment Counsel, Inc. Other Business, Profession, Vocation, or Employment
- --------------------------------------- ------------------------------------------------------------------
<S> <C>
Michael E. Haylon Executive Vice President--Investments, Phoenix Duff & Phelps
Director and President Corporation. Director and President, National Securities &
Research Corporation. Director, Phoenix Equity Planning
Corporation. Executive Vice President, Phoenix Funds and
Phoenix-Aberdeen Series Fund. Vice President, Phoenix Duff &
Phelps Institutional Mutual Funds. Senior Vice President,
Securities Investments, Phoenix Home Life Mutual Insurance
Company.
Philip R. McLoughlin Director, Vice Chairman and Chief Executive Officer, Phoenix Duff
Director and Chairman & Phelps Corporation. Director and Executive Vice President,
Investments, Phoenix Home Life Mutual Insurance Company. Director
and Chairman, National Securities & Research Corporation. Director
and President, Phoenix Equity Planning Corporation.
Director/Trustee and President, Phoenix Funds. Trustee and
President, Phoenix Duff & Phelps Institutional Mutual Funds and
Phoenix-Aberdeen Series Fund. Director and Executive Vice
President, Phoenix Life and Annuity Company and PHL Variable
Insurance Company. Director, Phoenix Realty Group, Inc., Phoenix
Realty Advisors, Inc., Phoenix Realty Investors, Inc., Phoenix
Realty Securities, Inc., Phoenix Founders, Inc. and World Trust
Fund. Trustee, Duff & Phelps Utilities Tax-Free Income Inc. and
Duff & Phelps Utility and Corporate Bond Trust Inc. Director and
Vice President, PM Holdings, Inc. Director, W.S. Griffith & Co.,
Inc., Phoenix Charter Oak Trust Company and Worldwide Phoenix
Offshore, Inc.
David R. Pepin Executive Vice President and Director, Phoenix Duff & Phelps
Director Corporation. Director, National Securities & Research Corporation.
Managing Director, Phoenix-Aberdeen International Advisors, LLC.
Director and Executive Vice President, Mutual Fund Sales and
Operations, Phoenix Equity Planning Corporation. Executive Vice
President, Phoenix Funds, Phoenix Duff & Phelps Institutional
Mutual Funds and Phoenix-Aberdeen Series Fund. Vice President,
Phoenix Home Life Mutual Insurance Company.
William J. Newman Executive Vice President and Chief Investment Strategist, National
Executive Vice President Securities & Research Corporation. Senior Vice President, The
and Chief Investment Strategist Phoenix Edge Series Fund, Phoenix Income and Growth Fund, Phoenix
Multi-Portfolio Fund, Phoenix Series Fund, Phoenix Strategic
Allocation Fund, Inc., Phoenix Strategic Equity Series Fund,
Phoenix Worldwide Opportunities Fund, Phoenix-Aberdeen Series
Fund, Phoenix Duff & Phelps Institutional Mutual Funds. Vice
President, Common Stock and Chief Investment Strategist, Phoenix
Home Life Mutual Insurance Company.
Paul A. Atkins Senior Vice President and Sales Manager, Phoenix Equity Planning
Senior Vice President Corporation. Vice President, Pension Phoenix Home Life Mutual
and Sales Manager Insurance Company.
C-3
<PAGE>
Name and Position with
Phoenix Investment Counsel, Inc. Other Business, Profession, Vocation, or Employment
- --------------------------------------- ------------------------------------------------------------------
William R. Moyer Senior Vice President and ChiefFinancial Officer, Phoenix Duff &
Senior Vice President, Phelps Corporation. Senior Vice President, Chief Financial Officer
Chief Financial Officer and Treasurer, National Securities & Research Corporation. Senior
and Treasurer Vice President and Chief Financial Officer, Phoenix Equity
Planning Corporation. Vice President, Phoenix Funds, Phoenix Duff
& Phelps Institutional Mutual Funds, and Phoenix-Aberdeen Series
Fund. Senior Vice President, Chief Financial Officer and
Treasurer, W.S. Griffith and Co., Inc. Vice President, Investment
Products Finance, Phoenix Home Life Mutual Insurance Company.
Rosemary T. Strekel Senior Vice President and Managing Director, Private Placements,
Senior Vice President National Securities & Research Corporation. Vice President,
and Managing Director Phoenix Home Life Mutual Insurance Company.
Private Placements
Eugene A. Charon Vice President and Controller, National Securities & Research
Vice President and Corporation and Phoenix Equity Planning Corporation.
Controller
Thomas N. Steenburg Vice President, Counsel and Secretary, Phoenix Duff & Phelps
Vice President, Counsel Corporation, National Securities & Research Corporation and
and Secretary Phoenix Equity Planning Corporation.
James K. Salonia Director, Client Services, Phoenix Home Life Mutual Insurance
Assistant Vice Company. Product Manager, Aetna Capital Management, Inc.
President, Client
Services
David L. Albrycht Managing Director, Fixed Income, National Securities & Research
Managing Director, Corporation. Vice President, Phoenix Multi- Portfolio Fund,
Fixed Income Phoenix Multi-Sector Fixed Income Fund and Phoenix Multi-Sector
Short Term Bond Fund. Portfolio Manager, Phoenix Home Life Mutual
Insurance Company.
Michael K. Arends Managing Director, Equities, National Securities & Research
Managing Director Corporation. Vice President, Phoenix Series Fund and Phoenix
Equities Strategic Equity Series Fund. Portfolio Manager, Phoenix Home Life
Mutual Insurance Company.
Curtiss O. Barrows Managing Director, Fixed Income, National Securities & Research
Managing Director, Corporation. Vice President, Phoenix Series Fund, Phoenix
Fixed Income Multi-Portfolio Fund and The Phoenix Edge Series Fund. Portfolio
Manager, Public Bonds, Phoenix Home Life Mutual Insurance Company.
Sandra L. Becker Managing Director, Private Placements, National Securities &
Managing Director, Research Corporation. Managing Director, Venture Capital and
Private Placements Private Placements, Phoenix Home Life Mutual Insurance Company.
David Byerly Managing Director, Fixed Income, National Securities & Research
Managing Director, Corporation.
Fixed Income
C-4
<PAGE>
Name and Position with
Phoenix Investment Counsel, Inc. Other Business, Profession, Vocation, or Employment
- --------------------------------------- ------------------------------------------------------------------
Mary E. Canning Managing Director and Investment Strategist, Equities, National
Managing Director and Securities & Research Corporation. Vice President, Phoenix Series
Investment Strategist Fund, The Phoenix Edge Series Fund and Phoenix Strategic
Equities Allocation Fund, Inc. Associate Portfolio Manager, Common Stock,
Phoenix Home Life Mutual Insurance Company.
Paul M. Chute Managing Director, Private Placements, National Securities &
Managing Director, Research Corporation. Managing Director, Investment Department,
Private Placements Phoenix Home Life Mutual Insurance Company.
Nelson Correa Managing Director, Private Placements, National Securities &
Managing Director, Research Corporation. Managing Director, Private Placements,
Private Placements Phoenix Home Life Mutual Insurance Company.
Jeanne H. Dorey Managing Director, Equities, National Securities & Research
Managing Director, Corporation. Vice President, The Phoenix Edge Series Fund, Phoenix
Equities Multi-Portfolio Fund and Phoenix Worldwide Opportunities Fund.
Portfolio Manager, International, Phoenix Home Life Mutual
Insurance Company.
Van Harissis Managing Director, Equities, National Securities & Research
Managing Director Corporation. Vice President, Phoenix Series Fund and The Phoenix
Equities Edge Series Fund. Senior Portfolio Manager, Howe & Rusling, Inc.
Richard C. Harland Managing Director, Equities, National Securities & Research
Managing Director Corporation. Portfolio Manager, Phoenix Home Life Mutual Insurance
Equities Company. Senior Institutional Portfolio Manager, Managing
Director, J & W Seligman & Co.
Christopher J. Kelleher Managing Director, Fixed Income, National Securities &
Managing Director, ResearchCorporation. Vice President, Phoenix Series Fund, The
Fixed Income Phoenix Edge Series Fund and Phoenix Duff & Phelps Institutional
Mutual Funds. Portfolio Manager, Public Bonds, Phoenix Home Life
Mutual Insurance Company.
Thomas S. Melvin, Jr. Managing Director, Equities, National Securities & Research
Managing Director, Corporation. Vice President, Phoenix Multi- Portfolio Fund and
Equities Phoenix Duff & Phelps Institutional Mutual Funds. Portfolio
Manager, Common Stock, Phoenix Home Life Mutual Insurance Company.
C. Edwin Riley, Jr. Managing Director, Equities, National Securities & Research
Managing Director, Corporation. Vice President, Phoenix Series Fund, The Phoenix Edge
Equities Series Fund and Phoenix Strategic Allocation Fund, Inc. Director
of Equity Management, NationsBanc.
Amy L. Robinson Managing Director, Equity Trading, National Securities & Research
Managing Director, Corporation. Vice President, The Phoenix Edge Series Fund and
Equity Trading Phoenix Series Fund. Managing Director, Securities Administration,
Phoenix Home Life Mutual Insurance Company.
C-5
<PAGE>
Name and Position with
Phoenix Investment Counsel, Inc. Other Business, Profession, Vocation, or Employment
- --------------------------------------- ------------------------------------------------------------------
James D. Wehr Managing Director, Fixed Income, National Securities & Research
Managing Director, Corporation. Vice President, The Phoenix Edge Series Fund, Phoenix
Fixed Income Series Fund, Phoenix Multi- Portfolio Fund, Phoenix California
Tax-Exempt Bonds, Inc. and Phoenix Duff & Phelps Institutional
Mutual Funds. Managing Director, Public Fixed Income, Phoenix Home
Life Mutual Insurance Company.
Matthew Considine Director, Equity Research, National Securities & Research
Director, Equity Corporation. Vice President, Phoenix Multi- Portfolio Fund.
Research
Timothy M. Heaney Director, Fixed Income Research, National Securities & Research
Director, Fixed Income Corporation. Vice President, Phoenix Multi- Portfolio Fund and
Research Phoenix California Tax Exempt Bonds, Inc.
Peter S. Lannigan Director, Fixed Income Research, National Securities & Research
Director, Fixed Income Corporation. Vice President, Phoenix Multi- Portfolio Fund
Research
Dorothy J. Skaret Director, Money Market Trading, National Securities & Research
Director, Money Corporation. Vice President, Phoenix Series Fund, The Phoenix Edge
Market Trading Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds,
Phoenix-Aberdeen Series Fund and Phoenix Realty Securities, Inc.
Director, Public Fixed Income, Phoenix Home Life Mutual Insurance
Company.
George I. Askew Portfolio Manager, Equities, National Securities & Research
Portfolio Manager, Corporation.
Equities
John M. Hamlin Portfolio Manager, Equities, National Securities & Research
Portfolio Manager, Corporation. Vice President, Phoenix Income and Growth Fund and
Equities Phoenix Series Fund. Portfolio Manager, Common Stock, Phoenix Home
Life Mutual Insurance Company.
David Lui Portfolio Manager, Equities, National Securities & Research
Portfolio Manager, Corporation. Vice President, Phoenix Worldwide Opportunities Fund,
Equities Phoenix Multi-Portfolio Fund and The Phoenix Edge Series Fund.
Associate Portfolio Manager, International Portfolios, Phoenix
Home Life Mutual Insurance Company. Vice President, Asian
Equities, Alliance Capital Management.
G. Jeffrey Bohne Vice President, Mutual Fund Customer Service, Phoenix Equity
Clerk Planning Corporation. National Securities & Research Corporation.
Secretary/Clerk, Phoenix Funds, Phoenix Duff & Phelps
Institutional Mutual Funds and Phoenix-Aberdeen Series Fund. Vice
President and General Manager, Phoenix Home Life Mutual Insurance
Company.
</TABLE>
The respective principal addresses of the companies or other entities named
above are as follows:
<TABLE>
<S> <C>
Aetna Capital Management, Inc. 151 Farmingtion Avenue
Hartford, CT 06156
Alliance Capital Management 1345 Avenue of the Americas
New York, NY 10105
C-6
<PAGE>
Duff & Phelps Utilities Tax-Free Income Inc. 55 East Monroe Street
Chicago, IL 60603
Duff & Phelps Utility and Corporate Bond Trust Inc. 55 East Monroe Street
Chicago, IL 60603
Howe & Rusling, Inc. 120 East Avenue
Rochester, NY 14604
J & W Seligman & Co. 100 Park Avenue
New York, NY 10017
National Securities & Research Corporation One American Row
Hartford, CT 06115
NationsBanc One NationsBanc Plaza
Charlotte, NC 28255
PHL Variable Insurance Company One American Row
Hartford, CT 06115
Phoenix-Aberdeen Series Fund 101 Munson Street
Greenfield, MA 01301
Phoenix Charter Oak Trust Company One American Row
Hartford, CT 06102-5056
Phoenix Duff & Phelps Corporation 56 Prospect Street
Hartford, CT 06115
Phoenix Duff & Phelps Institutional Mutual Funds 101 Munson Street
Greenfield, MA 01301
Phoenix Equity Planning Corporation 100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, CT 06083-2200
Phoenix Founders, Inc. 38 Prospect Street
Hartford, CT 06115-0479
Phoenix Home Life Mutual Insurance Company One American Row
Hartford, CT 06115
Phoenix Life and Annuity Company One American Row
Hartford, CT 06102-5056
Phoenix Realty Advisors, Inc. One American Row
Hartford, CT 06115
Phoenix Realty Group, Inc. One American Row
Hartford, CT 06115
Phoenix Realty Investors, Inc. One American Row
Hartford, CT 06115
Phoenix Realty Securities, Inc. One American Row
Hartford, CT 06115
PM Holdings, Inc. One American Row
Hartford, CT 06115
The Phoenix Funds 101 Munson Street
Greenfield, MA 01301
W.S. Griffith & Co., Inc. 100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, CT 06083-2200
C-7
<PAGE>
Worldwide Phoenix Offshore, Inc. One American Row
Hartford, CT 06115
World Trust Fund KREDIETRUST
Societe Anonyme
11, rue Aldringen
-2690 Luxembourg
R.C. Luxembourg B 10.750
</TABLE>
Item 29. Principal Underwriters
(a) Phoenix Equity Planning Corporation ("Equity Planning"), which is
located at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut
06083-2200, serves as the principal underwriter of the Trust's shares. Equity
Planning also acts as principal underwriter for the Phoenix Funds and for the
variable contracts issued by the Phoenix Home Life Variable Accumulation
Account and Phoenix Home Life Variable Universal Life Account.
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ----------------------------- --------------------------- ---------------------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and President Trustee and President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
David R. Pepin Executive Vice President, Executive Vice President
56 Prospect St. Mutual Fund Sales and
P.O. Box 150480 Operations
Hartford, CT 06115-0480
Leonard J. Saltiel Managing Director, Vice President
100 Bright Meadow Blvd. Operations and Service
P.O. Box 1900
Enfield, CT 06083-1900
Paul A. Atkins Senior Vice President and None
56 Prospect St. Sales Manager
P.O. Box 150480
Hartford, CT 06115-0480
Maris L. Lambergs Senior Vice President, None
100 Bright Meadow Blvd. Insurance and Independent
P.O. Box 1900 Division
Enfield, CT 06083-1900
William R. Moyer Senior Vice President and Vice President
100 Bright Meadow Blvd. Chief Financial Officer
P.O. Box 1900
Enfield, CT 06083-1900
John F. Sharry Managing Director, Mutual None
100 right Meadow Blvd. Fund Distribution
P.O. Box 1900
Enfield, CT 06083-1900
G. Jeffrey Bohne Vice President, Mutual Fund Secretary
101 Munson Street Customer Service
P.O. Box 810
Greenfield, MA 01302-0810
C-8
<PAGE>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ----------------------------- --------------------------- ---------------------------
Eugene A. Charon Vice President and None
100 Bright Meadow Blvd. Controller
P.O. Box 1900
Enfield, CT 06083-1900
Nancy G. Curtiss Vice President and Treasurer
56 Prospect St. Treasurer, Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
William E. Keen III Assistant Vice President, Vice President
100 Bright Meadow Blvd. Mutual Fund Regulation
P.O. Box 1900
Enfield, CT 06083-1900
Elizabeth R. Sadowinski Vice President, None
56 Prospect St. Administration
P.O. Box 150480
Hartford, CT 06115-0480
Thomas N. Steenburg Vice President, Counsel and Assistant Secretary
56 Prospect St. Secretary
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
(c) Equity Planning received the following commissions or other compensation
from the Registrant during the fiscal year ending October 31, 1996:
Net Underwriting Compensation on
Name of Principal Discounts and Redemption and Brokerage
Underwriter Commissions Repurchase Commissions Other
----------------- ---------------- --------------- -------------- ------------
Equity Planning $691,327 $221,156 $0 $1,789,755
Item 30. Location of Accounts and Records
Incorporated herein by reference is Post-Effective Amendment No. 63 to
Registrant's Registration Statement (No. 2-14069) under the Securities Act of
1933.
Item 31. Management Services
All management-related service contracts are discussed in Part A or B of
this Registration Statement.
Item 32. Undertakings
(a) The information called for by Item 5A of Form N-1A is contained in the
Fund's annual report to shareholders; accordingly, the Fund hereby
undertakes to furnish each person to whom a prospectus is delivered with
a copy of the Fund's latest annual report, upon request and without
charge.
(b) Registrant undertakes to call a special meeting of shareholders for the
purpose of voting upon the question of removal of a trustee or trustees
and to assist in communications with other shareholders, as required by
Section 16(c) of the 1940 Act, if requested to do so by holders of at
least 10% of a Series' outstanding shares.
C-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
requirements for effectiveness of this Amendment to its Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Hartford
and the State of Connecticut on the 26th day of February, 1997.
PHOENIX SERIES FUND
ATTEST: /s/ Thomas N. Steenberg BY: /s/ Philip R. McLoughlin
Thomas N. Steenberg Philip R. McLoughlin
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons
in the capacities indicated, on this 26th day of February, 1997.
Signature Title
--------- -----
----------------------------- Trustee
C. Duane Blinn*
----------------------------- Trustee
Robert Chesek*
----------------------------- Trustee
E. Virgil Conway*
----------------------------- Treasurer (Principal
Nancy G. Curtiss* Financial and
Accounting Officer)
----------------------------- Trustee
Harry Dalzell-Payne*
----------------------------- Trustee
Francis E. Jeffries*
----------------------------- Trustee
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin Trustee and President
---------------------------- (Principal Executive Officer)
Philip R. McLoughlin
----------------------------- Trustee
Everett L. Morris*
----------------------------- Trustee
James M. Oates*
----------------------------- Trustee
Calvin J. Pedersen*
----------------------------- Trustee
Philip R. Reynolds*
----------------------------- Trustee
Herbert Roth, Jr.*
----------------------------- Trustee
Richard E. Segerson*
----------------------------- Trustee
Lowell P. Weicker, Jr.*
By /s/ Philip R. McLoughlin
---------------------------
*Philip R. McLoughlin Attorney-in-fact pursuant to powers of attorney filed
herewith.
C-10
Exhibit 1.1
Agreement and Declaration of Trust, as amended
<PAGE>
PHOENIX SERIES FUND
Amendment to Declaration of Trust
We, the undersigned, being a majority of the members of the Board of
Trustees of the Phoenix Series Fund, a Massachusetts business trust organized
under a Declaration of Trust dated April 7, 1958, as amended July 28, 1980,
February 25, 1982, October 12, 1982, February 25, 1987 and October 31, 1987, and
acting pursuant to ARTICLE VII, Section 7.3 of said Declaration of Trust, hereby
further amend said Declaration of Trust, effective October 4, 1990 by
(1) deleting the following from Section 5.2 of ARTICLE V:
There shall be an annual meeting of Shareholders on the fourth
Thursday in March at the office of the Trust in Boston, Massachusetts,
or at such other place as may be designated in the call thereof, which
call shall be made by the Trustees. In the event that such meeting is
not held in any year on the date fixed herein, whether the omission be
by oversight or otherwise, a subsequent special meeting may be called
by the Trustees and held in lieu of the annual meeting with the same
effect as though held on such date.
and
(2) inserting the following in lieu thereof:
There shall be such meetings of Shareholders of the Trust as may be
required by the Investment Company Act of 1940 or as may be called by
the Trustees, at the office of the Trust in Greenfield, Massachusetts
or at such other place as may be designated in the call thereof, which
call shall be made by the Trustees. In the event that any such meeting
is not held on the date fixed in the notice thereof, whether the
omission be by oversight or otherwise, a subsequent meeting may be
called by the Trustees and held in lieu of the original meeting with
the same effect as though held on such date.
<PAGE>
WITNESS our hands this 28th day of November, 1990.
/s/ C. Duane Blinn /s/ Philip R. McLoughlin
- -------------------------------- -----------------------------------
C. DUANE BLINN PHILIP R. McLOUGHLIN
/s/ Robert Chesek /s/ James M. Oates
- -------------------------------- -----------------------------------
ROBERT CHESEK JAMES M. OATES
/s/ James R. Dempsey /s/ Philip R. Reynolds
- -------------------------------- -----------------------------------
JAMES R. DEMPSEY PHILIP R. REYNOLDS
/s/ Leroy Keith, Jr. /s/ Herbert Roth, Jr.
- -------------------------------- -----------------------------------
LEROY KEITH, JR. HERBERT ROTH, JR.
/s/ Richard Scheuch
-----------------------------------
RICHARD SCHEUCH
-2-
<PAGE>
PHOENIX SERIES FUND
Amendment to Declaration of Trust
We, the undersigned, being a majority of the members of the Board of
Trustees of the Phoenix Series Fund, a Massachusetts business trust organized
under a Declaration of Trust dated April 7, 1958, as amended July 28, 1980,
February 25, 1982, October 12, 1982 and February 25, 1987, acting pursuant to
Section 3.3 of ARTICLE III and Section 7.3 of ARTICLE VII of said Declaration
of Trust, hereby further amend said Declaration of Trust, effective
October 31, 1987, by
(1) deleting the language set forth in subsections (a), (d), (f) and (g)
of Section 2.2 of Article II by inserting in lieu thereof the following powers
of the Trustees:
"(a) Investments. To invest and reinvest cash and other assets of the
Trust, and to hold cash or other assets of the Trust uninvested,
without in any event being bound or limited by any present or future
law or custom in regard to investments by trustees;"
"(d) Subscription. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities,
debt instruments or other property;"
"(f) Reorganization, etc. To consent to or participate in any plan for
the reorganization, consolidation or merger of any corporation or
issuer, any security, debt instrument or other
<PAGE>
-2-
property of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security or debt instrument or other property held in the
Trust;"
"(g) Voting Trusts, etc. To join with other holders of any securities,
debt instruments or other property in acting through a committee,
depositary, voting trustees or otherwise, and in that connection to
deposit any security, debt instrument or other property with, or
transfer any security, debt instrument or other property to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security, debt instrument or other
property (whether or not so deposited or transferred) as the Trustees
shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or trustee as
the Trustees shall deem proper;"
(2) deleting the investment restriction set forth in subsection (h) of
Section 3.1 of ARTICLE III and by inserting in lieu thereof the following
investment restriction:
"(h) Make investments in real estate or commodities or commodity
contracts, although (i) the Trust may purchase securities which are
secured by interests in real estate, specifically, securities issued by
real estate investment trusts, and (ii) any Series of the Trust
(excluding the Phoenix Money Market Fund Series and the Phoenix U.S.
Government Securities Fund Series) may engage in
<PAGE>
-3-
transactions in financial futures and related options, provided that
the sum of the initial margin deposits on such Series' existing futures
positions and the premiums paid for related options would not exceed
in the aggregate 2% of such Series' total assets."
(3) deleting the investment restriction set forth in subsection (j) of
Section 3.1 of ARTICLE III and by inserting in lieu thereof the following
investment restriction:
"(j) Invest in puts, calls, straddles, and any combination thereof
except that any Series of the Trust (excluding the Phoenix Money
Market Fund Series and the Phoenix U.S. Government Securities Fund
Series) may (i) write (sell) exchange-traded covered call options
on portfolio securities and on securities indices and engage in
related closing purchase transactions and (ii) invest up to 2% of its
total assets in exchange-traded call and put options on securities
and securities indices."
WITNESS our hands this 31st day of October, 1987.
/s/ C. Duane Blinn
- -------------------------------- ------------------------------------
C. Duane Blinn James M. Oates
/s/ Robert Chesek /s/ Philip R. Reynolds
- -------------------------------- -------------------------------------
Robert Chesek Philip R. Reynolds
/s/ James R. Dempsey /s/ Herbert Roth, Jr.
- ------------------------------- -------------------------------------
James R. Dempsey Herbert Roth, Jr.
/s/ Leroy Keith, Jr.
- ------------------------------- -------------------------------------
Leroy Keith, Jr. Richard Scheuch
<PAGE>
PHOENIX SERIES FUND
Amendment to Declaration of Trust
We, the undersigned, being a majority of the members of the Board of
Trustees of the Phoenix Series Fund, a Massachusetts business trust organized
under a Declaration of Trust dated April 7, 1958, as amended July 28, 1980,
February 25, 1982 and October 12, 1982, pursuant to Section 7.3 of ARTICLE VII
of said Declaration of Trust for the purpose of establishing and designating
a new Series of Shares denominated the Phoenix U.S. Government Securities Fund
Series, hereby further amend said Declaration of Trust, effective February 25,
1987, by deleting the first paragraph of Section 4.2 of ARTICLE IV thereof and
by inserting in lieu of such paragraph the following paragraph:
"Without limiting the authority of the Trustees set forth in Section
4.1 to establish and designate any further Series, the following eight
Series are hereby established and designated: "Phoenix Balanced Fund
Series", "Phoenix Convertible Fund Series", "Phoenix Growth Fund
Series", "Phoenix High Quality Bond Fund Series", "Phoenix High Yield
Fund Series", "Phoenix Money Market Fund Series", "Phoenix Stock Fund
Series", and "Phoenix U.S. Government Securities Fund Series". All
shares of beneficial interest in the Trust outstanding on July 28,
1980 shall be classified as Shares of the Phoenix Growth Fund Series
and all assets, including all income, earnings, profits, and proceeds
thereof, and all liabilities of the Trust as of such date shall be
considered assets and liabilities of the Phoenix Growth Fund Series."
<PAGE>
-2-
WITNESS our hands this twenty-fifth day of February, 1987.
/s/ Philip R. Reynolds
- ------------------------------- ------------------------------------
C. Duane Blinn Philip R. Reynolds
/s/ Robert Chesek /s/ Herbert Roth, Jr.
- ------------------------------- ------------------------------------
Robert Chesek Herbert Roth, Jr.
/s/ James R. Dempsey /s/ Richard Scheuch
- ------------------------------- ------------------------------------
James R. Dempsey Richard Scheuch
/s/ Leroy Keith, Jr.
- -------------------------------
Leroy Keith, Jr.
<PAGE>
PHOENIX-CHASE SERIES FUND
AMENDMENT TO DECLARATION OF TRUST
We, the undersigned, being a majority of the members of the Board of
Trustees of Phoenix-Chase Series Fund, a Massachusetts business trust organized
under a Declaration of Trust dated April 7, 1958, as amended July 28, 1980 and
February 25, 1982, pursuant to Section 7.3 of ARTICLE VII of said Declaration
of Trust for the purposes of (a) changing the name of the Trust from "Phoenix-
Chase Series Fund" to "Phoenix Series Fund"; (b) changing the names of the
series established and designated under the Declaration of Trust to reflect the
change in the name of the Trust; (c) establishing and designating a new Series
of Shares denominated the Phoenix High Quality Bond Fund Series; and (d)
changing the reference to Phoenix Investment Counsel of Boston, Inc. to Phoenix
Investment Counsel, Inc. to reflect its recent name change, hereby further amend
said Declaration of Trust, effective October 12, 1982, as follows:
1. by deleting in Section 1.1 of ARTICLE I the words Phoenix-Chase
Series Fund, and inserting in lieu thereof the words Phoenix Series
Fund;
2. by deleting the first paragraph of Section 4.2 of ARTICLE IV
thereof and by inserting in lieu of such paragraph the following
paragraph: "Without limiting the authority of the Trustees set
forth in Section 4.1 to establish and designate any further
Series, the following seven Series are hereby established and
designated: "Phoenix Balanced Fund Series", "Phoenix Convertible
Fund Series", "Phoenix Growth Fund Series", "Phoenix High Quality
Bond Fund Series", "Phoenix High Yield Fund Series", "Phoenix
Money Market Fund Series",
<PAGE>
-2-
and "Phoenix Stock Fund Series". All shares of beneficial interest
in the Trust outstanding on July 28, 1980 shall be classified as
Shares of the Phoenix Growth Fund Series and all assets, including
all income, earnings, profits, and proceeds thereof, and all
liabilities of the Trust as of such date shall be considered assets
and liabilities of the Phoenix Growth Fund Series."
3. by deleting in the paragraph following Section 4.2(i) of ARTICLE IV
the words Phoenix-Chase and inserting in lieu thereof the word
Phoenix; and
4. by deleting in Section 7.4 of ARTICLE VII the words Phoenix
Investment Counsel of Boston, Inc. and inserting in lieu thereof
the words Phoenix Investment Counsel, Inc.
WITNESS our hands this twelfth day of October, 1982.
/s/ Ashby Bladen /s/ Oliver F. Johnson
- ------------------------------- ------------------------------------
Ashby Bladen Oliver F. Johnson
/s/ C. Duane Blinn /s/ Leroy Keith, Jr.
- ------------------------------- ------------------------------------
C. Duane Blinn Leroy Keith, Jr.
/s/ John P. Chase /s/ John Lintner
- ------------------------------- ------------------------------------
John P. Chase John Lintner
/s/ Robert Chesek /s/ Herbert Roth, Jr.
- ------------------------------- ------------------------------------
Robert Chesek Herbert Roth, Jr.
/s/ James R. Dempsey /s/ Richard Scheuch
- ------------------------------- ------------------------------------
James R. Dempsey Richard Scheuch
<PAGE>
PHOENIX-CHASE SERIES FUND
Amendment to Declaration of Trust
We, the undersigned, being at least a majority of the members of the
Board of Trustees of the Phoenix-Chase Series Fund, a Massachusetts Business
Trust organized under a Declaration of Trust dated April 7, 1958, as amended
July 28, 1980, pursuant to Section 7.3 of ARTICLE VII of said Declaration of
Trust for the purpose of establishing and designating a new Series of Shares
denominated the Phoenix-Chase Convertible Fund Series, hereby further amend
said Declaration of Trust, effective February 25, 1982, by deleting the first
paragraph of Section 4.2 of ARTICLE IV thereof and by inserting in lieu of such
paragraph the following paragraph:
"Without limiting the authority of the Trustees set forth in Section 4.1
to establish and designate any further Series, the following six Series are
hereby established and designated: "Phoenix-Chase Growth Fund Series",
"Phoenix-Chase Stock Fund Series", "Phoenix-Chase Balanced Fund Series",
"Phoenix-Chase Money Market Fund Series", "Phoenix-Chase High Yield Fund
Series", and "Phoenix-Chase Convertible Fund Series". All Shares of beneficial
interest in the Trust outstanding on July 28, 1980 shall be classified as
Shares of the Phoenix-Chase Growth Fund Series and all assets, including all
income, earnings, profits, and proceeds thereof, and all liabilities of the
Trust as of such date shall be considered assets and liabilities of the Phoenix-
Chase Growth Fund Series."
<PAGE>
-2-
WITNESS our hand this 12th day of March, 1982
/s/ Oliver F. Johnson
- ------------------------------- ------------------------------------
Ashby Bladen Oliver F. Johnson
/s/ C. Duane Blinn
- ------------------------------- ------------------------------------
C. Duane Blinn Leroy Keith, Jr.
/s/ John P. Chase /s/ John Lintner
- ------------------------------- ------------------------------------
John P. Chase John Lintner
/s/ Robert Chesek
- ------------------------------- ------------------------------------
Robert Chesek Herbert Roth, Jr.
/s/ Richard Scheuch
- ------------------------------- ------------------------------------
James R. Dempsey Richard Scheuch
<PAGE>
THE CHASE FUND OF BOSTON
AMENDMENT TO DECLARATION OF TRUST
AND CERTIFICATE OF TRUSTEES IN REGARD THERETO
We, the undersigned, being a majority of the members of the Board of
Trustees of The Chase Fund of Boston (the Fund), do hereby certify
(1) that the Fund was organized as a Massachusetts Trust under a
Declaration of Trust dated April 7, 1958;
(2) that Section 2 of ARTICLE XIV of said Declaration of Trust contains the
following provisions:
"At any time when any share of the Fund is outstanding the Trustees may
amend this Declaration of Trust with the consent of holders of a majority of
the outstanding shares, expressed in writing or by vote at a meeting. An
instrument setting forth any amendment together with a certificate signed by
a majority of the Trustees reciting that such amendment has been duly adopted
by the Trustees and that the consent of the holders of a majority of the
outstanding shares has been received shall be deposited with the Custodian, and
shall be conclusive evidence of such amendment.";
(3) that on December 20, 1979 all members of the Board of Trustees of the
Fund adopted an amendment to the Declaration of Trust, as theretofore amended,
for the purposes of recapitalizing the Fund as a series fund under the name
Phoenix-Chase Series Fund and changing certain investment and other policies;
(4) that, by vote at an adjourned session of the June 26, 1980 Special
Meeting in lieu of the Annual Meeting of Shareholders of the Fund duly held on
July 10, 1980, the holders of a majority of the outstanding shares of the Fund
consented to such amendment and authorized the President of the Fund to declare
such amendment effective on such date not later than August 15, 1980 as the
President in his discretion might determine;
(5) that, by a writing dated July 17, 1980, the President of the Fund
declared such amendment effective July 28, 1980; and
(6) that the amendment to the Declaration of Trust duly approved by the
Board of Trustees of the Fund, consented to by the holders of a majority of the
outstanding shares of the Fund and declared effective by the President of the
Fund is reflected in the instrument annexed hereto entitled
PHOENIX-CHASE SERIES FUND
EXISTING PROVISIONS
OF
DECLARATION OF TRUST, AS AMENDED
July 28, 1980
WITNESS our hands this seventeenth day of July, 1980.
/s/ C. DUANE BLINN
-----------------------------------
C. DUANE BLINN
/s/ JOHN P. CHASE
-----------------------------------
JOHN P. CHASE
/s/ DENNIS F. HARDCASTLE
-----------------------------------
DENNIS F. HARDCASTLE
/s/ EVERETT P. POPE
-----------------------------------
EVERETT P. POPE
/s/ HERBERT ROTH, JR.
-----------------------------------
HERBERT ROTH, JR.
/s/ IRVING S. WOLFSON
-----------------------------------
IRVING S. WOLFSON
<PAGE>
PHOENIX-CHASE SERIES FUND
EXISTING PROVISIONS
OF
DECLARATION OF TRUST, AS AMENDED
JULY 28, 1980
<PAGE>
PHOENIX-CHASE SERIES FUND
AGREEMENT AND DECLARATION OF TRUST
Page
ARTICLE I. NAME AND DEFINITIONS 4
Section 1.1 Name ................................................... 4
Section 1.2 Definitions ............................................ 4
(a) "Trust" ....................................... 4
(b) "Trustees" .................................... 4
(c) "Shares" ...................................... 4
(d) "Series" ...................................... 4
(e) "Shareholder" ................................. 4
(f) "Investment Company Act" ...................... 4
(g) "Commission" .................................. 4
(h) "Declaration of Trust" ........................ 4
(i) "Vote of a Majority of the Outstanding Voting
Securities" .................................. 4
ARTICLE II. THE TRUSTEES
Section 2.1 Number, Designation, Election, Term, etc. .............. 4
(a) Number and Election ........................... 4
(b) Term .......................................... 5
(c) Resignation and Retirement .................... 5
(d) Removal ....................................... 5
(e) Vacancies ..................................... 5
(f) Effect of Vacancy ............................. 5
(g) No Accounting ................................. 5
Section 2.2 Powers of Trustees ..................................... 5
(a) Investments ................................... 6
(b) Disposition of Assets ......................... 6
(c) Ownership Powers .............................. 6
(d) Subscription .................................. 6
(e) Form of Holding ............................... 6
(f) Reorganization, etc. .......................... 6
(g) Voting Trusts, etc. ........................... 6
(h) Compromise .................................... 6
(i) Partnerships, etc. ............................ 6
(j) Borrowing and Security ........................ 6
(k) Insurance ..................................... 6
Section 2.3 Action by Trustees ..................................... 6
Section 2.4 Certain Contracts ...................................... 7
(a) Advisory ...................................... 7
(b) Administration ................................ 7
(c) Financial Agent ............................... 7
(d) Distribution .................................. 7
(e) Custodian ..................................... 7
(f) Transfer Agency ............................... 7
(g) Dividend Disbursing Agency .................... 7
(h) Shareholder Servicing ......................... 7
Section 2.5 Certain Conflicts of Interest .......................... 7
Section 2.6 Payment of Trust Expenses and Compensation of Trustees . 8
Section 2.7 Ownership of Assets of the Trust ....................... 8
ARTICLE III. INVESTMENT POWERS AND RESTRICTIONS 8
Section 3.1 Investment Restrictions ................................ 8
Section 3.2 Investment Objectives .................................. 9
Section 3.3 Modification ........................................... 9
Section 3.4 Other Investment Restrictions .......................... 10
2
<PAGE>
ARTICLE IV. SHARES 10
Section 4.1 Description of Shares .................................. 10
Section 4.2 Establishment and Designation of Series ................ 10
(a) Assets Belonging to Series .................... 10
(b) Liabilities Belonging to Series ............... 11
(c) Dividends ..................................... 11
(d) Liquidation ................................... 11
(e) Voting ........................................ 12
(f) Redemption by Shareholder ..................... 12
(g) Repurchase .................................... 12
(h) Redemption by Trust ........................... 12
(i) Net Asset Value ............................... 12
(j) Transfer ...................................... 12
(k) Equality ...................................... 13
(l) Fractions ..................................... 13
(m) Exchange Privilege ............................ 13
Section 4.3 Ownership of Shares .................................... 13
Section 4.4 Investment in the Trust ................................ 13
Section 4.5 No Preemptive or Appraisal Rights ...................... 13
Section 4.6 Status of Shares and Limitation of Personal Liability .. 13
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS 13
Section 5.1 Voting Powers .......................................... 13
Section 5.2 Meetings ............................................... 14
Section 5.3 Record Dates ........................................... 14
Section 5.4 Quorum and Required Vote ............................... 14
Section 5.5 Action by Written Consent .............................. 14
Section 5.6 Inspection of Records .................................. 14
ARTICLE VI. LIMITATION OF LIABILITY: INDEMNIFICATION 15
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable;
Notice .............................................. 15
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or
Surety .............................................. 15
Section 6.3 Indemnification of Shareholders ........................ 15
Section 6.4 Indemnification of Trustees, Officers, etc. ............ 15
Section 6.5 Compromise Payment ..................................... 16
Section 6.6 Indemnification Not Exclusive, etc. .................... 16
Section 6.7 Liability of Third Persons Dealing with Trustees ....... 16
ARTICLE VII. MISCELLANEOUS 16
Section 7.1 Duration and Termination of Trust ...................... 16
Section 7.2 Reorganization ......................................... 16
Section 7.3 Amendments ............................................. 17
Section 7.4 Name of Trust .......................................... 17
Section 7.5 Filing of Copies; References; Headings ................. 17
Section 7.6 Applicable Law ......................................... 17
3
<PAGE>
AN AGREEMENT AND DECLARATION OF TRUST, herein called Declaration of Trust,
made at Boston in the Commonwealth of Massachusetts on the 7th day of April,
1958 by and between John P. Chase, Francis C. Gray, Oscar W. Haussermann,
William J. Kirk and William M. Rand and such persons as may from time to time
become Shareholders of this Trust by purchasing or otherwise acquiring shares
of beneficial interest issued hereunder, as heretofore amended, is hereby
further amended to read in its entirety as follows:
THE TRUSTEES hereby agree and declare that they will hold all cash,
securities, and other property which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same
upon the following terms and conditions for the benefit of the holders from
time to time of shares of beneficial interest in the Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name. This Trust shall be known as "Phoenix-Chase Series Fund"
and the Trustees shall conduct the business of the Trust under that name or
such other name as they may from time to time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) "Trust" refers to the Massachusetts business trust established by
this Agreement and Declaration of Trust, as amended from time to
time;
(b) "Trustees" refers to the Trustees of the Trust named herein and their
duly elected successors;
(c) "Shares" refers to the transferable units of interest into which
beneficial interest in the Trust or any Series of the Trust (as the
context may require) shall be divided from time to time;
(d) "Series" refers to the Series of Shares established and designated
pursuant to the provisions of Article IV;
(e) "Shareholder" means a record owner of Shares;
(f) The "Investment Company Act" refers to the Investment Company Act of
1940 and the rules and regulations thereunder, all as amended from
time to time;
(g) The term "Commission" shall mean the Securities and Exchange
Commission.
(h) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time;
(i) "Vote of a Majority of the Outstanding Voting Securities" means the
lesser of (i) 67% of the shares represented at a meeting at which more
than 50% of the outstanding shares are represented or (ii) more than
50% of the outstanding shares.
ARTICLE II
THE TRUSTEES
Section 2.1 Number, Designation, Election, Term, etc.
(a) Number and Election. At each annual meeting, or at a special meeting
held in lieu thereof, the Shareholders shall fix the number of
Trustees, which shall be not less than five (5) nor more than twelve
(12) Trustees, to serve until the next annual meeting or until the
election and qualification of their successors, and shall at such
meeting elect the number of Trustees so fixed. The Trustees serving
as such may increase (to not more than 12) or decrease (to not less
than five) the number of Trustees to a number other than the number
theretofore fixed. No decrease in the number of Trustees shall have
the effect of removing any Trustee from office prior to the expiration
of his term. However, the number of Trustees may be decreased in
conjunction with the removal of a Trustee pursuant to subsection (d)
of this Section 2.1
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<PAGE>
(b) Term. Each Trustee shall serve as a Trustee until the next annual
meeting of Shareholders or any special meeting held in lieu thereof
and until the election and qualification of his successor, or until
such Trustee sooner dies, resigns, retires or is removed.
(c) Resignation and Retirement. Any Trustee may resign his trust or retire
as a Trustee, by written instrument signed by him and delivered to the
remaining Trustees or to any officer of the Trust. Such resignation or
retirement shall take effect upon such delivery or upon such later
date as is specified in such instrument.
(d) Removal. Any Trustee may be removed with or without cause at any time
either by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date upon
which such removal shall become effective, or by the Shareholders at
any meeting called for the purpose.
(e) Vacancies. Any vacancy resulting from any reason, including without
limitation the death, resignation, retirement, removal or incapacity
of any of the Trustees, or resulting from an increase in the number of
Trustees by the Trustees, may be filled by a majority of the remaining
Trustees through the appointment in writing of a successor Trustee to
hold office until the next annual meeting of Shareholders and until the
election and qualification of his successor, provided that immediately
after filling any such vacancy at least two-thirds (2/3) of the
Trustees then holding office shall have been elected to such office
by the Shareholders at an annual or special meeting. Such appointment
of a successor Trustee shall be effective upon the written
acceptance of the person named therein to serve as a Trustee and
written agreement by such person to be bound by the provisions of this
Declaration of Trust whereupon the Trust estate shall vest in the new
Trustee, together with the continuing Trustees, without any further
act or conveyance.
(f) Effect of Vacancy. The death, resignation, retirement, removal or
incapacity of the Trustees, or of any one of them, shall not operate
to annul or terminate the Trust or to revoke or terminate any existing
agency or contract created or entered into pursuant to the terms of
this Declaration of Trust. During any vacancy a majority of the
remaining Trustees may exercise any and all of the powers of the
Trustees hereunder. The determination of a vacancy or vacancies in the
number of Trustees by reason of death, resignation or disability when
made by the remaining Trustees and set forth in any instrument filling
such vacancy or vacancies shall be final and conclusive for all
purposes.
(g) No Accounting. Except to the extent required by the Investment Company
Act or under circumstances which would justify his removal for cause,
no person ceasing to be a Trustee as a result of his death,
resignation, retirement, removal or incapacity (nor the estate of any
such person) shall be required to make an accounting to the
Shareholders or remaining Trustees upon such cessation.
Section 2.2 Powers of Trustees. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility. Without limiting the foregoing, the Trustees may adopt
By-Laws not inconsistent with this Declaration of Trust providing for the
conduct of the business and affairs of the Trust and may amend and repeal them
to the extent that such By-Laws do not reserve that right to the Shareholders;
they may, as they consider appropriate, elect and remove officers, appoint and
terminate agents and consultants, and hire and terminate employees, any one or
more of the foregoing of whom may be a Trustee, and may provide for the
compensation of all of the foregoing; they may appoint from their own number,
and terminate, any one or more committees consisting of two or more Trustees,
including without implied limitation an executive committee, which may, when
the Trustees are not in session and subject to the provisions of the Investment
Company Act, exercise some or all of the power and authority of the Trustees
as the Trustees may determine; in accordance with Section 2.4 they may retain
one or more advisers, administrators, financial agents and custodians and may
authorize any such custodian to employ sub-custodians or agents and to deposit
all or any part of the Trust's assets in a system or systems for the central
handling of securities and debt instruments, retain one or more transfer,
dividend, accounting or Shareholder servicing agents, provide for the
distribution of Shares by the Trust through one or more distributors, principal
underwriters or otherwise, set record dates or times for the determination of
Shareholders or certain of them with respect to various matters; they may
compensate or provide for the compensation of the Trustees, officers, advisers,
administrators, financial agents, custodians, other agents, consultants and
employees of the Trust or the Trustees on such terms as they deem appropriate;
and in general they may delegate to any officer of the Trust, to any
5
<PAGE>
committee of the Trustees and to any employee, adviser, administrator,
distributor, financial agent, custodian, transfer agent, dividend disbursing
agent, or any other agent or consultant of the Trust such authority, powers,
functions and duties as they consider desirable or appropriate for the conduct
of the business and affairs of the Trust, including without implied limitation
the power and authority to act in the name of the Trust and of the Trustees, to
sign documents and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing but subject to the limitations set forth
in Article III and to the extent not inconsistent with the Investment Company
Act or other applicable law, the Trustees shall have power and authority:
(a) Investments. To invest and reinvest from time to time cash and other
assets of the Trust in any type or class of security or debt
instrument including Shares of Series established pursuant to the
terms of this Declaration of Trust; and to hold cash or other assets
of the Trust uninvested in whole or in part without in any event being
bound or limited by any present or future law, rule of court or custom
in regard to investments by trustees;
(b) Disposition of Assets. To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the assets of the
Trust;
(c) Ownership Powers. To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities, debt instruments
or property ownership, and to execute and deliver proxies or powers
of attorney to such person or persons as the Trustees shall deem
proper, granting to such person or persons such power and discretion
with relation to securities, debt instruments or property as the
Trustees shall deem proper;
(d) Subscription. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities or
debt instruments;
(e) Form of Holding. Subject to the provisions of Section 2.7, to hold any
security, debt instrument or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in
the name of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depository or a nominee or nominees or otherwise;
(f) Reorganization, etc. To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer,
any security or debt instrument of which is or was held in the Trust;
to consent to any contract, lease, mortgage, purchase or sale of
property by such corporation or issuer, and to pay calls or
subscriptions with respect to any security or debt instrument held in
the Trust;
(g) Voting Trusts, etc. To join with other holders of any securities or
debt instruments in acting through a committee, depositary, voting
trustee or otherwise, and in that connection to deposit any security
or debt instrument with, or transfer any security or debt instrument
to, any such committee, depositary or trustee, and to delegate to them
such power and authority with relation to any security or debt
instrument (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary
or trustee as the Trustees shall deem proper;
(h) Compromise. To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy, including
but not limited to claims for taxes;
(i) Partnerships, etc. To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) Borrowing and Security. To borrow funds and to mortgage and pledge
the assets of the Trust or any part thereof to secure obligations
arising in connection with such borrowing; and
(k) Insurance. To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for the
conduct of the business, including, without limitation, insurance
covering each officer and employee of the Trust against larceny and
embezzlement and insurance covering each Trustee with respect to any
errors or omissions which may be committed or omitted by such Trustee.
Section 2.3 Action by Trustees. Except as otherwise provided by the
Investment Company Act or other applicable law or this Declaration of Trust,
any action to be taken by the Trustees may be taken by a majority
6
<PAGE>
of the Trustees present at a meeting of Trustees (a quorum, consisting of at
least a majority of the Trustees then in office, being present), within or
without Massachusetts, including any meeting held by means of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting,
or by written consents of a majority of the Trustees then in office.
Section 2.4 Certain Contracts. Subject to compliance with the provisions
of the Investment Company Act, but notwithstanding any limitations of present
and future law or custom in regard to delegation of powers by trustees
generally, the Trustees may, at any time and from time to time and without
limiting the generality of their powers and authority otherwise set forth
herein, enter into one or more contracts with any one or more corporations,
trusts, associations, partnerships, limited partnerships, other types of
organizations, or individuals ("Contracting Party") to provide for the
performance and assumption of some or all of the following services, duties and
responsibilities to, for or of the Trust and/or the Trustees, and to provide
for the performance and assumption of such other services, duties and
responsibilities in addition to those set forth below as the Trustees may
determine to be appropriate:
(a) Advisory. Subject to the general supervision of the Trustees and in
conformity with the stated policy of the Trustees with respect to the
investments of the Trust or of the assets belonging to any Series,
to manage such investments and assets, to make investment decisions
with respect thereto, and to place purchase and sale orders for
portfolio transactions relating to such investments and assets;
(b) Administration. Subject to the general supervision of the Trustees and
in conformity with any policies of the Trustees with respect to the
operations of the Trust, to provide all or any part of the
administrative and clerical personnel, office space and office
equipment and services appropriate for the efficient administration
and operation of the Trust;
(c) Financial Agency. Subject to the general supervision of the Trustees
and in conformity with any policies of the Trustees with respect to
the operations of the Trust, to provide financial and accounting
services whether with respect to the Trust's assets, or otherwise,
including but not limited to the preparation and supervision of the
Trust's financial statements and reports, bookkeeping services,
pricing services, periodic reports to Shareholders and others,
supporting schedules in connection with any audit of the Trust's
business or operations, and registration statements, prospectuses and
other documents required to be filed under all applicable Federal and
state laws and to provide any services involved in registering and
maintaining the registration of the Trust and of its Shares with the
Commission and registering or qualifying its Shares under state or
other securities laws or any services involved in preparing reports
to Shareholders;
(d) Distribution. To distribute the Shares of the Trust; to be principal
underwriter of such Shares or to act as agent of the Trust in the sale
of Shares and the acceptance or rejection of orders for the purchase
of Shares;
(e) Custodian. To maintain custody of the property of the Trust and
accounting records in connection therewith;
(f) Transfer Agency. To maintain records of the ownership of outstanding
Shares, the issuance and redemption and the transfer thereof;
(g) Dividend Disbursing Agency. To disburse any dividends and other
distributions declared by the Trustees and in accordance with the
policies of the Trustees and/or the instructions of any particular
Shareholder to reinvest any such dividends; and
(h) Shareholder Servicing. To provide service with respect to the
relationship of the Trust and its Shareholders, records with respect
to Shareholders and their Shares, and similar matters.
Section 2.5 Certain Conflicts of Interest. The same person may be the
Contracting Party for some or all of the services, duties and responsibilities
to, for and of the Trust and/or the Trustees, and the contracts with respect
thereto may contain such terms interpretive of or in addition to the
delineation of the services, duties and responsibilities provided for,
including provisions that are not inconsistent with the Investment Company Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer,
7
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partner, trustee, employee, manager, adviser, principal underwriter,
distributor or agent of or for any Contracting Party, or of or for any
parent or affiliate of any Contracting Party, or that the Contracting
Party or any parent or affiliate thereof is a Shareholder or has an
interest in the Trust, or that
(ii) any Contracting Party may have a contract providing for the rendering
of any similar services to one or more other corporations, trusts,
associations, partnerships, limited partnerships or other
organizations, or has other business or interests
shall not affect the validity of any contract for the performance and
assumption of services, duties and responsibilities to, for or of the Trust
and/or the Trustees or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same or create any liability or
accountability to the Trust or its Shareholders, provided that in the case of
any relationship or interest referred to in the preceding clause (i) on the
part of any Trustee or officer of the Trust either (x) the material facts as to
such relationship or interest have been disclosed to or are known by the
Trustees not having any such relationship or interest and the contract involved
is approved in good faith by a majority of such Trustees not having such
relationship or interest (even though such unrelated or disinterested Trustees
are less than a quorum of all the Trustees), or (y) the material facts as to
such relationship or interest and as to the contract have been disclosed to or
are known by the Shareholders entitled to vote thereon and the contract
involved is specifically approved in good faith by vote of the Shareholders,
and (z) the specific contract involved is fair to the Trust as of the time it
is authorized, approved or ratified by the Trustees or by the Shareholders.
Section 2.6 Payment of Trust Expenses and Compensation of Trustees. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust, or partly out of principal and partly out of income, and
to charge or allocate the same to, between or among such one or more of the
Series that may be established and designated pursuant to Article IV, as the
Trustees deem fair, all expenses, fees, charges, taxes and liabilities incurred
or arising in connection with the Trust, or in connection with the management
thereof, including, but not limited to, the Trustees' compensation and such
expenses and charges for the services of the Trust's officers, employees,
adviser, administrator, financial agent, distributor, principal underwriter,
auditor, counsel, custodian, transfer agent, dividend disbursing agent,
Shareholder servicing agent, and such other agents, consultants, and
independent contractors and such other expenses and charges, including
non-recurring expenses and other expenses which may be deemed extraordinary
expenses under all applicable Federal or State law, as the Trustees may deem
necessary or proper to incur. Without limiting the generality of any other
provision hereof, the Trustees shall be entitled to reasonable compensation
from the Trust for their services as Trustees and may fix the amount of such
compensation.
Section 2.7 Ownership of Assets of the Trust. Notwithstanding the
provisions of subsection (e) of section 2.2, title to all of the assets of the
Trust shall at all times be considered as vested in the Trustees as joint
tenants.
ARTICLE III
INVESTMENT POWERS AND RESTRICTIONS
Section 3.1 Investment Restrictions. The following investment restrictions
are fundamental investment policies of the Trust, and may not be altered
except as provided in Section 3.3. The Trust may not:
(a) Purchase for any Series securities of any issuer other than
obligations issued or guaranteed as to principal and interest by the
United States Government or its agencies or instrumentalities, if
immediately thereafter (i) more than 5% of such Series' total assets
(taken at market value) would be invested in the securities of such
issuer or (ii) more than 10% of the outstanding securities of any
class of such issuer would be held by such Series or by all Series
of the Trust in the aggregate.
(b) Concentrate the portfolio investments of any Series in any one
industry. To comply with this restriction, no security may be
purchased for a Series if such purchase would cause the value of the
aggregate investment of such Series in any one industry to exceed 25%
of that Series' total assets (taken at market value). However, any
Series established by the Trustees which invests primarily in high
grade money market instruments may invest more than 25% of its assets
(i) in the banking industry or (ii) in the personal credit institution
or business credit institution industries.
(c) Act as a securities underwriter except as it technically may be deemed
to be an underwriter under the Securities Act of 1933 in selling a
portfolio security.
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(d) Purchase securities on margin, but it may obtain short-term credit
as may be necessary for the clearance of purchases and sales of
securities.
(e) Make short sales of securities or maintain a short position.
(f) Make cash loans, except that the Trust may (i) purchase bonds, notes,
debentures or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not, and (ii)
enter into repurchase agreements, provided that no more than 10% of
any Series' total assets (taken at market value) may be subject to
repurchase agreements maturing in more than seven days.
(g) Make securities loans, except that the Trust may make loans of the
portfolio securities of any Series provided that the market value
of the securities subject to any such loans does not exceed 25% of the
value of the total assets (taken at market value) of such Series.
(h) Make investments in real estate or commodities or commodity contracts,
although the Trust may purchase securities which are secured by
interests in real estate, specifically, securities issued by real
estate investment trusts.
(i) Invest in oil, gas or other mineral exploration or development
programs, although the Trust may purchase securities of issuers which
engage in whole or in part in such activities.
(j) Invest in puts, calls, straddles, and any combination thereof, unless
authorized by the Trustees, provided, however, that it may write
covered call option contracts.
(k) Purchase securities of companies for the purpose of exercising
management or control.
(l) Participate in a joint or joint and several trading account in
securities.
(m) Purchase securities of any other investment company except in the
open market at customary brokers' commission rates or as part of a
plan of merger or consolidation.
(n) Purchase for any Series securities of any issuer which together with
predecessors has a record of less than three years' continuous
operation, if as a result more than 5% of the total net assets (taken
at market value) of such Series would then be invested in such
securities.
(o) Purchase or retain securities of any issuer if any officer or Trustee
of the Trust, or officer or director of its investment adviser, owns
beneficially more than 1/2 of 1% of the outstanding securities of such
issuer and all such persons owning more than 1/2 of 1% of such
securities together own beneficially more than 5% of such securities
or shares.
(p) Borrow money, except that the Trust (i) may borrow money for any
Series for temporary administrative purposes, provided that any such
borrowing does not exceed 10% of the value of the total assets (taken
at market value) of such Series and (ii) may borrow money for any
Series for investment purposes, provided that any borrowing for
investment purposes with respect to any such Series is (x) authorized
by the Trustees prior to any public distribution of the shares of such
Series or is authorized by the shareholders of such Series thereafter,
(y) is limited to 33 1/3% of the value of the total assets (taken at
market value) of such Series, and (z) is subject to an agreement by
the borrower that any recourse is limited to the assets of that Series
with respect to which the borrowing has been made.
(q) Pledge, mortgage or hypothecate the assets of any Series to an extent
greater than 10% of the total assets (taken at market value) of such
Series to secure borrowings made pursuant to the provisions of
subsection (p) of Section 3.1.
Section 3.2 Investment Objectives. The investment objectives of each of
the Series shall be determined by the Trustees prior to the date shares of such
Series are offered to the public and each such investment objective shall be a
fundamental investment policy of the Trust with respect to such Series and may
not be altered except as provided in Section 3.3.
Section 3.3 Modification. The fundamental investment policies of the Trust
as stated in this Article III may not be altered or amended without the
approval by a Vote of a Majority of the Outstanding Voting Securities of each
Series, except that any matter shall be deemed to have been effectively acted
upon with respect to any Series if approved by a Vote of a Majority of the
Outstanding Voting Securities of such Series, notwithstanding (a) that such
matter has not been approved by a Vote of a Majority of the Outstanding Voting
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Securities of any other Series affected by such matter and (b) that such matter
has not been approved by a Vote of a Majority of the Outstanding Voting
Securities of the Trust.
Section 3.4 Other Investment Restrictions. The Trustees may from time to
time adopt other investment restrictions with respect to the Trust or any
Series of the Trust established and designated herein or established and
designated in accordance with Section 4.1 hereof. Such restrictions shall not
be fundamental investment policies of the Trust and may be altered or amended
at any time by action of the Trustees.
ARTICLE IV
SHARES
Section 4.1 Description of Shares. The beneficial interest in the Trust
shall be divided into an unlimited number of Shares, with a par value of one
dollar each. The Trustees shall have the authority from time to time to
establish and designate two or more Series of Shares (including without
limitation those Series specifically established and designated in Section
4.2), as they deem necessary or desirable.
The Trustees may issue Shares of any Series of such consideration and on
such terms as they may determine (or for no consideration if pursuant to a
Share dividend or split), all without action or approval of the Shareholders.
All Shares when so issued on the terms determined by the Trustees shall be fully
paid and non-assessable (but may be subject to mandatory contribution back to
the Trust as provided in subsection (i) of Section 4.2). The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series into one or more Series that may be established and
designated from time to time. The Trustees may hold as treasury Shares (of the
same or some other Series), reissue for such consideration and on such terms as
they may determine, or cancel, at their discretion from time to time, any
Shares of any Series reacquired by the Trust.
The Trustees may from time to time close the transfer books or establish
record dates and times for the purposes of determining the holders of Shares
entitled to be treated as such, to the extent provided or referred in Section
5.3.
The establishment and designation of any Series of Shares in addition to
those established and designated in Section 4.2 shall be effective upon the
execution by a majority of the then Trustees of an instrument setting forth
such establishment and designation and the relative rights and preferences of
such Series, or as otherwise provided in such instrument. At any time that
there are no Shares outstanding of any particular Series previously established
and designated the Trustees may by an instrument executed by a majority of
their number abolish that Series and the establishment and designation thereof.
Any Trustee, officer or other agent of the Trust and any organization in
which any such person is interested may acquire, own, hold and dispose of
Shares of any Series of the Trust to the same extent as if such person were not
a Trustee, officer or other agent of the Trust or were not such an organization;
and the Trust may issue and sell or cause to be issued and sold and may purchase
Shares of any Series from any such person or any such organization subject only
to the general limitations, restrictions or other provisions applicable to the
sale or purchase of Shares of such Series generally.
Section 4.2 Establishment and Designation of Series. Without limiting the
authority of the Trustees set forth in Section 4.1 to establish and designate
any further Series, the following five Series are hereby established and
designated: "Phoenix-Chase Growth Fund Series", "Phoenix-Chase Stock Fund
Series", "Phoenix-Chase Balanced Fund Series", "Phoenix-Chase Money Market
Fund Series" and "Phoenix-Chase High Yield Fund Series". All Shares of
beneficial interest in the Trust outstanding as of the date of adoption of this
Amendment shall be classified as Shares of the Phoenix-Chase Growth Fund Series
and all assets, including all income, earnings, profits, and proceeds thereof,
and all liabilities of the Trust as of such date shall be considered assets
and liabilities of the Phoenix-Chase Growth Fund Series.
Shares of each Series established and designated in this Section 4.2 and
any Shares of any further Series that may from time to time be established and
designated by the Trustees shall (unless the Trustees otherwise determine with
respect to some further Series at the time of establishing and designating the
same) have the following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by the Trust
for the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested, all
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income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to
that Series for all purposes, subject only to the rights of creditors,
and shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment
of such proceeds, in whatever form the same may be, together with any
General Items, as defined herein, allocated to that Series as provided
herein, are herein referred to as "assets belonging to" that Series.
In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable
as belonging to any particular Series (collectively "General Items"),
the Trustees shall allocate such General Items to and among any one or
more of the Series established and designated from time to time in
such manner and on such basis as they, in their sole discretion, deem
fair and equitable; and any General Items so allocated to a particular
Series shall belong to that Series. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all
Series for all purposes.
(b) Liabilities Belonging to Series. The assets belonging to each
particular Series shall be charged with the liabilities of the Trust
in respect to that Series and all expenses, costs, charges and
reserves attributable to that Series, and any general liabilities,
expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of
the Series established and designated from time to time in such manner
and on such basis as the Trustees in their sole discretion deem fair
and equitable. The liabilities, expenses, costs, charges and reserves
allocated and so charged to a Series are herein referred to as
"liabilities belonging to" that Series. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the holders of all Series for all
purposes.
The Trustees shall have full discretion, to the extent not inconsistent
with the Investment Company Act, to determine which items shall be
treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.
(c) Dividends. Dividends and distributions on Shares of a particular
Series may be paid with such frequency as the Trustees may determine,
which may be daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees
may determine, to the holders of Shares of that Series, from such of
the income and capital gains, accrued or realized, from the assets
belonging to that Series as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that Series.
All dividends and distributions on Shares of a particular Series shall
be distributed pro rata to the holders of that Series in proportion
to the number of Shares of that Series held by such holders at the date
and time of record established for the payment of such dividends or
distributions, except that in connection with any dividend or
distribution program or procedure the Trustees may determine that no
dividend or distribution shall be payable on Shares as to which the
Shareholder's purchase order and/or payment have not been received
by the time or times established by the Trustees under such program
or procedure. Such dividends and distributions may be made in cash or
Shares or a combination thereof as determined by the Trustees or
pursuant to any program that the Trustees may have in effect at the
time for the election by each Shareholder of the mode of the making
of such dividend or distribution to that Shareholder. Any such
dividend or distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with subsection (i) of
this Section 4.2.
(d) Liquidation. In the event of the liquidation or dissolution of the
Trust or redemption of all of the Shares of any Series, the
Shareholders of each Series that has been established and designated
shall be entitled to receive, as a Series, when and as declared by
the Trustees, the excess of the assets belonging to that Series over
the liabilities belonging to that Series. The assets so distributable
to the Shareholders of any Series shall be distributed among such
Shareholders in proportion to the number of Shares of that Series held
by them and recorded on the books of the Trust. The redemption of all
the Shares of any particular Series may be authorized by a vote of a
majority of the Trustees then in office subject to the approval of a
Vote of a Majority of the Outstanding Voting Securities of that
Series.
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(e) Voting. On each matter submitted to a vote of the Shareholders, each
holder of a Share shall be entitled to one vote for each Share, and
a proportionate vote for each fractional Share, standing in his name
on the books of the Trust irrespective of the Series thereof and all
Shares of all Series shall vote as a single class ("Single Class
Voting"); provided, however, that (a) as to any matter with respect
to which a separate vote of any Series is required, such requirement
as to a separate vote by that Series shall apply in lieu of Single
Class Voting as described above; (b) in the event that the separate
vote requirement referred to in (a) above applies with respect to one
or more Series, then, subject to (c) below, the Shares of all Series
entitled to vote and to which the separate vote requirement referred
to in (a) above does not apply shall vote as a single class; and (c)
as to any matter which affects (within the meaning of Rule 18 f-2
under the Investment Company Act) the interest of one or more but not
all Series, only the holders of Shares of the one or more affected
Series shall be entitled to vote.
(f) Redemption by Shareholder. Each holder of Shares of a particular
Series, upon request to the Trust and compliance with appropriate
transfer requirements, shall be entitled to require the Trust to
redeem all or any part of the shares of that Series standing in the
name of such holder on the books of Trust at a redemption price equal
to the net asset value per Share of that Series next determined in
accordance with subsection (i) of this Section 4.2 after the receipt
in good order of the request for redemption, less such amount not to
exceed one percent (1%) of such net asset value as the Trustees may
determine.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of shares of
any Series to require the Trust to redeem Shares of that Series
during any period or at any time when and to the extent permissible
under the Investment Company Act.
(g) Repurchase. The Trust may maintain, or authorize its agent to maintain,
an offer to repurchase its outstanding Shares. During any period when
such an offer is being maintained, each Share for which a repurchase
order is received shall be repurchased at a price equal to the net
asset value per Share next determined in accordance with subsection
(i) of this Section 4.2 after receipt of such repurchase order less
such amount not in excess of 1% of such net asset value as the
Trustees may determine.
(h) Redemption by Trust. Each Share of each Series that has been
established and designated is subject to redemption by the Trust at
the redemption price which would be applicable if such Share was then
being redeemed by the Shareholder pursuant to subsection (f) of this
Section 4.2 at any time if the Trustees determine in their sole
discretion that such redemption is in the best interest of the
holders of the Shares, or any Series thereof, of the Trust, and upon
such redemption the holders of the Shares so redeemed shall have no
further right with respect thereto other than to receive payment of
such redemption price.
(i) Net Asset Value. The net asset value per Share of any Series shall be
the quotient obtained by dividing the value of the net assets of that
Series (being the value of the assets belonging to that Series less
the liabilities belonging to that Series) by the total number of
Shares of that Series outstanding, all determined in accordance with
the methods and procedures established by the Trustees from time to
time.
The Trustees may determine to maintain the net asset value per Share
of Phoenix-Chase Money Market Fund Series at a designated constant
dollar amount and in connection therewith may adopt procedures not
inconsistent with the Investment Company Act for the continuing
declarations of income and capital gains attributable to that Series
as dividends payable in additional Shares of that Series at the
designated constant dollar amount and for the handling of any losses
attributable to that Series. Such procedures may provide that in the
event of any loss each Shareholder shall be deemed to have contributed
to the capital of the Trust attributable to that Series his pro rata
portion of the total number of Shares required to be cancelled in
order to permit the net asset value per Share of that Series to be
maintained, after reflecting such loss, at the designated constant
dollar amount. Each Shareholder of the Trust shall be deemed to have
agreed, by his investment in any Series with respect to which the
Trustees shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the event of
any such loss.
(j) Transfer. All Shares of each particular Series shall be transferable,
but transfers of Shares of a partic-
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ular Series will be recorded on the Share transfer records of the
Trust applicable to that Series only at such times as may be
permitted by the Trustees.
(k) Equality. All Shares of each particular Series shall represent an
equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to that Series), and each Share
of any particular Series shall be equal to each other Share of that
Series; but the provisions of this sentence shall not restrict any
distinctions permissible under subsection (c) of this Section 4.2
that may exist with respect to dividends and distributions on Shares
of the same Series. The Trustees may from time to time divide or
combine the Shares of any particular Series into a greater or lesser
number of Shares of that Series without thereby changing the
proportionate beneficial interest in the assets belonging to that
Series or in any way affecting the rights of Shares of any other
Series.
(l) Fractions. Any fractional Share of any Series, if any such fractional
Share is outstanding, shall carry proportionately all the rights and
obligations of a whole Share of that Series, including rights with
respect to voting, receipt of dividends and distributions, redemption
of Shares, and liquidation of the Trust.
(m) Exchange Privilege. Subject to compliance with the requirements of the
Investment Company Act, the Trustees shall have the authority to
provide that holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series of Shares
in accordance with such requirements and procedures as may be
established by the Trustees.
Section 4.3 Ownership of Shares. The ownership of Shares shall be recorded
on the books of the Trust or of a transfer or similar agent for the Trust,
which books shall be maintained separately for the Shares of each Series that
has been established and designated. No certificates certifying the ownership
of Shares need be issued except as the Trustees may otherwise determine from
time to time. The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the use of facsimile signatures, the
transfer of Shares, and similar matters. The record books of the Trust as kept
by the Trust or any transfer or similar agent, as the case may be, shall be
conclusive as to who are the Shareholders and as to the number of Shares of
each Series held from time to time by each such Shareholder.
Section 4.4 Investments in the Trust. The Trustees may accept investments
in the Trust from such persons and on such terms and for such consideration,
not inconsistent with the provisions of the Investment Company Act, as they
from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, transfer agent or other person to accept orders for the
purchase of Shares that conform to such authorized terms and to reject any
purchase orders for Shares whether or not conforming to such authorized terms.
Section 4.5 No Preemptive or Appraisal Rights. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust. Shareholders shall have no appraisal rights
other than as may from time to time be provided by applicable law.
Section 4.6 Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall
be held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust nor entitle the representative
of any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle the Shareholder
to any title in or to the whole or any part of the Trust property or right to
call for a partition or division of the same or for an accounting. The Trust
shall not be deemed or otherwise construed to be a partnership nor shall the
ownership of Shares constitute the Shareholders partners. Neither the Trust nor
the Trustees nor any officer, employee or agent of the Trust shall have any
power to bind personally any Shareholder nor, except as specifically provided
herein, to call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 Voting Powers. The Shareholders shall have power to vote only
(i) for the election or removal of Trustees as provided in Section 2.1, (ii)
with respect to any contract with a Contracting Party as provided in Section
2.4 as to which Shareholder approval is required by the Investment Company Act,
(iii) with respect to any termination or reorganization of the Trust or any
Series to the extent and as provided in Sections 7.1 and 7.2, (iv) with respect
to any amendment of this Declaration of Trust to the extent and as
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provided in Section 7.3, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, and (vi) with
respect to such additional matters relating to the Trust as may be required
by the Investment Company Act, this Declaration of Trust or any registration
of the Trust with the Commission or state regulatory agency, or as the
Trustees may consider necessary or desirable. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy.
A proxy with respect to Shares held in the name of two or more persons shall
be valid if executed by any one of them unless at or prior to exercise of the
proxy the Trust receives a specific written notice to the contrary from any one
of them. A proxy purporting to be executed by or on behalf of a Shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. At any time when
no Shares of a Series are outstanding, the Trustees may with respect to that
Series exercise all rights of Shareholders and may take any action required by
law or this Declaration of Trust to be taken by Shareholders with respect to
that Series.
Section 5.2 Meetings. There shall be an annual meeting of Shareholders on
the fourth Thursday in March at the office of the Trust in Boston,
Massachusetts, or at such other place as may be designated in the call thereof,
which call shall be made by the Trustees. In the event that such meeting is not
held in any year on the date fixed herein, whether the omission be by oversight
or otherwise, a subsequent special meeting may be called by the Trustees
and held in lieu of the annual meeting with the same effect as though held on
such date. Special meetings may also be called by the Trustees from time to
time for the purpose of taking action upon any matter requiring the vote or
authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the Trustees
by mailing such notice at least seven days before such meeting, postage prepaid,
stating the time, place and purpose of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. If the Trustees
shall fail to call or give notice of any meeting of Shareholders for a period
of 60 days after written application by Shareholders holding at least 10% of
the Shares then outstanding requesting a meeting be called for a purpose
requiring action by the Shareholders as provided herein, then Shareholders
holding at least 10% of the Shares then outstanding may call and give notice of
such meeting, and thereupon the meeting shall be held in the manner provided
for herein in case of call thereof by the Trustees.
Section 5.3 Record Dates. For the purpose of determining the Shareholders
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine;
or without closing the transfer books the Trustees may fix a date and time not
more than 60 days prior to the date of any meeting of Shareholders or other
action as the date and time of record for the determination of Shareholders
entitled to vote at such meeting or any adjournment thereof or to be treated
as Shareholders of record for purposes of such action and no Shareholder
becoming such after that date and time shall be so entitled to vote at such
meeting or any adjournment thereof or to be treated as a Shareholder of
record for purposes of such other action.
Section 5.4 Quorum and Required Vote. A majority of the Shares entitled
to vote shall be a quorum for the transaction of business at a Shareholder's
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting, without the necessity of further notice. A
majority of the Shares voted, at a meeting at which a quorum is present, shall
decide any questions and a plurality shall elect a Trustee, except when a
different vote is provided for by any provision of the Investment Company Act
or other applicable law or by this Declaration of Trust.
Section 5.5 Action by Written Consent. Subject to the provisions of the
Investment Company Act and other applicable law, any action taken by
Shareholders of the Trust or of any Series may be taken without a meeting
if a majority of Shareholders entitled to vote on the matter (or such larger
proportion thereof as shall be required by the Investment Company Act or by any
express provision of this Declaration of Trust) consent to the action in
writing and such written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote taken at
a meeting of Shareholders.
Section 5.6 Inspection of Records. The records of the Trust shall be open
to inspection by Shareholders to the extent permitted by the Trustees.
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ARTICLE VI
LIMITATION OF LIABILITY: INDEMNIFICATION
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice.
All persons extending credit to, contracting with or having any claim against
the Trust shall look only to the assets of the Trust for payment under such
credit, contract or claim; and neither the Shareholders nor the Trustees, nor
any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor. Every note, bond, contract,
instrument, certificate or undertaking and every other act or thing
whatsoever executed or done by or on behalf of the Trust or the Trustees or any
of them in connection with the Trust shall be conclusively deemed to have been
executed or done only by or for the Trust or the Trustees and not personally.
Nothing in this Declaration of Trust shall protect any Trustee or officer
against any liability to the Trust or the Shareholders to which such Trustee or
officer would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of the office of Trustee or of such officer.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee or as officers or
officer and not individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but are binding only
upon the assets and property of the Trust, but the omission thereof shall not
operate to bind any Trustees or Trustee or officers or officer or Shareholders
or Shareholder individually.
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety.
The exercise by the Trustees of their powers and discretions hereunder shall
be binding upon everyone interested. A Trustee shall be liable for his own
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be able for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable
in any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
financial agent, custodian or transfer, dividend disbursing, Shareholder
servicing or other agent of the Trust, nor shall any Trustee be responsible for
the act or omission of any other Trustee; (b) the Trustees may take advice
of counsel or other experts with respect to the meaning and operation of this
Declaration of Trust and their duties as Trustees, and shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice; and (c) in discharging their duties, the Trustees,
when acting in good faith, shall be entitled to rely upon the books of account
of the Trust and upon written reports made to the Trustees by any officer
appointed by them, any independent public account, and (with respect to the
subject matter of the contract involved) any officer, partner or responsible
employee of a Contracting Party appointed by the Trustee pursuant to Section
2.4. The Trustees as such shall not be required to give any bond or surety or
any other security for the performance of their duties.
Section 6.3 Indemnification of Shareholders. In case any Shareholder or
former Shareholder shall be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason of being or having
been a Shareholder and not because of such Shareholder's acts or omissions or
for some other reason, the Trust (upon proper and timely request by the
Shareholder) shall assume the defense against such charge and satisfy any
judgment thereon, and the Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives or, in the case of a
corporation or other entity, its corporate or other general successor) shall
be entitled out of the assets of the Trust estate to be held harmless from
and indemnified against all loss and expense arising from such charge or
liability.
Section 6.4 Indemnification of Trustees, Officers, etc. The Trust shall
indemnify each of its Trustees and officers (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, except with respect to any matter as to
which such Covered Person shall have been finally adjudicated in any such
action, suit or other proceeding not to have acted in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to
the best interests of the Trust and except that no Covered Person shall be
indemnified against any liability to the
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Trust or its Shareholders to which such Covered Person would otherwise be
subject by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office. Expenses, including accountants' and counsel fees so incurred
by any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid from time to
time by the Trust in advance of the final disposition of any such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Covered
Person to repay amounts so paid to the Trust if it is ultimately determined
that indemnification of such expenses is not authorized under this Article VI.
Section 6.5 Compromise Payment. As to any matter disposed of by a
compromise payment of any such Covered Person referred to in Section 6.4,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless there has been
obtained an opinion in writing of independent legal counsel to the effect that
such Covered Person does not appear not to have acted in good faith in the
reasonable belief that his action was in or not opposed to the best interests of
the Trust and that such indemnification would not protect such person against
any liability to the Trust to which such person would otherwise be subject by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of office. Any payment made to any Covered
Person hereunder shall not prevent the recovery from any Covered Person of any
amount paid to such Covered Person in accordance with any of such clauses as
indemnification if such Covered Person is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable belief
that such Covered Person's action was in or not opposed to the best interests of
the Trust or to have been liable to the Trust or its Shareholders by reason
of wilful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's office.
Section 6.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
Section 6.7 Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Duration and Termination of Trust. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by a majority of the Trustees then in office
subject to the approval by a Vote of a Majority of the Outstanding Voting
Securities of each Series voting separately by Series.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated, as may
be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
Section 7.2 Reorganization. The Trustees may sell, convey and transfer the
assets of the Trust, or the assets belonging to any one or more Series, to
another Trust, partnership, association or corporation organized under the laws
of any state of the United States, or to the Trust, to be held as assets
belonging to another Series of the Trust, in exchange for cash, shares or other
securities (including, in the case of a transfer to another Series of the
Trust, Shares of such other Series) with such transfer being made subject to,
or with the assumption by the transferee of, the liabilities belonging to each
Series the assets of which are so transferred; provided, however, that no
assets belonging to any particular Series shall be so transferred unless the
terms of such transfer shall have first been approved at a meeting called for
the purpose by a Vote of a Majority of the Outstanding Voting Securities of that
Series. Following such transfer, the Trustees shall distribute such cash, shares
or other securities (giving due effect to the assets and liabilities belonging
to and any other differences among the various Series the assets belonging to
which have so been transferred)
16
<PAGE>
among the Shareholders of the Series the assets belonging to which have been
so transferred; and if all of the assets of the Trust have been so transferred,
the Trust shall be terminated.
Section 7.3 Amendments. All rights granted to the Shareholders under this
Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or
Trustee or repeal the prohibition of assessment except as herein provided
upon the Shareholders without the express consent of each Shareholder or
Trustee involved. Subject to the foregoing, the provisions of this Declaration
of Trust (whether or not related to the rights of Shareholders) may be amended
at any time by an instrument in writing signed by a majority of the then
Trustees (or by a Trustee or officer of the Trust pursuant to the vote of a
majority of such Trustees), when authorized so to do by the vote in accordance
with subsection (e) of Section 4.2 of Shareholders holding a majority of the
Shares entitled to vote, except that amendments (a) establishing and designating
any further Series of Shares, as provided in Section 4.1, or (b) abolishing any
Series of Shares of which there are no Shares outstanding, or (c) adopting,
altering, or amending investment restrictions with respect to the Trust or any
Series of the Trust which are not fundamental investment policies of the Trust
or of any Series, or (d) having the purpose of changing the name of the Trust
or the name of any Series theretofore established and designated, or of
supplying any omission, curing any ambiguity or curing, correcting or
supplementing any provision hereof which is internally inconsistent with any
other provision hereof or which is defective or inconsistent with the
Investment Company Act or with the requirements of the Internal Revenue Code
and applicable regulations for the Trust's obtaining the most favorable
treatment thereunder available to regulated investment companies, shall not
require authorization by Shareholder vote. Subject to the foregoing, any such
amendment shall be effective as provided in the instrument containing the
terms of such amendment or, if there is no provision therein with respect to
effectiveness, upon the execution of such instrument and of a certificate
(which may be a part of such instrument) executed by a Trustee or officer of
the Trust to the effect that such amendment has been duly adopted.
Section 7.4 Name of Trust. The Trust is adopting its name through
permission of Phoenix Mutual Life Insurance Company which has granted to
Phoenix Investment Counsel of Boston, Inc. the right to grant licenses to
investment companies pursuant to which such investment companies will be
permitted to use the name "Phoenix" upon such terms and conditions as are
agreed to by Pheonix Mutual Life Insurance Company. Phoenix Mutual Life
Insurance Company has reserved to itself or any successor to its business the
right to grant the nonexclusive right to use the name "Phoenix" or "Phoenix
Mutual" to any other entity. The Trustees agree to eliminate promptly at the
request of Phoenix Investment Counsel of Boston, Inc. all references to
"Phoenix" in the name of this Trust and will cause the business of this Trust
to be conducted thereafter under a name not using the word "Phoenix" in any
form or combination.
Section 7.5 Filing of Copies; References; Headings. The original or a
conformed copy of this amended Declaration of Trust and of each amendment
thereto shall be kept at the office of the Trust where it may be inspected
by any Shareholder. A copy of this amended Declaration of Trust and of each
amendment thereto shall be filed by the Trust with the Secretary of The
Commonwealth of Massachusetts and with the Boston City Clerk, as well as with
any other governmental office where such filing may from time to time be
required, but the failure to make any such filing shall not impair the
effectiveness of this amended Declaration of Trust or any such subsequent
amendment. Anyone dealing with the Trust may rely on a certificate by a Trustee
or officer of the Trust as to whether or not any such amendments have been made,
as to the identities of the Trustees and officers, and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were
the original, may rely on a copy certified by an officer of the Trust to be a
copy of this amended Declaration of Trust or of any such subsequent amendment.
In this instrument and in any such amendment, references to this instrument,
and all expressions like "herein", "hereof" and "hereunder" shall be deemed to
refer to this instrument as a whole as the same may be amended or affected
by any such amendments. The masculine gender shall include the feminine and
neuter genders. Headings are placed herein for convenience of reference only
and shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument or any amendment
thereto may be executed in any number of counterparts each of which shall be
deemed an original.
Section 7.6 Applicable Law. This Declaration of Trust, made in The
Commonwealth of Massachusetts, and the Trust created hereunder, is governed
by the laws of said Commonwealth and is construed and administered according
to said laws. The Trust is of the type referred to in Section 1 of Chapter 182
of the Massachusetts General Laws and of the type commonly called a
Massachusetts business trust, and, without limiting the provisions hereof,
the Trust may exercise all powers which are ordinarily exercised by such a
trust.
17
EXHIBIT 1.2
AMENDMENT TO
AGREEMENT AND DECLARATION OF TRUST, AS AMENDED
<PAGE>
EXHIBIT 1.2
AMENDMENTS
TO
Agreement and Declaration of Trust, as Amended
<PAGE>
PHOENIX SERIES FUND
Amendment to Declaration of Trust
We, the undersigned, being a majority of the members of the Board of
Trustees of the Phoenix Series Fund, a Massachusetts business trust organized
under a Declaration of Trust dated April 7, 1958, as amended July 28, 1980,
February 25, 1982, October 12, 1982, February 25, 1987, October 31, 1987 and
June 21, 1994, and acting pursuant to ARTICLE VII Section 7.3 of said
Declaration of Trust, hereby further amend said Declaration of Trust, effective
July 15, 1994 by
(1) deleting the first paragraph of Section 4.2 of ARTICLE IV thereof and by
inserting in lieu of such paragraph the following paragraph:
Without limiting the authority of the Trustees set forth in Section
4.1 to establish and designate any further Series, the following seven
Series are hereby established and designated: "Phoenix Balanced Fund
Series", "Phoenix Convertible Fund Series", "Phoenix Growth Fund
Series", "Phoenix U.S. Stock Fund Series", "Phoenix High Yield Fund
Series", "Phoenix Money Market Fund Series", and "Phoenix U.S.
Government Securities Fund Series". All shares of beneficial interest
of the Phoenix Stock Fund Series outstanding as of July 15, 1994 shall
be classified as shares of the Phoenix U. S. Stock Fund Series.
WITNESS our hands this 24th day of August, 1994.
/s/ C. Duane Blinn /s/ Philip R. McLoughlin
- -------------------------------- ---------------------------------
C. Duane Blinn Philip R. McLoughlin
/s/ Robert Chesek /s/ James M. Oates
- -------------------------------- ---------------------------------
Robert Chesek James M. Oates
/s/ E. Virgil Conway /s/ Philip R. Reynolds
- -------------------------------- ---------------------------------
E. Virgil Conway Philip R. Reynolds
/s/ Harry Dalzell-Payne /s/ Herbert Roth, Jr.
- -------------------------------- ---------------------------------
Harry Dalzell-Payne Herbert Roth, Jr.
/s/ Leroy Keith, Jr. /s/ Richard E. Segerson
- -------------------------------- ---------------------------------
Leroy Keith, Jr. Richard E. Segerson
<PAGE>
PHOENIX SERIES FUND
Certificate of
Amendment to Declaration of Trust
The undersigned, being all of the Board of Trustees of the Phoenix Series
Fund, a Massachusetts business trust (the "Trust"), do hereby certify that, in
accordance with certain implied powers vested in the Board of Trustees pursuant
to Article II, Section 2.2 and the authority conferred upon the Trustees of the
Trust pursuant to Article VII, Section 7.3 of that certain Agreement and
Declaration of Trust dated April 7, 1958, as amended (hereinafter collectively
referred to as the "Declaration"), the Declaration is further amended in order
to reflect the following modifications deemed necessary, proper and desirable in
order to promote the interests of the Trust:
1. The first paragraph of Article IV, Section 4.1 is hereby deleted and the
following is inserted in lieu thereof:
The interest of the beneficiaries hereunder shall be divided into an
unlimited number of transferable shares of beneficial interest, in one or
more distinct and separate Series or Classes thereof as the Trustees from
time to time may create and establish in accordance with Sections 4.2, 4.7
and 4.8 hereof, par value of $1.00 per share.
2. The first unnumbered paragraph of Article IV, Section 4.2 is hereby deleted
and the following is inserted in lieu thereof:
Without limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Series, the following seven Series are
hereby established and designated: "Phoenix Balanced Fund Series", "Phoenix
Convertible Fund Series", "Phoenix Growth Fund Series", "Phoenix High Yield
Fund Series", "Phoenix Money Market Fund Series", "Phoenix Stock Fund
Series", and "Phoenix U.S. Government Securities Fund Series".
3. The words "subject to Sections 4.7 and 4.8 hereof" are hereby inserted
after the words "the following relative rights and preferences" appearing at the
conclusion of the second unnumbered paragraph within Article IV, Section 4.2.
4. Article IV, Section 4.7 is hereby added, to wit:
Section 4.7. Class Designation. The Trustees, in their discretion, may
authorize the division of the Shares of any Series into two or more
Classes, and the different Classes shall be established and designated, and
the variations in the relative rights and preferences as between the
different Classes shall be fixed and determined, by the Trustees; provided,
that all Shares of any Series shall, subject to
<PAGE>
-2-
Section 4.8, below, be identical to all other Shares of the same Series,
except that there may be variations between different classes as to
allocation of expenses, rights of redemption, special and relative rights
as to dividends and on liquidation, conversion rights, and conditions
under which the several Classes shall have separate voting rights. All
references to Shares in this Declaration shall be deemed to refer to Shares
of any or all Classes as the context may require.
5. Article IV, Section 4.8 is hereby added, to wit:
Section 4.8. Dual Distribution System. Without in any manner limiting
the rights of the Trustees pursuant to Section 4.7, above, the Trustees
hereby divide the Shares of each of the Series described in Section 4.2,
above, into two Classes. The Classes of each respective Series, so
established, shall be designated as "Class A Shares" and "Class B Shares".
The following preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption shall pertain to all Shares in each of the
foregoing Classes:
(a) The assets belonging to each Class shall be invested in the same
investment portfolio as the applicable Series.
(b) The dividends and distributions of investment income and capital
gains with respect to each Class shall be in such amounts as may be
declared from time to time by the Trustees, and the dividends and
distributions of each Class of a Series may vary from dividends and
distributions of investment income and capital gains with respect to the
other Class of that Series to reflect differing allocations of the expenses
of the Trust between the holders of the two classes of such Series and any
resultant differences between the net asset value per share of the two
classes of such Series, to such extent and for such purposes as the
Trustees may deem appropriate. The allocation of investment income or
capital gains and expenses and liabilities of each Series between the Class
A Shares and the Class B Shares shall be determined by the Trustees in a
manner that is consistent with the order dated September 13, 1993
(Investment Company Act of 1940 Release No. IC-19706) issued by the
Securities and Exchange Commission in connection with the application for
exemption filed by National Multi-Sector Fixed Income Fund, et al., any
amendment to such order or any rule or interpretation under the Investment
Company Act of 1940 that modifies or supersedes such order.
<PAGE>
-3-
(c) Class A Shares (including fractional shares thereof) may be
subject to an initial sales charge pursuant to the terms of the issuance of
such Shares.
(d) The proceeds of the redemption of Class B Shares (including a
fractional share thereof) shall be reduced by the amount of any contingent
deferred sales charge payable on such redemption pursuant to the terms of
the issuance of such Shares.
(e) The holders of Class A Shares and Class B Shares shall have (i)
exclusive voting rights with respect to provisions of any distribution
plan adopted by the Trust pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (a "Plan") applicable to each respective Class of a
particular Series, and (ii) no voting rights with respect to provisions of
any Plan applicable to the other Class of that Series, any other Series, or
with regard to any other matter submitted to a vote of shareholders of the
Trust which does not affect holders of that respective Class of such
Series.
(f)(i) Each Class B Share, other than a share purchased through the
automatic reinvestment of a dividend or a distribution with respect to
Class B Shares, shall be converted automatically, and without any action
or choice on the part of the holder thereof, into Class A Shares of the
same Series on the date that is the first business day following the month
in which the eighth anniversary date of the date of the issuance of the
Class B Share falls (the "Conversion Date"). With respect to Class B Shares
issued in an exchange or series of exchanges for shares of shares of
beneficial interest or common stock, as the case may be, of another
investment company or class or series thereof registered under the
Investment Company Act of 1940 pursuant to an exchange privilege granted by
the Trust, the date of issuance of the Class B Shares for purposes of the
immediately preceding sentence shall be the date of issuance of the
original shares of beneficial interest or common stock, as the case may be.
(ii) Each Class B Share acquired through the automatic reinvestment of
a dividend or a distribution with respect to Class B Shares shall be
segregated in a separate sub-account. Each time any Class B Shares in a
shareholder's Fund account (other than those in the aforedescribed
applicable sub-account) convert to Class A Shares of the same Series, an
equal pro-rata portion of the Class B Shares then in the sub-account will
also convert to Class A Shares of the same Series without any action or
choice on the part of the holder thereof. The portion will be determined by
the ratio that the shareholder's Class B Shares converting to Class A
Shares
<PAGE>
-4-
bears to the shareholder's total Class B Shares not acquired through
dividends and distributions.
(iii) The conversion of Class B Shares to Class A Shares is subject to
the continuing availability of an opinion of counsel or a ruling of the
Internal Revenue Service that payment of different dividends on Class A and
Class B Shares does not result in the Trust's dividends or distributions
constituting "preferential dividends" under the Internal Revenue Code of
1986, as amended, and that the conversion of shares does not constitute a
taxable event under federal income tax law.
(iv) The number of shares of Class A Shares into which a share of
Class B Shares is converted pursuant to paragraphs (f)(i) and (f)(ii)
hereof shall equal the number (including for this purpose fractions of a
Share) obtained by dividing the net asset value per share of the Class B
Shares (for purposes of sales and redemptions thereof on the Conversion
Date) by the net asset value per share of the Class A Shares of the same
Series (for purposes of sales and redemptions thereof on the Conversion
Date).
(v) On the Conversion Date, the Class B Shares converted into shares
of Class A Shares will cease to accrue dividends and will no longer be
deemed outstanding and the rights of the holders thereof (except the right
to receive (i) the number of shares of Class A Shares of the same Series
have been converted and (ii) declared but unpaid dividends to the
Conversion Date) will cease. Certificates representing Class A Shares
resulting from the conversion need not be issued until certificates
representing Class B Shares converted, if issued, have been received by the
Trust or its agent duly endorsed for transfer.
6. The following is hereby added at the conclusion of the first paragraph
appearing in Article IV, Section 4.2(i):
The net asset value of a Share shall reflect all indebtedness, expenses and
liabilities attributable to each applicable Class within each respective
Series. The net asset value of a Share shall be determined by dividing the
net asset value of each applicable Class of a particular Series by the
number of Shares of that Class outstanding within that Series.
7. The following is hereby inserted at the conclusion of the first sentence
within Article IV, Section 4.2(k):
Notwithstanding the foregoing, Shares of each Class shall represent an
equal proportionate interest in the assets
<PAGE>
-5-
belonging to the applicable Class within that Series, subject to the
liabilities of that particular Class. Shares of each Class shall also
represent an interest in the assets belonging to such Series which shall be
proportionate to the relative aggregate net asset value of such Class
relative to the aggregate net asset value of the other Class within said
Series, subject to the liabilities of that particular Series.
8. The following is hereby added to the conclusion of Article IV, Section
4.2(m):
, or as may otherwise be described in the Trust's then effective
registration statement under the Securities Act of 1933.
Except as hereinabove and hereinbefore modified, all other terms and
conditions set forth in the Declaration shall be and remain in full force and
effect.
WITNESS our hands this 25th day of May, 1994.
/s/C. Duane Blinn /s/Philip R. McLoughlin
- -------------------------------- ------------------------------------
C. Duane Blinn Philip R. McLoughlin
/s/Robert Chesek /s/James M. Oates
- -------------------------------- ------------------------------------
Robert Chesek James M. Oates
/s/E. Virgil Conway /s/Philip R. Reynolds
- -------------------------------- ------------------------------------
E. Virgil Conway Philip R. Reynolds
/s/Harry Dalzell-Payne /s/Herbert Roth, Jr.
- -------------------------------- ------------------------------------
Harry Dalzell-Payne Herbert Roth, Jr.
/s/Leroy Keith, Jr. /s/Richard E. Segerson
- -------------------------------- ------------------------------------
Leroy Keith, Jr. Richard E. Segerson
<PAGE>
PHOENIX SERIES FUND
Amendment to Declaration of Trust
We, the undersigned, being a majority of the members of the Board of
Trustees of the Phoenix Series Fund, a Massachusetts business trust organized
under a Declaration of Trust dated April 7, 1958, as amended July 28, 1980,
February 25, 1982, October 12, 1982, February 25, 1987, October 31, 1987 and
June 21, 1994, and acting pursuant to ARTICLE VII Section 7.3 of said
Declaration of Trust, hereby further amend said Declaration of Trust, effective
July 15, 1994 by
(1) deleting the first paragraph of Section 4.2 of ARTICLE IV thereof
and by inserting in lieu of such paragraph the following paragraph:
Without limiting the authority of the Trustees set forth in
Section 4.1 to establish and designate any further Series, the
following seven Series are hereby established and designated:
"Phoenix Balanced Fund Series", "Phoenix Convertible Fund
Series", "Phoenix Growth Fund Series", "Phoenix U.S. Stock
Fund Series", "Phoenix High Yield Fund Series", "Phoenix Money
Market Fund Series", and "Phoenix U.S. Government Securities
Fund Series". All shares of beneficial interest of the Phoenix
Stock Fund Series outstanding as of July 15, 1994 shall be
classified as shares of the Phoenix U. S. Stock Fund Series.
WITNESS our hands this 24th day of August, 1994.
/s/ C. Duane Blinn /s/ Philip R. McLoughlin
- -------------------------------- ---------------------------------
C. Duane Blinn Philip R. McLoughlin
/s/ Robert Chesek /s/ James M. Oates
- -------------------------------- ---------------------------------
Robert Chesek James M. Oates
/s/ E. Virgil Conway /s/ Philip R. Reynolds
- -------------------------------- ---------------------------------
E. Virgil Conway Philip R. Reynolds
/s/ Harry Dalzell-Payne /s/ Herbert Roth, Jr.
- -------------------------------- ---------------------------------
Harry Dalzell-Payne Herbert Roth, Jr.
/s/ Leroy Keith, Jr. /s/ Richard E. Segerson
- -------------------------------- ---------------------------------
Leroy Keith, Jr. Richard E. Segerson
EXHIBIT 1.4
AMENDMENT TO
AGREEMENT AND DECLARATION OF TRUST, AS AMENDED
<PAGE>
PHOENIX SERIES FUND
Certificate of Amendment to Declaration of Trust
The undersigned, being all of the Trustees of the Phoenix Series Fund,
a Massachusetts business trust (the "Trust") under a certain Declaration of
Trust dated April 7, 1958, as amended from time to time (the "Declaration"),
acting in accordance with certain implied powers vested in the Board of Trustees
pursuant to Article II, Section 2.2 and acting pursuant to Article VII, Section
7.3 of the Declaration for the purpose of amending the name of the Phoenix U.S.
Stock Fund Series, hereby further amend said Declaration and Trust, effective
upon filing of this Certificate of Amendment in the office of the Secretary of
State of the Commonwealth of Massachusetts, as follows:
1. The first paragraph of Section 4.2 of Article IV of the Declaration is hereby
amended and restated to read as follows:
"Without in any manner limiting the authority of the Trustees pursuant
to Section 4.1 above, to establish and designate any further Series, the
Trustees hereby divide the Shares of the Trust into seven Series and do further
establish and designate those Series as the "Phoenix Aggressive Growth Fund
Series", "Phoenix Balanced Fund Series", "Phoenix Convertible Fund Series",
"Phoenix Growth Fund Series", Phoenix High Yield Fund Series", "Phoenix Money
Market Series", and "Phoenix U.S. Government Securities Fund Series". All shares
of the Series heretofore designated "Phoenix U.S. Stock Fund Series" shall
hereafter constitute shares of the "Phoenix Aggressive Growth Fund Series".
2. The first paragraph of Section 4.8 of Article IV of the Declaration is hereby
amended to add the phrase "as amended" after the words "described in Section
4.2, above" in the first sentence of such paragraph.
Pursuant to Section 4.1 of Article IV of the Declaration, the Trustees
hereby approve, ratify and confirm the classification of unissued shares of the
Trust into such seven series and the respective classes thereof, and do further
approve, ratify and confirm the classification of all shares of each Series and
class thereof heretofore issued with respect to each such Series and class in
the name of such Series and class.
<PAGE>
WITNESS our hands this 22nd day of May, 1996.
/s/C. Duane Blinn /s/Everett L. Morris
- ------------------------------------- --------------------------------
C. Duane Blinn Everett L. Morris
/s/Robert Chesek /s/James M. Oates
- ------------------------------------- -------------------------------
Robert Chesek James M. Oates
/s/E. Virgil Conway /s/Calvin J. Pedersen
- ------------------------------------- ------------------------------
E. Virgil Conway Calvin J. Pedersen
/s/Harry Dalzell-Payne /s/Philip R. Reynolds
- ------------------------------------- ------------------------------
Harry Dalzell-Payne Philip R. Reynolds
/s/Francis E. Jeffries /s/Herbert Roth, Jr.
- ------------------------------------- ------------------------------
Francis E. Jeffries Herbert Roth, Jr.
/s/Leroy Keith, Jr. /s/Richard E. Segerson
- ------------------------------------- ------------------------------
Leroy Keith, Jr. Richard E. Segerson
/s/Philip R. McLoughlin /s/Lowell P. Weicker, Jr.
- ------------------------------------- ------------------------------
Philip R. McLoughlin Lowell P. Weicker, Jr.
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
<PAGE>
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made effective as of the 1st day of January, 1994 by and
between PHOENIX SERIES FUND (hereinafter called the "Trust"), a Massachusetts
business trust authorized to issue shares of beneficial interest in separate
series, and PHOENIX INVESTMENT COUNSEL, INC., a Massachusetts corporation
(hereinafter called "the Adviser").
WITNESSETH THAT:
1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust and to each of the Series of the Trust established and designated by
the Trustee on or before the date hereof, namely Phoenix Balanced Fund Series,
Phoenix Convertible Fund Series, Phoenix Growth Fund Series, Phoenix High Yield
Fund Series, Phoenix Money Market Fund Series, Phoenix Stock Fund Series and
Phoenix U.S. Government Securities Fund Series (collectively, the "Existing
Series"), for the period and on the terms set forth herein. The Adviser accepts
such appointment and agrees to render the services described in the Agreement
for the compensation herein provided.
2. In the event that the Trustees desire to retain the Adviser to render
investment advisory services hereunder with respect to one or more additional
series ("Additional Series"), the Trust shall notify the Adviser in writing. If
the Adviser is willing to render such services, it shall notify the Trust in
writing, whereupon such Additional Series shall become subject to the terms and
conditions of this Agreement.
3. The Adviser shall furnish continuously an investment program for each of
the Existing Series and any Additional Series which may become subject to the
terms and conditions set forth herein (collectively, "Series") and shall manage
the investment and reinvestment of the assets of each Series, subject at all
times to the supervision of the Trustees.
4. With respect to managing the investment and reinvestment of the Trust's
assets, the Adviser shall provide, at its own expense:
(a) Investment research, advise and supervision;
(b) An investment program for each Series consistent with its
investment objectives;
(c) Implementation of the investment program for each Series including
the purchase and sale of securities;
(d) Advice and assistance on the general operations of the Trust; and
(e) Regular report to the Trustees on the implementation of each
Series' investment program.
- 1 -
<PAGE>
5. The Adviser shall, for all purposes herein, be deemed to be an
independent contractor.
6. The Adviser shall furnish at its own expense, or pay the expenses of the
Trust for the following:
(a) Office facilities, including office space, furniture and
equipment;
(b) Personnel necessary to perform the functions required to manage
the investment and reinvestment of the Trust's assets (including those
required for research, statistical and investment work);
(c) Personnel to serve without salaries from the Trust as officers or
agents of the Trust. The Adviser need not provide personnel to perform, or
pay the expenses of the Trust, for services customarily performed for an
open-end management investment company by its national distributor,
custodian, financial agent, transfer agent, registrar, dividend disbursing
agent, auditors and legal counsel; and
(d) Compensation and expenses, if any, of the Trustees who are also
full-time employees of the Adviser or any of its affiliates.
7. All costs and expenses not specifically enumerated herein as payable by
the Adviser shall be borne by the Trust. Such expenses shall include, but shall
not be limited to, all expenses (other than those specifically referred to as
being borne by the Adviser) incurred in the operation of the Trust and any
public offering of its shares, including, among others interest, taxes,
brokerage fees and commissions, fees of Trustees who are not full-time employees
of the Adviser and any of its affiliates, expenses of Trustees' and
shareholders' meetings including the cost of printing and mailing proxies,
expenses of insurance premiums for fidelity and other coverage, expenses of
repurchase and redemption of shares, expenses of issue and sale of shares (to
the extent not borne by its national distributor under its agreement with the
Trust), expenses of printing and mailing stock certificates representing shares
of the Trust, association membership dues, charges of custodians, transfer
agents, dividend disbursing agents and financial agents, bookkeeping, auditing
and legal expenses. The Trust will also pay the fees and bear the expense of
registering and maintaining the registration of the Trust and its shares with
the Securities and Exchange Commission and registering or qualifying its shares
under state and other securities laws and the expense of preparing and mailing
prospectuses and reports to shareholders. Additionally, if authorized by the
Trustees, the Trust shall pay for extraordinary expenses and expenses of a
non-recurring nature which may include, but not be limited to the reasonable and
proportionate cost of any reorganization or acquisition of assets and the cost
of legal proceedings to which the Trust is a party.
- 2 -
<PAGE>
8. For providing the services and assuming the expenses outlined herein,
the Trust agrees that the Adviser shall be compensated as follows:
(a) Within five days after the end of each month, the Trust shall pay
the Adviser a fee based on the following annual rates as a percentage of
the average aggregate daily net asset values of the Series:
1st $1-2 $2+
SERIES $1 Billion Billion Billion
- ------ ---------- ------- -------
Phoenix Growth Fund Series 0.70% 0.65% 0.60%
Phoenix Stock Fund Series 0.70% 0.65% 0.60%
Phoenix Convertible Fund Series 0.65% 0.60% 0.55%
Phoenix High Yield Fund Series 0.65% 0.60% 0.55%
Phoenix Balanced Fund Series 0.55% 0.50% 0.45%
Phoenix U.S. Government Securities
Fund Series 0.45% 0.40% 0.35%
Phoenix Money Market Fund Series 0.40% 0.35% 0.30%
The amounts payable to the Adviser shall be based upon the average of
the values of the net assets of the particular Series as of the close of
business each day, computed in accordance with the Declaration of Trust.
(b) Compensation shall accrue immediately upon the effective date of
this Agreement.
(c) If there is termination of this Agreement during a month, the fee
for that month shall be proportionately computed upon the average of the
aggregate daily net asset values of the Trust for such partial period in
such month.
(d) The Adviser agrees to reimburse the Trust for the amount, if any,
by which the total operating and management expenses for each Series
(including the Adviser's compensation, pursuant to this paragraph, but
excluding taxes, interest, costs of portfolio acquisition and dispositions
and extraordinary expenses), for any "fiscal year" exceed the level of
expenses which such Series is permitted to bear under the most restrictive
expense limitation imposed on open-end investment companies by any state in
which shares of such Series are then qualified. Such reimbursement, if any,
will be made by the Adviser to the Trust within five days after the end of
each month. For the purpose of this subparagraph (d), the term "fiscal
year" shall include the portion of the
- 3 -
<PAGE>
then current fiscal year which shall have elapsed at the date of
termination of this Agreement.
9. The services of the Adviser to the Trust are not deemed exclusive, the
Adviser being free to render services to others and to engage in other
activities. Without relieving the Adviser of its duties hereunder and subject to
the prior approval of the Trustees and subject to further compliance with the
applicable provisions of the Investment Company Act of 1940, as amended, the
Adviser may appoint one or more agents to perform any of the functions and
services which are to be provided under the terms of the Agreement upon such
terms and conditions as may be mutually agreed upon among the Trust, the Adviser
and any such Agent.
10. The Adviser shall not be liable to the Trust or to any shareholder of
the Trust for any error of judgment or mistake of law or for any loss suffered
by the Trust or by any shareholder of the Trust in connection with the matters
to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the Adviser in the performance of its duties hereunder.
11. It is understood that:
(a) Trustees, officers, employees, agents and shareholders of the
Trust are or may be "interested persons" of the Adviser as directors,
officers, stockholders or otherwise;
(b) Trustees, officers, employees, agents and stockholders of the
Adviser are or may be "interested persons" of the Trust as Trustees,
officers, shareholders or otherwise; and
(c) The existence of any such dual interest shall not affect the
validity hereof or of any transactions hereunder.
12. This Agreement shall become effective with respect to each of the
Existing Series as of January 1, 1994 (the "Contract Date"), and, with respect
to any Additional Series, on the date specified in the notice to the Trust
from the Adviser in accordance with paragraph 2 hereof that the Adviser is
willing to serve as Adviser with respect to such Additional Series. Unless
terminated as herein provided, this Agreement shall remain in full force and
effect for a period of one year following the Contract Date, and, with respect
to each Additional Series, until the next anniversary of the Contract Date
following the date on which such Additional Series became subject to the terms
and conditions of this Agreement and shall continue in full force and effect for
periods of one year thereafter with respect to each Series so long as (a) such
continuance with respect to any such Series is approved at least annually by
either the Trustees or by a "vote of the majority of the outstanding voting
securities" of such Series and (b) the terms and any renewal of this Agreement
with respect to any such Series have been approved by a vote of a majority of
the Trustees who are not parties to this Agreement or "interested persons" of
any
- 4 -
<PAGE>
such party cast in person at a meeting called for the purpose of voting on such
approval; provided, however, that the continuance of this Agreement with respect
to each Additional Series is subject to its approval by a "vote of a majority of
the outstanding voting securities" of any such Additional Series on or before
the next anniversary of the Contract Date following the date on which such
Additional Series became a Series hereunder.
Any approval of this Agreement by a vote of the holders of a "majority of
the outstanding voting securities" of any Series shall be effective to continue
this Agreement with respect to any such Series notwithstanding (a) that this
Agreement has not been approved by a "vote of the majority of the outstanding
voting securities" of any other Series affected thereby and (b) that this
Agreement has not been approved by the holders of a "vote of a majority of the
outstanding voting securities" of the Trust, unless either such additional
approval shall be required by any other applicable law or otherwise.
13. The Trust may terminate this Agreement with respect to the Trust or to
any Series upon 60 days' written notice to the Adviser at any time, without the
payment of any penalty, by vote of the Trustees or, as to each Series, by a
"vote of a majority of the outstanding voting securities" of such Series. The
Adviser may terminate this Agreement with respect to any Series upon 60 days'
written notice to the Trust, without the payment of any penalty. This Agreement
shall immediately terminate in the event of its "assignment".
14. The terms "majority of the outstanding voting securities", "interested
persons" and "assignment" when used herein, shall have the respective meanings
specified in the Investment Company Act of 1940, as amended.
15. In the event of termination of this Agreement, or at the request of the
Adviser, the Trust will eliminate all reference to "Phoenix" from its name, and
will not thereafter transact business in a name using the word "Phoenix" in any
form or combination whatsoever, or otherwise use the word "Phoenix" as a part of
its name. The Trust will thereafter in all prospectuses, advertising materials,
letterheads, and other material designed to be read by investors or prospective
investors delete from the name the word "Phoenix" or any approximation thereof.
If the Adviser chooses to withdraw the Trust's right to use the word "Phoenix",
it agrees to submit the question of continuing this Agreement to a vote of the
Trust's shareholders at the time of such withdrawal.
16. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but bind only the trust property of
the Trust, as provided in the Declaration of Trust. The execution and delivery
of this Agreement have been authorized by the Trustee and shareholders of the
Trust and signed by the President of the Trust, acting as such, and neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
be binding upon or impose any liability on any of them personally, but shall
bind only the trust property of the Trust
- 5 -
<PAGE>
as provided in the Declaration of Trust. The Declaration of Trust, as amended,
is or shall be on file with the Secretary of The Commonwealth of Massachusetts.
17. This Agreement shall be construed and the rights and obligations of the
parties hereunder enforced in accordance with the laws of The Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
PHOENIX SERIES FUND
By: /s/ Philip R. McLoughlin
---------------------------------------
Philip R. McLoughlin, President
PHOENIX INVESTMENT COUNSEL, INC.
By: /s/ Patricia A. Bannan
---------------------------------------
Patricia A. Bannan, President
- 6 -
EXHIBIT 6.1
DISTRIBUTION AGREEMENT CLASS A
<PAGE>
DISTRIBUTION AGREEMENT
CLASS A SHARES
This AGREEMENT is made this 17th day of November, 1993, by and between
Phoenix Series Fund (the "Trust"), a Massachusetts business trust authorized to
issue shares of beneficial interest in separate series, and Phoenix Equity
Planning Corporation (the "Distributor"), a Connecticut corporation.
WITNESSETH THAT:
1. The Trust hereby grants to the Distributor the right to purchase Class A
shares of beneficial interest of each series of the Trust established and
designated as of the date hereof and of any additional series which the Trustees
may establish and designate during the term of this Agreement (collectively
called the "Series") and to resell Class A shares of each Series (collectively
called the "Shares") as principal and not as agent. The Distributor accepts such
appointment and agrees to render the services described in this Agreement for
the compensation herein provided.
2. The Distributor's right to purchase Shares shall be exclusive except that the
terms of this Agreement shall not apply to Shares issued or transferred:
a) pursuant to an offer of exchange exempted under Section 22(d) of the
Investment Company Act of 1940, as amended (the "Act") by reason of
the fact that said offer is permitted by Section 11 of the Act,
including any offer made pursuant to clause (1) or (2) of Section
11(b);
b) upon the sale to a registered unit investment trust which is the
issuer of periodic payment plan certificates the net proceeds of which
are invested in redeemable securities;
c) pursuant to an offer made solely to all registered holders of Shares,
or all registered holders of Shares of any Series, proportionate to
their holdings or proportionate to any cash distribution made to them
by the Trust (subject to appropriate qualifications designed solely to
avoid issuance of fractional securities);
d) in connection with any merger or consolidation of the Trust or of any
Series with any other investment company or the acquisition by the
Trust, by purchase or otherwise, of any other investment company;
e) pursuant to sales exempted from Section 22(d) of the Act, by rule or
regulation or order of the Securities and Exchange Commission as
provided in the then current registration statement of the Trust; or
f) in connection with the reinvestment by Trust shareholders of dividend
and capital gains distributions.
3. The "Net Asset Value" and the "Public Offering Price" of the Shares of each
Series as referred to in this Agreement shall be computed in accordance with the
provisions of the then current registration statement of the Trust. The
Distributor shall be notified promptly by the Trust of such computations.
<PAGE>
4. Each day the Distributor shall have the right to purchase from the Trust, as
principal, the amount of Shares of each Series needed to fill unconditional
orders for Shares of such Series received by the Distributor from dealers or
investors, but no more than the Shares needed, at a price equal to the Net Asset
Value of the Shares of such Series. Any purchase of Shares by the Distributor
under this Agreement shall be subject to reasonable adjustment for clerical
errors, delays and errors of transmission and cancellation of orders.
5. With respect to transactions other than with dealers, the Distributor will
sell Shares of each Series only at the Public Offering Price then in effect,
except to the extent that sales at less than the Public Offering Price may be
allowed by the Act, any rule or regulation promulgated thereunder or by order of
the Securities and Exchange Commission, provided, however, that any such sales
at less than the Public Offering Price shall be consistent with the terms of the
then current registration statement of the Trust. Any sale of Shares of each
Series to or through a person other than a dealer will be at the Public Offering
Price; however, the Distributor may pay a commission to such person equal to no
more than the difference between the Public Offering Price and the Net Asset
Value of those Shares. The Distributor will sell at Net Asset Value Shares of
any Series which are offered by the then current registration statement or
prospectus of the Trust of sale at such Net Asset Value.
6. Sales at a discount from the Public Offering Price shall be made in
accordance with the terms and conditions of uniform selling agreements allowing
such discounts. Such discounts shall not exceed the difference between the Net
Asset Value and the Public Offering Price.
7. The Trust shall furnish the Distributor with copies of its Declaration of
Trust, as amended from time to time. The Trust shall also furnish the
Distributor with any other documents of the Trust which will assist the
Distributor in the performance of its duties hereunder.
8. The Distributor agrees to use its best efforts (in states where it may
lawfully do so) to obtain from investors unconditional orders for Shares
authorized for issue by the Trust and registered under applicable Federal
securities laws, and, so long as it does so, nothing herein contained shall
prevent the Distributor from entering into similar arrangements with other
registered investment companies. The Distributor may, in the exercise of its
discretion, refuse to accept orders for Shares from any person.
9. Upon receipt by the Trust of a purchase order from the Distributor,
accompanied by proper applications for the purchase of Shares and delivery
instructions, the Trust shall, as promptly as practicable thereafter, cause
evidence of ownership of such Shares to be delivered as indicated in such
purchase order. Payment for such Shares shall be made by the Distributor to the
Trust in a manner acceptable to the Trust, provided that the Distributor shall
pay for such Shares no later than the tenth business day after the Distributor
shall have contracted to purchase such shares.
10. In connection with offering for sale and selling Shares, the Trust
authorizes the Distributor to give only such information and to make only such
statements or representations as are contained in the then current registration
statement of the Trust or in then current sales literature or advertisements.
11. The Trust agrees to pay the following expenses:
a) the cost of mailing stock certificates representing Shares;
b) fees and expenses (including legal expenses) of registering and
maintaining registrations of the Trust and of each Series with the
Securities and Exchange Commission including the preparation and
printing of registration statements and prospectuses for filing with
said Commission;
<PAGE>
c) fees and expenses (including legal expenses) incurred in registering
and qualifying Shares for sale with any state regulatory agency and
fees and expenses of maintaining, renewing, increasing or amending
such registrations and qualifications;
d) the expense of any issue or transfer taxes upon the sale of Shares to
the Distributor by the Trust; and
e) the cost of preparing and distributing reports and notices to
shareholders.
12. The Distributor agrees to pay the following expenses:
a) all expenses of printing prospectuses and statements of additional
information sued in connection with the sale of Shares and printing
and preparing all other sales literature;
b) all fees and expenses in connection with the qualification of the
Distributor as a dealer in the various states and countries;
c) the expense of any stock transfer tax required in connection with the
sale of Shares by the Distributor as principal to dealers or to
investors; and
d) all other expenses in connection with offering for sale and the sale
of Shares which have not been herein specifically allocated to the
Trust.
13. The Trust hereby appoints the Distributor its agent to receive requests to
accept the Trust's offer to repurchase Shares upon such terms and conditions as
may be described in the Trust's then current registration statement. The agency
granted in this paragraph 13 is terminable at the discretion of the Trust.
14. The Trust agrees to indemnify and hold harmless the Distributor, its
officers and directors and each person, if any, who controls the Distributor
within the meaning of section 15 of the Securities Act of 1933, as amended,
against any losses, claims, damages, liabilities and expenses (including the
cost of any legal fees incurred in connection therewith) which the Distributor,
its officers, directors or any such controlling person may incur under said Act,
under any other statute, at common law or otherwise, arising out of or based
upon
a) any untrue statement or alleged untrue statement of a material fact
contained in the Trust's registration statement or prospectus
(including amendments and supplements thereto), or
b) any omission or alleged omission to state a material fact required to
be stated in the Trust's registration statement or prospectus or
necessary to make the statements in either not misleading, provided,
however, that insofar as losses, claims, damages, liabilities or
expenses arise out of or are based upon any such untrue statement or
omission or alleged untrue statement or omission made in reliance and
in conformity with information furnished to the Trust by the
Distributor for use in the Trust's registration statement or
prospectus, such indemnification is not applicable. In no case shall
the Trust indemnify the Distributor or its controlling persons as to
any amounts incurred for any liability arising out of or based upon
any action for which the Distributor, its officers and directors or
any controlling person would otherwise be subject to liability by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of the reckless disregard of
its obligations and duties under this Agreement.
15. The Distributor agrees to indemnify and hold harmless the Trust, its
officers and trustees and each person, if any, who controls the Trust within the
meaning of Section 15 of the Securities Act of 1933, as
<PAGE>
amended, against any losses, claims, damages, liabilities and expenses
(including the cost of any legal fees incurred in connection therewith) which
the Trust, its officers, trustees or any such controlling person any incur under
said Act, under any other statute, at common law or otherwise arising out of the
acquisition of any shares by any person which
a) may be based upon any wrongful act by the Distributor or any of its
employees or representatives, or
b) may be based upon any untrue statement or alleged untrue statement of
a material fact contained in the Trust's registration statement or
prospectus (including amendments and supplements thereto), or any
omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon
information furnished or confirmed in writing to the Trust by the
Distributor.
16. It is understood that;
a) trustees, officers, employees, agents and shareholders of the Trust
are or may be interested persons, as that term is defined in the Act
("Interested Persons"), of the Distributor as directors, officers,
stockholders or otherwise;
b) directors, officers, employees, agents and stockholders of the
Distributor are or may be Interested Persons of the Trust as trustees,
officers, shareholders or otherwise;
c) the Distributor may be an Interested Person of the Trust as
shareholder or otherwise; and
d) the existence of any such dual interest shall not offset the validity
hereof or of any transactions hereunder.
17. The Trust may terminate this Agreement by 60 days written notice to the
Distributor at any time, without the payment of any penalty, by vote of the
Trustees or by a vote of a majority of the outstanding voting securities, as
that term is defined in the Act, of the Trust. The Distributor may terminate
this Agreement by 60 days written notice to the Trust, without the payment of
any penalty. This Agreement shall immediately terminate in the event of its
assignment, as that term is defined in the Act.
18. Subject to prior termination as provided in paragraph 17, this Agreement
shall continue in force for one year from the date of execution and from year to
year thereafter so long as the continuance after such one year period shall be
specifically approved at least annually by vote of the Trustees, or by a vote of
a majority of the Class A outstanding voting securities, as that term is defined
in the Act, of the Trust. Additionally, each annual renewal of this Agreement
must be approved by the vote of a majority of the Trustees who are not parties
to the Agreement or Interested Persons of any such party, cast in person at a
meeting of the Trustees called for the purpose of voting on such approval.
19. It is expressly agreed that the obligations of the Trust hereunder shall not
be binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust. The execution and delivery of
this Agreement by the President of the Trust has been authorized by the Trustees
acting as such, and neither such execution and delivery by such officer nor such
authorization by such Trustees shall be deemed to have been made by any of them
individually or be binding upon or impose any liability on any of them
personally, but shall bind only the
<PAGE>
trust property of the Trust as provided in the Declaration of Trust. The
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts.
20. This Agreement shall become effective upon the date first set forth above.
This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts and shall be binding on the successors and assigns of the parties
to the extend permitted by law.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first written above.
PHOENIX SERIES FUND
By: /s/ Philip R. McLoughlin
--------------------------
President
PHOENIX EQUITY PLANNING
CORPORATION
By: /s/ Martin J. Gavin
--------------------------
EXHIBIT 6.2
DISTRIBUTION AGREEMENT CLASS B
<PAGE>
DISTRIBUTION AGREEMENT
CLASS B SHARES
This AGREEMENT is made this 17th day of November, 1993, by and between
Phoenix Series Fund (the "Trust"), a Massachusetts business trust authorized to
issue shares of beneficial interest in separate series, and Phoenix Equity
Planning Corporation (the "Distributor"), a Connecticut corporation.
WITNESSETH THAT:
1. The Trust hereby grants to the Distributor the right to purchase Class B
shares of beneficial interest of each series of the Trust established and
designated as of the date hereof and of any additional series which the Trustees
may establish and designate during the term of this Agreement (collectively
called the "Series") and to resell Class B shares of each Series (collectively
called the "Shares") as principal and not as agent. The Distributor accepts such
appointment and agrees to render the services described in this Agreement for
the compensation herein provided.
2. The Distributor's right to purchase Shares shall be exclusive except that the
terms of this Agreement shall not apply to Shares issued or transferred:
a) pursuant to an offer of exchange exempted under Section 22(d) of the
Investment Company Act of 1940, as amended (the "Act") by reason of
the fact that said offer is permitted by Section 11 of the Act,
including any offer made pursuant to clause (1) or (2) of Section
11(b);
b) upon the sale to a registered unit investment trust which is the
issuer of periodic payment plan certificates the net proceeds of which
are invested in redeemable securities;
c) pursuant to an offer made solely to all registered holders of Shares,
or all registered holders of Shares of any Series, proportionate to
their holdings or proportionate to any cash distribution made to them
by the Trust (subject to appropriate qualifications designed solely to
avoid issuance of fractional securities);
d) in connection with any merger or consolidation of the Trust or of any
Series with any other investment company or the acquisition by the
Trust, by purchase or otherwise, of any other investment company;
e) pursuant to sales exempted from Section 22(d) of the Act, by rule or
regulation or order of the Securities and Exchange Commission as
provided in the then current registration statement of the Trust; or
f) in connection with the reinvestment by Trust shareholders of dividend
and capital gains distributions.
3. The "Net Asset Value" and the "Public Offering Price" of the Shares of each
Series as referred to in this Agreement shall be computed in accordance with the
provisions of the then current registration statement of the Trust. The
Distributor shall be notified promptly by the Trust of such computations.
4. Each day the Distributor shall have the right to purchase from the Trust, as
principal, the amount of Shares of each Series needed to fill unconditional
orders for Shares of such Series received by the Distributor from dealers or
investors, but no more than the Shares needed, at a price equal to the Net Asset
Value of the Shares of such Series. Any purchase of Shares by the Distributor
under this Agreement shall be subject to reasonable adjustment for clerical
errors, delays and errors of transmission and cancellation of orders.
5. With respect to transactions other than with dealers, the Distributor will
sell Shares of each Series only at the Public Offering Price then in effect,
except to the extent that sales at less than the Public Offering Price may be
allowed by the Act, any rule or regulation promulgated thereunder or by order of
the Securities and Exchange Commission, provided, however, that any such sales
at less than the Public Offering Price shall be consistent with the terms of the
then current registration statement of the Trust. Any sale of Shares of each
Series to or through a person other than a dealer will be at the Public Offering
Price; however, the Distributor may pay a commission to such person equal to no
more than the difference between the Public Offering Price and the Net Asset
Value of those Shares. The Distributor will sell at Net Asset Value Shares of
any Series which are offered by the then current registration statement or
prospectus of the Trust of sale at such Net Asset Value.
<PAGE>
6. Sales at a discount from the Public Offering Price shall be made in
accordance with the terms and conditions of uniform selling agreements allowing
such discounts. Such discounts shall not exceed the difference between the Net
Asset Value and the Public Offering Price.
7. The Trust shall furnish the Distributor with copies of its Declaration of
Trust, as amended from time to time. The Trust shall also furnish the
Distributor with any other documents of the Trust which will assist the
Distributor in the performance of its duties hereunder.
8. The Distributor agrees to use its best efforts (in states where it may
lawfully do so) to obtain from investors unconditional orders for Shares
authorized for issue by the Trust and registered under applicable Federal
securities laws, and, so long as it does so, nothing herein contained shall
prevent the Distributor from entering into similar arrangements with other
registered investment companies. The Distributor may, in the exercise of its
discretion, refuse to accept orders for Shares from any person.
9. Upon receipt by the Trust of a purchase order from the Distributor,
accompanied by proper applications for the purchase of Shares and delivery
instructions, the Trust shall, as promptly as practicable thereafter, cause
evidence of ownership of such Shares to be delivered as indicated in such
purchase order. Payment for such Shares shall be made by the Distributor to the
Trust in a manner acceptable to the Trust, provided that the Distributor shall
pay for such Shares no later than the tenth business day after the Distributor
shall have contracted to purchase such shares.
10. In connection with offering for sale and selling Shares, the Trust
authorizes the Distributor to give only such information and to make only such
statements or representations as are contained in the then current registration
statement of the Trust or in then current sales literature or advertisements.
11. The Trust agrees to pay the following expenses:
a) the cost of mailing stock certificates representing Shares;
b) fees and expenses (including legal expenses) of registering and
maintaining registrations of the Trust and of each Series with the
Securities and Exchange Commission including the preparation and
printing of registration statements and prospectuses for filing with
said Commission;
c) fees and expenses (including legal expenses) incurred in registering
and qualifying Shares for sale with any state regulatory agency and
fees and expenses of maintaining, renewing, increasing or amending
such registrations and qualifications;
d) the expense of any issue or transfer taxes upon the sale of Shares to
the Distributor by the Trust; and
e) the cost of preparing and distributing reports and notices to
shareholders.
12. The Distributor agrees to pay the following expenses:
a) all expenses of printing prospectuses and statements of additional
information sued in connection with the sale of Shares and printing
and preparing all other sales literature;
b) all fees and expenses in connection with the qualification of the
Distributor as a dealer in the various states and countries;
c) the expense of any stock transfer tax required in connection with the
sale of Shares by the Distributor as principal to dealers or to
investors; and
d) all other expenses in connection with offering for sale and the sale
of Shares which have not been herein specifically allocated to the
Trust.
13. The Trust hereby appoints the Distributor its agent to receive requests to
accept the Trust's offer to repurchase Shares upon such terms and conditions as
may be described in the Trust's then current registration statement. The agency
granted in this paragraph 13 is terminable at the discretion of the Trust.
14. The Trust agrees to indemnify and hold harmless the Distributor, its
officers and directors and each person, if any, who controls the Distributor
within the meaning of section 15 of the Securities Act of 1933, as amended,
against any losses, claims,
<PAGE>
damages, liabilities and expenses (including the cost of any legal fees incurred
in connection therewith) which the Distributor, its officers, directors or any
such controlling person may incur under said Act, under any other statute, at
common law or otherwise, arising out of or based upon
a) any untrue statement or alleged untrue statement of a material fact
contained in the Trust's registration statement or prospectus
(including amendments and supplements thereto), or
b) any omission or alleged omission to state a material fact required to
be stated in the Trust's registration statement or prospectus or
necessary to make the statements in either not misleading, provided,
however, that insofar as losses, claims, damages, liabilities or
expenses arise out of or are based upon any such untrue statement or
omission or alleged untrue statement or omission made in reliance and
in conformity with information furnished to the Trust by the
Distributor for use in the Trust's registration statement or
prospectus, such indemnification is not applicable. In no case shall
the Trust indemnify the Distributor or its controlling persons as to
any amounts incurred for any liability arising out of or based upon
any action for which the Distributor, its officers and directors or
any controlling person would otherwise be subject to liability by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of the reckless disregard of
its obligations and duties under this Agreement.
15. The Distributor agrees to indemnify and hold harmless the Trust, its
officers and trustees and each person, if any, who controls the Trust within the
meaning of Section 15 of the Securities Act of 1933, as amended, against any
losses, claims, damages, liabilities and expenses (including the cost of any
legal fees incurred in connection therewith) which the Trust, its officers,
trustees or any such controlling person any incur under said Act, under any
other statute, at common law or otherwise arising out of the acquisition of any
shares by any person which
a) may be based upon any wrongful act by the Distributor or any of its
employees or representatives, or
b) may be based upon any untrue statement or alleged untrue statement of
a material fact contained in the Trust's registration statement or
prospectus (including amendments and supplements thereto), or any
omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon
information furnished or confirmed in writing to the Trust by the
Distributor.
16. It is understood that;
a) trustees, officers, employees, agents and shareholders of the Trust
are or may be interested persons, as that term is defined in the Act
("Interested Persons"), of the Distributor as directors, officers,
stockholders or otherwise;
b) directors, officers, employees, agents and stockholders of the
Distributor are or may be Interested Persons of the Trust as trustees,
officers, shareholders or otherwise;
c) the Distributor may be an Interested Person of the Trust as
shareholder or otherwise; and
d) the existence of any such dual interest shall not offset the validity
hereof or of any transactions hereunder.
17. The Trust may terminate this Agreement by 60 days written notice to the
Distributor at any time, without the payment of any penalty, by vote of the
Trustees or by a vote of a majority of the outstanding voting securities, as
that term is defined in the Act, of the Trust. The Distributor may terminate
this Agreement by 60 days written notice to the Trust, without the payment of
any penalty. This Agreement shall immediately terminate in the event of its
assignment, as that term is defined in the Act.
18. Subject to prior termination as provided in paragraph 17, this Agreement
shall continue in force for one year from the date of execution and from year to
year thereafter so long as the continuance after such one year period shall be
specifically approved at least annually by vote of the Trustees, or by a vote of
a majority of the Class B outstanding voting securities, as that term is defined
in the Act, of the Trust. Additionally, each annual renewal of this Agreement
must be approved by the vote of a majority of the Trustees who are not parties
to the Agreement or Interested Persons of any such party, cast in person at a
meeting of the Trustees called for the purpose of voting on such approval.
19. It is expressly agreed that the obligations of the Trust hereunder shall not
be binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the
<PAGE>
Declaration of Trust. The execution and delivery of this Agreement by the
President of the Trust has been authorized by the Trustees acting as such, and
neither such execution and delivery by such officer nor such authorization by
such Trustees shall be deemed to have been made by any of them individually or
be binding upon or impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in the Declaration of
Trust. The Declaration of Trust is on file with the Secretary of The
Commonwealth of Massachusetts.
20. This Agreement shall become effective upon the date first set forth above.
This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts and shall be binding on the successors and assigns of the parties
to the extend permitted by law.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first written above.
PHOENIX SERIES FUND
By: /s/ Philip R. McLoughlin
------------------------
President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Martin J. Gavin
------------------------
fund\665
EXHIBIT 8.2
AMENDMENT TO CUSTODIAN AGREEMENT
<PAGE>
AMENDMENT dated October 24, 1991, of a certain Custodian Agreement dated
March 10, 1988, (the "Custodian Agreement") between Phoenix Series Fund (the
"Fund") and State Street Bank and Trust Company (the "Custodian").
WITNESSETH:
WHEREAS, the Fund and the Custodian desire to amend the Custodian Agreement
in order to provide for the lending of securities;
NOW, THEREFORE, the Fund and the Custodian hereby agree that said Custodian
Agreement shall be amended by adding the following new Section 21:
Loans of Securities. As directed in writing by the Fund, the Custodian
shall participate in a securities lending program sponsored and administered by
the Custodian (the "Program"), and in connection therewith, the Custodian is
authorized to release and deliver securities and return collateral received for
loaned securities in accordance with the provisions of the Securities Lending
Authorization Agreement between the Custodian and the Fund.
IN WITNESS WHEREOF, the Fund and the Custodian have caused this amendment
to be executed and their seals affixed by their duly authorized representative,
as of the day and year first above written.
PHOENIX SERIES FUND
ATTEST: /s/ Patricia O. McLaughlin By: /s/ Philip R. McLoughlin
--------------------------- ------------------------------
Title: Assistant Secretary Title: President
STATE STREET BANK AND TRUST COMPANY
ATTEST: /s/ Denise M. Comeau By: /s/ Charles R. Whittenmore Jr.
--------------------------- ------------------------------
Title: Assistant Secretary Title: Vice President
EXHIBIT 8.3
AMENDMENT TO CUSTODIAN AGREEMENT
<PAGE>
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and Phoenix Series Fund (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated March 10, 1988 as amended October 24, 1991 (the "Custodian Contract")
governing the terms and conditions under which the Custodian maintains custody
of the securities and other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by book-entry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this 17th day of October, 1996.
PHOENIX SERIES FUND
By: /s/ Michael E. Haylon
------------------------------
Title: Executive Vice President
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ronald E. Logue
------------------------------
Title: Executive Vice President
EXHIBIT 9.1
TRANSFER AGENCY AND SERVICE AGREEMENT
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
between
PHOENIX FUNDS
and
PHOENIX EQUITY PLANNING CORPORATION
<PAGE>
Table of Contents
Page
Article 1 - Terms of Appointment; Duties of Transfer Agent.......... 1
Article 2 - Fees and Expenses....................................... 3
Article 3 - Representations and Warranties of Transfer Agent........ 3
Article 4 - Representations and Warranties of the Phoenix Funds..... 3
Article 5 - Data Access and Proprietary Information................. 4
Article 6 - Indemnification......................................... 5
Article 7 - Standard of Care........................................ 6
Article 8 - Covenants.............................................. 6
Article 9 - Termination............................................. 7
Article 10 - Assignment.............................................. 7
Article 11 - Amendment............................................... 7
Article 12 - Connecticut Law to Apply................................. 7
Article 13 - Force Majeure............................................ 7
Article 14 - Consequential Damages................................... 8
Article 15 - Merger of Agreement..................................... 8
Article 16 - Limitations of Liability of the Trustees
and Shareholders........................................ 8
Article 17 - Counterparts............................................ 8
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of June, 1994, by and between the
undersigned entities (hereinafter singularly referred to as a "Fund" and
collectively referred to as the "Phoenix Funds"), and PHOENIX EQUITY PLANNING
CORPORATION (hereinafter referred to as the "Transfer Agent").
W I T N E S S E T H:
WHEREAS, the Phoenix Funds desire to appoint Transfer Agent as their
transfer agent, dividend disbursing agent and agent in connection with certain
other activities, and Transfer Agent desires to accept such appointment; and
WHEREAS, the parties wish to set forth herein their mutual understandings
and agreements.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt and sufficiency whereof
being hereby acknowledged and affirmed, the parties hereto agree as follows:
Article 1 Terms of Appointment; Duties of Transfer Agent
Article 1 Terms of Appointment; Duties of Transfer Agent
1.01 Subject to the terms and conditions set forth in this Agreement, the
Phoenix Funds hereby employ and appoint Transfer Agent to act as, and Transfer
Agent agrees to act as, transfer agent for the authorized and issued shares of
beneficial interest or common stock, as the case may be, of each of the Phoenix
Funds (hereinafter collectively and singularly referred to as "Shares"),
dividend disbursing agent and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of the Phoenix Funds
("Shareholders") and as set out in the currently effective registration
statement of each Fund (the prospectus and statement of additional information
portions of such registration statement being referred to as the "Prospectus"),
including, without limitation, any periodic investment plan or periodic
withdrawal program.
1.02 Transfer Agent agrees that it will perform the following services
pursuant to this Agreement:
(a) In accordance with procedures established from time to time by
agreement between the Phoenix Funds and Transfer Agent, Transfer Agent shall:
i) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation therefor
to the Custodian appointed from time to time by the
Trustees/Directors of each Fund (which entity or entities, as the
case may be, shall be referred to as the "Custodian");
ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the each appropriate Shareholder
account;
iii) Receive for acceptance, redemption requests and redemption
directions and deliver the appropriate documentation therefor to
the Custodian;
iv) In respect to the transactions in items (i), (ii) and (iii)
above, the Transfer Agent shall execute transactions directly
with broker-dealers authorized by the Phoenix Funds who shall
thereby be deemed to be acting on behalf of the Phoenix Funds;
v) At the appropriate time as and when it receives monies paid to it
by any Custodian with respect to any redemption, pay over or
cause to be paid over in the appropriate manner such monies as
instructed by the redeeming Shareholders;
vi) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
vii) Prepare and transmit payments for dividends and distributions
declared by each Fund, if any;
viii) Issue replacement certificates for those certificates alleged to
have been lost, stolen or destroyed upon receipt by the Transfer
Agent of indemnification satisfactory to the Transfer Agent and
the Phoenix Funds, and the Transfer Agent at its option, may
issue replacement certificates in place of mutilated stock
certificates upon presentation thereof and without such
indemnity;
<PAGE>
ix) Maintain records of account for and advise each Fund and its
respective Shareholders as to the foregoing; and
x) Record the issuance of Shares and maintain pursuant to Rule
17Ad-10(e) under the Exchange Act of 1934, a record of the total
number of Shares which are authorized, issued and outstanding
based upon data provided to it by each Fund. The Transfer Agent
shall also provide on a regular basis to each Fund the total
number of Shares which are authorized, issued and outstanding
shall have no obligation, when recording the issuance of Shares,
to monitor the issuance of such Shares or to take cognizance of
any laws relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of each respective
Fund.
(b) In addition to and not in lieu of the services set forth in the above
paragraph (a), Transfer Agent shall: (i) perform all of the customary services
of a transfer agent, dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal program),
including, but not limited to, maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, receiving and tabulating proxies,
mailing Shareholder reports and Prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts, preparing
and filing U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, preparing and mailing activity
statements for Shareholders, and providing Shareholder account information; and
(ii) provide a system which will enable each Fund to monitor the total number of
Shares sold in each State.
(c) In addition, the Phoenix Funds shall (i) identify to Transfer Agent in
writing those transactions and assets to be treated as exempt from blue sky
reporting for each State, and (ii) verify the establishment of transactions for
each State on the system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of Transfer Agent for a Fund's blue
sky State registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Phoenix Funds and the
reporting of such transactions to each Fund as provided above.
(d) Procedures as to who shall provide certain of the services in Article 1
may be established from time to time by agreement between the Phoenix Funds and
Transfer Agent per the attached service responsibility schedule, if any. The
Transfer Agent may at times perform only a portion of these services and the
Phoenix Funds or its agent may perform these services on behalf of any Fund.
(e) The Transfer Agent shall provide additional services on behalf of the
Phoenix Funds (i.e., escheatment services) which may be agreed upon in writing
between the Phoenix Funds and the Transfer Agent.
Article 2 Fees and Expenses
2.01 In consideration of the services provided by the Transfer Agent
pursuant to this Agreement, each Fund agrees to pay Transfer Agent an annual
maintenance fee for each Shareholder account as set forth in Schedule A attached
hereto and made a part hereof. Annual Maintenance Fees and out-of-pocket
expenses and advances identified under Section 2.02 below may be changed from
time to time subject to mutual written agreement between each Fund and Transfer
Agent. Nothing herein shall preclude the assignment of all or any portion of the
foregoing fees and expense reimbursements to any sub-agent contracted by
Transfer Agent.
2.02 In addition to the fee paid under Section 2.01 above, the Phoenix
Funds agree to reimburse Transfer Agent for out-of-pocket expenses or advances
incurred by Transfer Agent for the items set out in Schedule A attached hereto.
In addition, any other expenses incurred by Transfer Agent at the request or
with the consent of any Fund, will be reimbursed by the Fund requesting the
same.
2.03 The Phoenix Funds agree to pay all fees and reimbursable expenses
within five days following the mailing of the respective billing notice. The
above fees will be charged against each Fund's custodian checking account five
(5) days after the invoice is transmitted to the Phoenix Funds. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
Shareholder accounts shall be advanced to Transfer Agent at least seven (7) days
prior to the mailing date of such materials.
Article 3 Representations and Warranties of Transfer Agent
The Transfer Agent represents and warrants to the Phoenix Funds that:
3.01 It is a corporation organized and existing and in good standing under
the laws of the State of Connecticut.
<PAGE>
3.02 It is empowered under applicable laws and by its charter and by-laws
to enter into and perform this Agreement.
3.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.04 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
3.05 It is and shall continue to be a duly registered transfer agent
pursuant to Section 17A(c)(2) of the Securities Exchange Act of 1934.
Article 4 Representations and Warranties of Phoenix Funds
The Phoenix Funds represent and warrant to Transfer Agent that:
4.01 All corporate or trust proceedings, as the case may be, required to
enter into and perform this Agreement have been undertaken and are in full force
and effect.
4.02 Each Fund is an open-end, diversified management investment companies
registered under the Investment Company Act of 1940.
4.03 A registration statement under the Securities Act of 1933 is currently
effective for each Fund that is offering its securities for sale and such
registration statement will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect to all
Shares being offered for sale.
Article 5 Data Access and Proprietary Information
5.01 The Phoenix Funds acknowledge that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and documentation
manuals furnished to the Phoenix Funds by the Transfer Agent as part of each
Fund's ability to access certain Fund-related data ("Customer Data") maintained
by the Transfer Agent on data bases under the control and ownership of the
Transfer Agent or other third party ("Data Access Services") constitute
copyrighted, trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to the Transfer Agent or other
third party. In no event shall Proprietary Information be deemed Customer Data.
The Phoenix Funds agree to treat all Proprietary Information as proprietary to
the Transfer Agent and further agree that it shall not divulge any Proprietary
Information to any person or organization except as may be provided hereunder.
Without limiting the foregoing, the Phoenix Funds agree for itself and its
employees and agents:
(a) to access Customer Data solely from location as may be designated in
writing by the Transfer Agent and solely in accordance with the
Transfer Agent's applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained,
to inform in a timely manner of such fact and dispose of such
information in accordance with the Transfer Agent's instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer facility or
other location, except with the prior written consent of the Transfer
Agent;
(e) that the Phoenix Funds shall have access only to those authorized
transactions agreed upon by the parties; and
(f) to honor all reasonable written requests made by the Transfer Agent to
protect at the Transfer Agent's expense the rights of the Transfer
Agent in Proprietary Information at common law, under federal
copyright law and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Article 5. The obligations of this Article shall
survive any earlier termination of this Agreement.
<PAGE>
5.02 If the Phoenix Funds notified the Transfer Agent that any of the Data
Access Services do not operate in material compliance with the most recently
issued user documentation for such services, the Transfer Agent shall endeavor
in a timely manner to correct such failure. Organizations from which the
Transfer Agent may obtain certain data included in the Data Access Services are
solely responsible for the contents of such data and the Phoenix Funds agree to
make no claim against the Transfer Agent arising out of the contents of such
third-party data, including, but not limited to, the accuracy thereof. DATA
ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN
CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE TRANSFER
AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
5.03 If the transactions available to the Phoenix Funds include the ability
to originate electronic instructions to the Transfer Agent in order to (i)
effect the transfer or movement of cash or Shares or (ii) transmit Shareholder
information or other information (such transactions constituting a "COEFI"),
then in such event the Transfer Agent shall be entitled to rely on the validity
and authenticity of such instruction without undertaking any further inquiry as
long as such instruction is undertaken in conformity with security procedures
established by the Transfer Agent from time to time.
Article 6 Indemnification
6.01 The Transfer Agent shall not be responsible for, and the Phoenix Funds
shall indemnify and hold Transfer Agent harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to:
(a) All actions of Transfer Agent or its agent or subcontractors required
to be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The lack of good faith, negligence or willful misconduct by the Phoenix
Funds which arise out of the breach of any representation or warranty of the
Phoenix Funds hereunder.
(c) The reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records and documents which (i) are received by
Transfer Agent or its agents or subcontractors, and (ii) have been prepared,
maintained or performed by the Phoenix Funds or any other person or firm on
behalf of the Phoenix Funds including but not limited to any previous transfer
agent or registrar.
(d) The reliance on, or the carrying out by Transfer Agent or its agents or
subcontractors of any instructions or requests of the Phoenix Funds.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or regulations of
any state that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such Shares in such state.
6.02 Transfer Agent shall indemnify and hold each of the Phoenix Funds
harmless from and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of or attributable to any
action or failure or omission to act by Transfer Agent, or any sub-agent, as a
result of Transfer Agent's, or such sub-agent's, lack of good faith, negligence
or willful misconduct.
6.03 At any time the Transfer Agent may apply to any officer of the Phoenix
Funds for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by Transfer Agent
under this Agreement, and Transfer Agent and its agents or subcontractors shall
not be liable and shall be indemnified by the Phoenix Funds for any action taken
or omitted by it in reliance upon such instructions or upon the opinion of such
counsel. The Transfer Agent, its agents and subcontractors shall be protected
and indemnified in acting upon any paper or document furnished by or on behalf
of the Phoenix Funds, reasonably believed to be genuine and to have been signed
by the proper person or persons, or upon any instruction, information, data,
records or documents provided Transfer Agent or its agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means authorized
by the Phoenix Funds, and shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof from the
Phoenix Funds. Transfer Agent, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the officers of
any Fund, and the proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
<PAGE>
6.04 In order that the indemnification provisions contained in this Article
6 shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6.05 Transfer Agent hereby expressly acknowledges that recourse against any
of the Phoenix Funds, if any, shall be subject to those limitations provided by
governing law and the Declaration of Trust of the Phoenix Funds, as applicable,
and agrees that obligations assumed by the Phoenix Funds hereunder shall be
limited in all cases to the Phoenix Funds and their respective assets. Transfer
Agent shall not seek satisfaction of any such obligation from the shareholders
or any shareholder of the Phoenix Funds, nor shall the Transfer Agent seek
satisfaction of any obligations from the Trustees/Directors or any individual
Trustee/Director of the Phoenix Funds.
Article 7 Standard of Care
7.01 The Transfer Agent shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility and shall
not be liable for loss or damage due to errors unless said errors are caused by
its negligence, bad faith, or willful misconduct of that of its employees.
Article 8 Covenants
8.01 The Phoenix Funds shall promptly furnish to Transfer Agent the
following:
(a) A certified copy of the resolution of its Trustees/Directors
authorizing the appointment of Transfer Agent and the execution and delivery of
this Agreement.
(b) A copy of the Declaration of Trust or Articles of Incorporation, as the
case may be, and By-Laws, if any, and all amendments thereto of each Fund.
8.02 The Transfer Agent hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Phoenix Funds for safekeeping of
stock certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
8.03 The Transfer Agent shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, Transfer Agent agrees that all such records prepared
or maintained by Transfer Agent relating to the services to be performed by
Transfer Agent hereunder are the property of each respective Fund and will be
preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to each respective Fund on and in
accordance with its request.
8.04 The parties agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person, except
as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records, Transfer Agent will endeavor to notify the affected Fund
and to secure instructions from an authorized officer of such Fund as to such
inspection. Transfer Agent reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
Article 9 Termination
9.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. The parties mutually acknowledge
that the termination of this Agreement by one, but not each Fund shall not
effect a termination of this Agreement as to any and all other Phoenix Fund(s)
which have not terminated the Agreement.
9.02 Should any Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the terminating Fund. Additionally, Transfer Agent reserves the right to charge
any other reasonable expenses associated with such termination and/or a charge
equivalent to the average of three (3) months' fees to the terminating Fund.
<PAGE>
Article 10 Assignment
10.01 Except as provided in Section 10.03 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
10.03 The Transfer Agent may, without further consent on the part of any of
the Phoenix Funds, subcontract for the performance hereof with one or more
sub-agents; provided, however, that Transfer Agent shall be as fully responsible
to each Fund for the acts and omissions of any subcontractor as it is for its
own acts and omissions.
Article 11 Amendment
11.01 This Agreement may be amended or modified by a written agreement
executed by the parties and authorized or approved by a resolution of the
Trustees/Directors of each respective Fund.
Article 12 Connecticut Law to Apply
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Connecticut.
Article 13 Force Majeure
13.01 In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
Article 14 Consequential Damages
14.01 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
Article 15 Merger of Agreement
15.01 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
15.02 This Agreement shall not be merged with or construed in conjunction
with any other current or future agreement between the Phoenix Funds (including
any Fund) and Phoenix Equity Planning Corporation, each and all of which
agreements shall at all times remain separate and distinct.
Article 16 Limitations of Liability of the Trustees and Shareholders
16.01 For the Funds which that are formed as Massachusetts business trusts,
notice is hereby given that the Agreement and Declaration of such Trusts are on
file with the Secretary of the Commonwealth of Massachusetts and was executed on
behalf of the Trustees of such Trusts as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees or
Shareholders individually but are binding only upon the assets and property of
each Fund.
Article 17 Counterparts
17.01 This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
Phoenix Asset Reserve
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Equity Opportunities Fund
Phoenix Income and Growth Fund
Phoenix Multi-Portfolio Fund
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Series Fund
Phoenix Total Return Fund, Inc.
Phoenix Worldwide Opportunities Fund
By: /s/ Philip R. McLoughlin
---------------------------
Name: Philip R. McLoughlin
Title: President
ATTEST:
By: /s/ Richard Wirth
-------------------------
Name: Richard Wirth
Title: Assistant Secretary
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Martin J. Gavin
----------------------------
Executive Vice President
ATTEST:
By: /s/ Patricia O. McLaughlin
-------------------------
Name: Patricia O. McLaughlin
Title: Assistant Secretary
<PAGE>
Schedule A
Fee Schedule
Annual Maintenance Fees shall be based on the following formula:
AMF(Fund) = BAMF x SA
where, AMFFund refers to the aggregate Annual Maintenance Fee levied
against each respective Fund,
BAMF refers to the Base Annual Maintenance Fee levied against each
respective Fund for each shareholder account, as more particularly
described below, at the basic annual per account rate of $19.25 for daily
dividend accounts and $14.95 for non-daily dividend accounts, and
SA refers to the number of Shareholder Accounts subject to the terms
of this Agreement and any and all sub-transfer agent agreements which
presently or hereafter may be entered into by the Transfer Agent. For the
purpose of computing the foregoing, the Transfer Agent will ascertain the
number of Shareholders of each Fund regardless of whether any such Shares
are held in accordance with any pooled or omnibus accounts or arrangement
managed or controlled by any entity, broker/dealer or sub-transfer agent.
Other Fees
o Omnibus Accounts, Per Transaction $2.50
o Closed Accounts, per Account, per month $0.20
o Check writing Fees:
-- Privilege set-up $5.00
-- Per Cleared Check $1.00
Out-of-Pocket Expenses
Out-of-pocket expenses include, but are not limited to: confirmation production,
postage, forms, telephone, microfilm, microfiche, stationary and supplies billed
as .1122% of postage costs and expenses incurred at the specific direction of
any Fund. Postage for mass mailings is due seven days in advance of the mailing
date.
EXHIBIT 9.2
FINANCIAL AGENT AGREEMENT
<PAGE>
FINANCIAL AGENT AGREEMENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, CT 06083-2200
May 25, 1994
Gentlemen:
1. Each of the undersigned mutual funds (hereinafter collectively and
singularly referred to as the "Fund") hereby appoints you, subject to your
acceptance, as Financial Agent subject to the terms and conditions set forth
below, effective January 1, 1994. You shall keep the books of each Fund and
compute the daily net asset value of shares of each Fund in accordance with
instructions received from time to time from the Board of Directors/Trustees of
each Fund; which instructions shall be certified to you by each Fund's
Secretary. You shall report such net asset value so determined to each Fund and
shall perform such other services as may be requested from time to time by each
or any Fund as are reasonably incidental to your duties as Financial Agent.
2. You shall be obligated to maintain, for the periods and in the places
required by Rule 31a-2 under the Investment Company Act of 1940, as amended,
those books and records maintained by you as Financial Agent. Such books and
records are the property of each respective Fund and shall be surrendered
promptly to the appropriate Fund upon its request. Furthermore, such books and
records shall be open to inspection and audit at reasonable times by officers
and auditors of each respective Fund.
3. As compensation for your services hereunder during any fiscal year of
each respective Fund, you shall receive, within five days after the end of each
fiscal quarter of each respective Fund, a fee based on the average of the
aggregate daily net asset values of each respective Fund at the annual rate per
each $1 million of $300.
4. You shall not be liable for anything done or omitted by you in the
exercise of due care in discharging your duties as Financial Agent and shall be
answerable and accountable only for your own acts and omissions and not for
those of any agent employed by you nor for those of any bank, trust company,
broker, depository, correspondent or other person. You shall be protected in
acting upon any instruction, notice, request, consent, certificate, resolution,
or other instrument or paper believed by you to be genuine, and to have been
properly executed, and shall, unless otherwise specifically provided herein, be
entitled to receive as conclusive proof of any fact or matter required to be
ascertained by you hereunder a certificate signed by the Secretary of each
respective Fund. You shall be entitled, with respect to questions of law
relating to your duties hereunder, to advice of counsel (which may be counsel
for any Fund) and, with respect to anything done or omitted by you in good faith
hereunder in conformity with the advice of or based upon an opinion of counsel,
to be held harmless by each respective Fund from all claims of loss or damage.
Nothing herein shall protect you against any liability to any Fund or to its
respective shareholders to which you would otherwise be subject by reason of
your wilful misfeasance, bad faith, gross negligence or reckless disregard of
your duties hereunder. Except as provided in this Paragraph 4, you shall not be
entitled to any indemnification by any Fund.
5. Subject to prior approval of the Board of Directors/Trustees of each
Fund, you may appoint one or more sub-financial agents to perform any of the
functions and services which are to be provided under the terms of this
Agreement upon such terms and conditions as may be mutually agreed upon among
each respective Fund, you and such sub-financial agent.
6. This Agreement shall continue in effect only so long as (a) such
continuance is specifically approved at least annually by the Board of
Directors/Trustees of each Fund or by a vote of a majority of the outstanding
voting securities of each respective Fund, and (b) the terms and any renewal of
such Agreement have been approved by the vote of a majority of the
directors/trustees of each respective Fund who are not parties to the Agreement
or interested persons, as that term is defined in the Investment Company Act of
1940, of any such party, cast in person at a meeting called for the purpose of
voting on such approval. A "majority of the outstanding voting securities of
each respective Fund" shall have, for all purposes of this Agreement, the
meaning provided therefor in the Investment Company Act.
7. Either you or any Fund may terminate your appointment as Financial Agent
hereunder on written notice to the other, whereupon you will be relieved of the
duties described herein with respect to such Fund. Any Fund may terminate this
Agreement without in any manner affecting the continued existence of the same
with respect to any and all other Fund(s) not terminating the Agreement. This
Agreement shall immediately terminate in the event of its assignment, as that
term is defined in the Investment Company Act of 1940.
8. This Agreement shall be construed and the rights and obligations of the
parties hereunder enforced in accordance with the laws of the State of
Connecticut.
<PAGE>
If this letter correctly sets forth your understanding of the powers to be
granted to you and the restrictions to be imposed upon you as Financial Agent,
kindly confirm the same by signing in the appropriate space provided below.
Very truly yours,
Phoenix Asset Reserve
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Equity Opportunities Fund
Phoenix Income and Growth Fund
Phoenix Multi-Portfolio Fund
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Series Fund
Phoenix Total Return Fund, Inc.
Phoenix Worldwide Opportunities Fund
By: /s/ Philip R. McLoughlin
--------------------------------
President
Accepted as of date first above written:
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Martin J. Gavin
------------------------------
Executive Vice President
Exhibit 9.3
FINANCIAL AGENT AGREEMENT
THIS AGREEMENT made and concluded as of this 11th day of December, 1996 by
and between Phoenix Equity Planning Corporation, a Connecticut corporation
having a place of business located at 100 Bright Meadow Boulevard, Enfield,
Connecticut (the "Financial Agent") and each of the undersigned mutual funds
(hereinafter collectively and singularly referred to as the "Trust").
WITNESSETH THAT:
1. Financial Agent shall keep the books of the Trust and compute the daily
net asset value of shares of the Trust in accordance with instructions received
from time to time from the Board of Trustees of the Trust; which instructions
shall be certified to Financial Agent by the Trust's Secretary. Financial Agent
shall report such net asset value so determined to the Trust and shall perform
such other services as may be requested from time to time by the Trust as are
reasonably incidental to Financial Agent's duties hereunder.
2. Financial Agent shall be obligated to maintain, for the periods and in
the places required by Rule 31a-2 under the Investment Company Act of 1940, as
amended, those books and records maintained by Financial Agent. Such books and
records are the property of the Trust and shall be surrendered promptly to the
Trust upon its request. Furthermore, such books and records shall be open to
inspection and audit at reasonable times by officers and auditors of the Trust.
3. As compensation for its services hereunder during any fiscal year of the
Trust, Financial Agent shall receive, within eight days after the end of each
month, a fee as specified in Schedule A.
4. Financial Agent shall not be liable for anything done or omitted by it
in the exercise of due care in discharging its duties specifically described
hereunder and shall be answerable and accountable only for its own acts and
omissions and not for those of any agent employed by it nor for those of any
bank, trust company, broker, depository, correspondent or other person.
Financial Agent shall be protected in acting upon any instruction, notice,
request, consent, certificate, resolution, or other instrument or paper believed
by Financial Agent to be genuine, and to have been properly executed, and shall,
unless otherwise specifically provided herein, be entitled to receive as
conclusive proof of any fact or matter required to be ascertained by Financial
Agent hereunder a certificate signed by the Secretary of the Trust. Financial
Agent shall be entitled, with respect to questions of law relating to its duties
hereunder, to advice of counsel (which may be counsel for the Trust) and, with
respect to anything done or omitted by it in good faith hereunder in conformity
with the advice of or based upon an opinion of counsel, to be held harmless by
the Trust from all claims of loss or damage. Nothing herein shall protect
Financial Agent against any liability to the Trust or to its respective
shareholders to which Financial Agent would otherwise be subject by reason of
its willful misfeasance, bad faith, gross
<PAGE>
negligence or reckless disregard of its duties hereunder. Except as provided in
this paragraph, Financial Agent shall not be entitled to any indemnification by
the Trust.
5. Subject to prior approval of the Board of Trustees of the Trust,
Financial Agent may appoint one or more sub-financial agents to perform any of
the functions and services which are to be provided under the terms of this
Agreement upon such terms and conditions as may be mutually agreed upon by the
Trust, Financial Agent and such sub-financial agent.
6. This Agreement shall continue in effect only so long as (a) such
continuance is specifically approved at least annually by the Board of Trustees
of the Trust or by a vote of a majority of the outstanding voting securities of
the Trust, and (b) the terms and any renewal of such Agreement have been
approved by the vote of a majority of the trustees of the Trust who are not
parties to this Agreement or interested persons, as that term is defined in the
Investment Company Act of 1940, as amended, of any such party, cast in person at
a meeting called for the purpose of voting on such approval. A "majority of the
outstanding voting securities of the Trust" shall have, for all purposes of this
Agreement, the meaning provided therefor in said Investment Company Act.
7. Either party may terminate the within Agreement by tendering written
notice to the other, whereupon Financial Agent will be relieved of the duties
described herein. This Agreement shall immediately terminate in the event of its
assignment, as that term is defined in said Investment Company Act.
8. This Agreement shall be construed and the rights and obligations of the
parties hereunder enforced in accordance with the laws of the Commonwealth of
Massachusetts.
<PAGE>
9. This Agreement shall become effective on January 1, 1997.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first written above.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By: /s/ Philip R. McLoughlin
----------------------------
Philip R. McLoughlin
President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ David R. Pepin
----------------------------
David R. Pepin
Executive Vice President
<PAGE>
SCHEDULE A
FEE SCHEDULE
FEE INFORMATION FOR SERVICES AS FINANCIAL AGENT
Annual Financial Agent Fees shall be based on the following formula:
(1) An incremental schedule applies as follows:
<TABLE>
<S> <C>
Up to $100 million: 5 basis points on average daily net assets
$100 million to $300 million: 4 basis points on average daily net assets
$300 million thru $500 million: 3 basis points on average daily net assets
Greater than $500 million: 1.5 basis points on average daily net assets
</TABLE>
A minimum fee will apply as follows:
Money Market $35,000
Equity $50,000
Balanced $60,000
Fixed Income $70,000
International $70,000
REIT $70,000
(2) An additional charge of $12,000 applies for each additional class of
shares above one, over and above the minimum asset-based fee previously noted.
The following tables indicates the classification and effective date for
each of the applicable fund/series/portfolio:
Classification Series Name
-------------- -----------
Money Market Phoenix Money Market Fund Series
Equity Phoenix Aggressive Growth Fund Series
Phoenix Convertible Fund Series
Phoenix Endowment Equity Portfolio
Phoenix Equity Opportunities Fund
Phoenix Growth Fund Series
Phoenix Micro Cap Fund
Phoenix Mid Cap Portfolio
Phoenix Small Cap Fund
Phoenix Strategic Theme Fund
<PAGE>
Classification Series Name
-------------- -----------
Balanced Phoenix Balanced Fund Series
Phoenix Income and Growth Fund
Phoenix Strategic Allocation Fund, Inc.
Fixed Income Phoenix California Tax Exempt Bonds, Inc.
Phoenix Diversified Income Portfolio
Phoenix Emerging Markets Bond Portfolio
Phoenix High Yield Fund Series
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund
Phoenix Tax-Exempt Bond Portfolio
Phoenix U.S. Government Securities Fund Series
International Phoenix International Portfolio
Phoenix Worldwide Opportunities Fund
REIT Phoenix Real Estate Securities Portfolio
Exhibit 9.4
FIRST AMENDMENT TO FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 1st day of January, 1997 amends
that certain Financial Agent Agreement dated December 11, 1996 by and among the
following parties (the "Agreement") as hereinbelow provided.
W I T N E S S E T H :
WHEREAS, due to a scrivener's error, the Phoenix Convertible Fund Series
was incorrectly classified as an "Equity" series rather than a "Balanced" series
for purposes of applying the minimum fee; and
WHEREAS, the parties wish to correct this error and correctly classify the
Phoenix Convertible Fund Series as a "Balanced" series:
NOW, THEREFORE, in consideration of the foregoing premises, Schedule A to
the Agreement is hereby replaced with "Revised Schedule A" attached hereto and
made a part hereof. Except as hereinabove provided, the Agreement shall be and
remain unmodified and in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their duly authorized officers on this 26th day of February, 1997.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By: /s/ Philip R. McLoughlin
--------------------------------
Philip R. McLoughlin
President (as to all)
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ David R. Pepin
--------------------------------
David R. Pepin
Executive Vice President
<PAGE>
REVISED SCHEDULE A
FEE SCHEDULE
FEE INFORMATION FOR SERVICES AS FINANCIAL AGENT
Annual Financial Agent Fees shall be based on the following formula:
(1) An incremental schedule applies as follows:
Up to $100 million: 5 basis points on average daily net assets
$100 million to $300 million: 4 basis points on average daily net assets
$300 million thru $500 million: 3 basis points on average daily net assets
Greater than $500 million: 1.5 basis points on average daily net assets
A minimum fee will apply as follows:
Money Market $35,000
Equity $50,000
Balanced $60,000
Fixed Income $70,000
International $70,000
REIT $70,000
(2) An additional charge of $12,000 applies for each additional class of
shares above one, over and above the minimum asset-based fee previously noted.
The following tables indicates the classification and effective date for
each of the applicable fund/series/portfolio:
Classification Series Name
-------------- -----------
Money Market Phoenix Money Market Fund Series
Equity Phoenix Aggressive Growth Fund Series
Phoenix Endowment Equity Portfolio
Phoenix Equity Opportunities Fund
Phoenix Growth Fund Series
Phoenix Micro Cap Fund
Phoenix Mid Cap Portfolio
Phoenix Small Cap Fund
Phoenix Strategic Theme Fund
<PAGE>
Classification Series Name
-------------- -----------
Balanced Phoenix Balanced Fund Series
Phoenix Convertible Fund Series
Phoenix Income and Growth Fund
Phoenix Strategic Allocation Fund, Inc.
Fixed Income Phoenix California Tax Exempt Bonds, Inc.
Phoenix Diversified Income Portfolio
Phoenix Emerging Markets Bond Portfolio
Phoenix High Yield Fund Series
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund
Phoenix Tax-Exempt Bond Portfolio
Phoenix U.S. Government Securities Fund Series
International Phoenix International Portfolio
Phoenix Worldwide Opportunities Fund
REIT Phoenix Real Estate Securities Portfolio
EXHIBIT 10
OPINION OF COUNSEL
<PAGE>
February 24, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Ladies and Gentlemen:
This opinion is furnished in connection with the registration under the
Securities Act of 1933, as amended, of Class A and Class B shares (collectively,
"Shares") of each series of the Phoenix Series Fund (the "Phoenix Fund").
In rendering our opinion, we have examined such documents, records, and
matters of law as we deemed necessary for purposes of this opinion. We have
assumed the genuineness of all signatures of all parties, the authenticity of
all documents submitted as originals, the correctness of all copies, and the
correctness of all facts set forth in the certificates delivered to us and the
correctness of all written or oral statements made to us.
Based upon the subject to the foregoing, it is our opinion that the Shares
that will be issued by the Phoenix Fund when sold, have been legally issued,
fully paid, and nonassessable.
Our opinion is rendered solely in connection with the Registration
Statement on Form N-1A under which the Shares will be registered and may not be
relied upon for any other purposes without our written consent. We hereby
consent to the use of this opinion as an exhibit to such Registration Statement.
Yours truly,
/S/ Richard J. Wirth
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 84 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated December 13, 1996, relating to the financial
statements and financial highlights appearing in the October 31, 1996 Annual
Report to Shareholders of the Phoenix Series Fund, which is also incorporated
by reference into the Registration Statement. We also consent to the reference
to us under the heading "Financial Highlights" in the Prospectus and under the
heading "Independent Accountants" in the Statement of Additional Information.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
February 26, 1997
EXHIBIT 15.1
DISTRIBUTION PLAN CLASS A
<PAGE>
DISTRIBUTION PLAN OF
PHOENIX SERIES FUND
PURSUANT TO RULE 12B-1
CLASS A SHARES
Distribution Plan for Class A shares dated November 17, 1993 (the "Plan") of
Phoenix Series Fund (the "Fund"), a Massachusetts business trust.
WITNESSETH THAT:
Section 1. Phoenix Series Fund (the "Fund"), the issuer of Class A shares
of the Phoenix Balanced Fund Series, Phoenix Convertible Fund Series, Phoenix
Growth Fund Series, Phoenix High Quality Bond Fund Series, Phoenix High Yield
Fund Series, Phoenix Stock Fund Series and Phoenix U.S. Government Securities
Fund Series ("Series") may act as the distributor of such shares pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") according to the
terms of this Distribution Plan (the "Plan").
Section 2. Amounts not exceeding in the aggregate a maximum amount equal to
0.25% of the average of the daily aggregate net asset value of the Series' Class
A shares during each year of the Fund elapsed after the inception of the Plan
may be paid by the Fund to its principal underwriter at any time after the
inception of the Plan in order to pay to the principal underwriter, for efforts
expended in respect of or in furtherance of sales of Class A shares of the
Series and to enable the principal underwriter, in its sole discretion, to pay
or to have paid to others who sell or have sold Class A shares of the Series, a
maintenance or other fee, at such intervals as the principal underwriter may
determine, in respect of Class A shares of the Series previously sold by any
such others at any time and remaining outstanding during the period in respect
of which such fee is or has been paid.
Section 3. This plan shall not take effect as to a Series or Class until it
has been approved by a vote of at least a majority (as defined in the Act) of
the outstanding shares of that Series or Class.
Section 4. This Plan shall not take effect until it has been approved
together with any related agreements of the Fund by votes of the majority of
both (a) the Board of Trustees of the Fund and (b) those Trustees who are not
"interested persons" of the Fund as defined in the Act and who have no direct or
indirect financial interests in the operation of this Plan or any agreements of
the Fund or any other person related to this Plan (the "Rule 12b-1 Trustees"),
cast in person at a meeting called for the purpose of voting on this Plan or
such agreements.
Section 5. Unless sooner terminated pursuant to Section 8, this Plan shall
continue in effect for a period of one year from the date it takes effect and
thereafter shall continue in effect so long as such continuance is specifically
approved at least annually in the manner provided for approval of the Plan in
Section 4.
Section 6. Any person authorized to direct the disposition of monies paid
or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Fund's Board, and the Board shall review at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
Section 7. The Plan may be terminated as to a Series at any time by vote of
a majority of the Rule 12b-1 Trustees, or by vote of a majority of that Series'
outstanding shares.
Section 8. Any agreement of the Fund related to this Plan shall be in
writing, and shall provide:
a. That such agreement may be terminated as to a Series at any time,
without payment of any penalty, by vote of a majority of the Rule
12b-1 Trustees or by a vote of a majority of that Series' outstanding
shares or on not more than sixty days written notice to any other
party to the agreement; and
b. That such agreement shall terminate automatically in the event of its
assignment.
Section 9. This Plan may not be amended to increase materially the amount
of distribution expenses provided for in Section 2 hereof unless such amendment
is approved in the manner provided in Section 3 hereof and no material amendment
to this Plan shall be made unless approved in the manner provided for in Section
4 hereof.
EXHIBIT 15.2
DISTRIBUTION PLAN CLASS A
<PAGE>
DISTRIBUTION PLAN OF
PHOENIX SERIES FUND
PURSUANT TO RULE 12B-1
CLASS B SHARES
Distribution Plan for Class B shares dated November 17, 1993 (the "Plan") of
PHOENIX SERIES FUND (the "Fund"), a Massachusetts business trust.
WHEREAS, the Fund and a broker-dealer registered under the Securities Exchange
Act of 1934, have entered into a Distribution Agreement pursuant to which the
Distributor will act as principal underwriter of shares of the Fund for sale to
the public; and
WHEREAS, the Trustees of the Fund have determined to adopt this Distribution
Plan (the "Plan"), in accordance with the requirements of the Investment Company
Act of 1940, as amended (the "Act") and have determined that there is a
reasonable likelihood that the Plan will benefit the Fund and its shareholders.
NOW THEREFORE, the Fund hereby adopts the Plan on the following terms and
conditions:
1. The Fund shall reimburse the Distributor, at the end of each month, up
to a maximum on an annual basis of 1.00% of the average daily value of the net
assets of the Fund's Class B shares, subject to any applicable restrictions
imposed by rules of the National Association of Securities Dealers, Inc., for
distribution expenditures incurred by PEPCO subsequent to the effectiveness of
this Plan, in connection with the sale and promotion of the Class B shares of
the Fund and the furnishing of services to Class B shareholders of the Fund.
Such expenditures shall consist of: (i) commissions to sales personnel for
selling Class B shares of the Fund (including underwriting commissions and
finance charges related to the payment of commissions); (ii) compensation, sales
incentives and payments to sales, marketing and service personnel; (iii)
payments to broker-dealers and other financial institutions which have entered
into selling agreements with the Distributor, for services rendered in
connection with the sale and distribution of Class B shares of the Fund; (iv)
payment of expenses incurred in sales and promotional activities, including
advertising expenditures related to the Class B shares of the Fund; (v) the
costs of preparing and distributing promotional materials; (vi) the cost of
printing the Fund's Prospectus and Statement of Additional Information for
distribution to potential investors; and (vii) such other similar services that
the Trustees of the Fund determine are reasonably calculated to result in the
sale of Class B shares of the Fund; provided however, that a portion of such
amount paid to the Distributor, which portion shall be equal to or less than
0.25% annually of the average daily net assets of the Fund's Class B shares, may
be paid for reimbursing the costs of providing services to Class B shareholders
including assistance in connection with inquiries related to shareholder
accounts (the "Service Fee").
Amounts paid or payable by the Fund under this Plan or any agreement with
any person or entity relating to the implementation of this Plan ("related
agreement") shall only be used to pay for, or reimburse payment for, the
distribution expenditures described in the preceding paragraph and shall, given
all surrounding circumstances, represent charges within the range of what would
have been negotiated at arm's length as payment for the specific sales or
promotional services and activities to be financed hereunder and any related
agreement, as determined by the Trustees of the Fund, in the exercise of
reasonable business judgment, in light of fiduciary duties under state law and
Sections 36(a) and (b) of the Act and based upon appropriate business estimates
and projections.
2. At least quarterly in each year the Plan remains in effect, the Fund's
Principal Accounting Officer or Treasurer, or such other person authorized to
direct the disposition of monies paid or payable by the Fund, shall prepare and
furnish to the Trustees of the Fund for their review, and the Trustees shall
review, a written report complying with the requirements of Rule 12b-l under the
Act regarding the amounts expended under the Plan and the purposes for which
such expenditures were made.
3. This Plan shall not take effect until it, together with any related
agreement, has been approved by a vote of at least a majority of the Fund's
Trustees as well as a vote of at least a majority of the Trustees of the Fund
who are not
<PAGE>
interested persons (as defined in the Act) of the Fund and who have
no direct or indirect financial interest in the operation of the Plan or in any
related agreement (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on the Plan or any related agreement and the
Plan shall not take effect with respect to the Fund until it has been approved
by a vote of at least a majority of the outstanding voting Class B shares (as
defined in the Act).
4. This Plan shall remain in effect for one year from the date of its
adoption and may be continued thereafter if specifically approved at least
annually by a vote of at least a majority of the Trustees of the Fund as well as
a majority of the Disinterested Trustees. This Plan may be amended at any time,
provided that (a) the Plan may not be amended to increase materially the amount
of the distribution expenses provided in Paragraph l hereof (including the
Service Fee) without the approval of at least a majority of the outstanding
voting securities (as defined in the Act) of the Class B shares of the Fund and
(b) all material amendments to this Plan must be approved by a majority vote of
the Trustees of the Fund and of the Disinterested Trustees cast in person at a
meeting called for the purpose of such vote.
5. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons (as defined in the Act) of the Fund shall be
committed to the discretion of the Disinterested Trustees then in office.
6. Any related agreement shall be in writing and shall provide that (a)
such agreement shall be subject to termination, without penalty, by vote of a
majority of the outstanding voting securities (as defined in the Act) of the
Class B shares of the Fund on not more than 60 days' written notice to the other
party to the agreement and (b) such agreement shall terminate automatically in
the event of its assignment.
7. This Plan may be terminated at any time by a vote of a majority of the
Disinterested Trustees or by a vote of a majority of the outstanding voting
securities (as defined in the Act) of the Class B shares of the Fund. In the
event this Plan is terminated or otherwise discontinued, no further payments
hereunder will be made by the Plan.
8. The Fund shall preserve copies of this Plan and any related agreements
and all reports made pursuant to Paragraph 2 hereof, and any other information,
estimates, projections and other materials that serve as a basis therefor,
considered by the Trustees of the Fund, for a period of not less than six years
from the date of this Plan, the agreement or report, as the case may be, the
first two years in an easily accessible place.
9. The Fund's Declaration of Trust dated April 7, 1958, a copy of which,
together with the amendments thereto ("Declaration"), is on file in the office
of the Secretary of the Commonwealth of Massachusetts, refers to the Trustees
under the Declaration of Trust collectively as Trustees, but not as individuals
or personally, and no Trustee, shareholder, officer, employee or agent of the
Fund may be held to any personal liability, nor may any resort be had to their
private property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Fund but the Fund property only shall be
liable.
IN WITNESS WHEREOF, the Fund and its Trustees have adopted this Plan as of
the day and year first above written.
PHOENIX SERIES FUND
By: /s/ Philip R. McLoughlin
----------------------------
President
Attest:
By: /s/ Richard Wirth
---------------------
Assistant Secretary
EXHIBIT 16(a)
EXPLANATION OF TOTAL RETURN CALCULATION
<PAGE>
EXPLANATION OF TOTAL RETURN CALCULATION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
-TEN YEAR-
- ------------------------------------------------------------------------------------------------------------------------
Number of
Initial Shares Ending
Net Per Share Gross Recurring Redemption
Initial Sales Asset Initial Value Redemption Loss Account Value
Series Payment Charge* Value Payment 10/31/94 Value (-) Fees 10/31/94
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Stock $1,000 $47.50 $953 84.674 $2,968 $2,968 -- NONE $2,968
Balanced 1,000 47.50 953 87.336 3,192 3,192 -- NONE 3,192
Convertible 1,000 47.50 953 59.102 2,775 2,775 -- NONE 2,775
Growth 1,000 47.50 953 73.746 3,490 3,490 -- NONE 3,490
High Yield 1,000 47.50 953 107.643 2,582 2,582 -- NONE 2,582
</TABLE>
*Assumes initial sales load is deducted from the initial $1,000 payment.
TOTAL RETURN FORMULA:
(ERV/P)/N = 1
Stock T = [(2,968/1,000)/10] - 1 = 11.49%
Balanced T = [(3,192/1,000)/10] - 1 = 12.31%
Convertible T = [(2,775/1,000)/10] - 1 = 10.75%
Growth T = [(3,490/1,000)/10] - 1 = 13.32%
High Yield T = [(2,582/1,000)/10] - 1 = 9.95%
Where: P = a hypothetical initial payment of $1,000 invested on
10/31/84.
T = average annual total return assuming reinvestment of
dividends, distributions and annual capital gains
distributions.
N = number of years
ERV = ending redeemable value
EXHIBIT 16(b)
EXPLANATION OF YIELD AND EFFECTIVE YIELD CALCULATION
<PAGE>
EXPLANATION OF YIELD AND EFFECTIVE YIELD CALCULATION
Money Market Series
The following is an example of the yield calculation for the Money Market
Series based on a seven day period ending October 31, 1994.
Assumptions:
Value of a Hypothetical pre-existing account with
exactly one share at the beginning of the period 1.000000
Value of the same account (excluding capital changes)
at the end of the seven day period 1.000812748
Calculation:
Ending Account Value 1.000812748
Less beginning account value 1.000000
Net change in account value 0.000812748
Base period return:
(adjusted change/beginning account value) 0.000812748
Current yield = 0.000812748 x (365/7) = 4.24%
Effective yield= [(1 + 0.000812748)(365)/7]-1 4.33%
Other Series
The following is an example of the yield calculation for the High Yield
Series based on a 30 day period ending October 31, 1994.
The yield is computed by dividing the net investment income per share
earned during the accounting period by the maximum offering price per share on
the last day of the period, according to the following formula:
YIELD = 2[(a-b/cd)+1)(6)-1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of
the period.
Class A
- -------
The yield of the High Yield Series is computed as follows:
Yield = 2[(4,878,418 - 595,504/63,641,883 x 8.51) +1)(6) - 1] = 9.51%
The yield of the Convertible Series is computed as follows:
Yield = 2[(1,111,102 - 211,550/13,007,401 x 18.44) + 1)(4) - 1] = 4.54%
The yield of the U.S. Government Securities Series is computed as follows:
Yield = 2[(1,308,223 - 211,588/29,761,079 x 0.32) + 1)(6) - 1] = 3.68%
The yield of the Balanced Series is computed as follows:
Yield = 2[(6,470,368 - 1,2997,809/172,342,336 x 16.99) + 1)(6) - 1] = 2.88%
The yield of the Growth Series is computed as follows:
Yield = 2[(4,960,396 - 1,594,936/101,288,492 x 22.20) + 1)(6) - 1] = 1.63%
The yield of the Stock Series is computed as follows:
Yield = 2[(492,214 - 142,281/10,349,578 x 13.99) + 1)(6) - 1] = 2.34%
Class B
- -------
Yield = 2[(31.032 - 9.028/496,596 x 8.13) + 1)(6) - 1] = 9.07%
Yield = 2[(3.965 - 1.077/40.317 x 17.55) + 1)(6) - 1] = 3.65%
Yield = 2[(4.560 - 1.634/190,509 x 0.86) _ 1)(6) - 1] = 5.17%
Yield = 2[(13,382 - 5.788/269,664 x 15.23) + 1)(6) - 1] = 2.24%
Yield = 2[(5,896 - 3.788/119,348 x 21.19) + 1)(6) - 1] = 1.00%
Yield = 2[(779 - 484/20.398 x 13.37) + 1)(6) - 1] = 1.52%
EXHIBIT 18.2
RULE 18f-3 DUAL DISTRIBUTION PLAN
<PAGE>
PHOENIX FUNDS
(the "Funds")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended
("1940 Act"), this Plan describes the multi-class system for the Funds,
including the separate classes of shares' arrangements for distribution, the
method for allocating expenses to those classes and any related conversion or
exchange privileges applicable to these classes.
Upon the original effective date of this Plan, the Funds shall offer
multiple classes of shares, as described herein, pursuant to Rule 18f-3 and this
Plan.
2. The Multi-Class Structure
The portfolios of the Funds listed on Schedule A hereto shall offer two
classes of shares, Class A and Class B ("Multi-Class Portfolios"). Shares of the
Multi-Class Portfolios shall represent an equal pro rata interest in the
respective Multi-Class Portfolio and, generally, shall have identical voting,
dividend, liquidation, and other rights, preferences, powers, restrictions,
limitations, qualifications and terms and conditions, except that: (a) each
class shall have a different designation; (b) each class shall bear any Class
Expenses, as defined by Section B, below; (c) each class shall have exclusive
voting rights on any matter submitted to shareholders that relates solely to its
distribution arrangement; and (d) each class shall have separate voting rights
on any matter submitted to shareholders in which the interests of one class
differ from the interests of any other class. In addition, Class A and Class B
shares shall have the features described in Sections a, b, c and d, below.
a. Distribution Plans
The Funds have adopted Distribution Plans pursuant to Rule 12b-1 with
respect to each Multi-Class Portfolio, containing substantially the following
terms:
i. Class A shares of each Multi-Class Portfolio shall reimburse
Phoenix Equity Planning Corporation (the "Distributor") for costs and
expenses incurred in connection with distribution and marketing of shares
thereof, as provided in the Class A Distribution Plan and any supplements
thereto, subject to an annual limit of 0.25%, or in some cases 0.30%, of
the average daily net assets of a Multi-Class Portfolio's Class A shares.
ii. Class B shares of each Multi-Class Portfolio shall reimburse the
Distributor for costs and expenses incurred in connection with distribution
and marketing of shares thereof, as provided in the Class B Distribution
Plan and any supplements thereto, subject to an annual limit of 1.00% of
the average daily net assets of a Multi-Class Portfolio's Class B shares.
b. Allocation of Income and Expenses
<PAGE>
i. General.
The gross income, realized and unrealized capital gains and losses and
expenses (other than Class Expenses, as defined below) of each Multi-Class
Portfolio shall be allocated to each class on the basis of its net asset
value relative to the net asset value of the Multi-Class Portfolio.
Expenses to be so allocated include expenses of the Funds that are not
attributable to a particular Multi-Class Portfolio or class of a
Multi-Class Portfolio but are allocated to a Multi-Class Portfolio ("Fund
Expenses") and expenses of a particular Multi-Class Portfolio that are not
attributable to a particular class of that Multi-Class Portfolio
("Portfolio Expenses"). Fund Expenses include, but are not limited to,
trustees' fees, insurance costs and certain legal fees. Portfolio Expenses
include, but are not limited to, certain state registration fees, custodial
fees, advisory fees and other expenses relating to the management of the
Multi-Class Portfolio's assets.
ii. Class Expenses.
Expenses attributable to a particular class ("Class Expenses") shall
be limited to: (1) transfer agency fees; (2) stationery, printing, postage,
and delivery expenses relating to preparing and distributing shareholder
reports, prospectuses, and proxy statements; (3) state Blue Sky
registration fees; (4) SEC registration fees; (5) expenses of
administrative personnel and services to the extent related to another
category of class-specific expenses; (6) trustees' fees and expenses; (7)
accounting expenses, auditors' fees, litigation expenses, and legal fees
and expenses; and (8) expenses incurred in connection with shareholder
meetings. Expenses described in subsection (a) of this paragraph must be
allocated to the class for which they are incurred. All other expenses
described in this paragraph may be allocated as Class Expenses, if a Fund's
President and Treasurer have determined, subject to Board approval or
ratification, which of such categories of expenses will be treated as Class
Expenses, consistent with applicable legal principles under the 1940 Act
and the Internal Revenue Code of 1986, as amended ("Code"). The difference
between the Class Expenses allocated to each share of a class during a year
and the Class Expenses allocated to each share of any other class during
such year shall at all times be less than .50% of the average daily net
asset value of the class of shares with the smallest average net asset
value. The afore-described description of Class Expenses and any amendment
thereto shall be subject to the continuing availability of an opinion of
counsel or a ruling from the Internal Revenue Service to the effect that
any such allocation of expenses or the assessment of higher distribution
fees and transfer agency costs on any class of shares does not result in
any dividends or distributions constituting "preferential dividends" under
the Code.
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense or Portfolio Expense as applicable, and in the event a Fund Expense
or Portfolio Expense becomes allocable as a Class Expense, it shall be so
allocated, subject to compliance with Rule 18f-3 and Board approval or
ratification.
The initial determination of expenses that will be allocated as Class
Expenses and any subsequent changes thereto as set forth in this Plan shall
be reviewed by the Board of Trustees and approved by such Board and by a
majority of the Trustees who are not "interested persons" of the Fund, as
defined in the 1940 Act ("Independent Trustees").
iii. Waivers or Reimbursements of Expenses
Expenses may be waived or reimbursed by the Fund's investment
adviser(s), its principal underwriters, or any other provider of services
to a Multi-Class Portfolio without the prior approval of Broad of Trustees.
<PAGE>
c. Exchange Privileges
Shareholders of a Multi-Class Portfolio may exchange shares of a particular
class for shares of the same class in another Multi-Class Portfolio, at the
relative net asset values of the respective shares to be exchanged and with no
sales charge, provided the shares to be acquired in the exchange are, as may be
necessary, qualified for sale in the shareholder's state of residence and
subject to the applicable requirements, if any, as to minimum amount.
d. Conversion Feature
Class B Shares of a Multi-Class Portfolio will automatically convert to
Class A Shares of that portfolio, without sales charge, at the relative net
asset values of each such classes, not later than eight years from the
acquisition of the Class B Shares. The conversion of Class B Shares to Class A
Shares is subject to the continuing availability of an opinion of counsel or a
ruling from the Internal Revenue Service to the effect that the conversion of
shares does not constitute a taxable event under federal income tax law.
3. Board Review
a. Approval of Amended and Restated Plan
The Board of Trustees, including the Independent Trustees, at a meeting
held on August 21, 1996, approved the Amended and Restated Plan based on a
determination that the Plan, including the expense allocation, is in the best
interests of each class and Multi-Class Portfolio individually and of the Funds.
<PAGE>
b. Approval of Amendments
The Plan may not be amended materially unless the Board of Trustees, the
Independent Trustees, have found that the proposed amendment, including any
proposed related expense allocation, is in the best interests of each class and
Multi-Class Portfolio individually and of the Funds.
c. Periodic Review
The Board shall review reports of expense allocations and such other
information as they request at such times, or pursuant to such schedule, as they
may determine consistent with applicable legal requirements.
4. Contracts
Any agreement related to the Multi-Class System shall require the parties
thereto to furnish to the Board of Trustees, upon their request, such
information as is reasonably necessary to permit the Trustees to evaluate the
Plan or any proposed amendment.
5. Effective Date
The Amended and Restated Plan, having been reviewed and approved by the
Board of Trustees and the Independent Trustees, shall take effect as of the
first day of each Fund's current fiscal year.
6. Amendments
The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in Section 3(b) of this
Plan.
<PAGE>
SCHEDULE A
PHOENIX CALIFORNIA TAX -EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND:
DIVERSIFIED INCOME PORTFOLIO
EMERGING MARKETS BOND PORTFOLIO
INTERNATIONAL PORTFOLIO
REAL ESTATE SECURITIES PORTFOLIO
MID CAP PORTFOLIO
TAX-EXEMPT BOND PORTFOLIO
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND:
AGGRESSIVE GROWTH FUND SERIES
BALANCED FUND SERIES
CONVERTIBLE FUND SERIES
GROWTH FUND SERIES
HIGH YIELD FUND SERIES
MONEY MARKET FUND SERIES
U.S. GOVERNMENT SECURITIES FUND SERIES
PHOENIX TOTAL RETURN FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND:
EQUITY OPPORTUNITIES FUND
MICRO CAP FUND
STRATEGIC THEME FUND
SMALL CAP FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
EXHIBIT 18.3
RULE 18f-3 DUAL DISTRIBUTION PLAN
<PAGE>
PHOENIX FUNDS
(the "Funds")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended
("1940 Act"), this Plan describes the multi-class system for the Funds,
including the separate classes of shares' arrangements for distribution, the
method for allocating expenses to those classes and any related conversion or
exchange privileges applicable to these classes.
Upon the original effective date of this Plan, the Funds shall offer
multiple classes of shares, as described herein, pursuant to Rule 18f-3 and this
Plan.
2. The Multi-Class Structure
The portfolios of the Funds listed on Schedule A hereto shall offer two
classes of shares, Class A and Class B ("Multi-Class Portfolios"). Shares of the
Multi-Class Portfolios shall represent an equal pro rata interest in the
respective Multi-Class Portfolio and, generally, shall have identical voting,
dividend, liquidation, and other rights, preferences, powers, restrictions,
limitations, qualifications and terms and conditions, except that: (a) each
class shall have a different designation; (b) each class shall bear any Class
Expenses, as defined by Section 2(b), below; (c) each class shall have exclusive
voting rights on any matter submitted to shareholders that relates solely to its
distribution arrangement; and (d) each class shall have separate voting rights
on any matter submitted to shareholders in which the interests of one class
differ from the interests of any other class. In addition, Class A and Class B
shares shall have the features described in Sections a, b, c and d, below.
a. Distribution Plans
The Funds have adopted Distribution Plans pursuant to Rule 12b-1 with
respect to each Multi-Class Portfolio, containing substantially the following
terms:
i. Class A shares of each Multi-Class Portfolio shall reimburse
Phoenix Equity Planning Corporation (the "Distributor") for costs and
expenses incurred in connection with distribution and marketing of shares
thereof, as provided in the Class A Distribution Plan and any supplements
thereto, subject to an annual limit of 0.25%, or in some cases 0.30%, of
the average daily net assets of a Multi-Class Portfolio's Class A shares.
ii. Class B shares of each Multi-Class Portfolio shall reimburse the
Distributor for costs and expenses incurred in connection with distribution
and marketing of shares thereof, as provided in the Class B Distribution
Plan and any supplements thereto, subject to an annual limit of 1.00% of
the average daily net assets of a Multi-Class Portfolio's Class B shares.
<PAGE>
b. Allocation of Income and Expenses
i. General.
The gross income, realized and unrealized capital gains and losses and
expenses (other than Class Expenses, as defined below) of each Multi-Class
Portfolio shall be allocated to each class on the basis of its net asset
value relative to the net asset value of the Multi-Class Portfolio.
Expenses to be so allocated include expenses of the Funds that are not
attributable to a particular Multi-Class Portfolio or class of a
Multi-Class Portfolio but are allocated to a Multi-Class Portfolio ("Fund
Expenses") and expenses of a particular Multi-Class Portfolio that are not
attributable to a particular class of that Multi-Class Portfolio
("Portfolio Expenses"). Fund Expenses include, but are not limited to,
trustees' fees, insurance costs and certain legal fees. Portfolio Expenses
include, but are not limited to, certain state registration fees, custodial
fees, advisory fees and other expenses relating to the management of the
Multi-Class Portfolio's assets.
ii. Class Expenses.
Expenses attributable to a particular class ("Class Expenses") shall
be limited to: (1) transfer agency fees; (2) stationery, printing, postage,
and delivery expenses relating to preparing and distributing shareholder
reports, prospectuses, and proxy statements; (3) state Blue Sky
registration fees; (4) SEC registration fees; (5) expenses of
administrative personnel and services to the extent related to another
category of class-specific expenses; (6) trustees' fees and expenses; (7)
accounting expenses, auditors' fees, litigation expenses, and legal fees
and expenses; and (8) expenses incurred in connection with shareholder
meetings. Expenses described in subsection (a) (i) and (ii) above of this
paragraph must be allocated to the class for which they are incurred. All
other expenses described in this paragraph will be allocated as Class
Expenses, if a Fund's President and Treasurer have determined, subject to
Board approval or ratification, which of such categories of expenses will
be treated as Class Expenses, consistent with applicable legal principles
under the 1940 Act and the Internal Revenue Code of 1986, as amended
("Code"). The difference between the Class Expenses allocated to each share
of a class during a year and the Class Expenses allocated to each share of
any other class during such year shall at all times be less than .50% of
the average daily net asset value of the class of shares with the smallest
average net asset value. The afore-described description of Class Expenses
and any amendment thereto shall be subject to the continuing availability
of an opinion of counsel or a ruling from the Internal Revenue Service to
the effect that any such allocation of expenses or the assessment of higher
distribution fees and transfer agency costs on any class of shares does not
result in any dividends or distributions constituting "preferential
dividends" under the Code.
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense or Portfolio Expense as applicable, and in the event a Fund Expense
or Portfolio Expense becomes allocable as a Class Expense, it shall be so
allocated, subject to compliance with Rule 18f-3 and Board approval or
ratification.
The initial determination of expenses that will be allocated as Class
Expenses and any subsequent changes thereto as set forth in this Plan shall
be reviewed by the Board of Trustees and approved by such Board and by a
majority of the Trustees who are not "interested persons" of the Fund, as
defined in the 1940 Act ("Independent Trustees").
iii. Waivers or Reimbursements of Expenses
Investment Advisor may waive or reimburse its management fee in whole
or in part provided that the fee is waived or reimbursed to all shares of
the Fund in proportion to the relative average daily net asset values.
<PAGE>
Investment Advisor or a related entity who charges a fee for a Class
Expense may waive or reimburse that fee in whole or in part only if the
revised fee more accurately reflects the relative cost of providing to each
Multi-Class Portfolio the service for which the Class Expense is charged.
Distributor may waive or reimburse a Rule 12b-1 Plan fee payment in
whole or in part.
c. Exchange Privileges
Shareholders of a Multi-Class Portfolio may exchange shares of a particular
class for shares of the same class in another Multi-Class Portfolio, at the
relative net asset values of the respective shares to be exchanged and with no
sales charge, provided the shares to be acquired in the exchange are, as may be
necessary, qualified for sale in the shareholder's state of residence and
subject to the applicable requirements, if any, as to minimum amount. Each
Multi-Class Portfolio reserves the right to temporarily or permanently terminate
exchange privileges, impose conditions upon the exercision of exchange
privileges, or reject any specific order for any dealer, shareholder or person
whose transactions seem to follow a timing pattern, including those who request
more than one exchange out of a Multi-Class Portfolio within any thirty (30) day
period. Each Multi-Class Portfolio reserves the right to terminate or modify
these exchange privileges at any time upon giving prominent notice to
shareholders at least 60 days in advance.
d. Conversion Feature
Class B Shares of a Multi-Class Portfolio will automatically convert to
Class A Shares of that portfolio, without sales charge, at the relative net
asset values of each such classes, not later than eight years from the
acquisition of the Class B Shares. The conversion of Class B Shares to Class A
Shares is subject to the continuing availability of an opinion of counsel or a
ruling from the Internal Revenue Service to the effect that the conversion of
shares does not constitute a taxable event under federal income tax law.
3. Board Review
a. Approval of Amended and Restated Plan
The Board of Trustees, including a majority of the Independent Trustees, at
a meeting held on November 20, 1996, approved the Amended and Restated Plan
based on a determination that the Plan, including the expense allocation, is in
the best interests of each class and Multi-Class Portfolio individually and of
the Funds. Their determination was based on their review of information
furnished to them which they deemed reasonably necessary and sufficient to
evaluate the Plan.
b. Approval of Amendments
The Plan may not be amended materially unless the Board of Trustees,
including a majority of the Independent Trustees, have found that the proposed
amendment, including any proposed related expense allocation, is in the best
interests of each class and Multi-Class Portfolio individually and of the Funds.
Such funding shall be based on information required by the Board and furnished
to them that the Board deems reasonably necessary to evaluate the proposed
amendment.
c. Periodic Review
The Board shall review reports of expense allocations and such other
information as they request at such times, or pursuant to such schedule, as they
may determine consistent with applicable legal requirements.
<PAGE>
4. Contracts
Any agreement related to the Multi-Class System shall require the parties
thereto to furnish to the Board of Trustees, upon their request, such
information as is reasonably necessary to permit the Trustees to evaluate the
Plan or any proposed amendment.
5. Effective Date
The Amended and Restated Plan, having been reviewed and approved by the
Board of Trustees and the Independent Trustees, shall take effect as of the
first day of each Fund's current fiscal year.
6. Amendments
The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in Section 3(b) of this
Plan.
<PAGE>
SCHEDULE A
PHOENIX CALIFORNIA TAX -EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND:
DIVERSIFIED INCOME PORTFOLIO
EMERGING MARKETS BOND PORTFOLIO
INTERNATIONAL PORTFOLIO
MID CAP PORTFOLIO
REAL ESTATE SECURITIES PORTFOLIO
TAX-EXEMPT BOND PORTFOLIO
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND:
AGGRESSIVE GROWTH FUND SERIES
BALANCED FUND SERIES
CONVERTIBLE FUND SERIES
GROWTH FUND SERIES
HIGH YIELD FUND SERIES
MONEY MARKET FUND SERIES
U.S. GOVERNMENT SECURITIES FUND SERIES
PHOENIX STRATEGIC EQUITY SERIES FUND:
EQUITY OPPORTUNITIES FUND
MICRO CAP FUND
SMALL CAP FUND
STRATEGIC THEME FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX WORLDWIDE OPPORTUNITIES FUND
EXHIBIT 19
POWERS OF ATTORNEY
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ C. Duane Blinn, Trustee
------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Robert Chesek, Trustee
-----------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ E. Virgil Conway, Trustee
--------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Harry Dalzell-Payne, Trustee
-----------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
May 22, 1996 /s/ Francis E. Jeffries, Trustee
-----------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Leroy Keith, Jr., Trustee
--------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
May 22, 1996 /s/ Everett L. Morris, Trustee
---------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ James M Oates, Trustee
-----------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
May 22, 1996 /s/ Calvin J. Pedersen, Trustee
----------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Philip R. Reynolds, Trustee
----------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Herbert Roth, Jr., Trustee
---------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Richard E. Segerson, Trustee
-----------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Lowell P. Weicker, Jr., Trustee
--------------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Series Fund,
hereby constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg or
either of them as my true and lawful attorneys and agents with full power to
sign for me in the capacity indicated below, any or all Registration Statements
or amendments thereto filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
Phoenix Series Fund, and hereby ratify and confirm my signature as it may be
signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Series Fund, provided that this revocation shall
not affect the exercise of such prior powers prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Nancy G. Curtiss
--------------------
Nancy G. Curtiss
Treasurer
Principal Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> PHOENIX BALANCED FUND SERIES A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 1811884
<INVESTMENTS-AT-VALUE> 1936234
<RECEIVABLES> 15945
<ASSETS-OTHER> 49009
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2001188
<PAYABLE-FOR-SECURITIES> 19275
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 58398
<TOTAL-LIABILITIES> 77673
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1599486
<SHARES-COMMON-STOCK> 108038
<SHARES-COMMON-PRIOR> 137616
<ACCUMULATED-NII-CURRENT> 4826
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 194853
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 124350
<NET-ASSETS> 1923515
<DIVIDEND-INCOME> 16953
<INTEREST-INCOME> 64551
<OTHER-INCOME> 0
<EXPENSES-NET> (22064)
<NET-INVESTMENT-INCOME> 59440
<REALIZED-GAINS-CURRENT> 195767
<APPREC-INCREASE-CURRENT> (9809)
<NET-CHANGE-FROM-OPS> 245398
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (62440)
<DISTRIBUTIONS-OF-GAINS> (124234)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8801
<NUMBER-OF-SHARES-REDEEMED> (48763)
<SHARES-REINVESTED> 10383
<NET-CHANGE-IN-ASSETS> (448134)
<ACCUMULATED-NII-PRIOR> 8470
<ACCUMULATED-GAINS-PRIOR> 124065
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 11281
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 22064
<AVERAGE-NET-ASSETS> 2174966
<PER-SHARE-NAV-BEGIN> 17.04
<PER-SHARE-NII> 0.48
<PER-SHARE-GAIN-APPREC> 1.46
<PER-SHARE-DIVIDEND> (0.49)
<PER-SHARE-DISTRIBUTIONS> (0.93)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.56
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> PHOENIX BALANCED FUND SERIES B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 1811884
<INVESTMENTS-AT-VALUE> 1936234
<RECEIVABLES> 15945
<ASSETS-OTHER> 49009
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2001188
<PAYABLE-FOR-SECURITIES> 19275
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 58398
<TOTAL-LIABILITIES> 77673
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1599486
<SHARES-COMMON-STOCK> 1495
<SHARES-COMMON-PRIOR> 997
<ACCUMULATED-NII-CURRENT> 4826
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 194853
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 124350
<NET-ASSETS> 1923515
<DIVIDEND-INCOME> 16953
<INTEREST-INCOME> 64551
<OTHER-INCOME> 0
<EXPENSES-NET> (22064)
<NET-INVESTMENT-INCOME> 59440
<REALIZED-GAINS-CURRENT> 195767
<APPREC-INCREASE-CURRENT> (9809)
<NET-CHANGE-FROM-OPS> 245398
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (464)
<DISTRIBUTIONS-OF-GAINS> (996)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 617
<NUMBER-OF-SHARES-REDEEMED> (200)
<SHARES-REINVESTED> 80
<NET-CHANGE-IN-ASSETS> 9238
<ACCUMULATED-NII-PRIOR> 8470
<ACCUMULATED-GAINS-PRIOR> 124065
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 11281
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 22064
<AVERAGE-NET-ASSETS> 2174966
<PER-SHARE-NAV-BEGIN> 17.01
<PER-SHARE-NII> 0.35
<PER-SHARE-GAIN-APPREC> 1.47
<PER-SHARE-DIVIDEND> (0.36)
<PER-SHARE-DISTRIBUTIONS> (0.93)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.54
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> PHOENIX CONVERTIBLE FUND SERIES A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 214634
<INVESTMENTS-AT-VALUE> 225041
<RECEIVABLES> 1076
<ASSETS-OTHER> 6234
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 232351
<PAYABLE-FOR-SECURITIES> 4788
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6742
<TOTAL-LIABILITIES> 11530
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 196115
<SHARES-COMMON-STOCK> 11156
<SHARES-COMMON-PRIOR> 12036
<ACCUMULATED-NII-CURRENT> 658
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 13641
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10407
<NET-ASSETS> 220821
<DIVIDEND-INCOME> 2002
<INTEREST-INCOME> 8951
<OTHER-INCOME> 0
<EXPENSES-NET> (2649)
<NET-INVESTMENT-INCOME> 8304
<REALIZED-GAINS-CURRENT> 13765
<APPREC-INCREASE-CURRENT> 6532
<NET-CHANGE-FROM-OPS> 28601
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8804)
<DISTRIBUTIONS-OF-GAINS> (6839)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 907
<NUMBER-OF-SHARES-REDEEMED> (2490)
<SHARES-REINVESTED> 704
<NET-CHANGE-IN-ASSETS> (4510)
<ACCUMULATED-NII-PRIOR> 1323
<ACCUMULATED-GAINS-PRIOR> 6846
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1445
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2649
<AVERAGE-NET-ASSETS> 222292
<PER-SHARE-NAV-BEGIN> 18.23
<PER-SHARE-NII> 0.70
<PER-SHARE-GAIN-APPREC> 1.68
<PER-SHARE-DIVIDEND> (0.77)
<PER-SHARE-DISTRIBUTIONS> (0.58)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.26
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> PHOENIX CONVERTIBLE FUND SERIES B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 214634
<INVESTMENTS-AT-VALUE> 225041
<RECEIVABLES> 1076
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<TOTAL-ASSETS> 232351
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<OTHER-ITEMS-LIABILITIES> 6742
<TOTAL-LIABILITIES> 11530
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 196115
<SHARES-COMMON-STOCK> 310
<SHARES-COMMON-PRIOR> 204
<ACCUMULATED-NII-CURRENT> 658
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 13641
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10407
<NET-ASSETS> 220821
<DIVIDEND-INCOME> 2002
<INTEREST-INCOME> 8951
<OTHER-INCOME> 0
<EXPENSES-NET> (2649)
<NET-INVESTMENT-INCOME> 8304
<REALIZED-GAINS-CURRENT> 13765
<APPREC-INCREASE-CURRENT> 6532
<NET-CHANGE-FROM-OPS> 28601
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (165)
<DISTRIBUTIONS-OF-GAINS> (130)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 126
<NUMBER-OF-SHARES-REDEEMED> (32)
<SHARES-REINVESTED> 12
<NET-CHANGE-IN-ASSETS> 2231
<ACCUMULATED-NII-PRIOR> 1323
<ACCUMULATED-GAINS-PRIOR> 6846
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1445
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2649
<AVERAGE-NET-ASSETS> 222292
<PER-SHARE-NAV-BEGIN> 18.17
<PER-SHARE-NII> 0.55
<PER-SHARE-GAIN-APPREC> 1.68
<PER-SHARE-DIVIDEND> (0.62)
<PER-SHARE-DISTRIBUTIONS> (0.58)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.20
<EXPENSE-RATIO> 1.92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 031
<NAME> PHOENIX GROWTH FUND SERIES A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 2074836
<INVESTMENTS-AT-VALUE> 2409814
<RECEIVABLES> 6278
<ASSETS-OTHER> 9082
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2425174
<PAYABLE-FOR-SECURITIES> 15108
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17269
<TOTAL-LIABILITIES> 32377
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1649890
<SHARES-COMMON-STOCK> 87356
<SHARES-COMMON-PRIOR> 92305
<ACCUMULATED-NII-CURRENT> 4798
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 403131
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 334978
<NET-ASSETS> 2392797
<DIVIDEND-INCOME> 29430
<INTEREST-INCOME> 17868
<OTHER-INCOME> 0
<EXPENSES-NET> (28305)
<NET-INVESTMENT-INCOME> 18993
<REALIZED-GAINS-CURRENT> 403021
<APPREC-INCREASE-CURRENT> (60960)
<NET-CHANGE-FROM-OPS> 361054
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (22644)
<DISTRIBUTIONS-OF-GAINS> (149325)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9836
<NUMBER-OF-SHARES-REDEEMED> (21427)
<SHARES-REINVESTED> 6642
<NET-CHANGE-IN-ASSETS> 47220
<ACCUMULATED-NII-PRIOR> 8762
<ACCUMULATED-GAINS-PRIOR> 150795
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 15915
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 28305
<AVERAGE-NET-ASSETS> 2402499
<PER-SHARE-NAV-BEGIN> 24.92
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> 3.63
<PER-SHARE-DIVIDEND> (0.25)
<PER-SHARE-DISTRIBUTIONS> (1.63)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.87
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 032
<NAME> PHOENIX GROWTH FUND SERIES B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 2074836
<INVESTMENTS-AT-VALUE> 2409814
<RECEIVABLES> 6278
<ASSETS-OTHER> 9082
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2425174
<PAYABLE-FOR-SECURITIES> 15108
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17269
<TOTAL-LIABILITIES> 32377
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1649890
<SHARES-COMMON-STOCK> 1702
<SHARES-COMMON-PRIOR> 813
<ACCUMULATED-NII-CURRENT> 4798
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 403131
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 334978
<NET-ASSETS> 2392797
<DIVIDEND-INCOME> 29430
<INTEREST-INCOME> 17868
<OTHER-INCOME> 0
<EXPENSES-NET> (28305)
<NET-INVESTMENT-INCOME> 18993
<REALIZED-GAINS-CURRENT> 403021
<APPREC-INCREASE-CURRENT> (60960)
<NET-CHANGE-FROM-OPS> 361054
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (99)
<DISTRIBUTIONS-OF-GAINS> (1479)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1001
<NUMBER-OF-SHARES-REDEEMED> (171)
<SHARES-REINVESTED> 59
<NET-CHANGE-IN-ASSETS> 25215
<ACCUMULATED-NII-PRIOR> 8762
<ACCUMULATED-GAINS-PRIOR> 150795
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 15915
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 28305
<AVERAGE-NET-ASSETS> 2402499
<PER-SHARE-NAV-BEGIN> 24.74
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 3.61
<PER-SHARE-DIVIDEND> (0.09)
<PER-SHARE-DISTRIBUTIONS> (1.63)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.63
<EXPENSE-RATIO> 1.93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 071
<NAME> PHOENIX AGGRESSIVE GROWTH FUND SERIES A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 211580
<INVESTMENTS-AT-VALUE> 235296
<RECEIVABLES> 18172
<ASSETS-OTHER> 12913
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 266381
<PAYABLE-FOR-SECURITIES> 10780
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11647
<TOTAL-LIABILITIES> 22427
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 185676
<SHARES-COMMON-STOCK> 13864
<SHARES-COMMON-PRIOR> 10920
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34562
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 23716
<NET-ASSETS> 243954
<DIVIDEND-INCOME> 196
<INTEREST-INCOME> 659
<OTHER-INCOME> 0
<EXPENSES-NET> (2676)
<NET-INVESTMENT-INCOME> (1821)
<REALIZED-GAINS-CURRENT> 39040
<APPREC-INCREASE-CURRENT> (4197)
<NET-CHANGE-FROM-OPS> 33022
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (231)
<DISTRIBUTIONS-OF-GAINS> (24390)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20593
<NUMBER-OF-SHARES-REDEEMED> (19216)
<SHARES-REINVESTED> 1567
<NET-CHANGE-IN-ASSETS> 413776
<ACCUMULATED-NII-PRIOR> 231
<ACCUMULATED-GAINS-PRIOR> 22105
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1537
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2676
<AVERAGE-NET-ASSETS> 219633
<PER-SHARE-NAV-BEGIN> 16.51
<PER-SHARE-NII> (0.13)
<PER-SHARE-GAIN-APPREC> 2.64
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> (2.16)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.84
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 072
<NAME> PHOENIX AGGRESSIVE GROWTH FUND SERIES B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 211580
<INVESTMENTS-AT-VALUE> 235296
<RECEIVABLES> 18172
<ASSETS-OTHER> 12913
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 266381
<PAYABLE-FOR-SECURITIES> 10780
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11647
<TOTAL-LIABILITIES> 22427
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 185676
<SHARES-COMMON-STOCK> 631
<SHARES-COMMON-PRIOR> 146
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34562
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 23716
<NET-ASSETS> 243954
<DIVIDEND-INCOME> 196
<INTEREST-INCOME> 659
<OTHER-INCOME> 0
<EXPENSES-NET> (2676)
<NET-INVESTMENT-INCOME> (1821)
<REALIZED-GAINS-CURRENT> 39040
<APPREC-INCREASE-CURRENT> (4197)
<NET-CHANGE-FROM-OPS> 33022
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (371)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 740
<NUMBER-OF-SHARES-REDEEMED> (277)
<SHARES-REINVESTED> 23
<NET-CHANGE-IN-ASSETS> 12859
<ACCUMULATED-NII-PRIOR> 231
<ACCUMULATED-GAINS-PRIOR> 22105
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1537
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2676
<AVERAGE-NET-ASSETS> 219633
<PER-SHARE-NAV-BEGIN> 16.38
<PER-SHARE-NII> (0.25)
<PER-SHARE-GAIN-APPREC> 2.60
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (2.16)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.57
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 051
<NAME> PHOENIX HIGH YIELD FUND SERIES A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 504397
<INVESTMENTS-AT-VALUE> 525493
<RECEIVABLES> 33565
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 559059
<PAYABLE-FOR-SECURITIES> 31112
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1087
<TOTAL-LIABILITIES> 32199
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 584843
<SHARES-COMMON-STOCK> 58078
<SHARES-COMMON-PRIOR> 62128
<ACCUMULATED-NII-CURRENT> 2038
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (81117)
<ACCUM-APPREC-OR-DEPREC> 21096
<NET-ASSETS> 526860
<DIVIDEND-INCOME> 1589
<INTEREST-INCOME> 52342
<OTHER-INCOME> 0
<EXPENSES-NET> (6212)
<NET-INVESTMENT-INCOME> 47719
<REALIZED-GAINS-CURRENT> 26433
<APPREC-INCREASE-CURRENT> 2635
<NET-CHANGE-FROM-OPS> 76787
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (46689)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8791
<NUMBER-OF-SHARES-REDEEMED> (15648)
<SHARES-REINVESTED> 2806
<NET-CHANGE-IN-ASSETS> (6590)
<ACCUMULATED-NII-PRIOR> 2426
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (83579)
<GROSS-ADVISORY-FEES> 3366
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6212
<AVERAGE-NET-ASSETS> 519768
<PER-SHARE-NAV-BEGIN> 8.17
<PER-SHARE-NII> 0.78
<PER-SHARE-GAIN-APPREC> 0.46
<PER-SHARE-DIVIDEND> (0.78)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.63
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 052
<NAME> PHOENIX HIGH YIELD FUND SERIES B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 504397
<INVESTMENTS-AT-VALUE> 525493
<RECEIVABLES> 33565
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 559059
<PAYABLE-FOR-SECURITIES> 31112
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1087
<TOTAL-LIABILITIES> 32199
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 584843
<SHARES-COMMON-STOCK> 2964
<SHARES-COMMON-PRIOR> 1506
<ACCUMULATED-NII-CURRENT> 2038
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (81117)
<ACCUM-APPREC-OR-DEPREC> 21096
<NET-ASSETS> 526860
<DIVIDEND-INCOME> 1589
<INTEREST-INCOME> 52342
<OTHER-INCOME> 0
<EXPENSES-NET> (6212)
<NET-INVESTMENT-INCOME> 47719
<REALIZED-GAINS-CURRENT> 26433
<APPREC-INCREASE-CURRENT> 2635
<NET-CHANGE-FROM-OPS> 76787
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1579)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1998
<NUMBER-OF-SHARES-REDEEMED> (617)
<SHARES-REINVESTED> 76
<NET-CHANGE-IN-ASSETS> 13264
<ACCUMULATED-NII-PRIOR> 2426
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (83579)
<GROSS-ADVISORY-FEES> 3366
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6212
<AVERAGE-NET-ASSETS> 519768
<PER-SHARE-NAV-BEGIN> 8.19
<PER-SHARE-NII> 0.71
<PER-SHARE-GAIN-APPREC> 0.45
<PER-SHARE-DIVIDEND> (0.72)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.63
<EXPENSE-RATIO> 1.92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 081
<NAME> PHOENIX U.S.GOVT FUND SERIES A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 225705
<INVESTMENTS-AT-VALUE> 225627
<RECEIVABLES> 1470
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 227104
<PAYABLE-FOR-SECURITIES> 12975
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 702
<TOTAL-LIABILITIES> 13677
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 224360
<SHARES-COMMON-STOCK> 22018
<SHARES-COMMON-PRIOR> 24567
<ACCUMULATED-NII-CURRENT> 264
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (11119)
<ACCUM-APPREC-OR-DEPREC> (78)
<NET-ASSETS> 213427
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14855
<OTHER-INCOME> 0
<EXPENSES-NET> (2353)
<NET-INVESTMENT-INCOME> 12502
<REALIZED-GAINS-CURRENT> (2718)
<APPREC-INCREASE-CURRENT> (904)
<NET-CHANGE-FROM-OPS> 8880
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11753)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3190
<NUMBER-OF-SHARES-REDEEMED> (6420)
<SHARES-REINVESTED> 680
<NET-CHANGE-IN-ASSETS> (27327)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1016
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2353
<AVERAGE-NET-ASSETS> 225832
<PER-SHARE-NAV-BEGIN> 9.60
<PER-SHARE-NII> 0.52
<PER-SHARE-GAIN-APPREC> (0.15)
<PER-SHARE-DIVIDEND> (0.50)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.47
<EXPENSE-RATIO> 1.03
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 082
<NAME> PHOENIX U.S. GOVT FUND SERIES B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 225705
<INVESTMENTS-AT-VALUE> 225627
<RECEIVABLES> 1470
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 227104
<PAYABLE-FOR-SECURITIES> 12975
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 702
<TOTAL-LIABILITIES> 13677
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 224360
<SHARES-COMMON-STOCK> 516
<SHARES-COMMON-PRIOR> 382
<ACCUMULATED-NII-CURRENT> 264
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (11119)
<ACCUM-APPREC-OR-DEPREC> (78)
<NET-ASSETS> 213427
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14855
<OTHER-INCOME> 0
<EXPENSES-NET> (2353)
<NET-INVESTMENT-INCOME> 12502
<REALIZED-GAINS-CURRENT> (2718)
<APPREC-INCREASE-CURRENT> (904)
<NET-CHANGE-FROM-OPS> 8880
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (202)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 242
<NUMBER-OF-SHARES-REDEEMED> (119)
<SHARES-REINVESTED> 12
<NET-CHANGE-IN-ASSETS> 1220
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1016
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2353
<AVERAGE-NET-ASSETS> 225832
<PER-SHARE-NAV-BEGIN> 9.58
<PER-SHARE-NII> .44
<PER-SHARE-GAIN-APPREC> (0.14)
<PER-SHARE-DIVIDEND> (0.43)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.45
<EXPENSE-RATIO> 1.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 061
<NAME> PHOENIX MONEY MARKET FUND SERIES A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 225491
<INVESTMENTS-AT-VALUE> 225491
<RECEIVABLES> 1221
<ASSETS-OTHER> 100
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 226812
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23730
<TOTAL-LIABILITIES> 23730
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 203082
<SHARES-COMMON-STOCK> 192859
<SHARES-COMMON-PRIOR> 193534
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 203082
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 11196
<OTHER-INCOME> 0
<EXPENSES-NET> (1777)
<NET-INVESTMENT-INCOME> 9419
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9419
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9064)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1213
<NUMBER-OF-SHARES-REDEEMED> (1222)
<SHARES-REINVESTED> 8375
<NET-CHANGE-IN-ASSETS> (675)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 811
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1777
<AVERAGE-NET-ASSETS> 202759
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.47
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.47)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 062
<NAME> PHOENIX MONEY MARKET FUND SERIES B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 225491
<INVESTMENTS-AT-VALUE> 225491
<RECEIVABLES> 1221
<ASSETS-OTHER> 100
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 226812
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23730
<TOTAL-LIABILITIES> 23730
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 203802
<SHARES-COMMON-STOCK> 10223
<SHARES-COMMON-PRIOR> 8506
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 203082
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 11196
<OTHER-INCOME> 0
<EXPENSES-NET> (1777)
<NET-INVESTMENT-INCOME> 9419
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9419
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (355)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16992
<NUMBER-OF-SHARES-REDEEMED> (15557)
<SHARES-REINVESTED> 282
<NET-CHANGE-IN-ASSETS> 1717
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 811
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1777
<AVERAGE-NET-ASSETS> 202759
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.39
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.39)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
